The Year Of The Walk-Away
It’s Friday desk clearing time for this blogger. “If you’re planning on selling, it’s become more important to make sure your house is appealing, especially with a deep supply of homes on the market and a slowdown in sales across the area. ‘I’ve had buyers recently drive up to a place and not even want to get out,’ said Marlow Harris, a Seattle real-estate agent.”
“Suzanne Buchanan, president of Seattle-based SK Builders, recently built two Craftsman-style homes in the Rainier Beach area. The four-bedroom homes have been on the market for about seven months. Both appraised for $840,000 and $860,000 respectively, but their listing prices since dropped to $739,000 and $759,000.”
“While Buchanan has had several serious buyers, the offers fell through when their own homes couldn’t sell. ‘We’re just going to keep them on the market and see what happens,’ said Buchanan.”
“Evidence of the housing slowdown shows up in all kinds of places. Just ask Oregon commercial broker Jordan Samiee. Samiee needed an administrative assistant and got 83 applications for the position that pays $36,000 a year.”
“More than half came from real estate brokers or mortgage brokers, and some have master’s degrees. ‘People better qualified than me coming to work for me,’ Samiee said. ‘They’re just not making any money right now. They want a steady income.’”
“For most of its history, Campbell River has been a logging town, but in recent years the retirement and recreational property wave that has swept over the southern part of the island has been washing north, pushing up property values and driving real estate development.”
“New condos won’t make up for the loss of about 250 jobs from the Elk Falls sawmill in Campbell River. In the meantime, Mackenzie’s councilors have agreed to a pay cut next year and are working on a community development plan.”
“‘We’re not toast. We’re just toast right now,’ said Mackenzie mayor Stephanie Killam.”
“Oahu’s housing market has taken a plunge. Figures released today by the Honolulu Board of Realtors reveal a 40% drop in the number of homes sold last month compared to a year ago.”
“Linda Lau and her husband are trying to sell their three bedroom, two bath, 1935 square foot house in Queen’s Gate. The Laus had their house on the market last year for nine months.”
“‘We had one bite last time but because prices started falling they withdrew,’ said Lau. ‘Too bad we didn’t put it on two years ago, but it’s on now and we’ll wait it out.’”
“The inventory of unsold homes in the greater New Orleans region reached a record high in February with 8,806 single-family dwellings constituting a 14-month supply, according to the New Orleans Metropolitan Association of Realtors.”
“Phillip Hoffman built seven houses in 2007. Months after locking the doors on the finished dwellings, three remain vacant. ‘My expectations were to sell in the first year and here we are almost two years later with a for-sale sign still there,’ said Hoffman. ‘There is a lot of money going out the door with nothing coming in right now.’”
“The National Association of Home Builders is lobbying for tax credits for first-time homebuyers. ‘You got a lot of guys who came in to office on a ‘cut taxes’ platform. The question is, can the state afford it? Everyone wants a tax break. Get in line,’ said Greg Albrecht, chief economist for the Louisiana Legislative Fiscal Office.”
“Homes in Okmulgee are taking longer to sell, sometimes stretching to 90 days, said Tony Hale of The Nick Agency. The slower sales are encouraging people to sell for less.”
“Hale said he thinks the price drop is due to the credit crunch in the wake of increased foreclosures across the nation. ‘We’ve been having problems getting people financed here,’ he said. ‘They just can’t get a loan.’”
“Questions and answers about home appraisals in an era of mass foreclosures: Q: What is a house worth? A: Whatever an appraiser says it’s worth, even if the appraiser works for a mortgage company.”
“Q: Why wouldn’t a mortgage lender test the market with an independent appraisal? A: A mortgage company wants to write as fat a loan as it can, bagging fees and commissions. Independent appraisals get in the way.”
“Andrew Cuomo, New York’s attorney general, started investigating appraisals on loans Freddie and Fannie were buying. Fannie and Freddie also will pay $24 million to create the Independent Valuation Protection Institute, which will take complaints about bogus appraisal practices. And lenders will have to conform with the Home Valuation Protection Code in 2009.”
