Bits Bucket And Craigslist Finds For April 22, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Here’s a tip about posting; I have to check all tiny url links. So if you post 5 or 10 of those at 4 in the morning, I may not get around to checking them anytime soon, if at all. Try some html.
You just went over my head. If there is something I think someone might be interested in, I copy and paste what is in the address box at the top of the IE Explorer page. Which is that?
That’s HTML.
HTML Tutorial
I have all the tags I want to use figured out, except emoticons.
use this:
>alink=’URL Address”<what you want everyone to see or url again%gt;/a<
doh!
<alink=’URL Address”>what you want everyone to see or url again</a>
better?
The tag is called ‘a’, then ‘href=URL address’, then close the ‘a’ tag
these instructions are for emoticons? i thought they were for links…
Try the wiki for emoticons:
http://en.wikipedia.org/wiki/Emoticon
The trick is to place a space before it and the last letter of writing - most of the more common ones should appear at HTML ’smilies’
rusty html skills - sorry.
Hussman: Mortgage Crisis Just Beginning
The subprime mortgage crisis is far from over and may still only be in its early stages, says money fund guru John Hussman, who manages the $3.18 billion Hussman Strategic Growth Fund.
Hussman reckons the U.S. economy is just starting the game of mortgage defaults and has many more innings to go. He points to the number of adjustable mortgages yet to reset to higher rates — so high that many more foreclosures are inevitable.
“We appear to be quite early in the mortgage crisis, with only about a quarter of the cumulative resets having occurred. That places us near the start of the third inning, where we can expect each of the ‘nine innings’ to be about three months in duration.”
The next three quarters, he writes, are when the “the cumulative amount of resets will surge. With that surge, loan losses and foreclosures will also predictably spike higher,” Hussman notes.
Other analysts tell MoneyNews they agree with Hussman’s forecast.
“We’re hearing a cavalcade of talking heads telling us the housing market could right itself later this year,” says Robert Sheridan, a housing developer with Robert Sheridan & Partners.
“Let me be clear. It won’t. Some markets may not recover until 2010, and, in cases like Florida, a turnaround could take as long as three to five years. There is lots of grim news to come.”
Experts reckon that many homeowners with high interest rate subprime loans are staving off foreclosure by taking second, or even third, jobs, to make the money to meet the payments.
Eventually, these folks will have to give up, out of sheer exhaustion.
“These families are not going to be able to make it out of the ‘seventh inning stretch’ if their interest rates don’t stop increasing at a faster rate than their home values are decreasing,” Dr. Gary Lacefield, president of financial risk management consultancy Risk Mitigation Group, tells MoneyNews.
The refusal of many economic elites and of the financial media to recognize these issues is part of the reason policymakers haven’t responded properly to the mortgage crisis, Hussman charges.
“One of the fascinating aspects of Wall Street is the ability of analysts to provide opinions without the faintest backing from evidence,” notes Hussman.
“Among the latest topics of opinion is how far the mortgage crisis has to go. Evidently, the idea is that the recession that these analysts didn’t forecast is already over, so it is time to look across the valley on the belief that most of the write-downs are behind us.”
‘“One of the fascinating aspects of Wall Street is the ability of analysts to provide opinions without the faintest backing from evidence,” notes Hussman.’
AKA painting lipstick on pigs — a good way to confuse greater fools who might be willing to purchase falling knives when sufficiently flummoxed by conflicting nonsensical analyst reports.
Agree with it all, but I think you’re preaching to the choir here at the HBB. I guess the real news here is that the MSM is reporting this more and more openly.
This macro summing up was especially good:
—-
“Among the latest topics of opinion is how far the mortgage crisis has to go. Evidently, the idea is that the recession that these analysts didn’t forecast is already over, so it is time to look across the valley on the belief that most of the write-downs are behind us.”
I knew this would happen: we would go from “no recession, not now, not ever!” to “the recession is basically over.” while never actually being IN the recession. Ah, newspeak at its finest!
He points to the number of adjustable mortgages yet to reset to higher rates — so high that many more foreclosures are inevitable.
I see quotes like this all the time, and often wonder if higher rates are really the problem. I am guessing that the real difficulty, for a lot of home-moaners, is that the requirement to start paying principal. Or, at least all of the interest.
If a mortgage is jumping to a high rate, then there’s hope of solving that problem by putting somebody into a new or restructured loan with a lower rate. But, if they simply can’t afford the house- and could only get into it by making an interest only or negative amortizing payment, then there’s really no workout to be made; what lender is going to want to make that kind of loan in an environment of declining prices?
How many troubled loans could be saved with a “better rate”? I’m guessing the answer is “not many”.
Nice analysis.
Yeah, it stinks when people actually expect you to PAY for the overpriced McMansion that is 5x your salary! Good thing inflation is “contained” - or not!
“These families are not going to … make it … if their interest rates don’t stop increasing at a faster rate than their home values are decreasing.”
No, that’s not the problem. I agree with those above who said an interest rate fix would not be good enough. These families are not going to bother paying their mortgages unless those mortgages amortize faster than their house values decrease. My whole premise in lending has been to suppose the home-value decline would be slow enough to keep my borrowers from being Under Water.
I haven’t done a proper weighted calculation, but the median remaining length of the notes outstanding in my portfolio is 10 years. Some of the very long ones have 40% equity or more, and I don’t worry about them. The ones I worry about are Borrower (a), who bought a new house at the end of ‘04 with a down payment of about 8%, and took a 30-year mortgage; and Borrower (b), who bought a manufactured home in March ‘06 with a down payment of about 15%, and took a 20-year mortgage. Borrower (b) gushes with gratitude and is now going through a bankruptcy from which my note is excluded. Borrower (a) also went through a bankruptcy a few years back, from which my note was excluded. Both of these people are performing perfectly so far, and their health-care jobs are probably not in jeopardy, but I won’t be sorry when they get far enough away from their respective bankruptcies to replace my 9% loans with bank loans. After Loan (b), I became an HBB addict and did not make any more transactions as risky as these.
This market will never “recover” in the sense that the Bubble-lovers want; they consider “recovery” a return to option-ARM madness, no money down loans, and houses costing 5x median household income (minimum!) while appreciating 20% per year while incomes are flat to declining. That is simply not going to happen except for some bizzare hyperinflation scenario which will blow up faster than the Bubble can get rolling again.
Now, come back in a generation or two, and we’ll see the same stupidity, but I hardly call that a “recovery.”
We are moving to a new rental today, trying to avoid buying into a falling market. Rent a great house for the monthly cost of a 1br. I saw the insanity of the Bubble and did not take part, and the cost is a new move every year. Brooklyn appears to be one of the last areas to fall, and I figure that it will be a much nastier place in 2 years as ethnic tensions start to simmer. Note DC. If anyone says that there are no casualties in the Housing Bubble, they should ask my kids- working on their 3rd school. Not sure if it would have been better to lie on a loan and let it get foreclosed. We will see how valuable an 800 FICO will be in a year when prices drop 20% as NYC and Wall Street shed jobs like a stripper on a pole.
Knife, Brooklyn is just so trendy it will hang on till the bitter end, before it is overwhelmed by the Brooklyn my parents grew up in- and left in the 1970’s. Don’t take this the wrong way, but today’s “Brooklyn” population- people from Minnesota who saw Brooklyn on “Sex in the City” and moved there to go to wine bars and buy overpriced pate, will learn the brutal reality and flee like King Arthur on his hobby-horse.
I’d like to go back to Mnpls please!
I’d KILL for a steak and spun Caeser salad at Gianni’s right about now…
Where did you move to..i’m in sunnyside queens, with a great landlord.
We will see how valuable an 800 FICO will be in a year when prices drop 20% as NYC and Wall Street shed jobs like a stripper on a pole.
I’m starting to doubt that there will be that many jobs shed by Wall St. et al. Too much of our national wealth is tied up in speculation in stocks, bonds, and assets instead of economically productive activity. The government apparently will do anything it can to bail them out, even at the expense of other healthy sectors of the economy. Foreign companies will step in and hire a lot of them, and frankly most of the finance wunderkind will be eminently employable in smaller, if less glamorous careers making small and medium sized businesses profitable in lean times.
Financial wunderkin on Wall Street may have MBAs, but they know about as much about making a business profitable as I do (I’m a tax lawyer) about defending someone in a homicide case - nothing but some vague classroom memories.
And Wall Street will shed jobs. A few 10 thousands are already gone, and it spirals out among the businesses that support them pretty quickly. The Street shed lots of jobs in the last downturn. Real hiring didn’t pick up until the hedge funds started tons of hiring. The real carnage takes a while to start up, but it will come.
big gov won’t shed one “job”
Under the reign of King Chimpy McSquirmy, an ever-increasing number of “government jobs” have been outsourced to contractors.
We’ll certainly see a lot of those contractors under the gun in coming years. (Think it won’t happen? Ask someone who was in the defense industry at the close of the Cold War.) While you may be right about actual job cuts, individual departments within federal agencies implement hiring freezes when they need to.
This is all going far off the mark. The Federal Government always sheds jobs after wars. Always. And as far as wealth only being houses or finance games, the big industries now are energy and health care. Both are making and spending lots of money all over the place including lots of research and development which means long product pipelines managed by lots of high earning eggheads. High gas and health insurance costs are supporting large amounts of economic activity and will continue to do so.
“…..lots of research and development……..”
“High gas and health insurance costs are supporting large amounts of economic activity…….”
The problem is that this system is pricing itself out of business. And you can’t export any of this technical prowess, because:
A) the Chinese will just copy it, or
B) You end up giving it away to Third World countries, because they can’t afford it either.
I am a bit confused here:
- We’ve outsourced all of our real jobs overseas.
- Wall Street, which replaced many real jobs, is losing jobs.
- The government will shed jobs after the war.
So… what great source of economic growth is going to save us from a Recession Without End now that we have no jobs? Hmmm… Oops.
If Wall Street has any sense it will shed fewer people and more payroll — cut bonuses not heads. But that isn’t the way it has worked in the past.
But, but that would mean the top levels would have less money!!! That means failure! Oh, they did fail? At the part of their jobs that includes protecting investors from losses? Oh..well..they shouldn’t have to pay for it. They are important people. Can’t you tell? Just look at how much money they make…
If Wall Street has any sense it will shed fewer people and more payroll — cut bonuses not heads.
Although I agree with you, the quick fix for any business or even Wall Street is to fire first and ask questions later to improve a bottom line. The thinking behind that is people will be in need of a job and they will have plenty of job seekers to fill positions later.
That is short term thinking and it ends up costing companies market share, future growth and it impacts the bottom line in a negative way long term.
