It’s Really Unprecedented Historically
It’s Friday desk clearing time for this blogger. “One in four homes sold in the Twin Cities in March through June was in some stage of being repossessed, a foreclosure report out Thursday shows, up from fewer than one in 10 a year ago. The flood of listings ‘has had substantial effects on the Twin Cities housing market and doesn’t appear to be going away anytime soon,’ the Minneapolis Area Association of Realtors reported.”
“The findings jibe with the National Association of Realtors’ survey estimating that about one-third of homes on the market nationally are foreclosures or short sales. ‘It’s really unprecedented historically,’ said Walt Molony, spokesman for the national group.”
“Sean Kirschner tried for a year to sell his three-bedroom home in Montrose but got only five showings even with a price reduction. After marrying and moving in with his new wife, he’s trying Plan B — renting the house until the real estate market turns around.”
“A growing number of homeowners are doing the same thing, say those who work in real estate and with rental properties.”
“Steve Cunningham owns a house in Ramsey that he’s trying to sell. He has been renting a split-level in Maple Grove with his wife and children for $1,895 a month since deciding he wanted to live closer to work. He said he doesn’t see buying again soon.”
“‘I like the freedom of not being locked into living in one place and having the long-term financial commitment,’ he said. ‘Renting gives you lots of options for the lifestyle you want to live.’”
“Demand for housing in Hampton Roads has decreased even as a staggering jump in foreclosures has flooded the market with cheap properties. Scott and Annette, who asked that their real names not be used…remember when they bought that house in 2004, how different the market was then. ‘Houses were going like hotcakes,’ she said. ‘Everything we found, it was gone in a minute. Our other house, we sold it in one day.’”
“‘Right now, we owe more than what the house is worth,’ Annette said. ‘It seems like they are driving us into foreclosure to tell you the truth. I feel like we were fiscally responsible. I can’t help what’s happened. This is beyond our control.’”
“The Department of Public Works announced a building moratorium for Mayo on Wednesday, seeking to alleviate stress on the overtaxed sewage treatment plant that serves more than 3,000 properties in the area.”
“The moratorium came as a surprise to Karen Drott, who said she received no notice. She and her husband own a property next door to their home on Maryland Avenue, which they had hoped to sell to get out of debt. ‘I’m upset,’ she said. The moratorium ‘won’t just make [the lot] unattractive, it will make it useless.’”
“After surviving a burst in the dot-com bubble about a decade ago, Patricia Hunter is trying to weather a collapse in the real estate market. Hunter lost her job as an appraiser eight months ago and has been looking for a job ever since.”
“She and her husband, also an appraiser, bought their San Marcos home for $570,000 in 2004. As sales dropped by 20 percent to 30 percent in North County during 2007, so did the appraisals. Last December, she lost her job.”
“Now the couple are saving money in preparation for a move rather than pay for their home, which has lost thousands in value. Hunter has already started to look to rent in a cheaper market to the north. ‘Unless a miracle happens, we can’t stay here,’ Hunter said. And she does not want to buy another home in a depreciating market —- she expects prices to fall through 2010.”
“More foreclosure signs are going up around the Bay Area in places we are not used to seeing. No part of the Bay Area is now immune from the housing crisis. Foreclosures are skyrocketing in the wealthy counties of Marin and San Mateo.”
“South San Francisco’s Pedro Jimenez and his wife make $3,500 per month as restaurant workers. For two and a half years, they managed to make their $4,500 per month mortgage payments. That was until six months ago when those payments escalated to $6,000 per month.”
“Jimenez, who has five children, has not lost his home yet, but is headed that way. ‘We’re going to be struggling for the next, I don’t know, months, months. I don’t want to leave, but if they tell me to leave, what else can I do?’ says Jimenez.”
“In 2004, Cliff and Doreen Humphries bought one of 117 apartments off the plans in central Takapuna on Auckland’s North Shore. Using money from the sale of a Northland beachfront property, they paid $750,800 for the two-bedroom, ninth-floor apartment, with two car parks and sweeping views over the Hauraki Gulf. On Thursday they sold the apartment for $475,000 a loss of $275,800.”
“Doreen Humphries, 68, said she wasn’t happy with the final selling price and estimated the couple’s total loss on the apartment to be $300,000, including advertising. ‘But we can’t worry ourselves into the grave. We have to grin and bear it,’ she said.”
“Cliff Humphries, 73, said nobody liked losing that sort of money. ‘We wanted cash out of our property to enjoy life,’ he said.”
“Statistics by the Calgary Real Estate Board for July showed the average sale price of a single-family home in the city dropped 9.79 per cent compared to July 2007.”
“Laurie Hicks has had her home for sale in the northeast Mayland Heights neighbourhood for nearly three weeks. ‘For us, we honestly believe there are enough young professionals that want to be within five, 10 minutes of downtown. I believe the right buyer is going to walk in there and say, ‘You know what, nothing has to be done to this house for 10 or 15 years,’ said Hicks, who has owned the house for more than a year.”
“‘So, we are optimistic, but having said that, we need to have the right buyer,’ she said. ‘We know what we could have got last year but we were a little bit unfamiliar with what happened with the housing prices until just now.’”
“Douglas Porter, deputy chief economist with BMO Capital Markets Economics, said, ‘pricing power is in full-scale retreat across many major markets. We downplayed June’s price decline, since it was so narrowly based,’ he said. ‘However, the drop in July spread to a number of cities, including even the previously untouchable Vancouver market.’”
“Two years ago, when Bonnie Hughes, a certified financial planner in Miami, and her husband divorced, he kept their vacation house by a Tennessee lake, and she retained their main residence, a 3,000-square-foot home in Chattanooga, Tenn. He was able to sell the house at the lake; she was unable to get rid of what had been the family home.”
“‘I was planning on just selling it,’ Hughes says. ‘I had already moved to Atlanta.’ Even though the asking price is almost $100,000 lower than they had paid for it, the house in Chattanooga remains unsold at a list price of $329,000. ‘It’s in inventory with homes that are just like it,’ she says.”
“While real estate agents described the local housing market as being best for buyers, the overall market in Jackson appears to be recovering. ‘The market is stabilizing,’ said Jon Putt, partner in Five Star Real Estate Services. ‘Last year the market was over priced. The foreclosures were undercutting the rest of the market.’”
“The market is creating an opportunity for long-term home buyers, said John Orr, managing broker for Coldwell Banker Real Estate Now. ‘When you look back five years from now,’ he said, ‘there will be a lot of people who wish they had bought property, and they will be kicking themselves that they didn’t.’”
“I am always amazed how some people blame everyone but themselves for some things…It started with people wanting something they couldn’t afford, followed by real estate and escrow agents who sought huge commissions, followed by banks that looked the other way. Anyone with half an ounce of brains could see what would happen down the road. After five years of greed, selfishness, lies and tricks, here we sit, with a housing market that will be remembered as a huge blunder of human making.”
“People lost their homes, or tried not to. That meant not buying as much in the stores. This leads to employee layoffs, which leads to more people not buying anything in the stores and not being able to make their payments. Car dealers suffer, fast-food restaurants suffer, stores suffer - all creating even more layoffs. Everyone suffers, all because real estate agents, buyers, escrow offices and some banks got greedy.”
“And now real estate brokers are crying because they can’t sell anything. It’s called payback.”
“Delaware’s housing market continued to slump in the second quarter, with existing home sales plunging. Don Ash, president of the Delaware Association of Realtors, said real estate agents in the area are showing plenty of homes. But prospective buyers are being more conservative than they were a few years ago, leaving homes on the market for longer.”
