The Case For Refinancing (For The Banks Too)

It would be great if the housing market could find a spark. What is out there that can move the market?

Time To Release The Refinancing Hounds

Could refinancing be the spark needed to get the housing market and the general economy moving again? The case for this has to be made. Here are some reasons why in the medium to long term, it should help everyone involved in the cycle:

-          Homeowners – There are many homeowners that have proven their worth by still paying on mortgages.

-          Businesses – Everything connected to housing would benefit from this type of move. Builders would see more activity. Local governments could start seeing higher tax revenue. Families could start living in their own homes.   

-          Banks – Most homeowners have shown that even though they will not be able to refinance their loans, they have not walked out on them.  The ones that couldn’t are already out of the system. The banks should take advantage of this loyalty. The amount of money received right away from the fees will at this point outweigh the loss of revenue over the next 25 years. Some banks that are not as tied to trading for profits as others could use this to boost current period revenue.

The How To Plan

-          First, target all homeowners that are consistent with their payments and are within a certain percentage (maybe 2-5) of the current requirements for refinancing.

-          Offer them a standard refi program with a penalty fee worth the thirty year Net Present Value of the reduced value of the home. 

-          Another option is to attach an annual fee to the mortgage if the Net Present Value of the reduced value is too high.   

Investor vs. Labor

There is a big elephant in the economic room right now. It is the topic of finding a good return for investors while demanding a livable wage for workers. Finding a general middle ground on this issue is going to be paramount if the global economy is going to run smoothly. One optimistic view is that there are many in the global economy that are on both sides of the issue. It is this group that are both workers and are also investors that can lead the economy into both a prosperous and livable wage earning future.

Future posts will focus on how different entities are affecting this process. They include corporations, labor groups, lobbyists for both corporations and labor groups, the financial industry, government, and retirement plans. If there are any other groups not mentioned in this post or future posts, please feel free to comment.

This thread hopefully will get the conversation moving in a direction that allows for a decent return on investments as well as a livable wage for all who participate in this economy.  

Moving forward economically one step at a time post 1

This is the beginning post to a series covering the topic of how to move this country's economy forward. Smaller sub-topics such as levels of corporate profits, war budgets, government budgets, consumer spending, and comparing the actions of this generation to the actions of previous generations actions during similar times will be covered.    

productivity slowing = hiring????

Here is a story from CNBC below discussing how slowing productivity numbers might give a push towards hiring. This is about right as productivity is close to all time highs.

Productivity/Hiring

The fuse has been lit

This economy has the real opportunity to roar back in 2011. The GDP numbers were up an annualized 2%. This is great news considering the fact that corporations in the S&P are holding on to $1 trillion dollars and not hiring! It is not normal to find positive GDP without hiring or spending by corporate America.

There is a feeling that once the mid term elections are over, there will be more certainty as to how governmental economic policies will be shaped. That alone will allow corporations to act and start hiring again.

The Pres said what?!!!

Hey everyone

I know it is all to easy to catch our fearless leader in a confusing phrase but this comment from Yahoo! regarding the economy shows just how clueless he really is.

"There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. But he said he didn't see that spreading to the broader economy.
Bush said he was optimistic about the economy. "But I would be pessimistic if I thought Congress was going to get their way — and they're not. We're not going to raise taxes," he added.
Pressed on whether he thought there was any risk of recession, Bush said: "You need to talk to economists. I think I got a B in Econ 101."

So, let me get this straight. He makes a judgement on the effects of the housing market on the rest of the economy and then comes back and explains that because he received a B in Econ 101, he isn't qualified to comment on whether or not we are headed for a recession? Unbelievable.

- This is the time to pick up some investment real estate. This is very similair to the stock bubble. I think the recovery will be just as profitable as the stock market recovery has been for the last four years.

The Wikiwealth portfolio consists of the following:
Pepsi Stock (www.pepsi.com)
AGG Bond ETF
SharebuilderMoney Market (www.sharebuilder.com)
Optionsxpress Money Market (www.optionsxpress.com)

Checkpoint bucks trend today

Hey

Checkpoint seemed to buck the trend on heavy volume closing the day up 2% while the rest of the market was clearly down. There was no news so I am unclear as to why there was such heavy buying. Stay tuned.

The Fed Chairman Bernanke came out with remarks about the economy suggesting that it will increase in the next six months. This brought some selling into the market as the thought of lower interest rates has gone away for a while. This might hurt some of the housing stocks going into the summer. The service sector jump seems to indicate some upcoming employment in the tech sector furthering the maturation of the internet economy.

The Wikiwealth portfolio consists of the following:
Pepsi Stock (www.pepsi.com)
Checkpoint June 25 Call (www.checkpoint.com)
Sharebuilder Money Market (www.sharebuilder.com)
Optionsxpress Money Market (www.optionsxpress.com)

If you have any more questions or comments, you can also email keanemd@gmail.com