A Fair Question On The Minds Of Many In California
The County Sun reports from California. “Only two houses in the JP Ranch project have been sold, but its developer remains optimistic. Only 300 of the 750 houses planned in JP Ranch have been built, but Mayor John Chlebnik remains optimistic. ‘I don’t know when (the current housing market) will turn around, but it’s not going to last forever,’ he said.”
“Considering the state of the housing market, the development is performing well, said Wayne Simmons, owner of Calimesa-based Simmons Construction. ‘Interest rates are the best they’ve ever been, and prices are as good as they are going to get,’ said Simmons, who has built custom houses in Redlands, Yucaipa and Calimesa.”
“Houses in JP Ranch cost $329,000 to $600,000. ‘If it wasn’t a conflict of interest for me, I would be interested because they’re top-of-the-line,’ Chlebnik said of the homes.”
The Desert Dispatch. “The recent number of foreclosures in the Barstow area has tripled compared to last year and local real estate agents expect to see that number increasing in the next several months.”
“‘A lot of people held on until they realized they just couldn’t hold on anymore,’ said broker Barbara Krommenhoek, who specializes in selling foreclosed properties. ‘If you needed to sell or wanted to sell you already did.’”
“Many of the foreclosures that her firm sells belonged to out-of-town landowners who bought second homes as an investment while real estate prices were at their height in 2006. She said some of those landowners sold properties in Los Angeles and other urban areas where home values rose rapidly.”
“The investors bought homes in Barstow as part of an IRS-allowed property exchange to avoid paying taxes on the gains made from the price appreciation of the original property.”
“‘The market was just going up so fast. They thought they could buy something and turn it around very fast and make a quick $40,000. It was a pretty crazy market for a while,’ she said.”
“Some owners bought several houses in Barstow where prices were lower, but found that renting out the properties does not cover the outstanding loan balances.”
“Carolyn McNamara, a Victorville-based real estate broker who specializes in foreclosures, said that homes across the High Desert are being foreclosed upon, although Barstow faces fewer than Victorville and other urban areas.”
“She said she isn’t sure why the markets are so different, but said it could be because Barstow had fewer new homes than other markets. ‘Barstow’s market is holding much better than ours,’ she said. ‘I’m totally baffled myself.’”
The Valley Voice. “As new home sales continue to move along at a snail’s pace in Tulare County, officials in Visalia and Tulare are seeing fewer applications for new subdivisions as builders work to reduce the number of available lots in the two cities. And, some builders are abandoning planned subdivisions.”
“Ennis Homes just put up its 385-lot subdivision near Tulare for sale. And, it appears the Rancho Sierra 176-lot subdivision at the site of the old Sierra View Golf Course is on indefinite hold.”
“During the boom years of 2003-06, new homes were snatched up practically as fast as the lots could be developed, but today many subdivisions that have tentative approval are still fields and subdivisions that are developed remain mostly vacant.”
“As of the start of this year, there were nearly 11,000 subdivision lots approved in the two cities. Of those, nearly 6,500 are lots in already developed subdivisions. The remaining lots are those in tentative subdivisions. Ben Ennis called that a 10-year supply.”
“Jim Robinson, senior VP with McMillan Homes in Visalia said the sales of new homes have been flat this year and he expects that trend to continue into 2009. ‘Prices are down 25-30 percent. What was $275,000 three to five years ago is $200,000 today,’ he said. ‘I expect us to sell about the same as last year – 600 homes – in the Valley.’”
“Inventory stands at 1,880 in the Visalia MLS. A reason for hope, lenders who own homes are pricing them to sell. Cause of concern – there is plenty of inventory of foreclosed homes yet to come on the market. The web site Realty Trac claims Visalia has 176 homes to be auctioned and 452 bank-owned homes.”
“Sacramento-based homebuilder Reynen and Bardis, which halted new building activity last year in Tulare County, has left at least 13 homes in an unfinished condition for months now, a matter of some concern at the City of Visalia building department as the homes continue to be exposed to winter weather.”
“‘We need to get the builder’s attention on this,’ says chief building official Dennis Lehman of the City of Visalia. ‘If nothing happens, some of those homes might need to be bulldozed.’”
“A similar tale is told in Tulare. Bonnie Simoes, senior planner with the city of Tulare, says Reynen and Bardis has stopped work at is subdivision in Tulare, leaving several homes there unfinished as well.”
“In Visalia, there are half a dozen unfinished homes at the firm’s Houston Ave. subdivision. The sales office for the subdivision, dubbed the Country Club, is closed, the phone number disconnected.”
“‘In some areas our operations have been suspended,’ says Reynen and Bardis spokesperson Michele McCormick who refers to the company troubles as ‘a perfect storm of economic events.’ She says the firm’s financial difficulties are related to overall decline in the housing market nationwide.”
From ABC 30. “That foreclosure crisis is hitting the Valley hard. Dozens of new homes will hit the auction block in Chowchilla this weekend.”
“This three bedroom, two bath home has a starting price of 280-thousand dollars. That’s about 120-thousand dollars less than its previous price. And this is just one of 43 discounted homes that will be up for auction on Sunday.”
“Project manager Ginger Hoggarth says this auction will be very different than those that sell foreclosed homes. ‘They are brand new homes and you do still get the one year warranty the builder would normally offer as well as a walk through.’”
“34 new single family homes and nine luxury homes in this gated community are going up for auction with minimum selling prices starting at just 160-thousand dollars. Ginger Hoggarth: ‘This is the Milano, and it’s also on the lake.’”
“Rhett Winchell: ‘Sales may get back on track, but they may not be as quick as some builders need, so that’s why they’ll still consider the auction. Even though maybe prices have leveled out, they still need to look for something that will sell quickly.’”
“Bob Pardodi, Prospective Buyer: ‘It’s very nice, we looked at them before about a year ago, but we couldn’t sell our house in Modesto at that time, but this has come down some and so has ours, so we might be able to trade. We’ll see.’”
The Associated Press. “The end came in a blink outside the Merced County courthouse. Only six people showed up for the foreclosure auction, Janice Pimentel and her son Nick included. By chance, the Pimentels’ dairy farm was the first property offered.”
“The auctioneer, a young man in aviator sunglasses and blue jeans, read their address and paused for bids. When none came, the Joe T and Janice R Pimentel Dairy Farm, 21 years in the life of the family, officially became the property of its main creditor, a local lender.”
“‘Well,’ Janice Pimentel said, ‘that’s that.’”
“The foreclosure problems in small-town America may be even more widespread than in cities. Mobile and prefab homes make up at least 15 percent of the nation’s rural housing, and three-quarters of them were financed with installment or personal property loans rather than mortgage loans, according to the Housing Assistance Council.”
“When the owners default, it leads to repossession rather than foreclosure, and these defaults are not included in the foreclosure data, said Moises Loza, HAC executive director. ‘It’s happening all over,’ Loza said.”
“Merced County, population 246,000, underwent a housing boom over the past few years that saw developments spring up on what used to be farmland, said Rep. Dennis Cardoza from Merced. Now, in towns like Atwater, housing values have dropped as much as 50 percent, the congressman said.”
“The skeletons of houses where construction halted when the market went bust stand across a development where houses that sold for $400,000 just three years ago are now going begging at half the price.”
“Soon, the Pimentels will take their pets to the modest house Joe’s father left them, about a mile away. The Pimentels doubt their property will ever be a family dairy farm again. Maybe a developer will grab it, Janice said, ‘for when housing grows again in Merced, someday.’”
The Mountain View Voice. “Market conditions and tight money are causing some builders to shut down large housing projects here, despite relatively firm prices and brisk sales of completed homes.”
“At least two large developments have been halted or dropped so far, after the builders were frightened off by negative signs in the housing market. Two others are rumored to face problems.”
“Just east of Highway 237 near the Sunnyvale border is evidence of the trouble. At 505 E. Evelyn Ave., a maze of driveways makes its way around the huge lot but leads up to only four model homes on the corner. The other 147 have yet to be built, and there have been no signs of construction for nearly a year.”
“Dave Best, the project manager at Shea Homes, denied rumors that Shea was having trouble getting bank loans for the project.”
“‘It’s not that we don’t have the money to build it, we just have decided not to put our efforts in that particular project,’ he said. ‘When we determine the market has come back and it makes sense to build, we will continue.’”
The Sacramento Bee. “After all the intellectual assessments and recital of statistics about the subprime loan crisis, a woman from Chicago asked the question on the minds of many people in neighborhoods where so many have lost their homes. She asked the question in a setting far removed from those neighborhoods, at a California conference hosted earlier this week by the Federal Reserve Bank of San Francisco.”
“‘I want to know – how many people are going to jail?’ asked Yevette Boutall, director of a community development fund that works in lower-income neighborhoods of Cook County.”
“‘That’s how angry people are in communities,’ said Boutall. ‘They want to know how many people are going to go to jail, people who misled them and got away with it and earned money on their misery.’”
