Wrecking Ball BHO

"Obama goes out to Elkhart, Indiana, and tries to bask in the glory of this phantom recovery that does not exist and has not existed, goes out, tries to claim credit for all this great economic activity, saying things like things are better now [by nearly every statistical measure] than when he took office."

Nothing could be further from the truth, as noted by the dismal economic numbers released Friday. Forget the fiction peddled about a recovery, these statistics warn of potential depression. Wake up America!



The Cold and Bad Economic News--Rush Limbaugh

Twisted Tales

I did not know whether to laugh or cry.

That was my reaction to the following headline of a post by Tyler Durden over at ZeroHedge.com:

"With 1 In 3 Homes Unaffordable, Freddie Mac Prepares To Enter The Trailer Home Loan Market"

After fighting through the propaganda presented daily by the Obama administration and their media partners, it is quite obvious that the issues surrounding this headline are illustrative of an anemic and fragile economy, with our country teetering on economic peril few can currently visualize.

With all the failed stimulus, which I was against, we literally have nothing to show for it.  The economy "grew" an a paltry 0.01 percent last quarter, and it culprit is not the much discussed weather.  The culprit remains increasing taxation and regulation, and Obamacare, the biggest job killer we have witnessed in many a moon.

With over 90 million potentially fully employed workers out of work and the lowest labor participation rate since the economically dismal Carter administration, job growth is practically extinct and the annual after tax income for the average worker has decreased approximately 10% since the financial crisis of 2009.

Therefore, although housing prices have significantly retreated, due to a bludgeoned job market, as reported by Zillow, a third of the homes for sale are unaffordable to the average household. In addition, due to Dodd Frank and increased lending requirements, there is increasing difficulty in obtaining financing. 

Housing purchases have been happening over the past year, which have potentially inflated values.
However, it has not been the young family moving up from apartments or starter homes accounting for the sales; it has been Wall Street Hedge Funds and public and private real estate asset management firms, who have been making purchases to rent back to the increasing number of potential buyers unable to make purchases.

It is noted that in recent months these firms have significantly backed off their number of purchases.

Mark Hanson is a top notch real estate analyst, and he recently presented the following chart indicating cash purchases, which were a stunning 63% of residential properties sold in Florida in December:

Mark Hanson/MHanson.com

As the FED seemingly prepares to end qualitative easing, interest rates, which have been been held down and are not a true reflection of the market where economic equilibrium would be measured, without continued FED intervention, are sure to increase.  With the employment landscape stagnant as best, the purchasing of home will become increasingly unaffordable.

Seemingly in anticipation of the negative environment for housing created by the government and their partners, GSE Freddie Mac is now set to begin financing manufactured-housing communities.

Make no mistake, increased financing opportunities are always welcome, although the government should not be involved, as the private sector should be the marketplace for mortgage lending.

But, with this action, is there a story behind the story?

Manufactured housing is typically utilized by lower income families and acreage owners in rural communities.  Are stick built homes to become increasing unaffordable, forcing middle class owners to back step and unitize manufactured housing?

Keep in mind as well, that potentially increasing regulatory actions by the EPA, under the Agenda 21 guidelines, may make transactions on older existing homes much more costly for all involved through having the subject improvement meet EPA guidelines with respect to energy efficiency of appliances, windows, roof cover,etc. before qualifying for financing from GSE's or money center banks the government has interests in.

As a real estate investor, I have not included manufactured housing in my portfolio, primarily due to limited economic life of the improvement in comparison to stick built improvements.  Be advised I am not the only investor aware of this. 

Thanks to the Obama administration and their anti-capitalist policies, the economic conditions in the country are horrendous.  Reminiscent of the climate in the Great Depression, if you are fortunate to have good, stable employment, it has been your neighbor who has been laid off who cannot find adequate employment who is really feeling the brunt of the poor economy.

With employment stagnant at best, and the true future effects of Obamacare unable to be adequately forecasted, the job market remains facing unnecessary head winds with are keeping our economy from reaching high efficiency.

Perhaps Freddie Mac knows something most of you don't, and is looking for another investment opportunity?   The weather is unpredictable; don't get the tales twisted.

Find Light As Darkness Approaches

An honest broker. Our country has a great example of this in George Washington, the Indispensable Man. Honesty is vitally important as a virtue, but it is equally important in commerce, by individuals, corporations and market makers adhering to contract law.

