[SK in CV]

[quote=SD Realtor]Yes SK we have heard the little tweaking and drops argument you have proposed before.

Seems like the government has been embracing that.[/quote]

Much more important than those little tweakings and drops is the economy as a whole. Two percent annual growth won’t do it. I think Europe has provided pretty good evidence that austerity isn’t a solution. We haven’t really embraced a solution here either, we’ve just less wholeheartedly embraced the same failed path as Europe.

[SK in CV]

[quote=The-Shoveler]
So you really think we will ever be able to pay the national debt without say 7-8% inflation?[/quote]

Pay off the debt or maintain and service it? A little tweaking of both sides of the budget and 3 or 4% GDP growth would provide enough to balance the budget. A few years of 5% growth and a little more tweaking, particularly on the revenue side, could put a dent in the debt.

[SK in CV]

[quote=AN]budget schmudget… we’ll just print a few trillion dollar coin… then voila budget problem fixed.[/quote]

That’s quite the straw man. Nobody has proposed that a trillion dollar coin will fix anything. It’s a short term solution to a purely political obstacle.

[SK in CV]

I agree with most of your criticism. What most of these “gurus” prove is that a good way to get rich is to come up with a good presentation that people will pay for. Whether it’s a radio show, or books, or personal appearances. Other than Suze Orman, I don’t know much about the others, but she spews mostly worthless BS. It became pretty obvious the first time I heard her more than a decade ago, when she started in on her silly “dollar-cost averaging” method of investing.

As you said, the most reliable way to end up with a million bucks is to inherit $10 million.

But I think you wrongly malign “life coaches”. Most life coaches don’t meddle in financial affairs. My SIL is a certified “life coach”. I do think it’s silly and cultish, but there are some people it probably benefits.

[SK in CV]

[quote=carlsbadworker][quote=flu]Seen plenty of people who make a hell of a lot of money, but have shot credit, because they have a spending problem.[/quote]

On the other hand, if people have good credit and good income, they will probably be qualified for loans. Why would they rent from you since rent is higher than PITI in many cases?[/quote]

Because it’s not so in all cases?

[SK in CV]

[quote=zk][quote=SK in CV][quote=zk]
The 2nd amendment covers all arms. And it doesn’t refer to protection of one’s person, family and property. It refers to the “security of a free state.”[/quote]

No, it does not cover all arms. The supreme court has said so, repeatedly.[/quote]

Ok. Does it cover rifles and shotguns? More to the point, when Lucky in OC says the 2nd amendment doesn’t cover rifles and shotguns, what does he mean and what point is he trying to make?[/quote]

You’ll have to ask him. “Arms” are weapons. The courts have upheld bans on automatic weapons and not dismissed bans on some semi-automatic weapons. I’m pretty sure no one has ever successfully argued that the arms referred to in the 2nd amendment covers nuclear weapons.

[SK in CV]

[quote=zk]
The 2nd amendment covers all arms. And it doesn’t refer to protection of one’s person, family and property. It refers to the “security of a free state.”[/quote]

No, it does not cover all arms. The supreme court has said so, repeatedly.

[SK in CV]

[quote=flu]indexes turned positive. I think it’s gonna make a break for a run up…or not…meh. who cares.[/quote]

Sweet edit 🙂

Right after you originally posted this comment I asked my chart watching friend if $1,460 on the S&P futures meant anything. She said no. (I think maybe she lied to me.) $1,447.50 was her number and we blew through that yesterday morning. She made money all day and night going long, tick by tick, but just coincidentally? (i think not), went short the moment it hit $1,460 and made a few more bucks. Now she’s flat and taking a nap. I think she knows things she doesn’t share.

Or not.

[SK in CV]

[quote=The-Shoveler]OK so now what !
I think we are sitting just about where we were last year at this time, same possible black swan’s still out there etc…
Don’t see a lot other than slow growth myself so I don’t see why everyone got so excited over this cliff deal.
Still on the side lines for now.[/quote]

Is the “side lines” an extraordinarly low yielding savings account or something similar? If so, you missed out on a lot. NQ and S&P up around 10%. Dow up 5% with a median yield of almost 3%. If you forsee the same slow growth in 2013 as we had in 2012, the sideline is not where you want your money.

[SK in CV]

[quote=livinincali]
Honestly what’s the first thing you would do if you were a dictator that wanted to push the US to a hard core socialist/communist government? Remove the guns so the producers couldn’t realistically fight back. Then you start removing protections of search and seizure and free speech. Basically everything in the bill of rights would be quickly removed because those are the primary checks and balances to oppose your takeover.[/quote]

Given the history and direction of the country over the last 60 years, it’s much more likely that a dictator that wanted to push a hard core fascist/corporatist government would appear on the scene. But point taken.

[SK in CV]

[quote=livinincali][quote=flu]What you think is irrelevant. Government can change the rules any time they want.[/quote]

Yup. Take whatever tax advantage you can immediately. Roth’s are going to end up being the biggest sucker play ever.[/quote]

If you’re arguing that tax benefits of existing Roths will go away, I suspect you’re wrong. Nothing in the history of income tax in the US would indicate a change like that is likely.

[SK in CV]

[quote=carlsbadworker]I am pretty sure that US stock future opens at Sunday night. The New York market maybe is closed but people can trade US future from Asian or European market.
Next time, check here on Sunday night: http://www.bloomberg.com/markets/stocks/futures/%5B/quote%5D

Yes they do, normally. More like Sunday afternoon. But they closed Monday an hour after the cash close, until 4 AM west coast time for the new year’s day holiday. Forex trading resumed yesterday afternoon, before Asian markets opened.

