Bits Bucket And Craigslist Finds For May 20, 2008.
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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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What China gives, China takes away…
http://articles.moneycentral.msn.com/Investing/JubaksJournal/ChinasNewestExportInflation.aspx?page=1
You know times are tough when people start stealing manhole covers…
http://www.newsweek.com/id/137822
These thefts of base metal all have one thing in common, they are crimes that can be done when nobody is looking.
Expect the thieves to get much more daring, as the economy deteriorates…
Invest in lockable gas caps!
That’s a good deterrent kinda like “The Club” since thieves will move on to easier targets.
However, they showed on the news where thieves are now drilling into gas tanks when there is a lockable cap…
Looks like we’re rapidly approaching third world status - where everything not welded down is community property and available to the first taker.
They used to hang “rustlers” around here with cow skins hanging in their barn. I’d support doing the same for scrap merchants with manhole covers.
Manhole rustlers…
At last!!…a new sodomy euphemism!
Hey, ex-NN, this is for you:
http://www.desertusa.com/jtree/josh_month.html
Lost in Utah,
Thanks for posting that info on The Joshua tree. I was at one time a Joshua tree Nat Park nut and have roamed that park quite a bit mostly in the 90’s. I once did a hike deep into the wonderland of rocks area, got caught in a freak winter hailstorm at 4000 ft elevation, and took shelter in a dense mixed grove on a craggy outcrop with a few joshua trees as the main canopy
Joshua trees ‘desert forests’ which are intermingled with teddy cactus, ocotilloo, desert willows, sages, pinion pines, all set against those JT granitic boulder/rocky outcroppings, are pretty spectacular. I once climbed up a rocky steep cliff and got some really great panoramic views of the JT forest spread out across the desert floor.
Pretty spectacular park though bone dry. There is one tiny permanent spring in entire park i believe.
I LOVE desert willows, I planted a bunch in my one-acre native yard in Moab. Beautiful spring blooms, look like tiny orchids in pinks and purples.
When I was a kid we had a cinderblock “cabin” on the high desert and I remember the greasewood bushes. They’d make this eerie squeaking sound in the wind. At least I think what it was. Later I heard they were actually creosote - ?
Same thing. It actually puts out a poison around its roots so other plants can’t grow nearby.
There’s a lot of things they “used to do” that kept the criminal element in check. Some of those things were pretty summary and brutal, but they sent a clear signal that there were certain things society just wasn’t going to put up with.
and besides, Sammy, there’s no longer money in the budget for those security items.
How does a city like Philly lose 600 manhole covers and continue to function?
The city has a deal going with the front-end alignment guys.
If you drive fast enough you fly right over them.
“How does a city like Philly lose 600 manhole covers and continue to function?”
The city just buys them back from the scrap dealer.
They aren’t manhole cover thieves.
These guys work for the DHS and are preparing local fallout shelters from the housing market BLOWBACK.
The old Duck and Cover under your desk routine won’t save the RATS on Wall St and in your local RE office from the effects of this BLAST
Isn’t Larry Yun president of the Department of Home-Land Security?
I was going to ask if anyone has noticed an increase in pick up trucks full of scrap metal driving by. I drove to a burb on the opposite side of Syracuse and saw 4 different vehicles all loaded up. It might be that I’m sensitized to it now and noticing their existance but maybe that’s what all the contractors are doing for income.
A lot of people dump stuff in their back yards around here and I wonder if that’s what I’m seeing turned in as lots of it looked pretty rusty and weathered.
Also signs are popping up offering to haul away items left from yardsales. Trolling for metal recycling items and craigslist for income, I wonder.
Credit crunch ain’t over yet - Oppenheimer.
http://www.bloomberg.com/apps/news?pid=20601087&sid=auq3s_xEc9BI&refer=home
But the party is.
That Meredith is SUCH a doom and gloomer.
“Mary had a little lamb (medium rare please with rosemary potatoes) and a jumbo mortgage”.
http://www.bloomberg.com/apps/news?pid=20601039&sid=aXf.l14aZp4U&refer=home
“We are able to adopt this new, national down-payment requirement, even in markets where home prices are declining, because our new automated underwriting risk assessment model DU Version 7.0 will limit risk layering and assess each loan more precisely,” the company said in a statement.”
Damn! That is some serious load of BS.
“automated underwriting risk assessment model DU Version 7.0″…dear sweet lord, truth is truly stranger than fiction.
My “automated government asshattery anomaly detection unit model F.U. Version 1.0″ says that these people need an uninvited joshua tree in the a$$(UJIA).
Please God, make them quit using my money to save the irresponsible people who created this mess.
signed,
The responsible taxpayers.
With a few more articles like this one, I may be squarely in the gold bug camp.
PAUL B. FARRELL
Megabubble waiting for new president in 2009
‘Numbers racket‘ exposes potential disaster for economy, markets
By Paul B. Farrell, MarketWatch
Last update: 9:04 p.m. EDT May 19, 2008
Jeez, pass the Prozac!
The problem with these things is that at the end of the day it’s a confidence game. Lose confidence in any asset class, and it’s doomed.
Typical Wall Street attitude, pal.
What is? Confidence in asset classes?
No, it’s a human thing.
“Lose confidence in any asset class, and it’s doomed.”
Yeah, the price of tulips have never been the same.
“…at the end of the day it’s a confidence game…”
There is no room for fundamental value in Wall Street’s world view. All asset sales are a scam designed to part greater fools from their money by selling them overvalued assets.
That’s what I mean by a typical Wall Street attitude. (I have personally known scam artists who share this value system.)
It’s just a function of “negative real interest rates”.
Pour the money into some asset class. Watch it take off. Watch the fools pour in.
Skim the cream; FED (or central banks) will backstop you; lather, rinse, repeat.
SHRUG.
And you wonder why I don’t respect economists for not seeing the obvious about “maintaining a steep yield curve”.
yep, yield curve is so steep, the very shortest appears dis-jointed. keep lapping up the treasuries boys, rallies on.
next stop S&P 500, 1356 sound about right?
True for all asset classes (to different degrees).
More true for asset classes that don’t generate cash (precious metals is the first that comes to mind).
Those that do generate cash may have their values hit, but there is generally a reasonable bottom as long as the cash-flow can generally stay in place.
This is old news for the most part. John Williams of http://www.shadowstats.com has been reporting this for years and I’ve personally posted similar comments about this deception on this blog from his site. Here is an excerpt from his home page.
“Formally known as Walter J. Williams, my friends call me John. For more than 25 years, I have been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting.
One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.”
The unraveling is just a matter of months now that this is becoming mainstream info. And yeah, you ought to be a “gold bug” under these circumstances, IMO.
I suspect the good Professor was talking about Poe, not all that glitters.
It is difficult to have significant and sustained inflation without significant and sustained income growth. The inflation in his chart of the last 7-8 years nicely coincides with the continuing credit expansion and household debt increases.
I suspect that other than things we need (food and energy), inflation is going to have a difficult time continuing in a credit contraction and globalization-depressed wages.
The evidence of what I am saying will be weakness in corporate earnings in the coming quarters (due to margin erosion), as companies need to cut, cut, cut prices to make up for the lack of cash and confidence in the hands and heads of consumers.
Keep the economy on life support until November, pull the plug, take the money y’all made from your little war, and retire to Paraguay.
So long, murka. And thanks! Greatest Country in the World! (heh heh heh….)
I just finished Phillips’ American Dynasty. It was an interesting, reasonably researched, and well written piece. Plus he seemed extremely fair in that he down-played, or criticized, the more sensational third-party charges leveled against his least favorite political aristocrats.
I’ll read his new book on the phoney economic data and statistics when it gets to the local library.
Here’s something to ponder: What happens to the share price of a company once the market discovers that the company’s financial statements are unreliable? Now, think of the U.S. dollar as a proxy for a share in the USA, and the economic data and statistics as national financial statements.
http://www.philly.com/philly/hp/news_update/20080519_Spanish_firm_offers__12_8_billion_to_lease_Pa__Turnpike.html
A Spanish toll-road operator won the bidding war to operate the Pennsylvania Turnpike, offering $12.8 billion for a 75-year lease, Gov. Rendell said today.
Turnpike rustlers.
Parade
Where America Lives
Great Reasons To Rent
By Mike Hammer
Published: May 4, 2008
I have been watching for articles like this, which are very slowly popping up in random sources. When the major MSM starts printing similar articles and most Americans start to really see the disadvantange of owning, then I will know that it’s finally time to buy a home again.
Many of us long-time posters here are waiting for the “real estate is the worst possible investment” buy signal.
“Many of us long-time posters here are waiting for the “real estate is the worst possible investment” buy signal.”
Oh yeah. When I bought in ‘96, everyone thought I was crazy. Also when I sold in ‘04 -);
Am very happy in my little rental now, waiting patiently for the next house.
Exactly… You’ll know you bought at the trough when everyone advises you “Real estate only goes down.” The sheeple stampede in either direction.
I’m starting to hear people laughing when they hear stories of residential land acquisitions (before understanding any of the economics). We’re getting close to the bottom on land values IMHO.
Nowhere close on homes.
I’ve tried arguing this point many times, but people have always brushed me off:
Homeowners’ tax deductions are overstated. Conventional wisdom says that buying a home saves you money because the mortgage interest is tax-deductible. But a study by the National Multi Housing Council points out that half of homeowners don’t get a break, because even with mortgage interest and property taxes, their total deductions do not exceed the standard federal tax deduction ($10,900 for couples and $5450 for singles).
I learned this lesson from an economics professor who explained it to me fifteen years ago. The other used home seller deception is focusing on the supposed tax deduction while ignoring the fact that interest is still a drain on household finances. If you get a fifteen percent tax deduction on interest, then you still pay eighty-five percent of the interest to the bank. That is a lot of money with the size loans people have recently taken on. For example, with a $500,000 San Diego starter home mortgage at 6 pct, the after-tax interest payment would be
0.85*.06*500,000 = $25,500 / year.
This is only the interest component of PITI. Other home ownership expenses may include, but not be limited, to insurance, property taxes, maintenance and repairs, HOA dues, Mello-Roos fees, and home equity losses (e.g., San Diego median price has dropped from $517K to $395K since the 2005 peak).
Anyone making enough money to pay for a house is likely to be slammed with AMT anyway, so possible deductions are likely not relevant.
The “tax break” is and always has been a con for the REIC and banks to make money, not for the mortgage holder to save anything. But try telling this to the borrowers. They all swear by their tax savings.
They’re only worth it if you’re in a high tax bracket and buy a lot of house on leverage. (Hey maybe if we just stopped referring to them as mortgages and called them for what they really are…)
So the tax deduction primarly allows people that already can afford a nice home to buy way more than they need. And/or buy a lot of other consumer sh** with the tax writeoff.
I say do away with it in a revenue-neutral tax re-structure, where taxes on simple bank/CD/money fund interest is either eliminated or reduced to compensate. Sigh. It will never happen in my lifetime.
Wrong high income or I should say upper middle income earners loose the dedection for mortgage interest and property tax via the alternative minimum tax.
My use of “high” was relative, not absolute. I purposely keep my tax bracket low enough that there’s little or no tax incentive to take on mortgage debt. When I made more money, that wasn’t the case. I’ve never bumped up against the AMT although I realize it’s becoming easier to do now.
If there’s no real benefit to the deduction, low or high income, all the more reason to eliminate it and all the phony perceptions that it creates. Still will never happen, no matter how much I wish.
Don’t forget AMT.
This phony tax break is an overwhelming waste for most people not living on the coasts with high housing costs and state income tax. I’m all for giving up my $750/yr savings on my $200k Texas house. If the middle majority weren’t incapable of doing the math it would be a slam dunk.
I’ve seen Realtor® after Realtor® use the following to show how much “savings” people will get from buying a house:
“If you buy this $200,000 house, you’ll pay approximately $12,000 in interest and $4,000 in property tax during the first year. Those are costs are both deductible. So, at a 28% tax bracket, you will save $4,480 a year in taxes!”
The problem with this argument is they complete ignore the standard deduction in their calculations. The real savings is MUCH less especially for someone like me that doesn’t have much else he can itemize.
My saving in the above scenario is actually: $16,000 in deductible housing expenses MINUS the standard deduction ($12,700 since I’m married with two kids) times 28%. This means my savings on a purchase is actually measly $924.
Yeah, and that’s what people (who have followed that advice) get for taking tax advice from an “expert” with a high school education. lol
They’re not over stated for those FB’s with $ 3,500/mo payments. That mortgage deduction is a big reason why we’re in this economic/housing situation. $ 15,000 fed. refund checks are not unusual for those earning over $125,000/yr.. It may not be smart personal fiancing, but many depend on it. Thats why this bail out should include a forfeiture on mortgage interest deductions, until the gov’t ‘loan’ is paid back.
I’ve figured out the difference for me, by figuring my taxes with or without the mortgage deduction on tubo tax — I get back about 4,500 more a year than I would with the standard deduction - which comes to about two months total payment (incl. taxes and insurance) - or, a little more than the total property tax I pay yearly.
I doesn’t make my house a better deal than it did when I used to rent a one bedroom cheaply — but, it does help make it pretty comparable to market rents for where I live (Alexandria, Va.). I am a 2002 purchaser - I’d probably be farther from rent comparability if I had bought 2003-2007 - and I expect some lucky folks will be able to get rent comparable mortgage payments again around here in upcoming years (although not quite yet).
I agree, however, that most people I’ve discussed this with over the years seem to overstate the benefit, as have personal finance and real-estate cheerleading articles.
And I’m wondering about the effect on your social security. Since I rent, I’m not sure how the deduction is taken, but if the deduction is taken before your social security taxes are deducted, then isn’t your net income decreased?
For purposes of determining your 20 year average of income for figuring out much s.s you get when you retire, is it then possible that you could end up getting less back in social security distributions because of the home tax deduction?
Not at all. There is absolutely no inter-relation between the two at all.
Social security is deducted from your gross pay up to a maximum cap level around $100k). The home interest and property tax deductions merely serve to reduce the “taxable income” used to calculate your tax on the federal income tax tables.
