Archive for August 30th, 2007

Nothing Down, $0 a Month, Hammer Required

Posted on August 30, 2007 by Jason

The New York Times, August 30th, 2007

Why would some people willingly spend decades — and hundreds of
thousands of dollars — renovating houses they will never own? For a
small but growing number of so-called resident curators living in old
and cherished state-owned houses up and down the East Coast, the
answers include the pleasure of bringing an abandoned landmark back to
life, freedom from mortgage payments and the chance to live in the kind
of home that would otherwise be out of reach.

“We’re people of modest means,” said Darrold Endres, a nursing home
administrator who has been living in and restoring an 1860s farmhouse
near Boston with his family for 12 years. “We could not afford to live
in an incredible spot like this, in a town with wonderful public
schools for the girls, if not for the curatorship program.”

Programs
like the one in Massachusetts have come about because many state
governments own more houses of historical interest than they can afford
to maintain, mainly on farms acquired decades ago and converted to
parkland. Now a few states have begun turning these properties, along
with some of the surrounding land, over to live-in curators, who take
on restoration responsibilities in lieu of paying rent or taxes.

More
states are looking to resident curator programs as a way to hold onto
history, especially since a more familiar approach — opening the old
houses to the public as museums — is on the wane, mainly because of a
decline in visitors.

The houses mostly date to the 19th century,
and have often sat vacant for years in remote forested areas; their
tenants — typically married couples — often do much of the renovation
themselves. Many have professional experience in construction as well
as “creative skills that are especially good for dealing with the finer
details in the house,” said Kevin M. Allen, who oversees the 28
properties in the Massachusetts Historic Curatorship Program, founded
in 1994.

Read more of this article.

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Debunking money market fears

Posted on August 30, 2007 by Jason

CNN Money, August 28th, 2007

Question: With all the woes in the subprime market and
considering the reports that some money market funds hold money in
securities that include subprime debt, should I be worried that my
money market fund may “break the buck”? – Keith Lobel, Columbia, S.C.

Answer:
The news wires have certainly been abuzz lately with reports of
securities linked to subprime mortgages turning up in money market
funds. And reading some of these reports can scare the bejeezus out of
you, as many have a “the sky is falling” tone to them.

Indeed, some of the coverage conjures up images of “The Blob,” the
1958 sci-fi flick that featured that jelly-like mass that kept growing
and growing, devouring everything in its path.

I don’t want to
dismiss concerns about the security of money market funds. Given the
level of fear in the credit markets these days, it makes sense to be
cautious. But you don’t want to be paranoid. So to answer your question
of how worried you should be, let’s first step back and try to gain a
little perspective.

To begin with, you should know there has been some misinformation
floating around about this issue. Two weeks ago, a number of financial
news outlets reported that an Illinois money manager told clients it
wouldn’t satisfy redemption requests for the $1.5 billion it manages in
money funds.

The reports also referred to money market funds
investing in subprime-related investments. But the account in question
is a cash management account for commodity traders. It’s not a true
money market fund.

Prior to that report, two AXA funds that had
been swept up in the turmoil of the subprime market were also referred
to as money market funds, although they too were not true money market
funds. So you’ve got to be careful when reading press reports about
problems in money funds.

Read more of this article.

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A Sobering Census Report: Americans’ Meager Income Gains

Posted on August 30, 2007 by Jason

The New York Times, August 29th, 2007

The economic party is winding down and most working Americans never even got near the punch bowl.

The Census Bureau reported yesterday that median household income
rose 0.7 percent last year — its second annual increase in a row — to
$48,201. The share of households living in poverty fell to 12.3 percent
from 12.6 percent in 2005. This seems like welcome news, but a deeper
look at the belated improvement in these numbers — more than five years
after the end of the last recession — underscores how the gains from
economic growth have failed to benefit most of the population.

The
median household income last year was still about $1,000 less than in
2000, before the onset of the last recession. In 2006, 36.5 million
Americans were living in poverty — 5 million more than six years
before, when the poverty rate fell to 11.3 percent.

And what is perhaps most disturbing is that it appears this is as good as it’s going to get.

Sputtering
under the weight of the credit crisis and the associated drop in the
housing market, the economic expansion that started in 2001 looks like
it might enter history books with the dubious distinction of being the
only sustained expansion on record in which the incomes of typical
American households never reached the peak of the previous cycle. It
seems that ordinary working families are going to have to wait — at the
very minimum — until the next cycle to make up the losses they suffered
in this one. There’s no guarantee they will.

Read more of this article.

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