Waiting For Good Deals To Become Even Sweeter
It’s Friday desk clearing time for this blogger. “Six years ago, Paul Nelson gave up his long career in the defense industry for what he thought would be a peaceful retirement in Tucson. But retirement hasn’t worked out the way he planned. In 2006 his wife of 46 years died unexpectedly. He tried to swap their house for a smaller one and lost a chunk of his retirement savings in the process. Then this year the stock market cratered, wiping out almost everything he had left. Now the 71-year-old is looking for work at local hardware stores and Home Depot and contemplating filing for personal bankruptcy.”
“Nelson is negotiating to sell his Tucson home for $80,000 less than his mortgage. ‘The market waited for Nelson to make a stupid move,’ he says. ‘We didn’t get any offers that year. People were cautious. We would get lookie-loos, and then the market would drop again, and we would lower the price. I have nothing left. I am not alone, I think.’”
“Recent federal action to lower lending rates and to purchase debt is helping to pull down mortgage rates to historic levels. But so far, these low rates aren’t translating into more home sales in Maine.’If you’re worried about your job, it doesn’t matter what the interest rate is,’ said Melinda Boehm, president of the Mortgage Bankers Association of Maine.”
“In the short term, Boehm said, that anticipation could keep some qualified buyers on the sidelines, waiting for good deals to become even sweeter. From August to October, the most recent quarter tallied, median home prices in Maine fell roughly 8 percent from the same period last year.”
“Agents are hearing from clients who want to hold out for better deals. ‘I strongly feel that people are missing the boat,’ said Rita Yarnold, incoming president of the Maine Association of Realtors. ‘All real estate is local. We should only be concerned about what’s happening in Maine. Now is the time for buyers to get pre-qualified and start looking. This market will soon be disappearing, taking buyers’ future profits with it.’”
“Michael and Cynthia Russell wanted to move to New York City, where they both work. Jobs are more plentiful there than in their town of Poughkeepsie, N.Y. But like millions of Americans today, the couple are stuck. They owe about $80,000 more on the home they bought in 2004 than it is now worth.”
“So instead of selling their home, Cynthia is going to school to become a registered nurse and Michael is working from home. ‘We have had to find opportunities closer to home,’ Michael Russell says. ‘We actually began trying to refinance in June 2007, but absolutely no one would take us.’”
“Jim Fawcett of Houston says the 6% decline in his home’s value is just enough of a drop to keep him from retiring and moving inland from the coast.’There’s probably no way I could even sell my house in this market — short of giving it away,’ says Fawcett, 70. ‘Homes in my area, a newer development, sit on the market for six months, don’t sell, then are taken off.’”
‘Mara Stefan’s house is an unwanted reminder of her life before divorce. ‘As part of the settlement, I’m stuck in a house I don’t want to live in,’ says Stefan, whose suburban Boston home is $60,000 underwater. She would love to move with her sons. ‘But it looks like I’ll have to be here awhile.’”
“Developer Homero Meruelo’s plans for a $300 million condo project officially ended Monday with a lender’s $100 bid during a foreclosure auction at the Palm Beach County courthouse. Meruelo had managed to win postponements of several previously scheduled auctions. But Monday, he wasn’t even aware an auction had taken place, he confirmed in a phone interview. ‘No one bid on it?’ he asked after learning the site went back to the lender for $100.”
“Meruelo said the majority of buyers have received ‘part’ of their deposits back and the rest ‘are being settled as we speak.’ West Palm Beach attorney Gregory Coleman, who represents about 17 buyers trying to recover deposits, said Meruelo has not offered to settle with any of his clients. ‘That is an outright fabrication,’ Coleman said. ‘The only money that these folks got back was the first 10 percent from Gunster & Yoakley.’”
“It was Wall Street’s version of an inside joke: Take a motley collection of largely unwanted assets, repackage them into a new set of bonds, and name it after the pristine white-sand beaches of an exclusive New Jersey town where Katharine Hepburn once summered. No one is laughing now.”
“Deals like Mantoloking were ‘the height of lunacy,’ says Joshua Rosner, a bond market expert who issued multiple warnings about lax lending standards during the past seven years. least until defaults started piling up. ‘Wall Street and Washington acted in concert to provide an artificial sense of a safety net,’ said Julian Mann, a Los Angeles-based investment portfolio manager who looked over many CDO offerings.”
“For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million. The difference between the two amounts was his bonus, a rich reward for the robust earnings made by the traders he oversaw in Merrill’s mortgage business.”
“Mr. Kim’s colleagues, not only at his level, but far down the ranks, also pocketed large paychecks. In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million.”
