Northern Trust under pressure...

[RJ_Daley]

...unethical business practice

oh, I see... right here in America you say?  There ought to be a law...

[Jeff Goldman]

"I know one thing.

Buying "American" isn't going to hurt the country or our citizens."

Wow.  Spoken like a true union organizer.  

How do you know if you are buying American?

Why is it good for us to be in the textile business?

Why do you favor such distortions of the free market?  While there is an argument to be made that in the short term "buying American" will make the stimulus plan more effective, in the long run, all it will do is make all of us poorer, except those folks being subsidized.

Patrick, what would happen if every developed country adopted the slogan you think we should?

What businessmen should negotiate our trade agreements?  The ones with signficant export businesses or the ones without?  

Where is Shivas when you need him?

On another front, I'm surprised at your view of wealthy Americans, who would be too churlish to donate when they only get a 28% deduction rather than 35 or 39%.  Wow, you really must think your friends are....not good people.

[Patrick_Mucci]

Cliff Hamm,

Wal-Mart encourages American companies to open Chinese factories.  In order to obtain Wal-Mart contracts or to continue relations with Wal-Mart, American companies are coerced by Wal-Mart to open factories in China.

It's not true that Wal-Mart encourages American Companies to open factories in China.

It is true that Wal-Mart encourges and/or coerces American Companies to open Factories, dedicated to the production of goods going to Wal-Mart.

It can be Mexico, Yugoslavia, China or anywhere.

Wal-Mart's reasoning would appear to be that they don't want middlemen controlling the product, they want the manufacturer to deal direct from manufacturing to their shelves.

Many companies made the mistake of following that  encouragement/suggestion/directive, costing themselves enormous amounts of capital and debt, only to be forced out of business due to other circumstances, including other vendors.

There's a general rule in E&O insurance whereby the insurance carriers get nervous when any one client controls more than 5 % of another companies business.

There's safety in numbers.
Having 1,000 clients is better than having 10.
Having 100 clients is better than having 1.
When your businesss goes to one or two or three customers you're at risk in many ways.

Those companies that accepted Wal-Mart's encouragement/suggestion/directive did so at their own peril.

In the book, "Call Me Ted", by Ted Turner, he addresses the difference in philosophy between men who create and build businesses and executives who merely manage them.

When you have no skin in the game, be it ego, pride or your own money, and when you're using OPM, not your own money, your decision making process is different, you can afford to be more cavalier because your money isn't at risk.

P.S.  Look at how the financial markets have responded to the Stimulus
        Plan.

[RJ_Daley]

Why do you favor such distortions of the free market?  While there is an argument to be made that in the short term "buying American" will make the stimulus plan more effective, in the long run, all it will do is make all of us poorer, except those folks being subsidized.

Jeff, I assume you mean we'd all be paying more for our manufactured goods.  If that is right, I can't disagree.  But, can you give us some estimate what price differences might be like on life style staple goods, like a big screen TV, car (cost of Toyota or Nissan VS comparable Chev or Ford made here)  wash machine etc?   Do you think we'd pay 10%, 20% more etc, if same items were made here?  How does that sort of trade protected price compare to higher tax rate of 5% or so for those making, say 250K-1MM a year?  If we don't protect our goods a maybe pay more of those goods, to try and save jobs, but don't raise taxes at levels of income that can afford it, what then?  What alternatives do we have to maintain wide open if not unfair trade policies, and not protect our job market, even if the goods cost more?  I know, the little guy is hurt most by raising prices of goods, that may be protected from unfair cheap labor competition.  But, if the little guy's taxes are lowered or even the same, and those that can afford more tax can make up for this, what is the rationale to let things keep sliding as they are, and not reverse the course and try the other way for a while?  If I am terribly wrong, I'll take a good old fashion schooling and trip to the woodshed from you before a Limbonian screed.  

[Patrick_Mucci]

"I know one thing.

Buying "American" isn't going to hurt the country or our citizens."

Wow.  Spoken like a true union organizer.  
How do you know if you are buying American?

Labeling's a good start

Why is it good for us to be in the textile business?


For a start, because it's a business that employed millions of workers

Why do you favor such distortions of the free market?  While there is an argument to be made that in the short term "buying American" will make the stimulus plan more effective, in the long run, all it will do is make all of us poorer, except those folks being subsidized.

I don't agree with that.

Patrick, what would happen if every developed country adopted the slogan you think we should?

