Now I’m breaking a very long silence after he has taken office and want to show you what the results are based on Recovery.org:

I typed in my zip code which is 92109 and you can see the results yourself.

2,648,434.00 U.S.D. were spent on 6 contracts and created a measly 1.14 jobs.

So let me get this straight: 6 contracts created 1.14 jobs?

441,405 U.S.D. per contract and one of them created an additional job.

The others just took the money and ran?

747,910 U.S.D. were spent on 10 grants which benefited 0.56 recipients.

Now I am not going to make any shortsighted presumptions, but at the age of 40 and having seen quite a bit, I’m not going to wait for another speech from Obama to wait with my determination that his plan is not working out. In fact we are getting deeper into debt and the war machine keeps rolling more than ever.

My own opinions are my own opinions, but go ahead and type in your own zip code. See how much the people in your city have benefited. At what time are we going to accept that the government is just “slow” and laugh it off and when are we going to hold people accountable like we do with our employees and children?

On a national level there have been 29,585,530,744.00 USD spent on 26285 contracts creating 32,694.89 jobs which comes down to 1,125,567.08 U.S.D. per job.

166,798,155,270 in grants have been awared to 154,370 sources benefitting 560,612 averaging 297,528 U.S.D. per recipient and 1,080,540 per contract.

Then there was that 2,130,164,108 U.S.D. spent on 855 programs giving loans to 1,950 people coming down to 1,092,391 per recipient and 2,491,420 U.S.D. per stimulated source.

Do you have to be an economist to recognize that not only the program failed but no end to the situation we are in has been brought any closer?

Waiting for the depression to be over is not smart. Banking on tomorrow could be deadly. Even if the news shows positive, these are the facts. The horse’s mouth has spoken.

Mike Dammann
Firetown

Last week the rate of mortgages that were underwater was at 13%. However, two more new studies reveal that is higher than it was previously believed. A real estate data firm called Zillow stated that 23% of all single-family homes are saddled with mortgages worth more than their present value. This assessment is pretty much pessimistic but many believe that it may turn out to be even an understatement. The German investment bank Deutsche Bank released a report earlier this month saying that 48% of all home mortgages in the United States will be upside-down by early 2011. The historical rate of mortgage defaults has been only 7% but in today’s economy, it is reasonable to be realistic and expect up to 20% of home mortgage default.

Northwestern University actually conducted a research where they found out that even homeowners who can afford to make their mortgage payments deliberately choose to default as their home’s value plummeted relatively to their mortgage. They found that 26% of all defaults that happened across the country December 2008 and also March 2009 were made by homeowners for the reason of being financially “strategic”. In some parts of the country where home prices have dropped significantly of their value, homeowners actually think it was worth the hit on the credit score to just walk away.

The research discovered that as soon as the homeowner’s negative equity hits 50% which is not uncommon, 17% of borrowers choose to default even though they actually can afford their mortgage payments. The consequences of walking away like this are generally limited to a battered credit score for a certain period of years. Although to them, this seems to be a great way out to save their own family by losing their homes, they do not see the bigger picture that every foreclosure drags down the values of surrounding homes and the number of houses foreclosed could snowball as homeowners watch their neighbors default and walk away.

The negative equity will not stop here. It will have a ripple effect that extends beyond the affected homeowners. The lack of home equity puts a damper on consumer spending. Many people used to feel good about their wealth position but now that there is no equity, the consumer spending lowers, which leads to decreased retail sales, manufacturing and in the end increased job losses or reduced income. Soon the cycle of mortgage defaults will start all over again.

Gerald Celente, founder of The Trends Research Institute, forecasts “food riots, tax protests, farmer rebellions, student revolts, squatter digins, homeless uprisings, tent cities, ghost malls, general strikes, “bossnappings”, kidnappings, industrial saboteurs, gang warfare, mob rule, and terror” by 2012 in the latest edition of The Trends Journal.

Harry S. Dent, frequent commentator and TV shows and the financial press predicted another stock market that could cause the Dow to fall to 1800-3800 by 2010. In his 2008 book “The Great Depression Ahead”, Harry S. Dent explained that it is not a normal recession or stock crash. But it “represents the peaking of the massive Baby Boom generation around the developed world from Europe to North America and these affluent consumers will be predictably shifting from spending to saving over the next decade despite stimulus programs.” As he had said it back in 1992, he still says now that no amount of government stimulus will prevent this “massive deleveraging of credit or the Baby Boom slowdown.”

Because it is not a normal stock crash, the stimulus programs will be very short-lived in their impact. Moreover, Dent says, because of so much stimulus there are potential inflation risks and because of expected recovery, interest rates and mortgage rates will go up, bringing affordability down.

