Bits Bucket For September 2, 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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Name:Ben Jones
Location:Northern Arizona, United States
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Fed’s response to crisis hurt its key role: Hoenig.
“For a market economy to work best, it must to the maximum extent possible find a balance between financial stability and a stable price environment,” Hoenig said, “and in doing so must be able to allow individual institutions to fail.”
http://www.reuters.com/article/ousiv/idUSN0151514420080901?pageNumber=1&virtualBrandChannel=0
“Federal Reserve Bank of Kansas City President Thomas Hoenig said in remarks prepared for delivery at a central banking conference in Argentina.”
There’s your trouble, right there. He’s in Argentina. The Fed needs to go NOW!!!!!!!!!!
Talk is cheap…..actions speak louder than words.
Speaking of actions. Please check out the suppression tactics being used at the GOP convention. So much for the concept of constitutional rights, freedom of speech or the right to protest.
http://counterpunch.org/cohn09022008.html
Freedom of speech for the mask wearing anarchists smashing store windows and the left wing extremists throwing feces at delegates? I say screw those ungrateful idiots, I hope they all go to jail. Peaceful protests should be protected.
Say, I’ve got an idea. How about reading the article next time?
Do any of these groups sound like anarchists?
BTW, these arrests were before any of the violence that reportedly was done by 200 or so of those anarchist clowns.
These were the peaceful demonstrators they were kicking the doors in on, not that it would have been OK to deny the anarchists their constitutional right to privacy, free speech, etc (they don’t have the right to assault, destroy property, etc., but I assume they were arrested for that?)
….”"I was personally present and saw officers with riot gear and assault rifles, pump action shotguns,” said Bruce Nestor, the President of the Minnesota chapter of the National Lawyers Guild, who is representing several of the protestors. “The neighbor of one of the houses had a gun pointed in her face when she walked out on her back porch to see what was going on. There were children in all of these houses, and children were held at gunpoint.”
The raids targeted members of “Food Not Bombs,” an anti-war, anti-authoritarian protest group that provides free vegetarian meals every week in hundreds of cities all over the world. They served meals to rescue workers at the World Trade Center after 9/11 and to nearly 20 communities in the Gulf region following Hurricane Katrina.
Also targeted were members of I-Witness Video, a media watchdog group that monitors the police to protect civil liberties. The group worked with the National Lawyers Guild to gain the dismissal of charges or acquittals of about 400 of the 1,800 who were arrested during the 2004 Republican National Convention in New York. Preemptive policing was used at that time as well. Police infiltrated protest groups in advance of the convention.
Nestor said that no violence or illegality has taken place to justify the arrests. “Seizing boxes of political literature shows the motive of these raids was political,” he said.
Further evidence the political nature of the police action was the boarding up of the Convergence Center, where protestors had gathered, for unspecified code violations. St. Paul City Council member David Thune said, “Normally we only board up buildings that are vacant and ramshackle.” Thune and fellow City Council member Elizabeth Glidden decried “actions that appear excessive and create an atmosphere of fear and intimidation for those who wish to exercise their first amendment rights.”
“So here we have a massive assault led by Federal Government law enforcement agencies on left-wing dissidents and protestors who have committed no acts of violence or illegality whatsoever, preceded by months-long espionage efforts to track what they do,” Greenwald wrote on Salon.
Preventive detention violates the Fourth Amendment, which requires that warrants be supported by probable cause. Protestors were charged with “conspiracy to commit riot,” a rarely-used statute that is so vague, it is probably unconstitutional. Nestor said it “basically criminalizes political advocacy”
Well, now we may freeze to death…
Science Sun Makes History: First Spotless Month in a Century.Drop in solar activity has potential effect for climate on earth.
The sun has reached a milestone not seen for nearly 100 years: an entire month has passed without a single visible sunspot being noted.
http://www.dailytech.com/Sun+Makes+History+First+Spotless+Month+in+a+Century/article12823.htm
Great, global cooling! Better go get those H2’s back out on the road; perhaps we (the taxpayers) should subsidize the fuel costs to ensure that our planet doesn’t become a frozen block of ice!
The hot air generated during this election cycle should suffice.
don’t worry al gore and other savours are still flying around in private jets
I can see it now
This administration has turned off the sun !
You’re right, some kook will say that, but this will be a tough one to hang on Bush. I have to say he has gotten much better at creating hurricanes this season. Now if he can just get his targeting device perfected!
No lets give Bush credit where its due:
He is the greatest president in creating Underground jobs this country has ever seen
What do you think is holding up the economy? Not real paying jobs with health benefits…Right?
Right on the money aNYCdj….I see it everywhere and not just the landscape maintenance guys….I know one remodeling contractor that tells me he works 50% off the books…He says it’s the only way he can make it…I have many other stories also but the point is there is a “Massive” amount of income taxes that are not being collected…Solve this collection problem and the deficit goes “poof”….Problem is, as we all well know, even if they collected more they would just spend it so without real change in they way government spends our money (particularly) govmit jobs, maybe its best for our economy to just let the underground economy continue to thrive….
“50% off the books,,,,,,the only way he can make it….if they collected more, they would just spend it”
This kind of crap makes us W-2 wage slaves see red.
Unfortunately, my employment does not lend itself to getting 50% off the books (too much documentation showing I did the work). When I do stuff on the side, I always get a 1099.
All this whining by the “small independent businessman” makes me laugh. Every one of them has ten times the ability to get “creative” with their income and tax statements as us working peons.
Yeah, the government wastes money. So what else is new? Everybody in the country knows the government wastes money on something. But the government is going to “get theirs”. All “creative tax filing” does is shift the burden onto someone else.
Disclaimer: I always tip with cash. I figure they could probably use it more than me.
my employment does not lend itself to getting 50% off the books ??
Neither does mine…Point is, until the underground economy is “recognized” there will be a vast portion that do not pay approriate taxes leaving the extra burden or should I say extra borrowing that is required to fund this bloated federal goverment…IMO, It makes a strong argument for a “flat” or “value added” tax system…
The climate change scare warnings run in cycles of thirty years or so. I believe it was some time in the 1970s when we were last assailed by popular weekly magazines showing covers that warned of the dawning of a new ice age. What goes around, comes around again when it comes to the climate.
The climate is always changing it’s ways, and it’s hard to imagine that there were no sunspots this past month, on account of our actions here on this tiny orb*.
* if the Sun were the size of a basketball, the Earth would be the size of a pinhead, in comparison.
Slammin out orbs and watchin
Sgt. Pepperoni - now don’t tell me
I got nothin to do
Cold hearted orb that rules the night,
Removes the colours from our sight,
Red is gray and yellow white,
But we decide which is right.
And which is an illusion?
“But we decide which is right.
And which is an illusion?”
If only…
Doesn’t stop folks from trying.
Cool lyrics though, from those dope-smokin’ days of yore…
Always changing weather, today 102, yesterday 99,
tomorrow 105, then 106 then 107, then 105
Anybody loan me a sweater?
I think weather on tv is a myth. It’s all in your minds.
Time Magazine 1974…
http://www.time.com/time/magazine/article/0,9171,944914,00.html
“Global cooling” was a problem in the 1970s, and masked the effects of increasing concentrations of greenhouse gases. Particulates in the air from coal power plants were literally blocking out the sun. After the Clean Air Act was passed, the particulates disappeared and we got brighter sunlight.
So……….lets bring back the particulates!!!!!
Actually, we are getting close to one of the magnetic field cycles where the field orientation changes. There is potentialy a multi year period where the magnetic field will be off and the van allen belts will disapate.
Could be pretty interesting for us. Well, briefly will get to see really interesting bright colors when we close our eyes.
http://www.time.com/time/printout/0,8816,944914,00.html
or google “time magazine ice age’
That was 34 years ago, by that logic I wont see the
next cooling cycle til around ‘42. I’ll be 99 by then,,
Ex-perts, Drips under pressure.
Great! Better satellite reception for everyone!
Wow a scientific reason other than Capitalism repsonsible for climate change. Hugh who would have thunk it? If we would just surrender all private property rights and live in a collective with single minded thought we could “cure” global warming.
Darn it now there will be more SUV’s, Coal fired power plants, and non recyclables for all the yuppies..YIPPPEEEEE
“Hugh who would have thunk it?”
Who is Hugh?
Baabaabooie? anyone?
Hugh Downs - he would have thunk it. But not Baw Wah Walters.
G-class dwarf stars, such as the Sun, are believed to spend about a quarter of their lives in a “Maunder Minimum” type state, with minimal sunspot activity. In short, this event is not as rare as one may think… though its effects upon the climate may be impressive if the relative inactivity continues for a long period of time. See also: Little Ice Age.
No action as fishy real estate sales reek
By Dan DeWitt, Times Columnist Published Monday, September 1, 2008 4:26 PM
“Did anything ever happen to any of those people?”
I get that question all the time, with “those people” meaning the appraisers, title company owners, shadow buyers and Realtors who cooked up about a dozen apparently fraudulent real estate deals in Hernando Beach.
