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Happy 8-8-8 and....

☼Sunshine☼ — Fri, 08 Aug 2008 13:43:08 GMT

a Cali housing update .... 10 Reasons Why California is Years Away from a Housing Bottom: Rebuttal to Those Calling for a Bottom for California Housing. Housing in California is years away from a bottom. Let me make that clear and if you have any doubts, after reading this essay you will have a better understanding as to how I arrived at that conclusion. This article is longer since it will try to answer many of the arguments from those calling for a real estate bottom here in California. After looking at multiple sources of information like income, demographics, sales, psychology, and the economy there is no logical evidence for a housing bottom in California. It is well worth the read and certainly provides more information than a 1 minute sound bite. Recently I have noticed a resurgence of bottom talk coming from professionals in the field but also through e-mail questions. My assessment is this renewed energy has come from two primary culprits. The first is of course the Housing and Economic Recovery Act of 2008 that provides $300 billion in loan refinances and also bails out Fannie Mae and Freddie Mac. In addition, there are many provisions in the bill to juice the market all of which will have very little impact on California. Both Fannie Mae and Freddie Mac announce earnings this week and the news isn’t going to be good. Freddie Mac lost $821 million in the second quarter and announced that they will be slashing their dividend from 25 cents to 5 cents to conserve capital. This wouldn’t be such a big deal except the U.S. taxpayer is now on the hook and a loss for Fannie Mae and Freddie Mac leads us one step closer to a bailout. The second reason for the upsurge in bottom talk at least for California is the massive price drop we’ve seen this past year. A drop in the median sales price statewide by 38.38% is bound to get the attention of anyone. Yet simply because prices have fallen steeply in one year does not signal that now is a good time to buy. In fact, I will give you 10 solid reasons in this article why we are years away from any bottom in California. We really are living in a once in a lifetime bubble. It is highly probable that none of us will see a real estate and credit bubble of this size ever again. There will be minor jumps and dips in the future but nothing on this level. I think the best way to conceptualize this extremely large fiasco is to think of someone who is massively in debt. Everyone knows of a friend or family member that spends way beyond his or her means and is usually in major debt. They have nine credit cards, a $700 car payment, a $4,000 mortgage, and yet seem to shuffle debt around like musical chairs. At a certain point, this game ends and some accept the reality and confront the issue head on and others live in denial. Those that confront the reality sometimes meet with a financial professional or a debt counselor usually with advice to cut up the credit cards and develop a sustainable budget. A prudent plan. If you are serious about correcting negative cash flow situations, you really have to create a budget that takes into account how much money is coming in and going out. In the case of our country, it has gone into debt counseling, was told to cut up the credit cards but is refusing to do so and is actually applying for more credit cards! What you will not hear from bottom talkers is any mention of incomes from the vast majority of people. Sure they will use random examples of those in Bel Air, Brentwood, Laguna Beach, or Newport Coast but that is a tiny fraction of the population. They cannot use income as a measure of support because it will demolish their bottom theory. Let us now move on to the 10 reasons why California is years away from a housing bottom. Reason #1 - REO and Foreclosure Phony Numbers Here are some stunning figures: Q2 of 2008 Notice of Defaults for California: 121,341 Q2 of 2008 Foreclosures in California: 53,943 Yet when we look at the overall inventory on the market and sales, it looks like overall inventory is decreasing. How can this be? First, there are shady things going on. Can we prove this? Not with a definite yes but using multiple sources of data we can see something is not matching up. It was hard to “prove” massive fraud in the subprime markets as it was going on but we knew it was there. Sales have been falling steadily since 2005, long before the mainstream media echoed any sentiment about a bubble in California. So this number is clear. We will use the sales figures for 2007 since those have already been recorded. Now, let us take a look at the raw sales numbers for Los Angeles County for 2007: Total Sales for Los Angeles County in 2007: 74,722 Total California Sales in 2007: 352,800 So Los Angeles County made up 21.1 percent of all sales for California in 2007. The point of this is that in a county with 10,000,000 people and 88 cities can be looked at as a microcosm of the entire state with low, middle, and high income neighborhoods. Let us now look at the latest data for Los Angeles County: Los Angeles County second quarter NODs: 21,632 Los Angeles County second quarter foreclosures: 9,609 Current Inventory August 2008: 51,315 LA Sales in June of 2008: 5,678 Months of Inventory: 9 months These numbers should be pointing to the fact that we have not reached a bottom. The June data for sales is normally the highest month for sales in California for many counties. So far for the first six months in Los Angeles County we have seen this many sales: First 6 Months Los Angeles County Sales: 27,268 We are including the highest sales month in this data so we can easily see that we are nowhere close to approaching the 74,722 homes sold in 2007. Keep in mind the fall is a slow selling season and summer is almost over. We can safely assume that sales for Los Angeles County for 2008 will be approximately 50,000 to 56,000 when the year is said and done. Take a look at the NOD and foreclosure numbers for the second quarter. The fact that nearly 8 out of 10 homes that receive a notice of default in California turn into foreclosures should tell you that we are on the verge of seeing an onslaught of inventory hitting the market in the next few months. If sales are falling and foreclosures are growing, how can months of inventory be declining? First, those that do not need to sell are probably thinking twice about selling their home thus artificially lowering the overall inventory numbers. Second, we have lenders who are overwhelmed and simply choose on purpose or for whatever reason not to add the foreclosure as an REO and sometimes these homes do not appear in the MLS thus keeping certain homes off inventory lists. You can do the math. This is no bottom. In June only 35,202 homes sold statewide. For the peak month of data, this is a pathetic number. Reason #2 - The Walkaway Pay Option ARM Test It seems like the mainstream media is finally catching on that Pay Option ARM mortgages are a disaster waiting to happen. The state of California is waiting to see who will blink first. I’ve been sounding the Pay Option ARM alarm for a very long time because I really do think that this is the next major crisis. To a certain extent, the $300 billion bailout given the current guidelines is something many can swallow bitterly because it would force lenders to writedown mortgages and also the borrower will have to share future appreciation with the government. Not exactly ideal but given our government it is probably the best that we can come up with. There is literally no way to justify the Pay Option ARM mortgage debacle that we will head into. These loans turned thousands of Californians into futures traders by making their mortgage into an options contract. How so? First, these loans allowed borrowers with a few flavors of payments. You had your 30 year fixed vanilla payment. Your 15 year accelerated payment. Your interest only option. Or the most popular and most widely used, the negative amortization option. Many borrowers elected to make the minimum payment because why make the full payment if you were going to the flip the place in a few years? These loans also offered longer recast dates masking the problems for years. 5 to 7 year “anniversaries” were common where a loan payment had the potential to double once the recast date hit. The only thing keeping this gig up was massive appreciation. The lenders got to book the deferred interest as income and the borrower kept making the lowest payment. This game was good until prices started to fall. Now, many of these lenders barely recovering from the subprime mess are anxiously waiting to see how borrowers are going to respond to their recast anniversaries. I can assure you that borrowers are going to let that option expire worthless. This of course is easily explained. Why would a borrower keep making a payment on a $500,000 mortgage when the home is now worth $300,000? If they went zero down, the only incentive for them to keep making their payment is their credit history. In many cases as we are going to find out people flat out lied and never qualified for the loan in the first place. There will be no bailout for these people and this means: (a) Lenders are going to take some massive losses and will do some serious balance sheet rebalancing. (b) There is pent up demand alright. Pent up demand to get rid of these toxic mortgages. Many lenders are going to implode under the wait of their horrible mortgage underwriting. We are going to find out how pervasive and extensive this fraud network is. To paraphrase Warren Buffet, the tide is going out and we are going to see who is swimming naked. Most of these loans fall under the Alt-A category and many lenders are deluded thinking these are much better than subprime loans. They are not. How many of these loans are out in California? Total Alt-A loans as of June 2008: 688,975 Average Balance as of June 2008: $419,790 Number with a prepayment penalty: 302,909 Number with a second lien at origination: 206,216 (these are most likely worth zero) Number with interest only payment: 252,329 Number with negative amortization: 198,385 Percent with at least one late payment in last 12 months: 27% Percent ARM loans: 70% *Source: New York Fed Think about those numbers for a second. This one point is enough to quell any bottom talk. Take a look at WaMu’s Option ARM portfolio, half of which is in California and you’ll realize that we haven’t even seen the start of this mess: What is the actual notational value of the Alt-A junk floating out in the state? How about $289,224,815,250 as of June 2008. Those of you wondering where that $300 billion figure comes from, there you go. Reason #3 - Free Rent? It is hard to believe that we are even in this situation but we are going to see unintended consequences galore. First, lenders are going to realize that buyers are not going to stay current on their mortgages because: (a) The economy (b) Recast/payment shock (c) Psychology And when we say walkaway you need to realize that this is going to take on a new meaning here in California. The foreclosure process here in the state is incredibly slow. It can be anywhere from 250 to 300 days from the first sign of a problem until the sheriff comes to your door. The idea most have of walking away is that someone is going to send their keys to the lender and are going to vacate the home soon after. That is not the case. Most people are going to walkaway psychologically first, then they’ll give the keys only until the very last moment. Many borrowers already know that the market in California is in the tank. It is not coming back. Many are now realizing that come the anniversary date, they are simply unable to cover the payment. With lenders being inundated with late payments, the process is going to be delayed. If anything, borrowers have a few months maybe even a year of “free rent” as some articles are pointing out. What will this do to the market? Well, lenders are going to get reamed because of this. First, some of the bottom callers won’t see these numbers reflected as inventory but those that actually look at the data realize this is only pent up supply that will be unleashed in the next 1 to 2 years. These people are on borrowed time and so are the lenders. Instead of speeding up the process, there is even talks about making it longer! In fact, Freddie Mac only a few days ago announced that in 21 states it would extend its foreclosure timeline to 300 days from the first missed payment and 150 days from the initiation of the foreclosure process. Is it any wonder the free rent meme is now spreading? Reason #4 - The State of California is in Recession Many of those calling a bottom forget one simple thing. The state of California is in a recession! We are seeing a unique two hit housing collapse here. In the past housing bust here in California, the economy first declined then housing followed. In this bust, we see housing declining first, the economy following, and then housing getting hit a second time. This is the lull I feel we are in. We are simply on a plateau until we start seeing prices start falling again because of the economy. The bottom callers tend to gravitate toward economist and politicians that still technically feel we are not in a recession. The California Governor came out with a strong hand laying off 10,000+ part time state workers, calling for hiring freezes, spending cuts, and is now in a battle trying to bring 