This ongoing debt crisis continues to act like an A.D.D. glutton at Golden Corral, gobbling up market-share seemingly at random and in large quantities. Our super-committee (or “not-so-super committee” as I call them) has proven to be as petty as the broader parties they represent, gnashing their teeth at one another while accomplishing nothing. Their original purpose was to help close the Grand Canyon-esque U.S. budget deficit by at least 1.2 trillion over the next decade.
Well, that didn’t happen. Today is their official deadline and I wouldn’t be surprised if they did some sort of kick-the-can-down-the-road move to try and save their political lives. Unfortunately, such actions may not be very warmly received by the ratings agencies, threatening yet another eventual U.S. debt downgrade despite recent reaffirmations of their latest AAA (or in S&P’s case AA+) assessments.
I’d love to tell you I understand all the various ramifications of this failure. I don’t. There’s all sorts of tax cuts and spending that could expire if immediate action isn’t taken. I’m fairly sure our boss-hos Obama could veto…something in there. I dunno. Politics give me migraines.
What I do know is that this is one of many nails holding the coffin door shut on our economic growth and it isn’t getting loosened any time soon. A sobering example of the cost political jockeying has on our country. It has, however, had a very suppressing effect on interest rates which maintain their bottom-of-the-barrel status. I point this out as a valuable lesson. Markets will react to this tension, rest assured. And the outcome is very likely going to be non-end-of-the-world-y and we’ll eventually go back to business as usual. But this slight hiccup, this slight aberration in the grand scheme of things is something that can be capitalized upon if you play your cards right AND you play them at the right time.
So I sincerely hope that if you or anyone you know is thinking about real estate either as a home or for investment, you’re consulting with people who can help guide you through these economic waves. And if the people you are consulting with are awesome and handsome (like me) then that’s a bonus.
Yup. Awesome AND handsome. That’s a double-whammy.
Holiday season is officially upon us. Enjoy gaining ten pounds between now and the end of the year. I know I will. Heck, I plan on getting a head start on Thanksgiving: the only holiday where engorging yourself to the point of discomfort becomes a patriotic duty. Afterwards please spend copious sums of cash out there on Black Friday. Uncle Sam needs some good earnings reports out of the retail sector pretty soon to jolly up what is proving to be a sputtering Q4.
Republicans enjoyed a rousing debate concerning foreign policy this Tuesday on CNN. Evidently Newt Gingrich is doing well in the polls, bringing new scrutiny to his defense of Freddie Mac executives’ bonuses and his previous advising role with Freddie. This is coming after Herman Cain allegedly molested a woman, Rick Perry forgot who he was and what the hell he was doing on national television and Mitt Romney…was Mormon. All equally egregious actions. Frankly, I’ve quit keeping track. I’m write-in voting for the Elmo/Oscar the Grouch ticket in the preliminaries because they bal¬ance one another well and approach most of the hard-hitting issues with “hugs” and “educational and catchy tunes”.
Yes, I am a registered Republican which probably shocks a large majority of you.
Anyone remember the re-vamping of HAMP that our executive branch was all excited about late October? No? Yeah, that’s because no one picked up the ball and ran with it. Because it would essentially become a game of kill the lender with the ball.
Chinese Vice-Premier Wang Qishan announced that global economic outlook remains grim and that we are staring at an inevitably protracted economic downturn. Not downing the validity of Wang’s claim, but this is the Joe Biden of China we’re talking about. If Joe came out and announced that we all need to go on a Chihuahua-only diet I wouldn’t be entirely surprised. They are high in protein.
Okay, I know there is a Chinese president and comparing Wang to Biden isn’t a proper parallel, but I wanted to make this Biden joke. Deal with it.
Anywho, I hope this brought a smile to your face. Things’ll get gooder out there. In the meantime, let’s take this opportunity to be thankful for all the good things we’ve all got going on in our individual lives. I wish each and every one of you a Happy Thanksgiving and a prosperous tail end to 2011.
All your mortgages are belong to Greg.