“Critics say bonuses never should have been so big in the first place, because they were based on ephemeral earnings. These people contend that Wall Street’s pay structure, in which bonuses are based on short-term profits, encouraged employees to act like gamblers at a casino — and let them collect their winnings while the roulette wheel was still spinning. ‘Compensation was flawed top to bottom,’ said Lucian A. Bebchuk, a professor at Harvard Law School and an expert on compensation. ‘The whole organization was responding to distorted incentives.’”
“‘The financial services industry was in a bubble,’ said Mark Zandi, chief economist at Moody’s Economy.com. ‘The industry got a bigger share of the economic pie.’”
“Sales of existing homes in Central Texas plunged 40 percent last month, the largest decline on record, as the recession and credit crunch arrived full force in Austin. The 990 sales were the lowest number for November since 1997, according to the Austin Board of Realtors. And the median price fell 3 percent, the first drop in four years. Real estate experts don’t expect next year to be any better.”
“‘The consumer is scared to death to buy anything because they are afraid for it to go down in value,’ said Mark Sprague, Austin partner for Residential Strategies Inc., which tracks the housing market. ‘I haven’t seen consumer confidence this low in Austin since 2001, when we had the Internet bust. ‘09 will be slower, the slowest we’ve had since 1997.’”
“‘For a while, it looked like Austin and Texas were immune to what’s going on (nationally), and that’s no longer the case,’ said John Rees, director of research for Angelou Economics in Austin.”
“Home Builders Research reported a dismal 180 new home building permits issued in Las Vegas, Henderson, North Las Vegas and Clark County, the lowest monthly number since the firm started tracking the local housing market in 1988. ‘”There is no way anyone can try and sugarcoat what is going on in the housing industry,’ said Home Builders Research President Dennis Smith. ‘What started as a bubble a couple of years ago has evolved into a horrific, humbling and scary atmosphere that has grown into a national economic crisis.’”
“Larry Murphy of housing research firm SalesTraq found prices of just $75 a square foot for new homes in the master-planned Providence community in northwest Las Vegas. That’s less than the average of $99 a square foot for some 2,000 foreclosures sold in November, he said. ‘Why would anyone pay more money for a repossessed bank home than they would for a brand new home?’ Murphy asked.”
“My children recently enjoyed an unseasonably warm December afternoon by running and playing games in the backyard of our northwest Redmond home. As their screams and laughter grew louder, I stuck my head out the sliding glass door to say, ‘Quiet down. You’ll bother the neighbors.’”
“But then I remembered. The two houses that border our backyard now stand empty.”
“Sure, we can look at all the graphs and statistics to get the depressing facts of Central Oregon’s housing market crash. But the bigger punch in the gut comes from driving around neighborhoods like mine. You can see a yard where a neighbor carefully planted trees and flowers now being overtaken by weeds. The screaming ‘Price Reduced’ signs only add to the feelings of desperation.”
“The houses in my subdivision were built in 2005 – when it seemed like everyone was upgrading to a new home and every construction worker was working overtime to keep up with the frenzy. I remember driving around this and other neighborhoods under construction and asking my husband, ‘Where are all these people coming from? Where are they working to be able to afford these homes?’”
“Here’s where we made our biggest mistake. We found our new home and purchased it before we sold the old house. We figured it would only take a couple months to sell a 16,000-square-foot lot on the Dry Canyon. No one was more surprised than our real estate agent to find that through the spring and summer of 2007, only a handful of people would even look at our old house.”
“By September of 2007, we joined the ranks of accidental landlords and pulled our house off the market to wait for things to improve. Obviously, we’re still waiting. Every month that we make a mortgage payment, I feel like we’re staying alive in some kind of real estate edition of Survivor. Except the only prize is to keep paying a mortgage on a home that is now worth about $65,000 less than what we paid for it less than two years ago.”
“I know that in time things will turn around and I will eventually meet new neighbors. For now, I can’t help but look at the empty houses and say, ‘We paved over pastureland for this?’”
“I wanted and needed to buy a house as much as anyone, but with my credit rating all I would have been eligible for at the time of the housing boom was an adjustable rate mortgage, an ARM.”
“[S]o I did my research … and made my decision. I would hold off on buying. I would rent and work on repairing my credit. I am outraged at all the pity being given to all those who didn’t do their research and took an ARM and are now in foreclosure trouble. … It’s their own fault. Foreclose, start renting, and figure it out on your own for once and stop depending on the government and taxpayers to fix your problems.”
“Call it the gospel of hard times. With all this bad economic news, we’re starting to hear a chorus of voices preaching the cultural benefits of financial crises. Surely it has reached your ears: a recession could force us to spend more time with our families. It could curb the excesses of our consumerist culture, make us learn to live within our means. Heck, it could purify our greedy capitalist souls.”
