Bits Bucket For November 8, 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
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These days, gloomsters are coming out of the woodwork. Not that there is anything wrong with that…
October 28, 2008
by FT
It can be worse than the Great Depression
By Anders Åslund
This is the worst global asset bubble and financial panic since the Great Depression of 1929-1933. Still, almost all argue that it cannot become equally bad, because we have learned those lessons.
Analytically, that statement does not hold. True, our policymakers are not likely to repeat the same mistakes of the Great Depression, but they may commit other mistakes. Bank deposit insurance has come to stay for good, but not all advances represent progress, and many create new vulnerabilities.
1. “they may commit other mistakes.”
2. “not all advances represent progress, and many create new vulnerabilities.”
This is why direct historical comparisons are really of only very limited value.
3. Not all problems have immediate solutions.
“This is why direct historical comparisons are really of only very limited value.”
Try telling that to the gold-stroking clairvoyants here.
“gold-stroking”
Good one.
In early summer I recall the leading stroker was predicting that not only would we run out of water by the end of the year here in California, but we’d also be nearly out of food, too.
“Good one.”
I can’t take credit for “stroking” the precious. That would be NYCBoy.
I will take credit for “globe trotting with satchels of mellow strapped about your thong.”
And really, I need to start substituting “pouches” for “satchels.”
I like the sound of “satchels” but it doesn’t really make sense. Plus you can store all of your hallucinogenic flora in pouches as you prance through the wilderness stroking the precious.
policymakers are not likely to repeat the same mistakes of the Great Depression
Someone’s giving them too much credit, imho.
Too much “credit”. LOL
Someone’s giving somebody too much credit, that’s for sure…
I think the fallacy with that is there is not a single path that leads to a Depression. There are many paths. The Housing Bubble is just one more.
Might be fair to say our financial kingpins have ALREADY MADE other mistakes and stirred them into the scary brew.
“These days gloomsters are coming out of the woodwork. Not that there’s anything wrong with that…”
I love the smell of fear in the morning; It smells like lower stock prices.
Those who bought stocks during the Goldilocks Market are going to dump their holdings when The End Of The World is announced.
That’s when to buy (assuming one has the cash.)
Pay attention. W already announced the end of the world in his “panic now” sales pitch for the bailout.
Yup! I loved it when everyone and their brother were buying several houses. It made me do the opposite thing - rent. I too, love it when everyone is shunning stocks, especially now that they say Obama is going to sock it to the rich. Logically it will mean the stocks will crash. However Obama has not yet taken oath of office. Gotta wait and see. Even so, buying stocks for the long haul and not selling any gains means you won’t be taxed on them.
Politics have cycles. We need to have the socialist cycle again, like the Jimmy Carter era, before we get a Goldwater type as President. Although Obama stated he wants to spread the wealth around, we need to give him the benefit of the doubt.
I agree Bill, but I am not convinced the market has found a bottom quite yet. There is still a level of denial regarding housing prices at the government level on both sides of the aisle. They continue to hold on to the possibility that if prices can be stabilized at the current, marginally discounted, level that would “fix” the downstream problems in MBS, CDO, CDS, etc. IMHO, prices must revert to and possibly overshoot the fundamentally accurate mean to set the true market and give accurate value to all of these “sophisticated” instruments. That is like gravity pulling prices despite the efforts of gov and will eventually cause the losses feared by the holders who took the risks. This is what they fear and this is what I anticipate will drag the markets even lower.
With regard to Obama, I’ve wiped my opinion slate clean now that he is the President elect and will give him a chance to show his intellect. I am cautiously optimistic as I did not vote for him because of his collectivist policy statements.
You can’t always go by what a candidate says when running for President. Remember, Bush was against big government and globalism before office. Reality sometimes happens.
Of course not. They are always markedly less radical (left or right) while trying to appeal to independents and the other party’s voters.
Everyone said the stock market would crash when Clinton took over from GHWB. Insteady, his two terms coincided with the tech stock bubble and the Roaring 90’s — hardly a great time to sit out the stock market.
“I love the smell of fear in the morning; It smells like lower stock prices.”
I can tell U that here in LA the smell of fear and economic desperation is so pervasive that even the gangbangers are laying low. Either that or during economic desperate times the streets, highways & shopping venues are less crowded so that the police can focuse more attention to going after & prosecuting the riff-raff.
Yesterday some gangbangers wouldn’t let me into the exit lane for encinitas. They kept speeding up and it freaked me out. I guess they had to go catch some waves.
When I encounter such courteousness, I just signal an move on over as if they’re not there. They always make room. Of course, you first need to have adopted an “I could care less about dings and dents on my vehicle” mentality.
BanteringBear, do you drive an armored vehicle? People get shot for that sort of behavior, so I would not recommend trying that maneuver with a car full of gangbangers unless you have an armored car that will stop 9mm slugs, and run-flat tires.
LOL, no sm_landlord, I don’t. It’s a good thing, too, because if I did I’d probably car check those bangers over a guardrail, and then I’d be in lots of trouble. Nevertheless, I refuse to live in fear of lowlife punks who try to intimidate people.
RE: the smell of fear and economic desperation
ABC’s had a report on the rush to purchase weapons following the election.
Quotes from the the interviewed “Cheaper Than Dirt” owner-
“Business has tripled to quadrupled”.
“No AR’s or AK’s to be had anywhere…”
“Even the idiots with Vote O’Bama t-shirts on, are comin’ in the door”.
Ar 15’s sold out at local man toy shop; still plenty of shotguns.
One difference today vs the Depression is that Washington is willing to purchase whole businesses and even industries to save jobs regardless of the cost or impact on the dollar..
Perhaps, but I’m not convinced that anyone inside the Beltway appreciates how many empty hands are about to be held out.
For instance, all this recent blather about recusing Detroit is a very ominous start. To waste so much time, energy, and money this early on to rescue what are essentially three dead men walking, does not bode well. They’re still driving using the rearview mirror.
This downturn would be an excellent opportunity to prepare for the next century - instead of trying to drag the last century forward.
Opportunity is coming…
Michigan & the auto industry is falling apart @ exactly the same time 25 million Californians might have to move there next year, in search of water.
Ixnay on the auto industry. We need an energy-based Manhattan Project, and the synergy might be about perfect.
Instead of relying upon brainiac ex-pat foreigners as we did in the 1st Manhattan Project, ex-pat Californians will fill the bill perfectly.
Things Change…
Regulators shut banks in Texas, California
Saturday November 8, 1:29 am ET
By Marcy Gordon, AP Business Writer
Regulators shut Franklin Bank in Texas, Security Pacific Bank in Calif.; 19 failures this year
WASHINGTON (AP) — Regulators shut down Houston-based Franklin Bank and Security Pacific Bank in Los Angeles on Friday, bringing the number of failures of federally insured banks this year to 19.
“…bringing the number of failures of federally insured banks this year to 19.”
This number seems low to me, considering the carnage that has taken place. Perhaps free taxpayer money is helping?
They are not counting forced consolidations as closings. Trust me, the number of banks forced to no longer be their own bank is much higher than 19. They are rushing to arrange shotgun weddings.
Karl Marx would love what he’s seeing.
Sure, why not? Let’s turn the auto industry into a government entity that touts itself as a public/private construct!
Based on the success of Fannie/Freddie, doing so would make sense, n’est-ce-pas?
Sure, and the auto industry could be morphed into Al’s energy Manhattan Project to soak up a half trillion or so looking for free energy to dole out to the changelings along with the free mortgage payments they voted for.
yes, definitely lots of opportunity but I’m afraid the FEDs are going to make exactly the wrong decisions and support all the buggywhip industries of the 20th century.
not just in the US of course, exactly the same is happening in Europe where the FEDs (except those in Germany) are desperately trying to keep alternative energy in check etc. After the banks now the whole housing mob (especially developers with huge projects) are standing in line for multi-billion euro handouts from the government, because ‘homes are not selling well’ so they need more subsidies to get the gears turning again - all for the benefit of society, of course.
It would be great if governments run out of money. At least my government now has to pay 0.6% more on its debts, as a result from rescueing two big banks. Maybe the market will teach them a lesson. A few more handouts and they could be in real trouble.
Looks like Chrysler is going to the Koreans:
http://www.cnbc.com/id/27599376
I think its funny that Snow/Quayle/etc couldn’t get a bailout out of Washington.
Cerberus is threatening that move to extract concessions from Pelosi. I doubt that they will need to back up their bluff.
Greetings from the roadtrip…
My wife and I are circling the Sierra Nevada and are in Lone Pine presently.
