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Rebecca Ashby

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Creative Financing

Posted Friday, March 07, 2008 (1 year 246 days ago.) Viewed 91 times.

Bush's Creative Financing Plan

I bought my retirement home on the coast of Florida in the summer of 2005. This spacious three bedroom home, just minutes from the beach, has become an albatross. In retrospect, obviously, I paid too much money for the property. Historically, housing had always been a safe investment, similar to a money market fund. I invested the profit from the sale of my previous homes, $100,000 into a down payment on my new one. This seemed like sound logical thinking as I wasn't a subprime borrower, I had an excellent FICO score and my interest rate was fixed at five and a half per cent for thirty years. Now, three years later, I'm invested in a piece of property that is worth, at best, $25,000 less than when I purchased it.

The big question for everyone who bought during the bubble is-- what to do now? I recently called my bank to check on my home equity line of credit. Much to my dismay, I can't even borrow all of my own money back, the $100,000 that I used as a down payment. Currently, the bank will only loan on 90% of the home's value. The loan officer, who initially wanted to enroll me in a higher home equity line of credit, admitted that I would be better off to keep my original terms since the current rate is now one and a half per cent higher.

The Bush administration wants to create a plan to rescue folks who bought property with subprime loans; they want to freeze adjustable rate mortgages. The current thinking is that this freeze will assist all homeowners. "After all," they say," you don't want empty houses in your neighborhood." OK, then what are our options? We could stay in our homes, wait for the meltdown to pass and hope that the market will get better in the years to come or sell our homes and incur a substantial loss.

Those of us who are retired and living on a fixed income may be able to ride out the downturn but this certainly will not be the case for the working class. Where I live, public schools enrollments are substantially lower, construction work has ceased to exist; real estate agents are no longer writing contracts. The "trickle down" effect has emerged throughout the entire community.

Bernanke's Creative Financing Plan

Fed Chairman Bernanke in a meeting with bankers in Orlando suggested that lending institutions reduce the principals owed on home loans for people who are facing foreclosure as an incentive for borrowers to stay in their houses. The idea is to give the borrower, who is upside down on his mortgage, a chance to recoup his losses in the future thus keeping him from just walking away from his debt. The logic is: banks lose 50% on foreclosed mortgages and would lose much less if they just reduced the principal on the mortgage. Homeowners would have less to pay off and thus eventually would establish some equity in their homes. Mortgage payments would be reduced slightly because less money would be owed on the principal as the variable interest rate increased and banks would have some recourse, as yet undisclosed, to reset the principal if the value of the home increased in the future.

For the vast number of subprime borrowers who are facing those rate resets that that will increase their monthly mortgage payments, this solution might be workable. However, in the long term, the banks would be the ultimate winners because they could set the principal back to its original amount if and when the housing market rebounded into positive territory.

Clearly, this housing crisis is affecting everyone. While I'd be jubilant for an equitable solution, I just can't see how more creative financing can be the answer. After all, wasn't it creative financing that originally produced this mortgage melt down. If the Fed stages a bailout for unqualified borrowers and careless lenders, aren't they just basically extending this housing down turn ad infinitum?

How will this affect those home owners who have been responsible borrowers? If we reduced the estimated value on all home mortgage loans created since the 2004 bubble, then I would say hooray but why should we reward the folks who "bit off more than they could chew."

Obviously, no compassionate human being wants to see so many families lose their homes but economics and fairness do not necessarily go hand in hand. If we want this housing debacle to be over in the near future, we have to play out the hand we have been dealt.

Americans are deeply in debt. Come on people, it's time to face the music; bite the bullet; confront reality. We're out of options. Our homes do not qualify for home equity loans and our credit cards are maxed out. It's time to say no to bailouts and creative financing.

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Why Obama Youth Fever May Backfire

Posted Wednesday, February 27, 2008 (1 year 255 days ago.) Viewed 123 times.

As I watched Karl Rove's political conjectures on Fox TV tonight, I remembered what a dynamic, powerful, calculated political machine he commanded in the 2000 and 2004 election campaigns of George W. Bush; Rove is a genius. Millions of volunteers on the ground, the "swift boat ads" and the fear mongering brought victory for the Republican Party. As I pondered the current political landscape, I conjured up a vision of how the Rove political machine could pull off yet another unforeseen victory.

What if the plan of attack is to manipulate the young people to vote for Barack Obama? After all, our youth are not the victims of economic losses; they are bored with the status quo and they haven't got a clue how Obama will bring about "change" but, none the less, our young people have crowned Obama rock star of 2008.

Assuming, for a moment, Obama becomes the Democratic Party's nominee; will the Republican political machine revive their "swift boat ads" and scare tactics? Will they unleash skeletons from Barack's past? Will they use Obama's Muslim heritage to scare voters? Will they promote racism to generate votes for McCain? The scenario of dirty politics is yet to be revealed but if the past is any indicator of the future, we could see a country divided subconsciously by innuendos of cultural differences.

Now, assuming Hillary Clinton is the nominee for the Democratic Party, what can the Republicans "pull out of their hat?' They've spent the last 20 years slicing and dicing her. No new juicy tidbits of scandalous information can be found. The demonizing will continue, of course. Republicans love to hate Clinton so the base may be polarized to vote against her but when you look at the choices offered from the Democratic Party, Hillary Clinton is the candidate that can stand up to the scrutiny of the Rove machine.

The last eight years have been filled with lies, secrecy, economic woes and a war which should never have been waged. John McCain would just extend the Bush policies for another four years. If my theory is correct, Hillary Clinton has the best chance to beat John McCain. The time has arrived for the Bush era to be over and done with forever!

