Bits Bucket And Craigslist Finds For January 30, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Home Builders Face BK… Beezers not on this list but they have to go down, at least I hope they do. Pure junk… Period.
http://www.ft.com/cms/s/0/74d5f93c-ceaa-11dc-877a-000077b07658.html
Beazer has been planning a development in my area that the neighbors have been fighting. I keep telling them not to waste their time, it ain’t gonna happen. But their lawyers keep showing up for the town meetings!
Keep fighting you do not want them building near you, it will be a big negative as you know.
Beazer’s more like Eddie Haskell, than Wally.
The neighbors are still fighting, I’m not sure why Beazer is. It would be a disaster if they started building and then filed BK. No permits have been issued yet, thankfully.
“The neighbors are still fighting, I’m not sure why Beazer is.”
Builders are programmed to build. If they don’t there is no reason for them to exist.They will keep doing it until they go BK. Just like lemmings are genetically programmed to drown en masse.
That’s not true, BTW, the ‘lemmings jumping off a cliff en masse’ thing. Based on one very staged roll of film where they drove them off a cliff. Part of popular mythology that we accept as fact, like ‘real estate is the best investment’
Are the grunions running?
Go to Wikipedia and type in “lemming” to read about the myth.
‘That’s not true, BTW, the ‘lemmings jumping off a cliff en masse’ thing. Based on one very staged roll of film where they drove them off a cliff. Part of popular mythology that we accept as fact, like ‘real estate is the best investment’’
The FBs did not jump off the cliff en masse, either. In fact, Used Home Salespeople drove them over the cliff by threatening them with lines like ‘buy now or you’ll be priced out forever,’ ‘real estate always goes up,’ ‘they aren’t making any more land in XXXX’ and ‘you need to buy a home because everyone needs a place to live.’
They have to make it look like they’re moving ahead to assure their shareholders, investors, even if they know they don’t have a snowball’s chance in hell.
You may be able to get the county to pressure them into doing other things, like restoring the land (if originally forested) if the project is abandoned.
In central florida i’ve seen some large pieces of land cleared of trees, and then the development never happens! It would be nice if the trees came back! See if the developer will agree to this….it would call their bluff. If they’re so confident the project will get done, they’d easily agree to that because they won’t ever need to do it.
Despite all of our wondrous advances in science, we still haven’t figured out how to grow a tree back to it’s 100 year old size, in a year or 2.
At least fill it with those scrub pines.
..
Beazer and Butthead built a bunch of houses here in FL; there are a few Beazer and Butthead developments north of I-4 on US 27.
They are empty, dude.
..
This matches up with what I wanted to post today. Saw this on a local Charlotte, NC forum about Beazer pulling out of the city to focus on better opportunities. Considering Charlotte’s at the top of the Case-Shiller numbers, that’s pretty ominous.
No official “real media” word on this that I could find, but people owning in the subs that are being abandoned have talked to the builder and confirmed that they’re leaving.
http://www.city-data.com/forum/charlotte/245209-beazers-gone.html
And the New York State Association of Realtors still has not released monthly sales figures for December 2007. I’ve been keeping track. I am no longer excited by year-over-year declines in median prices. The median price in Suffolk county for November 2007 was below that of November 2005!
LIL, did you see the article about the NY Fed Bank’s stats on subprime? I extracted numbers for the Town of Islip from their spreadsheet and found a little over 7,000 subprimes, with over one-third either in foreclosure or distress.
Also, LIBOR has posted the December ‘07 stats, email me if you want either set.
Frank, do you have a link?
thanks
I haven’t posted these as stories, my e-mail is editor@carbuyersnotebook.com
If you want the link for the Federal Reserve Bank of NY data, this is it: Subprime and Alt-A Mortgage Conditions in the Second District. Another page has the
Technical appendix
The excel files are 75 pages longish, but as I said above, you can pull out data for your town/county, as Danni is interested in Nassau, IIRC. The page also has data for Connecticut and New Jersey and Puerto Rico, I basically cut and pasted the Islip townships I was interested in, if anyone still wants that.
Frank,
Am I reading it right that the 3rd column represents % of all owner occupied homes in the town or is it a % of owner occupied subprime loans?
If it is the first, my town is screwed. But if 2nd that is only 8 homes.
Carrie, I’m a little cross-eyed at this point in the day so I don’t grok you entirely. The first column in blue represents the number of owner occupied units with subprime loans.
The next four columns across, left to right, represent percentages of those homes in various stages of distress. The really, really scary part is that those numbers need to be added together to give an accurate picture of subprime homes in some stage of distress. Read the technical appendix linked above to understand this part.
Meaning, in the areas that are hit worst, they are looking at 20-40% of all subprimes in that locale that are foreclosed or late to some degree.
Then there are another two columns showing percentages of ARMS that haven’t reset yet.
Looking at these numbers makes me think that in many areas, at least 50%, but more likely two-thirds of all adjustable rate mortgages will foreclose.
This is probably why those politicians you see on the tee-vee are twitching.
ISLIP should change its name to IFELL
IFELL down and went boom.
RE: Town of Islip from their spreadsheet and found a little over 7,000 subprimes, with over one-third either in foreclosure or distress.
BeanTown Glob has been running pic’s of foreclosed properties releveant to the lack of maintenance being performed by the REO management companies.
Most appear to be worn out heavily depreciated POS.
These properties would in all likelyhood incorporate a negative value as the cost to demolish due to toxic material components, aka lead paint contaminated wood surfaces, asbestos wrapped heating pipes, et. el., is less than the site worth.
As I remember Islip NY is no prize community.
The MBS holders haven’t written down squat yet.
Maybe the NAR just doesn’t care for the month of December….
Heck, January ain’t all that either.
I’m waiting for second quarter 2008 stats. That could be interesting.
I’ll just wait for 2008Q4 or even later. No hurries here.
Withhold information from people making the biggest purchase in their life. That’ll get ‘em buying.
Whatevaaaaa!
What “information” are they withholding?
You can get the income data; you know how much you make; you know what you can afford; hence, an Excel spreadsheet here or there, you can do the math.
What’s the use of the data that they may or may not provide? Timing the collapse?
Patience, grasshopper, patience.
It takes time for the NYSAR CrimeSyndicate to craft their BS press release. Skewing data is hard work.
Not what you were waiting for but I came across this the other day. 2005 percentage of NY loans that are subprime by county. I suppose this is one piece of why the greater Syracuse area (county 19 on the map) is taking its time w/the slowdown.
http://www.banking.state.ny.us/cshaltprs4bu.pdf (low %)
Warning: pdf
This is from a slide show that basically compares Buffalo and Rochester markets. If area residents go through the whole thing they may be able to glean some more usable data for their situation.
Also on a recent RealtyTrac release for 2007:
Syracuse foreclosure rates/#properties 1/643 homes
Buffalo foreclosure rates/#properties 1/332 homes
Rochester foreclosure rates/#properties 1/215 homes
UBS Writes Down 14billion, Twice Estimates. Hits just keep Coming.
“Jan. 30 (Bloomberg) — UBS AG, Europe’s largest bank by assets, reported a record loss after about $14 billion of writedowns on assets infected by subprime mortgages in the U.S.
The fourth-quarter net loss of 12.5 billion Swiss francs ($11.4 billion) was almost double what analysts surveyed by Bloomberg were estimating, and brings the total decline for the year to about 4.4 billion francs, the Zurich-based bank said today.”
The Swiss are more knee-deep in this mess, than most anybody else in the world…
Re-think investing in anything involved with them.
or maybe they are just more honest about their losses than most other EU banks?
Switzerland is like the USA in many ways…
Spared from most of the carnage of WW2, it’s reason for being, finally boiled down to a fraudy financial house of cards.
And more honest than US banks too maybe??
But I was told UBS was one of the conservative banks.
I sometimes get the feeling that the global banks have started blaming the convenient scapegoat for any and all of their losses. Most of these banks are heavily into stock market arbitrage using OPM. Obviously there will be losses as markets show volatility and continue to tank. So blame the US subprime! If we (the US) really sucked in so much of wealth from all other countries, we are really amazing.
History only ever remembers the 1st protagonist…
Who was the 2nd person after Columbus, to independently sail to the new world?
Can you name him, without looking it up?
Amerigo Vespucci. Without looking it up.
How about the 2nd person to reach the North Pole?
How about the 2nd person to fly an airplane?
Why do we celebrate Columbus Day, and not Vespucci Day?
Because he was working for the Portuguese?
Forgot to add ,”at the end of his career.” Some say Vespucci never went anywhere and he usurped the legacy of John Cabot.
“Why do we celebrate Columbus Day, and not Vespucci Day?”
We did name a couple of continents after the dude.
A few years ago, we were at West Point, and the cemetery there is amazing…
One of the more interesting tombstones is above Thomas Selfridge’s remains. It has a stylized propeller of the era and is awfully neat.
We only really remember him, because he was the 1st person to die in an airplane crash.
Name the 2nd person to die in such a manner?
mafungo rodriguez?
LOL
I think that some crazy Norsemen actually got there first. But they don’t count in the annals of history as they were filthy Odin worshipping pagans.
Patiently awaiting Ragnarok….
Brendan, the Irishman, got there before the Norsemen.
It’s a nice tale, but so was Beowulf. Brendan left no structures. The Vikes did. Not saying it wasn’t possible though.
“My ancestors didn’t come over on the Mayflower, but they met the boat.”
- Will Rogers
His ancestors got here WAY before Columbus.
Hmm.. let’s see, Lief Eriksson before Columbus. The Chinese admiral before Lief Eriksson. Who after Columbus?
Chinese admiral before Lief Eriksson.
What Chinese admiral? Got a link?
Chung King. He also invented packaged noodles. Sorry, no link.
See 1491 - awesome read
http://www.amazon.com/1421-Year-China-Discovered-America/dp/006054094X/ref=pd_bbs_2?ie=UTF8&s=books&qid=1201714416&sr=8-2
today the Dutch central bank president is openly blaming the US ratings agencies. After hearing similar comments from high level politicians in France and Germany I wouldn’t be surprised if a big EU lawsuit (or under-the-table settlement?) against the ratings agencies or Wall Street is in the cards. The EU central bankers and politicians were asleep at the helm, but it is always easier to blame someone else.
Been short the ratings agencies for a while. This was an obvious outcome, IMHO.
I think things couldn’t have gotten where they did without the ratings agencies. IMO, if we were to try to lay blame at ONE player in all this (and many more are guilty, of course), the ratings agencies are #1.
Another 14 billion disappears into thin air, making the remaining billions that much more scarce.
Deflation, my friends.
Promise-Sorry, Notes.
Oil is becoming more scarce too. Oil actually has value, unlike paper gains.
Inflation, my friend. At least for the essentials.
You can print more money, but getting more oil involves hard work and scarce resources with real economic value (e.g. labor and heavy machinery).
Governments are the only entity that can take a useful item, paper, and render it useless, by printing on both sides of it.
Ha! Is that original? If so, mind if I steal it?
I feel certain that he borrowed it from somebody else, so go ahead and play it forward.
I think as we start getting more EV hybrids and plug in types the price of oil plummets. Its ripe for a collapse.
Right now Toyota is #1 because their quality is good and they have fuel efficient vehicles. Over time this will translate into a BIG surplus of oil production. Should happen in the next couple years.
Not to mention people will try to move to less expensive smaller vehicles in the recession. There is a pretty big time lag before this effect begins to happen.
Seems like its about a 5 yr phenomena. That relates to the average loan length on a vehicle. Go figure.
UBS, BNP Paribas reveal fresh hits from credit crisis
UBS to take $14 bln write-off as it swings to loss; BNP sees profit down 40%
By Simon Kennedy, MarketWatch
Last update: 5:55 a.m. EST Jan. 30, 2008
http://www.marketwatch.com/news/story/ubs-bnp-paribas-report-more/story.aspx?guid=%7B4DB1FE2B%2D8222%2D4FB6%2D837A%2DB925EF0D5678%7D
Will the December Case-Schiller numbers show a double-digit decline? Based on other December statistics I think it is quite likely.
That would certainly qualify for the “another grim milestone” tag discussed yesterday.
Tousa, Florida Homebuilder, Files for Bankruptcy (Update7)
By Dawn McCarty
Jan. 29 (Bloomberg) — Tousa Inc., the homebuilder that lost 98 percent of its market value in the past year, sought bankruptcy protection as the Florida housing market’s decline deepened.
The company, based in Hollywood, Florida, listed assets of $2.3 billion and debt of $1.8 billion in a Chapter 11 petition filed today in U.S. Bankruptcy Court in Fort Lauderdale, Florida. There were 37 affiliates that also filed today.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWvHu28T7Itg
Chapter 7 will be my favorite, as we close the book on them.
Inning 4 - major homebuilder bankrupcies - is about to begin
got sunflower seeds?
Got organic walnuts?
I love when you talk dirty that way.
“Tousa, Florida Homebuilder, Files for Bankruptcy (Update7)”
Time for the trophy wife to make an exit.
Australian brokerage fails to settle transactions
http://business.smh.com.au/a-sign-all-is-not-hunkydory-behind-the-scenes/20080129-1ovn.html
remember, Australia was the first property market to crack too.
Goldman Sachs hit with fresh legal action
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3273819.ece
We are ’special’ after all.
———————
Area labeled risky for loans
Mortgage brokerage’s ranking could make it harder to borrow for a home
By MICHAEL BRAGA
michael.braga@heraldtribune.com
Countrywide Financial Corp. says Manatee, Sarasota and Charlotte counties are among the riskiest communities nationwide in which to make mortgage loans.
The nation’s largest mortgage brokerage listed the three counties, along with nearby Collier County, among 22 communities with serious mortgage problems.
The high ranking could make it even more difficult for the region to work its way out of its housing slump.—–>
http://www.heraldtribune.com/article/20080130/REALESTATE/801300503/1201
What!? No Lee County? I’m surprised. Cape Coral is an absolute disaster. Houses going for $300,000 three years ago now at $150,000. Foreclosures everywhere. Funny both counties north and south of Lee are named…but not Lee itself.
RE: Area labeled risky for loans
Mortgage brokerage’s ranking could make it harder to borrow for a home
Crooked appraiser’s fudged absorption rates, marketing times, and anything else which could be portrayed as a negative trend in their appraisal neighborhood analysis so as to mislead underwriters so the loans go thru without any red flags.
Of course they were blackmailed and coerced via the threat of withheld future business unless they did as instructed by the loan originator.
Now everybody in the communities are fooked.
Nobody to blame but the state appraisal licensing agencies who put legions of incompetant corruptables out on the street, while turning a deaf ears to the hundreds of honest and ethical appraiser’s who got flushed down the toilet for their refusal to engage in a blatant blanket of lies and subterfuge.
“Nobody to blame but the state appraisal licensing agencies who put legions of incompetant corruptables out on the street, while turning a deaf ears to the hundreds of honest and ethical appraiser’s who got flushed down the toilet for their refusal to engage in a blatant blanket of lies and subterfuge.”
HD - nicely put.
Amendment 1 passes in FL, RE agents rejoice “This will restart the market!”.
http://www.palmbeachpost.com/politics/content/state/epaper/2008/01/30/m1a_ELEX_PROP_TAX_0130.html
And, those of us without homes already in FL now get an even bigger hurdle to buying.
Nothing can save this market now, but, frankly, locking out the ONLY people who can actually reduce the inventory seems like a very stupid idea at this time.
And, of course, off to court this goes; as many (myself included) believe this is unconstitutional.
Things like this make me sort of happy. It makes me realize there are more idiots than Clownifornicators in the world. Now instead of purely hating my own state’s self-entitled greedy do-nothings, i can heap some scorn on the floridians.
Californians seem like the sanest people in the world, when you stack them up against Floridians.
(and that’s not saying much)
How does cutting taxes create a bigger hurdle to buying? I’m not from Florida and I haven’t read the bill. Are they going to increase taxes to non-current-owners to make up the difference or something?
Let’s say that Amendment 1 decreases the taxes coming in to the county by 20%. Uh oh, where can the counties make up that lost revenue? Well they can’t go after the homesteaded properties because of Amendment 1, so what’s left? Business and non-homesteaded property is what. So the values and taxes go up on those guys. Then businesses have to charge more to make up for the higher taxes. So people paying less taxes on their homesteaded property are paying more for goods and services. And buying a second home in Florida (that wouldn’t benefit under Amendment 1) - forget about that! So then the tourist industry suffers, which is vital to the Florida economy.
I’m no economist or anything, but this whole cutting property taxes when property tax revenues are down because of foreclosures seems counter-intuitive to me.
