Is it Time to Foreclose on Your Bank?

www.triplepundit.com12/5/11

A look back at the role of corporate banks during the financial crisis of 2008 and a look at other options such as Community Development Financial Institutions (CDFIs).

Daily Kos: Bank foreclosing on businesses that have paid their …

www.dailykos.com12/24/11

First off, how in the hell can it be legal for a bank to foreclose on a loan if the payments have been made on time? Second, less operating income and falling property values “Compelled the bank to act.” Seriously? We are in …

It certainly is a changing globe!

Five months ago Bank of America filed foreclosure papers on a Florida couple who didn’t owe anything on their home.

The homeowner’s, the Nyergers, were later forced to take the case to court because Bank of America refused to accept their proof that they’d paid cash for their home.

A Collier County judge immediately accepted the family’s evidence, confirmed the Nyergers’ claims, and told Bank of America to pay all legal fees.

The bank refused, and the family’s attorney did exactly what the bank had tried to do to his clients, he seized the bank’s assets.

A truck and sheriffs arrived at the bank with orders to remove assets from the bank and within an hour of being locked out of his bank, the branch manager handed over a check for the legal fees.

Related posts:

1. The ‘Loan Modification Program’ Finally Gets Underway.
2. As Stocks Advanced The Number Of Defaulting Homebuyers Rose By 50%
3. Two New Plans Announced To Help Homebuyers

Europe a dagger pointed at Obama's reelection « The Enterprise Blog

blog.american.com11/16/11

While Europe's problems aren't Obama's fault, voters would hold him accountable for an economy too weak to withstand overseas shocks. Perhaps, they … 24 Responses to “Europe a dagger pointed at Obama's reelection” …

Virginia – A Microcasm of Obama's Re-election Problems

michael-in-norfolk.blogspot.com10/21/11

Virginia – A Microcasm of Obama's Re-election Problems. The GOP presidential candidate line up continues to be a circus where the only sane candidates – Romney and Huntsman in my view – do not score well with the …

If Obama’s to get reelected, then he’ll need to overcome five major issues, and if he doesn’t, then he’ll lose, almost regardless of who is GOP opponent is!

His first and major problem is:

Jobs!

The single most important statistic affecting Obama’s reelection chances is the unemployment rate.

In April it stood at 9% which is up from 8.8% in March and that’s well above the historical norm for modern presidents who were reelected.

In March, a Wall Street Journal survey of economists predicted unemployment would be down to 7.7% by Election Day, but even that’s only just one-tenth of a percent lower than it was in November 1976, when President Ford lost to Jimmy Carter.

And, according to a Los Angeles Times analysis, that’s still higher than on two additional occasions when an incumbent president went down to defeat, in part because of high unemployment.

In 1980, President Carter lost to Ronald Reagan when unemployment was at 7.5%, and in 1992, a 7.4% unemployment rate helped Bill Clinton defeat George H. W. Bush.

In the post-World War II era, unemployment has only topped 7% four times on Election Day, and the incumbent has won only once and that was: President Reagan in 1984, when unemployment was at 7.2%.

The second problem is:

Obamacare!

A Rasmussen report issued on May 9 2011 found that support for repeal of the national health care law had rebounded after falling below 50% for the first time since it was passed by Congress in March of last year, and it now indicates that 57% of likely U.S. voters now favor at least a partial repeal of the law.

Just 36% oppose repeal, and those new findings include 44% who strongly favor repeal of the measure as against 26% who are strongly opposed.

If Romney is not the nominee, then the individual mandate is going to be an even bigger liability for Obama, and especially as the issue of its constitutionality works its way through the courts.

And in a bad piece of timing for the president, the case, or cases could reach the Supreme Court right in the thick of the 2012 campaign.

If the high court strikes down the individual mandate, or even the whole law, before the election, then that would be a huge embarrassment for Obama.

The third problem is:

Gas Prices

And I really wasn’t sure if I should make high gas prices the #1 issue because Americans hate them!