When contracts are broken, it throws mistrust and uncertainty into the marketplace, creating chaos. Regrettably, the Obama administration, in their efforts to transform this divinely inspired nation, altered the rules of contract law right out of the gate upon taking office in the form of shortchanging the automaker bond holders during the auto bailout. And don't get me started on the sun-setting of the famed Pontiac brand of General Motors!!

While Congress has become seemingly irrelevant and scandals are mounting while the media cheers on the socialist agenda, the stock market, although having ups and downs, is higher than it was in the aftermath of the 2008 crash. With a 9%+ unemployment rate, small business getting clobbered, taxes and regulations increasing, restricted credit and market uncertainty, one has to wonder how the market remains so high.

During the Great Depression, folks with jobs made out fair to midland, but it was those on the outside looking in who suffered the most. Unlike that period, the FED has injected massive levels of cash into the system, and when coupled with governmental stimulus, corporations and unions on the inside have been able to maintain profitable revenue levels. But it is not real, for when the cash influx is removed, the true levels of markets will be identified, and those levels are far lower than present closing ranges.

Not only are the current market levels manufactured, but economic measures of employment, inflation and debt are fabricated. In addition, in part due to the crony capitalism, investors are uncertain of false market indicators, significantly increasing the risk associated with capital investment.

And then, there is the rule of law. The collapse of trading firm MF Global, whose CEO was former New Jersey Democrat Governor Jon Corzine, has lead federal investigators to uncover that the company seems to be missing about 1.2 billion on customer accounts. A Congressional Panel is seeking to question Corzine, who if the allegations prove true, should take up long term residency in the gray bar hotel. Although while Governor Corzine blew a huge hole in the wallet of New Jersey, few think he is dumb enough to get himself in this situation, which leads some to think this is an orchestrated hit.

One could think another Wall Street firm blowing up has little impact on the average American, but this well may. Much of the investor money is currently stuck as investigators sort through the wreckage, but investors may only get back about 40% of their potions and they are far from happy. While this is most unfortunate, far more significant issues concerning the lack of trust in the commodities market, where MF Global provided the market to hedge futures contracts, and the contagion to follow, could severely impact our capital markets.

Investors have signaled the lack of trust in the market, perhaps highlighted in a letter by Ann Barnhardt, a cattle commodities broker, who due to the lack of trust in the market place and an "abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies", ceased operations of her firm, Barnhardt Capital Management. Please read the letter that she wrote, as Barnhardt speaks a truth you are unaware of and need to be up to speed on.

Investors Business Daily does not care much for Corzine, and neither do I, but there is a much more serious problem brewing here. Trust in the capital markets is essential for investors, and without that you have inefficient markets at best. With the DOW artificially pumped, many thought the commodities markets were where realistic evaluations could be identified.

Not anymore. Perhaps this leads to a market crash, or maybe it is just another in a long line of birth pangs we have been having. If the allegations of malfeasance are true and investors are not made reasonably whole due to the theft by this firm and it's principals, most notably Obama crony Corzine, these folks need to become instant jailbirds.

If they don't, and the rule of law remains absent, the birth pangs will quickly turn into a contraction and the official birth of utter chaos in the US financial markets, something many contend is orchestrated from within the White House, will emerge. Serious as that is and factoring in the EURO fix that won't work, the FED is war gaming worst case scenarios with new stress test of our major banks forecasting potential unemployment levels of 13% and a DOW at 5600.

Reality is a mirage under this administration, and your investment dollars must be protected. As Ms. Barnhardt accurately pontificated, investment is most vulnerable under the socialist and evil regime running our country at present, and hopefully November 2012 will intercept us from the generations of darkness Ronald Reagan warned us about.

Pray we make it that far!

The Great Stock Market Crash

80 years ago today, on the corner of Wall and Broad, the euphoria of a bloated stock market came crashing down as panic selling hit the market as the bubble burst. The day is known as Black Tuesday, and it became a catalyst for the Great Depression.

We are currently living an example of how devasting these events can be. Please review a portion of this PBS documentary:


What to take from this? They don't give away money on Wall Street, as there is no free lunch!

Fearing Rhetoric Damages Economy

The Chameleon otherwise known as President Barack Obama has recently been compared to the likes of Franklin Delano Roosevelt, John F. Kennedy, Abraham Lincoln and Ronald Reagan. I think he is an empty suit, but many Americans think he already is the best President we have ever had.

