Congratulations, YOU now own Freddie and Fannie

Random Ramblings
21

Thanks Jake. I thought I’d have to jump into a rant on why this is happening. I almost couldn’t wait any longer on you.

HoldandBuy:

The media is saying everything is “hunky dory” now because as a quasi-private entity Freddie and Fannie had investors that they had to answer to and thus, could not make the changes necessary to keep afloat and show a profit. As government held companies, they do not fall into the same situation.

My guess is that now loans that are in default/behind will be worked out in some way that will allow (or at least attempt to allow) the homeowner to stay in the home and continue making payments. That can be in a number of ways, such as a straight loan modification, a reduction in the loan or a reduction in the interest rate. Things, in short, that were next to impossible as privately held companies.

If that works, it will a) keep a large number of currently defaulted notes from becoming REOs and thus off the market, and b) stablize a score of stable homeowners struggling to make a payment, giving them one that they can afford, thus hopefully, making them more inclined to purchase other things since they don’t have to worry about struggling to make a too high mortgage payment.

Raj

22

Parade magazine had a story about Warren Buffet a few days ago. He has a similar strategy. If you do what the average guy is doing, you will make average money. If you do what the average guy thinks is crazy, but you do it smartly, you make a lot more. Buy undervalued investments!

23

Absolutely, Now how about giving us some interest back too? I was smart enough to not go with a wild ass ARM and so may have paid a little more interest up front but can actually afford my loan, so how about giving me back some of my money too?

Guess it just proves that its always our issue to help and bail out the idiots… :flush

24

I think your right on the money Roger…

Here’s the bottom line…

SOMEONE or some ENTITY is going to take a hit…

What the hell is the difference if a bank forecloses on a home they loaned $200K on, boots the people out, then let’s the house be sold for $100K to someone else??? :banghead :banghead :banghead

Either way they take a $100K hit.

I agree with Roger…If the Feds let these people stay in the home, refi down to current market values and keep MORE INVENTORY off the market, prices should stabilize.

It’s going to happen either way. At least getting it OVER WITH will put some stability back in the financial markets.

I know a lot of people here would like to see this just left to market forces…That,is NOT going to happen…for right or wrong…it just isn;t happening with THIS Fed chairman. This guy literally wrote BOOK afetr BOOK about the depression and where the Goverment screwed up by NOT stepping in…

I deal in reality…What I WANT doesn’t matter…what matters is what I GET. You play the hand your dealt. There is a play here…
It’s the GOVERMENT as SAVIOR play and it’s happening ALL AROUND US… Are you guy’s going to DEBATE it or make MONEY FROM IT!!

Come on in…the waters fine!!!

Next stop for the money train…

DETROIT!!!

Got my ticket…when are you guy’s getting yours???

This is a CHANGE YOUR LIFE money opportunity here…and I’m not kidding.

25

One of my favorite ways to remember contrarian investing is to recall 2 things about people. People are greedy and forgetful. Greedy - see current mortgage crisis. Forgetful - see S & L crisis.

Last week or so my boyfriend lamented how the markets are being spooked, thus driving up oil prices. I asked him, if you see they are being spooked, and driving up oil, then what are you doing to profit from it?

I believe the majority of folks here who are hesitant may have grown up with the morality/empathy spiel … money is the root of evil, you don’t profit from someone’s misfortune. yadda yadda.

If you’re astute enough to pickup on the market being spooked, or seeing how people are reacting to the mortgage crisis, auto buy outs, etc., then you’re sharp enough to make money from these reactions. …the psychology of the market.

when you panic, you cannot be rational. when you focus on doom and gloom, you cannot see opportunity. what your neighbor is complaining about, you most likely can profit from. listen carefully…

By the way, I posted recently about CHS chico’s stores… they own white house black market, where Michelle Obama got her dress…

Another person in the news recently… Michael Phelps. His mom was at the olympics and on tv supporting him… Guess where she got her outfits? Ya, chico’s. Know what they call her outfits now? The Debbie Phelps collection. Talk about psychology! I can see the soccer mom line forming at the mall right now…

26

You mean the government owns my Fannie?

I AM sorry for that one.

