economy: Penny Plan Would Fix the Debt Crisis - 07/28/11 11:11 AM
This afternoon on the radio, Rep Connie Mack talked about the “One Percent Spending Reduction Act," legislation – also known as the "Penny Plan" – that was introduced by Senator Mike Enzi (R-WY) last week, and authored by Congressman Connie Mack (R-FL) last spring in the U.S. House of Representatives. 
The Penny Plan balances the budget by:    • Cutting total federal spending by one percent each year for six consecutive years,    • Setting an overall spending cap of 18 percent of gross domestic product in 2018, and    • Reducing overall spending by $7.5 trillion over 10 years.
If Congress and the … (7 comments)

economy: Real Estate Recovery – House Sharing Instead of Downsizing - 07/27/11 11:55 AM
Remember the Waltons? They were a close-knit family going through hard economic times.  The custom in those days was for several generations to live in the same house – grandparents, parents, and children.  They had their problems, but they shared the workload and supported each other through their hardships.
Well, tough economic times are back and more families are electing to share a house with parents and/or their grown children. I’ve met several  retirees in the last year who lived alone in a big house for one reason or another and found the upkeep was too much for them to handle … (10 comments)

economy: Tell Congress How You Want Them to Solve the Debt Crisis - 07/26/11 02:56 AM
Last night, President Obama suggested we call our Congressmen/women to let them know how we want them to settle the debt crisis.  Before you do, be sure you understand what’s at stake:
We currently have a national debt of  $14+ trillion and growing.  For a visual of the US national debt click here. Every year, the government spends more than it receives in tax revenues. In the last two years, $1.5 trillion has been added to the national debt each year. In order to pay our country's bills, we have to borrow money every month, but we’ve almost reached our credit limit again … (13 comments)

economy: Washington’s Double-Talk about Spending Cuts - 07/18/11 06:08 AM
National Review Online writer, Michael Tanner, in his recent article, The Intransigent Meet the Unserious, describes for the uninitiated what Washington really means when it talks about spending cuts.  For most of us, when we talk about cutting back on our spending, we mean that we'll spend less than we did before. 
Washington, however, uses a baseline budget, which means that if it was planning on spending 2 billion more on a program next year and decides to spend only 1 billion more, that's a spending cut of 1 billion.  So even if Congress can agree on a package of "spending … (3 comments)

economy: Are the Big Banks Overwhelmed, Incompetent, or Dishonest? - 07/05/11 09:54 AM
Any Realtor who has worked short sales can attest to the frustrating delays, lost documents, and mistakes made by the largest banks.  Many buyers' agents warn off their buyers if the lien holder is BOA, WF, or Chase and many agents won't list  a short sale if one of those three is a lien holder.  The problems aren't limited to short sales, however, and the situation is far worse for the mortgagors who took out a loan with one of these giants.  The Associated Press posted an article this morning about continued incompetence in these banks relating to loan modifications.
The … (7 comments)

economy: Why has Obama Changed His Mind about the Corporate Jet Tax Credit? - 07/03/11 12:47 AM
National Review and The Hill recently posted articles (see below) about the President's bashing of the corporate jet tax credit, noting his negative focus on it during a recent press conference.  During the conference, he made six (sarcastic) references to the corporate jet tax credit, which McLaughlin panelists  on their July 2 TV broadcast, say is inconsequential in its contribution to the budget and national debt.
This is the same tax credit that was part of the 2009 Stimulus program and was intended to boost the economy and employment.   Since Obama has lately urged the country to focus on manufacturing to … (2 comments)

economy: Congress and the President could take a lesson from Realtors - 07/01/11 11:10 AM
Realtors know that good negotiating skills are required for success and most work hard to hone those skills.  Compromise, in which both sides give up something important and neither is satisfied with the result, isn't the ideal. Instead,  an agreement should be sought that's  satisfactory to all and meets each side's most important goals. (If Republicans' and Democrats' highest goals for the country are mutually exclusive,  however, we have a bigger problem than the debt ceiling.)
To reach a satisfactory agreement, smart Realtors know it's necessary to listen to each other and try to understand the other side's viewpoint .  This … (7 comments)

