Weekend Topic Suggestions!
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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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Friend of mine called last night to ask my opinion on whether it’s time to buy yet or not. I said no. Prices around here have barely budged. I told friend to stop listening to what the media (or local realtors) is/are saying about how it’s the “best buyer’s market ever!” So untrue.
My topic suggestion for the weekend is - though it’s definitely not time to buy around here yet, are there any areas where it seems reasonable to? Years back I almost moved to Orlando (with now ex-hubby). At the time, prices were great! Recently I checked back in to see how prices now compare to back then and many seem pretty close. Point being, if I were planning a move to Orlando in the near future, I think it might be reasonable to buy now.
Any other areas where anyone thinks this might be the case?
‘Late paying your property taxes? You’ve got more company than ever.’
‘Across Central Florida, the number of delinquent taxpayers has increased 24 percent from last year. A record 110,000-plus property owners in Orange, Seminole, Osceola, Lake, Volusia and Brevard counties owe tax collectors more than $320 million. To put that figure in perspective, it’s comparable to the total amount of taxes and fees collected by the city of Orlando in 2006.’
‘But even in tough economic times, the tax man will be paid. It’s guaranteed.’
Are you sure you want to buy into that? In times like this, what’s the hurry?
On average, delinquent Central Floridians have a property-tax bill of $2,751 — a 14 percent increase from last year.
This is a low tax bill compared to many homes in my area.
But, no, I wouldn’t want to buy into it. I’m actually very relieved that I never made the move and definitely do not intend to ever make it now. But from a house-price perspective, it just appears that it’s quite a bit safer to consider getting back into some of the Florida markets than many others. (Only if one’s truly looking for a home, though, not as another get-rich-quick investment possibility.)
But at the end of the day, I am in 100% agreement with you that there is no hurry.
Out here, that’s the tax bill on a McMansion. I would say that the average tax bill here is around $1500.
When I lived in central Illinois, that was the tax bill of a hut. A standard 4br w/basement would run you $4500-5700 a year ($200-$250k).
“Out here, that’s the tax bill on a McMansion. I would say that the average tax bill here is around $1500.”
Ok, Colorado, now ya got me cryin’ again.
It blows my mind that in other states people pay such high property tax rates. All I can say is: Thank you Douglas Bruce, thank you.
http://en.wikipedia.org/wiki/Douglas_Bruce
This was funny!
From the article…
“On your mortgage you’re given several months in case you miss the payments,” Gilmore said. “You should get more latitude on taxes. The government doesn’t sell tax certificates if you’re late paying your federal income taxes.”
Actually, the government will cease your personal property and take your bank account if you’re late on your federal income taxes. If the rest of us Taxpayers are lucky, Ms. Gilmore will soon discover that!
Especially when developers and lenders are churning out FBs left and right:
‘On my way to an interview in the South Bay yesterday, I passed the hotel-turned-condo project just east of Interstate 5. There’s a huge banner hanging from the building now, advertising a public auction of units with a starting bid of $59,000.’
‘I wrote about the project, BayView Tower, in August 2006, when it was still a functioning hotel despite the “CONDOS FROM $185,000″ banner hanging from its roof.’
‘This morning I found out 32 of 49 remaining units sold at an auction on May 17…I’ve put in a couple of calls to find out more about the status of the project — how much the units sold for, for one. And I’m curious to know what the apparent trouble in the project means for the downtown renaissance that National City officials were telling me about last year.’
REDC is still not conducting absolute auctions, maybe when we see those it might be very very close to the bottom, when yes you really can get a condo for $59,000 if you are the only bidder just like Ebay!
—————————————————————–
All Properties have a Reserve Price, meaning the Seller of each Property has established an unpublished, minimum selling price. The starting bid is not the Reserve Price. In order to become the Winning Bidder for a Property, a Bidder must meet or exceed the Reserve Price and have the highest bid.
In this market, I’d be scared to find that I’d won an auction and have my winning bid exceed the reserve price.
Personally, I have no problem with reserve prices, as long as everyone knows about them.
Either
1. (Preferred) The reserve price should be advertised before the auction starts, so that people don’t waste time and money, or
2. (Less preferred, but better than nothing) The auctioneer states during the bidding that the auction is live. That is the system often used in Australia (where for legal reasons regarding seller’s rights a published reserve price cannot be taken as definitive). Phrases often used are “we’re selling now” or “it’s on the market now”, and once a statement of that nature is made the winning bidder has the right to obtain possession of the item being auctioned for the amount bid.
FL is looky mighty good but I think will be even better 12-18 months from now. GA or FL is a toss up. I don’t know the fine nuances between the two. We’ve got our sights set on both of them.
Moved from SFl to GA..never go back to FL..not because I don’t like it..just when comparing the two states GA has alot more to offer(better corporate employment,better public schools,better cost of living, better quality of people,better universities/colleges)…north florida is nice..South Florida is a dump and will become an even bigger dump in the next 12-18 months…I expect more cities down there to start claiming BK as things get financially worse..everyday the headlines get worse and worse with city budgets, housing, inflation, and school issues..