I do find Obama excels at presenting a soaring rhetoric that many of our intellectually challenged electorate find quite compelling. The constant negative drumbeat of the current economic state of our country is one such example. Most Americans appreciate some honesty in this regard, but Obama is either engaging in a form of fear mongering or has a incorrect command of the facts. Please take a listen to an interview by FOX News Business Chief Neil Cavuto with Brad Schiller, professor at the University of Nevada-Reno:



The current economic climate in America is full of many very serious economic challenges, and the point here is not to downplay them. As a real estate professional, I am likely being impacted more than most Americans.

But as Professor Mark Perry of the University of Michigan-Flint points out of his top notch blog CARPE DIEM, the real story of the comparisons of today and The Great Depression are quite exaggerated. In fact, comparisons to the 1980's fall quite short. Take a view of one of Professor Perry's charts.

America elected an inexperienced individual strong in rhetoric and short in economic theory and the role those in official positions play in influencing the markets. For example, who will be making large investments (you are hopeful the housing crisis will correct are you not?) with the forecast being presented by our President is bleak, so bleak that it erroneously extends the facts to promote fear.

I think it is time for Obama to speak frankly with America or keep his mouth shut. Should he choose to speak frankly, a command of the facts rather than fear mongering to help gather support for the passage of politically infected "emergency" stimulus package would be welcomed.

Then again, by the cheering crowds at Obama's speech signing the package, I wonder if the majority of Americans care? Furthermore, I wonder if they have the intellectual fortitude to realize what they are cheering about? I am not cheering and you should not be either.

I am now thirsty, so I think I will go mix up some cherry Kool-Aid.

Country First

I wanted to have a chance to talk to you, because, obviously, there's a moment of great uncertainty in America. As I mentioned at the rally today, the era of greed and irresponsibility on Wall Street and in Washington has led us to a financial crisis as serious as any we have faced since the Great Depression. And there's much blame to go around for causing this crisis. But we're now here. Every American has a stake in solving this crisis and saving our financial system from collapse, because, if we don't act soon, then people's jobs, people's savings, the economic security of millions of Americans will be put at risk. So, the clock is ticking. We have to act swiftly, but we have to -- we have to also get it right. And that means everyone.---Barack Obama, D:IL, September 24, 2008.

A "financial crisis as serious as any we have faced since the Great Depression" is not enough to bring the novice Senator from Illinois away from his politicking to respond to a generational crisis, which demostrates his poor leadership and judgement.



This represents change you don't want and leadership you obviously cannot count on! Country First actions seem appropriate!

A Command of the Facts

Joe Biden is at it again, describing the qualities associated with leadership at the highest levels and how such a person can instill confidence in the public by knowing what he is talking about.



Oh good heavens!!! I would think a member of a Democratic Party ticket running for the President of the United States would have a working knowledge of the Great Depression, one of our country's darkest periods.

Perhaps someone should fire a copy of The Forgotten Man by Amity Sclaes at him. Unfortunately, since the book is not advertised on television, Biden may not know it exists.

That type of political leadership Biden describes is available this year at the presidential level, and it can be found with John McCain.

No New Deal!

There is turmoil and uncertainty in our financial markets these days as the the carnage from housing crisis unwinds on Wall Street. Although the media, along with Democratic presidential candidate Barack Obama, claim the Great Depression of 2008 is at our doorstep, it is not.

President Bush correctly claimed recently that Wall Street got drunk, and we are all living through the hangover. Over the years, firms such as E. F. Hutton and Kidder Peabody and hedge funds like Long Term Capital have bitten the dust. Now, it is Bear Stearns and Lehman Brothers. When you get overly greedy, you usually pay a heavy price.

As the negativity abounds, do not be fooled by those wanting to take this opportunity to grab more governmental influence on the free markets. The reform mechanisms, many of which have been in place since the 30's, are in need of reform as the architecture has not changed with the times. No new governmental guidance is needed or required. The free markets cleanse themselves, as you are currently witnessing.

Many of those offering commentary about a new great depression are those championing more governmental regulation and influence.

"The best view of big government is in the rear view mirror as we leave it behind" --Ronald Reagan, January 26, 1984.

Errors in thinking in this regard can be grave. Required reading on the lessons to be learned from the real Great Depression are told in The Forgotten Man, by Amity Shlaes. FOX Business's Stuart Varney interviewed MS. Shlaes today on what if any parallels exists. She cautions about many of the policies the Democrats claim are impending should they be elected. Let's make sure they are not!