Bits Bucket And Craigslist Finds For April 15, 2007
Please post off-topic ideas, links and Craigslist finds here.
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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Name:Ben Jones
Location:Northern Arizona, United States
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“Sunday, bloody Sunday” featuring Georg W. Bush
http://immobilienblasen.blogspot.com/
have a nice sunday
Smoke ‘em if you got ‘em
http://tinyurl.com/2wfddy
http://tinyurl.com/2mkqbr
http://tinyurl.com/35zx6c
http://tinyurl.com/2jaczf
http://tinyurl.com/2ms32j
http://tinyurl.com/3crnvc
http://tinyurl.com/2lhapy
http://tinyurl.com/2w4fad
http://tinyurl.com/35anfk
I had to stop after 10 minutes. Too many to manage. Ben, I’m very impressed with your editorial skills.
Awesome post.
How far will they go….?
Sorry about the 2 links to firehouse dot com. They are old stories. I compiled from google news search and both of those floated to the top as recently updated.
Dang, it’s hard to be really fast and accurate. Ben, I’d love to know your research approach.
Muggy, you mentioned the debacle yet to come in foreign real estate the other day. I would love to hear the blogs thoughts on Costa Rica, Panama, Nicaragua, Mexico, etc. I have been interested in these markets but they seem to be fueled by gringo purchasers. When will it be safe to play in these markets?
Muggy, that’s pretty wild. All these house fires:
1) At night or early morning.
2) Vacant.
3) All ruled arson or suspicious of arson.
Note: the two from cms.firehouse.com, are years out of date. The rest are current, within the last month or so.
Is there any way to determine if the rate of occurrence of these vacant house fires is on the increase?
Why would a FB burn down their investment? Won’t the insurance co require them to rebuild it? Or do they just get to keep the cash?
I think they use the insurance money to pay off the mortgage, then just sell the land. A lot of people did this after Hurricane Andrew. Our car was damaged in the storm. A USAA rep determined it would cost about $2,000 to fix and gave us a check for that amount and that was that.
Looks like “Tony the Torch” has seen an uptick in business of late…
SubKommander Dred
The i.e. has been a major disappointment to me, and as I got to pick first in the rotiserie league, I only have myself to blame…
It’d be like getting L.T. next year and having him do nothing the first 4 games.
But the season is young~
Forget about debtors prison for these FBs. They’re going to the real jail.
can we get an arson quote for march ? bet it s way over trend
Thought I’d do some correlation analysis on arson vs. median home prices to investigate the hypothesis that declining prices would be related to the number arsons. I hypothesized that, in line with the original poster’s anecdotes, there would be more arson during the only time in California since 1970 when median home prices were declining (1992 to 1996).
Data:
Data came from several sources. California’s attorney general yearly crime publication provided the number of single occupancy residence arsons from 1991 to 2005. California Association of Realtors provided median home price data from 1991 to 2005. The California Department of Finance provided data for estimated population from 1991 to 2005. Although it would have been superior to normalize the number of arsons by the number of single occupancy residences, it was not readily available. Total population was used as a proxy.
Method:
A simple correlation on the normalized arsons and the median home prices will illustrate their basic relationship. An ordinary least squares regression of median prices on normalized arsons will provide a basic statistic about home much they are related.
Results:
The correlation between the number of SFR arsons (normalized by population) and the median home price is -0.82. Evidently these are strongly related.
A regression of the normalized number of arsons against the median home price reveals that every decline of $10,000 in median home prices is associated with 1.1 additional arson per million people, or an effect size of sigma = 0.07. The result is statistically significant at the alpha
…less than 0.000 level.
Limitations:
I note two limitations. First, the attorney general unfortunately does not have publications online before 1991, limiting the analysis to 1991 onward. However, the correlation was statistically significant even with the limited amount of data available. Second, while total population was convenient as the normalizing factor, results might shift dramatically if the underlying average family size or the average living arrangements (e.g., probability a family lives in a single occupancy residence vs. multi-family) changed from 1991 to 2005. These assumptions were not explored.
Conclusion:
Arson appears to increase during times of falling home prices, presumably due to insurance fraud.
Appendix:
Here is the raw data, comma delimited:
year,arson,population,median
1991,2279,30459,200660
1992,2295,30987,197030
1993,2229,31314,188240
1994,2195,31524,185010
1995,2039,31712,178160
1996,2012,31963,177270
1997,1867,32453,186490
1998,1717,32863,200100
1999,1696,33419,217510
2000,1700,34099,241350
2001,1654,34784,262350
2002,1401,35393,316130
2003,1315,35990,371520
2004,1235,36522,450990
2005,1310,36982,524020
The D.C. gang will be burning the midnight oil trying to come up with a fix, so that when stupid people do stupid things they will not have to suffer. As we know everyone is a winner there are no losers. Except the taxpayer of course.
http://money.cnn.com/2007/04/13/real_estate/subprimebailout_cost.moneymag/index.htm?postversion=2007041316
Now all we need is for someone to suggest paying for the bailout by rolling back the GWB tax cuts…
(* Dons flameproof suit *)
I’m from New York. I asked Senator Clinton why her buddy (Senator Schumer) wants to spend my tax money on bailing out rich banks.
I think it is fair to allow Senator Clinton time to figure out how to answer this question while on the presidential campaign trail.
“A spokesperson for Sen. Schumer says the senator is not suggesting the government should pay off borrowers’ loans in full. The spokesperson says Schumer believes a mixture of counseling and restructuring of the loans would bring down the costs of the program considerably. He says Schumer hasn’t finalized a plan, and that Schumer has said banks and lenders should foot part of the bill.”
In other words, Schumer was running his mouth long before he had any real clue about the situation. That counseling idea sure sounds like a winner. This is just another case of political grandstanding to cozy up to one’s base. Once Alt-A starts going belly up this thing will be $500 billion at a minimum. But don’t worry. No politician has done that research yet. They will be completely shocked when that development takes place.
According to Ken Heebner (CGM Funds), Alt-A and Subprime comprise $2.5 Trillion in outstanding mortgages.
mms://media2.bloomberg.com/cache/vvefEajX3Khs.asf
Can you post that article in full? Thanks, I totally respect what Heebner has to say but I can’t seem to follow this link.
I saw the 2.5T number also (out of 10T total). Keep in mind that there’s still some residual value in those 2.5T’s worth of homes (i.e., forclosure sales), even if they all default. My estimate, after backing out all costs, neg-am, missed payments, and of course, diving property values is maybe $1.25 to $1.5T.
So we’re some $1.0T short here. This is real money, not the 100-200M that Schumer plays with, or even the $150B that’s being kicked around now. This will bite.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aonDdgoWQ.pg&refer=worldwide
From the article:
“Subprime loans, made to borrowers with a history of missed payments or untested credit, and “Alt-A” loans, which require little or no documentation, account for about $2.5 trillion of the $10 trillion in outstanding mortgages, according to Moody’s Economy.com. As much as 40 percent of these loans may default, flooding the real estate market, Heebner said.”
Where I have a problem is figuring out how the other 60% will be paid back. Remember these were mostly 100% LTVs to people with little if any cash. If property values fall (as appears certain), that’s it for them - particularly with the resets. So I stick with my 1T number.
