What Are YOUR Myths About TARP (The Financial Bailout)?

October 11, 2010

Another myth: Flat EarthSunday’s [October 10] Washington Post (editorial section) has a piece “5 Myths about TARP.” Now, I generally like the Post’s “5 Myths . . . ” series. Except when there’s a clear ulterior motive and the mythbuster has an ax to grind. In this case, “5 Myths about TARP” is written by none other than Timothy Geithner, current Secretary of the Treasury and former president of the Federal Reserve Bank of New York. Not exactly an unbiased or critical source.

Geithner’s “5 Myths” are:

  1. The TARP cost taxpayers hundreds of billions of dollars.
  2. The TARP was a gift for Wall Street that did nothing for Main Street.
  3. The TARP was a quick fix for the market meltdown but left our financial system weak.
  4. The TARP worsened the concentration of the banking sector, leaving it more vulnerable to another crisis.
  5. The TARP was the centerpiece of a strategy by President Obama to assert more government control over the economy.

I won’t even critique Geithner’s article to cite its inconsistencies. (Well, OK, just one. He notes in Point 3 that “Of the 15 largest financial institutions before the crisis four are no longer independent entities” and in Point 4 that “It is true that the financial system is more concentrated today than it was before the crisis.” Yet Myth 4, inexplicably, is “The TARP worsened the concentration of the banking sector.”)

Most of us may not have the resume of Mr. Geithner. But I suspect we have some real-world experience and some up-close-and-personal knowledge that the Secretary of the Treasury/Former Federal Reserve Bank of New York president may not have. Plus the common sense to be able to separate myth from reality.

So, let’s add to the list of myths about TARP [Troubled Asset Relief Program]. Or–more appropriately–create our own “X Myths about TARP.” What myths did the honorable Mr. Geithner somehow overlook that really should have been included in a listing of myths about TARP?


Realtors Must Stop “Playing Dumb” on School Quality

September 30, 2010

Zipped LipsAsk the average guy on the street about the quality of schools in the District of Columbia, and he’ll tell you that it’s not too good.

Ask the President of the United States about whether the quality of D.C. schools is comparable to those of certain private schools and (on the Today Show and reported in the Washington Post) he’ll say:

“I’ll be blunt with you: The answer is no, right now,” Obama said. D.C. public schools “are struggling,” he said, but they “have made some important strides over the last several years to move in the direction of reform. There are some terrific individual schools in the D.C. system.”

Ask a Realtor about public schools in D.C. or elsewhere, and you’ll hear: “Well, umm. I really can’t say. I’m not permitted to say. So I really can’t help you. Sorry. But I encourage you to check online. And talk to some parents of kids who go to the school. Try calling the PTA. Or talk to the school principal.”


I acknowledge that a school that’s great for some kids may be terrible for others. I’ve written about that before from personal experience. My son attended an elementary school with a great reputation. But it was absolutely a horrible experience for him. And I’m not picking on D.C. schools. There are plenty of other examples, good and bad, out there. So it’s true that you can’t accurately sum up an entire school with a grade of “A” or “F.”

Still, there’s a growing focus on the quality of education in the United States, and how it compares to that in other countries. There’s the movie Waiting for Superman, which is attracting a huge amount of interest and focusing laster-like attention on our educational system.

Ignoring realities doesn’t help buyers. Refusing to share expertise and perspective on quality of school doesn’t help buyers. From the Preamble to the Realtor Code of Ethics:

Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. . . .They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment. Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS® should dedicate themselves.

Are these goals–creation of adequate housing, development of productive industries, preservation of a healthful environment–possible if, in our professional roles, we deliberately ignore educational successes and failures? If we ignore reality? If we deliberately withhold information from clients and customers?

I think not.

Stop Those Foreclosures Now!

September 22, 2010

Stop those foreclosures now!

The Washington Post reported on September 22 that Ally Financial and some other large mortgage lenders did not follow proper procedures when processing foreclosures. An excerpt:

Some of the nation’s largest mortgage companies used a single document processor who said he signed off on foreclosures without having read the paperwork – an admission that may open the door for homeowners across the country to challenge foreclosure proceedings.

The legal predicament compelled Ally Financial, the nation’s fourth-largest home lender, to halt evictions of homeowners in 23 states this week. Now it appears hundreds of other companies, including mortgage giants Fannie Mae and Freddie Mac, may also be affected because they use Ally to service their loans.