I am an economist and a Floridian, and it’s insane. All that most people heard was “less taxes”, without thinking of the flip side of the equation. Now those who don’t own homes will be screwed every which way, which makes buying even a less winning proposition. The real solution is for local governments to slim down to a sustainable size, but we all know that won’t happen.
Amendment 1 is a mistake.
“Going into the election Tuesday, the 498-word ballot summary had confused voters, particularly in Palm Beach…
…The Palm Beach County School District projects a $12.8 million loss next year.”
It sounds to me like Palm Beach schools need that money.
lol, I was thinking the same thing!
Not to worry! Gov. Crist says he will increase the school budget to make up for the property tax revenue lost.
Crist almighty, your governator might be dumber than ours…
Our school district has been facing budget shortages for years, so they closed four schools, forced a bunch of people into early retirement, put up portables and squeezed all of our kids onto the remaining campuses. They planned on selling the vacant land to developers, but they were met with such opposition from the citizens that they are still sitting on it. In a recent article in the paper, it said have lost thousands of dollars in equity. Boo freakin’ hoo.
Palm Beach County voters were confused in 2000 too.
Sounds like the Palm Beach County needs to learn how do the same with less.
Exactly! I am sitting on a bucket of downpayment money and a high credit score. But Amendment 1 won’t help me, so I am not inspired to give up my rental at half of the cost of ownership. So how will this restart the market?
The same here. I will not buy here.
I’m totally confused.
Doesn’t this Amendment 1 cap property tax increases? How would that not help new buyers?
If the current version of SOH passed constitutional muster, I see no reason why this change won’t. But you’re right, Floridians can now sell to each other until they all die off, whereas newcomers are “locked out forever.”
frankly, locking out the ONLY people who can actually reduce the inventory seems like a very stupid idea at this time.
Anyone moving around in FL is going to leave a vacant house behind. If people from other states can’t move in with a decent tax rate, this is still going to leave the same number of houses for sale. Some want to go bigger and some want to go smaller, so the averages should remain the same.
Two things I don’t believe: One, that the amendment passed and two, that McCain won the Republican primary in Florida. Both outcomes are completely absurd. When I went to the polls yesterday, there were signs all over the place for Romney, Paul and a little bit for Giuliani. Not one sign for McCain. Don’t even know of anyone who supported McCain. You’d think, if he made such a great showing here in Fla, you’d run into at least a person or two who supports him. Also weird how Crist supports McCain just before the primary.
As to the amendment, doesn’t pass the smell test. Even the local pundits were severely in doubt as to whether or not it would pass.
Hey, Governor Crist, where’s my paper ballot confirmation?
Is there any difference between John McCain and Hillary Clinton?
The NYT has endorsed these two candidates. Your choices have been determined. Choose and perish.
And the CFR continues it’s march towards the NWO.
Mcpain just another neocon that will continue bushes 3rd term.
I sort of felt the fix was in when the Tampa Tribune did the same thing with its endorsement, very strategically timed. No, not much difference between McCain and Clinton.
or - choose and serve your Chinese master.
“Is there any difference between John McCain and Hillary Clinton?”
90% probability these will be the two we have to choose from for the next President. Hold your nose and swallow the bitter pill. No difference btween the two- they are both Centrist one slightly to left other slighty to right.
Prediction: if these two are the nominiees it will be a close race down to the wire some thing like the Kennedy-Nixon race in 1960 or the Hubert Humphery- Nixon race in 1968. Or Gore-Bush in 2000. I may actually throw my vote to Ron Paul as a gesture of disgust.
Not much difference, but three things that I can list:
1) If McCain is elected, we’ll stay and finish what was started in Iraq. Has anyone noticed that this isn’t such a big issue in the Dems campaign? The reason is we’re winning.
2) If McCain gets elected the Senate looses a huge pain in the a$$ and AZ gets to elect a new one.
3) If Hillary gets elected we get to listen to Bill for another 4 years. I can’t wait for that! If she looses, they fade into the sunset for the rest of their lives (cept for NY folks)
1) If McCain is elected, we’ll stay and finish what was started in Iraq. Has anyone noticed that this isn’t such a big issue in the Dems campaign? The reason is we’re winning.
Winning??
What are we even fighting for?
If McCain gets elected he’ll wish he was back in North Vietnam being tortured after having to deal with Iraq, the mortgage crisis, the impending stock market crash, the recession/depression, the falling dollar, the increasingly pessimistic global view of the U.S., etc., etc., etc. And really it’s only fair that the Republicans clean up after themselves.
With a gun at my head to choose between those two, I’d be forced to vote McCain……..crossing my fingers he chooses a competent VP, given his penchant for going emotionally airborne. Likely to blow out his brain.
Who here the other day mentioned his less-than-presidential “Bomb, bomb, bomb Iran” ditty? His oppoent need only buy a handful of prime-time slots and air the obscenity.
“With a gun at my head to choose between those two…”
I’d take the bullet.
I have some land (bought at pre-bubble prices with cash) in Florida on which I wanted to build a 2nd/retirement home. It’s 20 acres in Orange County outside of any development, HOA and CC&R-free, physically adjacent to Walt Disney World.
Those plans are all but dead now, because there’s effectively no inflation protection for me on the property tax. The assessors can simply “value” the property 10% higher and higher each year . (And they will, because they need to get money from *somewhere*)
NOBODY’s going to “snowbird” to Florida any more if your *property tax* will exceed rents in most other markets.
The millage rate where I am was 1800. During the bubble we didn’t consider building (in addition to the $300/sqft rates we were quoted to build) because if they valued the home at some bubbled-up price, we’d pay more in property tax than we could RENT a home a couple of blocks away! It would be cheaper to rent a home 6 months/year during the winters than to pay PROPERTY TAX on a home.
(Of course the builders we talked to in 2005 keep calling us saying they can build now for half of what they quoted then!)
And since many residents will be paying very little taxes, what remaining services they have in FL will go to hell. Crime’s already shooting up in Central FL. It’ll be unbearable soon.
If Florida has no interest for me–someone who wasn’t depending on financing to build a second home–then I can’t imagine that *ANYONE* would be interested in relocating there.
The original initiative on the ballot removed all inflation protection in exchange for a one-time discount. Even though the discount was substantial, it was still a stupid bet.
Now, it looks like they’ve eliminated inflation protection for second homes, businesses, and out-of-state homeowners only. That’s just as dumb. (Also, it will drive rents up, as the owners of the rental property will face massive property tax increases. But renters can easily pack up and leave the state as easily as they can move across town.)
“(Also, it will drive rents up, as the owners of the rental property will face massive property tax increases. But renters can easily pack up and leave the state as easily as they can move across town.)”
I think the second sentence will end up invalidating the first. People pay rent with what’s in their wallet and we (Florida) do not have the percentage of high-paying jobs required to support a noticeable increase in rents. Short-term, foreigners who can live with the visa hassles might find winter rentals a good deal, but for year-round rent, I don’t think landlords will be able to raise much if any. The amount of vacant for-rent property on the market here is huge and growing. The accidental landlords more often than not will now have even fewer prospective buyers to take the properties off their hands.
Top companies shift into recession mode.
http://www.ft.com/cms/s/0/cd9390d6-ced5-11dc-877a-000077b07658.html
“A leading US management consultant said that during the past few months, his firm had been “deluged” with calls from smaller, domestically focused companies asking for advice on how to deal with a recession.
“They all want to know what to cut and what to hold back if the economy hits the buffers,” he said.”
This is very true in my business. Upper management is always trying to squeeze a little more out of the troops and the hiring freeze makes everyone make do with what they’ve got.
I’ve always felt most companies have 20% more people than the need to do the jobs. It’s really a waste, because people are in jobs for which they don’t have the skills, education, or experience.
Perfect example - people spending all day at the water cooler talking about how “housing always goes up”.
I remember the spring of 1990 (around March) when the company where I worked shifted into recession mode. There was lots of anxiety in the work place, plenty of closed door meetings with the bosses, and a general feeling that anyone’s neck could be on the line at any given moment going forward. All told, it was not a happy time.
So, we were watching the News Hour on PBS and blowhard congressmen and senators were being interviewed about the $600 fistful stimulus program, and i’ve never seen such palatable fear, as I did on their faces, yesterday.
The tells were painfully obvious and body tics must have been hidden beneath their clothes.
One know nothing leader said, we need this stimulus package to get Americans to start buying houses again.
On $600?
The delusions runs deep in D.C.
I think the fear on their faces is “We need to look like we’re doing something, but there’s really nothing we can do.”
The stimulus package lets them all say they’re trying, even though anyone with an ounce of common sense knows it’s Shadow Puppet Theater.
(The Senate has yet to pass a stimulus bill, either.)
you can still buy houses with $600 or less downpayment in Europe - but maybe that wasn’t what they have in mind …
$600 would buy you 600 houses in Cleveland.
that is nice to know in case the Dutch mortgage brokers start requiring downpayments; there is always somewhere left to speculate
What a great idea! Cleveland would be a very nice city if all the homes were bought up. All Cleveland needs is:
1) Money to pay for a proper police staff
2) Money to pay for infrastructure replacement
3) People
It used to be one of the wealthiest cities in the US. 125 years ago, Euclid Avenue in Cleveland was the most expensive street in America.
Early 1900’s saying…
“As rich as an Argentinian”
Things Change
“All Cleveland needs is:
1) Money to pay for a proper police staff
2) Money to pay for infrastructure replacement”
It’s strange how all these problems can be solved with worthless fiat paper money.
Here in the Empire, we had everybody driving fiats, until we realized how unreliable they can be.
Emperor Norton II, of the Inland Empire, Protector of Mexico & adjacents.
Right!
Cleveland would be a lovely city if there was any reason to be there. Like a job.
Buy a house with $600? NO. The $300-1800 is smoke screen to hide upping the GSE and FHA loan limits to $700K,
Every time there has been talk of upping the loan limit, the populations of 47 states start yelling NO!!!!! with CA and NY and HI screaming YES!!!!
SO, they hide it under $150 billion in hand outs.
“SO, they hide it under $150 billion in hand outs.”
Yes - makes me sick.
(One know nothing leader said, we need this stimulus package to get Americans to start buying houses again. On $600?)
Perhaps he is hoping the $600 will be the downpayment on his $800,000, 1,000-square-foot suburban DC townhouse if he is not re-elected and needs to sell.
The delusions runs deep in D.C.
The got there on their bucks not their brains.
LOL! Ebay seems to think it will get its hands on some of that $600, so much so, it has timed its completely insane new policies to coincide with when those rebates will be hitting the mailboxes. I haven’t done business there in a number of months, but got the email yesterday and went over to the Ebay discussion boards to gauge the reaction. Whoooo-eee! Nothing like taking a dump on your customers that pay the freight! No wonder Whitman is walking away fast. I knew there was going to be trouble when Cobb, the COO, started using Wall Street lingo like “tranche” to describe selling levels. It rather demonstrated a complete ignorance of both the Wall Street term AND his customer base. Whew, someone really wants that company to tank and I think they’ve finally done it. On the upside, there is now a real opportunity for another company to compete, provided they do everything that made Ebay successful in the past.
I think the “auction” format was an interesting new avenue for awhile, but Americans are burned out on shopping.
The problem is the morons that bid the prices over what the items can be bought at in local stores. The same people who ran up the housing prices so much…..
Also the Chinese-made junk knockoffs.
I hate ebay.
Ebay has lost it. How did you like the new FB policy? You can’t give a buyer negative FB now only positive. I didn’t care for any of their other new FB policies either. We have only left one bad feedback (for a buyer) I prefer to deal with things in ways other than bad feedback. It still pisses me off.
Way back when, I used to buy and resell Navajo rugs on eBay, just as a hobby. Back then it seemed more of a free market than now (around 1997 or so).
The early years on ebay were fun but now… fuggetaboutit
They forgot their base which was mom pop garage sale small town folks selling stuff, now it is all corporate.
I track foreclosures very closely in certain areas of Sacramento and get lists of defaults as they happen. Last night I saw evidence there are many investors in the newer bubbliest subdivisions with some real money into their purchases (though nothing over 10% down) that are now defaulting. They have paid 18-24 months of negative debt service on the properties. Now, these people are capitulating and letting their homes go back to the lender. In 4-6 months, these houses will be listed for sale, just in time for the spring selling season.
This is a wholesale change in attitude for the hardiest FIB’s (F’d Investment Buyers). It will drive a new round of REO’s to stoke the raging bonfire of surplus houses. I estimate 15% of the houses in certain subdivisions are already lender owned (well, in reality, they are teachers’ pension fund owned). Add another 10% to the existing inventory and prices will continue dropping through 2008. Inventory will get to even more overwhelming levels for the lenders.
Soon, the neighboring owner occupied FB’s will be processing the information from the 60 minutes piece last weekend, realizing if they walk away, they cancel $200,000 in negative net worth and lower their housing costs by $3,000/month. It appears to be a case of fundamental economics. Nothing will deny it now.
In some subdivisions / towns - you’re probably right. Tehy will look like old western ghost towns. I remember visiting places like Silverton, Co in the 70’s. A few old people still living there but most of the houses empty and boarded up. Anyone could move in but who would want to - no jobs and the houses were unmaintained and neglected.
http://tinyurl.com/37ckxy
Roger, here’s what you get in the new Silverton. It’s been discovered, new ski area. I used to do a lot of mtn biking and climbing around there in the summers, beautiful place, you could buy any house in town for 30k or less. Have relatives there, they’re starting to get annoyed, missing the old town.
That is a beautiful house, IMHO. And the scenery is awesome. Still, too expensive.
Remember when everyone thought the “smart money” got out before the crash?
Half a measure half a measure,
Half a measure onward,
All in the valley of Debt
Rode the $600:
‘Forward, the Light Brigade!
Charge for the i-phone he said:
Into the valley of Debt
Rode the $600.
Into the Valley of Death
Into the Mouth of Heloc
Rode the $600
that measly 600 is not going for bills or a new i phone etc, it is going to my strike fund.
There will be other strikes ahead, ’sides the writers strike.
When will the mass of people rise up against the mega huge retirement/ get outa here CEo pkgs? And obscene bonuses too.?
Collection agencies to the left of me,
Collection agencies to the right of me.
perp walks coming:
The Federal Bureau of Investigation has opened criminal inquiries into 14 companies as part of a wide-ranging investigation of the troubled mortgage industry, F.B.I. officials said Tuesday.
The F.B.I. said it was looking into possible accounting fraud, insider trading or other violations in connection with loans made to borrowers with weak, or subprime, credit.
http://tinyurl.com/2jnp8u
There will be a few show trials. Then 99% of the scum will get off through statue of limitations. There were still thousands upon thousands of criminals from the last S&L bust there were never prosecuted. I was so hoping that Casey would a show trial. But looks like it won’t happen.
The outcome of this should be that SEC or some other regulatory body administer oversight of NAR in consideration of NAR members reckless propensity to offer investment advice.
Casey will be a high-profile witness for the prosecution. That boy ain’t bright. I think there’s more to the story than a naive young man running out and buying $2.2 million in RE using shady loans. I think he had “helpers”.
Casey sent me a pump-and-dump email regarding goldspring and also told me that I absolutely should be investing in gold. I’m worried it’s a shoeshine boy moment and now’s the time to sell.
Penny mining stocks are where it’s at…
Thanks for the link watcher.
“Mortgage companies and Wall Street banks have said they are cooperating with numerous federal and state investigations. The firms have also sued each other and have been accused of various infractions by investors and borrowers in numerous cases.”
The hyenas now turn on each other as the frenzy begins.
The hyenas now turn on each other as the frenzy begins.
Would be nice, but unlikely. After the dotcom bust, lots of shareholder lawsuits, Enron lawsuits, et. al. A few went to jail, most suits were settled for pennies, if that. The Supremes just ruled against the Enron suits. Spitzer made his name making the ibanks pay some fines–Purcell, then head of Morgan Stanley was quoted basically saying it amounted to peanuts, and a humiliated Spitzer slapped Morgan with a few extra fines. Purcell was eventually farmed out, and Spitzer became governor. Meeker, the head dotcom cheerleader, still employed at Morgan. Same old, same old.
What will the Fed’s move be today?
Futures markets are placing a 77 percent chance on a rate cut of half a percentage point or more.
link
75 basis points. The Fed has gone insane. What we needed were considered rate cuts that reflect the actual situation and not a “Fed panic”. Now, we are going to get more inflation. It is quite apparent that the current Fed inflation model under reports the actual number. I’m not rich. I worked very hard to get the money I have. Now, it will melt away under a Fed-induced hyper-inflation. To address inflation the Fed will do two things: 1) a recession anyway (but after the election year), 2) change the inflation model to under report the higher levels of inflation.
