The Housing Bubble

“…just walk away.”

oh the irony.

http://www.madmaxmovies.com/cast/MadMax2/KjellNilsson/index.html

One child left behind?

Comment by Xpovos
2008-01-23 12:16:04
Two children enter, one child leaves.

LOL

OOOOh! A children’s Thunderdome sounds so much better now. *I know, I’m a sick person*

Not to worry. They just play Wii games until one gets beat down so bad the he/she refuses to play…

The ‘non winner’ gets a trophy too…

Part of the Patriot Act

AT LAST!

It’s harder to buy asthma medication than it is to buy meth.

Is it time to close the Casino RE USA Dear ?

Even our Neanderthals neighbors, Sally and Joe6p Jones are beginning worrying about the possible hidden CONSEQUENCES of gambling in no work/food to the table games such as OPM, no skin in the game and the credit card crunch.

Auh..B..b..but WAIT!!!

Our friendly mental giant, Dinosaur Rex Fed, has just stumbled in again and possibly chased some fresh meat into OUR investment killing zone table.

Roll those bones AGAIN honey…Fed Rex will be around a long time and he will ALWAYS save us.

Suzanne in the next cave…researched it

Exactly Aladin…… Folks have no idea how low prices were in rust belt and northeast areas before the boom. All the time I see knuckleheads dropping cash for houses they consider “cheap” because they’re 60-70k. They have no clue those same shacks were 15-20k just a few years ago.

Check out some of these nice palces n Detroit , and who owned them. You want to see oppulence and what can happen to housing prices. I am sure you can get any one of these for 10,000 or less.
http://www.historicbostonedison.org/

Or would that be Detroika?

If she was talking about $10k homes in Pittsburgh, they exist in the worst crime and the house is run down and needs major repairs. If she was saying those nice $50k homes in safe neighboorhoods will be $10k, thats a different story alltogether. If those nice $50k homes in safe neighboorhoods will drop big time, please tell me, I am intrigued. I don’t doubt those $250k homes in south FL will drop below $100k as no middle class person can afford $250k but $50k is affordable and no one believes itll drop more than a few thousand, it wasn’t much cheaper back in 1998 to begin with. Blue Skye got me by surprise. I await his/her answer with links if possible.

Another friend told me once decent houses in safe areas become $50/foot, this is the bottom. You can already get decent homes in safe areas for $60/foot in much of Texas.

Anyone know how low prices can go? He says it’s those that are $100, 200, 300, 500 a square foot that need to drop big time.

is this for real…10k…i cant buy a decent car for 10k..gotta be 100k.

Bye,
no one can be sure how low prices will go, but be sure they will. The alt-a defaults have barely begun. I understand your frustration and the need to get out of the house, but please take everyone’s advice and rent at least for a year.
Be sure you like the place, and have work that doesn’t disappear in a downturn. You don’t want to get stuck needing to move for a better opportunity and have an unsellable house around your neck.
Heck, why save for a downpayment, when you might be able to buy for cash in a year or two?

The problem with cheap cities as far as housing prices go, is it tends to attract the downtrodden, those whose avenues are a dead end.

Combine this with the meth problem, that is larger than life in many of these cities, and no price is cheap enough, is it?

simplesimon,

You can buy a decent motorhome for $10K. House and car in one!

You can buy a decent motorhome for $10K. House and car in one!

Decent? I’ve lived full time in one for 5 of the 7 years. I’ve had everything from a BlueBird Wonderlodge PT40 to a MB Sprinter. Also started out with a $15K chevy and upgraded to a $30K ford… before getting sick of the crap quality and buying an older 1987 BlueBird back when diesel was cheap (2003).

For $10K you get a total POS Chevy v8 maybe the newer engine. Good luck when it breaks down as your whole house has to to the shop and you will find most Chevy dealers won’t touch it. Ford is slightly better.

A Sprinter is a different lifestyle (less is more) but well worth it. 20MPG and much safer than most RV’s (plywood frame on wheels). But more like $60K to start.

I’m in the watercraft crowd, but was poking around on ebay and saw some vintage RVs in the $10 to 20K range that seemed liveable, if not drivable. 1987 34ft airstream with a Chevy 454 among them, that’s not plywood. Got sidetracked looking for an RV washer/dryer for the boat.

Want a good motorhome cheap? Get a 93 thru 98 Safari, with a Cummins 5.9 diesel engine. Motorhome living is great, but you better have a lot of tools, and a lifetime of automotive and home repair experience behind you, because if you think you will never have to work on it, you`re dreaming. Diesel is the only way to go, and you will want to do all the work yourself, because otherwise it would be not practical, and too expensive to hire it done. It`s a great life, and I love it. Good Luck !