“A Temple University English professor even has pointed to all the great literature produced during the 1930s: James Agee, Nathanael West, Henry Roth. The list goes on. ‘If it’s true that adversity can bring out creativity,’ the professor said recently, ‘then the Great Depression was one of the great creative periods of our time.’”
“Gee, too bad the housing bubble didn’t burst earlier.”
Another great, if wintery week! My thanks to those who support this blog. Please check back this weekend.
Wintery weeks are the best!
Especially so when combined with the holidays and the return of rational microeconomic behavior by the citizenry.
You don’t seem to have much faith in the Fed’s ability to undermine rationality. (Nor do I…)
“Now is the time for buyers to get pre-qualified and start looking. This market will soon be disappearing, taking buyers’ future profits with it.’”
This idiot will be waiting years for any profits from houses in Maine. What is amazing is how many people still believe this crap even as our crack-head economy implodes before their eyes. Despite the best efforts of Bernanke and Paulson to give more crack to the addict, the era of debt-fueled consumption is over, and home prices will continue to adjust accordingly.
Last summer, I repeatedly warned people here to prepare for a depression. Plenty of posters thought I was crazy, but I did not really care. I will post the advice I gave then again now:
1. Get and keep a job.
2. Rent so you can be mobile for your job.
3. Avoid the U.S. stock market until the dividend yield rises to at least 4% (it is 3.1% now)
4. Eliminate debt unless you could pay it off if you lost your job.
Keep the popcorn popping,
Red Baron
Hey, where the hell is Neil anyway? Popcorn O.D.?
I finally made an offer on a house owned by Fannie Mae. It is a foreclosure, built in Jan2007 by Ryan Homes Oberlin model. The location is Martinsburg, WV. Ryan homes took 490K from the first owner and the bank put it as foreclosure for 280K, still on the market in zip code 25430 and address is 15 Ticonderoga Drive.
My offer was 200K cash and Fannie Mae rejected it. The agent in between is not giving any proof of rejection from Fannie Mae. I told my offer was in writing and I want a proof in writing from Fannie Mae. Nothing so far. I wonder if my offer was ever submitted.
I’m not sure what kind of smart people Fannie has hired or is everything just a big scam as they are easily getting taxpayer money. Or maybe the realtor is playing so that he can sell it at 280K only.
Wouldn’t be surprised if the realtor owns a similar place in the same development….
Perhaps if you really want to get into home ownership, you should try the same offer again using a different realtor.
Same issue here. Foreclosure listed in the 150s out here in San Antonio. I offer the bank 120k and they pretty much counter at the list price less a few hundred. Mind you, home has had a couple reductions, but, been on market awhile now.
I may try again in a month or two, we will see.
“A recession could force us to spend more time with our families. It could curb the excesses of our consumerist culture, make us learn to live within our means. Heck, it could purify our greedy capitalist souls.”
None of the other ones have. What makes you think this one will, dude?
Illegals man Illegals, we never had so many before, maybe they will finally go back home and it will open up jobs for Americans….Yes we will take them……….I promise!
——————
None of the other ones have. What makes you think this one will, dude?
That must be happening now. Just left my local Walmart with my son who loves to do his OWN Christmas shopping. He asked me the limit this year for everyone(immediate family members) I said the usual..$5 each.
He went around the store and in 20 min was done(Proud of that boy). Anyway, the point is that there was NO ONE in the Walmart. I looked around at the people shopping, a handful, I looked at the video game area, plenty of rock band, wii’s, and other such things. NO mad rush, and toys lined the isles by the cash registers, 5 registers opened, no lines.
Even my son said, wow mom, no one is here getting presents.
–
What is the most appropriate term for those who have been buying homes, forclosures and others, for the past 6 months when prices were falling at 20-40% annual rate day in and day out?
I already know one — knife-catchers — used here often. So, let us find a more appropriate term.
Jas
Bloody-handed, fingerless knifecatchers.
Chainsaw-huggers?
Stumpers.
Grenade-lickers?
Simply, willing fools.
balloonatics
Savvy Buyers… Savvy = Stupid
Joshua tree jockeys
Temporary “owners”!
“Agents are hearing from clients who want to hold out for better deals. ‘I strongly feel that people are missing the boat,’ said Rita Yarnold, incoming president of the Maine Association of Realtors. ‘All real estate is local. We should only be concerned about what’s happening in Maine. Now is the time for buyers to get pre-qualified and start looking. This market will soon be disappearing, taking buyers’ future profits with it.’”
On the other hand, it would be really stupid to buy when home prices are tanking and prospective buyers’ cold feet are succumbing to frost bite, wouldn’t it?