The fall in global oil prices at the end of the first week of May might well signal relief for consumers at the pump, but the spike in US gas prices to $4 a gallon, after a steady escalation in the cost of crude oil, remains a source of concern for the White House, both in its impact on consumers and the overall economy, as well as on Obama’s political fortunes.

Obama did say that, “that there’s no silver bullet to bring prices down”, and he did take very minimal action.

On April 21, he announced, “a Justice Department task force to monitor oil and gas markets for evidence of fraud or manipulation”, but it should perhaps be remembered that Obama has said that, “Gas prices at $4 would be OK”.

And the higher the gas price, the easier it will be for Obama to push his clean engergy agenda, but he’ll likely run out of time on that one.

The fourth problem is:

The Budget Deficit And National Debt

Obama ranks way down there when it comes to his handling of soaring deficits, and a dangerously high federal debt.

First, he kicked the can down the road by setting up a bipartisan fiscal commission, and after the commission came out with its recommendations, he ignored them!

And his proposed fiscal year 2012 budget, which was released in February, was widely panned for failing to address medical entitlements which are the biggest drivers of the looming crisis.

Then when Rep. Paul Ryan (R) of Wisconsin, chairman of the House Budget Committee, put out a budget plan with dramatic cuts, Obama simply responded with a “framework” for deficit reduction that was notably vague on how it would achieve promised major savings in Medicare and Medicaid.

And the latest Gallup poll shows 61% disapproval and only 33% approval!

Finally And Fifthly

Home Foreclosures

The Obama administration’s efforts to alleviate the home mortgage crisis have fallen way short of expectations.

In data released May 6, the departments of Housing and Urban Development and the Treasury reported that only 670,000 homeowners have been granted permanent mortgage modifications since the inception of the Home Affordable Modification Program in 2009, and of those, 83,000 subsequently have been disqualified.

The plans goal was to help 3 to 4 million homeowners.

Persistent high unemployment continues to put homeowners at risk of foreclosure and home values continue to decline.

Nationally, home prices are down 20% from their 2007 peak, and they’re only expected to hit rock bottom in 2012.

And according to the real estate data firm Zillow Inc., “In the first quarter of 2011, house prices fell 3% compared with the previous quarter, and more than 28% of single-family home owners owe more than their house is worth”.

All of the above is very bad news for Obama, in spite of what you see and hear in the left wing dominated media, and the question begs to be asked, “Can he overcome the five problems?”.

And the honest answer is, “Probably not”.

If he’s lucky he may overcome one or two of the problems, but that most likely won’t be enough.

Related posts:

1. Our Economy – When Even The Ugly Looks Pretty.
2. Home Prices in U.S. Expected to Fall Through 2010
3. More Than Eighty Reasons Why Obama Shouldn’t Be Reelected!

The Obama Plan to Redistribute Housing | Libertarian Party

www.lp.org10/29/11

First Obama tried to redistribute wealth before he was President, by leading the charge to force banks to make loans to lower income Americans who could not afford to own homes (through the Community Reinvestment Act). …

Applying Obama's “redistribution of wealth” to school grades …

usamericanfreedom.com11/19/11

That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on Obama's plan”. …

Obama and the liberals could perhaps have achieved both growth and redistribution, but they chose only the latter, and they will pay heavily for their error on Tuesday!

Will Obama change direction after the elections?

No He won’t!

During his election campaign Obama said:

“What people really want is fairness”.

“They want people paying their fair share of taxes”.

“They want that money allocated fairly”.

Redistribution Of Wealth

People thought it sounded good and they voted for him, but they didn’t know that he would immediately attempt redistribution of wealth, and he went for it full throttle in spite of the recession.

What the vast majority of Americans believe in however is economic growth, and they understand full well that the threat of having more and more money taken away as you get richer and richer is simply a demotivator.

The result, motivation went down, small businesses stopped hiring and unemployment went up and stayed up; and in some states it’s still getting worse.

Then Came ObamaCare

With motivation down, the Obama administration then committed another horrendous error of judgment – they rammed ObamaCare down a mostly unwilling nation’s throat.

