I think everyone is for more transperancy. Some like the sound of that word but are afraid to actually have some real transperancy in action. Some are afraid that if we actually knew what was going on it would cause panic in the streets and the whole system would come tumbling down.
One of the big things that President Obama promised was transperancy in government.
Ron Paul has a bill that would audit the Federal Reserve and bring to light what the Federal Reserve is doing with trillions of dollars.
He got 309 out of 434 members of Congress to cosponser the bill. Of course, a bill has to go through a long process and might come out being something much different than what the actual title of the bill might lead you to believe.
This almost happened to Ron Paul's bill. Finance committee member, Mel Watt, gutted the bill and turned it into a bill that would actually make the Federal Reserve more secretive and more powerful. I'm sure it wouldn't surprise you that Mel Watt represents the Charlotte area where Bank of America's headquarters are. And I guess it wouldn't surprise you that most of his campaign money came from banks and financial institutions.
Fortunately, an amendment, the Paul/Grayson Amendment, was passed that will bring back most of Ron Paul's original bill.
This morning on CNBC they are already trying to make auditing the Fed sound like it will be a really bad thing for the economy and the market.
Here is Alan Grayson explaining why the Watt amendment is a step back and then Mel Watt pleads his case that if the Paul/Grayson Amendment is passed it will wreak havoc in the markets. Who to believe? My trust is in Ron Paul.
Before I give you my predictions for 2010, let me show you just how good I was back in October 2008 when I made predictions on a slew of economics statistics for the second quarter of 2009. I know, predicting what the unemployment rate will be just 9 months ahead shouldn't be that tough. It's not like you have to be a highly trained and highly paid economist or something.
So the official numbers are in for the second quarter of 2009. Let's see how well I was able to predict some things. I know I must be good at this stuff because thousands of people came to hear me talk about what I see coming up for the next year.
I'm a housing specialist and I predicted prices to go up by 2.6% but they actually went down by 12.8%. I guess no one could have seen that one coming.
I guess it might have been because I was predicting unemployment to only be 6.6% and then it went all the way up to 9.3%.
Interest rates went down much more than I expected. 30 year fixed rate ended up at 5% instead of 6.5% as I predicted.
For some reason thousands of people still came to listen to my predictions for 2010. I guess they think I'm pretty good at this stuff. Maybe people like the way I sound or the way I present my numbers. Here's some good advice. If you sound like you know what you are talking about, people usually don't bother to check out your past performance, especially if you have a PhD or other smart sounding credentials.
I guess if you are a Realtor you like when someone like me says that the housing recovery has begun and good times are right around the corner. Someone has to give them hope.
Who am I to tell them differently? Who am I to think that I can predict what's going to happen to the housing market in the next 3-18 months?
I'll tell you who I am.
I'm Lawrence Yun, chief economist for the National Association of Realtors. I get paid the big bucks to come up with these fancy schmancy predictions. I find that if I use big words, a lot of numbers and some fancy charts, people really take me seriously.
Yes, another post about government and free markets. But dictatorship? I know most feel that "it can't happen here" but I read a great article that shows why most democracies usually end up going down the path to dictatorship. I love this country and I hate seeing the signs of it's demise.
James Madison, the father of our Constitution, knew the dangers of democracy:
A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship
Some seem to think that free market capitalism creates winners and losers and thus a big income gap which then creates social tension and divisiveness. As if only if everyone had the same amount of stuff, we would all live happily ever after.
Very rarely do you hear that free markets provide peaceful, social harmony. But think it through a little bit.
A free market, as competitive as it is, is based on peaceful, voluntary cooperation. When commerce is free and unfettered by government interference, both sides to a transaction normally gain, thereby promoting social harmony.
Democracy, by contrast, engenders social conflict. Money changes hands by force of the taxman and the threat of imprisonment, not voluntarily. Democracy pits citizens against each other in a sordid squabble whereby many strive to have the state confer benefits seized from their fellow citizens.
Here's another great quote that paints an easy to understand picture:
As the late, great economist Hans Sennholz described it, the democratic "transfer society" resembles the absurd spectacle of a circle of people, each trying to pick his neighbor's pocket. How can there be social harmony when everyone is trying to rip off someone else?
