Bits Bucket And Craigslist Finds For August 18, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Quentin Hardy, Forbes reporter in Silicon Valley, calling so called free market capitalist Kudlow on his hypocrisy in demanding a federal government bailout in the current credit/mortgage crisis essentially saying that when millionaires get in trouble it’s time for the government to help.
http://tinyurl.com/2v98fl
Thank you I missed that. My poor wife had to listen to me rant yesterday about “free market capitalism”. Kudlow and his “mentor” Arthur Laugher are a bunch of hypocrits.
I want my…
I want my PPT . . .
You know the little guy is in dire straits when the too big to fails get there money for nothting.
http://www.youtube.com/watch?v=hDpMqKSrr7Y
and chicks for free….
tee hee!
no 6%
Improved lyrics over here.
Thank you I missed that. My poor wife had to listen to me rant yesterday about “free market capitalism”. Kudlow and his “mentor” Arthur Laugher are a bunch of hypocrits.
Yesterday people were asked to text in their opinions on the discount rate and the Fed. One guy’s was printed onscreen and he said exactly the same thing you’re saying.
This was on CNBC.
“The look on Kudlow’s face was priceless and he had absolutely no reply.”
Fantastic! Someone posted an article yesterday that called out the FED for their corporate/millionaire welfare, on the taxpayer dime. I’m sick of it. The gov is completely poisoned by the influence of money and doesn’t work for the people.
The gov is completely poisoned by the influence of money and doesn’t work for the people.
Absolutely right, Palmetto! But you cannot expect anything else today. And it will be only worse in the future. Maybe crash landing will help
Hey..They keep the profits and we cover the losses. What’s wrong with that?
Nothing wrong with that — it is a core HBB theme!
“Privatize profits, socialize risks.”
yeah socialize for the corporations not the people most in need, the poor, the mentally ill, the sick, the old.
the children and the war vets
That’s what the Fed is today, a bailout agency for banks, GS, JPM, etc. I’d like to ask Kudlow where exactly the cash came from - of course, it was just created out of thin air, which is called inflation.
Providing cash (they call it liquidity) to prevent the markets from seizing up - bullsh_t, there is always a bid or ask for a security, it’s just that the big guys don’t want to eat what they have sown.
touche!
Yeah, FEd Gov’t welfare handouts to Wall st, big banks, agri-business,big oil(subsidies),ect. And at the other extreme, freebies to the lower impoverished welfare classes. Only the hard-working middle classes get screwed by the gov’t at all levels via taxes,fees, accessments,traffic tickets,mel-roos,rising utility bills, rampant inflation,ect.
The hard-working middle classes are the backbone of the community and the US, but they are the ones who get screwed in out current capitalist/quasi-socialist system in which if you are an impoverished unskilled illegal or section 8 welfare family you get ton’s of gov’t freebies and if you are a big wealthy influential corporation or bank you also get ton’t of Gov’t feebies.
We are on the way toward becoming a latin american banana republic with a few super- rich at the very top and a vast impoverished gov’t-subsidized welfare-class at the bottom rung and a diminished insignificant middle class.
This isn’t true at all. There have been calls for a bailout, but so far everything is short term loans. This is like telling your rich friend that they can’t afford all the luxuries they have, so here is some money to tide them over while they sort it out. If they aren’t in trouble then they won’t even take the loans because this money has a stigma associated with it. Even if they take the money and fail it will still come back to the Fed.
As for the hard working middle class, we haven’t needed button pushers for a while. That means the test for the hard working is education, and if you aren’t making it then you aren’t as hard working as you claim. See? This tough love stuff goes both ways.
The poor don’t have any massive handouts. That spigot started to be shut off by Reagan in the early 1980s when we saw the broad resurgence of hunger in America which had until that time been essentially wiped out. Bill Clinton replaced welfare with a back to work program. Now poor people don’t get much except food stamps that aren’t enough on their own.
Acting like this distribution of wealth is something bizarre and catastrophic makes no sense. Wealth has always been a power rule distribution with the rich having nearly all. The middle class of the early industrial age was a freak thing that is unlikely to be repeated.
Do you see wealth heading toward a pre-early industrial age distribution?
> The poor don’t have any massive handouts.
Time to put Wall Street on the equivalent of payday loans.
“The poor don’t have any massive handouts. ”
30% of all recent green card(leagized to work) immigrants in CA, and a fair no of illegals using fake doc’s, now are on medi-cal. Immgrants both legal amd illegal are by CA law give free ER treatments. LAUSD is spending 10’s of billions of Bond monies contructing at least a dozen new primary schools in bombed out ghettos areas of LA for Children of illegals. WHat do you call CA healthy families initiative but a gov’t subsidy for immigrant’s children.
Immigrants. both legal and illegal, get $10,000 + per year worth of Gov’t freebees:free public shooling, Welfare, medi-Cal subsidized low- cost/no cost clinics, gov’t subsided metro rail/ bus system, ect,. I say that CA is a gigantic ATM machine for illegals and legal green carders to sponge on the generousity of CA taxpayers.
Not to mention that 10’s of billions per year of EIC cash payouts going to immigrants, including even to illegals using fake doc’s, average $1000-3000 per payee
How about section 8’s and fake disabilty claims. Virtually every family/slackoff across the street from me is either a section 8/fake disablity/med-cal sponger-often all three at once, including a fair no of impoverished immigrants with gang-bangin offspring.
Mole man likes to post in a grand, argumentative style, but the substance is usually a little uninformed. I.e.
“The middle class of the early industrial age was a freak thing …”
Since the early industrial age was the early 19th century, with the concommittant social dislocations first seen in
England, this is a little off-subject. He is probably trying to refer to the post WW2 era of prosperity in the US–and with much of the rest of the industrialized world in ruins, we did have a head start.
Also, quantifying middle class is tough–thru much of the 60s, manufacturing workers enjoyed salaries comparable to middle-managers, and there was a solid basis for prosperity.
The widening income gap has been documented by the Census Bureau, and is not in dispute.
The welfare benefits, handouts, special programs, housing subsidies et.al. available to those who claim poverty–whether citizens or illegals, is real, visible and not in dispute.
And at the other extreme, freebies to the lower impoverished welfare classes. Only the hard-working middle classes get screwed by the gov’t at all levels via taxes,fees, accessments,traffic tickets,mel-roos,rising utility bills, rampant inflation,ect.
It’s just wrong to imply that we should have more pity for the middle class than the poor. Part of the economic problems in this country is that everyone is too damn greedy. I don’t begrudge my tax money spent on programs for the poor, I rather be the giver than the receiver. I don’t view myself as “screwed”, compared to a welfare family who will probably never get out of the misery….they are truly “screwed”.
Spoken like a person who has never been held up at gunpoint by another with nothing to lose.
I work in a low income, gang bangin, dope dealing neighborhood. I know more about it than you.
It only delays the inevitable and will make it that much worse.
Would you like to die quick and start all over?
Or would you rather die the death of a thousand papercuts over a long drawn out period?
Would you like to die quick and start all over?
Or would you rather die the death of a thousand papercuts over a long drawn out period?
Depends on your age
“My plan is to live forever. So far, so good.” –Steven Wright
Here is a Tin Foil update that I found interesting. It also covers an ongoing petition effort to quash the North American Union. Lots of interesting speculation as well (please read if you are of a draftable age!).
http://www.urbansurvival.com/week.htm
Alex Jones covers this topic regularly both via articles posted on his site and his radio show. In fact, it’s a rare day that he doesn’t discuss the NAU on his show.
Infowars
The military is freakin’ deperate now.One of my daughter’s friends got a sign on bonus of 15 thou to be an MP. 15 for an MP? *shakes head* My oldest daughter got 15 thou when she signed up as a linguist (intel)for 5 years in 99 and they offered her nothing to reup. Zero, zilch, nada of course that’s cause she was Army and Air Force was giving 40k to reup. Anyway, they’ve been sending her letters to report for the last couple of months and telling her she needs to renew her clearance.
Cannon fodder is just like any other commodity, valued based upon demand…
What amazes me is the average Joe doesn’t see the criminality in how these supply side, tax cutting idealogues operate. So often we hear much tax whining by J6P on behalf of the priveleged wealthy elites. Some are seeing through the smoke and mirrors but not nearly enough to incite grassroots movement against these liars.
What amazes me is the average Joe doesn’t see the criminality in how these supply side, tax cutting idealogues operate. So often we hear much tax whining by J6P on behalf of the priveleged wealthy elites. Some are seeing through the smoke and mirrors but not nearly enough to incite grassroots movement against these liars.
People Are Smart
people are big dumb dangerous animals.
Interesting chart.
http://bigpicture.typepad.com/comments/files/RMBS.gif
I have been getting more frequent calls at home from my bank (chase), asking “how I am doing” and whether I am going to be interested in a mortgage. Are any of you all getting similar sales calls?
My hunch is banks are going to agressively court customers with cash and good credit — because they are the only ones who can get loans now. Anyone else see this? Makes me also think I’m in a good position to negotiate when the time comes..
It’s probably because there are more loan brokers out there than customers which gives the loan brokers lots of idle time to solicit prospective customers.
I wonder how the average person with CAGC feels about buying a home now. Do they view housing as still being overpriced or feel that there is a buyer’s market right now? Certainly, this sentiment will vary by location, but does anyone have any insight?
I’m in Charlotte, NC. This market didn’t have the runaway train appreciation like Florida, NoVa, California, etc.
Right now I’m looking at a SFR that’s priced near the seller’s 2003 acquisition cost plus improvements (carpeting, upgraded kitchen).
This morning the Charlotte Observer, the local newspaper, reported that year-over-year, July contracts are down 10.5% and July closings are down 14.7%.
I’m actively looking, but I also recognize that 20% down and an 800+ FICO score puts me in the catbird’s seat.
