Bits Bucket And Craigslist Finds For May 9, 2008
Please post off-topic ideas, links and Craigstlist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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California tax proposals target beer-loving, pornography-watching yacht owners:
http://tinyurl.com/5jvzvx
The article has a laundry list of the current tax proposals, ranging from amusing to appalling.
Two related to housing:
“But Davis says he knows people are suffering financially and has proposed a property tax break for low-income seniors. There’s a catch: The proposal (AB 2459) would require seniors to “work off” their taxes in county offices, doing such jobs as gardening, record filing or data entry.”
Assuming these seniors didn’t buy recently, their property taxes should already be relatively low thanks to Prop. 13.
“Assembly Speaker Fabian Nuñez (D-Los Angeles) has expressed bewilderment that GOP lawmakers won’t even talk about eliminating the mortgage deduction for vacation homes valued at more than $1 million — a move Republicans say would discourage the wealthy from buying property in California.”
Why should there be any tax breaks for vacation homes, regardless of value?
As a former student in the ULASD at the JC level, the educational budget needs to be revamped. I am not necessarily blaming the instructors, however some are at fault. The real problem is the set up of the degree requirements for AA degrees and the “hard a@s attitudes of the instructors that think their job is to weed out as many students as possible. I remember a similar attitude at the University. The educational system is insane. The job of a teacher is to teach in a form or way that students pass, not discourage students.
http://www.latimes.com/news/local/la-me-taxes9-2008may09,0,5137016.story
“If we don’t do some of these things, we are going to have to cut nearly $5 billion out of schools,” said Assemblyman Charles Calderon (D-Montebello), chairman of the Revenue and Taxation Committee. He has proposed some of the Legislature’s more unconventional measures, including taxes on digital downloads and adult entertainment.
wow - its different here
everyone gets an A
my kid is in the hardest classes and never opens a book
This is a classic symptom of a system that is lacking in resources. When that happens then you have to “weed out” the lower performers. This is very common in 3rd world universities. They make the first two years really hard.
My daughter has that at her college. They have “enabling” discussion at end of 2nd year to determine if student is capable of going on to last 2 years. She just received her letter yesterday that she’s good to go.
Have you ever sat down and calculated the costs of a 50% failure rate in tax supported school systems. I do not know as I am not the brightest person in the crowd, but I would think that a better use of tax payers’ money would to insure that students are adequately qualified and educated to take the class. jmo
the U. of Fla used to do that, way back….now that they’ve ramped up the caliber of their offerings, they can afford to be more selective about who they accept.
It’s common in 1st world universities, too. I believe MIT for example still tells its first-years during orientation, “look to your left and look to your right - two out of three of you won’t make it to graduation.”
Caltech lets you know before you apply that they’ve got a high frosh failure rate.
On the same trip I visited a little engineering school called Harvey Mudd (sub 800 students.) In contrast, they told us that if they accepted a student, they had tutoring available to ensure the student continued on. Of course, because they were such a small school (very prestigious, too— insanely high rate of immediately employed graduates), they had very little in the way of financial aid, and admitted that money was the #1 reason that applicants chose other schools.
Assuming these seniors didn’t buy recently, their property taxes should already be relatively low thanks to Prop. 13.
Which means that there is a major disincentive for seniors to downsize into property that is more suitable for their needs. This is a serious misallocation of housing stock. It also represents a large pent-up supply that is missing from the statistics, that will eventually hit the market.
If Prop 13 were really meant to protect seniors, it would have just given them all a tax break whenever they bought, and no tax break to anyone else. Including corporations.
Seniors! Arrgh!
What is the difference between a senior citizen who is retired and a young couple with the exact same income fromi working their butts off in two or more jobs? Other than perhaps a lack of health insurance, a lack of wealth (as in a house that SHOULD BE paid off), and children to take care of?
Well, for one, seniors are a HUGE voting block/lobby (AARP)…
And the majority has every (ethical) right to vote money out of the pockets of the minority and into their own.
They also look all old and decrepit so people feel sorry for them and want to give them breaks.
I looked it up, he’s a real estate agent. In NW AR, he was probably making some jack in the last few years, especially if he’s well connected (which he probably is since he ran for office a couple times). He also owns some commercial property.
Oops, that ended up in the wrong thread.
I agree completely. My own mother, who lived in two rooms of an eight-room house which was allowed to fall apart, had a tax abatement. I regard these as absurd. Why should a senile, elderly person be allowed to suck up much-needed housing because they have an idea in their minds that that is what they want? It may sound harsh, but my mother would have been much better off in senior citizen public housing. She would have been less isolated, and probably would have drunk less and lived longer. Tax abatements for seniors should only be offered in areas without housing for seniors.
Wow…
Is it private property or not? What rights do you, or anyone else have, to throw someone out of THEIR home so you can take over?
If you don’t like the prices/costs, wait for them to drop or move somewhere else!
BTW, it’s attitudes like this that make native Californians really resent “foreigners” (from other states and countries).
Feel free to come to California, but don’t expect us to sit back while you complain about us (including seniors), our state and our way of life.
“What is the difference between a senior citizen who is retired and a young couple with the exact same income fromi working their butts off in two or more jobs?”
WEll, if the senior citizen has the “exact same income” said citizen was clearly successfully employed, and a good investor. Kudos. Now that he’s older, and in frailer health,he gets to enjoy the rewards of his labor.
As for the younger couple…if they want to have multiple children, and own a home, why shouldn’t they expect to have to work for a living? If they need two jobs to swing paying for those options, that’s their choice.
Well the old people are no longer productive. Let’s be less sympathetic to the unproductive and more to the productive.
Wow! I feel like I’m reading a page from Logan’s run.
“Well the old people are no longer productive.”
Those seniors probably worked their butts off if they’re in those homes. If it weren’t for inflation or someone rescinding on a pension contract, they’d easily be able to live their days there.
My grandmother just died after living in her home for 70 years. The vulture realtors called her every flipping’ month seeing if she was going into the old age home yet. And ya know the yuppies would have torn down that home in a NY minute….the home that was good enough for her at 90 years of age but that was only about 1200 sq feet w/steep stairs and teeny rooms. They would have bought it for the land close to the beach and determined that they deserved it more than her.
Ha! My grandfather bought that land and built that home during the Depression working as a milkman. He didn’t have a lot of schooling because he was the oldest of 13 kids. His parents pulled him out of school to help take care of the others. He worked his butt off. What would have happened to gramps if he had finished school? I got almost straight A’s in a better school district and my 5th grader just tested at 12.7 grade level in one assessment… Undereducated doesn’t mean people are stupid.
To get what he wanted, he moved from the more expensive MA and gave up extras to be able to afford his home….. He invested intelligently enough to keep a wife that survived him by 25 years in their home. If you’re going to suggest today’s avg adults work that hard or sacrifice that much, you’ll only get a snort and a chortle from this accused work-o-holic. My last co-workers put more energy into sabotaging the work to make other departments look bad than putting out a quality product (showed the emotional intelligence of 12 year olds)
///Rant off
well done
Well said, CarrieAnn!!!!
“What is the difference between a senior citizen who is retired and a young couple with the exact same income from working their butts off in two or more jobs?”
Seniors don’t breed (anymore), so they only care about health care…not health care and education.
45% of California’s budget goes toward schools. Perhaps a procreation tax could help with the overcrowding problem?
Will someone think of the CHILDREN!
Oh, someone has: opening sales over $900 million $$$$$$$$$$$$$ in the good ol’ US of A alone.
Grand Theft Auto IV
Metal Gear Solid 4: Guns of the Patriots
http://www.gamedaily.com/games/
And there are 72 other vestal versions of violence available on-line, if these 2 don’t suffice.
Oh, someone has: opening sales over $900 million $$$$$$$$$$$$$ in the good ol’ US of A alone… Metal Gear Solid 4: Guns of the Patriots
Don’t knock Solid Snake. I’m in my 30’s and still love to play Metal Gear games. These things aren’t just for kids… I may actually buy a PS3 now that Snake is back.
“California tax proposals target beer-loving, pornography-watching yacht owners”
What did Charlie Sheen ever do the the legislature?
Probably what he’s done with/to everyone else. Which is to say, “a lot.”
“Assembly Speaker Fabian Nuñez (D-Los Angeles) has expressed bewilderment that GOP lawmakers won’t even talk about eliminating the mortgage deduction for vacation homes valued at more than $1 million”
Get a grip, Fabe…All those ass**les probably own vacation homes.
DOC
Should I take a little detour over to Water Street and heckle the AIG crowd before going into work? Let’s see. I have my trusty quarter out of my pocket. Heads, I go over and heckle AIG. Tails, I go and get a Monster and go to work. Here we go. Damn it. It is tails. I guess I will have to be content in the fact that their biggest ever loss will be pain enough for them on this morning.
The Masters of the Universe were telling me the “credit crunch” (how I hate that term) is over. Then how come AIG is seeking out $12.5 billion and Citi is looking to sell $400 billion in assets? Could the masters be wrong?
“And the masters make the rules
For the wise men and the fools
I got nothin’, ma, to live up to”
I’ve got a hunch AIG is the counter party to a lot of the Fannie Mae paper. They are both mixed up in a lot of the off-shore SPE stuff and were quite cozy in 2005-06.
I read yesterday somewhere that JP Morgan was the counterparty to the Bear Stearns paper and thus the bailout was really of JPM
This makes the point I’ve been trying to make with friends and co-workers. They think Wall Street is some well oiled machine. They don’t understand that these guys don’t know who owns what, owes what or holds what. It is incomprehensible to J6P that these guys that siphon billions might just not know what is happening. This is what scares me. I don’t think anybody has a clue how ugly this might really be.
The CDS market in 2007 was something like 63 trillion. Billions are for wimps.
Citi’s 400 billion dollar garage sale.
http://www.reuters.com/article/marketsNews/idINN0946875320080509?rpc=44
“A billion here, a billion there, pretty soon you’re talking about real money.” Sen Everett Dirksen (R-IL)
That was 1950s talk, now it is a Trillion here, a Trillion there and keep the change.
The trebble troubles with Trillions…
“the bailout was really of JPM”
Perhaps this is why the CEO is so confident the crisis is nearly over?
