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Author Topic: I'm Scared  (Read 17864 times)

Offline 4EEM

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Re:I'm Scared
« Reply #15 on: February 03, 2006, 09:38:51 am »
 :-\  It's a catch 22.  It is definatly a matter of national security, but you can't sell a war to the american people based on "a threat to the dollar" and other peoples in the world know exactly why we are going to war and when we tout the ideals of freedom or the threat of nuclear arms, etc. it makes us look like hipocrates and undermines our credibility.  On top of that war is not cheap is the world willing to finance us further?

It's definatly a head scratcher.
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline dwj469

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Re:I'm Scared
« Reply #16 on: February 03, 2006, 09:42:31 am »
yes its definitely not a good situation but it also just so happens that irans radical president is rearing his ugly head at just the right time with the nuclear weapons fiasco so there you go. The world will back us on this one. Although I really think Israel is going to do the dirty work for us. That remains to be seen.
My Daily Real Estate Investing Adventures
www.rei4u.blogspot.com

Offline David A. Hurlbrink

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Re:I'm Scared
« Reply #17 on: February 03, 2006, 10:26:07 am »
As an ex-military man formerly involved in high level planning and operations, I have to speak out here. Our
military isn't staffed nor equipped for another conflict. Back in the military's good old days (Reagan era) we had it going on. Clinton stripped the military to the bone. We still haven't recovered. Under the old Warsaw Pact model we once planned ops against, we had the required resources. After the fall of the Iron Curtain, we focussed on the economy under Papa Bush. . Then we decided it was smart to dismantle the military (remember DON'T ASK, DON'T TELL?) under Clinton. Most of the true warriors bailed out, myself included after 8 years, We saw the writing on the walls that we wouldn't be allowed to fight to our capabilities. Schwarzkopff, through his genius, proved us wrong. Point is, Reagan built a Special-Forces type militaty that everyone knew was the best in the world and could stand at 6-1 odds against the enemy. Troops like me could competently perform 5-8 different jobs. Sadly, we're reduced to sending female truck drivers into harms way ala Jessica Lynch. Now we're looking at fighting two major conflicts simultaneously. I pray we have a traditional war with Iran. Enough of a diatribe over the military. God bless the troops.
Dave
David A. Hurlbrink
President/CEO, The Blue Mesa Group
REI, Mortgage Lending
Top Quality Cedar Log Homes
Office: (505) 866-0974

Offline dwj469

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Re:I'm Scared
« Reply #18 on: February 03, 2006, 10:33:43 am »
Hi David, thank you for your service to our country. I dont think we can thank you enough. My father was a marine in the early 60's. In regards to the military you are right equal rights has nothing to do with war. Are woman different than men? Of course they are, they dont belong on the battlefiled. All of this started back in the 1960' s which are now the people running our government, John Kerry as an example. If we do go into conflict with Iran I believe it will be air only just to knock out their nukes. Remember dont vote for hillary in 2008 she will further dismantle the military and instead throw some flower power at them. Again thanks for your service and God bless you and your family
My Daily Real Estate Investing Adventures
www.rei4u.blogspot.com

Offline marcus335

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Re:I'm Scared
« Reply #19 on: February 03, 2006, 10:35:55 am »
I agree China is the real key.   They are the biggest purchaser of US debt.  They need us though because we buy their goods.  As long as the cycle contintues then rates stay low.  Fannie Mae is how we bundle up mortgage debt and sell if off as bonds.  Their latest bond offering details are:

Pricing Date  January 18, 2006  
Settlement Date  January 20, 2006  
Maturity Date  February 15, 2011  
Issue Size  $3.0 billion  
Coupon  4.500%  
Price  99.542  
Yield  4.603%  

As long as investors are willing to buy the bonds at 4.6% yield then mortgage rates will stay low.   The problem is when investors stop buying the bonds on the secondary market.