The fall colors are impressive and the mountain-tops are lightly covered in snow, stunning!
We didn’t venture much from the main highways, but what we saw was amazing~
Equipment places along Hwy 99 (northern Inland Empire) were chock-a-block full, D-9’s, backhoes, heavy equipment of every flavor you could ever want, and so much of it, that many places had little maneuvering room in their massive lots.
Hi lad, enjoy the roadtrip.
If those D-9’s and all that other heavy equipment are just sitting idle there, it’s mighty expense to someone.
The overhead and holding costs of that heavy stuff is a hell of a lot higher than Diamond Jim’s Friendly Used Car Lot
And what are the odds that the vital parts have been properly “pickled” for long term storage? Like everyone else, I’m sure they think that spring will bring the boom times - and they stored that equipment accordingly.
It’s hard to ascertain how much money was sitting on those lots as we cruised by @ 80 per, but certainly each lot had many millions of homebuilding apparatus @ the ready, or not.
“It’s hard to ascertain how much money was sitting on those lots as we cruised by @ 80 per, but certainly each lot had many millions of homebuilding apparatus @ the ready, or not.”
The homebuilding business is dead, dead in the cent valley and the IE. That homebuilding apparatus will sit there in those yards & rust or be sold at cents on the $.
Now if Arnold /Obama completely open the floodgates to immigration ,then we can allow all the worlds impoverished to flood into CA/US and the fed will get them into a dirt cheap hud/FHA homes and the illegals can stuff 10 relations per home. HB’s can then stay in business putting up even more cheap abodes to house the immigrant flood who can pay via gov’t subsidies and assistance to the illegals even if CA UE go up to 10%-15%.
10 immigrants stuffed in a &150,000 IE/CV depression- priced REO home can meet their pymts each working min wages jobs at the local del taco or as garbage haulers.
Sarcasm off
“It’s hard to ascertain how much money was sitting on those lots as we cruised by @ 80 per, but certainly each lot had many millions of homebuilding apparatus @ the ready, or not.”
Considering ONE excavator can run up to $200k, those places get into the tens of millions REAL quick.
“… each lot had many millions of homebuilding apparatus @ the ready, or not.” …
… just rotting away.
A wee bit of deflation, perhaps?
As in millions of dollars going poof?
ROTFLMAO.
But accurate. All that equipment is leased on credit. Nobody pays cash. The whole system is levered.
The write-offs need capital.
Now if Arnold /Obama completely open the floodgates to immigration ,then we can allow all the worlds impoverished to flood into CA/US and the fed will get them into a dirt cheap hud/FHA homes and the illegals can stuff 10 relations per home.
I loved the irony of seeing John “Amnesty for Illegals” McCain rejected by the two-thirds of Latino voters he has long pandered to on November 4th. For years the Republican political establishment and their fat-cat Wall Street controllers have seen immigrants as nothing but cheap, disposable labor - now its dawned on them that these Democrat-on-Arrival hordes will usher in the era of permanent Democratic Party rule, one that will be as corrupt, incompetent, and entrenched as any Third World plutocracy. Wealth redistribution, here we come!
Laddie,
I noticed the same thing about a month ago when I and a friend ventured north to fish the Columbia river. Every equipment rental yard was fully stocked. I even made a comment about it to my friend.
Mike
I’m anticipating bargain basement pricing for solvent contractors who saved for a rainy day. They’ll be like kids in a candy store when the equipment is auctioned off.
‘I noticed the same thing about a month ago when I and a friend ventured north to fish the Columbia river.’
How was the fishing? I decided I’m going to start doing that fishing stuff, as long as someone else cleans out the guts and tube thingies. I don’t think I’ll like that part.
Oh, speaking of fishing, the tribes are out in force right now, stringing drift nets entirely across Totten Inlet. I don’t even know how there are ANY salmon left in the ocean. The tribes can do it this way because they have shaken off the oppression of the evil pale-face and his picky little salmon-protecting rules, see.
Yeah.
‘Mother Earth, Father Sky’, my whitey BUM.
Jeezus, it pisses me off.
Oh, I forgot to include in my bitterness a discussion of how a year or so ago a bunch of Makah tribesmen shot a juvenile whale to death with, get this, machine guns. Their defense? It was their ‘right’, as First People tradition has always encouraged whaling.
Yeah. Whaling using the evil pale-face’s guns, sure, you bet.
Oh, and they didn’t even harvest the whale*. When they shot it to bits, it died, and then it sank.
*Probably for the best. Flensing whales is hard work and anyhow blubber and whale-meat is probably not as tasty as the oppressive white-man’s delicious teevee dinners, firewater, and Ho-Ho doublepacks.
LOL, god love you Oly.
I’ve got your back on this one too, Oly. Double standards and irony dripping all over those clowns.
I remember reading a story about a cannery on river in Alaska that did that. They had 7 years of catching and selling Salmon.
Then came the 8th year when no fish showed up at all.
P!sses me off too. If they get those rights to fish like that, then d@mmit, they need to be fishing with the same hand-made, 200 year old technology, too.
Natural boats, too. No radios, GPS’s, life jackets, nylon rope, ect.
Hi Oly,
The fishing was very slow. The main salmon run had passed. Still had a great time though. The Columbia river gorge area is beautiful.
Oh, and I couldn’t agree more about the injins. Pretty pathetic.
Mike
“My wife and I are circling the Sierra Nevada and are in Lone Pine present”
bet one can pick up lone pine real estate dirt cheap by now.
tell me when a cheap single wide trailer + i acre lot comes up for $10,000 and i might bite.
I alway loved LP, a charming little hamlet in the Owens Valley.
The Eastern sierra wall view from there still one of the most stunning/dramatic mountain panoramas you’ll ever see.
Note:I once did a hike from lone pine campground at 6,500 ft all the way up to above 10,000 level. This was a few years back in my Sierra backpacking heyday.
I posted some notes on the climate in the Sierras conference in yesterday’s bits bucket, mainly at your request. There’s more to come, in a couple of days when I write up the rest of my notes.
The cottonwoods in Owens Valley really are gorgeous right now, aren’t they? It’s so nice to get to experience a little autumn, instead of the usual SoCal dust and hot winds.
I’ll check out your reports…
How was the mood @ the meeting?
The cottonwoods are awesome right now, and there’s some sort of brush further up north on 395 that comes in gold and pinkish sort of colors, the later looking like large cotton-candy.
Tamarask
as a photographer I envy your fall colors and snow topped mountains
Just came back from a little fall color photography walk in the local park (the last remains of nature we have here). Fall colours are probably at its best now here, but it is nothing compared to some places in the US and Canada.
nhz, do you have a website?
http://www.pbase.com/nh
you can also have a peek at the local real estate that way
Love the “order and chaos”, the others too !!!
Nice work. I like your style. I second the vote on “order and chaos.”
thanks
did you know that this ‘order and chaos’ has a lot to do with the theories of Mandelbrot and Taleb regarding market crisis etc?
Awesome photos, nhz!!
You do this professionally, right? (think I asked you that a year or two ago, but forgot your answer)
Truly beautiful pictures, all of them!
“the mountain-tops are lightly covered in snow”
Does that snow create drinkable water when it melts? Think of all the evangs and their thirst pangs looking for H20 thangs when it all goes bang(s). Will it just stop snowing? What about Mars, is there a historical frame you can use to “look” for snow there?
What does Adlai say?
The Brahmin?
Dr. Seuss?
It’s all so Seussical.
All that driving is causing more global warming, err, climate change.
Finally, a business idea occurs — we can market stillsuits, under the Atreides logo!
“Finally, a business idea occurs — we can market stillsuits, under the Atreides logo!”
Too much work, let’s just kill everyone at 30 and make a party out of it.
Didn’t Jonestown accomplish that?
‘Finally, a business idea occurs — we can market stillsuits, under the Atreides logo!’
Frank! I LOVE Dune! Looooovvvveeeeeee…once my sister Rachel and I tried to make ourselves stillsuits using garbage bags and duct tape and dryer hose and other scraps. We grew up in Utarr, and a stillsuit actually would have come in handy. It all went to pieces, though, when we got to the thighpads. You know, ‘where urine and feces are processed’.
I’m just going to delicately draw the subject to a close, now.
But that was when we quit with the stillsuit and went to go jump off the goat-shed and onto the haystack, or something like that.
Hi all, I don’t post here often. Anyway last month I saw something much like what you described, only it was on a backroads trip through upstate Pennsy on the way to Ohio. The route went across the northern boundary of the Susquehannock state forest before hitting route 66 that went down through the Allegheny state forest.