Speaking of counter parties, I wonder how many life/home/auto/long term care insurance policies won’t pay off in the end because of this, and how far premiums will rise.
Add that to the pension disaster.
yes, and it might take a very long time before we find out.
As an example, in Netherlands a big part of post-2000 mortgages are I/O loans running at least 5 years, sometimes even 10 or 30 years. All these loans assume that homes will keep appreciating, which is a reckless assumption given the extreme prices at which these people were buying. But for the next few years, nobody will care as long as the owners pay their (relatively low) interest fees.
I was wondering about this myself. We switched our auto and homeowners insurance to AIG a few months ago because the were able to under cut our previous insurer (almost 50%). It will be interesting to see what happens when renewal time comes.
Better keep that trusty quarter dry since it will rust once they start making them out of steel again ( or lube it once in a while).
Anyone else notice the 1$ bills accumulating in the wallet vs the quarters a few years back?
RIght — the $1 note is the penny of fifty years ago (at least in terms of how we treat it as small change)…
It’s a good thing incomes have kept up with inflation… oh, wait… never mind.
I like the idea of rusting coins: it adds a new way for the crooks to take your money, this case literally, but having it rust away before your eyes! Far more dramatic than mere inflation.
As Mexico went through hyperinflation in the 80’s and early 90’s, one export item was older Centavos & Pesos coins being sent by truck to Estados Unidos, to be melted down.
The traffic is now going from us, to China.
I routinely throw pennies in the garbage these days, and I’m very tempted to start doing the same thing with nickels.
Another bottom?
The bottomless bottom.
Sweeps into prime loans… So late payments and defaults are working there way into the ’solid’ loans, and I just heard that everything is a-ok no recession.
http://www.usatoday.com/money/2008-05-08-prime-mortgage-delinquencies_N.htm?loc=interstitialskip
‘The first concrete evidence that delinquencies on mortgage bills have spread well beyond those with subpar credit’
That’s the USA Today for ya. When they first hear about it, it’s just happened.
It’s amazing how putting my hand in front of my face makes the world disappear. I guess USAToday discovered the same thing. I take my hand away and, “holy cow. Where did all of this stuff come from?”
Have you ever thought of stand-up comedy? I think you might be a hit.
“you can’t see me now”
I’ve always liked USA today because it’s bright and shiny and colorful and there are pretty pictures. Then I don’t have to think so hard.
Harvard Lampoon did a parody of it in the late 80s I think, it’s well worth it to pick that up if you can find it anywhere. One of those few times I was sick to my stomach I was laughing so hard.
The USA Today: written for poor schlub “road warriors” staying at the Hampton Inn while selling widgets in Peoria and searching for a reason to go back to the wife and kids on Friday instead of taking Stephanie the secretary to Cozumel with the kids’ college money.
What’s this “college money” I keep hearing people talking about? Since when does the middle class save for anything?
They SAY they do. Sayin’s doing you know.
You are so right, Colorado. My hubby comes home every day with tales about how his co-workers are putting nothing in their 401K’s…and there is a 50% match. How dumb can you be?
Testifty! I get about $450 in matched money every month, and its fully vested! Talk about leaving free money on the table.
“•Falling home prices. As house prices collapse, especially in states such as California and Arizona, some people with prime loans are finding they owe more than their homes are worth.”
“Many are walking away or delaying payments while they decide what to do.”
It’s likely not “delaying” payments, but instead “stopping” payments.
Deciding what to do: Do I leave now and mail in the keys or do I stay and live rent-free until removed through foreclosure?
These dumb asses who are losing their asses now might finally realize all gravy trains come to an end and it’s best not even to board. How does one stop the bleeding when there is nothing left to bleed? Besides, the bleeding is best stopped early by slashing the nickel and dime stuff and the rest will fall into place. Getting off the the train after the wreck is a moot point.
These dumb asses…
“…losing their asses on the bleeding gravy train, slashing the nickel and dime stuff before the wreck”
Man, there has to be an award for the post with the most metaphor-per-word ratio.
Dear Suicide Loan Servicer,
As usual, we will be unable to make my scheduled mortgage payment this month. This should really work out well for both of us as you are are swamped and unable to process all of your foreclosures at the present time.
Rest assured that the myself, the wife, 3 kids and the cat are fine and we would rather owe you this payment than cheat you out of it.
We are happy that your are still interested in our financial and housing welfare so please …feel free to stay in touch.
Sincerely, Joe6P
P.S. We have plenty of stored rice and our black lab just loves the new swimming pool
I have six large bags of dog food for my two shelties.
I actually bought non nutro brands.
I keep them in a shed in my rental’s backyard and I can tell you that the coyotes know it’s in there.
I have six large bags of dog food for my two shelties.
Haiku version:
Dog food, six large bags
Lie in the rental’s backyard
The coyotes know
/gravy/ - don’t know how that happened…
Hmmmm…..2 shelties, rental, coyotes
Ouro do I know you outside the blog (in CNY)?
Carrie, I remember you live near me. But what is cNy?
I’m in Fire Mt.
Can’t people just hide their mortgage bills in Level 3 accounting and not worry about them? It works well for the banks and other crooked institutions, so it should work here.
It would be a great idea except that the actual “Level 1″ number has a nasty habit of popping up on that paper! Doh!
Now if you could take that loan you made to Uncle Fred back in 1995, on which he’s never paid a dime, and mark that at face value plus interest, and use that as partial collateral for your next refi… now we’re talking!
“Sweeps into prime loans… So late payments and defaults are working there way into the ’solid’ loans, and I just heard that everything is a-ok no recession.”
Didn’t you hear? Hank Paulson said, ‘the worst is behind us’- “Mission Accomplished”. Carry on.
Don’t forget contained.
..or “McMansion Accomplished” ?
..or “mcmansion impossible”
Mortgage firms cool… This Frank fellow is just plain bad news… As are his fellow ‘lawmakers’.
But mortgage companies may face pressure to use the program. “I want to put the servicers on notice,” Rep. Barney Frank (D-Mass.), a co-sponsor of the bill, said at a hearing last month. “If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem…they can expect much tougher regulation in the future.”
http://online.wsj.com/article/SB121029582718379595.html?mod=googlenews_wsj
voters feel pain
i help ease pain
you vote for me
- Tarzan logic of the imbeciles in congress
–
“the imbeciles in congress”
What about those who put them there? Is a voting choice between two or more “imbeciles” really a choice??
Jas
I suspect this is elaborate kabuki.
Mortgage companies helped write this legislation as surely as the pharmaceutical companies helped write the prescription drug bill. I suspect they are acting like this bill doesn’t help them, in order to assist its passing. I call shenanigans.
neuromance.
I am sure you are correct. Thanks for the post.
anyone know where to get the text of the bill?
Well its finally happened - First it’s the Dollar, now it’s our coins. Slippery slope.
http://money.aol.com/news/articles/_a/house-passes-bill-to-revive-steel-coins/20080508154109990001?icid=1615934834×1201928650x1200304037
Yeah it’s a slippery slope - we’re already at the bottom though. The top was 74 years ago, and we’ve been sliding ever since.
Next stop wooden nickels
What the “plug Nickel”?
sheesh..This is NOT the time for wooden nickles.
We’re having enough trouble passing the “magic housing beans” off on joe6p
“Gresham’s Law” states that bad money (steel) drives out good money (copper & nickel)
http://en.wikipedia.org/wiki/Gresham’s_Law
Nice… so, now we’ll be talking about when coins were made of nickel and copper, just like the “old timers” talk about the days of silver coins.
Why don’t they just cut to the chase and put up a few downloadable jpeg images on the Mint’s website so people can just print out their own money at home? It’s not like it will be worth much of anything in the future anyway, and think of the cost savings!
Yes but paper and ink jet cartriges will cost more than a mortgage payment
downloadable jpegs - mwhaahahahaha
or wait. forget printing the jpeg, just google a picture of some currency on your iphone and show that at the checkout counter.
You stop and wonder, all these men and few women in the congress hall thinking, ‘hmmm, what bullshit bill should we make today,hmmm’ oh yes, lets not do anything really constructive for the people who voted us in, lets ruin the economy further.
Isn’t there something else they could be doing?
Once I thought, maybe I will run for office and live off the dole and have a pretty retirement pkg and health insurance,go to fundraisers,lunches,dinners,balls, la-di -das..and junkets by lobbyists ( what would be the equivalent of a lap dance for a women?) , but then I thought, I would have to lie, cheat and steal and Then try to sleep at nights.
Seeing how the idea of going to all the effort to make Cents & Nickels, just to have them sent to China as scrap metal, is our government’s way of telling the Chinese, we aren’t fooling around anymore and instead we’ll just sell you all the copper & nickel you’d like to buy @ Full Market Rates, as steel (magnetic) becomes more attractive(way cheaper), to make new coins of the realm.
Things Change
Will the Mortgage Industry Pay for Its Crimes?
By Danny Schechter, AlterNet Posted on May 9, 2008, Printed on May 9, 2008 http://www.alternet.org/story/84592/
snip
>>>Bank robberies have always been up the FBI’s alley, and after all, this is a bank heist case, perhaps one of the biggest in history. Only it was the banks that were doing the heisting.
The New York Times reported May 5th that a new criminal investigation was finally underway.
A G-Man explained anonymously: “The latest inquiry is broader and deeper. This is a look at the mortgage industry across the board, and it has gotten a lot more momentum in recent weeks because of the banks’ earnings shortfall.”
At last, institutional fraud may be on the agenda. At last, deeper questions are being asked. There have been some Congressional hearings but so far none have risen to a Watergate-type level prompting in-depth investigations fueled by subpoenas.>Despite its widespread role, fraud hasn’t yet been at the forefront of proposed rescue plans, which center on refinancing people out of loans now resetting to higher rates.”
Why would reputable bankers and respected investment houses engage in these dishonest activities? The short answer: money, and lots of it.
“…and it has gotten a lot more momentum in recent weeks because of the banks’ earnings shortfall.”
Convict them before they run out of money?
Instead of fraud, I think we should call it “undocumented lending” in honor of all of the undocumented lettuce pickers who got loans.
Good one!
LOL! We are the “Undocumented” Nation!
