Bits Bucket And Craigslist Finds For January 1, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Happy New Year to all frequenters of this blog.
What about us infrequenters?
http://tinyurl.com/2o8dfv
Japan style decline in real estate values.
The economics profession seems divided (much like posters on this blog) between true believers in the prospect of using monetary dentistry to fix the solvency crisis versus doubters.
Do the doubters believe that whatever measures are deemed necessary will not be attempted, or merely that they will not work? In the latter case, what could go wrong with the best laid plans of mice and men?
Three cures for three crises
By J. Bradford Delong
Tuesday, Jan 01, 2008, Page 9
http://www.taipeitimes.com/News/editorials/archives/2008/01/01/2003395186
Question for the knowledgable posters here. Is the condition described in this passage what is metaphorically described as “pushing on a string?”
“The third mode is like the second: A bursting bubble or bad news about future productivity or interest rates drives the fall in asset prices. But the fall is larger. Easing monetary policy won’t solve this kind of crisis, because even moderately lower interest rates cannot boost asset prices enough to restore the financial system to solvency.”
Well, if Hoz was on today I think he would say that the Fed only has 40B to work with and that can’t inflate bupkiss asset-wise in the face of insolvency across the board.
Additionally, it would seem to me that the fed can only lower the interest rate to 0%. If the banks don’t believe assets to be worth what they are asked to lend on them then they won’t borrow to do a deal. Aversion to risk in coming back into vogue, thus the fed is, “pushing on a string”.
–
Fed is pushing on a string when adding liquidity to the banks does not result in more lending to households and businesses that make investments (not the speculators). It did happen in early 1990s, according to Greenspan, but Wall Street came to the rescue by creating CDO products and talking loans off banks’ balance sheets.
Jas
I’m sure they will do everything they can to keep the deflationary depression from happening. The only question is whether they will succeed: if they do, it will be by substituting a hyperinflationary depression.
Substituting hyperinflation to prevent deflation is like applying several 44 magnum bullets to one’s head to avoid a headache. That doesn’t mean the fools in charge won’t take that path, of course, but then we’ll all get the financial version of a bullet to the head.
Prediction for 2008: collect all those soon to be rare currency notes and coins under $10 since once a loaf of bread is $50, they won’t be needed. Note that when this happens, inflation will still be tame since it will only measure the price of plasma TV’s, or something.
Krugman makes a compelling case for why monetary dentistry is not up to the task of providing a quick fix to the collapsing housing bubble:
“It’s easy to get lost in the details of subprime mortgages, resets, collateralized debt obligations, and so on. But there are two important facts that may give you a sense of just how big the problem is.
First, we had an enormous housing bubble in the middle of this decade. To restore a historically normal ratio of housing prices to rents or incomes, average home prices would have to fall about 30 percent from their current levels.
Second, there was a tremendous amount of borrowing into the bubble, as new home buyers purchased houses with little or no money down, and as people who already owned houses refinanced their mortgages as a way of converting rising home prices into cash.
As home prices come back down to earth, many of these borrowers will find themselves with negative equity — owing more than their houses are worth. Negative equity, in turn, often leads to foreclosures and big losses for lenders.
And the numbers are huge. The financial blog Calculated Risk, using data from First American CoreLogic, estimates that if home prices fall 20 percent there will be 13.7 million homeowners with negative equity. If prices fall 30 percent, that number would rise to more than 20 million.
That translates into a lot of losses, and explains why liquidity has dried up. What’s going on in the markets isn’t an irrational panic. It’s a wholly rational panic, because there’s a lot of bad debt out there, and you don’t know how much of that bad debt is held by the guy who wants to borrow your money.
How will it all end? Markets won’t start functioning normally until investors are reasonably sure that they know where the bodies — I mean, the bad debts — are buried. And that probably won’t happen until house prices have finished falling and financial institutions have come clean about all their losses. All of this will probably take years.
Meanwhile, anyone who expects the Fed or anyone else to come up with a plan that makes this financial crisis just go away will be sorely disappointed.”
Op-Ed Columnist
After the Money’s Gone
By PAUL KRUGMAN
Published: December 14, 2007
On Wednesday, the Federal Reserve announced plans to lend $40 billion to banks. By my count, it’s the fourth high-profile attempt to rescue the financial system since things started falling apart about five months ago. Maybe this one will do the trick, but I wouldn’t count on it.
http://www.nytimes.com/2007/12/14/opinion/14krugman.html?_r=1&hp&oref=slogin
fran chise, great article. However, don’t read the comments, you’ll end up muttering obscenities (or laughing, depending on your disposition). Here’s my favorite:
“The subprime loans were made at a time when interest rates were low and had stayed low. There was no reason to believe the incompetent Fed would start raising rates with no sound reason for raising them so high. That led to excessive rates once the ARMs expired.
The mortgage lenders took out mortgage insurance at closing to cover these loans so the lender would be protected. All the lender had to do when the ARM expired was renegotiate a fixed rate loan at a reasonable rate, and everyone would come out a winner. But, as one lender told me, they make more money by foreclosing and getting the mortgage insurance. The vast majority of those being foreclosed on now could afford to pay slightly higher mortages and keep the loans from defaulting. The Fed and the mortgage lenders just couldn’t settle for a half a loaf. Now we all will pay.”
It’s why I like to stay on Ben’s blog and Calculated Risk. People elsewhere just scare me.
Happy New Year to Ben Jones, too! Thanks!!
Here’s to having a good year in 2008 !!
I remember in 2005 thinking, “What will it be like in 2008, once all those loans reset?” At the time we were saying $600B in 2006, $1T in 2007, and $1T in 2008. 2006 was a bust year where I was still considered fringe. 2007 people took me seriously. Now I’m going to see if, in 2008, our predictions of serious recession / depression level spending come true.
Kitchens,baths,decks & loans…
http://features.us.reuters.com/entrepreneur/news/72224E48-B7B7-11DC-9C17-D28E5B19.html
Unsecured loans in the teens, secured at 10%…
Yeh, just gotta have that new kitchen now. And I’m just SURE this will work out well for GE finance.
I did my final P&L for the year. It was a darn good year, up over 50% after expenses and that was trading mostly on the short side and pretty much sitting out four months of the year. I just wish for a down year in the market this year - it’s time.
I did purdy good myself. All of mine was with boring buy and hold for almost forever stocks. Most of this year’s gains came from a 19 bagger, purchased in the fall of 2000.
Warren Buffet and Peter Lynch have both said the same thing: all you need in one lifetime are several good stocks.
Good luck and good investing to everybody this new year
Glad somebody made some money.I kept my head above water at least.