“Q: So what do these government- sponsored mortgage buyers have to say for themselves now? A: ‘These initiatives clearly serve the interests of the nation’s homebuyers, the housing markets and the broader economy,’ said Robert Bostrom, Freddie Mac’s general counsel. And, ‘We are pleased to work with regulators to do our part to ensure sound, accurate, independent and reliable appraisals,’ said Fannie Mae general counsel Beth Wilkinson.”
“Q: If this was such a good idea, why did it take a national foreclosure crisis to prompt a state attorney general to think of it? A: Good question.”
“When I went looking to buy my first house, there was a number that wagged a finger in my brain. Twenty percent. That was the down payment. If I couldn’t come up with that, I couldn’t afford the house.”
“Many good homes slipped away. I walked out the front door sighing, wishing I had more money. But it seemed like such a hard and fast rule, every real estate agent and banker repeated it - ‘You need 20 percent down to get a mortgage.’ There was no alternative.”
“So I waited. I waited until I found one I could afford. And I gave the bank 20 percent. And I bought it.”
“This was almost 20 years ago. Things have changed. The other day I read a New York Times story that said the median down payment on a house last year was 9 percent. And almost a third of home buyers put down no money at all.”
“So perhaps it’s no surprise to see so many ‘for sale’ signs on my block, and the next block, and in neighborhood after neighborhood. Or even worse, houses that simply have been abandoned. After all, it’s easier to walk away from something when you didn’t give too much to own it.”
“Nobody wants to wait. We have a sense of entitlement. Gimme mine now. Why shouldn’t I have a house? Why shouldn’t I have a bigger one? Why shouldn’t I buy and flip like my friend the next town over? Look at the TV. Everyone’s getting rich but me!”
“A subject in that Times piece said, ‘I know I’m working the system, but you got to do what you got to do.’ Twenty years ago, that meant wait. Today, it means something else entirely.”
“Juan Medina has no equity on his house and an adjustable-rate mortgage where the interest-only payment has gone up to $5,500 a month. ‘I’m retired,’ Medina said. ‘I tried at least 20 different lenders, and there’s no equity in the home.’”
“The home, according to estimates, has lost about $27,258 in equity, and Medina is one of the 8.8 million homeowners who now owes more than the house is worth.”
“For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built. The Fed reported Thursday that homeowner equity actually slipped below 50 percent in the second quarter of last year, and fell to just below 48 percent in the fourth quarter.”
“Jay Damato, a broker and owner of Elite Financial in Walnut Creek, said the housing downturn is the worst he’s seen. ‘Mostly, in the 1990s you had to put 10 percent down — so if prices went down by 10 percent, you were still even,’ he said.”
“The threat of so-called ‘mortgage walkers,’ or homeowners who can afford their payments but decide not to pay, increases as home values depreciate and equity diminishes. Banks and credit-rating agencies already are seeing early evidence of it.”
“Medina said he hasn’t made a payment for six months and has been denied twice for a loan modification due to financial hardship. ‘The house is the only thing I have,’ Medina said. ‘For me, the American Dream is gone.’”
“‘We got a major real estate bubble,’ Chris Thornberg said. ‘We got consumers due for some major retrenchment, we have a falling dollar, making U.S. assets look that much less desirable, a massive trade deficit.’”
“He said that in December 2004. For years, Thornberg gave his outlook as part of the UCLA Anderson Forecast, predicting the housing boom was about to bust.”
“Thornberg, now with Beacon Economics, says the worst is yet to come. With the peak of loan resets coming in the third quarter this year, this is ‘the year of the walk-away.’ When I asked him if a lot of lenders may end up not resetting, he said, ‘It doesn’t matter.’”
“In housing, we should have seen this coming. He claims that between 2004-2006, .75 new homes were built per new adult, while .6 is the norm. He says for the past two years, four million new units were built, while there were only two million new families.”
“Thornberg also cautions investors from listening too closely to Wall Street. ‘They. Don’t. Care.’ He says Wall Street works solely for December 31st and the bonus that comes with the end of the year.”
“So, when do things get better. Ever? ‘The good news about the recession is they do eventually end,’ he says.”
“Regionally, though, it will be tougher in some spots. When an audience member asked whether to sell a couple of condos in Florida or wait it out, Thornberg said, ‘Sell. Now.’”
