September 19, 2008

Now The Paper Castle Is Tumbling Down

It’s Friday desk clearing time for this blogger. “A 91 percent spike in foreclosure sales dropped the August median house price in Santa Cruz County 24 percent from a year ago. The new single-family home median landed at $582,000 compared to $770,000 in 2007 and $607,500 in July. The last time the median hit such a mark was in February 2004 when it settled at $560,000.”

“August’s median, calculated by Gary Gangnes of Real Options Realty, stunned UC Santa Cruz economics professor Michael Hutchison.”

“‘That can’t be Santa Cruz,’ said Hutchison. ‘It’s come down more than I would have expected. People have been saying coastal real estate would hold up better, but we’re seeing a decline that matches other areas.’”

“The flood of foreclosures is due to ‘very creative loans that should never have been allowed,’ said Scotts Valley real estate agent Nick Vrolyk. Vrolyk represented buyer and seller when a foreclosed Corralitos home sold in August. The home, purchased for $700,000, sold for $133,875.”

“Hutchison sees speculative buying as a factor in the run-up. ‘People were willing to pay higher prices because they anticipated increases in value,’ he said. ‘That price expectation has been blown away.’”

“Many Americans are discovering an unfortunate twist to the housing crisis: even after selling a home and moving away, they might have to keep paying on it for years, even decades. Mike and Linda Kelly needed to sell their house in the foreclosure-plagued Central Valley of California when Mr. Kelly got a new job 75 miles away.”

“The Kellys owe $300,000 on their house. But the best offer they could get gave the bank $220,000. CitiMortgage said it would approve a sale at that price, but at the last minute told the Kellys they needed to pay $166 a month for the next 20 years, a total of $40,000.”

“‘When you are ready to participate in the loss, feel free to call me,’ a Citi loss mitigation specialist wrote to them in an e-mail message.”

“Stacie Warner called her mortgage holder when she lost her job as a medical receptionist last November. She hoped to avoid foreclosure on her home in Palmetto, but it didn’t work.”

“‘We’ve been told loss mitigation that you can not talk to them that they will contact you so we sit here wondering every day if the phone’s going to ring, when the phone does ring it’s the mortgage company asking for money not saying we’re willing to help,’ said Warner.”

“The state’s housing market has slowed significantly, which has been a topic of discussion this week during the Alabama Association of Realtors convention. Randy McKinney, owner of Realty Executives Gulf Coast, said that after Ivan in 2004, the condo-flipping market heated up, but after Hurricane Katrina in 2005, the market cooled down. Condo owners were stuck with mortgages worth more than the actual property.”

“‘They gambled - they lost the gamble,’ McKinney said.”

“While many people across the country are worried about the effects the crashing American economy may have on Canada, Calgarians are no different. Homeowner Maryanne Bishop worries the markets will affect the price of her house, which she was set to sell. ‘The housing market is already slowing down and I’m worried what this will do to it, now.’”

“Foreclosure sales in Scottsdale in August more than doubled from a year ago…according to the monthly report from the Arizona State University Realty Studies Department. Scottsdale’s median price last month for traditional home sales was $447,500, down 20 percent from a year ago.”

“Only about 2 percent of homes listed at more than $1 million sold last month, according to figures from the Arizona Regional MLS. Scottsdale has about 3,850 homes on the market, a roughly 12-month supply, and more than one-third of those are homes listed at over $1 million, said Scottsdale Realtor Gary Holloway.”

“Home sales overall dipped just 4 percent to 345. ‘It’s almost a carbon copy of last August,’ Holloway said. ‘We’re buying the same number of houses.’”

“The bad housing news has hit home. Quadrant says it is laying off 45 people; a 20-percent reduction in what Quadrant calls its associates. Quadrant is the state’s largest single-family home builder.”

“Realtors are philosophical. Realtor Mona Spencer says it’s scary if you watch the news. ‘Think of it this way. Would you rather have your money in real estate or the market? I’d rather (in) real estate,’ Spencer said.”

“Spoken like a true realtor! ‘But it’s true,’ she said.”

“There’s still plenty of housing inventory to work off, interest rates are down, pricing is at ‘rock bottom,’ and consumer’s aren’t yet confident they should buy, despite the fact it’s ‘an unbelievably good time’ to purchase a home, said Pulte Homes CEO Richard Dugas.”

“‘They’re not making anymore land last time I checked,’ Dugas said.”

“Builders say some of the extravagances and sameness that marked the first generations of McMansions are going by the wayside. ‘People think: ‘We’ve got 28 rooms in our house, what do we need with that?,’ said Scott Van Duzor of Van Duzor Construction. ‘You’ve got these subdivisions full of these monsters. There were so many cookie-cutter $2 million houses, it was just goofy. The last few buyers would rather play it down than play it up. They’re almost embarrassed by those words ‘McMansion.’”

“Britain needs to end its ‘national obsession’ with property, Liberal Democrat treasury spokesman Vince Cable said. He attacked the culture of ‘binge lending’ secured on vastly inflated property prices by financial institutions. Mr Cable, who was given a standing ovation by delegates, said there was a new ‘mood of austerity’ in the country after the excesses of New Labour.”

“He said: ‘Our Government didn’t cause this crisis. Its biggest folly was hubris: the delusional claim to have abolished the boom and bust cycles to which all capitalist economies are prone. They forgot that financial success breeds excess; unearned rewards feed greed; and overconfidence leads to folly.’”

“‘New Labour incubated a culture of financial gambling with other people’s money which has contributed to the collapse of trust in financial institutions. It also bred a dangerous dependence on debt.’”

“Few people feel like splurging in the City, as London’s financial district is known. ‘The City is run by two huge emotions: greed and fear,” said Geraint Anderson, a former banking analyst who chronicled a lifestyle of decadent excess in ‘Cityboy: Beer and Loathing in the Square Mile.’ ‘People think the party is over,’ he said.”

“‘People are fearing for their jobs,’ said John Allsopp, who works in IT for an American investment bank. ‘And you just wonder how it got here.’”

“The 300-year-old Bank of Scotland, which merged with mortgage lender Halifax in 2001 to become HBOS and will now see its name disappear as it is absorbed by Lloyds TSB.”

“‘This time last year, people were spending a lot of money,’ said Luis Rosete, manager of The Pen Shop in the heart of the City. ‘We have pens for 1,000 pounds ($1800) - and people were buying them. Now, there are lots of people coming in, but it’s mostly just browsing.’”

“Andy Paine, one of Indianapolis’ top bankers until he retired a decade ago, traces the financial train wreck unfolding across the country to a perception hatched in the 1990s that home ownership was a right, not a privilege.”

“The financial system won’t recover until that notion is reversed, Paine says. ‘We’re going to have to get back to some sanity and recognize that housing is not a right,’ Paine said.”

