Bits Bucket For June 14, 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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Location:Northern Arizona, United States
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Dear MichaelViking,
You probably won’t see this, but I apologize. As you may know, last week, before I responded to you, I was decapitated by JT. I guess I lost my head, and thus did not respond respectfully to your point. Please accept my public apology.
You ask a good question. I answered disrespectfully. But, in my answer, if you can read past the disrespect, is an answer to your question.
I can give you analogy after analogy.
How many hits will Chase Utley get in his next game? Hard to predict. How many hits will Chase Utley get over the season? Easier to predict.
In the short term error swamps systematic information. In the long-term the system wins, and thus our knowledge of the system makes us able to make better predictions long-run than short-run. This dynamic is even more pronounced if you put far more resources into making long-run rather than short-run predictions.
I know this may look like the law of large numbers, but it is a bit different. The law of large numbers applies whether we have knowledge or not. The difference here is that we know something about the system, but much of the system we do not understand. The difference is subtle but real–if our knowledge were complete, our predictions would be exact. Our knowledge is not complete, and so . . ..
Our incomplete understanding of the system allows us to predict long-run tendencies and conditions (e.g., Utley will get 150-200 hits — I’m no baseball fan, this is an example) but not short-term small ones (will Utley get 2 hits in the next game, or 3?). This is one of several reasons why the weather-forecasters errors tell us almost nothing about the accuracy of climate forecasts for the middle of this century.
Again, I am sorry for the disrespect. Your question, and you, did not deserve it.
IAT
lol… wtf
*Snort*
We (HBBer’s) are an interesting sort, eh?
Leigh
http://www.fooledbyrandomness.com/
I think that was a very thoughtful post, IAT. Thank you for being so willing to make a public apology. Shows good character.
Best of luck to you!
I don’t know if this was posted yet. It was news to me last night.
The guy that snapped-up congress-critter Richardson’s Sacto house for $388K is suing her and WaMu and another party for backing out of the May sale.
Well, good for him. The house is a loser. By suing he might get a settlement or punitive damages.. might even get his mug on TV.
http://www.kndo.com/Global/story.asp?S=8490765&nav=menu484_2
Financial services not the real economy, per an Italian regulator.
http://www.bloomberg.com/apps/news?pid=20601087&sid=anYKPR7jUhGU&refer=home
“It now looks unlikely that the situation in the financial services industry may have implications upon the real economy,” Bank of Italy Governor Mario Draghi, 60, the head of the Financial Stability Forum, told reporters today in Osaka, Japan. “It looks like the risks for the real economy are coming much more from the real economy itself.”
Yogi Berra’s Aunt?
“It looks like the risks for the real economy are coming much more from the real economy itself.”
Heavy, dude
“In a finance-based economy this IS productivity. Instead of cheaper and cheaper labor per unit of output, we have cheaper and cheaper interest rates per unit of debt.”
Bill Gross, The Last Vigilante, Investment Outlook February 2004.
http://www.pimco.com/LeftNav/ContentArchive/Default.htm
I pass around this article/link to (home)schoolers to counter Japanese immersion, German immersion etc. Their parents are broke, deep in consumer debt, and/or upside down. Why not a little financial immersion, or at least a dunking?
Since when do financial services and the economy have any correlation?
/sarcasm off
Unfortunate but true:
“While in decades past it used to be the captains of industry, now it’s the money shufflers – the folks who handle OPM
(other people’s money) and earn their vig off of it…
The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around; 44% of all corporate profits in the U.S. come from the financial sector compared with only 10% from the manufacturing sector”
from:
The Money Shuffler’s Vig
http://charvak.com/Science/Bridgewater/bwpm092204.pdf
(Another article I pass to the children as part of Financial Immersion TM…)
Main Entry: vig·o·rish
Pronunciation: ‘vi-g&-rish
Etymology: perhaps from Ukrainian vygrash or Russian vyigrysh winnings, profit (I’ve also heard it’s Yiddish, perhaps derived from Russian or Ukrainian)
1 : a charge taken (as by a bookie or a gambling house) on bets; also : the degree of such a charge. A vigorish of five percent.
2 : interest paid to a moneylender
Cost of Living
Winter Worries Come Early
By M. P. DUNLEAVEY
Published: June 14, 2008
http://www.nytimes.com/2008/06/14/business/yourmoney/14cost.html?_r=1&ref=business&oref=slogin
“The price of oil is almost double what it was a year ago,” said Neil R. Bartle, president of the Blueox Corporation, a small fuel company in Oxford, N.Y. Many of his customers signed contracts last year that capped their fuel prices at $2.50 a gallon.
Now he is about to send out the contracts for the coming winter. “It was looking like we’d have to go to $4.50 a gallon,” Mr. Bartle said, “then last Friday we had another 30 cent per gallon increase, which puts it up to $4.80.”
It might prove to be a historically bad time to lock in fuel contracts, but then again maybe not, bearing in mind the Fed’s position that bubbles are only visible once they have popped.
I know that it is different with respect to oil — we aren’t making any more of it, ya know, and what is left is getting rapidly used up (just like land in Japan and California!)…
Some experts expect price of oil to tumble
Rally compared to pre-bust run-up of dot-com stocks
By Michael Patterson
and Elizabeth Stanton
BLOOMBERG NEWS
June 14, 2008
The rally that drove oil to a record $139.12 a barrel last week surpassed the gains in Internet stocks that preceded the dot-com crash in 2000.
Crude, which reached 28 record highs this year, rose 697 percent between the beginning of its rally on the New York Mercantile Exchange in November 2001 and its record intraday high on June 6. The last time a similar pattern was seen in equities was eight years ago, when Internet-related stocks sent the Nasdaq composite index up 640 percent to its highest level ever, according to data compiled by Bloomberg and Bespoke Investment Group.
(Graphic: Crude rally surpasses dot-com boom)
The Nasdaq plunged 78 percent from its March 2000 peak, erasing about $6 trillion of market value, as investors concluded that prices weren’t supported by profits at companies such as Broadcom and Amazon.com.
I curse the one who post this ditty!
WARNING: This stupid song is in my head (and maybe yours) everytime I hear the word bubble!
Disclaimer: I like soap bubbles!
http://www.boston.com/realestate/news/blogs/renow/2008/03/the_housing_bub.html
Leigh
“They” must have discovered another endless supply oil field then. LOL. It’s not the easy credit, it’s the lack of supply and the increas of demand that is pushing up prices of oil. They will go above $150 per barrel.
Ever see US Airways stock recently (LCC). Selling for $2.76 a share on Thursday. Dropped from near $60 over a year and a half time. It will be delisted within a year as it drops below $1 per share.
“…it’s the lack of supply and the increas of demand that is pushing up prices of oil. They will go above $150 per barrel.”
This is the equivalent of “real estate only goes up”.
Gold always goes up, too, as they aren’t making any more (and they are making lots more dollars).
http://www.sharelynx.com/chartsfixed/600yeargold.gif
…And fortunately for an idiot like me, there are but few constants in all of economic history to learn. And it is all made easier that the big constant, the one really big constant in the whole universe is that a fiat currency that is expanded by massive excesses of money and credit is the essence of the cooties of inflation.
And if you are not a doctor and don’t have much experience with treating cooties, suffice it to say that eventually everything the cooties of inflation touches is destroyed.
Another timeless lesson is “except for the people who had gold.”
And so with expansionary governments, all being financed by fiat currencies and insane levels of fractional-reserve banking in a corrupt environment that is already expanding the American money supply by 13% a year and the Chinese money supply by 14%, the “opportunity” is the same “opportunity” that I see all around me right now.
And that is to buy gold; it is so historically cheap, and the world is so bizarre and divorced from any semblance of economic normalcy, that I calculate that the odds stand at eight zillion to zero that such a condition has never lasted, and the result has always been that people who owned gold made out like freaking bandits.
And in the hearts of grubby, greedy speculator trash like me, the words “made out like freaking bandits” ring sweet and clear. And I hope to you, too, so that you are moved to run out and load up on gold, and then one day in the future when gold is selling at astronomical amounts of money, and there is chaos all around you, you will say to yourself “Wow! I’m rich as hell, and everyone else is not! That Mogambo idiot was right about gold! Too bad he was such a creepy and hateful little man!”
Transmutation transportation boarding passes still available @ this late hour…
Transmutation transportation boarding passes…
_____________________________________________
Go to friendly coin store when GLD < 200 day (or even <250 day) SMA.
Plunk down USDs. Buy American Eagles.
Voila! Change linen and cotton into gold!
I like gold and silver right here. Dollar is bouncing nicely with no fundamental reasons for doing so, triple witching no doubt helping out, and morons like P Bear still frantically rubbing their 2 brain cells together trying to trash it when they don’t have the mental capacity to understand what’s going on. I’ve been riding this metals/commodities bull for 8 years now, and I can almost set my watch to the idiocy.
Having said that, I see a recession spreading and think there’s too much risk in oil right now for my blood.
We’ll resume this conversation in the fall to see where everyone is at - I have no doubt the anti gold retards will be posting. Why is it you chumps don’t seem to work and waste so much space here?
How many people will freeze in the dark with 6.00 + heating oil this winter?
“It looks like the risks for the real economy are coming much more from the real economy itself.”
By Jov..I think they got it..I think they got..
YES..we are all now entered into the REAL economy…where REAL paychecks have to PAY for our REAL lives!
The wife and I were talking all things bubble the other day, and she wisely noted that the shamelessly pumpy realty clown spew that appeared in the newspapers in the spring of ‘06 and ‘07.. you know, we’re at the bottom, buy now, etc etc.. has been notably absent. Our gal in Boston Kim Blanton can’t find a positive angle anymore?
