This from my friend Mark…

Current military families may be eligible to receive free services from FamilyTreeLoans.com.

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“DETROIT (CNNMoney.com) — Most people assume the Packard Plant in Detroit is vacant. It’s an industrial ruin where the last car was manufactured 53 years ago.

Almost all the windows are blown out. Collapsed walls litter the overgrown sidewalks with broken bricks, mixed with charred metal and shattered glass.

But one tenant remains headquartered among the vines, rust and graffiti. Where 11,000 employees once clocked in, now just 10 workers for Chemical Processing Inc. show up each morning.

See photos of the Packard Plant ruins

Running a business in a facility widely assumed to be deserted has its challenges. The address surprises customers. The landlord doesn’t make repairs. And sometimes, scrappers steal your power lines.

It’s happened to Chemical Processing President Bruce Kafarski a half-dozen times in past two years. “People kept cutting down the electric lines for the copper,” he says. “The city would replace the lines with aluminum, but the scrappers wouldn’t know that till they got them down and looked. We’d be left for a day or two without power.”

Kafarski is remarkably unfazed by this. He’s equally calm about the fires.

Detroit has an arson problem — one that peaks each year in late October. This Friday, the night before Halloween, is known locally as Devil’s Night, an evening when firebugs take to the streets to torch empty buildings. In the ’80s and early ’90s, it really was hellish, residents say. As many as 800 dwellings went up in flames each year. Then the city cracked down and began marshaling thousands of volunteers to patrol the streets. The fire count fell — a bit.

But at the Packard Plant, any day can be Devil’s Night.

“During the summer the Detroit Fire Department was going there almost every day,” says Jason Frattini, a firefighter with the nearby city of Eastpointe who sometimes goes by with his camera to document the Packard Plant blazes.

In this vast, 3.5-million-square-foot labyrinth, small fires turn into big ones before anyone takes notice. But Chemical Processing has stayed safe from the flames. When something ignites nearby, Kafarski and his workers intervene. Last summer, for example, Kafarski found a fire smoldering just one floor above.

“There happened to be a pool of water nearby,” Kafarski says. “I got a cup and a bucket. It was pretty easy to put out.”

After 51 years in the Packard Plant, it takes a lot to ruffle Kafarski.

His father started the company in a garage just after World War II, joining Detroit’s mass of independent auto suppliers. Chemical Processing specializes in industrial finishing services, coating small metal parts like car door latches and gears. Work for Ford’s (F, Fortune 500) suppliers brings in a big chunk of the company’s sales.

When Packard Motor Car Co. merged with Studebaker and shut down its Detroit plant, other industrial firms took up residence in the cavernous space. In the 1960s, Chemical Processing had around 90 employees working three full shifts. Its neighbors included shipping companies, manufacturers and dozens of other auto suppliers.

But the plant was too vast for the city once it began losing its industrial base. By the late 1990s, it had become a decaying eyesore the city wanted to demolish. After a long court battle, the city foreclosed on the owner for unpaid taxes and seized control of the building. In 1997 it ordered the remaining 87 tenants to leave. Most did.”

No, 2010 will see an increase in spending on vacations. People will have more time to vacation because work hours are going to be shortened to incent more people on the payroll. I predict the American standard work week will begin to look more like Europe - 30-35 hours. That forced vacation time will increase. “Furlong” will be a 2010 term.

Americans may begin to travel and vacation like Europeans. Resort owners call Europeans ‘aligators’ - because they tend to stick close to their longer term vacation rentals, they do less and lay in the sun more than Americans while on vacation. Americans run around and see and “do” stuff on vacation, frantically fitting more into a 7-10 day annual break. Europeans spend much less per capita on vacation, but they spend more time in one place.

Yes, America will be much more European in 2010. We will go for longer vacations and eat in on those nights. Look for resorts that offer rooms with kitchens or fridges to be more popular. Discount rates for longer term stays to attract more U.S. travels who have been told - ‘enjoy life’.

I have spent a fair amount of time in Flint (and neighboring Detroit & Pontiac) and there are simply too many vacant and derelict homes, some are being squatted, some are crack dens, some are dog and rat houses, most are just half burned and fourth world.

