Our Housing Industry's "Boiler Room"

At the height of a wave of postwar prosperity in 1920, well-known statistician Roger Babson predicted that America was about to enter “the worst business depression that our generation has ever experienced.” Through the next few months, business activity continued its boom. But before the end of 1920, the crash Roger Babson predicted did strike – with sudden and intense fury.

How did Babson know a crash was on the way? He said that he looked past the oft-quoted economic “thermometers” that measure current conditions, and focused on the fundamental source which determines the future temperature of the economy – what he termed the “boiler room.”

Judging by the housing industry, American’s boiler room is losing steam fast.

Last October, new home construction fell 16 percent from a year earlier. New building permits were down 24.5 percent. New home sales were down 23.3 percent. Existing home sales were down 19 percent.

On the East Coast, New York suffered foreclosure rates 51 percent higher last October than in October 2006. On the West Coast, conditions may be even worse. In California, foreclosure rates were up an astounding 213 percent from 2006.

Nationally, the number of unsold homes sitting on the market hovers at its highest level since data has been collected.

Yet amazingly, according to the National Association of Realtors (and its statistical thermometers), “The vast majority of metropolitan areas showed rising or stable home prices in the third quarter with most experiencing modest gains compared with a year earlier” (Nov. 21, 2007).

This NAR report points to national median existing single-family home prices as evidence. NAR statistics indicate the national median home price during the third quarter of 2007 was down just a slight 2 percent from a year earlier. The NAR also reports that during this period, 93 out of 150 metropolitan statistical areas showed increases in median home prices.

There certainly seems to be a disconnect between the NAR assessment and the reality on the ground for homeowners across America. Home sales are plummeting, unsold homes inventory is near record levels, banks are tightening borrowing requirements, foreclosures are skyrocketing, and President Bush is organizing a massive homeowner bailout. But the NAR says that home prices are about as low as they’re going to go and that most areas are beginning to show price gains.

The NAR isn’t alone in painting a confusing picture. Most news sources report a litany of problems facing the housing market, then go on to quote median prices as the indicator that home prices have remained relatively stable.

But you must beware: Median home prices can be misleading.

The median price means the middle price. By definition, half the houses sold are higher-priced than the median, and half the homes sold are lower-priced.

Relying on simple median values to create a national housing picture means that houses that don’t sell are excluded from median sale price data. If the homes that are not selling happen to be mostly lower-priced homes, then the national median price becomes skewed because it becomes the middle number of the higher-priced homes that do sell. Thus, even if prices fall for most of the houses on the market, the overall median price for houses sold can actually increase. And poorer people usually feel the effects of a slowing economy first, have the most difficulty qualifying for loans, and typically purchase lower-priced homes.

But there are two other big reasons property values are probably much lower than reported.

David Nunn, a certified general appraiser based in the Southern Indiana area, gives two examples of how many home prices could be “just plain phony and no one is addressing it.”

One of the houses Nunn recently observed was financed by the Federal Housing Administration and sold for $106,000 with no concessions reported. This seemed odd since the house had been on the market for six months and listed for only $100,000. Nunn checked with the house’s listing agent, and found that the seller paid $1,500 toward the buyer’s cost, meaning that the house sold for $98,500. How did it get reported as a $106,000 sale?

Because the appraisal came in at $106,000 the loan agent, with the agreement of the buyer, kicked the loan up to create equity. That was reported as the selling price. The real selling price should have been reported as either $98,500 or $100,000 with $1,500 in seller’s concessions.

As a result of such reporting, housing prices are inflated, the market appears to be appreciating, and future buyers pay inflated prices.

Another deceptive factor is concealed false appreciation. For example, a home on 74 acres was reported sold for $132,000.

When meeting the seller, Nunn found that the sale included unreported personal property along with the land, including a pickup, a saw mill, a camper, a tractor and more – at least $25,000 worth of personal property. This was not reported in either Multiple Listing Service (MLS) figure or sales disclosure statements.