Mike’s absolutely right. First we have Social Security and Medicare. Now the government owns 50% of the mortgages in the U.S. market. In my opinion this is a great country because we are capable of self reliance, resilience, discipline and innovation. These very qualities are slowly being replaced by an entitlement mentality. If there is a reason why Toyota and Honda are better than Ford, you can thank the United Auto Worker’s Union for that.
Pete’s (fdjake) absolutely right, and he has been for years. If he’s preached a lot of doom and gloom, it’s a reflection of this market’s reality. I was recently reading about the 1980’s, when Michael Milken sold the idea that loaning money to small corporations ,in spite of a higher rate of default, could be profitable because corporations that didn’t default will pay higher interest rates, and therefore, cover the non-paying borrowers. When corporations could not pay, they simply issued more junk bonds, raised more cash, and paid the interest expenses on outstanding junk bonds. They even decided to mix higher risk and lower risk tranches into collateralized bond obligations. These bonds were particularly attractive to Savings and Loan institutions and Thrifts. That sounded familiar to me. It sounded like the game we were playing with Freddie and Fannie, and it sounds like the game we are playing with United States Treasury Notes and Social Security money. Same circus, different clowns. Those are Pete’s words, but I wish they were mine.
Do you know what the top-selling foreign auto maker in China is? GM. Do you know what that best selling vehicle in the U.S. has been for 17 years running ? The Ford F-150. Russia is now Europe’s largest car market; and the best selling brand in Russia? Chevrolet.
We would be absolutely stupid to let market forces take control of these giants and allow them to go down in flames. These are business that promote a huge amount of wealth around the world, and if they go down, we will all suffer.
This is exactly the kind of financial gimmickry that lead Japan’s economy into a decade-long recession with overnight lending rates of 0%. Business bails out government, government bails out business…same circus different clowns. I don’t want to hear the government say they refuse to bail these businesses out. I don’t want to hear the government say they will raise taxes and “fix” the problem. I want the government to say that they will intervene, but they will set up systems of transparency and accountability so these kinds of problems will not happen again.

Otherwise we’ll all keep praying for just one more bubble.

27

I read your posts and I know you do your research, but I just saw this on the CNN main page.

http://www.cnn.com/video/#/video/business/2008/09/09/westhoven.ford.65.mpg.cnn

I have to say, I never found any ford vehicles matched the standard of European or even Asian companies. And a 2-door car becoming widely popular with anyone who has at least 2 friends or relatives? I have been to Europe and yes it may be popular there, along with Vespas and scooters. But in America where the average person is officially classified as obese?

28

Your right Brian…100%

Listen, I owned a Used car dealership for 15 years and sold NOTHING BUT HONDAS and TOYOTAS!! They run forever. But we’re not talking about CARS here…we’re talking about an INVESTMENT! Two COMPLETELY different things…What do you think wil happen to the price of Ford stock when they are selling cars people actually WANT TO BUY!! This isn’t about a small 2 door car becoming wildly successful. It’s about a COMPANY learning to BUILD what their customers WANT!!! It’s about ALL Ford’s new models and the impact they’ll have. Remember this…If you take NOTHING else away from this here it is…FORD DOESN’T HAVE TO BEAT TOYOTA??? Ford just has to beat FORD!!! Get it??? If they do BETTER than they are doing in 2008 when 2010 rolls around…that stock goes to the MOON!!! Wall St. LOVES to compare this years earnings with LAST years!! THAT…is the beauty of this investment!!

When oil shot to $147/barrel it CRUSHED the stock prices of Ford and GM.

Now here’s the interesting part…WHAT WERE WE TOLD ABOUT OIL PRICES??? Anyone remember???

I DO…IT’S DEMAND FROM CHINA…NOT SPECULATORS. :banghead :banghead

Now, of coarse we have hedgefunds going under every week because it WAS speculation that drove oil prices to record levels. Now that oil is on the verge of breaking below $100/barrel the HEDGE FUNDS themselves are COLLAPSING!!

So…we have OIL in free fall…Remember…THIS was the reason for the big drops in Ford and GM’s shares this summer. That’s OVER. I saw a guy on CNBC this morning saying Oil was headed to $50/barrel!!! So there’s a HUGE wall that just fell apart.
But now the dopes on Wall St. are WORRIED about Ford and GM having enough CASH to ride out this recession. But wait??? What’s this Goverment loan stuff???

Is the light starting to go on??? See it??? It’s there…faint…I’m trying to lead you to it guy’s.
If the 2 biggest factors OIL (now NOT a factor) and CASH (which the FEDS are going to provide at BELOW MARKET interest rates) have both been addressed, some one show me how these companies DO NOT survive!!

