Tag Archive | "obama"
Posted on 12 June 2010. Tags: barack obama, blog political, blog real estate, california real estate, class warfare, credit cycle, Economics, Fannie Mae, financial system, fiscal policy, FNM, freedom, home prices, homes manhattan beach, housing policies, housing policy, housing prices, HUD, income manhattan beach, inflation, liberty, manhattan beach, manhattan beach homes, manhattan beach income, manhattan beach property, monetary policy, money, mortgage, mortgage deduction, obama, political blog, political economy, Politics, politics blog, politics real estate, prices housing, Real Estate, real estate blog, real estate economics, real estate prices, real estate tax, Rob Viglione, socal real estate, socalrea, socialism, southern california, tax, tax real estate, taxation
The White House is urging Congress to limit, or cut, the once untouchable tax break for mortgage interest. In traditional class warfare parlance, the White House cap on mortgage interest deductions will fall only upon the wealthy. Let’s not drink the Obama Kool-Aid – the effects of this legislative move will impact everyone.
The Obama administration is proposing reducing deductions for homeowners who earn more than $250,000 pear year. Since I’m a southern California Realtor®, I’ll bring up an example from my local market – the South Bay; in particular, Manhattan Beach, CA.
Chart from LA Times Local Neighborhoods.
Manhattan Beach is a wealthy southern California city, nestled along a prime beach-front location. With 38% of Manhattan Beach residents earning over $125,000 per year, we expect this legislative change will materially impact our local market.
When many home buyers calculate the amount of home they can afford, mortgage interest deductions on income factor heavily into capital service capacity, i.e. how much mortgage they can comfortably afford to pay every month. If a high income earner is in the 34% income tax bracket and has a $5,000 per month mortgage, of which, say, roughly $4,000 is comprised of interest payments, the net annual benefit of the tax break is $16,320, or $1,360 per month.
with a simple 5% mortgage rate, the effect of removing the tax break amounts to reducing home values by $326,400, or 34%, the marginal tax rate. These are very simple assumptions; the reality of this legislative change will likely not be as severe. Higher end properties will likely be impacted the most, with falling price levels manifesting in some way throughout the entire housing market.
President Bush attempted to eliminate the mortgage tax break in 2005, but was stopped by Congress. The Obama administration tried this same legislative change with last years budget, but met similar obstacles. Given that the real estate market is in such turmoil, and that so many people gain advantage from perpetuating this tax break, it is unlikely the White House proposal will be accepted by Congress.
What Does The Mortgage Tax Break Mean For The Economy?
There is no free lunch in economics weve all heard that term, right? The same is true for tax breaks, or any legislative market manipulation. Enabling borrowers to write off interest payments from their income tax liability increases incentives to borrow money to buy real estate. This ultimately skews capital structures in that less equity investment is made with purchases relative to debt assumption. Increasing debt levels simultaneously increases prices and risk. In essence, the mortgage tax break causes housing to be over-capitalized, siphoning disproportionate capital resources from other parts of the economy.
Eliminating the tax break makes good economic sense; however, the result will inevitably be a deflation in housing prices. The magnitude of the deflation is uncertain. Given that real estate markets are already on shaky grounds, reducing, or eliminating, policies that support home prices can potentially lead to a market route.
All things considered, it is too bad President Bush was not able to repeal this tax break in 2005. That was probably the best time to moderate an over-heated market, and realign national capital resources in a relatively stable environment. We may have missed that opportunity for some time.
Posted in Investing, Politics, Real Estate
Posted on 18 October 2009. Tags: AIG, American International Group, APR, bailouts, Bank of America, barack obama, BHO, Big Brother, BofA, Canada, Cancer Society, capitalism, Constitution, corporate bailouts, corporate welfare, Credit, credit cards, credit expansion cycle, debate, debt, direct talks, doctor, Economics, europe, Executive Order, Facebook, FDA, free enterprise, freedom, Health Care, history, insurance, Iran, liberty, mainstream media, MSM, Nobel Peace Prize, obama, Obamanator, physician, Politics, POTUS, President Obama, Randy Herrera, Romans, serfdom, serfs, servitude, slavery, socialism, Spain, tax bracket, taxes, taxpayer, torture, wall street
For everyone that has a Facebook account, the status updates can be a powerful tool to get your opinions across to your friends-sometimes I just can’t believe what some people say! A closet socialist friend of mine posted a congratulatory post about Obama’s Nobel Peace Prize… Continue Reading
Posted in Politics
Posted on 13 June 2009. Tags: barack obama, Brooke Musterman, business, career, Chicago, Economics, find your niche, graphic designer, New York, obama, redefine your career, Reptiles on Caffeine, rewarding career, stockbroker, teaching yoga, What Should I Do With My Life
