Obama Deal with Family A, B, & C--interesting article...
Posted: February 19th, 2009, 4:24 am
Link to Mike Morgan's article:
http://realestateandhousing2.blogspot.c ... and-c.html
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Article: (For those who do not want to follow the link) It is a bit long, but I think you will enjoy it, once you get get started reading it:
Light years away from the circus in Washington there is a land called “reality.” Not “Reality TV,” but real reality. Below is my attempt to demonstrate why Obama’s latest plan will not work. In fact, there are no less than 10 versions of the fart he floated out to the world on Thursday.
In all due respect, nothing will work . . . with the one exception of a huge transfer of wealth. That transfer will happen . . . or we will destroy the planet. The transfer should start with guys like King Henry and Lord Blankenfein. Add to that list Angelo Mozilla, Wilbur Ross and thousands of others that have profited immensely from fraudulent and misleading deals that are now coming to roost.
In any event, we will never go after these men. In fact, we allow them to continue to rape the system. Below is a disgusting taste of reality.
Family A – Husband and wife with 13 and 19 year old children. On in high school and one in college. Husband and wife recently lost their jobs. He was employed as a mortgage broker and she was a manager for a builder. They went from a combined income of $350,000 to zero.
When they were both employed, they took several expensive vacations each year, ate out at fine restaurants three times a week and they bought a boat, two jet skis, two snowmobiles, two motorcycles and an RV. The 19 year old has a brand new car that Mommy and Daddy bought her. It’s a $40,000 Lexus. Dad drives a Mercedes 500 and Mom drives a Jag. Junior at 13 has an allowance of $50 a week. Missy, in college, lasted one night as a waitress before she called Daddy to cry about a busted fingernail. Daddy got upset and called the restaurant manager. The Daddy called Missy and told her to just calm down, take a Valium and relax . . . she didn’t have to work, and Daddy would still send her $200 a week for her expenses.
Her expenses . . . $50 a week for her nails, $100 a month for her hair and clothes. No . . . strike that. She has a credit card for her shopping . . . and Mommy pays that bill.
Family A has NO savings. They used their house as a revolving ATM machine. The house was worth $700,000 at the peak, on which they have $650,000 in ARM mortgages and equity lines. Now the house is worth $400,000. Oh by the way, they had $45,000 in credit card debt when they lost their jobs. Now they have $125,000 in credit card debt and the interest rate on all of their cards is 29.99%, so interest alone is now $3,125 a month.
Family A has not paid their mortgage in six months. Mr. A has been looking for a job, but he has turned down five jobs because they only paid half of what he was earning. He wants $250,000 a year, and his best offer was $125,000. Mrs. A got her real estate license and is selling real estate. Did I say selling? Silly me. She spent $4,000 to get her license and $12,000 on new clothes and $2,500 on accessories and office stuff. But she is not selling. In fact, she spends most of her time at Open House get-togethers with other agents and lunches with the girls.
Mr. and Mrs. A are also collecting unemployment benefits.
Family B – Same as Family A - Husband and wife with 13 and 19 year old children. On in high school and one in college.
Mr. B has held the same job as a manager at a local hotel for 18 years. He earns $67,000. Mrs. B is an ER nurse and earns $72,000 a year. Instead of golfing on Saturdays, Mr. B also works Saturdays as a cook in a local restaurant at $18 to earn a few extra bucks so they can pay their mortgage.
Family B has one car. It is a seven year old Chevy. Family B’s last vacation was a week at the Jersey Shore where they stayed at a relative’s house. Family B does NOT own a boat, nor any jet skis, nor any snowmobiles and they don’t own an RV. They eat out once a month at Denny’s. They shop at Sam’s Club. Junior has a $10 a week allowance and he earns another $30 a week doing chores. Missy works two jobs while attending a community college.
Family B saves money and has about $200,000 in bank accounts saved by cutting corners for 20 years. Family B bought a $250,000 house a few years ago and it is now worth $180,000. Family B put down 30% on their home so they are at about break even on equity in the home. Family B has NO credit card debt.
How It Works – Obama proposes to take Family B’s savings and hard earned money to reward Family A for living above their means with no sense of responsibility. Obama is going to yank the rug on Family B’s future so Family A can continue to live above their means . . . and Obama is going to tell Family B to work harder so they can pay more taxes, so Obama can give more money to Family A.
Naturally, I have simplified the examples and there are millions of hard working Family B families that have lost their jobs and are stuck in homes that are underwater. But how does Obama plan on deciding who gets what and why? But that’s not all. Obama is planning on telling the people that loaned Family A money . . . that they are not going to get paid what they are entitled to, but Obama is going to come up with a new interest rate and . . . . AND Obama is going to reduce the principal due or extend the life of the loan or change the terms anyway he so pleases.
Now do you get it? Not yet. One more example.
Family C - Husband and wife with 13 and 19 year old children. One in high school and one working full time because the family can’t afford to send her to college. Missy works at minimum wage in a local fast food restaurant.
