Wobbling Under The Weight Of The Housing Downturn
ABC 30.com reports from California. “For some, what’s happening with the housing market is a bargain. ‘I guess it’s a buyers market,’ said new homeowner Sheldon Kahoonei. The Kahoonei family just moved from San Jose to Mountain House, near Tracy, because they got a great deal on their new home. ‘They offered us a lot of money off of the original price,’ said Monica Kahoonei.”
“‘Originally, the house was priced for over $600,000. We ended up getting this for $481,000. So we have something like $140,000 in incentives,’ said Sheldon Kahoonei.”
“All the incentives don’t help those who bought here a year ago. They paid in some cases as much as $100,000 more for the same model.”
“A Prudential agent selling one home said it’s been on the market for 67 days with no inquiries. The owners owe $590,000 and stopped paying on the house months ago. The house is likely to get marked down this week to $489,000, perhaps even lower. Others are in the same boat.”
“‘Their home prices have dropped, and a lot of them owe more than they have and they can’t refinance them,’ said Bill Erb, Diablo Funding Group. ‘So they’re going to end up losing them because they can’t make the payments.’”
The LA Times. “The housing market slump appears to be taking a toll on two signature Orange County projects. In Anaheim, city officials were alerted last week that Lennar Corp. will halt construction on A-Town for up to a year, slowing progress on the centerpiece of what some are calling the city’s new downtown.”
“In Irvine, Lennar’s plans to build thousands of homes around the planned Orange County Great Park have been pushed back, and the city has not received an updated timeline from the developer since 2005.”
“‘Looking at the housing market, it creates frustration and suspicion that our partnership is not functioning as it should be,’ said Councilwoman Christina Shea.”
“The question over the next several years, said Esmael Adibi at Chapman University, may be just how long Lennar can weather the tough times in real estate without the brisk home sales anticipated.”
“‘In the short term,’ he said, ‘it is extremely difficult for a builder to justify new projects and new developments, because they’re almost certainly going to lose money.’”
The Bakersfield Californian. “A monthly newsletter detailing local building permit activity is reporting rumors of layoffs at local Lennar Corp. operations. Gary Grumbles, local head of the homebuilding giant, would not comment on earlier layoff rumors Wednesday. He did not return calls for comment Friday.”
“The newsletter was distributed by e-mail Friday by Howdy Miller, marketing director at Ticor Title. ‘I’m sure you’ve all heard by now … the local Lennar effort has been reduced by 40 employees … A bit strange … Since they pulled 84 permits in the month of August!!! … Rumor has it they want to sell off existing inventory before continuing their building program … go fish!!!’ reads the report.”
From KCRA 3. “Last May, Jason and Gina Rossow fulfilled their dream of buying their first home in a brand-new subdivision under construction in Elk Grove. But now across the street are weeds. An entire field is empty with just debris. And around the corner there are unfinished homes. The Rossows’ dream is slowly creeping toward nightmare.”
“What’s causing confusion, concern, and unwelcome news is a closed sign that’s on the Dunmore Homes sales office door. All construction was halted last month, and contractors filed roughly $5 million in liens against Dunmore Homes.”
“‘That tells ya it’s not a great sign for new home sales,’ Mike Show of the Sacramento Business Journal said.”
The Sacramento Bee. “California’s job market…is still wobbling under the weight of the housing downturn. Continued cutbacks in the housing sector, from construction sites to loan offices, sent the statewide unemployment rate up two-tenths of a point to 5.5 percent.”
“‘It has slowed in 2007 — job growth is considerably lower than it was last year,’ said Howard Roth, chief economist at the state Department of Finance. ‘You can really see the housing slowdown in these numbers.’”
“‘The numbers are starting to mount a little bit and look a little more ominous,’ said David Lyons, labor market consultant at EDD.”
“‘The consumers, for sure, haven’t made a full-on response to housing prices,’ said Jon Haveman of Los Angeles consulting firm Beacon Economics. ‘In time, they’ll come to recognize’ that the downturn will last a while.”
The Contra Costa Times. “The East Bay fended off an employment downturn in August even though housing-related jobs deteriorated at a greater pace.”
“‘Construction is a disaster,’ said ecnmist Jon Haveman. ‘It will take 18 months to two years for the housing market to stabilize. It’s going to be awhile before they put hammer to nail in that industry.’”
“During the pat year, the Alameda-Contra Costa County area lost 5,900 jobs in construction, 1,000 in finance and insurance and 800 in real estate. In the same period, California lost 24,300 construction jobs. That means the East Bay accounted for about one-fourth of all the construction jobs that vanished in California.”
“‘It’s difficult to find a job,’ said Christine Bonanno, a Pittsburg resident who lost her job at a Walnut Creek escrow company when the housing and residential mortgage industries collapsed. ‘A lot of people were laid off from my company. I haven’t found anything yet since March.’”
“Bonanno said she is willing to take a job in pretty much any category besides the mortgage business. And she is flexible on wages. ‘I don’t want to stay with the mortgage industry with how bad it is right now,’ Bonanno said.”
The Fresno Bee. “The housing slowdown continues to ripple through the economy, leading to a reduction of construction jobs and prompting title companies and related businesses to shrink office space.”
“As a result, the unemployment rate in Fresno County was higher in August than a year earlier, increasing to 7.6%.”
“The evaporating construction payrolls are related to slow home sales. The number of permits for single-family homes issued in Fresno County through August was…27% less than two years ago, according to the Burbank-based Construction Industry Research Report.”
“With less work comes the need for fewer workers. ‘There’s no mystery to it,’ said Mitch Covington, president of the Building Industry Association of the San Joaquin Valley.”
“‘Mortgage companies are just flat closing down,’ said Phil Souza, an office specialist at Grubb & Ellis/Pearson Commercial. ‘They are just gone. They are shutting down, subleasing their space or defaulting on their lease. We’re seeing all of that.’”
“Meanwhile, home builders are slashing prices and offering incentives to attract buyers. Covington said builders won’t offer concessions forever.”
“‘It’s bargain time,’ he said.”
The Union Tribune. “In a clash that was bound to happen in a city with a growing university, owners of luxury condos are complaining about students partying and acting wildly.”
“Residents of Rancho Coronado just south of Cal State San Marcos say they are tired of the noise, trash and alcohol-induced behavior by students living there.”
“Rancho Coronado consists of five gated communities with a total of about 850 condos. Outside the meeting, several residents who belong to the homeowners association said they are disgusted with the behavior they have seen.”
“Students have been running around intoxicated, wearing bras and no shirts, and leaving bodily waste and vomit in the community pool and on playgrounds, said Maria Manning, who moved into a condo about nine months ago.”
“‘It’s beyond ‘Animal House,’ she said.”
