A Multi-Year Phenomenon
The News Journal reports from Delaware. “It wasn’t so long ago that retirement meant a well-earned ticket to Easy Street. Today, that’s nothing more than fantasy for tens of millions of Americans. More than half of all U.S. households hadn’t saved a penny in their 401(k) retirement accounts and the median 401(k) balance was just $34,000, Pew Charitable Trusts found in 2004. And that was before the recession devastated investments, housing values and net worth.”
“Don Rosado retired after 27 years at the refinery near Delaware City.Rosado said he has some savings and $600,000 in a 401(k) account, which puts him way ahead of most people today. He said he needed surgery to address a foot problem and his wife, Margaret, needed care for a heart ailment. They’re trying to sell their vacation house at the beach, and Margaret, 61, has begun looking for work.”
“‘Now, I’m only on Social Security and my 401(k). I’m starting on that this month to pay the bills,’ he said.”
“Homeownership, once the bedrock ‘nest egg’ for millions, has been undermined by the real estate collapse. Many families won’t have their homes fully paid off by the time they retire. In 2007, 32 percent of households headed by someone age 65 to 74 were carrying home mortgage debt, and nearly 19 percent of households headed by those 75 and older had a mortgage, according to the Federal Reserve Survey of Consumer Finances.”
The Gazette in Maryland. “Like many real estate brokers, AJ Khetarpal, CEO of Maxxum Realtors & Associates in Rockville, knows that the days of the quick, easy home sale — with buyers in a bidding war the minute the home goes on the market — are, for the most part, not going to return for a while, and likely for a long while. ‘So far this year, about 86 percent of my sales have been short sales. The rest have been foreclosures,’ he said. ‘I don’t see a lot of regular sales.’”
“‘We will not have a full recovery until the economy improves overall,’ said Linda Simpson, with Weichert Realtors in Rockville. ‘Some buyers still do not grasp the idea that it is a buyers’ market and still a good time to purchase.’”
The Star Democrat in Maryland. “The sluggish economic growth experienced so far this year is expected to continue throughout the rest of 2011 and into 2012, according to two economists who presented their forecasts Sept. 15. After predicting last year that the economy would modestly move forward in 2011, as it did in 2010, Gary Keith, VP in the commercial banking division of M&T Bank, said he’s not as optimistic this year, given what actually has occurred to date in 2011.”
“‘We’re in a much deeper hole than we originally thought,’ he said.”
“With no short-term fix in sight, though, Keith said the jobless numbers most likely will be ’sticking stubborn,’ as the economy isn’t expected to grow fast enough over the next year to bring those numbers down. Couple that with a still-struggling housing market and the near gridlock in Washington, D.C., on important economic issues, and meager growth can be expected for the foreseeable future, Keith said.”
“‘This is not just a one- to two-quarter event,’ he said. ‘This will be a multi-year phenomenon.’”
The Greenville News in South Carolina. “Greenwood County, hit hard by the double whammy of recession and decline in the textile industry, had the highest increase in poverty of any county in the nation with a population above 60,000, according to Census figures. ‘It is very tough times here,’ Greenwood County Councilman Mark Allison said.”
“Allison, a Realtor, said he ran for the council seat to try to help bring jobs to Greenwood. Since taking office in January, though, he’s seen a continued downturn, particularly in housing sales. ‘One of our big issues is foreclosures. The housing market has just plummeted,’ he said. ‘It’s a national issue. It’s not just Greenwood.’”
The Star News in North Carolina. “The company that owns the sprawling Sea Trail Golf Resort and Convention Center in Sunset Beach filed Tuesday for Chapter 11 bankruptcy protection. In the filing, Sea Trail Corp. listed assets of more than $34 million – most of that in real property. The company owns parcels within the Sea Trail community. The resort is connected to the Sea Trail Plantation residential community, which is not affected by Tuesday’s filing.”
“Sunset Beach Mayor Ronald Klein lives in Sea Trail Plantation, which uses the resort’s facilities. ‘Having the golf course in good condition and good operating order means quite a bit to the people here,’ Klein said Tuesday, and for people ‘to get full value out of their houses if they should decide to move on.’”
“The Chapter 11 will have some impact on the development’s condominiums, said Mary Ann Bechtel of Mary Ann Bechtel Real Estate in Ocean Isle Beach. ‘The biggest thing is that it is in a state of flux,’ she said.”
From Nooga.com in Tennessee. Chattanooga remains a relatively stable real estate market because of steady economic growth, Anne-Marie Wheelock, affiliate broker with ReMax Renaissance, said. Wheelock weighed in on the slight uptick in foreclosures and said she isn’t significantly concerned with those numbers. ‘When banks release foreclosures, it is important that they not flood the market and dilute the value properties,’ she said. ‘An increase in foreclosures could be the result of lenders finalizing backed-up foreclosure paperwork that had been put on hold during the robo-signing controversy last year,’ she also said.”
