New home subsidy unlikely to get through Congress
Real Estate News & Commentary by Chris McLaughlin, June 15, 2009
http://www.shortsalesriches.com
“2 Careers That Boom in a Recession!”
I’ll tell you about one of these for fr*ee
in my no-charge, no-cost, no-obligation
webinar right here live Tuesday night at
8:30 PM ET, 5:30 PM PST:
https://www2.gotomeeting.com/register/241450043
Why would I do that for no charge? Because
I want a chance to tell you about the other
high-income opportunity, too.
And I can’t do it in an email.
But if you’re finally ready to blast out of
this economic mess, then get a move on… I’d
hate for you to miss out, because we always fill
up a day or so early. See if there’re any spots left:
https://www2.gotomeeting.com/register/241450043
New home subsidy unlikely to get through Congress
The Obama administration introduced an $8000 tax credit for first-time homebuyers in February in order to stimulate the housing market. Some believe the government should do more and offer incentives to all homebuyers. Johnny Isakson, a Republican Senator, has submitted a proposal to offer all buyers a $15,000 tax credit for home purchases. Isakson said the rising number of foreclosures “is continuing to precipitate a downward spiral in values, loss of equity by the American people and a protracted, difficult economic time.” Analysts believe that the proposal may not find favor with Congress.
“There is bailout burnout across the country,” said Brian Gardner, senior vice president at Keefe, Bruyette & Woods. “There’s an argument for the stimulus, but the possibility of the bill passing is unclear,” said Gardner. The proposal will cost the government $30 billion. Jaret Seiberg, a policy analyst for Concept Capital’s Washington Research Group, said that “in an era of record deficits, it will be hard for lawmakers to accept that cost.” The National Association of Realtors and National Association of Homebuilders have welcomed the bill since they expect the proposal to eliminate oversupply of homes and stabilize the property market.
Consumer optimism rises to a 9-month high
The Reuters/University of Michigan Surveys of Consumers are monthly surveys of consumer attitudes and expectations about the U.S. economy. They provide a gauge of consumer anticipation of changes in the economic environment. According to the latest survey results, the index of consumer confidence rose to 69 in June from a reading of 68.7 in May. The consumer sentiment, measured by the survey, is at its highest since last September when the Lehman Brothers collapse happened. “Job and income uncertainty, however, remained high and constitute a significant barrier for completing planned purchases,” said the Surveys of Consumers in its report. The economic recovery was thought to be weaker than originally anticipated, leading consumers to expect a longer period of time before the recovery gets underway.” Survey participants, however, expressed concern about inflation, and consequently their one-year inflation expectations rose to 3.1% in June, the highest since October 2008.
Obama administration to roll out financial reforms
In order to prevent the economic crisis from happening again, the Obama administration, this week, is set to unveil financial reforms which are likely to have a far-reaching impact on the markets. The plan shall see a shifting of power among the different regulatory authorities. According to an article published in The Washington Post, U.S. Treasury Secretary Timothy Geithner and National Economic Council Chairman Lawrence Summers said the reforms would offer “a stronger framework for consumer and investor protection.”
Experts believe that the current regulatory structure is not suited to regulating a market full of complex instruments such as derivatives the value of which runs into trillions of dollars. The proposal is expected to raise “capital and liquidity requirements for all institutions, with more stringent requirements for the largest and most interconnected firms.” The proposal will also call for a reduced reliance on credit-rating agencies. The article said the United States “will lead the effort to improve regulation and supervision around the world.”
Proposal to cut federal health spending
Fixing the health care system is among the biggest aims of President Obama. The federal medical programs, Medicare and Medicaid, which cover millions of elderly and low-income Americans are in danger of going broke and Obama is keen on reducing costs to keep the programs afloat. Last week Obama proposed cutting $313 billion from the programs in addition to the $635 billion “down payment” by way of tax increases and spending cuts he announced earlier. The proposal is aimed at slowing the rising cost of healthcare. “The status quo is unacceptable,” said Obama. “America spends nearly 50 percent more per person on health care than any other country.” Obama’s budget director, Peter Orszag, justified the reductions because “health care delivery is becoming more efficient.”
Experts believe that the government may evaluate introducing price controls for drugs in order to reduce the cost of health care, but will face resistance from drug makers. Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, said, “We remain committed to working with the administration and Congress to help enact comprehensive health care reform this year. A lot of work remains to be done, but we will continue to share ideas and seek solutions.”