“In Midland and Odessa, affordable housing is basically defined as below $80,000. But in this housing market, it’s hard to find a home listed anywhere near that price. Scott Payne builds ‘work force’ housing in Midland. Payne says, ‘You’ll find there are not a whole lot of builders out there willing to build less than $150,000 because it is so hard to make money.’”

“His latest project in Midland (is) primarily 3-bedroom 2-bath houses with about 1,300 square feet. They sell for between $118,000 and $135,000. Payne says, ‘That was 46 houses, eight months before we were finished building them, they were sold.’”

“Tena Waggoner says, ‘Midland and Odessa just finally caught up with a lot of other areas in their price range of homes.’”

“Tena Waggoner should know. She has more than 28-years of experience as a mortgage banker. While some people are still waiting for the next economic ‘bust’ to bring housing prices down, Waggoner has a different theory.”

“Waggoner says, ‘The first time home buyer is moving out of the apartment and buying a first home…those people are moving up and those people are moving up and empty nesters are moving back down.”

“And that creates a cycle of stability. Combine it with supply and demand. Waggoner says, ‘I just don’t see our prices going back down.’”

“But rest assured, the American dream is not lost, it’s really just a ‘mind-set’ away.”

“We are now learning about complex financial instruments, as they are called, that created a vast empire of paper wealth that is now burning up. Wall Street devised ways to exploit an ordinary human need - housing.”

“In past eras, American financiers and government have directed the nation’s wealth toward the development of railroads, highways, universities and other infrastructure that would enable the nation to develop in ways that would enrich all of us.”

“If the system were not designed to encourage that giant pyramid of paper wealth, American companies could have been investing in American factories, providing better paying jobs to American workers. The government could have been enforcing laws to protect workers’ rights and investing in education and infrastructure that would enrich rather than impoverish the nation.”

“Now the paper castle is tumbling down. When it comes time to rebuild, let’s hope our leaders understand the need to foster prosperity based on real production by working people, not financial instruments built on nothing.”




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143 Comments »

Comment by Darrell_in_PHX
2008-09-19 13:30:44

Serious question here…..

Let’s say I ran up like $100K in unsecured credit card and signature loan debt…. Then I just up and decided to not pay it back.

What could they do.

No, not go bankrupt. Just up and decide to not pay it back.

Comment by az_lender
2008-09-19 13:46:28

They can take you to court, if they think you have any assets that would make it worth their while.

Comment by Darrell_in_PHX
2008-09-19 14:05:04

Seriously? Unsecured debt? Could the go after my house, 401(k), etc? Garnish wages?

Or, just get a judgement that I could just ignore?

Comment by wmbz
2008-09-19 14:18:11

I know that the C.C. companies will hound you for what seems like forever and after they give up they pass it off to a collection agency. They will keep trying since they get a cut of what they collect. After many years they will stop, how long they persist I don’t know. The credit ding is roughly 7 years on cards, to my understanding.

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Comment by Big V
2008-09-19 14:41:53

You can’t ignore a judgement. They will garnish wages and accounts, put liens on property, ruin your credit, and possibly put you in jail if you are found guilty of contempt by lying or trying to hide your assets.

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Comment by Darrell_in_PHX
2008-09-19 14:46:38

Well, this sucks…. If I was a no-good loser that raked in mega bucks with NINJa loans, I’d be left alone. But I have solid work skills, a good job, and steady income.

So much for “work hard and you will be rewarded”. My parents raised me to be a sucker, taken advantage of by the system….

 
Comment by Lost in Utah
2008-09-19 14:49:28

You can ignore a judgement if you have hidden your assets or have none. There’s nothing they can do if you own nothing and don’t have a job, except hurt your credit.

 
Comment by Big V
2008-09-19 15:30:06

If it’s any consolation to any of you, I have the displeasure of knowing one guy who hides his assets and income from the government. He does this to avoid paying child support (nice guy). The only justice is that his quality of life is a lot more limited than mine. My husband and I can take high-paying jobs, control our own property, and get involved in whatever business deals sound good to us. This other guy has to live in a crappy house under his mom’s name, can only work for cash (which means spotty work for not much pay), and has to finagle for every deal he does, often losing potential friends in the process. But then he convinced this doped-up daddy’s girl to marry him, and now he’s working on becoming the latest drain on her family. That’s the part that ticks me off.

 
Comment by fecaltime
2008-09-19 17:00:02

If you fully understood how biased and full of caca the courts can be, you would be cheering that bastard on as I am! If the family court treats you unfairly then screw them and everybody else too! Our society is entirely broken!

 
Comment by Wickedheart
2008-09-19 18:55:40

Well, darrell, considering our guv’s actions lately we are all suckers. Welcome to the club.

 
Comment by Matt_in_TX
2008-09-20 05:27:15

The new large company job I started mentioned several times in their new employee materials that they do NOT want to “get involved in their employee’s financial affairs”, meaning: don’t be a garnishee.

 
 
 
 
Comment by Lost in Utah
2008-09-19 14:08:43

They can take you to court, but you don’t have to appear, you can choose to ignore them. They then get a judgement against you, which means they can take it out of your wages or bank account. Some things are immune to being taken, I believe your car and homestead house are two things, probably depends on the state. I don’t know the jurisdiction of such a judgement, how far it would go, whether they could cross state lines or not.

But the onus of collecting it is on them. If you have cleverly hidden your assets (not illegal unless you’re going to file BK, as far as I know) and don’t have a job they can find, they’re SOL. Of course, your credit takes a hit.

I am not an attorney and only speak from the experience of a friend, who did just that. He owed about 70k to 4 or 5 CCs. He was an alcoholic doctor, got kicked out of the medical field and has since gone into state politics.

Comment by Lost in Utah
2008-09-19 14:17:31

I forgot to add, he never repaid a penny of his debt - this was about 8 years ago. The credit ding slowed him down a bit, but he’s had no trouble getting cell phone, another CC, car insurance at good rates, etc. and they didn’t touch his car or house (Colorado).

What, me worry? is his motto.

Comment by aladinsane
2008-09-19 15:07:07

Newman! (alfred e.)

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Comment by pismoclam
2008-09-19 21:24:53

Change your name to Jesus or Pedro and sllep under the bridge. Get free medical care, food stamps, welfare ect. Hang out at Home Depot for cash jobs. No income tax. vote Democrat. hehehehehehe

Comment by Kyle
2008-09-20 11:34:15

You are pegging the stupidity meter.

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Comment by Skroodle
2008-09-19 23:04:21

Ron Paul??

 
Comment by Adam
2008-09-20 13:06:32

Your car and homestead are NOT protected from judgements unless you live in a few states that protect it. Texas and Florida are two that have homestead protection laws that prevent creditors from attaching your house. Most other states do not and they will put a lien against them after they get a judgement.