And where is the urgency these fear-mongering used home sellers perpetually try to inspire? It’s not as though home prices are going to be dropping at a 38 pct year-on-year rate one moment (like they recently have been in California) only to rocket upwards the next. Why not wait until you are sure the crash is history before you try to thaw out your frost-bitten toes?
‘All real estate is local. We should only be concerned about what’s happening in ______.’
This must be something they learn at those seminar thingies.
This would be a great Christmas gift and housing bubble momento for a loved one:
All Real Estate Is Local: What You Need to Know to Profit in Real Estate - in a Buyer’s and a Seller’s Market (Hardcover)
by David Lereah (Author)
4 Reviews
5 star: 25% (1)
4 star: 25% (1)
3 star: (0)
2 star: (0)
1 star: 50% (2)
See all 4 customer reviews…
2.8 out of 5 stars See all reviews (4 customer reviews)
List Price: $21.95
Price: $16.46 & eligible for FREE Super Saver Shipping on orders over $25. Details
You Save: $5.49 (25%)
In Stock.
27 new from $8.90
17 used from $1.31
Here is a one-star Amazon.com review to help you decide whether to buy this book:
My Gosh, June 8, 2007
By Steven Cassinger (Charleston, SC)
If you don’t know already by this date, Mr. Lereah has resigned his post in the NAR. He is disgraced all over the internet as a liar (do a Google search) and rightfully so. If he believes what he says, at worst he’s an ignorant fool. If he does not he’s a lying fool. Either way the man is a fool.
LMAF
How the World Works
By Andrew Leonard
Wednesday, May 7, 2008 09:04 PDT
David Lereah takes a turn as Chicken Little
…
Lereah now says that he, like everyone else, underestimated the impact of the subprime lending explosion on the housing boom: “That got so out of hand, and none of us realized the magnitude of it until it was too late.”
Maybe so. But maybe it’s also worth noting that near the height of the boom, in October 2005, Lereah gave a presentation in New Orleans in which he called two of the most vocal critics of the housing boom, Robert Shiller and Dean Baker, “Chicken Littles.”
Chicken Little was right. Might be nice for David Lereah to acknowledge that someday.
Professional liars don’t do acknowledgments.
“This would be a great Christmas gift and housing bubble momento for a loved one:”
I still prefer my Countrywide “Protect Our House” wristband that I picked up on eBay for 8 bucks, which included the hilarious loyalty pledge.
‘Deals like Mantoloking were “the height of lunacy,” says Joshua Rosner, a bond market expert who issued multiple warnings about lax lending standards during the past seven years, earning him status as an early prophet of the credit crisis.
So many of these bonds have become untouchable that they stand in the way of restoring the flow of credit that the global financial system needs to operate and that the economy needs to climb out of recession. Experts say that firm prices must be established for the bonds — no matter how low they may go — so the system can clear itself of these toxic assets.’
Wasn’t the intended purpose of the TARP to relieve Megabank, Inc of these toxic assets, handing them over to Joe the Taxpayer? What when wrong with the plan?
TARP money was snorted up as bonus blow.
If I’m going to sponsor a Wall Street financier with money extracted from my 401K and taxes from my wages, at least I should get their photo and a nice little note.
ROFL
‘All real estate is local. We should only be concerned about what’s happening in Maine. Now is the time for buyers to get pre-qualified and start looking. This market will soon be disappearing, taking buyers’ future profits with it.’”
Ahhh, Just another in an unlimited chain of RE realtwhore retards.
I wrote this in the CA thread right at the end of its useful life. But, as the CA problem may prove illuminating in general (about, for example, the complexity of unintended consequences), I thought I’d post it again, here. Apologies if this is not of interest or value:
California is in serious trouble. Here’s the board:
The state is running massive deficits, and may be unable to pay its bills sometime early next year.
The Democrats in the legislature want to balance the budget with mostly tax increases, but will tolerate some spending cuts.
The Republicans in the legislature want to balance the budget with spending cuts, but will not support any tax increases.
The Republican governor (Arnold) has no relationship with Republican legislators. Indeed, he has angered some Republican legislators because he has passed them in the hall and not even known who they were. So, Arnold cannot deliver any Republican votes for the budget, so there’s no one with whom anyone can strike a deal.
Tax increases are difficult to legislate because Prop13 made it necessary to get a 2/3rds vote to pass tax increases.
In response to that difficulty, for several years people have placed propositions on the ballot that earmark certain monies in the budget. Thus, spending cuts are tough to do because much of the state budget, at least on a percentage basis, has been earmarked by the proposition process, further eroding flexibility.
The state legislature is composed of idealogues on both sides, because of redistricting that has created “safe seats” for each party, further hindering the ability to negotiate.
Term limits have emptied the legislature of across-the-aisle relationships and experience, further hindering the ability to respond to the unfolding crisis.
