jhaus

Barron's Plan to Save the Economy - For Just $200B?

Ex the moral-hazard issue, this plan would work. However, there is another, equally effective way which solves a large portion of this moral hazard...

Rather than subsidize mortgages taken on by subprime borrowers, incentivize investors to purchase these homes through an expanded rent subsidy program which will keep the current owners in the homes, but will guarantee a portion of the rental income stream to keep the investors and banks solvent.

Here's the better plan to save the economy:
www.nnnrent.com/2008/1.../

Fannie Mae Should Steer Clear of Renting Homes

Problem:
Fannie the Landlord

Solution:
www.nnnrent.com/2008/1.../

How Wall Street Has Failed the Individual Investor

Boohoo - No one is going to change human nature. Period. Going forward, the best we can hope for is a better educated and aware citizenry. Be it the individual investor or the Wall Street banker; there were far too many individuals chasing high returns, and if that meant gaming the system, so be it.

On the bright side, by refusing to follow life's lessons, we now have an opportunity to relearn what so many of our ancestors knew:

<blockquote>You reap what you sow.</blockquote>...

As Stephen Covey asks us: Can you "forget" to plant in the spring, goof off all summer, and then hit the ground real hard in the fall to bring in the harvest?

Is the Real Estate Plunge Really That Shocking?

No, it's not: www.nnnrent.com/2008/1.../

It Might Be Impossible to Stop the Decline of Housing Prices

Stimulate demand with a modified section 8 program. Investors and home owners that are struggling would benefit. I haven't heard a good argument against this and I can't see any other way that government involvement isn't incentivising poor behavior. I wrote about this in more depth here and including a very interesting graph: www.nnnrent.com/2008/1.../

The Best Laid Economic Plans...

I just wrote about this the other day here: www.nnnrent.com/2008/1.../

My version is a bit different, in that it builds on the section 8 subsidy program. However, both seem far less interventionist than what the current proposals are.

Obama Is Bad for the Economy - Barron's

In Jim McTague's next piece, he will be advocating the gas tax holiday. In two points, Mr. McTague's salacious and partisan argument is easily debunked: (1) Individuals are generally not taxed on business income, only distributed income, hence the Obama plan (which calls for reductions in corporate tax rates) would encourage business reinvestment. (2) The US is a popular destination for foreign investment due to the relative transparency and accountability required by the law here. Increasing capital gains taxes to the rates which existed under Reagan would certainly curtail short-term investments (those lasting less than 12 months) in the US to some extent...heck if investors had Obama's incentives to hold those mortgage securities longer, maybe we could've avoided the whole credit mess we're currently in the middle of?

There is clearly no perfect policy, however, I find it hard to believe that we can't do any better than the past eight years.