Bits Bucket And Craigslist Finds For April 23, 2008
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Rice, Death And The Dollar…
http://www.atimes.com/atimes/Global_Economy/JD22Dj01.html
Inflating our way out of this mess is causing havoc. The Fed doesn’t care. You think Easy Al’s Fed was idiotic? Try the criminality and brutality of Ben’s Fed. Dollar inflation is causing starvation.
Nice.
Roidy
Bernanke should be real proud of his rate cuts. They are doing wonders.
I heard yesterday the recent move in oil will cost US consumers 200 billion dollars. The stimulus package was 150 billion dollars. Heckuva job, Bernanke.
Sounds like it was a stimulus package for the oil companies.
a large component of the move in the price of oil was our falling dollar. I’m glad, at least, that now EVERYONE’s paying for the falling dollar, and not just the .5% of Americans who save money
I am thinking that maybe it’s time for us to get together with Australia, Canada, Argentina, Brazil, and (maybe) the EU and organize an “Organization of Food Exporting Countries”
Of course it won’t happen……it’s okay for the world’s energy to be help hostage to the needs/desires of the boys in Riyadh, Tehran, and Caracas, but FOOD? Now we are going to see pressure on the US to abandon the ethanol from corn program, because of the dislocations in the world food supply. Nobody seems to worry about the dislocations caused in this country due to $120/barrel oil.
(Note: I think ethanol from corn is stupid…but the oil producers/suppliers should bear some of the responsibility for the stupid decision……it seems like every government in the world can’t seem to plan for anything farther than six months out)
Im all for OFEC. We should limit the supply of food we send to Saudi Arabia.
Who would have thought a program to help make banks whole could have caused starvation somewhere else on the planet? Macroeconomic budget constraints in a tight money environment really bite hard.
“Welcome to Earth, third rock from the sun”…
“Although your world wonders me
with your majestic superior cackling hen
Your people I do not understand
So to you I wish to put an end
And you’ll never hear surf music again”
Food problems seem to be mostly caused by a combination of crop failures and misguided subsidies. The swift downward slide of housing has a strongly deflationary impact. The comments about hunger in that article certainly don’t apply to the periods of global war. Current rates amount to criminality and brutality? Don’t you realize that is all sloppy junk? The real kicker comes at the end of the piece where the author waxes philosophic about the Jackass TV show. The real problem is that all media outlets are saturated with this kind of math is hard, look I made a pretty graph garbage. For shame!
Fancy maths cannot capture the impact of announcing in advance that you will print money as necessary to solve your problems, then carrying out actions that do little to dispel the notion.
And don’t bother coming back with technical details about what printing is or isn’t, as this is quite irrelevant to the outcome, which is a ramping up of inflation expectations.
hmmm….confused how price inflation in US causes a food shortage in Africa….
might have something to do with increased consumption of animals coupled with historically low food stocks (?)
it takes a lot more land, fresh water, and FOOD, to create animal protein unfortunately.
fB
Dilute the dollar, prices go up.
There is no doubt the Fed is “printing money” by taking worthless garbage from financial institutions and turning it into dollars.
How about all the deficit spending being done with the hundreds of dollars in proposed bailouts (and likely some we haven’t even heard about yet)?
IMHO, the majority of commodity price increases is due to (global) central bank manipulations.
A good article which alludes to the inflation vs deflation debate:
Memo to Bernanke: Enough With The rate Cuts, Already!
by Mike Whitney
http://www.smirkingchimp.com/thread/14212
An even bigger contributor to high food prices is shortages caused by our misguided environmental policythat turns food into fuel.
NYTIMES: The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy seemed to reach a high point last year when Congress mandated a fivefold increase in the use of biofuels. But now a reaction is building against policies in the United States and Europe to promote ethanol and similar fuels, with political leaders from poor countries contending that these fuels are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, putting pressure on Western politicians to reconsider their policies, even as they argue that biofuels are only one factor in the seemingly inexorable rise in food prices
http://www.nytimes.com/2008/04/15/business/worldbusiness/15food.html?_r=1&th&emc=th&oref=slogin
the Europarliarment already decided that they are pushing through with all their biofuel subsidies, no matter what the consequences are for food prices. A proposal to limit subsidies for projects that compete with food was declined. After promising huge windfalls for rich farmers, big agrobusiness companies etc. they have no choice, isn’t it? Oh sorry, of course it was not about helping these heavily priviliged groups, it is all about the environment!
I read in today’s paper that the second generation biofuel plant that was going to be built this year in my area (one of the very first in Europe) is on hold and will probably never be built. The company is very disappointed with the little subsidy they receive from the Dutch government (far, far less that the big, corn-processing ethanol plants that are being built in the Netherlands). I can understand that, it’s quite a risky venture because the technology is not yet proven on the scale they need.
I’ve wondered if the message behind biofuels, from the Western World to the Middle East was “keep the oil taps open or we’ll starve you.”
It’s not a supply problem - in the case of oil, at least.
A few weeks ago, I heard from a NW Kansas farmer that some ethanol plants in his area were not operating at that time because corn prices were too high.
No country ever prospert by destroying their own currency. Chnaces are this time around it won’t be any different.
If this guy is an expatriot, he needs to drink more.
Did you mean expatriate, or was the pun intentional?
No comment
This could really be the beggining of the end of the U.S. dollar being the world’s reserve currency. I seem to recall a few years ago China announcing they would start rebalancing a portion of the dollars they have into gold and Euro’s. About that same time and the past couple years there have been a few middle east countries as I recall who also made similar declerations and a few others (including Iran, but they’ve been doing it for a long time) who wanted to stop selling oil just in dollars and move to either a basket of currencies or some other currency. I think Saudi Arabia has been holding that at bay so far.
If we had a central bank with the discipline to be a good steward of our monetary system, the U.S.’s position as the world’s reserve currency would be maintained. But as our poor stewardship begets hunger, in favor of maintaining a spend spend spend culture, rest assured that when the word of the cause of their decreased purchasing power gets out to the masses they will revolt against their own currency being pegged to the dollar. If that happens enough times obviously we will no longer be the reserve currency and dollars will be flooding home. You think prices are high now, wait until you have to compete against all the foreigners who have been stockpiling dollars for decades.
This is all an inherent fallacy of a central banking system. No human is both capable and of right enough character to truly be a good steward of such a thing as our, or any, monetary system.
But who knows, maybe our leaders will be able to convince the world there is some other cause. You know, all the corn we are turning into gasoline really has a way of making the price of gold,silver,copper,wheat,etc go through the roof. That’s probably the culprit.
for further reading: Riots May Kill Inflation
http://www.321gold.com/editorials/texashedge/texashedge042308.html
Good article. I am in the “both” camp, except for a different reason. I believe inflation in the short term will cause other countries to revalue their currency and ultimately force the Fed into a deflationary stance. It didn’t occur to me that food (and other staples) riots would be the catalyst but now that it’s happening it seems obvious. I didn’t until lately appreciate the extent to which dollars are used to buy so many commodities world-wide, not just oil and gold.
“The trade of the petty usurer is hated with most reason: it makes a profit from currency itself, instead of making it from the process which currency was meant to serve. Their common characteristic is obviously their sordid avarice.”
Aristotle
Un-effing-believable what an idiotic article this is: exporting Asian countries peg their currency on the dollar. Dollar declines for whatever reason. Now Asian countries can’t afford rice. And it the U.S.’s fault?!?!? (It was idiotic for plenty more reasons than that, but that took the cake.)
Certainly any government gets its own share of blame for pushing a fiat currency.
But to the extent that we (U.S. citizens) may at some point feel siginificant pain from the devaluation of the dollar resulting from a lack of confidence world-wide you can blame that on the Fed and its parent the U.S. Government.
I enjoyed the implicit assumption that correlation implies causation. That only works for me when I trust the author. For me, being preached at torpedoes trust.
Well, SF, it actually IS the US’s fault. We took on the responsibility of a central currency. It was the Bretton Woods agreement that gave us an international peg to the price of gold fixed in dollars. We agreed to it then we gave Bretton Woods the finger in the 70’s. Something had to replace it and that was our dollar. We didn’t object to oil or much of anything else being pegged to the dollar. We even encouraged it because it was to our advantage.
Now we try to inflate our way out of our mess when it is to our disadvantage, and it causes problems such as starvation and high food prices because of high oil prices.
It’s us.
Roidy
Well said. But as I pointed out, any government that pegs it’s own currency to another fiat currency also has responsibility for it’s own ills that result.
We didn’t object to oil or much of anything else being pegged to the dollar.
Oil “pegged” to the dollar? Get serious, it’s about as unpegged as you can get. Oil prices are quoted in dollars, but that’s just a convenience - you could just as well quote it in any convertible currency. Nor does it matter if the Saudis sell oil for dollars and convert them to euros a second later, or just sell for euros.
Well since the U.S. is both a large producer of oil and an ever larger user of oil, pricing it in dollars continues to make a fair amount of sense. Of course we’re discovering that a price that is denominated in dollars is in no way FIXED in dollars.
I assume he meant “priced to the dollar” since many of the world’s economies agreed to price things like oil and gold in dollars when the Bretton Woods act came into being.
Plus it wouldn’t really be possible to peg oil to the dollar unless you had a magic wand that could increase or decrease production at will.
I haven’t read the article yet, but I would bet that the money the Fed is pumping into these institutions is being used to speculate on commodities. In essence, the Fed is directly adding fuel to the inflation fire.
Just pouring it on.
Unless the Fed has a death wish, they need to raise rates IMMEDIATELY.
It sure looks that way from outside the Fed.
Wake up everbody!
Have a good day.
Mike
Already up, and still up, and good day to you.
Wake up people is right. The Mortgage crises may be causing divorces.
I can’t believe it when people say they need to trade up to a bigger giagantic house when they get the 2nd kid. So many in previous generations got by with smaller houses with more kids.
Its better to have an intact family than to be a mortgage slave to an over sized, overpriced, ugly, Troll Bros. Mcmansion monstrosity eating away your earnings.
http://articles.moneycentral.msn.com/Banking/HomeFinancing/IsMortgageCrisisCausingDivorces.aspx?ref=patrick.net
And don’t forget the the behemoth SLOBurban/TaWhore/Excretion. It’s a must for a family that grows around the waist. And you always need “the capability” too. And the best part of a behemothmobile is that this lots more room for donuts, diet coke, pizzas, etc.
And don’t forget the the behemoth SLOBurban / TaWhore / Excretion
I’ve always been amused by noting that “Denial” is an anagram of “Denali”
I perfer to call them ROV’s “rediculously oversized vehicals”, although I hate gas prices being so high, I do get some enjoyment that all these fools who buaght these oversized beast will be regretting it big time….
Decisions and consequences - what an antiquated concept.