“Alicia Smith said she has tried talking to them but has gotten ‘disrespectful’ responses, including ‘you live by a college, what do you expect?’”
“Condos in her complex were selling for more than $500,000 when she bought one two years ago, Smith said.”
“Part of the problem is that owners aren’t supposed to rent their units, Jennifer Schoch said, but some do anyway. She said she didn’t realize she would be living near college students when she moved in three years ago. ‘I just didn’t think that college kids could afford this,’ Schoch said.”
“Students have been running around intoxicated, wearing bras and no shirts, and leaving bodily waste and vomit in the community pool and on playgrounds, said Maria Manning, who moved into a condo about nine months ago.”
Sounds like a fun place to go to school!
Tomorrow’s leaders.
Tomorrow’s Lenders
As someone who owned rental properties near a large university, I have been on the receiving end of a few phone calls from the neighbors. If it’s all rentals around the property, it tends to be more tolerated. If the property is in a mixed owner/renter neighborhood, and the owner has children, expect to be on the owner neighbors’ speed dial.
OT
BUY AMERICAN!
Boycott Chindia.
How?
I made a post yesterday that got eaten. We had problems with one of our Xerox copiers. I called Xerox support. It was obvious I ended up in Bangalore. I couldn’t understand the first woman I spoke to and she was completely useless. She put me on hold and got another person on the phone. I couldn’t understand her either and she was just as useless. I was told I was going to be put on hold and moved to Level 2 support. I was on hold for 5 minutes before I hung up. I went over and fixed my own problem. If their goal was to teach me self-sufficiency then they succeeded. If it was to offer support, they failed. I can tell you there are 2 Xerox contracts that will not be renewed when they come due.
“I was on hold for 5 minutes before I hung up.”
What is the deal with this? Is it policy or just a cultural thing?
Had to call HSBC re a billing error. 2 calls, neither understood the issue, asked for a manager, both put me on hold…it has happened with Apple as well. Went to a branch of HSBC and simply closed the account, to forestall such annoyance. I guess when I hear an Indian voice on a customer service call, I should hang up, as it is a dead-end.
HSBC are the same crooks who used to be Household Finance. They are a bunch of shady @ss scammers. It’s believed that some day Best Buy and HSBC will be charged with racketeering. Closing that account was a smart thing to do.
What do we make I can afford to buy ?
deflation.
Unfortunately, its very painful.
Yay……That will make all well.
I try to buy American when it doesn’t break our budget. (Our newly bought furniture was actually manufactured in VT and Ohio and I have a washing machine built in Ohio as well..)
But good luck with it. Despite our semi-activily trying to buy here, our 2nd grader knows how to read “Made in China” without sounding it out.
since almost all my furniture was found on the street, i’m not too choosy as to where it was produced. but considering incomes of the people who throw the stuff out, i only pick up the high quality merchandise.
i just found a beautiful captain’s black rocker with hand stenciled sepia design on the back, and before that a beautiful custom made oak desk and chest set, custom made by a high-end boston joiner.
i could make a good living just foraging for stuff on the upper west side of manhattan, and selling it on ebay.
in fact i do!
Congrat!
On a more serious note, and I do not mean to insult your intelligence. The CDC has reported an unusually higher number of staff infections and bed bugs! Be careful–OK?
Lysol and whatever kills bed bugs. (ew).
Sincerely,
Leigh
in last week’s nytimes “the hunt” column, a chronicle of the difficulty in finding a decent place in nyc, an undeserving young spoiled-brat couple, who had ditched a perfectly good place (1 of 5!) because it didn’t have a washer/dryer — end up in a place uptown infested by bedbugs! what perfect kharma. i don’t think i’d want to broadcast to the 10 gazillion nytimes readers if i had just moved into a place infested by bedbugs. what people will do for fame!!! (or public humiliation… or any public recognition.) i assume they’ve both commited suicide since the article was printed.
p.s. leighsong: i never pick up anything from the street with cushions!
in last week’s nytimes “the hunt” column, a chronicle of the difficulty in finding a decent place in nyc, an undeserving young spoiled-brat couple, who had ditched a perfectly good place (1 of 5!) because it didn’t have a washer/dryer — end up in a place uptown infested by bedbugs! what perfect kharma. i don’t think i’d want to broadcast to the 10 gazillion nytimes readers if i had just moved into a place infested by bedbugs. what people will do for fame!!! (or public humiliation… or any public recognition.) i assume they’ve both commited suicide since the article was printed.
p.s. leighsong: i never pick up anything from the street with cushions!
I would never insult your intelligence. Honest folk are humble ones. My best guess is you are honest and humble.
You are diligent
I would never insult your intelligence. Honest folk are humble ones. My best guess is you are honest and humble.
You are diligent and frugal…I will learn much from you!
Best,
Leigh
Oh man the great stuff people throw out in Manhattan…..all because nobody has any way of transporting it. I lived on the East side 60’s 1st ave. for 5 years….yes i’ve sold thousands of dollars of stuff found free on the UES on ebay.
But here is the big problem in NYC if you call the Salvation army or goodwill it could take 2 weeks or longer for them to show up if the stuff is not on the first floor or easy to get to….they have labor shortage, plus insurance worries for moving the stuff down 5 flights of stairs. Sad to see so much good stuff get crushed.
I have seen $10,000 Worth of Ethan Allen and Broyhill, and better stuff for free…but its all on a 5th 6th floor walk up… remember delivery was FREE.
I just picked up 2 I-macs Free, 600mhz but OSX10.4 still its my first mac, so i can have fun with them, one is downloading music so if it gets a virus, i’ll just toss it.
That (curbside decorating) is beautiful! It (almost) makes we want to move to Manhattan. People in VT aren’t as high end. They are more likely to throw out actual junk. Plus a somewhat busy schedule forces us into actually buying furniture. *sigh*
we = me
I really miss Manhattan. I found so many great things in the trash when I lived there. My best find was an Issey Miyake sweater, in perfect shape. California is also great since people redecorate their houses, and throw out their entire wardrobes, so often.
Here in Maine, everyone is frugal. There are no bargains anywhere and no good resale shops. People keep their furniture, and wear their clothes, until they fall apart.
Bicoastal, come on down to Stonington and go to the Church of the Nazarene’s thrift shop on the road to Burnt Cove, open Tu 9-12 and Th 6-8 p. Two dollars a bag. Lots of junk but I got a London fog raincoat there, and similar sometime finds.
“…Comment by Leighsong
2007-09-22 14:48:34
Congrat!
On a more serious note, and I do not mean to insult your intelligence. The CDC has reported …”
Ethanol (principal active ingredient of Lysol)…a microbiologists best friend!
~wink~
“Buy American”?. But the only thing the US produces anymore is DEBT!.
Not true, boy I’d love some Thomas Moser furniture, or kitchen cabinets by Henrybuilt, but way past my budget.
