Bits Bucket And Craigslist Finds For November 24, 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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Looks like a change of government here.
Oh yeah, the Australian elections, right? What’s the latest?
Mr Howard has, as the Liberal Party leader, conceded the overall election to the ALP headed by Mr Kevin Rudd. It appears likely that Mr Howard will in fact lose his own seat as well.
In Australia the Liberal Party is the main RIGHT-wing party, although it is not as far to the right as the Republicans in the US. They are in permanent coalition with the National party, which is a right-wing rural party. The left-wing party is the ALP (Australian Labor Party).
We too can celebrate losing our liberal spending leader, in just 14 short months…
In the Stiglitz article on Bush’s economic time bomb, the author commented that Bush didn’t expect the consequences of his economic idiocy to manifest so soon. He’s not used to having to confront any of the messes he’s made.
Palmetto - have a link to that article? Thx!
their taxes will go up-
any bets ?
Oh, yeah, and so will ours. Gotta pay the bills that shrub has hung like millstones around our necks.
Just remember that ONLY Congress has the power to raise or lower taxes. The President does NOT have that power, so when folks bitch about taxes, or Bush’s tax cuts for the rich, they need to look at their Congressman or women.
Hey WMBZ, Did any congressmen or senators say no to Bush’s budgets in the last 7 years? I don’t recall which party had a majority for those years…. help me out.
maybe those seeking higher taxes can start sending mo money now- wow, the housing counsiling biz will boom as the left adds government “solutions”
GSE’s and FHA and other “new deals” are offerings of the left
Duck, weave and hide. Bushes same party minions never got in the way of his massive spending. Fact.
It doesn’t really matter at this point which party in the US gets the reins in ‘08. And the long-held and cherished belief that Republicans are fiscally conservative is soooooo over.
If you truly believe in personal responsibility, and in fiscal responsibility, then it would seem logical that you will not want to pass on your mistakes to your children and grandchildren. And like it or not — and NONE of us like higher taxes, whether we’re liberal or conservative — your taxes are going to go up.
Oh, grow up! I don’t want my children paying for a massive deficit run-up. You want services, you want a road to the mall, you want your bridges not to collapse, you gotta pay your share.
Not that you can’t bitch about it-I do it too every April.
Right on Doug.
Phew…. All I can say is thank God I am not a member of either party. They are all on the same bus, and love the bickering the masses do between themselves. Sad to watch that crowd of self severing a-holes take a fine Country down the crapper. You can have the whole lot with perhaps a few exceptions.
‘GSE’s and FHA and other “new deals” are offerings of the left’
Uh-huh, uh-huh…
http://www.americandreamdownpaymentassistance.com/white_house_docs.cfm
Flat got flattened….. once again.
Lose one gain one.
http://www.ibdeditorials.com/IBDArticles.aspx?id=280712054839070
Sarko’s Stare-Down
No longer, he told the transport and energy unions, could their members expect to retire on full pensions at age 55 — and in some cases as early as 53. Instead, they must put in a full 40 years.
We ought to tell that to the police and untouchable fireman unions. Then to rub it in to the taxpayers, they file for disability so that 50% of their retirement is tax free. The politicians suck up to them and won’t touch their nana.
He’s gone.
http://news.bbc.co.uk/2/hi/asia-pacific/7109692.stm
We just lost Poland, and now Australia is a soon to be ex-coalition of the willing member in Iraq, one would have to think.
We still have Albania & Armenia with a total of 166 troops, to pick up the slack in the letter “A” countries…
Mansions go begging in the prime Detroit suburbs, right next to the lake, just north of the city, with the name and the history.
http://www.nytimes.com/2007/11/25/realestate/25nati.html
Recall our “what type of housing location will be hurt most/least” discussions. I think lots of people thought condos/townhouses in the most prime urban neighborhoods (none exist in Detroit), and houses in the most prime suburbs, would sink last.
If a house in Grosse Point is cheap enough, who wants to live in a McMansion in an inland exurb 40 miles away? Not to mention a downtown (or suburban!) condo?
“Brokers say that tastes have changed as well. Young high-earning professionals prefer newer homes, and will settle for older homes only if they have been completely updated. The 1920s homes in Grosse Pointe and Birmingham that have not undergone extensive remodeling are not nearly as attractive as they once were.”
I guess they like to drive in Detroit.
This is interesting. I can sort of relate to it. Now that prices are falling here in LA, there are actually a handful of places on the market that I can afford. I’m not about to buy one because I know there will be far better bargains in the years to come.
But since prices are dropping, we’ve been going to open houses to get a feel for what the housing stock and neighborhoods are like, so that when we do decide to buy in a few years we can make an informed decision.
Surprisingly, I have decided that I’d rather buy a McMansion. Most of them are pretty awful, but it would be kind of nice to choose the flooring, fixtures, etc. I can (and probably will) do this myself, but it would be kind of nice to buy a house that is already built to your taste. I can lay tile, install cabinets, etc. but the pros can do it in a couple of days, whereas my kitchen might be torn up for a couple of months while I renovate it on evenings and weekends.
Also, while I agree that McMansions generally aren’t built as well as older homes, this is NOT true here in LA. We’ve been putting up cheap tract homes for decades, and 95% of the 1950’s and 60’s housing stock consists of 50 and 60 year-old McMansions. My in-laws live in a stereotypical 1950’s tract home and the build quality is appalling. And the “custom” homes aren’t much better. One of my coworkers has a custom home in the Hollywood hills that is only 5 years old and it is in a state of constant disrepair. There are leaks, mold, the steel rail on the deck is rusting, etc. And that seems to be pretty typical. In light of this, McMansions just don’t seem that bad any more.