I am back from Cheeseland (45 minutes from the Peoples Republic of Madison). Good lord is the denial thick out there. It is funny because dandelions and “For Sale” signs seemed to be the most prevalent things in the yards. I found out that every lake is filled with gold. All of those $600,000 second homes seemed a little silly to me. I see a train wreck-a-comin’.
The gold is only at the bottom of the lakes. They are actually filled with tequila. The actual houses are helium-filled and anchored with granite.
You should look at Lake Minnetonka… Good LORD!
That one has always been ridiculous. Prince living there made it even more trendy. Prices on Mille Lacs Lake was going wild 15 years ago. I couldn’t figure that out. The lake is huge and most people use those homes 10 times a year, at most. There is just too much money and too many dreams floating around. I know a lot of stories of people buying lakefront property that they had no business buying. All of it will unwind and unwind badly.
Half a million for a 900 foot fishing cabin with 40 ft of waterfront WAAAAAYYYY out there was the bargain price when we left last year. Huge foreclosure increases in our old neighborhood around Medicine Lake in Plymouth this year.
10 times a year? Out here in So. Central UT, we see some of our neighbors once or twice a year. 10 times a year is considered to be fairly frequent usage. Either way, it’s pretty amazing.
Yep, I know exactly what you mean. I bid on one of those places last fall (it was on Moose Lake, town or Merton), they were asking 625 and I bid 490 and they were insulted. I see it’s still listed and now they’re asking 590 so I should go back in the next few weeks and offer 450 and insult them some more. lol
Cheez,
Try this … Here’s the offer. Even though it appears somewhat low I encourage to accept this month as each month passes it will be ##### dollars lower. Fill in the ##### as appropriate.
PAGE ONE
Senate Strikes Housing Rescue Deal
Plan Would Insure Up to
$300 Billion in Home Loans;
Encouraging Note From Bush
By DAMIAN PALETTA and JAMES R. HAGERTY
May 20, 2008; Page A1
Looks like the bankers finally came up with some campaidn donations for the Republicans.
C’mon Darrell. Those guys are just chock full of character, integrity and honor. /sarcasm off
“I think this is a victory for the taxpayers as far as housing is concerned,” Sen. Shelby said. Sen. Dodd said he hoped the legislation would set a “floor” under the housing market, restoring confidence. “This is what the market has been waiting for,” he said.
A $300 billion dollar victory???? The market has been waiting for??? These congress clowns make me sick. They again punish the financially responsible and give the idiots, morons, crooks and thieves a spiked punch bowl full of money so they can drunkenly continue to rob the financially responsible.
Bush and his band of clueless repubs voted against the bailout before they voted to support the bailout. John Kerry lives in every one of these pandering politicians.
Oh, yes - we really need a “floor” under housing prices to keep them unaffordable. As a responsible taxpayer who has been screwed out of homeownership, I am really looking forward to paying for some shmucks to keep their unaffordable houses.
“Another politically sensitive point is whether borrowers deserve the help they would receive under the Senate plan. The program would cover borrowers who owe more than their homes are worth. For these borrowers to qualify for a new government-insured loan, their lenders would have to cut the size of the outstanding principal to a level that gives the borrower equity in the property. The concept has the implicit backing of Federal Reserve Chairman Ben Bernanke, who said such a move could help stabilize the housing market.”
Idiots. What do they think this will do to interest rates? Gee, I’ll lend you $300K for a mortgage, and the gub’mint guarantees I’ll only get $200K back. I’m sure some of the more mathematically inclined can figure out what this would do to a 30 yr fixed mortgage interest rate.
For these borrowers to qualify for a new government-insured loan, their lenders would have to cut the size of the outstanding principal to a level that gives the borrower equity in the property.
Ha haha ha guffaw. Whoever thought that congressmen could show such a good sense of humor while writing legislation.
The government is going to insure that people have equity who invest in a asset . So ,let me get this right . The lenders gave loans to borrowers who had no skin in the game for most part and now the government is going to bail-out the lenders and borrowers so they can have some equity . I need to call up Congress/Senate and ask them if they will insure that I have equity in my car and equity in my stock positions .Also , a borrower won’t qualify for such a loan unless they were either crooked or reckless .Also ,unless the governments bails out these people they will trash the house and live there for free for a year and than walk because someone told them that real estate always goes up, so they should lie on their loan application .
The powers in control are going off the deep end . it appears that a deal has been struck that the government will take part of the loss and the lenders will take part of the loss and the borrowers who didn’t deserve the loan to begin with get another chance at living off their homes.
The chance that there isn’t a second or a third loan for the people in question is pretty low. (Or 7th loan if they bought three houses to live in as their primary residence.)
I’d feel a lot better about it if I thought they were kidding. I think they are serious. But I have a few questions:
1. Who is going to give permission to write down these principals? Haven’t these securities all been sliced and diced and sold off and nobody even knows who owns the paper? Is CountryWide going to call up the Bank of Scotland, or UBS, or the carcass of Bear Stearns, to ask if they would take a writedown on Joe Blow’s past-due mortgage on a luxury condo in downtown Toledo?
2. Who’s going to qualify for this POS program? $300B is a LOT of mortgages. Are there truly $300B worth of honest first-time buyer FB’s, who live in the home, who didn’t lie about their income, who didn’t take cash back, didn’t re-fi, etc.?
3. And how much is it going to cost the taxpayer? And yes, it WILL cost the taxpayer, not now, but later. It will come in the form of bailing out the banks who wrote down the loan, inflation from rising interest rates, or bailing out Fannie and Freddie who bought the worthless paper.
I think your points are good ones. And I think that reason #1 is exactly the reason that the writedowns have a low probability of happening.
“I think this is a victory for the taxpayers as far as housing is concerned,” Sen. Shelby said. Sen. Dodd said he hoped the legislation would set a “floor” under the housing market, restoring confidence. “This is what the market has been waiting for,” he said.
A $300 billion dollar victory???? The market has been waiting for??? These congress clowns make me sick. They again punish the financially responsible and give the idiots, morons, crooks and thieves a spiked punch bowl full of money so they can drunkenly continue to rob the financially responsible.
Seems like the game is going as planned by The Creature from Jekyll Island if you ask me.
Lets start the day with some memories:
http://www.youtube.com/watch?v=oouQbcXdyH0
I guess even the ultra rich have their limits on toilets…
http://www.bloomberg.com/apps/news?pid=20601109&sid=aOvhlV9R57u0&refer=home
The Republicans have a solution for cleaning them:
“and a proposal to require recipients of food stamps or housing aid to meet work requirements.”
“Have you ever cleaned granite toilet bowls before? What is the proper cloth material to use when cleaning the family Hummer? How often to you change the Hepa Filter when vacuuming the baby’s room?
“I’m sorry, no social aid for you, you don’t qualify based on our new work requirements…have a nice day…good luck out there…don’t worry… Be Happy!”
http://www.nytimes.com/2008/05/20/washington/20cong.html?_r=1&oref=slogin
PAGE ONE
REAR VIEW
Car Makers’ Boom Years Now Look Like a Bubble
By NEAL E. BOUDETTE and NORIHIKO SHIROUZU
May 20, 2008; Page A1
DETROIT — This decade has already seen burst bubbles in tech stocks, homes and credit. Now, it seems, another segment has fallen victim to irrational exuberance: the U.S. auto market.
BUT, BUT…. I’ll always have a new car every two years…. Ugh, the stupidity of the last 20 years!
30 years from now kids in school will be shown “Over the Hedge” as a history lesson on the 1981-2007 consumption generation.
Giant houses, pakced with “stuff”, huge kitchens used for nothing but brewing coffee and storing prepackaged snack goods, two garbage cans full of garbagefor a house with one resident, huge autos “Wow, how many people does that hold?” “Usually just one.”, huge plasma tv with premium sound and 350 channels off the satelite….
I’ve seen quite a drop in used car prices lately. Especially among the luxury brands. You can get a nice 2005 Beemer 3 series (last body style) off lease with low miles and a factory warranty still in effect for about 22K.
I’ll attest to that. Not only luxury cars though, you want crazy you should see what’s happening to SUV’s on our lot (I’m in car sales in Phoenix at the biggest Honda store’s used department).
2 out of 3 trade-in’s lately have been massive SUV’s, all taken in disgustingly far back of book. Whats worse, they aren’t selling even at stupid prices which means they are going to be getting even less $$$ on trade -soon-. We’re having a hard time even getting “buy bids” (a buy bid is where you call a wholesale buyer or another dealership for a bid on a car you are trying to take in on trade). We called a big Nissan store yesterday because we need a bid on a 2007 Armada with 6000 miles (not the kind of car we’re going to put on our lot), they tell us they don’t want it -at any price-.
What is selling? SMALL CHEAP CARS! Anything 25-30mpg and under 10k, anything 10-14k with a honda logo (civics, cheaper accords), cheap toyota’s and nissans. It’s as if everyone in the city woke up one morning and said “Wow honey, driving around this 8 passenger behemoth 100 miles round trip all by myself from Maricopa to Phoenix is really really really stupid”. It’s funny to watch how fast the paradigm shifts, someone flips a switch and it goes from the best time to buy EVER to the worst possible idea. As gas edges ever closer to 4-5$/gallon I bet this gets even worse, we’ll be practically GIVING those SUV’s away by the end of this.
Thanks, you made my day. I was beginning to think this would never happen.
Well…. It’s not exactly good news :(.
We’re doing ok (numbers are still way down year over year but we’re surviving better then most at a Honda lot), but not many are as upbeat.
For example, all but 1 Suzuki dealer in phoenix has closed (Fair Trade Suzuki, Tempe Suzuki, Scottsdale Suzuki, Earnhart suzuki). The Mitsubishi dealer just 200 yards from us has pulled out of selling Mitsubishi (they gave the new cars back to the manufacturer, are turning it into a big used-car lot for their hyundai store next door). The Dodge store across the street killed it’s internet/fleet departments (lack of sales) and put everyone out on the lot waiting on a customer (who isn’t coming). Admittedly phoenix has -way- too many dealerships, I mean why does this city need 9 Honda dealers right?
We’re going through the great cleansing as we speak and the fallout is vast. Our numbers are down and the cuts are starting to come from the top, we’ve lost a GSM (a 250,000$/year+ position) and the internet director (another 150,000$/year position) in just the last month or so to cut costs. They haven’t been replaced and the word is they wont be anytime soon. All this isn’t even starting to discuss the fact management/finance has had 3 paycuts in the last year, or that we eliminated ASM’s (3 100k/year people who would help close deals for the “greenpea” new clueless salespeople).
I’ve even heard mechanics complaining, one of our best technicians was saying just the other day his pay is off 30% this year. People are skipping recommended service and hoping nothing major breaks. This mechanic is now having trouble affording that nice house he bought on the outskirts of Queen Creek (that’s plummeted in value).
All-in-all we’re talking about a -lot- of good and great paying jobs dissapearing or earning considerably less per month. It’s just a domino effect from housing (less people buying cars) but every single domino that falls (and job lost) equals less money being spent down the line. Almost everyone stands somewhere on that line of domino’s, we just happen to stand one or two away from the failing housing market at the front of the line.
I’ll put it a different way. In our CAR dealership with well over 100 employee’s, employees with families and outside lives, I haven’t seen a SINGLE one of them buy a car from us lately. We see every time someone does (it’s called a “house deal” and is counted sepperately/nobody gets paid on it). We haven’t had a “house deal” in months. All these people involved in every aspect of car ownership/maintenance/sales/title work and nobody is buying.
Sad, huh?
Hi Ncinerate, I have a question how are your mini vans doing? Honda oddessy or any Toyota sienna trade ins?
Thanks and good luck
Key phrase “We do not want at any price”. I wonder if the gov’t is trying to bail out these people as well, if not they can at least sleep in their SUVs.
Ncinerate,
thanks for the great, informative posts.
Since I moved to a new rental townhome, I noticed how much trash the people around us throw away. While my girlfriend and I usually fill less than half a garbage can, all our neighbors have overflowing cans and mountains of recycling to boot. I have no idea what they are doing to have so much trash, but maybe a recession will slow down the wastefulness of our culture.
One can only hope!
As far as mountains of recycling go –
1) ALL the junk mail
2) cat food and dog food cans, plus the big plastic container the dry cat food comes in and the cardboard boxes you buy pet food in bulk in
3) dozens of cans of Ensure (my 91-yr-old mother who won’t put her teeth in most days practically lives on the stuff; her doctor says that’s way better than nothing!)
4) empty diet soda and fruit juice bottles
I have a big bag of recycle every week just from two people (and 4 cats and one big dog).
On the other hand, the garbage can is rarely even half-full.
Pro Bear: When I attended a conference in ‘05 a different analyst than the one in the article gave a presentation saying the US Market would reach 20 million in sales by 2010 — I said it was nonsense, 10% of the adult population can’t buy a new car every year, and I was laughed at cause I was new to the game. But that was then and this is now:
Auto Industry Predictions: We’re 3 for 4!
“…the US Market would reach 20 million in sales by 2010…”
Trees and auto sales will grow to the sky!
Interesting piece about a boat repo man…
http://www.nytimes.com/2008/05/20/business/20repo.html
As Mr. Henderson surveyed the area the other day, something nagged at his memory.
Finally he remembered: “I’ve taken this boat before.” Owners of repossessed boats have a few weeks to redeem them, and this fellow had availed himself of the opportunity. Now, a few years later, he was in trouble again. Mr. Henderson shrugged. “I took it before, I’ll take it again. After I take it a few more times, he’ll be eligible for a Christmas card. One guy, I took his boat four times.”
“I used to take the weak ones,” he said. “Now I’m taking the whole herd.”
Rawhide
Boat rustlers.
How much does a 30-40 footer cost these days (used)? We have a nice marina here that’s loaded with large craft. Many don’t seem to be used, lot’s of transient boats headed to the Gulf in the jumbo size range. Some of those folks get stuck here and can’t pay for repairs or they get a job for a while and live aboard. Our rates are a lot better than down in Mobile or P’cola.
Toy Box cost $175,000. With the trade-in and a down payment, Mr. Dahmen ended up with a $125,000 loan. “You pay the interest up front,” he observed, “and the principal never goes down.” After seven years he still owed $111,000, about twice what the boat is worth. Meanwhile, he lost his condominium when his mortgage readjusted and those payments went up. His 401(k) is down to $9,000.