From Bloomberg this morning,as Credit Suisse announces more job cuts…
“Wall Street firms eliminated about 90,000 jobs in the two years after the Internet bubble burst in 2001, according to the Securities Industry and Financial Markets Association. The current round may exceed 100,000, according to analysts including Jo Bennett, a partner at executive search firm Battalia Winston International.”
I’m starting to think FICO scores won’t mean anything down the line. There won’t be enough people left with good FICO scores for banks to do business with. They will have to lower standards or take foreclosures out of the mix.
I agree.
I also think that if the lenders do not take foreclosures that occur during the specific bubble bust time frame out of the evaluation, the government will mandate this exclusion.
The Dodd-Frank mentality runs rampant!
Sounds like you are anything but a knife catcher, knifecatcher. Sorry about the constant moves, but it does tend to create really good “stuff” discipline. That is a good education for your kids all by itself.
I sure hope that ethnic relations are not a casualty of this downturn. Ugly on top of ugly is pretty ugly.
Stuff Discipline is super-important. I have a rule in my place: If I haven’t used it in the last year, it should probably be thrown out or given away.
I’m a woman after your own heart, Ed.
Moving, as we did, every two years as a kid (my mother had permanent wanderlust), it was part of the process to ‘purge’ everything that wasn’t necessary or treasured.
Unfortunately, The Husband didn’t live like a nomad when he was young, so has ’separation issues’ with letting go of everything from old birthday cards to duplicate CDs.
Its the narrative of our marriage - I say “Chuck it!”, he says “Noooo…its …special!?”
Still, seeing as we’re also moving in a couple of months, we’ll see if my ‘its only…stuff’ mantra has permeated his mindset.
You can already see how it is getting ugly. Many neighbourhoods, in NY boroughs,that used to be reasonably culturally and economically are becoming segregated. People who normally would not have been able to buy bought and moved out to the burbs and what is left are those that did not know about that fog in the class mortage qualification or else they would have been gone too.
meant culturally and economically mixed
My question is - why do you have to move to a new rental every year?…
We are considering a move closer to family. My wife really really really wanted to buy another house, in the Houston area. It only took her 3 hours looking at rental house rates online to get on board the “Let’s rent for awhile” strategy, should that come to pass.
That’s my question too — moving every year sounds like a logistical nightmare. And moving isn’t cheap, even if you do most or all of it yourself.
Landlords MUST have a rent increase each year…they cannot conceive of the RADICAL (old fashioned) idea of letting a tenant who always payed on time and causes no trouble to get a break.
my landlord will not be increasing my rent this year
depends who you rent from
“Landlords…they cannot conceive of the…idea of letting a tenant who always payed on time and causes no trouble to get a break.”
Not true (at least in the areas I’m involved with). Also, it’s not “giving them a break”, it’s just good business sense, especially in today’s environment. I would rather eat an increase this year rather than have excessive vacancies due to higher competition caused by vacant houses (owned by ‘investors’)…or risk someone that will trash the properties. As a renter myself, I’m paying the same rent I did two years ago, for a bigger house, with an ocean view (instead of a freeway view).
Only ever once had a private landlord raise the rent on us. One sent us a nice card saying how much they had liked us and wished us well in our new place. Our current one took in one of our ailing houseplants for the winter, and sent photos to show me how well they were doing.
It can be tricky renting with school-aged children though, especially in the suburbs. My son gets some special ed services and I feel the school must never, ever know that we are only planning on being here for the short term. Also, I feel I have to be on guard with the other parents. Not just because some people are very snobby about who their kids play with, but also because we are using a greater share of the school budget than the average student.
If you rent at a large complex then you will usually get an increase. If you rent in a small building or a house then maybe not. If a landlord only has a few units, then they will probably just be happy getting paid as a bad tenant can really hurt their finances.
Not sure if it would have been better to lie on a loan and let it get foreclosed.
If you had lied on a loan, you would be in much worse shape today as your credit would be ruined and it would be difficult for you to even rent providing the landlord did a credit check.
I’m right there with you on moving the kids around because of renting. My six year old son was afraid to make friends this year because he had moved from our townhouse where he had made friends to a new neighborhood where he started school and made friends to yet a new neighborhood and school where he’d have to make friends. He was afraid of losing his friends and having to start over again.
We ended up putting him in Catholic school and promised to keep him there. We plan on renting or buying within commuting distance to the school so that it won’t matter what school district we’re in. He and our daughter (who is starting preschool next year) will be able to make and keep their friends. We just renewed our lease so we’ll have stability for our kids for the next year, but the landlord plans on selling next year so that he can take advantage of the tax benefits. We hope prices will come down enough by next Spring to justify buying. This will be our home, not an investment.
“I’m right there with you on moving the kids around because of renting. My six year old son was afraid to make friends this year because he had moved from our townhouse where he had made friends to a new neighborhood where he started school and made friends to yet a new neighborhood and school where he’d have to make friends. He was afraid of losing his friends and having to start over again.”
Too bad “family values” don’t concern Dubya’s administration.
RE: I figure that it will be a much nastier place in 2 years as ethnic tensions start to simmer.
Roger 1 on that observation, good buddy. And don’t think for an instant the tensions will be confined to Brooklyn.
Over the weekend I went with a bud to visit his old neighborhood within the urban density outskirts of Providence RI.
All I’m gonna say, better be watching out when all the Fed welfare chits become worthless.
Suntrust Profit Falls 45%….
April 22 (Bloomberg) — SunTrust Banks Inc., the largest bank based in Georgia, said first-quarter profit fell 45 percent as the company set aside more money to cover bad loans to homeowners and builders.
I worked for SunTrust from 1979 until 1997. They used to be a very conservative bank. When I financed my $6,500 new car with them, my dad had to co-sign the loan. I didn’t have bad credit either. Actually, since this was my first purchase that involved financing, I didn’t have any credit at all.
Since then, I’ve only financed one other vehicle; the very few other vehicle purchases were used, and paid for in cash.
For what it’s worth … I have about 80 homes on a watch list accumulated via 3 different brokers. Homes are priced 350-600K. In the last 60 days or so One (1) of the eighty has gone underagreement. Doesn’t sound to promising.
Royal Bank of Scotland to Sell 24 Billion in New Shares…Needs Capital
April 22 (Bloomberg) — Royal Bank of Scotland Group Plc, the U.K.’s second-biggest lender, will sell 12 billion pounds ($23.7 billion) of new shares to investors to boost capital depleted by writedowns.
RBS fell as much as 5.7 percent in London trading today after saying it marked down 5.9 billion pounds of assets and will cut the 2008 dividend. Chairman Tom McKillop defended Chief Executive Officer Fred Goodwin, saying “our executive team has all the ability to steer the bank through this tricky period in financial markets.”
The helm may be getting a little sluggish as they merrily steer their sinking bank. How’s that “bank draft”?
Meanwhile, RBS in the US has kept pretty high in the water. I wonder how they escaped the contagion.
Horrific interest rates for savings. My little ol Chicago S&L (St Paul Federal) got bought out by Charter One a bunch of years ago, and Charter one got bought out by RBS. All of a sudden my interest bearing checking and savings account rates dropped precipitously (couple percent). I called the bank to see what they could do for me, and their answer was “nothing”. So, no more RBS for me.
Time to start a new bank, free of bum loans.
Lovely. That’s where my Canadian dollars are.
In the Royal Bank of Scotland? Are you getting RBC and RBS mixed up? RBC is doing fine as far as I can tell.
Yeah. RBS. It’s a long story.
If the story doesn’t contain tequilla, a midget and a goat then I’m not interested.
Went through my “Looney” change box from Mnpls yesterday, I’ve got ahboot $25 CDs in there. What’s that in U.S.D? $24.00?
Speaking of which, NYC, here is a must see youtube on media suppression which I found very interesting. Had some Google search engine capabilities I was unaware of as well.
http://www.youtube.com/watch?v=7iW5kOB1pmg
looks like the 7 train in flushing queens
Royal Bank of Scotland knife catchers to pay $24bn in the UK’s largest ever rights issue.
“Be calm, all is well”…
How high can it go!?
http://biz.yahoo.com/rb/080421/usa_gasoline_price.html?.v=1
Who knows - the price of gas is crazy. A few days ago, there was an interview with an ARAMCO official on CNBC. He admitted that it costs approx $9 a barrel to pump oil out of the ground. American oil companies usually won’t develop a well if the costs are over $35 a barrel.
These prices have nothing to do with fundamentals - it’s all speculation. Just like housing.
Hey, free market, if you can get the global populace at large to pay 15x your cost of production why not? So what if it’s spurring efforts to replace oil as the primary fuel source - which will leave your little corner of Hell as it was - isolated and insignificant. Oh, and by the way, your primary currency reserves will be worth nothing so you can’t maintain your country’s standard of living which will sit well with the restless populations of your citizens who have rising expectations and consumer habits. The “Depose the Sauds” Jihad crowd will have a field day…
A year ago they had said on CNBC that it cost about $3 for Mexico to pump a barrel of oil. That is one heck of a profit margin. And I thought hard liquor had a big markup.
And a DARN cite more fun!
CNBC is full of lies, and Mexican production is in steep decline.
Mexican oil production falls 7.8 percent in first quarter
Mexico’s state-run oil company said Monday that oil production fell 7.8 percent to 2.91 million barrels a day in the first quarter as current reserves dwindle.
http://www.forbes.com/feeds/ap/2008/04/21/ap4914518.html
Yeah, it might cost $3 to pump it out if you do no maintenance a la Pemex! And does the aforementioned $9 price include the sunk cost of finding it? Or the many times you DON’T find it?
Or is it the marginal cost once the well is in place and running? In that case, of COURSE it’s cheap — it better be. That’s why nobody wants to drill when it will be over $35 to pull each barrel out. Add your other costs and then if oil prices drop in future, you’re losing money.
Mexican production is in decline because of the lack of investment and expertise in developing new offshore fields.
It may well be that the easiest oil to pump costs $3 per barrel, the tougher costs around $8 and the hardest to get to costs $20+. There’s no one universal cost of production. I’m hoping more domestic oil will be produced now that oil has gotten to and will remain above $100.
This is what happens when you have inelastic demand. People have to buy gas to get to work every day, so they have us over a barrel. (Sorry for the pun).
I guess its impossible for people to trade in Hummers that get 8 mpg for Nissan’s that get 35mpg? I bet a 12 months of $4/gallon and Hummer sales will collapse and sales of the Nissan Fit will sky rocket!
Hummer (and big SUV) sales already collapsed some time ago. People respond to high prices, which is good. The next step is for the American _society_ to start responding to high oil prices - build more public transportation, reduce wasteful automobile use. I would dream if I could just get rid of one of our two cars.
On my way to work today in LA, I saw 39 Priuses. On the way to my lunchtime dental appointment, I saw 12; on the way back I saw 17.
