Some of you may get tired of my writing about Barack Obama and what his policies will mean for the real estate industry. Frankly, I get sick of having to write this stuff, because it means bad things are happening. But you’ll want to read this entire post, because it directly effects the funding of every part of our economy – including real estate.
The latest case-in-point: According to the Wall Street Journal, the Obama administration is actively refusing repayment of TARP money from some of the larger banks. (TARP – Toxic Asset Relief Program – is the name of the program under which the government lent money to financial institutions.)
Why would Obama do that? One reason: Control. Obama’s objective is clearly to control the banking industry rather than to merely recapitalize it. And as long as these banks still owe the government money, Obama has the power he wants.
This is an intensely political strategy, and a very dishonest one. The U.S. House (controlled by Obama’s Democrat party) just passed the Pay For Performance act, which gives the government the right to set pay levels for anyone working in any company that has accepted TARP money.
Do you think Obama is likely to stop with merely controlling what employees at these companies have been paid? I don’t think so.
If the Obama administration controls management at these banks, they directly set lending policies. Do you think it’s possible they could use such authority to make politically motivated decisions? Without a doubt – the refusal to accept TARP repayments is just such an example.
What sort of politically motivated decisions could happen?
The first one that comes to mind for me is to quietly tighten the availability of credit for real estate and business loans for geographic areas in which Obama’s opponents maintain political control. This would have the effect of hindering the economy in those specific areas, making the re-election of Obama’s political opponents less likely.
Do you think that’s a far-fetched idea? I might have thought so too – if the Obama administration wasn’t actively refusing to take back money from lenders who are sufficiently solvent to repay their debts. Further, Obama has already established the ability to fire executives he doesn’t like from TARP-infested companies (like Rick Wagoner, former CEO of GM).
This is insidious and a clear step in the direction of Obama’s intention of establishing complete government control of the financial system. This has everything to do with real estate. The real estate market is where this whole mess started – all because of foolish government policies towards lending. And now those policies could become far more heavy-handed.
Thank you for reading RealEstate.BryanEllis.com. Your comments are welcomed and encouraged.
Its what has been said by conservative radio for weeks, that the liberals want more control by the government. Thanks for all that you do.
Geesh, I guess folks like “us” needed a biggger megaphone when we were shouting this from the rooftops last year. Rhetorical question….Why is it so hard for the “Sheeple” to believe/understand that their socialist minded recently elected representatives and president dont really have their best interests in mind and are really only after what most people in power want … that is…more power and control.
Hey Bryan, get your Sub-2 deals done while you still can cuz the way things are looking the government controlled banks will trigger acceleration/due on sale clauses on Sub-2 financing if this sheit goes any further. Un-F-ing-believable.
And the effect of stopping Redlining goes on. This is can be a very effect method of reverse Redlining!
One interesting part of this TARP mess and it is a real mess, is while they want to attack AIG and bonuses for retention and performance there is not a peep about the large bonuses being paid to Freddie Mac and Fannie Mae. The over 100 billion dollars they lost does not matter because it is Barney Franks’ baby.
When you couple this with the way the Obama administration wants to revamp the Census we could have a nearly impossible time figuring out how to sell houses in certain areas.
Chris B
I just calculated the first 700 billion “investment” in the banks.
Stack $1000.00 bills the height of the empire state building, you are at just under 1 billion dollars. Now, stack 560 empire state buildings on top of each other… and beside them, stack $1,000.00 bills to the top and you have 700 billion.
And that was just the first round of spending spree we are on.
They still need banks to LOOK like they need the rest of the money they are trying to get us tax payers to come up with on the next round of money.
This has to stop.
Brian2825 has a really good point there. No reason for banks to call Subject to deals before but now this may change because of the government intervention.
Chris B
Bryan – I don’t know why NONE of this is making the headlines. All we see is “picture taking ceremonies” with Obama and not what he is doing to the country. You are right on the money and with the Democrats controlling Congress, there is very little that can be done to stop their craziness. The individual drive and motivation for success (and the rewards of hard work) are being reduced so that entrepreneurs will stop taking the chances to build a business and employ workers. It is a death spiral for this country if this continues.
Jim – thank you for your comments. Let’s do everything we can to PUT this in the headlines. If you have a website, please link to this page, and please be sure to use the links above (where it says “URGENT: Share This With Your Friends”) to get the word out. — Bryan Ellis
This is really not a surprise at all. Control the banks that write the paper on all the private property in America and you control all the property in America. “Fascism at it’s finest”.
Brian, I want to thank you and congratulate you on providing this forum for this kind of discussion. However, it’s not enough.
Folks…We HAVE to make our voices be heard. By the media, by our rerpresentatives and the Whitehouse, and by the Sheeple.
Please…write those e-mails, make those calls to our representatives. Be specific on what you expect them to do. Share with them the fact that we know what kind of underhanded, illegal activities they are doing and planning. An informed citizenry is a dangerous thing to these folks.
Make sure that you participate in a local tea party on April 15.
Failing in taking back our country through peaceful discussion and discoure is not an option. The alternative is simply too horrendous.
Jeff B.