GA might not be for you EXETER
if they have teeth & not married to their sister they vote GOP
tricky
Hi Exeter,
Reality is just starting to hit home prices in GA. I was born in Atlanta many years ago, and once the bubble bottoms out, I will be moving somewhere else. The great jobs here are largely mythical, but the main problem with living here is the traffic. It’s often a tough call as to where to live, because a house near your job may mean a nightmare commute for your honey, or vise-versa. Even if you initially buy in an area that is a convenient commute for both of you, if one of you changes jobs, then the commute can become problematic. In the pre-bubble days, people used to sell the house and move to a more communte friendly part of town when they changed jobs. The fact that most people in Atlanta stay at the same job for an average of only 3 years, combined with the inablity to sell a house now at will, makes Atlanta a bad bet. One of the smaller GA cities, like Macon, Columbus, or Savannah is probably a better choice.
Now you’re insulting GA natives? Nice going. Whats worse is this regarding 2008 GA elections;
“Republicans are expecting a long and difficult Election Night in 2008 and their prospects for the U.S. Senate are especially bleak.”
http://tinyurl.com/4pxvbt
Maybe I’ll head to GA to celebrate liberation day in Nov.
Funny just sent a email to the local newspaper here in SFL..questioning why they HAVE NOT reported the numbers in regards to tax delinquencies..
http://www.dailybusinessreview.com/calendar/DELTAXMAIN.html
After reviewing the ENORMOUS list…I was shocked to see the dollar amounts associated with the business and residential owners…and a huge amount that of the businesses were title, mortgage companies, and real estate offices, for residential many were in those “special” gated communities..
Alot of FB in South Florida..and alot of FResidents there to whose budget depended on the COLLECTION of the taxes…
I’ve been looking at foreclosures in some of the inside the beltway suburbs in DC, there’s at least a little reason to the pricing at this point. I’m willing to trade a high price (but a relatively normal rental yield) for the stability and ability to invest in a garden and some energy saving technology.
I think prices will continue to fall as unemployment goes up. Wages have been stagnant if not lower.
ot sorry
another crane collapse in nyc 2 dead so far
http://curbed.com/archives/2008/05/30/breaking_crane_collapse_on_upper_east_side.php#reader_comments
I saw that headline and wondered if it had to do with condo building or was it commercial? Another side effect of all this crap.
Yesterday, the city announced its new safety rules for cranes…and said it would no longer require the stringent measures in place since the collapse in March that killed seven. Here’s yesterday’s news.
http://www.nytimes.com/2008/05/29/nyregion/29crane.html?fta=y
Many parts of our country that didn’t used to look like East St. Louis, will sadly turn into reasonable facsimiles of failure…
On the other hand
What part of the country holds up best, and why?
Looks like walkable places with access to transit are holding up better in metro areas with economically viable urban areas and older suburbs. Exurbs were already doing worse, and that was before the gas price explosion. Perhaps the marginal buyers is more interested in a convenient location than massive square footage.
Metros where urban neighborhoods and inner suburbs have died — ie. most of the Rustbelt — are tanking overall.
Among other metros, government spending seems to be the key –state capitals with state universities — Austin and Raleigh-Durham are booming economically. Even there, however, over building is a concern.
Among other metros, government spending seems to be the key –state capitals with state universities — Austin and Raleigh-Durham are booming economically. Even there, however, over building is a concern.
I’m curious to see how “state capitals with state universities” fare, as well as big university towns like Ann Arbor, MI, and Bloomington, IN. In addition to government and student spending, the archetypal college towns usually have cheap entertainment and food options and bike or mass-transit friendly layouts. That should all work in their favor.
On the other hand, all the college towns I’m familiar with will have to endure the fallout from parental and alumni “investment” in apartments and condos, as well as other absentee landlords who figured a few rental properties in the old college town would be A Sure Thing.
With the way the economy is going, how many people will be able to afford to send their children to these college towns?
I suspect parts of the country where key transportation routes intersect will always play a vital role in the national economy. In the eastern 1/3 of the USA: ports, railroads, rivers, & to a lesser degree the interstate highway system will continue to be important.
Metro areas & dead inner suburbs in those areas may be drastically revised to improve transportation & interstate trade. For example, Chicago is a bottleneck for the national rail network. Building alternate rail routes there would benefit the entire country. Cleveland has unused port capacity, while thousands of semi trucks drive across the city daily, neither picking up or delivering, burning up vast quantities of diesel fuel & polluting the air in NE OH.
Perhaps domestic industries such as steel will improve due to the need for revision of infrastructure and the lessening competition from foreign steel (it costs a lot more to ship steel to the USA than it once did.)
Parts of the USA that were settled only due to the automobile &/or whose economy depends on non-essential travel will wither unless they have some other economic advantage.
Is gay marriage good for housing? Double income, no kids can surely afford that overpriced McMansion… if you can get them to move to the burbs.
I think the problem with this scenario is that most of the gay people who want to be partnered (including setting up households together) already are. Marriage will make local/state tax paying, employee benefits and estate planning easier, but I don’t see it propping up the real estate market.