In two separate small towns along route 66, every single residence fronting on the highway was for sale. Would have stayed to take pictures, but it was getting late by then and no decent hotels were in sight.
In the main easy-west part (old route 6?) I saw an odd sight in those little towns that were basically one block off to each side of the main road. In parking lots, at schools, behind McDonalds, etc, were whole fleets of SUVs sitting there with leaves and pollen all over them. Clearly they had been parked there for months, if not since last winter. Freaky. It was many more vehicles than the local dealerships could have been selling, so presumably they were trucked or driven in from elsewhere.
Down at the town where route 66 intersects with I-80, there was one of those large mobile home manufacturers. Obviously they had not gotten the memo to stop building, because for what seemed like 2 or 3 miles straight, the fields along the road were chock full of those halves of double-wides. None of it looked ready to withstand a northeastern winter. Presumably all of that inventory is going to degrade if left outside, unless an effort is made to cover up the parts where the two halves are supposed to join together.
Ben & others, thanks for a great blog!
nudge from CFN
Interesting observations Nudge.
Thank you.
lad…Just got back from four days of flyfishing in the Owens valley…Came back over the pass through Yosemite….The drive alone was worth the trip….
Please tell us about the trip. We are researching for our next eco-vacation.
A good portion of many a financiers ill-gotten gains may or may not be sitting in the Cayman Islands, and wouldn’t it be a crying shame if the banks in which their filthy lucre is sitting, were wiped out by a dove? (Paloma)
But at least they’ll have water.
yes, that’s an interesting issue. The EU is trying to ban banks that have offices in the Cayman Islands and other tax paradises liek the Dutch Antilles (of course many EU banks now have some small offices there), so they no longer can use credit insurance from their main offices in Europe. It will take time, but I expect them to take the first steps this year, maybe already at next weeks financial top. When the next shoe drops in the credit crisis, I think a lot of these people will start to worry about the return of their capital.
I was in Curacao last year and there is a lot of money and banks to go around that small island.
certainly, it is one of the serious black money hotspots.
I know a girl who lived there for a year because here father was working there. At the local luxury bars almost all people were young bankers from the Netherlands plus a few from the US. All of them were there for processing black money and other more-or-less shadowy activities; it’s still the basic income source of the Dutch Antilles I guess (together with drugs trafficking and tourism).
Their ill-gotten lucre may soon be (quite literally) underwater, if the storm surge is as high as predicted…
“Give me liberty or give me death!”
“Live free or die!”
At that point, America might as well apply for honorary membership in the European Union. It will be a nation at odds with the spirit of its founding, and embarking on decline from which there are few escape routes. In 2012, the least we deserve is a choice between the collectivist assumptions of the Democrats, and a candidate who stands for individual liberty – for economic dynamism not the sclerotic “managed capitalism” of Germany; for the First Amendment, not Canadian-style government regulation of approved opinion; for self-reliance and the Second Amendment, not the security state in which Britons are second only to North Koreans in the number of times they’re photographed by government cameras in the course of going about their daily business.
http://www.ocregister.com/articles/government-obama-point-2221207-left-one
Thanks, wmbz. Good post well worth reading.
Just as the USSR fell without bloodshed, so it appears is the United States. If that day comes, the rest of the world will wish it hadn’t.
All the hatred and vitriole for the United States may end very badly - and hardly just for us.
This writer is an idiot. Government health care “changes the relationship between state and citizen into something closer to pusher and junkie.” Give me a freaking break.
The “nanny state”? Sure. It’s a cozy, protective nanny state for military contractors, bankers, and corporations. The average citizen gets all the bootstrap pullin’ they can handle.
Consider the source Bub. Payday/VictoryDay over the fascists is coming and they’ll blurt any lie to prevent it from happening. I’m not sure why they want to prevent it as I’d be willing to wager the above two are low income wage slaves.
I wonder if these guys have ever possessed a passport and have actually visited the places they’re stereotyping. Do we really want to compare the sort of life the “average” or “median-income” person has in Europe compared to what the same sort of person endures here? Don’t think there are enough happy pills in Merck’s vaults to stave off the weeping if we did.
Any New Yorkers care to give some perspective on Bloomberg’s extension of his term of office? IMHO, organized crime has increased dramatically on his watch, dwarfing the Mafia. I’m not talking about street crime (actually I am, Wall STREET crime). But it’s all sanitized for your protection and at least you won’t have to worry about whiffing any cigarette smoke. Sheesh, who cares? In New York, all you have to do is step outside and take a hit of the air. Who even wants a ciggy after that?
But what oversight does the City of NY has on Wall St. finance? You can bash SEC, FDIC, OFHEO, US Treasury, the Congress and what not for the mess, but NYC doesn’t regulate Wall St, even if Wall St. is located (physically at least) in NYC.
Concur… I think the people of NYC could have done much worse than elect Bloomberg..
It’s a raw power grab completely in keeping with Bloomberg’s dictatorial style– obsessing over stamping out any trace of private gun ownership rights, even well outside the city limits, seizing private property to benefit huge corporate interests, and on and on.
I am a former NYC’er who left the city in ‘93 and never looked back. For me, Bloomberg and the 75% of NYC’ers who like him crystallize everything that is wrong with that place. The alternating cycles of arrogance and cluelessness and demands for bailouts are appalling to anyone who just wants a normal, non-neurotic life. It’s a classic Tower of Babel concept that simply doesn’t work. I just pray that place doesn’t drag down the rest of the country with it.
I remember a few years back when all the financial soothsayers were saying homebuilders were a good investment because the builders had all “learned their lessons” and were only building to meet demand and were not going to carry inventory. We see how that is turning out.
Financial soothsayers have never been the same since the supply of sooth ran out.
I’ve decided to start a new drinking game……..
-Read blog
-Drink a shot of Cuervo everytime someone writes “gold”.
Or “water”?
Or “cash”?
Or idiot?
Just reading my posts, you’d be in the hospital! 
If you are a real hard-a##, do all four……..you’ll be at the emergency room getting pumped full of charcoal within the hour.
LOL
“you’ll be at the emergency room getting pumped full of charcoal within the hour.”
I got crazy one night in Wrigleyville after convincing myself the waitress was Liz Phair.
The process at the hospital is much worse than you describe.
If your exposure to emergency treatment is limited to watching the beautiful, caring, intelligent, highly trained, emotionally involved nurses and doctors seen on such shows as “E.R.”; boy are you in for a rude awakening.
“If your exposure to emergency treatment is limited to watching the beautiful, caring, intelligent, highly trained, emotionally involved nurses and doctors seen on such shows as “E.R.”; boy are you in for a rude awakening.”
Hear, hear. Never rupture your appendix on Christmas eve when the on call doctor is in a drunken stupor. I have the scars to show why.
Sure, its all fun and games until someone gets their eye poked-out…
It’s after the fifth or sixth shot that the conversation always starts to go something like “Hey man, let me show you this new gun I bought the other day……”
Back in my school daze, a buddy had been drinking too much, and he decided to see how the feed mechanism of a pump-shotgun worked. So he loaded one and followed it…….right out the end of the barrel, and thru the roof of the mobile home he was renting…..
“Fat, drunk, and stupid is no way to go through life, son…..”
Ah..yes…a Yale man!
Hey, I liked Goldwater.
All drinking games start out innocently enough…
Steep food price increases on way: experts
U.S. food prices will rise by at least 7 percent in 2009 because of higher feed costs for chickens, hogs and cattle, said a group of food-industry economists on Thursday.
It would be the third year in a row that food prices rose faster than the overall U.S. inflation rate. Food inflation is the highest since 1990.
“The sizable increase in the cost of producing food has not been fully passed on to the consumer,” said private consultant Bill Lapp. He foresaw food inflation of 7 percent-9 percent in 2009.
http://www.reuters.com/article/topNews/idUSTRE4A58RZ20081106
===========================================================
Some would dare call this deflation…
With arnold’s new sales tax didnt food already just go up 1.5%
“With arnold’s new sales tax didnt food already just go up 1.5%”
Ca &* LA county have already started their money grabbing and tax extortions in a desperate effort to keep the state afloat and to fund their stupid initatives and bonds passed by the idiot voters despite Ca being 10-15 bil in the red and unable to even pay it’s current bills. LA county now has or will soon have a 10%+ sales tax.
Will buy all my crap online. I hate paying exorbitant taxes to the greedy Ca state,which does nothing for the hard working middle class citizens but will make sure that the bloated state pension funds are funded, and all lower income/ impoverished immigrants get plenty of freebies. Note: Ca taxpayers are ripped off by 1 billion+ each year for medi-cal fraud.