The thing you CAN NOT FORGET is this…

FORD doesn’t have to BEAT Honda and Toyota. HARLEY sells one fifth the number of bikes Honda sells. YET HARLEY STILL MAKES MONEY!!! LOT’S of it!!
THAT…is all Ford has to do…SEE IT??? They become PROFITABLE and the stock will go CRAZY because almost NO ONE expects this to happen. And the absolutely amazing part of this is FORD makes MONEY in every country they sell cars in EXCEPT the USA!!! Fix THAT and you FIXED FORD!!! Uncle Sam is about to help!!!

Ford was TOO BIG, they built too many cars. Mullaly has taken an AXE to this company. They WILL be profitable because they WILL have HALF as many dealers, selling BETTER cars. No more health care payments for retirees, no more selling THOUSANDS of cars at a loss to rental companies just to say “WE sold more cars then Toyota” It was all BULLSH*T. Those days are OVER. You need to look at what is COMING.

As far as Americans NOT buying small fuel efficent cars. Toyota just sold it’s 1,000,000th Prius. The UGLIEST car on the road today. As far as the two door cars go…Ford is bringing the Fiesta here in a 4 door sedan, a 5 door hatch and a 3 door hatch. They also have a version running right now in Europe that gets 70 MPG!!! Toyota gets $25K for that Prius…I think Ford will sell as many Fiesta’s as it can build and they’ll make MONEY on EVERY one. For the first time in YEARS Ford is actually making money on the Focus (and selling every one it can build, 2 shifts added to that plant to kepp up with demand)

REMEMBER…Out of the park, home run investments, are built on the ability to SEE what is coming, and set yourself up inorder to PROFIT from those upcoming events. The cuts have been made, Consumer reports now ranks FORD EQUAL with TOYOTA on quality. Oil is falling, the U.S. Goverment is about to hand Ford a BIG FAT loan check, and at some point this economy WILL recover. The BEAUTY of these cycles is historically in EVERY SINGLE RECESSION…the very first thing people buy when they feel the economy and their jobs are stable is…

a new car!!!

I expect my net worth to rise dramatically within the next 4 years based on this investment. I now own or control over 60,000 shares of Ford. (while everyone on Wall St. was running for the doors I’ve been buying at BARGAIN BASEMENT prices) And…the stock is STILL at $4.50/share!! Now’s the time boy’s!!! The beauty of this investment is the upside vs downside risk. I have, through the purchase of options, and stock, control those 60,000 shares of Ford at a total cost of just under $70,000. You do the math…Uncle Sam makes those loans, Ford survives, they ride out this down cycle, and maybe the stock goes to $15 or $20…maybe a LOT higher…multiply either number by 60,000…Then show me a 3 family home that returned those numbers for you??? Remember…my TOTAL investment is $70K. How many of you guy’s have your named signed on a dotted line for a whole lot more than that?? I don’t get calls at night from my $70K, I don’t have to evict my $70K, and my all time favorite…when I want to SELL this investment??? Let’s put it this way…it took me longer to write this sentence than it will take to sell the entire 60,000 shares!!

Same circus, different clowns!!!

Chaa CHING!!!

Hope I didn’t “RANT” too long on Ford. Cripes some people JUST DON’T GET IT.

I have had NUMEROUS people here BASH ME, then, AMAZINGLY, they PM me and ask if I’ll manage THEIR MONEY FOR THEM :banghead :banghead

I DO NOT manage other people’s money.
I DO NOT have a BLOG.
I DO NOT sell books.
I DO NOT do seminars.
I DO NOT want to partner with you on a split for stock advice.

IT’S ALL FREE!!! That is THE ONLY WAY I keep any credibilty. This is not costing anyone a penny. It’s all laid out here for the BUBBLE!!!
It amazes me when I read comments like christopher w’s!!!

Some people just don’t get it. :shocked

29

I agree with you in principle. However, this clown show can NOT go on forever. The United States government is printing money like it’s going out of style and this money isn’t based on anything other than thin air. It is no different than a person who is broke simply writing some big amount in their check register. He’s pretending that there’s a bunch of money to spend and can indeed write a bunch of checks, but they’re all going to bounce. The US government is doing the same thing. They’re writing checks with money that doesn’t exist, hoping that no-one will notice (very few do). There isn’t anything to back up these bad checks other than the government’s ability to tax the citizens. The only teensy weensy little problem is that the citizens are maxed out and can’t be taxed much further. That’s why inflation has reared it’s ugly head and why we are (100%) headed for a crash of unprecedented proportion. Since the government can’t tax us to raise the money for the bad checks they are writing, they are taxing us with the invisible tax of inflation. A CRASH IS a certainty and is ALWAYS the result of the government printing fiat money.

