Monday, February 23, 2009
Does Obama Know where Washington D.C. is located?
Has anyone else noticed that Pres. Obama seems to have forgotten where Washington D.C. is located? He has been everywhere but there. Funny thing about that is that when my company started having to tighten it's budgets the first thing to go was travel. Seems to me that the US is in much worse shape then my employer and yet Obama keeps on spending our money flying around the country.
Obama Foreclosure Plan
Donovan said 45 percent of home sales in December were "distressed," meaning either sellers were facing foreclosure or the homes were already seized by the bank, driving down home prices further in an already-battered market.
"We've got to make clear, here, that a foreclosure hurts every American," he told CNN.
Apparently Mr. Donovan does not consider those careful enough to avoid the housing bubble and wait for the collapse to make a reasonably priced purchase American.
I needed to move to make room for my first child in 2004. For various reasons we rented and a year later my wife started pressing to purchase. I resisted based upon the cost of houses in my area (southern California) and the obvious fact that we simply couldn't afford a home with a standard loan despite paying $2,200 a month in rent. Being from New England must make me old fashioned so an Option ARM just wasn't something I was going to use and was horrified that others would consider it for a $700,000 when they earned under $100K a year, frequently well under.
Prices in my area have finally fallen although I feel they are still high - I live in San Diego and not north in Riverside County where prices have collapsed and have no desire to live there, not sure why anyone does to be honest. If t he government is going to step in and artificially prop up values they better put something on the table for me. I am pretty sure the home buyer credit won't apply as I still own a condo that is rented, probably a disqualificaiton.
I am the middle class that everyone claims to want to help - and I feel screwed again. I can't buy a home and I have to pay for everyone else's.
Thank you Washington D.C.
While on the topic of the Housing Secretary - I happened to catch his interview on CBS News. The term News clearly did not apply to what I saw. It sure appeared that the Secretary was being lobbed questions that he and his team had prepared and presented to CBS to ask. Where is the hard hitting reporting and seriuos questions one expects from a true reporter and News show?
"We've got to make clear, here, that a foreclosure hurts every American," he told CNN.
Apparently Mr. Donovan does not consider those careful enough to avoid the housing bubble and wait for the collapse to make a reasonably priced purchase American.
I needed to move to make room for my first child in 2004. For various reasons we rented and a year later my wife started pressing to purchase. I resisted based upon the cost of houses in my area (southern California) and the obvious fact that we simply couldn't afford a home with a standard loan despite paying $2,200 a month in rent. Being from New England must make me old fashioned so an Option ARM just wasn't something I was going to use and was horrified that others would consider it for a $700,000 when they earned under $100K a year, frequently well under.
Prices in my area have finally fallen although I feel they are still high - I live in San Diego and not north in Riverside County where prices have collapsed and have no desire to live there, not sure why anyone does to be honest. If t he government is going to step in and artificially prop up values they better put something on the table for me. I am pretty sure the home buyer credit won't apply as I still own a condo that is rented, probably a disqualificaiton.
I am the middle class that everyone claims to want to help - and I feel screwed again. I can't buy a home and I have to pay for everyone else's.
Thank you Washington D.C.
While on the topic of the Housing Secretary - I happened to catch his interview on CBS News. The term News clearly did not apply to what I saw. It sure appeared that the Secretary was being lobbed questions that he and his team had prepared and presented to CBS to ask. Where is the hard hitting reporting and seriuos questions one expects from a true reporter and News show?
Wednesday, February 18, 2009
Public Employee Unions
Should unions who represent public employees be allowed to donate time, money and their support to politicians?
I don't think so. When is the last time a non-public employee got to pick and choose their boss on a regular basis? It is no wonder that our government agencies are all on the verge of bankruptcy.
I don't give much weight to the obvious argument by the unions that this tramples on their rights of free speech. The individual members are still free to do, say, contribute and vote as they desire. Since Unions can't vote I am not sure how they qualify for unlimited free speech. We have already banned priests from participating in politics or their churches could lose their tax-exempt status. Sounds pretty close to me.
Don't forget that the last time a union had the power that public employee unions wield we ended up with the Teamsters and the current U.S. Automotive Industry.
I don't think so. When is the last time a non-public employee got to pick and choose their boss on a regular basis? It is no wonder that our government agencies are all on the verge of bankruptcy.
