$tewardship

Steve Lamp criticizes those who are tithing even while the bank forecloses on their house:

First, there is no explicit New Testament command to tithe. Impossible, right? Look it up. If you can find one I have overlooked, I am open to correction. Tithing is a good idea and a commendable practice, but not a command. Jesus didn't say don't do it. He did say it's not necessarily the most important aspect of our giving (Matthew 23:23).

This is true and one of those things I rarely hear mentioned in most churches. After the return from exile, the Jews moved from the tithe system to the temple tax system. Every Jewish male was expected to pay a half-shekel per year. Jesus's attack on the moneychangers in the temple was for practices surrounding the payment of this temple tax. I'm willing to bet that the current Jewish practice of maintaining synagogue memberships is descended from this practice.

The actual New Testament practice on giving was to give what you could afford. For instance Acts 4:32-37 where Barnabas donates the profit from selling property to the church.

Expect Inflation

Instapundit reports that the economy grew faster than was expected in the second quarter:

Not to say things are hunky-dory -- I'm worried about inflation -- but this doesn't look like a recession.

I think inflation is a big concern and I'm expecting to see more of it than we have really considered "normal" for quite a while. Why? Because of the housing market.

Declining home value is bad for just about everybody. Negative equity means property owners are locked into their current holdings or walk away leaving the mortgage companies taking a loss. Not being able to sell is bad for most families. You can't trade up when you have kids. Worse, you can't follow work if you get laid off. Walking away ruins your credit and in large quantities will destroy the financial sector. Either way, bad stuff.

How to fix this? I'm betting home prices are going to hold steady while most other commodities will inflate at rates higher than we'd consider normal. Eventually real estate values come back into something approaching proper perspective. This hurts the real estate investors a lot and everyone else a little, but avoids most of the big negatives of declining home prices.

That's my call for the future.

Me Too

Miss Anonymous is lamenting that she won't qualify for some sort of sweet bailout deal the FDIC because she isn't an idiot with bad credit. Ditto. When we were looking at houses our loan officer told us I had one of the best credit ratings he'd ever seen. Then he looked at Amy's. It is even better. Did we qualify for an amazing rate? Not really. We wound up with a 6+% 30 year fixed.

As an outsider, it looks like the mortgage companies are hoping that buy giving high risk borrowers low rates in hopes that they won't default and hedging their bets with mediocre rates for low risk consumers. This doesn't seem like a good idea to me. High risk borrowers aren't just high risk because they don't have any money, they're also high risk because they don't know how to manage the money they have. More importantly, a small startup could steal the low risk borrowers out from under them by simply offering them the rates they deserve, not the rates they're currently getting.

But then again I'm an engineer not some sort of actuary so what do I know?

High Stakes Gambling

Steve Lamp has some thoughts on stocks:

So earlier this week, I think it was Tuesday night, I couldn't sleep, and I was thinking about all of the dour economic news that kept pouring across CNBC at work that day. Stocks were getting pummeled and people were in a near panic. I thought to myself, this is the perfect buying opportunity. I jotted down a list of five stocks and people were morbidly selling that I thought were being driven more by fear rather than by reasonable forecasting.

I remember having a conversation with Steve like that at Small Group during the downturn after 9-11. Steve recognized that a crappy stock market is a perfect time to buy.

But what to buy? I impulsively suggested investing in airlines. They were all under-performing after the air travel hit of 9/11, but there is no way they would all go under. We were right. The hard part is figuring out which airline stock to buy. The correct answer turned out to be Southwest, but unfortunately I was still a grad student with no money to invest in that sort of thing.

Right now the hit is in mortgage brokers and the trick is to find a smaller broker that isn't heavily involved in the sub-prime problems. They'll be in the best position to expand as other brokerages either go out of business or have to charge higher interest rates to cover their losses. The problem is finding that firm.