In our experience, all underwater homeowners start out there.  It is easier.  We are settled in and we have built our lives around where we live.  If there is some magic pill that we could use so that everything could be made OK and we could change our situation so that it made financial sense to stay, that would be our first choice.  It doesn't exist.  The best solutions Martin talks about are still just prolonging the inevitable. 

If you are upside down in your house, you have to at least consider getting out.  But how?

With that being said, this is an article that Martin wrote that speaks to a number of issues for underwater homeowners.  It is worth a read.

I’m Not a Total Idiot, You Know.

Martin Andelman

June 11, 2013

http://mandelman.ml-implode.com

I’m not a total idiot. I know what many if not most people involved in the foreclosure crisis want me to write about… and I know what people don’t want to hear. You do realize that, right?

I mean, after writing 900 articles over the last four plus years… to say nothing of the hundred odd podcasts I’ve produced… and with my email and even my cell phone online… you do realize if there’s one thing I know a whole lot about it’s how this country’s homeowners think and feel about most things on most days.

So, I know… you want to read about how a homeowner won some major victory in the courts somewhere… or how someone filed and got quiet title to their property… or how a bank couldn’t figure out who owned a loan and therefore was not allowed to foreclose… or maybe even something from the hot-off-the-presses-reports about JPMorgan Chase being a criminal enterprise… or how a homeowner drove over to their local county recorder’s office, found a forged signature and won their home free and clear as a result… you want to read anything to make you feel like there’s hope… anything to make the pain and frustration stop, even if only for a few hours.

I know… and I understand.

Don’t you think I’d like to write about all of that stuff and more? I would, I assure you… in fact, after writing about the financial and foreclosure crises for going on five years, more than just about anything I’d like to post a meaningful article about something hopeful for this country’s homeowners? And since it’s always been my nature to be optimistic about things in general, you’d think I’d be able to come up with something that could at least be placed in the “positive development” column.

But, I can’t. And it’s not that I don’t want to give people what they want… it’s the lying that would be required that I can’t seem to get past, because lying would be a prerequisite to writing about any of those things in some positive way. And even if I could figure out a way to write something without outright lying, it sure as heck would require a whole lot of lily gilding at the absolute least and I don’t like doing that either.

Look, and I mean this in the nicest way possible, unless you’re the kind of person who’s suggest-able enough to be hypnotized on stage to bark like a dog after being told to relax while staring at a pocket watch for a few seconds, there’s just no way you can say anything positive about the topics previously mentioned with any sort of confidence, hopeful undertone…. or straight face.

We… and by “we” I mean “homeowners”… are NOT winning.

In point of fact, most of what’s being told to homeowners today, as related to preventing foreclosure is just one flavor shy of unadulterated crap…. a shot in the dark at the very best… and by any objective measure, the chances of anyone truly winning in court are… well, how about if we just euphemistically refer to them as being… remote… since the alternate phrase referring to a snowball’s chances of survival in the underworld would sound so harsh.

Don’t get upset with me… it’s not my fault.

Look around and the only honest conclusion one can draw is that the only path that can reasonably be considered close to an answer to foreclosure is to get your loan modified… and I know that absolutely NO ONE likes hearing that. I know some that would prefer starting chemotherapy than the loan mod process… at least as they know it. But that loan modifications offer by far the best chances for avoiding foreclosure and remaining in the home is not just my opinion… it’s an overwhelmingly, indisputable fact… based on any and all actual numbers… there is no credible question about it.

Let’s get the facts understood and out of the way…

According to the U.S. Department of the Treasury, the overseer of the Making Home Affordable Program and Home Affordable Modification Program (“HAMP”), as of February 2013…

1. Servicers may enter new trial modifications into the HAMP system of record at any time.

2. 774,039 cumulative including 707,620 that had trial start dates prior to June 1, 2010 when Treasury implemented a verified income requirement.

3. A permanent modification is canceled when the borrower has missed three consecutive monthly payments. Includes 11,654 loans paid off.

Now according to The Hope Now Alliance, which I understand may not be seen as the most objective source for such data, as of February 2013, there have been 6.15 million loan modifications granted since the crisis began. Hope Now also says that in January, there were about 63,540 in-house or proprietary modifications granted, which places January’s total at around 78,400.

Now, don’t get started claiming the data is wrong… my overriding point is… so what if it is? How wrong would you like to peg it? Is it off by 50 percent? That would seem highly unlikely considering the number of people following it. But even so… were that the case, it still shows more loan modifications save homes than anything else… BY FAR, right?

We’ve lost roughly 6 million homes to foreclosure since the crisis began… and no one disputes that fact. And there are roughly 45-50 million mortgages in the United States… there were 48,394 in 2005… all according to the U.S. Statistical Abstract, table 961.

So, if we’ve lost 6 million to foreclosure, then we’re just over 10 percent… and if there are another 4-5 million at risk of foreclosure, according to LPS a couple months ago… then it looks like we’re in line to lost up near 20 percent of American homes to foreclosure before this tragedy even starts to be considered over. And the only number that reaches anywhere the millions when talking about saving homes from foreclosure is that associated with loan modifications. Period. How many homeowners have saved their homes arguing in court? I’d bet you it’s not millions…. not hundreds of thousands either. I’d be totally shocked to find the number made it out of four digit category.

I don’t even know what the #2 way would be to save a home from foreclosure without moving out of it…. I would have to guess that it would be a Chapter 13 bankruptcy filing? I don’t know, but I do know that its a doozy of a drop from #1 to number two on the list of ways people succeed in staying in homes saved from foreclosure.

What’s distressing is that last night, and just as one example, I listened to one of the new Internet radio programs being produced by someone who is ostensibly trying to help homeowners save their homes from foreclosure. I won’t mention any names… but for about an hour I listened to the various homeowner/guests share their ideas and strategies for saving their homes from foreclosure, while the host complemented them, saying she was taking notes, and acting almost giddy at how wonderfully they were all doing.

Not even one was anywhere close to having any possibility for success. They will all lose their homes eventually based on what they each explained they were doing to save them. Of that I am certain.

One woman from New Jersey brought up The Patriot Act as the basis for stopping a foreclosure and the show’s host became positively enthralled, saying how it was an idea she hadn’t heard before, how wonderful it was… how she was taking notes so she could share the idea with others on the show’s Website. If I had to put a number to it, I’d have to place the odds of the idea working to prevent a foreclosure at… let’s see… 4 – 7… carry the 3… hmmm… how about zero.

Listening didn’t make me mad at the show’s host because I don’t think she’s running any sort of scam… at least it didn’t seem like she was selling anything to homeowners based on what was being said. Rather, as I sat there listening, it just made me more and more sad for the homeowners who were pursuing paths that would end with their homes being lost, essentially without question.

Another homeowner guest on the program made a statement about how her bank could talk modification all they wanted, but she would only consider such an outcome under terms of her choosing, otherwise she said she would get her home free and clear because, she claimed with supposed confidence and based on signature irregularities on documents she had seen at her county recorder’s offices, they didn’t own her loan. Her voice quavered as she spoke and I could tell from my extensive experience talking with hundreds of homeowners, she was as close to breaking down in tears as she was to screaming out in anger.

That’s the sort of emotional instability that takes hold after someone gets so far behind on their mortgage that, although they might not ever admit it to anyone, they realize that there’s no way they’ll be able to catch up… that they’re already a victim of the foreclosure crisis… that they’re life is about to change as friends and family will soon look at them as “irresponsible borrowers,” and that they could at any time be waking up to their last day in the home they had never thought they would lose.

If they have kids at home, the idea of having to tell them what’s to come is near unthinkable, at least until it becomes unavoidable. They imagine pulling away on that last day in silence, no one daring to look in the rearview mirror, no one even able to turn on the radio… few things in their mind could seem less fair or inspire greater sadness. Some, during the nights when sleep becomes impossible, sit wondering whether a life insurance policies will pay off after suicide.

And it’s against such a backdrop of extreme emotional trauma that one’s mind either surrenders to what it views as an insurmountable battle, or it becomes susceptible to believing in things that mitigate the shame and reduce the stress… things that under different circumstances one would at the very least find the need to independently verify them before accepting them as true. Many in this mode, however, go to great lengths to avoid exposure to any information that dispels what they very much want to believe. Modifications: Pro or Con.

Okay, so I know some will try to tell you that loan modifications can’t work because you’ll have a clouded title for whatever reason and never end up owning your home even after you’ve paid off the modified mortgage, but if you want my answer to someone who says that sort of thing… here it is:

I don’t believe you… I think you’re wrong… and I don’t believe that story for a moment.

No, I’m not a lawyer, thank the good Lord, but to answer this question I’m confident that a law degree isn’t required. In fact, it could be a hindrance or impediment to clear thinking.

I don’t care what anyone says on this point… I’m saying that if you pay off your mortgage in 20, 30 or 40 years from now, there’s no way that any judge in this country rules that you don’t own the home for which you just finished paying. And I don’t care if an assignment was signed by Mickey Mouse, notarized by Donald Duck and filed up your butt… you’ll still own that house once you’ve made all the payments… period.

That’s just what I believe. If you want to believe otherwise that’s up to you… but, lawyer or not… I think you’re nuts.

The truth is you should hope I’m wrong and it does happen… you should hope that someday when you’ve made all your mortgage payments, Bank of America or JPMorgan Chase or whoever you’re “bank” is at that point, tries to get away with not sending you the release of the lien on your property… you should pray that’s exactly what happens to you at 70 or 80 something years old after paying on your mortgage each month for 30 or 40 years. Because if that does actually happen… if you actually get that lucky… you’re going to find yourself in front of a judge that’s going to hear what’s happened and be hopping mad at the bank standing on the other side of the courtroom.

After that, I’d have to guess that you’re not going to have to worry about working as a “Greeter” at Wal-Mart in your golden years… in fact, I’d say that would be about the right time to call your travel agent and book that cruise you’ve always dreamed of taking because you’re going home a winner.

And I’m not going to argue with anyone about this point, okay? There have been millions of loans modified in this country since 2008, and if you think any of those people are about to pay their monthly mortgage payments for the next so many decades and then be told they’re out in the cold and don’t own their homes, you’re just fruit loopy.

Where’s all this good news coming from?

It’s nothing short of astonishing, but this country is positively awash in positive economic news… it’s like it’s oozing from every pore of our national being. And what’s so amazing about the whole thing is that everything is better every day… even without anything measurable actually improving. It’s like a magic economy in which we’re told that everything is getting happier by the moment, while no one knows anyone who’s happier and everyone continues their own personal downward slide towards the poverty line.

I remember feeling like this at the end of the first quarter in 2009. Do you remember back then… it was like six months after Treasury Secretary Paulson and Fed Chief Ben Bernanke assured everyone in Congress that our global financial system was only hours away from complete collapse… hundreds of billions were needed immediately… there wasn’t even time to tell us how the money would be used. Don’t ask questions, you’ll get us all killed… now write a check and let me get on with saving the planet Earth.

Remember all that? Right. So, then six months later, remember how everything had gotten better… Wall Street was having record bonuses again… we had been saved by… a TARP? Just like when I went camping once when I was about 11 years old and it ended up pouring rain the whole weekend. Thank God one of the adults had brought a TARP. I don’t know what we would have done otherwise… probably all would have died… ummm… from all that rain… in July… I guess… maybe… it could happen.