“Dwayne McMillen, a real estate broker with Crye-Leike Realtors in Hixson, said that—overall—he is positive about the future of his business. Although he said foreclosures are always a concern, the biggest issue is the national economy. ‘There is this shadow inventory that is still going to hit the market,’ he said. ‘That has been a concern. We obviously don’t have a real clue on how many of these units will be local, how many nationwide.’”
The Tennessean. “In an interview with The Tennessean before addressing area real estate professionals at a luncheon, Frank Nothaft, VP and chief economist at mortgage giant Freddie Mac said he expects local home prices and sales to pick up steam by next year, though gains will be modest. Q: Can you talk about Middle Tennessee’s housing recovery? Have home prices here finally hit bottom?”
“A: ‘In Nashville, prices in relationship to income have come back in balance. If Nashville is not at bottom, it’s very well close to the bottom,’ Nothaft said. ‘I’d be surprised if there was a further slip in prices.’”
“Q: Many reports note how tight lending remains in the aftermath of the credit crisis. How would you evaluate it? A: ‘We don’t want to compare lending to the standards of five years ago. Underwriting standards have swung away from high-risk lending. Lenders are no longer dealing with borrowers with low credit scores with subprime ratings, and they’re not doing, what we call, ‘no-doc’ lending anymore,’ Nothaft said, referring to loans made with little or no documentation of employment, income and other key data.”
“‘In the primary market, the emphasis is now on full documentation. We verify income, verify jobs, and verify other assets and other liquidity in case of a rainy day. We’ve gone back to the underwriting fundamentals of the 1990s.’”
“Q: Why wasn’t this the case in the run-up to the housing boom? A: ‘I think some of the challenges we faced at the time when the subprime market was beginning to collapse, in the early part of 2007, was that we still felt the responsibility to provide stability and liquidity to the home mortgage market, and at the time, we lowered some of our internal standards for mortgages,’ he said.”
“‘We underestimated the risks in the marketplace at the time. We had the mistaken view that ‘no-doc’ loans would be of lower risk. In retrospect, those were not good decisions because those loans performed poorly.’”
The Suffolk Herald in Virginia. “In case there was any question about it, the effects of the recession, of the failed housing market and of the nation’s banking debacle continue to linger — even in Virginia and even right here at home in Suffolk.”
“When state regulators showed up at Bank of the Commonwealth locations around Hampton Roads on Friday to take the keys to the doors and the combinations to the safes, they put an end to a long, painful process that had cost the bank’s investors millions of dollars and — if not for the Federal Deposit Insurance Corp. — could have cost depositors even more. As with so many of the bank failures the nation has seen in recent years, the culprit was bad loans.”
“But looking even deeper, one must consider that someone had to approve those bad loans, despite the likely evidence that they were risky at the time of that approval. And, as we’ve seen in other cases in the ‘too-big-to-fail’ banking industry, there likely was a corporate philosophy of unchecked greed that encouraged approving even the riskiest of loans. As it turns out, Bank of the Commonwealth was not too big to fail.”
“The good news is that depositors were protected from the results of the failure. The FDIC did its job, and when all is said and done this failure will have cost American taxpayers very little, compared to the bailouts and stimulus programs that have been designed to save some of the nation’s biggest institutions during the past few years.’
“But Friday’s surprise announcement by the State Corporation Commission that the bank’s assets had been seized — including a branch right here in Suffolk — was a grim reminder that even here we are not isolated from the most extreme examples of the economic uncertainty that pervades our nation.”
More than half of all U.S. households hadn’t saved a penny in their 401(k) retirement accounts
And half of all Americans earn less than $500 per week. Where are they supposed to save from?
But good Christians like Gov. Perry, Michelle Bachmann, etc. want to take away these people’s only retirement lifeline: Social Security.
Well, at least they should put into their 401K the amount that is matched by the company.
I know of many where I work - who make a LOT more than $500/week - that don’t even bother to do the company match.
Free money goes down the drain, IMO.
401(k) all nicely packaged and locked away, ready for the government to come and take it away and give you a fixed annuity.
One controversial proposal comes from the Brookings Institute. Senior Fellow William Gale will talk about reinventing 401(k)s by substituting the current deduction for contributions with a flat-rate refundable credit that would be deposited directly into the saver’s account.
Gale of the Brookings Institute, says that a flat rate refundable credit will:
1.”Address long-standing concerns in the retirement saving system by improving incentives for most households to participate and by raising national saving.
2. Offset pressures created by the current weak economy for households to reduce their retirement saving.
3. Help solve the long-term fiscal problem facing the country by raising $450 billion over the next decade in a manner that is consistent with the principles of broad-based tax reform and distributes the fiscal burden in a progressive manner.”
I’m torn, because if I contribute to the 401k, I starve the beast by not giving them taxes now. But the more I sock away, the more they are liable to come and take later.
“But the more I sock away, the more they are liable to come and take later.”
But you don’t know that is what they will do, while you do know that you are hosed if you are retired and broke.
If you think tax rates will be higher in a future, then take the Roth option.