The main problem I have with McMansions is that most of the “upgraded” fixtures and materials used in the model homes are junk, and I am not sure that the builders actually have anything that is nice. But I am quite certain that if I desperately wanted to spend $200 on a kitchen faucet, I could find a much nicer one than the gaudy, tacky model the builder is offering for that price. Ditto the flooring, doors, paint, appliances, etc. Also, the exterior styling of many McMansions is pretty awful, although the brand-new ones do seem to be a little more understated.
OTOH, many of the houses in Grosse Pointe really are beautiful. Most places aren’t like LA, in a place like Grosse Point a 1950’s house is probably built to a far higher standard than a McMansion. Similarly, if I lived in NY I’d pay more, not less, for a prewar building. It’s an interesting issue. Maybe people are just very averse to renovations?
“Surprisingly, I have decided that I’d rather buy a McMansion”
Do you drive a Hummer? Just kidding
I’ll be on the lookout for a nice 1940’s built bungalow with hardwood floors. About 1300sq ft 3/2. Prices are already dropping like a rock. As soon as rent/buy ratio looks attractive–I’ll do some serious shopping.
DOC
WT: Younger people only want brand, spanking new houses. Very consistent with everything else we know about them. This recession will give young people a much needed attitude adjustment.
They can spin it anyway they wish but the Birmingham and Bloomfield Hills areas are going DOWN. Nothing can save them. I know these places very well and there are some really nice homes there but NO JOBS. Especially the $100k-$200k (and higher) salaries the people living there expect (or hope for anyway).
After the foreclosures I’d bet (with every other house on the market) these areas become sort of like ghost towns. Sad but thats the Michigan economy these days.
The word seems to be getting out on a more frequent basis, finally:
New Wave of Mortgage Failures Could Create a Nightmare Economic Scenario
http://tinyurl.com/2qp3rz
“We haven’t faced a downturn like this since the Depression,” said Bill Gross, chief investment officer of PIMCO, the world’s biggest bond fund. He’s not suggesting anything like those terrible times — but, as an expert on the global credit crisis, he speaks with authority.
“Its effect on consumption, its effect on future lending attitudes, could bring us close to the zero line in terms of economic growth,” he said. “It does keep me up at night.”
There’s more pain left for Wall Street: “We’re nowhere close to the end of the collapse,” said Mark Patterson, chairman and co-founder of MatlinPatterson Global Advisors, a hedge fund that specializes in distressed funds.
“I just assumed banks could stomach these kind of losses,” said Wendy Talbot, an advertising executive when asked about the subprime crisis outside of a Charles Schwab branch in New York. “I guess you don’t really pay attention to things until your forced to. … You put out of your mind the worst things that can happen.”
Yes, Wensy, banks are your friends, they’ll just say “ah, what the heck, we don’t care about losses, we’ll just pretend they didn’t happen.” Sadly, most people are of the ostrich mentality. Wendy, you ain’t seen nothing yet.
Why the f— would they ask an advertising executive about economic matters? Weren’t there any Realtors hanging around that they could ask? It’s amazing how worthless the media is. Of course I talk to people my own age and their views of the world are so f—ed up that I can see how the media is so easily able to hoodwink these morons.
Hey, Bill Gross, I thought cutting rates to save your a$$ would solve all of our problems? I hope you don’t sleep a wink between now and 2031.
Yesterday (on “black friday”) a woman on my bus who has a real job (ie, not a welfare case or McD’s employee) said, “That’s nice that those folks that have something saved up can go shopping. I was just blessed to have Thanksgiving [...] and what with this recession coming–”
The masses are waking up.
Party on.
http://www.suntimes.com/news/metro/665485,CST-NWS-shop24.article
Pretty funny. His nightmare scenario is zero GDP growth?
“Of course I talk to people my own age and their views of the world are so f—ed up that I can see how the media is so easily able to hoodwink these morons”
That’s the rub. Moronic sheeple too lazy to seek out the facts (not that they really want to know them anyway). Much easier to just turn on American Idol or a ball game and drool.
DOC
Have We Seen Worse of Mortgage Crisis?
Uh…I guess no if you read the above story.
Rate whiner - Pump Up The Volume!
As I said, older homes are dead for good.
Here’s my Black Friday impulse buy…
el lay times: 50 Cents
I bought an antique cane/walking stick at a local thrift store for $2.00. Nice looking accessory that makes a great self-defense weapon if needed during the downturn.
Just had to laugh out loud at that one. Yeah, that should come in handy.
Clever idea, does it have a metal point like those used for Alpine hiking?
I bought an antique cane/walking stick at a local thrift store for $2.00. Nice looking accessory that makes a great self-defense weapon if needed during the downturn.
Believe it or not, their is a martial art where walking sticks are the primary weapon:
http://www.canemasters.com/
Many appologies to the HBB but I got 3 pairs of real bayberry candles at Church Street (center of town shopping area) in Burlington Vermont. Just over $25. Oh, and a used book for $5. I may have spent more than 100 of the rest of you put together.
But all my holiday shopping is finished and most of it is delivered. The candles were for me. I can’t stand the artificially scented ones, but these are very nice and remind me of Cape Cod when I was a kid.
