Bits Bucket And Craigslist Finds For May 1, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
January 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Happy May Day. And good morning. Just wanted to say that in the IE, reported as No #2 in foreclosures (San Berdoo and Riverside) in the US, rents are, like, asking sales prices, slowly starting to decline. Not yet reality based, but coming down.
Good morning to you. Per Zillow, my townhouse in Chino has declined from a high of $389,000 around 1/1/07 to $273,000 today. If you can believe Zillow, this is quite a “haircut”. Glad I don’t have to sell. Purchased in 86, and still long way to go to lose all accumulated equity.
I just don’t get this. If you knew the crash was coming, why didn’t you sell? Personally, if I knew somebody was going to kick me in the nuts at 4:59 p.m. on Friday afternoon, I would make sure to have a nut cup on by 4:58 p.m. Friday afternoon. You could have sold out, rented for a while, and bought back in much cheaper.
I tried to talk a couple of colleagues into selling back in 2005. They just smiled at me and looked at me like I was nuts. I don’t remind them of the incident these days.
What’s more amazing about people not selling their overpriced homes and moving elsewhere to cheaper digs, was the idea of a tax-free $250k or $500k gain just staring them in the face, waiting to be picked off like a piece of low hanging fruit…
Don’t underestimate the stigma that renting holds (although if things keep going in the direction they have been renting may become the “in” thing to do). I have a friend who sold his house in 2005, he made about $250k on the sale. For his income bracket this was an enormous windfall. When I suggested renting for a while his responses were the usual nonsense, “I want to start building equity again”, “Real Estate is always goes up in the long term” and “I don’t want to move twice”. Needless to say that money was plowed into a larger house which he probably could have picked up for 20% less had he just waited a year.
That’s what you call and double down. You get lucky, and you mistake it for genius. Classic mistake everyone makes at least once in their lifes’. The problem is that it is rarely done with a small fortune. Now that is un-lucky!
Renting has a stigma? The smart money in Manhattan rents.
Check out any long-term, highly successful RE agent with the major firms…renters, with stabilized or controlled leases, overwhelmingly. Case in point, Alice Mason, with a 10 room rent-controlled apt., from which she hosts major political fundraisers. The equity build-up becomes an equity-smashdown about every 10-12 years in Manhattan. I’m convinced most folks can’t remember what happened six months ago, and can’t be bothered to look up a few newspapers, even using google.
It may be true in Manhattan that there is not a stigma, but in general that hasn’t been my experience everywhere else. I think part of what drove this mania was the feeling that having a house means you “made it”, you were a responsible adult. I never bought into it, neither did the people who read this blog, but many did.
Spike your assertion that folks with money lease is spot on. I know a few with real $$$ and not one of them own any real estate. They lease. Also, my cousin is an RE agent for commercial space in Manhattan…. guess what…. he’s leased for 30 years there.
Well yes, there is a stigma. In a normal market, becoming an owner required both good credit and a downpayment. And the advantages of ownership accrued only if your employment and family situation was stable enough to stay in one place for several years. So ownership was the providence of the settled and reasonably prosperous and thrifty. This was true enough that in most markets, the average quality of rental stock is significantly lower than the quality of RE for owner/occupiers.
Owners are highly exposed to changes in their communities that renters are not subject to (both can move, but only one will experience a wealth decline along with the neighborhood), so other owners prefer to have their neighbors as invested as they are.
Jim A - I agree with your well-written post with the exception of your verb in
“…the average quality of rental stock is significantly lower than the quality of RE for owner/occupiers.”
Around here (central FL), at least, the verb should be “was,” not “is.” We are renting a wonderful place that is above the quality we could have afforded when we began renting it.
…above the quality we could have afforded to buy…
NyCityBoy,
number of reasons that I did not sell:
1. I did not even pay attention to the RE market until Feb ‘07
2. Even though I thought mkt was crazy, I had no desire to sell.
3. Mortgage payments + HOA dues were $800/mo.
4. I operate my business out of my home.
5. Rents in my area are were higher than mortgage + HOA.
6. Rentals generally will not take pets (60 lb Chow).
7. Past and recent upgrades.
For all of the above reasons, I chose to not to move.
Besides, like most FB’s I believed MSM.
One final point, I can take a 70% “hit” in values, and still come out even.
These are all really good reasons. They’re also valid reasons to own versus rent, compared to what we saw during the bubble. Things like “It will fund my retirement” and “Prices are only going to go one way!”. Ownership and rental each have their own merits and detractors. Now that prices are sinking, it won’t be too long before Ownership actually makes a lot of sense without making you bankrupt.
Agreed. Moving is a pain in the you-know-what. Stuff gets damaged, broken and lost.
Why move if you own or have a very manageable mortage, and you don’t have to or want to move? Why use your primary living space try to time a market, or the buy or the sell side? I thought that housing wasn’t an investment.
The moral here is that it is still possible to make a small fortune in real estate investing . . .
provided, of course, you start with a large fortune. [bwah!]
Well besides avoiding the PITA of moving, here are the reasons I didn’t sell.
1.) My mortgage is LOWER than equivalent rent and will be paid off in 10 years.
2.) While I thought it LIKELY prices would crash, I was quite sure that I could continut to pay my mortgage. If prices only went down ~20% or less, I’d come out behind when counting transaction costs, and higher cost of renting.
Jim A,
I remember someone saying, “you know the price of everything and the value of nothing”.
If you get trapped in chasing prices, you will have nothing of value in the end.
I will have had housing for all the years that I have lived in my house. Since my mortgage payments are currently LESS than the equivalent rent, I’m saving money every month. Now it’s probable that if I sold at exact peak I would have come out ahead of where I will since I’m holding on. But even if house prices went back to their 1989 levels, I won’t be upside down, and I’ll continue to be able to afford my 4.875% fixed rate mortgage until it is paid off in 2018. Since I had already effectively secured housing at a cost below the current rental rate, SELLING was the speculative bet, not continuing to own. Especially since I thought that the prices in 2003 were too high. If I had an inclination to sell, I would probably have sold way too early to maximize profits.
Home ownership is a illusion. We’re all just “renting” a small chunk of time on the planet…
We’re all just “renting” a small chunk of time on the planet… All we really own is that time and our attention. We own nothing tangible regardless of our pretenses and suppositions.
Jim A - you’re not counting the income you would have received had you invested the proceeds of the sale of your home — the “opportunity cost” of not selling. It is significant and, IMO, changes the result of your premise.
We sold out and invested the proceeds. The interest income offsets more than half the rent we pay. Would’ve been true for you, too.
But isn’t it exactly this attitude that helped contribute to the problem? Just because prices were soaring, people - who would have otherwise had no intention of or need to sell - sold just because they saw huge dollar signs.
Why is this a problem?
If you see an amazing opportunity that you never expected, I see no problems with taking it.
If a greater fool comes by, and the bank wants to bankroll him, more power to you for selling it to him.
My house cost less than $250k back in 1995 and must have a real value less than $400k now. I have been an avid housing market watcher since the chaos of 1980 and was aware of the bubble since the early dot com boom times. I promised myself that I would sell if prices went high enough for me to get $500k for it. At the market peak around $700k might have been possible.
There turned out to be good reasons not to sell. Most important for me was to live in a good location, and that is coupled with the lack of competitive alternatives. Just behind that was inertia. Beyond myself and thinking of society, it is really questionable morality to sell for profit into a market that is overheated with fraud. I care about the community and would prefer to consider a transfer of ownership rather than using my property to set a trap for someone else in a manner that will contribute to the destabilization of the community where I now live. Finally, when it comes down to it, for anyone with a good income in this area a quarter to a half million dollars in pay back is only a few years of income and only a fraction of what would be needed for a comfortable retirement, even considering retiring in the near future.
The bubble made housing into an interesting game, but for many including me the winning move was not to play.
RE: There turned out to be good reasons not to sell
At my stage in life i’ve come to believe there are 3 components extraneous good health that contribute to a quality existence..Those being:
-A good spouse
-A job you enjoy
-A good place to hang your hat.
No one should ever “cash-out” for purely monetary reasons if doing so changes any of the above.
Some things in life money can’t buy.
It’s a sad thing to acknowledge but all are becoming increasingly more and more difficult to attain each and every day.
So true, HD, money can’t buy me love…
I sold at the peak - hadn’t yet discovered this blog, but my gut intuition said something was wrong when my house had more than doubled in value in a mere 7 years. My main reason was I knew if things slowed down I’d run the risk of getting stuck in a place that had no economy but tourism and had seen the blackest of crashes not all that long ago, in the 80s.
Yeah if you have a nice place then why mess with this game?
I think that “inertia” is under-credited as a motivator of inaction in many, many real estate matters.
People who have made good prudent long term decisions are probably less likely to jump into making a short term gain (err non-loss).
We were staring at a $500,000.00 tax-free profit on our unremarkable looking tract home, and we figured we might as well jump.
The most important thing about anything money-related, is timing…
You know, If I was as knowledgeable and astute as you on the housing bubble, I may have sold in ‘05. However, since I, like most people, was not devoting enormous amount of time and effort in tracking housing prices and the economy (which I still do not understand), I wrote off the entire marketplace as crazy. Since I suspect that if I had sold, I would have paid more for a replacement house, It seemed insane to move from one house to another with a higher mortgage payment.
In my younger days as a renter I found that owners controlled renters through their rules and pricing. I did not want be in the trap again.
Thus, I decided to stay where I am, even if home values fell.
NYCB, i’m going to kick you in the nuts at 4:58 pm. Lets see if you have that cup on.
Lucy, I hope your watch is not two minutes fast . . . for NYCB’s sake anyway.
Maybe he couldn’t convince his husband ;). It took me *two years* to talk mine into selling. Now he is deliriously happy with our financial situation & little rental house. And I choose not to point out that we could have sold for way more in 2005!
Bought my starter home for 295K and in 2005 sold it for 815k. Everyone said we were crazy and we were going to be sorry. We rent and could not be more pleased to be “crazy”. Zillow says our property has dropped 100k, what a shock. HA!
It was a pain in the ass to move, but the huge chunk of cash sitting in the bank made it more than worth while. I think most people don’t move because they are scared and lazy. They are the same people who bought internet stocks at a bargain, watched them triple in value and held until they were in the red.
Owning a home with a huge profit built in and not selling it during the run, was akin to being up a ton in a Vegas casino and not only not cashing in, but continuing to play…
RE: Bought my starter home for 295K and in 2005 sold it for 815k
Starter home on a flip for $815k!
I owned a pair of residences and walked away with a measily $100k after 25 years of ownership. And that $100k was split via divorce.