The part that I don’t get is how Congress can propose bail-outs without a in depth investigation of the cause of this housing crash .In large part fraud and other crimes caused the major hike in prices ,therefore this mess should be treated like the crime wave that it was .
For Congress to propose bail-outs as if Wall Street , the lenders ,and the borrowers were victims of a innocent crash in the market ,rather than a fraud ridden Ponzi -scheme coming to a end and exposing the fraudulent lending is absurd.
What about the failure of our political powers to address crimes and cover it up instead with all this talk about poor homeowners and poor lenders .
It a duty for the politicians (who claim to be the lawmakers )to address crime ,not cover it up and buy it off .
I would guess that a good percentage of the loans that are going bad were rooted in fraud pursuant a liar loan ,or a cash back scheme ,or a inflated unjustified appraisal , or a simple lie by a investor that they intended to occupy the property so they could get a low down low doc loan .
You can’t make bad loans good, and you can’t make loans that are conceived and originated by fraud means good . \
Why isn’t Congress asking the question ,”Why can’t this borrower make their payments ?” With the exception of borrowers that actually lost a job or income , any borrower that was approved on a loan they can now can not afford ,was given a fraudulent loan or they obtain the loan by fraud . There are some exceptions for some loan defaults being the result of a defective standard of guidelines for the loans that did not take in account h0w the borrower would pay the increased payments when they qualified based on the teaser rate .
What is to be said of a industry that promoted a Ponzi-scheme that promised stupid greedy borrowers that they could always refinance out of the toxic stupid loan they took out because real estate always goes up ?
There should be no bail-outs until it can be determined who are the criminals and who aren’t . If the powers continue to cover up the root cause of the housing crash ,than it will sit the stage for absurd
remedies with eventual default anyways. And finally , how can the lawmakers propose regulations for the future when they won’t even admit what flaws in the system created the ability for this lending crime wave to flourish ? Congress/Senate must be vetoed until the truth can be exposed ,or they will be guilty of conspiracy.
I’m with you. I wrote my Congressman, Pete King. Every time I think about about writing my Senators Hillary and Chuck Schumer, I say to myself “why waste my time and energy” for me, that says it all re: the Democratic party.
As Vallejo, California’s home prices plunged, the once-humming Navy town on the north edge of the San Francisco Bay seemed like a good place to settle down, said Tim Medrow, a manager at a store that sells floor and bathroom tiles.
Then came the city council meeting Tuesday night, when elected leaders voted to turn Vallejo into the largest California city to declare bankruptcy. “It’s crippling the city,” said Medrow, 32. “It’s already feast or famine. And it’s only going to get worse now.”
Vallejo, with a population of 117,000, is being squeezed by declining home sales that have rippled through its economy, cutting into the taxes it relies on from local retailers and home owners. It has been pushed to the breaking point, city officials say, by union contracts with firefighters and police it can’t afford or renegotiate.
http://www.bloomberg.com/apps/news?pid=20601109&sid=ayyb89wJdDek&refer=home
The amazing thing is - Vallejo’s home prices are still double the pre-bubble prices - so tax revenues are still way above normal. Apparently the city council is composed solely of teenage girls.
“We can’t be out of money–we still have checks in the checkbook!”
Well. That is correct, isn’t it?
Not amazing at all.
When your community is growing, it has relatively few retired public employees getting pension and retiree health care benefits relative to the number of young and healthy working public employees.
But as it reaches build out the ratio eventually shifts.
This wouldn’t matter if the benefits were pre-funded, because the future costs would be paid for at the time the public employees were working. But it’s easy to fiddle the assumptions on pensions, and health care isn’t prefunded at all.
The result: New York City in the 1970s, or postwar and suburban American in the next two decades.
You know, I suspect citizens refuse to pre-fund, because the citizens know that somehow, someway, the politicians will find a way to spend it for their pet projects. Just look at the supposed build up in the SS trust fund. The excessive cash is projected to run out relatively soon, and people are already complaining that we will not have the funds to pay that we are obligated to.
I’m trying to explain this risk to local government in my Dutch city, where homeprices are 5-10x the value from the early nineties. Local government gets most of its money from land sales (so they have every reason to push land prices up) and RE related taxes. Of course taxes for other municipal services have been rising at double digit rates too, but there are limits to what people want to pay for things like garbage collection (up a few 100% at least, just like home prices).
Despite what’s happening in the US, no one wants to listen. If there is a budget problem, they will just build some more apartments and the budget is magically healed again. And of course they spend lots of tax money on homebuyer subsidies, so land/home values can keep rising …
The problem with a house of cards is that each new layer adds more and more pressure to the bottom layer …
Experts say there is a large body of evidence to suggest that if you press that kind of matter hard enough and apply enough hot air it turns into diamonds. So they are investing in the future.
The State of California sucks up a huge percentage of the property tax revenue without letting the counties or cities anywhere near it. This only makes the wipeout worse because they had every reason to know that their finances were falling apart during the boom times.
“As Vallejo, California’s home prices plunged, the once-humming Navy town on the north edge of the San Francisco Bay seemed like a good place to settle down…”
I repossessed plenty of automobiles from Vallejo, CA. where some of the Bay Area’s largest ghettos are located. I remember being fascinated by the amount of Section 8 spending that took place there. Older groomed neighborhoods still exist, but they are literally surrounded by young glowering men and pregnant women with thousand-yard stares. It’s not a place I’d care to spend my feeble years.
by union contracts with firefighters and police it can’t afford or renegotiate ??
Exactly….And it permeates through the whole muni system….Its the biggest scam going….two year firefighter is making 100k + here….
If you had a job, where the next goodbye to your wife and family, might be the last, if you were expected to save some dunb ass homeowner, smoking inbed, if you were expected to take a bullet in the name of law enforcement, you would expect to be paid for the risk. To say that a firefighter or a policeman is over paid at 100k is outregeous! What risk is there going to an office and playing games on your computer at 100k a year..as a taxpayer at the local level they deserve every dollar they earn.
They are overpaid…very much so. Very few police officers as % of the police force are exposed to the possibility of loss of life on the job. Most are desk jockeys or meter maids. If they are out day in and day out on the beat…then they should be paid more. Of those out there only a fraction do their job well enough to serve $100K/year. Vew few. For every cop I know that serves the battle pay, there are a dozen who deserve 40% of that amount and anotehr 20% who deserve pink slips.
On your logic, geez, how much should the American solider get paid? $250K/year?
On your logic, geez, how much should the American solider get paid? $250K/year?
Guess it’s safe to say no one in your family ever served, eh InfoAge?
Re 100k+ jobs for police and firemen: it appears that the level of compensation for a particular job is based on the value placed on the function of said job. I would therefore conclude that society HIGHLY values crime and arson.
A Fear of Big Demand for Corporate Loans
http://www.nytimes.com/2008/05/09/business/09loan.html?_r=1&ref=business&oref=slogin
The potential exposure is enormous. Collectively, banks have pledged to lend companies more than $1 trillion. And because most of those loans have not been made yet, and many perhaps never will be, the banks have not accounted for them on their balance sheets.
Hey! Making promises you can’t keep! What’s so new about that??? Sounds like any other segment of our society.
Yeah I don’t take financial news very seriously until the ink is dry.
And the credit crunch rolls on.
It used to be American corporations earned the money they needed to run their businesses. Nowdays they have to borrow it; They are, in effect, HELOCing their companies in trying to keep them alive.
Oh, do I ever love being in cash.
Tha Investment Banks can’t lend, they got their money tied up in Commodities and Oil and eventually they have to pay the FED back at an interest rate of 2% for borrowing all that CHEAP, EASY money.
But doesn’t this new Fed-funded carry trade work great when Megabank, Inc can borrow at 2 pct and dump liquidity into commodities, driving prices through the roof? Selling said bubble-priced commodities lets them repay their 2 pct loans later on and profit royally off the screwed dollar savers whose wealth was inflated away…
Yep
OMG I never would have thought of that…
I run Zscores on most companies of interest (for some reason that I am not smart enough to figure out, Zscores don’t work well on Techs). The deterioration of many companies in the last 8 weeks is a fright.
The true credit insolvency starts in August.
Hoz,
How can that be? I was just watching Bloomberg and CNBC and their so called experts say we have reached the bottom.
I don’t know. I’m just a number junky. Obviously the mopes on the news have all the answers. I just have questions and doubts.
Why August?
Last year’s Funds of August, brings us this year’s Runs of August…
A Run on the Dollar internally and externally. People getting scared and pulling money out of banks here, and foreigners getting rid of their greenbacks, en masse.
….. leading to next year’s bums of august.
Touche, 0.0
Because of the zummer.
Corporate inability to finance or refinance. Much of Corporate debt is short term and due in August. Without strong balance sheets, no reasonable lender will give these companies a Zimbabwean dollar. About 60% of corporations are “junk debt”.
The strong companies will be able to borrow from the Middle East or China, India, Brazil etc. The weak sisters will be doing the Citigroup - selling assets to survive.
US corporate banks have little moneys to lend. The same way lending standards have been raised for home buyers has also happened in the corporate finance. This is the beginning of the third inning.
And I understand today’s game is just the first part of a double-header, literally and figuratively.
This supports go long short financial and Russell 2000 strategy;however, a strong policy of buying panic driven selling is what supports this thesis medium term…as market climbs 30% off lows, prior to blow off top commodity shut down food and energy bubble that is just forming…..when I here bitching about gas and food on this blog…….you have not had your fill.Show me higher short term rates, and you find inflation….dont matter the FX.
fill the bellies of this blog with cake and death.
disclaimer:no equities less than double digit dividends.
apologies to the regular readers.
So, hoz, sounds like you are closer to Jim Roger’s weltanschauen than to Jamie Dimon’s?
zscores
Wish the article gave a better explanation how to interpret the final Z-score
All kinds of companies or mostly banking?
Oil hits a new record - $125 bbl
http://www.bloomberg.com/apps/news?pid=20601087&sid=armYFIWZS8V0&refer=home
Where is that guy who has been doubling down his oil short since 115? Maybe he hanged himself.
I don’t know about hanging, but in the last few weeks at least two people have jumped off buildings in downtown San Francisco.
I cannot recall if I have heard of this occurring since I’ve lived here.