Re: Bleech Friday.
Nary a farthing came out of this auld purse. Even put off paying for an eBay win until after midnight to maintain the integrity of Buy Nothing Day. The trick here, I think, is to expand the concept into Buy Nothing Week. Then Buy Nothing Month– until maybe Washington takes the hint.
Almost had a Buy Nothing Year (’06) …
“But all my holiday shopping is finished and most of it is delivered. ”
My girlfriend and I make gift baskets for most of our gifts…Ingredients; DVD movie, homemade fudge, cookies, bottle of wine, coffee beans, mixed nuts and of course, batches of my homemade mouthwatering applewood smoked beef jerky that I slave over for an entire weekend. I usually make about 7lbs–which yields about 3.5 lbs of jerky. People love the baskets.
DOC
I went shopping yesterday, but only for my cats - they’d run out of cat food - and didn’t think they’d appreciate the politcal statement, when their food bowls would have been empty this morning.
My mom is over for the holiday and she owns a fair bit of Fannie Mae, and hasn’t been following recent moves, and was quite taken aback when the computer screen told her the extent of the bad news…
It’s the 1st time the housing bubble has really concerned her, as 1/2 of her investment got raptured away, in just a couple weeks.
I’ve been trying to get her out of stocks for months now, and she seems to be coming around a little late, but there’s still time to exit, stage left…
Sorry to here that aladinsane - she blew it no matter what she does now, although she should probably sell the rallies. It’s hard to see FNMA surviving as a publicly-traded company - I expect them to essentially go bankrupt and get folded into the government, with 100% losses for shareholders and near zero (dollar accounting) losses for debtholders.
My Mom has two major financial assets - her house and a bunch of GE stock. If things go as planned, she’ll be out of number 1 on Tuesday.
Aladin –
I successfully talked my aging parents into dumping their stocks (and their schmoe of an investment advisor) last spring. It took a fair amount of gentle persuasion, but they seemed relieved to be out of the Wall Street gambling casino when it was said and done.
I visited home (LA) this weekend and bumped into a friend whom I’d seen just before I left for Seattle six months ago. I’d told him back then about the impending implosion in real estate, and he had been insistent that the problems would be limited to the Inland Empire, etc. and that he was actively investing in REITS. He’s a bright guy and I was disappointed I hadn’t convinced him. Fast forward to last week. He said that my talk had so convinced him that he sold 150K in REIT stock. Since then the stocks have gone down by a third. I saved him 50K. As another friend said, he could’ve at least bought you lunch.
Good post - demonstrates the general psychological principle that people are reluctant to admit that they are being swayed, and that strong arguments may have more effect than it appears.
“He’s a bright guy and I was disappointed I hadn’t convinced him. ”
Know the feeling…tried to convince good friend to buy gold when it was 400oz and then later not to buy RE in 05′. Didn’t buy gold and bought an overpriced home in 05′.
They’re about 100k upside down right now–and dropping. Thought they were going to “flip it” in a few years and move to Virginia. DOH!!
Needless to say, I don’t bring up real estate when we visit these days. Sometimes I wonder if they think, “s**t, we should’ve listened to him.”
DOC
Thanks to Ben, I bought some leap puts on WaMu and Countrywide last year; also calls on GG and PAAS. If you’re ever out here in Pismo, will buy you a steak at Jockos.
I’m sorry, aladin. Obviously you didn’t learn your economic lessons at your mother’s knee.
After dad passed this year, my mother put all of the savings in CDs at 5.1%. She’s very pleased with herself now.
This one is for txchick best one I’ve read yet: At a Wal-Mart outside Nashville, the doors opened at 5 a.m. yesterday, with customers surrounding a wooden pallet piled high with $50 digital picture frames at the front of the store.
Worried that the frames would sell out, Cindy Chavez, 36, braced herself, yelped and tossed her body on top of the pile, much to her fellow shoppers’ horror. She emerged from the scrum with six frames.
“I just didn’t think I could reach down and bend over and get it,” Ms. Chavez explained.
Yes, that will be something she should remember with pride on her death bed.
Wish I’d been behind her with my walking stick.
Her ass is now a digital picture frame. Yikes!
ZACKLY txchick!
Haven’t any of these people heard of the internet? You can actually shop without having to wade through crowds of lunatics.
I go to London and Paris this week. I will do some reearch while there and tell you all what people think on the other side of the pond and how housing is doing.
My mom was in Europe for a couple weeks and took a cruise through the Greek Isles and Turkey after spending a few days in Italy.
Her ship was one of 3 cruise ships that descended upon towns and around 8,000 people were let loose, to spend…
She said she noticed most Americans she saw seemed to window shop, rather than buy anything, or just buy the odd tschotske of small value.
I am still at my uncle’s house (flying back tonight), but my mother called this morning to say that MA outlet malls were being mobbed by tourists from Europe (Ireland in this case) buying up Levi’s and other American goods on the cheap. It will be interesting to see if this is enough to prop up some of the east coast Christmas spending. I can’t imagine many would fly as far as Chicago or CA just for shopping.
I hope someone else is paying, Tom.
I have an invitation to a fundraising lunch on Monday for She Who Cannot Be Elected but the interesting thing is, the spousal unit, our former prez, will be there meeting and greeting. I haven’t decided if I can stomach the event at all but if I go, any questions for Mr. Clinton? I thought I’d bring up the housing bubble and see what he says. Or maybe that’s gauche at one of these events.
here’s my question- since every “smarter” country’s FREE-er healthcare system has failed miserably why do you think we can have FREE-er healthcare here ?