Oh, yeah, several earthquake retrofit projects (e.g., bridges, highways) may be halted soon if the budget problem is not resolved. In other words, the budget impasse is not just about “welfare,” it is about basic infrastructure and public safety.
This is the state of California. I don’t know if other states have the same situation, but this looks to be a “perfect storm” of impending fiscal disaster. With respect to housing, nuying a house in such an environment is risky, for it contains risks above and beyond those we typically discuss (e.g., the likelihood of a decline to historic norms of price/income ratio).
This is not about Arnold or Gray Davis. It is a systemic problem, and both major parties have and continue to contribute to it.
IAT
Itsabouttime
Thank you for the insightful analysis. I’ve been saying all along that both Republicans and Democrats bear equal blame for their muleheaded and outdated ideologies. What ever happened to balanced individuals?
IAT: That is one of the most concise descriptions of our home state’s sad condition I have seen. Were you an English major?
SB
I’m flattered, but no, not an English major. A reverse English major, a sociologist, the worst writers on the planet. Maybe some good can come from exposure to bad examples! Given what’s unfolding before us, we can only hope . . ..
IAT
Good post, IAT. You are absolutely right that the risks of buying a house right now are greater than most think.
We also want to let the dust settle before committing to buying a house.
“The state legislature is composed of idealogues on both sides, because of redistricting that has created “safe seats” for each party, further hindering the ability to negotiate.”
+1 Exactly!
I heard on the radio the other day (can’t remember where) that the main reason Arnie wants to keep people in “their” homes in California is so that they cannot leave the state.
Kind of makes sense. The astute types who hear that would probably understand that by keeping people in “their” homes in California, the state will continue to get tax revenue to feed the massive waste and socialist engineering policies that have nothing to do with necessary services.
Better to have ten acres in a modest part of the state and bury your gold somewhere there.
Speaking as a 5th generation CA native and now ex-CA resident…
What California really needs is another Constitutional Convention. Throw out all the special-interest poorly-written ballot initiatives passed over the years and put in a new initiative process like Idaho has. Idaho initiatives do NOT have the status of a constitutional amendment but only that of an ORDINARY statue so the legislature can later fix or repeal them should they prove burdensom.
Most of the voters in California are tax recipients, government employees, or have an income low enough to pay no taxes at all. They don’t give a rat’s a$$ about spending limits or tax limits in California. The trend is irreversible.
O.K., you’ve further depressed me. We have a possible job move out of CA this coming year. We’ll have to sell our house, of course. We owe 135,000 on it (no other debt). At the peak, houses in our neighborhood were going for over 500,000. We haven’t a clue about pricing the house now given the market, and we don’t trust real estate agents. I’m worrying 1) no one will buy and we’ll be long distance landlords (yuck) and 2) we won’t make any profit (just enough to start fresh renting somewhere else would be nice, we’re not looking for retirement funding). We’ll be glad to leave CA - but will she let us??
Here’s a doozy from the Poughkeepsie, NY/USA Today link;
Jim Fawcett of Houston says the 6% decline in his home’s value is just enough of a drop to keep him from retiring and moving inland from the coast.
“There’s probably no way I could even sell my house in this market — short of giving it away,” says Fawcett, 70. “Homes in my area, a newer development, sit on the market for six months, don’t sell, then are taken off.
My point? All with an equity stake in a resumption of the housing fraud still stand by their old mantra of “I’m not going to give it away”. And Jim Fawcett is 70 years old and still has a very distorted view of housing.
Check out that particular link. There are some unbelievable tales of woe from recently retired fools who put their hope, faith and future in the “housing is the bestest infestment” lie. I’m amazed by the number of mature in years folks still making foolish gambles with their retirement.
Reminds me of a friend from high school describing how he was set for life, because he “owned” a house in Los Angeles……..in 1989, prior to the earthquake & King riots. I wonder if he’s learned anything through two bubbles? I think he’s still working.
‘For now, I can’t help but look at the empty houses and say, ‘We paved over pastureland for this?’”
Sigh….. add to that: wetlands, and forests, and riparian corridors…
I b’leeve I musta said the same thing about, oh, I dunno, at least 20 zillion times in the last couple of years?
That is why I have NO sympathy, none, none at all for ANY builder or developer anywhere.
And its also why, when asked what you do, you get that paranoid, suspicious look in your eye, isn’t it?
Another thing about her story. She bemoans all the building and yet that’s where she lives, in a new subdivision. I could see her complaining if they still lived in the old house and had to look at a buncha unoccupied developments, but she, herself, is part of the problem.
‘…and yet that’s where she lives, in a new subdivision.’