Dent also sees a major shift towards growing economic and military power in Asia as a result of economic forces, away from Europe and Russia. With credible global institutions emerging to deal with global trade agreements, global warming and terrorism and so on, the growth in the coming decades will be more clearly in Asia and in other emerging countries.

Dent’s forecast that Obama’s stimulus package will only have temporary impact on the US economy was agreed on by Martin Weis, a financial market analyst and head of Weiss Research Group. Although the stock market has been rebouding, he still believes that the US is still at risk of another depression as claimed in April 2009 book, The Ultimate Depression Survival.

“The government stimulus package, but also all the efforts of the Federal Reserve to pump money into the economy will have some effect,” Weiss explains, “and the impact they are having is to turn a bad situation into a less bad situation and that shift is perceived as good news and so if that transition is helping consumers to become more optimistic, it is helping to bring optimism to Wall Street and so temporarily you see a stabilization and that temporary stabilization will last several months, maybe into the year.”

However, Weiss believes that because none of the steps taken by the Obama administration have addressed the underlying causes of the crisis, all that the government is doing is prolonging the agony. This makes it even worse when next the economy starts running down which he thinks may be as soon as next year.

Regarding the long term effects of this global crisis, Weiss says that we are currently witnessing a millennium shift which is a economical and political power shift from the West to the East. It is very obvious that the Indian subcontinent and East Asia are experiencing rapid growth while Europe and North America are going to experience a slow and interrupted growth.

The reason for this long term factor, according to Weiss, is that North America and Europe are now deep in a mess of debt all the way from the household to the federal government level. In the meantime, countries like China, India, Brazil have actually a much lower debt level now and a much larger cash surpluses. So financially speaking, these countries would be the ones who are sounder financially.

It is very ironic to see how this used to be the other way around. In the past, the United States was the one that had all the capital and developing countries above were the ones heavily reliant on the US and Western Europe for capital. Now countries like Brazil, China and even India to some extent are America’s greatest creditors.

Apart from these countries, Weiss sees that even Indonesia, Malaysia and South Korea will benefit and are better positioned. It is interesting to see that Indonesia and Malaysia are the ones who have a much sounder financial situation in today’s economy because of the Muslim-Islamic oriented traditions and restrictions on debt and interest. This practice has helped those countries to be more conservative financially and fiscally. Evidently, Indonesia and Malaysia are currently doing much better than Thailand and the Philippines and other non-Muslim countries.

Gerald Celente, founder of the Trends Research Institute and publisher of the Trends Journal, does not believe for one second that the US economy has begun to recover. He reasons that the people who are now predicting recovery are actually the same people that were saying recession wasn’t there. The same people talked about green shoots a few months ago and early this year they said that the US recovery will begin by the second quarter of 2009. Unfortunately none of those are true.

Celente pointed out that the Obama administration had estimated that without the stimulus package, the unemployment rate would be 8% but the fact is, now that the stimulus package is here, unemployment has gone up to 9.5%. Celente strongly critiziced that all their forecasts are wrong and none has come to pass. Celente says, “How could people believe these people when everything they said is wrong.” Celente strongly disagrees that the US economy is actually recovering, considering that, “You can not print phantom money out of thin air based on nothing, backed by nothing without destroying the economy. Look at Brazil, India, China, Russia, the BRIC countries, they all talk now about another reserve currency.”

While the optimistic drumbeat of good news that the US economy is recovering, we are now left in wonder whether what they are doing is keeping us in an illusion instead of warning the people that the dam is broken.

These debt elimination scams are taking advantage from the victims of this financial crisis in this current economical state. They come and approach you, pretending to offer you a solution to reduce your debt but are really using tactics and trap you. The common tactics that these debt elimination scammers are using are below:

• You may have received phone calls claiming to call you from debt elimination companies. What they offer you is a solution to settle your debt case legally and they try to convince you that your lenders will not sue you for bankruptcy even though the lenders have taken legal action on you. For their “legal service” they require you to pay a lump sum fee. These debt reduction companies are illegal and not recognize by the government. They have no ability whatsoever to solve the legal proceedings.

• Some scammers may have your details and the fact that you have credit card debt. They will call you and claim that they are able to waive your credit card debt completely. You will be asked to pay a lump sum of waiver fee so they may prepare all the necessary documents to clear you from your credit card debts.

These scammers can be very convincing and they may present you with even “better” ideas that would sound good in your ears. Although you are neck deep in debt and desparate to get out of your financial problem, it is always important to carefully do your due diligence and not trust them too easily.