Developed it, hell, they perfected it over the last 50 years.

The U.S. was prevented from exporting a broad range of products to foreign countries.  Where have you been ?

What businessmen should negotiate our trade agreements?  The ones with signficant export businesses or the ones without?

I'll start with Donald Trump.
He's bright, brash, patriotic and knows where and how to get the backup talent necessary to negotiate favorable trade agreements.  

Where is Shivas when you need him?

On another front, I'm surprised at your view of wealthy Americans, who would be too churlish to donate when they only get a 28% deduction rather than 35 or 39%.  

If you don't think an 11 % increase in cost is an impediment, you're not in touch with the fiscal realities of the current economic environment.

Wow, you really must think your friends are....not good people.


Oh, do you mean the people who already donate considerable sums to charity ?  The people who won't let you join their clubs unless you have a proven record of substantive charitable contributions ?

You must not be reading the papers, watching TV or using the internet for anything other than GCA.com.

There's a extremely severe financial storm we're experiencing.

Due to the poor economic climate, charitable contributions are going to go down irrespective of the tax rates.

However, they're going to go down a lot further if the deduction is reduced.

Are any of your friends going to increase their charitable contributions ?
 

[Craig Van Egmond]

Here's your chance to make a difference in someones life....

http://www.youtube.com/watch?v=qDC0qcf0kzE

[Lou_Duran]

Dick,

If I didn't like you so much personally I would have left your last post go without further comment.

The WSJ recently had an opinion piece from one of your favorite villains, Karl Rove, on the new administration's constant attempts to erect straw men to then destroy them.  You, Sweet, now Lapper, and a few others do the same with a certain regularity.  You guys attribute things to me, make up positions that I never took, and otherwise ascribe philosophical beliefs that I just don't hold.  Everything you find emotionally or intellectually uncomfortable is either a "sophistry" or a recitation from the so-called Limbaugh playbook.  Why not address the individual item of debate on its own merits as opposed to deflecting it with such an unintelligent and offensively hostile manner?  You are too good of a guy and this really is beneath you.

Most everything I've said when I have invoked your name has come directly from your mouth (or, in this case, from your writing).  Where did you get that I am against collective bargaining?  Nothing could be further from the truth.  I hold the right to associate extremely high, though not the right of unions and government to collude and hold a gun to the head of corporations and other interested buyers of labor.  But we have talked about this at length before, so why would you make something like that up?

You are a fine one to preach to me about opportunity.  I remember in the winter of 1967 when our refrigerator was a lard can in a storage garage that our landlord had at the back of an old house my mother rented.  Yeah, the one I had to shovel coal into a stoker for a bit of heat, when we had coal available.

You are damned right most people can rise above their station.  Except for those who have serious disabilities, anyone in this country who has the drive can succeed.  One doesn't have to be very smart or have degrees from $40,000/year colleges and universities either.   And with as many MBA programs available today, yeah, most any one can get one of those too!

Really, why do I bother?  Upbringing and culture are such huge factors refracting everything that happens to get through their highly selective lenses.  Another GCAer sent me an E-Mail saying that he could understand why I was frustrated given the attacks on me.  I responded to him that I was not, but maybe he is partially right.  I am definitely a little sad, but perhaps a bit frustrated as well with the futility of it all.  I suppose we will disregard history once again and have to take a few extra doses of some very dibilitating medicine.  And I think I am now done with it.    

[RJ_Daley]

What businessmen should negotiate our trade agreements?  The ones with signficant export businesses or the ones without?

I'll start with Donald Trump.
He's bright, brash, patriotic and knows where and how to get the backup talent necessary to negotiate favorable trade agreements.  

Pat, you are such a N.Y. state of mind guy!    All these problems should be turned over to Bloomberg and Trump.  Can't you come up with non-NYers?  

I have an idea... why not include some real labor leaders in these so-called trade negotiations.  Afterall, they have the most represented people being killed by these unfair trade agreements.   Talk about someone with skin in the game at the table.  Mr. Copeland CEO in the article link I provided above would seem to be another good choice...

[Bill_McBride]

Kelly,

   More likely was the situation where Madoff stayed close enough to the SEC that he knew exactly how they worked, invited no disbelief, and would realize how to avoid their regulatory reviews. The SEC was, as Markopolis said during his recent Congressional testimony, pitifully inept . I don't think he "paid them off" in any way....didn't need to. His modus operandi was to play himself as highly esteemed, a former chairman of NASDAQ and a market innovator. That way, this highly political regulatory body wouldn't allow much to touch him. (Btw...just look at their recent Pequot-Morgan Stanley-Mack investigation kibosh...same style of nolo-regulation).

