[patientrenter]

Not a bad move, Nancy.

But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?

I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.

Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.

[patientrenter]

Not a bad move, Nancy.

But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?

I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.

Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.

[patientrenter]

Not a bad move, Nancy.

But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?

I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.

Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.

[patientrenter]

Not a bad move, Nancy.

But my bias for 401k alternatives is real assets that produce a steady real income. A home can be rented out. In a world where downpayments are not required (FHA 3% less tax credit) and mortgage rates are held low through government action (FNMA and Fed purchases of MBS etc), and there is no real penalty for walking away when underwater, it will be hard to rent any home that can be easily bought instead. Why would anyone want to rent a single family home that they can buy with little or no commitment and at low monthly cost?

I think we have not yet understood the full long term impact of the Great Bailout. Over the next few years, journalists and financial advisors and individuals will digest what is happening now, and come to realize that buying a home with little or no money down is a huge gift from the federal govt when paired with a plan for ruthless default. People will be buying homes with little or no commitment to paying the purchase price, to an even greater degree than in the last bubble.

Certainly people assigned temporarily to one location would prefer to rent, but the population of people in this situation is steady, and we can’t all make a retirement living by buying more and more homes and renting them to this small slice of our working population.

[patientrenter]

[quote=greekfire]Peter is exactly right, but the powers that be (voted in by all of us) are doing everything they can to prevent the market from correcting.[/quote]

Which is why we should all be making an effort to get in front of our Congressman and vigorously make our case. The people who want to avoid consequences for their bad decisions are in total control right now, with all the top finance Congressmen (Frank, Dodd, Schumer) in their pocket. Maybe we cannot make a difference, but we shouldn’t be too cynical. Life does bring opportunities, and being too cynical means you miss lots of opportunities. We should at least make these Congressmen feel uncomfortable whenever they let borrowers, investors, and bankers off the hook for another trillion dollars.

[patientrenter]

[quote=greekfire]Peter is exactly right, but the powers that be (voted in by all of us) are doing everything they can to prevent the market from correcting.[/quote]

Which is why we should all be making an effort to get in front of our Congressman and vigorously make our case. The people who want to avoid consequences for their bad decisions are in total control right now, with all the top finance Congressmen (Frank, Dodd, Schumer) in their pocket. Maybe we cannot make a difference, but we shouldn’t be too cynical. Life does bring opportunities, and being too cynical means you miss lots of opportunities. We should at least make these Congressmen feel uncomfortable whenever they let borrowers, investors, and bankers off the hook for another trillion dollars.

[patientrenter]

[quote=greekfire]Peter is exactly right, but the powers that be (voted in by all of us) are doing everything they can to prevent the market from correcting.[/quote]

Which is why we should all be making an effort to get in front of our Congressman and vigorously make our case. The people who want to avoid consequences for their bad decisions are in total control right now, with all the top finance Congressmen (Frank, Dodd, Schumer) in their pocket. Maybe we cannot make a difference, but we shouldn’t be too cynical. Life does bring opportunities, and being too cynical means you miss lots of opportunities. We should at least make these Congressmen feel uncomfortable whenever they let borrowers, investors, and bankers off the hook for another trillion dollars.

[patientrenter]

[quote=greekfire]Peter is exactly right, but the powers that be (voted in by all of us) are doing everything they can to prevent the market from correcting.[/quote]

Which is why we should all be making an effort to get in front of our Congressman and vigorously make our case. The people who want to avoid consequences for their bad decisions are in total control right now, with all the top finance Congressmen (Frank, Dodd, Schumer) in their pocket. Maybe we cannot make a difference, but we shouldn’t be too cynical. Life does bring opportunities, and being too cynical means you miss lots of opportunities. We should at least make these Congressmen feel uncomfortable whenever they let borrowers, investors, and bankers off the hook for another trillion dollars.

