For those of you hoping that the housing market had bottomed out, the news released yesterday indicates otherwise. Fannie Mae reported losses amounting to $2.3 billion, while its country cousin, Freddie Mac’s last quarter losses amounted to $821 million - far more than had been anticipated.
While some experts believe prices have fallen enough to get a bargain, I believe that the news from the country cousins indicate house prices still have a way to go before they reach the bottom. This means if you are contemplating buying a new home, it might be a good idea to wait. For those of us who had counted on our homes to provide additional retirement income, this is not good news.
For those of you who can’t keep it straight, a bear market is the bad one. A bear market is usually signified by a 20% decline in stock prices. According to the L.A. Times, for Wall Street “a very long period of falling or, at best, sideways-moving stock prices” is considered a ‘secular’ bear market.” The most recent bear market followed the tech bubble burst and lasted from March 24, 2000 to Oct. 9, 2002.
The Los Angeles Times reported a couple of months that a growing practice is for investors to buy insurance policies for the elderly in return for the death benefits. This practice require the elderly to sign over death benefits to investors and after an agreed upon time receive money compensation. Since the elderly are guaranteed to die, the investment is guaranteed to pay off.
Investors are beginning to pool these investments and sell them as a package. Face value for policies bought for the secondary market rose to $6.1 billion in 2006 up from $2 billion in 2002. Experts are predicting this figure could reach $20 billion this year.
Insurance companies don’t like this practice because it threatens their profits. Advocates for the elderly argue that it makes the elderly lives into commodities. It’s being marketed just like any commodity with flyers printed and distributed at places where the elderly gather.
There are other reasons to be concerned about this practice. Because the insured are only allowed a limited amount of insurance, if they’ve contracted out the full amount to investors, they may not be able to buy insurance for themselves. There is also the possibility that the elderly can become victimized by strangers who may not want to wait for a natural death in order to collect.
Some of you may not be exactly clear on what is meant by median and may confuse it with other types of averages. Median simply means middle. In the case of income or home prices, analysts look at all household income; or all the prices at which homes have sold, then determine the exact middle. For example, if you have five children ranging in age from 1 to 5, the median or middle is 3.
Most people’s financial security is based upon secure employment. That’s why it’s important that you don’t unwittingly jeopardize your chance of gaining and maintaining successful employment by being careless about what you share online. Sad to say many people still are not aware that employers may track their online activities, using the information to decide whether they want to hire or fire them.
Employers have the right to access online activity that takes place on company time using company equipment. Some do it as a matter of policy and may either do it in house or hire someone to do it for them. It doesn’t necessarily stop there. Employers may google you to find out what you are doing on your own time. That means that if on your day off you decide to have a wild night out with friends, and afterwards one of your friends decides to post pictures of the celebration online, your employer may use the photographs as a reason to fire you.
If you expect employment law to help you, you may be in for a rude awakening. That’s because in most cases employment law only cover workers who are covered by bargaining agreements, or public-sector employees who are covered by special protections. Members of these groups can only be dismissed for cause. Most of us are at will workers and can be fired without cause.
States vary in terms of protection they offer to workers who engage in legal off hour activities so you might want to check the employment law in your own state to see what protection it offers you.
This posting is based upon an article in the NYT by Randall Stross. 12/30/2007.
