Who Do YOU Believe?

As part of my series on the Who, What, Why, When and Where of this tragic tale...

I present the WHO.

Today, we see that Fannie and Freddie are once again on the verge of collapse. But wait... here comes Uncle Sam to the rescue. You know... the government bailing them out.

Who let this happen? Who is going to fix it? Who is going to pay the price?

Easy. We did. We are. We are.

Why "We" and not the banks, brokers, agents, appraisers, financiers or the government? Really. Why not?

This is a question I've thought about over and over for the last 2 years. You see... I'm a mortgage professional. I've been helping people get mortgages for 19 years. I've been a broker and a banker. I've seen good credit and bad. I've watched thousands of people "over-buy" pushing for that sliver of the American Dream. All the while, lending standards slowly began to disappear ultimately, in my opinion, disappearing all together. When you can offer 100% financing on a NO DOCUMENT loan... there is no such thing as an underwriting standard. As a matter of fact, there was, if you will, no such thing as an actual underwriter during that time. Sure, there were people called underwriters, but essentially all they did was check to make sure applications and disclosures were signed and dated correctly but beyond that... well.. you can do the math.

There's a finger pointed in every direction on this one. The banks are pointing at the appraisers and the brokers. The brokers are pointing at the banks. The appraisers are pointing at the brokers and the banks. Analysts are pointing at the Government. Analysts are also pointing the finger at the banks, brokers, appraisers and the buyers.

My first inclination was to point the finger at the Government. After all, it's our Government who encourages things like spending our tax rebates. It's our Government who encourages us to borrow more and more. Just look at what they do... our National Debt is crushing us. We borrow.

Then it hit me. Our Government. We, the people. Sound familiar? We are the Government. We are the banks, the brokers, the appraisers, the financiers, the representatives, the agents and the buyers. We did it. We knew it wouldn't last. We did not want to believe it could end, so we turned the other cheek and ignored the problem. It's all of us. It's our fault. We have no one to blame but ourselves.

The real question here is "Who will fix it?"...

We will. How? Well, that is the 65 million dollar question, now isn't it. One thing I can tell you is that our current form of Government won't do it. They continue to lie to us on a daily basis about the severity of the problem.

Remember the subprime issue? That was a good one. According to Hank Paulson, Ben Bernanke and company, that was over oh... about a year ago. Remember the housing market? Didn't that bottom out 5 or 6 times now? Consider New Fears Of A Fannie and Freddie Bailout Hit Shares and Foreclosure Plague Widens, both recent articles from CNN on the ongoing and widening process.

Freddie Mac is continuing to assert the insane fact that they are adequately capitalized. Please. Stop lying to us. Our Government continues to attempt to artificially prop up already INSANE housing prices by passing meaningless bailout legislation like the Housing Bill just inked. PLEASE... STOP LYING TO US.

WAIT... If WE are the Government, aren't we STILL LYING TO OURSELVES??

Really, America... Who HAVE we become? WHO ARE WE?

Self respect has disappeared.

Coming Soon To A Digital Download Near You: The iTax

My series on the WHO, WHAT, WHERE, WHEN, and WHY of the credit crunch steps aside briefly...

And on a humorous note (though not really, if you think about it), I've come across this little tidbit:

A Proposed Tax on Digital Downloads

Interesting read. The basics are simple... you download a 99 cent song from iTunes, you pay the state sales tax. I'm not going to bore you with the details... click the link above to read the article.

One thing I did think was funny, though, was that the guy from NetChoice, and industry tech group lobbying against the tax uses the argument that downloads are eco-friendly as opposed to all the pollution casued by transporting CD's to and from stores.

"With global warming and a world that's running out of oil, the last thing
governments should do is add taxes on something that uses no oil and produces no
carbon," said Steve DelBianco, executive director of NetChoice. "A digital
download is the greenest way to buy music, movies, and software, since it
requires no driving to the store, no delivery vans, and no plastics or

Really. That's funny.

The dollars and sense of it, however, tell a consistant story. As you
can see from the article,

"Including Nebraska and Tennessee, there are 17 states, plus the District of Columbia, that tax digital downloads, according to our earlier research: Alabama, Arizona, Colorado, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Maine, New Jersey, New Mexico, South Dakota, Texas, Utah, and Washington."

Anyone in any of those states realize this? It would be interesting to know.

Anyway... look for this idea to gain support nationwide and even and attempt to push this to a congressional vote. Keep in mind I said attempt.

Regardless... states are hurting for tax dollars, as they, too, became serious consumers through this boom, and as foreclosures rise and employment falls, any thing that can generate significant revenue to shore up bleeeding budgets will be fast tracked....