My question: Why is my life and wealth dependent upon someone -The Fed - that has no obligation to do the right thing by me?
Roidy
1913 was a bad year that just won’t end.
My guess…………0 or .25.
the ADP number puts real doubt on a .50 and wipes out the chance of a .75. JMHO
I’m thinking 0 or .25 also.
You guys must think BB’s purpose is to show Wall Street who is boss. I can’t say it is impossible, but it seems doubtful to me, especially given the underlying systemic risks (hedge funds, derivatives contracts, etc) which might fuel the financial market equivalent of a thermonuclear explosion if the right spark triggered it.
–
“You guys must think BB’s purpose is to show Wall Street who is boss.”
LOL! Everyone, especially, Burn-ass-ke, should know who the boss is. Who got Burn-ass-ke the job in the first place?
He is in a real hot seat with fire underneath. And his hands ties behind his back. As Reagan said, smart people in America don’t work for the govt.
Jas
It wasn’t panic. Look at speech calendar.
They’d better be careful…………….a run on the dollar is quite on the cards if they go to excess.
Sorry, here’s a link.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=w&w=1&t=l&a=2
I’m having a hard time deciding what to do with Feb calls. Instinct says to hold on and take the post-fed ride. The devil on the other shoulder says sell half before the announcement and take a free ride with the rest. Devil probably wins.
Devil won. Dumping the whole position pre-fed.
Same here - GDP numbers aren’t warm and fuzzy. Suspect the next leg down is close by.
The devil himself, doesn’t know the details.
Wouldn’t weak GDP numbers incline the Fed to cut at least 50bps? Why sell your calls?
Why? Take a look at that ascending triangle on the S&P.
I’ve gone completely nuts and bought more puts, increasing my bets as the financials have rallied in some cases 50% over the last week. Some of these stocks are at multi-month highs. It’s as if all the bad news has been baked in and the rate cuts are going to let the banks refi into glory!
I don’t buy it.
My guess is the devil is pretty stoked over the rash of new souls coming his way because of all this.
Where can one go to see this ascending triangle??
With you on the financials. Suspect SKF might bounce through the 50 DMA near term. Looking at possibly taking a small position once the fed speaks.
My postions are usually closed in 1 - 3 days. Scalper of sorts - no long term trades here.
FB –
What is the meaning of “SKF might bounce through the 50 DMA near term”? I established a small psn yesterday and would like to know what you mean. TIA.
MrBubble
“Where can one go to see this ascending triangle??”
How about a gambler’s annoynmous meeting? Puts, calls, outguessing the Fed? Reading tarrot cards is right up there with charts and graphs.
What do you reckon the odds of Cruella D’Clinton grabbing the reigns of power, are?
50 DMA = 50 day moving average. http://finance.yahoo.com/q/ta?s=SKF&t=3m&l=on&z=m&q=l&p=m50&a=&c=
Sold my position for a small gain.
Thanks.
Tripled up at 96ish. We’ll see how that plays out.
–
I want Benny to show courage and do 75. 50 means that he is a wimp. 25 and he gets blamed for Scam Market decline. He is in a hot seat and his ass is on fire; hence, Burn-ass-ke.
Jas
In a rare attempt at humor, Jas pulls out all the stops…
Here’s the first set of scores from the judges:
4.2, 4.3, 4.1, 4.4, 3.9, 4.5
Yours gets a 5, Lad.
Was the 3.9 from the Chinese judge?
Naah, dude, that was the Indian ABCD who dislikes Jas.
Look, I just don’t believe that most people “get it” about the Fed and it’s actions. Think Greenspan’s “conundrum”. That Fed was fooling around taking actions on interest rates, etc. when they had no idea what the end result would be. This was true then, it was true in the 1920’s and 1930’s, it is true today. Sometimes what the Fed does turns out good. Sometimes it turns out bad. It never turns out as planned.
They do things that they don’t understand. All that happens is they get criticized and maybe go “spend time with their family”. We get unemployment, depressions, asset and stock bubbles.
We get the sh!tty end of the stick because the Fed doesn’t know what it is doing. If it did, we could have avoided all of the 1930’s. BTW, the Great Depression had a whole lot to do with WWII.
Roidy
25 basis points. BB might like to cut more, but I think he’s gonna make an appearance of not letting the financial markets push him around.
Plus 100 points in a week is a lot..
Wish you had been right bluprint.
“Barton Biggs has some offbeat advice for the rich: Insure yourself against war and disaster by buying a remote farm or ranch and stocking it with`seed, fertilizer, canned food, wine, medicine, clothes, etc.”
“Biggs is no paranoid survivalist. He was chief global strategist at Morgan Stanley before leaving in 2003 to form hedge fund Traxis Partners. He doesn’t lock and load until the last page of this smart look at how World War II warped share prices, gutted wealth and remains a warning to investors. His message: Listen to markets, learn from history and prepare for the worst.”
“Mankind endures an episode of great wealth destruction at least once every century, Biggs reminds us. So the wealthy should prepare to ride out a disaster, be it a tsunami, a market meltdown or Islamic terrorists with a dirty bomb.”
“The rich get complacent, assuming they will have time to extricate themselves and their wealth” when trouble comes, Biggs says. The rich are mistaken, as the Holocaust proves.”
“Events move much faster than anyone expects,” he says, and the barbarians are on top of you before you can escape.”
http://www.bloomberg.com/apps/news?pid=20601088&sid=aImBVle3OMyo&refer=home
Remote ranch or farm- sounds romantic.
Remote where- and how will they get water to grow their crops? The places in the US where you can depend on rainfall is limited, and does not include for example the central valley of Cali or the Great Plains. Or does he expect free irrigation from all the upstream riparian interests, not to mention maintainers of the dams?
How will they maintain their animals until the big event comes down? Because I’m assuming animals will be needed to pull the plows.
How will they keep pests of all kinds from their crops? How will they learn how to raise crops, how much water to expect, how much to eat / trade, how much to feed your livestock, how much to keep for seed…
Well said. How does this aging, supersize me, McNation adapt to actually pulling its own weight? I was watching “There Will Be Blood” yesterday and wondering if I could have made it in those times. Emphatic no.
Remote ranch or farm- sounds romantic.
Remote is usually more scary than romantic. One remote farm in the southern part of our county in Ohio had two guys murdered, their bodies sprinkled with lime and buried in a hole in the outhouse. Drug dealers love “remote” areas.
Fargo out, man.
Remote? How smart will that look when gas is 10 bucks a gallon? What if you need a part for your tractor, or some tools, and a drive to town costs you several hundred dollars? And while richie rich may be able to grow his own food (doubtful), good luck growing your own antibiotics. A simple sinus infection could put you out of commission and unable to harvest your crop. And what if you need something more serious, like insulin or heart medication?
In the great depression there were soup lines IN THE CITIES. There were no soup kitchens out in the middle of nowhere. People have this idea that farmers had plenty of food and just had no money, this was definitely not the case.
There’s a reason people throughout history have grouped together in cities, rather than trying to do everything themselves in isolation…
For an account of life during the Great Depression on a remote farm/ranch, read “The Ozark Clan of Elkhead Creek” - on Amazon. (Disclaimer: my dad wrote it, but proceeds go to the local Humane Society.)
“A simple sinus infection could put you out of commission and unable to harvest your crop.”
I helped a womanw/a 100ish acre with her chickens a few months ago. She was days away from surgery before the pain got overwhelming. Prior to asking us to drive the fowl north to be slaughtered other farmer friends had filled in but mostly she did the work despite the pain because there was no one else to do it. True grit. Btw, this woman is widowed and in her 60s. Low key and sweet but obviously as tough as nails.
It can be done….
Remote’s easy in southern Oregon….your only competition is the Mexican druglords plethora of grows, and the odd cougar.
Can’t forget the wine!
Somehow I just can’t picture this guy in some remote farmhouse canning beans.
“Events move much faster than anyone expects,’’ he says, and the barbarians are on top of you before you can escape.’’
So true! A businessman acquaintance of mine in Kenya was very, very rich. Suddenly riots started and they are pretty much ruined now.
I don’t know why, but when I read quotes like this from guys Biggs I tend to start cheering for the barbarians.
Rome deserved to fall.
–
I gave the same advice to a wealthy acquaintance in Silly.con Valley in 1999. As I said, I am always early.
Jas
Jas,
Are you really Ted Bell, from the Phil Hendrie show?
Emperor, do you know the Lad?
We are acquainted, yes.
LOL
I’m thinking of all the people I know who are not rich but who turn up their nose at the idea of sweat or dirt. Picturing them in a farm environment is quite a howl. Might be worth sticking around and watching if that unfolds.
mortgage apps surge:
NEW YORK (Reuters) - Applications for home mortgages jumped to their highest level in nearly four years as low interest rates led more homeowners to seek refinancing, according to data from an industry group on Wednesday.
http://biz.yahoo.com/rb/080130/usa_economy_mortgages.html?.v=1
Notice it’s all refinancing - not new purchases.
Was refinancing the “plan” all along? Get people out of ARMS and into Fixed.
I don’t like these #s b/c people might think the “plan” is working.
I have 5.50% APR fixed; at what point should I refi?
Yup, last chance to hit the ol’ ATM.
Wonder how many of them have their heads above water?
I see this as yet ANOTHER last chance for some FBs to get out of it. Will they, or will they hit the ATM?
I think there’s going to be a big gap between the number of refi apps and the actual number of refi loans. I’m betting only 20-25% will even qualify in the end.
THis is really meaningless by itself; the real factoid is how many of these are approved.
Because if a single individual gets denied for one mortgage, won’t they try another lender, then another, then another, resulting in multiple applications per individual?
credit scores falling with each application?
At this point in the game, why would they care about their credit score?
Why are all jobs considered equal on Wall Street?
Jobs are important because they allow people to spend. SO, we get a jobs report showing that $40-50K construction jobs are going away, being replaced with $20K a year service jobs.
This is seen as good because at least people have jobs?
Why not look at total value of real estate transactions, take 8% of that, and subtract that from used house sales poeple, appraiser, and mortgage broker income? That is off more than 50%. How many jobs does that translate too?
It is not good that the only jobs are low paying service jobs… IMO. But Wall Street sees all jobs as equal when viewing the jobs reports.
They said yesterday Citi Group could lay off up to 20k this year. I heard 5 or 6 other companies also with layoffs in the thousands. Soon we’re going to run out of 8 buck an hour service jobs.
300 pilots retiring tomorrow.
And from one airline alone, who knows about the others.
They are protecting their pensions based on the stock mkt
and getting out now. That new FAA improved retire at 65 was 60, will not help. Maybe just the young pilots under 54.
This market affects everyone. Ones we don’t even think about.
Right on Darrell. Very little talk about how the “new jobs” are at a poverty income levels .
OOOOOOP’s
U.S. GDP slows to 0.6% growth in fourth quarter.
WASHINGTON (MarketWatch) - The U.S. economy slowed sharply in the fourth quarter, growing at a 0.6% annual rate, the weakest growth since the economy was pulling out of recession in 2002, the Commerce Department reported Wednesday. The growth rate was lower than the 1.1% expected by economists.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B8BEE8D0B%2D1413%2D4B5B%2D8631%2D98EF7FC8330F%7D&siteid=mktw
So 0.75 it is then!
Maybe. They are setting up something; Spoos popped and gold and yen down. When they move all these things in conjunction look for a bigger cut.
Wouldn’t gold being down be a signal of a smaller cut?
That’s my thinking too. Everyone and their brother is calling for another .50-.75, and that alone makes me stop and think. It’s early in the year, and Boom Boom must realize that there is a closet full of shoes hurtling through space right now.
I’m watching CNBC, they’re killing the US dollar, no one cares. I hate this. Also I rent, I hate that too. It isn’t like renting in my area is a real bargain. I hate that the Fed seems to be the market’s bitch. No inflation? Really, really Ben?
I’m pretty depressed. I think they’re going to find a way to keep on inflating this thing. I have yet to hear someone say “well what happens when someone who doesn’t already own a house wants to buy a house.” They seem to think it’s going to be OK to keep all the generations that come after the current house owning generation from ever owning a home.
My husband and I make over 250k a year. Yes we could buy a place for 500k, but do we want to? The houses for that price point are a piece of crap, they’re terrible. We looked at a house yesterday for sale for 799000. That’s beyond I’d feel comfortable spending on a house (yes it’s about 3xs our income but we need to save for retirement, we need to make sure we can provide for our parents in their old age). These are houses that 10 years ago would have been sold to secretaries, nice homes in good stable communities. Places I’d be proud to own a house in.
Seriously do lots of people make more than a quarter mill a year in the Philadelphia area?
Christ I hate this. I hate all the idiots who bought more than they can afford. And honestly I want my pound of flesh but I keep on being told that they were victims? Victims? It isn’t like I can deduct my rent.
Asshats.
Only in the US could someone who makes a quarter million a year complain so loudly. I didn’t see this much self pity on this blog when it was a handful of bitter renters, house prices were shooting through the roof and trolls screamed at us all day.
Yea, well you also didn’t spend all of your 20s working for 30k a year, 100hours a week when all of your friends were making 100k+ only to get out and still live like you did in college.
We have 200k+ in student loans (that’s 2000 a month in payments), we drive old cars, we don’t want to start a family while we’re living in 800 sf. And I keep on being told “oh just buy it will work itself out.”
even with the student loan payments you are still clearing a nice chunk of change each month.
save your money and wait it out like the rest of us
Many of us made $30K a year in our 20’s, and still live like we’re in college. What’s the freakin’ big deal?
My couch cost $60. I was horrified that new ones cost $5,000. That’s my annual food cost (and I’m a foodie, incidentally. I make everything from scratch including my own stock!)
Hey, interesting about food. I make almost all from scratch - except bread - and should really calculate my annual food cost. Just started to make my own stock.
Being from the old country I am often surprised by the expensive ready made stuff people buy. Wastes money. Not good for you. And often many ingredients made in China. Like breadcrumbs. Stabilizers, preservatives, etc. imported. Now breadcrumbs are darn easy to make. Just pound on some dry bread until it breaks. Freeze the extra.
Maybe we should exhange recipes?
Mrs. Uptick
That sounds awful. In my twenties, I worked on a farm for $4/hr 40 hr/week and went to college. Didn’t take out “loans”. $200K in ed loans is unimaginable! For that you get to drive an old car, like me.
What`s wrong with old cars?
‘Start’ your family, don’t let finances stop you. That is foolish!
PoodlePoodle
Am I correct in assuming all that extra money is being socked away? If so you’ll reap those benefits eventually hang in there!
In the old days (early 80s) my BFs BIL was a Wang VP. Until the last promotion he lived in a trailer in NH, not in MA where he worked. Even after the promotion he decided to buy a house in Merrimac, NH and commute. It was not that big a home (maybe 1500 sq ft) but it was just fine for 2 young DINKs. (BTW wife worked for a bank and I don’t mean as a teller) They also had a very modest little cottage off the ME coast just for fun. So my point is, in the old days achievement did not always equal in your face spending.
I’m wondering if your mood comes from friends who don’t credit you for your achievements because you don’t have the material symbolism. In the end, you and yours will be the ones living with the results of your decisions. Maybe you just need to keep your eye on the ball instead of letting their priorities derail you.
Most of my friends have never made more than $20k a year and live simple lives worshiping the wilderness, and i’d much rather be surrounded by them, than the $250k a year crowd, thank you very much…
but alad think of the fancy cars and sub zero appliances they have and we don’t.
i am more impressed by the people that have real money buy you would never know it because they do not flaunt it
my wife and i have several friends with major bucks but are not the mcmansion gluttonous types, just regular people
Most of the McMansion, gluttonous types are up to their eyeballs in debt. It’s the people living small that have all the money. Two guys I knew in IT, one has collector cars and can barely pay mortgage, the other lost a girl and blew his brains out (RIP), but left $200,000 to his family, and he was 31.
Hopefully you’ll never get sick then.
I managed to make a wee bit more than $20k a year, before I retired.
A friend from high school did a few years of college, quit, went to Yellowstone NP, married a nice gal, and to this day still lives and works in the park (30 yrs).
I always admired that kind of life.
Simplicity is a gift.