These $$$ numbers defy credulity.
Sorry HD, I should have been more clear.
I bought my home for 295k in 1999 and sold for 815k in 2005. It was in santa monica ca. so the numbers aren’t outrageous for that area. That’s why we sold.
“I just don’t get this. If you knew the crash was coming, why didn’t you sell?”
We also didn’t sell our condo at the top of the market and are in basically the same boat as lostcontrol (bought a long time ago, plenty of equity). In our case, our monthly mortgage payment is easily affordable and cheaper than rent on a place of this size and quality with the same amenities in this neighborhood, if such a place could be found at all. Furniture, rugs, art, light fixtures, blinds, etc. were purchased to fit this space, which has been renovated, painted, and decorated by me to my (admittedly quirky) taste. And we have a dog, which makes it very hard to rent. Plus, moving is incredibly distracting, disruptive, and expensive. Why would you do it if you didn’t have to?
Why would you do it if you didn’t have to?
good question, I sold my townhome because it was too small for 4 people AND the HOA was too high and going higher.
So I guess I didn’t really like my Townhome anymore so I figured sell now and buy again later. I was kind of gambling on home prices dropping which was not a sure bet back in 2006. I found this Blog after I sold and it helped me keep the faith. way to go Ben Jones and posters!!
For me, if there’s one valuable lesson to be learned about the evolution of a bubble collapse, it’s that the active participants and peripherally interested parties cannot and/or will not suddenly sober up, come to their senses and act reasonably. To the contrary, the large majority can be expected to hold out as long as they can, even if it means taking further losses, in hope of some miracle where the trap springs open and frees them. Asking price and rents will remain high until economic realities pound them down.
imo it’s too late to capitalize on this point now, but I’ll be ready and waiting next time..
Joey,
I agree 100%; but tell me, in what way do you think you will capitalize on this in the future?
(I think it’s the same crowd of people out there; most of whom will learn nothing this time around, and next time around will do exactly what they want to do at any moment provided they are able (or enabled) to do so.)
in what way do you think you will capitalize on this in the future?
i haven’t given that much thought.. but there is always some way to position things and take advantage of a very high probability, no matter what market. Options (derivatives) come to mind..
and another thing. Europe’s RE market seems to be lagging developments in the USA by about 6 months or so.. but the road they’re traveling is the same. So, maybe there’s no need to wait for the next bubble.
I don’t think Europe is traveling the same road at all. The EU bubble is far older and bigger than the US bubble. In this thread I read about homes doubling or tripling in value; in the Netherlands that is a joke, even the worst POS has done far more than tripling, and more attractive homes in nice locations have increased more than tenfold in price over the last 15 years. In some smaller towns in my area prices are up 15-fold on average over the last 15-20 years. I don’t think anyone could have predicted how bad things would get out of hand (bad obviously for those priced out of the market).
The EU bubble is a once-in-a-generation bubble for many countries. I don’t think anyone will be able to profit from what they possibly learned over the last years. The last bubble in Netherlands was in the seventies, it crashed -40% within 1.5 years. The current bubble is about ten times bigger (by appreciation), if it really bursts I think the Dutch RE market is dead for at least 10-20 years. But there is a big chance that authorities will do everything they can to keep pricing up, and as a result make sure that all prudent people (those waiting on the sidelines for this game of madness) are heavily punished.
Yeah.. there are no doubt a few major and minor differences.. but there are lots of similarities as well.
Just yesterday an article was posted about some big european bank president or CEO.. it was British.. suggesting they cut prime lending rates immediately to avoid a potentially disasterous 30% drop in RE prices…
My comment was that we tried it, and it’s not gonna help.
Well Japan tried ZIRP, and it didn’t help either. Hasn’t helped for 18 years too, I might add.
There’s a reason for it, and you may want to try and understand why that is.
Probably EU banksters have learned from the Bernanke experiment that ratecuts will not help the housing market, but more government mortgage guarantees and even higher homeowner subsidies (all paid/backed by the taxpayer) might do the trick. It seems that the UK is heading in that direction.
Of course these tricks will only postpone the reckoning, or maybe help home prices to stay afloat in nominal terms (but not in real terms, as values will be eroded by surging inflation). I think most EU politicians will choose to help homeowners even if it means severe damage to the general economy. China etc. can be blamed for economic problems (and just about anything else gone wrong in international affairs), but politicians will be blamed if the housing market craters.
…in what way do you think you will capitalize on this in the future?
Two words: Alternative Energy
I predict this will be the next big bubble as competing technologies come online to replace oil, coal and natural gas.
They will spur tons of speculation until several of them begin to be successful, then suddenly there will be TOO MUCH energy.
But what do I know. I can barely get my mind around the concept of shorting a stock.
Can ya just HEAR the tanks and missile carriers rumbling across Red Square? The tromp of goosestepping soldiers - the first Russian Mayday military parade since the collapse of the USSR was today.
*sniff* Ja, jest like der GUT old days…
I guess they didn’t learn the price that is paid for military arrogance. If they need their memory jarred they should look no further than the U.S. History is a broken record.
Hubris has afflicted every great power since Athens (and before), it will continue to plague every one of them in the future. Yet, all will eventually fall and be replaced. Technology and demographics is just accelerating the life cycle of these entities from 1000 years to a couple of hundred or less.
Our bit o’ hubris was allowing our military to be wasted fighting a 2-front war without end, far away.
I think the ultimate expression of hubris was the Vietnam War. We fought a war using a strategy that we knew would not work - Results? Over 50,000 dead Americans. 7 of them my relatives. In comparison to WWII? “Only” 5 of my relatives died… Hubris.
Daniel 2: 31. Thou, O king, sawest, and, behold, a great image. This image, which was mighty, and whose brightness was excellent, stood before thee; and the aspect thereof was terrible. 32. As for this image, its head was of fine gold, its breast and its arms of silver, its belly and its thighs of brass, 33. its legs of iron, its feet part of iron, and part of clay. 34. Thou sawest till that a stone was cut out without hands, which smote the image upon its feet that were of iron and clay, and brake them in pieces. 35. Then was the iron, the clay, the brass, the silver, and the gold, broken in pieces together, and became like the chaff of the summer threshing-floors; and the wind carried them away, so that no place was found for them: and the stone that smote the image became a great mountain, and filled the whole earth.
http://www.biblelookup.com/
Huh?
That’s the problem with the prophetic books. They are incomprehensible to us.
C’mon, you guys, that one’s easy, it’s how they did geology back then. I learned all about that stuff at the Colorado School of Mines, it made my head hurt then, too. Another one is: can old silly old dinosaurs count peas? It’s a way to remember the epochs: Cambrian Ordovician Silurian Devonian Carboniferous Permian…
Stay in Utah! LOL
GO Permian Panthers!
I like the Dillon Panthers (on “Friday Night Lights”).
And this is why the RE market in IE and much of Florida will be getting a tripple whammy. Even as rent/purchase ratios return to sane levels, the oversupply will mean that equivalent rents will be comming down. Add recession caused job losses and it’s going to be BAD. Or GOOD if you want to buy a few years from now and have alot of cash.
Alas, in my neck of the woods we just got notified of a rent *increase*!
This is largely due to the fact that there are fewer than half of the rentals necessary to service the area, because the population has more than doubled during the period of the housing boom and there were many condo conversions. But it’s annoying to see a rent increase notice with the comment that due to rising rents in the area, they need to raise it… bull. Just be honest and say you need more for capital improvements or something.
And we still haven’t found a house to rent within an acceptable price range. Grrr.
Dave Barry… Tax Rebate…
http://www.lewrockwell.com/north/north622.html
I think this line was even better than Dave Berry:
—
The good news is that the Federal government is sending a little tax-free money back to us. Never look a gift horse in the mouth, especially when it’s coming from the horse thief who stole it from you.
I liken it to a payday loan. It will have to be paid back, with interest.
low rollers:
For months, beleaguered American consumers have defied expert forecasts that they would soon succumb to the pressures of falling home prices, fewer jobs and shrinking paychecks. Now, they appear to have given in.
http://www.nytimes.com/2008/05/01/business/01econ.html?_r=2&ref=business&oref=slogin&oref=slogin
As banks grow tighter with their dollars in a period of uncertainty, families are running up against credit limits,
“forcing” many to live within their incomes.
As if that’s a bad thing!
‘…“forcing” many to live within their incomes.’
Unfair!
I smell a class action lawsuit in the making…
Articles like these highlight an aspect of human behaviour, that when stressed we tend to fall back on our habits. If a workaholic is stressed about a failing relationship, they will tend to work more which makes the relationship worse. An alcoholic will drink more when a clear head could alleviate stress. A shopoholic stressed by increasing debt will go out and buy more.
Consumer spending in a debt ridden nation would never avoid recession, only delay and deepen it.
As if that’s a bad thing!
Its bad for Corporate America. They want us as customers, but not as employees. As long as the free money (cheap borrowing) flowed that arrangement worked.
If you are in debt from too much consumption, you are less likely to quit your crappy job, less likely to stand up to your bosses over unfair practices, less likely to make demands as an employee. You are far easier to keep in line. That’s how they like it.
I agree and I won’t participate, as for me, it’s very nice living outside of the 9-5 rat race (if a little boring at times).
That too is correct. Either they offshore your job, or if they don’t they keep you in check.
Either way its unsustainable. People cannot live beyond their means indefinitely. Once the credit spigot is shut off the big box stores end up empty. Went to Best Buy on the weekend to get a new battery for my mobile phone. Empty, empty, empty. I rememeber when it would be wall to wall people on a Saturday afternoon.
“forcing” many to live within their incomes.
Worse than that: incomes minus interest/principle payments on their credit cards, helocs, and mortgages.
“The government has offered the rebate checks to buy time while it waits for the Fed’s lowered interest rates to wash through the economy, nurturing fresh investment and hiring. But many economists are skeptical that such timing can be pulled off. Many forecasts show a dip in economic activity from April through June, then a bump up from the rebate checks before the economy slows again at the end of this year.”
“It doesn’t get us across the chasm,” said Robert Barbera, chief economist at the research and trading firm ITG, speaking of the rebate checks. “It will make things look better than they are for a few months, but it doesn’t change the fundamentals. The underlying circumstances are unambiguously recessionary.”
At most, it appears, the tax cuts and interest rate cuts only delay the inevitable recession or drag it out over a longer period of time. After a five year bender, a couple of aspirin aren’t going to make it all better.
RE: the rebate checks
Whoop-tee-doo…150 gallons of Middle Eastern supplied heating fuel oil pumped into a holding tank in my dank basement.
Lottsa stimulus in this scenario.
