Comments on: Will Housing Bubble Bust Boomer's Retirement? http://housingdoom.com/2008/07/02/will-housing-bubble-bust-boomers-retirement/ Sat, 11 Feb 2012 07:12:54 +0000 hourly 1 http://wordpress.org/?v= By: Bristinwolf http://housingdoom.com/2008/07/02/will-housing-bubble-bust-boomers-retirement/#comment-12794 Bristinwolf Thu, 03 Jul 2008 22:16:18 +0000 http://housingdoom.com/?p=1460#comment-12794 John M I find that very interesting I don't suppose you have any other links showing insurance companies investments in GIC's do you? ( all the companies in the link you provided were banking/bond institutions) I think your on to something though it makes sense for insurance companies to buy this sort of investment. You now have me wondering how exposed some of them are especially the large re-insurers such as general Re... John M I find that very interesting I don’t suppose you have any other links showing insurance companies investments in GIC’s do you? ( all the companies in the link you provided were banking/bond institutions) I think your on to something though it makes sense for insurance companies to buy this sort of investment. You now have me wondering how exposed some of them are especially the large re-insurers such as general Re…

]]> By: Asset Hunter http://housingdoom.com/2008/07/02/will-housing-bubble-bust-boomers-retirement/#comment-12793 Asset Hunter Wed, 02 Jul 2008 14:44:53 +0000 http://housingdoom.com/?p=1460#comment-12793 Taking real estate investing (or even purchasing) advice from Blanche Evans is about like taking marriage counseling with Andrew Dice Clay. Effect: disaster Taking real estate investing (or even purchasing) advice from Blanche Evans is about like taking marriage counseling with Andrew Dice Clay.

Effect: disaster

]]> By: toysarefun http://housingdoom.com/2008/07/02/will-housing-bubble-bust-boomers-retirement/#comment-12792 toysarefun Wed, 02 Jul 2008 13:43:21 +0000 http://housingdoom.com/?p=1460#comment-12792 Probably. <a href="http://www.businessweek.com/ap/financialnews/D91LB27O1.htm" rel="nofollow">"Upset homeowner shoots real estate agent in Mich."</a>, by James Pritchard, <em>AP / BW</em>, July 1, 2008. [edited -- JM] Probably.

“Upset homeowner shoots real estate agent in Mich.”, by James Pritchard, AP / BW, July 1, 2008.

[edited -- JM]

]]> By: agnostic http://housingdoom.com/2008/07/02/will-housing-bubble-bust-boomers-retirement/#comment-12791 agnostic Wed, 02 Jul 2008 12:32:38 +0000 http://housingdoom.com/?p=1460#comment-12791 Hee Hee. Let the run on the insurance companies begin! Hee Hee. Let the run on the insurance companies begin!

]]> By: John M. http://housingdoom.com/2008/07/02/will-housing-bubble-bust-boomers-retirement/#comment-12790 John M. Wed, 02 Jul 2008 11:21:22 +0000 http://housingdoom.com/?p=1460#comment-12790 On the bright side, many conservative Baby Boomers saved over their careers and placed much of their wealth in ultra-safe Guaranteed Investment Certificates (GICs). Oops. It's come out in recent days that a lot of this money was <a href="http://www.ft.com/cms/s/0/87c19f02-47d0-11dd-93ca-000077b07658.html" rel="nofollow">invested in subprime mortgages</a>. The good news is that the repayment of principle and interest in GICs is guaranteed by major insurance companies. The bad news is these same companies have seen big problems (i.e. prospects they will have to make good on a lot of these subprime losses) and so their stock prices have plunged in the last year or so. Looks like many of the wiser and more careful Boomers are about to learn a new concept -- Counterparty Risk. On the bright side, many conservative Baby Boomers saved over their careers and placed much of their wealth in ultra-safe Guaranteed Investment Certificates (GICs).

Oops.

It’s come out in recent days that a lot of this money was invested in subprime mortgages. The good news is that the repayment of principle and interest in GICs is guaranteed by major insurance companies. The bad news is these same companies have seen big problems (i.e. prospects they will have to make good on a lot of these subprime losses) and so their stock prices have plunged in the last year or so.

Looks like many of the wiser and more careful Boomers are about to learn a new concept — Counterparty Risk.

]]> By: NVmike http://housingdoom.com/2008/07/02/will-housing-bubble-bust-boomers-retirement/#comment-12789 NVmike Wed, 02 Jul 2008 09:52:27 +0000 http://housingdoom.com/?p=1460#comment-12789 <i>last year — 1.4 percent. So if you add negative 1.4 percent and 8.4 percent and then the 4.4 percent gain, you have a two-year net loss of 5.4 percent.</i> 1) Only 1.4% last year? That's a fairy tale. 2) 5.4%? The percentages don't simply add. Accepting the numbers as-is, without adjusting for inflation, the loss is: $1x - 1.4% = 0.986x 0.986x - 8.4% = 0.903x 0.903x + 4.4% = 0.943x Net loss: 1 - 0.943 = 5.7%, not 5.4% 2) Adjust for inflation at 3% per year, 3 years, and it's suddenly a 13.7% loss. 3) Next year's 4.4% gain is not assured. last year — 1.4 percent. So if you add negative 1.4 percent and 8.4 percent and then the 4.4 percent gain, you have a two-year net loss of 5.4 percent.

1) Only 1.4% last year? That’s a fairy tale.

2) 5.4%? The percentages don’t simply add. Accepting the numbers as-is, without adjusting for inflation, the loss is:

$1x – 1.4% = 0.986x
0.986x – 8.4% = 0.903x
0.903x + 4.4% = 0.943x

Net loss: 1 – 0.943 = 5.7%, not 5.4%

2) Adjust for inflation at 3% per year, 3 years, and it’s suddenly a 13.7% loss.

3) Next year’s 4.4% gain is not assured.

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