Bits Bucket And Craigslist Finds For January 14, 2007
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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health care in the us
some scary charts and data
plus
going global / vote of confidence…….
net new stock fund investments
http://www.immobilienblasen.blogspot.com/
much scarier everywhere else
Not really. I did a full executive screening at Bumrungrad in Bangkok this year. Blood, xrays, sonogram, and consult. A whopping $200.00 - and it is a private, for-profit facility. The place looks like a 4 star hotel. http://www.bumrungrad.com
I also fell ill in Germany this year. Full consult and EKG for EUR 50.00.
Try that in the good old US of A.
Try paying 25% income tax rate in Germany.
Does your resident German state, such as Bavaria, charge another 9%? California does. I’d take 25% plus a VAT tax over the current Fed+State+Property+Sales Taxes which provide NO healthcare coverage and rotten schools.
Please, let’s not hold up German schools as a paragon of excellence. Have you actually attended one?
The more the evidence builds that the needs of citizens are not met in the US, the more people tend to spew around opinion. To clarify, opinions are unfounded, arguments are backed up with facts.
I didn’t say excellent, but implied better. Trumping the California (example) school system isn’t tough. I’d venture that the students of the Papua New Guinea school system could best the average CA student.
We are in a sad state of affairs, but hey, the cost of plasma tvs are falling by the week.
My opinionated comment was provoked by redhead.
On a purely racial demographic basis, it is unlikely that Papua New Guinea students can best average California students, unless you use the LA school district as your ‘average.’
I take note that your name is ‘Left LA Behind.’
in EU the taxpayers were buying
asia different story - less gov
USA is 50% gov on healthcare now
Bumrungrad is an excellent hospital, IMO — I had some work done there. Also had significant surgery at Samitivej — excellent service, super-attentive very cute nurses and anything you wanted. You could order pizza and beer — no joke — so long as it was not prohibited in the doctor’s instructions. Lights out at 9 or 10PM and they do not wake you again until 6AM. Outstanding — a revelation, of sorts.
Da, Ya, Si, partout. Everywhere. I am particularly fascinated by the 5,000 high rise business offices built in Shangai, China the last 10 years. 5,000 Empire Buildings in just ONE city. Wonder if many other Shangais have been built in other places ?
John Succo, a hedge fund manager, addressed a letter to the New York Times, explaining:
“The Federal Reserve creates credit through its open market operations like REPOS and coupon passes. If the Fed wants to inject liquidity (credit) into the system, they simply call up large broker dealers and buy some of their bonds with credit they create out of thin air (this expands their balance sheet). The dealer then passes this credit on to ‘the market’ by making loans to mortgage companies or margin accounts or whatever. Because each layer of lender is only required to keep marginal capital on hand, a $1 billion REPO done by the Fed eventually creates as much as $100 billion in new credit to the consumer.
“That credit creates the liquidity for additional consumption in the U.S., but these days we are buying our stuff from China (other countries too but we will just say China to make it easy). When a Chinese company receives dollars in trade, this normally would drive up U.S. interest rates: the company goes to the central bank of China to exchange Yuan for dollars; the central bank of China would normally sell those dollars into the currency market for Yuan thus driving up U.S. interest rates. But in our world of today these dollars are being sterilized: the central bank of China prints the Yuan to give to the company and takes the dollars and buys U.S. securities.
“It is not the excess savings of Chinese investors that are buying U.S. securities. It is central banks creating credit themselves to buy those securities. The tick data that measure foreign inflows of money does not distinguish between private investors and central banks going through brokers to buy U.S. securities. We believe that as much as 90% of foreign money buying U.S. securities (not just Treasury bonds, but corporate bonds, mortgages, and yes, stocks) is not private investment, but central banks.
“In order for other central banks like China’s to print the Yuan necessary, they too must create credit. Public debt in Asian countries is expanding as a result and creating worries: this is why Thailand came out essentially raising margin requirements to reduce speculation that is occurring as a result. Notice how they were quickly slapped down by their trading partners who do not want to rock the boat at this time.
“This situation is very unstable in the long run. The Federal Reserves’ balance sheet this year alone has expanded by $30 billion in this way and created $3.5 trillion of new credit in the U.S. Public debt around the world is growing exponentially and total debt in the U.S. now stands at nearly 3.6 times GDP (1929 was 2.8 times).
Perhaps the Canadian solution is better - nationalize everything and then make the poor souls wait so long for their CT Scan that (a lot of them) drop dead first. Anyway, it would help a lot here to get the lawyers out of the system - if a doctor or hospital does a bad job, shut them down.
If that’s entirely true about the Canadian health care system, then why do they, on average, live longer than we do?
I’d like to add a little to the Canadian condition. My entire family outside of my immediate family is Canadian. I have never heard a single word of complaint about their healthcare. More specifically, my grandmother lived in her own home until her death at 90, with a nurse coming to give her meals, bathe her, etc. Beats the heck out of being shoved in a old folks home.
Further, the last stat I saw on relative costs of US and Canadian health care systems, the average Canadian spend just over $3,000 on their care, while the average American spent over 6,000. Maybe I have to wait for a CT, but I’ll tell you which one I’d sign up for.
The Canadians live longer because they spend their money on the lower-end stuff, which gives a lot more bang for the buck (i.e., family care, preventive medicine, etc.). In the US, we neglect that in large part, probably because we have to pay at least for some it out of pocket. But in the US, we essentially give everyone access to the state-of-the-art expensive top-end end stuff. We’ll pay for heart transplants for 75 year-olds, where other countries might simply give them some drugs and wish them the best. It’s a tradeoff - and I have good coverage now, so maybe I’m a bit biased.
One other thing - we also pay for virtually ALL of the drug research in the world, thereby allowing every other country to get a free ride. Maybe we should all share in that - particularly because the political winds may cause us to say the heck with it and shut down that work.
Less fu–ken guns in the streets and bigger social benefits. For the moment anyways.
This is insurance/medical industry propaganda. Some Canadian doctors who can’t make millions like their U.S. counterparts complain their heads off, but government covered medical care in most provinces of Canada is BETTER than in the U.S. (Even if it weren’t, Canadians can buy health insurance and go that route if they want; they don’t HAVE to use the government programs). Each province in Canada has its own its own health care program; each must be rated on its own,
These programs differ from ours because they’re single-payer: that is, all tax money for health care goes to a central source that pays it out, skipping the middlemen we call insurance companies. By cutting out insurance company profits and price-gouging by doctors and hospitals, Canadians get health care for far less than we do. And even Americans who don’t have health insurance have to pay federal and state income taxes. Given how much the government takes from us, it should easily be able to cover heath care, if our politicians weren’t in the pockets of the AMA and insurance industry.
