Listening to the GOP debates and now the back and forth between the candidates can make ones mind numb. Especially since the two main runners are Romney and Newt (yes I feel that Gingrich has made it to the status of a one name superstar). I could go on forever talking about politics and what I feel about each candidate but there was something said today that reconfirms a mindset that I just can't agree with.
Maybe it's a generational thing. Maybe it's my love for sci-fi. Maybe it's my hope that the world can be a better place and one day the people of earth will see that, like it or not, we are ALL from the same planet.
Newt stated that "in his second term as as president there will be a permanent settlement on the moon, and it will be American".
Avoiding the absurdness of the fact that Newt would have a second term as president, I'm more concerned about this American settlement on the moon. Whether or not we actually NEED this settlement is a different debate that time will tell. What disturbs me is that if we get to the advanced state as to be able to have this permanent settlement and could leave our home rock, Earth, is that we'd still be saddled with antiquated ideals that have held our world apart for at least the last 5000+ years.
I am and always will be a true red, white and blue American. But I also see that our world has become much smaller over the past few decades as technology has brought people from all over the world together. It's amazing to me that in seconds I could be online with people from all over the world. I could jump onto my Xbox and be playing Gears of War with someone from NYC or London or even Iran or China.
I truly believe that as the world becomes smaller, old school war will become a thing of the past. I don't ever think we will have a conflict on the scale and scope of World War 2. We knew very little of what Germany was doing in early 1930. The average person couldn't tell you what countries or providences made up the USSR in the 70's and 80's. Compare that to now, we know when there's the slightest unrest in the middle of an African desert. We might not do anything about it but we know. Twitter and Facebook can topple a corupt regime in Egypt at the same time a lonely man in Calabasas downloads what would normally be illegal porn from his office computer... I mean check soccer scores from the EPL (that's right, whew that was close). Anyway, my point being the world is a much smaller place. I could understand hiding under your desk at school due to the threat of a nuclear attack from a nameless / faceless enemy, but would I go to war with Han from Korea that I play video games with online and who sends me bootleg movies?
How does all this fit into an economic blog? Well, because like it or not, we're in an world economy now. On a day to day basis we feel the affects of what happens in Europe and Asia. We've got 24 hour economic news channels. I can trade stocks all over the world from my iPhone at any time of day. If anything is going to bring the world together it's going to be money.
To have a permanent fixture on the moon would take a massive amount of money. It would also be tremendously risky. What any shrewd person would tell you would be to bring in different groups and spread the risk out. I'd hope that we'd also bring in the best and brightest for such an endeavor and that would mean bringing together people from where ever they may be from.
This is the next step of exploration not just to see who can plant a flag first. The moon already has an American flag. Does that mean we own it? I don't think so. Besides, unfortunately and sadly a corporation will probably claim or be given ownership over anything new that is discovered. More than likely it will be a multi national corporation.
To think that a man who is running for president wants the USA to own the moon scares me. What are we going to do with the moon when we can't even fix the problems we have at home? Or maybe he's thinking of a good place to divorce his 3rd wife and leave her on this moon settlement.
We've learn from the past, that to become great we must work together. A massive undertaking, like living on the moon, is going to take a joint venture. As we are becoming one economy and one society, we certainly shouldn't forget our roots and heritage, but we should put aside old xenophobic fears accept that we need to work together. Instead of an American settlement we should have a human settlement. Believe me, when the aliens come to take us over as slaves or steal Earth's natural resources (the ones we haven't polluted) they won't care which part of the rock we're from.
Showing posts with label future. Show all posts
Showing posts with label future. Show all posts
Thursday, January 26, 2012
Tuesday, July 6, 2010
Low rates and a failing economy
Rates are low. Very low. Most people think this is good. As far as someone refinancing or purchasing a house right now, this is good. You're not going to find better rates.
The rates should stay low. Low confidence in the stock market and a lack of jobs is creating a perfect storm for people to shelter their money in treasuries. This pushes the yield down and should mean low rates for a while. Mainly because I don't see where the public or private sector will be creating any new jobs soon. Don't forget we still have a massive Real Estate problem and tons of inventory that the banks have not unleashed or pushed forward on foreclosing. We're far from the end.
The economy is not there. Anyone who tells you that this economy is turning around doesn't know what they're talking about. We're in for a long year. If we can truly put Fed money into "green" research or the creation of "ideas" that will be the best way for us to get out of this mess. Eventually the RE market will correct itself but we've got a long way and many ups and downs before that happens. It's going to take people putting research into new ideas and hopefully there will be a spark that will set off a product that will need specialized employees that can offer good paying jobs. What that spark will be or in what direction of manufacturing, I don't know. But I'm thinking in the way that the Dot.Com boom was in the 90's. Sure there where failures at the end but look what we where left with. iEverything, internet, the digitalization of information and a slew of other products and money earning opportunities.
