Bits Bucket And Craigslist Finds For June 28, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
As requested, a chart showing the relationship between the following has been posted:
1) Median New Home Price Per Square Foot vs. Cost Index of Lumber
2) Cost Index of Lumber vs. CPI
3) Average Earnings of Construction Worker vs. CPI
4) Median New Home Price vs. CPI
http://theendofandanada.blogspot.com/
This analysis was a little more interesting than yesterday’s analysis. As always, thanks to Ben and the many frequent posters here at the HBB for all of your comments, suggestions, and educational knowledge both now and in the past.
Tomorrow’s chart: Relationships betwen the Median New Home Price and Population Growth.
Again, great stuff. Thanks. It definitely refutes the RE cheerleaders who frequently claim that prices will remain high due of huge increases in construction costs.
Thanks again, Michael. The labor cost and materials cost data is very interesting. While the data on materials cost is incomplete, I would be surprised to find that the cost of materials has risen anywhere close to justify the high prices. If anything, with more competitors entering the materials market, there should be a net deflation over time. Additionally, I suspect the cost of materials does not scale linearly with increase in square footage.
Keep up the good work. It’s very informative.
The only material cost that’s responsible for home price increases is land. Construction costs were up with the bubble, but lots were the expensive part (on the coasts). It costs a fortune to get land zoned for residential construction (which is why you see knock down homes in lots of bubble zones).
Knock down the home all except one wall, tax reasons for this.
Where? In my parents’ ‘hood in Mass., they took them down to the foundation, then rebuilt.
I don’t know if there weren’t places that they dug up the foundation too. Would have been an expensive nuisance, but necessary if it were damaged. (We’re talking concrete slab–this is how the neighborhood was built, post WWII. Very practical but actually very unusual for NE.)
A few comments:
The cost index of lumber vs CPI either doesn’t look right or may not be a good representation of overall building material costs. Didn’t costs of a number of building materials increase sharply 2 to 3 years ago due to increasing world demand (China) as well as “local” demand from the housing boom and hurricane reconstruction?
With the increasing amount of “illegal” labor in construction, it doesn’t seem surprising that construction wages having been flat or declining slightly.
Another component that wasn’t included was the sharp increase in land prices in some markets in recent years.
Overall, I think the premise that new home prices have increased above labor/material/land costs is correct, but may need to be shown another way.
Increasing world demand of materials is accompanied by increased world supply. Need more data on that. I would not accept the REIC propaganda that we so often hear from Realtors (remember the articles Ben posted with realtors talking about sheetrock prices??)
The wages of illegal workers probably don’t show up fully in the data, so the real deflation in wages is probably larger than the numbers in Michael’s charts.
Your point about land prices is taken. There is, however, a phase lag between land prices and housing prices. I.e. houses built on the most expensive land sold ca. 2005 will not sell for the highest prices ca. 2007-2008. Put another way, the final price of the expensive land is paid, in part, by MBS & CDO investors
Personally I am looking forward to bargains on granite!
“Increasing world demand of materials is accompanied by increased world supply.”
Not true! There is a finite amount of raw materials available at any price. As the easy access to the raw materials is used up more complicated methods of material extraction are employed as the price rises. A simple example is oil. The Canadian tar sands have become an economically feasible method for obtaining fuel. And in a decade the Colorado - Wyoming oil shale deposits will be economically viable. And as the price of energy rises, at some point in the future hydrated methane will be the fuel of choice - there is just no relatively inexpensive method of mining it
This is true for all commodities - including metals and food; there is no limitless supply.
Living in W. Colo, I can say a lot of those in the know (one side of my family’s been in the oil extraction business since the 1940s) believe shale oil will never be cost-effective. We’ll see which of several methods of extraction actually works, none have been proven viable financially, and a couple are still in the works (and closely held “secrets” by the oil companies developing them and heavily subsidized) - requiring large amounts of water (harder to come by).
Oil shale has been a decade off for the last 30 years. Much like fusion, except they use a smaller number. We might get one or the other eventually, but you can’t take the schedules too literally.
There’s some flexibility in lumber. Old forests can be cut, softer, faster growing trees planted, less used for paper, etc. We can get a lot more wood for a while, with tradeoffs.
My bad about shale oil - LOL. My own belief is that oil in any form is to valuable for other uses than to waste as a source of energy. Once it is burned up, it is gone forever.
agree - I always turn my big gas-guzzling SUV off when I’m sitting in the Starbuck’s line … whoops, gotta go, a strawberry frappucino is calling me…
You sit in drive-through lines? Like, who does that?
Southerners seem to love sitting in the idling car waiting for their place in line to talk to the crappy microphone… Everyone I know from NE parks and walks into the damn place (though at Checkers it’s up to the window since they don’t even have an inside… no surprise, you don’t see them north of NYC). I guess in NE we’re all impatient.
I mean, seriously, when I get into one of those drive through lines I want to kill myself.
And how do you eat in the car? I’ve seen grown men spill mayo or ketchup on their work pants. Eating while driving (or riding) is too damn stressful. Only vehicle I eat on without indigestion is the train.
One more reason I hate retail banks (fired mine and switch to Electric Orange): banks that have longer hours for drive through than walk-in.
F*** you guys, I’m going to be rich in 15 years, while those saps who pay your fees and accept your rip-off savings rates will still be driving vehicles with loans on them. And I’m living better in the meantime, because my overseas vacations cost less than TCO for a car for a year.
SUCK IT UP.
Not a gator, I forgot to turn on and off the sarcasm button.
Hoz, are you familiar with the “law of receding horizons”?
Everything I’ve read shows lumber waaay down. For example:
http://www.buildingteamforecast.com/article/CA6449814.html
and
http://www.thestreet.com/_dm/newsanalysis/retail/10357899.html
and
http://www.chron.com/disp/story.mpl/ap/fn/4527474.html
Read further down in this last link: “Due mostly to the slowdown in new home construction, lumber prices have sunk from a peak of about $1,000 per thousand foot board 18 months ago to around $200 per thousand foot board.”
The last link is no longer valid. I saved the entire article at the time, but the quote I’ve given is the salient point.
Due mostly to the slowdown in new home construction, lumber prices have sunk
This is the key point that many posters are missing. The price of contruction materials, and land as well, is driven by the volume of housing starts. If demand for houses falls, the price of materials and land falls as well.
Or to put it another way, the market price of the finished house drives the cost of the materials and land, not the other way around.
Very interesting charts. I wonder where the source of the cost of lumber graph is? My friend has 160 acres in Iowa and keeps bragging that the value of his trees keeps going up. I don’t know what type of wood it is on his land though. He may be right:
http://finance.yahoo.com/q/bc?s=FSPFX&t=5y
Wells
http://www.latimes.com/business/la-fi-wells28jun28,1,7339988.story?coll=la-headlines-business&ctrack=1&cset=true
Registration/log in required.
You can find user names and passwords for most sites that require registration, including latimes.com at http://www.bugmenot.com
Thanks for the info, BC!
While I’m not surprised that HBs would exaggerate their labor costs, I was surprised to see construction cost to be flat. Also not surprising is the decline in lumber cost. Even the increase in copper, wiring, and consumers’ lust for luxury appliances/accessories wouldn’t be enough to close the gap (I wouldn’t think), so these guys were making $$ hand over fist the last 5 years. And they’ve had the nerve to ask (extort?) their subs to contract for less $ in recent months!
It’s all about the bottom line. The builders are losing hand-over-fist in land writeoffs, so they have to squeeze somewhere to avoid losses, or at least losses that would be otherwise larger than they already are.
Your correct packman….Nobody has more leverage with their sub’s than the big builders…And, the sub’s may cry, but they still take the contract allowing them to keep their core employees on board…The big builders will continue to build to get the land holdings off the books…Even if they are @ break even, its better than trying to land bank and have the carry eat away at their bottom line…The banks are involved also likely offering more favorable carry terms…Bottom line is, from top to bottom, labor and materials, everyone is going to get squeezed….
Carlyle Postpones $415 Million IPO of Mortgage Fund
June 28 (Bloomberg) — Carlyle Group, the buyout firm run by David Rubenstein, postponed a planned $415 million initial public offering of a fund that invests in bonds backed by mortgages after a slump in the U.S. subprime market.
Carlyle is preparing a revised timetable for the sale, it said in a statement today. The Washington-based firm planned to use most of the money from the IPO to buy AAA-rated residential mortgage-backed securities. The fund also targeted loans, high- yield bonds, and collateralized debt obligations.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2SjbpU_ZQJY&refer=home
postponed is quite an understatement…
Further down in the article this IPO is compared with Bear’s recently canceled Everquest IPO. This looks very significant — I.E. the window to dump toxic waste to retail investors this way is now mostly closed.
That’s good. Now, does this mean that Carlyle Group is holding a bunch of this toxic waste, was planning the IPO to dump it, and is now stuck?
Let’s hope so. Couldn’t happen to a nicer bunch of fellows!
I’m not an attorney but I’m assuming that since everyone who has read a newspaper the past week is now aware of the CDO issue (anyone with a brain figured it out a couple of years ago), they are legally unable to claim ignorance going forward with sales of this toxic waste. Any other theories?
I think it’s not so much “ignorance” as the legal accounting valuation of the assets have changed since the sale of some cdos created true mark to market prices and the fictional model valuations had to be revised.
An important post up on Winter’s blog.
http://wallstreetexaminer.com/blogs/winter/
I can’t figure out the ramifications but it seems like it could be pretty big for the dollar.
Thanks for the link. Ruh-roh.
Dang, the time to act is now.
Carlyle bag holders: Bush, Bin Laden, Carlucci, James Baker, Saudi Royal family. Impressive.
Another one bites the dust!
June 28 (Bloomberg) – Caliber Global Investment Ltd., a $908 million fund invested in subprime mortgage debt, will close as losses widen on defaulted U.S. home loans.
RE: Carlyle Group
Another group of Wall Street slicksters.
“…the window to dump toxic waste to retail investors this way is now mostly closed.”
Does that mean the subprime lending kingpins will choke on their own vomit?
BX sitting at $29.92. How do you think people that bought BX at $37 feel right now? Will BX turn around or is this thing Vonage?
Txchic said she was shorting BX at the IPO opening…wonder if she did? $$$$$$$$$$$$$
You can’t short new issues.
Oh yes you can. It’s expensive and a PITA but you can.
I had to put up 100% of shorted price as margin, I could not collect interest on the short stock and I did the transaction in house!
