August 21, 2007

HousingPANIC Stupid Question of the Day

Sadly, how screwed are the retiring Baby Boomers who counted on the proceeds from their house to fund their retirement?

Bonus Question: Will there be some sort of Baby-Boomer-Bailout to make up for the shortfall in savings (you know, one more AARP big wet kiss)?


Comparing results from the biennial University of Michigan Health and Retirement study, researchers found that, excluding home and business equity, 51- to 56-year-olds hold less wealth than the same age group did in 1992.

"These boomers look richer, but a lot of that wealth is because one asset [their house] revalued," says co-author Annamaria Lusardi, a professor of economics at Dartmouth. "Excluding housing, people have very little in other wealth components."

53 comments:

Anonymous said...

The Boomers better spin that hamster wheel harder because Halliburton and the other Bush cronies are not done with their taxmoney yet. Giuliana is drooling to put the hands on their money by creating another phony terrorist event. Secret Society at work and sucking money from the dumb boomers who keep voting them into power. Boomers are destroying the planet!

Paul E. Math said...

The boomers will think they have money for retirement right up until the bulk of them retire. Then the rug will be pulled out from under them.

By the time they realize they don't have enough money so many of them will have died they will no longer have the 'strength in number' - they will no longer get their way.

Watch for them to act like the spoiled children that they are.

Anonymous said...

anon 11:30, dude chill out you're gonna hurt yourself. now be a good little communist and see what dailykos has to say on the matter

Anonymous said...

Democratic Socialism will fix everything. Look at all the Cubans with free healthcare. That's something we need to model our economy after. Hitlary Clintoon will save everybody in the village

Anonymous said...

I suspect that given the large amounts of capital and/or credit put up recently by the EU central bank, pensioners in Europe (and maybe in Japan) have as much (or more) to lose as U.S. baby boomers in this great debt/leverage unwinding. It couldn't happen to a better lot of people in my opinion - I loath those Euro trash types.

When you owe a million to the bank, you don't sleep well at night. When you owe a billion to the bank, the banker doesn't sleep well at night.

Smug Bastard

Anonymous said...

Actually an economist on Nightly Business Report last night was talking about a de-facto bail out for over paid UAW workers laid off due to foreing competition. He thinks it is the best alternative to protectionism.

09/11;Katrina;IRAQ now a bailout for Home Debtors and UAW slobs

Where is all this money coming from and how much is left?

Hurin said...

In the bible Mat 7 Jesus says.

Or what man is there of you, whom if his son ask bread, will he give him a stone?
Or if he ask a fish, will he give him a serpent?
If ye then, being evil, know how to give good gifts unto your children, how much more shall your Father which is in heaven give good things to them that ask him?


From this we learn that boomes did not exist in the time of Jesus, because boomes in ther endless greed will take everything for themself and leave nothing to the younger generations.

Anonymous said...

Here is a worthy repost of a comment made by "AmazingRuss"

This just about says it allin a nutshell:
***************
For the old folks with no savings: My old man worked his whole life as a machinist, making about 20 bucks an hour, and put away nearly half a million. You want to bag on young people who don't want to contribute to your retirement? Have a conversation with your younger self.

area 51 said...

The practice is alive and well:

“Kathy Van Pelt paid $210,000 in cash, including a 5 percent auction fee, for a doublewide mobile home and a two-car garage with an apartment over it in Wildomar. Van Pelt said she bought the place for her adult grandchildren who now stay with her Menifee.”

“Van Pelt said she hopes the property will increase in value and become a nest egg for her retirement. ‘I am so excited about this because it seems like it is a new beginning,’ she said. ‘It looks like a good time to buy when values are down,’ she added.”

http://tinyurl.com/3a5z3f

edd said...

At about 11:03 am NYT today, on
CNBC, and "expert" (Nicholas?)from
Global Insight stated, in effect:

"Yes there were a lot of subprime
loans; that's why we think this
problem is reasonably contained."