“shamelessly pumpy realty clown spew”
That sounds like an absolutely awesome name for a punk band.
I like it too. It sounds fun and disgusting at the same time.
The can bottle the kool ade and call it:
“shameless pumpy realty clown brew”
House Won’t Sell? Turn It Into a B&B
http://www.nytimes.com/2008/06/15/realestate/15habi.html?ref=realestate
The couple didn’t receive a single offer on the property in 2006 or in 2007, even after they lowered the price by $200,000. Dropping the price still further was unthinkable: Before moving to Connecticut in 2005, they had lost $125,000 in the sale of a town house in Pittsburgh because a job change had forced them to sell right away. They weren’t about to lose any more money.
Neither would they panic. Ms. Wanamaker said panicking wasn’t in her nature — her mother had taught her to always think positively.
Staying calm was a bit tougher for the hard-driving Ms. Simkins; she began listening to self-help CDs and learned to “raise my vibration so that things I dreamed of could happen.”
Jeezus christmas. Where is the heck do they find these people. “Raise my vibration”… Lord..
Now they will keep it as a B&B, watch is value fall further, taxes go higher on it, and fewer people come in, because, in case they haven’t noticed, we are in a recession, and driving/flying is becoming more and more expensive.
Great timing. Now just buy a Hummer for your clients to use, and you will have hit just about every bubble peak at one time.
I hope they spent a fortune on nice furniture and stuff. I turned my house into a resort rental in Moab - it cost me 10k and I lost about 3k (because I decided to sell). Such ventures are not cheap. Now I have lots of nice RL towels and cool Kokopelli lamps in storage. LOL.
Lost in U,
Have you been here?
http://www.americansouthwest.net/utah/grand_staircase_escalante/hole_in_the_rock_road.html
My great-great-grandparents were part of that failed settlement mission.
It seems that it would take great effort to reach the place where they made the cut in the cliff.
Thanks in advance for any info.
Dude
Dude, I’ve been down the Hole in the Rock road, but didn’t get all the way to the notch (they didn’t make it, but improved on it), but I have friends who do it frequently and if you have a good 4×4, it’s quite doable. A lot of 4×4 clubs make an outing of it, if you want to go, I can give you info. Of course, the trail after they got down through the hole in the rock (which they had to blast and actually build a road down the ledges to get their wagons down) is now under Lake Foul, I mean Powell (which is really a reservoir, not a lake, but that’s a rant for another time). (Wow, talk about a run-on paragraph!)
I’ve read a lot about the history of that group, and they actually did succeed, they founded Bluff, were repeatedly flooded out, so a lot of them went further north and founded the little town of Blanding. Bluff has some beautiful stone buildings built by the Holey Rockers (as I like to call them).
They were truly an amazing group. Dance Hall Rock is famous for the dancing they did there, partway on the trail, all starving and practically wiped out, but still dancing. I have a couple of friends in Moab who are decendents of people on that journey.
The irony was that the Mormon scouts had found a better route, a much much easier way, down through the ford at Moab, but they didn’t take it. They were warned by people in Panguitch not to go that way, but I think winter was coming and they were in a hurry. As it was, they ended up spending winter out there anyway, very little food.
They created one of the most amazing stories of how determination, skill, and a common goal can get the impossible done. Absolutely amazing story. You should be proud to call them your great greats.
Hey, dude, I posted a LONG post so hope it shows up…
BTW, great pict!!
“They created one of the most amazing stories of how determination, skill, and a common goal can get the impossible done.”
We do it, not because it is easy, but because it is hard!”
Thanks Lost, I guess the family history is they failed because they came back to Parowan after just a couple of years, then they did another settlement in Ben’s neighborhood, Snowflake.
We are going up to Idaho Falls where my mom lives for July 4th, it’s a really good show every year, and not normally oppressively hot. Anyway, we had talked about doing Zion or Bryce on the way back home but I’ve also thought about trying to go see the hole in the rock. That’s my whyforehowcome.
Regarding my picture, I’m the one with my back turned…
just kidding, that’s checkpoint charlie in Berlin frm this spring. It’s really cool to see the face that connect to the thoughts we read. I guess my next step is to connect voices to faces. I don’t know about you, but I always imagined ByeFl (Oilcity, PA) sounds like Elmer Fudd.
Am I way off base here?
ROFL!
Seems like the last part of those NYTimes URLs invokes the log-in page. The one below doesn’t, for me anyway.
http://www.nytimes.com/2008/06/15/realestate/15habi.html
Thanks for the easy link.
“Repeat after me: OOOOOoooooohm, OOOOOOoooohmm, OOOOhhhh, OOOOOOOOOOhhhhhh Sh*tttttttt… OOOOOhhh…
You’re karma and dogma are doing the cha-cha.
- you’re
+ your
Watch out or formerlaspellingnazi will have ur scalp!
Not that theres anything wrong with that.
I still can’t understand why two people need such a big house. What were they thinking when they bought that monster?
I mean, what is this obsession with all things organic? Heck, poop is organic too!
The headline should have read, “Fur Traders to be Skinned Alive”. Hey, it would sell more papers.
I can’t think of a more kiss-of-death word in the current real estate market than “unthinkable.”
Rochester-area home sales down 11 percent from 2007
http://democratandchronicle.com/apps/pbcs.dll/article?AID=/20080614/BUSINESS/806140342/1001
But a potential worrisome sign was a drop of almost 20 percent in the number of purchase offers accepted, to 892 in May. Purchase offers are an indicator of future market activity as it typically takes two months to close on the sale of a home.
The punch bowl is still laced with optimism, but there will be a nasty hangover once reality sets in.
The article says the Rochester area’s inventory is down. Wow listings on cnyhome.com are up 40% from last year.
Are they still accepting 3-5% down on mortgages out there? Some banker dude around here is claiming its the best year he’s had in years and he has seen no tightening in lending qualifications. I’m about ready to ask him if he works for Countrywide.
CA, you can get interest only, 5% down, 40 year, and a bunch of other packages around this area. BOA has a 10% down, no closing costs, no PMI package at 30 yr/6.75 and 6.375 with $2100 in points. But if you go 10/1, you can get 6.375 for $800. On a note of some banking changes, at least documentation is required.
Good morning, I am requesting help with pronouncing the name, Edwin LeFevre, who wrote Reminiscences of a Stock Operator.
Edwin I got.
With LeFevre, is it:
– Luh-ferr
– Luh-fair
– Luh-fevv
– Luh-fev-ruh
– Luh-fev-er
– Other
Thanks!
you’ll have to ask him how he prefers it.. some day.. in heaven.
Lefevre, Greg (l*-FĀV)
LeFevre, Ned (l*-FĒV-*r)
LeFevre, Pierre (l*-FEV-r*)
(The * is that reversed “e” but i don’t have the font..)
http://www.loc.gov/nls/other/sayhow.html
I would guess something like Le-fay-vruh. But Americans have a long history of butchering French names (see Detroit and Des Moines).
And Nouveau Orleans!
Le’ Far?
My HS band teacher was a LeFevre and he pronounced it la-fay with the accent on the second syllable.
If it helps any, I knew a guy once named Ralph LeFevre
We called him Ruffle Fever
LOL!
Le’ Peu!
Pepe is that you?
This little love bundle. Now she is seeking for us a trysting place. Touching, is it not? Come, my little peanut of brittle. I will help you. Wait for me. Wait.
She look everywhere for me. She find me. Then she run away. WHY?!
Sacre Maroon!
Priceless!!!
But… but… but what about Brett… Fah…vruh?
The govt has a website that indicates when economic stimulus checks will be mailed. See this website.
http://www.irs.gov/irs/article/0,,id=180250,00.html
According to the website, mine went out yesterday.
Woo woo. I’m taking it right to the bank and ask them if they’ll trade one of their REO’s for it.
Mine went out may 9 and I never got it. I would have bought ink toner and glossy paper.
I hope no one in your neighborhood is having an open house when the black helicopters arrive…
Dodd’s ethics in question
Reports say senator received mortgage deals from Countrywide
By Peter Urban
STAFF WRITER
Article Last Updated: 06/14/2008 03:47:24 AM EDT
WASHINGTON — Connecticut Sen. Chris Dodd’s credibility as the Senate’s top banking watchdog came under question Friday following reports he received sweetheart mortgage deals as a “friend” of Countrywide Financial Corp.’s chairman.
“It looks terrible,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “To be involved with Countrywide at the same time you are regulating them and talking about the mortgage crisis just makes him (Dodd) that less credible.”
“Obviously, this calls into question some of his legitimacy as a critic of the subprime lending abuses,” said Gary Rose, a professor of politics at Sacred Heart University in Fairfield. “He’s going to have to explain it.”
Associated Press: “Senate Banking Committee Chairman Chris Dodd, . . . reportedly got special treatment on his own mortgages from the CEO of Countrywide Financial Corp, a company whose practices he has called “abusive.”
Apparently Mr. Jim Johnson has been hooking up Democratic senators with Angelo for favorable interest rates. Yeesh.
“I did not have
sex withspecial treatment from thatwomanlender!”Conrad, Dodd Deny Special Treatment on Mortgages
By JAMES R. HAGERTY , DAMIAN PALETTAAND GLENN R. SIMPSON
June 14, 2008; Page A3
HAR!
Leigh
It should be fairly straightforward to figure out whether Dodd got a special deal on his refinancing, given the extant data on lending rates. The wording of his statement suggests he may have accepted a Countrywide offer for special treatment, even if he did not actively seek it (though perhaps this depends on what the definition of is is).