As head of Ally’s foreclosure document processing team, 41-year-old Jeffrey Stephan was required to review cases to make sure the proceedings were legally justified and the information was accurate. He was also required to sign the documents in the presence of a notary.

In a sworn deposition, he testified that he did neither.

The reason may be the sheer volume of the documents he had to hand-sign: 10,000 a month. Stephan had been at that job for five years.

Wow. 10,000 a month for five yearsYou do the math.

Let me say that I have precious little sympathy for homeowners who lied about their incomes in order to obtain loans. Or buyers who bought, knowing there was no way they could afford the homes, but figured they could sell for a nice profit. Or for others who gamed the system. Or for others who are now walking away from homes that they’re fully capable of making payments on, just because the home’s lost value. If there was mortgage fraud, then prosecute them to the full extent of the law. (I do have sympathy who, through job loss, illness, or other tragedy beyond their control lost their homes.) Hopefully, I’m making myself clear.

But it looks like Ally may not have been playing by the rules, either. If that’s the case, then let’s go after them to the full extent of the law. And if that means stopping hundreds of thousands of foreclosures, then so be it. And if that means going after them for already completed foreclosures that can’t be undone, let’s do that, too.

Here’s a passage I love from Robert Bolt’s A Man for All Seasons about Sir Thomas Moore:

ROPER So now you’d give the Devil benefit of law!

MORE Yes. What would you do? Cut a great road through the law to get after the Devil?

ROPER I’d cut down every law in England to do that!

MORE (Roused and excited) Oh? (Advances on ROPER) And when the last law was down, and the Devil turned round on you-where would you hide, Roper, the laws all being flat? (He leaves him) This country’s planted thick with laws from coast to coast-man’s laws, not God’s-and if you cut them down-and you’re just the man to do it-d’you really think you could stand upright in the winds that would blow then? (Quietly) Yes, I’d give the Devil benefit of law, for my own safety’s sake.

It may be distasteful. It may be messy. It may stick in your craw. But if Ally failed to comply with the law or applicable regulations, then it must be held accountable.

6 Tips To Help Your Business From “Talk Like A Pirate Day” (September 19)

September 14, 2010

Talk Like A Pirate Day: Sept. 19

It’s almost here–the annual “Talk Like a Pirate Day.” Mark your calendars for September 19. But it’s not just a day for having fun (see below), but even for picking up a few useful tips.

OK. So what is “Talk Like a Pirate Day“? From Wikipedia:

International Talk Like a Pirate Day (ITLAPD) is a parodic holiday created in 1996 by John Baur (Ol’ Chumbucket) and Mark Summers (Cap’n Slappy), of Albany, Oregon, U.S., who proclaimed September 19 each year as the day when everyone in the world should talk like a pirate. For example, an observer of this holiday would greet friends not with “Hello,” but with “Ahoy, matey!” The holiday, and its observance, springs from a romanticized view of the Golden Age of Piracy. The holiday is a major observance in the religion of the Flying Spaghetti Monster.

The official site, with lots of links, is at http://www.talklikeapirate.com/ You can see how people celebrated in the past–parties, get-togethers, and more. And I particularly like the sites that will translate text–or even full web sites–to “pirate speak.” See this one: Translate-Pirate.com To see what the White House web site looks like as spoken by a pirate, click here. (No, no one is accusing President Obama of being a secret pirate!)

Enough fun and games. Well, maybe not. But, still, is there anything to be learned from Talk Like a Pirate Day? Absolutely. Things that you can use to help get more clients and more business. (Some of these were written with Realtors in mind, but they’re all applicable to anyone wanting to improve their business.) And a few other tips, besides.

Keep the Calendar in Mind: Why is September 19 Talk Like a Pirate Day? The day was actually triggered when one of the co-founders injured himself on June 6, 1995, and yelled “Aaarrr.” When they decided to “spread the word,” they recognized that June 6 was D-Day. Out of respect, they chose another date. So: Look at the calendar. And in addition to the observances you’re aware of, be sensitive to observances of other religions and other cultures before scheduling an event. If you’re doing a mailing, you may want to time it so you’re not competing with lots of other mail.

Make it Easy to Remember: So, why September 19, and not the 18th or the 20th? It turns out that September 19 was the birthday of an ex-wife of one of the founders. That was easy for him to remember. The same lesson applies here, from the way you brand yourself to the name of your web site. In this case, the point is to make it easy for customers and clients to remember you . . . and how to contact you.