“In San Francisco at the Fairmont Hotel, Boutall’s question went unanswered for the moment. But it struck a real note about people bearing the consequences of a time when mortgages and home prices went wild.”
“Speakers at the San Francisco Fed conference uniformly estimated that 2 million households will surrender their keys to lenders in the next year or two. That was their prediction despite all the voluntary lender-government agreements, the millions of dollars for new nonprofit loan counselors and the average $40,000 to $70,000 a lender loses with every foreclosure.”
“‘I wish I had better news for you in the short term,’ said Tom Cunningham, director of the risk monitoring and analysis group at the Fed’s San Francisco bank.”
“He called the situation ‘unprecedented. We have never seen this before.’”
“What seemed new at the Fed conference was how few major ideas there are to stop it. Speakers defined the problem, defined proposals to help assure it doesn’t happen again. But they could not be encouraging about solutions.”
“Speakers from the Fed, NeighborWorks America, the Center for Responsible Lending, Colorado Foreclosure Prevention Task Force and JPMorgan Chase talked about proposed legislation at state capitols and in Congress. They detailed efforts to reach out to struggling borrowers. But the big number – 2 million households during the next year or two – didn’t change.”
“The thousands of loan modifications done so far to buy homeowners time represent the easy cases, said Cunningham. The harder work is more ‘problematic.’”
“During questions and answers, Cunningham was asked why former Chairman Alan Greenspan’s Federal Reserve didn’t step in to prevent this meltdown. Fair question, he said.”
“The Fed’s examiners did probe risky loans. But lenders told them the loans commanded high prices from investors, earned profits and had no track record of defaults.”
“‘I’m not going to criticize my colleagues,’ said Cunningham. ‘But in hindsight, I do say we should have questioned some of the assumptions they (lenders) were using and some of the variables they were relying on.’”
“‘But again, it’s difficult to tell bankers to stop doing something when they’re making a huge profit with no losses. You know, we just have to wait for it to crash before you come and tell them what they did was wrong. It sounds nonsensical, but that was reality,’ he said.”
‘We need to get the builder’s attention on this,’ says chief building official Dennis Lehman of the City of Visalia. ‘If nothing happens, some of those homes might need to be bulldozed.’
This is what we saw in Texas in the 80’s. Unfinished or abandoned new houses getting demolished. Pretty predictable, when you consider the scale of the overbuilding. And speaking of overbuilding:
‘Rhett Winchell: ‘Sales may get back on track, but they may not be as quick as some builders need, so that’s why they’ll still consider the auction. Even though maybe prices have leveled out, they still need to look for something that will sell quickly.’
These guys will undercut ever resale in the country until prices fall enough to stop them. Notice that even in the Valley Voice reports, Centex is still building hundreds of houses. They lead the market in Sacramento now, too.
I was in Visalia a few months back, and along the main drag they were busily starting construction on a 40 pack of houses, that had stalled out a year before. (leveling & electricity in, nothing more)
These 40 new additions to a glut, were needed like a hole in the head, but like the savants they are, the builders must keep on building…
I used to live in Visalia, and while the Valley leaves a lot to be desired, I felt Visalia was probably one of the nicest towns from Bakersfield to Sacramento. But, like other California cities, their city governments gave into the builders’ wishes first and residents’ concerns last. McMillin homes built a new subdivision right behind my house, added a four lane trafficway…and I sold. Not even a warning to the neighbors beforehand. I literally woke up one morning to the sight of bulldozers behind my house. These cities are getting what they deserve with the current financial meltdown and lost tax revenue.
McMillin? Are you serious? This freaking hillarious.
I thought the city was required to get public input before approving a project like that. Our elected leaders are starting to turn into tyrants, aren’t they? We shouldn’t let them.
These cities are getting what they deserve with the current financial meltdown and lost tax revenue.
In the twenty years I lived in Tucson, neither the city nor Pima county ever saw a housing development plan they didn’t like.
For decades people fought against the blading of the Sonoran desert. This is my biggest reason for loving the fallout from the housing bubble.
Look up the story of the town of Tortolita - a small group of county residents on acre+ lots tried to incorporate to keep from being swallowed by one of the two neighboring municipalities and avoid the stucco canyons that were being built left and right.
They were defeated in court on some pretty shaky interpretations, and couldn’t raise the money to further battle the developers.
“I felt Visalia was probably one of the nicest towns from Bakersfield to Sacramento”
That is like sayint Zzyzx is one of the nicest towns from Barstow to Baker.
I agree. I’ve lived in Visalia, Fresno, and Modesto. Visalia wishes it was a Day Spa on someone elses property.
Visalia is part of California’s bible belt, which extends past Modesto.
Arkies & Okies came here in droves (Grapes of Wrath) in the 1930’s, and brought religion with them.
Hard Right, politically.
When ’ssshrubery has shown up lately in the Golden State, he usually makes a beeline for Fresno.
Why wouldn’t they allow new development?
More development, more taxes, more people, even more taxes.
They are not running out of land. Only trouble maybe they expand too fast and hire too many overpaid firefighters and policemen, built too many new schools.
They bought the land a few years ago. They have to quickly build those houses and sell them (along with the land) before they lose the rest of the value in the land.
‘We need to get the builder’s attention on this,’ says chief building official Dennis Lehman of the City of Visalia. ‘If nothing happens, some of those homes might need to be bulldozed.’
Even better the US government will give money to the states as grants to buy up and rehabilitate foreclosed houses - as proposed in the bill. Hmm perhaps they will convert them to multi-family section-8 housing - some even right next to SFH in the subdivisions. That would be interesting to see.
But seriously …
There is nothing worse than seeing ugly Troll Bros. tract house McMansion monstrosities when once existed empty meadows and rolling hills and farms and streams where you once enjoyed on a lazy summer afternoon in the summer as kid with your brother.
All gone now.
This stuff is beyond simple bubbleness… The innate need for (some) men to live “away from everyone” will eventually assure us that there will be no more open space in the future. That, and simple overpopulation.
Probably one of the biggest truths out there. You know, we talk endlessly about the housing bubble, the ugly Mcmansions ( Which I detest) and so on. But you are correct: the bigger problem isn’t housing. The biggest issue is population growth.
People keep right on having kids, wanting them to have larger houses then they had, go to the perfect schools, etc etc. Out here in Cali, it seems like the hippest thing for 40somethings is to have a gaggle of kids at age 45. The baby strollers parked on porches is as common as a couple of cars in the driveway here. The housing bubble seems to have also fueled a baby bubble, where the idealism behind the “American Dream” where of course- having babies is all part of the plan.
I suppose the nasty unspoken truth is that if people really want to have a better quality of life in the future, then stop having kids. Otherwise… get it while you can and before anyone else…
That is the dumbest comment ever posted on this website to date. You my friend are a complete moron.
It’s an interesting point that you raise, jetson_boy. Has this housing bubble been the fuel for a baby boom as well? I know that we (the X Generation) are currently responsible for this “Echo Boom” generation that people are talking about. Can that be explained by this crazy house-buying momentum, which was accelerated and forced by bubble energy?
Hmmm …. Very interesting.
I’m not so sure it’s just as simple as people having too manybabies. IIRC, The US’s birth rate dropped below replacement rate a few (several???) years ago and it’s not moved significantly since. I believe most of the world’s birth trends is towards less babies per woman.
I think part of the real sprawl issue is that people are living longer and occupying relatively “unefficient” spaces as a part of that trend. For instance, my grandmother hung onto her 3 bedroom/1 bathroom rancher until she died - at least a decade after she needed (and was able to maintain) so much space. Right now there are 3 adult generations “competing” for housing: the last of the WWII, the baby boomers, and generation X. I’m not sure if we’ve ever had so many adults looking for housing all at once.
I guess what I’m saying is that there is a straight number increase, but what’s really encouraged the “pave the world” mentality is the aging of society. 10 people, 8 of whom are under 18, will probably take up 1 house/units. 10 people, only 2 of whom are under 18, will probably take up 5 houses/units at a bare minimum (at least here in North America).
Why is it a dumb comment? Kids are expensive, and many people don’t take that into proper consideration before deciding to have them. How many sob stories have we heard from “victims” who need financial assistance from the government, and almost inevitably they have multiple children. They dug their own hole - no sympathy from me.
Er…
Isn’t it a god given right to have kids?
You know, we even act as god and give refugee status to Chinese citizens who have more than one kid, while in rural China parents who can’t even get by themselves can have 3 or more and give away daughter because they won’t stop having kids until having a son.
I’m on jetson & bunniii’s side. The earth already has a human “cancer” pushing out all the wild species. Housing is one of the minor problems, water/power/pollution being major ones.
WOW! That’s got me thinking about incentives as I sell my house. I’ll throw in a vasectomy, sterilization or an abortion!!
I vote with Jetson & Jbunni. What ever happened to the idea of zero population growth? It seems we’ve morphed back to the 3, 4 and more families. And heavens forbid children should have to share a room anymore and we now need separate rooms for everything and big ones at that.