So Txchick when are you going to put on a weekend seminar to teach some of us rookies some good tradeing techniques?I am interested in your experience and expertise and would fly yo anywhere in the country to learn as I’m sure others here would too.
Happy new year to all.
Second that. TxChick, you need to atleast give us rookies a nice write-up on how to learn the ropes. I could send a nice bottle of wine your way, to go along with a trout.
Me? I’ve been looking for something better than the usual “put your money in this mutual fund” or “buy that hot stock” advice.
And, TxChick, if you don’t feel like teaching us in person, well, hey, how about if we get together on a bridge line and have a teleseminar?
Warren Buffet, this morning on FNC endorses stock index funds for those of us who work tons of hours in a field that is different from investing. Too many people are too impatient to dollar cost average or buy and hold. They want to time the market. Can’t be done in stocks.
“want to time the market. Can’t be done in stocks”
Hard to do in Real Estate also….
TD Ameritrade sponsors seminars for beginners for free. I do not know if it is only available for their Apex customers (over $100k in equity), or all customers. Also, I do not know how good their presenters are.
They are now accepting reservations online for nationwide seminars that are scheduled for early this year. Maybe I will bump into some HBBers in the Louisville seminars at the end of this month?
Try to dodge the sales pitches.
Sure, you guys. Come up with a nice meeting place in Tucson or Santa Fe or somewhere like that and we can have a nice weekend at it. Skiing would be good too.
Chick, I know of all sorts of places where we could meet in Tucson. The resorts on the outskirts of town are a bit busy and pricey at this time of the year, and there’s the matter of the Gem and Mineral Show next month. That pretty books up the town.
But after the Gem and Mineral crowd clears out, the snowbirds start leaving. And, lookie-lookie, the hotels start to have vacancies, the restaurants will be happy to rent meeting rooms to us, and here’s another bit of good news:
The spring ‘08 wildflower season is predicted to be fabulous. So, if you’re photographically inclined, here’s your opportunity.
I haven’t paid attention, but I’m guessing SF is doing OK. Appears to be good snow this year in Taos, SF, … after several dry winters (I don’t ski). SF is mostly tourist and service driven and not cheap. My pals in Los Alamos are having their own issues.
Try to dodge the sales pitches.
I figure there will be. It is going to be very interesting to see what they will be pitching.
More on the forthcoming AZ wildflower display:
http://www.azstarnet.com/altds/pastframe/metro/216513
Should be the best we had since 1998, and that year’s display caused traffic jams on I-10.
Exactly what dates A. Slim ??
How about Palm Springs for a locale?
Sign me up!
tcm_guy, do you live around Louisville? I visited about a year ago and enjoyed it.
I am in South Central Kentucky, midway between Nashville and Louisville.
Louisville is a town that for the most part is drivable during the rush hour. (I know somebody from Louisville will post otherwise.) But it is not anything like the traffic in Nashville. Heck, even Bowling Green is all messed up. I know people who work at the Target in BG on Campbell Lane and it takes them about 45 minutes just to get on I-65. (About 5 minutes on a Sunday.) Partly the reason why I moved out of BG.
Louisville’s Baxter Avenue theater (on Bardstown Rd., go figure) is kindas eclectic, they show purdy good foreign films from time to time. Have not been there recently, though.
(Last time I was there they had their screen over the box office showing Led Zeppelin concert footage from the 70’s. It made waiting in line fun
We made a little progress this past year and plan to make much more in 2008.
Trading is expensive; commissions, expenses, short-term capital gains plus your time and attention; you would have made almost 60% just by buying and holding oil for the last year and paid no tax. I did. Make a few smart long-term bets and ride the wave. I usually hold a position more than 5 years. Bought oil and energy in 2001 and gold in 2003, been adding ever since on dips.
I have to eat unfortunately.
“I just wish for a down year in the market this year - it’s time.” You may well get your wish. China had pegged its currency to the dollar. They are now giving up on keeping us afloat that way. I am thinking that a lot of foreign governments and investors are doing plunge protection on our stock market to try and keep us from going into a depression so we can keep buying foreign stuff. When foreign investors realize that does not work, and it seems we are already in a down cycle, they will dump our stocks.
If we get a down year now, and I expect it, I’m in a really good position.
I’m currently long puts for spy, bby, mer, and len. I’ll continue to hold physical PMs. My gold is averaged in at $400/oz.
A down year will hurt my pension fund at work but I don’t have any control over allocation, and it’s not enough money to quit over, yet.
I had a HORRIBLE year, but I cut my losses some with a quick in-n-out during the Centro bungee-jump here in Oz.
58.5% in my spec trading account. I also calculated last night my return across all liquid accounts, including low and non-interest bearing accounts. It was 21.2%.
I’ll be sitting down for analysis today, I like to see where I made money this year versus other years, and what my return was per dollar traded. I also made most of my money short, though the miners monthly cycle did well both ways.
I agree with other posters Tx. I’ve learned quite a bit from you over the last couple years, along with some others here. It will be a sad day for this happy renter when due to irrelevance the “Wall Street and Washington” and bits threads fail to garner commentary from the highly knowledgeable among us here at HBB.
Happy new year and thanks a million Ben.
“I just wish for a down year in the market this year - it’s time.”
Good luck on that with a liquidity tsunami rolling in towards the shore.
I love this debate, and it apparently won’t be settled until either the plebes are selling apples on street corners or buying bread with wheel barrel loads of cash.
I’m still looking for deflation, but I’m inflation hedged with PMs and raw land.
You are smart. We have to get our inflation hedges in place soon before the liquidity tsunami hits the shores. We are already well-positioned for deflation, as we own no overvalued big-ticket assets and hold no debt. I am thinking there are probably about five to fourteen months to act (adding nine to eighteen months to last August), because monetary policy’s effect kicks in after a long and variable lag. Meanwhile, look for fire sales on expensive toys, thanks to inventory gluts created by those who can no longer obtain home equity loans to fund a life style beyond their financial means.
Case in point: Recreational boating industry
Brunswick Corp. makes such well-known powerboat lines as SeaRay and Boston Whaler, as well as Mercury outboards. Brunswick CEO Dustan McCoy said his company’s segment of the market is experiencing its worst slump in decades.
He said recreational boating, which led the economy down in the recessions of the 1980s, is “one of the first industries to begin to go down as the economy begins to stiffen.”
McCoy points out that three-quarters of the nation’s 13 million boat owners have annual incomes of less than $100,000. Those middle-class boaters are feeling the brunt of the home mortgage crisis, especially in key coastal states such as Maryland, Florida and California.