I haven’t covered. Have a decent profit in it with a trailing stop now.
Ditto
No wonder Gov. Crist (Florida) has to go hat in hand to Dubai and Jordan to get business investment in the state. God forbid a hedge fund or private equity group should put money into establishing companies that actually produce something or provide a needed service. I was pretty savage about Dubai, but at least they want to establish a business (visual media) that does something besides build houses or move money around.
All this hedge fund and private equity money sloshing around. Think of the good it could do, the innovation it could sponsor.
Subprime… No surprise here, why stop? No different than GM again offering zero down, zero interest plus cash back, when your company is losing money. People in general are only looking at monthly payments, and if they fall behind they exspect to be bailed out.
http://biz.yahoo.com/cnnm/070627/062707_subprime_abuses_may_persist.html?.v=2&.pf=loans
Quote from this article: “But why should lenders continue to offer subprime loans when they’ve proven so dangerous?
According to Doug Duncan, chief economist for the Mortgage Bankers Association, troubled lenders are aggressively making new loans for an infusion of cash.”
This just disgusts me…
Wow, trying to outrun losses with new risky originations. That sounds like Ownit Mortgage’s strategy….right before they closed up shop and declared BK……becoming the first entry on the mortgage lender implodometer in December of 2006. The implodometer is now at 91! http://ml-implode.com/
Hmmm, what could this say about the originating banks?
The article seems to indicate that the buyers for these loans are freddie and fannie…. if that is the case, it be ludicrous since they are both government sponsored entities, with supposed oversight from the federal government. By continuing these practices, it continues the fraud on the citizens of this country who have not participated in the scams and the ones who’s tax dollars will be called upon to bail these entities out.
This mess never ceases to amaze me…..
Forget about the Fed …
Abolish Freddie and Fannie!
Fannie and Freddie epitomize one of the recurring themes of this blog:
“Privatize profits, socialize risk.”
“…ones who’s tax dollars will be called upon to bail these entities out.”
I hope the regulators charged with cleaning up this mess first make sure that Fannie Mae and Freddie Mac stockholders’ share values drop from current plunge-protected levels to $0 before they ask for a dime of taxpayer bailout money.
Hey, give them a break. I seem to recall that they decided to stop making the riskiest loans… to take effect in August 2007.
Only the Exxon Valdez had more momentum.
How about this…want to know the future occupations for RE agents?
I have a friend who took off a two weeks of selling houses to do extra work on a movie
I’ve done extra work and there is no worse job on the planet. The money sucks (unless you get OT) and you are herded around like cattle.
Now he doesn’t know if he can go back to being a RE agent. Wonder if it’s the fact that houses aren’t selling?
How many times can they re-make Night of the Living Dead?
Palmetto, thank for for waking me up today with a wonderful crack.
You’re welcome, Incredulous. I will be looking forward to your excellent commentary on Pam Iorio’s over-the-top display of pink-slipping many Tampa City workers today (sacrificing them on the altar of tax “reform”).
Hi Palmetto,
I wasn’t even aware of this. I’ve been so sleepy lately, I can barely function, so watching local news is definitely something I haven’t been doing (not that I watch when I’m awake; I’d rather be staked to an ant bed). I wonder if she still has demented plans for the Tampa Art Museum. The thing they have now looks like a giant trailer, though it does have some good artifacts inside. Nothing can save downtown. St. Petersburg got it right, but Tampa is still operating under the delusion that it’s a major metropolitan center, instead of a nasty port city home to something like a hundred thousand illiterate citizens, and something like seventy-five thousand (75,000) arrests every year. What a dump!!!
OT - for incredulous, if there’s not a clear reason for this, get your thyroid checked - very common anymore
Thanks, but I’m sleepy because I don’t get any sleep (average 3 hours a night). I’m responsible for a lot of animals, and one demanding old person, so there’s no alternative.
Why should a lot of people be thyroid deficient these days? Is this for real or is it just the disease of the decade, like Chronic Fatigue Syndrome and Irritable Bowel Syndrome were in the 80s and 90s respectively?
I was told by a nutritionist that we have depleted our soils of the many trace minerals we need to be healthy. living on a farm for many years and watching agribusiness, it does make me wonder, though I don’t know if it’s true. Sorry for the OT post.
It is true. No iodine in the soil anymore. I had to have my thyroid out at Cleveland Clinic and that’s what they told me.
Couldn’t this also be attributed to the no-salt craze? I use lots of salt, iodized for a reason. Low iodine has been a problem for a century.
Nope. Slightly more complex than the nutritionist’s explanation, but what we eat in this country only marginally qualifies as food, with little in the way of nutritive value. Corporate farming sucks. People are slow learners, and these jokers depend on it.
Quizzing a farmer in west Illinois about GM seeds, he looked at me with astonishment and told me that “hybrid seeds had been around forever.” Explained how they sold these folk a bill of goods.
“I have a friend who took off a two weeks of selling houses to do extra work on a movie”
What’s the market rate for a fluff girl?
Boy, you said a mouthful!
I was reading on another blog about a San Diego County real estate agent who took a security job IN IRAQ to cover his mortgage. Can anyone top that?!!
my ex-neighbor did the same thing, but I don’t think it was just for the mortgage, he quit his job as a local cop to go work for a private firm in Iraq. The guy goes and risks his life in Iraq for plastic yard toys for the kids and a new car for his wife. Ouch.
Security Officers for REO empty developments could be the next big “surge”.
We’ve had discussions on what will happen to all the excess suburban McMansions. Will they be subdivided into apartments, allowing the working class and perhaps even the poor to move ot areas with good schools and available jobs, but reducing the fiscal insulation suburbanites receive from the less well off by living in separate local tax jurisidictions and threating their property values? The free market is great, it seems, until it works to the disadvantage of the less well off.
Here, from suburban Memphis, is the first shot I’ve seen in what is likely to be a nationwide political war.
http://www.commercialappeal.com/mca/desoto/article/0,1426,MCA_451_5586936,00.html
“In an effort to head off possible problems with multi-family housing sprouting up in areas zoned for single-family homes, Southaven officials Thursday amended its ordinance to more tightly define who may live in such areas. Mayor Greg Davis said there’s no problem but that the city had reason to believe it could become a problem and wanted to stay ahead of the curve. ‘It has been brought to our attention that agencies that rent to multiple tenants could be headed our way.’”
“Under the changes approved Thursday, a parent or parents and their children can live in a home zoned single-family residential, but no other adults who are not related are allowed.” Doesn’t sound like you can bring grandma under the same roof either.
“We just don’t think it is fair to a family making a major purchase in a residential neighborhood (to have the home down the street or next to them turn into a multiple tenant use.”
“In addition to the amended single-family ordinance, the city plans to look at a possible cap on rental homes in the city. He said officials will review a similar ordinance on rental property passed by officials in Tempe, Ariz. Southaven already has a 15 percent cap on multifamily housing, such as apartments.”
“‘This is a public safety issue, a school issue, a parking issue — and I am glad we are on top of it,’ she said. Other municipalities in DeSoto County also have addressed or are planning to address single-family housing issues. In 2005, Horn Lake approved amendments to its ordinance aimed at reducing the number of unrelated people who can live in a house or apartment. And this week, the Olive Branch Planning Commission approved a maximum occupancy ordinance; aldermen will discuss the matter next month. “
Interesing pre-emptive strike. What they’re trying to prevent is well under way here in South Hillsborough (Tampa) County.
They’ll never be able to enforce it.
This has been an ongoing battle in Northern Virginia in some locales.
Entire neighborhoods have been destroyed (including my ex-neighboorhood.)
My understanding is that parts of Suffolk Co. on Long Island have also had a similar problem.
There’s a scene in the movie “Dr. Zhigavo” that will give you an idea of what it’s gonna be like.
Grrr, I meant “Dr. Zhivago.”
Could you describe the scene a bit for us? I haven’t seen the movie (or read the novel).
It’s been a while - but basically the Bolsheviks physically take the house from the owners - the family of the main character - for “the greater good”, and use it for government-sponsored housing, filling it with several families.
I’ve thought of that scene several times during this bubble. God I hope not, but I fear so - at least in some areas. That to me would be the worst-case scenario of the outcome of this housing bubble, and not too infeasible.
It’s already happening indirectly via section 8. There are many ways the gov’t can take over your house - inflating a bubble and tricking you into debt, then popping the bubble and subsidizing rent after foreclosure is one. It’s only a small step from there to actual government ownership of the house.
Though I wasn’t alive at the time, I rue the day we elected (then re-elected, and re-elected, and re-elected) our first true socialist president.
Oops - meant to post that under Bill’s Dr. Zhivago post.
Is there a service where one can more readily distinguish old posts from new either e.g., via sorting options, email notifications, or otherwise? I find myself spending far too much time re-scrolling through the posts.
yeah, maybe ben could do some kind of color-coding of the boxes -would be easy to find new posts…maybe?
what i do is Search the page with the date codes. Ctrl/F opens the find box.
your post is dated 2007-06-28 07:48:17
If i want to see closely dated posts, i’ll “find” using the numbers 2007-06-28 07. Only those posted in the same 7th hour will be selected.
..or use 2007-06-28 08 for posts in the next, 8th hour.
It is a safety issue, by the way. There have been a number of fires in NYC area, with fatalities, started because of too many illegal apts. jerryrigged into a house. You end up with all sorts of cooking arrangements…hot plates and such plugged into overloaded sockets. Result, some deadly fires, killing firemen as well.
Sounds like the computer in my office at home. PC, Monitor, printer, router, wi-fi, speakers, and cordless phone all on one outlet. It worries me sometimes.
Heh! I remember when I moved to New Jersey I was looking at rooms for rent in Wayne. New Jersey has high property taxes and almost every homeowner has a room for rent (cash only and month to month okay). One place in Wayne was in a basement. The basement had three bedrooms and a kitchen. The traditional part of the house had its own kitchen of course. The price was right $500 per month while I would pocket $1400 per week tax free per diem. But I did not take it only because of lack of security. the other roommates were nice but they were careless about leaving the door unlocked. I was worried about someone walking off with my laptop computer. Instead I took a $1670 per month month-to-month apartment. Yeah, costlier, but it was my own and it was furnished.
Heh! I remember when I moved to New Jersey I was looking at rooms for rent in Wayne.
Yeah, my brother lives in Wayne.
He has a 7-3-2 60’s ranch he bought for like $270k before the bubble.
He always talks about the McMansions owned by acquaintences he goes to visit.