I’m living in the Columbia Basin, a large agriculture region. The talk at the local cafe(s) has been centered around the credit crisis since farming operations depend on it; pay-up at harvest. Produce prices were way up last season, but they are down again contributing to angst. Good thing diesel prices are coming down.
I can assure you that the recent steep drops in agricultural commodities have NOT been passed through to consumer prices for food in Europe … stagflation continues. If Agri commodities increase in price again the coming months and this is passed through things are going to hurt over here. Experience shows that for this kind of stuff price increases are passed through very quickly, while decreases are passen through very slowly or not at all.
The only commonly purchased item that has strongly dropped in price here is gas at the pump; but I’m starting to think that was engineered purely for political reasons. Our Ministry of Truth is already citing the lower petrol prices as proof that inflation is receding. Energy bills will be up at least 20% next year, health insurance up 8% for far less coverage, etc. But hey, why worry if the petrol price is down?
Please forgive my ignorance, but don’t you guys have socialized healthcare?
If not, have you always had private health insurance?
From the article:
“Although grain prices have declined since summer, this year’s corn, wheat and soybean crops are forecast to fetch prices at the farm gate that are double their 2005 levels. Corn and soybeans are major ingredients in feed rations.
“We’ve been losing money for more than a year,” said Bill Roenigk, economist for the Chicken Council, who said producers intend to cut production by as much as 12 percent. “We need to recover these feed costs.”"
Something smells rotten in this article. Methinks they’re attempt at price gouging is going to end badly.
they’retheir attempt‘economist for the Chicken Council’
There’s a ‘Chicken Council’? Awesome. I wanna join. If they have secret handshakes and odd head-gear, that is.
Are there any openings for chicken inspectors??
Here in New York, the price of EVERYTHING is decreasing, except healthcare. And I mean food, clothing energy gold, cars, everything.
naive extrapolation.
And you’re going to listen to the Chicken Council Economists who didn’t see the commodities bubble?
Gimme a freakin’ break. That’s like listening to the NAR about house prices.
It would be better if the guy were named Bill Rock or Bill Little. Hey, with a name like Bill, he should be in the duck council…….
An economic migrant here… In 4 hours I board a plane on a one-way ticket to Seattle and a new job.
I see I missed the mini-thread on the Seattle area in yesterday’s bit bucket. I don’t remember where, but I downloaded a PDF about a week ago showing a map of Seattle and Bellevue and 30 stalled construction projects.
After being a long time homeowner in Texas, I am going to rent a small apartment for the foreseeable future. (I guess getting divorced plays a part) With what little getting out around Bellevue and surrounding I have already done, I spotted tremendous prices. “Homes from the $700s” one sign said for a new development south of Bellevue. The houses there looked like $130-160s back here in Texas, which I am departing. Even with my tremendous new job ($87k+ raise) I couldn’t reasonably afford something like that. Still it feels weird to have one’s personal situation going in the opposite of the general situation. Growing up, when the economy tanked (SE Michigan ’70s - early ’80s) my parents always felt the cutbacks (school teachers - property tax votes to fund the schools would get voted down) and I remember some lean years.
Oh well, gotta final pack and put Texas in the rear-view mirror for now.
Where in Texas you moving from?
Deep,
That’s a nice raise!
Mike
I think you miss his point. Companies have to offer premiums like that, to get professionals like DITHO or myself to relocate due to the cost of housing, and it’s still a big step step backwards. I tell recruiters up front I won’t do it, I’d rather work where I want for a ~$60K or more discount.
And now to add insult to injury, people who can actually afford the ridiculous SFH prices he mentions need to have household income in the range of $200-$250K or above. That puts them in the new magic tax bracket we all hear is coming.
I’m not trying to make a political point, but rather a housing observation - don’t the new proposed income tax structures almost guarantee a greatly reduced pool of buyers (below the small pool remaining at this point), for the areas still hanging on to bubble prices?
Having been thru the divorce deal (and depending on your financial situation): Stay with the small apartment. Try to find one with a lot of age-appropriate single women. Not that I advocate getting back into THAT right away, but admit it………checking out an attractive female always make the day better.
You will be surprised how little you actually have to spend on yourself when apartment living (especially the reduced utilities, property taxes, and time spent mowing yards, fixing stuff, etc.)
This time and money can be more profitably spend doing stuff you REALLY want to do.
RE: You will be surprised how little you actually have to spend on yourself when apartment living (especially the reduced utilities, property taxes, and time spent mowing yards, fixing stuff, etc.)
Ain’t that the truth, Gulfie.
I remember the biggest obstacle in my mind was the transition back to apartment living after my divorce.
But once settled in- all the fookin’ yard stuff, raking leaves, fixing the gutters, unplugging the toilet, plowing the snow, et. el., was done by the landlord.
So ,it went from trepidation to, “Hey, this is fookin’ great!
Friday rolls around so you throw your week-end shit into the car and off ya go with no guilt about leavin’ stuff undone.
My only problem was the average age of the wimmin in the complex musta been 80.
The landlord just loved old widowed women cause they paid their rent on time and never caused any trouble.
But WTF…I used to get a batch of free home baked cookies every now and then.
Today’s emancipated woman doesn’t know how to bake good cookies
I’ve got one that does, and I made sure my daughters learned it too. Cookies are essential.
Date oatmeal.
Date oatmeal - priceless!
Guess what Blue?
Hubby, son, and Leigh can bake our collective bums off - AND look great!
Smiles,
Leigh
If a tenant doesn’t first try to unplug the toilet himself then he will be kicked out in no time. That’s basic stuff.
What the hell are you people eating that you are plugging so many toilets?
Get yer head out of the plung…er…
Leigh
Seattle has many fine a$$ed ladies; the hilly terrain does it to ‘em.
‘the hilly terrain does it to ‘em.’
It is true. I must solemnly tell you that you could bounce a quarter off my bum, and it is all because of the exceptional hilliness of my environs. Of course, I’m also completely translucent and have grown some nictating eyelids, so there’s that. (It’s rainy here, as well as hilly.)
“In 4 hours I board a plane on a one-way ticket to Seattle and a new job…With what little getting out around Bellevue and surrounding I have already done, I spotted tremendous prices. “Homes from the $700s” one sign said for a new development south of Bellevue. The houses there looked like $130-160s back here in Texas, which I am departing.”
True, true. What anyone relocating to Seattle will find, is one of the most expensive living arrangements the country offers. And, it’s not just housing. After the first trip to the grocery store, restaurant, gas station, etc. it’ll all become clear. An $87k salary in Seattle is like $40k in other parts of the country.
I posted a reply which hasn’t shown up. At first, I incorrectly read that your position payed $87k, not that you received and $87k raise. You will do fine in Seattle. That’s plenty to not only survive, but thrive. Wait a few years at least, and you’ll be able to buy a nice house. Don’t buy into the “it’s special here” crap that all homeowners and the like spew. 10 years ago, very nice and livable homes in Seattle could be had for well under $300k. Those days will return. It’s just a matter of time.
Hey DeepInTheHeartOf,
If you need any Seattle-area info/opinion, I’d be glad to help out.
I live here in queens….Putting tolls on the 59th st bridge would be a disaster traffic wise…it would take an hour to drive 3 miles…wasting far more manpower and gas then it would ever save. the streets are not designed to handle that much SLOW traffic.
—————————————-
Sources: MTA To Toll All East River Bridges
Cash-Strapped MTA About To Drop Hammer On Everyone
Congestion Pricing May Also Be Back On The Table
Reporting
Marcia Kramer
NEW YORK (CBS) ― Believe it or not, there is even grimmer budget news.
The Metropolitan Transportation Authority is swimming in a sea of red ink and sources tell CBS 2 HD drivers in the city might not like the bailout plan.
Nearly half a million cars go back and forth over the Brooklyn, Manhattan, Williamsburg and 59th Street bridges every day for free. Some people think that’s not right.
“We already have tolls at the Battery Tunnel, Midtown Tunnel, the Triborough Bridge let’s put pricing on all of the crossings in between,” said Sam Schwartz, one of the leading transportation engineers in the country.
Guess what? State and city officials now seem to agree. Sources tell CBS 2 HD that putting tolls on some or all of the East River bridges is part of the bailout plan being considered for the MTA.
“People coming into the city should be paying for some of the service they get,” Schwartz said.
Tolling all four bridges may be a heavy lift for Mayor Michael Bloomberg right now, which is why it’s possible tolls could be put on just two.