3 years ago that would have been Hummers, Expeditions, Range Rovers and Tahoes. I saw only one of each of them today.
Things have changed, and quickly too.
Just like housing, of what relevance is cost? Supply and demand is what determines price. In the medium term, oil may go up and down but in the long term, the price is going only one way. The Saudi’s have decided that they have no need to increase supply. Whatever they don’t sell at todays price will still be there to sell at tomorrows even higher price. Saving for the future by FAILING to invest more money today, wouldn’t YOU like to be able to get that deal?
Saving for the future by FAILING to invest more money today… This presupposes that investing money will produce more oil. One alternative explanation is there’s no point in investing in played-out oil fields.
I can see the Saudi point, though. Why spend a lot more money now, just so you can sell the oil relatively cheaply this year, when by waiting you can get more money? That’s part of their national savings account, so to speak.
If ran their kingdom, I’d be reluctant to pump my reserves dry, too, unless I were well on my way to a healthy amount of economic diversification that would mean I don’t need the oil money. Obviously, that’s not the case for them now; hence, holding off on production increases (especially now, when the costs are very high due to the oilfield scramble-for-rigs) is in their best interest for the longer term. We play the National Interest card over and over — why can’t they?
Pumping costs don’t matter. That oil is not usable out of the ground, it has to be refined, and transported. That’s what costs.
“These prices have nothing to do with fundamentals - it’s all speculation.”
Good…makes it more likely that we’ll wean ourselves voluntary from OPEC’s teat.
How high can it go?
I’ve seen predictions of $180/barrel! Even China and Europe will experience chaos at that level.
My mother, stretched to the max on her mortgage in the OC, is telling me that California is already having warmer than usual weather for April and is dreading the in evitable spike in gas and electicity costs. She’s praying that it isn’t such a hot summer.
It only matters how many Euro’s or Yen per barrel! At the rate the dollar is falling we should easily see $150/barrel in a year (all other things being equal).
Good point, and if you plot the prices of gold, oil, or other commodities in Euros, the graphs do look a lot less alarming. most of us on this board (perhaps nhz excepted) just happen to have the “wrong” currency in our pockets right now. Doh! Is it an oil price problem, or a dollar price problem?
well, I think the prices of gold, oil and most other commodities look plenty alarming in Euros too …
and CPI in euroland is very close to US CPI as well.
It’s worth plotting the cost of oil per oz/gold instead of by dollar. It goes up less that way.
I travel to the EU, UK, and Israel fairly often. I used to cash in my remaining Euros, Pounds, Shekels each time I returned home (usually by applying it to the hotel bill, so I don’t have to lose anything in the exchange).
About two years ago, I stopped doing this. Now I take any leftover money home with me, to use next time! It’s inevitably worth more the next time I’m there. (Just got back from Israel…over the past year the Shekel outpaced the dollar by 17.35%)
Depends where in California. In Eureka, we’ve had below normal temperatures every month since August, and we had snow mixed in with rain on the COAST a few days ago.
I’m surprised more people don’t change their a/c and heat setups to split units. It’s more expensive up-front than baffle setups, but I suspect you can save a lot more energy that way. Here in Florida, hardly anyone buys the “two-speed” a/c units that cool or just dehumidify as needed.
Having grown up in Florida, I remember when there was no-air-conditioning at all here - in houses or cars. True, houses then were designed with more windows that opened to catch breezes and were oriented to maximize that, but it’s possible to get there again if it’s necessary.
I’m surprised to read that heat is such an issue in California except in desert areas where I’d have less-costly desert-coolers can do the trick.
Anyone remember the short-torpedo shaped “air conditioners” that were hung from the car passenger’s window? You put ice in them and the air flow spun a crude turbine that flowed cool air into the passenger compartment.
My wife was aghast that I paid $2000 to a/c my black car when I moved from Seattle to DFW. Then she couldn’t understand why it didn’t have a/c to begin with.
$118 a barrel today, $120 by the ned of the week? Any takers?
http://biz.yahoo.com/ap/080422/oil_prices.html
Ned? Who’s Ned? Sorry, ton hguone eeffoc tey…
Ha- i had to have more coffee before I could figure that one out, a little wols today…
Yes $120 very soon… and gold will break out of its funk and rapidly climb back over $1000 as well. This commodity boom will continue as long as the FED keeps devaluing our Dollar.
NAR ads coincide with monthy numbers-
Remember the NAR fantasy score heard on radio/TV where “house values double every ten years, go to housevalues.com to see more”? I haven’t heard the ad in weeks. Now it’s all over WBBR ahead of todays doomed resale numbers which are down YoY for March.
The NAR nosepickers know no bounds.
That ad ticked me off when I saw it the other day. So incorrect and so misleading to the masses of dolts who believe anything they hear.
Yeah. It’s an insidious, devious contortion of facts. If they we’re to exclude years 2000-2005, their data would indicate something dramatically different than the bull$hit they continue to babble. The ad speaks directly to potential buyers….. basically this; “fence sitters, don’t wait any longer. RE is a screaming investment and you’re a low life if you don’t own a house”.
To me all it does is reinforce the sellers denial resulting in inflexible pricing.
I know I posted this cartoon before. But I really, really like it, especially the 2005 panel where the guys’ eyes are bugging out and they look all feverish.
Cha-ching, baby!
http://www.salon.com/comics/tomo/2008/04/07/tomo/
My favorite ad recently by the scum at the NAR is one where they prattle on about how “buying a home is based on a lot more than economics” implying that you FEEL like you WANT a house, you should buy - as if a house is a piece of candy at a checkout line. Well, considering how many people basically paid nothing to get their house, I guess there’s a twisted bit of logic to that, but it is insulting for them to make such a BS claim that “economics don’t matter.” Yeah, because the taxpayers will pick up the tab for the stupid people!
After that, they made it clear that “it is a great time to buy or sell a home.” Right!
Anyone selling a very expensive item - cars for example - try to make it seem like the purchase is nothing more serious than buying a candy bar at the grocery store.
It’s a tactic designed to facilitate the sale. FB’s tend to take the bait.
My blood used to boil at NAR lies, but now I take solice in the fact that they are powerless. Let them say “the bottom is in and if you don’t buy a house in the next week, prices will double.” Who cares anymore? Because unlike the bubble days, they can’t talk anybody into buying. Lending restraint is god of home sales once again… as it should be.
Japan institutes emergency food purchases for the first time since WWII. This is what happens when you can’t feed yourself…
http://business.theage.com.au/japans-hunger-becomes-a-dire-warning-for-other-nations/20080420-27ey.html
looks like they prefer (taxpayer-subsidized) hoarding to sound monetary policy…
Uncle Buck euthanized:
James Turk at goldmoney.com points out that throughout history people living in a country whose currency is dying are the last in the world to know. I suppose it’s like the husband who is the last to know his wife is cheating on him. What’s obvious to everyone else is impossible to imagine for the cuckold.
http://www.huffingtonpost.com/max-keiser/us-dollar-euthanasia-whil_b_97371.html
Great point… Unfortunately, I would say that most posters on this board still aren’t hip to the fact that the FED is absolutely destroying the value of our currency. That, my friends, is a much bigger problem than the aftermath of this housing bubble.
To stave off the devestating effects of the housing bust, Helicopter Ben is printing dollars like a madman, trying to inflate our way out of this mess. He thinks if he prints enough dollars that he can stop the nominal price declines in housing. In theory this might work, but there will be devestating consequences from this policy.
“…most posters on this board still aren’t hip to the fact that the FED is absolutely destroying the value of our currency.”
I beg to disagree. A strong dollar is important in a consumer society, but a weaker dollar will encourage homegrown US industry. I am hoping that the longterm trend will be to bring back jobs from overseas and encourage more fiscal conservatism at both a national and individual level.
Upshot: A weaker dollar, at least for the next decade, might actually make the economic fundamentals much stronger over the long term.
Sure, and it was supposed to close that trade deficit too, but that didn’t happen did it? You can’t devalue your way to prosperity; it has never happened in the world. All you get is raging inflation and the chance to work until you die on the job. No savings, no security, no future, just Weimar USA.
So you expect the trade deficit to correct overnight? Especially with the recession coming into full swing?
The dollar has only significantly tanked in the past 6 months (though the slide has been slowly happening for years). So has the HELOC ATM money that fueled consumption for imported crap. It will take at least another 6 months to see some changes in the trade deficit, and longer for the trade imbalance to correct appreciably. It has only just started, but we are already beginning to see some earning reports in the black because of the weakened dollar.
WeimarUSA: won’t work, because WeimarUK is now official too and WeimarJapan and WeimarEU are not far behind. It is simply a race to the bottom. The only safe countries are those without a (anglo-saxon type of) central bank.
“…we are already beginning to see some earning reports in the black because of the weakened dollar. ”
Like who? Even the big multi-nationals that make their money overseas are sucking wind. (GE, CAT). Meanwhile, get ready to pay $8 a gallon for gas, and don’t complain. Remember, impoverishing the people is good for America.
AT&T, Dupont had gains today attributed at least in part to the dollar’s weakness.
I’m not saying there won’t be a recession. Even if the Fed raised rates, the dollar would weaken anyway, IMO. I’m saying that their strategy of (temporarily) allowing the dollar to drop might lead to some corporate restructuring and improve efficiency, probably an unintended side effect. If we can’t/wont raise interest rates, it might actually be a good thing for finally kicking us to get our economic house in order, which will be a good thing for younger people like me in the long term. It is just an opinion.
I don’t believe in cheerleading for ongoing unlimited consumption at our current pace. If the Fed won’t raise interest rates to make people cut back, the weak dollar will. I bet that the dollar will bounce back once we shore ourselves up and inspire investor confidence…make that IF we can make changes and take our medicine that will inspire investor confidence.
Are you kidding me? Yes a weak dollar will bring jobs back from overseas… we can be the new China and produce all of the world’s crap and export it. All for extremely low wages as we all live in poverty. Sounds like a golden plan to me.
So you actually oppose jobs coming to this country unless they are six figure salaries?
Some jobs can’t be brought back, but some can and should. You forget that the jobs left because foreigners were willing to do them cheaper than Americans. Now with a weak dollar they won’t be as economical to ship out.
We need to consume a lot less, and the weak dollar might just be the trick to finally induce some much needed belt tightening.
The weak dollar doesn’t help our country because it undermines everyones savings (the heart of capitalism) and it reduces everyones pay.
You are right that a weak dollar will FORCE local industry because we cannot afford to import. But think about the fact that our local industry will be selling our production overseas because locals will not be able to afford it any more than the chinese locals can afford the goods they manufacture for us today!
If all the world were on the same currency, then the only way for country A to “gain industry” over country B is to lower prices. This means pay cuts across the board and a reduction in standard of living until country A is equal to country B.