Get a career first, then a house. Most 26 yr olds have roommates, much more fun than mom and dad.

Seeing as you’re a firm believer in cheap Buffalo housing, I have a deal for you Alladinsane.. I will buy a $10K house in Buffalo if you will agree to live in it full time for 2 years.

Disclaimer: You will be responsible for cost/repair of any code non compliances if you’d like them corrected for your stay.

And what did rent cost on that $5k house?

I don’t know why those landlords want double the rent what I can get in a mortgage. They want $600/month rent whereas I can rent that house from the bank for $300 a month on a 30 year fixed mortgage. I will be willing to pay the landlord rent equal to what he is paying on his mortgage, no more.

I could be renting a $250k 1 bedroom condo by the intracostal here in Florida for $800 a month, why would I pay the same money on an $80k house in Pittsburgh?

Heck I could even rent out a room on a $500k to $1m house in the bay area, LA, south lake Tahoe or Vail/Aspen for $800 a month.

I am self employed so I can live anywhere. If my internet business gets affected, we are officially in a great depression II.

The Pittsburgh salaries *do* support $50k homes. Salaries in north FL support $50k homes, not $150k homes and thats where homes in north FL will fall. I can see those $50k Pittsburgh homes dropping to $40k, maybe $35k. Not much of a downside compared to losing $100k plus elsewhere.

If those $50k Pittsburgh houses will really become $10k, then I will be forced to wait as im not willing to forfiet $40k. Min wage($8/hour) would be enough to buy *two* of those $10k homes and people will do that and rent one house out to some fool that will pay high rent twice the mortgage basically making his other house rent free for him.

This is where I see the flaw. House prices will drop to 125x rent. Rent must fall in order for house prices to fall even further. Thanks for reading and please comment.

You’ve answered much of your own question in your post. You mentioned $8/hr jobs, landlords charging 2x principal and interest in rent (section 8 and the poor is the landlords clientele), etc etc. Pittburgh might not be poor but the high dollar manufacturing is gone, it is not a retirement or vacation destination and it’s forecast is bleak.

Where are the fundamentals? (Or do they not matter….. kinda like the old “deficits don’t matter lie?)

—-I don’t know why those landlords want double the rent what I can get in a mortgage. They want $600/month rent whereas I can rent that house from the bank for $300 a month on a 30 year fixed mortgage. I will be willing to pay the landlord rent equal to what he is paying on his mortgage, no more.——

At low end model does not always hold up.

On the $300 mortgage- how much additional for taxes. City taxes tend to be disproportionately high.

How much for maintenance. Houses of this ilk tend to be disasters waiting to happen. New water heater, new roof, flood damage, etc all pose risk if not guaranteed extra payment. As renter one does not have that risk. Security costs.

Be very careful

Pittsburgh may seem bleak, as may Detroit, Buffalo, etc.

Denver and LA were considered desert wastelands not all that long ago.

I think we will relearn the value of our older cities as time marches on. They were designed before the automobile was widespread, their location is often based on natural resources.

Compare this with a Salt Lake City suburb. Without widespread automobile usage and millions of dollars consistently being put into engineering and water projects, people could not live there.

Which areas would fare better in a moderate depression? Which are more sustainable?

I agree with you, much of Old America has a lot going for it…

That being said, being a 1st adapter is not for me.

Hey if you are so sure that $50k house will drop to $10k, ill simply wait then buy a $150k house for $30k. I doubt min wage will drop and min wage can support some of the cheaper Pittsburgh homes.

I remember in another forum everyone was saying Oil City homes were going to crash big time, yet they somehow justified their $500k California house was going to keep it’s value. I could not even respond to such insanity.

Another thing I could do is buy the cheapest livable house, around $15k in Oil City. Several times cheaper than renting anywhere, even if the house went down to $2000(which I highly doubt), I would have lost more than that renting anyway. I would simply keep that house I paid $15k for and buy a second house, much bigger and nicer for dirt cheap.

My parents are losing hundreds of thousands, I told them to sell their house(and either rent or relocate), coulda gotten $750k for it at the peak. Maybe $500k today.

My dilemna is different in that im a first time buyer. It seems that no matter where I buy, ill lose money. If I rent, ill lose much more money.(I don’t have much of a preference for location so id rather pay $15k in Oil City than rent for $800/month elsewhere even if that house costs $300k to buy)

Because as ive said, I am self employed with an internet business so physical location doesn’t matter one bit. For you, jobs matter, for me, anywhere that has internet is fine.

