Bits Bucket For January 4, 2009
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The Housing Bubble
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It’s never a good idea to build on a land fill, but at least these were ‘free’ to the folks living in them…
January 4, 2009
Charity homes built by Hollywood start to crumble
John Harlow in Los Angeles
RESIDENTS of a model housing estate bankrolled by Hollywood celebrities and hand-built by Jimmy Carter, the former US president, are complaining that it is falling apart.
Fairway Oaks was built on northern Florida wasteland by 10,000 volunteers, including Carter, in a record 17-day “blitz” organised by the charity Habitat for Humanity.
Eight years later it is better known for cockroaches, mildew and mysterious skin rashes.
A forthcoming legal battle over Fairway Oaks threatens the reputation of a charity envied for the calibre of its celebrity supporters, who range from Johnny Depp and Brad Pitt to Colin Firth, Christian Bale and Helena Bonham Carter.
The case could challenge the bedrock philosophy behind Habitat for Humanity, claiming that using volunteers, rather than professional builders, is causing as many problems as it solves.
April Charney, a lawyer representing many of the 85 homeowners in Fairway Oaks, said she had no problems taking on Habitat for Humanity, despite its status as a “darling of liberal social activists”. She said the charity should have told people that part of the estate had been built on a rubbish dump.
One man pulled up his floorboards to find rubbish 5ft deep under his kitchen. Other complaints include cracking walls and rotting door frames that let in rats and ants. Many residents have complained of mildew and mysterious skin rashes.
One resident said her children were suffering from skin complaints. “The intentions are good, but when the politicians and big-shot stars have left we’re stuck with the consequences. This house looks pretty but inside it either stinks or sweats,” she said.
Judy Hall, the charity’s local development director, said recently that it had been dealing with about 30 complaints. She added that skilled work was carried out by professionals.
Some residents dismiss their neighbours’ worries. Diennal Fields, 51, said people did not know how to look after their homes: “It’s simple stuff: if there is mildew, don’t get a lawyer, get a bottle of bleach.”
“using volunteers, rather than professional builders, is causing as many problems as it solves”
Agreed. I participated in a Habitat for Humanity project once. That day I learned how to work the nail gun, and even built a floor in a small house - with my own tiny hands, LOL. Amazing!
But the quality of work of course was very shoddy. Floors and walls uneven, materials very cheap… I was thinking then, the idea was not too good. Building a house should be done by professionals, not clumsy volunteers with zero experience.
Living in a Habitat for Humanity’s house beats living under a bridge, but that’s about it.
I’m not sure there is much of a skill difference between Habitat for Humanity volunteers and the people who work for the “professional” builders who have been putting up all these crapbox subdivisions.
“I’m not sure there is much of a skill difference between Habitat for Humanity volunteers and the people who work for the “professional” builders who have been putting up all these crapbox subdivisions.”
+1 (to quote FPSS)
+25
I call BS on the suggestion that a novice can’t build a house with proper instruction.
I built a 3 season porch, remodled my kitchen with custom cabinet doors (wife did the routing with the router I got her for christmas), put on a new roof and gable vent system, replaced two small windows with larger ones, tiled the basement and bathroom, and built a storage shed with very little experience prior. All my work lasted at least 8+years. Then I sold it in 2006. All I had for instruction was a couple of books and a friendly neighbor.
I call BS on projecting your positive building experience onto the rest of the population. People have their own innate talents and lack thereof.
The fact that you could build these things with a couple of books and a friendly neighbor says nothing about what some random person off the street might be able to do.
I call BS on housing. ALL OF IT!
I did a lot of work on my SJ home - tore out the kitchen, put in new pre-fab cabinets, installed parquet flooring, put on a new roof (including tear-down to wood), installed new doors including a roll-up garage door. None of this stuff is rocket science. But you have to take your time and read the instructions. Some guy who did this stuff for a living could have done what I did in a third of the time.
“Some guy who did this stuff for a living could have done what I did in a third of the time.”
And there’s the difference. A weekend Wally would go broke where a skilled trade can earn $$. Big construction (heavy, highway and municipal) make there profits by finding ways to cut costs while meeting specifications. Missing items during bid or a poorly assembled team going into the project will bankrupt a contractor. Alternately, big money is earned. Heavy construction is high risk, high reward.
Wrong even though it probably took me longer I saved thousands of dollars doing the work myself. All the money that would have gone to wages, company profits, workmans comp, insurance, ect went to me. Also saving a dollar is like making a $1.50 because I don’t have to pay taxes on money saved. The person doing the work cared about the results and thus the build quality was good. These guys at habitat for humanity are given one job. You cut wood to these lengths, you put up drywall. They are motivated by volunteerism not profit so I would bet that many do a very good job. Just as projecting my positive outcome may not be justified in all cases, stating that all Habitat for Humanity houses are crap because of this case is not justified.
“They are motivated by volunteerism not profit so I would bet that many do a very good job.”
My observation is that many if not most people motivated by volunteerism do a very poor job. (I’m not really contradicting you because of the non-objective meaning of the word “many.”) Most have no idea what they are doing, whether it is working registration at a sporting event or trying to help build something. It is the public act of volunteering and the camaraderie they are interested in.
“stating that all Habitat for Humanity houses are crap because of this case is not justified.”
measton, Take into the consideration that the the source is sitting safely behind a keyboard attempting to advance a failed cause.
I can’t see why they do new construction, when even during the bubble there were plenty of run-downs needing rehab. Imo, new sfh construction is hardly ever needed.
While you may have done a fine job, the same cannot be said for many do-it-yourself’ers. What might appear on the outside to be a success, could ultimately prove to be of very poor quality, and even dangerous. Anyone can hang a cabinet, right? Wrong. Many people use the wrong fasteners, too few of them, and in the wrong places. The wall cabinets might actually come falling down one day, perhaps on top of a child’s head.
I don’t believe that the average person is capable of putting out a professional product. It takes many years to hone a craft. Most things are better left to someone who does it every day for a living. That said, much of the building of the last 10 years is substandard, and barely better than what homeowners themselves could produce.
I agree if you hire a craftsman to make your cabinets you will likely get a better product, but most of these jokers want to get in and out and collect their check. Many hire day labor and train them (just like Habitat for Humanity) then take the cream off the top. My dad had a neighbor who owned a roofing company put a roof on his house, the guy screwed up the ridge vent system, obviously didn’t know what he was doing. Claimed that it was done right until we pulled up the company web site diagrams and showed him. Fortunately the guy was honest and fixed it.
BB, when I mentioned “read the instructions” I meant it. That includes researching This Old House and similar sites since pre-fab cabinets don’t necessarily come with instructions. I put them up in 1987 and they were still strong and plumb when I sold in 2006.
As you’ve indicated, DennisN, building materials don’t generally come with instructions. You have to have more than just a basic understanding of construction in order to do the job correctly. I believe that you did the appropriate research. But, you’re the exception not the rule. Not only are there poor homeowner remodels out there, but there are many horrible contractors putting out substandard work as well.
At one time, I witnessed an independent contractor screwing up a metal roof install- one of the more basic of tasks. He overlapped the seems backwards, and the pole barn leaked like a sieve. Not only that, he never plumbed, leveled, and squared the building, so all of his metal had no way of fitting correctly. The whole fit and finish was atrocious. The guy is only fit to be a worker bee with supervision, but he’s building houses!
There are virtually no barriers to getting into the business. I could get licensed, bonded, and insured this week. Granted, I probably know more than the average person because I have many contractor friends, and have worked on many houses/buildings at different periods in my life, but in no way am I qualified to be a contractor. There needs to be a change in qualifications, if anything, to protect people. This bubble has really brought to light the horrendous building standards and practices in this country.
In the past decade, especially, there seems to have been an across-the-board death of true craftsmanship by guys (mainly) who are highly proficient and knowledgable at what they do, and take pride in their work. Now it’s all about making a fast buck, quality be damned. A lot of lousy contractors are going to get shaken out, but finding good ones, and well-built housing, is going to take time.
The real craftsman are leaving for 3 reasons.
1. Construction is not for the over 50.
2. It’s hard to compete against 2 guys in a broken down truck who will do the work for min wage because they’re too dumb to realize they’re underbidding themselves.
3. All anybody cares about is price, price, price and in construction, you get less than what you pay for to begin with.
What that means is that your average customer has no clue on how find a real pro, no clue as to real costs, no clue if the job is being done right, or they do know, but expect expert work for min wage, so they choose strictly on price and wonder why they get screwed.
I used work in the biz. It’s a dirty business in more ways than one. I wouldn’t live in a house made after oh, 1965. Sure as hell nothing made from 1975 on. Hell, I’ve seen styrofoam sheets used as outer wall, sub-facade/siding waterproofing instead of Tyvec plywood or CDX in the last 5 years. STYROFOAM!
The problem is that most people who get some one else to do the job have a hard time screening the applicants. They go on price and the look of the guy. Then they don’t watch whats going on because they have no idea what to look for. Even if you are getting another to do the job you need to educate yourself to make sure you don’t get screwed. Like I said my Dad got his neighbor to do his roof. He knew the guy and the guy had a roofing company. He still did the job wrong and if I hadn’t pointed it out my dad would probably have waterdamage and a few animals living in his attic.
Some people are more “shovel ready” than others.
wife did the routing with the router I got her for christmas
No jury in the land would convict . . .
I worked on a rehab project for Habitat in the early 80s in my own (rural) community. The house was a complete dump aside from needing structural overhaul. More than half the volunteers were skilled craftsmen of one form or another and took charge of what they knew how to do. The kids carried stuff and helped in ways that did not harm the integrity of the project. Very little had to be done twice.
The “family” that lived in the house stole the scaffolding that one of us brought to the job. A couple of years later, the place was once again a dump.
It was an educational experience.
Altruism has unintended consequences.
So when the Habitat for Humanity house turned “once again a dump,” what effect did it have on the housing values in the neighborhood which it was built?
Note to self: Avoid buying in a neighborhood where do gooders build a house for others for charity.
lol. good one, Bill.
Bill, I can’t imagine the effect was any more negative than the initial condition, since the house was also initially a dump. E.g. net zero neighborhood impact.
Bill,
It didn’t change the community, we were in a local depression before and after. Death of Pullman and all that. And the house wasn’t in a “neighborhood”.
It didn’t change the character of the commuity either. Other efforts turned out better. The ones that restored normality after some personal disaster worked fine. This one that tried to alter normality was a flop.
Gramps used to tell about how he’d give his poor dad a sow, so he could get the Kansas farm going again in the 40s. Says his dad always ate the pig.
I can only think, reading the above accounts re: Habitat for Humanity experiences, that beggars can’t be choosers. If the residents of the Habitat for Humanity housing had the education or the wherewithal or the gumption to earn their own homes, they’d already be in them. So, no complaining about shoddy workmanship, eh ? The part about the homes being built on a landfill is a bit much, though. Who gave the zoning ? Big payoff, or somebody getting rid of otherwise unusable land, perhaps ?
I lived all of my childhood in a home built by my father and mother and their friends. WW II vets stuck together and helped each other out. It was a great house, about 1500 sq. ft., on a lake in Michigan. We had a homemade boat, a homemade boathouse, and a homemade housetrailer, too. Dad could build anything. He still takes care of his own boat in Florida, and works on the engines of his 48-footer in Michigan. His cabinet work was exquisite. No more like him these days, though.
You also had the advantage of living with people “of your kind.”
It’s different now, multicultural. I’m also part of a different culture than the one my parents were in, since I’m a “God-hating” atheist. “Mea culpa?” So I’m a multi culturalist!
I do identify with productive capitalists of any color, sexual preference, and nationality. I’m trying to get over those in this group who still insist on having an imaginary friend though…
Bill,
I’m fairly certain the natural order and wonders of this world reflect a creator, though from all indications he’s pretty much unknowable to mortal man. Still, I think it’s likely that in the next world we will find ourselves giving an account for our time in this life. Just a hunch, but I try to live my life accordingly.
