Stimulate me in the morning!

Talk is cheap….except if you are very heavily
invested in Hedge Funds and Derivatives. Old news, you say? Well,
the water over the bridge is getting higher and higher! The water
in the well, getting deeper and deeper! Words like “Unsustainable
Home Prices” and “Stagflation” are echoing throughout the Halls
of Congress. These revelations have yet to be admitted at the
State or County levels yet. As pappy might say: “They are going
to scream like a scalded cat – when the word gets out!” Betting
on the ongoing decline of Real Estate prices through 2009 seems
to be a conservative estimate!

Today, Merrill-Lynch is taking another nearly $10 Billion dollar
write down for the last quarter of 2007. These write downs are
moving with impunity….across the boards of the European Union,
Asian Markets and right here in America. The dominos are falling.
How far? We will just have to wait and see!

The bleeding of value and equity doesn’t have a set “Stop Point”.
It is going to keep going until….until……well, they will let
us know. Ben Bernanke our Fed Chief spoke yesterday before Congress.
Ben is everything that former Fed Chief Alan Greenspan was not. Ben
actually says things in some words one might comprehend. Greenspan
“spoke in tongues”! Ben says..”Stuff is happening..and we need to
stop the bleeding!” Ben says..”Let’s put together a stimulus package
for people who will go out and light up the economy!” Ben is cool.
The situation is anything but! The Congress seemed eager to bring
up the opportunity to give away “Food Stamps” and “Health Insurance”
– into the conservation. Ben remained calm and said: “Whatever you
guys want to do! That’s not my call!” The Stimulus talked about giving
everyone making less than $48,000 a year about $600 bucks in cash,
check or money order!” That number is in a state of flex. We have
heard this morning..up to $1600 for a married couple.

Remember after 9/11? The Feds gave us some bucks; “just because”!
Looks like they thought that worked out pretty well, but then we
had Real Estate values taking off like a rocket! Home prices were
doing that “double down” stuff – every six months or so. Banks were
busy re-financing loans to astronomically low levels. Anyone that
wanted borrow money to upgrade their homes, could do so..overnight!
No rules for borrowing…just state your income and borrow away!
Some people bought homes and never made a payment…no money down,
placed the property on the market, sold it with a 30 day Escrow
and pocketed 20% of the price of the propety. Pyramid Schemes had
more integrity! Government was thrilled and was Re-Assessing Property
Values like it was going out of style! Little did they know…it
was going out of style…sooner than they thought. Yep, those were
the days of $28 dollar a barrel oil, $2.25 per gallon gas, $285
dollar a ounce Gold….and $2.25 a pound for butter. What year was
that again? September, 2001!!

Ok, it just turned 2008…and we are heading back to the good old
days…if we are not careful. We suggest that the Feds send everyone
$600 bucks…not just the underprivileged! Do the same fix we used
after 9/11. We held onto to that check for four months before we
cashed it…because we didn’t believe it was ours to keep! Ah, but
we spent it finally. We got that new computer, did some interview
shows and got creative. It was soon gone…but we were grateful.

A couple of things did come up with Ben and Congress that were
rather interesting. Ben basically said: “Those that got themselves
into this mess…need to be responsible..and if Corporate Execs have
failed to do their due diligence and granted unwarranted loans..they
should suffer!” We agree with extreme prejudice! Greed at this level
…mainly quadrupling the price of property is and was unacceptable.
The same goes for Government. They have been living the life…on
the great greed of the Real Estate market. The good news was of
course that illegal immigrants got jobs and bought tortillas and got
to send money home to Mexico and El Salvador. The other good news was
that Developers and Builders put away plenty enough retirement money
to last several generations. Their kids got to buy homes, new or old
and got off their backs until their APR Loans kick in with the higher
rates. Now they are screaming, because the price of all Real Estate
is taking the big nose dive! They are still hoping “the dummies” go
out and buy property at these still inflated prices.

So, what do we think that the Bush Stimulus Package will do? It will
work modestly…modestly enough to redistribute a few bucks to local
Dry Cleaners, Gas Stations and Mall Operators for a few weeks into
2008. If they are really lucky..it will prime the pump until the
November elections and we find out the real news….if they allow us
to see it. What about the affect on local government? Cities, Counties
and States are going to be “writing off” the values of their Public
Pensions, their Retirement Plans, their Road Repairs, their hope NOT
to rely on the Federal Government for almost everything. The Feds will
do what the Feds always do – Print more money! As Fed Chairman Ben
Bernanke so described: “We are running out of options here!”

Finally, what can we expect from our local, county and
State lawmakers? Raise fees, Raise tolls, Raise taxes! These are
not the sharpest tools in the shed…and if they do these idiotic
things; should all be thrown out on ears..next election!

Thank God, Shirley Grindle has come up with Tin-Cup 2….which has
a lot of good stuff in it. If the Board of Supervisors doesn’t approve
it….we should put it on as a Statewide Ballot Initiative! “You know
it…we know it….everyone knows it!” Our thanks to Bob Dole!