Also,  most of the mortgage bonds are now 5 and 10 year bonds.  That helps keep the yields lower vs. a 30 year bond which keeps interest rates down.  That's relying on industry data saying people usually sell their home or refinance every 7 years.  

The beauty of that for the mortgage industry is home owners have mostly paid interest over those 7 years.  They get almost the full principal back.  If inflation stays low they make a killing.  If you take a $100k loan at 6% over 7 years you pay $40k in interest and under $11k in principal.  Overwhelming what you pay goes right into their pockets as profit.  They want people to sell or refinance often.

Offline 4EEM

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Re:I'm Scared
« Reply #20 on: February 03, 2006, 10:51:43 am »
1.  I think the secondary market is going to lose it's tast for low yields.

2...Mentioning "low yields" and referencing iran....see the administrations "Nuclear Posture Review Report".
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline 4EEM

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Re:I'm Scared
« Reply #21 on: February 03, 2006, 10:52:45 am »
 ;D
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

mtnwizard

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Re:I'm Scared
« Reply #22 on: February 03, 2006, 11:07:24 am »
Scared now?  Watch these 2 videos about our banking system.

http://madcowpolitics.com/moneymasters.wmv

http://madcowpolitics.com/moneymasters2.wmv

Peace

Offline 4EEM

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Re:I'm Scared
« Reply #23 on: February 03, 2006, 11:15:36 am »
No.....Fractional Reserve Banking is sweet!
Say whatever you want about the twin deficits, the impending nuclear war, etc....But leave the FRB system alone.  If it were not for the FRB systems and it's lovely FRNs I would be out of job.
LOL
 :-X
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline 4EEM

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Re:I'm Scared
« Reply #24 on: February 03, 2006, 11:20:34 am »
...and, the gold system was not so hot.  Boom bust, boom bust, boom bust, blah...... The FRB system is set-up kind of the same way, but atleast when you bail on the country that is about to bust you don't have to try and sneak out all that heavy gold, you just have your "credits" transfered to a swiss account. ;)
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline marcus335

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Re:I'm Scared
« Reply #25 on: February 03, 2006, 01:15:27 pm »
I forgot to note that the deliquent mortgage rate is 3 times normal.  People are starting to fall behind on their bills.   People will still need a place to live though.  I think turning preforeclosure or foreclosure properties into cash flow properties is the key.  The problem is properties have to get cheap relative to rents for this to work.  At least that's the problem I see in the SF bay area where I live.

Offline dwj469

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Re:I'm Scared
« Reply #26 on: February 03, 2006, 01:37:39 pm »
you are right the key  to the storm is buy and hold. Long term rentals. You need to be able to buy for 30-40000 and rent for 600-1000.
My Daily Real Estate Investing Adventures
www.rei4u.blogspot.com

Offline Rich_in_CT

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Re:I'm Scared
« Reply #27 on: February 03, 2006, 02:03:51 pm »
Your lucky I got into the office early this morning and have some extra time... ;)

I hope your prepared for a long tirade. ;D

My $0.02 on where interest rates are headed

In the next 6 -12 months I expect the 30 Year rate to be between 6.95% and 7.125%...This calculation does not take into effect any major geo-political events and discounts the success of an Iran Oil Bourse.  While major geo-political events add considerable volatility to the market it is hard to say what affect any one event would have on long-term U.S. interest rates.

If there is a run on the dollar in 2006 I would expect interest rates to range between 7.75% and 8.50% on a 30 Year Fixed mortgage.

I expect a growing number of foreclosures as early as spring, but I expect them to really pick-up in winter on 2006/2007 as higher interest rates find support, property taxes in particularly heated markets are reassessed and home heating bills again reach record highs.

