Some stuff to get off my chest from 30,000 feet
How bad is the housing situation in America?
· 29% of American homeowners are underwater including 60% of homeowners in Nevada, 49% in Arizona, and 45% in Florida
· A total of 14.7Million homeowners are underwater
· Six million homeowners have been foreclosed while 3.5 million are in the process
· Today’s housing inventory is at 14 months (versus historical average of 6 months)
· Homeowners can’t get a loan modification because they are too deep underwater or banks are afraid to issue a loan in fear that property values will continue to drop
· Millions are faced with pouring good money down a possible hole or walking away and getting their credit rating hammered
The only solution may be to grant these homeowners debt relief and force the banks to write down the difference; something that no bank is excited about doing. But would Fannie and Freddie do it? And I bet the Hedge Fund Managers who are sitting on short positions related to Mortgage backed securities would cry foul if the game was suddenly rigged. And before you say moral hazard, isn’t that what Hank Paulson and Congress did for Wall Street?
Is President Obama pro deportation or pro-immigration reform? Unfortunately, for many Obama backers, you may be saddened to know the Obama administration has deported 46,000 parents with U.S. born children forcing 5,100 children into foster care. Is the President trying to score some political points? Perhaps, but at what political cost and worse, what moral cost? To put this statistic in perspective, this administration is actually deporting people more aggressively than the Bush administration.
Memo to those that are embarrassed by your country here are your options:
C. Run for office
I get that Corporations are in the business of creating earnings and not in the business of employing people. However, in countries like Germany the social contract between employer and employee is alive and well. Even during the Great Recession German employers maintained employment levels by reducing hours and increasing training in cooperation with the state. So why has the social contract collapsed in the U.S.? Personally, I blame the likes of former GE chairman Jack Welch for making the term ‘Shareholder Value’ a permanent part of our business lexicon.
This Wall Street yo-yo act is getting tired. Each day a new rumor about Europe collapsing or being rescued drives the markets. Remember when stocks went up or down based on corporate performance?
60 Minutes pointed out another big disappointment from the Holder Department of Justice. Why hasn’t the DOJ used Sarbanes –Oxley to charge ANYONE in the mortgage fiasco? Who exactly are they prosecuting?