Bye: Carrie asked why don’t you rent? If you have adequate income you should be able to find an affordable rental.

My apologies. I answered one comment before reading all that followed.

there is still value to be had in renting rather than owning. I agree with those that say you should rent for a few months first.

The jump from living with your parents to buying a home in a new city is really big. You are bundling about 3 or 4 life changing events into one. Why not pick up a wife and start a new job while you are at it?

What do you give up by renting for 4 months? a hundred dollars of home equity and another 400 or so in overpayment on rent? That is a very small cost to pay in order to find out if this is an area that is actually “livable” for you. There is much more to picking an area to live than just looking at housing prices. You need to figure out whether you can have a social life there, you need to figure out whether you like the people, you need to acclimate yourself to the weather, you need to figure out whether the transit really is sufficient for your needs. You also need to figure out whether maintaining a home, a yard, doing repairs, furnishing a house with all of its neccesary crap (lawn mower, appliances, etc) are really for you. One of the underrated benefits of renting are that you save a ton of time by not having to worry much about maintaining the space you live in.

If you buy a house, then realize after a year that you really don’t want to be there, it will cost you a lot more than $500.

You don’t even have to move all your stuff right away. Store it at home for a few months while you try the area out, then when you make a final decision move your stuff for real. Then you can even cut out the extra move.

If you are looking for a sub 75k house, there are more options than just Pittsburgh. Albany, Syracuse, Rochester, Buffalo, Pittsburgh, Scranton, Cleveland, Toledo, Detroit, parts of Philly, Lansing, Flint, a bunch of places in Indiana, etc, etc. all provide options for you. These areas are also all very different. It might be worth your while to take a little vacation and do a road tour of these areas, get a feel for them, and figure out which one really strikes your fancy the most.

wait a minute. get married and have kinds, but whoa, whoa, whoa.. hold on on that 50K house?!

this discussion highlights the actual reasons to buy a house. personal circumstances, not one size fits all investment recommendations. Bye FL has noted a number of specific reasons why buying may be good idea in his/her circumstances.

it will be a great learning experience at a relatively low cost.

if you ever need to rent the place out, just be careful renting to those meth heads. that’s probably why the rents are so high… amphetamine premium.

And people take him very seriously. That is why the tingly-dingly.

Soros is a trader, not a traitor.

Traders by nature, have to be cognizant of all risks.

Comes with the territory.

Don’t you wonder how high and mighty experts like Soros and Summers, who freely and frequently dispense advice through global MSM channels, have placed their bets before opining on fixes “for the common good”?

Yes.

I intend to profit from other people’s losses, is that bad?

“I intend to profit from other people’s losses, is that bad?”

They (PTB) created a dog eat dog world, and now they’re (PTB) surprised to hear everyone is barking.

Soros is a limousine democrat/socialist. Their view of helping you is to have you eating from the palm of their hand, and you are supposed to demonstrate your thanks at each feeding.

You might want to read up on Soros

Soros has been active as a philanthropist since the 1970s, when he began providing funds to help black students attend the University of Cape Town in apartheid South Africa, and began funding dissident movements behind the iron curtain. ie pro democracy

Soros’ philanthropic funding in Central and Eastern Europe mostly occurs through the Open Society Institute (OSI) and national Soros Foundations, which sometimes go under other names, e.g., the Stefan Batory Foundation in Poland. As of 2003, PBS[16] estimated that he had given away a total of $4 billion.

He has promoted efforts to increase democracy in many countries.

The OSI says it has spent about $400 million annually in recent years.

TIME Magazine in 2007 cited two specific projects - $100 million toward internet infrastructure for regional Russian universities; and $50 million for the Millennium Promise to eradicate extreme poverty in Africa - while noting that Soros has given $742 million to projects in the U.S., and given away a total of more than $6 billion.[17]

Other notable projects have included aid to scientists and universities throughout Central and Eastern Europe, help to civilians during the siege of Sarajevo, worldwide efforts to repeal drug prohibition laws, and Transparency International. Soros also pledged an endowment of €420 million to the Central European University (CEU). The Nobel Peace Prize winner, Muhammad Yunus and his microfinance bank Grameen Bank received support from the OSI.

The Open Society Institute (OSI), , aims to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform. On a local level, OSI implements a range of initiatives to support the rule of law, education, public health, and independent media. At the same time, OSI works to build alliances across borders and continents on issues such as combating corruption and rights abuses.

NYCB: The shareholders might have to lose all they’ve invested. The man didn’t even blink when he said it.

