DCM's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/61142/comments http://seekingalpha.com/article/99544-the-bottom-s-within-sight-barron-s?source=feed#comment-280415 280415 as a tactic to evade doing anything to benefit the majority of Americans.

Now that financial armageddon has come to the world, who are the first to be saved? The wealthy!!!! As this world wide depression sweeps the planet, I think there is a chance that we may see a significant amount of class warfare erupt. It may get very ugly, before it gets better, but it will get better!

]]> Sun, 12 Oct 2008 09:46:35 -0400 as a tactic to evade doing anything to benefit the majority of Americans.

Now that financial armageddon has come to the world, who are the first to be saved? The wealthy!!!! As this world wide depression sweeps the planet, I think there is a chance that we may see a significant amount of class warfare erupt. It may get very ugly, before it gets better, but it will get better!

]]> http://seekingalpha.com/article/99504-what-does-warren-buffett-see-in-general-electric?source=feed#comment-280363 280363
The fact is I am having trouble finding good short candidates because most stocks are soooo..... oversold right now. Good Luck and I hope we all come out alive.

As far as the article goes, did anyone learn anything from it?]]> Sun, 12 Oct 2008 08:30:00 -0400
The fact is I am having trouble finding good short candidates because most stocks are soooo..... oversold right now. Good Luck and I hope we all come out alive.

As far as the article goes, did anyone learn anything from it?]]> http://seekingalpha.com/article/98477-iceland-when-too-big-to-fail-becomes-too-big-to-rescue?source=feed#comment-273611 273611 Sat, 04 Oct 2008 18:40:20 -0400 http://seekingalpha.com/article/96095-new-home-construction-plunges-to-17-year-low?source=feed#comment-257800 257800
What in the world are these builders thinking? Would like to know which banks are lending construction money and WHY? Like we need more housing units on the market to meet the enormous demand! ]]> Thu, 18 Sep 2008 08:19:59 -0400
What in the world are these builders thinking? Would like to know which banks are lending construction money and WHY? Like we need more housing units on the market to meet the enormous demand! ]]> http://seekingalpha.com/article/95315-how-long-until-housing-prices-stabilize?source=feed#comment-253981 253981
I would also like to see charts on the number of new jobs being created in relation to the increase in population. And given an increase in both population and jobs, what effect would this have on income levels?

Assuming housing supply stays constant, if housing demand does not significantly increase as the result of any combination of job creation, wage increases, household equity increase, immigration or foreign investment, it does not seem likely that we will reach an equilibrium between housing demand and supply anytime soon.

What seems particularly ludicrous to me is any discussion of building new housing units on the top of the already burgeoning supply of homes on the market. It seems to me that the future for the construction trades will be in rehab and renovation. ]]> Sun, 14 Sep 2008 10:56:57 -0400
I would also like to see charts on the number of new jobs being created in relation to the increase in population. And given an increase in both population and jobs, what effect would this have on income levels?

Assuming housing supply stays constant, if housing demand does not significantly increase as the result of any combination of job creation, wage increases, household equity increase, immigration or foreign investment, it does not seem likely that we will reach an equilibrium between housing demand and supply anytime soon.

What seems particularly ludicrous to me is any discussion of building new housing units on the top of the already burgeoning supply of homes on the market. It seems to me that the future for the construction trades will be in rehab and renovation. ]]> http://seekingalpha.com/article/94581-the-government-s-moral-hazard-with-fannie-and-freddie?source=feed#comment-249323 249323
For the record, I agree with the statement and the premise set forth in this article. I for one am not going to pay another tax dollar to a government that takes my money to protect and bailout the wealthy elite. Make no mistake - the wealthy pay billions to Washington politicians (primarily Republicans) to protect and grow their wealth into the trillons. Wake Up America! I was going to say before its too late but I think it already is.]]> Tue, 09 Sep 2008 10:53:59 -0400
For the record, I agree with the statement and the premise set forth in this article. I for one am not going to pay another tax dollar to a government that takes my money to protect and bailout the wealthy elite. Make no mistake - the wealthy pay billions to Washington politicians (primarily Republicans) to protect and grow their wealth into the trillons. Wake Up America! I was going to say before its too late but I think it already is.]]> http://seekingalpha.com/article/92874-a-spurious-solution-to-the-housing-crisis?source=feed#comment-240051 240051
The solution should not be forcing taxpayers to bail out the wealthy and prosperous people and their institutions that knowingly corrupted the secondary mortgage markets and inflated the bubble. The solution should have been to immediately contain and stabilize the housing market at the expense of those who benefited the most over the previous 8 years. I ask you, how is it possible to ever reach a “bottom” when each month more homes become available for sale while there are fewer and fewer qualified buyers. The last thing banks should be doing is foreclosing on homes and selling them at fire sale prices. Homebuilders also need to be stopped from building more homes.

