Martin Eakes Can't Bail Himself Out of His Past (Pt. 2)

Better get a bigger bucket…

Wait. CLICK HERE to check out part one of this article - before you get wet. Then see how Martin Eakes wields the obvious:

Previous actions to bail out banks have been necessary to keep the economy afloat, but essentially amounted to bailing out the water in a leaky ship. By addressing the foreclosure crisis directly, the Administration’s housing plan finally begins to plug the holes that cause the problem.

“Bailing the water from a leaky ship” is actually the best think Eakes has to say in this entire press release. The banking, automobile and Real Estate industries do not deserve bailout money if the same people are allowed to control the organizations. Their hands are dirty; they are complicit in the financial homicide. Repeat offense is what they know, and America can’t afford such a body count any longer.

Turn the tide now

It’s time to change the entire system, says Eakes:

With this plan in place, there will be more options and incentives for servicers and investors to avoid foreclosures that don’t need to happen. That will help families at risk, and it also will help the entire economy by stabilizing the housing market and preventing billions of dollars in spillover effects that occur when the market is weak.

OK, I agree with this as well. The tide of foreclosures must be turned back. Lenders must escape lunar gravity and the laws of mortgage lending physics must change if this country is to survive. This may mean that less people qualify for home loans, but that will open up a need for more low-cost housing that President Obama’s “New Deal” organizational ideas will have to address. But first, please do address the conclusion of this article; CLICK HERE. ... click here to read the rest of the article titled "Martin Eakes Can't Bail Himself Out of His Past (Pt. 2)"

Financial advice from Warren Budget: Even he lost money in 2008

Even Warren Buffet had a bad 2008

It wasn't only you. Master investor Warren Buffett had a bad 2008 too. However, he has the wherewithal to remain a buyer of shares, and says the economic disarray gives him a tailwind.

Warren’s annual letter

In his eagerly awaited annual letter to investors, Warren Buffett revealed that the value of his company, Berkshire Hathaway, fell by 9.6%, the worst performance in Buffett's 44 years at the helm.

However, everything is relative. Berkshire’s 9.6% fall compares favorably with the 37% fall in the index.

The shambles

It's a shambles, alright. When the 78-year old Buffett says there was "A freefall in business activity…accelerating at a pace that I have never before witnessed" you know things are bad and unprecedented. And things aren't going to get better anytime soon. Buffett says "…the economy will be a shambles throughout 2009 – and for that matter, probably well beyond…"

The optimist

Buffett remains an optimist. He says the U.S. has faced many challenges in the past -  the Great Depression with unemployment as high as 25%, two great wars and virulent inflation that led to a 21% interest rate in 1980.

Unemployment is around 7% and will rise to 10%, base interest rates are effectively zero and a massive government stimulus package is on the way. Buffett says, "America's best days lie ahead."

Buffett makes mistakes too

Buffett admits his failures and lists them in his letter. He also admits to not anticipating the dramatic fall in oil and energy prices that occurred in the last half of the year. He says, "…the terrible timing of my purchases has cost Berkshire several billion dollars." ... click here to read the rest of the article titled "Financial advice from Warren Budget: Even he lost money in 2008"

Citigroup Program Helps Unemployed Homeowners

Bank temporarily reduces payments

Citigroup Inc. has stepped up to the plate when it comes to helping out people who are joining an ever-larger category: the unemployed.

The bank has started the Homeowner Unemployment Assist program, which allows unemployed mortgage holders who are late on their personal loans to make payments of (on average) $500 monthly for three months.

A little help

Granted, it’s pretty unrealistic to think that in this job market unemployed workers will find new employment in three months. But it’s a start.

Thousands may be eligible for the program, which is aimed at avoiding more home foreclosures.

Borrowers with first mortgages whose loans are owned and serviced by CitiMortgage and who meet certain other criteria will be eligible to participate in the program, according to CNN Money.

After a job search well done

If mortgage holders taking advantage of the program do find employment during the three-month period, they can resume their original monthly payments or get a long-term loan modification.

This makes perfect sense to me, as many “re-employed” workers are accepting pay that is far lower than their previous jobs. Borrowers will be able to retool their loans to fit their new circumstances.

A gray area

Citibank is apparently aware that many customers will not be able to find employment during the three-month stint.  A company spokesperson has said that its customers will not be left hanging in the event their situation does not improve. ... click here to read the rest of the article titled "Citigroup Program Helps Unemployed Homeowners"

Simple Prosperity on Enjoying The Present

Another quote I like from the book Simple Prosperity:

“The modern mind,” writes Wendell Berry, “longs for the Future as the medieval mind longed for Heaven.” Berry argues that we’ve been conned into believing that the present is something we need to escape because it’s just not good enough. We can’t be here now because we don’t yet have enough money, enough gadgets, or a large enough house. We’re not yet powerful enough or “happy” enough to live in the present. The truth is, if we’re satisfied with what we have in the present, we’re less likely to be obedient consumers, so the supply-side of the economy has invested trillions to engineer dissatisfaction into our shell-shocked psyches. Leisure, love, and laughter can be best had in the future, we begin to believe, but we can’t put our fingers on where that disturbing idea came from.

