Collectively, We Went A Little Nuts Out Here In California
Bloomberg reports on California. “In the sprawling new subdivisions of Southern California’s Riverside County, newspapers litter empty driveways and coffee-colored lawns are reminders of neighbors who had to abandon their dream homes. California leads the nation in home foreclosures, and economic worries are driving the voters who have the biggest say in tomorrow’s Super Tuesday contests.”
“‘The economy has trumped everything else,’ said John Husing, VP of a Redlands consulting firm.”
“In Riverside County, 160,000 homes were constructed since 2000, said Larry Ward, county assessor and property recorder. Today, one of every 43 homes in the so-called Inland Empire that stretches east of Los Angeles County to the Arizona border is in foreclosure, according to RealtyTrac.”
“Average home values in the county dropped from $450,000 last year to $350,000 this year, Ward said.”
“A few years ago, no money down and interest-only loans bought Clinton supporter Felipe Molina, who makes $43,200 a year, a $590,000 Riverside home that he intended to use as a small boarding-care facility for the elderly. Now, Molina and his wife can’t afford the $4,500 in monthly mortgage payments.”
“Veronica Blankenship, a 49-year-old African-American probation officer who Riverside Fair Housing Council officials say was the victim of a predatory lender, owes $3,400 in monthly payments, more than she earns, for her modest home.”
“Clinton’s proposal for an interest-rate freeze ‘is not going to help me,’ she said. She also dismissed the fund proposed by Obama, as another government program for which she wouldn’t qualify.”
“‘Politicians say anything to get a vote,’ she said.”
From Reuters. “Stockton, California, may be the foreclosure capital of the United States, but that is not influencing how residents like Michelle Encinias who are losing their homes will vote on ‘Super Tuesday.’”
“Encinias recently cast a mail ballot for Sen. Hillary Clinton, but has little faith that the New York Democrat or other presidential candidates can do much about foreclosures if they make it to the White House.”
“‘They’re just going to say what we want to hear,’ Encinias, who has two children, said during an interview in her four-bedroom home in a middle-class neighborhood in Stockton.”
“Encinias’ skepticism is shared by Tino Gonzalez, another Stockton Democrat leaning toward Clinton for Tuesday’s primary election.”
“‘I don’t think either party is going to do anything about it,’ Gonzalez said of the local foreclosure surge. ‘They’re promising a lot of stuff to get elected but once they get elected they’ll forget.’”
“Gonzalez’s mortgage is rock solid. He chose a fixed-rate loan because, he said, he felt adjustable rate loans were a trap waiting to be sprung on unknowing borrowers. His caution paid off, for foreclosures are soaring among borrowers with adjustable-rate mortgages, such as Encinias.”
“‘I go to the gym and hear a lot of horror stories,’ Gonzalez said. ‘A lot of people bought houses a year, year-and-a-half ago and paid top dollar and now can’t make the payments.’”
“Encinias conceded she could have avoided defaulting on her mortgage by selling her house when local home prices were peaking, but said better loan disclosure rules could have prevented her current predicament.”
“But many who bought during Stockton’s housing boom simply ignored loan terms, said Bill Herrin, an economist with the University of the Pacific: ‘Everybody wanted to do it now, today. Collectively, we went a little nuts out here.’”
The Recordnet. “The lunch rush used to fill Campesino Café. That hasn’t been the case for the past several months. A handful of south side businesses, such as Campesino Café, that cater mostly to Latino immigrant workers are not only seeing the effects of a sluggish economy, but they also say reverse migration has left their business nearly empty of customers, who are fleeing lackluster employment conditions.”
“The cafe has laid off two of its five staff members. Sales have diminished from $500 per day to $200 per day since the summer. ‘If there are no customers, we don’t have money to pay,’ said Margarita Jimenez, the cafe manager and daughter of the owner.”
“‘This is one of those annual times when families go back to their homelands. At times, they don’t feel there is enough work to come back, and you’re going to feel that pinch in the businesses that provide services to the Latino community,’ said Mark Martinez, CEO of San Joaquin Hispanic Chamber of Commerce.”
“‘Right now, there’s no sign that it’s going to get better. There are no jobs,’ said music retailer Marcos Flores, who is considering closing the shop.”
“The soft housing market has played a huge role in the economic slowdown in San Joaquin County. The housing market slowed job growth in the county from 1.3 percent in the fourth quarter of 2006 to 0.4 percent in the fourth quarter of 2007, according to University of the Pacific’s Business Forecasting Center.”
The Orange County Register. “It’s hard to feel sorry for well-heeled shoppers whose idea of tough economic times is passing on $1,000 Burberry raincoats or that $300 limo ride while the working poor skimp on vegetables and take the bus.”
“But economists say that recent signs of cutting back by the affluent could hurt the economy.”
“Nathan Warren, a limo driver, knows this first hand: He has seen his monthly wages drop by 40 percent to about $1,800 since late last year. His work week at Newport Beach-based Classy Ride Limousine Service was reduced to three days from five amid slow business.”
“‘I have to struggle to get by. I am pinching pennies,’ said Warren, a Costa Mesa resident. ‘I am eating more cereal and am not buying clothing.’”
“He used to go eat at restaurants a couple times a week. No longer. He also would like to visit friends in San Diego and Los Angeles. But less work and expensive gas are making him put off those trips.”
“Just look at the cutbacks by Dali Wiederhoft, a 52-year-old marketing executive from Reno, Nev., made skittish by a volatile stock market, a 20 percent decline in her home value and recession fears.”
“Over the past three months Wiederhoft pared her spending on clothes to $500 per month from about $3,000; that means no more Jimmy Choo shoes and David Yurman jewelry. Her cutbacks also included canceling the services of a cleaning woman and a lawn care company. She also plans to trade in her BMW for a Ford when her lease expires in about a month.”
“‘This is a time to have cash, not to spend. So, I’m cutting wherever I can,’ she said.”
“Soaring home values had made upper-middle class shoppers feel wealthy in recent years, causing them to trade up to $500 Coach handbags and $1,000 espresso makers, but a housing slump has wiped away their paper wealth. The woes are creeping into even the high-end luxury sector, as affluent shoppers are rattled by the turbulence in the financial markets.”
“Classy Ride Limousine Service, which caters to clients with an average household income of $200,000, has suffered a 10 percent sales dip this January vs. the same month last year, according to general manager Jason Lattier.”
“The 13-year-old business started seeing a slowdown last November when sales dropped 15 percent vs. the same month the year before. That 15 percent decrease was the worst monthly drop in about four years, he said.”
“‘We’ve been really slow,’ said Lattier, noting that 12 out of his 20 drivers are now working three days per week. With the average driver earnings $150 a day in tips and wages, that means a weekly shortfall of $300.”
“‘People are holding onto their money or maybe they don’t have the funds like they used to,’ Lattier said. ‘I’m not sure.’”
The Record Searchlight. “The chatter inside Cypress Square Barber Shop in Redding usually involves NASCAR, football or bowling. On the economy, conversation that quickly turned to the sagging housing market. Home sales in Shasta County are down from last year, according to DataQuick. At the same time, home foreclosures are up in the county.”
“‘How many people work in Redding at $40,000 a year can afford a house?’ said Tom Gerald, of Weaverville.”
“Eddie Grant, 78, of Redding, who paid cash for his home 22 years ago, said he’s worried about people losing their homes to foreclosure. ‘Somebody wanted to stimulate the economy 20 years ago and it’s out of control,’ Grant said. ‘It was buy and buy and now nobody can pay for it.’”
The Daily Pilot. “It’s been a tough few months for Orange County homeowners, and no area is feeling the brunt worse than the Westside of Costa Mesa.”
“The 92626 zip code, which comprises the western end of the city, had the biggest increase in foreclosures last quarter of any zip code in the county, according to DataQuick.”
“The area posted only a single foreclosure in the fourth quarter of 2006, but that number rose to a whopping 29 in the fourth quarter of 2007 — leading Orange County with a 2,800% increase.”