This laughable joke demonstrates out hust how totally out of touch the politcos in DC are with mainstream America.
“There is nothing that politicians like better than handing out benefits to be paid for by someone else.”
Thomas Sowell
“At most, it appears, the tax cuts and interest rate cuts only delay the inevitable recession or drag it out over a longer period of time.”
Greg - my take is that that is exactly, and solely, the purpose.
From the article you just posted:
“Even more ominously, Americans cut back on a wide variety of discretionary purchases, conserving cash for necessary spending.”
” … conserving cash for necessary spending.”
“… conserving cash …”
“… cash …”
Cash is king.
Some forms of cash are more regal than others.
For instance, compared to the Euro the dollar is looking rather peasant like these days.
I’m willing to bet you that much of the consumer spending increase had to do with non discretionary items with inflexible demand - e.g. Food and Fuel. The rest went off a cliff
I think that I have already spent my tax rebate. My local electic company big wigs are starving to death and have been raising rates for flipping switches faster than I could possibly turn my air conditioner on
For the frugal minded on the board: my wife bought these new power strips (energy saving smart strips off of amazon) that shut off all electricity to the peripherals when they’re off. Apparently the tvs and monitors and dvd players keep sucking even when the power is off.
I was totally skeptical, but since using them we’ve saved about 10% per electric bill. They’ll pay for themselves by end of year.
How much juice can a solid state device in standby mode really consume? I would guess that the spare fridge in the garage consumes far more juice than a bunch of energy star rated devices do when in standby mode.
It’s about 10% of the average energy bill as I recall…
Our electricity bill skyrocketed to $1.21, last month.
(this message was brought to your attention, via the power of the Sun)
But have you recovered your initial costs yet?
It’s about 10% of the average energy bill as I recall…
But how much was that in kwhr? How much do you pay for a kwhr? Do you have tiered pricing?
*Insert blank stare and dumb look here*
But have you recovered your initial costs yet?
We HELOC’d on our house to pay for it, and our electricity bill was around $200 a month previously, and after running the numbers our solar system cost us around $250 a month, so we only paid like around $600 a year extra to be energy independent.
As electricity goes up in price, (the grid is largely powered by oil) we’ll reach the break even point at some stage…
Sounds like a good plan!
Your hunch was confirmed on NPR this morning.
On the second page:
Most economists agree that the tax rebate checks will finance a flurry of spending that should stimulate economic growth. But whether it will be a quick binge lasting only a few months, or whether spending will crystallize a sense of confidence, prompting companies to expand and hire, is a matter of much contention.
A flurry of spending? Who are these economists? Where did their analysis come from? Where is it reported? And, most importantly, did they come to their conclusions before or after gas and food started accelerating through the stratosphere and jobs started evaporating.
This rebate check makes me question what economic “growth” is.
If a company issued new debt to purchase ipods, I would not consider that growth.
If the company issued new debt to make payroll this month, I would not consider that growth either.
Go figure huh?
(cooked figures)
“…quick binge lasting only a few months…”
Try a few minutes maybe. How out of touch are these people? $600 per adult is nothing, even with my low overhead that covers exactly one month’s worth of housing costs, utilities, transportation, and other fixed costs.
The people they are looking to help are far worse off than that, and that $600 won’t even last them a week.
ah…it’s only $400 when you consider you’ll have to pay federal and state taxes on it next year.
Sigh.
Its not considered income by the IRS.
No, but rest assured, they will make you deduct it from your normal refund on ‘08 tax return as already paid. Its NOT a rebate, its a fricking ADVANCE!
Its NOT a rebate, its a fricking ADVANCE!
In a sense thats true, however they did eliminate a tax bracket to cover it, so had there been no rebate the refund next year would have been much bigger than before. That said, would you rather get it now, or wait until 2009?
stewie,
It is NOT going to be deducted from your refund next year. Not all people get refunds. If it was an advance on a refund, how would they collect it from people who don’t get refunds? You don’t think they would have to ASK someone if they want to receive $1800 (married couple with two kids and otherwise eligible for the maximum) which has to be paid back next April?
There is an FAQ page on irs.gov:
http://www.irs.gov/newsroom/article/0,,id=179181,00.html
Here is one of the questions:
Q. Will receiving an economic stimulus payment in any way affect my eligibility for other federal benefits, such as temporary assistance for needy families, food stamps or Social Security? Will it count as income for purposes of my Social Security benefits?
A: No. The stimulus payments will not have any effect on eligibility for federal benefits.
“The people they are looking to help are far worse off than that, and that $600 won’t even last them a week.”
For dual earners with kids the total rebate will be $1200 or more. For a family with an income of little more than that each month, this will be a strong “stimulus.”
Oh, and this is NOT taxable income.
Bill, is this tax rebate an advance on 2008’s taxes? I heard it was somewhere.
Most of us are getting a temporary tax cut this year, and rather than making us wait for tax filing season next year to get it they are mailing the checks now. I know that many people are calling these “rebate checks”, but I think the official name is something like “tax stimulus”.
RE: How the “rich” get “richer”…aka ex Big-Dig contractor.
http://www.boston.com/news/local/articles/2008/05/01/dimasi_business_ties_questioned
Just got back from my weekly trip to TJ Maxx. There were two Frenchwomen, mother and daughter, in front of me in line with not one but two overthrowing shopping carts. We chatted. They explained that their breadwinner been on a one-year contract in Boston, but they were now going back to France and thus, stocking up on clothes, shoes, towels, sheets, cosmetics, toiletries, olive oil, Da Vinci flavored syrups… Even with the cost of shipping, it made since for them to buy here, because “Everything’s so cheap!” the mom marveled. A frosty silence fell as we who get paid in dollars (”the natives” as one of my Chinese friends calls us) gave her the evil eye.
Frenchwomen…with not one but two overthrowing shopping carts.
Vive le revolucion!
Vive le shopping!
alberta clipped?
Oil-rich Alberta may be the envy of Ontario – especially as economic conditions soften in Central Canada.
But there’s one thing that hasn’t happened here, at least so far: despite strong economic growth in the western provinces house prices have taken a dramatic fall in some Alberta neighbourhoods.
http://www.thestar.com/Business/article/420148
Oh my. I have friends in Alberta, and they have maintained all along that “it’s different here”, what with the oil exploration binge. Prices will never go down, or at least not for the foreseeable future. But then… uh oh, how can this be? Price drops finally appearing in the press?
It was always looking (to me) like a classic price bubble, but as you can guess, nobody there wanted to listen. Not even now will my friends listen — they are saying this is just a temporary adjustment. One even says “That’s just stats, and stats are made to lie.” !!! So what about the stats from 2005-2007 all going UP then, huh?
My 91 year old auntie sold her house in Calgary @ the very top of the market 6 months ago…
Timing is Everything.
I consider Alberta fairly lucky in all this. They were dealing with price to income multiples in the 4-5 range which is too high, but not nearly as bad as alot of places. They do have a strong economy to support their housing market, and they’re getting into a correction early. They may have a relatively soft landing (I actually just typed those words, huh) compared to the rest of the continent. I agree though Nova, that there is still plenty of denial on what’s happening (bubble deflating).
BC on the other hand. 7-8 price to income multiples for the big cities, weak economy and lots of denial. Disaster waiting to happen.
For the rest of Canada, we’ll all take our hit. Except maybe Thunderbay. They’re cheap.
Thunder Bay. Cheap for a reason, perhaps! I spent a couple of days there (Prince Albert Hotel, if I remember correctly). Actually, it was not as bad a place as I was led to believe before the trip, but I’m certainly not sure I’d want to live there.
Anyway, if BC is 7-8 times income… look out beloooooow!
“Thunder Bay. Cheap for a reason, perhaps! I spent a couple of days there (Prince Albert Hotel, if I remember correctly).”
Thanks for the info. I have never been there, but my late, beloved bull terrier was bred in Thunder Bay. His name was…Prince Albert. I had no idea he was named after a hotel!
My local convenience store has Prince Albert in a can.
I grew up in Alberta in the early ’80s (after the price of oil collapsed)… The favourite bumper sticker at that time was “God,please give us another oil boom. We promise we won’t piss it away this time.”
It’s not just the real estate thing in Alberta. The massive investments in the Western energy industry has lead to an enormous increase in carpetbaggers and financial hucksters and sleaze bags and Alberta is no longer what it was.
I’ve spent more than half my life here and have migrated to a small town to get away from all the ugliness that now persists throughout the Province as it is being quickly cannibalized by the greedy carpetbaggers and even by all levels of dumb and avaricious governments.
The best thing that could happen out here is a total financial collapse in property prices and a mass outmigration but don’t think it will happen as there is no place else for people that need to live to go to. It would need a good drop in the price of oil to jar things loose and it would be great to see that happen.
The Alberta cities are no better or worse than any other Canadian city in that all Canadian cities are heartless,greedy, shallow and ugly. That probably applies quite likely to many U.S. and other global cities, so make the best of it buy checking out and finding a smaller, safer, saner place to live about as far away from the maddening crowds as you can get.
Spent an afternoon in downtown Calgary yesterday, while waiting to go to airport. Had a few very good conversations, e.g. with an older gentleman who lost his house and company in early 80’s, and had friends (engineers and geologists) working at 7/11 stores at the time. He blames the liberals in Ottawa, Trudeau, Chretien etc, and the oil tax for what happened then.
Agree 100 percent with the description of the city (cities).
rice cartel:
BANGKOK — The prime minister of Thailand, Samak Sundaravej, said Wednesday that his government would try to create a cartel of rice-producing countries in partnership with Vietnam, Cambodia, Myanmar and Laos.
http://www.nytimes.com/2008/05/01/business/worldbusiness/01cartel.html?ref=business
Organization of Rice Exporting Countries, OREC?!?! First, oil/energy (OPEC), then food stuffs, next the only countries that haven’t totally polluted their landscape will form a cartel to monopolize breathable air. OAEC anyone? Her, remember that scene in Spaceballs where President Skroob (Mel Brooks) is inhaling canned “Peri-Air” from planet Druidia all the while denying that there’s an air shortage on planet Spaceball? Who knew Mel Brooks was a prophet, though he did play Moses in History of the World.
good morning
i repsonded to an ad on craigslist in regards to an apt. for rent and look at the email i got back- unbelievable
Hello sir/ma
My name is Carlos Jadalez i am from Portugal but spent a long time leaving in the United state thanks for your interest shown in my house…Presently i was posted out to WEST AFRICA NIGERIA for the post of a 5years contract with the (Nigeria breweries plc) I have relocated with my family and do not have any representative in the state..I have been searching and looking for a truthful,sincere, and God fearing tenant who can take good and proper care of my home even while am not around in the state….All am asking from you is a good and sincere mind of having my property taking good care of before my return to the state..Formally i had the intentions of selling the house because I and my wife had gone through series of problems while leasing our house for rent to tenants while we are here in
Nigeria they took advantage of our truth and decided not to pay the rental fees after moving into our house….After going through a bad experience with people I decided to put out the house for sale but had the secod tought of leasing it out for rent until my return back to the (UNITED STATE) The place is a 2bedroom located in ( 165-03 32nd Avenue, Queens NY 11358) pets of all kinds is allowed and we will be leasing our home for more than 4years pending on your interest deposit of 1month rent can be made immediately to us You can read and fill out our rental application below if interested and willing to be a sincere tenant to us even while we are far way from you…
RENT APPLICATION FORM
Also,Pls let me get this answer.