Learn How to Publicize Your Activities. How did Talk Like a Pirate Day catch on? The event’s founders sent a letter to humorist Dave Barry in 2002. Barry liked the idea and promoted it. The rest, as they say, is history. The take-away message here is that the media can help you. Just identify the right–the most appropriate–outlets and get the word out. If what you’re saying or publicizing has value, you may well receive beneficial coverage.

Do Good Deeds. Set up activities that benefit charities. Talk Like a Pirate has a section on its web site for such activities. It even has a nicely-done 8-step planning process. It says:

As everyone* knows by now, International Talk Like A Pirate Day is mostly about (wait for it) talking like a pirate.

But almost since the beginning, some fine folks have used the day as an excuse to raise money for good causes.

The Marie Curie Cancer Care team in the UK was first out o’ the gate, urging folks to organize piratical fund-raisers to support their efforts to provide research and end-of-life care for cancer patients. Others have joined in over th’ years to use ITLAPD as a way to raise money for everything from feedin’ the hungry to sponsoring local children’s programs.

This year, the Pirate Guys are urgin’ their fans around the world to use their Talk Like A Pirate Day parties to pass the pirate hat for a worthy cause, be it social, humanitarian, cultural or political.

Which cause? That’s up t’you. There be no end o’ good causes that could use an infusion o’ doubloons. Read on down for some ideas.

Cap’n Slappy has a soft spot in his black heart for Doctors Without Borders/Medicins Sans Frontieres, the international medical humanitarian organization that brings medical care to people all over the world in times of crisis. They even offer tips for making your fund-raiser a success – and an easy way for you to collect donations on line! Tell’em Cap’n Slappy sent you!

Give Something Away. Talk Like a Pirate has some downloadable ring-tones. (Who could resist “It’s still ringin’ ye scurvy dog!”)? Sure, you can do ring-tones. But offer on your web site free reports, or free information. Give consumers a reason to come to you, remember you, and do business with you.

Have Fun. I think that point’s already been made.

So, make plans for Talk Like a Pirate Day. But take away some tips that can help you on the other 364 days of the year as well.

Why Donald Trump Is No Investor

September 10, 2010

Donald Trump’s no investor. He may well be a smart businessman. He’s a great self-promoter. You may or may not like him as a reality TV host. He’s got a lot going for him. Granted: Lots of skill. Lots of knowledge. Lots of talent. Great name recognition. Lots of money.

But Donald Trump’s no investor.

I heard him interviewed on MSNBC’s Morning Joe today. He debated and defended his offer to buy the plot of land near Ground Zero on which a proposed mosque would be built.

If you haven’t heard the latest developments: The investor who now owns the land bought it less than a year ago for $4.8 million. Donald Trump made an offer to purchase the land for the original purchase price plus 25%–which works out to $6 million, though Trump said it was closer to $6.2 million.  Trump said he was making the offer “as a resident of New York and a citizen of the United States, not because I think the location is a spectacular one (because it is not), but because it will end a very serious, inflammatory and highly divisive situation that is destined, in my opinion, only to get worse.”  The investor made a counter-offer, saying that he wanted $25 million for it.

Trump said on Morning Joe that he wouldn’t pay $25 million because: (1) he wasn’t going to be bludgeoned into paying such a high amount, especially in the name of religion, and (2) because he didn’t want the current owner to be able to say afterwards that Trump was stupid for paying so much.

  • There was discussion on whether Trump was making the offer just to gain publicity. He denied it.
  • There was discussion about whether moving the mosque another 5 or so blocks would defuse the situation. Trump thought it would–that it would make a psychological difference.
  • Trump was asked whether he’d (like the current owner/investor hope to) had ever made 5 times the amount of his investment on a deal. Trump said he had.
  • Trump was asked whether he’d be willing to pay $25 million, with $6 million going to the investor and the rest to charity. He said he would.

Those are all interesting and valid points of discussion.

But Trump’s no investor.

At no point was Trump asked–or did he give his own estimate of–what the land was actually worth. How much is it worth? An investor would put that question at the top of his list. If, hypothetically, the land is worth $40 million, then Trump the investor should have no problem paying $25 million. He’d pick up an instant $15 million in equity. On the other hand, if it’s worth only $20 million, then it’s overpriced at $25 million. Just say so.

I’ve known plenty of investors who’ve put a property under contract for just a few dollars–$10 or $100 in many cases–then sold that contract for $5,000-$25,000. The person who’s bought the contract–often a rehabber–doesn’t complain about the profit the initial investor is making. The person who buys the contract is concerned with whether it’s a profitable deal for him.

