Odds and Ends from the Personal Finance World

Posted by on November 9, 2007 in Misc.

Approximately 10 years ago, the Premier of our Province thought it would be wise (or funny) to appoint a high-school drop-out as our Education Minister (and a car salesman as our Minister for Transportation- I am not making this up). Shortly after being appointed, with a mandate to reform the educational system, he was caught on tape indicating that a crisis needed to be manufactured in order to implement his agenda.

This story reminds me of the subprime “crisis” which is happening and the “collapse” of the United States real estate market. Is it really a crisis or just a big media story- read this report on the subprime “crisis” from the Brookings Institution- 87% of mortgages are not subprime, real estate prices continue to rise in some areas of the United States and money is still cheap (for those with good credit). Make you wonder whether this is an invent a crisis by politicians and the media. Corporate profits are still healthy (albeit from record highs), international trade healthy and money still cheap (and not chasing stupid deals anymore). Everything will be fine- this is not 1929.

A few more odds and ends to end the week:

  1. In the sky isn’t falling department- Manulife and Power Financial Corporation announced dividend increases this week to 24 cents and 31.25 cents per common share.
  2. New York Times publishes an own vs. rent calculator.
  3. Get Rich Slowly blogs on saving money on weddings (at $28,000.00  per wedding, I am clearly in the wrong business).

Have a good weekend- I will be doing some painting and watching the Dolphins lose again (not there is a real crisis).

3 Comments on Odds and Ends from the Personal Finance World

By FourPillars on November 9, 2007 at 11:26 am

I always thought the “subprime crisis” was a bit overdone. As you say, subprime mortgages are a small portion of all mortgages and it’s not like every single sub-prime is going to default.

I’d call this a ‘media’ exaggeration event.

Mike

By admin on November 9, 2007 at 1:56 pm

The squeaky wheel does indeed get the grease.

By Y HAT on November 11, 2007 at 2:55 am

Citibank just wrote-off $11 billion USD on top of the $6.5 Billion dollars it has already written-off last quarter. Banks basically stopped lending to each other in August, forcing central banks in the US, England, and Canada, among others, to inject liquidity into the financial system. One British bank (Northern Rock) already imploded due to the fall out from sub-prime mortgages. The U.S. Fed just lowered their federal funds rate by 25 basis points (on top of another 50 point drop from their last meeting) to mitigate the impact from the sub-prime fallout.

Sounds like a little more than just big media hype to me.

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