“If the residents of the Habitat for Humanity housing had the education or the wherewithal or the gumption to earn their own homes, they’d already be in them.”
The ultimate irony is that we no longer care about “earning” homes - it’s been all about the scam-loans!
So the only people who can’t get a home are the honest people: the crooked get toxic loans, and the stupid get charity homes. What a system!
I think the record shows that after Hurricane Andrew, the only houses standing in the affected area were H for H houses. Of course, the clean up crews found several roof panels with only 2 or 3 nails in them. There was a lot of building inspectors on the take back in the early 90’s. . . .
RE: Charity homes built by Hollywood start to crumble
Much more of this to come on a far larger scale as the O’Bama $1 trillion stimulus package gets sucked up by legions of politically connected construction hacks, bond debt swindlers, and incompetants such as the builders of the $19 billion leaking sieve known as the “Big Dig” here in Mazzland which has put the state infrastructure budget in ruins.
No doubt about, there are serious infrastructure issues in our nation today.
That said, the metric that will be employed in this stimulus package flawed. It will not be measured by the proper rebuilding of facilities - but instead by the rising approval level of our politicians.
Rebuilding bridges is cover for keeping career pols/encumbents in office. Long live the two party fantasy!
I spent several weekends working on inner-city Habitat for Humanity projects, until I realized that most of the recipients and their neighbors were ingrates who were poor for a reason: zero work ethnic or sense of personal responsibility. I had great respect for the volunteers and the professional carpenters on the project, who were truly the salt of the earth. However, you can’t change the ghetto mentality that doesn’t recognize such concepts as attempting to better one’s surroundings or circumstances.
Hollywood celebs are big into feel-good charities that do nothing to address the root causes of poverty, opting for band-aid fixes instead. I’m not surprised that the houses were poorly built, but I’m even less surprized that the residents, the products of an entitlement culture, chose to address their housing problems with lawsuits instead of applying their own labor and resources to fix the problems. Most of these people are parasites, not victims.
So true Sammy My father was a bricklayer and helped build the first low income project in Norwalk CT in the late 60’s. He worked for far less then union scale because he wanted to give back and do something good for our city.
Less then 3 years later everytime he passed the place he started to cry about its deterioration….garbage overflowing, broken cars and windows…and people standing around doing nothing.
—————————————
were ingrates who were poor for a reason: zero work ethnic or sense of personal responsibility
“Less then 3 years later everytime he passed the place he started to cry about its deterioration….garbage overflowing, broken cars and windows…and people standing around doing nothing”.
This has been done over and over again in cities across America and the majority are a complete failure not to mention a huge waste of money.
Our city is now trying to mix section 8 houses in with houses with a starting price of $249,000.00 So far the out come one would expect is occurring. Plenty of section 8ers showing up and no buyers for the rest. Our city council is filled with bleeding hearts who just don’t understand why this is happening.
My question to them has been, if it’s such a wonderful deal, then why are any of you buying into the project? Of course they never respond with an honest answer just political gibberish!
There have been some recent studies published (by otherwise liberal researches) showing that crime follows section 8 housing.
I certainly think it’s appropriate for the government to provide basic housing for folks who are down on their luck. But maybe it should be more like military barracks than luxury housing.
Just read a story of a jail in Tx., had a recliner, and door locks on the inside. Let’s see, free healthcare, 3 hot meals a day, TV, internet access. Let’s let the criminals out, and put the homeless in jail….Bizarro world
i agree it should be barraks style or you just get everyone wanting a free place to stay. my friends family is a perfect example, live in thousand oaks in an apartment with a hud coupon, wife worked only enough to make sure they did not lose hud, son a druguser who barely worked over the years-then got on disability. dad and mom collect SS. so all three collect 3k or more in gov’t checks, but hud picks up 2/3 of their rent in one of the nicest areas of thousand oaks california. a place i can not afford to live. just a prime example of why gov’t systems don’t work, the son should be picking up trash around town as condition of collecting the cash…and i even think the parents should be forced to do some kind of charity work or something for getting 2/3’s of their rent covered. no one works in the house and then beg my buddy to fix their cars over the years! HUD should be using old military bases and just move all these people in barracs, why are they better than the homeless who live in shelters. i lived in a barraks in the military, better than living on the streets! oh, and the mom is a hardcore christian who watches the religous channel all day and preaches. I have no problem with religion just those who preach and are on the dole!
When did it become the guv’mint’s [meaning: taxpayers, meaning, my] responsibility to look after deadbeats who won’t look out for themselves? You want food and shelter? Do what the rest of the world has to and work for it. If you’re legitimately disabled or caring for someone who is, you get help. If you’re too mentally or morally defective to look out for yourself, or you burden society with the costs of illegitimate spawn that you crank out with no means of supporting, society has every right to make mandatory sterilization a condition of carrying your sorry a$$. The massive freeloading of the Great Society years needs to come to a screeching halt.
There have been some recent studies published (by otherwise liberal researches) showing that crime follows section 8 housing.
Where’s socialist exeter?
Anyway Reuven, I don’t need any studies showing crime follows section 8 housing. My parents’ neighborhood had section 8 put in ten years after my parents bought the house. Drug deals, murders, Hispanic gang fight on the front lawn outside my bedroom window. An unlucky guy across the street got his head shot off.
I was 19. I was impressed enough to swear off ever becoming a Democrat do gooder. The neighborhood changed significantly for the worse in just weeks. Thanks to LBJ.
Bill,
No question, the Democrats have done their utmost to gain a monopoly on power by creating and expanding as many new entitlement classes as possible, and facilitating the influx of millions of “Democrat on Arrival” legal and illegal immigrants. That said, the Republicans are no better. Big Business wants cheap, union-busting immigrant labor and the outsourcing of American jobs, and today’s GOP is working hand-in-glove with Wall Street to effect a massive wealth transfer (rip-off) from Main Street, while pandering to the same entitlement classes as the Dems. So let’s call a spade a spade: both parties suck. The idiots who continue to vote for “business as usual” have lost the right to complain about corrupt and incompetent governance.
Shhhh Sammy. Nevermind those little details.
Q: When you see a televised Congressional session, how can you tell who the Democrats are and who the Republicans are?
A: The Republicans are the ones thumping the Bibles. That’s the only difference.
Correct, Republicans are no better.
Republicans have expanded many middle-class entitlements to Federal employees, veterans (check out the roles of VA-disability sometime — it is a complete joke and a sickening ripoff of taxpayer dollars!!)
If you want to talk about people getting paid handsomely for sitting on their arses, there is the ultimate example. But, unless you’re inside the system (military or former military) and most likely participating in the rip-off yourself, you are probably not even aware of it.
Yes, entitlements come in all shapes and sizes, and they are used to purchase votes by both political parties…
I often wonder, how many homes that were done on the tv show extreme makeover are now dumps. They never go back and check to see if these people succeed. My bet is that at least 80% of these extreme makeovers are now in default. Building a house for somone that lives in a dive to begin with…ha…they’ll turn it into a dive real quick. people with no sense of responsibility do not deserve handouts. Just seeing what these so called deserving people lived in to begin with, tells me its feel good tv and just a big lie.
I always thought a great idea for a reality show would be to give some poor, deadbeat family with alcohol and drug problems enough money to have $1M after taxes, and follow them for a year!
It would not only be entertaining, it would show that giving money to people with “money problems” is as foolish as giving alcohol to people with alcohol problems.
See this article for some real-life examples:
http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/8lotteryWinnersWhoLostTheirMillions.aspx
“I always thought a great idea for a reality show would be to give some poor, deadbeat family with alcohol and drug problems enough money to have $1M after taxes, and follow them for a year!”
I’m an alcoholic and a crack addict and a single mother of 5! I volunteer to be the subject of this reality program.
I’ll stop drinking and smoking crack right now to show how serious I am!
Only problem is that I’ll show so much “improvement” in a year (money all saved, no longer using, 4 of 5 kids unable to provide grandkids since they were a couple months old) that they’ll start passing out money like a drunken Congress.
“Hollywood celebs are big into feel-good charities that do nothing to address the root causes of poverty, opting for band-aid fixes instead”.
More often than not out of other peoples pockets. Wonder why old Babs Streisand doesn’t build homeless shelters on her 40 acre spread? She’s got plenty of dough, oh I forgot NIMBY.
The college students I have at the rate of one course per semester are all extremely eager to “give back.” I always tell them to forget about reading to illiterate kids one day a year or scrubbing off “graphic urban art” one day a year until the grills are fired up and members of our news media arrive to document their noble efforts. I tell them to go give blood or to drop in at their local volunteer fire department. It may not be too glamorous, but the fire company will probably have some good work the students are capable of doing.
Celebrities have attained a higher state of being than either you or I ever could. They do not require the enriching/fulfilling experience of living amongst the homeless and feel that we could benefit from the experience.
Actually, watching the homeless over here in the park has taught me a couple of things. For one, if you ever find yourself homeless in a colder climate - do so near a grocery store where there is a steady supply of fresh cardboard.
+1,000,000
There’s the rub, Sammy. The original reasoning behind the volunteers in Habitat for Humanity’s “business model” was that people had to be volunteers on other people’s houses for a good long time before they got to the front of the line and people started to work on a house for their family. If you didn’t put in the time, you didn’t ever get to the front of the line. Celebrity volunteers, or volunteers who weren’t going to get a house were not part of the original model. Honestly, I see the extra volunteers as mostly a way to raise money from those volunteers and the people they talk to.
I wonder if it really has become a kind of volunteer ponzi scheme? There are clearly people who are really motivated to help build houses to get one of their own and will learn a bit about maintenance along the way. They would have been the early success stories. But a decade or two later, you are starting to dig deeper into the less motivated crowd. Perhaps they have lessened the requirements for volunteering before getting a house? Perhaps the extraneous volunteers (who later give money) are taking up the work that is unskilled and therefore what the future owners should be doing? It is hard to tell, but if I had to guess in the absence of additional data, that is what I would conclude. Fundraising can dwarf all other considerations in lots of charitable enterprises. They might have been much more successful if they had stayed much smaller.
We need some serious reform in our social programs and policies. One of my biggest pet peeves here in WA state is methheads receiving disability. They’re considered “mentally disabled”. Yet, there’s no drug testing. WTF?! To me, if you’re doing meth, you should NOT get benefits. Not are they milking us dry on welfare and disability, but they sell drugs, and burglarize houses, cars, stores- you name it. They produce nothing. I have nothing but contempt for these vile souls.
Actually, you can get SS disability for being depressed! Any woman can walk into an SSDI office, say “Boo Hoo! I’m depressed” and be set for life.
Wow really? I guess I better go try it out
“Actually, you can get SS disability for being depressed! Any woman can walk into an SSDI office, say “Boo Hoo! I’m depressed” and be set for life.”
Actually SSA is pretty strict on their allowance criteria for disability cases and re-evaluations are done periodically to check on one’s disability status. Besides, what do we do with the truly depressed/disabled widow across town? Throw her out on street? Tell her to “pull herself up by her bootstraps” then give her boots “without the straps?”
In regard to Habitat for humanity, some seem to focus on the reported shoddily built homes and “lazy” recipients connected with them. Fine. But should we shut the whole thing down based on the few “MSM reported” cases?
What’s the big picture here?
Are some of the houses under par? Yes.
Are some of the recipients lazy, entrenched with learned helplessness or anti-social? Yes.
Fine, but what about the BULK of the recipients?
IMO the bottom line is you’re going to have some folks that do not turn their life around no matter what you do (just look at the prison and street/homeless populations).
On the other hand, there are MANY WHO DO turn their lives around when given a leg up. I was raised by a (depressed and disabled) single mother and had to live off welfare and foodstamps a time or two as a kid when she was between jobs. We never “cheated” the system and certainly weren’t lazy (I eventually earned a Master’s degree). But I sometimes wonder where we would’ve ended up without welfare, student loans, etc.
Again, what’s the big picture here? Aren’t there bigger, more wasteful and inherently financially/socially destructive things to focus on?
