Welcome To Oz

Watching the antics of our government in action makes it seem like Oz, although we are short a few wizards. Our President, eloquent though he may be, is an empty suit, flying unnecessarily to Arizona in Air Force One to make a foreclosure bail-out speech at a cost of approximately $650,000, (that's just for the airplane). He is threatening to nationalize health care, reduce our defense spending (the only thing that's been keeping us safe), and remove some money from the over 90% of people paying their mortgages and give it to those who are not. Contrary to Senator Dodd's unfortunate comments we are not going to nationalize the banks, according to Bernanke, but are instead going to give the 20 largest banks a "stress test" to see if they're adequately capitalized, and to those that are not we're going to infuse them with public money so that they will be. The "Recovery Act" often referred to by politicians as the "stimulus act", over 1100 pages unread by the President who signed it, or the politicians who passed it, was originated in large part by Pelosi who is garnering substantial money for some project in her district, and by Reid who is winning a rail system from Las Vegas in his home state to Disneyland. Out the window are the promises of no lobbyists to be appointed,(the stack of waivers is growing), and the most careful vetting process in history (a 60 page questionnaire) for cabinet positions, has produced the worst appointment record in history. Many are called, few are chosen, and rightly so. The same lack of judgment that allowed affiliation with Ayers, Wright, Acorn, dogs this man's every move, but he will do or say whatever it takes to get where he wants to go, never mind what the country needs. It worked once. Probably not again.
The dithering and profligacy of this government has brought the real estate market, and credit markets generally to a standstill. Locally we have sold 24 homes in greater Chico in February on the 24th of the month. In 2007, the last almost normal year we sold 63 in the same period. Pretty sad.
Back to government for a moment. Barney Frank is trying to put together a regulatory framework for the housing industry. He's the same one who effectively and very vocally objected to and blocked attempts to regulate Fannie and Freddie because to regulate would thwart their efforts to initiate sub-prime mortgages. Feinstein, Chair of the Intelligence Committee, who in an epiphany reversed her objection to our new, inexperienced, Director of the CIA, blurted out classified information in open session and caused substantial harm to our relations with Pakistan. Should it come to pass that the circus should again gain favor as an entertainment medium, we have a reservoir of clown talent immediately available, and I hope soon, not otherwise employed.

Exciting Times

Here we are with an incredibly huge stimulus (SPENDING) package that made it through the House with every piece of pork that Pelosi could find, currently undergoing Senate scrutiny and likely to pass in some form. Enlarging government didn't work in 1933 and won't this time either. Dems vowed to end the recession, and they will. It will now be a depression. Of the projected cabinet appointments, Geithner made it in spite of his tax evasion, Richardson didn't on ethical grounds, Daschle didn't on tax evasion, and the new czar of efficiency failed the tax test. So much for cleaning up government and transparency in politics. We have a new administration that's in way over their head and business, taxpayers, the economy are going to take a severe battering, and it's not going away any time soon. We have executive orders that order the types of cars to build, the pay scales of executives in industry, the protectionist orders for steel suppliers (no foreign supply). The so-called stimulus bill calls for 5 Billion for Acorn, (Remember them and voter fraud?, several million for contraceptives,(that's a different form of stimulus), although we perhaps should applaud that provision. If Congress is going to be doing it to us we should have some kind of protection. The arrogance of politicians is boundless, and how nice it would be if we could start over tomorrow with every seat in the House and Senate with a new occupant, no personal agendas, beholden to none.
To the local scene: January sales of SFR in greater Chico totaled 39 homes, 12 of them foreclosed properties, 6 short sales, or 46% of total sales were distress circumstances. Glenn County had 27 sales, 19 foreclosed and 2 short sales for 78% distress rate. Not good at all. The conventional wisdom is that prices are still dropping, foreclosures are up and increasing and while mortgage rates are favorable, the uncertainty of the market place is severely restricting activity. The Senate is pushing for some legislation to provide government backed mortgages at 4 or 4.5% for purchase and refinance. That should effectively stop any activity of any kind until there is some resolution. Why would anyone sign a contract today? Answer is they won't.
Just finished reading Ferguson's "The Ascent Of Money", now re-reading Friedman"s "Free To Choose". It's fascinating to see how often we have to repeat mistakes in matters of money and economics. Policies which have clearly failed in the past, some of which have never had any degree of success, are now on the agenda for handling this current crisis. The lessons of history are once more being ignored, and we are going to pay a substantial price. Best we can do individually is preserve the human values, care for each other and maintain tight bonds with family and friends. On that note: Everywhere we turn we are inundated with opportunities to make money by referring troubled homeowners to loan modification "companies", or we see the direct appeals by these people to homeowners to solve their mortgage problems through loan modifications for a fee. Let me keep repeating-If you have a problem with your loan, YOU talk to your lender, they have a loan modification department. If they don't have a satisfactory solution for you, or if they offer you something you don't fully understand, then call and make an appointment with a local attorney, one with real estate experience, ask the hourly rate and the likely total fee, and follow the advice you pay for. If your real estate agent refers you to a loan modification company he or she is most likely being paid a fee for the referral. Run, and change agents. Your mortgage is a legal contract between you and your lender. They have attorneys, you should have your own, not some outfit that claims to have some on staff. If you want this advice repeated, newagerealty@sbcglobal.net will get you a response.
As usual-
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