I agree with you MBA. Buy American. That might be the only way out of this mess. It might be the only solution. You are genius
I agree with you MBA. Buy American. That might be the only way out of this mess. It might be the only solution. You are genius
Is a Toyota made in America considered to be American or Japanese? Is a Ford made in Canada considered to be Canadian or American?
If the profit goes back to Japan, then even if its made in America, its Japanese.
If 80% of the parts and the assembly are US, then the US economy gets most of the benefit, even if 20% of the cash goes to the shareholders (not all of whom are in Japan).
Most American-brand cars have plenty of imported parts, and some are assembled in Canada and Mexico.
I own Honda stock (through a mutual fund). So some of the profits from American made Odysseys flow to me. Is it American?
In fact, Honda’s even listed on NYSE as an ADR. So is it more American than a Canadian-made Chrysler when Chrysler was owned by Daimler?
Personally I choose the product that’s right for me. Protectionism doesn’t work for me on the selling end either, my company sells 75% of our product overseas.
Welcome aboard the $hip of Fools…
“A Prudential agent selling one home said it’s been on the market for 67 days with no inquiries. The owners owe $590,000 and stopped paying on the house months ago. The house is likely to get marked down this week to $489,000, perhaps even lower. Others are in the same boat.”
I smell a prolonged lawsuit against a bankrupted homebuilder…
“‘Looking at the housing market, it creates frustration and suspicion that our partnership is not functioning as it should be,’ said Councilwoman Christina Shea.”
‘I just didn’t think that college kids could afford this,’ Schoch said.”
Probably their parents “investing” in a Condo via a heloc. Happens all the time here in Santa Barbara.
Yes, happens in SLO too.
As far as the Rancho Coronado condos are concerned, all the HOA Board needs to do is contract with a law firm to begin enforcement proceedings against the culpable owners. Most likely, it will all begin with a letter(s) of warning to specific owners.These problems are most definitely addressed in the C & Cs and reference will be made to specific clauses signed or initial by the property owner(s).
In addition, the police should be called when noise, nudity, etc are exhibited. Partial nudity is borderline criminal and under CA law, landlords can be held respon$ible for criminal activity performed on their property. The HOA can sue the landlords for civil penalties as well.
If there are ANY minors who are exposed to this student conduct as referenced in the article - the police should be told this and they WILL show up and investigate. Some of these students could wind up ordered to wear a satellite-tracking device for the rest of their lives.
~Misstrial
These problems are most definitely addressed in the C & Cs and reference will be made to specific clauses signed or initial by the property owner(s).
Yes, write a letter to the Board, the Board will then write a letter to the homeowner, continue back a forth for a year or so.
In addition, the police should be called when noise, nudity, etc are exhibited…..
Yes, call the police, or sheriff in this case, make sure to say nudity for quicker responce. Sheriff’s will get a good laugh on this call.
If there are ANY minors who are exposed to….
Just call the father of the child, he will take care of it. He might join the party, but what the heck.
puritans still around. what the dif. between a bra and a bikini?
call the police? are you kidding me? perhaps they should ad that to the
patriot act.lol
As long as it doesn’t endanger others, that’s ok. But bodily fluids, especially fecal matter, don’t belong in pools, walkways or parking areas and I would definitely be contacting the owner and the city health department as well as the cops and the HOA.
That’s disgusting. And sad commentary on our next “educated” generation, and what they think of their fellow human beings.
I agree with you Misstrial. Don’t let desmo and panicearly discourage you. It is important for us to maintain our minimum standard of living, and not to allow selfish spoiled brats to take over the world.
Every college-student-parent in America has heard the “sure thing” investment strategy of buying a condo for their kid to live in while going to college.
Methinks this will be another investment myth along the lines of “real estate always goes up” to be destroyed Shumpeterian-style by the grimy aftermath of the housing bubble.
Howdy and Grumbles. OMG what perfect names to describe this housing bubble.
I love that Grumbles had no comment.
They gotta be manufacturing these names… Grumbles?? LOL
ler
Did he have no grumbles to boot?
Ha ha, and it’d be really great if we could get a quote from “Struggles the Realtor” or something like that.
“‘Originally, the house was priced for over $600,000. We ended up getting this for $481,000. So we have something like $140,000 in incentives,’ said Sheldon Kahoonei.”
A half million dollars is a lot of money to owe someone, especially when you have as little discretionary income as most Americans.
No kidding, I wouldn’t trade spots with Sheldon for all the lead paint in China.
To be fair, all the lead paint in china is probably worth more than 600K
Don’t you love the CEO of Mattel apologizing to China. He expressed regret about US compaining about them intentionally poisoning our kids. After all money made by Mattel is more important than a few children dying. Enjoy your Mattel toys. Mine went into the trash.
Yeah, I think in doing what was supposed to be a simple “save face” move to not offend their Chinese suppliers they offended more Americans more deeply than they could have ever imagined.
I know most Americans memories are pretty short and a few (like my MIL and Dad) won’t care either way. (Is it cheap? Is a toy? - into the cart it goes.) But still, some of us do care.
The weird part I was willing to semi-forgive Mattel before this “Let’s bend over and kiss the Chinese behind” thing happened. Now it’s pretty clear that Mattel was in on it on some level, too. Mattel makes a lot of toys but there are a ton of other suppliers, too. When they open an American or European plant, I’ll consider buying from them again.
Since others have been making jokes about Mr. Grumbles and Howdy, I am sure we can think of something clever to say about Mr. Sheldon Cojone.
That’s Mr. Sheldon “Loony” Kahoonie to you, bub.
I had expected a second round of foreclosures after the first big round.
1) All the people with ARMs have their ARMs explode and get foreclosed on.
2) Prices come down A LOT!!
3) Second big wave of foreclosures as people that can afford thier houses, choose not to since they are WAY upside down.
The way credit is tightening, foreclosures are jumping and prices are crashing, that “second wave” will likely be hitting at the exact same time as the first wave peaks.
Looking like commercial should be crashing about the same time.
Jan-Mar should be a whole new level of pain.
3) Second big wave of foreclosures as people that can afford thier houses, choose not to since they are WAY upside down.
Upside down and have no money at stake. Why continue to pay a $500,000 mortgage when you put zero down and the house is worth $250,000?
Bankruptcy was @ one time, a horrible stain upon a person’s character and identity…
Just a few decades ago
kinda like going to the “discount window” was once considered the sign of a bad bank?
If the last downturn is any indication…people simply stop moving, waiting for the market to turn around. Many will be in for a long, long, long wait.
The big problem this time is that many of these borrowers can’t afford to wait for prices to go back up again ,and they can’t refinance into better loans under these tight money market circumstances .