The exchange rates are just a way to lower real prices / wages without the sheep catching on to the game!
A week dollar in the long run may bring back manufacturing, but in the short and medium time frame it will decimate the service economy and possibly hurt manufacturing as well. People will spend more and more of their income on food and energy, there won’t be anything left for entertainment and services. I don’t see the move as a creator of jobs, I see it as the only way the US can pay off it’s debts and continue to function. It’s also a great way to help the elite during this economic downturn. They can funnel those printed dollars into bailouts for the rich and famous. Those CEO’s need their bonus.
Week dollar as “the only way to pay off our debts” when the week dollar is caused by taking on debt? So we will take on more debt (weaken the dollar) in order to pay off debt? Hrmn… something doesn’t add up.
“All you get is raging inflation and the chance to work until you die on the job. No savings, no security, no future”
I believe that is the plan..3rd world pay scale, no more pensions, SS exhausted etc etc… Get back to work,and no complaining….
I am hoping that the longterm trend will be to bring back jobs from overseas and encourage more fiscal conservatism at both a national and individual level.
That is already starting to happen. However, manufacturing jobs in China will not be coming back due to the high labor costs we have in manufacturing.
If the USA wants jobs back, then a few things must happen such as cost of living must drop to the point we are competitive with low cost countries followed by lower wages. Corporate America needs to shun the high preasure short term thinking regarding profits Wall Street put on them by focusing on stable long term growth.
The U.S. employee must start saving and stop trying to keep up with the Jones and stop collecting assets. The local, state and Federal goverments need to stop spending and become accountable for what they spend.
A weaker dollar will not help us in any way for 3 reasons:
- We produce very little of value in this nation any more - we need to import to survive.
- As long as some wage-slave in a 3rd world nation is willing to work 12 hours a day in inhuman conditions to be rewarded with bug-filled rice at the end of the day, we will not be able to compete with them with regard to labor costs.
- The crooks that run the game WANT us to all live like the described slave labor: they have NO interest in bringing productive, well-paying jobs back to this nation or doing anything to stop the race to the bottom in wages thanks to slave labor since doing that would mean they can’t have everything. It is not enough for them to be rich - you must also be poor since that is the only thing that can satisfy their endless greed.
“since doing that would mean they can’t have everything. It is not enough for them to be rich - you must also be poor since that is the only thing that can satisfy their endless greed.”
Yes, that’s it. (Rolling eyes).
Look…they are being greedy, but to say they *also* want to squash you like a bug just for fun of it is just plain silly.
The truth is, you need the populace to have at least *some* money (or fake alternatives like easy credit) so that they can continue to buy your stuff. No money equals no consumers.
Oh geez, the old printing talk again… they are extending credit, not printing. Show me data that show increased rates of actual printing. Money supply is growing, yes, but through credit, which shrinks when credit is paid back (or defaulted on) faster than it is lent.
A shrinkage in the dollar relative to foreign currencies corrects the trade deficit and helps to restore the manufacturing base here. This does not undercut savings unless the dollar falls relative to purchasable goods in the U.S. Now this is true, relative to commodities with a world market like wheat and oil. But products that are fixed to the dollar like assets (stocks and houses) and services (labor) are not greatly affected by currency exchanges.
some severely flawed assumptions here:
money supply … shrinks when credit is paid back (or defaulted on) faster than it is lent.
paying back credit or defaults, how oldfashioned - ain’t gonna happen in Bernankes world. Jingle mail and government bailouts is the new norm. When was the last time that M2/M3 growth went negative? probably in the 1930’s.
A shrinkage in the dollar relative to foreign currencies corrects the trade deficit
sure, just look at recent economic numbers and see how well that worked out.
A shrinkage in the dollar relative to foreign currencies corrects the trade deficit and helps to restore the manufacturing base here.”
Really? The USD has lost 40% of its value in the last 6 years. Why hasn’t the trade deficit shrunk? Why haven’t manufacturing jobs returned? Because in the same time period oil has gone from $20 to $119, and we import a lot of it. And you can forget about manufacturing jobs unless you can get factory workers for $2 a day. Take a look at Detroit. Your free-market NAFTA, give-me-tax-cuts mentality is a disaster for the country.
They will be paid $2 a day. But gas will be $10 a gallon. I am sure that will work fine in the New World Order.
Why should we protect the consumer at all costs? This is one of the central tenets of Bernanke-ism. Your right to a big screen TV shouldn’t overcome my right to a social security check when I retire. I’m tired of seeing the Boomers consume non-stop at the expense of their kids and grandchildren.
The reason the trade deficit didn’t shrink is because of the HELOC ATMs and artificial wealth of the stock bubble. If Greenspan et al hadn’t created bubble after bubble, we would have already had a much needed economic contraction (milder than the one we’ll have now). Selling off of foreign reserves of US dollars when our stocks tanked would have eventually lead to a more balanced trade deficit, IMO…but who knows for sure.
Whatever remedy will fix the USA, guaranteed it will be painful and unpleasant. If for the next decade it forces people to live conservatively, helps rebuild our export base, fiercely weeds out inefficiency, and keeps more of our dollars at home, then it will be good for us in the long run.
No one has a RIGHT to a social security check when they retire! Read the law, you did not pay into an account, you paid for your parents who are now dead and unable to pay you back.
“Oh geez, the old printing talk again… they are extending credit, not printing. ”
Beg to differ on that:
http://research.stlouisfed.org/fred2/series/M2
Note the recent jump. This doesn’t include debt - only cash (including savings accounts, money market, and small CDs).
Sorry Mojo:
I have been pointing out all the severe product downsizing weekly…ice cream that was a 1/2 gallon since i was a kid now 56 or 48 ounces, everybody is shaving what they can to avoid apparent price hikes…
but its hard to do on a Gallon of gas or a dozen eggs…..hmmmm LITERS anyone?
This is golden, for all the cave-living American dumbasses, who still think this country is the center of the Universe:
Americans think their financial collapse is going to take the whole world down with them. No way. Aside from the world benefiting from a bankrupt America that can no longer bomb people for sport and oil, the other major benefit of an evaporated U.S. is the removal of the globe’s no. 1 waste producer. …
The rest of world (the parts of it the U.S. isn’t bombing-for-dollars) doesn’t see any risk in a collapsed U.S. America as the brand that is America just isn’t cool any more. As an ideology, American style democracy faded as a world leading beacon along with Katrina and the Abu Ghraib photos. Add to the mix preemptive wars, expanded death penalties, NSA, FBI, CIA, wire tapping, and rigged elections.
No, the Europeans are not worried. Take the Finns for example. Typical of their high productivity European counterparts they live in a huge economic zone with a strong currency, less unemployment than the U.S. (as pointed out in a recent HuffPost Blog, America’s Government Lies — Adjusted unemployment number is 12% not 5.1%), and enjoy a higher quality of life, and higher human and civil rights too. But there is never enough of a good thing, so the Finns are looking to pass a new law that gives couples a paid week off per year to shag.
So…what…does this mean that the “dumbasses” should think that Europe is the center of the universe?
Europe - “it’s different here”?
Europe IS different … everything happens a bit later (and slower) there.
The currency devaluation game just jumped to the other side of the pond (UK), can’t be long before the EU banksters start playing the same game in earnest too. All these developed economies are strongly connected and as long as the idiots at the FED keep inflating away the others will follow - and the FED knows that. Don’t listen to people like Trichet, just watch their actions. Rates don’t matter, M3 growth in Europe is just a little behind the US and CPI is very close to the US as well (and in the UK it is maybe even worse than in the US now). At least I hope that the collapsing housing bubble will be exported to Europe mainland with all the other economic garbage.
So yes, probably a US collapse will take most of the developed world economies with it, just like they have been leading in the political arena (most EU governments approve of the Iraq War etc., War on Terror etc. despite the fact that a huge majority of the EU citizens is against it).
As to unemployment, I think Americans have no idea how good EU governments are at lying. e.g. the Netherlands has more than a million people who are ‘unable to work’ (about 10% of the workforce). They are NOT counted as unemployed but if you add them unemployment would be over 10% (most of these people are perfectly able to work, they just don’t see the need to look for work thanks to their social security entitlements).
10% that’s nothing, we have that plus prison, war, and the pursuit of many useless degrees in college to hide our unemployment.
Rich. Supersized.
http://www.realclearpolitics.com/articles/2008/04/rich_supersized.html
My heart bleeds for those poor souls… *really, I’m very sincere*
Those poor 250k-500k/year folks. They really have a rough time of it. I’m sure the millions of 25k-50k/year folks would certainly support higher taxes on themselves so the 350-500k/yr people could get a tax break.
puleeeez….
I don’t think that the 25-50k/yr folks should pay higher taxes but maybe those in the top 0.1% who now pay 10% tax on dividends, and LT cap gains should be paying a higher marginal tax rate. How come AMT doesn’t apply to the tax breaks for dividends and investment. The alternative minimum tax spanks those in the 75-500/yr range who make a living by actually going to work. AS the dollar collapses wages will eventually rise (not buying power but wages) more and more will be caught by AMT.
MEaston, that is presuming wages will rise. I’m not sure they will.
Wages will rise at about 2% per year. The cost of everything else will increase at 10% per year. This will be hailed as “progress” and GDP “growth” - which will just measure inflation - will be sky-high.
Pondering, inflation adjusted wages fell from 2000-2006, per census bureau. Considering they were “boom years” (laughing), I don’t see any real wage growth.
We don’t need real wage growth, non inflation adjusted numbers are the ones used to determine what tax bracket you are in and how much AMT you pay. Thus as the average citizen sees his purchasing power fall due to inflation, he will see the government taking a bigger adn bigger portion of his buying power at tax time. Again, how can anyone justify the tax cuts to the top 0.1% as the middle class and upper middle class fall. At some point the sheep in this country will have to wake up and get their pitch forks.
Interesting article. It states that a $200k/yr household income is the 97 %ile for household income in the US. (I imagine yearly hh income is a long-tailed pareto distribution.)
The article also states:
“That gives top earners a motive to cry poor. Another motive: The nonpartisan Tax Foundation found that in 2005, the top 1 percent of taxpayers paid 40 percent of federal income tax revenues; the top 5 percent paid 60 percent of federal income taxes.”
But the bottom pay a larger percentage of their earnings toward the total tax burden.
Why do certain folks want to hide that fact?
A Craigslist find: selling an engagement ring to make a mortgage payment.
http://charlotte.craigslist.org/jwl/650899028.html
Hmmmm . . . not a bad price.
The Moral Hazard Club
As long as this page is open your copy/paste functionality has been disabled.
DOUBLE WHAMMY
an fb with a troubled marriage
i am just a renter with an excellent marriage go figure
Sad, I guess the “engagement” is over.
