PROMISES KEPT

Awesome!!!

Tighten your belts - Credit crunch may only have just begun, S&P warns

5:18 PM ET 2/20/09 | Marketwatch

SAN FRANCISCO (MarketWatch) -- The credit crunch may only be in its early stages and a bigger contraction in lending in coming months could have "serious implications" for the U.S. economy, Standard & Poor's Rating Services said Friday.

While politicians and others have complained that banks aren't lending, the data on credit outstanding credit in the U.S. only tenuously supports this idea, the rating agency said.

See related story.

"What's behind the apparent difference between perception and reality?" Standard & Poor's credit analyst Tanya Azarchs said. "It may be that, while growth in overall credit was positive through at least third-quarter 2008, it has risen at a slower pace than at any time since 1945 -- far below the 8%-10% rate in most years."

Banks are replacing loans as they mature, but there's little net new loan growth, she noted.

"That could mean that the slowdown in lending is just an opening act, and a true credit crunch may yet take the stage," Azarchs warned.

Banks are making fewer and fewer commitments to lend, and new issues of bonds and securitized assets have slowed to a trickle, the analyst said.

"This portends a contraction in total credit available in the coming months," she wrote. "Since this lack of lending may have serious implications for the economy, the U.S. government has been devising policies that would encourage banks to lend."

Given such pressure, S&P is focusing more on whether banks are free to make loans they think are prudent and on the health of the overall economy, Azarchs said.

How will this help you? The Americans with Disabilities Act – New Amendments

At Jay Transportation we care!!!

Press release from the ADA - On January 1, 2009, the ADA Amendments Act (“ADAAA”) took effect. The Act expands the definition of disability under the Americans with Disabilities Act (“ADA”). This is a significant piece of legislation as more employees may now be considered disabled and, therefore, eligible for an accommodation and protected from discrimination.

What is a Disability Under the ADAAA?

Under the ADA, the term “disability” means with respect to an individual: (a) a physical or
mental impairment that substantially limits one or more major life activities of such individual;
(b) a record of such an impairment; or (c) being regarded as having such an impairment.
In a series of cases over the past several years, the courts, led by the Supreme Court, have
narrowed the application of the statute to the detriment of employees. The ADAAA reverses a
number of these employer-friendly decisions and changes the disability analysis.
An impairment must still substantially limit a major life activity to qualify as a disability. An
individual, however, may now be considered disabled even if the substantial limitation is
corrected by mitigating measures or even if the individual is not currently substantially limited.
Significant changes under the new law include:
Expanded definition of “Major Life Activities.”
Major life activities had been limited to those activities that are of central importance to daily
life. The ADAAA now defines major life activities to specifically include such things as
standing, lifting, bending, reading and concentrating, along with performing manual tasks,
thinking, working, caring for oneself, seeing, hearing, eating, sleeping, walking, speaking,
breathing, learning and communicating.
The ADAAA also defines major life activities to include the operation of any major bodily
function, including the immune system, normal cell growth, and digestive, bowel, bladder,
neurological, brain, respiratory, circulatory, endocrine and reproductive functions.
As a result of the expanded definition, it is likely that claims asserted by those with conditions
that limit their ability to lift, stand or bend, will increase. The number of claims by individuals
who assert they are disabled because of various learning, reading or concentrating impairments
will likely increase as well.
Disregard of Mitigating Measures.
Under the ADAAA, an individual may now be disabled even if the effects of the individual’s
impairment are corrected by mitigating measures such as medication, prosthetics, hearing aids,
medical equipment, learned behavioral or adaptive neurological modification, assistive
technology, or accommodations, but excluding ordinary eyeglasses and contact lenses. The
2
ADAAA requires that the analysis of whether an impairment substantially limits a major life
activity be made without regard to such mitigating measures.
Disregard of Current Abilities.
An individual may also now be disabled even if the individual’s impairment or condition does
not currently substantially limit a major life activity. Under the ADAAA, an impairment that is
episodic or in remission (for example, cancer) will be considered a disability if, when active, it
would substantially limit a major life activity.
Expanded Definition of “Regarded As” Disabled
The ADA has always protected workers who were “regarded as” disabled, even if they were not
actually disabled. Before the amendments, claimants needed to show that the employer regarded
them as being substantiality limited in a major life activity. Now, a “regarded as” claimant need
show only that the employer perceived the individual as impaired, whether or not it believed the
impairment limited a major life activity. The ADAAA excludes “regarded as” claims for
transitory (six months or less) and minor impairments.
Duty to Accommodate
Under the ADA, an employer is generally only required to reasonably accommodate an
employee’s disability to the extent required to allow the employee to perform the essential
functions of the job. While the ADAAA may expand the number of individuals who are
considered disabled, it does not require that all of these individuals receive an accommodation.
No accommodation is required if the employee’s disability does not affect the employee’s ability
to perform the job. Also, if an employee will not be able to perform the essential functions of the
job even with an accommodation, no accommodation is required. Further, an employer is not
required to implement an accommodation if it would result in an undue hardship.
If an accommodation is required, an employer must engage in an interactive process with the
employee in an effort to determine whether a reasonable accommodation exists. Depending on
the circumstances, an accommodation could include job restructuring, a leave of absence, a
modified work schedule, reassignment to a vacant position or modified job duties, equipment or
facilities. An employer does not have to provide the employee with the specific accommodation
requested.
The ADA, even as amended by the ADAAA, also does not require an employer to remove the
essential functions of a job in order to accommodate the employee’s disability. In this regard, it
is important to note that not all job functions are essential. Courts consider job descriptions and
performance evaluations in determining what functions are essential to a job. Employers should
periodically review and update these documents to ensure that the essential functions for each
position are accurately described.
Discrimination
As in the past, employers are at risk for discrimination claims whenever they take adverse action
against an individual who has a disability. The ADAAA increases this risk, by increasing the
3
number of individuals considered disabled or regarded as disabled. This change makes it even
more important for employers to make decisions based on actual conduct or performance rather
than impairments, disabilities or speculation about an employee’s capabilities. It is also
important that management employees refrain from making offhand comments about an
individual’s impairment as such statements could be used to prove discrimination. Sound
employment practices, including training managers and supervisors on what to say and not say,
how to recognize and handle an accommodation request and how to discipline timely and
appropriately can help employers avoid costly litigation.

