Bits Bucket For January 31, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Warning: Rant ahead
Note: This is a discusion of marginal tax rate, not effective.
I did my taxes last night. I think I’m literally the highest marginal rate possible without getting hit with the double taxation of both corporate tax and income tax.
My wife and I combined are in that income range above $110K-$115K where the child tax credit and student loan interest phase out.
So,
25% marginal
5% lost child credit
2% (8.3% x .25 approx because there is some rounding) lost student loan interest deduction
7.65% social security+Medicare
7.65% social security+Medicare employeer match that directly reduces my wage
Total: 47.3%
Okay, okay. It could also be worse if I were also having other deductions like medical expense (7.5x.25 =1.875% effective rate) and work related expenses(2%x.25=.5% effective rate). And there are other credit phase outs, but I wouldn’t be in the phase out zone for all tax credits.
Yes, there are higher brackets, but long before I got to them, I’d have fully phased out the child credit and the student interest deduction. In fact, if I made $21K more (me, not my wife), I’d break above the Social Security witholding, and my marginal rate would virtually fall in half…
25% + 2×1.45% = 27.9%
Of course, this is just federal. Adding on state gets complicated. AZ is a low income tax state, so we’re only in the 3.36% bracket. Of course that is only on the 68% I have after paying federal income tax. So, it is really 2.28% marginal. But, then that becomes a deduction on federal so I get .57% of that back… Call it 1.7%.
Right at 49%.
If I get $1 raise, it actually costs my employeer $1.08, and after tax I get to keep $0.58.
WHY, oh WHY, does the government not want me to go make that extra $1????
And, this isn’t even all the taxes. Sales tax on the $.58 when I spend it is anohter $.04, unless I send it on gas, alcohol, cigarettes, etc. Then it would be even more.
So, 1 simple question… Why do the deductions and credits phase out just when you get to the income levels where you really need them?
Oh yeah, because they can. Most people simply can’t afford to pay taxes and live on their tiny income. So, those that can afford to pay taxes have to pay our share and their’s too.
Rant off….
Looking just at effective rate, I’m actually only paying about 17% State and Federal income tax + 7.65%x2 payroll. Call it 32%. Add on other taxes and it is probably another 5% effective.
37% effective is soooooo much better than 50% marginal. NOT!
I have a small business, structured as an “LLC”. If Barack Obama succeeds in uncapping Social Security I’ll only get to keep 34 cents of every additional dollar I earn. (State, Federal and Payroll tax)
Now, do you think people in my position (a LOT of small businesses) would bust their butts trying to grow their business to give up 66 cents to half-baked government programs, or will they take it easy, take on less work, just so they have enough to cover their bills? (I can live on very little, thanks to a paid-up house, and a 4-block commute.)
Take a guess which route I’m taking.
It’s business like mine that provide a lot of jobs overall…
How does that work???
Is it the double tax of corporate than personal income tax?
Personally, I think we should get rid of corporate tax. Just charge income tax, and treat ALL income (except short-term capital gains that get taxed higher) as income regardless of source.
Bulls and Bears on Faux News this morning were ranting about how the top 10% pay 90% of the taxes… Okay, simple solution. Let’s enact laws that will push up wages on the lower 90% and will kill the earning power of the top 10% so that they tax payments are more equal.
The upper middle class are the sweet spot. They have enough money to tax, but not enough to sway politicians, and their numbers are small enough that their vote can be marginalized. There are tax breaks and give aways to the poor middle and top 1% but the upper middle class get screwed. I worked in a conservative town for a long while, physicians there loved the dividend tax breaks and getting rid of the inheritance tax. Then I would ask how much they made in dividends and point out how much they lost with AMT. I’d point out how unlikely it was that they would be affected by the inheritance tax. Nothing but blank looks.
This is exactly where we’re at too. I think it all comes up to about 50% considering we live in California. No wonder after the 401 K contributions we’ve been unable to increase our regular savings in a long time.
It isn’t because of double taxation. LLCs are taxed as partnerships which are pass through entities. Reuven just makes boatloads of money and is in a very high tax bracket. Not sure if I really believe the 66% without hearing the breakout, because he is definitely in the range where social security phases out. He may not be doing a pure marginal rate analysis.
If Obama succeeds in UNCAPPING social security as he promised, then it gets there:
39% fed + 11% state + 15% social security to start with
By the way, to all the people that are thinking about taking time off to live off their savings if taxes go up or at least hold back on picking up new business - did it ever occur to you that this is a good result for the overall economy? If you stop working, then there is room for somone else to step in and take your place? You spend out of your savings to support yourself. Someone else (evidently less skilled or connected than you because they can’t take your work when you are in the market, but not entirely unskilled) gets your business, earns money and supports themselves and their family. Theymight pay less in taxes if they are at a lower marginal rate, but they will pay some and they will be able to pay rent, buy stuff, generally particpate in the economy.
You are effectively creating jobs by taking yourself out of the economy. Thanks on behalf of the other people who need your job more than you do. This doesn’t work in an economy with a shortage of labor, but that isn’t where we are right now. Enjoy the vacation.
So you are doing your analysis based on a proposal that hasn’t even made it into a bill in front of Congress yet? And one that isn’t even in the first round of priorities?
Why not calm down and complain about things that have already happened or are really may happen soon? There will plenty of time for you to rant about the unfairness of paying taxes on your hugely profitable business when the idea actually makes it into a bill and is in front of a Congressional committee.
oh polly, you’re GOOD.
BTW, that canard about the top 10% paying 90% of taxes is an outright lie and is easily debunked with the IRS’s, Census and GAO’s own websites.
and don’t forget the amount of common resources/services/infrastructure/etc is used to protect/defend/etc those wealth/properties/etc. and then compare that to me. why do you think i should pay the same rate as them?
Great post, Polly!
Reminds me of a story I read about Swedish income taxes many, many years ago. The story was about a shortage of doctors and the example given was that it was far more beneficial to a doctor’s finances to go and paint their own house than to work the extra amount of time it would require to hire a painter.
Sort of like tooth decay, I guess. Takes a long time and continues on its own, without intervention.
and if you live in California, you get hit with high state taxes, high sales tax.
i work in an industry that affords me the opportunity to deduct a large variety of items as business expenses - but I always hit that f***ing alternative minimum tax, too.
sigh….
Been there done that. It is more than frustrating to know just how much of each individual additional dollar is gobbled up by the state (meaning government). Don’t forget to add sales tax.
OTOH, I just did a run-through (still awaiting one 1099 form) of my 2008 taxes and we’ll be comfortably in the 10% bracket. With a paid-off house and no debt you can really live cheaply. However, we may hit the 15% bracket when mandatory IRA distributions begin in a few more years.
Oh, and zero state income tax again. South Carolina treats its retirees well.
However, we may hit the 15% bracket when mandatory IRA distributions begin in a few more years
Bill, have you looked at doing an in-kind distribution on your IRA? Instead of selling securities, funds, stocks, or ETF’s, you can transfer them directly to your regular brokerage account and because the value is probably lower than it was last year, it will reduce your tax burden.
Bill - I just read something about a relatively new tax in SC: point-of-sale or something like that. Don’t know what it is, but the article implied that the tax is turning off a great many people from buying houses in that state.
Chip, I am unaware of any recent changes to the taxes or fees charged by the state for a real estate purchase. Perhaps one or more counties has instituted something like that.
Bill - I’ll try to find the article and post it. Dealing with hospice issues at present, so am posting and responding sporadically.
“Dealing with hospice issues at present, so am posting and responding sporadically.”