Just a point of information, my uncle and his partner are double income but they have 3 kids - all adopted out of the foster care system. I imagine that gay couples are more likely on a percentage basis than straight couples to remain childless, but it is the childless part that means there *might* be more disposable income to devote to housing, not the gay part.
I agree, remaining childless, regardless of gay or not, allows usually for more disposable income as well as higher rate of upward movement in a major corporation..(no distraction for a 60 hour work week or travel..)
And it’s not just children — I’m single and childless, but take care of my 91-yr-old mother (who has minimum Social Security and no other income or assets). The expense and time demands are not that different from what I see for friends with kids, and I’ve had to live with minimal-to-average raises for years because I can’t put in the xtra time and effort at work that others do.
Maybe the general rule is, whatever-number-of-working-adult-people spending basically only on themselves, rather than gay, childless, etc.
JOBS JOBS …why would any republican ever be against creating JOBS.
Seriously, gay people are not going to have Cheap Motel 8 type weddings. And believe it or not i can count on one hand the number of gay mobile DJ’s i have ever met
I guess no gay guy want to be caught driving a station wagon full of dj equipment.
So we straight people are left to do the work. And Business is Business.
Going the other way, what about divorce, straight or gay. From 2 people in 1 residence to 2 people in 2 residences, with no increase in household income.
I imagine a rise in divorce would put pressure on rentals.
Who gets to keep the house? When neither spouse wants it and you’ve got negative equity?… Leads to a forced sale or foreclosure….
Funny..article is out that divorce is DOWN due to the housing crisis..they even had TV interviews with couples who say they can’t get divorced because they can’t sell the house and need the proceeds to move on..also..neither party can afford to move out and on their own..apparently they are being kept captive by the house!
Fidelity Investments reported that early retirement portfolio withdrawals are up 16% from last year - these withdrawals incur a tax penalty. How’s that stainless and granite looking now?
401kerplunk
This is a huge policy issue. I don’t know if anyone ever provided a financial product that allowed people to take a cash payment and then sign over control of a defined benefit pension to the payor (or even if pensions were allowed to do that), but even if it did exist, I bet it was rare. That 401K or IRA is much more visible (and tempting) than a letter that arrives once a year that says in 30 years, if you stay at this employer you will get $x a month for your pension.
This is going to have to result in lots of people being honestly poor when they can’t work anymore. Anyone want to speculate about the truely long-term effects?
Possiblities:
a) Higher taxes on and diminished public services for the next generation, so those who did not save can live in the manner they are accustomed.
b) The parents who either got divorced to seek the Hugh Hefner/Sex in the City lifestyle, or never got married to begin with, with expect their kids to show their family values by allowing them to move in.
c) They’ll have to keep working. The one good thing about the 60’s generation — they’re all workers.
Only option a) would keep the distant retirement communities and cruise ship industry afloat.
“They’ll have to keep working.”
And keep paying into the Social Security system which will help solve the SS system’s insolvency issue.
See, it’s all good.
“They’ll have to keep working.”
“And keep paying into the Social Security system which will help solve the SS system’s insolvency issue.”
**************
Maybe the gov will end up issuing some policy barring lay offs of older workers.
Also the people who did save money will be taxed to death in their retirement (and I mean this literally) as things like Social Security and Medicare will become “means tested” and subject to tax if they’re “too rich”
We all know very frugal people with modest salaries who manage to save a Million for retirement. These are the people who will suffer the most.
Withdrawing money from a 401k is suicidal. 401ks are judgement free, why would you use those to pay bills? I’d rather default on the bills. Who cares if your credit score gets wiped out? you shouldn’t be living on credit anyways. cut up your credit cards and get out of debt.
Easy to say. Try having 3 kids in college at the same time. Middle class kids’ parents are the ones who have supported schools for the last 30 years. Good luck in finding someone to support them in the next 30. Might be a good topic.
Kids should pay for their own college. They should also be going to cheap state universities instead of crazy expensive private universities. I’d rather pay my own schooling rather than take in my parents because they failed to save for retirement.
I’m 28 and I went to U-Mass Lowell. I lived at home and commuted. Worked at a gas station around 25-30 hours a week. School was around $4500 a year then. I have zero college debt, zero loans. My parents also had three kids but refused to take out a home equity loan to finance our education. At the time I kicked and screamed because I was 18 and felt entitled to everything. I wanted to go to Bentley and that was 30k a year (plus at the time required a laptop computer). I hated it then but love it now.
Most kids are getting themselves into 100k of student loan debt for a degree which will net them a 40k a year job. After taxes and expenses, they would need to pay 10k a year for 10 years to pay that debt down. That’s a losing proposition.
“They should also be going to cheap state universities”
I suspect this is already starting to happen. Our applications at Washington State University are WAY up this year. Admissions closed months earlier than usual.
They should also be going to cheap state universities instead of crazy expensive private universities.
I’m all for it.
But the tuition at “cheap state universities” has gone up dramatically in the past few years as well.
