Family Finance from Barron's - FiLife

Homebuyers' Handout -- Worse Than Cash for Clunkers

Wed, 21 Oct 2009 00:10:00 -0400

The homebuyer tax credit is a subsidy homebuyers don't need in this market, says Randall Forsyth.

THE FEDS SEEM INTENT UPON REFLATING the housing bubble. Not the Federal Reserve, as you may have read elsewhere, but the federal government.

Following the cash-for-clunkers idiocy, the federal government may extend its subsidy for homebuyers. The $8,000 tax credit for first-time homebuyers is due to expire Nov. 30, but our solons in the Senate are looking to push back that deadline and possibly expand the credit to $15,000 to most homebuyers, not just newbies.

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Credit "Drought" Is a Washout

Mon, 19 Oct 2009 00:10:00 -0400

Gene Epstein breaks down the economic fallacy that proclaims if the stock of consumer credit is declining, it means that the flow of new credit has dried up.

A HOARY ECONOMIC fallacy keeps spreading mischief. According to a front-page story in The Wall Street Journal ("Drought of Credit Hampers Recovery," Oct. 8), a false inference drawn from this fallacy has "sparked alarm in some corners of Washington." That can only spark alarm among those of us who feel that Washington's fixes have dark corners of their own.

Unfortunately, the false inference was put forward as fact by that same front-page story in our sister publication: the whole idea about a "drought of credit," drawn erroneously from the fact that the stock of consumer credit has been declining. Since the decline is likely to persist over the next few months at least, false alarms are also likely to persist.

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Dow 10,000: Déjà vu All Over Again

Thu, 15 Oct 2009 00:10:00 -0400

The Dow may have reached 10,000 again, but investors still have more issues to face than reasons to celebrate.

THOSE DOW 10,000 BASEBALL CAPS must be getting pretty worn by now.

First passed out on the New York Stock Exchange floor back in March 1999, when the Dow Jones Industrial Average initially passed what then seemed like the "magic" 10,000 mark, those caps could have been doffed once again Wednesday for the first time in just over a year.

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Is It Really Paradise for Consumers?

Tue, 06 Oct 2009 00:10:00 -0400

The "consumer's paradise" of slashed prices on products has negative consequences for retailers, magazine publishers and advertisers that focus on consumer goods.

IT'S THE BEST OF TIMES TO BE A CONSUMER, but the worst of times to publish magazines that depend on their spending, or more precisely, on advertisers that depend on their spending.

Conde Nast Monday swung the ax -- more like a scythe -- and ended publication of four glossy magazines in its stable, Modern Bride, Elegant Bride, Cookie, and to the wails of foodies, Gourmet. That follows the shuttering earlier this year of Domino, Men's Vogue, DNR, and the much-praised Portfolio.

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Green Luxury

Mon, 28 Sep 2009 00:09:00 -0400

Luxury brands are going green to bring in the green.

BMW WAS THE SOLE SPONSOR OF last month's season premiere of Mad Men , the lushly produced ad-agency cable drama set in Camelot America, a time when 5,000-pound Lincoln Continentals were driven proudly by the lucky elite and a decade before gas-mileage standards.

The German car maker didn't use its coveted platform for a nostalgic look at BMW's racing glory of that era, or to tout its new models' thrilling performance. Rather, the company promoted its Advanced Diesel vehicles, promising impressive fuel efficiency and 20% fewer emissions, in ads that imposed images of its cars on Mad Men's sets.

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It's the First Day of Fall -- In More Ways than One

Tue, 22 Sep 2009 00:09:00 -0400

The first day of fall is also Gann Day, the day when markets are more likely to reverse than any other day of the year.

HAPPY GANN DAY! It doesn't appear on any calendar, but Sept. 22 is known among aficionados of various and arcane market indicators as the day pinpointed by the late technical analyst, W. D. Gann, when markets are more likely to reverse than any other day of the year.

For some reason, stocks, commodities and currencies have a curious tendency to make major tops or bottoms on this day, as Paul Macrae Montgomery points out in a special study edition of Universal Economics newsletter entitled, "A Date Which Will in Infamy." While it is a bit of hyperbole to equate Sept. 22 with FDR's characterization of the Dec. 7, 1941 attack on Pearl Harbor, the number of huge reversals that took place on or about that date is stunning.

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Take This Monetary System, Please

Thu, 17 Sep 2009 00:09:00 -0400

The U.S. dollar has been falling steadily downward for a long time.

"HOW'S YOUR WIFE?" "COMPARED TO WHAT?"

Henny Youngman may be gone more than a decade, but his one-liners live on. And that old joke provides insight into what's happening with currencies.

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The Way to Play Social Networks

Thu, 17 Sep 2009 00:09:00 -0400

China has introduced several online gaming stocks.

WHILE THERE ARE AN increasing number of ways to join online social networks in the U.S., on the stock front, the investment options remain slim.

For those seeking a way to play the boom in online social networks, we suggest taking a look beyond U.S. borders, specifically China, where publicly traded companies have excelled in making money off an enthusiastic user base.

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Debtors' Prison for the U.S. Economy

Tue, 15 Sep 2009 00:09:00 -0400

Americans, rich or not, have learned a hard lesson in this economy about living within their means.

ANNIE LEIBOVITZ HAS WON A REPRIEVE, however temporary, from her debt woes. The celebrity photographer won't lose her real estate and the rights to her work to satisfy a $24 million loan but will continue to work out a deal with the lender, Art Capital Group, which effectively is a pawn shop for rich artists.

The very rich, it seems, aren't so different from the rest of us in terms of getting into hock. But regular Americans have little choice but to hunker down, cut spending to pay down debt, just as they have done in every recession.

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Happy Hour in the Bond Market

Mon, 14 Sep 2009 00:09:00 -0400

AHEAD OF THE ANNIVERSARY OF THE NEAR-COLLAPSE of the global financial system, the credit markets last week were wide open to all borrowers -- with the exception of American consumers.

Their government was able to auction off $70 billion of new notes and bonds with alacrity. Time was that corporations would give Uncle Sam a wide berth when he came to the market with a bunch of debt, but since that's now a seemingly continual process rather than a quarterly event, companies now borrow whenever the getting is good.

By contrast, U.S. consumer credit was reported last week to have contracted by a record amount, some $21.6 billion worth, or a seasonally adjusted annual rate of decline exceeding 10%.

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