Investing in Time Shares PLUNGE!

One of the worst investments of all time is the infamous time share. Notorious for pushy salespeople that put car salesmen to shame, time shares have always been one of the biggest ripoffs that occur to put people in debt. Now, in a deprecession, the time share boom is finally being exposed for what it is.

U.S. timeshare sales dropped 8.5 percent last year to $9.7 billion from a peak of $10.6 billion in 2007, excluding the luxury fractional business and private residence clubs, according to an Ernst & Young LLP study prepared for ARDA. The decline was the industry’s first since 1975 and is being driven by tighter credit, a higher personal savings rate and the loss of 6.9 million jobs since the recession started in December 2007.

AND

Mark Massarelli, who runs Dynasty Limousine in Boston, has been trying to sell one of two timeshares in Hollywood, Florida, that he and his sister inherited from their mother. He has been advertising a one-bedroom, one-bath unit on Craigslist.org for six months. It’s at a full-service oceanfront property with access to an 18-hole golf course.

Massarelli, 46, hasn’t received any inquiries even after cutting the price twice.

“I am offering it at $3,995 but its value right now is probably around $8,000,” Massarelli said in a telephone interview. “I tried to sell it a couple of times for a higher price but nobody bit. The maintenance and taxes on the unit are getting expensive. So I cut the price to attract more buyers, but nothing so far.”

Hey Mark, if you can't sell it for 3995, then its value is NOT $8000, its whatever you sell it for!!

Are we supposed to be surprised???

Cash for Clunkers only worked while the cash was available for buyers? You mean it had no carryover effect? Wow, what a shocker!!

U.S. auto sales likely fell in September back to the nearly three-decade lows of early 2009 without government incentives to spur buying, leaving in doubt the timing and pace of a recovery for the battered industry.

Nearly 700,000 new cars and trucks were bought by U.S. customers through the government "cash for clunkers" incentive program from late July through the first three weeks of August, a leap from recession-stunted sales earlier in 2009.

However, none of the largest manufacturers are expected to post sales gains in September, and Edmunds has forecast a 23 percent industry sales decline for the month.

Bye bye, US Dollar. Hello.....(global currency? Renmibi? Euro? Gold?)

Ouch, baby...very ouch...

"The dollar looks awfully like sterling after the First World War," said David Bloom, the bank's currency chief.

"The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the UK – debt is racing up to 100pc of GDP," he said

So what does this mean?

"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."

Robertson said inflation is a big risk if foreign countries were to stop buying bonds.

“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”

China (remembering the golden rule...he who has the gold makes the rules) has this to say:

China, meanwhile, continues to flex its muscle.

It has proposed that the G20 economies consider setting up an international wealth fund that would invest a portion of its members' current-account surpluses in developing economies.

"These comments reinforce their desire to diversify out of dollars and to encourage other nations to do so as well," said Kathy Lien, chief strategist for Global Forex Trading.

A few Chinese deals were recently seen accepting payment in the currency of the buyer rather than in dollars, especially with Brazil, which the Asian giant is wooing as a future oil supplier.

In addition, China -- the first nation to sign an agreement to buy IMF bonds -- took the unsual step of paying for the papers equivalent of 50 billion dollars with its yuan currency rather than dollars, which Beijing uses for much of its trade and other foreign transactions.

A Change in Lifestyle of the United States

Consider the following 2 articles:

Meltdown gives consumers a new money mindset:

In ways big and small , from scrutinizing their bills and joining credit unions to scaling back weddings and college plans , people are finding creative ways to deal with the worst recession in a generation. In short, there's a quiet revolution taking place in the way people save, borrow and spend that represents a retreat from old habits, and the first steps toward new ones.

The changing behavior can be seen in other ways:

, Two years ago, the average amount spent on a wedding was $28,000, according to the Wedding Report, a market research company in Tucson, Ariz. Last year's average: $21,800. The second quarter of this year: $16,550 , 42 percent below the 2007 average.

, While enrollment numbers aren't yet available, public colleges reported a 14 percent spike in applications last spring, suggesting some students and their families are shifting from private schools so they can spend less.

Census: Recession had sweeping impact on US life

The homeownership rate fell to 66.6 percent last year, the lowest in six years, after hitting a peak of 67.3 percent in 2006. Residents in crowded housing jumped to 1.1 percent, the highest since 2004, a sign people were "doubling up" with relatives or friends to save money.

_ The share of people who carpooled to work rose to 10.7 percent, up from 10.4 percent in the previous year. Commuters who took public transportation increased to 5 percent, the highest in six years, with Washington, D.C., at the top.

Roughly half the states showed declines in the number of immigrants from 2007 to 2008. Major metro areas also posted decreases, including Los Angeles, Phoenix, Detroit and Tampa, Fla. An influx of workers from India, who came looking for specialized jobs in telecommunications, manufacturing, computers and software, partially offset the national immigration decrease.