Am I missing something, or are
we still in bs-world ?

Caveat Emptor said...

If you want to get a sense of how out of control American spending is, do yourself a favor and add the documentary "Maxed Out" to your Netflix queue. Here is the description:

Investigating both the personal and the national debt owed by Americans, this thought-provoking documentary explores the staggering financial burden we live with every day and exposes how the contemporary financial industry is set up in ways that can harm unwitting customers. With both sobering facts and black humor, Maxed Out unveils the consequences of our debt addiction, including its contribution to the vanishing of the American middle class.

See also:

http://tinyurl.com/3anob9

Anonymous said...

http://www.house.gov/paul/tst/tst2007/tst082007.htm

Ron Pauls take on the mess.

Anonymous said...

The entire progressive-era history of this country has been one big wet kiss to welfare recipients in all of their various forms.
Will there be a retiree bailout? You bet - it's already here. We call it "Social Security"

Love that Bush said...

"Bonus Question: Will there be some sort of Baby-Boomer-Bailout to make up for the shortfall in savings (you know, one more AARP big wet kiss)?"
================================
You must have been living overseas a long time Keith. AARP is just another insurance company out to milk every last dime from the old folks.

The Boomers won't be bailed out (nor will those Gen-Xers with their Beanie Baby collections). The only folks that are going to be bailed out by the government are the banks and a few well connected rich folks.

Anonymous said...

The Boomers better spin that hamster wheel harder because Halliburton and the other Bush cronies are not done with their taxmoney yet. Giuliana is drooling to put the hands on their money by creating another phony terrorist event. Secret Society at work and sucking money from the dumb boomers who keep voting them into power. Boomers are destroying the planet!

August 21, 2007 11:30 AM

Must be a naive little boy or girl on the interweb again.

Anonymous said...

*




Tinfoil hat anyone?

boston observer said...

I enjoy HP alot but I have to be honest with you... the pain being felt in most of the rest of the country is not being experienced in the better towns in the metro Boston area... particularly at the high end. In the last 3 months, 62 homes sold in Wellesley for more than $1M. Many sold at or just below ask price. Several sold ABOVE ask. A sampling of $1M+ sales in other towns; Needham - 34, Concord - 30, Newton - 93, Weston - 42.... and the list goes on and on.

This is in 3 months folks. There is no housing panic in greater Boston only an endless boom. Perhaps it is due to the high concentration of finance, legal and consulting people in the area.

k.w. - southern ca. said...

I don't believe it's just "boomers" or any one group of people who are sinking this country ... it's the collective "I Mentality" that is doing it.

Until we get away from this self-absorbed thinking (i.e. what's in this for me) we'll never resolve the growing crisis in this country.

Anonymous said...

Of course there will be a boomer bailout. The needy, arrogant generation that gave us Bush (twice) is too big to ignore, so the younger and future generations will be screwed, once again.

Oh, and my mother in law voted for Bush in 2004 because her house had gone up in value. My boomer neighbor voted for him because he didn't want to pay estate taxes when his rich father died. That selfish generation deserves to suffer.

bickerer said...

No problems here. Illegal immigrants making min wage will buy their 800k houses. Forget who it was who said that, but the guy's a genius.

Anonymous said...

The house prices have not dropped much in most area's except flip area's.Vegas, Florida. How is a Boomer in socal hurting where in 99 i bought a house for 200,000 and it is worth 700,000. So now its worth 650,000 big deal. The boomer can sell a their socal house a pay cash in vegas, arizona,oregon, idaho etc. so if a boomer have the money in a house in most bubble area's they will sell a buy cash.

Anonymous said...

Gen X did not collect beanie babies. During that era, I distinctly recall being shoved by a couple of 40-something boomer trash women while I was trying to find a frog beanie for my nephew. On another occasion, I witnessed an old lady take a doll she wanted out of the hands of a toddler.

Anonymous said...