Without the extra goodies, the 74 acres probably would have sold for closer to $107,000.

As with the first example, these types of transactions can completely distort the values uninformed appraisers place on similar properties, and consequently the housing market can look more robust than it is in reality.

In fact, according to Nunn, the whole home purchasing methodology is biased to falsely inflate home values. Home sellers certainly want the highest price they can get. Loan brokers and real-estate agents receive higher commissions on larger sales, and the banks make more money on larger mortgages. “No one in the pipeline has any incentive to want an honest evaluation,” says Nunn. “So the end result is that many appraisers roll over and forget their ethics.”

And now I come to the reason I have placed this article on a website about “Christian Stuff”.

This how is Babson explained his “boiler room” philosophy:
“It is now mid-winter. If I want to know what the temperature is now, in this room, I go to the wall and look at the thermometer. If I want to know what it has been, up to now, and the existing trend as of the moment, I look at a recording thermometer. But if I want to know what the temperature in this room is going to be an hour from now, I go to the source which determines future temperatures – I go down to the boiler room and see what is happening down there.

“You gentlemen looked at bank clearings, indexes of business activity, stock market quotations – you looked at the thermometers on the wall. I went down and looked at the boiler room. I looked at the way people as a whole were dealing with one another. I looked to the source which determines future conditions. I have found that that source may be defined in terms of ‘righteousness.’

“When 51 percent or more of the whole people are reasonably ‘righteous’ in their dealings with one another, we are heading into increasing prosperity. When 51 percent of the people become ‘unrighteous’ in their business dealings with their fellows, then we are headed for bad times economically!”

America is facing deteriorating economic conditions, and much of it has to do with dishonesty – homebuyers inflating income statements, realtors pushing sales, lenders abrogating lending standards, credit ratings agencies knowingly overvaluing risky subprime mortgages, and banks marketing overvalued subprime mortgages as safe investments to unsuspecting investors. America’s boiler room is running on the fumes of fraud and greed, and you can’t run on fumes for long.

The NAR thermometer still indicates that everything is fine, the worst is over, and America has nothing to worry about. But should you rely on what a thermometer is telling you, or go down and see what is happening in the boiler room?

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Paul's Letter To Catholics

The New Testament book of Hebrews is generally acknowledged as having been written by the apostle Paul. He was pointing out in the book how Christians are not bound by the Mosaic law with its priestly hierarchy structure and its system of rituals and sacrifices. He said that we Christians only need Jesus Christ as our priest, our high priest, He being the only mediator between God and man.

As I grew up and lived as a Catholic in the early years of my life, I can now see a parallel in Paul’s teaching from the book of Hebrews to those early Christians and in what Paul would probably say to Catholics had Paul lived into the Catholic era. Just as Paul in his letters was critical of some of the practices which developed in the early churches, I feel certain that Paul would have criticized the hierarchy structure of the later Catholic church. So much of what we see about the priestly structure of Judaism which Paul said had been done away applies in principle to the Catholic hierarchy.

I am going to paraphrase the relevant parts of the book of Hebrews and apply the message to the Catholic hierarchy. Let’s start with Hebrews 7:11-12 – If the old Judaic priesthood or the Catholic priesthood could really make people perfect, then what need would there be for Christ to come and dwell within the individual believer in a new priesthood? But the whole idea of priesthood has been changed by the New Covenant.

V. 18 – There has been an annulling of the entire concept of human priestly hierarchy because of its weaknesses.

V. 22-28 – This makes Jesus the guarantee of a far better way between us and God, one that really works! It is a new covenant with only one mediator, Jesus Christ. Under the priestly hierarchy system, there are a lot of priests but they die and have to be replaced. But Jesus’ priesthood from within us is permanent. He’s there from now to eternity to lead and guide us to the Father through Him, always on the job. So now we have a high priest who perfectly fits our needs: completely holy, uncompromised by sin, with authority extending as high as God’s presence in heaven itself. Unlike the priestly hierarchy, He doesn’t have to offer the Sacrifice of the Mass every day before He can get around to us and our sins. He’s done it, once and for all: offered up Himself as the sacrifice on the cross of Calvary. The Catholic hierarchy appoints as priests men who are so often never able to get the job done right.