The way to turn this around is to require lenders to renegotiate existing mortgages at lower interest rates and eliminate the acceleration clause (allow mortgages to be assumable.) The mortgage payment at 2% is about 30% less versus a 6% interest rate. (For example, a $100,000 mortgage, the payment decreases from $745 to $515.) If lenders need to increase yield to investors, they can slightly discount the principal. Remember, lender’s generate the largest share of revenue up front in closing costs and discount points. Servicing fees are revenue producing but not profitable. Looking ahead, how bright is the future for mortgage lending in this country over the next 10 to 20 years anyway? I suggest that the aforementioned approach is potentially better than the current one of banks taking write downs; and/or, the government bailing out lenders and investment banks, or backstopping Fannie Mae, Freddy Mac and the FDIC.]]> Wed, 27 Aug 2008 10:59:20 -0400
The solution should not be forcing taxpayers to bail out the wealthy and prosperous people and their institutions that knowingly corrupted the secondary mortgage markets and inflated the bubble. The solution should have been to immediately contain and stabilize the housing market at the expense of those who benefited the most over the previous 8 years. I ask you, how is it possible to ever reach a “bottom” when each month more homes become available for sale while there are fewer and fewer qualified buyers. The last thing banks should be doing is foreclosing on homes and selling them at fire sale prices. Homebuilders also need to be stopped from building more homes.

The way to turn this around is to require lenders to renegotiate existing mortgages at lower interest rates and eliminate the acceleration clause (allow mortgages to be assumable.) The mortgage payment at 2% is about 30% less versus a 6% interest rate. (For example, a $100,000 mortgage, the payment decreases from $745 to $515.) If lenders need to increase yield to investors, they can slightly discount the principal. Remember, lender’s generate the largest share of revenue up front in closing costs and discount points. Servicing fees are revenue producing but not profitable. Looking ahead, how bright is the future for mortgage lending in this country over the next 10 to 20 years anyway? I suggest that the aforementioned approach is potentially better than the current one of banks taking write downs; and/or, the government bailing out lenders and investment banks, or backstopping Fannie Mae, Freddy Mac and the FDIC.]]> http://seekingalpha.com/article/78575-a-self-serving-non-solution-to-negative-equity-in-america?source=feed#comment-172642 172642
Given this popular self-serving mentality found in America today, it comes as no surprise that any solution to this uniquely profound mess were in, will always meet resistance from the haves. To quote Shedlock, “The real problem in the US is that home prices are still too high and those prices need to come down, not propped up by self serving bailouts.” Mr. Ross’s solution may be self-serving but it may also serve the needs of millions of Americans. I think there is a better solution but to denounce it because it is self-serving is irresponsible. You would think it would be clear by now, that if a solution is not found for this unprecedented economic fiasco, the fallout is going to grow even more painful and become more protracted. Letting the market work it out and not doing anything for millions of Americans is totally irresponsible. If this market is left to work itself out, the damage is going to be a hundred times more horrific than Katrina.

Mr. Shedlock, I have for you and your ilk, the same disgust as you do for the “self-serving” Mr. Ross. You’re just as self-serving! You oppose a taxpayer bailout. “What's unreasonable is to expect those not in trouble to bail out those in trouble.” I would suggest that this country is in great economic trouble and it is affecting most Americans. All too many people have this attitude of protecting their own at the expense of all others. Since Katrina, the attitude of most in the country is that “those people” had no business building homes below sea level, and they should not expect to be bailed out because they did not have insurance to cover their loss. The attitude of it's their problem, don't look to me for help only pushes more people into economic distress which the taxpayer ultimately pays for.

