Bits Bucket And Craigslist Finds For December 16, 2007
Please post off-toipic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Yesterday rented and watched: ‘The End of Suburbia’ (2004).
Highly recommended and extremely appropriate to watch when considering all the topics discussed on this blog.
Housing
Suburbs
McMansions
Peak Oil
Role of the Media
Sustainability
Economy and Investing
Government Propaganda
We are sooooooo screwed!
Sounds like extremism to me. Housing is highly elastic and always has been, so housing troubles never have the extent of social implications that people fear. Suburbs come in many flavors, are generally preferred by a majority over any other land use mode, and can be built in relatively efficient and sustainable ways, McMansions were mostly put up with second rate materials and labor and won’t be all that hard to remove or subdivide as appropriate, Peak Oil will only bring on a new energy rush and people already drive themelves around just fine without oil, the media change greatly all the time as this blog demonstrates, sustainability is relatively easy to force with economic incentives that will be hard to avoid, we’ve had lots of catastrophic bubble blowouts before so if anything this is a return to normality, and government is largely what we make it.
Saying we are screwed is a shallow, irresponsible, and wrong way of looking at and reacting to our current situation.
Maybe you should watch the movie first and then comment on it’s content.
It’s clear from your comments you have absolutely NO idea what some of the movie’s conclusions are.
Critiquing content you haven’t seen seems rather …. well.. you know… what you said.
It’s not just a movie, it’s a multimedia phenomenon. Just go to http://www.endofsuburbia.com and see what I mean. How I wish I were joking! And you don’t need to rent it if you are on the intarwebs because both the promo and the whole movie are on YouTube.
Kuntsler has been saying variations of this for a long time, and he has always been very wrong and way off in his reasoning. Some of the best counterpoint to Kuntsler is in The Future And Its Enemies which I highly recommend even though it is only a book and not available in video form except indirectly through C-SPAN reviews.
As far as the media thing goes, if you can’t summarize an idea briefly in text then it is either wrong or needs work. The best demonstration of that I know are the 9/11 conspiracy wackos who rally around, of all things, an apparently convincing video. Video is a medium that tends to soak up attention and minimize judgement.
Mole Man, I have that book, “The Future, and its Enemies,” by Virginia Postrel. It is a very good book. Also, there was an author who debunked the 1970s “Club of Rome” band of Al Gore types. I tend to be bearish on America for the next ten years. But I know the point these authors make is that elitist leftist thinkers and doom and gloomers always assume no variables change and no new variables get into the equations. For this reason, I hedge against my own pessimism by mainly (emphasis on “mainly”) investing contrary to pessimism and “sky is falling” investments. I consider precious metals and government securities as pessimistic and “sky is falling.” I don’t consider real estate an investment. This leaves stocks and stock mutual funds.
I like Mole Man, he makes me think.
“Housing is highly elastic and always has been, so housing troubles never have the extent of social implications that people fear.”
never is a pretty stong word, I suppose that with all the Global Central Banks efforts to relieve the credit crunch by lowering rates and providing liquidity in non liquid markets all the problems are clearly solved. Unfortunately, the problems with insolvency among the major banks are not solved. This credit bubble that manifested in housing, ultimately cumlinating in Neg-Am zero down, cash back, fraudulent transaction has created an environment thats not just delflationary, but SYSTEMICALLY DELFATIONARY as it relates to “krill” supporting the “whales”… credit contraction continues unabated. Inflationary surges in the must have inputs continues.
We dont know the full extent of the contraction at this point, but the signs are getting clearer. FED’s not concerned with inflation (or they would not lower rates) FED and the CB’s fear deflation which has taken hold of not only houses, but also wages. Deflationary wage forces have been created in the Globalization Appetites (termed Global Wage Arbitrage); therefore, no wage inflation can manifest.
The only cure for deflation is the markdown of high valued assets to the new and improved low market price.
the precious does well in deflation.
“…never is a pretty stong word,…”
As in, “real estate prices have never gone down on a national basis over the entire history of U.S. housing market record keeping”…
They’ve never gone down for two years in a row either. So statistically speaking, we MUST have hit bottom!
RE: …hard to remove?
hmmmmm…I dunno.
http://www.boston.com/news/local/articles/2007/12/16/living_large
Yes…
But we do far more then simply drive. Try running a farm without petroleum products (fertilizer, pest control, plowing, harvesting – it’ll put farming back 100 years, as in think food is expensive today?). Peak Oil has far more then driving as an issue – and remember – it’s about a constantly reduced oil supply that nations compete over – running out is the least of the issues.
You ever live through a real recession? They aren’t much fun and society does break down on many levels (look at violent\property crime statistics – an area I used to work in).
Plowing all the McMansions under isn’t going to fix the banking mess they leave behind, nor will it lead to a return of that land to productive use. You know - things like the orchards and farm land they tore up to make them – they are gone and won’t come back any time soon. Thus the land will be truly useless. It requires far to much labor and capital to return them to such productive usage (see banking issues above).
Sustainability is incredibly hard, take a hard look out in the world, subsistence is not sustaining anything. Create all the $$’s you want, doesn’t change the supply problem – fishing grounds fished out, grain storage at 30+ year lows…
You need to go study some more. All the issues are interlocked, housing is just a part, and the bubble is a sign of the troubled finances.
http://www.youtube.com/watch?v=8U3rO0GbEhI
Sending out this classic Hooters’ song, “All You Zombies,” to the herd creatures who cling to their dreamworld MSM-implanted misperceptions that All is Well, and that anyone who points out inconvenient truths the Powers that Be would rather conceal from you is an “extremist.”
All you Zombies is also a great little short story by R.L. Heinlien.
I was unaware - thanks for enlightening me. Not a Sci-Fi fan, but R.L. Heinlien is brilliant.
Thanks for pointing out that this video is at youtube. You know it is interesting to read the comments on you tube. Those seems to be coming from younger kids, and none of them seems to doubt that suburban life is not only boring, full of prozac, and unsustainable.
Brazil’s Not Peaking
http://www.ibdeditorials.com/IBDArticles.aspx?id=282528707587055
Energy: Global warming doomsayers have a mirror canard of doom in the peak oil theory, suggesting that the world is running out of oil. So is it? Not with countries like Brazil still not even done discovering it yet.
Peak oil advocates claim that the world is running out of oil unless the West gives up its energy-consuming lifestyle. Like global warming and population-bomb Malthusianism, it’s essentially junk science because it operates on a static model. Crucially, it leaves out the politics of whether oil companies are allowed to discover or not.
The best part about Brazil’s will to drill is it exposes the peak oil crowd for what it is: a group with a radical agenda that has less to do with science than with expounding “Western guilt” about its economic success, which is built on oil. Emerging Brazil has no such qualms, and shows just how useless such hang-ups are.
Oh, I keep forgetting. Tar sands are now considered oil reserves. I guess it’s close to sweet crude…
I’m always impressed when the investor news is more informed then the geologists. Does anyone other then them believe the reserve numbers? Sort of like the inflation\unemployment numbers. You have to know what the incentives are to lie before you blindly trust, then you have to go dig and see what the actual geologists have to say. Two very different stories there I think you will find.
Many of those new reserves won’t be profitable to get to until such time as the price goes substantially higher then it is today… and even then the quality is questionable, at best.
AZ-IT, I agree with you. The last few weeks on Squawk Box in the wee morning hours they paraded guest analyst after guest analyst who claimed oil prices have peaked and will fall again. Not once did they usher in a geologist. At least investor Matthew Simmons did his homework and studied hundreds of journals from the Society of Petroleum Engineers to get information to conclude that Saudi Arabia oil fields are near peak.
until such time as the price goes substantially higher then it is today
Or technology improves sufficiently to make the collection process viable.
Na, easier to just wait tell it’s gone…
I find it somewhat humorous that those who read the signs and thus figured out “housing bubble” at the same time vested interest “experts” were recommending you invest in the builders, mortgage brokers, banks and hey – housing always goes up… turn around and blindly follow the same pundents when they say “no worries – everything is good” about some other area of the economy.
I’m no expert on the topic, but I read like mad. Middle east reserves “miraculously” jumped 50-100% when they instigated a pump based on reserves model… indication are North Sea Brent is dying fast, main field in Mexico is dropping production, a substantial amount of what we pump today was considered waste a decade ago (and still would be if they could access easier product – economics 101…). But hey – no problems, all the vested interests (governments, industry experts and “analysis” types) told us so.
And we all know how honest they are. Look how well they understood the housing bubble…
And I’ve worked in Tech for over a decade - don’t over estimate what it’s capable of, it has limits as do all things.
Whether oil is peaking or not requires that we.
1.) know how much oil there is
2.) know how much oil we will use in the future
2 is kind of sort of possible to know.
1 is less so
We do know that 2 is increasing, and 1 is decreasing, so we know that there will be peak oil. What we don’t know is when.
Right …But isn’t it just prudent to start to conserve ,just in case we are at peak oil ,and start to find other energy sources ?
My youngest brother was a senior petroleum engineer for Chevron research La Habra, second was a refinery Chem engineer, my career was in exploration geophysics for 5 oil companies. We have connections in oil trading and tankers. Peak oil is here now. Deal with it.
Rex — one of my best friends is a senior oil explorer for Aramco. He disagrees with your conclusion.
In the spirit of fair debate, the best short and simple I’ve read is that China and India have skewed the traditionally long calendar for exploration and that awhile back the Russians figured out that oil is not fossil fuel but only hydrocarbon, thus they were able to discover it in places previously thought impossible sources of oil. The Ghawar field already has produced enough oil that at 100% recovery it would make a cube 19×19x19 miles. That would be a heck of a lot of dinosaurs. Not to mention figuring out how many dinosaurs got so far under the bottom of the North Sea, etc.
We may temporarily be at peak production, and we always seem to be at peak refining, but I think we are not close to peak reserves. Nimbyism (eastern Gulf of Mexico), geopolitics and stubborn belief in the old ways to discover oil are what generate the scare, IMHO.
Chip - as you probably know, the world oil discovery curve peaked in 1962. Whether using new exploration approaches based on abiogenic theories of oil origin, or exploiting a small number of remaining ecologically-protected reserves, I don’t see see any market-changing discoveries. The oil being found is harder to get at, more expensive to recover, or in in the case of tar sands, very expensive to process. Wish I could be as optimistic as you
I agree there are definitely some short term measures like Alaska drilling that could provide a boost in supplies, but in the worldwide market, it seems like just a drop in the bucket.
Cream — much of what is making Russia rich was discovered or expanded after 1962. They based their exploration strategy on the Ukrainian Theory Of Deep Abiotic Petroleum Origins. The West ignored this theory and now in on hind tit as a result. My prediction is that before long there will be an announcement of “miraculous” oil finds under land owned or controlled by China. What worked for Russia should work for China. There is also, I believe, a lot of this involved in the imprisonment of the head of Yukos OIl — Putin is a very smart guy.
I agree with you about the cost of discovery and recovery, but that is not “peak oil,” rather it is higher-priced oil. OPEC wisely, relative to its own interests, does not see it as in OPEC’s interests for costs to go so high as to make wild-west imagination and discovery, in alternative recovery methods for hydrocarbons, economically practical.