Sounds like my 9 or so calls to Shumer’s offices worked, LOL
I suppose the obvious answer is the ‘pass-through’ from the rich banks to the good Senator’s campaign contributions.
Well, Wall Street is in New York.
Make sure to watch the video on that page. She’s not really funny but I’m sure her story is not unique. Most of the people around us still do not realize that the only thing that drove prices up was easy money to people like her. They just can’t believe prices will drop because they don’t understand, most likely don’t want to understand, what built this beast in the first place.
“Too bad, Lending Tree, you should have done your research.”
Ha!
“When banks compete, all Hell runs loose.” — Home_a_Loan, 07
When banks compete to give FBs free money, you lose.
“It’s the biggest no-brainer in the history of mankind”
some financial cretin’s credo, on el lay talk radio.
He may have a point?
Lennox financial. Commericals used to crack me up, until I realized a year ago what the loan dudes were doing to everybody
I have an amazingly simple proposal for how to fix the subprime lending mess going forward:
Borrow a legislative model from the environmental policy arena, following the provisions of the Superfund law, or Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which states that any party which disposed of toxic waste at a particular dump, legally or not, could be sued by the government to finance the entire cost of the dump.
Similarly, a new Predatory Subprime Lending Compensation and Liability Act (PSLCLA) could be established as a system of strict, joint, and several liability for all the components of the subprime lending chain, from the Wall Street investment bank kingpins who funneled in the money, to the NAR which encouraged households to buy bigger homes than they could afford (”real estate always goes up”), to the (surviving) subprime lenders who offered the product, to the mortgage brokers who sold it. This would serve the dual purposes of charging the cleanup costs for toxic lending Superfund sites to the REIC constituents which created the mess, and also sheltering those who had nothing to do with creating the problem from unfairly bearing the costs.
Excellent idea. Need a simpler acronym than PSLCLA though (its only got one vowel). Restoration of Abusive Credit for Housing and Responsibility Act - ROACH Responsibility Act, or more simply the Roach Act.
Basically you’re saying that we should get the money back from those who made (i.e., stole) it. Makes sense.
One suggestion: Drop the “S” in your acronym. As we well know, it’s more than Subprime, it may even read Prime (the way it’s going now).
That idea was a sudden inspiration I had this morning. I am sure a better moniker than PSLCLA could be cooked up by Senators Dodd and Schumer if they gave the idea a little bit of thought.
This would give a whole new meaning to the term “Innocent landowner defense”.
I have good news to report to everyone. I believe the days of my wife and I being renters are over. My eyes were opened yesterday and my mind is now clear. We received a beautiful new brochure yesterday from the new condo development at 25 Broad Street. They can be seen at 25broad.com. The brochure proved to me that I have been wrong and that I have been “throwing my money away on rent”.
It was their rent vs. own comparison that really convinced me. They used $3,500 as the rental price comparison. They then showed me I could put $95,000 down (which I don’t have) on their typical $950,000 unit. I could take out my mortgage on $855,000 at 6.25% and make a monthly payment of $4,400+ per month. I found a mortgage calculator that showed me the payment would actually be $5,200+ per month. I’m sure their calculator was right. I’m just a dumb renter. Their tax and maintenance calculations were also very reasonable. We know those numbers never go up.
The deal maker was that magical interest deduction. That made everything good. Now all I have to do is go and put down my $95,000 (which I don’t have) and I will no longer be like you losers that are bitter renters. I am going to be part of the “ownership society”.
Of course there are so many options that maybe I’ll hold off. There was a commercial on the tube last night for condos in Williamsburg. Those are only $499,000 - $3.5 million. And my neighborhood has that new luxury Corcoran (little troll) development going up. Plus 59johnstreet looks like it isn’t selling out too quickly. Maybe I will just stay a renter. It’s been nice so far. Real estate will soon be about 3 things - “supply, supply, supply”. Well, back to watching the Northeaster that has already arrived. Take care everybody.
Well at least the HOA dues on those $975k units is only $485/mo. In southern Cal such kinds of new condos would pull 2-3 times as much in HOA.
Tell me something: how does the real estate tax on something near 1 million bones come out to $139/month? Am I missing something? I thought NY had a very high tax rate on properties.
NYCityBoy keep saving your money and keeping your expenses down. As your savings grows, begin to diversify it into different kinds of holdings to protect against currency risks. You’ll have a 20% down payment before you know it.
“Tell me something: how does the real estate tax on something near 1 million bones come out to $139/month? ”
That is the biggest mystery to me. That comes out to $1,668 per year of taxes on a $1 million property. That is 0.1% of the price of the condo. I’m not an NYC real estate expert. Maybe somebody else could weigh in on how that could be possible.
It obviously has a “tax abatement” in place….NYC waives the major portion of the taxes for 10 years for projects in “re-development” areas….It is prudent to select a place in the city that has this, but once the time is up you are in for a payment shock.
most of these savvy investors have no intention being the
“owner” when the tax abatemnet is up
i believe this is the final year in nyc for that perk so it will only add to the rush to the finish line for more units to come online this year.
built with only the finest materials and craftsmanship of course
“built with only the finest materials and craftsmanship of course”
I think you meant “crapsmanship”.
I wouldn’t buy one of these condos that comes from a converted office building if you put a gun to my head. We live in such a building. The work done is so shoddy. It’s fine for renting but I would be outraged if I owned this junk. They are renovated to look good for a few years but have serious problems after that.
Great sales pitch. I almost started looking around for my checkbook.
As far as property taxes, about the only thing in NYC that is relatively low, along with abatements of all kinds they’re not linked to schools, which comes out of another pot entirely. Property taxes just over the line in Westchester or Long Island are about triple what they might be on the NYC side. Of course, if a massive reassessment were to be done right now, I guess that benefit would be history.
Oh !!! only $139 a month on a $1 mil place ??? Ha! In Lake county Illinois (near Chicago) my $200K place is $6000/year = $500 a month. Assuming 3% property tax rate that would be 30,000 a year or $2500 a month! Oh their $4400/ month really goes to $5500 (with a real mortgage say 30 y fixed @ ~6%) + $2500/m tax + $500 HOA = (gulp) $8500 / m = $102,000 year. Old rule of thumb = Annual Salary $300K (typical upper 10% of the US population) (sarcasm off) A bargain !!! Oh sure … no longer a need to be a bitter renter
…”no longer a need to be a bitter renter”
Damn right. In fact, in Illinois, there’s been no need to be a bitter renter for several years now.
Living in Illinois can be done on the cheap…provided you don’t own real estate or buy anything at retail. In fact, it’s a great place to be if you’re a thrifty saver who rents.
If you buy real estate in Illinois, you’re just screwing yourself.
We’re more in the red than any other state in the country and yet our state income tax is a flat 3%. Guess who pays?
Illinois prop taxes are pretty high. On a $195k place I sold in the middle of the state, my taxes were $400 a month. When I moved to VA, the taxes on my new $250k place were $200/month.
Of course, you can’t find any decent places for $250k in NoVa these days — these prices are from the turn of the century.
You said “Turn Of The Century.” Don’t DO that!