What the heck am I babbling about? I don’t know… but what do you care? Why does my TARP story make any less sense than the one Secretary Paulson told us in October of 2008? Besides, by the end of the first quarter of 2009, everything was hunky dory again, and I remember writing that if whatever had happened was the sort of thing that was going to be fixed by the end of Q1 – 2009, then next time something like that happens, I’d be okay if the government just kept the whole thing to themselves and just woke me after things were fixed.

If it’s going to be fixed in six months or less, just leave me out of the whole “news” thing… I don’t really need to know, I’m often running more than six months behind on stuff anyway. I don’t even know who won on American Idol in 2011 yet… and don’t tell me… I’ve got it on TiVo to watch. Next time, just handle the Fall’s end-of-the-world-type-problem-that-gets-solved-in-six-months… and give yourself a pat on the back in the Spring.

So, then we were humming along just fine for a few months until nothing changed and then everything went straight off a cliff while I was napping on a Saturday, I’m pretty sure. And then after that things were bad… really bad… and getting worse… somewhere… I’m not sure where… nothing has really changed for me this whole time. My house keeps dropping in value, but once the credit markets are frozen and you’re underwater by six figures… what difference does that make?

It’s harder to make as much money as I used to, but that’s not that big a deal… I just spend less, work more, and make sure my life insurance premiums are current no matter what. I figure if I die next Tuesday at lunch… it’ll be perfect.

I guess one thing is different… our president helps me make my picks for The Final Four… and that’s about all he does really. He’s cool though… and I wish I was a little bit taller, I wish I was a baller, I wish I had a friend with a phone I could call her. I think that was a song from a few years back, but I’m sorry… now it reminds me of the leader of the free world.

I didn’t vote for him this last time… in fact, I didn’t vote at all this last time. Why? Because I was okay with just leaving the position open for the next four years while we looked around. I don’t think we needed to fill the spot for a couple of years. There’s no chance of our government accomplishing much good or bad in a couple of years without a president.

I would have been okay putting a toaster in the Oval Office for four years. Why? Because then… we’d have toast. I would have liked toast. CNN could announce that today it’s “Rye,” and I could have said to myself… “Now, that sounds delicious.”

And what do we have now? No toast. It sucks, really.

Instead we’ve got… well, come on now… what have we got? Oh, that’s right… we’ve got GOOD NEWS breaking out all over the place, or at least in all the places I’m not with all the people I don’t know or never meet.

Foreclosures aren’t down, housing isn’t up… but more people are apparently stupid.

Real estate prices do not just magically re-inflate themselves by the month. No, they do not… ever. Neither do they fall that fast either. Real estate prices behave nothing like a Duncan Yo-Yo. No one ever puts their home on the market for $300,000… and then a week or even a month later lowers the asking price to $200,000. Never happens… unless it’s someone on crack, I suppose. That’s why housing prices, when they decline, they decline gradually and often not in a straight line.

They don’t go shooting up by 25 percent in a matter of months either. Not even during the unprecedented bubble of 2003-2006 did they do that. No, they did not. I know… you heard a story from your cousin… but your cousin was full of crap and is broke now anyway, so why are we listening to him or her. For housing prices to increase, the demand for homes has to increase. And because homes cost a lot, for people to express their demand for homes, there has to be plenty of credit available… and jobs help too… people generally shy away from buying homes when they don’t have jobs… historically speaking anyway.

Well, none of those things has changed over this past year… except maybe to have worsened. Credit markets are as tight as ever… the only jobs we’ve created are minimum wage and part time, and we’ve got five million people in default awaiting foreclosure and thinking at least on occasion about killing themselves or someone else.

If you’re between 20-30… the only way you’re getting a good job is if you can hit the three-pointer, you become a sex worker, or your parents own a bank. And besides that, you’ve got enough student loan debt to choke a doctorate in computer science, so you’re not buying anything that costs more than you’ll likely make over the next 20 years.

And we’ve lost more than six million homes to foreclosure. I think based on that number alone, it would be safe to say that 10 million people are spending less than they used to, right? Can we all agree on that one teensey-weensey piece of economic brilliance? Losing six million homes to foreclosure and property values falling by 30 percent or more probably hasn’t done all that much to increasing the tax base in any given state either, right? Or, should we commission some people with degrees Piled Higher and Deeper to study the situation for a couple years before we jump to any conclusions on that point?

Our central bank buys 90 percent of our national debt these days, and speaking of that crazy bald guy with the beard whose quantitatively squeezing $80 billion worth of something in and out of our money supply, like he’s working the paste in and out of a toothpaste tube on a monthly basis. Have you heard how “repurchase agreements” work?

Bernanke loans money to the banks and broker/dealers who give him various pieces of paper as collateral for a few weeks and then they pay the money back and Bernanke gives them their worthless pieces of paper back and next month he does the whole thing all over again… and somehow THAT makes the stock market go up… and some people are actually calling and emailing me to ask why what he’s doing does what it does?

Shut up, shut up, shut up. It doesn’t do anything, just like it sounds like it couldn’t possibly do anything… at least nothing lasting or significant. If you want to accomplish more in the long run, you could just get drunk and pretend things were better. That would do more for the problem you were having in the long run than what we’ve got going on.

And yet, Warren Buffett, just a few days ago was quoted as saying:

The U.S. economy might be “dead in the water” without the stimulus provided by the Federal Reserve under Chairman Ben Bernanke, according to Warren Buffett, CEO of Berkshire Hathaway. “I think very cheap money makes things happen, it makes asset values higher. When asset values are higher, people do have a greater propensity to spend,” Buffett told CNBC. “I think Bernanke has sort of carried the load himself during this period.”

Buffett thinks Bernanke has, talking about the economy of the United States of America, “carried the load himself?” And I’m supposed to somehow consider what’s been going on “good news?” One guy is carrying our collective load and we’re doing better? Better than what, for heaven’s sake? Unless the one guy carrying our economy is wearing an ‘S’ on his chest, and can actually move faster than a speeding bullet and is more powerful than a locomotive… able to leap tall buildings in a single bound… then Buffet’s statement terrifies me to the point that I may pee in my pants at any moment.

According to the Bureau of Economic Analysis, U.S. GDP actually contracted at an annual rate of 0.1 percent during the fourth quarter of 2012, marking the first contraction in the official numbers in more than three years… and if you’re technically oriented enough to follow John Williams’ site, shadowstats.com, you’ll find things are much worse than even that. And, Europe’s EU, it’s worth mentioning, is positively imploding. I’m not sure, but what would you like to bet that Greece… the sovereign nation is worth less than “Grease”… the musical. I don’t know if that’s actually true on paper or not, but I know which one I’d rather own… how about you?

Foreclosures aren’t down because of “good news,” because there is no significant “good news.”

New state laws in some states and delays by servicers and homeowners are temporarily making foreclosures appear to be decreasing. I promise you that the foreclosure crisis is not one of those things that they can make go away in any number of months. People hear prices are up and in this market, Realtors will list almost anything.

I found a Realtor on my lawn the other day, asking me if we wanted to sell our house. Can you imagine that? I mean, door-to-door… would you like to sell your house? That’s got to be a lot harder than selling magazine subscriptions or Girl Scout cookies. But our housing markets are “cooking,” right? Back to normal… at least a third of the sales are all cash in most states… and in some states HALF?

A real estate market? I’d say not.

And so, I really am sorry that I can’t write more “happy homeowner”stories of how Mr. & Mrs. Jones are prevailing in courts across this land and ending up getting their homes fro free because of something being wrong that involves a signature… or ten signatures. It’s just not happening.

You don’t have to like what I write all the time, but you ignore it at your own peril. Take your power back and get on a track that makes the best of a terrible situation… regain control of your life… they may be able to take your money… but they can’t take your time unless you let them.

And I’m not telling anyone not to defend their homes through whatever means they deem necessary. I’m just saying that you should know the facts of the path on which you’ve decided to travel.

Mandelman out.

In an op-ed published this week in the Dorchester Reporter, a community newspaper based in the Dorchester section of Boston, the Massachusetts Democrat said the FHFA "has blocked the way" to such deals through what is known as an "arm's-length" policy.

Warren highlighted certain short sales where a borrower's family or friends, or local nonprofit organizations, seek to buy an underwater home at fair market value and then arrange for the original homeowner to keep the property either by repurchasing it or paying rent.

"The mortgage company gets the same amount as in a sale to strangers, but the homeowner has a last chance to save the family home. This is a win-win for both sides—more money for the mortgage lender and a family that saves their home," she wrote. "But the FHFA flatly refuses these deals. The agency's so-called 'arm's-length' policy means that it will instead demand that the family be moved out and the home be sold at a lower-priced foreclosure sale."

The agency's reasoning, Warren said, is to prevent "sweetheart insider deals that benefit the homeowners at the expense of Fannie and Freddie."

"But that makes no sense when the house is sold at market value or when people affiliated with the homeowner put in the highest bid to save the home," she said. "In those cases, the identity of the bidder makes no meaningful difference because Fannie and Freddie's bottom line stays the same. And every time a family stays in a home—rather than being pushed into foreclosure—the neighborhood does better and the overall housing market does better—both of which help the value of all the other mortgages that FHFA holds."

She described the plight of a specific Dorchester resident, Ramon Suero, and his family who hit hard times and fell behind on payments.

"The situation was grim, but a non-profit called Boston Community Capital thought the Suero family was a good risk. The group made a cash offer to buy the property at more than its market value for the purpose of selling it back to the family," Warren wrote. "The non-profit recognized that Ramon and Rosanna could eventually make the payments and were hard-working people who simply caught a bad break.

"Following the FHFA's rigid rule, however, Freddie Mac refused the deal. Instead of doing everything it could to help keep residents in their homes, the FHFA bent over backwards to have the Sueros thrown out. This is exactly the opposite of what should be happening."

But in an emailed statement, an FHFA spokesperson said short sale deals can be exposed to elevated risks of fraud.

"Short sales are, by their nature, vulnerable to manipulation and FHFA's policy requiring that they be conducted at 'arm's-length' is in keeping with industry standard and is intended to avoid conflicts of interest and fraud," the spokesperson said. "FHFA has worked very hard to keep families in their homes, as evidenced by the more than 2.3 million loan modifications that have been completed since FHFA took over as conservator of Fannie Mae and Freddie Mac."

The only reason they care about who buys the house is that they want as many homeowners as possible to keep paying on their homes.  We, the underwater homeowners are the last domino to fall and the only ones that didn't get bailed out.  Their plan is for us to hold up the rest of the dominos.  Don't do it.  Get out while you still can. 

CLICK HERE for original article on National Mortgage News

Many of the members of the Financial Revival Group have been waiting for this extension to happen and know what it is about.  As we have been discussing in our Member Emails and in our Monthly Members Only Meetings, we fully expected this extension to take place.  We even expressed to you that we thought it would simply be an add-on to the fiscal cliff bill, which indeed it was.

It is official.  The Mortgage Forgiveness Debt Relief Act has been extended through the end of 2013. 

We still have more to do because we think this bill should have been extended for three years, not just one.  However, with all of the lobbying that went on from many different groups, we don’t believe that further extensions of this bill will be an issue. 