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Meghan vs. Chelsea

Posted Monday, February 18, 2008 (1 year 264 days ago.) Viewed 3,311 times.

In this whirlwind of Obama-mania that has swept over the 20somethings in our country, will either McCain's daughter, Meghan or Clinton's daughter, Chelsea be able to convince their peer group to abandon Barack?

These adult children of our candidates must choose a path; they can stay far away from the campaign trail and maintain a "normal" life or they can support the parents they love at the expense of their own privacy. Chelsea Clinton and Meghan McCain have chosen the latter. Both are 20somethings who are campaigning strenuously in this 2008 election season, Meghan for her father, John and Chelsea for her mother, Hillary.

Chelsea, now 27, has an undergraduate degree in history from Stanford University and a graduate degree in international studies from Oxford. She sits on the board of the "School of American Ballet." Did you know Jacqueline Kennedy was a ballet patron? Chelsea is presently on leave from her Manhattan hedge fund job at Avenue Capital so she can stump for her mom. She has a very issue oriented, no chit chat, stick to the facts personality when stumping. Some have said she speaks in a monotone. She doesn't take questions from reporters, only questions from supporters. Much of her unwillingness to speak with the press came from her teenage years in the White House during the Monica affair. Chelsea's public persona is very similar to Hillary's. In fact, at a gala for the "School of American Ballet" when all of the other girls her age were bearing skin, she arrived in a high neck pantsuit with her hair tightly tucked in a bun. Chelsea is quite intelligent, well read and rehearsed on all of Hillary's agenda. Who knows, by the end of the campaign, Chelsea may have also mastered the ability to feel comfortable speaking to large audiences of her peers..

Meghan, 23, graduated from Columbia University with a degree in art history. Meghan doesn't stump for her father. She has a blog, the "McCain Blogette," where she does YouTube videos about life on her father's campaign bus or waiting for the results of a primary with a beer in her hand or her favorite IPOD tunes or trendy name brand clothes and boots. Meghan is very outgoing and has quite a flamboyant personality. In one of her YouTube videos, she even makes a point of not wearing make up for the YouTube take; Apparently, Meghan received a great deal of criticism about over doing her makeup.

Just for fun, I checked out the astrological signs of each of these girls. Chelsea, whose Pisces personality leans toward introspection, finds speaking to large crowds challenging. On the other hand, Meghan's Scorpio personality lends itself to self assured performance for the cameras. Both Chelsea and Meghan call Manhattan home. Both of these young women have grown up in the political spotlight and both have chosen to temporarily relinquish their cherished privacy in order to sway the 20somethings away from Obama.

Both Clinton and McCain are protective of their daughters. Hillary just had a clash with David Schuster of MSNBC when he suggested that Chelsea was being "pimped out" and let's don't forget what happened when McCain's other daughter from Bangladesh was paraded out for the cameras in the 2000 campaign. McCain has seven children; only Meghan is in the spotlight at this time. McCain, when recently asked about his family said "they have a right to their privacy."

Barack's momentum with the youngsters is gaining strength every day. Somehow, I don't think either of these girls will sway the 20something vote significantly. Barack has become a rock star to the kids!

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Las Vegas Strip Hotels

Posted Saturday, February 16, 2008 (1 year 266 days ago.) Viewed 113 times.

Almost all of the Las Vegas hotels located on the Strip have a theme. It's just a matter of choosing which one suits your fancy. Caesar's Palace features the luxuriously costumed players of ancient Rome in the "Fall of Atlantis" fountain show. At the Venetian you can take a gondola ride escorted by a rowing gondolier in traditional costume who will serenade you as you travel through the man made canals. Excalibur has a pirate theme and a court jester's show. At Paris you'll be dazzled by a 450 foot replica (half the size of the original) Eiffel tower; you can take the elevator to the top for an outdoor vantage point of the entire Strip. At Circus Circus you can play games at the midway or watch a high flyer circus act. The Luxor has an Egyptian theme; the building is shaped like a pyramid and mummies are a prevalent part of the décor. New York New York is a miniature replica of Manhattan streets, complete with a variety of distinctly New York bistros, coffeehouses, Italian eateries and steak houses.

The Wynn is the newest hotel on the Strip. The price tag for this beauty was $2.7 billion; it features polished marble floors, detailed woodwork, lush gardens, waterfalls and ponds. It's seriously upscale; the Wynn has its own Ferrari-Maserati dealership. This is a place for presidents, dignitaries and royalty! At the Wynn, opulence abounds at one of the most posh nightclubs in Vegas, the "Tryst."

Circus Circus, the Sahara, New York New York and the Stratosphere all have roller coasters. While all these coasters are thrilling, the one at the Stratosphere has the reputation for being chilling! This coaster sits atop the 920 foot building; it twists and turns until it has catapulted you out 150 feet into the air. You are literally dangling off the top of the hotel

Mandalay Bay has a beach; that's correct, a beach complete with sand and waves in the desert. It also has three other pools and a lazy winding river. All of the strip hotels have pools; one more elaborate than the next. No need to bring your beach towels; Las Vegas hotel pools provide you with several plush towels when you enter their pool areas. All you need is your room key. Cabanas are also available for a hefty fee. At the Palms, their pool is covered by a dance floor at night. All the hotel pools close by 6:00PM.

The locals tell me that an old Vegas trick is to book the cheapest room possible and then ask if you're eligible for an upgrade when you approach the desk with ID, credit card and a $20 bill in hand. Tipping $20 should get you a better room if the hotel is not booked to capacity already.

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