The Money Culture War

Yesterday’s New York Times carried a column worth reading by David Brooks. It is a little confused, even by the standards of Times columns, but the British Tankgist of it is a call to arms for a brand new culture war, this one over money.

I’m all for that.

Brooks starts out by recalling a centuries old idea.

The theory was that great nations start out tough-minded and energetic. Toughness and energy lead to wealth and power. Wealth and power lead to affluence and luxury. Affluence and luxury lead to decadence, corruption and decline.

This was a theory invented for, and more or less exclusively applied to, the fall of the Roman Empire. But don’t let the fact that it’s long since been cast aside by historians distract you. Brooks thinks we’ve gone soft.

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House Price Recap

It’s the last Tuesday of the month, and that means it’s S&P Case-Shiller Home Price Index Data Release Day. This month’s dollop continues the recent upswing we have seen in the past few months, so is not very newsworthy. (According to official Perce_cliff_house media sources, to be newsworthy it must either be a change in direction from the month before, or be down. Ideally both.)

In case you haven’t seen the numbers, which is likely, I’ll pass along the highlights. The 20-city composite was up 1.6% for July. That’s three up months in a row. The index is now up a not inconsiderable 3.6% since April.

Of course, that gain is dwarfed by the loss that went before. From July 2006 to April 2009 the index lost 32.6%. This little uptick leaves us 30.2% below the peak. And we are still down 4.2% for 2009.

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Numerical Fiction that Didn’t Take

Last Friday a dandy bit of numerical fiction hit the wires. I thought it was inflammatory and misleading on an issue of great national importance. On the other hand, I was looking forward to pointing out what a crock it was.Army physical exam

So you can understand my disappointment when it got only limited play and was more or less gone and forgotten by the weekend. Oh well.

As a consolation to myself, I’m going to write it up anyway. This won’t cure the letdown, but it may make me feel a little better.

The Reuters story had what I thought was a can’t-miss headline. "No Health Coverage Tied to 45,000 Deaths a Year". How could that not be the lead story for every Saturday paper in the country? Admittedly, for many blue-state types in the media it may have had a certain dog-bites-man aspect. But still, I would think that a dead body every 12 minutes would make great copy. I guess this is why I am not an editor.

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Forgiven Debt Really is Income

There was a pretty good post over at WiseBread yesterday on how if a credit card company forgives some of what you owe, what was forgiven is income 1040 you have to pay taxes on.

On the one hand, this is a point worth repeating because it seems to surprise most people. On the other hand, the post neglects to mention an important exception, and, moreover, feeds into the belief that this is an irrational fluke of the tax code. It isn’t. It makes sense.

You owe Credit Card Corporation (CCC) $5000. Realizing you are unlikely to pay them back in full, and now regretting lending you the money to begin with, CCC agrees to settle the debt for $2000 cash. You sell your PEZ dispenser collection on eBay and send them a check.

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Carnival of Personal Finance #223

It is time once again to check up on the wonderful world of personal finance bloggers, conveniently packaged into this week’s edition of the Carnival of Personal Finance. Hosted by Taking Charge, a blog, and edited by one person with an introduction by another, this week certainly gets points for production value.

Narrow Bridge Adventures offered up a primer on trading stocks on margin Keyboard a-Michael Maggs which was about 75% correct. At least the author makes it clear that he has never done this and doesn’t ever intend to. But I am growing tired of bloggers writing posts on topics they don’t know much about as if they did. Other novices are likely to be misled into doing something foolish.

On the other hand, a blogger who claims to be an amateur, Kyle at Amateur Asset Allocator, posted on How To Invest In A Low-Return Environment, i.e. the environment we are in now and expect to be in for a while. Besides the basics of watching out for fees and taxes, Kyle hits the nail on the head with what may be the most important investing advice of the year: "lower your expectations."

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