I have a feeling Soros is talking his book. In other words, he’s bought a bunch of big bank debt and wants Uncle Sam to bail him out. I think banks should be allowed to fail, period, with both stockholders and bondholders crushed. (Depositors will be covered by FDIC). This will increase the cost of capital for all banks, which will in turn cause bank managements to be more prudent in making loans, simply because it’s too expensive for them to do otherwise. If Soros bought bank debt, I think he jumped in too early. There’s lots of carnage to come.

most government land is arable land … not terribly good for growing vegetable gardens.

I’m sure community gardens will be back in vogue, though–just like the early 1990’s.

I don’t thing he is talking just deposit insurance. Banks borrow money from other institutions. I think he would want those loans repaid in addition to the depositors. Otherwise we get a cascade in counter-party risk as one bank going under and not repaying its loans, triggers the next one to go under.

Everyone who buys stocks has a sense of entitlement.

I thought a share of stock “entitled” you to one share of the company. Less than a millionth but more than nothing.

This is the outcome some of us (including Ben Jones, I think) believed the Fed would try quite hard to avoid. The jury is still out, IMO. Soros was just quoted on NPR suggesting that the decoupling is underway, as the U.S. will recess while the party continues in other parts of the globe. I personally think this is utter nonsense, but then I am not a traitor (er, I mean, trader) like Soros…

as the U.S. will recess while the party continues in other parts of the globe.

Then the other parts of the globe will have to buy their crap from each other instead of depending on the US consumer to do buy it. I’m pretty sure the rest of the globe isn’t able to do that yet, because if they could, China would have dumped their treasuries long ago.

The “decoupling’ theory is right up there with “real estate always go up”.
Personally, I think the rate cuts were to calm the waters in Asia. India was near meltdown, and the rest of Asia was cratering. None of the Asian economies is sufficiently developed domestically to absorb their production. In the future, possibly; now, no freaking way.

“dumped their treasuries long ago”

This graph shows the opposite trend from ‘dumping treasuries.’ In fact, it shows a flight to quality that frankly scares the bejesus out of me, even though it also suggests the dollar is still the world’s currency of last resort (sorry gold bugs! Gold future 883.30 -7.00 -0.79%).

It appears that when times get bad, the world’s financial markets still prefer the motto, ‘In God we Trust.’ After all, a T-bond is no more nor less than a promised series of fixed nominal payments denominated in $US, backed by the full faith and credit of the U.S. govt.

I personally doubt that Soros believes his own comments — he probably has made bets that will pay off handsomely when it turns out that decoupling was yet another specious economic theory from on high.

http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=TYX&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=7&startdate=&enddate=&hiddenTrue=&comp=tnx&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=1&optstyle=1013

‘This is the outcome some of us (including Ben Jones, I think) believed the Fed would try quite hard to avoid. The jury is still out, IMO.’

If this bank salvage was a deposit insurance matter, what’s the matter with that? I sure hope FDIC will do the right thing if need be at my bank.

I’ll speak for myself, thank you.

Sorry Ben — I was not trying to put words in your mouth.

Could you please explain your question (time permitting):

“If this bank salvage was a deposit insurance matter, what’s the matter with that?”

I personally think this is utter nonsense, but then I am not a traitor

Several middle eastern countries have already depegged from the dollar in the last year or so have they not? I would have to look to find specific examples, so I could be wrong here. China revalue the yuan back in ‘05 and at that time I believe it was they announced intentions to rebalance their reserves more into other currencies and gold.

OPEC was discussing selling oil in a basket of currencies this past year, I don’t know if anything was really decided about that or if Saudi Arabia put the kabosh on it or what. At the very least, it should be recognized this is a possbility. Further, when you consider the frequency with which we tend to piss off people in other countries in the last 50 or so years, that will only lead to more pressure to stop using the dollar.

Then the other parts of the globe will have to buy their crap from each other instead of depending on the US consumer to do buy it.

This has only worked because of the strength of the dollar derived from it’s status as a reserve currency and in purchasing commodities. If that changes, and I believe that is already happening slowly, then the dollar has relatively little value in terms of the things we export, since our export list is rather short.

The dollar is also back by our military that will iraq you if you pull off the dollar. The problem is we are broke and cannot afford doing business this way anymore.

This has only worked because of the strength of the dollar derived from it’s status as a reserve currency and in purchasing commodities. If that changes, and I believe that is already happening slowly, then the dollar has relatively little value in terms of the things we export, since our export list is rather short.