Simplicity is a choice.
my sentiments exactly ben
250k plus yearly income in philly?
cry me a river
maybe that person should read the foreclosure pets story from last night. We make that much too in some years and more in others and I make damn sure I get rid of most of it. I don’t want or need that kind of money. It’s a game to me to take it from the system and redistribute it.
yes tx-chick
animals are being abandoned by these lowlives
just another vicitm in all this greed
The plight of the pets gets to me too.
In years where we’ve done well, we would donate to no-kill animal shelters and rescue groups. We considered it better spent that way.
I had something pretty mean written about how we all had the same chance to take classes that would lead to higher paying jobs.
I didn’t. You’ve made your choices in life.
If yyou were really smart you could have figured out how to take all those classes without going into debt. We did. And we are happy with our choices in life.
The debt for college thing is as haywire as the housing market. It’s a drumbeat in our society that you have to go to college to be successful. My dad makes 120k a year and never finished high school (got a GED long afterwards). Opportunity cost of college can sometimes be too great to overcome. For example, say you spend 150k and 11 years to become a doctor making 250k solo. I go to work after 4 years of community college and working a job + college emerge with 20k of deb. I go to work in 4 years making around 40k, which increases in 5 years to 70k. I’ve made 620K, and have the student loans paid off before the doctor even gets out of college where they probably won’t make 250 for a year or 2 anyways. If I was able to save 25 percent of my salary each year (that’s typically what we save at our house so it can be done) and got a historically accurate market rate return of 12 percent then I could have 334K in savings by the time the doctor graduates. The doctor would have a hell of a time trying to catch up with the interest compounding on that 334k.
I’m all for college, but the debt cycle that it’s trapping too many in is unbearable in my opinion.
I had something pretty mean written about how we all had the same chance to take classes that would lead to higher paying jobs.
You’ve made your choices in life.
Wow… you’re griping that you can’t afford to buy a house worthy of your $250K income because your family has over $200K in student loans from medical school. Then you have the audacity to state “You’ve made your choices in life.”? I could tell you the same thing… you chose to go to med school and become a doctor, knowing you would spend your 20’s working insane hours and have school loan debt… that was your sacrifice. Get over it. I’m sure in your 40’s you will have an affluent lifestyle and live in the home of your choice.
Also, do you really think the disdain for your post on this board is due to envy of your income? I’ll give you a clue. It’s not. It’s the sense of entitlement you have. My family made over $140K last year and we’re in our early 30’s. We’re both college educated and have paid off our loans. Trust me when I say I’m not envious of your job, income, or debt load. I could see a 20% increase in pay by working in Boston instead of Southeastern Mass. I choose not to make more money so that I can be close to home, spend time with my wife and children, and have more time to focus on my tech startup. You’re absolutely right about making choices in life. I’ve made mine and I wouldn’t change them for anything (well, maybe I would have exercised those stock options in 2001)… Can you say the same?
yes, a bit unrealistic; Dutch people who make at least 5 times less a year look at homes that are even more expensive. I don’t think most of them feel comfortable with that, but many still think they have to buy now or be priced out forever. Most of them are shut out of the rental market, so they cannot choose to wait and rent for a few years either.
I cannot think of an English language phrase that annoys me more than “start a family.”
Unless it’s “our home”.
Where’s NYC boy? I may need to start drinking in the morning with ya, bud
Would you prefer sprog?
We’d like to have a few sprogs, perhaps a garden.
Yea, we’d like that. Why is that wrong?
No, my preferred term is “crotch loaf.”
Put your husband under some truth serum and ask if “we’d” like that?
I’ve gotta stop now before I get tossed.
Hahah. I like crotch loaf (I wrote scotch first, scotch loaf?).
There is nothing wrong with starting a family Poodle. Or having a garden as well. Some people just hate the concept of family for reasons that escape me. I certainly get down on the human experience at times but I don’t think it is worthwhile to abandon it to the wild kingdom.
And there’s nothing wrong with starting a poodle family, either.
Seriously I’m not sure I understand your overly snide comment.
We should be happy we’re priced out of the market? Should we run out and buy a place for 700k+? We should commit financial suicide? We should help keep this bubble alive? We should just default on my student loans?
What, or is this just tired class warfare.
My husband and I make more than most people so we should just be quiet.
This bubble hit us just as hard as everyone else. We have massive debts, we get no tax deductions, we can’t afford to buy, we have a tiny apartment in a violent city so our rent is fairly high because it is in a safer part of the city.
Yea I know other people have it worse and it sucks. But just because we make more doesn’t mean it doesn’t also suck for us.
I’d like to buy a house, yes. Why? I don’t know it is one of the only deductions I get. I’m part of a large immigrant family who will come and stay with us in our 1br for months at a time despite our lack of space. I like them but not so much I like waking up to them on my floor/couch/bed/recliner for 30 days and nights. I’m also responsible for them in their old age.
We make a honest income, one I admit few make. We’d like to buy honestly and not be price out by liars and fools who thought they should buy a 500k house on 40k a year.
yes it sucks; but you are very well off compared to many others in the housing market, and if you hang on for a few years I think your position looks even better.
I was kind-of priced out 7 years ago; still waiting to be able to buy a decent home again, which could take many more years because I live in Europe.
Bah. I prefer self pity.
We’ve been priced out for 9 years since our incomes went from $6/h to where they are now over just a few years. No chance to save since we were always in a big city.
Anywho. Need to get going.
I’ll leave the “class baiting” to the rest of you. “OMG they make MORE than us, they should be happy land is so overpriced!”
Hats off to you for refusing to prop up the housing market. Prices need to fall. My wife and I make a decent living (about half of what you do) but I also refuse to buy into my local market at current prices. I am also ticked off at the fed’s failure to defend the currency and fight inflation. BTW, $250K is not really that much anymore. Well, I suppose it’s a lot if it’s a consistent and reliable yearly take-home, but for many people, myself included, I could easily have an entire year or more where I’m out of work. Even so, I’d rather take my medicine with higher rates and a required recession (and resulting reduced employment) than see the value of all my savings destroyed through inflation and/or currency devaluation.
“No chance to save since we were always in a big city.”
Naw, ain’t buying that. I live on the west side of manhattan, am also a renter and save plenty, though i make less than you do. And if you make a good buck because of your education, then you have no beef paying back those loans–they were a business investment that paid off.
Agreed. At your salary you should be taking home 12.5k a month. Assuming 4K for ALL YOUR DEBTS and a 2.5K rental, you still have 6K a month for util, food and groceries, which is what, another 1.5K, which means you have 4.5K left. Come on, that is what some families take home a month. Even if we say you only have 3K leftover each molnth that is 36K a year. In 10 years you will have 360K. Assuming housing falls, you will have a nice chunk of change for a down payment.
Give it a rest. Your numbers don’t add up!
BTW, stop whining. 250K. What does that out in, the top 2% worldwide of earners? Sheesh, only in aMerika.
Freakin’ complainers.
Maybe Poodle does need to learn to keep her salary to herself, but this whole “you have no right to complain” stuff is bullsh-t. If she pays taxes, she has a right to complain. Every friggin person on this board complains every day! And I’d be willing to bet everyone here earns more than, say, the median income in Ethiopia. How dare you complain! You live in one of the wealthiest countries in the world, bastard! Not to mention, you probably sing the praises of capitalism every day, then turn around and tell successful capitalists (and successful as much-needed doctors, no less) to shut up.
Ease up on Poodle.
FV, my gripe is that the numbers don’t add up. Now, if she had said they are paying that monster loan off 4-5X the min. monthly, no beef. I.e, instead of taking 20 years to pay, we’ll be done, in say, 5 or 6. But when I look at the numbers as I posted above, they just don’t add up. Even if you throw in malpractice, I just don’t see it.
BTW, I do a self check quite off thank you. Every time I have to whine, I ask myself what those at the local homeless shelter would think. Gets my thinking straight real quick. I used to do it quite a lot when I worked at a psychology graduate school with my student assistants. You’d be surprised how fast the pity parties stop.
“I’m part of a large immigrant family who will come and stay with us in our 1br for months at a time despite our lack of space. I like them but not so much I like waking up to them on my floor/couch/bed/recliner for 30 days and nights. I’m also responsible for them in their old age.”
Is this where all her money is going? Sent back home maybe? Sounds like Poodlepoodle needs to learn how to say no to people that see her as a meal ticket. I’m no Dr. Phil but I’d guess this is where the anger is coming from. Psst Poodlepoodle, I’d direct them to the local hotel after the 1st week.
I would never kick out my family. That’s a terrible thing to do.
And it isn’t an issue of not being able to afford a house, we could. But why buy something overpriced just because people who wished they earned more decided to lie about it.
I don’t like where I live right now but we do it because we don’t want to owe 800,000 on a house worth 300,000.
The way I was raised you are responsible for your family and your extended family. If someone has cancer and they’re in the homeland you pony up the 20k to pay for their treatment. If someone needs a place to stay for a week or a year you give it to them.
I live in Philly — 26th and Pine. Prices here are dropping, too. Don’t worry about not getting a tax deduction while owning a home! The home would be losing value anyway.
You might want to look at craigslist and see what rents are going for. There are a lot condo flippers who are looking for tenants. You might be able to get a better place to live at the price you are paying now.
As for those who are giving this person a hard time, remember that she has $200K in student loans!!! Her family income alone is really not that much when you have to service that kind of debt.
I don’t understand why you live in 800 sq ft. Based on your income can’t you rent a nicer place while you wait for prices to drop? Or if you are this upset, you could always buy and start your family. You have some choices, more than most people I imagine. Aren’t your job skills transferrable to a less ‘violent’ city? Good luck and remember, a house is just a building.
None of my comments are posting, so maybe I’ve been banned. Who knows.
I suppose my job moves around. I work from home half the time. My husband is a very specialized doctor so no. No move there.
I understand where the snideness comes from. You threw the $250K income out there without any sign of gratefullness for it.
Had you said something like, “After over a decade in medical school, internship, and residency, we’re finally at the point where our incomes will allow us to begin paying off our mountain of student loans. We’d like to move out of our tiny apartment in this cruddy neighborhood and buy a nice house in a nice nieghborhood. And, even though we technically can afford these crazy high prices on our duel doctors incomes, I feel no obligation or desire to buy at these insane prices.”
Instead, you said was inferred to be the equivelant of “We make $250K, and please sorry for me that I can’t buy a huge house and have babies.”
I’m not too far from your boat. My wife and I have W2 income of $140K this year. Whenever I mention our 45% marginal tax bracket, I’m careful to say that I pay enough.. not too much. When I mention my debt load, I mention that the $149K is a recent development… that just 2 years ago it was closer to $80K ($20K this yeat was severace from getting laid off. My wife got a $25K raise last year. My $10K a year alimony ended. I got a raise when changing jobs. I got a performance bonus, etc.)
I try to avoid saying, “I make a ton of money, and please feel sorry for me.”
Well that explains it. Actually I just feel bad saying “look even doctors can’t afford these prices.” I don’t like to bring it up.
I wasn’t saying “wow we’re rolling in it and we feel so poor.” I’m saying we’ve worked for years, we make enough, we have a crap load of loans to pay and we’re still freaking priced out.
Oh and I’m bitter.
Many of the people here reacting probably aren’t aware of how much of that 250K you are losing off the top in taxes.
Since both of you are working, let’s assume it’s more like 125K each. You both are on the hook for FICA taxes on the first $102K each (2008) at 7.65% Are you considered self employed? Make it 15.3%. State Income tax of 3.07% and are you being hit with the City’s norotrious wage tax (4.5% on residents I believe). Add that to a good portion of earnings at the top federal tax rates, and I would guess you guys are giving up 40-50% of your total income to the tax man.
Since you have only been out of school for a little while, you need to sock away something for the 20% down payment, with money left over after student loan debt service.
So yeah, you *could* buy that house, but it make you go from finally feeling like you have your financial heads above water to being very vulnerable again. Granted you could buy a house that most people wouldn’t be able to (anymore now that you aren’t competing with Cali strawberry pickers), but since you are here, I think you want to make a smart decision and that includes not getting cut by falling knives.
Don’t take any grief expressed here personally.
Not class warfare, but I do feel that if people with 250K income complain then there is something wrong.
My wife & I together make ~130K in the Boston area which is not cheap, have a kid going to an expensive private Univ (though merit scholarsip pays quite a good chunk of cost), rent happily (btw, kid grew up in our rented apartment and turned out to be fabulous). With our income & renter lifestyle, we are saving so much that there is a cash pile of ~700K & no debt. The pile grows by ~20% each year due to savings and investment income. So, I feel there is something wrong if a renter w/ 250K income complain so bitterly.
What I’ve noticed is posters saying they’re being ‘raped’ by Fed cuts, inflation, etc. The biggest problem one has is low returns on a CD? War on savers? I keep trying to suggest that this is a pretty low pain threashold that may need to be reexamined if things really go downhill.
It is hard to save when daily costs and utilities are rising as they are, and wages, even for professionals, are flat. I wish I had more cash left over at the end of the month to put into a CD!
I can’t complain given that we, as a family, make three times the norm for the community we live in. I still don’t like the fact that we can not, prudently, buy a house. A stiff round of stagflation will give the pain without the opportunity.
As a country, it serves us right for electing fools for the last thirty years.
Better still. A large portion of my family lives in Asia. I’ve seen what happens when a currency actually loses all or most of its reported value. I know why my family hoards gold. I’ve seen people actually starving to death on the street. I’ve seen 1000s of people starving on the street.
Why would I want this to come to my country? Why do I want the people who work around me, give me my coffee, cut my hair, wash my dog to suffer? I don’t I want them to be happy, to do well, to be able to save and get ahead.
But they can’t. They have to go out and gamble in the stock market because the moment they save $5 that money is worth less than the day they put it in.
I don’t want my country to devolve into a 3rd world nation so yea the American dollar crashing unabated for 6 years — I see that as a problem.
…with more fools to come. no way out given the current line-up.
I carry 23 great wounds, all got in battle. 75 men have I killed with my own hands in battle. I scatter, I burn my enemy’s tents. I take away the flocks and herds. The Turks pay me a golden treasure yet I am poor, because I am a river to my people!
Sorry, you are just going to have to wait until all the damn fools finish ruining their damn selves. 2-5 years, or longer, if the Fed decides to try to inflate their way out of this. Think about a side business as a landlord in Philly, as the f’ed investor buyers will face wholesale destruction. Plenty of time to scatter tents, etc. once reality finishes beating down that fantasists.
And no, you are not whining about your income when the price for it is the sort of debt you have taken on. In that situation, you are no more than middle class, and you are smart not to expect more. Your kids, however, will not have to deal with that debt, and they will reap the benefit of your sacrifice, not you. So don’t spoil them!
You should be happy about inflation if you have a large debt. The cost of the debt is falling. You might be able to refinance this summer with a lower interest rate. You should be happy you have a small house, despite the falling dollar the value of homes is falling, so sit back and wait for the crash. You are just being impatient.
I’m not happy about inflation. I’m sad about inflation.
It hurts people who can least afford it. Jesus, I’m the one being accused to being greedy. Hey I’ll be OK even if I can never afford to buy or even if we decide to bite the bullet and buy some overprice place it will still be pretty nice.
But the people on the margin can’t afford inflation. Personally I think it’s just sad.
Like what Ben and Xenos said, most of us here are - and should be - on our knees in gratitude for our situations, regardless of the condition of residential real estate. Most of us are acting to the best of our ability to cushion against what’s coming.
The home we’re renting is 1850 sq ft. Last January our heating bill (nat gas) was $120. This year, following a notice that rates were rising, and despite less metered usage, our bill was $200. No hardship for us, but my husband and I talked late into the evening about what a bill like that means to the majority of folk.
Our combined earnings are in the low 6 figures, so we’re able to save substantially (just the two of us). That puts us at 2.5 times our regional median. Very rough times already for so many, with worse to come.
Like Jas, I agree with the deflationary viewpoint, tempered by an unknown period of inflation in primary commodities like food and energy. Weird mix, and all I know to do is hold more gold than I ever thought I would….at least for the time being.
You can get a very nice house in South Jersey for half of that $700K. I lived in the Philly area all of my life up until a few years ago (going back there if/ when I sell my house in Fl). There is NO WAY the average house in the Philly area is $500K. It sounds like you refuse to live anywhere else but Queen Village or the Mainline. $250K a year in the Philly area.. Sorry, no sympathy here.
Average house in good section of Philly is easily $500K. I live in an 1100 sq. ft. home at 26th and Pine. It has a garage. It would sell for near $500K right now.
My house is, at best, average for my neighborhood, Fitler Square. It’s a nice neighborhood, but it’s not as nice as Rittenhouse or Society Hill.