I never understood how some (including MSM) feel the continuous need to berate social programs by focusing on a minority of “bad apple cases”–which from a financial and ethical perspective–are a miniscule joke compared to the likes of TARP, Madoff, Halburton (Iraq war) and the various other “Corporate Welfare” scams.
Just my .02
DOC
sorry, I just know too many people getting SSD or SSI who could be working. Getting disability is the slacker’s Holy Grail. If you can’t get it for mental disorder or dyslexia or depression, get fat and contract all the related diseases and get it that way. With SSD you also get Medicare and Section 8…such a deal.
Dr. Strangelove,
I believe in the “general welfare” clause of the Constitution, and in a reasonable social safety net. Greater efforts need to be made, however, to identify and help the truly needy and deserving poor and legitimately disadvantaged, as opposed to leeches, criminals, scam artists, and parasites, of which we are subsidizing far too many.
I’m not saying that there’s no such thing as depression. It even kills people.
But I also know blind people, people who use wheelchairs, people missing their legs, who have worked alongside me.
I really think disability should be for people who really can’t work.
Good post, Doc.
I think we need more of a carrot and stick approach to help weed out those who are just chronically lazy (yes, they exist).
OTOH, we spend far more money on military projects and pork projects than we do on welfare (not including Social Security and Medicare).
It’s funny whenever people mention raising taxes that “welfare queens” (never mention the welfare kings, BTW) become the target.
most of the recipients and their neighbors were ingrates who were poor for a reason: zero work ethnic or sense of personal responsibility.
This charity has not just unintended consequences, but poor consequences on the existing values of homes in neighborhoods where they are built. “There goes the neighborhood.”
“Some residents dismiss their neighbours’ worries. Diennal Fields, 51, said people did not know how to look after their homes: “It’s simple stuff: if there is mildew, don’t get a lawyer, get a bottle of bleach.””
Welcome to florida humidity.
I recall a poster on Patrick’s blog who said something like…”Florida is a big steamy turd that refuses to drop off the butt of the USA.”
DOC
I’m surprised than you are surprised.
Ever volunteer for anything? Than you know that there are always a few difficult and often plain old crazy people for whom you are working for. Also, just like in any human endeavor, things go wrong, but thankfully that doesn’t stop good organizations. Yes, mistakes get made - they are made all over the world every day by everyone - but mostly volunteers get good stuff gets done that people in the community are very thankful for.
Volunteer organizations know this and have plenty of ways of dealing with the good and the bad.
Just go volunteer for PTA, softball leagues, 4-H, Habitat for Humanity or any other organization and you will run into a few of these thankless people - each and every year. And each and every year, one of these people does something unthinkable - sometimes known bad behavior (like parents threatening umps at children’s games) or all new weirdness. Of course, these people get sexy coverage or are talked about by people who are not surprised - people who volunteer to help others are not surprised that some other people act badly. And in my experience, these squeaky wheels don’t get the oil because no one wants to jepardize the good.
And of course, sometimes people who are complaining about an organization make valid points and the organization learns or doesn’t learn and then get sued. Big deal - happens every day in every household and business and school and human endeavor.
Altruism is a power for good - always has been and always will be.
As is the norm, we just don’t hear as much about all the people who are thankful for volunteer efforts - they are the sane and good people - the majority of people - the majority of people helped by Habitat for Humanity are thankful. Communities are thankful for volunteers - they are a power for good.
And we often take for granted all the good that volunteers do - except people who volunteer - they rarely take other volunteers for granted.
I think this Habitat story is a age-old story that is getting too much play here.
As I said, I’m surprised that you are surprised.
I wonder how many of the complaining parties are not paying there mortgauge???
Right, and we should’nt let a couple of bad apples like Madoff and Fuld ruin a fine bunch of investment bankers and equity traders.
Howdaya like them apples?
This is the most ignorant, presumptuous, depressing thread I’ve ever read on this blog.
No kidding, but this is not a new phenomena…
Fed has abandoned monetary policy, critic says…
SAN FRANCISCO (Reuters) - The Federal Reserve has embarked on a campaign of unsupervised industrial policy to end the country’s financial crisis, a move that could undermine its independence, a former top U.S. official said on Saturday.
John Taylor, who was under secretary of treasury for international affairs from 2001 to 2005, said the explosive growth of the Fed’s balance sheet since September was “unbelievable.”
“This doesn’t really seem like quantitative easing in the sense of finding a growth rate in the money supply,” he told a panel discussion during the annual meeting of the American Economics Association.
“What you are looking at now is really being determined by other considerations. How much should we buy of mortgage-backed securities? How much should we loan to foreign central banks? This is really more like an industrial policy,” he said.
The Fed’s balance sheet has more than doubled in size to over $1.2 trillion in recent months as it has tried to shield the U.S. economy from the worst financial crisis since the Great Depression by supporting key credit markets.
This has included direct purchases of mortgage-backed bonds by the Fed and support for top-rated non-financial borrowers in the crucial commercial paper market, as well as hundreds of billions of dollars lent to banks on the basis of collateral.
“If you have a situation where the Fed is borrowing to invest in all these sectors it seems to me you have a huge governance issue…that demands a lot of thought,” Taylor said.
Taylor said the U.S. Congress has a legitimate right to demand a say in who the Fed lends money to. The outcome would be “radical reform” that would risk monetary policy independence, he said.
This concern was echoed somewhat by the president of the St Louis Federal Reserve Bank, James Bullard, who also took part in the panel discussion. He said the close collaboration between the Fed and U.S. Treasury in fighting the crisis could have unintended consequences.
“We are blurring the institutional arrangements a little,” Bullard said. “I am concerned about independence. Fed independence is very important,” he told reporters.
St Louis Federal Reserve is the maverick in the system.
They contradicted everyone else last year when they disagreed with the assumptions for the bank bailouts.
I do think it is alarming what the FED is doing, it’s easy to be smug and say “Well that’s the FED…” but this is unprecedented.
Fed independence is a joke in the era of the Working Group on Financial Markets.
And speaking of mavericks, Bullard’s predecessor (William Poole) came out quite loudly and clearly in the MSM earlier this year to correctly point out that the GSEs were bankrupt.
The Irish Economy’s Rise Was Steep, and the Fall Was Fast
Everything, it seems, has grown worse here. The recession started earlier and its bite has been deeper. Housing prices have fallen by as much as 50 percent. Bank shares have plummeted by more than 90 percent. Unemployment is approaching 10 percent.
Are we talking about Ireland or the USA?
Ireland partied a lot harder than the US. A lot.
C’mon, hozzie, let’s go party.
Italy, Spain or Ireland? Who pulls the plug on the EMU?
Party at Club Med!
Greece, Italy, France, Spain and Portugal - skip the boiled potatoes. I’ll have the bouillabaisse avec une boite du Coteaux du Layon. On the side some Époisses de Bourgogne served on Japanese rice wafers. The background music: Mlle. Edith Piaf.
“A loaf of bread a jug of wine and thou”
Party on dude!
Boite ou bouteille? Gourmand ou gourmet?
Got to love “The Rubiyat…”! My dad quoted that line the other day as we talked about what is really important in life. I felt like quoting Conan back to him (”To crush your enemy…”), but his pop knowledge only goes so far.
BTW — there’s a great song by Greg Brown that alludes to that line and is apropos to this eCONomy: “All The Money’s Gone”. Check it out if you like non-wuss folk music. (I know — oxymoron). I like Piaf, too, so perhaps you’ll enjoy Mr. Brown.
First day back to work tomorrow after the extendo-break, but I’ll be keeping an eye on the financial news…
Mr Bubble
Irish partied harder than anyone. The only reason Ireland is not in the same situation as Island is its EU membership. It’s countries like Ireland, Portugal, and Greece that make me very skeptical when it comes to the long term viability of EU.
Ireland has been deep in the commercial development for 10 years now. Big names built facilities there and much of the labor was from former Soviet bloc countries. I suspect Ireland has a boatload of pain coming.
How about Germany? Haven’t they been the powerhouse of the EU? Aren’t they tired of supporting the countries that have no money? What would happen if they decide to leave the EU?
I don’t know, but supposedly they are pretty keen on the descent of the dollar as the default currency of trade, and would like to see it go the way of the pound sterling.
A lot of the German export is to European countries. Mr. Joschka Fischer, ex-Minister of Exterior (Sec. of State), recently blasted Merkel for not doing enough, and reminded that after WWII, Germany was only able to prosper due to stable friendships with European neighbors. Not much leaning towards a ‘go alone’ route there.
Joschka Fischer it totally clueless when it comes to the German or EU economy. Btw, I haven’t noticed any sensible remarks about the financial/economic crisis from any well-known EU politicians. So, the EU will probably go the same way as the US, it just takes fare more time to play out.
Who pulls the plug on the EMU ?
I think Meridith Whitney said something the other day that the failure of the EMU was her biggest single concern…
Oh, and does anyone have an update on that Irish carpenter who bought a $900K condo in downtown Manhattan?
How’s that working out for him?
BWAHAHHAHAHAHHAHAHHAHAHHAHAHAHHAHHHHHHHH!!!
+25
He’s doing a lot of talking to a Jewish carpenter.
Is Germany the only EU participant that did not drink the Kool Aide?
The Irish are infamous for having spread the bubble to places such as Latvia, Estonia, and Hungary. Ryanair’s cheap flights couple with equity extraction sent these savvy Irish rovers east to buy up “cheap” property.
No … Germany had its own financial black hole, the reunion with former Eastern Germany. That is the only real reason that they don’t have a housing bubble like all other EU countries.
And I think the Dutch and Brits started spreading the bubble long before the Irish became involved.
From the article:
Developer Sean Dunne: “The Celtic Tiger may be dead and if the banking crisis continues I could be considered insolvent. But the one thing that I have is my wife and children — that they can’t take away from me.”
Judging by the photo included with the article (Dunne & his wife), I would be willing to bet that Mrs Dunne will soon be extricating herself from that marriage and going after Sean’s final pennies…
That was my thought, too — unrepentant trophy wife all the way.
Éireann go broke!!!
Also, someone needs to tell Dunne-derhead:
Brokey, brokey = no pokey pokey, an dtuigeann tú?
‘an dtuigeann tú’
Show-off!
Nice trophies.
Mr. Dunne, whose brazen deal-making and Donald Trump-like lifestyle epitomized the country’s euphoric boom, might be going bankrupt ??
And looking at that picture with his little “designer” wife in the background just brings a tear to my eyes….
I love you guys. I was thinking the same thing when I saw the picture in the NYT this morning! he he he.
Nothing like trying to buy a “second wife” twenty years your junior. They both deserve each other.
I hope there will be a groundswell of interest in the U.S. Constitution in 2009 as more Americans grasp the fact that political leaders don’t pay attention to it and have put the nation in jeopardy because of their carelessness.
This little YouTube video by Dr. Ed Vieira steers the viewer in the right direction concerning the national ByLaws, although the video quality is sub-par. Vieira on the Constitution
Vieira is a skilled attorney whose fame has come chiefly from his books, tracts, pamphlets, and lectures on the constitutionality of our present money system. NBC’s Meredith Vieira is his sister, whom we wish would book her brother on her “Today” show. However, we have a hunch her political leanings are far from those of her bro.
http://ca.youtube.com/watch?v=J7SpA2Qe3FM
RE: I hope there will be a groundswell of interest in the U.S. Constitution in 2009 as more Americans grasp the fact that political leaders don’t pay attention to it
LMAO…as exemplied by the denizens of NY who stand idly by as their governor goes about appointing a socialite dilitante to a US Senator seat purely based on name and celebrity.
I’m sure not gonna hold my breath.
I’d be more concerned with the Mayor trying to bypass the will of the voters so he can run for a third term.
measton:
here i will disagree wit you…..who better then Bloomerge a bean counter to have as a mayor in these times?
Mark Green ( who lost to bloomie) and whose brother Stephen bought Air America Radio so he can have an outlet for his views and a Job till the next election?
At least Stephen Green lost his shirt this year slg from 110 to 7 back to 24
http://finance.yahoo.com/q?s=SLG
“America Radio so he can have an outlet for his views and a Job till the next election”?