Comment by Wizard of Oz
2008-09-20 14:13:05

OJ knew this…

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Comment by Professor Bear
2008-09-19 13:42:21

“‘They’re not making anymore land last time I checked,’ Dugas said.”

They are still building houses faster than they are selling them last time I checked.

Comment by wmbz
2008-09-19 13:46:10

“‘They’re not making anymore land last time I checked,’ Dugas said.”

You would think these dipshits would trot a new line every few decades or so. Look out of the plane’s window jackass, there is plenty of land. That coupled with the bulldozer effect on all the crap shacks they have built will have and I’d say not to worry.

Comment by DebtInNation
2008-09-19 16:04:15

Evidently, he hasn’t been to a volcanic island, where “they” are, indeed, making more land.

Comment by packman
2008-09-19 16:53:43

Or to Dubai.

Or to Macau.

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Comment by Robin
2008-09-19 19:56:53

Or Tokyo Disneyland - :)

 
 
 
 
Comment by Tim
2008-09-19 14:12:18

I’m somewhat confused as to what he felt was necessary to check. Instead of checking into theories of plate tectonics, why wasn’t he checking out the inventory of existing land and the level of demand therefor and doing some sort of cost analysis modeling? I cant wait until these morons give up their CEO title for one that says CBC (chief bathroom cleaner).

Comment by packman
2008-09-19 16:55:46

Evidently at PHM they layoffs have been so severe they’ve had to combine the positions of CEO and Sales VP.

 
 
Comment by Happy Renter in Vancouver
2008-09-19 21:07:10

There’s new land being created all the time at the Southern tip of the Big Island of Hawaii… Unobstructed ocean views… The only problem is that it’s all black volcanic rock, no soil, no vegetation and they sell acre lots for 3,000 to unsuspecting tourists..

Comment by Matt_in_TX
2008-09-20 05:28:37

On the North end, $2M lots ;)

 
 
 
Comment by az_lender
2008-09-19 13:43:11

“People have been saying coastal real estate would hold up better”
[but Santa Cruz prices are falling]

Morro Bay (SLO County) continuing to fall slowly slowly. A few things there now listed at $300/s.f. or less. The price/rent ratio is still ridiculous. Of MLS listings under $600K, only four now brag about the property being rented out. In those four cases, the ratios of asking prices to monthly rents are 222, 315, 319, and 374. How many negative-cashflow buyers does it take to screw in a light bulb?

Comment by MontereyJack
2008-09-19 15:47:35

The good areas in Monterey are slowly dripping down while the not so good areas in Seaside and Salinas crashed long ago. Beach cottages that once sold for $750K are now under $600K, but it’s still silly. The big decline in middle class and better houses has been saved for 2009…

One “nice” side effect of the bank meltdown is that it takes all the marginal buyers of the last 20+ years in California out of the game. No more Countrywide, no more Indymac, no more Golden West, no more World Savings, no more Washington Mutual. They inflated CA real estate by at least 15%-20%, and could have kept it there if not for the greed of the last 5 years.

The government will throw out subsidies but the core loan standards are definitely going back to those of 30 years ago. In another year all will accept that the prices of the last 5 years cannot return and will start cutting deals. The stubborn sellers who don’t cut prices will be an ignored sideshow.

Comment by scdave
2008-09-20 08:40:15

Thats exactly how I see it also MJack…

 
 
Comment by JonB
2008-09-19 23:00:59

there are no jobs in Santa Cruz that support high prices in the coast.
its no wonder prices were very low in pre bubble years < 1998…

but due to free money 1999 and then low interest rates prices skyrocketed… now they are correcting back to long term trends.

dqnews.com shows prices in Santa Cruz is dropping back fast.

 
 
Comment by Professor Bear
2008-09-19 13:44:31

“In past eras, American financiers and government have directed the nation’s wealth toward the development of railroads, highways, universities and other infrastructure that would enable the nation to develop in ways that would enrich all of us.”

Unlike private housing, all of the above categories are public goods which provide collective benefits.

 
Comment by Olympiagal
2008-09-19 13:47:35

‘Bellevue-based Quadrant is a subsidiary of the Weyerhaeuser Real Estate Co. Quadrant builds new homes throughout Seattle and the greater Puget Sound area.’

I hate Quadrant. I hate Weyerhauser. I’ve already explained why this should be to all of you, in elaborate and grouchy detail, so I will content myself with those simple declarations at this point.
I hope they all go H*ll, except not in a handbasket, in a wheelbarrow that is big enough to accomodate each and every Quadrant and Weyerhauser minion, and slower, so I can get out a lawn-chair and a popsicle and sit down and enjoy the sight as they trundle by. Oh, and there should be packets and packets of loose carpet tacks jouncing around in the H*ll-bound wheelbarrow, and some rabid weasels tied to the interior sides by their tails, for maximum occupant discomfort.
Boy! I’d purt near give this handy packet of licorice to see that sight! And I really really like licorice, even!

Comment by Arizona Slim
2008-09-19 14:26:18

Joshua Tree cuttings would be a worthwhile addition to that barrow.

Comment by Slush
2008-09-19 17:32:05

There’s no shortage of Joshua trees in my area. I’m heading to Olympia for Christmas (in-laws), I’d gladly drop a few off for Olympiagal. ;)

Comment by Olympiagal
2008-09-19 20:33:24

Serious? Give me your times, and we can meet. I have a lonnnnnng list of potential recipients.

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Comment by Slush
2008-09-19 20:42:56

I’m pretty sure the city of Palmdale gives them out for free - if you email them perhaps they’ll ship some to you. ;)

I’ve seen enough Joshua trees, I wish I could move to Olympia. It’s always such a joy to visit (I’m serious!)

 
 
 
 
 
Comment by Chuck
2008-09-19 13:50:57

“He said: ‘Our Government didn’t cause this crisis. Its biggest folly was hubris: the delusional claim to have abolished the boom and bust cycles to which all capitalist economies are prone. They forgot that financial success breeds excess; unearned rewards feed greed; and overconfidence leads to folly.’”

Hubris in ancient Greece was considered a Crime because the ancient Greeks recognized that hubris would bring down institutions.

Hubris, though not specifically defined, was a legal term and was considered a Crime in classical Athens. It was also considered the greatest sin of the ancient Greek world. That was so because it was not only proof of excessive pride, but also resulted in violent acts by or to those involved.

Funny how things don’t change with time and how history repeats itself over and over again.

Comment by DennisN
2008-09-19 15:44:32

Don’t forget that hubris brought forth nemesis.

 
 
Comment by Big V
2008-09-19 13:51:48

Isn’t the real reason that stock markety is “recovering” just that they have excluded short sellers? Of course, if you eliminate all people who think that prices are going to go down, then you are left only with people who think that prices are going to go up and, voila, you get a bounce. Am I the only person thinking this?

Sorry I didn’t put this in the bits bucket; it’s too long for me.