If they are getting divorced over that, they were never really married to begin with. Instead, they were married to the idea of a particular lifestyle.
My siblings married for lifestyle/status and both are unhappy. Both married “up”, but didn’t marry a friend. One married into the entertainment world, the other married a sizable trust account. No thanks, life is too darn short.
Having known more than a few such people, I don’t think they quite conceptualize the choice in the way you are stating it.
They actually think they are doing the “right thing.” Unfortunately, for them, they don’t quite grasp that the “right thing” is the thing that will make you happy.
Faster Pussycat, Sell Sell
Interesting reply. Both my siblings bragged about their move up in the world at the time. Both married a-holes.
This applies to both pairs:
“The rocks in his head, match the holes in hers.”
You can call me FPSS.
It takes a certain amount of foresight to see things that way. It also takes something a lot harder — the ability to see that your choices have consequences, and sometimes the consequences may not always be to your liking, and even worse, there may be NO choices that allow all the things you want to happen.
Anyway, depending on how old your siblings are, they may figure it out or they never will. Contrary to popular belief, there is actually a slim window at a certain age of a second chance.
Marry a friend, good advice.
Marry a friend, good advice.
—————–
Absolutely. The best advice to anyone choosing a mate.
Been occassionally repeating the old saying, “When debt walks through the door, love flys out the window” for some time now.
I great up hearing Billy Joel sing these words: “They started to fight when the money got tight and they just didn’t count on the tears.”
So true.
I heard the Eagles “Your lyin eyes”
“I thought by now, you’d real-li-iiize - there ain’t no way to hide you’re wallet’s size.”
A coworker of mine was always saying the reverse: “First time’s romance, second time’s finance.”
I had a coworker who said the next time he got involved with someone he’d first ask for her balance sheet…
Isn’t there an old statistic that most couple divorce over money issues? It’s probably not just the financial aspect, but the blame and distrust that develops when a pair finds themselves a couple hundred G’s upside down.
For a minute I thought this would increase the demand for houses, after all, a divorced couple needs two places to live rather than one… but then I realized the decrease in monthly income might actually push home prices down even more. This removes more “households” that can actually afford to buy, but maybe it will add more competition for rents in the short term. It sure would be nice if we got to where a single-income earner could comfortably afford a place to live.
I see this all the time on HGTV: “The couple need to trade up from their 2000 sq ft starter home to something bigger now that they have their 2nd child on the way.” I’m in my 30s, but I feel incredibly old sometimes, because I just don’t get why people need so MUCH space.
Since they live all crowded together in subdivisions, maybe they’re trying to make up for it by creating more space inside. They could hang landscape paintings or those giant tacky murals of nature scenes to help. I’d rather live in a shack or an old beat-up trailer somewhere I can see the clouds and the birds and a tree or two or three or even a big patch of sagebrush (which smells wonderful after a nice rain).
landscape paintings
Kinkade! Don’t forget the Kinkade!
And I know something is really wrong when a well-kept trailer park (some are actually pretty nice, with porches and lawns and landscape) looks like residential heaven, while of a new concrete subdivision fills me with some unnamed dread.
Ack! No, no, NO! You are not allowed to appreciate nature in Amerika! Quickly - pave over everything so that we have nothing but malls and condo towers from sea to shining sea.
The stupid irony of people buying huge houses to make up for their cramped, debt-riddled, and miserable lives is rather amusing. People just don’t get it.
As for marriage, the purpose of that these days is to get easy access to alimony and child support checks, nothing more.
Marriage, is self inflicted identity theft.
As for marriage, the purpose of that these days is to get easy access to alimony and child support checks, nothing more.
—————————-
Don’t forget sex, children with your name and social status.
I have some friends like that too. One drives 40 miles each way to work. Every time I go visit, I get this horrible feeling of how disappointed I will be with myself if I ever live like that.
But realistically, what do we expect when we’ve all been told repeatedly that bigger is better. My girlfriends’ cousin raises her two boys (in Bogota) in a bedroom the same size as my bathroom and their living room/dining room/kitchen is the same size as my one car garage, and they are very happy.
I concur with the trailer parks. As much as I despise having to live in something like that, it looks 10x more peaceful than some McMansion subdisivion.
Funny thing, too, about the McMansion subdivision is that you won’t see any kids outside playing - ’cause we all know they’ll be ABDUCTED AND KILLED!!! Ahhhhhh!!! No! No!!
(Fact is that more kids are killed by bee stings than by abductions, so maybe they’re being kept away from the bees…?)
I wouldn’t mind a 2500-3000 sf house. We’re living in a 1540 sf house right now, and it’s crowded. No dishwasher either. My husband and I just looked at some 4500 sf Mcmansion forclosures over the weekend. They’re magnificent in so many ways. But we both agreed that they don’t have a comfortable feeling of HOME. I also don’t like the idea of buying a house that either would take too much time to maintain, or too much money to hire someone else to help clean.
We’re taking our rental and getting creative when thinking about having a second child (moved office area into bedroom to create play space, extra furniture into the rafters, etc., etc., etc.
Both my wife and I shared bedrooms with siblings….shockingly, we survived and have become happy and productive members of society…
We can’t really blame the McMansions. The problem with the house bubble is that people were paying almost twice as much for a house that realisticially should have fit their economic level. For awhile there there were small ugly dumps going for over $300k in our area. These were homes that should have been affordable for a family making $50,000. It was rediculous.
It’s unfortunately that there will be many families broken over this. From what I hear divorce makes things even more economically difficult for families.
Piss off I haven’t had my coffee yet
With all the foreclosures et al, why are the rents not coming down yet? It’s getting ugly in some areas. McMansions are lower on rentals. But small and midsized are still pretty much status qua.
Most apatments etc. are offering deals, but the rents don’t budge much. Why? I am mosly referring to California and Arizona.
USAToday recently wrote a piece on this topic. I think in the long term all the foreclosures will create excess rental inventory and depress rental rates, but in the short term its apparently generating more demand and less supply for rentals.
http://www.usatoday.com/money/economy/housing/2008-04-21-rent-rising-eviction_N.htm
Thanks. A very good article and some sound info. I have at least two coworkers being evicted. On was through a property management company and another through a lease option. not to mention the many doing ‘jingle mail”.
However, I have been in my apt. complex over 1 1/2 years. A better property that allows pets. Really. In CA. But it is getting weird. Special deals for new tenants etc. And they are gone in 60 days. It is a lease property.
Many, many people are doubling up with roomies, or moving in with relatives. A point not covered in your article. They have a $400 bounty fee here if you recommend a renter. So, I say, it is also a house of cards and the MSM is BSing. However, that was the best rental article I have read and I thank you.
I wrote a longer reply. But I don’t see it. Bottom line, decent article and thank you.
Don’t know what happened to my other reply. But the gist was, coworkers being evicted even in property management and lease/ ops situations.
Also many doing the jingl mail dance.
But what the article seemed to not address was the many people getting roomies, doubling up or moving in with relatives etc. I do nt believe there is a glut or major need for the current rentals as the MSM purports. But the article at least addressed the situation. Thanks
Sorry, spellcheck not working.
You need to work on your patience. Both on your posts and in regards to housing. Your posts will get through. Let Ben do his work.
As for housing I see so much impatience on this blog. This is the biggest financial disaster of our lives. Does everybody really think it’s going to play out in 15 minutes? Put down your latte, cell phone and iPod. Rents will fall. Prices will fall. It will take years for this whole mess to shake out. The “15 second attention span” generation will be taught the value of patience once again.
Buffett: “Money flows from the impatient to the patient”.
Can I keep my Iphone?
love the quote. Buffet is a smart old man.
I was at a conference last week. It is amazing how many times cell phones blasted during the meetings. Often it would be the same person’s phone ringing on several different occasions. The lack of professionalism is amazing. So, here’s what you need to do. Either set it to vibrate or shove it up your…..
Faster,
How do you know this?
Please keep in mind that people here have already been waiting 5-6 years to buy a home. Add another three to wait for absolute rock bottom — that’s an entire decade.
Not that I’m going to catch a falling knife, but I don’t have decades to spare either.
What is this f*ckin’ obsession with buying a house? Are you well fed, happy, doing interesting things with your life?
If yes, the house is irrelevant. If no, the house isn’t going to help much.
Faster, faster!
oxide: in Europe many were priced out already 10-15 years ago, and the bust has not even started there yet.
There will be one whole lost generation that was never able to buy a home using sound money (well, maybe they can buy around retirement age if they are lucky - but most of them are generation X who also had bad luck regarding the job market).
My obsession with buying a house is being able to put on Bruce Springsteen at top volume and not have the neighbors downstairs complain. Or listening to them fight every night.
I’ve been renting for 17 years, I’d like a garden, thank you.
For me, I remember being a kid and having room to run. The clock isn’t ticking for me as much as my first child. I’d like her to have some room to run outside, away from streets and traffic. I can always rent that place, but eventually I’d like to have no one else control whether I want to move or not.
My obsession isn’t with buying a house. It’s with buying land. I’m looking for an older place on a nice piece of dirt. I figure I have 4-6 years before this desire really ramps up.
My “obession with buying a house” is to be able to put some space between myself and the sleazy neighbors that infest most places these days, to no longer have to share the laundry room with human debris, to not have to listen to ghetto rap blaring away, to not have to put up with human filth dribbling sticky garbage water all over the building staircase and then just leave it there, etc.
In short, people suck and buying a house is about the only way to get away from them, or at least put more distance between them and myself. It would also let me plant a garden and some trees, etc.
I “did the right thing” by getting a good education, working hard, and saving my money. I shouldn’t have to wait a decade or more for the crooks to finish playing their blasted shell games (while destroying the economy) just because they don’t yet feel rich enough.
I put on Wagner at top blast. Heck, I put on Wagner at full bore before breakfast sometimes, and I live in bleedin’ New York. Nobody’s complained even once, and I know all my neighbors, and even have them over for parties and dinner.
Find a rental that suits you, and live happily.
And I’d like a white pony that flies. So what?
Sometimes the best choices are the least worst ones.
to be able to put some space between myself and the sleazy neighbors that infest most places these days There are more ways to do that than by buying a house. Some home buyers wind up with sleazy neighbors anyway.
“My obsession with buying a house is being able to put on Bruce Springsteen at top volume and not have the neighbors downstairs complain. Or listening to them fight every night.
I’ve been renting for 17 years, I’d like a garden, thank you. ”
So, rent a house. There should be plenty on the market. Cheaper than buying and you can see all the crud that goes wrong that you would be on the hook for if you were an owner!
I’d like a garden When I was in grad school, I lived in a dorm. The dean lived at the edge of town on an old farm. He let any of the students garden a patch on his place if they wished. He even had it plowed & fertilized in the spring. I lashed a couple of my tools to my bike & rode out to tend my veggies on summer evenings, great fun. There are more ways to do what you want than just by buying a house.