I hope baby boomers nearing retirement are paying close attention to the self-serving attitudes of Mr. Shedlock and his kind. For most of you, your primary retirement nest egg is evaporating by the minute. “Analysts have forecast that by June 30, 10.6m families will have either no equity in their homes or a negative equity.” This is an alarming statistic given that about 70% of the 80 million families in America own a home and that this situation is forecasted to get much worse. We could have one in four families with no or negative equity in their homes. What about the people that lost only 50 to 100% of their equity? For those of you in your 20’s, 30’s or even 40’s, a 50% to 100% decrease in equity may seem like no big deal as there will be time to recover. However, how can you assume that prices will bounce back? Is it because they have before? Our country has never experienced an economy like today’s nor a housing bubble of this magnitude. All the circumstances that led us to this point have never been experienced before. As long as we have more homes than buyers, mortgage debt greater than home values, and an illiquid marketplace, it is hard to imagine how home values could increase across the board until these dynamics change.

Maybe Mr. Ross’s solution is the wrong one but it is not wrong because it is self-serving. The wealth in this country has never been more disproportionate. The people who benefited from the housing bubble (investors, lenders, builders, and all the ancillary real estate actors) are not being held accountable for their greedy and self-serving actions. Punishing people foolish enough to pursue the dream of homeownership and those gawd awful small time home flippers is not the answer. You keep pushing these people lower on the food chain and I promise you, the taxpayer's bill will only go up. The government needs to step in and take steps to reallocate wealth in America because our free market capitalism is darn sure not going to do it.
]]> Fri, 23 May 2008 11:21:18 -0400
Given this popular self-serving mentality found in America today, it comes as no surprise that any solution to this uniquely profound mess were in, will always meet resistance from the haves. To quote Shedlock, “The real problem in the US is that home prices are still too high and those prices need to come down, not propped up by self serving bailouts.” Mr. Ross’s solution may be self-serving but it may also serve the needs of millions of Americans. I think there is a better solution but to denounce it because it is self-serving is irresponsible. You would think it would be clear by now, that if a solution is not found for this unprecedented economic fiasco, the fallout is going to grow even more painful and become more protracted. Letting the market work it out and not doing anything for millions of Americans is totally irresponsible. If this market is left to work itself out, the damage is going to be a hundred times more horrific than Katrina.

Mr. Shedlock, I have for you and your ilk, the same disgust as you do for the “self-serving” Mr. Ross. You’re just as self-serving! You oppose a taxpayer bailout. “What's unreasonable is to expect those not in trouble to bail out those in trouble.” I would suggest that this country is in great economic trouble and it is affecting most Americans. All too many people have this attitude of protecting their own at the expense of all others. Since Katrina, the attitude of most in the country is that “those people” had no business building homes below sea level, and they should not expect to be bailed out because they did not have insurance to cover their loss. The attitude of it's their problem, don't look to me for help only pushes more people into economic distress which the taxpayer ultimately pays for.

I hope baby boomers nearing retirement are paying close attention to the self-serving attitudes of Mr. Shedlock and his kind. For most of you, your primary retirement nest egg is evaporating by the minute. “Analysts have forecast that by June 30, 10.6m families will have either no equity in their homes or a negative equity.” This is an alarming statistic given that about 70% of the 80 million families in America own a home and that this situation is forecasted to get much worse. We could have one in four families with no or negative equity in their homes. What about the people that lost only 50 to 100% of their equity? For those of you in your 20’s, 30’s or even 40’s, a 50% to 100% decrease in equity may seem like no big deal as there will be time to recover. However, how can you assume that prices will bounce back? Is it because they have before? Our country has never experienced an economy like today’s nor a housing bubble of this magnitude. All the circumstances that led us to this point have never been experienced before. As long as we have more homes than buyers, mortgage debt greater than home values, and an illiquid marketplace, it is hard to imagine how home values could increase across the board until these dynamics change.

Maybe Mr. Ross’s solution is the wrong one but it is not wrong because it is self-serving. The wealth in this country has never been more disproportionate. The people who benefited from the housing bubble (investors, lenders, builders, and all the ancillary real estate actors) are not being held accountable for their greedy and self-serving actions. Punishing people foolish enough to pursue the dream of homeownership and those gawd awful small time home flippers is not the answer. You keep pushing these people lower on the food chain and I promise you, the taxpayer's bill will only go up. The government needs to step in and take steps to reallocate wealth in America because our free market capitalism is darn sure not going to do it.
]]> http://seekingalpha.com/article/78398-did-we-learn-anything-over-the-past-two-years?source=feed#comment-171706 171706
So now I have to wonder, why wouldn’t a bank want to make a mortgage loan if at all reasonably possible on an appreciating asset (vs. a depreciating asset) selling at a heavy discount? Why would a bank foreclose on a property only to have to turn around and sell it at a bigger discount and with additional costs (carrying costs, repair and maintenance) when they could go to their customer and say bring me a warm body with a possibility of making payments at a very competitive fixed interest rate? The worst case scenario is that sometime in the future they have to take the property back or find a new borrower.

