[Deal Hunter]

I wouldn’t read too much into the rally. Before the boom times hit again the DOW will dip to 10,000 or less. At least one, perhaps 2 big banks will close up shop (JP MOrgan on the inv bank side and perhaps Wells Fargo or Citigroup on the commercial bank side).

There will be a massive tax reform and some level of privitizaion of social security. The tax reform will boost the housing market or level it off and the privitazation of ss will boost the stock market.

The double edged sword will be that once social security is in private hands, politicians and fed reservists will no longer be able to manipulate money supply and interest rates as easily as they did in the past. This is not altogether a bad thing, though.

[Deal Hunter]

I saw the bubble in housing right after I bought my home in Redondo Beach, CA. We bought the house for $412K and just 1 year later it appraised for $597K. Of course, we cashed out and bought a couple of rentals in Las Vegas. This was 2001.

I began to fear the bubble would burst when Bush came out with his Advisory Panel on Tax Reform in 2005. http://www.taxreformpanel.gov/

In it they proposed permanent tax cuts, privitization of social security AND the elimination of the mortgage interest deduction for primary home owners. I thought if the mortgage interest deduction were to be eliminated, first there would be a deadline set (or grandfathering of loans prior to a set date – like with the change in bankruptcy law.

Then, there would be a surge of homebuying/refinancing as people try to get into the largest mortgage they could to secure their deduction before the deadline. There would be a boom and a catastrophic burst following as motivation for buying and incurring large mortgages would no longer be tax advantaged.

Well, the tax reform didn’t happen that way, but the credit crunch had the same effect. I did think something would happen just prior to the election. The writing was on the wall for a lot of things. The only head-scratcher for me is how much housing is blamed for the crunch when only 9% of all mortgage loans in 2006 were subprime and only 12% in 2007.

[Deal Hunter]

I saw the bubble in housing right after I bought my home in Redondo Beach, CA. We bought the house for $412K and just 1 year later it appraised for $597K. Of course, we cashed out and bought a couple of rentals in Las Vegas. This was 2001.

I began to fear the bubble would burst when Bush came out with his Advisory Panel on Tax Reform in 2005. http://www.taxreformpanel.gov/

In it they proposed permanent tax cuts, privitization of social security AND the elimination of the mortgage interest deduction for primary home owners. I thought if the mortgage interest deduction were to be eliminated, first there would be a deadline set (or grandfathering of loans prior to a set date – like with the change in bankruptcy law.

Then, there would be a surge of homebuying/refinancing as people try to get into the largest mortgage they could to secure their deduction before the deadline. There would be a boom and a catastrophic burst following as motivation for buying and incurring large mortgages would no longer be tax advantaged.

Well, the tax reform didn’t happen that way, but the credit crunch had the same effect. I did think something would happen just prior to the election. The writing was on the wall for a lot of things. The only head-scratcher for me is how much housing is blamed for the crunch when only 9% of all mortgage loans in 2006 were subprime and only 12% in 2007.

[Deal Hunter]

I saw the bubble in housing right after I bought my home in Redondo Beach, CA. We bought the house for $412K and just 1 year later it appraised for $597K. Of course, we cashed out and bought a couple of rentals in Las Vegas. This was 2001.

I began to fear the bubble would burst when Bush came out with his Advisory Panel on Tax Reform in 2005. http://www.taxreformpanel.gov/

In it they proposed permanent tax cuts, privitization of social security AND the elimination of the mortgage interest deduction for primary home owners. I thought if the mortgage interest deduction were to be eliminated, first there would be a deadline set (or grandfathering of loans prior to a set date – like with the change in bankruptcy law.

Then, there would be a surge of homebuying/refinancing as people try to get into the largest mortgage they could to secure their deduction before the deadline. There would be a boom and a catastrophic burst following as motivation for buying and incurring large mortgages would no longer be tax advantaged.

Well, the tax reform didn’t happen that way, but the credit crunch had the same effect. I did think something would happen just prior to the election. The writing was on the wall for a lot of things. The only head-scratcher for me is how much housing is blamed for the crunch when only 9% of all mortgage loans in 2006 were subprime and only 12% in 2007.

[Deal Hunter]

I saw the bubble in housing right after I bought my home in Redondo Beach, CA. We bought the house for $412K and just 1 year later it appraised for $597K. Of course, we cashed out and bought a couple of rentals in Las Vegas. This was 2001.

I began to fear the bubble would burst when Bush came out with his Advisory Panel on Tax Reform in 2005. http://www.taxreformpanel.gov/

In it they proposed permanent tax cuts, privitization of social security AND the elimination of the mortgage interest deduction for primary home owners. I thought if the mortgage interest deduction were to be eliminated, first there would be a deadline set (or grandfathering of loans prior to a set date – like with the change in bankruptcy law.

Then, there would be a surge of homebuying/refinancing as people try to get into the largest mortgage they could to secure their deduction before the deadline. There would be a boom and a catastrophic burst following as motivation for buying and incurring large mortgages would no longer be tax advantaged.

Well, the tax reform didn’t happen that way, but the credit crunch had the same effect. I did think something would happen just prior to the election. The writing was on the wall for a lot of things. The only head-scratcher for me is how much housing is blamed for the crunch when only 9% of all mortgage loans in 2006 were subprime and only 12% in 2007.

[Deal Hunter]

I saw the bubble in housing right after I bought my home in Redondo Beach, CA. We bought the house for $412K and just 1 year later it appraised for $597K. Of course, we cashed out and bought a couple of rentals in Las Vegas. This was 2001.