I have a garden and it moves with me. I have over a 150 plants and trees in oak barrels and large pots.
My “obession with buying a house” is to be able to put some space between myself and the sleazy neighbors that infest most places these days
Funny thing is that it wasn’t all that different 25 years ago. Neighbors who played loud music, dealt drugs, parked in your spot, etc. I don’t miss that lifestyle.
There were some funny moments, like in the summer (open windows) when amourous neighbors got somewhat “loud”.
Home ownership is definitely not all it’s cracked up to be. I don’t miss the maintenance, lack of mobility, and above all, the shi**y neighbors. I had a large lot in a nice neighborhood and still had to listen to parrots squawking, dirt bikes revving, and idiots shouting. I live in a much more quiet environment now, and I’m renting a house. If some doorknobs move in nearby, I can hop to a new lily pad without much fuss.
“There were some funny moments, like in the summer (open windows) when amourous neighbors got somewat “loud”.”
“I’ve had sex so good that even the neighbors needed a cigarette.”
Looks like some bad choices on the part of those who lost their homes. I feel bad for them, yet it reafirms that life is a series of choices and there are ramifications for making bad ones. Even in today’s “bailout the poor dears” environment.
Thre are plenty of affordable rentals, just not in the choice areas or with all the amenities that some of the former McMansion owners want.
JTie, the apartment owners will offer you a move in special, but will not lower the monthly rent. Giving you the first month free does not show up on the books. Lowering the montly rent 8.3% (equivalent to one month free) lowers the value of the property, since the scheduled income has dropped! It is a game the apartment owners play with themselves and the lenders.
You will be interested to know that the SFR shadow market in Sacramento is having an effect. I have been tracking Craigslist adds for certain sub markets and the SFR listings for rent are up about 200% to 300% over April 2007. Prices are down about 10%, from $.80/sf to about $.70/sf.
One very interesting factor: When my friends look for new homes to rent, they always call me with a list. I look at the property records on a property database to see what the prospective landlord paid, how much they owe and when they purchased. I must tell you about 6 out of 10 SFR rental properties I review are FB’s way upside down and are most likely headed to foreclosure in the near future. My friends immediately cross them off the list. Once burned, twice shy!
There is a more obvious answer:
Give the tenant “free” rent up front, because they have to repay it if they don’t finish the lease. Or it can be deducted out of any deposits. Amazing how many tenants don’t know this and get sued in small claims court.
——————————————-
JTie, the apartment owners will offer you a move in special, but will not lower the monthly rent. Giving you the first month free does not show up on the books. Lowering the montly rent 8.3% (equivalent to one month free) lowers the value of the property, since the scheduled income has dropped!
I think it is more to allow the tenant to break even on moving costs.
No, it’s more to screw over the tenants.
Apartments here have the worse policies it’s almost like living in a prison. I remember one lease I had was something like $3500 to move out tomorrow with 60-days notice + fees + return of concessions.
The major companies love playing games too with the rate. They’ll give you three months free or a big screen tv. Amazing how many people take the TV, the cheapest POS available that’s not even HD.
They also like to lock people into long term leases 18+ months assuming that you will at some point pay the breakage fee. This is very profitable for apartments as they get 60 days notice (save 850×2=$1700) + $850 breakage fee, and they will have someone moved in the next week, doubling their take on that unit for the next two months.
One way to get around this is to give notice and retain possesion, but then you are responsible for utilities and damage if someone breaks in, or a return trip to close the deal if you’ve moved out of town.
Another joke is the utilities. The complex I lived had water/sewer/trash of about $7 a month. They changed billing companies and it was suddenly $40 a month. $21.99 sewer flat rate, $14 for water (variable each month), and $7 for trash. There’s nothing you can do about it either as the extra sewer charge is just profit in their pockets.
What state are you in?
In Texas, a 30 day notice is standard and “breakage” as you call it is limited to 90% of one months rent(if you didn’t pay that you would of course go on the nationwide apartment bad debt list). You would lose your deposit, but a lot of times you can move in with no deposit.
Florida. FL has some of the most anti-consumer landlord/tenant laws in the country.
They really need legislation to protect people against landlords who are in (or near!) foreclosure. It’s fraud, and landlords who have no way of paying for the property they’re renting should get jail time.
I definitely have seen sticky rental prices on the lower end along with great deals on the high end.
We just moved to Tallahassee and, of course, decided to rent again. We initially started looking the local mid-range for SFHs ($1000 to $1200) and noticed the pickings were slim and relatively overpriced based on market value to rent ratios. The nice places (3/2, 1500-square-foot SFHs) in good neighborhoods in this price range were being snatched up within days of being advertised. Often, home were pre-leased months before they were actually available.
On the other hand, homes being offered for $1500 or more spend months on the rental market. Vacancies are plentiful.
So, we decided to move up and low-ball a home that had been vacant for over a year (while it was simultaneously listed for sale on the MLS for $799,000). She originally tried to rent the 4,500 square-foot, 4/5 lake home, on 3 acres and a pool for $2,500/month. She had slowly dropped the price down to $1,900 a month where it listed when we originally looked. We offered $1,600. After giving the owner a week, she took our offer and we move in next week.
So, basically in my local market, the difference between a nice, modest, 3/2, 1500 square-foot, SFH and a massive 4/5, 4500 square-foot home on a lake with a pool is a mere $400 a month.
The bubble is certainly creating some very strange market conditions.
Not to try to rain on your parade over here but what you are making up in savings on rent is going to fly out the window when you get the electric bills to cool a home of that size.
I also wouldn’t unpack to much, unless this home is mortgage free you may end up with a surprise notice on the front door.
I don’t know what the average time frame is, but a Prop. Manager told me the county law here makes it so it takes 6 months to evict a non-paying renter.
Thanks. However, the first thing I did when I was looking at any of the homes I was considering to rent was to check public records. If they even came close to a 100% LTV or had an ARM reset, I didn’t even bother to look at the property.
In the case of the place we moving into, the only mortgage outstanding is a $134k fixed mortgage that the owner took out in 2001. I’ve got nothing to worry about.
This is just a case of someone who is planning on funding their retirement with their home. When she wasn’t successful in selling it at her inflated price, she figured she would rent it out for a couple of years until the market rebounds.
In fact, the majority of the homes we looked at were being offered by landlords that were convinced a rebound was a year or two away. I guess there’s a lot of Realtors® out there convincing potential sellers that they should not list their homes right now because they’ll get a much better price in a couple of years. Dumb@sses — Realtors® and delayed sellers alike.
Exactly. You’ll be crying in July with $400 a month electric bills. There is (was) a reason most Florida homes are small with big windows. Now they are just like the homes in Virginia, completely unsuited for the climate.
Wow, even at 2500/mo $799,000 is overpriced by about $500,000. $1,000/1,200 rents are what most Floridians can afford. That should bring the median down to about $140,000.
The home is probably worth about $500k in the current market. She was way over priced. By the time the market hits bottom here, she’ll struggle to get $400k.
Still, no matter the eventual sales price, the owner simply wasn’t going to get someone with a decent FICO and verifiable income to pay more than we’re paying, which is a relevant side story.
The Realtor® who handled the transaction had received two rental offers at the previous $1,900 advertised price. However, in both cases the prospective tenants failed the credit and/or income check. So, for the landlords out there it’s not just difficult finding someone who is willing to pay high rents, it’s becoming impossible for them to find someone who is both credit worthy and willing.
I disagree, like I said at $2,500/mo rent, which she couldn’t get, that house is worth $300,000. Which is about 800/mo for ins and taxes and that leaves 1700/mo for the mortgage. Work the figures, you’ll see what I’m talking about.
(Quote from below)
“An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea.”
Renting isn’t all its cranked-up to be; I’d rather move where homes are affordable. With your own place you have stability for the kids, can have the cat and dog, can have a work bench in the garage with tools, etc., which are things I’d rather not do without. Now if I were single, it’d be a totally different!
You can have all the tools and work benches you want in a rental house with a garage. As for pets, I don’t have any, but there are clearly rentals available that allow pets.
There is certainly nothing wrong with buying, if prices make sense. But moving to a cheaper exurb just to “own” is definitely a mistake.
Even if someone could take a comparable paying job in Kansas instead of California, it would not make sense to buy a house in the affordable state early in a housing bust cycle.
Target, Credit Cards… Why doesn’t every business just sell it’s junk to J.P. Morgan? They are bullet proof, backed by the taxpayer.
http://www.startribune.com/business/18027834.html
Target had credit card losses of 8.6% in March, up from 6% in Feb. per Bloomberg yesterday. Yowza. And this is low-end retail. Anybody want to guess how ugly April is going to look?
I stood in line at Wally World the other day and watched the three people ahead of me use credit cards to pay for cash (you know they’re CCs because they didn’t key in their PINS which is required down here for debit cards). One gal in particular had that “Oh PLEASE go through” look on her face followed by relief when it did. How long can folks keep this up?
I use a “check card” all the time. It looks like a credit card but comes from my bank account immediately.
Why? If you need to do it to curb your spending, fine, but I’ll take the no-fee cash back card any day that allows me not to have to pay until a few weeks after the purchase. Just pay the full bill on time and you’ll be as happy as a clam in a nice tidal pool. And also considered a total dead-beat by your credit card company.
Yeah, but the credit card company still makes $ every time you swipe, regardless of whether you pay interest or not.
I have a feeling that our kind of “deadbeat” (we pay our balance every month) will soon be thought of as the good kind of “deadbeat”, as CC companies deal with real deadbeat payers.
I can’t seem to qualify for crap. I have a low FICO score because I don’t have much debt, and some garbage from Verizon. I’ve been fighting Verizon, but one collections agency will send it back to Verizon, then they sell it to someone else, and it’s a never ending battle. Now I’ve reverted to making YouTube videos about it. Since they are going to damage me with this garbage, I’m going to do the same to them.
A few months ago I got a secured credit card with BofA for $5500, and am working through steps to faking a credit score.
Zero debt. When I was younger I noticed that every jobless kid on a college campus could get a credit card, but I couldn’t with a decent paying stable job in a good field with a contractor at NASA.
I notice that many applications don’t care what you make, what you owe, or anything else. FICO is their world.
Actually, I use my debit card as a CC… I have a 75 cent fee for using my debit card on each transaction, but have no fee if I use it as a CC. I only use the debit at an ATM that belongs to the bank, so that I do not have to pay outrageous ATM fees. BTW, most POS allow you to skip through the Pin thingy, and use as a credit card, even though it shows up with a number pad. They do this in order for the merchant not to pay the 4 to 6% fee on the CC transaction, but you get stuck with the Foreign ATM fee.
Switched to a particular credit card for grocery and gas purchases ‘cuz it pays back 3%. Already gotten one $50 check from them. Oh, and we pay the full balance each month.