The Aramco I’m familiar with was so incompetent…sure it was a long time ago…running vibroseis across the Saudi desert with all the 60Hz notch filters locked in despite the absence of any civilization…
Two nights ago, I watched the third installment of “Pirates of the Caribbean.” The geopolitical interplay among the US, the “rest of the West,” Russia, China, the Arab cohort of OPEC, Iran and the others reminds me of the scene where Captain Jack and the others all had pistols drawn and pointed and re-pointed them at whomever seemed their personal blaggard of the moment.
Rex — it’s changed a lot. I was out there with them five years ago. It used to be an American “club.” No longer, though that’s immaterial to the matter of exploration techniques. Saudi Aramco has gone to great lengths to distance itself form us in both the paternal sense and for purposes of compensation. Much has changed. I remember someone telling me at about that time that the Chinese had a problem competing on bids for drilling because they literally had to send one qualified interpreter with each engineer becuase none of the tech types could speak English or Arabic.
My note above about Ghawar contained an erroneous recollection of a quote I read. So that my grandchildren don’t find this thread someday and think me a buffoon, here is the correction:
I should have read my notes rather than try to remember them. This is the quote, from an article on the topic, that I should have posted:
“Alone to have produced the amount of oil to date that (Saudi Arabia’s) Ghawar field has produced would have required a cube of fossilized dinosaur detritus, assuming 100% conversion efficiency, measuring 19 miles deep, wide and high.”
The quote is attributed to Dr. J. F. Kenney. He apparently is one of the very few Western geophysicists who taught and worked in Russia and studied under Vladilen Krayushkin, developer of the Dnieper-Donets Basin. Here is one of many references to his work:
http://www.csun.edu/~vcgeo005/Energy.html
Regret the misleading math. The point for which it was posted, which remains valid nonetheless, was that fossil detritus cannot possibly have been responsible for the vast amount of oil that has been and continues to be discovered.
Jobless construction workers across the state fish for food and solace
By ZAC ANDERSON
PLACIDA — Roy Bennett is on the water again, his boat anchored over a deep channel in Coral Creek as he waits to see if he will be lucky today.
Bennett would rather be earning a living building homes, but fishing is about the only steady work that the Englewood resident can drum up since the real estate market crashed.
Making a few dollars and maybe catching dinner is better than sitting home as an unemployed construction worker.
“You have to do something,” Bennett, 47, said.
He is not alone.
Across the state, more than 22,000 construction workers have lost their jobs in the last 12 months, according to statistics compiled by the Florida Agency for Workforce Innovation. Many of them, like Bennett, are turning to fishing for relaxation, dinner or some extra money.
On any typical workday, many of the piers, bridges and jetties across the region are frequented by laid-off workers who typically would be earning dinner by the sweat of their brows.
“You notice it during the week,” said Lt. Rob Gerkin, who patrols local waters for the Florida Fish and Wildlife Conservation Commission. “These guys don’t have any work, so they’re out fishing.”
Bait and tackle shop owners and longtime local fishermen say there are many more people like Bennett in Southwest Florida than in previous years. As many as half of the fishermen Jeff Calkins serves at Fishin’ Franks bait and tackle shop in Port Charlotte are “fishing for dinner” these days, compared with maybe 10 percent a year ago.
“These are tough times,” Calkins said. “People are doing what they can to get by.”
http://www.heraldtribune.com/article/20071216/NEWS/712160589
It’s honest work, as long as they’re not using high explosives.
And how many of these guys are fishing from $40,000 bass boats that are pulled behind super king-cab pickups bought during the boom?
I wonder how many will stick around vs. moving to an area where they’re still building.
Where would that be?
I really don’t know. Western NC, maybe?
Nope! No building here……it’s frozen up!
It proves the old adage: Give a man a fish and he eats for a day. Teach him to fish and he eats for a lifetime.
Give a man a house on the basis of a funky loan and he stays there a few years, teach him to be responsible financially and he’ll be there for a lifetime.
Give a man a house on the basis of a funky loan and he stays there a few years, teach him to be responsible financially and he’ll be there for a lifetime.
Give a man a fish and he eats for a day……teach a man to fish and he sits in the boat all day and drinks beer!
Yep. These boys are some real go-getters. Can’t they find a way to make some money playing golf or humping goats? Their families must be proud of all that hard work, launching the boat and all.
I guess working at WalMart is beneath them, at least until the unemployment benefits run out or the toys get repo’d.
Give the guy a break. Maybe fishing gives him some much needed peace & solitude to figure out what he’s going to do next.
“On any typical workday, many of the piers, bridges and jetties across the region” Only this Bennett guy seems to still have a boat.
I believe the gov’t model is “Give a man a fire and he is warm for a day. Set a man on fire and he is warm for the rest of his life.”
Teach him to fish, and he “fishes out” the lake.
There’s 2 sides in all transactions\economies. Damm should have gone long “bait and tackle”.
Oh, oh, here come another load of FBs to be.
http://tinyurl.com/2m56zo
“When (the Canadian dollar) hit a dollar ten, it really created a real buzz for Canadians, not only those looking to buy second homes but we’re also seeing it from buying purely from an investment standpoint,” Dziedzic said.
Why is it an “investment” for Canadians, but not Americans? As you said FB to be.
Anecdotally, I was talking to a Rochester, NY friend of mine who was buying at a Subaru dealer, and he said the sales rep kept answering the phone whlie he was there and told my friend that Canadians keep calling to buy cars in NY. He was told that a lot of his business comes from Canada right now.
Buying cars in the US actually makes sense (as long as they meet Canadian regulations). Buying US housing, not so much.
Canadians can buy used cars from dealerships or individuals, but not new ones.
A Canadian friend told us of his mounting frustration, trying to buy a new car on the cheap locally, in loco estados unidos
No Loonies need apply, I guess.
“Canadians can buy used cars from dealerships or individuals, but not new ones.”
Why is that?
Agreement between the automakers that Canadians can’t buy new cars from U.S. dealerships, apparently.
Family lives in Buffalo, and Canadians are shopping there for clothes, toys, even food. Even filling the gas tank is cheaper. Folks there are very happy–it’s putting a lot of money into the local economy. I doubt Canadians are buying houses though. Even the aiport has picked up a lot of business–it’s cheaper to drive to Buffalo, buy your ticket there and fly wherever, than to fly out of Toronto. It’s all good, it’s bringing in needed money there.
Does anybody get the sense that the Canadians are preparing for the possibility that oil could nosedive in price? I know it goes against the Peak Oil philosophy of some but oil hasn’t traditionally been the most stable commodity, regardless of China and India. Is $60 oil really that hard to believe?
$60 dollar oil is entirely possible. At this part of the plateau, we can expect a lot of volatility.
Get a 10 year monthly chart of Crude Oil Price ($WTIC on my charts). There is a long-term trendline starting at about $10 in 2000. We bounced off it in January of this year, when crude hit about $50 I believe. Right now, the trendline is at about $60-$65. Actually, crude is in a visible channel. We recently touched the upper line of the channel and now are in a pullback.
It’s really all about the dollar, isn’t it? We might get a bit of a bounce, but the way I look at it, there is no limit to the amount of dollars that can be created. Yes, current credit crunch is deflationary, but long-term, I think hyper-inflation is more likely given our current political system.
Petroleum is a bit of a snake-oil enterprise…
I’ve lived through 2 gas “shortages” in the 70’s, and spent as much as an hour in line, waiting for my chance at some.
We’ve gone though countless billions of gallons of go-juice since then, so obviously they were gaming the system for maximum benefit.
I think they’ll do it to us again, soon.
NYCBoy is right on. There is a whole lot of voodoo, fear and boogeymen associated with oil right now. You have the environmentalist movement fueling the Peak Oil theory. In the other insane looney camp, you have the Pseudo-Christians stoking the congregation with the religious warm madness against “the people that want to harm us” lie for political purposes. The entire oil scare is nothing more than fear, pandering and lies from two extremist camps.
It’s funny when people point to the charts of oil prices as evidence of whether there is enough oil in the ground. Fact: Oil is a finite resource. Another fact: Geological scientists have had more than 50 years of experience and new tools every decade, including satellite technology, sonic technology, yet it’s getting harder and harder to find significant deposits of oil anymore. Think of it as a game of pick up sticks. You toss down a pile of sticks and you obviously take the easiest ones that don’t disturb the other sticks. Common sense that we are peaking. Hubbert was right about American oil peaking in the 1970s. If America can peak, why the Sam Hail can’t the world peak? Or at least Saudi Arabia. Someone explain please.
America needs to build nuclear power plants like crazy and we need to switch to electric cars. Relying far less on oil for transportation does not mean we won’t be affected by the lack of cheap oil in the futures. Plastics, fertilizers, jet fuel, shoes, and all sorts of other products are oil-based.
And how many thousands do you have positioned for that Bill?
Oh and by the way Bill. Natural production of oil is ongoing as we speak. It is not a finite resources.
Well I have thousands positioned in favor of higher oil prices, have for years and have not lost money yet. Of course, oil production is past peak, just take a look at where it is produced; Mexico, USA, Norway, North Sea, Russia…all in permanent decline. The Saudis lie about their reserves. If technology were able to reverse the decline American production would be rising.
It really doesn’t matter whether you believe in peak oil; people didn’t believe the Earth revolved around the sun, and the Earth didn’t care. Neither does oil.
As for the 70s oil shock, that was a political shock, not a production shock. The Arabs cut us off.
If you want to learn about peak oil check out the oildrum blog. It’s quite useful. Or live in denial and don’t prepare for the inevitable. You will be the energy equivalent of FBs.
Considering oil index futures were flat from 1991-2003 I’d say you’re exaggerating to put it nicely.
bill in Maryland - very well said. People are too quick to dismiss peak oil as some loony environmentalist paranoia, but the science and numbers behind it are very convincing. The fact is that we need to start building nuclear power plants to provide us with energy, otherwise our standard of living is going to fall drastically after peak oil. Of course, we could just burn more coal, but that’s an extremely dirty alternative, not to mention the immense CO2 emissions (yeah, I know, human-caused global warming - another wacky “controversial” idea).
Exaggerating what? I saw nothing but facts.
Just because one segment of America routinely uses fear to manipulate the masses doesn’t mean that *all* preparations to deal with tomorrow’s problems are similarly motivated. It is entirely reasonable to expect that oil will become increasingly expensive, and policy should be adapted to deal with that expected reality. At minimum, we should reconsider the vast subsidies to the current oil-driven economy that worsen our predicament.
Watcher said : “Well I have thousands positioned in favor of higher oil prices, have for years and have not lost money yet.”
Considering the oil futures index was flat for 12 years up to 2003, your claim is exaggerated. Don’t characterize me as a right wing oil pig because it’s not true. My assertion is that the oil scare is overstated, just like the terrrist scare.
We agree more than we disagree. Personally I’d love to see oil at $200/barrel but it’s just not going to happen.
“I don’t want to take advantage of a guy who’s having trouble in the market and is losing his shorts,” Sirockman said. “But I have no problem with a guy from California who bought on spec and has five houses in Arizona and never lived in them.”
Even the Canadians want to see the greedy California flippers suffer. Sweet!
‘Sirockman also returned to Canada without a house after the owner of the Scottsdale home turned down his offer. No worries. Sirockman told the seller there were a thousand other homes like his on the market, and someone was going to deal.’
