Bits Bucket And Craigslist Finds For March 29, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Radian Guaranty: List of Declining Markets
as of March 15, 2008
Due to the depreciation of real estate values in localized markets, and in accordance with prudent underwriting
standards, Radian Guaranty will reduce the maximum LTV in certain markets, effective with MI applications
received on or after February 1, 2008. Please see Radian’s Underwriting Guidelines for details.
138 pages in all
http://www.radian.biz/pdf/Radian%20Declining%20MSAs.pdf
Maybe this could be forwarded to the president-elect of the NAR who thinks 60 percent of major markets are still appreciating.
I also see a whole bunch of places on this list in “flyover” country, places that supposedly didn’t go up so they wouldn’t go down. Seems like they’re falling too (cue Gomer Pyle).
Why would you waste your time trying to “inform” the NAR with facts?
They were never interested in the facts or people’s well-being or putting people in affordable housing.
They have one sole interest: Skimming commissions off housing transactions. To that end, they want to d anything to stimulate demand. I am sure many of you know situations where Realtors(tm) encouraged families to make very unwise purchasing decisions to generate a sale…..Buy Now, the price will only go up.
If you buy now, you can sell later at a huge profit or just “refinance”.
The Realtor group aided and abetted the BUBBLE, and now they just want to get the sales going again.
It can’t happen without the easy money. The FED is trying to help with more easy money to prolong the game. Even Bush (our ownership president) is getting in on the mortgage rescue bandwagon.
The TRUTH is irrelevant to merchants of deceit, except as something they need to provide some rationale against…..”the markets are already recovering”. Ya think????
Well said, Brother Diogenes.
thank you for postng.
You are well spoken, and a word-smith
The NAR is the third largest donor in American Politics since 1989:
http://www.opensecrets.org/orgs/index.asp
It doesn’t bode well for the republic. Sinking so much money into housing seems to me to be a drastic misallocation of funds. It starves money from so many other pursuits - computing, medicine, automotive, alternative energy sources, etc, etc - and directs it to lenders, the NAR, and builders.
I’d like to see a national debate about why the national policy should be to try and put a floor below home prices, and keep funnelling so much national wealth to housing and the related industries. Versus sending wealth to a myriad other areas which could make life better in other ways.
Lots of Syracuse area zips on that list. Also my New England home town that seemed to be hanging onto obnoxious overpricing for dear life looks like its finally headed for some depreciation too.
Hmm…
Not a single Massachusetts location is on here..
Does that mean it’s different here or does Radian, maybe not offer MI in MA?
I find it hard to believe that MA doesn’t have a single declining zip-code.
Yeah. I didn’t see any outlying rural areas on there either. Nor Maine.
MA sucks. High taxes and growing illegal problem.
I wonder if the high taxes didn’t cause the growing illegal problem. I figure the only way any JSP can afford to live in MA is “under the table”
The corrupt Bolsheviks who control Taxasachusetts perpetuate their hold on power by pandering to the social parasites who benefit from their graft and largesse. Illegals are adept at milking social services while doing the actual physical labor that is beneath the dignity of most liberals and that the mafia-like labor unions there would charge exorbidant prices for. No wonder the state is a magnet for illegals.
Magnet for illegals? What illegals? The Irish? When I was growing up the #1 illegal population in Boston was the Irish.
Has that changed?
White people don’t count as illegals, Not A Gator — everybody knows that.
And you’re from Chicago?? check out the Russians, Poles, Albanians, Romanians, Ukrainians, Israelis, et.al., all here on long expired tourist visas. The Irish left a few years ago, the ones still here can’t afford to go back. Though, now that the Celtic Tiger is limping, they may be back.
That was Sarcasm For Xenophobes, spike66.
I know some illegal (or gray area) Europeans here, in fact.
Sorry, ET,
I always look for your posts and I missed the sarcasm totally.
My bad.
Sweet, even San Francisco and Silicon Valley are in that list, even though everyone here assures me that house prices are not dropping, except in a few “undesirable” ZIPs.
All real estate is local, don’t you know?
Treasury Dept. Plan Would Give Fed Wide New Power
http://tinyurl.com/2lwme4
According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.
The Treasury plan would let Fed officials examine the practices and even the internal bookkeeping of brokerage firms, hedge funds, commodity-trading exchanges and any other institution that might pose a risk to the overall financial system.
Kind of like reorganizing FEMA after Katrina - the damage is alreay done. With all the money the Wall Street crowd gives to the confressional crowd, I don’t think any new regulations will be strong enough to keep them from producing the next bubble scheme. New regulations produce new loopholes.
Abolish the Fed, that would be a major step forward.
A basic principle of governance is that in order to change something, you have to put forward a better alternative. What are you proposing to put in place of the Fed? Financial anarchy, perhaps? A return to barter?
“The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system…..”
Buy everything nothing is allowed to go down~!
“nothing”
Even Uncle Buck?
We had decentralized banking on a gold coin standard. The gold keeps the money supply fixed and is not able to be manipulated like the Fed monopoly. The idea that central planning is necessary for ANYTHING on a society level is the propaganda of big government. Central planning and fiat money prevents economic freedom because the central planner can always make decisions biased toward their pals and other citizens of no alternative and are trapped by the “dollar”.
“gold keeps the money supply fixed”
Where do you get this nonsense?
relatively fixed and all increases to the money supply are the result of hard work to extract the gold. Compared to flipping a bit in a computer to generate 200 billion dollars on demand, gold has a fixed supply. Remember that a certain amount of gold is lost or consumed each year too.
Sometimes doing nothing is the better alternative.
First do no harm.
PB, thought you would know better after reading here quite a bit. But seems like your tone is a bit on the ironic side.
In place of the Federal Reserve, we could have a law that stipulates 100% reserves for regular deposits, and we could get rid of the law that forces all of us to accept one currency.
You know, in place of 100% state control over the money supply, we could have a 100% free market in money. I view 100% reserves as a requirement for a free market because any form of fractional reserves causes both loss in purchasing power, ie indirect stealing through inflation of the money supply, and malinvestment in the economy due to economic cycles.
A gold standard only keeps the money supply fixed when it is based on 100% reserves or where there exists no state intervention in the market for money.
You might want to read The Case Against The Fed by Rothbard, _or_ Money, Bank Credit, and Economic Cycles by Jesus de Soto - both available as free downloads at Mises dot org.
Here’s another take on what this means.
http://www.urbansurvival.com/week.htm
Augur-inn,
This expansion of Fed powers is really frightening. The Feds will now trump any state laws or regs. A further extension of the Bush doctrine of consolidating executive power, Constitution be damned.
A consolidation of power toward Wall Street banks (AKA Fed).
Government of the banks, by the banks and for the banks!
Is that a problemo?
Just where does one get one of these….”banks”?
……………it has always been thus.
That is why our constitution created a Treasury Dept. that had it’s money backed by GOLD. The illegal creation of the FED took that away, turned the Treasury over to Banker shills and got the run on inflating away our money since 1913.
But every politician that has stood against this system (Ron Paul most recently) has been marginalized by Big Media, friends of the Banksters.
Look at our current roster of “candidates”. All socialist, big government cronies. It’s a sham, and a shame.
“(AKA Fed)”
You missed something very important. It is not the Fed doing the talking on Monday…
Who cares who’s doing the talking if the end result is the same?
We have become a people who are totally dependent on government. People think more is better? The same PTB had much to do with our current situation and we want to reward them for doing so. We seem to forget the history of ever increasing government size and power.
Read a little on the economics of central bank independence and report back to us…
Propaganda is what the idea of central bank independence is. Let’s see… did we have more inflation of the money supply before or after the creation of a central bank?
Oh, that’s right, people actually were aware of sound money over a century ago, and hadn’t been blinded by the unsound economics of Keynesiasm and Monetarism yet. Let’s see - 1833-1933 = 0 overall consumer price inflation after initial depression deflation. 1933-Present = ???
How about instead of central bank independence we fought for 0 inflation of the money supply, period. 0 distortion to the economy from cheap money and malinvestments that must eventually correct, and 0 stealing by both decreasing the value of money and having it created out of thin air and ending up on bank balance sheets and in the hands of those who get to borrow money at interest rates lower than the ‘natural’ interest rate.
PB,
Read a little on how all of the “problems” that the central banks were created to prevent were the result of government action that legalized fractional reserve lending. Read also how the big banks engineered collapses of smaller banks and to scare the public into more government regulation of the banking industry written by the banks for the banks.
Our country has been fed a ton of propaganda regarding the history of banking panics in order to justify the Federal Reserve System.
“Propaganda is what the idea of central bank independence is.”
Thats not what lots of peer reviewed publications in the economics literature say. But I guess all the posters here are much smarter than any and all economists, so don’t bother trying to learn anything before posting…
Oh PB are you such an “intellectual” and believer in the system as to bequeath your Liberty for a “strong federal bank”?
“It is not the Fed doing the talking on Monday… ”
Would that be the man with the hand up his back? Our own 21st centrury Charlie McCarthy?
What a disaster the current government has messed up everything it handles - how could this be a good idea? They made homeland security and blocked help from getting to nola with fema leading the way under a horse person - so what clown will they put in charge here who probably will know nothing about money, finance, etc. Just sounds like another ploy that will give money to corporations and take it from the people. Any more corporate welfare over people welfare seems to be the organization du jour.
The Federal government didn’t block help from getting to New Orleans: the governor of Louisiana and Mayor of New Orleans did that. The Federal Government CANNOT send disaster rescue troops into states, especially beforehand, without the permission of local authorities (states’ rights still exist), and the Governor said she didn’t want Federal interference. The Mayor, who got re-elected for his incompetence, did nothing to either evacuate the city or to help those stranded after the storm. Afterward, FEMA did screw up, but the primary problem was inept and corrupt local and state government. It still is. And while I’m venting (my family is from New Orleans), what is it with thousands of New Orleans residents sitting around waiting for manna from heaven, instead of getting up and cleaning up the mess themselves? By now, the entire place should have been put back into shape,as much as possible given the fact it’s sinking, but it looks like a war zone. And Donald Trump’s brain fart to make it all good again? A vertical city made up almost entirely of highrises (a.k.a. New York City II).
The notion that the Federal Government is supposed to save people from their own stupidity (as in electing crooks and dolts to represent them), and rush to their rescue before, during, and after every disaster is not reasonable, especially when they themselves help create such disasters by living in flood zones, first building then poorly maintaining inadequate levees, and erecting houses on flat ground where the water level is too high to bury the dead underground. These are not new problems for New Orleans: They’ve been going on for hundreds of years, and New Orleans has been destroyed on more than one occasion, especially in its infancy.
I didn’t vote for Bush and don’t think much of him, but his administration didn’t cause a hurricane to hit New Orleans, jets to fly into the World Trade Center, or the housing bubble, the product of a worldwide get-rich-quick mania; blaming the government, or HIS government for everything is ridiculous. Presidents do not have the infinite powers many people, including at least one now running for office, apparently believe. Voting for Albus Percival Dumbledore, the wizard headmaster from Harry Potter, would be about as useful.
I agree with you on this however Bush should have been more in touch with what was happening on the ground. Soon as the massive incompetence of the Mayor and Governor were realized he should have effed the Governor and nationalized the guard. Also he should have known how big a disaster this could have been ahead of time left his ranch and flown to DC before the Storm and convened a show cabinet meeting. History would have been much different. The local government was deplorable however he and his staff should have known the media would hold him responsible so he should have taken charge. He really has never recovered politically from Katrina. As much as I can’t stand his brother Jeb was very good and proactive in all Hurricane issues in Florida.
With the FANATICS (i.e., Demos) in Congress that oppose Bush, he would have been impeached on the spot if he stepped on to the turf of local government.
Bush was cornered. I’m no lover of his, especially on immigration, but he never had a chance given the animals that oppose him.
Yes! Yes! You RULE, Incredulous! What a concept: people shouldn’t be protected from their own stupidity and willful failure to act wisely or exert effort on their own behalf. The corrupt, incompetent political hacks who presided over the Katrina debacle were elected to office by a parasitic and shiftless population that were looking for entitlements, not sound and honest leadership. Of course, this does NOT excuse the gross incompetence of the Bush White House or Federal Gov’t, and the gross neglect of this nation’s infrastructure in favor of short-term, election-winning blandishments and payolla.