Poodle, Poodle: We all make our choices, sorry you don’t seem happy with yours. Maybe it’s time to rethink “living in a violent city” as well as putting up with relatives coming to camp out in your one bedroom apt. for 30 days and nights. Jeesh, get a life!
Ben,
I am not bitter anymore :)….i did a preliminary on my taxes this year and i am grumpy but not bitter :).
“2008-01-30 06:52:39
Only in the US could someone who makes a quarter million a year complain so loudly. I didn’t see this much self pity on this blog when it was a handful of bitter renters, house prices were shooting through the roof and trolls screamed at us all day. ”
I hear you Ben. I make a hell of a lot less than 250K and somehow manage to live comfortably. I don’t buy that they can only afford a tiny one-bedroom apartment or pay off their student loans in a couple of years at that salary level.
Yeah, and I bet you wash your own dog (sorry, couldn’t resist).
LOL.
Give me a break Ben and multiple others. I don’t care if you make $30k or $500k a year…you should be pretty pissed right about now.
Are we really saying here that we are only allowed to complain if we are poor? That’s weak. I can tell you one thing, regardless of whether you make a lot of money or not, we are all in this sinking boat together. If you are poor your mad because you’re groceries cost 20% more this year. If you have a million dollars in the bank you’re mad because 10% was inflated away in just a few months.
Yeah…I understand that there are differences between being rich, poor, and middle class. I also understand that misery, happiness, unhappiness, joy, love, and sorrow are not doled out according to your income bracket.
What I’m saying is that all some posters do is whine about this or whine about that. And now I have to read over rich peoples housing woes? Jeebus, everyday your dollar buys more house.
I can remember when this blog stood against huge odds, and the biggest industry in the country and said, we call your bullshit! And we laughed as we did it.
And now many here go on and on about the low return on their CDs. ‘Lifes unfair. I feel so powerless.’
Give me the posters with balls and humor and grit anyday.
Ah. Ok. I can see where you’re coming from with that angle. I took it to be more of a rant against wealthy people not having a right to bitch about the screwed up system as opposed to a rant against someone whining because they couldn’t get their “dream home” as if it were a right.
There is a difference there and I can appreciate that.
Actually you can and do “deduct” your rent. Your landlord gets a tax break, which market forces try to get him to pass on to you. So in some sense, renters do enjoy the tax break. Hope you feel less worse now
Remember, with AMT you probably get a fraction of the mortgage interest rate deduction at 250k a year. If you have kids the amount you can deduct will decrease.
Ok, you make 250K a year, good for you. So why not, say, a 250K home?? Or less??
There should be plenty of decent homes around Philly in that price range. Do you really “need” a 500K home?? The honest answer would be no, IMHO.
these are docs obviously and docs don’t live in 250K “homes.” It goes with the territory.
I think you hit the nail on the head. Keeping up with ‘the docs’ seems to be the real issue here. Why does someone with large student debt want to buy a million dollar home, even if they only want to pay 500k for it? Most people don’t start a family in mansions but get by just fine.
Txchick - I am a doc - and I live in $195K home in Richardson - and love every bit of it.
Seriously have you spent any time in the real estate market in Philadelphia or do you just enjoy casting aspersions?
You can’t buy something for 250k in a safe area. You used to be able to buy a town house in Society Hill for about 300k about 4 years ago. Hell I’d pay 400. But there aren’t any.
prices in the PHL metro are frustratingly sticky on the way down. I want to buy also but at this point I don’t think sellers will accept my 10-15% lower than wishing price offer. Next year– probably yes.
OT - is your handle poodle2 because you’re a poodle mom?
When I get a house I want to adopt a poodle but the one question I have is: do they get along well with cats?
This is a serious question: Are you unable to move away from Philadelphia?
You mention that Philly is unsafe and that homes there are too expensive. I’m just wondering why you stay there.
When I get a house I want to adopt a poodle but the one question I have is: do they get along well with cats?
Mine does. He likes to sleep with the neighbor’s cat. (I’m sure that’s against the bible somehow).
You mention that Philly is unsafe and that homes there are too expensive. I’m just wondering why you stay there.
Nope can’t move. In academics. Once in, never out:)
Also people it isn’t like we’ve been making this kind of chedder all our lives, we’ve been making 30k a year until our 30s. Then we made a lot more. In that time we haven’t really saved, we’re way behind on saving for retirement, we have massive student loans and we would like to buy a house. We also have large extended families we must support.
Most of you have been making money since you were 22, now it’s our time to catch up. Hate all you want.
Poodle, don’t apologize for earning good coin…you earned it. Anyway 250 large is not so much in this day and age and your income will increase soon enough for you to get the house you want (watch prices fall another 10 - 15% in the meantime).
I live in Philly. $250K gets you NOTHING in a relatively safe area anymore. Example: my old house at 25xx Waverly is 700 sq. ft. and not newly rehabbed. It’ll sell for about $320K — and it’s smaller than the place the OP is currently renting!!
this.
“I once spent a year in Philadelphia, I think it was on a Sunday.”
W. C. Fields
I used to live in the “Graduate/Ghetto Hospital” area. 1100sf, with a 16′ x 10″ backyard. The house I had lived in sold for $375K in 2006. That’s a big hunk’o change where, when I left in 2003, people were getting held up at knife point from time-to-time.
16 feet by ten inch back yard. I guess the obese can’t enter/exit out the back door.
Ever see “This is Spinal Tap”? Very funny scene about ‘ versus “
Let’s see. Have you been to Philadelphia?
If you live in the city it’s pretty violent so sure you could buy in N. Philadelphia but you’d be taking your life into your hands. We also need to be able to get work at any hour of the day (you also need to get there quick so you need to live close) so a place that’s really dangerous to walk around (or far away) at night is also out. The schools here are almost universally bad and I wouldn’t subject a child to them.
Which means: live outside of the city but close. Live in an expensive area of the city that’s “safer” (I’d never say safe, it’s killadelphia). Yea most of those places cost 500k+.
And one of our mom’s can’t do steps so a trinity with lots of steps is out. So are nursing homes.
I freely admit I haven’t been there, so I was just speculating. Granted it’s not Detroit (where I’m at), so my perspective is a bit skewed, but I don’t see Philly as a “must be” place either.
You have no idea what you are talking about.
I’m a NYC transplant and have been in Philly since the mid 80’s, when I was in college. Many parts of Philly have become a very desirable place to live. Yes, there is a lot of violent crime in the bad areas of the city — but those areas are very different from the desirable places, where violent crime is much less common.
As a former typical arrogant NY’er, I can assure you that Philly can be a great place to live, with lots to offer.
I know I could care less if I ever visit Philly, therefore it’s still not a “must be” place.
Poodle, I understand your frustration. You are brought up with the promise that if you work hard, sacrifice some of the good times to excel in school, and persevere to achieve a career in a noble, well-paying profession, that you will be able to increase your standard of living, if not exponentially, then certainly beyond that of the average, ne’er-do-well. Instead, you find out that all your hard work and sacrifice has left you in an “average” position. “Average,” that is, based on traditional standards of not living beyond one’s means. Meanwhile, you see all of these gigantic, $1M++++ homes being built and wonder how so many people can afford to live in them. Or you see in the Inquirer: “Starting in the low $2M”.
To some extent, you just chose the wrong profession(s); the really big money has been in the financial and technology sectors. Then, there’s all of the old money around here left to the children. And, I would bet that there are a lot of people out there leveraged to the hilt on housing.
Mostly, though, I think your problem is your adherence to the “live within your means” standard. Home “ownership” has come to mean borrowing as much as you can to “buy” a home. If you wanted to, you could buy a pretty nice home with a $250K income; you just have to be willing to take on the debt like everyone else has. Or, as I have come to do, be content with your financial stability; accept the fact that there are lots of folks around here who have lots more money than you do; remember the misery of the greedy folks who were stupid enough to borrow beyond their means; hope for an eventual turn-around in the market; sleep at night; count your blessings.
To some extent, you just chose the wrong profession(s); the really big money has been in the financial and technology sectors.
Since when do engineers earn anywhere close to what MDs make?
I don’t think the MDs are making what everyone thinks that they are. By technology, I meant computer technology, specifically those who cashed in during the dot-com boom.
FWIW, I had a colonoscopy a few weeks ago. The Dr charged about $1000 for 15-20 minutes of his time.
I agree that GP’s aren’t as well paid as most of us think, but still better than the 50-60K new CS grads make, and that’s only at top notch jobs.
Were pissed off and not going to take it anymore! I hear ya, I make almost 90k and rent cause Im not going to buy some sh*t box for 400k! I would rather save up and buy a foreclosure in a year or two for 200-300k cash. The same place that went for 600k in 05.
I, too, live in the Philly area. If I had your salary, I would be sitting very pretty. My household income is 1/5th of yours. I am a single parent of a young son in daycare. Ok, so I have to rent right now. Oh well. I still have faith that I will be able to buy a house in the coming years.
I don’t know what areas you are looking to buy in, but I know of a LOT of very nice homes for $500,000. I find it hard to believe you’re getting so upset about being rich.
Poodle, it sounds like you came from a difficult situation, if you’re from a recent Asian immigrant family and have actually seen hundreds of people starving to death. Be thankful for where you are now, focus on that, when you feel bitter, just recall how life used to be. Remember where you came from and how far you and your husband have come from there.
Poodle is far, far, FAR from “rich”!!! While her family has a very good salary, her family as of now probably has ZERO net worth.
T’will be interesting to see if this posts….
Poodlepoodle:
Having read all this vituperation over your post I can only suggest you guys simply resolve to hang in there and take comfort in each other and in your art. I know it seems like forever, and as though no one appreciates the enormity of your sacrifice.
(Hint: They never will.)
Put aside your rightful (but unhelpful,) resentment and do what you were trained to do…with dignity and alacrity. The rewards will come. I promise you, they will. They may not be what you might have imagined, but their integrity is solid. You’ve already proved yourselves to yourselves…there is no need to prove anything to anyone else.
And the house? It will come, too, in good time, and you will love it.
In the meantime, enjoy this unique blog for the information it imparts and be glad you’re not stuck with a mortgage in addition to your school loans. When you hit 50, you’ll congratulate yourselves on your prescience.
Peace.
Poodle, you aren’t the one with the problem. No, this isn’t class warfare. When high income families such as yours feel the way you do… the SELLERS of the higer end homes are the ones with the problem. Conventional wisdom used to like to think the higher end was immune to downturns. Not this time.
well, that opened a nice can of worms. Colorful thread, especially for foreign readers
“When I get a house I want to adopt a poodle but the one question I have is: do they get along well with cats?
Mine does. He likes to sleep with the neighbor’s cat. (I’m sure that’s against the bible somehow).”
Come on guys, lighten up. This is the funniest thing I’ve read today. We’re all frustrated with what we see as financial incompetence. And most of us have managed to express opinions that are self-serving and/or annoying to others. Let it go.
This is a follow-up to yesterday, in which there was a discussion of the story by a NY reporter of the devastation in the ‘toney’ Shaker Heights, Ohio.
http://www.cleveland.com/news/plaindealer/index.ssf?/base/cuyahoga/1201685834303840.xml&coll=2
Turns out the story was wrong, if you can believe it. The area described was Cleveland, not Shaker Heights. Other facts reported are in question.
Mistaking Shaker Heights for some bad parts of Cleveland is like mistaking the worst run down slum for Palm Springs. Night and day.
I posted the link here, after the article was e-mailed to me, and was stunned by the story. Then I check the comments, and thought perhaps it wasn’t true.
I guess things are not THAT bad.
Like PoodlePoodle, I was taken to task by this blog for whining about my inability to buy in a neighborhood where our family income exceeded all but 10% of the residents. I have kept quiet about it, and continued saving money. We pack away as much as we can, have no debt, and are saving as fast as we can to be able to afford a house in 3-4 years. I don’t think it will be any sooner here.
In any case, I always look somewhat longingly at the houses in Shaker Heights. The same house would be 4-5 times as expensive in a nice neighborhood of LA or SF. Maybe it is time for a move there… if only there were jobs there.
I love Shaker Heights. Have a book with details on many of the old houses there. Beautiful old homes for anyone who likes that style. However, lots of apartments in the area and some crime. Not as bad as Cleveland Heights (which also has some great old houses - just more modest.) However, I love Cleveland and think it’s a great city and I hope it makes a comeback.
Ben’s Nightmare
http://www.stockmania.com/index.php?showimage=143
Bravo, kahuna!
I hear dunce caps are coming back in fashion…
Not my best toon, but I thought it was worth it to see him in a dunce cap and those fancy smiley face PJs.
The Fed did not panic
Posted by Ambrose Evans-Pritchard on 23 Jan 2008 at 17:39
Tags: US, Davos, Bank of England, Morgan Stanley, Nikkei, Fed, European Central Bank
Let us scotch one foolish and dangerous notion already gaining acceptance. Those who accuse the Fed of acting out of panic in slashing rates 75 basis points on Wednesday do not grasp the seriousness of the situation.
The Fed had to prevent a disaster
The move was imperative to prevent a grave financial crisis spiralling into disaster. The threat of a melt-down in the $2.4 trillion market for US municipal bonds had suddenly moved from possible to imminent. No monetary authority could ignore such risks.
http://blogs.telegraph.co.uk/business/ambrosevanspritchard/december07/thefeddidnotpanic.htm
from Ambrose Evans-Pritchard, who wants the FED fund rate and BOE rates down to 0% as soon as possible, so he can cash in on his risky bets and stop writing silly stories…
Kahuna, cute. But Ben sure does sleep in late for someone who’s supposed to have his eye on things.
kahuna,
If you could ever work an image of his empness (sorry for the 3rd person singular) into one of your cool cartoons, it’d make my day.
Keep up the good work…
And what should his highness be doing?
Most of the photos i’ve seen of the original emp have him looking like a member of Sgt. Pepper’s loanly hearts club band, albeit in black & white.
Something like that.
Probably should be smoking something, too.
nudge nudge, wink wink.
MARKETWATCH FIRST TAKE
Fed ignores second-guessers, cuts rates
Commentary: This is not about foreign markets, it’s about a U.S. credit crunch
By MarketWatch
Last update: 2:53 p.m. EST Jan. 30, 2008
WASHINGTON (MarketWatch) — Fed Chairman Ben Bernanke has taken a lot of criticism in recent days from second-guessers, who suggested that last week’s emergency rate cut was a hasty move by a rookie Fed chairman who was snookered by a rogue trader.
Bernanke brushed off the criticism on Wednesday, pushing the Federal Open Market Committee to cut the Fed’s target rate by another half point to 3%.
Was the Fed tricked into cutting rates last week by a hiccough in global stock markets? No, Bernanke said emphatically.
Rather than sheepishly apologizing for last week’s sudden move, Bernanke boldly doubled his bets.
The Fed has now cut rates by more this month than at any time since the Paul Volcker era in the 1980s.
http://www.marketwatch.com/news/story/fed-ignores-second-guessers-cuts-rates/story.aspx?guid=%7B3CC6FA77%2DBB84%2D4BA4%2D89A3%2DFB62264FE0EE%7D&dist=sp_inthis
I know doom and gloom gloating is king here, but I have to be honest about what I see and hear firsthand. As but one example, Southern California has been called bubble central, but I read stuff like this frequently - “As a homeowner in a decent 30 year mortgage, am I supposed to feel bad that my house in Silverlake appreciated some 450% since I bought it in 1997, only now to drop like 4% last month? Go ahead and give me a year of declines - heck, give me two (never gonna happen). When the “bubble” breaks, I’ll still have a boatload of equity off an investment that dollar for dollar far surpasses the typical managed portfolio on Wall Street. Not to mention the interest write-off.”
Along with opinions from the afore-quoted Silverlake fellow, I have a sister-in-law in the Hollywood Hills who bought a tiny 1000 SF place in 2000 for $355K, and last year it appraised at a cool 1 million - she has told me this year that she has seen less than a fifteen thousand dollar decline in her home value since the 2006 valuation, and her neighbors are reporting the same. It appears it’s a lot about w-h-e-r-e you live in California - Palmdale isn’t the Hollywood Hills, or even Atwater Village for that matter. As it’s oft repeated - location, location, location.
We have a new l.a.investor girl, in the house.
And for the record, I prefer to be called a “Doom & Boom”, because as the rest of the country is going broke, my bottom line keeps increasing in value.
Comment by aladinsane -
“We have a new l.a.investor girl, in the house.”