Comment by desertdweller
2008-09-19 14:38:46

But the SEC is going to allow hedge funds to Short.
So what is really happening is that the little guy, the average american joe/joanna is being cut out of the loop of making money just like the big guys.

Okeydokey, that does it for Freemarket republicans/ globalization.
POOF.

Comment by Big V
2008-09-19 14:53:52

The SEC doesn’t control hedge funds. It’s not “allowing” anything; it is rolling over because it has to. How much you wanna bet we start seeing a lot of people moving into hedge funds just so they can short the overvalued stock market and capitalize from the recent and unrealistic gains?

Comment by packman
2008-09-19 17:34:27

Most hedge funds are not available to the general public though.

http://en.wikipedia.org/wiki/Hedge_funds

A hedge fund is a private investment fund, having a largely unregulated pool of capital, whose managers can buy or sell any assets, make speculative trades on falling as well as rising assets, and participate substantially in profits from money invested. It charges both a performance fee and a management fee. Typically open only to very wealthy qualified investors, hedge fund activity in the public securities markets has grown substantially, accounting for approximately 10% of all U.S. fixed-income security transactions, 35% of U.S. activity in derivatives with investment-grade ratings, 55% of the trading volume for emerging-market bonds, and 30% of equity trades.[citation needed] Hedge funds dominate certain specialty markets such as trading within derivatives with high-yield ratings and distressed debt.[1]

(emphasis mine)

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Comment by Big V
2008-09-19 14:05:16

Suse Orman:

“Nobody has ever seen this happen before; nobody has an understanding of what’s happening,” she said of the economic crisis.

-Yes they do! It’s covert and overt manipulation by large players in both private and government circles.

“So what does a normal human being do? You do what it takes to make yourself feel secure — take the risk that you’re able to take but don’t do anything where you think, I’m going to catch a good buy now, maybe yes, maybe no.”

-At least that’s true.

And how about this:

Near Retiree: Roller coaster economy isn’t for ‘average Joe’

-Today’s economy is the result of the “free market” ruse designed to benefit certain people who thought they were too special. Unfortunately, those people aren’t as smart as they thought they were. They are so overconfident that they think they can fool the people AND the markets. No way.

Comment by exeter
2008-09-19 17:16:04

“-Today’s economy is the result of the “free market” ruse designed to benefit certain people who thought they were too special.”

When the free marketeering liars get in front of the camera and yammer about free markets, they really mean wage slavery and economic fascism for the middle class.

 
Comment by snake charmer
2008-09-19 18:05:19

The fact that someone like Suze Orman is considered a guru tells you everything you need to know about the average citizen’s level of financial knowledge. Outside of the fact that the stock market fell and rebounded, I would venture that majority of people have no idea what happened this week or why, and can’t be bothered to find out.

 
 
Comment by Arizona Slim
2008-09-19 14:11:06

“Britain needs to end its ‘national obsession’ with property, Liberal Democrat treasury spokesman Vince Cable said.

And when will OUR treasury secretary say such a thing?

Comment by BubbleViewer
2008-09-19 16:47:59

“Nobody has ever seen this happen before; nobody has an understanding of what’s happening,” she said of the economic crisis.

Peter Schiff, Jim Sinclair, Bill Fleckenstein, Bob Chapman, and Jim Puplava are just a few people who have seen it before and do understand what is happening.

Comment by dude
2008-09-19 19:49:06

…and Ben, and dude, and NYC, and …

 
 
Comment by JonB
2008-09-19 23:03:12

Paulsen did say … govt shouldnt impede with the ongoing correction in real estate. Sounds good to me…

 
 
Comment by arroyogrande
2008-09-19 14:12:26

“complex financial instruments, as they are called, that created a vast empire of paper wealth that is now burning up…Now the paper castle is tumbling down”

Wow…is it true that Wells Fargo stock is now trading at all time highs ($39.80 a share)? Wow, the worst MUST be over. Whew!

Comment by JohnF
2008-09-19 14:39:48

As long as you rig the game, you can get whatever result you want.

Next up:

- nationwide foreclosure moratorium (now that “we” own Fannie-Freddie and via RTC-2 we will own all of the other crappy home loans, it will be done by fiat)

- EZ-Financing from the FHA or whatever entity the government cooks up to “keep people in their homes” - taxpayers will pay for any losses

- RTC-2 will also take the crappy commercial, HELOC, and developer loans - US taxpayers will pay for any losses

- RTC-2 will then take the crappy auto and creditcard debt - US taxpayer will pay for these losses too

- feds will “re-capitalize” financial institutions with EZ-Financing preferred stock, which will never have to be paid back

There you go, the “government” will take care of everything and the stock market will continue its upward swing…..

Comment by Ben Jones
2008-09-19 15:09:07

John, you just proved you don’t know a thing about what the RTC did. It was a liquidator. I know, I watched it in action all around me.

Comment by Cosgrove
2008-09-19 16:44:42

But what the original RTC did and what TRAP is going to do are entirely different things. TRAP is going to be a giant dumping ground for illiquid assets (read toxic sludge). Yet, it will try to buy these assets but for what valuation and who will buy on the other side?

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Comment by JohnF
2008-09-19 19:41:49

I think that the RTC-2 is going to buy at 50 cents on the dollar, and unfortunately sell at 30 cents on the dollar, hence the loss to the taxpayers. If RTC-2 really buys at market value, the financial companies will be so underwater that they will have to be given hundreds of billions in new “free” capital from the Feds. The game, I’m afraid, is rigged, so RTC-2 will have to overpay in order for it to work. That is much more palatable politically then giving the financials money.

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Comment by Ben Jones
2008-09-20 04:45:53

‘going to buy…and unfortunately…hence the loss to the taxpayers’

You’re basically pulling this out of your ass. The question that I struggled with a while back was, why do some posters here want so desperately to think bad things are happening to them, against their supposed will. I don’t think you’d like the conclusion I came to.

 
Comment by JohnF
2008-09-20 08:16:35

My basis for my statement is that the problem is not one of liquidity, but of solvency. In my opinion, the values of the MBS held by the financial institutions have fallen because the underlying assets (mortgages) are worth substantially less, not because potential buyers don’t have liquid assets to purchase them. Simply exchanging the MBS for cash or Treasury securities won’t solve the underlying solvency problem.

Therefore, the Feds have two choices: 1) give money to the financial institutions directly to recapitalize them - not politically feasible, or 2) overpay for the MBS initially and when RTC-2 liquidates for lower values (because the underlying assets are worth much less), just say, “well, we didn’t know how worthless these assets really were when we bought them” - this gives the Feds political “plausible deniability”

I don’t want any of this to happen, but the events of the last few weeks (Fannie-Freddie takeover, AIG takeover, RTC-2) lead me to believe that, apparently, our government is willing to take on extraordinary financial risks in order to “solve the financial crisis”.