Obamcare essentially subsidizes health insurance for low and middle-income groups and attempts to recover the cost by taxing high-earners even more, which in turn lowers motivation and causes people to hunker down instead of trying to grow their businesses.

And what makes it even worse is that low and moderate-income workers now feel no need to earn money because they can now maintain the same standard of living with even less effort.

Obama’s Response?

Seeing popularity wane both for him personally and for his policies Obama set out a stand and tried to sell the public his unwanted wares.

Expanding health care coverage was somehow going to somehow drive down costs.

Handouts to state and local governments became a stimulus package.

Climate change legislation became a “green jobs” bill, and so on.

When the voters didn’t buy his arguments his response was to tell them that, “They are confused and not thinking clearly” and that one statement will cost him dearly.

You don’t tell people that you want to vote for you that they are basically stupid if they don’t understand you, do you?

Harry Reid just said something equally stupid and it might cost him re-election in Nevada, “He saved the world economy!”.

Doesn’t he know that Oblamer is the One?!

Could Obama Have Played It Differently And Maybe Won?

Yes, he could have!

Obama could have embraced at least two policies that would have enhanced both equity and economic performance simultaneously, and some of them might well have bridged the ideological divide.

Fannie Mae and Freddie Mac.

Loan guarantees should not have been provided for Fannie and Freddie because they shifted risk from participants in real estate transactions to taxpayers, and the caused capital to flow into the industry under very favorable terms.

Creating the guarantees allowed mortgage lenders, realtors, homebuilders, developers, securities traders and others to reap enormous gains during the boom, only to later dump their losses on taxpayers during the ensuing bust.

Cutting off all federal support for Fannie and Freddie would have sent a completely different message.

It would not only have greatly enhanced equity, but would also have helped steer investment away from ever more conspicuous McMansions and into productive endeavors like building newer, more-efficient factories, all of which would have stimulated economic growth.

* “McMansion” is an originally pejorative term used to describe a large house, particularly in the United States, that is constructed using modern labor-saving techniques and materials

The Tax Code

Another area that was ripe for reform would have been the loophole-ridden tax code.

Today, the proliferation of carve-outs means that only around 40% of personal income is taxed!

The loopholes should have been removed as much as was possible and the tax base broadened, after which the Obama administration could have slashed rates, enhanced equity, and provided a huge stimulus to the economy.

Instead, the administration did exactly the opposite; it added even more loopholes and promised to raise rates!

Right now we have a situation where similarly situated families often face vastly different tax burdens depending on their ability to game the system, and it also means that investment is steered away from companies that are adept at building better products, to those with the knack for lobbying.

Will Obama Move The Goal Posts?

Obama was a member of the New Party (communist) just 13 years ago, and he was no teen.

Michelle is a Black separatist of the worst kind as her Princeton thesis shows.

Obama is on record as saying that he’d rather be a great one term President than an ineffectual two termer, so we can sadly expect him and Michelle to continue to try and force their socialist/communist on America!

Related posts:

1. More Than Eighty Reasons Why Obama Shouldn’t Be Reelected!
2. The ‘Loan Modification Program’ Finally Gets Underway.
3. More U.S. Cities Are Bulldozing Abandoned Homes

World banks brace for euro collapse | GoldSilver.com

goldsilver.com12/26/11

Banks around the world are preparing for the possible collapse of the euro as fears of the European debt crisis increase.

What Will Happen if the Euro Collapses? A Few Scenarios | Global …

globalspin.blogs.time.com12/13/11

Despite the distracting political drama over the UK's outlier rejection at last week's European Union agreement on fiscal and budgetary coordination, it's now become clear that main objective of the collective effort–to ensure …

If you think that the European financial crisis resembles the American banking crisis of a couple of years ago then you’re underestimating the gravity of Europe’s problem.

The European sub-prime crisis of 2007 and 2008 was ‘solved’, although most likely only temporarily, by nationalizing bank debt, and whilst that calmed the markets, the bottom line is that bank debt was merely being transferred onto the public-sector balance sheets.

