Sunday, January 31, 2010

And Mr. Barofsky says...

My wife and I are selling our house. We have actually picked an agent, and will be signing papers tomorrow. According to our agent this is the "right" time to make a move. After all, there is a current $6,500 tax credit available to all home buyers. (This applies to those who have lived in their home for five years or more and are moving up). Even though I am aware of the next wave of ARMS to reset... an unemployment rate that exceeds 10% nationally, and a rash of bank failures, we have made a decision to place our home on the market.

Chances are, we will not get anything close to what we "think" our home is worth... However, we will definitely sell it for more than we bought our home for. According to the demographics of our little town, the burg is still a desirable place to raise a family. As a result, home prices have not fallen as hard as other locations... at least not yet. However, we have taken a slight sip of reality and acknowledged that our home is not worth the original asking price that our old agent cooked up this summer. So we will settle.

Yet things are not so bad, after all we will be "buying up" in a depressed housing market. Rates are still low... (I was quoted 4.75% for 30 years the other day), and I believe the best days of our community are still ahead of it. Even as Chrysler prepares to shudder its doors.

Interesting enough, Mr. Barofsky has a more critical view of the housing market. Barofsky suggests that a home buyer tax credit actually artifically inflatea housing prices. That, a re-inflation of housing at this point in the game only causes a another bubble to start. Barofsky also believes that Federal officials are putting pressure on institutions to make loans just when the banks are trying to recovery from the last batch of bad loans.

As for my wife and I, we are going ahead with the house sale and purchase... At the end of the day, we have to remember that life is for living, not fretting over the what-ifs all the time.

Stock Watch
I exited my position in SLV a bit late. Still holing on to over 35% profits, I had a lock on numbers well over 55%. Supposedly the sell-off was due to a reduction in stimulus from China's government. Since silver also serves industiral applications it took a beating, although not as much as some of the basic metals miners life CLF.

I am anxiously watching NEOP continue to move as my original investment is nearing the 200% return mark. I entered a second position which is up an additional 20%. The greedy side of me sees another run that could make this one a real homerun. Still though, I am reminded of the stellar performatnce of 2008 followed by the over-zealous beating I took in 2009... and I stil feel a sense of caution in the air of an all-in type approach. Once bitten twice shy!!!


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