I’m cautious right now, and sense that the market has really cooled since June.
For the right house at the right price, I may go ahead and pull the trigger.
You might want to wait until the mortgage-freeze effect shows up in the market. Whether or not there’s been a run up in your area, the availability of money is going to have a profound effect on financing a home.
But is there a credit crunch if you are buying a house and can meet Fannie/Freddie conforming mortgage standards?
Now, Ol’ Bubba didn’t say if he’ll be seeking a loan under 417K but has anyone read of problems if you: put 20% down, want less than 417K, have good credit, and payments on all your debt will eat up less than 36-40% of income? I haven’t.
But is there a credit crunch if you are buying a house and can meet Fannie/Freddie conforming mortgage standards?
Yes. Because a sizable fraction of loans smaller than $417K were recently done with less than 20% down, or stated. That cheap money is gone, so there is less demand. Prices will equilibrate to the new reality.
Ol’Bubba -
I’m in Atlanta and in a similar position with 20% down and 800+FICO. However, we are waiting. I agree with JP. When the tightening of credit and qualifications finally hits the market, very few people will be able to qualify. Then you’ll see prices plummet and houses on the market languish.
I’m looking at homes in the $180-210k range, so financing would be well under the Fannie/Freddie 417k ceiling.
I agree with you, atlanta_renter, that things can only get better once credit tightens up. I really feel that once the weather cools, and sellers are facing a long winter ahead of them, that they’ll be willing to deal. You always get a better return for your money when there are fewer buyers.
That said, it’s a matter of choices and preferences. My thinking is that if I find something I like at a reasonable price, go ahead and get on with life.
“My hunch is banks are going to aggressively court customers with cash and good credit ”
You got that right. Hopefully, the overcapacity in mortgage lenders get burned off and the remaining lenders have a big enough piece of a smaller pie that there isn’t too much temptation to commit fraud, on loan applications. Although, I think there are going to be enough desperate mortgage brokers for some time, that will be doing anything they can to get a deal done. There’s been so much lying, going for years, some of them think it’s normal. Make them desperate, then watch what happens.
And their is plenty of mortgage money available. For people with down payments and good credit who aren’t borrowing to much relative to their income. The complaining we’re hearing about is the high risk junk, that created the problem, can’t get funded. Some people are acting like it’s a god given right or law of nature that anyone who can fog a mirror should be loaned any amount of money they want. There are government programs to assist low income responsible people buy homes. Middle income and higher need to put in a down payment and show that they are financially responsible and low income people have government help, so where’s the problem? Another point to consider is that as house prices fall, a persons down payment will increase, as a percentage of the total price. A drop in prices will actually make a lot more people qualify and make more loans conforming to Fannie and Freddie standards. Stability and confidence in the mortgage bond market will come from stricter lending standards and, lower home prices resulting in lower debt to income levels.
“…so where’s the problem?”
vmaxer, greed is the problem. If you exclude this component, then everything is fine with your plan.
It’s really not hard for a middle class person to put aside savings. Just put away a certain percentage per paycheck, *before* you spend anything else. Before you know it, you’ll have a nice chunk of $$$.
What’s the general feeling around here on high-interest savings accounts, like ING Direct, HSBC Bank, etc? I know they are FDIC-insured.
People should avoid mortgage companies at all costs. They get their loans from the banks and the middleman fees can be astronomical. A bank might charge you 1200-1500 closing costs and a mortgage company’s will be 3000-4000. The mortgage originators didn’t go into that field to make peanuts. No one paid much attention when it was added into the loan, but now everyone that has to pay it out of their pockets will sit up and take notice.
The world needs sign spinners, they can still be center of attention.
Yes, I just received a letter from GMAC. I have a loan on a house which is about 25% LTV……well, 32% LTV now… and GMAC sent me a 4 page computer generated letter on the 12 different ways I could refinance and change my situation. Of course my loan rate is 4.75%, so why would I ever change that one? It was a waste of paper for GMAC, but very telling about the market, when a company will develop that kind of sales piece.
I have a paid for house, good credit score, and little debt. For the last several years I would get home equity ads from the bank my loan is with and from the credit card companies I have cards with. (I’m on the national do not mail list, so I don’t get as much junk mail as I used to.) However in the last month or two I haven’t gotten anything, so it makes me wonder who else is in trouble. Our bank is stable, but I wonder about citigroup, which is one of my cc.
“have a paid for house, good credit score, and little debt. ”
I have the same situation. 93 % equity in a home, 700 fico, low debt. Used to get 2-3 CC credit offers daily mostly for 0 % teaser loan balance, transfer rates good for 6 month to a year+. Have 7 CC’s from the top major banks with
this post got cut off. To continue on, I have 8, not seven, CC’s from top banks(Citigroup, B of A, Chase, WaMU, HSBC, US Bank are the main six, plus two minor cards), with low balances on all of them, and used to be inundated with CC offers from them and from scores of other CC companies, as well as offers to finance my home. Last month however the offers have stopped coming, and two CC offers i accepted to lower my rates have not gone thru. The unsolicited credit card offers have virtually stopped, though i can still get a HEloan/mortgage anytime i want if i actively seek out loans.
Looks like the days of banks just throwing loans out there via Mass mailings nave stopped, another sigh of the credit contraction occurring all over the US Ecomony. This wiil hurt businesses and companies big and small requiring Lines of credit to meet unexpected expenses. Look for major business contraction, and resulting layoffs of bottom rung employees, a prelude to a recession.
Easy Credit availablilty is the lifeblood of the economy: without it the economy collapses/shrinks. No expansion, no new hires, cutbacks in outlays, leading to further layoffs/ cutbacks in employee payrolls. I see a 1980-81-like sharp recession around the horizon.
My house is 100% paid off, yet I get ads from banks & mortgage brokers trying to sell me a refinance plan or a mortgage.
We’re renting, and even we get solicitations to refi our mortgage.
The Quants Explain Disaster.
How interesting……..
http://bigpicture.typepad.com/comments/derivatives/index.html
Good stuff, footie. I enjoy your posts. Was it you who posted that article (I think it was Fortune) where the author called out Bernanke and the FED for bailing out DaBoyz with taxpayer money? If so, could you post it again?
Any stories out there on Countrywide bank run? Did everyone pull their money out yesterday?
That’s what I am interested in. This bank run will be difficult to quantify quickly as it is probably being carried out online and on the phone
Anyone remember this bank run from recent history?
Not yet, but they are working on it
http://www.latimes.com/business/printedition/la-fi-countrywide17aug17,0,5944637.story?coll=la-headlines-pe-business
It was non stop at the Irvine office on Thursday. The people working there looked beat. Phones ringing non stop. Corporate exec. in office having constant discreet phone conversations in the corner and in general just observing the situation, god forbid that she would actually help the lowly workers with customers. When I finally was helped around 1:00 pm the guy helping me made an off the cuff statement that if this kept up, they would be out of deposits in 2 days. He said all of there other offices were going through the same situation. Non stop wire transfers. We joked that everyone at there main bank will be working around the clock for three days just to get out all of the wire transfers.
Furthermore, as reported by Mish, “But that is nothing compared to the grand total cashout of $536,348,378 (by Countrywide CEO Mozilo). Where else but the USA can you make a half billion dollars running a company into the ground?”
This is funny:
“Another dealer announced in a cheeky e-mail the creation of a new structured product: a Constant Obligation Leveraged Originated Structured Oscillating Money Bridged Asset Guarantee, or COLOStOMyBAG. One trader noted on the product - a parody of the increasingly bizarre acronyms that have become commonplace in the world of structured finance - “It’s basically full of shit.”
Other traders described a new quantitative trading method - one of the complex mathematical models de-signed to profit from pricing inefficiencies in the markets - otherwise known as a “dartboard”.
Made my day, txchick. DaBoyz trading a bunch of worthless crap. And then crying to the FED and the gov for real money.
In fact, a case could probably be made against DaBoyz for counterfeiting.
My feeling is that the only difference is the government seal on the Fed notes. It is a matter of honest weights and measures. The third key characteristic of money is as a unit of measure. Our Fed notes cannot be “measured” except against other equally counterfeit-like notes issued by other nations. That’s why the parts of the Constitution that deal with money deal strictly with establishing gold and silver as tenders, establishing the “dollar” as the unit of measure (a dollar being a silver coin of the same size, weight as the Spanish “Pieces of Eight”), and giving Congress power to regulate the value of foreign coins against the dollar.
BTW, the reason why stock prices were measured in 1/8 increments until recent years is because that’s how you divide a dollar - into eight pieces, “pieces of eight.”
“Our Fed notes cannot be “measured” except against other equally counterfeit-like notes issued by other nations.”
Completely untrue. You can easily exchange federal reserve notes for silver. That’s how we know that $1 = $12.
“Our fed notes cannot be “measured” except against other equally counterfeit-like notes issued by other nations.”
Our fed notes are measured by what they can be exchanged for, which is most everything. This is what gives them value.
95736 Republic
palmetto - do you all think that we have real $ anymore? I think my dollars are fairly good to start a fire in my fireplace. Paper $s are increasingly worthless…
Dollars, or any fiat currency, is only as good as the confidence of or in the issuer. In a sense, dollars are backed by the production, the goods and services, any store of value. Believe it or not, there is still value in the citizens of the US, much as the gov and DaBoyz have tried to degrade us. That’s where the “real money” to bail out the worthless carcasses of DaBoyz comes from. Tech people, those small businesses that are still able to operate, etc. We’ve still got something here, otherwise “they” wouldn’t still be stealing it from us. WE are worth far more than THEY are and it behooves us to at least try to do something about it. WE are the many.
“Believe it or not, there is still value in the citizens of the US, much as the gov and DaBoyz have tried to degrade us.”
Americans have never laid down in the face of a challenge. After all we aren’t the French facing Nazi Germany.
