A Thank You to Senator McCain and the GOP from an Obama/Biden Voter

Senator McCain's concession speech set the right tone

Senator John McCain spoke with such eloquence in his concession speech last night that time and again I wondered, "Where was this John McCain of old during the campaign, Senator?"

Everytime the Senator mentioned the new President Elect or his name, members in his Arizona audience would boo like partisan robots shaped by Pavlov brainwash from Rush, Bill, and all the other amplifiers of attitude we've allowed to take over political discourse in this election and every election in the past 8 years. In response to the boo birds, Senator McCain gesticulated time and again with a tamping down motion of his hands and staring down his audience, in essence, telling them, "Look, the campaign is over. Show some respect. This is no time to act like out of control kindergartners."

Yes, Senator McCain, you showed something last night which you rarely showed in your campaign appearances where audience members would shout out "Terrorist, Socialist, Communist," even "Kill Him!" whenever you or your VP nominee invoked Senator Obama's name: CLASS.

Had you showed more class on the campaign road by telling the worst element of the GOP crowds to knock off the fascist rally responses, you might have picked up more votes from Independent voters.

Regardless, I don't wish you ill. And I hope you decide to retire from politics and takes some much deserved vacation time with your wife and family. You deserve the rest.

Also, let me thank the GOP

I'd like to thank the way the GOP mis-handled the VP nominee for this year, Sarah Palin.

By making her unavailable to the Mainstream Press for most all of the campaign, you showed how little you believed in her ability to think and speak on her own. By bringing this obvious not ready for prime time neophyte more attention to her lack of press conferences, you opened up a barrage of investigation into her past. And what a sordid past this woman has! This woman has lied more than any Republican since . . . oh . . . Dick Cheney.

Now that Sarah has become a laughing stock for comedians everywhere, let us hope the Centrists in the GOP will take back their party from Neo-Cons and Pentecostal Taliban and agents of intolerance such as Rush Limbaugh, Bill O' Reilly, Pat Robertson, and preachers who do not want a separation of Church and State and who think Science is Satan Incarnate.

Let's hope the GOP will rid itself of religious quacks, Chickenhawks, Family Value hypocrites and sociopathic corporate plutocrats and kleptocrats, and bring back some sane Conservatives to prominence who preach balanced government, true democracy, and an unwillingness to plunge this nation into illegal wars.

If the GOP learns no lessons from this huge misfire of partisan politics as usual, then it will be relegated to the trash heap like its precursor, the Whig Party.

Hello, World, we're back!

This Nation is now going to rejoin the world.

We will not have time for cretins who believe their God is the only God, that humans once roamed the Earth with dinosaurs, that Science is balderhash and education something an "elitist" would seek.

Our newly elected President, Barrack Obama, is already a favorite overseas as the man shows more diplomatic skill than anyone since Dean Rusk. He's a man who listens, who doesn't rush into decisions blindly without weighing opinions and advice from all sides. Best of all, he doesn't cater to Neo-Cons or Taliban types from any religion.

Lastly, the man is Presidential. When he speaks, he speaks like an educated man, not a dimwit frat boy who skated through life on his daddy's legacy and the Affirmative Action his daddy pulled for him in college, the Air Reserve, business and government.

President Barrack Obama stands on his own merit. He stands on his own two feet. And he's surrounded himself with the best minds in all facets of government, business and Science.
Lastly he challenges our Country to be great again.

So folks, I'm no longer feeling depressed, gloomy, ready to pack up and move to Canada.

A new morning has broken upon the planet and the sun seems brighter and friendlier.

My hope has been rewarded. My faith in the American people has been rewarded.

It's "get busy time" and it's going to take a lot of work to help this new President of ours right our Economic ship.

We will rebuild our infrastructure.

We'll bring our troops home from foreign lands where they have no business being.

We'll invest in alternative energy to make us less dependent on oil.

And, with the grace of our intelligence gods, Osama bin Laden will be brought to justice once and for all.

I'm looking forward to the next four years like no other years since I was kid in the 60s and President JFK said we'd land on the moon in 10 years time.

Again, John McCain, thank you for the conciliatory tone in your concession speech. I hope more Republicans take your tone.

Again, thanks GOP for trotting out the same old Karl Rovian approach to politics which no longer work. It made Senators Obama and Biden look all the more classy and less partisan. And it tells your party leaders your party needs to change.

President Obama and Vice-President Biden, I hope you use this goodwill you've brought us to change the Country . . . and the world . . . for better. May your light shine brightly in our darkest hours.