That’s a huge misconception. The bulk of what is imported from say, China, comes in the form of $100 Nike sneakers and $400 Dell computers. It certainly doesn’t come in the form of generic $1 nail clippers. The fact is that for items assembled in China, most of the value doesn’t come from the busy fingers wielding sewing machines, screwdrivers and soldering irons - it comes from the people designing and marketing these things. Dell and Nike source from China not because they have to, but because it is cheap to do so. The moment it ceases to be cheap, they will make their products elsewhere. This applies not only to large MNC’s like Dell and Nike - it applies everywhere. They are not at China’s mercy - China is at their mercy. Dell and Nike can make stuff anywhere. China can’t replace those factories if they leave, since nobody’s gonna zero out their Dell and Nike purchases in favor of some generic Chinese brand.

China is not doing us any favors by keeping their foreign exchange holdings and buying Treasuries - they’re keeping their holdings in dollars to keep their currency weak, and buying Treasuries in order to earn interest on those dollar holdings. The idea that China will stop holding dollars in order to prevent currency losses is to put the cart before the horse. Those “currency losses”, real as they may be, are simply a cost of industrialization no different from a cradle-to-grave welfare state system. The difference is that unlike a cradle-to-grave welfare state system, industrialization actually leads to the acquisition of skills and capital equipment and the cultural absorption of skills needed to modernize. All of East Asia has gone through decades of “currency losses” in order to modernize. That’s not going to change.

In fact, I think many of these countries have a cultural problem - they simply save too much. The reality of economic progress is that it is driven by technological progress. The problem is that the amount of savings floating around worldwide is probably hundreds or thousands of times necessary to fund technological progress. So the remainder goes towards inflating asset prices. Like real estate, precious metals, etc. If the Chinese don’t buy foreign assets with their dollars, choosing instead to exchange all dollars for yuan, what they get is asset inflation in China, over and above the massive bubble they currently have. Ultimately, because too much savings are chasing too few profitable investments domestically, East Asian governments have chosen to invest their foreign exchange reserves abroad, while simultaneously increasing their attractiveness as destinations for foreign plants because of their weak currencies. The government officials who make statements to the contrary don’t fully understand the nature of the East Asian economic miracle, and are in for a rude awakening if they shift gears.

I met a guy yesterday that was ecstatic about the rate cuts thinking he could refinance his (fixed mortgage) to a lower rate.

Those on this board know otherwise, but the public is sold a bill of goods and told that the rate cut helps them. Sad.

Actually, even though fed rate cuts should not correlate to mortgage rates, mortgage rates are falling substantially. Rates for 15-year are now 5.1%, down a 1.4 percent from last year.

“I met a guy yesterday that was ecstatic about the rate cuts thinking he could refinance his (fixed mortgage) to a lower rate.”

That’s the line Cramer has been pumping on his show: Fed lowers rates so banks can refi every FB to reduce foreclosures.

CNBC this morning reported that 15-year fixed rates were under 5% - not a bad deal in the grand scheme, but most FBs still can’t afford it, even if they could qualify for that rate.

Bernanke did a paper 4 years ago about how to avoid getting trapped at 0% with nothing left to do. His answer was to react quickly, cut early, & hope.

Now we all get to see if that works. It did for one day, anyhow.

I met a guy yesterday that was ecstatic about the rate cuts thinking he could refinance his (fixed mortgage) to a lower rate.

Those on this board know otherwise, but the public is sold a bill of goods and told that the rate cut helps them. Sad.

I don’t understand - why would you not be able refinance at lower rates?

I did it three times during the 2002-2004 period - a much lower rate each time, and saved a bundle by reducing my interest payments; at least for a while anyhow. I plan to do it again when rates appear to be bottoming out, if they go low enough. I’m guessing they’ve still got quite a ways to go based on BB’s now-revealed intentions to trash the dollar to try and save the stock market.

I won’t be taking out any extra equity by increasing the loan, as the Fed hopes, however. As a matter of fact I may use it as an opportunity to reduce my principle.

Not all of us on the blog are renters - many do own homes, and many have mortgages - almost all that do are at fixed rate I’m guessing. I see the interest rate drops as an excellent way to save money long run.

I don’t think that’s the effect the Fed intends - they want us to use it as a way to spend more money. Oh well - tough noogies.

Pacman:
I don’t understand - why would you not be able refinance at lower rates?

I did it three times during the 2002-2004 period - a much lower rate each time, and saved a bundle by reducing my interest payments; at least for a while anyhow.

Sure - you did, so did I in 2002-2006 period when prices were home prices were skyrocketing (got myself a 4.75 fixed 30 yr) the mortgage system was awash in money and risk ceased to exist. But now - Just try to do a refi with your outstanding loan balance greater than your equity, with no docs, no income verification and a phony appraisal.
Rates may be dropping but the surviving lenders will be very picky about who they lend to and what they lend on.