The reason none of the important material of what is going o in the government, is that the same people who are buying off the government, own and control the news. Also as long as the average person has a job, they will not stand up the the wrong that our government do.
There does seem to be something amiss with the federal government not accepting TARP repayment funds. But with very little mention of it outside of venues such as yours, each similarly omitting the stated reason in favor of hyperbolist assertions, one is left to question their authenticity. Thereby lacking balance, it is little more than the same, tired inflammatory rhetoric you sore-losing “conservatists” have embarked upon since losing the American electorate. Most interesting was recognizing the exactness of your opinion to the others of your ilk, Bryan. Which brought me to your motto, “The Truth About Real Estate Investing…With No “Spin” From The Media or the “Gurus”. Firstly, truth requires balance, of which there is none without even a mention, not from you or your cohorts, of the actual reason for this action. Secondly, “No ‘Spin’ From The Media” requires, for intellectual honesty’s sake, that your spin be at least a little different than “the Media” which, to me at least, includes freerepublic.com, patriotroom.com, and certainly Fox News.
Come on, I’ve come to expect better arguments from you. You know this is an open venue and I encourage dissent. But if the best you’ve got is to say “you got it from conservative media so it’s wrong”, then clearly you have no rational argument. If you’d like to try again, I’ll gladly respond. — Bryan Ellis
“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.” Franklin Roosevelt
Hey Chris,
I agree with you, there isn’t one word of outrage from the liberal media and Congress about the even larger bonuses to be paid by FredMac & FanMae, these institutions are the darlings of Maxine Waters, Barney Frank, et el.
Bryan,
it has always been about control with this guy, the only people surprised by this are the blind and the truly uninformed.
When you look at this guys background and the people that influenced him, it is easy to see through him and why he does what he does policy wise.
Saul Alinsky wrote “Rules for Radicals” and The Cloward-Piven
Strategy of Orchestrated Crisis (by Richard A. Cloward and Frances F. Piven)…the ideas and writings of these men where big influences in the political beliefs of Obama. Just google Cloward-piven and read the article linked to the American Thinker.
Listen to this man speak, he and the likes of him or not interested in the free market/capitalism…they hate thought of anyone making a profit without them having the power and means to control it and/or redistribute it to those that will vote to keep them in power.
Everyone should find your local Tea Party on 4/15 and attend. When the masses begin to protest hopeful something will change. I sick of getting the form letters back from my Representatives.
We’re getting really upset about the mouse in the room and ignoring the elephant. The government has so far given out, let’s say one – two trillion dollars in bailout money to whoever. There are currently over $580 TRILLION dollars worldwide in CDSs and other derivatives held by banks and other financial institutions. Buffet, Weiss and others warned us about these securities in 1997! The banks won’t ‘fess up as to how much or what kind of derivatives they are holding. Most of them don’t even know whether they will get paid or if they have to pay someone else when these instruments come due. SOMEBODY has to get to the bottom of this derivatives mess and tell the people/world who owes what to whom and expose the time bombs. If it’s the government that has to do it by nationalizing the banks, so be it. Once we can see the WHOLE problem, maybe we can figure out how to fix it. It seems that we or at least 40% of us have become a nation of moaners and bitchers. We’d rather spend years cursing the darkest than light a single match.
The problem I see with the Obama administration is that they do not have the balls to tell the American public the REAL number. If they did, the outrage and dispair would probably cause an armed uprising. Not against the Obama administration per se but the way the government has allowed the financial system to be rigged for the benefit of the banks for the last 30 years. The average person IS smart enought to realize the Obama people could not have gotten us into this mess in 75 days and that they and whoever comes after them, probably won’t get us out for at least another 3,500 days, no matter what they do or how much money they give to the banks and AIGs of the world! $580 trillion is an unimaginable amount of money for almost everyone. I don’t know, but I suspect that if you took the aggregate total of GDP of all the countries on Earth, the number would be less than $580 TRILLION. The new pols just don’t know how to get us out of the mess and don’t want to get into real specifics about how bad the financial system has been compromised. We Americans will hate the message AND kill the messenger.
I’d bet my milk teeth that if the government made the requirement that no financial institution will receive any more bailout money until they disclose the total amount of derivates they are holding, who are the parties and counterparties and what the possible gains or losses are, most of the problem would go away. Some banks would be forced to admit that no matter how much money the government gives them, it will not be enough. Other banks would be forced to admit that they would have major gains and therefore don’t need the bailout money.
Personally, I agree with the contrarians…let the weak banks that hold a lot of these derivatives and other junk paper, FAIL. Use the bailout money to strenghten the strong institutions and let the rest file for bankruptcy. If it happens to be BoA, Chase, AIG or whoever, so be it. Too big to fail is a farce. That goes for every other “too big to fail” company as well.
Whatever happened on Bush’s watch, Obama’s watch or whoever comes after Obama…..our collective asses are TOAST in the near term. In the long term, RE investors will get RICH, regardless of what any elected politician does.
This guy is actually capable of making a Clinton look honest.