401(k) all nicely packaged and locked away, ready for the government to come and take it away and give you a fixed annuity.
And these trial ballons keep coming from one party…
……the Wall Street party.
“Well, at least they should put into their 401K the amount that is matched by the company. ”
Was that sarcasm, or are you unaware that many, probably most, of those $500 a week jobs have no 401K match from the employer?
Yes, I am aware that those people earning $500/week have no 401K, but I am not talking about those people.
Well, the post you were responding to said this:
“And half of all Americans earn less than $500 per week. Where are they supposed to save from?”
Your response was:
“Well, at least they should put into their 401K the amount that is matched by the company. ”
I guess you can see why I was confused.
Ther reason you were confused is because you did not read my entire post.
Even reading your entire post, I took away the same message.
The 401k match will go the way of the dodo soon enough, so it won’t even matter.
my job doesn’t match my 401K anymore. I still contribute, but it isn’t doing much good.
My company dosen’t offer a 401K match either I just put money in to save on taxes now and because I’ll need it later.
not expecting any government help in my future
I know of many where I work - who make a LOT more than $500/week - that don’t even bother to do the company match.
So do I. The match is free money, might as well take it if you can.
Of course, if you have 2 or 3 p/t jobs you probably don’t get a 401K and even if you do there probably is no match.
I know alot of people who cash out their 401K and pay the penalty when they change jobs
pretty lame
If only Social Security could be privatized (a popular Republican proposal), it would become far more efficient for Wall Street to swindle people out of their retirement savings.
‘it would become far more efficient for to swindle’
Considering that it’s practically all gone, the swindle was very efficient. How about they let me keep this money from now on?
The question I have in light of this study is; how many of these older people would have bought a house/refinanced if interest rates hadn’t been artificially low and house prices rocketing up?
And with “experts” and central bankers reassuring them that there was no bubble?
The question I have is, at what point (if ever) will an honest and plausible assessment of how the Fed’s rock-bottom interest rate policy distorted the operation of the U.S. financial system become the main stream consensus?
Hoenig critiques U.S. Fed in parting shot
Wed Sep 28, 2011 3:37pm EDT
By Carey Gillam
KANSAS CITY, Mo., Sept 28 (Reuters) - A departing Federal
Reserve official lit into the U.S. central bank’s ultra-easy
policies on Wednesday, saying they may be doing more harm than good and could harm economic growth over the long term.
“When you encourage consumption by inhibiting your interest
rates from rising to their equilibrium level, you will in fact
buy problems, and we have in fact bought problems,” Kansas City Federal Reserve Bank President Thomas Hoenig said in his final speech in office. He retires on Oct. 1.
…
He’s the smartest member of the Fed. Richard Smith in Dallas and the Narayana R. Kocherlakota of Minneapolis also have the same leanings and often support Hoenig, who speaks out most since he’s almost out. It’s sad the Fed has become so political.
With all due respect to Moman for citing his considerable intelligence, the Dallas Fed president is named Richard Fisher. I met him after a speech at the University of Arizona business school. Fisher is just as sharp in person as he is on radio, TV, or the Internet.
Thanks for the correction.
“Considering that it’s practically all gone,”
It’s only ‘gone’ if the US gov is going to start defaulting on its debts. Are the wealthy willing to give up their Treasury bonds as well? Because if we’re going to default on the one debt (to Joe6pack), then fairness dictates we should default on them all.
“How about they let me keep this money from now on?”
There is no arguing that the 15.3% (or whatever it is) entitlement payroll tax our generation pays is somewhat confiscatory, with little chance we will see a commensurate return on our ‘contributions’ in retirement. You can thank Alan Greenspan for pushing through the increase in FICA ‘contributions’ to this level.
let me keep this money from now on ??
Can I have my FICA money back that I started paying forty years ago with interest compounded at the rate of the CPI over those years ?? Thats a minimum rate of return.. I will take it…Where is my check ??
I will take it…Where is my check ??
in Afganastan or maybe Iraq ?
Considering that it’s practically all gone, the swindle was very efficient.”
yes government spent the surplus
no surplus anymore = now SS is a problem
Note to Cantankerous Intellectual Bomb Thrower:
ALL the Social Security money that has been collected from the 1930’s to present has BEEN SPENT.
EVERY DIME.
So glad I could not have had that money in my OWN name in my OWN account. At least there would have been SOMETHING left.
Does saying money “has been SPENT” mean the same thing for a sovereign government with a reserve currency as it does for an individual household?
You mean there is a difference between micro- and macro-economics? Someone needs to inform the Austrian School, toot sweet!
“…there is a difference between micro- and macro-economics?”
Apparently the macro-economics profession is just now waking up to the existence of a budget constraint. By contrast, the budget constraint is a pillar of the consumer theory in micro-economics.
Oh, so there is no difference- except one can print money, right?
“Oh, so there is no difference- except one can print money, right?”