Thom Dammrich, president of the National Marine Manufacturers Association, said people often take out home-equity loans to finance their dream boat, but many of them started backing away from the market two years ago. That sent sales down 6 percent in 2006; the industry is forecasting as much as a 15 percent drop in 2007.
The mortgage crisis isn’t the industry’s only concern. It is also exposed to the high cost of oil and raw materials. Dammrich said the current downturn threatens American jobs as well. Although cheap labor has meant more boats made in places like Asia, boat building is one of the few industries that has weathered the outsourcing storm.
“Boats are manufactured in the United States, the components that go into boats are manufactured in the United States and the boating industry employs a lot of Americans,” Dammrich said.
http://www.npr.org/templates/story/story.php?storyId=17620887
Of course, boating is a luxury item. The next shoe to hit the floor will be air travel. Any hobby that requires large amounts of fuel will feel a pinch.
I talked myself out of shorting bc three months ago. They didn’t have enough debt. No use crying over lost gains though.
Speaking of air travel… apologies for this repost..
How does the recent fact that US airlines have been given more slots to fly into China starting this past two yrs and more in the next 2 yrs , the WHY and HOW it is affected by and to the mkt. is what I want to know.
It seems to me that carriers are not at peak capacity, yet they are expanding to China,Moscow etc and retracting locally/nationally as US travel is not as lucrative according to the BOD.
Is the BOD of airlines not aware that the future economies are possibly doing a “retraction” -is it just blind business planning? Not aware of the possible effects of this econ.?
Well you get my drift, I hope.
“Case in point: Recreational boating industry”
Agreed, I’ve repo’d lots of boats from storage yards, front lawns, and several larger ones that were buoyed in a harbor or marina slip.
strategic vessel capsizing
RE: “look for fire sales on expensive toys”
Advice from the trenches…
Used Harley-Davidson’s…stay away from ’02’s 88TC’s
(cam bearing failures) and ‘06/’07’s 96ci’s (overheating)
Good years-’03, ‘04, ‘05 for TC88’s.
If you buy a Sportster you will own it for life. Virtually no re-sale value.
Go short HDI
*(TC- 88 cubic in. twin cam motors)
It seems to me that carriers are not at peak capacity, yet they are expanding to China,Moscow etc and retracting locally/nationally as US travel is not as lucrative according to the BOD.
Airlines are expanding into international flights in an effort to stave off competition from the likes of lower cost carriers eg Southwest/jetBlue/ATA/etc. Delta is banking heavily on this philosophy as their goal is a mix of 40% international/60% domestic.
China has over 1 billion people and there are only about 12 direct flights a day from the mainland to the US. That market has a long way to grow.
“How does the recent fact that US airlines have been given more slots to fly into China starting this past two yrs and more in the next 2 yrs , the WHY and HOW it is affected by and to the mkt. is what I want to know.”
Here in CA lots of Chambers-of-Commerce are booking China flights. I’m going in March. Great deals that include all transportation here and there, flight, hotel and all food. These are mostly people going to look over investment opportunities (i.e. American Co’s, Chinese Co.), etc.
I agree with P. Bear….I think they inflate their way out…At least to the point where they won’t loose some major financial institutions…
To me it is not a question of whether they will try (a foregone conclusion), but rather of whether the reality of macroeconomic budget constraints will stand in their way. Money can only grow on trees for so long before the tree dies.
Congrats, and good luck in 2008.
Txchick, It appears one should read or brush up on “Riding the Bear” I think we are ready for the next leg down.
Leg 1 subprime is contained.
Leg 2 subprime IS NOT contained but the economy is good.
Leg 3 and final leg, either inflation is BAD or the economy is not good. I think it will be either one that sets the market down for the count. I am guessing by the end of the first quarter we will have this answer.
What are your thoughts?
I was only up 25% on the year. Of course, I spent a total of about 20 hours working on my portfolio.
Good point. I spent 3 hrs./day on mine, including research. With 260 business days that’s 780 hrs.
My hourly rate then, $75/hr. That’s about twice hourly what I make at work. I’ll take it.
Well, my portfolio gain was about $150K, which comes out to about $7500/hr. If I thought I could improve my results at that rate per hour, I would keep it up! Unfortunately, my approach is much too simple to take any significant effort, so more time wouldn’t help.
You did better than me. I’m up less than 10% but expect that as I’m half in cash. I think 2008 will be a tough year to be long stocks.
A billboard on the road from the airport in Nairobi Kenya announces that “Up to 100%” home loans are available “fast” — plus ca change plus c’est la meme chose, n’est-ce pas?
Glad to hear you had a nice trip, az!
Happy New Year to all HBBers!
You did not go to John’s wedding, did you? That would be funny.
Nope, John who?
Not sure if it’s been posted elsewhere already, but this is something I’m concerned about here.
CARACAS, Venezuela (AP) — Venezuela launched a new currency with the new year, lopping off three zeros from denominations in a bid to simplify finances and boost confidence in a money that has been losing value due to high inflation.
http://money.cnn.com/2008/01/01/news/international/bc.apfn.venezuela.newcur2.ap/index.htm
when are we launching ours?
at least we’re beating vzla the BOB
So all my bolivars are null in void….
What’s that expression about putting lipstick on a pig….seems to fit here.
Venezuelan inflation is due to feeding foreign funds (read petro dollars) into a highly protectionist economy. It’s the textbook case of too much money chasing too few good.
Explain to me how that applies here in the US.
Sorry so late to respond.
I believe there’s been a strong deflationary undercurrent in the U.S. for many years (decades?), and we’ve used credit to mask the deflationary effects.
IMO, there is certainly the possibility that the U.S. will attempt to “inflate its way out of debt” — perhaps we’ve seen some of that already.
Somewhere down the line, the U.S. dollar will be worthless. We’ve been working on that for the past few years. Then…currency conversion????
Just a concern…
It’s a brand new year! Happy new year everybody!
So what can we expect this new year? A year of transition. All of these RE schemers and scamsters who have sold their fellow American up the river without a paddle are now looking for the next new scam-thing.
But first, how did we get here?
I think it all started with the railroad cartels of the mid 19th Century. Lies, deceptions, stock manipulations, all in the name of the dollar. Later in that century, the Robber Barons adopted these techniques. And then in the 20th Century “outsiders” of this inner circle of the Robber Barons where able to use the same MO to make their huge fortunes.
And now we are witnessing what the Robber Barons of the 21st Century are capable of. They have dismantled and shipped elsewhere first our manufacturing capacity, and now our engineering and white color professions, and in this process they have destroyed the wage earning ability of the masses while enriching themselves and corrupting our body politics.
So what will be the next big scam-thing?