Big puff from the curb, but once you go inside the houses are devoid of furniture to the point he and wife are embarrassed ’cause there is no place to sit other than on the kid’s video game bean-bags.
Combined with the leased German and high end Jap cars parked in the garage, it’s all just an illusion.
Funny, this issue is popping up repeatedly lately:
Story at: http://tinyurl.com/2kl86h
Boarders tell their stories
Renting out rooms is a necessity in high-cost market, some owners say
Well, if you zone out multifamily but still want cheap labor what do you expect? People to walk 20 miles each way to work to not generate traffic on the roads?
My god, she is a breeding machine. Close your legs, honey!
In one new home on Grace Street, Carla Palma, who also hails from Honduras, lives with 10 people whom she said are members of her family. The home is large and clean, but it, too, has room numbers above the doors.
The mortgage for the house is $5,000 a month, Palma said, and the others living there chip in what they can to pay the bills.
Another symptom of our times: illegal aliens get suckered into taking out an insane mortgage on a house at inflated prices. But that’s OK, because they have 10 people pitching in.
Of course, once their neighbors turn them in for housing violations (and rightly so), people disappear, the mortgage never gets paid, and all of that money disappears in a big “poof!” as the house is foreclosed upon.
I know of a home office situation that is threatened from city regulators, presumably due to pressure from neighbors. Guess the neighbors don’t understand the difference to their home valuations between having several extra cars in the circular driveway next door, and having a foreclosure next door.
I can’t imagine how they can even see the extra cars in the driveway past the all the yard care trucks blocking the streets though…
This has been common for a while. For many decades, I’ve seen large 80 year old second homes (in Maryland) for the gentry commonly have an owner live on the first or second floor, and rent out the rest of the house to one or two other families.
This seems like it will certainly be the fate of many exurban McMansions.
As a freshman at Colo State, I lived in such a place - a big old Victorian, run-down, the elderly owners lived in the downstairs and rented out rooms in the upstairs. Beat the dorms, at least. Cheap, too, and right behind Taco Bell, good for me since I had no car or way to get to the grocery store. Still can’t stand to eat at fast-food Mexican food places - LOL.
I rented rooms exclusively until I came to Gainesville and ended up co-renting apts. Renting a room would be cheaper here, too, but the hassle would be too much because of my job (I leave for work anywhere from 4:30 to 6AM for day shift and may return anywhere from 11:30PM to 3:45AM on night shift).
“Now, in each of six rooms, two or three mattresses are spread out on the stained carpet. There are bathrooms as well, and the garage has been modified so that it could be another bedroom. ”
“In each bedroom there is a television and numbers hang above each door, motel-style. In the back yard, mattresses are stacked against trees, and water bottles full of what looks like urine are scattered across the yard.”
Somehow I don’t imagine it was quite like this place. *Barf*
Where is the County Health dept.? Why don’t the neighbors call? This is extremely unsanitary and a health risk for the neighborhood. Running a boarding house or even if she claims it’s a home–this kind of filth is illegal. And if her children are playing with the neighbor’s kids or going to public schools, they could be carrying diseases and putting other children at risk.
Couple of our McMansions got sold and turned into group homes for troubled youth. With the foreclosure rates, maybe many will be turned in asylums for foreclosed sellers.
OT but interesting:
Corporate attorneys showing HR and corporate execs how to get around those pesky laws about hiring illegals and eliminate American workers.
http://www.youtube.com/watch?v=TCbFEgFajGU
The illegal immigration bill is really stinking out the joint in the Senate. There was some comment from one of the Senators (I think it was Nelson from Nebraska) saying how he’s voted for cloture (limit debate) four times (unprecedented). The bill is ugly and it wants to die.
They don’t even know what the bill contains. Voinovich was asked point-blank yesterday and he finally admitted that he didn’t.
The corporate ownership of Congress is driving this.
The whole idea is illegals provide cheap labor and hold down wage demands from Americans as well. So legalize the 12-20 million illegals already here, and give them at least minimum wage. Then a new army of illegals arrive, ready to work for even less. If the gov’t refuses to enforce the immigration and employment and OSHA laws now, they will be ignored in the future as well. As for port and border “security”–you must be joking, what does that matter when you’ve got cheap labor.
Actually, it’s being done so social security stays solvent. An influx of 12-20 million new workers suddenly paying in to a “pay as you go” system will really stave off the inevitable collapse.
Nevertheless, I agree completely that the failure to enforce laws leads to anarchy. Besides, it was the President and the executive branch who failed to secure the borders for the last six years. (Pre-empt: yes, I know it was a problem before that too. Read the rest before flaming.) The President’s current amensty position is hypocrasy of the first order: he failed to enforce the existing laws, and now wants the laws changed for the benefit of certain constituents at the expense of everyone else. It’s a slap in the face.
“Actually, it’s being done so social security stays solvent. An influx of 12-20 million new workers suddenly paying in to a “pay as you go” system will really stave off the inevitable collapse.”
The problem is that “cheap labor” does not pay much in Social Security. You can’t count on these new workers paying a lot in SS or any other tax while at the same time being the cheap labor that business wants.
That slap is compounded with this little gem…a 5k payment to cover all back taxes…citizenship is thrown in for free.White House claims it would be “too difficult” to figure out what illegals owe…after all, that might require the businesses that employed them to make up past FICA payments. So you’re going to load 12-20 million illegals, and their relatives from Mexico, onto Social Security, and add them to the disability rolls (no prior employment in the US is required) and that’s going to “save SS?? No way, if they can’t break it one way, they’ll do it another.
RE: 5k payment to cover all back taxes…
Payable in installments over 30 years and with applicable income level deductions.
“They don’t even know what the bill contains. Voinovich was asked point-blank yesterday and he finally admitted that he didn’t.”
Sounds like plausable denyability…. Voters hate it, but the big contributers want it… So you vote yes, then pretend you dibn’t know what you were voting for.
I don’t believe for a minute that they don’t really know. They have teams of assistants that do nothing but read the crud, and write crud… They know, they just hope you don’t, and when you do figure it out, they claim they didn’t know. BS!!
The funniest suggestion I’ve heard is to beef up border security then pass a law giving immunity to deportation to any illegal who wants to sue their employer for paying less than minimum wage…
Think of the cost to the country’s medical system due to the fits of lobbyist apoplexy the floor fight on that one would cause!
Immigration bill just died, and MAN is business pi$$ed off about it. Grumbling how the volcal minortiy gets its way…. Since when is 70% against amnesty considered a minority?!?!?!
What they are really upset about is that the rich minority didn’t get the steam roll the minority.
But… but… but… it isn’t amnesty. They have to pay a fine.
Puuuuulease. Put a pig in a dress and call it a fox, does not make it a fox.
ANY law that lets people that are here illegally, become legal, is AMNESTY!!!! I don’t care if there is a fine or they have to return home for a few months, or whatever… If we say “Hey, you came here illegally, but now get to be here legally” then it IS AMNESTY!!!!!
Amnesty by any other name, sucks just as hard!!!!!
I’ll be extremely surprised if this actually dies. I suspect this will get attached to some other unassailable bill in the future (assuming it is possible) or another run is attempted during a national emergency. The PTB always get their way. For now I will enjoy the win!
The amazing thing is that they tried to tried to dress the pig up not with lipstick but with dung. Allowing the illegals to become legal by paying “fines” is bribery and nothing less. So not only did the bill provide amnesty, but did it by using bribery.
Want to shore up social security. Fine all the corps for every illegal alien they employ. Besides if everyone in this country makes such low wages as to only simply exist, who in the h*ll is going to buy all the products these corps produce with illegal labor. They’re all too stupid too figure out that this is going to affect their bottom lines eventually. Even rich people only need so many widgets.
With a dead immigration bill and that POS Nigel gettin’ his due, it’s been a good couple weeks.
Great to be a renter.
Here is why i am so unemployed right now:
It is Illegal for me to offer to work for FREE “aka: intern” in say a law firm or tv station, just to get a recent job reference, because i am not enrolled in school……..but it is OK for that same law firm, tv station to hire illegals to clean their offices
While I sympathise with your plight, you’re not comparing apples with apples here.
Actually I AM…….The Need for recent work experinece is crucial to getting a better job.
So why are so many Americans denied this? Most “Intern” programs are for full time students only, I cant afford to be a full time student just so i can get an “intern job”. I cant live at home with my mom.
Its called severe underemployment, or even age discrimination, oh you say you can volunteer in a hospital, or community organization, but what does that have to do with anything i was trained for. I don’t want to work in Hospitals, because i worked in TV for so long and they operate 24/7, they always stick the newbie with the worst shifts.
Sorry, I should have been clearer before. I agree your work situation bears comparison with the illegal cleaner.
My comment was aimed at the difference between the jobs. I suspect there would be oncost issues (particularly insurance) in having an intern who wasn’t in a formally recognised training programme.
how can it be legal to hire illegals?
He didn’t say it was legal. Just that it was ok.
It’s “legal’ to hire them. Just not to be one.
For the record, it is not “legal” is any way to hire them. But there is no enforcement of the immigration or employment laws, so who cares if you do hire them.
Increasingly, the “law ” in this country is entirely optional. Pick and choose what suits you and ignore the rest.
It is Illegal for me to offer to work for FREE “aka: intern” in say a law firm or tv station, just to get a recent job reference, because i am not enrolled in school……..but it is OK for that same law firm, tv station to hire illegals to clean their offices
And that’s just for the low-end crap. For the real “intern” stuff firms in the know hire “Eastern Bloc” college age kids secured from special foreign worker programs which allow employers to skate SS and Worker Comp taxes.
Tourist biz is swamped with these off-shore mercenaries.
The whole system is collapsing in corruption while most American’s sit sedated with their Paxil scripts and extra crust extra cheese Domino pizza’s droned out to American Idol.
I was at Six Flags Magic Mountain over the weekend. EVERY person operating the rides had an Eastern European accent and the name tag read “Tatiana, Svetlana, Ivan, Vlad…”
did you see casey?? Isn’t he from Uzbekistan (sp?)
Six Flags??? Are you kidding? That poor teenage girl had her feet severed on a ride there last week.
Well, if they hire illegals, you know they’re cutting corners elsewhere.
Umm…I “interned” at WNYC for a while when I was unemployed in New York. Since it was a non-profit it was volunteering and it was just fine.
There are plenty of non-profits that do legal work. You could ask to be a volunteer paralegal at one of those to get a recent reference. If it is a place that has lawyers volunteer to do pro-bono work, there will be people with great contacts.