I don’t know what you mean. I cannot say that in Germany, the health care has failed. Miserably? I don’t think so. I say this from own experience with elderly parents in G. If you are saying what I think you are saying, just give me the numbers.
You won’t get an honest answer. Flat is a one trick pony. Dishonesty and ambiguousness is his game.
the europeons I know hate the healthcare and in Canada health insurance is a ticket to the USA- ask them.
What did I lie about ?
I don’t have to ask them Flat. My family and I are “them” (Quebec, Canada). Lies or misrepresentations. It’s your choice.
My entire extended family is Canadian. I’ve never a heard a story of denied health care, or poor health care for that matter. My 87-year-old grandmother died last year. She was allowed to remain in her home because health workers would visit and feed her, etc. Not so bad. I’m not saying it’s a perfect system, but the way it’s portrayed on this blog seems patently false to me. Further, as I understand it, when you crunch the numbers, the average Canadian pays about half what we do here. It’s certainly not twice as bad a system.
flat,
Could you give me the numbers to defend your statement?
Infant mortality, life longevity, per-capita spending. Cause all I here from you is ‘everyone hates it’, which obviously isn’t true. All of Europe has Universal Health Care.
My son-in-law is English, and he is amazed at how truly poor the health care system is in the US. It is patently untrue that people must wait for life-saving surgeries in the UK, and it is conversely very true that in the US there ARE WAITING LINES for what are considered non-life-threatening procedures such as joint replacements.
The cost of health care in the US is the highest in the world, more than double the cost of the next-highest country (Switzerland) and our efficiency and quality are 37th in the world, according to the WHO report of 2000.
Businesses small and large are increasingly supportive of a national health care program, because health insurance costs have risen twice as fast as inflation. More and more employers do not offer a health insurance plan. And privately purchasing health insurance is only possible for above-average income earners with no health problems (by “health problems” it is getting increasingly common for insurers to view minor surgical procedures, frequent treatment for viral infections, etc as “problems”. IOW, routine maintenance and care is a “problem” to them.)
I STG a lot of folks would kick their own grandmothers to the curb if they think it would save them a buck, and the sad thing is that it WON’T.
And privately purchasing health insurance is only possible for above-average income earners with no health problems
Testify! Even something as minor as treatable hypertension will get you on the blacklist.
http://www.ibdeditorials.com/IBDArticles.aspx?id=280700950825669&kw=german,health,care
A Freer Market Can Cut Costs Of Health Care
How many people also don’t know that laws prohibit interstate health insurance sales, banning people in state A from getting coverage from a company in state B?
According to the Wall Street Journal in 2005, “eHealthInsurance . . . compared the cost of a standard family insurance policy ($2,000 deductible with a 20% co-insurance) across that nation. . . . (A) non-employer-based family policy for four in Kansas City, Mo., costs about $170 per month, while similar coverage in Boston tops more than $750 a month.”
He does have some points…
“For example, a medic in Iraq who attends to fallen soldiers — but is not an M.D. — could not return stateside and open a practice.”
Nurses armed with technology can often do just a good a job as a doctor.
I buy health insurance through eHealthInsurance. good and bad. $100 per month for my health insurance (single, 48 year old male, no dependents). The bad: They still did not cancel my previous insurance and I tried to get back money owed to me for nearly a year. Tried twice.
All in all, my health insurance is cheap. I don’t smoke and I am not obese, and I generally eat right. Who said health care is expensive? Those who want socialized health care, please live in Canada (anyway you (not the poster above) believe global warming will make Canada a good place to live anyway. I was hoping for Alec Baldwin to go there in 2004, as he threatened to do if sKerry lost. What a bozo he is!
Bill. Who is talking about “socialized healthcare”? (beside you)
“All in all, my health insurance is cheap. I don’t smoke and I am not obese, and I generally eat right. ”
Well, all I can say is you might find out just how “cheap” your $100 a month eHealthinsurance is when/if you get really hurt or sick. Could be wrong, but $100 a month health insurance has “ripoff” written all over it IMO.
I’m 49, healthy, eat right and don’t smoke either. Also pay a boatload of taxes cause I’m single, but still feel nationalized health care is the way to go. US “private” insurance is a money-grinding, greed-driven, politically-connected scam.
DOC
I am a physician here in Dallas- however, I am a British citizen - family all mostly still in Scotland. To say that the British healthcare system has failed indicts you as an absolute imbecile - porking up on the Bill O’Reilly propaganda that spews forth in this country. Please do not criticize “sheeple” when you cannot differentiate facts from propaganda.
Sorry - just had to say it - I cannot believe the arrogance and ignorance of people who live in the country with the 37th ranked health care in the world -
My family, what is left of it, is in Canada and Scotland as well. I am well acquainted with health care in those countries and would have no criticism at all. Quite the contrary.
Glad to see you don’t have an ounce of arrogance dagan68 … actually you are so typical of citizens of other countries living here it makes my sides hurt with laughter.
Your side was pierced with truth and hard facts. Laughter had little to do with it.
If you do go be sure a take along some disinfectant wipes just in case he shakes your hand or anything else!
Ask her if she agrees with the way her husband handled WACO.
How’s that NAFTA working out for us?
Ask him whether having been impeached still bothers him and then run for the exit.
