Bits Bucket And Craigslist Finds For February 3, 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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Name:Ben Jones
Location:Northern Arizona, United States
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Well, I am glad to see that the housing bubble hasn’t affected anybody. Somebody please tell me why high house prices are good for this woman and her child(ren). That’s a rhetorical question–I doubt there is a logical answer.
High house prices in a tight-credit environment tend to keep the riff-raff out!
Tragic tale…
http://www.atimes.com/atimes/Global_Economy/JB01Dj02.html
“To such rebuttal, I politely reply, “Hahahaha! You are a moron, and you should be sterilized before you produce any of your mutant, moron children!”, which usually really upsets them for some reason, as apparently they were unaware that they are complete idiots.”
I like his anger.
NYC boy care to stop with the wife, after work Tuesday…Obivias 201 lafayette st 1 block south of spring on the 6…Fat Tuesday, nice upscale lounge …lets see if we can get others from the HBB too.
I don’t know. This week is going to be pretty busy. Plus, I have a confession to make. I can’t stand zydeco music. For me it’s just a step above hip-hop.
You haven’t head the new stuff….check the link on my handle…my you tube videos
Say, that’s a dangerous idea there - that the average person cannot make money in stocks in the long run.
How many fluff pieces will the MSM run this week exhorting the masses not to hit the panic button on their 401ks? Last week there were to many to count.
This is invtmnt site that is always bullish, if you can’t tell.
thought you might be interested in his “advice”.
Frankly, I sold out in October and was glad of it. All cash went into CU while the flurry (yrs? hopefully not) dies down.
Dear xxx,
For those with a strong constitution, the latest performance chart is posted on the website blog. I suggest waiting until I revise it next month to consider looking at it, but the current report is there for the brave. As my retired stock broker friend told me the other day, “When the brokerage statement comes in the mail, don’t open the envelope.” That may be the best advice I can offer just now. That said, the markets and our portfolios have recovered a bit from the lows and the worst may be behind us.
Here’s a bit of S&P 500 data lifted from Laszlo Birinyi’s web blog. While markets have their normal ups and downs, most consider a 10% drop a correction. When the drop exceeds 20%, it’s called a bear market. First chart, all 10% or grater declines since 1982. As you can see, what we’ve just experienced is about average. Current is –16.27%, average being –17.55% In the second chart I deleted any decline that exceeded 20% from the computation. The current correction is about 2.2% more than average, if in fact the worst is behind us and the low of 1310 on 1/22/08 holds.
I’m hoping the following chart will flow through the yahoo group site. If not, I’ll post this entire message on the website blog shortly.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Is it painful to watch our portfolio values drop so much? Of course it is. Will we recover? In time, we always have and this time will be no different unless one sells at or near the bottom when emotions get in the way of working with facts and experience. In hindsight we would have sold equities on October 8th. Well, that didn’t happen (crystal ball is in the shop) so the next best thing is to understand that corrections happen, that there is a bottom and on average they are realized in about 3 months. The important thing now is to participate in the recovery stage of the correction, which hopefully began on 1/22. To do otherwise is to reverse the equation of buying low and selling high.
AVERAGES: I look at averages a lot, but am reminded that one can get more than his shoes wet crossing a river with an average depth of an inch or two. This is why the portfolio is now holding about 30% AB Treasury Inflation Protection Securities, or TIPS. For the first time in a long time, I’m hedging my bullish bet. If equities go up, the TIPS will go down and we’ll still profit, but not as much as if we were 100% in equities. If equities reverse and continue their downward slide, the TIPS will temper the losses until such time as we can reevaluate the situation and make the next move. That’s the plan.
Cashing out before the House wins is un-American!
Pregnant and homeless in Ontario, CA. Yikes!
and what a kick to all those yuppie types spending 100K for IVF. God has a sense of humor at times.
veni, vidi, vitro
47 years old pregnant and homeless…
and i thought i had problems
lordy
Let’s hope that poor baby ends up in an adoption agency.
Quote from the article: “The veterinarians have spayed and neutered the dogs out here but I haven’t seen any doctors for the people.”
She looks like a poster child for eugenics.
There but for the grace of god, go I.
I may think the thoughts on that one, but honestly, not to be spanking anyone, but seriously, life has its twists and turns to be sure.
More on that Homeless tent city In Ontario:
http://www.latimes.com/news/local/la-me-tentcity3feb03,0,6912374.story
Ontario is an IE region which sprawls over a large area. It is pretty open with 90% of it’s land area factories and Open lots. That tent site is close to or maybe next to the railroad tracts running south and west of Ontario airport. Mission Blvd runs right alongside the railroad tracts and is actually lined with shady Eucalyptus trees, a rarity in the normally barren IE landscape. Lots of open available lots along site the tracts for tent camps. Plus the neighborhoods around there are pretty ramshacle and don’t put up much fuss. Very few cities & communities in CA would allow for homeless tent cities in their hood but Ontario not a nimby area.
There is a growing homeless encampment in Victorville narrows from what i have read on this blogsite. I know that corona has a growing homeless problem in it’s old dwtn area as well. Expect this to be a bourgeoning problem as the recession/depression grows.
There’s a growing tent city for the homeless in St. Pete, Fla. Also a big homeless area in Lakeland that has lots of services for the people. It is a shame to see this sort of thing burgeoning in this country.
Not surprising really, due to bad intents of our ersatz leadership.
“Ersatz”? Nicely done, lad.
For whatever reason, that word got me thinking that this whole thing (wall street, FED, gov’t, re implosion) reminds me of a small scene in Highlander when a hot dog vendor is messing with the cops as he reads the headlines of the killer they can’t catch and laughs, “What does “baffled’ mean? What does ‘incompetent’ mean?”
The Kurgin is coming to bring 1000 years of darkness. OK, sorry. It’s been raining the last two weeks and I clearly need to get out of the house. Sun is trying to burn through!
MrBubble
a growing homeless epidemic and millions of empty mcmansions. think many guest workers may go back home?
guest workers may go back home ?
Its has apparently started here….
Immigrants can always go home again, we don’t have that option.
When I become Supreme Ruler, my first edict will be that any homes other than a primary residence that are unoccupied, will, after the 120th day of sitting empty, be subject to “denial of housing” fines equal to 1% of the home’s assessed value - payable every month, or the house is seized and auctioned off by the county. Of course there would be exceptions in legitimate cases, such as remodeling, but local governments should actively discourage speculation that results in shortages of affordable housing.
I’m going to SD to be homeless- great weather and the bums all had fancy cell phones
I wonder if they all sit around swapping stories about their former homes all day. “We were told in a couple of years we’d just flip the house for an even bigger one! Those bastards lied to us!”
Hooverville
Just imagine what the father looks like. Better yet, don’t. I can’t imagine how much alcohol it takes to drink her pretty.
i thought the same thing nyc boy
you crack me up
i am glad i am sober
So did I but I didn’t think it was politically correct
We live vicariously through a dozen friends & family, that all decided to have kids, when they were in their late 30’s, early 40’s.
I get tired just looking at them being tired.
We are mid 30’s with 2 babies, it’s tiring but a lot of fun
Wait until they turn into Monsters
They don’t turn into monsters unless the parents allow them to turn into monsters. Mine are mischevious and energetic, but know what we won’t put up with.
I can’t imagine how much alcohol it takes to drink her pretty.
Just imagine the amount your wife has to drink, then cut that in half.
LOL
“The struggle between faith and fear will decide the destiny of our nation”
Adlai E. Stevenson, Jr.
My sister who lives in Buckeye, AZ told me I should take a look at reatlytrac.com and tell her what I think. I think realtytrac ran out of push pins. Look for yourselves, its truly amazing.
LOL. When you run out of VIRTUAL push pins; that’s when you know there’s a serious problem!
Oh my gosh. 249 properties in less than a square mile! The map disclosure reads:
249 Properties. Too many properties in area. Reduce results to 150 or less by zooming in or deselecting property types to show on map.
Link: http://www.realtytrac.com/MapSearch/MapSearch/MapSearch.aspx?criteriaType=city&criteriaValue=Buckeye~AZ
You will probably have to cut and paste. The last time I tried TinyURL.com it did not work.
TOPIC..
Where and Why, would you re locate in the western hemisphere,
ie: San Diego, Phoenix, Tuscon, Flagstaff, Paysun,Prescott, Reno, Las Vegas, Palm Springs, Albuquerque,Sante Fe, Colorado regions, San Luis Obispo, Half Moon Bay, Bend, Ashland, Medford, you name it, other places or Hill Region of Tx..any other town not mentioned.
Climate, Cost of living, balance of peoples (trying not to say rednecks vs educated or one religion vs another).
It the job market were better, I’d move to the Pacific northwest. If house prices were cheaper by half, I’d just stay put here in the Bay Area. I don’t know the interior of the country that well, but I’m curious to check out Denver. I like visiting the southwest when it isn’t baking hot, but I haven’t spotted anywhere I’d really want to live there. Eastern US or mid-west/south are pretty much out of the question, can’t stand the weather or the people.
Here are a couple of tidbits I learned over the last year that we bubble bloggers should know:
1) The tax on earnings in my Vanguard money market fund is a maximum of 15% for dividends. The “interest” paid is classified as a “dividend”, since it is a “mutual fund”. Now that I know that, I am moving money from CA Tax Free, to the MM fund. Vanguard MM is awesome, with no CDO’s or MBS junk. The earnings are 25% higher than the CA tax free stuff.
2) Depreciation taken on real estate is recaptured upon the sale and the recapture rate is 25%! That means if you take depreciation (and the IRS REQUIRES you to take it), unless your federal tax bracket is over 25%, you will repay more tax than you deferred! Interesting. All the more reason to make sure you only buy property that strongly cash flows before taxes. Ten times the annual rent is going to be my maximum price. We still have a long way to go to get there.
