My Blog

Great Time to Buy a House?

I have never been interested in business, historically or otherwise.  This class, however, has certainly broadened my views and made me more aware of what is going on around me.  I would have never learned about French labors laws, for example, had it not been for this class.  My mind would shout down and my eyes would glaze over if I heard a business report or if someone started talking to me about economics.  Now that I a have a better historical basis, at least for the United States, I not only shut down, but I can actively engage myself in the conversation.  Economics are still very political and I refuse to be drawn into a partisan debate, but I have a better understanding of what both sides of the isle are talking about.

 

Recently, my wife and I have decided to buy a home, my blog this week reflects this, as I assure you, that I did not spontaneously adopt a bizarre interest in mortgage rates.  I listened to a blurb on NPR this week where there were several guests that ere debating whether or not this is the right time to buy a home.  While most of the guests did concur that this was a prime time to buy a new home, there were still a vocal minority who insist that unless you are absolutely certain that your financial future is 100% secure, you should wait, even with the $8,000 tax credit. 

 

It always amazes me that one set of data can lead to two different conclusions.  The first article I read talked about how tough times are in the housing industry and unemployment is negatively affecting the market.  The more people who cannot work, the more people will end up foreclosing on their homes, due to the fact that they can no longer make the payments.  However, that is only half of the equation.  The other part is that if people are not making money, and do not already own a home, then the rate of houses bought also decreases.  

 

The second article that I read, however, had a much more up beat tone to it.  This article discussed how, right now fixed mortgage rates are cheaper than ever before.  It said that now was the perfect time to buy, and with foreclosures up, prices down and mortgage rates way down, that should help the economy.  So with two drastically different views, who are we supposed to believe? 

 

 

Foreclosure, Delinquency Rates Spike Amid Growing Unemployment

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111902097.html?hpid=moreheadlines

 

Fixed Mortgages Cheaper Than Ever

http://www.bankaholic.com/fixed-rate-mortgages-cheaper-than-ever/

End of the Dollar, Right Around the Corner?

Previous to our last class I had not heard much in the way of deficit spending and the national debt.  Since that class, I do not know if it because I am listening for it more, or because it is showing up in the media more often, I have seen and heard nothing but news about this topic.  In fact, the very next day (Friday of last week) I went down to D.C., to do some research for a paper for my other class, and saw a massive mural/billboard in the Metro station that mentioned something about how common people had the responsibility to save our country from over spending.

 

There are, as I understand it, two sides to this argument.  There are those who think that the amount of spending that the United States is currently spending is detrimental to the balancing of the budget, will increase our national debt and will lead to further inflation and weakening of the United States dollar.  While I do not subscribe wholly to this theory, there is certainly some truth to it.  The other side of the argument is that in the difficult economic times that we are in right now, it is essential to get the economy stimulated, just to get it going to the right direction.  Once this process has begun, government spending can decrease and strength will return to the American dollar.

 

The website that I visited this week discussed what Treasury Secretary, Timothy Geithner, was saying to the people in Asian countries.  He reassured them that "the Obama administration was committed to a strong dollar and to actions aimed at bolstering its value."  It would be easy to dismiss this comment as another politician telling people want they want to hear.  Asian countries, particularly China, want to know that the United States dollar is strong as they are the ones holding much of our debt.  I would argue that Geithner is not that good of a politician and with the President's first year in office coming to a close, the American people are going to want to see a palpable change in the economic conditions in this country.  The United Sates has a vested interest in seeing the American dollar gain strength as well.  I want to believe that most Americans understand these economic principles. 

 

Yet, in "Ads provided by Google" (on the very same page) were websites with titles like Death to the U.S. Dollar: 3 Secrets to Protect You in the Dollar's Final Days and The U.S. Dollar Collapse: You Could Loose Everything Tomorrow, Get Ready For Dollar Collapse Now.  I do not know whether to congratulate these people for their con, or hide my head in shame of my fellow Americans who make those sites possible.

 

For more on the article that I read visit:

http://www.nytimes.com/2009/11/13/business/economy/13geithner.html?_r=1&ref=business

Do We Believe the Jobs Hype?

I read an article this week about Steve Jobs being crowned "CEO of the Decade" by Fortune 500. My gut reaction was that of surprise and disgust. After the initial shock wore off I tried to analyse why I felt the way that I did towards Jobs. Was it because I have a natural resentment toward Macs? Was it because he was one of the few people who was successful in these tough economic times? The conclusion that I cam to is that it is natural for "captains of industry", and Jobs was quoted as being a modern rendition of this Gilded Age figure, to be both heralded and despised in their own time.

People talk now about the brillance of Rockafeller, Ford and Carnegie. They are most commonly thought of as self-made men who knew what was needed to be successful in the business world and let nothing get in the way of their goals. We do not often hear about the, at times, deplorable conditions their workers were subjected to, or the massive chasm that existed in those times between the high and low classes. Most often we hear about how much wealth they were able to accumulate.  During their own times, however, they were looked upon as idols by the wealthy and devils by the poor. 

Personally I think that it will be the same with Steven Jobs. In fifty years no one will hear about his liver transplant, or about how he left his company and then came back. They will probably not read about his anti-corporate attire or his uniquie quirks. They will know, however, that his net worth exceeded 5 billion dollars, and that is just counting his investments in Disney and Apple. People will undoubtadly hear how the "self-made man" started this obscure business in his garage and eventually became the most successful CEO from 2000-2010.

If you did not see the article and would like to read it I have provided the link below:

http://money.cnn.com/2009/11/04/technology/steve_jobs_ceo_decade.fortune/index.htm