Three letters, MLM.
http://tinyurl.com/2y6rcd
http://www.mlmwatch.org/
MLM has been around since the 1940’s, but now that these IB types will be out of work with no hope or desire to ever work for their new Chinese or Arabic masters, they will gravitate towards the MLM, and it will get to be many times bigger than what it is now.
Most of their groundwork has already been done. For many years these MLM organizations have been operating with scandalous product claims, but our gobmint does nothing. Like the mortgage/credit fiasco it too will be debated in the Senate, but nothing will be done.
I predict they will all perpetuate the myth of a “Christian organization”, complete with opening and closing prayers at every meeting. It would be better if they could get Dave Ramsey to give it his “Christian organization” seal of approval on the air, and even better if they could pay some former Republican American President to speak at an annual meeting about how many well paying jobs this great “Christian organization” has created, and how many lives this “Christian organization” has touched and changed for the better.
But eventually the market for MLM products will lock up; too many sellers and not enough buyers. Maybe in 2015?
And then on to the next big scam-thing.
Having had a brush with MLM in my twenties, I’m more than a little leery of these outfits.
During this brush-with, I saw a dear friend sign up for this, that and the other MLM, always hoping that the latest would be The One that would rocket her out of poverty. None of them did.
I’ll admit to losing patience with her after she got involved with a Pittsburgh area Science of Mind church that seemed to be little more than an MLM front. Something didn’t seem right about the whole thing — that story of Jesus kicking the money changers out of the temple kept flashing through my mind.
Anyway, enough said about that. If you’re at all concerned about the pitfalls of MLM, here’s some tasty food for thought…
http://www.vandruff.com/mlm.html
MLMs - bhalurrrrrr - whole body shiver!
Happy New Year!
Leigh
Slim: That’s really interesting. I know some folks that go to Church of Religious Science here in the desert and I’ve gone with them a few times. There’s no MLM or any business stuff that goes on here. Guess it depends on the participants. What seems surprising to me is most of the flock are old folks. It’s pretty amazing to seem them embrace what seems very non-traditional.
“for the next new scam-thing”
Not new but, I have seen a significant up-tick in ad’s for reverse mortgages….
The Biggest Problem with MLM is nobody can make any serious money just selling the products. You have to recruit new “members” and get them to sell and get new “members”
Plus a little known fact most MLM’s will not let you have a dedicated storefront. Ever seen an Amway Quixtar herablife store? I just started to see an Avon store. You can have a sort of storefront location for MLM, but it cant be obvious, There was a motorcycle repair shop in CT, and the owners wife had her Herbalife Mary Kay stuff in a separate back room….
I have a difficult time visualizing that. I just cain’t see a big burly haired biker (with the wings tattoo) buying his cosmetics at a bike repair shop.
I once saw Avon products for sale at a flea market in BG. The products where clearly stickered “sample only, not for sale.”
I suppose tons of MLM product has been sold in Flea Markets for many years by people leaving these organizations. Or trashed. Or sold with the house, up in the attic.
If I want fruit juice or nail paint then I’ll just get it at the groceries or Macy’s for like 1/10 the cost. And I can spend the rest of my life doing what I do best, long term ‘nvest’n.
I disagree.
MLM already had its turn. It was in the early-to-mid 90’s. It actually preceded the first Technology bubble (late 90’s).
There hasn’t been enough time for all of the people who got burned on MLM in the mid-90’s to have forgotten about it, and try it again. Yes, there is a whole new crop of 20-somethings who will have their pockets picked by these guys. But most of the boomers and Gen-X, Gen-Yers have already been exposed to this.
Just my opinion…
Amusing snark at the NAR
http://bigpicture.typepad.com/comments/2007/12/existing-home-s.html
From the comments…
“Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market”
-Lawrence Yun, NAR chief economist.
___________
“Some areas,” like the US, Great Britian, Spain…
Everything is hunky-dory.
Happy New Year, y’all.
Here is the Shiller article linked on Drudge.
http://business.timesonline.co.uk/tol/business/economics/article3111659.ece
Some good comments after the article (we need to get some of these guys over here!):
A bigger train wreck is coming in about 10 years due to lenders who are making large loan to value 25 and 30 year mortgages to individuals age 50 and higher. Do these mortgage borrowers plan to work until they are age 75 or 80? As the article points out, you can’t count on real estate inflation to bail you out like it did in the past.
I think that working into the 70s and 80s will become commonplace within a generation. Or less.
Reason: People are living longer, and the cost of extended leisure (aka “retirement”) keeps going up. So, like it or not, we’ll see more gray hair in the workforce.
And that will be so interesting to watch unfold as these folks will need to work longer at precisely the same time technology and globalization will be putting pressure on wages and domestic job growth like never before.
Talk about a case of bad timing. When workers had the chance to stick around many opted not to - now that many will need to stick around they might not have the chance.
While discussions on this subject usually devolve into inter-generational sniping it is nonetheless a hugely serious issue…and it points out why older generations thought it wise to have the mortgage over and done with BEFORE retiring. It is only my opinion but if you’re carrying mortgage or other major debt into retirement with you - you’re boned.
The intergenerational war is really counterproductive IMHO. It’s not like the oldsters are a separate species. They are parents and grandparents and if they can’t take care of themselves, some of the youngers will have to help them out. Pitting one group against the other be it racial, religious, or age is all part of the divide and conquer strategy. Get the hoards to fight amongst themselves and blame each other while he fatcats at the top game the system, run the system and make out like bandits.
Absolutely agree, ATC!!!!!
All of the stupid “civil wars” between:
-generations
-union vs. non-union workers
-public vs. private employees
-dark-skinned vs. light-skinned
-Muslim vs. Christian vs. Jew
-tall/thin, short/fat, pretty/ugly, smoker/non-smoker…
All of this serves to distract us just as much as “Dancing with the Stars” and Britney Spears.
Time for people to open their eyes and really understand what’s going on. Who’s benefitting at whose expense (look beyond the small differences)?
Agree, especially if the work is easy.
My father still works as a research engineer at age 82. He’ll turn 83 later this month.
BTW, he kicked my butt in racquetball last week.
For a lot of people their sense of identity, the “who they are”, is tied up in what they do. What they do is who they are.
Take away their work and they lose their identity, their sense of purpose, their sense of worth, which often results in depression and early death.
For some people becoming retired can become a dangerous occupation.
My exposure to those like that tend to be technical types.
“For some people becoming retired can become a dangerous occupation.” I cannot wait to face that risk.
I have a hunch (not really a testable theory) that life expectancies are peaking in the U.S, due to increases in obesity, diabetes, lack of exercise, lack of mental and physical stamina, etc., not to mention the possibility of large-scale wars. Happy New Year!
