September 30, 2009

Bits Bucket For September 30, 2009

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September 29, 2009

Mustering Up Enthusiasm For This Big Adventure

by ahansen

What has happened to the markets –or so we’re being told– is a recession; which, they say, has bottomed and is on its way to a slow recovery. But what has happened to We the People—those of us folks out here on the ground where the green shoots are supposed to be — is Depression with a capital D. And I don’t mean the financial one.

As any number of us un and under-employed here on the blog can tell you, being jobless is no picnic—especially when you’re facing a hugely uncertain future and trying to figure out how to care for yourself and your family. Being out of work when you need it is scary, and humiliating, and soul-numbing, and it’s becoming increasingly more prevalent among people who never thought it could happen to them– doctors, lawyers professors, and rocket scientists included.

With no job, no income, and rapidly dwindling assets, it’s no wonder there’s currently a two-to-six month waiting list for admittance into in-patient psychiatric facilities. (And that’s just for those with gold-plated medical insurance and still-intact investment funds.) Many more of us are living on the edge of despair, clutching at the faint hope that somehow, soon, all of this will turn around and things will get back to “normal.” But despite what we’re hearing from the federal cheerleaders, to all but the most gullible, that turnaround and all the new jobs promises, appears less likely with each chirpy proclamation.

Washington and the Titans of the G20 may go on, secure in the knowledge that their system will continue; with bailouts as necessary and their currencies intact. But for those of us left to clean up the results of their gross mismanagement and outright corruption, the realization that our rosy expectations and our hard-earned paychecks have both careened into a dead end brick wall is a nasty shock —and one from which many of us will never fully recover. We know viscerally that what we are experiencing is unprecedented in our lifetimes; that we are living an historic moment. But it is hard to muster up much enthusiasm for this big adventure when all we see around us is carnage.

John Mauldin offers an exceptional analysis of current Bureau of Labor Statistics in this week’s “Welcome to the New Normal,”

Among his conclusions are these tidbits:

“…And if you add… (to the standard unemployed and marginally attached workers who comprise the data,)… those who are employed part-time for economic reasons (i.e., they can’t get full-time jobs) the unemployment number rises to 16.8%.”

Note: Great Depression era statistics defined “unemployed” as anyone over the age of 16 not engaged in “full-time” work— rendering those 25% unemployment figures we’re all familiar with not quite so impressive when compared what we’re experiencing now in California, Ohio, etc.


“…If you take the average job growth from 1989 until now, you get an average of 91,000 a month. If you take the best ten years I could find, which would be 1991-2000, the average is still only 150,000. That is a long way from 250,000… (new job creation per month we now need to get back to a 5% unemployment rate.”)

Note: (Per month job loss for 2009-to-date averages 481,000.)

The implication is that while we may see a structural economic recovery for a time, the reality for many of us is Hard Times Ahead for the foreseeable future.

Without strong employment, the best economic system in the world is useless. And the longer the numbers keep dropping, the harder it will be to pull ourselves out of the slump. As more and more people become unemployed, more and more businesses will fail from lack of consumer support, which of course leads to more unemployment….

The Great Depression weighed disproportionately upon the low-level industrial and farming classes. Today the one-two punch of unemployment and ever-rising layers of taxation, —overt and hidden— is hitting the suburban white collar and skilled labor demographic the hardest. Given the rapidly dwindling middle class, the secondary recession that will inevitably follow this temporary recovery may be more far reaching than even the most pessimistic of us here might wish to contemplate.

When Hoover was in office, Congress passed the Reconstruction Finance Bill to bail out the banks, the insurance companies, and the railroads. Today we have the Troubled “Assets” Relief Program to bail out the banks, the insurance companies and the housing industry. Both attempts to save American capitalism may come to similar ends if the current recovery is thwarted by ever-rising unemployment feeding upon itself.

Viable solutions to this dilemma are myriad and complex, but in one form or another they will have to involve putting Americans back to work in some constructive (if income diminished) capacity. Complicating the issue is the huge number of Baby Boomers aged 55+ who find they can no longer afford to retire and must remain in jobs that would typically go to the upcoming generation of younger workers. Paradoxically, until this older demographic begins to leave the marketplace en masse, full employment is unlikely.

One solution might be to incentivize two negative elements of our economy to create one positive one. The vast number of empty condos and housing tracts now essentially owned by the government (Fannie/Freddy/bank bailouts,) can be structurally modified (thus creating jobs,) and repurposed into multi-unit Section 8-like “projects” for housing the huge number of newly-impoverished suburbanites about to hit retirement age. In exchange for say, giving up their Social Security income, or a state or local government pension, retirees would be guaranteed a place to live out their days in relative comfort and security, with food services, health care, transportation, recreation etc. on site or clustered nearby. Millions of new service jobs would be created to staff these projects, and active seniors could be employed in providing daycare, light assembly work, staff assistance, consultancy etc. to the communities that they live in.

By clustering the housing, resources, equipment, and services in one place, needless duplication could be avoided, and the cost savings better utilized elsewhere—for example; subsidized taxis, on-call medical personnel, social and food services, community gardens, recreational and educational facilities, and family centers. When the Boomers go bye-bye, the projects can be turned into dorms for the kids doing their mandatory 2 years of national service. Or low-cost housing for migrant immigrant labor and struggling artists— or whatever Orwellian social construct is necessary in 2050.

That’s just one idea. I’m sure as a country of the soon-to-be chronic unemployed we can come up with lots more—maybe even a few that address some of the serious problems besetting us. I mean, Hey, as long as we’re not doing anything useful for awhile….

The last time we had a Great Depression, it took a World War to pull us out of it. Let’s hope that what’s created this time will turn out to be a war against unsustainable economic models, against an increasingly unlivable global environment, and against the impoverishment of mind, body and spirit spawned by those selfsame failed systems.

At least until we can all get back to work.

Bits Bucket For September 29, 2009

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September 27, 2009

Prisoners In Our Own Homes

The Globe & Mail reports from Canada. “For the throngs wandering through open houses this weekend, it may feel as though they fell through the looking glass while they were peering into closets. The downturn seems like a bad dream. Housing prices have rebounded, formerly gun-shy buyers are back on the market, and bidding wars abound. Has real estate got its boom back? 24-year-old…first-time buyer Chelsey Perrella…has been looking for a townhouse or apartment with her boyfriend for the past three months, and she does the open-house circuit most weekends in Vancouver’s popular Kitsilano and Fairview neighbourhoods.”