I’ve never known anybody from Canada who had to wait for any important procedure, nor I do know of a single Canadian suffering from a chronic medical condition because of lack of funds. On the other hand, I know several U.S. citizens who cannot afford necessary health care (hospitals are required to treat emergency patients, but not necessarily those with chronic conditions). If you pay cash, you end up spending far, far more than the insurance companies do, since they have negotiated prices. If you have insurance and are required to pay 15-20% of the bill yourself, you may actually be spending more than your insurance company, since your portion is based on the full billing price, while the insurance company’s portion is based on a negotiated, incredibly lowered price. All of it is a rip-off. Doctors, hospitals, and insurance companies are making out like bandits.
This trend has now spread to veterinarians and veterinary hospitals, and many turn away injured and suffering animals because their humans can’t afford the astronomical charges. Therefore, I support universal health care for humans AND animals. Getting rich off of the misery of others is disgusting, but turning the suffering away because one CAN’T get rich from helping them is just plain wrong. Americans love to brag that capitalism and its underpinning greed have produced the highest standard of living for the most people in all of history, but Americans seem to equate having STUFF with a high standard of living. Quantity, not quality. Yes, those with great insurance can get an MRI faster, perhaps, than those without, but this doesn’t guarantee the work will be any good, or the facility clean. In fact, outside of Third World countries, American hospitals are filthiest in the world, with the highest hospital-caused infection rates. Because they’re too cheap to pay skilled people to clean them. And if you catch an infection in the hospital and it takes a month to clear it up, the hospital bills YOU or your insurance company for ITS mistake and the consequences.
Most industrialized countries have national health care, and most have been very successful with it. Italy, Spain, France, Germany, the Scandinavian countries, Australia–all have wonderful health care systems that the anti-national health care people never mention.
They do keep dragging up Hillary Clinton and her pretend national health-care program, but that program was not single-payer; it was actually concocted with insurance companies and HMOs, one of which she had investments in. To this day, Ralph Nader calls it a total scam.
Now if only the CBC (a Right-Wing blog, no doubt) would agree with your utopian assessment of Candaian health care. Now point me to a story about waiting times in the US. Different countries - different systems - both with huge problems.
http://www.cbc.ca/news/background/healthcare/
Canadians live longer and spent 1/2 the money and everyone is covered. it’s pretty clear they have the best system.
…just stay reasonably healthy until you die.
Are you kidding? I waited WEEKS to get into a doctor’s office, even with supposedly great insurance, and getting bounced from one alleged expert to another took months. In the end, it was just a simple sinus infection that cleared up immediately once the correct antibiotic was prescribed. But, this only happened after endless visits and tests by many labs and doctors, and even an MRI, which was almost certainly unnecessary.
American doctors are notorious for doing unnecessary procedures, such as silly biopsies, to run up astronomical bills. They claim they do unnecessary tests and procedures to avoid malpractice suits, but suing a U.S. doctor for malpractice is one of the hardest things in the world, especially in Florida. Still, they claim they have to spend a fortune on malpractice insurance. Why? Why don’t they set up their own insurance company and insure themselves? Better yet, why don’t they do something about all the quacks causing all the damage?
“…just stay reasonably healthy until you die.”
that makes no sense. face it, the stats don’t lie. canada wins in life expectantcy, infant mortality and etc. it also costs 1/2.
tell us about the waiting times in the US if you don’t have insurance?
most americans have no clue about the canadian and european systems, they have just been scared by the right-wingers in the US.
Keep trying. Anyway, Incredulous did an excellent job making my first point about lower-end health care - it sucks in the US. In Canada they put there money there - and it makes sense, there’s a lot more votes when you have a well-functioning clinic that can serve 10,000 people per year, versus one or two hip replacements. It’s their decision to make - and I respect their choice.
As far as life expectancy - again to my first point - you get more bang for the buck at the lower-end. In fact, the best health care experience of my life was in BC. I walked into a clinic 2 years ago for a flu shot and didn’t even know that the nurse was done with me (painless, very quick, very very professional, and very cheap - even for an American). Meanwhile we couldn’t get anything to 90 year olds in Florida that winter.
Having said that - most people will not die because they don’t get the hip that they need - they’ll just have a really lousy life waiting the months and months for their turn on the waiting list. Thus the US system greatly improves quality of life, but does not do as well regarding life expectancy or other ways that show up in stats.
Needless to say, the American society, with its huge and varying ethnic and cultural groups makes a statistic like life expectancy very hard to compare. So it’s just one of many factors when comparing the systems - not the only factor.
As to cost - again, just like the Cold War, we carry the world on drug research. It’s a ton of money - and that should really be backed out when making cost comparisons.
Finally, Canada is welcome to lock-in a 1960’s style health care system, while picking and choosing from improvements since then (like newer drugs and paying for some elective surgey), whereas allow access to anyone who wants it (i.e., go broke and go on Medicaid if you really, really, want that hip).
what do you mean drug research. pharma spend more for marketing their drug than for research.
These programs differ from ours because they’re single-payer…
IMHO, it’s not the single-payer that keeps it cheap, it’s the controlled access. We have precedent for that in the U.S.
When HMOs first appeared they offered lower rates in return for controlled access. It worked, until… those that were denied access to expensive, unwarranted services got Congress to force HMOs to loosen up. Bingo, rates exploded upwards (again).
Thanks TJ,
I was thinking the same thing with HMOs. Those members saw that they were being left-behind relative to conventional mortgage and got jealous - and now HMOs are fading.
Canada’s single-payer system had the advantage of not allowing competition (recently overturned), so it was never as obvious to Canadians that they were stuck in the 1960s as it was to US HMO members. That probably accounts, in large part, for their huge level of support for that system.
An Area in ARMs
Sunday, January 14, 2007; From the Washington post Page F04
The top 10 jurisdictions by share of adjustable-rate mortgages:
1. Nevada, 43%
2. California, 40%
3. District of Columbia, 35%
4. Arizona, 33%
5. Florida, 33%
6. Colorado, 33%
7. Illinois, 28%
8. Washington, 27%
9. Maryland, 26%
10. Virginia, 26%
Sean, Your point is right on and the credit bubble is popping. That is what drove the housing bubble. I track a couple of subdivisions in the Sacramento area (Estates at Lincoln Crossing) and I have been tracking sub prime mortgage fraud. The idiot buyers are paying too much and getting loans $250,000 over market value. It does not matter to them because they put $200,000 in their pocket. Nevermind it is 80/20 loans with the second mortgage floating at 4.50% over LIBOR (10% all in?) Loan payments of $6,000/mon, and renting for $2,000/mon (assuming the “buyers” don’t just exit with the cash and leave the lender holding the bag).