1)Your Full Name
2)Your Full Address & Phone Number
3)How old are you?
4)Are you married?
5)Do have kids?
6)How many people will be living in the house?
7)Do you have a pet?
8)Do you have a car?
9)Occupation?
10)1-2 month deposit needed
If you can agree to take good and proper care of our property and to also send pictures of the house after 3months of moving into our home so that we can have a prove of your sincere attitude and life style. We will have the keys and documents mailed to your address VIA FE DEX immediately so that you can view the interior part of our home and move into our house if interested……But please note that before the keys and documents will be mailed to your address to move in and view the interior of our house a deposit must have to be made to us because we can not stand the risk of having our keys and paper work mailed to you because of the bad and terrible experience we had with people.As soon as the keys and paper work is mailed to your door post after viewing the house and decides to move in you will have to get back to us with an upfront rent of 2months rent but if it turns out the other way that you do not like the house after viewing the interior your deposit will be refunded back to you immediately including with an extra $85 that would be used in mailing back the keys and paper work back to us VIA FE DEX…..All utilities are included in your rent fee below are the included pakage that will be mailed to your address.
Here are the contents of the package to be sent…
1) Entrance and the room Keys
2) Lease/Rental Agreement Paper(for you to go through)
I will advise you go drive by the house today and view the exterior part of the house and then get back to us at your own interest if willing and ready to leave by the rules and regulations and also willing to take good and proper care of our property if also devoted to prove to us that you can truly make a difference to us as a good and sincere tenant stay blessed..
Engr: Carlos jadalez
website:www.nbplc.com
cell number…(0112347039093522)
(0112347087329207)
scammer
what kind of person falls for this bs? i flagged it
other homeboys
Enough people must fall for this to make it worthwhile if it’s still going on .
“There’s one born everyday” - WC Fields?
He mentioned having religious values - so it’s all good.
Good enough down here in the thumper belt. Being old line Episcopal (very mellow faith), I often wonder at the wide eyed fervor and gullibility of folks down here who fall for every commercial, business pitch, or scam as long as it includes an expression of religious faith and an ichthus in its logo… Maybe it’s something in the water…
I’m pushing my wife to change her “1000 pesos take it or leave it you over-haggling renter scum!” policy for our rental house in the Philippines. (Her point is that our easily movable goods in the furnished house are worth several months of rent, so excessive haggling is a bad sign.)
If we do change strategies, can we use this text, or do I have to pay royalties to the copyright holder in Nigeria?
The scary thing, is that since this isn’t promising huge riches for very little effort, it isn’t nearly such an obvious scam as you rtypical Nigerian con. Some people will fall for this.
except for “nigeria”, i missed whatever clues there are to a scam..
can’t sell, decided to rent.. up front money wasn’t mentioned.. The property’s addy was provided.. phone numbers are worthless but at least it’s not just email. Didn’t ask for sensitive info.. hmm..
Only wants a few grand cash before you get to have a look inside.
I wonder if Mr. Matthew Deoma of Somers, CT knows that his house is for rent!
yeah.. if people will buy sight unseen, they will surely rent that way too. I can’t fathom it but that’s just my problem..
Whatever clues, you ask? Oh man! This is the typical Craigslist scam — and the reason that Craigslist says to do face-to-face transactions.
This happens a lot with car ads (I spend a few minutes every day flagging bogus car ads when I’m looking in there). The modus operandi is to have the sucker send money before the product is provided, in some cases a car, in this case the product is a look at the house. The better scams use a fake escrow account; the worst ones say to WU the money. It’s like mailing cash to a PO box. Ouch.
And yes, people DO fall for these. I saw a tale of woe from one woman whose teenage son refused to let her help him shop for a car. He got suckered into one of these deals, sent his money, and now he’s screwed. People on the forum shook their heads and called it a harsh but unforgettable lesson for the boy. Poor (dumb) kid.
So yeah, the scam works well enough, at least when palcing the ads is free, and it almost always these days has that “overseas assignment” bit to it. The thing to ask is this:
“If you’re frikkin overseas, why don’t you have a local property manager? Even if this is legit, what happens when something breaks down in the house, eh?”
Gurantee you the scammer’s not Portuguese, he’s Nigerian. Classic Nigerian scam. Have seen it (but not been bitten) first-hand. Unlike the Russian scammers, the Nigerian scammers are generally very pleasant while they pick your pocket.
My guess is it’s a scam and he is trying to rent a house he never owns, will take whatever disposit you hand him and dissapear.
Gee, Ya think?
If you see ‘Nigeria’ anywhere in an e-mail. Run, dont walk
nigeria is a big country.. i doubt all 150 million of them are crooks.
i may drive by the place on saturday and knock on the door- il tell the unwitting resident about the post
it has happened in nyc recently and the nigeria thing is a red flag-
Maybe it’s ‘cultural’. Maybe I’m not being fair but it sure does seem to me that Nigerias’ only exports are oil, surly cab drivers and con artists. I have a cousing who works in the international fraud division of the Secret Service and he can give case file examples of Nigerian scams for days on end.
Only the 5 million with internet access. ; -)
maybe it’s just a fantasy, but i’ve often thought about running a reverse-con on scammers. Their believing that they’ve got a stupid and trusting mark on the hook is a vulnerability that might be exploitable.
I got an email yesterday from the “IRS” claiming that I needed to claim my “stimulus refund.” Ha! It had a link that directed you to input your personal information and credit card number so it could be “credited” to you. I always have great fun with those. I fill in the blanks with all kinds of scatalogical insults, fake numbers, etc.
txchick57…
WiII YOU PLEASE BUY one of those fabulous houses with a monster swimming pools that you’re always LOOKING at NOW!
We have already put down pym’ts on new swim suits, wine coolers and inner tubes and we need a road trip before gas hits $5 per gallon
mgnyc: I’ll bet the guy currently in the apartment is in on the scam. Probably a bro.
I got that IRS email last week.
“i am from Portugal but spent a long time leaving in the United state”
long time leaving - he comes over here, gets arrested, leaves…comes back, gets arrested…leaves…rinse and repeat
http://www.419eater.com/
A few years ago I got repeated phone calls from “the Government Department”, informing me that I’d been granted a $4000 reward for filing my taxes on time. All I had to do was confirm my name, address, …
Yeah, right. And this was clearly from an Indian call centre.
I told them I didn’t need the money, could they give it to charity for me or pay down the national debt? They didn’t like that.
Here is my standard form letter/answer to such proposals:
Sirs:
Thank for your generous [gift|prize|offer|rebate|reward].
Unfortunately, I am so busy going to the bank, I now
can only accept [gifts|prizes|offers|rebates|rewards] of
$1,000,000 or greater. Further, I can only accept
cash in small bills left in a unmarked cardboard box
on my doorstep.
Thank you for your understanding and cooperation
and keep up your good work.
I once knew a surgeon / US Army officer originally from Nigeria who was planning a big trip back to see the folks. He had his Mercedes shipped back home. Lo and behold, surprise, surprise, his car disappeared somewhere on the way & was never heard from again. Of all people, he should have known better.
Knew a US Air Force officer doing a government paid move here in the US who went to the moving company to see about his lost furniture. He found them sitting on his couch in their break room.
mg, This sounds just what my wife and I are looking for. If you are not interested, I would like to help Carlos. It’s funny, because we will be able to move due to a chunk of cash I am expecting from helping out a Nigerian Prince who is having trouble getting his money into this country. When we get that check, we will have our moving money.
Once we move it turns out I can also make thousands of dollars a week, just working from home and also get rich on foreclosure properties. So we are sitting pretty.
Sounds reasonable.
I had one of these idiots apply to rent a house I owned. I just played him out. He sent me a “cashier’s” check. The rent was $1600/mon, plus $1600 for a depost. His “company” sent me the cashier’s check in the amount $9600. It mistakenly included his travel expenses, which I was to wire to him after depositing the check. I told him I never received the check. Later, I told him I leased the house to someone else. He still asked me to cash the check and wire him the funds, so he did not have to “hassle going back to his company”!! Ha, ha. The cashier’s check was counterfeit I am sure!. The envelope was hand addressed with no return address. I still keep it in a file and pull it out to show people from time to time. Craigslist is a major trolling station for scammers. I wanted to make this idiot invest a lot of time for nothing, thinking maybe he would quit. Idiots all. I think most people are getting wise to the scammers, cause I see a lot less of it now.
Hey, jingle, that’s MY check - send it back. I’ll send you an address with another check for you to cash to cover your postage and expenses, I’ll make it out for a bit more, if you don’t mind, as it’s my last check. Just send me the extra back with the original check.
ITS FOR SALE TOO:
http://www.century21.com/buy/property_detail.aspx?teasers=Google-Redirect+Lead+from+Google&tr_key=%20%2034529864
That for $650K. The bubble has not yet deflated.
Hey, at least someone is going to be renting it. The Nigerian will at least set a lower bound for local rents
cool reception:
WASHINGTON — The Bush administration and Congress reacted coolly to a new $50 billion proposal by the head of the Federal Deposit Insurance Corporation to permit the Treasury Department to lend directly to as many as a million homeowners to help ease the housing crisis.
http://www.nytimes.com/2008/05/01/business/01housing.html?ref=business
LOL! Of course the Bush admin would be cool to the idea. Heaven forfend it would DIRECTLY benefit a citizen of the US. We can’t have THAT now, can we?
That said, I am of course like most here opposed to a bailout of FBs. But I got to thinking about these constant cuts in interest rates which are just not “trickling down”, but rather pumping up DaBoyz. So I feel like, hey, why not just cut the crap and give the money directly to us? Straight from the FED to us. Free money so we can go out and spend on all that crap they’re so worried we won’t spend on anymore. Starbucks and flatscreens for everyone!
