Not everybody should be a homeowner
November, 21 at 6:28 pm
This is one of the smartest statements anybody has made in a long time and you can read the whole article on the San Francisco Chronicle web site.
The hard fact is, at any given time, no more than about 50 percent of the American population should own their own homes, at the very most. Everyone else should rent. Or live in a van.
It just makes more sense. He argued that any more than 50 percent ownership — the current rate is about 85 percent for married couples with kids and 70 percent for everyone overall — is fiscally irrational, actually does more harm than good to the economy, and that millions of Americans who own right now would’ve been far better off never buying at all (and not merely because all the foreclosures and lending debacles).
Posted in Politics, The Economy, Real Estate | No Comments »
Help us STOP the Auto Makers Bailout!
November, 21 at 7:31 am
I received this from Dick Armey today. Let’s help them out.
Since the 1970s, Detroit’s Big Three auto makers have failed to keep
up in the competitive auto industry. High labor costs and inflexible
work rules, as well as a failure to overcome negative consumer sentiments have combined to bring the Detroit-based auto manufacturers to their knees. Now they are begging the federal government for a bailout to the tune of $75 billion!
Take Action Now and send a message to Congress and the president that taxpayers should not have to pay for decades of bad business decisions by the Big Three auto makers.
Read the rest of this entry »
Posted in Politics, Bailout News, The Economy | 2 Comments »
The fall of the American Empire - Part II
November, 21 at 1:04 am
Sad but true. America won’t be the super power forever and it might not take too long for us to witness the fall of the American Empire.
According to Reuters:
WASHINGTON, Nov 20 (Reuters) - U.S. economic and political clout will decline over the next two decades and the world will be more dangerous, with food and water scarce and advanced weapons plentiful, U.S. spy agencies projected on Thursday.
The National Intelligence Council analysis “Global Trends 2025″ also said the current financial crisis on Wall Street is just the first phase of a global economic reordering.
The U.S. dollar’s role as the world’s major currency would weaken to become a “first among equals,” the report said.
Posted in Politics, The Economy | No Comments »
Bailouts, Bailouts , and more Bailouts
November, 14 at 12:28 pm
Oh, yes. Another bailout proposal. This time from the FDIC.
FDIC Loss Sharing Proposal to Promote Affordable Loan Modifications
Background
Although foreclosures are costly to lenders, borrowers and communities, the pace of loan modifications continues to be extremely slow (around 4 percent of seriously delinquent loans each month). It is imperative to provide incentives to achieve a sufficient scale in loan modifications to stem the reductions in housing prices and rising foreclosures.
Modifications should be provided using a systematic and sustainable process. The FDIC has initiated a systematic loan modification program at IndyMac Federal Bank to reduce first lien mortgage payments to as low as 31% of monthly income. Modifications are based on interest rate reductions, extension of term, and principal forbearance. A loss share guarantee on redefaults of modified mortgages can provide the necessary incentive to modify mortgages on a sufficient scale, while leveraging available government funds to affect more mortgages than outright purchases or specific incentives for every modification. The FDIC would be prepared to serve as contractor for Treasury and already has extensive experience in the IndyMac modification process.
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Posted in Politics, Bailout News, The Economy, Real Estate | 3 Comments »
No “HOPE” for homeowners
November, 13 at 6:46 pm
It looks like the 300 billion housing bailout plan passed by Congress last July is not working.
Hope for Homeowners was launched Oct. 1 as part of the Housing and Economic Recovery Act signed into law on July 30,2008. Proponents used a Congressional Budget Office estimate of 400,000 homeowners that could be helped over three years. The latest projection was that 19,000 applications would be received in the first year.
Well I doubt we’re all going to have to worry about that $300 billion. Here’s the reality: In the last two weeks, FHA received exactly 69 applications to the H4H program. Since the start of the program, a little over a month ago, it has received 111. Now I’m no mathematician, but that doesn’t exactly extrapolate out to 400,000 over three years or even 19,000 over one year or even over a few months. In fact, HUD took the projections out of the release.
Posted in Bailout News | 2 Comments »
Foreclosure rates up 25 percent in October
November, 13 at 1:52 pm
This from AP via Yahoo Finance:
MIAMI (AP) — The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed.