Ask him if having been impeached still bothers him and then run for the exit.
Ask old Bill if he thinks his phony dot-com economy was any stronger than Bu$h’s phony house-flipper economy. He still seems to think the economy was great under his watch. He was just lucky enough to get out before the bust really took hold. What are the chances that he understands this?
In same spirit, ask him what policy exactly “created” the great economy he is credited for and then ask him how much the tech bubble was responsible.
I’d ask him for the details of his “strong dollar” policy and whether the Boskin commission and gold price suppression vis-a-vie gold swaps were part of it?
Ask him how that “globalization” thing is going … Barry Sears argues that Clinton f@ed up big on that one, and looking at what fills our stores today, I’m inclined to agree.
Ask him to compare all of his last minute presidential pardons, with what ’ssshrubery will attempt in 2009?
“any questions for Mr. Clinton?”
If She gets the nomination, are there going to be any more bimbo eruptions?
TXchick…. Ask him if he believes an idiot can look successful with borrowed money.
Did he run a surplus during his administration?
We know he and the Hildabeast like Chinese money but what’s their favorite Chinese dish?
Did he run a surplus during his administration?
Yes he did. With a republican congress that controlled the purse strings. He also enjoyed the peace dividend from lower defense spending during his term.
“With a republican congress that controlled the purse strings.”
I see that fallacy falls hard beginning in 2001.
Nice try though.
Possible Questions:
1. Why did you vote for the Patriot Act?
2. Why did you vote to give Bush authorization for war in Iraq?
3. What do you, in your heart of hearts, believe caused WTC7 to fall?
Right after you ask those questions, don’t forget to scream:
DON’T TASE ME, BRO!!!
LOL
No matter what you ask, would you expect an honest answer?
Tell him we want stuff. Ask him how we can get stuff.
lol
Ask him if he knows how to get the stain out of a blue dress.
Ask She investment advice on how to make money as a potential new investor in cattle futures
After 8 years with Bush how can anyone complain about any past President? As far as the new President goes, the bar is set so low that anything they do will be an improvement.
Something so fundamental is beyond the comprehension of screech monkees.
“Scrape the bottom vote for Rodham”!
inquire as to what he has discovered the definition of “is” is.
After 8 years with Bush even Scooby Doo looks good.
I think Shaggy would be a fine VP.
How about:
Mr. President. Where is your money invested these days?
For God’s sake, TX, don’t get caught in a room alone with that guy!
Assuming Hillary wins…ask Billy, if Ann Coulter would be invited for a White House sleep over…if she shows up in a “blue” dress? Remind him, that it’s been rumored that Ms. Coulter can remove chrome from a bumper with her lips.
Question for MISSES C. Ask her about her support for a housing bailout. Make her look bad.
Question for MISSES C. Ask her about her support for a housing bailout, and how why she thinks it’s a good idea to take money from those of us who were not greedy or stupid enough to get into a ridiculous mortgage in order to bail out those who were.
More on Freddie…
http://www.reuters.com/article/ousiv/idUSN2331948520071123
From the article:
Freddie Mac has typically used revenue from preferred stock sales to increase the size of its profitable, $703 billion portfolio of mortgages. Holders of preferred stock typically take priority when dividends are paid out, even if they do not have voting rights.
OK…this makes me queezy: TYPICALLY take priority? They failed to pay a dividend!
NO voting rights.
Something tells me this is a bad idea.
The problem is that their limits are too low on what they can take on. We need to raise it to $1 million. I just got done with an economics class at the Chucky-Boy Schumer School of Voodoo Economics. I got an A+.
Have we reached peak deceleration in prices yet? Clearly not from (lagging) OFHEO data, but I bet we get there soon, probably no later than mid-2008. Shortly after that, any declines in value should be manageable for those interested in buying for the long-term. I’d like to be a homeowner again before the end of ‘08.
I go back and forth on that. I don’t really care if I get the rock bottom price on something because at this point, I doubt I’ll ever sell whatever I end up with. But I still have that commitmentphobia problem, fear of being tied down.
It’s all in how you view it. I call it appreciation of my freedom. BTW, it is freaking cold in Flagstaff this AM. Maybe living on the Mexican Riviera would be better?
Take a vacation to WI…we had snow on Thanksgiving!
In Dallas we had snow on Thanksgiving.
In San Diego, we had snow on-
Oh, wait. Never mind.
Here in la, we had fires.
It was georgous today
(I grew up in Michigan, so I can gloat … I also am responsible for $3600/mo rent, so I pay for this good weather, dammit!)
After living in Phoenix for 2 summers I don’t plan to ever complain about cold again. Summers being 7-8 months long here in the valley of the sun.
Ben, fly in if you go. Driving is a bit hairy right now South of the border - http://tinyurl.com/2jxdfk
Greetings from San Diego.
I lived on the Mexican border for years, so I know what goes on. The cops are just as bad.
Dude, “carefree surfing” in Baja is hisssssssssstory, go prepared ….like your tent camping in South Central L.A.
It’s cold in Dallas too. Naples is looking better and better.
Florida or Italy?
I love visiting in Flagstaff winter or summer. Just put more logs on the fire Ben! Also you are 2 hours from 69 degree temps in Scottsdale! I am interested in Forest Highlands up there in a few years after the Flagstaff bubble burst pushes the house prices down from $1,000,000 to $650,000!
“Have we reached peak deceleration in prices yet?”
