Living on Euler's Line

OBX Foreclosure Site teaser...

Outer Banks Foreclosures is getting a face lift.  We hope to have the site live by the end of November.  You can read the details about what we plan on offering and what sets us apart from the rest.  If you want to receive updates, just fill out the super friendly form and voila - free updates delivered to your inbox. 

Politics in America

So if you have not heard, election day is only eight days away.  Thank goodness!  My friends... I have had enough of Joe the Plumber and Obama running against W. 

I did find a cool site that showed election results by state since the beginning of time.  It is interesting to see the swing of support.  Be sure to vote - let your voice be heard. 

Online tools to check those viral emails - Did I really win that much money?

Do you seem to get an endless supply of forwarded emails claiming everything from miracle cures for toe fungus to giving up your account information so some dude in Nigeria can send you a share of the $7,000,000 he "found" in an account?  Usually they are from your Aunt in Sheboygan Wisconsin who has a lot of time on her hands but does not take the time to see if any of the facts are even remotely true.  It seems like these emails pick up around election time - this year they seem to be at a fever pitch.

Two great sites to get the facts - Snopes and Fact Check.  Snopes is great for the majority of subjects and Fact Check focuses on election half truths. 

If we could get our Aunt in Sheboygan to just change her habbits (yeah - right).  If she could turn her attention on getting even with the scammers, we might see a decrease in the activity.  There is a great site on how to get even with those guys. 

Wall Street's role in Housing, Mortgage and Credit Crises

In the previous post Politicians Pointing the Finger, you can see the Pyramid of Greed shares some blame on our current crises with Wall Street and Investors.  60 minutes did a piece trying to break down their role and I think they did a good job describing the mess (based on comments, the derivatives guys are a little upset someone is pointing at them).  Sounds like the next in line to share the blame - Mathematician's and Physicists (2:45 into story).  12 minutes long but well worth it if you want to have a better understanding of the big boys involvement in this complex situation. 

Watch CBS Videos Online

Hat tip to Outer Banks Blogger Bill Holt, author of OBX Neighborhood for the link. 

Politicians pointing the finger for the Mortgage Meltdown

I along with millions of others watched the VP debate last week to see which foot Governor Palin would put in her mouth or if Senator Joe Biden would hit on her.  Palin did better than expected by many - especially after the Katie Couric interviews and Biden kept his hands to himself.  Normally I quietly sit on the sidelines and let Monty and Bob duke it out over the political scene, but this time the fire was a little too close to home to ignore.

The question - who is at fault for the subprime mortgage meltdown?  According to Palin - it was the greedy lenders. 

Greedy Mortgage Lenders caused this???  I can't believe the Republican Party is taking this stance.  Politicians at this level are supposed to have advisers that understand the complex issues and help the candidates put them into words the public can understand.  But instead of spreading the blame to the parties responsible - they decide to take the low road and blame the dirty mortgage lenders.

Who do I think is to blame?  All of us.  We all share some of the blame.  I saw a great post on Blown Mortgage titled Pyramid of Greed. 

This is the most accurate description I have seen to date of who really is to blame for this mess.  Great job Morgan. 

I wish there was a candidate that would tell it like it is and not what some focus group thinks the public wants to hear.  I wish the candidates would just answer the questions and not divert attention to something they want to discuss.  We are now only four weeks away from the election and I have yet to see that candidate. 

The US State Credit Responsibility Elimination We (they) Demand Updated

I will refer to it as the U.S. SCREWeD bill for short.  I know it is a stretch for the name - the creative juices don't seem to be flowing tonight.  I am concerned about the direction our country appears to be heading.  The United States is looking more like the communist states we all love to hate.

So how much debt are they trying to get us to swallow?  The flavor of the day is $700,000,000,000 (thats B for Billion) to one trillion dollars.  Maybe even more.  That is a lot of zeros.  For example:

• A million seconds ago was 11 days - The ECU Pirates were still undefeated and Hurricane Ike was about to slam into Galveston Texas.
• A billion seconds ago was 31 years - Apple Computer was formed - not many people in the world had this thing called a personal computer.  Jimmy Carter had just been elected President.  Aerosmith had a hit single called Walk this Way - So did Captain and Tennille with Muskrat Love.  I still don't understand why that song was a hit.
• A trillion seconds ago was roughly 31,600 years ago.  Scientist believe the last of the Neanderthals were dying off - (think of the Geico Caveman without the nice clothes). If you stacked one trillion dollar bills - the pile would be over 67,000 miles high or one quarter the way to our moon.