Am I satisfied with the present? No, because I still have to wake up and work every day. But I also make it a point to do activities that I love every day as well so I’m not just looking forward all the time. I’m still working on goals, but now a big part of that is figuring out what is “enough”.

Read more about Simple Prosperity on Enjoying The Present…

New Government Program Offers Loans to Individuals, Businesses

Fed plans to profit from loans

Well, it seems the feds are so fed up with the lending world, they’ve decided to take matters into their own hands.

The Federal Reserve and the U.S. Treasury have started a new program through which consumers and businesses can take out loans directly from them.

Know your acronyms

The program is called the Term Asset-Backed Securities Loan Facility, otherwise known as TALF.

Through TALF, people can borrow money based on ABS (asset backed securities). That means they can get business loans or personal loans backed by consumer loans, auto loans, student loans, credit-card receivables or small-business loans.

Not a new idea

This program was first announced in November, but it was delayed. Now, owners of ABS can apply for loans starting March 17. The first TALF loans will be issued March 25.

Making a mint

The program could provide up to $1 trillion in loans for consumers and small businesses. It is designed to make a profit through interest and fees.
The plan is to stimulate the economy without relying on traditional credit channels, which are now blocked up, the government said.

A reluctant industry

Banks are unable or unwilling to lend, and even customers with high credit scores are finding credit hard to obtain.

“Issuance of consumer ABS has remained near zero since October,” the Treasury said, adding that the stress in the market for extending credit to consumers “is one of the causes of the deepening recession.” ... click here to read the rest of the article titled "New Government Program Offers Loans to Individuals, Businesses"

Prepare for a Natural Disaster or Emergency with Food Storage

Why Save Food?

Today, especially in these tough economic times, it is common for people to put aside some money in case of an emergency.  Why then, do we not save food as well?  It makes sense to save money because we believe that money will buy us everything we need.  What are we to do when we have the money but there is no food for us to buy?  This is why I propose everybody should begin to prepare a food storage.

Tambora 1915

In 1815 Mount Tambora, a large volcano in Indonesia erupted.  It was the largest volcanic eruption in recorded history; it left more than 92,000 dead.  The ash and debris went into the atmosphere causing an overall cooling of the earth.  Temperatures were lowered as much as 3°C.  The change in temperature created "The Year Without a Summer."

In 1816, the temperature of the earth changed the growing seasons making it nearly impossible for anybody to grow crops.  This caused a yearlong famine that made it difficult for people to find food.  Many people ended up moving to different places because their crops weren't growing because of the all year frosts.  Had these people had a food storage, they would have been able to go that year without their crops.  They also would have been able to provide food for the other people in their area.  Food storage will be there when money can no longer buy what is needed.

Yellowstone

Yellowstone National Park has a volcano that could erupt at any time.  If this volcano were to erupt, it would be disastrous in North America and could affect the entire earth.  The effects of the Carbon Dioxide in the atmosphere might have the same effect that the eruption of Mount Tambora had in 1815.  If this were to happen, it would be essential to have a food storage.  Those who have prepared for this event might have food storage saved that they could use to help themselves as well as the people in their community to survive another year of little crop success.  Adequate food storage could save hundreds of people’s lives. ... click here to read the rest of the article titled "Prepare for a Natural Disaster or Emergency with Food Storage"

Tax Refund Loans: Too Expensive During a Depression

Tax refund loans: wrong product, wrong time

We could all use a little bit more money these days. The fact that America is in an economic depression has done nothing but accelerate this need. With tax time upon us, many people are dreaming about what they’ll do with their tax refund, if they’re owed one. Unfortunately, some want their refund even faster than direct deposit can deliver. They go after expensive tax refund loans.

David Ellison of the Houston Chronicle reports that these tax refund loans, also known as refund anticipation loans (RAL), are too much to pay. Since electronic filing with the IRS and direct deposit can have the money in your bank account within 8-15 days, why do people find it necessary to resort to RALs?

Not because RALs are cheap, that’s for sure

Depending upon who does your taxes, taking out an RAL could cost you anywhere from 50 to 500 in APR. According to Ellison, since the bulk of people who take RALs are of low- to moderate-income, the steep fees become even more problematic.

“We like to see either that they are banned or the fees reduced,” said Chi Chi Wu, staff attorney with the National Consumer Law Center. “Really, banning them will probably be safer.”

Banning RALs is seen as a tall order, particularly since the IRS doesn’t seem to want to get involved. They say it is “a financial arrangement between a taxpayer, the tax preparer and the financial institution.” A 36 percent APR cap is a more viable option proposed by many. ... click here to read the rest of the article titled "Tax Refund Loans: Too Expensive During a Depression"