Your humble servant, Sammy
Well as someone not as emotionally attached to either situation I can’t help but notice that what we’re talking about here is that the US gov decided it was imperative to set precedence w/o Congressional approval in the Bear Stearns case, where loss of money was the issue, but trembled in their boots when only loss of lives was the issue (re: Katrina).
Hmmmmnnn! There’s just so many places to go with that.
Again, the Federal Government cannot intervene in state matters of the New Orleans kind without invitation, which was not forthcoming. Incidentally, if Bear Stearns had collapsed, it might have taken down the entire financial world with it, and then the loss of human lives in New Orleans would have seemed miniscule by comparison (starvation anybody?). The people on this blog who eagerly await the next Great Depression–probably the same people who love disaster movies–might find the reality not to their liking. But, take heart! It could still happen, and then your dreams of sticking it to the Man would come true. Unfortunately the MAN comprises millions upon millions upon millions of ordinary people.
Sounds kinda rascist there bub….you wanna make those unfortunate ones in the 9th ward actually work for a living?
you wanted Jesse Jackson and Al Sharpton to stage a mass rally to give jobs to the locals first?
No way incredulous, we needed to import 15,000 illegals for the clean up job…
and now we let those people back in and its back to the war zone….why didn’t we give the illegals green cards so they would buy all the rehabbed housing and make NO a safe city?
PS…you know i am am a zydeco dj…click my handle
===============
And while I’m venting (my family is from New Orleans), what is it with thousands of New Orleans residents sitting around waiting for manna from heaven, instead of getting up and cleaning up the mess themselves?
“you know i am am a zydeco dj…click my handle”
No, I didn’t know. So I did. The Rosie Ledet clips made my day.
Thanks she will be back in NYC on april 20th and Cj chenier on the 13th i’ll tape some more new stuff…
“The notion that the Federal Government is supposed to save people from their own stupidity…first building then poorly maintaining inadequate levees…”
Uh, I’m pretty sure it was the army corp of engineers that built and maintained the levees, not the residents of the Lower Ninth Ward. Last time I checked, the ACOE was a Federal Agency.
While I agree with you that the Federal Government is not omnipotent, and blaming them for everything is unrealistic and counterproductive, even worse is blaming those without any resources or power for their own plight. As much as the libertarians would like to think otherwise, there are some situations where individual citizens are unable to fend for themselves and the action of the federal government is necessary. I would think that a natural disaster would obviously be one of those times. I suppose tornado victims in the midwest are at fault for choosing to live in the path of a tornado? I guess everyone should move to magic-land, where nothing bad ever happens, otherwise they themselves will be to blame for any unfortunate circumstances that may arise…
Cmon Diddley… You should jump on the grandstand and preach how horrible govt is. Any govt. No government interference I say!!! Expect nothing for your tax contributions. Nothing!
I suppose tornado victims in the midwest are at fault for choosing to live in the path of a tornado?
Sure, it’s part of life. Bad things happen; storms, tornados, hurricanes, earthquakes, etc. Humanity has been living with such things for millions of years.
Isn’t it funny how the gov’t makes such things worse, not better? Before the gov’t built the magical “levy” that would keep all the bad stuff away, nobody lived in places like where the now “ninth ward” is at. New Orleans was smaller and mostly limited to the higher grounds.
I’m sure if we just elect exeter he could figure it all out. His version of “I’m from the gov’t and I’m here to help” will be a lot better than the other crappy versions that keep failing time and again. We’re just one election away from paradise where nobody ever has anything bad happen and everything is going to be ok. It really will be ok this time. Just a little more money and all will be well.
I saw a story on television I think it was in the last year and I think it was on 20/20 or one of those types of network programs. It was about how a certain ethnic group/community in N.O. (I think it was perhaps vietnamese) had worked in their community to rebuild and had pretty much had things rebuilt and back in order (or at least had made large headway). These are people who are mostly first or second generation Americans, so they haven’t been spoiled by the land of entitlements yet.
Of course, many other sections of the town are still as they were the day after the storm. I guess those people just can’t do it on their own.
Yes, the idiot army engineers are responsible for building and re-building lousy, idiotic structures (they’re still at it), not to mention digging a preposterous bay that allowed a virtual tidal wave in, at the BEHEST OF LOCAL POLITICIANS funded by developers, and elected by gullible citizens. As I said, these problems have existed for a very long time, and the locals, who have a levee board to oversee such things, were responsible for not overseeing the idiots in charge.
The poor people who couldn’t leave, and the caring people who might have been able to save themselves, but stayed to be with their pets (who were not allowed in many shelters), were not the problem. I did not fault them in my post. But, the slobs and do-nothings who ran the city should be run out of Dodge on an untethered barge in the middle of a tropical storm. How can the Federal Government save people who are too stupid and selfish to do their own jobs?
Bush’s lackluster response, with photo-op angles all over it, was hardly surprising. Maybe if they’d dangled a bottle of hootch in front of him, he would have perked up. And I agree, his brother was much more efficient in Florida. But, we’re not dealing with a family of moral giants here; we talking about the Bushes, who brag about being related to Queen Elizabeth.
The citizens of New Orleans are responsible for New Orleans, and as far as I can tell, many have failed in their obligations. To re-elect an egomaniacal boob admittedly on skin-color, not performance, is so stupid, the people have no grounds for complaining about Bush or any other outside factor. They are their own worst enemies.
“A society cannot be both ignorant and free” - Thomas Jefferson.
People will get the politicians and society they choose.
Who or what is the FED……………watch this Video
http://video.google.com/videoplay?docid=-515319560256183936
Truly a great watch. Worth the 3 hours. I have seen it before and it is eye opening.
How stupid do these folks think the public is? Strike that.
Really now, how many new laws do we need enacted before folks will realize that the ones we do have on the books aren’t being enforced?
They want to compound the problem by giving the FED more power? This country is lost.
“While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation.
The plan would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings.
The plan would give the Fed some authority over Wall Street firms, but only when an investment bank’s practices threatened the entire financial system.”
It is OK to be too-big-to-fail, but if it appears failure is imminent, the Fed will send in their SWAT team to clean up the mess. Hummmm…
“the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms” = PPT consolidation?
I believe the UK went down a similar path a few years ago. I also believe their real estate bubble is much worse than ours as a likely consequence…
“Treasury Dept. Plan Would Give Fed Wide New Power”
Bend the knee demands the master!
Sorry to get back to the handwringing thingee, but does anyone else see the chance of a full-blown buyout of the housing sector by the U.S. govt in the works here? (Buy a home now or get priced out forever…)
1.7 million homes, average price of $200,000. Eminent Domain purchase price of $100,000 (my cynical guestimate) = $170,000,000,000. That is $170 billion. Prescription medicine socialist GWB benefit cost estimate in 2006: $560 billion. I would say that it’s possible.
Then 1.7 million houses bulldozed to protect the high cost of the remaining homes. Okay now what? Prices still high. No more easy loans. So no sales. No sales means prices of remaining houses must still come down. Yeah, even though “Poof!” supply is much lower. Why? Because the 1.7 million houses are empty anyway. Rents are still cheaper.
you call it socialist, I call it a massive market-distorting handout to Big Pharma that maintains their obscene profit margins.
The $560B is the usual over-10-year thing.
Bullseye Troy. See how the ideologues twist the facts?
Handwringer’s clarification: I don’t mean to suggest that any such measure would work as planned, or that it would even reach the implementation stage, given present underlying economic realities; only that I see evidence of growing political will to go down a still-more extreme path of govt intervention than has already been attempted.
If so, would they buy my SUV also?
No, personally I do not see it, at least in a substantial way. I do see the gov’t doing the minimum to keep the banking system from complete failure. A controlled descent might be possible, and they’ll make a miserable mess of trying.
Sorry to get back to the handwringing thingee, but does anyone else see the chance of a full-blown buyout of the housing sector by the U.S. govt in the works here?
No. Unless you know of a few untapped trillions that happen to be lying around.
“Unless you know of a few untapped trillions that happen to be lying around.”
Wave the magic Fed wand. Those *yet-to-be-printed* trillions could be our ticket out of this debacle–NOT.
Clearly we are talking about *yet-to-be-printed* monies here…
Unless they can bring back double-digit annual appreciation, no one in his right mind will pay twice as much (or more) to own instead of renting the equivalent property. So they can dick around all they like trying to keep people in their houses - and I lament that my tax dollars will be squandered in this way - but nothing they do will prop up prices.
Nothing, including Uncle Sam, can head off the Perfect Storm hitting the housing market. The politicos will make sympathetic noises and put forward band-aid fixes, but aside from trying to bail out their previous and future Wall Street employers, they won’t do squat for the vast majority of FBs - they have neither the will nor the means.
‘- they have neither the will nor the means.’
They might have the will, as this mess is getting bigger and uglier fast and faster, and not every single politician is a corrupt bag filled with fake smiles, hairspray, lies and evil. Hmmm…well, anyway, even if they ARE, more and more FB’s are going to be wailing and loudly demanding that the govmint heal their pain. Things are just beginning to get bad, and it’s going to get SOOOOOO much more hurty.
but I agree with you–they have no means. There’s not enough money or fast words to fix this.
Remind me again where Paulson used to work?
Robert Rubin, too.
But ,the fact remains that the powers are changing the rules and laws to fit in with their hair-brain plans of assisting the gamblers .
How can you bail out firms that aren’t under the regulation of the Feds., so now they are going to make these investment firms part of the entitlement group .
Also, how can you regulate something after the fact when the damage has already been done ? A lot of Wall Street firms are holding a lot of bad paper that they can’t sell right now . IMHO ,new rules and laws are for the purpose of bail-out options ,if needed .
What is killing me is I don’t see proof of the need of the Feds actions ,or I don’t see any proof of what would of happened had they not acted .
Good point Ed. Which thief is running Cerberus? Ooops…. John Snow(job).
Where is the Bottom in Housing?
Bottom Line? There is no Bottom in Sight
A lot of good graphs and stats in this article.
http://frontlinethoughts.com/article.asp?id=mwo032808
Hopefully it’s a dead cat bounce with the next round of knife catchers stepping in. Few people can afford current prices and zero down mortgates are probably history.
“Bottom line? We are nowhere near the bottom in the home markets.”
Good to see some opinions backed by real due diligence are out there to counter the MSM blather.
Actually, this blog has always had the “opinions backed by real due diligence” thing going on. That’s why we see so few trolls doing their thing here. It’s instant troll suicide to post here. Kinda a bummer, really. Nothing is more enjoyable than slicing and dicing a troll……..okay, maybe a well placed JT is more enjoyable.
“Nothing is more enjoyable than slicing and dicing a troll…”
Not sure how much troll filtering Ben does, but I suspect he filters quite a bit…
I don’t think so. Correct me if I’m wrong Ben, but every since I’ve been here it’s been a “bring it on” attitude. I hope you aren’t filtering, Ben. Actually, I think the only filtering going on has been on my posts. All of you may be surprised to hear this, but sometimes I’m a little over-the-top.
Back in the day, trolls clogged many a thread by making incendiary remarks which were met with a few troll alert warnings and many equally incendiary responses.
Back in 2005/2006, when there were a lot more NAR Kool-Aid True Believers, the occasional hapless troll would either stumble in here or, in a catastrophic miscalculation, move from lurking to ill-advised attempts at planting NAR-inspired Happy Talk. The attempts were always pretty short-lived - think of some prehistoric dim-witted herbivore venturing into a den of ravenous sabre-tooth tigers and you get the picture.
Also some of us (TxChick is one who comes to mind) used to go “wilding” in the Flipper sites like SDCIA, rampaging through their la-la land, turning their sacred cows into hamburger. Sometimes a few enraged Bubble Believers would make the mistake of following us back to this site (I’d helpfully leave links) where the pit-bull dogpile on them left them a whimpering, bloody bundle of neurosis before fleeing back to Bubble-Land. We took a lot of scalps, but no prisoners.
Ah, the good old days!