Gen X did not do Beanie Babies. We're saving and investing in hard assets, so we can hide them from the Goobermint when they decide to increase their rate of theft from present levels.

Boomers are still fantasizing about how much real estate that they can buy.

Doktaire said...

Seems that, in addition to the forced confiscation of funds from their children (i.e. social security) they wanted yet more intergenerational loot in the form of ludicrous mortgages for young families, so they could continue to be undisciplined, selfish, fat bastards. Oh, and they get Medicare aswell. Meanwhile Gen X/Y get huge student loans, and priced out of the housing market, all the while our incomes are getting cut as the CPI fudge doesn't actually represent the real rate of inflation.

What has happened is that Gen X/Y are not going to buy your overpriced shitboxes, we are going to wait and rent until you die, and then we will buy them at the estate sale for pennies on the dollar.

borkafatty said...

n the bible Mat 7 Jesus says.

Or what man is there of you, whom if his son ask bread, will he give him a stone?
Or if he ask a fish, will he give him a serpent?
If ye then, being evil, know how to give good gifts unto your children, how much more shall your Father which is in heaven give good things to them that ask him?


From this we learn that boomes did not exist in the time of Jesus, because boomes in ther endless greed will take everything for themself and leave nothing to the younger generations.

-------------

Oh my we have People Quoting the Bible in here...I am F@cking outa here!!!

Borka runs through locked Plate Glass Door!

Anonymous said...

"Sadly, how screwed are the retiring Baby Boomers who counted on the proceeds from their house to fund their retirement?"


I'm 51. I paid off my mortgage, my cars and am debt free. I live in a gated community, 3600sq ft on 1 acre in Glendale AZ. Although the market is decimated now, I bought my house in 1987 for 250K. It is currently appraised at 1.2M. (after the glut and reducing home prices) Even if prices are halved, I do not care. I intend on living there through retirement.

I still have 14 years to work. I have been saving 12% of my income since I was 24. For the last 2 years I am allowed to add an additional 5K into my 401K.

I played the flipping game up to Sept of 2005, when I got out of the market. Most of the stories are true, at least for me, about creating wealth in real estate.

According to the financial charts I could retire now and not run out of money as long as I stick to my plan even if I live to be 115 and live high on the hog.

I prefer to work because I like what I do.

I have one kid, who will be quite wealthy when I decide to keel over and die.

"Bonus Question: Will there be some sort of Baby-Boomer-Bailout to make up for the shortfall in savings (you know, one more AARP big wet kiss)?"

Its more like I will be bailing out Gen X and Gen Y, because they have no work ethic and live for instant gratification.

Most baby boomers I associate with are in similar situations as I am. Hard working people who sock their savings away and have paid off or are close to paying off their mortgage. Who have amassed wealth and are not dependant upon any government for handouts. Who will not be affected if Social Security goes belly up and who plan on leaving a sizable sum to their heirs.

Anonymous said...

where are these 'hurtin boomers? My dad is 61, my mom is 59, right at the front of the boom. Both semi-retired, own their home outright which they bought in 1974 for $28K. No, that is not a typo, $28K was the price and they paid it off somewhere in the early 80s. Today that house is worth $700K easy. Doesn't matter really since they will probably both die in it. If r/e does crash and burn, it will hurt me not them as I will be the one inheriting less.

They have over $1M in the bank...and I mean IN THE BANK. they got so scared shitless after the nasdaq collapse they swore they woudnd't invest another dime in the stock market. Now they have umpteen CDs spread around with FDIC limits in mind.

Next month they are heading to Spain and France for 3 weeks.

Poor boomers, such awful lives they lead. Should have rented and instead of living for free (excluding tax and repairs) for the past 25 years they would have been paying rent all along. And instead of living for free for the next 10, 15, 20 or however more years they have left, they would have been paying rent still.

You guys really crack me up sometimes with your idiocy.

Anonymous said...

