Looking Out From the Garage

Wayback Wednesday... Political Incorrectness

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There is a video clip that has been EVERYWHERE on the internet.  It has been re-subtitled more times than I can count.  Almost any subject that is causing anyone frustration, from the collapse of the housing bubble to the Democrat meltdown to the way some people drive in traffic...  They've all had a version of this video.

And while it isn't politically correct, it is funny.  And I don't care about being politically correct.  I prefer funny.  And Bill Mahr is politically correct... and NOT generally funny.

Pop back a couple of years and see what the fuss was about...

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7 comments • Lane Bailey - REALTOR & Car Guy • November 20 2010 12:08AM

Can I get a sub 4% loan, too?

A small bank in Washington state is hoping that they have the answer to bail-out some of their clients... clients that are builders and owe them millions of dollars. 

They are offering loans as low as 3.875% for buyers with excellent credit and 20% to put down (3.973% APR).  Basically, they are trading loans to builders that are underwater with loans to buyers that aren't.  And while the loans won't really generate a lot of profit for them, they are certainly better off than they would be if they had dozens of builders going bankrupt on them. 

It isn't all honey and roses, though... 

Some critics argue that the lower rates will push up prices and when the rates are gone, the prices will drop further, leaving the buyers with the low rates upside-down on their home values. 

Inman News had a great write-up about this.  Catch it before it goes to the paid-only side.  Here is the link. 

Personally, I think this is brilliant... in the right market.  It isn't the right thing in a market that is heavily declining.  Basically, it might slow the bleeding temporarily, but it wouldn't start the healing.  But for a market that has hit bottom or is really close, it could be the turning point. 

Frankly, I don't know the market in Washington state where Banner Bank operates.  But, there aren't a lot of markets that are still heavily depreciating.  There are certainly some that are still going down... actually, a lot that are still dropping, but not at the rate they were in the last year.  Perhaps Banner Bank is in a market that is skidding along the bottom... in that case, the move is brilliant. They don't want to own properties... they want a portfolio of performing loans.

Smart moves come from those that need to make something happen... not from those that wait for a bail-out.

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7 comments • Lane Bailey - REALTOR & Car Guy • March 17 2009 11:52PM

Have you been left wondering how we've gotten here?

There are so many things going on in the world of finance right now.  I know that you are hearing about things like:

  • Mark to Market
  • Credit Market Freeze
  • Derivatives
  • Sub-Prime Mortgage Meltdown
  • Mortgage Backed Securities (MBS)

And there are a hundred more... 

I can't explain each of these in depth, but they are some of the things that NEED to be understood in order to know how we got to this point where the banks aren't willing to loan money to each other even overnight.

The path that we took to get here, in part, goes back to an item called the Community Reinvestment Act.  Groups used it to force banks to make loans that were VERY shaky.  It has its beginings in the Carter Administration.  It really built steam in the Clinton years.  It kind of faded into the background in the early years of Bush... but the market was flush, so the problem was just a festering wound over unbroken skin until home values started to get challenged.

I have written a lot on my other blog about how the CRA and groups like ACORN played a large part in the financial problems we are currently facing... but I'm trying to not be political here (yes, I AM opinionated).

This is the part that you need to know.  This has been a long time coming.  And now, because there are so many bad loans, and banks don't know which other banks might have junk on their books, they don't trust each other.

What needs to happen in order to move forward is that trust in the financial system needs to be restored.  That is the goal of the bailout.

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5 comments • Lane Bailey - REALTOR & Car Guy • October 25 2008 09:45PM

What Caused Our Economic Crisis?

Under 11 minutes.  Give yourself just under 11 minutes. 

Via Scott Hudspeth:

I get asked every day and many times, what caused our Economic Crisis, this video does a great job of answering that questions, Watch this video in its entirety.

http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=event_597487

FYI I'm not taking sides but it makes you think.

Scott

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2 comments • Lane Bailey - REALTOR & Car Guy • October 14 2008 09:16PM

That's why we play the game...

Garrett Playing HockeyI am hearing a score of different opinions about how this rescue or that bailout is going to affect the credit market, stock market or housing market.  Seldom do the agree... most float to the extremes:

  • It won't have an effect at all, it is wasted money
  • If we don't, the world will crash down around us

And yet, here we sit on a VERY down Dow (could turn tomorrow) and a still frozen credit market.  Of course, the programs take a little time (at least the proponents tell us that) to get rolling.

But, the point is that the stock market, housing market and event the credit market all run on emotion.  Forget metrics and statistics.  Forget ratios and charts and history.  The only thing that really matters is emotion.  And the only emotions that matter are fear and desire (some say greed).  Garrett and ThrashWhen people are more fearful than desirous, they pull money out and the market goes down.  When desire over-rides fear, the markets go up.  They are seldom balanced. 

We are living in a world of fear...

Perhaps the governmental actions will ease the fear.  Maybe not.  But, the point is simply this.  We have to play the game to find the outcome.  Every time two sports teams square off, there is a statistical favorite.  And many times they win.  But, not always...  That is why the game gets played.

Regardless of what we think will happen with the intervention in the markets, we have to play the game to find out the results. Had we not intervened... we'd still play the game.  Just a different home team.

Game on...

 

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5 comments • Lane Bailey - REALTOR & Car Guy • October 11 2008 11:06PM