What company Bill? I need a new card
Yes CC name please. Love the cash back. Fidelity works for us but it is only 2%.
My BoFA Rewards card pays 1% cash back on ALL purchases.
It’s a Chase Visa. Pays 1% on everything and an extra 2% on the categories you spend the most on. In our case that’s groceries and gas. Just be careful you don’t sign up for the expensive extras.
BTW, after just three on-time, full balance payments, they raised our limit!
Chase Freedom Visa - 3% cash back on fast food purchases, groceries, and cell phone bill but can be redeemed with a 25% bonus, effectively making the total cash back 3.75% on those categories
Costco Amex - 3% cash back on “sit-down” restaurants and gas purchases
Countrywide Visa - 2% cash back on everything else.
I’ve started using my ATM as a credit card rather than a debit card when I buy groceries because the bank charges a fee to use it like a debit card. Pretty silly if you ask me, but in the end it means it costs me more to type in a pin than to sign a receipt. So I sign the receipt instead.
It’s intentional on the banks part - they want you to use it as a credit card because then they get the fees from the merchant.
I know a kid who works in a fast food place, he tells me that several times EACH DAY folks need to try more than one card.
They wrote off 8.6% of their credit card portfolio in one month?! At that rate, they will have written off 100% of it within one year!
I believe that Target is taking a write off at an annual rate of 8.6%.
Gil,
thanks, it is the annual write-off rate…but note the escalation from 6% in Feb. to 8.6% in March. Sorry for the incomplete post.
be careful with your “facts”.
those figures are annualized loses, not monthly.
while it’s not good, you are making it sound much worse. no need for hysteria.
Ambac takes massive writedown and loss - But hey! They’re still AAA rated!
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0YgRaG.IHIc&refer=home
“They’re still AAA rated!”
And the Soviet Union was a superpower right up until the time that they weren’t. Who might be next? Could it be the U.S. if we don’t change?
“Good evening, ladies and gentlemen. I am not an expert or a scholar or an activist. I am more of an eye-witness. I watched the Soviet Union collapse, and I have tried to put my observations into a concise message. I will leave it up to you to decide just how urgent a message it is.”
“My talk tonight is about the lack of collapse-preparedness here in the United States. I will compare it with the situation in the Soviet Union, prior to its collapse. The rhetorical device I am going to use is the “Collapse Gap” – to go along with the Nuclear Gap, and the Space Gap, and various other superpower gaps that were fashionable during the Cold War.”
http://www.energybulletin.net/23259.html
How about the hot Russian mail order bride gap???
When I was a lad growing up in the midst of the cold war, every picture of a Russian woman in our press, had her being about 53, with 7 chins and a puffy face…
Then the Iron Curtain fell, and it was like Cinderella in reverse, all the old hags turned into 23 year old hotties.
You’re right! All of them were loaded down with brooms and war medals and looked like the (very heinous) picture on the front of that extra-hot Russian horseradish and beet mixture that you can get in the E. European stores - What is it? Mother-in-Law’s horseradish? BOY that stuff is HOT!
Wish I could find hot horseradish. The stuff they sell around here is wuss-radish.
Fresh horseradish is hot. Buy the whole stuff and grate it yourself. Google is your friend.
“Mr. President, we must not allow a mineshaft gap!”
Good stuff in there…I really liked this:
“An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea. One such untenable arrangement rests on the notion that it is possible to perpetually borrow more and more money from abroad, to pay for more and more energy imports, while the price of these imports continues to double every few years. Free money with which to buy energy equals free energy, and free energy does not occur in nature. This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the US economy will be forced to shut down.”
aladinsane: I’ve read Dmitry Orlov. Mail-order bride is only funny when she’s not someone you know.
Empires rise and empires fall, it just takes less time nowadays due to technology - Rome - 1000 years, Spain - 250 years, Britain - 200 years, the United States - ?
This is why I think there is a behind the scenes movement to jumpstart a North American Union. The PTB’s know that the collapse of the US is inevitable, and are preparing for its replacement.
Who would benefit from such an arrangement? Surely not the US, which would be locked in with a social welfare state (and all of its attendant costs) to the north and a third world tinderbox to its south. If you think tensions within the US are bad, those problems would only become an order of magnitude worse.
I just don’t see what the upside is from anyone’s perspective here.
Access to Canada’s natural resources and to Mexico’s cheap labor. The welfare state will go out the window.
The upside is MORE POWER for the rulers of the NAU. If you still think that those in power care about what is best for the “country” you are naive.
I should point out that the US has largely caught up to Canada as a welfare state. The main difference right now is Canada has universal health care (which still costs less per capita) and the US has corporate welfare.
There is plenty of reason to believe this is true. Bush, Harper and Calderon were meeting in New Orleans this week to restate the terms of NAFTA and to discuss “managing the North American economy”. That is from a White House press release.
Empires fall when they stop conquering and exploiting their neighbors.
Our problem with Iraq is that we went in to get rid of Sadam and set up a democracy. Had we gone in to enslave the local populace under an iron fist and steal their oil, we’d be MUCH better off.
AAA ratings have once again proven that they aren’t worth sh*t.
I wonder how many companies are quietly deleveraging with the help of the fed on the shadow market of loans through the discount window?
They will someday rise again to make more bad financial decisions and leviathan executive compensation knowing that Uncle Sam will give them our full faith and credit.
I have some AAA rated toilet paper. My fingers go right through it. Congress should investigate.
Credit Suisse expected to announce loss “a small group of traders mispriced values” - imagine that…
http://www.bloomberg.com/apps/news?pid=20601109&sid=apUQ.jMF809U&refer=home
“a small group of traders mispriced values” -
Oopsie! I’m tellin’ ya, giving these jamokes free rein is like letting kids play with matches and every bit as destructive.
I thought all the losses were behind us? What it Fitch or S&P or Moody’s that said they think it is over? Was it CEO Blankfein of Goldman Sachs who said he thought it was over (meanwhile GS is shorting the hell out of the market while he says that).
I keep getting these email alerts from the mls system when properties prices are updated/changed around the Keys.
Now that the mania has faded the prices still seem so insane, I mean sure if its on the water and/or has dock/boatslip, or it super nice , or both it will probably always be worth quite a bit.
But there are so many little crappy places, not on the water in Key West that are still priced > 200k. The owners keep bouncing the prices around and once in awhile a the nicer cheap places sell but it still seem outlandish to pay so much for so little.
I would be very interested in using that feature. Which Realtor/MLS website has that feature to notify you of tracked houses that drop their price?
no plans:
Seven out of 10 troubled mortgage borrowers remain without a plan to work out their loans despite increased industry efforts to help them, according to a new report from a coalition of state attorneys general and banking regulators.
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/22/AR2008042201339.html?nav=rss_business
Got cash?
Cash: The ultimate soution to one’s financial woes.
You mean, that stuff that’s lost 40% of it’s value over the past 5 years? Why would anyone hold a commodity whose value gets decimated whenever the government needs some extra spending power? ‘Turns out, cash is a godawful store of value.
hmm, I just bought a bunch of stuff with cash today. Glad nobody told the store manager that it was worthless.
“Turns out, cash is a godawful store of value.”
Ah, but it can’t be beat as a way to solve one’s financial difficultities.
See, and that’s why I argue that the MSM’s “cult of the FB” is a sham. These FBs are not a cohesive political force, they are merely a conveinent cultural vehicle to allow the pols to help their sponsors.
7 out of 10 have no plan because… they’re waiting for the lender to make a plan for them? How about making their own plan, like selling the house if they can, or getting a weekend job to help pay the mortgage, or cancelling HD Cable and their expensive cell phone service? Oh wait, drop that last bit on HD and cell. You can’t expect people to bite THAT bullet, can you?
Selling one of your 2 or 3 cars helps a lot too. Cars, especially newer ones, cost a great deal of money to own and operate.
chasing fannie:
Treasury Department officials have stepped up efforts to strengthen the regulation of Fannie Mae and Freddie Mac, the two largest buyers of home mortgages, pressing key senators to break a legislative stalemate that has lasted for years.
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/22/AR2008042202865.html
Insurer Says Economy Has Dented Its Prospects
United Health
In recent years, despite soaring medical costs, insurers have made big profits by keeping premiums well ahead of health care inflation. But analysts say that business strategy may be reaching its limits, with companies finding it harder to raise prices without losing substantial numbers of customers.
“The market is not growing — it’s shrinking,” said Sheryl Skolnick, a health care analyst for CRT Capital Holdings in Stamford, Conn.
They have finally bled their customers to the point that they either find other sources or go without. What a great way to administer health care. I have as much sympathy for the HMO crowd as I have for the poor housing specuvestors who are now losing money, which is nil.
Want to fix healthcare financing? Make HMO’s non-profit.
The problem is all the illegals and people without healthcare. They are taxing the system. So what do hospitals and doctors do? They raise the premiums on the few that can pay. That in turn causes more insurance companies to raise rates which causes moe companies to offer coverage that isn’t so good and doesn’t cover so much. It’s a death spiral.
I am sick of hearing stories of families who had no debt, good jobs, great credit, getting ruined because they have a child who has an illness or one of them gets cancer.
Only in America does this seem to happen. Meanwhile, some illegal immigrant just had an operation and is heading back to their home country.
T,
4 years ago, I was diagnosed with something while uncovered. The hospital said the surgery would be 16k and to double check with my insurance that it would be covered. I said I didn’t have insurance and I’d be paying my own way. They said, oh ok, it’s 12k for people without insurance. ?????
It was good news at the time but, why are their two different prices?
Why are THERE two different prices.
Because they want you to pay up front? They charge the insurance a higher fee because they know they insurance company will readjust it downwards.
Don’t worry. You definately wont loose you’re standing on the blog if you mispell a singal wurd.
Because the hassle the insurance company puts the hospital and Docs through adds to the cost. I have 4 FTEs that deal with insurance co. They have Arcane eseoteric rules and regulations we must follow to get paid, each insur co has their own rules. Their model is called “just say no by attrition”—they want to wear you down so you give up on the small payments. == profit for them. It addds about 30% to the cost of health care.
All non productive work shuffling papers. One set of rules is what we need. Even if you don’t believe in national health care there should be one set of rules, insurers can take a look at the set of rules and set a price and compete with one another. There should be one central biller that pays or bills the insurance companies so individuals and docs don’t have to hire an army to get the insurance companies to pay. I agree with charging Mexico and other countries for this crap. We should stabilize them and fly them home.
You are right on the the illegal part I do my clinical rotations in Arrowhead regional center ER. Last night “illegal” comes in “no abla”
chest pains and sob terns out he has an aneurysm needs open heart
surgery. Thats going to cost at least $200000. We should bill Mexico.
peter a
I see the same stuff at Kaiser Permanente’s ER. One guy gets off a plane a few hours earlier, and the next thing you know the taxpayer is picking up the tab on his heart condition. Wow, what a great country this is.