My point was that the macro tribe seems confused about the difference between virtual paper and real wealth. They seem to think if they run the printing press a bit faster, more wealth will automatically flow forth like manna from Heaven.
Micro clansmen seem more in touch with real world constraints on time and resources. They stare you in the face at the household level, but perhaps magic is more readily available at the macro level to create wealth out of thin air.
But good Christians like Gov. Perry, Michelle Bachmann, etc. want to take away these people’s only retirement lifeline: Social Security.
Source? Oh - you don’t have one. But it is fun to make up goofy left wing talking points.
Hey - here is a clue. If the US government keeps spending the way it has been - there will be no social security for ANYONE.
But leftist have such good intentions. Give and give and give with other people’s money. It just makes you feel so good inside. Like doing God’s work.
FYI - when the Bible talks of charity - it talks of personal charity - your own time, treasure and talents. A point lost on leftists/socialists who think Jesus was just the first bearded socialist…
“Like doing God’s work.”
That’s Goldman’s job; not sure what it has to do with your strawman ‘leftists’?
Where’s the strawman? I’ve called banana boy out more than once, but this time he just described every leftist I’ve ever met in my life to a T.
It’s all about intentions, never about acutal results.
SS is a ponzi scheme, by definition it requires more contributions from later investors to pay out the early investors. I’m not sure why the media makes such a big deal out of Perry calling it what it is.
“The problem with socialists is that at some point they run out of other people’s money” Margaret Thatcher
Hey you guys, stop your name calling and just pony up. I’ll be expecting my checks pretty soon.
“by definition it requires more contributions from later investors to pay out the early investors.”
It actually doesn’t. The problems is the baby boom cohort is so disproportionately large, and their surplus wasn’t put in a tight enough ‘lock-box’ that it doesn’t allow right-wingers to shout that it’s now ‘gone’ (’gone’ the way all the money received from Treasuries is ‘gone’- ie spent by the gov- but somehow that’s different, I guess because the wealthy own a lot of Treasuries).
‘The problems is the baby boom cohort is so disproportionately large’
We haven’t known that all along?
Consider that the people “paying in” have the money spent on their behalf (when congress takes it and spends it), and then expect it to still be there (taken from someone else and given to them) when they retire.
Social Security is a generous lower/middle/upper class welfare program sold to the public as a Ponzi scheme.
“SS is a ponzi scheme, by definition it requires more contributions from later investors to pay out the early investors.”
Your analysis is incorrect:
1) SS is not a investment program. No one is saying it is. Ponzi schemes pretend to be investment programs.
2) A ponzi scheme promises above market rates of return which are paid from principal and not from real investment income or appreciation. The only investment income SS claims is the interest earned from the US treasuries it owns.
The real reason right wingers want to privatize SS is so that Wall St can get its grubby mittens on it.
’so that Wall St can get its grubby mittens on it’
It’s in the red, there’s nothing to take.
Let me keep my 15%; that’s the kind of ‘privatize’ I’m talking about!
Oh, I’m sure they’ll figure out a way to make money off of it. Otherwise why are they so eager to “privatize” it?
For instance: I could see them killing the disability portion of the program. That would free up some cashflow to “invest”. Then they would sell the “trust fund” bonds and “invest” that money as well.
“Let me keep my 15%;…”
There is no doubt in my mind that late baby-boomers (today’s 50-somethings) are going to get doubly hosed, first by paying the highest contribution rates over more of our working years than any preceding generation since Social Security went into effect, then later by getting squeezed in the bennies.
But is any politician on the campaign trail rationally pointing this out? If so, I am missing it…
Let’s see … Perry called SS “a ponzi scheme”. That sounds like he wants to eliminate it, or at least turn it over to the real ponzi scheme: Wall St.
FYI - when the Bible talks of charity - it talks of personal charity - your own time, treasure and talents. A point lost on leftists/socialists who think Jesus was just the first bearded socialist…
I suggest that you crack open the Book of Acts my friend, to chapter 2: verses 42-47:
” 42 They devoted themselves to the apostles’ teaching and to fellowship, to the breaking of bread and to prayer. 43 Everyone was filled with awe at the many wonders and signs performed by the apostles. 44 All the believers were together and had everything in common. 45 They sold property and possessions to give to anyone who had need. 46 Every day they continued to meet together in the temple courts. They broke bread in their homes and ate together with glad and sincere hearts, 47 praising God and enjoying the favor of all the people. And the Lord added to their number daily those who were being saved. ”
There are more passages related to this. The most striking one is where a man drops dead by the hand of God when he tries to hide some of his wealth from the community and keep it for himself.
So apparently they weren’t just socialists, there were pinko commies!
I’m certain that this is one passage that NEVER gets read from Fundy pulpits, especially at “Prosperity Gospel” churches.
Blessed are the poor: for yours is the kingdom of God.
Matthew 5:3
Hey - here is a clue. If the US government keeps spending the way it has been ??
$hit !!! One of the few times I agree with you 2fruit..