I remember when I bought a house about 25 years ago ,it went down in value twice during that timespan ,but it was no big deal because I could afford my payment .Houses should be bought to live in ,not a 2 year investment scheme based on real estate going up .
last downturn, the vast majority stuck it out and did not walk away. People seem to have changed. I think they will walk.
Last down turn, houses were 15% overpriced at the peak. Wait 5 years and 3% inflation and prices are back.
This time, houses were 100% overpriced at the peak.
There is a HUGE differece between being 10% down with hope of being even in a few years, and being 50% underwater with little hope of getting back to even in the next decade or more.
also, last time oil patch went down in the eighties- midwest never bubbled- this time is differnet
Hi Bikegirl:
The problem is that the vast majority of people who bought houses over the past few years purchased with loans that allowed to them to pay temporarily low monthly payments. Once their loans reset (just started to happen last year), they have no choice but to sell because they can’t afford to pay the full mortgage payment (full interest + principal + taxes + insurance, not to mention maintenance).
Walk, walk, walk… only seasonable thing to do. Keep paying on a upside down loan for years and years? Don’t worry. You will be getting a “new ” credit card in the mail in a few months. Banks still need their loan payments, late fee charges, as the printed money has to go somewhere to generate income even if only a few keep paying so that they can keep the doors open. No income stream no need for many banks to stay open.
I agree because even if we bail out people who are underwater can any of these people really afford the $500K house at Zero interest for 30 years?
Thirty years! Those people can’t see past thirty days!
How much a month is all that matters nowadays.
People will walk because they not only have no skin in the game but they can’t afford the adjusted up payments ,some couldn’t even afford the teaser payment .
But if you look at what the objective was for alot of these FB’s in purchasing these homes to begin with,it was simply a short term investment objective,(cash free gains in 2 years ) .Many of the other FB’s were pressured into buying out of fear that they would miss the boat and never be able to buy because real estate always goes up . Now that these fear buyers see that real estate can crash ,they feel like total fools being up-side- down with their equity with a high mortgage payment . All these FB’s got set up for a big fall with this housing mania/easy lending cycle .
“Thirty years! Those people can’t see past thirty days!
How much a month is all that matters nowadays.”
Right John- Joe sixpayment has the attention span of a flea, and the time horizon of a fruit fly.
Right John- Joe sixpayment has the attention span of a flea, and the time horizon of a fruit fly.
You have a higher opinion of J6P than I do.
I won’t be buying until at least the 3rd round of foreclosures. Basically, we’re going to undo 3 years of home sales. That doesn’t mean every sale gets undone. But since the last 3 years have had homes sell at multiples of the normal rate… effectively 3 years of inventory is about to be liberated.
Got popcorn?
Neil
“‘It’s beyond ‘Animal House,’ she said.”
Otter: Flounder, you can’t spend your whole life worrying about your mistakes! You fu*@ed up - you trusted us! Hey, make the best of it! Maybe we can help.
Toga Toga…
I think you mean
rate cut, rate cut…
Because hey, the “hair of the dog” is the best cure for a hangover, right?
I think we’re but a few weeks from inning #3.
Got popcorn?
Neil
Yes, Neil. Some idiot or another on the news the other day said that. It was totally infuriating. Is this man advocating economic alchoholism? Because last time I checked, alcohol addiction was bad for you. Not a cure for a hangover, but actually the cause of liver cancer, joblessness, domestic violence, homelessness, etc., etc.
There’s always Flashdancing…
“‘It’s difficult to find a job,’ said Christine Bonanno, a Pittsburg resident who lost her job at a Walnut Creek escrow company when the housing and residential mortgage industries collapsed. ‘A lot of people were laid off from my company. I haven’t found anything yet since March.’”
As my barber noted today, its easy to change careers until you hit about 40… And you know everyone and their sister went into the REIC.
Just as I noted that we’ll unwind 3 years of home sales, we also have to unwind 5 years of job creation.
That a little “oops.”
Got popcorn?
Neil
“‘Looking at the housing market, it creates frustration and suspicion that our partnership is not functioning as it should be,’ said Councilwoman Christina Shea.”
David Scatino found out that his partnership with Tony Soprano wasn’t all that great either. It looks like the builders are doing a bustout with the local stooge governments.
Which local stooge governments you ask?
Most of em’
I’ve noticed the stooges who run local government are usually sleazy developers or ambulance chasers.
Ya beat me to it NY!
I had an ephipany when living in NW FL. I went to every single zoning meeting and submitting my objections (to unstainable developments) in writing before the public gathering. I was the lone voice.
The mayor of Niceville FL, Randy Wise, is a builder.
I do believe *we* can fight city hall, I just had a heck of a time convincing my neighbors of this fact. (Wonder what they’re thinking now?).
Perhaps I can make a difference here in Wisconsin (crossing my fingers, as it’s already overdeveloped IMHO).
Leigh
This is what you get when you hang with the S & M people…
“Residents of Rancho Coronado just south of Cal State San Marcos say they are tired of the noise, trash and alcohol-induced behavior by students living there.”
Anybody who lives in a gated community deserves to have college students puking into their swimming pool.
“Anybody who lives in a gated community deserves to have college students puking into their swimming pool.”
So we work hard and save our bux and we can’t choose where/how we want to live?
Exactly why you buy in a gate community, to keep the riff-raff out. If the rules say no rentals then the HOA needs to enforce the rules with hefty fines.
I live in a gated community….
My neighbor’s daughter got a new boy friend that drives way way to fast and he sneared at me when I asked him to slow down because the kids playing in the street….
Well, I went to the gate and had the 24 hour guard deny him access in any car he is driving…
Now when he visits he parks outside the gate and walks in.
He can get access again if my neighbor signs a form assuming liability for him… not going to happen
well done.
In a neighborhood with kids it was me, (at the time single, no kids) who had to call the cops. Now since the kid always sped by at 4:30pm… it wasn’t much work for the cop to nail him.
Live free, but that doesn’t mean you can be reckless.
Bummer the REIC wouldn’t listen to that…
Got popcorn?
Neil
I second that, Bill.
BobR: why the intolerance, my friend?
‘Gated” and ‘community’ are antithetical. Perfect for South Californ ia,though.
Hi Bill,
Gated communities are suppose to make us feel safe and protected from such insidious behavior.
We’re currently renting and serious cash buyers.
This frightens me the most–who will be my neighbor (uhoh–I feel a song coming).
We’re looking for ranch with man cave (hubby’s wood shop), and some land.
I agree–we are able to choose where/how we want to live. Unfortunately, even the best of plans can be ruined by the aweful few.
Best,
Leigh
Leighsong: May God guide you in your search: you secure in your home, your husband occupied making things that make somebody’s life better. Funny nobody’s selling it!
Well, I live in a gated community that is really good ,so I think it depends on the project .