200,000 state employees down to the federal minimum wage because of the budget impasse. Oh yeah, we have a $15 billion budget deficit here in the state and the budget is now weeks over due. Does that really look like a sign of a good economy. Plus, we have one of the highest unemployment rates in the country. The fact that 10,000+ people were just let go, you can rest assured that the next month of data is going to put us squarely over 7% for the unemployment rate. Somehow those calling a bottom forget that you also need a healthy sustainable economy for people to jump back into the market to purchase homes. Reason #5 - Federal Reserve and U.S. Treasury Smoke and Mirrors The Federal Reserve, who in large part was fundamental in creating the easy credit that fueled this entire mess in the first place, doesn’t care about the U.S. Dollar. In fact, the U.S. Treasury doesn’t care about the dollar either. How so? First, they do their charade every so often by beating on their chest that they support a strong dollar yet do actions that actually harm the dollar. For example, recently they have started talking about their “concern” about inflation. There is a simple solution to that. All they need to do is hike the Fed Funds rate. Yet what do they do? Nothing. The U.S. Treasury instead of punishing the egregious lending that went on for a decade decides to push the largest housing bailout in history on a weekend and extend credit to the two largest mortgage entities to purchase crap mortgages from the tiny mortgage entities! As we saw with Freddie Mac, the U.S. taxpayer is going to take it in the shorts and in the end, it isn’t going to do a damn thing for the overall economy. Freddie Mac is already bleeding red and this program doesn’t go into full effect until October 1, 2008! It will help a few people purchase some nice golden parachutes but the average citizen is going to quickly realize that stimulus gimmicks and bailouts do cost something in the end. How does this apply to California? This is going to be the ultimate shock. The bailout package won’t do a thing to help that $300 billion Option ARM tsunami just waiting on the balance sheets of many lenders. Some borrowers are going to want to cement that minimum payment as their 30 year fixed payment. Bwahaha! That can’t happen. Try calling your credit card company and telling them, “yeah, I’m only going to give you $20 a month even though I owe $10,000 because that is all I can afford.” Do you really think they are going to say, “okay, we’ll writedown your balance to $5,000 just cause we like you.” Each writedown is a major loss that needs to be reported and we have nearly 700,000 of these loans in the state alone. Reason #6 - It’s the Income Stupid! Another major point that tells us we are years from a bottom is incomes still do not reflect the median price of homes in the state. In California the median household income is $53,770 if we look at the three-year average from the latest data at the Census Bureau. The median price for a home statewide is $368,250. That gives us a ratio of 6.8 which is still too high. It makes you shake your head when the peak price in April of 2007 was reached at $597,640 giving us a ratio of 11.11! Freaking unbelievable. So from a relative perspective, yeah that 6.8 ratio doesn’t seem so bad but anything seems better then the ratio of 11.11. Let us use the hypothetical numbers of this median income family buying the median priced home with a conventional 30 year fixed mortgage: Median Income: $53,770 Median Price for a California Home (June 2008): $368,250 30 year fixed mortgage with 5% down Down payment: $18,412 PITI: $2,594 Net Take Home Pay: $3,607 (filing as a married person with 2 exemptions) At this rate, 71.9% of the household net monthly income is being taken up by the house payment. Even if we use gross monthly income, this person would not qualify for the underwriting in government-backed loans. Now that income does matter and income is a direct reflection of the health of the economy, we are going to enter the next phase of the housing market. The first phase was the bubble bursting creating the economic decline and prices falling, the second phase is going to be the uncovering of the fraud and toxic loans while recasts hit at the most inopportune time. Reason #7 - Renting is Hot Renting or leasing a place is going to look a lot more attractive. In fact, in Los Angeles County the majority of people actually rent. Take a look at some of the rental rates for certain counties: Households that Rent (per county): San Francisco: 65% Los Angeles: 52.1% San Diego: 44.6% Fresno County: 43.5% Orange County: 38.6% Riverside County: 31.1% As you can see, the amount of homeownership in a county is not indicative of a healthy market. One of the most battered counties Riverside has a high home ownership rate at 68.9%. San Francisco which is one of the last areas to fall and has held up stronger than most California counties only has a 35% homeownership rate. What this should tell you is that renting in many places has already been a solid alternative. In places like San Francisco and Los Angeles the majority of households do rent. This is because even before the boom these were very high cost areas and after the boom they simply went into wonderland territory thus keeping the renting numbers high or stable. Many people who would have qualified under the “fog a mirror” guidelines during the past decade will now have a hard time landing a loan. Given the overall median income of the state the buyer pool just shrunk on a massive scale. Another argument I have been seeing looks simply at the supply side assuming everything will once again play out simply because the inventory count is decreasing. So what. Look at the phantom shady REOs and the pent up supply that will hit the market shortly. Take that plus the market demanding more stringent loan requirements and you just took away a large portion of your market. The only way to get the housing market in California roaring again is to bring back the shady mortgage loan network and the complicit Wall Street backers hungry for loans to sell off to unsuspecting foreign buyers. Do all foreigners think all Californians live in Beverly Hills? Apparently, Wall Street wanted them to believe this because stuff rated as AAA in areas with Real Homes of Genius makes no logical sense. Now renting doesn’t seem like such a bad idea and many of those that will lose their homes will become renters. Many others simply do not want to buy given the current market prices. Reason #8 - Demographics California has 36,457,000 people. That is approximately 12% of the U.S. population. The argument is a simple one for many bottom callers because the raw number of people is growing in the state of California. Yet given our overall economics this will not help the housing market. First, much of the demographic growth is not with people who earn high incomes. Most growth is in lower to middle income households. Yes, these households do require housing but they aren’t going to be paying $400,000 for a shack. They are either going to do two things which they already are: (a) rent or lease a home (see Reason #7) (b) purchase a lower priced home There is demand but for Affordable Housing in California and the unseen benefit is that this market correction is starting to do what politicians and builders couldn’t do. That is, create a surge of affordable housing through the real estate crash. You really have to love how the politicians scream and stomp their feet about affordable housing yet when prices start coming down hard they do everything they can to sign in legislation to keep prices unaffordable! This backward logic is the reason our President and Congress have ratings that are tanking faster than housing prices. The idea that the sheer number of people coming into California is going to keep prices sky high is an absurd argument. If that were the case, China with 1.3 billion people would have $1 million dollar homes in every single corner. In addition, the fact that our budget is so poor we are most likely going to see higher taxes which will impact businesses further and additional state cuts creating more job losses. From most recent reports we have actually seen a net migration of middle income earners from the state. Reason #9 - The Real Estate Feedback Loop It wasn’t uncommon to hear during the bubble days of California loan officers making $20,000 to $30,000 a month with a high school diploma. That made the lender happy but also made the state happy when they collected their income. The agents that were selling those median priced $597,640 homes were happy when they got their 6% cut. The appraiser, escrow officers, title companies, and sellers all had smiles on their faces in the mania which was the California housing market. Much of this income was a once in a lifetime opportunity. Wall Street through their sophisticated gambling racket of mortgage backed securities and all the synthetic derivatives based off these loans figured out a way to fool the world into believing the rate of growth in real estate was somehow sustainable. Take a look at the number of broker and salespersons licenses given out by the Department of Real Estate here in California: There are currently 542,267 broker and salespersons licensed in the state. This for a state that saw only 35,202 sales in June of 2008! In June of 1998 there were only 297,359 licenses in the state. So basically the number of people jumping into real estate doubled this decade while the population went up slightly: 1998: 32,987,675 2008: 36,457,000 (an increase of 10.5%) So our economy suddenly turned into one fueled by real estate. The government was happy because it was collecting beaucoup tax receipts from the decade long spending orgy. Incomes kept going up as the Ponzi housing scheme kept growing. That is the predicament we now find ourselves in. A state so dependent on real estate for everything is now facing a market that is collapsing. We didn’t diversify and we are now paying the price. Jobs connected to real estate that are now going away include: Construction Agents Brokers Banks Home Repair Insurance Finance These were good high paying jobs. Not only do these people face the pain of seeing their income fall sharply but they also do not spend hurting our “consumer” economy. These were the people buying luxury cars, clothes, and eating at expensive restaurants. The ripple effects will be felt throughout the country. Those cars made in Detroit will no longer be purchased here in California at the same level because people simply cannot spend money they do not have. The fact that fuel has surged has only accelerated the decline. Fuel is ticking lower slowly and this is good because it will bring attention back to the number one issue, which is the housing and credit crisis. This is the feedback loop we are now in and will be in for many years. As you can see from the chart above the real estate economy here in California took a decade to build and will not dissolve into the economy over night. Where do the bottom callers think these people will find jobs? The few sectors that do show growth, those of healthcare, leisure and government have their own nuisances: (a) healthcare - requires advanced training (b) leisure - much lower paying jobs typically in the service sector (c) government - Arnold said a hiring freeze so no luck there I’m not sure we are looking at the same data. Many of those seeing a bottom also thought the subprime mortgage mess would be contained. There is nothing contained about this multi-front onslaught of credit and wealth destruction. Reason #10 - Consumer Psychology: Why Buy Today when Tomorrow it will be Cheaper I talked about certain trends that are emerging. The idea of the “all hat and no cattle” mentality is something I talked about at great length in a previous article. To blame only one sector is unfair because this was a collective spending orgy. There was the powerful line that agents used of “national prices have never fallen” that is, until they did fall. This was the first time that we have ever seen a national median decline in price since the Great Depression. In fact, this decline in sharpness and strength is actually hitting at a quicker speed then that of the Great Depression. So that mantra is no longer true. In states like California, how do you explain a median price drop of 38% in one year? I love the new argument that goes like this, “well the few sales that are occurring are distressed properties and don’t accurately reflect the overall market.” Newsflash. The entire state is distressed. Unless you are selling prime property in the Hollywood Hills get accustomed to distressed sales. The number one issue on the minds of Americans is the economy. The vast majority don’t feel like buying homes when the economy is in the gutter. Also, let us assume this is the bottom. What in the world will cause prices to jump up in the next year? If anything you can rest assured that prices are going to stay the same for a few years. I would argue that prices in California won’t bottom until May of 2011 and those that are betting with their money in the futures market are in the same boat as I am. After looking at the above reasons, you can rest assured that many of those buyers sitting on the fence are aware of some of the 10 reasons. One reason may be enough to keep them from buying. 10 reasons are enough to keep you from jumping into a bubble that still has plenty of air to release.