Over and out on this historic morning in America and the World,
November 5, 2008,
DJ Rock

One in Three Florida Borrowers for Home Loans Owe More than Their Homes are Worth

As housing inventory grows in Florida, prices continue to fall, and foreclosures continue to grow.

I just read a Time Magazine article this morning while standing in line to vote. This article, titled "The Housing Bust: Signs of a Bottoming Out?" had this to say about the Miami skyline and inventory:

The last piece of the last residential construction crane in Miami is coming down this week. Don't expect to see another crane in this city for a decade, says Peter Zalewski, a real estate broker and founder of Condo Vultures, a realty intelligence service. Miami is both a metaphor and model for once torrid real estate markets that melted in the subprime debacle. Miami developers threw up some 23,000 units beginning in 2003, many of them bought by speculators who thought they could flip them for a quick profit. Some did.

Then the music stopped. "Our best guestimate — and we've talked to lenders and developers — is that you will not see a residential construction crane in the sky in downtown Miami for a generation," Zalewski told TIME. "Well, at least seven years," he said before modifying his forecast yet again. "Let's go with a decade," he finally concluded. Let's. The latest Case-Shiller Home Price Index for a 20-city composite showed that prices recorded a 1% drop in August and were down 16.6% for the past 12 months. Miami had a 1.8% monthly drop and a 28.1% tumble over the past year; in San Francisco, it was -3.5% monthly and -27.3% for the year.

I can't imagine being trapped in a fast depreciating asset like a home or condo which no one will buy unless I drop the price dramatically.

The problem I'm seeing in the Florida Keys with fast depreciating homes is this: they haven't depreciated to the point, yet, where buying one is cheaper than renting.

Why buy when renting makes more economical sense?

Why buy an asset like a house when you know the market is flooded with inventory? More foreclosures coming down the pike will continue to place pressure on median prices to slide. And as foreclosures are sold as REOs or short sales, everyone of those sales becomes a loss on some bank's books and entered into the MLS as a huge hit to median home prices. Thus, the Housing Crash will continue well beyond 2009 and 2010 in Key West and all of Florida.

Furthermore, why buy a overpriced depreciating asset which has hidden costs such as insurance, taxes and maintenance climbing more quickly than inflation?

Not only that, but few new condo buyers in Key West, Miami, or anywhere else in Florida have done the simple math on monthly fees tossed in by condo associations. I'm amazed at how shocked some new condo owners are when they figure in their "condo fees" to that deal they thought the were getting. These are smart people who've put aside downpayments, waited while prices declined, and somehow jumped into a condo today at what seemed an okay price without figuring in insurance and the loathsome condo fees.

And then there's this to consider:

1.2 million Florida mortgage holders owe more than home's value

I read this article Friday online from the Palm Beach Post which shows just how bad homeowners in Florida are taking it on the chin:

No need to put a fright mask on these numbers: Nearly one in three Florida mortgage borrowers owed more on their loans than their homes were worth in the third quarter, according to a report issued Friday.

Fully 1.2 million of Florida's 4.2 million mortgages - 29.2 percent - were upside down, said First American CoreLogic of Santa Ana, Calif.

If home prices dip another 5 percent, nearly 200,000 more Florida borrowers would slip under water.

Further price declines seem a near certainty as foreclosures soar and job losses mount.Moody's Economy.com forecasts a 10 percent price decline in Palm Beach County, while Veros Real Estate Solutions predicts a 15 percent drop for Palm Beach County and the Treasure Coast in the coming year.

It all adds up to a gruesome picture. With so many homeowners under water and the job market weakening, foreclosures are likely to rise, said Sam Khater, senior economist at First American CoreLogic.

This Recession will continue to kill housing. As more jobs are laid off, more commercial and residential real estate will become vacant. As rental vacancies rise, rents will continue to come down.

As an example: condo fees in my condo (I rent) out here by Key West Airport just went up at a time that condo sales prices are fetching 50-60% less than they did just three years ago. We've got a new condo manager who just increased maintenanc fees with board approval. And still, 2 bedroom condos with 2 bathrooms just like the one I'm renting for $1600 a month are now asking $1400-$1500 a month. These new rental prices have dropped in just a few months time.

Out at West Isle Club, they've brought in a new manager to replace the manager who had been their 15 years. Eventhough their rents have not gone up or down, West Isle has just completed massive renovations of empty units, adding new carpet, new wallboard, new paint, and all new stainless steel appliances to 1, 2 and 3 bedroom apartments. So, renters are getting more bang for the same buck at West Isle, which no longer has waiting lists to move in.

