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[bob ford <bobford79 AT yahoo.com>]

I think the guy's point was more about not playing in a rigged game than 
anything else.  His math was wrong, but this is going to cost a lot more than 
700 BN before it is over. 

   Every union, every industry, every special interest is going to say "you 
gave to wall street, now I want mine"  ;.(    ...bobford



--- On Mon, 9/29/08, Gene GeRue <genegerue AT ruralize.com> wrote:

> From: Gene GeRue <genegerue AT ruralize.com>
> Subject: Re: [Homestead] Inflation --commentary
> To: homestead AT lists.ibiblio.org
> Date: Monday, September 29, 2008, 8:16 AM
> On Sep 29, 2008, at 8:40 AM, Lynn Wigglesworth wrote:
> >
> > I'm a very 'rooted' homebody, so it's
> hard for me to understand the  
> > need
> > to move and upgrade all the time. If you have a fixed
> rate mortgage  
> > and
> > don't plan to move, it doesn't really matter
> much what the market says
> > your house is worth.
> 
> In the seventies homeowners began viewing their homes as
> investments  
> in addition to places to live. Through the mechanics of
> leverage and  
> the effects of inflation average income people have since
> then been  
> able increase their net worth and be more prepared for
> retirement. As  
> family size increased so, too, did incomes, and so people
> sold their  
> homes and bought bigger ones in better neighborhoods with
> better  
> schools.
> 
> We are now going through the strongest price adjustment I
> have seen in  
> the years since I began my real estate career January,
> 1969. A couple  
> years later I opened my own office. One of the things I did
> was keep a  
> record of interest rate changes. In those days the interest
> rates of  
> FHA and GI loans would stay constant for years. Then they
> began  
> changing several times a year. Then they began changing
> ever sooner,  
> until it became a daily guessing game. During the four
> years I sold  
> Phoenix real estate--2002-2006--the rates stayed around six
> percent.  
> That is a rate lower than when I bought my first house in
> 1965, a GI  
> loan at seven percent. I was amazed that the low rates held
> so long.  
> The very low interest rate for a prolonged period of time
> is a strong  
> contributing factor to the current mess. The other factor
> is the  
> extremely lax lending guidelines. At no other time in my
> real estate  
> career have I seen loans made with no paper documentation
> of  
> borrowers' incomes and expenses. The no-down-payment,
> interest-only,  
> variable-interest loan is great for a knowledgeable
> investor. It is a  
> disaster for a family depending on paychecks to meet family
> budgets
> 
> Everyone connected to the real estate business, which
> includes forty  
> or fifty, maybe more, different job sectors, from land
> appraisal to  
> furniture salespeople to landscape maintenance workers,
> profited from  
> the low interest/low qualification mortgage loans. Now the
> whole  
> country gets to pay the bill for the unregulated greed
> frenzy that  
> ensued.
> 
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