Another option is to have tolls only during morning and evening rush hours.
Sources say putting tolls on all four spans could raise almost $1 billion for mass transit.
“That’s crazy,” said Alex Shaw of the Bronx. “We’re taxed enough. They’ve got to get the money from someplace else. Stop putting it on the motorists.”
Added James Yglesias of Brooklyn Heights: “You can’t punish us for driving.” “For me, it’s not good,” said Jorge Morena.
Surprisingly, not everyone is against the new tolls.
“People that don’t live in the city should pay a little bit extra,” said Debrah Levy of Greenwich Village. “People that are in the city need the break on the subways.”
“I don’t like it at all. I think that’s ridiculous, but I mean, hey, if it’s going to better our city in any way,” said Torey Guite of Flatbush.
“I wouldn’t be in favor of it, but if this is something we have to do to stimulate the economy then I’m all for it,” added Angela Grant.
But it may not stop with the East River tolls. A top transit source told CBS 2 HD the mayor’s full congestion pricing plan is also back on the table.
On Monday, the MTA will reveal just how much in the red it really is. Even with the East River tolls, a fare hike on bus, subway and commuter rails is expected.
“People that don’t live in the city should pay a little bit extra,” said Debrah Levy of Greenwich Village. “People that are in the city need the break on the subways.”
I’m going to have to track Debrah down and give her a big, fat kiss. There is no reason that all of these idiot drivers need to drive into the City. They drive like jackals. I would especially like to see any vehicle with a Jersey license plate forced to pay 6 times the toll that anybody else pays. That would be sweet.
NYCBoy:
I agree to a point, but all the feeder roads to the 59th bridge would back up for miles even with ez pass, you would still need cash lanes
The only solution is to get rid of the Bike lane and make it a have buss and hov lane But then that would piss off all the bikers and runners and i”m not even sure a bus could fit on the outer roadway of the bridge… I know it cant on the outer lane to queens max height is only 8′5″
Don’t disagree with you, but I am getting a little tired of being taxed/user fee’d out the wazoo and being the sucker of last resort for all these government budget shortfalls. I’m convinced that there is a certain percentage of the populace (government micro-managers, tree-huggers, public-transportation unions, etc.) that wants to use tax and public policy to force people out of their cars, and onto public transportation. But what happens when they kill off the goose that lays the golden eggs?
(Damn, I said “gold”…..time to take a shot…..:) )
Hey, goldstream…Gold! Goldgoldgold! Hahahahaha!
“That would be sweet.”
Only if the increase in visitor fees and taxes is matched dollar-for-dollar with cuts in social welfare handouts being made into non-productive leeches in the city.
Why should a New Jerseyite who spends money and time in NYC pay for the locals’ handouts? They already do every time they spend money there (including paying their employers’ city/property taxes).
I think you should be THRILLED about all the money city workers from Jersey blow in the Big Apple just by showing up to work. Seriously, I do.
I’ll say it again — there is going to be a historic exodus out of NY, and as the Lad says, probably Cali as well. FWIW, who the hell wants to live in Boston — what a dump! Unless you’re part of the guaranteed-income gang, of course.
The boom years hid the sins of overtaxation and stunning giveaways to civil servants, much like an earlier boom masked the problem of Detroit unions.
I ran into a friend who works as an economist and he suggested looking up data known as “Net Internal Migration,” if you want to understand whether your locale is growing or dying.
NIM shows, exclusive of births and deaths and international immigration, whether more people are coming to your burg — or if, as he said, “they are voting with their feet and getting the hell out of Dodge.”
For the last decade, Nassau County has been losing people like a flood, and now Suffolk County is following. The 5 boroughs are also losing established residents. Folks, this is legit information you can use to make prudent decisions for your families, as opposed to the sniping we all enjoy so well.
If all a geography has to offer is a long slog, and you are not part of the select groups anointed to receive an unfair share of the booty, sooner or later you too are going to be waving goodbye in the rear view mirror. I have a saying for overtaxed places: “Half the fun at twice the price.”
If politicos had a brain, they would start acting as if they are a vendor offering a product to potential customers. In this case the product is geography, and the customer is asking, “For what it costs where you want me to live Dear Politico, what am I getting for my money?”
Bloomberg should have gone out a hero — he is going to regret his decision to work so hard to oversee a cataclysm.
Thanks, Frank. I appreciate the info; should come in handy.
Sure, and I want to be clear I am as guilty as charged when it comes to enjoying the snark, one of the reasons I like coming here is because the Lad show is so entertaining.
One of the best post I have read in a long tome…Nice job Frank…By the way…Where are you ??
tome = time…FPSS will likely flame on me now…
I don’t flame on obvious spelling mistakes but lapse in logic … just you wait!
Thanks, I’m in Suffolk County, NY, seriously contemplating a move back to Austin, TX., where I could lower my housing costs by 30% just by getting on a plane.
Maybe I could even get my old job back at Katz’s Deli [proud alum, '94-96 and 1998].
Frank, thank you for the NIM info. I have also wondered about our net migration situation here in Cali the Frisco Bay Area, and in out State in general. I am sure the stats are oput there.
I fear that it is not pretty, when evaluating the educational attainment/skill level/relative income levels of our “Incomers” versus the “Outgoers” (Minus births/deaths, etc). We shall see.
Give it three or four years and we’ll be seeing articles about it in the MSM: “Last to know, first to get it wrong!”
I know I give this stuff way too much time and am probably approaching Oil City, PA proportions with my civil service obsession. Chances are likely, much like the housing bubble it’s going to implode whether or not I freak out about it.
To mangle a current trope: “It’s too big not to fail.”
But also like the housing bubble, I think you can get yourself the hell out of the way. And the more I think about it, we might see something like an “infill migration,” in the U.S., away from the coasts and legacy civil service promises that can never be paid.
LOL @ Oil City, PA comparison!!!
That was like a shocker surprise just snuck at precisely the right point.
Frank, this is so practical, so useful, and so INTERESTING! Thanks so much for posting it!
BanteringBear -
Saw your reply in the BB late yesterday…I didn’t mean to mischaracterize what you had said or mock it in any way. And your point is well taken - moving anywhere w/o a job lined up is a risk, and moving someplace with a higher cost of living more so. I believe what you say is true that there are many people up there looking for tech jobs at the moment.
From my discussions with headhunters and VPs both here in Austin and in Seattle, it looks like pretty much everyone is putting a freeze on hiring. My fear is that if I don’t move now (while unemployed, soon to be houseless, and not being in a relationship), I will be unlikely to do it in the future as I’ll get settled down here again. I don’t much like the thought of keeping myself “in limbo” for several months, but you’re right that it is likely imprudent to head up there right now.
I do appreciate your comments, and am open to any feedback (from anyone) on how to approach the situation. I tend to be a very practical/responsible person, but this is one situation I think I’ve convinced myself to throw caution to the wind, but perhaps now is the worst possible time to do that given the downside risk in the economy at the moment.
Hi, drumminj. No offense taken, whatsoever. I only wanted to point out that there are tons of people flocking to Seattle thinking that it’s employment utopia, and that’s far from the truth. Many companies have, as you pointed out, instituted a hiring freeze, and others are downsizing in the way of outsourcing, etc. There is HUGE competition right now. Since you are unemployed, it makes sense to move where you want to. But, as has been pointed out, Seattle is super expensive and will burn your money up faster than most places in this country.
I posted a response above, which hasn’t shown up, that an $87k salary in Seattle is akin to making $40k in less expensive markets. Spend a little time at grocery stores, restaurants, paying utilities, house shopping, etc. and all will become clear. The current costs of living can only be described as completely outrageous.
Many people are leaving because of it. The price of a U-haul from WA to OR is much more expensive than vice versa. That said, there is still a huge influx of people in your age group from all parts of the country looking for well paying tech jobs. Many will be disappointed. It should also be noted that wages are declining. One only needs to look at Microsoft to see what’s happened.
I wish you well, and keep us posted on your progress.
‘I wish you well, and keep us posted on your progress.’
Ditto, drummy. Keep us up to date as you go along.
Drummin, are you all set on that part of the country? There are many high tech - that is to say, IT - jobs in Northern Virginia. They may not be as glam as in Pac NW or Silly Valley, but they are plentiful, and as the government /military are the engines, they tend to be stable. Just a thought.
I’m watching a rerun of Property Ladder. The jerks are flipping an 800 square foot house in El Segundo, CA. They are asking $775,000. Are these the prices that the assho!es in Congress want to keep? Why don’t all of the idiots just turn on a TV set and see how f—ed up things became.