Good, the sooner these goddamn Boomers drift into poverty and die off the better. The Boomers have brought us most of the problems ailing our society. High taxes, gubmint handouts, foreign military adventures and a materialistic culture that's rotten to the core.

Yep, every time a boomer dies, I think God smiles.

Anonymous said...

Let them eat cake!

Anonymous said...

"Democratic Socialism will fix everything."

"now be a good little communist and see what dailykos has to say on the matter"

The same Republicans who bitch about socialism are the ones now asking for a government welfare bailout, just because they were gambling with housing. How these evil Republicans can look their kids in the face is beyond me. Let it go, the Republicans created the socializing of finance, no need to take risk into consideration anymore because the Fed will always be there to bail Republican crooks with taxpayer money. Bunch of hypocrites!

Anonymous said...

"the pain being felt in most of the rest of the country is not being experienced in the better towns in the metro Boston area"

Not yet...stick around.

Anonymous said...

Fellow Gen X/Y, unite! We're in a class warfare against the warmongers, spoiled, and greedy boomers. Don't buy their sh*tboxes until they die, don't subsidize these freaks any longer and put all your money overseas.

Anonymous said...

"i bought a house for 200,000 and it is worth 700,000. So now its worth 650,000 big deal."

FBs, stop picking numbers out of your arses. Nobody knows for sure the value of your POS boxes, but the way the market is crashing, it's much lower than you dream.

Hell, the entire credit meltdown is due to lack of information about real prices. So stop with your optimist and naive assumptions that your homes are worth 600k, 700k, 800k, 1 million. How can you put a price tag on it, when Central Banks around the planet can't figure out the real value of worthless CDOs, which indirectly are based on home values? Dream on, sheeple!

sam said...

"AARP is just another insurance company out to milk every last dime from the old folks."

Most insurance companies don't dedicate the bulk of their tax-free profits to blatantly left wing advocacy. Check out those twisted commercials with the small children pushing for more social security boomer welfare + socialized medicine.

AARP should have their tax exempt status revoked.

Anonymous said...

"own their home outright which they bought in 1974 for $28K."

You just made the point right there, they were able to buy a house at a reasonable price, and they probably didn't have student loans, at least not the size of ours. We are generalizing of course, there will always be some people who did do well. And, why on earth should you inherit a whole load of stuff you never worked for. I say 100% inheritance tax, and use the money to pay for the rest of boomroaches.

Anonymous said...

>>In the bible Mat 7 Jesus says...

English, dude, English... if you HAVE to quote Bible, at least paraphrase, cause it's a pain to read the "original". I swear, people who 'rote it wouldn't pass 3rd grade exam on "Three Rs" (Reading, 'Riting, 'Rithmetic). Besides, I'm sure some of the original meaning was lost in translation anyway.

kitchenstove said...

I figure they'll all be able to scratch by. A lot of Boomers, my parents for instance, did have top - notch jobs and should get a decent retirement check. I bet many of them are used to living check to check anyway. That's how it's often done these days. I also think many of the Boomers did or will inherit some money/property/etc. from their own parents. My parents and several of their friends got a few "windfalls" this way (that's how they put it), and so they were able to keep the wolves at bay for a little longer. If they're lucky they have health insurance too, and I think the Boomers will warm up to the idea of universal health care soon enough. Can't say I blame them either. Since many of them still have a lot of debt though they simply won't be able to splurge as much as they are used to from now on. They'll want to save any extra money they have for any emergencies that come up...like fighting off post - apocolyptic road gangs or something. There won't be too many vacations to Rio, liposuction, facelifts, breast/pec implants, or Rolls Royces in the Baby Boomers' futures. When they complain about it all Gen XYZ can tell them to shut up and stop whining like they tell us so often. Do the Hustle!

fatamelican said...

Yeah, I'm a 52 YO Boomer in a tough spot. My mortgage (with five years to go) is a whopping $1400/mo on a house worth over $600K. The IRAs and 401K are sitting in the high six figures, and I'm saving about 20% a year.