What?! I do NOT, either! I live in a freakin’ shack in the deep dark woods, built 20 years ago by what I suspect was some sort of drunken hippie who fetched hisself a 6-pack, or else a 32-pack, or else a 122- pack, and picked up the nearest wood and a hammer and set to work.
In fact, Mr. Man, I distinctly recall complaining to you how I opened an exterior wall out of curiosity and in order to see the magic of electricity, and beheld to my astonished horror what appeared to be a Safeways pallet or something. I just nailed it all back up, fast as I could, and pretended I had never seen it.
I couldn’t think what else to do, besides hope it isn’t structural, or besides tracking down the hippie and killing him/it. Hmmm. I AM making a ‘New Years 2009 To Do List’. Perhaps that can be #39. Behind #38, ‘Shaving Bigfoot and taking him to Steamboat Annie’s for french-fries’
The poor hairy galloot, all he wants is some french-fries. And a new goat.
PS. And I looked paranoid because YOU looked cunning and suspect.* You rejected tater-tots, didncha? A sure sign of something. Your Scharfen-Berger bittersweet chocolate colored eyes don’t deceive ME, nossir! I’m much too canny for yer!
* assumes a paranoid, suspicious look *
See? Paranoid. By ‘her’ and ’she’ I meant the lady in the story, not you OG.
Mea culpa, mademoiselle.
mmmmm…..burger…..
And you think salting roads to make them safer is the problem?
LOL!
Sighhhhh….look. I live in the woods, in the trees. You know, those big wooden thingies with green on top? Ferns? Shrubs? Pebbles and copious moss? Like that. Yes, waayyyy out in the woods, in a shack. There are a couple of acres around my shack, almost half of which were zoned type 3 wetlands long ago–due, no doubt, to a developer oversight, thank Jeebus he was not paying attention and allowed a wetland to be mapped–hence my constant chatter about frogs.
I love frogs.
And there we are. Okay? Okay!
And I will note, very mildly, in passing, that frogs don’t handle salt too good.
So, while we’re on the subjeck, did you in fact chug some Mortons and run out into the woods?
I hope you took notes. That’s scientificky and all.
Well, I know all about “waayyy out in the woods”, having once lived in a winterized deer camp in Vermont.
Not the Vermont that Alan Greenspan’s policies enabled over the last decade, with the multi-million dollar properties built by the Wall Street bonus crowd.
Nor the one that has attracted the followers of Bernie, the flatlanders who come from Brooklyn (or Jersey, or CT, or MA) like their leader to places like Burlington and Brattleboro, hoping to turn them into socialist paradises.
But the real one. Where if you didn’t plow and then salt your own road, you simply didn’t get there from here.
If you know what I mean.
“But the real one. Where if you didn’t plow and then salt your own road, you simply didn’t get there from here.
If you know what I mean.”
Yes. I do.
That’s why me’n the frogs have laid up plenty of supplies, they’s got mud, and me’s got 5 cords of firewood, and 300 fat candles and 3 flat cases of cans of soup, and THAT’s why we’sn can stay here for a bunch of weeks and do just fine.
Say, I know! Let’s have a big bonfire! And then more egg-nog! * busts open yet another bottle of rum *
Hey, where’s the salt? Oh, that’s right: we HATE SALT hereabouts.
hahahahaha!
And like the comedian who noticed that all those developments were named after what was destroyed to build them.. Deer Run, Oakdale, The Orchard at Pleasant Valley, just pick whatever hokey name you can think of.. There should be a webpage to randomly generate dopey condo complex names..
Del Boca Vista Phase II ftw!
My father was born in the town of Sherman back in 1921. After they cut down all the oak trees in the area, they renamed the town “Sherman Oaks”.
That first story about the retired Raytheon engineer raises so many questions. It says that he and his wife moved from Claremont, CA (where he had lived for 20 years) to Tucson in 2004. That was right near the peak of the bubble. Isn’t Claremont a fairly nice town in the LA area? You would think that somebody who had been a homeowner in LA for 20 years and sold his house in 2004 would have enough equity to buy a house in Tucson with no mortgage. I wonder what happened. Maybe he didn’t have that much equity because of HELOCs. The article says that he bought a 5 bedroom house in a neighborhood with a country club. That may have been a fairly big house in one of the most expensive neighborhoods in Tucson. Why does a retired couple need 5 bedrooms?
The article also says that he worked for Raytheon, Honeywell, and Hughes Electronics. Don’t any of those companies have pension plans?
The article also say that he had half a million in his retirement accounts when he retired in 2004 at the age of 66. That might sound like a lot, but it’s not actually not very much, especially considering that he had a long, prosperous career. I’m 45 and I probably make a lot lesd than this guy did when he was working and I have about $300k saved for retirement. (Of course, that’s down from $400k at the beginning of the year.) He must have made one or more of the standard mistakes when saving for retirement - starting too late, saving too little, choosing funds that are too risky or doing the opposite and choosing money market funds with low returns. Or maybe he borrowed money from his 401(k) accounts at various times for dubious purposes.