Now, for the benefit of our readers who are not members of the Financial Revival Group and don’t know what this act is about, here is a quick explanation.

If you owe a debt and that debt is forgiven, you have received a financial benefit from that transaction.  When the creditor finally gives up or settles the debt for less than is owed and stops further action to collect the debt, they have officially taken a loss.  The IRS says that since you actually received the money and didn’t fully pay it back, you received a “gift” from that creditor and that “gift” amount is taxable as normal income. 

In the past, we saw this mostly with credit card companies and other uncollectable debts.  If you settled a $20,000 credit card debt for $8,000 you and the IRS would receive a form 1099 for $12,000.  (The IRS gets a copy to make sure you include with your next tax return)  You would have to pay income tax on that $12,000.  If you were in a 15% tax bracket, your tax bill the following year would increase by $1,800.  Not a bad trade by most standards. 

With the continuing housing collapse, we are seeing this same event in real estate but with much larger numbers.  So to help out underwater homeowners, the Bush Administration passed the Mortgage Forgiveness Debt Relief Act in 2007 that says that if your bank suffers a loss on your house, in certain cases, you would be exempt from the tax.  This law expired at the end of 2010 but was extended through the end of 2012 by the Obama Administration.  Now the bill has been extended again through the end of 2013.

This law applies to you if:

1. Your bank takes a loss on your house as a result of a foreclosure, deed in lieu of foreclosure, short sale, loan modification or principle reduction.
2. The event is completed by the end of 2013.  That means your foreclosure, short sale etc. has to be finalized by the end of the year. 
3. The property is your primary residence.
4. The money forgiven was used to buy, build or substantially improve the property.
5. The forgiven amount is less than $2 Million.  Hey, movie stars and basketball players need a break too.

 So, if you have been waiting for the extension of this bill to make a move on your underwater house, now is the time.  Nothing is quick in this process, no matter which way you decide to go.  The first thing you need to do is to find out what all of your options look like and how they will affect you moving forward. 

If you or someone you know wants to find out about every option you have available, you can start with a free 15 minute consultation with the Financial Revival Group.  This free, no obligation phone call will help you get your immediate questions answered and put you on the right track based on your particular situation.  Call us at 425-259-2600 to schedule your consultation or CLICK HERE to email us. 

While Much of America Suffers with Stagnation, Washington’s Political Class Is Having a Very Merry Christmas

In large part because of an excessive burden of government, the American economy is suffering European-style stagnation, with even the Washington Post now confessing that growth far below the long-run trend.

This helps explain why job creation has been so dismal in recent years, with more than twenty million Americans out of work, underemployed, or dropped out of the workforce.

But there is one pocket of enormous prosperity in America. It will warm your heart to know that our overlords in Washington are living the life of Riley.

Here are some of the highlights of a remarkable Reuters expose about the fat cats of big government, starting with the huge gap between the insider elite and the poor.

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government’s help. And the rich are getting richer because of it. The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 – a ratio of 54 to 1. That gap is up from 39 to 1 two decades ago. It’s wider than in any of the 50 states and all but two major cities.

One small but important correction in the previous excerpt. As I have noted many times, the “poor are getting poorer” because of “the government’s help.”

The article then explains that a lot of the redistribution in Washington is from taxpayers to a pampered elite.

…in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too – especially in the nation’s capital. …Two decades of record federal spending and expanding regulation have fostered a growing upper class of federal contractors, lobbyists and lawyers in the District of Columbia area. …Direct spending by the federal government accounts for 40 percent of the area’s $425 billion-a-year economy. …Roughly 15 cents of every dollar from the entire federal procurement budget stays in or around the government’s hometown, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. Last year, that was about $80 billion out of $536 billion in procurement spending, he said. The 15 percent share is far greater than the region’s 2 percent portion of the U.S. population. “We’re seeing an enormous transfer of wealth from taxpayers to the Washington economy,” said Fuller.

And all this spending leads to an elitist class of cronyists, politicians, contractors, bureaucrats, and lobbyists. No wonder the DC area is home to some of the richest counties in America.

But unlike other well-to-do areas, the wealth in DC is rarely accumulated by honest means.

Instead, it’s the result of perverse form of redistribution to big-government insiders. Check out these horrifying details.

Washington-area workers with incomes above $100,000 rose to 22 percent of the workforce, up from 14 percent in 1990, adjusted for inflation, a Reuters analysis of Census data found. …there are 320,000 federal jobs in the Washington area. Within the District of Columbia, 55 percent pay $100,000 or more. …Nearly 13,000 lobbyists registered with the government last year and reported $3.3 billion in fees, or about $260,000 per lobbyist. That’s 22 percent more lobbyists and 37 percent more inflation-adjusted revenue per lobbyist than in 1998… Times are flush for Washington lawyers as well. The number of attorneys in the area has risen 44 percent, twice the national rate, to 41,000 since 1999. Their average income, adjusted for inflation, rose 35 percent to $156,000.

I guess we know who’s having a merry Christmas.

All these rich bureaucrats, lobbyists, politicians, cronyists, and contractors certainly are living the good life, as revealed in a Washington Post story on the “Region’s Rising Wealth.” Here are some sordid excerpts.

…the D.C. region already has a reputation as one of the most affluent in the country. But the area is fast emerging as a home to the truly rich as well. High-end luxury retailers are responding. Brands such as Aston Martin are expanding their operations into the area — betting, for instance, that there will be plenty of customers who can afford the $280,000 sports car James Bond drives in the movies. …Already there are 500 Aston Martin owners in the area with the potential for more.

I’ve already shared an interview with Andrew Ferguson by Reason TV that should make all taxpayers upset. Why should ordinary taxpayers be coerced to subsidize Washington’s high-flying parasite economy?

Redistribution is a bad thing in most circumstances. But when you redistribute from poor to rich, that’s utterly perverse.

Well, thanks to profligacy by Bush and Obama, that’s exactly what’s happened.

The region’s top one percent of households make more than a half million dollars yearly — far more than the national average for the one percent, according to a study of Census data by Sentier Research, an Annapolis-based data analysis firm. And these top earners — many of whom are from dual-income households and benefit from federal contracting — weathered the recession better than their counterparts in some other metropolitan areas and the nation. More are moving beyond comfortable affluence to a much higher standard of living. “What is unique to D.C. is that there has been a change in the complexion of wealth here. There didn’t used to be much of this ultra-high-net-worth business here and now there is,” said Susan Traver, the regional president of BNY Mellon Wealth Management.

But everyone in the rest of America at least can go to sleep tonight with a warm and fuzzy feeling of joy, knowing that our money has created such comfortable lives for the political elite.

Milton Pedraza, the CEO of the Luxury Institute, a research and consulting firm, said that purveyors of luxury goods are drawn to the area because it has…a stable economy bolstered by the federal government. Government contracting, where some local entrepreneurs and business owners amassed their fortunes, has been a key driver of the region’s economy for three decades. A third of the region’s gross regional product still comes from federal spending… “Let’s face it . . . the only place with money during the recession was Washington, D.C.,” Pedraza said.

Perhaps we should make a slight correction in the previous excerpt. After all, shouldn’t it read “America suffered a recession because the only place with money was Washington, DC.”

Let’s wrap this up. A few years ago, I issued this video about overpaid bureaucrats.

But I now realize my mini-documentary only scratches the  surface. Yes, there are too many paper-pushers on the government payroll, and of course they get far too much compensation.

But what about unofficial government workforce of over-paid contractors? And all the lobbyists, consultants, and cronyists that exist only because we have a bloated federal government?

Our nation is being seriously damaged by this corrupt system, and I fear that the outcome will be Argentinian-style decline.

Anyway, I found this blog post by well respected gun expert and author Larry Correia.  It explains the gun argument very well and debunks much of the propaganda of the New York and Washington DC media. 

Take a read and let me know what you think. 

Written by Larry Correia

I didn’t want to post about this, because frankly, it is exhausting. I’ve been having this exact same argument for my entire adult life. It is not an exaggeration when I say that I know pretty much exactly every single thing an anti-gun person can say. I’ve heard it over and over, the same old tired stuff, trotted out every single time there is a tragedy on the news that can be milked. Yet, I got sucked in, and I’ve spent the last few days arguing with people who either mean well but are uninformed about gun laws and how guns actually work (who I don’t mind at all), or the willfully ignorant (who I do mind), or the obnoxiously stupid who are completely incapable of any critical thinking deeper than a Facebook meme (them, I can’t stand).

Today’s blog post is going to be aimed at the first group. I am going to try to go through everything I’ve heard over the last few days, and try to break it down from my perspective. My goal tonight is to write something that my regular readers will be able to share with their friends who may not be as familiar with how mass shootings or gun control laws work.

A little background for those of you who don’t know me, and this is going to be extensive so feel free to skip the next few paragraphs, but I need to establish the fact that I know what I am talking with, because I am sick and tired of my opinion having the same weight as a person who learned everything they know about guns and violence from watching TV.

I am now a professional novelist. However, before that I owned a gun store. We were a Title 7 SOT, which means we worked with legal machineguns, suppresors, and pretty much everything except for explosives. We did law enforcement sales and worked with equipment that is unavailable from most dealers, but that means lots and lots of government inspections and compliance paperwork. This means that I had to be exceedingly familiar with federal gun laws, and there are a lot of them. I worked with many companies in the gun industry and still have many friends and contacts at various manufacturers. When I hear people tell me the gun industry is unregulated, I have to resist the urge to laugh in their face.

I was also a Utah Concealed Weapons instructor, and was one of the busiest instructors in the state. That required me to learn a lot about self-defense laws, and because I took my job very seriously, I sought out every bit of information that I could. My classes were longer than the standard Utah class, and all of that extra time was spent on Use of Force, shoot/no shoot scenarios, and role playing through violent encounters. I have certified thousands of people to carry guns.

I have been a firearms instructor, and have taught a lot of people how to shoot defensively with handguns, shotguns, and rifles. For a few years of my life, darn near every weekend was spent at the range. I started out as an assistant for some extremely experienced teachers and I also had the opportunity to be trained by some of the most accomplished firearms experts in the world. The man I stole most of my curriculum from was a Lieutenant Colonel in the Army Special Forces, turned federal agent SWAT team commander. I took classes in everything from wound ballistics (10 hours of looking at autopsy slides) to high-speed cool-guy door-kicking stuff. I’ve worked extensively with military and law enforcement personnel, including force on force training where I played the OpFor (i.e. I got to be the bad guy, because I make an awesome bad guy. You tell me how evil/capable you want me to be, and how hard you want your men to work, and I’d make it happen, plus I can take a beating). Part of this required learning how mass shooters operate and studying the heck out of the actual events.

I have been a competition shooter. I competed in IPSC, IDPA, and 3gun. It was not odd for me to reload and shoot 1,000 rounds in any given week. I fired 20,000 rounds of .45 in one August alone. I’ve got a Remington 870 with approximately 160,000 rounds through it. I’ve won matches, and I’ve been able to compete with some of the top shooters in the country. I am a very capable shooter. I only put this here to convey that I know how shooting works better than the vast majority of the populace.