Comment by jetson_boy
2008-03-28 15:57:13
I recall a few years ago mowing the lawn of the house I rent. A chinese guy walked by, asked if I owned it ( for reasons I have no idea why) at which point I told him no, I rented. How much did I pay?-he asked. $1,500 for the whole house. He asked me why I didn’t consider buying. I told him because it was too expensive here and that sooner or later, the bubble was going to pop. He told me point-blank that ” real estate never goes down.”
I sorta wish he’d walk by now. It’d be interesting to see what he thinks now.
My comments: Now I see why you aren’t in a hurry to flee to Tennessee. How much does that FB want for the house you are renting? I am gonna guess $499k for that 3/1 shack. That thing is worth maybe $150k and the rents will drop to around $1100.
This guy appears to be delusional.He needs to talk with the thousands of homeowners faceing foreclosure because they can’t refinance and got in over thier heads.Has he ever heard of florida?
It’s become a cliche. Just try telling these up-scale, “well-educated professional” types anything. They are the most indoctrinated and credulous–yet the most clueless–when it comes to real estate.
Report: Mortgage crisis yet to peak in New York
http://tinyurl.com/yura2p
The group warned that ultimately 125,000 homes in the state could end up in foreclosure over the next year, causing property values to drop by an average of $18,000 in the state. The group wants the state government to intervene.
“The impact on individual homeowners will be devastating,” said Michael Hanley, a senior housing law attorney with the Empire Justice Center, a statewide legal services and anti-poverty advocacy organization.
The group’s report showed that the housing woes are expected to increase not only in places where property values have skyrocketed in recent years, but also in other parts of the state, such as Rochester, where prices have been steady. The report looked at five areas: Rochester, Buffalo, the Albany area, the Hudson Valley and Long Island.
Long Island has been hardest hit so far, with nearly 13,000 foreclosures or homes with mortgage payments more than 30 days overdue.
The “it’s different here” crowd will now have to come up with some other kind of spin.
home prices have not come down much at all here
i am really fed up with the it is different here crap
i hope these mcmillionaires crash and burn hard
yes i have entered the anger stage
long island? lmao a surbaban nightmare
It’s one reason I choose Pennsylvania over New York.
Move already!
Pennsylvania’s not even a bargain now anyway.
The places in PA where people actually like to live, at least.
I don’t buy the hype of “everyone wants to live there” you gotta live in locations where the herd mentality shys away from in order to get a fairly priced house.
OK Bye.
Oil City is all that and a bag of chips.
Make sure and send us a postcard when you finally get there, living the high life.
“you gotta live in locations where the herd mentality shys away from”
You don’t get that picking up herd droppings. Oil City is mainstream, it’s just hasbeen mainstream. You want to live mainstream without the meansstream or the needsstream. Single, mobile, why you want to carry a house on your back escapes me entirely. See what Thoreau says about it.
Yeah, no kidding, Oil City PA. It’s kind of difficult for me to take this guy seriously when he’s touting a move to Oil City as a step up in life. I think for most of us that would be regressing.
If “no one wants to live there,” why saddle yourself with ownership? To whom will you unload the property if you have to/want to sell? Also check the property tax rates - seems they would have to be higher to make up for the low prices. Surely a place as undesirable as “Oil City, Pa” would also have dirt cheap rents?
Ice jam on the Allegheny River in Oil City:
http://en.wikipedia.org/wiki/Image:Allegheny_River_Ice_Jam.jpg
Note the picturesque macrobrew billboard in the background, the only hint of color in the entire landscape.
Usually when a place is dirt cheap there’s a good reason. Imagine what kinds of people will be your new neighbors.
Look everyone, his daddy said…
LOLOLOLOL
took the words right out of my mouth
lmao nycboy
“Long Island has been hardest hit so far, with nearly 13,000 foreclosures or homes with mortgage payments more than 30 days overdue.”
You wouldn’t know there was a problem, looking at asking prices.
As spring turns into summer, I expect there will quite of few “wishers” turning desperate.
I am DUMBFOUNDED that I’ve yet to hear one politician or consumer group comment on it’s better for everyone when prices are in line with wages. How letting the prices drop may hurt some greedy speculators, but will help people who may want to purchase a home in the future.
I grew up on Long Island, so I know how silly Long Islanders can be. They all think that Long Island is some special paradise…the nicest place in the country. (I admit…it’s not bad, and has some great beaches! But there are many nicer places to live….and all the people there look and talk like the Buttafuocos!)
My parents still live on Long Island. They don’t care about declining house prices in a home they’ve lived in for 40 years! What does bother them is the fact that, behind them, one house was torn down so two “McMasions” can be put up which NEVER SOLD…and now there’s two ABANDONED HOMES behind them, that keep getting broken into, and with an overgrown yard…where there used to be one nice, neat house. My Father, who likes to cause trouble with the local government went to a village council meeting with photos of the homes and said “Happy now?” to the planning commission that granted the variance to approve building on too-small lots.
I parked money into real estate in 2003. I guess I got sucked into the real estate mania, I bought 3 acres of land in the Hudson Valley which I hope to build on in 2 years. Perhaps I overpaid for the land, I fell for the maxim-” well you know, they’re not making it anymore”. I bought the land with cash on the barrel head, no mortgage. I only pay $1200 a year in taxes and use the land to camp out on when I come back east 4 times a year. Beats hotel costs. There’s no maintenance (except for a fallen tree every once in a while) that I clear. It’s only an hour to Grand Central by train. I don’t look at it as an ‘investment’ although honestly I hope it does go up in value or at least stay even but honestly, I want to leave this for my family when I go into my Big Sleep. Eventually I will retire there as I am designing a home specifically for the land-a 750 square foot home with an open basement incorporating solar energy and geothermal energy. Very modest. I don’t understand the McMansion thingee at all, although I do understand the desire for owning home property. Just some thoughts.
Right ,and thats what I hate about the aftermath of the housing boom is the vacant houses . Across the street from me is a foreclosure that has been sitting for months . Had I not taken care of the lawn it would be dead by now .A Realtor finally came by and I asked the jerk to tell the new owner (the lender ) to start taking care of the property . Have they done it ? No.
I know a builder of a condo project a couple miles from where I live and he is now going to start renting out his units that he couldn’t sell. I wonder what the owners think about owning while others are renting .The builder told me that its costing him over 50k a month to carry the project ,(he is a small builder). I guess its better that the builder rents the units instead of turning the project back to the bank ,especially since there are very few rental units around here . Many of the units have been sitting vacant for over a year now . Anyway ,this Builder thinks that happy days are only about a year away .
‘My Father, who likes to cause trouble with the local government went to a village council meeting with photos of the homes and said “Happy now?” to the planning commission that granted the variance to approve building on too-small lots.’
I approve of this. Your father gets a gold star on the forehead. If I had some gold stars, and if your dad was handy.
Throw Out the Maps in 2008
http://www.realclearpolitics.com/articles/2008/03/throw_out_the_maps_in_2008.html
The more I watch what’s happening in this election year, the more I think this article is prescient. No matter which Dem finally makes it to the nomination, the other side is likely to be split with a significant percentage going to McCain.
For me its like the movie Topgun where the Commander is telling Maverick, “I gotta do something here, I still can believe it. I gotta give you your dream shot!”
the two sides - 100 years of war and torture and corporate welfare versus something where some of the people will be helped and the war can end and our economy put back on track and the debt paid down to where it was eight years ago - at a surplus
What are you smoking?
Affordability,
It is more like this: 100 years of war, amnesty to 12 million illegal aliens, versus 8 years of severe socialism, amnesty to 12 million illegal aliens and the death of our 401ks and IRAs.
Just let the illegals join the military! Problem solved!
Seriously, though - you see 8 years of socialism as a GREATER evil than 100 years of war?
To answer your question, NO! I kind of agree with some of the conservatives pledging to vote for the witch instead of John McCain. Combined with a Democrat-led Congress, a Clinton or Obama executive branch will destroy free enterprise and millions of people wanting to achieve the American dream. They will give us Socialism to the max and it will cause a severe backlash in 2016. Hence I am for a Democrat to take the oath of office for President in January.
More damage was done to “free enterprise and the American dream” in this country by Reagan and Bush(s) than by any “socialist” democrats. Small business has been completely gutted in this country since Republican deregulation has allowed massive corporations to monopolize nearly every aspect of the business world. The middle class has shrunk, NAFTA has decimated our manufacturing base (Clinton, I know, but I consider him a Republican as far as his economic policies were concerned), the FIRE economy has replaced any productive industries in this country. This is all largely the work of Republicans and Republican policies. You are dreaming if you think a Republican administration is going to do anything to help “free enterprise.” They favor only controlled capitalism that allows their cronies at the top of the few corporations in control of each industry to profit. No “free markets” or “competition” is allowed.
Are the Democrats any better? Not by much, but if you think the Republican party supports free enterprise you need to wake up.
Bub,
Agreed.
I don’t think it’s even going to be close.
From the Chicago Sun-Times
The flip side, again . . .
A top Obama source tells Sneed he feels GOP presidential contender John McCain will beat Barack Obama — unless Obama increases his coalition. Stay tuned.
How can Obama increase his coalition?
IMO he can’t, because the video clips of his pastor, looped over and over again, will scare the crap out of millions of Americans. I know racism exists, but it also exists in the heart of some blacks and apparently Obama is one of them. His only chance of getting elected is to prove otherwise.
He needs to denounce Rev Wright, but he can’t/won’t.
So then we have McCain with his dream shot of running the country. Yes, TXC, I think you’re right, its not even going to be close, and there will be wailing and knashing of Dem teeth for four more years.
McCain’s VP choice is very important too, to make sure that that witch from hell is shut out from even fantatsizing about running in 2012
Of course he won’t denounce Pastor Jeremiah…Michelle won’t allow him to!
Or maybe they just want to stay on Jeremiah’s “A” list so they’ll be invited to mad soirees here.
It is going to be a blowout.
“but it also exists in the heart of some blacks”
Oh no no no… blacks cannot be racist, only whites can be. There is an egregious double standard, as blacks have free license to use the N-word, call women hos and btchs etc; I personally despise such degrading behavior and believe it helps perpetuate racial inequality and hatred. Any white behaving thusly would most likely be tarred and feathered or worse.
Gotta love Faux News sometimes. Great find!
IMO, the Presidential election is a diversion. Two teams from the same school. How about more Ron Pauls in congress, and fewer hand picked bank lobby candidates?
What did Ron Paul do with all the money that was donated to his presidential candidacy (including mine)? I never saw a damn thing from this guy except a few emails. Didn’t he raise millions? Where is it?
Definitely not in the same school or even in the same city park.
Barack Obama, historian and Hamiltonian
by Mark Kleiman
“Putting the substance aside for one moment, Obama’s Cooper Union speech on the economy illustrates two points about his thinking that haven’t been widely remarked on:
1. When he considers issues he tends to start out by thinking historically, and by starting with the period around the framing of the Constitution. This is a very unusual impulse among American office-seekers.
2. He identifies strongly with Hamilton as against Jefferson. In particular, he uses Hamiltonian interventionism to demonstrate that laisser-faire was not among the founding doctrines of the nation. Since Jefferson remains among the household idols of the Democratic Party, that’s a fairly bold thing to do.
The same themes come through in The Audacity of Hope.”
http://tinyurl.com/24affh
SameFacts.com
“IMO, the Presidential election is a diversion.”
Agreed. Smoke and mirrors. The real action is the Fed, and the new Treasury plan to increase it’s powers, without any voter input or oversight. Let the voters think they matter, while the real consolidation of economic power continues.
The voters matter as much as retail shareholders…which is to say, they’ll get nothing and like it.
I know you all love to be cynical
But in fact Obama directly addressed black racism in his speech. I know it doesn’t matter to you, you have already decided to back McCain, but snarky comments that bely the facts are disingenuous.
Thanks for perpetuating right wing talking points. Let’s not discuss McCain not understanding the difference between Iran and Al Queda, wanting Greenspan to solve the current economic troubles, or the speech of Pastor Hagee, a man whose support McCain sought out and thinks we should start Armegeddon in Israel.
