There’s always something to howl about.

Month: October 2008 (page 2 of 7)

Arthur Laffer: “The Age of Prosperity Is Over”

The author of the Laffer Curve in the Wall Street Journal:

When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk. People who buy homes and the banks who give them mortgages are no different, in principle, than investors in the stock market, commodity speculators or shop owners. Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.

No one likes to see people lose their homes when housing prices fall and they can’t afford to pay their mortgages; nor does any one of us enjoy watching banks go belly-up for making subprime loans without enough equity. But the taxpayers had nothing to do with either side of the mortgage transaction. If the house’s value had appreciated, believe you me the overleveraged homeowner and the overly aggressive bank would never have shared their gain with taxpayers. Housing price declines and their consequences are signals to the market to stop building so many houses, pure and simple.

But here’s the rub. Now enter the government and the prospects of a kinder and gentler economy. To alleviate the obvious hardships to both homeowners and banks, the government commits to buy mortgages and inject capital into banks, which on the face of it seems like a very nice thing to do. But unfortunately in this world there is no tooth fairy. And the government doesn’t create anything; it just redistributes. Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll. Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.

If you don’t believe me, just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what Read more

Pinching Pennies And Blowing The Big Bucks

Another Installment In The Saga Of Unintended Consequences

Most of us have been driving less, lately. Record high oil prices drove gasoline prices to over $4 a gallon – wreaking havoc on our personal budgets… and the nation’s economy as a whole.

Last Friday, I stopped in to visit my mechanic – and as usual, he told me about the car he was busy working on. This time, it was an engine rebuild due to “bad gas”.

“Bad gas?” I asked.

“The deposits built up so that the valves wouldn’t close properly,” he replied. “We’ve had four rebuilds in the last few weeks. I’ve never seen anything like it.”

While it might be bad gas – I have another take on it. With the enormous increase in fuel costs, most of us are driving like little old ladies – myself included. But driving for maximum fuel economy is not necessarily good for your engine, as it allows carbon to build up on your valves.

I first learned about this in the early 80’s, as my mechanic back then told me about one of his customers – an elderly lady – who would bring her car in every few months so that he could take it out on the freeway and give it a good run.

You can tell when your engine needs to get the carbon blown out, as your engine will be idling rough. The best way to blow the carbon out is to accelerate hard on a freeway onramp – running it through the gears until you get up to highway speed. It works best when there is a good load on your vehicle, such as climbing a hill.

I have “blown the carbon” out of my vehicles for years – and I even have a friend who asks me to take her car out a few times a year to blow her carbon out, as she’s uncomfortable doing it herself.

Another tip is to have your fuel injectors professionally cleaned, which also can help keep your engine’s valves clean.

An engine rebuild is not inexpensive  – it is a repair that can cost thousands of dollars. So before Read more

Mouth to Mouth Capitulation

My favorite homeless guy, a poor weather worn soul named Johnnie, has been hawking the morning Tribune at the corner of Hollywood and Broadway ever since I moved to Chicago in the mid-1990s. Idling at the stoplight, awaiting my green arrow signal into the rush hour flow of Lake Shore Drive, I’ll usually just hand him a dollar through the window and let him keep my inky copy of pulp to sell to someone else although I suspect he probably just buys whiskey with the windfall. I wonder how much booze a handful of change and a few crumpled bills can buy a guy so down on his luck these days? Whatever the answer, Johnnie doesn’t care to hide the sad fact that he’s a practicing alcoholic–not from me, at least. Not from anybody, really, with a sense of smell, or sight, or society.

“Got anything extra today, boss?” he’ll sometimes ask in one way or another. This makes me uncomfortable for a couple reasons, not the least of which being how lousy a boss I really was when I actually held such a title. That, of course, and the fact that the mere greenback I just handed him isn’t what it used to be. “Trying to get a bottle of Four Roses for later.” He lives for ‘the later,’ this guy. (As if Johnnie is somehow certain that both ‘the here and now’ the rest of us choose to pursue is any less elusive or any more fulfilling.)

