balor123

Homebuyer Tax Credit: Update

Homeowners have been bailed out through subsidized low interest rates and that has actually been the most expensive of the bailouts ($1 trillion!), most of which has already been spent. Few like the existence of the mentioned bailouts. You should be equally unhappy about the homeowner bailout as it does not justify the other bailouts - rather it creates a further injustice! Sucks to be a renter. Great to be a homeowner who never needed help in the first place. Others? Well at least they made the choices that got them where they are. Maybe we should help them but they certainly don't deserve it.

The new home bailout does even less for housing. It is easily gamed. 1) buy a similar house and get $8k, 2) trade houses with a relative then immediately trade back ($8k each), or 3) trade down now that you can't afford the house that you're in, get $8k. Who wins in these cases? People who collect fees. People who own houses (and are smart enough to take advantage of them).

Attempting to Understand Bankers' Pay

Just want to add that there's one special case of barrier to entry that wasn't mentioned which occurs frequently: implicit collusion. "Standard" fees are common within the industry, which combined with other barriers to entry and opportunity costs to finance employees, results in higher costs. For example, the AIG CEO recently tried to launch an IPO with only a 1% fee rather than the "standard" 2%. Hedge funds typically charge a "standard" 20%/2%. You won't find many or any hedge funds that charge fees comparable to mutual funds. Competition only brings efficiency when competitors try to compete on price and competing on price is only possible when the opportunity cost for employees isn't high. That can only happen if unemployment in the finance sector is allowed to rise (banks will have to fail).

Note to Google: Disruptive Efforts Don't Always Succeed

I think Google does this for several reasons. First, lots of cash and high expectations for growth means lots of experiments. Google is hoping to continue startup growth and must continue investing in projects that are startup like. Second, Google is trying to build an ecosystem that makes competition difficult. Google search engine is still #1 because of Google homepage, Google mail, etc all tied in together.

The Highest Yielding Cash Products

This is one area where stagflation sucks - virtually no matter where you keep your money it loses purchasing power and the only safe places are those that don't appreciate over the long term, bubbles aside.

That aside, there is no mention of high-yield checking accounts. I have one that is yielding 5.01% currently and there are some in this country yielding up to 7%! You have to be very diligent in meeting these requirements and spread your money around several banks to maximize return, but for a few thousand dollars a year, isn't it worth the trouble?