That’s worse than calling someone Mister.
nycboy very informative post
maybe we can be neighbors?
as always great post i enjoy reading your views
have a great rainy sunday
a fellow bitter renter in nyc
Likewise — and for you NYC-ites — here is another reason for you to grab the popcorn and watch and wait - and be a happy renter:
I am hearing chatter among several long-time brownstone owners in Brooklyn that they are feeling like they have to sell now, if they want to maximize the profit on their homes. Many folks in NYC do consider their homes an investment — but not in a flipper sense - they are counting on selling and retiring to cheaper climes with the profits.
Now that the market is taking its first dips, they are getting antsy to sell. Get my drift? There are thousands of NYC homeowners who don’t intend to live here in retirement — they want to “cash out” — as the market drops they are going to put their houses on the market by the truckload. (Even more so after the NY Times started truth-telling about how much more it costs to own than rent here in NYC)
I believe the “cash outers’ ” desire to get out before they lose their nest egg may very well turn to desperation, and may be a huge driver of rising inventory and lowering prices here -if it hasn’t begun already.
This is some welcome news. I’ve been checking out brownstoner daily for hints of just this kind of thing, but so far, nuthin’.
What neighborhoods are these owners in?
It’s just starting I think - and be prepared for a bit of stickiness in the better nabes (i am hearing these tales from prospect heights-area owners) — but things are already dropping in bedstuy and edges of clinton hill-and very much so in bushwick, if you want to go out that far. Remember these guys want to max their profits — they are not under the gun of foreclosure, so they will hold out to some extent…if I had to predict the rush I’d say spring/summer 2008 or so.
Another thing I’ve yakked about — must be 2 years ago by now — is watch out where you buy in NYC in a down market — when things so south here, crime and arson go up. And some areas of the city have been devastated by subprime lending already — those areas can be bargains, but have a higher risk of blight.
Hi this is for NYC Joe - sorry if it’s a double post — the area I’m hearing talk is Prospect Heights — but it’s just the start of chatter - i think more expensive areas will be stickier — but I have seen prices dip in a big way already in bedstuy, edges of clinton hill and bushwick.
These cash-outers are not under the gun of foreclosure, and can wait theoretically a long time -but as I said, i think they could start to get desparate as prices dip more - depending on how much they are counting on their house as a nest egg. If I had to guess, i’d say the rush may be on in spring/summer 2008 - if the antsiness is just starting now.
I also have a caveat too — watch what area you buy in — there may be bargains, but there also may be blight - Crown heights has seen some arsons already — and there are a huge # of subprime foreclosures there and in bedstuy as well. The slowing econ and lack of homeowners in these areas can be a recipe for more crime, sad to say. But it has played out in the city several cycles before..
These people sound like future equity locusts who will help prop up values in places where they aren’t wanted.
Not so sure - I think the typical profile is someone looking to buy on the cheap in retirement and pocket the rest of the equity to live on.
The $4400 is Interest Only. You should read the fine print before signing up to something like that (just kidding).
Idle thought from Down Under.
Is the AMT debate going to get drowned out by the housing debate for the next year or two?
If so, all other things being equal, AMT will continue down the socioeconomic spectrum. At some point it will be raking in so much money that any wholesale revamp or repeal will be too ‘fiscally irresponsible’ to be permitted.
(* Disclosure: I would personally like to see something like the AMT introduced here in Australia. Before you flame, the tax laws here are very different to the US, and an AMT would stop some very widespread scams/inefficiencies. *)
Sorry not to answer, but herein lies the myth of the so-called GWB tax cut.
And herein lies the myth of the so-called homeowner’s deduction.
How can it be called a tax cut if my taxes are so much higher? How can it be called a homeowner’s deduction if I no longer am able to deduct my house interest payments?
In reality, taxes for the middle class have been raised, and as the AMT trickles down, the taxes continue to raise as deduction qualifications enjoyed by these ‘rich’ people disappear.
And the insidious rise in individual taxes even while we are being told that we have all these cuts is why the old rule of qualification for a mortgage balance of 3x income no longer applies. 2-1/2x income probably no longer applies, since more and more of that income goes to government, and less is available to me.
And some of that going to government will go to those
deadbeatsclients, and so house values will be artificially propped up.So those rich households earning 90k+ / year will have face the double whammy of having fewer dollars left after tax to save, and house values staying high.
Ronin, you definitely seem to know AMT far better than I do. Isn’t this another argument against the silly cliche “renting is throwing your money away”. The AMT has the ability to strip the interest deduction if you make too much money.
I did the “do you have to pay AMT?” form on the IRS website this year. I put in my information and it stated that I don’t have to. We have decent income and almost no deductions. We get raped by the IRS. It seems to me that we are pretty safe from AMT. Would you believe that to be true?
NYCB, The AMT affects people with many deductions. It sounds like your only federal deduction may be NY State tax. AMT will not affect you until you get below paying a 27% regular tax rate. If you had a big mortgage deduction, 4 exemptions for children, deducted NY state tax or total sales tax (whichever is larger), owned some rental properties with depriciation, received interest income from tax free bonds that were used for private purposes (arena’s, hospitals, etc.) then your regular tax bill might be whittled down to 15% of your gross. AMT would make you add all those deductions back and pay 27% of the new gross total to the feds.
There goes that raped word again. Really not appropriate here.
I think AMT was just a way to stealthily raise the tax base without saying so. Oh, silly us, we forgot to index it to inflation.
I guess it will never affect my wife and I. We have no deductions nor plan to have any. So, if I understand the AMT correctly, we’re probably safe irrespective of our income.
Yes, but will play close to the same as someone who is impacted by AMT due to many more deductions taken. That’s the whole point of AMT.
Should have said, “Incomes being equal the person with a lot of deductions will have them cut by the AMT and force them to pay more income taxes but the person not subject to the AMT will more than likely pay more income taxes due to no deductions at all.”
The point of the AMT is to get more tax dollars out of the guy paying less taxes than a comparable tax payer without any deductions.
Your laws must be downright medieval if you’d welcome AMT. At the moment, we’re safe from it because we rent in the city. We paid off our country bunker with lucre from the bubble in 2004. But if we take on another mortgage, we’re fooked, the accountant says!
BE CAREFUL JOE…………
If you have a Rent Stabilzed aprtment in NYC, you must live there 183 days a year to keep it….and landlord can install cameras, and even ask the doorman to “check you in” everyday….or to check on walking the dog….. And they can check all your ID to make sure you use the “cheap” apartment as your main residence….
Oh and they can get the Con ed bills to see if you are dumb enough not to leave the AC and lights on a timer.
Using $50 of electricy in June,July&August and ..is very suspicious.
OH I forgot The Con Ed meter is Not your private Property, The landlord can take pictures of the meter reading with the con ed guy reading it as proof of LOW usage, and of you not living there during the month.
In real estate and taxes, its Location, Location, Location.
To solve this, buy in a state with no 10% state and local income taxes, no huge runup in house prices to raise the property tax non-deduction, and all the other used-to-be-deductions that drive people on the coasts into the AMT zone.
Isn’t this such a blue state “problem” that it is a certainty to be tinkered with?
