I feel a little silly doing this, but it seems like I need to make that case that house prices are important.
You might recall that the Great Recession started with a fall in house prices. A mountain range of bad mortgages and the bonds that they were packaged 
into got most of the attention, but let’s remember that the whole sub-prime accident-waiting-to-happen wouldn’t have existed without a decade long run up in house prices. And if that run up had by some miracle continued, the accident would be still waiting. (And getting worse.)
But even if American house prices hadn’t recently been the rug that got pulled out from under the global economy, it’s a topic of huge importance in the world of personal finance. More than two thirds of American households own the place that they live in. For nearly all those households, the house is the largest single asset and one bought with mostly borrowed money.
Read more »
If there is one topic that professional journalists just love to report on and analyze, it is the troubles of traditional newspapers. They’re in very bad shape, we are told, and if something is not done these vital institutions might just go away, obviously taking our civilization along with them. There are even pundits who quietly suggest that government subsidies are in order.
What is most weird about this (spectacularly self-serving) sort of commentary is that it often actually understates the economic problems that newspapers face. Some papers may stagger on for a few more years or even a decade or two, but make no mistake, this patient is terminal.
Imagine, if you will, that newspapers didn’t exist. Now imagine somebody came to you with an exciting new business idea. His plan is to print the news of the day on paper overnight in massive printing plants and distribute copies to driveways in the wee hours throughout the region using a network of motorized vehicles. This operation would be paid for mostly by selling advertizing, but he would also have to charge about a dollar a day to readers.
Read more »
This blog is primarily about bad advice, that is, the recommendation of unwise money choices. But I also have a nice sideline going in misinformation, statements about personal finance that are not merely foolish, but are flat-out objectively wrong.
A recurring topic in that area, you might call it a running gag, is the lack of tax saving advantages of Roth IRAs over 
traditional ones. When I started this blog a few months ago I assumed that most of the people who published misinformation about Roths knew better but had some motive, be it sinister or well-meaning, to mislead. Now I understand that they just don’t understand what they are talking about.
The latest infuriating instance of this is a blog post on Mint.com written by Michael B. Rubin, author of the book and blog Beyond Paycheck to Paycheck and "President of Total Candor, a financial planning education company." It was linked to by the Wall Street Journal’s Wallet blog.
Read more »
Last week the Baltimore Sun ran a list in picture gallery form of "Money Wasters to Avoid." It got picked up by the often amusing Consumerist, which 
was then noticed by the WSJ’s The Wallet, which is where my jaded mouse found it. And now I am going to write about it too.
To be fair, this particular bit of sound in the blogosphere echo chamber hasn’t much substance and likely wasn’t intended to be taken very seriously. I imagine a few summer interns brainstorming a list of things people waste money on, rounding up some stock photos, and then poof, it’s internet content.
But if I limited myself to commenting on things that truly deserve comment this blog wouldn’t be much fun to write.
The thirteen wasters of money are: the lottery, books, eating out, pets, DVD rentals, ATM fees, cigarettes, coffee breaks, bottled water, designer clothing, car washes, speeding, and bars.
Read more »
Yesterday at 9 AM Standard and Poor’s released the latest Case-Shiller Home Price Index data, showing that existing homes actually increased in price in May, for the first monthly rise since July 2006. All the major media outlets ran with it as their lead story, the stock market zoomed up more than 5%, and Fed
Chairman Bernanke announced that the recession is now officially over.
Okay, I made most of that up. But the C-S 20 city composite really was up for the first time in 33 months. And that’s really a big deal, not that anybody seems to have noticed. This is not an index that changes direction often. Before the run of 33 down months was a run of 55 consecutive up months going back to January 2002. (In fact, other than small declines in December 2001 and November 1998, the 10 city index was up every month from March 1997 to June 2006.)
Obviously, there is no guarantee that this will be the start of a long run of positive months, but a change in direction is a comparatively rare event and ought to be newsworthy. All the more so given the centrality of house prices in the causes of the Great Recession. And yet this isn’t apparently a big story.
Read more »
into got most of the attention, but let’s remember that the whole sub-prime accident-waiting-to-happen wouldn’t have existed without a decade long run up in house prices. And if that run up had by some miracle continued, the accident would be still waiting. (And getting worse.)
Housing, Media | Frank Curmudgeon | 
August 20, 2009 8:00 am | 
Comments (28) 
Subscribe