In this, the winter of our economic discontent, its not surprising to see the number of people who are finding an opportunity to reinvent. Sure, sometimes it has more to do with just an itching to try something new than anything. But more often than not, this decision is terror-driven or security-driven. Ether way, once you get past the sheer panic of OH MY GOD! WHAT AM I GONNA DO NOW, you just may find yourself in a perfect position to try something new. Continue Reading
Posted in Economics, Featured, Frugality, Personal Finance
Posted on 21 April 2009. Tags: abuse of power, ACLU, alternative investments, American Civil Liberties Union, AmeriCorps, authoritarian, auto bailout, automakers, bailout, barack obama, Big Brother, bills, bisexual, bond auction, bond sales, bonds, budget deficit, buy apartment building, certification, Chrysler, condors, congress, control the Internet, credit markets, credit speads, Cybersecurity Act of 2009, debt, deflation, democrat, Detroit, dictatorship, eavesdropping, economy, Edward M. Kennedy Serve America Act, expenditures, federal spending, fiscal policy, gay, General Motors, GM, government power, guide to investing, how does government effect markets, income properties, inflation, internet freedom, Investing, iron condor, IT professionals, Jane Harman, Jay Rockefeller, legislation, lesbian, liberals, license, market insurance, monetary policy, monitor, national security, National Security Agency, National Service, nationalization, NSA, obama, Obamanomics, Options, paid volunteers, petition, poker, policy, president, private sector, protect against inflation, protect portfolio, public schools, public sector, public service, Real Estate, regulate, Rob Viglione, Rounders, Savings, school computers, Senate, servitude, shut down, signed into law, slavery, Socialists, spot the sucker, stocks, Ted Kennedy, Tennessee, thugs, trading system, transcripts, transgender, Treasury, unemployment, Web, web sites, West Virginia, wip out life savings, wiretap
Sen. Rockefeller proposes bill that would give government sweeping powers to control, monitor, and regulate the Internet, ACLU demands public schools stop blocking gay web sites on public computers, Rep. Jane Harman calls incriminating NSA wiretap “abuse of power,” National Service legislation signed into law that will cost $6 billion over 5 years by hiring “paid volunteers,” government will need to issue $2.4 trillion in new Treasury securities in 2009 to meet budget shortfalls and bailout program requirements, and U.S. to give another $5.5 billion to automakers… Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 20 April 2009. Tags: alternative investments, bank bailout, banking, banks, barack obama, bonds, budget, Bush administration, Cabinet, capitalism, Caterpillar, chairwoman, Citigroup, combines, congress, Crash Proof, credit crunch, credit spread, criminal, crisis, cut federal spending, debt, Deere & Co., deficit, democrat, department head, economic collapse, Economics, espionage, exports, farm equipment, federal, federal reserve, financial crisis, financial industry, financial system, fraud, free trade, freedom, globalization, government, Greed, guarantee, House Intelligence Committee, housing boom, imports, intervention, iron condors, Israel, Jane Harman, liberty, lobbyist, lobbyists, market insurance, market neutral, meltdown, MIT, monitor bailout program, municipal debt, National Security Agency, Neil Barofsky, NSA, obama, option, option strategy, peter schiff, Peter Schiff was right, Politics, power, President Obama, professor, protectionis, Putin, Real Estate, Rob Viglione, Russia, selling insurance, selling options, selling options for income, Simon Johnson, socialism, special investigator general, Spending, state, tariffs, TARP, too big to exist, trade, trading system, treasury bonds, Troubled Asset Relief Program, trucks, U.S. Treasury, unprecedented
Rep. Jane Harman exchanged favors for power-aided Israeli lobbyists accused of espionage, top government investigator says that bank bailouts are open to fraud, Obama tells Cabinet to cut spending by 0.02%, U.S. Treasury estimates it has lost $900 million of taxpayer money from holding $301 billion in Citigroup junk assets, Russian tariffs take toll on U.S. companies, and could the U.S. be headed for a Russian-style economic collapse circa 1998? Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 12 April 2009. Tags: affordable housing, banking, banks, barack obama, capitalism, China, commander, common stock, communism, community organizer, contractors, Crash Proof, Cuba, debt, deflation, Department of Housing and Urban Development, dollar, economic devlopment, Economics, embargo, federal, federal reserve, financial institutions, free enterprise, freedom, gas prices, general, Goldman Sachs, GS, housing, HUD, inflation, Investing, investors, iraq, lending, leverage, liberty, liquidity, loans, military, monetary policy, money supply, mortgages, nationalization, obama, Obamanomics, peter schiff, Politics, poor, portfolio, predicted financial crash, President Obama, printing, profitability, Ray Odierno, Real Estate, report, Rob Viglione, seasonal demand, sell shares, subprime, survey, Tillby Lundberg, Tim Geithner, treasuries, treasury bonds, Treasury Secretary, U.S. dollar, USD, war in iraq