Many FB’s don’t have the unspent income to adjust their income via 401K any more either, to stay out of the AMT.
How about a thread for those who do not have Major problems with the house payments more like “how to do it right” ? Like NOT buying a new car, remodeling just because, putting in a fish pond, daily shopping trips (taking on more debt) and putting the money to better use, paying down the cards, putting extra on the principal of the house, saving for things. I know there are LOTS of lurkers that read here and what they see are all the bad things people are doing and have done. So how about a talk on what is a better way to handle money to Get Out of debt? I for one think my money is working for me rather than Me working hard and ending up with nothing. Examples from me are; I slowly have increased my savings by 1 or 2% over the past 7 years to now equal 15% of my gross pay, pay 500 a month more on my principal, used my tax refund to pay off all cards (that took a few years) and now take that money to the bank for 5% interest. A very smart man one said compound interest is the greatest thing ever invented and it’s true! I know any talk of this subject will not help everyone but if it saves a few from the abyss then hopefully the word will spread that there is a Right way to do things.
So what has the last 7 years got me? More cash than I have ever had, a mortgage that will be paid off 18 years early saving me 100’s of thousands in payments and good feeling that I can make though a rough spot if I have to WITHOUT taking on more debt! I don’t know anything more than this “if I am paying interest I am throwing, burning, giving my money away”.
good for you fla to pa
you are in a select class
this country is a debt ridden society
the last few years i have also increased my
401k to 12% of net (my co adds 5% match on the 1st 10%)
so being the dumb renter i am i save 17% of my net salary
i also have used the last few years to save cash as well
and when i feel it is time i will buy a home the right way
i put that cash to work in a tax exempt mm fund earning a solid 4% return or better (just a bad habit i cannot seem to kick)
my co-worker said this week how do you get an emergency fund of 6-8 months of living expenses?
i said do not eat out 6 nights a week and stay at the pubs drinking everyday after work at $10 or better a beer would be start
but hey i am just a dumb bitter renter so what the hell do i know?
We should conduct a poll.
How many people have co-workers that are fully vested in their 401k plans but still do not contribute enought to get the full company match?
I would put the number at 60% where I work.
It’s the stupidest thing I hear. “It’s not easy to save money,” they all say yet the pi$$ money away on everything imaginable that they don’t need.
Save over 50% of gross here. I teach high school, and wife makes less. Saving ain’t hard. Only real vice is that we bought two new cars in 04. Of course, they were under 13k each. Paid off one early, and the other’s interest is 4.25 (why pay early when my CDs get 5.15?).
No “company” match for my 403b, but I do shuffle 10% in anyway. Wife’s 401k is matched to 4%, so that’s what we do.
Saving ain’t hard - it’s darn near an addiction for us.
About the car loan - you can’t move money out of the 5.25% CD every month to pay off the car loan. You have to take the money out of an account that lets you withdraw money with no penalty.
Most money markets with high minimums have only like 3-some percent interest. So, if the money you’re paying off the 4.15% loan with, is coming out of a 3.5% account, you are losing money on the loan.
Is there a problem with my logic?
We Rent:
Well, you still have to pay income tax on your CD interest, so the effective interest rate is probably lower than the rate you’re paying on your car.
Neuromance:
You can easily get an online savings account paying out more than 5% interest. Try http://www.emigrantdirect.com or http://www.countrywide.com.
-Big V
Uncle Sam Wants You … to Go Shopping”: A Consumer Society Responds to National Crisis, 1957-2001 Robert H. Zieger _________________________________________________________________ On October 4, 1957, the Soviet Union launched the first earth satellite, dubbed “Sputnik,” and thereby aroused both an immediate panic and a longer-range reassessment of America’s character, goals, and purposes, both reminiscent of and intriguingly different from the country’s reaction to the assaults on the World Trade Center and the Pentagon. Comparing and contrasting American public discourse about these two national crises reveals much about the shifting role of consumerism in American life. In the late 1950s and early 1960s, public spokespersons pointed accusing fingers at their countrymen’s allegedly sybaritic life-styles and hunger for ever more consumer goods, contrasting America’s satiated plenitude with the discipline and rigour that made possible the stunning scientific, educational, and diplomatic achievements of their Russian and Chinese rivals.
“after September 11 shopping became a patriotic duty”
Not Buying It: My Year Without Shopping
by Judith Levine
http://www.powells.com/biblio?isbn=9780743269360
————————————————————-
“Within 24 hours of the Sept. 11, 2001, attacks on the World Trade Center, Mayor Rudolph Giuliani had this advice for his fellow New Yorkers: ‘Show you’re not afraid. Go to restaurants. Go shopping.’ As to how people elsewhere could help? ‘Come here and spend money.’
However bizarre this response to terrorism may have been, Giuliani was scarcely alone. The Bush administration came out in…” Washington Post Book Review (read the entire Washington Post review) force to urge that Americans continue what Vice President Cheney called ‘their normal level of economic activity’ — i.e., make tracks for Wal-Mart or, if you were a New Yorker, for Bloomie’s. As Judith Levine accurately if acerbically puts it in ‘Not Buying It’: ‘It was impossible to remember a time when shopping was so explicitly tied to our fate as a nation. … Consumer choice is democracy. A dollar spent is a vote for the American way of life. Long a perk and a pleasure of life in the U.S. of A., after September 11 shopping became a patriotic duty. Buy that flat-screen TV, our leaders commanded, or the terrorists will have won.’
DEAN CALBREATH
Real estate cheerleader concedes price drop
April 15, 2007
Satan must be shoveling snow out of his driveway, because the underworld has frozen over. By that I mean that the National Association of Realtors has finally conceded that home prices are falling nationwide.
Last week, the association – the top real estate booster in the country after Donald Trump – forecast that the median home price would slide 0.7 percent this year.
David Lereah, the association’s chief economist, predicted that home prices will rebound next year, with a 1.6 percent rise. But after adjusting for inflation, that will mark the third straight year of declines for real estate. (Last year’s 1 percent rise in nationwide home prices was negated by the 3.2 percent inflation rate. The median dropped 0.8 percent in San Diego County, even without adjusting for inflation.)
…
“We’re already seeing some parts of the real estate market picking up again,” Lereah told Fortune magazine. “It looks like we’ve bottomed out. . . . When it’s all said and done, this contraction in housing is probably going to be the least severe contraction we’ve ever had, which is going to surprise a lot of people.”
Editorial remark:
leastmosthttp://www.signonsandiego.com/uniontrib/20070415/news_1b15dean.html
Stucco, last night was really cool. We were watching “Flip this House” on HGTV. There was the word “Updated” next to the show’s title. There was a woman in California that bought this POS broken down L.A. property. We came in a few minutes late. I told the wife, “I bet she still paid $500,000 for that junk.” She actually paid $730,000. You Californians make these New Yorkers look somewhat sane.
She put $80,000 into the house. The oh-so-cool real estate professional came in with her sunglasses on and gave out pearls of wisdom. She said, “you need to have a faceplate for the electrical outlets”. Wow, I can see why they get their 6%. She then said, “price it at $899,000″. There were dollar signs in the flipper’s eyes. The flipper didn’t seem like a bad person so I wasn’t rooting against her as hard as I usually do.