More than six months after I wrote about these sales, the answer, regrettably, is still “no.” And nothing I learned from talking to Barbara Quist last week convinced me that will change anytime soon.
But I think I have a better idea why nothing has happened, why no one has lost a state license, and why no Realtors have been booted from the Hernando County Association of Realtors.
See, Quist, owner of RE/MAX Advantage Realty in Spring Hill, first brought evidence of suspicious sales to the association about 18 months ago.
Even then, Quist realized fraud had poisoned the Hernando Beach market with artificially inflated sales prices. Boarded-up windows and neglect showed the owners had never planned to live in the houses they bought.
She had started investigating after her office received several suspiciously high offers for listings. And she and seven other concerned Realtors presented their findings to association executive director Ed Carr and the association’s attorney, David Carter, during a meeting at the Olive Garden in Port Richey.
She has since met with the association’s board of directors two times, repeating that she had evidence of fraud and asking for Carter to be fired.
In challenging members of her own profession, she’s a lot braver than I am.
Otherwise, we have a lot in common.
We’re disgusted with the misplaced professional courtesy that seems to be protecting the tainted Realtors. Though we’ve both heard that the FBI is looking into the sales, we’re disappointed no criminal charges have been filed.
We’re outraged that Lance Sutter and Ruth Hersh, who helped arrange many of the deals we investigated, are still agents in good standing with Exit-Success Realty in Spring Hill.
And we both think Carter’s roles as attorney to both the association and several local real estate agencies, including Exit-Success, has created an obvious conflict of interest.
Nowhere was that clearer than at the Olive Garden, Quist said. Before the meeting was even over, she said, Carter called the owner of a title company listed on the closing documents of some of the suspect sales.
“We were all sitting and looking at him with our mouths wide open,” she said.
Carter didn’t return several calls to his office last week.
Carr wrote in an e-mail that he forwarded the evidence that Quist gave him to appropriate agencies, including the Florida Real Estate Commission, which has the power to revoke state licenses. It has taken no action.
The association has made no move to oust Hersh and Sutter, Carr wrote, because it has never received a formal complaint.
Seems to me that Quist’s report should be enough to generate some action.
It would be, she said, if the association had a lawyer more interested in rooting out corruption than protecting clients.
“I know there are steps they could take if they could get legal advice about what to do,” she said.
————————-
Even the Sopranos was mocking the housing bubble fraud back in 2002.
http://en.wikipedia.org/wiki/Watching_Too_Much_Television
“Tony and Ralphie get an idea from Brian Cammarata the next day: to defraud the HUD fund with bogus housing deals. Tony recruits Assemblyman Zellman and a friend of his, Maurice Tiffen, the formerly idealistic head of a non-profit low income housing program, to put the plan into action. They also recruit Dr. Ira Fried to initially buy the property.”
http://en.wikipedia.org/wiki/Calling_All_Cars_(The_Sopranos_episode)
“Tony has a sitdown in New York City with Carmine Lupertazzi and Johnny Sack. They demand 40% of his HUD business as it is linked to Assemblyman Zellman, who is in the pocket of both families and any profit made by using Zellman should be split, though not equally but fairly. Tony refuses and leaves. He phones Johnny on his way home with a counter of 5.5%, which Carmine refuses to discuss. Instead Carmine dispatches Joey Peeps to attack Tony’s appraiser on the HUD scam. He takes Anthony, an associate, with him and catches up to “Vic the Appraiser” the next day.”
Is it possible to apply RICO statutes to the real estate industry?
Realtor Influenced Corrupt Organisation fits nicely, doesn’t it?
I’d like to see Realtors Indicted for Corruption Often.
Realtors In Cahoots Often
My limited understanding of RICO conspiracy claims is anyone, public or private, can bring a RICO suit if it meets the minor qualification of 3 instances of criminal activity (pattern of criminal activity) and a plaintiff must plead that the defendant agreed to join the conspiracy, agreed to commit predicate acts, and knew that those acts were part of a pattern of racketeering activity.
Knowing the acts are racketeering is probably the hardest part to prove. It is difficult to establish an intelligence of future market activity other than on past market activity.
The mistake she made was not contacting the FBI in the beginning.
““Then you will see the rise of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of DISARMED victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.”
Francisco d’Anconia
We’re only what, maybe 10 years behind Russia?
More like 10 light years behind Russia.
Keep the faith; As long as the US remains a nation of laws we’ll do alright.
The United States is a nation of laws: badly written and randomly enforced. - Frank Zappa
randomly enforced ??
Selectively enforced…
Your selection can of course be randomly generated…
Your election can of course be randomly generated…
I guess we are screwed…
The Federal Reserve = criminal enterprise
Hope everyone had a good labor day weekend. I went into the District to see the Afghanistan exhibit in the East building of the National Gallery and then stopped by my office in the early evening to get some admin work out of the way and pick up my computer. Ended up running into one of our division’s senior technical people and was there until nearly 9:00PM talking about the project we are both working on right now (he is doing the envision what it needs to look like part, I am doing the bash out the text so it can be inserted into his vision part).
I need a vacation.
Eeeek! That’ll teach you to stop by the office on a holiday!
Could’ve been worse. You could have been at a Labor Day barbecue where you hear people finally, belatedly acknowledge that the DC housing price bubble is crashing, but then you hear them say “at least it’s not in my neighborhood”! Then they start talking about how their street is holding value because the asking prices haven’t changed — on those houses that have been up for sale since Christmas! Arrrghhh! Gimme another beer. And some earplugs. I wished I was at work. Oops, and then today I got my wish, and it ain’t fun. D’oh!
Thank you for the laugh. I need it. Bashing out text of report with computer that I brought home. Just another day trying to keep congress from passing a bad law. Yes, that is the purpose of a lot of executive branch reports - we give them real info so they don’t write laws based on the complaints of three irate constituents.
By the way, thanks to all for the brake information from yesterday. Brought my car to Midas this morning. The brake fluid tank was empty. He put it up and a brake line was wet and covered in schmutz. The master cylinder was wet and crusty too. I’m going to be out over $800 at the end of the day. They tell me my master cylinder is way cheaper than most, so it could have been worse.
I don’t drive much, but brakes I must have. If there hadn’t been anything visible wrong and the fluid was only low, not gone, I would have considered the suggestions people made about adding more fluid as necessary and just watching it for a while. As it is, I told them to fix it. They did not insult me by suggesting I add a full brake job.
Fortunately, I rent, so the money is not a problem, though this will eat into this month’s savings allocation quite a bit. However, it has most definitely made me less interested in consumer purchases for the next few months.
Polly,
Here’s John Cleese about vacation.
http://www.youtube.com/watch?v=pusPxN_7mm8
Housing slump drags on broader Southern California economy:
The Promenade Shops at Dos Lagos opened two years ago in Corona, aimed at serving the legions of people moving into upscale new housing tracts in the surrounding hills.
Discount center it isn’t. This is where you go to find a $3,300 home espresso machine at Sur La Table, a $500 handbag at Coach or a $6 cup of Pinkberry frozen yogurt.
Harder to find are paying customers. On a recent weekday afternoon, most stores had fewer shoppers than salespeople.
Outside the Starbucks, Melissa McVicar was selling sunglasses from a cart, $12 a pair. Five hours into her shift, McVicar had sold only six pairs. And most of her customers weren’t paying cash.
“People are buying on credit, even if it’s only $12,” she said.
http://www.latimes.com/business/la-fi-econ2-2008sep02,0,2059011.story
what you expect from a socialist country
et tu.
http://biz.yahoo.com/ap/080902/britain_housing_rescue.html
Communities Secretary Hazel Blears said the measures would not “transform the world,” but would “make a big difference to those people that are struggling.”
“We can’t run people’s lives but we can try and help,” Blears said. “What we’re saying is … we will help you get the deposit so you can get the mortgage and you can get into the housing market.”
how is this any different from a sumprime loan??????? talk about stupid, why would you want to put struggling people into a home they cant afford???????
““We can’t run people’s lives but we can try and help,” ”
Translation:
“We can’t run people’s lives but we can screw them up.”
DOC
Honda’s commitment to small cars is paying off
Company never wavered from its green philosophy
By Bill Vlasic
NEW YORK TIMES NEWS SERVICE
September 2, 2008
TORRANCE – During the glory days of big pickups and sport utility vehicles, one automaker steadfastly refused to join the party.
Despite the huge profits that its competitors were minting by making larger vehicles, Honda Motor never veered from its mission of building fuel-efficient, environmentally friendly cars like its Accord sedan.
“I remember being at the Tokyo Motor Show in the mid-1990s and talking about the environment,” said Ben Knight, head of engineering at Honda’s North American division. “The reaction was ‘there’s no return on that.’ ”
Yeah, the Pilot is a real green-machine, not to mention the Ridgline. I really like Hondas (last two cars were Civics), but those comments are ridiculous.
And don’t forge the Pilot SUV and the Odyssey minivan.
