Bloggedy Blog Blawg

“Do you Blog?”

This seems to be the new question that is popping up in business and social circles around town, across the country and throughout the world. A year ago almost nobody, except those who were really hip, had heard of blogs, and now they are one of the hottest topics on the internet.

What is a blog? A blog is a reverse-chronological log that is hosted on the web, or also called a weblog (blog for short). It can be either formal presentation or a random connection of thoughts. It can have posts from one author or many. There can be open commenting from the general public, or strictly just snippets from the blog’s owner. Individuals, companies and political pendants now have blogs, as they are a very easy tool with which to communicate to a wide audience via the web.

Before the 2004 presidential campaign I had never heard of blogs (I guess I am admitting that I am just not terribly hip). During the campaign both Republican and Democrat supporters began to break news (and some fake or fabricated news) on blogs. A lot of information on the Swift Boat Veterans issue and the CBS Memogate stories were put into the public domain, not by the established news media, but rather by the bloggers. For better or worse, these blogs on both sides of the political isle were widely read and they themselves were one of the big stories of the 2004 election.

Following the November elections, the term blog (or is it “blawg”?) has started to become a household term. I would regularly hear people talking about friends who were “blogging” their vacation, or corporate CEO’s who interacted daily with customers via the “company blog”. In March I attended a marketing seminar on blogging. At the start of the program they surveyed the audience about blogs, and most participants, like myself, had never read or written a blog.

That was when I decided I wanted to figure out why someone would blog in the first place. Since I am a frustrated want to-be writer, I decided to give blogging a try. I am releasing my first book this summer, Some Assembly Required: How to Make, Grow and Keep Your Business Relationships, and decided that if nothing else, a blog was a good way to help search engines, like Yahoo! and Google, find my website. With this in mind, I decide to make the topic of my book, networking and business development, the theme of my blog.

Thus Some Assembly Required – The Business Development / Networking Blog was born in March of 2005.

Since my book was not due out for another four months, and because the blog was just and experiment, I decided to keep it a secret. I wasn’t looking for any publicity, nor did I care if anyone read my posts. This was just an exercise in regularly writing articles on a topic that I know something about. The benefit was that linking my articles to my book’s website, it quickly succeeded in the goal of helping the search engines find the book’s main page.

But then it got interesting. The more I researched how the blogosphere operated (blogosphere being the cyber world of those who blog), the more I realized that there is a whole blogging community. I discovered that one of the things bloggers do is to create links from their page to the pages of other blogs that they respect and read. I had uncovered many other business, marketing and sales oriented blogs that I began visiting, and linked to these pages from my blog. I also installed a piece of software counted how many people visited my blog. At first there was just one per day, and that was me. But then I started noticing the count was rising. Through my participation in the blogosphere, people were finding my blog and reading my posts. A couple of bloggers would quote my posts and link to my page. I started to receive emails from people who praised my work and then people I did not know began to pre-order my book.

Now there are regular readers of my blog. I was at a cocktail party recently and was introduced to a local entrepreneur who, upon hearing my name, stated; “Oh, I read your blog!”. Wow. I will admit, that was a very flattering.

Like the fax machine, cell phone, home computers and the internet, blogs are not a fad. The future is here and it involves blogging.

IRS Scrutinizes World’s Largest Internet Evangelist – Bill Keller Says Supreme Court If Necessary

The story written by Laurie Goodstein broke in The New York Times Politics Blog June 23, 2008 and has garnered blog responses from around the nation. Keller who operates a live daily broadcast from St. Petersburg Florida and delivers a detailed daily devotional to over two million opt in subscribers is under a non-profit status as a Christian religious organization. By law he is prohibited from either endorsing or opposing candidates. This limitation includes anyone running for public office from the local selectman to presidential candidates.

In the early stages of the Republican primary race Keller created a media stir with the phrase “A vote for Romney is a vote for Satan.” It is that statement that seemed to get the attention of the IRS which now says Keller is involved in partisan politics and using his ministry as a vehicle for that purpose. “No” says Keller who states that his warnings about Romney were for religious reasons only. Keller repeatedly stated that the Mormon religion is in no way representative of “biblical Christianity.”

Not everyone is convinced that Keller is out of whack. One blogger on The Caucus blogs of The New York Times June 24, 2008 “Funny; Obama can stand in the pulpit of a church on Sunday morning ….no investigation…he speaks to the national convention of his church…the IRS says that is OK…yet an internet evangelist calls out Romney for being part of a cult and lying to people about being a Christian and he is investigated?”

The IRS will have a hard time deciding if Keller has violated his 501-C standing because the lines are blurred. In his own ministry Keller is bound to inform his adherents of possible dangers from people professing to be Christians when they are not. It is a biblical mandate. That is probably why Professor T. Wayne Bailey of Stetson University was quoted in the Tampa Bay Times for saying “”I think, in the past, when it became a controversial issue, the authorities have gone far afield to presume in the direction of the right of free expression. So unless someone commits a hard and fast violation, I think … administrations have simply relied on caution rather than punishment.”