Recycle the good wood, brick and steal and burn the rest in an incinerator. When I was 10 or 11 years old, I visited my grandparents who lived in a Detroit neighborhood on devil’s night. I remember vividly the fires, and their neighbors watching a house down the block burn - cheering the flames on. I learned later in life that this was a ‘drug house’ and one of many. The flames were getting rid of a cannon ball that was sinking the neighborhood into drive by shootings, drug dealers on corners, theft and generally unsavory folks.

After the home was reduced to charcoal, the criminal types moved to a different street. Devil’s night was an excuse for neighborhood renewal. Now, I’m not advocating arson or the burning of homes, I’m simply relating a story from the ‘olden dayz’ as I remember from my childhood. That’s how problems were solved in the wild west of Detroit in the economically depressed days of the early 1980’s.

Tomorrow night is Devil’s night, and Detroit’s former Mayor Kwame Kilpatrick has flown back to town (from his Texas mansion) - is the irony lost on me? Detroit at the turn of the 20th century was called the Paris of the Midwest and ‘the city of trees’. It was considerably more beautiful than 1900’s smelly Chicago (which means ’smelly onion’ in Native Indian). Chicago had a horrible fire and was rebuilt. Rome had Nero and Nero had a fiddle.

Maybe someone needs to get Kwame  a guitar?

Without a good ‘year end’ of deal making, the Holiday parties are more like a wake.

It’s time, hunting season is open, and the deals are priced right. Interest rates are as low as they were in 2003 and there’s liquid money sloshing around in the banking system.

We noticed a trend that began last ski season, there were a lot of white collar execs who were ‘down sized’, started their own consulting practices and spent more time on the slopes or golf course in 2009 than in the past decade. People suddenly had time to live life and enjoy. I noticed more empty parking spaces at the mall and office parks this summer. But a couple weeks ago, I could get a table at lunch (in 2 restaurants) on a Tuesday. The coffee shop was full this morning. People looked business. There were discussions of ‘deals’ and ‘upcoming closings’.

My wife and I went open housing this weekend, the driveways were full, we had to park down the street at several houses. Could people be out looking to buy? Mortgage lenders will tell you, pre-approval applications are at all time highs. People are getting ready to ‘deal’.

There is momentum and the season is upon us. Congress should pass broader tax incentives for home buyers to stoke the flames. If they do, the Holidays parties might be worth attending in 2009.

It time to tie up a good year, cheers!

I have always felt people who play the lottery are getting suckered into an unfair gamble, the odds are obnoxiously absurd against success, millions-to-one against your gain. Even the lottery advertises this fact ’somebody’s got to win’ is the best defense the ad campaign can muster.

So is the stock market any better? The last year has proved that it is not a zero-sum game. Someone doesn’t always win when someone else loses. Money invested in the stock market from July 2008-2009 was a loser bet, everybody sitting at that casino table stood greater odds of a loss than a gain, and the great majority of people lost more than they may have gained in that game over the past 10 years. The S&P was even over a 12 year period. It was as if a stock investor said in 1997 “here’s my $100,000 today for a cheeseburger in 2009.” Whimpy looks like a better investment.

Let know one be fouled stocks have substantial risk. Why? Because you are betting on something on which you have no control and thousands of data points can swing the results. You rely on the actions or in-actions of thousands of people: the company’s management, the company’s employees, the company’s competitors, suppliers, regulators, the other investors, the speculators, the traders, the foreign currency swings. The odds are stacked radically against your influence and control.

At least in the casino there are better odds.  52 cards, maybe 3 decks, so a 1-in-52 chance that the next card will be the card you want/need. Even Roulette, the worst of the casino games has better odds of your controlling the out come.

I don’t gamble, but I have made and lost more than a couple million of dollars in the stock market in the last 20 years. No exaggeration. I built up a nice war chest before 2000, and lost it all and then some in 3 months. Again, I was on a roll going into last summer with some great bets on bank stocks. I had learned my lesson in the dot-com boom. In 2003-2009 I would only bet on companies I knew and understood their business very, very well. I only invested in banks and real estate related firms.

Lesson learned. Only invest in things you have control over. Real estate is a long term asset, a buy and hold, no fast buck.

In rental homes, you have 1 bet, ‘will my tenant pay me rent this month in order to keep a roof over their family’s head?’ It’s simple. If they pay you win, if they don’t you have to find some one who will/can pay rent this month. Long term, you hope to have picked a home in a place someone will want to live 5-10-15-20 years from now.