“The Dow closed down over 500 points yesterday…” or “That billionaire’s airplane was found in California…” or “Obama kicked McCain’s ass again last night in the debates…” he’ll feel inclined to report to me, repeating the headlines since, like I said, I rarely take my full dollar’s worth of newsprint in exchange. He wants to give me a little something extra for my buck although he’s quick to add, “The Euro is kicking the Dollar’s ass all over the global markets.” Hint, hint. He stands there outside my car window either shivering or sweating depending on Read more

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Click on the PayPal button shown below to get your $99 ticket for BloodhoundBlog Unchained in Orlando on Friday, November 7th, 2008


















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A Disturbing New Dynamic

Although this post discusses the election in general, it is not meant to instigate a general discussion of the election.  It is… a non-political post on politics.

In talking to various people about the upcoming presidential election and their preferences, I was stuck by an odd response I kept hearing – in various forms – over and over again.  I decided to do an extensive, double blind study – exhausting all resources in order to generate a valid conclusion.  Following this study, I now believe we are witnessing a new election dynamic (or at the very least a dynamic not previously seen in our life time).

Editor’s Note: By “extensive” I mean I asked anyone who walked into, out of or near my office doorway.  I did not actually go the whole distance and get up off my seat.  Also, by “double blind” I mean to say neither I nor the person I interviewed had a clue what we were talking about.  I imagine my idea of “exhaustive” needs no further explanation…

In all seriousness, when I meet someone voting for either candidate I ask them a straightforward question: “Why are you voting for that candidate?”  Even though I spoke with a full spectrum of ideologies, I heard a similarity in all their responses.  If the person was an Obama supporter they would provide answers such as “four more years of Bush… disastrous deregulation by the current administration… conservative duplicity with Wall Street” and so on.  If the person was a McCain supporter they would provide answers such as “tax and spend Democrats… redistribution of wealth… lack of liberal strength in the face of terrorism” and so on.  I rarely got an affirmative answer with regard to their candidate of choice.  In other words: they were not voting for someone so much as voting against someone else.

That people cast their vote for someone they are not particularly excited about is not new.  Nor is casting a vote solely in opposition to the other candidate.  What is groundbreaking (and, so far as I know, not being reported) is that this year, for the first time Read more

Real estate and the ties that bind: “I have to warn you, my mom’s a bit crazy”

Just because I write on Bloodhound, doesn’t mean I have a big mouth… Or does it? Either way, when I’m with clients I try to do more listening than talking. I can’t help them if I don’t know what they are thinking.

I enjoy working with young clients. I love the energy, the enthusiasm, the optimism. It doesn’t matter how experienced they are at buying property, it’s their youthfulness that is so fun to be around. We establish a rapport quickly, and my blog helps with that. I’m told by these clients that they read my blog, so they know they can trust me. Older clients don’t read my blog- they find me elsewhere- so the trust is slower in coming. The agent/client relationship is much more solid at a faster pace with blog readers.

Yesterday I spent a glorious fall day walking acreage with a young couple from out of town. We have been emailing and phone calling for about two months now. They were in town in September to look at property, but I was at BlogWorld. A colleague was kind enough to jump in and show them around, but the couple and I missed the chance to look each other in the eyes, shake hands, size each other up, all those physical things that happen in a face-to-face meeting.

They decided they wanted to look at acreage, farmland. They have some farming experience in Europe, and Mom farms and Mom will be spending time with them here. Mom wants a farm. They were coming to town this weekend and we found some properties that met their criteria, set up the appointments. Oh and by the way, Mom is here, so she’ll be coming.

This sometimes happens with young clients. Mom and Dad, my generation or older, have some experience with real estate, and real estate agents. They are in town, so either they are coming along to make sure their babies are not getting ripped off, or they are coming along to give real advice and a second opinion.

Always, I get prepped from the daughters: “My mom is coming along. I have Read more

Why Bloggers Fail To Become Top Producers

I know your secret.  Honestly…I do.

You aren’t knocking the ball out of the park, regardless of your blogging effort.  You play around on Twitter, Facebook, Active Rain, and might even comment on Bloodhound Blog.  You’re probably REALLY smart and can’t believe that you’re having problems in business.  I know you are; I’ve read most of your blog posts, Tweets, and Facebook messages.  You fancy yourself ethical.  I believe that, too.