But to be fair to Honda, they did resist jumping on the big azz, 350 HP pickup truck bandwagon.
More like they saw that going up against the Big 2.5 in the full size pickup market was a losing proposition (unlike Toyota).
The Ridgeline, trying to be different, is “an answer to a question nobody has been asking,”
I admire Honda, but even a stopped clock is on time twice a day.
I agree about the Ridgeline. I can’t imagine any self respecting redneck driving one of those.
You will never see a redneck driving it. What you will see is some ass-clown city yuppie driving one to the office, proclaiming to everyone how he has a “truck”.
I test drove a Pilot last year, since they were deeply discounted. Seemed like a bit too much of a car. Here’s the kicker: I’m driving with the sales guy and the Pilot runs out of gas. He gets on the cell and tells managers to dispatch another guy with a can of petrol. I think the sticker said something like 16 mpg. Anyway, I passed on the the chunky and thirsty Pilot, though the salesman said they keep the tanks low when cars are on the lot due to some fire/insurance rules. His boss called me later and asked about the test drive. I said it ran out of gas. He said sales guys are sposed to not let that happen… Duh.
I would up with a Subuaru Forester, first new car I ever bought. Fairly happy with it. It was assembled in Alabama, at least. It replaced a 1996 Honda minivan, which was a thrifty four cylinder and not the 25-cupholder, wide-body, 6-cyl. heavy bread loaf that it makes today. 1996 was their first or second year with the van.
Kids sound noisier in the Subaru. That’s life.
Kids sound noisier in the Subaru. That’s life.
So, to get quieter sounding kids one must buy an upscale MBZ or BMW or Hummer? (funny idea!)
Funny point. No, the kiddo is not quieter in the spouse’s ride, yes, a BMW.
But we don’t hear any static when the Subaru is filled with ballet bags, stickers, hidden lip gloss, sandals, an assortment of pens and a deck of cards with 47.
In the super-small car category, both Ford and Honda have brand-new vehicles due out for the 2009 model year - the Honda Fit and the Ford Fiesta (which will be sold in the US).
Go search the various car magazines and websites. Reaction to the Fit is fairly tepid, while the Fiesta is getting great praise. The Fit remains an excellent car, but it sure looks like Honda got a little bit lazy and allowed a competitor to match it (or exceed it if you’re into sporty driving).
Only in America would the Accord be characterized as fuel-efficient or environmentally friendly. It’s a full-sized sedan with rather mediocre fuel efficiency!
Another interesting difference between here and Euroland is that they offer their cars with a wide choice of engines. It is not unusual for compacts to be offered with choices like: 2.0. 1.9, 1.6, 1.4 and 1.2 liter engines, both in gas and diesel models, where in the US there is usually only one choice.
Also, not surprising that the Accord isn’t a fuel sipper. In the UK there is a car TV show called Top Gear. In one episode they pitted a 1960’s vintage Aston Martin and a Jaguar vs. a new 4 cylinder Accord. The Accord blew them (and their 8 cylinder engines) away on the drag strip.
With gas going below $3 a gallon, those small cars will be accumulating on lots like the SUV is today. Most Americans are licking their lips over gas price reductions in order to buy those big beasts again. American’s not only don’t learn from history, they don’t learn from yesterday.
I don’t know. Even with falling gas prices and 25% discounts the behemoths aren’t moving, at least not in my neck of the woods. The local Chevy dealer has scads of pickups and SUVs in stock, while they are nearly sold out of compact models like the Cobalt and the Aveo. The local Ford dealer has no Focus models in stock.
I hope you are right, but if history is any indicator:
Ford Motor Co. too is feeling the pinch, with sales of its big Thunderbirds down 41% for the year so far, and purchases of Mark Vs off 24%. But the plunge-of-the-year award so far goes to the Cougar, which had sold 18,775 by mid-June in 1978. For the same period this year, fewer than 3,000 Cougars have been bought—only 35 of them during the middle ten days of June. At Chrysler, sales of Dodge Aspens are down 30% for the year. The company’s hottest autos are the subcompact Dodge Omni and Plymouth Horizon (up 55%). Yet production of these models is limited because their engines are supplied by Volkswagen, and the number is fixed at 300,000 for the year.
At Car Dealers Small Is All
Monday, Jul. 09, 1979
http://www.time.com/time/magazine/article/0,9171,920449,00.html?iid=chix-sphere
Well yeah, if gas goes back to a dollar something a gallon. But it won’t. It will probably drop to the low 3’s over winter and rachet right back up this spring. Unless of course the entire global economy tanks. Of course if that happens people won’t be buying any kind of car, will they?
bizzaroworld, seems that you are about ready to buy a Chevy Suburban or something similarly-sized. If not, why not?
Not me, BIM, I own a paid-for, 4 cyl Saturn sedan that gets about 33 mpg. I just bring up the historical account of when America went small car until gas was cheaper and then off to the SUV races. If it happened before, it can happen again. After all many Americans have a very short memory. If I did like the gas guzzling and polluting charms of most SUVs, now would be a good time to buy one since they are littering the lots of most dealers. A 4 cyl RAV4 or CR-V or even an Escape hybrid are reasonable SUV choices.
People only bought SUV’s because it was trendy and everyone was doing it. Well that trend is now history, and while I agree with the premise that Americans have short memories, large school busses will not be back in the suburban garages anytime soon. Actually the trend is the opposite direction, smaller cars like the Fit/Focus/Fiesta/Aveo. If they can fit 5 people into this kind of car in Brazil, why can’t we?
And if I’m wrong about this trend, well I hope gas goes to $7/gallon.
In the case of SUVs, as well as mcmansions, the trend is not your friend.
Real estate agents try to boost sales with bike tours
By Whitney Malkin
ASSOCIATED PRESS
September 2, 2008
PORTLAND, Ore. – With gas prices high, bicycles flying out of stores and a buyer’s market for houses, a handful of real estate agents around the country are touting the two-wheeled appeal of their listings.
Some even show houses exclusively by bike, wheeling through the neighborhood with potential buyers to show off bike lanes and bike-focused businesses and repair shops.
Clad in a purple helmet and with plastic flowers dangling from her handlebars, Portland’s Kirsten Kaufman is part of a new generation of agents eager to replace the stereotypes of hauling clients around in fancy sedans or SUVs.
“Kirsten Kaufman is part of a new generation of agents eager to replace the stereotypes of hauling clients around in fancy sedans or SUVs. ”
Also, her sedan and SUV were taken by the repo man.
I can’t wait to see my very first bicycle moving-van…
Rickshaws?
I already saw my first moped moving van this summer, on the streets of Vietnam.
-Honey, this house has kind of a funny smell.
-Actually Sweetie, I think that’s either you or the agent.
That’ll never fly in Florida.
- 90 degrees with high humidity.
- Bicycle paths? What are those?
- Lincoln driving Blue Hairs will mow you down.
As an avid Pacific Northwest cyclist I share the following: “What do you call the day after it stops raining? Monday!”
Bikes are my favorite way to get to know a neighborhood, compared to travelling around in autos. By going at a slower speed, and by not being in the coccoon of an auto, you notice so much more - not just the properties but the people. It also evokes much less suspicion if you want to stop and look at something for a couple minutes, or to engage in a friendly chat with someone. (Yes there are still many areas of the country where the quaint notion of interacting with strangers is still practiced.)
The downside to this, with regard to looking specifically at properties for sale, has been that it’s harder to cover sufficient territory on a bike in order to ride by enough properties. That doesn’t seem to be the case these days, though.
I love riding my bike around little towns….Pismo Beach comes to mind…
“…you notice so much more…”
Most certainly, it’s a great way to scope out a neighborhood (hint to all you vultures out there). Sadly, you also get to notice a few bad things:
1. How bad car exhaust really stinks - and how many people do nothing to properly maintain their cars.
2. How a significant proportion of adults, despite laws prohibiting it, suckle on their cell phones like a baby on a pacifier.
3. Combining your items, how many people suckle on their cell phones while driving.
I remember how furious I’ve gotten at times over the years about the yakking while driving. Now, I’m just thankful that at least they’re not texting.
“Now, I’m just thankful that at least they’re not texting.”
The adults aren’t (not that I’ve seen), but I’ve seen my fair share of teens driving with their knees while they type and occasionally look up to check the real world.
Today’s youth must be in constant contact with one-another via electronic device, but seldom via face-to-face space.
Texting - what a stroke of marketing genius. Bring back something that is essentially a modern-day form of Morse Code (rendered obsolete by the invention of the telephone 132 years ago), and liberate many more hundreds of dollars a year from the wallets of millions of people, for the privilege.
Sorry, no offense to you HBB texters out there, I confess I really don’t “get it”.
The great thing about texting is that it allows you to ask a question/make a statement without a 5 minute phone call.
No, how are you, how are the kids, yeah that some weather, etc etc etc.
I think it is more comparable to email without spam than phone calls.
