Bits Bucket For December 24, 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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Hello, anybody out there? (Weird)
Hi QinQueens and Dutch_renter
We were all out early shopping for last minute gift using the money we’ve saved by renting the last few years!
Well yes, lurking is no fun this way
I spoke to a local real estate agent here in MD, and she says that the market will pick up fast as soon as the credit eases by next week and interest rates go to 4.5%. She says that banks will not lower prices any further and that she has been having multiple contracts on houses.
The whole game of keeping up the prices by Govt. seems to be working if what she says is correct.
Merry Christmas.
“…seems to be working…”
Really? They have been threatening to prop up home prices on a permanently high plateau for over a year now. And so far as I am aware, Japanese interest rates of approximately zero percent did nothing to stem a fifteen-year slide in home prices. But I realize it is different here, as we are the U.S.A.
BULLETIN
BENCHMARK 30-YEAR MORTGAGE RATE AT LOWEST LEVEL ON RECORD
ECONOMIC REPORT
U.S. Nov. existing-home sales fall 8.6%
Home prices decline at fastest annual pace on record
By Ruth Mantell, MarketWatch
Last update: 4:14 p.m. EST Dec. 23, 2008
WASHINGTON (MarketWatch) — Resales of U.S. single-family homes and condos fell a surprisingly bad 8.6% in November to a seasonally adjusted annual rate of 4.49 million, the National Association of Realtors reported Tuesday, even as home prices fell at the fastest annual pace on record.
There is no way to sustain a bubble on FULL DOC loans!
4.5% rates on a home that has dropped 30% to 50% is as bad as having a 9.0% rate! The resets continue. Oh, some will have a lower payment. Most are screwed.
Who is out there spending? Which hedge funds will allow withdrawls in March? Cerberus locking down is going to cause a wee bit of panic. *Everone* has heard of Cerberus and Citadel…
Has the credit card bond market opened back up? If not…
And I’m sure when people are unsure of their employment they’ll rush out to spend their hard earned savings on a down payment and put themselves into debt up to their eyeballs… NOT! As you noted, sales are down. The economy is going into survival mode. In other words… a lot of salespeople are about to loose their jobs. Oh… others will too.
Got Popcorn?
Neil
Is “Maryland Mess” a troll, or just gullible? He/she should consider the messenger (”a local real estate agent”). I call BS on the agent, if not on MM.
Dittto, Az. A talking head this morning made a decent point - that taking a 4.5% mortgage on a house that depreciates by 15% during the next 12 months is equivalent to taking out a mortgage at about 20% interest - no one but a fool would do that and the banks aren’t lendoing because that is the real effect of continued prices declines.
Of course, the banks will remain anxious to see you if you’re putting 50% or more down, or if they’re cettain they can sell the loans to the taxpayer, with no recourse, at par. But a bank that had to hold it’s own paper (non-conforming) is going to have a “go away” sign in the window if you don’t have a huge amount to put down in today’s market, IMO.
I’m sure when people are unsure of their employment they’ll rush out to spend their hard earned savings on a down payment and put themselves into debt up to their eyeballs…
Fortunately, my job/income situation has been unsure the last 8 years. It helped prevent me from unlearning my lesson of the last real estate bubble in California. Since I did have solid employment, buying savings bonds, gold bullion, and municipal bonds was my best alternative to save outside my 401k and IRA.
This news in the MSM about rates being lowest on record is absolute crap! Right now we’re at 5% on a no point deal. We slipped a little below that a few days back. I was doing 4.625 to 4.75 for a while there back in the boom years, so it’s definately nothing new.
Clearly this is rah-rah hype meant to stir things up.
“This news in the MSM about rates being lowest on record is absolute crap!”
+1 My parents bought a San Jose home in the 50’s at 3.5% fixed!
No different than the run-up to Iraq. Our news media is pure corporate propaganda.
May they all have a horrible 2009.
What a fool believes he sees.
No wise man has the power to reason away
What seems to be
Is always better than nothing
Michael McDonald of the Doobie Brothers
And also of Steely Dan.
He sang backup on Kid Charlemange, but was he a member? MMcD is often blamed for turning the Doobies from a biker bar band to a fern bar band…
Skunk Baxter is now a major Repub shill for air defense spending.
Oh well…still a damned good guitarist.
White man got soul, or at least imagines he got soul.
In my neighborhood there are so many houses that have been for sale for over a year, and they seem to have joined together to offer them all up as (over-priced) rentals now. She must be the last optimistic used home seller in the DC area.
I’ve been seeing a lot more overpriced rentals in my neck of the woods, too.
Rent of about $1 per square foot is a good rule of thumb in my neighborhood (+/- for location, amenities, etc.), but there’s been a spate of 900 sq. ft. 1 beds listing for $1200 to $1250, and so on — seriously inflated prices for this particular section of the city.
I should note that overpriced, so-called “condo quality” apartments have been listed here for a while — the new rentals I’m talking about are in family-owned two and three flats, finished basements, and coach houses. Homeowners who are feeling the pinch, in other words.
And why, pray tell, were you getting advice from RE agent? The only reason you need to contact one of “them” is to give them your way low-ball offer. And when they open their mouth to give you their two bits, you tell ‘em to shut the F up and submit the offer or you’ll JT them on the spot.
Ummm, the thing about credit in todays market is that YOU NEED A FRIGGIN’ JOB! Rates won’t mean squat moving forward to prop up market. That card has already been played.
Yup.
ECONOMIC REPORT
Unemployment lines longest in 26 years
Initial jobless benefit claims rise 30,000 to 586,000
By Rex Nutting, MarketWatch
Last update: 9:11 a.m. EST Dec. 24, 2008
WASHINGTON (MarketWatch) — The U.S. labor market continued to worsen in recent weeks, with the unemployment lines stretching to the longest in 26 years, the Labor Department reported Wednesday.
First-time applications for state unemployment benefits jumped by 30,000 to a seasonally adjusted 586,000 in the week ending Dec. 20, the government said, based on reports of actual filings at state offices around the nation. That’s the highest since November 1982.
Dead spot on ex-nnvmtgbrkr. I have no reason, desire or necessity to talk to an RealTard. None.
All the talk of “housing resurgence” is no doubt in my mind contrived. Just since this past Monday, I’ve observed a shift in the propaganda.
1) Last night, lyin’ Larry Kudlow and his minions were beating the drum that housing is going to recover rapidly and prices will resume their upward trend.
2) Yesterday I noticed OCWEN has now updated their website to allow the general public to make an offer directly on their website. At first I thought this was the collapse/capitulation I’ve been waiting for but I was wrong. The viewer can review previous offers and counter offers. The offers I saw were within 10% of asking price and were rejected by OCWEN so the delusion continues with dumb people making near asking offers and dumb sellers(a holding company in OCWEN’s case) rejecting offers that far exceed the market value of these dumps.
3) This morning I heard on WBBR that FASB leadership is succumbing to pressure by business interests to suspend mark to market rules. The banks holding all this paper and real estate worth cents on the dollar are all long on RE assets. They’re convinced that somehow, someday they will be made whole on it all.
I’m most disturbed by #3. It is RE/Wall Street corruption in action.
Perhaps are you referring to this?:
http://en.wikipedia.org/wiki/Mark_to_market
Maybe there is a proposal to suspend FAS 157 for a time and/or segment of the markets?
FYI - FASB makes GAAP rules but the SEC is the ultimate standards setting body with regard to publicly traded corps. Normally they just say “you have to follow GAAP” but they could do whatever they want; accept part of gaap, all of gaap, entirely new set of rules, etc.
FASB is supposed to be independent but they can be pressurred politically. It sounds like that’s what ex it talking about. From the stand point of the politicians, if they can pursuade FASB to change GAAP instead of overriding GAAP via the SEC’s decision to not enforce it, then they can blame FASB later on and claim they were just following the guidance of FASB. Which could then of course be used as justification of why the “free market” failed and how standards setting bodies need to be under the perview of the new Homeland Standards Setting Department.
Even a job and low rates won’t be enough to buy a house at these prices. You needed very looooose credit for that, and at the moment, the pendulum has swung to NO credit. At most, credit will ease back to traditional 20% down 3x income none of this FICO nonsense. Which still means nobody can buy.
The jig is up on the whole scam. Unless some huge batch of new, brain dead investors, with buckets of money and boxes of stupid and a penchant for losing their shirts on junk mortgage securities comes calling on Wall St., there is absolutely no way to prop this thing up. Game over.
Yea, Realtwhores are smart! Ain’t gonna happen, no way no how. The gubermint will only screw it up worse, they do not control gravity. But dreamers and dumbasses can & will always dream and wish.
Asking a RE agent about when is the right time to buy a house is like asking a stripper when it is a good time to stuff bills down her G-string. At least that’s what my friends told me, since I have had no personal experience whatsoever in that regard. But you get my drift.
Maryland_Mess —
Are you a bona fide troll? If so, please keep posting here, as we have suffered through a severe shortage of trolls to pillory as of late.
See that’s where my mind was going PB. I could feel my head itching for my tin foil hat.
actually … in MD it is very frustrating. I can vouch for that. prices not much lower, and I hear this comment from people all the time. You see … it’s different here (insert eye roll).
Same ‘ol in Wisconsin - IN the areas we want to purchase!
pffttt.
Leigh
Norfolk, VA is the same. There has been a little downward movement, but I still see people with unimpressive vinyl boxes that they bought for $100K asking $400K. The salaries just aren’t here for that sort of thing. Although evidentially the military does pay pretty well.
That whole DC metro area is filled with gubment workers with steady jobs. Even in a recession the feds keep adding jobs to their bloated payrolls. That is why you see little impact on housing in that area.
DC/MD/NoVA can’t have it both ways. When I moved here I kept hearing about the newly diversified economy which meant that house prices could just go up and up and up because lots of people were getting private sector wages that are so much better than government wages. Now, they say that the prices are going to stay up because of people making government wages who aren’t going to get fired? Um…wanting to have it both ways much? You can’t declare the rise in prices is justified by private sector wages and then say that keeping it there is because of government jobs.
Prices will stay high in MD because they now have an abundance of water.
not all of MD is DC metro. It’s annoying to hear people use the “government jobs” thing for Baltimore. Sure, some people do that hellish commute, but if you live and work in Baltimore, the wages just don’t support these home prices. And they have barely budged.
Yeah, a little bitter
But at least I didn’t buy an overpriced house ….:)
“and I hear this comment from people all the time. You see … it’s different here (insert eye roll).”