That is why I bought several acres along with my home. Pretty nice being able to walk through the woods along the creek and then back through the meadow to the house and not have to walk through any body else’s yard.
The catch: the taxes are going to force me out before too long.
The moral: If you want wide open spaces, you have to own them.
The next owner will probably bring in the bulldozers.
You can extinguish the logging rights on your land if you want. That is, if you’re willing to take the hit to its market value.
Peter Schiff is not only a genius, he’s actually the only hero to come out of all of this (along with Ron Paul):
“Those blindsided by the recent financial meltdown are now loudly blaming the free market for its failure to police its own excesses, and are calling for greater regulation to prevent future disasters. But for those who clearly observed the problems developing (in high definition slow motion) the blame can be directed squarely at the policies of the Greenspan/Bernanke Federal Reserve. As has been the case countless times in history, the free market will now pay the price for government incompetence.
In Senate hearings this week, all parties involved completely ignored the Fed’s own culpability in igniting the speculative fever. It’s as if a senior prom had turned into a wild bacchanalia, and angry parents now question why the chaperones failed to notice the disrobing or why the DJ played provocative music, all the while ignoring the bearded gentleman pouring grain alcohol into the punch bowl.
A perfect illustration of the Fed’s failure to take responsibility can be found in Bernanke’s explanations regarding inflation, which he solely attributes to the effects of the rapid increase in global commodity prices. He failed to mention that commodity prices are rising as a direct consequence of his monetary policy, which is debasing not just the U.S. dollar, but currencies around the world. Rather than accepting the blame for creating inflation, Bernanke is shifting the blame to the free market. The Senators are happy to let him get away with it as it provides more evidence to support the “need “ for more government to save the economy from the disastrous effects of unbridled capitalism.
When asked how we got into this mess, Bernanke replied that our problems resulted from an excessive credit bubble characterized by aggressive leverage, reckless lending, and extreme risk taking. Absent from his explanation was the Fed’s role in irresponsibly setting interest rates below market levels, which mispriced risk, got the party started and kept it raging into the wee hours of the morning. The expressed goal of the Fed for much of this decade was, and is, to encourage and facilitate borrowing and lending.
During his testimony, Bernanke continued to claim that Bear Steams was not bailed out as shareholders only received about $10 per share. Of course, $10 is better than zero, which is what they surely would have received if the Fed hadn’t thrown taxpayer money around. What about Bear’s creditors though? Although the collapse of Bear Stearns would have cost bond holders dearly, the bailout essentially makes them whole. Here again, the Fed creates even greater moral hazards by encouraging excessive risk taking. By bailing out lenders who extend excessive credit, the Fed simply invites more of that behavior. The free market must be allowed to properly price risk. Lenders need to know that when they lend money, whether to highly leveraged investment banks and hedge funds, or to over-stretched homebuyers or credit card users, they risk not getting paid back. By interfering with this process the Fed simply guarantees more losses and even bigger bailouts in the future.
Also, leveraged speculators need to know that it is not “heads they win, tails the taxpayers lose”. Wall Street executives amassed fortunes by making extremely risky bets. Now that those bets have soured, why is it taxpayers that have to swallow the losses? Wall Street billionaires earn their bucks on the backs of the middle class, who made little on the way up, but foot the entire bill on the way down.
While Bernanke talked about the underlying strength of our economy, he claimed necessity in saving Bear Stearns from bankruptcy as it would have brought down our entire financial system. How sound can our economy be if the failure of one investment bank could topple it? Does this now mean that no more major banks or brokerage firms will be allowed to fail? Since we routinely accused Japan of practicing “crony capitalism” what do you suppose we should call our version?
Not to be outdone in rewarding reckless behavior, earlier in the week Congress passed $15 billion in tax breaks for homebuilders, who had made their fortunes overbuilding during the bubble and unloading their shares to a gullible public. By threatening to hold back on their political contributions, these same homebuilders are awarded still more billions. The last ones we should be subsidizing are homebuilders. After all, the last thing we need right now is more homes.
The legislation also contained a provision that offers generous tax credits to individuals who buy homes out of foreclosure. While this is billed as a benefit to homebuyers, it is just another hand out to lenders, as those qualifying for the tax breaks will simply pay more at auctions as the tax breaks subsidize higher bids. The real winners are the creditors who get more in foreclosure than would have been the case had buyers not had their bids subsidized by the government.
Of course, for all the talk about taxpayer bailouts, none of the senators bothered to mention that, for the moment, no tax increases are actually on the table. Instead, the bailouts are being financed by savers, pensioners, wage earners, investors and the elderly on fixed incomes, who all suffer staggering increases in their costs of living, as the Fed uses inflation to rob Main Street to pay off Wall Street.”
Peter Schiff is not only a genius, he’s actually the only hero to come out of all of this (along with Ron Paul):
Riveting! Thanks for posting!
Great commentary. Got a link?
Peter Schiff is not only a genius, he’s actually the only hero to come out of all of this (along with Ron Paul):
Riveting. Thanks for posting!
I hate the Bear Stearns bail out even more than Peter Schiff does.
The party line is that, if allowed to fail, then Bear Stearns would have defaulted on its obligations to customers and counterparties. However, I saw a copy of their balance sheet 2 days ago, and that statement is totally false. After subtracting shareholder value and bondholder liabilities, Bear’s bance sheet was in fact positive. There was never a risk that they would have defaulted to customers or counterparties in a bancruptcy. That’s why I sent letters to all 18 members of the Senante Banking and Finance Committee.
The part that really gets me is that what the Federal Reserve did was totally illegal. They have never had the right to advance a nonrecourse loan to anyone under any circumstances. Furthermore, their decision to open a window to brokers was made illegally because they received fewer yes votes than required by law on the matter. So it’s illegal from start to finish. They shouldn’t have been lending to these guys at all, much less with taxpayer $$.
So my thing is like, when are Congress and the Supreme Court going to start enforcing the law on the White House (and, by extension, the Federal Reserve)? That’s their job! The White House has been engaging in secrecy obscured by fear mongering for far too long. Their attempts at dumbing down the American public are no longer working; we are mad. Can we impeach Ben Bernanke right along with the W?
uP periscope!
Black Swan sighted, coming into distance…
Preach it Big V. They are all a bunch of liars .
BigV,
um, balance sheet isn’t everything to a Wall St shop: credit worthiness is much more important. With reputation/goodwill, you can trade, but with nothing but balance sheet you have to liquidate at market prices.
LTCM had great balance sheet, but no short term cash, no credit, and not enough reputation to fix things. Bam! Out of business.
Same thing with Bear. Counterparties stop trading with you without collateral, you are dead. Bam! Game over.
There is a reason Goldman Sachs pays a ton of fees each year to keep physical access to $50 billion in short-term cash. Their counterparties *know* GS is good for short-term debt. Pity Bear ignored that idea.
That is the key. If BS had been forced to liquidate at market prices, then there would be new “comps” for the crap CDOs that they hold. Everyone else would have to rework their worth to take those new low prices into account, and the CDO balloon would pop, big-time. Right now the big banks are all in denial, hoping that everything will recover enough that the MBS will come back to life.
Oh don’t worry too much about Bear Sterns. There are plenty of Bears in places where no one is looking. I’m afraid they won’t be able to get them all.
Roidy
Of course, $10 is better than zero, which is what they surely would have received if the Fed hadn’t thrown taxpayer money around. What about Bear’s creditors though?
Of course, the big winners would have been the executives who received bonuses last year. They would have been forced to pay them back if Bear had gone bankrupt.
Peter should have also mentioned Bear Stearns refused to shoulder their share during the Long-Term Capital debacle… They basicially said it was none of their business if LTCM went under… Yet Bear Stearns’ CEO blamed the Fed for not intervening earlier to save BS! If Americans don’t do more to get their government to act responsibly, your country (and mine too) are going to go down the toilet….
But for those who clearly observed the problems developing (in high definition slow motion) the blame can be directed squarely at the policies of the Greenspan/Bernanke Federal Reserve.
Fleckenstein makes the same point in his recent book “Greenspan’s Bubbles.” I didn’t enjoy reading it, because it’s more of a hasty sketch or outline than an actual book (and he more or less admits as much in the introduction), and its arguments are surprisingly lazy and poorly defended, as though he pretty much expects the reader to agree with his premise from the outset. It reads more like a rant on a web site than a serious book, which is fine, but I can read that for free on hundreds of blogs.
I personally don’t buy the argument that Greenspan is largely to blame for the housing bubble. Sure, a strong argument can be made that he was incompetent for failing to recognize its existence, let alone try to do anything about it, but he certainly didn’t force thousands of lenders to make completely idiotic loans, or millions of consumers to buy insanely overpriced houses. That sort of behavior can be attributed only to the madness of crowds, and blaming one symbolic figurehead doesn’t come close to explaining why so many Americans threw common sense out the window, to say nothing of the many millions more outside the U.S. and therefore not subject to the Fed’s monetary policies.