   FINRA (ex NASD) on the other hand...... that remains a story for private messages (and probably future trial discovery).

Wasn't the woman who ran the SEC's alleged security law enforcement group recently promoted?  This would speak volumes to the SEC's approach.

Bill,

   You are a bit mistaken. Linda Thomsen, he SEC"s former head of enforcement recently resigned (under quite appropriate pressure). She was replaced with Robert Khuzami, a former federal prosecutor and general counsel of Deustche Bank. He is generally considered to be a very effective guy....we'll see?

S

Thanks, Steve, but i think I was thinking of Mary Shapiro.  What was her job before the current administration?

[Paul Stephenson]

When Hurricane Katrina hit New Orleans, did just ONE foreign nation attempt to raise funds from their citizenry to assist the victims of Hurricane Katrina ?

Pat -

The good people of Guyana donated $7,000 to Katrina relief via a telethon.

Adjusted for population and per-capita income, this is like us giving over $27,000,000 to Guyana.

Although this Foreign Policy article doesn't have the exact names on cheques, it does a pretty good job of outlining some of the contributors.  Direct contributions were given by: China, Brunei, Bangladesh, Rwanda, Afghanistan, and the winner with $96 million the UAE.  Other countries (Canada being one of them) sent their contributions via the Red Cross.

Looks like the US faced the same dilemma many countries do.  Getting the donated money and supplies to the people in need.

Link to article: http://www.foreignpolicy.com/story/cms.php?story_id=3575

[Steve Lapper]

Kelly,

   More likely was the situation where Madoff stayed close enough to the SEC that he knew exactly how they worked, invited no disbelief, and would realize how to avoid their regulatory reviews. The SEC was, as Markopolis said during his recent Congressional testimony, pitifully inept . I don't think he "paid them off" in any way....didn't need to. His modus operandi was to play himself as highly esteemed, a former chairman of NASDAQ and a market innovator. That way, this highly political regulatory body wouldn't allow much to touch him. (Btw...just look at their recent Pequot-Morgan Stanley-Mack investigation kibosh...same style of nolo-regulation).

   FINRA (ex NASD) on the other hand...... that remains a story for private messages (and probably future trial discovery).

Wasn't the woman who ran the SEC's alleged security law enforcement group recently promoted?  This would speak volumes to the SEC's approach.

Bill,

   You are a bit mistaken. Linda Thomsen, he SEC"s former head of enforcement recently resigned (under quite appropriate pressure). She was replaced with Robert Khuzami, a former federal prosecutor and general counsel of Deustche Bank. He is generally considered to be a very effective guy....we'll see?

S

Thanks, Steve, but i think I was thinking of Mary Shapiro.  What was her job before the current administration?

Head of (relatively short-lived) head of FINRA. She has, reputedly, remained above the sewers and cesspools of conflict that constitute that regulator. She's not my top choice for the job, but as I mentioned a while back to the eminent Mr. Huntley, I'm not sure they could find anyone who would take the post!

[RJ_Daley]

Lou, go back to in this thread or any other of these political-economic threads and see who it is that calls out the other first.  Or maybe who calls out the other "most" of the time.  I see you including me in your anti-socialist treatise and I respond.  If I generically refer to Limbonian sophistry and you answer it defensively, I can't do anything about that.  

And, I still find your comment of taking you wrong when you say you aren't against collective bargaining, then launch into the same old -same old mantra of free association and such (all the party line of union buster rhetoric) and then say I'm being harsh in calling out disengenuousness, is not credible in my book.  I remember you and another fellow at the Longshadow outting who is a dyed in the wool unionbuster just going hard and fast at the merits of such work.  

Something I don't think we preceive the same at all is you say "everyone in this country who works hard can succeed. One doesn't have to be very smart or have degrees from $40,000/year colleges and universities either.   And with as many MBA programs available today, yeah, most any one can get one of those too."  And me, I don't think that is quite so true as the years go by, the ecomomy separates out more have and have-nots.  You believe 'everyone', I think 'everyfew'.