Tables are turning. I still crack up thinking about a customer I had last year that gloated over how he had prospective buyers of his house in NJ write an essay why they deserved the house. He put it on the market right after the Super Bowl too. He was serious too I think as the smugness on his face was one of satisfaction, lol. I high-fived him for getting out in time.
No, my stupid fellow Canucks want to become the next Equity Giants.
At least they seem more in tune with the market than the sellers do…
FED Plans…
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/14/AR2007121401875.html
“Homeowners found to be victims of predatory lending could be empowered to sue their lenders”.
as long as the “victims” that lied any where on their apps get 3 years hard road work, it’s a deal.
“the Fed racked up a long record of neglect in regards to predatory lending,” said Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), who introduced his version of mortgage-lending reform this week. “The Fed was aware of the dangerous, approaching subprime storm for years and yet did not act. . . . It was asleep at the switch. Millions of American families are enduring real hardship because of its failure.”
Chris Dodd, a man of the people.
His campaign contributors:
http://www.opensecrets.org/politicians/contrib.asp?CID=N00000581&cycle=2008
Where were you Chris in 2004? Why didn’t you do anything then?
Yeah, blame the fed and take money from said banks. Nice. Now he wants to soak the taxpayer with the new fha reform.
“Where were you Chris in 2004?”
He was busy researching how he could better the lot of the average American banker or hedge fund manager with a presidential run.
A Connecticut politician helping the hedge fund industry? No way!
People Like Dodd in fact just about any executive will NEVER hire people like me who reads all sorts of alternative media, like Ben’s blog.
This would be a question i would ask all the candidites for Pres….eh hillary eva heer of dee houzing booble blog? Duz any of yur peeps reed it? Ya noe if dae did U wood neva bee Mbarasssing yurself bye wantin a baleowt of the husing “vicktims”
——————-
Where were you Chris in 2004? Why didn’t you do anything then?
Too busy collecting kickbacks, oops, i meant campaign contributions.
Must I point this out. Until 2006 the REPUBLICANS controlled Congress. No Democratic Senator could hold hearings on ANYTHING. Now Dodd and especially Lieberman are way to chummy with Financial interest, but at least Dodd is speaking out about this. He is also trying to stop the Congress from giving the telecoms immunity from illegal spying (which predates 9/11)
I do not think this current Congress has done nearly enough, and they’re too eager to roll over for Bush. But to blame Democrats for inaction before 2006 is naive and just wrong.
“Given what we known now, yes, we could have done more sooner,” Roger T. Cole, the Fed’s director of banking supervision and regulation, told the Senate Banking Committee in March.
What we know now? You’re a Director at the Fed and you didn’t know about the ARM’s, no docs, teaser rates…etc?
I remember over a year ago walking past a huge sign displayed in front of a new condo development in DC, ‘No payments until 2008′.
All these lying bastards had to do is look up and see that things were out of control
Dodd, chair of the Banking Committee, did zero oversight. Zero.
As did Schumer, a committee member. Here’s what they’re supposed to oversee:
Banks, banking, and financial institutions.
* Control of prices of commodities, rents and services.
* Deposit insurance.
* Economic stabilization and defense production.
* Export and foreign trade promotion.
* Export controls.
* Federal monetary policy, including the Federal Reserve System.
* Financial aid to commerce and industry.
* Issuance and redemption of notes.
* Money and credit, including currency and coinage.
* Public and private housing (including veterans housing).
So, did they do anything except take money for campaign contributions?
Must I point this out. Until 2006 the REPUBLICANS controlled Congress. No Democrat could hold a hearing about anything! Now I’m as uncomfortable as anyone with Dodd, Schumer and especially Lieberman’s ties to financial interests. But If you just look at the oversite hearings going on now compared to NO hearings for 6 years, maybe you wouldn’t have a kneejerk reaction to blame it on the Democrats or the nonsensical “both parties are the same”. There have been Democrats in Congress screaming for 6 years for oversite. Dodd for one is now leading the effort to stop immunity for the Telecoms for illegal spying (which started BEFORE 9/11).
If you are looking for some one to take on the big corporate interest. Listen to what John Edwards has to say.
(I know all you Ron Paul libertarians will dismiss that out of hand, so you’re excused :-]
Sorry about the double post/rant. I thought my first one did not get through.
From the hinterlands:
Sales of homes decline in area
http://tinyurl.com/22hd92
Rochester’s real estate market is continuing its zigzag pattern, with sales of existing single-family homes falling 3.2 percent in November compared with the same month last year.
“Rochester now proves out to be the hot spot of real estate in the U.S.,” said Bob Miglioratti of ReMax Plus in Brighton.
Most realtors are a rather pathetic bunch. He must have taken the exaggeration curriculum at the Yun School of BS.
Four years ago, when I saw very big houses being built and sold for half a million in Rochester suburbs like Webster, this was my first clue that things seemed strange. Even those smaller ‘cottages’ at 275K seemed way too much for this locality. Next was this huge area in Webster, all trees cut down for parking and big box stores. As I said, my first clue…. allthewhile house sales were reported as being ‘healthy’ and and how great it is that prices are ‘going up’ every month according to the same local paper.
I moved from Webster a couple years ago because the town was turning into a huge housing development and strip mall parking lot. I am amazed at how many developments were built and now many of those homes still sit empty two years later. The housing prices at these developments hasn’t decresed significantly yet, but it’s just a matter of time. I have also noticed that new home building has slowed considerbly over the past six months, especially in the Rochester suburbs. You can’t sell hundreds if not thousands of new homes when area population is stagnant and loans are not as easy to come by.
As usual, people in Rochester are behind the curve. The bubble will rip through there something fierce. There is already a steady increase in “suspicious” vacant house fires starting a year ago.
I have a friend whose house has been on the market for a long time, in a supposedly “hot” area. I think he’d be happy if houses didn’t depreciate. I have no idea where this bozo gets “double.”
Anyway, this summer I was thinking Rochester should feel lucky to have missed the bubble, but then I took stock of all the new developments and now realize they have it like every other place… you could say new homes were more appropriately priced, but that’s it.
Upstate New York is used to economic depressions. They are veterans at it. They will be fine when their economy tanks once again.
Another lucid moment NYC?
Money as debt……….
For those that have not seen this Video………..It’s certainly worth watching.
http://video.google.com/videoplay?docid=-9050474362583451279
That was 1HR very well spent. I thought I understood the system pretty well, and there were some nuggets in there that were news to me, and very enlightining. Thank you very much for posting this!
It gets even more interesting when you add to the mix unregulated lenders, the Asset Backed Commercial Paper (ABCP) market, SIVs/Conduits, MBS/CDOs, and money market and retirement bond funds.
Excellent. The money system can be seen as making us all debt slaves. But this system evolved over a long period with the best thinkers. Being a slave is a negative but collective enslavement does foster cooperation. Without creditors, who is going to care what you do. Its just human nature, greedy monkeys love to chase dollars whether real or imaginary. Bankers are the masters? They are forced to wear ties. So a fraction I/(P+I) of us just aren’t going to make it, oh well, better not get an interest-only loan.
foreclosure concept- consider where we are vs 1991
when we started the decline of 1989 prices were only 110-120 x rent vs now many places are still 200x
=scary
Try 300X (in Palm Beach). And I can find more extreme examples, that’s just one that I know of personally.
200X is the starting point for rentals in this area now, if you want to go really high end (1-2M dollars) you can start to see some 300-400X numbers. Does that mean that the higher end is more overpriced? Or is there just little rental demand at 5K a month, even if the home is “worth” 1.5M dollars?
If we ever (and I think we will) get back to 120X in the really bubbly places, it will be an absolute disaster. Again, we need prices to fall by 1/2 in many of these areas. No 10%, not 20%, but a full 50% from the peak. Again, I think it will happen. But I also think it will be a total disaster for placed like S. FL, AZ, and Las Vegas).
I should have limited it to townhouse/condo and minimal suburban house
still 200x here s of DC (Soviet)
I agree. The smaller the home (or condo) the less the price to rent ratio seems to be. I was renting a condo for a time at 1250/mo, it recently sold for about 220K. Still too high, but much more reasonable then my current rental, which last sold for 515K, but rents for about 2K a month.
What does that tell me? That people who can afford the big rents (3-5K/mo) all own homes already. That does not bode well at all for the housing market in this area, since a nice 3/2 home in at least 400K in my neighborhood. Not many people left that can afford the 4K a month carrying costs that do not already own. And plenty of people who “own” those home who will soon be losing them, because they also, cannot afford the 4K a month carrying costs.
Michael, you are very familiar with Palm Beach. I have a co-worker whose husband was flipping in West PB in 2005 and 2006. They got stuck with a couple of condos I was told. But they were renting them out. Last week I found out that they own 6 condos. Yes, six. Is there anything in WPB that will allow them not to get hammered as they “wait out the downturn”?
Well, there are lots of good bars and clubs to go sit in during the downturn to take your mind off of it.
Condos in downtown WPB are going to fall AT LEAST 50% from the peak. They may fall more; as, having lived there for a little over a year, there appears to be absolutely no demand of ANY type for these units. The only reason to live there is to go the bars and party. They decided they were for “boomers” once they got too expensive, but the boomers are quickly realizing that living on top of a club is not the lifestyle that they want. Also, the area is dangerous (there are bars on all the doors leading into the development; like, serious, bank style barred entry doors; that’s not a sign of a good neighborhood.
If your curious, the hot locations in WPB are all near the address:
630 South Sapodilla Ave.
West Palm Beach, FL 33410
There are about 2000+ new condos within 1m of that address (which itself it another condo building). Look around that area with Zillow to see how that market is faring. I know it’s bad, but I am not sure how bad it has gotten recently (I moved out ~1yr ago).
Townhomes (2000/sq/ft) in that area were selling for 750-800K at the peak, I fully expect them to fall into the 200’s before this is all over. Again, the problem in that area is that there is NO demand at all. The only people who want to live there are younger kids (like myself) who enjoy the nightlife. You can count the number of young adults that have the money for 300-500K condos in WPB on the fingers of one hand. So, what to do with the other couple of thousand units??
To answer the question in Michael Fink’s “Try 300x” post, I think his two answers are closely related to one another. Price/rent ratios at the high end are higher, because there is very little demand for $5000/mo long-term rentals; that in turn means that any house priced at $1M is hard to carry unless you own it outright and want to live in it forever; that in turn means that collectively, the million-dollar houses are overpriced. A while back, when the LA median was pretty flat, the 25th %ile was rising while the 75th %ile was falling.
BTW I agree with the observation many “million-dollar” houses are for rent for $3000/mo or less.
This thread reminds me of the strange pricing of housing in Interior Alaska. Here, about 60% of housing is rentals because of the migratory population. This has caused a bizarre split in house prices. One can buy a duplex for $175k, but a similar house (in sq. footages, lot size, etc.) would go for $250k or more. The only reason is that duplex buyers are commercial buyers, so they expect to cash flow on rents. Further, if they are using banks for loans, their business plan will be scrutinized. For the SFH, a year ago the credit flowed free and the pricing was based on the bubble model (i.e. it WILL go up, it is a law of nature, so why not overbuy). Here, the bubble has ended but the SFH prices are really sticky. The classified ads show increasing signs of desperation, but still there is the amazing split between duplex and SFH house pricing that is (from a long term perspective) irrational. Do you have a similar bifurcation in pricing in your markets? Perhaps the differential pricing of duplex vs SFH (with similar sqft and lot size) is a flag that a bubble is occurring.