HUD program turns out to benefit contractors and not the poor…go figure! China cranks up its printing presses-expect global inflation, Peter Schiff (“Dr. Doom”) discusses his book “Crash Proof”, Goldman Sachs plans to sell billions in stock to pay off government aid ASAP, gas prices up 5% in 3 weeks…inflation? Top U.S. general says we’ll be out of Iraq by 2011, and 75% of Americans want to lift Cuba embargo… Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 19 March 2009. Tags: American Recovery and Reinvestment Act, Atlanta, Attorney General, auto parts, bailout, Barack, bonds, bonus recipients, capitalism, Charles Rangel, collapose, congress, Crash Proof, debt, deflation, democrat, drug cartels, drug prohibition, drug war, Economics, Eric Holder, Fed, federal reserve, financial crash, free enterprise, Georgia, getting away with murder, gold, hedge inflation, inflation, interest rates, laws, local, long-term, medical marijuana, Mexico, montary policy, New York, obama, peter schiff, Politics, porkulus, President Obama, printing money, protectionism, Rob Viglione, socialism, state, stimulus bill, tax, tax bonuses, taxes, treasuries, U.S. dollar, War on Drugs
Congress wants to impose 90% tax on Wall St. bonus recipients, Fed will no longer raid legal marijuana dispensaries, auto parts suppliers to receive $5 billion in aid, Mexican drug cartels thriving in U.S., and the Federal Reserve creates $1.2 trillion in new money…just the latest in your Freedom Under Fire Report! Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 16 March 2009. Tags: agricultural, AIG, america, American International Group, bailouts, barack obama, Barclay's, Barney Frank, Bernard Madoff, bonuses, bridges, capitalism, China, Chinese, Commerce, commercial trucking project, competitive, confiscate, congress, consumption, corporate welfare, counterparties, credit markets, Deutsche Bank, domestic investment, economic downturn, Economics, exports, fair trade, federal aid, federal court, federal prosecutors, fiscal policy, forfeiture, free enterprise, free trade, freedom, global trade, globalization, Goldman Sachs, GS, highways, House of Representatives, imports, industrial, infrastructure, Merrill Lynch, Mexico, migrant workers, obama, Politics, ports, President Obama, proscription, protectionism, R&D, reciprocal trade war, research and development, roads, Rob Viglione, Ruth Madoff, small businesses, small-business loans, socialism, socialism for the rich, Societe Generale, sovereign wealth fund, stimulus package, tariffs, trade war, Treasury Department, united states, victims, welfare, White House
The trade wars begin-Mexico raises tariffs on U.S. exports in retaliation of truck project cancellation, Obama angry at A.I.G. over bonuses-tries to cut them, small businesses to be next bailout beneficiaries, government tries to track down and confiscate Madoff assets-who will keep them? China uses global downturn to boost competitive advantages, Jon Stewart rips apart Jim Cramer in debate on poor financial reporting…just the latest in your Freedom Under Fire Report! Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 05 March 2009. Tags: Adrian Fenty, AIG, American International Group, Angela Merkel, automotives, bankruptcy, block bill, central bank, Chancellor, Chief Information Officer, China, CIO, congress, Cook County, Craigslist, DC, deficit spending, demand disclosure, democrats, District of Columbia, economy, Erotic Services, fear mongering, federal government shuts down, federal lawsuit, federal reserve, fiscal policy, General Motors, Germany, GM, growth target, Health Care, Healthy Competition, Illinois, lawsuit, Mayor, monetary policy, nationalism, now, obama, omnibus spending bill, Opel, President Obama, prostitution, reform, republicans, Rob Viglione, Senate, Senate panel, sheriff, signs of recovery, social freedom, stopgap measure, take action, Thomas Dart, Vivek Kundra, who got bailout money, Zhou Xiaochuan
Republicans block spending bill in Senate over earmarks, Federal Reserve refuses to disclose identify of aid recipients-Senate challenges disclosure, America now has its first CIO, Obama says there is no time to delay Socialized health care, lawsuit attacks Craigslist in challenge to Web privacy, Chinese central bank sees signs of recovery, Germany in uproar of GM mismanagement…just the latest in your Freedom Under Fire Report! Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 02 March 2009. Tags: $900 million to Palestinians, adults behind bars, Afghanistan, Australia, bank Nationalists, benchmark rate, broadband internet, budget, budget growth, Bush administration, Bush memo, business expense, central bank, congress, Constitution, criminal, criminal correction, drug prohibition, economist, Fannie Mae, financial industry, Freddie Mac, free market libertarian, fuzzy math, Gaza, Governor Glenn Stevens, Hamas, Harvard, Homeowner Affordability and Stability Plan, homeowner bailout a mistake, honoraria, income tax, interest rates, iraq, Jeffrey A. Miron, Mavericks, Mayor, Medicare, mortgage industry, nationalization, NBA tickets, obama, phantom costs, police state, president bush, President Obama, prison spending, prison state, rendition powers, Rob Viglione, Ron Kirk, Senate Finance Committee, socialism, Socialist, Sweden, tax evasion, temporary nationalization turns permanent, terrorists, Texas, torture, U.S. trade representative, understate costs, unfettered, war funding, War on Drugs, war on terrorism, White House
White House budget found to have “fuzzy math” on war estimates, new role for federal government to provide broadband Internet, U.S. gives Palestinians $900 million, Harvard economist says bailing out homeowners is a mistake, 4th Obama appointee found evading taxes, bank Nationalists look to Sweden, temporary nationalization of mortgage industry now permanent, 1 in 31 adults behind bars in U.S., Australia leaves benchmark rate unchanged, and Bush memos claim unfettered rendition powers…just the latest in your Freedom Under Fire Report! Continue Reading
Posted in Featured, Freedom Under Fire