Ahhh Chip. Am sorry to hear that. Never fun. Hope all is going ok.
I got a letter from the california tax board saying i need to file since I have a pharm tech license and have worked this past year. Oh wait no no I didnt I am not even in the state right now or the past year..jeeze
Oh these guys did something similar to me! Not pharmacy related, but they said I worked in the state for a given year when I actually didn’t and never even stepped in that state for that year! I called BS on it and they said I am welcome to come back to California to go to court over it. I simply paid them their “tribute” and swore to never work or do business in California again.
“and if you live in California, you get hit with high state taxes, high sales tax.”
How else is the state of California supposed to pay for artificially fertilizing someone who already has six children and no father? Where’s the compassion?
I hear a lot from friends of mine who are in the “non-taxpaying class” who work as schoolteachers, etc, say that the problem with CA economy is prop 13!
Even with prop 13, our property taxes are at the median for the nation. Combined with very high income tax + high sales tax, there’s no excuse for California to be out of money.
You can’t pin the blame on Prop 13, illegal immigrants, etc. It’s simply that the government wastes way too much money.
It’s not just waste, but the corruption as well.
Well I disagree with the proposition that you can regard the employer match as directly comming out of your pocket. That implys that if your employer’s benefit costs were lower, they’d be forced to apply all of those savings to your wages. I don’t think that we can reasonable assume this. That is the same as saying that when you are looking for an employer, and your boss is looking for employees, you’re just as motivated to work by a social security match as you would be by cash in your pocket. This would seem not to be the case.
Instead, if that was eliminated from the cost to employ you, the employer is more likely to book the difference as profit, or give it to bonuses for the managers.
But when they decide to give raises, they are looking at the total pool of money. They don’t say, okay, he makes $80K, let’s make it $83K. They say, he costs us $87K, let’s make it $90K.
The difference is a 3.4% raise instead 3.75% raise.
If the match is so great, then I think we should just get rid of the employee half and have the employeer pay the whole thing. Certainly they wouldn’t just lower my pay by 7.65%, would they?
But you’re STILL assuming that the amount of total compensation, in this case for a raise, is fixed somehow. Instead of assuming that your employer is ALWAYS trying to pay the minimum that will enable it to employ the people that it wants to. If everybody starts leaving because they have better oppornunities elsewhere, they’ll be forced to pay more or go out of business. On the contrary, if they have 100 qualified applicants for every position, they’re not likely to be handing out raises. The amount of pay and benefits (including raises and healthcare)is likely to be the minimum amount that they think will keep people working and motivated.
Jim - FWIW, my wife is self-employed and the additional SS tax affects her interest in taking on additional work — not greatly, mind you, but I’d say that it is a very proportional reduction.
This is effectively similar to other companies deciding to give everyone a 5% pay cut or a few days unpaid furlough instead of firing anyone. Someone else will get the work your wife decides to pass up. It reduces tax receipts, but don’t assume this isn’t a good outcome for the economy at this time of high unemployment.
Darrel in PHX
HOLD your tax forms.
Send the IRS HQ a simple memo stating that you have become a US POLITICAN and therefore you are NOT required to ANY pay taxes until you are appointed to a high office in our current regime.
Note***Use your shredder to destroy any RNC cards, memberships, buttons and other incriminating evidence if this applies.
Good luck
I think you overstate your child credit and student loan interest as being a tax on your wages. Yes, your taxes are higher than they would be if you could claim them, but clearly the lost credit on student loan interest isn’t equivalent to a 2% tax on your wages. If that were the case, assuming $150k income, the following would have to be true:
$150000 * 0.02 = 0.25 * Interest
Or, you’d be paying $12,000 interest each year on student loans.
But $2500 is the maximum deduction, any anyway it’s only a $700 effect on your final tax bill at a 0.28 tax rate.
He is only doing a marginal rate analysis - what is the tax effect on the last dollar her earns. It is still a little wonky to simply add in the phase out on the student loan interest deduction. That deduction is very new. I didn’t get it. If you don’t have student loans you don’t get it. In order to add it in, you have to assume that you should be getting that deduction even if you make too much money to qualify for it. Sorry. Taxes involve arithmetic, but they aren’t math or logic where things are supposed to be consistent. Taxes are a human construct and aren’t “fair” under any particular definition of fairness unless they are written that way.
Well he’s only figuring out HIS marginal rate. Of course he’s not far from that great big stair step downward where payroll taxes go away suddenly. A lawyer friend pointed out how nice it is when your payroll tax dissapears in November in time to pay for Xmas.
“Most people simply can’t afford to pay taxes and live on their tiny income. So, those that can afford to pay taxes have to pay our share and their’s too.”
This is exactly the problem. Politicians can’t get blood from a stone. You can’t get much money raising taxes on people making 25k a year. And people making 25k a year have NO sympathy for somebody making 100k, and are happy to see them taxed more.
Instead of focusing on tax cuts, tax cuts, tax cuts, the upper-middle-class folks who tend to vote Republican should be focusing on wealth disparity and income inequality. Focus on raising wages to livable standards. Not only would this increase the standard of living and quality of life for EVERYONE in this country, people with a larger income, paying more of that income in taxes, would be more concerned with how their tax dollars are being spent.
Instead, it’s tax cuts for the wealthy and stagnant falling wages for the middle class, who demand more tax cuts, that go to the wealthy, etc. etc. Meanwhile, people making less are fine with government growing ever larger, because that’s the only way they can expect to get a piece of the pie…
The biggest boondoggle is the rule that allowed hedgefund managers to get their money at 15% as if it were a return on a capital asset instead of wages paid for a service rendered.
They aren’t making as much money now, so the return on that tax fix wouldn’t be anywhere near as much, but it is still worth doing.
You nailed it Bub Diddley.
…Focus on raising wages to livable standards…
And where would this money come from? Business doesn’t pay wages. The sale of products pays wages.
So, once again we take careful aim.. not at govt’s insatiable urge to increase their tax ‘n’ spending addiction, but at ourselves.. and shoot another hole clean through our own foot.
Given that residential construction is virtually at a standstill and currently at the lowest level in maybe 1/2 century, it is getting harder to argue with the serial bottom callers, at least as regards the pace of residential construction, since at some point there are no other directions to go besides sideways and up. Of course, the question remains when general housing demand will sufficiently recover to stimulate new home purchase demand, given a worsening job market picture coupled with the extant inventory glut and the foreclosure tsunami that makes it ever so much worse.
If these ‘experts’ are talking about a price bottom being close at hand, then no way! Too many Alt-A and prime resets loom over the next two years for that milestone to be within view of bottom callers’ crystal balls.
The Seattle Times
Real Estate
Originally published Saturday, January 31, 2009 at 12:00 AM
Housing bottom near?
Housing will not look much better at the end of this year than it does now, but “we do expect ‘09 will be the bottom,” the chief economist for the National Association of Home Builders (NAHB) said recently.
By Steve Kerch
MarketWatch
LAS VEGAS — Housing will not look much better at the end of this year than it does now, but “we do expect ‘09 will be the bottom,” the chief economist for the National Association of Home Builders (NAHB) said recently.
David Crowe, speaking at the International Builders Show in Las Vegas, said housing starts are expected to fall nearly another 30 percent in 2009 and new-home sales will drop 14 percent. But he said he expects the trough of the market to occur sometime in the middle of the year.
“We should come out of 2009 on an upswing. It won’t be strong, and we will still have home-price declines throughout the year, but it will be an upswing,” he said.