Also, have you tried networking through the Bar Association of the City of New York? I don’t know if they have a sub-group or sister organization for paralegals, but they might.
Immigration is good for the US, So stop complaining about loss of jobs or wages.
The lack of affordable labor in this country only increases the rate at which jobs are shipped overseas.
When the house organ for the CFR prints an uh-oh article ref the apparent unintended consequences of outsourcing, it’s probably time to grab the rails while they put this thing into reverse……
This is rich.
A friend of a friend bought a place in one of many crappy areas of Baltimore in April 2004 for $196,000. The previous owner bought it a year earlier for $40,000 and completely renovated it so he could dupe a couple yuppies into buying it.
She wrote this on her blog two days ago:
It was a bad day in the neighborhood for crime. Our neighbor’s car (We’ll call him P.) was broken into in broad daylight. A couple hours later, some kids came down the street with a fire extinguisher aiming it at the flowers in front of the houses. P, the local wannabe sherriff, confronts the kids and takes the fire extinguisher. Brad was with him. P was very nice but the future of Baltimore City threatened to hit with a piece of metal rebar.
I’m watching this from down the block. Another neighbor comes down the block with her grandchildren. She mutters that P. shouldn’t be talking to the kids without the police or their parents around (um, hello, that’s the problem, the parents are never around and the police aren’t going to be there in time to do anything). She then buys dope from the dealer squatting two doors down with her grandchildren looking on.
Sigh.
Well if the dope is cheap and readily available maybe “everyone will want to live there”.
That seems to be the problem with being the first to gentrify a neighborhood. Same is happening in the prevoius “bad” neighborhoods in Boston, like Jamaica Plain, Dorchester, Roxbury, southie… You have an explosive mix of suburbanites transplanted to a rough urban setting, and either the suburbanite is going to get hurt, or he is going to get a gun and go all “Falling Down” on the denizens of the ‘hood.
Boston is not nearly as crime-infested as Baltimore, so it seems far more likely that JP and Southie will become completely gentrified. My prediction: When this couple has kids within the next five years, they will get the f–k out of dodge and lose money on that house.
Dan,
you’re an optimist. Baltimore is already a violent city with high murder stats…these folks were be gone one way or another long before 5 years.
Last year, Baltimore had the nation’s second highest murder rate
But Time magazine awarded the mayor with a Nation’s Top Ten Best Mayors award! This during an election year in which that mayor ran against a Republican incumbent governor, and the mayor won.
You can decide what that means
But we’ve got some good draft picks so we’re going to knock ‘em away this year.
If you’ve know Baltimore long enough, O’Malley did an OK job in stopping the slide into oblivion. Truly, I like the look of the old houses and Baltimore has a great history (for example, I think the first public street lights (gas) were in Baltimore)… but all that being said, the city would be better off razing about 10% of the city.
I also think they should explore year-round public schooling, more low cost GED night classes, and putting slots into Pimlico while tieing the taxes on it directly to education and law enforcement (NOT the general fund).
Boston is not nearly as crime-infested
Depends whether or not you’re the one being mugged
B*tch, please … spend an overnight in dntn Balto some time (near Penn Station, NOT Harbor district, which is bad enough after dark) and write back to me about how it was.
Imagine Roxbury in 1990 … but encompassing five entire Dorchesters and going on for ten years …
Okay, now add a giant sucking sound … that’s the sound of a former governor taking money out of the already awful schools and siphoning them into the “steal a football team from Ohio” tank …
Baltimore is a pit.
There doesn’t seem to be as much of this kind of problem in Washington, DC. I read the occasional story about pressures between gentrifiers and old-timers in the changing U Street, Logan Circle and Shaw neighborhoods - but it rarely seems to involve the fear of sheer violence that you get in Baltimore (it’s more about resentment and tensions on the street and petty crime). But Baltimore seems outright scary in tougher neighborhoods. It’s a shame, because it’s a really neat, fun and funky town in a lot of respects, and some of those neighborhoods could be really great.
I used to work on Capitol Hill in DC in the mid-to-late 80’s — there was a lot of random violence there against gentrifiers there — there were three people (two were relatives of people I knew, and one was a co-worker of a friend of mine) all violently and senselessly murdered in supposedly pretty safe neighborhoods on Capitol Hill over a two year span back then.
That’s because you have genuinely nice areas like around Rock Creek Park actually inside the city limits, whereas in Balto all the nice areas are in the county, not the city.
There is a LOT of violence in Dupont Circle, despite the four or five police forces that patrol that area, which is what you might consider a “gentrifying” area–it’s a longtime gay district and has some Georgetowne University students.
Baltimore is just bigger than DC, I think, and had a greater industrial engine to dismantle. Former industrial towns can be the worst for crime.
I actually lived in Jamaica Plain during my first two years of law school before bailing on Boston to return to the Bay Area for my last year, and didn’t find it nearly as bad as the rough areas of DC or Chicago.
JP was an artist’s colony, not a working class community. It was sketch for a short period and has suffered a lot, but has always had a strong, highly-educated, community leadership.
Other boroughs in Boston have followed their lead.
Reference to blog site please!
http://sirenz.livejournal.com/2007/06/26/
Does this sound familiar. Spent several years living in a national historic district in Detroit. Four streets surrounded by ghetto and crime. We were glad to get out with a low six figure loss, and this was in the middle of the housing bubble run up!
This was supposed to be a response to Dan, above.
Indian Village?
love Indian village. Gorgeous homes. Lots of Indian Territory surrounding, however.
Ah, Baltimore, one of the greatest hellholes in the US! A little slice of Mordor here on Earth! You haven’t known fear until you’ve seen the streets of Baltimore, with gang-bangers running around with semiautomatic and automatic weapons at night and thugs and druggies shambling around during the day. The streets of lifeless, crumbling rowhomes, where even the trees have given up and died, for there are none of them to be found - no life, no hope… nothing!
Baltimore - it really is different here!
I wandered a bit of ghetto there one Sunday morning trying to find a bus stop (yes, I do have a sense of fear … but it was Sunday morning). It was the most picturesque scene imagineable, like movie ghetto–the rising sun, the basketball bouncing between stoops, the women and men in their church coats and hats, the quiet and the dust … beautiful.
KBH numbers out this morning. Deliveries down 28% in first 6 months of this fiscal year versus same period last year…ugly stuff. Cancellation rate still running high at 34%.
KB Home reports unexpected loss
Homebuilder puts quarterly operating loss at $174.2 million, says it continues to see deteriorating market conditions.
Unexpected by who? Everybody here could have predicted this!
“KB Home reports unexpected loss”
New moniker for the bubble: Expect the unexpected.
Sounds about right.
http://latimesblogs.latimes.com/laland/2007/06/tuesday-morning.html
The graph is an excellent depiction of the psychological stages of a market bubble. It is fairly easy to put time frames to each of these stages as displayed by our local housing market:
• Take off: 1998-1999
• First Sell Off: 2000
• Media Attention: 2001-2002
• Enthusiasm: 2003
• Greed: 2004-2005
• Delusion: 2006
• Denial: 2007
• Fear: 2008
• Capitulation: 2009-2010
• Despair: 2011-2013
• Return to the Mean: 2014
I was about to flame, then clicked through and found the LaTimes does indeed attribute the source (another blog).
A short review of the history that led us to this problem
History past - history future
1987 - Japan’s Tokyo Securities and Stock Exchange becomes the largest financial market in the world. Nomura securities of Japan is larger than Merrill, Lehmann and Salomon combined. The US presses Japan to revalue the Yen. Japan (to its detriment) agrees. US 30YR T Bonds yield 10%. US stock market crashes 23%, Volker/Greenspan cut Fed Fund rate to 0% (from 7.25%). 30 YR T Bond rise to yield 6.5%. Japan stock market collapses. US stock market stabilizes. US housing prices start rising.
1988 - Volker retires - Greenspan new Fed head; Drought in midwest leads to farm foreclosure worries, Fed funds are 8%. Congress authorizes emergency farm relief through the USDA - free money. Housing prices still rising.
1989 - Fed Funds rise to 9.85%, US housing prices start to drop. Japanese markets continue collapse, Japanese investors liquidate to meet rising margin calls.
1990 - Fed Funds drop to 7.15%, US entering recession. Japan RE liquidity dries up.
1991 - Fed Funds drop to 4.43%, US housing prices drop following Japans RE prices down. Fed meets to ease bank reserves to spur lending. Bank of NE about to go into BK, Fed bails bank out. Inflation is ~7%. Greenspan argues oil and food should be removed from CPI, President Bush agrees. Unemployment 7%.
1992 - Fed Funds 2.90%, Federal Reserve releases funds to spur lending in an attempt to halt the RE decline. Japan in full retreat.
1993 - Fed Funds 3.00%, Oil and food are removed from CPI statistics. Hedonic items are added to CPI. Federal Reserve Policies ignore money released. Stock market poised to soar. Housing prices stabilize.
1994 - Federal Reserve meets (March 9, 1994) and questions whether their new policies will lead to bubble markets. Greenspan believes that it is easier to deal with a bubble after it pops. Stocks soar, RE rising. Bank reserves cut to - 0 - on RE purchases less than 1.4M.
1995 -present: The Federal Reserve open money policy leads to bubble markets in stocks, farm land, residential housing, art, collector cars etc. US GDP drops from 36% of the world’s economy to 28%.
This 20 year open money policy was to stave a small recession in 1987. It is this policy that kept the US from entering into a more severe RE drop and that has propelled the US stock market into previously (prior to 1987) dangerous PE ratios. (The historical stock market valuations have been highs of PE 9 ; current PE ratios are ~20.) At the same time it turned average prior home ownership ratios from historical 3X annual earnings to 6X annual earnings.
2007 - The Federal Reserve meets to discuss whether dealing with a bubble after it pops is sound financial policy.
It took 20 years to get here … it will not be quick getting out.
The future…. Je ne sais.
nice post, as usual, Hoz. Thanks
nice post, as usual, Hoz. Thanks
Ditto for me.
Enjoy your posts immensely.
forgot one item that is of importance:
2007 - Fed meets June 26 - 27 to revise CPI, oil and food are added back into the calculations and certain Hedonic items (automobiles, computers and VHS) are dropped from CPI calculations.
“Greenspan argues oil and food should be removed from CPI, President Bush agrees.”
