Archive for June, 2007
Be careful this weekend and next week
Friday, June 29th, 2007Article: Banks May Rescue Defaulting Homeowners
Thursday, June 28th, 2007Banks May Rescue Defaulting Homeowners is a guest post on Five Cent Nickel. The premise of the post is basically that banks are rewriting loans to borrowers at risk of default not to help the borrowers but to cover their own mistakes.
I think that banks are going to have to take their lumps on some of the houses, but it’s possible that letting borrowers with either equity or stable employment re-write their loans (for longer terms or different payments) might help stabilize some of the “shock” that housing prices are feeling. Flooding the market with houses that don’t sell isn’t really helpful to anyone.
Article: Good Times, Bad Mood; What are Americans so grumpy about?
Thursday, June 28th, 2007Good Times, Bad Mood says that we’re really in a good economy (unemployment at 4.5%, stock market high, inflation low) but we seem to be in a funk anyway.
One reason is that we’ve gotten so accustomed to prosperity that we take it for granted. From 1971 through 1997, the unemployment rate never once fell to the level we now enjoy. In the 1970s, annual inflation was frequently in double-digits. Recessions used to come along every four or five years, but since 1991, we’ve had only one downturn, a mild one back in 2001.
Another reason for the pessimism is that we mistake the few bad indicators for a broad trend. When gas prices soar, it’s tempting to conclude that we’re on the verge of economic turmoil so awful that we will soon be eating tree bark to stay alive. Never mind that other prices are reasonably stable, and that the national economy has absorbed higher fuel costs without too much strain.
In one sector where prices have been dropping, of course, the trend is taken as cause for panic: home sales. But what is bad for home sellers is good for home buyers. Most of us are both, which makes the whole phenomenon pretty much a wash.
CNNMoney: Out of touch with realty reality
Friday, June 22nd, 2007Despite turmoil in the housing markets that includes record foreclosure numbers, mortgage rate increases and home price depreciation, homeowners don’t believe there’s a real estate slump, according to a new poll.
Most – 55 percent – are confident that their homes continued to increase in value compared with a year ago, according to a nationwide telephone survey conducted this month by The Boston Consulting Group (BCG), a business and management strategy firm.
Wow. I bought my house in 2004 and figure it appreciated that year (mostly due to improvements, not to the market). I have some more repairs to make which should increase the price, but I don’t think the base price is up much if any over what I paid (2004 up, 2005/6/7 down, comes out about even).
Article: Foreclosures drift to Sun Belt from Rust Belt
Tuesday, June 19th, 2007An article in CNN Money today: Foreclosures drift to Sun Belt from Rust Belt
A study for CNNMoney.com by RealtyTrac, an online marketer of foreclosure properties, showed that 139 of California’s ZIP codes fell within the top 500 for total foreclosure filings in the United States. The next highest count for any state is less than half that at 72 and is in another sun-belt state – Florida.
They go on later to say:
The number one ZIP code in the nation for foreclosures is still, however, in the Rust Belt. It’s Cleveland, 44105, with a total of 784 filings during the three months ended June 15, according to the RealtyTrac study.
Heck, who wants to live in Cleveland.
I’d like to see these numbers as a percentage of SFH (single family homes) in each zip. I imagine there might be some hard-hit zip codes in less populated areas. CA and FL win because they’re heavily populated.
Foreclosures in Southeast Minneapolis
Monday, June 18th, 2007CNNMoney: New Ideas From Dead CEOs
Friday, June 15th, 2007CNN Money provides ten examples from the book New Ideas From Dead CEOs. Interesting “lessons for today” on each one.
From the book description at Harper Collins:
The featured CEOs in this book were not candidates for sainthood. Many of them knew “god” only as a prefix to “dammit.” But they were devoted to their businesses, not just to their egos and their personal bank accounts and yachts. Extraordinarily fresh and deeply thoughtful, Todd G. Buchholz’s New Ideas from Dead CEOs is a truly enjoyable and fun—yet serious and realistic—look at what we still have to learn and absorb from these decomposing CEOs.
WSJ: Behind the Scenes While Selling a House
Thursday, June 14th, 2007The Wall St Journal has a series called Hitting the Market about a columnist trying to sell her home.
Interesting series so far, I think she’s a little optimistic about how fast it will sell, but her market may be hotter than the rest of the country…
High Interest Savings Accounts
Wednesday, June 13th, 2007I keep the bulk of my emergency money in a savings account with HSBC Direct (5.05% APY right now) and the rest in a money market attached to my checking account (which gives me free overdraft protection). It can take a few days for HSBC to transfer money, so the MM account gives me immediate cash for anything that doesn’t take credit cards and can’t wait a week.
But if I were opening an account today, I’d go with GMAC. There is a $500 minimum balance, but the rate is 5.30% APY. They have some good tips on the opening page (How to maximize your FDIC insurance for example if you have lots of cash hanging around). Plus a tip that changes on the side:
Try to do your grocery shopping during off peak hours. This will not only save you time, but will also mean less time waiting at the cash register where all the compulsive buy items are placed.
Nice of them. I suspect that the 5.30% rate is promotional and it will drop back around five, so I’m not rushing to open an account.
Tuesday, June 12th, 2007
Can Entrepreneurship Be Taught? Interesting question. I wish I had more education about financial stuff, and less about which president came in which order (and other things I could look up easily). I mean, I’m not bad at math (as long as I have paper and pencil, or a calculator) so balancing my checkbook was easy, but I had no idea about taxes, retirement accounts, real estate, etc. I’m not sure how you’d teach that sort of thing in school, but we could have had a few examples of compound interest in math class. For example a couple questions about saving for retirement and a couple about how much you spend by paying the minimum on your credit cards. If we had ten minutes of that every couple weeks for a few years, it might have sunk in.
I also wish my college had an accounting course. And maybe one basic business course as well. I think they would have gotten enough students to fill it easily. Doesn’t everyone dream of starting a business at one point or another?