“Nearly every part of the county had an increase in foreclosure. Costa Mesa Realtors surmised the Westside’s high amount was the result of a large number of first-time buyers who, in some cases, may not have completely understood the loans they took out.”
“Elia Ceniceros of Weichman Associates Realtors recommended prospective home buyers check with the California Department of Real Estate or local realty boards to check an agent’s credentials. Part of the problem, she and Fajardo said, was many first-time home buyers were recent immigrants, and small-time lenders sometimes coaxed them into taking out loans they were unable to pay off.”
“‘There’s a lot of unscrupulous and unethical agents out there that may have done that to clients, but the problem is that when the client turns around and needs the agent to help them, the agent is no longer in the business,’ Ceniceros said.”
“Valerie Torelli, who owns Torelli Realty in Costa Mesa, said she had a number of homeowners come to her asking for help with short sales. The problem, she said, was not restricted to low-income buyers; many more affluent ones had pushed their luck in recent years because they expected the market to keep improving.”
“‘Even people who have really good income got sucked into this, too,’ Torelli said. ‘They kept buying houses they couldn’t afford.’”
The Press Enterprise. “Love may fade, but bills must be paid. That’s why some couples who are divorced or separated are continuing to live together, experts in the Inland area and throughout Southern California say.”
“Divorce lawyers, real estate agents and psychologists who work with ex-couples say they are seeing men and women staying together after the breakup because they just can’t afford to live separately, given the slumping housing market.”
“Former partners are not parting ‘because the equity in the house, which is their biggest asset, is rapidly going down,’ said Martin Bender, a Temecula lawyer specializing in family law. ‘A lot of parties are (afraid of) losing their major asset. They are trying to hold on in hopes that it will go up.’”
“The trend of cohabitating exes differs also from the so-called ‘nondivorce’ — in which couples do not legally separate but lead separate lives while still living together — for legal reasons. Unless spouses legally break their union, each party can continue to claim a share of their joint assets, including the home.”
“Riverside Realtor Collette Lee said she closed escrow last month on a home whose occupants had divorced six months earlier and were sleeping in separate bedrooms and leading separate lives.”
“‘It was an amicable divorce — well, as amicable as a divorce can be,’ Lee said. ‘It was just very strange.’”
“Lee said she has seen a few cases lately of cohabitating ex-couples, something she had not previously witnessed in 20 years selling real estate.”
“Michael Young, who practices family law in Redlands, said…he has several clients in that situation. ‘What I do see is them not wanting to sell the residence at this point. They’re doing everything they can not to sell in this terrible market,’ Young said.”
“Sometimes, if couples can afford it, one party will rent another place while the other remains to sell the house so they can split the proceeds, Young said. Couples who cannot afford that basically avoid each other.”
“‘I always think, ‘How awkward is that?’ Young said.”
““A few years ago, no money down and interest-only loans bought Clinton supporter Felipe Molina, who makes $43,200 a year, a $590,000 Riverside home that he intended to use as a small boarding-care facility for the elderly. Now, Molina and his wife can’t afford the $4,500 in monthly mortgage payments.”
Just nuts!
And there you got pretty much the average income for the IE. Now see, this is what I was talking about in the last thread when commented that I wish the likes of Matt Lauer would ask there little REI regular Barbara Cornholed a question like “now Barbara, we’ve got a place like the IE where the average Joe makes about 50K a year, yet the median home price is 400K…how do those numbers work?” Man that would be beautiful……
And to top it off that’s $20.77 per hour. Just how many in the service sector actually make $20.77 per hour?
I have no sympathy for either the buyers or the lender in this case. How did either think that they’d ever be able to repay this loan. What ever happened to the 2.5X (or sometimes 3X) price/income rule? In this case, did they think that a 13.66X would result in anything but a default?
Serves them right for being a Clinton supporter! hehehehehehe
Inland Empire
“Average home values in the county dropped from $450,000 last year to $350,000 this year, Ward said.”
- If anyone thinks that any house in the Inland Empire is worth 450k, they are smoking crack. Soon, the I.E. will lead the nation in forclosures.
I’ve been sayin’ the pretty much the same thing since ‘05.
There are some very high priced historical homes near downtown. Exboss paid nearly $1 mil for his house in 2/06 when he recently arrived in town. He’s the one that told me he didn’t have to listen to me about the bubble because I wasn’t a real estate agent - I get a little laugh out of that one every day.
Are they crazy,
WATCH NEWS at 5pm. you will see “my” neighborhood and lots of trees lying around. You might also see Insurance rates rising, and HOAs rising..look closely.
Local News. @5.
When trees are pulled out by the rootwad, the winds must have been somewhat amazing…
I was driving back from LA and was so happy the roads were empty - left when Superbowl came on. Then hit banning and it was pouring and blowing so bad you couldn’t see at all. There were about 3 accidents cleared to the side of the road. The winds continued into the desert and into the night. It was like Mr. Toad’s Wild Ride - 2 E tickets, please.
I missed it - I’ll check @ 11. I saw pics in paper of trees and wires down. Read how a bunch of folks in PS and LQ lost TV after 1st quarter yesterday. Just saw license plate NO FSBO - I wonder what realtor that is.
“Then hit banning and it was pouring and blowing so bad you couldn’t see at all”
I got caught there at almost the same spot couple years ago coming back from Palm springs. Had to pull over and stop for several hrs as the wind & rain was blowing real hard. Can’t figure out who the hell would buy a home in banning/.beaumont but they put up tons of new tract homes there recently, about 3 hrs commute from-to lA/OC on a good day. Now large mcstuccos there available around $200,000. Banning has a very rough section 8 patch right off the 10 fwy so if coming back from PS/Casinos don’t stop in banning, just keep going though Moreno valley not too inviting as well. The casino near banning( morongo?) about only place where it might be ok to get quick gas & snack but U won’t stay long as entire area , known as the the San Gorgonio pass , is barren and stark.
aretheycrazy,emailme@ellisisland1athotmail.com for pics.
Not even half todays price
IE will lead the revolution, the walk away revolution.
I’m reading more and more stories of people walking away from their debt traps. It’s a modern day financial revolt. If the home ATM can’t pay, walk away!
“If the glove don’t fit, you must acquit”.
“If the home ATM don’t pay, just walk away”.
“Over the past three months Wiederhoft pared her spending on clothes to $500 per month from about $3,000″
I’m 41 years old, and I’m very sure I haven’t spent close to $3000 on clothes, all combined, in my entire life. I probably never will. I can’t fathom this.
You beat me to it. $3K a MONTH? Holy crap! I’m going home tonight and will sit right down with my wife and tell her just how much I really really love her. (she’s fairly frugal).
I saw a wide swap show a while back where the wife of a Wall Street type was spending 200K/year on clothes.
A lot of people in these high-paying ‘executive’ jobs are in a social milieu where they feel they must consume VERY conspicuously — prestige car, designer clothes, luxury showcase house — to keep up the right ‘image’ to maintain their position in the corporate pecking order. To me it just shows how most of them are lacking anything resembling productive accomplishment, and how puerile, vacuous and shallow corporate culture is, like it’s high school and you have to keep up with the kool kids.
So these tools spend everything they make, and more, instead of squirreling away a fat nest egg like most of us would if we were earning hundreds of k a year.
My sympathy for them cannot even be measured with an atomic microscope.
I think ‘Infinitesimal’ is the word you were looking for.
Personally, I have a bit of a bolshevik streak in me and I would like to see them all publically hung. But that’s just me…..Right?
I get most of mine at Goodwills.
I get most of mine at Goodwills.
Dad?
Over the past three months Wiederhoft pared her spending on clothes to $500 per month from about $3,000; that means no more Jimmy Choo shoes and David Yurman jewelry. Her cutbacks also included canceling the services of a cleaning woman and a lawn care company. She also plans to trade in her BMW for a Ford when her lease expires in about a month.”
OHHHHH!!!! {GASP} THE HUMANITY!!!!