I’ll take Thornberg over Shiller any day. My thanks to those who support this blog. Please check back this weekend.
Thornberg will be in Bakersfield next week at a conference. If I go, I will try and talk to him, unless his bodyguards push me away.
Thornberg might knows who you are if you mention your blog!
I wonder if the difference in presentation (between S & T) is just location. CT is possibly not so busting-in-your-face as CA.
Good point - I think it’s valid.
Though in a way, actually, people from the East Coast (New Yawkers, those from Philly or Bahstin) are more in your face than out here (in the land of the wimps).
I suppose on personal financial matters, or in the academic world that is Yale University, it’s altogether different.
Crispy -
Give Thornberg a big “hello” from the HBB!!
Christopher Thornberg has been the only honest authority on this whole mess for years. He is the only economist who is worth his weight in gold!
Dean Baker and several other economists were warning about the housing bubble several years ago, but I do give Thornberg a lot of credit for being right.
I’ll take grams over (fill in the blank) anyday -
Taking a trip to Pittsburgh - Grams needs help.
Best to All,
Leigh
Happy Friday, Ben. Take this time to eat some M&Ms as a reward for a week well done.
“The threat of so-called ‘mortgage walkers,’
Oh yeah, that sounds scary. I’m scared of that threat.
This way folks, keys in the basket, and here is your new rental lease agreement. What no fico? No rental.
I am waiting for a website to start-up that lets one FB pass on their info to the next FB as far as where their vacant home is setting.
Sort of a bartering website. I left my home at 123 Main St and looking for a 3 bed/2 bath close by.
They move into the other FBers home and set up a household as though they bought the home. They mow the lawn, hook up utilities and wait until the free rent runs out. Of course they will all give each other fake leases, so they can act dumb when the sheriff actually shows up.
Vacation home in Florida anyone? I know a guy who can hook you up cheap. (Well not really, but I wouldn’t be surprised if this isn’t the next scam. And if the new neighbors take care of the home, who would say much?)
Sort of like a time share.
Giving some furthur thought to this idea …
It would benifit the lender to have someone move in and take care of the lawns and all, especially if the lender owned other properties on the same street. It would help keep the neighborhood from going to hell.
Plus it would keep looters from stripping the house of copper wiring and plumbing.
‘I’m retired,’
You’re only 62, get a damn job and an apartment you can afford.
Retirement is oh so quaint. You’re 62, if you’re healthy, you have another 30 years of living, a third of your life! People used to retire at 55 because they’d keel over the next year. Thanks to Wonder Bread enriched with 9 essential vitamins, we have Long Life.
Thornberg RULES! I’m so glad he decided to leave those dip$hits at UCLA Anderson. The fact that an audience member asked him if he should “wait it out” on his FL condos just goes to show you how much further this thing has to go. I guess hope really does spring eternal? I don’t know how Thornberg managed to avoid laughing in the guy’s face.
So you think he was being facetious when he said “Sell. Now.” I mean, whats the chances of anyone selling in FL anyway?
I’d say the chances are slim to none, and slim just left the building.
“I mean, whats the chances of anyone selling in FL anyway?”
Thats just it, we have reached the point where its a dead market .People are not even buying 40% price cuts from peak . The fact that a extra 2 million homes or more exist out there that there is no demand for has a huge bearing on the dead market .
The over-supply of homes is creating a situation that knife-catchers aren’t even buying anymore . The cat is out of the bag and people are afraid to buy . Employers are afraid to hire also . This is what happens during a recession . I bet even the vulture funds are waiting for 75% off now ,or maybe 1995 prices . Also, why would people buy if they are concerned about their jobs or inflation ?
Man this meltdown is gaining speed now and it’s getting brutal .
Not to worry. Slim is back in the building.
Without an immediate 10% reduction in price? None.
Sales in Florida are slow, but they are not Zero. A motivated seller can move a condo if he owns it outright.
There is a market-clearing price at which it WILL sell now; it’s just a matter of discovering that price. I’ll bid one dollar for them. Both of them.
In a tight money dead market that has over-supply ,the price ends up going below what a normal market would bear IMHO . Can you imagine how all the homeowners are looking at the prices crashing and know they can’t even sell in this environment (without a total loss of course ).