Let’s Try Again
http://www.minyanville.com/articles/index.php?a=16812
Grim… Very grim.
http://www.marketwatch.com/news/story/economic-sound-bites-sound-alarm/story.aspx?guid=%7B31FDFF14%2DCBCC%2D4251%2DB2AC%2D770A72CF4651%7D&dist=TNMostRead
I think now is the time to start buying shares of Prozac and Zoloft.
Personally, I’m headed to the liquor store at the Naval Air Station and stocking up on cases of booze. Much better return on my investment…
Interesting commentary in today’s MarketWatch.
PAUL B. FARRELL
Black Swan song
Commentary: Economic sound bites sound alarm on coming financial Armageddon
http://tinyurl.com/5dj5d9
Some individuals on this board have been clamoring for home owners to pay the taxes for the bailout. Those that still own (and can afford) their home acted RESPONSIBLY just like those who rented. Why should we promote the theft from ANY group of individuals? Is theft OK as long as it isn’t from you?
Until restitution has been made, taking what is yours is ok.
“Until restitution has been made, taking what is yours is ok.”
IMO, the definition of restitution is made by some “victim” or “victim advocate”.
Who is the victim here?
Most thieves rationalize that what they are stealing truly belongs to them and so they are simply taking what is theirs.
Previously:
Re: “The Bailout Theory of Redemption”
Remember? (And as Prof Bear noted: include & add with that 34% group… those tax paying US of A renters!)
“Federal aid ‘would come at a cost,’ said Douglas Duncan, chief economist at the Mortgage Bankers Association. ‘It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well?’”
&
“A lot of activities within the private sector, hedge funds, private equity — we are not sure where it’s going and what it’s doing,” said Andrew Crockett, the former head of the forum for central banks - the Bank for International Settlements - and now president of JP Morgan Chase International.”
always-read the tax code
over 60% still own so no fears there
I agree, TechDan. I am already paying taxes. I am paying property taxes. I am paying income taxes. I bought at a little after the peak of the market, so I wasn’t completely screwed, but still, I’ve seen my home erode in value by about 20%. I am honoring my commitment to the bank (mostly because I took out a reasonable mortgage that’s not much more than renting in the same area). Why should I now, on top of all this, bail out someone? Someday I’d like to retire and before that maybe raise a family… how am I supposed to do it when the government is demanding yet more of my money?
And they wonder why I write off every penny I can during tax time.
most homeowners have profited (sometimes just virtually) from the bubble through increased equity; a government bailout will solidify this equity gain and that would be one reason to have homeowners pay tax for the bailout, instead of renters who have not gained anything and will be permanently left behind if there is a huge bailout.
But I agree that there are homeowners of all kinds of categories, some very responsible and some very irresponsible. The best (most fair) choice would be to let the market find a new equilibrium without any government interference, subsidies etc. All the artificially pumped equity would disappear, and responsible homeowners with a sound mortgage would see no harm at all. Renters would probably benefit by making housing more affordable again for new buyers (at least those with some cash). But I don’t think politicians will give this idea any chance.
I do not think a government bailout would solidify that gain. The increase in equity that you speak of resulted in an increase in taxes that HURT home owners unless they sold.
The only tax that could make sense is to tax 90% of the capital gains (minus taxes paid) on the house. This would wipe out everyone’s equity and leave anyone with a HELOC screwed, but would recapture the “money”. It would also force prices down because there could be no “capital gain” to speak of after realtors and transaction costs were paid.
The problem with ALL of these taxes is that they are immoral and are CHANGING THE RULES AFTER THE GAME STARTS. Lets say that I own my house outright and property tax rate is 0%. I grow my own food and have no income nor use any government services. The government decides to tax me 1% on my current possessions! Is that not the same thing as seizing my property from me? The government has no legitimate claim on your property!
Changing the taxes after the fact should be against the law.
Changing the taxes after the fact should be against the law.
yes, it is unfair but what if the taxes (the rules of the game) are very unfair to begin with? The major argument against changing the HMD in Netherlands (all mortgage debt and other cost associated with owning/buying a home is 100% deductible from income taxes; and gains are totally tax free) is that government has to be reliable and can never change an existing law. So according to this argument, homeowners should keep their unfair benefits and entitlements forever (most experts now agree that the current system is very unfair and subsidizes debt). That is certainly not the way I see it.
I’m sure that in the Dutch tax system a 90% capital gains tax like you suggest could force home prices even higher, because everyone would scramble to buy the most expensive home they can afford when moving. Currently only people buying on credit do that, but with such a law people paying cash would probably do the same. Not sure if it would work the same way in the US tax system though …
Role of rating agencies in housing bubble
http://www.nytimes.com/2008/04/27/magazine/27Credit-t.html?hp
The magic consisted of turning risky mortgages into investments that would be suitable for investors who would know nothing about the underlying loans. To get why this is impressive, you have to think about all that determines whether a mortgage is safe. Who owns the property? What is his or her income? Bundle hundreds of mortgages into a single security and the questions multiply; no investor could begin to answer them. But suppose the security had a rating. If it were rated triple-A by a firm like Moody’s, then the investor could forget about the underlying mortgages. He wouldn’t need to know what properties were in the pool, only that the pool was triple-A — it was just as safe, in theory, as other triple-A securities.
…
Mortgage volume surged; in 2006, it topped $2.5 trillion. Also, many more mortgages were issued to risky subprime borrowers. Almost all of those subprime loans ended up in securitized pools; indeed, the reason banks were willing to issue so many risky loans is that they could fob them off on Wall Street.
Role of rating agencies in housing bubble:
They were one of “several party’s” that acted as vectors:
3. Biology.
a. an insect or other organism that transmits a pathogenic fungus, virus, bacterium, etc.
b.any agent that acts as a carrier or transporter, as a virus or plasmid that conveys a genetically engineered DNA segment into a host cell.
3. any agent (person or animal or microorganism) that carries and transmits a disease; “mosquitos are vectors of malaria and yellow fever”; “fleas are vectors of the plague”; “aphids are transmitters of plant diseases”; “when medical scientists talk about vectors they are usually talking about insects”
http://dictionary.reference.com/browse/vector
Again, I’ll lay the blame on the government and regulatory agencies that did nothing to stop the obvious conflicts of interest. Rating agencies were selected and paid by those who wanted their crap rated. It’s the roll of government to prevent this. It’s a perfect example of what happens when there is no one regulating the game. Everyone takes their money and goes home, suddenly there is no market.
ratings agencies, like that agency that says today that the credit crunch is nearly over. People who still believe this bunch of liars are the biggest idiots on the planet.
UAL experiences heavy losses - cuts back on flying and staff.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGxz1SDzXtbY&refer=home
The airlines are dying on the vine. Maybe it’s time to start working on the railroad again.
All the live long day?
That was funny
cue kunstler
Read a little bit this past weekend on the politics behind the formation of VIA Rail - Canada’s Amtrak. There were many chances in the 1970s and 1980s to mitigate what we’re experiencing today - and it is absolutely shameless how clueless politicians repeatedly and brazenly made the wrong calls at every turn. Too many examples to list.
Anyway, who cares how high oil/gas goes - I sure don’t. $5/gal. out to make for a very interesting summer here in the big city. As for the airlines - do they need another bailout too?
Train engines are beautiful creatures…but they run on diesel, even though much more efficient than most modes of transportation. I agree we need to get the railroads back, but we also need to start figuring out other ways to move things around or ways to make/grow things closer to home.
Using hubs has been proven to be less efficient than using direct flights. The airline most known for all direct flights is doing well. Airlines that use hubs instead of or in addition to direct flights will eventually ceded market share to airlines that offer direct flights exclusively unless hubs can be marketed to travellers as having some advantage, and that is unlikely since they are associated with delays, lost luggage, and general inconvenience.
I always wondered who was the genius who came up with the hub idea? Going from Las Vegas to Phoenix through Chicago - yeah, that will work.
But if you live in Chicago, it’s awesome to get cheap non-stop flights to both Las Vegas and Phoenix
UPS/Fed Ex/DHL/etc… and then the commercial airlines figured out they could treat people like packages and they’d still fly…
The traffic between most city pairs does not justify large frequencies or even service at all. By using hub and spokes, the airline is able to fly the person who wants to go from Seattle to Indianapolis along with the guy flying Seattle to Boise, ID to a large hub (Chicago) to out to the respective spokes.
While the system is less convenient that point-to-point, it has numerous advantages. In a true point-to-point system, each passenger would pay the share of the cost to get them there. Many cities would not have service because it wouldn’t be cost effective, especially smaller cities.
My grammer and spelling have been going downhill, it’s a big surprise I won the spelling bee in the 6th grade. Sorry folks.
To paraphrase - the cost of flying only a point-to-point airline would be insane. No one writing on this blog would be able to travel by air. Would you prefer that to connecting occasionally?
I’ve always thought 400mph+ maglev trains running coast to coast and up and down the coasts would be a nice alternative to air travel. Power them with green energy.
“Power them with green energy. ”
Which is - ?
Piles of US Dollars.
Large scale train service is a pipe dream. The biggest opponents are also recepients of some of the largest gov’t handouts - the airlines.
What does that mean for all the people who bought vacation homes in Playa del Carmen and Costa Rica.
“I got a great place at a great price, I just afford the flights to go there” But it’s still a great place.
…just CAN’T afford the…
Passport? They DON’T accept creditcards
our idiot next-door neighbors have a condo on Maui; flights to and from Oregon have typically cost $500/person…They’ve always planned to retire there, because they hate the Oregon weather….but now, they’re thinking of selling the condo and maybe buying retirement property in France, where he has family.
As I said, they’re idiots.
Last week was the story about the couple selling the Hawaii house for the Cape Coral, FL one. Many of these dolts believe air travel will always be available at cheap prices. If fuel prices get high enough, only the largest cities will have frequent air service.
I heard on the radio that the U.S. wants to put the onus of taking foreigners fingerprints off the U.S. Customs, and into the hands of commercial airlines, and have them pick up the $3 Billion tab over 10 years…
These are the very same commercial airlines that are flatlining financially, currently.
It really feels like ’ssshrubery & co. are trying to rapture planes out of the skies, for some reason…
Why don’t they just take all of our rights away now and get it over with. The threat from 99.999999% of traveling foreigners is miniscule.
Banks report more disheartening results
By Louise Story
NEW YORK TIMES NEWS SERVICE
April 22, 2008
The bill for the credit mess keeps rising.
Nine months after the crisis in the American mortgage market began to tear through the financial world, the cost to banks, in terms of their own sinking investments, is approaching $300 billion. To shore up their weakened finances, one bank after another is racing to raise capital – a total of $160 billion so far.