What fund are you investing in with Vanguard (they are also who I use BTW)? What’s the current interest rate for that fund (if you don’t mind looking it up, otherwise I will just look it up myself).
10X annual rent is reasonable in FL, but is not going to “strongly cash flow” given the incredibly high fixed costs here. I don’t know if I would buy 10X for an investment here, but I certainly would for my primary home. Unfortunately, we are still 15-20X+ annual rent on most of the places I am seeing.
Michael, I have my house fund in VMMXX which is currently 4.29%
And heading south in a hurry. I got out of VMMXX fund a few weeks ago and now I am in VUSTX. Of course this has its ups and downs, but VMMXX will be yielding less then 3% real soon.
If U.S. interest rates follow the Japanese interest rate trajectory of the early 1990s, then VUSTX could be very flat for a long time…
I think interest counts as interest, no divideds. Look closely at the 1099 and all related instructions.
Money market fund interest counts as ordinary dividends.
Please don’t take tax advice off a blog. It just isn’t a good idea.
And just to contradict that good advice let me add a few caustions - some tax characteristics of income from mutual funds are passed through the dividends. Regulated investment company dividends are not exactly like regular corporate dividends. I used to write the tax disclosures for these things. It was a long time ago, so my knowledge is very out of date, but you have to do your own research or consult a professional.
The “recapture” on sale of a depreciated asset is because your deductions reduced your basis in the property. It is recharacterized as regular income (not capital gains) because the deductions offset your regular income over the years. That info is slightly less out of date than the mutual fund info, but I won’t even speak to the 25% number. That may or may not be a new provision. Or it may be an assumption. It is generally considered a very valuable thing to put off taxation to a future date. It may not be valuable if you pay the later tax at a higher rate, but if the rates are equal, paying later is a good deal based on the time value of the money.
“Please don’t take tax advice off a blog. It just isn’t a good idea.”
I would change that a little. “Please don’t take advice off a blog unless you have done your own exhaustive due diligence and will not be putting yourself in a dangerous position financially, emotionally or physically.”
I trust the bloggers on this site more than the dimwits I encounter every day. Still, I don’t trust them enough to take their word without skepticism.
Trust, but verify. Who said that?
Ronald Reagan
About the Russians.
“Trust in Allah, but tie up your camel.”
-Arabic saying
“Never let an Arab tie you up.”
– Camel saying
I mostly agree w/ NY City Boy and Polly, except I suggest one further amendment:
“Please don’t take advice
off a blogunless you have done your own exhaustive due diligence and will not be putting yourself in a dangerous position financially, emotionally or physically.”Caveat emptor.
Hi Polly, I agree everyone should do their own research. I have done mine and believe these are important distinctions most people do not understand. Ask your accountant or enrolled agent.
Here is the link to recapture rules:
http://www.landlordsoftware.com/recapture-tax.htm
The Taxpayer Relief Act of 1997 imposed a 25% capital gains tax rate for unrecaptured IRC Section 1250 gains. When coupled with the changes made by the 2003 Tax Act, all depreciation taken can give rise to a higher rate of tax than the newly reduced 15% long-term gain rate. The effect of which is that you will most likely pay more tax upon the sale of a rental property than the 15%.
I just checked my 1099-DIV from the Vanguard Prime Money Market Fund. It is definetely in writing that I report it as a divedend. It yields 4.29% as of Feb. 1. After paying 15% tax, I will receive 3.69%. The CA Tax Exempt MM Fund pays 2.65%. It is not even a close call. I am in the 33% marginal rate for the Feds (25% effective rate) and 9% marginal rate (7% effective) for the State of CA.
I prefer to keep more of my own investment income.
Your 1099-div from Vanguard is not tax advice to you. Do your own research.
I have to look into this Vanguard MM, but isn’t there a distinction between “qualified” dividends (eligible for the special 2003 tax rules regarding caps on dividend income at no more than 15%) and “nonqualified” dividends (taxable as ordinary income)? I thought it had something to do with the holding period (maybe 180 days?) of the security, meaning that MM funds that invest in short term securities might not be able to pass through the qualified tax treatment through dividend. Does anyone know for sure here how this works? (I do trust, but verify, what I read on blogs, but in general trust anonymous bloggers more than I trust those shills with a vested interest to lie to you!)
The 1099-Div from Vanguard reports all of the dividends I received on their Prime MM fund as “ordinary” dividends, as opposed to “qualified” dividends. I will be calling my CPA tomorrow.
Satchel and smlandlord,
What you guys are reporting sounds much more reasonable/likely than Jingle’s assumptions.
Couple of ways to avoid the tax….Do a tax defered exchange or you can DIE and get a stepped up basis
Hey SCDave, your latter suggestion is a good one. We are all going to die anyway. The only problem with your statement is YOU don’t get the stepped up basis! Very funny. Also true and a good way to pass on tax free gains to the heirs.
“…Vanguard money market fund…”
Their Money Market funds are not FDIC insured, IIRC.
Nope, they are not. Just like almost any MM fund. That why they pay higher interest than FDIC-insured savings accounts.
“Man is devoured by the reproaches of his conscience”
Jaroslav Hasek
Jaroslav Hasek obviously didn’t know many mortgage brokers or developers. ‘Conscience’?? What’s that?
He was just a one-trick pony, but what a pony!
http://en.wikipedia.org/wiki/The_Good_Soldier_%C5%A0vejk
to all football fans enjoy the game today
lets go giants
nothing would be better than beating the pats
Who’s playing today? Seriously…
The NY Giants and the New England Hatetriots, oops, I mean Patriots.
York Vs. England
Bob, there is something wrong with you if you don’t know this
im with bob, i didnt know who was playing eather. all i ever watch is girls beach vollyball.
Pats are the best team ever and will cement thier place in the books. We can all hope that afterwards, the ‘72 dolphins will STFU.
Senater Specter (R-PA) is making an ass of himself with the whole spygate BS and giving the Pats a little more incentive, as if they needed it.
well see at 10pm est
many close calls ;ate in the season and i feel the giants
found a chink in the new england armour
pats have not looked impressive in the post-season
well see at 10pm est
many close calls ;ate in the season and i feel the giants
found a chink in the new england armour
pats have not looked impressive in the post-season
mgnyc
You better run the ball, run the ball some more, oh yeah and run it some more. If Pats get Manning in pass situations ie … down by a couple scores. It’s not only over it’s gonna be uglier than this housing situation. Only difference is it’s going to be over in 3 hours. Pats score 38/45 Giants 17/20.
I have mixed feelings about the game. First and foremost, I don’t really care since it’s not the Eagles or the Bears. Second, it would be pretty amazing for the Giants to beat the Pats. But third, watching sports history being made would also be exciting.
Personally? I’m most concerned with the score at the end of each quarter. Hoping to win a square or two.
Whos on first?
Theatres will be full today.
Um, go Chargers?
Finally! Somebody more behind the football curve than me!
GIANTS RULE!
And the spring house selling season starts tomorrow !!!
Any NAR Liemercials gonna be erred?
i am watching this show on nbc in ny and a personal trainer is looking at a 800k place in manhattan (harlem)
personal trainer-800k?
But it’s Manhattan!
Prices will stay high forever, and the renters will be forced to kowtow and wear dogtags. The homedebtors will be rich, rich, rich!
That means that bare min this guy is making 200k/yr training? That’s ~100/hr 8 hours a day, 5 days a week? This guys is making more then most attorneys training?
I seriously doubt it; personal trainers are very lucky to hit 100K, let alone 200K!
I could be wrong, but this guy better be doing personal training videos; not a personal trainer in a gym!
What do you expect him to write on his application, “male prostitute”?
You don’t know how close to accurate you are. You should look at some of the ads on craigslist.
Wouldn’t that be a dump in Manhattan? I’m not sure but from the little I know I thought Manhattan is pretty pricey everywhere.
I think 800k could get something decent in Harlem. But that’s like saying “200k will get you something decent in Toledo”. The gentrification could unwind at any moment. Keep that between us. Nobody else in New York City seems to understand that.
Times Square could be the seedy place it used to be, very easily.
got Quarters?
I do actually have a personal trainer friend who makes 200K/yr. Of course, he didn’t buy a 800K place, he bought a place on the beach for over a mill. Yikes.
Dont you know Harlem is just about to be bought up by Trump…..
I wish i followed my own advice in 1999 i predicted harlem will be white again in 10-15 years…
There is possibly a serious flaw in this non-economist’s argument, which is that the period he cites for having the U.S. in recession for the smallest share of the time (post-1982) is entirely post-Reagan and predominately coincidental with Greenspan’s tenure at the Fed (1987-2005). The jury is still out on whether this is because of the onset of a New Era of economic prosperity, or rather due to policy procedures which accumulate systemic risk and defer economic pain to later generations. At the end of Reagan’s tenure, there was great concern that the U.S. had built up too much debt (thanks to demonization of taxation with relatively less demonization of fiscal spending during RR’s term in office), but AG soon implemented a fantastic monetary engineering solution for the problem. The long-term economic impact of this change in regime remains in question.
GEORGE F. WILL
THE WASHINGTON POST
Foreign nations buying into the U.S.
February 3, 2008
…
If another recession did start last month, then in the 302 months from November 1982 through December 2007, the economy was in recession only 14 months – 4.6 percent of the time. The economy was in recession 22.4 percent of the time between 1945 and 1982.
A recession-free economy is neither an entitlement nor, truth be told, desirable: The “wisdom of crowds” is real but even markets make mistakes and recessions, aka corrections, are, by definition, constructive. Even so, the modern economy’s rhythms are much less alarming than any previous generation could have imagined.
http://www.signonsandiego.com/uniontrib/20080203/news_lz1e3will.html
After hearing all the discussions about a “stimulus package”, how it works and what its supposed to do, Im starting to think the invasion of Iraq was a “stimulus package”.