When you turn 60, the management will find some way to get rid of you.
Absolutely. Those people will end up doing menial jobs, regardless of their education, background or experience.
Here in the desert, aretheycrazy and I see lots of retirees working at least part time, if not more hrs. Everywhere you go it is senior citizens, over 65 if they weren’t wealthy when they first retired or were forced to retire from corps downsizing or health issues. I think this generation is going to work till they drop.
Working into the 70s/80s was common up until the past 50 years or so.
Otto von Bismarck came up with the idea of 65 being the retirement age.
–
And what % lived up to be in their 70s and 80s when “Bismarck came up with the idea” and 50 years ago?
Remember that when FDR proposed the SS there were only a small % of population who had to be paid.
Jas
A lot of the boomers miscaluclated the housing boom. MY mom is one of them, currently being majorly upside-down in a condo she bought in 2005 against my advice.
A large house seems great until one is 65 and instead of going to the golf course with your buddies, you’re 12 years into a 30 year mortgage.
If you’re in year 12 chances are you bought at a reasonable price. Hopefully though you’ve done a refi (w/o taking out cash) to get the cheaper rates.
I was forceable retired (certainly not voluntary) a few years ago, still owe on my mortgage got a 5% rate a few years ago (w/o taking cash). The mortgage is not the problem (or mine anyway), its the ever increasing insurance and property taxes. Even if your house is paid for, these things are becoming the killers for some.
Getting another job over the age of 60? Forget it, they don’t exist in many places. Even a new WalMart opening with couple of hundred crap jobs results in thousands applying for them.
I was lucky in having a pension (reduced), max social security, some savings, retiree medical (a great deal) but many, many don’t have these and for them I really wonder how they’re going to make it.
I wonder too….i know so many people over 40 and 50 who are NOT OLD FOGEYS, very smart, know more about computers and cars then i do…..but are scared they wont be able to find another job, because employers just want the dumb and the stupid.
This is what i fear more then a depression or bad recession. Is the Clueless Morons are totally useless,in a crisis, and will make this mess even worse and will last a lot longer.
Employers should be bending over backwards and hiring US older farts who are smart, then maybe we will have a quick recovery.
A good New Year to one and all! Mine will be another sans alcohol with lots of bicycle riding. My only resolutions are to eat more chocolate, and try to be less of an opinionated fool.
There seem to be a few hangovers among the HBB crowd this morning. Usually, there are 100 entries by 10 AM eastern time!
I had one glass of champagne at midnight. Then I hit the sack.
“had one glass of champagne at midnight. Then I hit the sack ”
I had two 4 oz shots of E & J Brandy toward midnite 31st, did a bit of internet browsing and posting, and hit the sack as well.
No booze, but my sack did take a hit bigtime.
I had a glass of wine @ 8:30 and was asleep by 9:00…Happy New Year everyone….
I slept through the festivities. Woke up at 2 am and realized I slept 5 hours. I avoid drinking and driving. The DUI penalties for average folks are tough, but in my own field it’s the end of my niche career and then I have to compete against Indians and Chinese.
Requiring US citizenship to obtain a clearance is one of the few advantages US citizens temporarily have in technical fields. I speculate that advantage will erode over time as more H1Bs are allowed and eventually increase the US citizen pool.
I agree that they won’t be niche jobs much longer. I give it 5 years. But I think the reason will be major defense cuts, and not because we will allow H1Bs to get access. No way! Regardless, I will be ready to say adios to this job in five years. No matter if the stocks crash severely before then.
That requirement was diluted quite a while ago do to the number of lazy americans who prefer to sit home and play nintendo rather than work for our government for high pay.
Actually, it looks like you just need a [good] reason on the CD-79:
http://www.nist.gov/admin/mo/adman/1020.htm
No access while an H1B or with a green card; eventual US citizenship will do it though. Five years with defense cuts seems plausible. Ongoing reductions already beginning in DOE Complex.
http://www.nnsa.doe.gov/complextransformation.htm
DUI ramifications are extremely punitive now……Have several friends that have owned small pubs their entire lives and said if it weren’t for the fact that they own them free and clear it would make no sense to stay open….They point to the major enforcement and penalties associated with DUI as the cause….Does not take much to get to .08
Not really a hangover, but I’ve been touring South America this week and suffering from altitude sickness and lack of sleep.
Happy new year
Had a great time last night, but I’m paying for it this morning. My lovely wife was DD, of course.
It’s a sad fact that very few really good stories start off with, “After a night of moderate drinking….”
Took me a minute. At first I thought DD was dead drunk.;)
“It’s a sad fact that very few really good stories start off with, “After a night of moderate drinking….” ”
But, on the bright side of moderation, I’ve never ever gotten up in the morning and said, “Gee, I wish I’d had a little more to drink last night.”
Sammy and Paul, you both are too funny.
My excuse is the Kenya jet lag. Awoke at 3 a.m. Eastern (11 a.m. in Kenya) but that was TOO early for HBB. Had to nap for several hrs mid-morning to try to get in synch. New Year’s Day brings up the sad thought that my investment guru Jim Lowell was overly optimistic when he told me in 2005 not to buy anything in Calif until “at least 2008.” I think we all know now that 2008 is not the year in which to buy.
happy new year to all
a mortgage and a prayer
http://www.nydailynews.com/money/2007/12/17/2007-12-17_new_home_worries_over_adjustable_rate.html
So basically she got out of debt to raise her credit score, then got into debt on a stupid loan with a teaser rate. I guess she didn’t learn much from her previous experience.
NYC Boy needs to see this babe. How did you let this one get away
She seems to have gotten all kinds of help…a city grant, money from pops, pops owns a plumbing supply in a major metro - probably big bucks. How many owners here got a city grant? Must be nice.
Oh, and how wide is that room in the pic? 10 feet? Imagine that kid running amok in there.
Yeah, I saw that, since when do you call a studio apt. a “townhouse”?
What exactly is she moaning about? She makes 46k, one guy gives her 18k in child support another guy gives her 600 a month and doesn’t even live there yet, she received a large grant from the city. What more does she feel entitled to?
I guess she is upset she can’t go out and buy more ridiculous “Knick knacks”
Fecaltime!
Or unattactive furnishings to fit into a shoe sized room.
“she can’t go out and buy more ridiculous “Knick knacks”
$200 for a night of clubbing?
I’m way out of touch.
he was in times square with his fanny pack and may be hungover- just kidding nycboy
they showed some japanese tourists who wore diapers because if you went to the john you lost your spot in times square. i have lived in ny my entire life and never once been to times square on new years and for that matter i avoid that area like the plague
i miss the old times sqaure and the old nyc for that matter it is nothing but starbuck$,chase banks,and duane reades(drug store)
“tourists who wore diapers” ??
