Housing Market’s “Brussel Sprouts” Edina Realty Regional Manager Terry McDonough gave a terrific talk at City Lakes yesterday about the advantages — and potential pitfalls — of using contracts for deed in today’s housing market. In an environment of zero percent interest rates (“ZIRP”) and lots of stealth home equity (something like 2/3 of those...Read More
The Microsoft Precedent What turned Microsoft from the preeminent company of the early Internet era (circa 1999) to a company that is now eclipsed by such juggernauts as Google, Apple, and even Amazon.com? One theory is that its focus on “legacy” products — operating systems and applications software — caused it to miss such innovations as Internet search, smart phones,...Read More
Short-Term German Bonds Pay Negative Interest “I am not so much concerned with the return on capital as I am with the return of capital.” –Will Rogers Want an indication of just how bizarro today’s environment of zero percent interest rates (“ZIRP”) is? Investors just accepted a negative interest rate on short-term German bonds: In an...Read More
Actually, the following joke is obsolete: I can tell you exactly where interest rates are going, because Ben Bernanke told me (and everyone else): zero, for a long time. So, just substitute “stocks” for “interest rates.” Enjoy . . . Einstein dies and goes to heaven only to be informed that his room is not yet...Read More
Paid-Off House as Piggy Bank To the already long list of unintended consequences of zero percent interest rates (“ZIRP”) — squeezed savers, flush investment banks (and bankers), volatile commodity prices, etc., etc. — add one more: lack of (home) Seller motivation, especially amongst long-time owners with little or no debt. Why the lack of motivation? Because they...Read More
“The Liquidity Interest Rate Trap” Well I don’t know why I came here tonight, I got the feeling that something ain’t right, I’m so scared in case I fall off my chair, And I’m wondering how I’ll get down the stairs, Clowns to the left of me, Jokers to the right, here I am, Stuck...Read More