It will be interesting to see what happens to tuition rates, academic quality and services when states really start to feel the revenue shortfall. Will tuitions rise to cover the gap, will schools trim administrative salaries and other fat (hah!), will the number of services and “add-ons” decline, will they cover their shortfalls in other ways?
Lowell? We used to go to Math Team stuff at Lowell. Always went on the tour of the nuclear reactor where you got to wear the fun radiation badge. Sadly none of them ever “went off.”
ET-Chicago,
All ready happening in California. UC system and I believe the State college system has raised their fees.
Gee Ed G
Were we separated at birth? I paid for my own school while pining for a Bentley education too.
Polly, you’re sharp at math but earn your living as a lawyer, no?
What area of jurisprudence?
That is a chicken and egg argument. If credit hadn’t gotten so loose to begin with, colleges wouldn’t have raised tuition so much because only a tiny fraction of their students would have been able to come up with the cash. Now, the credit issue here is not just Helocs and 401K borrowing, it is the student loans themselves - all different versions of the same credit bubble.
401K money is left out of the calculations of the national savings rate for a reason. You aren’t supposed to be able to spend it. Not until you hit, what is it? 59 1/2?
Money put into 401k was added to income when calculating parents’ ability to pay for kids’ college, at least those were the rules 10 years ago. All of my kids went to “cheap state universities.”
From one source:
Speaking of 401k plans, our expert also said that the accumulated assets in your 401k won’t be considered when aid decisions are calculated; however, once your child is in college, then the amount of income you defer each year will be counted as untaxed income, which will definitely affect aid awards.
So what’s in the 401k already isn’t counted, but if you added to it during the college year (as most will), then they’ll count that contribution as income even though it doesn’t show up on your tax forms as such.
And if you Google in wsj.com looking for “Seven Myths About College Finances”, you come across this:
First off, retirement plans are completely excluded. Also, according to the article, home equity on the home you live in is excluded from the federal calculation. However, some private colleges may cap it at 2 or 3 times your annual income.
Look around for more details, but it seems that so far in most cases what’s in your 401k already is not a problem. Doesn’t mean that rule won’t change in 20 years, though.
Responding to the college part of the thread–
My mil attended SU back in the early 50s. She often refers to those days as “oh that’s back when anyone could get in. You didn’t even need to have good grades. Just cough up the $1800 (fuzzy on exact figure)”
I’ll have the money saved for my kids to go where they want. It goes with being cheap. But the point about college costs is well taken.
I’ll be heading to my 25th year reunion, and expecting to hear a plea for donations to keep costs down.
But I’ll be carrying some info from the financial plan. The average full time equivalent prof now teachers two classes of 20 students per term. That’s eight hours a week in the classroom, 22-24 weeks per year.
The college had an additional January mini-semester when I was there. Profs hated it. It’s gone.
And, instruction and related support is low less than half the budget.
Now, should I increase my donations to Catholic Relief this year (so people don’t starve), or send a significant donation to alma mater?
And, instruction and related support is low less than half the budget.
Interesting.
But not especially surprising.
Then the kids should be in state u or community college.
I’m on the 401k committee at work and we decided to not allow loans when we started it up in 1998. No company stock either (it’s privately held anyway).
Bingo - state or community colleges! My father put 3 children thru 4 years each of college. His only stipulation? Must be state schools if we wanted him to pay. No brainer there. He did it via home loans - but that’s ALL he ever used a home loan for and at the end of it all, the house was paid off well before the 30 years was up.
Can be done. Just need to make it a priority. My dad drove old, clunker cars and we cut back on other things to make it work.
I agree..my kids already know its state colleges..plan is for them to attend 2 years community college(why pay prime dollar for core classes!) and then to transfer for the last two years..will all come out of college with NO LOANS!!..also one of my children plans on attending medical school(we have known this for a few years)..so alot of money has been put aside by the GRANDPARENTS and US(they don’t need new IPODS and junk)..to help with the expenses of that..
My daughter, who wants to be the doctor has already said she is going local so she can concentrate on studies and not have to worry about household stuff plus great medical school in the area and teaching hospital..told her..SMART MOVE..promised her we are going to visit the campus next week..
Re: your daughter the doc.
She might want to consider enlisting in the Navy? I know, I know…. But both my ex and my stepson joined up, got enlistment bonuses, full tuition for med school, plus stipends for internship and comparable salary for residency. Four years basically getting the most intense and interesting hands-on training available, (radiology and orthopaedic surgery…both stationed stateside, both in wartime getting state-of-the-art experience,) and then yer out. Plus veteran’s benefits. My sister, on the other hand racked up nearly 300K in student loans (Columbia/UCLA) during the 90’s. She’s still paying it off well into her fifties.
I just don’t get this stock market economy.
Where is the 8-10% mutual fund returns supposed to come from? If this is no longer a consumer led economy, the only profit to be made for companies is from cost-cutting efforts. But sending more people to the unemployment line or cutting their benefits would only squeeze the consumer even more.