I do in fact favor Senator Obama over Senator McCain. I am realist enough to know there is no panacea. Nor do I expect any substantive changes other than higher taxes. I certainly do not expect any fiscal responsibility. Congress will continue to enact bread and circus programs. Unfunded. But at least the fourth amendment is not under threat from Senator Obama; it is from Senator McCain.
Given a choice between an assault on the 2nd amendment or the 4th amendment, I’ll choose losing the 2nd amendment.
We are dead ducks! Both parties are basically pushing the same policies. Where is Ralph Nader when we need him?
jmho
make sure that that witch from hell is shut out from even fantatsizing about running in 2012
Didnt you vote for Hillary in the TX primary?
If Hillary wins the nomination, she is going to crush McCane.
I obeyed my master, Rush Limbaugh. Kidding.
lol. Right. That would be even bloodier than Obama.
We’ll see, y’all.
It’ll be fun to revisit these predictions in November?
“Given a choice between an assault on the 2nd amendment or the 4th amendment, I’ll choose losing the 2nd amendment.”
Good luck with keeping ANY of the amendments after you lose #2. It’s what makes the others possible. [#4 has been thoroughly gutted anyway.]
Be prepared for a random rant: I’m feeling very old and cynical today.
How do you all have the reserves to pour these kind of emotions (pro or con) into total strangers? You can listen to the news forever but unless you’ve had a chance to meet them, it’s impossible to tell if they are Mother Theresa, one of the lessor minions, or something in between.
I’m so sick of “right-wing” and “left-wing” conspiracy theories, talk points, etc I could scream. Life is waay too complicated to only have two sides to an issue. If you have a good point, it doesn’t need label.
And why argue so far in advance? When people actually vote, it will be for some stupid reason like gay marriage as opposed to some real issue.
The real genius of the founding fathers was recognizing that it was possible to pit all the stupidity and power trips against each other, leaving the rest of us in peace.
Sorry about the rant. I know I’ll see a ton more of these threads by the election… I’ll just skip them the next time.
Good question, NYCityBoy. I gave Ron Paul a bunch of dough, and I’ll be damned if I have anything to show for it.
I gave Ron Paul a bunch of dough too, with no complaints or regrets. What do I have to show for it? First, his campaign keeps immaculate books - if you want to know what happened to your money, I’m sure it’s all in there. Second, Ron Paul, unlike the Hollow Men Establishment candidates like John McCrazy, did not have the backing of the Republicrat party machine - they hated and feared him, which forced him to pay for all the resources he used. He bought some very expensive air time and opened a number of local offices staffed by both volunteers and paid staff - who else is going to run a campaign?
I have everything to show for my donation to RP. He inspired me. He cured the apathy of many thousands of young people who have total contempt for our current political whores and swindlers. His message went out, even if 95% of the American public are too brainwashed, ignorant, and clueless to grasp its importance. And the “Ron Paul Revolution” isn’t finished, not by a long shot. So if you believe in principle above personal gain, you got your money’s worth.
McCain is SO swiftboatable it’s not even funny.
Let me count the ways: rotten pilot “reverse ace” McCain, playboy, adulterer, POW-MIA families backstabber, Keating Five conspirator, foul-mouthed hothead, collaborating POW non-hero, spoiled rotten Admiral’s son, Israel Firster, pro-illegal alien amnesty, dillusionally pro-war, neo-con waterboy . . . the list goes on.
Whoever ends up on Penn Ave . . . we are so screwed. Too early for vodka?
IT’S PAYBACK TIME OBAMA;
You played Dirty with the I-man , not looking at all Imus had done over his lifetime, and wanted him fired over one stupid remark….
Had IMUS called the the girl who accused the Duke Lacross players of rape, a nappy headed ho….no one would have cared because she is a nappy headed ho….got busted for prostitution too.
its never too early for Vodka, that why they created the bloody Mary.
Clarification?
Polls at this point are pretty much useless. 9 months ago the polls had McCain out of the race and Rudy as the next President.
What Obama or Clinton supporters tell pollsters now is quite different from what will happen come next November.
i could care less about buying real estate anymore
in fact i am not happy in my current rental so today i am going to look at a new place $100 cheaper in a more convenient locale closer to transportation and a nicer neighborhood
i am so disgusted by the current situation both in the financial sector and the housing sector screw these crooks
i will rent for as long as it takes maybe forever
may all these real estate and wall street bottomfeeders rot
There’s one. 299,999,999 to go.
Although I like your anger I hope it doesn’t get too intense. I think I am in the minority, even on this blog, that doesn’t care if I ever own again. I am not on the HBB, hoping that prices come down so that I can buy. I want this souffle to collapse so that we can have a stable long-term economy, upon which a middle-class can be rebuilt. Owning, renting, who really cares?
We are in the process of looking for a new place. It will be interesting to talk to landlords and see if little Buffy and Skylar are having troubles renting now that mommy and daddy are watching their equity vanish.
I own a home and I’m with you, NYcityboy.
I had a eureka moment yesterday along the same lines. I visited a homeowner (bought in 2004) who had massive amounts of landscaping work to do on the property (we live in a somewhat ruralfied DC suburb). I was so grateful to come home to my nice cheap rental house. (We came close to being in a position of vastly overpaying for something that needed work in a bad location in 2005). It’s also been good to be forced to move several times in the last few years because we’ve come to terms with ’stuff’ and how it’s been burdening our lives. Most of it is gone now.
I have the same exact experience and feelings about stuff.
I’m with you too NYCB. I may become quite mobile for the next several years and the idea of owning a house has become like carrying around a big cement block to me.
Mobility is the way to go. It allows you to get the top paying jobs. I personally would like to see airlines double the ticket prices and not take safety shortcuts. I travel for business frequently and I know airline prices are cheap when I see young families with 2 kids on every flight.
Bill,
You’ve told us all 8,619 times that rootlessness, er, mobility, is the way to go. You’ve told us 15,654 times that accumulating gold bullion coins is the only thing that will stave off a personal financial Armagadden. Both statements may be the undisputed truth, but do we really need to be reminded of them quite so often?
I would argue that a connection to the land, and to family, and community, if one can attain it, leads to a richer life than a briefcase full of Krugerrands and an airline ticket to Someplace Else. And my wife and kids aren’t encumbrances: they are worth more to me than all the precious metals and job opportunities on the planet. Just my humble opinion….
I would argue that a connection to the land, and to family, and community, if one can attain it, leads to a richer life than a briefcase full of Krugerrands and an airline ticket to Someplace Else. And my wife and kids aren’t encumbrances: they are worth more to me than all the precious metals and job opportunities on the planet. Just my humble opinion….
Sammy - I agree with you. I personally don’t mind having the mobility within a community that renting gives me. There’s nothing wrong uber mobility if it works for Bill in Maryland.
However, I wonder how much happiness lies down that road. I don’t feel the need to come back here and post 3 billion times how happy my husband and kids make me and how it’s THE WAY to go. It feels like Bill doth protest too much.
you Da Man, sammy.
“Both statements may be the undisputed truth, but do we really need to be reminded of them quite so often?”
Psst — I have one acronym for you: DCA…
Psst — I have one acronym for you: DCA…
Please enlighten the acronym impaired. *grin* (Although I’ve got a guess at meaning..)
“And my wife and kids aren’t encumbrances”
Well, what else are you going to say? I guess you choose not to describe them as “mutant mouth-breathers”; you save that for other people’s kids. Parenthood–a do-it-yourself vanity project.
Just shows Sammy and VermonterGirl have nothing better to do but drool with envy and hate the successful for being successful. Nothing wrong with promoting mobility. I am sick and tired of Vermontergirl and Sammy as well. They repeat their same putrid posts over and over.
I hear you NYCB. We do wish to buy, but only because it makes sense for our living situation, not some intrinsic “need to own.” I am feeling some mgnyc level anger though.
As for the middle class. I am sure I will get flamed a bit here from the resident libertarians, but the middle class in this country grew largely as a result of government policies that grew out of the New Deal and the post WWII GI Bill. That along with the fight of the Unions for a living wage and benefits for workers expanded the middle class to the largest segment of society.
The Republicans and Conservatives have worked very hard since Reagen to dismantle the middle class. And under G W Bush they are succeeding quite well.
Dude, you are smoking some good stuff. Unions? Go look at Detroit and then get back to us on Unions.
Detroit had a thriving middle class, until the car makers shut the plants and moved them off shore, thanks to NAFTA and pro-bussiness tax cuts and Free Market laws that the Unions opposed.
Blaming the Unions for Detroit is like blaming the people of Indonesia for the Tsunami.
What you are going to tell me they made making cars in the US to expensive. BS the move to Mexico saved GM on average 6%-10% per car. And then they went ahead and made cars nobody wanted anyway. Hummers anyone? Was that really worth the destruction of the middle class.
I agree with you 100%, ed.
i could care less about buying real estate anymore
I hate to be a grammar nazi, but I read this that you still care somewhat about buying real estate. The proper phrase is “I couldn’t care less about buying real estate anymore.”
not to be a linguistics nazi, but the grammar of vernacular (spoken) English is not the same as the grammar of formal (’written’) English.
I wouldn’t call formal English written English because a) formal English is used in speeches and in symposia and the like and
b) vernacular English is the predominant form of English used on online forums, although you can also find Black English, which has a remarkably different grammar from vernacular English and its various dialects so I wouldn’t really try to call it the same thing
…and then you have the Scots. I’d be hard pressed to call that English anyway; it’s like calling Frisian German.
thanks bill
but truly how is this?
i could give 2 flying fxxxx about buying real estate
if you do not like the grammar do not read it
good day
oh btw how many t-bills of bars of gold did you buy this week?
zzzzzzzzzzzzzzzzzzzzzzzzz
lmao.
“I hate to be a grammar nazi, but…”
If you hate to be a grammar nazi, then why the hell are you being a grammar nazi??????
400
You and Exeter are full of hate, aren’t you?
Comment by exeter
2008-03-28 12:11:44
Not really az. Just 8 short years ago I bought 130 tillable acres for $3500. It’s not swamp, it’s not industrial. 130 acres of tillable, buildable land. Now I’m blessed with an $1200 tax payment, year after year, and that is with an AG exemption. I let someone else hay it and they pay the taxes so what did I gain?
My comment: Please tell me what state and town that land was in. Even with the $1200 annual taxes, it’s a give away at $3500! I was checking the northern taiga of Alaska and land is around $500 an acre. Good luck farming in winters that can get to -60 with -100+ windchill and frost in July. That land is worth maybe $100 an acre as a summer vacation spot, it’s nice with beautiful conifers for 3-4 months of the year.
The problem with what exeter was saying is that you have to be able to live on the land (or rent it) to extract value from it. In Exeter’s case, he has no carrying costs and could sell at a profit. If he owns the land outright and taxes are paid by the people haying it then he can live “rent free” on it which has significant value.
Good point about the land value in Alaska.
I stopped off to get a haircut on the way home last night. Evidently, Friday is when the guys go to Supercuts. Just as I was heading back, a young man who had just finished bumped into a buddy. One had his own business. The other worked at a place called Rockville Steel (in Rockville, Maryland). They did not sound too happy. Rockville Steel guy said that things weren’t so great at work. The business owner said that things were terrible and he was thinking about getting a regular job just to have a salary coming in. I didn’t get a chance to figure out exactly what the small business was.
I always tip over 50% on the haircut, and the woman who cuts my hair always says thank you, but this time she was a bit more overjoyed then usual. Perhaps her tips are shrinking?
Sorry if this is a double. I got a severe error the first try and it hasn’t appeared, so I’m trying again.
I go to Supercuts too and tip also. But these “spa salons” who charge you $100 for coloring or highlighting that takes about 15 minutes and then expect a tip? Forget it. They make more per hour than I do.
I think I get a better haircut at the cheap places than at a more expensive ones. People whose income is skewed toward tips (I doubt that the woman who cuts my hair gets to keep a lot of the $14 the store charges for a shampoo and cut, no blow drying) - are more likely to do what you ask them to do, not what they decide you should want. I’m an adult. I know that I don’t want all-over short layers. Tough nuts to them and their need to express their creativity all over my head.