How about the regulators who reufsed to enforce the laws and still refuse to go after the blatant fraud?
Even though maybe prices have leveled out, they still need to look for something that will sell quickly.’
Bottom!
“He called the situation ‘unprecedented. We have never seen this before.’”
Just think of all the crap lines that people were fed during the boom….the boomers are coming, everyone wants to live here, they’re not making any land anymore, new paradigm, supply and demand, blah, blah.
What is there to bail out? A mass, national delusion for the past few years?
Don’t ‘guys’ use that line when they are caught…
“honey, this isn’t what it looks like”…?
“we have never seen this before”…
We have all been to the carnival and seen the beared lady, the tall man, the short person, the people with two heads, and the animals with extra parts.
We have seen this to at another time, and NO, you msm numskulls, YOU SAW THIS COMING. You planned it, you were aiding and abetting the entire way.
“I wish I had better news for you in the short term,” said Tom Cunningham, director of the risk monitoring and analysis group at the Fed’s San Francisco bank.
He called the situation “unprecedented. We have never seen this before.”
It is hardly new that the problem is bad and can cause further declines in home prices. What seemed new at the Fed conference was how few major ideas there are to stop it. Speakers defined the problem, defined proposals to help assure it doesn’t happen again. But they could not be encouraging about solutions…
During questions and answers, Cunningham was asked why former Chairman Alan Greenspan’s Federal Reserve didn’t step in to prevent this meltdown. Fair question, he said.
The Fed’s examiners did probe risky loans. But lenders told them the loans commanded high prices from investors, earned profits and had no track record of defaults.
“I’m not going to criticize my colleagues,” said Cunningham. “But in hindsight, I do say we should have questioned some of the assumptions they (lenders) were using and some of the variables they were relying on.
“But again, it’s difficult to tell bankers to stop doing something when they’re making a huge profit with no losses. You know, we just have to wait for it to crash before you come and tell them what they did was wrong. It sounds nonsensical, but that was reality.”
*******
Nonsensical reality…
The Dumbshit Brigade strikes again!
So you were monitoring and analyzing what?
The traffic flows on Montgomery Street outside your office?
The number of patrons at Norton’s Vault for Monday Night Football?
******
BTW - Maybe I missed the coverage locally, but why does it appear the Sac Bee can cover an SF Fed Conference in San Francisco and the Chronicle cannot?
“‘I’m not going to criticize my colleagues,’ said Cunningham.”
I’ll do it for you, Tom ol’ boy. You and your colleagues suck. You didn’t do jack, and you too damn cozy with bankers to ever do anything even remotely related to oversight. You’re a joke, and your past and continuing inaction in part resulted in the largest speculative credit bubble in history forming and arguably continuing to exist well past the point it should have. Your foolishness has damaged our economy to an unbelievable extent, and I suspect that I’ll someday in my lifetime see you and your ilk strung up by the masses, and not in effigy. Burn in hell.
Front Range Bob,
You were kinda “wishy washy” about that. Care to tell us how you REALLY feel? LOL!
I hear ya’ Bob, I hear ya.
Oh, but “we’ve never seen this before” and “no one could have seen this coming”.
These guys are shameless liars. This model is only slightly more complicated than the dot.com business model. My version:
1. Borrow short, lend long
2. Pump pump pump
3. Profit! (for a few years)
4. Go down in flames, with maximum collateral damage.
Lather, rinse, repeat.
What about the Great Depression?
Do you think we should officially start reffering to the present as “The Big Down”, or do we have to wait ’till we’ve recovered from it before we give it a nickname?
Dark Cages
The Decider Record Asset Breaker ? DRAB
I vote for “The Awesome Depression”
Cause it’s better than great! It’s AWESOME!
or maybe the Helter Skelter Recession
“When I get to the bottom
I go back to the top of the slide
Where I stop and turn
and I go for a ride
Till I get to the bottom and I see you again
Yeah, yeah, yeah “
Let’s call it what it is, the “Greenspan Depression”. There’s no way he should be let off the hook for this unfolding disaster.
Re Greenspan Depression — Gary Shilling started calling it the “Bernanke Bust” four years ago, although he blamed it on Greenspan. He may have even started calling it the Bernanke Bust even before BB officially took office!
“The Dumbshit Brigade”. I like it.
BTW - Maybe I missed the coverage locally, but why does it appear the Sac Bee can cover an SF Fed Conference in San Francisco and the Chronicle cannot?
———————————–
The Chron is a dying paper, that’s why. The Examiner’s free now, right? Sad to see. The SJMN shrinking too - how about the Oakland Tribune?
Oh yeah and plus, it’s different in the City…
I quit getting the SJ Merc a yea ago after having subscribed for over twenty years. With all its downsizing it has really become a POS.
I’ve been getting the SF Chronicle since. While it’s definitely better than the Merc, hearing about no SF Fed coverage isn’t good.
Mike
“‘I want to know – how many people are going to jail?’
They all passed jail and went directly to go, and collected $200…
Lol.
The jails will be emptying due to budget constraints.
Ankle bracelets, problem solved >; )
I was going to relax at the pond ice fishing all weekend and now you have given me my homework! A booming industry
DOLD
BENDER
BEHA
Schneider Electric and on and on. Jane, No candy for you!
Wow, you are not just kidding, I just saw this on CNN
‘Interest rates are the best they’ve ever been, and prices are as good as they are going to get,’
Odd, rates still aren’t low enough for me to refinance any of the three loans I have and from what I’ve seen reports of prices dropping just keep rolling in from around the country. But I guess it’s different at the very special JP “Ranch”.
Sure that’s not the “JT Ranch?”
‘Interest rates are the best they’ve ever been, and prices are as good as they are going to get,’
The rates are great for the banks, not so good for the borrowers. Prices are still ridiculously high, though down from stupendously high.
“prices are as good as they are going to get”
– for the sellers. For us future buyers, it will be useful to wait.
Ben, it’s only 12:36 on the Pacific coast. We’ve only been up for little over a half hour
“‘I want to know – how many people are going to jail?’ asked Yevette Boutall, director of a community development fund that works in lower-income neighborhoods of Cook County.”
Unfortunately…not many…if any at all.
Unfortunately…not many…if any at all.
More unfortenately, she probably doesn’t mean the people who falsified their incomes to qualify for loans, she most likely means the people who encouraged (her?) them to do so.
Every day I see reports of mortage/UHS getting prison sentences. The New Century guys will, too. One has to push a little to make these things happen on a bigger scale.
Have you stood up at a meeting and asked this question?
When all is said and done…maybe 1% will get orange jump suit.
Case in point, a little while back you posted a story about a guy who I was familliar with who serviced the Los Feliz/Hollywood area who bought a property at 2.2 mil and flipped it for 3.6 mil in a matter of a month. They put him and the appraiser on terminal island. From what I know they could have put half the office there…nevermind quite a few others who work the area…if they shackled all who were deserving not including the borrowers and the sellers…they’d have to build a new prison or two…
“they’d have to build a new prison or two…”
Maybe they could just put a tall fence around one of those desert communities (Adelanto, perhaps) and dump the flippers out there. No A/C allowed, of course. And right by the JT farms in case they misbehaved again while in custody.
Hey, what a brilliant idea. Convert caged McMansion subdivisions into Prisons!!!! Think of the savings, and the just desserts to the JT felons who built them! Bunk up about 50 of these losers per 5,000 sq ft “prison pods”.
Yeah, and they all have to share the houses, several ‘felons’ per house. Good idea.
It would be a literal “house arrest”. Instead of those fancy security alarms warning of intruders, the alarms would go off if the JT felons tried to exit their assigned “home”! We’d rescue all the Pitbulls and Dobermans that FBers have been abandoning, and use them to guard the fenced perimeter. Out of work Realtors would ferry in supplies. I can see it now on the big screen: No Escape from McMansionVille
Hey, maybe even turn it into a reality TV show to boot?
Escape from Fontana?
Have you stood up at a meeting and asked this question?
Pitchforks and tar are not the way I generally enjoy leaving meetings.
I know. It’s amazing how vindictive a person can become once they realize that you were right and they were wrong and then you mention it again in front of other people.
I seriously have to watch what I say and around whom I say it. I was VERY outspoken on the topic of the housing bubble at my office. Most of my co-workers thought that I had gone mad and didn’t know what I was talking about. Now I have one co-worker who bought a forclosure (she can’t afford it and I told her so in no uncertain terms) as well as two/three others thinking about buying! They STILL don’t get it!
Stars End
“Have you stood up at a meeting and asked this question?”
With elections coming up, this would be a very good question to ask aspiring District Attorneys or those running for reelection.
Given the large number of “liars loans” in the past few years and the evidence that the incomes on many of those loan applications were knowingly false, there must be at least tens of thousands of easily provable cases of fraud on the part of borrowers and lenders.