“‘People are concerned about energy prices, they’re concerned about food prices,’ Ash said. ‘There’s not a lot of free money out there.’”
“The Maestro just can’t get the hang of this retirement thing. Here he is, writing op-ed pieces for the Financial Times, giving interviews to the Wall Street Journal and CNBC and adding a new chapter to his recent best-seller in what looks like a desperate attempt to buff up his legacy in the face of rather compelling evidence that . . . well, that he screwed up big time.”
“It’s been nearly a decade since Greenspan’s stock hit its all-time high with the now-famous Time magazine cover during the Asian financial crisis — the one that featured Sir Alan, Bob Rubin and Larry Summers as ‘The Committee to Save the World.’”
“What’s so remarkable is how Greenspan can spin out his analysis without mentioning his own role in the creation of the massive housing and credit bubbles.”
“Reading or listening to him, you’d never know this was the Fed chairman who kept interest rates too low for too long, who denied that there was a housing bubble until it burst and who refused to use the powers given to the Fed by Congress to prevent abusive practices by mortgage lenders and brokers.”
“What’s surprising in Sir Alan’s latest musings is not that they are intellectually dishonest or disingenuous — we’ve seen that before. No, what’s striking is that, coming from somebody who has seen so much over so many years, they are singularly unwise.”
“‘Live Richly.’ That catchy slogan, dreamed up by the Fallon Worldwide advertising agency, was pitched in 1999 to executives at Citicorp who were looking for a way to lure Americans to financial products like home equity loans. But some in the room did not like it. They worried the phrase would encourage people to live exorbitantly, says Stephen A. Cone, a top Citi marketer at the time.”
“Still, ‘Live Richly’ won out. The advertising campaign, which cost some $1 billion from 2001 to 2006, urged people to lighten up about money and helped persuade hundreds of thousands of Citi customers to take out home equity loans - that is, to borrow against their homes. As one of the ads proclaimed: ‘There’s got to be at least $25,000 hidden in your house. We can help you find it.’”
“Since the early 1980s, the value of home equity loans outstanding has ballooned to more than $1 trillion from $1 billion, and nearly a quarter of Americans with first mortgages have them. What has been a highly lucrative business for banks has become a disaster for many borrowers, who are falling behind on their payments at near record levels and could lose their homes.”
“None of this would have been possible without a conscious effort by lenders, who have spent billions of dollars in advertising to change the language of home loans and with it Americans’ attitudes toward debt.”
“‘Calling it a ’second mortgage,’ that’s like hocking your house,’ said Pei-Yuan Chia, a former vice chairman at Citicorp who oversaw the bank’s consumer business in the 1980s and 1990s. ‘But call it ‘equity access,’ and it sounds more innocent.’”
“Ads for banks and their home equity loans often portrayed borrowing against the roof over your head as an act of empowerment and entitlement. An ad in 2002 from Fleet, now a part of Bank of America, asked, ‘Is your mortgage squeezing your wallet? Squeeze back.’ Another Fleet ad said: ‘The smartest place to borrow? Your place.’”
“One in 2006 from PNC Bank pictured a wheelbarrow and the line, the ‘easiest way to haul money out of your house.’”
“In 2003, one from Citigroup said a home could be ‘the ticket’ to whatever ‘your heart desires.’ It continued: ‘You’ve put a lot of work into your home. Isn’t it time for your home to return the favor?’”
“In 2004, Banco Popular said in its ‘Make Dreams Happen” ads: ‘Need Cash? Use Your Home.’ ‘Seize your someday,’ a Wells Fargo ad advised in 2007.”
“Little by little, millions of Americans surrendered equity in their homes in recent years as home prices seemed to rise inexorably from one peak to the next. As a result, the United States has become a nation of half-home owners. For the first time since World War II, the portion of home value that Americans own has fallen to less than 50 percent. In the 1980s, that figure was 70 percent.”
“Citibank’s home equity ads portrayed housing as a revolving account similar to the plastic card in your wallet. One in the mid-’80s, for example, bragged: ‘Now, when the value of your home goes up, you can take credit for it.’”
“Banks thought they were in safe territory. A Merrill Lynch executive, Thomas E. Capasse, told The New York Times in 1988 that home equity loans were safe because bankers believed that consumers would spend the money on wise investments and not ‘pledge the house to buy a blouse.’”
“Mr. Capasse worked in the bank’s division that was repackaging mortgage loans into bundles of loans to resell to investors, a practice that enabled lenders to make even more loans. In 1993, Mr. Appezzato helped come up with the pitch line ‘less than perfect credit,’ a phrase he said was meant to refer to people whose credit was only slightly problematic.”
“But by the late 1990s, the phrase was co-opted by subprime lenders like Countrywide Financial, Washington Mutual, New Century and Ameriquest.”
“Ameriquest ran an ad in 2004 during the Super Bowl, one of the biggest advertising events of the year, that has come to symbolize the excesses of subprime lending. The ad showed a woman on an airplane climbing over the man sitting next to her to reach the aisle. The plane’s lights go off during turbulence and the woman slips, landing on the man’s lap. Other passengers gasp because it looks as if they were in a sexual embrace.”
“‘Don’t Judge Too Quickly,’ the ad said. ‘We Won’t.’ Two and a half years later, Ameriquest went bankrupt.’”
The slope is certainly getting slippery. I’d like to remind any of the media or government that may be reading here that this isn’t a crisis. The real problem was housing prices going through the roof, and now we see the inevitable fallout. So some of us are rolling up our sleeves and starting to sort out this mess. As for me, I gotta get ready for an auction.
My thanks to those who support this blog and the forum. Please check back this weekend!
The slope is GETTING slippery? Oh, come now…
The slope is getting steeper.
Ben,
Well said. Anyone going downhill on drugs and/or alcohol probably feels like they’re having the time of their lives! Of course they’re scaring the living hell out of the rest of us but we’re still in the first week of re-hab.
We’re getting ‘better’.
“The slope is certainly getting slippery.”
For sure, and there is nothing below us except a mountain of fresh REIC and MSM ….Bull$hit.
I can say that …can’t Ben ?
As long as we are in historical retrospective mode, I am posting an outstanding Washington Post piece here in case we missed it last fall:
The Real Causes of the Financial Storm
By David Ignatius
Sunday, September 2, 2007; Page B07
…
People looking at this crisis in isolation expressed relief that the Fed bailout seemed to have worked. But I find greater cause for worry. What we are seeing is a financial addiction — to ever-more exotic classes of high-yielding assets to tempt global investors and then to the Fed’s infusion of liquidity to keep the system from self-destruction. The financial world, you might say, is addicted both to the heroin of high yields and the methadone of the Fed’s rehab program.
Professor Bear,
That’s why I’m in favor of the temporary suspension of ALL state and multi-state lotteries! No more “Powerball” or Mega-Millions! No more Sports Action or Daily Double.
Welcome to the NEW National House Lottery! Scratch tickets for 1,3 and 5 year prizes of living “rent free” OR!!! play the big drawing for your shot at a free house of your choosing!
The states can kiss Uncle Sugar’s rosie pink behind and be grateful Sacramento isn’t infested with abandoned “mosquito farms” and give scratch ticket winners the option to buy the home ( at a deep discount ) and actually start paying property taxes! That and it weens the states off of the tax on the poor.
“South San Francisco’s Pedro Jimenez and his wife make $3,500 per month as restaurant workers. For two and a half years, they managed to make their $4,500 per month mortgage payments. That was until six months ago when those payments escalated to $6,000 per month.”