Uh-huh…
“1995 -present: The Federal Reserve open money policy leads to bubble markets in stocks, farm land, residential housing, art, collector cars etc. US GDP drops from 36% of the world’s economy to 28%.”
It sounds like the Fed’s bubble creation policy has created plenty of growth — of the negative sort.
Thanks, Hoz.
Three ex-Countrywide “mid-level” execs plead guilty to insider trading:
http://tinyurl.com/2fy3h4
“Three former Countrywide Financial Corp. executives agreed Tuesday to plead guilty to trading on their inside knowledge that the giant mortgage company’s earnings in the third quarter of 2004 would fall well short of expectations.”
“Meanwhile, the Calabasas-based lender’s stock Tuesday fell 96 cents, or 2.6%, to $36.31, a two-month low, on rumors that the FBI had raided its offices as part of an investigation related to sub-prime mortgages.”
“In a statement, Countrywide denied that a raid had occurred but didn’t address the general subject of an investigation.”
“In a statement about the trading case, Countrywide said it was “committed to the highest ethical standards.”"
“”The company’s policies prohibiting illegal insider trading are strictly enforced,” Countrywide said.”
“The company described the three executives as “mid-level managers” and said it had cooperated fully with regulators and prosecutors in the case.”
Of course Countrywide is “committed to the highest ethical standards.” Isn’t everyone in the mortgage lending industry?
If this was happening when times were “good” (2004) , what might be happening more recently?
Housing bubble/bust tax reform fallout in Florida: Tampa Mayor Pam Iorio announces extensive Tampa City worker layoffs. Many people, even as we speak, will receive pink slips today.
A few thoughts: First, the big hoorah over this, which was plastered all over the news yesterday evening, looks to me like the opening shot in the psychological warfare between local Florida governments and Tallahassee, with the citizens caught in the crossfire. A disgusting display, IMHO. One caller to one of the local cable shows wanted to know how we got along before the bubble, when services were much better and delivered efficiently. I’m sure local govs are top heavy in personnel, but it really sucks for people like the one guy who works in Parks and Recreation for over 20 years (employed pre-bubble) and will lose his pension if he gets laid off. He’s probably counted on that pension all these years.
The operative words there are “top heavy”.
Trouble is it’s never the heavies that get topped; the pink slips always go disproportionately to the low-end folk doing the actual work.
“the pink slips always go disproportionately to the low-end folk doing the actual work.”
Amen to that.
Is the following statement accurate?
“The Case-Shiller Index tracks rates of return on housing relative to other investments, and not simply home prices.”
No
I didn’t think so. Someone should tell this asshat that…
http://tinyurl.com/3xrweu
So S&P is noticing a “disconcerting trend” in Alt-A defaults.
Well, who’d a thunk it?
We would, and DID, and posted about it right here on this blog at least a year ago.
link?
http://www.reuters.com/article/bondsNews/idUSN2636866620070626.”
this was posted yesterday
Need to remove the fullstop and quote for that link to work.
http://www.reuters.com/article/bondsNews/idUSN2636866620070626
Thanks. From the article:
“‘We continue to see migration from 60-plus-day to 90-plus-day delinquencies within the 2006 vintage, suggesting that homeowners who experience early delinquencies are finding it increasingly difficult to refinance or work out problems, as opposed to being able to cure falling behind on payments,’ the rating agency said.”
Or perhaps they’re realizing that they bought at the absolute peak of the market, have no skin in the game (many having either just moved in and not even bought furniture yet - or many others having not even moved in), and are better off just mailing in the keys rather than even making an attempt to stave off foreclosure with a few payments.
At least those that bought in 2004 & 2005 have some skin in the game, and are thus less willing to just walk away. I venture this is why 2006 will prove to be by far the worst vintage for foreclosures. Though who knows - 2007 may top it.
Sing a song of hedge funds, a pocket full of lie,
Four and 20 bad loans baked in a pie.
When the pie was opened the birds began to sing,
Oh, that’s where all those toxic loans went, to the hedge fund king?
The king was in his counting house counting out his money,
The queen was in the parlor of a gulfstream, drinking tea with honey…
GetStucco asked a question in yesterday’s Bits Bucket that deserves an answer: Why does the stock market always go up even in the face of bad news?
Answer in two parts: First, it doesn’t always go up. Second, the process he’s observing is called churn. Remember, the bulls (think they) have developed a system of eternal profit. It goes like this: Bob has 10,000 shares of ABC Corp. He bought it for $10.00 per share, is $100,000.00 in. Bob sells to Tom for $10.50 per share. Bob’s client is thus up $5,000.00 and Bob makes a commission on the sale. Tom has the stock now, and he sells to Scott for $11.00 per share, is up $5,000.00 and makes a commission. Scott then sells the stock back to Bob for $11.50 and makes a commission. Net result: the stock is now valued at $115,000.00, commissions have been “made” and all of the brokers are happy. The stock looks more valuable and two of the three clients have more money in hand than they started with. It’s a beautiful system.
The only problem is, there has been no real-world change in the true value of the stock. Assuming it was really worth $10.00 to begin with, and now it’s “worth” $11.50, or an increase of 15% - for no good reason.
Kicker: Most, if not all, of the companies making their reports and showing “profits” are engaged in this type of stock investing, which is included in their balance sheets.
Churn leads to froth. If the froth is suddenly blown off the market and if the churning process stops, or even slows suddenly, all of the brokers’ sins will be revealed. Corporate “assets” will be revalued, margins will be called, and Very Bad Things will ensue.
That is a ponzi scheme. Truly, this is nothing new. I mentioned before that Adam Smith’s The Wealth of Nations (excellent thesis) was the cornerstone of capitalism, alhtough it didn’t particularly say it was better or worse. It simply looked at history, and pointed out what worked and didn’t work to advance the production of the most goods. Big central agencies doing the planning didn’t in the past, and most probably won’t in the future. Each individual using his resources as he sees fit eventually does provide the most goods for society.
He details the causes and effects of regulated companies, joint stock ventures, public education, militias, standing armies, post roads, etc. If these items sound vaguely familiar, they should. He published the work in 1776, and was read by many of the writers of the Constitution. It is not only a treatise on a system of governance, but the economic system that went with it. I don’t know of a better source of knowledge.
“Each individual using his resources as he sees fit eventually does provide the most goods for society.”
The cornerstone of many good things, including democracy and the path to happiness. Getting more and more difficult to do with all the laws, restrictions, and taxes our government imposes.
Our system of governance is a republic. I realize that democracy is used by many, but it is incorrect. Our Constitution lays out a system of governance. The only form of goverance it guarantees to each state (I think Article 4) is a republican one (not to be confused with the party). An electoral process is used to elect the leaders, but each legislator (at the federal and state level) as well as every officer of the Judicial and Executive branch is required to take an oath to support and defend the Constitution (or the system of goverance described).
By logic, it isn’t up to interpretation. If it were, what is the point in taking an oath. We would just do whatever the majority want. There is a specific way to change the constitution via amendments, but that requires much more than a simple majority of Congress, and requires much more than the majority of state legislatures.
This is due to the fact that the states had to agree to the document as is. If they didn’t get nine states to ratify it, then it was a dead issue. Initially, only four states ratified it. With the promise to add the Bill of Rights to specify individual rights, and extremely important, to limit the powers of the federal government, enough states were swung to ratify it. The tenth amendment is the amendment limiting federal power only to those delegated by the constitution. Anything not enumerated was left to the states, or to the people.
Yes, alot has changed. The Federal government is in everything, including housing. It has no constitutional right to be in it, but it is nonetheless, at least in a roundabout way (taxes, the Fed (although a private bank chartered by Congress to have a monopoly on the currency through legal tender laws). The oath has been somewhat tainted by political party, business, constituentcy ties. As soon as the politicians realized they could bribe the people with their own money, the game changed. Like Washington said… (paraphasing) few men have the virtue to outlast the highest bidder. It was true then and is true today. Wait to see how many votes the person gets who promises to bail out those in foreclosure trouble (at least from those in trouble).
This may seem off topic, but it is the root. The rest are simply symptoms.
I prefer anarchy, myself. Everyone for themselves (keep reading). Unfortunately, anarchy only works when people realize that we have to cooperate to survive, as someone wiser than me astutely observed long ago (Plato).
if you think that anarchy is the same as freedom, you’re doomed to be a slave.
From Wikipedia:
Anarchy, has a popular meaning of disorder[1]. However it has a more precise meaning in political philosophy to describe any human society which exists without a state:
societies where an existing state has collapsed;
societies where no state has ever existed;
societies, whether real or speculative, where the state has been consciously abolished.
I prefer the last two meanings; most hunting and gathering societies were anarchistic and very successful until wiped out by those with military or religious agendas. They emobodied true democracy and freedom. Study the Iroquois for a society with a true anarchistic center, very successful, and the one used by our forefathers as a fasion for the Constitution. Quite the opposite of slaves.
fasion = model
The Iriquois had a system of governance–they had elected or appointed chiefs on the local level, and they had a council of representatives on the tribal level, forming the Iriquois Confederation (sound familiar)?
Their form of government was used as a model for the US government, first styled as a confederation, but then reworked into its current form with a stronger central government.
The idea of federalism is still quite popular–even expressed in the creation of the Fed, as the people feared a central bank. (It is, of course, a defacto central bank.)
Neither the Iriquois nor the early USA existed in a state of anarchy. Those who thought otherwise were swiftly, and brutally, put down.
Go look up WICKARD v. FILBURN and you will see how the federal govt has grown to the unholy proportions it now occupies. The day this decision was passed was the day the final nail was put in the coffin of the US being a free country. We are currently living through the decline and what a ride it is.
Aside from the fact that what you are describing is illegal, there are several reasons why stocks go up in the face of bad news. I have posted this before and probably will post again, with the current derivative market, it is possible to buy stocks and sell futures to offset market risk. It is very easy to borrow the funds in Switzerland or Japan at below market rates and hedge in the currency market, buy US stocks to reap the dividends and after all costs, earn approximately 8.4% APY.
There are no significant buyers for portfolio purchases of US stocks, it is an interest rate play.
What you are describing is also detailed by Mr. Smith. It doesn’t create wealth. Gold and silver don’t create wealth. Ultimately, creating money doesn’t equate to creating wealth. It is a common measuring stick, but how it is measured is important. Since the basis for the current system is debt, this implies that creating debt creates wealth. It obviously doesn’t.