“Heaven forfend it would DIRECTLY benefit a citizen of the US. We can’t have THAT now, can we?”
Never. They answer to their corporate masters, not us.
Anybody know of a $300 window AC made in America?
I checked on this about 2 years ago, so info may not be up to date. At that time, I contacted some of the manufacturers via email; both Fedders and Whirlpool had models that were USA made, but not all models were. I suggest contacting them via the contact point on their website.
It says directly , but I think there real intention is to give the money directly to the idiot banks who lent these fools the money….What a bunch of crap, the freeloading home owner should be kicked out and made homeless and the bank should have to eat the loss, end of story….
What really kills me is that to be a bail out recipient you had have bought more house than you could afford. But had you been responsible at first but later fallen on hard times, then no bail out for you!
People who don’t live beyond their means tend to be free thinkers. That is dangerous in the New System, hence they need to be punished.
Jared Lanning, struggling to pay a home loan on which he owed more than his house was worth, was thinking he might just let the lender take back the property. Then he got a call one evening from an Orange County investor who had bought his mortgage.
“I want out of your loan,” said the investor, Evan Gentry, chief executive of G8 Capital of Ladera Ranch, who offered to lower the balance and the interest rate.
http://www.latimes.com/business/la-fi-loanbuyer-2008may01,0,3521729.story
Why does this not surprise me
Altazurra, who has paid as little as 31 cents on the dollar for some loans, said the terms of some mortgages made at the peak of the boom were hard to believe. One loan he bought from a Texas bank was to a borrower with a very low credit score — 484 — who refinanced and cashed out 100% of the equity in the property, he said.
“Altazurra, who has paid as little as 31 cents on the dollar for some loans, said the terms of some mortgages made at the peak of the boom were hard to believe. One loan he bought from a Texas bank was to a borrower with a very low credit score — 484 — who refinanced and cashed out 100% of the equity in the property, he said.”
Another example of outstanding loan underwriting. Standards, what standards?, we don’t need no stinking standards, just an endless stream of fat commissions.
RE: Orange County investor who had bought his mortgage.
BFD…the investor scores the original loan for a whopping discount and then let’s FHA/HUD (US taxpayer) become the risk bagholder with their refinancing mortgage guarantee.
And this is stability for the “system”?
The underlying story is that our worthless federal government has lost ALL control save for runnin’ the fiat currency printing presses.
So, the irresponsible borrower, who get’s in over his head with a stupid loan, now get’s to push the losses on his property off to the banks/investors; through a series of write-downs, and loan restructurings which include reductions in principal.
Meanwhile, his neighbor, who came up with a big down-payment, and has been making regular payments on his fixed mortgage gets to personally absorb the drop in property value on his balance sheet.
That’s just great…
I’ve asserted for a few years that there is a fundamental shift in the desirability of various types of housing and metro areas will benefit most from it while suburban and rural areas revert back to undeveloped rural areas circa pre-WW2.
http://www.theatlantic.com/doc/200803/subprime
They had almost the same article in the Orlando sentinel this morning….Suburbs to Slums…..
http://www.orlandosentinel.com/news/columnists/orl-miket0108may01,0,4303687.column
This part of Florida has two poster children for this phenomenon: Northport and Spring Hill.
I’m in Orlando today. After reading your post, weez, maybe I’ll just stay in my hotel for the next few days.
And I’ve argued that to some extant this is an illusion created because the mix of new construction is different from existing housing. Exurban development is easier than infill development so the supply of distant homes has increased out of proportion to the number of buyers who would trade greater than 2 hours a day of their lives spent commuting for a little grass. Of course skyrocketing gas prices DO raise the cost of the commute and therefore lead to further downward pressure on distant house prices. But people have a history of underestimating added commuting expenses when house shopping.
Maybe so Jim however, the cost advantage of building “easier to develop exurburbs” over metro areas isn’t what it was. Further, add to the cost of new infrastructure in exurbs over retrofitting existing infrastructure in metro areas puts exburbs at a disadvantage. Operating cost associated with exurb living is way understanded and never get serious consideration. Look no further than the cell phone scam and the clueless exurbians who fall for the easy entry costs and crushing operating costs.
Further, add to the cost of new infrastructure in exurbs over retrofitting existing infrastructure in metro areas puts exburbs at a disadvantage. Operating cost associated with exurb living is way understanded and never get serious consideration. Yes, and Yes. And until those change, there will be a perverse incentive to tear up farmland rather than build close in where infrastructure exists. The first problem can be ameloriated somewhat by impact fees on developers. If new housing requires new capital construction by local governments, it’s perfectly reasonable IMHO to charge the new people for it, rather than issue bonds to be paid off by taxes upon all residents, new and old. But the second is much more insidious. I don’t see developers posting realistic commuting costs as part of their estimated cost of homeownership anytime soon.
Edit: “Operating cost associated with exurb living is way understanded”
understated….
grrr.
There has been plenty of infill here, but by the time this happens the lots are soooo small that I think people just can’t tolerate the density and move farther out as soon as they are able. Or, the units are bought up by specuvesters and rented out. That’s not to say the closer properties couldn’t been a little more densely developed to begin with, but when they start shoehorning oversized houses in on 30-ft wide lots, it’s gets kinda crowded. Then the problem of condos in marginal neighborhoods. We’ve seen a lot of that here too but really, why buy a 1-bedm apt and get stuck in some condo assn? The magic has gone out that once people start looking askance at ownership again IMO.
I read an article about the research of FL home builders some years ago: they did questionnaires about how many extra miles prospective home owners would be willing to drive for a somewhat larger square footage. I could not believe how many of the latter said they are ok with an extra 30 miles, and the HB’s then developed further and further out.
I foresee a lot of racial strife in cities like DC for example that have been minority controlled politically for many years when gentrification really starts going and the demographics shift. It won’t sit well with the current powers that be (it never does) and they won’t go quietly.
The key to all of this is the improvement of school systems that’s an absolute must if urban areas are going to attract families with children from the burbs. For these young families, living close to work would be a real money saver and if the schools were good, I think many would quickly abandon the “burbs”.
Changing elected officials with changing demographics is relatively easy, even if not well-received. Reversing decades of neglect of a large urban school district is a much slower process. You need enough children with parents demanding change before that change might occur. However, how many of those parents will put their children in underperforming schools before changes occur? How many are willing to “sacrifice” their children to make the schools better?
Also, don’t assume these cities necessarily want parents with children. Schools are expensive to operate. Much better from a revenue and operating cost standpoint to emphasize relatively higher income singles and couples without children.
However, perhaps this might lead to a revitalization of older inner suburbs - shorter commutes than from the exurbs, some features of suburban living, and school districts that may be small enough to be more easily changeable.
It breaks my heart to see beautiful old buildings in a state of decrepitude in some inner city hell neighborhood - particularly when I know how well they’re built and what they used to be.
Jwhite,
Agree w. the conclusion but not the premise. Specifically, you mention gentrification as if it’s a one-way process. There will be huge amounts of strife, but it will be caused when the gentrification ceases and begins to reverse. I find the theory that gentrification is some unstoppable historical force ludicrous, it is simply the broader social expression of easy money greasing the skids. As the condo dwellers cut back on spending, the high end retail and starbucks will close down; the area will decline in liveability, condo prices will decline until every one is upside down. Soon, the city government will decide the unoccupied condo buildings of bankrupt builders will make great Section 8 housing. Those buffer areas where the yuppies colonized, but you walk one block in either direction and get mugged/shot/etc. will be the front line of the coming street to street battles. Get ready to see “de-gentrification” in action…
You make some very good points and much of what you postulate has already occurred back in Minneapolis where I left last year. The condo boom is way bust. I’m referring more to the lovely century old buildings that still eist in good structural shape by the hundreds of thousands in what until 50 or 60 years ago were very nice neighborhoods.
Plenty of adventurous folks out there willing to take a risk when they can be acquired for nothing (case in point, Little Rock Arkansas offered massive Victorian house just across the interstate from Old Man River in the 90’s for just $2.00 for anyone who would rehabilitate them.
The neighborhood was the worse kind of crime infested squalor. It isn’t any more, the last time I drove through, those 5000 ft homes were doing very well as was the area around them (Across from the headquarters of Dillards in fact).
I think the same recolonization process will occur in places like DC much as it did in the City. Remember the 80’s?
The section 8 element will always be there, but they keep being moved around as this process occurs. In Mnpls, they were actually being moved to the Western Burb’s where we lived - median income $114,000. You could spot them right away from the masses of surly children, used diapers and trash thrown in front of their doors till someone would finally put them in the trash (usually NOT the residents- I’m not kidding) and the endless streams of Thug boyfriends and junk cars sneaking into the supposedly secure underground parking..
There isn’t any status quo no matter where you live -unless it’s Detroit IMHO.
It`s always the “bad schools”, but never the bad students. One of those many truths which cannot be told, due to the constraints of political correctness. Does anyone remember when this country had freedom of speech?
“Does anyone remember when this country had freedom of speech?”
[sarcasm] Come on, Earl, you know we still have our freedoms–it’s what our soldiers are “defending” over . . . there. And you better agree with me or I’ll stick you in a “Free Speech Zone” until you see the error of your ways. [/sarcasm]
Straight out of Kunzlers ‘Long Emergency’ which I happen to agree with chapter and verse. So what if he mis-called Y2K. He’s been right about a lot more.
This article mentions Elk Grove, CA (outside of Sacramento) as one of the examples of communities that have gone down the drain. Elk Grove has always been ghetto. It will always be ghetto. I don’t know why anyone would want to move out there, it’s far from everything.
Actually, the original old EG was a white flight neighborhood in the mid 80s. Then the development went nuts and it began to merge with south Sac. That’s when the problems hit.
Davis in many ways is following the pattern with Woodland creeping down into the ag buffer and Davis screaming bloody murder. The best part is, the more Davis trying to stop change at all costs, the more it cuts it’s own throat. It’s ammusing as hell to watch from the front row.
That’s really weird, since I’m living in Elk Grove and haven’t seen any of this ghetto. Hokey I’ll accept. The Western Festival is this weekend.
I guess it depends where you are. We’re within a couple of miles of the old town and the buildings around here are decades old, mostly long-term types. I can walk to the park and along a nature trail right behind our apartment complex. It really isn’t very ghetto. But I can totally see some other regions, easily accessible from South Sacramento (which is the real ghetto around here), turning in the ghetto direction.
Ah. I just found the reference. Franklin Reserve is on Franklin Boulevard (go figure), which is a thoroughfare that goes through some of the… well… less nice parts of South Sac. The road gets nicer south of Florin Road but anyone can tell you that major thoroughfares are primary crime targets since the perpetrators can get in and out quickly.