I have written for national publications on topics relating to gun law and use of force. I wrote for everything from the United States Concealed Carry Association to SWAT magazine. I was considered a subject matter expert at the state level, and on a few occasions was brought in to testify before the Utah State Legislature on the ramifications of proposed gun laws. I’ve argued with lawyers, professors, professional lobbyists, and once made a state rep cry.

Basically for most of my adult life, I have been up to my eyeballs in guns, self-defense instruction, and the laws relating to those things. So believe me when I say that I’ve heard every argument relating to gun control possible. It is pretty rare for me to hear something new, and none of this stuff is new.

Armed Teachers

So now that there is a new tragedy the president wants to have a “national conversation on guns”. Here’s the thing. Until this national conversation is willing to entertain allowing teachers to carry concealed weapons, then it isn’t a conversation at all, it is a lecture.

Now when I say teachers carrying concealed weapons on Facebook I immediately get a bunch of emotional freak out responses. You can’t mandate teachers be armed! Guns in every classroom! Emotional response! Blood in the streets!

No. Hear me out. The single best way to respond to a mass shooter is with an immediate, violent response. The vast majority of the time, as soon as a mass shooter meets serious resistance, it bursts their fantasy world bubble. Then they kill themselves or surrender. This has happened over and over again.

Police are awesome. I love working with cops. However any honest cop will tell you that when seconds count they are only minutes away. After Colombine law enforcement changed their methods in dealing with active shooters. It used to be that you took up a perimeter and waited for overwhelming force before going in. Now usually as soon as you have two officers on scene you go in to confront the shooter (often one in rural areas or if help is going to take another minute, because there are a lot of very sound tactical reasons for using two, mostly because your success/survival rates jump dramatically when you put two guys through a door at once. The shooter’s brain takes a moment to decide between targets). The reason they go fast is because they know that every second counts. The longer the shooter has to operate, the more innocents die.

However, cops can’t be everywhere. There are at best only a couple hundred thousand on duty at any given time patrolling the entire country. Excellent response time is in the three-five minute range. We’ve seen what bad guys can do in three minutes, but sometimes it is far worse. They simply can’t teleport. So in some cases that means the bad guys can have ten, fifteen, even twenty minutes to do horrible things with nobody effectively fighting back.

So if we can’t have cops there, what can we do?

The average number of people shot in a mass shooting event when the shooter is stopped by law enforcement: 14. The average number of people shot in a mass shooting event when the shooter is stopped by civilians: 2.5. The reason is simple. The armed civilians are there when it started.

The teachers are there already. The school staff is there already. Their reaction time is measured in seconds, not minutes. They can serve as your immediate violent response. Best case scenario, they engage and stop the attacker, or it bursts his fantasy bubble and he commits suicide. Worst case scenario, the armed staff provides a distraction, and while he’s concentrating on killing them, he’s not killing more children.

But teachers aren’t as trained as police officers! True, yet totally irrelevant. The teacher doesn’t need to be a SWAT cop or Navy SEAL. They need to be speed bumps.

But this leads to the inevitable shrieking and straw man arguments about guns in the classroom, and then the pacifistic minded who simply can’t comprehend themselves being mandated to carry a gun, or those that believe teachers are all too incompetent and can’t be trusted. Let me address both at one time.

Don’t make it mandatory. In my experience, the only people who are worth a darn with a gun are the ones who wish to take responsibility and carry a gun. Make it voluntary. It is rather simple. Just make it so that your state’s concealed weapons laws trump the Federal Gun Free School Zones act. All that means is that teachers who voluntarily decide to get a concealed weapons permit are capable of carrying their guns at work. Easy. Simple. Cheap. Available now.

Then they’ll say that this is impossible, and give me all sorts of terrible worst case scenarios about all of the horrors that will happen with a gun in the classroom… No problem, because this has happened before. In fact, my state laws allow for somebody with a concealed weapons permit to carry a gun in a school right now. Yes. Utah has armed teachers. We have for several years now.

When I was a CCW instructor, I decided that I wanted more teachers with skin in the game, so I started a program where I would teach anybody who worked at a school for free. No charge. Zip. They still had to pay the state for their background check and fingerprints, but all the instruction was free. I wanted more armed teachers in my state.

I personally taught several hundred teachers. I quickly discovered that pretty much every single school in my state had at least one competent, capable, smart, willing individual. Some schools had more. I had one high school where the principal, three teachers, and a janitor showed up for class. They had just had an event where there had been a threat against the school and their resource officer had turned up AWOL. This had been a wake up call for this principal that they were on their own, and he had taken it upon himself to talk to his teachers to find the willing and capable. Good for them.

After Virginia Tech, I started teaching college students for free as well. They were 21 year old adults who could pass a background check. Why should they have to be defenseless?  None of these students ever needed to stop a mass shooting, but I’m happy to say that a couple of rapists and muggers weren’t so lucky, so I consider my time well spent.

Over the course of a couple years I taught well over $20,000 worth of free CCW classes. I met hundreds and hundreds of teachers, students, and staff. All of them were responsible adults who understood that they were stuck in target rich environments filled with defenseless innocents. Whether they liked it or not, they were the first line of defense. It was the least I could do.

Permit holders are not cops. The mistake many people make is that they think permit holders are supposed to be cops or junior danger rangers. Not at all. Their only responsibility is simple. If someone is threatening to cause them or a third person serious bodily harm, and that someone has the ability, opportunity, and is acting in a manner which suggest they are a legitimate threat, then that permit holder is allowed to use lethal force against them.

As of today the state legislatures of Texas, Tennessee, and Oklahoma are looking at revamping their existing laws so that there can be legal guns in school. For those that are worried these teachers will be unprepared, I’m sure there would be no lack of instructors in those states who’d be willing to teach them for free.

For everyone, if you are sincere in your wish to protect our children, I would suggest you call your state representative today and demand that they allow concealed carry in schools.

Gun Free Zones

Gun Free Zones are hunting preserves for innocent people. Period.

Think about it. You are a violent, homicidal madman, looking to make a statement and hoping to go from disaffected loser to most famous person in the world. The best way to accomplish your goals is to kill a whole bunch of people. So where’s the best place to go shoot all these people? Obviously, it is someplace where nobody can shoot back.

In all honesty I have no respect for anybody who believes Gun Free Zones actually work. You are going to commit several hundred felonies, up to and including mass murder, and you are going to refrain because there is a sign? That No Guns Allowed sign is not a cross that wards off vampires. It is wishful thinking, and really pathetic wishful thinking at that.

The only people who obey No Guns signs are people who obey the law. People who obey the law aren’t going on rampages.

I testified before the Utah State Legislature about the University of Utah’s gun ban the day after the Trolley Square shooting in Salt Lake City. Another disaffected loser scumbag started shooting up this mall. He killed several innocent people before he was engaged by an off duty police officer who just happened to be there shopping. The off duty Ogden cop pinned down the shooter until two officers from the SLCPD came up from behind and killed the shooter. (turned out one of them was a customer of mine) I sent one of my employees down to Trolley Square to take a picture of the shopping center’s front doors. I then showed the picture to the legislators. One of the rules was NO GUNS ALLOWED.

The man that attacked the midnight showing of Batman didn’t attack just any theater. There were like ten to choose from. He didn’t attack the closest. It wasn’t about biggest or smallest. He attacked the one that was posted NO GUNS ALLOWED.

There were four mass killing attempts this week. Only one made the news because it helped the agreed upon media narrative.

1. Oregon. NOT a gun free zone. Shooter confronted by permit holder. Shooter commits suicide. Only a few casualties.
2. Texas. NOT a gun free zone. Shooter killed immediately by off duty cop. Only a few casualties.
3. Connecticut. GUN FREE ZONE. Shooters kills until the police arrive. Suicide. 26 dead.
4. China. GUN FREE COUNTRY. A guy with a KNIFE stabs 22 children.

And here is the nail in the coffin for Gun Free Zones. Over the last fifty years, with only one single exception (Gabby Giffords), every single mass shooting event with more than four casualties has taken place in a place where guns were supposedly not allowed.

The Media

Every time there is a mass shooting event, the vultures launch. I find it absolutely fascinating. A bunch of people get murdered, and the same usual suspects show up with the same tired proposals that we’ve either tried before or logic tells us simply will not work. They strike while the iron is hot, trying to push through legislation before there can be coherent thought. We’ve seen this over and over and over again. We saw it succeed in England. We saw it succeed in Australia. We’ve seen it succeed here before.

Yet when anyone from my side responds, then we are shouted at that we are blood thirsty and how dare we speak in this moment of tragedy, and we should just shut our stupid mouths out of respect for the dead, while they are free to promote policies which will simply lead to more dead… If the NRA says something they are bloodthirsty monsters, and if they don’t say something then their silence is damning guilt. It is hypocritical in the extreme, and when I speak out against this I am called every name in the book, I want dead children, I’m a cold hearted monster (the death threats are actually hilarious). If I become angry because they are promoting policies which are tactically flawed and which will do the exact opposite of the stated goals, then I am a horrible person for being angry. Perhaps I shouldn’t be allowed to own guns at all.

But that’s not why I want to talk about the media. I want to talk about the media’s effect on the shooters.

Put yourself in the shoes of one of these killers. One nice thing about playing the villain and being a punching bag for cops, soldiers, and permit holders is that you need to learn about how the bad guys think and operate. And most of the mass shooters fit a similar profile.

The vast majority (last I saw it was over 80%) are on some form of psychotropic drug and has been for many years. They have been on Zoloft or some serotonin inhibitor through their formative years, and their decision making process is often flawed. They are usually disaffected, have been bullied, pushed around, and have a lot of emotional problems. They are delusional. They see themselves as victims, and they are usually striking back at their peer group.

These people want to make a statement. They want to show the world that they aren’t losers. They want to make us understand their pain. They want to make their peer group realize that they are powerful. They’ll show us. The solution is easy. It’s right there in front of your nose.

If you can kill enough people at one time, you’ll be on the news, 24/7, round the clock coverage. You will become the most famous person in the world. Everyone will know your name. You become a celebrity. Experts will try to understand what you were thinking. Hell, the President of the United States, the most important man in the world, will drop whatever he is doing and hold a press conference to talk about your actions, and he’ll even shed a single manly tear.

You are a star.

Strangely enough, this is one of the only topics I actually agree with Roger Ebert on. He didn’t think that the news should cover the shooters or mention their names on the front page of the paper. So whenever the press isn’t talking about guns, or violent movies, or violent video games, or any other thing that hundreds of millions of people participated in yesterday without murdering anybody, they’ll keep showing the killer’s picture in the background while telling the world all about him and his struggles.

And then the cycle repeats, as the next disaffected angry loner takes notes.

They should not be glamorized. They should be hated, despised, and forgotten. They are not victims. They are not powerful. They are murdering scum, and the only time their names should be remembered is when people like me are studying the tactics of how to neutralize them faster.

Mental Health Issues

And right here I’m going to show why I’m different than the people I’ve been arguing with the last few days. I am not an expert on mental health issues or psychiatry or psychology. My knowledge of criminal psychology is limited to understanding the methods of killers enough to know how to fight them better.

So since I don’t have enough first-hand knowledge about this topic to comment intelligently, then I’m not going to comment… Oh please, if only some of the people I’ve been arguing with who barely understand that the bullets come out the pointy end of the gun would just do the same.