Lets start with the $700 Billion dollar boondoggle call the defense budget…I’m with ya…
“‘We will not have a full recovery until the economy improves overall,’ said Linda Simpson, with Weichert Realtors in Rockville. ‘Some buyers still do not grasp the idea that it is a buyers’ market and still a good time to purchase.’”
What an oxymoron that Linda is!
Is there any other business where the buyer is so maligned? If its a seller’s market, why aren’t you buying? If its a buyer market, dummy, why aren’t you buying?
Any other business, if you insult the buyer that consistently to his face, you’re gone. Even in the used car lot, the dealer waits until you pull away before calling you a chump.
“‘This is not just a one- to two-quarter event,’ he said. ‘This will be a multi-year phenomenon.’”
How many years has it been since HBB posters started saying this — maybe five years ago already?
Sept. 29, 2011, 12:01 a.m. EDT
5 money moves one debt-crisis expert is making now
Risk consultant Satyajit Das says global downturn is nowhere near done
By Jonathan Burton, MarketWatch
SAN FRANCISCO (MarketWatch) — There really is no polite way to convey what Satyajit Das is saying about the world that investors will face for several more years, but it must be said: The unwinding of the global debt crisis will make some people extremely wealthy, but most of us will have to live with less — in some cases far less.
Das is a Sydney, Australia-based risk consultant and for many years has been a leading expert on the use and abuse of credit derivatives. So after watching the world’s governments, businesses and consumers binge on cheap, borrowed money, and seeing central bankers and financial regulators doing little to stop it, Das decided this party would end badly.
Satyajit Das.
Soft-spoken and matter-of-fact, Das told anyone who would listen that the global economy was on the precipice of a credit crash which would trigger a worldwide deleveraging and the mother of all bear markets for stocks.
That was in 2006. Five years and one global debt crisis later, those same governments, businesses and consumers are hamstrung.
…
‘I think some of the challenges we faced at the time when the subprime market was beginning to collapse, in the early part of 2007, was that we still felt the responsibility to provide stability and liquidity to the home mortgage market’
“Still” felt the responsibility? I believe the former CEOs of the GSEs have testified that they started making these loans because they were losing market share.
Buying market share; priceless. They imagine they were selling something, rather than buying it.
More than half of all U.S. households hadn’t saved a penny in their 401(k) retirement accounts and the median 401(k) balance was just $34,000, Pew Charitable Trusts found in 2004. And that was before the recession devastated investments, housing values and net worth.”
Not to take anything from this article but how many people just have one 401k account nowadays? With job changes now common through-out a career it would be better to see the data of the total in all 401k/IRA plans for an individual.
I’m guessing that it is easy to look at the statistics they cited, and hard to do the more telling household-level analysis you described (adding up all 401(K)+IRA plans for individuals). The latter might require conducting a survey, as household-level data is not likely to already exist in consolidated form (e.g. at the IRS).
There are other plans to consider too such as the 354 plans, flex accounts, roth 401’s, etc.
Interesting point…I hadn’t thought about how I might appear in those statistics. Each time I change jobs I leave the 401(k) where it’s at. In a couple of cases that gives me easy access to that particular company’s stock if I were to want some. And by keeping stuff spread out I guess I have hopes that I’m a little safer even though I realize most of the standard funds are the same from plan to plan.
I have 4 different 401k accounts…
I work at a company where the average weekly gross pay is probably ~$700. You coudl argue that these employees dont make enought o save for retirement and most do not (I know, I do payroll and HR). However most of these people have plenty of money for expensive car leases, vacations, iphones, etc. I think it is not lack of income causing people to not save for retirement but the desire for all the trappings of wealth - even if they are not wealthy. I hate to hammer on consumerism as I think that has been discussed elsewhere but most seem helpless to save anything much less a large nest egg for retirement.
I agree with seriouslady. I have the largest income in my company (except for the owner) yet I have the oldest car on the parking lot and a cheap cell phone. The other employees whose income is much less than mine have new SUV’s, the expensive cell phones with internet, the whole consumer heaven stuff.
So if they lose their income, they have no savings. None.
You’re moving the goal posts. People who can afford to save but don’t is a separate issue. They will deserve what awaits them down the road.
The real issue is the bottom 50% of earners who can’t afford to save. And it’s not because they drive fancy cars or have expensive toys. It’s because they earn less than $500 a week. Without SS those people are dead meat.
‘The real issue is the bottom 50% of earners who can’t afford to save’
Which gets us back to globalism, the true ‘third rail’ of politics.
Yup. Agreed.
Poor people:
Don’t save.
Don’t invest.
Don’t buy real estate
Don’t buy cars.
Don’t “consume”.
Having evolved from a nation-state to a market-state, national boundaries don’t really matter to a multi-national’s bottom line. Any loss in US market share will easily be made up elsewhere in emerging markets - the upside there is far greater than established markets. Add to this the fact that the average American is entirely tapped out and has no ability to spend any more.