The funniest moment of the show was when they talked about the house’s stucco exterior. They discussed the components of stucco and the fact that you have to let it dry. She “got stucco” after all.
Fast forward one year. The flipper talked about how the market had turned. They priced at $899,000. One month later they dropped to $869,000. One month later they dropped to $849,000. They then took it off the market and moved in. They weren’t going to “take less than we had put into the house”. They now own a house that they probably have $830,000 in a house that to me looked like a $250,000 house, tops. California is so screwed. It’s nice to see HGTV getting on board with the “bubble bursting” crowd.
“You Californians make these New Yorkers look somewhat sane.”
A wise man once explained this to me very well: “They tilted the country and all the nuts rolled from NY to California.”
A more scientific view is put forward by Richard Florida who describes what is happening as The Great Sort. His explanations match my experience well. As a new tech grad fresh out of CMU I tried to make things work in Pittsburgh, a town rich in historic treasures. It was impossible to function in that stagnating environment, so I fled to the San Francisco Bay Area where I have been successful contributing to many new technologies and plan to continue with that as long as I can.
Many places across America that say they want development and innovation are in fact cultural backwaters that exhibit great hostility toward the kind of people most associated with moving society forward.
Being a weirdo in Pittsburgh was like being one of the living dead. I was actually living out a Romero horror flick! Yuck! Being a weirdo in California is, oddly enough, quite ordinary. The same people who would be successful at squelching in other places have mostly given up around here.
You say the nuts rolled, and I say that you are driving out your best and brightest and even in the current situation new recruits arrive by the bus and plane load every day.
“I say that you are driving out your best and brightest and even in the current situation new recruits arrive by the bus and plane load every day.”
And can’t wait to pay 10 times their income for a house. Is that really the best and brightest?
Isn’t more money than sense usually the way of things at the highest altitudes? The point is that these people did their stuff and ended up with millions to squander, which they then did. Is that better than being a modest school teacher or just different? The percentage of the population in California that fled places elsewhere is high but the percentage of recent buyers is small.
>>The percentage of the population in California that fled places elsewhere is high
Weird, my post was clipped.
Anyway, I was saying that these days most of the places that people are fleeing to live in California have names like Oaxaca and Jalisco.
i like the west coast to visit and have done so many times
but i have seen 800k or better pos homes in the barrio
even in ny you can buy a ghetto area home for 350k within
15 miles of manhattan
One NUT was stuck in a “NYC golden hole” his name:
Donnie “pucker-my-lips” Trump
‘They then took it off the market and moved in. They weren’t going to “take less than we had put into the house”. They now own a house that they probably have $830,000 in a house that to me looked like a $250,000 house, tops.’
This is the point when they “got stucco” in the sense Groucho Marx intended.
Flip this House blows. They usually just end by calculating projected profits after some realtor idiots come in and suggest listing prices for the home. Property Ladder on the other hand at least follows the story for a couple of months after completion, to give you an idea how things turned out.
My favorite PL episode was about clownhead Nancy Arroyo-Perez in Casselberry, FL. She sank way too much money into a place, got free labor from her dad and husband, pissed them both off by yelling at them while they did all the rehab work…
And when it came time to sell, she spent 4 weeks trying to sell it WAAAAY above market value. When she got no offers, she decided to rent it. Most ridiculous thing I’ve ever seen.
Turns out though, Nancy (a Realtor(tm), mind you) was tricky dicky, as she managed to sell it to the bank, via a cash-back refi. Check here:
http://www.nymoves2orlando.com
That Property Ladder episode is a nice intro in case you are interested in buying that property from the bank in a year or so.
I will watch for that episode. I have a problem with these shows. We all know the level of financial thought in this country is strikingly low, and many, many idiots watch these shows and think…”well, I can do that.”
The people watching these shows need to see some people giving the keys to their “remodel” back to the bank…
My absolute favourite is “Million Dollar Listings” on Bravo - omfg - the amount of ‘entitlement’ going on. Basically, it covers two real estate offices in Hollywood and Malibu, the agents and their ongoing battle to get sellers to price thier houses properly..
…anyway, because I have part of Malibu in my ZipRealty search, I come across one of the most memorable palces on the show.
Scotty Brown, from Malibu Coldwell Banker, made the fatal mistake of mentioning an on-the-fly number to the seller, who then dug her heels in and said she ‘wouldn’t consider a dollar under $2.6 million’ for it - based entirely on the dollar signs in her eyes and a passing comment by Mr Brown.
Potted history - she paid $1.1 million for it in 2004, did a bit of remodelling…then stuck to her guns for a 236% profit over her 1 year ownership - with predictable results.
here’s the ZipRealty URL - http://tinyurl.com/38gofa
Its been there for 678 days, had 6 price reductions - from a princely $2.6 million to a totally reasonable $2.175 million (not). Apparently, by reducing the price by $10K every month or so, she’s now ‘pricing it to sell’…
The thing that got me the most was her incredible sense of entitlement - yes, for putting in some granite countertops and holding on to the property for a year she richly deserved an annual profit of $1.6 million, and anyone who said otherwise was a fool.
She truly was a piece of work - good luck with the sale, lady.
So many princesses…so little time.
Across the street from me in Santa Barbara, same deal. According to Zillow, MLS # 07-1127 sold 06/01/2006 for $1,250,000. No one has lived there since, so I assume this is a flip. Substantive renovations were done and the house is now on the market for $2,649,000. Very nice renovations (if you like the nautical style; I don’t!) but still. I’m not convinced they deserve to double the price in this market. Will be interesting to see if/when the price comes down…
I’m hoping the NAR is exposed to class action lawsuits in light of some of the points that Calbreath raises:
“There’s a place for optimism in the market. Even downright boosterism. But there’s also a gray area where a person slips from being a promoter to misleading the public. Recall the Wall Street analysts who promoted dot-com stocks in the late 1990s. When the dot-com bubble burst, some of those analysts ended up being fired, sued or – in the most egregious cases – thrown into jail. Not that that’s what I would recommend for the Realtors.
…
The Realtors’ optimism is a bit more dangerous than the critics’ pessimism.
Under the belief that home prices would keep going up, the Realtors spent the past several years clearing the way for more adjustable rate, zero-down or interest-only financing.
In 2004, the association successfully pressed Congress for the Zero Downpayment Act. And in 2005, the association helped push through a law to let lenders raise interest rates on adjustable loans by 2 percentage points within the first year they are issued, twice as high as the previous cap.
The changes wrought by the association helped stave off the decline in housing prices that some economists were predicting. The alternative mortgages became part of a new reality for real estate, just like the dot-com stocks were part of a “new economy.”
The alternative mortgages have since become a problem for subprime borrowers, who have low incomes or poor credit histories. With the adjustable rates going up, many subprime buyers are finding it hard to pay for their homes, leading to a spike in foreclosures and defaults.
In San Diego, default notices tripled over the past year – from 1,153 in the fourth quarter of 2005 to 3,150 during the same period in 2006 – according to DataQuick, a real estate research firm in La Jolla.
As with their belated recognition that home prices are coming down, the association is belatedly realizing just how risky alternative mortgages have been.
