President Says: "Lending is the life blood of our economy"

As I write this, president Obama is giving his address to the joint session of congress.

The jist of his housing agenda is that lending needs to be loosened and re-instated to the public.

He says he has a new housing stimulus aimed at the average American family who is facing foreclosure and not the speculator or the individual who over-extended themselves.

Predictably, he did not give any statistics or facts or numbers.

He says his plan will save the average American abou $2,000 a year.

This sounds good and all, but the problem is that the nation is a grand patch-work of micro-economies that operate independently of each other.

In San Diego, we have many micro-economies that are independent of each other. Heck, even in Encinitas we have micro-ecnomies operating independently of each other.

What we need is something that is specific not only to the financial needs of the individual family, but also to the broader American.

I was watching Mad Money today with Jim Cramer, and he said something very interesting: We need to have the government lend the money that the banks wont.

Cramer said that we need a loan program for the next 5-10 years that would allow people to refinance out of bad debt into a 40 year fixed rate loan at 4%. That is something that almost any American can use for the next few years while we ride out this recession.

Of course this won't be a band-aid fix-all. But it will help to re-flate the housing market and allow people to move on into other properties that they can afford under new lending guidelines.


What needs to be said is that people don't know how good we really do have it.

We just need to start living within our means, and taking advantage of today's low prices and interest rates.

From a speculation stand point, this is a fantastic opportunity to buy low and hold for the long-term flip, or from the investment point of view, rents are staying solid and will only go up with the job and housing market.

Investment properties are currently and artificially depressed in value because the rents are soft. The rents are soft because the job market is soft. But the crucial thing to remember is that right now, for the first time in a long time, it is less expensive to own a house than to rent it. And when that happens, get your arms around as much property as you possibly can, hold on tight, and wait for the storm to be over...