Everywhere I look, there are apartments remaining vacant for months in Key West. And I know the trend is the same in Miami, Ft. Lauderdale, Fort Pierce, Tampa, and now even in Ocala. You see ads on craigslist everywhere for "First month's rent FREE!" in all of these locales. It's another sure sign that landlords are desperate.

Yes, Florida, we are in an deflationary spiral for apartments, condos, houses, businesses, cars, boats . . . you name a durable good, and it fetches far less than it did just three years ago.

Car lots are filled with inventory. New car sales are the worst since World War II.

Marinas down here are renting parking space for repoed boats.

And now apartment landlords are sticking rental signs for airport condos on grassy road medians blocks. These desperate landlords are looking for warm bodies to fill their vacant condos and rescue their bad decision to buy "investment" property at the market top. Yep, rental wars sure are nice for us renters, but not so good for landlords with a decreasing pool of good candidates as the Tourist Recession continues to end more jobs in Key West.

By the way, unemployment for Augusts 2008 was the highest in Key West since 1994 . . . and maybe longer . . . but the Chamber of Commerce records only go back that far. (See page 20 of 29 for unemployment stats.)

We're now at 4.8% unemployment in Key West, but if you look at all the homeless people camping out for the night at those bus shelters built for advertisers along every road in the Keys, you know homelessness is dramatically up. (One of my favorite homeless guys has claimed the bus shelter directly across from the swank Hyatt Beach Club by the airport. That shelter has an ocean view and I've never seen one person wait there during daylight hours for a bus. But the ad for Comcast on it's side hasn't changed in over a year. The only user of the shelter is this homeless guy who claims it at night.)

Add all these speculators and homeowners in Key West who are still scraping by, keeping up with their mortgages, but whose loans are now under water (look at all the Realtors who bought Smurf Village quad-plex condos in New Town for $550,000 at the market top and who are now trying to arrange Short Sales for $180k-$200k) and you've got many more years of painful wrenching down of housing prices, for sure.

All these speculators and homeowners in Key West who are one paycheck away from being homeless because they are spending all their hard earned money trying to keep up with their loans, taxes, insurance and maintenance are in the same hard spot which other Floridians are in. As the Palm Beach Post article also stated,

It all adds up to a gruesome picture. With so many homeowners under water and the job market weakening, foreclosures are likely to rise, said Sam Khater, senior economist at First American CoreLogic.

"There's a large percentage of very vulnerable homeowners," Khater said. "If they lose their job, if they run into some kind of health problem, or divorce, they might just walk away."

Most homeowners will hunker down and continue to make mortgage payments in spite of the downturn, Khater said. But negative equity adds a toxic new ingredient to the housing market witches' brew.

"We've created an entire class of homeowner that is very sensitive to price changes," he said.

During the height of the real estate bubble, buyers routinely made small down payments and took adjustable-rate mortgages. And many homeowners refinanced to take equity out of their homes to fuel spending. That worked when prices were rising.

Now, though, the nightmarish rise of negative equity is sapping wealth and sending Florida's economy into a tailspin. Palm Beach County's jobless rate has doubled in the past two years, while St. Lucie County unemployment has hit double digits.

It wasn't different "this time", was it Realtors, Lenders, Appraisers and Builders?

You can't pyramid forever. Every pyramid has it's point at the top. Stand on it for too long, and you will most certainly fall off.

I feel the continued slide of American, Floridian, and Key West housing is a 100% sure fire bet for all of 2009 and 2010. When will we bottom? I don't know. But I'll bet this: when we bottom, we won't do a "V" ascent from the bottom. We'll do a hockey stick "L" for many years, in my opinion. If you buy a home, you better buy it to live in and make damn sure it costs less to buy it and run it than renting. Otherwise, why buy at all and become a miserable slave to the ball and chain of a house which you will have trouble selling in a market where lending is harder to find?

A Second Bradenton Bank Fails: Freedom Bank Taken Over by Fifth Third Bank

Another local Bradenton Bank is shut down by banking regulators

Today's issue of Barron's Magazine had a great article on regional banks which might be safe to invest in now as their tangible book ratios are at their lowest in years. One of the banks worth looking into was Fifth Third Bank.

As I perused headlines on Fifth Third, I noticed it had taken over a failing Florida bank, Freedom Bank of Bradenton, last Friday.