Wednesday, November 23, 2011
Wednesday, November 9, 2011
The more I learn about Europe the less I care
So the hot topic in the world of business these days is Europe. And it’s not just for their cutting-edge fashion, holier-than-thou attitudes or super-weird toilets. This time it’s because they are all enjoying their own adorable debt crises. Did you know that it’s a whole bunch of different countries over there? And they all have their own little leaders who may or may not like each other? And all their leaders have funny titles like Prime Minister or Premier or Grand Poobah? It’s Ri-DIC-ulous.
To be honest, I don’t really care. Chances are you don’t care either. All you know is that if catastrophe strikes over there, it will somehow drag us into the ooze along with it because we’re all inter-connected in this global economy. Like ‘It’s a Small World” only with mortgage-backed derivatives buried in each of their respective national debt structures. The only remotely amusing thing to report is that French President Sarkozy was caught talking smack about Israeli Prime Minister Netanyahu and Obama was caught not doing anything about it. Oh SNAP. No he di’int! Looks like this jive-talkin’ turkey best check himself befo’ he wrecks himself.
And by “wrecks himself” I mean ends up on the receiving end of a couple dozen nuclear warheads. Seriously, the whole Israel/Palestine thing is nuts to begin with. I wouldn’t try to piss any of them off.
What we’re all concerned about is what’s happening domestically. Well, we’ve actually got some enjoyable stuff going on. September new home sales came in at a 5.7% month-over-month increase, the first uptick in 4 months. October jobs report showed an increase of 80,000 jobs, hinting at a thin silver lining shining over our dark employment picture. This follows an upwardly revised increase from 103,000 jobs created to 158,000 in September and was enough to tick the unemployment rate down to 9.0%. Not great, but certainly good.
But not everything is sunshine and roses. Remember last newsletter when I said that Orlando was effectively underwater? Well, analysts have one-upped me in a humongous way, boldly stating that half of homes backed by a mortgage are effectively underwater. By their train of thought, homeowners who owe 85% or more of their home’s value are effectively underwater because they lack the 6% realtor commission to sell their place and a 10% down payment on whatever new home they seek. So those homeowners (about half of all mortgagors) are stuck in traction from the situation.
Let’s take a step back and enjoy a hot logic injection: equity is purely based on widespread belief. Period. When (not if) people begin to believe in real estate again for what it fundamentally is, previously sidelined buyers will creep back into the market, demand will rise, bidding wars will ensue and ka-boom, equity returns. A virtuous cycle will kick in and the whole thing will be back on track. Suddenly not so many people are underwater. If you are betting against this series of events coming to fruition then I look forward to saying “I told you so” a decade from now.
What, pray tell, do I believe real estate fundamentally is? A slow-and-steady appreciating asset. One of the only asset classes that average consumers can leverage smart, tax-deductible debt safely against. A physical piece of the American Dream. A kingdom all your own. The place your kids remember growing up.
I have never believed I would be able to “sell” any of you on the concept of buying a home through these newsletters. That decision is, in my opinion, more contingent upon your personal life circum-stances than it is on what kind of “deal” happens to be available. Let there be no question: there will be no shortage of bad news for the real estate market for the near term future. But that doesn’t diminish the intrinsic value of owning a home. Fact of the matter is that owning a home can be one of the most rewarding things you ever do. And I’m here to make that happen for you.
So please use me as an asset. Got questions about something you saw on TV? Call or e-mail me and I’ll provide some clarity. Been thinking about restructuring the debt on your real estate investments? I’ll crunch numbers for you to figure out what is the best course of action. Thinking about buying a place in the next two years? Let me know and I’ll show you the best path to get there. I’m here for you to help in any way I can.
If I were next to you, I would totally bro-hug you right now. That’s how much I care.
