Hullabaloo
Thursday, June 17, 2010
Shakedown
by digby
It doesn't get any better than this:
Daily Kos reports:
According to Barton, asking BP to set up an escrow account to compensate victims of BP's disaster was a criminal action -- a "shakedown" as he put it. Barton's not alone: his comments echo those made by other Republicans in recent days, including Michele Bachmann, Haley Barbour, and Tom Price.
Update 1 -- GOP Rep. Marcia Blackburn continues the "give BP a break" theme from the Republican Party, saying "the current administration deserves a significant portion of the blame for the oil spill." I guess BP would have loved an apology from her, but at least she told them that it really wasn't all their fault. Update 2 -- GOP Rep. Phil Gingrey continues the "attack Obama, not BP" message from Republicans, saying he's looking forward to testimony from the administration. You could feel the GOP love from Hayward, pleased that yet another Republican was taking heat off his company.
Joe Barton knows a little bit about shakedowns. After all he's taken many millions in campaign cash from the oil industry. But he doesn't stop at just campaign money:
Wednesday, February 3, 2010 By DAVE MICHAELS / The Dallas Morning News
dmichaels@dallasnews.com WASHINGTON – Rep. Joe Barton has earned nearly $100,000 from an interest in natural gas wells that he purchased from a longtime campaign donor who also advised the congressman on energy policy, according to interviews and records.
At a hearing last month of the House Energy and Commerce Committee, Barton said he was "a small, small partner in a natural gas well in Johnson County in the Barnett Shale that is probably my 4-year-old son's college education." He later told a reporter that he couldn't remember precisely how he obtained the interest.
Land records show that Barton, R-Arlington, purchased his interest from Walter G. Mize, a Cleburne businessman who donated more than $30,000 to Barton's campaigns.
Mize urged Barton to create a federal oil and gas research program that was included in a 2005 energy law. Barton's ties to Mize, who died in 2008, go back 20 years, according to friends of both men.
Barton's interest could become controversial at a time when Congress is considering sweeping energy legislation that would boost demand for natural gas. Congressional experts say such deals raise ethical questions for lawmakers, who are expected by the public to maintain a firewall between their personal finances and official duties.
"If you are elected as a public servant to try to do what is right for the public generally and then you use that position to help bring in material wealth, I think it's unethical," said James Thurber, a distinguished professor of government at American University.
Yeah, I would guess most people agree with that.
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digby 6/17/2010 08:30:00 AM
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If you're buying a place for income, you need to understand the numbers in a deal. If you don't understand income and how income affects investment property value, then you shouldn't be investing in real estate. Savvy investors hire a team of professionals (realtor, lawyer, accountant, 1031 company, mortgage lender, inspector, and so on) to assist them in creating a proper valuation for a property. If you want to invest, you should build your team and get them to interact with each other. That's how they'll help you make smarter decisions.
For example, if you're buying a warehouse or a retail strip center, you probably aren't an expert in commercial building construction. You won't know if an interior wall is failing or if it's likely the roof will leak. You're far better off hiring a commercial property inspector to walk you through the property and help you figure out what it will take to keep it maintained and in good working order. If you buy the property and later decided to sell it and buy a different investment property, you'll need a top accountant and 1031 exchange specialist to help you complete the transaction and meet Internal Revenue Service rules.
It's really hard to do it on your own and be profitable. It's one of the biggest mistakes early investors make. At the very least, find an experienced agent who represents other investors to help you identify property and get yourself a great real estate attorney who can help draw up documents that will protect you and your other assets.
The trend in residential real estate is to build smaller, more energy-efficient houses that are cheaper to own and maintain. All of the McMansions built in the 1980s and 1990s could become white elephants that see their value erode, even as the larger market recovers.
Do you have any advice for those looking to remodel? What types of upgrades are prudent?
The remodeling industry was hit extremely hard last year, and while more people are planning to fix up their homes this year, the problem is one of financing. You either have to save up enough money to fix your house or you have to charge it on your credit card. You can no longer take out a home equity loan, use the proceeds to fix up your house, and then refinance the balance into a new mortgage. Home equity lines of credit are hard to come by these days because the federal government wants lenders to keep a percentage of every HELOC on their own books. As a result, they're few and far between.
This isn't the time to make big, flashy improvements to your home. The economy is still extremely fragile, and we may be heading for a double-dip recession. If you can live with your grungy carpet for another year, you should do it.
When it comes to fixing up your house, you want to spend as carefully as possible. Figure out what amenities are standard in your neighborhood, and then build to that level--not a penny more. If you have to sell for some reason, you don't want to take a bath financially.
What's your advice to people who are thinking it may be time to consider buying a second/vacation home? Key pointers?
I do think that now is a great time to buy. I've just blogged on the three reasons why people buy vacation homes: as a place to create family memories, as an eventual place to retire and rent out until retirement hits, and for pure investment reasons. Decide which kind of vacation home buyer you are and then reverse-engineer the process to figure out what kind of vacation home you should be buying. If you can't afford the cash down payment or have a lot of excess cash to keep the place running and in great shape, don't buy a vacation home. It's easy to think you're getting a great deal because of the purchase price, only to find yourself snowed under by management costs, cleaning expenses, and resort fees. If you're going to rent your vacation home, here are nine things you should know.
How about sellers--any advice for them? Is it a good time to trade up to a larger or better home if you can swing it?
Can you sell your home right now? Can you get enough cash out of your primary residence to be able to trade up to a larger home? What most buyers forget is that a larger home means larger utility bills, maintenance costs, and upgrading costs, as well as higher taxes and insurance premiums. There's more to maintain, cool, and decorate. Can you afford all that?
Right now, those homeowners who can sell their property, whatever size and wherever they live, control the market. The problem is that many of those sellers are so freaked out that they don't really want to buy anything right now. So, they're thinking about renting or are moving in with family or friends. We're seeing the housing market continue to shrink at the moment, but it won't always be that way.
Property values might not rebound until 2020--or later, depending on where you live. You can't make a decision about selling based on when you think the housing market will rebound. That's like saying, "Should I sell my stock today or wait for the company to rebound?" We don't know when that will happen, if ever.
If you want to sell, and have a compelling reason to move, you should figure out an exit strategy. If homes are selling in your area, then you should try to sell your house. If homes aren't selling, and you're 40% underwater with your mortgage, you'll have to either do a short sale, a deed-in-lieu of foreclosure, or a strategic default.
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