Also texting works well in a large noisy strip club. You text your buddies. They let you know when a hot chick that you like just came on duty. Or you can razz a buddy when he’s gone for 40 minutes in VIP - “Did she wear you out?”
Single life is the good life.
Consumers warm up to freezers again
Two-pronged strategy is to save on food, gas
By Ashley M. Heher
ASSOCIATED PRESS
September 2, 2008
CHICAGO – Once relegated to the dank corners of the basement, freezers are being embraced again by shoppers who are stashing bulk-sized purchases of meats, fruits and vegetables there as they work to combat rising food prices.
For the first six months of 2008, sales of bulk freezers like this one at a Home Depot in Chicago were up 7 percent from the same period in 2007.
Across the country, shoppers bought more than 1.1 million freezers during the first six months of the year – an increase of more than 7 percent from the same period last year, according to research firm NPD Group.
That amounts to nearly $400 million in freezer sales – a staggering figure compared with the rest of the home appliance sector, where industry figures show shipments are down nearly 8 percent.
I wonder how many people actually sat down to figure out how much that stand-alone freezer will add to their electric bill. I kind of like mine as a convenience, and I *think* I save money by stocking up on sales, but hooking a watt-meter to it recently, I can see the thing is drawing about 3.5 kwh per day in the summer, on average. For something like 9 cents per kwh, we’re talking $9.50 per month. And if rates rise, that cost rises in lockstep.
I have a 5 cu foot freezer in my basement, kept nearly full. I also recently hooked up a watt-hour-meter to it. My electric rates are about $0.09/kwh. It drew less than $1 a month in electricity, based on readings accumulated over 3 days. As always, your mileage may vary.
Your 5 cu ft chest freezer is definitely cheaper to run then my 20 cuft upright, that’s for sure. But also expected. If I were more concerned about the bill, I’d retire the upright and go to a chest one, but so far the difference in electrical cost, even over years, is cheaper than a new, more efficient freezer.
Note: A freezer indoors at 72 F won’t use as much juice as one in a hot garage at 85 F. But what it does use has to be extracted expensively by the air conditioner.
Oh, and as a full freezer being more efficient, no worries on that count.
I don’t do it for efficiency; I do that in case we get an extended power outage.
They do this in the tightwad gazette. She estimates $4.50 a month, and it’s from the nineties. You just have to figure out if you are making it up every month in food sales (factor in the cost of less trips to the grocery store, too, in terms of gas and time saved as well).
Freezers that are full are more energy efficient, so keep bottles or containers of frozen water in empty spaces.
You will not save electricity by freezing extra bottles of water to keep the freezer full. Really.
Sounds like one of the “momilies” that have been passed around over the decades. Given a simple thermodynamic model, it indeed does not make sense that you’d save power with a full freezer versus empty, and as you say, you have to freeze the extra water at least once, and that costs money.
Yet I keep seeing the full-freezer claim everywhere, but never with attribution to a technical source, so in my skeptical mode, I wonder if it is actually more efficient, and how. Even if so, due to things like cycling start-up and air-loss on opening, is it actually a significant difference?
I’d like to see someone actually do several long term runs (empty vs. full) like this with one of the cheap and easy-to-get watt meters out there. Maybe someone HAS done it. Hmm…
actually, it does make sense from a therm dynamic sense if you look at what a freezer does (not to be trite). A freezer chills air to lower than 32F, then circulates that air within an insulated compartment. The user opens the door to insert and retrieve items. Therefore, whenever the freezer door is opened, the volume of air that interacts with the outside air plays a large role in the amount of cooling the freezer will have to do to get the air mass back down to under 32F. Lower the air mass, and you lower amount of energy expended when the door opens and closes. Also, by keeping the water bottles in there, they basically act as a heat transfer buffer, assisting the freezer evaporator in cooling the air back down at a quicker rate. This is equivalent to eliminating “jackrabbit starts” in a car.
That said, it makes more sense to buy a smaller fridge and put no water bottles all of the time, than to buy a larger fridge and fill it partially with water bottles all the time.
Of course it doesn’t make sense to keep you freezer half full of water bottles. If, like me, you regularly fill up your freezer a few times a year and then empty it out, you are going to free up space,and that’s where the water bottles come in. You would have to be obsessive compulsive to keep your freezer 100% full every day I think.
California and texas are pretty hot. Let’s see what their energy departments suggest:
California Energy Commission:
A full refrigerator retains cold better than an empty one. If your refrigerator is nearly empty, store water-filled containers inside. The mass of cold items will enable the refrigerator to recover more quickly after the door has been opened. On the other hand, don’t overfill it, since that will interfere with the circulation of cold air inside. The simplest solution is to buy the right size for your family in the first place.
********************.
Tip for singles:
Normal sliced bread (any variety) will keep for a long time in a freezer or the freezer section of a fridge. Not brilliant for sandwiches, but makes perfectly good toast straight from the freezer to the toaster.
(The individual frozen slices separate easily, so it’s fine to freeze a whole loaf in its original packaging.)
We have a deep freeze and keep it colder than Greenland…
Energy cost: zero
(this message brought to you by the power of the Sun)
Some stock market bottom callers are throwing in the towel for 2008.
ABREAST OF THE MARKET
There’s Always Next Year
Hopes Fade for Second-Half Stock Rally
As Credit Crunch, Weak Earnings Persist
By TOM LAURICELLA
September 2, 2008; Page C1
Hopes have all but faded among investors that the stock market will be able to mount a much-anticipated second-half comeback.
Many now think a sustained rebound for stocks may not be in the cards until the middle of next year. Even then, their expectations are limited as the problems in the financial markets continue to spread rather than ease.
“Earlier in the year, we had hoped that the economy would see an uptick in the second half,” and stocks could rally, said Robert Pavlik, chief investment officer at Oaktree Asset Management, which manages some $350 million. Now, he characterizes his outlook for the stock market through the rest of 2008 as “gloomy” and hopes for “some kind of modest recovery in 2009.”
It’s certainly making a go of it today. Heck - it’s up 7% in the past month and a half. I’d call that a rebound.
(Much to this bear’s chagrin - my shorts are getting hammered; especially the homebuilders)
Hmmm….maybe time for this one to buy some more BEARX. Wish I had time for real investing, but I don’t and I suspect I don’t really have the inclination either.
I’ve been hanging with BEARX for almost a year now. It’s been a lifesaver for my portfolio. Best of all, it’s saved me the tedious research of searching out short/put opportunities, which I’ve also done (and done better with then BEARX), but those take a LOT more work and attention — as well adding a lot more stress to my life.
Whether this is a good time to jump into BEARX, I am not sure. Their time might be past, even if we only have a sad, halfhearted, prolonged recovery. If I were optimistic on BEARX, I’d buy more, but as it is, I think that despite the economic and profit problems, there are selected stocks out there that might be down to reasonably good value, and that’s where my money is going for the time being.
That said, I’m not reducing my BEARX holdings now, so I guess that says something.
Ha ha - so now the indexes are down with headlines like “declining oil prices drag down energy sector”.
I think this is so hilarious, because when the indexes are up the headlines are “Oil’s tumble sparks broad Wall Street rally” (actual headline from today), but on the flipside when oil and the indexes are up, you have “Oil surges in big bounce, lifting U.S. stocks” (actual headline from 8/21). The press just simply can’t decide whether high energy prices are good for the economy or bad.
(BTW - in case you’re wondering - they’re bad)
My question: What are the implications of this hedge fund industry news for housing prices in Greenwich and Manhattan?
Hedge Funds Are Caught in a Tight Spot
Flood of Money Slows as Industry Faces Withdrawals
By GREGORY ZUCKERMAN
September 2, 2008; Page C1
Some of the biggest hedge funds are having their worst years, and the flood of new money going into funds has slowed. That is pressuring an industry bracing for investor withdrawals and worrying about how to survive without lucrative performance fees.
Some investors willing to put new money in funds are even beginning to ask about better terms, a contrast to the situation just last year, when investors needed to beg to get into hot funds.
…
Overall, hedge funds — private partnerships that invest money for wealthy investors and institutions — are having their worst year since at least 1990, the year that Hedge Fund Research Inc. began tracking the data. The average fund lost 3.43% this year through July, faring better than the decline of 12.65% in the Standard & Poor’s 500 but below the gain of 1.05% in the Lehman Brothers bond index. August data haven’t been calculated yet.
“You would think that investors would view hedge funds as having a good relative year, but my strong sense, however, is that most people are not pleased,” says Reid Bernstein, who runs OneCapital Management Partners, a New York firm that invests in hedge funds. “Down is down and as the saying goes, you can’t eat relative returns.”
Greenwich mean time, for wishful sellers of overpriced real estate.
+1
Once upon a time, in a land far away…
The scent of Fall was creeping into the air in the midwest evenings.
Excited kids of all sizes were off to school or college.
Some oak leaves were falling, Autumn was coming.
The Pumpkins were getting fat and happy.
Halloween was just around the corner.
Christmas lists and plans were no longer a distant Dream.
