Politics and Ecomonics

Watching Countdown tonight and one of the Margaret Carlson touched on something I feel is so big on how we come out of our economic problems.

We've got politicians trying to make laws and understand financial systems that they've never been apart of. The HVCC appraisal nightmare is a perfect example. Politicians like Andrew Cuomo of New York, could have the best intentions possible. But without intimate knowledge of how the industry works, you get a set of laws like the HVCC.

On another post I'll explain all that's wrong with these laws but just know that it is affecting current, new and future homeowners. Making it harder to get loans and driving values down isn't what will save the financial world. I try to step back and see all these things from an outside perspective so I'm not jaded by being in the trenches, but even then I can see that good mortgage brokers, bankers, loan officers and realtors should all be at the table helping to craft these tougher laws.

Politicians are politicians. Very few understand the complex world of lending, let alone how to regulate it. Something I learned that has been very helpful to me is, stick to what you know. There should be a panel put together just like when they want to find out other things. There can be a report that maybe, just maybe, will produce rules that help protect the public without hurting them as well. I don't come to your job and tell you how to do it and I certainly don't try to regulate it without knowledge of the job.

FOMC geniuses

I sorry, but to read a headline like "Consumer spending softer than expected" just makes me laugh.

I literally don't know anyone who's doing "well". I know a lot of people and I've seen a lot of people's finances. I can tell you that no one is doing well. Maybe I'm reading into just a headline too much but I think it's so... almost insulting, either to us as people or to them as financial soothsayers.

1) What gave them the impression that we where doing well. More than that I wonder what level did they think we were going to come in at, as far as spending?

2) Or are we so broke that no matter what guess they could have had, we where lower?

I was having a discussion with a long time friend and client. He put it perfectly. All the people on the news or business channels or papers can only explain what happened. If the market goes up or down, they come in at night and say "Well it was because of this or that". None of them really know anything of use, like what will happen. Or at least they won't stick their neck out and give an educated guess.

It got me thinking. I'm no brilliant person but at least I read the FACTS and talk to the average person and can sit back and take an educated guess on what will happen. No one kills me if I'm wrong or throws me a party if I'm right. It's because if I told you rates where going to go up tomorrow, I'd back that up with what I believe are facts or guides. If I was right or wrong, I tried my best. It seems so many people base trillions of dollars and transactions on what the fed says or thinks. So you've got people reacting to other people's guesses (who never leave their desks or are surrounded by other rich people).

The market tanked today because the FOMC said consumer spending wasn't what they thought it would be. I could have told you that and have been for months. Why, today, would that seem to make the market drop. We all know that we're in hard times so this should have been a gradual decline, not just a one day selloff. But I guess if they new what was going to happen tomorrow, they wouldn't tell us anyway and they'd be rich.