I am sorry to say, there are FOUR more such sales in the last three weeks. UN*F@CKING BELEIVABLE! It is like I am whistling into the wind. The lenders and the FBI are working on the deals that closed a couple of months ago, but they are overwhelmed with cases. In the meantime, another batch of these cash back fraud loans show up on the books. There is only one conclusion: A complete meltdown is coming in the sub prime mortgage market. Long Term Capital will look like chump change compared to 2007.
Go here to see a supporting view:
http://www.marketoracle.co.uk/Article216.html
Paladin “Wire Paladin, San Francisco”
I think the Subprime meltdown will become “the story” of 2007, kinda like the Worldcom/Global Crossing/Enron days.
And oh yeah - we got Sarbanes/Oxley out of that. People, don’t let yourselves think the Subprime collapse will not result in new regulations.
“…new regulations.”
Not to mention a reversion to recently-abandoned loan underwriting standards…
and the utter disappearance of “MORTGAGE BROKERS”.
I won’t totally go there.
Subprime will exist in a fashion, because of the political implications of cutting off so many low income and immigrant buyers. Mortgage brokers will remain, since there will be a need for *some* skilled players who know how to navigate the programs.
But yeah, it’s gonna be a wipeout for a lot of the newbies that joined the gravy train the last few years. I guess they’ll go back to selling mattresses and UrbaLife.
“Subprime will exist in a fashion, because of the political implications of cutting off so many low income and immigrant buyers.”
This is a nice mortgage broker’s myth. In fact, the disappearance of subprime will cut off nobody, but it will have at least three great benefits:
1) Builders will once again base building decisions on what households can actually afford, rather than what speculators drunk on subprime are able to bid;
2) Lenders and households will come to terms on loans within the household’s realistic budget limit, rather than based on low payments now in exchange for a high risk of future foreclosure;
3) Low income, financially unsophisticated buyers will no longer fall victim to this new form of predatory lending, which seems to be nefariously adept at selecting FBs who don’t have the financial sophistication to understand the risks nor the financial resources to buffer payment shock.
I don’t think there will be need for new regulations for subprime. I think subprime will just be terminated. Sarbanes Oaxley was installed to insure CEO’s and CFO’s take responsibility for financial reporting by putting in place an internal control structure they have to approve.
Yeap.
Did you see my comment from last week about notifying the auditors of the loan companies? Remember what happened to Authur Anderson, auditor of Enron? They don’t want to be the deep pockets when the lender goes bk.
You can find the auditors for public companies in their proxy statement or 10-K. For New Century it is KPMG LLP, Suite 700, PlazaTower, 600 Anton Boulevard, Costa Mesa CA 92626-7651
Telephone 1 (714) 850 4300. New Century director in charge of audit committee is Michael M. Sachs, 18400 Von Karman, Suite 1000 Irvine, California 92612. The CPA firm address is from their web site.
So 50% of the adjustable loans in the DC area have 3% prepayment penalties and since they were 35% of all loans that means that 17.5% of all loans have these penalties. Since house prices have already dropped 3-5% in this area how will people be able to refinance or sell their house with out bringing thousands to the close? I know many at this site see the “train wreck” coming, what I cannot figure out is why the MSM does not?
“…already dropped 3-5%?” I’d triple that range, but the answer is that many will not be able to sell. They will either wait it out or go to foreclosure.
Don’t count on the MSM to figure out what is happening or what will happen. Their job, after all, is simply to report what has HAPPENED. Think of financial news like the obituary section - nice to know, but too late to help.
“…what I cannot figure out is why the MSM does not?”
They do. They spend their time getting their own houses in order and i appeasing their advertisers/constituencies. You do not matter. Never did, never will. Fortunately, the Net seems to beating them alive, an appropriate metaphor to the alligators that are eating so many FBs right now.
groan — beating = be eating
New Century and Novastar, the End of Glory Days
http://wallstreetexaminer.com/blogs/winter/?p=317
Russ, great find. So New Century’s borrower defaults on 2006 loans are running about 6 months ahead of 2005 loans and 12 months ahead of 2004 loans. And there are 6 times the outstanding balances, becasue the sub prime borrowers have not sold or refi’d, because they are stuck. SHhhhh. Don’t tell the RMBS buyers. Rates could skyrocket.
Not to mention that in many cases, each time a buyer refinances, they add a huge penalty to their loan balance….
“they add a huge penalty to their loan balance….”
Which adds to GDP, doesn’t it?
You mean the Greater Defaulting Payments? LOL
Actually an amazing number of subprimes have refied as the late 2004 pools have largely been paid off. For example NFI 2004-4 started with $2.5 billion and at 25 months is down to $735 million. 10.41% of the $735 million is in some form of trouble (60 days plus contractual dilenquency, including foreclosure and REO) at the 25 month mark. But what happened to the other $1.765 billion? It’s amazing that the industry would churn them into another mortgages within two short years, generating more fees, more payment penalties, what a racket. But it’s the new vintages that are quickly getting in trouble, so they’ve just jumped from the frying pan into the fire.
Russ, why are there $735 million worth of sub prime loans still in the NFI 2004-4 loan pool? Is this not a danger sign of its own? The fact that the remaining borrowers can not exit their sub prime loan after it has adjusted upward? Slow death by higher loan payments?
True, FB’s may have been largely refi’ing their way out of rate resets in 2003 and early 2004. It just concentrates the garbage loans in the 2005 and 2006 vintages. And I think that’s what Russ is trying to show will all the numerical quotes.
By the way, a six month default is just another way of saying foreclosure, in my opinion. That’s a lot of debt to solve even if the payments were rational to being with. The mortgage servicers simply haven’t pulled the trigger.
The end of Glory Days will usher in the….
Spring of pain
There’s a little black spot on the sun today
It’s the same old thing as yesterday
I have stood here before inside the pouring rain
With the world turning circles running ’round my brain
I guess I’m always hoping that you’ll end this reign
But it’s destined to be the spring of pain
spring of pain
spring of pain
spring of pain
It’s gonna be spring of pain…
Add to that, Synchronicity II
Another working day has ended.
Only the rush hour hell to face.
Packed like lemmings into shiny metal boxes.
