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skeptictank's comments:
on Home Buying
I must disagree with your current guest: the $8K tax credit is being used as part of the down payment now - FHA is allowing this. So basically people can put nothing down to buy a house if they qualify for the $8K tax credit.
Also, FHA is allowing very high DTI ratios for these first time buyers. FHA is the new subprime. This is why FHA is facing a crisis and will need to be bailed out probably within the next couple of years.
posted 3 years, 7 months ago
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on Home Buying
But hey, if they're talking about a $15K tax credit for home buyers, why not sit tight and wait for that?
posted 3 years, 7 months ago
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on Home Buying
The $8000 tax credit for first time buyers only makes houses $8000 more expensive than they should be.
The best thing that would happen for younger, first-time buyers would be for home prices to continue to decline. Historically, sane lending practices were that you shouldn't pay more than 3X houshold income for a house. Median home prices in Portland are still over $250K. Median houshold income in Portland was about $60K (but that was before the downturn, likely lower now with 12.2% unemployment) which means that the maximum that the median buyer can buy is a $180K home.
We've got a ways to go before we get back to affordability in Portland. Forget about more tax credits, let the prices fall so that we're not enslaving the next generation in excessive debt. Think about it: if housing was affordable again that would free up a lot of money that could be used in more productive areas of the economy which could lead to a sustainable recovery, instead of the debt-based recovery we're trying to have.
posted 3 years, 7 months ago
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on Home Buying
Condos remaining vacant because FHA is very restrictive about funding condo mortgages and most 1st time buyers right now are getting FHA loans because they only have to put 3.5% down (how many people do you know with $50K to $60K for a 20% downpayment?).
posted 3 years, 7 months ago
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on The Curse of the Good Girl
Yes! I feel a huge pressure to be a "good guy". To not fail, to not risk, to not rock the boat. To not disagree in a meeting. Fear of conflict.
As a guy, I don't sit in such a way as to take up "space". Especially not in a business meeting where there are superiors present. Please don't stereotype all of us guys as sitting in a way that "takes up space".
Yes, I suspect girls have more pressure to act in some of these ways, but please do not discount the fact that men who aren't in a power position in our society (like bosses, etc.) have every bit as much pressure on them to act in certain expected ways.
posted 3 years, 8 months ago
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on Jobless Recovery
Actually, the problem right now is that we're not getting "Creative Destruction" in the right areas. We need bad debt to either be defaulted on or paid off - that will allow us to recover when folks aren't encumbered by debt. Instead government actions like TARP are keeping the bad debt around and that's going to prolong the misery.
posted 3 years, 8 months ago
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on Jobless Recovery
Indeed, all this talk of "green shoots" seems to be manufactured. The "recovery" has been for bankers only as the government pumps money into the banking system.
posted 3 years, 8 months ago
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on Jobless Recovery
Tektronix just announced a layoff that will happen at the end of the year. They are requiring those laid off to train their Chinese replacements. That's just plain wrong.
posted 3 years, 8 months ago
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on Jobless Recovery
There are a lot of people still in denial and still shopping and charging it. But the more people you know that are losing their jobs, the more you realize that it could hit you too - a lot of us who are still employed have cut back on spending drastically to increase savings.
posted 3 years, 8 months ago
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on Jobless Recovery
There will be aid for those who are unemployed to buy health insurance. That's part of the proposed bill.
posted 3 years, 8 months ago
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on Jobless Recovery
Let's not even call it a recovery - because it won't be without job creation in the private sector. Real job creation, not government-created jobs.
The big problem in our economy is debt - at all levels from government down to personal debt. We've reached an unsustainable level of debt and now we have reached the point where it needs to either be paid down or defaulted. The Government's response has been to encourage people to take on even more debt (Cash for Clunkers, $8000 first time homebuyers credit), but this won't work. Be prepared for about a decade of high unemployment.
posted 3 years, 8 months ago
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on Jobless Recovery
Recovery of out the last recession (the tech wreck, 2001 to 2003) was called a jobless recovery. However, this time around, we won't be able to have a sustainable recovery with out job creation. That's because unemployment is now too high and too broadbased.
posted 3 years, 8 months ago
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on Saving Your Pennies?
Couldn't agree more. The Powers That Be ( like Goldman Sachs and its subsidiary, the US Treasury ) want us to keep living beyond our means and borrowing. If we are going to create a more sustainable economy we need to start radically reducing our consumption. Refusing to consume can be an act of defiance.
posted 3 years, 10 months ago
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on Saving Your Pennies?
Yes, our economic model depends too heavily on consumption and living beyond our means. 70% of the economy is consumerism. That needs to change. That's not sustainable economically or ecologically. We need to produce more, consume less and save more.
posted 3 years, 10 months ago
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on Saving Your Pennies?
This idea that money is sitting around in bank accounts and being "wasted" seems odd. I keep my emergency fund in a bank. The purpose of that money is in case I have an emergency (lose a job, need a new roof, etc.) My emergency fund is a significant amount of money and I want it to be very safe - not in the market. It's not somehow languishing in the bank - it's there for emergencies.
posted 3 years, 10 months ago
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on Saving Your Pennies?
It's a false dichotomy to say that saving is hurting the economy. In fact, in the longrun an increase in savings will help the economy. There will be more money available for investment. Capitalism requires capital and we can't keep borrowing that capital from China.
posted 3 years, 10 months ago
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on Saving Your Pennies?
Save your money. This isn't just a regular recession, this is a reset of sorts. We're resetting to lower, more sustainable rate of consumption. The years from the mid-90's till 2007 were the aberration, now we're adjusting to a new normal.
We're saving 30% of our income (and that's not counting 401K contributions). Our goal is to have enough money to be able to weather long-term unemployment (1 or 2 years). If the worst doesn't happen, then we'll still have a nice nest egg and that will allow us a certain amount of freedom that we wouldn't have otherwise.
As a side benefit, lowering our consumption is beneficial for the environment.
posted 3 years, 10 months ago
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on Grow Your Own
My grandparents lived though the Depression and always had a huge garden. I would sometimes spend the summer with them and would help them out with the garden. Ever since then I've had the gardening bug. I've always had some kind of garden going, but this year I've expanded my veggie garden are by expanding into the front yard. The peas, beets, chard, and spinach are already in. The tomatoes have been started inside.
Also, I practice a very lazy form of gardening: no-till gardening. In the Fall you put down a layer of cardboard covered by about 8" of leaves. In the Spring I put some compost over that area and it's ready to plant. No tilling required and from what I hear it's actually better for the soil
posted 4 years, 1 month ago
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on The Future of Retirement
I'm not sure I buy this "pipeline" idea. If we had a growing economy then young people would find new niches in the economy even if old people weren't retiring.
posted 4 years, 1 month ago
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on The Future of Retirement
Most of us are going to have to learn to live with less. Our standard of living in the US peaked a few years ago and likely will not be at that level again for a generation or more due to the current economic crisis.
posted 4 years, 1 month ago
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