Doesn’t war drive demand and consumption up?
And in this war its even better because everything we spend money to blow up, we spend money to rebuild right?
This sounds like a racket.
Submitted for your approval…
A country finds itself uncompetitive on the world stage, overstocked with products of it’s military industrial complex, and you can’t build more armaments, until you use the ones you’ve got already.
From what I read, Iraq is tailor-made for destroying expensive, intricate weaponry, due to constant sandstorms and excessive heat.
win-win-lose
“…until you use the ones you’ve got already.”
Can also sell ‘em.
All that equipment has a shelf life both in Physical deterioration and the obsolescence in technology….Its it will be pretty much worthless when we finally bring it home….Just one more “Massive” funding that will be required to replace it all…Kind of makes you wonder why you would even want to be the President of the U.S. in the future….
‘…invasion of Iraq was a “stimulus package”.’
There is a school of thinking in economics that thinks blowing things up is good for the economy. I call it the “Broken Window School.”
“Im starting to think the invasion of Iraq was a “stimulus package”.
It was a stimulus for shrub’s package.
this is almost better - NY times wakes up and smells the bust - -also notice how the tone of the story isn’t half as revealing as the chart that accompanies:
http://www.nytimes.com/2008/02/03/nyregion/03property.html?ref=realestate
This is a really interesting piece in light of all the realtorspin they’ve printed insisting prices have gone up…
Realtor pandering (advertising) must have come to an abrupt halt.
They’re still spinning.
It’s not as bad as CA and FL. BFD!!! It’s still gonna be a bloodbath.
Most of the new condo buyers you find posting on nyc websites that nyc is teflon are too young to remember the late 80’s early 90’s declines. i am not
history has a funny way of repeating itself
maybe in the not to distant future we can actually
get a place we like at a fair price that makes financial sense for us. until then we rent we save and hope the fed does not make our savings totally worthless
It’s not just the young. A co-workers tw-t wife was yelling at me and my wife and how stupid we are for not buying. I nearly punched her. She said that NYC real estate never goes down. I said, “what about the 30 percent drop in the early 90s?” Silence. It was the only time she shut her f—ing yap.
Stupidity does not discriminate based on age, gender, race, sexual preference or favorite color.
I think you need to change your name to Baudelaire Boy because your spleen is quite active these days. I like it.
And credit the man quoted, James W. Hughes dean of the Edward J. Bloustein School of Planning and Public Policy, for the fact that I didn’t get stampeded into “buy now or be priced out forever” in the 1980s. I had just finished graduate school, and had taken his housing markets course.
“Housing prices in New Jersey rose 145 percent from 1980 to 1988, then fell about 9 percent by 1992.”
I will correct the Professor in one sense. The 1980s fall was much greater than the 9 percent he quotes, because of the well known fact (learned it from him) that more expensive homes are more likely to sell in a bust. A rowhouse identical to mind on my block sold for $300K in 1987 (to a Japanese buyer); we bought ours for $209K in 1994. The real value of co-ops and condos fell even more.
“From 1998 to 2006, the suburban housing market was sizzling again, with prices of homes in New Jersey rising 135 percent during that period.”
Everyone may have forgotten it, but this bust will indeed seem like the 1988-97 bust in the Northeast. But last time, the bubble happened in many more places.
The good news? Last time there was a commercial real estate construction bubble that was even bigger than the price bubble in residential, but this time there wasn’t. That’s because the commercial real estate industry still hasn’t recovered from the late 1980s bust, and lenders are still reluctant to lend for speculative buildings. NYC has far less office space than it did before 9/11, but you still can’t get a spec office building financed. Will residential go the same way?
I meant to say, last time the bubble happened in fewer places.
wt -just was perusing craigslist and saw a nice 1 bed coop in windsor terrace off the park. really nice except the price $399
1994 was good year to buy lucky you
1987-1991 in NYC was time to buy, but everyone was afraid the bust would last longer. Banks wouldn’t refi home in CA with cash out
(due to income that is STILL the same. Don’t tell Me that income has gone up. I don’t believe it. )
But anyway, with cash out at that time, could’ve purchased a home outright in CT or NY but again income wasn’t high enough.rent would have covered the casa in CA.
And the Funny financing didn’t come till yrs ltr.
2 bdrom condo on upper east side near Gracie manse was 170k with windows in kitchen and everything.BIG.View of east river.
Wow — what a great anecdote WT! I know there is a lot of leverage and speculation in the small multifam market in the boros (you can see a lot of ads for half-finished small apts / mixed use bldgs), and quite a few lux condos that have started going rental out here — because without easy credit and a booming market, most boro buyers can’t afford a half mil or more for space.
Mgnyc, I’ve just started getting desperation calls from Realtors and even my bank (they know I’m a bubble sitter and are desperate to get me in a mortgage) - just hang on, it’ll only get better from here!
housegeek funny you say that i just got a solicitation call
9:35 am on sunday!!!
in the past week i have been getting harassed by banks and any jackass selling something calling my house at odd hours
i must be on a list or something.
and the amount of new credit offers has really increased in the past few weeks. we have great credit and no debt
i can see the light at the end of the tunnel and my wife and i are prepared to wait it out as long as it takes
funny anecdote- was watching the millionaire inside on the comedy newtork oops i mean cnbc last night
they had these people on who were in major debt and the common theme was sell your house and be debt free quickly
got me thinking. why buy? all these homeslaves were miserable and drowning on their castles
How the tables turn - from the few-years-ago pitches that buying a house was the investment of a lifetime, and helocs could rid you of credit-card debt…
“That’s because the commercial real estate industry still hasn’t recovered from the late 1980s bust, and lenders are still reluctant to lend for speculative buildings”
True WT, but don’t forget about good old Harry Macklowe.
http://tinyurl.com/36obfg
I believe WT is reference to new construction of office buildings, not already-existing properties.
Agreed, but I was merely noting that banks nevertheless were making some pretty stupid or speculative commercial real estate loans.
Interesting info on CRE, WT. Now I’m beginning to understand why many REIT stock prices rose so much through early 2007: there wasn’t much new office space being developed (although national retail space is another story, I believe). In the past, CRE typically began to fall a year or so after a residential boom would end. In fact, REIT prices have fallen from their early 2007 highs — but some REIT bulls are claiming that the bottom is in. I find it hard to believe that the REIT correction could be done already. What’s your take?
Here are my take-home messages from that chart:
- The effect of the current “economic slowdown” on home prices is remarkably reminiscent of that of the early-1990s recession’s effect on home prices.
- The long-term levels of NYC-area prices correlate 90 pct or more w/ the long-term levels of the 10-city region.
- It appears that the rate of price decline bottomed out last time around spring 1991, but prices continued falling in the NYC area as well as in the 10-city area through early 1992.
- Price appreciation was meager in the NYC area from 1992 through 1996.
- Prices were soft and often times declining in the 10-city average through the end of 1996, before housing bubble home price inflation began building through the next nine years.
- The rate of price decline in the 10-city average is already faster than at the worst point in the early-1990s, with no sign yet of bottoming out.
- The deceleration in home prices this time occurred much more rapidly than in the last bust, over a longer period of time, starting off a much higher base. Here are rough calculations (get the actual dates and data from S&P’s if you like precise calculations which differ negligibly from my rough ones):
Last time –
Peak 2/89 = 12 pct annual appreciation rate
Trough 2/91 = 6 pct annual rate of decline
Deceleration = (12+6)/(24 mos) = 3/4 pct / mo
This time –
Peak 8/04 = 22 pct annual appreciation
Current 12/07 = -8 pct annual rate of decline
Deceleration = (22+8)/(30 mos) = 1 pct per month
Conclusions:
1) It is not much different in NYC than in the rest of the country.
2) In stark contrast to George F. Will’s blithe reassurance about smoother business cycles post-1982 (see my post above), the amplitude of the decadal U.S. housing cycle has massively increased.
3) It is indeed different this time: IT IS MUCH WORSE.
4) There is no need to even read the text of the story to take these messages home.
‘The latest set of numbers “reinforces our sentiment that the market has, in fact, turned,” Daniel Baum, the chief operating officer of the company, said in the report.’
In case you don’t trust your sentiment, just look at the damn graph that accompanies the story!
Bad news for those would-be sellers who think the market will come back after the Souper Bowl:
‘Homeowners who are waiting for the market to rebound to sell their houses will regret that decision, Mr. Otteau said.
“For those sellers who’ve decided to wait until spring to get what they think their house is worth, the spring they’re waiting for is a very long time off,” Mr. Otteau said. “Unless you have the ability to wait this out for five years, waiting is a losing game.”’
P.S. I am willing and prepared to wait five years if necessary before buying. I am wondering how many wannabe sellers can say this?
Crisis of the Real
http://www.minyanville.com/articles/index/a/15724
txchick57 - I have a friend in Fort Worth looking to adopt a bulldog. Not sure if they know the differences between the French and other types… but I figured you seem to know up from down on where to start learning locally. Is there a website for the local rescue groups you can I suggest I start them out with? Thanks.
http://www.dfwbulldogrescue.org/
http://www.frenchbulldogrescue.org
http://www.frenchbulldogvillage.com
Thank you.
He had to write all that BS to tell us the market was unstable
?
I think his point was that we are at an inflection point. As a side-effect, markets are unstable.
Hello, can anyone tell me which states are non-recourse, regarding walking away from au upside-down mortgage? I believe California is, what about the other bubbly states?
AZ is non-recourse.
Some stories from the front lines in Loveland, CO.
