JOHN STOSSEL TALKS ABOUT GOVERNMENT SPENDING AND TAXES

Do you know that 46% of what you pay for a bottle of beer is taxes? How about the facts that you work for four months out of the year just to pay your taxes or that you actually don't own much of anything, you just rent it from the government? What happens to your home if you don't pay real estate taxes? It's seized isn't it?

A TRUE PERSPECTIVE ON THE HOUSING CRISIS

A TRUE PERSPECTIVE ON THE HOUSING CRISIS

A video clip of a 9/24/08 Fox News story by Britt Hume and Bret Bajer, clearly shows President George W. Bush (you know, the guy who gets blamed for everything by the Obama Administration), Senator John (I’m not always a RINO) McCain, Treasury Secretary John Snow and Fed Chief Alan Greenspan, all warned the Congress that unbridled expansion and power within the Freddie Mac and Fannie Mae mortgage industries would lead to the housing crisis and meltdown disaster that America has been -- and continues -- living through.

We have been told that this video has been REMOVED from the United States version of YouTube as if we Americans were no better than the Chinese when the government needs to shut people up. At this point we do have the clip from a Canadian source and it is here for you to look at and digest.

One concept that I have yet to see discussed on any major network -- Fox or otherwise -- is just why people like Barney Frank and Chuck Shumer were so interested in promoting this financial nightmare. I have suggested from time to time that other than the usual Democratic Party approach of making more people dependent -- or at least more beholding -- to the government, are these rather simple facts of life in America.

(1) Government funds that are easily earmarked for certain geographical areas help build politically defined demographic regions of the country where Democrats have their strongest base, so why not expand or repopulate those neighborhoods?

(2) Americans don’t actually own any real estate. We have a Feudalistic system where -- with the exception of churches, schools and a some non-profits, EVERYONE must pay taxes to live on or in their own property. If we do not pay, we are evicted and our property is seized. In reality WE MERELY RENT from the government.

(3) Real estate taxes are the number one source of income for local municipalities and if that revenue stream was not in place, cities and towns would have to look to state and federal coffers for funds.

The bottom line for Barney and Chuck could be easily explained. The more people we get into houses, the more we can overcome that nasty little problem where half the people in the United States don’t pay income taxes. Tah, dah! More money for government to spend.

Take a look at the video and copy the link from your browser and share it with your friends.

BRACE YOURSELF. THE WORST IS YET TO COME

This past weekend I had an opportunity to speak with a retired Vet who is struggling with a very guilty conscious.

No, his concerns are not because of anything he might have done while wearing his uniform and serving his country. He told me he is now fully retired from regular employment because he made a conscious decision back in 2006 while working in the home mortgage industry.

He and everyone around him was making money hand-over-fist, writing home mortgages. He knew it couldn't last so he set a goal for himself. "I decided to make a million dollars (or more) in as short a time as possible and then retire."

"I wrote as many Adjustable Rate Mortgages with one per cent down, that I possibly could. They always went through so it was just a case of finding more and more people who wanted to own a home, even though I knew many of them could not possibly afford the purchase."

What he is feeling very uncomfortable about now -- even after witnessing the "collapse" both banks and Americans in general have seen over the past ten months -- is that he knows those ARM's issued are about to "reset" after three years. The time table is the Spring of 2010. We're about to see the bulk of the "option arm-risky loans" written by the banks, re-adjust from a Fixed-- "Teaser-rate" -- to a Variable rate.

Home owners will go from a 4.25-4.5% interest rate, to 8-10% (Libor rates). People will no longer afford their mortgage payment! Foreclosures will skyrocket!

He openly admitted that 2010 will make 2009 look like a minor blip and yes, this will be reflected in the current sucker's rally now on Wall Street. In other words, 2010 will see thousands of home owners "walking away" from their homes and their mortgage obligations because the value of their property will be much lower than the obligation of their loan. WITH INTEREST RATES GOING UP SUBSTANTIALLY on the resets, a $1000 a month home mortgage payment may jump to $1,500, $2,000 or more! As an added bonus, there are tens of thousands of "balloon payment" mortgages that will come due in 2010 and beyond. That reflects a full-fledged, nationwide mess.

On top of that disaster he said associates who still work in the mortgage industry quietly tell him that many major banks and mortgage holders have created "shadow foreclosures" that they are hiding from the government and the American people. Thousands of properties have gone belly-up already but the mortgage holders are not putting them back into MLS or open real estate listings. They are holding them back to create the illusion that home prices are stabilizing and that inventories are falling -- making NOW the time to buy.

RealtyTrac, an Irvine, CA-based foreclosure listing firm, reports that up to 700,000 foreclosed homes are not included in the multiple listing service (MLS). The housing inventory is currently pegged at 3.8 million properties, or close to 10 months of waiting at the present sales pace. With this shadow supply, however, selling is expected to take a lot longer, causing a further drop in prices.

Banks cannot let go of these properties in one go, as it could drastically reduce prices in the most hard-hit communities. Home prices have already dropped as much as 30% in some communities, and experts say they can fall even further. Some areas may need to drop another 30%, says, Barrack, just to get back to normal levels from 1998. (see link below)

His final comment was that the average American home is worth $125,000 (maybe $135,000) but definitely NOT the $250,000 to $350 or $400,000 many are imagining or hoping for. That level of "recovery" in pricing is many years away (if ever). With the ever rising tax obligations governments are placing on people and the Obama Administration's ongoing efforts to redistribute wealth, it is very, very doubtful that American citizens will be financially healthy enough for any future housing "boom".

Another personal note on housing from this weekend. An associate of mine purchased a three bedroom home in Florida Saturday. He put $1,000 down with a sale price of $41,000. The current owner "just wanted out!" and was feed up with trying to stay in the home.

Maybe it's time to buy stock in any manufacturer or distributor of tents because it certainly appears that's where many people are going to end up living.

Send your "Thanks" to Barney Franks in D.C.

*SHADOW: http://www.cdloanmod.com/loss-mitigation-news.php?a=shadow-foreclosures-may-slow-down-housing-recovery

STOP AND WATCH THIS VIDEO RIGHT NOW

As of this date less than 400,000 people have watched this video clip.  There are over 300 million people in the United States and every single one of them needs to watch it.  Please link this page in a note to your friends.

This guy's video on You Tube has been so popular that (reportedly) Obama called him personally. He said that he was very disturbed with the video and invited him to the White House.  Obama also said he wanted the White House to handle the Press and not to talk about the video or the White House visit. 

Few know if that part of things is true.  What everyone who watches the video does know is that Americans have become complacent cowards in defending their own rights and the country they say they love.

This may be the best six minutes invested in your future ........     

 

http://www.youtube.com/watch?v=jeYscnFpEyA 

B.O. Stinks