Kona Kohala Blog

This W is the recovery that's being touted based on one faulty statistic but more on that later.  First, let's look at what awaits the fortunate few, those being the wise ones who live frugally, save money and either restrict or eliminate their debt.  These are the people who stand to benefit greatly in this time of recession.

Prices on real estate continue to decline as more foreclosure dot the landscape with more waiting just over the horizon.  The banks own lots of property these days, much more than they want to own or should own, banks are not investors in real estate.  Banks make their money in hedge funds and other varieties of manipulated structured and unstructured investment vehicles dreamed up by wild eyed crazy economists hiding in dark closets high above Wall Street.  Having money tied up in something so mundane as mortgages is costing them huge bonuses and stock options.

So, when a bank has to sell these non-performing holdings they cut the price and cut the price and cut the price.  What they lose on a piece of property is nothing compared to what they're losing by not working in the higher return end of their business.  If that means that any one particular housing market or all housing markets are undermined, so be it, money needs to be made elsewhere.

If you believe this thinking to be wrong, try to get a loan modification or a refinance unless you have stellar credit, high income and plenty of assets.  Very few of the people who need help holding on to their homes are getting it but the banks are getting richer by the minute, with taxpayer money.  I know, some of the larger banks have paid back what the fed loaned them but not before turning that money into a nice tidy profit.

Now there's nothing wrong with a nice tidy profit.  Our businesses are all entitle to profits, it's what makes this country what it is and allows each and every one of us the opportunity to do well.  The problem I have is that in order for you and me to do well, we must provide a service.  By providing that service we receive some for of remuneration making it a two way street.  Unfortunately, this is not the case with banks and many of the largest financial institutions today.  They are working one way streets and that's not what our country is about.

The W that's back in the white house is the one that thinks one week of lower unemployment figures is a true signal of recovery.  They seem to forget that it was a three day work week, Thanksgiving and all, which meant closed government offices allowing fewer people to file claims.  When the revised numbers come out it may paint a very different picture but by then we'll have some other one time stat that shows a bright and cheery future for all of us.

The fact the the economy is still in the toilet means that prices will continue downward for housing.  For those of you who practice wise financial tactics there are good deals out there.  Real estate has always been a wise investment and something that should make up at least a small part of your investment portfolio.

Employers are saying there will be no new hiring through at least 1Q 2010, possibly 2Q 2010.  Business is doing very well with their diminished staffs and thinned payrolls, why should they hire.  Since the recession is world wide, even a weak dollar is not improving our export picture.  Until the employment numbers improve we will not see a recovery, at least not one that's going to last more that one brief segment on the evening news.

What a great time to buy Hawaii.  Those who have been wise enough to stay free of debt, save money and work towards a solid retirement whether it's in a year or 10 years, have an incredible opportunity to purchase Hawaii on sale.  Someday, the economy will recover.  Someday people will again go back to work.  Someday people will regain the mobility we once had and travel.  That will be a good time to own rental property in paradise, a good time to move into your retirement home in paradise or just a good time to own real estate in general.

Continue to save, continue to live within your means and soon you will be so far above the struggling crowd just because you used your head.  The crazy days of spend, spend, spend, put it on the card and take care of it with the year end bonus are over, over for good and there's nothing wrong with that.

It's time we all woke up and realized that the real world is not a picture painted by an ad agency in New York.  The real world is family and friends, communications face to face not just texting and email.  The real world is about people sharing struggles and successes and not just about how much you have.  All it's going to take is one power outage lasting for a day or so to realize just how advanced we aren't.  Knowing your neighbors, heck, knowing your kids, is a wonderful thing.  Humans are social animals, we are meant to interact in reality not just on the internet.

This is a great time of opportunity.  Opportunity for creative thinking.  Opportunity for entrepreneurs.  Opportunity to get to know each other.  Opportunity to use our God given skills and abilities to think, to create, to solve problems and to invest in real estate.  I had to throw that in after all, it's what I do.  Best wishes in the holiday season, and Merry Christmas . . . yes, I do believe in God.