“‘We didn’t know how hard it would be,’ she said. Her favourite property to date - a townhouse with a rooftop patio - went for more than asking in a bidding war, but Ms. Perrella says she intends to keep searching, despite the competition. ‘We want to get into the market,’ she said. ‘You don’t want to miss out on anything.’”

The Vancouver Sun in Canada. “I cannot say the Wesbrook is an economics textbook definition of luxury. I can, however, tell you the homes are ready for occupancy. Wesbrook purchasers will buy a finished home. Building and grounds are not artist’s renderings. The homes are neither renderings nor floor plans. Their doors can be opened and closed. Some of them were sold before or during construction and are occupied. Most of them, however, are unsold and unoccupied.”

“‘So, often you go into a project and what is represented is totally day and night. It happens,’ says Lily Korstanje of Magnum Projects, who, with brother George Wong, is a pioneer of the sale and purchase of a home before construction, a business model the international financial crisis shattered last September.”

The Province in Canada. “Canadian real estate remains a bargain compared to the rest of the world, but Vancouver’s red-hot market is still the country’s most expensive, according to a new Coldwell Banker study. Vancouver realtor Marline Kolterhoff, who has been in the business for more than 38 years, said many Canadian markets such as Burnaby with an average price of $655,497 remain affordable even if Terminal City has gone sky-high.”

“‘When I started, bungalows were $17,000 or $18,000,’ Kolterhoff recalled. ‘I remember a manager saying: ‘One day these homes will be worth $100,000,’ and we all laughed and laughed and thought he was hysterical. Now, you can’t get anything for under $900,000.”

The Seattle Times in Washington.”Michael R. Mastro didn’t have to seek out investors. They came to him. The veteran Seattle real-estate developer’s reputation for making people money spread for 40 years by word-of-mouth, from friend to friend and generation to generation. One by one, the folks Mastro called his ‘Friends & Family Investors’ would come to his inconspicuous office on Rainier Avenue South and listen to him talk about his pending projects. Then they’d write big checks and take home promissory notes pledging they’d earn interest of 8, 9, even 12 percent — and could pull their money out any time.”

“But Mastro’s long, successful run came to a crashing end last month when three banks forced him into what may be Western Washington’s biggest, most complicated bankruptcy ever. And his Friends & Family — about 200 investors owed more than $100 million — are the creditors most at risk.”

“‘I’m certainly not holding out much hope,’ said Dave Carlson, co-owner of a Seattle firm that invested much of its cash with Mastro two years ago, when asked if he expects to get any of his money back. ‘Obviously, looking at it now, what we did was kind of a big mistake.’”

The Olympian in Washington. “Downtown’s historic Capitol Theater building, which was put up for sale in April, has a new selling price and a new tenant. The building also has lost one tenant since April but will gain one more starting next week. The building has five ground-floor retail spaces and 10 loft/office suites on the second floor, said Ryan Clintworth, the listing agent for the building.”

“Building owner Gary Holgate of Chehalis, citing health concerns, put the 21,000-square-foot building up for sale this spring for $1.8 million. After the building failed to attract a buyer in the past six months, the price was lowered to $1.45 million, he said Friday. Although the building has yet to find a buyer, it has received interest from prospective buyers including an undisclosed Bellingham resident who at one time had the property under contract, Holgate said.”

“‘We just couldn’t strike a good deal,’ he said. ‘That’s the only one we’ve had that made an offer and put money down.’”

The Billings Gazette in Montana. “Russ Squire didn’t anticipate a gravel and asphalt operation across Highway 78 when he planned The Spires, his upscale sustainable subdivision on the northwest edge of Red Lodge. He knew there would be commercial activity across the two-lane road, he said, but no one imagined heavy industry on the picturesque bench above the town. ‘Our investment is toast if this happens,’ Squire said.”

“Squire said The Spires is plotted for 96 home sites in its first phase, though almost all are empty. He said he doesn’t expect much interest until the nation’s economy improves and until the gravel pit issue is decided. ‘This is not good for people. It’s toxins, noise, dust and increased traffic,’ said Ed Williams, who owns a home in Red Lodge Country Club Estates. ‘Property values will be affected, too. They could decrease 10 to 50 percent, depending on how close you live.’”

‘In a letter to Squire, real estate agent Dorthea Lowe wrote, ‘One of the assets of Red Lodge is air quality, and for the sake of a handful of seasonal jobs, this shall be compromised? Red Lodge is a recreational area, which will lose its appeal once poisonous fumes are starting to drift across the city, and it will negatively affect the marketability of any real estate and tourism in Red Lodge, quite possibly making us prisoners in our own homes and reducing all property values in and around Red Lodge by up to 56 percent.’”

The Flathead Beacon in Montana. “The nation’s rural homeless rate is soaring. In Montana, it has really grown wings. Exacerbating matters in Montana are the state’s high foreclosure rates, which are particularly prevalent in the Flathead. Lori Botkin of the Flathead Food Bank said her agency is consistently flooded with families, many from the middle class, which represents a dramatic shift from past years. ‘We’re not seeing the live-under-the-bridge homeless,’ Botkin said. ‘It’s more middle-income families. They come in, they’re well dressed; they drive nice cars.’”

New West on Wyoming. “Few places evoke the Wild West of range wars and land feuds more than Johnson County, Wyoming. Now Johnson County is making another transition: moving from an agricultural county to a mineral and residential county. The place has lovely landscapes and vistas, fertile ground for new housing developments for the energy workers, retirees, and second-home seekers who are moving in.”

“Wayne Graves, a tall, lean cattleman from Barnum who sits on the Johnson County planning and zoning commission, has watched land-use debates in the county for a long time. In 2006, a neighboring rancher, Nicky Taylor, divided 53 acres of her property into ‘Outlaw Acres,’ a 20-lot subdivision within sight of the Graves’s front porch.”

“About a dozen adjacent land owners showed up at the planning and zoning meeting to protest Outlaw Acres, according to Johnson County planner Rob Yingling. They objected…that the project was 17 miles from the nearest town, Kaycee, so that providing basic services would be a financial burden on the county. Graves said the cost of plowing roads and providing ambulance service to subdivisions such as Outlaw Acres ‘would tax us right out of this nation.’”

“‘It was not a good place for rural subdivision,’ said Yingling flatly. Not one lot in Outlaw Acres sold. The entire 53-acre subdivision is up for sale as a single parcel.”