With even the National Association of Home Builders predicting prices to continue falling throughout 2009, who would be stupid enough to buy a home this year? Why not instead just sit back and wait for the government’s accidental housing affordability program to run its course? I guess some people are more impatient than I ever will be, as I am willing to wait indefinitely as long as home prices are dropping each week by an amount equal to a month’s rent.
Let’s see, is this were we are?:
rent… to own
own…to rent
Foghorn: “I says, come here boy, has I got a deal for you…”
+1
I just had a chat yesterday with an plant maintenance supervisor whose son recently bought a $400k+ Seattle home, and is now a financial Jacques Cousteau. Then he continued that his 401k had lost roughly 45% of its value. A die-hard Republican, he was straining to find the words to somehow blame Obama, but he was unsuccessful. Reminded me of a choir boy who had been shafted by his family’s pastor.
LMAO!!!
Calling the bottom is easy. It’s pretty much here. The problem is that the bottom will be here for a long time:
\_______________________________/
It’s no longer good enough to buy low and sell high. If you buy low too soon, you will get killed by operating costs+inflation+taxes while you wait for the recovery. The only way to invest positive is to buy just before the next upswing.
The next challenge will be calling the end of the bottom. My guess says 5 years — long enough for those 2011 morts to adjust, long enough for Obama’s policies to actually work (if they do).
The bottom may be there wherever you are, but prices are still dropping like a rock in Southern California, and the incentives for homeowners to stiff the lenders go up with every percentage point decrease in valuations. Last time I checked (fairly recently), San Diego home prices were dropping at about a 40 percent annualized rate, with no sign of deceleration.
Good Morning America…dispite the best efforts of Wall Street, Washington and NAR, this Nation still exists…although badly shaken
Mornin’ mikey. Say, I hope you don’t mind my asking, but did you serve in ‘Nam? I dunno why, but I sort of got that impression from one of your posts last evening.
Here’s to life, liberty, and the pursuit of easy credit.
Yes, I was US Army Airborne.
Wow, mikey, I had no idea. You have an awesome attitude, bro. Yer posts crack me up.
Mikey- are you the Mikey from SadlyNo?
Just trying to keep track of the troublemakers here on the ‘tubes.
Xenos
“The incident that you are inquiring about is an ongoing Criminal Investigation. My orders are to REPORT ANYONE who asks about it, attempts to intimidate me or threaten me to Ben, the Officer In Charge, my Colonel or CID”
That’s my cover story and I’m STICKING to it !
Ooops..wrong cover story.
Nope ..wasn’t me ..you’ve got the wrong guy..I didn’t do it
mikey,
What years were you Airborne?
Airborne? Jumping out of planes? My dad always told me you aren’t supposed to jump out of planes unless the plane is going to hit the ground harder/more dangerous than you would hit the ground yourself without the plane.
Yeah, he was airforce.
Here’s another Washington ‘tard who “made a mistake” with his taxes. Oopsie! I can’t stand this jerk, ever since he started crying crocodile tears on some punditry show (I think it was “Meet the Press) because some neocon insulted him during his failed re-election try. I mean, really.
http://www.latimes.com/news/nationworld/washingtondc/la-na-daschle31-2009jan31,0,1820227.story
(I think it was “Meet the Press) because some neocon insulted him during his failed”
Meet the De-Pressed is a favorite forum for whiners.
A $400,000 govt handout could come in handy.
Wall Street Journal
* BUSINESS
* JANUARY 31, 2009
On Street, New Reality on Pay Sets In
Financial Firms Race to Reset Compensation Policies as U.S. Government Aims to Set Some Limits
By AARON LUCCHETTI and MATTHEW KARNITSCHNIG
Wall Street’s pay system isn’t dead yet. But it is in trouble.
President Obama’s rhetorical assault on “shameful” bonuses reverberated across trading floors, investment-banking desks and executive suites Friday. Officials at several securities firms acknowledged that compensation, already down sharply because of evaporating profits, could shrink even more in the next few months as Wall Street scrambles to avert a government crackdown that some fear could be even more painful.
Sen. Claire McCaskill (D., Mo.) introduced legislation Friday that would limit the salary, bonuses and stock options of executives at financial companies getting federal bailout aid to no more than what the U.S. president earns: $400,000 a year, excluding benefits. In 2007, Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein earned that much in about two days.
Ever poor victim that gets a $200,000 cramdown, or can walk away from $200K of debt, tax free, is also getting a benefit worth about $400,000. (That’s what you or I would have to earn to net $200,000)
And there are hundreds of thousands of FB “victims” getting this perk!
It’s pretty funny Claire called these guys idiots. We’ve been saying that for some time. Not only are they incompetent, they are insolvent. As a result, they need to close shop. Leave the heavy lifting to more competent money managers.
Considering the growing popular unrest in Eastern and Western Europe, are they going to reward these same incompetent and insolvent idiots with another trillion or 2, or 3, or 4? How can they justify such a reward?
“How can they justify such a reward?”
Keep those campaign contributions flowing.
On Thursday, they welcomed unions to the house and promised to reinvigorate the middle class. Yet, on the same day, different continent and time zone, a million union members took to the streets in protest.
Then on Friday, the b@ilout announcement hit a snag, right around the most opportune time of day to spur a rally. We kinda went nowhere in anticipation. Outrage was expressed on the floor. Seems like PR hit a snag and needs time to recover.
Hey Palmy, Blago’s out! Now the death watch on the IL budget begins. In the next couple of weeks look for IL budget woes to grab some headlines. Another blow coming to the heartland/Rust Belt/flyover country.
Now Blago has to figure out how to pay the mortgage on his Ravenswood Manor home while taking care of a few pressing legal bills. Hah!
Rod’s wife Patti? No help there. She was a — wait for it — real estate broker, but she quit that least honorable profession sometime in the past year.
Her on-the-job behavior is under investigation by the FBI, too. Hundreds of thousands of dollars in commissions on real estate deals are under scrutiny. After her reign as a crooked broker, Patti apparently tried her hand at investment banking, but never closed a deal …
Patti also has a rather colorful vocabulary as revealed on the tapes.
The charming and civilized Patti also lost her job as chief fundraiser for some non-profit or other; she was making 100K a year or so. I can’t recall the organization, I’ll try to find the link.
As Jas Jain might pose the question, who exactly are the born-and-bred dopes in this picture?
Wall Street Journal
* REVIEW & OUTLOOK
* JANUARY 31, 2009
‘Idiots’ Indeed
After President Obama denounced Wall Street bonuses as “shameful” on Thursday, the way was clear for the rest of the political class to pour gasoline on the bonfire being prepared for the offending bankers. Senator Chris Dodd, former “friend” of mortgage banker Angelo Mozilo, ranted that the Treasury should somehow confiscate the bonuses.
Senator Claire McCaskill rolled out legislation to put a compensation cap of $400,000 on executives whose firms receive bailout money. She also proposes creating a court to restrain their “massive self-indulgences.” The Senator from Missouri then spoke of “a bunch of idiots on Wall Street.” Insofar as the Congress is blithely waving more than $800 billion of cats-and-dogs “stimulus” spending into the air, the American people can be forgiven for asking who are the greater fools.
“If Congress is going to start setting legal limits on salaries and bonuses in the U.S., it is going to drive talent out of Bank of America and these other banks and into institutions without such limits, perhaps abroad. The same goes for Attorney General Cuomo’s implied threat of prosecutions.”
This sounds perfect: Drive the talented bankers who lost untold billions worth of shareholder wealth abroad, where they can destroy the economies of our rivals!