Husband and wife recently lost their jobs. He spent 18 years at the same job as a mechanic. She spent 18 year at the same job as line person at a furniture manufacturer that went out of business. Instead of collecting unemployment, Mr. and Mrs. C work for $8 an hour.
Family C does NOT own a car. They use mass transportation. They do not own a house. They have been renting all of their lives because they never earned enough to save. And their kids get no allowance. Family C has no health insurance and Junior has severe autism requiring medication and special food that Family C cannot afford.
Family C is behind on their rent and were just evicted. Mr. C lives in a men’s shelter and Mrs. C lives in another shelter. Mr. & Mrs. C still go to work everyday and are trying to save enough to rent another apartment.
ObamaRamaLama – Family C . . . too bad, because you get zip. Since you don’t own a home and you didn’t go out and get a zero down mortgage with no payments for the first year . . . that reset in year three with a whopper of a payment . . . you get zip. Tough love. Go live on the street. Eat dog poop and die. Sounds harsh?
That is exactly what Obama is proposing. ObamaRamaLama is going to reward the irresponsible, spoiled brats of the world, while the most in need will suffer even more than they have.
And folks . . . if you think that is not a recipe for violence . . . think again. In fact, there are millions of families in far worse shape than Family C. And there are millions of illegal immigrants out of work and not counted. And there are more violent gangs today, than ever in the history of this country. These gangs are growing more than any other demographic group in the world.
5Gs – God, grub, guns, gold and grape juice.
Investment Update – Very briefly. We just recommended more gold and added a group of mining stocks. Things are unraveling faster than I anticipated. We will profit on our short positions and PUTs. With these profits, I want you all to consider where you are at financially and what you need.
This will be a critical weekend. The foreign markets will have two trading days in front of us. I am going to carefully watch China. If we do not see enough movement down, we will exit our FXP position. If things do not begin to adjust to reality, I want to be out for the next 2-3 months. If we do get out of FXP, we will actually look to get back in as the weather improves. It is not easy to demonstrate and rally when it is freezing cold outside. So if the markets do not start to recognize the tidal wave on the horizon, we will move to higher ground for a bit, and the re-enter in 2-3 months.
If we see a hard spike down this week, we will be adding to cash and gold . . . because there will be market rallies. Obama might just promise something we cannot even dream of. Who would have though King Henry could get away with everything he did? Obama is just getting fired up . . . and he is more clueless than a rock covered in bird poop . . . unless he is sly as a fox with rabies. Then again, a fox with rabies is not sly . . . just wild, crazed and capable of anything.
Posted by Mike Morgan, J.D., RIA
http://realestateandhousing2.blogspot.c ... and-c.html
_____________________________________________________________
Article: (For those who do not want to follow the link) It is a bit long, but I think you will enjoy it, once you get get started reading it:
Light years away from the circus in Washington there is a land called “reality.” Not “Reality TV,” but real reality. Below is my attempt to demonstrate why Obama’s latest plan will not work. In fact, there are no less than 10 versions of the fart he floated out to the world on Thursday.
In all due respect, nothing will work . . . with the one exception of a huge transfer of wealth. That transfer will happen . . . or we will destroy the planet. The transfer should start with guys like King Henry and Lord Blankenfein. Add to that list Angelo Mozilla, Wilbur Ross and thousands of others that have profited immensely from fraudulent and misleading deals that are now coming to roost.
In any event, we will never go after these men. In fact, we allow them to continue to rape the system. Below is a disgusting taste of reality.
Family A – Husband and wife with 13 and 19 year old children. On in high school and one in college. Husband and wife recently lost their jobs. He was employed as a mortgage broker and she was a manager for a builder. They went from a combined income of $350,000 to zero.
When they were both employed, they took several expensive vacations each year, ate out at fine restaurants three times a week and they bought a boat, two jet skis, two snowmobiles, two motorcycles and an RV. The 19 year old has a brand new car that Mommy and Daddy bought her. It’s a $40,000 Lexus. Dad drives a Mercedes 500 and Mom drives a Jag. Junior at 13 has an allowance of $50 a week. Missy, in college, lasted one night as a waitress before she called Daddy to cry about a busted fingernail. Daddy got upset and called the restaurant manager. The Daddy called Missy and told her to just calm down, take a Valium and relax . . . she didn’t have to work, and Daddy would still send her $200 a week for her expenses.
Her expenses . . . $50 a week for her nails, $100 a month for her hair and clothes. No . . . strike that. She has a credit card for her shopping . . . and Mommy pays that bill.
Family A has NO savings. They used their house as a revolving ATM machine. The house was worth $700,000 at the peak, on which they have $650,000 in ARM mortgages and equity lines. Now the house is worth $400,000. Oh by the way, they had $45,000 in credit card debt when they lost their jobs. Now they have $125,000 in credit card debt and the interest rate on all of their cards is 29.99%, so interest alone is now $3,125 a month.