Yes, the clown (the government) is going to fight to keep all the balls in the air. Yes, only a few balls have hit the ground so far (IndyBank, Freddie, Fannie, etc). However, with each bailout; with each “printing” of more fiat money, those balls are getting heavier AND the number of balls is increasing. At this point they are the size of bowling balls and the fed is barely keeping up.

The price of crude is down about 30%, but gas prices are only off about 10%. Did you notice that? That’s because gas prices didn’t keep pace with crude prices on the way up. Gas prices are still very high. Heating prices will be off the chart this winter. Layoffs are starting to pick up and good jobs are headed overseas. The baby boomers have started to retire and soon there will be an avalanche of these retirements. There is no money in the invisible social security “lock box” and medicare is rapidly going broke.

If all that isn’t enough, Russia is once again causing trouble and has the oil money to back up their talk. Let’s not even think what’s going to happen when Israel is forced to attack Iran - that MUST happen soon!

This thing is not over - IT HASN’T EVEN GOT STARTED.

Mike

30

I think that is pretty on target. We arent close to a bottom. Maybe a plateau or even a small rise, but we are headed for disaster down the road. Companies are cutting jobs to try to save themselves. And the winter is coming, heating oil and construction layoffs.

31

Jake…didn’t miss your insight. I understand the consequences of NOT bailing out Fannie/Freddie. I’m just saying when are we going to take back control of our financial destines–both nationally and individually. Could we let the whole works melt down and recover? ABSOLUTELY. We have historical precedent. Anyone recall the event that turned around the disaster of the Great Depression? WWII! I’ll leave global military conflict as the ultimate reset button for global markets for another discussion. Oh geez, we’re already picking fights around the world (as are the Russians with Georgia). Could any of these, perhaps, erupt into the next global conflict?

Look, Fannie/Freddie/Ginnie are just massive clearing houses for GLOBAL financial fraud and money laundering. The amounts are staggering, and unfathomable. Most people can’t get their heads around a billion dollars. How can they envision how big a Trillion dollars is? Now, we own an additional debt of $5.3 TRILLION, on top of the $9.5 Trillion we already have on the “official” books.

Gas and oil prices are nothing compared to what’s going on here. At least with oil, there’s an actual market for real goods and services. Sure there’s manipulation of those markets (With OPEC being the biggest commodity price fixers on the planet), but oil and gas is real. Asset values on the books of Fannie/Freddie are pure fantasy. Let’s just hope Canada stays on our side, being that they are the largest exporters of Oil (not the Saudi’s) to the U.S.

So we have $1.6 to $5.3 trillion of contingent liability that the Govt. will absorb in some fashion. We are talking about an order of magnitude beyond anything the Govt. has ever had to deal with in a single event in our history as a county. Who can formulate a plan to deal with such a huge number?

Just to put this number in perspective, at the low end ($1.6 Trillion in obligations to be paid by the Feds), the US GOVT COULD PURCHASE ENOUGH OIL AT CURRENT DEMAND (9.6 million barrels a day) AT CURRENT MARKET PRICES ($103/barrel) TO SUPPLY AMERICA FOR FOUR YEARS!!!

So, we’ve let the global crooks steal enough American wealth and productivity to provide 4 years of crude oil for every American vehicle–from Prius to Hummer. Oil is not the problem. GLOBAL RAPING OF THE UNITED STATES THROUGH STEALING OUR FUTURE WEALTH AND PRODUCTIVITY is the real problem. b

Now, how do we ultimately deal with this? I’ll tell you the final solution.

WAR

Just think about all the crazy economics that work during times of war. Consider the extreme things people are willing to give up and do under the premises of patriotism and for the sake of the “cause”. Look at the powers that Federal Govt. has grabbed in the name of protecting the US people after 9/11 and the need to prosecute the wars around the world.

I’m willing to listen to anyone who has solutions to this problem. I think we’ve had enough preaching to the choir.

Jimbo

32

Wow. Now we’re saying we have to go to war to solve this mess? Oh wait, we’ve been at war for awhile now. How’s that working?

You’re talking about a global war of course. It’s not worth getting into an intelligent discussion about that because it’s not intelligent thinking. A global war MAY reset the markets, but it would also cost millions of lives, Billions of dollars, cause the collapse of several countries and possibly totally ruin the earth as a viable planet. Not exactly a solution, in my opinion.

Mike and the money out of thin air again!