The details are still sketchy - I am going to simplify things in figures most of us can really understand.  The dollar bill.

• Banks took a dollar and loaned it to Dick and Jane to buy a house.
• The banks bundled the dollar loan with a bunch of other dollar loans and sold them to investment banks in the US and abroad.
• Firms such as Lehman Brothers and Bear Stearns (remember them - they were so last month) bought and traded those securities that were now worth $1.15 each.
• Subprime mortgages were a little riskier (which means higher profit margin) started to fail.
• Values dropped quickly - investment firms spent $1.05  to buy the loan but could only sell the loan for 80 cents.
• Trouble spread to Conventional loans - think Fannie and Freddie.  A huge bailout that nobody seems to even care about now.
• Firms have tons of cash tied up in securities they can't afford to sell. 
• Markets react to worries and the value of the securities continues to drop.  Massive bleeding and no band aids. 
• The markets are so scared that nobody wants the bundled $1 loans for what they are truly worth today (around 75 cents).  They are trading at 50 cents - values that reflect a market in much worse shape than what we are in. 

The government is proposing to the Congress (and the public) to allow them to buy the securities and hold on to them long enough for the markets to bounce back.  The question I have is how much are they (really we) going to pay for that $1 loan that is now worth 50 cents.  If they offer 75 cents, the banks still lose at least 25 cents.  Or do they offer the full $1.05 and a get out of jail card to Wall Street.  I am sure the devil is in the details and we should all know more by the end of the week. 

Update:  I found a great article on the Mortgage Insider about how the plan could actually work.  The article quotes Bill Gross from Pimco and below is an excerpt and the key to this possibly working:

Q. But how can the government make money if Bernanke is saying the government will pay above market prices for the assets in order to recapitalize the banks?

A. “He is right,” Gross said. “There is this delicate balance.”

Gross said the government must find the right price between the market value of the assets they are buying and the value they have on paper at the banks holding them.

As an example, Gross said Pimco recently paid 65 cents on the dollar for a pool of mortgage-related assets. He said distressed loans and securities can trade anywhere from 20 cents on the dollar to 80 cents on the dollar, but 65 cents is a good benchmark.

Pimco expects to earn a double-digit return on its money for the 65 cents on the dollar it paid. The trick for the government is to find the right price between 65 cents and 100 cents on the dollars. The closer it gets to 100 cents on the dollar, the better banks will like the deal. But the closer it stays to 65 cents, the better for taxpayers. Gross said government must be careful and find the best compromise price, which means taxpayers will not lose money and may earn a profit.

Gross said 65 cents on the dollar assumes as many as 30 percent of the loans being purchased will end in foreclosure, and for every home that ends in foreclosure the investor gets as little as 40 cents on the dollar.

“It’s certainly possible if done right for the Treasury to make money for the tax payer,” Gross said.

 

Saw a funny offer today:

SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

I found another interesting graphic that really shows the amount of damage that has already been done.  Good night - I am out.

Feds meet today - will they lower rates?

The Federal Reserve will meet today and around 2:15 p.m. EDT, we will all know what steps they will take to calm the turbulent waters.  My wild guess - they will probably make a cut in the rate especially since core inflation came in as expected this morning.  Update 2:15 - wrong again.  The fed keeps rate at 2% (prime is now at 5% for most banks).

I thought the mortgage industry was in for a long cold winter, but I didn't think it would start in September.  Fannie and Freddie being taken over by the government is such a huge pill to swallow.  Why aren't more people screaming for the government to appoint an independent council to look into the fall?  Maybe it has something to do with the political connections (both Democrats and Republicans have dirty hands in this one).  I think most outside of the industry really don't understand fannie and freddie so it does not make it a big deal.  The difference between this fiasco and Enron - everyone understood their 401k and how much that loss cost them.  The public might not understand fannie and freddie - but we will pay for their mistakes for a very long time.

Foreclosures up in North Carolina for August - but by how much?