If you don’t think that is the case, look to see what must be held by the FED as collateral for the notes they issue. The two things required are gold certificates (which make a very minimal percentage) and treasury debt. That is all. A whole bunch of debt. With trade deficits at record levels, how are we going to produce something to exchange with the other nations of the world to begin to reduce this? Well, that is what the FED and Treasury are trying to do with regards to currency manipulation rhetoric. Debase the currency even further in relation to the others so that hopefully we can sell stuff other than dollars. Unfortunately, the other countries are beating us to the punch and debasing theirs faster.
Wealth is only created by consuming less than you produce. Borrowing to consume compounds the problem, and I’d say we are in a heap of debt, not wealth (as a collective group). Even those who have amassed a large share of money don’t realize the underlying collateral for those notes is debt. When it doesn’t get paid back, that is a serious problem. Someone has to keep borrowing to keep the game alive. Immigration bill being pushed like there is nothing more important? You bet it is. It isn’t for security in the physical sense. It is for security for the financial system. Someone has to live in these homes to pay on them. If they go vacant, it will quite probably be what takes the system apart. Houses are a very large portion of the underlying collateral.
Those folks on TV that say it is only a small part of the economy must not get out much. I would ask them what makes a town? The most prevalent portion is homes, by a long shot. The price is set at the margin. Record inventories. If someone isn’t found to buy these things at current prices, the holder of the loans are in trouble. Is the FED going to say that? Not by a long shot.
Once again, this isn’t anything new. The Wealth of Nations (notice the title is Wealth, not debt) is an excellent chronicle of exactly that. Just read the chapter on joint stock companies (stock market–there was one in the 1700s, just not the DJIA), and learn how things have gone in the past. It is the best way to predict the future, although there are obviously others as well.
Earth to Kerk - does that explain why stocks go up in the face of negative news? LOL
Yes, it does. The central agency has conditioned the society to expect an injection of more money to alleviate the ones previously caused. It will work in the short run, but not the long one. Folks now are attempting to position themselves for the anticipated additional money. Unfortunately, the rest of the world has a say. Read up on your own about what Thomas Jefferson said about banks and how formidable an opponent they were to the republic. This is nothing new when viewed in the context of more than 200 years. Everyone has their hand out, waiting for the next money drop, hoping they have nudged out the rest of the suckers wanting whatever is dropped. We’ll see how it plays out.
I do not disagree with you about the prospects for fiat currencies or central banking systems. The market does not give a rat’s ass where the moneys come from. If I can borrow the money in Japan and loan it out in New York pocketing a couple of yachts in the process, does anyone really care how I got my yachts? As long as someone is willing to accept dollars for tangible items, I will continue to borrow cheap moneys and loan out dearly. When some firm or foreign entity buys a future contract on the S & P 500, it is allowing an arbitrager to lock in an interest rate spread and buy a yacht - a real tangible item bought and paid for. This forces markets to move upward. The party is over when there is no longer an opportunity to arbitrage the interest rates. Much as I enjoy Mssrs. Locke, Jefferson and Smith - their combined knowledge of financial arbitrage can be printed in block letters on an 8.5 X 11 piece of paper. Although in Mr. Jefferson’s case, as a successful slave owner, this is similar to an arb.
Houses are a very large portion of the underlying collateral.
Well the mortgage banking system sure didn’t think so, given what was done to the established real estate profession.
The mortgage biz credo:
How cheap will you work-how quick can you get it done-and don’t screw with the number we tell you to hit.
AND don’t mention ANY negatives in the report which will cause problems with underwriters.
The whole rotten deal deserves to come unglued.
There are many reasons stocks only go up now; inflation, liquidity, etc. Here is an explanation of the crack-up boom:
http://www.safehaven.com/article-7806.htm
“inflation, liquidity,” leverage, leverage, leverage,…
‘The “Crack-up Boom” will drive an inflationary global expansion to inconceivable heights over the coming years. Asset prices will skyrocket as people do what they always do when threatened; they will modify their behavior and do the things necessary for “SELF PRESERVATION” of their families, countries, economies and their wealth.’
I believe the Fed let the crack-up boom go as far as they could in the late 1970s before big Paul came in (1979) and slammed the door with crushingly high Fed Funds rates. I believe they will play the same hand this go round, and they are currently very near (if not past) the point where they ignite an uncontrollable inflationary spiral, or have to repeat Volcker’s big foot strategy. But I am not an expert — this is just the way it looks to a casual observer.
Kia, outside of the investment banks very few companies have investments in other companies. They happen but it’s not often enough to say most or even many. Most companies that make profits, make them from their core operation (distribution, manufacturing, retailing etc).
Maybe stocks are going up because they are attractively priced. There are still decent values in the market…and stocks are WAY cheaper than homes.
I think it is quite important to pay attention to the amount of leverage that underpins recent stock market purchase activity. Without carefully checking, I believe the current level of leverage may be rather high by historical standards. Any comments?
LMAO! Oh, you’re serious…
“First, it doesn’t always go up.”
Granted, so let me rephrase my question. Why does the stock market always go up (or at least never go down) on FOMC meeting days?
The stock market clearly wanted to sell off on the FOMC announcement, but the angel magically bore it up before it dashed its foot upon a stone…
http://www.marketwatch.com/tools/marketsummary/
“If the froth is suddenly blown off the market and if the churning process stops, or even slows suddenly, all of the brokers’ sins will be revealed.”
KIA, I like your explanation, but it begs a question: What is it that prevents the froth from ever getting blown off the market or the churning process from ever stopping? Is it dark matter? Or the PPT? Or just a peculiar roll of the dice?
Could this be why the Clintons unloaded their stock holdings a couple of weeks ago?
Banks ’set to call in a swathe of loans’-
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/26/cnusecon126.xml&CMP=ILC-mostviewedbox
If this turns out to be true things may start to get interesting…
As a man in a grey suit said on the TV last night, and we’re paraphrasing here, “It’s more accurate to describe Australia as a nation of home buyers than as a nation of home owners.”
http://www.dailyreckoning.com.au/australians-have-mortgages/2007/06/28/#more-1130
There is ample justification as to why median housing prices continue to rise, particularly in Washington DC:
WASHINGTON - Despite low approval ratings and hard feelings from last year’s elections, Democrats and Republicans in the House are reaching out for an approximately $4,400 pay raise that would increase their salaries to almost $170,000.
S&P / Case-Shiller numbers out yesterday show that home prices are falling in DC when measured on a quality-adjusted (repeat sales) basis.
The typical starting lawyer in DC makes around $114K, so I’m not too surprised. Plus DC’s metro system, DC police, and the Secret Service consistenly require overtime since they won’t hire and train more people… so some train operators and police are getting $110K a year and the SS might get close to $150K. Yes it’s absolutely outrageous… and the public is paying for it all. Most politicians in DC can’t read about these abuses in the paper and not feel underpaid.
Beazer fired their chief accountant:
http://tinyurl.com/237f78
“NEW YORK (Reuters) — Beazer Homes USA Inc. said Wednesday it fired its chief accounting officer Michael Rand due to violations of the company’s ethics policy stemming from attempts to destroy documents.”
Uh oh.
Stock is down over 7% today, and still dropping like a rock.
Need to vent…. Thought i would look at a “starter” home here on Long Island thats listed as needing work. Asking price of 390k… i zillowed it and to see the zestimate and learned that they paid 160k for it 4 years ago. I’m really sick of this bullcrap. - liz
I don’t blame you. But now, at least, you know that if you wait long enough (2 yrs tops) the market will come back to you. It’s a long time. But I waited 7 years from 1987 to 1994 before buying, and the result is a much better and easier life.
god i hope so! thanks
“Resucitation of the Zombies” - An interesting article on page C1 of today’s Wall Street Journal about how the Bear Stearns situation may be much like the Japanese banks of the 1990’s. Just keep lending to your problem customers rather than letting them fail - then the banks balance sheet only shows a series of small losses rather than the big losses from failures. I can just see it now - PHM, KBH, TOL, WCI and LEN - all ‘zombies’.
There is no shortage of bear food in the pages of today’s WSJ. In fact, I would almost infer that they believe a credit crunch is already well underway. I guess they don’t want to get caught with their pants down like they were in early 1930, when they completely missed the onset of the Great Depression.
Here is a list of articles w/page refs:
p. A1: Market’s Jitters Stir Some Fears for Buyout Boom
p. A2: Series of tremors threaten to roil placid markets
p. A12 (Opinion page): The Fed and ‘Liquidity’
p. A12: Credit Crunch Time
p. C1: Banks on a Bridge Too Far?
p. C1: Investors Look For Fed to Calm Inflation Fears
p. C1: Game of Buyout Bingo May Be Ending
p. C1: Bear’s Move: A Resuscitation Of the Zombies
p. C1: Some Clouds Are Hovering Over Growth in Earnings
Those p. A12 Opinion pieces are definitely worth the cost of a dead-tree copy of today’s paper. Here is the closing paragraph of the first one:
We’re all for “open-mouth” Fed operations when the need arises. But the Fed’s main obligation is to maintain price stability. No one wants a repeat of the subprime housing bust in the high-yield debt business.
Dear HBB…I never thought this would happen to me…As this topic has come up before on the blog here goes. Yesterday my BF was at home and the sheriff stopped by with a little paperwork. Yes, his landlord is being foreclosed upon. The sale is scheduled for mid-Aug. At this point, my BF has no lease with the landlord ’cause he has been there for years (~4) and has gone month-month (the poor folks upstairs have been there for 10 years). Does anyone happen to know if a person needs to be out by the sale date or do you have ~6 months despite the lack of a lease? He has tried to call a rental rights group but they seemed uncertain due to the lack of a lease. I tried to look up stuff on line but I speak science to legal mumbo jumbo, I get the impression that he could quickly sign a lease (or maybe forego the lease?) and would have the 6 month *redemption period* after the sale. This is all in MN..Anyone?
Yes, you could get tossed in August.
But perhaps not. If the bid is too low, the bank may choose to hold the house, and stable tenants keeping the place up might be a blessing. Same for a new owner, if they are buying as an investment. The bank might even advertize stable tenants to get someone to buy, if the “subprime” debacle and rising interest rates make first time homeowners disappear.
Perhaps you and the other tenant can show up and lowball. Bid two years rent, or less.
I would quit paying rent.
He should ask for his deposit back right now, since the landlord is no longer going to be the lessor, and if the landlord does not immediately return it, he should stop paying rent immediately, as he is unlikely to ever see that deposit again.