It just feels like a massive transfer of wealth is about to occur and those who bought into the stock market before the bubble will be fine while the rest of us will be “upside-down”. Investing for the long-term in the late stage doesn’t make sense anymore. It’s a global economy and picking the right fund is what makes it work. Pick a loser and you’re going nowhere. Dollar cost averaging is no different than catching a falling knife.
Someone help me believe in the system!
It just feels like a massive transfer of wealth is about to occur I think this transfer has already happened. The consequences are playing out daily, just read the news.
they don’t incur a tax penalty as long as you remove the money according to a law passed in 2002 regarding 401ks. There is a monthly formula for removal and removal must continue according to the formula until age 62. Most people may not know this and thus will incur the 10% penalty by removing the money in one fell swoop.
I like the first post. Are there areas where it IS a good time to buy.? Here in Riverside, CA., I’m not so sure. We have put a few offers on homes, but we are offering LESS than asking, not more like most people.
The problem for us is nicer homes at lower prices are coming in 1 or 2 at a time and then there are multiple offers where everyone bids asking and higher.
So, do we keep offering less (because we have to anyway) for these nicer homes, wait til fall/winter, or settle for less?
I’m just not sure it’s going to go that much lower here.
I suspect we have something of a dead cat bounce going on right now in some markets. Many areas of Riverside County experienced gains of 4X from 1999 to 2006 which is simply not sustainable. The area remains a train wreck in slow motion, and will continue to see a very high rate of foreclosures for many years as a tsunami of ALT-A resets loom high on the horizon. Even those buying today, will most likely bolster the next wave of foreclosures going out another 5 years or so…
Just talk to a friend of mine in the mist of selling her home..she got a listing agent who has been in the business for 30 years and spoke to her about a community that the listing agent was interested in buying a townhouse in..the agent wanted to buy over the last few years, but felt that the price was too high…the agent then told her that the prices are now down to where she could afford it..when my friend said to her “So, When are you going to buy it?”
Listing agent reponse..”Oh, I will wait a little longer.”
Enough said…
Last week I ran into a realtor we worked with a couple of years ago. Extremely honest guy, but my wife didn’t think he was “aggressive” enough (go figure). Anyhow, he was shocked that we still hadn’t bought a home. I explained that our current rent was less than taxes, maintenance and insurance on any home we might buy… so it just didn’t make sense to buy.
His response: me too. It turns out that he has been here (Pullman, WA) for four years but never purchased a home because it is so much cheaper to rent!
When we get around to buying a home, this guy is going to be our agent.
Let’s talk about how to productively deal with anger…
And frustration….
And what the H-E-double-hockeysticks my LL could’ve done with the 103k she got when she refinanced the house I’m renting for free. And how she sent me an email yesterday saying she hasn’t yet declared BK because she doesn’t have the $1200 for the lawyer. Jeezelouise. She mentioned it like maybe I’d be kind enough to offer it.
(BTW, I thought she’d already given the house back to the bank, but not quite yet. But she says she doesn’t care if I stay here after she gets her stuff out next week (the house is furnished), so the squatter saga will continue for a bit longer…she told me she’s done with it and I can do whatever I want.)
But the anger thing’s for real, as I see friends who did the same thing as my LL now losing their houses and how it’s affecting everyone around them (family, friends, pets). Greedy selfish bastards. They can eat sh** and bark at the moon. Aaaaaoooooo!!!!!
“she told me she’s done with it and I can do whatever I want.”
I hate this schmucky attitude. Yeah, I know walkaways are a business decision, and that there is no point in bleeding people for their last nickle to enrich the stinking banks, but I still hate this attitude.
Gatsby observed the “carelessness” of the very rich…leaving wreckage in their wake. Now every nickle and dime scammer has adopted the same attitude. Yeah, and where is that 100k…any way you slice it that’s still a lot of money.
Days like today I feel like such a jerk..I really had no clue how the game was played.
Hey Spike, a lot of us couldn’t have known there were such crooks surrounding us, they were cleverly disguised as nice normal Americans…wait….
But you know, I think she’s just blaming the town and the house and the universe for her problems. See, that’s a great way to ensure you make yourself totally helpless and thereby unaccountable, these enemies are too big to fight, so hey, not my fault, I’ll just go with the flow and I’m off the hook and I can make everyone feel sorry for me.
Sheesh. I’d rather have a little personal power in my life.
OK, off to the city to buy insulin for my dog and see an old fiend, I mean friend.
Oh, don’t get me started on the topic of anger. I prefer to keep mine bottled up inside so that way, when I finally let go, there’s a massive explosion. Strangley, I was voted “most likely to go postal” by fellow employees at my last job. After which they asked for advance warning so that they wouldn’t get accidentally shot by being in the wrong place at the wrong time. I calmly explained to them that me being a Marine, if they got shot it wouldn’t be by accident.
It seems people can’t take a joke any more. I think the biggest casualty of all this mess is the loss of people’s sense of humor.
‘I think the biggest casualty of all this mess is the loss of people’s sense of humor.’