Oh yea, air America that was a smashing success! Those low life’s were stealing money from the boy scouts. Their problem was simple from the start, they do not understand the radio game. It’s about entertainment!
From what I’ve heard of Bloomberg I expect you’re right, but it doesn’t forgive the power play. The voters voted for term limits and he should listen to them. It’s the same theme as having a King. If you had one guy with absolute power and he was good it would be great for the United States, the problem occurs when he dies and his drunk son, or a corrupt politician who has played his cards right becomes king. Then you are screwed.
Ha, the ol’ benevolent dictator. You’re right everyone’s ideal gubmint, until he dies.
I hope there will be a groundswell of interest in the U.S. Constitution in 2009 as more Americans grasp the fact that political leaders don’t pay attention to it and have put the nation in jeopardy because of their carelessness.
Dream on. The sheeple have already shown their overwhelming readiness to trade liberty for the “security” proferred by Big Brother. The only candidate who ran on an avowedly pro-Constitution platform, Dr. Ron Paul, attracted the active support of only a tiny fraction of the electorate. It isn’t just “political leaders” (read: charlatans) who have put the nation in jeopary - it is the great mass of people who have no memories and no principles, other than an all-consuming desire for a life of ease and to accumulate material possessions by the most expedient means possible. It is hardly surprising that our “political leaders” are such corrupt and grasping mediocrities, reflecting the nature of the society that keeps returning them to office.
Oh I am fully aware that the odds are slim to none, the ignorance of the masses as to being able to grasp the rapidly deteriorating situation in our country is a damn shame. I long ago gave up on politicians they are in it for power and control. A greater group of thieving liars would be hard to assemble!
Amen. The truth is that politicians react on what the masses want and Sammy summed quite well what the masses want – freebies.
no groundswell will occur-they don’t care about the constitution. most don’t even know what it is if you asked them. i like that song that has “all the stupid people are breeding, all the cretains are creating” no sure who wrote it but at applys to the masses. I drove through some really shithole neighborhoods looking at houses lately, told my mom how many poor masses there are if you take a drive around any phoenix city. they are not the ones reading this blog and have no conception why “their” house is worth 1/2 it was 2 years ago and can’t get a home equity atm withdrawel to buy the latest big screen tv and new car!
i like that song that has “all the stupid people are breeding, all the cretains are creating” no sure who wrote it but at applys to the masses.
That’s “Flagpole Sitta” by Harvey Danger. Great song.
From second verse: Been around the world and saw that only stupid people are breeding;
The cretins cloning and feeding;
And I don’t even own a TV.
http://www.youtube.com/watch?v=1xzxDRA93Nk
Nice post Sammy…
J6P is going to be forced to live below his means by one of two ways:
1: He will have no incentive to increase his income since the government will tax him more. If he does decide to keep his high income, he will have less money to consume and invest, generating a vicious cycle of less jobs.
2: He will have an incentive to drop out and seek handouts, however little the handouts will be.
Having a far lower standard of living while government power increases significantly will generate a lot of anger and cries for a revolution against big government.
I agree Bill although I think the revolution is only something I can hope for…
“…That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.”
From the PA State Constitution:
“All power is inherent in the people, and all free governments are founded on their authority and instituted for their peace, safety and happiness. For the advancement of these ends they have at all times an inalienable and indefeasible right to alter, reform or abolish their government in such manner as they may think proper. ”
I read somewhere (can’t find the cite at the moment) that the PA Supreme Court had ruled that this only gives the *government* the right to change itself. But if the government were indeed altered/reformed/abolished, the existing courts would be pretty much out on their butts as well, right?
experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.
I read that paragraph from the D of I lots of times but until now, the phrase above did not register! Now my question is…how much longer will we suffer this grand scale theft from the productive to the voters and voting blocs?
Thanks (I guess)
“The sheeple have already shown their overwhelming readiness to trade liberty for the “security” proferred by Big Brother.”
Ouch.
If it’s really that bad, we’re going to have to start over, as was done with our country’s founding. Some committed group of people is going to have to emigrate and find some “off-the-radar” area of land and start a new country.
why did zistimates went up this week
A little early for cocktails, isn’t it sam?
Drinking $1 PBRs at a lame pizza bar (the only place nearby that has the game on) solo while reading the HBB during commercials and just LOLed at that one and got stares.
There has been a rather large increase of predictions for the coming new year. I have been reading them from the far left moonbats to the far right wingnuts and in between. Everyone has an opinion and we tend to latch on to those that line up with our own way of thinking.
Here’s one from a fellow many think is a nut, he may be I have no idea.
2009 Top-Ten List for Boys Crying Wolf…
Every year brings with it a fresh barrage from Spiro Agnew’s “nattering naybobs of negativity,” screaming about impending disasters that never seem to arrive.
For example, Gary North first showed up on my Apocalypse radar screen a decade ago with his endless screeds about how the “Y2K” computer glitch spelled the end of Western civilization. Mr. North seems to shout “wolf” of a different color each and every year.
And Gary North is not alone, though he has moderated his alarmism somewhat in recent years.
Global warming, the coming mini-Ice Age, Planet X, gamma rays, financial derivatives and so on. You know the drill. Well, maybe derivatives shouldn’t be in that particular list, come to think of it.
Just now, the sleeping Yellowstone “super” volcano is burbling well beyond normal, leading some to conclude that its overdue once-every-600,000-year eruption is about to wipe out most of the North American continent once again. Me, I think it is just the Reptiloids, who built their main Earth base beneath Yellowstone, up to no good once again. I swear that I think I have seen trucks full of pods on the Interstate. Come on now - what else possibly could explain George Bush, Dick Cheney and all their henchmen? Clearly, English is not Bush’s native tongue. No? Then you come up with a better explanation for the Bush Administration of the past eight years.
http://www.conspiracypenpal.com/columns/wolf.htm
States are facing a great fiscal crisis. At least 44 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.
Too conservative, methinks.
Numbers are going to be much higher.
This is the beginning of the end for the separation of state power from federal power. If you thought the conditions placed on road subsidies and public school subsidies used to get around constitutional restrictions were bad, then you have not seen anything yet. Any state that receives “bailout” money becomes a slave to the federal government.
The vast majority of the states that are currently resisting numerous federal mandates will have no choice but to cave or face bankruptcy.
So much for the completely absurd theory that everyone didn’t party in the absurd credit boom.
They all did, and now they’re all in the mess.
Dan, I’ve always appreciated your posts as my political leanings are very similar to yours. Thank you for bringing up this point - the separation of state power from Fed, and the large risk at hand with everyone looking to the Fed government to solve things - even the state governments.
It looks like we’re about to take a fall off a large precipice…
“The vast majority of the states that are currently resisting numerous federal mandates will have no choice but to cave or face bankruptcy”.
Yep, simply because the FED has the power of the monetary printing press, and they hold that big hammer over the heads of the states, and threaten to smash their skulls .
Please also add that many state constitutions require a balanced budget.
my state is dumping 150 million into the bay !
Got higher taxes/fees, fewer services and state layoffs?
Got deflation
What the FED giveth the states and private sector taketh away.
Paying more and getting less is DEflation?
The money needed is disapearing. That is deflation.
The resultant higher taxes/fewer services and state layoffs are the consequences of disappearing money, the consequences of deflation.
People spend more on taxes, and services previously covered and state workers loose their jobs. This leaves fewer dollars chasing the remaining goods. This causes those selling those goods to drop prices = deflation.
Again, cash rules, cash is king. Those who have cash get to call the shots, get to set the prices.
“Those who have cash get to call the shots, get to set the prices.”
I’ve seen some huge wishing-price cuts in the past week. From $2.5M to $1.1M (FL - unsold), from $1M to $535K (GA - just closed), from $729K to $395K (GA - just closed). All three builder-owned - I’m certain the two in GA were just about to go REO; I was puzzled that the percentage cut on them was virtually identical, but sales were to apparently unrelated parties. Honkin’ big, pimped-out houses - one went for $73/heated sq.ft., if you assume the 3-acre lot it is on was free (tax records valued the lot at more than $150K).
Get to call the shots and set the prices, YES!! Fiscal morality, is what I call it.
There it is. I’m looking forward to something similar happening to stocks.
P/Es at 5 or 6 sound about right.
P/Es at 5 or 6 sound about right ??
I then may actually purchase my first stock…
I had a decent chunk of cash I have been saving over the course of these bubble years. After the crash, I started a Vanguard account, putting in money when the dow was between 8300-7500. I put about half of my cash into a diversified portfolio consisting of :
Vanguard 500
Target Retirement 2035
Emerging Market Index
California Intermediate Muni
High Yield Corporate Debt (junk, small speculative buy)
Vanguard Value
I was reassured about doing this after read ‘4 pillars of investing’. I still have 1/2 my ‘powder’ ready to deploy when / if we retest the bottom, and my downpayment money is ready to go, outside this portfolio, in cash.
What do you guys think - am I too early? I was planning to continue dollar cost averaging. I figure buying at dow 8000 is better than dow 14000, even if we see dow 6000.
Am I a moron?
But what happens if/when “E” goes down the toilet? I clearly don’t know much about stocks, investing, or much else for that matter. But it seems that if the denominator gets crushed, then P/E shoots back up and we’re back to where we started. Am I way over-simplifying?
Bingo
Price is here and now
Earnings are in the past
state layoffs ??
yeah right…Since when…Never happen here in Cali…Furlough maybe….Hiring freeze for sure….Layoffs…..Not going to happen…Not in any meaningful way….You got the extra taxes & fees right though…
Just watch, scdave, you’ll be seeing it sooner than you think (this year, IMHO), and it won’t be pretty.
Fla. lawmakers to cut $2.3B from budget
By BRENT KALLESTAD
Associated Press Writer
TALLAHASSEE, Fla. — Florida legislators begin their search Monday for areas to carve $2.3 billion from the current state budget during a two-week special session brought on by the economic crisis.
Many Floridians, and certainly state employees, face painful cuts in a session called specifically to deal with lower than expected revenues. Florida law requires the state live within its means and lawmakers are required to have a balanced budget.
Their work will also be clouded by the ethical furor surrounding House Speaker Ray Sansom, who took a six-figure job at a college in his Panhandle district where he delivered more than $25 million in last year’s budget. The school got much more money than even much larger ones.
Florida is hardly alone in the revenue crisis caused by a yearlong national recession that has left other states in even more financial difficulty. California lawmakers face a $14 billion shortfall in the present budget year and anticipate that might triple in the next 18 months.
Florida lawmakers fear a deficit of nearly $4 billion in the next fiscal year that begins July 1, 2009, resulting in even fewer health benefits for the poor and more overcrowding in a state prison system that already houses more than 100,000 criminals.
How about firing some workers and cutting back wasteful spending to start?
Dude:
The problem is everyone works 9-5 and real Americans work all shifts.
So we need to time shift workers, to meet customer demands. If we adopted that kind of business model like McD ya notice they have a lot of workers on at lunch time…we can get better service with less workers.
But they will cut libraries, Summer park maintenance so kids cant play in them, or school bus service so parents will use their SUV’s to individually drive THEIR one kid to school. Car pool with an SUV???? not in today’s world.
I want balcony seats to that show! Hoooo Wheeee!
Well, The Land of Linkin is screwed, that much I know. Citing yesterday’s thread on those northern state guvs asking for Fed help - I will stick by my prediction that the RELATIVELY less encumbered Sun Belt states will recover first.
Yeah, yeah I know…the Great Lakes water supply. Sure, and anyone know of a good pipeline company I can buy stock in now?
Crooked Fl. politicians? who’da thunk? Land of Bernie Madoff, and second home to every national criminal that needs to shield assets in a house. 100K prisoners with full bellies,healthcare, and perfect teeth from the states taxpayers. …oh , I forgot the weightroom, and TV, wouldn’t want them upset ,or anything.
Sun Belt states will recover first ??