Why is a smart, ethical real estate agent like you failing then?

You got hoodwinked.  Tricked.  Sold a bill of goods.  That snake oil you bought?  Web 2.0- it was supposed to be the new way to do business; you just didn’t realize it was gonna take 3-5 years.  It’s taking longer than you imagined and you’re stuck.  Your spouse is riding your ass as she punches a clock while you play on Twitter.  Your kids wonder why you treat the occasional prospect who calls you to Ruth’s Chris while making them eat off the value menu at Mc Donald’s. You’re failing because you bought into the hype and you’re scared to admit that you blew it.

That’s okay- it’s not your fault.

You see, I got hoodwinked too.  I was all puffed up, speaking in San Francisco and New York like I was some kind of expert.  As I was hob-nobbing with the RE.net, I heard more than one of the “blogging elite” talk about their fear of personal foreclosure.  I heard the practitioners talk about losing their homes and the tech gurus talk about how rich they were getting…

…off the poor practitioners whom they appointed “experts”. THAT disgusted me.

I knew I had to make a VERY big change in my life.  I was following the “wrong crowd” and if I kept it up, I’d be face-down, lying in the gutter, with no customers at all.  I definitely didn’t want that…so I made some changes.  Those changes, combined with the things I learned from the folks who DO make money online, grew my business while my competitors were submitting employment applications at the mall.

Let me do my best Joe Biden…  It’s not your fault.

Greg Read more

Foreclosure homes are sold “as-is” — but most need only minor restoration to bring them back to fully-livable condition

This is my column for this week from the Arizona Republic (permanent link).

 
Foreclosure homes are sold “as-is” — but most need only minor restoration to bring them back to fully-livable condition

If we were to have a contest for the Valley’s most-gutted home, judging might take a while.

A significant number of homes for sale in the Phoenix area, especially at the low end of the price spectrum, are in the foreclosure process. Not all of these homes are in rough shape, but a lot of them are. At a minimum, buyers of short-sale or lender-owned homes should anticipate painting the walls and replacing the carpets.

But virtually all foreclosure homes will be sold “as-is.” This means, first, that any defects discovered in the inspection process will be the buyer’s responsibility to repair after close of escrow. But the “as-is” addendum also often implies that there may be serious deferred-maintenance issues.

Still worse, many lender-owned homes will have been looted, either by the former owners on their way out or by burglars. Missing ranges, microwave ovens and dishwashers are common. Air-conditioner compressors and hot-water heaters are also absent from many homes. It is not uncommon to see that all of the ceiling fans or all of the knobs on drawers and cabinets have been removed.

My pick for the most-gutted Valley home? The entire kitchen was gone — even the kitchen sink — and the air-handler had been removed from the attic.

I would not want to refurbish that last home, since there is no telling what else has been taken. But for most lender-owned properties, the cost of bringing the home back to livable condition is fairly low.

A new set of kitchen appliances is maybe $2,500. A brand new air-conditioner compressor is around $4,000. A decent water heater is perhaps $1,200 installed. Paint, carpet and tile in the high-traffic areas should run $5,000 for a typical suburban home, less if you do the work yourself.

There definitely are homes to avoid in this market, but there are many, many others that are selling for very low prices. These properties need only very minor restoration efforts to bring Read more

Media bias as seen from the inside: “Nothing I’ve seen has matched the media bias on display in the current Presidential campaign”

Reporter Michael Malone writing at Pajamas Media:

The traditional media is playing a very, very dangerous game. With its readers, with the Constitution, and with its own fate.

The sheer bias in the print and television coverage of this election campaign is not just bewildering, but appalling. And over the last few months I’ve found myself slowly moving from shaking my head at the obvious one-sided reporting, to actually shouting at the screen of my television and my laptop computer.

But worst of all, for the last couple weeks, I’ve begun — for the first time in my adult life — to be embarrassed to admit what I do for a living. A few days ago, when asked by a new acquaintance what I did for a living, I replied that I was “a writer”, because I couldn’t bring myself to admit to a stranger that I’m a journalist.