Here’s my haircut story. I think it has its place on the blog. A couple haircuts ago I ventured into a place near City Hall. It’s close to where we live. I got a decent haircut but I was surprised how much attention came with the cut. It seemed like more than normal. At the end of the cut I was told, “that will be $25″. I normally pay $12. I didn’t blink. I dropped down $30 and said, “thank you”, knowing that I wouldn’t be going back because the CityBoy just doesn’t pay $25 for haircuts.
That weekend we were out with friends and my haircut story came up. It probably happened while somebody mentioned my conservative nature. Our friend told us that she pays $275 for her haircut. Upon hearing this my b***hole tightened up so much that you couldn’t have gotten a thumb tack up there without a jackhammer.
Guess which one of us is not going to face serious financial problems?
“Our friend told us that she pays $275 for her haircut.”
$275 is actually the going rate for a haircut at a top women’s salon in NYC or LA. In Boston, $275 will get you the best haircut in the city, plus a full foil from a top colorist.
Well, NYCityBoy, with a sphincter-clinch like you described, you’d probably have no trouble turning lumps of coal into diamonds. So I’m guessing you’ll be making bank with that talent, though forgive me, I think I’ll stick to conflict diamonds.
I have better things to do with my hormones than to grow hair!
LOL. I keep my hair very short. I pay $12 and tip another $2 once a month. Am I the only one who noticed that the price of hair cuts at Supercuts / Great Clips / Costcutters have stayed in the $10 to $12 range since 1996? Not much inflation there.
In 1996 it was $8. You must have been paying too much!
In 2000, you could still get a buzz for that little in the military areas. Maybe $7, IIRC!
“Horizontal jogging”? LOL
Someone above said:
“But these “spa salons” who charge you $100 for coloring or highlighting that takes about 15 minutes and then expect a tip? Forget it. They make more per hour than I do.”
*******
This reminds me how ridiculous the credit bubble was and how long its been around in various forms (most obviously in dotcoms, and then real estate).
Eight or so years ago a friend of mine was finishing med school and commenting on how after residency in a few years he was expecting as a GP to not make much more than “average hair stylists in Boston.” Those being the kind who charge $100 for 15 minutes of work (which people pay! Perhaps the sign of a bubble economy).
His thought was: “why the hell did I just go to med school and now have a residency to complete!”
If all true, I had to admit I didn’t have a good answer for him.
[in a hurry]
Of course, notwithstanding that GP’s usually “do some good” for humanity in their line of work.
Hair stylists? Perhaps…
Do the job because you like the work, you like the people you work with, and it pays the bills.
I got to a guy with a barber pole and a simple “_____ Barbershop” sign who still shaves the back of your neck with a straight razor, and charges $15. No “stylist,” he.
Republicans vs. Democrats
When survey respondents were separated according to the political party they supported, the results were slightly different. Democrats were much more supportive of government assistance than Republicans.
The Democrats were almost evenly divided on the idea of help for homeowners. Sixty-seven percent of Republicans, on the other hand, were against assisting homeowners who borrowed too much. Fifty-five percent of respondents who are not affiliated with either party also opposed government help for homeowners.
When it comes to helping banks that made bad loans, only 53 percent of Democrats said they were opposed a government-led bailout of banks compared to 68 percent of Republicans. Sixty four percent of respondents with no affiliation were also opposed to a bailout of banks.
Considering 1: that renters, outright owners, and responsible borrowers are still largely unaffected by all this, and 2: bankers should not be rewarded for their behavior - it is very glaring in those results that the adherents of one of these parties want only to help the shamelessly rich and the “popular/fashionably poor” - and the heck with everyone in between.
Don’t you love it when others know what’s best for you?
I’m wondering if it isn’t that they want to help the [insert slimy description]’s. It may be simply that they have to do something. A warm and fuzzy yet dangerously naive faith in the value of DOING SOMETHING - ANYTHING!
“Don’t you love it when others know what’s best for you?”
Yea, I love how McCain wants to spend trillions in Iraq indefinitely (this includes interest on the debt and future VA costs). That’s a great way to spend my money.
Careful arlington. You’re tiptoe-ing in Grandpa Country.
March 28, 2008
Time to Reform TAF?
by Paul Kasriel
The Term Auction Facility (TAF) that the Fed initiated in mid December of last year was a stroke of genius. In recent days, however, it seems to be failing to accomplish what it was designed to do — bring interbank lending rates into line with the Fed’s funds rate target.
Any corroboration from the any HBB PM follwers that the US Mint has suspended production of Silver Eagles?
Bud of mine couldn’t get his monthly batch from his provider.
Salesman’s said there was , “no more”.
I think this is a test of contago for the silver futures market.
think about it.
I haven’t heard that the program is stopped, but if this years allocation to your approved distributor is sold, there’s “no more” till later. With the premium they charge for them, it would be silly to stop.
I get Jason Hommel’s Silver Stock Report emails and he has been reporting all kinds of shortages and companies out of stock, along with delivery delays. I delete after reading so can’t recall if US Mint was one of them, sorry.
I’d like to know too. But this does not mean that existing eagles will no longer be sold. You can get a box of 500 silver eagles from CNI in EL Lay. I remember Monex was selling Silver Maple Leafs in batches of 200 ounces about 12 years ago. I just went to the Monex web site and confirmed they still sell silver Eagles and Maple Leafs, but they did not say what the minimum units of sales is.
The Mint has suspended production. They don’t give a reason; I have heard everything from bad blanks being returned to to the Mint not wanting to buy silver at the current high prices. No one knows for sure. There is a disconnect between the price of silver futures and physical silver currently even at settlement. You can’t buy physical for anything near spot.
Acutally, the problem extends to many of the grains currently, also. No one has an explanation for this price action. Futures are supposed to expire at a price equal to spot, but they aren’t. I believe this is a signal that the next leg up in prices will begin soon.
Backwardation is a situation were the cash price of a commodity is pregnant with a premium a buyer is willing to pay, for having the immediate delivery of the commodity.
We are already seeing the hoarding of food, price controls, and shortages in the emerging markets. I would be very careful paying any premium to spot prices for actual delivery of metal coins. If the buyers are not getting satisfaction from the mint, I would suspect many would go to another market maker to solicit delivery. Get ready for even more scams in the coin market to emerge.
and isnt this how bubbles burst. Powerful beliefs that prices will only go up, pile in main street investors who are driven by fear of being “priced out”, beg, borrow and steal to get your hands on the “last great thingy”. Followed by stories of fraud, and finally coming to the realization the thingy that you bought is not really rare at all.
You can’t buy coins without paying over spot. Currently dealers are paying over spot for eagles, and selling about $2 over spot - a big premium.
my concern is that if the mint stops producing, they have opportunity to not only hoard whatever silver is in the pipeline, but to send a radical signal to the market to move higher too quickly. I still think silver is going to 15 then run back up, only to ultimately tank hard.
not only that but I dont buy silver or gold, I sometimes by underlying securities such as mining stocks, those are easy to trade…but hoarding across the board of physical commodites is starting to cause panics and violence.
I think Im about to step off the commodity bus.
I bought 60 ozs of Silver Eagles this week with no problems. Direct your pal to this commentary regarding the ’shortage of silver’.
http://tinyurl.com/2kc562
I believe the question is about new Eagles, year 2008.
Apartment rents in Rancho Bernardo/Carmel Mountain/4S Ranch (San Diego) seem to be falling.
My wife and I are looking to move up to a two bedroom - and every time we talk about rent, the leasing office people start crossing off the printed numbers and offer something lower. As much as 200-250 on some. Also, after wife checked out 5 places on Thursday, we got 4 phone calls thanking her for stopping by - explaining that they would just LOVE for us to call the new place “home” and that they were sure they could get us a great deal.
Wasn’t like this 4 years ago.
It’s a good time to rent, but not to buy. It’s ironic that rents are falling faster than house prices which didn’t fall much in SD(yet)
“…house prices which didn’t fall much in SD(yet)”
You have got to be kidding.
I think he was referring to South Dakota.
No he is serious — 20 pct down is only the start.
Except that you have to be VERY careful your potential landlord isn’t a hair’s breadth away from foreclosure! If renting a house, you should probably seek assurance in writing from the landlord that the house isn’t in foreclosure (so you have some legal resource) and more importantly get a credit, legal judgment, and criminal background check run on him!
In my upscale neighborhood of Ahwatukee, if you rent a house, you are more likely to be a victim of burglary or other break-ins if you are in a single family home than if you are in a corporate-owned apartment complex in a gated community. Last weekend when I was there, I read a newspaper article about the crime rate increasing in Ahwatukee (suberb of Phoenix in the southeast of the city). Maintenence on apartments is quicker than in SFHs. No lawns to mow. Jacuzzi’s and swimming pools in the complex - I don’t have to maintain them. And best of all, my rent increases have been below the inflation rate.
Despite the occasional REIC scare-tactic article that shows up in the SD U-T claiming that rents are increasing, I am highly skeptical. There are “FOR RENT” signs out on the lawns of many homes in our area (RB 92127), and our rent is the same this year as it was last year. Further, a coworker who owns a couple of rental homes told me the rental market is weak a couple of months ago.
My guess would be that the rent increases primarily hit the low end of the market, as yesterday’s subprime-funded condo-conversion buyer is no longer able to qualify for a home loan to buy a $250,000 apartment with granite counter tops and faux stone siding on the outer walls of the apartment building.
My guess is the rent “increases” are in wishing prices, not the price they actually end up renting for. Lots of people desperately want to cover their entire mortgage payment with rent… good luck with that.
The Bush administration is finalizing plans to help homeowners refinance into affordable mortgages, backed by public funds.
There you have it…Republicans at work.
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/28/AR2008032804017.html?nav=rss_print
The article notes that the plan would be similar to Barney Frank’s proposal, where;
1. The borrower would currently have negative equity
2. The new loan would be 85% LTV max
3. The borrower could afford the repayments on the new loan (No !!!!)
4. The borrower would commit to living in the house for a period of time (undefined in the article)
So the holder of the note would be taking at least a 15% hit, and probably more.
I have heard worse proposals, but personally I would like to see the wriggle room taken out of point 4, and replaced by the equivalent of a stonking great prepayment penalty which steadily reduces over time.
In every one of these schemes, Republicans initially say they are against bailout measures (freezing loan rates, raising conforming loan limits, etc) but eventually give in to the Democrats. This will be no different. From what I read, someone who bought a $700,000 house in 2005 with no money down, whose house value is now down to $500,000 would have their loan reduced to AT MOST $425,000, and perhaps even greater, with the only condition that they stay in the house for 5 years. After that, any appreciation would be the homemoaner’s to keep.
Barney & Dodd will get their way again: reward deadbeats who lied on loan apps and had no business buying houses…rewarded with hundreds of thousands of taxpayer guarantees, and, if the house appreciates, this represents a real transfer of money from the responsible to the irresponsible. Meanwhile, those who never committed fraud and lived within their means have less incentive to buy since this will prolong the downturn in prices; prospective new home buyers aren’t getting any tax credits or anything. Maybe I’m just bitter since I just wrote a check to the US Treasury for $3,000 and I now know this will help support flippers and bit#hy, over-extended soccer moms in SoCal.
Hmmm. $300B for underwater homeowners who love banks enough not to walk, but let’s not reward “risky behavior” by propping up the banks. (B-S underwriting.) (Well, actually, more like: Let’s have a hearing and rake you over the coals a bit for it.)
The ingrained idea lives on: Real estate only goes up and anyone caught severely underwater in a (maybe) bubble with a few % decline was merely incredibly unlucky.
“The Bush administration is finalizing plans to help homeowners refinance into affordable mortgages, backed by public funds.
There you have it…Republicans at work.”
And just how is this different from the Democrat plans?
Perhaps there is a different definition of “creditworthy borrower” in play? E.g., R-cans’ definition = IBs “worthy” of $29 bn taxpayer-funded guarantees; D-rats’ definition = FBs “worthy” of assistance to help them stay in homes they cannot afford until enough home equity wealth gains have occurred to bring their loans back above water.
“And just how is this different from the Democrat plans?”
Lies, hypocrisy, smoke and mirrors.