“If Congress is going to start setting legal limits on salaries and bonuses in the U.S., it is going to drive talent out of Bank of America and these other banks and into institutions without such limits, perhaps abroad. The same goes for Attorney General Cuomo’s implied threat of prosecutions.”
Now replace the word talent with criminal and read the paragraph again.
Simply put, beggars can’t be choosers. Don’t like government oversight? Don’t take government money. After all, didn’t they want government “out of their business?” Well okay then. Be careful what you wish for, CEO’s…
The only reason these guys are alive at all is because they were allowed to grow to a size where they can take jobs and 401K’s hostage. Teddy R would have chopped them into bits so small you could make bank paté out of the pieces.
“Teddy R would have chopped them into bits so small you could make bank paté out of the pieces.”
That’s just what we need - a trust buster to bust the Megabank, Inc cartel into bits and pieces which have to compete, instead of qualifying for too-big-to-fail guarantees on the tired argument that letting these firms fail could bring down the global economy. There has never been a better opportunity to return competition to the banking sector. How about it, OBwan economics dream team?
‘Teddy R would have chopped them into bits so small you could make bank paté out of the pieces.’
LMAO
The words Talent and Banker. They just don’t go together. Shame on GE Jack and others with this sort of fear mongering of talent loss. I think Jack’s face on the MSM recently has been a planned effort to place a credible corporate face to fend for big bonuses.
Jack W credible and untarnished? He purposely abandoned both his wife and company of many years as soon as he saw the declines coming.
Sorry, I forgot. Jack first built up GE Captial to 1/2 revenues of leveraged debt, and THEN he left.
What was the purpose of the TARP, if not to prevent the free market from destroying bankers that failed their shareholders?
Buttonwood
The bonus racket
Jan 29th 2009
From The Economist print edition
Bank incentives are all wrong
Illustration by S. Kambayashi
“ISN’T it funny/How they never make any money/When everyone in the racket/Cleans up such a packet.” That Basil Boothroyd poem was originally written about the movies, but it could just as well apply to banking.
In its last three years, Bear Stearns paid $11.3 billion in employee compensation and benefits. According to its 2007 annual report, Lehman Brothers shelled out $21.6 billion in the three years before, while Merrill Lynch paid staff over $45 billion during the three years to 2007.
And what have shareholders got from all this? Lehman’s got nothing (the company went bust). Investors in Bear Stearns received around $1.4 billion of JPMorgan Chase stock, now worth just half that after the fall in the acquirer’s share price. Merrill Lynch’s shareholders got shares in Bank of America (BofA) which are now worth just $9.6 billion, less than a fifth of the original offer value. Meanwhile, Citigroup paid $34.4 billion to its employees in 2007 and is now valued by the stockmarket at just $18.1 billion.
Do hate speech laws apply to Wall Street execs? I wanna know. Ooh, they’re concerned pay limits might discourage some firms from asking for aid. I WANT them to be discouraged!
http://www.reuters.com/article/newsOne/idUSTRE50U0R320090131
Dammit, I am so PISSED!!!
Why would you expect any politician to bite the hand that feeds their campaign coffers?
As a kid, I served with some really awesome and crazy young guys during some bad times. They taught me to never take youself too seriously and “Do it today, because tomorrow, it will be against the Law”.
**Batteries and tomorrows - not included or guarranted
“They taught me to never take youself too seriously and “Do it today, because tomorrow, it will be against the Law”.
Amen! I’ve been entirely too serious lately, myself. Time to lighten up, that’s why I enjoy so many of the posters here.
Geez, that stuff just really sunk in. I’ve been so pissed about this Washington/Wall Street debacle and just realized it’s not doing me or anyone else any good to stay mired in anger.
There’s some people in life where you just feel better being around them or associating with them. I’d like to be one of those guys, rather than taking on this curmudgeonly ‘tude I seem to have copped lately.
I hear you palmetto . Wait until you have to deal with the medical
system when you need it the most ,that will enrage you more than anything could . The greedy Wall Street bums messed up peoples financial lives and that is unnerving ,but when the money people mess with your love ones lives ,you really get enraged when you know there is greed behind it . I won’t go into it because this is a housing blog , but corruption and greed is not limited to Wall Street and the Housing Scheme .
Housing,
This is the Bits Buckets. You can go into it here. All business including the medical business has been touched by the housing greed.
How is your wife doing?
Wizard, if you’ve not already done so, demand that your insurer assign a nurse advocate/case manager to run interference for your wife. Be very noisy until they do. Find out who is in charge of public/consumer relations, befriend that person’s secretary, then call them two or three times a week until they get so sick of hearing from you they capitulate.
It’s a whole lot easier to deal with the emotional truama of an illness when you don’t also have to do battle with your insurance company’s stonewalling. And the docs appreciate not having the onus put on them as well. Good luck!
Thanks you guys . I have been making a lot of noise lately ,
and this even kills me more to think that people who are not noise makers are really getting screwed .
As far as corruption and greed goes ,Insurance Companies that give benefits ,but have no intentions of giving those benefits or honoring claims ,or they stall claims , and put people through hell and got the Doctors going along with their game ,should be shot at dawn .
Look at what AIG did . Correct me if I’m wrong, but didn’t AIG put insurance on credit default swaps but they really didn’t have the money to pay the claims ?
I remember that, after the House of Representatives initially balked at Tarp, CNN or CNBC had a broker-on-the-street, drive-by sound bite from some real arrogant, 27-ish punk, with a leather satchel-type brief case slung over his shoulder. Gel-haired “Master of the Universe” looked into the camera and said something to the effect, “You’ve got the money. We need the money. Give us the f’in’ money.” What with Sqwuak Box, compulsive tailgaters and a cheap cigar on the way to work, my blood pressure is usually way up by the time I get down to business. That morning took the cake, though. Somebody at the network that ran the segment must have received word to “deep-six” it. Never saw it again. Talk about a face you’d pay money to slap!
Ah, only in California! LOL, but don’t worry, this lady is doing her bit to see that there will be future residents for some of those empty homes. Maybe Lennar could make a deal to sell out one of their subdivisions.
http://www.nydailynews.com/news/2009/01/30/2009-01-30_doctors_face_inquest_after_california_oc.html
“Neighbors said Nadya Suleman is single. Public records indicate she’s licensed as a psychiatric technician.”
In one birth…she’s given a whole new meaning to: “Working Mom”
And the race between science & humanity… is neck & neck
But wait… there’s more!:
Grandma: Octuplets mom obsessed with having kids:
“The woman who gave birth to octuplets this week conceived all 14 of her children through in vitro fertilization, is not married and has been obsessed with having children since she was a teenager, her mother said.
Angela Suleman told The Associated Press she was not supportive when her daughter, Nadya Suleman, decided to have more embryos implanted last year.
“It can’t go on any longer,” she said in a phone interview Friday. “She’s got six children and no husband. I was brought up the traditional way. I firmly believe in marriage. But she didn’t want to get married.”
http://news.yahoo.com/s/ap/20090131/ap_on_re_us/octuplets
But wait…there’s even more!:
Yolanda Garcia, 49, of Whittier, said she helped care for Nadya Suleman’s autistic son three years ago.
“From what I could tell back then, she was pretty happy with herself, saying she liked having kids and she wanted 12 kids in all,” Garcia told the Long Beach Press-Telegram.
“She told me that all of her kids were through in vitro, and I said ‘Gosh, how can you afford that and go to school at the same time?”‘ she added. “And she said it’s because she got paid for it.”