Don’t worry, Jen—-that’s what they were saying _everywhere_ until, suddenly, it was abundantly obvoius that it was no longer different there.
You’ll find that pattern holds for MD just as well…
Don’t skeer Maryland off, we need a good troll who wants to jab back. I think we need to sharpen our blades.
Or maybe Maryland forgot to turn on the key
Although I’m agreeing with the general diagnosis of Maryland Mess as (a) a troll or (b) very gulllible, I am also thinking, the “difference” in MD is that Washington DC might hire 2.5 million people to work right there in Washington. At least that would prop up the prices of MD real estate!?
SHHHHHH! Don’t scare off the troll. If we be nice to this one, for awhile, a few more might venture in here. Let’s lure them deeper into the ambush before striking.
“So, you’ve been talking to a realtor? My, that’s interesting, and realtors DO seem to know the local market better than anyone else, so perhaps we’ve turned a corner….” while reaching slowly behind me for my club.
LOL!
Love your humor, Sammy.
The whole game of keeping up the prices by Govt. seems to be working if what she says is correct.
LOL. You are joking right?
The funny thing is, that I think that the rumors of the new rates are much more likely to prop up the wishing prices than the actual existance of the new rates. It could slow down the price drops for a month or two - also kill the number of deals being done as everyone who wants to catch a knife waits to get a better deal on the mortgage.
Possible. Not sure if it is likely, but possible. But none of it will last long - 6 to 8 weeks at most.
Every Realtor I’ve talked to in the last 2 years as said this exact same thing.
But I’m suuuuurrrreeeee it is really true this time
If this is even close to correct these will be the uber knife catchers as the job tsunami picks up speed come 09… Even in DC
Just look at our poster skb, who was able to dodge closing on the house he almost bought right before his job evaporated.
Job loss increasing, excessive inventory, stricter underwriting, prices still above historic norms adjusted for inflation, etc. If there is decreasing demand for a product, the interest rate thereon is much less relevant. I can assure you, if the Realtor didnt just lie to you, the contracts are for people dumping at least 10% lower than last week’s market price. Sounds like more of a spiral to the bottom to me. If she can show you that the increased sales were coming in at higher than last week’s market price, I would be interested in further details. If she is talking about a few year end deals from the banks on foreclosures, like the other poster said, just tell her to STFU and began looking again in 2010 with a different realtor.
“I spoke to a local real estate agent here in MD, and she says that the market will pick up fast as soon . . . .”
I spoke to local real estate agent here and she said prices will continue to fall for at least 2-3 more years and then flatline for 5 more. She said keep my money in relatively risk free investments during the recession and then buy direct without having to pay a real estate agent a commission and save myself tons of cash. I asked her how her business was these days, and she said slow. She said she was thinking about going into a line of business where she relied more on her MBA than her lock-box opening abilities.
I then woke up.
The realtor in my dream resembled the prof. I do not know what any of this means.
BTW Thornberg is still saying prices could turn by 2010 if and ONLY if they are allowed to fall freely.
I still think Thornberg is too optimistic. Even if they were allowed to fall freely through 2010, how do you reconcile a bottom with the reset charts that show option ARM pain through 2011?
My response was attached to KRs comment immediately below. Sorry.
I live in Maryland and need a bigger home for my family. Maybe if the government would guarantee me market price for my existing home or guarantee whatever home I purchase will maintain it’s value. I would then move forward and buy. Until then, we will continue living a cramped up life style. 2 adults and 2 small kids in a 1260 square foot box can get a little tight sometimes.
Yes. I saw his speech last night. He said I can’t tell you exactly when we will bottom from a pure timing perspective, because it depends on how long we drag out and fight the 20%-25% inevitable additional drop. I do know, know, however it wont rebound until the system is flushed. I agree with him.
Sorry, this was in response to AZ_Len immediately above.
In response to this post. I have family in Westminster MD. They say prices are down 15%, with the McMansions taking the biggest hit. MD is still way too expensive. Good luck.
KR, if you are too cramped, move! But move to a _rental_. YThat way you can enjoy the next few years in a larger house that fits your family better, then buy again when prices are more reasonable.
Selling your existing home may seem impossible in this climate, but there _is_ a market-clearing price for it even now—-in other words, if you ask the right price, it will move.
It may seem painful to sell at what appears a low price, but you will be better off in the long run. And you can rent comfortably knowing that your _next_ home is continuing to lose value, far more than what you lost on your current/previous home.
Friend, ex mtg brkr/re, moved away from desert to coast. Said, he wont’ buy when he can Rent a much much nicer home for far less to own. And he won’t take the gamble on the prices continuing to go down.
He was the only one I heard of who would refuse to do a loan for someone if their pay etc wouldn’t cover..that was from 05 on. Got out of the biz.
Guy had ’some’ ethics.
Yep, or you could move to NYC where the money is! In Queens, you could rent a nice little 1350-sq-foot townhouse like mine for 2 adults and 3 kids. A mere $2600 for that. Or you could get the same in Brooklyn for, say, a very reasonable $4000.
How long does Barney Frank and Co. get to keep us OUT of OUR homes?
KR:
Big deal you are cramped, this is where creativity comes into play. Condense your stuff, Metro shelving units put the shelving surrounding the desk amazing how much stuff you can store on a few shelves. Like your TV stereo video games and tons more Think High not Wide
Put your bed on risers and store stuff for next season under the bed…Find Old fashioned 5-6 draw HIGH BOY dressers
Get a smaller kitchen table you only need 4 spaces not the usual 6 or 8 or an old fashion one with leaf extenders when you need them a few times a year
You can fit I know you can do this……But then I live in NYC we have to think like this
Bunk beds, presto, you’ve got extra room for your kids. Don’t bring anything new into the house unless you get rid of an equal amount of stuff, be it clothes, toys or pots & pans.
KR,
I grew up in 1150 sq. ft with a family of seven total.
It was not hell. Later my dad did finish out a basement room and bath, but I was a teen by then.
I’ve had Realtors tell me lots of things lately…. 10 appointments to see the same house? So how many offers are in? Zero? Oh.
Guess they’re avoiding saying any actual offers as that would be readily disprovable. And criminal, if I’m not mistaken.
Ben, was Maryland_Mess a Christmas gift to the HBBers?
Bloody red meat just got thrown into the shark tank.
“Comment by Maryland_Mess
2008-12-24 08:16:02
I spoke to a local real estate agent here in MD, and she says that the market will pick up fast as soon as the credit eases by next week and interest rates go to 4.5%. She says that banks will not lower prices any further and that she has been having multiple contracts on houses.”
Wow, I am glad that is over. Ben Jones, will you be shutting this blog down next week, or will you hold on until the after the Super Bowl? Kudos to the banks for not giving the houses away.
Why would anyone buy now, even with 4.5 pct mortgage money, if they reasonably expected that prices would continue to fall through 2010? I am starting to wonder if Jas has a point about the “born and bred dopes” concept.
Wall Street Journal
* REAL ESTATE
* DECEMBER 24, 2008
Recession, Tight Credit Compound Housing Woes
Data Show Sales of New and Existing Homes Plunge, as Do Prices; Coming Foreclosures Likely to Add to Inventory Overhang
By SUDEEP REDDY
A deepening recession and tight credit conditions are compounding problems in the housing market, suggesting that declines in home prices may continue well into 2009.
Sales of existing homes tumbled 8.6% in November from the prior month to an annual pace of 4.49 million units, the National Association of Realtors said. The figure reflects contract closings, which lag behind sales activity, and as a result capture the credit-market turmoil that hit the economy starting in mid-September.
New-home sales declined 2.9% to an annual rate of 407,000 units, the Commerce Department said, continuing a nearly three-year decline.
The housing sector has been hit hard throughout the year by an oversupply of homes that gradually forced high prices to fall. Tumbling prices, in turn, hurt the overall economy by battering financial institutions, reducing the wealth of homeowners and prompting job cuts in the housing sector.
Now, the worsening recession is further damaging the housing market. Consumers who lose their jobs are adding to homeowner defaults, pushing forecasts for when the sector will hit bottom into the second half of 2009 or later. Until the housing market turns around, the overall economy is unlikely to grow much. Economists call this cycle an adverse feedback loop.
“What will be a significant number of foreclosures over coming quarters will only add to the inventory overhang and keep downward pressure on house prices,” said Richard Moody, chief economist at real-estate firm Mission Residential, which expects prices to stop falling in 2010.
Mission Residential, which expects prices to stop falling in
20102012.At least they were not predicting a 2009 recovery that will not happen. But there is no way we hit bottom that quickly. Oh, I plan to buy in 2010… but that’s my own insanity.
Got Popcorn?
Neil
Not many are going to be able to get to that 4.5%, if and when it becomes available. Underwriting is brutal! I’ve been pre-qualing some deals for some curious fence-sitters, and guess what?……..NO SOUP FOR YOU!!!
4.5 pct = Uncle Sam’s “teaser rate”
How does today’s “brutal” compare with “normal” from, say ten years ago? And if you believe that prices are within, say 5% of “bottom” today’s low interest rates and large (11 months of) supply might indeed make today a good time to buy. Of course those of us who anticipate significant continued declines…
Look at it this way, interest rates are very close to what they were in mid 2003. Inventories are higher, the illusion that RE prices only go up has been shattered, and prices are still higher than they were in 2003. I can’t see how prices can do anything but fall from here for at least another year.
interest rates are very close to what they were in mid 2003 ??
So what has changed ?? Why is it not Boom Times again ??
Like ex.m said above…Underwriting is Brutal..Add to that job loses and the deleveraging and there you have it…
I’m not saying that underwriting isn’t more difficult. But the REASON that the illusion that RE always goes up, or at least sideways is GONE. Neither buyers, banks, or bondholders believes that anymore. Buyers don’t feel pressured to “buy now or be priced out forever.” Banks aren’t willing to make loans that only make sense if appreciation will enable buyers to refi before the real, ammortizing payments kick in. And bondholders aren’t willing to pay prices for RMBSs based on the idea that they’re almost as safe as treasuries.
I’m a veteran and plan on using my VA loan for a second purchase maybe in 09. I haven’t looked into this much yet but do you know if this rate will be available for VA loans?
Vet here too!
I will keep my fingers crossed for ya.
Leigh
“..VA loan for a second purchase..”
I though VA loans were for primary residence only.