“Simply stated, a loan with the lowest monthly payment probably isn’t in your best interests – borrowers need to understand worst-case scenarios,” Lereah said last week. “If you’re in a mortgage you aren’t comfortable with, now is an excellent time to refinance, if you can, with historically low rates on safer conventional loans.”
Unfortunately, it is not an excellent time to refinance for many of the people who now have adjustable rate mortgages. In the wake of the housing bust, banks and mortgagers are raising their lending standards, meaning fewer people will qualify for loans or refinancing.
With the crackdown on lending and the continual rise in mortgage rates, foreclosures are on the rise, threatening to deepen the association’s predicted 0.7 percent price decline.
Nevertheless, Lereah sees a silver lining. “We still predict 2007 will be the fourth-highest year on record for existing home sales and housing is still a great long-term investment.”
housing is still a great long-term investment
Housing may be a reasonable long-term investment if the purchase price and carrying costs are low enough to be cheaper than renting a similar place.
Buying at 2004-2007 prices would be insane. After counting inflation, it’s doubtful whether prices will ever again reach the 2005 peak. An “investment” that loses money in real terms, even before carrying costs are considered, is no investment at all.
One of the best words of advice that I ever heard when doing long range planing on your investements, is that in the “long-term” we are all dead. I don’t want to wait 15 years to recoup for a poor decision on overpaying for a house.
I think this is going to be the big story in the next phase of the housing bust. The various sectors of the industry are going to turn on each other. Some insiders will break ranks. A lot of embarrassing (probably illegal) business activities will come to light. We will find out that executives were explicitly warned by their own staff (remember the Enron whistleblower) and yet pretended to not know the potential illegalities and consequences of what they were doing.
Oxymorinica…
——————————————————————————-
IMF: Mortgage collapse contained (!)
By The Associated Press
Tuesday, April 10, 2007 12:10 PM EDT
While the economic fallout related to dicey U.S. mortgages has raised some risks, it is not likely to derail stability in global financial markets, the International Monetary Fund said Tuesday.
The assessment was contained in a wide-ranging report that explored the current worldwide financial landscape.
“The subprime segment has deteriorated a bit more rapidly than had been expected at this point in a housing downturn,” the IMF report said. “The fallout has so far been limited to a small number of lenders, but could yet spread to the structured credit markets.”
http://www.libn.com/breakingNews.htm?articleID=7432
“a bit more rapidly”
“a bit”? Exactly how much is that?
It sounds a lot like when you tell your spouse that you had at all like “a couple” of beers at the game.
Ahh..The stiff British upper lip. They have the grace to act civilized while their empire crumbles around them….now let’s see how the Americans behave with their turn in the sun.
Reminds me of the Monty Pythod skit where the Brit soldiers had been bit off by a tiger, had claimed he thought it was a nasty mesquito bite
leg
Today’s SD Union Tribune Homes section has a special feature:
THE CRISIS IN MORTGAGE LENDING
An unsettling adjustment
Facing a big jump in payments, couple feels trapped
By Lori Weisberg
STAFF WRITER
Maria and Oscar are hardly extravagant spenders. They share one car, have no credit-card debt and have yet to miss a mortgage payment on the Chula Vista home they’ve owned for nearly three years.
That all could change.
Now feeling trapped in a depreciating real estate market, many of these frightened homeowners are hoping to stave off foreclosure by taking whatever steps they can to remain financially stable.
http://www.signonsandiego.com/uniontrib/20070415/news_lz1h15mortgag.html
Funny the SD Union Tribune writers don’t seem to ever notice all the vacant homes around San Diego…
——————————————————————————
Ohio: ground zero for foreclosures
Cleveland suburbs try to ease impact of empty
By Erik Eckholm
NEW YORK TIMES NEWS SERVICE
April 15, 2007
SHAKER HEIGHTS, Ohio – In a sign of the spreading economic fallout of mortgage foreclosures, several suburbs of Cleveland, one of the nation’s hardest-hit cities, are spending millions of dollars to maintain vacant houses as they try to contain blight and real-estate panic.
In suburbs like this one, officials are installing alarms, fixing broken windows and mowing lawns at the vacant houses in hopes of preventing a snowball effect, in which surrounding property values suffer and worried neighbors move away. The officials are also working with financially troubled homeowners to renegotiate debts or, when eviction is unavoidable, to find apartments.
“It’s a tragedy and it’s just beginning,” Mayor Judith H. Rawson of Shaker Heights, a mostly affluent suburb, said of the evictions and vacancies, a problem fueled by a rapid increase in high-interest subprime loans.
http://www.signonsandiego.com/uniontrib/20070415/news_lz1h15ohio.html
How can this be? Everyone knows there was no bubble in flyover country.
Rest assured that entry level houses in flyover country start in the 100K range. The problem in flyover land is that people making $8/hr bought those places with liar loans.
Borrowers are caught in backlash over loan defaults
By Emmet Pierce
STAFF WRITER
April 15, 2007
Critics say the tough new underwriting standards that were imposed to prop up the sagging subprime mortgage market are harming some creditworthy borrowers by trapping them in high-cost loans.
…
Mary Otero Gonzalez, executive director of the San Diego Home Loan Counseling and Education Center, said tighter underwriting standards are a good thing.
“It’s healthy to be a competitive lender and to be creative,” she said. “What is unhealthy is when they are not taking into consideration the person’s lifestyle, their background, their earning capacity, whether they are going to be able to make the mortgage and be able to afford the expenses to live.”
http://www.signonsandiego.com/uniontrib/20070415/news_1h15loans.html
The Emmet Pierce article makes me want to punch somebody. “Underserved” is a word that should be stricken from the English language. What a bunch of politically correct bull$hit that word is. These people should not get loans. Lend them your own money, you stupid ——.
“Underserved”
Try “overserved,” as in served loans in sizes that could never possibly be repaid?
Send him an email. Link at bottom
The subprime lending industry destroyed its customer base. As a result, it’s out of business.
This is the very reason that you never obtain a loan with the idea that you will refiance it it a couple of years . Nobody told the FB’s that lending is subject to the market and available funds .If you can’t live with a loan long term don’t get it .
The lenders that qualified based on “teaser rates ” were not considering a tight money market or a down turn market which is just plain foolish .
P.S. My natural suspicion is that the SD Union Tribune is trying to help create political support for a Congressional bailout of the REIC. We will know when there is really a lending crisis, because it will be accompanied by a return of affordable housing prices.
At least they have their heads screwed on properly regarding this, “The stress of facing the loss of what they had hoped would be their dream home has tested their marriage and forced them to postpone plans of starting a family, said Maria.”
” Like other buyers who used risky financing to purchase their homes while banking on rapid real-estate appreciation,”
That was a fantastic article. The victimization talk was minimal. They came as close to blaming the FBs as I have seen. All of the “Bailout Gang” should read these articles. There won’t be much sympathy for these people from the public.
The subprime lending industry totally and foolishly destroyed its customer base. As a result, they are out of business.
Nice comment at the end of this article…
“If we could do it all again, we wouldn’t do it. The American dream is not really the American dream. It’s more like an American nightmare.