8:6-8 – Jesus’ priestly work far surpasses what ordained human priests can do because He’s working from a far better plan. If the whole first Judaic system of priestly hierarchy had worked out, a second covenant wouldn’t have been needed. But we know that the first was found wanting because of the weakness of the people AND of the priestly hierarchy itself.
9:1 – When you have a Catholic priest hierarchy, they work out through a system of rituals within a worldly sanctuary, through the Sacrifice of the Mass, and all the other duties performed for the laity, the subservient common people.

V. 11 – But when Christ lives within you, there is no need for the power structure of the hierarchy, and He bypasses the need for priests to perform sacramental duties and rituals. The original sacraments of baptism and the Lord’s Supper are administered by the everyday people of the church.

V. 23-24 – When the real sacrifice of Christ on the cross has taken place once and for all, there is no need to carry on a system of sacrificial Masses offered by the hierarchy. All connection to God is through Christ within on a personal basis, and through the transcendent Christ in the presence of God for us.

10:1-2 – The Old Testament plan of priestly hierarchy was only a hint of the good things in the new plan. The old Mosaic law plan wasn’t complete in itself, it couldn’t complete those who followed it. And no matter how many Sacrifices of the Mass are offered year after year, the Catholic hierarchy plan of dispensing God’s power through priests con never add up to a complete solution. God’s guidance and power can only come through the indwelling Christ.

V. 10-11 – The body of Christ was offered once for all. But Catholic priests go to work at the altar each day offering the Sacrifice of the Mass for the laity who already have Christ living in them.

V. 19-22 – So, Catholic friends, realize that you can now, without hesitation, walk right up to God and say, “Thanks for making me a child in Your Family because Christ lives in me and You see Him when you look at me.” So let’s do it, full of belief, confident that we’re presentable inside and out, without working through the power of the hierarchy.

12:2-3 – Keep your eyes on Jesus, who both began and finished this race we’re in. Study how He did it. He never lost sight of His union with the Father within Him, and we are never to lose sight of our union with Christ within us.

V. 7 – God is educating you; that’s why you should never be discouraged. He’s treating you as dear children. This trouble you’re in isn’t punishment; it’s training, the normal experience of children. God doesn’t reject His children because of weaknesses, He trains them by correction.

13:5-8 – The Catholic hierarchy says to Christians, “You need us to keep you out of hell.” But Christ says that because we have chosen to make Him Savior and Lord, we are forever saved from hell because He will never leave us or forsake us. We may boldly say that Christ is in union with us and we have nothing to fear. We don’t have union with a changeable Christ who loves us one day and rejects us another. He is the same yesterday, today and forever.

In conclusion, I love Catholics. Many of my best, old time friends are Catholic. What I am presenting here is a condemnation of the Catholic priestly hierarchy system. Catholic education tends to see the hierarchy as a necessary mediation system between God and man. But this is not so. Christ Himself is the only mediator between God and man (1 Tim. 2:5).

When the first New Testament churches were established in the book of Acts, there was never any mention made of a hierarchy of priests to handle the laity. There was only a system of a pastor and those local Christians who showed gifts of leadership. It took a century or more after the apostles’ deaths for the Catholic church to establish the hierarchy system of appointment of power.

But Catholics might say, “What difference does it make for us as Christians if we have priests to serve us?” Let me respond this way:

* The rituals of the Mass and other devotions are an institution requiring clergy power. The more you depend on priests for spiritual guidance and power, the less you are able to trust and depend on the indwelling Christ.