Republicans need to create a more favorable reputation

When was the last time you heard a Republican really favor the Obama Stimulus (spending) Package? 

Before you answer that question ask yourself what were all of their brilliant solutions during the last 8 years regarding our economy when all of the bubbles were taking place (01-09) -

How can lender say no to refi when the payment will be lower?

6:29 PM ET 2/19/09 | Marketwatch

WASHINGTON (MarketWatch) -- Question: My mortgage for my primary residence has been with Wells Fargo at 5.63% for about five years now. I applied for refinancing at 5.13% and was denied due to my debt-to-income ratio. My question is: How did they figure out that I will not be able to afford to pay the new monthly payment of $1,280 when I have been paying them $1,438 for five years without a late nor missed payment?

My property is still worth about a third more than what I owe and I can't figure out why Wells Fargo turned down my application to refi. Thank you and if you can refer me to another lender, I will be appreciated. I need to take my business out of Wells Fargo fast.

Answer: Crazy, isn't it? Your new payment would be less than your current payment, yet you are turned down. Unfortunately, through no fault of your own, you have been caught up in the mortgage debacle. Lenders have tightened the rules considerably since you took out your original loan five years ago.

My guess is that you are carrying more debt than you did way back then. Do you have more outstanding bills? Are your credit-card balances higher? Do you have auto loans you didn't have when you bought the house? At the same time, are you earning less now than you used to? Did you count your spouse's income last time but not this time?

Whatever has changed, your debt-to-income ratio is now higher than it should be, at least in Wells Fargo's eyes. Bringing equity into the deal -- in your case, a third of the value -- is important, but apparently this lender believes your DTI is more so. Thus, you have been rejected.

But all is not lost. There has to be a lender out there who thinks you are worthy of a new loan. So look around. Get on the horn and call around, or go to a reputable mortgage broker, who can do the legwork for you. Just instruct the broker that you want a direct lender, by which I assume you mean a lender that will hold your loan and collect the payments rather than sell it to an investor, and let the broker take it from there.

Feedback

This from Russ Born regarding the answer to a question from an Arizona reader whose mother was considering throwing in the towel on her underwater mortgage.

See previous Realty Q&A.

"In Arizona, the state has an antideficiency statute. If the house is sold for less than you owe, in a trustees sale, and is a residence and under 2.5 acres, the bank is stuck."

People in other states should check into what the rules are in their own jurisdictions.

On the federal level, forgiven debt -- that is, the difference between what is owed and what the lender accepts as the loan's payoff amount -- is normally taxed as income. But under a 2007 law that was extended in October, taxpayers may exclude debt forgiven on their principal residences if the balance of their loans was under $2 million. Under the extension, this relief now applies to debt forgiven in calendar years 2007 through 2012.

The debt must have been used to buy, build or substantially improve the taxpayer's principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available. See IRS Form 982 for details.

Feedback II

Mortgage professional Colleen VanOcker reports that it is neither illegal nor a scam to collect $350-$370 up front for a refinance mortgage.

See previous Realty Q&A.

The charge is listed "as a credit at closing." she says. "The reason it is collected up front is to pay for the appraisal. Some customers start the process, then quit in the middle, after we have received the appraisal, so we are stuck with the bill...It is not really a 'lock in fee', so the lender that called it that is not using the correct terminology. When I explain the upfront fee to customers, they understand what it's for, and I don't order the appraisal until I get the money. Would-be borrowers can lock in (the rate) for free all they want."