And perhaps at the other end of some sort of spectrum of activity, in the last couple months the “random” freeway shooting has come back into vogue locally.
Do life insurance policies pay off for “suicide by cop”?
I suppose not if you are commiting a felony.
How about a misdemeanor?
This assumes of course a maximum level of narcism amongst FBs…
deja vu of california energy crisis and enron.
CiTi…. Should be broken up.
http://www.ft.com/cms/s/0/068c27a0-1d40-11dd-82ae-000077b07658.html?nclick_check=1
Are they selling the … hedge funds?
Here’s what NYC was talking about IRT AIG and Citigroup
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIWLV5OvlL9s&refer=home
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9FilY7Cc8Ps&refer=home
Real Estate Sales Still Slumping
http://www.nwaonline.net/articles/2008/05/08/business/050908marresales.txt
Thursday the Arkansas Realtors Association in Little Rock reported 282 homes sales closed in Benton County during the month of March, down 22.53 percent from a year-ago.
Washington County reported steeper declines with just 173 home sales, down 32.16 percent from March 2007. Year-to-date the declines were 28 percent in Benton County and 31 percent in Washington County.
I don’t see the much hyped bottoming occurring in AR.
Heheh, can I gloat a little? I sold my home in Springdale (Washington county outside of Fayetteville) in Aug 2005. I had bought it in 1992 and got rid of it at the very top by total dumb luck… It was obnious even then that things were being drastically overbuilt - even on WallyWorlds home turf.
Prices are still hanging on mostly (I’m in central AR), but I’ve seen a couple places that were for sale last year still not sold. I think they would have sold a year earlier. The other day I saw a house on craigs list that 2 years ago I think would have been over $100 /sq.ft., they were asking less than that. So maybe prices might be starting to buckle a little but I’m hoping they will really come unhinged by the end of the year.
Speaking of Arkansas, I remember mocking this idiot last year at this time and lo and behold, Studs has been at it again. Something tells me he doesn’t make enough to support this endeavor.
http://news.yahoo.com/s/ap/20080509/ap_on_re_us/18_kids
I’ve wondered how he supports all that. I know they do a lot of non typical things, like get hand outs for clothes and shop at thrift stores. But still, heat/cool (and build) a 7k sq.ft home, food, etc. Got to be very expensive. I think I heard once somewhere what he does for a living but have since forgot…I seem to recall maybe it had something to do with real estate.
He lives about ten minutes from where I lived in Springdale, Tontitown (founded by Swiss Italians) is a little adjunct town next to it.
They are supported by the church and he ran for Congress a few years ago on the fundamentalist ticket. They get by on donations and doing musical and TV shows (they all play), and whatever. They get around with a donated bus.
Both of them are on the far side of extreme fundamentalism. Very annoying having to hear about them all the time when you live in the local area.
He should be a regular at the local sperm bank. He’d probably make a fortune.
“I’ve wondered how he supports all that.”
I have a feeling that Discovery Health is what is supporting them. At least until the ratings tank.
Wasn’t he a realtor??
Aging sewers threaten environment, public health
Despite penalties, sewer systems still fouling rivers, streams
In March, between 700,000 and 1.3 million gallons of human feces and other waste spilled from a damaged pipe into Grand Lagoon at Panama City Beach, Fla.
In January, about 20 million gallons of sewage flowed into Pennsylvania’s Schuylkill River after a 42-inch pipe ruptured near Reading, Pa.
That same month, heavy rain, deteriorating pipes and operator error combined to send about 5 million gallons of sewage into Northern California’s Richardson and San Francisco bays.
http://www.indystar.com/apps/pbcs.dll/article?AID=/99999999/NEWS0302/80507058
It would be nice if our illustrious, clueless, pandering, backward thinking, clown-like leaders spent $300 billion on an aging and in some cases dangerous infrastructure instead of on irresponsible banks and FBs.
“It would be nice if our illustrious, clueless, pandering, backward thinking, clown-like leaders spent $300 billion on an aging and in some cases dangerous infrastructure instead of on irresponsible banks and FBs.”
Or on wars in the Middle East.
The “Middle East” seems so far away — except when it comes to your doorstep in NY City at 600 miles per hour…
You realize we are not even looking for Bin Laden any more…
Thanks Apple, its good to see not everyone is suffering from memory loss.
Stop complaining and enjoy your low capital gains rates.
Think of what all could have been accomplished with the $160 billion being spent on this stimulus package. That kind of money would have done a lot to help some of our aging infrastructure, while at the same time putting a lot of people back to work in the USA.
Commie!
Heretic! Unbeliever! Witch!
The inquisition.
what a show.
The inquisition,
here we go.
We know know your wishin,
that we’ll go awayyyy…but the inqusitions here and its here to stayyy….
I like Eddie Izzards vision of a modern day Church of England Inquisition: Cake or Death?
Cake or death?
Um cake for me.
Cake or death.
Death. No, wait, I’ll have some cake.
Cake or death?
Cake please.
Um…we’re out of cake.
So my option is “death or death”?
I’m paraphrasing of course. That whole stand up show is one of the funniest I’ve ever seen by anyone.
‘So my option is “or death”?
‘Well, we only had three bits of cake. We didn’t expect such a run!’”
Dressed to Kill. Rent it. I second Bluprint’s endorsement of funnies stand-up ever.
Although Brian Regan is a close second.
But… but then people might notice there is a problem! Far better to hand out “free” money so people can spend it on junk while hoping that the road doesn’t collapse on them while driving to Wally World to fund the Chinese military with their purchases. Brilliant!
Ever notice the GIant Sink Holes opening up, recently in Texas. And they wonder why? And they don’t know what to do about it?
Lets spend more$$ on Halliburton producing food at 100x the actual costs.
Are the sinkholes over where oil has been drilled?
Add a deteriorating infrastruture to debts, all kinds of deferred and not funded promises to seniors, dependence of foreign oil, and environmental issues. Our society IS a FB.
“Our society IS a FB.”
Indeed. I don’t get folks who act like the rampant corruption, slight of hand and greed that are bountiful in this whole debacle is somehow just contained within the “housing/credit mess”. We have a systemic problem.
“We have a systemic problem.”
Totally agree but it’s laughable that this money would be better spent by the gov’t on “infrastructure”. The problem is there is too much tax payers’ money in Washington. The best solution is to remove the money that Washington has to spend. Drastically shrink the size of gov’t and give the money back to the people and let them spend how they want to spend it. Having the gov’t spend the money in another area simply perpetuates the problem.
The morons would spend it on Hummers, flat-screens and fancy vacations.
I’d much rather see infrastructure projects that stimulate the economy over here in the U.S. (rather than China’s).
Ernest wrote “We have a systemic problem.”
I agree.
Hear, hear.
If they’re looking for a way to spend 300 billion that they don’t have, it should be on a public good like infrastructure, not a bailout of gamblers whose irresponsible bets went bad (ie the real estate market players - the lenders and debtors).
limit up:
May 9 (Bloomberg) — Rice surged for a third day by the maximum allowed as Nigeria and the Philippines, the two largest importers, sought shipments, further straining global supplies after a cyclone devastated crops in Myanmar
http://www.bloomberg.com/apps/news?pid=20601087&sid=acgkigV11YVk&refer=worldwide
take a fall:
LAS VEGAS — Sixteen years ago, developer Ian Bruce Eichner was forced to give his lenders the keys to his newly finished office tower in Times Square. The empty building, a symbol of one of the worst downturns in U.S. commercial real-estate history, ultimately cost his lenders and partners about $200 million.
http://online.wsj.com/article/SB121029701281679533.html?mod=hps_us_whats_news
“In an interview earlier this year, Mr. Eichner said he was a victim of the credit crisis, and that banks eventually would lend to him again. “It’s probably pretty safe to say that somewhere in 2009 or 2010, Bruce Eichner will surface with another one, something,” he says. “There’s zero that will stick to my shoes.”
This guy leaves investors holding the bag TWICE and still believes someone will lend to him again. Un-freakin’ believable. Sadly, he’s probably right.
“Who’s the bigger fool…..the fool, or the fool who follows him?”
I’ve always wondered who continually loans guys like this money. You see this kind of things of in corporations as well. Sometimes the bigger the failure the more likely someone is to get promoted.
“Fool me once, shame on you.
Fool me twice… … fool don’t get fooled again.”
Or something.
Fool me once, shame on you.
Fool me twice, shame on me.
“You can fool some of the people all the time, and those are the ones you want to concentrate on.”
George W. Bush
Good one, Neuromance. I was thinking the same thing.
Fool me once, shame on you.
Won’t Get Fooled Again
You see that’s the wonderful thing about the U.S. In other countries like Saudi Arabia or Japan or China - if you lost $200 million of other people’s money - your head would be rolling into a barrel.
In the U.S. though we believe in giving people a second chance. You can start fresh and lose even more spectacular levels of money, thanks to our permanent amnesia.
I especially love this quote:
Note to investors - NEVER GIVE YOUR MONEY TO SOMEONE WHO TALKS ABOUT HIMSELF IN THE THIRD PERSON. This person is insane and cannot be trusted.
(Think “The Jimmy” from Seinfeld)
Are you kidding? Well actually they’d make a public spectacle out of you and parade you and your lover on TV, you’d have your name on trashy magazine advertising in the subways.
Then you’d quietly disappear and live happily ever after on your estate in Hawaii.
That’s how the Japanese do it!
NEVER GIVE YOUR MONEY TO SOMEONE WHO TALKS ABOUT HIMSELF IN THE THIRD PERSON
Bob Dole endorses this message
UK watch:
May 9 (Bloomberg) — U.K. home repossession claims by mortgage lenders rose 16 percent from a year ago to the highest since the early 1990s, prompting the government to pledge more support to people struggling with their debts.
http://www.bloomberg.com/apps/news?pid=20601102&sid=a1kzpM2DC0cI&refer=uk
Do anyone you know anything about the rotting skeleton along the river in Laughlin NV. Did that happen in another boom bust cycle.
typical for EU policy (and probably US policy as well): privatize the gains, socialize the losses. There are few countries in the world where so many people became filthy rich with real estate speculation as in the UK. Now that the pyramid game is starting to crumble, suddenly the rules have to be changed.