I still laugh at another blogger’ verison of the “Compton Parade of Homes”
Typically, an 800sf cinder-block house/bunker, with 6ft chain link fences (some with razor wire?) and barred windows.
Asking prices in the mid $400K.
We have to go back to 1997 prices over here in San Diego. I kind of like the idea of rewriting loans way down for the “foreclosure nation” and not sharing with the profits. If they want to save the home then mark it to market. Appraise it for what it is really worth.
600=300! That could be compelling.
That could be compelling ??
Figure out a way to gey mortgage rates down to 4% fixed…That would make it compelling…
“I’m watching a rerun of Property Ladder. The jerks are flipping an 800 square foot house in El Segundo, CA. They are asking $775,000. Are these the prices that the assho!es in Congress want to keep? ”
I did not see the program but i know el segundo . Actually it is among the very tiny % of La zips which showed an increase in median prices. Here’s why. It is isolated, close to the beach, has a small town ambiance with a charming little main street , is close to the LAX/Aero-industrial complex and is 99 % crime free. Limited supply of sfhs there.
that said el segundo not as posh nor chic as manhatten beach nor marina del rey and it is tucked almost beneath hugh LAX. I say that $600.000-800,000 for a 3/2, 1500 sq ft, 5000 lot is about right.
El Segundo was selling 3 & 2’s back in the mid 90’s for 250/350k range.
Which part of El Segundo do you like best? The part near the sewage treatment plant, the part next to the refinery, or the part under LAX? Tough choices I know. Not to mention you can’t actually get to the beach.
“Not to mention you can’t actually get to the beach.”
actually u can but the route is tricky. I think Grand ave, the hidden back way, gets U to the beach. Imperial hwy not an appealing route but will end up at the beach as well.
Beach water not to be trusted due to the nearby treatment & power plants. Very few access points get u down to the beach including the main one at end of imperial hwy, (maybe doheny beach).
U don’t want to test the water but the 40 mile LA beach bikepath runs thru there. The sand is white and i suppose OK.
Note: it is true that ‘LA County beaches’ are quite inaccessable ( due mainly to traffic clogs and nimby factor). except to the locals. That goes for every beachisde community in the westside, southbay and mailbu . The beaches in the OC ,especially huntington beach, are far easier of access and better overall than any LA beach as far as accessibility to the gen public/visitors.
Did Q-Tip ever find his wallet?
Nov. 8 (Bloomberg) — Lewis Ranieri, who helped create the mortgage-securities market in the 1980s while at Salomon Brothers Inc., became a victim of its collapse after his Houston-based bank was seized.
Jobless ranks hit 10 million, most in 25 years
October’s jobless rate was the highest since March 1994 and now has surpassed the 6.3 percent 2003 high after the most recent recession. The government also said job losses were worse than first reported for the preceding two months, 284,000 rather than 159,000 in September and 127,000 rather than 73,000 in August.
http://biz.yahoo.com/ap/081108/financial_meltdown.html
How can they be that far off???? This had to have been done deliberately to keep the markets from collasping! How far off are they on the numbers just reported? I wish they would just put the reality of the mess were in out there so we can just face it and move toward a recovery. All this fudging of numbers just drags this mess out and makes things worse!!!
As has been discussed many times here, the real numbers take time to gather. They guess and with a swift decline, they aren’t going to have real data on the bend until sometime after.
To the HBB crowd for the gathering today, please count me there in spirit. If I was still in the East Bay, I would love to come and meet with everyone. Remember that this housing fiasco was the main reason we left for a more affordable area. I would love to read about the gathering later on the blog. Love reading posts about the Bay, and California as a whole. I will be there in spirit with you. Now in Land of Enchantment.
I would love to have a governor contest between our Judas (Richardson - NM) and the Governator and opinions of each’s status in people’s mind. And Batman (Kilmer) may run here. Too funny to even think about.
$775K for a 800 sq ft dump in El Segundo (LA area). For those unfamiliar with El Segundo is right under the LAX flight line. Constant defeaning plane noise. You couldn’t pay me to live there. I lived near there for 5 years, so know the area well.
Forget the planes….
It’s the sewage treatment plant that distinguishes El Segundo. The ocean breezes carry the fragrance straight up Imperial Blvd right into the neighborhoods
“It’s the sewage treatment plant that distinguishes El Segundo. The ocean breezes carry the fragrance straight up Imperial Blvd right into the neighborhoods”
That and the chevron refinery. Elsegundo has it all-the lax complex, the hyperion sewage plant, the scattergood power plant, chevron refinery. lots of good paying jobs but all that at the envrionmental drawbacks of having these power facilities in your backyard.
Stil that hasn’t kept nearby Mangatten Beach from having average homes prices in the 1.5/2 million range . MB is 10 miles south of el segundo .
In this depressed economic climate jobs in power plant/aerospace/LAX infrastructures and their associated high- paying jobs will outweight environmental considerations. probalby the airport noise and power plant pollution smells are felt mostly in late afternoon & evenings when the folks are at home or in bed.
Just received my Chase credit card bill. Hidden in the 1/3rd sheet of junk advertising was a notice about “important changes to your account”
- New service charge $10/month - Balance or NOT
- Min payment going from 2% to 5%
Effective Jan 09
BE SURE TO LOOK AT ANY BILL YOU RECEIVE FOR JUNK LIKE THIS.
I have 780+ credit. DTI (house and any credit) - 14%
Looks like the umbrella is being asked back by the bank now that it is raining.
I’ve closed credit card accounts for less than that. If one is going to have an annual fee of 120 bucks, one might as well get an AMEX charge card.
I find myself keeping the cards out of my wallet and replacing them with cash these days.
What gets me is that this is a 15 year account paid perfectly. It seems now in order to keep the longest term accont on my credit history I am being milked 120/yr.
Close your account and keep using cash. They need you more than you need them.
What he said.
People worry too much about their “credit score” and all that horsesh*t. Did you see any of that making any difference in this absurd bubble?
(But you should monitor your credit report for identity theft reasons.)
Just get another card….
Late response, but on the chance you see it ylekiot1 -
Call them!
Threaten them!
Take a stand!
And good for you for catching the sneaking SOBs (forgive my language).
Best,
Leigh
P.S. Good customer’s are difficult to keep in the days ahead - remind them firmly of this fact!
Grrr…hair on fire.
Try calling them and telling them that you will NOT keep the card open if they are going to charge you any fees.
Mention your FICO score, and stress that they need YOU more than you need them.
Good luck, and please let us know how things turn out.
“- New service charge $10/month - Balance or NOT”
Time to change credit cards. That’s insane.
I say call the…er…company.
Me believes the supervisor just may change the tune - I know.
Belief in one and and…er…hope in the other.
I’ve had success with my ladylike charms and firm conviction.
Knowledge of HOW to obtain the person with the authority to change the outcome is invaluable, I must admit.
Go for it ylekiot1 - you have nothing to lose, but for a few hours of verbal fencing!
Best,
Leigh
Is keeping the card really _worth_ a few hours of verbal fencing? “Please close my account immediately” takes only a matter of seconds. My time has value…
OPEC president: Oil cuts likely if no price rally
Expect OPEC to break down soon as member countries produce above their limit.
Yep, each OPEC country will have to cheat in order to make up for their budget shortfalls.
I love Karma in the morning.
Oil prices falling down also make it more attractive for tens of millions of new Indian and Chinese motorists to take to the roads. Based on the American auto experience, these will be permanent oil consumers as the Chinese and Indians develop the same love affair with the car.
The hard thing to figure is what is the trading range of the price per barrel? Is $60 the lower limit?
It does not really matter. I’m finding Canadian oil trust stock ownership a win win situation. Price per barrel falls - yield is 20% on my stock. Price per barrel increases, my stock price increases. At 20% yield, I’m just reinvesting dividends monthly and don’t worry about the $10.99 trade fee of TD Ameritrade when buying 15 shares per month.
Which stocks are you in?
Pengrowth (PGH).
Got to cut production if the storage tanks are full. Austerity!
I am in the middle of a possible job change. It’s not better or worse, just different. It would position my family well for whatever may happen. It’s basically tele-commuting which would allow me to eliminate a car and the associated maint. & commuting costs, stay at home and avoid child care, relocate to a way more affordable market than Florida.
I’ll post more details later, and if it works out. The Great Unwinding is hastening my “Great Departure from Flawda” plans.
If done correctly, this will put about $1,600/mo. extra cash in my pocket. The flipside is unemployment.