Inability to get financing will cause house prices to fall even more, even in pricier neighborhoods.
In Southwest Florida, pending home sales jumped noticeably from Jan. to Feb. It went from about 150 to 750. Some people are excited by this…others are more cautious.
In Cape Coral, 191 sales were closed in Feb. as opposed to 144 in Jan. I’m guessing a significant number of pending sales don’t actually close.
Suzanne Buchanan, president of Seattle-based SK Builders, recently built two Craftsman-style homes in the Rainier Beach area. The four-bedroom homes have been on the market for about seven months. Both appraised for $840,000 and $860,000 respectively, but their listing prices since dropped to $739,000 and $759,000.”
Right now a appraisal of a home is as good as a 50% off sale at Macys on a 300% markup…
Those houses are worth double that. Suzanne researched it.
Give it back to the bank. They will sell it for whats it worth, after 6 months of holding them in thier portfolio
“oh, my precious”
“Nobody wants to wait. We have a sense of entitlement. Gimme mine now. Why shouldn’t I have a house? Why shouldn’t I have a bigger one? Why shouldn’t I buy and flip like my friend the next town over? Look at the TV. Everyone’s getting rich but me!”
Spot on. This sums up the general mindset of Americans, and it will end badly for a lot of folks.
My first house was a little place I got for 21k back in 1990. I loved living there, but some acquaintances made fun of me because my house was so small. It was like a little doll house, but it was perfect. Like a 1 bd aprt with fenced yard and garage. It kinda hurt my feelings, then I found out they lived in the rattiest trailer park, out by the airport. Their attitude was, if THEY were buying a house they would NEVER settle for a little place like mine. They’re probably still at the trailer park, or hey maybe they got a 80/20 loan.
I’ve noticed a lot of people who don’t have a pot to piss in talk are real particular about what they’d buy if they had money. Yeah, why settle for less than the best? lol
you should see internet-raised kids and their standards for female beauty. Especially nudes. They have spent so much time looking at airbrushed pretties or their favorite top 1% of the population - that areal girl doesn’t even turn them on. Their entire world is fantasy.
//Ref: see fark.com
Couldn’t agree more!
“”At the end of the day, these efforts will be insufficient,” Zandi said. “Policy makers will need to be more aggressive and put taxpayer money on the line to stem this.” ”
great….
This taxpayer is already tapped out. Where does Zandi think the money is going to come from ? If this crap keep being suggested people are going to stop paying taxes let alone pay their mortgages.
Yes, let’s all listen to Marc Zandi. Those Moody’s ratings worked out really well for everyone.
LOL!
That’s the most entertaining comment here in weeks!
Maybe longer.
Or, maybe the government can just ALLOW THE MARKET TO CORRECT ITSELF. What is this Zandi guy’s prob?
I ain’t no bank. Repossess the WSJ bonuses and capital gains for house flippers on house sales made in the past 5 years. Shake ‘em down.
“…it’s become more important to make sure your house is appealing, especially with a deep supply of homes on the market…”
Have they tried a Koi pond yet?
Screw Koi pond, they need to hire a baker to come over and make cupcakes. And if they are having trouble getting people to come inside, maybe they can rent a big inflatable cupcake and put it in the front lawn, so that people know there are cupcakes inside. I don’t know what is so danged difficult for these people to understand. It is all about the cupcakes!
I thought that they were supposed to bake cupcakes. Now they have to actually fix up the outside, too? Oh, the humanity.
No, you two. Staging is the ticket.
Don’t forget a vase of fresh flowers on the counter…this was an actual suggestion on the HGTV board GET IT SOLD..yah, um honey? These flowers are so pretty, lets just buy this house ok?
In other words, this Marlow person doesn’t have the foggiest idea of what salesmanship is all about..
Hire paid actors to act like a family living in the place. Plenty of unemployed Realtors to fill the rolls.
Better yet, hire actors to come to your open house and act extremely excited / ask obvious stupid questions that make the place look good. “Oh Honey, this place has Granite counter tops for the same price as that other house over on Elm!”
‘I’ve had buyers recently drive up to a place and not even want to get out,’ said Marlow Harris, a Seattle real-estate agent.”