Just remember — real estate always goes up — and you will have nothing to fear…
A stitch in time saves nine.
Looks like housing/credit problems are starting to hit Europe a little harder.
Second Spanish property firm goes insolvent:
http://tinyurl.com/2krftg
The Spanish property sector has rocketed over the last nine years but is suddenly screeching to a halt with house sales falling and price growth slowing quickly.
Underdone & Overdone
When the sub-prime crisis started, the initial hype was over the impending impact it would have on hedge funds. But as the crisis has deepened, there’s very little mention of hedge funds anymore. Since most hedge funds employ leverage–and often to the extreme, where’s the carnage. These guys were not only left holding the bag, but bet many times the amount in the bag! Sure, some may have made the correct leveraged bets, but others had to be on the losing side–and big time.
Meanwhile, the bank stocks are getting slammed in a maner that seems a bit overdone. Most of their mortgages were packaged and sold to investors–including hedge funds. The market reaction is as if mortgages were the banks’ only business, they had all of them on their books, and all mortgages are now worthless! Clearly the banks face major losses from the imploding housing bubble–and especially with home equity loans, but it just seems to be overdone in the price of banking stocks.
WD, you may be correct, but I feel suspicious of your argument, and to the extent that the banks’ deposit and credit sources are also suspicious, your argument would be wrong. The difference between Me and a bank is, I have no debts. The money the bank has lent out is borrowed money, so there’s a “house of cards” feeling to the whole business. Even the easy solution of borrowing at the Fed’s discount window seems problematical, as the banks seem to worry that it creates an impression they are insolvent, which could lead to the reality of their insolvency.
And, what about the various contracts that require loan originators to buy back mortgages that go bad very early? Do the banks have more to gain from this than to lose? If you are a banker (WD), try making your case in more detail; I would be interested.
The hedge funds are fine. I have a former co-worker that went to work for a hedge fund (greener grass syndrome). I caught up with him and asked how they are doing. “We’re doing great. We have really smart guys writing our quant programs.” That sounds good to me. The hedge fund boys are too smart to fail. Bwahahaha. I think I will go pass gas now.
imho, the banks have not been slammed at all yet. With the freeze up in commercial paper, the banks have not been able to do what they do - charge fees for new loans, or collect interest on new loans. Instead, they are getting assets (ie foreclosures) that were pledged as collateral for the loans. And these are depreciating assets. Who wants to lend money on depreciating assets?
In the (maybe not too) long term, either the banking system will totally implode by the banks going out of business, or the Fed will monetize the bad debt, keeping the banks in business. What do you think they will do?
The hedgies are just riding the coattails - if they can’t borrow money to leverage up, they are pretty much out of business, ’cause they’ll make the same as you or me on T-bills, stocks or whatever.
I do not post much anymore. Instead, I chose to work diligently behind the scenes to end this rampant mortgage fraud. As some of you know, I have been chasing down mortgage fraudsters since early 2006. I reported to this blog some of my early experiences with local law enforcement, the state department of real estate and appraisal, and the state attorney general. All of it was a frustrating experience, including the 2 hours I spent in the FBI regional office, where I basically went on a rant in the lobby for 20 minutes until the special agent finally held up his hand to quiet me and said: “I get it. I get it. I understand. We are assigning an agent to these cases and he will be in touch with you shortly.” I must say the FBI has been steadily working on many of the cases and is making a great deal of headway.
I also decided to submit cases to the Internal Revenue Service. You see, I learned that proceeds obtained from fraudulent action are considered ordinary income in the year they are received.
Today I received a letter today from the IRS.
“We received….the information you have furnished and assigned the above claim number. We will evaluate the information you provided to determine if an investigation is warranted and a reward is appropriate. Please retain this notice for future reference.
“It is important to understand….it could take several years until final resolution of all tax matters. In addition, before we can pay a reward, we must collect any additional taxes, penalties, of fines, assessed by reason of your information. Collection action could also take several years.
“We will notify you as soon as all actions relating to your claim have been completed. If you change address, please let me know.”
It appears the IRS, of all the law enforcement agencies in America, is going to be the hammer I have been seeking to most effectively help end this mortgage fraud. It took some effort to negotiate the IRS web site and understand the process, but each of you can do the same thing. You will find the basic information here:
http://www.irs.gov/compliance/enforcement/article/0,,id=106778,00.html
I encourage you to report mortgage fraud when you have a solid case with facts, figures and documents.
I have identified over $20 million of mortgage fraud proceeds to the IRS. It is not very difficult to do and the perpetrators leave a trail of recorded paperwork as evidence. It was never my intention to obtain economic gain from any of my work exposing mortgage fraud. In fact, the hours and days of hard work has cost me a great deal of time and effort, at the expense of family and friends. Well, think about this fellow bloggers: The taxes due on $20 million at a 25% tax rate are $5 million. Then add interest, penalties and collection costs, which could effectively double the amount. The IRS reward for quality information leading to tax fraudsters was recently increased to a range of 15% to 30% of the amount collected. That totals somewhere between $1.5 million and $3 million dollars in rewards! If and when that ever happens, Ben Jones and two other bloggers will see a substantial jump in their PayPal accounts!
I am keeping a journal where I detail all of the trial and tribulations of my journey into the abyss of mortgage fraud. I promise you I will post it with Ben sometime in the next year. It has been a fascinating journey and I hope you enjoy it. In the meantime, I encourage you to speak up and expose the fraudsters. You obtain a wonderful sense of accomplishment and perhaps in a few years, a check for a million dollars!
Paladin
“Have Gun, Will Travel” Wire Paladin, San Francisco
Thanks for the update. Keep up the great work!
cool beans !
What happens if RP is elected and the IRS is eliminated?
Free housing for all…
Thanks, TX and Jingle for the smiles. So much bad news lately, and our beloved old dog passed away early this morning.
I am so sorry. I had that happen this year too. It’s the worst experience I know of.
REHobbyist,
Please accept my condolences.I am so sorry for your loss.
The grief is terrible when you lose a family dog.
So sorry RE for your loss. It’s awful losing a pet.
Sorry about your dog RE - we have two cats that are basically family members and I’d be just as sad to lose them as I would a human family member (maybe more so depending on which family member we are talking about, lol).
Is it considered tax fraud if someone owns a house, lives in it, rents out rooms, but gets mail/claims residence at her families home so that she can get a huge deduction in her taxes by claiming the house as a business loss writeoff? I may be phrasing this wrong, but essentially the money lost on the house payment is being written off as a business loss.
We’ve got a mutt - think “dawg” who’s getting up in years. We got him as a stray when he was a few months old, and he’s been a faithful companion ever since. He’s in his golden years now, and just loves to lay his head on the nearest lap and be petted, or just curl up by the fire. Hate to think of the day when he isn’t around any more - it’ll be a big piece missing from our family, that’s for sure. It’s part of life that the people and the pets that we love, die, but that doesn’t make it easier. Sorry for your loss, RE Hobbyist.
Pelegirl - fraud is intentional misrepresentation of material facts, usually for personal gain. Can’t hurt to ask a more official source.
Based on previous history, I would expect an engineered financial panic or emergency to create public opposition to Paul’s plan (See what happens when you try something so crazy as to eliminate the IRS and FED?!)
That is what happened when Andrew Jackson tried to shut down the second attempt at a central bank. I think Biddle was the name of Jackson’s adversary.
It’s all spelled out in Creature from Jekyll Island by G. Edward Griffin.
Creature from Jekyll Island
Signing Executive Order 11110 didn’t do President Kennedy any good either, did it? http://www.john-f-kennedy.net/executiveorder11110.htm
Gee, I thought the US sold off most of its silver…
“The Creature From Jekyll Island” is a must-read book for anyone seeking to understand our economic and political system.
Ha-ha…touche, txchick, touche….
Anyhow, good luck Paladin, and yes, please do keep us updated on how things progress.
While Ron Paul might wish to eliminate the IRS, he won’t be able to rule by fiat (unfortunately). There’s still Congress and the Courts to contend with. So, even in the event that RP gets elected (Oh Happy Day), it isn’t like he’s got a free hand to do whatever he wants.
That’s why I think Paul is best suited as President. He won’t use Executive Orders or contra-constitutional acts. In fact, he WILL be limited by Congress. If Congress actually votes to Declare War on Iraq (or Iran), Paul would be bound to act on it — but I feel he’d lead a better fight than anyone else (get in, get out, get it over with).
Where Paul’s greatest power would be is in using the bully pulpit to point out why certain bills are unconstitutional, and I have no doubt he would call out the special interests that would profit from a bill’s passage. Can you imagine Paul battling Congress and pointing out each particular area that a bill subverts the Constitution, and then pointing out which special interests would profit from that particular problem?
My biggest fear for a Paul Presidency is that the U.S. debt would skyrocket out of control. Do you have any idea how expensive it would be to keep paying for all those pens used to veto all those bills? Invest in pens today if Paul looks close to winning. You know the rules:
1. Pens are great investments.
2. The price of pens always goes up.
3. They’re not making any more paper.
4. The American Dream is to put a pen in every hand.
5. If you own one main pen, why not own a second one for vacationing with?
6. Wealthy foreigners love our pens, and will start buying when we stop.
7. A pen is mightier than the sword.
Good grief, I’m thinking veto pens might add trillions to the country’s debt, based on Paul’s (correct) interpretation of the Constitution. Our grandchildren will pay for that madness!
In case Paul gets elected, I have hundreds of pens around my home I would be glad to ship off to Washington.
Yes, Sammy - Ask the Terminator. He was supposed to be the knight in shining armor that would totally change CA. Or you could ask old Jesse Ventura. You need to change more than the top gun to make any lasting systematic changes, no matter who the candiate or party is IMHO.
Arnold was nowhere near as committed nor free of influence (campaign contributions). IMO, the most important thing RP would have on his plate would be to form a cabinet of competent people of his own choosing, not the “this person would be good for xyz” hints that the man behind the curtain always comes up with.
To bring the “curtain” stuff into perspective, research back into when Bill Clinton entered the Pres. race — it was very late in the game. Then research who it was that brought him into the race.
“It appears the IRS, of all the law enforcement agencies in America, is going to be the hammer I have been seeking to most effectively help end this mortgage fraud.”
Excellent choice! If they were up to the task of putting Al Capone behind bars, I am hoping they will find it relatively easy to nail hordes of mortgage fraudsters.
Paladin,
Thanks for checking in…we were getting a little worried about you.
And for the record, you the Man!
Glad to hear from you, Paladin, and that you’re getting someplace with all your hard work. Stay safe and thanks for the update!
Good to hear you are alive and well. I really thought you got taken out by the mafia.
“I encourage you to report mortgage fraud when you have a solid case with facts, figures and documents.”
Great work Palladin. I wish i had your zeal and persistence in rooting out all the Mortgage fraud . I live in a hugh slimebucket of fraud here in LA, where 10,000’s of 1000’s of POS inner city ratshacks were overappraised at 100,000-up to half million and sold off to straw buyers or simply to naive gullible immigrants.