Garcia said she did not ask for details.
Nadya Suleman holds a 2006 degree in child and adolescent development from California State University, Fullerton, and as late as last spring she was studying for a master’s degree in counseling, college spokeswoman Paula Selleck told the Press-Telegram.
Kaiser & staff should be charged with Medical Mal-practice.
“You’ve got six kids and want a course of in vitro fertilization? Here’s a referral.”
—PSYCH WARD
Let’s see…eight neonates in ICU @ a minimum of 10K/day each, X 60 days =half a mil before she even gets out the door. Then there’s therapy and surgery for all the developmental issues these poor little creatures have ahead of them for the rest of their lives. And you wonder why your health insurance premiums are so high?
This good citizen now has fourteen fatherless kids living in Grandma’s house in Wilmas (barrio,) Grandma went bankrupt two years ago in a real estate misdaventure. Grandpa high tailed it to Iraq to work as a contractor (100K/year.) And “mom” wants to become a CHILD PSYCHOLOGIST?!!!!
Yet, the Republicans (sorry to be partisan here but they’re the ones making the stink,) are all up in arms about monies for family planning in the stimulus proposal.
Pardon my math. x8= $4,800,000.
Yes, but the local news covered this like an 8.3 earthquake…and did you see all those smiling doctors, nurses, & Kaiser Gov’t billing clerks!
In vitro typically costs upwards of 60K and this paragon had it done twice! Anyone care to hazard a guess how she came up with the money?
Somehow I cannot believe that Kaiser Permanente would cover this, nor would they employ a physician who would implant EIGHT embryoes into an unwed and unemployed mother of six!
“Yet, the Republicans…are all up in arms about monies for family planning in the stimulus proposal.”
Calling Gov. Sarah “The Barracuda” …can a single Mom with 14 kids have a bridge “to nowhere” loan…just to tide them over, until she & her “Family” can qualify for the $2,167.00 per man woman & child Alaskan oil fund money…$2,167.00 x 15 =$32,505 per year…FREE!
+ Federal aid + State aid… plus Sec 8 housing + People magazine exclusive photo money + + + + Maybe, Cabella’s can get all x14 of them matching “moose hunting” outfits for a corp photo shoot!
Here was my 2008 Predictions in Jan 2008, I guess live and learn:
1) Houses still way priced, and home builders are still good shorts on any rally, even though already declined a bunch. Result: WINNER.
2) Stay light on US equity, hedge your longs with highly correlated short positions and make return from high volatility of puts and calls. Result: WINNER.
3) Stay long on emerging markets due to decoupling, like Chindia still going strong with domestic demand taking over in place of US consumers. Result: DEAD WRONG, emerging markets lost even more than US indexes as I am taken to the cleaner in my intl funds such as Tweedy Browne Global Value, Dodge & Cox Intl Value, losing 40%.
4) Stay long on commodities like oil & gold, for reasons related to 3), even if US demand falls. Result: DEAD WRONG, oil crashed and gold fell too toward the end of the year. Oil-sands and NG driller positions got killed, crying to my mommy.
5) Sell my significant and only financial stock, Morgan Stanley, in early 2008 at $67 a share. WINNER. Though the worst was over for them during Aug, bought some back at $37. Then Lehman happened and crashed to the teens. LOSER.
6) Lock in 5%+ CD rates as much as possible for cash positions as the Fed will lower rates like the world is ending tomorrow. Play off the need to raise capital by weak banks thus offering high rate and shortly to be taken over by still healthy banks (eg: WaMu by JPM, etc.). Result: I am glad I have CDs earning 5% while average CD rates is now like 2%. However will need to make some decision as several large CDs maturing toward the later part of the year and the banks are still deteriorating.
Here are my 2009 Predictions and investing thesis:
1) Housing will stay down and no recovery until middle of next decade at the earliest. Some of the homebuilder stocks will go to 0 so any bounce in them, pick up some puts. Sell puts on SRS/SKF for high volatility, short-term play on any market rally.
2) Continue to stay light on US equity as more pain to come, either long stock-short call or correlated long/short pair trades only. Stay the hell away from US Treasury, but increase corporate bond position and offset with a little equity shorts.
3) Emerging markets (Chindia etc) do not rebound in 2009, but do better than the US as hopes for US consumer to spend beyond their means go unfulfilled and eventually turn to boosting their own internal consumption / demand using their large reserves. Not too much faith in this one though.
4) Start moving more cash position to foreign currency when CDs matures later this year (not sure which currency yet) as USD rally is a head-fake and combination of US money printing machine goes hyper-ballastic + foreign investors losing interest in US assets cause dumping of USD and falls later this year.
5) No hyper-inflation, or even inflation this year. Long-term economic imbalance is a deep structural issue and no quick fix is available to revive end-consumer demand even if super-busy money printing presses try to keep deflationary spiral at bay. Thus will not go nuts with gold position, it is only good for a fear play. Saving hyper-inflation for next year and beyond.
6) Aladinsane returns to HBB for investment advice after country farmer in third-world country accidentally stumbled upon his buried gold bars/coins/statues in yard and take him to the cleaners.
7) Lastly, find a low-maintenance / no-frill girl who is also a knockout with model-like curves and ample non-artificial bosom. Of all of my “positions”, I am most certain this will stay as unfulfilled dream.
cougar91
re: #3 — Don’t you just hate when you get it right, then get so happy and proud that you go out and get it wrong again? I have concluded that I am getting less smart every month…
See what I mean, I meant to refer to #4.
My main prediction for 2008 was that one major bank would fail. I didn’t think that it would be all of them…
And your #7…. MWAHAHAHAHMWAHAHAHAHAHAHAH!!!!!
yeahright.
If #s 1 through 6 work exceptionally well, doesn’t #7 tend to happen automatically (for either sex)?
Not really.
If you have model-like curves, then your fat content is to low to be –um– non-artificial.
If you do have model curves and you’re a knockout, you won’t be low-maintenance/no-frills for long, because so many guys will be throwing either their money or themselves at your feet.
So #7 is physically impossible to begin with.
ROTFLMAO… I loved it Cougar91
4) Stay long on commodities like oil & gold, for reasons related to 3), even if US demand falls. Result: DEAD WRONG, oil crashed and gold fell too toward the end of the year. Oil-sands and NG driller positions got killed, crying to my mommy.
Good luck on that number 7. girl “position”
My predictions for 2009…
1) At least $500 billion in state government bailouts.
2) Commercial Real Estate Collapse
3) DOW 6000 in 2008 dollars.
4) GOLD $1500 or more.
5) Monetary Base will grow by 50% or more.
6) National Debt will increase to $13T or more.
7) Federal Reserve will be forced to monetize treasury debt as foreign demand for the dollar falls off of a cliff. The dollar index will fall below 60.
+1
Me, too.
Hahahahaahah! Funny, cougar! I mean, wise, and then the funny part.
Say, that reminds me, how’s the ‘New and Improved for 2009 Cougar91′ plan coming along? Where you treat women the way they ’secretly’ want to be treated?
You ain’t been kilt yet, so much is clear…
You know what, I think I saved your resolution list, I admired it so much. Lemme see if I can find it, to repost, for all our enjoyment.
And here it is! I cut and pasted when you first posted it, cougar, with the intent of asking you later how your excellent girl-catching ideas was working fer you. (Assuming you was alive and uncrippled enough to type the answer in. I thought you might make it about 3 whole days into the bold New Year of 2009.)
Thanks for reminding me.