The government doesn't have a bottomless pot of gold to keep giving people all sorts of benefits. Government doesn't create any wealth at all. Any money it gives out eventually comes from the citizens: Either through taxation, borrowing(which is taxation in the future), or printing money out of thin air which is a stealth tax on everyone.
Have you seen what the national debt is. Our debt and obligations to social security and medicare are over $60 trillion! Do the math. That's $200,000 for each man, woman and child in America. Is it really possible to actually ever pay it off? Have we dug a hole so deep that it is impossible to climb out of? Is there an orderly way out of this mess?
We are starting to see two groups of people getting agitated and restless. Some people are demanding more government benefits to help them get through this recession. Others are getting angry about higher taxes and want to stop this crazy government spending.
When a financial crackup occurs, those who have been taught to depend on government will demand continued government benefits. If government fails to provide them, those demands could turn violent. On the other hand, if government moves to confiscate a significant chunk of whatever wealth remains in the hands of an already-hurting middle class, then millions of peaceful, law-abiding, hard-working Americans may finally reach the breaking point and rebel, as our forebears did in the 1770s, against a government viewed as abusive and oppressive.
How bad could it get? If the social order breaks down, civil unrest could disrupt markets and shortages of essential goods could occur. The resulting chaos could trigger martial law. A strong leader-a Caesar-could institute some sort of command order. Millions would resent it, but it would be accepted, because the alternative-civil conflict, chronic disorder, and impending starvation-would be intolerable. In such a calamity, Caesar would be the lesser of two evils. The American Republic and Constitution would join earlier democracies in the ashbin of history.
This is why I am so against all of these government programs. It's not that I don't want everyone to have healthcare. It's because I see where it will eventually lead.
I don't want to debate about details about which plan is better. I want to debate about why government should be involved in healthcare in the first place.
I don't want to fight for tidbits of benefits while I watch the greatest country in the world go down the tubes and destroy my right to life, liberty and the pursuit of happiness.
In order to stimulate the economy, China built an entire city in Inner Mongolia. It was an incredible project and is a shining example of what government spending can do. With this scale of government spending, China is keeping their GDP growing by at least 8% per year.
Before you begin thinking that maybe the US should follow China's example, you might want to watch the following video.
You'll see that this brand new, complete city is pretty much empty. There it sits in Inner Mongolia just waiting for the people to come. I'm sure it created a lot of jobs for the Chinese but somehow I think that it might have been a waste of good resources.
Hit tip to the DailyBail.com for finding this funny but sad video.
"I pledge allegiance to Americaʼs debt, and to the Chinese government that lends us money. And to the interest, for which we pay, compoundable, with higher taxes and lower pay until the day we die."
Watch this video and take a second to think about the consequences of us piling up more and more national debt.
"I sincerely believe... that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." --Thomas Jefferson to John Taylor, 1816. ME 15:23
"We believe--or we act as if we believed--that although an individual father cannot alienate the labor of his son, the aggregate body of fathers may alienate the labor of all their sons, of their posterity, in the aggregate, and oblige them to pay for all the enterprises, just or unjust, profitable or ruinous, into which our vices, our passions or our personal interests may lead us. But I trust that this proposition needs only to be looked at by an American to be seen in its true point of view, and that we shall all consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves; and consequently within what may be deemed the period of a generation, or the life of the majority." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:357
"No earthly consideration could induce my consent to contract such a debt as England has by her wars for commerce, to reduce our citizens by taxes to such wretchedness, as that laboring sixteen of the twenty-four hours, they are still unable to afford themselves bread, or barely to earn as much oatmeal or potatoes as will keep soul and body together. And all this to feed the avidity of a few millionary merchants and to keep up one thousand ships of war for the protection of their commercial speculations." --Thomas Jefferson to William H. Crawford, 1816. ME 15:29
"There is no perfect bill because there are always unintended consequences, so there will be amendments to this effort," Clinton said he told Democrats, "whatever they pass next year and the year after and the year after."
The healthcare bill is a politicians dream come true. They will have something to keep them busy with for years and years. The more they interfere, the more unintended consequences they'll be called on to fix.
"These opportunities don't come along frequently," Sen. Ben Cardin of Maryland recounted Clinton saying.
He stressed to Democrats that they can always go back and retool initiatives and amend whatever overhaul they pass, calling it, "a big complex organic thing."
I agree. It is a big complex organic thing. And that's why I don't think that it's something that the government should get involved with.