No. I live in rural Arizona and help a parent. No CA property, no agenda, and not new to this forum. I report what I’ve seen and heard. I enjoy a good laugh and a cheap shot every so often, but in this instance you’re just wrong about me and/or my having an agenda.
A.I.G.?
The corp’s amongst us?
“Being right too soon is socially unacceptable.”
Robert A. Heinlein
The most desirable places are always the first to inflate and the last to deflate. The degree of deflation in these hot areas is still unknown.
I have a sister-in-law in the Hollywood Hills who bought a tiny 1000 SF place in 2000 for $355K, and last year it appraised at a cool 1 million…”
If you think that kind of appreciation is normal, extrapolate it. In seven years the place would be 2.8 million. Who will buy it?
As for location, location, location, I have one word for you. Tokyo.
> As for location, location, location, I have one word for you. Tokyo.
Yes, but…
As a rule of thumb, what goes up fast comes down fast That’s always true, whether it’s gold, tulips, or houses, or Pets.com stock.
But one phenomenon I’ve seen used to justify paying high prices in the Bay Area (CA) was the notion that all areas are equivalent.
The folks in “Pleasanton” who spend 4 hours in their SUVs each day commuting to/from their San Jose jobs may think they live in the “Bay Area” because technically a piece of Pleasanton touches the delta. In the early stages of the boom, where Million Dollar Homes were only seen in Los Altos Hills, Atherton, and Palo Alto, they used some crazy notion of equivalance to think that since they, too, were in the “Bay Area” their homes were also valuable.
When the bubble’s done popping, I don’t know what prices will settle down to.
But I will tell you that it’s unlikely Los Altos, Palo Alto, and Atherton homes will sit empty and boarded-up–while it’s very likely that Pleasanton/Stockton/Grass valley homes will. In other word, it’s likely that there will be a buyer for a Los Altos home at some price. There may not be a buyer for some of these “East Bay” homes at any price.
So there *is* something to be said for location. Some areas are just nicer than others.
Also, having an appraised value for a house is not the same as selling a house for a profit. Until you realize that value (through a sale and not a phantom refinance), you’re just blowing smoke. The property is worth what someone else will pay you for it.
Good luck getting fire insurance in the Hills. Narrow roads, lots of brush. Not a good combination.
Comment by watcher -
I have a sister-in-law in the Hollywood Hills who bought a tiny 1000 SF place in 2000 for $355K, and last year it appraised at a cool 1 million…”
“If you think that kind of appreciation is normal, extrapolate it. In seven years the place would be 2.8 million. Who will buy it?”
I don’t think it’s normal appreciation. I do believe that there is a lot of envy out there though.
“As for location, location, location, I have one word for you. Tokyo.”
Yup. Watched that boom and bust cycle. I’m well into my fifties and I’ve seen a cycle or two in my lifetime. Again, I’ve no agenda. Never been employed in any real estate business.
“I don’t think it’s normal appreciation. I do believe that there is a lot of envy out there though.”
Maybe but it will fade just as these high prices do .
“If you think that kind of appreciation is normal, extrapolate it. In seven years the place would be 2.8 million. Who will buy it? ”
I tried making this point to my neighbor, a bay area transplant, when he was telling me prices would just keep increasing in San Diego.
I think a 15K decline to date on a million dollar ppty is pretty optimistic thinking. It’s more than already, and more to come. Better parts of LA have not weakened like IE or high desert, but they are down about 5-10% by my eye. Look to history — in the early 90s prices came down everywhere, just not at the same rate. Give it time, and I think we’ll see 20-30% even in the most insulated areas. Of course, I expect sellers/homeowners/realtors to deny it vociferously and call a bottom monthly
Let me guess, big way overpriced Caddy SUV,4 big shiny wagon wheels (rented ?) and a blue tooth welded to the side of head. A look that screams LOOK AT ME I’M SOMEBODY ! I’ll bet the For Sale sign is stuck in the front yard 24-7 hoping for the next deal (sucker) to come along.
I have a sister-in-law in the Hollywood Hills who bought a tiny 1000 SF place in 2000 for $355K, and last year it appraised at a cool 1 million
1. From 2000 to 2007 went $335 to $1,000. You miss the point that she bought at $335. What if she had bought in 2007 for $1,000? Those are the people who are dumping the market right now. 4% down is a lot to them, especially since many couldn’t afford the place to start.
2. Is the $1,000,000 price even real? Appraisals and valuation seem to dominate your story.
It is hard to predict the future. But i think pretty clearly established what was going on in the past (2000-2007). Housing went up in a LOT of places, not just the best areas. Lots of selling and profits used to do the next buy: flip flip. These games tend to eventually end.
Look at the reaction to 4% - marketing is in a panic. Wait until it hits 20%.
“am I supposed to feel bad that my house in Silverlake appreciated some 450% since I bought it in 1997, only now to drop like 4% last month?”
you did not participate in the frenzy so no you shouldent feel bad about it. just dont count it until you actually see the check.
Yes, you should feel bad - California is a rare state that has a cap on property taxes.
In many states property taxes are tied to the housing appreciation. In Wisconsin, there are many long time owners that are getting taxed out of their houses. South of 110 RE taxes avg 2.2%/yr of assessed value. The bogus appreciation has resulted in windfall taxes to local agencies that squandered the funds.
This has happened nationwide. This is the scam. And you are a willing participant in this scam with the naive belief that you made money. BS. You just get to pay more taxes.
The Prop 13 cap is a compelling reason for would-be California buyers to make sure that they don’t catch falling knives. Buy at the market bottom and lock in a low Prop 13 basis.
“When the “bubble” breaks, I’ll still have a boatload of equity off an investment that dollar for dollar far surpasses the typical managed portfolio on Wall Street. Not to mention the interest write-off.”
Yeah baby, right on, preach it. I hear you. Damn I wish I was in your shoes right now. I don’t know what I was thinking when I was trading in my tax deferred account and didn’t have any interest to write off because I was a humble renter. After all, married and with no interest to write off I got the same initial $9500 deduction that you did but I didn’t have to pay $9500 before I could deduct more; I guess my education is lacking. And gee, my deferred comp has now been in a guaranteed government fund making 5% tax free, but you sure got me beat by holding an overpriced ILLIQUID asset that can sink faster than the titanic taking your ilk with them.
For those who don’t have “write offs” why don’t they have a side business?
Just wondering, as building/growing/maintaining a side business not a hobby is a write off.
How about growing Orchids in b.y. or ? Just thinking..or that special family recipe that can be advertised etc..
Just having the One J.O.B ( just over (?) broke) you have to stay solely with THAT J.O.B. does it?
“Worst still to come for local banks
“…Community institutions face big drops in profits from real estate losses
Loans that are more than 90 days past due rose to $80.5 million for the 16 largest community banks in Southwest Florida during the three months ended Sept. 30, from $14 million during the same period a year earlier, a 474 percent increase.
At the same time, those same 16 banks wrote off $7.9 million in bad loans, an increase of 1,162 percent from the $630,000 in loans they wrote off at the end of September 2006.
The result of these problems was that profits for the 16 Southwest Florida community banks dropped 27 percent to $22.2 million during the three months ended Sept. 30 from $30.5 million during the same period a year earlier….”
HeraldTribune.com (Southwest Florida)
http://tinyurl.com/36oqzu
Swearing in the Federal Reserve Chairman
New Yorker
Cartoon
http://tinyurl.com/274scm
Hoz — I don’t get the joke. Isn’t calming markets the Fed’s mandate?
Todays weather
“Snow, heavy at times. Gusty winds will lead to blizzard conditions. High 3F. Winds WNW at 25 to 40 mph. Chance of snow 80%. Snow accumulating 2 to 4 inches. Winds could occasionally gust over 50 mph.”
California weather is the joke. I’m feeling wired - a good day to go ice fishing.
I still say they either cut 75 bps or more, or else the market crashes. 50 bps is already fully priced in. My view of the 50 bps rumor is that it helps make 75 bps look like a surprise (but this is pure conjecture…).
January 30, 2008 9:42 A.M.EST
BULLETIN U.S. STOCK INDEXES RETREAT EARLY WEDNESDAY, WITH FED NEWS JUST HOURS AWAY
Opening on a defensive note
Analysts see FOMC rendering a half-point cut in U.S. interest rates
Investors, sorting through a flood of corporate earnings, single Yahoo and blue chip Boeing out for early scrutiny.
http://www.marketwatch.com/
“This bubble hit us just as hard as everyone else. We have massive debts, we get no tax deductions, we can’t afford to buy, we have a tiny apartment in a violent city so our rent is fairly high because it is in a safer part of the city.”
Come on now. You make 250+ a year w/ no kids and you can’t rent a very nice 3 bedroom apartment/house/condo in a dafe area? It sounds like the problem here is you need some type of financial adviser. Because if you can’t live VERY comfortably on an income higher than 99% of Americans even though you have no dependents, well I’d say that is on you. Your debt payments still sound less than a daycare bill for an average, young family of 4. Big deal. And the debt was to allow you to make the 250 +, correct? So no sympathy here - that was the deal you signed up for….
Seriously, can you give provide your monthly balance sheet. I am having a hard time visualizing how you could be having money issues w/ the situation you described….
You make 250+ a year w/ no kids and you can’t rent a very nice 3 bedroom apartment/house/condo in a dafe area?
The real story: They haven’t made $250K very long. Anything short of 5 years isn’t what I would consider a mature/established income.
If you made $120 last hear and $250 this year… you should keep your old lifestyle and safe for a while. Not jump into spending on something that may not last.
The New Yorker revisits the Minsky Moment
“…Between 2003 and 2007, most Americans didn’t want to hear about the downside of funds that invest in mortgage-backed securities, or of mortgages that allow lenders to make monthly payments so low that their loan balances sometimes increase. They were busy wondering how much their neighbors had made selling their apartment, scouting real-estate Web sites and going to open houses, and calling up Washington Mutual or Countrywide to see if they could get another home-equity loan. That’s the nature of speculative manias: eventually, they draw in almost all of us….”
http://tinyurl.com/2ukere
New Yorker mag
From a post yesterday:
“From the merc:
Santa Clara County Receives $12 Million to Assist First Time Home Buyers
SANTA CLARA COUNTY (KRON) - First time Home Buyers in Santa Clara County may be receiving help soon, thanks to a state mortgage assistance fund.
County officials say they were given $12 million to provide Mortgage Credit Certificates to qualified first-time homebuyers. The certificates will allow buyers to receive a federal income tax credit of up to 15 percent of the interest they pay on their mortgage”
How can the State of California give out a Federal Income Tax Credit?
Cool, financial crisis in the state of Cali is ended. They still have plenty of bucks to give away.
“I cannot think of an English language phrase that annoys me more than “start a family.””
I find few things more annoying than women that have not had kids, bearing the nails and scratching thier pain out on the women that want to have kids.
It is a basic instinctual drive to have kids. Some choose not to, and some can’t. They sooth their pain of supressing their instincts by attacking others that do not.
No different than the Bible thumpers attacking those that choose a hedonistic lifestyle.
And, quit trying to elevate having a pet to any level the same as having a kid. I’ve had both, and that is like comparing a hot dog to filet mignon. It just doesn’t compare.
I’m sorry for you that you did not have children, but stop taking it our on those that did or desire to.
personally i love kids and they really like me too
but i am happy when they go home to their parents
to each his own- but i love animals too and to this pet owner
my dog is as much a part of my family as anyone
I was wondering when someone was going to mention the fact that she fawns all over dogs and yet she treats children as if they are dogs. Really strange.
Not strange at all. There are some pleasant children out there, but they are outnumbered by ill-mannered, pint-sized bores.It’s a free country…if you prefer rugrats, so be it. I prefer dogs myself. Would be nice if the rugrats were kept on a leash, instead of running amok in the nabe. Besides, i pay my own dog’s costs…as i am forced to contribute to your kids thru taxes, i feel entitled to say what i think about them.
For some crazy reason, my Calico thinks i’m the cat’s meow, and never questions my motives and makes a heck of a fur pillow, on cold winter nights.
Works for me.
OK, to sum up TX comments, she favors a bail out for FB if dogs suffer but eff the FB with kids!? Look I don’t care who has kids and who doesn’t but such vociferous attacks on somebody who chooses to have children needs to be answered as with anyone who chooses not to. I am concerned about the tendency of some folks here who are actually equating dogs and people, that is just little strange for me to deal with.
No, and I did not attack anyone “vociferously”. I simply stated a preference to not hear a certain hackneyed phrase and anything that was implied beyond that is the opinion of the implyee.
“I am concerned about the tendency of some folks here who are actually equating dogs and people, that is just little strange for me to deal with.”
Yeah, you’re concerned? So what. Many people here are giving children the benefit of the doubt by equating their value with dogs. The old Dear Abby used to run a yearly column asking readers with kids if they would do it again knowing what they know. And every year, the majority of those parents answered “no’. Of course, those who have children have a vested interest in insisting that it’s normal and instinctive and all…their choices are behind them.
Just like homoaners. OOps!
Been walking upright long?
lol…something tells me this blog is morphing with intruders. the beginning if stifling..
“No, my preferred term is “crotch loaf.””
Was that really necessary? Sheesh.
What is this, sexist attack on txchick day?
Some folks don’t understand the difference between childless and childfree. The realization tends to make them bitter.
Not to worry. I incite a lot of them myself because I enjoy stirring things up.
Mission Accomplished.
Devil on the shoulder won txchick.
“I’m sorry for you that you did not have children, but stop taking it our on those that did or desire to. ”
I used to do that but caught myself up finally and changed my mind. It’s guilt for seeing others do what you know you should have done. Like a guy who resents military because he wouldn’t do it in a thousand years. You have to give up your safety & comfort - hard to do.
Hm. Many of the world’s problems stem from the fact that there are just too many people around. You’ll get some argument as to whether it’s something that “should have” been done.
Should have done? Added to an already way overpopulated hyperconsuming planet?
Hardly. Guilt never even enters my consciousness. Such facile pop shrinkage. Woody Allen would be proud.
Having kids is a choice, and yes, there are too damn many people on this planet. People who take in or help pets are basically taking over the responsibilities of other irresponsible people. Domestic animals are part of a contract we humans have implicitly made with them, that we’ll take care of them and not let them breed. That care includes giving them more than food and water, they also have needs that we should meet, such as security, affection, and alleviating boredom.
People who treat their kids well generally apply that same compassion to their pets. People who don’t take care of their kids or their pets should be hung from a public gallows. Go ahead, flame away, I’m entitled to my opinion, as is TXChick, and we both are walking the talk. What are you doing to better this world, Derrel?
Disclaimer: I have a wonderful daughter, 5 dogs, and 7 cats.
I will disclose up front that I have 2 children. Also, please don’t compare pets with children. While children can cause problems and such, they are also a hope for the future. They live longer. They go to school. They ask dad to play catch or go swimming or go to the movies. My daughter tells me she loves me every day and has lunch with me when I go home at lunch time. Someday, I will see these kids get married, have children and enjoy the same pleasures I did. So please, don’t compare your pets to our kids.
Lastly, as for too many kids, I would argue they are too many darned pets. Man, is it a rule that to live in Rancho Santa Margarita one must have a dog or three? Good grief. Too many people. Too many dogs that poop and owners don’t pick up after.
Future of what? A totally denuded and degraded planet?
Yup, too many people and pets, no doubt. For the record, I don’t compare my pets to my daughter or yours, either. There is a difference, no doubt. But animals can enrich your life, just in a different way. I clean up after my pets, and every one of them was abandoned by some asshat. If everyone took care of their own, we’d have way fewer problems. Fewer pets and fewer kids, this planet can only take so much (and yes, I’m not just speaking to my compatriots here, I think the U.S. does way better than a lot of countries in this regard).
Don’t get me started on doom and gloom. That is my speciality, but considering all of us have screwed this planet up, incl. me and you, TX, you better believe they are the only hope for humanity.
Also, just keep that attitude in mind when your dying hubby leaves this mortal orb and you are left needing others help as you progress to that same stage. Complain all you want about overconsumption, I def. agree, but get off the high horse.
Not every kid is a Hitler and not every kid is gimme, gimme, gimme. Go rent Into the Wild to see a kid who understood his place in the grand scheme of things.
BTW, some might consider you a useless eater as well. Remember what Dickens wrote about Scrooge when the second ghost used Scrooge’s own words against him.
You see, it is easy to sit back and make predictions on the board from our own creature comforts. A little bit different when you work with the public 9 hours a day. I see both sides all day and every day. Overconsumption and homeless.
For what it is worth I do believe that we should lower the population growth. My wife and I had 2 kids. I would have liked a third, but 2 it is. Net growth is zero right there. When we go it is them and then their kids, if they have any.
