Paul Thomas, CPA wrote:
....
- quote -


I disagree--the crisis wasn't any shortage of actual money, it was the
defaulting on large numbers of loans when the artificially low rates ran
out that precipitated the slowdown of the boom and that simply escalated
in a positive feedback loop--more defaults led to reduced value of
packaged loans and demands on insurers and so on and so on...

The instigating role of the Congress in requiring lenders to create the
demand and satisfy requirements for minimally at best qualified
potential homeowners, while perhaps well-intentioned social engineering,
cannot be underestimated in the resulting mess. The law of unforeseen
consequences strikes (yet) again.

I'm even more in the boat/on the side of zkeith having not had a
mortgage for over 20 years having paid off the previous house and living
in this one by reason of inheritance, trading the home place/farmland w/
sibling for alternate assets.

The question now is whether it would make some sense to roll a very
large portion of the traditional IRA while at lowered market value into
Roth and take the bite before the (imo) almost inevitable much higher
tax rates coming??? (There--how's that for back on (at least
marginally) topic? )

--


--

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- quote -


My thought is that the issue is not as much of a tax issue as it is
recovery of lost equity because of Wall Street greed. In fact, if
the maximum age were 75, retirees' accounts will have longer to
recover, thus ultimately increasing their tax obligation.

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joetaxpayer <joetaxpayer[at]nospam.com> wrote in
news:gceic0$muu$1[at]registered.motzarella.org:

- quote -

incorporated those no questions asked 120% valuation mortgages. It was
not about honest to goodness loans with as collateral less than 80% of an
honestly appraised home.

Whle Freddie and Fannie were meant to be helping people (honest people)
invest in homes (and that is a good thing), apparently all sides of the
loaning equation were sometimes less than honest - the people borrowing,
the banks loaning, Fannie and Freddie lowering their standards too much,
and especially the ratings agencies like Moody's who purposely obfuscated
the risks of the securities.


--
Best regards
Han
email address is invalid

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"joetaxpayer" <joetaxpayer[at]nospam.com> wrote
- quote -



Certainly it would be much less than we see today. Would it have never
occured? No one will ever know.

We all impact the economy in every transaction we partake or do not partake
in. Meaning, that you decide to eat at this resturant instead of that
resturant, or to eat in tonight, has an impact on the economy.

I hope that you got the lowest interest rate you could find when you bought
your house. I know I did. That demand for loans from you and from me
impacted this "crisis". Maybe every so slightly, but it did, and when
combined with the hundreds of millions of loans made, caused a shortage of
money to lend. Less money means higher interest rates, less or no available
credit. And it means the lendes have to make better decisions as to who
they lend to and for what purpose. In other words, they get to pick and
choose their borrowers.

We're "no doc" loans a bad idea? I believe so. But when I sold my old
house in 04, I didn't care if the buyer did that or not. My part was
placing the house up on the market and selling it for the best offer. Did
the sale of my old house create another "no doc" loan? I don't know, but it
might have. But the availability of easy cheap credit made the sale very
quick and easy. I had two offers at full asking price within a week of
listing. So yes, I benefitted from the glut of easy credit. You only know
if you did too.

Now, I don't fret over my investment portfolio, but I suspect that I'm
invested in some of these questionable loans, mainly through some financial
related mutual funds. I know I didn't complain about the returns of the
past fifteen years or so. High return generally means high risk. Even for
non-financial investments, the avalability of easy credit flowed down to
main street as additional sales of goods and services. That meant better
than normal book profits, which meant maybe higher returns as dividends to
shareholders. So even stock in McDonalds and Disney grew because of the
easy credit.

We're all to blame, maybe in varying degrees, but we all took part at some
level, and we all benefitted from what happened. I just hope we all learn
from it.