The banks are getting smarter about how they handle risk loss with credit card and auto loan customers. The irony is that there is no security on one and depreciating security on the other. If I was a lender, I would much rather hold a portfolio of loans on assets that have the potential to appreciate. Right now is an excellent time for banks to increase their risk reward ratio. What I am suggesting is that banks/lenders look at the real estate market like a savvy investor looks at the stock market. The savvy investor buys when others are selling and sells when others are buying. Like investors who invested in stocks in 2000 and 2006, borrowers continued to increase mortgage amounts when housing prices were skyrocketing to finally an unsustainable level. Banks acted like greedy unprofessional investors and made loans when the reward risk ratio was extremely low. Now, when the reward risk ratio is high, lenders are not lending and borrowers can’t borrow. It makes no sense! Lenders supported by government backed securitization should be aggressively expanding their portfolios by loosening credit underwriting standards (property and borrower.) What better way to get REO’s off the books and liquefy the housing market.

Banks and borrowers need to approach home ownership and lending from a different perspective. Borrowers need to stop looking at home purchases as an investment or potential retirement nest egg. Owning versus renting should be strictly a lifestyle choice. The lenders need to approach home lending from a macro investment approach. They need to lend money at times when the risk reward ratio will support lending. This approach will eliminate the chance of making loans based on rising home prices versus lending to borrowers only when their income and net worth can justify higher home prices. This approach would in effect act like a governor controlling the speed of a train.

These are just some thoughts - comments welcomed.]]> Thu, 22 May 2008 10:02:11 -0400
So now I have to wonder, why wouldn’t a bank want to make a mortgage loan if at all reasonably possible on an appreciating asset (vs. a depreciating asset) selling at a heavy discount? Why would a bank foreclose on a property only to have to turn around and sell it at a bigger discount and with additional costs (carrying costs, repair and maintenance) when they could go to their customer and say bring me a warm body with a possibility of making payments at a very competitive fixed interest rate? The worst case scenario is that sometime in the future they have to take the property back or find a new borrower.

The banks are getting smarter about how they handle risk loss with credit card and auto loan customers. The irony is that there is no security on one and depreciating security on the other. If I was a lender, I would much rather hold a portfolio of loans on assets that have the potential to appreciate. Right now is an excellent time for banks to increase their risk reward ratio. What I am suggesting is that banks/lenders look at the real estate market like a savvy investor looks at the stock market. The savvy investor buys when others are selling and sells when others are buying. Like investors who invested in stocks in 2000 and 2006, borrowers continued to increase mortgage amounts when housing prices were skyrocketing to finally an unsustainable level. Banks acted like greedy unprofessional investors and made loans when the reward risk ratio was extremely low. Now, when the reward risk ratio is high, lenders are not lending and borrowers can’t borrow. It makes no sense! Lenders supported by government backed securitization should be aggressively expanding their portfolios by loosening credit underwriting standards (property and borrower.) What better way to get REO’s off the books and liquefy the housing market.

Banks and borrowers need to approach home ownership and lending from a different perspective. Borrowers need to stop looking at home purchases as an investment or potential retirement nest egg. Owning versus renting should be strictly a lifestyle choice. The lenders need to approach home lending from a macro investment approach. They need to lend money at times when the risk reward ratio will support lending. This approach will eliminate the chance of making loans based on rising home prices versus lending to borrowers only when their income and net worth can justify higher home prices. This approach would in effect act like a governor controlling the speed of a train.