I hardly think offering free debt counselling and legal advice is
going to save the FB’s in the UK, it’s just a soundbite to keep the masses calm for a bit longer.
Nothing can save the UK economy and it’s housing market.
Nearly everyone was an eager participant in this crazy
pyramid scheme these last ten years, but we’ve run out of
greater fools now, and that is that.
I have several friends in the UK who continue to insist that their prices will NEVER go down, well, not by much or for very long anyway, then a rebound, of course! What, I say? Well, it’s because everyone wants to live in [name a favourite town]!
When I mention recent news that prices are now at something like 8.5 times income for the whole country on average, they yawn and say “well, people have to live somewhere, so that will keep prices high”. Never mind that this alleged pent-up demand isn’t translating in new builds.
California, Florida, Nevada… these are all premonitions to me of what the UK will see, quite likely worse than the UK even saw in the previous bust. But this holds no weight for those who have staked their entire retirement saving on real estate investments.
Then again, a few do learn: I know two UK couples really well who were stuck with their houses back in 1992, unable to sell for years because they were upside down. And their jobs took them overseas. Ouch. Well, since unloading their houses a few year ago, they have been recently and continue to be happy renters. Once burned, twice shy.
city suits:
Homeowners aren’t the only ones claiming they were victimized by the subprime foreclosure debacle sweeping the nation.
Cities now dealing with scores of abandoned, foreclosed homes have started suing banks and mortgage companies to recoup their costs, while other cities are hauling lenders before code enforcement boards and county courts to force them to maintain abandoned properties
http://biz.yahoo.com/law/080509/59fdcf4157eb2f859fa00816d486efd8.html?.v=1
Good. Municipalities have their legal crosshairs on Wall Street. It’s about time.
More pressure on the bank’s portfolio managers to unload at lower prices.
Hmmm, near broke municipality’s lawyers vs Wall Street firm’s lawyers.
I wonder how that will work out.
Some municipalities are going after the former homeowners.
The Lockport Journal reports from New York. “Lockport City Court is laying down the law on responsible home ownership. Judge Thomas M. DiMillo sentenced a former homeowner to fines and community service Tuesday for his part in the deterioration of a property that he lost to foreclosure. DiMillo also warned the former occupant of another vacated home that she, too, faces consequences for walking away from title-holder’s responsibility.”
“‘At some point three years ago you had an obligation … that you couldn’t afford to do anything about, so you abandoned it,’ said DiMillo. ‘(That’s) a crime in itself.’”
Who is this DiMillo guy? Any chance he wants to run for Congress, or better yet, President?
Mail volume down:
http://tinyurl.com/57f4ct
“Year-to-date total mail volume is down by 3.1 percent compared to the same period last year—and if the trend lasts all year, USPS said, it would be only the seventh year total mail volume has decreased in the last 50 years. Postmaster General John Potter blamed declines in mail volume on weakness in the housing and credit markets.”
“Postmaster General John Potter blamed declines in mail volume on weakness in the housing and credit markets.”
Of course, it couldn’t have anything to do with the fact that USPS came up with a bunch of crazy rate raises, could it?
Every 1penney increase in gas = 19,000,000 for the USPS.
I blame the decrease in credit card solicitations. I haven’t gotten any in the past month. Used to get 4 or 5 a week. I take this a sign of deflation.
I got one a week or two ago. They were touting some “best offer” or the other. I wrote this note on their letter:
The best offer is to be debt-free!
Then I put the letter and the rest of their marketing materials into that handy post-paid envelope and fired the whole package right back at them.
I used to save them up and then switch them around and send them back in that handy post paid envelope.
I used to work for the company that does the data processing for 90% of all the credit card solicitations. Business is SLOW… I was recently laid off after 15 years there.
Very sorry to hear about your job loss.
Hope you find a new job soon!
We switched to on-line bill paying a few years ago, and it has dramatically cut our use of the USPS. We don’t send 7-10 checks a month now. I think that the trend to online payment has to be hurting the USPS.
TOPIC request
investments for STAGflation ?
gold is old and the larder’s already full of food.
What else do you have?
tia
Cash.
Buy what China buys, sell what China sells.
The riskiest market in the world is the US stock market
Go into Asian currencies, South American base metals, Middle East banks (NYSE:ADRE) and emerging market funds (NYSE:TRAMX). Go where the money is. Avoid the European and North American Markets, the risk/reward is horrible.
http://martinez.senate.gov/public/index.cfm?FuseAction=InNews.View&ContentRecord_id=d
Bwahahahaha! I was wondering why our condo complex is all of a sudden crawling with Colombians looking at foreclosures. One guy’s here already and he’s bringing in some buddies. Now I get it. Didn’t realize the Port of Tampa had so much business with Colombia. But hey, who needs a free trade agreement with Colombia? They already have one. It’s called dope.
Alright got my free money today. Going to go buy food and ammo and some gas to get there.
Food ammo and gas on $600? Maybe you can get two out of three…
You forgot the booze…
Same here. Booze, .45 ACP and more pinto beans.
Seeking advice…
401k seems to be doing a little better. If I were to switch over to a money market right now, it’d sort of be a break-even thing for me (made up the losses from the past ~ 6-12 months). What are some opinions on this? Stay the course or roll into a money market? I’m not sure why the Dow has been doing so well with oil, inflation, housing, etc., but for some reason it does continue to do so.
See hoz comments above about buying what China buys and sell what China sells
China buys the chinese stock exchange. How’s that been doing?
Down 8% YTD, up 30% in the last 5 weeks, up 60% over the last year. lol
Hoz, what is it you watch for China? I look at the SSE Composite Index and it’s been a massive dog…
China also buys treasuries yielding %0.00000000012 in worthless dollars. How’s that doing?
VFIIX
I was thinking about this fund pays 4.78 and has a duration of 3.3 years. GNMA fund backed by the government gaurenteed mortgages. I know the government is buying up toxic loans but I feel this same government will just raise our taxes to pay for any loses. Inflation would kill this fund but I’m thinking inflation is about to give way to deflation. The FED has failed to reinflate housing and seems to just be pissing everyone off with high gas and food prices.
Real-Estate Drop Has a Green Lining
Developers are dropping plans to build on some choice pieces of land and instead are selling it for such uses as public parks and nature preserves.
Those who ardently seek to pave over the planet will be angry at this. Imagine, the nerve! Letting trees live where we could put in another huge, useless shopping mall of tract of overpriced McCrudshacks! The horror!
They are already angry. Why do you think they are dumping it?
I love this story…WSJ dry humor at its best.
PAGE ONE
For Mortgages Underwater, Help Swims In
Tiny Fish Clean Pools
Of Foreclosed Homes;
Eating Up Mosquitoes
By MICHAEL CORKERY
May 9, 2008; Page A1
‘”They are real heroes,” says Josefa Cabada, a technician at the Contra Costa Mosquito & Vector Control District, a government agency. “I’ve never seen a mosquito in a pool with mosquito fish.”
The mosquito fish is well suited for a prolonged housing slump. Hardy creatures with big appetites, they can survive in oxygen-depleted swimming pools for many months, eating up to 500 larvae a day and giving birth to 60 fry a month. That can save environmental crews from having to repeatedly spray pesticides in the pools while the houses grind through the foreclosure process.’
This bit of anecdotal evidence makes one wonder just how big the foreclosure inventory will be this time next year once the current wave of foreclosures has finished the grinding process, as the number of homes entering foreclosure early this year is at least three times the peak level of the early 1990s bust.
Property Mogul Poised to Fall Again
Ian Bruce Eichner is on the verge of losing control of his Las Vegas casino-resort project — 16 years after a similar loss in Times Square. His roller-coaster track record shows that in commercial real estate, failure on an epic scale need not be a career killer.
I have to wonder to what extent this ability of losers to gamble again is an artifact of the lax rules of our heads-we-win/tails-taxpayers-lose credit system. Perhaps it is time to reinstitute debtors prison?
I was talking to someone in Santa Monica yesterday afternoon at a retailer there. I had forgotten how delightfully kooky people in L.A. are, at least in that part of town. Now I want to go back to California again.
“I was talking to someone in Santa Monica yesterday afternoon…”
How was the weather?
She said it was a beautiful day. I am not sure she was referring to the weather.
Ever seen “L.A. Story?” I love that movie. That’s what I think of when I think of L.A. Damn, I miss SoCal.
STAY AWAY!! it’s horrible here and a slum!!
From Their House to the White House
Like millions of Americans, the three presidential candidates rode the real-estate wave. But for them there’s been no hard landing, and well-timed home purchases in prime neighborhoods have left two of them — Sens. McCain and Clinton — with millions in real-estate gains.
Ha ha - well-timed purchases only become gains if they’re coupled with well-timed sales.
I’m there is a lobby out there willing to buy their properties at a “fair” price.
Stories like this one make it readily apparent why Senators would eagerly line up behind mortgage rescue plans, as bailouts provide them with an opportunity to line their own pockets at the taxpayers’ expense.
Does anyone have statistical evidence on what share of Congressmen participated in real estate speculation during the bubble years, and hence stand to directly benefit from passage of bailout measures to prop up home prices?
A great new strategy for private equity, buy rent controlled and rent stabilized buildings and evict the tenants.
http://www.nytimes.com/2008/05/09/business/09rent.html?ref=business
This is a great OLD strategy! Where’ve you been??
The Pitfalls of foreclosure: Busted
“FONTANA - A bank employee stumbled upon a foreclosed house used to grow marijuana, leading to the seizure of an estimated $4.5 million in drugs in two houses and an arrest Saturday.
Angel Wayhang Kou, 30, of Rancho Cucamonga was booked into jail on suspicion of cultivating marijuana, maintaining a residence for drugs, theft of utilities and conspiracy.
He posted bail and was released Saturday, according to police records….”
http://www.sbsun.com/sanbernardino/ci_9164347
“FONTANA - A bank employee stumbled upon a foreclosed house used to grow marijuana, leading to the seizure of an estimated $4.5 million in drugs in two houses and an arrest Saturday.”