The VA program only bothered me slightly before (as I believe all people deserve the same opportunities because I don’t know anyone who hasn’t gone through crap in their lives - and who is the government to say a Vet automatically deserves more than a brain tumor survivor). However, if it were being used to fund second home purchases, I would strongly support abolishing the whole program altogether for complete mismanagement.
Where I live, the military housing allowances are rumored to be what makes the rents so high. I have no problem with anyone getting paid, but if the gov’t is the only source for a livable wage and stable retirement then we’ve got problems.
I agree housing and tax breaks for certain classes of people is the worst form of discrimination. If the government wants to give a check to them that’s one thing, but cutting them deals on necessities necessarily screws eveyone else. Is screwing others a legitimate government purpose? Do they not understand how manipulating the market negatively effects those falling outside the arbitrary classifications, or do they just not care? Either way its a disgrace.
My bad - didn’t read the second home part. (Coffee deprived).
No, VA does NOT finance second homes, unless that changed within the last few months (I doubt it).
I’ll check.
Leigh
Relax Natalie. Nobody’s going to get over on you. I meant to say a second time of using the benefit. My mistake. I’ll bet you’re the type to vote against school bonds once your kids have graduated aren’t ya?
I have no problem with anyone getting paid, but if the gov’t is the only source for a livable wage and stable retirement then we’ve got problems.
We’ve got problems.
The government may not be the only source for a livable wage, but for a STABLE (as in, not going to get laid off every time there’s a down quarter) wage, it is. And more importantly, for health care. (As for retirement, I don’t think anybody has a stable retirement anymore. )
Of course, whenever people talk about government employees, someone always wails about how they have too many benefits, job security, days off, etc. I say, instead of complaining about how good government employees have it, people should be demanding the same treatment in private-sector jobs.
What are the terms? School bonds in most cases are only a form of tax-exempt financing, not a hand-out, and education for all does serve a public purpose. I would also want to know why the money was needed of course. Also, why would whether my kids are in school or not be relevant to my stance on education. If you read the post, I am against, rather than for, classification discrimination. Whether I am a member of a group is not really relevant as to whether I support it. Personal attacts with no basis for such attacks says much more about the attacker than anyone else. Next time you want to pick a fight, try to do so on what I say, rather than a misinterpretation of my core beliefs.
Lane - the number of people that feel they are more important than others and deserve special treatment is truely astounding to me. In addition, why is it so wrong to believe you should support those you think are deserving directly through cash payment rather than indirect market manipulation that has unattended consquences? I realize that attacks are more based on lack of the ability to give a reasoned response, but if you are in over your head, sometimes its best to remain silent.
BS. The govt can keep dunning the taxpayers for more $$$. Private businesses can’t do that.
…well, not in theory anyway…. LOL
people should be demanding the same treatment in private-sector jobs.
Yes get rid of the Prevailing Wage. It is so demeaning to the private sector.
Natalie you made with me laugh with the over my head part. No I don`t have a problem with you not agreeing with the VA thing. I have a problem with you wording. As a former military flight crew member that has friends in Iraq and my cousin that is a brain tumor surviver so far, I don`t like your comps. If you ever want to compare financials let get in touch.
Lane
I say, instead of complaining about how good government employees have it, people should be demanding the same treatment in private-sector jobs.
Just wait for the Big 3 to fail, unions are busted and then the other corps/biz that offer healthcare/vacations/decent pay, pensions/ will go poof. No corps will feel the need to offer anything but PT work/ no benefits/no health care, nothing but minimum wages. Mark my words. The only thing that gets us all a decent wage is that corps almost have to compete with union jobs Otherwise..then we will hear real complaining and people in droves trying to get a gov job.
No houses bought on minimum wages.
I want the FICO situation blown up. From what I have read, they differ too much to make sense and it is an insiders clutch.
Of course, whenever people talk about government employees, someone always wails about how they have too many benefits, job security, days off, etc. I say, instead of complaining about how good government employees have it, people should be demanding the same treatment in private-sector jobs.
————————–
Exactly right, Bub!!!
And second what dd said just above.
Private sector employees wrongly think that union workers are their enemies. Couldn’t be more wrong!!! Employers who hire only union workers are your private-sector employer’s competition!!! Whether your belong to a union or not, you benefit because your employer has to offer competitive wages and benefits in order to attract qualified employees.
This anti-union way of thinking is a result of the brainwashing of the sheeple by those in power — who want to remain in power and attract more wealth to them and their well-connected associates.
Anyone who actually works for a living should be pro-union.
“Fortune” magazine predicts 25% drop in house prices in Los Angeles and some other areas of California in 2009, which means that we can expect more foreclosures by people who bought houses in first half of 2008…
We sold just as the fannie stuff was hitting the fan this summer, whew, bought an older house for 35% less, and now have a PITI payment at about the rent level for a nicer 2 bedroom apt.
It was a good move, but I am very happy not to have 2 house payments anymore. Buying the new one before the previous house sold was a white knuckle month.
Another guy who joined the new company a month after I did made his move a month too late. His house in Ohio still hasn’t sold. Of course, he has a price he has to meet to afford the new house finishing construction. I hope he has better luck with that.
Wall Street Journal
* HOUSE TALK
* DECEMBER 23, 2008
Tips for Selling a Home Out of Season
Our columnist advises a reader on things to do to make a listing more appealing in the winter
By JUNE FLETCHER
Q: I live in Bethesda, Md. Most people around here put their homes on the market in the spring, when everything is in bloom. But I need to sell my home now. What can I do to make it more marketable?
A: Although winter is the most challenging time to put your house on the market, you can turn the season to your advantage if you emphasize the qualities that make your house more inviting than the competition.
[Selling a home in winter House Talk] Associated Press
While a log cabin in Alaska may be cozy, many homes aren’t as appealing to buyers during the winter months.
Here are some tips:
…
Professor Bear’s Tips for Selling a Home in Any Season:
1) LOWER THE LIST PRICE TO A LEVEL WHERE A BUYER IS WILLING TO MAKE YOU AN OFFER.
2) DON’T WASTE A NICKEL FIXING UP THE HOME, AS YOU WILL ONLY RECOVER FOUR CENTS WORTH IN THE SALE PRICE OF EVERY NICKEL SPENT GETTING IT READY TO SELL, PLUS YOU WILL WASTE VALUABLE TIME WHILE THE MARKET CONTINUES TO TREND DOWN.
3) SELL NOW OR GET PRICED IN FOREVER.
I agree with the “not spending a nickel,” unless it’s to make the place habitable. The last thing I want to do is live with an HGTV kitchen.
Agree. We’re looking at a house in our n’hood that is very outdated…yellow Formica countertops, etc.
I LOVE it!!!
After so many years of watching wannabe Trumps and their “flips” I refuse to buy or pay for someone else’s tastes.
Isn’t the whole benefit of ownership being able to customize things to your own liking?
1.) set the price low.
2.) lower the price.
3.) lower the price more.
SELL NOW OR GET PRICED IN FOREVER.
Brilliant!
Cut your price by 5% every two weeks, and make sure it is shown in realtor dot com (there are fixed-fee ways to do that). Scoff or not, most buyers search realtor.com first and most frequently. It is a shame that the many FSBO sites don’t agree to share a common Website, but until they do there is only one place I know of to get the most information on what is currently for sale, without actually dealing with an agent at the time.
Post photos. No photos, no interest. Plenty of other inventory for sale and you must be hiding something.
like match dot com.
LOL
blue, any good dates?
yes, but I’m still renting month to month.
So what’s the gubermint going to do about this, ‘fix’ it? These folks can’t heloc any more.
More in middle class using payday lenders…
But this is where W. Allan Jones founded Check Into Cash, the granddaddy of modern payday lenders, which cater to millions of financially strapped working people with short-term loans — at annualized interest rates of 459%.
“It’s the craziest business,” said Jones, 55, a genial homegrown tycoon who founded his privately held company in 1993. “Consumers love us, but consumer groups hate us.”
In years past, a worker might have asked his employer for an advance on his paycheck. Now, with a driver’s license, a pay stub and a checking account, he can walk into a typical payday loan store, postdate a check for $300 and stroll out with $255 in cash after a $45 fee.
“… after a $45 fee.”
How long does it take the average wage earner to clear $45 after taxes? How many hours of pay does that $45 represent?
Yep, Prof, Jas is right; Born and bred dopes.
LOL - please list all of the other countries that do not have the same exact thing going on as I can’t think of any.
“Consumers love us, but consumer groups hate us.”
Sounds like the argument of a drug dealer or a child abuser. These should be illegal or at least controlled in how much they can charge. They are evil.
Businessweek did coverage on the increased number of businesses who are designed to make a profit from poverty. I would love to see an initiative to teach a course on finances in high school that teaches students basic home economy, as well as how to protect themselved from schemes like this.
Having attended school in very wealthy and in very poor areas, I was really struck by how much poor kids flat-out don’t know about money. Middle-class and wealthy children pick up information from their families without even knowing it, and I always thought that was quite a disadvantage for the poor kids.
MAY 21, 2007
COVER STORY
By Brian Grow & Keith Epstein
The Poverty Business
Inside U.S. companies’ audacious drive to extract more profits from the nation’s working poor
http://www.businessweek.com/magazine/content/07_21/b4035001.htm?chan=search
My ex-sister-in-law helped control her trash-class spending habits by taking out only 20$ at a time from the cash machine…
…with a $2 fee for each transaction.
*shiver*
I have only once in the past ten years accepted an ATM charge and that’s because there was not a single one of my Banks within an efficient distance. How the hell can someone Pay $ 45 to get their check, what, 2 days faster?
They often don’t have a choice. Medical. Car breakdown. Death in the family. Emergency home repairs that fall under the deductible.
Contrary to “official” reports, wages for J6P have been stagnate or falling for the last 30 years… which coincidentally was when offshoring gained traction. Not to mention the earthquake like stability of the job market in general. Many, many people don’t get to stay with a company for 10+ years because the company itself doesn’t last that long.
It’s very easy to find yourself in a bad position no matter how smart you think you are. Ask the rubes who “banked” with Madoff.
Senator Lautenberg, D of NJ, lost at least $1 million. We know he’s a dummie, right?
Remember the economists who said San Diego’s economy would be buoyed up by tourism? So much for another failed theory.
San Diego Union Tribune
ConVis lowers forecast for 2009
Hotel occupancy fell 18.8% in November
By Penni Crabtree, staff writer
2:00 a.m. December 24, 2008
In boxing terms, San Diego tourism is headed next year for one heck of a shiner.