Clearly not from sellers stubbornly keeping their homes on the market forever at prices where no buyer is forthcoming. But as Alan Greenspan has suggested, this can only last for so long before it ends.
“The first panacea for a misguided nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists”. -Ernest Hemingway
I walked up Broadway yesterday from the southern end of Manhattan. Maybe Black Friday doesn’t impact Broadway but it did not seem busy at all to me. The smell of nuts were in the air but the foot traffic didn’t seem any heavier than normal.
I was in NYC two years ago on Black Friday - remember how cold that day was? Went in a bunch of retailers and remember thinking Macy’s and Urban Outfitters were hopping and Gap was slow and had lousy stuff. Manhattan is the best gauge of retail trends.
Broadway has a lot of niche wholesalers and small retailers so may not get the Friday pop of the big retail chains. One thing I do know is that when T’giving and Xmas are far apart (like this year) that there will ALWAYS be horror stories in MSM about how much things have slowed down in early December. Real cash-register-ringing season doesn’t really get hopping until the last two weekends and the week in between, beginning around the 15th.
Gold and silver as competing currencies with the Federal Reserve Notes.
I was watching this Ron Paul video and I realized it doesn’t have to be either or, either a fiat system or a gold system. Why not let the two compete?
You could get paid in some gold-backed currency (maybe offer a 5% discount) or a fiat currency.
http://youtube.com/watch?v=abV9tgbG-bA
In the early years of the country, this is exactly how it worked. Every local bank issued its own currency, backed by whatever gold and silver it saw fit, and booklets were constantly being printed and updated which gave estimated fair discounted rates (from real money - gold and silver by weight, which were actually mostly reales minted abroad).
Certain states developed reputations as open banking/easy money states (e.g., Tennessee). A good living could be made by buying notes at a discount, then taking them to the various banks and demanding payment in gold or silver. Of course, if you got there too late, you may be stuck with worthless scrip. If you had contacts, were energetic, and were a lawyer to boot it was great - Andrew Jackson was constantly traveling back and forth between East Tennessee (Jonesborough) and West Tennessee (Nashville) in his younger years, and he wasn’t doing it for recreation.
Historical clarification: It was actually called the Southwest Territory then. Jackson organized the push for statehood, got appointed governor, and came up with name Tennessee himself. Later did the same thing with Florida after routing the Spanish and British from New Orleans and Pensacola.
Inttttteresting stuff.
Of Washington, Jefferson, Jackson, and Lincoln, understanding the history of Andrew Jackson is easily the most instructive in understanding the history and psyche of the U.S.
Anybody who thinks kids grow up fast these days should read a biography of A.J. - by the time he was 14 he had fought in the Revolutionary War and been imprisoned by the British in Charleston. He became a lawyer before he turned 20 and quickly discovered the two most important functions of lawyers at the turn of the 19th century: establishing title to property and how to properly discount and redeem varying methods of payment. Kind of like what the blog is about.
Crunch May Hit Insurers Of Bonds
Downgrading Weighed for 8 Leading Firms
By Tomoeh Murakami Tse
Washington Post Staff Writer
Saturday, November 24, 2007; Page D01
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/23/AR2007112301746.html
NEW YORK — Investors already burned by turmoil from the credit crunch are now worried about unwanted surprises in the industry that insures bonds.
In the face of mounting losses in U.S. mortgages, rating agencies are reviewing eight leading bond insurers, which could lead to downgrades. Such a move could ripple across the financial sector, because if a bond insurer is downgraded, most of the securities it has blessed as virtually risk free are likely to follow. That could spark a new round of sell-offs and write-downs.
“It would have a domino effect on all of the entities that hold these vehicles,” said Ed Rombach, a senior analyst at Thomson Financial. “They would have to have more write-offs. It’s a vicious cycle.”
Moody’s Investors Service and Fitch Ratings are examining the capital levels and structured debt these firms have insured because they are worried that the deterioration in the mortgage market may expose them to greater losses. Moody’s expects to finish its review next week. Fitch said it would complete its review within three weeks. If any company is put on what’s known as negative watch, it would be given a month to increase its capital and have its rating affirmed.
Bond insurers play a critical role in the capital markets because they issue insurance that boosts the credit ratings of more than $2 trillion in debt securities held in portfolios around the world, including municipal bonds, mortgage-backed securities and complicated debt instruments.
I’ve heard a bit of terror about the bond insurers recently and I’m afraid I can’t get all excited about it.
Doesn’t this mean that the people who were in the business of figuring out the downside risks and were PAID to take on those risks are now doing what there were paid for? Shouldn’t this be preferable to investors who thought they were insured against this risk having to take the hit?
OK, so these guys will get downgraded and have to pull back their business or start doing a much better job of risk assesment and charging appropriately. Not a problem.
When the insurer folds, 2 things happen:
1) The risk passes back to the holder
2) The bonds get devalued due to higher risk
When the bonds get devalued, it can put the holder in default.
Dominooooo!!!!
One of my favorite books is Barbara Tuchman’s “The Guns Of August”, which is all about the entanglement of alliances, that led up to World War 1…
http://en.wikipedia.org/wiki/The_Guns_of_August
We are now going through an entanglement of financial alliances, in much the same fashion…
“The Funds Of August”
i loved that book, particularly the part near the end, where the Parisian taxi drivers rallied to get the troops to the front and thereby saved the day. I have thought that would make a good movie.