The pain is far from over. Even the most optimistic forecasters say banks will suffer billions of dollars in additional write-downs on mortgage investments and other debt in the months ahead. The final figure for the banks’ write-downs could eventually exceed $750 billion – twice some early estimates – if the economy sinks into a prolonged recession, some analysts say.
“Disheartening”! Another great word.
I love it.
Earnings used to dissapoint, now they dishearten.
“We never see that National Food rice around here,” Lacdao said. “If it reaches a point when I can’t even feed my grandchildren, I wouldn’t think twice about jumping that high fence and breaking into that warehouse like we did in 1995.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=aTA4EeJaGgZY&refer=home
An update to a long-ago weekend topic — which type of development will get hit hardest? NPR says it is the exurbs.
http://www.npr.org/templates/story/story.php?storyId=89803663
But that is only in places that have economically viable central cities. Where the cities have been killed off, the low-commute lifestyle is no longer available.
U.S. Customs decides to skip the whole international thing and just search anybody they want:
http://seattletimes.nwsource.com/html/localnews/2004364797_ferrypatrol22m.html
Anyone who doesn’t want a cavity search is a terrarist. Real Americans love full body scans! Amurica uber alles…
Aladinane better overcareful with all of those $20 gold pieces he is alway toting around.
The Washington State consitution is said to have considerably wider privacy protections than others. As I recall “Sobriety Checkpoints” where all drivers are searched (no probable cause) were banned there.
Here is my favorite though:
SECTION 12 RECEIVING DEPOSITS BY BANK AFTER INSOLVENCY. Any president, director, manager, cashier, or other officer of any banking institution, who shall receive or assent to the reception of deposits, after he shall have knowledge of the fact that such banking institution is insolvent or in failing circumstances, shall be individually responsible for such deposits so received.
—
If you hear about a future long long long search for a new WaMu President…
The unrelenting chant on CNBC this morning…. Cash on the sidelines will be coming back into the markets.
What I don’t see (other than in a few isolated cases like BSC) is financial stock prices that reflect the billions and billions of dollars of writedowns that have already been announced with more expected for the indefinite future. Try not to catch falling knives.
Why should they, the Fed has demonstrated that they will not allow them to fail. The ultimate hedge. All the investor has to do is hold on and after the “current unpleasantness” has passed, they’ll get on with the delights of private profits and socialized risks…
On the sidelines? Really? Then what’s behind $118 oil? The money’s still in the game - it’s just not playing on the hacks’ team anymore.
What happened to txchick’s “rally that will stick” ? I threatened to buy index calls this week, ’cause I thought she was infallible! Haven’t bought ‘em yet, just ’cause I’m disorganized. Guess I’ll wait a bit.
Perhaps the boyz don’t want to seem too giddy in advance of next week’s FOMC - just to see what more they can get?
I just have an opinion. If I could read the future before it happens, I’d be on my own private island.
I’m still long.
Every long-term bull market has bear periods while every long-term bear market has bull periods. I don’t even try to pick intermediate trends though I will temporarily, partially cash out of an individual investment if its chart looks like exponential growth not justified, at the time, by the fundamentals.
Kiplinger: What Corporate Credit Crisis?
CLICK!
Economy
Investors Bet on Housing Rebound in Detroit
by David Schaper
Morning Edition, April 22, 2008 · As the U.S. real estate market falls further into decline, some cities where properties are going particularly cheap are seeing a strange revival. In Detroit, where foreclosed houses can be found on nearly every block, foreign and domestic investors are buying up bargain homes in bulk as long-term investments.
Well, if the investors are there - then it must be a smart bet!
I wonder how many more “diamonds” that one dude from WA has shoveled into his pickup lately?
“strange revival”= Government parachute finally opening 2 seconds after IMPACT with the Earth
Property Tax Rate Hikes Coming
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/21/AR2008042103400.html
Fairfax Prepares to Raise Tax Rate As Region’s Fiscal Outlook Darkens
Fairfax County yesterday joined a growing list of communities across the region that have raised property taxes this year to protect government services and public schools in the face of declining real estate values and a generally sluggish economy.
The bad news is that, for Fairfax and many other communities, next year’s outlook is even worse.
Dragged down by a stagnant economy and the subprime mortgage crisis, Fairfax’s property values declined on average about 3 percent this year, although the county fared better than some.
There’s also a box in the dead-tree edition of the Post detailing the Virginia increases (all reflect tax rate per $100 of assessed value):
Alexandria: up 3 cents, or 3.6% - to 86 cents.
Arlington: up 3 cents, or 3.6% - to 84.8 cents.
Fairfax: up 3 cents, or 3.3% - to 92 cents.
Loudon: up 18 cents, or 19% - to $1.14
Prince William: up 21.3 cents, or 27% to an even $1.00
My house (and neighborhood) in Alexandria’s assessment dropped 2.25%, so this is pretty much a wash for me - but my parent’s house actually went up a couple % in assessment. Alexandria did cut the rate some most years during the valuation/assessment run-up in the last 7 years or so - but never quite as much as valuations.
The question is - how did counties here - and everywhere - budget for the future and make long-term promises (like increased pensions or long-term construction projects) based on what they thought would be increasing valuations and local prosperity - and, in many cases - more land being improved and a growing tax base?
As rapidly as assessments went up, the government was somehow able to suck up all that money just as fast. But now that values are dropping, they’re squealing and raising rates.
Surely, there was SOME non-essential spending they could cut somewhere…
Or is it all absolutely life and death essential?
Heh
Yep.. keeping taxing money from people on the edge! That will stop the foreclosures!
Existing home sales look horrible! Inventory up 30% YOY? Oy vey this is getting good :>
However the marketwatch bulletin shows the median price as $207,000.
That’s down 7.7% YOY, but UP over 5% MOM which is simply amazing.
Can’t wait to see the regional breakdown.
The OFHEO report seems to be more truthful than the NAR pablum. (barely)
“Be calm, all is well”
Looks like a marketwatch typo, CNBC has the median at $200,700. Still up from February, but by a much more normal amount.
Now let’s try this HTML thingy:
March EHS Summary
Did you hear the tidbit that the NAR estimates 18% of houses for sale now are upside down?
that’s what? About 750,000?
renters displaced due to credit crunch
where did i read this would happen? oh yeah right here a few years ago that is why i investigated my landlord before signing a lease
(she owns since 1983 with a paid off mortgage and no heloc)
http://www.nydailynews.com/ny_local/brooklyn/2008/04/22/2008-04-22_loan_crisis_hurts_brooklyn_renters_too_.html
Hi. TV ads here (Washington, DC) the last week or two for ITT TECH. It’s trade or commercial college like Strayer Univeristy. Its School of Design and Development has been promoting a BA in construction management. Focuses on residential. Would out of work construction workers have / or borrow money for tuition ? If you’re out of work in construction and go for such a degree is n’t that kinda like doubling down in blackjack ?
I saw the ITT commercials for CM also. There are massive infrastructure projects out on the street and alot of the big GC’s (Kiewit, Bechtel, etc) and engineering firms are struggling to staff field positions in CM. I wasn’t surprised to see the ads.
I hear similar ads for something called “Westwood College” in DC area - they have locations in six states and offer technical training in construction mangement, law enforecent, and other stuff. I think they probably do a good job steering people into federal loan and grant programs - see link: http://www.westwood.edu/financial-aid/
I saw something on TV a few months ago about some school of fashion design and marketing that was very adept at getting loans/grants for their students, and promised career placement and salaries that would make it easy - or at least possible - to pay off the loans. But, of course, the high-paying jobs in fashion ended up not materializing for most of the graduates.
I double down on ANY two cards if the dealer’s got a 3, 4, or 5. And I split 10s same situation.
I’ve seen these ads in Colorado as well. Who in their right mind would get a BA in Construction Management these days?
BTW, the ads show the graduates supervising residential construction, not big infrastructure stuff.
Ha - A friend was telling me about all the guys on Yahoo Personals who try to get sweeties by saying they’re big construction magnates…ROFL!!
Canada Cuts to 3%
“NEW YORK (MarketWatch) — The Bank of Canada on Tuesday said it is lowering its target for the overnight rate by 50 basis points to 3%, with the bank projecting a “deeper and more protracted slowdown in the U.S. economy.” The bank forecast the Canadian economic would grow by 1.4% this year, and 2.4% in 2009. “
Fedex,UPS Decline Points to Recession…
“April 22 (Bloomberg) — Falling shipments at United Parcel Service Inc. and FedEx Corp., which together deliver 80 percent of packages in the U.S., show the economy is in a recession and unlikely to rebound this year.
UPS, whose domestic volume has outperformed the gross domestic product for almost a century until last year, said April 8 that deliveries dropped in the first quarter. UPS also said earnings for the three months through March will miss its previous projection by as much as 7.4 percent, just the third time the Atlanta-based company has made a new forecast that was below an earlier one.
FedEx’s U.S. shipments dropped 2 percent last quarter, and the company said last month it would have “limited earnings growth” this year because of the slowing economy. Both companies are also struggling with soaring jet-fuel, gasoline and diesel costs after crude oil surged 80 percent in the past year.”
Crude hits new intra-day record of $18.45.
Make that 118.45!
$120 anyone?
Added to dcr today. Refiners cutting inputs due to high price and low margins. Demand and price will fall eventually.
matt, are u sure u want to double down on dcr? this keeps dropping like a rock for the last 5 days
Adding to a loser is bad business.
Oil companies want the WHOLE tax rebate
Very OT - Hey TX! My Wife spent 30 minutes briefing John McCain yesterday here in AL. She was all over the news on CNN, Fox, and others. She’s a Dem (I love her anyway) so she’s not voting for him but she spent a few minutes chatting with him and says he’s a very nice (and short - she’s almost 6′) man. I actually go to church with one of his ex-commanding officers. My son got an autograph from him but he’s unimpressed…
Cool. Looking for an EZ win in Nov.
Election 6 1/2 months away. Last two elections have seen candidate with big lead in summer lose. If you’re still touting a big stock market slide beginning in the summer (and if you are, you’re probably right, given your record) this favors Dems. I think McCain will lose.
TX, check out his animal rights issues before you back him too much…not good. Don’t have the link, but will post it when I can find it.
No candidate considers that anything to worry about except Rick Santorum and see where it got him.
Yeah TXchick…. It’s gonna be a landslide.
Watch out for Bubba there, cowboy
http://www.huffingtonpost.com/2008/04/22/on-course-for-another-whi_n_97965.html
Take if Cowboy, with fuel at 3.50+/gal, bubba will be voting with his wallet and wheelin’ out the boogeyman ain’t gonna fly.
Above post should be “Take it from Cowboy”. grrr… notebooks suck.