These articles always raise questions and fail to answer them.
When I worked at Hughes they had a pension and 9% 401k match(match was GM.H stock). They had to reduce the 401k match because not enough low level employees were taking advantage of it.
I worked at Hughes / Raytheon from 1996 to 2000. No pension plan, no stock purchase plan. Pay increases were stingy unless you were networked with the “in” crowd.
I worked 4 years from 1990 to 1994. I seem to remember things getting bad when C Michael Armstrong became CEO. I think he was the only CEO other than Howard Hughes not to win a Nobel Prize. He was an IBM lifer who came over and basically dismantled the company then skipped over to AT&T and dismantled that company as well. Last I heard he was on the board of Citi Group.
Good thing the board is finally looking ahead!
maybe his wife of 46 yrs got really sick and the wonderful medical system wiped them out.
“They” say, most americans wipe out the majority of their money in the last few months of their lives. Not before.
I hope that was the reason, but it sure sucks, if it was.
“For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million. The difference between the two amounts was his bonus, a rich reward for the robust earnings made by the traders he oversaw in Merrill’s mortgage business.”
This is despicable. Nobody is worth that. Follow the money, and you always get to the root of the problem. I wonder: are the Merrill shareholders are a fan of this?
They’re at the pawn shop.
I almost blew my coffee all over the monitor.
But GM pensioners don’t deserve their pension that they actually EARNED according to the Knuts.
Thank you, exeter.
My pleasure sister.
Whether the retiring engineers from Honeywell and Hughes and other industries deserve to be pitied or lambasted for their retirement “mistakes”, it’s bastards like Dow Kim who really deserve to be lanced trhough and pinned up on a telephone pole. A bonus like that for defrauding thousands of people, and engaging in activities which ultimately force hundreds of thousands of people out of their homes and shut down entire industries ? There is a difference between victims and perpetrators here.
“Mr. Kim’s colleagues, not only at his level, but far down the ranks, also pocketed large paychecks. In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million.”
The Gilded Age is over.
I heard the talking heads[an 8 box of heads] arguing about those bonuses. The talking heads from the market were incredulous that there was even talk of not paying those huge bonuses.
Rick Santelli said the smart people will desert Wall*Street if the bonuses are not paid. Where they would go he never said, but to me it showed that they were incredibly out of touch with reality if they think that you can go to any other industry and have a B school graduate make $130k + a $250k bonus.
Where are those jobs that pay $380k a couple of years out of B school?
They are in for a rude awakening. There are CEOs that make less (I think the CEO of Costco has a salary of only $300k)!!
In response to above posts . Weren’t the lure of commissions part of the problem with the real estate and loan industry during the fake run up . The money was so good that nobody wanted the gravy grain to stop .Real estate and loan agents were making big money without doing anything but signing up some sucker who believed their crazy talk
about living off houses and real estate never goes down . Borrowers were willing to commit fraud based on the bogus sales pitches from sales people and their own greed . How different was this real estate scheme from the fraud of Bernie Maddog , being the promise of returns that were based on bogus appraisals and greater fools bailing out the last investor ?
No, its not acceptable that Lenders/Wall Street loaned money to people who could not afford the loan ,just so they could make money on the next fool who took the house off their hands .
Biggest crime wave in History that is playing out on a World stage .
‘Bernie Maddog’
I believe the last name is Madoff, as in “Madoff with the money”
“Rick Santelli said the smart people will desert Wall*Street if the bonuses are not paid.”
These are the same smart people that got us into this mess and get rewarded to repeat the same mistakes over and over again.
Desert Wall Street and go where? They’re delusional. I’d like to see these clowns get a taste of the invisible hand and actually work for a living.
“From August to October, the most recent quarter tallied, median home prices in Maine fell roughly 8 percent from the same period last year.”
This quote is for the braindead RE troll from Portland, ME (another clueless transplant from tri-state NY of course).
Watcha got to say now dumbass?
Good evening everyone, just a quick note from the northern suburbs of ATL. I heard on the radio last night about the foreclosure “crisis” hitting the upscale neighborhoods here in the area. Some of the communities mentioned I had heard of, but never visited. The news reporter indicated that $1MM homes were now selling for 500k to 700k.
So my wife and I are contemplating a move here soon so I searched some of the neighborhoods mentioned in the report, and could not believe what people are trying to pass off as a $1MM home these days. Sh*t, if someone paid $500k for some of these houses, I’d say they were paying 2x what they are worth.