Woest cases were in such inner city dumps as Inglewood, gardena, maywood, and pacoima where i saw SHF properties listed and /or sold for up to $700,000 in some of the most impoverished zips in LA.
The amt of fraud in these inner city mostly minority zips is simply staggerring. The investigators wiil need lots of bilingual help in ferreting out this stuff and unfortunately the IRS and all gov’t agencies move too slow and the perpertrators in most cases will simply take their loot and flee back across the border and/ or change their names and identities and escape the consequences.
LA is the capital for every type of fraud, U name it and LA leads the pack. Hell, perhaps as much as 50% of all market transactions in inner LA is off the books stuff and non -reported as income to the state and IRS. So fraud is naturally present here in LA.
Great work, Paladin. Thank you!
Bravo, Paladin!
I hope it pays more than $ 20.00 in cold cash recieved in a envelope!
Great work
Simi, Was that YOU that sent me the $20 bill in an envelope. When I first started out my web site for mortgage fraud submissions, two people sent me checks to a third party P.O. Box (I was afraid to list my home address). I got a check for $50 from a supporter in Washington state (which I never cashed) and an envelope with a $20 bill (which I gave to the P.O. Box owner for her trouble)! I was going to hire a college student and have he/she help me pursue mortgage fraudsters for credit in a real estate class. Alas, family time and business demands got in the way and I did not follow through. Hopefully, the FBI and the IRS will be making the most of the mortgage fraud leads. I have some funny stories to report in my journal. The last one was a mortgage fraudster who just would not stop the fraud and bought a third house for $150,000 cash back. I copied Keith on my letters to the FBI on the first to mortgage fraud deals and told the special agent I had done so. He was perplexed about why I would do that (and the reason was to stop the activity by Keith). I sent in the update on the third house and the FBI agent called me back and said “Keith seems to be sticking his neck up above the horison line a little too often. We will be paying him a visit soon.” It was interesting that it seemed somewhat arbitrary and random that if a fraudster gets stupid and keeps affronting the FBI, they get a burr under the saddle and put him on the list.
The real point of relaying this story to you is to let you know each of you can make a difference. If you see it, report it. Keep after it. Karma is its own reward and a $1 million dollars from the IRS is very Karmatic.
Paladin — nice to see your post and to know that you have carried on with your mission. You’re often referenced here as the person who most aggressively took on the mortgage fraud issue (with apologies to Crispy if he’s been active at that).
Look forward to reading more about your efforts, challenges and successes.
Cramer: Fed needs to slash rates to get housing prices up.
http://www.thestreet.com/_tscrss/video/index.html?clipId=10394606&channel=Cramer+On+Demand&cm_ven=&cm_cat=&cm_ite=#10394606
They’d have done it except they’re academics who lack rigor and refuse to look at the micro economy, he says.
I guess the government has to do what is required to force younger generations to pay more to older generations so they will live less well, brining the “private” market back in line with public policy.
He says he’s never seen a more one-sided market. How about the 2004 to 2005 “buy now or be priced out forever” housing market?
He wants them to drop rates to the point that a new bubble forms. Dropping rates sis not keep the “new economy” stocks from imploding…. It caused the money to go to MBS, ignighting the housing bubble.
He and his ilk are seeing their bubbles implode, and they desperately want a new one to dump their assets into to make enough money to wipe away the sins of this bubble without actaully having to pay for it.
Unfortunatly, all we’ll get is inflation.
Since Cramer visited Cali, he seems to have this new somber, serious mannerism. So dramatic.
Yeah, he’s seriously an a$$hole now instead of just an a$$hole.
Cramer is such a jerk. He never really looked at the Coachella valley nor RIverside. He was staying in the Ritziest of areas where the ‘regular joe’ would think they were in the Land of Oz.. All perfectly manicured landscapes etc. He was surrounded by expensive homes, Jaguars/Hummers/RollsRoyces etc on every street corner of an intersection. I watched him and where he said he “went”. Trust me, he didn’t venture to far from the Indio Polo grounds and didn’t Really SEE anything. But at least he started to “see”.
But like Maria Bartiroma and other numnuts, they never ever really see. They only spew the same corporate hype
while putting $ into their own pockets.
Are they allowed to state what they see? I think they see what we see but do not bite the hand that feeds them. If not, then truly things are worse than we can imagine or maybe we are delusional (?) ?
Let Cramer live in Duroville for a couple of weeks and then tell everyone how great life is. He is so out of touch with reality.
Maybe in CA he had a tussle with some of ex-NV’s prickly flora?
Craigslist has been exploding with house listings, but am I the only one who wonders what this is doing there? http://tinyurl.com/33vouz
$4M for an ugly faux chateau. No thanks. I’d rather have this at a third of the price.
http://www.davidgriffin.com/Detail.aspx?ID=3102
Is that a gun tower on top?
With all the swarms of penniless, bitter FBs and unemployed RE “professionals,” not to mention tax shortfalls gutting essential services like law enforcement, gun towers might be a lot more desireable than granite countertops or stainless applicances.
RE: gun towers might be a lot more desireable
Tony Montana sure could have used one!
So much for the safety of a gate.
Here you go, way better.
http://www.nv.doe.gov/nationalsecurity/stewardship/daf.htm
http://www.nv.doe.gov/library/FactSheets/DOENV_1014.pdf
No, I think you want to buy THIS:
http://www.silohome.com/
Designers and Architects worked to create a warm modern palate with the extensive use of limestone floors
I read this real quick and thought it said “pallet”. I looked at the design again and thought yea the designer was thinking of pallets when he designed the place. Looks like a bunch of pallets stacked together!
Actually, I think the word should have been “palette”, as in a range of colors. “Palate” means the roof of the mouth, or by extension, a culinary style. My dictionary gives “pallet” as an alternate spelling of “palette”, so your mis-reading was actually correct.
Pedantry aside, the house looks OK to me, but a bit too much in the Frank Lloyd Wright style that I’ve never been able to appreciate.
I wondered what this is doing at CL:
http://saltlakecity.craigslist.org/rfs/506385300.html
Waiting for an idiot who’s looking to catch a falling scimitar.
Here is your pot-o-gold at the end of the rainbow.
http://stgeorge.craigslist.org/rfs/509098759.html
Who in hell would want any one of those monstrosities? WTF? 2000FTsq is too much but these places are absurd.
I like that!
Appealing to such a variety of crowds, this home offers something for everyone and truly is in a class of its own.
It is not selling, so now is the time to be creative. Some of the people on the craigslist money forum sound like they must be multimillionaires, so there you go.
I’m not shocked that they are wishing for $300/s.f., since that kind of custom work in California probably cost at least $200 a foot and the three acres is worth something. Pointless to comment on the style, but I wonder why a house in this price range would be advertised on a Web site so pedestrian as Craigslist. Presumably someone is convinced that search engines find it because all of the people out there who want to spend $2-3 million for a house just Google it. That part I don’t believe.
F.R.A.U.D. = Federally Regulated Assistance, Under Duress
What are the utility bills on those monsters?
This may be a repeat post, but at any rate, it looks like a good one to repeat…
MONEY CULTURE
Daniel GrossThe Future of Real Estate
The cockeyed optimists of the National Association of Realtors.
Dec 11, 2007 | Updated: 6:04 p.m. ET Dec 10, 2007
http://www.newsweek.com/id/75465
THE MONEY CULTURE
The Winter of N.Y.’s Discontent
Today, more than ever, Gotham deserves the sympathy of the nation. (Three words: New York Knicks.)
By Daniel Gross | NEWSWEEK
Dec 17, 2007 Issue
http://www.newsweek.com/id/74456
The winner of N.Y.’s disconnect, was all on the basis of fraudulence.
Let the chips fall where they may…
“Content makes poor men rich; discontent makes rich men poor.”
Ben Franklin
I went to see the Knicks get beat by the Mavericks last week. They are just terrible. I can’t figure out how Isaiah Thomas has a job. He must have nude photos of somebody.
“Tourists, drunk on their potent home currencies, turned Rockefeller Center into Eurotrash Central.”
This is true. People talk about ugly Americans. The manners of Europeans often make the hip-hoppers and white collar trash guys look good. I wish the dollar would strengthen just to send their unshowered stench back to their own home countries. Let them petrify their own neighborhoods.
Any independent evidence on this CNBC report? That would leave a mark on NY residential RE prices…
Responding to a CNBC report that the bank might slash 45,000 jobs, Citigroup said it was considering cuts but that “any reports on specific numbers are not factual.” (The same might be said about the valuation of subprime debt on Citigroup’s books.)
Reward the deadbeats, punish the responsible. Sounds like a heck of a plan!
NATION’S HOUSING
KENNETH HARNEY
Help comes with a catch for subprime borrowers
December 16, 2007
WASHINGTON – It may be the only test you flunk if you score too high: It’s called the FICO test and it is a key element of the sometimes arcane new guidelines governing which homeowners qualify for “fast track” interest rate freezes on their subprime mortgages, and those who don’t.
The rate freeze and loan modification program, announced Dec. 6 at the White House, is a voluntary, nongovernmental effort by major lenders, mortgage servicers and bond investors to provide alternatives to foreclosure for homeowners facing unaffordable payment resets during the coming two years.
http://www.signonsandiego.com/uniontrib/20071216/news_1h16harney.html
Sometimes I hope for some real economic pain just to pull Americans’ heads out of their rear-ends. We need some toughening up, a return to common sense and a society that rewards good behavior, not bad. The first thing that has to go is political correctness and this misguided focus on everybody’s “self-esteem”.
AMEN. I posted something like that on other story, but it didn’t show up.
I completely agree. If the average amurikan would just realize that INS has gone up, taxes UP, costs UP, school UP, Gas UP, and pay has stagnated or gone DOWnnnnnnnnnnn.
The amurikan is dumbed down and the housing was the only reason many had $ to buy the life they couldn’t afford. So, the middle class has to wake up. Wealthier are getting wealthier faster, and our incomes are lower in real dollars. Now the wake UP call.
Yeah but it sure must have been a fun 3 years for the burger flippers to live like junior Donald Trumps and drive SUVs around. A good grasshopper fiddling 3 years. Party’s been over for more than a year but they don’t know it…yet.
I agree 100% with your thoughts.
Lane
NYCB - well put. Couldn’t agree more.
Seventy percent or bust…
Industry focuses on the Latino market
Builders fear low homeownership rate
By Lori Weisberg
STAFF WRITER
December 16, 2007
The lagging homeownership rate among the Latino population bodes ill for the future, when Hispanics will become the dominant ethnic group in California, warn California home builders.
A survey conducted for the California Building Industry Association highlights the importance of homeownership among Hispanics but also acknowledges the cost barriers they face in trying to own a home.
Within the next 30 years, state demographers project that Latinos will account for 80 percent of California’s total population growth.
“We know that Latinos are underserved and we feel that will be a problem in the future,” said Robert Rivinius, president of the state Building Industry Association. “We’d love to see all the state, including Latinos, get up to the nearly 70 percent homeownership rate that the country enjoys.”
http://www.signonsandiego.com/uniontrib/20071216/news_mz1h16latino.html
“We’d love to see all the state, including Latinos, get up to the nearly 70 percent homeownership rate that the country enjoys.”