Visited some friends yesterday. They live in a neighborhood of custom built 3000-4000 sq ft homes on 1 acre lots. These houses are “estimated” to be worth 400-500K.
Anyway, they were telling me about how some of the neighbors are in construction, typically smaller subs or individual freelancers: tilers, trim carpentry, and other higher end work not yet done by illegals out here. Long story short, the big house, big pickup truck boys cannot find any work whatsoever and are in full panic mode. Our friends found this out when these folks all of a sudden put their houses on the market (good luck with that, nothing over 200K is selling now), which is unusual for that neighborhood. I suppose that it will soon be a buyers market for those super duper diesel pickups those guys love to drive, as well as the other toys they favor (boats, quads, trailers, RV’s, Harleys, etc.). What is so funny is that they were still smug last summer, thinking that the gravy train would never end and that their near 200K incomes were secure.
It will be interesting to see what these guys end up doing. I’m expecting my mail box to be clogged with remodeling and basement finishing offers. Too bad people tend not to pop for those sort of projects during a recession. Or maybe they will just get ordinary jobs. It will be interesting to see these guys go from 6 figure incomes to working at WalMart or Home Depot (assuming that they can even get that).
Some of these guys were surviving off of commercial construction, but that party has ended as well. The last gravy train was a new hospital built in the Centerra area. Also, a new WalMart went up last year, but I expect that most subs lost money on that project. All expansion in Centerra has come to a grinding halt.
Meanwhile, our local city council is getting ready to throw a million $ tax break at some small maker of home alarm systems so they will expand here. The owner is promising the sky: hundreds of 70K jobs (not now, but “soon”). Just for kicks I visited their web page (http://www.coloradovnet.com) and they didn’t even have a jobs link. Sure, big hiring is imminent.
Oops, this reply doesn’t go here.
I used to drive through Loveland early every morning on my way from Ft. Collins to Boulder (commuted to grad school for one semester). It was such a pretty and sleepy town, as were many of those Front Range towns back then. It was in the HP days. Loveland was one of the few towns I would’ve considered living in. Sounds like the bubble’s really hit it hard, too and things will get worse for the construction people. No hope in Home Depot jobs.
Loveland is desperate to replace the thousands of jobs lost at HP and its spin off Agilent. The vNet people are the ones that started Colorado Memory Systems years ago (which was eventually acquired by HP), so I’m sure that the city fathers are hoping that lightning will strike twice. vNet is “promising” about 400 new 70k jobs by 2012.
Sounds like the bubble’s really hit it hard
There has been some rez construction here, especially at the lower end and closer to I-25 (for easier commuting to Denver), but I think that the lions share of the work has been in commercial. A ton of retail and office construction in Centerra (the new office space mostly cannibalized current businesses). They have so overbuilt commercial and retail that by some counts there is now a 10 year supply. The new Promenade “lifestyle” center is 3 years old and still has empty store fronts. The only restaurant that I have seen a line at is the P.F. Chang’s, all of the other chain places are walk ins, even on Sat nights.
My grandson lives in Longmont I will be visiting there in early April. When I was there in August of last year there were loads of houses for sale. On one street there was 3 of 6, two to three year old houses for sale. In the neigborhood on the other side of Pace Street there was 11 houses for sale in area where there were about 20-25 houses. They were all way overpriced.
PF Changs: oh, how I hate that restaruant with a passion. Why must every company event and every birthday take place there?
I think that Longmont actually started to believe that it was paart of Boulder. I don’t like the place.
“Long story short, the big house, big pickup truck boys cannot find any work whatsoever and are in full panic mode.”
Budweiser University = hard times during hard times.
Too bad inflation is driving up beer prices just as tough times lie ahead…
Read this ad (below) from a seller who is resorting to Home-Selling Psychology 101. I don’t know about you, but the clothesline is the deal closer - LMAO.
“3 Bedrooms, 1.75 Bathrooms
1558 Square Feet
We received a $20,000 lowball offer on our house this week from an out-of-town Realtor who was “fishing” for a good deal. Of course we turned it down. Yeah, our home’s been listed in various ways since last June, but we’re not desperate. To tell the truth, our home is worth every penny of our asking price and much, much more. We have an obligation to protect the neighborhood’s property values and not sell ourselves short. We worked hard for our equity! Based on current appraisals and comps our newly adjusted price represents at least $20K in solid equity. We’re not looking to make money off of it. $269K is about what we paid for it 18 months ago at an already discounted price. We also put in nearly $10K in improvements including laminate flooring. The price equals about $172 per square foot and that doesn’t include an abundant 2-car garage or covered porches or decks. And with interest rates going way down, now may be the time to start thinking making YOUR American Dream come true! Better than new! Better use of space, better insulation, better construction. More space both inside and out - with .41 acre lots. Best of all, there’s NO HOA fee!
“This charming home is in excellent condition and shows like a model. t’s less than 10 years old, has 1558 square feet with absolutely no wasted floor space! There are three large bedrooms with closets in this split floor plan. The great room has 12 foot tall ceilings, a gas log fireplace, and abundant built-ins with glass shelves. Large double-pane windows throughout bring in lots of natural light and great vistas. There’s abundant storage including 2 pantry closets and a self-contained laundry room. The master bath has double sinks, a walk-in glass and brass enclosed shower, a large linen closet, and opens up into a spacious walk-in closet. The garage is over-sized to allow storage and two full-sized automobiles. Outside, there is space for RV parking as well. There’s even a clothesline!”
That $20K “lowball” is gonna be looking pretty good pretty soon. I hate smug sellers who think they deserve nothing less than full asking price. That’s not how the dance goes in real estate (well, excluding the past 5 or so years).
I particularly love the great sales technique that puts the focus on “we”, instead of “you”.
He is not a smug seller! He does not know what he is, but he told you what he is in the second paragraph….”We’re not looking to make money off of it. $269K is about what we paid for it 18 months ago….!!!
He is a KNIFE CATCHER. I never heard that phrase until I starter reading here. It is so apt.
He is a KNIFE CATCHER. I never heard that phrase until I starter reading here. It is so apt.
Its been around for a while. I think I first heard it 20+ years ago.
It has been around Wall Street forever. So far as I know, I am the one who first appropriated it to FBs of houses whose prices are falling.
I’ve seen a few places I would love to have on W. Colo. craigslist. I’m thinking of contacting the owners and offering 1/2 plus they do an owner carry. Just as a service to future buyers. Who knows, I may get lucky - if anyone agreed to it, I’d then ask for even less with a cash deal. Time for schadenfruede.
Are Grand Junction prices still rising?
No, they seem to be stable. Higher end stuff isn’t even selling, and I’m seeing some minor reductions, but not even close to what they should be. Everything else is just sitting, nobody seems to understand that the bubble is over. FSBOs are really delusional. I check the listings daily and it’s always the same old stuff. You can check the MLS for any area in Colorado by going to brayandco.com. Even land isn’t really dropping. I’ve maintained and still do that the oil patch really is no different from the rest of the country, those jobs are out in the boondocks and most of those guys don’t buy houses. My cousin (grew up with him, we’re close, even though he’s a redneck guy) is a driller, has a rig near Parachute, and he just bought an overpriced house in Fruita, but he intends to stay, he grew up in Colo. and is now retuning from Alaska. A lot of the oil patch guys use meth, very high stress profession (my cousin’s as straight as an arrow). That’s where their money goes, plus big pickups.
Anecdotal: a friend in Utah sold her house at the top of the market to a doctor who has a house in G.J. that he can’t sell, the classic buy it now and hope your other house will sell. He’s hurting, she did a partial (very small) owner carry and he’s starting to be late on his payments, he says things are very tight for him right now.
I truly despise these new 400sf bathrooms and who the hell needs 2 sinks anyway.
400sf? For a bathroom?
I grew up with a bedroom that was roughly 12×12. That’s 144sf. When I was nine, I even got it to myself.
And parents wonder why they never see their kids any more.
My two brothers and I shared a bedroom that was about that size. Of course, the only time we were ever in it was to sleep - the rest of the time we were outside.
I have two toilets and it freakin’ rocks. I flip a coin every time I feel the urge coming.
You should’ve included a link so I could send them a thoughtful and diplomatic response.
Read this ad (below) from a seller who is resorting to Home-Selling Psychology 101. I don’t know about you, but the clothesline is the deal closer - LMAO.
“3 Bedrooms, 1.75 Bathrooms
1558 Square Feet
We received a $20,000 lowball offer on our house this week from an out-of-town Realtor who was “fishing” for a good deal. Of course we turned it down. Yeah, our home’s been listed in various ways since last June, but we’re not desperate. To tell the truth, our home is worth every penny of our asking price and much, much more. We have an obligation to protect the neighborhood’s property values and not sell ourselves short. We worked hard for our equity! Based on current appraisals and comps our newly adjusted price represents at least $20K in solid equity. We’re not looking to make money off of it. $269K is about what we paid for it 18 months ago at an already discounted price. We also put in nearly $10K in improvements including laminate flooring. The price equals about $172 per square foot and that doesn’t include an abundant 2-car garage or covered porches or decks. And with interest rates going way down, now may be the time to start thinking making YOUR American Dream come true! Better than new! Better use of space, better insulation, better construction. More space both inside and out - with .41 acre lots. Best of all, there’s NO HOA fee! This charming home is in excellent condition and shows like a model. t’s less than 10 years old, has 1558 square feet with absolutely no wasted floor space! There are three large bedrooms with closets in this split floor plan. The great room has 12 foot tall ceilings, a gas log fireplace, and abundant built-ins with glass shelves. Large double-pane windows throughout bring in lots of natural light and great vistas. There’s abundant storage including 2 pantry closets and a self-contained laundry room. The master bath has double sinks, a walk-in glass and brass enclosed shower, a large linen closet, and opens up into a spacious walk-in closet. The garage is over-sized to allow storage and two full-sized automobiles. Outside, there is space for RV parking as well. There’s even a clothesline!”
