It's just my opinion, I could be wrong

This is kinda a PSA post, along the lines of the rent vs buy calculation. Lots of people have been clamoring about house prices getting back to normal, and although that's happening, they are far from there yet. Many people are confused as to where they should be, and there are lots of useful guidelines (3x annual household income, etc.), and here's another one: A useful metric for calculating when prices are equivalent to rent amounts. If the total ownership amount (mortgage + taxes + insurance + HOA + upkeep) minus the amount going into principle is equal to the rent, the price is about "right". The rationale is that if you were renting, you could be saving the principle amount in a bank account, and be accumulating just as much "equity" as the person paying a higher cost to own. For a 30-year mortgage, about 1/4 of the payment is principle during the first 10 years or so, and it's about $6.32/month per 1K borrowed (for a 6.5% mortgage). So say you hav...

Everybody has an opinion on politics, and I am no different. When it comes to the presidential election, I think Obama will take it, and not just cause he's ahead in the polls. There's historical precedent on his side, and moreover, the election is likely to reflect an underlying statistic, which is easier to make predictions about. I'll tell you what I think each are... First, the historical precedent. America is entering a recession not unlike the one which preceded the Great Depression. I say preceded because the recession was just the economic correction of over inflated asset markets (sound familiar?), and would likely have been painful but short if not for the actions of the government in response to it. Instead of letting the markets correct and the participants take their losses, the people elected socialist leaning representatives to make the government solve their problems by nationalization. This, in turn, plunged the country into the depression, since they were ...

The more I think about it, the more I think this would be a hugely beneficial thing to have (for consumers, at least... not so helpful for scam artists). A national database with all real estate information, even just sales information, would go a long way toward stabilizing the housing market and reassuring people. Some things it should have: - Uniform monetary accounting The total sales price, and all special considerations and circumstances, should be recorded in a standard, uniform way. For example, there should be a net sales price which is the gross price minus any seller considerations, kickbacks, or down payment assistance. All parties providing all assistance should be in the public record, all non-monetary considerations should be included with valuation approximations, and all special terms documented. It should be against the law to provide incorrect information or not include material information, and the all parties (buyer, seller, agents, etc.) should be jointly and seve...

So today, our governator signed an executive order to force the state to pay all non-essential personnel federal minimum wage, lay off all temporary workers, and suspend all payment programs until the state passes a budget. Basically, this is what the California constitution requires (not spending money without a budget), but the legislature has been wink-nudge ignoring it for the last 5+ years of budget impasses, and this year looks no different. Arnold is hoping the order will prod the legislature to do their f-ing jobs (not likely), and the political backlash won't be inaccurately attributed to him instead of the legislature (also not likely). It's a good idea, I think, overall, but I don't think it goes far enough. The order allows for back-paying of everyone's normal wages after a budget is passed, so it really only hurts the lower-class employees who are less financially secure. Personally, I'd like to see a constitutional amendment which provides this action ...

Rather than being down on Congress for being corrupt and acting against the interests of the American people, maybe I should offer some suggestions for what they could better spend $300 billion dollars on than giving it to the lenders who created the housing bubble and resulting recession. So, in no particular order, here are some things Congress could spend money on which could help: Reform GSE oversight (cost guess: couple million) I'd suggest restricting their loan buying to conforming loans (eg: 20% down, fully amortizing) with a cap of say 5x the average annual income for areas. Enough to finance houses at sustainable prices, but restrictive enough to not get them into the $5.2 trillion dollar debt disaster we are currently bailing them out from. Develop national RE listing/info database (cost guess: hundred million) A national database for real estate listing, freely accessible to anyone, with uniform data presentation and historical information, would greatly help illuminate...

It boggles my mind that the only people who honestly and bluntly report what the US Congress is going is not the mainstream media, but rather the small blogs and whatnot. Something has to change; it's just ridiculous that our government so blatantly acts against the interests of the people, and our media ignores it. Or worse, acknowledges their actions but misrepresents them as neutral, or even worse as beneficial. I'm not sure if their actions or the general stupidity of the American people in analyzing them is a worse blight on the country, but they are both pretty horrible. Today's idiocy is Congress spending $300+ BILLION dollars on absorbing bank losses for giving out the bad loans which fueled the housing bubble and kept housing unaffordable for responsible Americans. ...but wait, that's not all! In addition, they are refinancing millions of borrowers who "own" properties they cannot possibly afford and most of whom will default on their home loans into ...

So an interesting thing is happening in the stock market, and I thought I'd blog about it cause it was interesting to me. If stock market stuff bores you, you might want to skip this post. So, recently (a week ago or so), the SEC made a new temporary rule that investors will not be allowed to naked short the stocks of select, large, financial institutions. Basically, this means in order to sell shorts on those stocks, the brokerage selling the short must own the stock shares. Since there's was not really an issue with defaulting on naked shorts, and it's very market specific, the rule is not designed to prevent any negative effects, but rather strictly to manipulate the market. Now, normally, a stock is pushed in both directions by stock buying and shorting. Buying pushes a stock higher, as more bids are fulfilled. Shorting pushes a stock lower, as it's basically the opposite pressure on the stock price (the brokerage is selling shares it holds for someone else onto the...