Anyone know much about Louisiana…I would be interested in learning more…
One of two states with falling population, city with the highest murder rate (by far) in the country, only state that doesn’t honor the Universal Code for Contracts, prone to hurricanes and flooding, and remnants of French culture include unusually stinky latrines, overpriced food, and the Bubba Oustalet car dealership.
Well Paul, I guess that just about sums it up for me…Thanks…:)
Stay AWAY from Louisiana. They make Florida look smart.
Unless you live in the Great Lakes Basin, you can’t touch its water. See Wikipedia:
http://en.wikipedia.org/wiki/Great_Lakes#Great_Lakes_water_use_and_diversions
Numbers are going to be much higher ??
Yep…..I think reorganization is a distinct possibility in Cali…They will attempt to tax their way out but it won’t work this time…The alligator has gotten to large…Revenue will continue to fall…Tax avoidance is in full swing…
Say goodbye to prop 13. Oh, noooooooo!!!!
Will Never happen…
From the 1/12/09 issue of Newsweek.
“Now Palm Beach, the watering hole of the East Coast upper class, is reeling with mansions for sale, the luxury stores on Worth Avenue empty, the magnificent charity balls canceled, and members resigning from golf clubs. The same plague is already affecting Greenwich, Connecticut, and next summer it will hit the Hamptons”.
One wonders how many more such schemes are waiting to be found out.
http://www.newsweek.com/id/177679
And to think, look how many roaches we’ve found by just turning on the lights a bit. Wait until someone starts lifting the carpet and rolling out the fridge.
Plus, the fact that the affluent are feeling squeezed ensures that this story will stay in the MSM for the foreseeable future. Consumer sentiment can and will fall further.
You need one gigantic mess before this is all over.
In 2002, you had Worldcom and Enron.
Maddox-icated Ponzi = Worldcom
What will be Enron in 2009?
I’m guessing Calpers. hozzie, vozzie, anyone have a clue?
A dash of quantitatve easing followed by monetization with unintended consequences brought about by selective default as a function of Foreign Policy mis-steps. Bond market failures followed by dollar crisis. Throw in 35+ US states, that cant fund obligations in the muni market, and the tinderbox wont even need a spark to blow up. Retail bankruptcy and liquidations will look like a blip on the radar.
Okay…Where’s the Hemlock….
voz,
“A dash of quantitatve easing followed by monetization”
Then I guess Alad’s faith in the precious was borne out.
A small allocation to the Precious is in fact insurance against such dire predictions, and I do own some actual gold. Coincidentally, I despise gold as much as I despise certain insurance policies which are fear based asset allocations.
Im tired, Im gonna go fishin for a few days and try to get my head straight. TV off, Internet off, river on….
Vozworth…”River on” where ?? I am thinking steelhead ??
I think you are going to need a much larger scrapbook.
Oh yeah,
I think Calpers is the big one. I’ve noticed you get lit bits of news about the bad investment choices Calpers has made.
lit=little
If I read correctly they lost 50 Bil over the last year or so…Even with their size (Now 180 Bil) thats a lot of dough to try to earn back just to get even…Some time ago I read that they need to earn 8% just to maintain the fund….I tnink FPSS may be onto something..It could be Calpeers…
Looks like a 22% loss so far…
Since July 1 its total investment portfolio has fallen to $185.5 billion, a loss of $53.5 billion, mostly the result of turmoil in the stock market and other non-realty investments. The decline is so steep that CalPERS says it might have to demand higher contributions from the state, municipalities and other government agencies that rely on CalPERS for their pensions. The increased payments would start in 2010.
I haven’t the faintest idea.
The usual suspects I reckon:
Citigroup, Bank America, Wells Fargone, JP Morgan
“It could be curtains!”
from the Musical: Music Man
Song: Wells Fargo Wagon
Citi et al have to roll over a lots and lots of commercial loans. It is possible for the Federal Reserve to buy them… but commercial makes the housing problem seem like chump change.
For every Maddox, you will find 10 egg cases.
“Now Palm Beach, the watering hole of the East Coast upper class, is reeling….
While I, much like Satan in Don McLean’s song “American Pie,” am laughing with delight, the day the music(al chairs) died.
I walked the length of Worth Avenue once, maybe ten years ago. Brooks Brothers was its version of K-Mart. Before that, I thought I understood conspicuous consumption and lavishness. I was waaay low. I don’t see how people avoid tripping when they walk with their noses so high in the air.
Worth Ave is beyond belief. There’s really nothing like it anywhere else I have ever been (LA is close). Where else can you see 30 carat diamonds in the windows of every 3rd store.
I live about 10 miles from it, and take visitors there all the time. They are always shocked; until you see it for yourself, you really can’t understand it. The wealth is beyond comprehension.
Since I’ve never been to Florida, how does Worth Ave. compare to Greenwich Ave. in Greenwich, CT?
My guess is identical/substantially similar?
I don’t understand where they all come from, but apparently many people are doing quite well. It boggles the mind.
What are you talking about? Virtually everyone on this blog is doing “well”.
If you were in cash, you are kickin’ the livin’ daylights out of your peers. If you were short, you should be out there hoopin’ and hollerin’ all day long.
Economics is a relative game not an absolute one, my good friend.
Yeah, but when they do trip and fall, look out below!
Current events, anyone?
I feel great I just paid the rent a day early and my landlord is so happy.
But i have a deep dark secret desire to have been a FB, so i could squat for a year or more and pay off all my CC and put money into my IRA before those nice people with uniforms and guns to toss us to the street.
I have a one friend that has lived seven months in a new house without paying a dime. Another friend claims to have moved out of their house and left their adult children there and have not paid for two years.
Sucks to be honest and behave wisely.
(* shamelessly blows own trumpet *)
Thought from downunder for the start of 2009.
While a little simplistic, it seems that the ozajh (actually just ajh back then) crash scale is holding up reasonably well as a distress indicator.
From the comments in http://thehousingbubbleblog.com/?p=1546 back in October 2006.
Soft Landing = Real median price decline,
Hard Landing = Nominal median price decline,
Category 1 Crash = 10% Nominal median price decline,
Category 2 Crash = 20% Nominal median price decline,
Category 3 Crash = 30% Nominal median price decline,
etc.
(Declines are from peak, and categories are from storm parlance. Assumes a statistical unit with enough sales to smooth outliers, such as a US county or larger.)
I must confess, though, I didn’t expect more than a handful of places to reach the etc’s . . .
I wonder how many, if any, of the TV talking heads read Ben’s blog back then. It’s fun (says he of the relatively full wallet) to go back and see how accurate the forecasts such as yours were, relative to those of the rest of the world.
The TV talking heads read what is on their teleprompter, i.e. whatever propaganda the media moguls and their corporate owners want them to shill. I’m guessing most of them, much like our 43rd President, don’t do much independent reading and even less independent thinking.
Wow… a couple of things caught my eye on that HBB page from October 1, 2006:
The Bits Bucket only had 124 entries. It’s been exceeding 300 entries on a regular basis for a long time.
Back then Professor Bear went by Get Stucco. (Please correct me if that’s not right).
Bwahahahaha!
http://boone.craigslist.org/reo/978428207.html
That needs to drop about 90%.
It will.
I like how craigslist has a “reo” directory even though it doesn’t stand for “real estate owned”.
$100K for a lot there looks a little high for me.
Hey that looks like a really nice plot of land. I’d pay at least $5000 for it. Maybe $7500.
$7500 is 7.5 times too much. Middle of nowhere, no services, no septic (cha-ching), no public water (cha-ching)…. WTF is wrong with people.
I’m with you on the land prices. They’ve gone completely insane. While I’m seeing some serious price cuts on houses, asking prices on land remain at some permanently high plateau. I suppose the owners have more staying power.
And they’ll be bled dry by taxation on non-performing wortheless dirt. It’s their funeral. For the life of me I can’t figure out why anyone would want raw land unless you’re farming but in that case 1000 or more acres is required.
Looks like just the kind of out-of-the-way place that will be used as an illegal dump by lowlifes who don’t want to pay fees to their local landfill or waste disposal site.
You think that’s bad? How about $500k per acre for raw land here in the Pacific NW?
How does this work with San Diego home values down by 40 pct or so from the peak?
Ex-tax chief gives his optimistic assessment
By Roger Showley, STAFF WRITER
2:00 a.m. January 4, 2009
Gregory J. Smith retired last week as head of the county assessor’s office, a job he has held for 25 years, to take a job in apartment management. John Gastaldo / Union-Tribune -
The new year dawns without Gregory J. Smith at the helm of the county assessor’s office, a job he held for 25 years until his early retirement last week.
But Smith, 58, did not leave before predicting what will happen to San Diego County’s real estate market in 2009.
“Generally speaking, I think we’re probably going to be approaching the bottom in ‘09,” Smith said in an exit interview in his first-floor office overlooking San Diego Bay at the County Administration Center. “Most people predict down in ‘08, bottom in ‘09 and start to rise in 2010.”
In line with those projections, Smith believes county assessments on nearly 1 million parcels of land will rise only 2 percent this year, the smallest year-over-year rise since 1996.
But that increase will still bring total assessments to $417.6 billion, more than double the $178.5 billion of 10 years ago and nearly eight times the value when Smith took office in 1983.
The assessments determine property tax receipts, approximately 1 percent of assessed value, for schools, cities, the county government and various special districts.
However, Smith said the slight valuation up-tick may not materialize if the economy worsens.
“The one big cloud is the recession, the worst on record,” he said. “If it’s a long, deep recession with high unemployment, all bets are off. Then we’re talking a continual slide on into 2010, whatever.”
Trying to maintain an optimistic view, Smith said foreclosures and defaults are not rising as they were for much for 2008, home sales are increasing, and nonresidential values have not been hit as hard. In the previous recession of the early 1990s, he said, all property types lost value in a long, steady fall that took about seven years to turn around.
“This time it appears to be much more accelerated,” he said, driven mostly by the failure of subprime mortgages when owners could not afford increased monthly payments.
Besides tracking the increase in property valuations, Smith also oversaw temporary valuation reductions, as provided for in Proposition 8 passed by voters in November 1978. It was an amendment to the popular initiative Proposition 13 tax measure, passed the previous June, to allow changes in valuations when market values decline.
In the last three years, Smith reduced values by a cumulative $8.7 billion on about 80,000 properties, mostly homes, just over 8 percent of all parcels and 2 percent of the property tax roll. That compares to the previous high of more than 55,000 properties in 1995.
These reductions come from both requests by property owners, due each year by May 30, and actions by assessor appraisers, who automatically reduce values in neighborhoods and condominium developments in line with reductions already approved. Last year there were 69,964 new reductions posted, two thirds requested by owners and the balance acted on by county appraisers.
In addition, property owners can appeal their assessments to the county Assessment Appeals Board by showing that comparable sales in their neighborhoods are below the value posted on owners’ tax bills. Last year, a record 40,000 assessment appeals were filed, up from 16,150 in 2007 and the previous high of nearly 27,000 in 1994.
“I think we’re probably going to be approaching the bottom in ‘09,” ”
He may be right here! We’re approaching it…but it may take 10 years to get there.
Aww, with that 2009 b.s. they’re just looking for the next wave of suckers to take a hit.
Those suckers are out there too, waiting for the whistle to blow so that they too can go “over the top”.
Better to wait until the enemy’s machine guns are out of ammo.
When you are in doubt,
predict a bottom next year.
Noone will doubt you.
I predict future economic reality will turn out “worse than expected” for these Pollyannas.
Some Forecasters See a Fast Economic Recovery
The New York Times
Leaders of a New York campaign to help the jobless in 1932. The unemployment rate is expected to peak at 8 or 9 percent.
By LOUIS UCHITELLE
Published: January 2, 2009
Economics as the dismal science? Not in some quarters.
In the midst of the deepest recession in the experience of most Americans, many professional forecasters are optimistically heading into the new year declaring that the worst may soon be over.
For this rosy picture to play out, they are counting on the Obama administration and Congress to come through with a substantial stimulus package, at least $675 billion over two years.
They say that will get the economy moving again in the face of persistently weak spending by consumers and businesses, not to mention banks that are reluctant to extend credit.