DISCLAIMER: Not legal advice, I’m not a real estate guy, and the course of action suggested may not be in compliance with local law wherever you are.
http://www.uslandlord.com/laws/mnstatelaw.html
I don’t know about MN and the above site didn’t address, but in most (possibly all) states, withholding rent from the legal owner - and LL is legal owner until foreclosure goes through - just gives a troubled landlord anl excuse to evict. MN is pretty tenant-friendly overall, though.
WT Economist gives good advice. Also, even in the states with weaker tenant rights, if everything you have can be moved out quick and cheap, why not wait and see? There are cases where tenants have lived rent-free for months.
Hopefully bj’s friend can prove he is a tenant and provide cancelled rent checks or equivalent - that business with the rental rights groups’ uncertainty is very strange to my mind, as I’d expect such a group to have many low-income clients, and a lot of the cheaper rentals are month-to-month. So…I’m wondering if there is something else, like the friend has nada to prove any contract (implied or actual) or rent ever existed.
Well, yes, but the trick is, is a landlord who is about to lose the house really going to incur legal fees evicting someone for the benefit of the bank?
And, again, is that losing landlord really going to return the deposit, or is he going to try to claim that the bank should do that now, and hold out short of getting sued by the tenant? And if the landlord is BK, what should our tenant expect then? Not much I’m guessing.
Maybe our tenant should just contact the bank directly and offer to start paying rent to them as soon as they contact him to tell him that the transfer has occurred?
Anther legal doctrine that might be worth exploring in this context is the right to assurance of performance - not sure to what extent, if any, this applies outside the context of the sale of goods in our friend’s state, whatever that is, but if so, perhaps he should send a letter to the landlord asking them for assurance that the landlord will continue to honor the lease, and that the deposit is being handled in the legally required manner and for any relevant details they should know (e.g., if it is being held in a trust deposit account, for the account number and institution and current balance with interest)? If the doctrine applies here, then if the landlord does not respond assuring that the lease will be honored, and/or that the deposit is being correctly handled, then the renter may be able to suspend his own performance under that lease - something to look into here and/or talk to a lawyer about.
The key here is making sure our tenant does not get screwed out of his deposit, and a secondary benefit, if any, might be getting a little free rent in the confusion surrounding the transfer.
BIG DISCLAIMER: See above.
For what it’s worth, I was recently told by a California attorney regarding Calif. tenancy law that a tenant on month-to-month who resides for more than a year, was then allowed 60 days notice (not just 30).
These days most tenants in most states have more legal protections than they did way back when.. consult a MN RE atty.
Wow, the loss came right out of left field!
“KB Home reports unexpected loss
Homebuilder puts quarterly operating loss at $174.2 million, says it continues to see deteriorating market conditions.”
http://tinyurl.com/2cp6tw
Who would’ve guessed? We’re all going to be shaking our heads in the days to come at how clueless the rest of the world seems to be - Ben has us spoiled.
Update on friends attempt to deleverage out of the RE market in SW Florida. Finally sold one rental home, 3 to go. They had to bring 90K to the closing and it was the least expensive purchase of the bunch. Ouch!
Why aren’t they just letting their properties go into foreclosure?
Good question but I don’t know. I think they are basically responsible folks who are trying to do the right thing.
Saw this on Broker Outpost about my neck of the woods:
“Jude, I second that, great post! The Chicago area though is dropping. Housing in the Chicago burbs has depreciated about 10% in the the past 15 months. And the prices are dropping more all the time. Resale inventory in the Metro area is at a 15 year high. I expect another 10% drop in prices over the upcoming 15 month period, and it could get worse if a lot of mortgage brokers are put out of biz due to new IL mortgage regs. The reason I am so negitive about this market, houses that usually sell in days are taking months. And realtors are not even bothering with open houses or advertising. The market is just plain out of gas now.”
This is what I am seeing also. The exurbs are a disaster, the suburbs only slightly better. The city is treading water right now (about the same prices as last year), but the bust is heading it’s way.
Prices, in some areas, have to drop by much more than 10% though.
from what i’ve seen in chicago, prices are trending downward. and builders are desperately trying to throw up anything that’s still in the pipeline — if they have the money, that is.
saw a well-maintained, classic chicago bungalow in lincoln square (a nice neighborhood, for non-chicagoans) down the street from a friend’s house languish for several months and through two price drops before going under contract. it’s still not a done deal. the reduced asking price was about 400K. i think it was first listed between 435-450K.
across the boulevard from me (i’m in logan square), there are a couple of condo conversions / gut rehabs of small vintage buildings that are dead in the water and have been for months, presumably from lack of funds to move forward. one has had broken windows and garbage issues on-and-off for a while; the other still has renters in it. i’m curious to see if anything happens with either building.
behind me, there’s a big ugly set of new condos that are way, way behind schedule — perhaps by a year. they’ve managed to sell some units but most are unsold. the marketing is pretty aggressive, at least for my neighborhood: signs, flags, poorly attended open houses. no incentives there (yet), but i’ve seen plenty of new construction in my area try the incentive approach as well.
Immigration Bill Goes Down in Flames!
Wow - I truly am surprised. I thought they’d cram this one through the sausage machine this time.
“The U.S. Senate today effectively killed a sweeping immigration overhaul bill, dealing a major blow to President Bush and to a bipartisan group backing the legislation. The Senate was 14 votes short of the 60 needed to cut off debate and advance the bill. Some senators said the vote means immigration reform is “dead” for this Congress.” from cnn news
Colorado has lots of illegals, comments from our senators:
“Sen. Wayne Allard, R-Colo., said the measure was ramrodded to death in an “unprecedented process that excluded the involvement of most Senators.”
Sen. Ken Salazar, D-Colo., said it was poisoned in a “venemous atmosphere” created by opponents of the bill.
It’s not clear that the Senate will be able to revisit the measure, Salazar said, leaving the nation with a system of “chaos, confusion, porous borders, victimization and economic insecurity for ranchers and farmers.”
Allard said the bill deserved its fate.
“Even good-faith efforts to have amendments considered that would improve this bill have fallen on deaf ears,” he said. “This bill is amnesty in its simplest form and the American people demand and deserve better.”
From the Grand Junction Daily Sentinel
that bill was one of the absolute stupidest things they’ve ever attempted..
i think they smelled blood.. their own.
It’s not clear that the Senate will be able to revisit the measure, Salazar said, leaving the nation with a system of “chaos, confusion, porous borders, victimization and economic insecurity for ranchers and farmers.”
Hey Senator, here are some novel ideas, ENFORCE THE FRIGGIN LAWS! BUILD THE FENCE! HIRE MORE BORDER PATROL! PENALIZE BIG BUSINESS FOR HIRING ILLEGALS! HUNT THE ILLEGALS DOWN AND DEPORT THEM! SHOOT THE BASTARDS WHEN THEY TERRORIZE RANCHERS! How’s that for a couple of ideas?
Augur-inn,
Of course, you are right. It doesn’t seem to occur to them that since they fail to enforce the current laws, making new laws is an exercise in stupidity.
Sidenote, Lindsay Graham, from SC, major supporter of the bill, now has to go home and face one angry group of folks in SC. He bet the farm it would pass, and his constituents would suck it up. Wrong. Sucks to be him.
“The mountains are calling and I must go.”
John Muir
Then go!
Hope you get to see the Hetch Hetchy reservoir that feeds SF it’s water - now at only 99% of full capacity (according to the LNAA), higher than it was last year at this time and above its seasonal average.
Have fun!
[LNAA = Lamest major city Newspaper in All of America; aka the San Francisco Chronicle]
Senator Shelby on CNBC…
We shouldn’t raise tax on equity firms (some people call then hedge funds) becuase they are good for the economy. They are the enemies of waste and inneficiency, so they help streamline our economic engine and generate additional capital.
Yeah, they are enemies of waste like pensions, health coverage, wage increases…. They are enemies of inneficiens like having American workers, paying taxes, public disclosure…
Sounds like Senator Kudlow of the United States of Corporate America.
So many people called it crashed the Congressional phone system.
Power to the people!
link?
Excellent!
Here you go:
http://tinyurl.com/3c34xk
I wonder if the Congress will take the hint?
And buy more and faster answering machines?
A few tasty tidbits from our friends to the south.
1) Venezuela
“China Petrochemical Corp., the nation’s second-largest oil producer, is in talks to drill in Venezuela, where ConocoPhillips and Exxon Mobil Corp. pulled out after President Hugo Chavez seized their assets.”
2) Brazil
“Brazil’s central bank raised its economic growth forecast for this year to 4.7 percent from a previous estimate of 4.1 percent in March.”
3) Columbia
“Colombia’s peso bonds gained the most in almost two weeks on speculation the central bank may stop raising interest rates after next month’s meeting.
“Bonds are benefiting from expectations inflation will slow through this year as food prices fall and higher interest rates slow spending,” said Alexander Cardenas, head analyst at Bogota-based Acciones y Valores brokerage. “That will likely lead the central bank to halt rate increases after next month.”
One of the many great things about SA when I was there last year was how much the SA population loved Americans. When I asked my hosts about this, I was informed “The US has not intervened in SA in 7 years.” Brazil is China’s raw ore source and backyard grain basket; China is opening a market for its energy needs with Venezuela; Columbia is an importer of Chinese made goods and an exporter of copper, nickel, aluminum and other metals. Exports have jumped 50% this year.
I remember when almost all of SA was “third world” countries - not any longer. The vast amounts of moneys pouring into the infrastructure of SA cities make us look like pikers.
How much of the Venezuelan oil infrastructure was paid for with the dollars of US companies who had their assets seized by the Venezuelan government… “nationalization” of private assets owned by US companies should be construed as an act of war and we should at the very least seize all Venezuelan assets in the US, if not also blow up those drilling rigs and fields on the way out… let them do without the export monies for a few years while they rebuild.
One of the reasons that the US companies “pulled out” is that pulling out allows the American oil companies to recoup their losses in US court. Venezuelan US assets will be frozen (if not already). Venezuela’s US assets are greater than fair value of what has been seized.
South America has a history of weak private property rights and nationalizing industry. Venezuela is only the most recent case. This has long been an impediment to investment.
True - but for the last couple of decades Brazil has been a remarkable place for investment. This does not mean that it will continue to be a safe harbor. Obviously, other investors and the Bush family believe it will be safe or they would not have recently bought 40,000 hectares in Paraguay. To give an idea of what has happened in South America while the US was printing moneys check out this PBS 10 minute video on youtube.
http://tinyurl.com/2adq2l
Whatever … your buddies were too busy fighting an elective war elsewhere.
