Presidential Candidates Not Talking Much About Helping Housing Recovery
As I was listening to the presidential debates the other night, I was curious to hear what each candidate had to say about what they wanted to do to push the housing recovery ahead. Well, it was not a main point of the debate so I started digging up the details on my own. It turns out that each candidate will mainly continue with what is already in place.
The two candidates apear to have primarily the same opinion, but with a couple deviations. According to dsnews.com:
"When it comes to the continuation of current housing policies, both President Obama and Governor Romney largely agree. For one thing, both candidates support selling off government-owned REOs to investors, a process that has already been tested to some success. Both favor the greater use of foreclosure alternatives, promoting a shift toward short sales and deeds in lieu of foreclosure. And both share at least a small section of common ground with regards to principal reductions."
The opinions that differed were that Obama wants to allow principal reductions on underwater homes with no repayment, while Romney wants principal reductions with the bank receiving a percentage of appreciation after the sale or refinance of the home. The statements that were unique to each candidate were Obama pushing for more homeowners to be allowed to refinance at current interest rates, while Romney wants to loosen the credit guidelines for potential buyers to obtain credit for purchasing.
The limited attention to the housing recovery appears to say that both candidates appear to think that the housing recovery is already in full swing, and that they don't need to step in to help move it along. Does this mean their advisors are confident enough in the housing recovery that they don't need to provide further assistance?
The figures below, taken from the following link, show the current market stats for Hudson with short sales and foreclosures making up only about 20% of the current inventory on the market. Therefore, the amount of distressed properties in our area have dropped off considerably on their own. Maybe there is a reason they are leaving housing alone at this time?
| $269,480 Median Listing Price | 89 Median Days on Market | 253 Active Listings |
19.4% Distressed Listings
|
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Rich Petersen
1:09 pm on Saturday, October 20, 2012
What about the Fed's new quantitative easing that is now buying $40 billion in mortgage backed securities? Instead of using taxpayer funds they are just printing new money to give to the banks, potentially causing inflation. This is just another bailout boon for the banks to dump bad mortgage loans while they continue to sit on $1.6 trillion in reserves. See http://money.cnn.com/2012/09/13/news/economy/federal-reserve-qe3/index.html
Instead of repeating this failed bailout policy, the government needs to be investing money where it will actually do some good and prime the economic pump.
The two major party candidates are primarily on the same page on most issues. Both are owned by Wall Street and haven't done jack for Main Street. There are other Presidential candidates with better ideas. Three of them participated in an expansion of the latest Presidential debate which you can watch or read about at http://www.democracynow.org/2012/10/17/exclusive_expanding_the_debate_with_third
Jim Bob
9:48 pm on Sunday, October 21, 2012
Rich, I took a course in money and banking years ago. Not sure if it still applies. What's you background and education in economic theory? What do you recommend we read to better understand this situation?
Rich Petersen
12:26 pm on Monday, October 22, 2012
Jim, I have an engineering background and I'm not a banking expert, so I'm probably in the same boat as you trying to understand the economic issues involving the banks. I was surprised to hear about the $40 billion per month being spent and started looking for more info. In general I just search the Internet for pertinent information.
As far as QE goes, wikipedia has a good basic description - http://en.wikipedia.org/wiki/Quantitative_easing
Here's the rational from the horse's mouth - http://www.businessinsider.com/federal-reserve-decision-2012-9
Here's a link to a more skeptical blogger which I think makes some good points - http://theeconomiccollapseblog.com/archives/qe4-the-big-wall-street-banks-are-already-complaining-that-qe3-is-not-enough
Jim Bob
1:30 pm on Monday, October 22, 2012
From what I have read and heard on the radio, two major focus points of the Fed are (1) to keep inflation under control and (2) to keep unemployment down.
It appears that the the inflation rate is in check. YTD the average monthly i rate in less than 2%.
http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx
The unemployment rate peaked at 10% in Oct. 2009 and has slowly trended down to 7.8% in Sept. 2012. This downward trend has been happening over the course of the QE infusions.
So it appears that the Fed is using the QE tool to decrease unemployment. Inflation seems to be in check and there is little evidence that the is too few dollars chasing too many goods to cause an unexpected spike in inflation.
http://data.bls.gov/timeseries/LNS14000000
Given a choice, I'm sure Americans are more concerned with getting people back to work than worried about a slight increase in inflation.
I am with you on the two major party candidates. Even George Soros says having Obama or Romney in the White House won't make much of a difference. On the Democracy Now site, Dr. Jill Stein talks about QE, but I'm not sure her background gives me confidence in her having a good understanding of QE.
Will you be voting for a 3rd party candidate? I've heard Gary Johnson interviewed a couple of times. He is the Libertarian candidate and has many interesting things to say.