Debt Elimination Scammers

Financial firms have an enormous marketing budget to create emotionally provocative marketing campaigns with flashy signs on buildings, striking logos and catchy slogans. They place advertisement on popular trade magazines, TV and radio and give their sales people a fancy label such as “Financial Consultant” or “Vice President of Investments”. The truth is, the flashy signs and fancy labels does not mean anything.

What you need to check in order to choose the right financial advisor for your family is the level of experience these people have in serving client’s needs and helping them to accomplish their financial goals. Here are the right questions to ask potential financial advisor. Make sure they answer each question thoroughly.

How long have you been:
1.) working directly with clients as their primary financial advisor?
2.) recommending investment and insurance products?
3.) actively and consistently creating financial plans for clients to help them achieve their financial goals?

How many:
4.) years did you spend training for your position as a financial advisor?
5.) written financial plans have you created for clients?

What:
6.) is your training background and where did you learn how to diagnose, manage, and solve your clients financial problems?
7.) firms have you worked for in the capacity of a financial advisor?

Now that you know the questions to ask them, you should also know the accepteble answer the questions:

Find only those who have a minimum of 3 years of experience. You may meet financial advisors who are still interns but are working close with a more experienced financial professionals who are working with clients directly themselves. These interns are required to do so for at least 3 years before they can be your primary financial advisor.

The NAPFA (National Association of Personal Financial Advisors) are now requiring that registered financial advisors have at least a college degree.

A financial advisor should have at least one credential of these two: a CERTIFIED FINANCIAL PLANNER™ (CFP®) or Chartered Financial Consultant® (ChFC®) designation. These two credentials shows the dedication to being among the best in the financial services field. Note that both credentials are difficult to achieve so if your financial advisor has one of the two, you can be certain that they have the experience and training which are vital for your financial success.

You need to understand also that many of the financial advisors do not actually write financial plans. Most of them are only “financial advisors” in title but in reality they are only salespeople in practice. Even though you do not think you would need a written financial plan, your financial advisor has to understand how to create one and they should also have experience to do so.

Before you decide to work with any financial advisor, take your time and ask questions in interviews. Expect reasonable answers. When you have done all that, you will find the confidence that you have found the right financial advisor to help you achieve your financial success.

What Americans should be scared of now is the dangerous Great Debt Threat. Although the stimulus package seems to be to help Americans, the consequences is the huge deficit which can only be covered by the only practical solution of a giant tax increase. Within a decade, the average householdthat pays income tax will owe the equivalent of $155,000 in federal debt. To save the economy, America has to raise annual federal income taxes an average of $11,000 in 2019 which is an increase of 55%.

Because of the growing debt burden, Americans will not only be weighed down by taxes but also higher interest and slower economic growth.

Before you pick up the phone to negotiate your debt, make sure you follow these steps first.

1. Calculate your total debt amount.
2. Analyze the type and age of your debt accounts.
3. Get a copy of your credit report from the credit bureaus and analyze it. Check out Sample Credit Reports from the 3 bureaus.
4. Look through your credit report and find out if your account is still with the creditor or turned over to a collection agency.

When you have done all the steps above and have all your info handy, you are ready to start negotiating. You need to know how to contact your creditors. You can easily find the address or other relevant information in the Creditors Database. Check out the mailing instructions also for further help.

Be sure that you have decided a payment that you can afford to pay. After you have calculated all your debt, you should calculate all your income and figure out how much you can offer to your creditors to pay off your debt. When you have done this, it is time to pick up the phone and negotiate with them.

Here are the steps you should take when negotiating with your creditors:

1. Contact your creditors and explain your plan. Tell them how they can benefit from it.
2. Explain to them that you are sending this offer to all other creditors and that the ones who accept the offer first will be paid first.
3. If they accept, the records of acceptance letters and then immediately pay the amount as agreed. Do not forget to request a receipt that states, “Paid in full”.
4. Repeat the process every month until you pay off all your creditors.
5. Every year, it is important that you obtain fresh credit report so that you are updated on your account status.
6. When you have paid off one debt with a creditor, negotiate with them to update the account status on your credit report as “Paid in full” or “Paid as agreed”.