Is it not surprizing that we hear about these big pot busts inside big Mcmansions in the outer exurbs of LA and the IE? There have been qiute a few recenty in areas such as city of industry diamond bar, hacienda hts, SGab valley, walnut, rowland hts, as well as out in the IE. . Not to mention big busts of pot farms in the local mts. Is greater LA basin becoming a third world corrupt region like Mexico/ tijuana , with local/ imported drug cartels, city street drug runners, large- scale marijuana growing operations?. Or is this just a commonplace occurrance for a large mostly third world ghettoized city like LA , which after all is the
focus and world leader of so many illegal imported or home grown criminal syndicate operations, due in large part to a large tractless undocumented population which can conduct its illegal activities using forged/fake /stolen ID docs and identities and easily evade law authorities by slipping in and out of the border.
I further submit the claim that Ca and local city gov’ts have not a clue or simply do not care , and/or are isolated in their cubicles and simply do not have any street knowledge, or may even in a few cases be in on the action.
LA civic leaders have their heads so far up the arse that they cannot see the problem even if it sat on them. T o illustrate, back in the 80’s-90’s every illegal who came across-an estimated 10 million- went straight to Macarther park in westlake district to get fake green cards which instantly gave fabricated right- to- work doc’s. All this took place less than a mile from dwtm la so this crap was conduced right under the noses of La City hall
Pot Marjoram is worth about 50 Cents an ounce.
Vs.
The Kind being worth about $400 an ounce.
There’s about an 800 to 1 difference in profit potential between the 2 plants.
In Fontucky? That guy is lucky to be alive. Seriously. “Stumbling” upon foreclosed homes in Fontucky is not something I would make a habit. There is a serious criminal element out there.
“In Fontucky? That guy is lucky to be alive. Seriously. “Stumbling” upon foreclosed homes in Fontucky is not something I would make a habit. There is a serious criminal element out there. ”
The entire IE from lake elsinore to the south all way up to barstow at the far north, and from chino to the west all way to banning to the east, is extemely spread out and open, with latge parts of it just like fontucky. Much of the ie is an apocalyptic wasteland of ragged rural upturned junked trashed -out plots- like appalachia coal districts- inhabited by either white bread gap-tooth okie crackers, illegals , gang bangers, or grimy truckers needing unregulated areas to park their rigs .
This is ideal territory for conducting illegal operations such as pot growing, meth, illegal alien clown house holding pens, ect. Plus u have this huge migration of working class immigrants , illegals, and assorted poor lower- class families with their gang- bangin hoodlum teens from out of LA into the ‘cheap’ IE and hi desert areas. With the severe economic slump of the IE and the zillion foreclosures creating vast pockets of abandoned gutted REos, and hugh areas of unincorporated IE sections with virtually no policing and light gov’t intrusion, U have the conditions for a vast underground network of criminal operations.
IE makes excellent cover for the conduct of illegal criminal syndicate operations and the hi desert even better, though the ie is much closer to the crowded La/OC for the marketing and distribution of the products of these criminal sydicates(POT, coke, meth, ecstasy, moonshine , illegals, guns, ect.
During my formative years, I always heard that the IE was the hub the central point of all drug movement.
During the 60s we had the Hells Angels using Idylwild,CA and who knows all the other reasons, but a sleepy,dairy farm area/citrus ranch valley, along with some thoroughbred farms and then all those senior citizens, well you could call it bucolic and the feds didn’t focus on that town/valley.
In 69 first day of school, watched a friend on lsd trip. didn’t know till college that is what was going on.
Now the IE is Meth capital, and some of the nicer neighborhoods are suddenly finding themselves on tv with drug busts and feds/cops all over the place. “They were so quiet, those neighbors”.
Funny, how even Jeffrey dahlmer’s neighbors thought he was nice. Wake Up !!!
Well, why can’t he be released. He obviously has strong ties to the city. (All his stolen houses are there, and all his customers.)
DESERT DEAL
McCain Pushed Land Swap That Benefits Backer
PRESCOTT, Ariz. — Sen. John McCain championed legislation that will let an Arizona rancher trade remote grassland and ponderosa pine forest here for acres of valuable federally owned property that is ready for development, a land swap that now stands to directly benefit one of his top presidential campaign fundraisers]….
In an interview, Betts said there is “absolutely no” connection between his contributions to McCain’s presidential bids and the deal involving rancher Fred Ruskin and the Yavapai Ranch Limited Partnership. While his company’s possible involvement was discussed casually before the bill’s passage, Betts said SunCor did not sign on to the project until afterward. “At no time during the consideration of this legislation was there any involvement by officials of SunCor,” McCain spokesman Brian Rogers said in a written response to questions [read the campaign's full answers]….”
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/08/AR2008050803494.html
Nothin’ like the good ol politico boys. You scratch my back, I’ll scratch yours. I would have liked to make that trade!
Tell it to Tony Rezko.
Or Charles H. Keating, Jr.?
Imagine that. Grandpa takes cash from a land swap benefactor who stands to earn (steal) millions. It seems McCain would have learned a lesson from his involvement in the S&L crimes. Billions of $$$ stolen from taxpayers by a greedy few.
Like Whitewater?
No. Whitewater didn’t involve white collar criminals absconding with billions in taxpayer money like McCain involvement in the S&L fraud.
A pox on both your houses.
Stealing a “little” money is ok then. Just don’t take too much, otherwise the gov’t has to bail out someone.
Has oil… become this fictional character:
“…One of the Kraken’s most powerful weapons is fear.”
http://en.wikipedia.org/wiki/Kraken_%28Pirates_of_the_Caribbean%29
Saudi’s sending eight super tankers our way later this month. Crude supplies are “comfortable”. Gasoline spike is both seasonal and predictable. This oil runup is sounding fishier by the day. If I didn’t know better…
Gasoline consumption lowest in 30 years!
Bring on that Hummer Hummingbird H2o & the Hardley Davidson Bio-Busch fueled Fat Boy!
Speaking of felonies…it should be a felony if a house IS NOT “owner occupied”
“…Verleger argues that figures from the California Franchise Tax Board, while from January, are more accurate than the Energy Department’s EIA data because it is a felony to file false reports to the state tax board; there are, he says, no penalties for making inaccurate reports to EIA.”
http://newsweek.washingtonpost.com/postglobal/energywire/2008/05/us_gasoline_demand_is_a_down_b.html
San Diego graph of trustee deeds has been updated for April. After a couple of months’ head fake down, the level is back up to new-record territory:
http://www.sddt.com/Finance/EconomicIndicators.cfm
Telling thing is to change the start year to 1982, to see just how bad this downturn is relative to the last two.
Great link! For perspective, enter 1982 as the starting year; shows that current foreclosure rate is 3X the highest back to 1982, and still climbing steeply.
Fleet Enema will have the greatest amount of financial effluence in the Golden State, although Sacramento might give it a run for the money?
“Measured: Monthly”
Current monthly foreclosure rate = 1500
Annual foreclosure rate = 12*1500 = 18,000/year
- By this time next year, there may be a doubling of current inventories for foreclosures banks don’t start lowering their outlandish asking prices to levels the market will bear.
Barely surviving by using their credit cards
Finding themselves strapped for cash and unable to use their home as an ATM, Americans are increasingly turning to credit cards to cover gas, groceries and other living expenses.
But many find themselves struggling to pay the burgeoning bills at a time when even the basic needs are growing costlier.
“Other sources of money for a lot of Americans are drying up,” said Dick Reed, regional counseling manager of Consumer Credit Counseling Service of Greater Atlanta, who sees more clients with mounting credit card debts these days. “Consumers just don’t have a place to go to get money. They are digging themselves into a deeper hole not only to pay for normal living expenses, but to make minimum payments on outstanding debt.”
Government and agency statistics illustrate this troubling trend. The Federal Reserve reported Wednesday that Americans’ credit card debt jumped 6.7% in the first quarter of this year to $957.2 billion, This spike comes despite the fact that nearly one in three banks is tightening guidelines for credit cards.
In Atlanta, debtors calling the agency in the first quarter of this year had an average of $29,300 in unsecured debt, primarily on credit cards, up from $25,700 in 2007. They spent $335 on groceries and $242 on gas, on average, in April. A year earlier, those outlays averaged only $291 and $181, respectively.
For many people, racking up credit card debt is not a choice they want to make, experts say. Not too long ago, they could have tapped into the equity in their homes through loans or lines of credit or refinancing. But this debt, which usually carries lower interest rates, is no longer as widely available with the collapse of the housing market.
http://biz.yahoo.com/cnnm/080509/050908_creditcards.html?.v=2
this does not make sence!!!!! if the average person is spending 10k a month on credit cards and only spent $577.00 on food and fuel, what was the other $9423.00 spent on!!!????!!!?? these writers need to quit portraying deadbeats as victims!!! like they can just make everyone feel sorry for these people, because the bank wont hand over more money to them through phantom equity!!! give me a break!!!
It’s mindboggling. I hate the feeling of being in debt so much that I can’t even pull the trigger on a house. 10K on a credit card? I don’t think so.
I know that prices are going up, but is $600 a month for food and gas a show stopper for so many? I could just about live on my AF retirement right now. A little $500 a month part time job would put me in the clover. People have got to be out of their “keepin-up-with-the-Jones” minds out there.
This is exactly why COF is by far my biggest short position. I think they’re in big trouble in the near future due to CC defaults.
epic bull/bear thang going on here. I’m gonna take a shot at skf here $4 off the high with a $1 stop
I’m in @ 101.20 - Feels like a Friday afternoon selloff.
Nice shakeout.
selloff of the market / financials that is
Nice going both of you.
$126 bbl and climbing
Oil has gone parabolic already. Any predictions on when this latest bubble will pop?
I would think there would be some type of intervention here, margin increase, etc. The major powers can’t let the specs continue playing.
How do you get China to unpeg their currency????