There’s even a clothesline! We have an obligation to protect the neighborhood’s property values.
These two sentences form a non sequitur.
Talked to my sister in Rancho Bernardo, Ca.
She said that many houses burned in the fires a few months ago, haven’t even started being rebuilt, as homeowners had inadequate insurance coverage…
Let me know when you visit her. I would like to meet you over coffee some day.
I’d look forward to levitating over a cup of joe, with you.
Levitating with Levitra? LOL
Speak for yourself, FastPussy.
I take it you’ve never seen a Russ Meyer film!
92128 got reverse 911 calls last week to warn of possible flooding and landslides in fire areas. Problem was, they were supposed to go out over the weekend (prior to big rain last weekend). Many people instead got woken up at 2:45am Tuesday (or Wed, or Mon - too tired to remember).
Nice.
Dude — I cannot imagine where mud slides would possibly hit 92128 (at least most of it seems on high but not too high nor steeply-sloped ground). Do you have any thoughts on this? My impression was that the reverse 911 calls were a mistake so far as many of those who received them are concerned (including a personal friend).
Give me liquidity, or give me debt
(with apologies to Patrick Henry)
Me thunk liquidity = debt. ME CONFUSED.
You gotta go with the quote that got you there.
“The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.”
Patrick Henry
not sure if this is old news around here yet-but from yahoo finance
a 25% additional decline may be in the works. go figure?
http://finance.yahoo.com/real-estate/article/104340/Housing-Meltdown;_ylt=Ahnv9XYJdTxqEXhk05hMEdZO7sMF
Yeah, that’s Peter Coy. We’ve have exchanged some emails. He used to make fun of this blog at BW.
Prices are already off 25% or more in many places. It’s just hidden by statistics. Way to stay on top of it Peter.
He was just being Coy.
Ben it is amazing how much material is aken off this blog and used by the msm in ‘their” stories
you can tell by the phrases they use
we are very lucky to have this blog as an avid reader
i feel way ahead of the curve
i bet many of the naysayers are saying wow maybe that
ben jones and friends were on to something
“He used to make fun of this blog at BW.”
Does Peter prefer his crow baked or broiled?
http://www.businessweek.com/magazine/content/08_06/b4070040767516.htm?chan=top+news_top+news+index_best+of+bw
You’re not alone, Stucco
http://www.latimes.com/news/opinion/la-ed-dem3feb02,0,3530861.story
http://www.michaelmoore.com
neat video
http://www.dailykos.com/storyonly/2008/2/3/8102/06589/766/448766
http://www.signonsandiego.com/uniontrib/20080203/news_1n3field.html
YES WE CAN! YES WE CAN!
Excellent txchick - Thank You!
“YES WE CAN! YES WE CAN!”
I’ve reached my legal limit contributing to Hillary. Plus, the fund raiser at Rob Reiner’s House in Brentwood was a blast. Thanx to all the motivation from this Hillary bashers.
I remember back when Rob Reiner was funny, and Hillary seemed like a viable candidate.
“I’ve reached my legal limit contributing to Hillary.”
Throwing away money on loser candidates is far more pathetic than throwing away money on rent, IMO.
The biggie is that Obama got an endorsement from La Opinion, the local Mexican paper. He needs the Mexican vote to beat Hillary.
To his credit, he has teamed up with a fine graphic artist.
“fine graphic artist”
A latter-day disciple of Salvador Dali, no doubt.
http://members.aol.com/literatur2000/Museum/Dali_Uhren.jpg
Salted!
This Business Week article inspired to look through their archives .
From 2005:
http://tinyurl.com/2nzur7
Frank Nothaft, chief economist, Freddie Mac:
“I don’t foresee any national decline in home price values. Freddie Mac’s analysis of single-family houses over the last half century hasn’t shown a single year when the national average housing price has gone down.”
James F. Smith, chief economist at the Society of Industrial & Office Realtors: “There’s no national bubble. You have to have a huge deflationary scenario to make a national bubble make any sense. The Fed isn’t going to lose control of the money supply and take us back into a very significant deflation and cause a collapse in housing prices.”
http://tinyurl.com/3cvgnm
“Overall, low interest rates, a solid economy, and good growth in income and profits are continuing to support housing, despite recent jitters by a bubble-wary market. In our view, the sector’s peak will likely not be seen until 2006. Housing has powerful momentum, and mortgage rates should remain near historically low levels of 7% or less in 2006. Indeed, these rates may moderate somewhat if the Federal Reserve chooses to pause in its tightening path at some point early in the year, as many expect. A housing-sector correction will clearly remain a big risk through this business cycle. But no meaningful evidence shows that it will emerge anytime soon. ”
From 2006:
http://tinyurl.com/ydxaks
“Depending on whom you ask, the winds may already be shifting for the housing market. All year, economists have warned of a bursting housing bubble and its potential impact on economic growth. However, a recent stream of encouraging data has some prominent prognosticators changing their tune. One of the first in line was Alan Greenspan. As recently as May 18, the former Federal Reserve chairman put an exclamation point on the housing slowdown when he declared, “The boom is over.” But now, the “worst may well be over,” Greenspan was quoted as saying Oct. 7, after mortgage applications posted their biggest weekly gain since June, 2005.”
For good measure an interview from David Lereah:
http://tinyurl.com/2whn8p
“I’m getting tired of all these doomsayers. We live in houses, and our houses are not going to crash. This isn’t the stock market…. Local economies are relatively healthy. There’s job creation — this isn’t a scenario where bubbles burst. Can there be one or two or three or several local markets where prices actually go down? Yes. But to generalize for 30 markets or the whole real estate marketplace — that’s absurd.”
Expect BW to write numerous articles in next year or so on how “everyone knew” housing prices were unsustainable.
Looks like it may soon be time to put crow on the threatened and endangered species list, once all these errant prognosticators have their fill.
A draft audit of the Greece (NY) Central School District paints a scathing portrait of overspending, lack of financial controls and wasted tax dollars.
Auditors also found that the project’s construction manager was paid an extra $1 million as directed by two change orders issued in May 2004, and the district could not provide auditors with documentation showing why the payments were made, other than “ambiguous language” in the manager’s contract.
http://tinyurl.com/3c2pt4
Schools…. Local school districts usually get whatever then want every year from the sheeple taxpayer, who bemoans the affect less money will have on the children’s education. When in fact, planty of that additional tax money is fraudently wasted and ends up in the deep pockets of administrators and cronies. With less tax money available dus to the weakening economy, I hope that more schooll districts across the country are audited and held to explain their money wasting ways.
I used to work for a company that contracted with school systems around the country. I can tell you the waste is incredible. But there are many decent people within the systems who are aware of it and do try to do something about it. Usually they’re outnumbered and take the path of least resistance, which means buying new when they could repair.
School construction contracts are the “Crem de la Crem” around here…..The redundancy, particularly with quality control and engineering triples the fair cost of these facilities…..BIG money in building schools if you can get the contract…Change orders that always occur, are like hitting a small loto….
the head schoolmom here gets 260k
And the corporate CEO who had the same head count would get 26 million. SOund like your head schoolmom is underpaid.
Excellent point WAman…
Artificial “turf wars” seems to be the making the rounds in the districts around Syracuse. My town has a little over a thousand students k-12 but “we deserve artificial turf”. The proponents argue our district is supposedly a laughing stock because we don’t have it. Course that has nothing to do with the fact that the field is a muddy mess since no one is doing drainage maintenance while the issue gets re-introduced every year.
As I”ve mentioned though, it’s not just our guys. It’s the latest must have, the granite countertops of school districts everywhere.
Sorry for the double post. Here’s the url to the ad I referenced in my posts: http://flagstaff.craigslist.org/rfs/561129211.html
Pretty funny since I have a 1500+SF place in the same general area in similar condition asking $189K..but then I don’t have a clothesline.
It may be fewer than ten years old, but it looks like a Jim Walters home, shell things that buyers would finish, from the 1950s and 1960s. The 1500 square feet must include porch, driveway, and half the front yard. Installing a clothesline would make it a truly authentic reproduction.
Looks like the POS I used to live in last year. In the Yakima valley that cost me 108k.
SD Realtors(TM) have got economic religion now and are on a mission to share their born again faith with prospective clients. No “there has never been a better time to buy” fluff piece can be found this Sunday.
From the Sunday sdhomes BUYING GUIDE:
‘Stocks, bonds, liquidity and how it all affects us’
By Ken Pecus
Prsident, Ascent Real Estate
The past few months in the financial markets have been interesting, to say the least. Volatility in the stocks and bond markets, fluctuating interest rates on mortgages, a “liquidity crunch” hitting the jumbo loan market and the “Subprime Meltdown” have put a lot of uncertainty in the minds of many people.
…
This piece starts out almost sounding like the Realtor(TM) has a clue about what’s up, but the middle section reads like a straw man description of economics by someone who flunked Econ 1, and it ends with the obligatory nonsense:
“Overall, the current combination of low rates and lower home prices has created the perfect opportunity to purchase real estate in San Diego. The overall economy might be on the verge of recession, but it’s undeniably a favorable financial market to buy a home.”
Empirical evidence calls global economic decoupling theory into severe question…
Foreign stocks’ fall raises questions
By Paul J. Lim
NEW YORK TIMES NEWS SERVICE
February 3, 2008
If stock prices are supposed to reflect the health of the economy, it’s easy to see why the market is off to such a tough start this year. Wall Street is worried that the economy is headed for its first recession in six years, so it’s only natural that investors are spooked.