What’s uncertain is whether it will dodge the bloodied nose and broken hand to go with it, according to some tourism experts.
On the heels of jaw-dropping November declines in hotel occupancy, rooms sold and room revenue, local tourism officials yesterday significantly revised downward their 2009 forecast for visitor and hotel occupancy rates.
San Diego ranked as the worst or second-to-worst declining market among the top 25 U.S. hotel markets in several key categories for November. Hotel occupancy in San Diego last month dropped by 18.8 percent – to 57.9 percent compared with 71.3 percent in November 2007, according to Smith Travel Research, a leading firm that tracks the hotel industry.
SD’s economy is in big trouble. Tourism by itself is not THAT big of a loss, just a bunch of low end service jobs and retail. However the finance jobs and tech jobs are a real blow and once they are gone, prob wont come back. Personally, I hope SD turns back into a sleepy beach town.
well there is always the male gay porn jobs
Along the SD coast, folks seem to still be spending like it’s 2005. With HELOC money drying up, where does all the money come from? Are these high spending families on trust funds, or are they narco traffickers? Without real estate and mortgage broker bubble income, show me the money.
These people were all lying. No way to sugar coat it.
Stimulus for everybody!
Wall Street Journal
* DECEMBER 24, 2008
Retailers Want In on Stimulus Plan
By ANN ZIMMERMAN
The country’s largest retail trade association asked President-elect Barack Obama Tuesday to add a series of sales tax-exempt shopping days to a coming economic stimulus package in an effort to revive consumer confidence and spur spending.
The National Retail Federation called for three periods of sales tax-free shopping that would last 10 days each in March, July and October 2009. The trade group estimates that it would save consumers about $20 billion, or $175 per family.
Sales taxes are local, right? Last I checked, there are no national sales taxes. So, how does the federal government give sales tax free days????
If I were Obama, I’d say, SURE… We’ll lower the non-existant sales tax to 0% for those days…. no problem.
State and local…that is stupid. What on earth are they thinking?
Sheeeeeesh…
Darrell, I believe there are Federal taxes on liquor, beer, cigarettes, and gasoline.
are the stupid or what?
Sales on other 2 months and 20 days will be much below normal as every one would wait for their purchases to get done during these 10 days
Unless Barack also mandates that every one should buy on other 2month and 20 days, it is not going to work
LA Times
Obama economic team tries to allay worries about stimulus plan
Economic stimulus team
Melissa Golden / Bloomberg News
Vice President-elect Joe Biden, with economic advisor Lawrence Summers, left, and incoming Domestic Policy Council director Melody Barnes, says the new economic stimulus plan won’t be “politics as usual.”
Vice President-elect Biden meets with top advisors to discuss the proposal that could cost as much as $775 billion over two years. He says there will be ‘no earmarks’ in the recovery plan.
By Peter Nicholas
December 24, 2008
Reporting from Washington — Amid a drumbeat of grim economic reports, President-elect Barack Obama’s top economic advisors met Tuesday to refine plans for a massive stimulus proposal, promising the money would not go toward dubious pork-barrel projects.
Vice President-elect Joe Biden met with seven advisors for an hour here as Obama vacationed in Hawaii. With the incoming administration acknowledging the stimulus plan could cost as much as $775 billion over two years, Biden seemed intent on reassuring Americans the money would not be wasted.
“Biden seemed intent on reassuring Americans the money would not be wasted”.
Right Joe, we trust you and your cohorts to do the ‘right’ thing. We know it’s in our best interest and for the children. So what happened did comb over Joe have a revelation? Nah, they’ll screw us over again and again, and we’ll keep voting them in to do it. People are smart.
I take offense to your comments. Joe Biden has served this nation honorably for decades. What have you done for our country? Your use of personal attacks only underscores your inability to say anything of substance. If you want to scream about people screwing us over, look in the mirror and ask yourself who you voted for in 2000, 2004 and 2008.
Save your partisan BS for the right wing blogs, because outside that arena your party has zero credibility.
Merry Christmas!
Dumbocrap Joe can do no wrong because he’s a dumbocrap in other words.
“… Biden seemed intent on reassuring Americans the money would not be wasted.”
Lol. This guy should do stand-up.
“With the incoming administration acknowledging the stimulus plan could cost as much as $775 billion over two years, Biden seemed intent on reassuring Americans the money would not be wasted.”
It would NEVER be wasted!
It will be carefully utilized to pay back political favors, bribe every committee member, judge, CONgresscritter and Senator that can be found, and fully line the pockets of the conspirators, the guilty, and the connected.
Given that the American taxpayers are viewed as just so many sheep to be fleeced, Biden can speak with confidence.
Merry Christmas!
It seems that we are set to waste a golden opportunity.
Real infrastructure, nuclear power plants, wind turbines, solar arrays needed repair of bridges….
Shame really.
Hope that the administration does the right things.
Yes, I know, as PB has pointed out to me before, “hope” is not a plan.
A friend of mine recently purchased a wind turbine and a tower.
He got the turbine from another friend and the tower (60′ ) from a sold radio station. To date he spent 3500 for the turbine, 1,000 for the tower, 800 to take it down. He applied for a permit…even though the city of Eagle River, Wisconsin has no zoning ordinances for a wind turbine …back in June. The city also owns its own utility…The city in its infinite wisdom delayed his application and now had a planning meeting to create zoning regs for turbines. The regs were tabled at their last metting. No permit, no can do.
Now, if a qulafied individual cant put up a wind turbine on a 30 acres of private land, how in the hell can Obama, or the rest of this country try and go green. One of the comments at the planning meeting was, ” if we let this guy do it, everyone will want to put one up. Jackasses.
unf*ck*ng real!
Jackasses are an insult to that burden animal.
May they richly burn in the hell they probably so adamantly believe in.
If they had no zoning ordinances for turbines, couldn’t he have just put it up without making an application? Applications are for things that fall under existing zoning, or for variances for things that violate existing zoning laws. Sounds like his turbine did neither.
If he had just put it up, and they subsequently passed zoning ordinances outlawing turbines, it seems like he could argue for being grandfathered—-otherwise, it would be an ex-post-facto law, specifically restricted by the constitution.
I’m not a lawyer; take with a grain of salt.
“the new economic stimulus plan won’t be “politics as usual.””
Lie.
“He says there will be ‘no earmarks’ in the recovery plan.”
Lie.
“Biden seemed intent on reassuring Americans the money would not be wasted.”
Lie.
And not even in power yet.
“And not even in power yet.”
Bush & Co appear to have already ceded considerable power to Obama & Co.
“Bush & Co appear to have already ceded considerable power to Obama & Co.”
Do you have anything to back that up?
Actually, on second thought, never mind. It doesn’t matter. I had been thinking that sharing-power isn’t something I associate with the Bush-Cheney administration, and I was also thinking that administrations are really responsible for what happens under them, but…then I remembered that being locked in a gridlock of presidential loathing is a national pastime, and I shouldn’t interfere.
I am going to eat pumpkin pie and watch the original Charlie Brown Christmas special while baking cheese biscuits for Christmas dinner and look at the gorgeous snow outside.
I don’t think so. Bush and Cheney will not give up their power until it’s official. Come on PB look at the personalities you were talking about.
Are these really lies, Blano? Do you have any proof that Joe Biden does not believe his words? It seems to me that he has served this nation honorably the last 3 decades. What have you done for the country?
BTW, where the hell were you while the treasury was being robbed the last 8 years by the GOP? I don’t remember one word out of your mouth about that stuff. So now you speak up? I suspect you had a lot to say about Clinton too. Bush, Cheney…not so much.
You partisans crack me up. At least some of us have a little objectivity. Not many, but some. I will criticize either party when I think they are being dishonest, but why would anyone swear an allegiance to a party above their own country?
Sad. Very very sad.
Also you Messiah lovers crack us up.
There you go again. Why don’t you go out and buy something with all your money and show us how trickle down works. FYI, no one but Bush apologists has ever attributed Obama any higher powers.
Get a grip dude. I swear allegiance to no party.
“I will criticize either party when I think they are being dishonest,”
That’s what I did, but you have a problem because it’s about the Dems today. Hypocrisy is unbecoming of you.
You’d have to have your head up your a*s to not note my rants about both sides of the aisle the last several months.
Your “some of us have a little objectivity” in the middle of that rant was quite laughable.
Merry Christmas, unless you’re offended by that partisanship too.
How much bailout money went directly into bonuses for bankers who lost billions of buckaroos? Inquiring minds want to know.
Banks straining against concept of accountability
By LOREN STEFFY Copyright 2008 Houston Chronicle
Dec. 23, 2008, 10:19PM
Merrill Lynch Chairman and CEO John Thain.
We know where some of the money went.
Even though banks that have received billions in bailout funds from the government have refused to reveal how they’re spending the money, we can track some of it.
Earlier this week the Associated Press scoured financial fillings for the bailout recipients and found that $1.6 billion went for salaries, bonuses and other perks for top executives last year, even as many of the banks were heading for crisis.
That money would have covered the amount the government gave to 53 of the more than 100 banks that have applied for the bailout, the AP found.
Instead, our bailout cash went to fill in the hole created by the banks’ willingness to reward failure. Keep in mind that by the end of last year, banks were racking up billions in losses.
Even worse, most of the banks that received government money feel they owe taxpayers no accountability for how it was spent. In fact, they act as if such an explanation isn’t even possible. Banks contacted by the AP said they weren’t tracking it or that they manage capital “in aggregate.”
One, JP Morgan Chase, simply said it was declining to disclose the information to the public.
This is one sick country.
You don’t know the half of it.
The list is loonnnggg, although the current mess is a good example.
Sickening, just absolutely sickening.
Congress moves to crack down on bailout recipients
By LAURIE KELLMAN – 4 hours ago
WASHINGTON (AP) — Lawmakers are turning up the heat on banks that have received money from the Treasury Department’s $700 billion rescue fund after the Associated Press reported that they wouldn’t say how they are using the money.
Sens. Dianne Feinstein, D-Calif., and Olympia Snowe, R-Maine, said Tuesday that they will propose legislation next month to force companies that receive money from the fund to report how they have spent it.
The legislation would also prohibit them from spending the taxpayer dollars on lobbying or political contributions. It would also apply to some recipients of the Federal Reserve’s emergency lending programs.
The legislation was introduced earlier this year, but the Senate did not take it up. The sponsors have long said they plan to pursue it when the 111th Congress convenes Jan. 6.