Those struggling to make payments must really be “enjoying” home “owner”ship. What would be the rate of home ownership if it only included homes that are owned outright with no remaining debt?
If they really wanted to increase the rate of home ownership, then why have they not chosen to build homes that people can afford? How has building more McMansions contributed to increasing affordability? The current situation is far worse than the current home ownership rates would imply. Most current owners, if they had to buy their current homes now at their current prices couldn’t do it. Prices must fall much, much more to return to sustainable 50+% home ownership rates.
As for a target of 70% home ownership, is that even desirable much less achievable? With greater mobility and less stability in employment, there are reasons other than price for rates of home ownership to be going lower in the future.
That is true, with home prices destabilizing, people will either stay in one place or rent.
With greater mobility and less stability in employment, there are reasons other than price for rates of home ownership to be going lower in the future.
There certainly is more mobility. I cannot get an upgrade to first class between Phoenix and Baltimore on US Airways. Flights are always packed except the late flights with connections. I sit in a frequent flier row and met people who commute regularly between those two cities. They found the same pot of gold that I found. Being footloose and open-minded to own little and commute far usually means bigger paychecks. I think being footloose will become more prevalent to other white collar types during the upcoming recession/depression. It will be an attempt (maybe successful) to retain high incomes and avoid long spans of unemployment. Having a higher income for me is far more important than to have a permanent house of my own. I’ll revisit that issue when rents are in line with housing prices.
“A survey conducted for the California Building Industry Association highlights the importance of homeownership among Hispanics but also acknowledges the cost barriers they face in trying to own a home.”
Barrier #1: A median home price that exceeds $500,000. WTF? I hate these marthafoggers.
Seems that at least in Arizona, many of the Hispanics are desperately leaving the state. 15 days left until the new law takes effect. Employers will be fined for knowingly hiring non-US citizens starting in 2008. Should be a good amount of houses up for sale for that reason alone, but I wouldn’t be interested in those houses anyway. Many of them will be trashed for revenge against this law against illegals.
Projected CA budget gap is growing by $bns per day…
California budget deficit widens
Friday, December 14, 2007
print contact a writer mail to a friend
Font Size: Larger|Smaller
BUSINESS REPORT
All News »
» IMF pushes Turkey for fiscal discipline
» Windsorville Makes Hostile Bid for Bulgarian Property
» Fitch: U.S. housing slump to extend through 2008
» In New Orleans, demolition of public housing stirs heated debate
» Bohemia May Be Only Bidder for O2 Czech Property
» Edwards of LaSalle Investment Favors Asian Real Estate in 2008
» YDA Group to construct 10,000 residences
» European inflation accelerates on food
» Citi reveals subprime blow
» Oil demand growth forecast revised
» Expecting rise in demand
» Odds of recession rising, Alan Greenspan claims
» Old commerce code cracked
» Parliament endorses gov’t budget
» Hike in Istanbul taxi fares
» Akzo Nobel wins EU approval
» Failed banks cost Turkey $60 bln
» MORE
California budget deficit widens
California is facing a $14 billion shortfall next year, $4 billion more than previously forecast by a state legislative analyst, the Sacramento Bee said.
http://www.turkishdailynews.com.tr/article.php?enewsid=91294
Half way there?
Depending on the market, sales volume peaked sometime in the latter half of 2005, and prices in each market peaked about 6 months later. It is now the end of 2007. I predict that the bottom, price-wise, is less than 18 months away. And year-over-year sales volume could start to pick up even sooner.
Capitulation comes in 2008. Then the recovery can begin.
fwiw, the observation has been made here before:
In the last cycle, SoCal prices bottomed 18months after foreclosures peaked.
http://www.youtube.com/watch?v=DKZmIzEMUN8
On this day in 1773, the Boston Tea Party marked the beginning of the American colonists uprising against British misrule. Today in 2007, Ron Paul supporters are staging their own Tea Party, in an attempt to take this country back from the corporate plutocrats and their Establishment political hacks. We will attempt to make history by raising $10 million in a single day - an audacious, perhaps impossible feat by the “forgotten voters” of the thinking, productive middle and working classes in this country. Wish us and Ron Paul luck!
Sincerely,
Sammy S
Watched it…..wouldn’t be surpriced if the man gets an accident or if the FBI finds child pornography on his PC.
Thanks for watching, Dutch Renter. I too, am worried about what the Powers that Be might do to Dr. Paul once it becomes clear their policy of ignoring him isn’t working. If by some miracle he actually raises $10 million today - and I sent in my $100 already - he’s going to come in for a lot more malevolent attention from the political, financial, and media elites - wait and see.
Comments about AG’s interview on NPR Friday.
http://tinyurl.com/2c5guc
Asked if the Fed could have prevented, or eased, the U.S. housing bubble, he said, “There’s only one thing we could have done — cutting off short-term credit. But that would have broken the back of the economy and brought the housing boom down.”
So I can only assume that if the Fed couldn’t do anything to stop the boom, they can’t do anything to stop the unwinding.
And: Fed Taking on Abusive Lending Practices
http://tinyurl.com/yovw4h
“As for the idea of setting aside money to cover taxes and insurance, consumer groups worry that subprime borrowers do know about these expenses or might not be able to budget for them. These groups also have raised concerns about lenders quoting subprime borrowers monthly payments that do not include taxes and insurance costs.”
If people are so irresponsible (trying to be nice) that they can’t even understand how much their mortgage payment is going to be, why should they even get a loan? An understanding of remedial math should be part of the mortgage app process.
So in effect he just came out and said he deliberately did not want to deflate the bubble. And yet in prior statements he said that it is impossible to discern the existence of a bubble except in retrospect.
Someone is truth-challenged.
Most people can’t remember the plain-text lies they tell. Imagine trying to remember 15 years of cypher-text.
An article on property tax assessments in Greenfield in western Massachusetts:
http://tinyurl.com/24qytf
“If you own a condominium in town, then you’re going to see a big hike in your property valuation — more than 30 percent in some cases.”
“Assessments of all property types increased, except for Chapter 61A farmland, which decreased by 19 percent. Chapter 61 forest land and Chapter 61B recreational land assessments all stayed the same according to state assessors, who decide the value of such land.”
“The average value of single-family homes increased by 5 percent, two- and three-family homes increased by 7 percent and large apartment complexes increased by 3 percent.”
“The town’s tax rate was recently set by the state at $16.88 per $1,000 of valuation, a decrease of 22 cents from last year’s tax rate of $17.10.”
That’s steep. That makes California look cheap in comparison.
“The town’s revaluation is done every three years.”
Does that mean they’re locked into paying property taxes at peak price levels for the next three years even though prices are now declining?
In New England, carrying costs are eating these people alive. Even here on this bog I hear people saying “I want a farmette, I want 10 acres, I want I want I want”. Those wants will eat you alive too. I NEED 1300sqft. of energy efficient space so as to continue fighting the war against savers.
Yeah, I know - count me in as one of the “I wanters”, farmette wise. We’re living in what we need right now and it’s good enough. Life is good in the here and now.
Honestly, I don’t know if buying real estate in NE will be a good deal within my lifetime because of the property taxes. VT has only gotten worse with it’s social promises. If we ever do decide to do the farmette thing it will probably not be here.
VTer. I hail from Wells and I can tell you there ain’t no money in it. A farmette is suppose to cashflow and I’ve yet to see anyone make that happen.What I want? Low carrying costs. If that means a mobile mansion then so be it.
I actually like physical work over sitting at the computer (despite my posts to the comments section).
Unfortunately, I haven’t figured out how you make money farming in modern times unless you inherited one free and clear or living in Nebraska. I agree that low overhead is everything - I suspect as debt/overhead averse as we are, we may never get that farmette, but that’s okay. 
LOL, go ahead and jack up the property taxes in Greenfield. That should go over well… there is no industry, no jobs, nothing. That town is north western Mass, close to Vt. In college, I drilled their on weekends with the National Guard (B Co, 1/104 Light Infantry).
That tax rate is killer. As a point of reference: I own a 4-family in a city of 97K people in Southeastern Mass. My rate per $1000 is about $12. I’m within commute distance of Providence and Boston. That is some carrying cost for an undesirable location in the middle of nowhere…
http://www.ronpaul2008.com/
Ron Paul set a very ambitious goal to raise $12 million this quarter - as of today he’s already blown past that. Maybe there is still hope for the future of this country, not just in Dr. Paul’s candidacy, but more importantly, in the message of limited government, true liberty, and individual responsibilty.
GO AWAY WITH YOUR CAMPAIGNING!!
Ron Paul is a loon.
Any woman who does not want to be barefoot pregnant and in the kitchen HATES Ron Paul
Any one who thinks that people should have the right to their own beliefs and not have to put up with fundamentalists, HATES Ron Paul
Anyon who thinks that MORE tax cuts when the US is in hock to its eyeballs might not be the way to go HATES Ron Paul
ANd what we had even more than RON PAUL are his little band of whacky fanatics posting slogans all over the web - it makes us HATE HIM MORE!
So I’m risking troll feeding here:
If view points on issues other than your own cause you this much aggravation you may want to do something else with your time than read this blog. This board appears to naturally attract those people who have moderate to libertarian views in many areas of life.
I’ve seen links and discussion of Ron Paul for over a year now here. I’m guessing that it’s not going to stop because you think he’s a loon and/or don’t like his stance on abortion, income tax, etc.
It’s a cold, snowy day–hope your hatred keeps you warm.
AnnScott,
Your rabid outburst reveals a willful ignorance of Ron Paul, his positions - based on an archaic document called the Constitution - and the commitment of his “whacky band of supporters.” Yes, we’re whacky indeed to want to live as free citizens in a free country. And in case you hadn’t noticed, women - especially THINKING women, which you most emphatically are not - are well-represented in our ranks.
I suggest you vent your lunatic ravings in the office of your nearest mental health professional, instead of in here. They will be happy to prescribe you meds that can turn your peaks and valleys into gently rolling hills.
Try visiting RPs website. You could reduce your ignorance, instead of trumpeting it in here.
I’m a woman who is firmly pro choice and has no tolerance for religious prosletyzing, and I will vote for Ron Paul. He was actually my congressman when I lived in the Houston area.
As for whacky little band of fanatics, don’t think so. $14M is a lot of money and the day has more than half left to go.
I’m firmly pro-life, but note that Dr. Paul - a practicing OB-GYN who delivered more than 4,000 babies - has correctly stated that this is an issue that is not in the Federal government’s domain, and needs to be decided by the individual states.
Thanks for the support, TxChick. As for you, AnnScott, you and other bovine herd creatures are probably best off just lowering your heads from those pesky Ron Paul Internet postings, and continuing to munch the grass.
$14,000,000+ and counting
Correction
$14,750,000 and counting.
http://www.ronpaul2008.com/
Ron Paul supporters are trying to raise $10 million dollars in a single day - today - to commemorate the Boston Tea Party and signify a new “American Revolution.” Going into today, Ron Paul had already raised $12 million for the quarter - not the day - which is still a HUGE amount considering he’s not getting a dime from corporations or PACs. So far today he’s raised $2.5 million - very impressive for “a whacky band of supporters.”