“I don’t know why anyone would want to move out there, it’s far from everything.”
Except when your work is there. We’re only a few miles from my husband’s workplace. International company, retail distribution division. It’s in Elk Grove because they have what used to be a warehouse facility and is now a call center.
It wouldn’t show up on anyone’s radar since this division is all of about thirty people. I still find it very cool that so few people can succssfully handle the retail distribution management for the entire nation (plus assistance to international groups.)
And… far from everything? It’s fifteen miles from downtown Sacramento. Now, you may not feel as though Sacramento has anything to offer*, but it’s not as though Elk Grove is Tracy, which is a good twenty to forty minutes from Stockton, and much further from the Bay Area (which it purportedly is a community of.)
*I grew up in Sacto, and love history, and that’s a good combo. Lots of historical stuff within easy distance, and good nature areas too.
You mean Apple where they just announced 174 layoffs? That’s about 15% of the workforce I think.
EG isn’t far from downtown unless you include the traffic on the 5 or 99.
Time of day, honestly. I’ve never had any problem getting to or from downtown because I know when to take to the surface streets.
Which part of Apple? They’ve got Cupertino corporate, the Elk Grove call center, the Elk Grove retail logistics group (which is understaffed, actually), and the retail division, which is nationwide. A layoff in the retail division, for example, would be along the lines of not hiring more sales folk, while the corporate group in Cupertino is smaller and 174 layoffs means more.
This is one of the most interesting articles I’ve read about the housing crisis. One of the statistics that really shocked me was the probable surplus of 22 million large-lot homes by 2025. And yet, the builders keep building. How can this be possible? Who do they think is going to buy all those houses? It would be great if we could bulldoze some of those soulless developments and turn them back to farmland.
Can’t be farmland - they stole the topsoil off the property when they “developed” it! Could be a massive compost project if the neighbors will dump their grass cuttings, wood ashes, cat litter and other rich sources of plant nutrients, but who would (sarcasm) want to have this happen - NIMBY?
The bulldozed home has plastic, treated wood, tarpaper, and other untasty items for the good bacteria/bugs that would normally create good soil for healthy food sources - much easier to use a not-ruined plot for gardens. Maybe good for a giant dog run? Exercise track? Parking lot for trailer/boat storage? Here in Pontiac/Flint, they’re called gray fields, I think. Its where oil or something worse was dumped and got mixed into the soil - too hard to extract, and may be poisonous to vertebrates (that’s us) but OK for cockroaches (the winners of the EARTH!).
calpers:
The nation’s largest pension fund is involved in one of the biggest land deals to fall victim to the housing bubble. It is an unusual position for the investor, which has a reputation for avoiding such blowups
http://online.wsj.com/article/SB120960362036258063.html?mod=todays_us_money_and_investing
Maybe they truly believed in their heart of hearts that California real estate always goes up?
Well, clearly they didn’t believe hard enough because if they had, the almighty baby Jeebus would’ve rewarded them.
And they made the deal in 2007. What a bunch of idiots.
They paid borrowed $85,000/acre for what is essentially farmland. Farmland works economically at about $4,000/acre. The public employees are not the only ones getting fleeced. The investors to the loan pool with take a bath too. It was nice of Lennar to lead the charge into the Valley of Death.
The Fed is probably done with rate cuts for a while, but it is interesting to note that the reason we had a .06 increase in growth last month is because (like the previous month) inventories rose. This isn’t a good sign is it?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aX2Z.Sc8eAsA&refer=home
“.06 increase in growth last month”
(1) 0.6%
(2) increase in GDP (annualized)
(3) last quarter
I stand corrected - I will use my usual excuse of not enough java juice yet…
test
This is only a test. This has been a test of the Federal Reserve Banking system. If this had been a real economy you would have been directed to persue a career in sciences, engineering, or skilled trade as a pathway to prosperity rather than a mail order course in real estate or financial administration. But this is only a test. We will now continue with your regularly scheduled blogging.
pretty funny, sf!
big easy:
We’re referring not to New Orleans but to the Federal Reserve, which yesterday continued its habit of cutting interest rates into inflation-tempting territory. The statement by the Open Market Committee signaled some ambiguity about future rate cuts, without referring specifically to a “pause,” but the problem is that when in doubt the current Fed always seems to err on the side of easier money.
http://online.wsj.com/article/SB120959818459057709.html?mod=opinion_main_review_and_outlooks
you can leave out the ‘when in doubt’ part of that statement.
D.C. anti-gang effort: Call them ‘crews’
When is a gang not a gang? When it’s based in the District.
D.C. officials insist on describing groups of young males as “crews,” rather than gangs, even when they are held responsible for violent acts such as the wave of killings in the city last weekend. But police officials in other cities say the distinction is counterproductive.
Police Chief Cathy L. Lanier acknowledged this week that crews appear to be connected to some of the 10 homicides in the past two weeks — including four this past weekend. And they are connected to hundreds of shots fired and a dozen shootings late last year in the Columbia Heights neighborhood in Northwest, officials say.
http://washingtontimes.com/apps/pbcs.dll/article?AID=/20080430/METRO/817853081/1001
crews and gangs is the same thing imo
d.c. sounds lovley
i am going to Phildelphia today and to a phiilies game
can’t wait to see what has happend in the outskirts of the city in relation to overbuilding- have not been there in quite awhile
That’s right, just rename the problem with “new speak”… Wouldn’t want the folks to think that the Nation’s Capital is infested with organized, murderous, drug dealing thugs who can’t be controlled by the authorities.
“the Nation’s Capital is infested with organized, murderous, drug dealing thugs who can’t be controlled by the authorities.”
Would that be Congress or the Bush Admin?
I think Congress is WAY more dangerous than whoever’s in the Whitehouse or the local “Goodfellas”…
“the Nation’s Capital is infested with organized, murderous, drug dealing thugs who can’t be controlled by the authorities.”
WE in LA have this problem. The front
http://www.latimes.com/news/local/la-me-gangs1-2008may01,0,1742910.story
Almost every day the LA Slime has a front page headliner on the cities attempt to deal with the out-of control LA gang problems. it tells me that the problem is much deeper and more seroius than even the local city leaders and the LAPD wil admit,. It in fact will get worse as the city/ state is in such a BUDGET MESS THAT there will be fewer monies to throw at this problem thru gang intervention programs , which are a scam anyway.
LA is such a scam- ridden third- world S*ithole rife with every kind of con, fraud, imported illegal-alien criminal syndicates galore,ect. that is is not surprizing that gangs/crews /homies control the hoods in large parts of LA.
Look for a tijuana -style valentine day massacre killing in the near future in some degenerated slimy slum pocket area od LA, whcu has tons of them, especially in the east SVF and areas ringing dwtn.
This gang behavior indeed has deep sociological / athropologicial roots which can be seen in the behaviors of primates; dominant- submissive behavior, pack animal behaviors, territoriality, fights and killings over females, ect. I have seen some of the more aggressive extreme gang-criminal psychos up close and know their behavior quite well. Some of them are pure beastly predators, ala mike tyson or willie horton : some have uncontrollable rage -anger management problems. Some are just pure calculating cunning opportunists looking for chances to commit brazen crime and get away with it. Often U get two or even all three behaviors combined in one person, which makes for a very dangerous super criminal gangsta.
“Crew” is really just the local word for gangs, in the same way some parts of the country call “soda” a “pop,” or a bag a “poke.”
Regardless if of what DC calls their delinquent “boys clubs”, hoodlum herds or crews, they better get a GANG of cops ontop of their mess
I think it’s correct to refer to that part of a gang which is assigned to go out on a job as a “crew” .. but i gotta check urban dictionary to be sure.. hmm..
13. crew
Not a gang! Just your main homies, smaller version of a clique. Main friends that u hang wit all da time.
30. crew
Term used by members of the folks nation to describe thier set (gang subdivision.)
But everyone is going to move back to this kind of environment?
No. Those boogeyman gangs are moving in next door to you.
i’d bet that way back in the caveman days there were nasty areas where dangerous groups terrorized the locals who were stuck there along with them.. nothin much has changed far as i can see.
Dang good point, joey. I have been thinking lately that there’s not much difference between modern gangs and the various tribes and clans of old with their rituals and skin markings. I’ll know I’m right when we start to see hearts getting ripped out of chests and held up to the gods for sacrifices.
hearts getting ripped out of chests and held up to the gods for sacrifices — There used to be human groups like that, but other human groups with different standards either rubbed them out and/or changed their minds. The human race has come a very long way, and still has a very long way to go.
The latest Realtor site numbers start to show decline, at least comparing March 2008 to March 2007. Not sure what it means - the start of something big?
What effect will the drought have on Southern California real estate?
Last year’s drought was diabolical and this year looked ok until it stopped snowing a few months ago and warm temps melted away so much, that we are sitting on about 65% of where we should be, right now.
http://cdec.water.ca.gov/cgi-progs/snow/PLOT_SWC
San Diego will be suffer the worst, as it gets most of it’s water from the Colorado River.
I was @ Lake Mead a week ago and it’s so low, the locals are now calling it “Lake Mud”.
Carpe cerevisi !!
Not to contest the point about general over-allocation of the Colorado Basin, but the Colorado snowpack this year is huge. And very little has melted and run-off yet because of the extremely cold spring weather. I live in So. Central Utah and the temperature at 10:30 in the morning is still below freezing.
Lake Powell is projected to have it’s largest spring rise in at least a decade, I think they were saying. Those who want their global warming will have to wait a while longer.
Quagga mussels have been breeding like underwater rabbits(at 3x the rate of their Great Lakes cousins), from Lake Powell, all the way into 7 of San Diego’s reservoirs…
They love to clog pipes and wreck machinery (boats & energy hydros) by clinging onto everything.
The ducks love them…maybe get great duck hunting in the future.
Hey, don’t blame me for Lake Powell, it’d be fine with me if they just pulled the plug. Would do wonders for our solar PV business…
I’ll make a deal - So Cal can have all the extra Colo water that we hold back, as long as they also agree to take all the smoke and other crap from the coal-burning plants that generate their electricity. We can even give ‘em all a big stack of carbon credits, as they’re worthless anyway.
Buy stocks today! The PPT has your back covered.
“…The Bank’s insistence that assets are fundamentally mispriced will raise the question again of whether the authorities should step in and buy mortgage-backed securities, since it would relieve some of the current strains while leaving taxpayers with an expected profit….”
FT
It is a fine time to buy stocks, just not in the US. Personally, I still like Brazil, Korea, Vietnam and the Middle East.