The illegals/*legal (*but not citizens) not only abuse our ER and Trama systems, they use ambulances as a taxicab.
Preach it, Peter! We should also be charging Mexico interest for any open balances left unpaid after 30 days. And if that means we put a lien on their oil to do it, so be it.
I did my training at LA county/USC….we would see all sort of once in a career diseases because we were the tertiary care for south of the border….great for medical training but not for the tax payers.
Making HMOs non-profit will NOT fix the problem. It will remove any incentive for them to innovate and operate efficiently.
The real solution - make all healthcare on a cash basis by expanding HSA accounts.
I have an HSA account never want to go back. There is an incentive for me not to waste money on useless tests and to stay healthy. If I need a doctor appt, I pay cash from my HSA and it’s much cheaper than what they charge insurers for the same procedure.
The big problem is the number of people covered in this country who are fat slobs and eat all the time and never get preventative check ups or the like, and go to the ER everytime they sneeze twice in a row.
It will remove any incentive for them to innovate and operate efficiently.
*************************
Exactly how do HMOs innovate and operate efficiently. They serve no useful function where healthcare is concerned. They are an additional cost that needs to be covered by the patients/clients.
It doesn’t help that they provide crappy service with all of their cost cutting moves such as medication pre-authorizations, denial of claims based on minutiae, and have increased their costs due to onerous paperwork and servicing their stockholder’s needs over their customers.
My service experience with United Healthcare insurance at various small companies has been very positive. I just get tired of sitting through the meetings: “What do we do this April? The healthcare costs to the company are up 30% again - what do you employees prefer we cut?” After 2 years of absorbing the cost increases through deductible increases, that well is dry.
The Bottom Is Up Ahead
NOT
Steven Pearlstein
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/22/AR2008042202868.html?hpid=topnews
“Don’t be fooled by the latest sucker rally on stock markets or predictions that the “worst may be behind us.” The first thing you need to remember is that these guys still don’t have a handle on what they’re dealing with — nobody does.”
We are desperate to sell our home. We purchased it in November of 2005 at 231000 and added 25K in upgrades! We are now selling it for only $225000 beacuse we are moving in a month. When you use our realtor, We will sign over the title of a 2003 Totoya Highlander with 60000 miles. Leather interior, power everything, moon/sun roof — all the bells and whistles. (offer must be placed and accepted by April 21st to receive the bonus of the FREE HIGHLANDER
http://phoenix.craigslist.org/rfs/616906939.html
Dump the realtor and take another 12k off the price.
$225k for that house actually looks like a really good buy from where i’m sitting. i’d be happy with something like that. in my town $300k buys a 100 year old house with no insulation.
What’s this “huge” loss they’re talking about? $231 plus $25k in (questionable) ‘upgrades’ equals a $261k purchase at the top of the market. Selling at $225k is a $31k haircut — or 12%
Only -12% from the 2005 peak? Don’t know about you but that sounds like a relatively minor scrape. I’ll wait for the deep gouging phase of the market, thank you.
This made my day! Oh, Canada….
Toronto’s $1 home experiment fails
And for dessert,
Toronto’s bubble is collapsing fast…
House collapses in upscale mid-Toronto neighbourhood
So long time gold buffoon Howard Ruff thinks hes been vindicated? Not with hard reality like this;
“Since the Hulbert Financial Diegest began following in 1980, at the peak of the last gold bull market, the Ruff Times has achieved a 6.8% annualized gain, vs. 12.1% annualized for the total return DJ-Wilshire 5000.”
http://tinyurl.com/3hocqu
I guess gold ROI really does suck.
I’ll give you once chance to back out, buddy
http://www.tnr.com/politics/story.html?id=ec466d61-a900-414c-8daf-16ff27ccf85c
The wager is based on your assertion that McCain would get elected. Whats changed?
What’s the bet?? Money or beer??
Tx has $25 on McCains election, Nov08.
25 ?? I’m disappointed with both of you.
Braggin rights… Sorry I started this particular increment.
He lost upscale arty Bucks County by 62 to 38 percent.
That’s stunning. Bucks represents exactly the demographic that’s supposed to be BO’s. The day before the election, every townhouse in my community had an Obama hanger on the doorknob - and it was a high quality piece. Four color glossy card stock. All I could think was this guy’s got money to burn.
And he still lost.
He’s not electable in the population at large in my opinion, I recall McGovern’s campaign in the early 70s and Obama’s is following the same path. The big difference to me is that McGovern was a highly decorated WWII bomber pilot ( an advantage he failed to use against Nixon when the repubs were attacking his patriotism) and Obama has no military background (or any real public service background). I think that Clinton is the Dems best choice. Whether she’ll get nominated is up in the air.
phillygal,
What do you think of McCain winning PA in November? With the numbers I saw last night I am thinking he has a real good shot there in the fall.
McCain does have a good shot at recapturing the Reagan dem vote. PA went demo in 2004, but by about two points. It’s not a solidly blue state. Yesterday, most of the voters who were last minute deciders went with HRC. The “bittergate” remarks did have an effect.
“I recall that the many of the “affluent white liberal areas” in the San Francisco Bay Area were won by Obama.”
California is not in play in the general election, so it does not matter much. When your state becomes so predictively Democrat or Republican, you lose your juice.
Didn’t Obama refuse to play the street money game in Philly? I had heard that you can’t win in Philadelphia if you don’t hand out $20 bills to anyone that walks by.
He did refuse to hand out walkin around money but he won the city handily. He didn’t have any problem in cities with high African American representation. It was the inability to close the deal in the affluent white liberal areas that is cause for concern. According to my dem friends.
I recall that the many of the “affluent white liberal areas” in the San Francisco Bay Area were won by Obama.
Many appear to be sick and tired of the Clinton bullshit.
I’ve been sick of the Clinton BS since the 1990’s, but sadly, I doubt that will stop Billary from doing whatever it takes to get “her turn” to be president. The Clinton Crime family is very powerful…
More interesting is the logistical meltdown this election represents. It should be possible to go from pre-campaign schmoozing to primaries to a completed general election including swearing in ceremony in six months or less. Why do we tolerate political game players stretching out this process so that they can maximize opportunities for manipulation?
Well the state parties didn’t help with their stupid front-loaded primaries.
The blogosphere isn’t large enough to contain all the corrections to your misstatements.
Watcher, your beef is will the WSJ and Hulburt. Not me.
Hell, even the WSJ is talking about getting extra food…
Load Up the Pantry
April 21, 2008 6:47 p.m.
R.O.I.
By BRETT ARENDS
I don’t want to alarm anybody, but maybe it’s time for
Americans to start stockpiling food.
No, this is not a drill.
You’ve seen the TV footage of food riots in parts of the
developing world. Yes, they’re a long way away from the U.S.
But most foodstuffs operate in a global market. When the
cost of wheat soars in Asia, it will do the same here.
http://online.wsj.com/article/SB120881517227532621.html
Food Crisis Is Depicted As ‘Silent Tsunami’
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/22/AR2008042201481.html
More than 100 million people are being driven deeper into poverty by a “silent tsunami” of sharply rising food prices, which have sparked riots around the world and threaten U.N.-backed feeding programs for 20 million children, the top U.N. food official said Tuesday.
“With one child dying every five seconds from hunger-related causes, the time to act is now.”
Yep, the time to act is now. On last night’s news, three reasons were given for this situation:
1) Climactic conditions, with drought and floods having decimated crops in some parts of the world.
2) Commodity traders having a ball and manipulating the crap out of prices.
3) Corn based ethanol scam.
As I posted in the Cali thread last night, we can do something about the last two points. Commodities trading can be shut down on an emergency basis. The ethanol scam can also be shut down. I mean, who’s gonna care about the price of fuel if they can’t eat?
The biggest reasons for rising food costs are rising input costs (fuel, etc.) and rising demand (billions of people). Those are not likely to change.
China just signed a deal with POT for higher potsah prices they will and can pay up. See IPI (intrepid potash) they went up yesterday on the IPO. Food input costs are way up. See if this ends like theDry Bulk Shipping frenzy ?
“Climactic” conditions should be “climatic”. Arrrrgh the pain. Darn Jesuits!
Durum wheat (used for pasta) is not traded on an exchange. The price of durum has increased faster then the price of wheat traded on an exchange.
Hoz (I think) pointed to a March 13, 2008 Lehman Brothers report titled ‘Non-exchange traded metals outperform exchange traded metals’ in a comment about traing unusual metals.
There is more public information collected and published about exchange traded commodities. More information might help prevent panic buying and selling.
“But most foodstuffs operate in a global market.”
Globalization. THE WORST. IDEA. EVER. Doesn’t seem to working out for anybody except a bunch of traders, maybe.
The traders depend on demand. That is why they want markets like China and India opening up. This is also taking a toll on farmers who use the CBOT because costs of hedging have increased astronomically. It’s ridiculous. Many now are asking the government to get the traders and hedge funds out of these markets. Yeah, they add liquidity but at the expense of what? More liquidity. Liquidity the FED GAVE them with super low interest rates. Time to jack rates up.
so the problem is not the traders and hedgefunds; the problem is the FED, nothing else.
This is the reverse of what is true. During this time of globalization worldwide poverty has greatly decreased and many nations have made progress with industrialization and modernization. Global trade has helped everyone and continues to increase opportunities. If this were a nation of reason then you would at least attempt to use facts to support your position, but because we have sunk to mere posturing with all politically charged ideas using all caps and minimal sentence fragments somehow counts for something. How about this? MY. CHILEAN. FRUIT. AND. WINE. FROM. MY. COLD. DEAD. HANDS. ANTICAPITALIST. XENOPHOBE. Did it work? Do I get a prize?
Depends on one’s perspective, I would guess.
Here in the U.S., globalism has decimated wages for productive workers while boosting income for traders and speculators. This has caused the wealth disparity so many bemoan. It does not make for a healthy economy here.
Color me cynical, but I don’t think that there is so much a lack of food as much as a lack of profitable markets.
The Chinese and Indians are moving to urban areas and therefore aren’t self-sufficient agrarians like they used to be. These countries are curtailing their exports in a protectionist move to feed themselves and slake increasing domestic demand for luxury goods.
Protectionism is a weapon we can’t defend against when the trade imbalance is so high. If we retaliate it will hurt us more than it hurts them. The only way for us to combat it is to start growing our own food more efficiently and cheaply on our own soil.
I’m already set. Still have a lot of stuff from the Y2K meltdown and the bird flu pandemic.
I read a few books about the plague in the middle ages and a few more about the 1918 Pandemic and then realized H5N1 is the scariest virus ever. We have about 3 months saved up.