Amazing, I was just thinking the other day how that book influences my outlook of what we are now living through. Pre-1914 Europeans also thought “free trade”, technology, and emerging global commerce had made a world war an impossibility. It offers a superb look at how the most powerful (and supposedly most educated) men stood by idly as they rushed to war. For pete’s sake - they were sending letters to one another during the mobilzation - saying they wished they could stop it!
It is a must read for anyone who thinks governments and leaders are infallible and actually have total control. Glad you mentioned it, because sometimes - yes sometimes - the unimaginable does happen.
“…because sometimes - yes sometimes - the unimaginable does happen”
Like…just the right amount of “free” sunlight radiation to give life to a spinning planet of muck.
Of course…there are “other” versions of creation
An important point of history is that despite the assertions of many historians we still do not know exactly what caused the Great War. Very similar patterns of alliances had caused an ongoing pattern of war without things getting out of hand. While the mismanagement of alliances was no doubt involved it is also pretty clear that changes in the technology of war changed everything. A very close look also shows increasing globalization to be a factor. In the US domestic factors are thought to explain the Great Depression, but economic analysis shows fallout from the Great War having a huge impact on markets in the decades that followed
geez. simpletons and morons, like our beloved president caused the great war.
With dollar low, US is one big outlet
Europeans arriving in droves for bargains
http://www.boston.com/business/articles/2007/11/24/with_dollar_low_us_is_one_big_outlet/
Irish, other Europeans flying to Boston to feast on cheap junk that even American’s can’t afford now. Hoo-ray for the Fed’s peso policy.
German media have been pushing this since a few days. They do not mention how hotel prices in NY have gone through the roof (400 bucks for the Wellington Hotel??). Wrentham outlets? I remember from years ago, took Europeans there and they just yawned.
Freeze the funds…er…so you can make it all better? Yeah.
http://www.msnbc.msn.com/id/21931911/
Even though most every other currency is doing better than ours, there are many reasons for flight risks in many countries, currently.
How long before the orderly V-Pack formation turns into an unruly mob, all trying to get out of sticky wicket, @ once?
The whole 1st world seems to have tried to out-corrupt one-another…
It’s nice but 1.4M?
http://chicago.craigslist.org/chc/rfs/487840697.html
it’s realtor advertising on cragislist, is that ok or should it be flagged?
Well, at least it is in Sauganash - so it isn’t a total affront to the senses. I’m sure some ambitious and enterprising civil servant will snap this up. Still, the photo is taken at a funny angle - makes me think its a small lot and they filled every square foot of it. The choicest homes up that way are on the bigger lots.
I’ve seen a few inquiring minds post about the GMAC (ResCorp) and NR merge. Here’s is the latest for said inquiring minds!
http://online.wsj.com/article/SB119566898703300785.html?mod=googlenews_wsj
I’ve been watching Countrywides REO list for roughly a year now. A few of the choice houses I’ve been tracking are now reduced roughly 25-35% in just 12 months.
I forecast more cratering prices.
Rate Outlook
Futures contracts on the Chicago Board of Trade showed a 96 percent chance that the Fed will lower its target rate a quarter- percentage point to 4.25 percent on Dec. 11, compared with 90 percent odds a week ago. The U.S. central bank has reduced the rate by three-quarters of a percentage point this year to 4.5 percent.
Traders speculated that some brokerages are buying Treasuries to put the safest assets on their balance sheets before the end of their fiscal year next week.
“People need high-quality liquid products to show on the balance sheet at year-end,” said James Caron, head of U.S. interest rate strategy in New York at Morgan Stanley, one of the 21 primary securities dealers that trade directly with the Fed.
——————————————————————————-
looks like money managers think a recession is due
“Futures contracts on the Chicago Board of Trade showed a 96 percent chance that the Fed will lower its target rate a quarter- percentage point to 4.25 percent on Dec. 11, compared with 90 percent odds a week ago.”
How long is this misinterpretation of the data going to keep getting repeated like this before somebody says something? I keep waiting for somebody to say something about it - Rick Santelli, maybe? - but nobody ever does.
If Fed Funds are at 4.5 and the Dec futures are trading at 95.74 (an effective rate of 4.26) this is NOT a 96% chance of a cut. It is only a 96% chance of a cut if the only possible Fed funds rates are 4.5% and 4.25%.
Assume there is a 10% chance of a cut to 4%, and the other possible rates are 4.25% and 4%. Then 4.26 implies a less than 80% probability of a cut to 4.25% (because of a slightly greater than 10% no-cut and 10% cut to 4%), and thus a less than 90% probability of any cut.
Bottom line: you can’t tell the exact probability of a rate cut by looking at the futures contracts - there are multiple possible outcomes and only one price.
Should be: “and the other possible rates are 4.25% and 4.5%.”
–
‘It’s the Debt, Stupid!’ Is Getting Understood and Spread
“In fact, Mr. [George] Ure says that, “Jas is prone to signing his emails ‘It’s the Debt, Stupid!’ And with damn good reason. Remember that money can be printed easily enough, but it always depends on someone borrowing it into existence in a fractional reserve bankstering system to make it ‘hit the street’.””
Economic Hell to Pay:
http://dailyreckoning.com/Writers/Mogambo/DREssays/MG112307.html
Thanks, George.
