KeNo's Housing and Economic Portal: Wednesday January 19 Housing and Economic stories

Tuesday, January 18, 2011

Wednesday January 19 Housing and Economic stories

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TOP STORIES:

Non-Charitable Rich Should Lose Their Passport, Rich Guy Says - (blogs.wsj.com) Bill Gates and Warren Buffett have been accused of being too preachy in their drive to get the rich to give. They are rhetorical lightweights compared with Australia’s Dick Smith. Mr. Smith reaped millions of dollars from launching food and electronics companies. He also is adventurer who is fond of ballooning, driving solar cars and flying around the world in his helicopter. Mr. Smith has been on a crusade recently to persuade wealthy Australians to be as charitable as Americans. He says wealthy Australians donate only 1% of their wealth to charity, compared with somewhere from 10% to 15% in the U.S. “It’s just greed,” he told the Australian media. “What they’ll say is ‘we don’t do it publicly’, but I find the ones who say they don’t do it publicly in fact hardly give anything away.”

Debt leads SD man to burn house, death with wife - (www.signonsandiego.com) In a letter sent on the eve of his New Year’s Day death, Michael Cour of Santee warned of the tragedy to come. Recounting the brief missive, Cour’s stepsister, Cathryn Richman of La Mesa, said he wrote: “By the time you get this letter, (my wife) and I will be dead and our house will be burned down. ... We have nothing to live for.” Richman received the typed letter in the mail Monday and quickly turned it over to authorities, two days after the charred bodies of two people — apparently Cour, 60, and his wife, Janice Gervais, 70 — were found inside the remains of Santee house destroyed by a fire. Cour and Gervais entered the new year jobless, legally bankrupt and facing eviction. County records show that Wells Fargo Bank foreclosed on the Clifford Heights Road property in early December.

The problem was fraud, not subprime - (www.businessinsider.com) A number of analyses of the U.S. and global crisis begin by attempting to explain what they assume to be a paradox – how could so small a market segment (subprime housing and CDOs backed by subprime) have caused (1) the largest financial bubble in history, (2) a U.S. economic crisis, and (3) a nearly global crisis? To these scholars the obvious answer is that subprime lending could not have caused this traumatic trifecta. If follows that the importance of subprime lending must be overstated and there must be other, more powerful causes of the trifecta. I will show that the focus on subprime loans was excessive and allude briefly to the points I have made in prior columns about the variant causes of the global crisis.

Declining house prices leave owners where they were a decade ago - (www.ajc.com) Ten years ago, buying a house was considered a good investment. Fast-forward to today and many who were banking on a hefty return on that investment find themselves back where they started when it comes to the value of their homes. “Then there was a built-in theory that prices would never go down,” said David Tufts, president of the Marketing Directors, a condo sales and marketing firm. “Now we know that’s not true.” The National Association of Realtors recently reported the median sale price had fallen 16 percent since November 2009. The S&P Case-Shiller Index released last week shows home sale prices have reverted to what they were 10 years ago. “This is shocking,” said Marie Burgess, a real estate agent with Keller Williams Realty Consultants in Roswell. “And what makes this really surprising is Atlanta has always been considered a place where you could invest in real estate and turn a profit if you hung in there a couple of years.”

Lap Dancers, Cheap Sperm Expose Hidden Secrets of Prices - (www.bloomberg.com) Sperm is cheap. Lap dancers get bigger tips when they’re not on the pill. And China’s one-child policy helped inflate the housing bubble. These tantalizing observations can be found in “The Price of Everything,” Eduardo Porter’s energetic tour of the daily cost-benefit analysis called life. Human existence is all about tradeoffs: We choose a $2,500 bottle of Romanee-Conti Burgundy or the house white; we trade the freedom of singlehood for the companionship of marriage. “Every choice we make,” Porter writes, “is shaped by the prices of the options laid out before us -- what we assess to be their relative costs -- measured up against their benefits.”