Meanwhile, National Mortgage News reports that some residential funders are beginning to charge "rate lock fees" to both borrowers and loan brokers. The trade publication quotes one mortgage professional as saying his lender wanted to charge a 50-basis-point fee (a basis point is 1/100th of 1 percent) to lock in a low rate on his refinancing. The loan pro passed on the offer.

Also, Marc Savitt, president of the National Association of Mortgage Brokers, told NMN that "he has heard stories about wholesalers charging brokers a fee to lock in but has not seen anything in print."

Nationally syndicated columnist Lew Sichelman has been covering the housing market for more than 35 years. Because of the volume of mail he receives, he cannot answer individual questions, nor can all questions be answered in this space. Email

lsichelman@aol.com

Mortgage plan is not a bailout, and might just work

10:46 AM ET 2/18/09 | Marketwatch

WASHINGTON (MarketWatch) -- The plan announced by President Barack Obama Wednesday to prevent millions of foreclosures just might work because it uses market incentives and doesn't protect the system's worst abusers.

Under the Obama plan, some people still will lose their homes, and probably deserve that fate for borrowing far too much money. The lenders who enabled those borrowers, and the investors who provided the funds to the predatory lenders also will lose.

The centerpiece of the plan, though, helps homeowners who did nothing wrong except live in a country where housing prices are plunging.

See full story.

It allows homeowners who are current on their payments to refinance their mortgage to a lower rate but cannot because they don't have the 20% equity now required. They don't have 20% equity not because they bought too much house, but because the value of their house has dropped so violently.

These folks aren't in immediate danger of losing their home, unless they've lost their job, or they've gotten sick or divorced. However, the ability to refinance their loan to the current market rate could be the difference between squeaking by and falling through the cracks. Those who cannot refinance because they don't have enough income to afford their home won't get any help.

The second part of the Obama plan directly targets those who borrowed a little too much, probably because they took out an adjustable-rate loan or some other exotic mortgage.

These homeowners are now paying 40% to 50% of their incomes on housing. They still are current on their payments, barely. For these homeowners, the government would help subsidize a lower interest rate that would bring their monthly payment down to affordable levels. The lender would pay half the cost of the lower rate, and the government would pay the other half.

It's a good deal for the lender, because it means they'll foreclose on fewer homes. It's a good deal for the taxpayer, because fewer foreclosures mean healthier communities and more stable home prices in those communities.

For lenders unwilling to write down the interest rate, the plan also has a stick: The possibility that the bankruptcy laws will be rewritten to allow judges to modify mortgage terms.

The plan also has a few carrots to entice both lenders and borrowers to participate in the loan modification program. Borrowers who stay current will get $1,000 a year to apply against their principal. Lenders who agree to modify loans early will get cash payments and a partial guarantee against price declines.

This plan has a chance of working.

--

Rex Nutting,

Washington bureau chief

Here is an article written by Doug Nusbaum that details his ideas on how to help fix the Real Estate Market. 
-------------------------------------

Where we might be headed

PATENT PENDING

Process for making small residential units easier and less expensive to own and transfer, thus ameliorating the current mortgage mortgage / foreclosure crisis and reduce risks using a form of transferable mortgage

This is a new way of buying, owning, transferring and residing in personal residential real estate. It relies on existing methods, some slightly modified, and arranged in a new way. This Patent restores the concept of home ownership to its original form of being almost entirely for the purpose of acquiring a place to live, and removes it as a form of short term investment or as a source of day to day money via Home Equity Lines of Credit (HELOCS). It also removes much of the element of financial risk, and many of the tax problems and and necessary tricks that arise when a person sells a house and moves to a new home.

My new way of real estate ownership, which I call RE-new can be accomplished either by private parties operating under existing law, or by changing the law to accommodate the new concepts, or by some combination of both methods. In either case, it will have to start out as private parties using my method.

To start with, remember that property ownership is an abstraction set into law defining rights and responsibilities among the parties. Those rights and responsibilities are whatever the relevant laws and contracts say that they are.

It is clearly impossible to describe all the ways that contractual agreements can be created to arrive at a given goal that is mutually agreed upon by the contracting parties. This patent covers the use of four items together to define a new way of owning and using property. Each of them has been used separately over the past 30+ years, perhaps under different names. It is the combination of the four of them into one unified method that makes this process unique.

There are four key parts to my method. Much of my patent relies upon private parties making contracts. This patent suggests how some parameters be set for those contracts. Should a contract be created that does not abide by those suggestions, that does not necessarily mean that this patent does not apply to the business practices engaged in by the contracting parties.

Part I. The Normalized Housing Unit.

