February 6, 2012

Monday Off-Topic (Moderated) Open Thread (020612)

Filed under: Lucid Links — Tom @ 7:15 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.

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  1. One more reason why Fannie and Freddie have to go!

    “Hidden” mortgage fee paying for payroll tax cut

    http://www.cbsnews.com/8301-505263_162-57371781/home-buyers-left-holding-bag-for-payroll-tax-cut/

    But there’s something the politicians weren’t bragging about – the fact that they’re paying for the two-month tax cut with what has turned into a brand new fee on home buyers.

    The new fee is a minimum of one-tenth of 1 percent on Fannie Mae- and Freddie Mac-backed loans, and is likely to go much higher.

    It will be imposed for the next 10 years on most mortgages and refinancings and it lasts for the life of the loan…

    …The $35.7 billion collected in fees won’t go into the Social Security fund to replace the lost payroll tax. It goes to the general treasury where Congress can spend it however they please…

    …One congressman, Florida Republican Allen West, said he tried to blow the whistle on the whole thing before Christmas.

    “I read the legislation and raised the flag. Unfortunately nobody paid attention to what I was saying at the time,” he said, calling the fee a backdoor tax increase on the middle class.

    “It absolutely is because you’re talking about the homeowners – when you’re talking about the people that are gonna be using the Fannie Mae, the Freddie Mac, the government-sponsored enterprises – it is absolutely a tax increase on them.”

    An Obama administration official defended the mortgage fee, calling it “modest.” She said it’s “unlikely to negatively affect borrowers” because increases “will be phased in over the next two years.” And it will “help bring private capital back into the mortgage market, which [is] good for borrowers over the long term.”…

    This should be a campaign issue. Notice that the excuse given by the Regime constitutes an implied foreknowledge of the legislative trickery played upon the taxpayer and the GOP. Apparently, it was amateur hour at the House when the so called tax cut was extended by two months with a virtual permanent (hidden) tax increase.

    If you want to beat this tax you have to get a mortgage via a local bank that does not resell it’s mortgages to Freddie and Fannie. Good luck with that.

    BTW- the reduction in SS payroll tax is going to primarily benefit the 50% who pay NO federal income tax at the expense of those who do via their mortgages. It should be intuitive that those paying mortgages are the ones definitely paying federal income taxes. This money stolen from SS via this shell game will never be recouped as it will never be reflected in the SS trustees report.

    Comment by dscott — February 6, 2012 @ 10:52 am

  2. Now here’s a big I told you so moment for 2012:

    Armageddon at the Strip Mall

    http://www.nationalreview.com/exchequer/290140/armageddon-strip-mall

    …With retail and office-space rentals down, lots of commercial borrowers are sitting on largely vacant properties that are not producing much in the way of cash flow. Among the more high-profile cases, the WTC 3 tower at the World Trade Center still has not located an anchor tenant, which could put the much of the project on ice. Thousands of strip malls across the fruited plains have empty storefronts, and thousands of office buildings have floor upon vacant floor.

    Standard & Poor’s advises: “One-third of maturing loans are for office properties, for which five-year lease terms are fairly common — and if tenants don’t renew these leases, securing new, long-term lease commitments may be more difficult in the current environment. Those leases [were] signed in 2007, at peak rents will likely reset to lower levels as five-year leases roll.” S&P’s bottom line: “50%-60% of the 2007 vintage five-year-term loans maturing next year may fail to refinance, and retail loans are at the greatest risk.”…

    The CDO Menace: http://www.publiusforum.com/2008/10/04/collateralized-debt-obligations-the-cdo-menace/

    Comment by dscott — February 6, 2012 @ 11:31 am

  3. Here’s news that the MSM definitely doesn’t want to cover:

    Shipping Rates Go… Negative

    http://www.zerohedge.com/news/shipping-rates-go-negative

    GLENCORE HIRES SHIP AT MINUS $2,000 A DAY, GMI SAYS

    GMI TO CONTRIBUTE $2,000 A DAY TO GLENCORE’S FUEL COSTS

    GLOBAL MARITIME’S U.K. MD STEVE RODLEY CONFIRMS DEAL BY PHONE

    Why is this happening? Perhaps because ships have to be kept seaworthy and in motion or else they become scrappage in as little time as 3 months. Think sharks. Needless to say, this will play havoc with shipping company (and affiliated entities’) liquidity, as the biggest default wave in the history of the industry is about to be unleashed and tens if not hundreds of billions of European secured loans are about to be “impaired.”

    What the MSM doesn’t want to cover here is that freight traffic has collapsed and an economic stall has occurred in Europe. If this is true, the Chinese who greatly depend upon Europe for trade are going into recession. Of course both Europe and China in recession mean Obama doesn’t get re-elected come November 2012 because the US will also be in a full blown recession as a result. Hence the MSM meme, the economy is getting better because (more workers are dropping out of the work force) see look the unemployment rate is dropping. They are all crossing their fingers that “animal spirits” will finally kick in to save them from economic and electoral disaster. Never did a group of people so wrap themselves in the rapidly failed theory of one book as the Obama regime has, unless you want to count FDR’s embrace of Keynes.

    Comment by dscott — February 6, 2012 @ 11:51 am

  4. Maybe that’s explains a lot of the reduced consumption of fossil fuels..

    Comment by TBlumer — February 6, 2012 @ 11:54 am

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