The Idaho Press Tribune. “Key economic indicators such as the unemployment and foreclosure rate have not reversed their negative trends in recent months, but signs are emerging of better days ahead. Many experts see hope in the fact that those statistics are not getting much worse, either — possibly signaling the end is near for the worst economic downturn since the Great Depression.”

“After a record number of default notices totaling 819 in July, the Treasure Valley saw a 10 percent decline in foreclosure starts filed in August, according to IdahoDataProviders. ‘A 10 percent decline is always a good sign, but when we are talking record numbers of 700 to 800 foreclosures month over month like this its still pretty tough to take,’ president Charlie Nate said. ‘Hopefully in the coming months this trend will continue but I am not optimistic that we will see that.’”

“The number of short sales listed on the local market has also shown signs of stability in recent months, although the number continues to rise with August up 2.98 percent with a total of 2,765 short sale listings.”

From KXLY in Idaho. “If you’ve been looking for a truly unique home in North Idaho, the search is over. A barrel shaped drive-in restaurant is the talk of Osburn’s real estate market. The 80-year-old drive-inturned home was originally listed for $249,000, but the price has been slashed on the barrel-shaped domicile to $75,000.”

“Six or seven years ago, someone decided to transform this commercial property into a residential one. Now after being repossessed, this three bedroom, one bath property is for sale. Tomlinson Silver Valley Realty says a dozen or so families have looked but still no takers.”

“‘It has some unique features, lets put it that way,’ said realtor Roger Crigger. ‘Its going to take just the right person to want to buy this house as a home.’”

The Register Guard in Oregon. “Many things drew Ann Marie Mehlum toward a career in banking. She knew the ins-and-outs of the profession from childhood. Her father, Johan Mehlum, began as a teller and eventually became a branch manager and moved into executive positions. He launched Siuslaw Valley Bank — now Siuslaw Bank — in 1964, and remains president and CEO of the 10-branch bank at age 81.”

“Ann Marie Mehlum was at the helm as a group of local investors raised $10 million in capital five years ago and opened Summit Bank. It was Eugene’s first start-up bank in more than 25 years. Q: A common complaint among business people is that banks aren’t willing to loan money right now, or they’re short on capital. Is that true, or are banks just being more cautious or selective?”

“Answer: ‘There are a lot of factors. One is that there’s not near the loan demand that there was. Our pipeline is probably two-thirds of what it was a year ago, and of that pipeline, much less of it would be considered lower-risk, higher credit-quality demand.’”

“‘We are seeing sort of a last-gasp kind of loan demand, that’s really tough to do. It’s interesting, because the last thing that I want to do is make a loan to someone who wants to keep borrowing money to stay in business when deep in my heart of hearts I’m expecting that’s going to be the straw that breaks the camel’s back. You can’t be that kind of lender, but that’s tough in these times, because there are people who think if they just had more cash …’”

“‘I think that there is less willingness to take risk on projects that three years ago wouldn’t have seemed so risky. Anything speculative in construction, those are things that just don’t make sense to do right now. Those kinds of projects aren’t being funded. But where are they really being requested? That’s the thing. People think that we’re saying no. We’re not saying no, we’re not being asked.’”

“Q: How long do you expect the fallout from the highly publicized bank failures to last? Answer: ‘The administration is proposing sort of a super regulatory agency to manage the risk (and) figure out how to supervise them. And personally, my view is that will not be effective. I’m really hard-pressed to believe that (with) a $1.7 trillion organization (such as Bank of America), not only can it not be managed very effectively, I don’t think it can regulated very effectively. I just think it’s too big and too complicated.’”

“‘When I know how difficult it is just to really know where our risks are in this organization, the idea that even with an incredible organization and incredible team, that I could understand where the next shoe’s going to drop in a $1.7 trillion bank, to me we’re kidding ourselves.’”

“‘In 1999, that’s when Gramm-Leach-Bliley (the Financial Services Modernization Act of 1999) passed, and the essence of that regulation was that it allowed banks to be in the securities business and insurance and all kinds of stuff. I went back and looked at it a couple weeks ago. When it got passed, there was a lot of lip service and a lot of support for it, because they said they were going to make sure that they would not allow companies to get too complicated or too big, to present undue risk.’”

“‘Not to worry — they were going to take care of it, because the argument against that passing was, ‘How are we going to really make sure that these organizations function correctly and don’t take on too much risk and endanger the economy?’ That was all discussed.’”

“‘I went back on the Web site, the FDIC Web site, and … at the time (1999), there were 12,978 banks, with less than $500 million (each in total assets), which comprised 24.5 percent of the total assets of commercial banks (in the United States). There were three that had greater than $100 billion in total assets. And this is where we are today: basically 7,000 of the 8,000 banks (have less than $500 million in total assets). But we’re down to 7.3 percent of the (country’s) total banking assets.’”

“‘Why are we doing this? What is the reason to make the giant companies? They’re not more profitable, either. I don’t know why we’re doing it.’”

“‘I think we have a little opportunity right now in our history to rein this in, but I don’t know if that’s the direction they seem to be taking in Washington. They’re trying to devise some new regulator that’s somehow going to be smarter and better than past regulators. So I’m concerned about the future of it.’”

“Q: How do you break up the behemoths, or make them smaller? Answer: Maybe what you do is give them time, over a certain time frame. One of the things they are saying they’re going to do, but I haven’t heard any number yet, is that if you want to be that big, you’ve got to have a lot more capital, and you’ve got to have a lot more liquidity. The thing is, those giant organizations are so complex and have so many different subsidiaries and everything else, I really don’t think anybody could really (assess) them.’”

“‘When regulators come into our bank, the FDIC usually comes in with like 10 people for two weeks. They can turn over every rock here, and they do. You cannot turn over every rock in a (behemoth bank). What is $1.7 trillion? Can you get your mind around $1.7 trillion? I just don’t see it.’”

“Q: Is the public’s distrust of some of these bigger banks affecting smaller ones such as Summit? Answer: ‘Well, I was somewhere getting my hair cut a few months ago, and the gal asked me what do I do, and I didn’t want to tell her I was a banker. Whereas a few years ago, I was always proud of it.’”

“‘To me, banking has always been a noble thing…It’s something that I’ve always been so proud of. Well, I’m not proud of my big banking brothers, at all…I think that large banks are very, very short-term oriented, and there’s no reason not to be for them when you look at it, the way they’re set up. So I think if we’re going to leave them set up that way, we’re asking for trouble.’”

