Do These Two Inspire Confidence in You?

Here are the two men who control the American economy.  Mr. Obama and Mr. Bernanke.


Both have never had a real job in business, in fact, the closest either actually came to a real job was as a college professor.


Neither has ever run a company, created a product or service, met a payroll, or given them any relevant experience as an "employee" in the "workforce."


Yet, both men now make laws and draft new regulations that govern every aspect of the American economy.


Does it take a business genius like Herbert Hoover to run a successful economy?  Of course not.  Hoover made millions for himself in the mining business and ran some of the largest and most successful philanthropic projects in history.  Yet his presidency was an economic disaster.


But I'll take Hoover's business experience over Obama's and Bernanke's lack thereof any day.


Yesterday's news:  Truly awful consumer confidence numbers.


Today's news:  Only 13,000 new private sector jobs created in the U.S. in June.


This is not a recovery.  I just don't see it.


Robert J. Abalos, Esq.

New Housing Sales Numbers Hit All-TIme Low: Kennedy Was President in 1963

The new home sales numbers released today by the U.S. Commerce Department reflect a drop in sales so severe the industry is now selling homes at an all-time low, in fact, the lowest sales rates ever recorded since the government started keeping these numbers in 1963.


When the Obama tax credit expired, buyers stopped buying homes.


Very predictable, too.  But at a cost of $100,000 of taxpayer money per home sold under the tax credit incentive a very predictable expensive blunder too.


Robert J. Abalos, Esq.

New Middle Class Income Taxes Will Further Depress Residential Real Estate Prices

There is going to be a major income tax increase after the November 2010 elections.


The Federal deficit is way too high.  Even Democrats, like House Majority Leader Steny Hoyer admit that a middle class income tax is going to be necessary to raise money.  Not just new taxes on "the rich" (above $250,000 per year for a married couple is the official Obama definition) and not just the expiration of the Bush-era tax cuts.


NEW taxes on the middle class.


The simple fact is that the tax code has become so progressive that the poor no longer pay income taxes in the United States.   A full 40% of American households no longer pay any Federal income taxes.


This leaves the rich and the middle class.  The rich are already getting savaged by the U.S. income tax code.  The top 1% of all American households already pay a whopping 36% of all Federal income taxes.


So, that leaves the middle class, Steny Hoyer's latest target.


Higher taxes on middle class people means that real estate prices will fall.  Why?  Stayed tuned, but think about it in the meantime.


Robert J. Abalos, Esq.

Obama Foreclosure Relief Plan Fails---Just Like I Said It Would

The Obama foreclosure relief plan is failing badly after spending $75 billion to help homeowners in foreclosure.


No surprise here.  I predicted this futile program would fail nearly ONE YEAR AGO in this blog.


You can read an excellent article explaining the problems with the loan modification plan here.


The bottom line is simple.  When you buy a home you just can't afford, eventually you lose it.


Robert J. Abalos, Esq.

Russ Whitney's Former Lawyer Gets 50 Year Prison Sentence

Real estate guru history wonks will remember the very nasty and bitter legal dispute between get-rich-quick creative real estate guru Russ Whitney and real estate author and watchdog of the very same industry John T. Reed from a few years ago.

Reed, having published a single email critical of Whitney's seminar offerings on his website, found himself being sued by Whitney in a number of state and Federal courts in Florida, the headquarters of Whitney's real estate information empire.


John T. Reed refused to give in and began a campaign exposing the various falsehoods of Whitney's career, such as how he (didn't) turn $1,000 into $4.7 million through real estate investment while working as a slaughterhouse worker in Upstate New York which was the cornerstone claim of his empire.


For a time, the real estate world was abuzz with the controversy, and many of us (including me) followed the dispute like a real world soap opera with daily updates from both sides.

Anyway, Russ Whitney's lawyer in these lawsuits filed against Reed was named Scott Rothstein who made a name for himself in these disputes not only with the numerous lawsuit filings but also his bizarre reasons for requesting continuances, like the need to go on vacation because he already booked tickets!

Mr. Rothstein has been in the news quite a bit lately, having been found guilty of stealing over ONE BILLION DOLLARS ($1.2 billion, actually) as part of a Ponzi scheme.

He was just sentenced to FIFTY YEARS in prison.

Of course, you can't tar Russ Whitney with the same brush wielded by Scott Rothstein.  Birds of a feather often do flock together, but then again sometimes they don't.

What I can say without question is that the prosecution of John T. Reed by Whitney was prosecuted in a grossly unethical manner and certainly Mr. Whitney approved of every action by his own lawyer, further illustrating for me how truly grotesque the get-rich-quick real estate industry really is.

This is just a little bit of trivia for you creative real estate guru enthusiasts out there.  Just another lesson in those that play with fire often get burned.

Robert J. Abalos, Esq.