45 and Wiz,
Thank you for your generous comments. Hubby’s man cave is for helping others, as we are not wanting $$.
If not for this forum, we may have done some seriously dumb stuff!!
Best to All,
Leigh
Gated community = false sense of security
We have had a no crime rate in this project ,so it must be doing something . We have security guards running around as well as screening any cars that come in . Criminals go for easy targets usually . But, you have to pay for this service and I agree with you that it can be a false sense of security .
Anyone who pukes into swimming pools (barring some horrible illenss) deserves to be evicted AND have a letter written to their parents.
What kind of HOA worth its salt couldn’t deal with college kids? If they can fine you to death for having the wrong color curtains, dealing with partying kids should be a breeze. Just fine the owners $1,000 for the first offense, $5,000 for the second, etc.
Wonder if the alternative to allowing college tenants is a whole lot of vacancy, abandonment, foreclosure, non-performing HOA units, etc. The HOA is not in any better position to sell the damn units than the “owners” would be.
HOA are mostly bark and no bite. They make a big deal about B.S. like your aforementioned curtains example - but whimper away like Ben Barnake when it comes to serious matters. I’ve lived with HOA for just short of ten years now - and that’s been my experience.
HOA’s are composed of board members living in the community. How effective they are depends on their talents and abilities to manage a development. If your board isn’t doing a good job, run to get on the board so that you can do a better job.
Agreed. IMHO HOAs are like government–clueless and ineffective. I mean no disrespect to those few HOAs that are effective.
Filed under OH CRAP NOW WHAT!!!!!!!
“U.S. bonds collapsing! Foreigners abandoning dollar! (by Martin Weiss)
9/22/2007 7:20:00 AM
If you thought the dollar’s collapse would not affect you, think again! Here’s what’s happening:
First, U.S. bond prices are collapsing: In the two days after the Fed’s rate cut, the price of the long-term Treasury bond plunged more than two and a half points, including the worst single-day plunge since September of 2003. This means bond yields, which move in the opposite direction, have surged.
Second, if this trend continues, 30-year fixed-rate mortgage rates, which follow long-term Treasury yields, will also surge — precisely the opposite of what the Fed had hoped.
Third, all this could lead to higher mortgage rates across the board — both on the higher risk subprime mortgages and on the supposedly lower risk “prime” mortgages.
According to textbook theory, this wasn’t supposed to happen! But it is happening. Why are Treasury yields surging (and their prices plunging) even while the Fed is cutting its interest rates?
Simple: It’s primarily because of the key factor we’ve been hammering away at day after day, week after week: The U.S. dollar! It’s …
Because foreign investors hold over $7 trillion in U.S. dollars, mostly in U.S. Treasuries …
Because they’re taking a beating in dollars and starting to dump them …
And because when they dump their dollars, they have to dump their U.S. bonds along with them. Heck, even before the Fed’s latest action, demand for U.S. bonds was down a staggering 80% in just one month, with the biggest selling coming from overseas.
Now, the U.S. Dollar Index has fallen well below critical support levels to within a fraction of a point of its lowest level in history and signaling even more dramatic declines ahead — just like we told you it would!
Now, gold has spiked to over $735 per ounce … oil has surged … food, water, industrial metals, construction materials and just about every other natural resource you can name is soaring in price.”
I don’t know if the USD declines ahead (vs foreign currencies) will be “even more dramatic,” but let’s just suppose that they will continue in some fashion. That would suggest buying some basket of foreign govt bonds. AUD, NZD, BRL you can do through Merrill Lynch or probably anywhere. ISK you can do through Winslow Crocker & Evans in Boston, and I’m sure there are plenty of other places but not just “anywhere.” The euro, the yen and the pound don’t yield enough in cash flow to satisfy my prejudices.
I believe this is the exact reaction the feds anticipated. They are trying to bail out the banks not the j-6 with the rate cuts. The j-6 is already screwed and can’t refi or sell. Banks have no money for new loans so higher rates will discourage borrowing. Prices on homes will continue their snowball down and we can all sit here and laugh our asses off and talk smack about all the deals we are gonna get. Thanks Jimmy Cramer for begging “your boy Ben” to get this party started.
“Meanwhile, home builders are slashing prices and offering incentives to attract buyers. Covington said builders won’t offer concessions forever.”
OK then what ? Double the asking price then take out a ad in the local newspaper and say “this week only half off sale” won’t last long once in a lifetime sale.
They are correct the builders will not be offering concessions forever — THE BANKS WILL BE GIVING THE CONCESSIONS!
They are correct the builders will not be offering concessions forever — THE BANKS WILL BE GIVING THE CONCESSIONS!
“‘Their home prices have dropped, and a lot of them owe more than they have and they can’t refinance them,’ said Bill Erb, Diablo Funding Group. ‘So they’re going to end up losing them because they can’t make the payments.’”
This is why the bailout talk may turn out to be nothing more than a bunch of hot air. These folks are beyond anyone’s help.
Also more fresh For Sale signs in my area, the guy down the street from me lived in his (way overpriced) house a little over a year and today a fresh For Sale sign in the front yard. Then there’s the guy around the corner who has a moving sale going on for three months now slashed his price from 249,000 to 219,000. My gut feeling is it’ll all be Section 8 in a few years.
LOL! Is this the same section 8 as in Klinger plan from MASH…
Section 8 is government-subsidized rent in CA.
Although unfortunately for the neighbors there’s some overlap with Klinger’s Section 8…
“Bonanno said she is willing to take a job in pretty much any category besides the mortgage business. And she is flexible on wages. ‘I don’t want to stay with the mortgage industry with how bad it is right now,’ Bonanno said.”
I see brass poles and “would you like to GO BIG with that order ?” in her future.
Maybe she can do what this one did grow pot ! http://www.kfoxtv.com/news/14177936/detail.html
WOW. I’m speachless.
Can’t use the old “medical marijuana” defense…LOL.
er…speechless.
What else they going to do with all those abandoned buildings?
Meanwhile, in Santa Clara County and Santa Clara (the city), new records are leaping higher weekly, and sometimes days in a row.
In the county, according to foreclosure.com, there is a new high total (3,692) of combined foreclosures (573 - a new high), pre-foreclosures (2064, a new high), and bankruptcies (992, a new high). I believe these numbers are tracked over multiple days until the owners’ situations are resolved, but they do indicate a rising tide of activity in SC county.
In Santa Clara the city, (according to realestate.yahoo.com) there is what I believe is a record number of houses for sale - 344. On June 8 of this year, that number was 224.
Realtytrac.com, as usual lists more than foreclosure.com. Today, they list 2936 pre-foreclosures…the fifth record high in 5 days! Things in Santa Clara County are getting bad FAST!!