And America and the whole planet held their breath and patiently awaited NAR’s Spring Bounce…to Pounce and save their Financial World.
Hey…Everyone deseves a FAIRY TALE now and then
Kids in college? Yikes! I recall when I was in college and in my early 20s I hated it when older people called me by “hey kid!”
“Good relative year” despite losing 3.43% through July? My checking account easily outperformed these knuckleheads; they would actually have done a better job for their clients had they stayed home for the past 8 months.
There was a long-but-interesting article in the New Yorker recently about Greenwich, CT, and its real estate market — its gauche upper-end is deeply tied to the flashy hedge fund culture, and thus enthusiasm and sales are way, way down.
What happens when the downturn goes upmarket?
Check list:
1. Ubermansions built on spec for Wall Street tycoons.
2. Wall Street is laying off people in record numbers, not paying in record numbers anymore.
I have to wonder to what extent this news is distorted by the advent of the 401(K) revolution. If they were not counting 401(K) plan stock allocations as “retail ownership,” the statistics would be questionable.
Retail investors in US equities hits low
By Deborah Brewster in New York
Published: September 1 2008 23:39 | Last updated: September 1 2008 23:39
Individual ownership of US stocks has fallen to a record low, underscoring the increasing importance of institutional investors in domestic equity markets, according to a report to be released today.
Retail investors owned 34 per cent of all shares and 24 per cent of stock in the top 1,000 companies at the end of 2006, the last year for which figures are available, said the Conference Board, an industry group. Both numbers are record lows.
By contrast, individual investors owned 94 per cent of all stocks in 1950 and 63 per cent of all shares in 1980, the group’s 2008 Institutional Investment Report said.
Interesting. Does that mean:
A. The American public (retail investors) is out of touch with real values (institutional)
B. The institutional investors are out of touch with real values
C. The American public is broke and needs cash, and retail is more liquid than institutional.
Also dumb question - but which of the following are considered retail vs. institutional? (And what others might I be missing)
- Individual investments in mutual funds (e.g. in brokerage or IRA)
- 401(k) investments
- Corporate stock investments
- Others?
Yep. Could mean that stocks are a good contarian deal.
On the other hand, gold is still too popular, and not as contrarian as equities.
Any HBB tales from the long weekend?
I am spending some time in San Fran/Carmel. I went to a few open houses in both out of curiosity. I tried talking to the agents about price. They kept assuring me that things were stable, and they were not noticing any declines (except in the nasty burbs), just taking a little longer to sell. It was odd because most of prices on the fliers said “reduced to. . .” Why would they intentionally over price them to begin with if they were taking longer to sell? I saw a few nice one bedrooms in ok locations in San Fran for around 700k. The Reators assured me that they could rent for $3k a month easily (they were so confused by me at that point I didnt bother mentioning that wasnt positive cash flow). I was more shocked by prices in Carmel. Small shacks on small lots with “pee-a-boo” views (e.g., if you stand on one leg and stretch your neck while on the roof, and if the wind blows a certain way, you might see a glimpse of the pacific) were well over a million. Reading the stories I thought Cali was almost halfway done. I dont have the feeling anymore, maybe if I went to the Inland Empire.
Once I mentioned by belief that we should return to positive cash flow properties, which meant at least another 40% off, the Realtors either ignored me or became very rude. No really good points, just mindless babble about California being different and whatever house they were in was always the “safe” location immune from a downturn because it was so special. Started sounding like religion, e.g., dont question it you wouldnt understand, it’s much more complicated than your mind could understand anways, you just need faith and do and believe what I tell you to, because if you dont you will regret it later; so I only pushed it so far.
What your drive-bys didn’t tell you was…
A good percentage of those places you’ve looked at, have been HELOC’d to debt.
That’s the real story about affluent areas of California, and not so affluent areas as well.
True. Without an enormous down payment, to live comfortably in a house over a million, you need to make at least 350k in my opinion. I wouldn’t do it unless I made more than 500k (and I felt I was getting a good price). I know California has high wages but I cant believe there are enough 350k plus jobs to support all the million dollar plus housing. I do get a perverse sense of satisfaction of seeing all those ppl making less than me, but living large like they were millionares taking it in the @#$.
That said, it was a great trip. 65-75 and sunny every day, and I miss the ocean living in Denver. Sure my job is at risk, but hell I’m a renter with lots of savings and holding all cash equivalents (e.g., im hedged - the worse it gets, the better chances for huge rewards on investing my savings). If I took the advice of my friends and family and bought that million dollar crapper, I wouldnt be in the mood to go anywhere.
Well, I spent my holiday in the thriving metropolis of Chowchilla California…:)…Stayed in a nice R/V park that is also a massive gated housing community on a golf course….Obvious foreclosures everywhere…Furthermore, subdivisions in place with streets, curbs, sidewalks and street lights but no houses…Thousands of them….
I was driving past Chowchilla on the 99 a few years ago, and there was quite an elaborate huge welcoming sign on the side of the road that proclaimed “Chowchilla, A Unique Way Of Life!”
Just a hundred yards down the road was a much smaller sign that said “Central California Women’s Facility, next right”
http://en.wikipedia.org/wiki/Central_California_Women’s_Facility
“The largest female correctional facility in the United States.”
“Reading the stories I thought Cali was almost halfway done. I dont have the feeling anymore, maybe if I went to the Inland Empire.”
Not even close to half way done in the nicer areas. Small Craftsman in the Hillcrest/Mission Hills area (no more than 2 bedrooms, only one carport space) with a list price of $525K. The neighborhood’s decent. The house is nothing special. With 20 percent down and no more than 2.5-3 times income, you’d need about $100K down and an annual household income of $125-150K. What percentage of the local population can come up with both? Five percent? Less? It’s not even close to the nicest 5 percent of housing in this county when considering the property and the location. Prices in the nicer areas still have a long, long way to fall
I’m still seeing the same places for sale, month after month, with no sales and no price adjustments. The “adopted” loft across the street from my apartment was originally listed in early March at $750K, adjusted in late April to $699-750, also available for rent in late May for $2750/month. Rental and for sale signs came down in late July. The for sale sign (same agent as earlier) went back up in late August with a listing price of $750K.
There are a few things that seem very odd. Even though this loft and the second identical companion loft (not for sale) have been completed since March, there’s been someone over almost every non-weekend day since then doing some type of work. The unit that is not for sale has furniture in it, but does not seem occupied. I’ve never seen lights on at night in either unit. I did see a broad in a high-end German convertible stop by last week to pick up the mail. I can’t quite figure out what’s going on there.
I’m seeing the same out in my East Bay hood. Prices were kissing north of 600k last year for a typical Craftsman bungalow. Now they’re 575k. Big woop-de-doo. Not much of a reduction if you ask me. But… Nothing seems to be selling over 500k. Of those that have sold, the majority around here are in the 400-450k range. Still way overpriced because these tend to be tiny little “starter” homes that aren’t half as nice as the house I rent. Even if I bought a rock-bottom starter at say- 400k, my rent is still a lot cheaper.
I get a bad feeling that prices in the Bay Area- at least in the “nice” areas are going to simply stagnate for years and the reductions will take the form of the effect of wage inflation catching up at some point.Nobody seems to really be dropping the prices dramatically, and for some, leaving the home up for sale for sometimes years seems perfectly a-ok.
I could really care less though. Me and my Wife have been saving for almost 10 years and have enough to buy outright just about anywhere else. We’re only here to ride out the recession and save more. The longer I stay in the BA, the more I actually really hate it. So many pretentious, stuck-up people who think that this area is the best on the planet.
What I found out is that most people are at the limit. They cannont lower the price or they have to bring money to the table. They either get there price or they have to foreclose.
My old neighbor, bought in 1998, heloc’d twice, option ARM, rate adjusted and he has not paid his mortgage for 4 months. No notice of default. He has it listed as a short sale. I told him don’t even worry about packing. The banks are screwed and don’t have time or money to foreclose or they would have started the procedure by now.
Oh and since he is not paying the mortgage anymore that means the bank paid for his Harley and new car. Down the street is the same situation. The bank paid for his 2 new SeeDoo’s and new car. I sold mine in 2006 and since it has been sitting empty for 6 months after the buyer bailed I guess the bank paid for my new car back in 2006.
People in the Bay Area think it’s the best place on earth because that’s what KPIX says it is.
Or at least they used to.
My theory: The furniture is just part of (professional) staging. i.e. its been made to be looked lived in, so the sellers don’t look (so) desperate.
“Any HBB tales from the long weekend?”
Good God… I’m not going to bore you all with a play by play of my koolade drinking brothers at our family reunion in VT but these believers are beyond dense. What I can tell you is the 4sale signs in VT and upstate NY are *everywhere*. Of course that is nothing new to us HBB’ers but the believers have a clear cut disconnect between the mountainous inventory and prices. They don’t see the connection *at all*. Further, what I heard constantly from family RE Heads is “oh, that place is worth $xx”. They were stopped dead in their thoughts when I responded with “find a buyer at that price”. These guys would short circuit when I said this. Typically it took 5 minutes for them to sputter some insane garbage in order to counter my response which I brought it right back to “find a buyer at that price”.
