Mohamed Ibrahim’s Blog

There is light at the end of the tunnel. Things are bouncing back, and I can tell! More showing requests than the last quarter. Still less than last year, but much better than last quarter. I previously argued the possibility of the market bouncing back, and it seemed possible through the market cycles. However, we also argued the strength of the market bounce and whether the fix the feds did is a temporary or permanent one. Lowering the interest rate is of course a temporary solution that increases the money with the people through the people borrowing more credit, and in the same time cause inflation due to the increase of the money supply.

So we should be happy that the market is bouncing back, yet be careful because at the end of that short peak there might be another trough - unless serious measures are taken by the government to seek permanent economic fix through bringing manufacturing jobs back in the US.

News have been everywhere today that mortgage defaults are even higher than before. Foreclosure rates are increasing, because home owners give up even before their adjustable mortgage resets. Worse, two days ago a very known investor (Warren Buffet) became the most wealthy person, said that as far as he’s concerned we are already in a recession.

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Toll brothers reported that they expect further revenue decline in 2008 first quarter. I heard yesterday on WTOP news, that they even expect the market to go into worse conditions. I’m on the contrary seeing signs of things getting better than at least the previous quarter. I’m not saying that we’re getting out of the pit yet, but at least during the previous week I’ve been getting calls, email requests and contacts through the website from people looking to buy, in a rate higher than the last quarter.

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I’ve been reading more lately about financing. I mean the core of money, where it comes from and how it gets killed, not just real estate financing. I’m surprised by a lot of what I read, and actually hope that others take the time and understand the pillars of our economy in order to know how to plan for his or her future.

I watched some videos on Google video: Money As Debt , Money banking and the federal reserve . Although sometimes those videos generalize their talk, yet after doing some research I found that a lot of it is actually true. The fact is we are dealing with non-existent money.

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I found a flyer today in my mail box from empire financial titled NO PAYMENTS FOR 6 MONTHS. The flyer read ‘Move your buyers into their dream home without making a mortgage payment for up to the first six months with the buyers’ Bonus Mortgage Program’.

I think it is good that many finance companies are trying to make the secured loan market more innovative. Sometimes to complete sales one is required to keep all those type of programs in the back of his head, although I’m not seeking financing myself - yet my buyers are, and sometimes I need just to point them out to some loan programs that I might know, and they don’t.

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