When will Real estate return to its peak values?

From Moody's:

The reality of Cap & Trade

Trade Wars between China & US?

Definitely NOT a good thing when one debtor (the US) starts up a trade war with their enabler (China).

China lashed a U.S. decision to impose duties on Chinese-made tires, calling them flagrant
protectionism that sent the wrong signal before the next G20 summit and risked a "chain reaction" that could slow global recovery."China strongly condemns this grave act of trade protectionism by the U.S.," the spokesman for China's Ministry of Commerce, Yao Jian, said in a statement issued on the Ministry website on Saturday.

Random Musings & Clicks

6 Things I Think:

1) Gold is at an all time high (not inflation adjusted). Gold as a precious metal/hard asset is one of the 5 branches of investment everyone should own. However, now may not be the best time to buy into the market. I fear that if gold goes past 1040/ounce, you'll see the general public run into gold pushing it to 1200+, which means you should sell, as whenver the masses enter the market, the smart money leaves.

2) The tax credit for home purchases is running close to the end (November 30 is the closing date for those to qualify). There is a fear out there that this will either be extended & increased (causing buyers to not want to buy right now) or not renew (causing fools to overpay). It balances each other out. More concerning is the FHA running out of money to be at their reserve requirement.

3) Eviction patrols overloaded with foreclosures. Nuff said.

4) Wells Fargo Executive Parties in Foreclosed Home. Wow, another nuff said.

5) Russian leader demands curbs on alcohol purchases. Yeahhhh, sure. Telling Russians not to drink is like telling a stoner not to smoke it up.

6) Harvard & Yale the big losers in investing. Just goes to show you that an Ivy League education doesn't mean shit....all it gets you is connections & networking. With the advent of social networking, this may make Ivy's a little more obsolete.

Debtors Revolution & How Banks are shhhh QUIETLY Negotiating down debts

Gotta LOVE this...a debtors revolt is going to happen if this gets passed along!



The Washington Post reports on the quiet practice going on by banks of secretly negotiating with cardholders to let them lower their debt amount & interest.

What's going on in this country

It's been a while since I've been a guest poster on this blog. Thanks to my dear friend to keep it going. Things have been crazy lately. I am in the process of trying to close what was once a thriving prosperous business. I guess truly it wasn't all that thriving since it was all smoke and mirrors because of much money out there, due to the ridiculous loose lending practices of the recent boom. It is ironic that the ones who created this mess we are in are bailed out by the same corrupt government that encouraged it, and quite possibly forced it. All the while they are getting sweet mortgage deals from the orange man. If there is a hell, Chris Dodd, Pelosi and all the other "put money in my pocket" congressman will have to answer for their sins. Our government has put themselves before the people. They are public servants.

Wall Street's Next Bubble

Some think the next bubble will be in "green jobs/green economy", others think it will reoccur in real estate, some say in China stocks (which we called for a popping of that bubble here)

So inquiring minds want to know..what is Wall Street's next bubble? Here's a preview:

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them.

"Buns" Bernanke Can't Be Happy bout this...

No, I'm not talking about this picture...hat tip to Jrdeputyacct!

Bun, er, Ben Bernanke cannot be happy that the Chinese are gladly putting aside dollar/treasury/Fed note purchases and are finding that they can:
1) Buy gold
2) Buy IMF bonds (the first 50 billion issued)
3) Use their current dollar horde to buy assets around the world

Free For All Links to Interesting Articles

Top 6 Financial Articles of the Day:

1) Homeowners Becoming Reluctant Landlords

2) Goodbye Fannie/Freddie, hello McGee? Simply put, the MCGE buys mortgages from banks, pools them into securities, pays an insurance premium to a new government fund and then sells them to investors with government guarantees against the default of those securities. So the investors take the interest rate risk but they are not taking a credit risk.

3) Has the Obama administration failed already? Here are 10 things to do to restore their hope

4) An inventive way to clean up foreclosed homes with pools

5) Florida may invest in Florida real estate

6) Making the switch from being nice to banks to being tough on them

Improving your credit score based on New FICO method

The latest update to FICO's scoring model may result in a very good thing for many people...a higher score. Some changes include:

Under the updated scoring model, called FICO 08, small, missed payments lingering in collections with original amounts of $100 or less will no longer do damage to your credit score.

Consumers also are less likely to be penalized for any single delinquency if it occurred two or more years ago - and if their credit history is otherwise unblemished, says FICO, formerly Fair Isaac Corp., which developed the FICO scoring system.

As noted in this article here, even if you get a credit limit cut, it may not have that much of an impact on your scores.

Of course, if your scores are really bad, you can go into a career of making cover songs about the financial crisis, much like this Pink Floyd remake:

This video says it all...Yes, The Government Can!