 
 
 
 
 
Comment by Steve W
2008-09-19 14:22:45

“Only about 2 percent of homes listed at more than $1 million sold last month, according to figures from the Arizona Regional MLS. Scottsdale has about 3,850 homes on the market, a roughly 12-month supply, and more than one-third of those are homes listed at over $1 million, said Scottsdale Realtor Gary Holloway.”

Ok, lets do the math. Or maths if you’re british.

about 1300 homes are listed at above 1 million…2% sold last month…meaning a 50 month supply…

Go get em, Arizonans!

Comment by Arizona Slim
2008-09-19 14:45:36

We’re on it!

 
 
Comment by sm_landlord
2008-09-19 14:27:54

From aerospace engineering we got Tang, calculators, several trips to the Moon, Hubble, the 747, etc.

From computer and network engineering we got personal computers and the Internet revolution.

From financial engineering we got…
(help me out here)

Comment by bluprint
2008-09-19 14:31:33

From financial engineering we got…

plenty of discussion fodder to fill up that internet thing?

Comment by desertdweller
2008-09-19 14:41:23

Or as senator Ted Stevens said, another bright Alaskan, the internet tubes.
Fill up those internet tubes, or was it internet pipes.
You all know how smart this guy is, and the rest of them.

Comment by Kyle
2008-09-20 11:45:20

“It’s not a truck, it’s a series of tubes!”
Stevens is as smart and full of integrity as his political protege Palin.

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Comment by Darrell_in_PHX
2008-09-19 14:32:32

An increase in household and business debt from $7 trillion, to $24 trillion, in just 15 years. In the mean time, wages went up 20%. Who needs income when you can borrow yourself rich?

Comment by Eudemon
2008-09-19 19:35:38

AND - who needs an education when you can borrow yourself to brilliance?

 
 
Comment by Lost in Utah
2008-09-19 14:46:48

Well to use a term engineers are fond of), from financial engineering we got…
FUBAR.

Comment by Arizona Slim
2008-09-19 14:53:38

And our assets are 404 Not Found.

 
 
Comment by Big V
2008-09-19 15:07:19

… a revolution on our hands.

 
Comment by aladinsane
2008-09-19 15:11:01

George Taylor: You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!

 
Comment by satan
2008-09-19 15:16:58

Reality is to financial wizards, what light is to a vampire.

 
Comment by cougar91
2008-09-19 17:01:19

> From financial engineering we got…

I know everyone is down on FE but as someone who completed a Master’s in FE a couple of years ago, I must say that the problem isn’t so much with FE per se but the insane leveraged built into these CDOs and what not. Derivatives is a tool like anything else, but if you mis-use it or borrow $100 for every $1 you have and pile into it, well then you are just pointing a gun at your own head.

After this debacle is under control, whenever that is, you can be there will be huge regulation on derivatives like CDOs and others going forward, no matter who controls the Congress or the WH.

Comment by grumpy realist
2008-09-19 21:45:36

Also knowing quants (and almost becoming one officially myself), I bet you that whenever they came up with one of these babies, they handed it over to the front office nitwits with many many pages of caveats and warnings. All of which the front office nitwits immediately dumped, stamped “AAA” on the CDO’s face, and sent it out to the sales team to shill to pension fund managers.

 
Comment by Matt_in_TX
2008-09-20 05:41:06

I’m not sure, but I think that there is some natural law about legislating against stupidity. Particularly if you can make money being stupid (for a while). Kind of like anti-spam legislation.

Being right too soon is socially unacceptable.

Don’t ever become a pessimist… a pessimist is correct oftener than an optimist, but an optimist has more fun, and neither can stop the march of events.

Never underestimate the power of human stupidity.

Robert A. Heinlein

 
Comment by lauravella
2008-09-21 05:48:17

Somehow I get the feeling there won’t be any need for regulation on derivatives and the like. All of it will cease to exist in the cleansed financial markets here on out. Debt leverage is now a dirty word in financials.

 
 
 
Comment by Darrell_in_PHX
2008-09-19 14:29:19

It’s the debt…. stupid….

http://www.federalreserve.gov/releases/z1/Current/z1.pdf

table d.3 debt outstanding by sector:

1993, total household debt was $4222 billion
2008 it is $13960 billion.

1990 we had 248 million people in 92 million households. (1990 census)
The 1993 population estimate is 258 million people. Using the 1990 people per household of 2.7, we get 95.7 million households.

$4222 billion / 95.7 = $44,000 total debt per household.

2008 estimate is 113 million households. (census)
$13960 billion / 113 million households = $123,000 in debt per household.

(123000-44000)/44000 = 180% increase in per household debt in the last 15 years.

In that time, median household income increased from $40K to $48K (census).

180% increase in household debt, 20% increase in household income.

In the words of Adam from Mythbusters…”well, there’s your problem”.

The same Z.1 tabel D.3 shows business debt up from $3.6 trillion to $10.3 trillion.
Government debt up from $3.3 trillion to $5.2 trillion

And financial sector debt, which has to be isolated from other debt becasue it is so huge… up frm $3.3 trillion to $16 trillion dollars.

AND, the foreign owned debt is up from $468 billion, to $2 trillion.

We’re bankrupt as a population, as an economy, and as a country….

There is nothign that they can do with $.5 trillion… Or $1.5 trillion… that can fix this.

For the last decade, wages did not keep up with inflation, yet standard of living increased… all done with debt. Now we need a 10% cut in the standard of living, JUST to stop getting further into debt. The ripple effect such a cut would have in an economy that is 66% consumer spending, can not be underestimated.

$130 billion stimulus… keeps us out of recession for 1 quarter. $200 billion for Freddie and Fannie, lowers mortgage rates half a point, for 2 weeks. $172 billion to cover Lehman losses and to prevent firesale of AIG assets, doesn’t even hold Wall Street over for a week.

Nothing the Fed has done in the last 18 months has done ANYTHING to increase wages or reduce household debt… therefore, these “almost collapse” events will continue to happen until the root of the problem has been addressed.

Comment by JohnF
2008-09-19 15:03:01

I don’t understand all this number stuff….don’t we have to find a way to “stop the foreclosures” and support the “american dream” of homeownership? And I heard that they “aren’t making anymore land” and that “now is a great time to buy”…..what does any of that have to do with all this debt stuff you keep mentioning……??

Comment by DebtInNation
2008-09-19 16:13:19

How long before pitchfork and torch brigades are formed?

 
 
Comment by Big V
2008-09-19 15:14:58

What these statistics don’t show is that *a lot* of that debt is concentrated into maybe 20% of households. However, the government has spoken, and the rest of us will be sharing the burden. So thanks guys, I have now gone from having $0.00 in debt (because I pay for my own stuff, which I can afford) to having $120,000 in debt (because I apparently pay for everyone else’s stuff too, which they can’t afford and neither can I).