If the housing bubble is the mushroom cloud, then this blowback effect in consumer spending is going to be the shockwave. How much of our economy has been driven by absolutely useless sh@t such as spinners for Escalades and neon cell phone faceplates? All that crap will dry up virtually overnight, and 25% of the economy along with it.
I get most of mine at Goodwills.
Grad student?
It’s OC, baby!! Consumption junkies on every corner.
The Real Estate House Lies of Orange County
WOW! We (5 of us) live on 3k a month, pay our taxes, and save the rest. And she pared down to ONLY $500/month for clothes. Don’t your closets get awfully full and cluttered that way?
You’d wear clothes more than once? Oh, clutch the pearls, how gauche!
Yeah, it’s pretty crazy here in SF. No sense of perspective and no sarcasm from the locals. But it is the first sunny, warm day in two weeks so I can’t complain about that. Just bought new jeans off of ebay for $38 to my door. That and my soon to arrive new ebay 12 string guit-box will be the last purchases except food and booze (and rent and heat/phone/elec) for a long while… Battening, boys and girls. Battening.
MrBubble
I guess it’s time to check eBay now for those of us still have the dough. 20 cents on a dollar will do
I order T-shirts from silkscreen supply places for $4 each and pretty much get whatever else I have at Costco, and no I doubt I spend more than $250 a year on clothing.
$3000/41years = $75/year. that one pair of socks gonna have to last you 10 years. Be realistic.
It’s her money, she spends however she sees fit.
Just yesterday I threw out a pair of socks that I’ve had for 11 years. (A pair I wear often.) Even then I contemplated putting it in the “rag bag” in the garage.
I never said she couldn’t spend it how she wanted. What she does with her money is fine with me. It sounds like she’s found a hobby, and I’m happy for her. I personally just can’t see how it’s possible to spend THAT much on clothes, something I care nothing about. It’s like saying you spend $3000/month on brown sugar. I just don’t get it, but whatever.
Since I’m not counting the first 10 years of my life (thanks Dad!), let’s just say $100/yr.
I just bought some new shirts. $7/each. I figured I was due since all but maybe 10 of them I had when I met my wife in 1991. Seriously. Maybe 20% of my clothes are from high school. Socks and undies as gifts at Christmas covers that. My last new pants were from before I went overseas in 2003, and I’m sure they were less than $20 each. My late 80’s era Corona t-shirt still covers my body. Pants with holes are good enough for around-the-house.
Even factoring in the 2 suits I’ve bought over a lifetime, I’d say $100/year is probably pretty close.
Let me save my money how I see fit.
Go to any boutique or high-end department store and you’ll get it pretty quickly. On the one hand, she’s wasting money on overpriced garments often sewn in the same third world sweatshops as cheap Gap clothes. On the other hand, designer label apparel, shoes and bags at least have some value on the resale market. Low end stuff ends up being worth less than fabric it’s cut from.
“I’m 41 years old, and I’m very sure I haven’t spent close to $3000 on clothes, all combined, in my entire life. I probably never will. I can’t fathom this.”
LOL. Same here. I dress ok, but could give a rat’s turd regarding trying to look fashy-fash. My girlfriend on the other hand is a bonified shopoholic. I think there’s a primal “hard-wired” gathering instinct in women that’s hard for some of them to tame.
DOC
Na, und? A person may have some pleistocene-era brainwiring but that doesn’t mean the person has to act like an idiot. You can satisfy your urge to gather at thrift stores, garage sales, and the library. I got some 40s-era beaded pink slingback sandals for a buck at an estate sale, wore them New Year’s eve and left them behind at the party because I’d switched to my pumas (expensive! $10 at The Garment District in Cambridge). If I’d lost a $2,900 pair of Manolos I’da been devastated, but luckily I’m not completely anacephalic, so I don’t spend money on shoes. I can’t even go in the mall without suffering a depressive episode. How do you feel like an accomplished gatherer when it’s all laid out there for you and mood-lit and you have salespeople racing up with offerings and no restrictions on what you can spend? Where’s the challenge in any of that? Where’s the fun? How do you offset crippling woe over the obvious fact that you’re throwing money away on crap and that the entire economy of your country relies on you to continue to act like an unsupervised two-year-old confronted with a dessert cart? The problem with these Jimmy Choo hogs is not that they’re gatherers but that they’re addicts.
test
“Veronica Blankenship, a 49-year-old African-American probation officer who Riverside Fair Housing Council officials say was the victim of a predatory lender, owes $3,400 in monthly payments, more than she earns, for her modest home.”
“Clinton’s proposal for an interest-rate freeze ‘is not going to help me,’ she said. She also dismissed the fund proposed by Obama, as another government program for which she wouldn’t qualify.”
POliticians will say anything to get a vote..
and holy cow, $500.00 per month on clothes?
HOly COW.
…But she’s voting for Clinton anyway… sigh…
“Veronica Blankenship, a 49-year-old African-American probation officer who Riverside Fair Housing Council officials say was the victim of a predatory lender, owes $3,400 in monthly payments, more than she earns, for her modest home.”
You know, the press may be compounding the problem more than they know. If they keep on writing these “poor victim homeowner” pieces, especially the ones where the homeowner sues the lender, more and more folks are going to start feeling victimized and turning on their lenders. The result? You guessed it!…Even tighter lending standards! With all this going down there’s no way BB is going to get the easy money he’s creating in peoples hands. No housing recovery, just $10 a gallon milk.
Let the lenders get sued. The tighter the lending standards, the cheaper houses will be for savers like us!
That’s my point, and has been my point for some time now to every hand-wringer that stresses over govt intervention. The money ain’t available, no way and no how.
You know, by the time you get your cheap houses in 2-3 years, you’ll all be disappointed. You’ll eww and ah for a couple days– like when you buy new stuff at the store– and then, poof. Just like that, it’s just another day. ….I want a pony.
I don’t know about you, but I actually like the idea of having my own house again. My treasure isn’t on earth, but having your own house beats the crap out of renting if it’s at the right price.
Yeah, it’d be nice to have a place I could hardwire surround speakers and ethernet into, as well as having dogs.
Finding decent rentals that will allow multiple dogs (so they can keep each other company while I’m at work) is pretty darned hard IMO.
But at these prices even now?! Fuhgeddaboudit…
(Maybe some land on which to assemble modular housing, or retasked shipping containers in euro style.. Those are cool…)
Where did my other post go? Heres a different post, it’s interesting. $50k an acre for rural land? I can get the same rural land for $3k to $5k an acre in western Pennsylvania, most of WV, OH, MI and even in selected parts of TN!
$425k for a 2/2 townhouse in a small town? That is insanity! If someone, such as me wanted to live in a small town, why not in WV, OH, PA, northern NY, MN, Dakotas, MI and several other affordable states where houses can be had for under $50k?
“Despite Tubac’s rising population of second-home owners — real estate agents estimate that 25 percent of homeowners have primary residences elsewhere — the village has kept its small-town charm. Residents like to point out that there’s no stoplight in town, and just one gas station.”
“Tubac has had considerable growth in the last five years. Barrio de Tubac, a 350-acre planned community just south of the historic village, has exploded in size in recent years. Its residential homes include town houses, patio homes and larger single-family dwellings. Prices range from $275,000 to $850,000.”
“Home sales were strong in Tubac starting in 2003, but have since begun to taper, said Gary Brasher, president of Brasher Real Estate. ‘We’re a niche market here,’ he said. ‘Even though things are not great guns like they were, things are still selling at a pretty good pace.’”
“There are two basic types of properties in Tubac, Mr. Brasher said — those in small subdivisions, like the ones found in and around the golf resort, and those found in Barrio de Tubac.”
“Overall, one- and two-bedroom town houses typically range between $268,000 and $425,000. Patio homes and villas, with more space, are priced between $350,000 and $550,000. Prices for single-family homes vary depending on location and lot size, with prices ranging from $400,000 to $800,000.”
“A third option is land, most of which is zoned as rural, meaning one home to roughly five acres. Those lots are typically priced between $250,000 and $325,000.”
Isn’t a barrio a mexican ghetto?
It’s the word I use when I ask a Mexican where I can get a drink.