“I oversaturated myself with long-term debt,” he said. “It was a risk, a calculated risk. I obviously lost.”
“oversaturated”??
I think I’ve done the same thing to myself with Scotch.
a calculated risk???
I’ll go way out on a limb and guess that there wasn’t a whole lot a calculating going on.
Man would I like to pick up a cents on the dollar Cabo.
Oversaturation with fine Scotch (occasionally) has less long-term hazards to your health, both financial and otherwise.
I highly recommend it.
He is broke. Very very broke. In the morning I shall be sober!
Me to…..Its tempting to go looking….
“Interesting piece about a boat repo man…”
I once repossessed a huge tri-hulled sailing vessel in Marin, CA. The guy bought it, and he left the country for Mexican waters; never made a single payment! Years later he was up visiting the SF bay, and someone else, who he must have screwed in the past, snitched him off to the bank; they promptly called me at the recovery company. I didn’t know how to sail, so I hired some guy and his wife at the marina to pilot it across the bay after I secured it. The Alameda county animal folks secured his friendly dog. The lender was tickled-pink!
Good story, thanks for sharing.
I also liked the original story in the WSJ. I live in the #1 boating state and everyone I know is complaining about the cost of gas and how they can’t afford to boat anymore.
http://www.usatoday.com/news/education/2008-05-18-zeroes-main_N.htm?csp=34
In most math problems, zero would never be confused with 50, but a handful of schools nationwide have set off an emotional academic debate by giving minimum scores of 50 for students who fail.
Their argument: Other letter grades — A, B, C and D — are broken down in increments of 10 from 60 to 100, but there is a 59-point spread between D and F, a gap that can often make it mathematically impossible for some failing students to ever catch up.
“It’s a classic mathematical dilemma: that the students have a six times greater chance of getting an F,” says Douglas Reeves, founder of The Leadership and Learning Center, a Colorado-based educational think tank who has written on the topic. “The statistical tweak of saying the F is now 50 instead of zero is a tiny part of how we can have better grading practices to encourage student performance.”
We usually give felons 5 to 10 years, unless you are a scummy fraudy mortgage broker who gets 0. This practice might make it mathematically impossible for MBs to ever catch up in the karma game. Since they have a 6 times greater chance of getting a zero, we can bump that up to a minimum of 5 to encourage better performance.
Apparently they left out the obvious: institute an ABCDEFGHIJ system.
Or, do what my no-nonsense public school did: do away with letters altogether. It was plain ol’ numbers, 1- 100. Smart kids fought over 92 vs. 97. Passing was 65. And as for a gap that makes it impossible for students to catch up — if kids earn a couple 35’s early on, they’ll try to catch up a lot sooner.
This ain’t rocket surgery, ya know. Methinks the educators need some education.
The Decabet!
“It’s a classic mathematical dilemma: that the students have a six times greater chance of getting an F,”
Well that’s only true if you’re actually answering every question randomly — in which case, you should be failing miserably. So yes, if you answer ‘randomly’, then you have a far higher probability of getting an F than you do of getting an A. …Right??? Isn’t that exactly how it’s *supposed* to work???
It also demonstrates that they’ve confused probability with statistics.
What it does is punish the HECK out of missing assignments.
Me? I could ace every test without doing a stick of homework. Most teachers would weight the tests a bit higher than homework, so I could pull a C or D pretty easily. Some however, would weight them equally. For those I’d actually have to break down and do some homework. Some, like AP physics and chemestry were interesting enough that I would actually do homework just for the fun of it.
In AP calc, if asked to do a homework problem on the board, I’d have to take my book to the board to write the problem. Then I’d just do the problem faster than the people that were copying from their homework.
Highest SAT in my graduating class… And 73rd out of 138 on GPA.
“Highest SAT in my graduating class… And 73rd out of 138 on GPA.”
That was typical of the underachievers I knew. The majority of them went to college and soon dropped out.
I know several like ones like that who are now experts in Halo III. That genius doesn’t seem to translate to the workforce for some reason.
Other than in programming, perhaps. In college, I had almost the worst GPA you could have and still graduate. No one has asked to see my transcript for many years, if ever.
While genius may not translate well to the workforce, most workplaces don’t exactly reward intelligence, either.
Other than in programming, perhaps. In college, I had almost the worst GPA you could have and still graduate. No one has asked to see my transcript for many years, if ever.
I got a CS degree with a 2.9 gpa in 2001. I was a pretty bad student with stuff I wasn’t interested in. Anyway, no one has asked to see my gpa either…until last week.
I sent in a resume for a position doing robotics programming for a company that makes cutting tools. Stuff that will cut parts from metal stock, things like that. Their customers might get a file from an engineer that contains a large building design, then send that file to one of these machines to read all the info about the parts requried. That machine will determine what stock needs to be ordered and how each stock piece will be cut/drilled/punched to make the required parts. That’s one example.
Anyway, it was some pretty interesting (and complex) stuff. He asked about my gpa. Said he has never hired anyone with “less than an A average”. I don’t expect him to call back.
“While genius may not translate well to the workforce, most workplaces don’t exactly reward intelligence, either.”
Ain’t that the truth.
I looked up my college grades after 24 years recently. (It was on the application. Not filling in a blank is a constitutional impossibility, I guess.
) Not great, not bad either. Too bad that it doesn’t show the 4.0 for the course that became my career.
I graduated 62nd out of a class size somewhere in the 650s. That was with an awful lot of alcohol consumption and several jobs to save for college. Sorry Darrell but I always considered myself sort of average. I try to make up for it with curiosity, lots of reading, and prayers for my pre-child producing memory to return.
I do enjoy your intelligent posts though!
Always worth the read!
I’ve worked with plenty of Ph.d geniuses. Book learning doesn’t always translate into practical knowledge. Also, social skills can’t be learned in the library and if you never learned how to get along with a group of people, you are pretty much worthless in a work setting.
One Ph.d coworker quite, because as he told me “my Ph.d does not get the respect it deserves areound here”. Another one Ph.d told me one time that there was no way she could *ever* date someone without at least a Master’s degree. They were all pretty much social misfits.
You can usually tell the social misfits if they put “Ph.D” after their name when they sign (unless it’s some sort of academic setting or a resume).
I ditched 5 out of 6 days in High school. Would goto the library and read. The truant officers never looked in the library. The best place to get an education is the library. I would show up to school on test days get an A and leave. Hated high school. Tested at 15 out went to college at 16 was in the was in the army at 17. That was the real education sitting in the desert having someone shooting at you.
“…That was the real education sitting in the desert having someone shooting at you”
That’s why Shrub took “cheerleading” at Yale… Better tactical position: “You’re doing a heck of job!” at 30,000 feet in Air Force one flying over Baghdad…Not so good position: Standing on a Hummer without armor: “Charge!”
It’s a classic mathematical dilemma: that the students have a six times greater chance of getting an F
That assumes the act of answering each question is a random one, presumably the test should be greatly biased in favor of material taught during the time period and which the students have had an opportunity to learn.
I think the real mathematical dilemma is how this idiot understands so little about distribution yet has anything to do with our education system.
If you want to encourage student performance give the friggin failure a shovel and ten hours of ditch digging for each F. That ought to motivate the idiot to start paying attention and if nothing else, will give him a glimpse of his future should he choose to remain a dolt.
I’ve about had it with this coddling mentality. Life is hard and about to become harder, get used to it. (rant off)
They don’t let you dig ditches unless you speak Spanish. Better start paying attention in at least one class.
that’s funny auger.
when my son was a tween-teen, and he did something naughty, i would ask my hubby to purchase a tree at the local nursury. and said son would dig the hole.
he loves the earth and trees - and he’s a nice young man.
leigh
Old timer engineer said: some days this job may suck, but at least it’s indoor work.
We young Seattleites didn’t really understand his point fully (he had worked in the south during the Apollo years). Now that I’ve lived in Texas, I quote it often.
Ahh yes. Another dose of cynicism to keep the pressure on. Well done KC.
Passing students who are not actually passing is why my father took early retirement (from being a HS math teacher for ~36 years).
Here’s another look at passing students:
Many schools unlikely to meet education goals
By the 2013-14 school year, students must pass tests in math, reading.
Pink slips for principals and teachers. School-funded tutoring for poor kids. Schools are increasingly looking at those kind of consequences for failing to raise math and reading scores.
The federal No Child Left Behind law says that by the 2013-14 school year all students must pass state tests in these subjects.
http://www.msnbc.msn.com/id/24713807/
We can easily remedy the situation by coming up with “G” and “H” grades.
“The federal No Child Left Behind law says that by the 2013-14 school year all students must pass state tests in these subjects.”
Really? Even if they don’t know anything, can’t add or read, they still must pass? I guess they’ll have to game the tests, so that illiterates can pass. If they can identify colors they get a high school degree.
Seems fair…Bush, who’s so proud of not reading, and his Federal “edumacation” department.
Home Depot’s Net Falls 66% As Homeowners Cut Projects
By Donna Kardos
Word Count: 469 | Companies Featured in This Article: Home Depot, Lowe’s
Housing slowdown hurts Home Depot
By Daniel Pimlott in New York
Published: May 20 2008 12:18 | Last updated: May 20 2008 13:11
Loan Depot doesn’t look long for the world.
I’m not an accounting expert but my friends,who are, say that they manipulate numbers (audit approved of course) all the time. They can reserve revenues from previous qtrs to future qtrs. I think they did this in HD’s case. I’m looking at HD to come up with crappy numbers in the next two qtrs.
“It’s a numbers racket…” Farrel.
http://www.marketwatch.com/news/story/governments-numbers-racket-about-blow/story.aspx?guid=%7BF91A0843%2D69B4%2D4C0C%2D92CE%2DB835D9907945%7D
Pensacola, FL
http://pensacola.craigslist.org/rfs/686550148.html
Realtor forgot to mention that this house had massive flood damage from hurricane Ivan in 2004. These realtors that post on craigslist really irk me.
I agree. They can eat sh** and bark at the moon. They clog everything up.
I wouldn’t mind having a small fish camp on Perdido Bay, that’s some pretty territory down there. Maybe I’ll be able to pick something up in a couple of years.
Bulletin: U.S. producer prices outside of food and fuel rise the most in 17 years…
PPI Inflation link
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B955B2FE1%2D2048%2D4A6F%2D87EA%2D803CFEF145C5%7D&siteid=mktw
Oh good, inflation is contained. For a minute there I was worried.
Inflation is contained, nobody can afford to buy much with gas prices and food prices spiraling out of control, therefore prices on actual indexed items should stay the same because they can’t raise prices on things people can’t afford as it is. Remember, inflation is generally caused by increasing salaries, and increasing costs of goods. The best way to stop inflation is to slam the brakes on lending, and increase taxes. Well, right now nobody really wants to lend, and gasoline is acting as our tax.
” “The good, say the mystics of spirit, is God, a being whose only definition is that he is beyond man’s power to conceive—a definition that invalidates man’s consciousness and nullifies his concepts of existence. The good, say the mystics of muscle, is Society—a thing which they define as an organism that possesses no physical form, a super-being embodied in no one in particular and everyone in general except yourself. Man’s mind, say the mystics of spirit, must be subordinated to the will of God. Man’s mind, say the mystics of muscle, must be subordinated to the will of Society. Man’s standard of value say the mystics of spirit, is the pleasure 0f God, whose standards are beyond man’s power of comprehension and must be accepted on faith. Man’s standard of value, say the mystics of muscle, is the pleasure of Society, whose standards are beyond man’s right of judgment and must be obeyed as a primary absolute. The purpose of man’s life, say both, is to become an abject zombie who serves a purpose he does not know, for reasons he is not to question. His reward, say the mystics of spirit, will be given to him beyond the grave. His reward, say the mystics of muscle, will be given on earth—to his great-grandchildren.”
John Galt
Aladinsane,
I wanted to thank you. I had read Rand and Orwell in HS but not these particular books. After piquing my curiousity with your posts I read “Animal Farm” and am currently reading “Atlas Shrugged”.
I’m sorry it took me so long to get to but reading them in the middle of this credit debacle is sweet, sweet reading. Thanks!
Orwell is excellent reading.
Rand not so much. Best left to high schoolers.
CarrieAnn:
Atlas Shrugged is a masterpiece and aren’t you intrigued at how closely it resembles current events, despite it being written over 50 years ago?
I first read Animal Farm when I was around 10, and it along with Orwell’s other works (Down and out in Paris and London might be my favorite) shaped my way of thinking, as well.
May 20 (Bloomberg) — The dollar fell the most in more than a month against euro after the International Monetary Fund said the U.S. housing slump still poses “serious risks” to financial markets.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a3Ose_w_TvEQ&refer=us
“U.S. housing slump still poses “serious risks” to financial markets.”
So, if that is indeed the case, we should have a very nice stock market rally today–DOW 30,000!
Clayton County’s rate of seriously delinquent mortgages has reached epidemic proportions, with nearly one in 10 mortgage accounts at least 60 days past due, according to data from one of the nation’s largest credit reporting companies.
http://www.ajc.com/business/content/business/stories/2008/05/18/delinquency_0519.html
Pity they couldn’t bring themselves to use “decimate” in the correct context. I suspect the banks are waiting for 90% defaults before they are decimated.
Dude, where’s my house?
OK, that may not seem like a very profound post, but really, isn’t it the crux of everything? Don’t we all just want a house? So, where the H-E-Double-Hockeysticks is my house? How long do I have to wait before I can afford one? I have cash, too…
Apparently one may have to wait for years in order for a housing market correction to play out. Viewing the situation in California as of 1991, one could have immediately caught a falling knife, or waited five years for the market to bottom out. Which would you have done? (I cannot answer this for myself, as I was not here…)
Patience grasshopper, all good things come to those that wait.
I got a good recipe for Mormon Cricket Stew.
Tell you what, Hoz, I’ll cook it if you’ll do the honor of taking the first bite.
Free Cooper.
http://www.minyanville.com/articles/AAPL-S-P-apple-rimm-drys/index/a/17227
‘Don’t we all just want a house?’
