Tag Archive | "Real Estate"
Posted on 18 June 2010. Tags: agencies, american peasants, austrian economic theory, austrian economics, Big Brother, blog economics, blog political, blog politics, blog real estate, blogging political, blogging real estate, bubble real estate, buyer real estate, buying real estate, capital, capital structure, capitalism, conspiracy theory, crash, debt, debt capital, deflation, department housing urban, Department of Housing and Urban Development, depression, diluting currency, dollar, Economics, economics blog, economics blogging, economics real estate, equity, equity capital, Fannie Mae, federal agencies, federal housing administration, federal national mortgage association, federal reserve, federal reserve flow of funds, feudalism, fha, financing real estate, fiscal policy, FNM, Freddie Mac, government, government policy, great recession, holc, homeowner society, homeowners, homeowners loan corporation, homes, housing, housing bubble, housing bubble crash, housing policy, housing politics, housing recession, HUD, hyperinflation, inflation, institutions, interest rates mortgage, liquidity, monetary policy, mortgage, mortgage interest rates, mortgage rates, mortgages, ownership society, peasants, policy, policy housing, political, political blog, political blogging, political policy, Politics, politics blog, property, public institutions, quantitative easing, rates mortgage, Real Estate, real estate blog, real estate blogging, real estate bubble, real estate bubble crash, real estate buyers, real estate buying, real estate economics, real estate financing, real estate policies, real estate policy, real property, Road to Serfdom, serfdom, serfdom road, theory conspiracy, transfer ownership, U.S. dollar, urban housing, USD
The capital structure of US real estate assets has been in a long process of change. By subsidizing real estate and making mortgage debt artificially cheaper than equity capital, the US government has been effectively transferring real estate ownership from individuals to lending institutions and the Federal Reserve. Here’s how this game has been unfolding, and a warning to Americans that they will one day wake up in a country where most people live as feudalistic peasants, beholden to their banking and political overlords. Continue Reading
Posted in Economics, Politics, Real Estate
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 20 September 2009. Tags: 5 Steps To Freedom, Alan Greenspan, Big Brother, capital gains, capitalism, cash flow, Constitution, consumption, corporate taxes, create your own currency, cumulative taxation, currency, currency debasement, cut dependence on institutions, dollar, economic freedom, economic growth, Economics, effective tax burden, federal reserve, FI, financial freedom, financial institutions, financial intelligence, financial slavery, free enterprise, freedom, government, growth, income, income taxes, individual freedom, Individual Retirement Account, inflation, Investing, Jeff Nabers, liberty, middle class, nation of serfs, perpetual inflation, Phoebe Chongchua, Politics, property rights, punative taxation, purchasing power, Real Estate, real estate investing, regulation, regulations, revenue participation, Rob Viglione, royalty financing, Savings, self-directed IRA, serfdom, slavery, small business, socialism, solo 401(k), speculation, taxation, USD
The shackles of serfdom are being silently fastened to America. Every dollar Congress spends beyond its budget, every Federal Reserve Note printed, every tax, regulation, and government intrusion into our lives renders us less free. Ever wonder why it feels like it’s increasingly difficult to make ends meet? Remember the days when one spouse could work, the other raise the kids, and still save for a comfortable retirement? Those days are gone, but why? What’s next? The 5 Steps to Freedom: How To Cut Your Dependence On Institutions And Escape Financial Slavery, by Jeff Nabers explains what happened to our once prosperous society and how we can all take definite steps to escape what is to come. Continue Reading
Posted in Economics, Investing, Personal Finance, Politics
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 16 April 2009. Tags: Afghanistan, Al Qaeda, American Recovery and Reinvestment Act, anti-American, assault weapons, Austin, barack obama, Bill of Rights, capitalism, Civil War, Columbian, congress, Constitution, construction, court warrant, crash, democrat, Diane Feinstein, dictator, domestic communications, downturn, drug prohibition, drug violence, eavesdropping, Economics, firearms, foreclosure, free enterprise, free trade, freedom, Freedom Watch, globalization, governor, guerrillas, gun trafficking, gun trafficking treaty, guns, high-speed trains, House of Representatives, housing, housing market, Hugo Chavez, human rights violantions, identity, illegal spying, illegal trafficking, indivisible, Jim Dunnam, Justice Department, Latin America, law enforcement, liberty, Mexico, militia, mystery donors, National Security Agency, new home starts, NSA, organization, passenger rail, patriot, Politics, porkulus, President Obama, ratification, Real Estate, recession, Rick Perry, right to bear arms, Rob Viglione, secession, second amendment, Senate, Senate intelligence committee, slump, socialism, South America, stabilizing, stimulus, Taliban, Tea Party, terrorism, Texas, treaty, union, universities, Venezuela, War on Drugs, wiretapping
