The Current Real Estate Economic Situation in Plain English - by Howard Blum

We have another coup this month - economist Howard Blum is our guest speaker at the SJREI meeting next week. Howard is located here in the Bay area and has some great insights on our local market . I had the pleasure of having dinner with him recently, and as an economist he is multi-faceted and very interesting. Howard is also an award winning public speaker, speaking to audiences, large and small, about the relationship of the Federal Reserve and the economy, the 'Whys' behind Fed monetary policy and the direction of the economy and interest rates. Come join us next week for another great program

SJREI New Publication

Summer is finally here and we have a ton of interesting things going on at the SJRE. Inventories are low, so we are currently focused on a couple of new projects - we are bringing an SJREI publication to market for our August meeting. It is a full color editorial type tabloid, and we will be printing 10,000 copies for distribution locally. We have hired a great editor/journalist to spear head this project, and are establishing some new channels of distribution for this free publication.

Our goal is to provide a content rich investor resource, and we already have a compelling line-up of contributors. I will be interviewing Bruce Norris, investor and market timing expert, and he is also contributing an editorial piece for us. Additionally, Doug Duncan, Chief Economist for Fannie Mae, is going to be featured also. These are just a few of the interesting perspectives that you will be privy to with this publication. If you have an interest in advertising with us please call my office directly at 408.264.3198.

Dr. Doug Duncan Update

I have had several communications in person and via email regarding our speaker on Thursday night - Dr. Doug Duncan, and the appropriateness of "hosting someone who contributed to the financial predicament " that we now find ourselves in as a country. I would like to share with you today the most articulate, and appropriate response on that questions from local economist Howard Blum, who happens to be our speaker next month. He certainly provides straight up food for thought.

"In the final analysis there is more than enough blame to go around for the Fannie and Freddie demise. Perhaps the only person that does not have dirty hands at Fannie Mae is Doug Duncan. FACT: Angelo Mozilo at Countrywide made the CEO of Fannie go to Calabasas, CA and told him that if they did not play ball they would be made irrelevant in the mortgage industry. Countrywide was going directly to Wall Street to securitize mortgage-backed securities (MBS) and Countrywide threatened to bypass them and put them out of business. That was not the only intense pressure brought to bear on Fannie & Freddie.

Members of Congress from urban centers were pressuring Fannie and Freddie to increase minority home ownership without regard for qualifications. Essentially Fannie and Freddie were squeezed by both the government and Wall Street.

Fannie Mae did not create sub-prime loans. Fannie Mae did not create a secondary market for sub-prime loans. Fannie Mae did not create the "blending" of sub-prime and prime mortgages into AAA rated MBS. Fannie Mae did not twist the arms of global banks to buy those wrongly AAA rated MBS.

To place the blame for the housing meltdown on Fannie Mae is to ignore the dozens of fingers in the pie that created the mess. As an economist I can say point blank that there are very few people in this country that truly understand all the contributing factors the the housing sector demise and Doug Duncan is one of them.

People can either come listen to what knowledge and expertise that Doug is willing to share with us or they can keep their head in the sand and point fingers in the wrong direction."

This gives some good insights as to why Dr. Doug Chief Economist for Fannie Mai has been listed in the "Top 100 Most Influential People In Real Estate ," according to Inman News.