The governor of the Bank of England, Mervyn King perhaps summed it up best when he said:

“Dealing with a banking crisis was difficult enough, but at least there were public-sector balance sheets onto which the problems could be moved. Once you move into sovereign debt, there is no answer; there’s no backstop”.

The investors who leapt back into the US markets in 2009 and fueled the biggest stock-market leap since the recovery from the Wall Street Crash in the early 1930s, are now quickly disappearing and the confusion on European bourses is even worse, and we are now in a similar position to that of 2008.

The crunch that is now happening in Europe was foreseen by a great many economists for many years however, because of the difference in approach by Germany and Holland who practice high saving and low spending, and the Mediterranean countries and southern Ireland who have exactly the opposite approach.

The Mediterranean countries and the U.K. too, borrowed cheap in order to raise their standards of living, ignoring the question of whether they could afford to take on so much debt, and that was one of the main causes of the sub-prime disaster.

The Big Danger

Whereas it was possible to bail out sub-prime households, and the banks that lent to them, the International Monetary Fund doesn’t have enough cash to bail out major economies like Spain, Italy or Britain.

The sub-prime property market in the US, together with its slightly less toxic relatives represented a $2 trillion mound of debt, but the combined public and private debt of the most troubled European countries which include Greece, Portugal and Spain is closer to $9 trillion.

If Greek and other government bonds collapse, then that country’s banking system would de facto become insolvent overnight and banks throughout the euro area would be at risk because they hold so much of their neighbors’ government debt.

The Prognosis

It took Britain just a few days in September 2008 for the Government to push through the semi-nationalization of Royal Bank of Scotland and HBOS, but as politicians are now discovering, organizing a European sovereign bail-out is far, far more difficult than rescuing a bank, or banks.

The euro continues to fall and European politicians who are torn between Brussels and their electorates are emitting confusing signals which only tend to destabilize the markets even further.

The single currency might possibly survive, but only if its members were to agree to an even closer political union, and the likelihood of that happening seems as likely as the survival of the Euro.

Related posts:

1. Will China Cause America’s Next Financial Crisis?
2. Watchdog- “Causes Of Financial Crisis Have Not Been Addressed”.
3. Ten US Banks Needs A Total Of $75 Billion

According to the National Association of Realtors, whose records go back to 1979, the median U.S. price for an existing single-family home dropped a record 15.6% to $174,100 in the second quarter of this year.

But Home Sales Increased

Meanwhile, sales of new homes increased by 11% for new homes and 3.6% for existing homes, which suggests that it’s a buyer’s market, and that buyers are taking advantage of the falling prices.

The total dollar reduction was $27.8 billion, and the states that were hardest hit were Nevada (15%) and Florida (13%) and a quarter of would-be sellers lowered prices by around 10%.

Which States Reduced Had The Most Reductions?

Connecticut, Massachusetts, Rhode Island and Illinois had the highest share of homes with price reductions of around 33%.

Then came,

Oregon 29%, followed by,

Washington
New Jersey
Minnesota
New Hampshire
Maryland.

Which Cities Were Worst Hit?

Jacksonville, Florida 38%
Portland, Oregon 35%
Milwaukee, Minneapolis, Boston and Seattle 34%
Albuquerque, New Mexico, and Chicago 33%
Detroit; 16%
Las Vegas 15%
Miami 13%
New York City and Phoenix 12%
San Francisco and Los Angeles 10%

* Undeveloped land and foreclosed properties were excluded from the above estimates.

Related posts:

1. Home Prices Higher In February Than In January
2. Home Prices in U.S. Expected to Fall Through 2010
3. U.S. Home Vacancies Reach Record High

Those looking at a V shape believe that if the recession nosedived, which is one side of the V, then it should bottom out and quickly recover to its former glory, the other side of the V.

The U shapers believe that if a recession begins quickly, but then slows down, remains at the bottom for a while and then skyrockets back to its previous glory, that it is U shaped.

Which Are Right?

If you look at any of the previous recessions that were caused by the bursting of a huge speculative bubble, you will find that the recoveries took a long long time to come about, which suggests that the V shape believers are wrong in expecting a quick recovery from the present recession, because the economy cratered very quickly indeed.

