Les Jones

Rent your unsold house until market improves? Probably not gonna work

Thursday, July 2nd, 2009 | Economics | Permalink | No Comments |

The New Homeowner Hallucination: “We’ll Rent For A Year And Then Sell When The Market Comes Back”

When I asked her what made her think the market would come back when rates were going higher, availability of credit was down, incomes were down, unemployment was up and willingness and availability of people to spend was down, she had no answer.

Even more amazing was that we looked at four places in a similar price range and almost all of them had a similar strategy…”rent it out for a year and then sell when things get better”…

All these high-end people think they’ll just keep burning through capital and that everything will self-correct in 12-months and then go right back to the idiotic pricing levels that they themselves were crazy enough to pay.

You know who’s trying this strategy with their own homes? Financial geniuses FDIC Chairman Sheila Blair and Treasury Secretary Timothy Geithner. The country is in the very best of hands.

What I’d like to do is just the opposite. Sell my house now and rent until the housing market finds its bottom. The challenge I’ve had is finding a rental big enough for my family. Finding one that wasn’t ungodly expensive would be a bonus, but just finding a four bedroom property to rent in a good school district ain’t easy.

Tags: Geithner, mortage mess

Bad assessment for Timothy Geithner’s role in the Asian IMF debacle

Sunday, March 8th, 2009 | Economics | Permalink | No Comments |

Sydney Morning Herald - Obama’s economic saviour savaged as Keating lets rip:

But Geithner, through his influence on the IMF, imposed the same cure the IMF had imposed on Latin America and Mexico. It was the wrong cure. Indeed, it only aggravated the problem.

Keating continued: “Soeharto’s government delivered 21 years of 7 per cent compound growth. It takes a gigantic fool to mess that up. But the IMF messed it up. The end result was the biggest fall in GDP in the 20th century. That dubious distinction went to Indonesia. And, of course, Soeharto lost power.”

Exactly who was the “gigantic fool”? It was, obviously, the man who wrote the program, Geithner, although Keating is prepared to put the then managing director of the IMF, the Frenchman Michel Camdessus, in the same category.

Tags: Geithner

Geithner’s Paulson-style reversal of plans

Wednesday, February 18th, 2009 | Economics | Permalink | No Comments |

Just as Treasury Secretary Paulson didn’t know what he was doing under Bush, his replacement Timothy Geithner is making it up from day to day under Obama:

Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face.

According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers.

They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn’t have enough time to work out many details or consult with others before the plan was supposed to be unveiled.

The sharp course change was one of the key reasons why Geithner’s plan — his first major policy initiative as Treasury secretary — landed with such a thud last Tuesday. Lawmakers, investors and analysts expressed dismay over the lack of specifics. Markets tanked, and fresh doubts arose about the hand now steering the country’s financial policy.

Our leaders have no idea what they’re doing. There’s no great and powerful Oz who has all the answers. There’s only a pitiful man behind the curtain.

We’re hoping for a few great men, but what we get instead is a committee of gray men in a smoke-filled room. Instead of trusting our faith to them we should take the advice of Adam Smith and Friedrich Hayek and let the multitudes of the marketplace make their own decisions. Get the government out of the way and the economy will eventually work itself out via the invisible hand. Government fiat can’t keep water from falling to its level.

Tags: bailout, Geithner, paulson

Income taxes weren’t Geithner’s only personal finance blunder

Tuesday, February 17th, 2009 | Misc | Permalink | No Comments |

iTulip - Timmy Geithner the debt serf: Who better to run the US Treasury Department than a poster child for debt serfdom?:

The couple bought a home in the Washington suburb of Bethesda, Md., in 1992 for $275,000, taking a mortgage of $202,300. Through a series of refinancings and the sale of two properties, they climbed the economic ladder until they bought a house for $1.6 million in Larchmont, N.Y., in 2004.

All of the Geithners’ mortgages - from big banks including Nationsbanc, which is now Bank of America; Chase Manhattan, which is now J.P. Morgan Chase; and Wells Fargo - carried adjustable-rate mortgages with the risk that annual rate increases could raise their interest payments to as much as 11.25 percent, though the couple tended to refinance or sell their homes before they faced a rate adjustment.

They also took out second mortgages, now known as home equity lines of credit, borrowing a total of nearly $1 million in 2002 on their second Bethesda home, which they bought a year earlier for $1,085,000.

In 2004, they sold that house for $1.45 million and bought their current house in the New York suburb of Larchmont with a $1 million Wells Fargo mortgage, later adding a $400,000 home equity line of credit, also from Wells Fargo.

Tags: Geithner