“At present, we don’t know whether these companies are using these funds to fly on private jets, attend lavish conferences or lobby Congress,” Feinstein said in a statement.
Aladinsane — Wherever you are, this one’s for you.
The Real Price of Gold
By Brook Larmer
Photograph by Randy Olson
Like many of his Inca ancestors, Juan Apaza is possessed by gold. Descending into an icy tunnel 17,000 feet up in the Peruvian Andes, the 44-year-old miner stuffs a wad of coca leaves into his mouth to brace himself for the inevitable hunger and fatigue. For 30 days each month Apaza toils, without pay, deep inside this mine dug down under a glacier above the world’s highest town, La Rinconada. For 30 days he faces the dangers that have killed many of his fellow miners—explosives, toxic gases, tunnel collapses—to extract the gold that the world demands. Apaza does all this, without pay, so that he can make it to today, the 31st day, when he and his fellow miners are given a single shift, four hours or maybe a little more, to haul out and keep as much rock as their weary shoulders can bear. Under the ancient lottery system that still prevails in the high Andes, known as the cachorreo, this is what passes for a paycheck: a sack of rocks that may contain a small fortune in gold or, far more often, very little at all.
Apaza is still waiting for a stroke of luck. “Maybe today will be the big one,” he says, flashing a smile that reveals a single gold tooth.
“But it’s never been clear if we have gold - or gold has us.”
(Maybe just one more shovelfull will reveal the mother lode. Just one more shovelful. Just one more …)
If you guys scared off Alad…
I will be so sad.
Someone ask Lad to come back.
Lad scared himself off.
That’s sad.
Prices fall like a rock in the Fort Myers area. Down, get this, 53 PERCENT from Nov. 2007. That has to be a record, or close to it. To go with that, sales of existing homes up 64 PERCENT since last year. Median is now around $108,000. Really hope this drops under $100,000 soon. That will be a stunning fall from around $322,000 at the bubble’s height.
http://www.news-press.com/article/20081224/RE/81224004/1075
For all you buried in snow, let me just say Enjoy It!! Lame-o Philly is only getting rain and ice. I’m viewing facebook photos from friends in Chicago (backyards piling up with snow) and Seattle (skiing down residential streets) with complete envy! The winter storm of 2008 and I am missing it all.
Oh, and, on a blog-related note, MSM=complete capitulation? If so, I better start seeing home prices in my area start dropping some more. `Cause they budged a little a few months ago, but are now once again frozen.
http://www.msnbc.msn.com/id/28367333/ (Housing market’s woes could get even worse).
Nice post…Check out the employment interactive state by state…
S.C. sitting at 8% unemployed now, forecast to hit 14/15% next year, yet all the realtwhores are running around saying house prices will hold firm in our state.
HELOC’s are damn near dead so many people will not longer be able to ‘afford’ the life style they have come accustomed to. This sucker is going down.
Somebody loses their job and there’s going to be much pain when they go from three incomes (Molly and Me and the HELOC makes three) to one.
This scam will never approach the Madoff scam in its size and scope, but it’s a creative scam nonetheless.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/24/MNIR14PSQF.DTL&type=green
Wow. Making money off of guilt. Gotta love that.
Guilt? Evangelists have been doing it for ages!
HALLELUJAH and AMEN!
Merry Christmas! May you get a gift receipt with your presents
http://www.msnbc.msn.com/id/28376165/ (Latest hurdle for ailing retailers? Shoplifting. Survey of major chains reveals 84 percent increase since recession began.)
Your statement is misleading. There wasn’t actually a reported 84% increase in shoplifting, just that 84% of retailers reported some increase.
Nonetheless - increase in crime is something we’ve all been expecting as a part of this depression. It will continue to get worse for a really, really long time.
Ben,
Merry Christmas, safe driving, have fun in Viva Las Vegas baby.
So, house behind me was for sale, then the for sale sign went away and construction began to remodel the kitchen. As far as I know, this is not a flip. It looks like people actually bought it, remodeled the kitchen and moved in… or perhaps rented it out. Waited a couple weeks for the sale price to be posted.
$130K.
And still, Zillow says my house is worth $180K.
Okay, I understand that they ignore sales that are way off expectation, assuming those transactions are no arm’s length. However, there have been 3 “ignored” sales in the last 3 months, and only one counted in the last 6 months.
Zillow is not officially a JOKE for my house. It had been doing well tracking the decline, but seems to have lost its way in the last 6 months of the bottom really falling out in my ‘hood.
I use Zillow as a data point (1 of 3) to track the former residence we sold. It showed a $20K increase in 30 days in So Ca. What a load of BS! I use a calendar to record 3 homes I follow, recoding the data every week or 2 .
“recoding” s/b”recording”
Zillow is a joke by me.
Saw one recently looked like this:
Currently For Sale: 440K
Zestimate: Say 589K.
Last Sold: 2 Yeasr ago: 360K*
Last Sold: 10 Years ago: 150K*
*These sales have been excluded from the Zestimate.
I can’t remember the exact #s but I thought it was hilarious. How can a home have sold two times, and both prices are ignored from the zestimate…
OKaaaay, first this -
China to experiment with trade settlement in yuan
snip-
BEIJING, Dec 24 (Reuters) - China on Wednesday took a baby step on the road to making the yuan an international currency when it promised to allow its use in trade between a few provinces and neighbouring states.
—
At present Chinese and foreign firms doing business together denominate the vast majority of their trade in dollars and the rest in other major currencies such as the euro.
—
Beijing has been using Hong Kong as a laboratory for globalising the yuan, letting Chinese banks issue yuan bonds in the territory as part of the experiment.
China’s cabinet also announced that it would increase rebates on value-added tax paid by exporters of some high-tech machinery and electronic devices, the latest such move as the government seeks to cushion firms from the global slowdown.
—
Full article
http://www.guardian.co.uk/business/feedarticle/8168236
If this post gets through, I’ll post another under it.
Leigh
Merry Christmas and Happy New Year.
For those that observe other festivities, happy happy joy joy!
Best,
Leigh
and now this -
U.S. debt approaches insolvency; Chinese currency reserves at risk
snips
In the early months of next year, when the official data are published, the United States will run a serious risk of insolvency. This would involve, in the first place, a valuation crisis for the dollar. After this, the United States could face a social crisis like that in Argentina in 2001. A crisis in U.S. public debt would likely have a severe impact on the Asian countries that are the main exporters to the United States, China first among them. Chinese monetary authorities, thanks to a steeply undervalued artificial exchange rate, by about 55%, have limited imports (including food) and have achieved an export surplus. This has allowed them to accumulate a large stockpile of dollar reserves. In a currency crisis, China risks losing much of the value of its accumulated currency reserves. At the same time, pressure on imports (wheat, other grains, and meat) have led to inflation in the prices of food, the most important expenditure for more than 900 million Chinese. This is nothing more than a small confirmation of the recent statements of the pope, in his message for the World Day for Peace, where the pontiff calls the current financial system and its methods “based upon very short-term thinking,” without depth and breadth (nos. 10-12), preoccupied with creating wealth from nothing and leading the planet to its current disaster.
Full Article
http://www.asianews.it/index.php?l=en&art=14054
Leigh
‘…where the pontiff calls the current financial system and its methods “based upon very short-term thinking,” without depth and breadth (nos. 10-12), preoccupied with creating wealth from nothing and leading the planet to its current disaster.’
Will bankers be able to grasp the Pontiff’s economics lesson?
Merry Christmas and Happy New Year to you as well.
I LOVE REN & STIMPY!!!!!!!!!!!!
Merry Christmas Ben and everyone, and may you atheists and non-Christians have a great holiday season as well. And may 2009 be a great year and see you all fat and sassy (well, figuratively speaking on the fat part…).
Thank you Lost.
If I can just keep my job in 2009 I will be golden. No doubt 2009 will be the biggest pecentage drops. Even for those that saw it coming, there is nothing we can do if our clients are facing bankruptcy. If only I had my health I wouldn’t worry so much. I pray for national healthcare.
I hope everyone enjoys their Holiday and ends up on top, even those that are offended by my anti-discrimination stance.
“I hope everyone enjoys their Holiday and ends up on top”…..
Same for you Natalie, and hopefully a year from now re: your job you’ll be on here going “phew, dodged that one!!!”
Natalie,
My original post hasn’t shown up yet, but I wanted to say I hope your holidays are good too and you still have the job at this time next year.
Oh, there it is.
CNN on in the cafeteria today basically had this theme.
More “worst ever” indexes of worrying about the “bad economy” == “the possibility of losing MY job”.
I can relate. And I even work for a government contractor. I can’t imagine the Christmas arguments going on in families of car dealership mechanics, or realtors, or …
Lost in Utah,
Merry Christmas gal. When do you start school? Are your pet buddies coming with you?
Mid January, and yup, if I don’t go, they don’t go…wait, you know what I mean…
Merry Christmas eve out in San Fran, home of many good things, including that old decrepit second hand store where I bought (for $5) this big flapper mouton sheepskin coat from the 20s that I’m wearing right now, warm and toasty, watching my neighbor’s dog chasing deer out of the yard (it’s a Lab, doesn’t really chase, just sorta kinda trots around and the deer look only slightly annoyed).
And for Christmas, I’m getting…a book on how to know if you’re really cool in fashion or not (it already arrived, and the answer is somewhat vague, need to read more).
Pretty quiet around here this morning. I hope no HBBers are stuck in an airport or on an icy/snow covered road today.
I started lurking here in late summer and eventually could not resist commenting even though I usually have nothing useful to say. Wish I had begun reading the Bits Bucket earlier, it might have spared me some of the market meltdown pain. For a long time I’ve realized the stock market runs on rumor, emotion and vapor but have stayed in it anyway. On the other hand, I probably wouldn’t have listened to the warnings to sell everything.
Merry Christmas and happy belated Winter Solstice. It always makes me feel better when the daylight hours begin increasing again. Thanks to all here for your words of wisdom, and humor.
“For a long timne I’ve realized the stock market runs on rumor, emotion and vapor but I have stayed in it anyway.”
Ultimately it runs on money, which is now in short supply.
Where there’s a few hundred pointed jabs, there must be fire.
Anyone else getting bombarded by fundraising letters from their alma maters? I’ve received a couple from my undergraduate school lately.
