There you go again.
NO ONE is talking about housing!
Rev and I are in commercial businesses.
-
Welcome to Religious Forums, a friendly forum to discuss all religions in a friendly surrounding.
Your voice is missing! You will need to register to get access to the following site features:- Reply to discussions and create your own threads.
- Our modern chat room. No add-ons or extensions required, just login and start chatting!
- Access to private conversations with other members.
We hope to see you as a part of our community soon!
I said it Tuesday night and I was right!
- Thread starter Reverend Rick
- Start date
There you go again.
NO ONE is talking about housing!
Rev and I are in commercial businesses.
As we can see, those not in business seem able to look only at what is presented by MSNBC & NPR. They think in terms of larger events presented byThere you go again.
NO ONE is talking about housing!
Rev and I are in commercial businesses.
talking heads in the news, & from this glean an artificial understanding of how things work. Since they don't depend upon credit to survive, they're
unaware of the effect of regulatory changes during Obama's reign.
Existing commercial loans are called in at term, yet new loans are unavailable. Have a home loan with Fannie or Freddie? If you fall behind, they don't
work with you...the gov't puts you on the street. (This is why rental housing is strong.) Home remodelers used to do a booming business here, but now
2nd mortgage loans are gone, so they can't finance work anymore. (A friend has seen his business down 90%.) Hear about these new low interest home
loans (3%-4%)? Regulatory changes make them unavailable to many of us, ie, your property differs too much from the norm, non-conforming use. I'd
be happy to pay 6%...if I could find it.
Is Obama the guiding hand behind these changes & consequences.....or is he unaware?
It makes no difference to us. But the voters have spoken, & the credit crisis is a mandate.
Last edited:
I asked this to Rick but it wasn't answered yet. Rev, you can answer too if you want:
My uncle is a small business owner and he's thriving. (He absolutely hates Obama, but for reasons unrelated to his business performance.)
My uncle is a small business owner and he's thriving. (He absolutely hates Obama, but for reasons unrelated to his business performance.)
I'll pick one.
Banks have been required by fed auditors to get risky loans off their books. And now, with commercial rents down by over 50%,
a great percentage of us have "risky loans". If you have an existing commercial loan, it is not self-amortizing (as a residential
loan typically is), so it's term is less than the amortization period. In the old days, loans would be renewed. Now, banks will
often foreclose if you can't find alternate financing, which is (of course) much harder to find. On my commercial properties last year,
none of my payments were applied to principal or interest, but rather to the banks legal expenses in suing me (& all my commercial
tenants) for foreclosure.
Loan terms were once 10 years. Now, loans are being issued which must be refinanced every 1, 2 or 3 years. Each time, loan origination
costs must be paid (eg, appraisals....at about $5K per property).
Last edited:
I will get back to you Lyn, I'm on my phone at the lake.
Like I said, I did not make my decision based on the Internet, my decision is based on my customers ability to acquire financing.
In the past, they got a loan, we built it and they rented it out and when they had 100% under lease, we built another. This went on for decades and every loan was paid on time. Now we wait for answers and wait some more.
I used to walk into the bank and borrow 6 figures short term on my signature. Those days are gone. The problem was the bubble and people who had no money down and no business borrowing that mucked it up for legitimate borrowers.
Which law put this into effect? Was it something passed by Congress and signed by Obama, or was it something that auditors already had the power to do that they are now doing due to the popped bubble?
How are you or auditors defining "risky loans" here? If I'm a bank, I don't want to make risky loans without a high interest rate. For me to make a low interest rate loan, there'd have to be evidence that the money has a very high chance of being paid back.
Yes but the question is, how much of this is due to the general economy being weak and banks trying to preserve capital, how much is due to regulators, and how much is due to specific regulation enacted by Congress and Obama? Which law or act?
I don't know the laws....only what bankers tell me is required of them.
I don't know specific criteria for being labelled "risky". I'd guess some possibilities: spotty payment history, unfavorable class
of real estate, low borrower equity, low borrower income from other sources, shorter term leases, borrowers credit score.
The generally poor economy is what primarily puts us at risk. The banks' unwillingness to continue existing loans is regulatory. Their unwillingness to make new
loans is both economic & regulatory. Whether the regulatory aspect is by administrative rules or by legislation, Obama takes no steps to correct the situation.
Last edited:
Dirty Penguin
Master Of Ceremony
Some tend to blame Obama solely even though it takes two to tango.
Exactly......:yes:
Maybe lenders view both of heir businesses as high risk.
The answers from them ought to be interesting. The school where I work is in an industrial area surrounded by dozens of small businesses and so far that I know of none of them have gone out of business and many of them are hiring.
Many will exculpate Obama, no matter what he does.
Tis best that we examine the effect of acts within his power.
Some areas are worse than others, & the locale could even be a factor in assessing risk per fed standards.
There is hiring here in some companies too. The problem is the net effect, & how it could be better.
Last edited:
Suppose that is rational market behavior, though? If there are risky projects, then banks don't want to accept that risk.
Banks over-extended. Now they've got to lend more carefully. Since federal money is on the line, feds want to make sure the bankers don't screw up again.
Banks view these things in statistical terms. They may reject loans to people who can make good on them (they're not omniscient; they're going by the numbers and probabilities) due to their overall policies of forming a portfolio of loans with a good risk profile.
I invested in a small bank that faced regulatory problems. They blamed the regulators. But the reason regulators got on their case was that they were beginning to over-leverage themselves (with FDIC insured deposits). I could see it as a lay person looking through years of their company's 10k filings; their various financial ratios were deteriorating. Their ratio of liabilities to equity was inching upward, among other things. So regulators said they can't keep doing that. They also faced legitimate problems from the GSE's (Freddie and Fannie), but that's another discussion. So that's an example where it was basically their own fault but they can still technically say, "It's the regulators."