It works.
Bet you were really popular too that evening. LOL
Yeah. ….. But the difference is I was confident and my words were clear. These guys we’re acting as if they were in a panic everytime I told the truth.
LOL. I had a similar reaction when discussing with mortgage broker friends the topic of lending standards coming back. It was as if they couldn’t make a living if we returned to a normal lending environment.
These guys are like crack dealers. It’s pretty obvious to me that they used every legal means to put anyone in a house and to keep them in refinance mode every few years to keep cashing in on fees.
Hey, don’t get me wrong. I’m pro-cruelty on this subject.
I would’ve laughed in their faces too.
BWAHAHAHHAHAHAHHAHAHHHHHHHHHHHHHH!!!
We bought a new dishwasher this weekend. The salesman was a former realtor in Florida. He said that the market in Florida is so bad that it makes the Larimer county market look good (which it is not). He said that he has been selling a lot of cheap (~$200) dishwashers to people here who have bought foreclosures and are fixing them to become rentals.
Note to self…..will be looking at Craigslist for $50 new dishwashers in 6 months once those knife-catches sell appliances to make ends meet
Ogunquit, ME: No vacancies anywhere I noticed.
Same inching ride down Route 1 I’ve experienced since 1980.
Still a 20 minute wait for a table at Congdon’s Donuts for breakfast. Billy’s Chowder House hopping as usual.
Looks like 10% of Ogunquit SFH is for sale however. My fave NH beach parking lot was still pretty full on the weekend despite the $15 fee. Monday reminded me of Don Henley’s “Boys of Summer”, a song about an empty tourist town after the crowds go home.
Bartlett, NH Campground: No vacancies. I didn’t see too many SFHs for sale on Route 16 through the NH Lakes vacation home region on the drive from the Coast. Other than that I wasn’t around a lot of houses.
Greater Boston area: One set of friends reported deciding between self insurance payment and mortgage to determine which one would be late like last month. These people did not overpay for a home they bought in about 1995. They have not made any additions or improvements. They both drive older, smaller cars. He has a PhD and his own business. She does contract work on the side. I don’t know what lead to the issue she mentioned to me in passing but they are not your typical FBs. (In the medical field, I know insurance costs are killing them.)
Second group of friends still in life is a party mode. He scored big in sales last year (and reported no slow down this year) He told me the details of a corporate awarded trip to Hawaii where every night they received still more gifts. It started w/towels and tee shirts but ended with i-phones and outdoor furniture which was going to be packaged and Fed Exed back to the sales persons home in the state. They stayed in $500/night condos due to overbooking of hotel rooms. The condoes were newly built but unsold. (I think my friend paid for some of that) That price was heavily discounted.
His firm conducts business research. Looks like his client companies are still doing quite well and paying his employer well. This couple has heavily invested in updates to their home. It is the only home they’ve owned (added an addition to an origianlly modest size) and I think it is considered their forever home. I’ve worried about their circumstances but it appears his 90 hour work weeks have lead to real success. They’re good people. I hope things continue to go well for them.
If you listen to CNN and other mainstream media outfits, one would be led to believe that no one is working and all people are suffering. Some of us who live within our means and have a tangible skill are doing very well right now.
Visited a friend in Forest Hills. Saw a “For Rent” sign on one of those brand new bus shelters, which are normally barren. Glancing at it, I think it was a co-op.
I noticed that two furniture chains in the North Texas area are advertising 10% off for cash purchases.
Make me think all is not well in the furniture world.
This will end well.
U.K. Suspends Homebuyer Tax in Moves to Reverse Slump (Update3)
By Gonzalo Vina
Sept. 2 (Bloomberg) — Prime Minister Gordon Brown suspended a tax on buying some homes for the first time since 1991 and brought forward 1 billion pounds ($1.8 billion) of spending in an effort to revive the U.K. economy.
Residential properties worth less than 175,000 pounds will be exempt from stamp duty for a year under plans announced by the Treasury today. The government also will help 16,000 people struggling to meet mortgage payments and another 10,000 to buy their first home.
The pound dropped, continuing the biggest rout in 16 years, as concerns grow that a dearth of lending will tip the British economy into recession. Banks approved 33,000 mortgages in July, a quarter of the level of a year ago, after a worldwide credit crunch dried up funding for loans.
“Until more funding is available we are still some way from restoring long-term stability to the housing and mortgage markets,” said Michael Coogan, director general of the Council of Mortgage Lenders, which represents banks making home loans. “There are no easy solutions to some of these problems.”
…
…The opposition said the measures don’t go far enough.
“This is a short term survival plan for the prime minister, not a long term recovery plan for the economy,” said George Osborne, a Conservative lawmaker who speaks on finance. “Most families will not be helped and the micro measures announced.”
Chancellor of the Exchequer Alistair Darling said the measure would help half of all homebuyers. The stamp duty move effectively raises the current threshold for paying the tax from 125,000 pounds and means the buyer of a 175,000-pound home will save 1,750 pounds.
“We face a unique set of circumstances that we have not seen in a generation,” Darling said in an interview broadcast on U.K. television channels. “I remain optimistic that we can get through it. We will get through it.”
Cont’d
http://www.bloomberg.com/apps/news?pid=20601085&sid=aemgBi2VlecQ&refer=europe
Leigh
“I remain optimistic that we can get through it. We will get through it.”
This in an interesting concept.
Chuck Steak will “get through” the meat grinder, emerging as Ham Burger.
“I remain optimistic that we can get through it. We will get through it.”
Well, it’s reassuring that he doesn’t think everyone in England will actually die from housing price instability. phew.
It’s not the getting through, it’s the shape your in on the other side, my Darling.
…or rather the shape *you’re* in, my dear…
Las Cruces, NM Things were different here until they weren’t anymore. I know of one contractor sitting on 20 homes he can’t sell and now he trying to rent them instead.
http://www.lcsun-news.com/business/ci_10352839
A total of 1,448 homes sold through the first six months of 2006, 1,280 in the first half of 2007 and 900 during the first six months of 2008. Although the average price continues to rise, there has been a decline of more than $100 million in volume. In 2006, the dollar volume in the first six months was $300,490,808. For the same period this year, it was $193,740,764.
When Picking Stocks, Ignore the News
(from Lo’s blog last Nov)
“August 1, 2007: I had a chance to put together a list of my ten favorite financial sector stocks right here. Once again the market is overly pessimistic about things and that’s forced a number of stocks to levels where they’re deeply undervalued, in some cases stupidly undervalued.
October 29, 2007: I was early rather than late when I bought a ton of financials back in August, and I’m sitting on some pretty large losses now (especially in WM). I thought they were cheap then, and obviously think they’re a lot cheaper now. Bargains can become bigger bargains, alas. I’m not day trading these stocks, I plan to hold them for many years, and I’m not overly worried (though if dividends get slashed that would definitely disturb me). I’m sitting tight. ”
and
“…When stocks fall sharply, a lot of people start thinking about picking up bargains: “it’s human nature to do this,” says Lo, “because we perceive prices on a relative basis, relative to what it has been in the recent past”.
But such temptation should be resisted, at least by buy-and-hold investors. Here’s Lo’s advice, which I’d tell every retail investor to print out in all caps and read every time they’re thinking of making a trade:
Investing tends to work best long after the story has left the front page….”
http://www.portfolio.com/views/blogs/market-movers/2008/09/02/when-picking-stocks-ignore-the-news
I enjoy bottom picker stories. I do agree, buy when it is no longer in the news.
Bargains can become bigger bargains, alas
lol. No big deal I guess as long as you aren’t funding the bargain.
As an avid Pacific Northwest cyclist I share the following: “What do you call the day after it stops raining? Monday!”
A Few Banks We Like: NTRS, USB, WFSL, SCHW, BOH
September 2, 2008
http://us1.institutionalriskanalytics.com/pub/IRAstory.asp?tag=304
A good analysis for interested parties in the 5 best banks in the US. The only one I might question is Bank of Hawaii. I think Hawaii RE and CRE is hurting, it is hard to determine this banks exposure.
At the FDIC limit with my IRA’s at Washington Federal S&L; been with ‘em 12+ years. Safest, *SANEST* S&L I’ve found.
In yesterday’s L.A. Times, there was an IndyMac Bank ad offering 4.15% on 7 month cd’s…
Surprisingly high, since Indymac, until sold, is a guaranteed part of the Federal Reserve and treasury. Buy Indymac 1 yr cd/ Short 1 yr note at 1.97%.
“security.”
Is what the ad states @ the top…
ha ha
….and only Pac NW bank with a AAA rating
http://biz.yahoo.com/ap/080902/oil_prices.html
A few more days like this, maybe Hummers will become fashionable again.
Another lower your expectations piece.
