I just wouldn’t have put all those in the same thought, but apparently someone did. A top economist was asked if the housing market has hit bottom. He wisely avoided the question by pointing out people saw false bottoms before this. His two examples: 2010 with the tax credit, and 2011 with its . . . incidents (see above).

I’d say he has his economic priorities confused but he’s the expert and I guess I get his point. You can’t predict the market. You may think you see how government policies are going to affect things, but then natural disasters and foreign problems creep in and knock you down. Or you may plan for the worst but think the next big idea from Washington is going to keep you afloat.

But when it all comes down to it, real recovery, an escape from the real “bottom” is only possible through one thing: the resilience of the American market. Us investors moving along making the deals that bounce things back, training the next wave of pioneers in the housing market, and taking some small credit for the declining delinquencies and increasing short sales – we’re the ones who are poised to see the future.

So I leave the predictions to you guys. Tell me how hard you’re working and I’ll tell you how quickly we’ll recover. Show me the deals you’ve made and I’ll show you strength of our economy. And most importantly, show me you’ve got a plan for an awesome weekend and I’ll show you mine! Till next week!

It’s kind of the same way when it comes to real estate. Especially real estate in this kind of downturn economy. There’s what we want the market to do and what the market needs to do. Those two haven’t had anything to do with each other for several years now. So what are we coming to in 2012? Will the market’s needs and our wants come together?

Most economists agree that housing prices needed to fall from the highs we’ve seen since 2006. They were artificially inflated for many reasons and it wasn’t something that could be sustained. Sure, we all wanted them to (except maybe those of us who know how to turn a profit in ANY market). But the needs to the housing market and the wants of our bank accounts didn’t have much in common.

But we’re coming to the end of 2011 and it’s an interesting question whether the housing market needs to fall any further. Or better yet, do prices need to rise (if they ever do)? We’re happy to end this year with the small gains we’ve achieved and set our sites down the road. I wouldn’t expect any major surges through 2012 but you never know. Banks, the Fed, unemployment – they are all players in this giant game.

So get ready to decide what you want. Get ready to fight for what you need. And make sure you can tell the difference.

So I keep skimming and I read about how real estate losses are always high this time of year. And then one more piece of the puzzle – HARP, the government’s refinance program, is trying to get reinvigorated. So let me paint the whole picture for you guys:

1) Homeowners defaulting – mortgage giants lose money

2) Mortgage giants get bailed out by Treasury

3) Treasury offers to refinance mortgages for homeowners at lower rates

4) Homeowners make lower payments every month to mortgage giants

5) Mortgage giants post losses based on monthly earnings

6) See step 2

Oh boy, I think you see the problem now. Somehow the system got corrupted. Being completely honest here, I won’t deny that some people or organizations involved in this cycle have good intentions. (I’m all for helping people keep their homes, avoid default, make reasonable mortgage payments but we all know that Short Sales are the only sane way to do this, help the housing market recover, and provide genuine solutions.) But good intentions only lead one place. And every bank, mortgage servicer, government agency, and crooked politician who can get his hands on cash will fall to temptation.

I wish the entire country could see how misguided these programs are. But so far everyone prefers to look at the short terms benefits and ignore the big picture. I won’t apologize – I’m a man with vision, who looks ahead and anticipates problems, and I’m not afraid to speak my mind.

What about you?

We all know that the nation’s biggest banks are being investigated left and right for all sorts of “funny” accounting. Basically to save themselves money and limit their risks they skimped on paperwork, due process, and legality to “get the job done.” And it’s taking plenty of government manpower to figure out just how deep the rabbit hole goes.

Well, a couple of lawyers have just found a new loophole the big banks have been using that just hasn’t been noticed until now and it will potentially cost the taxpayer a ton of money. Basically, not only were banks offering lousy mortgages, they were targeting specific people for them. One group they got hooked is veterans. Since veterans can get refinanced loans backed by the government, banks figured it was a sure bet to dump worthless assets on our dedicated veterans knowing full well they would default.

This has so far amounted to hundreds of millions of dollars in loans that you and I will have to cover. But as this story is breaking the Dept. of Veterans Affairs is realizing just how exposed they are and they’ll do what they can to fight back. It turns out that to get these taxpayer-backed loans, the banks had to, of course, fudge the paperwork. This means they’ve violated a whole mess of laws – meaning they’ll owe damages plus $11,000 per violation.

I think lawyers will be unraveling these schemes for years but each time I hear a new one I’m at first disgusted by the banks disregard for the law, and then slightly impressed by how well they can juice the system. But hopefully when this whole mess is sorted out the banks will get what’s coming to them.

Any suggestions what that should be?

Why are they risky? And why now?

It’s really backwards logic and that kind of thing only seems to work on Wall Street. When we were in the worst of the financial crisis (aren’t we now??) the ratings agencies knew the banks would get bailed out if they looked like they were going to fail. That means more security, higher rating.