Are there any DA’s willing to do mass prosecutions of mortgage fraud?
‘If it wasn’t a conflict of interest for me, I would be interested because they’re top-of-the-line,’ Chlebnik said of the homes.”
How is not being able to afford the new houses in your own town on you Mayors Salary a conflict of interest ?
HA! need you really ask…
The conflict of interest is that it’s not in his best interest to lose his @ss on one of those POS houses….
“Just east of Highway 237 near the Sunnyvale border is evidence of the trouble. At 505 E. Evelyn Ave., a maze of driveways makes its way around the huge lot but leads up to only four model homes on the corner. The other 147 have yet to be built, and there have been no signs of construction for nearly a year.”
Wasn’t this the area where the low income mobile home park was that forced everyone out for this stupid development ? Karma’s a bitch….
Yeah, but they got their money, since they sold it to the developers.
Wasn’t it also the one where rentals went up to $900 per month back in dot.com days?
Nope.
…a vacant 1960s industrial property along Evelyn Avenue in Mountain View. The company is planning to develop 151 rowhouses on that roughly 9-acre site, the former Calvac Inc. headquarters complex, at the intersection of Highway 237 and Central Expressway.
Actually, if the price isn’t out of hand (hah) This is more or less ‘good’ housing, not far from downtown MV and with loads of employment all around. It’s infill, not los banos. Still…
Single family home prices have dropped in Mountain View over the last year, from just over $1 million to $963,000. Statewide, prices have dropped 26 percent, according to the California Association of Realtors.
Dat’s a lotta moola, especially when you see what it gets you. Not for me.
“Only two houses in the JP Ranch project have been sold, but its developer remains optimistic. Only 300 of the 750 houses planned in JP Ranch have been built, but Mayor John Chlebnik remains optimistic. ‘I don’t know when (the current housing market) will turn around, but it’s not going to last forever,’ he said.”
Am I reading this correctly?
300 houses BUILT out of 750 planned with 3 out of the 300 sold?
Still out of whack! I meant 2 sold out of 300.
From Tulare in the south to anywhere within a 50 radius of Sacramento in the north, I could cite similar examples of the JP Ranch…
From small failures to the big enchilada, and everywhere inbetween.
Why is everyone the media quotes so hell-bent on remaining so freaking optimistic? Can’t we just once get a quote from someone who wants to remain pessimistic? That would be more fair and balanced, if you ask me.
Tenants are not represented.
“What seemed new at the Fed conference was how few major ideas there are to stop it. Speakers defined the problem, defined proposals to help assure it doesn’t happen again. But they could not be encouraging about solutions.”
Solution to what? Looks like everything is progressing swimmingly to me. Prices plummeting, “RE investors” panicking, poor people with bad math skills moving into rentals, Republican policy getting exposed for what it really is. What’s the problem?
Republican policy forced strawberry pickers making $20K into buying $700K homes? Hmmm must have missed that in the party’s economic plank
Republican policy first made it tempting, then made it possible, and finally encouraged it.
Not to be outdone, the Demmie policy would have allowed for pickers making $10K to move into $800K houses.
Where I remember the Repub home-ownership ideology starting was way back with Jack Kemp. He was right, of course, the slums did get better when the tenants there were helped to “own” their residences. For GWButthead, the rising rate of homeownership seemed to be a good point to focus on as the rest of our economy weakened relative to the rest of the world. I can’t actually blame any of our policy makers; the whole shebang seems more a result of the American sense of entitlement, contempt for education, admiration for scam artists, and so forth. All those uneducated people getting in line to be Donald Trump, didn’t it occur to them that there can’t be many? It reminds me of the boys in a 9th-grade math class I taught in the early 1970’s. Over half of them had “professional athlete” as a career goal. WTF????
Politicians are not born
They are excreted.
-Cicero
Ha!
Excuse me; two (2) sold.
“Carolyn McNamara, a Victorville-based real estate broker who specializes in foreclosures, said that homes across the High Desert are being foreclosed upon, although Barstow faces fewer than Victorville and other urban areas.”
to hell with that - what about Adelanto?? LOL
Adelanto, ugh. Have to pass through it every time we go to Mammoth.
…what about Adelanto?? LOL
Having just recently had the pleasure of driving from Lancaster to Barstow via Palmdale and Victorville, I am here to say that I was blissfully unaware of how frighteningly ugly these places are.
Joshua trees, bugs and litter on two-lane highways - interspersed with little burgs just a step or two above the shanty-towns I was saddened by seeing outside Tijuana forty years ago as a child.
The only tiny saving grace about the whole scene were the acres of wildflowers growing at the base of the joshua trees - and that, I believe happens about as often as a massive housing bust.
Ugly, ugly, ugly.
The wildflowers in Borego are spectacular this year. Must be the ash.
Wildflowers are beautiful this year in the desert/hi and lo because the rains finally made it past the mountains.
The bougainvillea etc have not been this abundant for years.
Glad you got to enjoy the loveliness of the desert. Will you be visiting in August?
The lower Sierra foothills are ablaze with California Golden Poppies, at an altitude of around 1,500 feet…
Fields measuring hundreds of square yards, of them.
That’s because Barstow (Barstool) is all rentals, this place is the end of the line for ever welfare sucking trash, gangbangers, lowlifes , sex offenders, drug dealers and anything else you can think of. A few years ago they had a article in the paper that basically said if they built better houses better people would live in Barstow. The goal in Barstow is to GET OUT of Barstow. Adelanto is the new South Central LA in the High Desert, a lot of gang on gang shootings with crime going up and up and up…..
How about Boron? The name itself couldn’t be sillier — a combination of boring and moron. I passed through there (very quickly) on a camping trip or two, and it looked like the pit of hell.
“Boron”. That’s the joke insult that my ex-boyfriend and I used to call eachother. I’d be like “Boron”, then he’d be all “Boronette”. Funny.
Boron and Trona, two of my favs. Boron is where they mine borate for Borax. Not kidding. I remember as a kid having a picnic lunch at the tiny park on the side of the road and the dust particles so thick that it blocked out the sun.
“That’s because Barstow (Barstool) is all rentals, this place is the end of the line for ever welfare sucking trash, gangbangers, lowlifes , sex offenders, drug dealers and anything else you can think of. A few years ago they had a article in the paper that basically said if they built better houses better people would live in Barstow. The goal in Barstow is to GET OUT of Barstow. Adelanto is the new South Central LA in the High Desert, a lot of gang on gang shootings with crime going up and up and ”
There are no jobs in barstow except low paying tourist-oriented retail to bring in better people. I have also seen the types of folks living in another dreg desert outpost town, Mohave, and they are exactly the types u describe for barstow. Pure lowlife trash of all ethnicities. I also have seen the types of welfare section 8′ers with their gangsta kids out in victorville and indeed they are S Central LA expatrates. I actually think that these hi-desert areas are more dangerous than inner LA now.
I was flying back to Seattle from LA last Thanksgiving, when I asked the kid next to me if he’d come down to LA to visit relatives. Nope, his father had been murdered in Barstow, and he had flown down for the funeral. His father was stabbed 27 times, if I recall correctly. Scared the crap out of me.
“Carolyn McNamara, a Victorville-based real estate broker who specializes in foreclosures, said that homes across the High Desert are being foreclosed upon, although Barstow faces fewer than Victorville and other urban areas.”
This lady is smokin crack! Barstow has fewer foreclosures because it is a tiny little stopover on way to vegas. There just isn’t that many new homes put up there because the entire polulation is less than 2000. Vicvtorville-adelanto-apple valley- have 1000 times more homes than little barstow and naturally more foreclosures.
Bartow is known for its outlet malls,,which is about the only jobs there, along with the 50 motels & fast food chains. It is about equal distance from LA basin and las vegas ,3 hrs drive from LA/OC(in normal traffic), 2.5 hrs from Vegas. Both estimates assume going 75 mile per hrs average speed. It is located in a quite barren desolate desert and is 110% -120% in summer.
Just heard our receptionist telling one of the engineers here that she and her boyfriend are looking to buy a house, and have their eyes on a particular one in Redwood City. Price: $725k. Her previous job was at Starbucks; I’m fairly sure they don’t pull in $250k between them. Irrational exuberance is still very, very strong in the Bay Area.
Quote: “But we think it’s worth a lot more than that.”
All they need now is a lender who thinks it’s worth a lot more than that.
Your post was a fine way to end the work week and begin anticipating my one Friday night beer.
Well when you discover the details of the transaction please share with us in order that I may raise another microbrew in receptionist’s direction, and wish her and BF the best of luck.
?
I love my one Friday night beer. Even better than my one Thursday night beer, Wed. night beer, and so on. I’m by no means an alcoholic, or even drink that much for that matter, but my goodness, have you tried Boddingtons? I was recently turned on to it and now it’s hard to drink anything else. Really amazing stuff.
Given this economy and its general direction, I am amazed that we are not all screaming alcoholics. JMHO.