The most recent one had some hard numbers mixed in with the platitudes and wheedling — University of Virginia will have its state funding cut by 7 percent, or $10.6 million, in 2009. After 10 years of 12 percent annual gains, the university’s endowment lost 20 percent of its value in a few months this year, dropping from $5.1 billion on June 30th to $4.2 billion on October 31st.
Just the beginning.
My alma mater did not send a calendar with memory evoking pictures and emotionally wrenching quotes by current students with the traditional November appeal. I think I miss it a little.
By the way, 20% decline after 10 years of 12% increase sounds like they still have quite a bit of cash around, doesn’t it? About two and a half times what they had 10 years ago, if I’m using the calculator correctly.
By the way, 20% decline after 10 years of 12% increase sounds like they still have quite a bit of cash around, doesn’t it?
Yeah, I imagine they’re doing better than many schools, public or private.
But a 20 percent loss in the endowment in a few months must be fairly disheartening. The state will likely continue trimming corners in higher ed funding, so no relief in sight there. (The university also mentioned a desire to avoid any layoffs.)
In general, it was informative to see some specific numbers, which were largely absent from the fundraising pitches during the go-go years — except for the lofty endowment goals, of course.
At any rate, I’m curious about the relative health of colleges and universities, and their own strategies for dealing with the credit crunch and economic malaise.
yes
Yes, and for the first time, when I said I was unable to give at this time, they said thank you, shut up, and I didn’t hear from them again.
Shoplifting skyrockets as result of bad economy:
By Ylan Q. Mui
Washington Post Staff Writer
Wednesday, December 24, 2008; D01
Retailers have blamed the global financial crisis for a litany of ills over the past year: slumping sales, mass layoffs and bankruptcy filings. Now, they are looking to the economy to explain recent spikes in shoplifting from their stores.
Though individual retailers do not publicly report crime data, a survey of 52 national chain stores released this month by the Retail Industry Leaders Association (RILA), a trade group, showed that 84 percent reported an increase in shoplifting since the recession began. About 80 percent said organized retail crime had also jumped, and more than half said robberies and burglaries have risen, as well.
“Bad guys are smart. People do not give them credit,” said Brad Brekke, vice president of assets protection at Target. “They understand odds are either for or against them, and if they see the odds swing in their favor, they will take advantage of it.”
In the Washington area, Alexandria police said there have been more shoplifting reports nearly every month this year compared with last year, though they expect December to slacken. In Tysons Corner, Lt. Josh Laitinen said his officers arrested 40 people over the past three weeks on shoplifting charges. And in Montgomery County, Detective David Hill, who oversees the county’s retail crime division, said many stores have told him that crime is up.
“I’m sure it’s a major concern for all of them,” Hill said. “No one wants to just give anything away.”
…and retailers are stupid.
Example: unencrypted WiFi from cash registers to back room servers. Not enough staff to keep an eye on things. (cost cutting, right?) Rest of staff either overworked or too dumb to care or notice.
No surprise shoplifting is up.
Here is another interesting example from the heart of real estate darkness, Atherton: 450 Middlefield road [zillow link]
This place was purchased for $1.3 million or so as raw land in 1999 with a garage or something there as I recall. Then this big, tacky McMansion Al Grande thing got built, apparently to house some dot com winner. At first it had two kitchens, and maybe still does. It’s designed kind of like two McMansions shoved up against each other. In this area that gets less rain than any other part of the San Francisco Bay Area they arranged to get the frame and the Tyvek well soaked along the way. That must have taken some work to pull off.
After only a few years it went up for sale or $3.1 million. These things get noticed in a place like Atherton where properties don’t move much. It stayed listed for a while, then sold in 2006 for just under $5 million. The current listing is by appointment only, but the owners have been having yard sales. This is rare in this area, so it draws crowds hoping to get a bargain on some fancy things. Yard sales of the rich turn out to have a lot of mundane stuff and mediocre antiques. The guy outside for these sales (the owner?) has a pensive look on his face that isn’t readable, but seems distraught.
The Zestimate track is hoarier than the walls of Toothopolis. At bubble peak this place was thought to be worth $11.2 million, and that is probably what got the current owners to spend (borrow, whatever) $4 million plus. Imagine! That little $1 million plus lot transformed into a $11 million plus property with only a few dozen truckloads of soggy plywood and Tyvek! Now it can be yours for just under six million. My guess is that it is worth somewhere in the $2.5-3.8 million range by historic measures, but in this case the comperables are all rare and strange. With $3 million down and a good rate the loan should cost less than $15k a month! Of course it will continue to shed some value and you’ll need to hire a pool boy, but think of the opportunity to live on the busiest street in Atherton.
Mole Man,
I’ve driven down Middlefield Road many times in the past when I worked in Redwood City. I never understood why any one would want to pay millions of dollars to live on Middlefield Road.
To all the hedge fund managers out there who survived this year without going belly up or worse, I wish you a Merry Christmas! And a Merry Christmas to those who went broke as well…
Financial Times
Hedge funds: the year from hell
Published: December 23 2008 14:03 | Last updated: December 23 2008 18:56
Canned beans and shotguns were about the only long positions that paid off for hedge fund managers this year. As the poison spread to every asset class bar government bonds, returns were not much better, and in many cases much worse, than for managers with more restrictive investment mandates.
Wall Street Journal
* ROI
* DECEMBER 22, 2008, 8:45 P.M. ET
A Real Auto Bailout: Escape Your Car
Whether you drive a hybrid or an SUV, your car is a cash-guzzler. Families trying to save real money should consider going without.
By BRETT ARENDS
Last week, the auto industry finally got its bailout.
But is it time for Americans to rescue their own finances from their cars?
Families are now bracing for the mother of all recessions. They’re looking for every chance to save a dollar.
Forget lattes and store-brand cereal. If you really want to see where your money is going, take a closer look at your car. Foreign or domestic, it doesn’t matter. It’s a cash guzzler, and it is probably costing you more than anything else except your home.
http://snltranscripts.jt.org/05/05lbuy.phtml
That skit and Shatner telling the Star Trek fans to get a life are my favorites.
PB - my wife and I discussed cutting back from two cars to one. But for whatever reason, as soon as I want to use the car for a “me” thing on shport notice, she has to have it for something else. So we’ll keep a clunker for the second., A shame, because insurance seems much higher per income dollar than it used to be.
When gas prices were almost $5 per gallon here in So Cal, I had a friend come up to me and ask if he should get a hybrid. Let’s do the numbers…
Assume you drive 20,000 miles per year, with gas at $5.
Current Car: Lexus
20 MPG
Payment: Paid off
Gallons per year: 1,000
Cost Per Year:
Payment: $0
Gas: $5,000
Total: $5,000 per year
Hybrid:
100 MPG
Payment: $500/month
Gallons Per year: 200
Cost Per Year:
Payment: $6,000
Gas: 1,000
Total: $7,000
Of course, insurance will be higher on the hybrid, but maintenance might be lower, depending on how well those batteries hold up. But what this shows is, even if you have a car that gets 5 times the mileage, it still doesn’t make sense if you have a good car that is paid off. There is no payback. Of course when you factor in that hybrids are getting 40-50 MPG, the numbers make absolutely no sense at all.
Moral of the story? Instead of leasing, buy a well made car, pay it off, and then drive the heck out of it.
In our case, both cars paid off since 2004. Both have around 100k miles on them. Both run excellent with minimal maintenance issues. Both get about 20 MPG. Both are made by Toyota (one by Lexus).
My auto expenses were actually lower at the height of the gas price spike than they were 10 years ago. Because 10 years ago I was making 2 car payments. Today I am not. Registration is cheaper because they are older cars. Insurance is cheaper too.
Pay them off and then drive them forever. Let someone else commit financial suicide every 3 years.
I share your philosophy on car buying. We also are a 2-Toyota household. Sometimes I feel a tiny bit bad that my car only gets 20 mpg, but it’s paid for and has at least another 6 good years left. I did the math on buying a hybrid, and realized I’m much better off financially keeping the gas gulper. Plus, it has permanent 4 wheel drive (a big part of the reason why it gets only 20 mpg), which in our lovely Midwest winters is a big advantage.
I’m no fan of SUVs but discussed this scenario with friend who has one and was stressing during the height of the $4.50/gallon gas. Convinced her that it would be better to just drive the thing into the ground since it’s paid off. A hybrid IS a good choice if you’re in the market for a new (used or new) car, especially if you put on a lot of miles each year. Insurance on our hybrid is not any higher than a regular car.
Our outgoing president has, historically, been quite stingy with gubernatorial and presidential pardons (that’s a good thing), much more so than other recent execs.
Yesterday, however, he decided to pardon a Brooklyn real estate developer convicted of mail fraud and lying to a federal agency (HUD):
President Bush pardoned a Brooklyn real estate developer accused of scamming hundreds of poor, minority homebuyers — and whose father donated $28,500 to the Republican Party this year.
Bush pardoned Isaac Toussie, 36, two days before Christmas in a gesture of mercy that outraged ex-customers who said they were duped into buying overpriced, defective homes.
Government for sale… nothing new here.
No, but it’s interesting because of the nexus between the housing bubble, graft, and politics.
And because Bush has chosen to use his pardon / commutation powers so sparingly in the past, even in some cases where cronies, friends, or allies were pressing for help.
This Toussie guy is a nobody, and his father’s donation was peanuts compared to what an Enron exec could lay down, for example.
Ummm…you are sure he only donated $28,500? Sure there wasn’t a suit case or two full of cash that was accidentally left in someones car? Heck, maybe he arranged the “accident” that took out Rove’s IT Guru a couple of days ago.
Isn’t this par for the course that the Pres pardons all his criminal buddies before he leaves? I remember Clinton doing the same, including one guy that couldn’t come back into the country for fear of being arrested by the FBI.
I’m not old enough to have known about this with regard to presidents prior to Clinton.
In 1983 Rich and partner Pincus Green were indicted by U.S. Attorney and future mayor of New York City Rudolph Giuliani, on charges of tax evasion and illegal trading with Iran. They were indicted while they were in Switzerland. The pair failed to return to the U.S. following the indictment, and were on the FBI’s Most Wanted List for many years. In 1989, the United States Justice Department has since rejected the use of RICO statutes in tax cases like the one in which Rich and Green were indicted,and instead sued civilly by the government.
