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REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.
The upcoming mid-term elections are getting more and more interesting after the primary results from last night and it’s getting more and more difficult for voters to figure out who’s crazy and who’s not, though they seem to be making some progress.
From the Lisa Benson archive at the Washington Post Writers Group.
Now that our attempt to purchase a short sale property has come to a disappointing conclusion (see this item from Monday for full details), the catharsis of sharing a few parting thoughts on the subject seemed to be in order so as to, perhaps, help others who might be in the middle of trying to buy a short sale property or thinking about doing so.
In contrast to the plight of underwater sellers, there appears to be little positive to relate from the buyer’s end of the transaction which consists of varying degrees of uncertainty, frustration, delays, and disappointment in what is an emotional roller coaster ride that no one deserves but, as was the case for the two of us, people are all too willing to give a shot because the house that they really want became available as a short sale at a reasonable asking price.
But, there is good news for short sale sellers – those who borrowed and spent way more than they should have – in that you can probably live there in your own house rent free for quite some time while the banks, real estate agents, and doe-eyed buyers stumble through this process that only seems to serve one purpose – “extend and pretend” for the banks, delaying the realization of losses for as long as possible.
Sellers can play the “extend and pretend” game too. Ideally, you’ll want to try to get your mortgage modified for about a year and, after that fails, then see if you can keep your home listed as a short sale for another year, bolstering your personal finances by tens of thousands of dollars during that time since you’re not making any mortgage payments.
If you think I’m bitter, you’d be absolutely correct.
Here are a few thoughts from an unsuccessful buyer’s perspective that might be helpful to anyone involved in or interested in trying to buy a short sale property.
Another neat graphic appears in The Economist on the occasion of OPEC celebrating its 50th anniversary yesterday, a period that can only be characterized as “a pretty good run”.
It’s funny how, after thousands of lives have been lost in recent wars in the region (an area that the U.S. would be about as interested in as the Congo if not for the oil), you don’t hear too many jokes asking “how did our oil get underneath their sand”.
For a good take on the mainstream financial media’s thoughts about gold, have a look at this item by Matt Phillips at the WSJ MarketBeat blog after Goldman Sachs said more Fed money printing is on tap and the metal responded by surging to a new all-time high:
In light of such prognostications from such a closely watched observer, it’s unsurprising to see gold and other precious metals marking big gains. Gold’s up more than 2%, clearing the $1,270 mark, a new record. Shares of Gold-related stocks are sizzling too. One of the arguments for gold of course is that Fed money printing is going to debase the dollar, which will make hard assets such as the yellow metal even more sought after.
Here at MarketBeat we’ve been on the record saying that gold is bubbly. We still think so. But if we were actively betting that that bubble is going to pop, we’d be in a world of pain. After taking a reprieve a few months ago gold has continued its upward drive.
Put simply: We’ve been wrong so far. Gold is up 16% year to date, much better than the roughly flat S&P performance. But we still think its dangerous to listen to the head-out-to-the-bunker-in-the-salt-flats-with-a-shotgun-a-year’s-supply-of-spam-and-sackful-of-gold-ingots crowd.
Gold is working, because it’s working, and it’ll continue working until it doesn’t. Then look out.
Yeah, look out, the gold bubble is going to burst – if not at $600, then $800 … if not at $800, then $1,000 … if not at $1,000, then $1,270, if not at $1,270, then …
Based on commentary like this, it would seem that we’ve still got at least a few years to go until gold prices get really crazy and writers like Phillips get even more frustrated. There is still a clearly dismissive view of investing in gold by many in the world today who just don’t seem willing or able – even at this point in the ongoing financial crisis – to consider the possibility that the current monetary system might just be fatally flawed.
From Jon Lansner’s Orange County Register blog comes a different way to think of ocean view property in Southern California where, by the way, sales volume and prices are both falling again according to yesterday’s report on August home sales from DataQuick.
From Eric Lewis of the Saddleback Valley News.
MUST READS
Japan intervenes to weaken yen – AP
The Case Against Homeownership – Time
Gold glitters at record high – CNN/Money
More sellers cut U.S. home prices for 3rd month – Reuters
Japan steps in to knock yen down from 15-year high – LA Times
`Death Spiral’ Awaits State Pensions, Illinois Leads Underfunding – Bloomberg
Housing inventory up in August as prices go down: Altos – REO Insider
Japan Sells Yen for First Time Since 2004 to Aid Growth – Bloomberg
Retirement on Hold: American Workers $6 Trillion Short – CNBC
Gold fever strikes mom and pop prospectors in U.S. – Reuters
The Curse of Fiat Money – Mises
Outlook Clouds Fed Move – WSJ
MARKETS/INVESTING
Oil falls below $76 as pipeline seen restarting – Reuters
Gold price may touch $1,300 by year-end – Business Standard
Pimco Makes $8.1 Billion Bet Against `Lost Decade’ of Deflation – Bloomberg
Fundamental Investors Should Fear Inflation, Not Deflation – Pacific Capital Associates
Connect the dots - dollar sinks, Treasury bond yields fall, gold zooms? – LA Times
Going for the Gold — Fundamental as Well as Technical – Barron’s
China defends forex policy but hikes yuan – MarketWatch
Stock Market Lessons from Elvis’ Infancy – BusinessWeek
ECONOMY/WORLD/HOUSING/BANKING
Need a job? Head to Washington, D.C. – CNN/Money
Charlie Munger on US Economy: Pain Not Over – CNBC
Chinese think tank warns US it will emerge as loser in trade war – Telegraph
China’s electricity consumption up 14.7% in August – China Daily
Canadian housing looks “overpriced”: OECD – yourhome.ca
California foreclosures rise for fourth month, up 16.6% in August – REO Insider
Southern California Home Sales Fall in August; Median Price Dips – DataQuick
Home Prices Face Three-Year Drop as Inventory Surge Looms – Bloomberg
Richmond Fed’s Lacker Wants High Threshold For More Fed Action – WSJ
Jan Hatzius Q&A On QE2 – Zero Hedge
By Tim Iacono, Since 2005
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