Update: As of 7:16 PM, EST, Ron Paul has pulled in more than $16 million for the quarter (his highly ambitious goal was $12 million). More than four million of that has been raised since midnight Saturday, putting RP on track to make history with the highest-ever one-day fundraising total - all of it from small, individual donors.
Happily, I stand corrected. RP has pulled in more than $4M so far today - $16M for the quarter - and the pace of donations is accelerating into the home stretch. History is being made today, people!
With an hour to go (11:01 PM EST), Ron Paul has raised more than $5.5 million dollars today - $17.5 million for the quarter. Ann Scott must be overjoyed.
I’m a woman who is firmly pro choice and has no tolerance for religious prosletyzing
Same here. I’m more on the fence about Ron Paul because I haven’t had a chance to throughly read through his platform. Honestly, even if I disagree with some portions of it and Ron Paul is simply honest and can’t be bought I’m still voting for him. From what I’ve portions of seen, though, I actually do agree with most of it.
I’m young enough that I don’t remember a time when the whole abortion issue has not colored the political debate. After a decade or so, voting on fear gets old.
Congress offloaded it’s obligation, (if it had any at all if you believe it belongs to the states) to make a decision to the courts. Since then abortion access in many conservative states had eroded considerably as conservative groups have focused on de facto regulating it out of existence. It sounds like the worst case scenario under Ron Paul is simply an acknowledgment of the current condition of things: abortion access in some states is much better than in others.
Abortion as an issue bores me. Let’s worry about the ruinous monetary policies going on and an endless war that has drained resources we need here at home.
Abortion as an issue bores me.
I agree. Half decent candidates are hard to find and we’re up against some huge issues in the next decade. I’m tired of the abortion (and the whole gay rights thing) defining the political landscape. We have much bigger issues, including social security and empty treasury, to deal with.
Ditto Chick and VT. I’m going to change my registration, from Libertarian to Rep, just long enough to vote for him in the Florida primary then switch back again.
http://www.youtube.com/watch?v=YrdRtu2nnT0
Hey Ann Scott - you’ll love this. Not only are Ron Paul’s female supporters more intelligent and thoughtful than their peers in the general populace, but, also unlike you, many are hotties as well. Learn something….
http://www.youtube.com/watch?v=zh72NdsbiWA&feature=user
In Liv We Trust!
Troll alert.
If you don’t like the post skip over it, I try to skip over yours. Your “best schools” and condescending tone never have impressed me. If the special people, in your special town, seek your superior advice in matters of finance and life thats great. I think you are a pain in the #ss.
Calling out trolls is an unpleasant job, but somebody has to do it.
P.S. You are a troll.
My comment was for AnnScott
P.S.
I generally enjoy your posts P.B. but I’m sure you can be a pain in the #ss also
“If there is anyone here I have not offended, I apologize.”
Johannes Brahms (1833–1897)
BTW, Housing Wizard posted a masterpiece of a response to AnnTroll’s FHA bailout comment yesterday. Check out near the top of yesterday’s bits bucket if you are interested:
Comment by Housing Wizard
2007-12-15 10:48:27
http://thehousingbubbleblog.com/?p=3877#comments
I don’t like many of Ron Paul’s stances and won’t be voting for him; however, the way you wrote your diatribe IMHO was rude and over the top, thereby losing you credibility. The beauty of this blog for me, for the most part, is it’s a bastion of civil discourse totally lacking in society these days. The idea that people can debate issues without disrespecting each other in total is what we need more of. You can argue a position without demeaning another’s beliefs. It is sometimes difficult to do when it comes to politics and religion, but that doesn’t mean we should give up and just start bashing each other over the heads in frustration. The decisions on the party candidates will about be done and finished in February. I don’t think Dr. Paul has much of a chance, not because I don’t agree with him, but because I think he was mistaken in running as a Rep instead of independent. I just don’t see him garnering enough support from the National Republican Committee.
On an online poll of Republican candidates held by the Pensacola News Journal this past week Ron Paul came in first place with 35% of the votes cast (about 5,000). Probably a bit of ballot stuffing but still an excellent showing.
Ron Paul is scaring the sh#t out of anyone who supports the globalist agenda of the current power brokers–whether they fly under the dem or repub flag. Watch the evening new broadcasts,
they don’t even include him in their lists of candidates to question.
As this crisis deepens and widens, Ron Paul’s appeal will only grow. They can’t shut down the blogosphere, and they can’t shut down Ron Paul. He is our best hope for change.
they can’t shut down Ron Paul.
They can’t? Then you must think Demopublicans are not corrupt.
Although I prefer Ron Paul, I too, think there will be a threshold of fund raising or something he will cross and he will get set up, like some earlier posters were suggesting. This won’t prevent me from supporting him. It will only reaffirm that direct action to assert your individual rights is the best way to get to your desired freedom, instead of trying to persuade millions of pablum-fed people to actually think and vote for Ron Paul. I refer to Harry Browne’s book “How I Found Freedom in an Unfree World.” On this forum, I’m private and have some assurance of anonymity. In public, I hardly tell others my viewpoints. It’s been said that there are tens of thousands of laws on the books. The average American unknowingly violates half a dozen laws (whether local, state, or federal) every day. At some point you ask yourself if it really matters who you vote for, since you know that you can exercise the freedoms you cherish without being caught as long as you do not broadcast what you are doing.
http://www.statesman.com/news/content/region/legislature/stories/12//16//1216ronpaul.html
Bill,
I respectfully disagree with you on a number of counts. Isolated, atomized individuals will never accomplish anything, or be noted by anyone. While the pundits sneer that Ron Paul has “50,000 hard core Internet supporters,” I’ve met (and recruited) quite a number of real, flesh-and-blood folks, good people who have had their apathy cured by the chance to actually stand up, be counted, and DO SOMETHING. I’ve gone to RP rallies and meet-ups. Successful political activism at the grassroots level requires direct, personal connections, something the Internet will never replace.
Sammy, if you’re from MN, as I seem to recall you mentioning in the past, you should know from our experience with Ventura that changing one leader at the top will accomplish diddly-squat. Ventura just turned over his job as governor to a group of career politicians and spent his time posturing and whining while they actually ran the state. Not as if he had much choice, being a political party of one.
If Ron Paul got elected, the same thing (no change) would happen. Because he, too, is a party of one.
One is better than none
If Ron Paul got elected - and I freely admit that’s a long shot - it would shake our political establishment to its core. It would also inspire other candidates with principles. I don’t like assumptions that he won’t accomplish anything, based on past precedents like Jesse Ventura. Ron Paul may not be able to execute a flying scissors kick in the ring, but he’s a man of honor, intelligence, and integrity - in other words, the opposite of what’s in the Oval Office right now. Even if he loses, the message is going out to the Establishment: Despite your control of the MSM and tireless efforts to hoodwink and distract the sheeple, some are waking up and standing up for true freedom and liberty.
There are vast differences between Paul and Ventura. Paul has long experience in Congress, he has done his homework on key issues of importance to this country and he did not take the decision to run for Pres. on more or less of a whim, as did Jesse. While both attract those who want to vote out incumbent scoundrels, I believe Paul and his supporters are far more educated on complex national political issues than Ventura or any other of the what-the-heck gubernatorial candidates whom I can recall.
Government: The European Union’s freshly negotiated “Reform Treaty” sounds innocent enough, but it’s in fact a document that, if enacted into law, will mean the end of the nation-state there as we know it.
Bye-bye democracy, hello Eutopia. What has emerged is a nightmare of a deal that creates a powerful — and unelected — European Commission president, a foreign policy czar, dozens of new bureaucracies and 250 pages of rules, regulations and laws.
For believers, the old ideal of a “common Europe” may finally come true. With 27 nations, 495 million people and a real GDP of about $13.9 trillion, it will exceed even the U.S. in size.
But it will more resemble the dystopic totalitarian state, Oceania, from George Orwell’s “1984″ than the United States of America — on which the EU was explicitly modeled.
Sadly, the EU’s recipe of cradle-to-grave welfare and state-directed capitalism has failed — with the EU now lagging badly behind the U.S. on most measures of economic progress and well-being.
http://www.ibdeditorials.com/IBDArticles.aspx?id=282442803288333
I see some massive problems in the world’s future. What the PTB are doing in Europe is just vulgar. The further a government is from the people the less representative it is. We need to try to reign in our federal government and the Europeans are creating an unaccountable superstructure. Good lord.
Time to short the euro?
Not an expert but my impression is that the current love affair with the Euro had more to do with it not being the dollar and major currency than any particular intrinsic value.
As noted in this thread, Europe has made too many social promises it can’t afford to keep, a population that is aging more quickly than the US, and several countries that at some point may decide to go back to printing their own money.
Europe is in for some serious hurt. As messed up as things have gotten here - IMO we’re still in a better position. Imagine the fireworks over there when they really start “reforming”.
E.J.,
This is why it’s important for the US to experience the pain of the bubble. We’ve got to keep that better position.
If the reality of that scenario plays out, we may need to take Europia from Green to Orange, on the “Political Risk” charts.
I wish our friends in western Europe well, we need them as a counterbalance to China and the Muslim world–but this is a nightmare scenario. The housing crack-up will hit them too, and the losses from mortgage-backed securities, and now, the falling dominoes in the commercial re sector. Money changes everything…especially massive losses.
Go long on riot gear suppliers.
Easy Al was on This Week, did anyone watch? I agree with him on this: these half measures are doomed to fail, better to let the markets wash out and then intervene.
“It has become appallingly obvious that our technology has exceeded our humanity.”
Albert Einstein
Estate that served Vick dogfighting headquarters enterprise doesn’t sell
http://canadianpress.google.com/article/ALeqM5hduJ1yPBKkPo39-iI-07dxp3zUWQ
I didn’t see the people in the crowd I thought we needed,” Wilbur Ray Todd Jr. said after rejecting the only serious bid - $747,000, the property’s assessed value for real estate tax purposes.
Todd said he thought the 15-acre country estate in rural southeastern Virginia was worth at least $1 million, even without “the celebrity factor.” He now plans to list the house for a more conventional sale.
Good Luck!
Lower the asking price to $1, and you will find a buyer. Woof, woof!!!
I have followed this site for a long time and your predictions, on the whole, have been very accurate. I am from Canada and the troubles are just starting to show here, mostly due to slow downs and inflation. Housing seems to be lagging the situation in the U.S., but we have lots of F.B’s here as well. Question. Where would YOU put your retirement investments. Mine are in an RSP similar to a 401k. These investments are primarily in Canadian equities, bonds ect. Some are in foreign equities, including U.S. companies. Any advice?
Rosie — I’m please to respond precisely because I have no qualifications of any sort to give you any investment advice. The ones who are qualified to do so are polite and understandably cautious about giving advice directly, as I would be. If you read Ben’s threads thoroughly each day, you will learn a lot of what you want to know — through the anecdotes of personal financial transactions done by posters and by the exchanges among them when there are competing views. FWIW — didn’t want you plea to go completely unanswered.
On This Week, as reported on Bloomberg, Greenspan said he favors cash bailouts directly to home debtors because it would cause less distortion to the economy at the expense of a short term budget deficit instead. He says this would be in contrast to trying to fix prices or interest rates. I think at this point he’s just trying to salvage his legacy as more and more people come to realize what a first class skunk he really was. Paying cash to defaulting homeowners fixes prices by putting a floor below the peak prices that they’d paid. It prevents the market from acheiving the clearing price for these assets. I suppose that when you’ve accepted the idea of a central bank, you also have accepted the viability of intervention in markets.