The more interesting question is whether his vehement mortgage bailout support could be construed as a quid pro quo, as Countrywide would be a big beneficiary. Anyone who cares to search the blog archives can find the list of Dodd’s campaign contributors who are prominent REIC players…
Sen. Dodd, who is chairman of the powerful banking committee and has been in the middle of Democrats’ attempt to respond to the housing crisis, said it was “outrageous” to suggest that he had asked or expected to be treated differently than others. “When my wife and I refinanced our loans in 2003, we did not seek or expect any favorable treatment,” Sen. Dodd said in a statement. “Just like millions of other Americans, we shopped around and received competitive rates.”
” … it was ‘outrageous’ to suggest that he be asked or expected to be treated differently than others …”
“outrageous”
Lol. “Your winnings, Sir.’
As usual with these crooks you have to parse everything they say:
…”we did not seek or expect any favorable treatment…”
Of course you didn’t sir. It was understood by all concerned that you would simply get favorable treatment, without having to resort to such indignities.
Is there anyone here still trying to argue with a straight face that this mess is a politically one-sided thing?
Look, we are talking Countrywide here, and one of those Friend-of-Angelo loans? The real laughing matter here is if it is higher than you could hvae gotten shopping around ;). If that happened somehow, it would be the last nail in their coffin that the ghouls are waiting for.
Sen. Christopher Dodd Tied To Countrywide Loan
By Christopher Keating
on June 13, 2008 1:00 PM | Permalink | Comments (0)
From the Wall Street Journal to the Associated Press, the national media is reporting today that U.S. Senator Christopher Dodd received favorable mortgage rates from a highly controversial mortgage company.
Dodd received two 30-year loans from Countrywide Financial Corp., whose chairman and chief executive officer, Angelo Mozilo, has testified in front of Congress about problems in the subprime crisis.
Dodd, a Connecticut Democrat who is currently the chairman of the Senate banking committee, was designated as a “Friend of Angelo,” along with former Cabinet member Donna Shalala and other high-profile Washington insiders.
Republicans immediately said the disclosure would end Dodd’s chances of being a vice presidential candidate on the ticket with U.S. Sen. Barack Obama. Some had believed that Dodd had a good chance of being selected as a V.P. candidate because of his foreign-policy experience and his ties to Obama and to Caroline Kennedy, one of the key people who is screening the VP candidates for Obama.
Republicans immediately said the disclosure would end Dodd’s chances of being a vice presidential candidate on the ticket with U.S. Sen. Barack Obama.
Bull. Americans who want their bailouts don’t care anymore and regard Dodd as a hero. This is the society America has become, a long way from the libertarian days of the 1780s.
Libertarian days of the 1780s? Yup, so libertarian all those slaves were able to just sell themselves and their children into permanent slavery. Yeah. Really libertarian. NOT!
IAT
Bastille my heart…
I guess my response isn’t going to show up.
Boy is it ever beginning to seem obvious why the Democrats are so pro-mortgage-bailout!
Countrywide’s Many ‘Friends’
by Daniel Golden Jun 12 2008
Senators Dodd and Conrad are among the government officials who scored V.I.P. loans from C.E.O. Angelo Mozilo. An exclusive Portfolio investigation.
How can you suggest that with the “most ethical” Congress in the history of man?
http://www.youtube.com/watch?v=q_zZKEtoPpM
Boy is it ever beginning to seem obvious why the Democrats are so pro-mortgage-bailout!
The Republicans are equally pro-Wall Street-bailout.
Who is more deserving…the FBs, or the financial watchdogs and wunderkind who turned this whole thing into a worldwide contagion?
Show me a knight in shining armor for this story, PB…and I will shut up and give you a cookie!
You don’t have to shut up. Just show me all the rhetoric coming from Republican politicians in favor of bailouts (and I am betting you cannot).
the voted for it in congress didn’t they?
Here’s an article from the LA Times take a look, another conflict of interest coming from a republican who is a land developer.
http://www.latimes.com/business/la-fi-calgop9-2008may09,0,4849562.story
Can we say together both sides of the aisle are tainted?
“Can we say together both sides of the aisle are tainted?”
Perhaps, but you are going off topic. I am still waiting for anyone who can provide evidence of anything comparable on the Republican side of the aisle to Democratic support of the “Save our
HomesCountrywide” mortgage bailout. It looks to me like there was plenty of back room dealing between top Democratic lawmakers, Countrywide and Fannie Mae officials.The silence is deafening so far.
“The silence is deafening so far.”
I replied to your post almost two hours ago and it still hasn’t shown up yet.
I’d say what the FED has done and what the GSE’s have done constitute an attempted bailout of Countrywide.
I’m confused PB, I don’t believe the link I provided is going off topic. Your posting above does say the following: “Just show me all the rhetoric coming from Republican politicians in favor of bailouts (and I am betting you cannot).”
The article I provided give one example of the rhetoric coming from a Republican.
I will say it, both sides of the aisle are tainted.
Well PB, you win…I can’t debate you when my posts get eaten.
(i said nothing inappropriate, just a fairly long post that provided some links to back up what I said).
REVIEW & OUTLOOK
Ex-Friends of Barack
June 12, 2008; Page A16
Political Diary
June 14, 2008
Neither Borrower Nor Lender Be
The kind of sweetheart mortgage deals that forced Washington fixer Jim Johnson to resign as Barack Obama’s vice-presidential vetter are now haunting other leading Washington figures.
Both Chris Dodd, chairman of the Senate Banking Committee, and Kent Conrad, chairman of the Senate Budget committee, also got special below-market mortgages from Countrywide Financial, all arranged by Countrywide CEO Angelo Mozilo. Other recipients of a “Friends of Angelo” program that waived points, lender fees and company borrowing rules were former Bush HUD Secretary Alphonso Jackson, and former Clinton cabinet officers Donna Shalala and Richard Holbrooke.
The Left Does Not Understand What Free Markets Are
* Posted June 13th, 2008 at 1.26pm in Entrepreneurship.
Late yesterday Portfolio.com reported that a bunch of powerful Washington politicians were given below market loans by Countrywide Financial. Among those receiving “special” loans that saved them thousands of dollars were former HUD Secretary Alphonso Jackson and Senate Banking chairman Chris Dodd (D-CT).
Rounding up the morning’s news for his readers, online left leader Matt Stoller summarized the Portfolio story and then blithely comments: “Go free market!” Go free market?!? This story has nothing to do with the free market and everything to do with the inevitable rent seeking behavior that rational firms participate in when the federal government is given vast regulatory powers over their industry.
For example Dodd is currently the chief sponsor of legislation that progressives like Stoller claim is needed to “do something” about the current mortgage crisis. But the legislation Dodd has authored would also, surprise, surprise, save Countrywide Financial from billions in losses. But it should be no surprise that Countrywide is looking for the government to bail them out of this mess … after all it was government market intervention that helped cause it. The government sponsored entity Fannie Mae is the biggest buyer of Countrywide loans.
Because a component of regulation failed does not mean that regulation was not the elixer that would have prevented this. If the government had simply required
1. Lenders and homeowners to keep some skin in the game the housing bubble wouldn’t have happened, low interest rates cause property values to rise but alone they don’t lead to the problems we’ve seen. That requires fraud.
2. If they had prevented rating agencies from having conflicts of interest when they handed out ratings. Maybe it isn’t a good idea to have the guy who sells the rated product select and pay the rating agency. Maybe they should have been required to take some of the CDO’s as pay and hold them to machurity.
3. If the regulators had stepped up and prevented the formation of SIV’s.
Now think what would happen with no regulation. Banks would have no reserves, when the sht hit the fan there would be a run on banks, when people didn’t get their money they would stop investing and using banks they would put their cash under the mattress or buy goods that would store value.
“Now think what would happen with no regulation. Banks would have no reserves, when the sht hit the fan there would be a run on banks, when people didn’t get their money they would stop investing and using banks they would put their cash under the mattress or buy goods that would store value.”
I truely don’t see which part of 3% reserves (OK, is IS better than 0%) - XXX% crushing losses makes this scenario less likely.
The only thing hopeful for the banks is that “People are smart”, in the fullest unspoken sense of their words.
Could these be early rumblings of the next bubble?
Dollar, Stocks Stake Out Higher Ground
By Joanna Slater
Word Count: 506
The dollar has managed to come out on top, even though two weeks of market turmoil have sparked fresh worries about the U.S. economy and financial system.
While shares of financial stocks were taking a beating, the dollar had its best week in more than three years against the euro and the Japanese yen. A combination of forceful anti-inflation rhetoric from U.S. policy makers and signs of strain in the European Union contributed to the move.
The Irish don’t like the idea having their President appointed by Germans and Italians, so the whole plan is shitcanned.
How badly will the Euro be affected once the world realizes this is but one example of the fragility of the EU? I think there’ll be substantial losses.
Ireland will become Paddy-o furniture if they drop out of the EU.
NJ Realtors caught lying about their numbers…
http://www.nj.com/news/index.ssf/2008/06/nj_home_sales_plunged_30_perce.html
But they did own up to to it after they were caught red handed. So all in all, they are still great guys helping make the American Dream a reality for all.
“It happened in the crunching of the numbers,” said NAR spokesman Lucien Salvant. “It was just a mistake and we owned up to it.” . . . Jeffrey Otteau, president of the East Brunswick research firm Otteau Valuation Group, said he suspected the NAR’s original numbers were out of whack when they were issued May 13. When they came out with that report, we turned it inside out and upside down and we couldn’t make any sense of it, Otteau said.”
It happened in crunching the numbers, we can`t add or subtract and we owned up to it.
“It happened in the crunching of the numbers,” said NAR spokesman Lucien Salvant. “It was just a mistake and we owned up to it.”
“When they came out with that report, we turned it inside out and upside down and we couldn’t make any sense of it,” Otteau said.
They were only off 30%??? What makes sense to NAR usually doesn’t make much sense to those who do a thorough review of their numbers or their spin.
