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Tan-Man pleads for more government "help" to ease lending (while still under SEC Investigation)
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2007 Oct 30, 10:15am 18,725 views 130 comments
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thenuttyneutron
2007 Nov 2, 5:46am
@Dinor,
You are completly correct on that. I work at a power plant in Ohio as a "blue collar" worker. My coworkers and I stash lots of cash away in our retirement accounts. I know of people with 30+years of work history with more than 1 million dollars in the 401k/403 accounts. This is going to be a good nest egg to add to the pension we are promised and social security. I have only been there 2 years but managed to maximize my contributions pre tax to my 401k last year and will max out this year.
There is somthing simple about the blue collar worker. We are happy if we just have cold beers on our days off and we will drive the same beatup cars for 20+years. Keeping up with the Jones is just a stupid idea to us.
Lost Cause
2007 Nov 2, 5:47am
Schwarzenegger Discipline Shattered... What a joke. His first act was to borrow money to make the payments on the other loans. We never got out of the so-called financial crisis. He has been nothing but borrow and spend. He pushed a huge amount of bond debt. He never once exhibited restraint.
thenuttyneutron,
Well there's absolutely nothing inaccurate about what Peter or Duke are sharing. Fact is, most 401K's suck. Plain and simple. Most of the tech crowd get a little touchy when you say they have "options" (when they really don't). To stand here and say inflation and devaluation of the yankee dollar *aren't concerns is a little silly.
My question is... what will be the concern in '09? In '12 etc. There are always issues confronting our economy and... in ways the only "easy" day was yesterday. Here's what's worse (and someone may have sounded the alert prior) but the latest scuttlebutt is they are jockeying to roll out (and I kid you not) "Boomer Death Bonds". Will this suck or what? Unlike the old viaticals these will of course (in typical WS fashion) be "pooled" or "structured". Sound familiar? The big selling point I understand is that they have low/no cor. to equity markets! Yea!
What do want to bet in spite of the fact most people have investment "options" you can count on one hand in their 401K, THIS schlock will become a "default" option? I'm just glad it's Friday.
Peter P
2007 Nov 2, 6:27am
My exact problem. I have about 20 options to choose from in my 401k and none of them insulate me from the decline of the dollar or inflation.
My wife used to contribute most to foreign stocks. But the emerging markets are looking too crazy recently. It would be nice to have some FX funds. :(
Rank and file dudes that just kinda signed up and forgot about the whole deal and just put in their time.
Enough said.
Peter P
2007 Nov 2, 6:31am
Keeping up with the Jones is just a stupid idea to us.
Of course that is stupid. Vastly exceeding the Jones should be the goal.
Peter P
2007 Nov 2, 6:34am
African Americans were more likely to die than the average
Everybody has the same likelihood of dying eventually.
DennisN
2007 Nov 2, 6:39am
Citi is having an emergency board meeting over the weekend.
http://biz.yahoo.com/rb/071102/citigroup_boardmeeting.html
I wonder what that's all about? I wonder if Mish is right.
Does Citi have a lot of MBS exposure - or is it the realization that people are putting everything on their credit cards to try and make their mortgage payments - now they are walking away from the houses - so next stop - walk away from your credit card debt?
DennisN,
Looks like Citi CEO Chuck Prince is planning to resign. I'm sure that has something to do with it. As far as Wall Street firms go, it's 2 down so far (Prince presumably, and Stan O'Neal). Cayne at Bear Stearns is toast, especially when the WSJ is continuing to trash him - playing bridge and smoking pot while Rome burns. All the talking heads are bandying about the phrase, "cockroach phenomenon." As in, when you turn on the lights and see a roach (Merrill, Citi), you know there are a LOT more around.
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LA Daily News: Foreclosures, housing slump hurting California economy
And what else, pray tell, SHOULD the government have done to "ease lending" that is has not already done (which itself is the single biggest reason why houses here are so damned expensive)? The government (incl. Fed) thus far has:
1. Dropped short rates to 1% and held them there nearly 3 years.
2. Cut 50 bps when it should have been RAISING them to combat inflation/defend the USD.
3. Provided every conceivable preferential tax incentive known to mankind to inflate housing prices, including raising the capital gains "homestead' exemption to $250/500K, virtually waiving the old primary residency rule (replacing it with "any 2 will do"), generously expanding the 1031 exchange to RE, etc., etc.
4. Growing the GSEs to absorb 50% of the national mortgage market and (until recently) hiking the conforming price limit every year, regardless of how working class incomes were doing.
5. Deliberate non-enforcement of mortgage fraud laws, ignoring blatant cash-back financing scams, phantom/shill bidders, lending to illegal aliens, identity theft, allowing the NAR to run a virtual information monopoly (MLS) etc., etc.
6. No application of fiduciary rules/SOX to mortgage brokers, lax-to-nonexistent regulation of the RE industry vs. securities.
No non-rich person in L.A. can buy a house because (a) the prices are too damn high, and (b) the NINJA-ARM easy money spigot just got turned off. $417K should be PLENTY of money to buy a run-of-the-mill middle-class house *anywhere* in the U.S., given current incomes. Putting taxpayers on the hook for even MORE bad loans will not make them more "affordable", but create an even bigger moral hazard, reward the reckless & stupid, punish the responsible & prudent, prolong the inevitable bust, and make the aftermath even worse than it already is.
I guess Tan-Man had to throw in a couple of truthful statements just to confuse people, though his dates are off --it should be "late 1990s through 2006". Meanwhile, the man best known for that unique orange glow may be getting measured for an orange jump suit.
Discuss, enjoy...
HARM
#housing