The way i understood him was the current method of trying to stabilize the markets would only prolong the pain. I thought he favored letting the market correct and then step in all at once. (like ‘87) Fighting the decline only burns up ammo and acomplishes nothing.
There’s already a cash-bailout available: it’s called the short sell. No need to involve new money into the system, just let the risk-takers see the downside of risk, rather than the upside of reward.
I came up with a perfect solution to the problem: signature loans. Let the people sell the homes for what the market will pay, and whatever the difference can be loaned to the seller at a fixed rate for 30 years.
$300,000 home sale, $360,000 on the mortgage. Pay off $300,000, and loan the seller $60,000 unsecured at 5.75% fixed for 30 years. That’s just $350 a month the seller will have to pay for 30 years, and a great way for them to remember that they made a big, big error in judgment.
That’s my bailout plan. The seller wins (by getting out from under a depreciating asset), the bank wins (by eventually getting their money back), and society wins because the Fed doesn’t have to create more money.
There has to be a penalty for the bank for being stupid enough to loan the money, 3% fixed for 30 years.
I really like this plan. It’s easy to understand and covers everyone.
1. FB’s can pay to protect their credit rating if they want to. (think of the penalty as 5X your cable bill)
2. When prices come down, FB’s can consolidate their debt.
3. One thing I’m not sure about, if the fed lowers rates, it will help these folks out with lower payments and inflating the problem away.
Are people doing this now? It seems like a bank and an individual would come up with this on their own. Although I’m not sure the bank would be will ing to take unsecured debt.
Alas, rational plans like that seem to have no chance at all of becoming reality. However, you did tickle my memory of days past when sellers often took paper for some or all of the selling price of a house. Wonder if that will come back.
Actually I like you plan . Another way in which the market can move faster is by sellers that have equity taking back some paper ,so that the institutional lender is in a lower risk position and therefore will be willing to lend . Lets see how sellers feel about lending a second T/D/ to flakes .
“Greenspan said he favors cash bailouts directly to home debtors because it would cause less distortion to the economy at the expense of a short term budget deficit instead.”
I think that is a great suggestion, subject to the proviso that the direct payments to FBs are funded out of the proceeds of AG’s book sales and speaking fees, and also out of investment banker bonus and retirement pay.
Greenspan Favors Bailout
Bloomberg
http://tinyurl.com/2kvba3
I just thought of something: a new show for Foxworthy “Are You Smarter Than a Central Banker”.
This ought to crimp future building.
http://www.suburbanchicagonews.com/heraldnews/news/699184,4_1_JO16_WATERSHED_S1.article
To Bucks Piper. Maybe we should look for tech shorts now.
http://www.eetimes.com/news/semi/showArticle.jhtml;jsessionid=T4HW1TYE0TGKGQSNDLRCKH0CJUNN2JVN?articleID=204803778
Probably not a good week to get shorter in the stock market. This poll (scroll down in link) has been a remarkably good contrarian indicator over the past several months, and the more bearish the sentiment the more likely the market to go up. Also, have noted that Mondays have generally followed sentiment and performed opposite of overall week - so the indicator says buy/cover shorts on Monday close.
http://www.thestreet.com/s/coming-week-winter-storms/markets/marketfeatures/10394705.html
Who is to blame for the subprime crisis? He who must not be named.
John Authers: Harry Potter is really about the subprime crisis
By John Authers
Published: December 14 2007 17:25 | Last updated: December 14 2007 17:25
What books should be on investors’ wish lists this holiday season?
The most popular book of 2007 also proved to be a good allegory for the problems the markets faced all year. In JK Rowling’s Harry Potter and the Deathly Hallows, our teenage hero has to contend with the evil Lord Voldemort, who has split his soul into many different parts, and hidden them across the world.
http://www.ft.com/cms/s/ae474fa0-aa3c-11dc-a779-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fae474fa0-aa3c-11dc-a779-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Foreclosure isn’t sinister enough of a word…
Day Of Adjudgement (D.O.A.)
Has a much nicer finality to it.
Has inflation really hit double digits?
“Double Digit Inflation is Here” by Michael Fox
http://www.smirkingchimp.com/thread/11595
“I won’t make you wait: it’s 3.2%. For one month. On an annualized basis, that is (without compounding) 38.4%. It is the highest increase in 34 years, and if you remember the inflation that we endured in the mid 1970s, you know that this does not bode well for next year’s consumer prices.”
Why not compound it, to get the full drama of exponential growth into the illustration?
(1.032^12-1)*100 = 46 percent annualized. OUCH!
I just read on cnnfn.com that Greenspan is recommending “cash infusions” to distressed homeowners in the way of tax breaks/cuts and government spending programs. Greenspan says that a short-term budgetary problem is preferable to interfering with interest rates and mortgages over a longer term.
I’m just shaking my head at this… I thought people were joking when they mentioned Helicopter Ben and his drops of cash directly to the FB’s. I guess we should have taken it more literaly.
http://money.cnn.com/2007/12/16/news/economy/greenspan_mortgage_relief.ap/index.htm?postversion=2007121618
Luckily the volatile food and energy sectors are not part of core inflation that the Fed uses to measure inflationary pressures in the economy.
World food price rises set to hit consumers
By Javier Blas and Chris Giles in London and Hal Weitzman in Chicago
Published: December 16 2007 22:08 | Last updated: December 16 2007 22:08
Global food prices will come under further pressure on Monday as benchmark prices for cereals at much higher levels come into operation, making it almost inevitable that a second wave of food price inflation will hit the world’s leading economies.
In Chicago wheat and rice prices for delivery in March 2008 have jumped to an all-time record, soyabean prices are at a 34-year high and corn prices at an 11-year peak.
EDITOR’S CHOICE
Tariffs slashed as food inflation bites - Dec-16
Soaring food prices drive Chinese inflation to 11-year high - Dec-12
Concerns over food inflation as harvests fail - Dec-11
Bad harvest casts a long shadow - Oct-30
UN warns of food inflation effects - Oct-29
Editorial comment: The high cost of cheap food - Oct-24
Knock-on price rises are set to hit consumers in coming months, raising inflationary pressure and constraining the ability of central banks to mitigate the slowdown in their economies.
http://www.ft.com/cms/s/0/03de75c4-ac22-11dc-82f0-0000779fd2ac.html
CDOs (Collapsed Debt Obligations) are casting a very long shadow over the global economy…
Rural Australia suffers from debt exposure
By Peter Smith in Sydney
Published: December 16 2007 22:01 | Last updated: December 16 2007 22:01
The residents of Tumbarumba, an outback town in the foothills of the Snowy Mountains, have little contact with the exotic world of structured debt. But at one point this year their local council had invested close to 70 per cent of its investment portfolio in collateralised debt obligations.
Tumbarumba is not alone. Dozens of Australian councils, charities and a public hospital operator invested heavily in high-risk CDOs actively marketed by Grange Securities, a fixed-income specialist owned by Lehman Brothers, the US investment bank.
(EDITOR’S CHOICE
Lehman faces legal threat over CDO deals - Dec-16
Lehman rides out credit crisis - Dec-13
Lex: Lehman Brothers kicks off earnings - Dec-13
Citigroup management shake-up begins - Dec-14)
Similar pain afflicts communities across the world, from Norway to the US, as a result of direct and indirect exposure to exotic and complex debt instruments that failed to price risk accurately in the run-up to the credit meltdown.
http://www.ft.com/cms/s/0/fda5e240-ac09-11dc-82f0-0000779fd2ac.html
Maybe the CBs ought to first wait for the the stink cloud of legal issues to disperse before they start indiscriminately bailing out (potentially) bad actors?
Lehman faces legal threat over CDO deals
By Peter Smith in Sydney
Published: December 16 2007 22:01 | Last updated: December 16 2007 22:01
Lehman Brothers faces the threat of legal action by municipal councils in Australia over the sale of high-risk collateralised debt obligations by the Wall Street bank’s local subsidiary, Grange Securities.
At least two councils in New South Wales and a third in Western Australia are considering litigation against Grange, which marketed Lehman-originated CDOs to dozens of Australian councils as well as to charities and a public hospital provider.
The losses suffered by the councils and charities are further evidence of the damaging impact of the recent global credit turmoil as it spreads from sophisticated large investors to small communities round the world – and is increasingly starting to hurt mainstream, risk-averse investors such as local governments and pension funds.
The news comes as central banks worldwide prepare to inject tens of billions of dollars into the financial system in an effort to unblock seized markets, starting with a $20bn liquidity auction in New York on Monday.
http://www.ft.com/cms/s/0/1464f522-ac08-11dc-82f0-0000779fd2ac.html
ASIA MARKETS
Tokyo, Sydney lower; banks, commodity shares fall
By Chris Oliver, MarketWatch
Last update: 11:20 p.m. EST Dec. 16, 2007
HONG KONG (MarketWatch) — Asian stocks hit a downbeat note Monday, with Japan’s Nikkei 225 losing ground as banking shares such as Mitsubishi UFJ Financial Group fell, while Australia’s leading share benchmark faced heavy selling pressure as commodity stocks such as BHP Billiton led declines.
Tokyo’s main benchmark ended the morning session 0.2% lower at 15,482.15, while the more-inclusive Topix index fell 0.2% to 1,496.45. Australia’s benchmark S&P/ASX fell 2.4% to 6,334.0.
Shares of Japan’s three megabanks were lower following weekend reports by the Nikkei business daily they view the requests for $5 billion each in support of a subprime support fund led by the U.S. Treasury as unreasonably high.
The banks are aware they have a self interest to help contain the crisis in the U.S. structured credit markets but are wary of a backlash from shareholders if they contribute funds with assessing risks, the Nikkei reported without saying where it got the information.
http://www.marketwatch.com/news/story/tokyo-sydney-lower-banks-commodity/story.aspx?guid=%7BD0767EFA%2D5DA4%2D4355%2D89FB%2D3F0D82BCA609%7D
CRAIG STEPHEN’S THIS WEEK IN CHINA
Subprime dampens festive holiday spirit
Commentary: Hong Kong, China creating their own toxic property debt?
By Craig Stephen
Last update: 6:26 p.m. EST Dec. 16, 2007
HONG KONG (MarketWatch) — It may be the season of office holiday parties and long lunches, but investors in Hong Kong and China have been warned to be alert for a sobering subprime chill. And festive spirits in the mainland markets could be in short supply with renewed speculation Beijing might be about to unveil another rate hike, never mind most people must work through the holidays.
So far, Hong Kong and most of Asia have largely skirted the growing subprime crises. Not only is the property misery in the U.S. not our problem; it has even prompted some global funds to retarget funds to safer havens in Asia.
But last week Joseph Yam, the Hong Kong Monetary Authority chief known for his distinctive silver mop of hair as well as being the world’s highest paid central banker, raised a red flag that local banks will not escape unscathed.
http://www.marketwatch.com/news/story/subprime-chill-dampens-festive-spirit/story.aspx?guid=%7B253AC265%2D2C36%2D4880%2DBD8A%2D69A605FA4649%7D