The average unemployment bottom from past financial crises has been 7% over the base low from the previous recovery. In the case of the US, the base rate was 4% thus the average would be around 11% unemployment.
I recommend this paper from Mr. Rogoff and Ms. Carmen Reinhart
“The Aftermath of Financial Crises.”
http://ws1.ad.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf
Dec 19, 2008
The conclusion is very succinct.
“An examination of the aftermath of severe financial crises shows deep and lasting effects on asset prices, output and employment. Unemployment rises and housing price declines extend out for five and six years, respectively. On the encouraging side, output declines last only two years on average. Even recessions sparked by financial crises do eventually end, albeit almost invariably accompanied by massive increases in government debt.
“How relevant are historical benchmarks for assessing the trajectory of the current global financial crisis? On the one hand, the authorities today have arguably more flexible monetary policy frameworks, thanks particularly to a less rigid global exchange rate regime. Some central banks have already shown an aggressiveness to act that was notably absent in the 1930s, or in the latter-day Japanese experience. On the other hand, one would be wise not to push too far the conceit that we are smarter than our predecessors. A few years back many people would have said that improvements in financial engineering had done much to tame the business cycle and limit the risk of financial contagion.
“Since the onset of the current crisis, asset prices have tumbled in the United States and elsewhere along the tracks lain down by historical precedent. The analysis of the post-crisis outcomes in this paper for unemployment, output and government debt provide sobering benchmark numbers for how the crisis will continue to unfold. Indeed, these historical comparisons were based on episodes that, with the notable exception of the Great Depression in the United States, were individual or regional in nature. The global nature of the crisis will make it far more difficult for many countries to grow their way out through higher exports, or to smooth the consumption effects through foreign borrowing. In such circumstances, the recent lull in sovereign defaults is likely to come to an end. As Reinhart and Rogoff (2008b) highlight, defaults in emerging market economies tend to rise sharply when many countries are simultaneously experiencing domestic banking crises.”
“Unemployment rises and housing price declines extend out for five and six years, respectively.”
That sounds familiar: Haven’t we been saying the same thing here pretty much since Ben started this blog?
“A few years back many people would have said that improvements in financial engineering had done much to tame the business cycle and limit the risk of financial contagion. Since the onset of the current crisis, asset prices have tumbled in the United States and elsewhere along the tracks lain down by historical precedent.”
One factor which may make the crisis at hand longer and deeper than expected: The shattering of a hubristic belief that modern safeguards and financial engineering made the global economy immune to severe financial crisis.
COVER REVIEW | ECONOMICS
That Sinking Feeling
Attempts to fix the U.S. economy have repeatedly backfired.
Reviewed by David Smick
Sunday, January 4, 2009; Page BW03
THE GREAT INFLATION AND ITS AFTERMATH
By Robert J. Samuelson | Random House. 309 pp. $26
THE RETURN OF DEPRESSION ECONOMICS AND THE CRISIS OF 2008
By Paul Krugman | Norton. 191 pp. $24.95
In 1975, when I first arrived in Washington to work as a Senate staffer, I was taken aback by a comment from the economist Arthur Okun at a congressional hearing. Inflation was then gaining momentum. Okun, one of the most distinguished U.S. economic thinkers, bluntly admitted that we don’t understand inflation — and never have.
Rarely before or since has Washington witnessed such humility about economic policy. Overall, the past five decades have been an age of economic hubris. In the 1960s, we sought to end poverty through federal spending. By the late ’70s, we thought that controlling the money supply could solve everything. In the ’80s, tax incentives were seen as capable of dramatically increasing the rate at which people saved. By the ’90s, it seemed to many that Alan Greenspan could fine-tune the business cycle out of existence by tinkering with the Federal Reserve’s interest rates. Now comes Treasury Secretary Henry Paulson, offering a new taxpayer-funded bailout scheme nearly as often as he changes his shirt. Almost overnight, it seems, we have become convinced that massive infrastructure spending can save us.
Also worth remembering that we have another 11% increase in the minimum wage coming on July 24, 2009, from $6.55 to $7.25.
The thing I like about Reinhart and Rogoff is they shoot from the hip — no porcine beautification in what they write.
I have some serious doubts about the benefits of porcine beautification efforts favored by certain top economic policymakers:
1) Do they believe their own optimism, or are they just trying to fool the masses?
2) When the masses are shocked at the point when things turn out “worse than expected,” will the crisis become more severe than it would have been with a more honest outlook?
3) Do top policymakers overestimate the potential for the optimal policy to forestall economic disaster? Isn’t it entirely possible even the optimal policy will not be up to the task?
Was Pollyanna a hooker?
Many economists are more pessimistic, of course. Nouriel Roubini at New York University, who called the 2008 market disaster correctly, wrote in a recent commentary on Bloomberg News that he foresees “a deep and protracted contraction lasting at least through the end of 2009.”
Even in 2010, he added, the recovery may be so weak “that it will feel terrible even if the recession is technically over.”
But Mr. Roubini is not among the economists surveyed by Blue Chip Economic Indicators. These professional forecasters are typically employed by investment banks, trade associations and big corporations.
They base their forecasts on computer models that tend to see the American economy as basically sound, even in the worst of times. That makes these forecasters generally a more optimistic lot than the likes of Mr. Roubini.
Their credibility suffered for it last year. They did not see a recession until late summer. One reason they were blindsided: their computer models do not easily account for emotional factors like the shock from the credit crisis and falling housing prices that have so hindered borrowing and spending.
Those models also take as a given that the natural state of a market economy like America’s is a high level of economic activity, and that it will rebound almost reflexively to that high level from a recession.
But that assumes that banks and other lenders are not holding back on loans, as they are today, depriving the nation of the credit necessary for a vigorous economy.
“Most of our models are structured in a way that the economy is self-righting,” said Nigel Gault, chief domestic economist for IHS Global Insight, a consulting and forecasting firm in Lexington, Mass.
‘…their computer models do not easily account for emotional factors like the shock from the credit crisis and falling housing prices that have so hindered borrowing and spending.
…
There is a psychological factor that Robert Shiller, a Yale economist, hopes will come into play.
“If we have massive infrastructure spending and people feel that it is working, it could create a sense that we are O.K. and people will go back to normal,” he said. “The real problem is that we are on hold. Everyone is.”‘
The problem with these psychobabble economics stories is that they ignore the existence of household budget constraints. Even if I feel happy as a clam, I am not likely to soon again start spending home equity ATM money like a drunken sailor if my home is 40 pct underwater on the mortgage loan principal balance.
Polyanna was gangbanged by the four horsemen of the Economic Apocalypse - Debt, Deleveraging, Deflation and Default, and is now reduced in her syphilitic state to giving handj*bs at the side of the road for cash.
No kidding. Budget constraints is right. Besides being shills for the PTB, they seem to think that J6P is THEIR personal ATM.
Yet J6P doesn’t get raises,(hell, he’s taking paycuts!) can’t have steady employment over his lifetime (gets laid off almost every damn decade) and has to cope with higher than official inflation.
So where is the money going to come from? The fairy f*#king godmother?!
Apparently some of the biggest names in macroeconomics are oblivious to the existence of household budget constraints. I thought big minds (e.g. Schelling) had long ago thought through the micro foundations of macro, but apparently not all received the memo.
“So where is the money going to come from?”
China?
For some reason, I doubt Jo Wang 6p is up to the job.
Agreed, but if J6P is getting treated so badly, then why did so many J6P go to such great lengths to get themselves into overpriced houses?
Shoot, if something/someone is screwing you the last thing you should do is get further involved. Nesting instinct be damned.
I just heard Shiller addressing the LSE and he expressed some frustration that Tim Geithner, who had refused to listen to any of his bubble warnings, will be moving up the Fed. He devoted part of his lecture to “groupthink”.
Not all economists are prostitutes paid megabucks to spread false cheer. Some are even true to the “dismal scientist” roots of their profession’s reputation.
Feb. crude ends up $1.74, or 3.9%, at $46.34 a barrel
Notion of fast U.S. recovery falls flat at parley
At annual meeting, economists see little chance recession will end in `09
By Greg Robb, MarketWatch
Last update: 11:16 a.m. EST Jan. 4, 2009
SAN FRANCISCO (MarketWatch) - The idea that the U.S. economy is going to recover in the next six months is given little credence at a gathering of top academic economists here over the weekend.
A pickup sometime after June is still the Federal Reserve’s quasi-official forecast. And leading institutional forecasters surveyed by the Blue Chip Economic Indicators are optimistic.
But that forecast seemed woefully out of touch to many experts who spoke at the annual meeting of the American Economics Association.
“People are getting nervous,” said Adam Posen, deputy director of the Peterson Institute for International Economics.
The actions by the Federal Reserve and Treasury Department have driven home the point that policy makers are at their wits’ end.
“We don’t know what to do. It’s really a throw-the-kitchen-sink-at-the-problem strategy. It is hard to argue with it in the middle of the crisis, but you can bet everyone will 10 years from now,” said Kenneth Rogoff, a former chief economist at the International Monetary Fund.
The Fed has indeed thrown the kitchen sink at the financial-market crisis, expanding its balance sheet by $1 trillion, to little obvious effect.
The Treasury Department’s management of the $700 billion rescue plan for the financial markets has seemed capricious.
And it may just be the first of several rounds of life preservers for the shattered sector, experts said.
Despite all these efforts, the U.S. economy, hit by an oil shock, a credit crunch and the global downturn, seems to be on a steep slide.
Some argue that the recession has just begun, despite the formal ruling by the business-cycle-dating committee that it began in December 2007.
Alan Blinder, a former vice chairman of the Federal Reserve, said the recession began only in mid-September when Lehman Brothers collapsed.
“We are in a horrible mess. I believe it is very young and it is going to be long and deep,” he said.
Ex-Fed governor says crisis more complex than 1930s
By Greg Robb
Last update: 3:16 p.m. EST Jan. 4, 2009
SAN FRANCISCO (Marketwatch) — The financial shock that hit the U.S. this autumn was bigger than a similar shock during the Great Depression, former Federal Reserve governor Frederic Mishkin said Sunday. The recent shock “is much more complicated” and the clean up will be difficult to do, Mishkin said. The Fed is in “experimental mode,” he said during a presentation to the American Economics Association. Mishkin said he was a strong supporter of the Fed’s recent move of cutting interest rates to range to zero and pledging to use unconventional monetary policy. “The Fed doesn’t want to be a deer in the headlights,” he said.
On the drive back from DC, I saw a deer crushed with its guts spilling out onto the highway. Quite a sight.
I now nominate it as the official “Fed Deer”.
From 60 minutes - Second wave of mortgage crisis to come.
The majority of subprimes reset in 2007-08. The majority of Alt A and option arms are expected to reset between 2009-11. It’s anticipated that 50%-70% of the options arm resets will defualt.
http://www.youtube.com/watch?v=t69-aqa3boQ
Funny, it isn’t news until the news media says it is news.
There is nothing new here. All this has been discussed at length here for several years. Now that the media is beginning to report it this “news” is going mainstream.
Where was 60 Minutes in 2005-06?
Right but it’s interesting to watch that segment anyway. And it’s interesting that now the MSM is starting to “get it.” That last guy interviewed says this real estate bubble burst is not going to be resolved in 6 months or 12 months. This real estate bubble burst is going to take 3, 4, or 5 years.
Most of us bloggers 2 or 3 years ago were saying 2012 will be the bottom in real estate prices. That guy is saying the Fall of 2012 or up to the Fall of 2013 will be the bottom.
I stand by my posts that staying mobile and saving like a monk in a diverse asset allocation plan will be the best approach an individual can take to handle the crisis. The longer you can dollar cost average into various assets, the more likely you will lower your average cost. Two years down the road I may be unemployed and I am not eligible for unemployment checks, although I pay into the system.
For now, I wonder if there is no longer a significant amount of construction and realtor jobs left to get rid of? As the Option ARM resets take significant effect in 2010 and 2011 there will be another severe drop in consumption, and the world economy will take more hits.