Not really. I have a roof over my head and I pay less than half of what it would cost to own the thing.
Ben, you mean you don’t have a McMansion with an ARM??? I would’ve never guessed! /sarcasm
Maybe the real question is, why is it that some of us equate security with owning? Maybe it’s because there’s literally nothing to rent where I’m at. May have to head for greener pastures…the uncertainty of squatting is getting old fast and it seems to be messing with my sense of responsibility.
“…why is it that some of us equate security with owning?”
Effective programming by the REIC?
Maybe, Prof, but I think it also goes back to our parents, who got it from the Depression era when their parents saw really hard times, especially those who didn’t have farms and land.
Just guessing on that, but I remember feeling that way as a kid, wanting to buy land, and there was no RE influence where I grew up, virtually none (NW Colo. ranch). I think I got it from parents - my dad equated land with making a living and my mom grew up in a huge beautiful house in Kansas that’s now a B&B -she blew it, married a Colorado cowboy and never lived like that again.
“…especially those who didn’t have farms and land.”
Plenty of Oklahoma farmers who bought in the 1920s learned the risks of purchasing farms and land they could not afford on credit.
The security of owning refers to the security of owning outright.
With property taxes, you never really own your land outright.
Even with property taxes, you really only own your land until some rich guy wants it (maybe to put up a football stadium).
Trapped inside 4 walls.
How secure does that make you?
I prefer my mobility. And I’ll take my money with me.
Having a paid off roof over your head, when you are old is the real reason to own a home. I prefer to think long term.
There is more than one right answer.
Considering what one has to go through to pay for it and the fact that you have to dump the place when you get old doesn’t seem be a very good “right” answer.
The danger is you could likely afford one already. Just not as affordable as later. I was looking at a house I could likely buy for much less than the rent. (By using one of those old fashioned downpayment thingies.) Eek, run away!
Hold the cash grasshopper. I have the feeling it gets even more intoxicating, later.
Do not seek the treasure.
For sure, Lad. Where your treasure is, your heart will be also.
Actualy, mine’s not with a house, it’s way out in the Big Empty, left it in an arroyo way over on the San Rafael Swell somewhere. It’s probably washed on down to the Dirty Devil River by now, beat up, tangled in rocks and weeds and shredded tree limbs.
Cause that’s where my treasure is.
The treasure that we seek, has no monetary value and doesn’t belong to anybody.
It’s in my kid’s squinty, shifty, beady brown eyes…
So right. Pinyon jays, starry nights, Irish Creme by the campfire…
Hey, did you see my latest video on the San Rafael? Click on my handle and go to Gallery when you get on my webpage - I think it illustrates what we’re referring to…where you treasure is, your heart is also…
I did see the San Rafael video and it’s a keeper. Good job~
Thanks, that’s REAL treasure, sharing the treasure, as long as people take care of it.
Lost, SEDONA!
Nope, ain’t into harmonica convergences and vortexes and stuff like that. And we have our own UFOs out here. Only thing Sedona has that we don’t have is money.
I enjoyed so many posts in this particular string. Really makes you think about one’s own priorities.
Iriquois Indians used to live on what for a while was property we owned.
The family that built their “dream home” on that site never moved in intact as that hubby had a little something on the side and ended up with the other woman. Despite never having enough cash for maintenance, the owner clung on for 16 years, slowly watching her dream home deteriorate around her. The damage to the doors and doorjams tell a story of unhappy childhoods. So did the burned out doll head we found above the garage.
As her children started to age out of the child support, this woman was forced to sell. She had to sell below market as there was much work to be done. This was the house that we bought.
Like others, we thought this would be our forever home. The neighborhood had children, the school system declared good. It reminded me of my idyllic childhood neighborhood. Little did I realize I had just stepped into class warfare hell and having a fixer and even worse (gasp) a husband that did not have a legal, medical degree or own his own company, we had been relegated to the invisible class.
We knew we couldn’t sell it the way it was. It had been on the market several times before unsuccessfully. So we had to plod along w/upgrades as we could afford them until it finally came up to what was considered acceptable when living in that town. As it slowly grew to the beauty it once had been, I came to regard it as “my beautiful prison”. I loved to look at it but it represented nothing but emotional hell. It turned this former social butterfly into a hermit.
Well we finally put it on the market in the fall. We put it on for a price almost 30% lower than many of the comps. We needed the escape to be complete. It sold immediately. Sadly the buyer was screaming at my husband at the closing because when they told us to vent the bathroom to the outside instead of into the atttic, we didn’t fix the broken vent fan (which sells for $35) Myself, I figured if they were pulling out year old carpeting they’d definitely be gutting that bathroom that we had never gotten to update and that would mean putting in their own vent fan. After initially insisting that the fan that hadn’t worked since we moved in, had been broken since her inspection, she spent the rest of the closing acting completely miserable and calling my husband an idiot for not understanding that of course the venting meant fix the fan.
I tell this story because it was obvious she will be no happier in that home than any other of the previous inhabitants. So much for a “dream house!”
Perhaps the Iriquois cursed it when they were forced off. I did always think that was the oddest most miserable town I’d ever lived in.
Interesting post. One of my great great greats was a doctor to the Iroquois and he married a native, her English name was Caledonia.
Out here, the Utes supposedly cursed various places in Colorado when they were forced out. The curse says that once you live there, you will have to leave and can never return but will always want to.
One of the supposedly cursed places is Redstone, Colorado. I never lived there, but I lived 15 miles away in Carbondale and rode my bike up there almost every evening in the summers. I would LOVE to move back there, but it’s way out of my price range (thanks, Aspen).
And you’re right, emotional hell isn’t worth any price. Freedom isn’t just about being able to do what you want. It’s a state of mind.
We’ve spent a couple percent of “value” since deciding to sell. Little obvious things like a new fence, a few boards of siding repair and new paint. I’m going to miss this place (and its 4.875% loan) - its really looking nice now. Silly to spend money on it on the way out of course.
If the people in charge have their way, the answer is “never” - affordable housing allows people a degree of freedom vs. living under crushing debt loads, and that just cannot be allowed.
I will turn 40 later this year. I grew up as a military brat and moved every 2-3 years until I was 15 years old. My parents were idiots with money (father was a gambling addict), and I have lived in crappy rentals virtually my entire life…so when I hear people say “there’s nothing wrong with renting”, I think very few of them have lived in rentals almost continuously for 39 years in a row.
The hardest part for me is that I had wanted to buy my first house when I finished grad school in 2002 and saved and scrimped for many years while I was in school, and then saved and scrimped again to pay off debts for several years afterward. I made a lot of personal sacrifices to get where I am today.
I planned to have finally paid off all of my debts in late 2008 (woo hoo!), and last fall I landed a job earning ~$200K/yr, so naturally I thought I’d finally be able to buy my first home and set down some roots. Even though I qualify for a big mortgage, I feel like I now I have to wait out a national financial crisis not of my own making, and which seemingly has no clear end point. I am still living like a college student in a cheap rental as I save up a down payment and wait for prices to drop to something reasonable. Meanwhile I have watched others my age make and lose fortunes in the stock market and real estate boom.
Do I feel frustrated and a little bitter? Kinda…seems like my ‘American Dream’ somehow morphed into a prolonged midlife crisis. At least it helps to come here and commiserate with other people who played by the rules and still got screwed. I at least feel that if I have achieved any financial success in my life so far, it is because I have finally learned to recognize and conquer debt.
great point…I often wonder how many of the “I’d rather rent than own” comments are written by people who could close their eyes and, thanks to their memories, see almost every detail in their childhood homes.
I know I could. (But then, I probably could remember the details in most of the places I ever rented!)
HARRISON TOWNSHIP, Mich. — So many people have so many things they can no longer afford. This is an excellent time to be a repo man.
http://www.nytimes.com/2008/05/20/business/20repo.html?_r=2&ref=business&oref=slogin&oref=slogin
“His S.U.V. was soon full.”
Whoda thunk??
WASHINGTON — Senate negotiators on Monday said they had reached a deal on legislation aimed at helping hundreds of thousands of homeowners in danger of foreclosure by expanding the availability of government-insured mortgages.
http://www.nytimes.com/2008/05/20/business/20housing.html?ref=business
Whether the Senate, the Fed and other interested government entities can successfully backstop home price declines and respike the housing market punchbowl is an empirical question which has been much debated here. I am glad the natural experiment is now underway to test this hypothesis, and eagerly await the results.
Unfortunately, I suspect they will succeed, after a fashion - a respike for a few years, followed by another long decline after the taxpayers have to bail out the GSE’s. The goal remains the same: crush anyone who dares to save and not “play the game” and they’ll work hard towards that goal.
You need to spend just a modest afternoon crunching some numbers.
They have no hope of succeeding in the right time frame.
If you end up crying after that afternoon, which you will, I recommend some fine Scotch.
WASHINGTON — U.S. food prices will rise 5% this year, propelled by the sharply higher cost of bread, cookies and other bakery products, the U.S. Department of Agriculture said Monday. That represents the largest increase since 1990.
http://www.latimes.com/business/la-fi-food20-2008may20,0,1939435.story
It’s interesting because the price of wheat has fallen 23% according to the Gubmint…
Yeah, but the earthquake in China wiped out an estimated 750,000 acres of planted farm land. oops
The price of gasoline also fell in the month of April. It was “seasonally” adjusted down by the governments economists. Unfortunately, my Exxon station did not get the governments report on inflation and refused to seasonally adjust downward.
I heard that parts of the Northeast which used to grow wheat, rye, oats, or even barley no longer grow them. It’s all corn, all the time. You all know why.
Ethanol - food rustlers.
Ethanol is the biggest scam ever!
The part that sucks is that the American Taxpayer paid for it’s creation, and now we are paying for the result, oh, and by the way we are still paying for keeping up the scam.
Ethanol producers and farmers are screwing us coming, going, and just standing still.
I see an Old West theme this morning Lost…
Yeah, and I ned to rustle up myself a house.
Try this.
http://cgi.ebay.com/ebaymotors/_RVs-Campers__Chinook-Concourse-2100-RV-Ford-7-3L-Turbo-Diesel-4×4_W0QQitemZ130220906658QQadnZRVsQ20Q26Q20CampersQQadiZ2799QQcmdZViewItem?hash=item130220906658&
Hey, I already have a wonderful Lance camper, I mean, it’s NICE. Right now, it’s sitting in the yard full of gold bricks and bank notes and stuff like that, just wasting away. I can’t use it for reasons that have been discussed elsewhere.
Well, best of luck! I’m rooting for ya.
You can’t plant corn year after year. You have to rotate. Sounds like corn will be really really pricey in two years or so.
You can, but you have to apply tons of nitrogen fertilizer. Beans add nitrogen to the soil, so the farmers used to alternate between soy beans and corn. Not any more.
Fertilizer comes from petroleum.
No petroleum, no fertilizer, no fertilizer, no corn, no corn, no ethanol.
Ethanol is not energy independence!
“Fertilizer comes from petroleum.”
Look it up.
Gleaned from foreclosure.com florida
Check out the pre-foreclosure and tax lien numbers … OUCH
Updated: 05/19/08 2:47 PM
Pre-foreclosures: 88,801
Sheriff Sales: 3,139
Foreclosures: 21,412
Bankruptcies: 20,007
FSBOs: 15,681
Tax Liens: 156,985
Caleeforneea has FL beat by a mile…
Updated: 05/19/08 11:55 PM
Preforeclosures: 173,314
Sheriff Sales: 8,499
Foreclosures: 76,539
Bankruptcies: 27,392
FSBOs: 1,916
Tax Liens: 255,689
The most interesting number is the FSBO’s
Florida has 9x as many as California, why’s that?
ummmm, maybe Floridians are more resourceful???? Nah, that won’t work, how about this, maybe Floridians hate RE agents. No…maybe it’s because ALL Floridians are RE agents…
Good one!!! LMAO, Lost.
Locals are still in such denial that they won’t list with RE agents cause they don’t like what the agents are telling them about pricing. I’ve seen several homes in my FL neighborhood change from realtors to FSBO recently. And they were all relisted at the same or HIGHER prices. Unbelievable.
My impression is that there is lots of latent (vacant) CA inventory not yet on the market. For example, the San Diego MLS could be swamped with foreclosure inventory before long if last month’s rate of 5300 foreclosures continues unabated, and this new mass of vacant homes ended up on the MLS. Evidently the lenders are not in a hurry to schedule their own funerals, though (or perhaps, as TxChick suggested, they are too busy flinging pooh at Zoo visitors).
Nationwide:
Last update: 05/19/08 11:55 PM
Preforeclosures: 456,016
Sheriff Sales: 38,549
Foreclosures: 281,685
Bankruptcies: 332,428
FSBOs: 69,564
Tax Liens: 606,746
Total Listings: 1,784,988
California shares:
Preforeclosures 173,314/456,016*100 = 38 pct
Foreclosures 76,539/281,685*100 = 27 pct
Population 38,000,000/300,000,000*100 = 12.7 pct
It off
Tax Liens number doesn’t sound correct. Fla + Ca total 400K of total 600K?
Why is it surprising that two of the bubbliest states with a combined population north of 50m would collectively have the lion’s share of tax liens?
We all know that if you aren’t in FL, CA, NV or AZ its different and the real estate market is still booming.
Repo Man… Business is booming !
http://www.iht.com/articles/2008/05/19/business/20repo.php
Arizona R/E “Expert” Jay Butler shown to be a hack and a shill.
http://www.azcentral.com/realestate/articles/0520biz-homesales0520.html
“The report said home resales were up 15 percent compared with the same month in 2007, the first year-over-year increase since July 2005.
That conflicts with a report released Monday by the Arizona Regional Multiple Listing Service indicating a 12 percent decrease in home sales in the same period.”
“More than one-third of the sales reported by Butler for April, or 2,025 of the 5,585 total, were trustee sales.”
“On Monday, ARMLS reported 4,874 home sales in April. Butler’s revised figure would be 3,565 sales, he said.”
MLS includes new homes sold with a Realtor.
I wonder how many Realtors collected big comissions on those houses that people were camping out for.
The Realtors are really doing everythign they can to spin this market. Truth is irrelivant, it is all about “creating confidence”. I.E. False information and misinformation, spun however possible. Lie, cheat, steal…. We need more victims.