“‘I think it’s a very important challenge. Capitalism does not work if you can’t be allowed to fail.’”

“‘If you’re looking at quarterly growth and quarterly earnings all the time, then it just sort of goes unbridled. It’s just capitalism gone awry. As a citizen I’m frustrated and angry, and as a banker I’m sad about it.’”

The Williamette Week in Oregon. “When Sharon and Neil Anderson moved from the Bay Area to Portland’s South Waterfront in December 2007, they paid $1.4 million for a 12th-floor condominium with breathtaking views of the Willamette River. Now that same 2,200-square-foot condo elsewhere in the Atwater Place condo building could go this weekend at auction for as little as $699,000—or about half what the Andersons paid less than two years ago.”

“‘You could say that’s disappointing,’ admits Neil Anderson. ‘But there’s no blame to be handed out. That’s just the way it is.’”

“Lloyd Kendrick also lives in the Atwater. He has no regrets about buying his one-bedroom condo in January at $350,000. Those condos were originally priced at more than $500,000, and will now be auctioned off starting at $219,000. ‘If you spent $20,000 on a Mercedes and someone else later got it for $5,000, you might be upset,’ he says. ‘But in the end, you do still get what you wanted.’”

Bits Bucket For September 27, 2009

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September 26, 2009

An Egregious Error

It’s Friday desk clearing time for this blogger. “Chicago’s bungalows and brick Georgians are selling, but woe to the owner of a city condo. Phil Sammarco didn’t think it’d be so hard to sell his two-bedroom, two-bathroom condo in the city’s DePaul neighborhood when he put it on the market in March for $449,000. Now priced at $435,000, he has fielded — and rejected — a few low-ball offers and showed the unit to a lot of first-time buyers who have indicated they have a wealth of properties to look at. Now he’s thinking of turning it into a rental instead of lowering the price again.”

“‘You’ve got a lot of choices,’ Sammarco said. ‘Right now nobody is really comfortable that the worst is behind us. If you don’t think the market is stable and you don’t think it’s going to be as good or better, why wouldn’t you rent?’”

“A few years ago, few people in the housing market had ever heard of a short sale. Mention the term today and people, whether they are homeowners or real estate agents, just roll their eyes. The Obama administration is aware of the frustrations. In mid-May, Treasury Secretary Tim Geithner announced plans to streamline the process by offering financial incentives to mortgage servicers and investors that accept short sales.”

“Meanwhile, homeowners like Dallas O’Day are in limbo. O’Day, a Chicago attorney, and his family relocated from California in June 2004 and bought a Mediterranean-style home in Chicago’s Beverly neighborhood for $395,000. They rewired the house, stripped and refinished the wood floors and the woodwork, and did other work to restore its charm.”

“Last year, personal circumstances prompted them to list the home for sale just as the housing industry’s meltdown was picking up steam. With no takers and no longer even expecting to break even on his investment, O’Day relisted the 2,700-square-foot home in January as a short sale. Four months and three price reductions brought the house down to $384,900, at which point a potential buyer made an offer in late May. O’Day accepted it and submitted the paperwork to the lenders holding first and second mortgages on the home. He has yet to receive a response.”

“Meanwhile, the family has moved into an apartment, the refrigerator has broken in the home and there’s evidence of mold in the basement.”

“‘What has astonished me is that in the presence of one of the softest housing markets I can remember, we’re hitting up on four months and they’ve just had a person assigned to look at it, that they would move at such a glacial pace,’ O’Day said. ‘My expectation is I’ll be renting until whatever blemish is gone. I’ve just accepted the fact that at some point it’ll be foreclosed upon because I just don’t think the banks will pull it together. I feel like I’ve done everything I can do.’”

“A slowdown in the local housing market is reflected in assessed values for homes in Yakima County this year, the Yakima County Assessor’s Office said. .Certainly, King County has suffered from a bursting of the housing bubble. Stan Roe, assessment unit supervisor in the King County Assessor’s Office, said Monday market values in King County fell by an average of 15 percent this year.”

“‘I don’t think I’ve seen this big a drop before’ said Roe, who has worked for the King County Assessor’s Office for 19 years.”

“The spectacular fall of WaMu has left a hole in the heart of Seattle. To mark the anniversary of WaMu’s collapse, The Seattle Times caught up with former employees…who saw problems behind the scenes before the final days. James Meacham was at ground zero for some of Washington Mutual’s most questionable home loans. He wasn’t a typical banking executive — he had a master’s degree in theology and had spent time as a minister. He was hired in Seattle in 2000 and rose to become a vice president of business strategy at WaMu’s Long Beach Mortgage division. Based in California, the division specialized in subprime mortgages, made to those with flawed credit histories.”

“On a gut level, Meacham says, the packages of loans that Long Beach and WaMu began bundling and selling to investment banks didn’t make sense. But those loans held the lure of bigger profits for everyone, and the investment banks couldn’t seem to get enough of them. Meacham says he could see the housing crash coming, and sold his California home in 2006 at the peak of the market: ‘It didn’t take a financial genius to work out that blue-collar workers can’t be paying $3,000 a month for their houses,’ he says.”

“There was the pressure from his superiors at WaMu to grow the business rapidly, he says. There were the mathematical formulas and financial projections that showed bundling all those risky mortgages would turn out just fine. And there was a sense that the rules of the game had changed. He has wrestled with the question of who was primarily to blame for the mess. Was it lenders like WaMu? The investment banks? The global housing boom? He wonders if there is a point where credulity, and belief in a system, become culpability.”

“‘The basic problem was the assumption that housing prices would always go up,’ Meacham says. ‘It was an egregious error.’”

“No state has fallen as far as California has in the current global recession. James Doti, president of Chapman University in Orange County and a member of Mr. Schwarzenegger’s council of economic advisors, was in Toronto to discuss the many issues plaguing the state. Here is an edited conversation with the Financial Post’s Eric Lam.”

“Q. What was it about Southern California that made it such a target? A. Zoning, environmental regulations, real estate controls are all greater in California than other parts of the nation. This led to more rapid housing appreciation in Orange County than elsewhere because it was more difficult and costly to build there. Since the construction industry could not respond as rapidly as it could in other parts of the country, it led to a severe supply-demand imbalance.”

“Q. What kind of price appreciation are we talking about?”