“Believe it or not, there is still value in the citizens of the US”
To keep the debt machine greased, Paulson is traveling to China and he’s giving them a sales pitch:
“Here’s a picture of JoeSixPack sitting in his office. He’ll work really hard and we’ll tax the crap out of him over the next 20 years. And we’ll use those taxes that we took from him to pay the interest on these Treasuries (IOU’s) that we’d like to sell you.”
Problem is, Joe doesn’t work in an office, he works at the welding shop. Joe’s a big guy (nicknamed “Hoss”) and he’s getting real tired of paying everything he earns to the gubmint so they can give the illegals free everything. He’s also getting kicked out of the house his wife Wilma “made” him buy, they’re getting foreclosed on next week. Joe’s about to go ballistic, he joined the Utah Unorganized Militia at Miss Fitz’ Bar last night. Joe has a breaking point, it’s near, and things with Joe are about to change.
I thought Bonanza and The Flinstones were two different shows.
Luv,
Jen
LOL!
PALMETTO FOR PRESIDENT!
Remember Margaret Mead …
–
M.B.A., would you be kind enough to mail your paper $s to me. I will send you a truck load of firewood from my property.
Jas
You sir are exactly right! Why don’t you just PayPal those worthless $s over to me and I’ll get rid of them for you?
Reminds me of my days in the tax departments of NYC law firms. We used to come up with our own acronyms for future tax legislation (TIPRA is so boring). I can’t remember what they stood for, but MOTHRA and GODZILLA were my favorites.
txchick,
I know you were looking for a blog covering the legal stuff…this one just won another award…mortgagefraudblog.com.
I went there. Now I found out what kind of crap the FED is holding as AAA rated MBS LOL!
According to the Superceding Indictment, Miller targeted homebuyers with credit problems and little to no downpayments. The homebuyers would apply for loans via Miller‘s financing company Associated Capital and Associated Finance. The loan applications were submitted to federally insured financial institutions across the nation using inflated appraisals. The object of the conspiracy and scheme to defraud was to enrich the conspirators by manipulating homebuyers, manipulating appraisals and submitting materially false and fraudulent loan applications to obtain loan proceeds from federally insured institutions.
From the WSJ:
Mortgage Fraud Is Prime
Prosecutors Hunt Down Scams Amid Foreclosures
Amid a jump in the number of foreclosures, federal and state prosecutors have stepped up efforts to crack down on mortgage fraud.
The scrutiny by prosecutors comes as the housing industry undergoes a shakeout, further exposing fraud schemes said to be as rampant as ever.
Federal prosecutors in a number of jurisdictions — including Houston, Los Angeles, Phoenix and New York — have indicted dozens of mortgage-industry professionals in recent months for their roles in a variety of alleged scams that were operating as recently as June.
Under Scrutiny: 1,200 Cases
http://online.wsj.com/article/SB118738294512001287.html?mod=hpp_us_whats_news
Amid a jump in the number of foreclosures, federal and state prosecutors have stepped up efforts to crack down on mortgage fraud.
We’re going to need one h*** of a lot of prosecutors in the next few years.
These guys filed for Chapter 11 late Friday night…
“Sentinel Management Group Inc., a cash-management firm which froze client withdrawals three days ago, filed for bankruptcy after a judge sought to block it from selling assets to hedge fund company Citadel Investment Group LLC.
Sentinel, a Northbrook, Illinois-based firm that oversees $1.6 billion, stopped the withdrawals Aug. 14, causing brokers Farr Financial Inc. and Velocity Futures LP to sue.
Farr claimed the freeze blocked access to client funds. Velocity, joining the suit today, sought to keep its own clients’ assets from being sold to Citadel because the assets are being sold at a 15 percent discount. The assets may have already been sold, lawyers for both sides told U.S. District Judge Ronald Guzman today in Chicago federal court. (per Bloomberg).
“Velocity, joining the suit today, sought to keep its own clients’ assets from being sold to Citadel because the assets are being sold at a 15 percent discount. The assets may have already been sold, lawyers for both sides told U.S. District Judge Ronald Guzman today in Chicago federal court.”
Wait, who is selling what here? I’m not understanding something. Did Velocity have their assets placed in Sentinel and was Sentinel selling those assets without their permission?
I’m telling ya, these funds and their derivatives suck up all the oxygen.
Don’t sell Don’t sell. We don’t need to know how much this worthless paper is worth.
Hold it because the market will turn around soon. So what if the FED injects liquidity, there is still no buying a selling. Oh wait, is the FED loaning out 100% for MBS as collateral? Well sign me up.
Report from New York:
OK, I don’t really have a report from New York, but I have a few observations. First of all, there are a lot of houses for sale in my friend’s neighborhood on Long Island. Not two or three on every block, but enough to really notice. You can’t really analyze that sort of thing in the city itself. There are always plenty of pictures of available units in the windows of the real estate offices, but people don’t hang “for sale” signs from their windows.
But there is something else. I’ve had a chance to observe what it starts to look like for people who are truely comfortable and/or wealthy to pull back. My friends aren’t wealthy in terms of owning huge assets outright or expecting inherited money, but they have a very large income. I don’t think they are expecting a recession, but there is a feeling of not spending as freely as they might. She refused to buy steak at the supermarket because the stuff she wanted was $11 a pound. They both work very long hours and the house and yard are a mess, but they don’t have anyone to come in and clean or look after the yard, not even once every two weeks (which is what she used to have before they met). She is concerned that the water at the house is damaging her hair, but isn’t doing anything about it except worry a little. This family can easily afford their $750K mortgage - easily, and they put down about 25%, but they are not embracing the lifestyle of people with that sort of money.
Now, you can’t read anything about feelings of doom among the high salary crowd into this. It is as much personality as anything else. These are my friends and I love them dearly. They weren’t pretentious about money when I met them and they still aren’t now that they have a lot more, but there are a few things I would expect a family with that much money to do in these circumstances (put in a water softener, hire someone to do the yard maintenance or a house cleaning one every few weeks, buy the meat they want) and they just aren’t doing it.
My brother and sister-in-law are an entirely different matter. She is from a wealthy family and owned their two bedroom co-op outright (parental gift) before they met. But they have very middle class salaries for the city and are living this year just on his and half of hers so she can stay home with a new baby. This is the picture of New Yorkers pulling back. They aren’t spent thrift by any stretch of the imagination, but New York is an eating out town (partly a result of microscopic kitchens). They are eating out much less even though her mother is available for babysitting duty. They are still ordering in sometimes, but I get the idea that they are doing less of that too. She wants my brother to use a left over chunk of money on a gift certificate at a high end store because he needs a few shirts and why not get them free? He could easily get the shirts someplace cheaper and leave the high end shopping to her for something optional, but she would rather not spend any extra money on the shirts. Also, she was pissed that he got the family membership at a museum rather than the single one which allows the person to comp in a guest every time. They are starting to watch dollars (not pennies).
Oddly enough, neither family seems to be pulling back much in terms of travel plans. They are still planning trips, though they may spend less than they normally would on the ones they are planning.
These are very atypical families, but that is where I see New Yorkers and New York commuters pulling back first when they start to do it: food - especially restaurant meals, shopping as entertainment, personal care. Not much different than anywhere else. But it will devastate the lower middle class in the city. It may have a very strong impact on the young artistic class too - the wait staff at night/go on auditions by day crowd.
Oh, and a quick review of Midsummer Nights Dream at Shakespeare in the Park. It was OK - there were a few really brilliant director’s moments and pretty compentent acting. Titania’s fairies were mostly small children (9-11) which I don’t like, but if you are going to do it, dressing them up like the Edward Gorey’s Ghastly Crumb Tinies is the way to go. The whole cat fight between Helena and Hermia was wonderful. Oberon did a good job, but his relationship with Puck was entirely undefined (a great sin in my book). The mechanicals’ play was one of the best I’ve seen, especially the bits with the wall and the moon. Cudos to the staff for pulling the whole thing off after the rain let up. The set was boring, but not bewildering and the music was just nasty. Overall reaction? Go (it’s free after all), but don’t be devastated if you miss it. One plus? They passed out free CD’s of the music from a movie of As You Like It that is premiering on HBO on Tuesday to everyone in line. New York is a serious target of viral marketing.
The gold exhibit at the Museum of Natural History is nothing special.
dressing them up like the Edward Gorey’s Ghastly Crumb Tinies is the way to go
LOL. Theatrical brilliance.
You made me miss NYC with that one little comment.
Thanks. Going back and reading the post, I’m surprised anyone actually read that far down.
I have got to learn to break up these posts.
Off to see a musical version of The Winter’s Tale this afternoon at the fringe festival. Company from Edmunton. Should be fun.
I’m surprised anyone actually read that far down.
I have a long attention span, and it’s Saturday.
Off to see a musical version of The Winter’s Tale
Wow, you are obsessed with the Bard. You know, there’s been a few other worthwhile plays since his passing.
Really?
Absolutely. Shaw had a few good ones too.
The show was wonderful. A little rough, but you expect that at a fringe festival.
I read it all. I think everyone is interested in how ordinary people are coping and spending in these crazy times.
me too, read the whole article. the reviews and everything. I’m a transplanted new yorker living on the left coast and get back to ny at least 4 times per year. love the town and love the theatre. thanks polly, keep the reviews coming!
Watching friends on Long Island, I’ve noticed a lot of stay at home moms getting odd jobs all of the sudden. And a noticable drop in kiddie birthday parties. I know that sounds inconsequential but if there is one thing about LI middle-class moms…they spare no expense when it comes to their kids and there is a silent competition, in every aspect of their children’s lives, on who is more original, more grandiose, more special, than the next.
These same friends sent their daughter to the Y’s summer camp instead of the one connected to her pre-school. I didn’t even mention it because, honestly, saving $100 a day in exchange for packing your kid’s lunch for her seems like a no brainer rather than cost cutting measure, but you have a point.