There now exist futures contracts in housing. That is to say, that just as one can own rights to gold, or rights to oil via commodities markets, one can own rights to houses without actually owning a house. Unfortunately these contracts are out of the range of the average homeowner, let along the average person. The first part of my method is what I call a Normalized Housing Unit or an NHU. Its size will be some unit of area. Examples used in this application will use a size of one square foot, and will have a price as determined by the appropriate market, and will be available in either of three forms, national, regional or state. A contract for a NHU will specify what type it is, and when specifying a region, will describe the region which could be as large as several states, or as small as a zip code. NHU's will be fiduciary instruments like futures contracts. It is my recommendation that a federal law should be enacted that so that NHU's used to purchase property must be owned in their entirety. That is they will not be allowed to be leveraged or borrowed against. Until and unless such a law is passed, they will instruments issued by the PRP's, and by contract the total number of such instruments issued will match area of residential properties owned by a PRP (See II below). With regard to leverage, they may fall under the rules of stocks, where they can only be leveraged at 50%. The value of NHU's will be determined by how they trade on a commodities exchange or, if that is not available, by professional appraisals or some other agreeable method.

A contract between a owner and a PRP to occupy a house using NHUs should require that there be a mix of the three types of NHUs with the following suggested constrictions. At least 1/3 of the NHUs should be national, and no more than 40% should be regional. This will have the affect of minimizing the fluctuations of the “value” of a persons housing equity. As will be seen below, this equity is portable, and can not be obliterated by a decrease in house values.

The NHU, along with supplemental contracts for specific homes will replace the mortgage. This is spelled out below. A NHU has some of the properties of fractional real estate ownership

Part II. Pools of Real Properties or PRPs.

There will exist umbrella organizations that could be corporations or CO-OPs or non profits or something similar. The purpose of this umbrella organization is to acquire what I call a Pool or Real Properties and be responsible for them. Instead of a mortgage tied to a specific property that is owned by a specific legal person and a title to that property owned by the person, ownership will be split into two complementary parts belonging to two different entities. The two entities shall be the Umbrella Organization (UO) and the owner/user or owner/landlord . The UO will be simply a corporate entity that holds title to and globally manages a number of residential properties the PRP. The stock holders shall be, primarily, the owners of houses acquired with NHU's and other UO's. UO's will arrange for annual inspections of properties and for routine maintenance of such things as Pool Pumps, HVAC, septic tanks, Roofs, etc on those properties that are part of the PRP. UO's will share in the change of properties value with owners of properties, thus distributing and reducing short term risk, while allowing individuals to participate in the long term global appreciation of real estate.

Part III. A new form of title.

Title shall consist of a private form of Torrens title along with appropriate real covenants. As long as a given property stays with a given PRP, there will be no need for title searches, or title transfers. The specific rights and responsibilities that one normally thinks of as ownership, shall be spelled out in contracts between individuals who wish to 'own' the property, and a UO that controls the PRP. Covenants on the title will prohibit any PRP from placing any encumbrance upon such a property, or selling such a property without the explicit written consent of the owner.

If a person / owner needs to “encumber” some of their property, they may do so by moving some of their wholly owned NHUs back into the pool on which they are paying the mortgage.

Part IV A different form of mortgage.

The new form of mortgage will not be on the property, but rather on the NHU's required to be the equivalent in area of the home in which the mortgage payer will reside. As the mortgage is paid off, it will be by paying off and acquiring fully paid off NHU's so that the number of NHU's in the mortgage goes down, and they are all, essentially, leveraged near 100% This makes it easier to to make mortgages portable. See below. Since the mortgage is on financial instruments, (NHUs) it is easy to pick them up and move them to a new property when a person wishes to change his residence or vacation home.

Additional terms Unless otherwise stated, an Owner will be an individual using NHU's to reside in a property to which a PRP has conventional title. A PRP will be called a corporate owner.

Suggested Ideas for How The New System Works

People will be able to acquire Normalized Housing Units (NHUs) The NHU's will be able to be used to acquire and use living space in any house in a Pool of Real Property (PRP) in accordance with the rules and regulations of that Umbrella Organization (UO) that owns the PRP. How each UO structures its rules, and the relationships with other UO's will be up that Umbrella Organization. It will work like this.

A UO will manage its properties for the benefit of those who own them, and for the corporate stock holders. Each house will have associated with it shares of the particular UO to which it belongs. The owner of the house will also be a stock holder of UO that manages the PRP. The shares and ownership will be structured in such a way that home owners will own a minimum of at least 25% of the UO. Of course, the owners could own as much as all of the PRP.

There will be a minimum of how many NHU's a person needs to own in order to occupy a home in a PRP as an owner. The resident owner will then acquire a “mortgage” on the number of remaining NHU's that would be required to own the given house in full. This new mortgage will have some of the properties of a futures contract. That is, it will be an agreement to purchase a set number of NHU's for a fixed price. When a person buys a property in a PRP, his equity will increase as he acquires fully paid off NHU's NHU's can decrease in value, but because there is no leverage involved the decrease and increase is, essentially just at face value.

