Thursday, November 20, 2008

What I really need

This post was a really important idea and statement when the government was talking about buying up troubled assets. It is not so important now since the the government has moved to providing loans to banks and car makers. In other words, the post would have been great and insightful had things turned out different.

The point
What I really need right now is the government competing against me buying homes. In other words, the last thing in the world I need right now is the government propping up home prices.

The data
I don't think home prices are not going up in the near future. The number of people buying homes is not getting higher (higher unemployment). The supply of homes of the market is only increasing or at least it is not going down. I live in an area that has escaped much of the home depreciation. But I think there is a some of risk in buying a house, especially since I think the area I am in is just behind the rest of the nation.

If the government steps in and starts buying homes, they are just going to raise the price for all the other buyers. The government will not be inclined to get good (or as good) deals as a private motivated buyer would be. Keep in mind, that they will not be spending their money. They will pay more than what the market will bear and keep the prices higher than what the market would have paid. Both bad things for the first time buyer, who is the first link and spring board in the entire housing chain.

Thursday, November 13, 2008

The score

The little wife and I are looking to buy a house in the near future. In preparation, I recently pulled our credit scores. On average we had a higher credit score than about 75 t0 80 percent of the US population. We were in the second to highest level of credit scores, though not the highest. I am never satisfied with second best, so I have been trying to think of ways to raise the score.

There were several common areas, that while they were not negative and did not count against us, we did not score as high as we possibly could. One thing that we could have scored higher on, was amount of available credit. I don't know how much credit we should have available, and I am endeavoring to find that out. Mostly likely, i will end up speaking to a credit doctor. Unfortunately, just like a woman, good ones are hard to find.

We also have a lot of revolving credit accounts (credit cards). What can I say, we were both suckers for free stuff from credit cards that were offered to us in college. I still have a poorly made Chris Farly t-shirt from of those offers. We both canceled the cards as soon as they came in and have always used credit responsibly. Though the damage is already done. Just goes to show you, that there are always consequences.

We are also debt free. Which actually has some negatives. Oh sure, paying the loans off helps, but once the loans are paid off you have no installment accounts listed as active. In this case, no information is not good. I am sure that a person reading our credit reports, would understand and approve, but the machines in the ether apparently don't.

So i am considering taking a out a loan to increase our credit score. I know that sounds absurd...but I did not design the system, I am just trying to abuse it. It is almost as if, the rating agencies give better ratings to people who are in debt (within reason is suppose). It makes sense when you think about it. The rating agencies are not really on your side, they are the lender's side (their customer), and are just trying to make money off of your information in the mean time.

Les jones has twice linked to an article saying that stupid modern software makes us stupid.

"We borrow money when we don’t need to, for example, to feed the type of data to the programs that we know they are programmed to respond to favorably. In doing this, we make ourselves stupid in order to make the computer software seem smart."

Living inside of a system and adapting to the situation, manipulating the system to our own gain, doing what we need to do to survive (Or in my case, what I need to do, not merely to survive, but survive in style) - Does not make us stupid, it makes us extremely bright.