The next few years could be quite scary...

As I drive to work through suburbia, I am starting to see more and more residents place their "For Sale" signs directly behind their white picket fences (gearing up for the Spring season). The vast amount of signs (many more than last year) is telling of the ease in which people could attain mortgages and the problems that will more than likely come to fruition in the future.

Consumer debt is at all time highs, yet people continue to whip out one of their five favorite credit cards to pay for "things" they can not afford. What is even more scary is the ease at which many of my friends have bought homes over that past year or two. With historically low rates since 2002, our money could be streched further to purchase homes that would have previously been out of our reach. I have friends who honestly make no more than 60K and are purchasing $250,000 homes with no or VERY little money down. To add to this, many are tricked into believing that an ARM will ultimately be cheaper for them since the first year (or more) of payments are much lower. Well, what happens when this "conundrum" that Greenspan has quoted during the last Humphrey Hawkins testimony works itself out??? Rate are inevitably going to rise, money managers are overwhelmingly short bonds, its a fact. When this comes to fruition there will be plenty of kiddies running to mommy and daddy because they can not come up with their mortgage payment or need money to pay off their loan when they go to sell their homes since the market has depreciated in the new higher rate environment.

This is truly scary and think there will truly be a nasty correction within the near future.

Building The American Dream ... Or Nightmare?

The Economist - FANNIE MAE and Freddie Mac, the twin titans of America’s mortgage markets, think of themselves as big, friendly giants. They stand behind the mortgages of around three-quarters of America’s households—they “make home possible,” as Freddie Mac likes to put it. Their circle of friends does not, however, extend to the Federal Reserve and its chairman, Alan Greenspan. On Thursday February 17th, he told Congress that by letting these two agencies grow unchecked, “We are placing the total financial system of the future at a substantial risk.” Very big but not so friendly, these giants could soon loom over America’s financial skyline like Godzilla and King Kong. Fannie Mae—originally the Federal National Mortgage Association, it now calls itself by its chummy Wall Street nickname—traces its origins to the credit crunch of the Great Depression, and government efforts to help families borrow to buy a home. Fannie Mae, and its smaller cousin, Freddie Mac (the Federal Home Loan Mortgage Corporation), do not lend to budding homebuyers directly. Instead, they buy up the mortgages that other lenders offer, helping local banks and thrifts to distance themselves from the risks involved. Some of these mortgages are then bundled up and sold on: the agencies serve simply as middlemen. But a growing proportion are kept on the agencies’ balance sheets. Between 1997 and 2003, their combined holdings more than trebled, to over $1.5 trillion (see chart). The middlemen have got fatter and fatter. Why are they so financially retentive? To provide liquidity and stability to the American mortgage market, a Freddie Mac spokesperson told Reuters news agency. To make money, Mr Greenspan told Congress. Though the two agencies are owned by private shareholders, they are widely perceived to enjoy an implicit guarantee from the federal government. This lets the agencies borrow cheaply to buy mortgages, squeezing out any unsubsidised rival which has to stand on its own feet. Whatever the official position, since the two agencies are now so big, the federal government will in fact be forced to bail them out if things ever do go wrong. How might things run awry? As an asset, mortgages pose three risks: the interest rate can fall, the mortgage can be repaid early, or the homebuyer can default. To cushion themselves against these risks, the two agencies hold a reserve of capital. But in Fannie Mae’s case, this cushion was judged too threadbare by the agency’s main regulator, the Office of Federal Housing Enterprise Oversight (OFHEO). It ordered Fannie Mae to raise its capital cushion by 30%. The two agencies thus stopped adding to their piles of mortgages at quite such a furious rate last year. But once this moment of crisis passes, Mr Greenspan says, the portfolios will grow again.

T minus 6 Months

In no more than six months I will be attempting to complete, yes only finish, my first triathlon. The Chicago Triathlon will have roughly 7,500 fit athletes swimming 1 mile, biking 25 miles, and running even 6 more miles. First stop will be the Shamrock Shuffle in one months time, an easy and very fun 8K race. It has become a family tradition. Hopefully, Ill find some wacky 10K races this summer.

All of this training has got me thinking, why doesn't the government subsidize gym and fitness expenses? Really. People such as myself, spend the extra time throughout the week keeping our bodies in good working order and then some. Routine exercise is proven to limit the potential of illness and major disease. So why do we not get reimbursed for staying out of the health care system? It baffles me how some let their bodies go when a vasst majority of people have the time and ability to help themselves. All you have to do is get up and walk or change your eating habits, it truly is not that difficult.