If I may be permitted some immodesty, there are few people in the world who understand the subject of debt better. How many people were doing field research in impact of debt on households at the age of eight without been asked, or prompted, by anyone? And how many could do compound interest calculation on an account at the age of eight? (My father was an all-purpose businessman, including money lending, in a rural economy and I knew families that were indebted and which were not and I was very curious about the subject). Did I know back then that I was doing what is called field research? Hell no. It was only looking back that I understood what I was doing. The conclusion that stuck with me at that young age was that there were Brahmin families who lived poorly and there were families of untouchables who lived relatively well. The key difference was savings versus debt. In some cases difference was ownership of farmland. Almost all owned their residences free and clear!
Jas
Congratulating somebody else mentioning you on somebody else’s blog, is glad handing it a bit, don’t you think?
–
To me important thing is the message about debt and its abuses by America’s ruling elite.
Jas
I call BS — this is how the MSM has been operating for years, getting each other to repeat each other’s inanities — and if this is what it takes to get the smarter, more accurate vision broadcast to more people, tough noogies.
We had snow in Albuquerque also on Turkey Day.
This must be one of the most predictable disasters in the history of modern finance. (In fact, we predicted it some time ago on this blog, and Ivy Zelman’s chart last spring implicitly predicted it as well.)
PAGE ONE
Rising Rates to Worsen Subprime Mess
Interest Payments Set
To Grow on $362 Billion
In Mortgages in 2008
By RUTH SIMON
November 24, 2007
The subprime mortgage crisis is poised to get much worse.
Next year, interest rates are set to rise — or “reset” — on $362 billion worth of adjustable-rate subprime mortgages, according to data calculated by Bank of America Corp..
While many accounts portray resetting rates as the big factor behind the surge in home-loan defaults and foreclosures this year, that isn’t quite the case. Many of the subprime mortgages that have driven up the default rate went bad in their first year or so, well before their interest rate had a chance to go higher. Some of these mortgages went to speculators who planned to flip their houses, others to borrowers who had stretched too far to make their payments, and still others had some element of fraud.
http://online.wsj.com/article/SB119586137992302497.html?mod=hps_us_whats_news
I was on Zillow today poking around and went into the “Discussion” area. Oh man, if you want a good laugh, check out some of the posts. People are complaining Zillow has their neighbors house $50k more than their house but their house is “better” & “prettier”. Who the heck cares what Zillow says????? These people are obsessed with the value Zillow has on their house…hilarious!!!!
I bought an epson printer for pros. Thats my gift to myself.
My silly old aunt is giving her Pasadena bungalow to her tenant. Its on Margurita Lane, an historic spot. Thanksgiving with her is torture.
She thinks I hate her tenant because he’s gay. No I hate someone else.
Comment by REhobbyist
2007-11-24 11:18:48
WT: Younger people only want brand, spanking new houses. Very consistent with everything else we know about them. This recession will give young people a much needed attitude adjustment.
Blah, blah, what, EVERY single younger person wants brand spanking new houses? You’re better than Jeebus, you know everything.
Nope.
I like old houses. Always have. Always will, even when I get to be an old, wise, know-everything older person with an ‘adjusted attitude’.
Not a crappy old house, of course. I love tidy old mellow brick, bungalows, Victorian, craftsmen style…all sorts of nice old houses to like.
I have an old house right now, as it happens, unfortunately it’s firmly in the ‘crappy’ category. It suffered from previous owners who very clearly evolved from amoebas and just skipped the whole ape thing. I just do what I can with paint, spackle, ‘Be Jane’ articles, and the good thing is–a party can really get going, because I am not too emotional when something gets dented. The only thing I won’t give a try myself is electrical stuff–that’s like magic to me, and it could be hard to clean up if something went wrong.
Hey Olympia,
How young are you? I thought only old geezers (like me) posted here.
And how long ago did you escape from Utah? (Just curious…)
I cant speak for hear Prof,
but Im 20 and I post here
http://www.larouchepub.com/pr/2007/071112subprime_losses.html
A new report is placing possible subprime-related losses at $500 BILLION dollars. That is far, far worse than what Wall Street or the Fed would have you believe.
http://www.larouchepub.com/other/2007/3446dollar_dump.html
From the analysis above: `Starting a Run on the Bank Of a Bankrupt System’:
“The U.S. Treasury released data Nov. 16 showing that the outflow from U.S. investments continued in September as the dollar continued to fall. Although this time the net loss from U.S. investments was only $14.1 billion, it included, again, net liquidation of U.S. Treasury and other securities by China, Japan, and the “Caribbean banking centers” of London jurisdiction and control. The British offshore centers’ net liquidation was about $5 billion in September. The China and Japan net liquidations, about $3.5-4.0 billion each, are a very small fraction of those countries’ dollar reserve holdings, but it is clear that their massive support of the dollar by absorbing vast quantities of U.S. debt, has stopped.”
In short, the dollar, and the US economy, are toast.
http://www.larouchepub.com/other/2007/3446fla_collapse_returns.html
In 1926, the Great Florida Land Bubble Class provided forewarning of the Great Depression. Now, once again, the collapse of Florida’s speculative land and RE bubble are augering more trouble ahead for the national economy as a whole.
http://www.larouchepub.com/other/2007/3446state_budgets_blow.html
States are blowing their budgets as the imploding housing and credit bubbles shred tax revenues.
Do you think they are going to use a 100% option ARM for this puppy?
texas town
Who says Black Friday was a bust?
Maybe those tales of the foreigners stepping in to buy our land are not so false after all.
Who says we’re not an exporter?
Okay, okay, I’ll shut up.