Waiting To Exhale

While I love having a mini vacation (Wednesday-Sunday this week) its always hard when a vacation does not start on a Monday for me. I feel all out of sorts when things start off on a Wednesday! I was actually looking for the football game listings this morning, but its only Saturday.

Salvage Operations Hitting a Snag
Here in the greater Boston area, the radio is inundated with ads offering help to those people that have exploding ARMS that need to refinance. Because this state is a nanny state, all kinds of money has been set aside to help people hang on to the "American Dream". So how is the salvage operation going? The website Boston.com had a truly hilarious piece on the 21st that I just came across tonight. I whole heartedly recommend reading the entire piece:
http://www.boston.com/business/personalfinance/articles/2007/11/21/refinancing_programs_omit_many_borrowers/

Here are some choice bits:
"Eight states including Massachusetts have pledged almost $900 million this year to help borrowers replace unaffordable mortgages, but the states collectively have refinanced fewer than 100 people, a Globe survey found
In Massachusetts, where the Patrick administration introduced a $250 million program in July as a "big piece" of its efforts to limit foreclosures, not a single loan has been refinanced."
Wowza! Not much relief there. Why the low number?:
"The vast majority of the applicants aren't eligible for refinancing. They have either fallen too far behind on their payments, have badly damaged credit, or simply owe more on their loans than the value of their homes, making refinancing effectively impossible."
"A leading advocacy group said the programs simply aren't able to help most borrowers. "They're very well intentioned," said David Berenbaum of the National Community Reinvestment Coalition, "but these new products aren't fitting the needs of the consumers we see."
The products are not fitting the needs of the consumers huh David Berenbaum? The only product that will save most consumers at this point is a winning lotto ticket or a major inheritance.
"It was a great program for somebody who was thinking ahead," said Tonna Phelps, director of Single Family Housing at the Maryland Department of Housing and Community Development. "The problem is that people aren't thinking ahead, so now we have to go back to the drawing board."
I am about overwhelmed at the shear honesty of this piece. I will try and get it some more press. Rarely in the current mess will you get to read a story so brutally clear as this one.

All the talk about freezing rates before resets, expanding FHA loans, and working with lenders to stop foreclosures is just smoke. Nothing can be done to save prospective flippers and pie in the sky dreams of big profits in real estate. Sadly the best option for most people is to lose the home and begin to start over. Allowing oneself to become chained to a losing bet for the next decade is simply not smart financial advice.
I wonder who is actually looking to buy right now? While home sales have collapsed, they are still running over the historical sales rates. Anyone out there know somebody looking to buy? If you do, direct them to this blog. I would appreciate it if that person could leave a comment which details the thought process at this point.

Waiting to Exhale
While watching the financial TV shows today, I was struck with the tongue in cheek bullish commentators. Today was the first time I saw many "experts" give a bullish argument and actually smirk and smile while they did it. It seems even those folks know the jig is up. A few guys even were honest and said to the effect "hey I am here to be bullish, what do you want?".
With all the headlines and news surrounding the housing collapse, I always wonder why things are not so much worse off. My theory is that there has been a unified front consisting of the FED, the banks, the lenders, the economists, and related market participants to hold on for 2007 no matter what. The hope was that this issue would have some kind of resolution going into 2008. There will not be. I will not go over all the specifics, we have discussed them plenty of times. The take home point is that there was a concerted effort to stem any panic during 2007. All the participants took a big breathe and held it from around May 2007 until now. They are now turning blue and on the verge of passing out. I think that January is going to see some MAJOR events in the banking and credit arena. Everyone was stalling for time, and in a way I guess I can understand that effort. Time is up soon, and things will move quickly when they do.

December Ideas
The FED is going to cut rates on the 11th. Anyone that argues otherwise is simply trying to be funny. Whether or not the cuts will accomplish anything useful is debatable, but that they will cut is not. I was kicking myself for not selling my mining shares (gold and silver) during the last run up. I think we get one more good run leading up to the FED meeting, and a little more after. I know a bunch of readers here are very long gold and silver. I will reiterate my personal position one more time: When the market turns south for real, gold and silver are going to get clobbered. On a Macro view, that makes no sense, but when does the market make any sense? Banks and governments are going to sell what they can to raise cash, and gold's store of value works against it in that way in that atmosphere. Of course I could be dead wrong, and this is not investment advice in any way. I am just sharing my thoughts on the matter.

Saturday Rock Blogging!
Dire Straits with "Sultans of Swing". That's some serious guitar work!


"The Night They Drove Old Dixie Down" from Joan Baez. Great song from a wacko lefty:


Ozzy with "Mr. Crowley". If you have ever seen an Ozzy concert, the intro organ music is amazing!:


Have a good night.