In addition there will be other costs that are associated with owning a house such as insurance and maintenance. Because of the size of the PRP it will be able to benefit from systematic scheduled maintenance and large scale purchasing of supplies and contracting.

The UO maintains a pool of approximately 10% of its PRP to be used for vacation homes or as rentals at below market rates, and possibly an additional second tier of reduced cost properties. This is how a reduced cost property functions. Some people are not that fussy about their residence. One home is pretty much like another. Other people want things just so. They simply must have more rooms rather than larger rooms or visa versa. Or they must have tile rather than carpet.

So, if you are willing to be a second tier owner, you can get a break on your costs by being willing to change homes with 60 days notice, or some other number determined by contract. Moving expenses will be paid for by some combination of the PRP and the party acquiring your home. You will not be expected to move more often than once ever (to be contractually determined)

If a person still can not find a suitable home in a PRP, then they can work with the UO to acquire or build a home and place it into the PRP and then make that their residence.

The greatest benefits for owners in this system are as follows:

1. Minimized leverage of ownership. Thus a homeowners equity is protected. If they wish to have a leveraged investment, in housing then they can purchase NHU's on the commodities exchange, or housing options.

2. If they need to move, they do not have to refinance. They simply take their NHU's at their current face value and go to a new house. They keep paying the mortgage on the NHU's they had promised to buy, and those NHU's move from the mortgage column to the paid column. If the value of the new home is different from that of the old home, than a cash settlement can be made for the difference, or the number of mortgage payments remaining can be adjusted, or other financial arrangements can be made. See attached for samples.

3. Buying and selling costs are reduced. A nominal fee of maybe one percent is paid to do all the paper work, inspect and appraise the houses, and whatever else is deemed necessary. The owner moves out of house ONE which reverts to the PRP, and moves to house TWO. House TWO would be part of the rental or vacation home pool or inhabited by a second tier owner who would then move out. If the owner can not find a home to his liking, he will have the option of buying another home into the PRP, or of simply leaving the PRP pool as per contractual agreement.

4. Known costs for high value items requiring repair and maintenance as well as reduced costs for insurance and distributed over time. Because a UO will be managing several hundreds of not thousands of units, they can arrange for scheduled inspections and routine maintenance and even replacement of high value items with known lifetimes. Because of economies of scale the costs associated with these necessary functions will be less when compared to those costs for current private home owners.

5. They can also self insure. To encourage due care on the part of an owner, if a covered item fails after an owner has been at a property for six months, he will have to pay 10% of the cost of repair or replacement.

6. In these times of financial crisis, the greatest benefit is this one. Suppose that a person suffers a financial reversal, and the value of their home has gone down. As long as they have some reasonable income, this is not a problem. The person simply moves to a smaller house, one that they can afford. Remember that the NHU's have not lost all their value, just gone down in value. But if they had 400 sq ft, of NHU and are in a 2000 sq foot home, they can move into a 1200 sq foot home and have a 33% ownership value, and start paying rent plus on the remaining 800 sq ft, Their payments will have gone down by ½ but their living space will only have gone down by 40%

Many people have lost hard earned down payments in the tens of thousands of dollars when they lost their homes to foreclosures. Others are about to loose those down payments. We are not addressing those who refinanced their homes, or purchased them with zero down. In order to give these victims of Wall Street incompetence the advantages of this system, new UO's (Umbrella Organizations) will be encouraged to share the leveraged appreciation of the properties that they buy with those who have been the victims of foreclosure, or are about to loose their homes to foreclosures. The purpose of this is to allow hard working families to regain lost investments. Banks will also be encouraged to offer better terms in such situations.

This saving the American Dream (STAD) program will benefit all concerned. An example is included

**********End of Provisional application for a Patent**********

Additional Notes

Sharia Law

This system can easily be made to conform to Sharia Law. That is, as far as the home owner is concerned there is no paying of interest on money that is lent. This is because NHU's are wholly owned. Rent is paid on that part of the house that is not owned. I am sure that the advantages of this are obvious.

Monetizing MBSes (Mortgage backed securities)

A financial institution takes the properties that they have taken back after foreclosing on them. Then they create NHU's based only on the average value of properties in a region in which a property exists. The NHU's will be discounted based on the degree of property deterioration of foreclosed properties. The key here is that whereas at one point there existed securities that were backed up by mortgages that had been sliced and diced, and because of the current situation the mortgages could really no longer be evaluated, and so the securities could not be evaluated, now we have securities made of pieces of paper (POPs) that each reflect several fractions of different houses of known square footage. Now it is easy to evaluate the total square footage represented by a POP that used to be a MBS. This total Square footage can now be evaluated via the NHU's What was once a MBS of dubious value is not a contract for a commodity that can be, relatively easily, traded.