Hey TX….. speaking of Sanitarium Santorum. The dems were beyond ecstatic when he and George “empty skull” Allen got their dicks slammed in the door in 06. It was a huge GOP smackdown that energized the opposition. All the retarded feel good BS that first elected Allen didn’t work then and won’t work now. Also, bubba is fed up with the nasty nattering a’la Sanitarium. It’s time to replace the 30 year old gop playbook.
You guys always misjudge Bubba, which is why you never win. A high point for the Ds is a prez who’s elected with 43% of the vote, who loses both houses of Congress and is eventually impeached. The Chicago Cubs of politics.
A high point for the Ds is a prez who’s elected with 43% of the vote, who loses both houses of Congress and is eventually impeached. The Chicago Cubs of politics.
Hey, don’t drag the Cubbies into this.
(Grumble grumble.)
“Hey, don’t drag the Cubbies into this.”
Exactly…..at least Mr. Rodham managed to win the big one.
Yeah, this is real Presidential material:
http://latimesblogs.latimes.com/washington/2008/04/obamaflipsoffcl.html
You guys always misjudge Bubba, which is why you never win.
But The GOP takes Bubba for granted, year after year. (Not to mention evangelicals.)
Bubba is now partially awake, politically speaking.
What happens when Bubba fully realizes that the Party of Overfed White Embezzlers, Pederasts & Serial Adulterers has nothing to do with “family values,” and doesn’t give a damn about the working class? (Or, really, anyone that makes under 200K. Or gay people. Or brown people. Or children … you get the idea …)
Should be an interesting moment.
Bubba doesn’t care about gay or brown people. Don’t forget, you’re talking about people who paint their faces half each in their school colors before they go to the football games.
TX, if you’re that confident about another 4 years with Grandpa Proxy, I’d be willing to publicly wager against it with you.
You game?
ET - I rest my case
http://www.bostonherald.com/news/opinion/op_ed/view.bg?articleid=1088709
Why not? I have bets like that with a dozen Omaniacs already.
$25 via paypal that Grandpa McCain won’t get elected. Deal?
Yeah, I’ll try to find the money somewhere. Maybe I’ll refinance the car.
Nahh…. you won’t need to right?
Just think… you’ll be rich collecting from the dozen +1. 
AP
Existing home sales decline
Tuesday April 22, 10:34 am ET
By Martin Crutsinger, AP Economics Writer
Existing home sales decline in March as housing slump continues
WASHINGTON (AP) — Sales of existing homes fell in March while the median home price declined, compared with the price a year ago, as a severe slump in housing showed no signs of abating.
The National Association of Realtors said that sales of existing single-family homes and condominiums dropped by 2 percent in March to a seasonally adjusted annual rate of 4.93 million units.
http://biz.yahoo.com/ap/080422/economy.html
oh how i love it when these morons have to eat crow!
By Barry Ritholtz, the street.com
I am going to make a bold forecast: Existing-home sales are likely to increase when reported this morning. An even bolder forecast: Existing-home sales are likely to increase each and every month from now through August.
http://secure2.thestreet.com/cap/login/rm_mbp_dyn_v2.jsp?cm_ven=YAHOO&cm_cat=PREMIUM&cm_ite=003190&flowid=19e9e25c72&url=http%3A%2F%2Fwww.thestreet.com%2Fp%2F_yahoo%2Frmoney%2Fhomebuilders%2F10413083.html
Existing home sales decline
By Martin Crutsinger, AP Economics Writer
The National Association of Realtors said that sales of existing single-family homes and condominiums dropped by 2 percent in March to a seasonally adjusted annual rate of 4.93 million units.
Lawrence Yun, chief economist for the Realtors, said that he expected sales would begin to show improvements in the second half of this year, helped by an improved availability of mortgage-backed insurance from the Federal Housing Administration and higher limits for jumbo mortgages, loans which are critically important in high-priced areas of the country such as California.
http://biz.yahoo.com/ap/080422/economy.html
Should start a blog pool for when Yun leaves. That will take real HBB prognostication.
Bank of America-Countrywide to curb risky mortgages
Tue Apr 22, 2008 10:18am EDT
http://www.reuters.com/article/marketsNews/idINN2228867920080422?rpc=44
New Threat: Loan Losses
http://online.wsj.com/article/SB120882005523032941.html?mod=yahoo_hs&ru=yahoo
kinda like doubling down in blackjack
Hey, I have to play some blackjack for work today and tomorrow. Casino evaluations are tough work. Good thing I stick to the cheapie tables.
Many months ago I suggested stocking up on #10 cans:
“We are sorry, due to increased sales, many of our #10 cans are currently out of stock”
http://tinyurl.com/2ps5m5
Silver Eagles and 100 oz. bars have been unavailable for weeks, although my dealers indicate the US Mint will produce and deliver Eagles in May:
http://www.golddealer.com/bullionpage.html
You better hurry and horde yours. Street riots are imminent.
I just got a promotion from the Venetian/Palazzo in Las Vegas. Part of it actually reads: “Cash your tax refund and/or stimulus check at The Venetian or The Palazzo and receive an additional 25% in slot credits.”
Lovely.
I was just in Las Vegas for a few days. One thing I have noticed is that Vegas is no longer a cheap vacation. Food and drink are no longer reasonable. Even the Starbucks in the lobby of the hotel I was at had at least a 30% markup over normal prices.
F–k Las Vegas. 24hrs after arriving I am happy to leave. It’s all gone ghetto, anyway.
“Parade of Potential Horribles”
An outlook on the global economy, with Thomas Barrack, Colony Capital Chmn. & CEO and CNBC’s Erin Burnett.
http://www.cnbc.com:80/id/15840232?video=717862780&play=1
No More Line of Credit for You!
http://www.thestreet.com/_yahoo/funds/saving-money/10412992.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
I’ll ask again, does anyone know how many purchase loans are now going through FHA (with low % down, like 3% [or less]), especially in bubblitious California, Florida, and Las Vegas?
I’m just trying to gauge the magnitude of an FHA train wreck as prices correct beyond the 3% ‘cushion’, and overwhelm any extra points FHA loans charge for ‘insurance’.
People in RE here are saying that a lot of FHA stuff is getting done, and is helping a little on sales, as some people *still* don’t have to bring significant down payments to the table (3% vs. 5%, 10%, 20%, 25%).
A mortgage broker told me last week that there is a “work around” on the 3% requirement too so you can still get in with nothing down. I don’t know the details.
You can get 3%, and in some cases 0%, down FHA loans as well as 0% down VA loans. They’re pretty much the only low/no down game in town. The problem for most potential buyers are the “high” underwriting standards - you need a decent appraisal report and the proven ability to service the debt. There has been a big surge in FHA loans but a strawberry picker can’t buy a McMansion with such financing. FHA/VA lending can’t make up for the demand drop from the disappearance of exotic/innovate home loan financing.
I believe the 0% FHA loans are the ones where a non-profit provides the downpayment for the “deserving poor.” There’s been a lot of fraud in that program and the default rate for 0% down loans has been four times the default rate for 3% down loans.
Anyone watch the new episode of Flip that House on Sunday? The flipper converted a 2-1 to a 3-2 in Altadena, CA and originally stood to make an almost 200K profit. At the very end of the episode, it says that the house was reduced by 20K and that the realtor felt this would start a bidding war. Well, here’s the house on ziprealty, still on the market and with yet another price reduction. Even with the $5,000 staging cost (I don’t know how staging works, but there is probably an additional monthly fee to rent the furniture it if stays on the market a while…). Burn baby burn.
http://tinyurl.com/3vdgan
Sorry about the tiny url…
Here’s what at least part of the Florida state government thinks about the smarts of its residents. These are the payouts for tomorrow’s lottery:
Pay $1, win $32M
Pay $2, win $42M
Pay $3, win $57M
Duuuuhhhh……
We’ve seen enough articles about Florida schools having to cut back due to decreased tax revenue.
Again, please, Florida, do not cut back on those schools.
You assume the stupidity is not caused by the schools. Giving them more money will only yield more sheep. Cut them off and people will have to start thinking on their own!
Economist: Housing slump may exceed Depression
Tuesday April 22, 11:52 am ET
http://biz.yahoo.com/ap/080422/economy_shiller.html?.v=1
“It seems we have developed a speculative culture about housing that never existed on a national basis before.”
and it seems to me that Shiller wants to continue that culture by continually asking for more bailouts and rewarding the speculators.
He’s basically calling for the federal government to take the loss he now predicts, isn’t he?
It’s more honest than saying having the federal goverment buy mortgages will halt the price declines, but only to an extent. What public services and benefits does he propose cutting, and what taxes does he propose raising, to pay for this?
But what was the income to loan ratio for homes back in the 30’s? I know you basically had to save at least 50% or so for a down payment so homes probably weren’t as overvalued as they are now. A 30% drop seems reasonable considering the economic conditions of the era.
Now - with the incredible overvaluations on homes and the lack of traditional affordability ratios, I’d guess that home prices could fall a great deal more than 30% which is still way higher than just a few years ago IMHO.
About That Second Depression
http://www.chicagotribune.com/news/opinion/chi-0422edit1apr22,0,1240543.story
“Economic Recovery Already Underway.” His thesis: “What a difference a month makes! . . . Compared to the bleak expectations then, even just hanging in there would have been an upside surprise. But it’s more than that. Things actually are getting better.”
Blah, blah, blah. The Economist says that the US is already in a recession. I’m inclined to believe them (and common sense) over a half-assed paper like the Chicago Tribune.
My bet…Ben and friends are going to try so hard to keep us out of a “depression” that they inflate another bubble when this is all played out…imagine a massive rubber band, being stretched tighter and tighter…springback’s going to be a b*tch when things eventually settle down.
Inflation = The absolutely everything bubble. (Except houses)
“Buy anything at all before you are priced out forever!” (Except a house)
I just hope that oil keeps getting more and more status as the ultimate currency hedge. That will teach these morons a good lesson they can’t ignore; B-52 Ben has no chance at printing more oil.
Cash your tax refund and/or stimulus check at The Venetian or The Palazzo and receive an additional 25% in slot credits.”
If in Las Vegas, go cash your check there. Put the cash in your wallet (purse). DO NOT STICK IN SLOT machine. Play the free money they give you. When it is gone (watch the machine, should count for you). When free play money is done, hit cash out and take money and run.
If someone has an urge to gamble, follow me around and it will die when watching hoards of other people losing their A$$es in dreams of riches. Kind of like we are now witnessing in the housing market. Not much difference.
Actually, the funny part is that I’m seeing more and more “incentives” being offered by the Las Vegas casinos…I thought that they were recession-proof, as they are the destination of choice for The Beautiful and Rich High Rollers of the world, and they don’t need no stinkin’ “common people” visiting any more to make money.
I still remember the news story stating that Las Vegas was going to become America’s next “great city”, another New York.