————————————————————————
Comment by cougar91
2008-12-18 10:42:06
Inspired by the various HBB gals on why nice guys can’t get chicks, I have made my new year resolution: I am going to go from nice boy to bad a*s for 2009. Here are a few behavior modifications I have came up:
2008 coug: Open car door for women.
2009 coug: Pretend to open car door for women, then as she is half-way out of the car, slam the door with full force and yell “Get yo fat ugly a*s out of my ride.”.
2008 coug: Say to her: “I would like to take you to see Yo-Yo Ma when he comes back”.
2009 coug: Say to her: “I would like to see yo mama behind your back”.
2008 coug: Say to her “I get along with women really well because I am a sensitive guy and a real good listener”.
2009 coug: Say to her “I really get down with yo hoes & b***ches”.
2008 coug: When finishing dinner at fancy restaurant: “I had a nice time with you, let me pay for this dinner”.
2009 coug: When finishing dinner at Soul Fried Chicken: “Yo lucky I am splitting it with yo ugly a*s”.
2008 coug: Say to her “One day I would like to have children and raise them the proper way. I love children.”.
2009 coug: Say to her “I need some more headcounts to fatten my welfare & TARP checks.”.
These behavior changes should now guarantee me & any other HBB dudes any women we fancy. Thanks, HBB gals.
Oly. I do love you so….
I’m quite fond of you, too.
C’mon ladies, share the love outside your gender.
Hey come on, it’s ONLY end of Jan, still plenty of time left to go.
Give me some credit, would ya?
Palmy, I saw your response from last night. Perhaps we’ll have a meet up sometime, and I’ll tell you the gang stuff. Not appropriate for the blog.
Oly, I’ll post the granny story and an updated littleman pic later, when I have more time… basically, I hate little, old ladies. I avoid them. Don’t grow up to be a little old lady.
Muggy,
Hate to break it to you, your wife will probably age to be a little old lady.
‘Oly, I’ll post the granny story and an updated littleman pic later, when I have more time… basically, I hate little, old ladies. I avoid them. Don’t grow up to be a little old lady.’
Goody! I love annoying little old lady stories! All my female relatives live to their mid-90’s, and were probably annoying even before they got old, so I have lots and lots and lots of those stories, myself.
An’ I wanna see the littleman! I am quite taken with him.
An’ I seriously doubt I’ll grow up to be a little old lady. My mom is fairly amazed I’ve made it to 36, and she hasn’t even heard the most exciting parts.
Too late, Mugs. I done and did it.
BWAAAHAHAHAHAHA!!!
“Too late, Mugs. I done and did it.”
Fine. Just don’t expect me to change your light bulb because
1. I am a man
2. You think I have time to
Granny hater!
Rents Drop Nationwide as Vacancies Spike
The economic crisis has opened up opportunities for apartment tenants. The inventory of vacant apartments is expanding, and rents are dropping quickly in major metros across the country.
For renters with leases about to expire, it’s time to negotiate. Landlords are working extra hard these days to keep units filled.
http://finance.yahoo.com/real-estate/article/106480/Rents-Drop-Nationwide-as-Vacancies-Spike
I thunk rents always went up.
BwaHaHaHAHAHAHHAAHAHAHHAAAAAAAAA!!!!
Where has everyone gone? Where are all the foreclosed on families and missing renters living? I hope not under the freeway.
In the past 12 months, rents have dropped big time here in central Florida. Easy to find 15-20% yoy cuts. I think a big part of it is the shadow inventory that has come onto the rental market and upset the normal professional inventory balance - many stuck owners deciding to rent out until prices come back.
In NYC too!
A Month Free? Rents Are Falling Fast
“It certainly makes renting more attractive when the rental market softens,” said Gary H. Schatsky, a financial adviser in New York. “If people suspect — as most people do — that the New York City sales market will get much softer, and they’re able to rent in the meantime, then being able to negotiate a rental rate puts you in a better position.”
Teresa Hsiao found a kinder-than-expected rental market when she moved to Manhattan from Los Angeles last month.
“I was expecting to live in a box,” she said. She looked at more than 10 apartments and found lots of concessions on nice spaces that added up to substantial price cuts. “Everyone was paying the broker fee,” she said. “They were very flexible on their lease terms. One broker told me: ‘We’ll get it done for you. Just name your price and we’ll do it.’ ”
Still overpriced, but a good sign nevertheless..
How is Manhattan holding up?
There was a poster here from Manhattan who was saying Manhattan wouldn’t get hit.
U.S. business group opposes “Buy American” plan
WASHINGTON (Reuters) - A top U.S. business group stepped up efforts on Friday to kill a “Buy American” provision that has angered U.S. trading partners, and the White House said it was reviewing its position on the measure.
“Some have slammed the U.S. Chamber for opposing ‘Buy American’ provisions, calling our position ‘economic treason,’” Thomas Donohue, president of the U.S. Chamber of Commerce said in a statement. “Try ‘economic patriotism’,” he said.
“Such provisions would cost American jobs, trigger retaliation from our trading partners, slow economic recovery by delaying shovel-ready infrastructure projects and cede our leadership role as a long-standing proponent of free and fair trade and global engagement.”
The House of Representatives approved the measure this week as part of an $825 billion bill to kick-start the U.S. economy. In the House bill, the “Buy American” measure would require all public works projects funded by the stimulus package to use only U.S.-made iron and steel.
http://www.reuters.com/article/domesticNews/idUSTRE50T5Y820090130
So SOME people want to use the bailout bonaza to fund Foreign suppliers?
Let’s hear it for protectionism. Pay no attention to the 1930’s.
Exactly.
I recall in 2005 on this blog, when nearly everything that has occurred in the past 18 months just seemed impossible, that posters were predicting not only bailouts related to bad mortgages, but that protectionism would see the light of day again.
We were an exporter nation in the 1930s. Now????
These United States recently began importing more food than we produce.
I’d say our dinner plates need protecting.
Multinationals are going to get creamed by that provision. Instead of a stimulus rally, we’ll get a stimulus crash.
They should change it from “Buy American” to “Employ American.” That is, verified citizens and green cards only — no “undocumenteds” “guests” or “in the shadows” type nonsense.
The Dems are trying to shut down e-verify.
The entire nation needs to do what AZ has done. 100% verification of new employees, or lose your business license.
Actually we really watered it down from its original form. It started as ALL employees, but the PTB QUICKLY saw what that would do to vacancy rates, businesses forced to hire citizens, etc. So, now it only applies to new hires.
Okay, the economy is based on you breaking the law, so go ahead and keep doing it.
Yup.
Another benefit: Our emergency rooms are revived.
Some have slammed the U.S. Chamber for opposing ‘Buy American’ provisions, calling our position ‘economic treason,’” Thomas Donohue, president of the U.S. Chamber of Commerce said in a statement. “Try ‘economic patriotism’,” he said
Patriot: the person who can holler the loudest without knowing what he is hollering about.
Mark Twain
The idea that some parts of the $800 billion stimulus package (100% financed by the American taxpayer) should be spent on foreign-made goods seems preposterous on the face of it.
However, I would be willing to look the other way, as long as other countries are willing to start footing the bill for this huge deficit we’re running up. Why should Joe Taxpayer be saddled with all the debt, when the debt is partially used to employ foreigners?
For the last few years, CNBC was been yapping about “investor class” and how they are the source of wealth, and how they need to pay such low tax rates because they put money at risk and blah, blah, blah…
The mega-rich need lower tax rates because they are the fount of life from which all prosperity flows….
Then Obama, many in congress, and others start talking about the insane bonuses, low tax rates on the playa’s, and need to focus on the middle class.