Sorry, I guess my sarcasm wasn’t strong enough.
IMO, too many people get caught in the static analysis trap, as in, “Gosh, now there’s a food shortage. It’ll be even worse next year.”
Humans can and do improvise, adapt and overcome what appear to be insurmountable problems. Sometimes the change (adaptation) that occurs is completely unforseen, as in, “I never saw that coming.”
A good and prudent idea. I do and we save tons of money - Tuna, chicken, beans, rice (lots of rice), bread flour, biscuit flour, shortening, canned goods, cereal - all purchased months ago have significantly inflated in price at the local stores. San Marzano tomatoes (a must for pizza sauce) @ $3.50 a 28 oz can - now $5.48. Flour @ $1.98 5 pound bag - $2.89, Solid white albacore tuna @ 98 cents a can - $1.20, the list goes on. But milk has taken a tumble from $4.89 a gallon to $4.09 ??? Ideas on this?
Use stimulus package money to buy additional food.
Americans hoard food as industry seeks regs
Farmers and food executives appealed fruitlessly to federal officials yesterday for regulatory steps to limit speculative buying that is helping to drive food prices higher. Meanwhile, some Americans are stocking up on staples such as rice, flour and oil in anticipation of high prices and shortages spreading from overseas.
Their pleas did not find a sympathetic audience at the Commodity Futures Trading Commission (CFTC), where regulators said high prices are mostly the result of soaring world demand for grains combined with high fuel prices and drought-induced shortages in many countries.
The regulatory clash came amid evidence that a rash of headlines in recent weeks about food riots around the world has prompted some in the United States to stock up on staples.
Costco and other grocery stores in California reported a run on rice, which has forced them to set limits on how many sacks of rice each customer can buy. Filipinos in Canada are scooping up all the rice they can find and shipping it to relatives in the Philippines, which is suffering a severe shortage that is leaving many people hungry.
http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080423/BUSINESS/868303815/1001
My dog is illustrating hoarding behavior in mammals as we speak. I dropped a package of corn tortillas on the floor this morning and decided I’m not THAT hungry that I want to eat them. So I left them in the dog dish. One of the dogs managed to get about half the package in his mouth and took them into the living room, where he’s now guarding them as if he were starving. They normally won’t even eat such things, they eat better than I do, which isn’t that hard…(except I DO NOT share my frosted animal cookies with them, well, not much)…
But…I’m thinking of the irony of starving people all over the globe as my dog sits here with discarded corn tortillas. Yes, we Americans have had it pretty damn good. Speaking of food, a lot of the fruit trees here in W. Colo and E. Utah have frozen from the cold weather, may have high prices for fruit this year, too.
I love iced animal cookies…
My wife says I have the appetite of a six year old. She’s probably right.
Farmers and food executives appealed fruitlessly
Japan: Tackle crisis with U.S. public money
Cabinet minister says taxpayer bailout is needed before situation worsens
TOKYO - Likening the U.S. credit crisis to a broken bathtub draining water, Japan’s financial services minister urged Washington on Wednesday to inject public money to fix the problem before it gets worse.
Sounding almost alarmist, Yoshimi Watanabe used unusually blunt language to warn that drastic action was needed to address the crisis that has battered global markets.
“If there is a big hole in the bottom of the tub, no matter how much hot water you keep adding, you will never have enough hot water,” Watanabe said in an interview with The Associated Press.
http://www.msnbc.msn.com/id/24269007/
Watanabe says we are waterboarding ourselves to debt…
I love your puns!
Watanabe also said he was worried about export-reliant Japan and its massive dollar holdings if the U.S. fails to wrest itself out of the credit crisis. Direct subprime exposure among financial organizations here is believed to be relatively small.
Wouldn’t such a massive bailout lead to a more rapid collapse of the dollar and treasuries? Wouldn’t it lead to massive inflation and decreased consumption of manufactured goods? It would save banks and that’s about all.
Ah, yeah, we should take Japan’s advice on how to handle a housing bust and bank crises! Yep, that’s the ticket…………….
testify brotha
Florida Association of Realtors stats out this morning for March. Ouch they’re ugly. Sales for the state were the lowest for any March since 1993. Sarasota county (area I’m tracking) prices are now down by a full 30% off-peak. Even so - that’s still only back to 2004 levels - things where that crazy in 2004-2005.
I wonder how things are working out for Robert Milligan, a 26-year-old broker and owner of Shells Realty in Sarasota, says he is convinced that the market has hit its nadir, a notion shared by some Florida economists like Hank Fishkind.
“We have hit bottom in Sarasota,” Milligan said. “I am eating my own cooking by purchasing property now.”
Milligan has bought six houses and plans to hold them as rentals. He has found single-family homes in Sarasota that sell for $150,000 or less, and can finance them as rental property for $1,200 to $1,300 per month to cover his expenses.
http://www.heraldtribune.com/article/20080226/REALESTATE/802260490
I wonder what kind of haircut he has taken considering this article was printed on Feb 26. Things in Sarasota are getting worse, not better.
All I can say is “Good luck with that”!!!
This statement:
is entirely different than:
(emphasis mine)
I wonder which is the true statement?
Prices are working they’re way down to rental equivalents - but they’re not there yet. And they will overshoot - that I’m certain of now. In 3-5 years prices will be well below rental equivalents, and Milligan will be kicking himself for not waiting. Well - that’s what you get for drinking your own kool-aid.
New Realtor slogan.
Sell now or be trapped forever!
The Great American Shopping Spree
http://www.realclearpolitics.com/articles/2008/04/the_great_shopping_spree.html
My Macro-econ professor predicted the slowdown in BBs spending right on the mark. He showed us a chart that predicted the off-the-cliff decline in spending that was about to occur. I believe the worst part begins in 2009 according to those predictions when the BBs (including myself-1961) are in full scale retirement and “OH CRAP! I don’t gots no MONEY!” mode. Combined with the current maelstrom, I think that we have far to go ( and much pain) until this plays out fully IMHO.
Are you taking macro right at the moment? If so — great timing — especially if your professor’s world view is grounded in reality!
BTW, when I took graduate macro (spring 1998), my professor indicated the business cycle was “peaking” — only two years early for the tech stock crash…
Yeah, and the same breed of geniuses at the Univ. of Chicago shorted AMZN at 200, lost their shirts utterly and completely, and covered at 300.
Most fun ever especially if you took the other side.
I know several self-styled Alt-A Bay Area tech tycoons who did the exact same thing, covering at around $300.
It nearly caused a few divorces.
No, this was about 5 years ago, I went to school on the GI Bill after I retired and got a dual degree In Int Relations and Microbio. Finished them in 2005 (at 44). So the classroom experience is still fairly recent. Took a good deal of econ because I enjoyed it so much. A lot of what my professors were warning about then has come to pass and I’ve been in good stead by heeding their warnings so far.
Good point. It seems like as the boomers get set to start retiring - they’ll take a harder look at where their money will be coming from for the next 20 years or so - and won’t like what they see, and start cutting expenses.
Beginning with (drum roll……. ) trying to sell their house - i.e. downsize.
Packman…. the retiring boomer demographic is one that I believe hasn’t been parsed enough on this blog. Just based on my perceptions and what I see in the northeast, I believe the largest wave of this group has ALREADY bought retirement housing and/or retired because many in this group can lean heavily on the retirement system as they are the first to the pension trough and retire as early as age 52 and public pensioners can retire at 55 which puts the largest group of boomers retiring in years 1997-2000.
Thoughts?
Exeter,
The BLS shows a slight increase in the labor force participation rates (2000 vs 2006) for men 55+ and a good sized increase for women 55+.
Manybe your area was hit by a wave of early retirees due to plant shutdowns.
http://www.census.gov/compendia/statab/tables/08s0570.pdf
Maybe some of the public sector employees can get out at 55 or earlier, but not nearly as many private sector employees can get away with that. Then the question becomes what is the ratio of public/private employment? In the NE, I suspect that ratio is higher than in other parts of the country, but elsewhere the numbers look much different.
It is definitely preferable to be the first to the trough. Of course, the cohort of boomers born from 46 until 55 or so always have had the better deal than those born 55-64.
your observation is certainly true for Europe
our boomers are the wealthiest generation of ordinary citizens in history, and the next generations will pay dearly for that. They had the best paying jobs, unrealistic super-fat pensions (which they never really paid for), very early retirement (yes, sometimes between 50 and 55) and of course they enjoyed the EU housing bubble to the max. Many of them have already bought, but that doesn’t mean they cannot buy more. Politicians keep stealing money from other citizens to bring even more benefits to this group; after all, most politicians here are in the same boomer club.
SEC won’t say why it dropped investigation into Bear Stearns collapse… Hmmmm….
http://www.marketwatch.com/news/story/sec-wont-say-why-ended/story.aspx?guid=%7B9AB84003%2D65B1%2D4A35%2D97AC%2D11B3979BC420%7D
Either they found no evidence of wrongdoing or they might have found a massively systemic legalized fraud, and uncovering it at this time would possibly destabilize the banking industry.
Or, perhaps they found wrongdoing and a huge risk of systemic failure, which would only be made worse by pursuing the wrongdoers.
the french rogue trader wasn’t available to blame?
An analyst on CNBC said the FED needs to raise rates a quarter point and shock the system in order to pop the commodity bubble. They can then get back to cutting rates the meeting after.
I guess it will show that the FED is aware of inflation and isn’t afraid to raise rates. He said this would bring oil back to $80 a barrel practically overnight.
Sounds like a catch 22. They have to lower the rates to ease the tight credit market; then they have to raise them to discourage speculation in the commodity markets; then they have to lower them, etc. etc.
Been lurking for a while and enjoying the comments. The Fed is stuck. We have a dying economy, so the natural, historic response is to cut rates. However, when they do that, they weaken the dollar and drive inflation and commodity prices higher. Also they bond market shrugs it off and moves rates as it sees fit. So they can try to move markets, but in my opinion, for better or worse, they are (or are becoming) irrelevant. This is especially so since they wasted all their prior cuts and got very little in return, other than to weaken the dollar and drive up commodities. With the most ARM resets coming in June and rates headed up, significantly in just the last week or so, Summer and Fall are likely to be much worse. Just my 2 cents….
REskeptic, where in upstate do you hail from?
That sounds like a plan! Beats doing nothing meeting after meeting. It would keep the FED in the news.
You’re right Tom, they probably don’t actually have to raise rates. BB making statements that inflation is a worry and the cutting has stopped, would set off commodity panic and a dollar rise.
You know they have to have a ton of stop losses in place. Once they begin to unwind and the deleveraging starting happening, the price will correct.
April 23 (Bloomberg) — European Central Bank officials are raising the prospect of interest-rate increases for the first time since the global credit squeeze began last August, stepping up their battle to keep inflation in check.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1a6PSZX68C4
but other ECB officials (mostly those from France and southern EU countries) are saying exactly the opposite, they want to inflate away the problem.