IF RE takes a dive, I may buy a couple of duplexes. In five years when 1 BR apartments rent for $2K a month, they'll pay a handsome return as you HP bubble-sitter heroes will all need a place to squat and trade war stories about woulda-coulda-shoulda.

Anonymous said...

"Yeah, I'm a 52 YO Boomer in a tough spot. My mortgage (with five years to go) is a whopping $1400/mo on a house worth over $600K. The IRAs and 401K are sitting in the high six figures, and I'm saving about 20% a year.

IF RE takes a dive, I may buy a couple of duplexes. In five years when 1 BR apartments rent for $2K a month, they'll pay a handsome return as you HP bubble-sitter heroes will all need a place to squat and trade war stories about woulda-coulda-shoulda. "

Did you have student loans, are your parents rich? I bet you had all kinds of privilge as you grew up in the most propserous times America has ever known, then handed your kids generation a shit sandwhich. I hope to god you aren't thinking of actually claiming social security, I think you should send those checks right back, if you are doing so well.

Anonymous said...

"$28K was the price and they paid it off somewhere in the early 80s. Today that house is worth $700K easy...
Poor boomers, such awful lives they lead. Should have rented and instead of living for free (excluding tax and repairs) for the past 25 years they would have been paying rent all along."


Tax on a 700K home can hardly be considered free living. I'm sure the taxes alone cost more than rent would in most places. Unless they live in CA, in which case it's just another example of how Boomers are screwing young people out of a decent quality of life.

Oh, and inflation wasn't 3000% over the last 33 years. It was actually around 330%, so I hope your parents aren't counting on that equity, like most boomers are.

Anonymous said...

Give each Gen X/Y slacker a 'Nepal' type cap with strings hanging down the side and shoo the poor pricks out of sight, under a bridge.

Anonymous said...

Boomers have been screwing the Gen Xers for a very long time. My wife and I are in our late 30s. Our parents (Boomers) have huge amounts of debt, but have the fancy houses, Lexus, expensive vacations, however My wife and I make hundreds of thousands of dollars more a year than they do and we don’t have those thing including the debt! Of course they didn't pay for our college educations like their parents did for them. These Boomers were spoiled by their parents and never grew up. They take and take, and now want us to take care of them…like they were ever there when we were growing up…thank God for the 80s!! We Gen Xers were forced to take out Student loans and started life with debt, however we learned to manage debt early in our adult lives, and it was tough.

Now the boomers think we are going to purchase their houses? We Gen Xers are not going to pay for their stupid overpriced houses. A 50 thousand dollar house is just that; 50 thousand dollars!! Yes you Boomer paid $250,000 in 1994 for it, and now you think it is worth 1.2 million dollars. You borrowed $900,000 against the house over the years. Again the house is only worth $50,000.00 and that’s what We Gen Xers will pay for it (or NOT) when you are out on the streets. Its going to be interesting seeing all these spoiled Boomers who are used to having everything, suddenly lose everything, and have to live like we Gen Xers did after college. No Money and Debt. Good luck Boomers.

Happy-Boomer said...

Jeepers Keith, you sure have a lot of whining GenXer's here. Am I missing something? Where I work the Boomers are the frugal folks saving for a rainy day. The under 30 crowd is the stupidest bunch of spendthrifts I have ever worked with---and yes, they were buying Pokemon cards, Beanie Babies, and Star War toys, all the while spending every spare buck they had on World of Warquest. Oh yeah, they also live with their parents.

james said...

"

Gen X did not do Beanie Babies. We're saving and investing in hard assets, so we can hide them from the Goobermint when they decide to increase their rate of theft from present levels. "

DOnt forget the guns.

james said...

boston observer said...


