rm

The Real Reason the FHA Doesn't Need a Bailout

I have a liberal senator who "represents" me (represent = doing the exact OPPOSITE of what I think is best), and each time I read one of his love letters to the unwashed, he pats himself on the back for helping to make this or that "more affordable" I always wonder if he understands that he actually made it less so.

Barney Frank: Name Names

[We used to have something called moral hazard and it worked great.]

Yeah, and that rule still applies.

To homeowners.

Housing Is Moving Towards Disaster

[We assume that these folks can count better than that and there is a typo somewhere in the press release.]

Don't assume anything. Insiders know that their "information" is often faulty and outdated.

[Employment picks up significantly over the next 6-9 months, starting now.]

Not gonna happen. 80% of big co. CEO's have no plans to hire in the next 6-12 months. And even small business owners in thriving industries are hesitant to add employees due to the unpredictability, insanity and incompetence of this administration, not to mention the preferential treatment given to big biz by this administration.

Oh yeah, I forgot to mention the specter of health insurance "surcharges" and increased costs due to cap and trade.

Why Mortgage Modifications Have Failed

[We’ve tried the “let housing values fall’ plan, ]

Have we? When? Every federal initiative has been presented as a means to "backstop" housing prices.

[“as housing goes, so goes the general economy.” ]

So you advocate propagating the fake, bubble economy at whatever costs?

[The FDIC plan, and subsequent industry efforts, was designed to formulate custom solutions to each homeowners situation.]

Again, wrong. The FDIC plan was designed to STREAMLINE the process. As was the latest "Obama plan." The best way to handle these files- if you're looking for sustainability- is to do so on a case-by-case basis. Nearly every action taken to address this situation, by both the servicers and the feds, has been to figure out a way to handle the onslaught without having to provide adequate capacity increases.

A "one size fits none" approach, whether your proposed flavor or someone else's, will not make things better.

You're proposing a 6% rate with no NPV analysis. So if we can't get a win/win, you've now filled a niche: the lose/lose solution to the housing crisis.

[My proposal on this matter is that lender REO sales, or lender managed/participated sales (short sales) need to be priced within the middle of the range of the subject neighborhood. ]

Are you saying that they're "giving these homes away" by offering them at prices below their market value? Are you kidding me?

Your basic premise seems to be that if we can support housing prices, that the economy will be fixed. You're wrong. Housing prices were pushed far too high due to a number of artificial influences.

I, for one, have had enough of the "If we manipulate the numbers enough, we can pretend that everything's peachy" approach.

Let's not pretend. Let's just face the fact that homes are no longer worth their 2004 prices and get on with a REAL recovery, as opposed to a fake, engineered one.

Are Stocks Always Best for the Long Run?

What impact might the GM bankruptcy outcome have on those bond returns?

The Real Cause of Foreclosures: No Skin in the Game

Negative equity: Is this causation or correlation?

Hasn't anyone had any statistics here?

Just because there's a strong correlation doesn't mean it's a cause.

Thus far, nobody's been able to document a significant number of borrowers who are able to make their payments that choose to walk away.

Probably because it's not happening on a large scale.

What *is* happening is that those who fall behind because they CANNOT afford the payments- whether due to a temporary or permanent change- ARE looking at the LTV before deciding what to do.

That's not the same thing... although it's a much less interesting story.

Back in the U.S.S.A.

[The cost and expense of living in any country are part and parcel of the benefits one enjoys for living there.]

I hear this kind of statement frequently, and seems that the reasoning is to excuse our government for its stupidity, favoritism and incompetence.

And this excuse is usually offered to excuse yet another intrusion of the government into our lives... "It's a small price to pay."

I disagree with this premise TO MY CORE.

There is often little-to-no relationship- perhaps an INVERSE relationship between the stupidity, over-taxation and pointless regulation we endure and the benefits that we enjoy as a result of living here.

Obama Summarizes Economic Policies, Misses Several Key Points

[ would like to read in addition the reasoning behind your assertion and, perhaps, a few of the "real investments" you have in mind. ]

There are plenty of studies that show there is no correlation between education expenditures and test scores, graduation rates, etc.

I believe DC spends $15k per kid and yet is near the bottom nationally.

The best government "investment" is no investment at all. Name one problem that the government has "solved" and I'll name 10 that they've completely clustered up.

Seven Reasons the Market Has Already Bottomed

[Studies have also shown that tax breaks are more likely to be spent when in they're in the form of payroll modifications.]

Particularly when the amounts are so small. A big check is more likely to be carefully spent, while these little dribbles are more likely to be pissed away.

If they wanted this money to be SPENT, this is certainly a supremely effective method.

Not sure as to whether that's better for us or not, although I'm leaning towards the latter.

Seven Reasons the Market Has Already Bottomed

[1. Attractive House Prices

House prices have fallen 29% on average since their peak in July 2006. ]

Using the same logic, AIG, FNMA, FHLMC, etc. are screaming buys.

I don't think the decline is over yet.

Most of those who talk about how "attractive" house prices are right now are not actually in the market looking to buy right now.

So it's apparently a good time for everyone else to buy.

Obama Wants a 'Better Plan'? Here's One: Bite the Bullet

[I'm not certain how many "strong regional banks" there are to step up to the plate. ]

Are we to believe that if the big names in banking were allowed to fail that nobody will fill the void?

I find that hard to believe.

As a consumer and a business owner, I'd prefer a larger amount of choices in this area.

Surely there's some correlation between the consolidation in the banking industry and the increased focus of far too many resources on economic activity that produces little to no real value.

Stop Trying to Jump-Start the Consumer - Barron's Interview

[If I spend all my income this year, but make $50K in the stock market, the govt says that my savings rate is 0. ]

Okay, so if you spend all your income this year, LOSE $50k in the stock market, then what is your savings rate?

In Defense of Peter Schiff: A Response to Mish

[You can know everything there is to know about boxing, but until you get your butt in the ring and take a couple smacks to the head, you won't likely get very close to being champion.]

I love the Mike Tyson quote: "Everyone's got a plan until they get hit."

Credit Where Credit Is Due

[In addition, while business loans increase our capital stock and lead to greater productivity, loans made to consumers are merely spent, and do not create conditions that will make repayment easier. ]

In much the same way, it seems this new stimulus bill won't create greater productivity, nor will it create sustainable jobs.

More like a "belch" into the economy than a breath of life.

Why the Stimulus Plan Won't Work

[What’s worse news for the economy is the fact that many of these people are realizing that they can survive on less… and therefore may not go back to their old spending habits as quickly as the markets, particularly retail, would like.]

It's already happening.

I work with homeowners in default, and I can tell you this:

People are being FORCED to look at their spending.

Small business people are being FORCED to look at (create) P&L's (you wouldn't believe how many ask "What's a P&L?").

And... many, many people are waking up to the fact that a fair amount of their discretionary spending has not yielded a lot of value.

There was a time when folks could let their dollars come and go as they pleased, "re-charging" their credit lines via the house-ATM. And nobody seemed to notice that a lot of the stuff that they bought wasn't really worthwhile. It didn't matter, because you could just move on to the next purchase.

Those days are over.

It's not that they may not choose to go back to their old spending habits, it's that they won't be able to.