The reduced wages in the US is exactly how the globalism model works. This could have been anticipated decades ago.Why is this such a big surprise to anyone no being spoon-fed MSM fluff?
Please don’t let the facts get in the way of a good discussion. Don’t you know these people are entitled to Coach handbags, a yearly cruise, and everything else they see on TV that the rich and famous have? Why not them?
I’m joking - not really, but I do agree with you 100%, spending priorities are way out of whack for many of these people who expect someone else to help them out.
’spending priorities are way out of whack for many of these people’
Like having a “vacation home” when they are worried about their retirement? They have (gasp) medical problems! Who could’ve imagined that might happen?
I’d bet they thought the second house was going to make them money. Otherwise, why not just stay at a resort when on vacation?
I watched one of those HGTV househunting shows a couple weeks ago - the couple, in their 20s, were stretching to buy a 200k home in the Nashville area. Why they want a 200k starter home is beyond me, but I digress. They had to have a kitchen with tile floors, as linoleum floors were beneath them. The Realtor, who I found to be funny, kept telling them that tile was out of their price range. it’s just a proxy for the entitlement mentality many people have, must have everything now without saving a dime for it.
kept telling them that tile was out of their price range.
I have tiled many a floor back in the day.
Using HIGH end tile, putting in heated floor, etc. I was never over $2,000.
Using the cheap stuff - a few hundred dollars.
’tile was out of their price range’
Once it’s installed, who cares what the tile cost?
Is it just me or does it seem like most realtors have NEVER repaired, let alone built, a house in their lives?
My realtor referred to the last (1,000sf, $230,000) home I bought as a “starter” home. I corrected her be calling it my “ender” home, as I hope to never have to move again. It’s all I need. I often wonder at the size of families that were raised in this house in its eighty-plus year life.
The problem with youngsters these days is lack of imagination. Flooring, cabinets and fixtures can be replaced. They ought to be looking at the location of the home, which can’t be changed, and the basic soundness of the structure. Of course the lying realtards on these crappy shows never point out the obvious. It’s all about the cosmetic stuff, and to heck with the basics.
The only way I can stomach HGTV is with the sound off.
UHS who inherited a home, married into one, or never purchased one drive us batty. We’ve owned three. I think we get it. They like to verbally spend our $ without hesitation. But then again, all UHS do.
Home Depot had some pretty decent tile on sale for 79 cents/ft^2 this past weekend.
“…why not just stay at a resort when on vacation?”
That’s what gets me about vacation home buyers. Aren’t there any other parts of the world you might want to visit someday besides wherever your vacation home is located?
‘Vacation home buyers’ are basically speculators. It’s hard to work up a good boo-hoo for gamblers who lose, which is why the media doesn’t call them that.
I never understood the media’s fascination with calling small time people “real estate investors”. Investing requires actually understanding what you’re getting into, both the +/-, and having a “get out” point at which you cut your losses and move on.
What we’ve seen are “speculators” who just use their good credit rating to gamble that real estate will go up, without understanding anything about the bet.
Specuvestor is a fun middle ground, and still generous, IMO.
“…basically speculators…”
Spot on! They didn’t buy those resort condos because they wanted to spend every future vacation of their lives at the same locale; rather they ‘knew’ there would always be a greater fool to come along and buy their genius investment at a much higher price.
“I think it is not lack of income causing people to not save for retirement but the desire for all the trappings of wealth”
Let’s not fool ourselves- it’s always been that way. Read the fables, read the bibles- spendthrift is a constant in human history. That’s the beauty of something like Social Security- it saves it for them, and the country is better off, as a whole, for it.
“…read the bibles- spendthrift is a constant in human history.
…it saves it for them, and the country is better off, as a whole, for it.”
My grandfather, who was trained as a minister, did not like the Social Security system much. He felt it undermined incentives for private savings.
Seventy-six years after my grandfather made this observation, how are U.S. household savings looking compared to places like China or India where income is lower and they have no Social Security system?
Let me add that in my humble opinion, AG’s move to bump up the FICA rate to 15.3% did little to increase incentives for private saving.
My grandfather, who was trained as a minister, did not like the Social Security system much. He felt it undermined incentives for private savings.
And many other ministers and priests disagree with him. As I pointe dout to banana boy above, the Book Of Acts chronicles how early Christians lived a communal life.
Christianity == Capitalism is a Protestant Fundamentalist invention (along with the so called “Rapture”).
And many other ministers and priests disagree with him. As I pointe dout to banana boy above, the Book Of Acts chronicles how early Christians lived a communal life.
Here is the POINT all lefties and socialist miss.
Nowhere does Jesus say anything along the lines of “Go out and institute huge bureaucracies that will take money from some people at the point of a sword and give that money to other people as a politician sees fit.”
The Bible DOES say to give from your OWN time, talent and treasures.
Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.” - 2 Corinthians 9:7
Sorry Banana, but when the rich guy lied to Peter and told him that he was handing over everything to the commune, he was struck dead as it wasn’t true. The Book of Acts is VERY clear about this and that is how the early Christians lived. I know that doesn’t fit in with our Darwinian survival of the fittest Capitalist system that Protestant Fundies seem so enamored with.