Try no bold

Now?

Pardon me while I turn down the volume a little…Better now?

pm: I don’t think that’s the effect the Fed intends - they want us to use it as a way to spend more money. Oh well - tough noogies.

I think the intent here is primarily to make the banks solvent. Rate cuts ripple out throughout the economy. Many banks have now learned their lesson about the importance of tight credit controls. The problem is that they have this overhang of bad debt out there, of loans made under less stringent credit controls. Rate cuts can ease these problems. Companies with credit lines pegged to some interest rate index are now under less pressure, because their rates just adjusted .75% lower. And banks make the same profit margin they did before the cut - only now, the default risk is lower. Overall, rate cuts reduce financial pressures on commercial and individual users of credit, thereby reducing foreclosure and bankruptcy risks. All of which is helpful to the balance sheet of every bank in the nation, not to mention our personal balance sheets, which will be sorely tested, courtesy of the FDIC (which will require a government bailout to make depositors whole for hundreds of billions in bank losses), by the avalanche of the bank failures to come.

Is it supposed to “keep hot air under prices”? Maybe, but I doubt it.

Seems like a reasonable way for a lending institution to cut its losses, keep revenue coming in, and keep warm bodies in residential units for upkeep and maintenance. In this case, maybe some lenders are capitulating to market realities and trying to salvage something on the bottom line?

B.S. If the house was bought for $500k then at that moment it was worth $500k, not $300k.

Then why didn’t you buy? Hmm…. thats right…. You knew the actual value was far less.

Because I’m not in a market for a house. There is no such thing as the actual value - that’s the “mark to model” talk. When houses sold for $500k that was the market. Today the market on that house is much less.

Nice tap dance.

Evil Capitalist is right. When the houses sold at $500K, that was the market. We did not buy because the future downside risk became significant. I am not buying gold for the same reason. I do not deny it’s worth $890 today, I just think in the short term I will be able to buy it under $500.

Me too, alad. sad to say.

Yeah we are a broke socialist nation with only on true fiscal republican running for office, or for that matter in congress. We need to elect more ron pauls to office.

All the utility companies have to do is flip a switch, doesn’t matter how many thermostats you have. If you have a generator, better have a year’s supply of fuel at your place.

So? This lets up bump everybody’s AC up to 78 rather than having some blacked out in 100 degree heat. They don’t want to lose business. It would be a dumb move to cut somebody off permanently (which they can already do, actually) and the state wouldn’t let them.

lets *them* (dang cutnpaste goofs)

So I should start building the mini refrig. units that fit around a t-stat now or should I wait until the law goes in effect?

Never work…

Yes, LLCs and Corps CAN get 1099s… their business partners may CHOOSE to issue them… but there is no obligation, and the IRS doesn’t care.

Just like businesses don’t issue 1099s to their attorneys, or their landscapers, or their utility providers, or most other business partners…

1099s are issued to individuals, including individuals acting as sole proprietors.

Beyond that, I dunno.

It all depends on their structure - LLCs dont get 1099 if they are de-facto corps which they establish via giving business a W-9. It is not really up for a debate - it is IRS regulation.

http://www.irs.gov/pub/irs-pdf/fw9.pdf

AMT limits mortgage interest property taxes and charitable contributions. I loose 75% of my deductions because of AMT, but atleast the CEO’s of America get a 10% dividend tax rate. I loose 15-20k due to AMT, and save less than 3000 due to tax breaks they gave me. If you get paid in stock or run a business your golden. If you get a paycheck you loose.

It isn’t that I feel I should pay low or no taxes. However, I figured my marginal rate last week.

7.6% SS+MC
25% tax bracket
5% loss in child tax credit
1.875% loss in medical cost deduction (25% of 7.5%)
4.45% state
44%
Subtract out 25% of the 4.45% since state is federally deductably = 1.1%

Call it 43%

Now take 7% sales tax on half of the 56% they let me keep = 1%

Add on property tax, vehicle tax, gas tax, etc.

I don’t mind paying taxes, but 45% marginal rate is excessive.

Darrell, if taxes weren’t dramatically lowered on those who can most afford to pay, your taxes would be far lower social security wouldn’t even be an issue. The top margins need to go back to where they were and dividend tax reduction should be allowed to expire.

Who do so many people think that the income tax is the “only” tax anyone pays? Who do so many people think they have a *right* to someone’s property (their income?)

Taxes must be laid upon *privileged* activities that are *granted* by the government.