“All of a sudden, that small apartment we lived in doesn’t seem so bad.”
“All of a sudden, that small apartment we lived in doesn’t seem so bad.”
i will second that one
so glad i sat out this mania
““All of a sudden, that small apartment we lived in doesn’t seem so bad.”
i will second that one
so glad i sat out this mania ”
So true. One doesn’t require a crapload of square footage to live comfortable and happy.
The bottom line IMO is many people are looking to the external as an answer to their search for psychological balance.
I call it “spooky, acute, media-driven ADHD consumerism.” So many folks think that next “thing”–whether it be the big new stucco-box (and the perceived equity $$$ from it), SUV, flat-screen tv, or whatever, is going to smooth everything out. “Then I’ll be happy!” Yes, for about a few minutes, few days, or a little longer…then it’s on to the next “thing.”
Sad, but true. They don’t want to hear that pursuing inner peace, is done through hard intro-spection, self-awareness and right action. Then, if prudently purchased material items are acquired after the aforementioned–without going deep in debt, that’s healthy. But, “Screw that” they say, as they whisk off to COSTCO.
DOC
The cover of this month’s Dwell Magazine is “Smaller is Better: Homes Under 1,000 square Feet”
http://www.tumbleweedhouses.com/houses.htm
and if it has wheels….
http://www.tumbleweedhouses.com/houses.htm
She works for a credit union. She should have known better. No mercy. Another foreclosure…
Article in the Fort Worth Startelgram this morning about possible foreclosure auction fraud.
http://www.star-telegram.com/223/story/69165.html
Got a pop up that I could not close with that link
Sorry about that. I don’t get a pop up on that page ( I did on the main Startelgram page but it eventually went away). The article is related to one in the physical paper that seems to indicate that properties that go to action are being sold in sweetheart deals outside the auction for pennies on the dollar.
Finally, the Washington Post will be providing weekly updates to the local housing market as opposed to yearly.
I got a personal note from a real estate agent yesterday about specific mortgage/foreclosure fraud. Does Paladin have time to finish his fraud-reporting project? Maybe the FBI thinks its procedures are adequate.
http://novabubblefallout.blogspot.com/
nothing like a noreastrer hitting the tri-state area today to get those
crowds out for all the open house bargains today.
i can see david liar’s comment for a sluggish april coming in a few weeks.
first Vonnegut, now Ho…
I’ve had the opportunity to watch many tiny investment bubbles burst and the human part of the equation is much the same and it never varies…
Here it is:
More demand than supply? Can’t get enough.
More supply than demand? Couldn’t be interested.
Don Ho was no ho in my book…
Not so Tiny Bubbles
Somewhere in the print, oh so fine
Make me happy
Makes me heloc, all the time
Not so Tiny Bubbles
Make me warn, all over
With a feeling that i’m gonna
Owe on this house til the end of time
So here’s to the golden goose
And here’s to Glengary Glen Ross, by the sea
And mostly here’s a toast to you and me…
From the NY Times;
[1]But unfortunately, not all New Yorkers can contribute to this high end of the real estate market. A study released last week by New York University’s Furman Center for Real Estate and Urban Policy found that at recent sale prices, almost all apartments in Manhattan and most apartments across the city are beyond the means of typical New York households.
The study estimated that fewer than 5 percent of New York City homes sold in 2005 were affordable to New Yorkers earning the city’s median household income ($43,000 in 2005), down from 11 percent in 2000.
In Manhattan, only 2.1 percent of all apartments sold were affordable to such households and 4.6 percent affordable to households earning 160 percent of the median income, or $64,500 in 2005. This number was down from 10.1 percent in 2000. [/i]
So how do prices stay at these astronomical highs if less than 5% of the people living here can afford it.
Oh, I forgot, NY real estate never loses value.
From the Boston Globe (print - couldn’t find online):
MARKET SIGNS SUGGEST WORST IS OVER. SALES GAINING STEAM.
Kimberly Blanton
“What kind of shape will the MA housing market be in this year? It depends.
“If you’re selling a home, it’s not great, but it’s not awful either. Expect a still slowish market for a time, though not as dreadful as 2006, which posted the fewest home sales in a decade, and a nearly 6% drop in prices. Don’t expect prices to bounce back much this year, though one silver lining is they probably won’t fall anymore, either.
“But if you’re shopping for a house, 2007 looks pretty good - so far. You have many houses to choose from, and the upper hand in negotiations. One risk: other buyers are also more active, so moving too slowly may mean missing out on good opportunities.
“For buyers, don’t get too comfortable. For one thing, the pace of sales is picking up: Home sales for the first 2 months of 2007 were 3.4% higher than the same time last year, according to Warren Group, a real estate data and publishing firm.
“He (Timothy Warren, chief executive) predicted prices will trend higher by midyear, but it will not necessarily be a steady increase.
“Even that would be a reversal from the start of the year. The median home price for a single family home in MA was $299,395 for the quarter that ended March 30, 5.7% lower than a year earlier……”
They said that was because the excess supply was going to dissipate. Hmmmmm……..
1. Are they using Ouiji boards to predict this amazing trend reversal?
2. If a realtor falls during an open house, and there is no one around to hear it, does it still make a sound?
(Tell me something: how does the real estate tax on something near 1 million bones come out to $139/month? Am I missing something? I thought NY had a very high tax rate on properties.)
It’s called the 421a program, which expires at the end of this year and is unlikely to continue to apply in most of Manhattan. There are NO property taxes for years and years. But after say, 10 years or so, you want to sell as the benefit begins to expire, WHAMMO. Of course, they mention that in the sales brochure, right?
There are 59,119 homes for sale in Phoenix, AZ as of 8 minutes ago!! According to ziprealty. Unreal!
Phoenix is going to be devastated.
YOY for individual towns in Onondaga county was interesting this am: # of sales 2007- April vs 2006 same
Manlius 103%
Lysander 93% (Baldwinsville)
Onondaga (town of) 155%
Syracuse S. 123%
Syracuse N. 115%
Syracuse E. 113%
Syracuse W. 83%
Camillus 71%
Cicero 81%
Madison County 87%
Oswego County 86%
Cortland County 96%
For those that don’t know CNY, the areas of/near Syracuse or more developed town centers are what’s holding up. Outlying areas are seeing reduced sales.
i sent ben some images but the upload did not work. i have some to share with hbbs but now sure how to. the photos are of empty mcmansion neighborhoods in carlsbad, ca. these homes start at 900,000. they are gorgeous homes. built by lennar, pulte, hov, shea homes and with fancy names like: pavona, aldea, aviara, bressi, greenhaven, san vincenzo, dolcetto, missina, fiori, and la costa ridge.
i feel funny taking pictures inside exclusive neighborhoods. i asked ben for a press pass. i also told him the “check” is in the mail. and how do i share my mcmansion pics?
Maybe this Carlsbad neighborhood could become a tourist attraction. “Come see it! Insta-Ghosttown!”
Gee, what will developers think of next?!
it is like being on the set at paramount. fake streets with perfect facades. blue sky, ocean breeze, empty houses that don’t wake up at night.
“and how do i share my mcmansion pics?”
You could try uploading them to sites like Flickr or Smugmug and posting a link for now.
