The recession in the US continues. Thousands are jobless. Home values have plummeted. How did it happen?

DO YOU REMEMBER WHAT HAPPENED?
Low interest rates and easy credit conditions made it  easy for people to take home loans. As more and more people took home loans, the demands for property increased and fueled the home prices further. As there was enough money to lend to potential borrowers, the loan agencies started to widen their loan disbursement reach and relaxed the loan conditions. Then, many people with low credit scores and others who took advantage of the low interest rates began to default. Our government bailed out the lenders leaving the borrowers to survive on their own. Illegal irregularities were over-looked. No one went to jail. Our national debt increased to levels that are truly unmanageable. 

YET IN TODAY”S PAPER . . . 

. . . in the Bay Area and other hard-hit markets, Walnut Creek-based PMI Mortgage Insurance Co. and other providers lowered minimum down payment requirements from 10 percent to 5 percent for loans up to $417,000. Minimum credit score requirements were also lowered.

Federally-insured FHA loans have a minimum down payment requirement of 3. 5 percent.

In April, Raleigh, N.C.-based Genworth lowered its down payment requirements from 10 percent to 5 percent and credit score requirements from 720 to 680 for home loans taken out through lenders in California, Arizona, Florida, Michigan and Nevada.
— http://www.contracostatimes.com/business/ci_15758696

AND STILL COMING DOWN THE PIKE . . .

More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans.
— http://money.cnn.com/2008/06/05/news/economy/foreclosure/

HOW CAN THIS BE?
Recent events have taught lenders that they will be rescued if the market and/or borrowers head south. Lenders have learned they can justify low down payments by emphasising that everyone should have the American dream of home ownership (Regardless of their ability to pay for it.). Certainly no politician is going to disagree. And at Wall Street and the investment banker “gangs” – business is as usual, right back to normal. Money, money, money. Derivatives continue to be sold which for the buyer in most cases is like playing poker with 48 cards and a blindfold (the other buyers and sellers have the missing cards and no blindfold).

WHAT IS COMING?
Someday, in the not too distant future, the financial crisis that was artificially slowed by government bailouts and meddling will be back. Nothing has really changed since 2008. The same systems, players, rules, etc. are still in action so common sense tells us that yes, it will happen again. But this time, there is no more money to bailout the wheeler-dealers when the house of cards comes falling down. This time the drop will be all the way to the basement. You don’t have to be a financial guru or wizard to see the inevitable. Be ready.

I drove to San Jose to check out the new Sprinter dealer. Needless to say, they don’t know a great deal about Sprinters yet but they are eager to learn.

They are adding onto their showroom so as to have a Sprinter or two inside. Their maintenance department is large and easy to get into with a nice customer waiting area with wireless internet. While there I ordered a part and that process is just as you would expect it – part came in within 48 hours.

I spoke to Will Eugenio and asked about a pricing schedule. I suppose they are still working on it as I have not received it yet. I am curious how competitive they will be with Rocklin. So far they are high -this based only on pricing one thing, a quart of Mobile 1 ESP, for the Sprinter. Beshoff=$8.00, Rocklin=$6.85, Pleasanton (does not service Sprinters)=$6.45. Until we get the price schedule, we can only guess.

There is a new MB Sprinter dealer and service for the bay area. Located at 3000 E. Capitol Expressway in San Jose, Beshoff Motorcars just popped up on my radar. They are a lot closer than Rocklin although, Rocklin Mercedes is a hard act to follow.

I will head that way tomorrow or the next day to grab some photos and check out pricing. They plan to have Sprinters in the showroom and all ready have a hoist that will lift the Sprinter full height (Rocklin has yet to install a hoist like this.) No Sprinter information on their website yet. In fact the website is canned not completed. Entries like this, “Visit our parts department, located at 95148 . . . .”  and no staff listed are dead give aways.

Why can a fly find an open window to get inside the Sprinter but can’t find the same open window to get out?

Speaking of flies, what about the ones that fly around in a square patten. Do they need permission to land?

Why does Presley (dog) wag his tail while Pebbles and BamBam (cats) do not?

Why does my Zune, with 2300 songs in the library, play only about a 100 over and over again?

Why are my tools always scattered about? I have three tape measures yet I can never find one when I need it – just like my reading glasses.

Why do I have 90 cubic feet of Halloween and Christmas decorations and why do I still store my old books from college?

The last three days I helped out at the stand down*.  There were over 400 veterans there to take advantage of medical, dental, legal and social services. They were bused in from areas around the bay. I met one veteran who hitch-hiked from Sacramento.

They got a chance for hair-cuts, showers, new clothes and shoes, listened to some great music and had some terrific chow. They had access to assistance from the DMV, Social Security Department, the court system and the VA.

For me it was lots of fun. I met many volunteers, some I am sure I will see again at other events. I had a chance to talk with many of the veterans there who were having hard times. That in itself was good therapyfor me. Many service organizations were there, like the Red Cross and over 1,000 volunteers. We also had volunteers from all branches of the military – what a dedicated bunch they were.

The East Bay Stand Down is the only four-day Stand Down in the United States, and offers the most comprehensive array of services and largest number of supportive volunteers to be found anywhere.

Stand Downs have proven to work to help break the cycle of homelessness. Our participants earned this help by virtue of their heroic service to our country in a time of need. They have proven they can complete tough assignments under difficult conditions. East Bay Stand Down is here for our valiant veterans today, to help them remember and reconnect with that time of service and rediscover the strengths within them to make a lasting difference in their lives.

The stand down here in the east bay is held every 2 years. I hope to see some Sprinter/SMB volunteers there in 2012!

*Stand Downs were named in Vietnam for the relatively safe times following battle when combat troops could get a shave, shower, clean clothing and other comforts. The term was used again twelve years ago by the Vietnam Veterans of San Diego to describe a way to help displaced vets. Since that time, there have been hundreds of Stand Downs held throughout the country.

Driving home we passed Mosquito Lake, Lake Alpine and through a very cute town, Murphy. We continued the limited freeway route only jumping on near Manteca.

We timed it perfectly. We were out of wine, out of gin, out of money, out of vacation time, out of Starbucks, and out of firewood. We still had clean clothes having done the laundry at Ft. Collins, Colorado but with just 2 Fat Tire beers left (brewed in Ft. Collins) we were close to be desperate and homed in on the driveway like a cruise missile tracking the donkey carrying Osama bin Laden.

I think Presley was the only one who would have kept going. Riding for days, looking out the window, it is his idea of doggie heaven. Now he is back to the cats and just the park.

Time for the news and a martini. I’ll shower later.