Thats just “SICK”….Pissing and craping all over yorself so you can say that you were there ?? Just think if you had to stand next to one of those idiots…
NYCBoy has a very lovely significant other.
But I’m sure she is already getting calls from guys here in NY who also haven’t figured out you can’t buy a house that is 8X your income.
“significant other” — she’s his WIFE !
I do hope we can all meet again this month in Manhattan…..i heard azlender was incredibly funny witty and …….we hope you can make it this time..
U.K.
http://www.guardian.co.uk/business/2007/dec/31/subprimecrisis.creditcrunch
Where does our Fed stand on the problem of moral hazard? And where does our Congress stand (compared to MPs) on their efforts to understand the roots of the subprime mess?
‘The inquest has so far given us the phrase “moral hazard” from the governor of the Bank of England, Mervyn King, who believed it was outside his remit to rescue a bank that had got into difficulties through risky borrowing on international money markets. It has also given us the sight of MPs from the Treasury select committee grappling to discover who from the much lauded tripartite structure of regulation for the UK financial system - the Bank of England, the Treasury and the Financial Services Authority - was to blame for the fiasco.’
Yep $100B flew off to “Money Heaven”.
Happy New Year!
Roidy
Nice read Chick….
“there were long lines of people threading through high streets across Britain, hoping to retrieve their cash.”
This is Britain though, We are in America The lines will not at the bank since very few have any money. The lines will be at the ATM with people taking out Cash Advances as their American right to credit freezes up. Cash? Who has cash anymore?
For the last quarter of 2007, Ron Paul raised more money than all of his bankster-funded Republicrat rivals for the 2008 GOP nomination. Let’s see how the Establishment and their MSM truth-makers spin that.
January 1, 2008 9:55 am EST
Message of freedom, peace and prosperity rallies record support
ARLINGTON, VIRGINIA –Texas Congressman Ron Paul’s presidential campaign had a record fundraising quarter, exceeding its original goal of $12 million by over 50 percent when it raised nearly $20 million during the months of October, November and December.
“Only Dr. Paul has the ability to inspire Americans to contribute and take action that is necessary if Republicans want to defeat the Democrats in November,” said campaign chairman Kent Snyder.
In two 24-hour periods on November 5 and December 16, the campaign raised over $10 million dollars. The total of over $19.5 million represents an increase of nearly 300 percent from its third quarter total of $5.28 million.
For the quarter, the campaign had over 130,000 donors, including over 107,000 new donors. The total was reached with an average donation size that was just under $90.
Of the other Republican candidates, only Mike Huckabee – who reported $5.04 million this quarter – discloses his fundraising total online. However, Dr. Paul’s total is over $9 million more than any Republican candidate raised in the third quarter.
It is too early for me to say whether I would vote for Dr. Paul, but I am glad that he is doing well in his fundraising efforts, as he is one of the few (two?) candidates who seems willing and able to challenge the status quo.
I was also impressed by Huckabee’s recent firm stand against mortgage bailouts. Contrast that to D-ratic candidates falling all over themselves with “Save our Homes” proposals designed to cast sole blame on the POTUS for the mortgage mess (never mind the bubble started with BC in the WH and FR at FNM), and you see the beginnings of a clear choice.
http://www.betterimmigration.com/candidates/2006/HuckabeePres08.html
Don’t be conned by Huckabee. Especially on immigration (legal AND illegal) he talks the talk, but his record speaks for itself.
Again, I did not mean to endorse Huckabee, but rather to note his position on bailouts. We need more clear positioning and fewer sound bites from the candidates, IMO.
Ross Perot , where are you?
Wasn’t he the one to told of this coming debacle, years ago? Yep.
“Ross Perot, where are you?”
Probably listening to the giant sucking sound of home equity wealth pixie money going down the drain.
There ares only two guys in the whole Presidential shebang that I think would be disastrous (and would consider leaving the country over): Edwards and Huckabee.
gotta throw Hillary in there too. I’ll be digging up the Canadian passport if that happens.
http://www.youtube.com/watch?v=zh72NdsbiWA
Ron Paul Girl has given us the most succinct yet authoritative (not to mention, funny as hell) take on Hillary.
Maybe I’m missing some important gene, but for some reason Hillary doesn’t bother me.
Hillary is just annoying, but what worries me is the retinue of nincompoops she would bring in to the government. Same old Wall Street and Beltway wankers plus the political hacks and pseudo-populists that we all know and hate. More of the same stuff, just with a different label. All thoroughly bought off and bought in.
I’m voting for Ron Paul, warts and all.
Her pandering bothers me the most…..Condescending…
How about Ron Paul & Bloomberg ??? At least we would get some fisical responsibility….
scdave says it all. paternalistic? …ok, maternalistic….then there’s plain old wrong
Samy,
i’m convinced the economic maelstrom will change everything. With foreclosures climbing exponentially, and the layoffs and further credit tightening to come, and. I expect, a complete failure of the spring selling season, the economy will be what matters in voters’ eyes.
Ron Paul remains the only one who has a clear view on the economy, all the major players are just that…replaying strategies from old elections. Now Bloomberg, who has a shrewd grasp of finance, announced he is waiting for April for a decision to run. Expect he’s anticipating the economic damage will be very clear by then and voters will be scambling for a candidate who can ‘fix” things.
Reality is going to force it’s way into this election.
By Mid February it will all be over. Once the CA primary happens all but the top two will be done. The parties and the money follow proven winners. No one seems to care about who is a good candidate - just who can win. I’m not saying it’s right, but it seems to be the way the game is played.
Amen, Brother Spike. Personally, I think Bloomberg is using Gulliani as a stalking horse. Once Rudy goes down (as he will, even though the MSM refuses to give him any serious scrutiny), then Bloomberg will step in to “save” the GOP. Look for it.
Bloomberg aims to be Hoover II.
Sweet.
He may run as an independent. If Huckabee and Edwards get picked the middle will be wide enough to drive a truck through and campaign contributions would dwarf dem or republican candidate. If Guiliani and Hillary are nominated then my guess is he won’t run. The middle is covered and the diehards religious right and extreme left won’t vote for him.
2008 seems to be the year many of us have felt or a long time will see the greatest real estate losses / foreclosure activity etc, so this indeed promises to be an interesting time to kick back and watch from the sidelines.
I have a thought however in regards to the ALT-A losses looming over the next 5 years…. here goes :
By far and away the biggest losses will be found here when OPTION loans to those with previously high credit scores begin to fail. In many cases the amounts involved are larger. Prices will have fallen by greater amounts by the time they foreclose as these typically do not reset as fast as subprime and these are likely to involve more HELOC activity, where the entire amount of the loan may have evaporated by the time the bank tries to collect, resulting in a 100% writeoff rather than say a 30% writeoff with a new home loan.