When interest rates rise - there’s got be (as noted) 20-30 bucks a barrel speculation built into the price. The banks are trying to recoup losses by pouring the money into commodities instead of lowering mortgage rates and unfreezing the credit markets as the Fed intended (take THAT BB). When BB gets the message and starts raising rates - that’s when the prices will stabilize IMHO. It’s not demand
I mean, just look at the latest import/ export numbers
http://www.marketwatch.com/News/Story/us-trade-deficit-march-narrows/story.aspx?guid=%7BDB29BC65%2DFD94%2D488E%2DA255%2DADA3D5433491%7D
Can’t imagine this is going to help:
http://hurricane.atmos.colostate.edu/forecasts/2008/april2008/apr2008.pdf
For the 2008 Hurricane Season, from the Florida Panhandle to Brownsville, the chance of at least 1 Level of 3,4,5 Hurricane making landfall: 44% (avg for last century is 30%)
There is a scary discussion on a parenting board I frequent discussing the mortgage bail-out. Be warned, the intelligence level is somewhat below this board, but if you want to know what the average person is thinking:
http://boards.babycenter.com/n/pfx/forum.aspx?tsn=1&nav=messages&webtag=bcus5465&tid=173173
You have no idea what reading that stuff did to my various bodily functions.
Sometimes I feel on the verge of an epileptic fit just from all the blinkies and glitter. And yet, I can’t stay away…
Wow… look at this quote.
“We are in an area of CA which seems to be ground zero. Our home was once worth $540K and is now only worth $220K at best, we owe $460K.”
Maybe denial is reserved for those who aren’t getting squeezed because the person quoted is certainly facing the truth.
an oil-addicted ex-superpower
http://www.atimes.com/atimes/Global_Economy/JE10Dj05.html
Hi, I’m America & i’m an addict.
I realize I am powerless…
http://austin.craigslist.org/rfs/674100755.html
This has gotten cheaper since the last time I posted this …
Tuscan-style? Really? The garage-as-architectural-focus originated in Italy?
It’s a Tuscan style forclosure! I wonder how they learned how you foreclose in Tuscany
Are torches and scythes involved? Maybe a good bisteca fiorentino?
Looks like a friggin “smiley face”
Dining
al fresco
Pizza and beer
Danke Gott! (I was between drinks.)
Rapunzel style villa.
It would look very nice in - ohhhh - Tuscany? Maybe upper Umbria too… Break out the grappa and and some opera.
How about Lower Uncton?
Now we’ll see who’re REALLY a MWC fan here.
Peg is HOT!
Synopsis: The Bundys win a trip to England, courtesy of the village Lower Uncton, which can rid itself of a centuries-long curse by ridding the world of male Bundys - and there are just two left. Back in 1653, an ancestor of Al’s - Seamus McBundy, insulted a fat, ugly witch who then imposed a curse on the village and all future male Bundys. The Lower Uncton residents must kill the last male Bundys inside their city limits in order to end the curse, while Upper Uncton people must insure they die outside the city so the curse becomes permanent and Lower Uncton stays as their tourist attraction.
here, here…hehe
watched it religiously after it went into syndication!
I guess I am a pig…lol
Forgot the citation -
http://www.bundyology.com/hpg/624.html
House would have made a nice addition to the sink hole in Daisetta, Texas
http://www.foxnews.com/story/0,2933,354501,00.html
Some McMansions in the neighborhood that I would contribute as infill for the sinkhole if I could.
rumor mill, grinding away:
got a text message this morning that Hillary is walking away from Oregon….add her to the long list coming from Bend and Medford.
Which is the town that’s on the Snake River where everyone does all the windsurfing?
The Dalles?….I still think thats the Columbia.
disclaimer: Im not native.
I think you’re thinking of Hood River, on the Columbia. A neat place.
No one has lived there since it was built 4 years ago. The mid-upper end in Austin seems overbuilt - I know guys who can afford $150k for a house, but not too many folks who can afford a 400k-600k monster (especially with the taxes here).
All I am hoping for is that the slowdown here in Austin doesn’t push rents up (it shouldn’t, but it’s hard to say what the effects will be).
Hot: Renting very nice 900 sq ft. Apt (and 2 attached garages) for less than $1K per month
Busted: Owning a home bigger than we really need.
In turbulent times, it’s good to not be shackled to one location.
Clear Lake area Houston 12-1300 seems to get you a 4 BR house.
Cities paying “prepay penalties” to exit auction-rate securities markets????
http://www.bloomberg.com/apps/news?pid=20601109&sid=a4diP6p3gZ4w&refer=home
“…In many cases they’ve had years of savings that are now being taken back in part or in whole,” said Peter Shapiro, managing director of Swap Financial Group, a South Orange, New Jersey-based financial adviser to state and local governments.”
USA Street Hockey Scoreboard:
Wall Street: 10
Main Street: -6
Missing teeth index: 86%
Question for someone:
How many days did it take for Oil to go from $74 (last time it was there) to $100, vs How many days did it take for oil to go from $100 to $126 (today)?
terminal moves tend to be the fastest
Cheney-Shrub, et.al. … Legacy in visual format:
http://thinkprogress.org/wp-content/uploads/2006/08/energygrid.JPG
It was a record $89 a bbl in March.
i just got around to reading yesterday’s bits bucket, and since transportation is one of my fields, I thought you guys might like a little information about some of the rail stuff that was being discussed.
1) why don’t they just put the containers on trucks? answer: they do, but 40′ ocean containers have a much smaller cube than 53′ trailers. the fuel costs to move a 40′ on a truck are not significantly less than to move a 53′ even though the 53′ weighs more.
2) why don’t UPS & FedEx use rail? they already do for ground shipments, and are probably expanding it all the time. if you track a ground package, you might notice it won’t be scanned for 3 or 4 days if it’s going across the country. that’s usually because it’s in a 53′ trailer on a train.
3) the overpass thing? it’s about stacking two trailers on top of each other.
the biggest issue with rail right now is that there isn’t additional capacity available. a lot of lines have been closed (either because of economic conditions in the 90s or the NIMBY effect), and the cost to build new lines is ridiculous. cities don’t want rail yards since they’re loud and the trucks going in and out are pollution souces. the railroads are working on technology to improve utilization, but there isn’t an awful lot of slack.
I’ve heard some industry experts speak on this - they’re all worried about transportation capacity overall and fuel prices. without infrastructure builds for more rail lines or more regional ports (moving cargo by water is one of the least-cost options), prices are probably going to go up for a while. another option is to increase the weight a truck can legally carry, which will result in greater wear & tear on roads but only marginal fuel increases.
“…will result in greater wear & tear on roads”
US Infrastructure Bubble:
Power plants, sewers & highways: the “next taxpayer” Soup de jour
My WA state DOT engineer frend was incensed wuhen the state legislature allowed 80,000 pound trucks AND cut back on road spending (IIRC), because allowing more weight than the roads were designed for rapidly increases the damage (again, IIRC the conversations, overweight trucks can apply hundreds of times the road wear of the usual sedan.)
I am a fan of trains.
Aside from that, I would much rather be ‘near’ a track than a freeway. The freeway you hear all the time, the trains,infrequently.
Now if we could get those vehicles smogless etc that service the products to the trains.
Yesterday the way the wind was blowing I could hear the planes at the Syr airport taking off and landing all day. It was comforting as I had grown up under an AFB flight path and commercial jets are like a purr compared to a B52 just a few thousand feet above your home.
Regarding train noise, ya build it & people will get used to it. In all the senses, after an initial period where your brain sends frequent signals, the stimulus soon gets sent to the background of our awareness.
My last townhouse was about 30′ from a freight train line, I will NEVER do that again. The whole TH shook when it would go by, 4am on a Sunday morning or whenever.. It would be like a mild earthquake lasting 5 or so minutes as the mile+ long train would go by..
At least when I lived near commuter lines they were never as heavy and they went by pretty quickly (a whoosh rather than a rumble). And now I’m probably more like 300′ away, and I hear the trains, but I don’t feel them, so I can ignore them.
Anyone looking for a place to live, DEFINITELY google map the place first and pencil out anyplace within 200′ of an active train line unless you’re what the English would call a trainspotting anorak..
cities don’t want rail yards since they’re loud and the trucks going in and out are pollution sources. Every American city is serviced by vast numbers of noisy, pollution-spewing, diesel-burning semi trailer trucks regardless of the presence of significant rail traffic or railyards. Furthermore American cities unfortunate enough to be at a nexus of the national truck traffic highway net get a double whammy — noise/congestion and diesel pollution spewed from trucks which are only passing through from one region to another, while contributing nothing to the economy of the cities they pollute on their way. Diesel pollution (particulates) is a problem in places like NE Ohio, a major crossroads of rail & truck traffic, and all the EPA regulation of hapless motorists will do nothing to improve the situation.
Double and triple truck trailer combinations are already legal in most parts of the USA. At least railroads use diesel far more efficiently, and can use alternate sources of energy (electric or steam) if necessary. In the highly unlikely event of a vast expansion of nuclear power in the USA, railroads could electrify & run on nuke power over parts of their systems.
the cost to build new [rail] lines is ridiculous Perhaps at some point the pain of ever-increasing truck freight charges percolating through the economy will provoke a drive to build new rail lines. Some unneeded housing developments in parts of the country can be bulldozed for new rights of way. NIMBYism and other forms of lawfare could be bulldozed out of the way when regional and national economic distress gets severe enough.
[fuel] prices are probably going to go up for a while Probably? Probably?????
Other possibilities:
Cleveland looks to Canadian port for container traffic
Plans for a $300 million port at Melford, Nova Scotia - a port big enough to receive and send mega-ships filled with container cargo - could mean more water-borne commerce for Northeast Ohio in the years to come, officials hope…Containers stuffed with goods of all sort are keeping East Coast ports busy. The containers are a common sight on trucks and railroad cars, but they’re rarely seen on the docks of downtown Cleveland.
short-sea shipping, as it’s known, has been talked about for years but has trouble competing with rail and truck. But rising gas prices and congestion on the East Coast make the seaway link more competitive, experts say…politicians and business leaders alike see that getting containers off the road and onto the water is friendlier to the environment and a way to avoid transportation bottlenecks.
Thanks!
The emerging water crisis in the U.S.
“In the Midwest, the emerging biofuel industry is putting pressure on groundwater resources in some places. In 2006, a Granite Falls, Minn., ethanol plant in its first year of operation depleted the groundwater so much that it had to begin pumping water from the Minnesota River.”