That is no small feat but he has doen it in a side by side comparison. It was obvious Months ago that he has NO interest in the economy improving.. He also seems rather disinterested in any kind of re-election. BUT does that mean he does not want to stay in power? Think about it! As he is destabilizing the economy he is destabilizing homeland security and foreign relations through weakness and appeasement. What could that add up to? For someone who has shown disregard for our founding pronciples? For someone who owns his Own Logo and wants a Young communist style indoctrination program he calls – “volunteer youth civil defencse force”. Well the Last Times we have seen this with Tojo, and Hitler and Mullahs we have had major wars AND political coupes by tyrrants!
This is a little off topic but to address Jeff B’s comment about emails if you want to send an email you have to send emails only through the Congressperson’s personal/official website. The emails sent by way of so-called petitions and email campaigns are routinely dumped without ever being looked at by anyone. While some of those in Congress may look at some of them most never see the light of day and the most horrendous offenders of our society never look at them. They and their staff actually brag about this.
If you really want to get attention and be heard the best two ways are writing a letter, even a short one or personally phoning their office.
http://www.house.gov/ and http://www.senate.gov/
These two sites will get you to the phone numbers you need. When you talk to your Senator, you will have more sway than your Representative because of the numbers involved. Politicians are very responsive to the amount of effort it takes to contact them and when their phone boards are overwhelmed, they respond right away. They like their power and want to be reelected to keep that power.
Hope this helps.
Chris B
Complain away…. the pendulum is swinging back in the direction of fiscal responsibility after 8 years of rampant corruption abounded. While none of us want more govt control over our lives, or more govt expendatures of our hard earned dollars, the Obama administration is attempting to clean up the mess left to it by the previous corrupt and inept administration….
I hear no viable plans for recovery coming from the republican camp, Just the incessant bellowing of your beloved blowhard, Rush…. So if your guys have nothing constructive to add to the mix why dont you just sit down and shut up… we’ve tried it your way and obviously it didnt work…. that’s why we are where we are today!!!!
Curious. This pendulum you mention – the one that’s “swinging back in the direction of fiscal responsibility” – how do you define this responsibility? My parents taught me that if I spend more than I have, I’ll get hurt. It’s true for me. True for you. It’s been true for every government in the history of the world, and will be for all of eternity. So before your comments have real intellectual merit, it might be worthwhile to define how what is happening now is ‘responsible’. And if all you’ve got is references to your distaste for the previous administration, then you’d better try harder. — Bryan Ellis
OK. I’ll try again. The OTHER side of the story, is that the administration has a “stress test” in place to ensure that banks are properly capitalized. Seems reasonable to me, since 23 banks have already failed this year, not due any fault of our newly elected president, who inherited this mess, but the fault of the (not so) conservative administration and ideals that got booted. Nevertheless, in their zeal to diminish any efforts the president they didn’t vote for implements, neo-conservative pundits pounce with concerted, nefarious assertions of fascism, socialism, blah, blah, blah. This is an egregious act, not only against the man duly elected by the majority of the American populace, but against the American populace itself, who spoke loud and clear against capitalism gone wild.
Everyone does realize this article was nothing but an “op-ed” piece by a frequent FOX news beat reporter? The content of the article is just his opinion. There are no factual basis to support his opinion. Notice he does not mention one bank, one bank president, one comment from anybody at a bank or one comment from the current administration to support his opinion. So somebody states an opinion with no factual basis to support it and all of the sudden it is accepted as if it actually happened.
Are you sure you want to stick with that opinion? Just google the phrase “tarp repayment refusal” and you’ll see that it’s not just “mean old FOX” who is aware of this. Please. Grow a brain. If the best you’ve got is to say “It was on Fox, so it’s not true” then you’ve got a serious intellectual problem. — Bryan Ellis
Wait a minute. You want to give Corporations billions of our tax dollars without any accountability? Really? Isn’t that what got us into the mess we are currently in? Why yes, in fact it is.
If WE have loaned these banks billions of OUR tax dollars, you’re g*d-damn right I want to limit what they are paying to their CEO’s. The same CEO’s who caused this meltdown in the first place and who were richly rewarded for their incompetence.
I suppose your next statement will be that you don’t have a problem with that, and maybe you don’t. That only leaves what is left in your paranoid imagination to bite your nails about.
Seriously guy, leave the paranoia and spin to Faux News. Without all the flashy graphics and booming intros, it just looks like some loony guy wearing a foil hat got a hold of a computer with an “innurnets” connection.
All of the seemingly stupid financial and political decisions made by President Obama are not “random acts of naievity”!
Obama is “trying” to collapse the American Economy!
Why? Mostly to get rid of his political enemies…THE MIDDLE CLASS!
Obama is a Progressive, Marxist, Socialist. He will lie…then tell bigger lies…until he’s fooled enough Americans into believing him.
All Communist Countries used Nationalized Healthcare to begin the conversion of their Societies.
One day, these Chats we are having will be punishable by jail or imprisonment.
We are not Democrats…We are not Republicans…WE ARE AMERICANS.
We must all come together and realize we have made a mistake in whom we made President. We…AMERICANS…”must” elect Men and Women of high character. Politicians that believe in the Constitution.
God Bless America!
And America…Bless God!
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