Viet Nam…RIGHT.. I’m still holding 100 worthless Republic of South Viet Nam paper Dongs I found in a tunnel that those Commies STIFFED me on
They stiffed you with their dongs in a tunnel? Sounds painful. :-O
hmm.. gold’s almost low enough to consider.. nah. I’ll wait till it breaks through 600.
I think Gold is going to 800ish then back way up over 1000 by the end of the year.
The worst of this is yet to come.
I figure it has dropped from 1000 to 850 in about a month. Given another 6 or 8 weeks of moderate performance by the dollar and financials, it’s could get near.. 700? Suppose another month or two of good (not really bad) news follows? 600 is not impossible.
Eventually the train will pull out of the station… no bout a doubt that.. and the fun begins.
It really is amazing
No good news today except that dollar is up
Home Depot closing stores, GDP up marginally based on pixy dust accounting and inflation, manufacturing cutting jobs, inventory rising suggesting more cuts are likely, foreclosures continue to rise, home prices continue to fall, and only 300 billion written off by banks so far, with an estimated 600 billion to go, credit default swaps still vulnerable
and the market rises.
Just like the Iraqi government could do with a dose of “sense of urgency” perhaps the banks need some too.
I usually like Robert Reich but yesterday’s stuff about the gas tax annoyed me. If lowering the tax won’t lowering the demand and the price, how about raising it? (Today’s “Market Place” commentator.) Lowering it transfers wealth to the oil companies without lowering the price. OK Robert. How about raising it? Transfers wealth from the oil companies, slight increase in price and reduction in demand. New commentator’s point: explain you are raising it markedly over the next few years. Get everyone pulling in the correct direction (for their own good) through fear. More investment where it is needed to respond to those (expected) conditions.
Gradual gas tax hikes for the next several years.
A program of gradual steady Fed Funds Rate hikes for similar reasons.
A sense of urgency.
I posted recently about my neighbor (single mom - 3 kids - currently in a 2BR townhouse rental) buying a house. She came over last night and said the deal fell through. At first I was happy for her (I thought she was nuts - no money saved, was going to tend bar to make the money needed at closing, etc.).
Then, she goes on to say that she found another, better house! (”It’s a flip!” She said it like finding a flipped house is like striking oil.) This one is $12K more than the original house she found was ($237,000 vs. $225,000). It was listed at $240K and she was “thrilled” to get it at $237K. Huh? How is $3K off a bargain on any level?
Anyway, here are her financials (at least what she’s told me). How and why would she be approved for a $237K mortgage?
Gross income $50,000
Monthly child support $270
Monthly debt (car payment and student loan) $1000
She won’t be. Dont’ worry about it.
She already is! Thru Century 21 Alliance. She better hope it’s all final because she gave her landlord notice and is expecting to be moved by the end of May.
Have you considered practicing your nyaah-nyaah-na-na-naaaa-na dance? Along with the required finger-wagging, funny eyes, and dancing side by side like a clown in your cute jammies?
I suggest you do that because you will need it in the next few years.
Oh, and clean out the guest bedroom too. You will need the space both for her, and to do the dance.
Hmm… my previous comment didn’t show. Anyway, I figured with her current debt plus her house, she’ll be over 65% of her take home. Bad news. Add (er, subtract) any state income tax as well; I didn’t put that in. Looks like beans and ramen for 30 years or till foreclosure, whichever comes first.
RE: it’s all final because she gave her landlord notice and is expecting to be moved by the end of May.
She better have an employed BF hidden under the linens in the moving van.
$50k gross to cover a $200k note?
I felt enormously stressed to cover @$150k with$80k.
See what happens when the underwriters get ahold of it.
Underwriters? They’re back?? They must’ve been taken out of cold storage.
Considering the innumerable fun, exciting and provocative ways to forever screw up your finances, why is everyone picking real estate…
I know! All these people getting 50 to 100K wiped out…not like they ever had the money in the first place, I know, but if I was going to go piss away that much dough I think I could find better ways to waste it than living in a Tyvek and particle board POS in a cul de sac for a year or two…
Yeah, whatever happened to the smoking dope on the beaches of Mexico plan, along with the booze and the babes? (babes of whatever sex appeals to you even!)
In the bubble days, she’d have been approved in a flash if her credit was reasonable. These days, who knows.
She’s looking at $1250 per month mortgage (or more) if she has 10% down, and then prop tax and insurance, so roughly $1500 or maybe even more per month? Ouch. She’s up to over 40% of her take-home pay, and that’s if she contributes nothing to retirement funds. Add in her current debt service, and she’s got over two-thirds of her income spoken for! Oh, and does she live in a place with state income tax?
Not saying she COULDN’T do it, but my guess is that most people won’t wear rags, bike to work, and live off of dry beans and ramen noodles for 30 years.
Her current rent is $1150. She says the new monthly payment will be $700 more per month. My jaw dropped when she told me this. I asked, “Are you able to save $700 per month now?” Of course she isn’t.
Her plan is to tend bar 2x / week to make up the difference. God help her if she loses her day job (which - to make it even more interesting - she has been at for less than 6 months).
Oy.
Stay far away from this person unless you’re ready to be part of a financial train wreck before it’s even Christmas. She’s financially doomed, and of her own doing. This is definitely a case of biting off more than one can chew.
Bartend.. 2x/week = $700..? Umm not in my neck of the woods..
Be careful…Maybe she wants you to ‘co-sign’.
Question about the Fed rate cut. Adjusted for inflation, are real interest rates now lower than they were when Greenspan pushed them down to 1 percent? I think they are!
Negative 2.5% interest rates.
Bank Robbers Post Strong Quarter
April 30, 2008
As the banking industry wobbled in the face of a debilitating credit crisis, bank robbers reported strong results for the third quarter (July 1 through September 30) of 2007….”
50 guesses to guess the source. Googling is not fair.
The Onion.
Can’t be the Daily Mash. Not snarky enough. Too earnest.
From a bona fide business news source. lol
Reuters?
Too wacked out for the WSJ on a Thursday, and Bloomberg is all earnest except for the opinions which are all over the place.
Nope. I think Reuters, Marketwatch or Yahoo would be suitable, mais non.
2nd paragraph
“The FBI reported 1,578 violations of the Federal Bank Robbery and Incidental Crimes Statute during the period, with thieves walking away with $19,769,819.51 of loot. So far, only $2,209,768.06 has been recovered.”
and re: author
“XXX is an associate editor at XXX, covering banking, real estate, and white-collar crime. He came to the magazine from the American Banker, a financial services daily newspaper, after a stint in the Peace Corps in West Africa and 18 months coaching baseball in the Dominican Republic.”
It is worth looking at the graphs, it is risky to go to a bank on Mondays between 9 and 11 am.
Well, Yahoo doesn’t have any news of its own. All it does is aggregate it from other sources so it wasn’t in the running.
Wait, Financial Times, or Economist?
Both are just wacky enough that they could pull this off. My bet’s on the former.
Economist then. Only they would hire someone like that, and actually graph it.
DOH!!! I wrote another post before this one.
Closer. Right idea.
Harper’s then. Or a longer shot, Reason.
I don’t really follow the Washington mags: Foreign Policy, etc.
If not, I give up.
US News and World Reports
“…During the period, big states like California and Texas led the nation in bank robberies, with 198 and 118, respectively, while wimpy states (sorry about that!) like North Dakota, Delaware, and Montana put up goose eggs. (Come on guys, even Vermont had two.)…”
http://www.usnews.com/blogs/the-collar/2008/4/30/bank-robbers-post-strong-quarter.html
Selling Grandma’s heirlooms to pay the bills . . . what happens when you’ve sold all physical possessions???
http://www.cnn.com/2008/LIVING/personal/05/01/cashing.out.attic.ap/index.html
Got Cash?
You’re a day behind the curve, sparky.
We talked about it yesterday, and even got bored after a while.
..what happens when you’ve sold all physical possessions..
umm.. you offer to rent various parts of your physical anatomy?
“Sell” would be more like it. I have no doubt a real black market exists in transplant organs. Why wait for one legally when you have money and a willing (read desperate) donor…
DUH!!!
India is having real problems with these. There is a serious amount of organ trafficking. Even the Economist did an article not too long ago.
It doesn’t help that everyone gets all moral about it. It’s gonna happen so you might as well regulate it.
Gee, what does that sound like?
“It’s gonna happen so you might as well regulate it.”
What kind of thought process is that? If idjits want to do this, let them perform self-surgery without guidelines. Then real doctors can remove their useful organs after the autopsy.
Darwinism at it’s finest.. Idiots..
Like this. Those were the good old days.
http://siliconinvestor.advfn.com/subject.aspx?subjectid=28684
“Middle of Nowhere News”
Prices at the local WallyWorld as of 08:10 this am.
Bananas - now 62cents pd was - 48 cents
Jasmine Rice (I don’t eat it) 5 pds - $10.94
New Russet Tators - 38 cents pound - Was 98 cents -I bought 10 pds
Canned White Corn 42 cents ea - was 38 cents
Mangoes - 78 cents ea - was $1.58
Sugar Free Lifesavers - $1.46 - 2.75 ounces - was $1.39 (3.0 ounces I think)
Lemons 35 cents ea - was 64 cents (bought 10)
Sensodyne Toothpaste - $4.74 - Was about 20 cents less last time
Generic Dental Rinse - $2.74 - was $2.58
Thank you for reading the “Middle of Nowhere” shopping news.
Tomorrow - Hog Bellies.
From Bloomberg.com this morning:
Home Depot Cuts Growth Plans, Will Close 15 Stores (Update1)
By Michael Nol
May 1 (Bloomberg) — Home Depot Inc., the world’s biggest home-improvement retailer, cut its growth plans and will fire workers after closing 15 stores as the U.S. housing slump erodes sales and earnings.
About 1,300 employees will be affected by the closings, Atlanta-based Home Depot said today in a statement on PR Newswire. The moves will cost Home Depot $586 million, mostly in the first quarter.
Home Depot said it’s abandoning plans to build 50 stores and will reduce investments in new locations by about $1 billion over the next three years.
Initial jobless claims surge this week.
http://www.marketwatch.com/news/story/us-initial-jobless-claims-surged/story.aspx?guid=%7BA2546EB8%2DD10D%2D47F9%2D9BEB%2DB8B5BC5300BA%7D
“Gulf states are considering dropping their pegs to the dollar after the U.S. currency’s decline stoked inflation across the region, Kuwaiti Finance Minister Mustafa al- Shimali said.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKafZEdY2xF8&refer=worldwide
So we rescue Kuwait from the grips of Saddam & Co. like 15 years ago, and this is our compensation?