On the good side, that 45 inch HDTV you want will be selling brand new for under $200 at Costco in 2012!
These are going to be interesting times.
We bloggers just “think” that the savers are going to be squeezed more to bail out more businesses and individuals.
Is it right to assume that the American public is going to continue to watch and do nothing forever while politicians pledge higher taxes to give to the irresponsibile?
In a word, yes.
Look at various constituencies that make up the “American public” and ask yourself how “communist-leaning” and capitalist-leaning they are, i.e., how they would feel about a government takeover of the economy. I use the word “communist” in lower case, because although I feel it is the most appropriate word to describe government control of the economy, I realize it invokes the idea of Soviet Communism and Stalinism, which is not intended.
Blacks - pro-communist. (substitute “government control of economy” for “communist,” if desired)
Latinos - somewhat pro-communist.
Women - soft on communism.
Young people - pro-communist to soft on communism.
White males - anti-communist.
Remember, white males are only about 30% of the population.
Agreed. But some politically correct nut will probably call you a racist for telling it like it is.
And yet its those white males who got all the bailout money. It seems that those 30% anti-communists are on nobody’s side but their own.
“Is it right to assume that the American public is going to continue to watch and do nothing forever while politicians pledge higher taxes to give to the irresponsibile?”
Yes.
Most of the American public has been irresponsible so I say yes as well.
“The majority of subprimes reset in 2007-08. The majority of Alt A and option arms are expected to reset between 2009-11. It’s anticipated that 50%-70% of the options arm resets will default.”
I saw this on 60 Minutes. And the 70% default projection for the coming wave of AltA/Option ARMS was based on what they’ve already seen in terms of loans going belly up, not some hypothetical projection.
Get ready for the “nicer” neighborhoods to start to crumble, especially in bubble markets.
Here in the Bay Area, about 2/3 of home purchases during the bubble years were made with adjustable mortgages. I have to believe a lot of these folks will just walk….either they’ll be under water and unable to re-finance or won’t have the necessary income to re-qualify for a new jumbo mortgage or will decide their declining asset simply isn’t worth that big monthly payment.
If you looked at the Youtube video and lurked at some of the other related videos, you would find one of Comptoller General David Walker, interviewed on 60 minutes over one year ago.
It’s much more scary than the ramifications of option ARM and Alt-A resets.
I certainly don’t want to own any real estate in the U.S. and be a sitting duck for tax collectors asking me to cough up money to pay for bankrupt medicare and the interest on the federal debt.
Since I anticipate working in the U.S. at least another ten years I’m not planning to go off to Vanuatu with my wealth anytime soon. It leaves me with hording gold and investing in other inflation hedges such as Series I bonds, TIPS, and stocks.
looked at a house a few days back, already sold! it was for 40k but needed a roof, trees removed, interior was from 70’s so it needed a gutting to be nice. I think it was worth 40k, but not any more! then i looked at the latest foreclosure data on realtytrac and foreclosure.com..all i can say is wow. maybe 2 months ago i saw it was about 60k auction and bank owned properties, now 70k on realty trac. foreclosure.com shows 50k, not sure why the difference. i have followed a condo complex, mostly investors renting units, wow have the numbers gone up from 50 units to about 100 in a couple months. a realtor told me that was about a bottom in prices…i knew she was full of crap..she owned some in the complex! i wonder how many properties go to auction but are not listed for sale, could there be a huge shadow inventory?? time is on my side and i know a deal is coming my way…i think it is still way too early in phoenix with these levels of forclosures!
I have yet to find a no-fee REO/foreclosure site. Is there one? It would seem to be in the interest of the lenders to get this stuff as widely advertised as possible (as in, posted on a free site), except perhaps for the properties that are to be auctioned or otherwise sold as a bundle.
Try gov REOs
Fannie Freddy HUD ….
Muir - thanks. Tried Fannie and Freddie - Fannie had very few properties in the area I care about and Freddie offers nothing above $310K.
Along the way, though, I found an interesting post by Mike Morgan about hidden REO listings. I’ll put it in the Bucket tomorrow, since it’s very late now.
Another FB story for the HBB archives:
http://chicago.craigslist.org/nwc/hou/973297612.html
$1200 Family w/3 young children looking for 3BR house/condo (Lake Zurich only)
Family with 3 small children needs more space! Ideally we would like spacious 3BR house or townhouse to rent in the Lake Zurich(preferably Spencer Loomis) area. Would consider 2BR with finished basement area &/or bonus area (loft, den, office, etc..) Would prefer updated amenities like a dishwasher to make my life easier. I own a fridge, washer & dryer.
We have no pets.
Currently we are living with my parents and can be flexible with move-in dates. I can not guarantee immediate occupancy (like next day!) though because my husband has a full time job and I have three kids.
Looking to pay $1000-1200. I will consider a little more if the home is right.
We are also open to rent-to-own if the conditions are fair. We are eligible to buy a house in a year and a half. We are looking for a home, not just a rental and will treat your property accordingly.
*** maybe we can help out someone who can’t sell their house in this market right now. ***
Our credit isn’t perfect and we are trying to repair it. I had major health issues and we were foreclosed on BEFORE they were giving assistance to homeowners. Will offer up any information you need and my husband has had the same job for 12 years. I work at my kids school and also work at home.
Assuming they’re not trying to pull a sympathy/confidence scam here, these people are very vulnerable to getting ripped off.
Just the fact that they think there’s any “rent-to-own” deal that could possibly work in their favor makes scratch their head.
“Assuming they’re not trying to pull a sympathy/confidence scam here, these people are very vulnerable to getting ripped off.”
Well reasoned.
You go B.O. Problem is old Jessie will be coming along telling you… “Taint enough”
CHICAGO — President-elect Barack Obama and Congressional Democrats are considering major expansions of government-assisted health care insurance and unemployment compensation as they begin intensive work this week on a two-year economic recovery package.
One proposal, as described by Democratic advisers, would extend unemployment compensation to part-time workers, an idea that Congressional Republicans have blocked in the past.
Other policy changes would subsidize employers’ expenses for temporarily continuing health insurance coverage to laid-off and retired workers and their dependents, as mandated under a 22-year-old federal law known as Cobra, and allow workers who lose jobs that did not come with insurance benefits to be eligible, for the first time, to apply for Medicaid coverage.
The proposals indicate the sorts of potentially long-range changes that Mr. Obama intends to push in his promised American Recovery and Reinvestment Plan, as he named it in his weekly Saturday address on the radio and YouTube. They will be combined with one-time measures that are more typical of federal stimulus packages to jump-start a weak economy, like spending for roads and other job-creating public works projects.
As the economy worsened in the weeks after Mr. Obama’s election, advisers and Congressional leaders suggested that a stimulus plan would be ready by the new year for House votes this week. But the House is not expected to vote until next week at the earliest, which will most likely push final action into February, Democratic aides said.
The aides said delays were probably inevitable given the holiday interruptions, the big ambitions of the undertaking and internal tensions over the plan’s components and their costs.
In February I think I am going to fire myself and stop paying my bills, cause I think my standard of living would go up.
Let us know how that works out.
One guy I know has stopped paying his mortgage and credit cards and it`s working out pretty well for him, of course I am not sure if he is a legal citizen of the U.S.
Amen BO. It’s why he was overwhelmingly elected.
who pays for your health care? government? employer? yourself? other?
0 bets it’s you.
Today’s _Times_ has an interesting article about a new type of job: people who live-in houses that are up for sale to keep them in perfect shape for showing.
http://www.nytimes.com/2009/01/04/realestate/04zone.html?ref=business
I think paying rent on a place that is for sale is a rip off. The home owners should be paying you, or it should at least be free. We once did this for friends, nice house, nice neighborhood and we were in transition. We paid our utilities and that was all. The house sold faster and was safer because we were there. But I would never pay, even a small rent, to live like that.
You see I really am whacked!
Sarah “The Barracuda” & Jeb “I made Florida Great!” Shrub II 2012 !!!
“…Former President George H.W. Bush said his son Jeb should run for president and blasted the New York Times for its grossly unfair criticism of another son, President George W. Bush.”
Joe-the-Plumber should have about x3 plumbing franchises in Arizona by that time!
BWAHAHHAHAHAHHAHAHHAHAHHAHAHAHHAHHHHHHHH!!!
http://www.foxnews.com/politics/2009/01/04/bush-jeb-bush-president/
Jeb’s running is so predictable it isn’t even funny.
The two parties have the public all a’tizzy - running from one extreme to the other trying to find nirvana. In 2002 they gave a blank check to fight terror because they were afraid of every shadow. In 2008 they felt a financial pinch and now want a new New Deal.
Meanwhile the two party’s contributors are running away with the store. Once and while they just have to wait a few years until they each get their turn.
“Meanwhile the two party’s contributors are running away with the store. Once and while they just have to wait a few years until they each get their turn”.
Bingo! But 98% of the voters don’t and can’t see it. The system has them right where they want them, and behind the scenes they are high fiving each other, while they count their contributions!
Sad part is the mainstream voting retards have put a Bush or Clinton in for the last 20 years and now the dumb asses vote in a Clinton part 2. B.O. has damn near everyone from the old degenerates team on board. So it’s not hard to envision the outcome!
And you’re gonna love it!
Amen to that. The sheeple’s complete inability to learn from their previous voting mistakes never ceases to amaze me.
Actually, you forgot that Bush Sr. was V.P. under Reagan, so technically, a Clinton or Bush was in the White House — in one form or another — for about 28 years. Then, we have Hillary as Secretary of State…
LMAO>>>>>>
You can’t get any better entertainment than the retardicans. Unbelievable.
4 years from now just the word “Bush” will send chills up the spine of most voters…
Why wait 4 whole years? I’ll go ahead and get chills right now. ‘Bush’….*shudder *
If Jeb can do for the national economy what he did for the Florida economy, then I guess he is at least as well qualified to destroy the country as W was.
Great point. Exactly what good did Jeb do for Florida?
Being a Floridian pretty much guarantees I know a number of people who work(ed) in the real estate business. Seemed like every other person had a license at the peak. Anyway, one of the ones I know told me that the number of agents who renewed membership in their association dropped a lot, just now. I guess Jan. 1 is renewal day - said several people they know personally and/or worked with are out of the business. All that surprised me is that it took so long.
Palmetto and Wizard - thanks for your replies yesterday re Chinese drywall. Does anyone know a for-sure way to determine if this stuff is in a house that you’d otherwise be interested in? I wonder if inspectors are being trained to figure it out. Not likely a re-seller would know unless it is stinking or corroding the copper.
Ironically, this reminds me of a builder’s rep who told us last year that they proudly use copper water pipe instead of PVC. Copper pipe can be a problem here in Florida because of a reaction (forgot the technical term) with certain types of soil. As I recall, most of the problem occurred in houses that were built on former citrus groves. The copper pipe broke in the pad of my parents’ house and almost ten years later in a house that we had owned. Running plastic pipe through the attic in Florida sucks, because in the summer it is scalding how when you first turn on any tap.
scalding how = scalding hot
Not sure but you could ask a testing lab….Same type of lab that would test for asbestos…Very inexpensive…I get samples tested for about $40.
Good start - thanks.
These tools are advertising on the radio “the need to keep home prices from falling any further.”
http://www.fixhousingfirst.com/
They have been running their pathetic commercials here in S.C. every 15 minutes. Sad & poorly written designed to capture the mind of a 5 year old.
“We can’t plan our future, because we don’t know what the value of our house will be” kind of crapola!
Wow. You really have to check out their site. What’s really scary, is the govt will listen to these a$$holes, instead of the people who were right all along.
Yellen says economy risks “grim outcome”January 4, 2009 1:21 PM ET
“The financial and economic firestorm we face today poses a serious risk of an extended period of stagnation — a very grim outcome,” said Janet Yellen, president of the San Francisco Federal Reserve Bank.
“If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now,” Yellen said in remarks prepared for the American Economics Association’s annual meeting in San Francisco.
Yellen said she was skeptical about suggestions for broad-based, permanent tax cuts and instead urged “spending on goods and services with higher rather than lower social value.”