Contestants in a suicidal race.
Daddy grips the wheel and stares alone into the distance,
He knows that something somewhere has to break.
He sees the family home now looming in the headlights,
the pain upstairs that makes his eyeballs ache.
Many miles away there’s a shadow on the door
Of a cottage on the shore
Of a dark Scottish lake……..
Many miles away…….
Now we have two poets competing, watch out for bubbles!
Inside the vacant tombs of vertical stucco walls
is written in neon paint the message of the new age:
“Killroy was here”
Hwy50 — you must be nearly as old as I am. I can remember seeing that phrase in a lot of places while traveling, when I was young.
Speaking of Synchronicity I’ve been listening to that album all week….eery!…even borrowed a song title for a screen name on another blog.
We were at a policy meeting….we were planning new ways of cheating.
Spring of shame. It rhymes with pain superbly.
WaPo on mortgage interest in bad loans. Kirstin Downey must give her boss Haggerty hives.
“Sugarman said Howard appears to have qualified for it with a “NINA” loan, a “no-income, no assets” loan that required minimal income documentation.”
Unbelievable. Is “NINA” a real mortgage industry term?
At the extreme edge of sanity before the blackness kicks I can somehow accept the “stated income loan” however just coming out on the front end and saying you qualify with NO income and NO assets takes it to another level. This has got to be a joke.
P’cola,
Yes, NINA is real…..well, actually NINA is very surreal….but it is an actual loan program. They should really call it, BOMB, for Bend Over MBS Buyer……and take it like a man, you fool….
Like Kenny Boy and ENRON.
Two bites from te WaPo article:
“But as housing prices have surged, outstripping wages in the most expensive markets, alternative financing has become a popular path to homeownership.”
“Alternative loan products are giving many people access to homeownership, counters Steve Calem, vice president with American Bank in Bethesda. “Interest-only loans help people get into their first house,” he said. “Interest-only loans minimize their payments, when people know their income is going to be going up. It gives them flexibility.”
I would argue that prices have outstripped wages in most all markets and that wages are not at all inflating at the same rate.
And that folks is the bottom line problem that is not going to go away. No matter how much the REIC wishes it so.
Does it bother anyone that oil prices have been falling and gas prices are up? Does it bother anyone that oil prices and gold were up and the stock market was up and then oil prices and gold prices are down and the stock market is going still higher? Does it bother anyone that traders are predicting falling interest rates especially the 10yr notes later in the year and credit unions have upped their 2yr rate to above 6% level? Does it bother anyone that the mortgage industry is imploding while the MSM and RE leaders bury their heads in the sand?
There are some serious disconnects out there in the financial world due to ‘easy’ credit but which domino will be the trigger to its unwinding and when?
Exactly.
I’m one voice that doesn’t connect oil price to RE. Oil has had it’s own moves due to overspeculation this summer plus some OPEC maneuvering and refinery capacity and delivery issues.
So what if oil goes back to $45? That’s still double what it was 3 years ago.
And magnetized toward 40 or less IMO.
This move in oil just brings it down to its long term trendline, connecting the lows at $10 in 1999, to $17 in late 2001. Right now, that trendline sits at about $47. My hunch is it will hold and prices will begin a new move up as part of a larger-term ABC pattern. We’re in the process of putting in the B low right now. Check out the volume on USO on Friday and tell me that doesn’t look like a washout bottom. The top three oil fields in world (Burgan in Kuwait, Cantarell in Mexico, Ghawar in SA) are in confirmed decline at rates between -5% to -14%. North Sea in confirmed decline. Prudhoe Bay. Iran, etc. This move down in prices simply removed investment demand, not actual demand for the physical product.
Basically I see four factors that will lead to much higher oil prices:
Declines in existing super-giant fields
Increasing demand from China-India
Increasing domestic use by exporting countries, resulting in less available to export
Lack of a substitute that delivers anything near the Energy Returned on Energy Invested that oil provides.
Given those factors, the typical human reaction is to fight over what’s left. The future we have to look forward to is the US involved in wars in the Middle East for the rest of our lives. But I’m sure the RE market will be able to shrug it off!
gee, you forgot the increase of production in russia, venezuela, mexico, and a couple of those central asian countries.
and brazil, canada, and a few more i cannot remember. may not be as cheap as those you mentioned.
“I’m one voice that doesn’t connect oil price to RE.”
Just think about liquidity in lending and hedge fund investing and you’ll find both oil prices and RE pricing have sprung from the same seed/
Instabilty in the Middle East will lead to lower oil prices because there is absoluty no incentive for the Saudi princes to keep it in the ground. With the rising threat from a nuclear Iran…all they want is to fill up their swiss bank accounts.
They’re pumping it as fast as they can. They’re investing billions to bring on line new fields, what little new fields they have.
If anything the prices now will cause them to delay the investments. As for the “get it out while they can”, they have billions in swiss bank accounts. They don’t need the money.
Saudi Arabia has to power to, and will, keep oil prices down and it has to do 100% with Iran.
err, i thought saudi arabia is tapped out with their existing facilities, that is why they are construction some more.
Construction of more facilities is pretty good evidence of additional product in the ground. More to the point, they need only increase their output a small amount, to crush prices, since most of the other members ALWAYS cheat during “production cutbacks” and Saudi carries the greates part of the cutback burden.
If it didn’t bother us, we wouldn’t be camped out on this blog day and night. So, “yes” I think it bothers some people. Quite a bit!
“Does it bother anyone that oil prices have been falling and gas prices are up?”
No. Why do you ask?
…spoken like a true Houstonian.
It does not bother me that oil prices are falling. I’m gradually building up more shares of an oil drilling stock paying huge yields. http://www.theoildrum.com http://www.lifeaftertheoilcrash.net/Index.html
Oil prices are down about 15 cents / gallon. Gas prices here are down about 5 cents / gallon.
On a percentage basis gas won’t fall as much as oil. Much of the gas cost is taxes.
Or look at it this way, oil could fall to $0 for 100% decline. Gas would still cost 60 cents in taxes, 0 for the oil, 10-15 cents refining, 10 cents transportation….so it would be $1 minimum. Or less than a 100% decline. Not fair!
Oil is cheaper than milk. Less than half the price. Are milk farmers gouging? Or are american consumers spoiled by LOW oil prices that they expect to continue forever?
“Or are american consumers spoiled by LOW oil prices that they expect to continue forever?”
The ultimate confirmation of your statement could have been seen in any parking lot 2000-2005: the almighty god-given SUV for a single person to drive around and act like Mr. Military man.