“it is all about “creating confidence”.
I guess the Federal Reserve is outsourcied that job since they’ve bled the confidence well and cash reserves dry. The Fed is screwed and they know it.
Whatcha hiding Mister Banker?
They are hiding onset hyperinflation from those that think cash is king.
Or hiding the fact that they’re deflating from those who think gold is a great store of value.
Only one of these preserves their “political” power, and we all know what that is.
Agreed. But go too far in the wrong direction and the wheels come off the getaway car. They’ve gone too far and they know it. To what degree they know it will be determined by how rapidly they reverse course.
You are attributing them powers I do not believe they possess.
We shall see.
Touche…. Lest we forget. Their orders come down from JPMC.
Do the human bankers (who own the assets) not the corporate banks (which are bankrupt) prefer deflation or hyperinflation?
Gee, the mind sometimes wanders.
Oh wait, where’s my Scotch?
I am hoping to take a job a few hundred miles away. The large company hiring manager seemed kind of down during an interview when he tossed off something like “I suppose you would like relocation help?” In the end, we agreed I’d rather have a higher offer than “relocation help”.
I didn’t care to enquire due to my specific circumstances, but I had to wonder if the large companies still have any of those “backstop the sale” or etc. programs. Seems like those would be well gone by now. But maybe there is a lag and they are still getting involved in that sort of thing. Maybe they have to if they want someone from CA or FL. I wondered if he was mildly fishing, concerned I’d get caught out by the credit report screen. I’d be sad too if I had to deal with this housing market fallout just to find otherwise qualified employees.
A few years ago the Mrs. and I were looking at relocating from one area (bubbly) to a non-bubbly area. We had our interviews at the same day/time, and we agreed the wife would go for a relocation package (we don’t own, just moving truck and cost to break lease) and I’d go for cash.
When I was asked if we needed help relocating and told the employer no, and that I didn’t need help selling a house, I was not only offered the job on the spot but offerred a huge cash bonus.
We sadly turned it down, oh well. Live and learn.
I had to wonder if the large companies still have any of those “backstop the sale” or etc. programs.
There is a local home where the husband moved from Syr to Cape Cod about a year ago. The wife stayed here while the house languished on the market. A few months ago his new company capitulated and bought their home. It still langishes despite its reduced price.
Last fall, another couple we know enjoyed a corporate move when he received a promotion to NYC. He works for a major bank. Funny, the couple that bought it was from Long Island. Maybe they should have just switched.
Pensacola, FL
Recently, I met a couple this weekend from Ft. Lauderdale who were visiting their son here in Pensacola. When they said they were from Ft. Lauderdale, I jokingly said to the husband, “Hey buddy, ya wanna buy a condo?” He stared at me for a moment, then flatly said, “I’ve already got two I’m trying to get rid of.” Definitely an awkward moment.
Fed’s Kohn signals intention to hold rates steady
By Greg Robb
Last update: 9:00 a.m. EDT May 20, 2008
Barn door left open
Horses have all run away
Hurry, shut the door!
May 20, 2008 9:22 A.M.ET
BULLETIN
CRUDE OIL HITS ANOTHER RECORD HIGH AT $128.40
Inflation rising at the core
Although producer prices up just 0.2% in April, prices at the core rise the most in 17 years.
Wasn’t it only five minutes or so ago that oil hit $128? Blast off!!!
BULLETIN
BLUE CHIPS BEAR BRUNT AS U.S. STOCKS SLIDE; CRUDE NOTCHES LATEST RECORD HIGH ATOP $129
Stocks open lower as oil at $129 fuels inflation concerns
By Nick Godt
Last update: 9:40 a.m. EDT May 20, 2008
Time for Wall Street to shake down the GFs who bought stocks over the past couple of weeks…
Stocks open lower as oil at $129 fuels inflation concerns
By Nick Godt
Last update: 9:40 a.m. EDT May 20, 2008
…
“Oil surged to a new record of $129.31 a barrel, with bullish calls by investments banks, weakness in the dollar and supply concerns fueling the gains.”
$200 bbl here we come. Bet’s anyone?
Prof, your fiatscos are flatlining again. I will spare you the chart. Got COMEX 100 ozers?
Just remember, gold and oil prices always go up.
The race to $200/bl oil is underway…
BULLETIN
BLUE CHIPS BEAR BRUNT AS U.S. STOCKS SLIDE; CRUDE NOTCHES LATEST RECORD HIGH ATOP $129
MARKET SNAPSHOT
Stocks pare gains as oil ends above $127 a barrel
Oil prices weigh on market, techs; Microsoft, Yahoo in talks again
By Nick Godt, MarketWatch
Last update: 4:35 p.m. EDT May 19, 2008
Comment to this article:
“Kohn reminds me of the captain of the Titanic who reportedly mustered the ship’s orchestra to play soothing tunes to calm those left onboard while the ship sunk to the bottom.
Think Kohn and other monetary policy officials past and present…
- Homeonthecote”
I agree and all… still… find I wish he’d find another analogy.
Captain Smith went down with the ship. The idea that any of this crisis’ architects, let along the CEOs will do so while steadfastly doing their duty is… quaint.
Them pools are so dark that it is hard to tell what’s in them…
Banks link access to dark liquidity pools
By Anuj Gangahar in New York
Published: May 20 2008 03:00 | Last updated: May 20 2008 03:00
Goldman Sachs, Morgan Stanley and UBS are to link their private stock trading operations to improve liquidity and better compete with the increasing number of alternative exchanges.
The move, to be announced on Tuesday, will give clients of each bank access to the other’s so-called dark liquidity pools - the private interbank or intrabank platforms widely used to trade stocks away from exchanges.
that is so bogus. It’s not right.
It seems there is a shadow stock market for Daddy Warbucks’ investments, and a retail market for the little people to gamble in at the house’s advantage.
It’s no big deal in Intel or Microsoft but sucks in the more thinly traded stocks that I like.
Up $5 on SKF so far. I love that sucker.
I’m just having fun in the foreign currencies.
Now that is something I can’t get the hang of so I’m smart enough to stay away.
105.40. That’s good enough. Thank you Jeebus.
As a technical trader, you should adore the currencies!
Just use Japanese Candlestick Charting Techniques, 2nd Edition
By: Nison, Steve
$65 -100 from some stores (also available as pdf on a few internet sites -free download.)
hahah. you’re kidding right? I teach that stuff to trader wannabes.
I have resisted the siren call of Forex and it has not been difficult. I like commodities better. Those I understand.
In at 101 and out at 105.70.
Not quite $5 for me.
I’m jealous, tx.
I understand commodities , stocks, bonds and forex - I understand the math behind options, but I trade options like crap. So I avoid options unless it is a lock. I like Forex because of the depth of liquidity. The stock market is currently illiquid.
I like illiquid. I traded every day through the bear market of March ‘01 - March ‘03. At times it was unbelieveably illiquid. I thnk that’s what I like about SKF. It’s very jumpy and thin other than at round number levels.
Today was the day I’ve been waiting for, holding skf from 96 two weeks ago. I made up some of my losses on srs, qid, and bought back into gld at 88.
Any other ETFs that will do well over the next 6-9 months? I’m willing to hold, I have many feelings of doom and gloom but alot of respect for the market manipulators too. I used to park my money in Tbills but sheesh those aren’t fetching much lately.
Some ETFs I’ve been watching are ssg, sdk, dgp, twm, but they sort of meh along.
What about railroads, are these a good medium-term investment?
I have a doofus friend at work who picks stocks that zoom ahead. MVL, BBI, V, he caught them all and made huge moneys. He says he looks at the stores and the commercials. Am I missing some strange investment style here?
Most doofus’ who make money and tell you about it also lose money on other trades that they don’t tell you about it.
Yeah I thought that too- but I just felt so dumb here he was saying buy this, buy that, and of course because he is a doofus I didn’t. Watched those suckers take off and him smiling, ugh. I asked him (he is a new trader) “have you lost money yet?” He said no, “you just have to read about the company” blah blah blah.
BTW he got his investment cash by HELOCing his house.
“…dark liquidity pools”
Now who dives head first into a dark liquidity pools?
Is that just a “fancy pants” banker word for: scum?
I hope none of the pools has the dreaded West Denial Virus, in them.
Per watcher’s post. For those who want to hear. If you watch the Food Network, you know who Mark Bittman is
http://www.ted.com/talks/view/id/263
(another one of those Jewish guys I can’t get enough of, lol)
http://www.nutritiondata.com
Dow futures down 90 points. The PPT must be warming up. Some good buys out there though.
Financials and the USD getting hammered. Oil marching toward 130, and I still think it could have a blow-off move to 150 this summer. Message to PPT: ‘bring it on’.
Mr Market has pounded through the day’s first resistance level at this point. But no worries — there will be more chances to stymie the correction later in the day.
Window dressers must have run out of lipstick, as the stock market is still walking like a pig, oinking like a pig and puckering like a pig at day’s end…
Down 130 points. If I recall, lots of futures at $200 a bbl expiring in Dec are getting bought. If it hits anywhere near that range, we’re in for a lot of pain.
Talked to my realtor friend again at church on Sunday. Even he admits that the 250K and over market here is dead. Still insists that we’re different here though and that prices really won’t come down further. At $7-$8 a gallon gas, this town would die since everything is so dependent on the outside and we’re 70 miles from no-where.
It will be interesting to see what the fed does at this point. BB urged the banks to raise as much capital as possible, was that a tell towards an emergency rate hike? As far as rising demand goes, price rationing is coming, it’s already happening in coal.
have many lovely puts all well in the money now
E pluribus Coop.
Still short or stopped out?
Whatsa stop? lol
I had a small profit on DCR then a small loss for break even.
Yeah, i should have sold on the spike to 4.7. Ahhh well, going to play chicken until jun 25.
Emergency rate hike is probably the right action. It’s a sound logical response. However, the PR message is they expect prices to moderate.
Does “it’s a sound logical response” automatically translate in anyone else’s head to “there’s no way in H-E-Double Hockey Sticks that this Fed will do anything like that.” Or is it just me?
IRWIN KELLNER
The future’s not what it used to be
Commentary: Financial markets not frozen, but they still feel chilly
By Dr. Irwin Kellner, MarketWatch
Last update: 9:46 p.m. EDT May 19, 2008
PORT WASHINGTON, N.Y. (MarketWatch) — The way the stock market’s been acting lately, you would think that the threat of a recession is a thing of the past and that global warming has reached the previously frozen financial markets.
With Monday’s rise, stock prices, as measured by the Dow Jones Industrial Average ($INDU: Last: 12,919.71-108.45-0.83% 9:36am 05/20/2008) are up around 11% from their March lows, although they are still more than 8% below last October’s peak. The pundits are interpreting this as a sign of less pessimism on the economic outlook.
Couple weeks ago, I mentioned people in town from Austin were nervous when hearing about PHX house market. Well, turns out one of them took off work yesterday to attend the closing on his brand new McMansion.
Was the PHX press in tow to write up how the market’s now vastly improving??
Looks like the bailout is going through, with the government taking on debt at 10% less than “market price.”
What’s that, in a market that isn’t clearing where the inventory is going up and up? What’s that in a market where banks are holding rather than selling REOs?
http://online.wsj.com/article/SB121021317534875965.html?mod=CommercialRealEstateMain_2
“Expected mortgage losses at Wachovia Corp. and Washington Mutual Inc. might not look as steep as those at rival lenders.”
“The reason: In recent weeks, Wachovia and WaMu have cited housing data from the Office of Federal Housing Enterprise Oversight when detailing their exposure to the U.S. housing market. A different index relied on by other banks, the S&P/Case-Shiller Home Price Indices, is gloomier.”
All they have to do is hire the appraisers they know are willing to play ball (those posting on this site presumably won’t get the business) and set “market value” at 20% more than the balance on the mortgage. Not only do they get all their money back, but they also get to make a profit on the fee.
Remember Manhattan, IL - the Chicago suburb offering $5,000 to anyone willing to buy a new house? Well, as of Friday no one has taken them up on the offer.
The excuse given was that the offer has only been available for “several weeks”.
On the subject of which type of housing/land use would get whacked hardest in the bust, here’s another article saying under/transit locations are faring best, long-commute exurbs worst, established suburbs in between.
http://online.wsj.com/article/SB121122333682304367.html?mod=fpa_editors_picks
Most of the cities cited — Boston, San Francisco, New York, Chicago — are unusual in that urban neighborhoods are still viable. One wouldn’t draw the same conclusion in Cleveland or Detroit, although “downtown” housing is faring better there than other neighborhoods. I think it is the collapse of urban America that is responsible for the relative outperformance — viable urban neighborhoods are scarce.
Viable urban neighborhoods are scarce, and even in a city with “viability” it’s no sure thing. Anyone who’s lived in a city for a while has seen neighborhoods gentrify or deteriorate — multiple times, in some cases.
Viable urban neighborhoods? Hahahaha - come on down to B’more if anyone still believes in that! Remember: drive go out after night, don’t stop at the red lights (or you’ll be carjacked or shot at), and don’t make eye-contact and you’ll be fine!
Sorry, I meant ” Don’t go out after night…”
Citigroup Hedge-Fund Loss
Weighs on Three Banks
“…The problems stem from Citigroup’s Falcon Strategies hedge fund, a fixed-income vehicle whose value has plunged more than 75%. Many of the fund’s investors were retail clients at the New York financial giant’s Smith Barney unit, including some who were told Falcon was a haven.
The collapse is another headache for Citigroup’s new management, led by Chief Executive Vikram Pandit, as it tries to rebound from crippling losses that stemmed partly from inadequate risk controls. Falcon’s descent has caused a handful of high-level brokers to quit in frustration. Citigroup is spending $250 million to allow retail investors to exit from their positions without absorbing the fund’s full losses….”
As Cher would sing
The beat goes on, the beat goes on
Drums keep pounding a rhythm to the brain
La de da de de, la de da de da
Just keep selling those assets maybe someday -solvent
That’s using the term “sing” loosely, isn’t it?