Exactly how did this couple make $4,500/mo payments for 2-1/2 years with $3,500/mo income? And now it is a crisis at $6,000/mo?
This reporter failed to ask some easy questions.
RE: Exactly how did this couple make $4,500/mo payments for 2-1/2 years with $3,500/mo income?
The unreported income from the tip jar.
However, all those high tipping RE investor types, celebrating their $200k cash out refi on some run-down POS 2-unit have all split the scene, leaving Jimenez rather short on income this year.
hd74man,
After about 2,000 SSOTW ( sob stories of the week ) I wonder if we haven’t been too hard on some of the reporters? I know from years of cold calling ( yeah, I know, popular huh? ) that Americans would rather talk about being sexually inadequate than discuss there finances in a frank manner.
It’s got to be hard to ‘draw’ these people out. The only way I can see that happening is for the reporter to say “This is your chance to tell YOUR side of the story” ( just in an effort to get them to say anything ) As to why they don’t ask the obvious follow up questions… I can’t say for sure? I suppose after getting FB’s to make total clowns of themselves nationwide ( but more importantly l-o-c-a-l-l-y ) one probing question too many and the FB can always just say “Get out of MY house ( for the next 72 hours anyway ) and this interview never happened!”
The reporter can’t come back empty-handed so they take what they can get. You know we always give the FB a pretty dumbed down portrayal but my guess is as “sophisticated debtors” a lot of them can be pretty wiley.
Come back empty-handed and editors don’t think you were resourceful or tough enough. So you can be stuck writing 400 words based on two quotations from a source. More sources, better story.
Kind of OT: Gannett today announced plans to lay off 1,000, following recent news that flagship USA Today ads were collapsing, believe 25 percent compared to similar quarter last year.
No advertising money, no newspapers.
Simple as that.
Very true.
milkcrate,
I have to agree. One common thread ALL FB’s share is a selective memory. I’ve yet to see one that could directly into to the camera. It’s always about the bank failed to do this and the lender failed to do that and mind you, a lot of these people haven’t even seen their reset yet?
Very cunning that lot. So the reporter can come back with half-truths and lies or… nothing.
I don’t buy it. Are they reporters or tape recorders? So, they have to work to get the story, work to get the truth. It’s their job to interview sources and thus they should learn the techniques that work under different circumstances. If they can’t figure out how to ask questions to get at the real answers, then they’re in the wrong job. We didn’t free the press just to give them a free pass to run around town taking notes uncritically.
IAT
They gave the buyer cash back to buy the house ,that’s how they made the payments.
I will bet they do what neighbors in my parents street do - rent out 2 rooms + garage to borders.
I wonder if said borders self deported back to Mexico.
When we were in New Zealand 6 months ago for a month’s vacation, the real estate market there had already come to a grinding halt, but prices hadn’t fallen yet, but look @ the Cliff divers now?
________________________________________
“In 2004, Cliff and Doreen Humphries bought one of 117 apartments off the plans in central Takapuna on Auckland’s North Shore. Using money from the sale of a Northland beachfront property, they paid $750,800 for the two-bedroom, ninth-floor apartment, with two car parks and sweeping views over the Hauraki Gulf. On Thursday they sold the apartment for $475,000 a loss of $275,800.”
That would suck. Every time I think of the worst investment I ever made, I just turn my mind to the FBs of the world, and then I feel so much better.
My worst financial investments came from the intoxicating dot bomb era (or just prior). Why, it was the best time to buy, they weren’t making any more garden.coms or Global Crossings, and I might have been priced out forever. I got stung and learned. I had bought some of the dips, a strategy that once worked, until the charts fell so low they haunted me, chanting, “Yes, 5 can fall to .20.”
The housing runup must have been caused in part by the same sort of, well, lustful yearning for easy riches.Someone else mentioned it and it is true: I don’t think too many people whose parents went through the Depression would ever use a house as an ATM, and I dare say they probably would run away from anyone who talked about “negative amortization.”
I think Baby Boomers (whose parents went through the Depression) have partipated in this heartily. It worries me to think of their retirements.
For the most part, Baby Boomers’ parents were small children during the depths of the Depression. My parents were married in 1934 and had a clearer idea of what the Depression was about. I do think the parents who blathered endlessly about the Depression produced children who are cautious financially. I have a boomer friend (age 57) who happened to have an elder sibling and kind of Old parents, and she’s the most cautious spender I know.
…and in a few years the sucker that just bought for $475K it will sell it for even less.
I just returned from 3 1/2 weeks in New Zealand, on Tuesday. We stayed a week with friends in Aucklands north shore, beautiful home with full harbor view. My friend told us that during the Americas cup they rented their home to a Prada executive for $9,000/mo. for six months. They moved out and profited 40 grand. The next day he told me his home was worth 2.5 million minimum. I didn’t challenge him on it, but the figures don’t add up. 9 grand a month, during the frenzied times of the America’s cup, would probably fetch $5,000/mo. long term. I love the country and we have family and friends there, but I still cannot understand the economics of living there.
BTW, his property taxes are $5,000/yr. On long Island it would be 8 times that much.
The economics of living here are simple: you live a life with much less consumption than most people from the States willingly accept. It helps to have inherited some family property, and it helps even more if you are a migrant bringing over a pile of real money (ie, not NZ$).
The delusions related to property values are particularly strong here because ‘real estate always goes up’. (That’s been true for many years, actually, and during that same time investing in shares has been an efficient way to lose money.) Preferential tax treatment of property investments has contributed too.
One thing I am impressed with, however, is the attitude of the couple: take the loss, don’t blame the bank or the government, and move on with life. This is a older couple that just took a $275,800 bath… I think in the US we would be getting a tear-jerking story about how someone took advantage of this couple and how they will now be facing some unbearable hardship. Just seems kind of refreshing to see a story that doesn’t try to find a villainous or virtuous angle in what is basically a real estate gamble gone bad.
That was really quite a bath for that elderly couple.
That old cooked frog analogy might not be acurate but we still have a lot of happy American frogs splashing around in the bathtub(pot), unaware of the intensity of that impending rolling boil.
The are going to be a lot of expensive, used and abused, little COOKED frog stories around here too
“‘I like the freedom of not being locked into living in one place and having the long-term financial commitment,’ he said. ‘Renting gives you lots of options for the lifestyle you want to live.’”
This point is absolutely key, and it is why many Americans would be better off renting than buying regardless of home prices.
If you don’t work for some type of government entity, you have zero job security. In most workplaces, employees are treated much like machines–they are tools to be used and discarded as needed. The ability to be mobile for work–either to get a better job or to get a job after a layoff–will be critical in the next few years.
Keep the popcorn popping,
Red Baron
RE: If you don’t work for some type of government entity, you have zero job security.
Mazzlanders are sick and tired of this charade as demonstrated with their state income tax repeal initiative.
“In most workplaces, employees are treated much like machines–they are tools to be used and discarded as needed.”
Thank you for that even-handed assessment, Mr. Marx. Or is it Engels? Maybe if we “workers of the world unite” we can break free of these awful shackles. Geez.
I thought I overstated things at times but compared to this I am Mister Objectivity. Maybe that line I use about a dozen inches isn’t so far off, after all.
But it’s really true, when there are so many people around the world who are happy to work for less.
Okay. I agree. We are all victims. You are right. I need to go now. The boss is getting ready for my 5 o’clock flogging. I hate to keep him waiting.
No, NYCityBoy, my point is not to ask for you to grant me victimhood status. My point is to make sure that people can talk about this honestly and to encourage people not to vote for representatives who would encourage more of the same. That’s why “victims” should always try to have the courage to speak out. To solve a problem. For the future.