I don't give much weight to the obvious argument by the unions that this tramples on their rights of free speech. The individual members are still free to do, say, contribute and vote as they desire. Since Unions can't vote I am not sure how they qualify for unlimited free speech. We have already banned priests from participating in politics or their churches could lose their tax-exempt status. Sounds pretty close to me.
Don't forget that the last time a union had the power that public employee unions wield we ended up with the Teamsters and the current U.S. Automotive Industry.
Wednesday, February 11, 2009
The Federal Bailout/Stimulus
What if in 1637 European governments had decided that Tulip Bulbs really weren't overpriced and supported the market?
I don't believe there is any simple, painless answer to our current turmoils. My heart goes out to the unemployed as I wonder if I will be joining them as business contracts and my employer is rumored to be working on a 3rd round of layoffs for March. It is this fear of a layoff that is gripping the country and insuring that the economic malaise will continue. I still have my income yet I have cut spending and am putting off several major purchases including a new computer and a home. Why should I deplete my savings for a down payment when I could lose my income and not have an adequate safety cushion to fall back on? The stimulus package will not address this fear.
Assuming the stimulus is approved and money starts flowing just how fast will jobs be created and saved? Assuming they send the money out for construction projects and the projects have the material required to start and the idle construction firms bring back all that they laid off do you think the workers will spend their new income? I don't. They will be shell shocked and use the money to pay off existing bills providing no stimulus. Once caught up they will save to avoid a similar fate. Where is the stimulus?
The governments plan is nothing more then a decision that Tulip Bulbs are not overpriced and they should be propped up by the government. Over the course of generations policies and procedures were put in place to handle companies that went bankrupt. Banks have their own unique rules to protect depositors. The federal government has thrown these rules out the window with a claim of protecting the financial system. Wouldn't it be better to seize failing banks no matter the size, remove the questionable assets, recapitalize the remainder and sell the now healthy institution? For small banks selling to existing banks is fine, for larger banks the government could have an IPO. They could spread the IPO work out amongst many Wall Street firms and help them while creating the new healthy bank.
The questionable assets could be held by the government for as long as it is deemed wise. This may be until maturity or when market liquidity returns and prices appear reasonable, fire sales should be avoided to maximize the return to taxpayers.
One last note - living in Southern California, that $15,000 home purchase stimulus is pretty weak and I believe that would be true in other truly hard hit real estate markets. Average homes still sell for 300 to 500K in my area so their values could easily, and I suspect will, drop by well over 15K in the next 6 to 12 months.
We had a nice ride up the economic spiral, the slide back down is proving catastrophic.
I don't believe there is any simple, painless answer to our current turmoils. My heart goes out to the unemployed as I wonder if I will be joining them as business contracts and my employer is rumored to be working on a 3rd round of layoffs for March. It is this fear of a layoff that is gripping the country and insuring that the economic malaise will continue. I still have my income yet I have cut spending and am putting off several major purchases including a new computer and a home. Why should I deplete my savings for a down payment when I could lose my income and not have an adequate safety cushion to fall back on? The stimulus package will not address this fear.
Assuming the stimulus is approved and money starts flowing just how fast will jobs be created and saved? Assuming they send the money out for construction projects and the projects have the material required to start and the idle construction firms bring back all that they laid off do you think the workers will spend their new income? I don't. They will be shell shocked and use the money to pay off existing bills providing no stimulus. Once caught up they will save to avoid a similar fate. Where is the stimulus?
The governments plan is nothing more then a decision that Tulip Bulbs are not overpriced and they should be propped up by the government. Over the course of generations policies and procedures were put in place to handle companies that went bankrupt. Banks have their own unique rules to protect depositors. The federal government has thrown these rules out the window with a claim of protecting the financial system. Wouldn't it be better to seize failing banks no matter the size, remove the questionable assets, recapitalize the remainder and sell the now healthy institution? For small banks selling to existing banks is fine, for larger banks the government could have an IPO. They could spread the IPO work out amongst many Wall Street firms and help them while creating the new healthy bank.
The questionable assets could be held by the government for as long as it is deemed wise. This may be until maturity or when market liquidity returns and prices appear reasonable, fire sales should be avoided to maximize the return to taxpayers.
One last note - living in Southern California, that $15,000 home purchase stimulus is pretty weak and I believe that would be true in other truly hard hit real estate markets. Average homes still sell for 300 to 500K in my area so their values could easily, and I suspect will, drop by well over 15K in the next 6 to 12 months.
We had a nice ride up the economic spiral, the slide back down is proving catastrophic.
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