“A. At one point average prices in Orange County hit US$750,000, roughly ten times the household income. This could not be supported and that’s when the drop occurred. But houses are affordable again: the average house price is about US$400,000. There were small 100-year-old units close to Chapman that were two room bungalows, maybe 900 square feet, going for US$900,000. Now they’re down to US$300,000, and still people look at them and say, ‘My goodness that should be no more than US $75,000.’ But in Orange County that’s affordable.”

“The real-estate bust that has pummeled San Diego’s downtown condo market and wreaked havoc in its outlying suburbs has hit its once-impregnable beach communities. Beachfront property has come down as much 30 percent in some areas from 2006 highs, with much greater savings possible on foreclosure properties or short sales.”

“Even the crown jewel, Coronado, hasn’t escaped the downturn. ‘Four years ago, you couldn’t find anything in Coronado for under $1 million,’ said Maureen Kerley, a real-estate agent who works in Coronado and Scottsdale. ‘Now, there are dozens.’”

“Please, keep those tax credits rolling. That, not surprisingly, is what the battered real estate industry is arguing as it lobbies for an extension of the $8,000 first-time homebuyer tax credit. Zillow is rolling out a new survey of homebuyers that finds that extending the tax credit would bring an additional 334,000 buyers into the market over the next year starting in December. Overall, that estimate is based on a nationwide survey of prospective homebuyers in which 18 percent cited an extension of $8,000 tax credit as the ‘primary’ influence on whether to jump into the market.”

“Still, extending the tax credit could prove costly to the rest of us who have either already bought homes are renting now. Obviously, at some point the market will have to stand or fall on its own without Uncle Sam’s help. But is it time to go cold turkey now?”

“The Florida housing market is struggling because of a declining population, tight credit, high unemployment rates and a lengthening of the home-buying process, economists said. ‘I think we have a tougher path to get (out of the housing slump) than the nation as a whole,’ said Dr. Sean Snaith of the University of Central Florida’s Institute for Economic Competitiveness.”

“Tax credits won’t solve the main problem of limited credit, Snaith said. ‘Most people cannot get financing right now — that to me is the bigger problem,’ Snaith said.”

“First-time house buyers in Australia this summer took out bigger loans than the same period a year ago, writes Nick Gibson. The Australian Bureau of Statistics says that the average loan size for first home owners increased from $246,500 in 2008 to $269,100 in July 2009. This compares with the average mortgage for a new house of $266,900.”

“The trend suggests that first-time home buyers have been contributing less of their own savings while taking advantage of the $21,000 in government housing grants introduced this year as as part of a national stimulus package.”

“‘The housing grants have helped to incentivise a property market that shows no sign of stalling and is forecast to grow consitently over the next decade,’ says Darrell Todd, ceo of thinkingaustralia.”

“The Reserve Bank warned yesterday that the super-sized loans were an ‘unusual outcome’ given that loans to first home buyers were normally smaller than loans to other home buyers. However, figures compiled by the Australian Bureau of Statistics show the average loan size for first home owners was up from $246,500 a year ago to $269,100 in July. This compares with the average loan size for all owner-occupied housing commitments of $266,900.”

“First home buyers have also helped to push up new home sales, according to the latest Housing Industry Association report. According to analysts, the growing loan size suggests first home buyers have been relying heavily on government grants of up to $21,000 rather than putting their own savings into it.”

“The International Monetary Fund has urged central banks to be prepared to lift interest rates to head off the sort of asset price bubbles that produced the global crisis. But don’t expect the Reserve Bank to start targeting Australian housing prices. Yet still be prepared for the central bank to lift interest rates more aggressively if house price rises start getting out of hand. And expect governor Glenn Stevens to complain more about other policy bottlenecks that appear to be pushing up house prices.”

“Stevens has long been uneasy with the orthodoxy — promoted by former US Federal Reserve Board chairman Alan Greenspan — that monetary policy should not aim to dampen asset prices, except to the extent needed to keep goods and services inflation low.”

“‘I personally would not want to commit to saying, ‘we’re definitely never going to pay attention to asset prices and totally ignore them,’ he said. ‘That has been shown to be a mistake, basically.’ But neither would the Reserve Bank ‘aggressively chase down’ asset prices that “pop up here and there”, even if they didn’t seem to make sense.”

“Today’s rising housing prices, however puzzling, are not a bubble now because credit growth remains subdued. But Stevens admitted to not understanding why Australia’s housing prices are so high given we have so much spare land.”

“Agents are expecting a flood of first-home buyers this weekend. Figures from Australian Property Monitors show there are 4054 metropolitan properties priced under $400,000 on the market - 58 per cent of the total 6997 listings. This compares to the 3921 properties under $400,000 that were on the market at the same time last year and 6412 for total listings.”

“‘It’s the last weekend before the grant changes,’ said Toop & Toop agent Kay Morris. I would imagine there would be more people this weekend looking.’”

“Century 21 Central agent Rosalyn Marker said there was a sense of urgency, which was evident at a Melrose Park sale this week. ‘To have an open with 88 people over the last Saturday and Sunday was a very rewarding result for us,’ she said. ‘We had 11 offers on that property, most of them were young couples … and I would be expecting them (those who missed out) to be looking again this weekend.’”

“Sang Ah Lee, 25, signed a contract for the Melrose Park home on Tuesday after searching the property market for about four months. ‘Because of the grant I tried harder to find a property I liked because that was a deadline for me,’ she said. ‘So I was very lucky.’”

“The Australian dream of home ownership is slipping away, leaving a threat of a US-style collapse in house prices, according to a team of university researchers. Analysis by researchers from South Australia’s Flinders University has revealed home ownership in the 10 years from 1996 rose only 0.8 per cent despite strong economic growth and low interest rates in that period.”

“Other findings included large gains in national income from the resources boom were ‘wasted’ by increasing house prices and accumulating debt to unreasonable levels.”

“Dr Joe Flood, the Institute’s adjunct professor, said the ‘the writing is on the wall for the ‘Australian dream.’ Dr Flood and his team assessed Census data to conclude that Australia’s housing market is in “a very dangerous and unstable situation which has received little adverse attention.’ The researchers found that after 1996, average house prices increased by three times on average - to around 6.8 times medium household income - and debt levels surged.”

“‘On the one hand Australia is vulnerable to a collapse like the United States, where prices fell by a half during the sub-prime collapse … or to a long slow decline as in Japan since 1988,’ Dr Flood said.”