If your income tax rate is 25% then your SS is 15.3% then your sales tax is 5% and your property tax is 3% (of your annual income assuming your bought a house a 3x your income and the property tax rate is 1%) Then your state income tax is 4% then your total tax burden is 52.3% and we haven’t even started talking about all of the fees and surcharges tacked on to your utilities, phone, power, internet, etc.

As your income approaches infinity your tax rate falls from 52.3% to about 38%.

I am sorry, but if I had 52.3% more income and everyone around me did to then I could afford:

Private School for all of my children
Save for my own retirement
Give twice as much to charity as I give today
Membership at private “park and recreation services”
Membership at private libraries (if I needed it)

The punishment for crimes should be enough to cover the majority of the associated investigation, prosecution, and court costs. A “mileage on your car” tax on your car could be an excise tax on the privilege of using government roads.

We should have a truly volunteer army instead of a mercenary army paid for by forced taxation. Those who value their freedom will pay to have it defended, but will not pay for expensive overseas wars. If just power comes from the consent of the governed and your neighbor would prefer the government of the invading country, then what right do you have to force him to fight or pay for someone else to fight to defend your idea of “just” government?

Do unto others as you would have them do unto you.

While you are add it, let’s get rid of the mortgage tax deduction on 1st and 2nd homes and let’s tax the gains on home resales. The more monies we can throw into government coffers the more they have to spend (waste).

You guys laugh at what we canadians pay in taxes but so far, IMO, we’re better off.

We have all the useless consumer junk and big fancy houses that the US does but surprisingly, we have very few ghettos.

I wonder why?

An excellent point, ugh.

Dans fantasy appears far more serious than I thought.

Your ghettos are called “First Nation”.

Mr. Bubble,
No, I don’t think you’re Dr. Evil at all, I believe that was the underlying reason for their creation…social peace. That said, the numbers of people now entitled to live off the middle class taxpayer has balloned to such an extent that it has become a back-breaking burden, but it has also created an entitlement mentality that crosses income levels.
Build a mcmansion on a flood plain–let the gov’t bail you out. Build your second home on eroding beachfront–let the gov’t bail you out. Want a house or student loan, let the government pony up and let the taxpayers carrying the default risks. I won’t even bother with the multi-generational welfare society and the tax monies looted to support medical and educational and housing needs for illegals.
At some point, and i think we’ve reached it, people have got to shoulder their own responsibilities. We can’t make life “safe’ for everyone. Nature did not design life to be safe.

Social programs through government exist because a society of individuals chose to slough off their duty. How much time does one volunteer in this country versus how much money? Government hand-outs exist because people don’t want to take the time to help others. It blows my mind people want to shut churches down because of religion hangups. Churches were the places where people found “welfare” in the old times. Churches were also occupied by the individuals of the town.

Churches also had orphanages, instead of the govt-funded foster homes we have now.

I’m not a fan of foster care, but think it’s far greater than an orphanage.

I agree with Mr. Bubble — **we all** benefit from the welfare system, if only to keep the dangerous ones from killing us for a few scraps of food.

Don’t like welfare? IMO, we’re about to see what happens when the lowest rung of society doesn’t have enough to survive. All the Darwinian capitalists are gonna pee their pants and be first to run to the govt for protection from the evil thugs.

You get what you pay for.

There is another interesting CB, which actually publishes overnight data on its website.

http://www.bankofrussia.org/

Thanks Bear.

Should the democrats get elected the next bubble will be in Infrastructure replacement and maintenance.

You may very well be correct. At least we’d get some bridges and an updated power grid out of that.

i would to see 2 Trillion spend on new energy sources!! Instead of this war over oil. If Russia want to kick our ass, do we even have the oil to defend ourselves? Nice work W!

I think you should read the footnotes to the Federal Budget and decide for yourself. There is not one corporation in America that fails to account for liabilities. Why should the Government create a false accounting? GM almost went into BK because of unfunded liabilities. The US is BK.

See how the accounting firm signed off on the federal budget.

There is not one corporation in America that fails to account for liabilities.

Apples and oranges. Corporations aren’t governments. Is there any government in the world that accounts for unfunded welfare state liabilities? How would Europe’s finances look if you threw in the full weight of these future obligations, given its cradle to grave welfare state policies and shrinking productive population? The fact is that corporations are liable for whatever they’re liable for unless they fall into bankruptcy - they don’t make law. Governments can and do change welfare state benefits and tax rates. Corporations cannot. In addition, anyone who thinks his Social Security payments are guaranteed at the levels he sees on his statements is likely to be disappointed. Between raising taxes, changing eligibility requirements and cutting benefits, Social Security will be fixed the way any welfare benefit program (where different factions of motivated voters have directly opposed interests) is fixed - at the last minute with pain inflicted on every party.