Hey Sally
Don’t get all excited yet
I remember in the early 90’s when we only had 600 sales per month and 13,000 listings…ie 26 months of inventory. We are still a long way off from that point, also at that time we only had 3,000 agents vs 13,000 today in Santa Clara County.. this time it will get worse 
Ca_realist - Was that 600 sales per month for SC the city or SC the county?
Do you have a site where I can find the MLS listings for a whole county? The number of MLS listings I found were for SC the city. Thanks for any info!
Hi Sally,
Hope you are still around. Try this http://www.mlslistings.com/
Thanks so much!
:)
I just found out that I’m subprime!! Here I am, a smug San Francisco renter with heretofore nearly perfect credit (over 800 FICO score when I last checked 6 months ago), but this morning I pulled my 3-bureau credit reports and saw that my score had dropped to 670, which is freaking subprime!
Why? Because there’s a $65 medical collection account listed on the report. First I’ve heard of it - no one has contacted me seeking a dime, and it’s all the more ludicrous given my perfect payment history on all my accounts, not to mention $45k sitting in my checking account alone, that I am now rated equivalently to someone who has had their house foreclosed upon!
All the more annoying as I was just about to start looking for a new apartment. Obviously that’s now on hold as I now have to find a really good lawyer to see if I can get this fixed. (Anybody know a good credit lawyer in SF?)
So cautionary tale to all my prime renter compatriots - check your credit reports OFTEN.
You got to challenge that collection account . I got a bum charge put on my credit card last month from a restaurant that I have never been to .I am beginning to think that I’m going to use cash when I go to restaurants anymore .
But if the charge was from a restaurant you’ve never been to, what use is it to pay cash at the restaurants you do go to? What you need to do is pay cash at the restaurants you never visit! (???????)
Good analysis. LOL!
I have always been very nervous when at the end of the meal they take your credit card and disappear with it. There have been cases where dishonest restaurant help run your card through a reader/memory device they keep in their pocket to steal your credit card number.
My concerns is not just credit cards. They have tried to shortchange me on several occasions when I was paying with cash. This is easier to do than most customers think, since most customers either do not know how to subtract or do not bother counting.
There are other reasons why I do not eat out much (mainly the rancid grease, and hepatitis). And there is also the joy of cooking
The restaurant businesses will have to change a lot of things before I feel comfortable spending my money at an establishment.
Az-lender welcome back! You have been in hiding…
Please, please, please tell me you will fight this!
Best,
Leigh
Hell yes I’m going to fight this! I’m going to get an attorney ASAP and bring a defamation lawsuit if necessary. I don’t see how they have a case if they made no good-faith effort to collect the alleged debt (or even inform me of its existence) before destroying my credit!
“…not to mention $45k sitting in my checking account alone…”
No offense dude, but put your money to work for you. The dollar bill is on the skids and someday there’ll be real deals to be had again in RE.
Fighting bad credit reports is very, VERY easy.
The FCRA and FCDPA federal laws give you many rooms to maneuvar. The first thing you MUST do is sent a “Not mine” letter to all 3 credit reporting agencies. Don’t do it on the phone, or online. Just a regular stamped letter (not certified, either).
They have 30 days to verify with the collector. If they don’t remove it, then you have to start a certified letter writing campaign to the collection agency, asking for validation (not verification). They have 30 days to respond. With no response, you send a second request for validation. If no response after 30 days, you sue them in court. I sued 2 in court, Pro Se, and had them settle by dropping the collection completely and paying me $500 per hit.
It’s time consuming, but quite simple. I helped a friend remove all his baddies from his report in less than 1 year. He had 5 false ones, 3 with big mistkes, and 1 that was possibly correct (for $29 or something) but dropped off without him even contesting it (he was going to pay it, but the reporting agencies dropped it when contesting others, odd).
On my report last year I had 3 collections and 1 lien (lien was correct but will fall off due to incorrect information). The 3 collections were all false and took me over 6 months to get removed.
You are a shining example, and a dilligent one–a true blue for justice!
Thanks for the extra dose of confidence!
Leigh
While false charges might be easily corrected, the problem seems to be that jbunniii actually owes this medical bill.. At least, there’s been no mention of it being elsewise.. just that they made no good-faith effort to collect the alleged debt (or even inform me of its existence)
gonna need an attorney, imo.
Yep - at this point I honestly don’t know if it’s legitimate or not. I would happily have paid it, had anyone bothered to let me know I owed them anything. So I’m hoping that an attorney can slap the collection agency around on the basis that they didn’t go through what anyone would call a reasonable effort to collect the debt before trashing my credit. Certainly no jury would side with them on this, if it comes down to a court case. I’m hoping it won’t. In any case, I’m contacting a lawyer first thing tomorrow.
P.S. The thing that has been eye-opening about this is just how huge an impact a negative item like a collection agency entry can have on one’s credit score, even when it’s over a trifling sum like $65. My FICO score dropped literally 150 points to 670, which is probably not a whole lot better than someone would have if they had their house foreclosed or car repossessed! Freaking amazing.
Thats why I pay th $15.00 a month to truecredit.com I can check all three reports and scores anytime. Plus they alert you when something changes. Anyway call collections Tell them you will sue the sh$t out of them if the don’t have proof. If you do owe ask them if you pay in full today will they have it taken off your report. They can remove it if they want to. You may have to bribe them but they have the power. Also you can petition this with the three majors.
“Part of the problem is that owners aren’t supposed to rent their units, Jennifer Schoch said, but some do anyway.”
What?? What’s the use of ownership if you can’t rent it out?
““Students have been running around intoxicated, wearing bras and no shirts, and leaving bodily waste and vomit in the community pool and on playgrounds, said Maria Manning, who moved into a condo about nine months ago.””
I bought a beautiful home in Indiana without even thinking about how close it was to Greek row. What a mistake. A nice neighborhood destroyed by drunken little s&^%s at 2am every Friday and Saturday nights. Cops didn’t care. School didn’t care. Greeks certainly didn’t care as they threw their beer bottles into people’s yard which was great for my dog’s feet.
I do think the anger and pressure are building in this country. With two vigilante films just released are we seeing some signs that maybe the better people will stop allow the trash in society to trash all of our lives? (I’m not thinking shooting the students, well not until the second or third offense, but pushing anyone throwing up in a pool into the pool sounds good to me.
)
[Cops didn’t care. School didn’t care.
I’m not thinking shooting the students, well not until the second or third offense,]
Perhaps the neighborhood hiring an off-duty cop would help.
Perhaps those new non-lethal microwave weapons could be put to use too.
I bought a beautiful home in Indiana without even thinking about how close it was to Greek row.
How does anyone not even think about the place where they are about to live? My rule of thumb; never move to a neighborhood that you have only visited during the day. Go there on the weekend at night. But doesn’t everyone already know that?