What problem are we talking about? Is it the ability to freely move from job to job? What are you speaking out about?
I have been a wage slave all my life. Every year, at all my jobs, I hear people complain about their raises. It is always the same group, no matter where you are. They are the ones that come in late, leave as early as possible and do as little as possible. But of course this is not their fault. They are victims of “the man”. And god forbid you ever ask them to learn something new. “We’ve always done it this way.”
Maybe the problem is not who we are voting for but the victimhood mentality that is guiding for whom so many Americans vote.
No, NYCityBoy, I am talking about people being replaced by workers in places such as Singapore and Costa Rica. We can’t even eat on the salaries that those people earn.
Asian rates of pay in China are 40 Cents an hour, almost 20 times less than what our minimum wage is here in California…
Chew on that awhile.
Outside government, job insecurity is a fact. Having said that, I don’t consider this an anti-Capitalist stance at all. Nothing to fear from the original poster, NYCityBoy.
The information age is part of the reason why we are confronted with change at an ever faster rate. Freer world trade is inevitable. Freer societies too.
Salaries here will continue to fall with inflation for the next few years until we get wage parity with the Chinese and Indians.
Within one generation from now we spoiled Americans will wake up from our ostrich approach and discover that Asians will have a much higher standard of living, more material wealth, and so forth, and we will start cracking - that is, start to produce instead of play video games. Maybe we will have GDPs of 6% or more per year when we wake up.
I have about 9 or 10 more weeks left of a job, and so in 4 weeks I will start looking for another engineering gig. Do I blame China? No. India? No. Free Trade? No. GWB? No. I love to be looking for work. Negotiating for an hourly rate is always the most fun. And the idea of moving to another place is also exciting.
Very few people my age (49) and older are willing to embrace change like me.
Asian rates of pay in China are 40 Cents an hour, almost 20 times less than what our minimum wage is here in California…
Private, Those figures are so 2005
“Averages Wages at 98 Cents Per Hour
- February 25, 2008 -
According to the census in 2004, China had a little over 80 million hourly manufacturing employees working in established enterprises (excluding home-based and very small sites). Of that total, 56.7 million were employees of manufacturing concerns “of designated size and above,” defined as all state-owned enterprises plus non-state-owned enterprises that had sales of 5 million yuan or more.”
Some industries such as WalMart and McDonalds are now unionized and have higher wages. And as opposed to the US with its negative savings rate, China is running a 34% savings rate. They live within their means.
“Wage parity with India and China” will not happen. We have built a higher standard of living in this country through the implementation and execution of a sound socio-political system. They haven’t. We initiated free trade because we wanted to be able to buy cheap stuff. Now that the consequences are being felt, we can/should make Congress bring back that old protectionism that worked so well for us way back when.
China is a communist nation, and India needs to get over its egotistical “old ways”. I see no reason for us to sacrifice ourselves for them.
The only person that one can blame for being outsourced or replaced is themselves, to be honest. I’m not saying that our government has a fair trade policy, nor do I think that they should ever reward companies that outsource, but…
…you are ultimately the CEO of your own company. If you choose a profession for yourself that offers no clear advantage over a machine, or someone thousands of miles away that speaks broken or no English (and will work for 1/10th the money), well now…that wasn’t the best choice now, was it?
Remember John McCain’s speech in Detroit to the UAW where he said quite frankly “the jobs aren’t coming back”? He was doing them a FAVOR.
“Wage parity with India and China” will not happen.
Wow. Just wow. I don’t know if that is pride or reason talking. When China starts selling more cars in the U.S. then so-called american companies, we’ll see if your statement stays true. Besides wage parity, would you also include intellectual parity? Heaven forbid if the yuan freely floats here in the near future…
OK, I’ll fight with all of you over this:
If I insist on being paid ENOUGH TO EAT, then I should be fired? People with advanced degrees in the US are being replaced by people with supposedly equivalent degrees in extremely poor countries, and the quality of products in general is also suffering for that. That cannot be fought on an individual level, you must take the responsibility of forcing your government to fight it at the Federal level. It is your job as a free citizen to stand up for yourself through voting.
See, that’s the difference between our nation and many others. I have said this many times. Our system is designed to absorb criticism from all angles and change for the betterment of all. If you are going to have the attitude that we should all just grin and bear it, or that it is inevitable that our great and free nation should be surplanted by a bunch of bozos who can’t even handle a free press, then I invite you to leave this place and go there. Otherwise, get to work and put all this corporate white-washed “competition” out to pasture, for the good of your kids if not yourself. China and its ilk can work for itself.
supplanted
and whatever other typos are in there
I have the fix for all of this. STOP SHOPPING @ WAL-MART.
Don’t we all just love an oversimplified answer?
One thing to remember is that in these devloping countries a loaf of bread is not the equivalent of US $5, as it is here. It is cheaper because it was produced locally (go small organic farmer!)and does not come in a plastic bag, in another plastic bag. Have you seen the e-mail circulating that shows what the average family size is in countries and what food they have as a week’s supply? The USA has a ton of food which is ALL packaged in cardboard and plastic that is in a rainbow of colors. The cardboard and plastic/ink cost more than the product inside!
You can kick and scream all you want, but our wages will remain stagnant, while their’s will increase. Its happening as we speak.
Well with the exception of two dozen pairs of underwear and socks per year and an occasional razor that is usually 30-40% less then other stores…that is my extent of wally shopping….
————————————————
I have the fix for all of this. STOP SHOPPING @ WAL-MART.
Big V, you cannot insist on being paid enough to buy your food, unless what you produce really has a value (in other people’s eyes) that equals the value of the food. If you can produce actual food, so much the better. If not, no kind of political action BS is going to get you a living wage. The whole “living wage” biz is BS too, of course. Legislate higher wages, guarantee higher unemployment.
Protectionism is also counterproductive. It just guarantees you will overpay for cars, clothes, etc, etc…you will pay a less efficient producer to go on being inefficient.
Protectionism is also counterproductive.
Oh, yes, I long for the days when corporate monopolies filled this great nation of ours.
Once the Chinese own every corporation in the land, we will indeed, be much better off.
From watching the Olympics on TV, it doesn’t appear that Communism is all that bad.
I really can’t believe what I’m seeing on these posts . Big V, I agree with you . This world labor force is killing jobs for people who live in America and the standard of living is falling in America because of this .
Who ever said that we have to compete with a 1 dollar a hour slave worker in Communist China ? We can go back to the old ways of doing things ,like producing again and protecting jobs for Americans . Who ever said the highest and most noble goal is to produce a product the cheapest . Sometimes the providing of jobs for a Country makes more sense than getting a Corporation more profits .
This is really silly isn’t it . Some would argue that the way of the World these days is that the lowest bidder slave labor produces everything ,yet Americans have to compete . Tell me ,how are the Americans going to compete ……by going over to foreign Countries and applying for jobs ? Oh ,I got it ,Americans compete by the government lowering the min. wages ,so American Corporations can finally hire Americans because they will finally work for a dollar a hour . Lets get serious here .
You don’t uplift a Country by lowing its wages . Why doesn’t the Chinese worker demand American wages ? Oh,guess that
doesn’t happen in a communist Country very often . Better yet , why doesn’t China produce for it’s own people and give them enough wages to buy all the cheap crap they send to America?
I don’t think it’s fair to say that America doesn’t produce ,because it has in the past . When you set up a situation of a
monopoly of cheap foreign goods ,you have taken away Americans ability to do anything but sell real estate to each other . You say Americans must produce ,yet all the factories are taken away and moved to foreign countries ,so in effect Americans can’t produce . Oh,I guess getting a sales job at WalMart is going to sustain Americans .