You made your decision and I respect that. However, don’t blast kids because you think they are all gimme, gimme, gimme and because of overpopulation. In fact, I blame us on this board more than kids.
Why? Because we know how screwed up the entire world is, but don’t do a thing to change it. If it is so bad, go buy a farm and live off the grid. Don’t pay taxes, don’t vote, etc. The alternative, if that doesn’t suit you is to take to the streets. No luck there either. Oh well, I guess it will be business as usual. Then we might as well stop complaining.
As I tell my son, “If you are not part of the solution, you are part of the problem.” That goes for all of us, me included.
Sorry for the rant. Your comment just got me fired up.
Guys…Txchick is a very well balanced individual….
She’s got a chip on both shoulders……
this train of thought goes with Class resentment.
Or disliking the wealthy.
Don’t dislike them or corps, dislike that there are no ethics, morals or concern about how they do their books, or wealthy getting all the financial breaks/no death tax etc.
Just don’t want them to keep taking what isn’t theirs, for example : firing workers BUT the bottom line is improving.
Cost of that is huge, but not to them.
Just keep their hands outa my pocket of earned $ and stop passing bills taking money outa middle class pockets with laws/lies.
They can have theirs just don’t take mine cause they can pay off lobbyists and our gov to do their bidding and protect their arses.
This discussion reminds me of the movie IDIOCRACY. The 80 something IQ has dozens of kids and their kids have dozens but the intelligent people (140 IQ) always have an excuse for not bringing a child into this world. The stock market is bad, We don’t own our own home, the schools are inadequate. Maybe the movie was foreshodowing Americas future. We are being dumbed down by reqarding dumb behavior. I personally believe the gene pool could use a little chlorine.
Simply put the 80 IQ doesn’t think. Whoops, did the deed, now we have kid number 8! The problem with the 140s you mention is too much planning. Everything has to be perfect before we have children. Good luck with that! Sorry, ain’t gonna happen on this orb. Not that this is always the case, just generalizing what Shakes added.
“Simply put the 80 IQ doesn’t think.”
Which is an excellent thing. The idiocracy will not require consumer-citizens to think, and the limited jobs available will be doable for those with an i.Q. of about 80. If all the jobs available are minimum wage grunt work, or manual labor, then producing children with an i.Q. above 80 is an act of cruelty, and anti-social to boot. intelligent folks, unemployed and unemployable, are resentful and angry and potential troublemakers.
There is a basic instinctual drive to MAKE kids, not necessarily HAVE them.
Lay off the Txchick. I’d rather have a pal who can discuss money and worldy events than a stay-at-home broodmare who can only talk about little Snotleigh’s bowel movements.
Not all builders are in deep doodoo.
Reston Builder NVR Posts A Profit
Land Options Cited As Winning Strategy
“The publicly traded builder, which also operates a mortgage bank, posted a $67.3 million profit ($11.72 a share) for the fourth quarter. That was down 50 percent from the fourth quarter of 2006, when profit was $135.2 million ($20.86). The company builds under the names Ryan Homes, NV Homes, FoxRidge Homes and Rymarc Homes….”
Washington Post
http://tinyurl.com/2y3knq
What the hell does this have to do with whether pets are better than kids?!
This is the bits bucket! I can post on housing, right?
I detect sarcasm in his post due to an earlier thread.
LOL!!!
In our rental apts building, oneis not allowed to keep pets. Kids are permitted.
Saw my old roomates son’s room, and believe me, there should be a Deposit for kids as well as pets. Sheesh.
Oh NeilIT,
This is too easy. Landlords are supposedly not allowed to discriminate against families. Landlords are allowed to say not to pets.
Whoops my bad,
Should be no instead of not
U.S. Downturn Effects May Ease Worldwide
“…Five to 10 years ago, they said, that level of downturn in the United States would have hit the global economy harder. But with China’s rise, surging oil wealth in the Gulf States and a generally healthy Europe, America’s economic role in the world has become somewhat diluted. The United States unquestionably remains the No. 1 economy — but those below it are mattering more and more.
Economists note, for example, that only five years ago, 33 percent of all Chinese exports went to the United States, a number that has fast reduced to the upper 20 percent range as China has cultivated markets in Asia, Europe and beyond. …”
http://tinyurl.com/2zknpj
Washington Post
I like to use the ubiquitous fold-up cloth and metal chair made in China, that sells here for around $6.99 to $8.99, as an example of products finding the highest value markets…
If the Chinese can sell these for the equivalent of $15 in Europe, why would they push more on us?
The same chair will probably cost $20 (yes in USD) in any branded store in China.
The problem with your argument is that you assume the manufacturer is going to get a fixed fraction of the selling price. The fact is that taxes and overheads are a lot higher in Europe (and even in China) than they are in the USA. That doesn’t even take into account the volumes, styles, labeling, safety regulations etc etc that make the USA a vastly bigger market with better margins for the most part.
Maybe because most of that difference is in import duties and VATs. The Chinese don’t get a penny more.
From Lex: (Not sure if link will work for non-subscribers)
Distressed LBO debt
“Before credit markets turned toxic last August, a favourite game was to pinpoint the next big leveraged buy-out target. These days, it is more fun to guess where the first buy-out blow-up might occur.
Private equity likes to fix problems behind closed doors. But while the equity is private, much of the associated debt is not. Martin Fridson of Distressed Debt Investor has analysed the pricing of 176 bonds and loans relating to US LBOs completed between January 2002 and September 2007. Some 30 per cent of this debt currently trades at distressed levels – that is, bonds have option-adjusted spreads at least 10 percentage points above Treasury yields and loans are trading at 90 cents or less on the dollar. By way of comparison, the wider leveraged debt universe, as represented by bonds in Merrill Lynch’s Master II High Yield index, has a distress ratio of 19 per cent.
When plain vanilla debt is trading at distressed levels, the message is pretty clear. LBO-related debt, however, made extensive use of very equity-friendly financing such as payment-in-kind notes. In the current environment, demand for such exotic structures has dried up. That has helped to blow spreads wider. In addition, there remains a substantial supply overhang, with a high-yield backlog of some $220bn still to be worked off, according to Standard & Poor’s LCD.
Clearly, though, looming recession and frozen credit markets mean the risks to highly leveraged businesses have increased. Beyond debt spreads, investors should look closely at cashflow trends in the underlying business or sector to help gauge distress levels. Another clue may come from vulture funds, particularly those inside the private equity houses themselves. When they swoop in, they will, in part, be hunting for bargains. But they might also be seeking to shoehorn themselves into their rivals’ investments, in anticipation of a deal turning sour.”
http://tinyurl.com/228xdz
FT Lex
I need some advice regarding investment of my future dreamhome nestegg. I switched to T-bills of varying duration about a year ago, but I have several about to expire and the current discount rate for a 182 day bill is only 2.31%. I am considering returning to CD’s since my credit union is offering double this rate (at least as of yesterday). The rate is the same for one or two year terms. In view of the present downward trend in rates, should I consider these longer terms? Thanks for your suggestions.
It seems like you’ve already answered your own question. Rates are trending down, and look to stay down for a while. If the rate offered is the same, the choice seems clear to me. Of course, I’m just some random dude on a blog, and you should probably make decisions like this for yourself.
I guess my question is how long do you think this downturn in rates will last. Many have previously posted (and I agree) that at some point rates may have to rise dramatically. I’m just asking for opinions about when this might occur.
You’ve a strange screen name for one asking for pat predictions about what will happen when.
L-t T-bonds have had a fantastic run since last August, but yields have a hard floor at zero pct, and the 30-yr bond yield hit an all-time record low within the last week or so. In the same way that trees do not grow to the sky, neither do T-bond yields drop all the way to zero, especially when policy incentives favor reflation over recession.
If you like T-bonds for their credit worthiness, then you might consider keeping the duration short until long-term rates get a bit more attractive again (and they will in due time).
or you can just buy several of varying durations to spread the risk.
Or send the $ to me…lol.
Thanks for your comments.
Sometimes you just need to realize there is not a lot of opportunity for return. Sometimes you realize that your primary goal is not capital appreciation, but capital protection.
If the safe rate is 2%, what is the risk premium that will make you willing to go for a less safe rate?
Like last time, they would love for you to perceive the safe rate as so low that the stock market makes more sense. Many will take this route.
I know my limitations. I won’t be dabbling in the stock market anytime soon.
Wife and I are looking at this now.
I’m leaning towards CFC cds. They are FDIC insured.
Interest is not insured.
This was also my understanding, but I think I recall someone posting about a week ago that the interest was also covered subject to the $100,000.limit.
I heard the same thing, not sure though
FDIC is insured/insurance, but the fine print states your money, when asked for by you, can be stuck with the bank for 7 or 10 yrs, unless that has changed.
So, while it is “safe” it is also “safe” from YOU and me.
Another reason not to go condo:
Reading the paper on the bus last night I came across a story that the Chicago Police Department was investigating a property management company.
The management company, Regent somethingorother, manages 40 condo associations in the city. One of their charges, a condo building in Bucktown started to get calls about unpaid bills - seems the managers weren’t paying them.
The association then went to the bank, expecting to find around $350,000 in their account. What did they find? $40. Seems the rest were put into “mutual funds”.
Now I ask the HBB, condo reserves and operating accounts holds lotsa dough. How widespread might this sort of thing be? Yet another facet to this story.
Where was the condo association treasurer all this time?
If the association hired a management company to run the building and gave them free access to the bank account, why should they be surprised if the management company ran the building and “managed” the bank account?
You always make sure the management company is insured and bonded and countersigned by a board member for all check withdrawals.
I mentioned something about rising inventories in Professor Hamilton’s breakdown of the contributions to GDP growth, posted here last weekend (Saturday?).
To clarify this point, one of the components of GDP growth comes from changes in inventories. This component moving the same direction quarter after quarter (as in steadily rising during the period of Professor Hamilton’s data) may be indicative of an equilibrium adjustment which is currently underway. For instance, if inventories are growing steadily over time (as they have been in the U.S. national housing market since early 2004), this is an indication that at current price levels, purchase demand (which reduces inventories) is not keeping up with supply (which contributes to inventories). Something’s gotta give in this case in order for the market to restore equilibrium: Either prices have to fall (which reduces the rate at which new supply is added to inventory and increases the rate at which demand removes inventory, thereby allowing supply and demand to balance out) or else inventory will continue resembling a tree growing to the sky.
The implication at the firm level is they either have to cut production or reduce prices, both of which can result in downward revisions to previous earnings projections (which assumed that trees grow to the sky) — i.e., worse-than-expected financial results.
BULLETIN U.S. STOCK INDEXES RETREAT EARLY WEDNESDAY, WITH FED NEWS JUST HOURS AWAY
ECONOMIC REPORT
GDP slows to 0.6% in fourth quarter, U.S. says
Housing investments fall at fastest pace in 26 years; core inflation higher
By Rex Nutting, MarketWatch
Last update: 9:39 a.m. EST Jan. 30, 2008
WASHINGTON (MarketWatch) — The U.S. economy slowed sharply in the fourth quarter, growing at the weakest pace since the economy was pulling out of recession in 2002, the Commerce Department reported Wednesday.
The 0.6% annualized growth rate in gross domestic product was lower than the 1.1% expected by economists surveyed by MarketWatch. The drag from inventories was larger than expected. The economy grew at a 4.9% pace in the third quarter.
http://www.marketwatch.com/news/story/us-says-gdp-slows-06/story.aspx?guid=%7B9C5A0518%2D549D%2D4A8D%2D8666%2D881C32657085%7D
“In 2007, orders of non-defense capital goods rose 3.5% after double-digit increases in 2005 and 2006. The 2007 increase in orders of non-defense capital goods is the smallest gain in the past four years.”
Northern Trust Bank
29 January
To add to Herb’s basic point, a given house selling at a particular price looks far less affordable when you learn the comps have recently been falling in price at double-digit annual rates than back when many people believed they would continue going up in price by 20+ pct forever (as many Los Angelenos apparently believed back in 2003).
Housing: It’s Affordability, Stupid!
8:49:03 AM January 30th, 2008
As the mortgage mess gets worked through, and interest rates fall, there’s one more piece of the puzzle that still often gets lost in the noise: Affordability. In many parts of this country, houses are still out of reach of most Americans, especially in markets that shot up the highest.
The San Diego Union-Trib this morning has a lead article that shows that despite sliding home prices in America’s Finest City, the median-priced home of $440,000 is still out of reach for most city residents. Kick that up a notch to newly built homes and resales in many parts of this country, driven by loose money, where prices range anywhere from $600,000 to $1.5 million and even higher: At the higher end , there is simply a limitation to affordability — especially as credit standards tighten, commodity prices edge higher and salaries barely budge. Credit standards are an important part of that equation. Doesn’t matter whether you live in San Diego, Minneapolis or Atlanta.
At some point, all of this has to revert to the pre-housing boom mean — whatever that is! — before the dust settles.
http://blogs.marketwatch.com/greenberg/2008/01/housing-its-affordability-stupid/
This is the article he references (I think Ben may have already posted it yesterday, but for convenience, here is a link):
http://www.signonsandiego.com/uniontrib/20080130/news_1n30housing.html
Miami’s No. 1
Withering of nation’s home prices continues
San Diego’s decline ranks No. 2 in index
By J.W. Elphinstone
ASSOCIATED PRESS
January 30, 2008
NEW YORK – U.S. home prices plunged by a record 8.4 percent in November, marking two years of slowing returns, according to a major index released yesterday.
http://www.signonsandiego.com/uniontrib/20080130/news_1b30homes.html
Wow. Given that Miami was late to the bubble pop (about a year later than SD and the Florida west coast), that’s quite a quick turnaround. They don’t mess around in Miami!
Did someone raise questions about this claim last night? (I think it was Housing Hanky Panky, and it had to do with insurance issues, but not sure on the details. And I believe there may also be a possibly-related lingering question of who will be left holding the bag on CFC’s corporate debt.)
Countrywide deal still ‘a go’
BofA’s buyout plan not derailed by mortgage lender’s loss
By Alex Veiga
ASSOCIATED PRESS
January 30, 2008
LOS ANGELES – The $422 million loss Countrywide Financial reported yesterday didn’t appear to scare off Bank of America.
“At this point, everything is a go to complete this transaction,” Bank of America Chief Executive Ken Lewis said at an investor conference in New York.
http://www.signonsandiego.com/uniontrib/20080130/news_1b30country.html
I’ve seen lots of articles in our small paper about stealing funds from, PTA’s, baseball associations, fund raisers, fake car warranties, and on and on. Condo associations would not surprise me one bit.
The latest here is the library reported that a bronze, life size statue of a boy and girl sitting on a bench, reading a book (wgt 400#),which sat at the entrance, was stolen Sun night. It was attached into the ground and they said it would take 2 or more people to move it. The same night the copper downspouts on the Lutheran Church in town were stolen. The price of metal is definitely affecting what people are taking.
In Weimar Germany there was a brisk black market for metal doorknobs, etc. Coincidence?
Who were those masked firms?
The loan bankers.
FBI probe targeting subprime industry
SEC joins review of 14 unidentified firms
By Alan Zibel
ASSOCIATED PRESS
January 30, 2008
WASHINGTON – The FBI said yesterday that it is investigating 14 companies for possible accounting fraud, insider trading or other violations in connection with home loans made to risky borrowers.
http://www.signonsandiego.com/uniontrib/20080130/news_1b30subprime.html
Poor Yahoos…
Yahoo will lay off 1,000 workers
By Michael Liedtke
ASSOCIATED PRESS
January 30, 2008
SAN FRANCISCO – Yahoo’s financial funk deepened at the end of 2007, prompting the slumping Internet icon to draw up plans to lay off 1,000 workers.
http://www.signonsandiego.com/uniontrib/20080130/news_1b30yahoo.html
Suburbs
Shattered Dream
Ford Heights in Chicago
Question I just called Palm Beach county property appraiser office and asked what would happen if I bought a house for $150,000 that the county appraised at $350,000 she told me I would pay 2% on the $350,000, if this is so I might as well pack my kids up and head out of the state with my $100,000 and my 787 fico score.
Moral hazard?
According to Bloomberg, if the Fed cuts rates low enough, the foreclosures due to interest rate resets will not happen.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aW_McCD_XZSI&refer=home
However, that would mean that if the FED ever raised interest rates, thousands would lose their homes and banks would take a bath. So the FED would be trapped.
Inflation will kill those on fixed incomes. Senior citizens? No, Social Security goes up every year. Wage earners.