People with poor credit and little equity can move into a house and quickly change sweat for NHU's while paying to acquire NHU's

For example consider a package of MBS. Bank forecloses. The underlying mortgage becomes worthless. This lower values of all other MBSes. Bank now has a property on its hands that starts to deteriorate by the day. How are the underlying MBS's to be valued? Assume that the bank has 10,000 homes at say 150,000 each. Why 150,000? No one knows. No one knows the value of the homes. But at an average of 2000 sq feet each, we know that the bank does have 20 million square feet of housing, and that these could be used to create 20 million Normalized Housing Units. If the bank were to give the 10,000 homeowners who had lost their homes 100 NHU's each for a value of say $1.00 then the bank would get a lot of publicity. But now you have an instant market. You have a million NHU's on the market with people anxious to sell. Bargain hunters will be looking to buy cheap and sell for a higher price. After a week of trading, you probably have a fairly good idea as to what the rest of the 19 million NHU's are worth. Thus you have an idea of what the MBS's are worth.

And yes, I am aware that new laws will have be created to make this legal. In the meantime I suspect that some lawyer somewhere will be able to interpret existing laws in such a way as to make this legal. And since everyone benefits, it should work.

Politicians Care? Yeah, right.

At least two politicians had full access to this information back in October, and neither thought it was worthwhile. Either they did not understand it, or they did not see how it was helpful to themselves. Other politicians know about it, but also do not care. If you want to get our country fixed, and think that this is a way to do it, you better not expect any help from those who brought you the current mess. Spread the word. Make noise.

New Rules are needed

Tax cuts would make me rich, as well as you. They would force me to either invest in a new business to force a write off or support my effort to build this business.  The savings would force me to invest in stocks, buy more stuff or simply save the money in a checking account at a Bank.  Either way, tax saving would grow business, create wealth, create jobs, affect me personally and those around me.

A stimulus package without this great tax incentive gives me, personally, little motivation to be the change that I want to see happen. So, with our newest stimulus package we need new rules to excite me top play in this new game. 

In our latest stimulus package we see great savings for the middle class, and this is great if they have the same inspiration as I do, but maybe they don't unless the rules change...The tax laws and incentives need to adjust to this new game. And, the lower class (poverty) we offer great hope, but I think little sustainable stimulus as they will just simply spend the food stamps and see no path to creating or innovating themselves.

Bottom up economics is a new game with new rules needed, rules that make sense, are fair and create for a competitive world classs country.  I am excited to see some change in our rules and am looking forward to adapting to this change.  The games focus will be on making the weak, stronger.  As we all know, we are only as strong as our weakest link.

BUt, the game will change.  We need to get a good idea of how the game will be ruled, so I can start ot [play in it and strategize, but right now the rules have not been written. We learned from the past that trickle down economics does in fact create great wealth and great jobs, but certains rules that applied to the Republican theories need to be fixed by 2012 in order for their game to be played again.  Until then, the democrats have a chance to develop rules that have sustainable growth and that will reelect Obama in 2012.  But, they must include changing the probelm rules from the past, the rules that apply to large institutions, like mark to market accounting.  The Gov't controls all the rules and now we are forced to see a higher, bigger gov't take control and we need to.

As we see Obama spending hundreds billions of dollars in industries like health, efficiencies in record keeping, insurance for all, etc.,  We need to see new rules apply to this set of economics.  For example, no more shit food allowed to be sold (lets get smart) with artificial coloring, aspertame, nicotine, saturated fats, aeropastoline, ridolucintine, klorochlorides (made up words) but you know my point.  These wierd ingredients are toxic, fattening; mercury in fish?!?!?1 - chlorine in drinking water?!?!, who knwos what else is the reason why our health is detiorating and creating so much unnecessary cost in our health system.  Investing in preventive medicine or regulating the food industy, etc is needed if we really want everyone to have health care...And, there is no cost to this....Only savings!!~!!Becasue if we decrease obesity, we decrease diabetes, heart failure, stroke, etc.

We need new rules. A change in the Rebublican game.

By Sammy Averbuch

The Fed is too f$%king big and slow!!!

Here is a prime example of a great bank that may fall because the Fed is spreading the money around to too many industries, too many pet project and other "ear marked" projects that will not do anything to solve the problem.

AT THE ROOT OF THE PROBLEM.

Corus Bank in Chicago, lent hundreds of millions of dollars if not billions of dollars to developers in Florida, Illinois, California....etc.  There loans made it possible for people to buy homes, developers to make money, restaurants to thrive, etc.  But, as the credit crisis hit, their loans that oncew stimulated the economy came to a screaching hault.  Property values fell so far that these loans are now bad....Hence the bank cannot keep up with the poor economy and the poor loans.