Oh, and the Y camp is no slouch - they have horseback riding at least once a week for 3 year olds.
“there is one thing about LI middle-class moms…they spare no expense when it comes to their kids and there is a silent competition, in every aspect of their children’s lives, on who is more original, more grandiose, more special, than the next.”
The silent competition you speak of I see really on the family level. Although, the mom’s do tend to lead the charge. It’s really kind of sad. Their whole existence and self worth is tied to how they see them selves relative to others. Their doomed to perpetual dissatisfaction, as there will always be someone else with more. I find it important to pay attention to those with less, like the homeless man on the street. It gives me perspective. A person can be grateful for what they have and still be ambitious for more.
Testify!
It’s not an easy task to raise my kids with such intense comsumerism, much less the elitist mentality of “if you don’t own a house you are not up to standard.”
We have been casually talking of moving but I have a lot of family in the area, i’d feel like I was depriving them of their cousins,aunts, uncles, grandparents, great grandparent…..you know what i mean.
Danni, you speak the truth. One of the core reasons my wife and I decided to move from a very nice area of LA to Seattle was that we were worried our daughter would find life in LA normal. For her preschool graduation, one of the families had a party at their mansion - a French face-painter, an espresso bar, kids driving around in electric cars on the tennis court, others in the pool, or on the trampoline… the couple who owns the house are lovely people, I have no problem (well, little problem) assimilating their style of living with my own, I just worried about my daughter’s inability to do so. Too many nannies dropping off kids for playdates in Range Rovers. I know I can find the same here in Seattle, it just seems easier to avoid.
Lionel, just curious, are these people you’re talking about baby boomers?
implosion, dad’s in his sixties, mom in her fifties (baby was a surprise). Neither are slouches. Dad runs a major TV company, has about 15 emmy awards in his living room. Still works his butt off; I’d rarely see him at school events. Honestly, people I have no problem with; their wealth is well-earned.
Excellent, vmaxer!!!
That phase of was starting when my kids were little about 20 years ago. I didn’t buy into it, but my neighbor did. We’re still here and in good financial shape, they’re bankrupt now.
“This family can easily afford their $750K mortgage - easily, and they put down about 25%, but they are not embracing the lifestyle of people with that sort of money.”
If they bought within the last few years their 25% down payment may have already disappeared with the drop in values especially in the jumbo markets.
They bought in fall of 2006. The downpayment wasn’t quite all gone the last time they were assessed (earlier this summer) but, it is probably all gone by now. Actually, I’m not sure they would get the loan at all now - she gets a salary but he is a partner in a small business.
Fortunately for them, they don’t care. And, much more importantly, they can afford not to care. Their jobs aren’t completely recession proof, but I think they will be OK. They expect to live in that house for 30 years or more. They just aren’t thinking short term.
Polly,
My wife and I sold our 1br coop in ‘05, and have been renting on the UWS, waiting for the crash. Of course, it hasn’t come yet. In terms of hard numbers, Manhattan is still strong, with low inventory (around 5,000 units), but median coop prices are down last I checked. This could be an inverse “change in the mix” to what we’re seeing elsewhere, since a lot of the big money is going to condos, with their more lenient cash requirements (i.e. none) and lots of new lux construction. I hate to say it, but with rents still going bananas, it kind of makes sense. Our building just got sold, and the new landlords are jacking up our rent 45%, to roughly $50/sq ft/yr. If you foresee another few years of that, why not borrow $1.5M and take the tax deduction and $150,000/yr appreciation?
But, as Cramer wrote in NY Mag, the double-barrel blast of a mortgage squeeze and layoffs/no bonuses on Wall Street will probably kill the boom. Unfortunately, I don’t see it happening without the whole city falling into a recession. (I know this is kid’s play compared to the predicitons of many on this blog, but I’m not yet convinced we’re headed into a Greater Depression.)
By the way, even with my low expectations, I was aghast to see this weekend’s NYT Real Estate cover story, “City of Gold,” which makes only passing reference to the jumbo mortgage squeeze. Maybe they have a 2-wk lead time or something. The other sections of the paper are pretty up on it, even if they treat mortgage brokers as reliable sources.
Of course, if you cross a river, everything changes. Long Island is getting creamed. Nassau, Suffolk and Queens are way up in inventory (I think I read that on this blog) and prices are dipping.
Ah, well. The price of walking to work.
$11 a pound for steak???? Good Lord, the Apocalypse is indeed upon us.
Another late-night collapse from Friday…
Sachsen LB, the German publicly-owned bank, on Friday night became the latest victim of the current credit crisis when the Landesbank had to be bailed out because of its exposure to the US asset-backed securities market.
The bank, which is based in and owned by the German state of Saxony, said the German savings banks association had stepped in and taken over a €17.3bn credit facility to a special investment fund, or conduit, that Sachsen LB had funded and managed.
The conduit, called Ormond Quay borrowed in the short-term commercial paper market and invested in longer-term structured credit instruments. It was supported by a credit line from Sachsen LB…
The bail-out came just one week after the bank had reassured the market it had “sufficient liquidity” and followed the bail-out of IKB, the German lender to small companies, whose rescue three weeks ago sparked the crisis in credit markets. (Financial Times)
Published: August 17 2007 23:15 | Last updated: August 17 2007 23:15
Oh, I so wish that Germany would call for a sort of Nuremburg financial crimes court for DaBoyz, FED, Paulson and those of our gov who were also complicit, either passively or aggressively.
we’d have to rent a stadium to hold all the true derelicts in this mess
Great idea, MBA. Like where all the Katrina victims had to go, I’d vote for that. Give ‘em the same conditions the Katrina victims had, too.
You aren’t suggesting that when they run out of people with money to steal from, they will rape and steal from each other? How Non-PC is that?
Why don’t we just wait a few years and buy it instead?
The opinion-makers (i.e. media) do not get it. They talk about the Fed as if it was the Vatican. No fundamentals are being discussed, and I have been following the major media for the last ten days. Yesterday everyone was happy due to the discount rate cut. Every time there is a little dip or spike in the DAX, they quote some ‘expert’. Now I am not that much of an expert, but those experts just will say about anything, except get to the heart of the matter, but the journalists seem quite satisfied. No one sees this thing will be very drawn out.
Was talking about German media here.
This is tha bailout strategy.
The FED and other central banks are taking MBS as collateral and giving them cash. Eventually, the FED will just swallow these or pass them off to some Gov’t GSE to take off the banks books and make them solvent again. Basically, the tax payers will have to foot the bill.
Can U.S. taxpayers sue the Fed? TxChick — I would like a legal opinion.
I was thinking the same thing, if only for market manipulation.
I don’t have a citation, but I think it is a safe guess that being a taxpayer doesn’t give you standing to sue the government in general for taking on a bad expense “on your behalf.” If it wasn’t established long before then, it would have been litigated and settled during Vietnam.
Not sure how that doctrine would apply to the Fed.
‘…to sue the government in general for taking on a bad expense “on your behalf.”’
Is the Fed part of the government then? Which branch: Executive, Legislative or Judicial?
My guess: Executive.
From Wikipedia…”The Federal Reserve System is a quasi-governmental/quasi-private banking system composed of (1) the presidentially-appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) 12 regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury, each with its own nine-member board of directors; (4) numerous private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks; and (5) various advisory councils.”
(4) numerous private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks;
And these are the ones asking for a bailout. I see conflict of interest.
You can only sue the government with it’s permission. Otherwise you have “no standing”. As a taxpayer you have “no standing”! Con. Law.
Yes, you certainly can. It is a private company, despite what Mr. Kudlow claimed on air yesterday.
Vote Ron Paul. What do we have to lose?
Oh let’s see: fresh drinking water, quality education for all, clean air to breathe, food at fair prices, and I could go on.
Voting for someone who is against government regulations is wrong. Lax regulations is what made this bubble. If we have no regulations people can pollute and pollute as much as they want.
Vote Ron Paul. What do we have to lose?
The right to control what happens in our own uteri?
Amen WAman and ahansen!
That is a huge story. It shows the CP market is still not working. Here is the article for the FT:
http://www.ft.com/cms/s/67b09a1c-4d0b-11dc-a51d-0000779fd2ac.html
Another $23 Billion shot to hell…
Gee, I missed this the first time around. Confirmation of what I’ve said for years: Dallas, the place with no bubble, one of the top 4 or 5 areas in the U.S. for scamming and mortgage fraud.
http://www.dallasnews.com/sharedcontent/dws/news/city/collin/opinion/stories/DN-west_paxton_0803edi.ART.West.Edition1.435647d.html
The Dallas News seems to block the back click button, making it impossible to return to the HBB. I do not like that effect, though I dislike mortgage fraud more….
when this happens to the browser “back” button, try to double-click on it — works sometimes
Thanks Wombat. I will do that.
Comments on Friday’s Market Melt Up from a trader:
http://market-ticker.denninger.net/
Bernanke. You gotta love the stupidity in the markets, and you really have to have respect for just how stupid Ben Bernanke is.
What he did hurt. A lot. People got burned bad by this, and the market will make him pay for this in the coming weeks.
From the link on the Poole’s dishonest charade…and per Bloomberg, Poole decided to skip the FOMC secret meeting and attend a scheduled dinner so as not to tip his hand that he had lied on Thursday…
“The Fed lied outright to Wall Street and the Public and intended to do this all along, knowing full well that the statement Poole made on the matter was false. In this case the market’s confidence in The Fed has just been destroyed; they’ve documented themselves as liars.”