Those that believe that we’re in a U shape right now are perhaps closer to the truth, because they believe that exiting from the present crisis will take a great deal of time.

U-shapers believe however, that what will drive the recovery is investors that slowly come back into the market to take advantage of the low prices.

This recession is so deep however, that it’s not investors that will have to bring about some kind of recovery, but consumers, and right now they’re not playing ball.

Consumers account for around 70% of the U.S. economy and they’re the ones that took a real beating this time, and until they start spending you can forget about any serious kind of recovery.

What, No V Or U Shaped Return To Former Glory?

The two chances of regaining what once was, are probably slim and nothing.

The question might be better phrased, “how will consumers start fueling the economy?”.

The growing line of unemployed won’t fuel it, and householders will have a major problem getting home equity loans and perhaps worst of all, those that do have a little cash are intent on keeping it, and we just saw consumer confidence take another dive.

The probable truth is that America has seen the end of its economic, and perhaps its military hegemony, and Obama for right or wrong, certainly doesn’t want a return to either them.

America is surviving on loans right now, and will be for the foreseeable future.

The Chinese have a two billion dollar surplus, and will soon demand higher returns on their investment in the U.S. because they see it as overburdened with debt and that will only increase the U.S.’s debt mountain.

Americans will replace worn out cars and appliances of course, but who will invest in factories and businesses that build those things?

The original question was;

Will the U.S. Return To Its Former Glory?

The answer is almost certainly ‘no’, and a Scottish historian by the name of Professor Alexander Fraser Tyler, who wrote in 1787 about the decline and fall of the Athenian Republic over two thousand years before, perhaps explains it best.

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.”

“The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence:

From bondage to spiritual faith
From spiritual faith to great courage
From courage to liberty
From liberty to abundance
From abundance to complacency
From complacency to apathy
From apathy to dependence
From dependence back again into bondage”.

Related posts:

1. The Economic News Is Both Good And Bad
2. A Meltdown Of The Euro Will Be Far Far Worse Than The Banking Crisis
3. Our Economy – When Even The Ugly Looks Pretty.

U.S. household wealth fell in the first quarter by $1.3 trillion, extending the biggest slump on record, as home and stock prices dropped.

Real-estate-related household assets decreased by $551.1 billion, which follows a $974.5 billion decrease in the fourth quarter, and mortgage borrowing was unchanged from January through March.

Retail sales did rise in May for the first time in three months, but the increase was solely due to people returning to automobile showrooms looking for bargains.

The economy contracted at a 5.7% annual rate in the first quarter, and consumer spending rose by 1.5%.

Related posts:

1. $5.1 Trillion Decline In Household Wealth Is Almost Equal to Size Of U.S. Econcomy
2. Tarp And Its Tentacles Could End Up Costing $23.7 Trillion
3. Does Obama’s $8.6 Trillion Deficit Worry You?

What do they mean “probably rose”?

Surely, they did or they didn’t.

Sifting through the reports the good news was;

Orders for goods meant to last several years increased 0.4% making it the second gain in three months.

Combined sales of new and existing homes probably advanced to a 5.02 million annual rate from a 4.93 million pace in March, but again the reports say “probably”.

If true, and not “probable” then the above is good new but a stabilization in housing and manufacturing would help the present economic slump since they are the two areas suffering the biggest contractions. It won’t be possible to maintain these gains however unless banks loosen their purse strings, if unemployment continues to rise.

David Resler, who is the chief economist at Nomura Securities International Inc. in New York added to the “probables” and “expecteds” by saying “Evidence that the 16-month recession is coming to an end continues to build. Home sales and building activity seem to be stabilizing and manufacturing surveys point to smaller production cuts and smaller job losses”.

A spokesperson for Toll Brothers Inc., the largest U.S. builder of luxury homes, said last week, “That signs were beginning to emerge that the worst was over”, and “We believe the U.S. government’s forceful intervention in the capital markets has begun to restore some confidence that the financial system is on the road to stabilization”.

