Recession // Current

A Home Loan Named Desire

GoodB Blog

It’s official. The “save the drowning homeowner who got burned plan” aka the “Home Affordable Modification Program (HAMP)” is a Big Fat Dud.

A U.S. Congressional oversight panel reported this week that of 500,000 mortgages currently in the hopper for restructuring, only 2,000 (less than half a percent) have been permanently modified-a remarkable feat of failure only George W would envy.

The ten month old program offers lenders $1000 per year for up to three years if they modify a loan. Mortgage servicers make far more than that in late fees alone. The banks with these loans on their books must be laughing at the paltry sum in the wake of the tens of thousands of dollars they stand to make in foreclosure. Investor pools that hold mortgage securities and hide behind the servicers and banks would lose millions. In response, they slither away out of the public eye and simply ignore the Obama administration’s call to make homes “affordable.”

There is no legally binding, real financial incentive, or even official threat to participate, so why bother say lenders? Hence the U.S. “Making Home Affordable” plan is a miserable failure. It is all bark and no bite.

Why bother indeed? Lenders might step up because they want to help their fellow countrymen? Let’s just forget that. How about doing it for the sake of the housing market, the economy, the country? No thanks, lenders say.

We would have to come up with something more compelling than that to shake the snakes out from under the rocks. Perhaps some big buckeroos might do it. Short of that, real threats of withholding government aid from lending institutions might create sudden patriotic fervor. Or perhaps bank-loving policy makers should put their money where their mouth is-in the American people’s hands.

While the nation is spending billions on two wars it doesn’t want and trillions on the same folks that pulled the financial ground out from under them, $3000 to modify a mortgage seems like chump change to a lender. And folks as we know from the biggest scam ever to hit the American people-subprime mortgages and the CDO and CDS securities that hid them- banks are not chumps.

source: http://3blmedia.com/theCSRfeed/Home-Loan-Named-Desire#GoodB Blog It’s official. The “save the drowning homeowner who got burned... more

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The Forgotten Economic Depression of 1920 (yes, 1920)

Economics / Economic Depression Nov 27, 2009 - 07:46 AM
By: Thomas_E_Woods

It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones — and often deliberately so.

Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That's what Winston Churchill meant when he described the history of the Soviet Union as "unpredictable."

For this reason, we should not be surprised that our political leaders have made such transparently ideological use of the past in the wake of the financial crisis that hit the United States in late 2007. According to the endlessly repeated conventional wisdom, the Great Depression of the 1930s was the result of capitalism run riot, and only the wise interventions of progressive politicians restored prosperity.

Many of those who concede that the New Deal programs alone did not succeed in lifting the country out of depression nevertheless go on to suggest that the massive government spending during World War II is what did it.[1] (Even some nominal free marketeers make the latter claim, which hands the entire theoretical argument to supporters of fiscal stimulus.)

The connection between this version of history and the events of today is obvious enough: once again, it is claimed, wildcat capitalism has created a terrific mess, and once again, only a combination of fiscal and monetary stimulus can save us.

In order to make sure that this version of events sticks, little, if any, public mention is ever made of the depression of 1920–1921. And no wonder — that historical experience deflates the ambitions of those who promise us political solutions to the real imbalances at the heart of economic busts.

CLICK FOR FULL ARTICLE....Economics / Economic Depression Nov 27, 2009 - 07:46 AM By: Thomas_E_Woods It... more

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Hasn't this just been a whole year of Black Friday? - Real Recovery

FROM THE NEWS BLOG: http://blogs.current.com/news/2009/11/25/hasnt-this-just-been-a-whole-year-of-black-friday-real-recovery/
Image: http://www.crunchgear.com/2009/11/25/the-5-rules-of-black-friday/

The end of this week will see the venerable American holiday tradition of Black Friday, when on the day after Thanksgiving, Americans rush to consume as many retail deals as possible. And if you're serious about Black Friday, then you're probably already looking for the deals. Online there's blackfriday.info, bfads.net (that's Black Friday Ads), black-friday.net, theblackfriday.com. But honestly, with nearly a fifth of Americans out of work (according to the broadest unemployment calculation), hasn't this just been a whole year of Black Friday deal-hunting?

I spoke with Loren Bendele of Savings.com (http://savings.com) a site that focuses on bringing their community together with savings and discounts. He said their site, which started in March of 2007, has definitely seen a big increase in users because of the recession. And as more people move online to find deals in tough times, more companies are looking to find them. "We're seeing aspirational brands that are offering deals now," Bendele said. "Consumers are more aware and merchants are embracing deals."

Savings.com has selected some users to be what they call "Deal Pros" - people who know how to find the best deals and share them with the rest of the community. Some of them, said Bendele, are people that are fine with money. But as the recession has gotten worse, many of them are people who are maintaining their quality of life through saving money.

Is that you? Have you been scraping by by clipping coupons? Tell us about on The Real Recovery.

So should you rush out and try to trampled this Friday? Though there are plenty of deals to be had one of the DealPros offers some sage advice on the savings.com blog:
"For me it has become a day to stay at home or look for alternative ways to enjoy the day. Now, don't get me wrong, I love a good deal. But Black Friday has become that day that turns every mall in America into some lost scene from the movie Dawn of the Dead. It's just too much chaos to deal with in-person. So join me in giving in to the post-turkey daze and just saying no to the zombie hordes running wild through the aisles of your local Wal-Mart."FROM THE NEWS BLOG:... more