Corvallis Community Newspaper > National News 2007

Stockton California "Foreclosure Capital of the World" MSNBC report

Tue, 25 Sep 2007 10:27:09 MST

Jane Wells, reporter for MSNBC, just concluded a piece on the number of foreclosures in Stockton, California. One of every 38 homes in Stockton California is in foreclosure.

Some of the Banks holding the mortgages are actually paying up to $3000 to have the families leave of their own accord. It is quite simply easier and cheaper for the Banks to pay the families rather than have those families go through the eviction process.

What is not taken into account is the impact all of these actions have on the remaining home owners. Values of other homes in the Stockton, California are falling, creating negative value for those families still paying mortgages. The point here is families paying mortgages will not be able to realize a fair price if they were required to move (sell).

Moreover, the assessments on probably every home in Stockon, California should be less than the current number. This will have a ripple affect on tax revenue in the years to come. Tax grievances ought to be a common practice if other home owners are saavy.

Lower Assessments mean lower tax revenues means fewer services provided by local Governments. Schools will be impacted if they have not already felt the pinch. Fewer students means fewer teachers and so on and so on.

Your comments will be beneficial............

Alan Greenspan Meet The Press Interview Sunday, September 23, 2007

Sun, 23 Sep 2007 10:37:26 MST

Alan Greenspan was interviewed by Tim Russert, Moderator of Meet The Press, today, Sunday,September 23, 2007.

Alan Greenspan has been on the book circuit of late, pushing his recent work "The Age of Turbulence". Tim Russert asked Alan Greenspan about his comments referring to the Iraq invasion being "all about oil". Mr. Greenspan did not back peddle on his statement. Greenspan instead went into one of his expected dissertations on facts, probabilities etc. Greenspan never quite puts any response in the vernacular.

Tim Russert asked about Greenspan's relationship with President Bill Clinton. Clearly Mr. Greenspan is a fan of Bill Clinton and of Bill Clinton's Economic Policy when he (Clinton) was President.

Greenspan was asked by Russert, "who did he think was the smartest of the Presidents he worked for"? Greenspan mentioned Nixon & Clinton, giving the edge to Mr. Clinton. Greenspan is so smitten with Bill Clinton, he (Greenspan) went on to comment on the impressive "intellect" Clinton possessed. Greenspan talked about Clinton having the wrong speech in the teleprompter at a State of the Union Speech. Greenspan stated that Bill Clinton was able to carry on without any written text to use. ( I would lke to see if our current President Bush could do so)

Mr. Greenspan does not have any lost love for President H.W. Bush, "W's" dad. Tim Russert's question was, which President put the greatest amount of "Political Pressure" on Mr. Greenspan? The answer came quickly and without hesitation, "President George H.W. Bush". No love lost in that relatonship. The Senior Bush blamed his 1992 loss to Bill Clinton on Alan Greenspan.

Well, the book (no pun intended) is not yet closed on Mr. Alan Greenspan. Although no longer Federal Reserve Chairman, Alan Greenspan retains the ability to make people in the Financial Markets jump when he (Greenspan) puts two syllables together.

The US Dollar at record lows against Euro, British Pound and Canadian Dollar

Fri, 21 Sep 2007 09:23:01 MST

The "Dollar" for the first time since 1976 is trading equal to the Canadian Dollar. A traveler to Canada will not notice the difference unless that traveler visited Canada when, in prior times, One American Dollar would get the traveler about $1.30 Canadian.

In Addition, anyone visiting Europe, in the coming days and months, will be paying a substantial increase in everything from Hotels to dining to car rentals. The Euro will cost more than $1.40 in American Dollars. The Pound is at $2.00 (American conversion) and rising.

Well, foreign travelers will benefit if they decide to visit America. Also, American exports are less expensive and Imports (cars, televisions) to America will cost more for the average american consumer.

The very rich will not be as impacted by price increases. The cost of gasoline will rise in the coming months and if this winter is colder than normal, heating oil will be a major concern, especially in the Northeastern United States.

The falling dollar in the short term is acceptable to those that preach "supply side economics" (Larry Kudlow from CNBC). However, the long term effect will have a major impact on infaltion.

Gold and other commodities are at levels not seen in over 25 years.

Keep an eye on Saudi Arabia. The Saudi's are wary of a weak American Dollar.

