Attached is a copy of those notes, which is directed specifically to Buyers for the first time. Gary’s sources are cited, and it looks to me like the biggest point to be gleaned from his notes is that: things are not as bad as the media would have your buyers and sellers believe – and he goes on to “show his work.” It’s a matter of perspective and education.
- In the past 12 months, our economy grew at a healthy rate
- Dec. ’07 marked the longest period of uninterrupted job growth on record – 52 consecutive months
- Since 1980, our GDP has risen dramatically and has actually shrunk the federal deficit – current level is below the 40 year average
- Even when they take “write-downs” on bad loans, financial corporations are STILL in big profit positions – billions
- … even after putting aside reserves
- their cash flows are surprisingly strong and they continue to pay (big) dividends
- losses in their sub-prime holdings are offset by gains in their other multi-faceted holdings
- the sub-prime losses look large – until you consider that they represent a very tiny PERCENTAGE of loans made
- Nationally, 84% of sub-prime buyers/borrowers have never missed a payent, and very large percentage of the other 16% don’t ever go into foreclosure
- Interest rates are coming down, are within .75 of a percent of historical lows – and are actually higher than they might be right now because lenders are stil adding extra basis points for the “fear premium.”
- …Which should calm down soon
- This is not the first banking crisis the world has seen
- It usually takes about 6 months for financial institutions to straighten out of their mess
- We’re well into that 6 months J
- Almost all of the state’s foreclosures are occurring in 20% of the zip codes in California – and almost all of them are located in the Inland Empire, Central Valley and Sacramento areas – not here.
- Check the demographics – as Gary says: “We’re RICH!”
- See pages 6, 7 & 8 of his notes to see why Gary believes the future is bright
Also, here are some offerings from the Times, full texts below:
“Countrywide pushes customers with exotic mortgages to refinance to traditional ones that are easier to sell off.”
ü I ask: might this lead the way for other lenders to go in a similar direction, sooner vs. later, to help existing borrowers avoid foreclosure?
“Home Sales, Prices are Down Sharply -- Both dropped last month, convincing some analysts that the housing downturn will keep dragging on.”
ü See Gary’s take on page 5 of his notes (attached)!
ü Example of why this is so misleading: “We often hear how the prices in Phoenix have dropped 8% in the past 12 months – but Phoenix still has a net gain of 80.2% since 2002!”
ü (how big is the picture that the media are using when they tell their scary stories in very large print?)
Attached is a copy of those notes, which is directed specifically to Buyers for the first time. Gary’s sources are cited, and it looks to me like the biggest point to be gleaned from his notes is that: things are not as bad as the media would have your buyers and sellers believe – and he goes on to “show his work.” It’s a matter of perspective and education.
- In the past 12 months, our economy grew at a healthy rate
- Dec. ’07 marked the longest period of uninterrupted job growth on record – 52 consecutive months
- Since 1980, our GDP has risen dramatically and has actually shrunk the federal deficit – current level is below the 40 year average
- Even when they take “write-downs” on bad loans, financial corporations are STILL in big profit positions – billions
- … even after putting aside reserves
- their cash flows are surprisingly strong and they continue to pay (big) dividends
- losses in their sub-prime holdings are offset by gains in their other multi-faceted holdings
- the sub-prime losses look large – until you consider that they represent a very tiny PERCENTAGE of loans made
- Nationally, 84% of sub-prime buyers/borrowers have never missed a payent, and very large percentage of the other 16% don’t ever go into foreclosure
- Interest rates are coming down, are within .75 of a percent of historical lows – and are actually higher than they might be right now because lenders are stil adding extra basis points for the “fear premium.”
- …Which should calm down soon
- This is not the first banking crisis the world has seen
- It usually takes about 6 months for financial institutions to straighten out of their mess
- We’re well into that 6 months J
- Almost all of the state’s foreclosures are occurring in 20% of the zip codes in California – and almost all of them are located in the Inland Empire, Central Valley and Sacramento areas – not here.
- Check the demographics – as Gary says: “We’re RICH!”
- See pages 6, 7 & 8 of his notes to see why Gary believes the future is bright
Also, here are some offerings from the Times, full texts below:
“Countrywide pushes customers with exotic mortgages to refinance to traditional ones that are easier to sell off.”
ü I ask: might this lead the way for other lenders to go in a similar direction, sooner vs. later, to help existing borrowers avoid foreclosure?
“Home Sales, Prices are Down Sharply -- Both dropped last month, convincing some analysts that the housing downturn will keep dragging on.”
ü See Gary’s take on page 5 of his notes (attached)!
ü Example of why this is so misleading: “We often hear how the prices in Phoenix have dropped 8% in the past 12 months – but Phoenix still has a net gain of 80.2% since 2002!”
ü (how big is the picture that the media are using when they tell their scary stories in very large print?)