Good luck. I telecommuted for a couple years at the company I was working for and loved it. Would do it again in a heartbeat.
I moved my office to my home twenty years ago….I have the availability of a commercial conference room if I need it…I rarely do…Maybe once a year….At the time, it was considered un-professional to not have a commercial office…I even used the address of the conference room for my business address just so clients would not know that I worked out of my home…It was one of the best decisions I ever made for me personally and for my business…
I love the days when I work from home. I can swear even more, whilst wearing my pink jammies with big smiling monkey heads on them. It’s like Heaven, man.
Do you host videoconferencing in those monkey pants?
A PO Box works as well as an office address.
If I had an annual income above $250,000 and was concerned about Obama’s socialism, I’d consider the following strategies:
1. Have a high stake in AAA municipal bonds
2. Use municipal bond income to regularly buy stocks paying no dividends and not take any capital gain.
3. Buy $10,000 worth of paper and electronic series I bonds per year and $10,000 worth of EE savings bonds per year.
4. In 2012 or 2013 cash out municipal bonds to buy a primary residence after all the liars left the neighborhoods they could not honestly afford in the first place.
This is a war against socialism. One should not waste time trying to convince others to become capitalists, but take the direct approach and protect his own values.
History repeats itself. We are merely repeating drab gray socialism. But we will return to the individualistic “morning in America” after we get through this dark phase that is settling in. The smart ones will take good care of their physicall health to be able to live to see the day of a Congress full of Barry Goldwaters. It will happen.
The late Harry Browne had sage and timeless advice in “How I Found Freedom in an Unfree World.” Even back in the early 70s when we were in a fervent socialist phase, he wrote that there are a lot of loopholes in tax laws where you can avoid them as much as you want.
Now with many more laws and many more people, there are many more ways to avoid taxes and heavy handed socialism in America. Most democrats in Congress don’t like taxes either. They buy and hold stocks. Perhaps many of them have gold coins. Perhaps many of them have money tucked away overseas in tax havens. Even Penny Pritzker, the gulfstream socialist responsible for Obama becoming President, hides a lot of her money overseas to avoid taxes that Obama will impose on her - http://blogs.suntimes.com/sweet/2008/08/the_power_of_penny_pritzker_bl.html - ha ha, too bad about you little people who earn $250,000 and cannot afford the same tax attorneys as her!
You should shop around for a good tax CPA. Mine also does taxes for certain big fish, and while he’s pretty expensive, he’s worth it.
The real difference, though is not basic tax strategy and tactics. The difference is that once you’re a big fish, you can make better deals because you bring more to the table - for example the sweet deals that Mr. Buffet just got on a couple of big investments.
Nov. 7 (Bloomberg) — GMAC LLC may leave thousands of individuals on the hook for about $15 billion of junk-rated debt unless the auto and home lender finds a way to pay its bills.
GMAC, the largest lender to car dealers of General Motors Corp., issued more than $25 billion of debt called SmartNotes over the past decade to retail investors….
People are smart.
SmartNotes aren’t.
Shear those sheep, baby!!!
BWAHAHHAHAHHAHAHAHHHAHAHAHHHHHHHHHHHHHHH!!!
Things are heating up in Chicago for Donald Trump. Trump filed suit in Queens yesterday to force his lenders to extend his loan on Trump Tower Chicago (it has already had a six-month extension.)
Even if the Tower goes into foreclosure (seemingly inevitable- because the mezzanine loan is due in May 2009 and there’s no chance of paying that off)- Trump himself stands not to lose much.
From the Wall Street Journal:
Trump files suit against lenders (Nov 8, 2008)
“The tower, which contains 339 hotel rooms and 486 condominiums, will be the second-tallest building in the U.S. behind Chicago’s Sears Tower and is expected to be completed in mid-2009. The hotel, on the lower floors, opened earlier this year. But sales of both the hotel rooms and the condominiums have come in below original estimates and the project’s current projected revenue remains short by nearly $100 million needed to pay off the senior lenders.”
Perhaps the wall of secrecy that protects the Fed from public scrutiny can be brought down with efforts like this one by Bloomberg. We could sure use a bit of transparency in our fraudential system, IMHO.
Bloomberg Sues Fed to Force Disclosure of Collateral (Update1)
By Mark Pittman
Nov. 7 (Bloomberg) — Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.
The lawsuit is based on the U.S. Freedom of Information Act, which requires federal agencies to make government documents available to the press and the public, according to the complaint. The suit, filed in New York, doesn’t seek money damages.
“The American taxpayer is entitled to know the risks, costs and methodology associated with the unprecedented government bailout of the U.S. financial industry,” said Matthew Winkler, the editor-in-chief of Bloomberg News, a unit of New York-based Bloomberg LP, in an e-mail.
Fed capitulates: the central bank is broken
FT Alphaville, UK - Nov 6, 2008
Or perhaps better, the entire banking system is broken.
For it appears that the US Federal Reserve has given up on the idea of easing stress on interbank and wholesale lending and is resigned to being the central bank-come-market-maker of last, first and every resort.
The smartest guy in the room thought raising the interest rate a few tenths to match the Fed rate would poison the interbank loan market (or something).
Maybe the fed just didn’t want the banks to have to PAY THE Fed 35 basis points on their reserves (instead of the Fed payign them interest)… once the Fed drops their rate to zero.
I was reading details of a listing in Toronto… Best example of real estate bafflegab I’ve ever seen..
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This Home Has Maximum Appeal To Fans Of Minimalist Decor! Its Understated Modern Taste Cannot Be Overstated.
More Guvmint intelligence:
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Bathrooms to Close Weekends at 19 NJ Parks
TRENTON, N.J. (AP) — Shops and rest rooms inside administrative buildings at 19 New Jersey state parks will be closed on weekends to help save money.
The cutbacks are scheduled to run through March 31 of next year.
State Environmental Protection Commissioner Lisa Jackson says people will still be able to visit the parks on weekends, but may find that rest rooms are not available.
Some fear that the cutbacks could become permanent if New Jersey’s finances do not improve by next spring.
Those parks will smell like p1ss next summer.
Why dont they just cut half the staff at the State Environmental Protection Commission and keep the toiliets open? Public health and the environment should come first.
To make a buck out this fiasco…
Rent some port-a-potys and have them delivered to the parks and then charge an admission fee.
Obama first press conference reveals that he is not that smart a person. I was shocked when he made that statement about Nancy Reagan. It does not bode well for his future decision making. I think he’s too emotional and I don’t like him already. I was happy on Tuesday night.
My prediction from 6 months ago still stands
Whoever gets sworn in on Jan20 would have wished they didn’t win!
C’mon Captain Obvious, how about something a little more “out there”, huh?
A little patriotic tear ran down my cheek when he made his speech Tuesday night. He must have worked hard on memorizing that. I wonder who wrote it? It was so humble, and he is so not.
It was HC who had the seance Stupid!
Love the rat-dog he picked for CoS. I wonder how many other ugly favors he has to pay back, now that he’s in the pantry. ch ch ch changes…..
Barbara/George SR were avid about an astrologer and psychic that I once or twice went to from LA in the mid 80’s. She didnt’ tell me, you know disclosure,secrecy and all that, but I had just called her, beau called me and said call her back. I was in Kennebunkport and so was she, and so were Babs/George Sr.
And yes, Nancy did also employ psychics/astrologers and a numerologist or two.
You betcha. Um, who is it who has witch doctors work over her?
Obama’s previous press conferences amply indicated that once he’s denied teleprompter assistance, his answers and logic become disjointed and wooden.
A Messiah, he’s not.
I haven’t seen evidence of this. Care to share some links?
Here’s a link to Obama’s post election press conference. Wooden? No. Disjointed logic? No. Does it reveal, in the words of llcarlos, that “he is not a smart person”? No. See for yourselves.
http://www.youtube.com/watch?v=GxGPPK3e4bc
inflation/deflation:
Germany’s biggest labor union IG Metall is officially demanding a 8% wage increase for next year. We already knew that (some German unions are demanding more than 10% increase for next year, way over the official 3.2% CPI). But now a politician from the SPD (labour) party seems to support their claims, saying that high wages are good for the economy. Spend, spend, spend - by the wheelbarrow I guess
it is clear that the few German bankers and economists that remember Weimar have been sidelined. In Netherlands the same situation is developing, although the wage increases are a bit smaller here (4-5% for next year, but often with additional bonuses and higher managers are getting far higher pay rises). No increases for pensioners or people on social security, of course so the income gap keeps getting bigger.