Oh, I don’t know…I often find watching stupid people interesting and comical. Especially if they don’t know their own condition, and then it gets even better when this ‘consequence’ thingie enters the scenario. Therefore I am laughing even MORE lately, and even louder and more merrily.
(And don’t come shoot me just ’cause I disagreed.)
Oh yes, I’M laughing more lately, but it seems more and more that I’m laughing alone. Except on this board of course.
‘I’M laughing more lately, but it seems more and more that I’m laughing alone.’
Well then, just do it even louder, to make up for the deficit. Sweet Baby Jeebus likes it when we enjoy ourselves.
Thank you for your service, Marine.
You’re welcome, I’m sure. But I should thank YOU for paying my salary at the time. We got to do all the things that were fun in life (the Marine Corps is basically like going camping with the Boy Scouts, but with artillery and close air support), and couldn’t believe we got paid for doing it to boot!
Judging by all the body bags returning from Iraq I would say that its nothing like the Boy Scouts. Don’t get me wrong, I appreciate a great deal that so many men and women volunteer to serve. But I also think that it is unfortunte that at the end of the day that they are made to serve the interests of the super rich, and not the USA .
Hey, Devildog and Oly, I think it might help if I moved to a state where a person doesn’t have to use the term “flippin’”…
Flippin’ cussin’ heathens….
You could say “fetchin’” instead…
Hey devildog, if you’re in that bunch of Marines NHZ was talking about maybe being sent in to squelsh my squatting, put int a good word for me, eh?
Ouch, I guess I’m out of the loop on that one. But as long as you have plenty of cold beers available and can get them to start telling sea stories, it’s likely to turn into a bull session instead of an butt kicking…
On a side note it’s good to see at least one other person in Utah who doesn’t have their head in their nether regions. While there are good things about living in Utah, it seems most Mormons are content to do impersonations of ostriches, even with the house burning down around them. The only other Utah Mormon I’ve seen who is clued in to what is going on is manoftruth on Youtube. Of course he has long hair, so why should they listen to someone who is so obviously a non-conformist.
Hey, there’s plenty of us heathens in Utarrr.
But I’m actually from Colorado, so I guess I got off easy on that one. But I know some awesome Mormons, I just don’t like anyplace where there’s a dominant religion, unless it’s MY religion…
But granted, I don’t think a lot of Mormons know what their religion’s really about, but maybe we can say that about a lot of religions.
Except mine, (the Church Where a Person Doesn’t Have To Say Flippin’, AKA the Church of Freedom).
And, of course, Oly’s (the Church of Bonfire Hoppin’ and High-Quality Cussin’).
It is so true. Inventive cussing and assorted blasphemy is, I fancy, one of my minor talents and this precious gift was totally being repressed in Utarrr. Hey, verily, ‘let your light so shine?’ Right? That’s SCRIPTURE.
And it came to pass that that is one reason I left Utarrrr. So I could swear in church, if I went to church, which in fact I do, dutifully and respectfully. Only the services involve trees and jumping over bonfires and stuff and gets kinda noisy. You can’t hardly hear the high-quality cussing, so the effect is lost, although the intent is pure.
WAHOOO! I swear MOSTLY in church, that’s where I go to vent off steam, the Church of the Holy Redrock.
When I can’t go there, I just go throw rocks in the river.
’round here, I go to the Church of the Holy Garden, which is right close to the Church of the Holy Doug Firs (and its Chapel of the Western Red Cedars). I have been known to sing.
“Hey, Devildog and Oly, I think it might help if I moved to a state where a person doesn’t have to use the term “flippin’”…”
and then you have to move to the right part of the state. For example, NYCboy and exeter can say F**king all they want and its kind of… cute, and like… fun, and exciting.
In my neck of the woods, people step sideways away from me w/a scared look on their face when I trot that one out. Kind of takes all the fun out of it. (Sigh)
Lost:
FREE RENT..i love it….and shes asking you for $1200 to help her file BK…..priceless!
Where is the Financial Crisis Headed Next? I think this fellow lays it out fairly well.
http://finance.yahoo.com/banking-budgeting/article/105163/Where-the-Financial-Crisis-Is-Headed-Next
“After the brutal real-estate recession that occured in the early 1990s, there was a sense that banks had finally learned their lesson and would be much better fortified for the next downturn.”
” … banks had finally learned their lesson …”
Bhhhaaaaaahahahahaha.
I think a good thing for us all to do would be to stop laughing at the misfortunes of Realtors. Yes, you heard me, fellow HBBers! Stop hooting with laughter and making cruel jests and so on, and ask ourselves ‘What would Sweet Baby Jeebus do in this situation? How could I help alleviate the suffering of these bewildered, enraged, getting-poorer-daily brothers and sisters?’
And you know what, I asked Him, and He said what He would do in this situation is to locate a bunch of realtors’ private homes, or offices, or carboard boxes, and carefully put a packet of Ramen noodles in their mailbox. Maybe even two packets. And a good flavor, like ‘Oriental’, not a nasty flavor, like ‘Cajun chicken’, for instance.
BWAHAHAHAHA!!!!!