“… I am amazed that we are not all screaming alcoholics.”
Speak for yourself.
Boddie’s on tap == heavenly nectar.
“My wife drove me to drink, it is the one thing I am indebted to her for.”
W.C. Fields
I only have one beer with each lean cuisine I eat. It takes a lot of lean cuisines to ease my hunger.
“Boddie’s on tap == heavenly nectar”
Oooh… where can you get Boddington’s on tap? Please tell me “sm” stands for “Santa Monica”.
“Boddingtons…the Cream of Manchester”
Delicious!
Not quite as good as a well-poured, fresh, properly stored pint of Guinness, but as that’s rarely available on this side of the pond, Boddy’s is a nice alternative.
I have never tasted better than that available at a brewery. I remember Olympia beer during the tour. It was fantastic. Something about fresh beer that beats bottled beer with the pasteurization and additives!
Unless the beer is just outright screwed up, I would suspect that any fresh beer has got to be better.
ohhhh I love beer! My favorites are according to Country:
Belgian: Gulden Draak, Pirrate, Chimay
Germany: Spaten, Weltenburger
Russia: Baltika
Canada: Unibraue beers: La Fin Du Monde
USA: Depends, there are so many, but a few that stick out are: Sierra Nevada porter, Lagunitas, and believe it or not- Old Milwuakee.
I am a Made in America freak but oh how I love a Crown on the Rocks!
Dogfish head numba one
GI numba two
Boddington’s is one of my all time fav’s. I usually wind up with guinness at the bars, because they have it. But when I’m picking up a six pack for home, Boddington’s and Smithwick’s are my faves.
I have to second the vote for Dogfish Head. The Raison d’Etre and the various IPAs are amazing. Too bad it’s so freaking hard to find in California these days. Thumbs up to Piraat, Gulden Draak, and Fin du Monde as well.
I’m just back from my company’s Friday afternoon beer & snack hour. Couple of bottles of Guinness, nothing special, but it beats a stick in the eye, or a mortgage!
If you’re gonna drink Guinness, you have to get the “extra stout”, not the draght. Extra stout is usually only available in bottles. It’s good with chocolate and nuts.
I am lucky enogh to live near the Stone Brewery. Just add (dot com)to the name and check out the site.
The Stone Old Guardian Barley Wine comes in a harmless enough looking brandy glass. I had three one night, wife drove me home, and the next day I found my shoes on the roof.
On April 7th they are having a 75th anniversary of the Repeal of Prohibition.
You can even bring in your own home brew that night.
Not that I would know anything about that.
joesixpack - do you Stone by the sixpack?
I think Arrogant Bastard, and its siblings Double Bastard and Oaked Arrogant Bastard, are some of the best beers in America. Their IPAs and Pale Ale are also excellent. I haven’t been down to San Diego since the mid-1990s, but one of these days I’ll be back, and a stop in Escondido to visit the “Stone Brewing World Bistro & Gardens” will be high on the priority list.
Er, “do you BUY Stone by the sixpack?”
Though the original question is perhaps even more intriguing, if equally inscrutable.
My favorite American beer: Trippel, from the New Belgium Brewery in Fort Collins, CO. Imported: Rochefort, a Trappist Ale from Belgium.
Actually Bunni, no. Stone by the growler. You can buy their custom 2 liter bottles, they call them growlers, and fill them there bery inexpensively. I had some last night in fact.
Gotta go now, need to find my shoes.
This is why lenders, in addition to requiring an relatively high FICO score and 20% down, should require an IQ test. Trust me, stupid people should not own real estate. My husband’s ex-wife is a perfect example. Before she sold her condo, she had two liens on it…one for not paying her condo association fees, and one because, not once, but twice, she neglected to pay her property taxes.
Think about it. She couldn’t figure out how to pay her taxes and association fees. Needless to say, no one will loan her any money to buy another home.
“Think about it. She couldn’t figure out how to pay her taxes and association fees. Needless to say, no one will loan her any money to buy another home.”
———–
This last part is surprising.
I bet she never cleaned her dryer’s lint screen, either.
Oh, did your/her husband owe her money?
Very good point Big V.. friend lost house due to ex lying to judge about not making money..$175k forgot to mention it. So friend with son, lost house.Judge was screwed.
Hope he gets bad gas in perpetuity.
Funny you mention that. I knew a Korean-American couple in San Diego. He had a PhD from MIT and she had a BACS from some UC school. She told me that when they bought a house in the late 80’s that the mortgage company demanded to see their diplomas.
Er … not that surprising.
Ages ago, my ol’ roommate was buying a place with his then girlfriend (imminently to be wife), and they wouldn’t give him a loan since he had not technically graduated. He had to get a letter than he had “finished” even if he didn’t have the “degree”.
Compare that with the
nose-picking-strawberries, er …strawberry-picking-nose-pickers, er … strawberry-pickers.OK, Pilsner Urquell, you’ve done your job now.
“This is why lenders, in addition to requiring an relatively high FICO score and 20% down, should require an IQ test.”
That is pure BS. There is little correlation between IQs and bill payment. “A high IQ may get you into Mensa, but it won’t make you a mensch.”
The bathrooms signage at my favorite Italian Restaurant:
Mensa Girlsa
They’re in for a big surprise, lenders are demanding 15% down for that price range.
Isn’t it amazing how little thought people put into trying to purchase something for three quarters of a million dollars? Or… maybe it’s not all that amazing… maybe I keep underestimating people’s capacity for doing stupid things…
The amazing part is on the lending side, not the borrowing side.
Her and her BF, huh? Why are girls these days so oblivious to the rights gained in marriage, and the rights forfeited otherwise?
If you want equal rights outside of marriage, there should be no ‘rights’ gained in marriage.
Huh?
I think its us guys realizing we are forfeiting our incomes when we get hitched.
Before you lynch me; I’m commenting as a statement of facts. The consequence of guys getting raked over the financial coals is we are less likely to get married.
Though some of us are dumb enough to have done it twice.
I knew this couple, between them they’d been married 17 (I think, maybe 18) times. But they are divorced now.
If you don’t want to marry, then fine. But girls need to realize that they are putting themselves in a very dependent situation when they have kids or move to a new place with a guy. For most women, it’s not in their nature to pack up (usually needing to hire help for the moving) and just go off somewhere new all on their own. So if you move in with a guy and he ends up being a jerk, it will take a lot of unpleasantness to get out of it. Can’t just tell him to leave. Add to that the financial burden of kids/mortgage, and you having no right to access the $$ he earns, it’s not pretty. Girls should be taught that if they are going to make sacrafices and take risks for the benefit of a guy, then he should be expected to compensate the girl for it. Otherwise, he can just use you and abuse you and he has the upper hand.
Well, I don’t know if my other post will show up or not, so I’ll just say this:
Women and children are usually the ones who suffer the most financially, either in a breakup or a divorce. The divorce is, however, less detrimental to the woman/kids than a simple breakup would have been. If you think guys get raked through the coals, you should try being the girl. The guy always comes out ahead, and has many, many more loopholes available to him than she does. At any rate, it is unwise for a female to agree to take on any financial burden (kids, mortgage, whatever) without having a legal commitment from her trusted BF.
OK, so there will be 2 posts. Fine, twice as good.
Um, I have two girlfriends, high earners, who are facing alimony payments for their soon to be ex, deadbeat husbands. But I agree, the majority of men intentionally marry women who expect to be taken care of. Sadly, it makes them feel more manly.
I’ve certainly seen some of that. However, many of the guys I know would never consider having a long-term relationship with a “needy” woman. Most of them want someone who is educated, have their own career, etc.
Me, I like smart, knowledgeable, independent, secure women, preferably smarter and more knowledgeable than me.
Allright, I’m going to encode this post. I think BJ has already figured out that I cause fights over certain issues, and is trying to moderate my posts. Tee hee. Smart one, B.
Here it is:
Mn always come out with more than wmn and kds do, whether in a breakup or dvrce. However, wmn and kds come out slightly better in a dvrce than they would have in a mere breakup. Either way, the wmn will end up with a much greater burden than the mn, but grls should be taught not to trust a boy who won’t commit himself and his income to her and the kds.
I married twice, divorced twice. Fair equity divorce first time (17 years) with me getting child custody. I raised the kids, two sons now excellent husbands and fathers (40 and 36). Second time not so equitable (13 years) ; I had a thriving business that I started before marriage, adopted a daughter (wife’s granddaughter) that is the bright spot of my life, massive alimony (13k/mo for 13 year) and child support (3k/mo until 18 or college end). Is it fair? I don’t know but it seems that the deck is stacked against doing the right thing. I love them all but it seems something is not right in this divorce scheme. Both wives said “I’m just not happy”.
‘Just heard our receptionist telling one of the engineers…. ‘
Aprils Fools was a few days ago. Come on.