But how do you explain why foreign stocks, based in economies that aren’t expected to contract, are off to an even worse start?
http://www.signonsandiego.com/uniontrib/20080203/news_1b3invest.html
“But how do you explain why foreign stocks, based in economies that aren’t expected to contract, are off to an even worse start?”
I’ll take that softball:
(1) They were more overvalued to begin with.
(2) They have a higher Beta, partly due to the markets themselves being thinner.
(3) It’s not a matter of whether an economy contracts or not, it’s the change relative to expectations.
True or false: Money market funds are a safe haven when stock market volatility has investors worried about risky assets.
Money-market funds tanking? There are some other options
Most companies not repurchasing shares
By Shefali Anandand Jane J. Kim
THE WALL STREET JOURNAL
February 3, 2008
Even before the Federal Reserve’s latest rate cut last week, yields on money-market funds were dropping, leaving savers in a pinch. Now, the situation looks to get even uglier.
Still, a few attractive alternatives remain. These include higher-yielding certificates of deposits and, for those willing to take on a bit more risk, some short-term bond mutual funds.
Yields of money-market funds have been sliding since the Fed began a series of rate cuts in September to jump-start a slowing economy. The average seven-day yield for taxable money-market funds has dropped to 3.4 percent from 4.7 percent since then.
It gets worse. The Fed slashed rates twice in an eight-day period, and those cuts have yet to be fully reflected in money-market-fund rates. By the end of February, the average taxable fund yield could be about 2.4 percent, said Connie Bugbee, managing director of iMoneyNet, a money-fund research firm.
(Sidebar:)
SAFEGUARDING YOUR CASH
As the Fed cuts rates sharply, yields are tumbling on money-market funds. Here’s what savers can do:
- Lock in a higher rate on CDs, before rates decline further.
- Consider a short-term, high-quality bond fund, such as the BlackRock Low Duration Bond Portfolio.
http://www.signonsandiego.com/uniontrib/20080203/news_mz1b3money.html
CD rates fell sharply after each Fed cut, including the last two.
Despite what the article says, the time to ‘lock in’ ‘high’ CD rates (ie, greater than 5%) was before October or so.
“Despite what the article says, the time to ‘lock in’ ‘high’ CD rates (ie, greater than 5%) was before October or so.”
That is exactly what I did in September at our local credit union. I took a 5 year at 5.48% APY. Plus, there is only a 60 day forfeiture of interest if I decide to get out early [in case the fundamentals behind the credit union deteriorate significantly or long term interest rates start to spike in a few years from now]. The banker who opened it for us couldn’t believe that I wanted to lock up a large sum of $$ that long and I told her it was because “Bernanke was going to keep cutting rates because he wants to try to bail out the housing market.” Given that I live in a very bubblicious area, she said “you think he’s gonna cut, huh?” almost in disbelief that the housing market was really THAT bad, or could ever be, in a place like Eureka.
Just noticed from the EBay homepage that there’s a new pair of limited edition sneakers out from Nike. Do an EBay search for “jordan xxIII”. Bids look like they’re closing on $1,000 . . . for sneakers. I’m happy to know that even in our current condition we apparently still have a vast untapped reservoir of stupid.
Be like cheap, and buy a regular pair of sneakers instead.
got my sneakers for 18.99 at big 5.should last a year.
I buy New Balance - one of the few shoe brands still made in the USA
I did not know that….I will check them out and maybe re-think my future purchases….
Not cheap, but SAS walking shoes are made in Texas and they are wonderful. You can’t buy them online (who would buy shoes online anyway), but they sell through specialty stores all over the place.
“one of the few shoe brands still made in the USA ”
My New Balance sneakers have a made in China label on them.
Got my favorite sneakers from my friend Jenny, who got tired of them after wearing them twice. I go shopping with her sometimes, so I can help her pick out clothes (that I think will look good on me).
I go shopping with her sometimes, so I can help her pick out clothes (that I think will look good on me).
I realized that that made me sound conniving. But see, I would like Jenny even if she wasn’t rich and wearing my size. That just enhances my fondness, is all.
Conniving was when I told her she needed to go on a diet after the Christmas holidays, but didn’t tell her it was so that she wouldn’t go up a size and thereby render her clothes too big for me to wear.
Conniving is when I wonder out loud how many calories must be in the food some chick is about to eat - just to make her give it to me (6′1″ 150lbs). It’s called payback for 4 years of being “skinny” in high school!
I know of a woman who dresses raggedly but spends her money on stylish clothes several sizes smaller than what will fit her.
Her plan is to lose weight, so in her thinking, spending money on clothes that will soon be too large after her weight loss is just throwing money away.
Problem is, she never loses the weight.
This has been going on for years resulting in her closet being stuffed with expensive clothes she will never wear.
Fashion savant….
there is a huge market in collectible sneakers
i don’t get it but it is a major $$ market
i like my $49 last season nikes, i only wear sneakers on the weekends-
I wear them about 95% of the time…Fortunately my job allows me to do that….I suspect yours does not…
Ok made me think about it. Wear sneakers ~100% of the time. I don’t think I have a pair of non-sneakers that fit. Last pair of non-sneakers I bought was more than 20 years ago. I don’t think my old suit fits either, of course it does have that 80s look. It’s a big year if I spend more than $100 on clothes.
A 1930’s board game foretold the future…
The housing bubble really looks like a game of Monopoly, gone wrong.
Back in October I sold my 1972 beater pickup on ebay for $1000, to a guy who lives 1000 miles away from me. He paid me. Yesterday I finally got a call from him and he says he’s been living “from paycheck to paycheck” the last few months but finally has scraped together the $1000 it will cost to have the truck shipped to him. Unreal. And this country is full of people like this.
LMFAO
Seems unlikely, but perhaps he lives somewhere with a severe shortage of pickup trucks?
Citigroup Cuts Off
Some U.K. Credit Cards
By CARRICK MOLLENKAMP
February 3, 2008 6:10 a.m.
In a sign of more consumers losing access to loans, Citigroup Inc. has told some 161,000 credit-card customers in the U.K. that they can use their cards until the first week of March and then they’ll no longer be able to tap the New York bank for credit.
http://online.wsj.com/article/SB120198752476538417.html?mod=googlenews_wsj
http://www.bloomberg.com/apps/news?pid=20601109&sid=al4wLYqTFa10&refer=home
President George W. Bush’s proposal to help 1 million subprime borrowers avoid foreclosure with tax- exempt bonds has an obstacle: states don’t want the risk any more than private lenders do.
The state housing agencies that are already offering mortgage refinancing options are turning away so many applicants that they’ve had no need to raise funds. Since New York said it would commit $100 million in July, three of the 500 loans envisioned have been made. Massachusetts extended four loans under a $250 million program started in August, and Ohio made just 36 of the thousands anticipated by Governor Ted Strickland.
The reluctance to lend threatens to undermine a pivotal part of the president’s plan for alleviating the worst housing slump in 26 years. More than 50 percent of subprime borrowers are being rejected by state programs because their homes have lost too much value or they’ve accumulated excessive debt, estimates Geoffrey Cooper, emerging markets director at a unit of MGIC Investment Co., the country’s biggest mortgage insurer.
The FB’s have become hot potatoes, that no one wants to catch. It’s and admission that they can’t be helped. To do so is throwing good money after bad.
“To do so is throwing good money after bad.”
vmax,
Good thing fed, state and local gov’ts have no experience in doing that.
“..emerging markets director at a unit of MGIC Investment Co., the country’s biggest mortgage insurer.”
What, taking it in the a$$ nice and simple already wasn’t enough fun? MTG has a director for “emerging markets” looking for new and more interesting ways to get impaled?
Since New York said it would commit $100 million in July, three of the 500 loans envisioned have been made. Massachusetts extended four loans under a $250 million program started in August, and Ohio made just 36 of the thousands anticipated by Governor Ted Strickland.
I remember folks on this blog predicting this would happen every time a bail out was announced.
1) FB’s going into foreclosure can’t afford their home, regardless of interest rate.
2) FB’s going into foreclosure owe more than their home is worth.
Bailouts aren’t going to work, unless the government starts giving homeowners cheques for $100k, $200k, $500k, and that isn’t fiscally possible.
LA Times
Down payments just got bigger
Buyers in so-called risky areas will need to pony up more cash at purchase time.
http://tinyurl.com/2f3qhc
“Countrywide Bank sent mortgage brokers a list on Jan. 25 that categorized hundreds of counties as soft markets with rankings from 1 to 5, in ascending order of perceived risk. In areas rated in Categories 4 and 5 — roughly 100 counties in metropolitan areas nationwide — Countrywide said it would now require larger down payments from most applicants.
If a loan program previously allowed a minimum 5% down payment, applicants will now be required to come up with double that amount — 10% — to qualify…”
“…Restrictions imposed by Fannie Mae late last year have prompted lenders to compile area-by-area risk ratings and impose down-payment penalties. In a notice to lenders on Dec. 5, Fannie Mae said all loans delivered after Jan. 15 of this year on properties in declining areas would be subject to higher down-payment requirements. The company’s electronic underwriting system began flagging selected markets as high risk last summer….”
“…So, if a lender has tagged your area, you’re going to need more cash upfront.”
—
In old, “grandpa” style voice: “Weeeeelllllll, I remember the days when we had to bring actual money to the table in order to get a house…and not that measly 5% or 10% melarky. We used to have to bring 20% down, back in the olden days of six years ago…”
Neil foretold this event 18 months ago. He says they will get to 25% before this is all over. Of course he has enough popcorn to last the duration….
Yesterday, I went “shopping” with a friend of mine. Meaning she went “shopping” and I tagged along with a coffee.
She wanted to look at a watch in Tourneau (”highend” watch store.) Then, she wanted to buy a $6500 watch even though she makes, maybe, $40K if that.