You are a fiercely proud man, Lou.  I respect your fierce hard work and your 'lard can on the back porch refrig' origins.  Yet, you are a singularly risen up person, that did so in a better economic time, and I just bet there was some government help along the way, somehow.  I remember putting myself through the UW on my own when a bartending job could actually pay my tuition and living costs. Today, that same cost would be in excess of 20K a year and not many P.T. bartenders are making that.  And, with a buck and a half, and a B.A. degree you can still buy a loaf of bread!  The world and economic repression of underclass has gotten way more intense since your salad days, Lou.  Less job opportunities in the big picture, with some opportunity for the hard worker, but not like it was, IMHO.  But, you revel in that hard scrabble virtue as available to all, and I really don't think you see it from a current modern perspective of diminished opportunities, IMHO.  

I like that you argue vociferously Lou.  You are good at it.  Way better than I.  Way better writer than I.  But, neither of us has the truth and the light.  We need to argue.  And, we need smarter people than I, to educate people like me, and they need to have more plausible credibility.  I see that in a Steve Lapper sort of presentation over yours- not personal against you, just more convincing and credible and meaningful to less than fully educated guys like me who are looking for ideas, not regurgitation of how we got here.  I can get that watching c-pac conventions.

[RJ_Daley]

Dave, I'm still waiting on the India outsourcing of legal jobs response... 

You are correct Dave.  They aren't making 'joe averages' who used to harness themselves in behind the plow, and a piece of 40acre bottom land is all they wished for, anymore.  Ah, them was the good old days that should aspire and inspire these mamby-pamby joe the plumbers of today (not so much a plumber) indolents!  This all somehow demonstrates how repubs can trot out a guy like Worstlebocker and prop him up as 'joe average'.  They don't know what 'joe average' really is! 

Weren't you saying how it really isn't all that rosey for a pop making $150K and a mom pulling in $110K to maintain a nice house and lifestyle in these times.... If so, man, am I ever on a different planet than you!    Glad I'm in Green Bay and not Chicago!

[RJ_Daley]

Dave, I think you way overstate the displacement of workers in the 60s from Gary to Manitowoc.  It was Maniti American workers going up and very few Gary American workers going down, and I don't think they shut down US Steel at that point because aluminum pans became more popular and cheaper as innovation.  I'll bet the American jobs lost to gained was in favor of gained, right here in America.  And, they were still good paying jobs here in America, rep'd and supported as good paying by collective bargaining.  And, in the extreme, the guy in Gary can move to Manitowoc pretty easily compared to getting on a slow boat to Mumbai.  Yes, moving them to Mumbai is very different pertaining to this issue we are having.  Still no answer on your view of the merits of the outsourcing of legal work to Mumbai? They do thorough work, and much cheaper than here! 
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/10/AR2008051002355.html
Lawyer trickeration reigns. 

[RJ_Daley]

Dave, are really talking about the decimation of the will and spirit of that hypothetical couple you brought up, the one with Dad at $150K and Mom at $110K that took out a mortgage to buy a family dwelling, where their taxes would presumably be the same up to the $250K mark, and the extra 10K they make above that would go to 39%?  Those people would slit their wrists, give up, what?  

Now I have it figured out how you as a big city lawyer   can post on GCA.com all day.  You've already had your work load outsourced to India!

You are OK with that?  Well, if I were you, I'd form a lawyer's guild and fight it like hell!  I'm there in solidarity for you and your brother American lawyers.  Solidarity forever!  

PS:  No, I didn't know you don't do billable hours.  So, apply the question to those that do. 

[Jeff Goldman]

Patrick,

Just because some countries have been dumb enough to base their entire economy on exports, and are now suffering worse than we are because of it, doesn't mean that we wouldn't be just as dumb to base our economy on no exports.  Do you know what percent of our economy is exports?  What would the folks employed by export businesses do once they lose their jobs?  We do know that, by definition, trade adds to wealth, even with the trade barriers you decry; yet you want to make a mess with the greatest engine of prosperity ever created to help certain segments that haven't done well.  All I can say is [INSERT STATEMENT FROM LOU OR SHIVAS IN HIGH DUDGEON ABOUT THE GREATNESS OF CAPITALISM].  Here I am defending capitalism and trade as the best engine we have...and the supposed believers in our system come crying for help when their buddies making bundles can't hack it.

Well, let's bring back Smoot-Hawley and see how much worse we can make this economic disaster, and have China start dumping dollars in retaliation and watch the whole thing blow up.