Now, I’ve been following this blog for more than 18 months on a regular basis and I have a pretty good grasp of what is happening out there. I thought most people would have now realized the party is over, but apparently some still have not gotten the memo.
WTF? It almsot makes my blood boil when I see people this clueless.
“I strongly feel that people are missing the boat, said Rita Yarnold”
This one reason why I hate sales people.
What if the boat recently hit an iceberg and is currently about to sink? Wouldn’t it be a good thing to miss the boat in that case?
P.S. I love used home sales people — as a target of endless mockery. The stupid platitudes they endlessly repeat, whether the real estate market is booming or crashing, are such a perfect target.
Speaking of sweet deals, how about that black gold? There is so much of it coming in to the country now, we have run out of room to store it. I guess we will have to lower the price to tempt those SUV drivers to burn a little more gasoline. Peak Oil Theory, anyone?
N.Y. Oil Caps Biggest Weekly Drop Since 1991 on Higher Supplies
By Mark Shenk
Dec. 19 (Bloomberg) — Crude oil tumbled, capping the biggest weekly drop since the Persian Gulf War in 1991, as rising stockpiles at Cushing, Oklahoma, leave little room to store supplies for delivery next year.
Supplies at Cushing, where oil that’s traded in New York is stored, rose 21 percent to 27.5 million barrels last week, the highest since May 2007, the Energy Department said on Dec. 17. OPEC’s biggest output cut in more than a decade this week failed to stop a price drop as the recession sapped demand.
“At this stage it’s not what OPEC is doing that moves the market; instead it’s the big builds at Cushing,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York.
Crude oil for January delivery fell $2.35, or 6.5 percent, to $33.87 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the lowest settlement since Feb. 10, 2004. Futures declined 27 percent since Dec. 12, the biggest weekly drop since January 1991. Prices have fallen 77 percent from the record $147.27 a barrel reached on July 11.
When you see law and order falling apart ,and the criminals gain more power than the decent folks ,you know that Justice ,Liberty and your freedom has been taken from you and your fellow man can change your life .
Isn’t it interesting how Bernie Madoff could go undetected for all these
years and the man turned his own self in rather than being detected by the so-called check and balances that Wall Street offers . Do people really think that people will think that this is a isolated case ? Are people going to think that Wall Street is clean when they dared to peddle junk loans on the public and they took any junk that criminal agents passed up the pike ?
Are people going to shrug off 50 % or more losses in retirement savings and the value of their homes and just establish trust in Wall Street again ,especially when the criminals get bailed out and the greedy and fraudulent get rewarded ? Wall Street wants unearned trust just as easy as they wanted unearned profits by their Pozi-schemes. This is another reason why trying to re=spike the punch bowl is not going to work .
Putting one guy like Bernie in jail isn’t going to do it .
A friend of my husban’s, who lost his position as company (division) president, and has been slaving away in a franchise he purchased several years ago, which is finally making money for him with his 80-hour weeks, told my husband this week that he just sunk 100 percent of his IRA, which must be considerable, back into individual stocks, “because they’re so low.” My heart sank. More dollars to be lost and going to Dollar Heaven. At this point, my 457 is entirely in T-bills, which is the safest thing I can find, and some here even warn against those. I am following the advice of Red Baron - nothing into Wall St. until the divident yield is 4%. Gulp for his friend, but when you’ve been the company president for many, many years, I guess nothing can faze you.
“Michael and Cynthia Russell wanted to move to New York City, where they both work. Jobs are more plentiful there than in their town of Poughkeepsie, N.Y. But like millions of Americans today, the couple are stuck.”
Looks like those who “drove to they qualified” are stuck. That 1:45 on the train to Grand Central Station. If you can walk from there, it is merely insane. But what if you lose your job, and the new one is an additional subway ride away?
As for the greed of the investment bankers, for those who live near it, it is bizzare. When everyone you know is making that kind of money, it is easy for those making absurd sums to find themselves to be overpaid.
These folks set off the chain reaction that sent folks like the Russells to Poughkeepsie. Although we did have an increase in development here, there is only so much that can take place is an fully developed area like this — the available land is as far out as Poughkeepsie. So the I-bankers moved to the affluent places, squeezing the affluent to the middle class places, and the middle class to working class places or the exurbs. Now the dominos will fall the other way.
With 2008 coming to a close, the housing market will continue to see their house prices drop. 50-60% is no longer a possibility, it’s a reality these days. Banks will be dumping home .. short sale, foreclosures fast and fierciously to decrease inventory. Prices have to be really good before people will buy. With the current housing climate, you may have paid too much for a house within a month’s time. No one wants to buy a house that will be worth less. Buyers are looking for the best-best bargains and halfing the price will do it, but sellers are not willing.