“Some Chicago real estate agents report the trend of first-timers who presume they’re going to get the best houses out there for a song.
“Their expectations are unrealistic,” said Dympna Fay-Hart, an agent for Century 21 McMullen in Chicago. “They make lowball offers based on no consensus of gathered info. They’re interested in coming in 10 to 20 percent under for houses that are well priced.”
And what gathered info are real estate agents and sellers making listing prices on?
http://www.chicagotribune.com/classified/realestate/news/chi-re-umberger-picky-buyers-083aug31,0,998113.column
“Your own worst enemy is yourself,” Shannon said. “You have to stay within your means. We had to ask ourselves, do we want to be house-poor or do we want to go on that vacation next year?”
I can hardly believe my eyes. This sentiment has reached the real estate section of the Tribune? Times are indeed a changin’!
They probably have been reading this blog.
Well, sanity returns once “negative gearing” no longer yields returns.
That vacation starts looking really good compared to returns on leveraged housing.
BWAHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHHHHH!!!
“Gustav, you are no Katrina…”
September 2, 2008 9:55 A.M.ET
BULLETIN
DOW INDUSTRIALS UP 200 POINTS EARLY TUESDAY AS CRUDE TRADES AS LOW AS $105.46
Bulls charge in as oil dives
Post–Labor Day stock rally in cards as “storm of the century” exacts a limited toll, taking an ax to the price of crude-oil futures.
Dow 11,763.63 +220.08
Nasdaq 2,410.83 +43.31
S&P 500 1,300.79 +17.96
10-year 3.85% +0.04
Oil $107.00 -$8.46
Gold $798.30 -$36.90
Oh my word. A 20% haircut for gold. Only another 50% to go.
PETER BRIMELOW
Radical gold bugs say manipulation will fail
By Peter Brimelow, MarketWatch
Last update: 12:01 a.m. EDT Sept. 2, 2008
NEW YORK (MarketWatch) — Down but not out. The radical gold bugs have taken some body blows recently, but they’re still fighting, and gold is still struggling back.
When I last wrote about gold, I announced I was changing my formula. (See Aug. 11 column).
My previous three columns had noted that gold’s fundamentals were favorable and that it appeared to be breaking out technically, perhaps beginning its long-heralded blow-off.
All were promptly followed by sharp gold price declines.
I see that as of this morning the DJIA is up 200+ points and oil is trading around $107/bbl. All because Gustav didn’t destroy New Orleans. But I am having trouble finding any news about our oil infrastructure. Gustav was pretty darn close to a direct hit on the Louisiana Offshore Oil Port (the ONLY place in the US that super-tankers can offload oil) as well as Port Fourchon (virtually all oil services for the offshore rigs works out of this port).
The only news I can find is that the only road to Port Fourchon is underwater and nobody knows if the road is damaged. At least 15% of the nations oil needs are shut down with absolutely no knowledge of damage.
I don’t know about the Port, but a CNBC commentator (Mary Thompson?) has been at Lake Charles during Gustav’s passage.
She has been reporting this morning (your time) that the refineries in the area have suffered very little, if any, damage.
Gas is selling in the $3.50 range out here. I wonder how much lower it will go before skyrocketing again next year?
Of note, I have switched to working at home 2 days a week now. I’m lucky I can do that.
On the other hand our 17 year old daughter got her license of Friday. Our auto insurance bill doubled.
Only doubled? Such a deal!!!!
Actually, it went up about 130%! She is looking for a job to help pull her weight.
You’re right, pretty much a direct hit. Seems that because it doged New Orleans, everyone is relaxing, but the bulk of oil doesn’t go near New Orleans. Refineries, per my contacts there, seem to be mostly unscathed, at least. But the pipelines from LOOP and on into the distribution centers? No idea. Even the pipline companies might not know. As for the road, they can probably manage without that for a while: Fly in people, barge in equipment. Expensive but doable.
The good thing is that the storm weakened a bit as it approached, so the pipeline disruption outside of the Fourchon area is almost certainly a lot less than Katrina+Rita, even given the path.
I didn’t think I would buy oil over 100 but I am considering it here. Selloff looks like a knee-jerk reaction; plenty more hurricanes out there, and basic fundamentals unchanged.
I would also like to buy some PMs but the physical price isn’t following the fantasy ’spot’ price. Silver -5% on paper, but holding steady in the physical market, if you can find any to buy. Considered going into the futures market and standing for delivery but I really don’t want to have to dig a hole in the yard big enough to hide a 1000oz bar from the Roaving Hoardes of Starving Masses. Plus there is the paper trail to consider, so nix that idea.
Consider http://www.goldmoney.com for your silver purchases, store it in Zurich.
More hurricanes? Nothing compared to tens of millions of more motorists in China and India the next few years. Rising Demand for oil in the long run of means the price of that resource will go up. How long can people keep denying that economic law of supply and demand?
Enjoy the $107 per barrel price for now. Could go as low as $80. But the fact remains that demand will grow higher while supply will shrink.
The price managers opened up a sunday trading session for oil in order to guarantee it remains within the planned scenario. Anyone care to guess when this has ever happened before?
http://www.hemscott.com/news/static/tfn/item.do?newsId=66833986289740
What about the menage-a-trois of Hanna, Ike & Josephine?
That could be dead sexy…
I was in Vegas this past weekend and went around by car a bit. (Took the dam tour, etc.) I was amazed to see construction all the way up to the county line. That area is massively overbuilt.
Attendance at the hotels seemed down. Plenty of empty rooms at the Venetian, where we stayed. And this was a holiday weekend! No problem getting seated for dinner anywhere at any time.
I even got to go onstage with The Amazing Jonathan
http://farm4.static.flickr.com/3099/2821036759_4f583cf0c8_o.jpg
…and was up there through the entire show….
To really get a feel for the disaster that the greater Pavlovegas area truly is, do a drive-by of Henderson @ night, and see how dark all of those empty homes are, for yourself.
Sounds like you had a fun time.
This talk of merging Fannie into Freddie, almost sounds as cornball as those tv commercials that will magically combine all your debt into one easy payment…
“…merging Fannie into Freddie…”
I am glad you did not say ‘merging Freddie into Fannie’…
Then it would be “Hemorphakiting”
Just like all the great CDOs, mix two or more subprimes together and get a AAA rating. So merge these two rat houses together and it’ll be fine. No problems.
Construction spending fell 0.6 percent in July as housing slowed to weakest pace since 2001
http://biz.yahoo.com/ap/080902/construction.html
The Commerce Department reported Tuesday that construction spending declined 0.6 percent in July, double the 0.3 percent decrease analysts had been expecting.
Housing activity fell for a 16th consecutive month, declining 2.3 percent to a seasonally adjusted annual rate of $357.8 billion. That was the lowest level since March 2001, the start of the last recession.
It appears that as long as oil is cheaper these disturbing stats don’t seem to mean a thing to the markets ascent today.
it’s looks like they are testing the laws of gravity again.
dow, nasdaq and s&p in the red, looks like the law of gravity won!
Newton breathes a sigh of relief.
The stock market is cheering the news that residential construction is dropping at a 24 percent annualized rate. I guess a record crash in construction is a sure sign that a bottom cannot be far off?
Apparently they woke up from their stupor and smelled the coffee. The Dow, NASDAQ and S&P indices all closed down.
From cnn.money.com:
“BREAKING NEWS: Stocks end lower as relief over falling oil prices turns to concern over the possibility of a global economic slowdown. More soon.”
Looks like Goldilocks is having trouble finding babybear’s chair, bowl & bed.
These relief rallies are getting a lot shorter.
I read the hard copy of this article that was printed a few weeks ago. Here are some portions dealing with a Fannie Mae stink house in Arizona (and some witless city employees).
“Lynn Hadaway is at her wit’s end.
The Greenway Parc resident is exhausting nearly every avenue in an attempt to clean up an abandoned home in the 15700 block of Watson Lane that has deteriorated to unthinkable levels.
‘I have been fighting this for about 15 months now,’ Ms. Hadaway explained last week as she entered a meeting with city officials. ‘It is really, really bad. There is a noticeable stench you can smell from the street, there is mold, there are thousands of cockroaches in there. We have to do something.’
Ms. Hadaway arrived at Surprise City Hall Aug. 5 for a sit-down session with Assistant City Manager Kathy Rice and District 3 Councilman John Williams.”
—
“The home is in foreclosure and is owned by Fannie Mae. Unfortunately, the Fannie Mae office that owns the home is located in Nebraska and attempts to reach the organization have been unsuccessful.
‘The city has sent them certified letters, but we’ve heard nothing,’ Ms. Rice said.”
—
“Ms. Hadaway said a water hose was left running inside the home and seeds were spread on the floor – now, there appears to be grass growing from the carpet.
The water at the home has since been shut off.
Ms. Hadaway believes the home could be posing a health hazard to others in the neighborhood.”
http://www.newszapforums.com/forum8/64904.html
Just another way people who had nothing to do with The Bubble are being made to pay for it! Nobody will buy the houses next to this abandoned mess at any price. The previous owners, Fannie/Freddie, and the Federal Government have effectively stolen Lynn Hadaway’s home.