“But it’s a limited edition Cartier!”
Where do I even begin? How limited can it be when they keep coming out with “limited” editions?
Shut my mouth, exclaimed I was out of coffee, and got her to buy me a new coffee.
She appears to have limited addition skills.
My ex was “limited edition” stupid.
She never got the fact every car built in that model year was “limited.”
I bought a candy bar earlier in the year, and written on the wrapper was “limited edition”, and it was, once I finished eating it.
“My ex was “limited edition” stupid.”
Then what are you for having married her? So many people don’t realize that dissing one’s ex makes them look stupid. Better to just be silent.
My wife is the most intelligent and sensible person I know. That’s why We Rent.
Honestly a Cartier watch would probably hold its value just as well if not beter than oh say a house or stocks right now
Quartz watch that comes free with a happy meal, time: 1:19 pm
Cartier watch time: 1:19 pm
Ben, did you delete some posts yesterday?
What resource would I seek to ascertain the approximate appraisal value of a specific 1,300 sf single family home in zip code 92831 in the year 1998? It was my father’s house. I was thinking of checking with the County of Orange Treasurer-Tax Collectors Office? Is there an easier way?
I tend to use Zillow.com, but only because it is fast and easy. It is known for inflated prices, but it will give you the amount that surrounding homes have been recently sold for so that you can extrapolate the “real” value of the home.
One note - anyone been looking at Zillow lately? They have a message board that hundreds of FBs have been using to complain that Zillow hasn’t priced their house high enough. I do watch one house in particular and noticed that Zillow reduced the total amount it was worth, but then jacked up the low to high end sale price. Then they increased the total price today by $500. What the f? No way this house is worth that much and it certainly isn’t increasing in price!
Thanks….!
America’s Teetering Banking System: “Where did all our deposits go?”
Somebody goofed. When Fed chairman Ben Bernanke cut interest rates to 3% yesterday, the price of a new mortgage went up. How does that help the flagging housing industry?
About an hour after Bernanke made the announcement that the Fed Funds rate would be cut by 50 basis points the yield on the 30-year Treasury nudged up a tenth of a percent to 4.42%. The same thing happened to the 10 year Treasury which surged from a low of 3.28% to 3.73% in less than a week. That means that mortgages—which are priced off long-term government bonds—will be going up, too.
Is that what Bernanke had in mind; to stick another dagger into the already-moribund real estate market?
http://www.smirkingchimp.com/thread/12553
“That means that mortgages—which are priced off long-term government bonds—will be going up, too.”
Well…maybe the long term fixed rate mortgages (15 year fixed, and 30 year fixed). However, out here on the coasts, we use “affordability enhancing loan products”, such as Adjustable Rate Mortgages…after all, who can afford a house in a coastal city at a freaking 5.5%-6.5% interest rate?!!!! Nope, we need even lower rates in order to afford our houses, so we’ll try to be refinancing all of the reseting ARMs and Neg-Am ARMs into yet another ARM, tied to short term rates.
Bankrate graph:
http://tinyurl.com/2gun22
The fly in the ointment now is the fact that a lot of the prevailing interest rate loans out there are now requiring an actual down payment and a verified income level. For an $800,000 house, you might actually have to bring a $80,000+closing cost check to the closing.
“5.5%-6.5% interest rate”
Exactly. Your 6 pct interest rate on a $600,000 jumbo loan generates $36,000 in interest per year, and that is assuming interest only (assuming no principle amortization). That is quite a hefty little bite in the budget for the median income San Diego houshold, which pulls in less than $70,000. Add in other costs (principle payments, taxes, insurance, Mello Roos, HOA dues, negative equity appreciation, etc) and you can see where the problem lies.
I’ve spent a lot of time with co-workers recently explaining the difference between interest rates set the the Fed and rates set by the market. It’s a difficult concept for many.
Comment by in Colorado:
I suppose that it will soon be a buyers market for those super duper diesel pickups those guys love to drive, as well as the other toys they favor (boats, quads, trailers, RV’s, Harleys, etc.).
Sounds just like bubba-land here in Central Arizona, if fact much of your post sounds like rural Arizona. Believe me, the guns and pickups will be the last things to go. Ramen noodles + Vienna sausages = Asian redneck.
Well, they have to make the house payment somehow. What’s interesting is that these guys aren’t red necks. Many of them even went to college.
same here in kingman, big hats no horse!!!
I have spent the weekend crunching the economic/unemployment data released over the past week. There are a number of surprises. I will post them on Monday.
This is for Prof GS Bear (and any others that have an interest in learning about economics) Each lecture is ~1.5hrs.
Econometrics 421
Syllabus for Winter 2008
(Lectures are viewable on Google etc.)
http://tinyurl.com/ynp6rp
How cool is this…..Thanks for the post HOZ…Are these available in other disciplines also ??
MIT has a nice site called Open Courseware that has note/lectures/materials from some 1800 courses for free.
Here’s the economics part
http://ocw.mit.edu/OcwWeb/web/courses/courses/index.htm#Economics
Thanks for that. I really wish that the Open Courseware series included video of the lectures. Even the best lecture notes are necessarily abbreviated, and a good lecturer can make all the difference in the world when it comes to getting the information in context.
Reading a few of those reminded me of a really bad Calculus lecturer I had in college. His technique was to turn off the lights in the hall, then draw equations on overhead projector foils with minimal commentary other than a running English translation of the equations. Those that managed to stay awake learned nothing other than how to read Calculus out loud. Oh, and his TAs could not speak English. You were pretty much on your own in that class.
Might also want to try iTunes U. Several universities are represented including MIT. There are a few OCW MIT courses which have video such as Linear Algebra, Spring 2005 (MIT 18.06), Differential Equations, Spring 2006 (MIT 18.03).
Interesting article in the WSJ.
“…Of course, the 17,000 drop in nonfarm payroll employment is the most eye-catching aspect. The weakness in the payroll survey was corroborated by a decline in the average work week, to 33.7 hours from 33.8 in December, and a slowing in hourly wage gains, to 0.2% from 0.4%.
But the separate household survey showed a whopping increase in employment of 635,000, when new updated population controls are applied to both the December and January data. …”
http://tinyurl.com/23n663
Cartoon from
Shanghai Daily
http://tinyurl.com/2bwo6x
Thanks, Hoz. That’s a great resource.
Hoz — are you a bonafide econometrician?
I recently bought into an investment of foreclosed homes and thought I would share some details. I have been following this web site for a few years, and I was a little reluctant to invest with all of the trouble going on in the housing market. The purchase amount of the loans was small enough to where I felt like I could get my initial investment back even if the housing market completely crashed.
The pool of loans is 140 homes where the foreclosure process was started from 1 large bank. Purchase price was $2.2m, the original appraised value at the time of the loan was $8.5m and the loan balances total $6.2m. The homes are in 21 different states, with no exposure to bubble markets like SoCal, Florida or Vegas.
We purchased the loans a week before Christmas, and there are over 20 people working on the package. So far we have had 7 houses sell at full price, 55 homes will proceed with foreclosure, 25 borrowers have signed Deeds in Lieu and there are a large amount of work outs being arranged. All of the foreclosures and owned properties will go to auction with no minimum bid, and we only need a sales price of 30% of the loan amount to be profitable. The loans that are worked out will be seasoned to become performing debt and sold at a future date. Many of the work-outs had the loan amount dropped %20.
We receive updates every 2 weeks, and it is a little depressing to hear stories about death, strokes and other things that have caused people to go behind. There are many borrowers that own 5 or more properties, older borrowers on a fixed income with ARM’s and bankruptcies.
Overall, I am pleased with the progress so far and we expect to have things completed by August. There seems to be lots of advertising about foreclosures, so I think this will hit the first wave of knife-catchers. We are predicting a decent rate of return, but I doubt that I will do it again because of the risk.
I will try to post more specific details on the pooled loans as things develop, since many of you will find it interesting. I sold my house in May of 2005 and have been sitting on the sidelines ever since thanks to this website.
Thanks for your post and good luck. I think your strategy may be a good opportunity. If you can’t get 30 cents on the dollar, then this country is in serious trouble.
May I ask how you found this? I have been looking for some kind of vehicle that is doing this kind of thing.
I look forward to hearing how it goes.
Fascinating. Where does one go to buy into a pool of loans?
I got really lucky and was asked by a good friend in the mortgage business if I wanted to join. The main person who set it up owns a mortgage/real estate office and has a good contact at the bank where the loans were bought from. With 20 people working on the properties, it would take a pretty large real estate office or legal firm to get it done. There were quite a few people in our circle of friends who were afraid to invest in the pool, but reading this site and other blogs helped me gain a much better understanding of the market and gave me the confidence to invest. There is already talk about buying another pool when this is done, and I’m sure everyone will want to get in if we are successful.
There are a few states with 6-7 properties, and we will look at packaging them all up for sale to one investor for around %70 of the mortgage balances. If that doesn’t work then they will go to auction like all the others. Looking through the latest update again, I was also surprised to see how many small $5-$10K second mortgages are starting to show up.
Mr. George Will’s column has a few points worth reading
“… Today’s Americans, their pain threshold lowered by the successful modulation of business cycles, now regard recessions as not mere misfortunes but as violations of an entitlement to perpetual economic serenity. In the 50 years prior to 1945, contractions were frequent and ferocious enough to fray the social fabric. There were three contractions of 5 percent of GDP, two of 10 percent and two of 15 percent. Since postwar demobilization, the most severe contraction — that of 1982, when President Ronald Reagan and Fed Chairman Paul Volcker stifled inflation — was 1.9 percent….”
http://tinyurl.com/2s2kcb
Townhall
See my rebuttal from much earlier in the day (higher up in the bits bucket)
OMG:
http://fayar.craigslist.org/rfs/560548149.html
Am I drunk or is it the Leaning Tower of Bensonville?
