Michael Gracie

In the world according to the US Treasury, people will be happy to stay in their upside down homes/mortgages as long as they can refinance. They are planning a scheme that will allow said refinancing regardless of the mortgage to home value deficiency, and in return for their cooperation the lenders will be receiving what’s called a negative equity certificate:

Negative-equity certificates could help servicers limit loan losses and avoid an “avalanche of borrowers who choose to walk away from the mortgage,” Scott Polakoff, the agency’s senior deputy director, said yesterday. The Federal Housing Administration could help homeowners refinance, he said.

The lender will supposedly be able to redeem this “certificate” when the home is sold, recovering their previous loss on refinancing.

Why someone would be willing refinance their home, starting at zero equity, and further agree to forego most if not all of the potential recovery, remains unanswered.

Nevertheless, a sucker is born every day. And unless housing price recovery is swift, you may want to get your hands on some “negative equity certificate” puts.

Meanwhile, give me your kingdom, and I’ll show you yet another ad

Ashkan Karbasfrooshan gave a few good reasons why most startups clinging to what seems like the one and only business model, advertising, will soon hit the skids. The guy used to be an ad salesman - fair enough.

Meanwhile, Dan Frommer toots Tumblr’s new business model, which just so happens to be…no wait…why don’t you guess…uh…advertising? I’m pretty certain you guessed right.

Are there really that many advertisers ready and willing to throw money at what seems like a never ending and limitlessly growing supply of ad inventory? And on sites whose content is also limitless (and free), and which, when combined with their userbase, reflects so little intent to purchase?

The Techdirt folks champion the concept of giving away goods of infinite supply in exchange for goods of a finite nature (latest example here). Seems to me internet advertising might just be reaching that unlimited availability point.

Easy fix, despite the official line from PHP which says you need to recompile PHP –with-mcrypt.

I’ll caveat this by stating I’m using Fedora Core 7…

1) At the terminal, su root - you are now going to yum, not ./configure, make, and make install…

2) yum install mcrypt - this will get you libmcrypt, mhash, and mcrypt

3) yum install php-mcrypt - this will get you the functionality within PHP

Uh…done (without hassles).

Richard Gaylord sounds like a real estate get rich quick infomercial.

The sad part is, few if any that listen to the NAR’s advice are getting rich. While Gaylord touts boldfaced lies scripted to lure ill-informed purchasers into borrowing beyond their means research from within his “organization” (which has been wrong without recourse for two years running), many people are getting kicked out of their formerly extraordinarily over-valued homes and/or filing for bankruptcy.

I’ll state once again for the record:

THE NAR DOES NOT CARE IF YOU BUILD WEALTH FROM OWNING REAL ESTATE. ALL THEY CARE ABOUT ARE TRANSACTIONS, NOT SMART, STABLE HOMEOWNERSHIP.

Sadly, I have a few friends who are real estate agents, and while they won’t go on record they know the NAR is not doing them any favors. The NAR’s asinine irrational exuberance appeals to existing homeowners, particularly those who are upside down on their mortgages. Those folks hold out hope based on the NAR’s propaganda research while the market stays frozen for lack of price flexibility.

Simply pathetic.

Mr. Frommer says:

There’s a big future in distributed storage and computing, and Amazon (AMZN) is on the leading edge. Nimble startups benefit any time they can focus more on building their companies than building their server infrastructure.

I’ll add that some of the aforementioned companies suffering don’t have discernible revenue models (i.e. they are “working towards scale!”). It would seem that having to rely on cheap third party storage services might put a monkey wrench in that plan, at least every now and then.

Meanwhile, Markus Frind, who runs the highly profitable PlentyOfFish dating site on a quarter rack of servers (i.e. “scaling the bank account”), notes that Facebook is making heavy capital investments and coming up heavily cash flow negative as a result.

Where’s the happy median? Or has someone already patented it ?