More than 279,500 U.S. homes received at least one foreclosure-related notice in October, an increase of 5 percent over September, according to RealtyTrac Inc. One in every 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank repossession.
More than 84,000 properties were repossessed in October, RealtyTrac said.
A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market. By the end of the year, the company expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.
Posted in Bailout News, Politics, California Housing Crash, Florida Housing Crash, The Economy, Real Estate | No Comments »
The bubble is bursting in Dubai
November, 12 at 7:19 pm
But no, our housing market is different, our economy is resilient. Home prices can only go up. Isn’t that what they all say?
Well, it turns out that Dubai was not that immune after all. Interesting article on the Wall Street Journal site:
DUBAI — This city’s six-year property boom appears finally to be over, with asking prices for some homes here falling as much as 19% in October from the previous month, according to a closely followed survey.
Home prices were climbing sharply as recently as the first half of this year. But over the summer and fall, tightened local lending collided with the global financial crisis to choke off easy credit. That scared away buyers, especially local and international property speculators who have helped fan years of price increases.
Posted in The Economy, Real Estate | No Comments »
Layoffs, Layoffs, and more Layoffs
November, 12 at 7:17 pm
From CNBC:
Applied Materials, the No. 1 computer chip-equipment maker, posted a smaller-than-expected drop in quarterly profit and said it will slash 1,800 jobs, or 12 percent of its workforce to cut costs, boosting its shares more than 5 percent.
The company said on Wednesday it expects the job cuts, which will begin in the fiscal 2009 first quarter and be completed at the end of that year, to generate annual savings of $400 million.
From USA Today:
Morgan Stanley unveils job cuts
NEW YORK — Morgan Stanley (MS) on Wednesday announced plans to cut 10% of the staff in its biggest business, which covers everything from investment banking to stock trading.
The nation’s No. 2 securities firm, which converted into a bank holding company in September, plans to scale back its most capital-intensive businesses before the end of the year. The layoffs inside the institutional securities group follow a 10% cut made earlier this year to the same group.
Morgan Stanley also plans to restructure its money management business by cutting 9% of the staff there.
It was not immediately clear how many positions will ultimately be eliminated from the company’s total ranks of about 44,000.
From CNNMoney:
NEW YORK (CNNMoney.com) — Global delivery company DHL announced Monday that it was cutting 9,500 jobs as it discontinues air and ground operations within the United States.
DHL’s 9,500 job cuts are on top of 5,400 job reductions announced earlier this year. After these layoffs, between 3,000 and 4,000 employees will remain at DHL’s U.S. operations, the company said.
Posted in The Economy | 1 Comment »
Bailouts, Lies, and Rock and Roll
November, 12 at 12:40 pm
We just learned that Hank Paulson decided not use any of the 700 billion bailout money to purchase toxic mortgages but instead he wants to keep using the money to inject more money in financial institutions. A couple of months ago, Congress passed the bailout plan based on the assumption that the Treasury Department was going to set up a reverse auction to buy mortgages.
We basically gave Paulson a blank check and he is now doing whatever he wants with it.
This is how USA Today is reporting the news:
WASHINGTON (AP) — Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.
Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.
He also announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.
Paulson said that 40% of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.
Posted in Politics, Bailout News, The Economy, Real Estate | 2 Comments »
The housing bailouts keep coming and the stock market keeps sinking
November, 11 at 7:50 pm
Another day, another bailout plan and Wall Street? Well, Wall Street didn’t like it. The Dow down 176 points. Is the Federal government ever going to learn that bailouts won’t fix the housing problem?
The Federal Housing Finance Agency (FHFA) came up with this bailout plan today:
ANSWERS ON THE STREAMLINED MODIFICATION PROGRAM
Q: What is a modification?
A: A modification is a change to the original mortgage terms. It may include a change to the product (an ARM to a fixed rate mortgage), interest rate, amortization term and maturity date, and/or unpaid principal balance. The change/s is made to create a more affordable payment for the borrower.
Q: What is a streamlined modification?
A: A streamlined modification is a modification that requires less documentation and less processing. In this case, the streamlined modification seeks to create a monthly mortgage payment that is sustainable for troubled borrowers by targeting a benchmark ratio of housing payment to monthly gross household income.
Posted in Bailout News, The Economy, Real Estate | No Comments »