Do people really think that you can compare the USA with a Country that doesn’t have the same quality protections .I think that we would be appalled if we saw the truth of how dirty and toxic the conditions are in these Countries that don’t have the same rules of the game .Do people really think that in spite of the cost of living being much higher in the USA ,we should compete with Countries in which the costs of living is actually lower . People can live in China monthly for what it cost to pay just the utilities in a one bedroom apartment
in the USA. It’s absurd to say different countries have to compete with each other ,when the costs to live are different in the different countries .
I think the real question should be …..How did the American Corporations think the Americans were going to survive with no jobs and end up not having any money to buy the products that the Corporations peddled to Americans ,who use to use
equity money from real estate to purchase ?
Well said, Wiz!!!!
And I agree 100% with you and Big V.
There is nothing wrong with fair trade (the countries most capable of manufacturing goods for less money — but of equal quality and with the same QOL for their workers — get the business ).
I fail to see how a $50 vacuum cleaner that needs to be replaced every 2 years is better than a $500 vacuum cleaner that lasts 30 years. We have gotten cheaper goods because they don’t last as long and are often defective and toxic — they are of lesser quality and fill up our landfills more quickly. How in the world is that better for anybody?
Let the wage slaves in other countries ask for wages, benefits and safety standards that are comparable to ours.
The America Society has been in a Greed Race to the bottom for immedite gratification and PROFIT FIRST for years. The days of a honest day’s work for a honest day’s pay and a quality product for a fair price DON’T even apply at Disneyworld anymore. You get what you pay for and the American worker helped create, bought into and paid for his own Discount Screwing
The US Taxpayers have paid taxes their entire adult lifetimes to see a lot of it wasted, stolen and pissed away.
Not a lot of “Quality Control” there except for the Crooks.
You know that story and what we have got to show for it.
Corporations and Investors have totally “bottomed lined” their workers, products and even their companies themselves for the balance sheet.
Joe6p and wife, well, you know all of the economic stories between the Wal-Mart, dot com’s, the suv’s, housing crazies “.
And Joe just thought all of those management engineers with their silly production survey’s, temperary pay incentives and time and motion studies were just a joke…until they shipped his plant to China or production labels to distinations “unknown”.
The US Cradle to the Grave jobs and Security have taken their places with the the Dodo bird and the Carrier Pigeon in History. It’s every hungry dog for himself now….and THAT’s JUST HOW the New Interests in American Businesses …want IT.
When it WORKS for them…It’s called “Competition”
Thanks Ca renter,I wish I added what you said .
You know mikey ,you do a good job of stating the state of affairs these days ,but it doesn’t mean that the USA can’t change the course they took .
Accepting the reality that businesses use their employees as tools as discard them when not needed is not “being a victim”. Unfortunately, its just realistic. I have seen it way too many times. They care more about the shareholders and the bottom line than employees. It doesn’t matter how long someone has been there or how good a job they are doing. If it will make someone above you look better to have less people around or to reorganize, they will do it. I agree, there is no job security.
Yeah, I thought this was amazing to see in the MSM… This is the first time I’ve seen them highlight the advantages of renting in this day and age (as outlined here for years).
I totally agree about the fact that there is no job security. I just became part of the active workforce in the semiconductor field, and it’s scary to see people go left and right. Late last year, my company got bought out, and 20 people in my floor were let go overnight. The guys to my left, right and across were let go. In my row, we went from 12 to 5 engineers.
During one conversation, almost every engineer on the floor admitted being laid off at least once during their career. It’s ‘normal’ to be laid off at some point or another. It seems companies could care less about their workers.
Specially, my manager had just moved from California to Texas with his family a few months ago, and he was let go. The guy had just bought a property, and he was left with no income to pay for his mortage. Since he is in his late 50s, it became very difficult for him to get an new position immediately since he’s so close to be elegible to retire.
It scares me to death to think about buying a house. There are too many ‘what ifs’: what if i get laid off? what if i have to move? what if? what if?
I would really like to buy a property and enjoy it, but I dont feel like I have any job security even though people around me tell me not to worry about it.
And people wonder why workers are not giving their best anymore
when they know that the Corporations don’t care anymore about having long term workers they have some loyalty to .
The most productive system of labor would be to enslave people in chains and make them work 16 hours a day ,until they drop, and than replace them with another slave .So, you really can’t say that the highest objective should be what is the cheapest method to produce a product . What Country would be stupid enough to give away it manufacturing and job base ,just to get a little better profit margin from the lower bidder wage force from around the world .
If you work for yourself, you don’t have a lot of “job security” either. In fact, you’re almost a perpetual jobhunter. It’s called “hustling business,” “finding the next gig,” or words to that effect.
All the more reason to keep your business and personal overhead low. Which means that if you’re going to be a homeowner, you buy LESS house than you can afford.
Now, ’scuse me. I have to go do some of the paying work that I was just alluding to.
Yep! Live simply until you build up such an enormous amount of savings that you can live without a job. Once you’re at that point you are independently middle class.
“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”
- Benjamin Franklin
I love my freedom. This lack of job security is tough but it toughens me in return. The crybabies can leave on the next plane to North Korea!
“Yep! Live simply until you build up such an enormous amount of savings that you can live without a job.”
There you go! Save until the after-tax income generated from your savings/investments exceeds the amount of money you spend. At that point you are financially independent.
Well, I’d have thought so. But, so many people thought so, that there are now too many people trying to live on the money generated by their investments, and not enough people producing the actual goods and services that the infestors (me included) would like to consume. So the currencies are all depreciating.
Well, I’d have thought so. But, so many people thought so, that there are now too many people trying to live on the money generated by their investments, and not enough people producing the actual goods and services that the infestors (me included) would like to consume.
—————————
Bingo!!
And THIS is why we are seeing rampant speculation. Why the hell would anybody have a **real** job when there is so much animosity from those who detest people making a living wage.
Might as well become a hedge fund manager. They’re certainly productive and deserve all their “hard-earned” wealth! To heck with taxing them…why, that would be theft! (sarcasm)
I doubt if there are enough financially independent middle class folks on this planet to stop being producers. For instance, the people in their 20s and 30s are less likely to be independent than older people. Scott Burns, the financial columnist, suggests 50% in US government securities such as T-Bills and 50% in some index fund. Vanguard has a global fund with 1100 stocks in it and an expense ratio of 0.26 and 40% of the fund is the U.S.
Furthermore, becoming independently middle class does not mean that you will never turn your hobby into a profitable business. You will be able to make money in something you want to do at the hours or days you want.
2 CEO’s ago, the ceo at the time referred to us, the employees at this company as…”we have had 2,000 units of attrition”…
UNITS.
Yea, I have a ‘unit’ for ya, right h’ya pal.
Right in the ‘kisser’. To the moon, kapow.
Overall ,lack of job security is not really a good thing for the majority of people and It really doesn’t foster Company loyalty or Employee loyalty .I know this lack of job security is becoming the way it is these days ,but I don’t think it’s a very good thing .
Look, I agree with everyone that a worker should be fired if they are nothing but dead weight to a Company ,but workers need some
security and incentives to give the best they can for a Company . I ran into a young worker today that said to me that he liked his new job because the Company he now worked for treated the employees
good compared to the last Company he worked for . He went on to say that he felt like giving his best and he worked harder . I also noticed that the employees of that store were really nice and helpful .
Apparently that Company has profit sharing also . i found myself drawn to going back to that store because of the upbeat attitude .