Gun Control Laws

As soon as there is a tragedy there comes the calls for “We have to do something!” Sure, the something may not actually accomplish anything as far as solving whatever the tragedy was or preventing the next one, but that’s the narrative. Something evil happened, so we have to do something, and preferably we have to do it right now before we think about it too hard.

The left side of the political spectrum loves it some gun control. Gun control is historically extremely unpopular in red state and purple state America, and thus very hard to pass bit stuff, but there’s a century’s accumulation of lots and lots of small ones. There have been a handful of major federal laws passed in the United States relating to guns, but the majority of really strict gun control has primarily been enacted in liberal dominated urban areas. There are over 20,000 gun laws on the books, and I have no idea how many pages of regulations from the BATF related to the production and selling of them. I’ve found that the average American is extremely uneducated about what gun laws already exist, what they actually do, and even fundamental terminology, so I’m going to go through many of the things I’ve seen argued about over the last few days and elaborate on them one by one.

I will leave out the particularly crazy things I was confronted with, including the guy who was in favor of mandating “automatic robot gun turrets” in schools. Yes. Heaven forbid we let a teacher CCW, so let’s put killer robots (which haven’t actually been invented yet) in schools. Man, I wish I was making this up, but that’s Facebook for you.

We need to ban automatic weapons.

Okay. Done. In fact, we pretty much did that in 1934. The National Firearms Act of 1934 made it so that you had to pay a $200 tax on a machinegun and register it with the government. In 1986 that registry was closed and there have been no new legal machineguns for civilians to own since then.

Automatic means that when you hold down the trigger the gun keeps on shooting until you let go or run out of ammo. Actual automatic weapons cost a lot of money. The cheapest one you can get right now is around $5,000 as they are all collector’s items and you need to jump through a lot of legal hoops to get one. To the best of my knowledge, there has only ever been one crime committed with an NFA weapon in my lifetime, and in that case the perp was a cop.

Now are machineguns still used in crimes? Why, yes they are. For every legally registered one, there are conservatively dozens of illegal ones in the hands of criminals. They either make their own (which is not hard to do) or they are smuggled in (usually by the same people that are able to smuggle in thousands of tons of drugs). Because really serious criminals simply don’t care, they are able to get ahold of military weapons, and they use them simply because criminals, by definition, don’t obey the law. So even an item which has been basically banned since my grandparents were kids, and which there has been no new ones allowed manufactured since I was in elementary school, still ends up in the hands of criminals who really want one. This will go to show how effective government bans are.

When you say “automatic” you mean full auto, as in a machinegun. What I think most of these people mean is semi-auto.

Okay. We need to ban semi-automatic weapons!

Semi-automatic means that each time you pull the trigger the action cycles and loads another round. This is the single most common type of gun, not just in America, but in the whole world. Almost all handguns are semi-automatic. The vast majority of weapons used for self-defense are semi-automatic, as are almost all the weapons used by police officers.  It is the most common because it is normally the most effective.

Semi-automatic is usually best choice for defensive use. It is easier to use because you can do so one handed if necessary, and you are forced to manipulate your weapon less. If you believe that using a gun for self-defense is necessary, then you pretty much have to say that semi-auto is okay.

Banning semi-automatic basically means banning all guns. I’ll get to the functional problems with that later.

We should ban handguns!

Handguns are tools for self-defense, and the only reason we use them over the more capable, and easier to hit with rifles or shotguns is because handguns are portable. Rifles are just plain better, but the only reason I don’t carry an AR-15 around is because it would be hard to hide under my shirt.

Concealed Carry works. As much as it offends liberals and we keep hearing horror stories about blood in the streets, the fact is over my lifetime most of the United States has enacted some form of concealed carry law, and the blood in the streets wild west shootouts over parking spaces they’ve predicted simply hasn’t happened. At this point in time there are only a few hold out states, all of them are blue states and all of them have inner cities which suffer from terrible crime, where once again, the criminals simply don’t care.

For information about how more guns actually equals less crime, look up the work of Dr. John Lott. And since liberals hate his guts, look up the less famous work of Dr. Gary Kleck, or basically look up the work of any criminologist or economist who isn’t writing for Slate or Mother Jones.

As for why CCW is good, see my whole first section about arming teachers for a tiny part of the whole picture. Basically bad people are going to be bad and do bad things. They are going to hurt you and take your stuff, because that’s what they do. That’s their career, and they are as good at it as you are at your job. They will do this anywhere they think they can get away with it.  We fixate on the mass shooters because they grab the headlines, but in actuality your odds of running in to one of them is tiny. Your odds of having a violent encounter with a run of the mill criminal is orders of magnitudes higher.

I do find one thing highly amusing. In my personal experience, some of the most vehement anti-gun people I’ve ever associated with will usually eventually admit after getting to know me, that if something bad happened, then they really hope I’m around, because I’m one of the good ones. Usually they never realize just how hypocritical and naïve that is.

We should ban Assault Rifles!

Define “assault rifle”…

Uh…

Yeah. That’s the problem. The term assault rifle gets bandied around a lot. Politically, the term is a loaded nonsense one that was created back during the Clinton years. It was one of those tricks where you name legislation something catchy, like PATRIOT Act. (another law rammed through while emotions were high and nobody was thinking, go figure).

To gun experts, an assault rifle is a very specific type of weapon which originated (for the most part) in the 1940s. It is a magazine fed, select fire (meaning capable of full auto), intermediate cartridge (as in, actually not that powerful, but I’ll come back to that later) infantry weapon.

The thing is, real assault rifles in the US have been heavily regulated since before they were invented. The thing that the media and politicians like to refer to as assault rifles is basically a catch all term for any gun which looks scary.

I had somebody get all mad at me for pointing this out, because they said that the term had entered common usage. Okay… If you’re going to legislate it, DEFINE IT.

And then comes up that pesky problem. The US banned assault rifles once before for a decade and the law did absolutely nothing. I mean, it was totally, literally pointless. The special commission to study it said that it accomplished absolutely nothing. (except tick a bunch of Americans off, and as a result we bought a TON more guns) And the reason was that since assault weapon is a nonsense term, they just came up with a list of arbitrary features which made a gun into an assault weapon.

Problem was, none of these features actually made the gun functionally any different or somehow more lethal or better from any other run of the mill firearm. Most of the criteria were so silly that they became a huge joke to gun owners, except of course, for that part where many law abiding citizens accidentally became instant felons because one of their guns had some cosmetic feature which was now illegal.

One of the criteria was that it was semi-automatic. See above. Hard to ban the single most common and readily available type of gun in the world. (unless you believe in confiscation, but I’ll get to that). Then what if it takes a detachable magazine! That’s got to be an Evil Feature. And yes, we really did call the Evil Features. I’ll talk about magazines below, but once again, it is pretty hard to ban something that common unless you want to go on a confiscatory national suicide mission.

For example, flash hiders sound dangerous. Let’s say having a flash hider makes a gun an assault weapon. So flash hiders became an evil feature. Problem is flash hiders don’t do much. They screw onto the end of your muzzle and divert the flash off to the side instead of straight up so it isn’t as annoying when you shoot. It doesn’t actually hide the flash from anybody else. EVIL.

Barrel shrouds were listed. Barrel shrouds are basically useless, cosmetic pieces of metal that go over the barrel so you don’t accidentally touch it and burn your hand. But they became an instantaneous felony too. Collapsible stocks make it so you can adjust your rifle to different size shooters, that way a tall guy and his short wife can shoot the same gun. Nope. EVIL FEATURE!

It has been a running joke in the gun community ever since the ban passed. When Carolyn McCarthy was asked by a reporter what a barrel shroud was, she replied “I think it is the shoulder thing which goes up.”  Oh good. I’m glad that thousands of law abiding Americans unwittingly committed felonies because they had a cosmetic piece of sheet metal on their barrel, which has no bearing whatsoever on crime, but could possibly be a shoulder thing which goes up.

Now are you starting to see why “assault weapons” is a pointless term? They aren’t functionally any more powerful or deadly than any normal gun. In fact the cartridges they normally fire are far less powerful than your average deer hunting rifle. Don’t worry though, because the same people who fling around the term assault weapons also think of scoped deer rifles as “high powered sniper guns”.

Basically, what you are thinking of as assault weapons aren’t special.

Now, the reason that semi-automatic, magazine fed, intermediate caliber rifles are the single most popular type of gun in America is because they are excellent for many uses, but I’m not talking about fun, or hunting, or sports, today I’m talking business. And in this case they are excellent for shooting bad people who are trying to hurt you, in order to make them stop trying to hurt you. These types of guns are superb for defending your home. Now some of you may think that’s extreme. That’s because everything you’ve learned about gun fights comes from TV. Just read the link where I expound on why.

http://larrycorreia.wordpress.com/2007/09/20/carbine-vs-shotgun-vs-pistol-for-home-defense/

I had one individual tell me that these types of guns are designed to slaughter the maximum number of people possible as quickly as possible… Uh huh… Which is why every single police department in America uses them, because of all that slaughtering cops do daily. Cops use them for the same reason we do, they are handy, versatile, and can stop an attacker quickly in a variety of circumstances.

When I said “stop an attacker quickly” somebody on Twitter thought that he’d gotten me and said “Stop. That’s just a euphemism for kill!” Nope. I am perfectly happy if the attacker surrenders or passes out from blood loss too. Tactically and legally, all I care about is making them stop doing whatever it is that they are doing which caused me to shoot them to begin with.

The guns that many of you think of as assault rifle are common and popular because they are excellent for fighting, and I’ll talk about what my side really thinks about the 2^nd Amendment below.

We should ban magazines over X number of shots!

I’ve seen this one pop up a lot. It sounds good to the ear and really satisfies that we’ve got to do something need. It sounds simple. Bad guys shoot a lot of people in a mass shooting. So if he has magazines that hold fewer rounds, ergo then he’ll not be able to shoot as many people.

Wrong. And I’ll break it down, first why my side wants more rounds in our gun, second why tactically it doesn’t really stop the problem, and third, why stopping them is a logistical impossibility.

First off, why do gun owners want magazines that hold more rounds? Because sometimes you miss. Because usually—contrary to the movies—you have to hit an opponent multiple times in order to make them stop. Because sometimes you may have multiple assailants. We don’t have more rounds in the magazine so we can shoot more, we have more rounds in the magazine so we are forced to manipulate our gun less if we have to shoot more.

The last assault weapons ban capped capacities at ten rounds. You quickly realize ten rounds sucks when you take a wound ballistics class like I have and go over case after case after case after case of enraged, drug addled, prison hardened, perpetrators who soaked up five, seven, nine, even fifteen bullets and still walked under their own power to the ambulance. That isn’t uncommon at all. Legally, you can shoot them until they cease to be a threat, and keep in mind that what normally causes a person to stop is loss of blood pressure, so I used to tell my students that anybody worth shooting once was worth shooting five or seven times. You shoot them until they leave you alone.

Also, you’re going to miss. It is going to happen. If you can shoot pretty little groups at the range, those groups are going to expand dramatically under the stress and adrenalin. The more you train, the better you will do, but you can still may miss, or the bad guy may end up hiding behind something which your bullets don’t penetrate. Nobody has ever survived a gunfight and then said afterwards, “Darn, I wish I hadn’t brought all that extra ammo.”