* Priest are all too human as we have seen from the Catholic church sexual scandal. Since the human tendency of a priestly hierarchy is to appear holy and blameless, the coverup by the movement of accused priests is the natural inclination. The movement of priests among parishes by a central authority is not biblical.

My Catholic brothers and sisters:
Know who you are in union with the eternal Jesus Christ. Develop a personal relationship with Him in prayer and trust Him alone for power and guidance. Find a local church without priestly hierarchy.

For other articles about hierarchy, click here and here.

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Basking In Yourself

I have a tendency lately to forget important stuff like personal appointments, birthdays, anniversaries, etc. It may be because I am getting older; but, given that I’ve always been kind of prone to forgetting important stuff, it’s probably just intrinsic to who I am.

However there is a forgetfulness that is common and intrinsic to every Christian. It is a leftover part of the Fall which still lingers in our minds and Christians must fight it all the time. We forget how good the good news really is. Paul was surprised when the Galatians forgot.

He wrote: “You foolish Galatians! Who has bewitched you?” (Gal. 3:1). “Are you so foolish? Having begun in the Spirit, are you now made perfect by the flesh?” (Gal. 3:3, KJV). In other words: What were you thinking? Have you already forgotten?

Paul should not have been surprised. We can’t help it.

There is something in our soul-mind causing us to become the very thing Jesus came to prevent. Maybe we believe that we could not be that bad or that God’s grace could be that good.

Maybe it’s just that a religion of rules and righteousness is attractive because we want to do it ourselves and, more importantly, we want to get the credit for it. It could be that pride and self-righteousness are so much a part of us that we’re attracted to that which affirms it.

And then it could be that we’ve been playing the game of religion for so long and are so used to it that we have come to believe it is the only game in town.

We had an ice storm this morning which woke me up a little earlier than usual. I decided to read my Bible and spend time on spiritual things with Jesus.

When it was time to let the dog out, I got out of my chair and this thought hit me:

I said (and I’m blushing when I tell you this…and, if you say I said it, I’ll say you lied), “I’ll bet there aren’t many Christians who get up this early to be with you, Lord. I’ll bet you’re proud of me and will bless me for doing this. See how much I love you and how faithful I am to you.”

I heard Him laughing.

I think He said, “Are you crazy? If there were any benefit in your getting up so early, you just blew it with your arrogance, your super-spirituality and the violation of everything I’ve ever taught you.”

That would have ruined my day, but He never condemns.

He also said to me, “Don’t look so depressed. That was the wrong approach you made to Me, but I’m still fond of you.”

I repented and, of course, I was forgiven.

And then He told me that, if I had not repented, He would still love me.

But I’ve been thinking about my attitude and trying to understand it. Frankly, given the fact that I’ve written about grace and attend a church named “Grace Church”, I don’t understand how I forget so easily.

I don’t understand the reversion to works and how that constantly haunts me. I don’t understand why I tell others that, if they miss their physical rituals and spiritual devotions, God won’t be angry. But then I feel that if I miss mine, God will be ticked and something really bad will happen during the day.

I don’t understand how I can tell people that sin by a Christian, as bad as it is, can drive them to His arms and still think that my sin makes me unwelcome in His presence.

What is it with me? Of all people, I ought to know better.

Let me tell you. The same thing that’s wrong with you. I just know it and admit it, making me more spiritual than you are…uh…sorry - erase that.

But it’s true about how we are all attracted to selfishness and the temporary enjoyment of it. There is something in all of our minds that causes us to bask in doing it right, trying harder and succeeding, and in being better than most other Christians.

Why do you think Jesus was a friend of the winebibber and sinners?

Was it because He affirmed them in their sin?

Of course not!

Was it because He didn’t care about their sin?

You’re kidding!

It was because they knew their sin and also knew that, if anything depended on them and their goodness, they were lost. Those are the kinds of people with whom Jesus hung out. The people He got ticked off at were the religious ones who thought they were better than others.