Of course now with Iraq and gas neither the military or SUVs are popular. It’s amazing how many people couldn’t make any connection between their driving of SUVs and our need for military in the middle east.
SUVs remind me of the wagons kings and queens get driven around in in the movies.
SD zip shows 200+ 4br homes pigeonholed into the $300K-$450K price range. This represents the low-end of the quality spectrum — homes in areas with high crime rates or lower ranked schools. Are there enough buyers looking for low-end 4br homes priced over $300K to absorb this inventory at the current price levels?
The city of SD is thinking about whether now might be a good time to cash in on its real estate investments:
—————————————————————————————————
City takes stock of its real estate
60 lots identified for possible sale
By Brooke Williams
STAFF WRITER
January 14, 2007
San Diego’s real estate division is cleaning house, hoping to make millions on land that has languished for decades.
NADIA BOROWSKI SCOTT / Union-Tribune
Ken Fagan and Martha Rockwood joined residents of Linda Vista Village mobile home park Friday to discuss their future on the city-owned land.
It has started pulling a list of property from its massive portfolio that could be considered surplus and giving public entities first dibs. The city, squeezed for cash by a crumbling infrastructure and billion-dollar pension deficit, hopes to put land on the market by June.
http://www.signonsandiego.com/uniontrib/20070114/news_1m14sale.html
The “millions”, if it comes to be, won’t make much of a dent in the “billion” dollar pension deficit will it? Cities are selling everyhing they can, from ww treatment plants to bridges to parking garages to try to stay afloat. What happens when there’s nothing else to sell?
The city of SD just hired a new actuary whose change of method somehow miraculously wiped clean a couple $100K-worth of pension liability. Of course, the newspaper did not begin to get into the details of how this is possible…
The magic of accounting.
That’s what I thought. Harry Potter in real life is an accountant at Fannie Mae.
Q. “What are the numbers?”
A. “What do you want them to be?”
Foreclosure blues. Or pinks, in this case
http://dallas.craigslist.org/for/262400968.html
So thoughtful of him!
Wow, losing his house, yet trying to sell anything not “nailed down” so he can make $40. Too bad he did not watch his money that way when he was a flush sub prime 100% LTV buyer…..
And if you need more than two bundles, you think he might give an even cheaper price on “used” insulation? Kind of like the farmers selling “pick your own” strawberries… pick your own insulation!
“Pick your own insulation”. LOL.
The concept could take the friendly neighborhood garage/yard sale to a whole new level!
I don’t need the insulation since I rent an apartment but I would pay $40 to give him a good kick to the balls.
LOL. You are too too funny. And the lender is already deliver the blow…..
Rock on NYCityBoy, LOL, ROTFL.. GOOD ONE!! Let the bidding war on kicking him in the nuts .. Ill pay him $41.00
28-year-old SD owners with Bragging rights to $1m+ homes set their own trend
————————————————————————————————
Price support
Demand remains strong for high-end homes
By Roger Showley
STAFF WRITER
January 14, 2007
Nekoda Bragg, 28, refuses to cut the $1,699,999 asking price on his 2,000-square-foot, 2-year-old condo in The Metropolitan atop the Omni Hotel downtown.
LAURA EMBRY / Union-Tribune
Relaxing in his 23rd-story condo, Nekoda Bragg has taken a different tack from other sellers by boosting his asking price. In fact, bucking the trend of so many other sellers, he asked his real estate agents, Dale Bowen and Ann LeBaron at Prudential California Realty’s Marina office, to raise the initial asking price by $50,000, which they said will give him extra bargaining room with potential buyers.
“I’ve turned down a couple of offers, and have not responded back to some as well,” said Bragg, a sales team coordinator at the ACN Telecommunications telemarketing firm.
And why is he leaving his 23rd-floor bachelor pad that commands a breathtaking view of the bay, and giving up room service provided by the Omni kitchens?
“I have definitely outgrown it,” he said.
He had previously owned a single-family house in South Bay and bought this condo for $1.5 million, thinking it would be a good place to hold gatherings of his sales team.
Now, he needs a secure garage for his two exotic cars – and wants to wean himself off of the go-go life in the Gaslamp Quarter. Plus, he has a girlfriend.
“I probably am going to buy a home in one of the ranchos, whichever one is best,” he said.
It’s that way with buyers and sellers of million-dollar-plus houses and condos. They set their own trends, even when conventional wisdom advises otherwise, and pack up and move when the impulse strikes.
http://www.signonsandiego.com/uniontrib/20070114/news_mz1h14price.html
Nekoda isn’t too bright, is he? He’s just guaranteed that he’ll never sell that place.
He bought the place in July 2004. He owes $1,000,000 on the first and $350,000 on the second mortgage (thank you Countrywide Mtg.) So he only put $150,000 down. He is an idiot and will have to bring a check to the closing. This place will sell for less than $1,400,000. He loses over $150,000 after selling costs, unless he sticks it to his Realtors. This is too funny.
wow, a peak buyer- can I join his “team”
why do people declare idiocy so loudly and publicly ?
Paladin — “sic ‘im”
“They set their own trends”, that’s histerical!
Someone needs to let this dope in on some sage advice I received years ago: “The Trend is your friend, never fight the Trend”.
I would so want to see a follow up story to this a year from now.
When people spout that tired line of crap, I ask them if the trend was their friend in March of 2000 or March of 2003.
Financial planning and cliches have no business being associated with each other in any way.
“The trend is your friend”
“Renting is throwing money away”
“Buy now or be priced out forever”
“God isn’t making any more land”
etc.etc. If somebody is speaking to you about finances and uses even a single cliche then you know they don’t know what they are talking about.
TX, the Trend isn’t always a good thing.
I believe the saying means that one should always understand the underlying dynamics of a situation in order to benefit from it.
“Be its friend” = to understand.
“Never fight” = sometimes means buying into the trend, and sometimes means stepping aside in order to not to be crushed by it.
Making the mistake of doing one when you should have doing the other doesn’t make the advice less valid.
TxChick, sorry to disagree with you on this one
Yes, the trend definitly changed by April, 2000. My definition of a Trend is 2 months change in direction. Plus, I add a moving average to plot along with the price chart. And, yes, the Trend is your Friend saved my assets in April, 2000 as I was able to sell 1.5 million dollars worth of dot.com stock as the trend was definitly changing. I got this so called “crap” from a bond trader of 30 years on Wall Street who lost everything because he violated this rule.
The real estate market showed in Aug, 2005 the rumblings of a change in direction and with the release of Sept 2005 figures, I was convinced the “bubble” was here. That’s my belief, and I am going to stick with it.