“When they came out with that report, we turned it inside out and upside down and we couldn’t make any sense of it,” Otteau said.
Based on his own calculations, home sales in New Jersey fell 26 percent during the first quarter of this year compared with the first quarter of 2007.
Otteau said things picked up in April. According to his figures, April home sales increased 9.3 percent from March - the first March-to-April increase since 2005.
“The housing market in New Jersey really is beginning to show signs of improvement, so that is still valid,” he said.
And, according to Otteau’s April calcuations, the average house now sits on the market for 10 months, down from 13 months in January.
*****
What - do they suddenly seasonally adjust DOM figures?
It’s unlikely.
So of course, even in the middle of a multi-year market meltdown, the DOM figures are going to better during the selling season (10 months) than during the slow season (13 months)… it’s New Jersey after all - where they actually have a winter season.
The reduction in DOM will happen again next spring as compared to winter, even though the overall market will be in worse shape.
WOW…the first dozen comments are telling!
Off for java (not script).
Leigh
Yeah, I think the HBB way of looking at real estate is starting to really take hold on a much larger scale. Ben must get some satisfaction in seeing increasing acceptance of what he’s been saying all along.
Some Ben Franklin Quotatiosns: There are plenty. Just Goggle Benjamin Franklin quotations.
A countryman between two lawyers is like a fish between two cats.
Benjamin Franklin
A good conscience is a continual Christmas.
Benjamin Franklin
A great empire, like a great cake, is most easily diminished at the edges.
Benjamin Franklin
A house is not a home unless it contains food and fire for the mind as well as the body.
Benjamin Franklin
A learned blockhead is a greater blockhead than an ignorant one.
Benjamin Franklin
A life of leisure and a life of laziness are two things. There will be sleeping enough in the grave.
Benjamin Franklin
A man wrapped up in himself makes a very small bundle.
Benjamin Franklin
A penny saved is a penny earned.
Benjamin Franklin
A place for everything, everything in its place.
Benjamin Franklin
A small leak can sink a great ship.
Benjamin Franklin
Absence sharpens love, presence strengthens it.
Benjamin Franklin
Admiration is the daughter of ignorance.
Benjamin Franklin
All mankind is divided into three classes: those that are immovable, those that are movable, and those that move.
Benjamin Franklin
All wars are follies, very expensive and very mischievous ones.
Benjamin Franklin
All who think cannot but see there is a sanction like that of religion which binds us in partnership in the serious work of the world.
Benjamin Franklin
An investment in knowledge pays the best interest.
Benjamin Franklin
And whether you’re an honest man, or whether you’re a thief,Depends on whose solicitor has given me my brief.
Benjamin Franklin
Anger is never without a reason, but seldom with a good one.
Benjamin Franklin
Any fool can criticize, condemn and complain and most fools do.
Benjamin Franklin
Any society that would give up a little liberty to gain a little security will deserve neither and lose both.
Benjamin Franklin
Anyone who trades liberty for security deserves neither liberty nor security.
Benjamin Franklin
Applause waits on success.
Benjamin Franklin
As we must account for every idle word, so must we account for every idle silence.
Benjamin Franklin
At twenty years of age the will reigns; at thirty, the wit; and at forty, the judgment.
Benjamin Franklin
Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.
Benjamin Franklin
Be slow in choosing a friend, slower in changing.
Benjamin Franklin
Beauty and folly are old companions.
Benjamin Franklin
Beer is living proof that God loves us and wants us to be happy.
Benjamin Franklin
Being ignorant is not so much a shame, as being unwilling to learn.
Benjamin Franklin
Beware of little expenses. A small leak will sink a great ship.
Benjamin Franklin
Beware the hobby that eats.
Benjamin Franklin
Buy what thou hast no need of and ere long thou shalt sell thy necessities.
Benjamin Franklin
Boy is that TRUE in a 400 sq.ft $500K studio apartment
——————–
A place for everything, everything in its place.
Benjamin Franklin
Buy what thou hast no need of and ere long thou shalt sell thy necessities. Benjamin Franklin
Is he saying because I bought all those RL towels and Kokopelli lamps I’m now going to have to sell my squatter’s cot?
Hmmm, maybe time to have a storage unit yard sale…can’t live w/o this cot…
An investment in knowledge pays the best interest.
Benjamin Franklin
Thanks for sharing these quotes.
This one applies to us. We did take out loans for college education and it was the best investment. My father used to say education is good in itself. We do need to solve the education crisis in the US. One of the most wonderful aspect of education is you learn how to learn
Taking courses has been like a drug addiction for me, and distance learning is crack. I’ve tried to break the addiction, but I start having withdrawal symptoms.
implosion,
For your distance learning, who do you use?
SanFranciscoBayAreaGal,
If you are not looking for credits, go on Amazon.com and buy a not so early edition of a text for the course. You will get a better education than on line or class. Also, you can move at your own pace. Unless you are very young, retention becomes more difficult with age and could be a problem at the rate its dished out.
imho (with out going into details about how screwed up the educational system is.)
I was admiring these quotes until I read: Admiration is the daughter of ignorance.
Now I am wallowing in my ignorance.
“Beer is living proof that God loves us and wants us to be happy.”
I like this one better:
“The government will fall that raises the price of beer.”
The former East Germany strictly regulated the price of beer. Since bars couldn’t compete on price, they competed on service: The locals measured quality of service by how quickly a beer was replaced after being finished.
Competition finally got to the point where you couldn’t actually finish your last beer, because another would be put in front of you before you could refuse.
In Utah they can’t bring you a second beer until you finish the first one. Bottoms up!
Excellent. It prevents serving beer to those who can’t lift the beer stein all the way to their mouths. It’s probably saved a lot of lives.
While in France many years ago I order a beer in a cafe next to Notre Dame Catherial.
It came in a liter glass. I did not remember the volume of a liter. I could barely pick up the mug. The waiter thought it was funny, until his boss showed up. Have you ever seen Parisans craw on their stomach out of the room after insulting a customer?
LOL
We’ll go to Allen’s for a twenty-five cent beer…at the Love Shack baby…
my personal favorite:
“Anyone who trades liberty for security deserves neither liberty nor security.”
They don’t deserve beer, either.
Yes, pass me a cold one.
Yes, pass me a cold one Benny!
OT Does anyone think the skyrocketing price of a college education has anything to do with easy and massive student loans ?
Bingo,
Take away the easy money and those costs are going to have to plummet, just like the home prices. Its funny how some politicians complain about the cost of higher education and then plan to have it paid by the government.
anything to do with it? maybe..
If it were true in principle that borrowed money alone caused skyrocketing prices, any and all goods or services which can be paid for with borrowed money should also show a marked rise in price… but such is not the case.
I know that a lot of people here think low interest rates and easy credit can be blamed for the RE bubble.. i see credit as a component, but there was much more to it, imo.
I thought that also. It looks like college costs have gone up commensurate with the easy loans. We’re trying to get through with no loans - half through undergrad with 0 debt. She does her part - earn big scholarships and work in summer. I do mine by providing and also coordinating the rest of the family contributing (herding cats sometimes). I can’t see sending my kid out to adult life saddled with huge debt and I certainly don’t intend to ease towards retirement with the debt either.
There was a good article or commentary on this recently, maybe in Lew Rockwell’s site.
If homeowners are generally rich and renters and homeless people (aka none-homeowners) are generally poor, from where exactly is this hypothetical “help” supposed to originate?
Foreclosure Filings Continue to Rise
Homeowners Need More Help, Critics Say
By Alan Zibel
Associated Press
Saturday, June 14, 2008; Page D03
Saudis trying to increase their production by about a half million a day. They’re maxed out at that level. What are they going to do as demand continues to grow by leaps and bounds?
http://www.nytimes.com/2008/06/14/business/14oil.html?em&ex=1213588800&en=f884ee2b296dfc23&ei=5087%0A
Has demand grown by leaps and bounds?
Well, according to the report’s statistical tables, India’s share of global oil consumption in 2007 was only 3.3%, not much more than Canada’s 2.6% share or Mexico’s 2.3% share, and India’s oil consumption has grown less than 3% annually during this decade. And India and China’s 12.6% combined share of world consumption is still only about half of America’s 24%.
In fact, total global oil demand increased by only 1.1% in both 2006 and 2007, roughly the same rate as the increase in world population, and about half the 2.03% average annual growth in oil demand during the 2002-2005 period.
http://seekingalpha.com/article/81063-1-238-billion-barrels-of-oil-reserves-is-this-an-oil-price-bubble
http://www.wtrg.com/prices.htm
“In mid 2002, there was over 6 million barrels per day of excess production capacity and by mid-2003 the excess was below 2 million. During much of 2004 and 2005 the spare capacity to produce oil was under a million barrels per day. A million barrels per day is not enough spare capacity to cover an interruption of supply from most OPEC producers.”
Spare capacity at a price that the consumer can bear is getting to be in short supply…
Capacity is adjustable. If demand falls, capacity to produce is usually reduced to save money (storage and production costs, etc). If demand rises, it’s desirable that capacity be increased. I’m only saying that capacity is one thing and demand is something else entirely.
Oil price has increased far, far, far more than justified by any increase in demand.. it’s bubblicious.
There’s probably unlimited capacity at $100 a gallon for gas considering how much petroleum is in the ground. However, will the consumer pay the price? Even with an inflexible demand such as that for oil, there’s a limit as to what the consumer can bear.
The continuing rise in demand from the developing world can’t be discounted because sooner or later, that economically viable extra production capacity will cross with the ability of the consumer to pay for it. In the United States this will result in a real drop in demand and should result in lower prices since we can resort to all kinds of energy saving measures (painful though it may be for many).
