Archive for December, 2012

Bad financial management decisions at California public agencies is nothing new. Orange County declared bankruptcy in the 1990s due to gross financial mismanagement, and the California state budget continues to be a mess. Sweetheart deals for public officials is nothing new here either. Public employees in the City of Bell paid themselves salaries approaching a million dollars a year, and California public worker's unions negotiate compensation packages far in excess of the value they provide. With the culture of corruption rampant in California, it isn't surprising that minor agencies are also doling out the largess. AC Transit stuck with ex-manager's home Phillip Matier and Andrew Ross, Chronicle Columnists Updated 11:06 p.m., Tuesday, December 4, 2012 AC Transit directors sank more…[READ MORE]

I am constantly amazed by the ignorance of the mainstream media when it comes to housing issues. They consistently cheer-lead, take the NAr's statements at face value, and fail to question their rosy assumptions. This behavior provides people bad information and may cause someone to buy who might otherwise chose to rent if they knew the truth. There are many good reasons to buy today as values are well below historic norms, but people should be given accurate information in order to make an informed decision. That's not what people get from the mainstream media these days. Today's featured article was particularly galling. Not just was it full of shoddy analysis and poor reasoning, it gloated about the correctness of…[READ MORE]

First-time homebuyers are the foundation of the housing market. Move-up buyers need first-time homebuyers to purchase their property to provide the equity to make the move up possible. With the collapse of toxic loan products from the bubble, first-time homebuyers suddenly needed to have qualifying income, and that income would only be applied to conventionally amortizing mortgages. As a result, loan balances cratered, and house prices went down with them. To prevent further declines in mortgage balances, the federal reserve lowered interest rates to near zero and embarked on "operation twist" to bring down mortgage rates. In the process they have caused the cost of ownership to decline precipitously, at least for buyers putting twenty percent down. My reports show…[READ MORE]

My point of view on home ownership and debt is very different than most financial reporters, and apparently it's different than most Americans. In my view traditional views of home ownership, like those extolled in Mike's weekend piece Why our less educated parents and grandparents were more intelligent on homeownership, have been replaced by a twisted concept of money rentership as a proxy for home ownership. I described the slow deterioration of our concepts of home ownership in the post Money rentership: housing and the new American dream: One of the most common encumbrances on property is the mortgage lien, and it is among the most restrictive. For instance, if you own a property not encumbered with a mortgage lien,…[READ MORE]

Many of the Generation X (me) and most of the Baby Boomers where sons or daughters of parents that their highest level of eduction was high school. In fact none of my grandparents completed high school.  In contrast, the baby boomers attended college in record numbers leading to explosion in the number of higher education institutions and this trend continued in sequent generations.   Just look at how many colleges were founded after 1945 and huge increase of enrollment at existing institutions.  However, something happened with the knowledge transfer between generations.   The more educated generations have a worse financial track record when it comes to homeownership.  Didn't college make people more educated and wise concerning their future financial decisions? The Greatest…[READ MORE]

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