There it is. With one whole Digg!

Well done, gentlemen!!

Here we go again. Housing Bubble, Part II

Rumors are flying, although I haven't seen much on the net (yet). Apparently, there is going to be ANOTHER housing crash. I'm really not sure why few have picked up on this one yet - ok, ok, the extent of my looking for info was a Digg search. If it is not on Digg, no one knows about it.

There is another questionable mortgage product, like the ARM's that caused the first bubble crash, that is coming due for adjustment in January. I actually do not even know what this product is because the person who told me didn't want to explain it all, (He works for one of the financial institutions that is to blame for much of this, and he feels a certain sense of shame.) but it sounds like maybe the first round of inadvisable 5/1 ARM's are ready to adjust for the first time. The timing makes sense. It was about 5 years ago that the ridiculous run on real estate started, and I know that the 5/1 - the rate is locked for the first 5 years and adjusts annually after that - always looked more attractive to me then the 2/1 or straight ARM. The idea, of course, is that a 5 year fixed period gives one plenty of time to refinance into a 15 or 30 year fixed mortgage. The problem - hindsight being 20/20 - is when the mortgage market tanks and you can't refinance, or you can't afford the fixed rate because you have no job, or you are upside down on the 5/1 so no one will finance enough to cover the balance, you are screwed.

Well, the first round of people who landed in that crappy boat are now facing the adjustment of their rate. And they are still upside down and unemployed. Here we go again.

What's another trillion between bankers. And republicans. Thanks GOP, we really love getting raped by you guys.

So, about old Warren..

Mr. Buffett is now the president's transitional economic advisor, alongside a series of economic superstars. Not sure he needs all the help - just being a democrat is enough to fix the economy, according to history - but it's nice to have all those brains working on the problem. Something needs to happen fast, but that should not lead to the massive handouts some of the business community (read: car manufacturers) want.

Sorry guys, but it is time to let the auto industry in America die a merciful death. These guys have been burning up money, building sub-standard cars for how many years now? It's wonderful that the remaining employees in Detroit are able to make $75 an hour installing seat belts, but at what cost? 50 - 60 billion taxpayer dollars this round? Toyota, Honda, Hyundai all are successfully building affordable, reliable cars in America. And those folks in Kentucky, Alabama, and Tennessee are happy to take home $20-$25 an hour. It's not like the Japanese and Koreans are running sweatshops over here. They - intelligently - have their factories in places where labor is reasonable and the government isn't appointed by the union leaders. Yes, unionites I've had an assful of you guys too. I live in a right to work state and the wages suck, but people have jobs and the business community is GROWING. Take note union states. If there aren't any jobs, it really doesn't matter how much people are getting paid.

Black Friday - Let's show the retailers how Sh$tty the economy really is!!

It is the grand national celebration of capitalism, that leads to the celebration of the birth of Jesus. I won't wax too poetic about absurd this annual ritual truly is, however I will say that it is a great day to show Bush and his genius cronies what a wonderful job they have done with the national pocketbook.

Examples: Lady in line at Best Buy this morning - "I'm not going to buy anything, I'm just here to try and win some of the giveaways." She was there at 3:00AM.

Wired magazine (highly recommended to anyone living in the 21st century) "...in this recession (depression?)..."

But there is a good side to all this. If history is any guide, in 6 to 18 months the economy is going to rebound nicely. Check the history books on all the other recessions and depressions that were handed to the democrats. This one might surprise people. If you've been thinking about starting a business, this is the time to do it. Ask the truly rich. Not that idiot in a McMansion at the end of the block, I'm talking about Buffett and Gates. Do you think they are net sellers right now? Not a chance. Sure, they are liquidating crappy assets, but they are new buyers. You should be too.

More Wired "(this type of economy) is the crucible in which great companies are forged." Anybody got a good idea? Drop me a line. I'm in.

I thought Pyramid Schemes were illegal...

or does that law not apply on the internet? Is it just me or are there millions of sites promoting a get-rich-quick product that essentially just gets you to distribute the rights to distribute distributorships that allow people to distribute distributorships to other distributors. (Even if that made no sense, you get what I'm saying.) Last time I checked, MLM with no actual product is a pyramid scheme. Is that like blogging about how to make money with blogs about making money?

Ok, people. If you are going to build a business - build a business that adds value, please. I have no problem with people selling IP or ideas or digital non-physical products. I do that myself. But some of this crap is just that - crap. And if you are going into business for yourself, and you don't understand the concept of "adding value" you may want to rethink your plans.

Instead of working out ways to part people with solid entrepreneureal intentions from their seed money, why don't some of you work out ways to take that seed money and help these people compete with China or India. Our way of living is at risk. In case no one has noticed, economic growth in China is inversely proportionate to economic growth in Michigan or Ohio. China grows as the manufacturing belt of America shrinks.

I am not one of those dreamers that thinks the manufacturing industry in the US can be rebuilt to take the world by storm like it once did. I understand that there is going to be a painful period for middle-aged and near retirement age workers as the US economy retools for the future with a basis in information and innovation. Big chunks of the nation have already done this. But selling reseller rights to a sales and reseller system is really not helping anyone in the long run.

The new pres on 60 Minutes

I like this guy more by the day. College football playoffs, and he is serious about it. Finally, someone who understands how to make America a better place. But seriously, I'm glad that someone is going to take the reigns on that one. And all that other stuff he said was good too.

President-Elect Obama really did have a good outing on 60 Minutes. He sounds like he is going to work with both sides of the aisle, and he seems to have a good grasp of reality ("The American people don't want to hear lots of speeches." So true). And if history is to be our guide the economy should improve rapidly, just because he is a democrat. Yes, all you money-grubbing republicans - the economy has ALWAYS tended to suck when you guys take over. If you don't believe me, check out the interest rates under Reagan. Or which party was in power to usher in the Great Depression - and which party got us out.

Not that the world economy can get much worse. This morning on the news they reported that the price of oil FELL in response to a threat from OPEC to cut production. Ummmm....wonder if the problem is on the demand side? Ya think.

Finally, the best part or the interview, for me, was that we have actually elected someone who is capable of speaking in complete, intelligent sentences - without a teleprompter or notes. Seriously, I had a giant grin on my face for the first ten minutes of the interview, just thinking that we have a president able to communicate...presidentially. It's been a long time since old Bill was out there making Americans look bright and energetic. I'm tired of watching Alfred E. Newman make us look like whatever it is that he makes us look like.

And, on top of all that, college football will soon have a true champion.