“Thank you for that even-handed assessment, Mr. Marx. Or is it Engels? Maybe if we “workers of the world unite” we can break free of these awful shackles. Geez.”
I’m puzzled by this comment. I’m not sure how it was drawn out of what I posted.
I was merely encouraging people to be flexible to adapt to reality–I wasn’t calling for a revolution. If you don’t think American employees are treated much like interchangeable machine parts, I’m not sure what planet you’ve been inhabiting. What’s more, such treatment is not limited to just those in low-skill jobs, as one previous post suggested–those in high-skill jobs are treated much the same.
One previous post hit the nail on the head–you are the CEO of your own corporation, whether you are self-employed or work for W-2 wages. Far from embracing socialism, I believe people need to think like business owners. Being self-employed–and not relying on one or two clients for most of your business–is one of the best ways to adapt to the current labor market. Another way is to work multiple jobs.
Renting is a key part of being able to adapt to reality. It will be more important for many people to be mobile for their jobs than to take advantage of whatever “bargains” exist on homes.
Keep the popcorn popping,
Red Baron
I was puzzled, too, Red Baron. I think this is a very, very, very sad train of thought here. I thought we were interested in personal reponsibility and well-managed capitalist system, not a race to the bottom.
By the way, eradicating the middle class (ie having everyone compete for .40/hour jobs) was Marx’s big, great hope because a large satisfied middle class won’t revolt, or join forces with the poor. The guy’s beard is probably twirling in his grave right now with glee. I can’t believe anyone would cheer this on, it’s silly.
hjALmar Greenspan?
“What’s surprising in Sir Alan’s latest musings is not that they are intellectually dishonest or disingenuous — we’ve seen that before. No, what’s striking is that, coming from somebody who has seen so much over so many years, they are singularly unwise.”
http://en.wikipedia.org/wiki/Hjalmar_Schacht
‘When you look back five years from now,’ he said, ‘there will be a lot of people who wish they had bought property, and they will be kicking themselves that they didn’t.’”
I see the Realtards still love using the old “kicking themselves” line.
‘there will be a lot of people who wish they hadn’t bought property, and they will be kicking themselves that they did
n’t.’”Realtwhores in San Diego are still trying to convince renters they are throwing away money.
5 years from now is 2013. I’m thinking buy time will have hit by then. The unrealtoRs are just setting themselves up to be perennially “right”, with the advantage of a cherry-picked archive of statements.
The big drops will end some time in 2009 or 2010 depending on where you are. After that? Who knows. The days of easy money and zero down are gone forever. That means in the future houses will actually have to be finanaced from what people earn. Lots of folks making lots of money = housing prices going up. Everybody being broke = housing prices going down. So after 2009 it depends on the economy where real estate prices are going.
Did anyone ever ask this guy when he learned to predict the future? Say buddy, how many runs will the Reds/Cards score tonight? Unbelievable, this @sshole.
I blow a head gasket when I hear the moronic comments of REalScum like this jerk. I hope to meet one of these asswipes in person. Then we’ll see if they’ll put their money where their mouth is.
I hope someone in Jackson cuts out the clipping containing this quote and throws it in a vault. Then, in 5 years, take it out and pin the quote to the tip of a hand tuned JT. Then, …..well,…… I don’t think I need to explain to you Jacksonites what to do from there.
he’s trying Plan B — renting the house until the real estate market turns around.”
“A growing number of homeowners are doing the same thing, say those who work in real estate and with rental properties.”
This thing is going to take years more to hit bottom.
and on that note…here’s an Economist article re. option arm resets — or, as the article states, “A ticking time bomb.”
http://tinyurl.com/5smbyj
That will mean Ben will be revving up his helicopter again the next few years. The peak adjustments are 2011 and 2012 in option ARMs.
I still think there will be several Southern California ocean view houses with prices in the $250,000 to $300,000 range when this thing bottoms. I’d wait a year or two until the riff raff clears out of the last of those places. That is, 2013 to 2014.
Live simply, earn a lot of $ at work, squirrel it away, and rent until then.
This set of option ARMs resets, mostly in California, will bring on another big wave of financial celebrities saying “no one saw this coming.” They will be saying that in mid 2011.
But on Ben Jones’ blog, we know better. We saw it coming. Thanks for the post of that Economist article.
I’d like to see gold drop to $700 per ounce so that I can switch from buying US securities to gold again, because I think the drunken sailors in our government will cause inflation to go ballistic. $2000 per ounce of gold spot price after that. Aladinsane will probably be right.
Right , gold or oil could very well go back up again . But,I find it hard to predict what is going to happen with unknown factors
still up in the air .
“The gold market has been taking a closer look at investor demand for gold coins in light of the lower prices for the precious metals. The U.S. Mint has seen such an increased investor demand for the one-ounce Gold American Eagles and the one-ounce Gold American Buffalos that it has “halted sales due to lack of inventory,” said David Beahm, a vice president at Blanchard & Co. So far, “the physical demand from U.S. investors has not had a huge impact on the price of gold, however, this is about where we saw the market bottom last year, in terms of timeframe, and then it was on to $1,000,” Beahm said.”
Note: This is NOT on the US Mint press releases….strange.
Pent up supply, baby; pent up supply.
I know a lot of people are “waiting it out,” but seriously, have any of them really considered the implications of what they’re waiting for? Home values never would have skyrocketed if banks weren’t throwing money at everyone who could sign their name to a document. I’m expecting some major consequences to hit banks and the economy as a whole in the next few years. Meanwhile these people are sitting on their overpriced homes, confident that the banks are going to start throwing money around again.
Well, I understand the mentality. It’s kind of like when I bought HealthSouth stock on a little rally, and held on despite the article in Marketwatch warning of a Fed raid. You hear the warnings, but you think “Hey it’s going up now, and look how much it used to be worth.” That was a hard lesson. :o(
‘It’s really unprecedented historically,’ said Walt Molony, spokesman for the national group.”
I wish more people would read. During the Great Depression it broke 50%+ of the homes were foreclosures. IIRC, 1931 was the peak (was it 2/3rds? I’m asking as I do not have my copy of “The Hungry Years” in front of me).
Its been worse. This isn’t unprecedented. It annoys me that the NAR resets their data methods every couple of decades and forgets that there is good data before then! Look how far back Case-Shiller goes!
Got Popcorn?
Neil
“The findings jibe with the National Association of Realtors’ survey estimating that about one-third of homes on the market nationally are foreclosures or short sales. ‘It’s really unprecedented historically,’ said Walt Molony, spokesman for the national group.”
Given their ignorance of recent history, there’s little hope they’d understand what happened 75 years ago. It’s much easier to say this has never happened than to acknowledge it has and what that means now.
What’s with this popcorn stuff? Do you enjoy million of Americans being thrown out onto the street as you view in luxury?
New here?
Yay!…we haved a LIVE one
Here we go again…
I can’t speak for Neil, but I haven’t seen anyone thrown out on the street. FB who are foreclosed upon are then given the opportunity to rent something. No problemo. I don’t see why an irresponsible housedebtor who fails to pay his mortgage should be considered above renting, whereas the rest of us should be naturally expected to pay rent (to some FB, no less) for the rest of our lives. Makes no sense. If you can’t pay the mortgage, you have to move somewhere more affordable.
I saw someone thrown out “on the street” back in the late 1980s. She deserved it. She was a renter and stopped paying rent. She also beat her 12 year old daughter.
I’m no hand-wringing liberal. Reality is cruel to those only who deny it.
TROLL ALERT!!!!!