I’ve known other investors who’ve bought properties for $175,000 and sold them to other investors for $250,000. Is the second investor “stupid”–to use Trump’s language? No way, if the property is really worth $450,000.

The entire mosque situation is complex and highly inflammatory. There are many competing arguments about how it might be resolved. And there are perfectly valid reasons why Trump might not want to pay $25 million for the land. But to reject a higher counter-offer not on the basis of value but on the basis of emotion (he doesn’t want the other investor to call him “stupid” or to be “bludgeoned into the deal”) suggests that–for all his many strengths–Trump is no investor.

I Belong to the “Mister Ed” School of Blogging

September 8, 2010

What’s your attitude toward blogging?

Mister Ed and his owner WilburI was reading someone’s blog recently on another site, and she explained that she’d begun blogging because of peer pressure. She was a Realtor. Other Realtors were doing it, and she knew it was important. So she posted a blog. Now, it didn’t say anything–but it was her first blog, so congratulations were in order.

However, going forward, what will be her motivation–and your motivation–to blog?

George Mallory–an English mountaineer who led three expeditions to climb Mount Everest in the 1920s and who died in a 1924 attempt–is famous for allegedly responding to the question: “Why do you climb Mount Everest?” with “Because it’s there.”

Do you blog “because it’s there”? There’s nothing wrong with emulating George Mallory, though try not to end up the same way he did! But, for blogging, is it enough that “it’s there”?

I myself belong to the “Mister Ed” school of blogging. You remember Mister Ed, don’t you? Well, you might if you’re old enough, or enjoy reruns. The TV show ran from 1961 to 1966. It was about a talking horse–Mister Ed–but Ed would only talk to his owner Wilbur (or as Mister Ed would say Wil–burrrrrrr) and to others but only on the phone.

Part of the show’s theme song went:

People yakkity yak a streak
And waste your time of day
But Mister Ed will never speak
Unless he has something to say

For me–whether I’m blogging or whether I’m reading someone else’s blog–that’s the key. Do I (does he, does she) have something to say?

What do you say?

Some Truly Stupid Email Subject Lines

July 23, 2010

Do you ever feel that “enough’s enough” as far as stupid, misleading, or just peculiar email subject lines are concerned? I know I do. And it seems like I’ve been receiving more and more of them recently dealing with real estate investing. (Well, not really real estate investing. More like selling products to would-be real estate investors.) I guess it’s because the “ordinary” or straightforward subject lines don’t work as well any more.

It’s gotten like the headlines you see (if you choose to look) on tabloids like News of the World. Sort of a “Can you believe this? Can you top this?”

Here are just a few recent ones that have slithered into my in-box:

Scandalous Mexico Photographs exposed [Greg Clement. February 23, 2010. First line of e-mail: “I will unveil dozens of scandalous pictures from Team Realeflow’s recent trip to Mexico on Thursday’s “Wealth Protection” webinar with Jeff Watson.””]

My wife is scamming my brother and I. It’s B.S.! [Josh Cantwell: June 18, 2010.” In addition to being grammatically incorrect (should be “brother and me,” Cantwell’s e-mail doesn’t make any sense vis-a-vis the subject line: “I put together some free training videos and an ongoing case study of a REO that we just bought, and that my brother Mark is rehabbing with my wife Lisa’s IRA funds. This deal has some super cool, and one not so cool, twists to it, and it going to be a great case study for you to follow and learn from.”

My friend Lee has lost it… [Mike Ochsner: April 23, 2010. “I’m not sure if you were on the webinar last night, or if you came and left, because you were unsure exactly what you were seeing, but I’ve got to say, I was shocked by the whole thing. Lee has never, I repeat NEVER, done anything like this.” As in Casablanca: “Shocked! Shocked, I say.” In this case, Mike was shocked that Lee offered the some sort of discount  on an overpriced program–probably along the lines of the “$37,000 value for only $1,995” pitch.]

**Newsflash** Google Is Run By COMMUNISTS [Preston Ely: July 21, 2010. Explanation: “you’re not gonna believe this … so the other day, Google shut half my advertising campaigns down.  They wouldn’t even give me a reason.  Apparently they are communists who don’t like their advertisers making actual money. But that’s not all … Then I’m at lunch with this dude who tells me that Google secretly accepts bribes (I mean payments) from companies to ensure they get top organic rankings! Can you believe that??? Freakin crooks!” That’s a long-winded attempt to promote a book and a product that tells you how to get high rankings from Google.]