Wall Street’s grim prophet
One of the first and harshest critics of the financial sector, Meredith Whitney isn’t afraid to take on the biggest companies.
Gotta love this lady……….calls it as it really is.
http://money.cnn.com/2008/03/27/news/newsmakers/benner_whitney.fortune/index.htm?postversion=2008032810
She received death threats as thanks for her candor.
And she was still dumb enough to marry that moronic Bradshaw? WTF?
This comment is puzzling as the article says..
“She famously met her husband, former professional wrestler and stock guru John Layfield…”
I think there is a “guru” bubble.
My sentiments exactly NYCboy. It would be more accurate to refer to him as Mongoloid Bradshaw.
The article says she was bullish on Bear Stearns and Lehman as late as last summer. Good for her for calling Citi right, but I’m not so sure I would agree she qualifies as “One of the first and harshest critics of the financial sector”.
I doubt it was the same person, but I read recently some analyst being fawned over for correctly ratcheting down their earnings estimate for some bank for 43 straight weeks.
How prescient. How about getting ahead of it?
She is more likely the Elaine Garzelli of our times…
I enjoy Ms. Whitney, but she does have a vested interest in banks going down. She is a ‘bear’ shill, just as Mr. Cramer is a ‘bull’ shill. Take her comments with a mote of skepticism. She has been negative for 3+years.
In her favor, there is a lot of dark matter out there. Germany is estimating its bank losses at EU90B. They seem too have bought the most amount of the crap. The US banks have to take losses at some time. Each can continue to take the standard $3B every quarter for the next three years. Few banks can afford to take the entire loss at one swoop.
“Each can continue to take the standard $3B every quarter for the next three years.”
If she has been negative for 3+ years, that would make her a prophet, not a “shill”.
You made a lot of money buying bank stocks three years ago and did well until 9 months ago. She was a little over 2.25 years early. If you followed her opinions you lost a large opportunity and a lot of moneys.
Hoz, by that logic we are all housing shills–many of us were a couple of years early on identifying the housing troubles.
Ms. Whitney makes money by panning other bank stocks than the bank she works for. If you were deliberately telling people to sell with the idea that you would immediately profit, that is being a shill.
Ms. Whitney is employed by CIBC.
From the article:
“But and MBA isn’t necessairly and advantage in my job. Curosity is an advantage. Being able to find a story is an advantage. It’s what historians do. Everything happening now we’ve seen before, just with different characters.
“There is the human story of power and hubris. If you know Shakesperian tragedy, you understand what’s going on [in the market].”
A very astute observation. Definitely a person worth listening to.
It goes back farther in time.
If I recall, the Greeks said something to the effect that the gods will them proud before the fall. Also another classic, first the gods will make them “mad” before they are destroyed. Wording not exactly accurate, but you get the idea. Any Greek scholars out their?
Where is Zeus, when you need him!
There’s a saying: “If you want to learn new things then read old books.”
‘Where is Zeus, when you need him!’
According to my modest background in classical literature, Zeus is spending His time wisely: chugging ambrosia, changing Himself into various zoo-creatures, dodging His cranky wife, and chasing the lil’ hotties.
Not the guy to go to waving a spread-sheet and seeking financial advice. He’d probably just smack you down with His might hammer and then get back to His seamy hobbies. Oh, wait, no…that was Thor with the mighty hammer.
Whatever. Look–just stay away from the gods, okay? ‘Cause that usually ends poorly for mortals.
Very appropriate that the Zeus response was from “Olympia”girl.
Now pardon me as I prepare for Ragnarok.
In a couple of his minor roles, he’d be yer fella:
As Zeus Horkios, he was the keeper of oaths. Exposed liars were made to dedicate a statue to Zeus, often at the sanctuary of Olympia.
As Zeus Agoraios, Zeus watched over business at the agora and punished dishonest traders.
Other than that, you’d be better off praying to his much more hard-headed daughter Athena, or to the fliberty-gibbet Hermes.
Chinese exporters shun flagging US dollar in favour of stronger rivals
By Robin Kwong in Hong Kong
Published: March 28 2008 02:00 | Last updated: March 28 2008 02:00
IMHO, news like this would make me bullish on the US dollar (I am not), The dollar has mucho risk and the perceived safe currencies are the Yen, Euro etc.
The Yuan may be up 3.2% against the dollar, but it is down 8% against the Euro; and exporters are not stupid.
More from our bumbling government…a new weekend plan to hand over broad new powers to the Fed Reserve, creating economic SWAT teams and an unelected Economic Czar. For those who thought we still had a constitutional republic, this will avoid however, any new regulations. Should make the republicans so happy.
http://www.nytimes.com/2008/03/29/business/29regulate.html?hp
Housing Woes Shake Bank In California
By Valerie Bauerlein Damian Paletta, and David Enrich
Word Count: 1,641 | Companies Featured in This Article: Fremont General, Bear Stearns, J.P. Morgan Chase, Washington Mutual, National City
The financial crisis threatened to claim its first casualty in the U.S. banking industry, as federal and state regulators gave a rare directive to Fremont General Corp. to shore up its operations immediately.
The Bush administration is finalizing a plan to rescue thousands of homeowners facing foreclosure by helping them refinance into more affordable loans, the Washington Post reported in its Saturday edition.
The proposal is aimed at assisting borrowers who owe their banks more than their homes are worth due to declining home prices, the Post reported, citing unnamed government officials.
If enacted, it would mark the first time the White House has committed federal dollars to help the most hard-pressed borrowers.
Under the plan, the Federal Housing Administration would encourage lenders to forgive a portion of these loans and issue new, smaller loans in exchange for the backing of the U.S. government, the Post said.
http://www.reuters.com/article/ b…829688820080329
And that bull is what’s going to keep house prices inflated longer. Maybe they can bail me out too if my NW PA house loses value?
Well this sux.
this is just one more brick in the prison walls our government is building for our general population. This is nothing short of centralizing control and power. This is just another example of the government using its own failings to justify giving itself a promotion and more power.
I like the dead tree edition headline (bold) better than the namsy pamsy online edition byline (struck), as it is far more dramatic.
Personal Spending Up Mere 0.1%, But Inflation Pressures Are MutedConsumer Spending Buckles, Hitting Retailers, Car Makers
By Sudeep Reddy, Cheryl Lu-Lien Tan and Neal Boudette
Word Count: 1,226 | Companies Featured in This Article: J.C. Penney, General Motors, Ford Motor, Toyota Motor, Macy’s, Kohl’s Corp., Wal-Mart Stores, Kroger, Nordstrom
Consumer spending on clothing, autos and other goods is buckling under the weight of a weakening job market, a painful housing downturn and climbing prices for food and fuel.
http://www.besttime2buy.org/
Follow the link for the sales pitch.
There are billboards all over the Tampa Bay Area.
NOTICE…..There is NO REFERENCE to REALTORS.
However, when you link the site, at the bottom, you will note who is sponsoring this campaign. Obviously, people are not taking “REALTOR” on the ad as a source of trust and confidence.
They have screwed themselves with their shillery.
Unfortunately, the public has a very short memory and we will get glowing stories in the not-to-distant future, with various members being interviewed in the press………..financial and market “experts”.
There’s a statement on that web page that says that R-E is a great investment, and it beats stocks. I wonder if they’re breaking any laws when they make statements like that?
And it’s simply not true! I did the calculation on my parents house, assuming that the total cost of renting would be 25% less than owning and that the extra money would all be invested in US Savings Bonds at the prevailing rate for that year, using the historic data. They’ve been in the house for 40 years. And guess what? Renting beat owning. I know I posted the numbers here before a few months ago….(There were periods of time where savings bond interest exceeded 7%…that really starts to add up!)
I didn’t calculate tax advantages. With the 500K one-shot capital gains exemption, things may be a little different. But, realistically, few people can sell their house and not need to put all or most of it somewhere else. The Savings Bonds are tax deferred, and exempt from state and local taxes.
And, of course, I believe it’s NEVER appropriate to consider one’s primary residence as an “investment” using the you-have-to-live-somewhere rule. It’s more like a sunk cost, and it’s incorrect to count any unrealized equity from it it in your net worth!
I don’t know. For my own purposes, I put together a spreadsheet that takes into account a load of information and I found real-estate to be favorable vs stocks as a conservative investment. Of course, the results are highly dependent on the assumptions, so here are some.
Rate of RE appreciation ~3.1%, stocks 8% (after tax)
Loan rate 6%
Percent down 20%
Rent appreciates at same 3.1% rate (this makes a big difference)
I incorporated all the typical stuff like taxes, ins (and appreciation associated increases), hoa, etc
I didn’t bother taking int/taxes deductions into account for now.
At the values stated, the end result is about break-even after 30yrs. I was surprised by this.
Investment advice
If you had bought $1000.00 worth of Nortel stock several years ago, it would now be worth $49.00.
With Enron, you would have $16.50 of the original $1,000.00.
With WorldCom, you would have less than $5.00 left.
If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00.
Based on the above, my current investment advice is to drink heavily and recycle.
Could the next bubble be into a commodity of unlimited abundance? Bring soap…
Oh the humanity…
As Deals Crash, Investors Flee Hedge Funds
By Dana Cimilluca, Cassell Bryan-Low and Jenny Strasburg
Word Count: 628 | Companies Featured in This Article: Knight Capital Group, Vale do Rio Doce, Alliance Data Systems, Punch Taverns, Mitchells & Butlers
“Safe as cash” alternative takes a haircut
(Hope I don’t own any…)
I’m glad I follow Buffet’s rule of not owning anything that I don’t understand.
I should add, though, that I do own some BRKA, and I don’t completely understand the reinsurance business that he invests in. So don’t listen to me.
Short BRKA when Mr. Buffett dies, but until then….lol
I think it’s time to start getting rid of it. I bought it back when it was beaten down during the dotcom 1.0 boom. It was a true bargain then if you considered just the book value of everything it held. And the “experts” were declaring all old-school businesses dead. (The other good purchase during the dot-com boom I did: the legal maximum on I-Bonds which were paying 6.9% back in 2000! Never pass up gauranteed 6.9% interest–with an inflation-protection clause! But people back then would rather buy pets.com!)
“13% of securities will retain full value”……….
“Investors will have to wait for ‘natural buyers’”………
Ouch. Here come some more lawsuits.
Apropos of Nothing
Do Two Recent Novels About China Obscure the Looming Robot Threat? Yes
“…Frankly, this threatening-Chinese theme worries us. Not for political reasons; neither book is said to be jingoistic. Rather, it’s because we’re concerned that “the coming war against the Chinese” is going to replace “the coming war against the machines” as our leading fictional-future-war trope.
The inevitable apocalyptic battle against machines has long been a fruitful topic in books (Philip K. Dick, Isaac Asimov), film (The Terminator, The Matrix), and shit-shooting bar discussions. (We personally believe that simple machines pose an underrated threat; how are we going to lift and move heavy objects when the automaton rocket-blasting helicopters, appealing to intra-machine solidarity, convince levers and pulleys to turn against us?) And this business with the Chinese is a dangerous distraction — a second front, if you will, in a time when America doesn’t have the resources to fight two imaginary future wars at once. In fact, we suspect “Alex Berenson” and “Colin Harrison” are actually Undercover Models AB-246 and CH-391, robotic novelist-simulating fifth-columnists….
In summary, the Times book section is actively working toward a future in which humans are kept alive only so robots can imprison them in cages and harvest their fingernails, which they use to make decorative chess pieces. Need more proof? The Times has resolutely refused to review How to Build a Robot Army, by Daniel Wilson, Ph.D., which — if not solving the problem of an eventual robot uprising — does at least offer humans guidance in co-opting the violent tendencies of robots for our own purposes. Review this worthy book, New York Times, and then we can talk about “balanced coverage” and “not letting our robot masters drive the agenda.”
Please share this information with everyone you know. —Ben Mathis-Lilley”
NYMag
http://tinyurl.com/2b33yb
If you can inform me of any novel or short story by Isaac Asimov having “The inevitable apocalyptic battle against machines” as a plot point, I will be obliged to you.
IIRC one of Dr. Asimov’s contributions to SF was the (unfortunately rather over-idealistic IMHO) concept that robots would be programmed to save humans from harm above all else.