These are just some thoughts - comments welcomed.]]> http://seekingalpha.com/article/77629-the-home-start-numbers-are-not-a-positive?source=feed#comment-169363 169363 Sat, 17 May 2008 13:25:54 -0400 http://seekingalpha.com/article/77352-get-ready-to-short-homebuilders?source=feed#comment-167955 167955
The reason we have an historically high inventory is because there are fewer qualified buyers. Most potential buyers are not waiting on the sidelines for prices to fall further (i.e become more affordable.) Most are not buying because they cannot sell the homes they live in now! It is going to take an unprecedented number of qualified first-time home buyers to soak up the current excess inventory of homes. Given the new (old) lending standards, it does not seem likely that this is going to happen anytime soon. This is one time I hope I am mistaken and am missing something here.]]> Thu, 15 May 2008 09:07:14 -0400
The reason we have an historically high inventory is because there are fewer qualified buyers. Most potential buyers are not waiting on the sidelines for prices to fall further (i.e become more affordable.) Most are not buying because they cannot sell the homes they live in now! It is going to take an unprecedented number of qualified first-time home buyers to soak up the current excess inventory of homes. Given the new (old) lending standards, it does not seem likely that this is going to happen anytime soon. This is one time I hope I am mistaken and am missing something here.]]> http://seekingalpha.com/article/74547-those-who-know-and-those-who-don-t?source=feed#comment-158565 158565 Is it not possible to have a bottom in the price of housing stocks and still see declines in the prices of homes? I don't think their is a direct correlation between the two but I may be wrong.

The bigger question is how can builders maintain any profit margin when building costs are staying level if not increasing and sale prices are declining by 30 to 40%? Were profit margins that enormous (40 to 50%) at the beginning of this decade? I was under the assumption that builders were operating at about 20 to 30%, in which case there should not be any profit margin left. Assuming that traditional credit underwriting will remain the norm where are the buyers going to come from? In many previously active markets, there is a 3 to 5 year supply of homes. How can a builder sell into an oversupply of existing homes that sell at a discount to new construction? I must be missing something here.
]]> Tue, 29 Apr 2008 10:02:19 -0400 Is it not possible to have a bottom in the price of housing stocks and still see declines in the prices of homes? I don't think their is a direct correlation between the two but I may be wrong.

The bigger question is how can builders maintain any profit margin when building costs are staying level if not increasing and sale prices are declining by 30 to 40%? Were profit margins that enormous (40 to 50%) at the beginning of this decade? I was under the assumption that builders were operating at about 20 to 30%, in which case there should not be any profit margin left. Assuming that traditional credit underwriting will remain the norm where are the buyers going to come from? In many previously active markets, there is a 3 to 5 year supply of homes. How can a builder sell into an oversupply of existing homes that sell at a discount to new construction? I must be missing something here.
]]> http://seekingalpha.com/article/73603-anti-foreclosure-measures-and-lenders-rights-housing-tracker?source=feed#comment-155777 155777 I basically agree with your premise and conclusion. However, it should be pointed out that credit underwriting standards have reverted back to having "good" credit to qualify. The percentage of people who have good credit is disturbingly low. It is hard to imagine where the buyers are going to come from to buy the existing housing available, regardless of price.

What troubles me is that builders keep building (at least in my area) which adds to our 4 year supply of homes for sale. Construction materials and labor costs have not significantly declined. Therefore, new construction per square foot costs are about the same which by rough calculation is $50 to $75 per square foot higher than our existing house's asking price! I assume that bulders are not going to build and then turnaround and sell for a loss. So, the question is how can builders continue to get construction loans or better yet, what kind of idiot lender would lend money with little hope of ever getting paid in this lifetime? In any case, it is insanity to add more housing to an already multi-year oversupply of houses on the market.

Recovery? Bottom? I will believe we are on the road to a housing recovery when there is a total stop to building new homes. Yes, if construction does stop, it will be hard on the economy - many jobless and the building material industry will be rocked to the core. But someone, please give me an alternative solution because increasing the housing supply can't be the answer.]]> Thu, 24 Apr 2008 08:53:16 -0400 I basically agree with your premise and conclusion. However, it should be pointed out that credit underwriting standards have reverted back to having "good" credit to qualify. The percentage of people who have good credit is disturbingly low. It is hard to imagine where the buyers are going to come from to buy the existing housing available, regardless of price.

What troubles me is that builders keep building (at least in my area) which adds to our 4 year supply of homes for sale. Construction materials and labor costs have not significantly declined. Therefore, new construction per square foot costs are about the same which by rough calculation is $50 to $75 per square foot higher than our existing house's asking price! I assume that bulders are not going to build and then turnaround and sell for a loss. So, the question is how can builders continue to get construction loans or better yet, what kind of idiot lender would lend money with little hope of ever getting paid in this lifetime? In any case, it is insanity to add more housing to an already multi-year oversupply of houses on the market.