In the meanwhile, a bunch of smug housedebtors and corporate thieves are walking around feeling like geniuses. They get to live better than I do, even though I’m the only one paying.

Comment by edgewaterjohn
2008-09-19 15:52:49

“…and the rest of us will be sharing the burden.”

My dollar is my (real) vote and I’ve every intention of casting mine in ways that benefit me and those that matter to me regardless of these headlines.

Comment by Big V
2008-09-19 16:08:19

What are you going to do with them?

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Comment by edgewaterjohn
2008-09-19 15:36:39

“Nothing the Fed has done in the last 18 months has done ANYTHING to increase wages…”

Yes. Because once again, for the PTB the continuing globalization of wages will eventually prove to be their ultimate priority. I think we might be surprised how little house prices mean to them.

Comment by Chuck
2008-09-19 16:39:34

“But if you wish to remain slaves of bankers and pay the cost of your own slavery, let them create money.” Joshua Stamp, Director, Bank of England, 1928

Yes They Have

 
 
Comment by snake charmer
2008-09-19 18:15:19

“We’re bankrupt as a population, as an economy, and as a country.”
____________________________

Isn’t that the truth Darrell. I had yet another loud disagreement with relatives this year after essentially saying the same thing. We keep trying to solve the problem with more debt, but that just pushes the problem around like a child rearranging the food on his plate to make it appear as if he ate his vegetables.

I am amazed that the United States maintains an AAA rating. Of course, Lehman had an A rating on its bonds until it declared bankruptcy, which tells you that the bond rating business is a scam.

 
Comment by cactus
2008-09-19 20:14:27

Nothing the Fed has done in the last 18 months has done ANYTHING to increase wages or reduce household debt… therefore, these “almost collapse” events will continue to happen until the root of the problem has been addressed.

yep thats right

 
 
Comment by DinOR
2008-09-19 14:37:31

Whoa! Whoa.

“When you are ready to participate in the loss, feel free to call me”

( Good for YOU sister! )

I guess when you’ve already gone down the “Don’t 1099 me bro’ ” path this is about all you have left? I think it was a little shifty of the bank to do that at the LAST minute.. but? I don’t think it’s unreasonable for the lender to ask for a lousy $166 a month on 40k especially when it’s well short of the 75k hole that’s been created? Is it? And it’s certainly no call for the Kelly’s to go whining to the media.

Comment by JohnF
2008-09-19 14:48:12

I have heard this last minute “oh by the way, please sign this note for the loss we (the lender) are taking” many times before…it is the standard MO for these guys…..

 
Comment by Big V
2008-09-19 15:18:48

For some reason, I’m on the debtor’s side on this one. She could file bankruptcy and let the house go into foreclosure. In that case, the bank would lose even more.

Comment by Arizona Slim
2008-09-19 15:27:06

During the Great Depression, bank robberies were widespread and well publicized. And we still remember the names of many of the era’s notable outlaws — Bonnie and Clyde, Al Capone, Pretty Boy Floyd, etc.

And why would this be?

It would be due to the fact that there was enormous public support for the bank robbers. (As long as your local bank wasn’t being robbed while you were in it, of course.) The public support was due to the sentiment that the robbers were stickin’ it to the banks.

Comment by DinOR
2008-09-19 15:44:41

I’m not without ‘any’ compassion and if their intent was to defraud the bank they certainly could have gone about it in a bigger way? At one time the home app. @ 450k. They only took out 75 bringing the total loan to 300 leaving a decent cushion. When the re-fi took place it was in ‘01 so likely not yet the expectation of outrageous appreciation.

Yet somehow they still managed to screw it up. At their age, more attention should be directed toward paying the house OFF ( not running up an ever larger tab ) So in that regard perhaps they were playing the momentum to a certain extent?

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Comment by edgewaterjohn
2008-09-19 15:44:43

But, but, but, banks are our friends aren’t they? They’re always sending me letters telling me that I could (and should) be living a richer life. I’m just positive that if I went to the branch on the next block they’d hook me up with a lifestyle that would be the envy of all.

Oh, don’t forget Dillinger - they just filmed here a few months ago for Depp’s take on that GD celeb.

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Comment by aladinsane
2008-09-19 15:47:20

“Go where the money is…and go there often.”

Willie Sutton

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Comment by pressboardbox
2008-09-19 16:19:58

We could wear masks of past presidents and go surfing when we were done with the day’s robberies. It would be so cool! Kind of like a movie.

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Comment by aladinsane
2008-09-19 17:34:35

I was in a BofA during a “takeover robbery”, almost 20 years ago…

It was surreal~

 
 
 
Comment by speedingpullet
2008-09-19 16:05:02

Thanks guys - I was going to ask the same question myself.

ie “what’s to stop her from giving the bank the ol’ One Finger Salute, leaving the keys on the granite and finding a rental?

Strangely enough, I’m in her corner too. Never thought I’d hear myself say it, but 20 years of servitude (especially to an institution that’s getting a freebie soon anyway) seems a little steep.

 
Comment by Adam
2008-09-20 13:08:53

I am not. No mention is made of their salary, assets, etc. Also, she doesn’t work but ‘volunteers’. Maybe she should volunteer to work and bring in some income.

 
 
Comment by Matt_in_TX
2008-09-20 05:42:59

This is a microcosm of Housing Bubble themes, both bank and debtor.

 
 
Comment by potential buyer
2008-09-19 14:38:36

I thought CA. was a no recourse state. How can the bank come after them ““The Kellys owe $300,000 on their house. But the best offer they could get gave the bank $220,000. CitiMortgage said it would approve a sale at that price, but at the last minute told the Kellys they needed to pay $166 a month for the next 20 years, a total of $40,000.”

I think I’ve been misunderstanding all this time because I thought people could actually walk away free and clear now that Bush isn’t even going after them for taxes.

Comment by Lost in Utah
2008-09-19 14:44:05

Maybe they had a recourse HELOC.

 
Comment by JohnF
2008-09-19 14:52:12

They don’t have to sign the note, but if they don’t, the lender won’t approve the short-sale, so their only recourse is foreclosure. The lender can’t get a judgement for any loss (due to nonrecourse) but they will report the foreclosure to the credit agencies and the borrowers credit will be dinged….

Comment by potential buyer
2008-09-19 15:07:43

Doesn’t the short sale ding them also?
I think I may just go for the ding rather than the payment since it rolls off after 7 years anyway.

Just make sure you rent somewhere first.

Comment by JohnF
2008-09-19 15:46:14

Yes they will also get a ding for short-sale. This whole discussion assumes the loan was for the original purchase. If it was a refi, even if they didn’t increase the loan amount from the original, all bets are off. One of the dangers of the refi….

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Comment by pismoclam
2008-09-19 21:30:15

They should go back to giving 1099s for loan over basis for short sales and foreclosures.I don’t want the US tax payer to bail them out. Next ,we’ll use the stocks and debters prison. Not bad, eh?