However, since demand is being driven by countries such as China and India who have little leeway in cutting back usage as they develop, oil will continue to rise. I guess a good example would be the addition to cars on the streets of Beijing. 1000 a day are being added. China in 2002 only had about 100,000,000 cars and trucks on the road. That for a country with 1.4 billion people. Add the same stats for India and you have a relentless rise in demand even excluding other regions.
Even if demand drops by 50% in the United States, the trendline on demand and price will continue to rise unless some “miracle” alternative that is cheap enough to be readily affordable by the developing world is found.
I stand by my belief that the growing demand for oil will far outstrip the economically viable excess capacity of the system (even with new recovery methods). This will lead to a global average price of about $10 a gallon (today’s dollars), by 2020. After that, it becomes too expensive for global consumers to bear and the real rush will begin to convert to alternatives. This may be pushed back somewhat by continuing subsidies by some nations, however, even China can’t afford to continue to subsidize energy at this price. JMHO
“…(storage and production costs, etc)”
Are the storage tanks full or empty? Now again, who exactly owns them? How long… can the ships bobble in the harbor awaiting unloading? Now let’s see… 200 million Americans cutting back 2 gallons a day causes the storage tanks to go down by how much? Oh, what’s the “shelf life” of gasoline?
“I want the truth”
“You can’t handle the truth”
“the addition to cars on the streets of Beijing. 1000 a day are being added”
How many “earthquake proof” bridges & overpasses can they quickly build using “pick & shovel” prisoners, er …workers?
Do they drive on the left or right…& does AAA have a claims office over there yet,… do they get free maps?
it still seems like we are talking different languages.
..unlimited capacity at $100 a gallon
That makes no sense to me. Lets agree on some definitions.
Reserves is oil in the ground. Capacity is the ability to pump, store and deliver that oil, and demand is a measure of actual sales of oil.
In a kitchen, you add capacity by purchasing another stove and an extra refrigerator and hiring another cook.
You might make the investment because people are actually buying (demand increase) more of your cookies. You also might not.. it’s investment guesswork.
–
And i already posted that link to the study that shows demand has not increased much. The supposed huge increase in demand worldwide in 2006 and 2007 is half of what it was in 2002-2005…
Please explain how only a 1% or so increase in demand justifies oil’s price going up 50%..
Waaay back in the olden days on the blog, we all seemed to convey to each other that the marginal transaction (the last seller and the last buyer) sets the price of a good. By this logic, logic most seemed to agree applied to houses, those small 1% increases in worldwide oil demand are driving the price.
California witnessed this process up close back in the Enron days. I wasn’t in CA then, but if I recall correctly Enron held back electricity supply each day until it triggered blackouts and near blackouts, then would sell additional energy at outrageous prices. The movie The Smartest Guys in the Room covers this and other Enron activities.
Alas, the coming problem is that supply is not only a function of oil company distribution policies. There is a physical resource that must be obtained. And, many alternatives to oil are, in fact, derivatives of oil, so oil supply problems will also produce problems in supplying those derivatives. When this is realized . . . all bets are off as to what will happen to prices, economies, and societies.
Going with the idea that it is easier to predict long-term than short term, I cannot say what the price of oil will be in 10 months. But I am confident it will be much higher in 10 years than it is now, and I have invested accordingly.
Oil is a physical good, not a virtual one. And, unlike condos which could in principle cover the land and be built to the sky, or computer programs which can be endlessly rewritten, “they” truly are not making any more oil. Exploration continues, but none will ever be available as cheaply as that we have already used, as the cheap oil is found first. Consequently, the long-term trend is up until economies can no longer afford to pay what it would cost to obtain the good. Then you have what we now have in real estate — no capitalist transactions. You may have feudal transactions; governments may enslave some citizens to get the energy needed. That’s what “all bets are off” means in the long-term.
IAT
The price increase is due to the plateau in production. There is very little spare capacity left.
Joey, I question the demand has only increased by 1%. According to BPs numbers, growth in Asia is off the chart. This year demand in China is up 25% over last year.
For good representation of the growth see Mr. Paul Kedroky’s
http://paul.kedrosky.com/archives/2008/06/11/visualizing_glo.html
For a good representation of supply:
http://paul.kedrosky.com/archives/2008/06/12/visualizing_oil.html
Unlike Ben, I’m not inspired to defend an oil-bubble.. I’m not involved and really don’t care one way or the other.
Unless some govt. investigative committee discovers blatant manipulation and causes a panic sell off, the commodities markets have a lot of headspace. If i get involved it’ll be short and nearer the top.
Theoilbubbleblog dot net domain is probably available if anyone wants it.
We won’t like to admit it, but bubble belief itself is a semi-religious belief. Belief in a phenomenon that isn’t (yet) visible (at least to the expert practicioners of the field)
lol
The numbers do not add up is what I was trying to point out. Maybe a bubble, maybe not.
staggering that demand has grown at all in the face of the price increase
The new middle class in the developing world wants to have a car.
I think a lot of Americans have not considered the possibility of fuel rationing in the not too distant future. I love mentioning this to the “I don’t care how expensive gas gets, I like my Suburban and I can afford it” crowd. They usually react by saying it will never happen.
Welcome to WWII. Fuel, food, materials were rationed during that time. My mom still has a few of the ration books that were issued to her and my grandparents.
With Exxon closing retail facilities, rationing and gas lines are a possibility. Wait ’til Americans who pay $4.00+ for a gallon of gas find themselves sitting in line for two hours in order to do so!
Just like the 1970s.
..oil demand increased by only 1.1% in both 2006 and 2007, roughly the same rate as the increase in world population
Did the huge increase in property prices during the run-up dter anyone from buying? Nope.. it did just the opposite.
What’s staggering is how similar the attitudes toward oil “supply” is to the “supply” of houses in 2002.
They ain’t making any more. Expect huge price increases from now on. Buy now or be priced out forever. It’s all so obvious.. and anyone who disagrees is either blind or a fool.
http://www.citynews.ca/news/news_23767.aspx
If you’re tired of spending money like water on gas, maybe you’d just rather spend money on water, period.
That’s what you’ll be doing if a Japanese firm has its way.
A company called Genepax, dedicated to finding ways to turn water into power, has unveiled what it calls the first practical car to run solely on H20. The firm claims putting just a litre of water from any source - tap, rain or river - is enough to keep its automobile going for 60 minutes at a respectable speed of 80 kilometres an hour.
And forget about finding a gas station when you’re running on empty. “The car will continue to run as long as you have a bottle of water to top up from time to time,” Genepax CEO Kiyoshi Hirasawa told a local Japanese broadcaster after demonstrating the test vehicle in Osaka. “It does not require you to build up an infrastructure to recharge your batteries, which is usually the case for most electric cars.”
Well, i’ve got an air-car.. it runs on air. It’s out in the garage. As long as air is allowed in, it’ll run. Cut off the air supply and it stops. Amazing but true.
I shudder to think of the increased pressures put on the water supply should all cars run off it…
I believe that you have to use energy to convert water to energy. What would matter is, is there a net gain and is it worth the cost, not to mention the water doesn’t “put itself there.” Unless you can use salt water and still gain energy net net, then you are subtracting from the potential drinking or irrigation water supply.
There were a whole lotta true believers in corn ethanol as key to energy independence, including many posters here (who have gone silent recently).
Nothing really replaces good ol’ dinosaur oil in terms of amount of energy stored per unit of volume. I’ve heard it once that it is too precious to burn!
You need a certain amount of electricity to break down the water into hydrogen and oxygen via an electrolyzer. The engine then could burn the hydrogen produced.
I don’t know how viable that would be on board a car; you would still need batteries to store the energy and a source of electricity to plug into, preferably at night when electric rates are at low demand.
Wind and solar energy could do the job here; but everybody would have to spend enormous amounts of money investing in this kind of infrastructure. Could create lots of new jobs, though.
I have no skin in the oil speculation game and almost don’t care, but from where I stand, this smells like an oil price crash in the making. It might actually be very good for the U.S. economy (not to mention the dollar), as we cannot very well keep chugging along with the specter of $5/g gas staring us in the face.
Oil Rally Topped Dot-Com Craze in Speculators’ Mania (Update2)
By Michael Patterson and Elizabeth Stanton
June 13 (Bloomberg) — The rally that drove oil to a record $139.12 a barrel last week surpassed the gains in Internet stocks that preceded the dot-com crash in 2000.
I’d be more worried about where to pile the stacks of devalued dollars. Can you bake them into bricks and build with them?
Some say, it’s only bits silly. I retort: make bricks with the bank statements then!
It’s not that oil is running out, I think.
It’s that the era of CHEAP, EASY TO GET AT oil is coming to an end.
I mean, here in Western Canada, they have to inject STEAM into the ground to get the bitumen to flow…
I don`t know how to cut and paste, but if you go to PalmBeachPost.com there is an article on the disapperance of the owner of Flagler Title.
first things first..
http://www.lollie.com/happy/cutandpaste.html
The president of one of the country’s largest title companies has closed his business and disappeared from West Palm Beach.
http://www.wpbf.com/news/16591810/detail.html
cool story.. people and things have been disappearing all around this guy..
Meanwhile, employees at other branches were seen carrying out furniture in lieu of their paychecks. [snip]
Gamblin’s computer tech worker looked at his office computer since Gamblin and his wife’s disappearance two weeks ago and found Internet searches on the topic “How to Disappear.”
he shoulda searched how to wipe a HDrive of incriminating evidence..
Agreed, Carl Hiassen could write this one.
You should re-post this on the next Florida thread.
Cook County foreclosures are worse than U.S. avg.
http://www.suntimes.com/business/1005858,CST-FIN-foreclosure14.article
At least the Cubs and the Sox are in first place.