The notion that a small group of politicians can know enough to design something so complex and so personal is astounding. That they were advised by "experts" means nothing since no one is expert enough to do that. There are too many tradeoffs faced by unique individuals with infinitely varying needs...
No matter how honorable the central planners' intentions, they will fail because they cannot know the needs and wishes of 300 million different people. And if they somehow did know their needs, they wouldn't know them tomorrow.
I seems quite evident that many banks and the Federal Reserve are playing the game of "extend and pretend". They refuse to "mark to market" the value of many of their toxic loans. By doing this, they can pretend that they are still solvent and continue in business along with giving themselves nice big bonuses.
A few banks are facing reality and doing what it takes to recognize their bad loans and to get their balance sheets back in order.
Georgia's Synovus Financial (SNV) shed some $339 million worth of similarly troubled real-estate development loans and mortgages in the third quarter. The company has said it plans on selling another $261 million by year end.
In September, the company revealed it had reached an agreement with the Federal Reserve Bank of Atlanta and the State of Georgia to boost its capital levels and reduce its non-performing assets.
Why haven't other banks faced reality?
...most banks have resisted selling their most troubled loans altogether -- largely out of fears that the sales could trigger severe losses.
"The problem is that banks are facing rather difficult capital problems these days and can't take the losses involved," said Minor.
... Of course, some banks are holding out hope that the U.S. economy is indeed pulling out of recession and that their loan portfolios will recover in value.
You might have heard that the FDIC is responsible to monitor the reserves of banks. Basically, a bank needs to have enough assets and reserves so that if they had to pay off all of their depositors, they would have enough from the sale of their assets and reserves to cover all of their depositors. When banks fail to meet this criteria, the FDIC is supposed to take "Prompt and Corrective Action". Usually they go in and close them down before the situation results in loss that the FDIC would have to cover. Many of the banks that the FDIC has closed down have resulted on losses of 30-50%. It seems like the FDIC is waiting much too long and allowing the situation to deteriorate which is creating huge losses to it's insurance fund.
I have a funny feeling that many of the major banks are not meeting this criteria. They are allowed to keep loans at full face value on their books even though they might be worth pennies on the dollar.
"Their hope is that things stay where they are, that interest rates stay low and that somehow the recovery bounces us out of this position before long," he said. "I don't believe this strategy will provide the results they are hoping for. It will simply prolong the devaluation of the assets."
Everyday I see foreclosures and short sales where the banks are taking huge losses. I always wonder how these banks can remain solvent. It just comfirms my suspicions of "extend and pretend". Unfortunately, the taxpayer ends up picking up the pieces.
I've found that there are some agents who get offended that a potential buyer client might have the audacity to actually interview them before actually deciding to work with them.
To me, I'm always applying for the job as someone's real estate agent. How are buyers going to know if I'm compentent or not? I don't take it for granted that most people will automatically know that I am "Tim Maitski, Highly Successful Real Estate Agent".
So to help buyers out in the interview process, I've taken time to answer some questions that buyers seem to want to know. To some agents, this must seem like a big waste of time, but to me it's part of getting my next job. Yes, being a real estate agent is a "job". Maybe if you get enough jobs you can call it a career. But a career is only as good as each individual job along the way. I always take a minute to remind myself that it might be just one job out of many that I do every year but to the buyer, it's a huge deal and it's one of the most significant things happening in their life.
Here's a list of questions I found on the Internet along with my answers to each.
1. How long have you been licensed?I've been a licensed agent since June of 1999. It might be prudent to check it out yourself on the Georgia Real Estate Commission site. My license # is 208281. You'll see that I also got my broker's license in 2007. I don't really want to be a broker though. I took the training as continuing education. A lot of the training was how to run an office of agents and how to reduce a broker's liability. It's really not training on how to get the best deal for you buyer.
2. Do you work in real estate full time?Yes I do. I really don't see how you can do it well on a part time basis.
3. What percentage of your business is working with buyers?Probably about 80-90% of my business is working with buyers. I also help sellers but my internet marketing tends to attract buyers. I do prefer buyers because it's like going shopping every day. Who doesn't like to shop?