It makes no sense to let this bank fail....if this bank fails than the buck will simply get passed on somewhere else.....Lets keep the problem where it needs to be and in the hands of Corus Bank...They can work this out better than anybody.  They are invested in this mess.

If the FED were too move a little quicker, Banks like Corus Bank could survice this, and be our strongest advocate in fighting this mess, in cleaning this mess up.....Letting the bank fail will only prolong the problem and pass the toxic debt to somewhere else......We can work these loans out now and or just hold on to them untill the market turns....But, the Bank could be forced to shut down due to regulators assessing a poor grade.  Here is a example of how we can help a great bank, that fell short this month to grow stronger, be a better advocate for the future of banking, and the U.S.

But is it too late????  I hope not.  OBAMA, GOP, DEMS, Henry Paulson, Tim Geithner....MOVE YOUR ASS>>>>>>>help where help is needed, STOP SPENDING MONEY ON BUILDING NEW PROJECT 3 years down the line.....Or else, these loans will all go into default and people will "steal" these projects for so much less than the projects are ultimately worth....THis formula is good for the private investor and bad for EVERYONE ELSE!!!!

See article below.

Condo King Corus Weighs Its Options

By JONATHAN KARP

The bank that funded a big part of the condominium boom is considering selling all or part of itself as rising defaults force it to seek capital.

Corus Bankshares Inc., a symbol of the exuberance for glass-and-steel condo towers from Miami to Los Angeles, reported a $260.7 million quarterly loss late Friday and said that more than one-third of its $4.1 billion in outstanding loans were nonperforming. Amid what it called a "precipitous decline" in property values, the Chicago lender also warned that banking regulators may soon strip Corus of its standing as a well-capitalized bank and impose higher cash requirements.

Mike Dulberg, Corus's chief financial officer, said in an interview Tuesday that management is exploring options, including selling the bank or finding a strategic investor. "We are working with investment bankers and searching for capital, but it's a very tough market," he said. Mr. Dulberg said Corus still has $758 million in capital and nearly $4 billion in liquid assets that can be tapped to "meet the demands of borrowers and depositors." The vast majority of its $7.6 billion in consumer deposits is federally insured.

Corus is one of the few lenders to report that the Treasury Department intends to reject the bank's application for funds from the Troubled Asset Relief Program, or TARP.

Some analysts don't believe the bank can raise the capital necessary to survive.

"The company is in dire straits," said Daniel Cardenas, senior vice president at Chicago brokerage Howe Barnes Hoefer & Arnett Inc. "Barring a surprise injection of private capital and/or a dramatic rebound in condo values, Corus appears unlikely to survive 2009."

Mr. Cardenas on Monday reduced his 12-month target price for the stock to zero. In the two trading days since it reported its quarterly results, Corus has shed 63% of its value. Tuesday, Corus's shares fell 30%, or 18 cents, to 41 cents, in 4 p.m. composite trading on the Nasdaq Stock Market. Corus's market capitalization has withered to some $22 million, limiting its financing options.

Condos are one of the hardest-hit segments of the housing market. Many of them were bought by speculators who walked away from deposits when the market soured and never closed on their units, leaving developers with empty condos.

Also, much of the new condo development is located in second-home markets, such as Florida, where prices have crashed and foreclosures have risen. There was a glut of 588,210 condo and cooperative apartments on the market in December, close to a 15-month supply, according to the National Association of Realtors.

While it has been clear for months that thousands of condo projects were doomed, the full impact on financial institutions is only now being felt. Construction loans were structured with "interest reserves," provisions that gave developers funds to pay interest until the projects were complete. Now that projects are completed and failing to sell, the loans are going into default.

Banks and thrifts had $36 billion of condominium debt on their books as of the end of the fourth quarter, according to Foresight Analytics. Over the past year, the delinquency rate rose to 26% from 10%, estimates the Oakland, Calif., research firm.

Conditions are likely to get worse before they get better because many cities still are getting hit by a deluge of new supply. In Chicago, 5,570 units are scheduled to be delivered this year, up from 4,018 in 2008, according to Reis Inc., a real-estate market-data firm. Deliveries are expected to increase in 16 other markets as well, including New York City, Phoenix, San Diego and Seattle, Reis said.

With $8.4 billion in assets as of Dec. 31, Corus ranks as one of the biggest banks to flirt with failure this recession. The bank has been in regulators' cross hairs for months because its once-diversified lending unit, Corus Bank, bet almost exclusively on condos during the housing boom. More than four-fifths of Corus's loans are concentrated in construction and development projects, mostly condo buildings in speculative markets such as South Florida and Nevada and overbuilt cities such as Atlanta and Phoenix.