”’The country that promised limitless land, cheap housing and near universal home ownership to all comers now has the most expensive housing in the world amid very tight housing and land markets and little prospect of restoring the balance,’ Dr Flood said. ‘As long as the Government, the public and the media remain in denial, and self-congratulatory rhetoric continues that Australia has cleverly avoided the housing market correction it needed to have, there is little chance that matters will improve.’”

Bits Bucket For September 26, 2009

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September 24, 2009

Bits Bucket For September 25, 2009

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The Eternal Boycott

by NY City Boy

In Arlington Memorial Cemetery there is an eternal flame. It flickers and flashes and burns on through daytime and nighttime. That flame does not care if the sun is shining or the sky is filled with rain. It does not ask the calendar if it is Sunday or Monday or Arbor Day. It just burns on. In the corners of my heart there is a flame of another kind. It is the flame of dislike for all things that touch real estate. It is a flame that burns bright and strong. It is a flame that will fuel my eternal boycott of the real estate game for the rest of my waking moments, and beyond. That flame does not take names and it does not take prisoners.

It was a clear, beautiful day in March of 2005. I would say it was during the winter time but this was in the South. They do not get much of what I would call “winter”, especially by my standards of what I grew up with. My wife and I had decided it was time to up and leave our comfortable southern house. It was big. It was vinyl. It was not making me happy. We needed something more from life. We needed to have some fun and excitement.

The genesis of that decision had been our decision to not have little NYCityBoys and girls running around. We looked at all of the “joy” of the kid crowd and decided that maybe it was not for us. That became a problem. We had moved into a neighborhood that was completely centered around the patter of little feet.

To live in a neighborhood that is focused on kids, when you don’t have any kids, is much like being the sober guy at the bar at 2:00 in the morning. At least I think it is. I have never actually been that guy but I am sure I have driven many of those guys to near violence. My life in the cul-de-sac has allowed me to imagine what it must be like to be that guy. You know there is some kind of party going on. You also know that you just do not fit in with the rest of the crowd. Perhaps we could develop neighborhoods that specifically forbid kids. They would be like the no-smoking sections of the old days, say 1992. That way you could know what you are getting into before buying. I think the neighborhoods without kids would be a lot more fun. It is too bad that the only way to get into such a neighborhood is to be in your blue hair, no ass with high pants stage of life.

Upon deciding to sell our slice of The American Dream we did what every well trained drone does. We searched for a real estate agent. I could not just call the guy that had sold our townhouse because my wife did not like him. She thought he was a little too slick. I told her, “he’s a f—ing real estate agent, for god’s sake. What do you expect?” I had liked him because he and I agreed on aggressively pricing the place and we got it sold quickly. I think it took about eight days. My wife thought we had “given it away”. I tried to tell her that this was not the case but sooner rather than later I had given up on that argument.

While searching for a real estate agent I did not take it as seriously as I should have. This was 2005 and the market was still strong. We were in a new development and we had a large house. We could price it right and get it sold. I told my wife, “any idiot could sell this”. Boy, was I wrong.

We found a local real estate agent on the Internet. She had what looked like the stereotypical real estate agent look. She was blonde. She didn’t look like she would be working on any NASA launches any time soon but I figured all I needed was somebody to list the house, take a few pictures and follow up on offers. I could train one of the cats to do that. Oops. I should not have typed that. One of them was looking over my shoulder as I was typing. She is pretty pissed off that I just lumped her in with a real estate agent. I will be sleeping with one eye open tonight.

We met with the real estate agent. Of course she pulled up driving a Mercedes. I rolled my eyes at that. We spoke with her for about half an hour. She seemed nice. It seemed like she understood the area. That was enough for us. We were in a hurry to get out of cul-de-sac purgatory and figured this should work. After all we were dream customers. We were committed to selling quickly. We told her we absolutely did not want to overprice the place. We wanted a quick sale and that should be music to any real estate agent’s ears.

We started talking about getting the place sold. My wife had painted some of the walls with colors that she had liked. We asked if we should paint the walls back to white. She assured us that this was not necessary. I was skeptical but I agreed. I guess I was just thinking about the fact that I was glad to get an answer that didn’t involve me doing anything with blue tape or a roller. We talked about pricing. I think we, at first, thought that the place could be priced around $315,000. That was more than we paid two years earlier. I would have gone even lower but I remembered the “giving it away” comments with the townhouse. Our agent, I will call her Babs (in honor of Babs Cocker-ham or whatever her name is) from here on out. Babs told us that she thought we could price at $330,000 and still get a quick sale. I do not remember if our eyes lit up with dollar signs but I am sure that we were like any other people. We liked hearing the words “quick sale” attached to the $330,000 number. So, we agreed to price it at that level. Based upon what was still selling in the neighborhood it seemed reasonable. We mentioned that we would lower the price quickly if it did not sell. That was agreed upon. We signed a six month contract with Babs. When she left everybody seemed to be happy.

A few days later our house was on the market. Babs told us our listing was up on the MLS. Babs brought a “For Sale” sign to put in the yard. She also brought a little box with flyers that went out by the driveway. We had cleaned the house from top to bottom. Let me pause for a moment here. Anybody that has ever had a house in shape to be shown knows how awful it is to keep it like that. It is like living in a model home. Knowing this I can never understand why anybody would want to allow their house to just fester on the market month after month. Perhaps they quit cleaning. But we had gotten our house into shape to be shown. I even told the cats to try to be less messy since we were trying to sell the place. They just laughed and told me to, “go f— yourself”. The cats are not really what I would call “team players”.

Our listing was on the Internet in a flash. I went out and found it. I noticed two things. The pictures that had been taken looked like absolute crap. The price reflected the first price we talked about, not the higher price. I pointed these things out to Babs. I should have known something was wrong when I was talking to her on the phone and I could hear the wind rushing through her ears. She apologized for the pricing mistake. She said the pictures were just fine. I knew that was a dead end. I just hoped it would not sink us.

The calls for showings began on the first day the house was listed. I had already completed my time at work, and was not ready to head to New York, so I had an opportunity to be at home and keep the place clean. Our first showing was slated for early in the afternoon. I was at home cleaning and hoped to get out of the house about twenty minutes before the showing. This would give the cats the least amount of time to do any damage. As it turned out the real estate agent and the prospective couple showed up very early. I was still in the house. The real estate agent apologized and told me they were running early. She said I could stay. I did not think she was serious. I told her I would get out of the way and go across the street to talk to my neighbor.