4. How familiar are you with the area where I want to purchase?Atlanta is a huge area and it would be very difficult for one agent to cover all areas well. I live in Sandy Springs and am very familiar with most of the northern part of Atlanta which includes Dunwoody, Roswell, Alpharetta, Cumming, Norcross, Marietta, Smyrna, Vinings, Chamblee, Tucker, Buckhead, Midtown. If you are interested in areas that I'm not too familiar with, I will refer you to another great agent in my network of agents which I've developed over the years.
5. Do you have references from other buyers who have used your services?I think it's a good idea to check references. I have no problem giving you the names of some of my most recent clients so that you can call them up and ask them questions about their experience with me. I have a few video testimonials on my website that you might want to view also.
6. Do you have an association membership that has a published code of ethics or standards of practice? If so do please list. If so do you abide by these ethics?I'm a member of the National Association of REALTORS which allows me to call myself a REALTOR. They have a code of ethics that all members agree to abide by. But most agents belong to this association so don't feel that it is any kind of big distinction. All you really have to do is pay your annual dues and take a 3 hour ethics class every four years.
7. Do you think foreclosures, bank-owned properties or for-sale-by-owner properties would be appropriate for my home search?I'll show you any homes that you want. There are advantages and disadvantages to everything. I'll try to give you the pros and cons and you can decide for yourself.
8. How often will you supply me with properties that meet my criteria?I have a great home search tool on my website that many people find to be really helpful. You can set up automatic email alerts for homes that meet your criteria. I also can set up an automatic system from my MLS that will do the same thing. I usually set up a special search in the MLS for each client of mine and I personally scan the new properties that come on the market everyday. When something good comes up, I email it to you.
9. How will you send a list of them to me?The MLS allows me to send you an email that has a link to the detailed listing sheets. I can also email you the tax records for individual properties. I also can send you an "archive" report that will show you exactly when a listing was put in the system and exactly when they made price changes and status changes.
10. Will you point out the negative aspects of each property as well as the positive aspects?Of course. I'll tell you the good, the bad and the ugly. There's never going to be a perfect home. Each home is a bag of problems. I try to help you recognize what might be in that bag of problems. I look at it from the perspective of eventually having to sell it for you when you are ready to move again. I don't want to sugarcoat everything when you are buying and then tell you a different story when you are ready to sell.
11. Please tell me how you represent buyers to help them get the best price and terms? The biggest thing I do is to help you educate yourself on value. We'll see a lot of homes which will allow you to be able to recongnize the homes that stand out from the rest. Then we'll do a comparative market analysis in order to find out what similar homes are actually selling for. We'll gather tax information and listing history information and I'll try to find out some stuff about the sellers. I'll advise you on how best to make your offer as attractive to the seller as possible. The best way to negotiate is to have 3 good choices and be ready to walk away if you don't get the price and terms that you desire.
12. Can you help me with the loan process?I have a few preferred lenders who I trust to give my client good advice, service and price. I'm not an expert in mortgages but I can help you with comparisons and with the questions you need to ask. On my preferred lender page I outline how I would go about shopping for a mortgage.
13. Can you provide a list of lenders, home inspectors, insurance agents and other professionals to recommend?Over the years, I've come across many very good service providers. I love to share my list. But like anything, check them out yourself and shop around.
14. How do you get paid (percentage, before, after sell, etc.)?I get paid only at closing. If you don't buy a home, I don't make a cent. So be aware that I am motivated to get a transaction closed. But I am not a desperate agent where any one transaction is going to make or break me. My fee comes from a split of the listing agent's commission, usually it's around 3% of the purchase price. If you would deal directly with the listing agent, they would usually get to keep that amount for themselves.
15. Do you have a written agreement? If so what is the duration of that agreement?Yes, it's called the Exclusive Buyer Brokerage Agreement. It spells out both my responsibilities along with your responsibilites. Many buyers have the fear of signing something like this because they don't want to be locked in with an agent who turns out to be a loser. We can make the duration of the agreement any length of time that you are comfortable with. You can actually cancel the agreement at any time you wish. But there is a clause that says that if you cancel and then buy a home that I had showed you, I will be due a commission for that.
16. What if I see a for-sale-by-owner house on my own? That is an item we will address in the Buyer's Agency Agreement. Most for-sale-by-owners offer a buyer's agent commission. For the few that don't, we can work out some sort of arrangement. Being an independent RE/MAX agent allows me to set my own policies on fees.