[patientrenter]

[quote=greekfire]Peter is exactly right, but the powers that be (voted in by all of us) are doing everything they can to prevent the market from correcting.[/quote]

Which is why we should all be making an effort to get in front of our Congressman and vigorously make our case. The people who want to avoid consequences for their bad decisions are in total control right now, with all the top finance Congressmen (Frank, Dodd, Schumer) in their pocket. Maybe we cannot make a difference, but we shouldn’t be too cynical. Life does bring opportunities, and being too cynical means you miss lots of opportunities. We should at least make these Congressmen feel uncomfortable whenever they let borrowers, investors, and bankers off the hook for another trillion dollars.

[patientrenter]

I like your response, flu.

Maybe we should call these IOUs “California bucks”. In your example, flu, each Calfornia buck can be converted to 0.65 of a Federal buck (or whatever the market determines those California bucks are worth).

This would be a nice solution to the problem of overspending by California government. All spending in California would effectively be reduced by 35%, across the board.

Of course, eventually the Federal bucks would also be convertible to less in other currencies and real goods, just like the California bucks. But that’s another few years down the road.

I know, I know, this won’t be allowed to happen – a permanent reduction in Cali govt spending. But it’s fun to dream.

[patientrenter]

I like your response, flu.

Maybe we should call these IOUs “California bucks”. In your example, flu, each Calfornia buck can be converted to 0.65 of a Federal buck (or whatever the market determines those California bucks are worth).

This would be a nice solution to the problem of overspending by California government. All spending in California would effectively be reduced by 35%, across the board.

Of course, eventually the Federal bucks would also be convertible to less in other currencies and real goods, just like the California bucks. But that’s another few years down the road.

I know, I know, this won’t be allowed to happen – a permanent reduction in Cali govt spending. But it’s fun to dream.

[patientrenter]

I like your response, flu.

Maybe we should call these IOUs “California bucks”. In your example, flu, each Calfornia buck can be converted to 0.65 of a Federal buck (or whatever the market determines those California bucks are worth).

This would be a nice solution to the problem of overspending by California government. All spending in California would effectively be reduced by 35%, across the board.

Of course, eventually the Federal bucks would also be convertible to less in other currencies and real goods, just like the California bucks. But that’s another few years down the road.

I know, I know, this won’t be allowed to happen – a permanent reduction in Cali govt spending. But it’s fun to dream.

[patientrenter]

I like your response, flu.

Maybe we should call these IOUs “California bucks”. In your example, flu, each Calfornia buck can be converted to 0.65 of a Federal buck (or whatever the market determines those California bucks are worth).

This would be a nice solution to the problem of overspending by California government. All spending in California would effectively be reduced by 35%, across the board.

Of course, eventually the Federal bucks would also be convertible to less in other currencies and real goods, just like the California bucks. But that’s another few years down the road.

I know, I know, this won’t be allowed to happen – a permanent reduction in Cali govt spending. But it’s fun to dream.

[patientrenter]

I like your response, flu.

Maybe we should call these IOUs “California bucks”. In your example, flu, each Calfornia buck can be converted to 0.65 of a Federal buck (or whatever the market determines those California bucks are worth).

This would be a nice solution to the problem of overspending by California government. All spending in California would effectively be reduced by 35%, across the board.

Of course, eventually the Federal bucks would also be convertible to less in other currencies and real goods, just like the California bucks. But that’s another few years down the road.

I know, I know, this won’t be allowed to happen – a permanent reduction in Cali govt spending. But it’s fun to dream.

[patientrenter]

[quote=threadkiller]Can the banks/institutions really absorb all the foreclosures that are coming down the road? I think not! Without some way to extend the pain we are headed for Depression for sure! I myself am ok, it’s my fellow man I’m worried about, which will eventually affect us all. If it makes sense for all parties involved and helps avoid a Depression then I say it’s worth a look.[/quote]

When prices are dropped to the point when demand matches supply, then the market can handle all the foreclosures. The problem most people have is that they want a big chunk of the massive gains in RE prices since 1996 to stick around until they cash in. That’s not a fundamental economic problem, it’s simply one group anxious to use political power to manipulate prices their way.

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