mbborak

When millionaires say they won't stand being fleeced by tailor-made rich taxes, they mean it.

This is the link to the WSJ article that puts the 2008 percentage loss of US millionaires at 30%. Assuming Maryland was hit at exactly that average, that leaves 3% unaccounted for. Some argument.

blogs.wsj.com/wealth/2.../

When millionaires say they won't stand being fleeced by tailor-made rich taxes, they mean it.

Considering that Maryland is not only the wealthiest state in the US, but also has the best public education system, has one of the highest percentage of people with college and graduate degrees, and is 5th in per capita GDP it looks like taxes aren't doing too much to ruin the state.

I came across this article on the wsj website, and found another that talked Britains 50% decrease in millionaires this year due to the recession. Somehow that must be the fault of liberal Democrats as well. This reporter should be fired for making such a specious claim.

Should We Let California Go Bankrupt? "There’s good reason why most states won’t fall down the fiscal black hole where California now dwells."

Wow, that article can be summed up in one sentence: "I hope all those damn liberal hippies out there are pleased with themselves now that they got what was coming to them!"

This article is nothing but a conservative rant using recycled arguments that have little to no truth to them. The argument about land use and housing costs is absurd! The cities he cites as affordable are all much smaller in population, have no geographic boundaries, and have lower median incomes than the big California cities... but no, that has no bearing on house prices.

These people will use any scrap of bs data to try and argue their point that liberals are responsible for all the evil in the world. Why is this on seekingalpha in the first place???

Hovnanian's CEO Foresees Housing Recovery

Good for a quick pop, nothing more. I expect people to get pretty excited about this tax refund, so we will probably see an uptick in home sales soon. After that, it depends upon the level of unemployment as nobody without a job (or fearing for their job) will think about buying a house.

A lot of those who speculated last year and thought they were buying at the bottom are now foreclosing and selling at a loss. I expect this to repeat a few times before a real bottom occurs, so this stock is either good for a short-term bounce or a long-term buy.

Jerry Maguire, Mission Statements and the Great Housing Malaise

I am convinced that the push for universal homeownership is a scam created by businesses, lobbyists and spineless lawmakers to squeeze every last dime out of the average American's pocket. Most people who own houses are addicted to debt, and have no choice but to borrow to maintain their lifestyle. Think of all the purchases that go along with moving into a house (furnishings, appliances) and all the maintenance/upgrades that drain the pocketbooks of the average homeowner. But remember, this is great because it pumps up consumer spending!

We are told by the powers that be that homeownership is not only "the American Dream" but the greatest and most secure investment you can make. The truth is, most people don't factor in all the costs of maintaining a house, and can't refrain from keeping up with the Joneses by buying a $1,000 washing machine and a $30,000 kitchen upgrade.

The solution is to stop subsidizing homeownership with tax breaks and artificially low mortgage rates and let market forces work. Homeownership is not a natural-born right. It is a privilege that should be gained through working and saving.

Admissions of Spin at the NAR

Some will simply do/say anything to maximize their own private gains. This is why we need oversight and regulation. Lereah is no different from the loan originators, investment bankers, and finance CEOs who sacrificed all consideration of their client's well-being to pump up their next bonus check. He rode the real estate bandwagon all the way up and jumped off before it tumbled down the mountain.

I remember wondering to myself when the media would stop going to the NAR for forecasts when every single one of them was proven too optimistic.

The question is, if the realtors themselves won't hold him accountable, who will? Certainly not the mainstream press. And unfortunately, Seeking Alpha is not considered "mainstream".

Is Financial History Bunk?

I think this article reflects the author's frustration with the impossibility of finding a neat historical reference point that explains the present market conditions and predicts a future outcome. Certainly, many out there in the financial press try to oversimplify current and past recessions into "narratives" that can be easily understood in one concise (and easily published) article. The expectation that we can simply point to a previous recession and say "ditto this time!" needs to be put to rest.

History can definitely lend insight into the current market turmoil, but because we are in the middle of it and have so far seen outcomes that were largely unexpected, the instinct is to throw our hands up and say that history has failed us. I simply cannot believe that there is nothing to learn from past events in our financial history, and I would argue that up until the Fed and Treasury started their meddling, a prudent financial historian could have largely predicted the onset of this recession (and several did). The picture is certainly cloudy and there are no easy answers. To echo Mark Twain, history gives us clues, not prophecies.

Let's Clarify "The Worst Economy Since...." Debate

Mark, it would have been beneficial to see a chart comparing the forecasts of economists with the actual rise in unemployment for each of the last eight peaks. If there is one consistency in the last 12 months, it has been that economic forecasts have been over-optimistic and slow to revise downward. Keep in mind that throughout this past summer the majority of economists surveyed predicted the US would avoid a recession (2Q of negative growth).