Can the Fed be sued for deliberately misleading the masses and tipping off Wall Street insiders? Because if you look at the share price movements of the big Wall Street IBs late Thursday, you see prima facie evidence that they had advance notice of the discount rate slider that would be thrown at the market on Friday morning.
there is a long history of the Fed making moves on options days. in this case they probably wanted to kill off the hedgies that helped cause this crisis and were shorting like crazy. it’s also a good morale booster to do it on these days
a lot of old timers on wall street and someone probably realized that hey, friday is options day and we have a crisis. meanwhile all the young kids who weren’t around in 1994 and think they know everything lost big
The tip off was Bear Stearns going green in the middle of the worst of it on Thursday and the rest of the banks/hb following. When the group that led you down turns and starts to go back up, that’s the market talking and you have to respect it, even if you don’t like it.
Obviously the word was out to selected folk. Since we aren’t in that privileged bunch, our job is to “see” these things and know what they mean.
That’s why I have a lot more respect for Joe trader sitting at his computer (one who can actually do it) than some million dollar asshole at a prop desk who knows what’s going to happen.
“When the group that led you down turns and starts to go back up, that’s the market talking and you have to respect it, even if you don’t like it.”
This is an excellent observation. As a behaviorist, I see many parallels and would like to learn more about your school. Where do I start?
Txchick, I respect the heck out of YOU!!! You are one smart lady.
This is crazy. Interesting times
“I would argue that Countrywide is insolvent. Their only asset is their pricing platform, their business algorithm, and that’s not working. The next biggest asset they have is the toner for their copiers.”
Laughing myself sick…thanks!
“Their only asset is their pricing platform, their business algorithm, and that’s not working.”
Wrong. Their main asset at this point is that they have been granted ‘too-big-to-fail’ status by the PPT, and are henceforth backed by the full faith and credit of the U.S. tax base.
These guys are ruthless. The too big to fails knew. According to the WSJ, they were invited to the FED meeting on Thursday. Consequently, the Nikkei swooned that evening. Europe followed. On Friday morning, when everyone was expecting US markets to dive, the FED nailed the shorts. Poole’s presence would have ruined the surprise. This was well ochestrated and the consequence will be lasting.
Incidentally, the WSJ also reported, no one is using the discount window and the CP market is still clogged. Moreover, everyone is learning it’s an insolvency issue not a liquidity issue. So, it was all smoke and mirrors.
Geithner’s and Kohn’s conundrum: Our helicopters are delivering cargo drops of liquidity, but nobody seems interested in picking them up…
The banks are picking up the helicopter drop, liquidity injections that are being used to maintain the target rate, but they aren’t lending the money to the people that need it… the people that hold MBS and CDO toxic waste.
Why would I pay more to go to the discount window, when the discount window is a hogher rate than the main door liquidity injections.
“… no one is using the discount window.” I read that yesterday but didn’t believe it. Why wouldn’t they use it?
But I still think the biggest bailout risks are from FNMA and FHLMC. We can not allow that to happen. I am organizing a militia as we speak…
What do you call a category 5 hurricane that spins off small tornado’s?…Hurricane: Ben B
What do you call a small tornado, that morphs into the largest hurricane ever to be recorded? Hurricane: Al G
This Autumn’s coming attraction: “The Imperfect Storm”…Rated NC-17… “Wear your Amish outfit and get in for free!”
Here’s something I’ve been wondering about lately. With all the credit drying up, do you think we’ll see an increase in identity theft? It seems pretty rampant out there now during a time when it was super easy to get credit. What will happen when the free money stops flowing?
interesting side topic for sure…I think people will just be more desperate, in general - could easily happen…
People already are more desperate in general. I’m seeing it in my business (stuff business). In fact, this is the first time this has affected me directly, I had an agent who I had authorized to sell some valuables. He did not follow my directions or reserves, claims he hasn’t received correpsondence, in a couple of cases let items go well below what I wanted (I wanted them back if reserves weren’t met) and now I’m wondering whether or not I’ll ever see the money he did get. Normally, the guy would not do a thing like this. But I’ve a feeling he’s in trouble and so now, my money could become his, as an act of desperation. Who cares about trustworthiness when you’re trying to keep your own carcass alive? Who cares about future business if you’re not sure your future business will even be there?
I find it interesting that this is occurring just as the markets and the FED are failing. And they ARE failing.
Sorry to hear that, Palmetto. Hope you get your money & are able to withstand the credit crunch.
BTW, *just* got renter’s insurance (finally!) which you recommended after your fire (pretty sure it was you). Better late than never!
Thanks!
When people feel that the big boys are cheating (by manipulating money/printing it) they lose all moral objectictions and “do on to others as they have done on to them”.
I susspect that once people believe that they entire system is corrupt they will have no incentive to play by the “rules” and will take whatever they can get away with.
Got guns?
Sadly, Dan, I think this is true. There are a certain number of people in society who are weaker hands and keep a certain amount of ethics in their dealings just because the greater part of society around them does so and to go against this would ruin their business. When they perceive (wrongly) that society now approves of unethical dealings, they swing to that side.
“I susspect that once people believe that they entire system is corrupt they will have no incentive to play by the “rules” and will take whatever they can get away with”
I had that thought the other day and I think it is something which is very serious. If enough people begin to default (on everything and anything) then the general attitude in the population may be screw it, why pay when everyone else isn’t. If that scenario were to occur, it is truly game over for the economy and possible we could plunge into absolute chaos.
Somalia here we come?
Dunno about identity theft, but a local radio station (KCBS) said that bank robberies were DOWN for 2007.
SAN FRANCISCO (KCBS) — The Federal Bureau of investigation has released new numbers showing the Bay Area had fewer bank robberies in the first half of this year compared with the same period in 2006.
There were 147 bank robberies reported in the Bay Area from January through June of this year, which is 20 fewer than the same months in 2006 and 33 fewer than 2005. However, concern remains over the number of violent robberies.
FBI Special Agent Joseph Schadler said the agency has made a point of working closely with local police on bank robbery cases.
“With a lot of resources being focused on terrorism and national security-related matters,” said Schadler. “We definitely have tried to develop force multipliers, working to develop relationships with state and local police departments.”
Schadler said the primary area of concern is the high number of strong-arm robberies. There were 75 of them in the Bay Area in 2006 and there have been 42 so far this year.
“We saw a bump in the takeover robberies, and we hope that trend doesn’t continue,” said Schadler.
The East Bay region had the highest number of bank robberies for the first part of this year with a total of 69.
in Phoenix yesterday driving past a house for sale, the sign read
” Make Offer!” first one of those I have seen, there was a realty sign also, but three of these handmade signs and it was a nice house. Is this the start of the panic selling?
I’m seeing those in N AZ too. IMO, prices seem to be all over the place and raw land owners are particularly delusional. And then I saw one ad yesterday for 232 acres at less than $1k per acre around Cottonwood. Wow.
I’ve seen a couple of flyers on campus bulletin boards for high end homes that have been on the market for a year or more (listed at $400k if I remember correctly). “Make an offer.”
Doesn’t seem like a way to reach your target audience, but I guess if you get desperate…
Here in Anthem/N PHX, the asking prices don’t seem realistic, with several foreclosed homes coming on the market. Most are priced $150 - 190 per sq ft, which simply isn’t going to move them.
IMHO, the prices are really going to start moving down until the banks and mortgage companies are instructed to dump the homes. When will that happen? Who knows?
A few months back, I saw a Lexus at the local Costco in Chandler, Az. Across the back window was a sign advertising the owner’s house for sale. I’m not sure of the application process, but it was obviously professionally done since it was transparent as you sometimes see on a city bus window. I guess desperate times call for desperate measures.
Here’s a use for all those wasted condos:
Crops Being Grown in Skyscrapers in New Urban Farming
http://inventorspot.com/articles/urban_farming_crops_grow_30story_6331
Sentine files chapter 11 Saturday Fed cuts rate Friday A.M Hmmmm…
No offense but if someone can afford a 750k mortgage what is preventing them from paying a kid $10 to mow the lawn?
That woman sounds like someone barely hanging on and not someone cutting back on $200 haircuts.
I have cash but there is NO way I am buying right now. Just about anything in DC with 2BRs is going to need a jumbo loan and I have no desire to take on a 8% loan plus a huge condo fee. I will continue to rent.
Thank you to those on this blog that helped me see the value of renting in a asinine market. I just sold my condo 7 weeks ago and moved into a bigger place as a renter for the same money. Had I bought the type of condo I am renting I’d be paying $1000 a month more.
Friends think I am insane to rent but how exactly does that deal sound like a good one in a market where 1500 new units are going to pop up in my area over the next 2-3 yrs and there aren’t a lot of people who have the cash and credit for a jumbo loan?
I assume you are responding to my report about my friends. It isn’t that the grass is waist high, but there are weeds between the moss covered paving stones and the shrubs need trimming. It is more complicated than mowing. Not something you would hand over to a kid.
Believe me, they aren’t just hanging on.
Me? I don’t have that kind of salary, and I’m renting in the DC area, too.
Be careful about those new “units” popping up. Maybe it will be different with the brand new units that purchased entirely post credit tightening, but I wouldn’t want to own anything that was partially sold before the crunch. FB’s stop paying their condo fees before they stop paying their mortgages. There is no way to recover the lost fees if the value of the unit is less than the primary lien.
congrats on the sale, I know what it’s like to get out just in time…
The housing market put the brakes on the moving market this year, and now the dried-up mortgage market threatens to bring it to a stop. Most people will still take a truly irresistible job, but fewer are willing to move at an employer’s request. Milwaukee area employers are relocating up to 30% fewer people than they did a year ago, say relocation consultants, tackling the complicated, migraine-inducing housing market only for employees they must have in the right place at the right time.
http://www.jsonline.com/story/index.aspx?id=648789
How the rest of the world feels about our subprime shenanigans will certainly affect the not so mighty greenback, methinks…
Listen to what Bernanke’s peer in France said:
“This is a brutal correction in markets that has its roots in the real estate submarket in the United States.”