Citi Never Sleeps (TM)
Southern California down 24% in the last year.
http://www.latimes.com/business/la-fi-homes20-2008may20,0,4081478.story
Stocks open lower on record oil, inflation worry
Tuesday May 20, 9:49 am ET
Outside of food and energy, prices rose by a faster 0.4 percent — double what analysts expected.
Rising prices for gasoline and utilities prices are affecting both companies and consumers, and the government report shows price pressures are expanding. If those costs are passed on to the consumer, it could cause a pullback in spending that accounts for more than two-thirds of the U.S. economy.
http://biz.yahoo.com/ap/080520/wall_street.html
how could they have not expected this? it should be priced in already.
This is an odd one.
With rising energy costs, we’re finally lookingto replace the aluminum single pane, no-e windows in our house, with new vinyl, double pane, low-e windows. So, we get a flyer in the mail abouta week ago saying, buy 3 windows get one free, or 25% off sliding doors.
So, we finally get a chance to stop by the place yesterday. Shop was empty down to the carpets and sheet rock…. glad I didn’t hand them a check a week ago expecting window delivery soon.
Would-be window rustlers.
Window Wranglers? Sash Surfers?
I’ve slowly been doing window replacement here at the Arizona Slim Ranch. What’s slowed me down is the cost of the replacements. I’m thinking that now, with housing being so slowed-down, that it might be a good idea to resume the project. Methinks that window purveyor might be hurtin’ for work.
my county is going to burn tax $ to buy 100 homes for teachers and others closer to God than the payors.
22151
Can an economy made up entirely of civil servants and non-profit “advocates” function? At least the Starbucks will do well.
They are trying to make it work where I’m at. The restaurants and Starbucks seem to be doing okay. Lots of forclosures, lots of unsold new homes in the $250,000-$500,000 price range (one I like was completed in the fall of 2007, is still sitting vacant, no cut in the asking price), lots of vacant commercial property everywhere in town.
It will be “Party on, Garth” here, as long as the state government is allowed to be a parasite on the aerospace, military, and (recently) farm economies.
Fortunately, they seem to be smarter than the government in Michigan, and are trying to avoid killing the geese that are laying the golden eggs.
Yeah, if you want to find a cop at almost any time in my neighborhood in SF, you just have run a few blocks down the hill and take your pick from Starbucks.
Perhaps they are saving the Dept on fuel costs.
And far be it for them to actually foot patrol anywhere.
They’re talking about doing that here. The teacher-fireman-cop appeal. If you criticize it then you’re satan.
I work in local in gov’t in florida, and the fireman thing is the biggest scam going. Firemen here work 48 hours on 72 hours off. Of those 48 hours, 8 are guaranteed overtime. Much more when you get 2 48 hour stretches in a week. You also get 8 hours sleep out of every 24, and 8 hours of personal time.
Most firemen have 2nd jobs during their 72 hour off cycles & some work jobs during their 8 hours of personal time at the stations.
A couple of interesting calculation insights into some studies we’ve done:
1. 98% of all firemen had never actually been in a burning structure. Ever.
2. 97% of all labor was “wait” time (much of it at overtime rates).
3. 82 of the top 100 highest paid employees in the County are firemen. 2 making more that $150K. In Florida.
One of our top directors is an attorney by trade. His oldest boy isn’t college material. What did he advise him to do? Be a fireman.
Sorry, this is a sore point for me. I’m cutting staff because of budget cuts: programmers who automate processes to improve government efficiency. While the firemen are sitting on their arse’s grilling hotdogs and playing grabass with their girlfriends behind the stations.
A lot of people won’t like to read that, but it needs to said. Bankrupt gov’ts just don’t happen by accident.
You might regret cutting back their pay if your house ever catches on fire. Professional firefighters may seem kind of expensive, but when they’re REALLY needed, that cost pales in comparison to what you’d lose without them.
Call it “social insurance” or maybe “keep the whole city from burning down when a single structure catches fire” insurance.
“Professional firefighters may seem kind of expensive, but when they’re REALLY needed, that cost pales in comparison to what you’d lose without them.”
Right…
My house burned to vapor in the hour+ it took the local FD to get here. The station is less than a mile away.
Oh yeah, it was the only fire they had that year.
LOL! Yeah my mother’s second husband was a lifer with LAFD. What a good gig that was - he loved it, and he did cement contracting & some building on the side, plus went skiing at Mammoth, waterskiing at Lake whatever, putzed around doing this and that. Then retired to Los Osos after the divorce.
Wholesale inflation slows in April after March increase
Tuesday May 20, 9:16 am ET
The overall moderation in prices primarily reflected how the government adjusts its data to compensate for seasonal changes. Those adjustments showed gasoline prices falling last month even though motorists were seeing prices soar.
It left inflation outside of food and energy rising by 3 percent over the past 12 months, the fastest increase for a 12-month period since late 1991.
The report on the PPI, which measures price pressures before they reach consumers, followed news last week that consumer prices rose by just 0.2 percent in April even though food costs soared by the largest amount in 18 years.
http://biz.yahoo.com/ap/080520/economy.html
oh how i just love to see contradictions from our government. the prices you are now paying at the pump went down! not up!
Oil future hit $129 a bbl
http://www.marketwatch.com/news/story/crude-oil-cracks-129-barrel-pickens/story.aspx?guid=%7B311487E7%2DDB48%2D4804%2D93AB%2D17DA2EFD91BE%7D
Whatever happened to the blogger that went by the name “droopy diapers”?
On Minyanville, Jon Markman draws the parallel between this bear market rally off the Bear Steans low vs the 2001 bear market rally off the 9/11 low. Mkt. went down another 26% after that “rally.” Something to think about.
It’s all good in Santa Barbara
http://www.cnn.com/2008/LIVING/wayoflife/05/19/homeless.mom/index.html
I was in Santa Barbara last in 2005. Visiting a friend.
Never before have I had the urge to smack every second person with a 2×4 preferably with a rusty nail in it.
Thankfully, I spent most of the trip sailing on my friend’s boat.
WTF is a “loan processor” anyway? Shouldn’t all the processing be automated by now?
HAR FPSS!
Are you related to my hubby?
Seriously, he made our BIL and SIL a 2×4 w/rail spike for their wedding gift as a joke!
Inscription was to the effect: to b & s - cures what ails ya.
Still a favorite family conversation 26 years later!
Leigh
Live blogging from the graveyard. Just “earned” 250$ an hour mulching and summering up my own yard. Guy down the block was living in his grave the other weekend. His lawn guy quoted him $500 to do what I just did, mulching and trimming up for hurricane season.
So my snowbird neighbor (someday snowbird, still works full time up north) spent the $500 flying down, buying 6 $2 bags of mulch, and partying it up on the beach the rest of the weekend.
Same guy thinks people will get their wishing prices - it’s just going to take time because buyers are scared. When pressed about some of our specu-neighbors, he said that “oh, a few people got in over their heads”.
Another neighbor on the same block hates the idea of renters in one of the otherwise empty graves on our street (the owner bought it from a flipper at the top and then got transferred out of the country). Apparently renters bring the neighborhood down, because they aren’t “invested” in the community.
And yet they must pay a bucket load of rent because the owner has a very nice landscape company out there every two weeks tending the yard and pool. Since he paid at least 500k for the house, his mortgage payment must be astronomical, on top of the HOA, non-homesteaded taxes, insurance, rental management company, and lawn service.
Apparently renters bring the neighborhood down, because they aren’t “invested” in the community.
This attitude really ticks me off. I rent in a small townhouse complex (14 units). Most people there own (I think only 2 units other then me is renter-occupied).
I was having a lot of trouble with the gutters and rain pouring over them rather than down them. I brought this up to the association president numerous times. They finally hired someone to clean the gutters out. My problem did not go away. I told them the downspout is clearly clogged. They turned very nasty at me very quickly. Kept repeating that “this was fixed” when it clearly was not. (Let me tell you, I would have had those gutter guys out again and again until the problem was resolved!) The association prez. even “told on me” to my landlord who then “scolded” me for being such a pest. It was ridiculous.
So, I had 2 guys from the maintenance dept. at my work come over on our lunch break (I was in tears at this point because we were expecting a huge rain and the flooding was so bad). The 2 guys took the downspout apart (the part the bends up near the roof) and it was packed solid with black mulch. Just a few years-worth of leaves in there, eh? Since they fixed it, the flooding is completely gone.
I never did tell the association (nor my landlord) that I did this because using someone outside of the association’s list of contractors is not allowed (guess I’m kind of lucky I didn’t get caught). But tell me now who cares more about the property? The people who own? Or the lowly renter?
I know a lot of you will say I should just move. But I’ve only been there a year, my problem is solved (mtce. guys wouldn’t even take $$ from me), and I’m biding my time until I can (hopefully) buy something. I don’t feel like uprooting again in the meantime.
I hate this attitude too. I’ve always left a rental better than or equal to its condition when I moved in.
Well, I own a rental property (live on the first floor, have two units upstairs to rent), and I purposely have only rented sparingly in the last 10 years due to the trashing apartments take from renters who have NO respect.
The last tenant was so awful, hubby and I think we’ll just convert this to a home and not rent out at all.
Others may have had great experience with renters, but in the last 10 years, we have not (prior to that, tenants were quite nice). The older tenants were wonderful. The younger ones (under 40) have sucked many dozens of eggs.
M
No offense to the posters here but when I rent, I rent.
The problems are yours, that’s why I pay the bucks.
My job is to keep the place clean, and not trash the crap out of it. Your job is to make sure that the place stands, is in working order because to put it cleanly, it’s your f*ckin’ place.
I’m not spending my weekends doing your job. That’s your problem, and that’s why I am paying you in the first place.
Landlording is J.O.B., folks, not some free path to riches.
My landlord does nothing. In 10 years I have seen her only TWICE.
I’ve lived in the same SFH for 10 years, paid $2100 month back in 1999, rent went up to $2600 at it’s highest. No rent control for SFH in San Francisco.
I fix everything and then deduct it from the rent. When the house needed a new roof, new windows, and a paint job, I got her 3 estimates and picked the best contractor.
I also made her lower my rent back to $2200. Very cheap around here (that’s crazy, but true)
She’s got a good thing going and she knows it.
But as much as everyone says how great it is to rent, I have still paid her more than 1/4 million $$ over the years. Ouch.
Yes, my rent is cheap (relatively speaking), and I have been able to put money into retirement, but I am indeed saving to buy a house. I wince every time I spend money on the garden - new hedges this weekend.
She could kick me and my family out anytime just by raising the rent to a ridiculous price, or sell the house, or die, or whatever.
Even after 10 years I still don’t like the instability of renting.
So charge her for the hedges, and for your effort. I wouldn’t be scared of her.
And you do have a good thing going. That rent is below market IIRC and so you’re doing better than the others in SF.
And the point is not how much you have paid over the years, the point is how much did that allow you to save over the years?
Wow is all I can say. Loan processor spending 75% of her income on over priced housing now living in her car with her dogs. Very tragic and sad….
http://www.cnn.com/2008/LIVING/wayoflife/05/19/homeless.mom/index.html
Why remain living in Santa Barbara when you’re in financial straits and your bedroom is a car? Duh.
Livin’ la vida loan loco
She could drive to Omaha, rent a decent 1br apt for $500, and live a decent life on her SS and a full time $8/hr job. Why people like this don’t get out of CA is beyone me.
Where are the other two kids? Karma.
Just wanted to post an update here on my situation, which may be interesting to watch.
1) I’ve reached an agreement with my wife on separation - holding off on divorce for now - and we’re getting along pretty well with no conflict points.
2) I finally - after months of working weekends cleaning out, packing, preparing and repairing - have my house in Rockwall, TX listed for sale on Sunday. It should appear on MLS today.
I am working with a realtor that I really like (before saying I should go FSBO remember I work in Austin, 200 miles away, Monday through Friday, and need someone doing the legwork for me) - he totally gets the current market situation and the reality we are facing, and seems aggressive in his approach.
The initial listing is for less than the 2003 purchase price, and if it doesn’t get the kind of attention we’re hoping for quickly, out plan is to slash the price until something happens. The goal is to sell, not to linger. I have room to come down, though not as much as I would have liked.
As for comps, I’m setting the low for my neighborhood with my initial listing price, and it is one of the nicer homes in the neighborhood. It’s an older established neighborhood, with much much less conformity between houses, and my house in particular is unlike the others nearby (larger size and lot) and has some compelling features that they lack.
On a cost per square foot basis, I am starting at a good 25%+ LESS than my neighbors who are trying to sell their houses. And in raw $$$ numbers, there should be a reasonable number of people who can afford it (under $300k).
Still, with all that, and a wonderful showing condition, I know I can’t assume anything about this market.
and finally
3) My Dog died yesterday. I personally rescued him as a puppy in 1997 from the storm sewers in my neighborhood (mill breeders tended to dispose of unwanted puppies by throwing them in there). He was with me all day traveling from DFW to Austin. When I left work and arrived at my apartment, he slowly walked in, laid down in front of the bathroom door and died, just like that. He had been sick on and off the last few months, but I didn’t see this coming. Houses don’t matter that much in the bigger scheme of things. The people (dogs included) in your life do.
That happened to me last summer. One of my beloved Frenchies who also came from a puppy mill was in my kitchen and just dropped dead on the floor. Horrendous shock.
I am so sorry. I know how that hurts. When you’re ready, think about helping another one. The way things are today, they need it badly.
Thank you. It does hurt. Physically too.
My wife and I have not given much to charities over the years, with one exception - no kill animal shelters and rescue groups. We started doing that after I rescued him, and we will continue to do so in the future.
I don’t want to rush out and get an animal just to replace him and stem the grief, but I know that when the time comes, we will cross paths with another dog who needs someone, and we’ll need him.
It’s interesting to note that if I had a choice of keeping the house, which we bought with the intention to stay in and had many dreams for, or to have the dog back, even for just a little while, it would be no contest. The house never had a chance.
Trust me, I understand that. When I was in college, I sold a Rolex watch my boyfriend had given me to pay for treatment for a cat of mine (had no money). I would do it again today. All this BS we accumulate and strive for all becomes very insignificant when you have to deal with a real loss, one you feel.