Where, or what exactly should they be basing it off of, putting us back on the gold standard perhaps?

Do you recall WHY Nixon took us off of the gold standard? Because foreign investors (that doesn’t include the American people) held more dollars than the USA had in gold reserve.

Now if the dollar was backed by gold (or any other precious metal) and we didn’t have enough of it, what do you believe that the outcome of that limitation would be? Besides runaway inflation, people couldn’t get paid for services (in cash anyway) because there wouldn’t be more dollars available for print. Kind of makes it hard to live.

The dollar IS the backing for the dollar. As long as the dollar remains the currency for the world (and I don’t think that is changing anytime soon), it will remain viable. In short, they can print as much as they need as long as the demand for the dollar continues.

Raj

33

The answer to this question is simple…

The majority holders of U.S. dollars are the following countries…

CHINA
U.K.
JAPAN
Oil exporting countries
All others (31%)

YOU pick which one throws in the towel???

But…remember…they throw in that towel, and it’s OVER for them. THEY KNOW IT, and the MARKETS know it. LOOK at what’s happening…The U’S. dollar is the ONLY currency rallying!! Once again…you play the hand you are DEALT…Not the hand YOU WANT!!

I wonder how GREAT the Chinese economy would be doing IF their BIGGEST customer (the USA) STOPPED buying all that crap they make over there?? They bail out of our currency, they CUT THEIR OWN THROATS! Very simple. China dumps the U.S. dollar and it’s OVER for our economy…But…it’s also OVER for theirs!!!

How do you think JAPAN would do if THEY blew out of all that American debt??? Can you say bye bye Toyota and Honda. Japan is the second largest buyer of U.S. debt. They bail, they kill our economy, and THEIRS!

Lastly we have the OIL EXPORTING COUNTRIES…funny scenerio here…OIL is TRADED in U.S. dollars!!! Want to buy some??? Well step up here and convert those dracmas to Uncle Sam’s and they’ll sell you all you want. I doubt their looking to dump the ole greenback and screw themselves when the money is literally POURING in!!!

Here’s the real scenerio…The U.S. goes down…THEY ALL GO DOWN WITH US!! It’s all interwoven. We’re ALL going to pay for this mess.
Watch what happens to interst rates when they down size Freddie and Fannie.

Either way…Real Estate is going to continue to take a BEATING UNTIL we work through this crisis. As I said 3 years ago here…you CAN NOT have a price appreciation curve that goes STRAIGHT UP…with out having a BUST that goes STRAIGHT DOWN. Next up…REGION BANK FAILURES BY THE DOZENS. It’s ALREADY happening…a LOT of people are going to get hurt. A LOT of people will make a TON of money. You have to decide WHICH one you want to be…It’s a whole new world gentleman…

Change or die boy’s…CHANGE OR DIE!!!

34

3 minutes ago off Bloomberg…

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKVz2a3g_boE&refer=home

PLAY THE HAND YOUR DEALT!! YOUR GOVERMENT is the dealer, he just handed these guy’s a FULL HOUSE!!! Tough to go out of business when Washington is bank rolling you!!

Again…I could care less about the arguements here…this is a HUGE opportunity, you can participate, or you can watch it go by. I’ve seen this movie before…believe me you’ll LOVE the ending.

35

Good observations fdjake…

Why be bellyaching when with all this volatility there’s plenty of opportunity to capture gains from it.

Heck…I made some good money just off the T. Boone Pickens TV campaign…(CLNE and KDN).

My strategy is a bit different…I prefer to limit my time exposure to the market.

Ideally I’m trying to limit exposure to 45 minutes to maybe 24 hours.

This may seem like chump change to you…but I find that developing different actionable trade modules limits my risk exposure that would be inherent with longer holding periods.

One type module is Buyback Announcements. When a few months ago Western Union announced a $1 Billion Buyback program along with their solid earnings in this climate, (probably a lot of collect calls being placed these days), it was a no brainer to me that the stock would bounce well.

Would I prefer a 130% or 300%, (F going from $5 to $15), return?

Absolutely!

My approach isn’t for everyone…it requires real-time candlestick charting…which translates into having the ability to have ample time and attention during actual market hours.

But thanks to NYCRookie and another mentor I follow…it works for me.

I test extensively before implementing a plan, (module).

Back to Propertymanager’s comments…if you really think about the longer term inflationary potential that our policies are creating…it only makes sense to focus hard at developing a means of income that has the potential for exponential monetary growth.

Inch by inch, it’s a cinch.

-Mike

36

GREAT JOB MIKE!!!