I swear I’m not making it up. I actually had to get up and walk out of the room to prevent myself from commenting in harsh terms, something along the lines of “that’s interesting, as a quite senior engineer I can’t afford a $725k house - you must have a pretty awesome salary?”
Did I mention that she has two kids with another one on the way? There, I just did.
It’s always a perfect storm, isn’t it?
“‘In some areas our operations have been suspended,’ says Reynen and Bardis spokesperson Michele McCormick who refers to the company troubles as ‘a perfect storm of economic events.’ She says the firm’s financial difficulties are related to overall decline in the housing market nationwide.”
Yeah, it appears to be the new excuse (usually followed by “no one could have seen this coming”). It’s lame and I’m getting really tired of hearing it. How about they just own up to their mistakes?
Although it is a little tiresome, I do think the Perfect Storm describes the housing market right now. And it hasn’t even crashed ashore yet.
“‘But again, it’s difficult to tell bankers to stop doing something when they’re making a huge profit with no losses. You know, we just have to wait for it to crash before you come and tell them what they did was wrong. It sounds nonsensical, but that was reality,’ he said.”
Reality is nonsensical, truth is falsehood, war is peace. Some of those banksters need to do some time at the Ministry of Love.
Unfortunately, the next batch of young banksters will be along in a few years to do it all over again. This game is so old that there doesn’t seem to be any way to remove it from the human condition. The losses alway come. At least building houses is productive. Financial weapons of mass destruction indeed. Debt bombs for everyone!
“As values fall, owners of 41,231 Santa Clara County homes to get tax relief
HOMES IN SANTA CLARA COUNTY GETTING A CUT IN ASSESSED VALUE”
Who said its different here in the Bay Area?
I’m sure my Kool-Aid drinking co-workers would be quick to assert that most of the foreclosures are all in marginal sections like Gilroy and the ghetto sections of San Jose. They’re probably right, for now, but give it time. The Bay Area seems to be lagging SoCal by about six months to a year, but we’ll get there just the same.
“and prices are as good as they are going to get….”
Brave words for a man sitting on 298 unsold houses in Calimesa.
Don’t forget about the 450 additional lots. That stuff doesn’t get financed for free.
If prices are as good as they’re going to get, it’s time for him to put his money where his mouth is and build the other 450.
Realtor Bill Jordan of Visalia says the “market is pretty strong right now with the decline in the new home inventory, serious sellers, low interest rate and affordable prices.” His company, Jordan Link, “is doing 80 to 100 deals a month now.” Jordan says the Visalia MLS inventory has dropped about 10% from last fall. “We’re also seeing a lot of first time home buyers.”
Jordan says “investors have come back into the market now that they have sensed a bottom.”
This is the same Bill Jordan who owns the largest Century 21 outfit in the Central Valley who said in early 2006 that there was no housing bubble and that prices would keep going up…even while evidence by that time was strongly showing declining prices. This guy should be sued and put in prison. Why do the media keep getting quotes from these talking heads who have done nothing but contribute to the financial malaise currently engulfing America? Realtors are no heroes, they’re scumbags.
Bill meet Debbie.
Debbie Gleason, sales associated for Mangano Homes in Visalia, agreed sales remain flat.
“I’ve sold three houses since the first of the year. We were selling two a week during the boom times – in the good old days,” said Gleason. “Last year, we closed 13 houses. Two years prior, we closed 30 each year.”
Hah, the local hotshot realtor who sends out periodic glossy postcards boasting of recent sales in the area, well, these days, these postcards now say “In Escrow” never “Sold.” In Escrow is a form of RE purgatory.
3 knife-catchers down, 297 to go….
“‘That’s how angry people are in communities,’ said Boutall. ‘They want to know how many people are going to go to jail, people who misled them and got away with it and earned money on their misery.’”
This also applies to the huge Wall Street bonuses paid out just prior to the massive loss/write down disclosures…
“people who misled them”
Your brother the Realtor, your cousin the Mortgage Broker,
and your best friends wife Appresior….
And you who mistated your income and jobs….
thats who!
Here’s my fantasy: The FBI gets a database of mortgage applications from the past six years then queries it via SSNs with tax returns from the IRS. Compare the reported incomes on the mortgage apps with what was reported to the IRS. If the mortgage app income is more than 20 percent higher than what the IRS was told, mark the loan as potentially fraudulent.
Then, tab up who wrote those loans. If 50 percent or more of someone’s mortgage business was potentially fraudulent under my standard, perp walk ‘em and haul ‘em to court. (The word “RICO” pops into mind here, too.)
Now, these percentages are high, but I suspect that if you went much lower, you’d double the prison population in the U.S.
Thoughts?
I’m all for it.
You don’t actually need a SSN to buy a house though. But the premise is good!
Sounds good. My only change would be to forward the lying-ass borrower’s info to the IRS.
I should say borrowers’. And that’s in addition to the lender reaming, BTW.
Big V, that is good. Alert the IRS to the findings of difference of filed taxes etc.
Just think, there would be a growth industry at the IRS for doing audits.
I don’t know though, I would hate to have that job, where everyone hates you. Bad karma. I would rather be a bug..lol
This also applies to the huge Wall Street bonuses paid out just prior to the massive loss/write down disclosures…
SEC investigations beckon.
“…Janice and Joe Pimentel, who are 52 and 58, respectively, decided to follow their families’ dairy farm tradition when they bought their 25-acre property in Atwater two decades ago. Their sons, now 21 and 30, decided not to go into the business, and the Pimentels thought they would retire one day and convert the farm into an almond orchard.
How they lost their farm, once a thriving business with some 200 cows, is not a simple sub-prime mortgage story. It has to do with a drop in the price of milk, a spike in the cost of feed, some bad luck and, yes, a five-year refinance loan with an interest rate of 12 percent.
On top of their financial problems, in 2007, Joe’s father developed cancer. With such a heavy personal and financial burden, the Pimentels could not give the farm the attention it required….”
Having a dairy operation in California has to be financial suicide. Having 200 dairy head on 25 acres, the feed cost had to be a killer. A very poor business model, I am not surprised that it went under. The five year loan at 12% is not outrageous for an ag loan and is pretty standard.
Hoz,
What is/was your GM target, did you meet it and sell, or are you still holding?
IIRC you mentioned that you bought on 3/31 before the March sales -20% were reported.
Thanks if you answer.
I do not pick tops or bottoms, I unloaded half on Wednesday and looking to buy it back a tad lower. I step bought Mar 28th (Friday). I did not buy GM for its US exposure.
I must be missing something. When did the price of milk DROP?
In parts of Australia, the price paid TO THE FARMER is less than it was 25 year ago.
“From ABC 30. “That foreclosure crisis is hitting the Valley hard. Dozens of new homes will hit the auction block in Chowchilla this weekend.”
“This three bedroom, two bath home has a starting price of 280-thousand dollars. That’s about 120-thousand dollars less than its previous price. ”
After all the carnage, and a 3/2 home in Chow-freakin-chilla is still more than a quarter of a million dollars. Even with 20% down, I would guess a family would need no debt and a household income of about $80,000 to afford that.
Yeah, but unless you work at the women’s prison, who would want to live in Chowchilla?
Ever time I go by chowchilla (pronounced chow-chill-a although you’d expect chow-chee-ya), I get a jingle in my head
chow-chow-chow-cheeya. ( chia pet commercial )
And they grow alfalfa too.
The only thing I ever remember Chowchilla being on the map for was that schoolbus kidnapping many years ago.
I’m really not interested in how a house is $X less than it was, other than to thank God that I didn’t buy when it was $X. The only thing I’m interested in at this point is how much did that house sell for in 1998 or so? That will be my guideline for eventually buying.
Today I asked some questions about buying in Morro Bay and what fraction of occupancy I could expect if I made “my” house available as a furnished rental all summer. I was told, beachfront 75%, beach-proximate 60%, mere ocean-view perhaps a good deal less. Ha ha. At that rate, and considering current prices, one would be lucky to recoup just the property tax by renting out through the so-called high season. Perhaps real economics will operate on these prices eventually…
http://tinyurl.com/5259sf
MBIA Loses AAA Insurer Rating From Fitch Over Capital (Update5)
By Christine Richard
April 4 (Bloomberg) — Fitch Ratings cut MBIA Inc.’s insurance unit to AA from AAA, saying the bond insurer no longer has enough capital to warrant the top ranking.
MBIA, the world’s largest financial guarantor, would need as much as $3.8 billion more in capital to deserve an AAA, New York-based Fitch said today in a report. The outlook is negative, Fitch said.
Fitch issued the new, lower rating even though Armonk, New York-based MBIA asked the ratings company last month to stop assessing its credit worthiness. The two companies disagree over how much capital MBIA needs to absorb losses on the bonds it insures. Moody’s Investors Service and Standard & Poor’s both affirmed their AAA ratings earlier this year.
“Just east of Highway 237 near the Sunnyvale border is evidence of the trouble. At 505 E. Evelyn Ave., a maze of driveways makes its way around the huge lot but leads up to only four model homes on the corner. The other 147 have yet to be built, and there have been no signs of construction for nearly a year.”