Oh man, my heart goes out to you! My friend in the Sierras had a puppy mill pup that died last week, she’d rescued it, did everything for it (she’s a vet tech) and it died anyway after a few months. She’s having a hard time.
And you’re right about keeping focused on what matters. And it sure as H ain’t anything you can replace - will be thinking of you today.
Sorry to hear about your troubles.
I went through a very similar series of events in 2004/2005 — lost a cat to cancer, sold jointly owned condo, went through a divorce. None of it was easy, but losing a beloved pet was especially difficult.
Hang in there Brother.
Your dog story took the breath out of me. I am so sorry. Red eyes over here.
Add my condolances to the groups.
And good luck selling too.
My cat disappeared Sunday (inside the house)until after dark. He’d eaten some green cheddar cheese Saturday night, which caused him to walk like a drunk, and disturbed his vision.
I’m happy to report that the $700 emergency vet services (took him after midnight Monday morning) have restored his vision and most of his balance. I thought he had died somewhere - never missed him so much! Named him Scrotum - Scootie for short (sometimes Pestilence, when he follows me everywhere, so when I turn to return to refrigerator, almost walk on him). I found him on the side of a country road, just starting to cross, during a 50 degree rainstorm 8 yrs ago. Later when he dried out, I found out he was a long-hair.
Sorry to hear that, my thoughts will be with you.
My dog is about the same age, my wife and I got him in 97. He’s still doing well and enjoying the farm we just moved to but has slowed down quite a bit over the years and he eats less now. Hopefully it’s still a ways off but know it will be coming eventually…that will be a really bad week.
Deep,
1. Don’t know your situation - unions are much more difficult than many can imagine. My heartfelt prayers.
2. May the wings of Housing God’s be with you and yours.
3. Love the memories of your beloved pet, but please don’t blame yourself (you know you’re questioning his demise - it’s not your fault).
Best Always,
Leigh
Deep,
I am so sorry for your loss. But I am glad that you were the one who rescued him and gave him a wonderful life.
My condolences, Deep. And all the best in your home sale and getting through the split-up.
Was in Bakersfield last weekend. Info from a postal letter carrier: Postal collection boxes are being unbolted in order to dump out the mail and steal checks and cash. People are fishing the boxes with a string to which they attach sticky tape to fish mail out of the boxes. This is a sign of the times everywhere as the economy tightens. Word is: don’t put mail in the collection boxes overnight or after the collection time has past. Don’t put mail in the collection box over the weekend. Do deposit mail at the Post Office or box outside during open hours or give it to your carrier. You can also deposit it at contract Post Offices in local businesses. I was at a meeting in Tahoe where the same info was given out by various Postmasters.
To everyone in Bakersfried thinking about “mailing” in your keys…use FedEx…check the box that says the “Recipient” will pay the shipping cost.
OK, squatter’s update:
I’ve been procrastinating this morning, as last night I checked the little basement room where the furnace is (think scene from Home Alone where the kid goes down and the furnace turns into a monster)…and there was about 1/2 inch of water! Afraid to start the sump pump down there while standing in water (plus I’ve never started one before)…
OK, so there’s no one to call, no LL and I don’t even know who the bank is. So, I guess I’ll go down there and see…if I don’t come back, call the paramedics…be right back…
OK, it’s all gone, just sorta damp. I think it’s from the irrigation ditch behind the house. Started the pump, was easy.
Ah, the joys of squatting…home alone.
But the price is right…and now I can put “Sump-pump Maestro” on my resume. Maybe I’ll start a webpage called World-Sump-Pump-Expert.com and get rich.
Stay tuned. I’m sure there will be more.
Sounds like your situation both sucks AND blows…
Lost,
E-mail me if you need help w/something we can communicate online. No use calling in someone if its an easy test, or a fix he can coach you through.
(Landlord just ditched our rental maintenance guy when he realized hubby knew more and would be more honest w/him)
Thanks, Carrie, now I’m no longer home alone, I can call you…
Hey, now hows about that frig door, and, oh yeah, the dishwasher kinda falls outta the wall when I open it, and man, half the outlets don’t work…
Shoot, why don’t you guys just come out for a few weeks, I’l take you rafting (heh heh)…
Really, thanks!
I’d be all over that (rafting). After June 1, I have nothing to do.
Come on out, you can go with the rest of us after we get the house fixed up…
do you happen to have a 1966 turquoise cadillac convertible?
Well, no, but I know where one went off the cliffs…LOL!
“Shoot, why don’t you guys just come out for a few weeks, I’l take you rafting (heh heh)…”
oh, you caught that post! Then you know what an irresistible hook that is! (course I’m rusty!…..you can laugh at me! I’ll be in the front as usual laughing like a madwoman.)
Ya know I have been offered free use of a pretty respectable friend’s camper……now the only hurdle is my innate cheapness. It’s starting to turn OCD on me! Help! Reel me back into the carelessness of youth!
UPDATE 1-U.S. Senate banking panel passes housing rescue plan
http://www.reuters.com/article/marketsNews/idINN2038410520080520?rpc=44
Renters and responsible mortgage payers are about to pick up their pitch forks. The revolution against socialism is only in the starting stages but still needs to gain momentum…and will gain enough momentum to spark the r3volution (a la Ron Paul).
Dow down 205… Oil about to hit $130 bbl - that’s a significant psychological shock level IMO, the market will really nosedive if it reaches it today.
For you PNW folks: Just took a weekend trip to Winthrop, WA (”the next Jackson Hole”) and EVERYTHING is for sale. EVERYTHING. You drive through the Methow Valley and practically every shack, McMansion, and piece of land has a ‘for sale’ sign on it. It’s interesting to see that the owners of many pieces of land are yanking up their apple orchards - planning for master-built communities that will never be?
I need help understanding oil. I know this is really off topic, but is oil in bubble just like the internet stocks and housing during the past 10 years? I’d like to hear what you think. Or could someone please direct me to a website or text where I can educate myself about this spiraling-out-of-control commodity.
Yes, but don’t bet money against it until it breaks.
I’m going to tattoo that on my forehead, lol. Rails finally put in their high yesterday. Take a look at pot and tell me it isn’t going to cliff dive. What do you think about the spx? A pullback to the 50 dma and bounce to 1400 before diving?
http://image.minyanville.com/assets/FCK_Aug2007/File/SPX%20052008.gif
aapl tagged the 50 mma on the 10 day and pulled back. Is 160 in the cards? Long aapl puts (per Coop).
I guess you didn’t see Robert Hirsch, author of the 2005 government report on Peak Oil, on CNBC this morning?
“Dr. Hirsch, there are a lot of people when we talk about peak
oil who say there are going to be technologies that are always
developed. There will be new ways to get oil, whether it’s from coal, whether it’s from the oil shales, and they say that means we will never actually hit peak oil. What do you say to those people?
HIRSCH: They’re incorrect, and the reason that they’re incorrect is that they don’t understand the magnitude of the problem and how long it’s going to take to bring substitute liquid fuels on and to introduce energy efficiency on a massive scale. That’s something that we analyzed and it takes decades. And the reason, simply, is that the magnitude of the problem is enormous.
[McTeer says we should drill more.]
HOST: Dr. Hirsch, what do you say to that–the idea that we should be drilling in places like ANWR and drilling offshore. Would that solve this problem of a plateau in oil production?
HIRSCH: There’s no single thing that’s going to solve this problem because it’s as massive as one can possibly imagine. And the prices that we’re paying at the pump today I think are going to be the good old days because others who watch this very closely forecast that we are going to be hitting $12 and $15 per gallon. And then, after that, when world oil production goes into decline, we’re going to talk about
rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, in addition to that, we’re not going to be able to get the fuel when we want it.
There won’t be enough houses for everyone. The next generation will live in tent cities and Hondas.
Not to be outdone by the oil industry, the auto industry has a bubble of its own:
http://online.wsj.com/article/SB121124778122705883.html?mod=hpp_us_whats_news
No, I hate to tell you but oil is still cheap at these levels and going much higher over time. Why is oil still cheaper than milk when it is so much more critical? The fundamental rules have changed; peak oil is now, global demand grows, the USD fades, many other reasons. Many on this blog tend to see all rising prices as bubbles, but this is not the case. Of course it can correct but IMO you will never see $80 oil again. I recommend you read the oildrum blog, which is the oil equivalent of the HBB. Lots of good info there.
I buy milk for $3 a gallon. Gas is over $3.50.
Long term, i agree, short term, price is impacting demand. China tapped their spr, is the u.s. far behind? I think congress will force bushs’ hand.
yeah, it’s different this time
yada yada yada
heard it all before
NEW YORK (CNNMoney.com) — The debate over what’s driving the surge in energy and food prices reached Capitol Hill on Tuesday as lawmakers scrutinized the role of financial speculators in the commodities markets.
With oil approaching $130 a barrel and a global food crisis looming, the Senate Committee on Homeland Security and Governmental Affairs was hearing testimony from a panel of experts on how speculative investment by institutional investors and hedge funds may be contributing to food and energy price inflation.
(more on CNNmoney.com)
Poppa, The oil/gold speculation is all washed up. Don’t believe a word of it and stay out. There will be nothing left but the crying for the doomsday/end of the world minority.
Things that will help help “Affordability” & the “Economy” for the next “incoming” Administration:
War x4
Cheney-Shrub Legacy Update:
“…also says the unnamed Bush official said that Bush and Vice President Dick Cheney “were of the opinion that military action were called for.”
http://news.yahoo.com/s/ap/20080520/ap_on_go_pr_wh/bush_iran
Foreclosures open a door for Habitat for Humanity
http://www.miamiherald.com/business/story/539533.html
The housing charity Habitat for Humanity is buying empty lots and unoccupied homes in South Florida and elsewhere.
I just saw the strangest thing in Palm Beach county. It’s a rather large county and I had a few errands to run. One took me to a Wal-Mart Supercenter they have there. As long as I was there, I reasoned, I’d see if they had a video game I’ve been wanting to get (no go).
As I waited, there was a european couple there, older, maybe late sixties. They were buying something, music CDs, I think. They were being shepherded around by another european woman, and they were having the oddest conversation. Each of them repeated their bits several times, and although I got the gist of it, I just didn’t “get” it. A scam of some sorts?
Basically, she was telling the couple to buy her things on their credit card, about a thousand dollars worth in total, because they had to “run up” car expenses. Then they tell the accountant in Miami (who told her to do this) who would reimburse them by writing a check to them for a thousand dollars for car expenses as soon as he’d payed off “the note” and then it would all get “written off” as “car expenses”.
Either they were buying or selling or flipping some kind of property, and padding their expenses for one reason or another. But a strange conversation to be hearing in the middle of a crowded buy-everything store.
–
Inflationists Please Note: “My Wife & I Can Have Pizza & Coke Dinner For $2.36”
That was e-mail on Faux Business News. The guy said that he bought ten frozen pizzas for $10 and cans of coke for 18c each. I can attest to the 18c price for a can of coke. I personally prefer Costco pizza that feeds 4-6 people for $10.79. So the price of “Costco pizza and coke dinner” for two is more like $5. How much was it 25 years ago?
My contention is that restaurants are affected by almost all inflationary costs, including agricultural and dairy products, labor, and transportation. In every part of California I have lived, the restaurant prices are not up as much as the CPI. Amazingly, you can get better and cheaper Indian food in Silly.con Valley today than in 1980-81 when the first Indian restaurant opened.
Jas
more…
In my case, my cost of living, excluding the age-related sickness care insurance premium, IS LOWER in nominal dollars today than in 1980-81. I consume a huge amount of written material, especially, history and classic books. Watching tennis in HD on a large flat screen TV beats going to the stadium. My current car is the cheapest and lowest repair cost car I have had since 1980.
CPI more than reflects the cost of living. Only kooks think that CPI understates the actual cost of living in the US. It may be off in a given year, or two, but then more than compensates year or two later. For example, restaurants increase prices once in few years and not every year or every two years.
Jas
Seriously, anyone who predicted oil going to $10 bbl this spring shouldn’t call others kooks. I’m amazed you still post.
Look at the long dated contracts on nymex, panic buying.
I told you I like a good show, shorty. Or maybe you are a paper trader? Anyone really short from 115 would have covered.
If I were you I would figure out what it means when long dated futures go into contango. And fast.
still long dcr.
You are assuming demand will hold up under these prices, we are up 50% from the jan lows (60% for distillate). That’s a pretty good shock to the system.
The supply/demand model for crude oil has been upended because, in the good ol’ days, the price of oil has been negotiated on the presumption of unlimited supply and ample room to grow on the drop of a dime. Today, however, the markets are responding to the growing likelihood that supply IS limited. Thus, what we are witnessing is simple price discovery based on the new presumption that there is little room for growth to offset rocketing demand. You may call it panic buying, others woud call it getting in front of the inevitable consequences of decreasing supply and surging demand. As the airline is finding out the hard way, a lousy business model forces them to lock in oil hedges right NOW where there is no perceivable top to the price of oil. That’s what the market demands that they do, and in turn, oil is valued accordingly for its increasingly precious nature.
Get out of the US centric mode and realize the rest of the world is still partying and the US isn’t invited. Oil is going up with demand from every continent increasing. If US consumption drops from 14MMbbl/day to 12MMbbl/day, the daily amount of oil consumed in the world matches daily output.
The Pacific region consumes more oil than the US, The Euro region consumes more oil than the US. This is excluding Africa and South America consumption.
The world is a wash in US dollars and rapidly growing. When Tata starts selling its 2500EU car this fall, there will be another million cars on the road in India. India will be buying oil with US dollars. It is the raw material, not the price that is important.
Seems to me the third world is having trouble putting food on the table, how will they afford a car?
Also, the products didn’t follow oil in to contango. Isn’t there supposed to be a shortage of refining capacity? Interesting.
A shortage of refining capacity in the US, not in the world. Yes there is a problem with food that effects 60% of these countries, but 30% have moneys or roughly 600 Million Asian consumers. China, India, Korea, Malaysia, Vietnam are a long way past your conceptions from 1990.
Malaysia is the US 10th largest trading partner. Google Kuala Lumpur and compare to a city like Denver or Chicago. Which one do you think is a third world city?
I agree, i just think the price got little ahead of itself. 130 is supposed to be next years peak.