So the pundits are now telling us that the recovery is, “probable”, “expected” and “suggested”, and I hope that what they see is their glass balls is correct and that it will all happen soon, but I’d have liked to have seen more definitives.

Related posts:

1. U.S. Fixed Mortgage Rates Continue To Drop
2. Home Prices Higher In February Than In January
3. U.S. Housing Starts Unexpectedly Fall To Record Low

The “Jack Welch” Portfolio Algorithm « CSS Analytics

cssanalytics.wordpress.com10/14/11

Jack Welch is one of the most recognizable names in business as the former CEO of General Electric. His skills and leadership in running one of the largest companies in the world have been the source of numerous books …

Jack Welch Led Gossip Sessions « Leadership Freak

leadershipfreak.wordpress.com11/18/11

Jack Welch Led Gossip Sessions. With typical candor and color, Jack Welch said, “We always had one hell-of-ah gossip session after every meeting.” (ELP, 2011, NYC). At least two things happened at meetings Jack Welch …

Jack Welch, the former chief executive officer of General Electric Co., and author of “Straight from the Gut”, has been very busy on the talk shows and speaking circuit lately, and here’s what he’s been saying.

“The government has taken advantage of the economic crisis to get a tighter grip on the US economy, and this does not bode well for business”.

“There are so many things that bother me right now. Over the last couple of weeks, things have really gone south in the government relationships”.

“These guys, when they came in, said a crisis like this is impossible to waste. The government seems to think there’s a crisis and now we can get in here and do all the things that we dreamed about when we were at Harvard, when we were somewhere else”.

“The government now controls about 37% of the US economy, including health care, and this makes businesses uneasy, despite promises that the state’s role will shrink when the economy gets better. Now, these guys say they want to get out. Do you believe that? Do they want to get out?”.

“The Troubled Assets Relief Program (TARP) funds, with the conditions attached to them, are also something to be avoided by businesses. And the news that six insurers secured a green light from the Treasury Department to receive funds under the TARP is not good news”. Referring to Obama, Welch said, “I don’t particularly like where he’s taking us. To get the money he needs, he has to have a fake budget. He’s fooling people about how we’re going to have the top line support the programs in the middle without enormous taxes”. Asked about the restructuring of Chrysler, he replied, “I didn’t like the terms. The creditors’ rights were trashed and the unions got 55% of the company”. He did have a couple of good things to say though, “The president’s plan to implement the nation’s first national standard for greenhouse-gas emissions was sound. This emissions plan is not one that gives me great trouble’. And on the direction of the economy, “I want new housing starts to go down, down, down. It’s the only way to get housing prices stabilized, and we need to stabilize housing prices. While the market didn’t like it, housing starts going down again I like it”.

Related posts:

1. U.S. Housing Starts Unexpectedly Fall To Record Low
2. More U.S. Cities Are Bulldozing Abandoned Homes
3. More Than Eighty Reasons Why Obama Shouldn’t Be Reelected!

A 13% decline to an annual rate of 458,000 was led by a 46% decline in multi-family starts, compared to March when builders broke ground on 525,000 homes.

Building permits, which are a sign of future construction fell by 3.3% to a record low rate of 494,000 and taken together the two declines suggest that house prices have not yet reached rock-bottom.

So called experts had forecast an increase to a 520,000 annual pace from a 510,000 previously estimated pace the prior month, and they also forecast that building permits would increase to 530,000 annual rate.

But to give credit where it’s due, Maxwell Clarke, who is the chief U.S. economist at IDEAglobal Inc said even before the report came out that, “Weakness in housing continues. Declining prospects for developers should continue to act as a drag on investment and overall output in 2009″.

Overall the housing market is showing some signs of stabilization and confidence amongst U.S. homebuilders in May increased to the highest level since September, and although sales of new homes are still 70% below their 2005 highs, they have risen slightly from their record January lows.

Related posts:

1. U.S. House Prices And Starts Drop The Most On Record
2. U.S. Home Vacancies Reach Record High
3. U.S. Fixed Mortgage Rates Continue To Drop