Too many shorts.

A percent or two per day adds up to quite a bit over a year.

So does $8/share on an apple short.

Nap time already.

“a few pct”

Try 20+ pct on bzh — not a bad day. (If I were a day trader, I would pay close attention to TxChk’s and Hoz’s early-morning posts…)

Ditto. I have not done much moving around. It was a big step to taker the jump and move.

But, I am an ex WorldCom employee that say his 401(k) fall better than 85% from 2000 to 2003.

I have to get out of treasuries, but I do not know where.

I doubt the bond insurer rescue will happen. There will be major steps down in bond ratings when they go under. I think Freddie and Fannie are functionally insolvant.

There are MANY more steps down for stocks, domestic and international.

An my options are big cap stocks, small cap, value, growth, balanced… oh, and bond fund that has a lot of ABCP and MBS. That leaves treasuries and cash… But the cash is a mix of CDs and money markets, neither are as safe as I’d like.

Maybe I’m alone here, but I think that story’s very sad.

It’s true that some people seek to scam the system, but others are honestly ignorant (and stupid, if I can say it).

Not sure if there are any answers, but it would have been nice to see someone who knew this girl try to help her with a little financial advice.

As long as the news is bad the market is going to keep going lower and lower. I expect a number of 1st quarter earnings misses and more bank writedowns. Ambac and AIC should provide even more bad news.

This is far, far from over.

I was wrong. Who ever thought that the government was going to bail out the likes of AMBAC and MBIA.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aS4MS1THQ.Zk&refer=home

This has gotten totally, totally stupid !

The government and the Fed might just as well buy everyone a house. So much for rewarding the non gamblers.

I remember saying last summer I thought tech was ripe for shorting. Early as usual but I think we’ll be able to do that for some time now,

I asked this in another thread, but can you suggest anything to those of us who are in major learning mode yet itching to get involved somehow??

You’re smarter than I am. Just never understood valuation, so never made investments using tech stocks. (If I were to have made major investments, I would have been short from day 1. Not a good form of investment.) Banks, securities, Manufacturing, commodities, metals, utilities , bonds, export, import I understand.

You mean something to buy or sell? Use ETFs but have a reason for getting in or selling short.

If you’re responding to me tx, yes, was looking for a way to get involved and get my feet wet without coming off like some sort of contrarian indicator myself.

Blano, stay with the industries that you know - retail, banks, automobiles whatever. This is (IMHO) a classic bear market rally, it will be short and vicious. Generally Bear market rallies are 5 - 10%. The rallies have a history of fading out quickly - generally preceded by low volume, lower highs.

I try not to mention individual positions for fear that if I am wrong and someone invested on my recommendation , I would cost them moneys.

To find ETFs that may suit your need google and search, it should not take more than an hour to find something that is appropriate for your comfort level. There are a lot available.

If you are not willing to do even a modicum of research, then would you just write a check out to me. :>) Investing without a plan of exit is just throwing money away.

Your thoughts are greatly appreciated, Hoz.

I’m more than willing to do lots of research, and would love to be at the point someday where investing is my “job,” or at least my mode of survival. I also wish to avoid what you say above…investing without an exit strategy.

I totally understand your hesitation re: specific positions. I just find myself a bit constrained for time at the moment, and unsure where to start. In the meantime I spend as much time reading and learning as possible, looking for that light bulb to go off in my head.

Thanks again!!

Invest? LOL. Hardly. I just used to cover tech and have some knowledge of the cycles and financing, etc. I don’t invest in anything but cash. Semiconductors and telecom really never left the bear market they entered in 2000.

YOU ARE BEING MEAN AND UNDERSTATING YOUR FEMININE INTUITION. LOL

yep, tech long term is a treadmill of new faster and different products at a lower cost..or ancillary service. difficult to overcome in this age of information.

When the little guy always gets it wrong.

Everyone gets it wrong every now and again, as a regular joe I too fall into this trap..but the strength of your hand and the fortitude of your belief build a treasure of fantastic dreams…the folks that I read here have become a trusted name in “what is so”…you just have to act on what they are saying.

chick sayin last week, get long tier ones…put the short term bottom in, if for no other reason than to help get some longs OUT. listen to her.

Hoz is a strange cat, he pegs the trade..called UCPIX bottom at 11 (its noe 17)….thats the one I remember…FXP? wild swing home run ball….if you paid attention.

things that happen here and words spoken speak volumes.