The strategy reaped often-huge profits, but in the second quarter of 2008 Corus reported the first loss in its 50-year history. As condos failed to sell and developers defaulted, Corus last year suspended new condo loans and later halted all commercial lending, among other steps, to preserve cash.

President and Chief Executive Robert Glickman, scion of the Minneapolis family that founded the bank, had maintained that Corus could weather the storm. In the latest financial results, the company conceded that the "housing calamity is worse than even the 'severe downturn' for which we had planned."

Treasury officials have said that a bank's viability is a prime consideration in determining whether to grant TARP funds, but the denial of a request can depend on other factors. One red flag for regulators is a concentration in commercial real-estate loans, such as Corus has. Yet the move to establish a bank for toxic debt and other measures in the pending stimulus bill could offer relief for Corus.

Corus offers the starkest case study of the condo frenzy.

In Sunrise, Fla., west of Fort Lauderdale, Corus lent $126 million for two 26-story buildings with 396 luxury condos. The Tao Sawgrass complex stands empty, and Corus has repossessed the property. Corus also took over -- and then sought bankruptcy protection for -- a 765-condo complex in Panama City, Fla., where only 65 units had been sold.

Mr. Dulberg, the Corus CFO, said the company's strategy for troubled projects is to reduce condo prices and provide consumer mortgages in order to stimulate sales. "Our focus is to move those units," he said, adding that the traditional spring buying season will measure the plan's success.

Corus has about $2 billion in unfunded construction commitments and that in the event of a federal takeover, regulators wouldn't be obligated to fund these commitments.

—Matthias Rieker and Peter Grant contributed to this article.

Write to Jonathan Karp at jonathan.karp@wsj.com

Printed in The Wall Street Journal, page C1

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

Put money in the banking system. Just in the banking system.

There seems to be a whole lot of GOP members that feel that Obamas Stimulus Package is wasteful.  From the looks of it, I think his plan will fix some of our problems, and while his approach to this problem seems well planned, well thought out, backed by most democrats if not blindly all, it is lacking focus.  It seems that when Gov't gets there hands on issues like Taxes, Medicare, Social Security, Stimulus packages....The plan gets SO spread out that problems arise, minimal positive effects occur and diluted efforts become the norm.  And, yet and unfortunately when private companies get solely involved synthetic vehicles are created like derivitives and CDO's where they are so complex that only the inventor of such instruments truly understand the risks and rewards of the products.  Free markets take these highly sophisticated instruments and run with them as long as they make money.  Then crash!  This is what we learned....But, those who created these instruments always knew this. Ideally, there is a perfect fit between Gov't and Private Industry where as long as WE THE PEOPLE (Gov't) work equally with the inventors of these projects and truy understand what these financial inventions are, then and only then can we use them in scale.  Joe the plumber must understand these vehicles, no pun intended.  And eqaully he should with this new highly intensive stimulus package.  The current plans to stimulate the economy in its current verbage, in my opinion, is geared to touch so many people, from poor, to wealthy, from energy to manufacturing, with the intent of saving jobs, but with only the focus of the GOV't and with no input from the private investor.  The stimulus plan as Obama perceives it today will create and sustain over 3 million jobs.  Thats great.  But who knows.  we need a focused approach,  the problem started with the banking industry.  Now, the politicians rush for answers that nobody understands, not even the economists.  We need private bankers leading this or financial inventors.  As Economists are unclear to exactly how the stimulus plan will truly trickle up or down to promote sustainable short term and long term growth, financial executives who truly understand these mistakes as well as the inherrent problems of capitalism will understand with out any doubt how money flows into a (any) business and how that business grows based off of capital, investment, supply and demand.

Obama is the first to admit that there is "no magical bullet" that will cure the problem and stimulate the economy.  This is wrong.  There is a magical bullet...The bullet is to put money directly into our banks and hold them accountable to investing only in business.  The good kind of business.

A business reinvestment plan is what is needed, funneled through the banking system.  The banking system which exists, performs well, is already the focus of what went wrong,the majority of our problems stemmed from poorly risk rated assets is where we need to focus most of our efforts on.  It is here, where we must learn from the mistakes that we have made and here in which the the banking system can be corrected and at the same time it is within the boundaries of this system that ulitmately will get the economy going again.

Obama is doing the right, but with time, he can focus in....One thing he can continue to do is with insuring against defaults in Money Market funds, insuring against defaults in future servicing of other specific assets, we stabalize the trust of everyone......THE US CAN DO THIS, but his approach to the public to our plan, to merely stimulate, ramp up, grow, increase, balloon, drive, pump up the volume, run efficiently with vigilence with so much is not simple enough.  To stimulate is to be simple and focused....

We need a simple approach....a simple ramp up with money flowing to banks, who lend to business, who hire people - People in turn, spend money on these products and services, buy food from local places, the local places grow and hire and the economy is sustaining itself.

We need it simple.

By Sammy Averbuch