17. How would you represent me as a buyer client for properties listed with your firm? RE/MAX Greater Atlanta has hundreds of agents so there is a chance that you might want to buy a home that is listed with another RE/MAX Greater Atlanta agent. In that case, we specify that we will do "designated dual agency". That means that my broker assigns me to represent you and the listing agent to represent the seller. That gets you pretty much to the same representation that you would have in any other situation.
18. Will you change your relationship with me to "dual agency", "designated agent", or "transactional broker" Yes, we will change our relationship to "designatied dual agency"
19. How might that affect your ability to negotiate on my behalf for those properties? This really won't affect negotiations at all. I will keep all your information confidential just as I would in a regular agency status.
Please email me any other questions you might have. Your questions help me understand what buyers are thinking about and what they are concerned with.
Remember, I'm looking for the job of being your real estate agent. If you have an opening, I'd love to interview for it.
If the recession is over, why aren't we seeing state sales tax receipts rising? If the economy is 70% consumption, how can the economy be growing when retail spending is still going down?
Every month I do a Google News Search for "state sales tax receipts" to find the latest numbers being reported by the states. There's a great site that compiles all of the stats but it is always 4 months behind in crunching the numbers and getting out their report. News stories give the most current information. I also don't think that state treasurers can manipulate the stats too much unlike some of the other government stats that come out.
So here are some recent news stories about sales tax receipts. Just about every story about sales tax for October show a decrease from the same period in 2008, some by large amounts. Remember October 2008? At the very beginning of the month we were told that the economy was on the edge of collapse if we didn't get the $800 billion TARP passed. So it's not like October 2008 was a month that was an unusually positive month. Negative comparisons to that month should indicate that spending has really slowed down.
Sales taxes came in at $404 million for the month, $60 million more than during October 2008. But state officials cautioned that the boost was not a sign of increased retail activity but rather the result of a higher tax rate and an expansion of the tax to cover more products.
Maybe GDP went up 3.2% in the 3rd quarter but it makes me question whether that is actually a reliable indicator on what's actually happening in the economy.
Can we actually have a jobless recovery along with a spendingless recovery?
Edit: The retail sales number for October came out and showed increased retail sales. So what gives? How can sales be up yet sales taxes collected be down. Here a good explanation on how the retail sales reports don't take in account stores that close. Very interesting and it makes you question just how much confidence you can put on the reported numbers.
I'm sure most people have heard of John Maynard Keynes. He's the "brilliant" economist who is the father of the government stimulus.
...along came John Maynard Keynes's tome "The General Theory of Employment, Interest and Money" in 1936. Keynes was dapper, fresh and sophisticated. He even wrote in English! And the guy had chutzpah, fearlessly fighting the battle against unemployment by running the currency printing press and draining the government's coffers.
He was the anti-Mises. So what if Keynes had lost his shirt in the stock-market crash. His book was peppered with fancy math (even Greek letters) and that meant rigor, modernity. To add insult to injury, Mises wasn't even refuted by Keynes and his ilk. He was ignored.
Ludwig von Mises wrote his book "The Theory of Money and Credit" back in 1912, just one year before our Federal Reserve was born. Unfortunately, his book, written in German, really didn't get much play. It explained exactly why something like the Federal Reserve would eventually lead to ever more volatile business cycles.
This is the best, to the point, analysis of his theory and is very relevant to our current situation:
Government-imposed interest rates artificially below rates demanded by savers leads to increased borrowing and capital investment beyond what savers will provide. This causes temporarily higher employment, wages and consumption.
Ordinarily, any random spikes in credit would be quickly absorbed by the system-the pricing errors corrected, the half-baked investments liquidated, like a supple tree yielding to the wind and then returning. But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse.
The system is dramatically susceptible to errors, both on the policy side and on the entrepreneurial side. Government expansion of credit takes a system otherwise capable of adjustment and resilience and transforms it into one with tremendous cyclical volatility.
It reminds me of the academic debate between communism and capitalism. Even after seeing the Soviet Union do a 70 year long experiment with total government control and seeing it fail, many still think that more government control is the path to work towards.
So now that we've been following the path of Keynes for the past 70 years and have seen how it has failed, many still think that more of the same is what is needed. More government stimulus and more government borrowing. Hopefully our system won't collapse like the Soviet Union. Unfortunately, it will probably take a collapse in order to get back to a system that works.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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