First and foremost, my wife and I are hosting a happy hour on Thursday, December 3rd at Fleming’s Prime Steakhouse. As readers of my newsletter, we would be overjoyed to host you for a casual evening of great food, great drink, and great conversation. Details are at our website listed at the bottom of this newsletter.
And now back to your regularly scheduled rant.
We, as a nation, are in the throes of a very wild and debt-riddled recovery. It seems as though every time you turn on the news they either have a “Our economic messiah has arrived” statistic for you to show everything is great, or a “We’ve mortgaged our children to the Chinese who are using them to fund nuclear bombs” comment to show everything is terrible.
Gross Domestic Product (what we create as a nation) was downwardly revised in the 3rd quarter from 3.5% growth to 2.8% growth. Boooo. Home prices rose nationwide for the 5th straight month. Yay! 4.94% of all loans held by our banking system are 90 days or more delinquent (which is the most it’s ever been for 26 years) and an FDIC bank bailout fund is running in the red. Boooo. Existing home sales jumped upward by 10.1% nationwide (12.7% in the South). Yay! The dollar’s value has slid consistently for the past three months and China is going to try and replace the dollar as the international trade currency. Boooo. Consumer confidence is indicating that we will have a busy holiday season which is good for business and job creation. Yay!
Can everyone just make up their minds?
Truth of the matter is that Commander-in-Chief Barack is being told to spur job growth and stop the housing market deterioration while simultaneously not increasing the national deficit. That’s a lot like asking someone to run a marathon, but to breathe as little as possible while doing so.
Can’t. All. Be. Done. Under. Present. Circumstances. Period.
Pure Laissez-Faire economics (the idea that the markets are universally self-correcting and we should just let them do their thing) is dead. Someone in this global capitalistic game is going to try and mess with the system, so checks and balances need to be in place.
I don’t like running the money printing presses non-stop. I challenge you to find me one person who actually thinks that is a good and maintainable idea outside of extreme circumstances. But we are experiencing some EXTREME CIRCUMSTANCES. The black and white contest between ‘government should run everything’ versus ‘government should keep their nose out of everything’ is senseless. It’s all shades of gray and we’re pioneering uncharted economic territory right now.
Yes, large amounts of debt will come home to roost someday, no question about it. But who knows how much worse off we would be had we not been aggressive about addressing the economic collapse? Either way you slice it, the world’s financial waters will be choppy for the next few months. Join us for a cocktail on the 3rd to drown your concerns about it.
Tuesday, November 24, 2009
Wednesday, November 11, 2009
Obama is bribing you to buy a house. I would too, I just don't have billions of dollars to do it with
Well good; it’s officially official. The 1st time homebuyer $8000 tax credit has been extended. And, for Super Mario bonus points, they even threw in a move-up homebuyer’s tax credit of $6500. Here are the new rules that potential purchasers must adhere to:
-Get under contract by April 30th, 2010
-Close by June 30th, 2010
-Single people must have an income of $125,000 or below
-Married people must have a household income of $225,000 or below
-Must be buying a primary residence
-Must be 18 or older
-Home cannot exceed $800,000 purchase price
All of those rules apply to move-up buyers. Additionally, move-uppers must have lived at the residence they are vacating as their primary home for at least 5 consecutive years out of the past 8. Additionally, the new tax credit is not retroactive. So, I guess the mad dash to the closing table by the end of this month has ended. We can go back to enjoying the holidays and stop giving ourselves panic attacks from bad inspections or slow sellers.
This stimulus extension comes on the heels of the G-20 summit, where representatives of the 20 most powerful economic countries convened to discuss fiscal policy. The latest release from this brain-trust: keep that stimulus flowing. Unemployment in America recently hit 10.2% (which translates to 18.2% if you count the underemployed or those who gave up trying to find a job) and the numbers globally are just as bad. So, even though continued stimulus has a depressing effect on our currency and global clout, it was a decision that had to be made.
The grand concern that develops from this: inflation. Thus far, the needles on the primary gauges of inflation haven’t moved much, but the precursors are starting to make some serious noise. Noticed that gas prices have started going up again? And usually the winter is supposed to bring them down a bit? Yeah, that’s not an accident. Try buying some jewelry for your sweetheart this holiday season. Notice that everything is on sale but gold is not? Yup. There’s a reason for that, too.
So, the captains of this economic ship know full well that they are sailing in very dangerous economic waters. Thus far, the shoddy employment situation has cancelled out the non-stop churn of the money printing presses. But eventually the gobs-o’-cash training wheels will have to come off, and when they do, it will be a hard trudge back to pre-recession strength.
-Get under contract by April 30th, 2010
-Close by June 30th, 2010
-Single people must have an income of $125,000 or below
-Married people must have a household income of $225,000 or below
-Must be buying a primary residence
-Must be 18 or older
-Home cannot exceed $800,000 purchase price
All of those rules apply to move-up buyers. Additionally, move-uppers must have lived at the residence they are vacating as their primary home for at least 5 consecutive years out of the past 8. Additionally, the new tax credit is not retroactive. So, I guess the mad dash to the closing table by the end of this month has ended. We can go back to enjoying the holidays and stop giving ourselves panic attacks from bad inspections or slow sellers.
