Feds Keep Banks’ Rates Near Zero – For Now

The Feds are keeping the banks’s rates near zero for a while longer. How will that affect the rest of us?

How much longer will the Feds continue to keep banks’ interest rates low? How will this affect the economy in the coming months?

Description: Newspaper clipping USA, Woodrow W...
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Those are the questions being asked since the Federal Reserve came out proclaiming it would continue to keep the bank’s rates to zero, for a while anyway.

Kansas City Reserve Bank President Thomas Hoenig is dissenting with the policy.

Read Hoenig Says Rates Dangerous

XE.com – MONEY MARKETS-Interbank dollar rates fall on Fed economy view

on U.S. interest rates. Minutes of the June 22-23 Fed meeting released on Wednesday. showed officials wanted to be ready to consider additional. steps to boost the U.S. economy if an already softening outlook …

Publish Date: 07/15/2010 12:49

http://www.xe.com/news/2010-07-15%2013:49:00.0/1276889.htm

Pimco’s Gross: Fed won’t raise rates for at least two years

Pacific Investment Management Co.’s Bill Gross said the Federal Reserve is unlikely to raise interest rates for two to three years as it seeks to keep the economy from slipping back into recession.

Publish Date: 08/13/2010 6:59

http://www.thetradingreport.com/2010/08/13/pimcos-gross-fed-wont-raise-rates-for-at-least-two-years/

Fed official sees bigger risks in future, not now | The Daily

One of the many challenges of being a Fed official is having to make decisions on interest rates and other policies actions now — based on your best thinking of what the future will hold. When James Bullard, president of the Federal

Publish Date: 08/13/2010 11:25

fedinterestrateshttp://dailycaller.com/2010/08/13/fed-official-calls-low-rates-a-dangerous-gamble/

Who will fix the economy? The Fed, Congress, shoppers and

Typically, the Fed can lower interest rates to encourage Americans to borrow money and spend it, invigorating the economy. But the benchmark interest rate controlled by the Fed has been almost zero for more than a year now. …

Publish Date: 08/13/2010 16:15

http://www.washingtonexaminer.com/nation/who-will-fix-the-economy-the-fed-congress-shoppers-and-businesses-all-shrug-100638024.html

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Trouble Assets Relief Program: Here It Comes!

Uncle Sam is sending money for middle class mortgages. Wouldn’t a job help more?

Foreclosure signs, Mortgage crisis,
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Thanks to the Trouble Assets Relief Program some states will be receiving mortgage payment relief.

This is almost unbelievable.  Where will all this money come from?  

The government feels the mortgage crisis has now reached the middle class or those folks who used to be able to pay their bills.

Here’s another suggestion.  Holding on to a job might be the best way to pay off a mortgage.  People are losing their jobs so therefore they lose their homes.  What people need most now are jobs.

Here’s more information

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Defaulting Homeowners: Fannie Mae Gets Tough Finally

Fannie Mae is taking some strategic mortgage defaults’ to the wood shed and it’s probably about time. What’s next in this volatile market?

Defaulting homeowners are getting more than a slap on the wrist from Fannie Mae.

Fannie is taking them to the wood shed, so to speak and it is probably about time.

Borrowers who are walking away and could have paid the mortgage will be held accountable for their actions.

Punishment:  They won’t be able to get future insured mortgages.

Get tough politics? Common sense, if you’re asking.

However, another sticky point arises.  How can the government really determine who could have paid vs who didn’t?

It gets curiouser and curiouser as Alice would have said.

Read Fannie Mae get tough on ‘strategic mortgage defaults’

Property Taxes Going Up in Philidelphia: Smart Move?

Property taxes are going up in Philidelphia. Is that really smart?

Property taxes are going up in Philadelphia.  Is that really smart?

Nope.

Raising property taxes is of course, one of our main soap box issues on this blog. Not only are property taxes too easy to raise in many places, we think property owners are reaching a saturation point.

We can’t predict where that saturation point will be, but we can see signs of unrest.  Let’s look at it from a business stand point.

Real estate investors and landlords must bring in enough revenue to make their bottom lines.  Rents must be high enough to cover expenses but not so high to drive your tenants away and you out of business.

There are improvements we need to do to some of our properties right now, and we can’t because we are  paying very high property taxes here in Davidson County.  Perhaps our city stressed out city leaders don’t need reminding about our recent ‘500 Year Flood’, but we’re stressed out too.

Which brings us back to Philadelphia.  A 9.9 percent jump in property taxes is huge.  And can Philadelphia property owners really believe it will be for only two years. Please…

Here’s the story about the tax increase

Here’s another bit of bad news from Detroit.

Mayor Dave Bing is planning to demolish 10,000 structures, one of which is  Massachusetts Gov. Mitt Romney’s childhood home.

Maybe this is one of the tragic things that can happen when people can no longer pay high property taxes because of the economy.  Current news is that nearly 30% of the city’s  housing stock is vacant.

Detroit to Demolish 10,000 Structures

 

 

 

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Morgan Stanley’s MSREF: Biggest Loss of Private Equity Real Estate?

Biggest loss in history of private equity real estate investing? What has been going on at Morgan Stanley?

Morgan Stanley Building
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Biggest loss in history of private equity real estate investing?

Morgan Stanley’s loss of 2/3 of $8.8 billion real estate fund may be setting a very dismal record.

Their Morgan Stanley Real Estate Fund, or “Msref” as it is nicknamed, is basically on life support and needs reviving- stat, according to reports.

Can Owen Thomas, the new doctor, pull it off?

Read Morgan Stanley Property Fund Faces $5.4 Billion Loss

What does all of this have to do with us?

It all goes back to fundamentals.  Were the real estate deals just too complex?

Morgan Stanley Loses $5.4B in Real Estate Fund – Biggest Loss in …

Losses at a Morgan Stanley real-estate fund could wipe out nearly two-thirds of its $8.8 billion investments. It likely will rate as the biggest dollar loss in the history of private-equity property funds. Morgan Stanley said to take …

Jingle mail spreads to Wall Street property funds | John Gapper’s …

The FT this week reported two cases of international property funds run by big investment banks – Morgan Stanley and Goldman Sachs – getting into trouble. Henny Sender has details of a Goldman-managed fund that has lost almost all of …

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