Lindsay Williams would say that by not trading in U.S. dollars only, the Arab oil-producing nations are breaking a contract with the U.S., and that we could now, theoretically, flood the world with cheap oil already here, but classified as secret. His claims are interesting, but he also sells “Loose Change” on his Web site, so he may be clinically insane.
http://www.youtube.com/watch?v=NbakN7SLdbk
We saved most of Europe from Germany about 65 years ago. They all think we suck. What’s your point?
There has been quite an amazing swarm of earthquake activity on the left coast, the past few weeks…
Will our infrastructure hold up?
Dateline: Reno
Water supply safe despite flume break
“The 150 feet to 200 feet of Highland Ditch flume that collapsed in Friday night’s earthquake is the major source of water to the Chalk Bluff water treatment plant, but officials don’t expect Truckee Meadows water supplies to be disrupted.”
http://www.rgj.com/apps/pbcs.dll/article?AID=/20080427/NEWS/804270358
Dumbest Idea Ever’ Used as Pensions Plug Deficits
http://www.bloomberg.com/apps/news?pid=20601109&sid=aO1g6B5DJ_7k&refer=home
There are more than 100 public retirement systems in the U.S. managing a combined $2.3 trillion. The amount is $380 billion short of the funds needed to pay pensions over the next 30 years.
States also face a $381 billion liability for retiree health care and other benefits they’ve promised public employees, and have only set aside $11 billion to fund that commitment, according to the Pew report.
Anyone want to bet that the lower than expected Exxon-Mobil earnings were the result of “conservative” accounting used to keep down their earnings/profit. Imagine if they would have reported record earnings in the current political climate. They “only” made 10.89 Billion last quarter.
“Exxon Mobil, based in Irving, Texas, said earnings for the first three months of the year rose to $10.9 billion, or $2.03 per share, up from $9.3 billion, or $1.62 per share, a year ago.
Analysts polled by Thomson Financial were looking for a slightly larger profit of $2.13 per share.
Revenue rose to $116.8 billion from $87.2 billion a year earlier. Analysts were looking for higher revenue of about $124 billion.
Given record oil prices, some had speculated Exxon Mobil would top its own record for the biggest quarterly profit for a U.S. company. But the latest results fell short of the record $11.7 billion profit Exxon Mobil earned in the final quarter of 2007. ” from AP report
The economy grew only if you believe in SANTA
http://finance.yahoo.com/tech-ticker/article/14032/Economy-Grew-in-Q1-Only-If-You-Believe-in-Santa-Claus?tickers=
Just 207 shopping days left before xmas…
RE: So we rescue Kuwait from the grips of Saddam & Co. like 15 years ago, and this is our compensation?
Same with the French and the rest of the world, save the Brits and Aussies.
We get them out from under the Nazi & Rising Sun guillotines and they’ve hated us ever since.
D’oh! You beat me to it!
Federal Reserve to propose credit card lender limits
April 30, 2008
Washington policymakers are moving to impose restrictions on credit card lenders, responding to growing criticism over fees and interest-rate increases blamed for pushing consumers deeper into debt.
The Federal Reserve is scheduled on Friday to release a plan.
The Fed is developing rules with the U.S. Office of Thrift Supervision and the National Credit Union Administration to address congressional criticism that the central bank has done little to shield consumers.
Opposition: The credit card industry opposes the plan, saying new regulations would increase costs.
The proposal “will undercut a lot of the innovations in the marketplace that have led to lower prices for consumers, and we’re very concerned about that,” said Ken Clayton, senior vice president of card policy at the Washington-based American Bankers Association.
http://www.chicagotribune.com/busine…,3193156.story
Nice short squeeze. Bidding for other half of put position but it will take 1415 - 1420 before they get hit.
I hope it gets that high, fair maiden.
Oh, I get it. How foolish of me. Exxon bad - means commodity plays deflate and hot money rotates into Apple, Google, RIMM again. Well we know how that plays out eventually.
My tech stocks are :
Widget Nuts and Bolts Manufacturing, etc. I don’t even know the economics of your stocks! They all look like they are 500% over valued. What I don’t know, I don’t buy or sell.
Interesting the solars aren’t participating. The poster children for mindless speculation circa 2007
Go infrastructure bubble, go go up and go boom -pull the plug, lights out. Good night Irene.
I think I’ll get in my go go boots and go fishing. Funky town here I come.
Commodites down I sold my prnex today on the news that oil would go to 180 per barrel and other panicy news via the MSM. I think deflation will take hold now. I have no clue what to buy now? I’m all clued out. Good luck all traders!! Myself I am a buy and holder of any macro trend that makes sense.
My bet is many believe that tomorrow’s job report won’t be so negative. Perhaps many traders already know this.
buy em to bang em
Whoa, 233 comments by 9:55am. Wow, niiice!
Curious, Ben - have you been keeping a daily record of blog traffic? If so, I would be curious to see a graph of it over time. Back in ‘04 / ‘05, people on this blog were mentioning that by the time the market is ripe to buy real estate, no one will be talking about it. While I truly hope your blog keeps retains its popularity, I would be curious to see real time traffic trends as we progress.
Keep up the good work!
“The obscure we see eventually. The completely obvious, it seems, takes longer.”
Edward R. Murrow
Simply awesome! Real Estaters crapping their pants over foreclosures.
Dang! My old area around Medicine Lake is getting slaughtered too! That’s a fairly small ( and very affluent) area.
http://ww2.startribune.com/projects/foreclosures/plymouth.html
Well worth looking at.
UPDATE 1-U.S. mortgage sector sees harmful mandate
“The overwhelming response to the agreement has been a positive one, with almost everyone agreeing that significant reform is needed,” he said. “It is not surprising that current industry participants, many of whom have significant economic interests of their own at stake, have differing perspectives.”
Under the deal, Fannie Mae and Freddie Mac agreed to spend $24 million to jump-start a new appraisal oversight body and incorporate the new standards by the beginning of next year.
Regulatory and mortgage industry sources said they hope to at least strip out some of the most objectionable parts of the plan in coming months.
http://www.reuters.com/article/marketsNews/idINN3056085420080501?rpc=44&sp=true
Fannie, Freddie reforms could gain momentum
Meanwhile, falling home prices, growing foreclosures, a slumping economy — and an upcoming presidential election — have moved the housing issue to the top of lawmakers’ to-do list.
“Both the Republicans and Democrats recognize that the public wants them to act,” said mortgage industry consultant Howard Glaser. “That’s prompted real negotiation and debate.”
http://biz.yahoo.com/ap/080501/fannie_freddie_bargaining_chip.html?.v=1
what part of the public are they talking about???? are they talking about the taxpayers???????? i’m pretty sure the majority of taxpayers are against any and all help the government is wanting to provide!!!!
It sucks to be a Countrywide shareholder (I got out on the quarterly report), but it must really suck to be a Countrywide bond holder.
“…The BAC S-4 states: “Bank of America has made no determination in this regard, and there is no assurance that any of such debt would be redeemed, assumed or guaranteed,” the company said in a filing with the SEC. The clear implication of BAC’s refusal to take responsibility for the $40 billion or so in parent-company debt is that BAC CEO Ken Lewis is considering a bankruptcy filing for CFC as one possible strategy after the transaction closes….”
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
Institutional Risk Analytics
Update: Are Countrywide Financial Bond Holders Bankruptcy Remote?
May 1, 2008
Excellent piece! I love this stuff. Sorta what they back in the bad old days of 1990.
CEO Ken Lewis should consider not buying Countrywide
Gold back to the 200DMA and way below 50 day. Buying Ag and nibbling on Au here.
Anyone here knows about auto insurance issues, please, I would really appreciate some help with our situation.
In summary, my concern is - can an insurance company deliberately pay a questionable claim in order to taint a good driver, so that the company can keep him/her and prevent competition from offering better rates?
Our story - last summer my wife had a minor accident on a parking lot. According to her, there was no visible damage to the other car. The other party, after taking my wife’s phone and insurance info, promptly disappeared, without leaving their information. Our car had no damage, so her story seems to be corroborated by evidence. Sensing fraud, we filed a police report. Then, they started calling us, asking for $1K in damages, we told them to deal with our insurance. They filed a claim, and we were contacted by the adjustor. We haven’t heard anything since, and our premium did not increase, so we assumed our company denied the payout.
Fast forward to last month, when I found a better rate at Geico, assuming we did not have an at-fault accident. But the Geico found that our company did make a payout, with an accident record on our policy. So, I had no choice but renew the policy with our current insurance.
I believe that our current insurance company deliberately tainted our record to retain us for many years. Is there an industry term for that? Who should I contact to learn more about it?
It may be a scam on the other party’s part. Your insurance company should not have paid out without telling you, and you can still file an objection. It doesn’t necessarily mean your insurance company is trying to lock you in, but it does suggest that it handled the situation sloppily, possibly to shut the other party up. Go to someone higher and complain, and get the payout removed from your record. Without evidence of damage, and with your police report indicating no damage, the facts are on your side. If all else fails, go to your state’s insurance commissioner and file a complaint againt your company. That usually gets a response.
I don’t have an insurance background, but I would start by contacting your current insurance company. They ought to be able to provide you with more details on the claim (i.e. exactly how much was paid, why, and to whom). Using your police report as proof you thought the claim was fraudulent, ask what steps you can take to appeal this mark on your wife’s good record. $1,000 really isn’t unreasonable, though. A tiny scratch or dent can easily cost that much to repair (assuming the work was actually done and the insurance money wasn’t pocketed).
Keep shopping for insurance. It might be worth it to pay a little more for a company you trust, as you don’t seem to trust the one you’re using. The higher premiums should only last a short time.
You said you were contacted by the adjuster and that your wife was involved. They would have asked if she was in the accident taken a statement and then made a decision on fault. Afterwards they would have paid the claim, if your wife was even partially at fault. My guess is that they did nothing wrong and you have your panties in a bunch. And yes, I used to work in Insurance on the corporate side.
Yes, we were contacted by the adjustor, and our account of the story was taken. Afterward, we have not heard a decision on the claim, and our premium did not increase.
What I wanted to know, do insurance companies practice the locking in otherwise good drivers this way? It’s probably impossible to prove, but I feel that it’s wrong being prevented from gettign better deals for something that could be “fixed” by simply wiping off.
Thanks everybody!
Despite all the hoopla there are some warning that it’s not over yet.
This is a good article that discusses the changing nature of the financial crisis and a second article on the food shortages.
Two Essays on the Continuing Financial Crisis
Published Apr 28 2008, 05:00 PM
by John Mauldin
http://tinyurl.com/5mnodp