Pricing TARP warrants
As part of receiving funding under the Troubled Asset Relief Program (TARP), banks issued warrants to the government. With many of the banks wanting to repay TARP funds, the pricing of warrants has become a point of debate. Lawmakers say that Treasury should aim to give taxpayers a fair return on the bailout funds and the warrants should be priced accordingly. “We are in the process of going through a judgment about what fair market value for those warrants is likely to be,” Treasury Secretary Timothy Geithner said last week. “Some of the estimates now are in the several billion dollar range for those initial banks that are repaying.” Banks are arguing for a discount on the warrants after having paid billions of dollars in dividends to the government. “We will be working with the government on the timing and valuation of all payments,” said Ron Gruendl, a spokesman for Bank of New York Mellon.
Now on to our real estate investor education section…
Basic Blind Spots Every Investor Needs to Know
When it comes to investing in short sales or stocks, every investor needs to know and understand how these basic blind spots impact their own though process. Fail to recognize this tendency and you are likely to find yourself justifying foolish mistakes while simultaneously discounting tremendous opportunities. Learn how to eradicate blind spots in your own investment portfolio and take advantage of great short sale opportunities by recognizing these six basic blind spots:
Allow Stories Rather Than Statistics to Chart Your Course. Case studies and individual accounts of success are one thing but inspiration doesn’t take the place of firm facts. Learn to love statistics and get a grip on the numbers to know where you stand before, during and after every deal. Remember, you make money in real estate (and every other investment) by buying right – not just during the sale. Leave the stories for a bit of inspiration and motivation but perform your own due diligence. When it comes to the numbers, every situation is different. Some short sale buyers have plenty of wiggle room that can carry them to safety should a marginal deal go bad while others need a sure-fire success the first few times out. Don’t buy into the hype – instead, stick to the statistics and allow the numbers to be your friend.
Seek to Confirm Rather than Challenge Ideas. It’s one of the most elusive tendencies known to mankind yet a tough one to battle; most people unknowingly surround themselves with people that tend to see the world in much the same way that we do. Likewise, even when it comes to business, the threat is the same; surrounding yourself with investors that confirm rather than challenge your ideas and strategy. This is one reason it’s important to have mentors or professional expert advice; the sheer volume of exposure to various situations allows a fresh perspective that you may not have arrived to on your own. In any investment, seek out those that are able to challenge the status quo rather than simply confirm what you already know; while the one may be comfortable, it’s unlikely to lead to the growth required to reach new investment heights.
Misunderstanding Chance or Fate. Do you make your own future or simply wait for it to happen? Most investors believe fate is what you make out of although a little luck certainly doesn’t hurt now and then. Of course, despite a lot of feel good approaches that claim to teach people how to take control of their own destiny and manipulate the outcome of “fate” itself, the fact is much more simple; sometimes little things can lead to big change if you allow it to do so. Train yourself to keep your eyes and ears open to possibilities in life and you will often notice a willingness and ability by others to help.
Personal Bias. Baggage – everyone has some of their own but when you allow it to interfere with investment decisions it can lead to big misperceptions and bad outcomes. Misperceiving the world around us is something everyone does now and then; whether you encounter a communication problem with a broker or potential seller or simply allow your own like or dislike to cloud your judgment about a particular property, chances are your own personal bias has influenced how you perceive the world and the opportunity. Minimize this risk by implementing a system that you follow each and every time. A system provides a standard measure of evaluating a given opportunity with a set response to get the job done.
See you at the top!
Chris McLaughlin
http://www.shortsalesriches.com
PS:
“2 Careers That Boom in a Recession!”
I’ll tell you about one of these for fr*ee
in my no-charge, no-cost, no-obligation
webinar right here live Tuesday night at
8:30 PM ET, 5:30 PM PST:
https://www2.gotomeeting.com/register/241450043
Why would I do that for no charge? Because
I want a chance to tell you about the other
high-income opportunity, too.
And I can’t do it in an email.
But if you’re finally ready to blast out of
this economic mess, then get a move on… I’d
hate for you to miss out, because we always fill
up a day or so early. See if there’re any spots left:
https://www2.gotomeeting.com/register/241450043
Copyright Loss Mitigation Institute 2009.
All Rights Reserved.
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About the author:
Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.
* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting nearly
450 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* On twitter: http://twitter.com/mclaughlinchris
* On facebook:
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