OK, I’m going to the city and will come back with a box or two of Ramen…wait!!! no RE salespeople in my town…shoots, you TRY to be compassionate…
Queen of Candy.
Did you see this?
http://www.nytimes.com/2008/05/29/fashion/29WORK.html
About getting a job in hard market, but the real star of the piece is a realtor who offered to make anyone who gave him a good his sole legal heir.
But the laughter and cruel jests are in fact compassion. It’s just further encouragement to those down on their luck to find a real job and make something (else) of their lives…
I see the truth of it.
(That’s from ‘Dune’. It’s about time for a Dune Marathon at Chez Olympiagal.)
I wrote Dune!
(Prove me wrong.)
“Prove me wrong”
http://en.wikipedia.org/wiki/Frank_Herbert
Transdimensionality notwithstanding.
Could the worst of the housing bubble have been prevented by more regulation? I’m kinda wondering because it seems like regulators always fight the last war, and the moral hazards of MBS’s and CDO’s etc might not have been obvious because they were so, uh, “innovative.”
This past housing bubble could not have been possible without the appraisers and the bond rating agencies, both of which compromised their objectivity and acquiesced to the demands of RE industry. They were the ones relied upon for providing expert oversight and they failed miserably because of conflicts of interest.
To put it another way, realtors and loan officers are idiotic children that will always require adult supervision. The key is to make sure that those idiotic children don’t have a say in who the babysitter will be.
It is a huge topic but I think we should have a chat about tax policy and housing. Reuven and I started a little something about that on Monday, but I never really got going on the serious tax policy issues.
I’ll just throw this out to start. My income tax professor told us that the biggest tax subsidy for housing is that you are not taxed on the rental equivalent value of a house you own. The what (that was my reaction the first time he said it) you may ask? When you own a share of stock as an investment you own it, hopefully its value increases, you may or may not get dividends, but that is all there is to it. When you buy a house as an investment (and many people consider it one) you may relieve yourself of the necessity to rent a place to sleep. Since rent of a personal dwelling is not tax deductible (has to be paid out of after tax income), in a tax neutral world, you would have to pay taxes on the “income” you receive when you get to live in your house and not pay rent with after tax income.
Then there is the interest deduction.
Then there is the $250K free capital gains every 2 years.
Recently there is the exemption from paying tax on debt forgiven on a short sale.
There there are the various tweaks that the candidates are proposing (this is where we can talk about Obama’s proposal to shift from an interest deduction to a credit).
It is a huge topic. Maybe better for a cold winter weekend than a glorious summer one, but there it is.
Years ago my public finance professor made the same argument. While I appreciate the rationale, I’m against anything that makes the tax code more complicated, which any tax on the rental income would be. Just eliminate the interest deduction (among many others).
Yeah wouldn’t you just love the IRS setting rental values..
I agree with you, Polly, that the money I don’t have to pay in rent (both my properties are 100% paid off) is as good as income. And income I don’t have to pay tax on.
If that’s the case, then the “Mortgage Interest Deduction” makes even less sense (and I am strongly opposed to the Mortgage Interest Deduction–even though I have personally benefitted form it).
Frugal Savers are the most hated group in America today. Legislators try to outlaw saving even harder than they try to outlaw same-sex marriage! The fact that they get this “secret” income tax-free is a secret that I hope doesn’t get out.
(And speaking of same-sex marriage, I’m getting gay married, again, later this month! Our first one, in 2005, was nullified by the court, along with all the other San Francisco marriages.)
Congratulations again, Reuven!
It seems to me that “marriage” should be a ceremony you do in front of your community and/or your gods…a sentimental kinda thing like a funeral or a birthday party–with no state legitimacy implied or incurred. Those who wish legal recognition as an entity need to execute a civil union. Homo, hetero, whatever. See the judge, sign the papers, mind your own frackin’ business.
Why is this such a big deal? I seriously just don’t get all the umbrage from the religious element about something so straight(sorry,) forward.
I just don’t get this stock market economy.
Where is the 8-10% mutual fund returns supposed to come from? If this is no longer a consumer led economy, the only profit to be made for companies is from cost-cutting efforts. But sending more people to the unemployment line or cutting their benefits would only squeeze the consumer even more.
It just feels like a massive transfer of wealth is about to occur and those who bought into the stock market before the bubble will be fine while the rest of us will be “upside-down”. Investing for the long-term in the late stage doesn’t make sense anymore. It’s a global economy and picking the right fund is what makes it work. Pick a loser and you’re going nowhere. Dollar cost averaging is no different than catching a falling knife.
Someone help me believe in the system!
All the vast unwashed public ever hears about our economy is the Dow Jones close, something like this…
“Wall Street roared ahead a little over 71 points”
“Profit-taking responded in the Dow dropping 24 points”
I suspect stocks are the last item they can manipulate any which way they can, a last straw, if you will.
There is always a bull market somewhere. The key is not to be solely in US stocks.
I’m interested in the actual practical changes people are making in their lives, especially those inspired by the rise in energy and food prices. For instance, the neighbor across the street has put in a new wood-burning stove, plus he has doubled the size of his vegetable garden (and he’s talking about expanding that further.