Hence the reason the Euro will disband, Germany will convert its “D” Euros back into D-Marks, and the “F” and “I” Euro accounts will collapse. The D-mark could become “the” reserve currency if this happens.
maybe … the problem with a splitup in euroland is that the economies that are doing relatively well (like Germany) will pay the highest price for it.
Wrongo, the Germans will keep their low interest rates and the Mediterrano countries will be clobbered by the return to the high interest rates of pre-Euro days.
Inflation never solves any problems. It just puts off paying for them, with interest.
Pay for performance comes to California?
Possible pay cuts for California statewide elected officials:
http://tinyurl.com/4ks3xp
“A state commission is considering cutting the pay of the governor, lieutenant governor, attorney general, legislators and other state elected officials. In most cases, those salaries are the highest in the nation for state elected officials, according to a survey prepared for the commission.”
“I don’t think the people would like to see all the salaries stay the same when some people are out on the streets and jobs have been eliminated,” said Charles Murray, chairman of the California Citizens Compensation Commission, which met Tuesday.
“The commission was created by voters in 1990 to decide pay and benefit levels for eight statewide elected officials, four members of the tax-collecting Board of Equalization and the 120 state legislators. It met for about 20 minutes and asked its staff for a written legal opinion on whether it could cut pay levels.”
The Cali state budget deficit in Dec. 07 was 14.5 billion. Does anyone have an update on where it is now? It’s got to be a lot higher now.
NY and NJ are also deep in the hole, but no news from either state on how big their deficits have grown in the first quarter.
A little over $15 billion was the last relatively solid figure I heard. If you want the latest on the CA budget then follow the Legislative Analyst Office reports from their site:
http://www.lao.ca.gov
There is much detailed information there to the point that relevant stuff may tend to get buried. Look around and almost anything you might want is there including projections and alternatives their bean counters have suggested.
Thanks, Mole Man.
Delta, making the news with huge loss in first quarter. 6.4b
And that’s with people still flying…wait.
With the Euro costing $1.60 some kiddies might not get their senior year trip to Europe.
The Fed pretty much drove the economy off a cliff with its precipitous rate cuts, 1.25 pts in approx 9 days. Higher input costs and slowing consumer demand are crushing businesses. Unemployment will soar. Has anyone ever seen this many rookie mistakes in such a short space of time? It’s bloody frightening.
As the dollar continues its relentless six-year slide against the euro and other main currencies, the question is being asked more and more: what would it mean if the dollar ceded its global dominance to the euro?
The question is a serious one because the US Federal Reserve is pumping new dollars into the global economy at an astounding pace. A broad measure of US money supply growth is increasing at a rate not seen since 1971 when President Richard Nixon imposed price controls and ended the dollar’s convertibility into gold, which recently roared above $1,000 an ounce. With consumer prices having climbed 4 per cent from a year ago, and wholesale prices having soared 6.9 per cent, presaging higher consumer price inflation around the corner, we are living witnesses to Milton Friedman’s famous dictum that “inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output”.
http://us.ft.com/ftgateway/superpage.ft?news_id=fto042220081449210175
The Sky is not Falling
http://www.realclearpolitics.com/articles/2008/04/the_skys_not_falling.html
Yeah and the house is not burning down, the living room is just engulfed in flames. Nothing like earlier fires, which destoyed entire houses.
Saying things are not yet like the depression, ignore 2 facts:
1) things are bad
2) they are likely to get much worse
The US is facing unprecidented challenges, and we dont seem to have a plan to address them or leaders to take them on.
No problem because DiTech is still running ads.
Things that make you go hmmmmm.
No its not and the RE trees were not growing to the sky a few years ago either. I guess we are half way through this thing?
The second half is when all the sheep come out and start bleating.
I think we have to endure a few years of inflation then the FED slams on the brakes. I think avoiding a Deflation now and then dealing with inflation later is the plan.
I must say that when I compare the quality of the comments on that article - which appeared in the NYT for heaven’s sake - to the comments on this board, I am grateful for the moderator.
I just received this “personal” offer via e-mail. I am so sad it had expired before I could respond. I hope I am not betraying a confidence by sharing it with you. I consider it a masterpiece of its genre. It hits all the right notes. Enjoy.
“Upon receiving the offer, you will have 72 hours to take advantage by writing a purchase agreement in one our communities.
It’s obvious you have been waiting for the perfect time to buy—that time is now! Never have prices and interest rates both been at all time lows. The positive media attention regarding the lowered interest rates and the government’s new Stimulus Package brought a record breaking number of new prospects in our doors! We want to give you one last opportunity to take advantage of a fading buyer’s market before we start raising our prices again to meet the rising demand. We are getting back to the days when customers fight over lots and try for the earliest appointment to ensure they buy before the price goes up or incentives go away. You are being offered an opportunity of a lifetime. Buy a new home at the best price while interest rates are at all time lows. We look forward to speaking with you on Monday, April 21.
Sincerely,
Kelly Fuerst
Internet Sales Administrator
Ryan Homes * Virginia & West Virginia
Sounds like a bubble to me.
We want to give you one last opportunity to take advantage of a fading buyer’s market before we start raising our prices again to meet the rising demand. We are getting back to the days when customers fight over lots and try for the earliest appointment to ensure they buy before the price goes up or incentives go away.
Oh yes, in West Virginia buyers soon will be scrambling over each other to pay top dollar for a McCrapshack.
most def
Puhleeese post some contact info for Kelly. I HAVE GOT TO GET IN ON THIS. These opportunities don’t come along every day. Oh wait, something new in my inbox…. Let’s see…. Never mind Kidbuck, I’m buyin’ me a timeshare.
It’s different this time in California. Only three years into the current real estate bust (2005-2008), the real estate market has already surpassed the peak foreclosure rate hit six years into the last bust (1990-1996) by a factor of three.
San Diego foreclosures
3,666: First quarter 2008
2,296: Fourth quarter 2007
1,182: First quarter 2007
Around the state
Of the 7.9 million homes and condos in California, 47,171 went into foreclosure and 113,676 default notices were issued during the year’s first quarter. In the last real estate downturn, the highest quarterly foreclosure count was 15,418 in the third quarter of 1996.
Most of the loans that went into default originated between August 2005 and October 2006.
Owners throughout the state were typically five months behind in their payments when lenders started the default process. The cumulative missed payments was a median $11,474 on a mortgage of $346,750.
Nationwide, existing homes continued to fall last month
By Martin Crutsinger
ASSOCIATED PRESS
April 23, 2008
WASHINGTON – Sales of existing homes fell again in March, the seventh drop in the past eight months, as the spring sales season got off to a rocky start.
The median price of a home was down compared with a year ago, and some economists predicted home prices could keep falling for many more months, given all the troubles weighing on housing, including a severe credit crunch and a rising tide of foreclosures.
The National Association of Realtors reported yesterday that sales of existing single-family homes and condominiums dropped 2 percent in March to a seasonally adjusted annual rate of 4.93 million units.
The median price of a home sold last month was $200,700, a decline of 7.7 percent from a year ago and the seventh consecutive year-over-year price drop. It was also the second biggest decline after a record 8.4 percent drop in February. These records go back to 1999.
http://www.signonsandiego.com/uniontrib/20080423/news_1b23housing.html
Brunhillary talks more and more like Barack. Did she get a vocal coach?
Dataquick has a California foreclosure graph which visually illustrates how much faster foreclosures have ramped up since 2005 compared to the rate of increase over 1992 through the 1996 peak (data from 1989-1992, which I believe would have established the increase in foreclosures back in 1990, is not included).
That March sales graph back to 1988 is also a doozy. It shows that the before the March 2008 level of 24,565 homes sold, the March sales figure back to 1988 never dropped below 30,000, even in the worst of the early 1990s recession years. So much for the red hot spring sales season…
Amazing how dismal the spring selling season is this year, across the country even.
Actually - I would say that this year, unlike last - there was very little “wait for the spring bounce” statements from the REIC. Some, but not nearly as many as last year. I think even they have given up hope at this point - overwhelmed with too data showing that no bounce is coming, and burned by past predictions of a quick turnaround.
Back about 2 years ago on this blog - the question often arose “when will be a good time to buy?”, with the determined answer being “when everyone says RE is a really bad investment”. Well, we’re almost there. My statement at this point would be - wait until everyone says that RE is a horrible investment - then wait 2 more years to buy.
‘…“when everyone says RE is a really bad investment”. Well, we’re almost there.’
No — we have already been there for a couple of years already, but the time to buy is when everyone knows that real estate is a terrible investment; not there yet.
Greenspan’s black swan is landing.
US regulator fears wave of bank failures
By Daniel Pimlott, Krishna Guha and Joanna Chung in Washington and Ben White in New York
Published: April 22 2008 23:52 | Last updated: April 22 2008 23:52
US bank failures could rise above “historical norms” as a weakening economy puts pressure on badly underwritten loans, particularly in commercial real estate, according to a bank regulator.
In an interview with the Financial Times, John Dugan, who oversees about 1,700 national banks as comptroller of the currency, said the growing problems for lenders follow a period of almost four years in which no institution regulated by his agency had failed.
As mentioned, it depends on what you mean by commercial real estate. There was a price bubble in 2006 and 2007, but fundamentals (rent, vacancy) are OK, and there wasn’t a lot of overbuilding, except in retail in certain markets.
I think construction lending for housing is more likely to sink banks.
“There was a price bubble in 2006 and 2007, but fundamentals (rent, vacancy) are OK, and there wasn’t a lot of overbuilding, except in retail in certain markets.”
Beg to differ on that. Vacancy rates are rising dramatically in some areas - e.g. in NoVA. Meanwhile building is in full process - I can see 4 whole new office complexes (not just single buildings but whole complexes) from out my office window. These are not retail complexes, for the most part.
“there wasn’t a lot of overbuilding, except in retail in certain markets”
Like…strip malls and office buildings in California. Especially the strip malls, and especially near the new housing developments that are becoming ghost towns as it becomes clear that half of the homes were bought by investors/speculators…no residents equals no customers equals no commercial tenants equals no makey the payments on your commercial RE venture.
Vacancy rates are very high in San Diego County. I realize you eastern sea board types don’t get out here often, which helps explain why many of the policies that come out of Washington to address California issues seem out of touch with reality (e.g., hair-of-the-dog housing market stimulus in markets which already have a huge number of vacant homes).
ProfBear–When do you see a bottom in San Diego condos?
2010
April 23, 2008 9:52 A.M.ET
BULLETIN
Wall Street stocks in ascent
Fair is foul and foul is fair
Hover through the fog and filthy air.
The minute the marketwatch.com folks announce an early-morning ascent, Mr. Market shows he has other ideas.