Opinions are appreciated...................

Henry Paulson, Treasury Secretary seeks to raise National Debt Ceiling

Wed, 19 Sep 2007 10:56:29 MST

Henry Paulson, Secretary of the Treasury, has requested an increase, in the National Debt limit, of some $850 billion dollars that would raise the National Debt ceiling to nearly $10 Trillion Dollars. This request has been given early approval from a Senate Panel.

Ten trillion dollars is a staggering fiqure, the "National Debt" at the time Mr. Bush assumed office, in 2001, was just over four trillion dollars. That number was not exactly small change. The United States fiscal policy, more precisely, lack of fiscal policy, has virtually assured that the next generation and beyond will be tasked with fixing this mess. The alternative is almost unthinkable.

The lack of outrage from "Politicos" and the "Financials Geniuses" is unacceptable. The short term euphoria, the Stock Market is enjoying, from the Federal Reserves rate cuts of yesterday, Septemer, 18, 2007, will in this writers judgment have lingering long term effects on the United States Economy.

I trust Mr. Bernanke, Federal Reserve Chairman, has thought through the consequences and unintended consequences of the recent Fed's rates cuts.

It is relevant to this discussion that President Clinton, while in office, actually paid down the National Debt at least in small measure. If nothing else was accomplished by having reduced the National Debt, Mr. Clinton demonstrated he had at least some sense of fiscal and monetary policy.

Opinions are important. If you have a pro or con view, please let this scribe hear about it.

Federal Reserve lowers Fed Funds & discount Rate

Tue, 18 Sep 2007 11:56:40 MST

Minutes ago the Federal Reserve, Ben Bernanke Chairman, lowered the Discount Rate and the Fed Funds rate by 50 basis points. The Market is responding with a rally. Jim Cramer is almost having a seizure on CNBC celebrating.

I am waiting for the other shoe to drop. Inflation is ever present. In my earlier essay today I stated there should be no cuts in either rate. Well, I guess my opinion is not carrying much weight.

This is a short term quick fix. I see Mr. Bernanke as having blinked to the pressure he was receiving from the Bush Administration. The Treasury Secretary, Henry Paulson, has been invisible in this process. Make no mistake there had to have been major pressure behind the scenes. I cannot prove it, but any economist worth their copy of the Wall Street Journal would agree with me.

It is likely the markets could go up in excess of 300 points today merely on the euphoria of the rate cut. Tomorrow there will be a sell off, profit taking, and the net result, there will be no change in the standard operating procedure (Culture) of the Markets.

Well, I am no Jim Cramer, any buyer should tread cautiously when making any stock purchase.

Imports from China

Sat, 03 Nov 2007 09:32:51 MST

While listening to CNBC today, I was surprised to hear that 80% of the fresh garlic sold in the United States comes from China. Even the CNBC Financial pundits were shocked.

California was in my mind (and The CNBC pundits mind) the largest producer of garlic for US consumption. China produces something like four times the amount of garlic than does California.

I am not against Chinese garlic, however, the "Red Flag" (no pun intended) in my mind is, does China take shortcuts in production that may be harmful in some fashion? China does have a history that concerns this writer. Just think of the lead in the toy's fiasco.

This writer does enjoy garlic. How do we discern where garlic is imported from? Just another thing to put on our "watch list".

The Federal Reserve and Ben Bernanke

Tue, 18 Sep 2007 09:20:46 MST

Today, September 18, 2007, the World waits with great anticipation to see if the Federal Reserve, Ben Bernanke et al., will lower the Fed. Funds Rate and the Discount rate.

The Stock Market has already factored in a quarter point rate reduction. Just look at the past weeks numbers. The Financial pundits have argued and continue to do so, as I write this essay, to have the Federal Reserve cut "fifty basis points" from the Discount rate. The Federal Reserve ought to do "Zip, Zero, Nothing", in this writers judgment.

There are several "dramas" playing out while all of this angst is taking place, waiting for the "Fed" to take this action.

Mr. Alan Greenspan, while out hawking his new book, "The Age of Turbulence", is reveling in the attention he is receiving from the media. The Stock Market seems to "twitch" every time Alan Greenspan says something. Per Greenspan, "obfuscation" is his "forte".

Mr. Bernanke is not so naive as the Financial Markets may think. He, Bernanke, is very sage when it comes to the workings of the Markets.