And, what were they flapping their pie holes on CNBC last night? Class warfare…. How the Dems are trying to divide and conquer. WHAT? You butt for brains invented the term “investor class” and you accuse others of class warfare?
Wow..HBB is up, alert and not taking ANY prisoners this morning !
“More COFFEE and nobody GETS HURT”
Not to mention the logical flaw that the “investor class” IS the middle class, in the form of IRA’s, 401k’s and pension managers. The class war is the middle class warring against itself. Bankers just sit on the sidelines and collect admission fees to the show.
More like the bankers sit in the stadium and dictate who’s up next in the money destroying Colosseum. The middle class guy, with his 401K, is typically totally at the mercy of the banksters, they decide where the money goes, how much of it goes where, and for how long. Then, when it all goes to sh*t (and both “investors” die in battle), they just go and tap the pool for some more morons to lead to the slaughter.
I’m not a supported in this “give the rich money and all will be well” theory. I don’t think that we should tax them much (or any) more then they have paid in the past, but the whole concept of all of us feeding off some rich a**hole for our very jobs and lives is just too repugnant for me to stand. The rich consume, which is kind of good, but not something that we need to worry about/encourage.
Milwaukee bankruptcy attorney James Miller has noticed an increase in upper-middle class consumers among his clients. They are struggling to keep up with debt, including payments on houses that have dropped in value, he said.
“Part of the reason we got into this mess is because all these people making $100,000-$150,000 a year were buying $600,000 and $700,000 homes they can’t afford,” said Miller, of the firm Miller & Miller. “I’m seeing more people saying, ‘We are jumping off the treadmill,’ and filing.”
Sheesh..Were talking the conservative “no bubble here” Milwaukee area folks
http://dev.www.jsonline.com/business/38733637.html
If you make $100K a year, you’re in the top 10% of wage earners. Shouldn’t you be able to buy one of the top 10% houses?
Take your simpleton math elsewhere. That’s no longer the case because our our snazzy “financial engineering” products. Now people making the median income can afford the 10% of houses. People making 100K a year who want to use a normal loan can’t afford a shoebox.
Pwahaha. Top 10% buying top 10% of houses. What an antiqued view of finance.
Of course, your antiquated view of finance also happens to be the RIGHT view. Of COURSE if your in the top 10% of income earners (over 100K a year) you should be buying a top 10% home.
No, Darrell, the rule is that you shouldn’t get a mortgage that is 3 times your income or less.
Oops, I meant to say shouldn’t get a mortgage that more than 3 times your income.
There’s just something wrong about a law firm named “Miller & Miller” in Milwaukee of all places.
Of course this is mandated by his bar association which generally insists that law partnerships use the real names of the principal partners as a firm name - no names like “Bankruptcy-R-Us” are permitted.
I wonder what kind of “bar” association Miller&Miller frequent most.
Sorta like Lawyers with a ugly divorce case.
———————————-
Bankers just sit on the sidelines and collect admission fees to the show.
So true
I think you’re discounting the degree to which Wall Street has become an inflamed boil upon the rest of society. What do you think HAPPENS with all those multi-million dollar paychecks that WS types and to a lesser extant CEOs get? They spend a much smaller proportion of their income than we do. That money has been circling around the street bidding up asset prices.
Cheney-Shrub: “We really want him to succeed, we really do.”
Rash Limpbaughs: “I want him to fail!”
Trading Places is an Academy Award-nominated 1983 comedy film starring Eddie Murphy, Dan Aykroyd and Jamie Lee Curtis.
Hey Darrell,
I bet you $1.00, remember:
“Brothers Randolph and Mortimer Duke (Ralph Bellamy, Don Ameche), the heads of a large and successful commodities brokerage firm, hold opposing positions on the issue of “nature versus nurture.” Mortimer believes that a well-bred individual will be able to conquer whatever challenges are presented to him, while an ill-bred one will fail even if he is given many advantages over others. Randolph, on the other hand, thinks that the former will degenerate if stripped of his position, but the latter will become a changed man if given the proper chance. To settle the dispute, the Dukes decide to ruin a successful man’s life, allow a low-class man to take his place, and observe the results. They wager their “usual amount” on the outcome….$1.00″
We have been living in some interesting times. Every day I keep reading of more and more layoffs, see more and more commercial real estate going wanting, more and more people renting out rooms in houses by the day, week and month, more local businesses going out of business; wow!
The insanity on the political front (from Washington, state, and local) and financial front is like going to movie or Broadway play where you don’t know the ending but know it’s not going to be good. I’m glad that I made the decision mid-year to invest in my physical health by hitting the gym hard and spend more time reading. The latter has been great for my mental health as well.
One thing that is certain is that if one keeps their eyes open out of chaos will come lots of opportunity for success.
Yeah, I am glad I chose to have more fun flirting and carrying on because pretty soon having too much fun could be illegal. Who wants to share some vino?
Easy Ann?
Sign me up. I’m running a fun deficit lately…
A friend of mine in Phoenix was telling me that since the economy and housing market started to collapse, there is a huge increase in meth abuse.
Any info on the incidence of drug dens increasing as the housing market tanks?
Another good reason for the President to work towards legalizing MJ.
People need an escape during times like this (well, those who made horrible financial decisions anyway), I’d expect to see drug sales of all kinds, as well as liquor/cigs go up quite a bit. Meth is a middle-America drug, we never see/hear of it here in FL (cocaine is our drug of choice), but from what I understand, it’s cheap and makes you feel very good for a very, very long time. That’s a hard combo to beat when you’ve just lost your home; or lost a few 100K on the home you still have.
I think people may be starting to realize that:
A) It’s never coming back.
and
B) Middle class people cannot afford to make 1/4 of a million dollar investment mistakes, it will destroy them financially for the rest of their lives.
Which would lead to:
C) Desperation..
What people need to realize is that BK isn’t a horrible option. They get a do-over (with a credit hit for quite awhile), and walk away from an investment that went south to the tune of a 100s of thousands of dollars! Let me tell you, LOTS of people would like that same opportunity in the stock market! I might declare BK if I could be made whole back to the point where my stocks started to tank!
Uh…. Yeah…. No meth in Florida.
http://www.usdoj.gov/ndic/pubs5/5169/meth.htm
Sorry, didn’t mean to imply that it’s not here. It’s doesn’t seem to be as big a problem here as in other parts of the country. Our big problem seems to be cocaine. But, of course, as you point out, meth is everywhere. I’d get into a discourse on the “drug war” now, but as this is a housing blog I’ll save it for another day.
There should be plenty of vacant houses available in which to set up meth labs. If the government buys up all the empty houses, then would that make these government-owned meth production facilities?
If the government buys up all the empty houses, then would that make these government-owned meth production facilities?
At least the government could get itself into a high profit margin business. It might lose a few houses to accidental explosions, but that’s just a hazard of the meth trade, I suppose.
Meth abuse in this country was bad to begin with. Having known a few meth and coke heads, I don’t need to consult any study or survey to know that abuse is rising and therefore crime.
I can only hope they kill themselves. Cold? You’ve never really been around speed freaks then, have you?
Is lighter fluid the next bubble?
Milwaukee JS online
Along with job losses, bankruptcies in state rise
http://dev.www.jsonline.com/business/38733637.html
“Part of the reason we got into this mess is because all these people making $100,000-$150,000 a year were buying $600,000 and $700,000 homes they can’t afford,” said Miller, of the firm Miller & Miller. “I’m seeing more people saying, ‘We are jumping off the treadmill,’ and filing.