I’d like to add one more for your collection “When in doubt, stay out”. The housing market is in such a state of surprises, that there is so much doubt as what is happening, that I will just stay away.
It’s been well over a year and that Omni Hotel Condo still on the market. Good Call “Imoutthere” this guy really thought he was bucking the trend but seems to be the leader of foreclosure trend we are seeing.
telemarketing company makes this kind of money? he’s basically running a boiler room scam operation! this is sickening that people in the U.S. now regularly make fortunes at these type of businesses!
And he looks to be a telemarketing supervisor, wonder what kind of salary & bonus that equals.
This artilcle kills me. So much fluff, this condo went back on and off the for sale market a few times over the last 2 years. Why? because the market is determined by buyers not seller hype. Foolish hype like this is why people like this over-paid and are now stuck trying to spin why they can’t sell.
As I was driving in Brighton, MA yesterday I saw an ad attached to the side of a T bus stop. It had a picture of an older woman looking very distressed. At the top of the ad in large print ” YOU ARE QUALIFIED…” and at the bottom, “….TO LOSE YOUR HOME.”
Couldn’t read the stuff in the middle. I think it might have been for credit counseling. Hmm, maybe the FB’s have had to get rid of their SUVs and with their dull glazed over eyes standing at the bus stop, they will see the ad and it will finally dawn on them what the next step will be.
MSN has series of stories on foreclosure and credit fraud today on their web pages too. Light is starting to shine on the cockroaches. But education will be too late for so many.
“Take my house, please…”
—————————————————————————————————
Seller financing makes a comeback
By Bob Tedeschi
NEW YORK TIMES NEWS SERVICE
January 14, 2007
Home buyers in a stagnating real-estate market are starting to hear a term not bandied about since the days of high interest rates: seller financing.
This practice, also known as carry-back financing, can be a creative way to close a deal, especially between a seller who is financially stable and a buyer who is struggling to meet the requirements of a regular lender. But real-estate and lending executives say that such financing also carries risks that sellers in particular should consider.
It can be a good alternative for a seller who has other assets, “so he’s not wiped out if the buyer is delinquent,” said Raymond Bershtein, a partner in Bershtein, Volpe & McKeon, a New Haven, Conn., law firm with a large real-estate practice. “But if this is your primary asset, and it’s the way you’re going to retire or pay for your kids’ college bills, you’ve got to be really careful.”
http://www.signonsandiego.com/uniontrib/20070114/news_1h14seller.html
Talk about delaying the inevitable. We’re going to have to start creating sub categories of FB’s, like primary FB and secondary FB/FS.
I just had to do a seller finance (for an estate) on a purchase price of 35K! Buyer came up with 25K, but no bank would give him the 10K needed to close, so the Executor reluctantly agreed to finance the balance (1 year @ 12%).
I told the client to expect a foreclosure.
I think we are going to see alot of seller purchase money second T.D 10% to 20 % on deals .If its not a fraud deal it can be a effective way of limiting the lenders risk and putting some of the risk on the seller who will carry back the second .
That’s a great tactic for sellers to realize that extra 30% markup in the list price-take the risk and provide the financing for the “excess price”. I am surprised that NAR hasn’t started pushing this approach earlier.
Right , but the lender still has to approve of the sellers purchase money second and the appraisal has to be solid or it won’t benefit the lenders . Like everything I have been seeing lately it’s likely it will be abused by the REIC.
NATION’S HOUSING KENNETH HARNEY
Hybrids are replacing old adjustable-rate mortgages
January 14, 2007
WASHINGTON – So is it finally a farewell to ARMs – the once-ubiquitous adjustable-rate mortgages?
You might think so with fixed-rate loans priced just slightly above one-year Treasury-indexed adjustables. After all, why bother with an ARM at 5.8 percent – the average contract rate at the end of December, according to the Mortgage Bankers Association of America – when you could get a 15-year fixed-rate loan at 5.9 percent or 30-year fixed-rate money at 6.2 percent, all with roughly the same origination fees?
The latest national statistical survey bears this out: New adjustables dropped to a 25 percent share of the total market late last year, according to mortgage investor Freddie Mac’s annual ARM survey – down from a 33 percent share as recently as 2004.
Adjustables, which were first introduced in the United States in the early 1980s, once ruled the home loan roost. In 1984 they accounted for nearly two of every three new mortgages. Of course, those were the bad, bad old days of hyperinflation, when fixed-rate loans went for 15 percent and up, and one-year ARMs in the low double-digits looked like a relative bargain.
http://www.signonsandiego.com/uniontrib/20070114/news_1h14harney.html
The old time adjustables from the 80’s were not that bad . First ,those loans had a low margin spread ,(2% to 2.5% ), and they were tied to a slow moving index call the Costs of Funds Index. I had one of those adjustable loans on my long term residence and the average costs ended up being about 7 to 7.5% because of the low margin,(I had the loan for over 20years ). Of course I got rid of the loan when the fixed went down so low .
The current adjustable and IO loans are tied to faster moving indexes with higher spreads or margins of 3 to 6 % ,meaning the adjusted up payment is going to be higher . I think many people that went on these loans didn’t even understand what will determine their interest increases .
Back in the 80’s the old concept of the adjustables was that the lenders liked to make 2% over what it costs them for money in the event that they were holding loan packages ,so if lenders could adjust the payments and could roll with what their real costs were .
My adjustable actually went down to 4.5% in the course of time I had it after being at a beginning rate of 8.5% . In my case this loan out-performed the fixed rate I could of gone on at the time .
Now the fixed rate is the better loan for a long term loan of course because of the low rates and security of fixed payments in a interest increasing market .
“Now the fixed rate is the better loan for a long term loan of course because of the low rates and security of fixed payments in a interest increasing market .”
Bingo. Over the course of my lifetime, interest rates have completed one full cycle, from 3% long-term rates to over 14% when Volcker tamed the inflation beast and back down to the Greenspan-induced negative rates in the early 2000s. We are on the up phase of the cycle again, which makes a very unfortunate situation for FBs who are currently in ARMs and contemplating a refinancing to fixed rates as a potential remedy for rising rates. What is worse, rising rates and falling home prices go hand-in-hand, which sort of nullifies the option to sell and move on after five years of ownership.
