At some point in time we need to stop these “patches” in a very weak dam (our economy) and focus on strengthening the damn. I will divert a some what and go political here. As a country the most constructive thing we could do economically is lower the corporate tax rate to 15%. Forget the personal income tax as far as I am concerned let it go to over 50%. This would do two things. The first is that we would suck capital from around the world to invest in our economy. We would have the largest most secure economy in the world with the best protections for workers, investors and intellectual property. Also by keeping the corporate rte low both small businesses and large corporations would have incentives to leave money in their companies since it is only taxed at 15% where as if a small business owner or corporate executive wants to take money out of the company they will pay a personal income tax rate at least double. This leaves a big incentive to leave money in the company that can be used to pay down debt, increase salaries, hire more workers and expand their present businesses.  The political criticism will be that people should receive the break not corporations. Corporations are not sentient beings. They are individuals organized under a charter and the laws of the nation. They have no personality, they have no feelings, they have no will and they have no malice. However the individuals who own and manage the corporations will have a much greater incentive to make the corporations improve and less incentive towards individual self-enrichment. Now the game being played is that the wealthy are using lower corporate tax rates in other countries to keep business activity and capital there but also looking to have it both ways with our low individual income tax rates and rule of law. Lowering corporate tax rates would be the one best and quickest fix for our economy.

 The other provision I would put in place would be to tax bonuses over 30% of an employee’s income for a company which benefits from an explicit government guarantee. Any bonus income which is received over and above the 20% salary base would be taxed at 75%. As an example if you earned a $100,000 any bonus in excess of $30,000. This would only be for companies that receive explicit federal government guarantees such as banks with their FDIC insurance deposits and the ability to borrow at artificially low rates because of Federal Government Monetary Policy. If you worked for Boeing, Microsoft, Google or your own business the bonus would be taxed at ordinary income and not subject to the “government guarantee” surcharge. This would force institutions such as banks that benefit from these guarantees to evaluate the long term worth of their management and adjust their salary accordingly with a modest performance bonus. Management now has an incentive to build a sustainable business model rather than pay a low salary and have a high bonus based on a quarterly profit that can be manipulated or is obtained at very high risk.

 As a country between government and personal debt we have over thirty trillion. This debt load is crushing. The only way to get rid of it is to have everybody working and our national businesses healthy and productive so that money is earned and value is created. That way the debt could be reduced without the looming specter of deflation or currency devaluation.

 Sorry for the digression.

 The spreadsheet is here:  Bellevue Foreclosure Report 1-15-11

The demand overall in the market is not great but most of the buyers are focusing on the distressed inventory and that segement of the market has dwindling inventory and well priced short sale homes are receiving multiple offers. The best opportunity now is “aged” short sales where the sellers need to get something to present to the lender in order to hold off foreclosure.  However avoid being too aggressive and setting the stage for another buyer:

The spreadsheet is here: Bellevue Foreclosure Report 10-2-10

Like a nuclear blast you can say the lucky ones were the ones who were incinerated in the initial blast. These would have been the sub prime borrowers who have been foreclosed in 2007 and 2008 and have written off their debt and are renting and building their resources. The unlucky ones are those who lived and are slowly dying from radiation poisoning and are struggling to hang on and hope they can last long enough until the effects of the blast are behind them.  

Part of the good news regarding the dissipating the effects of the blast are that in the spreadsheet you will see the Notice of Trustee Sales is falling. The reason are potentially two fold. The first is that the house goes to foreclosure and is now a bank owned home. The other is that it has been sold in a short sale. Keep and eye for an increase of the bank owned homes as this will be an indicator if the market is absorbing the NTS homes through either a short sale or foreclosure.

The spreadsheet is here: Bellevue Foreclosure Report 8-14-10