The kind of attitude I manifested this morning is the kind of thing that causes division, condemnation and destruction in the body of Christ.

It is the manifestation of having our own righteousness (i.e. our purity, correctness, knowledge or reputation) to protect – and anytime we do that we’re in trouble and cause trouble everywhere we go.

This morning I obeyed the law. I got up early and spent a lot of time with the Lord. I felt self-righteous and spiritual.

But what am I going to do when I sleep in, think I don’t have time to pray or don’t even feel much love?

He told me this morning that it is far better to sleep in and forget about praying than it is to get up, be spiritual and to bask in self-righteousness that comes from doing it.

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Truth In Advertising

I went by a church the other day that had a small billboard by the entrance steps. All I could read from the street was the top line: “Our Beliefs”.

It got me thinking that there are many ways we Christians like to advertise our churches. We use websites and bulletin inserts stating what we believe. Our pastors tell the congregations from the pulpit and individual church members tell their friends what they believe. Underneath the rhetoric, however, things often look a little different from the lofty terms we use to describe ourselves. Here are a few examples that might look familiar.

WE STAND ON GOD’S LAW
[Caution – this phrase can mean: Jesus taught us to forgive those who sin against us, but we get a bigger kick out of beating others over the head with the law. Better not let the church find out about one of your sins, or you’ll find out what we mean.]

WE ARE A BIBLE-BELIEVING CHURCH.
[Caution – This phrase can mean: We use the Bible to control people’s lives and keep them under our thumb. We oppose serious scholarship; the Bible means whatever we say the Bible means. If the King James Version was good enough for Jesus, it’s good enough for us.]

WE ARE A SPIRIT-FILLED COMMUNITY.
[Caution – This phrase can mean: We are a three-ring circus. We act any crazy way that strikes us spiritual at the time and say the Holy Spirit is behind it. The Spirit loves to make people look like fools – haven’t you heard?]

WE BELIEVE IN STRONG FAMILIES.
[Caution – This phrase can mean: Problem families are not welcome. If you want to stay, make sure you are good at pretending everything is OK at home.]

WE BELIEVE IN SALVATION BY GRACE THROUGH FAITH.
[Caution – This phrase can mean: For those who follow our rules, that is. Grace is for the righteous and hell is for the sinners. If we find out you’ve been sinning, you’ll wish we hadn’t.]

WE ARE COMMITTED TO YOUNG PEOPLE.
[Caution – This phrase can mean: As long as they don’t screw up. If they do, we’ll drop kick them out of here. We don’t want bad influences hanging around our kids.]

What if we dumped the rhetoric and admitted we’re just a collection of people who still sin as Christians but have found that God still loves us anyway? Here’s an ad I’d like to see a church place in a local newspaper:

WOULD YOU LIKE TO TRY OUR CHURCH?

Don’t come to our church if you think it’s better than all the others. It isn’t. It’s just a church. It will let you down. It might even break your heart. But know this: You’re welcome here. We all still sin. Every one of us. If you’re a sinner too, you’ll be right at home.

Sometimes we are judgmental. Sometimes we stick our self-righteous noses in each other’s business. Sometimes we gossip about each other and spread nasty rumors. Sometimes we’re insensitive, sometimes we’re too busy for each other and sometimes we’re downright obnoxious.

Sometimes we fight over doctrine, Sometimes we fight over money. Sometimes we just fight.

So why come to our church?

Because in spite of us, Christ is here. He comes to live in us as Christians and he loves us in spite of ourselves. He’s making us into something good, even though we don’t see much of it. Sometimes his love shines through us. Sometimes we are kind, caring and supportive of one another. Sometimes we make a positive difference in people’s lives in our city. And Christ would do those things through us even more often, except that we can be too selfish to let it happen. We do sin at times, yes, but we are learning to trust in Christ to forgive us and help us love others better. If you sin too, you’d fit in here. So why not drop by?
Our Slogan: Thank God He Is Merciful – Even To This Bunch!