Recovery? Bottom? I will believe we are on the road to a housing recovery when there is a total stop to building new homes. Yes, if construction does stop, it will be hard on the economy - many jobless and the building material industry will be rocked to the core. But someone, please give me an alternative solution because increasing the housing supply can't be the answer.]]> http://seekingalpha.com/article/71907-the-fed-is-terrified?source=feed#comment-149423 149423
I suggest that for those of you that think that the answer is to punish all the people who have been living beyond their means, you can rest easy, as that is exactly what is happening and is certain to continue. By one estimate, at least $2 trillion of equity will be eradicated as the result of this housing bust. Will the market come back? Will housing prices increase? Maybe someday but given the systemic problems in the lending system that led to this bust, it is unlikely that credit will be eased and even if it were, will there be investors willing to buy sub-prime mortgages again? The only way home equity will increase will be as mortgage principal is paid down. With retirement looming, many of us baby boomers, who have endured many inflationary periods since entering the work force and who have seen a large percentage of our jobs and careers lost and/or outsourced to high tech and third world countries, now face the prospect of little or no retirement savings, social security nor equity from our homes. Given the foreseeable future, we are in for hyperinflationary times and with no medical safety net until we qualify for Medicare and how long or to what level will that remain intact?

A large percentage of the baby boom generation is going to get completely screwed over. But, I am sure some of you think, we are just being whiney! The irony here is that many of you are the offspring of baby boomers and we brought you into this world, raised you and educated you. It is true we borrowed a lot of money and often lived beyond our means but we also became two income families and took second jobs to raise a family and have some comforts. Now that our kids are adults and prospering in this new high-tech economy, you are ready and willing to throw us under the bus for our errs.]]> Sat, 12 Apr 2008 09:18:17 -0400
I suggest that for those of you that think that the answer is to punish all the people who have been living beyond their means, you can rest easy, as that is exactly what is happening and is certain to continue. By one estimate, at least $2 trillion of equity will be eradicated as the result of this housing bust. Will the market come back? Will housing prices increase? Maybe someday but given the systemic problems in the lending system that led to this bust, it is unlikely that credit will be eased and even if it were, will there be investors willing to buy sub-prime mortgages again? The only way home equity will increase will be as mortgage principal is paid down. With retirement looming, many of us baby boomers, who have endured many inflationary periods since entering the work force and who have seen a large percentage of our jobs and careers lost and/or outsourced to high tech and third world countries, now face the prospect of little or no retirement savings, social security nor equity from our homes. Given the foreseeable future, we are in for hyperinflationary times and with no medical safety net until we qualify for Medicare and how long or to what level will that remain intact?

A large percentage of the baby boom generation is going to get completely screwed over. But, I am sure some of you think, we are just being whiney! The irony here is that many of you are the offspring of baby boomers and we brought you into this world, raised you and educated you. It is true we borrowed a lot of money and often lived beyond our means but we also became two income families and took second jobs to raise a family and have some comforts. Now that our kids are adults and prospering in this new high-tech economy, you are ready and willing to throw us under the bus for our errs.]]> http://seekingalpha.com/article/71536-market-bottom-already-i-don-t-think-so?source=feed#comment-146894 146894 Tue, 08 Apr 2008 09:30:59 -0400 http://seekingalpha.com/article/70830-gold-bubble-may-be-coming-to-an-end?source=feed#comment-135118 135118
With regard to inflation - maybe, possibly from a strict economic definition, we are not experiencing inflation. However, no one needs to be told that living costs are increasing and a dollar buys less every day. In the past 2-3 years, as net worth has declined, and wages have remained relatively stagnant, living expenses have jumped much higher. The net effect is that most Americans are much worse off today since the Republicans hijacked the country (and the Constitution along with it) and basically handed it over to the wealthy elite. ]]> Wed, 02 Apr 2008 09:00:01 -0400
With regard to inflation - maybe, possibly from a strict economic definition, we are not experiencing inflation. However, no one needs to be told that living costs are increasing and a dollar buys less every day. In the past 2-3 years, as net worth has declined, and wages have remained relatively stagnant, living expenses have jumped much higher. The net effect is that most Americans are much worse off today since the Republicans hijacked the country (and the Constitution along with it) and basically handed it over to the wealthy elite. ]]> http://seekingalpha.com/article/70654-bill-gross-if-housing-prices-decline-further-so-does-the-economy?source=feed#comment-134510 134510
Mr. Gross makes several valid points. I would add, retirees are struggling in this inflationary economy. The prices of food, electricity, gas, health care are soaring while personal savings is dwindling. Gas prices have gone up 3 fold in the past 4 years while interest rates for savings accounts have stagnated at around 2-3% resulting in an erosion of buying power. For many now, their primary nest egg, their home has lost anywhere from 10 to 50% of equity IF they can sell their home at all. Also, for baby boomers approaching retirement, the outlook is especially bleak. Corporate retirement plans and 401k’s have been cut, personal retirement plans have seen huge losses and investments in real estate and the stock market have been set back for years. Those people in their middle years and younger will at least have some time to rebound but those looking for social security to save them may be sorely disappointed and I would certainly not want to bet on the U.S. economy being some kind of super power in the decades to come. Food and energy costs will never moderate and will be the primary driving forces in world economy for the foreseeable future.

