Discussion:Where are the Flippers?

"DUE TO RECENT BUDGET CUTS, AND THE RISING COST OF ELECTRICITY, GAS AND OIL, THE LIGHT AT THE END OF THE TUNNEL HAS BEEN TURNED OFF.

WE APOLOGIZE FOR ANY INCONVENIENCE."

Another highlight, I understand there is some plan to allow non-itemizers to deduct property taxes. This has not passed both houses yet.

Now the TP has to foot the bill to bail them out. Where is their money to pay for their mistakes? Guess I am really Republican...hehehehe

They say Fannie and Fredie are too big to fail. Well, if they are too big to fail, we should have regulated them more to begin with. Anyway, our government always seems to be a day late and a dollar short. P.S. The House did pass it, there were 45 Republican votes in favor. This was a minority of Republicans voting in favor, but mysteriously enough to get it passed... I would imagine you'd see something similar in the Senate coming up.

My point? Fannie Mae & Freddie Mac were selling for around $70/share in October, dropped to under $10 and have recovered to around $17. My predition is that they will be monster earners in the future & could be a buy for you bottom feeders out there.

It's an election year, politicians like their jobs. They will almost vote for bailouts when their job is on the line or when it suits them.

Remember, the House if up every 2 years as well as 1/3 of the Senate. Right after a Representative gets elected, he's running again. It's almost the same with Senators and the President. Why do you think the media has that silly "first 100 days" benchmark for any new President.

The Democrats feel they are in the best position to capture the White House since Clinton. It doesn't matter what political leaning you have. A politician would vote that Hitler was a "badly misunderstood guy" if it meant a chance to win.

We may not think bailouts are great ideas, but they are a fact of political life. The reason is money and lots of it in the form of campaign contributions. That's why you will never see publicly financed elections.

If the bailout doesn't happen, lots of people lose. They lose their homes, credit and maybe their jobs or that's what we are led to believe by the politicians. They want to show they care about "the people." If you believe that, I have a bridge in Brooklyn you might be interested in buying.

I might sound cynical, but when you live near DC and once worked there, you learn an awful lot you would rather forget.

By the way, I here house flippers are being told this is the best market to be in the flipping business. Well, that's at least what I hear Armando Montelongo says (he's on the A&E show "Flip this House.").

Tom

This type of economy is where future wealth will be made. Stock is low. R/E is low. Money is cheap. If you are positioned correctly, 7-8 figure net worth in 10 years is very realistic.

Here comes glorious Uncle Sam (not OUR Uncle Sam...just the big brother one) and who gets hurt? Those of us who work and pay our bills and live on what we have without justifying why we can't afford our mortgage....AARRGGHH!!!

Yes, the ATM known as our house is closing up shop, but Crow, think about this: who will rescue Mae and Fred (and the banks and honchos who managed to take these institutions over the cliff) but our good old Sam? But how will he do it? Print more money? If so, we will see Gresham's law applied with a vengence as bad money chases out what good money that is left. It's been 35 years since Nixon 'devalued' the dollar; I see it coming again.

BUT, there's a snag. We now owe so much money to foreigners who own our national debt, and who don't like to be paid back in cheaper dollars. In other words, Mikey don't like it. What I am saying is that soon, the Fed. will be forced to raise rates to maintain a stable dollar, or risk that 1) the dollar will no longer be the world reserve currency, and/OR 2) no one will want to continue to buy our debt. Interest rates must go up, inflation or no.

We don't own our Country any more, we've mortgaged it to the rest of the world. Ergo, we don't own our monetary policy anymore, and we will have austerity measures in the way of higher interest rates imposed on us,just like a 3rd world country. And to spell it out, think about having to raise interest rates during a depression err recession.....

They will hand out candy until after the election, then no matter who is President, watch out.

We have though started to see the other side of the DIY'er: debt cancellation questions. I expect a flood of those next year.

CrowJD, to your point: while compared to 10 years ago, our foreign ownership of debt has closed ranks to almost equal what the Federal Reserve owns, I am not buying the "chicken little" theory yet for a bunch of reasons. The Fed still holds the majority and some of our largest allies and trading partners hold the largest portions of our debt. Japan holds the most, China next, the UK, a group of oil exporters, next and so on. While yes, it has to be repaid, we all forget we import goods from all these countries. What if they called the debt and we stopped trade with Japan? Their economy would be in trouble because the US is their largest trading partner and they also rely on us for some elements of security against North Korea and China. Same deal with all these other countries. I learned this working with some economists at a government agency a whole bunch of years ago. When one country did something we didn't like, we slashed it's foreign aid. The guy was out of power a few years later. They told me that's how we do things some times (I was a lot younger, but I am positive it still goes on today).

I read today USGS claims that 90 billion barrels of crude are just north of the Arctic Circle. If we explore that, then who needs the Middle East?

My point is that our economy is truly global. We are still the world's superpower. We still lead the world in technology, economy, and strength. Our economy takes hits from time to time and we are taking one now. But we will come back.

But, I do agree on one thing: the next President is probably going to raise taxes no matter who it is.

Check out these links folks. They are all pretty good and don't worry about clicking on the CIA link. It's their World Fact Book and it's an excellent resource. It's well-researched, devoid of spin and it's a great read:

http://www.frbsf.org/education/activities/drecon/answerxml.cfm?selectedurl=/2005/0507.html

https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html

http://www.ustreas.gov/tic/mfh.txt

https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

http://www.usgs.gov/newsroom/article.asp?ID=1980&from=rss_home

Tom

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/26/AR2008072601071.html

If you bother to look at how they voted, it almost confirms my point that most of those up for re-election, especially Republican, were for the rescue plan. Democrats seemed 100% behind it.

A few years back, I dabbled in selling real estate. I got out because it was such a racket. IDrinkYourMilkshake brings up a valid point. Brokers convinced people they could afford more house than their finances allowed with an adjustable rate. They sold them the song and dance about how interest rates would not go up (how did they know?). Also, bids on houses were absolutely out of control. People thought their house was worth $250K when it might be worth $200K and shopped appraisals and waited for better offers. It was simply nuts to say the least.

I bought my house before the market went nuts and now it appraised for 2.5 times what I paid. Whooppee. Good luck selling it for that, but if I have to, I still will make money.

Tom

Couldn't agree more. Buyers were as greedy as sellers, mortgage brokers and real estate agents. I refused to sell houses to people I knew they couldn't afford. That's why I got out. It was a runaway train I knew was headed for a crash. I know when I drove by my old broker's office the other day, the parking lot wasn't as crowded as it used to be when I worked at the place.

Tom