On January 20, 2001, hours before leaving office, President Bill Clinton granted Rich a presidential pardon. Since Rich’s wife and mother of his three children, socialite Denise Rich, had made large donations to the Democratic Party and the Clinton Library during Clinton’s time in office, Clinton’s critics alleged that Rich’s pardon had been bought. Rich had also made substantial donations to Israeli charitable foundations. Clinton explained his decision by noting that similar situations were settled in civil, not criminal court, and cited clemency pleas from Israeli government officials, including Prime Minister Ehud Barak. Federal Prosecutor Mary Jo White was appointed to investigate. She stepped down before the investigation was finished and was replaced by James Comey. Comey was critical of Clinton’s pardons and Eric Holder’s pardon recommendation.
As a condition to the pardon, it was made clear that Rich would drop all procedural defenses against any civil actions brought against him by the United States upon his return to this country. That condition was consistent with the position that his alleged wrongdoing warranted only civil penalties, not criminal punishment. To this day, Mr. Rich has not returned to the United States.
During hearings after Rich’s pardon, Lewis “Scooter” Libby, who had represented Rich from 1985 until the spring of 2000, denied that Rich had violated the tax laws but criticized him for trading with Iran at a time when that country was holding U.S. hostages. In his letter to the New York Times, Bill Clinton explained why he pardoned Rich, noting that U.S. tax professors Bernard Wolfman of Harvard Law School and Martin Ginsburg of Georgetown University Law Center concluded that no crime was committed, and that the companies’ tax reporting position was reasonable. In the same letter Clinton listed Libby as one of three “distinguished Republican lawyers” who supported Rich’s pardon.
It looks like, in this case, Bill Clinton had reasons to consider the pardon. It was not outrageous, as some claim.
The guys name was Marc Rich. Expect his name to come up in the Attorney General hearings next month.
Funny enough, Marc Rich’s lawyer was “Scooter” Libby who himself was kept out of jail by GW Bush.
Yeah, there’s always a good reason when rich people don’t go to jail. lol
You trade with Cuba or commit tax evasion and see what happens. lmao
Seriously, comparing Bush to Clinton in this area with a slighting tone, is… strange.
Here’s a follow-up article on Isaac Toussie, also in the NY Daily News.
Interestingly, several of the people mentioned in the article bought their homes before the real estate bubble bloomed in earnest.
But but but…Bill Clinton pardoned Mark Rich! That is all I know. These other pardons are no big deal!
Sincerely,
Partisan Hack
Don’t forget those Puerto Rican terrorists.
Bush withdraws 1 of 19 pardons he issued Tuesday
By JENNIFER LOVEN, AP White House Correspondent
Wednesday, December 24, 2008
(12-24) 14:15 PST WASHINGTON (AP) –
President George W. Bush took the very rare step Wednesday of revoking a pardon he had granted only a day before, after learning of political contributions to Republicans by the man’s father and other information.
Bush pardoned 19 people on Tuesday, including Isaac Robert Toussie of Brooklyn, N.Y., who had been convicted of making false statements to the U.S. Department of Housing and Urban Development and of mail fraud. On Wednesday, the White House issued an extraordinary statement saying the president was reversing his decision in Toussie’s case.
White House press secretary Dana Perino said the new decision was “based on information that has subsequently come to light,” including on the extent and nature of Toussie’s prior criminal offenses. She also said that neither the White House counsel’s office nor the president had been aware of a political contribution by Toussie’s father that “might create an appearance of impropriety.”
“Given that, this was the prudent thing to do,” she said.
The new information came out in news reports, Perino said. The counsel’s office generally doesn’t include vetting of political contributions in its reviews on such matters, as that would be “highly inappropriate on many levels,” she said. The White House decision on Toussie had come without a recommendation from the pardon attorney, Ronald L. Rodgers, as Toussie’s request for a pardon came less than five years after completion of his sentence, so that eliminated another step in the review process.
Perino said she is not aware of any other instance of a pardon reversal, in the Bush administration or others.
“The counsel to the president reviewed the application and believed, based on the information known to him at the time, that it was a meritorious application,” she said. Bush now believes the case should rest with the pardon attorney.
A story in the New York Daily News said Toussie’s father, Robert, donated $28,500 to the national Republican Party in April. It was his first political donation and came just months before Toussie’s pardon petition, the newspaper said.
That story, and another in Newsday and on blogs, also shed light on Toussie’s record. He pleaded guilty for lying to HUD and mail fraud, admitting that he falsified finances of prospective homebuyers seeking HUD mortgages. He was sentenced to five months in prison and five months house arrest, a $10,000 fine and no restitution, the Daily News reported.
In another case, Toussie pleaded guilty to having a friend send his local county a letter that falsely inflated property values.
The Daily News also located a lawyer representing hundreds of ex-customers who have sued Toussie in federal court, accusing him of luring poor, minority homebuyers into buying overpriced homes with mortgages that had hidden costs.
The Justice Department advises the president on who qualifies for pardons. Only people who have waited five years after their conviction or release from prison can apply for a pardon under the department’s guidelines. Criminals are required to begin serving time, or otherwise exhaust any appeals, before they can be considered for sentence commutation.
But the president can forgive people outside that process if he chooses. Under the Constitution, the president’s power to issue pardons is absolute and cannot be overruled — meaning he can forgive anyone he wants, at any time.
I note that BB’s and HP’s plans to buy down the interest rates on jumbo mortgages amount to forcing Joe Farmer in Flyover Country to subsidize mortgage interest rates on luxury coastal housing valued north of $729,750. Since it’s for the good of the nation’s economy, I guess it is all good. (Forget about the old adage that “all real estate is local.”)
Jumbo Mortgage Shoppers Get Little Relief From Rates
By Kathleen M. Howley
Dec. 24 (Bloomberg) — Jumbo mortgage shoppers in the most expensive U.S. housing markets such as New York and San Francisco aren’t getting much relief from lower borrowing costs.
The average 30-year fixed rate for home loans of more than $729,750 remains almost 2 percentage points above conforming rates and the spread between them may set a record this month, according to financial data firm BanxQuote.
Banks remain reluctant to lend after recording $678 billion in mortgage-related losses and writedowns in the past year and as house prices plunge. Jumbo mortgage rates may come down next year as more homeowners refinance, helping banks improve liquidity, said Keith Gumbinger, vice president of mortgage-research firm HSH Associates Inc. in Pompton Plains, New Jersey.
“A guy in a low-cost market like Des Moines probably doesn’t care much about helping someone in New York buy a million-dollar apartment, but if he refinances his conventional loan, that’s exactly what he’ll be doing,” Gumbinger said. “He’ll be giving lenders the liquidity they need to rebalance their loan portfolios and compete for jumbo borrowers who typically are the best in terms of credit quality.”
…
Buyers in markets that rely on jumbo loans, such as New York, San Francisco, and Boston, may see rates fall in 2009 because of Federal Reserve Chairman Ben Bernanke’s plan to buy at least $500 billion of securities issued by Fannie Mae and Freddie Mac, said Gumbinger. Fannie Mae and Freddie Mac are the largest buyers of mortgage debt in the U.S.
The Fed’s mortgage-bond buying program, announced Nov. 25, also provides for the purchase of $100 billion in direct debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
Bernanke’s plan adds to previous government actions aimed at lower home-financing costs, including the September seizure of Fannie Mae and Freddie Mac. As part of that takeover, the Treasury announced its own program to buy mortgage-backed securities to bolster the worst housing market in at least 70 years.
Merry Christmas to our Christian posters and others who celebrate the observance. Happy Hanukkah to our Jewish posters and Happy Kwanzaa to our African-American posters.
And for those who can’t stand the terminology, then Merry Xmas, Happy Xkah and Happy Xzaa! No humbug from me today!
I hope Santa treats Ben Jones well. It’s been a great year for Ben’s army and looks like a wild and wooly one coming up. Oiled my seat belt clasp this morning and am ready for the ride. I hope.
Merry Christmas to you, too, Chip!
In case it hasn’t been noted elsewhere, there is a great Website for children who believe in Santa:
http://www.noradsanta.com
It shows where on the planet Santa is right now, with gift boxes showing where he’s already been.
Whoops - my error in the file extension - it is .ORG, not .com:
http://www.noradsanta.org
Fun, even for us kids that don’t so much.
“We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.” -James Paul Warburg, whose family co-founded the Federal Reserve - while speaking before the United States Senate, February 17, 1950
“Paul Warburg became known as a persuasive advocate of central banking in America, in 1907 publishing the pamphlets “Defects and Needs of Our Banking System” and “A Plan for A Modified Central Bank”. His efforts were successful in 1913 with the founding of the Federal Reserve System. He was appointed a member of the first Federal Reserve Board by President Woodrow Wilson, serving until 1918.”
“The only question is whether World Government will be achieved by conquest or consent.”
I predict it will occur due to collusion among central banks.
Wars will not be fought over solar energy.
I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.
Woodrow Wilson, US President
I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.
Woodrow Wilson, US President
The power of the Federal Reserve System - a system controlled by a small group of dominant men - derives solely from is power to issue debt-based money in the form of US dollars and to charge interest on their issuance. We are paying our jailors for our enslavement and are fools for so doing. Who would have thought - except Jefferson.
Ah. I’m reading The Warburgs, right now (Chernow)
World Government was the biggest dream of Soviet Union’s Politburo. Of course they hoped they’d get to be that government.
I’m back from the gorgeous city of Chicago, where my beloved Packers lost to the McCaskey Bears - a sad night. Only one beer poured over me by a typical Bears fan, but it was so cold my coat iced up. (The fan poured it over me after the game was over.) Ah Chicago. At least this year I did not get any flat tires from the potholes.
The normal 7 hour ride back North took 13 hrs, 5 hrs was spent going from Chicago to Milwaukee - a 90 mile drive. Idiot drivers down South put their foot on the brake when they go around turns and wonder why they spin out. “But honey, I have 4 - wheel drive and ABS,” he said ditchedly.
Welcome back Hozzie! Thanks for your commentary below.
I am following Santa Claus via NORAD. Peaceful holidays to all.
http://www.noradsanta.org
Ok Choctaw
Going for a Choctaw Hayride? Lasts longer than a 2 minute ride in Hawaii. Crazy faith mi amigo.
Not super deep pockets, every large position is always hedged for minimal risk/max profit potential. e.g. Long Yen/short Euro; long Japan stocks short European stocks. Adverse MTM rarely go over 5% and most of the time fluctuate between 1 and 2%. The short Treasury is fully hedged margined at 40:1 (I am allowed to go 160:1)
Yes I am getting long oil, and I will get longer oil - In 6 months we won’t believe prices were this low and did not buy. Oil cannot fall another $100. It is like buying UYG under $4. If the price of oil is under $40 for 2 more weeks, I will be shocked. I expect Canada to halt all oil production if it stays here. As opposed to the Middle East and Russia, Canada has credible accounting on the cost of production. IMHO, Russia is already producing at a loss and 25% of the Middle East is producing at a loss.