“i feel funny taking pictures inside exclusive neighborhoods.”
I used to, but with all the absentee homeowners in many of these places, who’s around to care?
thank you sd_suntaxed.
http://news.independent.co.uk/environment/wildlife/article2449968.ece
Maybe Ned Ludd was onto something?
http://en.wikipedia.org/wiki/Luddite
Foreclosure article finally hits the Virginia Pilot (Norfolk / Virginia Beach / Hampton Roads / Homicide Roads) :
http://content.hamptonroads.com/story.cfm?story=122892&ran=200395
“Creative mortgages contribute to rise in region’s foreclosures”
im investing in a better digital with better zoom for sharper views.
during the week, the construction trucks going past my humble rental make so much noise i decided to follow them up the hills. i knew what was there but i’m waiting for them to run out of money and stop building, so now i spy on them and take photos of the views before the natural beauty is owned by the brand new ceo’s
Here’re some beauties from my neck of the woods
MLS ID#: M1113826 ($165K for a storage building)
MLS ID#: N248677 ($220K for a nice dog house)
Before I go out fishing on this wonderful day:
A few notes from China:
re: Africa
“Clearly we all have a lot to learn from China,” Liberian finance minister Antoinette Sayeh said at a news conference in Washington on Saturday. “China has made more progress than anywhere in the past few decades in combating poverty.”
African nations are embracing China with open arms, and international lenders like the World Bank are talking with the Chinese about working together there.
“Ghana, Uganda, Mozambique, Tanzania — these are countries that have pretty good economic management and in those, the World Bank is interested in working with Chinese partners,” David Dollar, World Bank China country director said.
Dollar said the World Bank was interested in working with the Export-Import Bank of China in some African countries to help finance infrastructure projects like the construction of roads and power plants….Africa’s relative openness to Chinese investment contrasts with a wary attitude in the United States, which relies heavily on China to finance its large trade deficits but has so far shown resistance to Chinese attempts to buy US companies.
In 2005, CNOOC was forced to withdraw a US$18.5 billion takeover bid for US energy firm Unocal Corp., due to heavy opposition from lawmakers who accused the deal could threaten US national security and violate rules of fair trade.”
RE: Trade protectionism
Hu Xiaolian, deputy governor of the People’s Bank of China, said…
“With trade protectionism pressures growing, measures taken by certain countries –under the pretext of righting global imbalances — will hinder the trade liberalization process,” …at the spring meetings of the IMF and the World Bank.
“We call on all countries to harness the opportunities created by globalization, pursue timely structural readjustments, resolutely oppose protectionism, promote progress in the Doha Round,” she said.
Hu, who attended the meetings on behalf of Zhou Xiaochuan, governor of China’s central bank, also welcomed the IMF’s efforts to strengthen surveillance in safeguarding global financial stability and promoting the economic prosperity of its members.
“We have noted the efforts to strengthen Fund surveillance since the Singapore Meetings, including through possible revision of the 1977 Decision on Surveillance over Exchange Rate Policies,” she said.
“In this regard, we wish to emphasize that, first, revision of the Decision should not proceed too hastily,” she said. “In making adequate and careful analysis, the Fund must take the opinions of all concerned parties into account and build broad consensus among all member countries to ensure that it would benefit them all.”
“Biased advice would damage the Fund’s role in safeguarding global economic and financial stability,” she said, while emphasizing that the focus of surveillance should be consistent with the purposes laid out in the Fund’s Articles of Agreement.
“Due respect should be paid to the fundamental role of sustaining growth in promoting external stability. External stability can only contribute to overall sustained stability when anchored by domestic stability,” she concluded.
Just an observation that China is flexing its muscle. Excuse me its money.
The US won’t sell China what it wants to buy, The US is trying to force a deflation of the Renminbi Yuan to throw China into a recession and China is lining up its allies to continue its necessary growth. Necessary because without a minimum of 9 Million jobs created each year China has labor riots.
Out of 155 countries represented over the weekend in Washington, approximately 11 sided with the US position. Venezuela has completely paid off its IMF debts and said never again, Mexico was advised by the IMF to take its national oil properties public. Mexico said “stuff it” diplomatically.
Switzerland is now worried. “The Swiss delegation to an international economics meeting in Washington has voiced concerns about progress in the finance markets – a key area for Switzerland.
But Economics Minister Doris Leuthard said discussions had been overshadowed by the scandal concerning World Bank chief Paul Wolfowitz and called for a quick solution to the matter.”
Enjoy your day!
Slightly OT - but the husband just opened yesterdays mail and we were both blessed with a ‘personal invitation’ to attend The Donald’s seminar “Creating Wealth The Trump Way”!!
…At this once in a lifetime financial conference you will learn how to:
1. Find income producing properties the Trump way.
2. Slash capital gains tax to “0″ when you sell real estate, stocks, or your business.
3. Lower your tax bill up to 31%.
4. Negotiate the Trump way.
5. Protect 100% of your personal assets from all lawsuits, liens, levies, bankruptcy and even a divorce.
6. Get government approved investments guaranteeing 9.6% to 32% return.
7. Learn the Trump way to cash in on the new trillion dollar booming foreclosure opprtunity in 2007.(my favourite)
I’m almost tempted to go, except I know I’ll have to fight temporary Tourrette’s, as I’ll start involutarily hurling abuse and hitting out at those sitting near me…..
…think I should try it out, anyway?
i got the same invite too. my friend got one too. do they send them out based on zipcode? or what?
….but…but…it was a personal invitation….
I almost feel out of my chair when I heard this. at the end of this interview, Ron Insana said the Fed probably would not raise rates to defend the the dollar!
I repeat, the Fed probably would not raise rates to defend the dollar. he said they’d probably raise them only if commodity prices rose.
http://www.cnbc.com/id/15840232?video=253752422&play=1
Don’t worry, you can’t have a falling dollar without rising commodity prices.
some phrases ive learned reading ben’s blog. these are the ones that make me laugh: ladies suv, slow trainwreck, deathbed loans, liar loans, trustafarian, river noise, its different here, zero down, i/o, multiple offers, bidding wars, “oc is toast”, “its all over ‘cept the foreclosin’ ” “got popcorn?”
i read this blog to endure the frustration and agitation caused by overbuilding and all the overpriced homes in san diego. “leave the keys on the counter”, “nothing here to see move on”…and my favorite phrase is Reset 07!
it’s in the bag. homedebtors.
‘debt people’
that always makes me chuckle.
A condo in Belgrade, MT from craigslist:
“We are willing to look at any offers however with a full offer we will include either 1000 dollars at closing or a 42″ plasma tv (value of up to $2000)”
Hmmm.. offer $5000+ less than asking, or offer full price and get $1000 cash back. Choices, choices.
Perks for full offer!
Apparently the housing bubble is overblown.
http://www.canada.com/nationalpost/columnists/story.html?id=14ea25df-6aa3-4bc1-a28f-916875dcf8d0
I hear a lot of talk from Ontario that “it can’t happen here”. “Cottage prices will not go down because God isn’t making any more.” They are offering 100% loans despite what the article says. What in the world do they think will happen to their economy/overpriced real estate when the US tanks?