Looks like Lance is going to go for it again!

Armstrong aims for No. 7 this year

Hopefully the race is a bit more exciting this year.

Oh yeah... No state income tax is going to make me want to live in Iowa!

Keeping Iowa's Young Folks at Home After They've Seen Minnesota -

NY Times

But $600, the average yearly state income tax for Iowan 20-somethings, is not enough to undo decades of social erosion. The problems Iowa faces are the very solutions it chose two and three generations ago. The state's demographic dilemma wasn't caused by bad weather or high income taxes or the lack of a body of water larger than Rathbun Lake - an Army Corps of Engineers reservoir sometimes known as "Iowa's ocean." It was caused by the state's wholehearted, uncritical embrace of industrial agriculture, which has depopulated the countryside, destroyed the economic and social texture of small towns, and made certain that ordinary Iowans are defenseless against the pollution of factory farming.

(snip)

There is not enough life in the small towns of Iowa to keep a young person, and there is no opportunity on the land. The state faces an excruciating paradox. It can foster economic development of a kind that devours farmland - the sort of thing that is happening around Des Moines. Or it can try to reimagine the nature of farming, with certain opposition from farmers themselves and without any help from the federal government, which has fostered industrial agriculture for decades.

If milking cows and slaughtering swine is your bag, god bless. But with the increasing efficiency of agriculture (while millions starve, we are now burning corn for fuel) and the lack of diversification of the economy of Iowa, I don't see a reason for the economy of rural areas like Iowa turning around without major government intervention.

Want to spy on your friends from a mile away and have the pictures too?!

Check out this photo project. They have created a 1,000+ Megapixel camera. The pictures are really wild.

http://www.gigapxl.com

Definetely worth a read!

IT DOESN'T MATTER IF YOU ARE REPUBLICAN OR DEMOCRAT!
KEEP IT GOING!!!!
2008 Election Issue!!
GET A BILL STARTED TO PLACE ALL POLITICIANS ON SOC. SEC.
This must be an issue in "2008" Please! Keep it going.
----------------------------------
SOCIAL SECURITY:
(This is worth reading. It is short and to the point.)
Perhaps we are asking the wrong questions during election years.
Our Senators and Congresswomen do not pay into Social Security and, of course, they do not collect from it.You see, Social Security benefits were not suitable for persons of their rare elevation in society.They felt they should have a special plan for themselves. So, many years ago they voted in their own
benefit plan.
In more recent years, no congressperson has felt the need to change it. After all, it is a great plan.
For all practical purposes their plan works like this:
When they retire, they continue to draw the same pay until they die.
Except it may increase from time to time for cost of living adjustments..
For example, Senator Byrd and Congressman White and their wives may expect to draw $7,800,000.00 (that's Seven Million, Eight-Hundred Thousand Dollars), with their wives drawing $275,000.00 during the last years of their lives.
This is calculated on an average life span for each of those two Dignitaries.
Younger Dignitaries who retire at an early age, will receive much more during the rest of their lives.Their cost for this excellent plan is $0.00. NADA....ZILCH....This little perk they voted for themselves is free to them. You and I pick up the tab for this plan. The funds for this fine retirement plan come directly from the General Funds;"OUR TAX DOLLARS AT WORK"!From our own Social Security Plan, which you and I pay (or have paid) into,-every payday until we retire (which amount is matched by our employer)-we can expect to get an average of $1,000 per month after retirement.
Or, in other words, we would have to collect our average of $1,000 monthly benefits for 68 years and one (1) month to equal Senator! Bill Bradley's benefits!
Social Security could be very good if only one small change were made.
That change would be to:
Jerk the Golden Fleece Retirement Plan from under the Senators and Congressmen. Put them into the Social Security plan with the rest of us
then sit back.....
and watch how fast they would fix it.
If enough people receive this, maybe a seed of awareness will be planted and maybe good changes will evolve.

How many people can YOU send this to?
Better yet.....
How many people WILL you send this to

It was only a matter of time really...

So now what? We invade Iraq assuming they too have nuclear weapons with no real proof or admission, however, North Korea now admits to bolstering their program? We'll see how China's feelings change now.

North Korea claims nuclear weapons

Have to love Chicago attorneys!

What kind of man steals a 7-year old boys dog and then won't give it back because he says he has given it to a nun?!

Lost dog, lawyer, crying boy: Story has everything