Thanks for the report. But that kind jibes with what theyve been saying. The crash will start in the massive bubble areas, CA/DC/FL/AX mostly, and will spread from there. TEh rest of the country hasnt caught on yet. Remember, the arm rest bulge is just starting as of July or so. Also, the 1m+ market is fine, as those are the rich gus who dont need loans.

SeattleMoose said...

The Boomers are evil.

Gen X and Y are angels.

All flippers are over 50!!

How could this not be true?

Minimum Wage said...

As a low income boomer, I don't look at homeownership as a ticket to a windfall.

I see it as a crucial DEFENSIVE position for a low earner.

I'm paying half my income for rent. I expect that retirement will never be an option for me, because I'll need to work to continue paying the rent.

If I had been able to buy a home (however modest - the more modest the better) at least after 30 years I'd be done with the mortgage payments.

With rent, you're NEVER done with the monthly payments.

HappyBoomer said...

Anonymous said...
Fellow Gen X/Y, unite! We're in a class warfare against the warmongers, spoiled, and greedy boomers. Don't buy their sh*tboxes until they die, don't subsidize these freaks any longer and put all your money overseas.
August 21, 2007 10:14 PM
==================================
Ho Ho Ho. Lot of bitter GenX folks here. Whatsa matter? Can't buy that $1.2 million dollar house with you salary laying coffee down at Starbucks? Is the value of your Starwars collectibles crashing?

Poor babies.

Anonymous said...

The boomers will die, and soon, Gen X/Y are the future. They were the worst generation, lets get ready to clean up the mess they leave behind,

Anonymous said...

Anonymous said...
Give each Gen X/Y slacker a 'Nepal' type cap with strings hanging down the side and shoo the poor pricks out of sight, under a bridge.

August 22, 2007 1:45 AM

-------------------

Or how about turning the boomers into fertilizer?? They are so full of sh*t after all. Yeah, I like that idea better.

Anonymous said...

Happy-Boomer said...
Jeepers Keith, you sure have a lot of whining GenXer's here. Am I missing something? Where I work the Boomers are the frugal folks saving for a rainy day. The under 30 crowd is the stupidest bunch of spendthrifts I have ever worked with---and yes, they were buying Pokemon cards, Beanie Babies, and Star War toys, all the while spending every spare buck they had on World of Warquest. Oh yeah, they also live with their parents.

August 22, 2007 4:52 AM

-----------------------

The under-30 punks are the children of boomers (echo boomers), so they learned from the "best," their POS spoiled, selfish, spendthrift ME ME ME baby boomer parents. Don't get echo boomers confused with gen X.

Anonymous said...

Gen X = no work ethic??
(well according to the Boomers)

Missing one crucial point:

Where are the family wage jobs for Gen X?

Baby Boomer's why aren't they there?

A) Because Boomer's outsourced, borrowed, mortgaged any future hope

B) Because Boomer's can't retire since they spend all their money, therefore not vacating positions

C) Because when/if Boomer's retire companies no longer replace those positions, and also if they do don't pay nearly as much for the Gen X employee.

Gen X is a generation that is smarter and more savvy than their parents in many ways. They just have little incentive it seems as the middle class vanishes and financial challenges mount. And for all the Boomers with children still at home? You are the ONLY person to blame for that.

Doug said...

Boomers didn't create the SS system nor did we jack up the payouts in the 60s as part of "The Great Society". Originally designed as a retirement supplement, SS morphed into the primary source of income for a large number of people from the WW2 generation and earlier. They got (and continue to get) way more out of the system than they paid in. We (the boomers and especially the late boomers born in the early 60s) got to fund their golden years and somehow have to pay for our own as well, as we'll be the first people to get less from the SS system than we put in (compounded at treasury interest rates over the years). This isn't a generational war. There are thrifty people and ne'er-do-wells in all generations. The country decided it didn't want all the people born in the early 20th century to be impoverished and created a ponzi scheme to fix it. The boomers just have the misfortune to be at the base of the pyramid and therefore the first generation where the SHTF.