So having more rounds in the gun is a good thing for self-defense use.

Now tactically, let’s say a mass shooter is on a rampage in a school. Unless his brain has turned to mush and he’s a complete idiot, he’s not going to walk up right next to you while he reloads anyway. Unlike the CCW holder who gets attacked and has to defend himself in whatever crappy situation he finds himself in, the mass shooter is the aggressor. He’s picked the engagement range. They are cowards who are murdering running and hiding children, but don’t for a second make the mistake of thinking they are dumb. Many of these scumbags are actually very intelligent. They’re just broken and evil.

In the cases that I’m aware of where the shooter had guns that held fewer rounds they just positioned themselves back a bit while firing or they brought more guns, and simply switched guns and kept on shooting, and then reloaded before they moved to the next planned firing position. Unless you are a fumble fingered idiot, anybody who practices in front of a mirror a few dozen times can get to where they can insert a new magazine into a gun in a few seconds.

A good friend of mine (who happens to be a very reasonable democrat) was very hung up on this, sure that he would be able to take advantage of the time in which it took for the bad guy to reload his gun. That’s a bad assumption, and here’s yet another article that addresses that sort of misconception that I wrote several years ago which has sort of made the rounds on firearm’s forums. http://www.northeastshooters.com/vbulletin/threads/45671-My-Gunfight-quot-Thinking-Outside-Your-Box-quot  So that’s awesome if it happens, but good luck with that.

Finally, let’s look at the logistical ramifications of another magazine ban. The AWB banned the production of all magazines over ten rounds except those marked for military or law enforcement use, and it was a felony to possess those.

Over the ten years of the ban, we never ran out. Not even close. Magazines are cheap and basic. Most of them are pieces of sheet metal with some wire. That’s it. Magazines are considered disposable so most gun people accumulate a ton of them. All it did was make magazines more expensive, ticked off law abiding citizens, and didn’t so much as inconvenience a single criminal.

Meanwhile, bad guys didn’t run out either. And if they did, like I said, they are cheap and basic, so you just get or make more. If you can cook meth, you can make a functioning magazine. My old company designed a rifle magazine once, and I’m no engineer. I paid a CAD guy, spent $20,000 and churned out several thousand 20 round Saiga .308 mags. This could’ve been done out of my garage.

Ten years. No difference. Meanwhile, we had bad guys turning up all the time committing crimes, and guess what was marked on the mags found in their guns? MILITARY AND LAW ENFORCEMENT USE ONLY. Because once again, if you’re already breaking a bunch of laws, they can only hang you once. Criminals simply don’t care.

Once the AWB timed out, because every politician involved looked at the mess which had been passed in the heat of the moment, the fact it did nothing, and the fact that every single one of them from a red state would lose their job if they voted for a new one, it expired and went away. Immediately every single gun person in America went out and bought a couple guns which had been banned and a bucket of new magazines, because nothing makes an American want to do something more than telling them they can’t. We’ve been stocking up ever since. If the last ban did literally nothing at all over a decade, and since then we’ve purchased another hundred million magazines since then, another ban will do even less. (except just make the law abiding that much angrier, and I’ll get to that below).

I bought $600 worth of magazines for my competition pistol this morning. I’ve already got a shelf full for my rifles. Gun and magazine sales skyrocket every time a democrat politician starts to vulture in on a tragedy. I don’t know if many of you realize this, but Barack Obama is personally responsible for more gun sales, and especially first time gun purchases, than anyone in history. When I owned my gun store, we had a picture of him on the wall and a caption beneath it which said SALESMAN OF THE YEAR.

So you can ban this stuff, but it won’t actually do anything to the crimes you want to stop. Unless you think you can confiscate them all, but I’ll talk about confiscation later.

One last thing to share about the magazine ban from the AWB, and this is something all gun people know, but most anti-gunners do not. When you put an artificial cap on a weapon, and tell us that we can only have a limited number of rounds in that weapon, we’re going to make sure they are the most potent rounds possible. Before the ban, everybody bought 9mms which held an average of 15 rounds. After the ban, if I can only have ten rounds, they’re going to be bigger, so we all started buying 10 shot .45s instead.

You don’t need an assault weapon for hunting!

Who said anything about hunting? That whole thing about the 2^nd Amendment being for sportsmen is hogwash. The 2^nd Amendment is about bearing arms to protect yourself from threats, up to and including a tyrannical government.

Spare me the whole, “You won’t be happy until everybody has nuclear weapons” reductio ad absurdum. It says arms, as in things that were man portable. And as for the founding fathers not being able to see foresee our modern arms, you forget that many of them were inventors, and multi shot weapons were already in service. Not to mention that in that day, arms included cannon, since most of the original artillery of the Continental Army was privately owned. Besides, the Supreme Court agrees with me. See DC v. Heller.

Well we should just ban ALL guns then! You only need them to murder people!

It doesn’t really make sense to ban guns, because in reality what that means is that you are actually banning effective self-defense. Despite the constant hammering by a news media with an agenda, guns are used in America far more to stop crime than to cause crime.

I’ve seen several different sets of numbers about how many times guns are used in self-defense every year. The problem with keeping track of this stat is that the vast majority of the time when a gun is produced in a legal self-defense situation no shots are fired. The mere presence of the gun is enough to cause the criminal to stop.

Clint Smith once said if you look like food, you will be eaten. Criminals are looking for prey. They are looking for easy victims. If they wanted to work hard for a living they’d get a job. So when you pull a gun, you are no longer prey, you are work, so they are going to go find somebody else to pick on.

So many defensive gun uses never get tracked as such. From personal experience, I have pulled a gun exactly one time in my entire life. I was legally justified and the bad guy stopped, put his gun away, and left. (15 years later the same son of a bitch would end up murdering a local sheriff’s deputy). My defensive gun use was never recorded anywhere as far as I know. My wife has pulled a gun twice in her life. Once on somebody who was acting very rapey who suddenly found a better place to be when she stuck a Ruger in his face, and again many years later on a German Shepherd which was attacking my one year old son. (amazingly enough a dog can recognize a 9mm coming out of a fanny pack and run for its life, go figure) No police report at all on the second one, and I don’t believe the first one ever turned up as any sort of defensive use statistic, all because no shots were fired.

So how often are guns actually used in self-defense in America? http://www.guncite.com/gun_control_gcdguse.html

On the high side the estimate runs around 2.5 million defensive gun uses a year, which dwarfs our approximately 16,000 homicides in any recent year, only 10k of which are with guns.  http://www.cdc.gov/nchs/fastats/homicide.htm Of those with guns, only a couple hundred are with rifles. So basically, the guns that the anti-gunners are the most spun up about only account for a tiny fraction of all our murders.

But let’s not go with the high estimate. Let’s go with some smaller ones instead. Let’s use the far more conservative 800,000 number which is arrived at in multiple studies. That still dwarfs the number of illegal shootings. Heck, let’s even run with the number once put out by the people who want to ban guns, the Brady Center, which was still around 108,000, which still is an awesome ratio of good vs. bad.

So even if you use the worst number provided by people who are just as biased as me but in the opposite direction, gun use is a huge net positive. Or to put it another way, the Brady Center hates guns so much that they are totally cool with the population of a decent sized city getting raped and murdered every year as collateral damage in order to get what they want.

Doesn’t matter. I don’t like them. We should ban them and take them all away like a civilized country.

Well, I suppose if your need to do something overrides all reason and logic, then by all means let’s ban guns.

Australia had a mass shooting and instituted a massive gun ban and confiscation (a program which would not work here, which I’ll get to, but let’s run with it anyway.). As was pointed out to me on Facebook, they haven’t had any mass shootings since. However, they fail to realize that they didn’t really have any mass shootings before either. You need to keep in mind that mass shooting are horrific headline grabbing statistical anomalies. You are far more likely to get your head caved in by a local thug while he’s trying to steal your wallet, and that probably won’t even make the evening news.

And violent crime is up in Australia. A cursory Google search will show articles about the increase in violent crime and theft, but then other articles pooh-pooing these stats as being insignificant and totally not related to the guns.

So then we’ve got England, where they reacted swiftly after a mass shooting, banned and confiscated guns, and their violent crime has since skyrocketed. Their stats are far worse than Australia, and they are now one of the more dangerous countries to live in the EU. Once again, cursory Google search will show articles with the stats, and other articles saying that those rises like totally have nothing to do with regular folks no longer being able to defend themselves… Sensing a trend yet?

And then we’ve got South Africa, which instituted some really hard core gun bans and some extremely strict controls, and their crime is now so high that it is basically either no longer tracked or simply not countable. But obviously, the totally unbiased news says that has absolutely nothing to do with people no longer being able to legally defend themselves.

Then you’ve got countries like Norway, with extremely strict gun control. Their gun control laws are simply incomprehensible to half of Americans. Not only that, they are an ethnically and socially homogenous, tiny population, well off country, without our gang violence or drug problems. Their gun control laws are draconian by our standards. They make Chicago look like Boise. Surely that level of gun control will stop school shootings! Except of course for 2011 when a maniac killed 77 and injured 242 people, a body count which is absurdly high compared to anything which has happened America.

Because once again, repeat it with me, criminals simply do not give a crap.

That mass killer used a gun and homemade explosives. Make guns harder to get, and explosives become the weapon of choice. Please do keep in mind that the largest and most advanced military coalition in human history was basically stymied for a decade by a small group using high school level chemistry and the Afghani equivalent to Radio Shack.

The biggest mass killings in US history have used bombs (like Bath, Michigan), fire (like Happyland Nightclub) or airliners. There is no law you can pass, nothing you can say or do, which will make some not be evil.

And all of this is irrelevant, because banning and confiscating all the scary guns in America will be national suicide.

You crazy gun nuts and your 2^nd Amendment. We should just confiscate all the guns.

Many of you may truly believe that. You may think that the 2^nd Amendment is archaic, outdated, and totally pointless. However, approximately half of the country disagrees with you, and of them, a pretty large portion is fully willing to shoot somebody in defense of it.

We’ve already seen that your partial bans are stupid and don’t do anything, so unless you are merely a hypocrite more interested in style rather than results, the only way to achieve your goal is to come and take the guns away. So let’s talk about confiscation.

They say that there are 80 million gun owners in America. I personally think that number is low for a few reasons. The majority of gun owners I know, when contacted for a phone survey and asked if they own guns, will become suspicious and simply lie. Those of us who don’t want to end like England or Australia will say that we lost all of our guns in a freak canoe accident.

Guns do not really wear out. I have perfectly functioning guns from WWI, and I’ve got friends who have still useable firearms from the 1800s. Plus we’ve been building more of them this entire time. There are more guns than there are people in America, and some of us have enough to arm our entire neighborhood.

But for the sake of math, let’s say that there are only 80 million gun owners, and let’s say that the government decides to round up all those pesky guns once and for all. Let’s be generous and say that 90% of the gun owners don’t really believe in the 2^nd Amendment, and their guns are just for duck hunting. Which is what politicians keep telling us, but is actually rather hilarious when you think about how the most commonly sold guns in America are the same detachable magazine semiautomatic rifles I talked about earlier.