“What’s with this popcorn stuff? Do you enjoy million of Americans being thrown out onto the street as you view in luxury?”
Thrown out in the streets, for what, not paying their own living expenses like adults are expected to do? Well, dumba$$, you pay their way. Until you are willing to do that, STFU.
I live in a van down by the river, and I hear the stories of the “throw outs” as they come to join me under the stars.
I always get a kick out of their sad-sack tales of champagne tastes on tap water budgets.
Then I pass them a campfire-grilled pigeon wing and say “Welcome to reality”!
az_owner,
LOL! To be truthful I act—ually have champagne tastes as well! ( I go down to “Grocery Outlet” and get the 2 for $6 specials that ‘used’ to be on Costco’s shelves )
Dammit, DinOR, don’t tell anybody else about the GO! It’s my favorite place. (There might be something wrong with me.)
Around here the Cash & Carry stores (Smart & Final in CA) sometimes have bargains, but you have to know your prices. When a 50 lb sack of really good onions is only $5 that’s a steal. Today it’s $11 - still 23 cents a pound but no longer a steal.
I stopped buying meat at Costco. I can get “near to expiration date” USDA choice tri-tip steaks for about $3.80 a pound at Pauls or Fred Meyer. Both also have bakery bargains.
Roadside stands here have local corn $3 a dozen.
Buy your spices in the “Mexican” isle in celophane bags, and refill your fancy Spice Islands bottles with them. You are paying about $3 for the bottle.
I prefer Chateau Skid Row. It’s good out of a bag.
Do you enjoy million of Americans being thrown out onto the street as you view in luxury?
let me think…yah, yah I do. I tease kittens, too, God help me.
Neil, however, just likes popcorn. Don’t get him started on the microwave stuff, he’s a purist. Stove-top only, baby.
“Of course life is bizarre, the more bizarre it gets, the more interesting it is. The only way to approach it is to make yourself some popcorn and enjoy the show.”
Yes, yes I do. Because oddly enough they can rent.
Yeah, just like us. Why does everyone lament that “homeowners” have to become renters, while the rest of us are expected to rent for the rest of lives because we have been “priced out forever”?
I don’t think the poster that thinks many posters here are cruel
for not having any compassion for the throw out ex-homeowner
knows about why a lot people where buying houses during the housing boom . People where sold on buying houses for a investment ,in
spite of not being able to afford them . It was a mania and a greed thing ,and now these people can’t afford the payments
and they can’t sell for a higher price than they paid for the house .
While it is true that many people where sold on toxic loans that they could never afford ,once they adjusted to the real rate ,the reason why they were sold so easy on such bad loans was because they were approaching buying real estate with the idea that appreciation would cover them . When the market turned ,their gamble didn’t pay off . Many of these homeowners lied on their loan applications to get the loan and in many cases it was with the help of the corrupt REIC .
So, its not to easy to feel sorry for people who were willing to
buy a product that they really couldn’t afford . While these homeowners might of been brainwashed by all the hype that was going on at the time ,still greed and get rich quick was more the motive with many of the buyers ,than just having a nice little home to call their own . Many homeowners are walking even if they can afford the payment because they didn’t make the appreciation that they expected .
There will always be cases where a borrower was a true victim, but in the majority of cases the borrowers were
expecting that real estate would go up and they would make some easy money . This is the way that homes were sold at some point during the housing boom 2002-2007. The moral of the story is don’t buy something that you can’t afford or something that you have to lie on a loan application to qualify for . The lenders were also very wrong in lending out easy money without really underwriting the loans .
So, to the poster that has compassion for these people that drove the market prices up with their fraudulent loan applications ,who were really just gamblers ,they cause a lot of damage for our entire economy . So, I would think that you would have scorn for these people ,rather than compassion ,unless you like paying higher taxes for the stupid bail-outs these people and banks are getting in spite of their foul play .
Hey Bloggers….
I *know* you all can recalled the snobbery, arrogance, elitist quips and downright greedy money grubbing attitude of current house debtorsback…. say…. 2003-2005??? I recall these clueless sheep heading for the slaughterhouse like it were yesterday. And nothing is more satisfying seeing these very same whining $hitbags and their economic futures getting eviscerated by the invisible hand of markets.
Yes Crusader…. This is truly a dream come true. And you know what? Depending on location, right now I can write a personal check for the national median price of a shack. And you know what else? I’m not gonna do it until the pain spreads even further. And if you’re fortunate enough and I’m feeling generous at the moment, I might help get you off the hook and buy your shack for say, 10 cents on a dollar.
Whatta ya say crusader? Do you think you might lose that phony empathy and sanctimonious attitude and come clean on the fact that your entire world is a function of the housing mania? C’mon out boy and tell us. You can do it.
exeter, we have had our little political differences, but you present message is one I completely agree with.
Well…. I guess thats good. I think I called him out quite accurately and appreciate your vote of confidence.
My God they are stuck renting for half the cost of owning, not to mention getting to stiff their creditors for their debts accumulated through ignorant and selfish decision making and the benefit of living rent free until the sheriff comes. Tragic. Real freaking tragic.
Do I enjoy it? No. I would rather seem them imprisoned or forced to work 80+ hours a week to pay off their debts. They really are scum.
Ben is still cleaning his desk on Fridays
Missed you guys.
Great article Ben.
Hi Melody. Glad to see you check in.
Hey, Melody!!
Good to see you again.
Carve Diem?
‘Seize your someday,’ a Wells Fargo ad advised in 2007.”
That’s cute! How do you say “Someday you will seizure”? That would have been more appropriate.
Knife Catchers and HELOC raisers…
Good to see prices dropping in Canada as well. Here in Regina, house prices are just beginning the big drop down the rollercoaster. Sales are down 37.1% and new listings are up 27.9% from a year ago, according to the article in today’s newspaper.
I remember that Ameriquest ad. It was the first thing that tipped me off that something was seriously wrong. I thought to myself “why wouldn’t a bank quickly judge someone to whom it was about to lend hundreds of thousands of dollars?”
Then there was the second thing, which was the “flipping houses instead of dot-com stocks” article in a major newspaper that detailed how people were buying and selling condo units in south Florida practically before anyone even brought a f_____g shovel onto the raw land.
The third thing: seeing people whose judgment I did not respect deciding to buy houses that I knew they could not afford.
“Seeing people whose judgment I did not respect deciding to buy houses that I knew they could not afford.”
Ding Ding Ding Ding!!!!
Ditto…exactly what tipped me off.
I couldnt believe some of the imbeciles in my office telling me they were buying homes at double what I thought they could afford ( and more than what I could afford… and I made more than them! )
Chia Pet’s obsfucating claim to fame:
“‘Calling it a ’second mortgage,’ that’s like hocking your house,’ said Pei-Yuan Chia, a former vice chairman at Citicorp who oversaw the bank’s consumer business in the 1980s and 1990s. ‘But call it ‘equity access,’ and it sounds more innocent.’”
Confucious say “Water Chia and Joshua Tree will grow out of his ass.”
RE: Anyone with half an ounce of brains could see what would happen down the road. After five years of greed, selfishness, lies and tricks, here we sit, with a housing market that will be remembered as a huge blunder of human making.”
I guess this excludes Barney Frank & Christopher Dodd.
After surviving a burst in the dot-com bubble about a decade ago, Patricia Hunter is trying to weather a collapse in the real estate market.
She abandoned her job as a tech recruiter; she didn’t “survive” the dot-com bubble burst!
Oh, you mean the dot-com crash did not literally kill her. Got it.