Wachovia just came out today with a forecast of 9% unemployment by late next year. Not that they're correct, but suffice it to say that these forecasts will likely follow a downward trend for the forseeable future.

Bloomberg Picks a Fight With the Fed on Disclosure

Don't worry, the Fed has our best interests at heart and is doing everything it can to protect the taxpayer and the long term health of this country. They won't spend too much on unrestricted loans to large corporations who got us into this crisis and refuse to take the risk to help us get out of it. After all, these Fed and Treasury guys are geniuses, right? Most of them are former bank executives, so they definitely know what they're doing with our money.
Plus, what right do we have as citizens to know what these unelected officials are doing with our $800+ Billion tax dollars?

Even if we end up losing all this money, our kids will eventually pay for it so we're in the clear!

The Plague of Short-Termism

Thank you for your article. It is amazing how many aspects of our society, government and economy are subject to this "short-term" mindset. We can't wait until we have savings to go out and spend; we can't fund long-term infrastructure projects because the upfront cost is politically unpalatable; we won't accept short-term economic pain in order to allow the system's problems to work themselves out. Every time I hear a comment like "deficits don't matter because we need to put out the fire now" I think of how we will look back in 10 years and see how wrong that sentiment was. Just like Greenspan's overstimulation of the economy in 2001-2002, we will sacrifice everything to avoid the dreaded recession, not realizing that it will set us up for inflation and huge budget deficits once the "crisis" is over.

We have simply become too spoiled and too entitiled to simply batten down the hatches, keep our noses to the grindstone and work through our problems. We cry out for a safety net to rescue us from the inevitable downside to our "get rich quick" economy. The result is constant imbalance and volatility, with the worst consequences being passed on to future generations.

The Right Way to Encourage Home Ownership

Once again, I agree with the above comments. Home prices simply have to come down to reasonable, even cheap levels. Once they are there, we can worry about how low-end buyers will be able to finance them and perhaps offer temporary tax credits that would have to be be repaid in order to spur the market's recovery.

Remember, we are coming off of record hight home ownership rates, and I simply don't see the need to offer further subsidies at this stage of the game, since we would just be propping up a market that has further to fall. It would be folly to try to get low income families into houses that will be worth less in a few years rather than simply waiting until these families can make their own determination of what they can afford.

Have We Learned Anything Yet?

Thank you for this article. Somebody needs to step up and speak "in defense" of recession. It is the natural forest fire that cleans out the underbrush and allows new sprouts to grow and thrive. The thinking that we can have endless prosperity with no downside is dangerous to our economy and disastrous in the long term. Realizing when things have gotten out of hand on the upside is a skill that we should learn from this crisis.

Asking for a Housing Bailout

Cramer's proposal is the surest way to put the US housing market on life support for the forseeable future, leading to a long, slow decline in both property values and mortgage lending. Think Japan-style "lost decade". We will revert to the mean eventually, folks, it's just a matter of how long we want to wait until its over.

Maybe we can have an "equity sharing" deal where the government owns 50% of all troubled real estate and simply rents their share out at a subsidized rate. Or, the government could ban private appraisals and release its own "CHPI (Core Housing Price Index)" that reassuringly lets us know that real estate values are consistently rising at 5% per year.

Do these people call themselves capitalists?

Where We Should Be Investing: The Paradox of Thrift

Wow, thanks for that breath of fresh air. A great explanation of how investing in unproductive assets has put us behind the 8 ball.

Now we just need to figure out how to convince financiers and government to stop plowing our savings and taxes into ventures that produce only short-term gains and long-term liabilities.

Perhaps a follow-up article would be warranted?

Just How Terrible Is Housing as an Asset Class? Roubini Weighs In

The only productive effect that housing has on the economy (once it is actually built) is in propping up consumer spending. Those consumers with more space tend to accumulate more stuff and spend more on upkeep and improvements to their houses. Aside from that, it is a drag on federal, state, and local budgets, as households continue to demand public services, and a drag on the actual long-term financial health of the consumer by way of the increased debt burden that they must finance. Now, as the illusory price increases of the past decade reverse themselves, we will unfortunately see even more demands for subsidies resulting in an even higher burden on the taxpayer.

Policymakers have to resist the enormous pressures of the housing/housing finance lobby and the baby-boomer homeowners in the interest of putting this locked-up capital to better use. Good luck - maybe that bit about bankrupting the US economy wasn't so far off.