“There have been severe excesses over there in this area”
http://news.bbc.co.uk/2/hi/business/6951149.stm
Do yourself a favor and get out of all Dollar denominated investments, on the double!
“…real estate submarket in the United States…”
Did he mean to say ’subslime market?’ Or was he inventing a sniglet for ’submarine market,’ as in ‘under water?’
I expect to fetch top dollar for my submarine. After all, it comes with a galley kitchen, infinity pool, and ocean views.
Luv,
Jen
I see you didn’t mention granite or in-ground pool…
It’ll be lucky to get an offer~
But the hatch leaks.
‘ I expect to fetch top dollar for my submarine. After all, it comes with a galley kitchen, infinity pool, and ocean views.’
Keeping up with the Davy Joneses.
And the era of consumption came to a fitting end as a fine raspberry flavored beverage was duly consumed below decks…
Anyone care to explain why the Dollar has strengthened so much in the last week? I watched GBP go to 2.06 and sink back to 1.98 in about one week’s time.
The USD rise has been explained as a “flight to quality”. Huh?
Once again, because lots of people worldwide own U.S. Treasuries, we are the safe haven.
Foreigners who hold U.S. Treasuries are indebted to the United States. If THEY sell the U.S. Treasuries they own, they are screwed. Not us.
Last week Foreign countries were net sellers of 17B+ in US Tbonds. As I (and others) have pointed out the Euro was in a bubble market as was NZ, Australia dollar and several other currencies. Currencies that are remarkably cheap are still showing strength against the dollar and will continue to do so.
“Foreigners who hold U.S. Treasuries are indebted to the United States” LOL
Main Entry: in·debt·ed
Pronunciation: in-’de-t&d
Function: adjective
Etymology: Middle English indetted, from Anglo-French endetté, past participle of endetter to run into debt, from en- + dette debt
1 : owing gratitude or recognition to another : BEHOLDEN
2 : owing money
I think you meant to write “The US is up Sh*ts Creek without foreign buying of our debt, since we are indebted to them now.”
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When everyone in the world has figured out that dollar would go down me thinks that the opposite is far more likely.
A currency speculator for 20 years and a contrarian,
Jas
In everyother collapse its been a 3rd wolrd country defaulting on too much debt. Russia, mexico, asia, south america. This time its different. This time its the US’s turn to default on too much debt. This time the US is the inept 3rd world country, and china/europe is the world’s “safe” currency/
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Please note: $s in money = $s in debt.
When Americans default that results in contraction of the dollars.
Banks and other lenders will lose money and money will shrink (no, Fed can’t print money except allowing banks to lend more).
I am predicting a deflationary depression during 2008-10. $ will appreciate in value compared to goods and labor. Yes, people in America will be thrilled to work for less money if they are offered work. During 1993-94, in San Fernando Valley, two Anglo neighbors in construction were grateful that I hired them at 50% of their rate and not some cheap Mexican labor. They were good and I didn’t mind paying them more.
Jas
That was the move until the Fed lowered the discount rate…the Fed may have rattled the move of investors back to the dollar. Interesting to watch this early next week.
The problem with getting out of dollars is that the excess in other markets has been as bad or worse as the U.S. They are going to crash harer than us, giving strength to the dollar in relative terms…. IMO.
PB’s take on a 0.4 pct YOY increase in unemployment: Unless it’s different this time, it will go up another 1.6 percent within the next two years. At least that is what the historical BLS national UE rate data show. Of course, I realize all employment is local…
Business
Last modified Friday, August 17, 2007 7:46 PM PDT
Local unemployment rises to 4.8 percent
By: BRADLEY J. FIKES - Staff Writer
San Diego County’s unemployment rate rose in July to an estimated 4.8 percent, up from 4.6 percent in June and 4.4 percent a year ago, the California Employment Development Department reported Friday.
California’s unemployment rate rose to 5.3 percent in July, from 5.2 percent in June and 4.8 percent a year ago.
Local economists Alan Gin and Kelly Cunningham said that the county’s unemployment report was mixed. The increase in unemployment over a year ago was worrisome, they said, but local businesses still added more than 13,000 jobs. That’s a big turnaround from last month’s report, which said that only 1,600 jobs had been added locally over the last year.
The job growth reversed a trend that would have resulted in job losses, said Cunningham, of the San Diego Institute for Policy Research. A monthly report on leading economic indicators for the county by Gin has consistently predicted a slowing economy, perhaps lapsing into outright recession.
“I was pleasantly surprised,” Cunningham said. “Looking at it year-over-year, (job growth) had been getting weaker and weaker until this month.”
However, Gin said the rising unemployment indicated that some job losses were not being picked up in the employment numbers. And both said the slowing real estate sector continues to drag down the overall economy.
“We have conflicting signals,” Gin said. “The unemployment rate is at a three-year high. We’re still not out of the woods yet, as far as the economy’s concerned. The unemployment rate will probably top 5 percent before the end of this year.”
http://nctimes.com/articles/2007/08/18/business/news/19_41_468_17_07.txt
County job market weathers layoffs
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
August 18, 2007
Summertime layoffs caused a loss of 7,900 jobs and a rise in the unemployment rate in San Diego County in July, according to data released yesterday by the California Employment Development Department.
But the monthly decline in jobs was so shallow that local economists interpreted it as good news, especially since it was accompanied by a rise in construction and scientific jobs.
http://www.signonsandiego.com/news/business/20070818-9999-1b18jobs.html
Does the Fed’s lending against MBS collateral constitute a direct (though unannounced) bailout of the portion of the mortgage lending sector which remains in business?
probably not
The Great Depression started well after the stock market crash and the Dow had already recovered 75% of it’s losses when there was a run on some no name bank that started all the bank runs and wiped out the savings for millions of people. Bernanke is an expert on the Great Depression. some idiots here may wish for another one, but last time over 100 million people died and some countries were ruined beyond recognition
Bernanke and team basically told the banks that lent to CountryWide that the Fed is going to take the mortgages as collateral in case Countrywide fails. it can still go belly up but Bernanke avoided a calamity.
for all the nonsense of the PPT, everyone who thinks there is a PPT always avoids 2000 - 2003 and 1998 when bear markets took down the SP500 by huge margins. they talk about mystery rallies which have always happened.
no one cares if the SP500 falls another 10% over the next year, it’s a quick fall like we were about to have that is scary since it can literally wipe out the financial system. a year long fall gives everyone time to hedge, short and make money on the way down except the morons who think stocks are cheap because they fell 50% or whatever. And we just had a very fast fall in stocks that would have accelerated next week.
the housing bubble is not saved, idiots will still be foreclosed on, someone will still probably go out of business and my money is on Barclays as being the #1 candidate but it’s going to be gradual and not a shock
dba — Do you work at the Fed?
Obviously he does not work at the Fed. Your question is snide enforcement of conformity. The last two corrections in this market were smaller and took 5-10 years to play out so this time around should be at least as big. You have become excited about rapid change, but even huge turn arounds in property markets are not about rapid change.
I’m not excited in the least. In fact, nothing that has happened in the past two weeks was whatsoever surprising, as the long-time posters on this blog have been predicting a credit meltdown for over two years. However, I have noted many news articles mentioning BB’s and HP’s coordinated efforts to calm the markets in the past six months, beginning with the recently-abandoned “subprime is contained” mantra and recently culminating in open announcements of PPT interventions to stock up the sagging stock market. So there doesn’t really seem to be much to discuss here, or to get excited about, as the news is completely in line with the blog consensus.
So what was your point?
prof, are you having a multiple-personality day, or maybe is GetStucco back?
Stucco Bear is right on. Top Brass mantra of “The Economy is fine” and “Unemployment is low” or “Global Growth” is faltering…..the liquidity crisis is just more gaming of the system to incite inflation, but inflations is not taking hold regarding housing, cars or gadgetry. But inflations working overtime on food, energy, and healthcare….
The management of expectations is failing miserably. Back Room Covert Ops Targeting specific winners is playing by a really different set of rules, and lacks transparency ……crooked and gamed.
Expect unexpected and unconventional warfare on savers and those that live within the means of a middle class life.
dba is correct in this. I do not think the FEDs actions will save us, however. The problems are too large. The amounts too great. Just do some research in this. Didn’t the conventional wisdom say a few months ago that the subprime was contained. Is subprime doing this to us? No, excess credit a dirt cheap prices spent on dubious projects in all areas of commerce, business, and personal consumption are taking a toll. It won’t work. We are going into a very serious recession. We cannot avoid it. Remember that we are in a situation that we have never been in before. We have no markers or pasts that will help us cope with this. We are certainly moving into a new chapter of American history. BTW, this didn’t need to happen.
Sorry,
Roidy
“…Just do some research in this”
My current 8/2007 research tells me that: housing is still over-priced.
Suzanne, I need some backup here…
“Does the Fed’s lending against MBS collateral constitute a direct bailout of the portion of the mortgage lending sector which remains in business?”
Seems like it to me. The next step will be a homeowner bailout which would protect the Fed itself since it is collateralized by the MBS.
I just seeth thinking about the Fed accepting this bogus ‘AAA’ paper from the likes of Countrywide in exchange for inflationary expansions of the money supply. What happens when CFC goes belly up, after borrowing billions of $ from the discount window with worthless paper? I know what will happen, the fed will sell it for pennies on the dollar to its friend on Wall Street who will reap a handsome profit by mining the value from it and you and I will hear politician talk about the growing budget deficit and how we have to pay more in taxes.
The fat cats who made money being reckless making these loans will be the ones paid by the Fed to clean up the mess. AAAARRRRRGGGGHHHH.
Here in the northern suburbs of Chicago I’m seeing housings that have been on the market for two years. A few friends tried to list earlier this year but one went 16 weeks without a showing. She gave up -her family was trying to sell due to job transfer. Another listed and the only showings are through the open houses which are empty gestures. She just lowered her price 10 grand but I doubt it results in anything.