The film “I, Robot”, while not a bad film, has no real resemblance to anything written by Asimov.
Caliban
a robot without the three laws. Harmful, No. Perceived harmful and causing intense strife, yes.
One of the great things about Science fiction is the ability to change scenarios with the stroke of a pen.
I’ll take your point, with the caveat that “Isaac Asimov’s Caliban” was published about a year after Isaac himself died.
War of the machines?
I’ll settle for a toaster that toasts bread correctly by accurately gauging the thickness of the sliced bread.
Please, Hoz! Lay off the booze in the morning.
“Heads or tails, gentlemen?” said Swift. (Mr. Isaac Asimov)
Flipping coins to see who buys. :>)
wonder if he’d write a few calls against HIS liver
Besmirching my dignity. LOL
The lips that touch liquor will never touch mine
“The Demon of Rum is about in the land,
His victims are falling on every hand,
The wise and the simple, the brave and the fair,
No station too high for his vengence to spare.
O women, the sorrow and pain is with you,
And so be the joy and the victory, too;
With this for your motto, and succor divine,
The lips that touch liquor shall never touch mine,
The homes that were happy are ruined and gone.
The hearts that were merry are wretched and lone,
And lives full of promise of good things to come,
Are ruined and wreck’d by the Demon of Rum.
Wives, maidens and mothers, to you it is giv’n,
To rescue the fallen and point them to heav’n.
With us for your guides you shall win by this sign,
The lips that touch liquor shall never touch mine.
O mothers, whose sons tarry long at the bowl,
Who love their good name as you love your own soul,
O maidens with fathers, and brothers and beaux;
Whose lives you would rescue from infinite woes,
Let war be your watchword, from shore unto shore,
Till Rum and his legions shall ruin no more,
And write on your banners, in letters that shine,
The lips that touch liquor shall never touch mine. ”
Take heed female crusaders. There are more old drunks than there are old doctors.
Chinese robot threat!
I just know those sneaky Han are fomenting distraction in Tibet so they can deploy their master robots into the mountains. Then this summer they’ll encircle and capture all the rich Westerners who come to Beijing, brainwash them into commies, and make the FED bail them out with resin-based lawn accessories. And gold. Robots need High Spin gold monatoms to replicate. Tell EVERYONE! There’s no time to lose! Bear Stearns was just a trial run!
I love this, Hoz. Thanks for the dreary-morning hoot.
Reality can be stranger than fiction. Foreign interests are compromising top secret computer systems at the highest levels, today.
http://www.safehaven.com/article-9818.htm
February California median home prices declined $20,550 during February to $409,240. Median prices are now down $67,140 in two months and a stunning $179,730 since August. Prices are down 32% from June’s high, and are now even 13% below the level from three years ago. Granted, these median prices are impacted by the dearth of sales at the upper-end. Yet it’s clear that the California market is in the midst of an historic crash. The Credit standing of Golden State households, businesses, and various governmental agencies now deteriorates by the day. I would argue the explosion over the past three years in “private-label” mortgages, Wall Street balance sheets, hedge fund assets, and California home prices were all part of the same Bubble. This Bubble inflated largely outside the banking system and outside GSE finance - and will now prove stubbornly unaffected by policy maneuvers.
If you missed the CA real estate bubble, it is not too late to get in on another one…(back to the future?)
High prices spark fresh gold rush in California
By Matthew Garrahan in Los Angeles
Published: March 28 2008 20:38 | Last updated: March 28 2008 20:38
With all the snow, there should be great gold panning in the spring thaw. A big earthquake would really make the gold panning profitable. Maybe time to go to Santa Barbara and pan. Like many college students, we would go to UCSB for weekend parties with a ‘gold pan’ for the beach. The young ladies at my school were brilliant (as opposed to mopes like me that were reasonably stupid), but hard on the eyes - I think that was a condition for a lady’s admission.)
Where was that Hoz?
http://www.safehaven.com/article-9818.htm
“I throw this analysis out as food for thought. I am increasingly of the mind that commodities should be differentiated from U.S. financial assets when it comes to the consequences from the bursting of the Wall Street finance and leveraged speculating community Bubbles. Prices will likely remain hyper-volatile but (unBubble-like) well-supported by underlying fundamental factors. Similarly, I believe general inflationary pressures may likely prove more significantly influenced by runaway global Credit excesses than by the Wall Street and U.S. asset price busts. If this proves to be the case, perhaps the greater risk is a bursting of the Treasury Market Bubble. It may take some time, but an enormous supply of government debt is in the offing and - let’s face it - these instruments will become only less appealing over time. It also begs the question as to the advisability of aggressive Fed rate cuts. They will have little influence on the bursting Wall Street Bubbles but possibly huge effects on global inflationary forces. Little wonder the ECB is so hesitant to lower rates.”
“UBS AG began on Friday to lower the values of so-called auction-rate securities held by its clients, a move that will be a jolt to customers who had been told they were investing in a “cash alternative.” The move is yet another way that the credit crunch that began with subprime mortgages has spread to unexpected places and upended conventional wisdom about the financial system.
The Swiss bank appears to be the first major firm to take this action and is expected to inform clients via their online statements shortly. The markdowns, which will be made using an internal computer model, will range from a few percentage points to more than 20%, a UBS broker said.
Other brokers are expected to follow and several are waiting for the end of the quarter in the coming week to make the decision.”
Wall Street Journal, March 29, 2008
From Politico, Phil Graham and your man McCain.
McCain guru linked to subprime crisis
http://www.politico.com/news/stories/0308/9246.html
Gramm’s role in the swift and dramatic recent restructuring of the nation’s investment houses and practices didn’t stop there.
A year after the Gramm-Leach-Bliley Act repealed the old regulations, Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS’s new investment banking arm.
Later, he became a major player in its government affairs operation. According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and Treasury Department about banking and mortgage issues in 2005 and 2006.
During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages.
For his work, Gramm and two other lobbyists collected $750,000 in fees from UBS’s American subsidiary. In the past year, UBS has written down more then $18 billion in exposure to subprime loans and other risky securities and is considering cutting as many as 8,000 jobs.
Saturday, March 29, 2008
The Chickens of Identity Politics Come Home to Roost? [Victor Davis Hanson]
Watching the parade of apologists for Rev. Wright’s hatred—“garlic noses”; “KKK of A;” “God Damn America;” “Condamnesia;” the U.S. deserved 9/11; America is no different from al-Qaeda; we caused the AIDs virus; Israel is a “dirty word” and sought an Arab and black ethnic bomb, etc—is, well, depressing. Instead of offering distance from Wright, far too many African-American professors and pastors interviewed on the cable stations the last few nights instead praised his brilliance and inspiration.
At best, there was a feeble ‘you just don’t get it’ about the venting and wink-and-nod culture of the black church. But the net message from the African-American liberal establishment, at least I fear, seems to be something like the following: ‘Wright is not going to offer an apology and we aren’t embarrassed about his ranting, which is not ranting at all, but rather historical and biblical exegesis which we endorse. And the problem is yours, not ours, since we expect exemption—given the history of race in this country—from your so-called norms of public discourse.’
This is what the triangulation of Obama has helped to unleash: most Americans will now doubt the moral authority of the African-American intellectual and religious community not just to question the questionable racial remarks of a Bill Clinton, Ed Rendell, or Geraldine Ferraro, but also the Wright-like crudity of a Don Imus or a Michael Richards. Context is now king.
This disastrous regression in race relations is the natural dividend of liberal identity politics, most recently brought to the fore by the wife of the first “black President”, the first “transracial” black Presidential candidate, and the “prophet” and “healer” Reverend Wright.
Barack Obama is on his way to a McGovern candidacy.
03/29 02:10 AM
Yea, I know, there are a lot of Americans like yourself who would elect someone like John McCain, who wants to keep finding foreign wars of choice, wasting billions and spilling the blood of thousands.
I recognize this and frankly if thats how America votes then America deserves no better than McCain.
From a very personal standpoint, I”m not terribly interested in seeing my cap gains tax double while house flippers and 1031 types pay nothing, thank you very much.
Talk about short sighted. The government has flushed trillions of borrowed dollars down a Middle East toilet fighting an unwinnable war with no end in sight, and you are worried about your cap gains? LOL. You will spend more money in dollar depreciation, higher taxes, lesser services. interest on government debt, reduced investment opportunity, more burden on your children (if you had any) etc. etc. than you could pay in cap gains in 100 years. Talk about penny wise and pound foolish!
And you feel great about McCain and Rev, Hagee?
Sauce for the goose, chick?
http://www.youtube.com/watch?v=4qNi7tPanUA&feature=related
Personally, I dig Hagee. And I’m nowhere near being alone.
I don’t agree with everything Hagee says, all the time, but he does stand for uncompromising Truth, which is a refreshing breath of air today in a country where morality and decency seems to be subject to wild swings of interpretation.
“he does stand for uncompromising Truth, which is a refreshing breath of air”
Hagee despises Catholics and the Catholic Church, likes to refer to the pope as the whore of the Vatican, and other attractive remarks. Blano, you’re free to hate Catholics and their church, but describing that hatred as “a refreshing breath of air” seems unnecessary.
I don’t hate Catholics, which is one of the areas I disgree with Hagee…..the intensity of his dislike of Catholic theology. And he doesn’t actually “hate” Catholics worshippers either IMHO.
He’s not afraid to point out errors in Catholicism and how it’s leadership does the flock wrong, no matter how politically incorrect it might be. Nor the truth as it pertains to the Lord. That’s the refreshing part.
Watching the parade of apologists for Rev. Wright’s hatred—“garlic noses”;
This sentiment of Reverend Wright has presented a dilemma for me: Am I, descended from the Roman slave masters on the Italian peninsula, not permitted to vote for Mr. Obama if he is my choice in November?
hmmm…sounds to me that Mr. Obama does not want the vote of Italian-Americans. Oh well, maybe I can figure it out better after I go eat a garlic sandwich.
(With a salami milkshake chaser.)
McMansion owners aren’t happy about this.
“LOCKPORT — The city, schools and other taxing districts together would reap millions of dollars in financial benefits from the warehouse and office complex planned for land at 143rd Street and the tollway, Mayor Tim Murphy said.”
http://www.suburbanchicagonews.com/heraldnews/news/867212,4_1_JO29_LOCK_S1.article
Check out this consistently upbeat individual about the Raleigh, NC market. Someone should inform him that inventory levels are appreciating at 100-200 units per week with no end in sight. The triangle is late to the housing bubble bursting, but that just means their particular variety of pain hasn’t even begun yet.
http://www.city-data.com/forum/raleigh-durham-chapel-hill-cary/293173-why-central-nc-better-than-any.html#post3290756
This board troll is a frequent poster and is likely an employee for a local homebuilder.
I am posting this in its entirety because it has been difficult to log onto this blog for the last month.
Michael Pettis is a professor at Peking University’s Guanghua School of Management.
“Things started getting very difficult with the internet about six months ago as the great firewall got tighter, but in the past few weeks internet access has been far more frustrating than it has ever been during my over six years living in Beijing. It takes me hours (literally) to post anything on my blog. My Peking University students tell me that they waste two or three hours a day more than they used to trying to access information on the internet. When I ask them why it has become so difficult, they tell me that there are a lot more things now that the government doesn’t want them to know – although they don’t usually specify what that may be.
So if my postings become more erratic in timing, please don’t assume that I am becoming lazy or that China’s financial markets have suddenly become less interesting. It may just mean that after too many hours of playing solitaire waiting for my blog to load, I finally gave up and went out to enjoy the rare good weather we are currently enjoying in Beijing.
Fortunately there isn’t much to discuss today except that after yesterday’s brutal beating the local stock markets surged today by around 5%. This may seem like a huge run-up to many, but I should warn you that any day the local stock market rises or falls by less than 2% my assistant, Zhang Ning, usually reports to me that “nothing happened today”. Still, as I am long B-shares, up 5% makes me a lot happier than down 5%.
The Financial Times had an interesting article today titled “Chinese exporters shun flagging dollar”. The article says that “According to Alibaba.com, the online company that matches Chinese suppliers with international buyers, the vast majority of their almost 700,000 Chinese suppliers no longer use dollars to settle non-US transactions to minimise foreign exchange risk.”
