2011

TO ALL, HAVE A WONDERFUL MERRY CHRISTMAS. MAY 2011 BE MEANINGFUL AND SURROUNDED BY CLARITY ON YOUR PATH. :) :) :)

The Numbers Tell the Story

I seem to be locked into viewing the continuing foreclosure momentum. There are 5 million families who owe at least 25% more than what their house would sell for. 2 million go underwater if their houses loses 5% of their market value. There are about 11 million underwater. The biggest statistic is that since 2006, families have lost $7 trillion in home equity value. That has created a huge psychological impact to feeling rich or poor and what and when to spend money. Compare that to the trillions in debt this country has incurred and one can see that we are being bombarded from all directions. The housing situation is more subtle yet powerful in its influence over everything else. Look at Fannie and Freddie and the billions they ask for quarterly with no ceiling in effect like our debt ceiling that Congress has to vote on. They receive what they ask for. This is a reflections of millions of people losing their biggest asset. Viewing the headlines today, it seems to be under the radar because there has been so much emphasis on it in the recent past. Yet it will come back to the surface again, because action is required to set this on a different path.

Bernanke's latest implemented plan to buy $600 billion of bonds to keep the interests down and the dollar lower has created the opposite effect. Since our search for a home, the mortgage rate has gone from 4.12% to 4.7%. That is a 14% increase in less than two months. On a $150,000 mortgage, that is an extra $72.50 a month.

Numbers are meaningful. They tell the story. Is there anyone interested in reading it?

Foreclosure Update, Federal Reserve Transparency

25% of the homes sold from July-September 2010 were foreclosures. The average price was 32% less than non-distressed properties. 25-30% have been foreclosure sales for the year. In 2005 it was 1%. Look at this contrast; today it's up to 30 times more than 5 years ago. These statistics plus the commercial market I referred to in the previous blog reflect where we stand in the roots of our country. This area alone has far reaching effects from the bottom all the way to the top.

Transparency finally arrived, after months in court and appeals. The Federal Reserve released the list, and a total of 21,000 transactions, of who received emergency funds during the financial crisis to the tune of $3.3T. Not only our big banks received hundreds of billions (this is beyond the original TARP money), but companies like, G.E., Harley-Davidson, and Verizon. Also, foreign banks in England, Switzerland, Japan, Belgium, Germany and so on received around $600B. The South Korean government and foreign auto makers also were in the receiving line. 9 of the 10 largest money-market funds who managed about $2.4T received help with these emergency funds when investors fled. Again, this reflects the roots of what needs to be changed in this country. It's unclear to me how a determination was made that this group was critical to our financial system. I wonder what their formula was to determine who should be rescued given the variety of countries and companies. As I have said before, Bernanke and this organization have far too much power, especially when they can operate beneath our sight.

I am heartened that all of this is coming to light. Then the roots that don't benefit us at this time in history in our evolution can be cut off, leaving room for what we need to grow to flourish in the future.