President Obama pushes ratification of gun trafficking treaty, housing market continues to crash-new home starts down 11% and foreclosures jumping 17%, Senate to call panel to investigate illegal NSA domestic spying, Obama unveils plan to spend another $13 billion and build high speed trains (it’s a down payment), Democrats attack Texas Gov. Perry over secession comments at tea party, Freedom Watch sues dictator Hugo Chavez for acts of terrorism and human rights violations, and a bit of good news: mystery donors give $45 million to universities… Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 13 April 2009. Tags: AAA, accountability, acquisition, Alan Meltzer, apartment building, bailout programs, banking, banks, barack obama, Ben Bernanke, Benjamin Graham, Big Brother, big government, bond auction, bond market, borrow, buy your first apartment building, california, Carnegie mellon, CFA, CFA study program, Chairman, charter, Chartered Financial Analyst, CNN, commercial real estate, competitive, conservative insurgency, credit markets, crowd out, debt, Delta Global Advisors, depression, eavesdropping, economy, fair tax, Fed historian, federal, federal reserve, financial system, fiscal policies, Georgia, government debt, hedge inflation, hedge risk, history, hyperinflation, independent media, inflation, Keynes, learn about CFA, Michael Pento, Milton Friedman, monetary policy, money, money printing, money supply, municipal bonds, munis, nest egg, Obama administration, Obamanomics, older workers, online, political economist, Politics, President Obama, private placement, private sector, progressive taxation, public auction, public oversight, Real Estate, recession, releveraging, Retirement, risk, risk management, risk mitigation, Rob Viglione, Santa Monica Tea Party, secrecy, socal real estate advisors, spend, state, state secrets, struggling to pay taxes, surveillance, tax protests, tax reform, taxation, tea parties, tears, The Freedom Factory, transparency, Treasury securities, unemployment, Utah, valuation, value investing, what is a CFA, wiretapping
Obama continues Bush policy of surveillance secrecy despite campaign promises, tax protests spark conservative insurgency online, submit video footage of your tax woes to CNN and you might be aired nationally, Fed historian and political economist predicts worse inflation than 1970s, consider real estate as an inflation hedge, municipal bond market shows signs of life, older workers 45 years and older face brunt of recession, and flood of government debt crowds out private economy… Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 13 April 2009. Tags: Al Pacino, American Recovery and Reinvestment Act, auto manufacturers, bailout, banking, banks, barack obama, Ben Bernanke, Big Brother, bonds, borrow, budget deficit, capital, capitalism, Chairman, China, congress, consequences, consumer-backed securities, contraction, Credit, current account, debt, debt deflation, debt mania, declining rates, decomposing inflation, deflation, Detroit, Devil's Advocate, economic growth, economic output, Economics, Employment, exports, Fed, federal reserve, financial system, free enterprise, free trade, general price level, globalization, government, Great Unwinding, hedge fund bailout, Hoisington, House of Representatives, household worth, imports, inflation, institutions, interest rates, Investment management company, Japan, long-term interest rates, M1, M2, M3, Milton Friedman, money creation, money equation, money supply, mortgage bailout, Net Worth, Obamanomics, political capital, Politics, President Obama, prices, print money, printing presses, private capital, Real Estate, Rob Viglione, Senate, sin, socialism, spend, stock market, TARP, tax the rich, taxation, taxes, trade, treasuries, unemployment, vanity, velocity of money, wealth destruction
There are two colossal events occurring in the world right now: Private credit and wealth is being destroyed, and in its place a good deal of money is being created. Much is taking place behind the scenes, driving this epic showdown between natural forces pushing for a return to sustainable equilibrium pitted against the full arsenal of man’s capability to resist. Just as the fog of war can obscure a battlefield until the end, the outcome of this struggle is far from clear. Nonetheless, there are some telling events to note, signs for which to watch, and consequences to mull. Continue Reading
Posted in Economics, Investing, Politics
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 08 April 2009. Tags: 20/20, American Recovery and Reinvestment Act, auto suppliers, bailout, bailouts and bull, banking, banks, barack obama, Big Brother, bureaucrats, Chrysler, Detroit, Early Head Start, Economics, Education, education market, Fannie Mae, FDIC, Federal Deposit Insurance Corporation, federal government, federal reserve, financial industry, financing, Freddie Mac, General Motors, goverment hiring, government, guerrilla, Head Start, housing, John Stosel, life insurers, market, monetary policy, mortgage, Obamanomics, oversight, Politics, pre-K, President Obama, print money, protectionism, quantitative easing, Real Estate, regulations, Rob Viglione, SEC, secondary market, soviet union, stimulus, TARP, Tim Geithner, Treasury Department, Troubled Asset Relief Program, wall street
Big Brother set to take over pre-Kindergarten education, John Stossel points out consequences of government education, $5 billion bailout unrolled for auto suppliers, government hiring Wall Street analysts caught in financial crisis, economists predict deflation will cause mortgage rates will drop to 4.2% by end of year, and Big Brother’s favorite life insurers set to receive bailouts… Continue Reading
Posted in Featured, Freedom Under Fire