This must explain the “I’m Gorgeous Inside !” signs I see on houses around here where they’ve never bothered to mow the lawn or take care of the yard.
Exactly. “I’m gorgeous on the inside” = “we’re not going to lie about it, it’s ugly as hell from the street.”
How funny. A house for sale in my neighborhood has one of those signs. It’s staring to peel. Been baking in the sun for 6 months…
“Medina said he hasn’t made a payment for six months and has been denied twice for a loan modification due to financial hardship. ‘The house is the only thing I have,’ Medina said. ‘For me, the American Dream is gone.’”
Why do people in such dire straits because of debt insist on trying to get more debt? Is this guys seriously trying to take equity out of the home to pay the mortgage? How stupid is that?
Song to a Lender from an FB:
Accompaniment
Ran out my time,
Used up my line,
Tryin’ to decide what to do.
Looks like I’m fscked,
I wanna get off,
Got myself hung up by you.
Seems to me,
You don’t want to talk about it.
Seems to me,
I’ll just turn this on its head and
Walk Away
Houses I’ve known,
Money you’re loanin’,
Puttin’ myself in the thumbscrew.
I got myself in
The worst mess I’ve been
And I find myself cryin’ bailout spew.
Seems to me,
We stalled too long, and missed the warning.
Seems to me,
You ignore just what was said and
Make me pay…
(solo)
seems to me,
you don’t wanna talk about it.
Seems to me
You just cannot talk about it.
Seems to me,
I’ll just turn this on its head and
Walk Away.
I’ve got to cool myself down,
Stompin’ around,
Thinking some words I can’t name ya.
Meet you halfway,
Got nothin’ to say,
Still I don’t ’spose I can blame ya.
Seems to me,
You don’t wanna talk about it.
Seems to me,
I’ll just turn this its head and
Walk away.
Walk Away.
(sorry, Joe)
Oh, and Welcome to the new FBs:
Video
Standin’ in the driveway
Goin’ down the drain
There goes everything you own
You called the bank collect
And they didn’t know your name
Starin’ at the telephone
You thought he was a broker
Now he says he’s not
But the notices seem bad for sure
And according to the sheriff
This is all you got
A ticket to the house of poor
Didn’t know the ARM rate
You start to feel the rub
You know this is the reset
Well, welcome to the club
…
Well, you thought they’d take it lightly
They’re actin’ kinda rash
Caught you in the credit zone
So they smile real politely
Relieved you of your cash
Suddenly you’re all alone
You blame the lyin’ agent
You bug the b@stard’s phone
You got the place surrounded
There ain’t nobody home
It’s gettin’ hard to please ‘em
You start to feel the rub
You know it isn’t easy
Well, welcome to the club
Come on and join us in the club.
‘Too bad we didn’t put it on two years ago, but it’s on now and we’ll wait it out.’
– Good luck with that!
Thornberg: “we will see a 35 percent decline in home values from the peak, and a third of that has already occurred.”
NAR: It’s a GREAT Time to buy !!! Really ! A house is an investment ! No ? PRIDE of Receivership ! Uh ,We Mean Ownership ! Buy Now or be priced out………ah screw it.
If this is the way the majority of Americans build weath, well bunches of them are really, really screwed!
having a house doesnt define my life. it’s a PART of my life, but it’s by no stretch my greatest goal. same thing with cars.
people who think that “things” are what makes them worthy will forever be chasing the next biggest & shiniest object in a neverending quest for materialism. a movie called ” Regarding Henry” shows just how nonsensical it all is. especially relevent after reading a few builder comments about how ‘ they are going to create a sense of urgency ‘ to sell their wares. I mean, fer chrissake, wake up people ! the wolves are bragging about their gameplan in advance but yet sheople will still follow whatever is told of them, just because its in a shiny brochure, or on TV.
and thats exactly what the ptb want. they want the masses to forever chase the shiny car rims, the bigger houses where govt can fee/tax you to death because you cant move a house & yer obligated fer 30 years to support said government/schools/utilities. committing to home ownership is the biggest ” gotcha ” in modern history. THATS why the govt looked the other way during this whole mess, and in fact encouraged it, was because, like a drug dealers relatives, they stood to profit.