Already bogged down by a year-long recession, Yellen said the United States faces a rising risk of deflation, or a persistent decline in prices that could cause consumers to delay purchases, dragging down the economy further.
“With an extended period of abnormally high unemployment in the forecast, it is increasingly likely that inflation will fall to undesirably low levels,” she said.
That, in turn, would risk pushing up real interest rates as inflation expectations decline at a time the Fed has already reached the “zero bound” on official rates.
Yellen said the trigger for the current recession, the eruption of a severe financial crisis, suggested U.S. growth would remain weak “for an extended period.”
“The current downturn is likely to be far longer and deeper than the ‘garden-variety’ recession in which GDP bounces back quickly,” she said. “Many forecasters expect this to be one of the longest and deepest recessions since the Great Depression
How many more months until “longest and deepest since the” gets changed to “longer and deeper than the”?
I suspect Yellen wants it “longer and deeper.” She must like the spice channel, and I’m not talking basil or paprika.
Oh so that’s she means about ‘pulling out’ all of the stops!
Depends, a new batch of script writers move in on Jan.20th. They’ll parade out a slew of retread ideas designed to bring ‘hope’ to the masses.
And the masses will fall for it hook, line, and sinker, just like they always do.
Yer just grumpy. Stop it, man! Sure, it’s all sucktastic, anyone with eyes can see that, but look at all the lovely things you got anyway. You just barely bragged about your lovely wife and kids, and spring is coming in a few months…I say, drink some beer and cheer the fook up.
Yea. ‘Ol Janet says we may have to pull out “all the stops” now what may they be? I can’t wait to hear, I thought ‘they’ were doing that right now.
Link ??
So, just what are all the stops?
“It’s worth pulling out all the stops to ensure those outcomes don’t occur,” she said.
Fed’s Yellen Supports ‘Substantial’ Economic Stimulus (Update1)
Jan. 4 (Bloomberg) — The U.S. economy faces a “serious risk” of stagnating for an extended period of time and “it’s worth pulling out all the stops” on fiscal stimulus, said Federal Reserve Bank of San Francisco President Janet Yellen.
“The current downturn is likely to be far longer and deeper than the ‘garden-variety’ recession,” Yellen said in the text of a speech today in San Francisco. “If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now.”
Yellen’s remarks indicate that support for new stimulus to revive the economy is gaining momentum within the central bank. Chicago Fed Bank President Charles Evans endorsed such policy yesterday, following Fed Chairman Ben S. Bernanke’s lead in October.
“Although our economy is resilient and has bounced back quickly from downturns in the past, the financial and economic firestorm we face today poses a serious risk of an extended period of stagnation,” which may intensify financial-market conditions, Yellen, 62, said during the annual meetings of the Allied Social Science Associations and the American Economic Association.
“It’s worth pulling out all the stops to ensure those outcomes don’t occur,” she said.
Last month, Fed policy makers reduced the federal funds rate, or the rate banks charge one another for overnight loans, to as low as zero for the first time in an attempt to end the longest economic slump in a quarter-century. The central bank is also shifting its focus to the amount and type of debt it buys, with announcements of new lending programs or asset purchases serving as the principal signals of policy.
LMFAO…. Looks like one of B.O.’s fantasy team members is pulling out. Now he can go back and grow a bread and be cool again. Just another f-ing crook.
WASHINGTON (AP) - New Mexico Gov. Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama’s commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state contract.
Richardson’s withdrawal was the first disruption of Obama’s Cabinet process and the second “pay-to-play” investigation that has touched Obama’s transition to the presidency. The president-elect has remained above the fray in both the case of arrested Illinois Gov. Rod Blagojevich and the New Mexico case.
A federal grand jury is investigating how a California company that contributed to Richardson’s political activities won a New Mexico transportation contract worth more than $1 million. Richardson said in a statement issued by the Obama transition office that the investigation could take weeks or months but expressed confidence it will show he and his administration acted properly.
“I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process,” Richardson said. “Given the gravity of the economic situation the nation is facing, I could not in good conscience ask the president-elect and his administration to delay for one day the important work that needs to be done.”
Richardson said he will remain as governor and told Obama, “I am eager to serve in the future in any way he deems useful.”
The announcement came ahead of Obama’s Monday meetings with congressional leaders on a massive economic recovery bill he wants lawmakers to pass quickly.
Obama said he has accepted Richardson’s withdrawal, first reported by NBC News, “with deep regret.”
bread=beard
Apparently, if the contributor is a bank, conflict of interest doesn’t exist. Otherwise, we’d have no government at all.
There have been pay-to-play stories about Richardson for years. He was just more subtle than Blago-boy. But it’s not just Dems, plenty of Repbus now in jail for the same thing. It’s easy to throw our hands and say we should throw them all out. Maybe this culture of corruption is inescapable. Makes me wonder how many of us would be caught up in it too.
Anyway, it appears that Richardson is willing to fall on his sword for the Messiah. I suspect we’ll see more of this in the future.
I can’t wait until this comedy troop pulls into town, Obamarama is going to be one gaff after another! I look forward to watching it all unfold.
Prez-Elect Makes New Pitch, Promises on Job Creation — Including 600,000 New Government Employees
January 03, 2009 9:52 AM ABCNEWSBLOG
In his radio address today, President-elect Obama uses some new language when discussing what he wants the stimulus package to achieve in terms of jobs. First off, he has a name for the package — the “American Recovery and Reinvestment Plan.”
The president-elect says he wants to “create three million new jobs” — this is a change from a few weeks ago, when he said he wanted the plan to create OR SAVE two million jobs.
He says the “No. 1 goal of my plan … is to create three million new jobs, more than 80 percent of them in the private sector.”
If you do the math: 20 percent of three million means 600,000 new government employees.
Yeah, and they’ll probably define “private sector” to include Fannie, Freddie, the Post Office, etc., since you’re not working *directly* for the gov’t.
(I did a brief consulting assignment for Fannie Mae in the 90’s, and they loved the word “private”, they were always going on about how they were a private co.)
I, for one, would much rather see more govt jobs than have our money spent buying up worthless financial paper and foreclosed properties.
Be not mistaken, what we are heading for is very bad, IMHO, and we will need some govt intervention to soften the blow. If we force everyone into unemployment, there would be some very severe financial and social consequences.
Methinks economies of bail are negative for Megabank, Inc, as well, but bailout monies rammed down their throats under the optimistic assumption that something good will eventually come out the other end have obscured this point.
Financial Times
Credit squeeze hits larger companies hardest
By Richard Milne in London
Published: January 4 2009 19:03 | Last updated: January 4 2009 19:03
Large companies in Europe and the US are having the terms of their credit facilities tightened more quickly and more severely than smaller companies – in contradiction of received wisdom.
Surveys by the European Central Bank, US Federal Reserve and Germany’s Ifo economics institute all show banks tightening their lending criteria most for the largest companies.
What are the long-term effects of a bailout policy which rewards corporate behemoths for managing to grow to a scale of operation that threatens to crash the global economy if they are not bailed out? Many more supersized corporations operating with negative economies of bail.
US Treasury sets out rescue framework
By Krishna Guha in Washington
Published: January 2 2009 23:43 | Last updated: January 2 2009 23:43
The US Treasury set out for the first time on Friday a basic framework it uses to evaluate whether a troubled financial institution is systemically important enough to justify emergency aid.
The criteria were contained in reports to Congress under the Emergency Economic Stabilisation Act, which created the $700bn bail-out fund. The criteria were disclosed amid pent-up demand from investors for greater transparency and predictability on the approach to financial rescues.
I define economies of bail as the net present value of a corporation’s future profits, adjusted to subtract the actuarial liability to taxpayers for free bailout insurance coverage.
http://www.thestreet.com/video/10444179/if-obama-wins-economys-doomed.html
Peter Schiff, too, hopes that in four years the general public will have enough of the next Jimmy Carter (January 20 2009 to January 20 2013).
I like Peter Schiff. The way I’m going to play this is I expect the stock market to go up for at least the first half of 2009 as the trillions of dollars keep banks from going out of business. ‘
I see no fundemental improvemnet or any new kind of technology so when the trillion gets spent on ineffcient government programs and bad companies that should fail then another stock market crash below the recent lows of Nov 2008. Maybe 2010 -2012 a market bottom. If its a dollar crash then RE will do well and the FED will get its wish. If its more Deflation I expect the FED to continue to sell treasuries and use the money to try and increase money velocity through the economy.
Would be great for my company stock to go up through May. I’m a little low on gold!
In four years, yes, no significant improvement in technology. Any improvement will be like the Segway. I remember reading something about the Segway that it is very revolutionary. Words don’t do it justice how it was hyped. Any new tech stuff the next four years will be overhyped.
It’s extremely disturbing that Keynesianism is back, alhough it was long discredited.
What did Santayana say about history?
One thing that would make Harry Dent wrong in his 2010 Depression forecast is if America allowed more liberal educated immigration requirements to people in their 20s.
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=11356182&src=finance&ch=1316259
But we certainly would be nuts to open the floodgates to uneducated people, as John McShame and Ted Kennedy worked hard together for.
Bill
What about us AMERICANS who cant get a job because we are smart bright on the ball, and read this blog a couple of times a day?
I have never seen so much discrimination against smart people in my lifetime.
It seems without population growth the economy doesn’t work right . Or in other words without growth where’s the inflation that Debtors need to manage their wealth.
Immigration open to young people from all over the world educated so they can earn enough to buy a house etc may help home prices. Might cause more deflation in wages though just like H1B engineers keep wages lower for big Tech companies?
I think the USA will move to protect jobs and limit immigration thats what happened last time in the 1930’s.
Every good ponzi scheme needs a new wave of recruits on a regular basis, otherwise the scheme falls apart…
Speaking of immigrants, who’d've thunk that making no doc, no downpayment subprime loans to Jose Sixpack would result in a wave of foreclosures in the Hispanic community?
Wall Street Journal
* REAL ESTATE
* JANUARY 4, 2009, 10:35 P.M. ET
Housing Push for Hispanics Spawns Wave of Foreclosures
By SUSAN SCHMIDT and MAURICE TAMMAN
California Rep. Joe Baca has long pushed legislation he said would “open the doors to the American Dream” for first-time home buyers in his largely Hispanic district. For many of them, those doors have slammed shut, quickly and painfully.
Mortgage lenders flooded Mr. Baca’s San Bernardino, Calif., district with loans that often didn’t require down payments, solid credit ratings or documentation of employment. Now, many of the Hispanics who became homeowners find themselves mired in the national housing mess. Nearly 9,200 families in his district have lost their homes to foreclosure.
Cash-strapped Garden Staters resorting to shop-lifting?
What else is new in Joisey?
“Leading retailers revealed an 84 percent increase in amateur shoplifting in 2008.”
http://tinyurl.com/7gnbad
(The NJ Courier Post)
Retailers across the country are reporting a rise in shoplifting and officials are attributing a portion of the increase to cash-strapped amateurs.
“There is a small group of consumers that are making the wrong decisions when they are faced with these financial difficulties,” said Casey Chroust, senior vice president of retail operations for the Retail Leaders Industry Association.
A survey by the association of 52 of the nations leading retailers revealed an 84 percent increase in amateur shoplifting in 2008.
“There has been an inverse relationship between this increase in shoplifting and the economy,” Chroust said. “As the economy has gone down shoplifting has increased.”
Chroust said retailers have noticed more shoplifters stealing smaller items for their own personal use.
The survey also reveals that 80 percent of the retailers reported an increase in organized shoplifting rings as well.
Lt. Bill Kushina of the Cherry Hill Police Department believes organized crime has played a significant role in the marked increase in shoplifters the township has seen this year.
The department made 361 arrests for shoplifting in 2007, he said. The number soared to 658 by Dec. 14 in 2008. Kushina estimated the final number for the year would be around 700.
Asian Stock indices (Monday) are up, mostly 2% around 9PM California time…Headlines show some indices at 2 month highs, reacting to taxpayer bailouts in the U.S.