Knowing that Bradenton has already had one bank failure this year (First Priority failed earlier this year), I went in search of FDIC news surrounding Freedom Bank.

I also looked for a newspaper article using the Herald Tribunes online resource.

Here's the scoop

Swamped by millions of dollars in sour loans, Freedom Bank of Bradenton was shut down Friday by banking regulators.

Fifth Third Bank acquired Freedom's $254 million in deposits, and its four offices will open Monday as Fifth Third.

Freedom is the second Bradenton bank to fail this year, falling three months after First Priority Bank. It is the nation's 17th bank failure of 2008.

"In my 27 years in Florida banking, I don't think I can recall two banks failing in the same year in the same town," said Sarasota banking consultant Tramm Hudson.

Both failures reflect the aftermath of the real estate boom-and-bust that has crippled banks here and nationwide. Critics have questioned the two Bradenton banks' fast-growth strategies and whether they traded caution for loan and growth deals.

The Florida Office of Financial Regulation seized Freedom at the close of business Friday.

The Federal Deposit Insurance Corp. was appointed receiver to liquidate its assets.

Deposit customers of Freedom automatically become customers of Fifth Third.

Some observers had circled Oct. 31 for Freedom's demise. On Friday, the bank issued its third-quarter earnings report and the FDIC released a cease-and-desist order showing Freedom had missed a deadline to replenish its capital base.

Freedom lost $3.2 million in the quarter, bringing its year-to-date loss to $18 million.

The cease-and-desist order, issued Sept. 5, directed Freedom to, within 45 days, raise millions of dollars in fresh capital and boost its basic "tier 1" capital ratio to 8 percent.

That key measure of financial health had evaporated to 2.0 percent, or $5.4 million, putting the bank just above the "critically undercapitalized" level.

"This bank was just too far gone to be saved," said FDIC spokesman David Barr. "It got to the point where the bank had to be closed."

To which I will add this question: Have any of you Key Westers who use Wachovia talked to your local branch manager since Wells Fargo took them over? I wonder, because I still see the Wachovia sign up on North Roosevelt Boulevard and I'm wondering when Wells Fargo will put their imprint on checks, savings deposit slips, and of course, the signage out front?

Lastly, none of you should be reminded to get out there and vote today. Polls open in about two hours in Key West. I'll be over there with Cafe con leche in hand.

As always . . . caveat emptor,

Rock

p.s. Soon after this election, I will be discussing stocks I've been buying during last month's crash. I've never seen so many bargains in blue chip/buy and hold for life stocks. When you have companies such as Con Edison which has never missed paying a dividend since 1885 or a company such as Proctor and Gamble selling for far less than their Enterprise Value (the cost it would take to set up all of the company's factories, supply lines, offices, inventory, work force staff, etc.) then you know panic selling by hedge funds, mutual funds, pension funds and other highly leveraged players are offering you one of those very rare open windows of opportunity which must be seized before it shuts.

These are the moments in History where you wade in like Warren Buffet (who is a big big buyer of equities at this moment) and buy sound companies you may have been holding off from buying for the past ten years.

I'm still gun shy on most financials, insurance and real estate issues, and I certainly think it's going to get much worse in retail land.

Thus, I am buying necessities and consumer staples. Some of the stocks I've been buying in these areas are paying double digit yields for dividends. The dividends alone will bail you out if the market goes sideways for another 5, 7 or 15 years.

Just remember the law of 72. Meaning if you find a investworthy stock throwing off say a 12% yield at this time, within six years (12 x 6) you will have doubled your gains by simply reinvesting your dividends back into the company's share's you originally bought.

I can help any of you set up automatic dividend reinvestment plans through your online brokers and without requiring you to contact the company you want to reinvest your dividends. It's a very simple process with Fidelity. Ameritrade takes a bit more work, but it is doable in one-half hour.

That said, I highly recommend everyone take a bit of your take home pay and invest it weekly or bi-weekly into a Roth IRA which you fund with necessity and consumer staple stocks which will not lose Enterprise Value as we go further into this Recession we are in (and which will get much worse going forward.)

If this Bear Market continues force stocks down or sideways for longer than a year, I will be a very happy investor as the longer my stocks reinvest dividends at cheap share price, the more shares I will have to amp returns when the market returns in 5, 10 or 15 years.

Hell, this could take 30 years to turn around. Meanwhile, my stocks selling necessities such as razor blades, electricity, water, oil, will be building a healthy nest egg throwing off more dividends quarterly and reinvesting those dividends into more shares which return even more dividends the following quarter.