Ben and anyone sending in a photo:
the email Ben posted at the start of the Bits Bucket for sending photos to is AnnMoorman@att dot hairnet dot com
It doesn’t work. Instead, use:
annmoorman@att dot net
Sorry mine came your way, Ben, but I couldn’t get anything to work until I found one of her old emails.
http://s292.photobucket.com/albums/mm1/anngogh/?albumview=slideshow
Yeah, ben’s email for me is betta: annmoorman@att dot net
Hey Utah, were you in sunny cal last week? You are in the slide show now! Tx, oly, V it’s a fashionista show so send in yer pics.
Also send me your home market photos sized 700×500 with captions.
Wow, weird for me to be with a cool bunch like that, I’m usually the one hiding in the corner with all the dogs.
C’mon, everyone, send in your pic so we can see who we’ve been antagonizing with sarcastic posts!
it’s so cool to put faces with names! i’m eastcoaster on myspace if anyone’s interested in what i look like.
ben…come east!!
hey, post a photo on ouro’s site, be cool!!
Eastcoaster, I am too lazy to go to myspace, could you please email me your photo?
ann
I’m none too tech savy, so don’t know how to put the following up here for all to link. The Press of Atlantic City,NJ, has front page story on how NAR’s original report of 1Q sales in the Garden State up 4% was corrected to report sales actually down 30%!!! Whoops. NAR gives no explanation for discrepancy; says it was “inadvertent,” “mistakes were made,” etc. Read between the lines, though, and you can see the real story is that dues-paying realtors whined and moaned that all the BS happy talk was really backfiring on them, leaving them with greedy sellers who could see no reason to lower their wishing prices. “Hey, why come off the $849,000 list price when everything I read says we’re still going gangbusters down here?”
Have a good weekend.
Watching “My First Home” on TLC this morning. At first I thought, finally! - a house show that is realistic. The first couple were young (21, 22) with a combined income around $50K. Location Asheville, NC. Wanted to spend under $100K. Realtor steered them towards manufactured homes. Ended up with a 4BR, 2BA on an acre in Leicester, NC for $120K. Did a FIXED RATE LOAN!! Great!
Second show. A couple who live outside Seattle. Household income $100K. Decided on a price range of $230 - $250K. Ok, not bad. 2.5 x income. Found a house for $265K. Made offer around that - higher than their budget, but not unreasonable. And just as I’m thinking this show’s worth watching, couple #2 - who have no downpayment - take out an interest only loan on the house. And the mortgage guy is selling it like it’s a great loan. Ugh. Turned it off.
“Ended up with a 4BR, 2BA on an acre in Leicester, NC for $120K. Did a FIXED RATE LOAN!! Great!”
In san diego the land alone would be 300k. Can anybody find out if land is even going down here? I’ll take a 4bd anywhere.
My neighbor down the street (yup, I’m still squatting) works for the city, he’s the water meter reader. Ran into him in the store last night, he’s a nice guy but very redneck and not real eddicated.
We got to talking about my landlady taking everything, he saw her hauling out the appliances. He then steered the conversation to HS wrestling, then to where he rides his ORV, then to the rifle being raffled by the community center fundraiser, then finally to the economy.
He looked very grim and started listing reasons he thinks we’re in a depression. He sounded a bit like Prof Bear. I was amazed that this guy who lives in podunk Utah and probably hasn’t read a book in his life (I’m not kidding) seemed to be more on it than the average MSM reporter.
A very easy mistake to confuse intelligence with education.
“Intelligence is quickness in seeing things as they are”
George Santayana
Actually, I sometimes think too much eddication is worse than too little.
I am thinking of going back to school. The best 4 years of my life were spent in kindergarten.
LOL!!!! My dad graduated 10th grade, had to quit school to work on the ranch, his dad lost a leg in a combine accident. He later became one of the head honchos of the Dept. of Energy’s electronics division, all self-taught. He was involved once in a brownout that took out most of LA, but that’s another story (wasn’t his fault, so he says).
Six months of day after day bad news is starting to chaff my hide.
Lite shopping is not a realistic option.
Worrying helps, but makes me distracted.
What can we do to settle the inner fear besides eat crunchy food?
One thing I like to do is go down to the river and throw rocks…
But, another thing that sometimes works is to watch Screamin’ Jay Hawkins on youtube:
http://tinyurl.com/2fnfmg
(He studied to be an opera singer and used Black sterotypes to entertain, another great.)
Ouro,
I head out to the beach. I can stand at the shoreline and scream at the top of my lungs or walk a trail that runs along the beach. I always feel better after coming back from the beach.
Vigorous bike ride and / or a swim, followed by steam and / or sauna.
Sit outside and read a book (other than current events one), no radio or podcasts or other media stimulation. I usually sit in my back yard, but sometimes go to the park.
For indoor time? Check out DVDs of “Buffy the Vampire Slayer” tv series and watch them in order (starting with Season 4, alternate with DVDs of Season 1 of “Angel” and continue thus).
If you can get the DVDs, the Canadian series “Trailer Park Boys” is hilarious and kind of addictive.
hip,
Just watched an episode of Buffy on TV (Angelius, Spike and Drucilla were in the episode). Sure do miss both BVS and Angel.
Try doing the DVDs. Each episode is 40 minutes without commercials. I usually watched 2 at a time. It took me a couple of years to get through both series all the way, with some extended hiatuses.
Besides enjoying the shows, I enjoyed chatting with employees and patrons of our local video shop who were “fans.”
hip,
Have watched the DVDs. My sister has the whole collection of BVS and Angel. My favorite episodes of both series was when Spike was in the episode.
CNN just posted mandatory evacuations in Des Moines, as the levees on the river have broken in places. Besides the human misery,the Iowa corn and soybeans crops are hurting. Food prices…up,up, and up.
“Since June 6, Iowa has gotten at least 8 inches of rain. That came after a wet spring that left the ground saturated. As of Friday, nine rivers were at or above historic flood levels. More thunderstorms are possible in the Cedar Rapids area over the weekend, but next week is expected to be sunny and dry.
The drenching has also severely damaged the corn crop in America’s No. 1 corn state and other parts of the Midwest at a time when corn prices are soaring.
Dave Miller, a grain farmer and director of research for the Iowa Farm Bureau, estimated that up to 1.3 million acres of corn and 2 million acres of soy beans — about 20 percent of the state’s overall grain crop — had been lost to flooding.”
How high’s the water, Momma?
Four feet high and risin’.
How high’s the water, Poppa?
She said it’s four feet high and risin’. - Johnny Cash
Don’t mean that with any disrespect for all the misery out there, these people are in my prayers, as well as the animals. But whence comes my food tomorrow? Something to ponder.
I feel bad for the people in the midwest losing everything in the floods. I don’t really know anyone that lives out that way, but those people just seem to me to be decent people that don’t really hurt anyone. They just do their thing and grow food to feed us all, and don’t cause any problems.
I keep hoping that posters in the ag sector would comment. Losing 20% of corn and soybeans in Iowa is a huge problem,afaik. US government reserves of grain are low, though farmers themselves may be holding back in hopes of higher prices. I don’t see how even the verbal threat of a quarter point rise in the FF would spike rising food prices, when relative scarcity is the issue.
Hoz?? Coment?
geez, comment…
LIC
I can only tell you what I know first hand:
Where my farms are located in the UP/Wisconsin border (3,000 acres), we are experiencing drought conditions (D0, D1). While southern Wisconsin got pummeled with rain, we got a half inch.
My mail box milk money is over $31/hundred, 2 years ago it was $11.75. I supply my own feed. In California, the dairy farmers will be hurt.
Friends in Minnesota are having a rough time, but how rough ? We talk at the taverns after the crops are harvested, not when there is still so much risk. My bean crop went in late and I am worried about 1) lack of rain 2) summer hail 3) early freeze. My hay is fine and am glad that it was to cold to plant corn.
I only know what I see in the news and the same prices that you see at the BOT.
Here in southern Michigan, we saw a farmer plowing up a field that was foot-tall hay. We figure with the recent flooding in Iowa, that he planned to plant corn instead. We’ve had only spotty hail, rainstorms & some high winds here.
Hay prices are still quite high, so if some do like this fellow, the rest of us hay bailers should get high prices this year, too.
I am posting this for fellow HBB’rs that are interested in “shorting” houses. (FPSS etal)
A new housing ETF
link is EDGAR filing
“…The MacroShares Major Metro Housing Down Trust, referred to as the “Down Trust,” intends to issue MacroShares Major Metro Housing Down Shares, referred to as the “Down MacroShares,” on a continuous basis at the direction of authorized participants.
The assets of the Down Trust will consist of an income distribution agreement and settlement contracts entered into with the MacroShares Major Metro Housing Up Trust, referred to as the “Up Trust.” The Down Trust will also hold U.S. Treasuries and repurchase agreements on U.S. Treasuries to secure its obligations under the income distribution agreement and the settlement contracts….”
http://www.sec.gov/Archives/edgar/data/1435967/000111650208000916/macrodn.htm
Very cool, I wonder how the volume will be?
“CNBC’s Jane Wells is a naughty, naughty girl.
She delightfully reports that the Moonlight BunnyRanch in Carson City, Neveda — the legal whorehouse featured on HBO’s “Cathouse” — is offering the first 100 customers who show up with their stimulus rebate checks twice the “services” for the same price. Guys that bring in their entire $1,200 check gets a special deal: three women and a bottle of bubbly.
Now you know why its called a stimulus check . . . ”
The Big Picture
link to CNBC
http://www.cnbc.com/id/25120815
Funny — I just heard an anecdote yesterday about a fellow who said the best thing for the economy would be if stimulus checks were spent on brothel services.