Plunge protection at the flat line seems to be working well today. Buy stocks — your backs are covered!!!
I have a better advice - load up on rice and flour.
Lol, that’s what I was thinking of doing. In a few more months blackberries will be in season. I plan on freezing a bunch and making blackberry pies for the rest of the year. Better stock up on flour so that I don’t have to beg for it when times get lean.
If you plan on freezing stuff… don’t forget your diesel generator.
Gold is down 10% month over month and poised to dip below $900 an ounce.
Annualized rate of decline in gold price since March 2008 peak:
((903.80/1021)^12-1)*100 = -76.8 pct.
(Not to worry — this is a very noisy trend!!!)
LOL. All the way below 900? Annualized rate of return from one month? You will extrapolate yourself to death. Or do you really think gold is going to fall 76%? Figures don’t lie, but liars figure.
I didn’t lie, I merely did a calculation, along with a disclaimer that it was a noisy measure.
But try not to catch yourself a falling (gold knife)…
Gold is still up 7% for the year, and I will take my chances. You can have your wooden nickels and remember, you are the one betting against the Fed, not me. I am riding Bennies’ inflationary coattails while he erodes your hoarded bucks. But since you have been calling a gold top on this blog for a couple of years, I am sure you will be right…one day.
I do think the gold bubble will eventually pop, because unlike the stock market, which warrants plunge protection due to the wide ownership of stock among U.S. households, gold bugs are a rare lot, and thus a more politically-acceptable bagholder group.
Sorry, this doesn’t make any sense. Why do goldbugs need PPT protection, when the gold is just tracking the death of the USD? Are you saying the dollar will have a huge comeback and oil will be $40/bbl? Well, in this case I would love to lose on my gold hedges.
I am saying that gold is the obvious place to hedge when inflation expectations are ramping up, which makes it a likely candidate for a future bubble price collapse. I agree with you and Watcher that there may be a great upswing in gold prices between then and now, and I admit to complete ignorance on how likely this is to occur sooner rather than later. This is the very reason that rational, well educated folks play along with greater fools in bubble runups — the unpredictability of bubble collapse makes playing along seem smart, until it seems dumb.
Gold and oil is dropping as the Dollar strengthens…
“Stocks turned sharply higher Wednesday after an increase in oil supplies sent energy prices lower and eased Wall Street’s concerns that rising inflation will force consumers to cut their spending.”
just in time for more rate cuts? perfect timing?
Some reasons the gold bug gloomsters may prove right are (1) irrational exuberance verging on denial in the face of the insolvency crunch; (2) a western CB preference for hair-of-the-dog stimulus / inflate-away-your-problems policy response; (3) a massive amount of leverage that is still hidden under the global financial system’s living room rug in the face of a whole lot of deleveraging that is going on.
PETER BRIMELOW
Prophet of doom
Commentary: Veteran gold bug Ruff says financial world could collapse
By Peter Brimelow, MarketWatch
Last update: 11:53 p.m. EDT April 22, 2008
NEW YORK (MarketWatch) — Veteran gold bug Howard Ruff’s Ruff Times is having a relatively rough time this year, but that’s nothing compared to what he sees ahead for the U.S. economy. Ruff is one of a number of veteran gold bugs who have been boosted by the apparent post-2000 return of the conditions that first brought them to fame in the late 1970s.
Totally OT:
Record lows here in Utah last night:
Station new record old record year
Bountiful-Val Verda 28 33 1999
Bullfrog 34 35 1970
Delta 22 tied 22 1982
Hanksville 25 tied 25 1996
Randolph 17 tied 17 2007
More global warming, I guess.
It’s still not too late for the US to pull out of Utah & give it back to the Indians.
Hey, I’ll take it! At least the SE part. Like they say out here, the more land you own, the poorer you are.
Link
http://www.marketwatch.com/news/story/metals-stocks-gold-futures-fall/story.aspx?guid=%7BDB97F76C%2D19EF%2D4523%2DA727%2D59795DE3954D%7D&dist=hplatest
Bush Admin Wants to Buy Billions in Student Loans, per Margaret Spellings, to keep higher ed functioning…your government at work.
http://www.nytimes.com/2008/04/23/washington/23loans.html
43 lenders have already left the federal loan program. College funding through home equity loans is getting harder because of tighter credit and declining home values.
FYI, Shanghai went up 9% yesterday, evidently because of some minor tinkering of tax laws (0.1% tax instead of 0.3%). It’s still very volatile.
China’s stock market plunge give investors a taste of downside of capitalism
http://sg.news.yahoo.com/ap/20080423/tbs-as-fin-china-market-muddle-618743b.html
this makes me wonder if jim rogers wallet is getting a little thiner these days?
I think Jim Rogers was very well aware of the Chinese stock market bubble, he has mentioned it several times. But he remains very upbeat regarding the longer term prospects for the Chinese economy.
Speaking of which, that China short ETF that Hoz was touting is a total dog. It has sunk like a stone even though the China market tanked.
Rogers has stated that he will ride out a correction in China because he believes in the long-term story. I would not try to make money fading Rogers.
technically, the stock is still bottoming, and today was continuationof -7.5 sigma washout. The 17th was early, kinda like the PTRY(pantry is -25/30 sigma), but recovery story fundamentals plays into the downside risk of FXP, I have been waiting, and will continue to wait for S&P 1410 high volume up DAZE before I consider any short positions.
I will continue to observe the hard landing,and await the buy side euphoric good times to manifest, also decoupling for China looks good here for a cash burn on high prices.
The basis for the Q208 recovery blip is a strategy in my opinion, tax returns, stimulus checks, warmer weather, back to basic hometown nowhere living, loving, and enjoying the sweet life in America.
always hedge your bets. I said I wont consider any MORE shorts until I see some recovery….other than that Im more interested in the return OF my capital, rather than the return ON my capital.
I have no short positions. VOZ is like bull…..make him a bear, and you’ll see some recovery. Look for DOW to sell off after they report tomorrow, catch the fire on the way down at 33, thats my next long side buy.
Hmm, I still think that China is in for a really rough ride. They have demographic problems, economic stratification problems, population problems, and an entrenched Communist Gov’t that will not go quietly when the time comes. Bad stuff.
Roidy
Osama ‘08!
Realty Check: High End Foreclosure
http://www.cnbc.com/id/15840232?play=1&video=720203325
It seems no one is safe from the impact of the nation’s foreclosure boom.
Something like 5 out of the 250 or so houses in a pricey (relatively new) neighborhood in the Pasadena, CA area are in foreclosure. The houses had been going for $1.0M-$1.7M a year ago. This may not be the multi-million “high end”, but you get he point…even expensive neighborhoods are not immune to neighbors who can’t/won’t pay their mortgages.
Coming to a town near you
Bum Bot
http://news.yahoo.com/s/ap/bum_busting_robot;_ylt=AuHEMX4t2YQrh7iWcFGKkxms0NUE
They should design one that goes after Realtors, and investment bank CEO’s too.
For you Bay Areans - when you visit the Contra Costa Times online, there’s an advertisement for Signature Homes at the top of the website that boasts “Live secure…We guarantee the price of your home for 2 years!”
Who will guarantee the guarantors?
East Bay may begin water rationing soon:
Nearly 1.3 million East Bay residents could be forced to ration water as early as next month if rains don’t increase.
The East Bay Municipal Utility District issued an urgent warning Tuesday that water levels are critically low and that its Board of Directors may be forced to vote for mandatory water rationing at the May 13 meeting.
EBMUD provides water to 29 cities and unincorporated towns in Contra Costa and Alameda counties, from Crockett south to Castro Valley and east to Danville.
The water agency said that although January and February were wet months, March was the second driest March in the district’s 85-year history and April is the driest to date.
That means the Sierra snowpack, which melts into the Pardee Reservoir where 90 percent of EBMUD water comes from, is yielding half its normal runoff.
Last spring was also dry, about 15 percent below average.
Investors watch GE in part because it cuts across multiple industries as the world’s biggest provider of locomotives, jet engines, power plant turbines, medical imaging equipment and aircraft leases. Divisions also include the NBC Universal television and media group, lighting and appliances.
“There is a massive economic de-levering,” Immelt told investors in a speech today. “Days of easy credit have turned into months of no credit at all. While I am confident about the economy long term, we could see even more difficult times ahead. GE is not immune.”
Wow a wee bit of honesty.
Too bad he’s just can’t find the honesty to admit GE is on a 100 year delay campaign to avoid cleaning the PCB’s in the Hudson River.
This is funny. People wining about gas prices. Even a lady in a Mercedes griped and people in SUVs are griping.
http://www.cnn.com/2008/LIVING/04/23/gas.prices/index.html
HELLO! Stop driving so much.
Heheh, My Wife’s old S430 cost $54 to fill it up in Mnpls. I’ve always said that anyone can afford to BUY a Benz, it’s only the upper income group who can truly afford to fuel and maintain one…
when i was in my early twenties i really wanted a brand new mustang GT. i called an insurance guy to get a quote for the insurance rates for a 21 year old male driving a muscle car.
his reply…
if you have to ask you can’t afford the damned car.
Same here, but I bought it. The rates were reasonable at first, then skyrocketed once the stock market crashed. No tickets, no claims, but didn’t matter.
I would not recommend any 20 something waste their money on a car.
Stocks rise as Street parses earnings, oil prices decline
http://biz.yahoo.com/ap/080423/wall_street.html
Wall Street advanced Wednesday following better-than-expected profits at Boeing Co. and after an increase in oil supplies sent energy prices lower and eased concerns that rising inflation will force consumers to cut their spending.
Light, sweet crude on Wednesday fell 13 cents to $117.94 on the New York Mercantile Exchange.
Oil falls 13 cents a barrel and that’s an indication that “consumers” now have more money to spend and inflation isn’t a problem???? What is this kind of garbage reporting supposed to accomplish? I shake my head and wonder why I watch/read any MSM crap.
You aren’t kidding. Did you see the ‘dollar rally’? Just because it didn’t plunge today they call it a rally. Oil is barely off all-time high and Wall St. celebrates. Employment down, wages stagnant, inflation rising, housing market DOA, food hoarding…if this is the good news, what’s the bad news?
Oops, oil is up now. Bullish?
NineTwelve.
Don’t you think you are getting a bit carried away with your anti-dollar cheer leading?
Nahhh.. you’re just being facetious PB.
The last time a month ago we had a “dollar rally”, I loaded up on FXE and FXA. Worked out very well, up 2%.
No kidding. I just skip over all of it now.
BIDU still looks to be topping, unless you are seriosly considering Oct/Nov 07 runup.
If the PTB care little for the graveyards they scatter in their wake, why should the servants care more?
As above, so below, say the wise men.
The like minded gather here to philosphize as to the current state of dis-repair.
tell me brave souls, What is so?