This person may have purchased his house during the summer months when the students aren’t around. I would agree that it is a good idea to do a fair amount of homework before making a purchase though.
I think that all students should be required to read Until Proven Innocent to get an idea as to how much trouble they can get into for bad behaviour.
“Meanwhile, home builders are slashing prices and offering incentives to attract buyers. Covington said builders won’t offer concessions forever.”
“‘It’s bargain time,’ he said.”
how can this guy say its a bargain when whoever buys the homes will be upside down in it after he signs the contract. talk about trying to revive a dead horse!
Gary Grumbles, local head of the homebuilding giant, would not comment on earlier layoff rumors Wednesday. He did not return calls for comment Friday.”
oh shutup!! Friends say ever since he was a kid, Gary was very careful not to be caught ‘grumbling’ so as not to get humiliated by other kids. “It takes a lot to get him to……you know” said a co worker. “When he really has too, he gets in his car and……you know”
test
anyone having trouble posting?
test
so far, so good. had trouble several other times this week
“‘Originally, the house was priced for over $600,000. We ended up getting this for $481,000. So we have something like $140,000 in incentives,’ said Sheldon Kahoonei.”
Sounds like they bought it for 481K. The 140K in incentives is hot air; no wonder no one takes real estate seriously anymore. Maybe that’s why half of the newer houses look like FrankenMansions (1/4 vinyl 1/4 brick 1/4 marble 1/4 some other weird material and the house is 75% garage for your huge SUV).
Actually these homes near Tracy were around 200K so 481 is still way too high… better deals around 300k make more sense but even that may be too high.
OT -
Has anyone looked at trading Housing Futures oon the CME?
http://www.cme.com/trading/prd/re/housing.html
*****
“CME Group Extends Offerings of S&P/Case-Shiller Housing Contracts
PRNewswire-FirstCall
CHICAGO
(:CME)
CHICAGO, Aug. 8 /PRNewswire-FirstCall/ — CME Group, the world’s largest and most diverse exchange, announced the extension of its housing futures and options contracts based on the S&P/Case-Shiller® Home Price and Composite Indices out to 60 months, scheduled to begin September 17.
Contract months extending out 18 months will be listed on a quarterly cycle of February, May, August and November. Contracts listed 19 to 36 months out will be available on a biannual schedule of May and November contracts. An annual November listing schedule will apply to contracts listed 37 to 60 months out into the future.
The expanded listing schedule for the cash-settled futures and options contracts on 10 cities and one composite index is in response to customer requests. Contracts listed further out will allow for more opportunities for protection or profit in up or down markets in the same way that investors manage risk for other CME Group products such as agriculture or financial contracts.
CME Group began listing housing futures and options in May 2006. The 10 cities include Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York City, San Diego, San Francisco and Washington D.C., in addition to the composite index containing all 10 cities. The Housing indices were developed in cooperation with MacroMarkets LLC. For more information, please go to http://www.cme.com/housing.
*****
Right now the futures are predicting four years of declining prices…
http://www.housingwire.com/2007/09/19/back-to-the-futures-investors-see-four-years-worth-of-housing-slump/
I couldn’t find a broker willing to deal with me a year ago. I’d love to directly short housing prices.
Wow, the charts in that link are really interesting. So Miami (no surprise) is the one the traders expect to decline the most, 31.7% in four years. Followed closely by San Francisco with a 27.6% decline. Feeling that these declines are understated, especially the nearer term ones (which are much smaller), I would love to trade these things if I knew how.
Futzing around online trying to figure out anything, I learn that the minimum value of an S&P/Case-Shiller future is $250 per point of the CS index, and the CS indices are 100 times the ratio of present value to year-2000 value (so for most cities covered, the indices were between 200 and 250 in 2005). So
$50K-$60K a pop. I suppose one could do it on margin, don’t know what the margin requirements are.
Yes, these are futures contracts, which means most people buy and sell them on margin. The overall contract is expensive. I also imagine one can buy/sell options on the futures as well.
housing has been 100% marginable over the last several years, so why shouldn’t futures or equities be 100% marginable???
What’s neat is that they don’t show what happens at +5 years, but from the slope of some of the curves, especially SF and the dark blue one whose name I can’t read, it doesn’t look like they’re about to go flat in the fifth year. So yes, four years of declining prices, and then some MORE years of declining prices!
the story of the noisy college students reminds me of living near arizona state university, and all the noise in an apartment i lived in for 6 months. the first three were great as i had no neighbors, but it went down from there. noise all the time either late into the night or early…some were not students and some were. I told myself i’d never buy a condo after going through that. because when you buy a condo, you buy a longtime neighbor too. atleast renting, i can move out! I even broke a lease once because the lady above had 7 kids running constantly. complex did nothing so i just moved after giving them notices of the problem, it never went on my credit report although they tryed to collect. too bad landlord…imagine paying 500000 for that..i’d sell and move
A friend of mine owns apartments rented out to students.
The rental rates can be lucrative, but you have to be prepared to almost rebuild the units every year due to massive wear and tear.
OT, but interesting: RE/MAX Realty agency files for Chapter 11 to avoid paying a former agent 400K in commissiosn…. I smell blood in the water.
http://www.news-journalonline.com/NewsJournalOnline/Business/Headlines/bizBIZ01092007.htm
More trouble for housing but many will miss the ramifications. A couple of politicians, Linda Sanchez of California and Brad Miller of North Carolina, are going to introduce a bill to help fb’s. The gist of the story is, that part of Bush’s bankruptcy bill, which he signed some time back to help his pals in the banking industry, and which stopped those going bankrupt from getting off the hook too easy, will be repealed.
If the bill passes, FB’s will be able to stay in the defaulted houses much, much longer before lenders can foreclose. At first, one thinks, “Oh, isn’t that nice.” However, look beneath the proposed bill and put yourself in the place of lenders. You would have to be pretty stupid to lend/invest money on property when, if the person defaults, you might not get your investment back for a looooooong time. What does this proposed bill do? Well, if you are an investor involved in mortgages, you will insist your downpayment is, say, 30% or 40% to cover the eventuality that you’re not going to be able to get your money back for a long time if the borrower defaults. That 30% to 40% being your cushion in such circumstances.
This is more evidence that the people we elect don’t know what the f*ck they are doing and are IDIOTS. Of course, the really bad news is that as years go by the Federal Government via the FHA or other departments they might create (for instance, TPFHA or The Peoples Federal Housing Department) will become the prime source of mortgages which again, tells me we elect IDIOTS. Of course, it will be funded by BBPP (a.k.a Ben Bernanke’s Private Printing Press.
“FBs will be able to stay in the defaulted houses. … At first one thinks, ‘Oh, isn’t that nice.’ ”
Ha ha ha. az_lender doesn’t think that even for an instant!