It's interesting that small business commercial real estate loans are so hard to come by. Because larger commercial real estate entities, like publicly traded REITs, that rely on issuing bonds for their debt leverage rather than relying on mortgages don't seem to be having any problems getting this leverage at reasonable rates. I guess they spread it all over a larger portfolio of properties to reduce risk, whereas smaller companies like you and Rick have more consolidation in your real estate portfolios or projects and it scares the banks away in a shaky economy?
If you're saying it's the regulator's fault, but can't point to a specific law, then I'm not sure how much of a political discussion can occur.
I guess you will have to give Rev and myself time to speak with the bankers next time we see them to get the specific answers you seek. :sorry1:
Meanwhile we can go on a tangent if you want.
I think the election was about social issues for many folks and not the economy which is why Mittens lost.
Lets say I am wrong about this and ask you a question.
Why would a person double down on a President that has such a poor performance with reaching across the isle and getting anything done? Yes the Republicans are stubborn, but that is a given and nothing has changed.
That is the basis of why I am throwing in the towel. It's not about blame Obama, it's about for what ever friggin reason or who is to blame, I see very few business loans on the horizon and that is my life blood.
I predict a double dip recession that makes the first one look like a cake walk. I can live without businesses and fancy cars and boats, what I can't live without is food and shelter. I'm focusing on the basics and if I am wrong, I'm still gonna eat in the future so I am investing in something I am going to need anyway.
I'm positioning myself to not worry about what utilities or food costs in the next few years and I am taking a hedge position in precious metals as well.
Honestly I hope I am wrong. I think perhaps the fat cats are going to run the tables buying up real estate at bargain basement prices and look to Americans renting not owning their homes in the future. Not too many folks can go for too long without an income before they default on their mortages. The best of home owners have 6 to 12 month reserves in cash. If the market tanks that is all they will have to meet their obligations one day. On that day, they will have to sell their positions for peanuts.
You and I will ride it out and enjoy the rebound that always happens, but most will not and lose everything. I think the very rich want things to fail. They have destroyed the middle class and now they have come for the small business person next.
Bankers don't want to lend us money so we can participate in prosperity, they want Rev and me to fail so they can swoop in and buy things up pennies on the dollar.
I'm one step ahead of them. I see this clear as day.
If I'm wrong, oh well, I can always come out of retirement and buy an even bigger boat. :yes:
I certainly think the social issues hurt the Republicans.
-National acceptance of homosexual marriage is touching over 50%. All four state votes on homosexual marriage on election night went in the liberal's favor.
-Making abortion illegal in all cases or most cases is not popular among voters, as shown by polls. In particular, single women voted overwhelmingly in support of Obama.
-Republican efforts against immigration have not done well with the Latino vote.
Polling on the economy showed that to be one of Romney's only areas of advantage over Obama in perception, but that was a slim advantage in the polls. It was not an overwhelming view that Romney was better for the economy.
Gary Johnson didn't win either. He has a position more socially liberal than Obama and more fiscally conservative than Romney.
I'd ask the same question in reverse. Why would Americans vote for a party that has shown zero ability to compromise?
Polling shows that Americans statistically don't want big cuts to Medicare and Social Security. They don't want to be in in the most fiscally conservative country in the developed world. They want to be in a more balanced country.
Obama compromised with the GOP at the end of 2010. Bush tax cuts were set to expire, which the GOP didn't want. Unemployment benefits were going to run out for a lot of people in the worst economic conditions since the Great Depression, which Democrats didn't want. So Obama and the Republicans agreed to extend the tax cuts for wealthy people for two years in exchange for also extending unemployment benefits for over a year. So they agreed to keep revenue low and spending high.
Many Democrats were unhappy with that deal. Obama compromised with the GOP during the debt ceiling crisis in 2011. He didn't particularly want to cut medicare and social security. He wanted to let most of the Bush tax cuts expire. The Republicans almost all signed Norquist's agreement to not allow any tax increase under any circumstances. In an attempt to compromise, Obama offered a $400 billion per year deficit reduction plan that includes $2.50 in spending cuts for every $1.00 in tax increases (a deal in the Republicans favor), and the Republicans rejected it because they were 100% against any tax increases. They were completely unwilling to budge. So the deal that went through instead was that the fiscal cliff would occur- automatic spending cuts to Defense (which GOP doesn't want) and domestic programs (which Democrats don't want) occur unless they can agree on deficit reduction. Boehner of the GOP said When you look at this final agreement that we came to with the white House, I got 98 percent of what I wanted. Im pretty happy. Democrats argued that Obama compromised too much even though he holds the presidency and the Democrats hold the Senate. Now we're facing this problem at the end of 2012 because they couldn't agree in 2011 despite Obama's massive compromise. This upcoming issue is something that Boehner said he's "happy" about but now he's scrambling to fix, like Obama.
So seriously, the Democrats and Obama have indeed attempted to compromise. They have offered $2.50 in cuts for every $1 in tax increases, and the tax increases would mainly just be a partial expiration of the Bush tax cuts and back to roughly Clinton-era taxation. The GOP meanwhile has insisted on no new tax revenues.
Americans don't want to see a perpetually gridlocked Congress. One party was trying to compromise while the other party all signed an agreement that means they can't compromise unless they go back on their word. So they lost the election.
I think that at some time in the moderate future there's going to have to be deficit reduction which could indeed result in recession. Maybe during this fiscal cliff or maybe later. My portfolio is prepared conservatively for it.
I've been accumulating assets and bringing in extra income to have the strongest financial position possible because a hyper-partisan environment is not good for business.