“… the foreclosures due to interest rate resets will not happen.”
I am not sure where they get this stuff, but I am highly skeptical. It is true that lower interest rates would shift the extensive margin of foreclosure among ARM holders facing resets. However, so far as I know, ARMs also eventually require amortization of principle, and lower interest rates will not suffice to help many people who bought houses they cannot afford to be able to suddenly come up with the income needed to cover debt repayment — even if the rates drop to zero!
1. People are defaulting before their resets.
2.”Inflation will kill those on fixed incomes.” Yes, this means a lot more folks than seniors - it means just about all W-2 workers because there will be no (meaningful) wage inflation this cycle.
It looks like there is still no such thing as a free lunch. The “free money for everyone” concept is a political illusion, and the harsh reality is that one group generally has to pay for bailing out another group.
Wage earners (absent government employees or other union members) are on more of a fixed income than are social security recipients.
The latter have at least a nominal expectation of a COLA. Wage earners are just lucky to have a job next year.
“…The last time the Fed had a long cutting cycle was back in 2001. The Fed cut eleven times in eleven months, and eight of those cuts were by 50bp, for a total of a 4.75% drop in the Fed Funds Rate. But mortgage rates were actually higher throughout this drastic cutting cycle, because inflation ticked higher. Let’s look at more recent history, and as we have pointed to previously: the Fed cut
by 50bp on September 18, 2007, and after prices enjoyed a move higher that afternoon, Mortgage Bonds lost 94bp over the next two days. On October 31st, the Fed lowered by 25bp…and over the next five trading days, Mortgage Bonds lost 78bp. On December 11th, the Fed lowered by another 25bp, and over the next two days, Mortgage Bonds lost 64bp. Most recently - the surprise 75bp cut by the Fed cost us about 150bp on our rate sheets over the next two days….”
Mortgage Market Guide
Inflation will kill those on fixed incomes. Senior citizens? No, Social Security goes up every year.
SS only goes up about 25-50$ per yr according to the seniors that I know personally. It isn’t much at all.
want to live in a mcmansion here is your chance
http://newyork.craigslist.org/jsy/abo/555023735.html
Economy Nearly Stalled in 4th Quarter
Wednesday January 30, 10:48 am ET
By Jeannine Aversa, AP Economics Writer
Economy Nearly Stalled in 4th Quarter and Suffers Worst Year Since 2002
“We are not happy with 0.6 percent GDP growth,” Commerce Secretary Carlos Gutierrez said in an interview with The Associated Press. “We now need the full Congress to move forward as soon as possible because consumers — the American people — are waiting for that check and that is going to help them.”
http://biz.yahoo.com/ap/080130/economy.html
well i really dont know how far they think that check is going to go? and am i correct in assuming that the rebate check is only a prepayment on next years tax return?
I’ve heard conflicting reports on what the “rebate” is. I suspect the idea is to continue to make it sound like a true tax cut, but when it is revealed to be an advance the response will be along the lines of, “What? We never said it wasn’t an advance.”
I assume that the idea is a short term economic kick, for the little guy who spends 100% of his paycheck to spend this as well. Therefore, I assume it to be an advance.
Perhaps HBB moderator Mr. Ben Jones has reviewed this, but the stimulus package of ~ 200B is spread over 10 yrs so that it only costs 150B. Sad, but true -
http://www.house.gov/jct/x-9-08.pdf
2 pg pdf
“The real work of men was hunting meat. The invention of agriculture was a giant step in the wrong direction, leading to serfdom, cities, and empire. From a race of hunters, artists, warriors, and tamers of horses, we degraded ourselves to what we are now: clerks, functionaries, laborers, entertainers, processors of information.
Wealth should come like manna from heaven, unearned and uncalled for. Money should be like grace, a gift. It is not worth sweating and scheming for. Money confers the power to command the labor of others. Love of money is love of power. And love of power is the root of evil”
—Ed Abbey
Strong dollar policy is useful fairy tale for U.S.
While it has little market relevance, analysts say it’s more than just myth
By Lisa Twaronite, MarketWatch
Last update: 6:31 p.m. EST Jan. 29, 2008
SAN FRANCISCO (MarketWatch) — Once upon a time, America had a strong dollar policy.
In his 1976 book, “The Uses of Enchantment,” the psychologist Bruno Bettelheim argued that fairy tales, because their fantasy is rooted in real human emotions, offer children lessons with meaning and purpose. Bettelheim might well have been addressing currency markets when he wrote that adults who believed fairy tales are “only a bunch of lies had better not try telling them.”
In a similar way, Treasury Department officials aren’t lying whenever they earnestly recite the familiar strong dollar message. While their words no longer give investors directional clues on trading levels, they continue to offer real assurance that the U. S. government stands behind the greenback.
http://www.marketwatch.com/news/story/us-strong-dollar-policy-fairy/story.aspx?guid=%7B22580957%2DCD43%2D483D%2DA708%2DA7B91BA4F0CE%7D
Just another day in arsonville.
http://articles.moneycentral.msn.com/Insurance/InsureYourHome/BrokeHomeownersTurnToArson.aspx?page=1
Some excerpts:
…These are not necessarily lower-middle-class
people. This is all over the place. . . .
We’re talking some extremely wealthy individuals,
based on the size of the home and the contents of
the home, people who were living some lavish
lifestyles who no longer can afford that.”
He says that anger is another motive.
“These people are so upset. They got tricked into
getting these mortgages, and they never could afford them.”
“If I can’t have this house, no one will,” one
informant reported hearing a homeowner say
before a suspicious house fire.
Please correct me if I am wrong, but I recall some think tank had projected 2.2 m foreclosure filings as a sort of worst-case scenario for the entire future course of the housing bust. Now the news is out that we had 2.2 m foreclosure filings in 2007 alone, and judging from data for San Diego, which shows foreclosures rapidly increasing through the end of last year, I am guessing we ain’t seen nothin’ yet. As of late last year, San Diego foreclosures were occurring at about three times the maximum (plateau) level of the early 1990s housing market bust / GDP recession, and there is no sign at the moment that the rate has plateaued or even slowed its ascent.
Foreclosure Filings Surged 75% In ‘07 as Subprime Mess Grew
By Mike Barris, The Wall Street Journal
Last update: 5:06 a.m. EST Jan. 29, 2008
Foreclosure filings soared 75% in 2007 from a year earlier as credit trouble and falling home values fell on homeowners, a foreclosure-listing service said.
There were 2.2 million foreclosure filings last year. More than 1% of all U.S. households were in some stage of foreclosure during the year, up from 0.58% in 2006, RealtyTrac said.
http://www.marketwatch.com/news/story/foreclosure-filings-surged-75-07/story.aspx?guid=%7BEE64CBB8%2D471E%2D4C44%2D99E2%2D2742A8646C85%7D
The FDIC had calculated 10% of all home owners would lose their house. So far the FDIC figures seems to be holding true. With home ownership down from 70% to 67%, we are about half way through the drop. The FDIC calculated that home ownership would drop to 63%.
see: Scenarios for The Next Recession
Can anyone say what ‘true’ ownership was? We had a lot of specuvestors grabbing up mortgages but they weren’t occupying the property, and occupying the property (via renter or owner) to me conveys ownership by some party.
AP:
“”We are not happy with 0.6 percent GDP growth,” Commerce Secretary Carlos Gutierrez said in an interview with The Associated Press. “We now need the full Congress to move forward as soon as possible because consumers — the American people — are waiting for that check and that is going to help them.”"
There you have it…they are not even trying to hide the fact that we are “consumers” to them first, and American citizens second. All hail the American Consumer!
They should formalize the mind shift, and change the laws so that only consumers could vote, and only in proportion to how much they spend.
But, but, but I just don’t understand the quick disconnect! It wasn’t just 6 months ago the pundits were telling us that housing and the subprime loans would have no effect on the economy. Moral: conventional wisdom is as worthless as teats on a boar.
Junk Yields Flashing Back To ‘01 Slump
By Scott Patterson
Word Count: 517
As Federal Reserve officials discuss the economic outlook today, they might want to turn their attention to junk bonds, which are flashing red.
In June, the Merrill Lynch High-Yield Bond Index showed junk bonds yielded about 2.4 percentage points more than low-risk Treasurys, an all-time low that suggested investors saw little risk in the sector. Last week, “spreads” over Treasurys reached 7.5 percentage points, the highest level in more than five years and very near levels in 2001, a recession year. The amount spreads have widened the past several months — five percentage points — is also in keeping with their move over 18 months in 2000 and 2001.
http://online.wsj.com/article/SB120165818624927345.html?mod=todays_us_nonsub_money_and_investing
Speaking of spreads, the Treasury 3-month to 30-year is now over 200 basis points. The Treasury yield curve hasn’t been so steep since “I don’t remember when.” Usually, but not always, a steepening yield curve portends rising rates. Any insights by anyone as to what this steepening means today?
Bond market smells uncontained future inflation pressures, as the Fed has shifted its priorities to leaning against the slowdown.
did anyone watch the cnbc show “The Millionare Inside” ? i caught about 5 minutes of it last night, and the experts were telling a couple that had lost 300k in value on their home to do a short sale and get out. it makes me wonder how many people are going to flood the banks with calls for short sales today?
link to show:
http://www.cnbc.com/id/17912006/site/14081545/
Ugh. I actually tried to watch part of it, but the whole format just turned me off. I caught the part with one girl who had $70,000 debt and repo’ed cars. I was hoping that it would turn into some Jerry Springer chair throwing spectacle with debtors vs. creditors but sadly it didn’t occur. That was the most incredibly bored looking studio audience ever.
Looks like the Wall Street group would love to have the FB’s investing in the stock market instead of real estate . Cramer is another one that gives advice that will insure his” Mad Money” program keeps going .
Someone said to me when I was very young ,”Always look at what the self interest is in any opinion .”
Greenspan doubts Fed’s ability to prevent recession
http://news.yahoo.com/s/afp/20080130/pl_afp/germanyuseconomygreenspan
“Greenspan told the German weekly Die Zeit that the Fed or political policies could “probably not” keep the world’s biggest economy from sliding into recession, as financial markets widely expected the US central bank to cut its main lending rate.”
Go greenie, go greenie, go greenie, it’s your birthday…
Hey TxChick
Does a 6 lb Northern equal a 10 lb trout?
Fish boil tonight!
Oppenheimer: Banks May Write Down Added $40B-$70B on Further Bond Insurer Downgrades
Fitch downgraded Ambac’s financial strength earlier this month, and Whitney thinks further downgrades are increasingly likely. She added that the government will not bail out the banks if the insurers are downgraded.
http://biz.yahoo.com/ap/080130/merrill_lynch_ahead_of_the_bell.html?.v=1
is there a set time for the fed to announce the rate cuts?
1:15 EST
CST, sorry.
thankyou for the info!!!
Something smells very fishy about a widely-anticipated 1/2 pt cut sparking a stock market rally. Perhaps the market has forgotten how to form rational expectations in the age of irrational exuberance?
http://www.marketwatch.com/tools/marketsummary/
Er, PPT, we could use a little help here. It appears the Challenger shuttle is having problems…
Looks like the PPT jumped in a the last minute and pulled the plug–literally–lost my data feed the last couple minutes of the day and the DOW mysteriously gained about 26 pts during the outage. A lot of other people on other trading platforms also reporting data outages the last couple minutes. Bastards!!
Either I really need to clean my glasses, or else the market is going straight down, which hardly qualifies as a rally in my personal lexicon.
January 30, 2008 2:36 P.M.EST
BULLETIN
U.S. STOCKS RALLY FOLLOWING FEDERAL RESERVE RATE CUT
U.S. central bankers remain aggressive
Fed delivers a half-point cut
Do rate cut announcements automatically come along with extra rally insurance from the PPT?
And the EUR is now racing to the all time high (1,4896), now at 1,4877. The FED has now already lost most of its power, they can’t lower the rates much more. And then? Deflation, Japan style, only much worse.
For now, it looks like they still have the power to set a floor under the opening bell level on the headline indexes in order to convince stock market participants that it is normal for the market to rally when the Fed follows through with a widely-anticipated rate cut.
Mr. Market appears interested in expressing his dissatisfaction with a mere 50 bps cut, but someone is depriving him of his 1st Amendment rights…
Higher l-t T-bond yields are normally bad news for stock prices, especially when projected future earnings are in decline. It’s a fundamental valuation thing, ya know?
The post-rate-cut rally appears to possess neither conviction nor legs, and possibly also lacks clothing.
Awe shuckydurn…
Countdown to the close:11min59sec
January 30, 2008 3:47 P.M.EST
BULLETIN
Rate-cut rally comes apart
Post-Fed-announcement stock sprint proves unsustainable.
Closing half my positions in FXP and in EEV prior to fed announcement. FYI
The top is in in Shanghai. Market to 2500 by the Olympics. FXP to 180.
I turned to CNBC at lunch and just missed Herb Greenberg. He said the issues were affordability and loan practices (I think). The hosts sounded like they were laughing him off afterward.
Anyone catch it?
Sunshine discounts!
http://www.voiceofsandiego.org/articles/2008/01/30/news/dataparty013008.txt
WASHINGTON (AP) — The Federal Reserve on Wednesday cut a key interest rate for the second time in just over a week, reducing the federal funds rate by a half point. It signaled that further rate cuts were possible.
“It signaled that further rate cuts were possible.”
Not too many more; it appears that 0 pct is a hard lower bound on the nominal FFR.
what if the Fed paid savers to spend their savings ? Wouldn’t that beat the hard lower bound ?
Don’t count your baby bull markets before they are born. No worries, though — I expect we’ll see a higher open tomorrow.
MARKET SNAPSHOT
U.S. stocks climb as investors cheer Fed rate cut
Analysts’ opinions varied, but many expected the half-point cut
By Kate Gibson, MarketWatch
Last update: 3:12 p.m. EST Jan. 30, 2008
NEW YORK (MarketWatch) — U.S. stocks on Wednesday shed earlier losses, climbing higher after the Federal Reserve handed investors what was expected, cutting its target lending rate another half a percentage point.
“If you look at the magnitude of the easing that has happened in the last week — you’d have to go back to 1990 to see as an aggressive move — it shows just how concerned the Fed is about the pace of the U.S. economy,” said Art Hogan, chief market strategist at Jefferies & Co.
“I think it’s important to recall that when the market gets what it expects it doesn’t tend to celebrate, at least not in the long run since the market is a forward pricing mechanism,” said Hogan.
Down about 30 points ahead of the Fed decision, the Dow Jones Industrial Average ($INDU: Last: 12,439.58 -40.72-0.33% 4:02pm 01/30/2008) rallied higher, and was recently up 131.5 points at 12,610.6, with 20 of its 30 components higher,…
http://www.marketwatch.com/news/story/us-stocks-rally-wake-fed/story.aspx?guid=%7B36876142%2DB552%2D4CC8%2D80E8%2DECA91CA0B969%7D
“Voting against was Richard W. Fisher, who preferred no change in the target for the federal funds rate at this meeting.”
http://www.ft.com/cms/s/0/6023f138-cf68-11dc-854a-0000779fd2ac.html
Is dollar devaluation risk contained?
Dollar slides after Fed cuts rates
By Peter Garnham
Published: January 30 2008 10:51 | Last updated: January 30 2008 19:42
The dollar lost ground on Wednesday after the Federal Reserve delivered a cut in US interest rates at its policy meeting.
http://www.ft.com/cms/s/0/c96bc238-cf18-11dc-854a-0000779fd2ac.html
“Dollar slides after Fed cuts rates”
Once the dust settles and the fear of giant stock market loses goes away who is going to want a falling dollar low interest rate bond. If I was going to refinace a mortgage I wouldn’t wait too long.
That’s also why I’m going to switch my maturing CDs to shorter maturities, maybe 3-month.
The new paradigm is to sell high P/E stocks. AMZN to 40, GOOG to 400, Shanghai to 2500, YHOO to 12, MOS/MON/POT to 50. A rise in long-term interest rates kills stock values. Without doing the net present value calculation, I would guess a 50 b.p. increase in the long bond at these low levels means a 10-20% decrease in the n.p.v. of future earnings, other things being equal.
Careful though if bits buckets hits 500. That’s a technical buy signal.
Fired Worker Sues KB Home, Countrywide
Wednesday January 30, 8:53 pm ET
By Alex Veiga, AP Business Writer
Ex-Worker at Countrywide-KB Home Lending Unit Sues Over Firing
http://biz.yahoo.com/ap/080130/countrywide_lawsuit.html?.v=2