Custom builders snapped up the lots in my 1 acre neighborhood and built. Asking prices are from 650,000-895,000. The houses are still sitting empty two years later. They have to be watched due to the copper stealing.
I never see anyone coming to see the houses. Even the waterfront houses are empty.
This is a high tax property area, what happens to the property taxes when the market is dead and housing value is falling??
“They have to be watched due to the copper stealing. ”
This is actually a huge issue for absentee owners. I expect most empty houses to get stripped bare of copper wiring, etc.
few friends tried to list earlier this year but one went 16 weeks without a showing. She gave up -her family was trying to sell due to job transfer.
This is where some of you renters can be glad. It makes you much more portable.
I headhunted (just love that title :() a candidate from Chicago two months ago. He relo’ed w/o family. I asked about selling the house before he accepted, as there was no assistance on the house, just better salary, plus the move and short term housing were covered(companies in CO get away with this all the time). He called yesterday with a certain panic I have heard before, wondering about the transition. Damn it all.
Imagine the sheer panic investors in a hedgefund like Sentinel, must’ve felt, this past few days?
And then the realization that the $18 Million father had left for you in a trust fund, that you invested @ 11.4% returns (a friend gave you the tip, he’s always been right on…) in a certainly “strong” sounding named company like Sentinel, was suddenly…
No More
Makes one question the certainty of death too. What happens when you die? Do you see your Sentinel money there?
Poole Shot, rate cut side pocket
Too funny!!! This blog has to be the most entertaining one on the ‘net, outside of YouTube!
More bodies floating to the surface.
http://biz.yahoo.com/ap/070817/mgic_radian_acquisition.html?.v=7
A cusory review:
1. The borrowers lied about their incomes.
2. The appraisers lied about the values.
3. The brokers lied about the mortgages.
4. The bankers lied about the risk.
5. The rating agencies lied about the quality.
6. The fed lied about fighting inflation.
Hands off, the marketplace works!
As I said, deception, fraud and manipulation are the values to get ahead and there was a mad rush.
Jas
Prof. Bear,
This is for you. Post is filing under Freedom of Info act for, what else, more info? So, we confirm our little plunge protection team, we know the Fed scammed the country when Poole lied on Thursday
and what should we conclude? Can you spell Banana Republic?
“And in case you haven’t noticed the Plunge Protectors - the real name of which is the President’s Working Group on Financial Markets - are no longer secretive.
The Treasury is still ignoring The Post’s long-standing requests for information on the PWG under the Freedom of Information Act.
And Treasury Secretary Hank Paulson hasn’t gotten back to me on my recent request for an interview.
But the rest of the media is suddenly tracking this mysterious organization. Trouble is, while the press now seems to understand the PWG’s importance, nobody is asking the big question - what is the group willing and able to do in a crisis? Now that it suits the group’s interest, the PWG wants everyone to know it’s on the job.
Let me quote from this past Monday’s Wall Street Journal: “The market turmoil prompted the President’s Working Group on Financial Markets . . . to trigger protocols established by Mr. Paulson shortly after he took office last year.
“They include a detailed list of who is going to call financial institutions, risk managers, traders and chief executives to keep tabs, how often they should call and the like.”
The Journal went on to say that Paulson instructed a Treasury Department official named Emil Henry to craft six “meltdown” scenarios.
“One was the catch-all General Withdrawal from Risk Taking. Others included a liquidity crisis, stock market meltdown and oil shock,” according to the Journal. (This am, The New York Post).”
“But the rest of the media is suddenly tracking this mysterious organization.”
Maybe the MSM will somehow wake up from its lethargy and start paying attention to the way taxpayers are routinely charged to keep the Wall Street money siphon up and running…
“One was the catch-all General Withdrawal from Risk Taking. Others included a liquidity crisis, stock market meltdown and oil shock,”
Did they run all four at once?
How about that Wendy’s commerical with all the people jumping into: “The Hole” …if that’s not a perfect image for people buying homes for the last 5 years…I was laughing my a$$ off watching that & thinking about FB’s …Beautiful!
I had not seen it, here it is
http://www.youtube.com/watch?v=CCsIL1JHVyQ&mode=user&search=
Thanks RoundSparrow…now I can get a chuckle, every now & then
The view from outside the US, per the International Herald Tribune.
(sorry, having trouble posting links).Our subprime mess took down a second German bank Friday night. Everybody admires the US, everybody wants to be like us. Not. But they did, once.
“America’s supply-side economists argue that there is nothing wrong with going into debt, but this is valid only as long as a nation and its consumers are gaining something in return.
What have Americans gained from their nation’s mountain of debt? A crumbling infrastructure, a manufacturing base that has declined 60 percent since World War II, a rise in the wealth gap, the lowest consumer-savings rate since the depths of the Great Depression, 50 million Americans without health insurance, an educational system in decline and a shrinking dollar that makes foreign travel a luxury.
The best cars, the best bridges and highways, the fastest trains and the tallest buildings are all to be found outside America’s borders. Supply-siders ignore the crucial distinction between, on the one hand, debt employed as an investment vehicle to enhance competitiveness and, on the other, debt used to pay off current expenses and to create even more debt.”
“everybody wants to be like us. Not. But they did, once.”
Search for “Ich bin ein Berliner” at video.google.
Yea his dad was a bootlegger, and he was seriously sick, but he was a leader.
Here is the link:
http://www.iht.com/articles/2007/08/17/opinion/edvarzi.php
Pretty much sums it up, Spike. Thanks for the post.
(Maybe someday we’ll get back to rewarding **work and productivity** instead of greed, money trading and entertainment. One can hope…)
PAGE ONE
In Time of Tumult,
Obscure Economist
Gains Currency
Mr. Minsky Long Argued
Markets Were Crisis Prone;
His ‘Moment’ Has Arrived
By JUSTIN LAHART
August 18, 2007; Page A1
The recent market turmoil is rocking investors around the globe. But it is raising the stock of one person: a little-known economist whose views have suddenly become very popular.
Hyman Minsky, who died more than a decade ago, spent much of his career advancing the idea that financial systems are inherently susceptible to bouts of speculation that, if they last long enough, end in crises. At a time when many economists were coming to believe in the efficiency of markets, Mr. Minsky was considered somewhat of a radical for his stress on their tendency toward excess and upheaval.
(RELATED READING
Hyman Minsky
“The Financial Instability Hypothesis” by Hyman P. Minsky, May 1992
“The Plankton Theory Meets Minsky” by Paul McCulley, March 2007
“Capitalism’s Beast of Burden” by Paul McCulley, January 2001)
Today, his views are reverberating from New York to Hong Kong as economists and traders try to understand what’s happening in the markets. The Levy Economics Institute of Bard College, where Mr. Minsky worked for the last six years of his life, is planning to reprint two books by the economist — one on John Maynard Keynes, the other on unstable economies. The latter book was being offered on the Internet for thousands of dollars.
http://online.wsj.com/article/SB118736585456901047.html?mod=hpp_us_pageone
Mortgage Fraud Is Prime
Prosecutors Hunt Down Scams Amid Foreclosures
By PAUL DAVIES
August 18, 2007; Page B2
Amid a jump in the number of foreclosures, federal and state prosecutors have stepped up efforts to crack down on mortgage fraud.
The scrutiny by prosecutors comes as the housing industry undergoes a shakeout, further exposing fraud schemes said to be as rampant as ever.
FRAUD ALERT
• On the Case: Federal and state prosecutors have beefed up their investigations into mortgage fraud.
• A New Wrinkle: The jump in foreclosure rates has sparked an increase in what are known as “foreclosure rescue” scams.
• State Action: At least one state has banned the foreclosure rescue practice.
Federal prosecutors in a number of jurisdictions — including Houston, Los Angeles, Phoenix and New York — have indicted dozens of mortgage-industry professionals in recent months for their roles in a variety of alleged scams that were operating as recently as June.
Under Scrutiny: 1,200 Cases
http://online.wsj.com/article/SB118738294512001287.html?mod=hpp_us_whats_news
Check out this great Craiglist opportunity! Heh.
AUCTION…BIDS START AT THE LISTING PRICE! OPEN HOUSE AUG. 18TH 1PM - 4PM. Place bids until Aug. 22nd.
I posted this on Kudlow’s Blog a few minutes ago. Sorry, I can’t resist such an easy target. LOL
Roidy
Here it is:
I really don’t know where to start with all of this.
1) The FED has no business accepting CDO’s as collateral at the discount window. That is a bailout. It won’t work.
2) The “walk across the trading floor” in 1929 by Exchange Vice-pres Richard Whitney (see wiki or some other source for the 1929 crash) was an attempt to stabilize the selling and panic. It failed. The FEDs action on Friday will fail, also. To get the idea, replace 1929 stock market margin buying by CDO and hedge fund speculation. Get it?
3) The regulators were criminally lax in their duties this time around. This was cheered on by many people who had a stake in this type of behavior. (See self-regulation and it’s failures in the 2002 Congressional hearings on the dotcom bust.)
So, how are we going to “fix” this? I still say that to bail Wall Street out is wrong. Sure, I’m all about “liquidity” to good credit risks, but you may want to review and research item #1 above.
Roidy
Good for you, Roidy!
This should signal the collapse of the Manhattan Real Estate market.
http://www.nytimes.com/2007/08/19/realestate/19cov.html?_r=1&ref=realestate&oref=slogin
From “Maestro” (2000) by Bob Woodward
Fed reaction to October 1987 22.6% crash in DOW… (Greenspan was away in Dallas)
——————————
At the Federal Reserve headquarters in Washington, Johnson was the official crisis manager. He was struck by the tomblike hush in the corridors. He contacted the senior staff. Don’t go home he told them, we need to go over this.