Nowhere does Jesus say anything along the lines of “Go out and institute huge bureaucracies that will take money from some people at the point of a sword and give that money to other people as a politician sees fit.
He did say “Render unto Caesar that which is Caesar’s” when asked by the Jews if they should pay the tax to the Roman Empire (and that was not the answer they were hoping for).
He did say “Render unto Caesar that which is Caesar’s” when asked by the Jews if they should pay the tax to the Roman Empire (and that was not the answer they were hoping for).
Exactly my point.
Don’t think for a minute that all the socialist programs we have today are doing God’s work or that by increasing them (and the taxes that fund them) we are doing God’s work.
That needs to come freely from the heart. A point socialists don’t seem to grasp. Spending other people’s money is tyranny - not the work of God.
Peter seemed to think that the commune was entitled to the rich man’s money, and God struck him down when he withheld it.
Don’t think for a minute that all the socialist programs we have today are doing God’s work or that by increasing them (and the taxes that fund them) we are doing God’s work.
Of course not. I’m just pointing out that “socialism” isn’t incompatible with the Gospel.
But Darwinistic Capitalism is incompatible with the Gospel.
Those Christians in Acts were not commanded to throw all their stuff in common, they thought it was a good idea because they were sure it would only be a short time until the second coming. The guy who lied, he was guilty of lying. That’s all.
Tax and transfer is by all measures the opposite of charity.
“That needs to come freely from the heart. A point socialists don’t seem to grasp”
Oh they grasp it alright. They know that most people are selfish-kick-you-when-you’re-down bastards.
ESPECIALLY the ones with lots of money.
“how are U.S. household savings looking compared to places like China or India where income is lower and they have no Social Security system?”
Don’t mistake the habits of the first generation to achieve a semblance of wealth and comfort for the habits of those generations to come.
The path to hell was paved with good intentions. Both welfare and Social Security were conceived as a fall-stop for people who either didn’t have the types of jobs that paid enough for retirement/emergency savings, or had unforeseen mishaps: injury, or the loss of a supporting spouse. Now, unfortunately, SS and welfare are built into too many people’s life equation. No longer an emergency fund, but a lifestyle.
OASDI (Old Age, Survivors and Disability Insurance) was not a bad idea until it morphed into a cash cow to fund retirees’ Winnebago purchases through current workers’ “contributions”…
You do know that the average SS payout is $1000 a month, right?
Tried “living it up” on $1000 month lately? Of course you haven’t.
have plenty of money for expensive car leases, vacations, iphones, etc ??
From what I have observed, I think many feel the system is so severely stacked against them and barring some event that would take them to the upper middle class, they will always be week-to-week, month-to-month…So, the philosophy is, I will just enjoy myself as best I can along the way…
Pretty much.
I notice increasing numbers of MSM articles indicating no recovery in housing for several years to come. This one throws out 2015 (four years from now) as the time until any gains whatever in U.S. home prices are realized.
Froma Harrop: Housing bust has a good side
01:00 AM EDT on Sunday, September 25, 2011
By Froma Harrop
Anyone who has seen a friend kick an addiction — be it to alcohol, drugs or cigarettes — knows the extreme discomfort and force-of-will required. America has long suffered repeated bouts of binging on real estate. The booms inevitably trigger busts, one of which we’re now in deep.
But there is some bright side here. As they say, with pain comes gain. The collapse in house prices could help the environment, stabilize family finances and strengthen our economic base over the long term.
True, the housing crash continues to drag down today’s economy. Prices have fallen nearly 32 percent from their 2005 high, according to the Standard & Poor’s Case-Shiller 20-city index. One in five Americans with a mortgage is “underwater.” That means that they owe more on their home than the home can sell for. Economists expect house prices to rise only about 1 percent between now and 2015, leading some to call this a “lost decade” for homeowning.
What we really have is a return to certain realities obscured by the housing bubble. In recent years, up to 2007, soaring house prices created a “wealth effect.” This was an illusion of newfound prosperity, which prompted homeowners to borrow heavily off their rising equity and spend the money, much of it at the mall. They didn’t save much for retirement, figuring that they could live off the proceeds from selling their homes. Shabby lending practices exploded, snaring many Americans who could not afford what they were buying into paycheck-to-paycheck existences or foreclosure.
When the music stopped, the wealth effect went into reverse. Families pulled back on spending. They began to “de-leverage” their finances, that is, start paying off their debt. Construction workers, landscapers, salespeople and others living off the bubble lost their jobs.
The resulting unemployment is painful, but won’t the American economy become stronger when families start carefully investing for their future, rather than relying on the magic-mushroom “high” of ever-rising home prices? Isn’t it better for the environment that prospective homebuyers now value smaller houses that use less energy, take up less space and are often closer to work, schools and shopping?