Back to low rates, yes we have low rates. Now is the time to check into refinancing or if you've been waiting to purchase, start looking. The problem there is that the banks are so tight with the money and guidelines that it's making it near impossible to qualify. Don't be dismayed if you can't get a loan Today. The tightening of guidelines is reactionary to how loose the guidelines where. Eventually you'll see some changes to the positive. It might not seem like it now. It might seem like you hear no a lot more than you hear yes, but in time things will loosen up. Just like the job market, it just takes a spark. It will take a few risk minded investors to roll out a Stated program that makes sense, and if they're successful others will follow. But it takes time for these people to 1) have the balls to create a good program with guidelines that will allow it to succeed, 2) the program must succeed and turn a profit, and 3) both one and two will take time to develop and show success. Even in a perfect scenario, if all these dominoes fall the way they're supposed to, it could take months if not years. I'd guess, from the roll out of a new product to the sale of the loan to the time they can be analyzed and finally confirmed as a success and for other to start copying them; you're looking at a year?
Meanwhile who knows what will happen between now and then. It's scary but for some reason I think there is a light at the end of this pit we're falling in. It's not going to be a fun fall and I might not be able to see the light, but I feel that we know what direction we're going to need to go into. The problem is not everyone, especially the people who actually make the decisions like lawmakers and their advisers and lobbyists, can agree on the same path to take to get to the light. This is where we might find the most difficulty getting to the end. Without a good plan that everyone can latch onto, it could cause us to be lost longer than we need to be or can afford to be.
The rates should stay low. Low confidence in the stock market and a lack of jobs is creating a perfect storm for people to shelter their money in treasuries. This pushes the yield down and should mean low rates for a while. Mainly because I don't see where the public or private sector will be creating any new jobs soon. Don't forget we still have a massive Real Estate problem and tons of inventory that the banks have not unleashed or pushed forward on foreclosing. We're far from the end.
The economy is not there. Anyone who tells you that this economy is turning around doesn't know what they're talking about. We're in for a long year. If we can truly put Fed money into "green" research or the creation of "ideas" that will be the best way for us to get out of this mess. Eventually the RE market will correct itself but we've got a long way and many ups and downs before that happens. It's going to take people putting research into new ideas and hopefully there will be a spark that will set off a product that will need specialized employees that can offer good paying jobs. What that spark will be or in what direction of manufacturing, I don't know. But I'm thinking in the way that the Dot.Com boom was in the 90's. Sure there where failures at the end but look what we where left with. iEverything, internet, the digitalization of information and a slew of other products and money earning opportunities.
Back to low rates, yes we have low rates. Now is the time to check into refinancing or if you've been waiting to purchase, start looking. The problem there is that the banks are so tight with the money and guidelines that it's making it near impossible to qualify. Don't be dismayed if you can't get a loan Today. The tightening of guidelines is reactionary to how loose the guidelines where. Eventually you'll see some changes to the positive. It might not seem like it now. It might seem like you hear no a lot more than you hear yes, but in time things will loosen up. Just like the job market, it just takes a spark. It will take a few risk minded investors to roll out a Stated program that makes sense, and if they're successful others will follow. But it takes time for these people to 1) have the balls to create a good program with guidelines that will allow it to succeed, 2) the program must succeed and turn a profit, and 3) both one and two will take time to develop and show success. Even in a perfect scenario, if all these dominoes fall the way they're supposed to, it could take months if not years. I'd guess, from the roll out of a new product to the sale of the loan to the time they can be analyzed and finally confirmed as a success and for other to start copying them; you're looking at a year?
Meanwhile who knows what will happen between now and then. It's scary but for some reason I think there is a light at the end of this pit we're falling in. It's not going to be a fun fall and I might not be able to see the light, but I feel that we know what direction we're going to need to go into. The problem is not everyone, especially the people who actually make the decisions like lawmakers and their advisers and lobbyists, can agree on the same path to take to get to the light. This is where we might find the most difficulty getting to the end. Without a good plan that everyone can latch onto, it could cause us to be lost longer than we need to be or can afford to be.
Wednesday, September 2, 2009
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.
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.
Friday, July 24, 2009
Knowns and Unknowns
There are a lot of headlines that indicate that the recession and mortgage crisis is over. We seeing the end and all is becoming well with the world, and why not the DOW is back to 9,000+.
That's all nice. Sounds good. But a lot of the reasons are not true. Worse yet, a lot of the truth isn't being given to the public. I truly believe we're in for another downturn in the market and for the economy. There is just no way that you have inflated all markets for close to a decade and in 6 months we've hit bottom and are ready to recover.
The median price rising that you heard last week is a joke. The truth is that there was a rise in sales in the High End homes. The high end sales took a larger percentage of the overall sales. So you might have an extra 10 - 20, 2 or 3 million dollar homes sold but that offsets hundreds of 200 - 300k home sales. Keep in mind those million dollar homes that sold probably lost about 1/3 - 1/2 of what the value was. This is a case where the median price can actually rise but home values are still going down. We haven't hit bottom yet.