If you are negotiating with collection agencies, here are the steps to take:

1. Send a letter or email to the collection agency and don’t contact them by phone as they may behave badly to you over the phone.
2. Keep the name and direct phone number of the collection agency that replies to you.
3. Send a debt validation letter that verifies that you owe the money. When you receive a reply from them ask them to send you the following:
   • Proof that the collection agency is indeed assigned to collect the debt by a creditor
   • Detailed payment history starting with the original creditor
   • Copy of the original signed debt agreement or credit card application
4. If you find that they can not send them the above, tell the collection agency that they are violating the FDCPA and they need to remove collection listing from your credit report. Note that you have the right to sue them if they don’t.
5. If the collection agency validates the debt and it turns out that you do owe the money, contact the creditors to request them to pull your account back from the collection agency. Make your creditors aware of your inability to pay off your total debt and offer them an alternative payment plan. If you have enough money, offer them a lump sum reduced payment.
6. If your creditors don’t pull back your account from the collection agency, the debt negotiation should be done with the collection agency. Make sure you do that with a cool brain. When you have agreed on a settlement, make your payment in such a way that you get a receipt.

If you think you won’t be comfortable talking and negotiating with your creditors or collection agency, you can always turn for help by debt settlement companies or law firm. They will be doing the negotiation for you on your behalf. If you decide to do this, go for a no-obligation free debt counseling to have the company assess your financial situation. They will help you decided how much they will be negotiating for.

Here is a debt settlement company that can help you. http://sunrisedebt.com/

For more information about debt settlement companies in your area, click here.

#1: Interest rate not locked-in

Remember that interest rates are very unstable. While your loan is being processed, your rate can change a few times. The moment you find an interest rate that satisfies you, ask your lender to lock it in, otherwise you might be given a different rate from what you have expected in the beginning. Have your lending put it in writing and when the loan processing is done, confirm it. Usually, lenders will not lock in your interest rate unless you request it.

#2: Not shopping around

If you haven’t already known, there are hundreds of mortgage companies out there. Each company is unique and although they offer the same service, there are a lot of things to compare amongst them. It is highly recommended that you shop around first to find the best deal that you can get. I have written an article on “How to Shop For A Mortgage Loan“, where you find what to consider and compare when shopping for a loan.

#3: Refinancing too often

It is true that refinancing is a good way to take advantage of a lower rate and also save money on monthly fees. But if you take it every time the rate drops a few points, you may end up paying much more in the long run because terminating your loan and buying a new one involve fees. Closing costs can be as much as thousands of dollars and doing it over and over again, you will definitely defeat the purpose of refinancing.

#4: Your break-even point not calculated

Homeowners usually fail to recognize that there is always a fee to pay to terminate their existing loan and getting a new mortgage loan. Unless you calculate your break even point, you will more likely lose money than save it by refinancing.

Here is how to calculate your break-even point:

If refinancing your mortgage saves you $200 per month and your closing cost is $2000 (one time fee), simply dived the closing cost by your monthly savings and you will get the number of months it takes for you to reach your break-even point.

In the above example you calculate $2000/$200 = 10 months which is the number of months that it takes you to recoup the cost of refinancing. In other words, before you can actually realize your savings, the first 10 months of savings after refinancing is paid towards the closing cost.

Think twice before refinancing too many times. Always know first if you have recoup the cost of your previous loan. By knowing when you will reach your break-even point, you will be able to determine how long you will have to stay in your home before starting to actually get savings from refinancing.

#5: Refinancing just for the heck of it

Too many homeowners think the time to refinance and refinance again is when the rate drops and drops again. This is wrong! Whether it is the right time to refinance your home or not depends on many factors, and not just the interest rate. If you are planning to move out of your home in less than 2 years AFTER you reach the break even point, never refinance! So if it takes 10 months for you to break even, you should be planning to stay in your house for at least 2 years and 10 months.

Here are a few reasons for you not to refinance:

- if you have only a few years left to pay for your home
- if you have been paying for your current loan for many years
- if you have a bad credit score
- if the current market value of your home is low
- if you have already used up all the equity of your home

By taking out a Government Student Loan Consolidation, you simply combine all these small loans into one larger loan with only one fixed interest rate. Your benefit will be money saved with a lower single interest rate and less repayment hassle because now you only have one big loan to repay instead of multiple smaller loans.

By consolidating your loans, you lock in your interest rate at one low amount. Until the end of the loan life, perhaps 10 or 20 years later, you will only be paying the same minimum monthly payment. Of course you can pay more when you have the money but there is the tax deduction that you can claim which probably will change your mind to not pay it off earlier or pay more. Besides getting a fixed low interest rate, you will also benefit from tax deductions that you can claim on student loan interest. Not only will you be saving money on interest rate, you will be saving money on tax deductions also.

As the terms are so favourable to borrowers, the Federal Government student loans are perhaps the best deal for educational financial aid and therefore the best kind of debt you can have.