Had the owners been Chinese and the US had done the nationalizing, you would be cheering.
Good for the goose, then good for the gander. You’ll never convince me otherwise.
ridiculous
Couldn’t agree more. Cracks me up, all our self-congratulatory back-patting, or being affronted, with no clue how those American “investments” came into being…. Heaven forfend we should actually travel or look farther than the PR handouts published in the media.
Talking about the immigration situation in the USA, look at the corporate sponsors of The Council of La Raza. Notice the banks and mortgage entities? Do you think that the illegals will be the last bagholders?
Institutional Corporate Partners
The National Council of La Raza (NCLR) recognizes those corporations that have invested in NCLR’s long-term strategic efforts with multiyear, multimillion-dollar commitments, including NCLR’s Empowering An American Community Campaign.
The Allstate Corporation
Bank of America
The Coca-Cola Company
Citi
Fannie Mae
Freddie Mac
Ford Motor Company
General Motors Corporation
MBNA Corporation
PepsiCo Foundation
The PMI Group, Inc.
State Farm Insurance Companies
UPS
Univision
Wal-Mart Stores, Inc.
The thing about illegals being the “last bagholders” is that if it comes to that, they will simply drop the bag and vanish. They will probably resurface with a new fake identity, but you can bet that they won’t get stuck hanging on to any bags,
La Raza, from its public statements, is starting to sound like brownshirts by another name.
Am I wrong?
Not at all. They are hard core racists, and I don’t put it past them to use violence to achieve their goals. Which is one of the reasons I would not return to California. Unfortunately illegals are becoming ubiquitous here in Colorado, so maybe someday my alias might become “In North Dakota”
Sorry, my source:
http://www.nclr.org/section/corporate_partners/institutional_corporate/
Lets try this again:
Do you think that these organizations might have a vested interest in seeing the passage of the immigration bill?
http://www.nclr.org/section/corporate_partners/institutional_corporate/
Institutional Corporate Partners
The National Council of La Raza (NCLR) recognizes those corporations that have invested in NCLR’s long-term strategic efforts with multiyear, multimillion-dollar commitments, including NCLR’s Empowering An American Community Campaign.
The Allstate Corporation
Bank of America
The Coca-Cola Company
Citi
Fannie Mae
Freddie Mac
Ford Motor Company
General Motors Corporation
MBNA Corporation
PepsiCo Foundation
The PMI Group, Inc.
State Farm Insurance Companies
UPS
Univision
Wal-Mart Stores, Inc.
This La Raza baby’s come a long way from its grassroots parents…
Funny how their web-page insists La Raza doesn’t mean “The Race”.
That’s exactly what it means. And it refers to the mestizo race in particular. To say that its a catch all for all Latin Americans is baloney. Many Latin Americans do not have any native american blood, and not only are they not “La Raza”, they are considered persona non grata.
Wow, this is so exiting:
“The Federal Reserve left a key short-term interest rate unchanged Thursday and indicated it was still worried about inflation, a sign that the central bank will leave rates alone for a while instead of cutting them despite concerns about a sluggish economy.”
And:
“Stocks rise on Fed’s steady hand
Investors cheer central bank’s decision to keep rates at 5.25 percent.”
Fed’s steady hand! This thing is starting to remind me of Chauncey Gardener. These guys could be sleeping for 2 months and the entire press would still be awestruck if they changed a comma in the meeting minutes to a semicolon, or Helicopter Ben wore a different tie.
With apologies to Scott Adams:
Pointy-haired Boss: “So Wally, what have you decided to do about task #1?
Wally: “Nothing”.
Pointy-haired Boss: “Great job, Wally!”
Asok: “My hero!”
Everybody: “Hooray!”
AP - UN says half of the world’s population will be living in urban areas by the end of 2008.
FYI - Utah is listed as one of the top urban states in the nation- most people there live in the City of Saints (Salt Lake, though I think of them more as part-time saints - LOL)
What’s the deal with land auctions in San Diego? Builders getting rid of excess inventory? I’m not surprised to see late night commercials on infomercial TV or even full-page ads in the UT, but I just went to a deli, and they had the 3 minutes commercial running on one of the “normal” channels. That must cost some serious money.
BTW, the commercial is hilarious. Lots of “testimony” from lucky auction winners. Definitely two thumbs up.
Does anyone know where I can find some data on current mortgage rates by FICO score?
Lawrence Yun essay - It’s the media’s fault and there’s no price correction (or the musings of a paid liar):
http://tinyurl.com/2q3xkn
“To a great extent, we can thank steady media coverage of the real estate market “correction” for unfounded consumer concerns.”
” If there’s a correction in markets today, it’s in home sales volume and housing starts, not in home prices.”
“When today’s consumers look at real estate markets, they need to use the same analytical approach as investors in the stock market. Those buyers aren’t generally concerned about the volume of stock trades on a given day. Why should they be? They’re focused on price trends. And by that measure, now is a great time for consumers to be in the housing market: Prices have steadied, and inventories are healthy. ”
Prices appear to have “steadied” only in the lagging markets and maybe with the highest end properties in each market, everything else seems to be falling. Since when is a few years supply, as in some markets, “healthy”?
More from Lawrence Yun:
“But there’s no real correction where consumers are concerned. Yes, home price appreciation has slowed considerably, and nationally we’re expecting a price drop of 1 percent for 2007. But that drop comes at the tail end of a five-year spurt that increased home prices by 53 percent. We may have taken one small step back, but that’s after taking 53 steps forward.
Even a relatively large price decline, such as the 12 percent drop we saw in Sarasota, Fla., cannot reasonably be called a correction when that market had a 150 percent price increase during the boom.”
*******
OK Larry, you’re right.
Instead, let’s say we are just starting to undergo a correction.
And when things correct to below the mean several years (at least) in the future, a lot of people who listened to you will be wondering what it was you were telling them.
Thanks to those who have offered insight on the landlord foreclosure problem. I am a VERY infrequent poster (frequent reader) but will post if anything interesting should come about from this.
Subprime debacle spreading
“Kia Motors Corp., Korea’s second-largest automaker, postponed a dollar-denominated bond sale as concern over losses linked to U.S. subprime mortgages increased volatility in financial markets.
The automaker, which attempted to raise about $500 million, shelved its debt sale a day after Kuala Lumpur-based MISC Bhd., the world’s biggest owner of liquefied natural gas tankers, canceled a $750 million offering…”
June 29
Joong Ang
http://tinyurl.com/3a7tyo
As Calculated Risk noted, the containment is contagious.
And that sucking sound of liquidity drying up is growing louder every day!
And you all thought China’s surplus was large!
“Dubai: The Gulf countries’ current account surplus is expected to reach $3 trillion this year due to the high crude oil prices, said Ahmad Humaid Al Tayer, Chairman of Emirates Bank Group, yesterday.
Delivering a keynote address at the opening session of the International-Arab Banking Summit 2007 ‘Euro-Arab Banking Dialogue’ in Brussels yesterday, Al Tayer said the revenues of the GCC states have surpassed even those of China’s huge foreign reserves, to register a record $1,600 billion in foreign assets.
“Given the huge inflow of cash due to higher crude prices, the current account surplus of the six Gulf countries will soon touch the $3 trillion mark,” he said. …
…”The mega projects, in infrastructure development, hydrocarbon industry, airline industry valued at over $1 trillion, are far too large for the National banks to take on their balance sheet,” he said….”
http://tinyurl.com/37uw2x
Gulf News
June 28, 2007
It is fascinating that the gulf states with a population equaling Wisconsin are spending 1 Trillion dollars this year on their infrastructure and the US has an infrastructure deficit of 1.6T. More blackouts in New York and California, more flat tires and broken axles on the Chicago highways, fewer garbage pickups, poorer water and sanitation; The US is broke.
Infrastructure 2007
Urban Land Institute & Ernst and Young
caution 69 pg pdf
http://tinyurl.com/2lokur
“The US is broke.”
Nonetheless, I predict we will continue spending ourselves into oblivion, while BB continues to blame our negative savings rate on overzealous Chinese savers.
“Kushner Cos., based here, is under contract to sell most of its multifamily portfolio, amounting to 17,628 apartments in five states. The news comes just eight weeks after the portfolio of 18,500 units in New Jersey, Pennsylvania, Delaware, Maryland and New York went on the block.”
Globe Street
and more on Kushner
” During the past 25 years, Kushner became one of the country’s largest private holders of residential real estate, building a portfolio worth several billion dollars. He also became a political power broker, donating hundreds of thousands of dollars to the state Democratic Party.
Kushner’s donations ultimately sparked a federal investigation, which led to him plead guilty in 2004 to witness tampering after he hired a prostitute to seduce his brother-in-law and sent a tape of the affair to his sister. He spent nearly two years in prison. ..”
Star Ledger
The guy is scum, but he is another one that got out while the getting out is good.
A theory being promulgated on the Commercial Real Estate news sites is that the impending subprime disaster (foreclosures and resets that have not occurred yet) will result in higher rental prices provided they are “quality units”. Any thoughts on that?
Another one bites the dust…
Another one bites the dust…
London fund latest subprime victim
By FT Reporters
Published: June 28 2007 11:41 | Last updated: June 29 2007 01:44
The retreat from risk in global credit markets gathered pace on Thursday as investors demanded stricter terms for high-yield bond issues and a London hedge fund said it would wind down after suffering big losses on US subprime mortgages.
Caliber Global Investment, a London-listed fund, said it would sell its assets and return capital to investors after a review found “insufficient demand currently” for exposure to the subprime mortgage market. The review was triggered by an $8.8m (£4.4m) net loss from subprime investments.
http://www.ft.com/cms/s/c9786cb6-2560-11dc-b338-000b5df10621,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2Fc9786cb6-2560-11dc-b338-000b5df10621.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Inflation worries grow, and the Fed shrugs.
US inflation worries grow
By Daniel Pimlott in New York
Published: June 28 2007 15:19 | Last updated: June 28 2007 17:03
Inflationary pressures in the US were greater than previously thought in the first three months of the year, according to data which also showed that the economy grew at its slowest pace since 2003 over the period.
Personal consumption spending excluding volatile food and energy costs, which Federal Reserve policymakers considers a key measure of inflation, was revised up to an annualised 2.4 per cent level of growth from a previous estimate of 2.2 per cent, figures from the Commerce Department showed on Thursday.
http://www.ft.com/cms/s/22e289f4-2574-11dc-b338-000b5df10621.html