The couple was in the house for a little while. It may have been twenty minutes. I did not speak to them. They pulled away and the real estate agent stayed behind a couple minutes. She came over and talked to me. She said that it was early in their search and they had not made any decisions. It was clear they did not love it. She then told me she had to show me something. I asked what it was. She had one of the flyers in her hand. Babs had not printed up new flyers. She had just put a small label over the initial price. If you turned the flyer over you could see the old price and that the figure had been raised. That was embarrassing.

I called Babs and got the reaction to which I would become so familiar. She treated it like it was no big deal. These things happened. I cursed to my wife and started to wonder if this idiot was too much of an idiot to sell our house.

The days passed and our house stayed on the market. I moved to New York City while my wife stayed behind. The showings were racking up. I would try to talk to Babs and ask her if we should lower the price. She would say, “no. We just need to be patient.”

The miracle of the Internet allowed us to see what the many visitors to our house were thinking. Some complained about the size of the lot. I could not do anything about that. Some said they did not like our neighbor’s pool. That was out of control at this point. I also noticed that the teenage daughter was now having people over in the afternoon to swim. They blasted the crappiest music known to man. That was frustrating. Remember what I wrote about neighborhoods without kids. The other little rascals in the neighborhood can have a huge impact when you try to sell. Some complained about, drum roll please, the customized paint colors. It was becoming clear to me that this was screaming one thing to me. It was yelling, “lower the price”. People might be willing to tolerate these things but not at the current price.

My wife finalized her work transfer and moved to New York. The cats relocated with her. The house sat empty. The showings continued. My frustration level was rising.

I now had to have a long distance relationship with Babs. My frustration continued to grow. We would hear from her sporadically. I would have to try to track her down. One day I spoke to her and told her we needed regular updates since we were now dealing with an empty house. She said she would do her best but she was very busy. I had to check that out. I looked at her site on the Internet. She had a listing for some raw land. She had two other listings for some run-down houses. Neither house was listed at even half of the price of our house. I could not believe my eyes.

She should have been treating us like royalty. Instead she was tough to get a hold of and she still would not lower the price. I could not understand this. The only thing I could think is that she was dumb enough to want to maximize her commission even if it took longer. She actually told me everything was going well. Her reasoning was that we had had a lot of showings. I reminded her we did not have a single offer to consider and it had been two months. It was clear that we were priced too high. We needed to lower it and get it sold.

The communication from Babs became less and less frequent. Finally I had had enough. My wife was at the same spot. I told her we were going to kick Babs’ worthless dye job to the curb and hire the agent that had sold our last place. My wife, putting her past thoughts aside, told me to make the call.

I made the call immediately and told him the situation. We still had our contract. He told me we should be able to get out of it. I called Babs and told her I was firing her. She told me that we still had a contract. I told her she was a complete incompetent and that if she fought me on it I would do whatever it took to get away from her. She finally agreed to release the listing but we would have to pay her $600 for her marketing efforts. I did not know what efforts to which she was referring. Perhaps those little labels were more expensive than they looked.

The new (old) agent and I discussed what we needed to do with the house. The first thing he said was, “those walls have to be painted”. I swore a few times and agreed with him. He told me he could find a guy to do the painting. It would be $1,800. I told him to do it as soon as possible. He said he would take photos and create a panoramic presentation. He sent somebody over and they did a beautiful job of it. He said that we should lower the price. I agreed and got the price down to where it had to be. My wife did not object at all. She did bring up the idea of renting it out at one point. I think I slept alone that night after I snapped her head off about, “there is no f—ing way I’m going to be a long distance landlord”.

Babs was still not gone. She would not release the listing until our check had cleared. I could not believe it. She had stopped taking my calls. I know I left her a couple choice voice mails. I hope she kept them. I would like to hear them some day. She was like an STD that would not go away easily. But finally she did. Our check cleared and I was free of Babs for the rest of my life.

Within two weeks our house was sold. We lowered the price again during negotiations and I heard some grumbling from my wife. I think she knew enough not to continue to question it. She did not dare use the words “give it away” on this one. She knew that I just wanted to be rid of that headache.

I did not just get rid of a house. I got rid of Sundays doing yard work. I got rid of witnessing the neighbor’s kids go through their teenage years at their pool while the hip-hop blasted. I got rid of having no flexibility to look for a job where I wanted to look for a job. I got rid of being over $250,000 in debt and feeling like I had to go to work every day and say, “yes sir” because I was a debt slave. I got rid of a lot of things. I got back a sense of freedom and that was worth its weight in platinum. I was all smiles.

The moment I sold that boat anchor was the day I began my eternal boycott. It was my independence day from the scam that is known as “the real estate market”. I could state from that day forth that I never again wanted to deal with a real estate agent. I never again wanted to deal with a mortgage broker. I never wanted to have a house for sale. I never wanted to have to fight with my wife about the nickels and dimes that were paid on the house. Renting is not throwing my money away any more than eating a steak, instead of ramen noodles, is throwing money away.

I will gladly sign over a check to my landlord for the opportunity to pass along all problems onto him or her or whatever. Today I received an email that a good friend in the North Carolina mountains had a basement full of water. I spoke to a colleague in Atlanta and he had pumped 250 gallons of water out of his basement in the past few days. Their tales make me feel bad for them but they make me feel wonderful that I have not bought into the fairy tale that owning a house is the American Dream. I know many people with kids feel they have to own a house. I can understand that. But for me I will choose freedom for the rest of my life. Take that six percent and shove it where nothing seems to shine. You will never see a dime from me.

(Note: My old house languishes on the market. It has been “For Sale” for more than a year now. The current owners do not share my philosophy of “lower the price and get it sold”. I guess they like having an empty house. Perhaps I should give them Babs’ number. It seems they were made for each other.)

Bits Bucket For September 24, 2009

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September 23, 2009

Bits Bucket For September 23, 2009

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September 22, 2009

A Delicate Dance Between Ambitions And Resentments

by ahansen

“The government had absolutely nothing to do with [my economic success at Halliburton].”

Dick Cheney 10/5/00

“Keep your government hands off my Medicare!”

-Irate voter at Simpsonville, (!) SC town hall meeting. 7/28/2009

“I don’t see that being a problem.”