A step in the right Direction, LA Pastic Ban

☼Sunshine☼ — Fri, 01 Aug 2008 00:14:07 GMT

http://www.guardian.co.uk/environment/2008/jul/24/plasticbags.waste Los Angeles yesterday became the second US city to end the use of plastic bags, although its ban would only take effect if the state of California does not follow through with plans to charge shoppers 25 cents for each bag. The city council unanimously approved a plastic bag ban that would take effect in 2010, shaking off an intense lobby campaign against the proposal by bag manufacturers. Los Angeles goes through more than 2bn plastic bags each year, only 5% of which are recycled, according to city estimates. The city's ban would impose a 25-cent fee for paper or biodegradable bags if shoppers do not bring their own, but council members said their plan would not be needed if the California legislature approves a pending plan to charge the same fee for plastic bag usage across the state. Supporters of the ban cited the comparatively high 21% recycling rate for paper bags in addition to the fossil fuels consumption and environmental damage wrought by plastic bag use. The ban also gained momentum after popular furniture chain Ikea imposed a 5-cent fee on US shoppers and saw plastic bag use plummet by 92%. The Los Angeles council also voted to end official city purchases of polystyrene containers for takeaway food, beginning next year. San Francisco, which uses less than half as many plastic carriers as Los Angeles, became the first American city to ban plastic bags last year. China unexpectedly followed suit in January by ending production of bags and barring shops from giving them away.