“The southeast has been under a year-long dry spell that has resulted in the city of Atlanta setting severe water use restrictions and three states, Georgia, Florida and Alabama, going to court over a water allocation dispute. Early this year, it was reported that drought in the region could force nuclear reactor shutdowns. Nuclear reactors need billions of gallons of cooling water daily to operate and in many of the local lakes and rivers, water levels are close to the limit set by the Nuclear Regulatory Commission.”
http://www.demingheadlight.com/opinion/ci_9185490
Water rights and associated funds are going to make a mint for investors in the next 2 decades.
Speaking of untenable usage of water, does anyone know how many gallons of water it takes to produce one can/bottle of cocacola?
“For every liter of Coke, just the sugar in it requires between 175 and 250 liters (46 to 66 gallons) of water.
Washington Post,2007,Beijing.
How much water does it take to produce diet Coke?
Energy cannot be created or destroyed. Just changed into different forms. Likewise, with water.
trainwreck is spot on. Water never disappears. It merely changes form. At best, there will be money to be made in distribution. Or conveyance in the case of wastewater.
For the oil mavens:
http://www.factset.com/websitefiles/PDFs/outlook/english/03-05-2008english.pdf
Willing to Trade my Boyfriend for anything tangible (All desert Cities)
——————————————————————————–
Reply to: sale-672545703@craigslist.org
Date: 2008-05-08, 12:12AM PDT
I am currently willing to barter/trade my current boyfriend for a room w/bath rental, a car that runs decent, tickets for dining out, a trip to the beach or anything that is fun to do. In return, I will give you my boyfriend and everything that he comes with. If you’re interested or want to know more about this fabulous trade, contact me immediately!
760-449-xxxx Carol
***************************
was looking for a good deal. Still looking.
It comes with a photo.
Can’t wait to hear what Olygal has to say!!
She’ll take Carol
Speaking of good deals,as others are finding out, the vehicle section is becoming loaded with lots of cars they can’t afford now.
Just emailed with a gal, new toyota Dec, now can’t afford it.
TxChick, I checked out Flip-Happy Crepes yesterday, the AirStream on Jessie between Barton Springs Road and Twomey. They’re open Wed-Sat 10:30 - 2:30.
Awesome food. I enjoyed mine, and heard much mmm-ing and ooh-ing and aah-ing from tables around me. They have several savory crepes (most, but not all veggie) and dessert ones, made on site, one by one. Nice combinations of fresh ingredients like mushrooms, cheeses, vegetables, carmelized onions. Not that much more expensive than my basic Thundercloud sub lunch.
The picnic tables under the trees are pleasant, and everyone seemed to be enjoying themselves, good music. It’s good for people with dogs or babies.
BUT - I didn’t find sitting there that nice. The City of Austin utilities equipment staging ground across the street was busy, and condos (or VMU apartments) are being built next door. Noisy. And it was hard for me to enjoy the big trees I was sitting under - knowing that they are doomed by the development machine grinding up the neighborhood and spitting out a bunch of overpriced giant stucco boxes and stacks of box-ettes.
I will get takeaway in future. A block away, at the very end of Twomey Rd, next to Zilker Park, the South Austin Little League ball park has a couple picnic tables. Down to the trail and turn left it’s a five minute walk to Barton Springs.
I can’t believe Thundercloud is still there. Unreal.
Is Conan’s?
Thundercloud has about 15 locations and I think are in San Antonio and San Marcos now.
The one right across Guadalupe from campus has closed but they opened up one a few blocks north. They have a little drive-up with a small covered dining deck in the parking lot of the Lamar Plaza shopping center.
Conan’s is still around. I’ve never had their pizza and I don’t know where they are, but I see their delivery vehicles around.
What about the GM Steakhouse? Still dishing out the abuse? “What do you want? Hurry up!”
It’s got a different name. And a little table out front. But it looks much the same - pretty good for such an unassuming little place in an area where most local things are getting bulldozed and replaced by homogenous stuff that could be in LA or Houston.
I’ll check it out and let you know. I pass it all the time.
Tried posting response that disappeared. GM Steakhouse has a different name, but appears to be about the same, with the addition of a picnic table in front. I’ll check it out. I go by there all the time.
On Wall St: The elephant in the room
Friday May 9, 1:20 pm ET
By Michael Mackenzie in New York
Rather than let market prices fall to a natural clearing level, one part of the solution from Washington involves increasing the dominant role in the housing market played by Fannie and Freddie Mac, its fellow GSE.
Sanctioning the kind of leveraged strategy that helped create the housing problem in the first place is now considered part of the solution.
“Right now, we are in the belly of this cycle,” Daniel Mudd, Fannie’s chief executive, said in a conference call. He indicated falling house prices would keep hurting the bottom line.
Sensing the worst may be over, investors ceased selling the stock and it ultimately rose 10 per cent from its low on Tuesday.
Investors also focused on nicer net revenue and net interest numbers as Fannie boosted market share.
A bigger housing footprint and higher fees is a silver lining that will lose its lustre if home prices do not stop falling.
Further impairment of Fannie’s leveraged mortgage holdings will require further capital. It could also leave the taxpayer exposed to the growing housing bill and any ensuing market stress.
At least shareholders have woken up, reversing Tuesday’s gain and leaving the stock down 30 per cent for the year. This is one elephant few in the market really want to ride.
http://biz.yahoo.com/ft/080509/fto050920081327143194.html?.v=1
“On Wall St: The elephant in the room”
“Sanctioning the kind of leveraged strategy that helped create the housing problem in the first place is now considered part of the solution.”
The goal of all the market-manipulating bailout proposals currently in play are to use hair-of-the-dog solutions to keep the elephants in the room hidden under the living room rug.
Soybeans Surge, Corn Gains After Crop Report
http://biz.yahoo.com/cnbc/080509/24542731.html?.v=1
The report released Friday projects about 12 billion bushels of corn will be harvested this year. About one-third of that amount will be directed toward ethanol production.
Wet weather has slowed corn plantings, causing the greatest delay since 1995. The USDA reports that only 27 percent of the nation’s corn crop had been planted through May 4.
More expensive corn for the gas tank and less for the dinner table makes perfect sense. I’m so sorry poor person, your kids will have to survive on less, since the corn is better used in my Grand Large Super Turbo Extra-Powerful Monster-Crusher 8000lb 900 hp 5mpg SUV, which I need to impress the coworkers and feel superior to others. I think it’s time for a good scream and a tall glass of Jim Beam.
I don’t understand this ethanol thing. According to NW KS farmer friend of family, at least some of the ethanol plants are out of operation, because the price of corn is too high. I think the one near him paid itself off in the first couple years of operation, when corn prices were lower.
Will the government mandates force the ethanol plants to operate at a loss? Or will the farmers have to sell some of their crop at lower than market prices? Or will the price of ethanol go way up?
golf course development in Baghdad - Towers of Babylon?
http://www.guardian.co.uk/world/2008/may/06/iraq
So it begins
Apple
“By eliminating 174 jobs at its Elk Grove campus, Apple Inc. created more economic problems for a suburb that’s been hit particularly hard by the real estate downturn. Apple said Thursday it’s moving some of its sales and support functions from Elk Grove to the company’s site in Austin, Texas. A spokeswoman declined to give an explanation for the move. The layoffs include 99 representatives for Apple’s Internet sales operation and 41 employees who conduct online chats with customers, according to layoff notices sent to state and city officials. Employees will be given the chance to relocate or apply for other work in Elk Grove….”
http://www.sacbee.com/103/story/907052.html
So long Elk Grove….
choppin down the orchard, aint good for the low hanging fruit.
hope you have a great weekend hozzie!
not even a thanks so much for coming out….
hozzie, we are they.
And hello Austin…
Maybe those internet sales people and online chat support people will come buy those $400,000 - 600,000 monsters Masstexodus was talking about. If they want their McMansion on a really miniscule lot, there are $740,000 or $835,000 McMansions near my house. Or $300,000+ condos.
Time Magazine did a piece last week on how things are holding up there, how the community has come together, etc.
Postcard: Elk Grove
Enter Susan McDonald. The 38-year-old, who moved to Franklin Reserve three years ago, was walking with her kids along one of the development’s new foot trails and saw gang graffiti on a fence. “I thought to myself, This is it–I am done,” says McDonald. She voiced her concerns on the town website. “I got 85 responses to do something,” she says. She helped found the Franklin Reserve Neighborhood Association (FRNA), which today has 405 members. FRNA created a “good neighbor” letter to let absentee landlords know when their renters were causing problems, and organized a Sunday-afternoon lawn cleanup for 27 foreclosed homes. Its attentiveness also helped the police shut down 33 houses used to grow and distribute marijuana.
Kind of sucks, since these seem like decent enough people.
Ah, well. My post will probably get eaten anyways.
It is sad. They are acting as a community, which is what we need, and what often seems lacking in new developments.
“A spokeswoman declined to give an explanation for the move.”
Because it’s cheaper in Austin?
FWIW, many of the eliminated jobs were staffed by temps. The Elk Grove facility is primarily a call center— Evil Rob’s division, the corporate group, is only about thirty people.
Maybe they can double up. One employee can buy a McMansion or a condo and rent to a friend.
One more postcard from Austin today.
This afternoon I went by Woods Fun Center on I-35 @ Braker Ln. It’s a big Motorcycle, ATV, Wave Runner, etc dealership. I had previously been there in February looking for a Specific model/color combo Honda motorcycle (1300 VTX-R, Orange), which due to the color would be a used bike (2003-2006).
When I went by in February, they had a lot of used motorcycles on the floor, including a couple 1300 VTX-R’s that were *almost* what I was shopping for.
Today… not a single used motorcycle of any *BRAND* in the place.
I asked the salesman, and he said people have been buying bikes like crazy because of gas prices. They had plenty of new bikes, but the deals you could negotiate just a few months ago are long gone…
Wow…
I wonder how many of the “buyers” know how to ride?
organ donor bubble?
This has probably been posted here, but I hadn’t seen it anywhere until today…
Foreclosure Moves Open Gray Area in Preemption
By Cheyenne Hopkins
April 21, 2008
WASHINGTON — A fight is brewing over whether and how much national banks and thrifts must comply with state laws designed to delay or prevent foreclosures.
Unlike consumer protection laws, state foreclosure and real estate property laws generally are not preempted. But if such a law affects the substance of a loan — or interferes with the bank’s ability to collect a debt — the issue becomes murkier.
continued
…yay, another post to get eaten…