These homes are priced from 600-700K…and are about 1400-1500sq ft…
What really gets me is that the builders are still putting up 2000-3000 sq ft homes are still going up in Los Banos ( yea I know) for around 250,000-300,000 …..
What wrong with this picture… And you still have idoits who say home cost more to put up in CA vs other parts… what a load of BS!
http://realestate.yahoo.com/California/Los_Banos/Homes_for_sale/result.html?type=new&sortBy=time+2
Builders may charge their clients more $$ for the houses they build, but the cost isn’t any different. Illegal immigrants work for very little in CA, probably less than the wages earned by trained union workers in Illinois.
It’s the permitting process that they’re referring to, I think. Quite honestly, permits and inspections in California are out of control— my sister had her non-attached garage improvement inspected no fewer than seven times— the first one to determine if the garage were “historic,” but the last ones just plain absurd.
The Labor Department’s job cuts data is a laugh. They give complete crap in January and February, and then in March revised them down. Aren’t revisions great? You can lie to people today, and then give them the real truth (maybe!) next month, when it is considered “old news”.
I love this country. Really!
“‘It’s not that we don’t have the money to build it, we just have decided not to put our efforts in that particular project,’ he said. ‘When we determine the market has come back and it makes sense to build, we will continue.’”
In the meantime… http://tinyurl.com/5mn9lg
The County Sun reports from California. “Only two houses in the JP Ranch project have been sold, but its developer remains optimistic. Only 300 of the 750 houses planned in JP Ranch have been built, but Mayor John Chlebnik remains optimistic. ‘I don’t know when (the current housing market) will turn around, but it’s not going to last forever,’ he said.”
Neither will the sun…it WILL go supernova someday.
Actually a red giant, then a dwarf star. Its too small to explode (Nova)
“people who misled them”
Your brother the Realtor, your cousin the Mortgage Broker,
and your best friends wife Appresior….
And you who mistated your income and jobs….
thats who!
Beaumont, CA technically,
Yesterday as I drove from SbDo the back way, through San Timeteo Canyon, I stopped at the Lennar dev of Fairway Canyon, at PalmettoII.
There seemed to be very little in building going on, and I stopped in at models. The prices are $365k=375. The model had ALL the homes SOLD, those little pins. I don’t know, but is that possible?
In these times? I want to see the foreclosures in that area. That particular canyon terracing-because it is near San Andreas fault, makes for not so close homes. But, frankly, that is 2X minimum more than I think they are worth.
Anyone know how to look this stuff up? Zip 92223
Oh and the model 1 and 3 are Sold Out - get this, temporarily.
Just look on Zillow to see if they’re sold. Does Zillow have info for all zips, or just main places? I think it’s all.
Bob Pardodi, Prospective Buyer… “so we might be able to trade.”
Really, is that what people can do now, is just Swap, trade, here you take mine, and I will take your brandnew granite countertops…
Really is that possible (snicker)
Great, more posers coming to San Diego…
From Gary Kent, Mr. Foreclosure realtor, in san diego:
Lock Your Doors: Canadians Are Invading San Diego!
With the rise of the Canadian dollar (aka the “Loony”) relative to the dollar and San Diego’s plentiful real estate bargains, I’ve seen a rush of Canadians invading San Diego. They’re looking to buy homes, second homes, and investments. I’d guess those factors must make San Diego prices half of what they were a few years ago for our Canadian neighbors.
“Loony” takes on new significance in light of this post.
That’s cool. Let a bunch of Canadians become the next round of knife catchers. These fools are taking currency risk and RE risk all in one fell swoop. You lower the price of entry into any market, and you are only lowering the barriers to loss.
Patricia Norris’ family is feeling the one-two punch of higher fuel and food prices. Her husband works as messenger, driving around to deliver packages. But the job is not as profitable as it once was because rising fuel prices are eating into his earnings.
With money tight and food prices rising, Norris can no longer afford to buy beef and chicken on a regular basis.
“We buy meat only for special occasions. Like for Easter, we had a ham,” she said after a shopping trip at her local Wal-Mart in Romeoville, a mixed blue- and white-collar suburb of Chicago.
Norris must purchase only what is on her shopping list, to avoid spending more than she can afford.
“Sometimes I cry,” she said, when she passes items on store shelves she can no longer buy.
The American Dream. Buying meat during the holidays.
Her husband rides around delivering packages. Not a rich guy.
Another stunning message in the ad is the person talking said something to the effect, “this mortgage is great. One month I can pay the full payment and the other month I can pay the minimum. I can decide to pay whatever I like.” Yet another free lunch mentality. I’m sure you know of folks in your immediate circle of friends and confidants that have back breaking credit card debt and yet you hear them say, “but I only pay [insert minimum payment that does nothing to the balance here] a month!” And not only do they say this with a straight face, they are proud of it. Even the wording of the loan is Orwellian. Pay Option? How about I take option D and simply not pay at all. Seems like a lot of folks are electing to use that one. These loans should be called, “pray that housing keeps going up while I make the minimum payment so I can unload the property in this forever Ponzi scheme of housing before my mortgage recasts in 2 years” loans. A little truth in advertising there.
Ebay. residential. Westlake Trails home REDUCED $546,000 to
$1,600,000.+
At even a 1/4 of that, the overhead has got to be Huge. Unless we all move there together. 1.02 acre. mowing, pool man, you name it expensive to run, makes me think renting is going to be better.
Get that big fancy house and rent. Much much cheaper.
Just east of Highway 237 near the Sunnyvale border is evidence of the trouble. At 505 E. Evelyn Ave., a maze of driveways makes its way around the huge lot but leads up to only four model homes on the corner. The other 147 have yet to be built, and there have been no signs of construction for nearly a year.
This is impossible, as I’m assured by many acquaintances that Silicon Valley is immune to the housing crunch. The writer must have made a blunder.
The horror, the horror. Here comes the ugly RE agents:
http://www.latimes.com/news/nationworld/nation/la-na-plastic5apr05,0,3598005.story
The truth is every American who has lived their life using the “free” credit system is learning a very important lesson, that plastic card is not a gift to you because you deserve whatever you want and that you are entitled to it now even if you are broke, but is really money loaned to you at extremely high interest rates.
That big “dream” house has become a “nightmare” and you are now a slave to your mortgage and the banks, just as these greedy men intended.
What will happen is that most Americans will now rethink the wisdom of charging every useless “want” on their credit cards and striving to own a McMansion that they really can not afford. In fact a return to sanity may ensue, wherein the debtors just decide to say “screw-it” and walk away from not only their houses, but their credit card debt and their car loans and all other debts. Why? because they realize not only are they getting screwed by usurous interest rates, they can not pay back the amount borrowed and likely if they could, (by taking on even a third job? or putting their kids to work?) they will find that most of what they have purchased has fallen in value, so why bother.
The “consumers” will learn that they control the prices of goods by just refusing to pay ridiculous prices, as long as they pay what they actually can afford (demand) and not what is asked (supply), because supply is generally controlled to increase profits.
If we get really smart and return to a single income family structure, home prices could plummet -75% from their peaks everywhere in the USA. Basically, if the income is not there to sustain debt payments over a 30yr (or worse if they try tricks like 40-50yr loans which makes you really a slave your entire life, and who now will believe the lie that you can always sell it to the next dumb newbie, you will be stuck with no way out or freedom to move to a job that must be taken just to live?), the prices MUST adjust to reality.
No, our society is in for some drastic restructuring and rethinking of values and what is really important in life, which for most is family. Most of the issues we face now are a result of the worship of money over all else and the disparity of the wealthy from the rest of society. Really, who among you can say that we are the greatest nation in the world when we have more prisons than any other country, are quickly turning into a 3rd world country, and the middle class is being driven into poverty?
Dreaming that you can keep on increasing prices of any product forever is self-delusion at the extreme. Builders will face massive bankruptcies, as will mortgage lenders, and all other segments of the economy associated with this historically huge credit bubble.
Printing all the money in the world and dropping it out of 747 jumbo jets over the US will not change what is coming…the “enlightened ones” got greedy and they will get what happens as payback. What is most alarming is we may even see the entire financial system collapse, with worldwide bank collapses and freezes on withdrawing your own money! There will be chaos in the streets and violence like never before, and the “government” will be as capable in fixing it as they were during “Katrina”. Sadly, it looks like they actually desire to destroy America and the “republic for which is stands”.
We should demand an accounting of all gold left in the US banking system and pass legislation to make any money/credit creation facility like the FED held to strict limits, and borrowing by the government limited by equally strict limits with further legislation to prohibit the concept of “riders” on any new bills, and requiring succinct and clear laws that are applied equally to all, and do away with this cancerous enriching of the wealthy at the expense of the rest of us.
We can have a healthy growing economy with jobs for everyone, including builders but it will require a great leader and new ways of thinking and acting internally and externally.