How can this be, we’re a Christian nation, we don’t pray to the Golden Calf. Homeownership, the opiate of the masses.
I always thought the moral of the movie “Regarding Henry” was the only way to turn a lawyer into a nice guy was to shoot him in the head. My bad.
“Juan Medina has no equity on his house and an adjustable-rate mortgage where the interest-only payment has gone up to $5,500 a month. ‘I’m retired,’ Medina said. ‘I tried at least 20 different lenders, and there’s no equity in the home.’”
It doesn’t make a whole lot of sense to give a mortgage to a retired person, does it?
Another bad loan was made . If you give a loan to a retired person based on the fixed income they have ,( and that means you shouldn’t give a adjustable to a retired fixed income person ) than a loan would be alright . Here we get back to loans got to be underwritten .
In fact , part of the principle of the adjustable loan originally was that as incomes went up ,so would the adjustable rate ,so the banks wouldn’t get clobbered by inflation . Somehow these adjustable loans because the instrument of choice for a short term investment in the real estate appreciation game .
“The U.S. is spending more than its income. People cannot afford their mortgage debts and are walking away from their houses,” he added. “RGE Monitor
Very straight forward yet all the bailout plans that are floating about never seem to catch on to this simple fact, people can’t afford their debts, mortgage, auto, CC the whole pile.
\
KB Homes was announcing that they are pulling out of Albuquerque and New Mexico. They also said 4 other states. They want to concentrate on more profitable areas, like California, Florida, and Arizona. I didn’t know whether to laugh really hard, or cry. HaHa. This market, weak as it is, is far better than those falling places.
“pulling out” is not an acceptable form of Building Control.
On March 7, 2008, Hume Bank, Hume, MO was closed by the Missouri Division of Finance and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
http://www.fdic.gov/bank/individual/failed/Hume.html
33 known depositors over FDIC limits, dont let family and friends get caught in the storm.
thats 3 from August Aught Seven
The “Failed Bank List” at the FDIC is interesting. There have been many more than I would have thought over the past few years.
http://www.fdic.gov/bank/individual/failed/banklist.html
Can anyone explain to me why Sept 30th is apparently such an overwhelmingly common date to shut down a bank? After that, the 2nd most common shutdown date is March 17th/18th.
Explanations? Anyone?
I would love to see a dated series of quotes from Anderson which highlight how grossly dead wrong they have been. With this low of a batting average, why do people quote them (the guy behind the counter at 7-eleven could come up with a more accurate forecast [no disrespect to 7-eleven, I just mean a person not trained to make such calls])
For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built
This is very important. It’s another symptom of the credit society we have built. We have negative savings and negative equity. How long can we continue?
As Nouriel Roubini & Mish have said for a long time, it’s not a liquidity problem, it’s an insolvency problem. Many American homedebtors are insolvent.
These homeowners aren’t upside down, meaning the amount of equity is overwhelmed by their debt. Instead these homeowners simply have more debt than they have equity.
Not a good thing, but not dire circumstances. The homeowners are debt burdened but are not insolvent.
(Not yet at least.)
For example:
A house might be priced at $500G, have a $300G
mortgage, which would leave $200G in equity.
The mortgage ($300G) exceeds the equity ($200G), but the owner is far from being insolvent.
“Evidence of the housing slowdown shows up in all kinds of places. Just ask Oregon commercial broker Jordan Samiee. Samiee needed an administrative assistant and got 83 applications for the position that pays $36,000 a year.”
No, this is evidence that the salary being offered is too high.
I agree thats a pretty high salary for that position should be 15-25k
IMHO.
I wonder to myself, how many of these “admin assistants” have MBA’s and BA’s?
test
How is someone supposed to buy a $500K starter home on a paltry $36K per year? Oh wait, that is why that house is going back toward $100K.
‘People better qualified than me coming to work for me,’ Samiee said. ‘They’re just not making any money right now. They want a steady income.’”
Ha…I think this guy underestimates himself, my ass is better qualified than a realtor or mortgage broker!
Now they are talking on CNBC about how the Insurance Companies have made record profits by putting exclusions in their policies as well as by trying to deny the policy holders their proper entitlements on a claim to see if they can get away with it . They had a policy holder on the program that loss a home in a fire and she had to fight to get what the policy really entitled her to .