-Cathy Maples, DOD contractor who paid $63,500 to dine with Sarah Palin, when asked if her airfare to the venue might be an issue. 9/19/09

Have we become so oblivious to the pervasive influence of our government that we actually believe we’ve got where we are by dint of our own hard work and perseverance? That our accomplishments and accumulations were achieved in a free market vacuum, unaided by a thriving social structure or abetted by the enormous leg-up we get by living in a technologically advanced system like the United States? Do we truly think that our entitlements were somehow earned and immutable, and not bestowed by a benevolent society?

If so, try building your material science research facility in Somalia or an agricultural conglomerate in oh, say, Zimbabwe, and see where it gets you.

Edmund Burke, often called the Father of Modern Conservatism, used the words “government” and “society” interchangeably. Although he argued that the two requirements of good governance, strong institutions and civil liberty came from contrary sources, he also understood that they were inextricably linked.

As our national dialog becomes more strident and the stakes more critical, perhaps we should take a moment to remember that we, you and I, are our government, and that without a regulated social structure, none of us would be enjoying a life— even the most impoverished among us— that compares admirably to a life of royalty a mere few generations back.

Compared to the average citizen of Burke’s time, we ALL live like kings, with virtually unlimited travel opportunities and communications, myriad foodstuffs and entertainments, freedom from starvation, enslavement and epidemic, and at least a cursory education for anyone who wants to pursue one. We Americans are among history’s most fortunate beings.

The average Kansan no longer lives in a sod hut, nor the average Californian in a hogan. Our diets are far removed from the maize, squash, beans and lizards of our recent progenators. (For most of us, anyway…Happy Birthday, Olygirl, BTW.)

City dwellers no longer come home to the flat and flatulous fare of onions, cabbage, and beer that awaited our great grandfathers, and cholera, polio and unresolved dental issues are no longer endemic to our outlying suburbs.

Personal preferences aside, we don’t necessarily have to spend our summers chopping firewood, or our autumns gathering acorns and grubs. We have indoor plumbing and outdoor “entertainment centers.” And Cheetos. We have Cheetos.

All this for a relative price tag that pales in comparison to what our peasant ancestors were expected to cough up into the public um, coffers.

Yet we still rail and complain and beat our breasts about creeping (or outright) “socialism” and about how “they’re” taking “our” money to pay for the sins of the unworthy while we toil in near-slavery. See our fingers bleed….

Just for the sake of argument, let’s consider our American economy as a game of Monopoly. Patented by Hasbro in the depths of the first Great Depression, Monopoly was the interactive virtual reality game of its day. To call it a metaphor would belittle its poetry— the thing is a cleverly-disguised propaganda tool; a simulacrum of free market capitalism that ultimately results in one player holding all the fake money while everyone else is forced into bankruptcy.

As the game begins, we start with a clean board. We get the same bankroll, the same opportunity to accumulate, allocate, and divest. We get to roll the same dice in turn, and deal with the same chance cards.

As the game progresses, most of us get setbacks. We land on the wrong squares, buy houses we can’t afford, and lose our hard-won holdings. But we suck up our losses, pay our fines, wait out a turn or two in jail, and if we’re broke, start back into the game when we pass GO and collect our $200 grubstake from the community bank.

Sure we’re peeved when the guy holding Boardwalk and Park Place slips his wormy little brother a railroad to keep him in the game. And yes, that bossy girl next door is scheming with her toadies to control the utilities and buy out our hotels. But with the proper tactics and respect for the rules of the game, a dedicated group of Monopolists can go on for hours, even days. (According to Hasbro, the longest sanctioned Monopoly game lasted an arse-numbing 1,680 hours—70 days.)

Let’s take this a step further.

Say you’re playing with a couple of neighborhood kids who have never seen a monopoly board, can’t count, and don’t know the difference between a house on Baltic and a hotel on Atlantic. While it might be personally gratifying to kick their butts and take all their pieces, it’s not going to be a very interesting game. And if you persist in cutthroat tactics and snide ridicule of their ineptitude, don’t be surprised when that dullard Kenny from across the street takes offense, upends the board, and sends your tokens flying all over the rumpus room.

Likewise, if one player always wins, it won’t be long before she winds up playing alone while everyone else is out in the sandlot swatting baseballs, or breaking into the parents’ liquor cabinet. If no one else ever gets a chance to win, it’s only a matter of time until they stop playing at all.

Without willing players, and a means of starting anew when the game becomes hopelessly lopsided, there IS no game—it’s just a hunk of laminated paper and some trinkets in a cardboard box.

And so it goes with our economy. With so many people at the table, and so many new and improvised rules being tossed into the mix, it’s hard to recognize what game is actually being played anymore. The intentions may well be Monopoly, but the execution is so murky now that we might as well be playing Yahtzee. Or 53 Pickup.

Lately it seems that the corrupt and canny among us have institutionalized cheating, gaming the system to nab the rewards that should rightly go to those of us who have taken the trouble to read the instructions on the box and play by the rules on the lid. We’re not supposed to get free houses and unauthorized bailouts, or sneak money from the till while the banker is distracted—let alone be rewarded for it!

From where I sit, it looks like this particular game may just about be over, and since all of our fake money is gone and our pieces are all in the hands of the “winner,” we need to decide whether we want to start a new game or go outside for some fresh air before we clean off the table and sit down to do our homework.

No one says we have to be happy about it. We might even waylay the jerk in the bathroom and punch him in the teeth for cheating and being so smug about it.

In real life, the end result of a monopoly is an aristocracy—or a dictatorship. That’s why we have a democratic government– our society– to keep the game in check. Reallocation is nearly always a better option than revolution, and periodically declaring a winner and starting over allows the game to go on. After all, you can only gloat over your boxful of plastic houses, pre-determined chances, and fake money for so long. Eventually it’s nice to have some competition again. And when you’re playing for real food, and shelter, and the survival of people’s families, the consequences of sitting alone behind your walls fingering your booty get a good bit more dire.

Our national dialogue may become rowdy and uncouth, but that’s a good thing, I think—it keeps us from getting too complacent and letting any one group or ideology become entrenched to the point of monopolizing the game. And as odious as it seems, sometimes we just have to declare a “winner,” clear the table, and redistribute the money if we want the game to continue.

So the next time you find yourself gnashing your teeth over loan forgiveness to keep some FB in a house they had no business “buying” in the first place, or so mad you can’t see straight about some corrupted functionary in a community “redevelopment” organization, ask yourself:

Do you really want the Paris Hiltons and Genna Bushes of the world running our Country?