The current danger in my opinion

In the last year I’ve originated a large number of I/O, Adjustable Rate Mortgages (and Pay Option ARMS) with LTVs generally above 95% to stated income borrowers.  In many cases these borrowers’ actual Debt-to-income ratios are 60%+.  Keep in mind that the DTI ratio used by lenders does not take into account; utilities, gas for vehicles, insurance for vehicles, health insurance, groceries, child care, or local, state and federal tax liabilities!

Example:
In July of 2004 John Doe purchase 123 Main Street for $150,000.  The property taxes are $100/month and the home insurance is $50/month.  The average annual utility bills total $1,500.  The borrower purchases the home 0% down on a Two-Year ARM with a start rate of 6% and a principal and interest payment of $899/month.  The PITI payment is $1,049/month.  John Does gross monthly income is $2,700 a month and his FICO score is 720.  He has a car payment of $250/month and other monthly liabilities on his credit report of $140/month.  His DTI is 53%...two high for the 100% financing at the rate he desires so he goes “stated”.  John closes the deal….  Did I mention John is a single father of two?

Let’s look at the real numbers (2004):
GROSS Income:   $2,700/month
Principal & Interest:   $899/month
Taxes:      $100/month
Insurance      $50/month
Credit Cards:   $140/month
Car payment:   $250/month
Vehicle Ins:   $50/month
Groceries:      $300/month
Utilities:      $125/month
Gas:      $120/month
Misc.      $200/month
Remainder      $466/month
   …..Oh wait….I forgot….Johns employer withholds 20% of his paycheck for taxes, Social Security, etc.
Adjustment:   $540/month (don’t worry since John is obviously poor his taxes will be refunded at the end of the year)

Actual Remainder   -$74/month

So, if John’s actual cash flow is negative what does he do to get by?  That’s right….He charges it!


Now let’s look at the numbers for 2006 and let’s assume that:
A.  John was a real asset to his company the last two years and they increased his pay by 15% over 2004.
B.  Taxes increase by 10% since John bought the property…after all it is a hot market.
C.  Insurance stayed the same.
D.  All that charging over the last two years and the new BK laws increased John’s monthly min payment on his credit cards to $275/month
C.  Johns car in still 2 years away from being paid off.
D.  Johns vehicle insurance has remained the same
E   Due to higher transportation costs johns grocery bill has increased by 15% over 2004
F.  John’s average annual utility bill has increased 30% over 2004
G.  Johns monthly vehicle fuel bill has increased by 20% over 2004
H.  Johns misc. spending has stayed the same.

John’s income has increased by $405/month…$324 after taxes.
John’s expenses have increased by $251/month…
Now John only has a net monthly negative cash flow of $1.00….But wait we forgot about that mortgage.

People like John don’t pay taxes.  People like John have no chance of saving for retirement.  People like John face total financial ruin should they no longer be able to finance their personal deficit spending with their homes….People like John are EVERYWHERE!



What I think it means for the Real Estate Investor
1.   Energy efficient properties located close to major employers (preferably exporters) in urban settings are great buy-hold investments.
2.   High LTV ARM’S should be avoided at all costs…unless it’s a buy-flip with a hold time of less than 6 months.

I think a lot of the “First Time Homeowners” and “Newbie” real estate investors from the last 3-4 years are going to be renters.  This is great for buy-hold investors who bank on cash flow, NOT APPRECIATION.  

The caveat is this:  If you agree and you think energy costs are going to continue to climb as well as core inflation does it makes sense to own properties where your renters have to commute a ½ hour + to work everyday?  DO NOT include you tenants’ utility costs into the rent!

I’M NOT A “BUBBLE HEAD” BUT I AM WATCHING THE MARKETS WITH GREAT INTEREST/CONCERN THESE DAYS.    

Let's not forget the rise in credit card min monthly payments that's coming, you can add a few more dollars to the average Joe deficit fund.