…
I have never understood my mom/dad don’t want their kids to be able to afford a house in the neighborhood they grew up in.
This includes both affordable housing prices and affordable property taxes.
Instead - they left their kids Long Island ALL over the country.
$500,000 for a fixer-upper crack shack with $12,000/year in property taxes.
And mom/dad wonder why all their kids moved away and they see them only 1 time per year…
Instead - they left their kids Long Island ALL over the country.
$500,000 for a fixer-upper crack shack with $12,000/year in property taxes.
FWIW, that is NOT typical “ALL over the country.” It’s only true in select regions (mostly on the East Coast).
In my neck of the woods 500K gets you a pretty spiffy house and the property tax would be about 4K. Even in the people’s republic of California the property tax on a 500K house is $5K and not 12K.
Where I live, 500k will get you TWO 3000 sqft houses in a VERY nice neighborhood near a golf course.
I have never understood my mom/dad don’t want their kids to be able to afford a house in the neighborhood they grew up in.
I think there is an assumption that they will magically find a job that pays enough to live there even though the houses are extremely expensive.
“They didn’t save much for retirement, figuring that they could live off the proceeds from selling their homes. ”
I don’t think that even entered their minds. They only saw free money.
When living in South Lake Tahoe 2004-2006, people unabashedly spoke of their homes as their retiremement accounts. No matter where you went, the topic of conversation was real estate.
““When you encourage consumption by inhibiting your interest rates from rising to their equilibrium level, you will in fact buy problems, and we have in fact bought problems,” Kansas City Federal Reserve Bank President Thomas Hoenig said in his final speech in office. He retires on Oct. 1.”
The problem with encouraging consumption with low interest rates is that it leads to the major flow of money into debt servicing. Debt servicing does not create jobs by putting more product before the consumer. In today’s market place just the purchase of a house and car can move all discretionary income from the ability to purchase other items over into debt servicing.
Preach it, Ron!
Big news from Tucson is that yet another call center is hiring this week. It’s a collection agency. What a surprise.
More $10/hr jobs. I guess it’s better than nothing.
You sound like the people commenting on the fishwrap story.
Now, if you’ll excuse me, I think I’ll go apply for the awesome job that one of the fishwrap story commenters just posted.
‘Retirement Heist’: How Firms Trimmed Pensions
(8 minute audio or text)
http://www.npr.org/2011/09/29/140344871/retirement-heist-how-firms-trimmed-pensions
(I thought this link applied to this thread more. I put it in B&B first. This was a good segment, chock full of information, not opinion.)
“In 2007, 32 percent of households headed by someone age 65 to 74 were carrying home mortgage debt, and nearly 19 percent of households headed by those 75 and older had a mortgage.”
That is just insane. I wonder what the figures had been two decades earlier.
Just going through a few friends. One is 75 and he has a mortgage. One is age 62 and she has a mortgage that is in default. Another one is age 62 and he has a mortgage.
And it is insane.
Only in some fantasy world do people have paid off mortgages in their old age.
These things change, but a few years ago I read up on the food stamp and Medicare rules very carefully. And the bottom line is, your house is excluded from whether or not you qualify for these programs.
So if you own your house free and clear, can scare up enough money to pay heat and property taxes, can walk places and eat rice and beans, you’ll have food, health care and shelter. It wouldn’t be fun, but one could get by until things improved.
Why would anyone want to give up that security?
“Why would anyone want to give up that security?”
Beats me, WT Economist, but that’s what we’re thinking. No house payment and just the insurance, taxes, and maintenance is manageable as a senior.
I just recently read up on the medicare and food stamp programs for my widowed mother, and it still applies. It’s not part of the means testing, Thank God.
http://www.ft.com/intl/indepth/us-foreclosure-crisis
SEC probes banks over mortgage loans
The US regulator is examining whether RBS and Credit Suisse misled shareholders regarding loan repurchase requests - Sep 28 2011
US mortgage fraud reports surge by 88%
Lenders taking back bad home loans sold to investors blamed for the rise revealed in a US Treasury Department report - Sep 28 2011
US homeowners rush to refinance mortgages
Applications surge due to low borrowing costs, but activity may be short lived given the volatile trading of market interest rates - Sep 28 2011
Freddie under fire over bad loan procedures
Audit criticises mortgage financier’s repurchase methods, saying they are probably saddling taxpayers with billions of dollars in losses - Sep 27 2011
Housing regulator accused of poor oversight
A federal auditor has found that the agency overseeing Fannie Mae and Freddie Mac failed to catch costly foreclosure irregularities - Sep 23 2011
“Sunset Beach Mayor Ronald Klein lives in Sea Trail Plantation, which uses the resort’s facilities. ‘Having the golf course in good condition and good operating order means quite a bit to the people here,’ Klein said Tuesday, and for people ‘to get full value out of their houses if they should decide to move on.’”
“…..and for people ‘to get full value out of their houses if they should decide to move on.’”
Mayor Ronald,… and there’s only one type of “moving on” that’s going to get you out of this!!