Oh, how the mighty have fallen.
America has ghost towns, but LV will be the first real ghost city.
Uncle Buck crashing hard:
http://quotes.ino.com/chart/?s=NYBOT_DX&v=d1
Dollar hoarders are finished.
At session highs, one euro bought as much as $1.6018, which is the most since the currency was introduced in 1999. The euro has since retreated a tad to just under $1.60. The official currency of the European Union is now up roughly 18% compared to last year, and 30% over the last two years.
Meanwhile crude oil is currently up 1.7% to $119.44 per barrel after hitting an all-time high of $119.74.
some analists I follow are predicted euro/dollar at 1.61-1.65 and oil at $125 in a short time; we are getting close. The only question is now if we will get a significant relief rally for the dollar, or if it will go down the drain right away.
Mr. Market is trending down mid-day on higher volumes. I’m no expert on WS and their associated BS, but it looks to me like someone is being a nah-nah nay sayer. Oh where, Oh where is Larry Kudlow when I need him? Erin and Jim we hardly knew ye’.
Roidy
Ahhh! The PPT stopped it at 12700 or so. Good job boys!
Roidy
Gas prices is skyrocketing and it will probably overtake the “Housing Crash” as our main economic concern. It is affecting everyone. I’m just glad I work from home and my wife drives only 5 miles round trip to work. Shopping center, movie theatres, major parks are just walking distance away.
Yesterday, I saw $97 on the pump. I guess the poor sap had an SUV and drained the tank until it REALLY needed gas. geez.
Watched an Excursion drive away a couple days ago - $111.68 on the pump at the local Wally World @ 3.29 a gallon.
Excretions, SLOBurbans and TaWhores. The gotta have ride circa 2001-2006 with the obligatory W sticker in the window.
And an American flag.
I am so tempted to ask some of these people if they think it’s 2003 again. You can tell the ones who think they are so cool driving around in a big gas guzzler.
Local paper had #97 on ways to be green “Steal gas from a Hummer (show them some eco-love. You’ll save yourself money and teach them a lesson in conservation)”
I think anyone that is still driving a Hummer can’t be taught anything.
Can you imagine what it costs to fill up a motor home?
This is all planned to give the govt cover when Alt-A or Commercial RE blow up and take the economy down further - they can claim they had subprime contained, but then those damn furriners jacked the price of oil up on us and those just getting by couldn’t hold on. The last thing the govt wants is for us to recognize their incompetence as evidenced by their massive overspending and retarded energy policy of the last 3 decades or so and scale back the power they wield over the people.
Most pols remind me of Officer Barbrady from South Park. Complete f ups. People who cling to one side or the other to “save” them are like dogs humping their owners leg. Good luck with that.
I drove from Tampa to Orlando and back on Sunday. I have never seen so many cars on the road, especially big RVs. You would think gas was $1/gallon.
Crude futures touch $119.86 - $125 bbl anyone? Hmmm? :I
It should close at 119.29. Shades of the last depression.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/WhyOilCouldHit180DollarsABarrel.aspx
$119.37 - Hit an intraday of $119.90 - Methinks maybe $120.00 tomorrow, perhaps overnight. Good guess!
Condo-loan restrictions tightening
http://www.baltimoresun.com/business/realestate/bal-re.harney20apr20,0,2345831.story
ouch if you have a condo or are a condo developer.
LA Times/Dataquick median price changes for southern California housing is out (sorry if it has already been posted):
DQ News LA Times March 2008 Chart
Including data from my archive:
LA County SFR median $/sq. ft. 2006: $400
LA County SFR median $/sq. ft. 2007: $406
LA County SFR median $/sq. ft. 2008: $315 (22% drop from 2007)
LA County SFR median $ 2006: $540,000
LA County SFR median $ 2007: $565,000
LA County SFR median $ 2008: $450,000 (20% drop from 2007)
LA County SFR sales 2006: 6,838
LA County SFR sales 2007: 5,550
LA County SFR sales 2008: 2,990
==========
OC County SFR median $/sq. ft. 2006: $437
OC County SFR median $/sq. ft. 2007: $418
OC County SFR median $/sq. ft. 2008: $330 (21% drop from 2007)
OC County SFR median $ 2006: $697,000
OC County SFR median $ 2007: $695,000
OC County SFR median $ 2008: $570,000 (18% drop from 2007)
OC County SFR sales 2006: 2,262
OC County SFR sales 2007: 1,875
OC County SFR sales 2008: 1,072
To clarify, those numbers are specifically for the month of March in 2006, 2007, 2008.
From yesterday, in case you missed it.
Comment by Ed
“Wells Fargo holds their notes and does such prudent things as actually assess your home before you buy it, require you to be financially solvent. Then they let their subsidiaries take on the bad loans. Some company they own, sunshine or something , wrote all their toxic paper. Wells Fargo proper is as clean as a whistle”
Checkout the reo list by Wells….Not so clean….
http://www.pasreo.com/pasreo/public/propertySearch.do
Wells Fargo has a lot of problems, but so do about 2,000 US banks. Misery loves company.
Can someone explain this to me?
Downey Savings and Loan reported a net loss for first quarter 2008 of $247.7 million.
At the moment the stock has gone up 2% for the day.
Someone posted a claim here recently that there was a unified, worldwide consensus that global warming exists. I was laughing too hard to bother replying to that BS, so I’ll throw out this little ditty.
When the global warming lunatics can’t find live footage to make their point, well heck just make something up.
http://media.newsbusters.org/stories/al_gore_used_fictional_video_inconvenient_truth.html?q=blogs/noel-sheppard/2008/04/22/abc-s-20-20-gore-used-fictional-film-clip-inconvenient-truth
You’re on the extreme margins on this. Climate change has long since been established. The real debate is it’s cause.
He said global warming, you said climate change - big difference. Maybe you’re too retarded to recognize the difference, but I know somehow George Dubya and Halliburton are behind it all in your twisted mind.
Also, where’s your anti commodity whine nowadays? Maybe you lost your voice on that one? Only reason I’m capping on you is because you turn everything on this blog into a political rant, and this is a HOUSING blog, dig?
Too cowardly to come out from behind the keyboard and use your real name?
Thought so.
I’m always amazed when a retarded ideologue accuses another of being an ideologue.
Reframing the words has an enormous effective on the melting polar icecaps doesn’t it? Can’t you see that just because you used an alternate reference, the ice caps are now refreezing and enlarging? You’re magic! How about just calling it climate denial. Commodities in a bubble ready to unwind is another fact you don’t like? Eat it.
Your boy, the big O can’t close the deal. If he can’t beat the witch, he’ll never beat McCain.
the deal got closed in feburary, someone just didn’t get the memo. McSame might as well nominate her for VP.
I have to remind you already that the wager is on your assertion that McCain would win in November?
California’s Home-Mortgage Defaults More Than Double
April 22 (Bloomberg) — California mortgage defaults more than doubled in the first quarter to the highest in 15 years as a drop in sales and prices prevented some homeowners from selling their properties to pay debt, DataQuick Information Systems said.
Homeowners received 113,676 default notices, up 143 percent from a year ago, La Jolla, California-based DataQuick said today in a statement. The number was the highest since at least 1992, when DataQuick’s statistics begin.
Home sales in both the San Francisco Bay Area and Southern California plunged 41 percent last month, and prices dropped 24 percent in Southern California, the biggest year-over-year drop for a single month since at least 1988, DataQuick said last week. The first quarter’s default numbers were a record in almost all of California’s 58 counties, DataQuick said today.”
I’m sure lots of people have read “The Black Swan” on this board.
So, tell me. Is the Black Swan the credit crunch?
Or is the Black Swan the massive run-up prior to the inevitable credit crunch?
I personally believe that the Black Swan was the run-up…
The black swan is if all these derivatives have to actually be exercised. Hasn’t happened yet. If it did, we’d be at Dow 6000 instead of 13,000
Yep global warming doesn’t exist
Peak oil is nonsense
and the economy is healthy
Down with science
I’ve been comparing assessed values with asking prices in some neighborhoods in Austin TX we have been looking at (we’re a long way from making an offer though).
The assessed values of many of the houses are way under what the owners are asking for. This reminds me of the bubblelicious times in MA, when houses frequently went for 100k over the assessed value.
Is it nuts to offer or pay more than the assessed value given the weakness in the market, lack of creditworth buyers etc. etc?
Yes. I see that same thing in Dallas but people are finally getting the message. I say assessment + 5% if the house is in excellent condition.
Are you talking about tax assessments? Remember, in Texas tax assessed value increases are capped for homesteads.
Thanks - I was at some open houses and it was like assessment +25%-50%. The music has stopped, but some sellers are still dancing
My new roof is being installed. It’s a light-colored roof, an energy-star certified “cool roof.”
Why is that of interest to HBBers? Because this roof would be prohibited in most new developments! Most HOAs have a set of “approved roof colors” and this wouldn’t be on it.
Just another reason why a lot of the new housing stock isn’t very attractive to savvy buyers, or people who will be in the market for a house a few years from now.
(Some areas are trying to pass laws overriding HOAs control on solar and energy-saving designs. I’m strongly opposed to this! If someone was stupid enough to agree to a contract stipulating roof color, that’s his tough luck. People who were smart enough NOT to encumber their houses with these requirements should be allowed to benefit from it.)
This looks like two houses coming out of mitosis:
http://saltlakecity.craigslist.org/rfs/652405832.html
Yes, we have had climate change for the entire life of the planet earth and global warming for the last 15,000 years since we came out of the last ice age when NYC and Chicago were both under 500 feet of glaciers. Wanna know what is causing global warming? It aint SUVS, it’s that bright yellow thing in the sky.
Ouch, rent going for 40% of carry cost I bet:
http://saltlakecity.craigslist.org/apa/652758136.html
Government Seeks to Buy Student Loans
By JONATHAN D. GLATER
Published: April 23, 2008
The Bush administration is proposing that Congress authorize it to buy billions of dollars in federal student loans to make sure the nation’s credit crunch does not block borrowing for higher education.
The proposal, outlined in a letter to be sent Wednesday to members of Congress from the Education and Treasury Departments and the Office of Management and Budget, endorses a provision in a bill passed by the House this month. It is the latest sign of deepening concern that the combination of tougher standards for borrowers, lender withdrawals from federal student loan programs and falling housing prices poses a threat to families struggling to cope with rising tuition. By buying loans, the government would provide capital to lenders to make new loans.
“I want to make double-dog sure that we have the tools necessary” to make sure federal loans continue to be available, Education Secretary Margaret Spellings said in an interview on Tuesday. “If we don’t need to use them, so be it.”
Ms. Spellings said she was not sure under what circumstances the Education Department would actually begin to buy the loans. “This is dynamic,” she said. “We don’t know.”