The fat cats who really created the sub-prime mess are getting off much too easy thanks in large part to our government and the culture of the rich protecting their own. Those blaming small time investors and homeowners for this mess are just plain ignorant. Loans were made that should not have been made, developers and builders grossly overbuilt and overbought, interest rates were kept artificially low by the Federal Reserve, construction costs (labor and material) were on a rapid increase and all of this was made possible and sustained by easy money. With plentiful amounts of money to loan, lenders relaxed credit underwriting standards in an effort to get as many loans booked as possible. Lenders knew these loans were going to be packaged and sold off as securities. They weren't going to be on the hook for any defaults. Big investment and commercial banks eagerly invested in and sold these blocks of high yielding loans to willing greedy investors. While it lasted, the wealthy elite made billion's but now the taxpayer and the average American family will ultimately pay the price. Rest assured our government is not going to punish the wealthy elite or in other words the hand that feeds them. ]]> Tue, 01 Apr 2008 09:59:44 -0400
Mr. Gross makes several valid points. I would add, retirees are struggling in this inflationary economy. The prices of food, electricity, gas, health care are soaring while personal savings is dwindling. Gas prices have gone up 3 fold in the past 4 years while interest rates for savings accounts have stagnated at around 2-3% resulting in an erosion of buying power. For many now, their primary nest egg, their home has lost anywhere from 10 to 50% of equity IF they can sell their home at all. Also, for baby boomers approaching retirement, the outlook is especially bleak. Corporate retirement plans and 401k’s have been cut, personal retirement plans have seen huge losses and investments in real estate and the stock market have been set back for years. Those people in their middle years and younger will at least have some time to rebound but those looking for social security to save them may be sorely disappointed and I would certainly not want to bet on the U.S. economy being some kind of super power in the decades to come. Food and energy costs will never moderate and will be the primary driving forces in world economy for the foreseeable future.