You need to understand how painful this is for me. I am one of those people who truly bleeds ink when I’m cut. I am a fourth generation newspaperman. As family history tells it, my great-grandfather was a newspaper editor in Abilene, Kansas during the last of the cowboy days, then moved to Oregon to help start the Oregon Journal (now the Oregonian). My hard-living – and when I knew her, scary – grandmother was one of the first women reporters for the Los Angeles Times. And my father, though profoundly dyslexic, followed a long career in intelligence to finish his life (thanks to word processors and spellcheckers) as a very successful freelance writer. I’ve spent thirty years in every part of journalism, from beat reporter to magazine editor. And my oldest son, following in the family business, so to speak, earned his first national by-line before he earned his drivers license.

So, when I say I’m deeply ashamed right now to be called a “journalist”, you can imagine just how deep that cuts into my soul.

Now, of course, there’s always been bias in the media. Human beings are biased, so the work they do, including reporting, is inevitably colored. Hell, I can show you ten different ways to Read more

Tiger the Caddie?

Last Monday Tiger Woods returned to Torrey Pines in beautiful San Diego, but not to golf.  Instead he caddied for John Abel, winner of the “Tee Off With Tiger” online sweepstakes sponsored by Buick.  This is such a great picture that I can’t help but fill in some dialogue.  Mine is below.  What do you hear them saying?

AP Photo/Lenny Ignelzi

Abel: “This looks like a tough one Tiger.  What would you do here?”

Tiger: “Well, I would push this putt along a path eleven inches left of the true line, with just enough touch to clear the fringe but still allow the natural slope of the green to pull the ball back and down, dropping into the hole dead center… I have no idea what you are going to do.”

AP Photo/Lenny Ignelzi

Mortgage Market Week in Review

Here we are on Friday again.  That means that it’s time to try to summarize what’s going on in the mortgage and finance world.   I’m going to talk about a couple of main things:  the economic fundamentals, some earnings reports and the “margin calls” that are going on in the equity markets.

The economic fundamentals that have come out in the last week or two have all been, shall we say, poor.   Not just in the United States, but England, Asia and other places, the economic reports all show pretty solid evidence that we are either in or heading into (depending on where you are) a recession and that it’s most likely not going to be a short recession but more likely the opposite – a long and painful one.   I’m not going to go into the details of the different reports because it would be too depressing.

Earnings Reports (or shall we say, loss reports?)   I’m going to do something a little different this time.   I’m going to give you the numbers and then later in the e-mail, I’ll tell you who they matched with.   Here’s the numbers:

-$81,000,000
-$700,000,000
-$23,900,000,000
+$4,370,000,000

(oh and these are all just for the most recent 90 days).

Here’s the choices for the companies who made them:

National City Bank
Microsoft
Fifth Third Bank
Wachovia
I’ll tell you a bit further down which one did which……

Now for a few thoughts about what’s going on in the equity markets and how that has an impact on the mortgage and real estate markets.   Here’s an overview of it:

1. The mortgage backed securities market is a highly leveraged market.

2. As approximately 5 to 7% (that’s right, it’s only 5 to 7% of all mortgages that are causing this problem) go bad, the value of the mortgage backed securities (also known as Collateralized Debt Obligations or CDO’s) fall dramatically.   Since they are highly leveraged, the investors have to come up with additional cash, typically lots of it.

3. That is, in an oversimplified nutshell, what is causing the significant sell offs in the stock market and the bond market at the Read more

Two weeks to BloodhoundBlog Unchained in Orlando: Learn how low-cost prospecting techniques can help you dominate in 2009

I gather through the grapevine that the NAR Convention is shaping up to be a somber if not quite funereal event. Travel budgets are much constrained. That’s understandable. I can’t see a cost-benefit payoff of going to yet another vendorfest.

But BloodhoundBlog Unchained in Orlando is another basket of oranges. We are about nothing but teachable tools, tips, tricks, tactics and techniques that you can use to start snagging new business right away. Even better, most of the things we talk about are highly-leveraged: Minimum expenditure, maximum results. If you’re a Realtor or lender running in survival mode, we’ll show you how to get more bang for fewer bucks — right now.