[SK in CV]

[quote=carlsbadworker]Future is up a lot. Maybe I will get a chance to cash some stock to remodel my new house this month.[/quote]

When you posted that, the only futures that were open were Asia. But when US stock futures opened at 4 AM west coast time, they were up over 1.5%. Now S&P up almost 1.9%, NQ up over 2% and the TF up over 2.4%. All btw, higher than they were on election day. Weeeeeeeeeeeeeee.

[SK in CV]

[quote=UCGal]We hear,often that people do not take personal responsibility for their retirement…
I read a while back that the average 50 year old only had $50k saved for retirement.
Now you’re proposing a scheme that would let irresponsible people gut their inadequateretirement savings.

Even if your idea were approved you need to account for taxes. Since 401k money is pretax you need to take out extra to pay taxes on it… and depending on what bracket you’re in, it could kick you into a higher tax bracket. It will be taxed at your highest rate.

It just seems like a fiscally irresponsible idea. Just my opinion.[/quote]

I agree, and beyond that, other than the vague credit for investing in solar, it does nothing meaningful to help the economy. Paying off debt is not stimulative, whether its home mortgage debt, credit card debt, or student loan debt. At least mildly to the contrary, it would potentially cause a pretty drastic fall in the stock market. The macro-economic benefits escape me.

[SK in CV]

[quote=CA renter][quote=SK in CV][quote=CA renter]While I admire your superior knowledge about accounting and finance, I’m not sure about your claim that the Fed is buying at “real” market values.

Besides, when foreclosures are banned and/or artificially held from the market (keeping supply low), and when interest rates are “artificially” pegged to the floor (propping up the price of assets purchased with credit), can we really be sure of the market values of these securities?[/quote]

Sure we can. Market value is a price at which an asset is exchanged between willing buyer and willing seller, with neither side under any compulsion to act. There was a time when the MBS market was frozen, there were literally no buyers. That is not true today. They are actively traded, so they do have a market value. The Fed may be keeping interest rates artificially low. But within that paradigm, assets have a very real value.

And foreclosures are not banned, nor are they artificially being held from the market.[/quote]

Regarding the mortgage securities held by the Fed. According to this (see footnote #4), they are being held at current face value — the remaining principal balance. They are not being “marked to market” if one assumes that not all of these are current or will be paid off.

http://www.federalreserve.gov/releases/h41/current/h41.pdf

——–

Regarding foreclosure bans or moratoriums:

“State lawmakers approved new mortgage protections for California homeowners Monday. The package of bills prevents banks from foreclosing on a mortgage holder who’s applied for a modification.”

http://www.scpr.org/news/2012/07/02/33069/california-lawmakers-ban-banks-from-foreclosing-on/

…

Here’s how they are liquidating the REOs that they manage foreclosed on. If they never go on the open market (and rumor has it they are selling for well below market value in many cases), then we are not getting accurate pricing data. This is just one program. Banks and other lenders (the Fed?) have been selling to bulk buyers for pennies on the dollar for quite awhile.

http://www.calculatedriskblog.com/2012/07/fhfa-robust-market-reponse-to-bulk-reo.html

……..

How foreclosures are not happening as they would have in any other RE market:

“In late 2010, evidenced emerged that the foreclosure process may have been deeply tainted by sloppy recordkeeping, cut corners and possible fraud, epitomized by high-profile cases of “robo-signing’’ — cases in which foreclosures took place based on forged or unreviewed documents. More than 40 states attorneys general began investigations into foreclosure abuse, and worries about the legal fallout from the scandal led to a sharp slowdown in the rate of foreclosure filings and of repossessions in 2011.

In February 2012, government authorities and five of the nation’s biggest banks — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners.

Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out; earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.”

http://topics.nytimes.com/top/reference/timestopics/subjects/f/foreclosures/index.html

………

I’ve mentioned before that we’ve been dealing with the BK of a business who owes us money, and have heard multiple cases in BK hearings where people have not been paying *anything* on their mortgages for 4-5 years, and have still not been foreclosed on. We also personally know a couple of people who have not paid in years, and they are not being foreclosed on. Call it whatever you want, but IMHO, there is so much manipulation in the market that we have no idea what the “real” (non-manipulated) inventory levels are, nor what the “real” values of these assets are.

You’re right about the definition of market value, but this “market value” has nothing at all to do with the “real value” of these assets when the markets are being manipulated like they are. IMHO, we are nowhere near a recovery — not in housing, and not in the general economy — and the more we try to mask over the weaknesses with cheap money and artificially suppressed supply, the worse off we’ll be in the long run.[/quote]

I’m not sure how any of this is relevant to what I said.

Agency guaranteed securities are held at face value. Since the risk is on the part of the agency, not the Fed, carrying them at face is appropriate. Non-agency mortgages are held at current value.

Foreclosures are not being banned, scant evidence of regulatory limitations notwithstanding. There are agreements in place to insure that lenders act in good faith.

The robo-signing fiasco wasn’t artificial. It was very real. The only serious limitations on lenders foreclosing efficiently is the incompetency of the lenders themselves. You can validly argue that they’ve done a crappy job. But they have every legal right to do what they want with their property.

The market exists. The prices being paid are real prices. You can compare current prices to historical, to rents, to interest rates, and come up with all kinds variances from the norms, but there is no alternate reality that provides us with guidelines for “true values”. There will always be economic and other factors which effect pricing. Interest rates. Tax policy. Employment. Weather. All of these things “manipulate” the market. But the market tells us what properties are worth.

With all due respect, your opinion on whether we are near or not near a recovery in housing is not the least bit influential. We have very objective measurements available to determine those kinds of things. We don’t need opinions. You can speculate as to whether the recovery will continue. On a blog like this, it’s probably irresponsible not to speculate. But the recovery is happening.

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