So ten percent refuse to turn their guns in. That is 8 million instantaneous felons. Let’s say that 90% of them are not wanting to comply out of sheer stubbornness. Let’s be super generous and say that 90% of them would still just roll over and turn their guns when pressed or legally threatened.   That leaves 800,000 Americans who are not turning their guns in, no matter what. To put that in perspective there are only about 700,000 police officers in the whole country.

Let’s say that these hypothetical 10% of 10% are willing to actually fight to keep their guns. Even if my hypothetical estimate of 800,000 gun nuts willing to fight for their guns is correct, it is still 97% higher than the number of insurgents we faced at any one time in Iraq, a country about the size of Texas.

However, I do honestly believe that it would be much bigger than 10%. Once the confiscations turned violent, then it would push many otherwise peaceful people over the edge. I saw somebody on Twitter post about how the 2^nd Amendment is stupid because my stupid assault rifles are useless against drones… That person has obviously never worked with the people who build the drones, fly the drones, and service the drones. I have. Where to you think the majority of the US military falls on the political spectrum exactly? There’s a reason Mitt Romney won the military vote by over 40 points, and it wasn’t because of his hair.

And as for those 700,000 cops, how many of them would side with the gun owners? All the gun nuts, that’s for sure. As much as some people like to complain about the gun culture, many of the people you hire to protect you, and darn near all of them who can shoot well, belong to that gun culture. And as I hear people complain about the gun industry, like it is some nebulous, faceless, all powerful corporate thing which hungers for war and anarchy, I just have to laugh, because the gun industry probably has the highest percentage of former cops and former military of any industry in the country. My being a civilian was odd in the circles I worked in.  The men and women you pay to protect you have honor and integrity, and they will fight for what they believe in.

So the real question the anti-gun, ban and confiscate, crowd should be asking themselves is this, how many of your fellow Americans are you willing to have killed in order to bring about your utopian vision of the future?

Boo Evil Gun Culture!

Really? Because I hate to break it to you, but when nearly six hundred people get murdered a year in beautiful Gun Free Chicago, that’s not my people doing the shooting.

The gun culture is all around you, well obviously except for those of you reading this in elite liberal urban city centers where you’ve extinguished your gun culture. They are your friends, relatives, and coworkers. The biggest reason gun control has become increasingly difficult to pass over the last decade is because more and more people have turned to CCW, and as that has become more common, it has removed much of the stigma. Now everybody outside of elite urban liberal city centers knows somebody that carries a gun. The gun culture is simply regular America, and is made up of people who think their lives and their families lives are more important than the life of anyone who tries to victimize them.

The gun culture is who protects our country. Sure, there are plenty of soldiers and cops who are issued a gun and who use it as part of their job who could care less. However, the people who build the guns, really understand the guns, actually enjoy using the guns, and usually end up being picked to teach everybody else how to use the guns are the gun culture.

The media and the left would absolutely love to end the gun culture in America, because then they could finally pass all the laws they wanted.

Let’s take a look at what happens when a country finally succeeds in utterly stamping out its gun culture. Mumbai, 2008. Ten armed jihadi terrorists simply walked into town and started shooting people. It was a rather direct, straight forward, ham fisted, simple terrorist attack. They killed over 150 and wounded over 300. India has incredibly strict gun laws, but once again, criminals didn’t care.

That’s not my point this time however, I want to look at the response. These ten men shut down an entire massive city and struck fear into the hearts of millions for THREE DAYS. Depending on where this happened in America it would have been over in three minutes or three hours. The Indian police responded, but their tactics sucked. The marksmanship sucked. Their leadership sucked. Their response utterly and completely fell apart.

In talking afterwards with some individuals from a small agency of our government who were involved in the clean-up and investigation, all of whom are well trained, well practiced, gun nuts, they told me the problem was that the Indian police had no clue what to do because they’d never been taught what to do. Their leadership hated and feared the gun so much that they stamped out the ability for any of their men to actually master the tool. When you kill your gun culture, you kill off your instructors, and those who can pass down the information necessary to do the job.

Don’t think that we are so far off here. I recently got to sit down with some fans who are members of one of the larger metro police departments in America. These guys were all SWAT cops or narcotics, all of them were gun nuts who practiced on their own dime, and all of them were intimately familiar with real violence. These are the guys that you want responding when the real bad stuff goes down.

What they told me made me sick. Their leadership was all uniformly liberal and extremely anti-gun, just like most big cities in America. They walked me through what their responses were supposed to be in case of a Mumbai style event, and how their “scary assault weapons” were kept locked up where they would be unavailable, and how dismal their training was, and how since the state had run off or shut down most of the gun ranges, most of the cops couldn’t even practice or qualify anymore.

So now they were less safe, the people they were protecting were less safe, the bad guys were safer, but most importantly their leadership could pat themselves on the back, because they’d done something.

Well, okay. You make some good points. But I’d be more comfortable if you gun people were force to have more mandatory training!

And I did actually have this one said to me, which is an amazing victory by internet arguing standards.

Mandatory training is a placebo at best. Here is my take on why.

http://larrycorreia.wordpress.com/2008/05/20/mandatory-training-for-ccw/

In conclusion, basically it doesn’t really matter what something you pick when some politician or pundit starts screaming we’ve got to do something, because in reality, most of them already know a lot of what I listed above. The ones who are walking around with their security details of well-armed men in their well-guarded government buildings really don’t care about actually stopping mass shooters or bad guys, they care about giving themselves more power and increasing their control.

If a bad guy used a gun with a big magazine, ban magazines. If instead he used more guns, ban owning multiple guns. If he used a more powerful gun with less shots, ban powerful guns. If he used hollowpoints, ban hollowpoints. (which I didn’t get into, but once again, there’s a reason everybody who might have to shoot somebody uses them). If he ignored some Gun Free Zone, make more places Gun Free Zones. If he killed a bunch of innocents, make sure you disarm the innocents even harder for next time. Just in case, let’s ban other guns that weren’t even involved in any crimes, just because they’re too big, too small, too ugly, too cute, too long, too short, too fat, too thin, (and if you think I’m joking I can point out a law or proposed law for each of those) but most of all ban anything which makes some politician irrationally afraid, which luckily, is pretty much everything.

They will never be happy. In countries where they have already banned guns, now they are banning knives and putting cameras on every street. They talk about compromise, but it is never a compromise. It is never, wow, you offer a quick, easy, inexpensive, viable solution to ending mass shootings in schools, let’s try that. It is always, what can we take from you this time, or what will enable us to grow some federal apparatus?

Then regular criminals will go on still not caring, the next mass shooter will watch the last mass shooter be the most famous person in the world on TV, the media will keep on vilifying the people who actually do the most to defend the innocent, the ignorant will call people like me names and tell us we must like dead babies, and nothing actually changes to protect our kids.

If you are serious about actually stopping school shootings, contact your state representative and tell them to look into allowing someone at your kid’s school to be armed. It is time to install some speed bumps.

I am so frustrated by all of the talking up of the housing market.  More people are going to be hurt financially by this intentional deceit by the infamous "They" we have talked about in previous posts.  We got here because we have been lied to throughout this whole housing collape.  There is a lot more pain to come in housing.  Just because you have held out this long does not mean you are going to make it through what it still awaits us no matter what "They" say. 

The piece below is a full reprint of a post by Martin Andelman of Mandelman Matters.  Martin and I have had many discussions about this topic and he puts it very well so I wanted you to see this. 

Talking Up the Housing Market? Yada, Yada, Yada… Talk is Cheap

By Martin Andelman

Now I get it… our plan is to try to TALK the housing market up.

Apparently, and I just realized this today, some people think they have figured out that if we just keep talking about how the housing market is recovering… it will respond by recovering.  It’s positively brilliant.  Someone should really let the EU countries know about this strategy because they could really use it, since absolutely nothing else is working in the least.

Hey, you guys in Spain… instead of all that rioting, try saying this over and over again in the newspapers and on television: “El mercado de la vivienda se está recuperando… El mercado de la vivienda se está recuperando!”  That should pretty much handle it.  See, problem solved… glad I could help.

And you guys in Greece, try saying whatever this sounds like: “Η αγορά κατοικίας είναι ανάκτηση.”  And your welcome, by the way.

Okay, look… talk is cheap.  And the strategy of talking about how the housing market is recovering in order to actually make anything recover, although hysterical, is just plain stupid.

On the other hand, since it’s obvious that essentially no one, present company excluded, has the foggiest idea of what to do differently, or is willing to even try doing anything differently, then I suppose talk is all we’ve got.  So, go ahead chatty Cathys… blather on.  Besides, I’ve gotten much better at ignoring you.

The Scale of the Crisis at the End of 2012

As of the end of this year, we will have lost FIVE MILLION homes to foreclosure… and 10 MILLION MORE American households have faced the prospect of foreclosure since the crisis began during the third quarter of 2006.  Add to those the numbers the 5.3 MILLION NOW in the foreclosure pipeline, meaning they have already received a foreclosure notice or are over 30 days delinquent… and 3.3 MILLION of them are over 90 days delinquent or already in pre-sale inventory.

Then stop to consider that there are only 50 million homes carrying a mortgage in this country… and then do the math.  You shouldn’t need a calculator to know that the answer to any equation comes out CRISIS of historical proportion no matter what the talkers are talking about today.

In addition, it’s interesting that no one wants to talk about the COMPLETED BANK REPOSSESSIONS continuing at the rate of about 50,000 A MONTH, with foreclosure starts at 100,000 A MONTH.

But, the housing market is recovering, the housing market is recovering… well yada, yada, yada and a blah, blah, blah.

First Time Buyer Demand Falling

One of the only legitimate sources of demand for homes in this country would be that provided by first time buyers.  Think about it… they can’t be underwater because they don’t already own a home.  So, with at least a third of the country’s homeowners underwater and unable to move, our first time buyers are about the only growing demographic we’ve got, since we’re certainly not growing investors in any sort of hurry.

The latest edition of Fannie Mae’s Housing Insights, however, in which Fannie economists examined the data shows that the decline in the homeownership rate over the last four years has been particularly pronounced for young households.

According to Mortgage News Daily on November 15, 2012, “five years after the start of the housing bust American households continue to shift from homeownership to being renters.”  And why this would be any sort of surprise to anyone is beyond me.

The particularly bad news is that homeownership among the younger demographic groups dropped the most in each of the last five years.  In fact, overall homeownership among those between age 25-44 has declined at double the rate of the overall decline.

The only age group that did not seen a decline in homeownership in 2010 and 2011 is the age 75+ group.

But don’t worry, I’m certainly confident that this country’s OCTOGENARIANS (people in their 80s, just to make sure everyone’s with me) are going to save our housing market… so attention all talkers, better get ready to start talking about that.

Why are young people not buying homes like they used to?  Well, gee… let’s see if we can’t figure that out without having to look anything up, shall we?

Well, there’s the issue of student loan debt, which has become such a scam that I may have to devote an entire blog to it in the near future.  And then there’s the need for 20 percent down payments and 760 credit scores… unless we’re talking FHA loans, in which case we’re talking about 20 percent defaults and increasing insurance premiums and tightening underwriting requirements.