I’m with you az-lender . Wow ,if they pass laws like stated above the only lender would be the government .Talk about a tight money market ,nobody would want to loan . Can’t these goofs get a balance between rights of lenders and borrowers .
I agree. If this law passes, it will plug the whole system.
And I thought I was pessimistic predicting a 25% down payment would be the norm during the darkest days… gasp.
Got popcorn?
Neil
Sanchez knows exactly what she is doing. LOCKING UP VOTES. Everyone of the FB’s will vote for her in the next election because “she saved us from the greedy banker”. Her thoughts about the 30% dwn is that those are “rich” folks and probably vote republican so screw ‘em.
Sanchez knows what she’s doing. All those FB’s will vote for her in the next eclection because she saved them from the greedy, evil banker.
Gov’t becomes the only lender? How does that hurt Sanchez? A member of the gov’t who will control who gets what.
And if you have to put down 30% and can do it, you’re rich in her book and therefore a republican and if you get screwed, how does that bother her?
She sees this as a way to lock up votes.
Walnut Creek had a median household income of $69,000 in 2005. Realtor.com gave me a median home price (including condos) of $1,000,000. Non-condo/townhouse prices start at $500,000 and up. If home prices are on their way down in Walnut Creek, they’ve got a ways to go before becoming affordable to the median household. Even a 2/3 drop in the median price would merely bring valuations down to just under 5 times annual household income - still a tad high from an affordability standpoint.
This is why I think a lot of jumbo (sub-prime, Alt A or prime) debt is worth no more than 40 cents on the dollar, if that. With the kind of leverage that a lot of bond funds generally take, it’s not surprising that the debt markets have frozen up. Given the potential (and unknown) losses from this sludge, many of them are having to dramatically drop their leverage (which they used to juice returns) because they don’t know what much of this stuff is worth.
That is exactly why the Fed lowered rates. They are trying to inflate away the bubble. The real risk is that they inflate commodities and cause even more foreclosures.
They seem to have inadvertently pushed up l-t interest rates, which should have a fairly immediate impact on conventional (30-yr fixed) mortgage rates. Luckily nobody in Bubbleville can afford to buy with 30-yr fixed…
“This is why I think a lot of jumbo (sub-prime, Alt A or prime) debt is worth no more than 40 cents on the dollar, if that.”
Shhh! Don’t let the Fed in on your secret insight…
Here’s an unusual way of assessing whether we’re in a housing ‘bubble’ or not, and it’s magnitude if we are.
I was watching the classic Billy Wilder movie “Double Indemnity” yesterday, and the Fred McMurray voice-over at the beginning stated that Barbara Stanwyck’s home in the Hollywood Hills was one of those $30,000 dreams that you’d get a mortgage, but could probably never pay off.
If you go to the following inflation-adjust cost site:
http://www.aier.org/research/col.php‘
Here’s what $30,000 in 1944 dollars translates to 2007: $350,000.
Since the home looks like it would be valued in the $2,000,000 range in today’s dollars, and given what the average salary is today, I’d say we’re looking at a good 50% devaluation.
Think of the the “Double Indemnity” write-off!
To SFBayQT
Are those thin-walled ranch houses off Village Parkway in Dublin still going for $589-629K?
Most of the people who already lived there before the boom couldn’t think of buying there now.
The housing in the Tri-Valley (Dublin, San Ramon, Pleasanton, Livermore) is going to fall so badly it isn’t even funny. A bunch of clueless schmucks living in Fantasy Land who are unknowingly ready to get the Joshua Tree treatment. Biggest reason why I left CA. I will have to be content with the silent “I told you so” from a distance.
Are Gary Grumbles and In the Bag one and same person? Did In the Bag move from Mission Viejo to Bakersfield? That one is too good to make up.
OT: I’m very worried about my savings. I’m seeing that the current economic policies of this nation clearly favors the speculators at the expense of savers. In the meantime the dollars value is starting to tank. The outlook is grim and further devaluation against other currencies seems imminent. Particularly against the euro.
Does anyone know of any quality website like Ben’s here, but geared more towards discussing investing in euros and such?.
I’m REALLY afraid of being caught holding greenback monopoly money. After all, our national debt is ASTOUNDING (and growing), we no longer produce anything and we’re living WAY beyond our means with no savings. Our WHOLE ECONOMY resembles a FB situation!. Some economists say that the recent Fed rate cut is not so much to help FB’s but rather a financial gambit that serves to slow down the pace of the ever-growing national debt by devaluing it steadily against foreign currencies.
Greenspan himself recently admitted the euro might outbid the dollar as THE reserve currency for other nations. In fact, most industrialized nations have already significantly increased their euro reserves at the expense of the dollar. And the trend seems to be deepening.
I don’t even know if -as an American- I can even HAVE euros because unlike in most other countries the US does NOT readily allow people access to accounts in other currencies. Or am I wrong?.
“OT: I’m very worried about my savings.”
Get with the program. Stop saving, and start spending — DON’T FIGHT THE FED!
Cash (owned money) and debt (borrowed money) have some amount of purchasing power which increases and decreases, according to economic conditions.
A rise in interest rates decrease the amount of debt’s purchasing power, because the cost of taking on that debt has risen and therefore paying it back is more costly. Debt gets more expensive.
But, when interest rates rise, cash in the bank earns a higher return.. the bank lends it out at higher rates than before and savers get a higher rate of return… and things like Treasuries and CDs return higher rates.
The people who are complaining about higher interest rates and about the dollar’s “value” as compared to some other currency are those who are already in debt (of the adjustable-rate sort) or are people who want/need to borrow money soon.
Savers are in good shape.. the cash dollar is more valuable, in terms of raw buying power, than it was last week or last month.
There’s not much demand for it (at least so far), but it’s easy to do.
Everbank is a bank in Florida that offers accounts in various currencies. I think the minimum is $5k. It’s in the US so there’s not the extra IRS paperwork hassle of holding a foreign bank account.
Buy gold
A poster on another blog stated that the CDO investors used the face value of the CDO’s to leverage and get 5 to 10x’s the face value of that CDO by taking out a loan based on the lower value of that CDO’s face value .
So my question is what did the CDO holders use that money for that they borrowed against this junk paper to get ? Please don’t tell me that they invested in more CDO’s .
OK, I won’t
‘We ended up getting this for $481,000. So we have something like $140,000 in incentives,’ said Sheldon Kahoonei.”’
Can someone explain to me why anyone would pay $481K for a house in a central valley in CA? Why not just move to South Dakota or Utah? I just don’t get it.
They “own a home loan in California, baby”.
That makes them part of the “in” crowd.
They can commute to a $100k+ tech job in Silicon Valley. None of these in SD, not many in Utah. It is a long commute though, 1-1.5 hrs depending on time. anyhow, that’s why one would do it.
Plus, 2 hr drive to the beach,