 
Comment by reuven avram
2008-09-20 00:44:16

Actually, the still should give the 1099s. Just because W. signed into law the “deadbeat specuvestors tax relief act” exempting Harry Housflipper from paying 10s of thousands of dollars of income tax, doesn’t mean the income doesn’t have to be reported.

And even if he doesn’t owe taxes on that income (which my c**t of a congresswoman Anna Eshoo calls “phantom income”) IT SHOULD STILL COUNT when setting your tax bracket!

Also, to add insult to injury, CALIFORNIA refuses to collect tax on forgiven mortgage debt! Just because the Feds won’t doesn’t mean the state can’t! They’d be able to make up for their shortfall if they just collected the taxes people owed them!

 
 
 
 
Comment by DennisN
2008-09-19 15:49:37

That whole “no recourse” thing has lots of holes in it. IIRC it doesn’t apply for any refi loans, 2nds, HELOCs, etc.

 
Comment by Claire
2008-09-19 15:56:58

I was of the impression that your first loan on a house is non-recourse, but if you refinance into a new loan then you lose your non-recourse state. - Anybody know for sure?

Comment by JohnF
2008-09-19 16:07:10

True for California, that is why we pay a little higher interest rate for purchase-money loans here.

Comment by Claire
2008-09-19 16:17:01

I wonder how many people refied or got their loans modified in California not realizing they lost their non-recourse status and are thinking they can just walk away?

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Comment by homepop
2008-09-19 16:21:31

Is Nevada a recourse or non-recourse state? Anyone know?

I’ve been told that in Nevada the mortgage company can either sue for payment or go after other assets, but it cannot do both.

 
 
 
Comment by l4
2008-09-19 14:55:20

>> “‘That can’t be Santa Cruz,’ said Hutchison. ‘It’s come down more than I would have expected. People have been saying coastal real estate would hold up better, but we’re seeing a decline that matches other areas.’”

I’m sorry, what is it exactly residents of Santa Cruz do for employment beyond a few of the so called professions supporting a vast economy of bookstore, student services and coffee house workers?

Comment by Big V
2008-09-19 15:21:17

They work as economists who insist the the truth “can’t” be true.

 
Comment by SanFranciscoBayAreaGal
2008-09-19 15:39:28

Professional Surfers.

 
Comment by MontereyJack
2008-09-19 16:01:58

I’m sorry, what is it exactly residents of Santa Cruz do for employment beyond a few of the so called professions supporting a vast economy of bookstore, student services and coffee house workers?

One third of Santa Cruz residents live a hippie lifestyle and spend their days in tents down by the river, sleeping in old school busses, selling pot/getting high, or hanging out on the sidewalk. When awake, they panhandle, spray acid on Borders windows, flood Borders with a fire hose, or spread feces in Borders bathroom. Or, the women make dresses from cold cuts to protest being seen as a piece of meat… (all of this really happened)

One third of Santa Cruz residents work at the university or are retired. They all get subsidized housing, one way or another.

One third of Santa Cruz residents work in Silicon Valley and take the Terror Commute over Highway 17. They were once hippies and now have “dead head stickers on their Cadillacs…”

Comment by speedingpullet
2008-09-19 16:09:29

Gawd! I wouldn’t ride the 17 every day if you paid me!

‘Terror Commute’ is right - it surpasses even the 405 southbound for sheer pants-filling scariness

 
Comment by Bill in Maryland
2008-09-20 16:20:26

Yikes! I rescind my earlier post. Hippie Fort Bragg (northern Cal.) is next on my list. oops - hippies again. Umm… San Luis Obispo. Ok, SLO.

I’m cool with some of this since I’m a liberal.

 
 
Comment by DebtInNation
2008-09-19 16:17:25

You’re forgetting the pot brownie sales.

 
 
Comment by aladinsane
2008-09-19 15:41:52

I kinda forgot to send Ben a little something for the effort, so i’m mailing him a few tokens of my esteem, tomorrow…

Thanks for all you do~

 
Comment by jb
2008-09-19 16:35:18

Usually when we spend a trillion we get to kill a bunch of people we dont know. Cant we kill a few bankers with this one???

Comment by bluprint
2008-09-19 17:34:45

lol

 
Comment by Little Al
2008-09-19 17:55:22

Those naked WaMu bankers really do have their pants down now.

 
 
Comment by satan
2008-09-19 16:40:35

Now this is getting more interesting.. let us see what the secondary, tertiary effects of this panic are… any guesses?

__________________

Congressional Leaders Stunned by Warnings

By DAVID M. HERSZENHORN (NY Times)

Published: September 19, 2008

WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

http://tinyurl.com/46tvhq

Comment by Housing Wizard
2008-09-20 00:40:31

Satin ……As if this Washington Post article wasn’t a deliberate leak .
Oh such drama with the same players like Senator Dodds and Paulson going into the weekend calling for Blank Checks . These bozo’s are evoking emergency powers without any proof of anything but bad companies going down the tubes . These people seem to think that
corrupt companies going BK isn’t a function of the market . BB is providing daily liquidity for the banks ,and has been when needed ,so i don’t see this call for emergency conditions . F&F has the ability to make new loans so what is all the panic about . The fact that some of the talking heads are creating panic regarding the public is another matter ,but that is all self-serving. That shill Crammer is always great for evoking panic to try to get what he wants .

This bunk about implying emergency ,so you don’t have to prove it ,so you get the solution you want or more power ,is a bunch of BS .
So now we are going to give billions of dollars of money because Dodds makes a motion of a bird crash diving . Oh, this is the level of the proof that is satisfactory for the public .Reminds me of the time when Dodds was calling the speculators poor homeowners .

 
Comment by Bill in Maryland
2008-09-20 16:15:45

Ouch! No fireplace in my living room in Maryland, but I have a few gold bullion coins right by my left elbow to warm me.

Ah Geez! I’m a western boy and used to 100 degree temperature highs this time of year.

Will Nancy Pelosi, Chuck Shumer, and company become hardliners against spending now? I’m as liberal as them in the civil sense, but they are very conservative (that means socialist, in Bastiat’s terminology) in the economic sense.

I don’t care. I’m going to survive this economic collapse even when China takes us over.

 
 
Comment by Slush
2008-09-19 17:23:21

This is for Dude (or anyone else in the area)

Do you have any numbers/info that may be of interest in the 93551/93536 Palmdale/QH area? I didn’t realize you were also looking in that area. I don’t expect to want to pay the premium for homes along the lake area so I’ve focused elsewhere. I stopped paying attention earlier this summer (after nearly three years of collecting data) because it came clear to me we’re going to need more time, at least one more winter (if not far more), to really knock these prices down to reasonable levels.