economy: Capitalism Isn’t Evil, Greed is Evil - 06/14/11 01:52 AM
I viewed the Michael Moore video, Capitalism: a Love Story yesterday. It's worth watching.  It was disturbing, but not because he brought to light anything I didn't already know, but because his conclusion was that capitalism is evil.   He suggests it be replaced by democracy. Huh?
Capitalism is an economic system, whereby ownership in business can be private.  Democracy is a form of government in which power is vested in the people and exercised by them or by their elected agents under a free electoral system.  Is Moore suggesting that our economic system should be government controlled?
All of the actions … (7 comments)

economy: Will B Corporations Help Turn our Economy Around? - 06/10/11 02:11 PM
I was excited to read recently about B (benefit) corporations in The Nation online magazine in their Reimagining Capitalism series.   The article describes a new type of corporation that's been written into law in Maryland, New Jersey, Virginia, and Vermont, and hopefully will take hold in other states as well.  
While the sole purpose of most  corporations is to make money,  the B corporation couples profit with a mission for "making  a positive impact on society and the environment"  which is included in their articles of incorporation. Some examples are "bringing a local river back to life, providing affordable housing, facilitating animal adoptions … (3 comments)

economy: YouTube Channel sets up Political Debates - 05/25/11 01:35 AM
YouTube recently launched a channel  for politicians, called YouTube Town Hall, to debate both sides of major issues and allow viewers to select the view they support.  This sounds like a great use of social media since anyone with a computer can attend the "Town Hall".  Politicians don't identify their party affiliation, with the intent to focus viewers on the issue, not the political party.
According to Mashable, "Debates will be on many topics surrounding the budget, economy, energy, Afghanistan, education and health care. Initially topics were chosen by popularity on Google News and Google web search over the past year, … (2 comments)

economy: Will the QRM (Qualified Residential Mortgage) Provision Prevent Risky Loans? - 05/24/11 02:27 AM
Never mind the fact that the QRM provision applies only to conventional loans, the whole idea of it is to give lenders an exemption to keeping 5% of each sale (that becomes part of an MBS) in reserves as "risk rentention", to minimize the chance that they will make risky loans as they did in the past.
If you aren't familiar with the QRM (Qualified Residential Mortgage) provision for the Dodd-Barney act, you can read about it here:
If legislators make the definition of a QRM (for conventional loans)  too broad (low down payment, lower credit, etc.),  that will allow lenders … (0 comments)

economy: Rising Gas Prices Affect Home-Buyers' Decision - 05/18/11 05:44 AM
Inman News reported today that because of rising gas prices, buyers are looking for homes that are closer to their work. According to a survey of 1,188 Coldwell Banker Associates, 89% said that a shorter commute time is of primary importance in choosing a location, while 77% said that a home office is more important than ever due to rising gas prices.
Buyers should keep in mind that gas prices may go back down and they may be happier in the long run if they select a home based the long-term living needs of their family rather than the price of … (1 comments)

economy: Now That it’s Passed, Nancy Pelosi’s Constituents Don’t Like What They Found in Obamacare - 05/17/11 03:45 AM
Nancy Pelosi's now famous remark that "We won't know what's in this healthcare bill until it's been passed" is coming back to haunt her -  20% of the latest 203 Healthcare Waivers were for fancy restaurants, nightclubs, and hotels in Pelosi's Northern California district.  It's not clear why these luxury establishments required waivers nor why they were granted. 
The Obama Administration hasn't revealed its criteria for granting or denying waivers, but it's starting to look like favoritism with so many granted to Pelosi's constituents and 26% of them granted to Unions.
Another troubling aspect of the Healthcare law is that in … (4 comments)