The church today lives in a world of advertising, so we advertise. Trouble is, when the church gets into advertising, it tends to use the same tricks all advertisers use: Depict the competition’s products as bad and yours as good. Don’t mention the problems with your product. Exaggerate any perceived good qualities of your product. Promise great satisfaction – whether you can deliver it or not.

To be fair, we know what we ought to be like, and so we try to describe ourselves that way with plenty of good intentions of living up to it. The problem is, we never seem to be able to actually BE the way we describe ourselves.

Maybe part of the problem is that we are advertising the church instead of advertising the gospel. Does the average sinner need to know what a good church we think we have, or do they need to know that God loves them in spite of their sin? Maybe they need to know that they can trust God to give them a new life in Jesus Christ. Maybe we don’t need to convince them what a good church we have – only what a good God they have.

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Why Should God Let Us Into Heaven?

I am not ashamed of the gospel, because it is the power of God for the salvation of everyone who believes . . . " (Romans 1:16).

I have often heard that the best question about God to ask anyone, Christian or non-Christian, is the following:
“If you stood at the door of God's heaven and knocked, and Peter, opening the door, asked, ‘Why should I let you in?’ what would you say?”

Essentially, that was the very issue which troubled a conscientious young priest nearly 500 years ago. His father was a copper miner who lived and worked near Mansfeld, Germany. But Hans Luther had greater goals for his son Martin. After completing his bachelor's degree at the University of Erfurt, Martin entered the Augustinian monastery, a decision which appalled his father.

In the monastery Luther sought to find God's favor through self-denial. There he prayed, he flagellated his body, he denied himself sleep and food and the amenities of life, yet there was no peace. He struggled with the issue of what is necessary to really please God. Recognizing his potential, the Augustinians sent Luther to Wittenberg to study for his doctorate, which he earned in 1511. Then he was appointed as a professor of biblical theology, a position which he retained for the rest of his somewhat troubled life.

Luther's study of the book of Romans first caused him to question the dogmas of his day - keeping the ordinances of the church and being faithful in good works. But the issue of how we find favor in the sight of God came to a boil in 1510 when Luther was sent to Rome on official church business. There Luther was repulsed by the practice of selling indulgences in the streets to pay for the opulence of St. Peter's, which was then under construction. An indulgence was simply a piece of paper which you bought, which allegedly brought forgiveness for sins that you would commit in the future.

Convinced that indulgences were wrong, biblically and practically, Luther was deeply distressed. Going to the Church of the Scala Sancta or the Sacred Steps, Martin Luther began his pilgrimage as did thousands of others crawling up the steps, one at a time, kissing them and praying the rosary.

But what you may not know is that these steps were no ordinary walkway. Thought to have been the very steps that Jesus ascended as He made His way into Pilate's judgment hall, faithful devotees had brought them to Rome, where they had become a token of veneration and worship.

As Luther worked his way up the steps, the text of Romans 1:17, like rolling thunder in a summer storm, kept going over and over in his mind: "The righteous will live by faith." It was the phrase, "by faith," that spoke so loudly. In the midst of this act of devotion, Luther rose from his knees, never to be the same. The question confronting Luther is absolutely valid today. How do you find salvation before a holy, righteous God? Is it through what you do, or what Christ did? Through keeping the law? Through going to church or giving to the poor? Or what?

Luther found satisfaction through the message of the New Testament- specifically, what Paul wrote. As Paul wrote to the young man, Titus, "He saved us, not because of righteous things we had done, but because of his mercy. He saved us through the washing of rebirth and renewal by the Holy Spirit" (Titus 3:5). Luther's struggle is every person's struggle, for sooner or later every man, every woman, every child stands before a righteous Holy God. As the New Testament clearly asserts, Luther believed that salvation is God's free gift, not the reward a person gets for being good.

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