You get it, always did!!!

It’s about LEARNING something!! You spent the time to develope a STYLE of trading that works with your personality. This is the single most important thing you can do. FIND A METHOD THAT WORKS FOR YOUR SITUATION and get really good at it!!

With Rookie coaching you, your definitley listening to a great mentor.
This guy’s calls (like the U.S. dollar) have been, and STILL are money makers!!!

Keep up the good work Mike, it’s about LEARNING how to CREATE WEALTH. Personally, I have found NOTHING that even comes close to the bang you get for your buck with this type of investing.

37

What opportunity again? Throw down you chips on the table and hope the Feds deals a fair hand?

Puts on failing bank and financial stocks–who wants that risk? Jake’s own analysis of the Feds dealing the deck is spot-on. Not only do the Fed’s deal the deck, they deal from the bottom. Sounds like pure gambling to me. Of course, plenty of people hit Vegas daily for the opportunity. At least in Vegas you get quoted the odds.

If the Feds are dealing from the bottom of the deck, then it reasons that they’ll deal the good and bad hands when they decide. Just like Pitt says to Clooney in Ocean’s Eleven…

"Cause the house always wins. Play long enough, you never change the stakes. The house takes you. Unless, when that perfect hand comes along, you bet and you bet big, then you take the house."

So, to make money, you’ll have to be “in” at the right time or be in with the dealer (i.e. the billionaire boys club of the Fed Govt). Hey, if you’ve got the money you can make a few hundred million like Paulson & Co. (not the Fed’s Paulson) and his gang. Notice how close his fund was to the source of the problem (former Bear Sterns investment banker), and consequently the inside info.

http://www.businessweek.com/investor/content/mar2007/pi20070308_900631.htm

I can’t say I have that kind of inside track to make smart short plays on stock puts. Good luck to any who are going to go for it.

AS FOR WAR

I’m really not just talking out of my a** here. Read a couple of articles from former Chancellor Helmet Kohl when confronted with having to reconcile the the economic problems of Germany in the mid 90’s…

Kohl warns of war if European Union fails | Independent, The (London)
http://findarticles.com/p/articles/mi_qn4158/is_19960203/ai_n14026648&tag=rel.res3?tag=col1;fa_related_widget

Kohl Casts Europe’s Economic Union as War and Peace Issue, The new York Times
http://query.nytimes.com/gst/fullpage.html?res=9A0CE5D81039F934A25753C1A963958260

Kohl was sharply criticized for even suggesting the “W” word back then. He let it slip then when Germany was being pressed by the fledgling EU back then. It’s a possibility that world leaders have entertained. What would happened if world leaders were really backed into a corner economically? It wouldn’t take a superpower spark to ignite a powder keg.

Just more food for thought.

Jimbo

38

How will this affect real estate??

39

The loss of jobs; the huge debt; the extreme heating costs; the runaway inflation, etc all will increase the downward pressure on real estate prices and increase the number of houses in inventory. The insanity in the government also increases the risk in the rental property business. My belief is that there will be a LOT of non-paying tenants this winter as they simply can not afford to put gas in the car; pay the utility bills; and pay the rent. If this attracts public attention, who knows what the idiots in the government will do? Will they declare a moratorium on evictions? (Hillary wanted a 90 day moratorium on foreclosures). Will they simply say that no-one can be evicted during the winter months (Ohio declared a gas-shutoff moratorium last winter)? Will the government some day wake up and stop all these silly entitlements, including Section 8? While that would be the right thing to do, it would also cause a temporary shock to the rental property business as these people would probably need to be evicted before they woke up and finally got a job. These government interferences could be disasterous for the rental property business.

It will also be a disaster for the real estate business when our country finally collapses. The US is BROKE! Very few people will be buying houses, cars, or anything else in the middle of a depression.

Mike

40

Here’s the effect on Real estate and WHY the stock market is so inter-related.

A few months ago the Feds told Fannie and Freddie “You better raise some capital” So both enties went out and raised money through sale of stock.

Monday the Fed’s stepped in and WIPED THOSE INVESTORS OUT!!!

Some of us my not care…but I warn you…this DID NOT go unnoticed by Wall St. Investors are going to be VERY reluctant to pour money into anything now. This will lead to a SHARPLY curtail mortgage market.

WATCH…rates are going to rise dramatically and availability of credit will get even tighter than it is now.

That is the cause and effect.

We’re in for some very tough times. Anyone who thinks this is over is kidding themselves…BIG TIME!!