As mentioned earlier in the week, the Dutch government is on Red Alert because of a 0.3% drop in homeprices, I’m sure they would rather bankrupt the Treasury than see homeprices decline for a few more months. In Spain the government will pay half the mortgage for the next two years for everyone who can no longer afford to pay it because of job loss etc. Other EU governments will probably follow this initiative. No chance of deflation in Europe.
Incidentally, gold is doing fine in euro’s and certainly not dropping like in US$. Is the EU economy decoupling from the US?
Currency depreciates 20% and houses and gold “not dropping”. ECBs slashing interest rates and “is Europe decoupled from the US?”
No, I’d say you’re not decoupled. More like dragged behind the train.
yes, you may be right; very difficult to see what is going on if there is no universal yardstick of value. However, I still think the dollar surge is temporary so we should find out soon.
I thought the Euro surge was temporary. Truthfully, I thought the Euro itself was temporary. Well, OK, I think the dollar is temorary too, just much less so.
I lost my gusto….
where’s your “get up and gogh”?
Back from our circumnavigation of the Sierra Nevada…
Beautiful time of year for a roadtrip, there’s precious little snow, but just enough for one chair to be open @ Mammoth, and we were tempted, but $70 per lift ticket? Naaah.
The panorama driving south from Tahoe on 395 just kept getting better until Nirvana hit somewhere in the vicinity of June Lake.
Gas gouge award goes to Bridgeport, Ca., where the lone gas station was charging $3.99 for regular~
We filled up down the road in Bishop @ $2.77…
Gold.
Ben, we *NEED* the barf gif enabled.
:barf
This sounds illegal (not to suggest that our federal govt is beholden to a rule of law, or anything). Why should local governments get special deals that enable to buy homes at $1?
GEORGIA ECONOMY
Some foreclosed houses being sold for a dollar
HUD program sells houses to agencies that make them available for low-income buyers
By KEVIN DUFFY
The Atlanta Journal-Constitution
Wednesday, November 05, 2008
It’s a given that in a slumping market home prices are going to decline. But $1 for a house intown?
Apparently, even the huge U.S. Department of Housing and Urban Development can grow exasperated trying to sell a single home. So sometimes it dangles the offer of a buck.
(Lori Lewis of HUD looks through a home the agency is trying to sell to local government agencies for $1. The governments then make the homes available to low-income families.)
The catch — there’s always a catch — is that the buyer must be a local government wanting to create affordable housing.
Lawn Guy Land Business News
Suozzi calls for 90-day foreclosure moratorium
by Michael H. Samuels
Published: November 6, 2008
Nassau County Executive Tom Suozzi on Thursday called for mortgage lenders on Long Island to implement a moratorium on foreclosures.
Suozzi, speaking at the Long Island Housing Partnership’s Chairman’s Symposium, said he wants other mortgage lenders to follow the lead of JPMorgan Chase in giving borrowers a 90-day grace period to seek refinancing options and counseling services.
He also announced the creation of the Long Island Housing Crisis Task Force, formed through a $7.7 million grant by the federal Office of Housing and Urban Development’s Neighborhood Stabilization Program.
The task force will comprise of the county, mortgage lenders, nonprofits and developers and will work towards stabilizing Long Island’s housing market.
There are currently more than 6,000 foreclosure filings on Long Island, and more are expected, said Pearl Kamer, chief economist for the Long Island Association.
“Many of these people who bought homes simple had no business doing so,” Kamer said. “They had no wherewithal to pay back the mortgage.”
She said she expects the Long Island housing market to take two to four years to stabilize.
The task force will comprise of the county, mortgage lenders, nonprofits and developers and will work towards stabilizing Long Island’s housing market.
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Why do these task forces always include bankers and developers? Too much room for fraud and back-door dealings, IMHO.
If anything (and I wish there were NO committees and task forces), they should have unbiased, non-profit groups AND taxpayer advocates oversee these things.
Economy
California Considers 90-Day Foreclosure Freeze
by Carrie Kahn
California Gov. Arnold Schwarzenegger outlines his economic proposals Thursday in Sacramento.
All Things Considered, November 7, 2008 · As California continues to struggle with big economic problems, Gov. Arnold Schwarzenegger has proposed a list of measures intended to help — including a 90-day freeze on pending home foreclosures.
“Nothing will stimulate our economy and bring it back quicker than creating a stable housing market and keeping people in their homes,” he said this week.
Gotta love the pop up graph, which shows the percent of SoCal and Bay Area home sales that are in distressed status (defined as “home was in foreclosure within the past 12 mos”). The percent distressed sales went approximately 0 percent for both SoCal and the alt-A Bay Area in September 2006 to 50 percent for SoCal and 41.9 percent for the alt-A Bay Area as of September 2008.
How I bought a foreclosed house
There were pitfalls on the the way, but an L.A. Times reporter found that research, strategy and being free of loan baggage helped.
By Peter Y. Hong
November 9, 2008
The Globe and Mail
FINANCIAL CRISIS
A train wreck? Greenspan says he didn’t see it coming
Former central banker points to culprit - U.S. housing - as possible saviour in credit crisis
DAVID PARKINSON
November 8, 2008
TORONTO — Almost three years after he retired as the world’s most powerful central banker, Alan Greenspan is blaming the world for helping create the monster that arose on his watch: The U.S. mortgage bubble. But ironically, he now believes that monster might help save the world.
In a question-and-answer session at a Toronto luncheon yesterday before a crowd of 2,000, the former head of the U.S. Federal Reserve Board defended his record in office, saying global forces in the debt markets, and not Fed decisions, helped propel U.S. home prices and subprime-linked debt securities to dangerous heights. Now, he argued, a bottoming of that same housing market could be the key in allowing global markets to find solid footing again.
“The [U.S. homeowners'] equity is the ultimate collateral which backs up the whole international structure of mortgage-backed securities - much of which, if not most of which, emanates from securitization of American mortgages,” Mr. Greenspan said.
He predicted that U.S. home prices should stabilize “some time in the first half of next year.” Once that happens, “then instead of having this extraordinary uncertainty with respect to the value of assets on all banks’ or financial intermediaries’ books, they will then know what they are dealing with,” he said.
CLICK!
We crossed paths this evening with an appraiser friend of the family. I wryly asked him if this was a good time to buy a home (knowing that we are both long term renters). He suggested that the end of next year might not be a bad time to start looking around, then added that he had no idea whether the market would bottom out by then.
And on that happy note and including all the fun comments from the Cali thread I say “mark to market” all homes bought after 2000. 600=300 and 1.2 equals 680. Oh and those 400 thousand dollar condos equal 200k. There, now I solved the whole enchilada.
Can the government confiscate people’s 401k’s or t-bills?
I guess they can at least with the 401k’s. They did it in Argentina and even the Dutch government did something close to that some years ago (using ‘excess’ pension fund buffers to pay for government expenses). I guess there are many more examples in Europe if you know where to look.
Shipowners Idle 20% of Bulk Vessels as Rates Collapse (Update1)
By Alaric Nightingale
Nov. 7 (Bloomberg) — At least 20 percent of the vessels most commonly hired to haul coal and ore are sitting empty as steelmakers cut output and dwindling trade credit halts deliveries, Lorentzen & Stemoco A/S shipbroker Kjetil Sjuve said.
Fifty to 100 so-called capesizes, each bigger than The Trump Building in New York, have been unable to find cargoes or their owners won’t accept rental rates that have plunged 98 percent in five months, Sjuve said by phone today. Normally about 250 such carriers compete for spot bookings, he said.
“There are simply no cargoes,” Sjuve said from Oslo. “It’s primarily the steel market but it’s even more difficult due to financial markets and letters of credit in particular.”
Got deflation?
“Letters of credit are centuries-old instruments that transfer payments internationally from buyer to seller once shipments have been delivered.
Capesizes that were attracting rates of $233,988 a day as recently as June are now available for $4,793, according to the Baltic Exchange in London. That’s below the cost of paying for crew, insurance, maintenance and lubricants.
Capesizes are the second-largest commodity transporters, after very large ore carriers. The Baltic Dry Index, a measure of shipping costs across different ship sizes, has slumped 93 percent from a record in May.”
Wow, that’s truly unbelievable.
BTW, can’t someone open up an escrow shop for international trade? They could accept payment from an international buyer and hold it in escrow until the shipment clears, at which point they release the funds to the seller.
I think there are already some companies that do this. Why all the problems with the L/Cs?
“There is nothing the Fed can do to stop the collapse of the biggest credit expansion in history.”
Blue Skye 2007