On a completely unrelated but hilarious note, KEL law firm (famed for helping people fight foreclosure cases) has been ousted from the Better Business Bureau amid complaints. This is the first area law firm to be drop-kicked through the goalposts of FAIL in 27 years. They were accused of charging thousands of dollars for foreclosure-defense or mortgage-modification services that were either poorly done or not done at all. So maybe consider talking to industry professionals if you’re in trouble as opposed to overly-advertised lawyers. Juuuuuuuuust saying...
To be honest, I don’t really care. Chances are you don’t care either. All you know is that if catastrophe strikes over there, it will somehow drag us into the ooze along with it because we’re all inter-connected in this global economy. Like ‘It’s a Small World” only with mortgage-backed derivatives buried in each of their respective national debt structures. The only remotely amusing thing to report is that French President Sarkozy was caught talking smack about Israeli Prime Minister Netanyahu and Obama was caught not doing anything about it. Oh SNAP. No he di’int! Looks like this jive-talkin’ turkey best check himself befo’ he wrecks himself.
And by “wrecks himself” I mean ends up on the receiving end of a couple dozen nuclear warheads. Seriously, the whole Israel/Palestine thing is nuts to begin with. I wouldn’t try to piss any of them off.
What we’re all concerned about is what’s happening domestically. Well, we’ve actually got some enjoyable stuff going on. September new home sales came in at a 5.7% month-over-month increase, the first uptick in 4 months. October jobs report showed an increase of 80,000 jobs, hinting at a thin silver lining shining over our dark employment picture. This follows an upwardly revised increase from 103,000 jobs created to 158,000 in September and was enough to tick the unemployment rate down to 9.0%. Not great, but certainly good.
But not everything is sunshine and roses. Remember last newsletter when I said that Orlando was effectively underwater? Well, analysts have one-upped me in a humongous way, boldly stating that half of homes backed by a mortgage are effectively underwater. By their train of thought, homeowners who owe 85% or more of their home’s value are effectively underwater because they lack the 6% realtor commission to sell their place and a 10% down payment on whatever new home they seek. So those homeowners (about half of all mortgagors) are stuck in traction from the situation.
Let’s take a step back and enjoy a hot logic injection: equity is purely based on widespread belief. Period. When (not if) people begin to believe in real estate again for what it fundamentally is, previously sidelined buyers will creep back into the market, demand will rise, bidding wars will ensue and ka-boom, equity returns. A virtuous cycle will kick in and the whole thing will be back on track. Suddenly not so many people are underwater. If you are betting against this series of events coming to fruition then I look forward to saying “I told you so” a decade from now.
What, pray tell, do I believe real estate fundamentally is? A slow-and-steady appreciating asset. One of the only asset classes that average consumers can leverage smart, tax-deductible debt safely against. A physical piece of the American Dream. A kingdom all your own. The place your kids remember growing up.
I have never believed I would be able to “sell” any of you on the concept of buying a home through these newsletters. That decision is, in my opinion, more contingent upon your personal life circum-stances than it is on what kind of “deal” happens to be available. Let there be no question: there will be no shortage of bad news for the real estate market for the near term future. But that doesn’t diminish the intrinsic value of owning a home. Fact of the matter is that owning a home can be one of the most rewarding things you ever do. And I’m here to make that happen for you.
So please use me as an asset. Got questions about something you saw on TV? Call or e-mail me and I’ll provide some clarity. Been thinking about restructuring the debt on your real estate investments? I’ll crunch numbers for you to figure out what is the best course of action. Thinking about buying a place in the next two years? Let me know and I’ll show you the best path to get there. I’m here for you to help in any way I can.
If I were next to you, I would totally bro-hug you right now. That’s how much I care.
On a completely unrelated but hilarious note, KEL law firm (famed for helping people fight foreclosure cases) has been ousted from the Better Business Bureau amid complaints. This is the first area law firm to be drop-kicked through the goalposts of FAIL in 27 years. They were accused of charging thousands of dollars for foreclosure-defense or mortgage-modification services that were either poorly done or not done at all. So maybe consider talking to industry professionals if you’re in trouble as opposed to overly-advertised lawyers. Juuuuuuuuust saying...
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