Anybody watching the long-term bond yields the past couple of weeks may understand my impression that bond traders are on the verge of bolting; mortgage interest rates lurch upwards in response to jumps in T-bond yields.
http://www.bloomberg.com/markets/rates/
“We are on the up phase of the cycle again”
Put a yellow happy face and a black with white letter WIN (circa 1979) buttons on a “tickle-me Elmo” while listening to:
“Don’t worry be happy” playing in the background.
I want one that reads: WIN
“Want Inflation Now!”
“How kill the Housing Bug for everyone” by Paul Volcker
Materialism gone amok once again. This is just crazy. How big will this lawsuit be?
http://tinyurl.com/y45pc5
If you want something just work and save for it. Is that such a hard concept to understand?
Somehow, I don’t think the world will be damaged by the loss of this idiot. Other than perhaps her kids.
Imagine….My mommy died trying to win me a Nintendo. She drank too much water during a “hold your urine contest” and bloated. You don’t hear that everyday………..
She held her urine and now her heirs get to piss away the 7-figure windfall from the legal settlement.
This is the wussy version of “Shot a Minute” we use to play at UT. Although a number of egos were left lining the toilet nobody ever died in our contest and we played with a keg of beer.
She drowned her electrolytes. Her nervous system shut down.
How strange.
Should’ve drank Brawndo!
Although this castle has Dracula inspired connections, I think the Culture Minister has it right regarding the city purchasing it:
http://tinyurl.com/y4fm46
I wonder how you would list the amenities in the MLS!!
“I have nothing against the castle being bought by the city council if they are stupid enough to pay this money,” he (Habsburg) said.
What a lovely fella. Meanwhile, the local councilman is working with a Vienna bank to loan the city the money… A whole town of FBs.
–
Home Prices Only Go UP, Long-Term? A Table Worth a Thousand Words.
From 1990 to 2000, the real home prices across the US went up 18.3%, but in California they went down 15.3%. The East Coast States joined California in the decline.
Let us see, in 2000, California economy was doing great (the negative impact of the bursting of the Scam Market bubble didn’t show up until 2001-02), employment was doing great (it peaked in 2001Q1), and the decade of 1990s, especially towards the end, was great for the California economy, as well as the East Coastal states. On the West Coast, Oregon did the best in terms of home price appreciation in the whole country and Washington State did quite well. Well, the stories of Californicators moving to Oregon and Washington, primarily because of high home prices, during the 1990s must be true.
All the talk about the economy and employment supporting the home prices, it would seem from the data in the graph, is a bunch of BS if you look at the price changes from 1990 to 2000 in different parts of the US. Details are far more revealing than the gross numbers as to what happens under various conditions.
There is one and only one explanation for the real home prices in California to fall between 1990 and 2000 – IN 1989, CALIFIRNIA WAS OVER-PRICED AND OVER-PRICED AREAS ALWAYS GET OVERBUILT DESPITE ALL THE NONSENSE TALK OF VARIOUS BUILDING RESTRICTIONS THAT SUPPOSEDLY LIMIT THE SUPPLY.
What applies to California also applies to the East Coast states – the homes were grossly over-priced in 1989-90.
Jas
-x-x-x-x-x-x-x-
Change In Real (Inflation Adjusted) Median Price of Homes From 1990 to 2000
Connecticut -26.54
Rhode Island -22.04
New Hampshire -19.36
New Jersey -17.65
California -15.33
Hawaii -12.99
Maine -11.64
New York -11.54
Massachusetts -10.72
Vermont -8.61
Maryland -1.88
DC -0.69
Delaware 1.95
Florida 7.11
Virginia 7.82
Texas 8.41
Pennsylvania 8.87
Louisiana 13.79
North Dakota 14.64
Oklahoma 14.96
Nevada 16.11
Missouri 17.67
US 18.30
Arizona 18.57
West Virginia 18.95
Alaska 19.57
New Mexico 20.65
South Carolina 21.51
Georgia 22.06
Mississippi 22.47
Wyoming 22.74
Arkansas 22.97
Alabama 24.05
Tennessee 24.66
Kansas 25.19
Illinois 26.50
Ohio 27.87
North Carolina 28.78
Minnesota 29.52
Kentucky 34.42
Nebraska 36.65
Indiana 36.87
Montana 37.62
South Dakota 37.95
Wisconsin 40.43
Iowa 40.78
Washington 41.07
Idaho 42.88
Michigan 49.35
Colorado 57.62
Utah 66.02
Oregon 77.48
The Most Expensive Area, DC, In 1940 Has Been the Worst Investment & Least Expensive State, New Mexico, Has Been the Best Investment Over Next 60 Years
Good post! I heard of that figure (-15% or so) for California but did not remember the source. I do know Real Estate prices fell that decade, since I was affected, trapped, and had to sell for a loss. Apartment living for now is very comfortable and it is great to be free - not a maintenance slave.
Interesting factoid, Jas. BTW, your numbers on DC 1990-2000 mask a steep, multi-year decline during that decade. By the time we rolled into 2000, real estate was already booming here. I vividly remember being aware that something was wrong, even then, with locusts descending upon open houses, escalator clauses, etc. What’s shocking is that it went on for another five years. ‘Tis over now. Let’s run your numbers again in a few more years.
Jas– to be entirely fair, 89/90 was the peak of the (smaller) bubble at that point. When discussing that period, you really can’t ignore the total meltdown that resulted from the “Peace Dividend”. I got out of aerospace JUST before the top, and saw many, many people that got blown out of their jobs of 20, 25, 30 years.
Note, I absolutely agree w/your comments, just filling in the details. Love your posts.
The overbuilding is much worse this time…
Hi everyone, could you please read the article below and help me put it in perspective? It was published in the Raleigh News & Observer on Friday.
I am in my early 30s, have lived in the Triangle for 10 years, and have come close to buying a townhouse twice (1999 and 2003). Each time I didn’t feel ready for the financial commitment. Plus I really wanted a single family detached instead of a townhouse, due to the risks mentioned in the article.
Now it seems that single family homes are totally out of my reach. And there are townhouses galore now. I worry about buying into a glut of townhomes.
Any crystal ball theories on what will happen in the Triangle? Is the boom in townhouses related to the housing bubble and easy credit? Or is it truly due to demand? Should I keep waiting and see if prices drop? Any comments are appreciated.
==========================================
Townhouses gain fifth of market
The category is up from a share of 13 percent of sales in 2000
http://www.newsobserver.com/666/story/531559.html
Dudley Price, Staff Writer
Even as home builders across the Triangle cut prices to lure buyers, one segment of the market is racing to keep up with demand.
Townhouses — once a tiny fraction of the region’s $9.3 billion residential market — now accounts for one in five sales.