[RJ_Daley]

Jeff, so what is it you see?  A status quo on the current trade atmosphere and an inexorable march towards what kind of economy?  A re-negotiated set of trade principles and rules?  Or a Smoot-Hawley regression to tarrifs that a not so well economics educated public, who are just plain hurting grasps for? 

[Brent Hutto]

Well, let's bring back Smoot-Hawley and see how much worse we can make this economic disaster, and have China start dumping dollars in retaliation and watch the whole thing blow up.

All it would take is one of the sainted "Big Three" going bankrupt, a double-digit unemployment rate and some provocation on the part of China or for that matter some terrorist nut-job. Then we'll see a protectionist suicide pact of Smoot-Hawley (or worse) impact legislated so fast our heads will still be spinning when it all blows up.

The demagogues are going to spin this whole mess as something that can be blamed on The Other real soon now. And they don't much care which The Other it is.

[Kalen Braley]

Why?  Because every itemized deduction is money that they're spending!

And remember, these people are probably under water on their house, and they're getting creamed by AMT and they're about to get whacked by their state income tax going up (they're taking about another 1% or more here in Illinois - Obama has opened the floodgates, and every hack state politician now thinks he can raise taxes under cover....)

Where the hell do these politicians think all the money is going to come from?

What is this country going to do when the 20 million or so of the most productive Americans (that aren't part of the 500,000 or so very, very rich) all just say "Screw it! This just isn't worth it anymore.  I'd rather make less than six figures, work 9-5 and laugh at the guys who work weekends getting ahead...?"

Shiv,

Thats an easy one to answer.  Its called Ouray, Co or better known as Galts Gulch from Atlas Shrugged.  Its where all the producers  went to hide from everyone else when things got bad and they built thier own society. 

http://en.wikipedia.org/wiki/Ouray,_Colorado

[RJ_Daley]

Brent, that is where real discussion, like this one is very badly needed on a big national scale, in the vane of 'we are all economists now'.  

I'm one of the ignorant regular citizens on the specifics, yet have heard the overall arguements against protectionism in general.  I asked many pages ago if it wouldn't be instructive and beneficial if well educated people debated those aspects of protectionism and in a modern day concept/context of "Smoot-Hawley".   I seem to believe that the arguments wouldn't be cut and dried classic economics, because so many things in the economic, technological, competivive world of different world power players and their modern governments is just different than 1920s.  The traded products are different, their impact on society is different, and the general welfare of the populations are different.

I just have to believe that there is a more beneficial set of relationships in the international trade arena that must be revised than the way it is today.  I agree that demogoguery is highly dangerous and destructive.  But, what can be done to assuage the rising fears among people that don't have an economists grasp of the issue?  Is all we have to fear, is fear itself, which will keep us above demogoguery and dangerous ideas?  

Do you see the current admin as educators of the population or demogogues?  How about previous admin in the demogoguery dept?

[Lou_Duran]

Dick,

There you go again!  You attributed things to me that I never said.  Here is my quote: " anyone in this country who has the drive can succeed".  Working hard is totally different than having the drive to succeed.  As Schmidt correctly noted, what is considered "hard work" today pales in comparison to what it was 30, 50, 100 years ago.  Also, one can work his ass off at a job that adds little incremental value to an employer and where he can be easily replaced- say stocking shelfs at Walmart- and not better his situation.  It takes the drive to acquire skills, new responsibilities, and the chance to prove to the employer a greater worth.

You say that I am a proud man.  I don't think I am, and if I have ever come across as being bragadocious, it was not my intent.  I have been open about my experience because I think it is relevant if not a little unusual.  I am on the record as stating that I don't believe I am extraordinarily smart, that I went to a large, public university, and that I have not been a particularly hard worker in comparison to many of my peers in the business world.  Golf has always gotten in the way of putting forth the extra effort that would have resulted in a higher standard of living, but making big money and joining half dozen top clubs have never been my objectives.

Immigrants to this country seem to be particularly sensitive to the availability of opportunities in this country.  Perhaps it is because their POV is calibrated on the realities of their native lands.  When your frame of reference is very meager, anything larger seems attractive, even opulent.   You dismiss my anecdotes about people who can't even speak English when they come here penniless and rise to substantial wealth and lifestyles.  It happens every day across this country.