“Minnie Mouse Caught Cheating On Mickey With Preston Ely!” [Preston Ely: July 1, 2010. Here’s the explanation: “I used to love Minnie Mouse.  So much so that I wanted to punch Mickey in the whiskers and steal her.  There is a relatively good chance that you can’t relate.   I tell you this for the same reason I tell you anything, which isfor no reason at all.  I just happen to be hosting a huge real estate / internet marketing event in Orlando July 22-25, and it reminded me of my youthful Disney character crushes, of which there were many (*cough* Princess Jasmine *cough*).” Well, that may be more than we need to know]
“Caught On Tape!”  Preston, Britney Spears, & Marilyn Manson! [Preston Ely: July 5, 2010. OK, this is another one, though not quite as peculiar as Ely’s fascination with Minnie: “Don, I’m gonna be honest … the video you’re about to see if maybe one of the most scandalous I’ve ever made.  I almost wasn’t going to send this to you, but you’re going to learn soooo much that I just have to. It’s over two hours of me teaching marketing and motivation at the Freedom$oft event I hosted in March. You’ve never heard anything like this before in your life – I promise you.” I’m still not sure what Britney Spears and Marilyn Manson have to do with this.]
porn isn’t the answer [Preston Ely: March 25, 2010. Talk about a killer app: “Did you know that pornographers used to be the #1 generator of $$ on the internet?  True story.  Feel free to use that little fun fact at the water cooler today in the office.  Thankfully they’re not anymore.  Guess who is? We are.  You may not have known this, but my friends and I make more money on the internet than anyone in  the world.  We literally dominate it.  Google my name if you don’t believe me.  (preston ely)”

Do you think DC is sexy? Or does it look like he got beat with an iPad? [Than Merrill: May 11, 2010. “I know DC Fawcett really well…and he is decent looking guy, but he is definitely not Brad Pitt. And seriously look at this picture?  Who takes a picture like this? Who I say? Nobody normal that I know… However, today DC must be wearing some special cologne or milkbone underwear because I have never seen such madness. We ran a webinar with him this morning about his “Commercial Short Sale System and Partnering Opportunity” and as soon as the webinar ended the phones in my office blew up.”

Greg Clement & Jeff Walker Are Gay [Preston Ely: August 9, 2009. “Web definitions for gay: cheery: bright and pleasant; promoting a feeling of cheer; “a cheery hello”; “a gay sunny room”; “a sunny smile” What’d you think I meant? You’d be gay and cheery too if you had the bad ass SIMS system working for you like they have for themselves!’] 

COFFEE ENEMAS OR IRS ENEMAS…WHICH ONE IS HEALTHIER? [Dwan Bent Twyford: June 8, 2010. Honestly, Dwan and her husband Bill seem to be two of the more straight-shooting folks, and they send out far fewer e-mails than the folks above do. And perhaps the subject line isn’t misleading. From the e-mail: “If you have ever been on the receiving end of an IRS enema, you know how much control they actually have once they set their sights on you. Having personally gone through this. Join me on WEDNESDAY EDUCATIONAL DAY which is on THURSDAY this weekI never want to see it happen to you!
In a related category are the “Apology” e-mails. Often, these “apologize” for supposed computer crashes after an all-to-successful product introduction, or apologies for not having enough inbound lines for a webinar. You’d think these folks would get tired of playing the village idiot.

I am so sorry about what happened last week. [Greg Clement: February 9, 2010. This one almost sounds legitimate: “Last Thursday’s very important INTERNET training webinar was cancelled.  Jeff Walker got sick and couldn’t make it.”]

FW: sorry my fault [Greg Clement: February 2, 2010. “The email I sent yesterday had a link in it that didn’t work for a lot of people.  SORRY.” This sort of thing seems to happen a lot.]

Sorry, I sent you the wrong link. [Greg Clement: January 19, 2010. “I just sent you an email and it had the wrong link in it. Ignore the link that I sent you in the previous email, it won’t get you on the early bird webinar.”

*whoops* no links in that last one … (How to HIJACK Your Buyer’s Brain For Billions) [Preston Ely: June 3, 2010]

That’s the sort of e-mail subject lines being sent out now to try to capture the public’s clearly waning attention. Wonder what it’ll take next year? And, perhaps more seriously, it’s becoming more and more difficult to take these folks, their pitches, and their big buck products seriously. I’ll admit: McDonalds sells hamburgers with Ronald McDonald as a pitchman. But there’s a difference between a 99 cent hamburger and a $1,995 real estate program.