You, Me - We Owe Uncle Sam $30K+, once Signed.... Oh Yeah, your new born Niece/Nephew too

☼Sunshine☼ — Mon, 28 Jul 2008 21:56:56 GMT

As it stands, the Housing and Economic Recovery Act of 2008 otherwise known as the housing bailout bill is moving quickly through both the House of Representatives and the Senate. This weekend, the Senate overwhelmingly passed the bill with a 72-13 vote and now heads to the White House for President Bush’s signature even though he earlier voiced that he would not sign such a bill. As it stands, the majority of our politicians are backing this bill which as time goes on, will prove to be the biggest and most costly bailout in American history. Time will prove this out. In this article, I have taken some time at digging through the 694 pages of the bill and will highlight some of the most important mechanics of how this will play out in the country. The initial centerpiece of the bill was a $300 billion FHA-insured mortgage nucleus that would allow cash-strapped buyers and lenders to refinance toxic mortgages. As you will see in this article when we deconstruct this part of the legislation, very few people stand to benefit from this smoke and mirrors. The more troubling aspect of the legislation is a stealth bailing out of Fannie Mae and Freddie Mac with an almost bottomless pit of financial access. The bill practically guarantees a taxpayer bailout for these two. The problem with our current politicians is this. Democrats with control of the House should have fought harder to simply come out and nationalize the two mortgage giants. If their mission of providing liquidity to the secondary mortgage market and helping provide affordable housing to the American public is so vital, these two should be nationalized, allow shareholders who knew these were quasi-private enterprises take their hit and move on. Unfortunately, the party had no backbone of standing up for fear of being labeled a “socialist” or for fear of their political life come this November. Incredibly the market is the only thing living up to the original mission of the GSEs; ironically lower prices via this correction are making homes more affordable. That is why we have seen some increased action in sales for the Inland Empire where prices have fallen drastically. Yet the majority of Republicans are playing even a more clandestine game of politics. What the current administration is playing is verbally acknowledging free market capitalism but in reality, what they are doing is nothing more than crony capitalism. Some have called what is currently going on as socialism but socialism by definition is a redistribution of wealth from those at the highest income brackets to the vast majority of those at the bottom. Simply by looking at how the lower to middle class of our country is being on the verge of financial destruction, there is nothing socialist about this. Bailing out Bear Stearns was a targeted effort at propping up a few big key players. The market still ended up going into bear market territory and now here we stand at passing a bill that the current Republican administration strongly said it would not sign. After looking at the bill, the $300 billion FHA-insured refinance program doesn’t seem like the biggest problem. In fact, I think much of it was to provide bread and circuses for the masses. The unlimited lifeline to Fannie Mae and Freddie Mac will prove to be the undoing. It would in fact be cheaper to nationalize these two entities and be done with it. Why keep up the pretense of free market capitalism? That generation mantra is crumbling and the majority of Americans realize that there is nothing capitalistic about privatizing gains for a few of the most wealthiest and socializing the largest losses on the vast majority of the public. Here is a brief summary of some the big items in the bill: -FHA to insure up to $300 billion in new mortgages. -Federal debt limit increase from $9.815 trillion to $10.6 trillion (this is where I believe most of the Fannie Mae and Freddie Mac boondoggle will be shoveled). -Raise loan limit of mortgages purchased by Fannie Mae and Freddie Mac to 115% of the local area median price, with a nationwide cap of $625,000. -Gives the Federal Reserve a monitoring role over Fannie Mae and Freddie Mac over soundness and regulation (put the fox in charge, not a good move). -First time homebuyer tax credit of $7,500 for those that purchase a home up until June of 2009. -$4 billion in grant money to state and local governments to buy and rehabilitate foreclosed homes in low to moderate income areas. (Amazingly this is the part the Bush Administration had a major hang up over and not the Federal debt limit increase of $800 billion or the $300 billion FHA part!). -Federal backstop for Fannie Mae and Freddie Mac. Gives both GSEs a credit line increase and also allows for the U.S. Treasury to have an “equity” stake in the agencies. (This as time goes on will prove to be the most costliest mistake of the entire bill). -Elimination of down payment assistance programs -Elimination of OFHEO It is hard to delve too deeply into the Fannie Mae and Freddie Mac component since the details are so vague and open. Paulson tries to make it seem that this is only a rainy day insurance fund but fails to acknowledge that we are in a major financial hurricane. These two will use this provision and use it to its fullest. The fact the debt ceiling is so high in this new bill is because realistically this is going to be incredibly expensive. Essentially, what is happening is nationalization yet they are still trying to keep the pretense of free market capitalism. That is why I find it hard to believe Democrats did not take this angle. The vast majority of Republicans keep allowing crony capitalism to play out while Rome burns. If anything, that is why candidates like Ron Paul were able to garner support and was able to raise $34.5 million. He tapped into the fiscally conservative wing of the party which Senator Bunning tried to defend. They of course have been marginalized. So let us now dig into that $300 billion FHA component of the bill which seems to be the biggest lighthouse of hope in stopping the sliding housing market. Requirements for FHA Insured Mortgages It is useful to go through the requirements for those who will not qualify for loans since it practically rules out nearly 100% of all those in California. Take a look at this: “The mortgagor shall provide certification to the Secretary that the mortgagor has not intentionally defaulted on the mortgage or any other debt, and has not knowingly, or willfully and with actual knowledge, furnished material information known to be false for the purpose of obtaining any eligible mortgage.” Well all those that have defaulted would not qualify. Of course this should be obvious. But why should someone today at risk of default benefit more than someone who defaulted last year? Either way, this narrows the scope of who will be helped. Now in the first part of the requirements there is a clear penalty for lying on applications: “FALSE STATEMENT.-Any certification filed pursuant to clause shall contain an acknowledgment that any willful false statement made in such certification is punishable under section 1001, of title 18, United States Code, by fine or imprisonment of not more than 5 years, or both.” This comes out quickly in the requirements on page 397 of the bill. This is something that should have always been enforced but unfortunately, it takes a bill in 2008 to state the obvious. Better late than never I suppose. Here is the part that in expensive states like California will do very little: “CURRENT BORROWER DEBT-TO-INCOME RATIO.-As of March 1, 2008, the mortgagor shall have had a ratio of mortgage debt to income, taking into consideration all existing mortgages of that mortgagor at such time, greater than 31 percent (or such higher amount as the Board determines appropriate).” 31 percent debt to income ratio seems realistic and actually prudent. Yet the vast majority (approximately 80%) of Pay Option ARM borrowers, $500 billion in the United States and $300 billion in California, make only the minimum payment each month. Some of the other provisions which we will look at such as income verification will demonstrate that many of these people never should have qualified and don’t qualify today even with this bill. Here is a list that is required in terms of borrowing: - “…be determined by the reasonable ability of the mortgagor to make his or her mortgage payments.” - “not exceed 90 percent of the appraised value of the property to which such mortgage relates.” - “All penalties for prepayment or refinancing of the eligible mortgage, and all fees and penalties related to default or delinquency on the eligible mortgage, shall be waived or forgiven.” This of course is the meat of the proposal. Many of the high YSP mortgage broker products were the most risky to the borrower. The vast majority of mortgage brokers naturally went with the highest commissioned products and could care less about the borrowers ability to pay or remain sustainable. This was proven by what we are dealing with right now. This wasn’t a small fringe group but became the industry standard. There is some confusion about the principal reduction. The 90 percent principal reduction applies to the current appraised value of the home. Of course, this puts a lot of pressure on lenders to find appraisers that are more willing to make more generous appraisals. In fact, a recent report by the California Association of Realtors showed that the median price of a California home is now down by a stunning 37.7% on a year over year basis. So if a lender was to participate here in California with a median priced home, they would be chopping the price of a home to nearly a 50% loss given that homes are now down 37.7%. 50% in the eyes of many is a crash and not simply a correction. The waiving of penalties of course is not going to bode well for bringing back any of these toxic mortgages and is only going to put another nail in the coffin of the exotic mortgage product market. This in fact is good. Anyone thinking we will have mortgage chop shops on the scale that we once did is not reading this bill carefully. One of the major issues may be with second liens on homes. However that is where shared appreciation comes in: “All holders of outstanding mortgage liens on the property to which the eligible mortgage relates shall agree to accept the proceeds of the insured loan as payment in full of all indebtedness under the eligible mortgage, and all encumbrances related to such eligible mortgage shall be removed.” The perk of course is the shared appreciation. After all, why would any second lien holder of say 20 percent relinquish their piece of equity? Given the extent of a correction in California, most second liens in the last few years have become worth nothing. In fact, this bill offers the promise of future gains, which of course are not going to happen because incomes are not going to catch up. This program would also require the new mortgage to be a 30 year fixed mortgage: ‘‘(A) bear interest at a single rate that is fixed for the entire term of the mortgage; and ‘‘(B) have a maturity of not less than 30 years from the date of the beginning of amortization of such refinanced eligible mortgage.” So much for adjustable rate mortgages that only a few years ago seemed to be Alan Greenspan’s favorite kind of mortgage. Another lovely piece in this legislation is that it is going to destroy the home equity line of credit (HELOC) market and any second liens on homes that do go into this program. Take a look at this piece: ‘‘(7) PROHIBITION ON SECOND LIENS.-A mortgagor may not grant a new second lien on the mortgaged property during the first 5 years of the term of the mortgage insured under this section, except as the Board determines to be necessary to ensure the maintenance of property standards; and provided that such new outstanding liens (A) do not reduce the value of the Government’s equity in the borrower’s home; and (B) when combined with the mortgagor’s existing mortgage indebtedness, do not exceed 95 percent of the home’s appraised value at the time of the new second lien.” So much for jumping the consumer economy again through the mortgage equity withdrawal market. This effectively puts a hold for 5 years on any 2nd liens. Since home equity withdrawals played such a huge role in keeping our consumer economy up, any loans that do get refinanced into this program will not have the opportunity for 2nd liens. In addition as you will see, there are provisions that will cap any equity gains for the homeowner. The appraisal component will probably be the most important in assessing current value. This is the place were I envision most of the fraud would occur: ‘‘(8) APPRAISALS.-Any appraisal conducted in connection with a mortgage insured under this section shall- (A) be based on the current value of the property;” Well as many of you know, the current value of homes are declining as we speak. This will be important when it comes to appraising property for this program. There are other parts in the legislation for appraisal standards and this will be important in maintaining integrity with this program. The legislation will also put an end (at least for mortgages that are refinanced) to no documentation and stated income loans, another good thing: ‘‘(9) DOCUMENTATION AND VERIFICATION OF INCOME.-In complying with the FHA underwriting requirements under the HOPE for Homeowners Program under this section, the mortgagee shall document and verify the income of the mortgagor or non-filing status by procuring (A) an income tax return transcript of the income tax returns of the mortgagor, or (B) a copy of the income tax returns from the Internal Revenue Service, for the two most recent years for which the filing deadline for such years has passed and by any other method, in accordance with procedures and standards that the Board shall establish.” Well there you go. You will now have to show at least 2 years of tax returns to verify your income. No longer can you call a mortgage broker and just make up your salary or have them go on Salary.com and pull a hypothetical pay scale of what someone in your field would make. Amazingly what this admits is that there has been hardly any verification of incomes in the past decade. These minimal things should have existed. This bill will also not help any second home and vacation homeowners. Refinances will only work on primary residences. Over the past decade, many people bought second homes to flip so there will be no help for those either. Another good thing: ‘‘(11) PRIMARY RESIDENCE.-The mortgagor shall provide documentation satisfactory in the determination of the Secretary to prove that the residence covered by the mortgage to be insured under this section is occupied by the mortgagor as the primary residence of the mortgagor, and that such residence is the only residence in which the mortgagor has any present ownership interest.” What has been a criticism of the bill is lenders will choose to unload their most toxic products into the program. This is labeled as adverse selection. There is a part in the bill addressing the concerns of adverse selection yet I’m positive that it will be difficult to enforce. How are you going to be able to tell a legitimate case of someone wanting to keep their home and someone simply seeking to pass the buck to the taxpayer? There has also been some confusion about the 10% principal reduction and also a 15% reduction. I think the confusion is because the 10% reduction is part of the principal reduction by the lender, a 3% one time premium paid to the FHA, and an additional 1.5% premium paid by the borrower on an annual basis. Either way, the bottom line is lenders can off load the loan if it meets all the above and get 85% of the current appraised market value of the home: ‘‘(i) PREMIUMS.-For each refinanced eligible mortgage insured under this section, the Secretary shall establish and collect-‘‘(1) at the time of insurance, a single premium payment in an amount equal to 3 percent of the amount of the original insured principal obligation of the refinanced eligible mortgage, which shall be paid from the proceeds of the mortgage being insured under this section, through the reduction of the amount of indebtedness that existed on the eligible mortgage prior to refinancing; and ‘‘(2) in addition to the premium required under paragraph (1), an annual premium in an amount equal to 1.5 percent of the amount of the remaining insured principal balance of the mortgage.” In addition, I see very little incentive for any California borrower because future appreciation is locked away. If you look at page 410 in the bill you’ll notice a sliding scale of future appreciation. As a borrower, this is almost like a semi-quasi rent/own situation. My doubt is that because of the income requirements, loan verification, and also the shared appreciation that many borrowers will elect not to go with this: ‘‘(1) FIVE-YEAR PHASE-IN FOR EQUITY AS A RESULT OF SALE OR REFINANCING.-For each eligible mortgage insured under this section, the Secretary and the mortgagor of such mortgage shall, upon any sale or disposition of the property to which such mortgage relates, or upon the subsequent refinancing of such mortgage, be entitled to the following with respect to any equity created as a direct result of such sale or refinancing:” The bill goes on to break down the shared appreciation as such: < 1 year 100% of equity goes to government/lenders < 2 years 90% of equity ” ” < 3 years 80% of equity ” ” <4 years 70% of equity ” ” <5 years 60% of equity ” ” >5 years 50% equity share Now really, how many borrowers are going to elect to do this? I see this benefiting moderately priced states were a loan might be a horrible Pay Option ARM with a balance of $120,000 but no way do I see this helping the larger than $500,000 market in California. Let us run a 6 year scenario for the sake of argument here. Home Purchase in California at peak for : $550,000 80/20 financing for full amount (zero down) Current appraised value: $350,000 (drop of 36.3% consistent with median state price drop) Assume borrower qualifies with all the above restrictions and lender is opting to go with this program. New loan amount: $350,000 x .85 = $297,500 30 year fixed mortgage The second mortgage is wiped out and given the legislation, the only hope of recovery is future appreciation. The first mortgage holder had to take a hit of: $440,000 - $297,500 = $142,500 loss Only hope there is for the government and lien holder is future appreciation. The current owner now has a mortgage of $297,500 on a 30 year fixed note. Let us assume in 5 years the home is now valued at $400,000 and the owner sells. How is this broken down? $400,000 - $297,500 (this will be less because of principal pay down but let us assume this for this example) = $102,500 (50/50 split here) - $51,250 So in the end, the borrower would be the biggest winner but again the likelihood of prices jumping up that high is extremely remote. Many of the lenders will eat the cut upfront and this is enough to sink many institutions. They are banking deferred interest from Pay Option ARMs as income and this would force a mark to market reality. In fact, I would suspect many lenders here in California would rather take the home back and take their chance with a foreclosure or hope the market turns around later. These are crude number breakdowns but as you can see, this isn’t the part of the bill to fear the most. In fact after reading the details should it be enforced as stated, I see very little help coming from this. Some of the legislation I stand behind strongly and it is about time that we have this stated. Yet this is mixed bag of good, bad, and ugly stuff. What the CBO estimates is that the FHA will insure approximately $68 billion in loans for about 325,000 borrowers because that is how many would qualify given the above guidelines. The real disaster is with the Fannie Mae and Freddie Mac backstop since it is nearly unlimited. It isn’t clear if they are going to provide support for the share price or how that will work. If the housing market continues to deteriorate, Fannie Mae and Freddie Mac will be put at even a higher risk and assuredly this will cost the taxpayer an amazing amount of money. These two GSEs cover about half the mortgags in the United States with a combined debt of about $5.1 trillion. I’m surprised that the $300 billion part of the bill isn’t so bad. In fact, I agree with many of the measures. What shocks me most is in the last 2 weeks this knee jerked response to bailout 2 GSEs and the blind acceptance from the bulk of our politicians. Why didn’t the nationalization case get debated? Why wasn’t this bill looked at more closely (there is 649 pages! I was only able read about 50 pages and skim the rest)? Do you really think some in Congress read this entire bill? This is a major win for Wall Street and as time will show, another major loss for the average American citizen. If you think income inequality isn’t a problem you need only look at the Gini Coefficient over the past 50 years. The Gini Coefficient is used in economics to measure the income inequality in nations.