One issue unaddressed in the article - does the grass inside the home meet the HOA’s 6″ maximum requirement?
There are many similarly situated houses in the area, although the indoor grass is probably an exception. I know of several steps beyond certified mailings that the city and county can take; I will e-mail the info to the city manager and assistant manager so that they can not claim ignorance in the future.
I am also curious where the city attorney is on this. Telling assistant city managers their options is his job. Maricopa County has been heavily advertising their phone number for reporting green pools or other standing water, but this bug colony must not fit their guidelines.
Oh why oh why did I listen to you crazy people! I should have bought while I had my chance. Our median price for a home is $900,000, which is totally worth it if you consider that it now costs $50,000 a month to rent a modest 3-bedroom in the suburbs:
http://vancouver.en.craigslist.ca/apa/823131901.html
hahahahaha!
So which move looks more blunderous?
Harriet Miers as Supreme Court material
or
Sarah Palin as Vice President material
Harriet Myers would have had far more power. A far more dangerous person as a result.
Who cares about a person that is going to have a job “not worth a bucket of warm shit”? (The language was changed in the original quote to make it printable. Although in many ways the de facto president of the US has been vice president Cheney.)
It is a shame that the republican party has turned into a Christian mouth piece espousing intelligent design and dubious religious practices. If the republican party stuck with fiscal responsibility, we would be in far better shape.
“America is a Christian nation.”
Andrew Carnegie
“Carnegie, so is Hell.”
Mark Twain
Hoz:
Unfortunately, the republicans saw no other possible way to win in November, other than appealing to it’s hocus-pocus-focus on the family minions.
There’s a reason of a doubt about the drought of reason…
Sarah Palin = Female version of Ted Nugent.
I don’t think he’s Vice-Presidetial material.
In fact, if you are going to the trouble, Why not TED??
Ted’s handy with a chainsaw, massacre.
http://www.mtv.com/news/articles/1484363/20040114/nugent_ted.jhtml
The issue is, should McNutts fall victim to another bout of cancer - one which does him in - do you believe this woman could step into his shoes?
Guess we’ll find out in November. No real negative poll movement for McCain yet, so I’d say as far as winning the election goes it would be hard to call a blunder.
What gives with financials today? SKF is taking a beating–down 4.25% at the moment.
I can see Gustav relief affecting oil/energy, but financials??
A one-month 2.3 percent decrease in private home building occurs at a 24 percent annualized rate of decline — pretty steep considering how far construction has already dropped.
((1-2.3/100)^12-1)*100 = -24.36
UPDATE 1-US July construction spending down on housing slump
Tue Sep 2, 2008 3:12pm EDT
(Adds detail, market reaction)
WASHINGTON, Sept 2 (Reuters) - U.S. construction spending fell a steeper-than-expected 0.6 percent in July as private home building reached a more than seven year low, a Commerce Department report showed on Tuesday.
Spending on construction in July fell to a seasonally adjusted annual rate of $1.084 trillion, the lowest since February.
However, spending for June was revised to an increase of 0.3 percent from the 0.4 percent decline originally reported. Analysts polled by Reuters before the report were expecting a 0.4 percent decrease in construction spending in July from June’s initial reading.
Private home building was off 2.3 percent in July, the 16th consecutive decrease, bringing private residential construction to the lowest level since March 2001.
Public construction, including state and local as well as federal building, set record highs in signs of strength for the sector.
It’s Time to Get Real About Real Estate
By Peter Schiff
http://www.moneymorning.com/2008/09/02/housing-market/
Therefore it is sellers, builders and those holding or insuring existing mortgages who lose, while buyers win big. There’s a reason for that: Despite higher interest rates and larger down payments, they end up borrowing a lot less money. In the end they will become true homeowners, rather than indentured servants. If home ownership is truly the American dream that so many realtors profess, then the ongoing collapse in home prices will actually be a dream come true.
I liked this paragraph:
“In January 1996, the Case Shiller 10-city composite home price index stood at 76. By June 2006 it had tripled to 226 - by far, the largest increase in U.S. history. Since then, the index has pulled back by 20% to 180. For those who believed that home prices could never retreat nationally, this 20% correction is more than enough. In reality, it’s just the down payment.“
“Despite higher interest rates and larger down payments, they end up borrowing a lot less money.”
There’s the kicker. Where will people get this “saved money”?
(Well - people that aren’t HBBers and the like; i.e. most of the general populace)
HELOC = Cashtration
Huge turnaround in the market; morning bulls gored in the afternoon. Doji, doji everywhere and naught but oil to drink, so I bought some under 108. Sometimes they do ring a bell at the top.
IRWIN KELLNER
Labored days
Commentary: Housing stabilization will lead the overall recovery
By Irwin Kellner, MarketWatch
Last update: 9:32 a.m. EDT Sept. 2, 2008
PORT WASHINGTON, N.Y. (MarketWatch) — As the economy rounds the Labor Day turn, it continues to grapple with three crises.
Three years ago, the housing bubble burst. That set the stage for a pullback in new-home construction and consumer spending as home sales and prices began to fall.
When it became apparent that many home loans were not held by the banks, but turned into securities and sold, a financial crisis developed, since holders of these securities had no way of knowing their value. This led to a credit crunch, and a severe pullback in bank lending.
In an effort to ameliorate the effects of this credit squeeze, the Federal Reserve pumped loads of liquidity into the financial system, eventually producing the third crisis: inflation.
Now the question is when will these three crises end?
…
Since this whole mess started with housing becoming irrationally exuberant, it must end with a return to sanity in this key sector of our economy. And in spite of what you may have read or heard about the “unprecedented” decline in home prices, normal housing prices are still beyond the horizon.
According to the latest data from the Census Bureau and the National Association of Realtors, median home prices in July equaled 3.6 times median household incomes. This may be down from the peak of four times incomes set back in 2005, but it is still far above the 2.9 times of the 1980s — when housing was more affordable and sales and construction grew at a steady pace.
In the halcyon days of the early 1970s, when home sales and construction were at their peaks both in absolute terms and relative to the size of the population, the ratio of home prices to incomes was less than 2.5.
To get back to the average of the 1980s, home prices would have to fall another 20%, on average. Add another 10 percentage points decline for housing to be as affordable as it was in the 1970s.
Of course, these ratios could be reached through a rise in household incomes. But this would take much longer, since incomes are growing less than 2% per year these days, owing to the drop in employment and the inability of workers to secure raises.
Simply put, the first step on the road to recovery is lower housing prices. We will know when they are low enough to be affordable when sales pick up and the inventory of unsold homes begins to decline.
I believe there are less than 18,000 homes currently shown on the San Diego MLS. I compared that to the foreclosure numbers on RealtyTrac.com:
Search Results in San Diego County
38,873 Properties match your search.
Pre-Foreclosure
13,285 Properties
Auction
6,604 Properties
Bank-Owned
18,146 Properties
Govt Owned
1 Property
FSBO
118 Properties
Resale Homes
719 Properties
————————————————————————-
Any thoughts on when the banks will get around to unloading their 18,000+ REO properties on the MLS?
November 17th at 11:42 am? Yep, 18,000 listings will be put on at once, crashing the system and showing 0 availability. Of course, the used home salepeople will claim a massive housing shortage in San Diego as for 6 minutes not a single home was for sale.
still bargaining.
shell games continue. when is the depression over?
Go tell the Spartans, stranger passing by,
that here, obedient to their laws, we lie.
— Simonides of Ceos
2:47PM Deere to close Welland, Ontario, factory and transfer production to other facilities (DE) 69.11 -1.46 : Co announces it will close its manufacturing facility in Welland, Ontario, Canada, and transfer production to company operations in Wisconsin and Mexico. The Welland factory manufactures utility vehicles and attachments for the commercial and consumer equipment and agricultural equipment businesses. Deere said that by consolidating manufacturing capacity the move supports ongoing company-wide efforts aimed at improved efficiency and profitability. Approximately 800 employees will be affected by the closure. Today’s action is expected to result in after-tax charges of approximately $90 million, about half of which will be recorded in Q4 of 2008. This amount was not reflected in the co’s earnings forecast for the quarter of $425 mln issued last month.
http://finance.yahoo.com/marketupdate/inplay
i wonder how well that containment plan is working for the FED?
Uh….aren’t those lost jobs in Canada?
Isn’t Canada a part of the US that doesn’t have to pay taxes to Washington?
Take it from an economist who works for a Swiss investment bank…
The Fed is right to focus on providing liquidity
By George Magnus
Published: September 1 2008 18:31 | Last updated: September 1 2008 18:31
Anyone mention Lehman Ospreaie hedge bailing today? They have lost 38% so far this year, and just on CNBC probably the reason for the big commodity crash, and market reversal this morn…Selling off all their positions and returning money back to investors..down 5% after hours so far.