The fat cats who really created the sub-prime mess are getting off much too easy thanks in large part to our government and the culture of the rich protecting their own. Those blaming small time investors and homeowners for this mess are just plain ignorant. Loans were made that should not have been made, developers and builders grossly overbuilt and overbought, interest rates were kept artificially low by the Federal Reserve, construction costs (labor and material) were on a rapid increase and all of this was made possible and sustained by easy money. With plentiful amounts of money to loan, lenders relaxed credit underwriting standards in an effort to get as many loans booked as possible. Lenders knew these loans were going to be packaged and sold off as securities. They weren't going to be on the hook for any defaults. Big investment and commercial banks eagerly invested in and sold these blocks of high yielding loans to willing greedy investors. While it lasted, the wealthy elite made billion's but now the taxpayer and the average American family will ultimately pay the price. Rest assured our government is not going to punish the wealthy elite or in other words the hand that feeds them. ]]> http://seekingalpha.com/article/67851-ubs-u-s-bailout-for-homeowners-will-arrive-by-october?source=feed#comment-125022 125022
In the past 2 years my financial position is in the toilet because of this entire housing/sub-prime/cred... crunch crisis. I am approaching retirement and right now I cannot afford to retire. I did nothing wrong and held up my end of every financial obligation I entered into. Yet, a few extremely wealthy people are getting away Scott free having received billions of dollars in compensation (salary and bonuses) for getting us into this mess. Greed is rampant and unchecked in our capitalistic society. I am all for getting ahead, but not at the expense of my fellow Americans. The monetary policy of this country amounts to trying to put out a raging inferno by pissing on it. Now the taxpayer is going to subsidize all these transgressions by the wealthy; the rich will keep their billions; and, I guarantee you, they will be in position to capitalize on these down markets and get even richer in the years to come. Of course, Congress and whoever’s President will be paid off to protect their wealthy patrons. And, the corporate owned mainstream media will cleverly cast this all so that the wealthy are not implicated by blaming people for taking out mortgages they cannot afford. We are screwed!!]]> Tue, 11 Mar 2008 09:35:48 -0400
In the past 2 years my financial position is in the toilet because of this entire housing/sub-prime/cred... crunch crisis. I am approaching retirement and right now I cannot afford to retire. I did nothing wrong and held up my end of every financial obligation I entered into. Yet, a few extremely wealthy people are getting away Scott free having received billions of dollars in compensation (salary and bonuses) for getting us into this mess. Greed is rampant and unchecked in our capitalistic society. I am all for getting ahead, but not at the expense of my fellow Americans. The monetary policy of this country amounts to trying to put out a raging inferno by pissing on it. Now the taxpayer is going to subsidize all these transgressions by the wealthy; the rich will keep their billions; and, I guarantee you, they will be in position to capitalize on these down markets and get even richer in the years to come. Of course, Congress and whoever’s President will be paid off to protect their wealthy patrons. And, the corporate owned mainstream media will cleverly cast this all so that the wealthy are not implicated by blaming people for taking out mortgages they cannot afford. We are screwed!!]]> http://seekingalpha.com/article/64776-real-estate-brokers-must-hate-economists?source=feed#comment-116722 116722
Nevertheless, it must be acknowledged that buyers and sellers are seldom best served by their respective real estate agent because of the nature of commission sales. Are there exceptional agents who’s motives are completely altruistic? Of course, but you can imagine, they are few and far between. There is little doubt in my mind that the real estate industry needs to be completely revamped for the sake of the client. Agency agreements between agents and buyer/seller need to be revised to reflect specific obligations and functions that must be performed for compensation or face remunerative penalties. Further, compensation should be fixed or at the least broadly bracketed based on sale’s price AND based on services provided AND current market conditions. A seller should be willing to pay for greater market exposure and time to sell in slow markets like today’s. I believe most agents would agree that there is little difference in the amount of work, time and expense between selling a $100,000 property and $1,000,000 property again assuming they are doing their job to the fullest. On the other hand, selling a home in a slow market is completely different than selling in an active market. Commission sales does not fairly address sales price or market conditions.

Articles such as this do an injustice to these kind of topics when less than half the story is told. Unfortunately, as so often is the case, articles in this genre never correctly, completely or properly summarize referenced studies and other articles. On the other hand, readers seldom have the time or inclination to get the whole story as it applies specifically to them. The comments posted thus far reflect the articles value.]]> Sun, 17 Feb 2008 09:45:22 -0500
Nevertheless, it must be acknowledged that buyers and sellers are seldom best served by their respective real estate agent because of the nature of commission sales. Are there exceptional agents who’s motives are completely altruistic? Of course, but you can imagine, they are few and far between. There is little doubt in my mind that the real estate industry needs to be completely revamped for the sake of the client. Agency agreements between agents and buyer/seller need to be revised to reflect specific obligations and functions that must be performed for compensation or face remunerative penalties. Further, compensation should be fixed or at the least broadly bracketed based on sale’s price AND based on services provided AND current market conditions. A seller should be willing to pay for greater market exposure and time to sell in slow markets like today’s. I believe most agents would agree that there is little difference in the amount of work, time and expense between selling a $100,000 property and $1,000,000 property again assuming they are doing their job to the fullest. On the other hand, selling a home in a slow market is completely different than selling in an active market. Commission sales does not fairly address sales price or market conditions.

Articles such as this do an injustice to these kind of topics when less than half the story is told. Unfortunately, as so often is the case, articles in this genre never correctly, completely or properly summarize referenced studies and other articles. On the other hand, readers seldom have the time or inclination to get the whole story as it applies specifically to them. The comments posted thus far reflect the articles value.]]>