Not ghetto - neighborhood. A barrio is a neighborhood. See the difference? Although, it also apparently works for bar. I would have thought cantina would be more effective.
You keep bringing the same thing out time and time again. Yes you can find a $50k house in a small town. It comes with every liability of $50k house in a small town, including the super-small town economy, which may include inability for someone like you to get a DSL or cable because it is just NOT AVAILABLE in those zip codes. In middle of nowhere PA Verizon sold its network assets to some mom and pop company that does not know how to provision anything above a T1 because they have NEVER DONE THAT.
In Philadelphia, PA there are tons of houses that can be had for under $50k, some of which are even livable. Those houses come with liability called “being shot”.
Do you have any brochures you could send me? That Philadelphia thing sounds nice. I have a sister-in-law that would be a perfect fit for one of those neighborhoods.
Try Camden.
BTW, there’s no earthly reason to live in upstate NY unless you’re a NY State retiree or have relations up there. The taxes (income, sales and property) are very burdensome and the government is very meddlesome.
Evil Capitalist, how right you are! People forget that house prices sometimes factor in extra conveniences, climate, access to transportation, universities, and jobs that pay above subsistence. I stumbled on searching NAR’s Realtor.com and looked up Tennessee. Lots of cheap shacks. Yes, they were shacks. It’s idiotic to buy something inexpensive because it’s low cost. There is most often a reason it’s low cost.
There are times where “location, location, location” is priced way too high. This is one of those times. Prices in those locales will fall 50% from their peaks, according to the Case-Shiller index, and echoed by Peter Schiff. I hope this is a slow decline so that I can have more years to save more in securities and precious metals and buy LOW!
Yeah, on Craigslist my husband and I found an amazing 60 acre “compound” in PA, which had formerly been the poor house. Really. In the 1880s. Poor folk would work the farm. It was “only” $160K, or some such thing. A cool restored vintage home, and several outbuildings. We started fantisizing about turning it into some retreat for all our friends. Then I nosed around the internet to discover that entire area is in the middle of about 4 toxic waste superfunds, due to all the mining and factory waste. The groundwater is tainted, we’d probably glow in the dark.
Id have to research stuff like that. Maybe you can get it for $80k and just don’t drink the water(get it from the rain instead) as for the land, is it fit for farming with rainwater?
I did more online digging. The tiny nearby town, per census, was impoverished and elderly. No nightlife, that’s fer dang sure. Seemed like the makings of The Shining, snowbound and hubbie chasing me around with an ax.
“…hubbie chasing me around with an ax.”
Just be glad you aren’t ex-nnvmtgbrkr’s wife. Anyone else remember that post of his from about a year ago?
No. ‘Fess up.
Bye FL, you need to buy your $50,000 dream home and get back to us on how great it is. There’s a reason those houses are 50K.
Hey, you can always try the county where I live:
Martin County, IN, Statistics
Estimated median household income in 2005: $38,536
Estimated median house/condo value in 2005: $79,400
Median montly rent in 2000: $356
Median monthly costs for houses with a mortgage $688
Crime in 2005 [Reported to County Sheriff]
Murders: 0
Rapes: 0
Robberies: 1
Assaults: 2
Burglaries: 13
Thefts: 27
Auto thefts: 8
Yep, small town. So what? I’ve got 2 acres (paid less than median price), am growing fruit and vegetables, and get my gas at a co-op which is from 4 to 10 cents a gallon cheaper than most stations.
Got a young hunting dog and an old wife… don’t need much more.
How about a young wife and old huntin’ dog?
aladinsane’s law: Anything that has “Classy” in it’s title, isn’t.
“Nathan Warren, a limo driver, knows this first hand: He has seen his monthly wages drop by 40 percent to about $1,800 since late last year. His work week at Newport Beach-based Classy Ride Limousine Service was reduced to three days from five amid slow business.”
Nothing says class like your picture in a brandy snifter.
http://snltranscripts.jt.org/00/00pimpressions.phtml
Same goes for “world famous”. If you have to say it, you ain’t.
Too funny. I was thinking the same thing. My mom used to have a saying: if you have to say it (”classy”), ya ain’t. Meaning if you have to tell everybody how cool/smart/rich you are then you probably aren’t.
“‘This is a time to have cash, not to spend. So, I’m cutting wherever I can,’ she said.”
cash is queen.
How much Overpriced cosmetics do you think and overpriced purses do you think that woman has?
HOly moses. I think I spent 500 in 3 yrs.
No, no, no! This is a time to spend your hard-saved $$ and get great merchandise at a DISCOUNT before inflation really kicks in (especially on foreign goods). Please see my post below about hubby’s new car. And remember that great violin I got recently? This a great time to be a spender. The only catch is, you had to have saved your money before.
What’s that, Ms. FB? Oh, you already spent your entire future life’s earnings on a depreciating asset and now your credit is toast and you’re worried about losing your job? Can’t imagine how you will manage to save any $$ now, much less manage to come up with the cash you need to buy anything, whether it’s on discount or not? Well, let me see, I think I can help you out. How much do you want for that hair of yours?
Patience is a virtue.
At least by this statement she sounds like she found her lost mind.
“Over the past three months Wiederhoft pared her spending on clothes to $500 per month from about $3,000″
WTF?!!!
“causing them to trade up to $500 Coach handbags and $1,000 espresso makers”
Okay, I’m not completely innocent. I’m guilty of the 1K esspresso machine.
I’ve got a Vitamix which is kind of expensive but it will last 20 years and gets used 2x every single day. Plus, Costco had a deal on them.
Booo-yah! I got the same deal. You could grind up an armadillo in that baby, couldn’t ya Tex!
or reduce a California redwood to sawdust
or mount a Joshua tree on the on the blade and really get freaky. A JT is one thing, but a JT at 3000 rpm is another thing all together.
Are we housing bloggers all caffeine fiends?
I thought I spluged on the $100 self grinding coffee maker…
Ummm… as much as I appreciate the proper use of a JT, I’ll pass on making coffee from it.
Got popcorn?
Neil
No, my friend, you missed it. I was talking about the Vitamix. It’s kind of a Bass-O-Matic on steroids which, if modified, could turn a ho-hum ass-missle into a spinning shaft of fury!
ROTFLMAO.
I shouldn’t be laughing so hard at that sick image…
THAT sick image? How about the one where you “spluge” on a coffee maker?
FutureVulture:
I am laughing so hard from that comment, tears are coming out of my eyes.
Ya gotta love those perfect setups
Rancilio Silvia and Rocky. The ultimate espresso combo.
Ha! I have both the Vitamix and a super-auto espresso machine. Costco rules. Granted its not a $1K espresso machine (more like $300) but it sure pulls a good shot.
The tortilla soup recipe with the Vitamix is the best.
“I’ve got a Vitamix which is kind of expensive but it will last 20 years and gets used 2x every single day. Plus, Costco had a deal on them. ”
YEAH… YOU’LL:
1) USE IT 2X EVERY DAY FOR THE 1ST WEEK…
2) “TEMPORARILY” PLACE IT IN THE CUPBOARD… JUST TO GET IT OUT OF THE WAY….
3) 5 YEARS LATER… DISCOVER IT WHILE MOVING…..
4) DONATE IT TO CHARITY
Guilty here too… No Coach Bags mind you… However I do have an Astoria, single group professional model. Used it for a mobile coffee service - now in the kitchen… 2,500.00 - paid cash at the time. Love it. Saved more than that in not going to Starbucks in the past 3 years. Not to mention the protection a commercial-grade espresso machine offers. I had one to three cops stop at my house several times a week for lattes.
C’mon……you had to be offering more than lattes.
I have a Harley Sportster, but it’s a Sportster, not a hog, and I ride it to work. Does that count?
Cheers,
MacAttack
you didn’t say what type of Sportster.
R, L or C?
RE: have a Harley Sportster, but it’s a Sportster, not a hog
Hope you like it…’cause you’re gonna own it for life…
Unfortunately, Sporty’s are lousy for re-sale-especially in a Depression.