--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
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Paul Thomas, CPA wrote:

- quote -

Paul, you really lost me here. Over 10 years ago, I bought a house. I
put 20% down, and paid for any overages as it was being built. After the
closing, I had no debt aside from the mortgage, and even then, the
payment was little more than 15% of our gross income. How does such a
conservative set of numbers have any impact on the mess we are in? I
think the crisis would are in would never have occurred if there were no
'liar loans', no teaser rate or option ARMs, and no inflated appraisals.
At any point, if my wife and both I lost our jobs (and it would have
taken both of us to be unemployed given the debt ratios) the bank would
have had no risk at all, as we were never within 30% of being upside
down. Lastly, to the lay person, investing in Freddie or Fannie seemed
like investing in America....

Joe
www.blog.joetaxpayer.com

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"zkeith" <zquible[at]okstate.edu> wrote
- quote -




If you, or virtually all retirees, had any debt or made investments in any
mortgage backed security, then you did indeed have something to do with this
financial mess we're in. If less people had gone out and taken on debt,
we'd be better off. If less people were interested in investing in the
mortgage backed securities, then we'd be better off.

You and I, and virtually all retirees, may not have gone out and borrowed
120% of the equity in our over priced houses, and you, I and virtually all
retirees may not have gone out and made mortgages to people with
questionable means to repay the loans, but with certainty you and I and
virtually all retirees had made investments in mortgage backed securities.
Maybe through a mutual fund, maybe your pension plan invested there, but
rest assured, no one was complaining back when the dough was rolling in and
the accounts were getting fat.

For far too long we've been living large on easy credit, low interest rates
homes that appreciated at double digit rates annually (if not faster) and
large returns in our portfolios. We've been on this years-long drunk and
now it's time for the hangover. It's going to hurt, for a long time, but you
have to admit, it was one hell of a party.






--
Paul A. Thomas, CPA
Watkinsville, Georgia

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <49ddbb43-cb9b-4eff-82cc-3a35e3c11a16[at]j22g2000hsf.googlegroups.com> ,
zkeith <zquible[at]okstate.edu> wrote:
- quote -

If you're saying taxes are not fair, or the gvernment often
acts unfairly, get in line.

Portman is from Ohio and resigned to become US Trade Ambassador, a
post from which he recently stepped down.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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On Oct 4, 3:55*pm, Mark Bole <ma...[at]pacbell.net> wrote:
- quote -

The government will get its tax either way at age 70.5 or 75. (Given
the level of Federal debt, taxes will likely be higher for me at age
75 than at age 70.5, but I'm also willing to bet that more of my lost
equity will be recovered by the time I'm age 75 than age 70.5).
Regarding the IRA issue, I believe these retirement accounts would
have to be converted to a rollover IRA rather than a Roth IRA
initially. Taxes would have to be paid at the time of rollover.

In 2003, Congress considered a piece of legislation (Portman-Cardin
Act) that attempted to put the maximum age back to 75, but the
legislation wasn't passed. I, along with virtually all retirees, had
nothing to do with the financial mess we're in, but I think many of us
will be victimized by it.

--
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zkeith wrote:
- quote -

If they put money into their IRA in the 30 year period ending 10 years
prior to age 70.5 (in other words, their prime working years), I doubt
they have any losses at all.

In fact, there is a bonus: smaller account balance means smaller RMD.

- quote -

The disadvantage to the government is less tax money. Just because you
have to take money out doesn't mean you have to spend it, you can just
re-invest the money, in a Roth IRA if you want (via conversion), or
plain old after-tax investments. The only thing that's changed is
you've gotten some of the deferred tax bill taken care of now rather
than later.

-Mark Bole

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Approximately 20 years ago (I think it has been that long ago),
Congress changed the maximum age to begin RMD from 75 to 70.5. Now
that so many individuals have found their retirement accounts
shrinking, I wonder whether it might not be advantageous for this age
to be put back at 75 so that people have a longer time for their
retirement accounts to recover before having to take the RMD. Being
forced to take the RMD from an account that has less value in it than
the original and subsequent investments results in a real loss rather
than a paper loss. I can think of no real disadvantage to either the
retiree or the U.S. Treasury for moving it back to 75. I suspect the
age was lowered so people who begin to spend their retirement money
earlier (and perhaps not "skimp" so long).

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