Bill Keller has recently stated in the national media that Sen. Obama is not a Christian. In his daily devotional for June 26, 2008 Keller informed his 2.4 million subscribers that “The story broke across the nation Tuesday that Liveprayer has been under investigation by the IRS for possibly violating our tax exemption for holding Mitt Romney accountable for his lies and deceit about what the Mormon cult really believes. This has not silenced me or deterred me from doing the same regarding Senator Barack Hussein Obama’s claims that he is a Christian, when his own words and actions clearly show he is not. So many in the Liveprayer family emailed me their love and prayers and I can’t tell you how much I appreciate it. We cooperated fully and on time with the IRS and our attorneys are confident we did nothing wrong and will be fully exonerated.”

Under Housing’s Weight, Uncle Sam Finally Shrugs

Three years after the housing market’s collapse, the federal government finds itself backing nine out of every 10 new residential mortgages, some of which still require buyers to put less than 10 percent down.

Like Atlas with Earth on his shoulders, Uncle Sam is bearing the weight of nearly the entire housing industry, such as it currently is. If today’s mortgages go bust like their predecessors in recent years, the American taxpayer will have to bear the losses.

With apologies to devotees of Ayn Rand, it seems to me that Uncle Sam has, at last, shrugged.

Last week the Obama administration gave Congress its recommendations – or more accurately, some options – to deal with the financial mess at Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that were at the heart of the mortgage crisis that has so far cost $134 billion to mop up. Together with the Federal Housing Administration, the GSEs have squeezed private lenders almost entirely out of the housing market. You may go to a privately owned bank for a loan, but in all probability the loan will either be backed by the FHA or will promptly be bundled with other loans into securities that are guaranteed by the GSEs and sold to investors.

Treasury Secretary Timothy Geithner presented three options for transitioning to a mortgage market less dependent on the government.(1) They range from getting the government out of the mortgage market almost completely to something much like our current system.

Preserving the current system, however, will eventually take us back to the same place we began. If the government backs everyone’s mortgages, lenders have little incentive to make loans only to those who can pay them back, and investors have less reason to care.

House Republicans seemed relieved, or at least hopeful, in the wake of Geithner’s proposal. Rep. Randy Neugebauer, R-Texas, said he hoped the report would make it easier for Democrats “to embrace some of these principles,” that is to say, principles for reducing government presence in the mortgage market.(2) The fact that all three proposals, even the one closest to the system in place, advocate reducing the role of the government signals an understanding that we need the private sector to return to this business.

Count me in with those who believe the government should not back private, residential mortgages at all – or at least as little as possible. Certain constituencies, like military veterans, seem almost certain to be singled out for special treatment under any alternative.

If Congress does pursue the option that would make the mortgage market almost entirely private, rates would certainly go up. For borrowers with good credit, I believe we can expect an increase of 1 percentage point or so. This would put the rates in line with current rates for those for “jumbo loans” that are too large for Fannie Mae or Freddie Mac to guarantee. Borrowers with weaker credit can expect to pay more.

The people who make their livings building and selling homes want the federal taxpayer to keep subsidizing the flow of customer money, of course. They predict a disaster in the housing market if it does not. While I don’t believe the gradual wind-down of federal involvement would severely harm the market, it certainly would have a lot of side effects – nearly all of them good.

First, Americans would stop buying more house, or houses, than they need. People are most concerned with their monthly mortgage payment, not directly with interest rates, so they will be inclined to take out smaller loans at the new, higher interest rates. While this will help restrain house prices (not a bad thing for buyers in itself), I think the bigger effect will be to steer people, at the margins, toward buying smaller residences, or forgoing a vacation home.

Many Americans are overhoused, especially as the population ages and family sizes get smaller. A more realistic cost of credit will help correct this.

Taking the principle further, fewer people will want mortgages at all. This will lead to a more realistic balance between buying and renting. People will be more apt to buy houses for shelter, rather than as investments.

While it will remain true that renting doesn’t build equity, the upsides of renting will become more apparent when buying is a bit harder. Chief among these is flexibility: If the factory that employs you shuts down, but there’s another job available across the country, it’s much easier to relocate if you do not first need to sell your house.

Despite warnings from mortgage bankers, it is unlikely that the 30-year fixed rate mortgage will disappear entirely, even in a nearly all-private system. Long term, fixed-rate loans will become rarer and harder to come by – as they should, since they pose the greatest risk to the issuers – but buyers who want them badly enough to brave the higher interest rates will still find them available.

The last consequence will be less direct, but no less important. Banks and thrift institutions will get back into the business of making and holding mortgages if they don’t have to compete with GSEs that can borrow at the Treasury’s unbeatable rates. To make these mortgages, financial institutions will need to attract deposits by paying savers a reasonable rate for the use of their funds. This is healthy for a nation that presently saves too little and borrows and spends too much.

Getting private lenders back into the mortgage business, and getting the government out, is an important step to get this country to use its capital more rationally and productively. Besides, with the Treasury’s own debt rising by more than $1 trillion each year, Uncle Sam had better save some debt-carrying capacity for himself. Those shoulders are big and strong, but even Atlas had his limits.

Sources:

(1) Bloomberg

(2) The Wall Street Journal