74’s rule.
I would pay that for a great machine; however, we were happy with the $400 machine we had until daughter took it off to college with her.
Man, all I took to college was a $30 hot plate. Kids are so spoiled these days.
Hmm
Yeah, we have a $1500 machine too, but at 5 years old it is still going strong and I never visit coffee houses unless traveling. It comes from a basic view that you buy junk over and over, but quality just once.
OK, I have to ask. I had a friend who was stationed in Italy and he came back with this little, cheap, stove-top espresso device. I thought it worked great. He told me that’s what they used there.
So what would be the advantage of an expensive machine and what are some good brands?
I boil my coffee in a $10 camp stove coffee pot, same as Grampa did. CityGirl says it is the best coffee she ever had. I don’t know nothin about spresso machines.
personally I love coffee, and hate spending $3 at cofeehouses. We went through a parade of cheap machines which lasted a few months and then broke, so I decided to get a really good one. I ended up with this machine although in 2002 it was around $1150 with free shipping. My father in law has a Saeco full auto machine and is also very happy with it. I think he got it for $700 on ebay. In terms of advantage, the machine is faster and reliable. We did the same thing with our blender and ended up with a professional model. I doubt I will ever buy another one.
Of course to put in perspective, you could buy enough of these to go all the way around your living room side by side and it would still be cheaper than the mistake of paying $500K for a $250K house
Years ago an Italian boyfriend taught me about the aluminum stovetop expresso maker. They are incredibly cheap and make fantastic coffee. I make lattes by microwaving 1/2 cup non-fat milk, 1/2 water and then whipping it with a little battery operated wisk thingie that I got at the local coffee shop. Pour this milk mix plus the coffee into a cup. Sprinkle some cinnamon. Delicious.
Here’s a couple of links I found by googling
stovetop expresso maker — there were 350K hits but I didn’t have time to look at all of them
http://www.fantes.com/espresso_stovetop.htm
http://www.ineedcoffee.com/03/mokaexpress/?page=2
whoa whoa wait a minute.. I thought spending on anything but necessities was a total waste? After all the attacks on the dog groomers and scrapbooking shops…
Coffee is a necessity.
did the same thing with cookware. 1st set of calphalon was 30 years old. Finally replaced with new non stick set. Paid a bundle, but figured it was the last time I have to buy cookware. We started buying less quantity and more quality several years ago when we started replacing household items.
I got my espresso machine at a yard sale for 15 little tiny dollars, a packet of exploding pop rocks, and an acorn. That’s what was in my pockets when I stopped by at the end of the day, and they just wanted all their stuff to go away. It was originally marked 90 bucks or something like that. I also got a big box of paperback sci-fi books, for free! That was a good sale.
I drink the crap in the office kitchen.
Hills Brother or whatever else is on sale. Cheapsteaks - grrrrrrrrrrrrrr……….
Free Flavia in my office’s kitchen. But I drink mostly green tea of Flavia. Occasionally I go for the Colombian or French Roast Flavia.
Poprocks! One of my college buddies invented those. Where’d you end up Fitzpatrick?
Cash or HELOC?
I have a $200 Capresso coffeemaker with burr grinder, but the last one lasted 6+ years and paid for itself within 1.5 when compared to a typical Starschmucks habit.
And a $10k motorcycle, paid in cash, but ya gotta have a reason to keep going another day..
$500 a month is about what I live on.
I know. Can you believe that? I don’t spend $500 a year on clothing.
Whoo hoo - naked trading females! Yes
Ha ha. “Trading females”. Females who trade, or females used for trading? Hmmmm ….
*covers eyes*
LOL, next you’ll be talking about naked short positions. This is a dirty board.
I reluctantly paid $49 for a pair of jeans the other day and it really pissed me off!
I’ll plead guilty to spending a couple of hundred bucks or so on clothes this month. It’s called spending the Christmas gift money, and when it’s gone, it’s gone.
BTW, I saved half of said gift money.
Yep Nuts, It’s a damn sickness I see college kids with shoes clothes and bags that would keep me going in the clothes dept. money wise for years.
You want to experience eveything that is wrong with our society, take a trip to the OC and stroll around South Coast Plaza.
I went there once in 1987 right after the stock market crash. It was business as usual. Incredible.
You want to experience eveything that is wrong with our society, take a trip to the OC and stroll around South Coast Plaza.
Not just SCplaza. I did trips into extreme south OC into such exotic locales as Aliso Viejo, Mission Viejo, laguna Nigel, RSM. Cota, and the malls there equally hi-end & no different than beverly center, manhattan bch mall or Century City Plaza. Extreme SC at height of bubble was obscene flaunt-it wealth and there were plenty of real live OC housewives in 20’s -40’s, all blond, tanned & fit flaunting their supposed ‘wealth’ from exploding SC RE.
I wear my clothes to death. Bought in the 80’s, some I used for the Grunge look in the 90’s, and since I gained some weight in the 2000’s my clothes fits the style today which is the tight on your body look.
If only I could manage that. I wear my clothes until they destruct, which varies. Jeans are a two-year proposition at best— I’m hard on jeans.
But I have a sweater, close-knit, that a friend gave me in high school after she outgrew it. I need to ask her parents where they got it since I’ve owned it for over fifteen years and it still looks pretty new. (I need to go over it with the sweater shaver, that’s all.) I want another one. In a different color, of course. Then I’ll have two!
Awkward indeed! Wow, this is getting better and better everyday in the Neil “Gotpopcornian” sense.
How exactly DOES one bring a date home and explain you’re still sharing a house with the ex?
I get a picture in my mind from that show “Weeds” where Celia stuffs her wheelchair bound husband into the laundry closet while she does the real estate developer right on the kitchen counter….
Gentlemen can tell your female date that this is your “cook and house cleaner”, Ladies can introduce their ex as “gardner /mechanic”. Now if it happens to be a gay couple, there are problems.
Well at least we now know one good use for granite countertops.
I hope the granite was sealed.
Hi honey. You remember Suzanne, our old realtor don’t you? WEll, we’re goin to head over to my side of the house where I’ll be researching HER…
ROTFLMAO
Yea, but Suzanne is a ‘name brand.’ She’ll demand pretty hefty cash up front.
How does that work? Normally, right after a divorce both men and women date like bunny rabbits. One of my friends is waiting for the divorce papers to dry so he can propose to his girlfriend (no, not the cause of the divorce). I couldn’t imagine what it would have been like if he lacked his own space…
Got popcorn?
Neil
Good thing ill never marry. Most end in divorce and she takes half your money
Go away, loser.
sad for you.
Nice thing you want to go to Oil City.
Sometimes bud it is the other way around.
For those of you thinking about slitting your wrist, if somebody brings up the prospect of buying an overpriced house in American Siberia, again…
Make sure you do it lengthwise, going with the veins.
Feh. That’s like saying that all men are lazy bums who just want their wives to support them (three friends’ husbands) or that everyone cheats on their spouse. Or, for that matter, that you could get laid off one day, so what’s the point in having a job or that every mortgage sucks so what’s the point in ever buying a house. Just because there’s a lot of failure in the world doesn’t mean there isn’t a lot of good, too. The failure exists, but don’t make it doubly bad by letting it cheat you out of the good.
Have hope.
In my experience, it is a vain attempt to cover the pain.
Some acquaintances of mine are in the process of a divorce. Two young children unfortunately.
For years we would see them at various social events, dressed to the nines (and we have some expensive clothing stores in Santa Barbara- my wife went into one and picked up a WHITE T-SHIRT with a price tag of $250! She was so shocked she dropped it on the floor).
Turns out of course they HELOC’d the house to the hilt.
They aren’t necessarily living together in the house (which I’m sure will be foreclosed soon). Instead, they are doing something called “birdnesting”- She stays the week at the house with the kids, dad crashes somewhere, on weekends he gets the house with the kids, and mom crashes somewhere. I guess this is good for the kids, who at least have their rooms unchanged, but who knows how long this will last? Has anyone heard that term before or this a new post-bubble divorce invention?