In my 2+ years in the area I have seen homes in my neighborhood drop over 50% (even more in some cases), but I do not see as much of a move in the Palmdale/QH area that I’m looking to buy in. Any reason why? My guess is that because this is the one of the nicest areas in the AV, asking prices are remaining high. It also seems as if very few are selling, as people are continuing to ask for near bubble-era prices. I fully expect them to get there, it’s just a matter of when. Any predictions?

Comment by dude
2008-09-19 20:10:44

Remind me Monday when I’m in the office and I post some interesting info on what REOs are actually selling for vs. the amount for which the banks took them back.

Comment by Slush
2008-09-20 06:43:23

Will do. Thanks.

 
 
 
Comment by packman
2008-09-19 17:26:45

That article about Cable (British Treasury spokesman):

“Britain needs to end its ‘national obsession’ with property, Liberal Democrat treasury spokesman Vince Cable said today amid deepening economic chaos.”

lends more evidence to my theory that this housing bubble was not an accident, but rather an intentional concerted effort by the PTB (on both sides of the pond) to drive us farther towards a one-world socialism. I believe what we’ll see over the next few years is a large-scale shift of property from private to public hands. It’s already starting with the bailout of Fannie and Freddie, and will continue I’m sure with government takeover of foreclosed homes.

One component to making such a shift possible is to equate ownership of private property to greed, which is what is implied by his statement.

 
Comment by aladinsane
2008-09-19 17:50:07

Oliver Twisted…

“‘This time last year, people were spending a lot of money,’ said Luis Rosete, manager of The Pen Shop in the heart of the City. ‘We have pens for 1,000 pounds ($1800) - and people were buying them. Now, there are lots of people coming in, but it’s mostly just browsing.’”

Comment by snake charmer
2008-09-19 18:21:20

Some co-workers and I have a running debate over expensive pens. I use a pen that costs ninety-nine cents, if that, and my signature looks the same as theirs. On the other hand, I don’t look nearly as cool.

Comment by packman
2008-09-19 19:03:24

Why anyone would pay 99 cents for a pen is beyond me.

Oh wait - that was you. Never mind.

:)

(Seriously though - I haven’t actually paid for a pen for I think about 20 years)

Comment by dude
2008-09-19 20:16:46

There are people who pay for pens?

One of my daughters has made a project out of collecting a pen or two at every hotel we stay at when traveling. She says the Hotel Garni Leipzig is the best conversation starter, and she never lends out a pen without getting it back.

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Comment by reuven avram
2008-09-19 22:11:08

I’m in hotels about 1/3 of the time. I haven’t bought a pen in years!

 
 
Comment by Doug in Boone, NC
2008-09-19 20:18:15

I do a lot of book signings. I just sign the book with whatever kind of pen is available, usually a run-of-the-mill BIC. I do, though, check to make sure the ink is either blue or black.

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Comment by Matt_in_TX
2008-09-20 05:47:42

This is an annoying feature of buying or selling a house. Do you want blue or black ink, you bureaucrats?!

 
 
 
 
 
Comment by Professor Bear
2008-09-19 18:23:36

Another one bites the dust…
Another one bites the dust…

Ameribank folds, 12th bank closure this year

By John Letzing, MarketWatch
Last update: 8:19 p.m. EDT Sept. 19, 2008Comments: 11SAN FRANCISCO (MarketWatch) — A tumultuous week for financial markets was capped Friday with the closure of Northfork, W.Va.-based Ameribank Inc., the 12th U.S. bank closure so far this year.

 
Comment by SanFranciscoBayAreaGal
2008-09-19 18:53:48

Ameribank folds, 12th bank closure this year

http://www.marketwatch.com/news/story/ameribank-folds-12th-bank-closure/story.aspx?guid={F5DB6DB4-B2DF-4CCA-A4F5-E45CE8A0F8D3}&siteid=yahoomy

 
Comment by Professor Bear
2008-09-19 21:10:34

I personally doubt what this article says, due to all the manipulations that are currently employed to prevent the stock market from capitulating… unless he is talking about fraudentials, in which case the blood is running thick.

Time to Buy Stocks — Not Sell
Steven Goldberg, Contributing Columnist, Kiplinger.com
Kiplinger.com
Friday, September 19, 2008; 12:00 AM

“The time to buy is when blood is running in the streets.” Baron Nathan Rothschild issued that famous dictum in the early 19th century, but it holds equally true today.

The crisis on Wall Street has caused so much panic that I think it’s time to increase — not decrease — your allocation to stocks. All the usual caveats apply: Don’t do this with money you’re going to need in the next few years, and don’t overdo it. But if you’re a long-term stock investor, go ahead. A year or two from now, I have little doubt you’ll be glad you bought during this tumultuous time.

Why? When the fear is this thick, almost everyone who is going to sell stock has already sold. Further bad news — and I have little doubt that there will be more financial failures — will likely push stocks down only so much further. Conversely, even a thimbleful of good news will turn sellers into buyers.

Comment by SDGreg
2008-09-20 01:34:39

“When the fear is this thick, almost everyone who is going to sell stock has already sold.”

If that were true, why the restrictions on short selling?

 
Comment by lauravella
2008-09-21 06:12:24

We’ll find out next month (October) if the majority of people believe the hype that now is the time to “buy” stocks.

 
 
Comment by reuven avram
2008-09-19 22:06:47

“The Kellys owe $300,000 on their house. But the best offer they could get gave the bank $220,000. CitiMortgage said it would approve a sale at that price, but at the last minute told the Kellys they needed to pay $166 a month for the next 20 years, a total of $40,000.”


“‘When you are ready to participate in the loss, feel free to call me,’ a Citi loss mitigation specialist wrote to them in an e-mail message.”

I have just gained a lot more respect for CitiBank! Banks may be able to start collecting on these offers if they threaten to go after the borrower for mortgage fraud if there were any fabrications on the application. Either pay $166/month for 20 years…or risk civil and criminal penalties.

Comment by reuven avram
2008-09-19 22:09:27

Comment by Housing Wizard
2008-09-19 23:56:24

Very interesting . So,they are still giving these people 40k of forgiven debt and just asking for the rest drawn out in payments for $166/month. I think one of the problems is that the liar loan borrowers who knowingly committed loan fraud to get in on the housing gamble have not had enough penalty for their part in this
mania .

Usually people would have to qualify for a short sale ,but I guess the banks are letting up on that requirement because of the extreme
nature of this foreclosure market .

 
 
 
Comment by Bill in Maryland
2008-09-20 15:55:11

“‘That can’t be Santa Cruz,’ said Hutchison. ‘It’s come down more than I would have expected. People have been saying coastal real estate would hold up better, but we’re seeing a decline that matches other areas.’”

BwaHaHaHa!

As a liberal (in the true sense - atheist for complete civil liberties and gun-toting capitalist), I would love to buy a Marxist UCSC prof’s house for $0.35 on the dollar (based on peak price) if it’s an ocean view house with a 2 car garage.

 
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