Archive for 2010

The show Extreme Makeover Home Edition helps families coming from difficult circumstances have a new life. The extreme examples they choose make for interesting drama, and I have found myself watching this show and rejoicing with the happy families. Watching the show makes you feel good; it leaves you believing that good people can come together and make a real difference for those who would otherwise struggle mightily. There is a fine line between extreme joy and extreme anger and sadness. When you see people who have been given so much waste it irresponsibly, the intense joy becomes something very different. I find it difficult to contain my anger when I read stories like these. How do people who were given so much do something so stupid? Like the stories…[READ MORE]

Did those people who lost their homes during the Great Housing Bubble learn any important lessons? Did people learn that certain financial management techniques don't work very well? Or did people learn that building a Ponzi Scheme is a great way to manage their finances except during those unexpected economic downturns? People can learn very valuable life's lessons from the mistakes of others. If I didn't believe that, I wouldn't keep writing. However, this blog is not likely to change the way millions of California borrowers live. As long as lenders enable foolishness, we will have fools who will step forward. Best Protection Against Another Housing Bubble May be a Generation's Painful Lessons By Robert X Cringely Mar 29th 2010 @ 2:30PM…[READ MORE]

At the core of every con is a dream. A con artist tempts a victim with dreams of riches or power to come in order to get them to do something today. It wasn't long ago it was only realtors and mortgage brokers who sold the dream. Now, our own government is joining the choir. Over two years ago, I expressed by deep cynicism over the endless parade of Bailouts and False Hopes. As the bailouts continued, grew in number, and failed miserably, others have come to share my view. The Permanent Mortgage Crisis One more housing bailout to prolong the market agony. Last Friday the White House announced its latest plan to prevent mortgage foreclosures, and earlier this week the…[READ MORE]

The Debt Star has cleared the planet….. For now fellow OCHN readers we’re going to a galaxy far, far away. Circling planet Overborrow_ 92620 are the giant Star Destroyers, each packed with dastardly bankers and fearsome asset managers. The Armada, comprised mainly of BofA, Wells Fargo, Citi, and Chase, has tried their best to level the planet and reclaim it’s wealth. For now, Rebel forces have held off the Imperials believing the longer they stand and fight, the sooner will come some measure of rebel victory. Thwarting the will of the Emperor so far has been pretty easy. As anyone knows, Imperial Storm Troopers have to be the worst fighting force in the galaxy. They can’t shoot worth a damn.…[READ MORE]

I like people who tell it like it is, and I try to do the same. I think "balanced" reporting is one of the reasons for the death of newspapers. Most issues in life are shades of gray, and presenting both sides of an argument can be helpful for people to decide for themselves what they believe is right and what is wrong. However, there are many issues that fall much more to the extreme of black or white, wise or foolish, good or bad, right or wrong. When these issues are presented in a balanced way, it distorts the truth. I think the various bailouts for both lenders and borrowers are wrong -- 100% wrong. There is no balanced middle where some moral hazard is acceptable. Taxpayer funded bailouts are state-sanctioned theft,…[READ MORE]

We are all living in our own bubbles. Each of us has a tenuous grasp on reality, and with the steady flow of bullshit and propaganda that implants gross lies into our collective consciousness, our perception of reality becomes ever more distorted. It is a difficult and often time-consuming task to find Truth and Reality buried beneath obtuse writing and intentional obfuscation. Bubble thinking is rampant, and the primary reason for its persistence is that people want the free spending money houses provide. The huge financial reward each bubble participant received as they went to the housing ATM gave a spender's high like no other. Absent another housing bubble, most bubble participants will never have access to that kind of money again.…[READ MORE]

Lenders really need to let go. They blew it. It's over. Just let it die. Both the lender and the borrower pay a price -- or at least they are supposed to. Instead, we bail them out, and we pay the price. Don't forget about us who pay for their mistakes. Part of the price we pay is obvious in the accounting for the various bailouts, but much of the price we pay is hidden in higher home prices, greater public indebtedness, and in the subsidized entitlements of borrowers everywhere. Government backed loan modification attempts are ill-conceived because bailouts create moral hazard. However, the bailouts and the resulting moral hazard can be disguised inside the black box of obfuscation and paperwork of the HAMP program. If the banks and bureaucrats raise…[READ MORE]

Did our brilliant politicians and the cool heads at the Federal Reserve save the world? Popular public opinion says yes. Me and many other astute observors say no. The only thing our collective actions has accomplished is to stop a group of greedy and ignorant fools from experiencing the consequences of their actions. Instead, the consequences have been passed on to us in the form of huge government bailouts and locally inflated house prices. Blame It on the Bubble Dean Baker Politicians and the media continue to refer to the economic downturn as being the result of a financial crisis. This is wrong. We have 15 million people out of work because the housing bubble that drove the economy since the last recession finally burst.…[READ MORE]

Lenders and borrowers dance with disaster. Borrowers have the lead in the amend-pretend-extend fandango, but as the economy improves, along with lender balance sheets, lenders will take the lead. As the default shuffle plays out, wallflowers who chose not to cha-cha are wilting under the economic distress caused when the music stopped. Dancers are short on chairs. Walking One Block Damaged By The Housing Crisis by Tamara Keith Dana Lane doesn't look devastated. It's part of a California subdivision built in the late 1980s, a mix of stucco and wood siding with mismatched fences. It looks like so many working-class suburban blocks. But since the foreclosure crisis started, Riverside County, Calif., has ranked near the top of the list for its rate of homes being…[READ MORE]

Properties are encumbered with too much debt, and buyers in markets where prices have not crashed are being asked to pay much higher prices as a percentage of their incomes than generations past. Today's buyers are being asked to pay for the excesses of those that came before them and sell out to the money changers. Mom, Apple Pie and Mortgages By ROBERT J. SHILLERPublished: March 5, 2010 FOR decades, the federal government has subsidized housing — particularly owner-occupied housing. This has been especially true during the continuing financial crisis, with Fannie Mae, Freddie Mac and the Federal Housing Administration propping up the housing market by issuing guarantees for investors on most new mortgages. But what is the long-term justification for putting…[READ MORE]

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