But now when recovery seems to be appearing (where, though??) the banks aren’t “too big to fail” so they’re less likely to be bailed out by Uncle Sam. Translation – less security, lower rating.

So you see the backwards nonsense going on here? When we’re doing better we’re more risky and when we’re doing worse we’re more secure. I think the Fed got itself into a real mess with these bailouts. Once they stepped in and said their wallets are up for grabs to any big company the entire market system got thrown into chaos. If they’re too active ratings go up artificially. If they pull back ratings drop even though the banks and investors are going better.

Like I said from the beginning, it’s a war of perception. You can’t judge the strength of an investment by anything other than the strength of the investment. Make a smart choice, put your money with a winner and don’t bet against a crash.

Am I out in crazy town over here? Does anyone think the bailout system made markets better? If you do, I’ve got a great bridge to sell you!

Have an awesome weekend guys and in the words of a great movie – “Be excellent to each other!”

Some of the most glaring reasons people are so disillusioned are the robo-signing mess, government intervention, and foreclosures. But as with most issues, perception is everything. Consumer confidence is low regarding recovery, but is also key to that very recovery.

So if we can’t believe in banks or big government, who can we turn to? Tax incentives and rock bottom interest rates aren’t moving things ahead. Unemployment is still sky-high leaving most people unable to dream of affording a home. So where do we turn?

The foreclosure wave spreading through the industry has brought prices down but that hasn’t yet led to a resurgence of new purchases. Building starts are down nation-wide. So it’s hard to see where the future of the recovery lies.

Basically, you’ve known all along what the ultimate answer is going to be. You’ve read it in every email I’ve sent out and every blog post here. The movement to lead the nation out of the housing crisis begins with us. With the short sale community and those investors bold enough to take action. There are enough of us waiting to make our move and pull prices out of the ditch. So don’t expect answers from on high. Make the answers happen right now in your own backyard.

Working out the math here, they’re selling 2.4 billion shares at around $4.35 per share. So if you’re looking to drop over $10 billion over the weekend, I may know something you can do with it.

It seems to be win-win. Citigroup gets the government out of its hair. The government pulls its hands out of a risky business that it is incapable of dealing with. And the taxpayer gets a nice little profit on his investment. (All told for the Citigroup TARP money, the government expects to make around $12 billion.)

Citigroup, you might recall, took $45 billion in bailout money and handed over control of the company to the government. The Treasury has been getting involved from time to time, but is actually quite committed to getting back to the business of governing countries, not companies.

Let’s just make sure that the rest of the TARP funds get paid back and then maybe we’ll rest a little easier (and give Obama another chance?) but until then, keep a close watch on things. Or better yet, let me do it for you. You keep your eyes on the short sale prize instead. You’ll have a much better ROI than the government, guaranteed!

There are definitely two sides to the story. On the one hand the government itself admits there needs to be more public accountability. No one knows what goes on behind closed doors in Washington and Obama’s big promise during his campaign was to be more public with decision making. But until now, any accountability has been directed solely by the government. They decide what the public hears and what is reported. So WikiLeaks probably believes that that is not considered real accountability. All private deal-making and policy should be public domain.

On the other hand, the government has two main arguments against such public exposure. One, the old standby of national security which allows everything from being groped while boarding a plane tapping your phone without your knowledge. Whether that’s really necessary or not may be irrelevant, but it’s hard to say. But the second argument, which in my opinion is much more persuasive, has to do with how government itself is supposed to function. Every decision that needs to be made to run this country is not a matter of public opinion. We don’t have a national vote on budgets or policies. We have elected leaders and entrusted them to do a job. And part of that job involves doing things privately. Certain government functions need to be kept secret in order to allow them to happen. Under the table pressure on rogue countries is much more effective than public censure.

So the crux of the issue is really whether too much public knowledge will actually improve the government’s ability to govern or impede it. Because ultimately what we want is for our leaders to run the country the best they can. So if we keep the end goal in mind, we can all appreciate each other’s way of getting there.

That means they’re all now at risk of foreclosure despite the government’s costly efforts. Still, 36,300 are making payments and keeping their homes. That’s certainly a bright spot in the gloom, but it’s not enough to keep the program alive. Certainly not against Republican opposition.

Currently, almost 10% of all mortgage holders are late on their payments. And unemployment is still high so no big improvements are expected. The bureaucracy is definitely a major factor driving people away from aid programs. Banks are unwilling to work hard at making a program like this work. And homeowners are frustrated by the extreme rules and qualifications.

The only major upside, if it can be called one: the program has only spent $483 million of its $50 billion budget. So we may see some money flowing into other, hopefully more successful programs eventually.

Bottom line: I want to hear from you. What can you say about government programs? Have you heard anything positive? Some first hand accounts of successes or failures would definitely be worth hearing.