The Mortgage mess is indirectly a result of Mr. Greenspan giving a wink and a nod to the activities of the Mortgage industry over the last decade. Greenspans tacit approval of the Mortgage Bankers zeal in making money is justification enough for Mr. Bernanke to not lower the "Rates".

Well, shortly the horse will be let out of the barn, and all of the speculation will be for naught. In any case if the Federal Reserve does lower rates, those homowners in foreclosure will not see much improvement in their chances of not losing their homes.

The real issues underlying this financial crisis will not be solved until definitive actions are initiated by Congress (do not count on Congress) to reel in excessive spending and get our Federal deficits under control. The National Debt has not been reduced since President Clinton was in office.

Your opinions are welcome.............

Hovnanian Homes weekend home sales Sept 14, 15, 16, 2007

Mon, 17 Sep 2007 08:39:30 MST

Hovnanian Homes just concluded its special weekend sales promotion. The piece I just read was inconclusive, regarding the level of success Hovanian Homes achieved, simply because Hovnanian Homes "Hedged their bets" by stating the full results of their weekend sales promotion would not be available until Tuesday, September 18, 2007.

Anyone familiar with the real estate/mortgage industry will tell you that until a contract is validated (ratified) with certain conditions (Financial etc.), no sale is absolute until the closing takes place, funds dispersed and deeds are recorded in the County Clerks office.

It is not a surprise to read thousands visited their homesites in New Jersey. That is fairly typical of any new homes "model complex". Even when a buyer has a "letter of approval" from a lender it is based on information provided to the lender at that point in time. All Lending institutions perform another review of the buyers financial status just before closing is to takeplace.

In addition, it is standard procedure in the financial world to not "fund" any loan until literally the last moments prior to a closing/settlement is to occur.

So, it will be interesting to see the final sales results from the Hovnanian Homes sales promotion last weekend. Also, Hovnanian Homes says that it was "a one time sales promotion event". it is worth the wait to see when they do it again............

Hovnanian Homes Slashes "Spec" Home Prices

Mon, 17 Sep 2007 08:14:48 MST

Hovnanian Homes has been all over the news today. Their stock has dropped dramatically in the last year. The NBC nightly news, with Brian Williams, just did another report on a Hovnanian Homes subdivision in Woodbridge, Virginia.

This is after the same news report on Hovnanian Homes earlier today, September 14, 2007, on CNBC. Well, at least Hovnanian Homes has received a lot of free publicity from the media. Besides the fact that home prices have been cut $100,000 and probably more and this will most likely go beyond the announced three day promotion, previous buyers are justifiably annoyed that they paid the full price at the time they purchased a home from Hovnanian Homes.

There is another issue with profound implications. If each of those earlier home owners are paying local property taxes based on higher purchase prices (higher assessments), then those home owners have a clear right to file a "tax grievance" with their "Local Governments".

These actions via "Tax Grievances" ought to be upheld by the local governments. The greater point is that all local Governments base their yearly budgets in large measure with property tax revenue as a major component.

What will the end game be on this issue? How many Tax Grievances will be filed? How much projected Revenue will local Governments not have to fund their budgets? Will this result in a cut in local services, layoffs, impact School Budgets?

I am not crying "Wolf", I am merely pointing out the clear fact that this issue is like a snowball rolling downhill.

I do not think that the full impact of this mortgage crisis has been realized.............

Your take on this is important, feel free to comment................

Bank of America raising ATM Fees

Thu, 13 Sep 2007 05:07:40 MST

I just heard on CNBC that the Bank of America was raising the fee for non- Bank of America Customers to $3.00 per ATM transaction. Well, there was the expected outrage expressed in the man on the street interviews.

What is key here is the increase is for non- Bank of America Customers. So, it would appear that the Bank of America is not annoying their own customers but instead taking obvious advantage of those non-customers that have been using Bank of America ATM's.

What should not be lost in translation is that the fee heretofore was probably $2.00. Was the previous fee acceptable? I guess so, I did not hear the outrage prior to the increase today. Give it a couple of weeks, this outrage too will pass. The Banks all know it, just wait until all the other Banks raise their rates.

These fees all add to the "bottom Line" for the Banks. Per, CNBC these fees are more reliable than collecting interest on poor performing loans. The Banks wind up writing those loans off the books...............