It’s the Bastille.
Maybe you’re both.
The architect that designed this and the planning department that approved it should be shot…..That is one ugly looking house….
“almost completely wheelchair accessible”
“almost” had better include the bathrooms!
Certainly not those front steps..
looks like a psych ward.
News from the front line in SoCal.
Just spoke to a guy from the gym that has done loans and mortgages for the last 10-15 years. He said business is DEAD (I spoke to him a year ago and said thing are going to get bad.) I saw the look on his face and I tried to avoid him, but he hunted me down at the gym and he said it is very bad and he could not believe the foreclosure rates that are coming across his desk. I think he said he sees the “sheet” every Monday. He said he is getting into construction and I estimate he is in his early forties. I did not have the fortitude to give him a speech on construction. Why kick a guy when is down. He will find out about construction soon enough.
Another guy I know is a CEO of a small cap company ($25 million in sales.) He wanted to do lunch with me. Our schedules finally worked out. He wanted to pick my brain on the economy. He said “I remember talking to you a year ago and you said things are going to get bad”. I remembered talking to him, but he remembered the conversation better than I did and I did the talking! He owns two houses and is experiencing a divorce. He said his house investments are really doing badly. He is on title for two houses (does not own i.e. makes payments.) and is now renting a small apartment.
Buddy who is a lawyer in a small town South of Portland said housing is getting hit hard. He is good at contracts and said people are coming to him to review all sorts of real estate contracts. I thought a little late for that now.
Thanks, simi. Interesting post. This is the sort of thing that outlines what’s really going on, and part of what makes this blog so valuable.
Another SoCal data point: my brother is in LA on business and went to Disneyland yesterday. Saturday is usually a really bad day to go to Disneyland, as its typically wall to wall people. He said that it wasn’t like that at all. Not surprising, as an 1 day outing for a family of 5 can easily run $400-$500. The tickets alone would cost about $300.
As others have said, the first things to go are the luxuries.
SuperBowl effect?
When we used to live in SoCal we went as couple of times on superbowl Sunday. It as pretty busy.
The LA beaches are traditionally empty on Superbowl Sunday. No point in checking the beach today as we had rain this morning, and now we have sun but 20MPH winds with gusts to 30MPH. Most Superbowl Sundays here are pretty good beach weather, though.
Actually I was at Disneyland yesterday and for the previous 2 Saturdays and all have been pretty typical for Jan-Feb. It’s the only time of year we will go, but I haven’t noticed it being any emptier than normal.
“Speeches made to the people are essential to the arousing of enthusiasm for a war.”
Benito Mussolini
Isn’t this the guy that the populance strung up from a lamp post?
Worth thinking about
“Let us agree that monetary ease is merely a necessary condition for a bubble, not a sufficient one.
I would put it as follows. Aggressive monetary ease is like pouring petrol on straw. That may well not start a fire, as Adam [Mr. Adam Possen] writes: the straw may be wet, for example, or the people around the straw may be responsible. As it happened, these people were pyromaniacs. But the Fed did next to nothing to discourage them. On the contrary, it was opposed to tighter regulatory standards. This was the combination that created the credit blaze. So the combined policies - monetary easing along with regulatory laxity - do indeed bear responsibility for what happened.
I will go further. Since the chances of serious regulatory tightening (the subject of my next column) are close to zero (in my judgement), I fear the same danger still exists. If the Fed pours on petrol once again, the pyromaniacs will try to restart the fire.
I agree that the straw is very wet at the moment. So this will take a while. I also agree with Adam that this does not have to be the case if effective regulatory changes are made. But since I do not expect the latter to happen, I fear the longer-term consequences of present policies.”
Mr. Martin Wolf
Feb 1, 2008
FT
“…the straw may be wet, for example, or the people around the straw may be responsible. As it happened, these people were pyromaniacs.”
It’s also quite possible for all the available fuel to burn to the ground level, making mass conflagration extremely unlikely even if pyromaniacs are pouring kerosene and igniting it. Such is the situation around North County San Diego, where I am not very worried about wild fires for the next couple of years.
Processing Deposit Accounts in a Bank Failure;
Modernizing Large-Bank Insurance Determinations
Notice of Proposed Rulemaking FIL-2-2008
January 14, 2008
Summary: The FDIC is proposing the attached two-part rulemaking relating to the potential failure of an FDIC-insured depository institution: The first part of the proposal would govern how and at what point deposit account balances would be determined in the event of a failure, and applies to all FDIC- insured depository institutions. The second part proposes requirements to facilitate the process for determining the insurance status of depositors of large insured depository institutions in the event of failure. Comments on the Notice of Proposed Rulemaking are due by April 14, 2008.
http://www.fdic.gov/news/news/financial/2008/fil08002.html#body
http://politicalinquirer.com/2008/02/01/ron-paul-wins-in-4th-quarter-fundraising/
Dr. Ron Paul beat ALL of the GOP Hollow Men in fundraising last quarter. Pretty good for a guy supported only “by a small band of whackos” according to our own Ann Scott.
How do you like THEM apples, Ann?
I have noticed a tendency among those who don’t want to hear what Dr. Paul has to say to quickly dismiss him as a wacko without even bothering to address his arguments, then go back to talking about the best time to bring home the troops and other such matters.
We Libertarians have been regarded as whacko since day 1 (sometime in 1974, I think, the Libertarian Party was formed). Libertarianism is the culture of the future. In other words, it will occur sooner or later in some nation. Why not the nation that gave the world the Declaration of Independence and the Bill of Rights?
I’m eager to get Super Tuesday over with, when I know there will be no run-off vote for Ron Paul in my primary state, AZ. On Wednesday I anticipate changing my registration to Libertarian. I have not been registered Libertarian since 2001. After my obligatory investments in gold, platinum, securities, and stocks, I will donate as much as possible regularly to the Libertarian Party this year. I intend to be more active in Libertarian politics since I was a college student in the early 80s.
Bill- Like you, I was active in Libertarian politics at one time, specifically in the early 1990s (due to my disgust at George H.W. Bush, who I, BTW, consider a worse president than his son, and I’m certainly not a big lover of the current prez). We had a pretty good group in Va., including some good candidates I did some work for, but when I went to the National Convention in SLC in 1993, I was so disgusted by the physical and social “misfitness” (especially: obesity) of the typical members of the party that I was quite taken aback, realizing that most of them were pretty hopeless, and likely to become at least as reliant as the average individual on government.
When I moved to FL in 2006 I went to a local meeting/supper and basically discovered the same thing - the members did not seem highly educated, politically savvy, or in any way focused on or able to do anything constructive, other than dine together in a pretentious restaurant.
I’ve always thought the name “Libertarian” was a bad one, and after a 35-year record of complete political failure it is time to remake the party. It should be dissolved and a new party named the Anti-Socialist Party should be started in its place. Many old-time Libertarians would join that party.
I’ve always considered myself a fairly conservative Republican, with a strong libertarian streak. I did attend a few Libertarian functions in the 1990s, and came away unimpressed - you can take individualism too far, and without organizational coherence and discipline, you’ll never accomplish anything. That said, today’s GOP is pretty much a zombie organization for Wall Street and the corporate cartels, so I only support worthy candidates (like Ron Paul) who show that they have actual Republican principles.
http://cosprings.craigslist.org/rfs/559371478.html
Flipper Boy wants to unload his alligator and give YOU $103K in [make-believe] equity - Yawn.
US urged to focus on housing crisis
By Jeremy Grant in Washington
Published: February 3 2008 19:59 | Last updated: February 3 2008 19:59
Only 11 days after the White House and House of Representatives agreed a $150bn economic stimulus package for the US economy, a Senate version is expected to reach the floor of the chamber for a vote on Monday.
But lawmakers are questioning whether it will do more than send a message that Washington is trying to forestall a full-blown US recession.
http://www.ft.com/cms/s/6b5535a6-d28f-11dc-8636-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F6b5535a6-d28f-11dc-8636-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Here’s an audio interview of Mitt Romney who comments on the Housing Correction, and says regarding Hillary Clinton’s idea of ‘freezing interest rates for 5 years’ that: “They don’t even do that stuff in Russia.”
Here’s the audio interview:
http://instapundit.com/archives2/014856.php
The Housing Correction comments start at 1:30 on the audio clip.
Sounds like Mitt has eagerly concluded that the billions and billions worth of Wall Street losses are due to honest mistakes by financial sector CEOs rather than deliberate efforts to perpetrate fraud, and he is trying to undercut McCain’s suggestion that some major crackdown on financial mischief might be warranted, using the suspect argument that McCain is clueless about life in the private sector, having spent his life as a government insider.
I personally will reserve judgment until the outcome of ongoing probes by various states attorneys generals and the FBI. I will also watch how the rhetoric on this subject heats up, as it sounds as though McCain is currently taking a more honest and open-minded approach to this issue.
Well, the Super Bowl is over.
Let the spring selling season begin!
My wife’s and my absentee ballot votes for Obama have been in the bag for several weeks already. Glad to hear the rest of the state is following our lead
Obama expands lead on Clinton in California
Mon Feb 4, 2008 1:29am EST
http://www.reuters.com/article/topNews/idUSN0345866120080204
How Wall Street Killed the Economy
By A.K. Gupta
From the February 4, 2008 issue
http://www.indypendent.org/2008/02/03/how-wall-street-killed-the-economy/
Monoline Meltdown?
http://www.ft.com/cms/s/0/553e1a16-cb51-11dc-97ff-000077b07658.html?from=skyline
(If link does not work, search Google news using ‘monoline meltdown’)