And Dick, if I have ever attributed false beliefs to you and misquoted you in any way, please bring these examples to my attention so that I may correct the record.  The times I have brought up your name here are when it added to the points of discussion.  I am assuming that you are not embarrased by what you write and that you are willing to own the arguments you make.  Note that I never say you are deceitful, sly, false, pretentious, etc.


Jeff Goldman,

You are right on protectionism and charity (but little else  ).  If I was king and was named XiaPing or whatever it is that Craig Sweet wants to call me, I would get rid of all deductions including the one for charitable donations.  Philanthropy should be joyous and from the heart.  It shouldn't be directed or motivated by tax planning (memo to Warren).

Oh, I also liked your quote (from Keynes?).  If the stimulus package was only to restart the economy and not about social engineering.  And if we only had a tax code to raise only the necessary revenues for an efficient government as opposed to forcing a faction's notion of social justice!

And this time I am retiring from this topic. 

[Craig Sweet]

Shivas...


"We started out with an agrarian society where we basically had jack squat. "

Do you really believe that?  At the time this country was founded we were exporting raw material and manufactured goods to England...sure we were growing tobacco and sugar and exporting that too...but this country has been involved with manufacturing from the get go...at that time many of the successful people in this country brought their wealth with them from Europe.

[Patrick_Mucci]

How have the financial markets responded to the "Stimulus Package" ?

[RJ_Daley]

Lou, if you haven't really finished with this thread, you are right on the wrong transcription.  I'm sorry.  I attributed and copied your statement wrong, two words off.  I just typed the words "works hard " for "has the drive".  You then feel I materially changed your meaning.  I am sorry for that.  It was a mistake.

As for the rest, we still fundamentally have a different perception, obviously.  'Works hard', 'has drive', 'has ambition', still requires the element of opportunity to achieve success, I think.  I think opportunities aren't what they used to be, that the labor market and higher positions that require that "drive" to attain aren't as wide or as available as they used to be.  In some cases, opportunities have been hoarded and excluded from others more than they used to be.  I think it is somewhat down to math.  Those many with "drive" can't go as comfortably into a pool of less jobs that require drive.  Fewer domestic enterprises of value production (not burger king and wal marts) fewer managerial positions and exec positions.  Downsize and outsource them and you have to rely too often on those with your 'drive' to make it up in some newly created enterprise, until there isn't much lucrative left, and it becomes a crap shoot of ventures that fail more than succeed in a lousy economy, it seems to me.  I think you can get to that point of dispair from fewer having drive and cornering the market on opportunity, or from lack of incentive to have drive (or hard work) to get ahead.  So far, I'm perceiving the exclusion scenario more than your feared the takings of taxes and leaving behind a lack of financial incentive and society of louts.  But, that is just me...perhaps.

BTW, how does that 'drive' definition of yours, where you prove to your employer your greater worth, translate to the big bonus guys in the exec class who were running their companies when they went into the ditch but they got the bonus's anyway?  Where does drive end and robbery and greed begin?  I think they meet at the point of ethics, and we have lost that in some quarters, it seems to me.  I'd rather be an apologist for a return to a taxing system that goes where it must to fix the problems than an apologist for the past orgy of the wealthy and influential of all political parties that didn't put 'we the people' first.

[Dean Stokes]

On another front, I'm surprised at your view of wealthy Americans, who would be too churlish to donate when they only get a 28% deduction rather than 35 or 39%.  Wow, you really must think your friends are....not good people.

Personally, I liked the part where the new plan is to take away deductions for mortgage interest for "the rich" who earn more than $250K.

Let me get this straight:  a relatively young couple, one of whom makes $150K and the other makes $110K still has to borrow money just so they and their young family can have a place to live, but that makes them "rich", so they must be taxed...

I'm thinking of giving up securities and getting into divorce law.  Watch the divorce rate soar. 


(of course, that's what they want to happen; heaven forbid that anybody be married to anyone but The State...)

Dave,

Part of my holding my Florida real estate licence means I get the National Assoc. of Realtors newsletters. This morning we received a different letter from the board. It reads:-

Dear Fellow REALTOR®,


You may have seen news reports about President Obama’s budget proposal that was released today at 11:30 AM Eastern Time. A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation. NAR is 100% opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.

As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000. This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values. If this proposal is enacted it will lead to a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines. A second credit crisis could emerge before the first one is resolved.

As you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, DC decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal.

A very interesting way to stimulate the housing market. Keep it up boys.