It's just business

☼Sunshine☼ — Thu, 24 Jul 2008 21:01:44 GMT

http://www.youtube.com/watch?v=WGOohBytKTU InJoy...

Foreclosures in California: 121,000 Notice of Defaults and 63,000 Foreclosures.

☼Sunshine☼ — Thu, 24 Jul 2008 03:31:15 GMT

Foreclosures in California: 121,000 Notice of Defaults and 63,000 Foreclosures. Home Values Plummeting on Record Breaking Quarter. Even though the market is once again enjoying a delusion sandwich covered in toxic mortgage mustard, the reality on the ground continues to become grimmer. Wachovia, one of the nation’s largest banks announced an $8.9 billion quarterly loss and that they’ll be slashing over 6,000 from their workforce. Oh, and the dividend is getting slashed as well. So what happens? The market of course pushes the stock up by 27%! American Express, the uber credit card company also announced problems but the market is believing that the Federal Reserve and the U.S. Treasury have some mythical powers to create money out of thin air. They do only if you own an investment bank. Yet back in the trenches of reality, Americans are feeling the massive pinch of the world’s biggest housing bubble being pricked by the sharpest needle of all, imploding debt. That is no hyperbole. In no time in our civilized history have we seen such speculation on a global scale stemming from real estate. California is the poster boy of this housing bubble. You would think that the market would be punishing lenders even harder who have created and own such financially destructive loans yet many see this as a time to jump in. Just look at the markets. Tread these waters at your own peril. Today, the California foreclosure numbers for the second quarter were released and they are not a pretty site. We went from a relatively mild 2006, to a quickly deteriorating 2007, to the current record breaking problems in 2008. The reason notice of defaults are so important for future predictions is that these are homes that have yet to be taken back by lenders. These are early signs of trouble. What this means is lenders in the upcoming months better gear up for a tsunami of REOs. We already know that the short-sale option has been a marginal joke in California. Many are so deeply in negative territory that no lender would go for a short-sale and rather would take a foreclosure. They have too many problems trying to stay solvent and avoiding their own foreclosure ala IndyMac Bank. The vast divide between lenders and how loan modifications are being handled is an utter joke. There is no standard. Some lenders are willing to work with you while others are doing absolutely nothing in the area of loan modifications. They are all holding their breath and preparing their turd bucket of mortgages ready for release into the belly of Fannie Mae and Freddie Mac. Bank of America who recently acquired toxic mortgage producer Countrywide recently alluded to the fact that they may not be backing up Countrywide debt: “(Global Trend Analysis) Bank of America Corp., the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corp.’s debt after taking over the mortgage lender, increasing the likelihood of a default. “There is no assurance that any such debt would be redeemed, assumed or guaranteed,” the bank said in an April 30 regulatory filing, adding that no decision has been reached. Investors had grown more optimistic the bank would back Countrywide debt. Ratings firm Standard & Poor’s cut the mortgage-lender’s debt to junk today after saying it would raise the grade earlier this week.” They basically are doing a “it wasn’t me” on the market. After all, would you back up Countrywide’s toxic debt? Last quarter, there was an all time record of 121,341 notice of defaults filed in California. This is incredible. Only 3 years ago, the number was 12,408 for the second quarter of 2005. That is a ten-fold jump in 3 years! Yet the more distressing analysis is when we look at the notice of defaults and also combine the actual foreclosures that occurred in the second quarter: We are now in uncharted waters. The notice of default numbers may look like they are plateauing but this is like arguing whether you are going to jump out of a 100 story or 102 story building. The number of foreclosures in the second quarter hit a stunning 63,031. If you look closely at the chart, even in 2006 many of the notice of defaults where resolved without a foreclosure actually taking place. Well of course this occurred because the massive speculation allowed those who over paid to sell to someone who over paid even more. “(DQNews) Of the homeowners in default, an estimated 22 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 52 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing, which makes ‘work- outs’ difficult.” This is not good and only reinforces the obvious which the overall market is ignoring at the moment. What this tells us is 78 percent of these notice of defaults will end up in foreclosure. Now the precipitous decline in prices is ensuring that many of those 121,341 notice of defaults will further add REO inventory for the remainder of the year and cause future losses to these banks and lenders. Now how is this going to be healthy for the market? If anything, it assures us that prices will be falling for the remainder of the year and will put a vast amount of inventory on the market during the worst selling times which are the fall and winter. This combined with the $300 billion in option ARM loans will be a destructive combination. We have yet to see the massive recasts in the pay Option ARM market. You can do the math and any lenders with large exposure in California are going to get hammered. Paulson saying we are months away from a bottom is absurd. Senator Jim Bunning was right when he called him out and stated that Paulson will be out in a few months, but the rest of us will be here to deal with any of the consequences of hasty actions. The bottom is in…but for Paulson’s career. We have just cut the umbilical cord of reality from Wall Street. Look at the action with WaMu announcing a $3.3 billion loss: “SEATTLE—Washington Mutual says it swung to a loss in the second quarter as it increased to more than $8 billion its reserve to cover sour loans.For the April-to-June period, the Seattle-based bank says it lost $3.33 billion, or $6.58 per share, which compares with a profit of $830 million, or 92 cents per share in the year-ago period. Results include a previously disclosed, one-time reduction of $3.24 per share related to the company’s capital raising in April. Thomson Financial says analysts, on average, were expecting a loss of $1.05 per share. The bank says it increased its loan loss reserves by $3.74 billion to $8.46 billion during the quarter, as it continues to face mounting losses stemming from bad mortgages.” Shares of WaMu went up and down in after hours trading as if there really is any doubt about the data. Not only did WaMu miss their target, they missed it by multiple times! Bwahahaha! And the freaking stock barely moves. Do you know where most of WaMu’s loans are? In California. Just let the above charts sink in with their vivid colors and try to take a guess what is going to happen. They’re going to need all those loss reserves for the army of Real Homes of Genius they have in their portfolio. Companies should just announce a $1 trillion dollar loss and you’ll see their stock rally by 50%. Apparently bad news is now good. Hello George Orwell! What we are seeing on main street is not being reflected by what is occurring in the stock market, which should at least reflect what is going on in the real world (aka, look at the above charts). Yet what do we expect from a government that tells us we are not in a recession, unemployment is not bad, and inflation is contained? Their panacea of course is drilling for oil we won’t see for at least 5 years! I didn’t realize subprime mortgages ran on 89-octane. All you need to do to verify this reality is take a trip to your local grocery store, fill up your tank of gas, send your kid to college, look at your mortgage, and try booking a trip out of the country and you’ll quickly realize that something is rotten in Denmark. And this should make you feel warm and fuzzy all around. The Congressional Budget Office came out saying that the rescue of Fannie Mae and Freddie Mac would cost approximately $25 billion but no one really knows how much. Heck, WaMu and Wachovia combined dished out losses of $12.2 billion in one quarter and they are peanuts to the issues confronting Fannie and Freddie. Yet they are also seeking in the legislation to increase the public debt limit by a stunning $800 billion from $9.8 trillion to $10.6 trillion: “(WSJ) The $25 billion cost estimate from the CBO for the rescue plan was downplayed by Democratic and Republican lawmakers. “Everyone knows it’s just a wild guess,” said Sen. Jim DeMint, (R., S.C.). He called the plan a “huge gamble,” but added that, “it’s kind of: Guarantee a little now or pay a whole lot later.” Lawmakers plan to raise the public-debt limit as part of the legislation to $10.6 trillion from $9.8 trillion. Congress must vote to increase the limit to account for additional borrowing, something it is loath to do, although it would have had to take that step this year even without the rescue plan for Fannie and Freddie, Democratic aides said.” This is flat out absurd! What a disgrace. You need to get in contact with your Congressperson or Senator and say you will not stand for this absurdity: Find your respresentative Find your Senator Give Senator Jim Bunning some support to filibuster this piece of toxic legislation Can you see what is happening? You’ll also see in the legislation that they are trying to raise caps to $625,000 which of course will make it convenient to off load this crappy Alt-A California mortgage junk onto the public debt. If you needed any more evidence that Washington is trying to offload this entire mess on the U.S. taxpayer, you need not look any further than this piece of legislation. What a shame. There are more Alt-A loans in California and these actually have a higher concentration of no-doc loans! Can you take a wild guess how these are going to do now that the state has a median price of $328,000, down 31.5% from the peak price of $479,000? If you look to Washington or Wall Street for your answer, don’t expect one that reflects the reality on the ground. We are living in two separate universes here. If you would have bought a median priced home in California last year at the peak, you would now be down $151,000. Is this really a reason for a rally especially in lenders that fed into that speculation that is now clearly bursting with an onslaught of foreclosures? (source: drhousingbubble)

Love v. Fear

☼Sunshine☼ — Sun, 13 Jul 2008 13:44:49 GMT

Spiritual Trendsetters by Owen Waters It is time for the world to stop being fearful. Fear breeds fear. Love breeds love. One cancels the other. Which will you choose - love or fear? If you decide to create more love in your life, the approach is simple. Spiritual awareness enhances the natural flow of the universal consciousness called love. By developing your inner spiritual connection, you attract and transmit more pure, unconditional love and all things will be added to you because of this. Your relationships will grow deeper and more harmonious. You will appreciate yourself more, simply for being the child of God that you are. You'll prosper in your professional dealings as you become more creative and, therefore, more competent and more valuable to the people you serve. It's simply a choice. To develop love, start by ignoring the fears that face the rest of the world. Don't let those issues of fear bring you down. That's what they're designed to do. If you let them bring you down, they will disempower you. Instead, focus on what will make a difference within yourself. Your domain - the realm under your control - is within you. You can change that which is within yourself. Other people are outside of your domain, so change that which you can - that which is within yourself. Then, paradoxically, you will also effect positive change in the world because you are part of the global mind consciousness. Just as there is an atmospheric belt around the world, there is also a mind belt around the world. This mind belt is constantly fed by the thoughts and emotions of every human upon the planet. People are like radio transmitters and receivers, only the energy is mind energy, not radio waves. You constantly receive mind energy from the collective mind belt, process it through your own consciousness and transmit it back into the mind belt. Mind energy consists of thoughts and feelings. It is a definite energy, even though it is much more subtle than physical energies like light or electricity. Mind energy is conditioned and directed by human will. You can be affected by the collective mind belt or you can decide for yourself how you will react to life's events. Choose now whether you will be affected by every twist and turn in the game of life, or whether you will be one of the few who create the game. Independent thinkers are the trendsetters in the mind belt. The way you think affects every other human upon the planet. The way you feel affects every other human upon the planet. Because higher frequencies of thought and feeling have much more power than lower frequency ones, the unconditional love that you generate through your spiritual practices has a huge influence upon humanity. Choose the development of love through regular, dedicated spiritual practices and you will be changing the world. Make spiritual growth your number one priority in life. At the end of the day, it's the one thing that really counts.

Thank You for All the Laughs...

☼Sunshine☼ — Thu, 10 Jul 2008 14:57:52 GMT

I could not get on Tribe the day that Carlin died... But OMG, I love this guys humor..... so Cheers... and RIP... George Carlin on: 10 commandments http://youtube.com/watch?v=rCz0-HY1TLU&feature=related The American Dream http://youtube.com/watch?v=kJ4SSvVbhLw&feature=related On white people http://youtube.com/watch?v=Dcr8dm9Prkk&feature=related On Voting http://youtube.com/watch?v=0u6lCBnRoHQ&feature=related

Funk Yeah ....

☼Sunshine☼ — Thu, 10 Jul 2008 03:57:15 GMT

Getting Funky... http://www.youtube.com/watch?v=S3HanNpeK-Q&feature=related http://www.youtube.com/watch?v=vvPQQLIJDCY&feature=related Marcus Miller http://www.youtube.com/watch?v=JMSq__vg7Gs&feature=related p-bass funk Love Da FUnk.... PFunk & Bootsy http://www.youtube.com/watch?v=B_LRYezOfeo&feature=related Funkadelic ... Peas http://www.youtube.com/watch?v=msNgZ2nexC0&feature=related

The Economy ... Cali Housing... Once Upon a Time ....