It’s been going on for a while in a certain segment of the population - usually people that can afford the house and another place to stay. Probably nice for the kids to have one home. My kids knew that they lived at home with mom and then went to visit dad at his house. They didn’t have replicated rooms or second whole sets of life at his house. Where they lived wasn’t as big a problem as finding time for it all. Weekends with Dad become a problem when they get older and have sports, art or social weekend plans. Unless you live close it can be just nuts.
Well, I’m starting to see the ‘Re Listings’ show up in the Bay Area. These are all houses that were for sale last year, and then went off the MLS, but have started coming back on. A good deal of them are relisting at lower prices, up to about 100k off. I should have been writing down addresses and prices on houses that were vaguely interesting, but I have noticed ones that I know were listed for 1 mill to 1.1 mill showing up in the 900K range.
Wishing prices creeping down in the Bay Area. Awesome.
About time! Still a major ripoff though!
I hope this isn’t a double post:
My neighbor tried to sell her house for $757k last year. Her house is the smallest, least updated one on the block, and her asking price was higher than the highest sales price ever on the street. No one bought it, so she decided to rent it out.
She put it on the market for $400/mo more than the last house that rented out (even though that house was bigger than hers). She has now reduced her asking price by $300/mo, which is progress. It’s been for rent now for about 2.5 months. She has had a few applicants (including myself), but has rejected all of them (with no explanation as to why, even though she’s required by law to give an objective reason). Apparently, no one is good enough for her precious house (especially not any lowly renter). She’s still hooked on that “everyone wants to live here” BS. I guess she’s waiting for the Queen of England to apply for it. Funny thing is that I’m pretty sure her own IQ is about 90.
The arrogance in the Bay Area may have caused a delay in its decline, but I think it will inevitably result in an even harder crash because the homedebtors will all hold on until the very last minute. They will be so cocky about the “fundamental, long-term value” of their houses, that they won’t even try to salvage themselves, I’m afraid.
Looked at the SF craigslist the past two weeks and I see a lot more short sale ads but I also see desperation as well. $700K for 1000 ft shacks. Their trying lure in knife catchers but there are only a few of them right now. I give it another year. They are going to test out the Spring season but the results are the same a last. I think that is when we start to see REAL desperation.
Just letting you guys know that you should expect to see one of my patented double posts later.
Total ripoff, but it’s nice to see the cracks in the walls of Jericho.
My neighbor tried to sell her house for $757k last year. Her house is the smallest, least updated one on the block, and her asking price was higher than the highest sales price ever on the street. No one bought it, so she decided to rent it out.
She put it on the market for $400/mo more than the last house that rented out (even though that house was bigger than hers). She has now reduced her asking price by $300/mo, which is progress. It’s been for rent now for about 2.5 months. She has had a few applicants (including myself), but has rejected all of them (with no explanation as to why, even though she’s required by law to give an objective reason). Apparently, no one is good enough for her precious house (especially not any lowly renter). She’s still hooked on that “everyone wants to live here” BS. I guess she’s waiting for the Queen of England to apply for it. Funny thing is that I’m pretty sure her own IQ is about 90.
The arrogance in the Bay Area may have caused a delay in its decline, but I think it will inevitably result in an even harder crash because the homedebtors will all hold on until the very last minute. They will be so cocky about the “fundamental, long-term value” of their houses, that they won’t even try to salvage themselves, I’m afraid.
Yah, I’m sure there are some people who are going to take a beating. I have a coworker who can afford his house, bought in 2004-5ish, and is trying to sell it for what he bought it for (and is not optimistic about getting to do it.) He wants to list it for 50k under what they paid for it and take the hit and run, but his wife wants to get out at least what they put in. I don’t envy him in his situation, but at least he’s got a fixed rate he can afford assuming they stay employed. But here is a guy who realizes it’s never gonna be as good as it was in 2006ish and currently owns a home (or owns a loan) and is trying to get out while the getting is… not as horrible as it will be soon.
Ditto for IL. It seems the sellers were taking the houses off the market for the obligatory 90 days in order to reset their DOM.
Same thing in Denver lately. I think real estate has finally cracked here, as I am seeing price per sq foot fall even intown especially in the last few weeks. Nothing substantial yet, but its great news. I look forward to Spring. So many homes for sale. So little buyers. Its a beautiful thing. Bursting housing bubble and recession are now finally recognized by J6P.
House in my neighborhood in prime SF started at $3.8mil around April, down to $3.3mil by fall, finally sold in December for a cool $3mil. Sold for $3.5mil a year and a half before that…
Nice house.
“In Riverside County, 160,000 homes were constructed since 2000″
What was the population increase in Riverside county during that time period?
255,166 in 2000 and 285,537 in 2005.
160,000 houses are enough for how many, let’s say 3 people per household. So that is housing for 480,000 people in 7 years. But the population increased 40,000 is five…
…do we see a problem?
I see that problem all over. Nobody is really addressing the issue of how many additional houses/units were constructed all over the country vs how many were needed to accommodate population growth. All the while that farms were being paved with houses out in the central valley, there has been infill housing built closer in in the SF bay area which, no matter how you get into it, does not come with a 3 hour commute. This whole thing is like musical chairs in reverse, where the music stops and there are a whole bunch of empty seats with no takers.
…do we see a problem?
I see debt people.
I believe that’s TxChick57’s old quote.
Got popcorn?
Neil
I drove around the city of Riverside a couple of weeks ago. There are “for sale” signs everywhere.
Interesting how all of the people mentioned in this thread that are on the verge of financial disaster, even give a rat’s patootie about who’s going to win the state primary, but they do.
Something like “I’m about to get foreclosed on, but I like Clinton”
When stripped of everything you might as well become a socialist.
Absolutely and the politicos know it full well! Your big fat nanny will take good care of you.
Most of Wall Street, the banking industry and real estate industry have always been socialists — they just don’t admit until the fit hits the shan, their bubblicious speculations collapse and they go running to the government to bail them out. Privatized profits, socialized losses.
It is too late, about 4 years, for any candidate to make a difference and they shouldn’t anyway. Let the market fall. This is the best reality show I’ve seen. Even if rates get frozen for a year or two it would only escalate the values down faster. Affordability related to incomes is the answer, not some voodoo lending schemes. From what I have been hearing all candidates favor some sort of over sight in the lending, banks, and appraisals which will also bring homes down to affordability.
Preaching to the choir, but I just have to write it down every now and then. Gets it out of my head.
Middle-class neighborhood in Stockton?
The “just walk away” phenomenon is a fairly recent occurrence in these Untied States, and it’s hitting just as California is about to more closely resemble the Florida real estate market…
There isn’t any immediate penalty to “walking away”, so I expect people to do it in droves, the more thoughtful ones mailing their keys back to the lender.
A whole different flavor of revolution, from that of 1776.
Call it… “The Boston Key Party”
“Boston Key Party” — lol
“just walk away renae..”
1773
but what is a few yrs amongst friends!
DJ queue up Nancy Sinatra’s Boots
“As prices drop to the point where “they can’t possibly go any lower” a new batch of knifecatchers will emerge and will bail out the financially exhausted FBs.
Then prices will drop some more … and the beat will go on.”
I see that happening all the time. I tell them that now is *not* the time to buy but it falls on deaf ears.
Incidentally, ill be buying a cheap house in NW Pennsylvania, it might amount to catching a tiny knife inches from the ground. I would rent except the fact rent costs 2-3x more than buying. The real buying will be when $300k homes drop to $100k then I could buy one of those.
“ill be buying a cheap house in NW Pennsylvania”
idle threat…
Incidentally, ill be buying a cheap house in NW Pennsylvania, it might amount to catching a tiny knife inches from the ground. I would rent except the fact rent costs 2-3x more than buying.
I did some quick calculations that say if you can get an ok home for less than $100k, it just doesn’t pay to rent.
Now to discuss CA, FL, VA, NV, AZ…
This has a long way to go.
Got popcorn?
Neil
As long as you move out of the basement soon and see what life is like off the computer dude.
