Posted: May 20th, 2010 | Author: Joe | Filed under: Economy, Real Estate | Tags: bailout, home buyer credit, Mortgage Rates, Mortgages, news, Stimulus | 1 Comment »
Remember when the government subsidies for buying new cars ended and car sales tanked? Looks like we’re seeing the same thing in the housing market. It shouldn’t be surprising that Mortgage Purchase Applications Plummet As Tax Cuts Expire because when you subsidize an activity, you get more of it. When you take that subsidy away, you get less of that activity.
This is a pretty good indicator because the number of refinances rose 14.5%, while applications for new home purchase dropped 20% over the previous month. Rates are still very low, so it’s a logical conclusion that people are no longer as motivated to buy a house since the new home buyer tax credit expired in April.
In fact that is the conclusion of the Mortgage Bankers Association:
” The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009,”
This is exactly why government subsidies and stimulus don’t work. They only provide artificial economic activity over the short term, but they cannot correct for imbalances in the market. They cannot prevent a recession or a pullback in economic activity, they can only postpone it.
Things have been looking good lately – on the surface. But how much of that economic “recovery” has been an illusion created by stimulus spending that only masks the underlying problems?
Related Posts:
Posted: December 30th, 2009 | Author: Joe | Filed under: 10 Investment Tips for Beginners, Credit, Debt, Economy, Investing, Scam | Tags: 401(k), bailout, blogging, Cramer, Credit, Credit Cards, Debt, Investing, Stock Market, Stocks | No Comments »
What a year it’s been!
As the history books close on 2009, I thought it might be nice to take a look back on the topics that were hot on Simple Debt-Free Finance over the past year.
2009 saw a lot of talk about the future of the 401(k). It seems only natural, given that it is one of the major means of saving for retirement for many American workers who had just seen those savings drop like a stone in the 2008 stock market crash. A lot of the talk was centered around ways to “fix” the 401(k) when it isn’t broken. This bothered me enough to blog about it in that post as well as Fixing What Isn’t Broken and Why 401K Retirement Plans Really Don’t Work And How To Fix Them
Many workers, like myself, saw their company contributions to 401(k) plans cut or “temporarily” suspended. My response to that was to give my 401(k) some TLC, a move which paid off when my balance returned to pre-crash levels in the 3rd quarter of 2009.
Bank Failures.
Another hot topic of the beginning of the year was bank failures. So many failures naturally led many to wonder what the FDIC insurance limits cover.
Investing.
2008 was a big year for gold, and 2009 was even bigger. Such a bullish environment for gold led Rosland Capital to offer Gold Eagle coins for IRA accounts.
The 2008 crash created an historic opportunity for investors to “buy low”, but it also offered many reminders of what not to do. To that end, I shared Jim Cramer’s 10 commandments of stock trading.
Since the crash created a great opportunity for new investors to get into stocks at levels unseen in a decade, I put together a list of 10 investment tips for beginners:
1 Follow The Rules
2 Be Aware Of Taxes
3 Don’t Confuse Investing With Trading
4 Tune Out The Media
5 Don’t Tune Out Too Much
6 Pay Attention To Risk
7 Don’t Avoid Reality
8 Don’t Fall For Hot Stock Tips
9 Don’t Try To Time The Market
10 Try Before You Buy
In other news, some investing sites seemed to want to attack index fund investing in all the wrong ways. I had to respond to their criticism of index fund investing.
Kiplinger was nice enough to provide a 1st phase of credit card consumer protection rules went into effect.
I had a couple of posts about 0% balance transfer offers, mostly because 0% balance transfer offers were coming to an end at the same time my wife received a 0.99% balance transfer offer.
Since it seemed to be a hot topic, for me anyway, I decided to share 6 things you should know about 0% APR credit card offers.
And all this at a time when Bank of America began imposing fees for paying off your balance… idiots!
Government Bailouts.
2009 is likely to be remembered best for the bailout craze that gripped the auto sector, bank sector, heck – the entire nation!
credit card consumers got a bailout, the NASDAQ released a “government relief index” for tracking bailed out companies and cash for clunkers gave charities some competition
What would a debt blog be without posts about, well, debt?
The year started out with discussions about toxic debt and ended with the mortgage debt relief program going until 2012.
In between was some discussion of whether debt settlement is a good idea, and why debt consolidation is (sometimes) a scam. When it’s not a scam, debt settlement and loan consolidation just doesn’t work, and you’re much better off taking a DIY approach to debt consolidation.
And just to round out the debt consolidation talk, I shared how it affects your credit score.
I asked, “Why are you in debt?”, but not too many people answered, so I got the top 10 causes for debt from BankRate.com. 
Related Posts:
Posted: February 19th, 2009 | Author: Joe | Filed under: Investing | Tags: bailout, Investing | 2 Comments »
File under: “huh”?
I’m not sure why, but Nasdaq has released a “New Benchmark Tracks Companies That are Participating in the U.S. Government’s Financial Relief Plan“.
It’s called the “NASDAQ OMX Government Relief Index” and it’s ticker is QGRI. My first thought is, “Why?” I mean, these banks are not likely to be profitable any time soon since the government with have first dibs on any profits they are able to make. On the other hand, the index is up 11% as I write this, so maybe it’s worth a look? Chances are it would still fall under the speculative/momentum type of “play” more than an investment per se.
UPDATE: Maybe I was right and 11% is only a bounce? According to this site, the index was down 36% since its inception! It just goes to show that wall street will make an index out of just about anything these days…
Related Posts:
Posted: February 10th, 2009 | Author: Joe | Filed under: Economy | Tags: bailout, politics | No Comments »
From the Wall street Journal online (by way of Yahoo! finance):
“The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices andexecutive-pay abuses, including owning a Porsche for its executives’ use.”
Representative Barney Frank (Democrat, Massachusetts) has apparently been interfering with TARP decisions. According to this article, “Troubled OneUnited Bank in Boston” received $12 million in TARP funds due to the actions of Frank.
“Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection”
The sickening part of all this is that Barney Frank is making the rounds on news programs accusing the Bush administration of failing to provide proper oversight of the TARP funds! It’s bad enough that members of congress get a pass on their actions and the ultimate results of those actions, but it’s absolutely disgraceful to point the finger of blame and play politics with something as serious as we’ve been told the TARP bailout is.
Related Posts:
What others are saying