I've got inside sources on the inner workings of big time lenders short sale, rate mod and foreclosure departments. Without going into detail, you wouldn't believe that these companies are still in business from the way their run. In reality there are so many delinquent borrowers that haven't even started to go through the process of short sales or foreclosures that there is a wave that's going to hit and hit hard. Especially with the employment problems only getting worse.
I've been told and seen that at many banks the rate mods are taking so long and putting people in such back situations that I feel there could be a rate mod bubble to burst. Unlike a bubble of prosperity I think it will be a break down of the system. Don't let this stop you from trying. I believe that modifications in anyway would be the only way to slow down the foreclosure mess (as we're structured now), but I'm hearing, going through and reading about horror stories. Between the fraud that's been in the paper lately and the way I've personally seen how these rate mods are run, it's a mess. Some lenders have got their stuff together so I won't unilaterally dis everyone. But I know of total incompetence from simple hangups and dropped calls to repeated requests for paperwork that they've already had, "it's just our screens aren't updated" or "I'm sorry, this screen showed we needed it again" to "No we don't know why someone called, you're fine". These I've all heard and been through.
What's worse is that many of these lenders, who initially said that you don't need to be late on your mortgage for help are now purposefully making you go late. I can go on but will leave you with one final thought for today.
Look at all that's going on. Take a step back and look at the ramifications of what we're going to be left with. There will be millions of people with bad credit. In many places you're going to see home values near 2000 levels. Inflation HAS to be a concern at some point which will only stifle any momentum in the real estate world. Financing will be so tight that it will almost be impossible for home owners, small businesses and even large companies to get loans. Commercial real estate and lending is the next shoe to drop. 30 - 40% vacancy wouldn't surprise me (I know that sounds crazy).
I would love to think that we are in the clear. But the truth is we are so far away and what's worse is no one knows the real answers. Read the actual article from these headlines. Picture the TV show The Office, think about the actual work that gets done. It's funny because it's true!! Starting next month the banks are going to initiate all types of new, incredibly stupid, lending regulations... but that's for my next post.
That's all nice. Sounds good. But a lot of the reasons are not true. Worse yet, a lot of the truth isn't being given to the public. I truly believe we're in for another downturn in the market and for the economy. There is just no way that you have inflated all markets for close to a decade and in 6 months we've hit bottom and are ready to recover.
The median price rising that you heard last week is a joke. The truth is that there was a rise in sales in the High End homes. The high end sales took a larger percentage of the overall sales. So you might have an extra 10 - 20, 2 or 3 million dollar homes sold but that offsets hundreds of 200 - 300k home sales. Keep in mind those million dollar homes that sold probably lost about 1/3 - 1/2 of what the value was. This is a case where the median price can actually rise but home values are still going down. We haven't hit bottom yet.
I've got inside sources on the inner workings of big time lenders short sale, rate mod and foreclosure departments. Without going into detail, you wouldn't believe that these companies are still in business from the way their run. In reality there are so many delinquent borrowers that haven't even started to go through the process of short sales or foreclosures that there is a wave that's going to hit and hit hard. Especially with the employment problems only getting worse.
I've been told and seen that at many banks the rate mods are taking so long and putting people in such back situations that I feel there could be a rate mod bubble to burst. Unlike a bubble of prosperity I think it will be a break down of the system. Don't let this stop you from trying. I believe that modifications in anyway would be the only way to slow down the foreclosure mess (as we're structured now), but I'm hearing, going through and reading about horror stories. Between the fraud that's been in the paper lately and the way I've personally seen how these rate mods are run, it's a mess. Some lenders have got their stuff together so I won't unilaterally dis everyone. But I know of total incompetence from simple hangups and dropped calls to repeated requests for paperwork that they've already had, "it's just our screens aren't updated" or "I'm sorry, this screen showed we needed it again" to "No we don't know why someone called, you're fine". These I've all heard and been through.
What's worse is that many of these lenders, who initially said that you don't need to be late on your mortgage for help are now purposefully making you go late. I can go on but will leave you with one final thought for today.
Look at all that's going on. Take a step back and look at the ramifications of what we're going to be left with. There will be millions of people with bad credit. In many places you're going to see home values near 2000 levels. Inflation HAS to be a concern at some point which will only stifle any momentum in the real estate world. Financing will be so tight that it will almost be impossible for home owners, small businesses and even large companies to get loans. Commercial real estate and lending is the next shoe to drop. 30 - 40% vacancy wouldn't surprise me (I know that sounds crazy).
I would love to think that we are in the clear. But the truth is we are so far away and what's worse is no one knows the real answers. Read the actual article from these headlines. Picture the TV show The Office, think about the actual work that gets done. It's funny because it's true!! Starting next month the banks are going to initiate all types of new, incredibly stupid, lending regulations... but that's for my next post.
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