I began to fear the bubble would burst when Bush came out with his Advisory Panel on Tax Reform in 2005. http://www.taxreformpanel.gov/

In it they proposed permanent tax cuts, privitization of social security AND the elimination of the mortgage interest deduction for primary home owners. I thought if the mortgage interest deduction were to be eliminated, first there would be a deadline set (or grandfathering of loans prior to a set date – like with the change in bankruptcy law.

Then, there would be a surge of homebuying/refinancing as people try to get into the largest mortgage they could to secure their deduction before the deadline. There would be a boom and a catastrophic burst following as motivation for buying and incurring large mortgages would no longer be tax advantaged.

Well, the tax reform didn’t happen that way, but the credit crunch had the same effect. I did think something would happen just prior to the election. The writing was on the wall for a lot of things. The only head-scratcher for me is how much housing is blamed for the crunch when only 9% of all mortgage loans in 2006 were subprime and only 12% in 2007.

[Deal Hunter]

Another way I’ve seen it done is:

– Take 1 year of mortgage interest and divide by 3200.
– The result is the number of dependents you can exclude on your W4. (for example, $32,000 of mortgage interest is like having 10 dependents.)
– Take extra amount you will receive from each paycheck and multiply by the number of paychecks you get in 1 year.
– Result is the part of your tax refund from ownership of that property (and having the deductible mortgage interest).

If you want the extra cash each paycheck, you simply change your W4 with the new exclusions. Note: If you do this, your refund at tax time will be smaller.

[Deal Hunter]

Another way I’ve seen it done is:

– Take 1 year of mortgage interest and divide by 3200.
– The result is the number of dependents you can exclude on your W4. (for example, $32,000 of mortgage interest is like having 10 dependents.)
– Take extra amount you will receive from each paycheck and multiply by the number of paychecks you get in 1 year.
– Result is the part of your tax refund from ownership of that property (and having the deductible mortgage interest).

If you want the extra cash each paycheck, you simply change your W4 with the new exclusions. Note: If you do this, your refund at tax time will be smaller.

[Deal Hunter]

Another way I’ve seen it done is:

– Take 1 year of mortgage interest and divide by 3200.
– The result is the number of dependents you can exclude on your W4. (for example, $32,000 of mortgage interest is like having 10 dependents.)
– Take extra amount you will receive from each paycheck and multiply by the number of paychecks you get in 1 year.
– Result is the part of your tax refund from ownership of that property (and having the deductible mortgage interest).

If you want the extra cash each paycheck, you simply change your W4 with the new exclusions. Note: If you do this, your refund at tax time will be smaller.

[Deal Hunter]

Another way I’ve seen it done is:

– Take 1 year of mortgage interest and divide by 3200.
– The result is the number of dependents you can exclude on your W4. (for example, $32,000 of mortgage interest is like having 10 dependents.)
– Take extra amount you will receive from each paycheck and multiply by the number of paychecks you get in 1 year.
– Result is the part of your tax refund from ownership of that property (and having the deductible mortgage interest).

If you want the extra cash each paycheck, you simply change your W4 with the new exclusions. Note: If you do this, your refund at tax time will be smaller.

[Deal Hunter]

Another way I’ve seen it done is:

– Take 1 year of mortgage interest and divide by 3200.
– The result is the number of dependents you can exclude on your W4. (for example, $32,000 of mortgage interest is like having 10 dependents.)
– Take extra amount you will receive from each paycheck and multiply by the number of paychecks you get in 1 year.
– Result is the part of your tax refund from ownership of that property (and having the deductible mortgage interest).

If you want the extra cash each paycheck, you simply change your W4 with the new exclusions. Note: If you do this, your refund at tax time will be smaller.

[Deal Hunter]

The numbers are not even close. The US bank write-offs are $1 Trillion so far. Remember LTCM? That was also $1 Trillion and that was just one hedge fund. We’re talking about the total of $11 Trillion in mortgage debt in the top 5 US banks.

As of January 2008, write offs are estimated to be $244 Billion from subprime and $700 billion from derivatives. My bets for banks that will close shop this year are Morgan Stanley and Citigroup.

[Deal Hunter]

The numbers are not even close. The US bank write-offs are $1 Trillion so far. Remember LTCM? That was also $1 Trillion and that was just one hedge fund. We’re talking about the total of $11 Trillion in mortgage debt in the top 5 US banks.

As of January 2008, write offs are estimated to be $244 Billion from subprime and $700 billion from derivatives. My bets for banks that will close shop this year are Morgan Stanley and Citigroup.

[Deal Hunter]

The numbers are not even close. The US bank write-offs are $1 Trillion so far. Remember LTCM? That was also $1 Trillion and that was just one hedge fund. We’re talking about the total of $11 Trillion in mortgage debt in the top 5 US banks.

As of January 2008, write offs are estimated to be $244 Billion from subprime and $700 billion from derivatives. My bets for banks that will close shop this year are Morgan Stanley and Citigroup.

[Deal Hunter]

The numbers are not even close. The US bank write-offs are $1 Trillion so far. Remember LTCM? That was also $1 Trillion and that was just one hedge fund. We’re talking about the total of $11 Trillion in mortgage debt in the top 5 US banks.

As of January 2008, write offs are estimated to be $244 Billion from subprime and $700 billion from derivatives. My bets for banks that will close shop this year are Morgan Stanley and Citigroup.

[Author]

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