I am all for Santa Fe being the place for a Txchick seminar. Close enough for me to come. Beautiful territory also. I have some money that needs to grow.
Call me suspicious, but I just cannot get over the leveling off of used home sales at a permanently high plateau of 5 million homes sold at a seasonally adjusted annual rate for September, October and November 2007. It would appear the used home sales market has bottomed out, which is quite implausible in light of the ongoing credit crunch and reversion to traditional mortgage loan borrower qualification standards.
Existing home sales keep sluggish pace
Median price in county hits $339,000 in November
By Jeannine Aversal
ASSOCIATED PRESS
January 1, 2008
WASHINGTON – Sales of previously owned homes nudged up in November, but that didn’t improve the broader picture of a feeble housing market hit by record-high foreclosures and harder-to-get credit.
The National Association of Realtors reported yesterday that sales of existing single-family homes, condominiums and townhouses rose 0.4 percent in November from October, to a seasonally adjusted annual rate of 5 million units.
http://www.signonsandiego.com/uniontrib/20080101/news_1b1homes.html
I agree used home sales must fall further in 2008. Maybe to 4 million, just a wild guess.
I was actually questioning the plausibility of three months in a row of a 5 mn annualized rate of used homes sold against the backdrop of the credit crunch. I don’t know how the NAR cooks up its numbers, but on the face of things that plateau looks highly suspect.
I’m guessing foreclosures count in that number, PB?
Do trustee sales count as “sales”?
Waayyy of topic…
I was looking for flights to Europe for the spring yesterday. I noticed that a flight booked to Berlin on AA stops once in London, both ways, but is $120 cheaper than the direct flight to London on the same airline.
Neither London nor Berlin are my eventual destination (Spain), but it would be nice to spend a day in each on either end of my trip.
Is there anything (assuming no checked luggage) stopping me from simply not taking the connecting flight in London on my outbound, or joining the inbound in London on the way back?
I’ve asked a my LL who is an airline employee, but thought possibly some here might have perspective.
Thanks in advance.
“Is there anything (assuming no checked luggage) stopping me from simply not taking the connecting flight in London on my outbound, or joining the inbound in London on the way back?”
Unfortunately, yes. Coming back, if you miss the first leg of your flight you have missed your flight and most definitely will not be able to board. On the outbound there is probably nothing to stop you from getting off and there is a chance you could be OK because you would already have the boarding pass for the flight you would not be using, but even here the airline can make trouble for you if they choose to, since they will know you aborted the flight and could even void your return ticket.
AA will almost certainly cancel your reservation if you try that.
Have spent Christmas in Berlin, first visit in 15 years. Got the greatest deal for a brand new Marriott, steps from the Brandenburg gate, from priceline. It is possible my room was right above where the wall was previously.
Berlin has changed, the architecture in the government district looks a little bit like DC. Hence had not seen the Bundestag (former Reichstag with a new glass dome. The history still gives me the chills). Was amazed at the number of foreign visitors waiting in line: youngsters from Brazil, a large family of Indians from US with very historically knowledgeable kids, a Malaysian family behind me, and of course lots of Russians, Italians, etc.
It’s winter, and it was grey, so a visit in the spring/summer should be more pleasant. Indeed, many trees in Berlin. For me, the German history is kind of difficult, though. It still emanates from the buildings.
Try ‘airberlin.com’ for cheap flights to Spain, also ‘germanwings’ or easy jet. Look up ‘low cost airlines’ in google: many options for European travel.
There’s a really low cost European carrier called Ryan Air.
I’ve flown Ryanair. They are tough to beat. That’s why this would be so great if it works. I can fly from Stansted to Barcelona for $50/head and then fly on to Berlin for the same.
Ryanair does have weight limitations on baggage, I think it’s 15kg checked. When we went to Europe a couple summers ago we went straight carry-on. It worked well, but we had to ship out tourist crap back home.
When we went to Hawaii this summer we took one suitcase full of junk food and snacks to avoid high costs there. We filled it with the collection of junk from the swap meet at Aloha stadium (Wed. & Sat.) for the trip home.
AA won’t like that, but what I think you want to look at is the multi-city option. There’s a link on the booking page next to the selection between round trip and one-way.
Last year I went to Europe with only a very general itinerary and after playing around with the AA site I ended up with a ticket in to Frankfurt and out of Dublin. It was a couple hundred less than a round trip ticket to any specific city in Europe. The “open jaw” ticket is great for people wanting to travel around instead of sticking near a particular area.
Cool advice BrianinChicago
Other than TSA security type issues that might pop up now post 9/11, then who knows if they would notice. You would be a no-show,but you would have shown up on the original portion….
Your PNR will be canceled when you fail to board the 2nd leg of your trip. Attempting to resolve this on day of departure in London would be pointless.
Yesterday’s market action provided some rather interesting contrary motion in T-bond yields. What could this portend? I am guessing it means that stocks will rally over the next few weeks, but I am not sure…
BUSINESS BRIEFING
Three-month T-bill rate hits six-week high
January 1, 2008
http://www.signonsandiego.com/uniontrib/20080101/news_1b1bizbrfs.html
Treasurys End 2007 With Final Rally
By LESLIE WINES – 20 hours ago
NEW YORK (AP) — Treasury prices rallied in the final session of 2007 as investors who turned to the safety of government bonds throughout a turbulent year hedged once more against a variety of risks.
Treasurys staged an unusually impressive rally during the past year. Weakness in the housing sector and overall economy, as well as concerns that beleaguered banks could face a year-end liquidity squeeze, provided fuel for the government bond rally. There was steady demand throughout the year, but Treasury price gains were most vigorous in August, when investors grew nervous about the crisis in subprime mortgages and began shunning all forms of investment with exposure to these problems.
…
The benchmark 10-year Treasury note rose 11/32 to close at 101 25/32 with a yield of 4.02 percent, down from 4.12 percent late Friday. Prices and yields move in opposite directions.
The 30-year long bond gained 16/32 to 108 307/32 with a yield of 4.45 percent, down from 4.50 percent late Friday.
http://ap.google.com/article/ALeqM5huW7XBNlC1-mFEhKe47gbQJYfdPAD8TSL4OO0
OJ futures should be limit up at opening tomorrow. It will be below 30 degrees for at least four hours Wednesday night/Thursday morning though much of central Florida.
Of course the futures will be up in the morning. Mortimer and Randolph Duke are going to corner the market. When Winthorpe and Valentine start selling, get in on it.