This stimulus extension comes on the heels of the G-20 summit, where representatives of the 20 most powerful economic countries convened to discuss fiscal policy. The latest release from this brain-trust: keep that stimulus flowing. Unemployment in America recently hit 10.2% (which translates to 18.2% if you count the underemployed or those who gave up trying to find a job) and the numbers globally are just as bad. So, even though continued stimulus has a depressing effect on our currency and global clout, it was a decision that had to be made.
The grand concern that develops from this: inflation. Thus far, the needles on the primary gauges of inflation haven’t moved much, but the precursors are starting to make some serious noise. Noticed that gas prices have started going up again? And usually the winter is supposed to bring them down a bit? Yeah, that’s not an accident. Try buying some jewelry for your sweetheart this holiday season. Notice that everything is on sale but gold is not? Yup. There’s a reason for that, too.
So, the captains of this economic ship know full well that they are sailing in very dangerous economic waters. Thus far, the shoddy employment situation has cancelled out the non-stop churn of the money printing presses. But eventually the gobs-o’-cash training wheels will have to come off, and when they do, it will be a hard trudge back to pre-recession strength.
Tuesday, November 3, 2009
Free money for sale, but for how much longer?
There seems to be a world of confusion surrounding the extension of the $8000 1st time homebuyer’s tax credit. For some reason, a lot of large news networks broadcast a story that made it appear that Congress had already passed legislation extending the opportunity to capitalize on it.
Allow me to clarify:
Thus far, the extension of the tax credit has made it through a couple of financial committees, but has not yet been debated on the open floor. The problem is that if they introduce the extension as a new autonomous bill, it will go to the back of the line and have to wait in queue until its turn to be debated. By that point, the November 30th deadline will have come and gone.
So, in order to circumvent that delay, many are trying to add the tax credit extension into an existing bill concerning an extension of unemployment benefits. So, not only do supporters need to convince naysayers that the housing tax credit extension is good, they have to simultaneously promote the unemployment benefits extension.
If your ears are bleeding right now, don’t worry: that’s a common reaction to seeing how screwy our legislative branch works. Just try not to get any on your keyboard.
There is talk of extending the benefits to non-1st timers, talk of expanding the monetary value of the benefits, and talk of slowly decreasing the benefits as 2010 progresses. Until something solid gets passed in Congress, I’d rather not bog you down with the details.
I am of the opinion that this would be money well-spent, as real estate continues to be the linchpin of any sustained economic recovery. However, I can see the validity of the opposing views, claiming we have already driven up too steep of a national debt to justify more artificial tax breaks. Makes me glad I’m not the guy responsible for making these decisions. Long story short: once we get something written in stone surrounding this tax credit, I’ll be the 1st to let you know.
In other news, I am pleased to announce that my wife Erin is leaving the world of education and is teaming up with me as a loan originator. Everyone (or at least those who are honest with themselves) knows that women comprise the wiser sex. So, I’m excited to bring my lovely and talented wife on board. I expect this is going to dramatically increase the service we can offer and the presence we will have in the community.
Swing by www.GregWhiteside.com and see all of the fancy new updates she has added. 2010 promises to be an exciting year for real estate and finance, and I am amped about the opportunity to tackle it side-by-side with the love of my life.
Allow me to clarify:
Thus far, the extension of the tax credit has made it through a couple of financial committees, but has not yet been debated on the open floor. The problem is that if they introduce the extension as a new autonomous bill, it will go to the back of the line and have to wait in queue until its turn to be debated. By that point, the November 30th deadline will have come and gone.
So, in order to circumvent that delay, many are trying to add the tax credit extension into an existing bill concerning an extension of unemployment benefits. So, not only do supporters need to convince naysayers that the housing tax credit extension is good, they have to simultaneously promote the unemployment benefits extension.
If your ears are bleeding right now, don’t worry: that’s a common reaction to seeing how screwy our legislative branch works. Just try not to get any on your keyboard.
There is talk of extending the benefits to non-1st timers, talk of expanding the monetary value of the benefits, and talk of slowly decreasing the benefits as 2010 progresses. Until something solid gets passed in Congress, I’d rather not bog you down with the details.
I am of the opinion that this would be money well-spent, as real estate continues to be the linchpin of any sustained economic recovery. However, I can see the validity of the opposing views, claiming we have already driven up too steep of a national debt to justify more artificial tax breaks. Makes me glad I’m not the guy responsible for making these decisions. Long story short: once we get something written in stone surrounding this tax credit, I’ll be the 1st to let you know.
In other news, I am pleased to announce that my wife Erin is leaving the world of education and is teaming up with me as a loan originator. Everyone (or at least those who are honest with themselves) knows that women comprise the wiser sex. So, I’m excited to bring my lovely and talented wife on board. I expect this is going to dramatically increase the service we can offer and the presence we will have in the community.
Swing by www.GregWhiteside.com and see all of the fancy new updates she has added. 2010 promises to be an exciting year for real estate and finance, and I am amped about the opportunity to tackle it side-by-side with the love of my life.
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