☼Sunshine☼ — Mon, 07 Jul 2008 23:22:27 GMT

Unless you follow the housing market closely, you may think that not much in the housing market has changed. Yes, in January we already knew that the housing market was having problems but these last 6 months have added fuel to the flame. In January, the year over year drop for Southern California was 13.3% and the median price was $425,000. That may seem horrific and was a record but measure that with data 6 months later that now has the year over year drop at 26.7% and a median price of $370,000. The velocity of the drop intensified exponentially during this time frame. We can also measure this against national price changes with looking at the Case-Shiller data. In January when the data was released, the most recent data indicated the following: 20 City Composite November 2006: 204.65 November 2007: 188.98 Drop of: 7.6% Now fast forward to the most recent data: April of 2007: 200.53 April of 2008: 169.85 Drop of: 15.2% The Case-Shiller data trails the market by two months. That is, the data released in late June covers the market until April of 2008. The data released in late July will go up to May of 2008. This is something to remember because even data from other sources is 45 to 60 days behind because the nature of closing a sale on a home is not instantaneous. From signing a contract, getting financing, inspection, appraisal, and to closing escrow does take sometime. It’ll be interesting to see if we even get a tiny jump when the May and June data is reflected in the current data. If we are to look at preliminary data like mortgage applications and also contracts, the above trend is most likely to continue. The first half also witnessed interesting sales gimmicks like buy one get one free marketing ploys to entice buyers to jump into the market. The government during this time also engineered the first bailout for a Wall Street investment firm of Bear Stearns. It turns out that things were worse than they wanted us to believe. During this time we also saw the fascinating dance phenomenon take fire not on Dancing with the Stars but on the streets of America. People were learning the ease and flexibility of moonwalking away from your mortgage and responsibilities. Sometimes in life, you do get second chances and people realized that those on Wall Street shouldn’t have complete domain over speculation. Mary and John Doe realized that they too had some power in the market. The first half of 2008 was only the beginning of a year that is going to prove to be a major turning point in our nation’s history. Once upon a time, foreclosures actually made headlines in the media. Now, it seems like there is this major fixation on oil and everything else is taking a backseat. Well guess what? During this time foreclosures as you can see from the above chart are still moving up. What is even more telling is that this is occurring while all these various measures are being launched at Wall Street to prop the market up. So what is happening? Wall Street is getting charity while the American people (see above chart) are not getting the trickle down from this supposed support. The market is deteriorating and people are feeling the pinch while lenders and the government engineer lucrative bailouts. All you need to do is follow the data to realize that the façade being put up is to hide the corporate welfare being given to the purveyors of this once in a century bubble. Foreclosures should be the headline story since much of the leverage of this decade was based on expanding housing. The fact that foreclosures are rising on such an alarming pace is only a leading indicator that more firms will be doing further write-downs in the months ahead. In fact the $391 billion in write-downs may be peanuts when we examine the potential $1 trillion target that we are predicting conservatively. It must come as no surprise that prices are falling off a cliff both nationwide and in California. The reason California carries a lot of weight is that taken alone, California would be the world’s 8th largest economy. California is also the hub of the mortgage bubble. We earlier reported that prices in the golden state were off by 27 percent but have to update that since the C.A.R. recently came out saying the median price drop now stands at a stunning 35%! Given the $500 billion Option ARM implosion which will be one of the major stories in the second half, we can nearly predict the next few months. Nationwide prices are down 15.2% which is the steepest drop ever. Even worse than the drop during the Great Depression because of the speed in which prices are correcting. What once seemed a mere impossibility, the forecasts for nationwide drops of 20 to 30 percent almost seem like foregone conclusions. We should be seeing 20 percent this year and if prices accelerate, who really knows. These forecasts were for bottoms in 2009 and 2010 at least if we are to look at futures markets but a 35% drop in California in one year is even shocking bears like myself. The ferocity of the correction is stunning. And much of these price declines are because of the foreclosure onslaught. Last year, the struggle was that lenders simply did not want to lower prices. That stubbornness has led to massive amounts of inventory at a time when they should have aggressively pushed homes off their books. Now, REOs are flooding the market competing amongst each other at a time where the middle class American is being crushed by rising consumer costs and a gloomy job picture. Result? People are now more reluctant for big ticket purchases even if they qualified which many are not. In January, we reported that the Stimulation checks were going to be a waste of money and guess what? They were exactly that and put us into a bigger deficit: “(January 2008) Don’t you just love how they are calling this fiscal boondoggle a stimulus package? Since we are all about “stimulating the consumer” they will also throw in a few syringes with heroine, methamphetamines, and two Red Bulls for good measure. This way, consumers can load themselves up and spend for 48 hours straight shopping without even pausing for water or sustenance (I guess the government assumes your lifetime goal is to be on the perpetual Wal-Mart hamster spending wheel). I can imagine everyone running to their mailboxes eagerly reaching in with their hands, on a bright sunny spring day and pulling out a nice $600 on a Statue of Liberty watermark check. Thanks Paulson! Just got screwed on the AMT and Social Security but hey, who can argue with a nice watermarked check?” Well as it turns out, not paying attention to more important issues consumers were salivating to get their checks simply to offset the rise in consumer prices set off by the rise in energy. Not exactly the boost they were looking for. In fact, this put us further into debt putting more pressure on the dollar and also causing more inflationary pressure since more money went out competing for the same amount of goods. Unintended consequences folks! Now we are hearing more talk about a second round? Why not just send us all a $1 million and be done with it? What has now become the number one economic story, oil is another major change that occurred during the first half of the year. Prices have jumped from $92.95 to the stunning $145 price per barrel. That is over a 50% jump in 6 months and is simply putting everything into a tailspin. With this move, airlines are struggling for survival, the American automakers are gasping for air, and consumer prices are skyrocketing: How bad are things for the U.S. automakers? Toyota Motor Corporation has a market cap of $144 billion while GM now has a market cap of $5.7 billion. Toyota has a market cap 25 times larger than GM! That should tell you something about what is going on in the current scheme of things. They used to say, “As GM Goes, So Goes the Country” and if that mantra still holds true, we are in for some deep pain. I disagree with this mantra given that our country went from having a strong manufacturing base to becoming a service economy where we traded houses to one another and pushed archaic derivatives based on these houses to other investors. Basically we bet everything on the house and the house is collapsing. Amazingly on Thursday we had a horrible jobs report but the market did not react. For the first half of the year, nearly half a million jobs were lost and previous data from older months was revised upward. Apparently job losses aren’t so bad according to the assistant Treasury secretary: “(Washington Post) The assistant Treasury secretary for economic policy, Swagel came out for his monthly economic briefing yesterday, 90 minutes after the Labor Department reported that the country had shed jobs in June for the sixth straight month. Does this mean the economy is worse than the Bush administration expected? “We shouldn’t, in a sense, be surprised when the data are, are, soft,” Swagel managed to say. Does the economy need another stimulus package? “I-it seems, you know, it seems like that’s, that’s enough, uh, enough.” What might trigger another round of economic stimulus? “I don’t, I guess I don’t have an answer, I mean, you know, beyond saying we look at all the data and, um — so, my usual line.” Okay, so it wasn’t a strong performance. But let’s cut Swagel some slack. He’s a sharp economist (his PhD is from Harvard) and, in ordinary conversation, he suffers none of the speech difficulties that plagued him on the stage yesterday. His various roles in government, at the Council of Economic Advisers, the Federal Reserve and the International Monetary Fund, were too junior for him to deserve any blame for the current economic troubles.” This is actually becoming a comedy skit. How long can we keep telling Americans the economy is fine without being chased out of Washington with a revolution? I think what occurred on Thursday is indicative of what is going on in the nation overall. Exhaustion. People get that we are going in the wrong direction. Most understand the economy is bad. Like a bad movie, they simply want this thing to be over. But I have news for you. This won’t get better without you taking action. It can be something as small as choosing not to buy a home and playing into this lame game (which the government is going to try to entice with the new bailout plan giving buyers a one time tax deduction). It can also be voting out many of these idiots come November. It can also be you saving your money and not playing the consumption game which got us into this mess. Either way, there are things you can do. Yet it appears many are simply sticking their heads in the sand or zoning out in front of the tube. That will only get you more frustrated. As you can see, much has happened in the first six months of the year. The second half will prove to be just as tumultuous and volatile. We have the option ARM implosion, the Presidential Election, the summer Olympics, and many other unintended consequences from fiscal mismanagement. Hopefully the All-Stars of the second half make wiser choices. (Source: Dr housing bubble)

Spirit Freedom

☼Sunshine☼ — Fri, 04 Jul 2008 15:10:45 GMT

....that independence is your soul's natural state, and Freedom is another name for Spirit, OmniPresence. The Divine is that which is totally free, all the time. Nothing constricts It, nothing limits It, nothing stops It or prohibits It or denies It in any way. You and I are made of that same stuff. Our soul is nothing more than an Individuation of Divinity...and it is absolutely nothing less. Act as if you are divinely free today -- coz U R.

Glow ....

☼Sunshine☼ — Thu, 03 Jul 2008 14:47:27 GMT

Remember, this is what you are after. You are not concerned with outer appearances, only with your inner experience. Let the outer world be what it is. Create your inner world as you would have it be. This is what is meant by being in your world, but not of it. This is mastery in living. Neale Donald Walsch

Meet Your Muse

☼Sunshine☼ — Wed, 11 Jun 2008 14:08:16 GMT

(Repost From Jesselynn- See you There Girl...:) Come to the downtown Artwalk and then up for dancing and some more art! Performance by West Indian Girl Art by: Geza X, Spectr, "Yo, What Happened To Peace?", Catherine Andrews, Brion Topolski, Adam Tenanbaum, Hans Haveron, Charles Kang, Justin Delmer, Angelique and many many more!!! Come play with us! Check out flyer for the deets:

Stairway to Heaven ....The Ultimate in Human Potential

☼Sunshine☼ — Sun, 08 Jun 2008 16:28:02 GMT

There is a stairway to heaven. It leads through the heavenly realms of the afterlife and continues even further, all the way to the ultimate state of consciousness from which the universe sprang into existence. Infinite Being, the ultimate source of all things, created a universe of infinite diversity, of infinite parts of the whole. As humanity, we are the adventurers who projected ourselves into physical experience in order to bring deeper focus into our experience. Our purpose in the physical realm of consciousness is to gain a sharply-defined sense of identity and to grow from there. The long-term mission of each and every one of us is to gain expanded awareness through life’s experiences until we eventually return to the one God, no longer as curious seekers, but as self-realized, conscious gods. The steps of the stairway are formed by twelve layers of consciousness. Each step is composed of a different degree of compression of the original consciousness which created the universe. The higher steps are more ethereal, or less compressed, than the lower ones. The lower steps are more compressed, more sharply focused, and more clearly defined than the ones above. Every step along the stairway is composed of consciousness. Even the physical world, with its apparently physical objects, is really composed of 100% consciousness, projected in a way that appears to be external and solid. The Twelve Densities of Creation The Twelve Densities of Creation are divided into four groups of three densities. These four groups contain the material, spiritual, cosmic and divine density layers of existence. The Material Group of Densities The three most dense layers are the material group. These relate to basic physical existence. First Density – Matter First density consciousness is the realm of the atoms and molecules of physical matter as well as the basic sense of survival. This is the home density of the consciousness of the elements which form the basis of physical matter, including the physical bodies employed by plants, animals and humans. Second Density – Biology Second density supports the consciousness of plant and animal life as well as the urge to grow. Plant life, for example, reproduces and spreads until it reaches the limits provided by its environment. Second density is also the density of the basic emotions, such as anger and fear. Third Density – Individuality Third density is the current realm of existence for the combined consciousness of physical humanity. It is where the consciousness of individuality and self-awareness is developed. Humanity’s experience of separation from its inner source is a deliberate experiment whereby the illusion of physical existence becomes very real. The game of human physicality began long ago. As curious spirits, we progressed into a desire for maximum effect and then went on to discover how to create total immersion within the game. It is this total immersion within physicality which makes life on earth seem so real, so full of passion, so disconnected from our spiritual source and, yet, full of so much potential for self-discovery. The experience of humanity’s separation from its inner source is achieved through using a physical brain which focuses on the five senses. These senses feed information to the brain from a universe which appears to be external. Our brains are wired to perceive space and to experience time. The turning of our attention away from inner, spiritually-connected information provides a sharply-defined sense of individuality, one which would not have been possible were our brains designed differently. Third-density consciousness also supports other qualities for an evolving consciousness, such as the discovery of courage and optimism, and the development of intellect and reason. The Spiritual Group of Densities The next layers of density are the spiritual group. The gateway to spiritual consciousness is through the level of consciousness to which mankind is currently awakening – that of heart-centered consciousness. For humanity, this is where the adventure really begins! Fourth Density – Integration In fourth-density consciousness, the heart awakens to a natural unrestricted flow of unconditional love. In third-density consciousness, humans develop themes of separation from each other. In fourth density, they develop integration, or the healing of separation. Fourth density is where the spirit realm, or afterlife, is located. Here, people resolve and integrate the emotional experiences that they gained during their physical lives. When today’s massive Shift in consciousness has played through sufficiently, fourth density will also become the new location for physical human consciousness. In this density, the qualities of balance and unconditional love are developed, which lead to the development of inner joy. Fifth Density – Soul Consciousness Fifth density brings with it the ability to create powerful realities and to transcend space and time. Once spirits in the afterlife have integrated their emotions and resolved their conflicts, they can pass on into fifth density. Fifth density is a nonphysical realm of the soul, of the “higher self” or inner being. Your inner being is your complete consciousness, and therefore includes the subconscious and superconscious aspects of mind. Your inner being has a clear connection to the higher densities and to Infinite Being. Therefore, a clear connection to your inner being is your direct source of spiritual empowerment. Sixth Density – Group Souls While your immediate soul mates may number, typically, seven other souls, your soul family is much larger. It is closer to two thousand individuals, grouped together in a huge family of people with common likes and interests. You share a similar energetic background, history, and many preferences as to the kinds of experiences that you enjoy. These are the people with whom you share the most empathy. To your inner being, they are “Home.” Of the other members of your soul family, less than half will typically be in physical incarnation at any given time. Many will live in other countries and in other parts of your country. When you meet them, you recognize them as people whom you feel are special in some way. There is a resonance within your own consciousness that is quite different to how you would react to a total stranger. Sixth density is where fields of consciousness grow larger in preparation for an eventual quantum leap into the cosmic scale of seventh-density existence. Although a soul family is comprised of many individuals, it is also a large field of consciousness within its own right. Other examples of sixth-density consciousness include angels, saints, world teachers, and members of the Association of Light. It is also the source of the light of the universal Spirit, which can be contacted during deep meditation. Sixth density is home to some of the greatest souls who have ever graced the earth with their presence. The field of consciousness of a world spiritual teacher, for example, is enormous in comparison to the field of consciousness of one typical human. It is because of this great capacity of consciousness, along with their ability to divide their attention into many parts at one time, which allows world teachers to service the needs of all those who call upon them in their times of need. The Association of Light consists of many thousands of spiritual beings who, having mastered cosmic consciousness, then passed through the initiation of ascension. Their function today is to balance the energy of humanity. By attracting, conditioning and transmitting spiritual light into the world, they hold the balance of light for humanity so that we may continue our experience upon earth, uninterrupted by what would otherwise be the automatic, karmic reflections of the worst of humanity's actions. Their example of giving service by attracting, conditioning and transmitting spiritual light into the world is one which we will all grow to follow as we develop spiritually. The Cosmic Group of Densities When the ladder of human evolution has been climbed to its ultimate, spiritual heights, there is only one place to go next in the grand scheme of Creation. That next step is to become a part of the intelligence of a planetary being. Seventh Density – Planetary Consciousness There is much more to Gaia, the planet Earth, than meets the eye. Seventh density is home to planet-size fields of consciousness. In the physical realm, she provides a home for humanity. Her spiritual heart, however, resides in this nonphysical, seventh-density realm of spiritual light. It is not by chance that seventh density is where cosmic consciousness occurs. This is the first density layer devoted to the cosmic scale of consciousness. A human being can visit seventh density during a period of cosmic consciousness, but they cannot reside there permanently, as it is designed to be a realm which is home to fields of planet-sized consciousness. Eighth Density – Solar Consciousness The spiritual heart of the Sun is in eighth-density consciousness. What we see in third density is its physical body, which is a faint reflection of its eighth-density, spiritual radiance. An insight into the true scale of the magnetic body of the Sun can be gained from the heliosphere. This is a magnetized sphere of energy which stretches, from the Sun, four times further than the outermost planet of Pluto in every direction. That’s a 22 billion mile-wide magnetic body which contains, sustains and cares for the planets and all life forms within its sphere. As well as living within its third-density heliosphere, we are connected, at the eighth-density level of consciousness, with the spiritual being we call the Sun. You cannot be born within its sphere without first becoming a part of it energetically. We are, as stated correctly by ancient cultures, Children of the Sun. Likewise, before you were first physically born on earth, your soul passed through an initiation of birth through the holy flame of the Logos of the Mother Earth. On a cosmic scale of consciousness, she is your spiritual mother, just as the Sun is your spiritual father. In the grand scheme of Creation, the Earth contains the closest consciousness to God within your reach, and the Sun contains the closest consciousness to God within your sight. Sending your love and gratitude to the Sun and the Earth not only makes perfect sense, it is the oldest spiritual practice on earth, and one of the most potent. Ninth Density – The Galaxies and their Central Suns A galaxy is a living cell within the consciousness of the universe. Like the Sun, which later gave birth to its planets, each galaxy gave birth to the suns within its massive body. Although the central sun of each galaxy distributes the energy of consciousness from above to the manifest universe, the central suns do not radiate physical light and are therefore invisible to the human eye. (The photograph above shows a cluster of stars gathered near the center of that galaxy, not a central sun.) To appreciate the scale of Creation, radio astronomy has given us some idea of the total count of galaxies in existence. Currently, there are believed to be between 100 and 125 billion galaxies in existence in the universe. The Divine Group of Densities Here we have a reflection of the creative triad of the consciousness of the original Infinite Being inserted into its own Creation. First, there was Infinite Being as perfect, unchanging consciousness. Second, Infinite Being entered an active mode by dividing itself into the three creative aspects of thought, feeling and motion or manifestation. This active expression of Infinite Being then created the twelve-density structure of the universe within its own consciousness. Third, Infinite Being inserted itself into its own Creation. In order to create the fine detail and to manage all of Creation, it inserted its creative aspects into the Divine Group of Densities. Density twelve became the home of the Founders, density eleven became the home of the Watchers, and density ten became the home of the divine manifestation which would become the energetic hub of the manifest universe. Once established within these higher densities, the consciousness of Infinite Being began to immerse itself deeper within each layer of consciousness, creating the galaxies, the solar systems, the planets and finally the biospheres and the life forms which can inhabit them. Humanity is one of the latest developments in this exploration into self-awareness because humanity, like the Creator, is endowed with the quality of self-awareness. Through humanity, the Creator can observe itself from deep within the complexity of its own creation Tenth Density – The Central Sun of the Universe This is the manifestation of the original stage of the Creation. It is the expression of divine consciousness as the energetic hub of the created universe. Like the central suns of the galaxies, this source of all life in the universe is unmanifest in the physical realm. Eleventh Density – The Watchers These are the guardians of all of Creation. The Watchers, or Lords of Karma, ceaselessly observe and adjust the universe to keep it in perfect balance in accordance with the all-pervasive law of action and reaction. The function of the Watchers is to protect all life in the universe. When necessary, they immerse themselves into the deeper densities in order to manage details or to initiate new projects within the universe. One such project has been ours: The creation of human consciousness and its gradual immersion into deeper, and therefore more sharply-focused, layers of density. Twelfth Density – The Founders The Founders of life in the universe, the Lords of Creation, exist within the highest density layer of the universe. It is from here that consciousness is loaded with energetic potential and cascades throughout all densities within Creation, distributing its potential as needed within each density along the way. This cascade of the energy of consciousness passes through the Central Sun of the universe, then to the solar systems via the central suns of the galaxies. As it reaches the lower densities, it is also transformed into the energies that are required to maintain the existence of physical and etheric matter. As etheric energy, it sustains physical life and maintains the orbits of the planets and the electric particles within each atom. Like all layers of consciousness, we are directly connected to the Watchers. They are part of the spiritual lineage which connects us to the ultimate state from which we all came, that of Infinite Being. In third-density physical existence, karma is often perceived as a negative because it reflects every thought and action, including fear and hate. However, it is simply a law of natural, perfect balance as it guarantees that all thoughts and actions are reflected. In physics, it is stated as the law, “Action and reaction are opposite and equal.” It is neither positive nor negative. It provides a neutral reflection of who you are now. When a person moves from material consciousness into heart-centered consciousness, it may appear that their old karmic pattern has ended. It has. In its place is a reflection of the new person and their unconditional love for all. As an eleventh-density law, however, karma never ceases to exist. This property of reflectance is interwoven in the fabric of the living universe. Beyond the Twelfth - Infinite Being Infinite Being is the indivisible One, the origin of All That Is. The twelve densities of this universe are held within its consciousness. The Ultimate in Human Potential As the one Creator immersed itself into the deeper layers of its own Creation, it progressively expanded the possibilities for exploration. Today, as expressions of Infinite Being, we function as self-aware humans, operating under unique conditions in this grand adventure called life. As we gain human experience and progressively increase our awareness, we become spiritual humans. Then we become ascended humans and, eventually, we rejoin the larger, cosmic scheme of things on our path back to the original source from which we came. Energetically, we exist, not just in third density, but on all density levels of Creation. We are one with Infinite Being in its ultimate state and we are connected to all of its levels of manifestation. While the One Creator is the original creative power, we are also endowed with the ability to create our reality as a living reflection of our thoughts, our beliefs, and our view of life and its possibilities. Within us, we have unlimited potential to create lives which are full of joy, purpose and meaning. Within your life, you can choose any path that you determine, and, once you set an intention, a pathway opens up for you to fulfill that intention. As soon as you make a definite intention as to your new reality, the universe begins to reorganize itself around that new reality. Now, to amplify that power of creativity to almost miraculous levels, consciously align yourself with your inner being and determine what is most important to you at that deepest level. Your fifth-density inner being is your soul level of consciousness. It is your own personal doorway to a full connection to Infinite Being. When you re-affirm your connection with your inner being, you are connecting to the very level of consciousness which has the most creative power. In aligning with your inner self, you can fulfill any potential that you can imagine and become a living expression of your desired path through life. Your conscious alignment with such inner creative power will make synchronicity flow. It will open doorways along the way and dissolve barriers, making your pathway smooth and natural. Your inner self is your personal connection to Infinite Being and it is the source of your spiritual empowerment. State consciously that you intend to work with the full range of your own consciousness and then watch miracles unfold within your life! http://www.infinitebeing.com/0609/stairway.htm

Great Films ...

☼Sunshine☼ — Thu, 05 Jun 2008 15:57:40 GMT

There were some really great films shown at Pangea Day. If you missed any, you can view them here: http://www.pangeaday.org/pangeadayFilms.php ~*InJoY*~ PS: This Sat. in Venice - Carnivale.....