I friend of a friend who works at an auto dealership in San Francisco said things are slower than normal.
We just bought a new car for the hubby:) The base price of our model is less than last year, and haggling really wasn’t all that hard. I’m not an unreasonable haggler; I just wanted the price that “others” paid as reported by edmunds.com (but I didn’t tell the salesman that). Even still, I expected it to be harder. We were his only sale this weekend, although that may have been because of the rain. I’ve never heard of a car company decreasing their base price on a popular model, though.
Ha! I beat Edmunds for my wife’s recent car purchase (in December).
Sales were slow then. I see no reason they’ve increased… Well done Big V. Your experience was similar to mine. Of course I blogged it.
http://recomments.blogspot.com/2007/12/update-car-shopping.html
Got popcorn?
Neil
Any takers?
http://visalia.craigslist.org/rfs/562352101.html
Geez. $245K at Visalia? Oooh a tough sell.
“Geez. $245K at Visalia? Oooh a tough sell”
It would be an ok deal if there were any fri*kin hi=paying jobs in Visalia which when i go thru there once a year seems to be only Walmart, chain mall retail & a few isolated farm machinery repair shops. Only good thing about Visalia= close to Sequoia NP & decent Sierra foothill country.
Have you all forgotten this so soon?
http://www.youtube.com/watch?v=33OE65bNclc&feature=related
Jingle Mail = “Boston Key Party”
Revolution Happens…
Borrowers lament that politicians will say anything to get elected and that none of those plans will help them. What they have yet to realize is their is no plan that is going to help someone that has a mortgage that is 10 or more times income, especially in a declining market. Those same politicians, if they ever understand the scope of the problem, will also realize there’s not much they can do either.
There also seems to be surprise that defaults are not limited to sub-prime loans and lower-income borrowers. The issue is only minimally the loan terms or the income of the borrowers. Most people who bought near the peak of the bubble paid too much and borrowed more than they will be able to repay. There’s going to be a very high default rate for anything purchased in the 2004-2006 period irrespective of loan terms or borrower’s income.
affluent-effluence-influence
“But economists say that recent signs of cutting back by the affluent could hurt the economy.”
Foreclose Horse…
“Just look at the cutbacks by Dali Wiederhoft, a 52-year-old marketing executive from Reno, Nev., made skittish by a volatile stock market, a 20 percent decline in her home value and recession fears.”
“Over the past three months Wiederhoft pared her spending on clothes to $500 per month from about $3,000;
Sorry for mentioning this but does Hillary want to freeze interest rates for five years or resets?
I swear there is not end to this terror for savers.
I used to spend 25 bucks at the DAV but now useless new and used crap is outlawed at my house.
I talked to my brother and he told me to spend my savings.
Anybody else going to rob Peter to pay Paul?
Hillary wants to freeze teaser rates, I think. Whatever. She also wants to allow judges to rewrite mortgages in BK cases. It will never pass and, even if it does, it will only convince every mortgage lender in America to close its doors altogether. Why write a mortgage if the FB can just file BK or vote for Hillary and get a new one in his/her favor later?
Who is teasing freezers?
History reveals once majorities can vote themselves largess, the system will collapse from within.
“I swear there is not end to this terror for savers.”
You can say that again:
http://www.bloomberg.com/apps/news?pid=20601109&sid=arcwG_0LM0lM&refer=home
G-7 Frets Central Banks Can’t Avoid Peril Without Helping Hand
“Russo proposes offering government-backed loans to U.S. homeowners with adjustable-rate mortgages, whether prime or subprime. He also advocates a tax credit for people who buy homes this year that would triple the current benefits mortgage holders receive.
Stephen King, chief economist at HSBC Holdings Plc in London and a former U.K. Treasury adviser, says the crisis may get so severe that governments will be forced to bail out homeowners who fall behind on loan payments and to buy up worthless assets that are hurting banks.”
“Bernard Connolly, global strategist at American International Group’s Banque AIG unit in London, even predicts authorities will eventually have to buy up stocks to prevent a crash.”
……”Such a shift at the IMF is “mildly historic” and “an indication of the gravity of the situation we face,” says former U.S. Treasury Secretary Lawrence Summers.”
“We hate the idea of extensive government intervention, but it’s going to have to come,” Connolly says. “The crisis is real and huge.”
“governments will be forced… to buy up worthless assets that are hurting banks”
paying money for an asset known to be worthless is just a camoflaged handout. if in fact worthless these items should not be called ‘assets’ at all!
AP
Bush Budget Would Bring Record Deficits
Monday February 4, 5:45 pm ET
By Andrew Taylor, Associated Press Writer
Bush’s Record $3.1 Trillion Budget Would Bring Big Increase for Military — and Federal Deficit
—————————————-
Mr. Bush is setting the stage for some serious contraction going forward in the Bond market.
More guns, less butter.
this supports the deflation of things, and inflation of price of the critical must haves…food, water, energy.
I have wondered to myself in a quiet place why Microsoft did not engage in some type of revolutionary idea of putting people to work at tasks that are needed, real things, not virtual things are going to change “what is so”
The combined market capitalzation of GM and Ford are less than the offer for Yahoo…why? Information control is the only weapon I can think of.
Yahoo is profitable. Plus Microsoft wants to buy it.
GM and Ford are not profitable. Nobody wants to buy them.
Hence, more market cap for Yahoo.
Investment should be based on prospects, not cash flows. Microsoft has no prospects but generates a lot of cash. A Yahoo managed by Microsoft is worth a lot less.
(A quick synopsis of New York Times article by Joe Nocera “A giant bid that shows how tired the giant is”)
I did not go long Formation Capital, but I did think about driving up to the factory this spring, just to get a lookey loo, and possibly inquire about the need or desire of my services…Im thinking a little more longer.
“Investment should be based on prospects, not cash flows. Microsoft has no prospects but generates a lot of cash. A Yahoo managed by Microsoft is worth a lot less.”
That is so wrong. Speculators bought homes on prospects. If they bought on good cash flow (rental income), then we wouldn’t be in this subprime mess.
Give me a cheap company with good cash flow any day.
Butter will only make us fat(er).
The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance. (Cicero, 55 BC)
Holy sh!t — it’s not different this time!!
Yea, and we know what happened to Cicero.
exile amd return… opposition and death.
Bush’s Record $3.1 Trillion Budget Would Bring Big Increase for Military — and Federal Deficit.
This is only one of many reasons why buying gold bullion with cash is the best defense for your nest egg. And there will not be any confiscation of your gold or other precious metals (beat the conspiracy theorists to the punch).
Vote for Ron Paul.
“Vote for Ron Paul.”
Exactly; vote for the U.S., not the Middle East!
Nearly 8 years of Bush rule and the country is practically bankrupt. The rats don’t care. They’re all going to be walking into really cushy private sector jobs as consultants with 7 figure salaries!
“”It’s a manageable deficit — it isn’t the largest in history by any stretch of the imagination — and it’s one that can be managed if we get economic growth back on track,” Nussle said.”
That whole cart before the horse thing eludes these people, doesn’t it?
BTW:
‘Everybody wanted to do it now, today. Collectively, we went a little nuts out here.’ - Bill Herrin, an economist with the University of the Pacific.
Equals financial mania.
We have had financial mania for a few years now, and it does not seem to be working out very well.
The structural changes regarding the management and accumulatiton of debt has not only infected the government (in deficits dont matter) the infection has spread to the consumer, a shadow of the citizen that once thought this place was the land of the free and home ofd the brave.
Somebody is about to blink, and this is gonna get out of hand. Wells Fargo has delayed my double payment for the first time in a couple of years….thats a rejection of aggresive debt service.. Im almost inclined to churn the money so hard that confusion once again spills into the market place….anybody want to lose some money? keep pissing me off.
“We have had financial mania for a few years now…”
By my reckoning, since 1982.