Offline dwj469

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Re:I'm Scared
« Reply #28 on: February 03, 2006, 02:10:23 pm »
just stop trying to keep up eith the Jonese live within your means and life is so much more enjoyable. Who cares if you have a big house and a nice car. If you have what you need to live comfy thats all you need. Everything else doesnt matter.
My Daily Real Estate Investing Adventures
www.rei4u.blogspot.com

mtnwizard

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Re:I'm Scared
« Reply #29 on: February 03, 2006, 07:02:22 pm »
The Truth About the Federal Reserve Bank:

Who actually owns the Federal Reserve Central Banks? The ownership of the 12 Central banks, a very well kept secret, has been revealed:

Rothschild Bank of London
Warburg Bank of Hamburg
Rothschild Bank of Berlin
Lehman Brothers of New York
Lazard Brothers of Paris
Kuhn Loeb Bank of New York
Israel Moses Seif
Banks of Italy
Goldman, Sachs of New York
Warburg Bank of Amsterdam
Chase Manhattan Bank of New York (Reference 14, P. 13, Reference 12, P. 152)

These bankers are connected to London Banking Houses which ultimately control the FED. When England lost the Revolutionary War with America (our forefathers were fighting their own government), they planned to control us by controlling our banking system, the printing of our money, and our debt (Reference 4, 22).

The individuals listed below owned banks which in turn owned shares in the FED. The banks listed below have significant control over the New York FED District, which controls the other 11 FED Districts. These banks also are partly foreign owned and control the New York FED District Bank. (Reference 22)

First National Bank of New York
James Stillman
National City Bank, New York
Mary W. Harnman

National Bank of Commerce, New York A.D. Jiullard

Hanover National Bank, New York Jacob Schiff

Chase National Bank, New York Thomas F. Ryan
Paul Warburg
William Rockefeller
Levi P. Morton
M.T. Pyne
George F. Baker
Percy Pyne
Mrs. G.F. St. George
J.W. Sterling
Katherine St. George
H.P. Davidson
J.P. Morgan (Equitable Life/Mutual Life) Edith Brevour T. Baker (Reference 4 for above, Reference 22 has details, P. 92, 93, 96, 179)

How did it happen? After previous attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President. He had committed to sign this act. In 1913, a Senator, Nelson Aldrich, maternal grandfather to the Rockefellers, pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation (Reference 3, 4, 5). When elected, Wilson passed the FED. Later, Wilson remorsefully replied (referring to the FED), "I have unwittingly ruined my country" (Reference 17, P. 31).

Now the banks financially back sympathetic candidates. Not surprisingly, most of these candidates are elected (Reference 1, P. 208-210, Reference 12, P. 235, Reference 14, P. 36). The bankers employ members of the Congress on weekends (nickname T club-out Thursday...-in Tuesday) with lucrative salaries (Reference 1, P. 209). Additionally, the FED started buying up the media in the 1930's and now owns or significantly influences most of it (Reference 3, 10, 11, P. 145).

Presidents Lincoln, Jackson, and Kennedy tried to stop this family of bankers by printing U.S. dollars without charging the taxpayers interest (Reference 4). Today, if the government runs a deficit, the FED prints dollars through the U.S. Treasury, buys the debt, and the dollars are circulated into the economy. In 1992, taxpayers paid the FED banking system $286 billion in interest on debt the FED purchased by printing money virtually cost free (Reference 12, P. 265). Forty percent of our personal federal income taxes goes to pay this interest. The FED's books are not open to the public. Congress has yet to audit it.

Congressman Wright Patman was Chairman of the House of Representatives Committee on Banking and Currency for 40 years. For 20 of those years, he introduced legislation to repeal the Federal Reserve Banking Act of 1913.

Congressman Henry Gonzales, Chairman of a banking committee, introduces legislation to repeal the Federal Reserve Banking Act of 1913 nearly every year. It's always defeated, the media remains silent, and the public never learns the truth. The same bankers who own the FED control the media and give huge political contributions to sympathetic members of Congress (Reference 12, P. 155-163, Reference 22, P. 158, 159, 166).

 




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