Chairman of Capital One Corporation on CNBC

Thu, 13 Sep 2007 02:00:33 MST

Earlier today, September 13, 2007, the Chairman of Capital One Corporation, Richard Fairbank, made an appearance on CNBC. The gist of his comments were focused on the fact that approximately 30% of credit card holders of Capital One Credit Cards were past due in account payments.

Further commentary by the hosts of CNBC related to the fact that there was a large percentage of card holders using their credit cards to purchase groceries. In some cases credit card companies were checking on their clients (through credit reports) to ascertain if they were still credit worthy. Some card holders credit lines could be reduced if those individuals were behind on their mortgages.

Capital One should be held accountable for some of the credit delinquencies card holders are experiencing. Capital One, in this writers judgment, uses predatory methods to entice people to secure credit cards, that in effect, benefit Capital One, and put the card holder in jeopardy immediately upon agreeing to the terms and conditions of the credit card agreements.

If you question this statement, just ask someone, who probably should not have a credit card, how many pieces of mail solicitations those individuals receive in the mail almost daily.

Capital One's enormous profits over the years have been partially a result of this type of questionable credit card agreement process.

Newspaper ad spending trending down

Wed, 12 Sep 2007 11:32:23 MST

It has been reported today on CNBC that Newspaper Advertising is down for the second straight quarter. General Motors has cut their Advertising Budget by 25%.

These facts are significant to the future of Newspaper Advertising. Newspapers have been losing advertising revenue for several years. The Internet is the largest benefactor in the wake of the Newspapers loss of advertising revenues.

Social Networking sites such as facebook and Christonium are in good position to present a challenge to the Print Media.

Christonium is free and available to any internet user. The internet is the first place the younger consumer goes to to seek information on purcahses. This dynamic will continue to follow to the older demographics 45-70 years.

Try out Christonium................

Will any of the Presidential Candidates have a positive impact on the Country

Thu, 06 Sep 2007 08:51:53 MST

The real question the voters of America should be asking to each of the Presidential Candidates is " What positive impact will he/she have on the fortunes of the United States"?

I for one would be very interested to hear what each of the candidates would have to say, that was not a scripted response. The expected tailored responses that have to this point been shared with the electorate do not foretell how each individual might respond in a crisis.

The eventual successful candidate should be able to demonstrate by virtue of his/her experience just how their thought process brought them to a significant decision somewhere in their professional/personal lives.

Being a student of History, I just do not see any of these candidates rising to the level of some of our past Presidents, Teddy and Franklin Roosevelt, Harry Truman, and Dwight Eisenhower.

Do you concur with my premise?

Recession is it in the Forecast for 2008

Wed, 16 Sep 2009 07:48:10 MST

Well, today, September 5, 2007 the Stock Market is about 150 down points as of 11AM eastern time. I do not hear any of the brain power on CNBC or any other Financial News Organization discussing the history behind the 1929 crash.

Some Background, there was a rebound in the short term in late 1929. It was a period of several months and several poor decisions by Congress, (Smoot-Hawley Tariff in 1930) that helped to exacerbate the Great Depression (along with buying stocks on margin).

I am not suggesting that will be the case in 2007. However, The ebbs & flows of the Business cycle and the need to clear up the mess from the "mortgage debacle" No-Doc Loans, No Money down loans etc. is paramount.

Let me know your position....................

Housing Reports show continued negative trend

Tue, 04 Sep 2007 08:54:09 MST

On most of the television shows, Business & Local News, the prevailing mantra is that real estate in general is in a downward spiral. Yes, that is in fact the case. Those major builders, such as Centex Homes and Toll Brothers made mega bucks for more than a decade. Now the declining credit markets have put a major hit on these folks. Not to worry though, the Centex's and Toll Brothers of the world will survive.

The real issue is that the many home owners that probably should not have bought a new home (on a shoe string) will be getting a visit from "Reality". The best thing that this writer would suggest is to not put your home on the market, unless you have no other option. The most basic law of Economics (Supply & Demand) is in play, too many homes on the Market and too few buyers. The result, falling prices. What to do?

It seems the best option is to contact one's lender. I do not see the Major Banks (Trustees) wanting to become major holders of empty real estate. See what you can do. It may be better to initiate the action while the "Markets" are stuck on the sidelines waiting for Mr. Bernake to bail them out.