Family A has not paid their mortgage in six months. Mr. A has been looking for a job, but he has turned down five jobs because they only paid half of what he was earning. He wants $250,000 a year, and his best offer was $125,000. Mrs. A got her real estate license and is selling real estate. Did I say selling? Silly me. She spent $4,000 to get her license and $12,000 on new clothes and $2,500 on accessories and office stuff. But she is not selling. In fact, she spends most of her time at Open House get-togethers with other agents and lunches with the girls.
Mr. and Mrs. A are also collecting unemployment benefits.
Family B – Same as Family A - Husband and wife with 13 and 19 year old children. On in high school and one in college.
Mr. B has held the same job as a manager at a local hotel for 18 years. He earns $67,000. Mrs. B is an ER nurse and earns $72,000 a year. Instead of golfing on Saturdays, Mr. B also works Saturdays as a cook in a local restaurant at $18 to earn a few extra bucks so they can pay their mortgage.
Family B has one car. It is a seven year old Chevy. Family B’s last vacation was a week at the Jersey Shore where they stayed at a relative’s house. Family B does NOT own a boat, nor any jet skis, nor any snowmobiles and they don’t own an RV. They eat out once a month at Denny’s. They shop at Sam’s Club. Junior has a $10 a week allowance and he earns another $30 a week doing chores. Missy works two jobs while attending a community college.
Family B saves money and has about $200,000 in bank accounts saved by cutting corners for 20 years. Family B bought a $250,000 house a few years ago and it is now worth $180,000. Family B put down 30% on their home so they are at about break even on equity in the home. Family B has NO credit card debt.
How It Works – Obama proposes to take Family B’s savings and hard earned money to reward Family A for living above their means with no sense of responsibility. Obama is going to yank the rug on Family B’s future so Family A can continue to live above their means . . . and Obama is going to tell Family B to work harder so they can pay more taxes, so Obama can give more money to Family A.
Naturally, I have simplified the examples and there are millions of hard working Family B families that have lost their jobs and are stuck in homes that are underwater. But how does Obama plan on deciding who gets what and why? But that’s not all. Obama is planning on telling the people that loaned Family A money . . . that they are not going to get paid what they are entitled to, but Obama is going to come up with a new interest rate and . . . . AND Obama is going to reduce the principal due or extend the life of the loan or change the terms anyway he so pleases.
Now do you get it? Not yet. One more example.
Family C - Husband and wife with 13 and 19 year old children. One in high school and one working full time because the family can’t afford to send her to college. Missy works at minimum wage in a local fast food restaurant.
Husband and wife recently lost their jobs. He spent 18 years at the same job as a mechanic. She spent 18 year at the same job as line person at a furniture manufacturer that went out of business. Instead of collecting unemployment, Mr. and Mrs. C work for $8 an hour.
Family C does NOT own a car. They use mass transportation. They do not own a house. They have been renting all of their lives because they never earned enough to save. And their kids get no allowance. Family C has no health insurance and Junior has severe autism requiring medication and special food that Family C cannot afford.
Family C is behind on their rent and were just evicted. Mr. C lives in a men’s shelter and Mrs. C lives in another shelter. Mr. & Mrs. C still go to work everyday and are trying to save enough to rent another apartment.
ObamaRamaLama – Family C . . . too bad, because you get zip. Since you don’t own a home and you didn’t go out and get a zero down mortgage with no payments for the first year . . . that reset in year three with a whopper of a payment . . . you get zip. Tough love. Go live on the street. Eat dog poop and die. Sounds harsh?
That is exactly what Obama is proposing. ObamaRamaLama is going to reward the irresponsible, spoiled brats of the world, while the most in need will suffer even more than they have.
And folks . . . if you think that is not a recipe for violence . . . think again. In fact, there are millions of families in far worse shape than Family C. And there are millions of illegal immigrants out of work and not counted. And there are more violent gangs today, than ever in the history of this country. These gangs are growing more than any other demographic group in the world.
5Gs – God, grub, guns, gold and grape juice.
Investment Update – Very briefly. We just recommended more gold and added a group of mining stocks. Things are unraveling faster than I anticipated. We will profit on our short positions and PUTs. With these profits, I want you all to consider where you are at financially and what you need.
This will be a critical weekend. The foreign markets will have two trading days in front of us. I am going to carefully watch China. If we do not see enough movement down, we will exit our FXP position. If things do not begin to adjust to reality, I want to be out for the next 2-3 months. If we do get out of FXP, we will actually look to get back in as the weather improves. It is not easy to demonstrate and rally when it is freezing cold outside. So if the markets do not start to recognize the tidal wave on the horizon, we will move to higher ground for a bit, and the re-enter in 2-3 months.
If we see a hard spike down this week, we will be adding to cash and gold . . . because there will be market rallies. Obama might just promise something we cannot even dream of. Who would have though King Henry could get away with everything he did? Obama is just getting fired up . . . and he is more clueless than a rock covered in bird poop . . . unless he is sly as a fox with rabies. Then again, a fox with rabies is not sly . . . just wild, crazed and capable of anything.
Posted by Mike Morgan, J.D., RIA