Category: Media

The iPhone Nanny

The WSJ ran an article entitled The New Money Apps over the weekend. I was iPhonehoping it would be about smartphone apps designed for the nouveaux riches. Something to help decorate McMansions or navigate country club admissions perhaps.

But it is even better than that. The article is about the burgeoning field of  personal finance in the form of bossy phone apps. No longer do those hapless consumers need to worry their little heads about how to spend and save. They can just do what their phone tells them.

Think of it as a really really sophisticated GPS system. Just enter “rich and happy” as the destination and follow the turn-by-turn directions.

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The Mortgage Interest Deduction Does Not Subsidize Lenders

There are days when I think I could rename this blog Stupid Things In SmartMoney and concentrate my efforts solely on that ironically Victorian House named publication. Today’s inspirationally bad offering is Mortgage Deduction Pads Lender Profits, in which we learn that “A tax perk aimed at homeowners ends up raising mortgage rates, research shows.”

Apparently, the mortgage interest deduction has the unintended consequence of driving up interest rates, harming those poor American homeowners it was meant to help. How does this happen? Well, here is where the story gets a little fuzzy.

Standard economics theory holds that consumer subsidies raise demand for goods, thereby shifting prices higher. With mortgages, the "price" is the interest rate.

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401k Fees are Not the Problem

Park Bench Crop Dēmos is one of those lobbyist think tank organizations. I do not know if there is a better term for that kind of outfit, but I think we all know what I am talking about. They raise money, issue reports, and generally attempt, constructively or not, to influence debate on one or more issues. There are hundreds, maybe thousands of them, filling a spectrum from far right to far left.

Dēmos  (the bar over the e tells you it is pronounced deemos and that they are hugely sophisticated) describes itself as “a non-partisan public policy research and advocacy organization.” A quick scan of their website will make it clear that they are towards the left end of the political spectrum. That is not where you will find me, but this is, last I looked, a free country. They can write about the tragedy of declining union membership and the subversive nature of Louisa May Alcott’s Little Women, and I can ignore them.

But last month they put out a “report” entitled The Retirement Savings Drain: The Hidden & Excessive Costs of 401ks. Sadly, it was not as universally ignored as it deserved to be.

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Ode to The Wealth Report

Turns out, that post from the WSJ’s Wealth Report that suggested that the rich work harder, which I discussed last month, was the last ever Wealth Report post.

I will miss it. Although not the largest producer of grist for my mill, it contributed its fair share. And I never did quite figure out who its intended audience was. Apparently, the blog aspired to being something for theKeyboard a-Michael Maggs wealthy to read. I am betting that is what the WSJ editors, salivating over potential ad revenue, had in mind. But in practice it had more of a gawking tourist in Richistan tone.

It inspired posts from me such as The Truth About the Economics of Investment Help and Millionaires as Role Models. I even got a little mileage out of the Wealth Report’s shocking revelation that people who make $300K do not feel rich.

Alas, no more.

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You Should Not Ignore Housing Data

The ironically named SmartMoney had a blog post yesterday raising the issue Should You Ignore Housing Data? That depends. Houses for Sale Signs

You should keep tabs on the health of the housing market if one of the following is true:

a) You are a person involved in the real estate business, including brokers, bankers, developers, and the construction trades.

b) You own, or hope to own, a house.

c) You rent real estate.

d) You have a financial interest in the health of the US economy, for example if you work in the US or any of its major trading partners.

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