Surging land prices, particularly in Wake County, have made attached housing more attractive to builders and buyers.
“The market has been underserved, and the reason it’s growing so fast is there is pent-up demand,” said Bernard Helm, a market consultant of the townhouse market.
A record 3,248 new townhouses were sold during the 12 months ending Sept. 30. The category accounted for only 13 percent of sales in 2000.
Condominiums sales are strong, too, mostly in downtown Raleigh. But the vast majority of the attached housing increase is townhouses in Wake County, where the region’s housing market is concentrated and single-family lot prices have jumped 48 percent to $72,657 in six years.
Brokers say townhouses aren’t for everyone, because they tend to appreciate more slowly than single-family homes, and may take longer to sell. Still, no peak in the market is in sight. Townhouse lot sales, an indication of future construction, were up nearly 7 percent in the third quarter.
Standard Pacific Homes sold out its 250-unit Alexander Place townhouse development on U.S. 70 West in May, and has closed on another 300 in Glenwood North, a 76-acre development near Millbrook Road, where 550 units are planned.
“We could have sold more” but building lots weren’t ready for construction, said division president Keith Wood. He’s now planning up to 500 more townhouses on 50 acres the company owns near Brier Creek.
Centex Homes, which sold 200 townhouses last year will sell 300 in 2007, said the company’s multifamily manager, Macon Foster.
Although buyers cover a broad range — from empty-nesters seeking to escape yard maintenance to investors looking for rental income — most are first-time buyers who otherwise couldn’t afford to live near the Triangle’s employment centers.
Because builders can fit many more townhouses on a tract of land than is possible in a subdivision of single-family homes, prices can be tens of thousands of dollars less.
The average new single-family home in Wake County cost $323,548 in the third quarter, the most recent period with statistics available. At Glenwood North, townhouses range from $180,000 to $250,000. Centex townhouses range from $130,000 models with 1,200 square feet to $340,000 for 2,500-square-foot models.
But risks are greater for buyers because townhouses have generally slower appreciation than single-family homes, brokers said. From 2000 to the third quarter of 2006, the average single-family home sales price in Wake County rose 5.7 percent annually, compared with an annual 3.7 percent increase for townhouses, according to data from Helm’s Market Opportunity Research Enterprises.
Competition from other units with similar floor plans and appearance helps keep appreciation down, brokers said.
“You’ve got to hold it longer to come out even,” said Shields Pittman, a broker with York Simpson Underwood in Raleigh. “They’re so close together, there’s not a lot of difference between one end of the building and the other. If you don’t like the first one, you won’t like the fifth one. You could put in gold-plated fixtures but not get your money out.”
At the same time, builders are forced to keep prices low to entice buyers from apartments, said Ed Willer, another York Simpson Underwood broker. That means prices of new units may not be significantly more than resales, he said.
Uncertainty over future profits didn’t deter Gina McGowan, a University of North Carolina graduate student who is buying a $175,000 townhouse in Glenwood North. She just wants to stop spending $600 in rent.
“Appreciation was a concern, but mostly I was interested in not throwing money away in rent,” she said. “I’m not in position to buy a single-family detached.”
But former Raleigh resident Anna Wenger said she’d think twice before buying another townhouse. In 2001, she paid $155,000 for a townhouse off Pinecrest Road. When she listed her house for sale two years later, there were no takers. The reason: The same builder was putting up more townhouses across the street, and those units were selling for exactly the same price she paid.
“I loved my place, but the only way I’d do it again is if … I could choose one somewhere more established, where they can’t build on top of things,” said Wenger, who married and moved to Cleveland.
It appears the whole Raleigh market is holding up well….so far. Probably not the right time to buy into the market there. However, if you find a good deal and plan on staying there a long time, and it is equivalent to rental costs….you might do something.
I was surprised to see the stats, showing median ASKING prices up about 20% from 9 months ago. However, the rate of appreciation in ASKING prices is slowing… go here to see:
http://www.housingtracker.net/askingprices/NorthCarolina/Raleigh-Cary/
It makes sense that as most of the country declines, at least a few markets will hold up. Equity refugees can push up some isolated dots, while the overpriced areas fall.
I would never live in Raleigh because of the Duke 3 case. That city should be burnt to the ground.
Is Raleigh as bad as Durham?
A good rule of thumb in life is to never live as a minority in your immediate surroundings.
Nifong’s pandering to unintelligent Black voters is the direct cause of this crime. Remember what Lincoln (and countless others) said.
Housing Collapse? Bring It On!, in the Economist’s Voice, which is like a magazine for economists (you have to provide an email address to get the article). The author, an economist, explains why a crash in housing prices could actually benefit a lot of homeowners.
Go Bears!
Stucco, did you go to Cal?
Si (and the writer of the article linked in above is a prof in econ and law)
Fixer-upper available in France. Old owner not hanging around.
http://tinyurl.com/yy6er3
Love how they think the former owner’s history will bring a 100% price mark up. If the “flip” of the Scott & Laci Peterson house is any indication of the success of a morbid mark up, I’d say the frog estate agents are in for a disappointment.
Take this for what it is worth in regards to the state of the economy. I received an e-mail this morning from a cousin asking if it is ok if she visits for a few days. She will be vacationing in the Phoenix area for 10 days and staying with various relatives.
It turns out that the Connecticut Kohl’s store where she works basically furloughed its sales clerks for a week. Actually, management posted that for one week, the maximum hours any would get to work would be 10. When the going gets tough, the non primary breadwinner goes on vacation to the Southwest. Having never worked in a retail store, I have no idea how common such a severe cutting of hours is, but it would not be so great for someone who depended on this job.
Russ — thanks for the anecdote. Interesting, and fills in another piece of the puzzle.
My Dream home is for sale:
http://bakersfieldbubble.blogspot.com
Wikipedia isn’t too kind to the area — makes it look like a high-priced version of Bithlo, here in Central Florida. However, having seen the unbelievable cheap crap that sells for over $500K in Scripps, I’d estimate that this place would be a good deal at $1.5.
RE Investment wisdom from Jeff over at SDCIA:
My advice to others. Buy houses for very little money down, sell them when they go up a lot. If they don’t go up a lot then don’t buy them.
http://tinyurl.com/y3bxy4
What does SDCIA stand for again? Oh yeah — Stupid Delusional California Investors Anonymous.
I have only ever read comments on SDCIA that are linked to this site. 90% of the time, that douchebag Jeff is the star idiot of the thread. He must be related to that cretin in Seattle that documents his foolish real estate “investment” decisions…