The Mortgage Manifesto

Fed Stimulus: Will it Be Spent or Saved?

If you haven't already caught the news of the governments speedy work to get cash money into Americans hands via a stimulus package cruising through Congress here are the details.

The House passed a bill that includes $146 billion of money set to start going out to working and non-working Americans beginning as early as this April.  The Senate is working on its version to the higher tune of $161 billion.

The goal:  get money to people so they spend and get the economy growing.

Will that happen?  If you received a check for $600 to $1,600 right now, what would you do with it?

Well, two separate surveys found that the majority of those surveyed would use the money to either pay down debt or put into savings.  Interesting!  Paying down debt from previously financed purchases and/or putting the money into savings does not add stimulus to the economy at all.

Our government faces some tough challenges right now.  The Fed makes drastic cuts to their Overnight Rate with arguably little effect.  Congress jumps in to put checks in our pockets and that might not do the trick.

I know what I'd do with the check, save it or pay down debt.  What will you do?

www.BrettGrendahl.com 

The Ingenuity of the Youth

In a brief but content rich phone call with a well-known Minnesota CEO I had the pleasure of hearing this fact.

A Nebraska student essentially sold a "bond" via Ebay on their 30 year future earnings.  Now that is one interesting way to finance a college education!   WHY didn't I think of that?

Your thinking, "how much could this kid raise?"  A cool $1.1 MILLION, that's how much!  All I can say is WOW and KUDOS to you.  That's about as free market as you can get.

www.BrettGrendahl.com   

2008 Presidential Campaign, Time to Follow the Money

Did you notice the turn as we now have less than 12 months to go in the 2008 Presidential Election race?

With the two dominant parties ready to crown their candidates, this is a good time to dig in and count the beans for the war chests they have each raised to date.

I tracked down this website that shows more detail breaking down the total of $420 million raised for all the candidates, Race for the White House.

As stated on that site, this election race is on a pace to raise a record amount of $1 BILLION total  Whoa!  That is one big number.

With that money being spent and an electorate that in mass can be best described as apathetic, the candidates that can spend the most to build name awareness have a great edge.

Let's break down some of the figures that jumped out at me.

Senator Hillary Clinton has raised over $90 million so far, with Barack Obama not too far behind at $80.2 million.  A distant third is Senator John Edwards at $30.9 million.

Across the aisle, Mitt Romney has raised $53.6 million and Rudy Giuliani brought in $30.6 million.  An interesting note is that Romney's campaign finance has current debts that are double their cash on hand.  Looks like he needs some serious capital raising to last.   Strong primary results are crucial to this campaign's operation.

Hillary Clinton is sitting on more cash in the bank than total spent so far.  $50.4 million in cash ready to go to work.  Significant advantage for her campaign at this critical juncture in the campaign.

If you follow the money trails in greater detail you will find that the candidates of both of the dominant parties will receive contributions from the same contributors.  Huh?  Are those contributions ideas on governance or just to gain influence?  That is a good topic for a future post.

This election race will be quite interesting by March of next year as the foreshadowing of our two choices become clear.

Two choices.

Out of 300 million people can political views be best representated and debated by only two groups?

www.BrettGrendahl.com

Hard Proof on My "Two Worlds" Theory

Good morning gang,

A few posts back I wrote about the enormous severance package that the Merill Lynch CEO received as he was shown the door from the executive suite for non-performance.  On the way out the board was kind enough to soften the blow and his hardship with a $160 MILLION package!  Oh, I hope he can get by and lift up his bruised ego.

This morning, more news on this front.

The CEO of Citigroup, after being shown a similar exit for non-performance, picks up a package of stock options, grants, and other benefits estimated to be worth $29.5 million.  To help him in his job search, now that he is unemployed, Citigroup has given him use of an office and a driver.  Actually, he gets those for the next 5 years, or until he gets another job.

Huh?

If you had $29 million in the bank, a free office, and a free driver, how motivated are you going to be on that job search?

Let's dial this in to our personal lives.  Of any friends, family members, or work associates you now that have lost their job and had to be in search of new employment, what kind of treatment do they get from their former employer?  Nothing close to these sort of packages, that is for sure.

Maybe Citigroup has greater problems when their actions for their top executive's non-performance is to lavish him with money and some great comps.  It's like they are a casino, favoring their biggest gamblers and those that are losing big money at the tables.  Oh, you just lost $50,000, here is a free luxury suite for a night to soften the blow!

Two worlds.

Do you see them?

www.BrettGrendahl.com

The Biggest Con of America

As the next presidential election race begins to move into full swing I find myself pondering our choices.

Choices?  Do we really have any?

The dominance of the two-party system has become a great illusion.  Every four years we get to take sides, maybe you are in a blue state, maybe a red one?  Then we duke it out to claim our victory.  Every 4-8 years dissent amongst the populace swings and the other party takes over.  But do things really change?  Does the power really change hands?

My opinion is that we really have a one-party system but we've been led to believe that it is two.

This fact should jump right out at you as this presidential election race offers us the choice to leave two families in control of our country's highest office for 24 years!  Count along with me, George H. W. Bush (4 years), William Clinton (8 years), George W. Bush (8 years), and now the possible Hillary Clinton (4 years+).  Two decades of rule by two families!  The sad thing is that we go along with it, hook, line, and sinker!

As we approach this next presidential election, let us think about the con being pulled over our eyes, and with our own votes.

I ask you, when we read "We the people....," are you and I part of that we?

Brett

Ponder This for a Moment

As the next presidential race begins to heat up I've been doing some reading about the state of our society and ran across something that really got me thinking.

It can be said that the fall of the Roman Empire was the result of three main things:

1. The erosion of moral values.
2. An over-extended military presence.
3. Fiscal mismanagment.

How would YOU rate our society on these three areas?

Brett Grendahl