You haven’t seen anything, yet.
Where are Professor Bear and txchick, my two favorite posters !
they musta got stucco in big D.
Gotta work for a living. But see some good weekend posts below…
Yesterday there was an article in the news about WalMart cutting food prices by cutting out the middleman. By buying produce locally they can cut shipping costs. High gasoline pricing is putting a lot of pressure on the economy and thus the job market and who is going to be out looking for work. We all foresaw a decline in the job market related to the housing market but this twist in the job market is coming fast and furious.
Where do you expect to see the damage: trucking, packing, transportation(cabs, limos, planes), vacation destinations (hotels, casinos, amusement parks)?
county tax reductions? anyone getting any
I’d love to see a discussion of what overall price declines will be for urban, suburban, and exurban areas as affected by higher fuel costs.
Interesting topic with psychological underpinnings:
Why do the current buyers have to buy now and opt to purchase property based on some imaginary ratio to the highest RE values attained in their respective area? Is it still the greed factor that RE only goes up? Is it buy now or be priced out later mantra lodged in semi-dormant brain cells? Is it for tax deduction? Is it for respectability or peer pressure? Or are they just sheeple mesmerized by the ‘how much’a month it’a a’gonna cost me’ plan waiting to be sheared by the propagating fiscal institutions?
You forgot the urge to one-up their friends/neighbors/relatives by getting a bigger house for less price than the what their someone else bought in 2003-2006.
Subrogation:
In each case, because I-X pays money to X which otherwise D would have had to pay, the law permits I-X to enforce X’s rights against D to recover some or all of what I-X has paid out. A very simple (and common) example of subrogation would be as follows:
who is D?
and
What is the “Make Whole Doctrine?”
I believe that the FED has already covertly purchased foreign debt obligations, when the currencies crack and undeveloped economies are exposed as fraud the holders of packaged emerging market securities cry foul; total fiat disaster is right around the corner. The printing presses around the globe are running full tilt, they cant keep it in check. Its not a dollar crisis, its not a credit crisis…this is a well oiled global printing press working overtime crisis.
The swaps, derivatives, and foreign currency speculation are designed to dull the system to policy shock. Sovereign Debt is designed to BE the system.
who is D?
who is I-X?
who is X?
tell me what is so.
Can I get a Cassandra ruling, Hoz?
How’d y’all spend your stimulus checks?
United States
The economy
Stimulus and shopping
May 29th 2008 | WASHINGTON, DC
From The Economist print edition
Good news for bargain basements
KATE from Baltimore bought a three-foot-tall light-up ice cream cone with her stimulus cheque. Stephen, from Brunswick, Georgia, acquired a brand-new Smith & Wesson pistol. And Nick from Ephrata, Pennsylvania, bailed himself out of jail. But far more typical of the entries at HowISpentMyStimulus.com are those like Monte’s from Los Angeles, who resisted his urge to establish a legal fund to try George Bush for war crimes and paid off his credit-card balance instead.
I have 2 credit cards. I owe exactly what I’m getting (this was by accident, not planned that way) on one of them. So off it goes and that account is CLOSED (don’t care what it theoretically does to my FICO score as I’m not buying a house anytime soon).
And the car dealers are so desperate they don’t care what your credit scores are. But I’m not buying a new car either, my 8 year old FOCUS runs perfect.
I guess I’m just not being patriotic or something.
Got gravity?
United States
The housing market
Dropping a brick
May 29th 2008
From The Economist print edition
House prices are falling even faster than during the Great Depression
“A DESTABILISING contraction in nationwide house prices does not seem the most probable outcome…nominal house prices in the aggregate have rarely fallen and certainly not by very much.” Alan Greenspan’s soothing, if rather verbose, words on America’s housing market in 2005 rank high on history’s list of infamous predictions. But to be fair, most American economists shared his view that it was highly unlikely that average nationwide home prices would drop. That was the sort of thing that happened only during a deep depression, like the 1930s.
Unfortunately, new figures this week reveal that house prices have already fallen by more over the past 12 months than in any year during the Great Depression. The S&P/Case-Shiller national index fell by 14.1% in the year to the first quarter. Admittedly, other property indices show smaller drops, but most economists now favour this measure. The index goes back only 20 years, but Robert Shiller, an economist at Yale University and co-inventor of the index, has compiled a version that stretches back more than a century. This shows that the latest fall in nominal prices is already much bigger than the 10.5% drop in 1932, at the worst point of the Depression.
And things are even worse than they look. In the deflationary 1930s, America’s general price level was falling, so in real terms home prices declined much less than they did nominally. Today inflation is running at a brisk pace, so property prices have fallen by a staggering 18% in real terms over the past year.
Any Cali voters out there with an educated opinion about the June 3 ballot props 98 & 99 (government influence over eminent domain,) care to influence my vote? Seriously, I’m not a renter, but my coterie and I are about to fill out our absentee ballots and could use some input from all of you informed sources.
Thanx!