Oh, something else… there’s the relatively higher unemployment numbers among the younger demographics, twice as high as the average in many areas.  And then there’s the fact that young people AREN’T STUPID, so one might imagine that since AT LEAST 20 MILLION of them have watched their elders either lose homes or be at risk of losing homes, it might just be that many are in no hurry to repeat the apparent mistakes of the past.

Ya’ think?  Or do the MORONS reading this think we need to conduct a study to figure that out too?

Being Underwater

Consider the chart from Zillow below to get an idea of how the underwater problem can do nothing but significantly reduce future demand.  Zoom in on it to read it closely, but if you don’t have your glasses, the blue bars are underwater homes by city, and the red bars are delinquent underwater homes by city.

And that’s what Zillow thinks.  Just imagine what the truth of the situation is, because you know it’s not better than Zillow’s.  Just by factoring in the percentage underwater when including real estate sales commissions would take all of those numbers up by 6 percent, right?  Yes, right.

Foreclosures to Come

Another factor that makes talkers mute and much of their data moot is how state laws have created markets where foreclosures are delayed and hanging like the Sword of Damocles over their respective markets.

In case you’re a little rusty on your legends from classical Greek culture, Roman philosopher Cicero uses this story to reach the conclusion that virtue is all you need to live a happy life, when he asks the question, “Does not Dionysius seem to have made it sufficiently clear that there can be nothing happy for the person over whom some fear always looms?”

Look at the chart below to see how Nevada’s new law, AB 284, which took effect in October of 2011, has impacted servicers filing Notices of Default.  It’s not a chart showing problems being solved, it’s just a study in kicking the proverbial can down the road.

As Phillip Gusterson, writing for Seeking Alpha on November 27th, said in his article titled, “Dark Forces Manipulate the Housing Market, “AB284 has dramatically reduced foreclosures in Las Vegas. The result is a lesson in basic economics, with a drop in supply leading to an increase in prices. But what is clear to everyone is that the supply is artificially constrained, and a second lesson in economics could be around the corner: an increase in supply will lead to lower prices.”

He goes on to point out what should be obvious, “AB284 did not remove the need to foreclose on these properties, it just removed the ability to do it, so now one year later we have at least 24,000 units that should have been filed on, but were not because lawmakers in a run up to a general election decided to manipulate the market.”

I don’t agree with everything Mr. Gusterson has to say, but on that point there’s absolutely no chance that he’s even a little bit wrong.  When supply goes down, prices always go up… and the reverse is also true… welcome to Econ 101.

And if that fundamental truth wasn’t enough to cause those thinking that Las Vegas is already at the bottom of the market to pause, Gusterson also points out that, “Las Vegas also has a disproportionate share of ARM mortgages. When interest rates inevitably rise that this will cause a further wave of defaults just as the market shows signs of genuine recovery stimulated by economic growth.”

Notices of Default are increasing steadily over the last few months, however,  which just shows that the banks will ultimately figure out how to foreclose within the current legislative requirements.  As Gusterson’s article opines, “… it does seem logical that the significant market force of 75,000 delinquents will eventually overcome the barriers that politicians throw up to stem the tide.”

He figures that banks will use some combination of “improved administration, short sales, bulk note sales, bulk REO sales, and judicial foreclosures to operate within the post-AB284 environment to work through the foreclosures, and that the post-MERS environment will encourage them to increase the rate of foreclosure.”  

Once again, he is most assuredly correct, but he may be missing one additional factor, which is that the legislature, all too aware of AB 284’s draconian and utterly paralyzing effect on the market, may very well act to weaken the law in order to make it somewhat easier to foreclose in the future.

Lastly, consider that in 2102, according to the Greater Las Vegas Association of Realtors, almost 55 percent of all homes sold in Southern Nevada were bought as ALL CASH deals.  And you don’t have to be any sort of economic expert to realize that we just don’t have anywhere near enough people able to pay cash for homes to create any sort of actual recovery.  (I’m not going to bother sourcing that statement, if you don’t instinctively know it to be the case, you’re an idiot and reading the wrong blog, so scat. I have no time for you.)

What Is Going Up?

The only segment of any housing market going up is at the bottom of the market, where investors are prone to bid against each other, afraid that they’ll lose out.  It’s the same sort of greedy mentality that takes hold at auctions, where I’ve seen people pay more for things than they would have to if buy them at their retail price.

The simple fact is that the markets aren’t acting rationally, and I’m sure part of it is that some of the talking causes irrational things to happen.  For example, Dr. Housing Bubble, who follows Southern California’s housing market better than anyone, points out that while “home sales are up by 8 percent year-over-year, during the same period, the median home price fell by 3.7 percent.”

That’s just great… as demand goes up, price falls?  Try answering questions on an economics exam that way and you’ll fail the test sure as shootin’.  Again, according to Dr. Housing Bubble…

“If you want to see delusion in action take a look at Zillow’s “make me move” option and you will see it in full force.  Even with mortgage rates at record low prices and very generous products like FHA loans that only require 3.5 percent down, the market seems to be moving lower in mid-tier to upper-tier areas.”

Well, obviously that part of the market needs a stern talking to, wouldn’t you say?  Get to work talkers… I expect to see some yabbering and in a hurry.

Talk is Cheap

The fact that there are properties at the very bottom that appear to have increased in price by a few points is no indication that housing is recovering.

Remember, the underwater problem is just as it was, so demand can’t increase because half the market can’t move.  And remember that, for the most part, no one is selling their home unless they have to, so the supply is reduced because no one wants to compete with foreclosures and short sales when selling their home into what is already the worst housing market in 70 years.

If people were selling, without demand increasing, then prices would fall even further as the impact of increased supply and competition could produce no other outcome. And there’s just nowhere that demand can come from as long as we’re pretending that our economy and housing market are recovering, and therefore doing NOTHING about ANYTHING.

Our situation related to unemployment in this country is nothing short of horrific… we’ve got at least 5.5 MILLION people out of work for over six months.  In California, the published rate is over 11 percent, and that’s not even a fully loaded number.  And we haven’t created anything but part-time and minimum wage jobs over the last four years, so even if working, EVERYONE is making less.

What’s amazing to me is that we’re not even pressuring our elected officials to do anything.  Other than a few Occupy people camping on lawns until they get arrested, the only thing we’re doing is kvetching on Facebook and pacing through sleepless nights.

Here’s an excerpt from a Rolling Stone article from last June, written by Jeff Tietz…

To aid Santa Barbara’s large homeless population, local activists launched the Safe Parking program and since the Great Recession began, the number of lots and participants in the program has doubled. By 2009, formerly middle-class people like Janis Adkins had begun turning up – teachers and computer repairmen and yoga instructors seeking refuge in the city’s parking­ lots. 

Safe-parking programs in other cities have experienced a similar influx of middle-class exiles, and their numbers are not expected to decrease anytime soon. 

It can take years for unemployed workers from the middle class to burn through their resources – savings, credit, salable belongings, home equity, loans from family and friends. 

Some 5.4 million Americans have been without work for at least six months, and an estimated 750,000 of them are completely broke or heading inexorably toward destitution. In California, where unemployment remains at 11 percent, middle-class refugees like Janis Adkins are only the earliest arrivals. “She’s the tip of the iceberg,” says Nancy Kapp, the coordinator of the Safe Parking program. 

“There are many people out there who haven’t hit bottom yet, but they’re on their way – they’re on their way.”

Afraid?  Terrified?  Yeah, well me too. 

It’s happening all around us, most of us see the signs of the cracks widening every day.  But too many of us are still in denial, they don’t want to talk about it, they’d rather just listen to the happy talk crowd who are constantly trying to talk our economy back to health.

My wife noticed that I didn’t bother to vote this year and asked me why.  I replied that for all our president is doing, I would have been okay with leaving the position open for the next four years… you know, just not fill it until someone worth voting for comes along.  But it now occurs to me that President Obama fits in  perfectly with what’s going on.  If talking the economy up will somehow work, then I’ve changed my mind and he’s the perfect guy for that job.  (Hahaha… get it?)

Here’s the real deal, however… while you might be able to get ME up by talking to me, housing isn’t going anywhere but sideways and down no matter what anyone says.  Bet on it.

Mandelman out. 

You can talk to the exert about your particular underwater mortgage situation by calling 425-259-2600.  We offer a free 15 minute consultation where you can get your immediate questions answered.  No cost and no obligation.

While many states allow homeowners to get out of their houses without the threat of the bank coming after them for the money the bank lost, the IRS can still haunt you for lots of money in taxes.  Whatever money the bank loses on your underwater house is looked upon by the IRS as a gift from the bank and requires you to pay income tax on it. 

Currently there is a law in place that exempts most homeowners from this tax.  However, this law exprires on December 31, 2012.  The Mortgage Foregiveness Debt Relief Act began with the Bush administration and extended in the Obama administration via the Dodd-Frank bill.  This makes it bi-partisan but needs to be extended.  We have brought this to your attention in previous posts and to support the extension of this important bill. We are gettting some additional help.

Below is an article published by Housing Wire.  Written by Megan Hopkins. 

Four attorneys general are leading the fight to extend tax relief to homeowners who faced financial hardship such as a foreclosure and were granted mortgage debt forgiveness.

Attorneys General Catherine Cortez Masto of Nevada, Lisa Madigan of Illinois, Pam Bondi of Florida, George Jepsen of Connecticut and Martha Coakley of Massachusetts lead the national effort of 41 state attorneys general calling on Congress to extend the exclusion, in place since 2007. Various government agencies and industry trade groups began fighting for an extension as early as April.

If Congress does not answer, the tax relief efforts put in place by the Mortgage Debt Relief Act will expire on Dec. 31. This federal act essentially dismisses a distressed homeowner’s mortgage debt in the case of a foreclosure, short sale or loan modification.

With the recent push toward more principal reductions via the national settlement between state AGs and the nation's biggest mortgage servicers, hundreds of thousands could be impacted. The $20 bilion-plus settlement outlines consumer-relief mandates and servicing requirements for the nation's largest mortgage servicers.

“Failure to extend this tax relief would hurt the very families we set out to help in the national foreclosure settlement,” Illinois' Madigan said. “We need to do everything we can to encourage — not deter — struggling homeowners to seek help to stay in their homes.”

The AGs wrote a letter to the leaders of the U.S. House and Senate requesting an extension. The letter noted that if the $25 billion national settlement does expire, homeowners would face up to $1.3 billion in tax increases over two years, according to the Congressional Budget Office.

"Unless Congress acts, any debt relief to be provided in 2013 under the national mortgage settlement, as well as other mortgage debt relief programs, will likely be considered taxable income," said Masto.

Added Coakley, “This tax relief is critical for helping struggling homeowners stay in their homes as we work to repair the damage from the foreclosure crisis. We urge Congress to ensure families are not hit with an unexpected tax bill when seeking a loan modification.”

More than 4,000 homeowners had received mortgage debt relief for an average savings of $67,457 per homeowner in Coakley's state of Massachusetts since the settlement was signed earlier this year.

An extension is included in the Family and Business Tax Cut Certainty Act of 2012 (S. 3521), which recently passed out of the Senate Finance Committee with bipartisan support.

If you want to discuss the options available and how they will impact you specifically, we will do a free, no obligaton 15 minute phone consultation.  This call is designed to help you get some of your immediate questions answered.