Real estate prices are down. There is blood in the streets. I sold the last of my rental houses in 2004, it was a great business, but the rents were too low compared to the home values. There is a cycle to the real estate market. It is a long wave, not a short blip. Interest rates effect real estate values, the lower the rates, the higher the values -historically. If rates rise, home values could stay low. Rates will likely rise if we see rapid inflation. Inflation will raise home prices and rents.

Rents have risen since 2008, home values are down to 1990 price level. If indeed inflation is coming, real estate is historically a shelter in the storm. Tax incentives will make real estate even more interesting. The government will continue to prop up the housing market, it is a huge portion of our economy.

I am researching Real Estate IRAs (also known as Self-Directed IRAs). When I find the right provider, I plan to roll most of my traditional IRA to this vehicle and start buying rental homes again. We have a bank willing to lend up to 70% LTV - no recourse - on these homes. This means a $100,000 IRA can buy $333,000 worth of homes.

All rents go back into your Real Estate IRA tax deferred, any gains from sale would as well. I may even start buying an occasional lottery ticket.

It sounds like an exciting proposition, as the most important thing today is control.

So here is my next big idea: “Welcome the Suit Case Cash”. I have heard from several seasoned Miami area Realtors that they have buyers from S. America, Russia, and African countries who are fleeing unstable currencies and markets. These wealthy foreigners are showing up in Miami with suitcase cash like in the 1980’s.

Our media has been trumpeting the possible inflationary effects against a strong dollar, but compared to the double digit (or hyper) inflation in developing countries, our meager 0.1-5% annual inflation is a windfall.

Let’s build an advertising campaign in the developing world to welcome wealth to the US? Let’s tout our lifestyle, safety, security, long-term stable markets, our luxury real estate and our legal system (that does work by comparison)?

It’s time to market America to the foreign capital around the world! It’s time to invite the suit cases full of cash to come buy our luxury condos, which are deeply discounted to even cost. The ad campaign should feature cities like Miami, Detroit, Vegas, and San Diego. Why buy in these spots? Deals, deals, Deals! Buy it for less than it can be rebuilt.

Temporary residents are the best residents. They come, they play, they pay, and they leave without using our school systems, medical services, and other government services - leaving more for the citizens. Wealthy foreigners cash raises all boats.

If you are out of work in Detroit, and a Russian citizen buys a home to ’summer in Detroit’, he will likely want a grounds keeper, maid, butler, and to throw some summer parties on this estate. Why would he buy a summer home in Detroit you ask? This 5 bedroom estate home will cost him less than $300,000 and is within a 10 minute drive of new Tiger Stadium, a yacht club, Ford Field, The brand new Opera House, and several luxury malls. It is in a gated community and has large inground pool and estate like grounds. It once was home to a bishop, a basketball star and is made of 1920’s brick with leaded windows. And yes, that Russian millionaire could buy it for less than $300,000 today - in Detroit.

http://www.realtor.com/realestateandhomes-detail/885-W-Boston-Blvd_Detroit_MI_48202_1112906670

Second Home in Detroit? Yes, maybe… The same home in Moscow, San Paolo or Bogota would be 5x more.

Another way to increase demand is to reduce supply. People want scarce things, things that are scarce are ‘valued’.

So, in part 2, let’s explore some easy ways to limit the supply of homes:

1. the banking system has already stopped lending to new construction projects, heck, we aren’t even lending to many half finished projects. This has constricted supply of new inventory and will for the foreseeable decade to come. No new building.

2. Municipalities have a wonderful chance to create new park land, consolidate development areas, increase density (walk-ability), land use and conservation, and revamp zoning. Governments should ‘buy up’ strategic property now, as these actions will increase the value later.

3. Creative deconstruction. The US housing stock is on average 45 years old. My opinion is that many homes built before 1970 are actually better made, but this statistic does lead one to wonder if ‘recycling’ much of the housing in our country isn’t warranted? For every new home that is permitted, maybe one somewhere should be taken apart? Much like wetland mitigation.

