With all of the ongoing changes in the system today I find it odd on how many people want to speak about a birth certificate and not the real facts about what is really happening. Personally I was disappointed that the president said he was amused at times because he refused to release his birth certificate. Clearly he did not handle that well but so be it. The bigger issue here is how the new Federal guideline changes and Loan Officer Compensation changes is setting up to be the largest money grab by our Government ever in our country’s history and people see it as a great thing. Is there some kind of new math at work here? Let’s break this down;
HVCC – the “Home Value Code of Conduct” is a huge change to the process of a residential appraisal. The idea is principle is a good idea but the method at with the HVCC process has been implemented allows for no accountability for appraisers. For example I personally had to charge a borrower additional fees for lock extensions because the appraiser went on personal leave and we had to wait for the appraiser to return so get a simple correction done which was the appraiser mistake to begin with. How can this be since we now have to use a middle man or HVCC management company? Well it be! Best of all this management company has to be paid for their services to which on average has raised the cost on an appraisal $150. Isn’t that great? And it was all done to benefit the consumer or at least the Fed’s would like you to think so.
Mortgage rates will soon rise to near double digits most likely by the end of year. QE2 is set to expire in June which in some ways is a good thing as it will stabilize gasoline prices. Yes gas prices at the pump for the consumer or you and I. Putting people on a wild goose chase to find out why gas prices are so high is unbelievable. High school economics showed us how devaluing the dollar will cause the cost of all imported products to go up. Anyone that has been to Mexico knows that the Dollar has great buying power when compared to the Pesos. Well that buying power has been diminished a bit over the past few years and continues to be reduced. So how can this be? Well simple so I will break this down for my good friend Vic. “World Market Prices” are what we are dealing with so let’s think past your locate favorite store.
International Trade is far past my friend Vic’s understanding I am sure so let’s break it down. For example Oil – the cost of Oil has remained fairly stable over the past few years from the “International Trade Prices.” What has changed is the value of the dollar. So it takes more Dollars to buy the same Oil. The more money that the Fed’s print, create or however the Fed’s chose to create additional money hurts us all. Soon there will be huge inflation bank on it! The question is when will it come. Currently the devaluing of the Dollar is hurting everything from Gas Prices to Home Values, imagine that!
You have all heard me refer to Vic and I use his comments from time to time to point out the misinformed opinions that some people seem to share. Vic’s latest comment is on Oil Companies recent profits. OK let’s break this down, all long term profitable companies have a solid business plan and for the most part it works well. All businesses have highs and lows when they are connected to variable multipliers such as the Stock Market, a local professional team getting to the playoffs or even tourism. If any of these multipliers are up then their businesses will enjoy additional profits. So why is this? It is because they have a fixed profit margin. So your business bulk buys its raw materials and then sells them to their clients at fair market price. The fair market price is just that “what the market will bear.” Just like we all shop at Costco, Wal-Mart or wherever these stores have shown huge growth due to fixed margins and strong sells. This is good business.
In the case of the Oil Companies the speculators pushed up the cost of oil a few years ago and that caused a huge run up at the pump. Many of these speculators lost huge amounts of money when the prices came down. Today is much different as the cost of oil remains steady yet our dollar continues to lose its international value. Many American have fought hard to make the Dollar strong but yet is continues to lose value. We can all continue to say it is not my fault and blame others but the Dollar is America’s money. It does not see color, race, religion or sex. It only knows that when it is not used correctly it loses value. There are those that want to blame Bush for everything and yes he deserves his share of blame. With that said the situation is much worse today than when Bush left so who has to wear the blame today? Just like the quarterback of a team Obama is our President like it or not it is Obama’s to wear and so what? It is time to move on.
Soon we will begin to hear how Firemen, Policemen and Teachers will have to take pay cuts and they will be on strike. Protesting is fine but when we are all having to tighten up is it fair to the rest of us? We have to seriously look at pension funds as they are not possible to fund in the current structure. Yes people worked thinking they would get their pension funds I get it. It is time to get serious and understand that even pension funds have to be given a break as those who draw from them today draw far more out than they put in and simple math tells us that does not work. Even Vic should agree with that. Today we spend more money on Teacher Pension Funds than we do on students. Are we serious about education? It just seems like we are focused on a birth certificate issue and missing the big picture. You decide.