If you’re coming to Orlando anyway — or if you already live in the Southeastern United States — make time for us. We’ll show you how to make more money for yourself.

Click on the PayPal button shown below to get your $99 ticket for BloodhoundBlog Unchained in Orlando on Friday, November 7th, 2008


















When: Friday, November 7th, 2008, 8 am to 8 pm

Where: Crowne Plaza Hotel and Conference Center, Orlando Airport, 5555 Hazeltine National Dr, Orlando, FL 32812

See you in two weeks!

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The Last Vestige of Respect… Gone

With a little over a week to go in this election, we can finally all come together in agreement on one issue.  Whether you are voting for McCain: the logical vote, or voting for Obama: the emotional vote, or voting third party: the non-viable vote (unfortunately) – one thing has become clear.  The mainstream press has given up all pretense of being unbiased in their coverage.  They are blatantly shilling.  Whether we like the candidate they are whoring for or not, any respect we could have is gone.  The fourth estate has lost all legitimacy.

This final nail in the coffin was delivered by CNN earlier this week.  By all accounts, CNN has been as neutral as possible during the election.  They appear a little left of center by most accounts, yet they have been relatively even in their coverage.  What respect they deserved is now gone too.  On Tuesday night, Drew Griffin interviewed Governor Sarah Palin.  Watch the video at about 1:25 in and listen to the question Mr. Griffin asks of Governor Palin.  She is visibly shaken by it:

Now please read the actual paragraph that Mr. Griffin is quoting from the National Review.  It was written by Byron York (not a difficult fact to find out Mr. Griffin) :

Watching press coverage of the Republican candidate for vice president, it’s sometimes hard to decide whether Sarah Palin is incompetent, stupid, unqualified, corrupt, backward, or — or, well, all of the above. Palin, the governor of Alaska, has faced more criticism than any vice-presidential candidate since 1988… (full article here)

The first and last lines change the meaning a little don’t you think?  To say Mr. Griffin quoted Mr. York to Governor Palin out of context would be an understatement. The National Review article now has an Editor’s Note that reads in part:

Editor’s note: Byron York’s recent article in National Review on Sarah Palin’s time as governor of Alaska became a campaign issue Tuesday when CNN’s Drew Griffin distorted its meaning in a high-profile interview with Palin.

You can, of course, Google all of this and you can read Read more

Praise the lord and pass the ammunition; I am Joe the Plumber and another perfectly good election year is ruined by politics.

My turn.

I feel compelled to try to make some sense of politics in public. Am I not a blogger? And this being a big bad ass blog on which I can write anything that tickles my fancy, and yes my fancy got tickled by this election, I’m going to give it a shot.

So okay then. Thanks for that.

I’m looking back at the year. I love a good political year, and in January I figured this would be a damn good one. The Republican nomination was up for grabs, I love it when that happens, and the Democrats had some history making candidates, but most importantly, my kids were paying attention, and for that I thank Barack Obama. He wasn’t a grumpy old man, he was young and energetic and hopeful and he knew how to give a rousing speech. I think hope is good. I think eloquence is good. I think both together are very good.

Then John McCain chose Sarah Palin as his running mate, and I thought it was interesting, if nothing else. History is being made and I’m living to see it. I was hopeful that Palin would bring something different to the table this time around. I had hope that this election, these candidates, this new media world, this go ’round, we might see an elevated campaign. A campaign that followed the high ground and brought the dignity and integrity that We the People deserve.

Alas, and alack, it’s not to be.

I’m uninspired by John McCain and anything I’ve heard him say. Palin is, ya know, Jane Six Pack. I worked with her, at least I think it was her, during elementary school PTO fundraisers, you betcha! She’s not without charm, and she’s a she, but mostly that ticket is kinda more of the same, only not, only yeah, it is the same.

Biden. Well I must admit that he’s not let me down because Joe’s been Joe since I was a sprout, and he’s definitely Joe now, only he’s not a Joe the Plumber kind of Joe. No, Biden is a Joe the Politician kind of Joe. Read more