They also said in essence that the excess profit that the insurance companies have been making have benefited the stock holders .
Think about how much money the insurance companies have been making in charging policy rates based on inflated RE values .
Is anybody getting the feeling that the last 10 years have been the heyday of the Corporations and the pleasing of the stock holders at the expense of America . When I think of the billions that insurance companies collect ,and than they try to cheat the claimant out of a rightful claim ,I wonder how these Corporations think anymore .
The Corporations are saying in essence that they can’t increase wages , they can’t increase benefits for employees ,they can’t pay higher taxes ,they can’t give jobs to Americans and need to out-source, they can’t pay rightful claims to policyholders and on and on . Does anybody get the feeling that the Corporations have been pulling a fast one and this will erode away at the American middle class . The balance scales have gone in the opposite direction from the days in which the Corporations were forced to share with the employee .
I just about throw a rock at the TV every time I hear a talking head from the Corporate world say that Americans have to compete with labor from foreign slave labor countries. My first question would be ,”Why do I have to compete with people from countries that don’t have the same circumstances ,tax structure ,cost of living ,etc. that I have in my home land ?” Think about who is selling us this BS but none other than the Corporations and big business .
And here now ,everything I see is the government trying to help out the Corporation Lending Giants and Investment firms avoid their loss on their bogus lending practice. Watching the Congress people for most part kiss the ass of the CEO’s of Lending like Mozilo today was enough to make me puke . it was interesting that a few Black Congressmen and women were the only people that asked some good questions about Mozilo’s lending practice and his compensation package .
My first question would be ,”Why do I have to compete with people from countries that don’t have the same circumstances ,tax structure ,cost of living ,etc. that I have in my home land ?”
Your question makes no sense to me.
These people who do NOT have your taxes and standard of living are competing with you - regardless if you like it or not.
“Does anybody get the feeling that the Corporations have been pulling a fast one and this will erode away at the American middle class .”
Yes.
I think this has lasted as long as at has because of the promise that the regular guy or gal could win at this game, too (through stock market investing, house flipping).
Easy lending, and a greater tolerance for debt has covered the widening gap, as well.
We have become a society addicted to gambling. The most amazing revelation in “Irrational Exuberance” was how much money the average American spends on gambling each year (it’s bad in Canada, too).
A society which embraces gambling has given up a belief in a level playing field, in fair wages and in productive work. It’s really working out well for us, isn’t it?
What is going to replace housing related income for jobs would be a good topic (or did we cover that years ago )?
What we need is flower power (just kidding ) . God at least during my working years there was always usually jobs available .
“Medina said he hasn’t made a payment for six months and has been denied twice for a loan modification due to financial hardship. ‘The house is the only thing I have,’ Medina said. ‘For me, the American Dream is gone.’”
What an idiot. The house, a depreciating asset requiring insurance and taxes in order to keep it, and mortgaged to the last penny, is something, but his pension, which is guaranteed income for life, is nothing?
Friends of ours just moved to LA - $1600 for a 1 bdrm apt. Crazy, ridiculous prices! When I moved here I paid $950 for a 1 bdrm and that was considered really high 5 years ago. I think landlords think the housing bubble is still accelerating in LA.
To respond to Housing Wizard - I am a reject of corporate america, the guys at the top take it all and the workers are left with little. I worked at a company with over $4 billion in profits yet I got laid off 5 months ago. America is in for a hell of a recession. My dad moved to America 40 years ago and said to me, “Americans have always found a way out. I can’t imagine how we’re going to find our way out of this.”
Every day on my way to work I pass a little old building which has engraved in stone over the doorway: Unlimited Growth Increases the Divide.
I didn’t understand what it meant at first. And now it’s an idea I spin around in my head a lot.
By the way, that building was under heavy bidding by many of our local developers (it’s in an area undergoing heavy, rapid gentrification). The owner refused to sell it, although he could have made a fortune, and then made the engraving. It’s a political statment in the form of real estate.
“The Year of the Walkaway”
…was preceded by the “Year of the Reacharound”, at least between FBs and lenders…