“Rolling bubbles” is how the former Chairman of the Federal Reserve, Mr. Alan Greenspan described it at Jackson Hole in 2005.
is it to be the alternative energy model formed by batteries made of the cobalt ground out of the mountians known as the rockies for the cars built in India adn “value added technology” that define an American mobile/stationary energy consumption unit.
is that the lockbox? Strategic “in ground commodity reserves of the US”…is that the future? food as energy, wind as food? water as gold?
i’ll be back at 0600PST 2-5-08
10% in the market
15% in the bonds
25% in cash deposits of FDIC insured
5% in the precious
45% in the money markets.
if you desired to cut the legs out….you better have a very strong hand. All the market exposure is short margin.
I nominate his comment for most honest remark ever made about the California real estate situation by an economist.
“A man may run into debt, but if he gets out he does so at a walk.” ~Wylie Jones, banker.
nice quote
“The cafe has laid off two of its five staff members. Sales have diminished from $500 per day to $200 per day since the summer. ‘If there are no customers, we don’t have money to pay,’ said Margarita Jimenez, the cafe manager and daughter of the owner.”
That comes out to $66.67 a day per worker before paying overhead, how do you stay in business with sales numbers like that. Sounds more like a taco wagon than a brick and mortar establishment. Of course there is the possibility that some sales aren’t booked.
A friend’s wife owned a coffee shop in el lay…
I asked him once, “how much does she make?”
He said she put in 65-70 hours a week, had peyton place issues all the time with the staff, when they weren’t robbing her blind, and cleared about $35k a year.
I ran the calcs today on the fiscal payroll numbers:
total Gross is DOWN 11%
FICA is only down 6%
what does this imply?
if you are a W-2 wage slave, working only 10 days of a 12 day pay is within 4% of the take-home……
I have a bookeeper that tells me these things….ok, Im a bookeeper, you got me. I gotta stop putting in 14 hour days.
Im also a business owner, a home owner, a college grad, a father, and an educated member of the populace…..
I’m gettin pissed. seriously, this is my third Sierra Nevada Pail Ale.
form a pale, and your where the voz is.
I only do a 470k payroll number. its a part time job. like all the other part time jobs.
parenting, home care, education, investing, human management…my life is a part time job that cant be outsourced. it will never be outsourced.
Voz, The problem as I see it, you are drinking pale ale! The correct drink is Lienie’s Big Butt.
Enjoy the video good buddy!
What happens when you mix the wrong drinks!
Video on Funny stuff.
http://www.thefunnystuff.net/viewmovie.php?id=657
“Collectively, We Went A Little Nuts Out Here In California”
DrStrangelove, I cannot believe that this thread title didn’t strike a chord with you.
President Merkin Muffley: [to Kissoff] “Now then, Dmitri, you know how we’ve always talked about the possibility of something going wrong with the Bomb. …The *Bomb*, Dmitri…. The *hydrogen* bomb! … Well now, what happened is … ah … one of our base commanders, he had a sort of … well, he went a little funny in the head … you know … just a little … funny. And, ah … he went and did a silly thing. … Well, I’ll tell you what he did. He ordered his planes … to attack your country”
Economic H-bombs…
Don’t say you’re sorrier than I am Dmitri. I’m capable of being just as sorry as you. All right then, we’re both sorry…
“De-leveraging’s a bitch”
Charlie Gasparino, CNBC 2/4/08
deleveraging is a bitch….banks want to good debtors paying the monthly……..Im about to step off the debt wagon.its on fire and heading for the gulch.
CHARLES HANDY: Now that I am sitting where the great Peter Drucker walked and talked, I wonder how he would have reacted to some of the things that bother me. For instance, how would he respond to what I call “Adam Smith’s Great Conundrum?”
Adam Smith, the father of economics, 250 years ago, said: “An investment is by all right-minded people to be commended, because it brings comforts and necessities to the citizenry. But, if continued indefinitely, it will lead to the endless pursuit of unnecessary things.”
Now that I am living for a while in California, I am staggered by the amount of “unnecessary things” that I see in the malls that dot the suburbs. America is no different from anywhere else, of course — just more so.
The conundrum is this: All that stuff creates jobs — making it, promoting it, selling it. It’s literally the stuff of growth. What I’d love to ask Peter Drucker is: How do you grow an economy without the jobs and taxes that these unnecessary things produce?
http://marketplace.publicradio.org/display/web/2008/02/04/drucker/
That’s why I live by the beach, I’ve tried other parts of LA but they’re so built up, no nature or open space whatsoever, there’s nothing to do but go around and buy stuff.
migrate north…the La basin and the IE, are war zones.
I just try to avoid LA altogether.
It takes all kinds to make a world.
It’s easy to do away with unnecessary things. That’s called Central Planning. Let a committee decide what is necessary and what is not.
That’s what I say. It’s more the same here than anywhere else.
last call,
big bank faliure this week….please get you finances straightend out.
this is a plea to the kool-aid drinkers that hope to hold on.
SKF was under a hundred this week….and FXP is getting back to buy levels….lets keep the Chinese printing for another month or two.
I didn’t see it mentioned in the comments the past day or two, but:
Furniture retailer Wickes files for bankruptcy
In the filing, made in federal court in Delaware on Feb. 3, the Wheeling, Illinois-based company lists debts of more than $50 million and assets of no more than $50,000.
Another furniture chain store goes BK….
Holy cow! Wickes has been around forever. For Chicagoans Wickes is not too far behind Empire Carpets for local brand recognition.
Yeah, something is certainly different this time. We’ve seen many accounts on the HBB this past year about companies that have survived several recessions only to succumb now. Everyone expects the candle shoppes that were started in 2005 to fail, but this is bigger than that.
Why would you ever go into the furniture business? Aren’t they on a perpetual “going-out-of biz” machine.
FDIC..
failing to prepare is a preparing to fail……
I simply cannot get the message across more strongly…the market is crashing, the defaltion is real, interest rates do not matter.
please, I beg you all…no more debt.
Voz my friend,
The situation is serious, but not dire.
There are so many conflicting economic data points, and out of 27 that I follow, only 2 suggest a hint of deflation. Those 2 are Housing and US equity prices.
On the other side, the data from household survey which showed a loss of over 1MM jobs last year (BLS -showed a gain of 1MM+); This month the household survey showed a gain of 650K jobs. This fits in with ADPs report. The data from the ISM shows GDP for January grew at 3%. Since manufacturing now accounts for only 10% of GDP, make manufacturing drop 10% (which is not happening) and the GDP drops 1%.
IMHO the biggest risk is a dollar crisis. The risk is that with US Treasuries trading at only 250bps above Japanese fund rates and 200bps above China fund rates, that there will be nobody but the Social Security to buy US Ts. China would do better with there funds buying Chinese bonds or Japanese bonds. Since China (for the first time in years), refuses to comment on what it will do with its funds, there is a real risk of riots breaking out in China over losses involved in its US investments. Fun stuff, huh?
On the plus side the US current account will not get larger and already shows flatline.
The Federal Reserve did a gamble. If the Federal Reserve continues with its course of action (deflation of the dollar, reflation) in 6 months inflation will be at 6%+.
Relax for another month, by then there should be enough data points that we will all be drinking pale ale.
1/2 Quadrillion $$$ Unwind?
http://tinyurl.com/2cohtn
From today’s New York Times:
“For the 34 million households who took money out of their homes over the last four years by refinancing or borrowing against their equity — roughly one-third of the nation — the savings rate was running at a negative 13 percent in the middle of 2006, according to Moody’s Economy.com. That means they were borrowing heavily against their assets to finance their day-to-day lives.
“By late last year, the savings rate for this group had improved, but just to negative 7 percent and mostly because tightened standards made loans harder to get.
“’For them, that game is over,’ said Mark Zandi, chief economist at Economy.com. ‘They have been spending well beyond their incomes, and now they are seeing the limits of credit.’”
http://tinyurl.com/ywm488
34 MILLION Aemrican households refinanced to take cash out (not simply to lower interest rates)? It would take many trillions of dollars to prop up this crashing bubble, which is potentially WAY bigger than the subprime mess. So why isn’t the Press in general all over this looming disaster?