So the guys take their wife’s stimulus money too? How fair is that?
Looked a place yesterday - just on fringe price of the price range between where properties are either snatched up or sit on the market.
Place meets all of our wants and needs, but needs some updates, but that’s not a deal killer, as we would rather decorate to our own taste. Problem? The lower level was finished off without obtaining permits. Brought this to attention to seller, who replied they have no intention of getting permits after-the-fact. Didn’t seem interested that we would be in a very strong position as buyers. I brought up the issue that the insurance company may not be willing to insure the place, which would cause a problem with financing as the bank would require insurance.
Listing realtor was sure “obtaining insurance would not be a problem.? I guess that company in now branching out and providing reasonably priced insurance??
Careful with that one, some places can legally make you take out the changes. Or…tear it down, as was done to a very expensive house in Aspen a few years ago that was built w/o matching what was on its permit (IIRC, they made it lots bigger).
Not to worry….any offer would explicitly state seller would be responsible for obtaining permits and inspections (paperwork to be delivered two weeks before closing). Another thought would be to close BUT have huge amount of the sellers $$$ escrowed to pay for corrections if everything has to be torn out and replaced.
Will be calling the city, monday, to find out about the after the fact work permits.
Probably won’t get that far, as there are at least 1/2 dozen showings this weekend and someone will probably put in an offer.
I had a neighbor in Madison who had to tear out his basement because he didn’t get a permit.
I’m amazed by the number of realtors who don’t bat an eye at trying to sell a property with improvements that pretty obviously were not permitted or inspected. (How can I tell? Because they’re pointing out new construction that pretty obviously does not even come close to meeting local building code…)
I’m wondering if the county has someone from the building inspector’s office checking listed number of bedrooms against the number of bedrooms specified in the property tax records. I suspect, given the fines that can get levied, it would be (at the very least) self-financing.
They won’t admit it, but not even the highest of muckamuck economists can predict how long or deep the housing slump will go.
We are in uncharted territory with respect to home price declines, foreclosures and incentives to walk away and drop off the keys. Anyone who pretends to know how far we have to go is pretending to know unknown unknowns.
Home price slump just over half done
Fri Jun 13, 2008 3:38pm EDT
By Lynn Adler - Analysis
NEW YORK (Reuters) -The two-year U.S. home price slump is just over halfway done with little relief in sight as the market needs to work through a stockpile of unsold houses that is climbing as foreclosures jump.
House prices nationally tumbled more than 16 percent since the summer of 2006, and will slash at least 25 percent off their peak values before stabilizing, top Wall Street analyst and economists told the Reuters Investment Outlook Summit this week.
Housing has been the biggest risk to the economy and there is still “fundamental uncertainty” about the degree of slump need to restore better balance between supply and demand, said Martin Feldstein, Harvard University economics professor in Cambridge, Massachusetts.
Is the end of the acute phase of a financial crisis anything like the end of major hostilities in a war?
This byline makes no sense whatever. How should Bear’s collapse indicate the credit crisis is nearly over? Wouldn’t a collapse of a major Wall Street investment bank potentially trigger further problems down the road?
Credit crisis far from over despite Bear’s collapse
Fri Jun 13, 2008 6:02pm BST
By Jennifer Ablan
NEW YORK (Reuters) - The acute phase of the crisis in financial markets may be over, marked by the near collapse of Bear Stearns, but the fallout leaves the United States vulnerable to recession.
The vicious combination of the banking industry’s tighter lending standards, rooted in the monstrous rise in mortgage defaults, and falling American home prices could continue into 2009.
That could eat into already slowing economic growth and push the United States into a recession — albeit one that might be mild yet last longer than the eight-month-long recession of 2001, speakers at the Reuters Investment Outlook Summit said this week in New York.
Despite every reason for builder confidence to keep dropping, I don’t expect the NAHB sentiment index to ever drop much below 19 (the level where it has essentially remained stuck for several months). Reporting lower levels of this index could further depress builders, so there is a confidence-building motive for never reporting any lower levels than the recent stucco one.
Friday, June 13, 2008
Real Estate
Surging prices squeezing home builders
Oil pumps work in a cornfield near Divernon, Ill. Morgan Stanley predicts the price of oil will hit $150 a barrel by the Fourth of July.
By ALEX VEIGA
THE ASSOCIATED PRESS
LOS ANGELES — As if home builders didn’t have enough to worry about with plunging home prices and rising foreclosures, the surge in oil prices is driving up the cost of key construction materials and eroding home buyers’ confidence.
Friends of Angelo M. meeting today @ 2:00 EST, Congress Building
Dodd, where’s my loan?
QUID PRO CRAP
The Countrywide Bailout Explained
* Posted June 13th, 2008 at 11.07am in Entrepreneurship.
We have been calling Sen. Chris Dodd’s (D-CT) housing bailout bill “The Wall Street Bailout Enhancement Act” for over a month now. In particular, we have singled out Countrywide Financial as the bank with most to gain from the federal government’s generosity. Countrywide is the largest loan servicer in the nation. It has been accused by bankruptcy judges of using dubious tactics to issue mortgages to unqualified borrowers, and has been at the center of the nation’s still-unfolding mortgage crisis. In the last three quarters, Countrywide has lost $2.5 billion, and has $6 billion in nonperforming assets.
“Senator Dodd’s wife, Jackie Clegg, said in a brief interview that two other lenders they checked with offered comparable interest rates.”
Aw come on, everybody’s doing it!
““Senator Dodd’s wife, Jackie Clegg, said in a brief interview that two other lenders they checked with offered comparable interest rates.”
Could it have been “… two other lenders they checked with offered comparable interest rates because you are a powerful U.S. Senator.” Wink, wink.
Reminds me of the purported interview of Carla Bruni, “And what was it that interested you in the most powerful man in France?” (paraphrased from recollection)
Countrywide Gave Special Attention To Lawmakers
Lender’s Chief Executive Offered Incentives to VIPs
By Jonathan Weisman and Dina ElBoghdady
Washington Post Staff Writers
Saturday, June 14, 2008; Page A01
In 2004, Sen. Kent Conrad was hunting for a lender for a $1.07 million mortgage on his vacation home in Bethany Beach, Del., when an old friend handed him the phone number of Angelo Mozilo.
Conrad (D-N.D.) said yesterday that he sees nothing wrong with calling Mozilo, the chief executive of the nation’s largest mortgage lender, Countrywide Financial. And the Senate Budget Committee chairman is adamant that he received no special deals.
But by reaching out to Mozilo, Conrad became another VIP enrolled in the “FOA” — Friends of Angelo — loan program.
“[T]ake off 1 point,” Mozilo instructed a subordinate in a March 17, 2004, e-mail obtained by Condé Nast Portfolio magazine. In another e-mail that April about a Conrad loan, Mozilo wrote: “Make an exception due to the fact that the borrower is a senator.“
Just call the Tan Man for YOUR special deal! Call now, for you may be priced out forever! Suzanne researched this!
The VIP Treatment: Countrywide CEO Offers Better Rates for Prominent Few
Senators Chris Dodd and Kent Conrad Reportedly Received Favorable Rates on Loans
By MARCUS BARAM
June 13, 2008
Friends of Countrywide Financial CEO Angelo Mozilo and other high-profile individuals had their home loans handled by the company’s VIP desk, where a team of loan officers would work out favorable terms in conjunction with Mozilo, according to two former Countrywide executives.
Senators Chris Dodd and Kent Conrad, among other high-profile individuals, received favorable rates on their home loans as friends of Countrywide Financial CEO Angelo Mozilo, reports Conde Nast Portfolio.
“Celebrities get their loans from somewhere,” said one former executive who likened the favorable loans to employee discounts. “That desk handled loans for people who were referred by executives. The way that it would customarily work is he [Angelo] might call in, ‘What can we do? What are we charging on this or that?’ and then tell [his friend] ‘I’ll get you that at X. Don’t worry. I’ll get you the loan.”
–
June 14, 2008
House Prices, the Wealth Effect and the Cash-in-Hand Effect
by Paul Kasriel
House prices are collapsing, which means that homeowners’ equity in their houses is plunging. According to Federal Reserve flow-of-funds data, homeowners’ equity dropped by $399 billion quarter-to-quarter in Q1:2008 and $880 billion year-over-year - both record absolute declines (see Chart 1). The drop in homeowners’ equity contributed significantly to the $1.7 trillion decline in household net worth in the first quarter (see Chart 2).
…
http://www.safehaven.com/article-10520.htm
It IS the Debt, Stupid! (That kept the economy going during the reign of Bush, XVIII; the next President would inherit far worse economy than Herbert Hoover, a man ten times superior in ability to McCain or Obama).
– Jas
OMG — I just realized on looking at Chart 1 that I, too, am in denial. We are really just in the first inning of this game, judging from that drop in real estate equity, and nobody — I mean nobody — can predict how this goes from here.
Anyone who says we are halfway to the bottom already must not have seen that very disturbing chart.
Holy hand grenade, batman!
That IS scary!
And take a look at the chart showing the decline in MEW extraction predicted by iTulip - halfway down this link:
http://www.itulip.com/forums/showthread.php?t=1930
Just like you can’t extract blood from a stone, you can’t extract equity that ain’t there! There’s no THERE, there.
US inflation soars on rise in energy costs
By James Politi and Chris Bryant in Washington, Joe Leahy in Mumbai and Chris Flood in London
Published: June 13 2008 14:15 | Last updated: June 13 2008 18:53
Fears of accelerating global inflation were further heightened on Friday when US consumer prices surged by 0.6 per cent in May on the back of rising energy costs.
The jump in the US consumer price index was the largest since last November, as items such as air fares and petrol became much more expensive. However core consumer prices – which strip out food and energy costs – were reasonably stable, rising only 0.2 per cent.
