Wish I Could Smile

I'm not smiling at the prospect that the Stock Market is up for the third day in a row. I should be grinning ear to ear as the Fed comes marching down the road with more rate cuts all designed to stop the runaway train. I have been told many times over the years that the Federal Reserve and other government agencies all had systems in place to keep us all out of harms way. Recession, yes we could have those, but never again anything as serious as the Great Depression.
I can't smile because I don't believe the talking heads when they say there is only a "correction" about to take place. There is a little dark humor in it all, as you notice "correction, recession, depression," all seem to rhyme. I used to think maybe the powers to be were right, until it was revealed there really is no money in the Social Security fund. We always knew there wouldn't be any for us when we got there anyway.
The problem as I see it, is we've never been immersed in a World Economy to the degree that we are today. I know that our own good old ingenuity might not be enough to save us. I have written before about the derivitive market and the investment's that they were a part of. I wrote yesterday that Greed was a big player in the subprime mess but one must also add leverage as a willing partner to this loan implosion debacle. Asking one dollar to support fifteen, is like asking three workers to support fifteen social security recipients. How is that going to work?
The first Boomer is elligible to draw their social security a little over a month from now. Bankers and credit markets will eventually be forced to reveal the truth in February and March 2008 when the fourth quarter figures come out. Do you think those numbers will be good? Those numbers will come at a time when the greatest amount of subprime loans will be scheduled to reset for next year. Do you think the price per barrel of oil will be down by then? Hope it doesn't get too cold up north this winter.
I should be smiling though because the early numbers for the holiday season are out and the stats are good. Merchants are allegedly happy, but did they spend more than usual? I didn't hear those numbers did you? The reason for this article is to warn you that the numbers are not good. The numbers will get worse. There is still time for you though to protect yourself and make the financial moves you need to make. We are only at the start of the game in the great unraveling mess yet to come.
The Fed will do it's best in reducing rates to prop us up. I feel it will be of little use. Can anyone say "JAPAN." If you are in a great job with good security, buy now. Use Government financing, because soon that will be your only option. If you get out there and warn your friends and family, and I can warn my friends and family, I will SMILE.

Now What?

As we enter the holiday season of 2007 the news on the mortgage front is
being portrayed as grim and grimmer. The projections for 2008 are
starting to come out and the realization is beginning to set in that tougher
days in the mortgage world will be with us for awhile. No worries for you
though, as you are a reader here. The information that you get here will help
you navigate through the troubled waters ahead.

You need to know that in 2008 there are still over 300 Billion dollars in
mortgage loans that are due to reset. There are people out there trying
to place blame for the mortgage mess situation that is at hand.
Second thing you need to know is that it isn't as serious as the media
would have you believe. Greed is the reason for the situation in the
sub-prime mortgage business. It is a complicated mess to be sure,
with terms like " CDO'S", "DERIVITAVES" and other complicated things
that involved business on Wall Street. To make it short and sweet
kid's weren't playing nice on the "street." Some of those kid's
shouldn't have been playing in the same sandbox.

If you would believe the media, you would think that much of the blame
lies at the feet of Wall Street. The stock market is a big deal to be sure, but not nearly as big a
deal as the credit markets. As is usually the case, deals were made,
expectations were raised, then along comes the Fed, makes some moves
that aren't expected, "not in the script" so to speak, and thing's begin
to come apart.

Reminds me of several things. Foxes watching the chickens? Does the
name Enron come to mind? I'm guessing a Congressional investigation isn't far away.

I'm saying that all of that is good for you. I also say that the mortgage
business is healthy. The entire lending industry is not on the verge of collapse,
not even close.

The kids that played with matches, got burned. The lending rules will
change, but they always change. New rule will appear. Old rules will return,
policies and programs will change. All you need to do is learn what the
changes are and prepare your plan accordingly. If you are not prepared,
get prepared.

The best friend you can have, my opinion, is a mortgage professional. A
mortgage broker is vital to the process, a good one, not a bad one.
Have them thoroughly checked out.
The great thing about the internet, is it gives you an edge in verifying
information. Check out what they tell you. Make sure it's straight up.
We provide additional info in a great little ebook that we've just finished
called "Surviving the Mortgage Massacre of 2007." It's available at
http://shop.tampabaycreditdoctor.com

Is It Real or just Hype?

The word is out and the pundits have been pounding you for month's. If you have been paying the slighest bit of attention, then you've heard the mortgage business is dead in the water. It is not true my friend! Have some players in the mortgage industry gone out of business? You bet they have. Has the mortgage industry toppled over as a result? Hardly!It all comes down to greed. Always has, always will. It always comes down to affordibility. I guess another way to say it, is it all comes down to cash! Money! Moola! Dinero! King of the Mountain! Mounds of cash, piled as high as the sky! I think you catch my drift. We didn't get to where we are over night. Where are we anyway? There are those out there that say this "sub-prime meltdown" will throw us into the biggest financial fiasco of all time. The year 2005 will be remembered as the year when the "grim reaper of housing " first appeared on the scene. Did anyone notice? I think not. The builders, speculators, flippers, and other "players" were way too busy stuffing their pockets with cash, to even see him.The "players" failed to sense the faucet would soon be turned off. It happened over night. Not everywhere. The biggest downturns came where most of the hottest markets had been. Double digit appreciation became a memory. Everyone was affected and will be for years. There is no reason to worry though, as the playing field is still there. The people that turned real estate into a shell game are gone.I like to refer to this downturn in housing as the "crash of cash." Is there a downturn? If you are a seller, yes you think there is. If you are a buyer, you see no downturn, you see a leveling of the playing field. It all comes down to physics my friend. You know that age old adage " for every action there is a reaction."The market will always dictate the price a commodity will be bought or sold for. When the price of a house gets to where the buyer can afford it, a sale will happen, a mortgage will be made. It will be made to a buyer that is able to obtain it by good standards in place. As for the builders, speculators, investors, and others, many fell off the Merry Go Round. You see, we really did learn all we need to know in kindergarten.