After struggling through two industry busts, Hunter said she decided to shift gears and enter the medical field, transcribing recordings of doctors’ dictations, something she hopes will provide a stable, steady future.
Good choice, Patricia. After all there’s no way doctors’ dictations could be transcribed by a computer program, or by someone in India.
And lord knows that “reading and typing” are talents that can only be mastered by few.
Big V, you have suddenly morphed back into the sensible person I know. Further up the page you would’ve been insisting that every reader/typist be paid enough money to buy food. (??) Now you agree the Indians have as much right to eat as we do. (??)
I know someone who does this and its seems pretty horrible. She gets “recordings” of what she transcribes. She plays it, types it, plays it back, types more. No, I’m not sure a computer program or someone from India could do it, actually. : )
Great post, Ben. The stuff about the HELOC ads was fascinating.
The military article was sad. I live in San Diego County and a HUGE number of our foreclosures are in north Oceanside, which sits smack against Camp Pendleton. I can understand why military families might buy in less expensive areas of the country, but not here, where it’s been much cheaper to rent than buy for years.
“Little by little, millions of Americans surrendered equity in their homes in recent years as home prices seemed to rise inexorably from one peak to the next. As a result, the United States has become a nation of half-home owners. For the first time since World War II, the portion of home value that Americans own has fallen to less than 50 percent. In the 1980s, that figure was 70 percent.”
Who owns that other 50 percent of declining home equity value? Homebuilders, banks and other varieties of mortgage lenders, I am guessing?
This shows why the Fed has a very strong motive for respiking the home price inflation punchbowl. Too bad that economic fundamentals stand in their way like a Russian tank.
No mention in this piece that you have little protection to save your home in a bankruptcy when you have a second mortgage.
Does anyone know if it is possible to get a bank to argue and change the tax assessment on an REO property BEFORE you are willing to perform on an offer? As in “offer contingent on bank successfully reducing assessment from $X to $Y before closing”
I found something interesting that is currently assessed at about three times what I MAY eventually offer, but I don’t want to get stuck paying three times the realistic property tax.
Even the actual REO listing price is at about 60% of the 2009 assessment.
I’m pretty sure you can write whatever contingency you want. It’s up to the bank to accept or reject your offer.
The moratorium ‘won’t just make [the lot] unattractive, it will make it useless.’”
Try using it for growing produce that you then sell at the local farmers market. Oh wait, that would be doing some work, never mind.
i suspect that may require rezoning to ag-land or something like that.. maybe an environmental impact report for pesticide use in a residential neighborhood.. water run off could be determined to add to the storm drain problems. Jump through hoops and cut red tape and pay lots of money and they might be allowed to grow some tomatoes..
She’s just pissed because in the two years they tried to pawn it off to some GF, their wishing price wasn’t met, and now it’s too late to drop the price.
This is a wonderfull short and to the point analysis of where we stand and where we are headed.
http://www.rgemonitor.com/asia-monitor/253266
“The ad showed a woman on an airplane…”
The AmeriQuest ad on YouTube.
Oy vey.
I know a graveyard, out by the roadside, a place where nobody goes.
I’m checking it out.
This ain’t no party.
This ain’t no disco.
This ain’t no foolin’ around…
“I’d like to remind any of the media or government that may be reading here that this isn’t a crisis. The real problem was housing prices going through the roof, and now we see the inevitable fallout.”
Amen. The crisis is for those who got themselves over-leveraged during the bubble, and that’s no one else’s problem to solve for.
What does FB mean?
f—ed buyer or f—ed borrower depending on context. Welcome, newbie.
Add f–ed bank to the list.
<blockquote cite=”“Two years ago, when Bonnie Hughes, a certified financial planner in Miami, and her husband divorced, he kept their vacation house by a Tennessee lake, and she retained their main residence, a 3,000-square-foot home in Chattanooga, Tenn. He was able to sell the house at the lake; she was unable to get rid of what had been the family home.””
Bonni, Bonnie - what are you waiting for? That ex of yours is laughing all the way to the bank, and you are stuck with th albatross.
Even though you got the best part of the deal at the time, you’re hurting now, Bonnie, whilst the ex is living a life of luxury.
Bonnie, go back to the Family Court, and seek a review of your property settlement, based upon “changed circumstances”. The Judges will be more than willing to help you out, you know. Make that miserable ex pay for the life to which you were accustomed - it’s just not fair that he managed to offload his part of the property settlement.
Just do it!
“None of this would have been possible without a conscious effort by lenders, who have spent billions of dollars in advertising to change the language of home loans and with it Americans’ attitudes toward debt.”
oohh… my god… Borrow.. borrow money.. I must.. borrow money.. I.. I.. can’t.. resist.. aaggghhh.. help.. me.. someone.. help me!
No money for you! — The Money Nazi
Anyone interested in the “Decline of the American Empire” should listen to Peter Bacevich’s interview with Bill Moyer on PBS… The guy is immensely insightful about the enormour challenges the US has in turning things around… He’s probably one of the smartest guys I’ve seen on the subject…
http://www.pbs.org/moyers/journal/08152008/profile.html
Trouble is that Moyers is a communist.
people around this thread are throwing the term “communist” and “socialist” way too often. Demanding a living wage, as opposed to accepting Chinese (!!!!) wages **which are atificially low because they live under a totalitarian government** that makes you a communist? The world is turning upside down, I guess.
Bill Moyers is not a communist, I don’t think he would keep inviting old fashioned capitalists like John Bogle onto his show if he was intent on destroying private property.
Don’t make straw men please - it makes your arguments sound really weak.
MERRIAM WEBSTER
Main Entry:
com·mu·nism
Pronunciation:
\ˈkäm-yə-ˌni-zəm, -yü-\
Function:
noun
Etymology:
French communisme, from commun common
Date:
1840
1 a: a theory advocating elimination of private property b: a system in which goods are owned in common and are available to all as needed2capitalized a: a doctrine based on revolutionary Marxian socialism and Marxism-Leninism that was the official ideology of the Union of Soviet Socialist Republics b: a totalitarian system of government in which a single authoritarian party controls state-owned means of production c: a final stage of society in Marxist theory in which the state has withered away and economic goods are distributed equitably d: communist systems collectively
*************************
“Everyone suffers, all because real estate agents, buyers, escrow offices and some banks got greedy.”
This letter put it nicely.
What’s still mindboggling is that the majority of Americans, who had nothing to do with the Bubble, aren’t outraged. There are two factors at play: Most people have some sympathy when reading these sob stories about folks who “lost their homes”, and homeowners–pre-bubble purchasers or those who are paid up–were still dazzled by all their hypothetical bubble wealth when they checked Zillow, and are upset that the prices are coming down.
If the non-specuvestor/flipper majority came to its senses they’d be demanding that Congress do something to help the INNOCENT VICTIMS and not the flippers.
For example
- Eliminate taxes on bank dividends (to reward savings)
- Cut capital gains taxes (to reward investing)
- Double the amount of losses you can offset a year
- COLLECT TAXES on forgiven mortgage debt, so the houseflippers can pay back some of what they stole from America
- Collect income taxes on “stated incomes”
- Prosecute landlords who rent out properties that are in foreclosure (or behind on the mortgage)
etc.
Unfortuately, there’s not enough outrage to make this happen.
“Unfortuately, there’s not enough outrage”
You think there is a lack of outrage? It seems like outrage is readily available, but everyone cannot seem to agree on what they are outraged about, who they are outraged at, or what to do about it. Sadly, if people are not inspired to work together, they turn on eachother, so we need to develop common values. Maybe Dave Ramsey should run for President? Start by snowballing the national debt?!