Chart 3 may be a frightening look at what’s coming on the consumer side. So, in the last year about $550 billion less MEW has been available to the consumer? If so, wait till that hits the fan for retailer profits in the next quarter or two. Not pretty….
“not pretty …”
70% of our economy has grown dependent on consumer spending, and much of this consumer spending was dependent on consumers cashing out home equity that no longer exists.
Vanishing home equity translates to vanishing jobs that were dependent on home equity cash outs.
Vanishing jobs means less cash going into the system, which means cash will be harder to get and harder to keep.
Which means those with cash will have many financial choices and those without cash will have few.
Which will make cash the king.
And government can’t stimulus-check their way out of THAT severe destruction of the fake “equity”.
Chinese market crash
Published: June 13 2008 12:02 | Last updated: June 13 2008 22:24
With the once-high-flying Shanghai market falling a record 14 per cent this week, the analogies are growing darker. The market, once compared with the Nasdaq before and after the internet bubble, is now being likened to Wall Street in 1929.
Unraveling symbiosis noted. Whatever happened to decoupling, by the way, or is it that decoupling is now working in favor of U.S. equities and against Chinese equities?
The Great Chinese Crash of 2008
By Todd Wenning May 28, 2008 Comments (0)
Starting last fall, the Chinese stock markets went into a nosedive not unlike the Nasdaq plunge of 2000. Since their October highs, the Shanghai Composite (SSE) is down 44%, and the Hang Seng is down 23%.
Yeah but the good thing about the Chinese stock market is, 20 minutes after investors get pounded, they’re hungry to lose more…
So if China can live without their own PPT, then why do we need one?
It’s our stock market’s secret weapon.
The Chinese believe the CPPT will go into effect at 3000. A pretty good risk/reward ratio on the buy side. lol
Finance & Economics
Global markets
Too hot or too cold?
Jun 12th 2008
From The Economist print edition
Investors are caught between the desire for growth and the fear of inflation
Illustration by Satoshi Kambayashi
POOR Goldilocks is suddenly out of sorts. After five years when economic conditions have been, like baby bear’s porridge, “just right”—strong growth and low inflation—they are now spoiling fast. And as central banks begin to react vigorously, investors are taking fright.
When 2008 started, most investors assumed that the lingering effects of the credit crunch would allow interest rates to fall, or at worst be kept on hold. But over the past week markets have priced in a number of rate rises later in the year from the Federal Reserve, the European Central Bank (ECB) and the Bank of England. That has caused turmoil in short-term government-bond markets (see chart), as yields have been forced sharply higher.
The problem is inflation. Central bankers may hope that soaring oil and food prices will prove to be just a blip, and will not result in secondary effects such as higher wages. But they know that higher inflation expectations, once entrenched, are difficult to eliminate. So they are sounding as tough as they can.
How do you scroll through the HBB Photo gallery in a faster manner? I would like to see the most recent submissions, however, scrolling though 300 photos one by one is time consuming. I must be doing something wrong.
Upper right hand corner has a grid view you can click on that shows you all the photos on one page. You can click on any photo to enlarge it. So…where’s yours???
whoops, sorry, I thought you were talking about ouro’s gallery, not Ben’s. Not much help.
Lost in Utah,
based on your stories, I thought you were a dude!
LOL
So much for assumptions.
Lost in Utah
love the smile. Must say you are one tough individual to go through what you have and are.
congratulations are in order!
PS: I am not trying to hit on you! As Mc says, “I am older than dirt and twice as dusty”.
Sorry, if this is a repeat. lol
Hey Lost, I knew you thought I was a guy from your comment about…welll, um, er…you know…private parts…ROTFLMAO!!!!!!!
That’s why I hollered for Oly, she knew I was a woman. Man, that whole thing cracked me up.
I am sorry for my mistake.
I was and still am not very bright!
Live and learn. At least I am willing to do that!
lol
No, Lost, don’t apologize, that thread really did crack me up, you couldn’t write stuff like that if you tried. A comedy of errors. And your posts say au contraire on your not being bright. Besides, you can’t go wrong with a name like Lost, right?
Lost in Utah,
Right, back in the ozone again!!!
Ah,,, my Berkeley days…the 1960s-70s.
How does that line go, if you remember it, you were not part of it. Shess.., what did you say, I do not recall.
lol!!!!
Beserkley. I talked to a guy today who lived it and he said he wouldn’t trade his youth in the 60s for anything, what he can recall, anyway. LOL
He was hitchhiking, reliving it, on his way back to Colorado from San Fran. Nice guy. Under the freeway overpass staying out of the heat, right by where I go out with my dogs, stopped to say hello.
Lost in Utah,
I did the same thing in 76, /travelled on a ride from Berkeley to New Mexico. Stood on the off ramp and I was picked up by two couples (2 solders and their girl friends, what ever) from New Mexico to Ft. Stills, OK. From there I caught a ride with a trucker to Ft. Worth, Tx. Not to discuss at this time my month in Ft. Worth in the middle of winter, I eventally reached my destination, Houston Texas looking for a job. I had 200 dollars in my pocket, a back pack and a shaved head (my way to disassociate myself from Berkeley. Later, I may tell you all of my adventures in Texas.
This was 1975, the height of the oil shocks. The Bay Area had 13% unemployment. The only jobs were the Alaskan pipeline and the oil industry in Houston Tx.
I guess that is all for one night.
lost in utah,
I can be humble very easily, if you are not good looking, intelligent or street smarts. Well, I at least have an education for what its worth from a good school. It does look good on the resume, even if it doesn’t mean anything. Heck, it even has Ronald Regan’s signature. Thats got to be worth something!!!
LOL!!!
Report: Sens. Dodd, Conrad Received Favorable Loans From Countrywide
Friday, June 13, 2008
Two influential US senators got “VIP” loans from a leading subprime mortgage lender that saved them tens of thousands of dollars, it was reported Thursday.
The Democratic pols, Chris Dodd of Connecticut and Kent Conrad of North Dakota, both received the highly favorable loans under the designation “Friend of Angelo,” a reference to embattled Countrywide head Angelo Mozilo, Condé Nast Portfolio reported.
Dodd is chairman of the Senate Banking Committee, while Conrad is chairman of the Budget Committee and a member of the Finance Committee. The two senators refinanced properties through the VIP program in 2003 and 2004, the report said.
I’m shocked, Shocked, that the guy who wants to spend hundreds of billions of Taxpayer money to help houseflippers stay solvent has been receiving kickbacks from the Industry!
I would like to make a prediction, if I may-
Within the next 4 years, the US will have a single payer universal health insurance program for all American citizens. I do not believe it will make any difference who wins the WH in 08. To many persons are becoming uninsured. Private will delete this and pensions from their benefits. I suspect that businesses will push this with the govt in addition to the public.
The coverage will not be comprehensive. It will start with the basics (no million dollar surgeries or organ replacements.)
I have no horse in the race for president, since I believe at this stage, circumstances will dictate the new president’s action.
And I hate to say it, but the Clinton’s never quit. They will be on the national stage one way or another until they pass from this world.
For all you future home buyers out there who anticipate buying at the bottom of the market, DON’T
If the numbers work out to be correct, fixed assets are the last thing you want to hold unless you are willing to defend it!
The US has the most armed general public of any nation in the world. You figure it out.
“Running From Another Man’s Gun”
ray lyell & the storm
I’ve been reading up on the Frank-Dodd plan to keep housefilppers, scamsters, and get-rich-quickers solvent.
I’ve been trying to do the math. With all the latest price increases for gas, etc, I estimated that FBs would need to reduce their payments by at least $500/month to be able to “keep their homes”.
That would be an $85,000 cram-down for a $265,000 mortgage at 7% (the median price in 2006). Frank/Dodd estimates that there are 2,000,000 “at risk” people.
That means you and I will have to pay, one way or another
$170,000,000,000
minimum to finance all of this. (It’s likely to be more because I suspect the median price of an “at risk” home is higher than the median price of all sales in 2006.
F-D are going to force the banks to cram-down to “market rates”, with Taxpayers help. But what’s a market rate? The minimum it could possibly be is the minimum off the monthly payment that would allow these people to keep their homes.
I’m sure once these cram-downs go in, these people will gleefully start HELOCing again! There’s nothing in Frank-Dodd to prevent that. I guess the Democrats will tax old people some more (by raising the tax on dividends) to bail out Harry Houseflipper once again.
And there’s no provision to eliminate people who misstated their stated income (the were victims!), people more than one mortgage, or people who demonstrably should have known better (licensed R-E agents and mortgage brokers)
It stuns me that the Democrats can propose spending $170,000,000,000 to help failed investors.
I recently lost money on Ford stock. Maybe Barney Frank will bail me out of that one! And the gold I bought at $910/oz as well!
Big V,
One of my frat bros is Larry Orman from my Berkeley days. I is involved in environmental issues in the Bay Area. He Has started non-profit institute that you mightwant to get in touch with at GreenInfo Network.
Website: http://www.greeninfo.org/html/boardstaff.html
Its been about 30 years since I have talked to him, but if the past is indication of the present, he is serious about environmental issues in the Bay Area.
If its of any value, mention Pi Kappa Alpha in your message and 1973 class of UC Berkeley. You might mention is fellow frat bros-Mike Mardsen, Mike Rood, Marty Greer, Mike Murphy and Dive Jones. If that doesn’t work, you could mention that our Frat house inducted female pledges against the wishes of the national chapter. (that should give you enough ammo to attract his attention. (also mention the monkey, spike, if I recall)
I am sorry, but this is the best that I can offer.
My third attempt to post-Ben,If you areading this, let it pass through, I am not a terrorist.