The Triangle Business Report published a story about the increase in foreclosures in North Carolina.  The headline stated: RealtyTrac:  NC foreclusure filings up 32%.  Sounds pretty bad for the Tar Heel State.  I do not dispute the fact that foreclosures are up for the month of August - I do take issue with the percentages.

I know articles are meant to have that "gotcha" effect.  The problem is the way this stuff is reported and the true numbers.  You know what they say about statistics.  Outer Banks foreclosures are not published anywhere except in the local papers and the Dare County and Currituck County Courthouses. 

The article today even went into details about the different reporting styles.  They did quote numbers from the North Carolina Commissioner of Banks that reported a 10% increase.  Here is an excerpt from the article with the details:

RealtyTrac’s numbers differ from those put out by the North Carolina Office of the Commissioner of Banks. While RealtyTrac counts every foreclosure filing, including multiple filings for a single household, the commissioner of banks’ office counts each household only once, no matter how many filings it has received. By that method, the commissioner of banks’ office said that North Carolina foreclosures increased by 10 percent in 2007, while RealtyTrac reported that foreclosures rose by almost 67 percent.

I would tend to think the Commissioner of Banks would be a little closer to the truth - but maybe not entirely.  I believe timeshare foreclosures are probably added to the mix - I don't see a foreclosure on a time share unit the same thing as your beach house in Duck.  Maybe since the government is now in the banking business big time - we might actually get some type of clear reporting in the future.  I am not holding my breath...

It is time for a change...

Tired of McCain, Obama, Biden and Palin.  If you have not heard, some friends have asked me to step in as an independent party leader...

Now for a running mate - since the other candidates are picking complete opposites of themselves, maybe I should do the same.  That means I need an older grumpy guy to be my "Number 2".  Any ideas? 

Ten things I will miss about living on the Outer Banks

Our family recently finished the move to Cary N.C.  We leave behind a great community and some great friends.  I thought I would post the top ten things I will miss about the Outer Banks.

1. Friends - The Outer Banks is a small community.  35,000 year round residents make the place feel like a small town for 7 months out of the year.  You really get to know your neighbor.  Our family developed so many friendships over the last five years - we will see if they are still friendly when we want to crash at their house over the summer...
2. Family - We do have family on the Outer Banks but we didn't get to see them as much as we would have liked.  What we did see were the family members from out of town.  They liked vacationing on the Outer Banks and we benefited.  It is great catching up with folks at less stressful times than Christmas and Thanksgiving. 
3. Outer Banks Swim Club - USA Swimming on the Outer Banks.  The club is made up of a great group of parents, coaches and swimmers.  If you live on the Outer Banks and have a child between 5 and 18, check out the program. 
4. Outer Banks YMCA - I became involved with the YMCA almost immediately after moving to the area.  The organization is top notch.  Great leadership - Great members - Great board. 
5. The Beach - I didn't make it to the beach as much as I would have liked in 2008.  Career changes and this thing called "moving" had quite a bit to do with my farmer's tan.  We now have more beach gear (surfboards, body boards, fins, wetsuits and beach chairs) than anyone in Cary.
6. Internet Connections - this one is a little hard to splain.  I have met some great people through the internet.  Sounds strange but it is true.  From the ex-Mayor Bob Muller,  the anonymous Monticello, Paula the Surf Mom, Bill Bell, the folks from Village Realty and too many others to mention in one post - these online identities became close friends in a short period of time. 
7. Friends in the Real Estate Business.  There were over 1,000 Realtors, a lot of Mortgage Lenders and Builders when I moved to the Outer Banks.  The numbers have shrunk considerably but there are some good ones sticking out the slow season.  If you want some names of people I would recommend, give me a call or send an email.
8. Beautiful night skies.  Seems like a small thing but going out at night with almost zero light polution is awesome.  Great place to view meteor showers and celestial events. 
9. Fishing - Great activity on the Outer Banks.  One of my favorite fishing trips was on the Swordfish - they caught a 1,000 pound Blue Marlin a month before our trip.  The Captain and crew are great - we caught 5 Marlin that day and also loaded the cooler with dolphin and tuna.  I would highly reccommend their services.
10. Fresh Seafood - buying seafood at Harris Teeter just doesn't seem right.  Hopefully we can find a great fresh market close to home. 

Enough of the warm and fuzzies.  If you are mentioned or linked in the list above, expect a call when I am looking for a place to stay for the long weekend.