It goes on describing how Chinese companies are using different ways to index revenues so as to protect themselves from the decline in the value of the dollar. For example:
Other companies have taken more unusual approaches, such as setting their own exchange rates and therefore in effect raising prices. Xiao Zheng, chairman of Dongguan City Shima Toys in southern China, said its price quotations were valid for three months but were calculated based on an exchange rate of Rmb6.6 to the dollar.
With the official exchange rate at Rmb7.01 to the dollar on Thursday, this in effect raised prices 5.8 per cent. “We are thinking about renewing our quotations every other month and we are also going to offer quotations in euros very soon,” said Mr Xiao.
This is obviously good news. It means that Chinese exporters have the ability to re-price their goods in an environment of a strengthening RMB and it also means that they are learning how to hedge foreign currency risk. Of course given strict limits on what they are allowed to do, they are still pretty protected from reality, but the more they learn how to hedge and to adapt to declining revenues, the more likely they are to survive any sharp change in the value of the RMB. One worry, though, there is a tendency for Chinese corporations to project past price moves indefinitely into the future. For example soy prices have risen pretty steadily over the past few years, but every time there is a temporary reversal we get an onslaught of bankruptcies among Chinese soy pressers who took massive long forward positions on the assumption that rising prices can only keep rising.
Right now the great insight seems to be that the dollar can only fall against the euro, so it makes sense to enter into contracts in which future deliveries are invoiced and/or indexed in euros. This way even though the RMB is rising against the dollar, it is steady or falling against the euro, and so revenues can be more safely matched against RMB costs.
Needless to say, this reasoning is only good if the dollar falls forever against the euro. Unfortunately currency prices follow the same iron law that JP Morgan claimed stock prices follow: they fluctuate. I was at my family home in Spain last December and then in my home in New York in February, and I can say that expressed in purchasing power parity the dollar is extremely cheap against the euro. Should the dollar ever reverse part of its weakness (which I think is not only highly likely but nearly inevitable), Chinese exporters are going to get killed as the RMB strengthens against the dollar and the dollar strengthens against the euro.
Still, when it comes to risk management, experience is the only good teacher.
Today’s daily report by Credit Suisse has an interesting comment on why there seems to have been so little policy action by the government in recent weeks. Rather than summarize and comment on their argument (any good economist would have predicted that the increasing probability that I will not get through to my blog to post this entry will naturally reduce the amount of work I am willing to put into it), let me just quote the most interesting paragraph:
‘In our observation, policy decisions in Beijing are stalled, waiting for new guidelines from Wang Qishan, the new vice premier in charge of finance. We understand that officials have divided opinions regarding future policy directions. Premier Wen Jiabao and his camp place great emphasis on inflation and seek further price control and credit tightening. First Vice Premier Li Keqiang and his followers are more worried about the rising growth risk, especially in view of a possible US recession and global financial market turmoil. The division grants Vice Premier Wang Qishan the position to call for a future policy move. Wang apparently has been visiting various government departments since he was officially appointed to the vice premier post but has refrained from providing any instructions or guidance. He may remain silent and keep listening before finishing his visit of the entire organization in mid-April. Until then, we expect a continued lack of action in terms of new and substantial policy initiatives. Wang made his reputation in handling the GITIC bankruptcy and other economic/market issues during the Asian financial crisis.’
http://piaohaoreport.sampasite.com/
An interesting site for China economics. If you can log on!
Someone here mentioned Isaac Asimov today. I want to add he’s one of my beloved writers, another science fiction favorite being Arthur C. Clark who recently passed away. Asimov’s “Foundation” series was a classic in the genre, and Clarke’s “Rendezvous with Rama” I most highly recommend to readers here. I love how Asimov trashed Scientology (when most people with a soapbox at their disposal steered clear of upsetting that group) even though he knew it could open him up to nasty smear campaigns. These writers would speak their minds even if the topic was controversial, as would the Norman Mailer’s and Ernest Hemingway’s of the literary world. Not being politically correct is refreshing.
‘Not being politically correct is refreshing.’
But being deliberately UNpolitically correct is merely annoying and smacks of attention-seeking, since often the writer lacks the skills to be interesting any other way. Asimov was just a plain old fantastic writer. One of the things I most enjoy about him was the sense of wonder and excitement he always conveyed, no matter what he wrote about, the sense that ‘Wow! Isn’t this whole damn thing just so exciting and fascinating and hey! Look at that! What’s that?’
He even made silica molecules fascinating, which is not an easy feat, far as I’m concerned.
In yesterday’s Bits & Buckets, I suggested one or two ways to rebuild america’s economy. Tax policy changes and currency controls.
Major rice producers are worried about social unrest and are limiting/restricting exportation of rice.
Jump in rice price fuels fears of unrest
By Javier Blas in London and Daniel Ten Kate in Bangkok
Friday Mar 28 2008 04:15
Rice prices jumped 30 per cent to an all-time high on Thursday, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people.
The increase came after Egypt, a leading exporter, imposed a formal ban on selling rice abroad to keep local prices down, and the Philippines announced plans for a major purchase of the grain in the international market to boost supplies. Global rice stocks are at their lowest since 1976.
http://tinyurl.com/36xtxp
Saw this one for all you tiara loving ladies:
“Products of A Slightly Fevered Mind After A Long Girls’ Night Out.”
“3 I was going to throw my tiara, but it turns out to be made of popcorn. “What a cheap groom I have,” I think. He’s already changed into jeans by the time his extensive family starts playing a traditional game of “here kitty, kitty,” around the equally extensive reception grounds. I have no idea why we’re doing this, but it’s traditional.”
Webloggistics
Neil, a new hobby making popcorn tiaras.
You deal with that by making enough money to buy your own tiara
‘You deal with that by making enough money to buy your own tiara.’
Testify, txy! Tiaras are grand. I have several, as I have mentioned many times here. Now, your txy tiaras may be composed of large Bolivian emeralds and diamonds and things, whereas mine are made of rather less expensive substances, but they still sparkle prettily when I wear them kayaking, or to get the mail, or hiking, and that is the important thing, to my mind. Frogs and trees evidently can’t tell the difference between diamond and paste, and I don’t care, as long as they sparkle, so everyone in the forest is happy and merry. Just like in a Disney movie, except with more guns and cussing and sinning.
Is the Iraq war vanishing from US view?
(BBC News)
The US-led war in Iraq is now five years old. Yet it seems the American media and public are paying less attention than ever.
Coverage has declined sharply, according to a Pew Project for Excellence in Journalism study, falling from an average of 15% of news output last August to just 3% in February this year.
A separate Pew study found that only 28% of Americans recently polled could correctly identify the number of US troops killed in Iraq, compared with more than half in August last year.
FYI
The SEC abolished Mark to Market this morning for financial firms.
http://www.sec.gov/divisions/corpfin/guidance/fairvalueltr0308.htm
Wow!
Hoz,
I read the sample letter in your link. Can you explain where it says fair value accounting is suspended? Do I have to read between the lines or something?
You have to learn banker speak! (not laughing)
Fair value assumes the exchange of assets or liabilities in orderly transactions. Under SFAS 157, it is appropriate for you to consider actual market prices, or observable inputs, even when the market is less liquid than historical market volumes, unless those prices are the result of a forced liquidation or distress sale.
The operative phrase is: “unless those prices are the result of a forced liquidation or distress sale.” This means that there is no mark to market for most securities since the only transactions are at “distressed prices”.
Thanks. I read it 3 or 4 times and I still wouldn’t have figured it out without your help. One more question. You said this happened today. However, it says on the bottom of the page last modified on 3-27-08. I thought that was Thursday - unless this is banker speak again
This isn’t any kind of insolvency crisis. No particular timing involved - just happened to be the last week in March.
These aren’t the droids you’re looking for. Move along.
I think the timing is important. It is clearly being released at this time so the impact is reflected in first quarter 10Qs. I asked about whether this was released Thursday or today since one would expect financials to move upwards once this became general knowledge.
Hoz, Ive got some questions about the CNY.
1. Why are the other currency tracking tools ETF’s and this an ETN ?
2. How can rational pricing exist in the CNY if the Chinese Government sets the peg?
3. Is the only risk by how much or how long the Chinese government waits to signal the market that currency re-evaluation is forthcoming? OR is the current false shortages due to price controls the signal?
Lastly, what percentage of Regular Joe Ultra Light Sixpacks even gives a shit, in your humble opinion?
must be the dinner hour, gulp…..ahhh
just following the drink heavy and recycle method of investment andother dime for donut kitt. ka-ching
“Tell all our cients to buy bellies at 68! Mr. Valentine has set the price.”
-Randolph Duke
what about long FXP and long CNY at the same time, is that hedged risk or double plus good systemic risk?
Does this tie in to Monday’s incipient announcement?
Comment by combotechie
2008-03-29 09:20:26
There’s a saying: “If you want to learn new things then read old books.”
I agree, mostly, but there are plenty of stupid old books, too. Just one example, when reading Dante’s ‘The Inferno’ the main concept that I absorbed from this majestic and important classic was: ‘Sweet Jeebus! This guy needed to get a freakin’ life!’
Too late for that, of course. I bet he’s presently boring the fook out of everybody on the Eighth Circle, while Cerberus sits there panting and scratching fleas and wishing he could turn this boring dead Italian guy into three boring dead Italian poet portions, one for each dog head.
The subject of books is on my mind because I’m sorting some bookshelves this weekend. If I don’t post for a few days somebody please call the rescue crew to come search for me, because I could have been buried in a bookslide.
Do you have an Umberto Eco anti-library as described in Taleb’s Black Swan (namely, a library that contains books on things you do _not_ know)?
LOL - I don’t know if you’ll see this, but - get rid of some of your books at paperbackswap.com. Very nice bunch and you can get some new books.
Another old stupid book: Jane Eyre. (I’m a bit ashamed to say I loved this book when I was teen…) Plot summary: Loser chick (after much childhood angst) gets a job as governess. Hooks up with annoying rich guy, who ooops, forgets he’s already married to a crazy lady he’s locked up in the attic. Crazy lady burns down castle,killing herself and blinding annoying rich guy. Loser chick marries annoying rich guy after all and everyone lives happily ever after.
Take home message: All books come to end and when they do you’ll need to write a book report for high school english class.
I just found the new ad for Delta airlines:
http://www.youtube.com/watch?v=IU7VTJA0dNo
I’m off-topic again today, but can’t resist another reading recommendation. I’m sure some here are familiar with Jerzy Kosinski’s “The Painted Bird”. That book really shook me up as a kid, and later in life I returned to another Kosinski book, “Cockpit”. If you haven’t read it yet, lucky you. I’ve grown tired of people going on and on about “The Kite Runner”, it was a good read, but there are many better books to be had. Enjoy the rest of the weekend (hopefully reading and relaxing) everyone.
ha, ha..
http://flagstaff.craigslist.org/rfs/622942948.html
This Realtor has been dumping oodles of ads on craigslist ever since he discovered it was f-r-e-e.
zillow for that.
Land was sold for $25K back in ‘99, house first sold for $150K in 2000, $200K might be reasonable, but last sale was $265K.
Nice looking property but not 268K nice. How many more places are like this for sale in off-the-beaten-path AZ?
Everybody catch this from the NY Times the other day:
“houses are almost perfectly engineered to trick owners into overvaluing them”
I know it’s 3 days old but it’s worth checking out:
http://www.nytimes.com/2008/03/26/business/26leonhardt.html?em&ex=1206936000&en=9a2eade6d2e8bee5&ei=5087%0A#
Enjoy your weekend!
“Delusional optimism” blamed for Heathrow Airport fiasco. Any lessons to be learned here?
VFIIX GNMA fund what do you think?
you simply will not find safer dollars that pay this rate.
As long as the ten is moving lower, this is gaining value. Housing is loosing value, and will force the ten lower for a short time, probably another year at least. It is lockbox, Aunt millie used to be in Muni’s, then treasuries, now she headed to Grandma Ginny.
I had a grandma Virginia, I think of her often.