Hello Brothers and Sisters of the World Family!
Falcon here. Sorry about the absence...family members have passed on recently, and work, school, and the financial markets/environment needed our attention. We have a lot to say...so here we go!
Finances...Mortgages, School Loans, etc.
Wonder what Falcon and Dove think? Here's what we think are the issues at hand:
This financial mess began back in 1999 with some changes in regulations that gave more people opportunities to own homes, but lenders less opportunity to be honest in lending. This was a bad combination. When incentives are in place to make more money across the board amoung professionals and there are few rules to keep them honest, they have shown that they fail absmally.
Real estate agents, originators, underwriters, appraisers all partiipated in the chaos in deplorable fashion. Blaming homeowners is dispicable, because these individuals were the professionals; they should have explained the law and the consequences, but they didn't. Why? Because they were all making their fortunes off of steering perfectly good prospective buyers out of Conventional, FHA, and VA mortgages into exotic loans that garner them hefty commissions and homebuyers mortgages that would ballooon eventually to the point that they were unmanageable. Why would these professionals do this? Because ultimately, the bank that gave the loan wasn't holding on to it; they were selling it elsewhere: to Fanny Mae, Freddy Mac, or eventually in bundles overseas (mortgage backed securities).
These bundles often also contained student loans, so that is why student lending was also impacted. Once upon a time, banks held on to the loans they made, so they were less likely to assume high risk. Appraisers participated by appraising homes where the real estate agent and lender wanted the appraisal to be, even when they knew that the homeowners, particularly in poorer neighborhoods, would never get that amount for their home in a sale, ever. Ironically, this also caused many buyers' taxes to increase along with the home sale. How did these folks sleep at night? They convinced themselves that the buyers would re-finance by the time the balloon hit, or sell (flip) the property, or that the home value would grow at a rate that would keep equity higher than the mortgage, which of course, didn't happen.
They called it a 'housing bubble', but to me, it looked like an A-bomb.
The proverbial house of cards starting coming down in August, 2007,,,and prophet Jim Cramer gave his "they know nothing!" rant...and the public was listening, even if the supposed experts were not.
Student loans bundled with these bad pieces of paper were auctioned overseas...and in february, 2008...they stopped buying them. That meant that the agencies that were funding their capital off these sales now had no more money to lend. That's when things began to freeze up in the credit market. Like a scene from "The Day After Tomorrow", the freeze spread from housing and student loans to everywhere else because everyone owed more than they made. They were 'leveraged' to the hilt, and had no insurance or capital to cover losses. People began to want theier money out of these tettering banks (and the short sellers didn't help matters, along with the ratings agencies) so large losss of deposits only made the situation worse. A slow acing fed chairman, always behind the curve, and the deer-in-the-headlights Congress who took forever to do the obvious, whether they liked it or not...all contributed to where were currently are with a global crisis of supernatural proportions. So now what?
Now...we keep our money in safe, secure banks and credit unions under $250,000 worth of deposits per account, per name. Over $2 trillion has been lost by 401K plans in the last 6 weeks. Many people will have to delay retirement; some delay college (or maybe not...see my sugestions below) and some will cut back on their retirement lifestyle. Small businesses cannot make payroll or buy new goods. It will not be a very merry holiday season for many. It's time to tighten out belts; it's going to be a bumpy ride.
Students: Can you get a loan for next semester? Next year? Federal loans are fine, and state agencies are really stepping up to help. Keep doing your scholarship applications, even if you are in college. DO them during your break; every little bit helps. www.fastweb.com, a great scholarship aggrigator. Ask your university fianacial aid department if you can get a payment plan, or do they have some small scholarship money (especially if your grades are good this term). Many universities have small scholarships they can dole out when needed. Ask family members to support your education, instead of gifts this holiday season. Your education is one of the most important things you can do with your life. Do what you can to stay in school and get it paid for with the least amount of debt.
From local to presidential candidates, find out where your candidate stands on important environmental issues. You want leaders that remember that this is the only planet we have. There are a lot of distractions out there, but thinking green means jobs, education, employment advances, and saving the world. It is a win-win situation, but those who can't see the possibilities are holding us back, and frankly, making things worse. We cannot afford them, and neither can our future. Get rid of them, and say so at the polls. Vote for candidates who support the environment!
For those about to vote (or already have in places that can)...we salute you!
Get out to the polls. Americans...this is the most important election of your lifetimes, no matter how old you are. The next president will have his hands full, and he needs a Congress with a clue...so vote local and nationally for those with vision, leadership, acumen, and genius. Don't vote by single issue, or about race, or hair, or gender, because that is an evil distraction.
Falcon and Dove are supporting the ticket of Obama/Biden for President/Vice President of the United States. The choice was fairly easy, especially after McCain chose Sarah Palin as his running mate. Let me explain...
John McCain has been in Congress for a quarter century. He is an Ameican hero. He is, however, an ineffective force in Washington. I cannot think of one piece of legislation that he introduced that has done me or my family a bit of good, ever. He nearly derailed congressional discussion during the economic crisis and showed that he has little leadership capability, or understanading of the macroeconomic problems that face our country.
Sarah Palin is suing the Department of the Interior to have polar bears moved off then Endangered Species List. She wants to drill Alaska into oblivion, supports banning books and used her position as govenor to fire a good man doing his job because he wouldn't fire her sister's husband. She has no foreign policy experience and is educationally lacking when it comes to understanding the nuances of government. Frankly, it's a no-brainer.
Barack Obama is a young leader, who has done an increadible amount in Washington in his short tenure. Is he perfect? Nope. Who is? Joe Biden is strong, dynamic and doesn't always agree with Obama, and I like that. Both will be challenged in this new dynamic we all find ourselves in, but this team is much better qualified to lead our nation into its uncertain and volatile future.
Vote your heart, not your fear. Vote with courage, because we will all need it. November 4 is a beginning of a new phase of American government, and the work doesn't end that day...it begins anew. It will not be easy for anyone; it will call for us to move past our differences and embrace our future as a collective.
Division is a painful illusion we simply cannot afford at this time. Remember, the deisions you make on election day wil effect your elders, your children, and your grandchildren. I want to look into my child's eyes and say that I voted without fear.
Peace, World Family,
Falcon and Dove
Tuesday, October 28, 2008
Hello Brothers and Sisters of the World Family!