Johnson took out a one-inch-thick binder with a pink cover that had emblazoned diagonally across its front a large bold warning: “RESTRICTED_CONTROLLED.
He read, “Summary Papers on Risks in the US Financial System.” He turned to the tab on the stock market: “STRICTLY CONFIDENTIAL STOCK MARKET RISKS.” The seven-page section stated that current prices were “probably unsustainable.”
The options for action, Johnson read, included open-market buying of bonds to keep money in the banking system and short-term interest rates from rising. Some options were extreme. “Try to organize stock purchases by major securities firms,” he read. Another option, he read, “an off-the-wall suggestion: targeted Fed lending specifically designed to support stock values.”
——————————
What’s in the binder now besides lowering the discount window?
Goes good with coffee.
Quotes from: Mae West…modified for the current era:
“I used to be Snow White, but I drifted.” — … Ben Shalom Bernanke
“Too much of a good thing is wonderful.” — … Wall Street
“Is that a gun in your pocket, or are you just happy to see me?” — …Federal Re-serve
“I only like two kinds of (men) debt: domestic and foreign. — …hedge funds
http://members.aol.com/char2go/mwquotes.htm
Barron’s article advises shorting stocks that Cramer recommends on his show:
http://online.barrons.com/article/SB118681265755995100.html?mod=mktw
Shorting Cramer
By BILL ALPERT
THANKS TO HIS NIGHTLY CNBC SHOW Mad Money, Jim Cramer has become the chief cheerleader for the bull market, or what was the bull market until a few weeks ago. Last spring, he was giddily exhorting the Dow Jones Industrial Average toward 15,000, with no troubles in sight. Earlier this month, as the Dow tumbled in the direction of 13,000, he had an on-air meltdown, complete with screaming, sobs and predictions of financial doom. The clip quickly made the rounds on YouTube. Friday, after the Fed cut the discount rate, he said that the Dow’s run to 14,500 had begun. With dramatic pronouncements like that, it’s no wonder that more than 100,000 viewers tune in each weeknight for his antic mashup of sound effects, Streetwise advice and stock picks.
It’s those stock picks that caught our attention. Cramer, by all accounts, had a stellar career as a hedge-fund manager. And he is held out by CNBC as the guy who can help viewers make big money. But a comprehensive and careful review of his stock picks by Barron’s finds that his picks haven’t beaten the market. Over the past two years, viewers holding Cramer’s stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star’s Buy recommendations compiled by YourMoneyWatch.com, a Website run by a retired stock analyst and loyal Cramer-watcher.
We also looked at a database of Cramer’s Mad Money picks maintained by his Website, TheStreet.com. It covers only the past six months, but includes an astounding 3,458 stocks — Buys mainly, punctuated by some Sells. These picks were flat to down in relation to the market. Count commissions and you would have been much better off in an index fund that simply tracks the market.
Cramer is entertainment. How did he make his money anyway? Inherit it or marry it? I wonder why they keep him on TV anyway. It’s the same with Kudlow. I just don’t understand. You’re better off listening to the Nightly Business Report. Really.
Roidy
http://www.thestreet.com/s/a-wide-decline-has-been-set-in-motion/markets/activetraderupdate/10374636.html?puc=_tscs
Excellent article:
——————
“Our financial system is like an alcoholic who has had too much to drink — the solution is not to serve up another round of drinks but rather to close the bar.”
Ok, which one of you posted this to Craigslist SD?
$100000 Homes- Crisis in SD COUNTY homes for sale
Reply to:
Date: 2007-08-18, 7:11AM PDT
Our director told us at a meeting Friday at my bank I work at. That there are very few people who can qualify for a fixed loan. They do not have 10% down or they have bad credit.He said if any real estate agent has a house in escrow right now, this may be their only sale the rest of the year. Houses are falling out of escrow . He said the wages in SD do not sustain the housing prices. People making good money are unable to qualify to buy a house. No money in the bank. Real estate agents who took advantage of buyers are going to probably be serving you fries with your burger. There are only 1 in 60 qualified buyers.
Must have been Professor G. Stucco-Bear.
“Forget about the fact that Jimmy Cayne’s had some trouble re: Bear Stearns’s minor subprime hedge fund crisis. Don’t even think about the rise he got out of a few people when it was revealed that Cayne was hitting the links while Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund lit paper bags full of money on fire. None of that comes close to the JC awesomeness we’re about to throw your way: the Hollywood Country Club (Deal, NJ) is investigating allegations that the Bear CEO used some creative scoring techniques that allowed him to win the club’s July 4th tournament. Yes—James Cayne (possibly) cheats at golf.
CNBC’s Charlie Gasparino reports that a committee of three has been formed to look into the complaint. Harvey York, president of the club told Gasparino that “allegations of cheating occur all the time,” particularly among the senior-level executive members who are small and petty. Gasparino’s two cents are that Cayne is a “straight up guy” but “the long knives are coming out against him because of his troubles at Bear Stearns.”
Looking ahead: did foul play have a hand in James Cayne championship bridge career? The answer may surprise you.”
Not quite like Bobby Jones when he corrected his golf card and was lauded for giving himself a penalty stroke: “You might as well praise me for not breaking into banks. There is only one way to play this game.”
Ah the life of financial mismanagement; Lie, Cheat and Steal
“the senior-level executive members who are small and petty.”
Gee, now that’s a surprise.
Anybody wish to be the fall guy for a Hedge Fund?
Client Services/Investor Associate - 121886
Company: The McIntyre Group
Location: Stamford, CT
Compensation: 85K
Years Experience: 1-3 yrs
Position Type: Employee
Employment type: Full time
Updated: 17 Aug 2007
eFC Ref no: 317122
A top Financial Services Hedge Fund seeks an Associate responsible for servicing clients with their investment related administrative and marketing collateral needs
. The Candidate will therefore be expected to have strong communications and quantitative/modeling skills to analyze investment data across numerous parameters.
Job Requirements:
* MUST HAVE between 1 and 3 years business experience with excellent analytical skills and strong interest in the financial markets.
* MUST HAVE excellent presentation skills and MUST HAVE strong academic background
Used to be you’d celebrate when you bought a house.
How times have changed.
HBB friends, celebrate with me as I end my very short but sweet status of being homeless and camping out in the wilds of Utah.
Celebrate as I become A REAL SOMEBODY!!!!
Celebrate as I become - A RENTER!!!!!
Just rented a cool strawbale house on 4 acres in SW Colo. close to all the wildlands I love, so now I have the best of both worlds. 3 bed, 2 bath, almost no heat/cooling bills and custom tilework. $1200/month, and I can have my dogs and cats. First time in my life I’ve ever rented. THEY get to fix the dishwasher if it breaks. THEY get to pay the water bill. THEY get to fix things that break. THEY get to pay the taxes. THEY get to hope I stay so they can make the mortgage (though I doubt if they have one, as they’re smart people). I get to leave and go explore some other cool place when I get tired of being there - without worrying about selling or renting the place out.
Pop the cork! No bitterness here.
Congratulations and may you enjoy your new digs for exactly as long as you want to enjoy them.
Congrats! May you breath clean air for all of your days.
Enjoy the renting experience, Lost!
We’ve been doing it for over three years, and haven’t had a single regret.
BTW, let us know how you like the strawbale house. We’d like to eventually build our own home, and are interested in different construction techniques.
Think mining stocks are the cat’s meow?
“Out of fifty mining stocks we have recently observed, forty nine of them have a lower share price today than they did 30 days ago. This means only 2% are higher than they were a month ago, or 98% of these stocks are lower than they were a month ago.”
http://www.financialsense.com/fsu/editorials/invscore/2007/0817.html
Beware of the baby being thrown out with the bathwater, when it comes to “paper precious metals”…
‘There incarnate in the face of a single man, revealed in the expression of a single face, did there not stand the only god that anyone believes in nowadays-Money, in all its power….how horrible is man’s condition! He does not own one happiness whose source does not lie in ignorance of some kind.’-Balzac, 1883, from Eugenie Grandet
–
““All of the old-timers knew that subprime mortgages were what we called neutron loans — they killed the people and left the houses,” said Louis S. Barnes, 58, a partner at Boulder West, a mortgage banking firm in Lafayette, Colo.”
http://www.nytimes.com/2007/08/19/business/19credit.html?_r=1&oref=slogin&pagewanted=print
I often wonder if Lou Barnes is our “Boulder Bo”. (sp?)
Sounds just like an HBB’er.
Is anyone else as sick at heart as I am concerning what is going on? I personally know people who are going to lose their homes. The folks I know were not trying to make a killing. They just really wanted a house before they got “priced out forever.” They are intelligent people, but too trusting. Although I’m in ok shape personally, sometimes it is difficult to sleep at night because I’m so worried for my friends. I wish I didn’t have these feelings because I need my sleep. I wish I could just say, “Hey, they signed the loan…they should have known,” and let it be.
Don’t worry Sally. Your friends are not going to die. They will simply need to move out of their house and into a different one, which they will rent. It’s OK for people to learn from their own mistakes, and it happens to all of us.
What haunts me is someone I know who will soon be laid off from a rather large semiconductor company that is offshoring job after job. This particular person has a very kind heart and takes care of his ancient father. I worry about him the most…but thanks for your thought.
Sally , It’s also hard for me to witness the pain people will have over losing their homes ,jobs ,and other material goods. I have a kid who is about to lose a job within the next three months . This crash will affect everyone in one way or another .
I think alot of people were way to trusting of the lenders and real estate people ,and of course the media wasn’t shining any guiding lights for the sheep during the boom .Alot of people were brainwashed and they didn’t protect themselves .
It really is to bad that so many people will be harmed by this fake RE boom . Your a good person for caring for your fellow man/women .
Hah! I have the last word today.
Word.
Yeah, but check this out, Gravity:
Word up!
“People are screwed.”
-Big V