Project Peace On Earth ... has begun

☼Sunshine☼ — Thu, 29 May 2008 18:47:43 GMT

Imagine a six-hour globally telecast Musical Prayer with Superstar Musicians perfoming thier most Sacred Music from the world's most mystical sites; Mount Shasta, The Great Pyramids, Stonehenge, Mount Fiji, Machu Picchu, Chicken Itza ... a unifying musical message of love for one another.... This epic Musical Prayer is scheduled for Sept. 2009. Project-Peace on Earth represents a daring idea to transform global consciousness, systematically end hunger and related diseases, empower those in extreme poverty, and provide for food, clothing, shelter, safety and education for tens of millions of children worldwide. Catch the Peace bus in Your neighborhood .... Wooooot..........Wooooooootttttttttttttttttt>>>:) http://www.project-peaceonearth.org/

Whispers

☼Sunshine☼ — Thu, 29 May 2008 18:26:55 GMT

Self-blisscipline is when your conscience tells you to do something and you don't talk back. Sunshine

Florida Governor Signs Autism Bill into Law

☼Sunshine☼ — Wed, 21 May 2008 16:40:48 GMT

http://www.wctv.tv/news/headlines/19125659.html WoooooooooHoooooooooooooo this is a great victory for the parents. Florida Governor Charlie Crist signed historic legislation Tuesday, guaranteeing insurance coverage for autism therapy for very young children. The therapy is deigned to mainstream children with the disorder and has been a topic talked about quite frequently by former Miami Dolphin quarterback Dan Marino-- whose son also has autism. For more than a decade -- Marino has been fighting to help other kids-- saying they deserve the same therapy he was able to afford for his son. "He’s in college, doing well. He is a direct result of early intervention. He is a direct result of occupational therapies, speech therapies, things you need to do at an early age starting at two years old, maybe younger. Just think about that, he got all those opportunities and I think that’s why he’s where he’s at today,” Marino says. The insurance coverage is limited to 36-thousand dollars a year with a 200-thousand dollar maximum benefit.

Banana Republic Loans Are Back ....

☼Sunshine☼ — Tue, 20 May 2008 01:02:40 GMT

You are going to need to sit down for this one. If you have any heart conditions you may want to stop reading at this point. Many of you recall that Fannie Mae and Freddie Mac had their caps raised in January during the great Wal-Mart voucher experiment. It was sneaked into the “stimulus” package set forth and most of the attention was diverted to the fact that you now were going to receive enough to fill up your car for one month. At this time, many pundits and bloggers thought this was much to do about nothing. I saw this as a slippery slope that would only allow the government to further push their experiment in ruining the financial balance sheet of America. Many that first saw the bill thought that there were sufficient guidelines in place and raising caps to $729,750 was simply a way to inject liquidity into the market; plus the ultimate stop would be the verification of incomes and also a down payment. Well now that is out the window and the government sponsored entities are following the fantastic model developed by Countrywide and New Century Financial: May 18, 2008 - Washington Post “The gears of the mortgage market are starting to unlock for borrowers needing big loans. In expensive markets such as Washington, that covers most people looking to refinance or move up from an entry-level home. Just in the past two weeks, interest rates on the new “conforming jumbo” mortgages — for amounts between $417,000 and $729,750 — have come down enough to make a difference to borrowers. And mortgages allowing down payments of just 3 to 5 percent are coming back to the market for borrowers who have good credit. “The bottom line is rates are lower than they were,” said Kevin Connelly, a vice president at BB&T. Last week, for example, BB&T was offering 30-year, fixed-rate mortgages for a conforming loan, which is for $417,000 or less, at 6 percent interest with no points, a type of prepaid interest. A conforming jumbo cost only one-quarter of a percentage point more, 6.25 percent. Loans for amounts beyond $729,750, now called “jumbo jumbo” loans, were at 7.25 percent.” First, could it be that borrowers need super jumbo mortgages because we are still in a housing bubble? You would think that folks would have learned their lesson after being hit in the face with a subprime 2 x 4 but leave it to our government to go ahead and compound the stupidity. The market in California for example is adjusting because that is what happens when markets correct after a gluttonous decade long bubble! Somehow, the market forces are working and the government wants to prop up a bubble through corporate welfare - the same people who wanted the government out of their hair when the bubble was roaring like a caged in tiger. Keep in mind that the new caps were implemented in March yet they weren’t doing a damn thing because folks simply do not have down payments (10% in California can still be $50,000 to $70,000 for a so-called starter home); so now Freddie and Fannie are taking a play out of Countrywide; lower down payments and also take lower credit scores: “Other good news for borrowers: Fannie Mae is removing its demand for higher down payments in areas it considers “declining markets,” which includes most of the Washington area. Beginning June 1, Fannie will again accept mortgages with as little as 3 percent down. In December, Fannie and Freddie started to require an extra 5 percent down in areas where it had determined that home prices were falling. The policy applied even to neighborhoods where prices have been stable or increasing slightly.” Bwahahaha! Fannie and Freddie are now going to be subprime or maybe we should call them jumboprime (JP) - not to be confused with Optimus Prime from Transformers. Just wait until you see what they consider to be stellar credit. In what is now becoming a bigger and bigger joke where financially responsible folks are the butt of ridicule, they are going to remove the safe guards of giving money to folks in declining markets without them putting more skin in the game. Forget about the fact that the markets are declining because folks went into the housing game with no skin and lower standards to begin with! We are living in a Twilight Zone episode in which the “solution” to our problem is the problem. This is utterly stupid and virtually guarantees a taxpayer bailout whether we want it or not: “FHA has really, really been taking off,” said Jim Foley, senior vice president of George Mason Mortgage’s Bethesda branch. “You can have a lower FICO [credit] score; 620 and above is what they’re looking for.” In December, Fannie and Freddie started to require an extra 5 percent down in areas where it had determined that home prices were falling. The policy applied even to neighborhoods where prices have been stable or increasing slightly. Officials at Freddie Mac announced that loans with 5 percent down or less can still be made in declining markets if the loan is for a single-family home that is the borrower’s main residence, and the borrower has good credit. It must not be a cash-out refinance. Fannie and Freddie, government-chartered corporations that purchase mortgages and repackage them for sale to bond investors, cover a huge portion of the mortgage market, and so their standards influence the whole industry.” I am almost speechless at this utter incompetence. It was a smart move to require higher down payments for distressed areas which was a move in the right direction. This will mitigate what we are now learning to be a cause of people walking away from their homes; negative equity is a major reason for being at risk for foreclosure or being tempted to walkaway. Instead of keeping this good practice in place, Fannie and Freddie took some advice which looks pretty similar to this: “NEW YORK, Dec 5 (Reuters) - Countrywide Financial Corp’s (CFC.N: Quote, Profile , Research) chief executive called on the U.S. Congress to temporarily raise the maximum size of mortgages that Fannie Mae (FNM.N: Quote, Profile , Research), Freddie Mac (FRE.N: Quote, Profile , Research) and the Federal Housing Administration may buy or insure by 50 percent to $625,000. In an opinion piece in the Wall Street Journal on Wednesday, Chief Executive Angelo Mozilo, whose company is the largest U.S. mortgage lender, said the increase from $417,000 should be implemented for up to a year. He said this would go a long way toward alleviating a nationwide housing crunch, which analysts expect to pinch borrowers and lenders throughout 2008 and probably beyond. “It should be enacted as part of a broader package of reforms to ensure that these linchpins of our mortgage system can aggressively support the housing market in a time of need, and that the appropriate controls and oversight are in place to protect taxpayers,” Mozilo wrote. Well so much for that oversight. I guess Fannie and Freddie think that Mozilo is a bit too stringent on his lending standards. I’ve received a few e-mails from readers saying that this bailout talk is recent. It is not. Given the utter financial illiteracy of our leaders it wasn’t hard to see where they would want to steer this ship. For some reason back in March of 2007 I feared that there would be a massive bailout where the government instead of taking its medicine would step in to fill the void of the subprime mortgage market: March 27, 2007 The Chatter Begins “If anything, I’m glad a few politicians are shedding light on this monstrous train that is barreling down to main street USA. But when the talk shifts to bailing folks out that is where I put my foot down. In addition the connotation of all this chatter is that somehow we’ve seen the worst of the subprime implosion. Need I remind folks that the first week in March 2007 was when we had the subprime meltdown spread into Wall Street? Didn’t hear too much complaining in 2004, 2005, or 2006 when even a 102 year old man was able to get a 25 year mortgage. Maybe he can refinance when he is 120 into a 50 year mortgage. This credit bubble epidemic is global and as such will have far reaching ramifications.” The frustration of this is California by far is the most egregious offender in terms of mortgage amount of any state in this entire country. The jumbo caps hogwash was a ploy to bailout the state that was the nucleus of the subprime fiasco. Even Mozilo saw this as the only way the state would stop from going into a major correction: December 8th, 2007 Hope Now Alliance “You can see that it is much too early to determine how this thing will go. Will people in foreclosure that don’t qualify for this plan call for equality? Why should they be punished because they didn’t fall within the given timeline of the current proposal? What about prime borrowers that are underwater? Why shouldn’t they be able to freeze their rates as well? Again these are philosophical questions more than economic but I assure you they will come up in the coming years. Even though this isn’t a bailout per se, it does open the door slightly for more government meddling. We already know that Paulson said this isn’t a “Federal bailout” but the wording giving tax-exempt status to states should be watched. Another major thing that would be a bailout is what Angelo Mozilo, CEO of Countrywide mortgage is pushing. He is calling for caps to be raised to $625,000 so the FHA, Freddie Mac, and Fannie Mae can purchase larger mortgages. Mozilo had actually called for raises of as much as $850,000. Since Countrywide and WaMu have nearly 45 to 50 percent of their mortgages in California, I wonder why he is pushing this so hard?” If the Countrywide model was doomed to fail, why is it that Fannie and Freddie are following in the footsteps with advice from Mozilo? And let us not kid ourselves, many of those that consider themselves “prime” are one paycheck away from trouble. That is why even the simplicity of raising caps and requiring folks to have a modest 10 percent did nothing for California. So now, they are going to push it down to 3 percent and we are back at square one. No one has been punished and we have a litany of cases of flat out rampant fraud in the industry; do you think some of these hucksters won’t get back into the game? So we now have the Federal Reserve accepting crappy loans in exchange for U.S. Treasuries and we will now have Fannie and Freddie ripping loose and pushing the limit with the no money down party just in time for the summer selling season. And make no mistake about this, this is no money down. You can get 3 percent from your credit card and you’ve effectively gone zero down. Welcome to our financially irresponsible government. And you want to trust these yahoos with a $300 billion bailout?