economy: Obama’s next campaign slogan? - 05/11/11 01:10 PM
It's discouraging to hear, only halfway through the presidential term, that Mr. Obama has started his campaign for 2012 and is hoping to raise 1 billion dollars toward that end.  Like most politicians (in both parties), now that the campaign is underway, he's probably going to tread lightly in fear of offending big contributors. There go our hopes for making hard decisions that will help our economy.
Barack Obama touched a nerve and warmed the hearts of many Americans during his last campaign with the slogan "The Change We Need". Most of us are still waiting for that change and since … (6 comments)

economy: Redlining or Hesitant to Make High-Risk Loans? - 05/06/11 12:56 AM
Redlining is a discriminatory practice of targeting specific areas, primarily poor minority neighborhoods, to deny them financial services for mortgages and insurance because of high default rates. In this case, the qualifications and creditworthiness of an individual are not taken into account, but are rejected because of the area in which they live.
Redlining became known as such because lenders would draw a red line around a neighborhood on a map, often targeting areas with a high concentration of minorities, and then refuse to lend in those areas because they considered the risk too high.  The Fair Housing Act of 1968 … (2 comments)

economy: Wall Street Planning to use Social Media to Predict Performance - 05/02/11 01:47 AM
Andrew Graham, a media strategist in New York who specializes in finance, energy, and public policy posted an article on saying that Wall Street plans to use raw data available on social networks to "reliably predict how the markets for their investments will trend. One London-based investment manager says it will launch a fund dedicated entirely to using Twitter for investment decisions ... by the use of computer-driven algorithms designed to buy and sell massive volumes of stocks, bonds, options, and other financial instruments on their own".
The article explains that currently computers make most trading decisions (between 46 and 73%) but competition … (1 comments)

economy: Good News for Buyers, Bad News for Sellers - 05/01/11 01:47 AM
First quarter of 2011 showed sales for single-family detached homes up by 20% and average price down by 11% in Tallahassee, FL.  Average time on the market: 150 days. 
As more foreclosures hit the market, prices continue to be driven down and homeowners who need to sell should pull out the stops to get their home sold before prices go any lower.
Economic conditions both nationally and globally don't look promising for the next few years, so if you've got to sell, get out as fast as possible.  If you don't know how to get your house sold quickly, ask your … (0 comments)

economy: Dave Ramsey calls those dependent on Social Security LOSERS - 04/30/11 01:13 AM
On his radio show recently when giving advice to a young man who is trying hard to work his way out of a financial disaster, Dave referred to those dependent on Social Security for income as LOSERS.  Dave seems to think that it's a no-brainer that everyone should be debt free and have sufficient investments to live comfortably in retirement. All they have to do is follow his simple baby steps.
If they have already cut back to the bone and are living at poverty level, all they have to do is increase their income - simple in this age … (4 comments)

economy: Shoud you try to get 100% Financing on your Home Purchase? - 04/27/11 01:37 AM
In the days when housing was appreciating at a good clip, even with 100% financing, equity buildup happened in a short period of time and if you needed to sell, it was possible to make a profit even in a couple of years. 
Currently, home values are still falling (at least in Tallahassee) and if you get a loan with 100% financing (VA, Rural development, Down Payment Assistance programs), you may find that soon your mortgage is underwater. If a personal crisis happens - job loss, medical bills, death of family member, etc. - you may be strapped for cash and … (8 comments)

economy: Comeback America: Turning the Country Around and Restoring Fiscal Responsibility - 04/22/11 12:30 PM
This book by David M. Walker, President & CEO of Peter G. Peterson Foundation, former comptroller general of the U.S., and CEO of the U.S. Government Accountability Office from 1998 to 2008,  is a look at the problems in our economy from an insider's viewpoint. His education and unique experience give us an insight into the cause of our current issues and the book proposes workable solutions, although they are likely to be resisted by those who refuse to see what's ahead.
Walker describes our government policies and procedures as wasteful and bureaucratic  (no surprises there) and blames the country's issues … (2 comments)