4. Encourage vacation home ownership. Yes, many of the homes that are vacant today were envisioned to be ’second homes’ (condos). Seeking out foreign citizens to buy these homes as their ‘cottage in America’ using a special Visa and may be an incentive that would sell thousands of condos. Foreign buyers are the best, because each offshore dollar into US real estate balances our trade deficit, pays US property tax burdens and increases their spending in our retail market. The US railroads were built by foreign capital, and the railroads served the growth of our Nation well.

Real estate is the one product that can’t be imported or exported. When some one buys real estate, the US Government (local & federal) is assured that tax payments will be made.

Real estate is also the largest employer in the US. Creating new jobs to ‘recycle housing’, finish partially constructed housing, redesign/configure (green) old housing, or turn existing housing into parkland, green space or ethanol fields is good work for Americans.

All of this increases US government tax receipts without increasing the burden on tax payers.

I have always thought that summed up the mortgage brokerage business in the early Roaring 2000’s. Low rates, low fees, low credit scores, low underwriting standards, low degree of common sense, low intellect, low level of professionalism, low down payments, low foresight for risk… LOW.

The only thing that wasn’t low, were these ladies’ income. They made a killing I’m told. Some how I missed a lot of the gravy train in the mortgage business, as I avoided sub-prime lending: high rates = big paychecks. These borrowers had sub-standard credit histories, measured by a FICO or Fair & Issac Company credit score. A score below 620 has traditionally been considered sub prime.

You could historically look at a credit report and see why a score would be low, a pattern of missed payments, defaulted debt, foreclosures, repossessions, tax liens, judgements - all pointed logically to a lending decision which should only be made with great caution.

But as credit markets have tightened, FICO has changed its core calculations - making basically good credit look even worse. The line between a true credit criminal and a 1×30 day late borrower has blurred at the score.  Recently, I saw a borrower’s credit that had just one late mortgage payment in 10 years of absolutely perfect history - the score was 569. A score of 569 used to mean a deadbeat, not someone who missed the mailman.

It’s been estimated that by this time next fall, over 40% of Americans will have a sub-600 or sub-prime FICO score under the present method of measurement. What does this really mean?

Since FICO is now used to adjust your auto insurance premiums, profile candidates for jobs, offer credit in all forms - it simply means the division between the “haves and have nots” will become more vast without a re-thinking of FICO requirements.

Maybe its time to abandon FICO scores in favor of commonsense?

FICO was meant to determine risk, and rightfully, we are all much more at risk today of default, bankruptcy and financial as well as social ruin. “Oh how the mighty have fallen in the last year…” It’s hard for me to argue that FICO shouldn’t start painting the good as the bad, but the results will not gain the social result of recovery that we all must wish and work toward.

As your credit options, and employment options disappear - your ability to climb out of a hole is that much harder. Your cost of living will rise without a prime FICO score. Consumers will cut back on purchases, homes will not be purchased, cars will not be sold, Holiday gifts will stay on store shelves.

The credit industry will need to rely less on FICO and other credit scores, and actually go back to making common sense decisions about people’s ability and intention to pay debts. Without this, we are all doomed to further and further down cycles…

1. Inflation. As the ‘real value of the US Dollar’ declines, because of monetary stimulus, skyrocketing deficits etc. Inflation will occur as soon as the economic outlook improves significantly. Inflation raises the price of ’stuff’ and historically real estate benefits as a safe haven from inflation.

2. Hedge Funds and Private Equity. Billions are sitting ready to pounce on real estate deals. Money is starting to flow into deeply discounted deals.

3. Foreign capital seeking a safe haven. Yes, the US dollar may fall with domestic inflation, but far less than the inflation that may occur in the developing world, where many nations have ’stimulated’ their economies too. The US real estate market is a safe haven.

4. Tax incented consumers. The Congress will extend, and enlarge the home buyer tax credit in November. This will ignite a flurry similar to the Cars for Clunkers program. Why? it will be simpler, and broader and maybe richer.

5. Artificially low interest rates. Yes, rates are back at record lows again - 4.99% today on a 30 year fixed.

6. Banks starting to lend. Yes, again… its beginning to flow…

Am I being too bullish? Re-read this blog entry in 6 months, the Dow is about to break 10,000 - in October 2009. In April of 2009 I said, ‘by the fall’ the money would re-inflate the stock market first… it takes markets 6-9 months for the butterflies wings to create tsunamis.

In this cycle, the tsunamis of cash injected in our economies will create rising oceans of market prices.