A big change to my trust accounts, I currently have the majority of the funds in Vanguard accounts. Since Mr. Madoff, I have no confidence in the US markets and market participants. I am splitting funds into like accounts many with marginally higher costs.
Why I never manage other people’s money:
Rene Thierry Magon de la Villechet
I also would have committed suicide. Bad enough to lose my own moneys, a nightmare to lose somebody else’s moneys.
Japan Should Scrap U.S. Debt; Dollar May Plummet, Mikuni Says
Dec. 24 (Bloomberg) — Japan should write-off its holdings of Treasuries because the U.S. government will struggle to finance increasing debt levels needed to dig the economy out of recession, said Akio Mikuni, president of credit ratings agency Mikuni & Co.
The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.
“It’s difficult for the U.S. to borrow its way out of this problem,” Mikuni, 69, said in an interview with Bloomberg Television broadcast today. “Japan can help by extending debt cancellations.” …
Japan writing down US debt - how low can we go.
The USA helped Japan out of WWII so the least Japan could do is cancel the debt.
“The USA helped Japan out of WWII”
Yep, by dropping 2 nukes on them, LOL.
I get what you mean, but I think 60+ years is enough water under the bridge for Nippon and Frogland both. The world doesn’t owe US anything and if we don’t like it we can take our marbles and go home.
“Japan Should Scrap U.S. Debt; Dollar May Plummet, Mikuni Says”
This is bait for the Tin Foil Hats. The Japanese were brutal on the Chinese during WWII, and the U.S. is the only thing keeping the Chinese from dishing out the payback.
Hoz my good man,
Are your beloved Packers going to make history this Sunday against the Lions???
Hoz, or anybody, can you explain how to buy oil?
Thanks in advance!
http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vpZqGFXZTDlM.asf&vCat=/av&RND=310217256&A=
Jim Rodgers last night on Bloomberg. I haven’t watch it yet, it was on at 3am local.
Merry Christmas, everyone!!!
May the next year bring you lots of love from family and friends, good health and no job losses (and new jobs for those who’ve already lost theirs).
Best wishes!
CA renter
Good health, financial security, love of family and friends AND affordable housing!
Merry Christmas CA renter and all HBB’ers. And to all of you - thanks for the gift of knowledge again over the last year!
Confidence in Monetary Policy
2008-12
Yakov Ben-Haim
Maria Demertzis
In situations of relative calm and certainty, policy makers have confidence in the mechanisms at work and feel capable of attaining precise and ambitious results. As the environment becomes less and less certain, policy makers are confronted with the fact that there is a trade-off between the quality of a certain outcome and the confidence (robustness) with which it can be attained. Added to that, in the presence of Knightian uncertainty, confidence itself can no longer be represented in probabilistic terms (because probabilities are unknown). We adopt the technique of Info-Gap Robust Satisficing (my notes: Satisficing -a portmanteau of “satisfy” and “suffice”- is a decision-making strategy which attempts to meet criteria for adequacy, rather than to identify an optimal solution. A satisficing strategy may often be (near) optimal if the costs of the decision-making process itself, such as the cost of obtaining complete information, are considered in the outcome calculus.) to first define confidence under Knightian uncertainty, and second quantify the trade-off between quality and robustness explicitly.We apply this to a standard monetary policy example and provide Central Banks with a framework to rank policies in a way that will allow them to pick the one that either maximizes confidence given an acceptable level of performance, or alternatively, optimizes performance for a given level of confidence.
http://www.dnb.nl/binaries/Working%20paper%20192_tcm46-208075.pdf
The conclusion on pg 27 of this pdf is pure cognitive economics. Another way for central banks to screw up.
“A big change to my trust accounts, I currently have the majority of the funds in Vanguard accounts. Since Mr. Madoff, I have no confidence in the US markets and market participants. I am splitting funds into like accounts many with marginally higher costs. ”
At different mutual fund companies ? like T rowe price ? In case Vanguard is a ponzi
yes :>(
Sad, no longer much trust in the US markets. I knew people in Mr. Madoff’s fund. I know people that may be subject to clawback. I have most often believed to put all your eggs in one basket and guard it like a hawk.
I do not believe Vanguard et al are Ponzi schemes, but why take a chance in this crooked environment? As Mr. Madoff has shown, it only takes one crook to wipe out $50B.
-Let the (doomed to failure?) attempts at emotional manipulation begin anew!
The NAR’s 2009 Public Awareness Campaign ads will begin airing January 12th:
” ‘Home With A View’ uses an emotional twist to show how priorities in life change and how important a home is to raising a family.”
“The ‘Fence Sitters’ spot pokes fun at people waiting on the sidelines and states, ‘if you’re waiting for the right time to buy a home, the wait may be over.’ ”
“In ‘Buying Strength’, our spokesperson takes a seamless stroll through various types of neighborhoods, while letting consumers know that ‘if you’re in a position to buy, you’re in a position of strength.’ ”
Source: January 2009 Realtor Magazine.
Sounds like a bad year for Ben Stein
The final lesson from 2008:
3. We can’t count on the people who rule us to have learned a darned thing from past history. “Those who do not know the past are condemned to repeat it,” said the famous Harvard philosopher George Santayana.
Of course, that’s a cliche by now and has been for decades. But it is true of Henry Paulson, our pitiful Secretary of the Treasury and, very, very sadly, of Ben Bernanke, our Fed chairman.
Paulson is simply an ignorant, bullying fraud. I never expected much from him. But Bernanke is a scholar, or so I thought, and should’ve known better than to destroy confidence by allowing Lehman to fail. That was a mistake that no real student of the Great Depression, as Bernanke is, should’ve made. I would never have thought it could happen, but it did.
It makes me wonder what other mistakes and foolishness our rulers have in mind, and it scares me plenty.
Only Human
In the meantime, please don’t blame yourself for your losses. We all make mistakes, yours truly especially. My hat is off to those like Doug Kass who saw it all coming. My hat is not off to those who claimed afterward to have seen it coming. I have met so many people who tell me they sold out in October 2007 that I think I must be the only person left in this country with any stock. (That would make me by far the richest man on the planet, and I guarantee that I’m not.)
We’re just human beings with human failings. Efficient market theory fooled us. Buy and hold fooled us. Trust in government fooled us. My own failings fooled me. Something else will fool us next time. As my grandmother used to say when her children made a mistake, “Don’t worry, you’ll do it again.” If we learn even a little from what’s happened, we’re far ahead of Henry Paulson.
I felt like channeling Heinlein when I read that.
Yes, it is a crisis of confidence. But, intuitively, I feel that the solution is NOT more confidence.
Merry Christmas everyone. Here’s my gift to all the HBBers. I love Yosemite.
http://www.yosemite.org/vryos/index.htm
A Christmas Crisis Carol
Tuesday, December 23, 2008
T’was the Time of the Big Crash
by Tim Stewart
T’was the time of the Big Crash, when all through The Street,
Merry traders flogged worthless paper, growing their bonus heap.
Derivatives were shunted ‘round the world without care,
Knowing St. Greenspan soon would proclaim, “No bubble there!”
Over-leveraged homeowners were nestled all snug in their beds,
While visions of ever-inflating values danced in their heads.
And my trophy-wife in her designer lingerie, and I in my official logo cap,
Had just flipped on the 100-inch plasma and settled into the Jacuzzi, unable to nap.
When out in the free markets there arose such a clatter,
Paulson had to pull his head out of the Wall Street Journal to see what was the matter.
Away to Goldman Sachs he flew like a flash,
Tore open the jewel-embossed shutters and quickly hid the stash.
The rose-coloured lenses, once discarded they flew,
Then stocks began tanking, as the pyramid schemes blew.
When, what to our wondering eyes should appear,
But a 700 billion dollar bailout, and eighty fat-cat bankers hands outstretched so dear.
With an old boy as the driver, so two-faced and slick,
I knew in a moment it must be a trick.
More rapid than eagles the free traders they came,
And Paulson whistled, and shouted, and called them by name!
“Now Goldman! Now, Merrill! Now, AIG and Bear Stearns!
Sorry, Lehman. On, Citicorp! On Morgan and Stanley!
To the top of the Federal Reserve Bank! To the top of the Street’s Wall!
Take the taxpayer’s money and dash away! Dash away! Dash away all!”
After impelling so many to amass debts sky high,
When they meet with an obstacle, they are ‘too big’ to die.
So back to the Congress the noble free-market men they flew,
With private jets full of toys, some for each member too.
Amid all the back scratching, Congressmen heard on the helipad roof,
The soft leather pawing of each well-heeled hoof.
As one jotted on a napkin the formula for ole trickle down,
Up the nation’s chimneys all wealth was sucked, with hardly a sound.
Investment bankers strutted dressed all in fur, from their head to their foot,
No clothes not custom-made on their skin could be put.
Bundled sub-prime mortgages they flung ‘round with Triple A matter-of-fact,
And they sounded like gamblers, just playing a game of black jack.
The Decider’s eyes—how they twinkled! His smirk how scary!
His ideals were like deadweight, his mind muddled and airy!
His fake Texas drawl sputtered out rather slow,
And the colour of his face turned as white as the snow.
He was stumped by events so gritted his teeth,
While the smoke from the Big Crash encircled his head like a wreath.
He had more lines on his face, and dreaded the sound of the closing bell,
But shrugged and laughed it all off, ‘truly sorry’ for this hell.
He was chummy with plump billionaires, around them a right jolly old elf,
The people cringed when they saw him, and resented his stealth!
A wink of his eye and a twist of his head,
Soon gave us to know we had much more to dread.
He spoke not a word, about all of his dirty work,
When people threw shoes and stockings, he ducked and he jerked.
And shooting the finger at the press conference close,
Into history he tumbled, smelling more like Herbert Hoover than a rose.
He sprang from the White House, to his team gave several loud whistles,
And away to the Crawford ranch they all flew to play golf and clear thistles.
But we heard him exclaim, as he flew out of sight,
“Happy Big Crash to all, and to Obama good luck, yer sure gonna need a might!”
Excellent!
Promise her anything, but give her Arpege.