No shit.
I once cooked a “super fancy” omelettes brunch. No expense was spared whatsoever.
Then I passed out a printed sheet showing that the true (completely diluted cost including utilities) was less than McD’s meal.
Total brownie points, baby, total brownie points.
did you properly depreciate all the equipment used?
Oh c’mon. You know the answer as well as I do.
Be fair. Where’s the fun in that? Champagne for breakfast, etc?
Use accelerated depreciation and you can eat for free!
Still living in a deflationary daydream Jas? Better have pizza and coke for breakfast, because eggs and milk are out of your price range. Do you also have a deflationary doctor who charges less than in 1950? Which college do you send the little Jas to where college tuition drops every year? LOL. I bet your cable bill for Fox News gets cheaper every year too.
I’m no Jas fan (sorry Jas!) but I will not have him totally raked over the coals by a bullsh*tter either.
You don’t “need” cable. In fact, you can just Netflix everything and hook it up to your fancy-pants Tee-vee, and they provide the same crap, on demand, for $13.99, and there are no bleedin’ ads either.
Your argument is moronic beyond words (and read the argument about eggs above when you get a chance.)
I’m a Das fan
as in Sanjyt Das
Same here!
Yeah, he’s a smartie. Likewise.
Pussycat - don’t you need a doctor, college, health insurance? How is watcher a bullshitter? Please make a case for a broad price deflation, or it’s you who is a bullshitter.
All of this is “past” inflation making its way.
Collapsing home prices aren’t exactly a joke.
To put it differently, if in the past “new money” inflated different asset classes differently (rather than the uniform assumption of economists), why on earth would you expect “deflation” to deflate all the asset classes equally?
Capisce, paisan?
why on earth would you expect “deflation” to deflate all the asset classes equally?
Asset prices are not included in inflation numbers - neither during the RE runup, nor now, so your argument is irrelevant. Just ignore asset prices, and let’s talk broad prices.
And the broad prices are pointing up. Regardless of the direction of overpriced POS condos, everyone needs to buy eggs, milk, bread, visit a doctor, fill up a car, get some level of education.
Deny that the dollar is turning shit at your own peril.
Do you think your salary will triple this year to pay for all those exspensive goodies? NOT. Nor will anyone elses. So how long will those commodity prices hold, while demand goes down?
I’ve seen those 10/$10 pizzas at our grocery store, Stater Bros.
They are called “Pizza for One”, and are pretty good for when you’re having frozen food, but I wouldn’t make a big deal out of it like its just as good as going out for pizza, which it definitely is not the same as.
I got tired of waiting for prof bear to post this so:
http://www.marketwatch.com/quotes/quotes.aspx?symb=GC08M&sid=1494329
Gold, Forex, oil and l-t T-bonds are all enjoying a fright-to-quality move away from U.S. dollars and U.S. stocks.
From Bloomberg - http://www.bloomberg.com/apps/news?pid=20601109&sid=aCFGw7GYxY14&refer=home
Regarding Credit default swaps
It is a Damocles sword waiting to fall,” says Soros, 77, whose new book is called “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means” (PublicAffairs).
“To allow a market of that size to develop without regulatory supervision is really unacceptable,” Soros says.
The market, which has doubled in size every year since 2000 and is larger in dollar value than the New York Stock Exchange, is controlled by banks like JPMorgan, which act as dealers for buyers and sellers. Swap prices and trade volume aren’t publicly posted, so investors have to rely on bids and offers by banks.
Goldman Sachs Group Inc. and Morgan Stanley, two New York- based firms whose swap trading isn’t tracked by the OCC because they’re not commercial banks, are the largest swap counterparties, according to New York-based Fitch Ratings, which doesn’t provide dollar amounts.
Let’s see they aren’t banks so they can’t be regulated, but when the Sht hits the fan who lines up for FED hand outs. As I recall CD market is 45 trillion ,2x that of the stock markets.
Stopping this is like asking a little old lady to catch a piano dropped from the 10th floor. Unfortunately for us the little old lady is the US of A.
send in the clowns:
WASHINGTON (Reuters) - The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.
The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.
The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.
http://news.yahoo.com/s/nm/20080520/pl_nm/congress_opec_dc
They should start with the investment banks, they are the ones hyping oil.
House passes bill to sue OPEC over oil prices
http://news.yahoo.com/s/nm/20080520/pl_nm/congress_opec_dc
The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.
Clowngress is pulling out all the rhetorical stops on the oil price bandwagon. Too bad they are incapable of doing anything constructive like encouraging conservation and more alternative energy. Throw in some drilling and nuclear and you might be able to have a useful energy policy. What these bozos should do is sue the automakers for building such gas pigs, but that won’t happen since the bread of congress is buttered with millions from auto. Suing OPEC won’t cost them a dime in contributions and it fires up the redneck blood.
Now this is just stupid. They were the ones crying about dependence since to 70’s and have done zero.
And what will happen when the Saudi government passes laws that subject American companies to Saudi law? Think of all the one-handed folks at the annual real estate professionals convention.
NR
oh yeah and I’m not surprised. Those fuzzy headed liberals will next sue nature because oil is finite. Stupid Democrats.
This is ridiculous……start drilling off the coasts and everywhere else there’s oil and just be done with it already.
http://www.reuters.com/article/topNews/idUSWAT00953020080520?feedType=RSS&feedName=topNews&rpc=22&sp=true
Has your yard been explored?
They can have mine, as long as i get a cut, lol.
ANWAR + coasts = future U.S. oil supply
Stick to talking about housing on this blog, please. Unless you’ve been reading the oil blogs and also studying the problem from many angles for years, you probably don’t know what you’re talking about.
I’d actually recommend everyone here go do that, though.
Since when can’t people talk about things they know nothing about? Our Congress and Pres have done it for ages.
Hey Wallflower,
Ben Jones calls the shots on this blog, not you.
Blogs are a great forum for people who discuss that about which they know little to get free education, or at least free insults, from those who know more. At the end of the day, this form of inquiry some times reveals shocking truths which politicians and journalists choose to either ignore or to hide.
P.S. If oil prices go to $200/bl, the pressure to drill ANWAR or even coastal California waters will become immense…
FT Lex
Tier 1 tyranny
Published: May 19 2008
It may sound facetious, given banks’ equity-raising this year, but do capital ratios actually matter? In theory, they measure the buffer banks have to absorb losses. The specific measure in vogue now, equity Tier 1, takes book tangible common equity – minus goodwill and other intangibles – and compares it with book assets, weighted for their risk. Most European banks are targeting a ratio of 6 per cent or more, pushed on by their regulators.
Only diehard traditionalists argue that book values are the best gauge of an industrial company’s capacity to absorb losses. Cash flows relative to fixed charges such as net interest costs are preferred, ideally after adjusting for the profit cycle. That the S&P 500 trades at 2.7 times book value suggests balance sheets are a poor guide to assets’ break-up value. It is entirely possible to have negative tangible equity and be in rude health. AT&T, America’s third largest company by market capitalisation, is a case in point. No one is suggesting it needs an emergency rights issue.
Ignoring the importance of public confidence, what is true for industrials is true for banks. Many lenders could suffer writedowns that wiped out equity Tier 1 while, on current forecasts, continuing to earn more from their assets than they need to pay out to depositors and creditors. Bank assets are young relative to industrial companies’ plants, and more likely to be marked to market. But overall, book values are a poor indicator of the cash left if a failed bank is liquidated. The European sector trades on 2 times tangible book.
Equity Tier 1 capital is a lousy measure of a bank’s ability to absorb losses, and getting bogged down in the decimal places of an individual bank’s ratios makes little sense. Yet the fact that regulators have found no alternative shows just how geared and unreliable banks’ earnings are.”
It was only a matter of time before one of the major financial papers wrote that Basel II was wrong to use tier 1 capital requirements. Lets just have tier 3, mark to fantasy and say all banks are solvent.
The best measure of financial strength of a depository institution is (net financial assets)/(financial liabilities) where (net financial assets) = balance - (loss for non-collectibility). A ratio of 1.05 or better indicates a strong bank, under 0.98 indicates weak one. Under 0.95 should get a bank on the FDIC watch list while zombie banks are less than 0.90. Note that the higher the ratio the better the ROA but the worse the ROE. Accordingly, privately-held banks will have a much higher FA/FL ratio than publicly traded banks.
The above guidelines don’t take into account off balance sheet items such as CDSs, standby LCs, non-hedge futures/options, and questionable credit lines. A bank with a lot of this stuff needs a much higher FA/FL ratio than an old-fashioned bank. A bank run by crooks, gamblers, and cowboys probably needs a ratio of 1.25+ to avoid insolvency.
Speaking of grumbles in the graveyard, I take issue with this lip flapper:
Miami Herald hasn’t suitable for wrapping fish some years, and this looks like one of those years. How on earth does a bunch of bad stupid loans at a credit union really make credit unions unsuitable as this Thomas guy sneers? Banks made bad stupid loans, too. Banks have been down on credit unions for years and I seriously don’t understand why.
There’s one line in there about EFFCU being sound by industry standards, but frankly I’m not sure what, if anything, those standards mean.
EFFCU continues to lose money, it looks like; I know I’m overjoyed to hear that. /sarcasm
I hope to shout they survive long enough for my effing CD to mature with them, not that my big national bank that I use for day-to-day banking looks any more sane. GARRGHHH.
Credit unions are non-profit, cooperative organizations that don’t have to reward shareholders and don’t pay income taxes. Accordingly, a credit union can pay its depositor-members higher interest than a bank pays, and/or charge its borrower-members less for loans than a bank charges. Also, credit unions pay their executives much less than similar-sized banks pay their executives. Plus, I believe that credit union directors don’t get fees, only expenses like a mileage allowance.
Do you now understand why bankers hate credit unions?
Credit unions don’t have to make a profit or be beholden to shareholders. Hrm, like privately chartered banks.
Don’t pay income taxes. Okay, I can see where that is really annoying.
So they can pay higher returns to shareholders than banks. Wah?
So they can charge less for loans (not that I’ve seen that to a significant degree), wah?
Credit unions pay execs less. This affects banks how?
Directors don’t really get paid. This affect banks how?
I seriously don’t get it. It sounds like with the lack of share-selling, credit unions are perpetually underfunded compared to banks, therefore much less of a threat to banks anyway.
As to why I picked EFFCU (or any credit union, really) over my big bank was concern about monetary diversification, I needed something for my “play” money (my PayPal money is housed there, a pittance) and a place that had free coin counters. The CD was incidental; they were paying a whole quarter percent more for a 13 month CD than Big Bank.
The article did reference “changing rules” that have been scrapped; I’ll have to see what that is all about.
And I know it’s not just banks. My folks have the same distrust and dislike about credit unions but I’m not sure where that comes from.
Hrm, a now former UBS employee charged with helping customers evade taxes:
Inside edition, today at 4PM…. Foreclosed homeowners stripping their homes of everything, including the kitchen sink.
We hhb-ers have gone from being the insane outcasts wearing sandwhich boards declaring the end is near, to being the sane people saying it won’t be all THAT bad. Well, some of us say that.
It’s not only homes which are subject to getting stripped these days…
Tuesday, May 20, 2008
Cities, states hit hard by copper theft
Surveillance image of copper thief
Copper prices are booming, so thieves are boosting anything they can sell to scrap yards. Among other things they’re tearing apart infrastructure, leaving cities and states with big repair bills when their budgets are already bleak. Jeff Tyler reports.
Check out the Sandicor April 2008 SFR sales statistics by San Diego County zip code. For our zip code (92127 Rancho Bernardo West), there were 69 new SFR listings at a median list price of $999,000 versus only 25 sales at a median sold price of $690,000 ($309,000 or 31 pct below the median list price of new listings).
By contrast, the current median price of used SFRs on the MLS is $1,150,000, and the median sold price last month is $460,000, or 40 pct below this level.
All told, it seems like the purchase side of the market will drag prices down further before this correction is done correcting, as seller denial eventually gives way to bargaining and reconciliation.
My personal hunch is that current estimates of the ultimate tab for the mortgage mess understate the magnitude of the endogenous deleveraging feedback loop:
1) A high rate of current foreclosures creates downward pressure on home prices due to a supply glut.
2) Lower prices give more incentive for current owners to walk, leading to more REO at banks that will eventually be sold at fire-sale prices.
3) Would-be buyers avoid catching falling knives, leading to more homes on the market only selling after extreme price reductions. The result is more downward pressure on prices through the comps.
4) Lower prices give more incentive for current owners to walk, leading to more REO at banks that will eventually be sold at fire-sale prices.
Lather, rinse, repeat.
Tuesday, May 20, 2008
Empty homes, ruined neighborhoods
Foreclosure sign on house for sale
Lenders are selling off thousands of houses they’ve foreclosed on for pennies on the dollar. And now the neighborhoods where those homes are located are crumbling. Mhari Saito reports from Cleveland.
KAI RYSSDAL: The housing market inched a step closer to salvation today. A key Senate committee approved a plan to give cheaper government-backed mortgages to as many as half a million borrowers. The president’s still not sure if he’s going to sign it, though. Meantime, one analyst said today banks are going to have to set aside another $170 billion through next year to cover losses on bad credit.
Down at street level, the credit crunch comes in much smaller dollar amounts. Lenders are selling off thousands of houses they’ve foreclosed on for pennies on the dollar. And, Mhari Saito reports from WCPN in Cleveland, those neighborhoods are crumbling.
Tuesday, May 20, 2008
Besides gas and food, prices are rising
Shopper browses clothing
The Labor Department says businesses paid more for goods at the wholesale level last month — and that’s not counting food and energy. If businesses are paying higher prices for everything else, eventually the rest of us will, too. John Dimsdale reports.
Orlando - Channel 9 news here announced that there are so many foreclosures being filed in Orange County that a special Foreclosure Division has been created at the courthouse and that a couple of regular judges will spend every Friday hearing nothing but foreclosure cases.
Then they had a piece on Marion County (Ocala) budget shortfalls, focusing on the school budget. Getting the ax: transportation costs, teaching positions and something else. NO MENTION of reducing administrative positions or administrative buildings, of course. Bring a pitchfork to the next school bard meeting.