I did pretty well in the markets last year - I handle all my own investments - but the greatest returns, hands down, were the dividends from the time spent encouraging my kids to learn through discovery. My eight-year-old read Rudyard Kipling’s KIM - a yellowing original volume I found in an antique bookstore in Stamford, England - and was mesmerized. That payoff was among the more rewarding of 2007.
Congrats, Sammy!
One of the greatest accomplishments in parenting is raising children who enjoy reading, learning and exploring things on their own.
Though your posts, you obviously enjoy your family, and they are blessed to have you (a loving, concerned, appreciative husband/father) in their lives as well.
Markets
History lessons
Jan 1st 2008
From Economist.com
IF HISTORY is any guide, 2008 should be a better-than-average year for America’s stockmarkets. The Barclays Gilt-Equity Index Study shows that since 1926 Wall Street has risen by an average of 8.8% in presidential-election years. A stumbling housing market and a squeeze on global credit will not help. Investors will also be wondering if record corporate profits can be sustained. Optimists argue that on the basis of forecast profits, price/earnings ratios look cheap by historical standards. Pessimists counter that, using a smoothed average of profits, valuations are as high as they were before the 1929 crash.
http://economist.com/daily/chartgallery/displaystory.cfm?story_id=10276585
This is good news in disguies, as scarrier crises warrant larger taxpayer/saver-funded bailouts.
Blackstone warns on mortgage ‘black hole’
By James Politi in New York
Published: November 12 2007 19:09 | Last updated: November 12 2007 22:15
The US mortgage crisis is “deeper” and “scarier” than anyone expected, Tony James, president of Blackstone, said on Monday, as shares in the US private equity group fell on news that its revenues had fallen sharply below expectations in the third quarter.
Blackstone was hit hard by market turmoil, posting a net loss of $113m (€77m) that reflected both its disappointing revenues and an $802m non-cash charge related to its initial public offering.
http://www.ft.com/cms/s/ed96bb54-9151-11dc-9590-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fed96bb54-9151-11dc-9590-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
The US mortgage crisis is “deeper” and “scarier” than anyone expected,
I guess I must not be “anyone” then.
If it’s deeper and scarier than I expected, you all should be storing food, water, and ammo.
Funny CNN article:
http://finance.yahoo.com/focus-retirement/article/104107/Retirement-Plan-Interrupted?mod=retirement-preparation
The lady is strappped with her mortgage that she got into at the tippy top and her financial planner recommends revving up her investments by getting out of large caps and into international and small caps to help make up the difference. Ha.
2007 crisis was in sub-prime loans
2008 crisis will be in Alt-A loans (These are the loans given to people with no documentation; aka illegals and liars)
2009 crisis will be in Personal Loans (These are relatively new and set up to fail as they are adjustable rates that start off under 10% then adjust upward slowly with the potential of skyrocketing to 30% with 1 late payment)
Bottom line… DO NOT BUY NOW!!! Prices may have come down substantially in your area but will crash thru the floor by 2010 at which time it may be good to get back in the game so to speak as long as the house is providing shelter or income.
Poor bankers…
Blackstone’s PHH deal hit by credit squeeze
By Martin Arnold in London and Henny Sender in New York
Published: January 1 2008 15:30 | Last updated: January 1 2008 19:03
A $1.8bn deal between General Electric and Blackstone to acquire PHH, a mortgage and leasing business, became the latest casualty of turmoil in the credit markets as PHH said on Tuesday it had terminated the agreement.
Blackstone Group immediately put out a statement suggesting it held its banks responsible for the failure of the deal to go through.
EDITOR’S CHOICE
Blackstone warns on mortgage ‘black hole’ - Nov-12
Lex: Blackstone’s results - Nov-12
Video: Julie MacIntosh on Blackstone - Nov-12
Credit turmoil hits commercial property - Nov-12
Twice-right trader says cash in on equities - Nov-12
Blackstone uses China link for Nufarm bid - Nov-02
http://www.ft.com/cms/s/5421e2b8-b876-11dc-893b-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F5421e2b8-b876-11dc-893b-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Another D-ratic-style “Save Our Homes / Lenders / Flippers / Investers / Campaign Contributors” program is announced…
December 31, 2007, 2:46 pm
Romney Nudges Bush on Housing Issue
Alex Frangos and Elizabeth Holmes reporting from Iowa.
Sensing that the housing crisis is heating up as a campaign issue, Mitt Romney pleaded with President Bush to stay on top of efforts to stem foreclosures and to return liquidity to the mortgage market. After all, if the housing market worsens, that’s a negative for Republicans. “It’s of real interest for this administration to be all over this issue,” he said at a campaign stop in Iowa.
The former Massachusetts governor also said that if things don’t be better, more might need to be done to save homeowners and revive the moribund home loan market. “We may need to look for other tools to bring people together,” he said.
One of those tools, he said, is to create “cooperatives of mortgage servicing companies or investors coming together again with the interest of helping homeowners stay in their homes without having homes become foreclosed which has multiple negative impacts on the economy.”
http://blogs.wsj.com/washwire/2007/12/31/romney-nudges-bush-on-housing-issue/?mod=special_page_campaign2008_blogs
I have a few questions for the eCONomists who advise the likes of candidates HC, MR, etc:
1) Why is it in the interest of owners of homes they cannot afford to keep paying interest through the nose, thereby gradually driving their household balance sheets to negative levels and, eventually, to the breaking point? Wouldn’t it be more advantageous for many of these owners of houses they cannot afford to go for a short sale, particularly given the prospect of tax-free short sale income?
2) Won’t delaying foreclosure among owners of homes they cannot afford inadvertently defeat efforts to provide middle class American households with affordable housing?
3) Why is it any of the candidates business (esp. those trying to claim the conservative mantle of Ronald Reagun) to interfere with private contracts between lenders and their customers?
Anybody ready for Huckabee vrs. Obama? You may not like the prospect, but the race is at least getting interesting.
Election 2008
Poll Shows Shifts in Iowa
by Michele Norris and David Greene
All Things Considered, January 1, 2008 · A new Des Moines Register poll shows Barack Obama moving ahead of Hillary Clinton and John Edwards among Democrats, and Mike Huckabee regaining a lead over Mitt Romney on the Republican side. Iowa’s caucuses are now just two days away. Michele Norris talks with David Greene about campaigning by presidential candidates in Iowa this New Year’s Day.
http://www.npr.org/templates/story/story.php?storyId=17764941
I’m sitting here watching the Capital One Bowl (Michigan vs FL State) and was just thinking they should call this the Foreclosure Bowl.
Michigan vs. Florida, duh.
LOL