Forget the coffee….some of the “Rich” Fools here need MORE beer …and crying…lots and lots of crying
Here big one from the Milwaukee near area that is filing for bankruptcy I posted yesterday with a strange story.
Operator of Jefferson ethanol plant files for bankruptcy
Renew Energy LLC, operator of a year-old ethanol plant in Jefferson, sought protection from creditors in U.S. Bankruptcy Court Friday.
The company listed debts of $100 million to $500 million and assets in the same range.
The largest unsecured creditor listed is Olsen’s Mill Inc., which is owed $20 million, according to the filing
http://dev.www.jsonline.com/business/38722007.html
The Milwaukee area and the banks will be looking like Detroit when the dam breaks with all these bankruptcies, foreclosues and job loses.
Anywhoooo, like I said yeaterday. This big outfit should have invested in POPCORN
“U.S. President Barack Obama promised Saturday to help lower Americans’ mortgage costs with a new plan, coming soon, that would revive the financial system and ‘get credit flowing again.’ ”
Well, unless your plan includes principal reductions, then a year or so from now I’ll be buying a new house and walking from my current mortgage, along with 80%* of AZ.
* Studies indicate that 79.36% of all statistics are made up.
P.S. If I don’t start hearing about the no tax on forgiven debt thing being extended, I may be doin’ the buy and dump in the next 6 months.
No Tax on Forgiven Mortgage Debt was a middle-class tax break with at least 700 Billion Dollars that nobody seems to acknowledge.
I think every responsible homeowner should do the math and walk away from his house if it makes economic sense. Don’t let Deadbeat Danny and Sally Specuvestor get all the government cheese!
-
“No Tax on Forgiven Mortgage Debt” is as nearly as asinine a tax policy as forgiving all the “fancy” stock optioneers who used to owe more due to the AMT.
Any greedy clowns that tried to outsmart the former tax system by exercising options and then holding for a year (to get the lower rate) - should have to pay the tax as a penalty for sheer stupidity.
Why are greed and stupidity rewarded?
Many thanks on this one to Representative Anna Eshoo (D)!
“No Homedebtor Left Behind”?
I thought I was the only person who was outraged that bailouts for failed dot-com speculators was included in these recent handout bills! Anna Eshoo called it “phantom income.” Seems that everyone else makes phantom income except me.
I am sorry but I am sure that my rent is more than most fool’s mortgages. I feel like I paid eight hundred dollars for a airplane ticket when everybody else got theirs for two ninty nine!
I probably won’t ask my LL for a decrease. He’d probably flip.
Well according to the stats about studies being made up, isn’t the stats made up for those studies?
Hey peoples. Have you noticed that the deals are starting to appear on Craigslist relative to ‘05 highs, and we’re only in the 4th inning of this game? What deals will appear for the prudent and wise in the next three years? Still, people all around me are losing jobs or getting cut back. God help us all.
–
David Rosenberg, 01/30/09: “Best and brightest couldn’t see how bad things would get — Even the best and brightest couldn’t see how bad things were going to be … just a year ago: We found this from a testimony that Ben Bernanke gave just last April – this time last year, we were supposed to be in the throes of recovery by now. To wit: “We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies; and growth is expected to proceed at or a little above its sustainable pace in 2009, bolstered by a stabilization of housing activity, albeit at low levels, and gradually improving financial conditions”. (“The Economic Outlook”, testimony to the Joint Economic Committee, April 2, 2008).”
Chair-moron Burn-ass-ke said during his testimony a year earlier, in March 2007, when asked about specter of falling home prices, that the housing prices in the US as a whole would not fall, only that the price increase will fall to 3-5%.
Are we in good hands?!
Jas
The question which haunts me: Were the myriad announcements by Bernanke and Paulson that “subprime was contained” and “there will be no recession in 2008″ etc a sign of ignorance or deception? It bothers me when I cannot tell whether policy makers are sincerely dumb or just pretending.
Agreed.
Personally, I think it was deception. 2006 they put Greenspan out to pasture and replace him with the world’s foremost expert on the Great Depression…
Paulson leaves a $100 million+++ a year job as CEO of Goldman Sachs to take a $300K salary as Treasury Sec.
They knew!!!!!!!
Do you think for a minute that the AZ leaders think there are more people working in this state now than a year ago? With 20% drop in personal income taxes, 18% drop in sales taxes, and 15% drop in corporate taxes???? They HAVE to know the unemployment figures the are publishing are complete BUNK!!!!
“Paulson leaves a $100 million+++ a year job as CEO of Goldman Sachs to take a $300K salary as Treasury Sec.”
Q. Where did Paulson place his bets after leaving Goldman?
A. I believe he placed a large sum in long term U.S. Treasury bonds (but someone please jump in here and correct me if I am wrong).
Q. How did long term U.S. Treasury bonds fare as an investment class during his tenure at the Treasury?
A. Conjecture: The stellar return on Treasurys during his tenure was purely serendipitous, and related in no way to the spectacular failure of his December 2007 “no recession in 2008″ economic forecast coupled with the unforeseeable collapse of Wall Street’s investment banking sector.
More than a year after Hoz made the suggestion, I am still mulling over a decision whether to invest in that inverse T-bond double-your-money-on-losses fund he recommended. Is the time ripe yet?
Only if you have a death wish.
I am in agreement with the big cat on this one.
b-b-b-b-but, you’re still thinking about dollars. The ultimate global bubble: claims on the reserve fiat regime.
Looks like TLT has some upside here as the Tens go back to 2.0%. TBT had a nice little run, but with Jas back to regular posting on multiple boards, Treasuries are likely to rally as Mr. Market retests some recent lows.
I think a lot of people are about to get some shock and awe, when the UK pulls a bank holiday…pure conjecture. the best kind! If I had to pick the curve most likely to blow up, it would be the UK.
Jas is sometimes a very good indicator of a UST rally (QE notwhithstanding).
…to London, 1-20-09
Returning to London from Reykjavik last night was like coming home from home. Allowing for the differences in the scale of the Icelandic economy and the British economy (the UK population is more than 200 times larger than Iceland’s Coventry-sized population), there are disturbing economic parallels. The excesses in Iceland during the past decade were greater than in the UK, but not qualitatively different.
—
http://blogs.ft.com/maverecon/2009/01/can-the-uk-government-stop-the-uk-banking-system-going-down-the-snyrting-without-risking-a-sovereign-debt-crisis/
As it is the UK has managed to engineer its own property and financial mess, but at least has the option of exchange rate depreciation, debt monetisation and fiscal stimulus – an armoury denied to other euro members.
-\
from the comments.
dnag it….I had a post er two in there somewhere.
but at least has the option of exchange rate depreciation, debt monetisation and fiscal stimulus – an armoury denied to other euro members.
Assuming that the pound doesn’t collapse which is far from a given.
Short pound berrry-berrry-good to everyone.
“disturbing economic parallels”
“Is the time ripe yet?”
Is the time ripe yet?
Is the time ripe yet?
Is the time ripe yet?
and the UK goes out with a whimper.
yeah, ridiculous isn’t it?
not one of them was able to utter the “r-word”, they denied there would be a recession and then of course by the end of the year they acknowledged that the recession was already a year old. explain to me how they couldn’t have known. they couldn’t recognize a recession while it was happening right under their noses?
The powers that were and the powers that are now in Washington DC and Wall Street know what is coming down the pike. Sometimes it takes a few really good slaps to the face to anger the American public and get their attention. Lifting their wallets also tends to pisses them off once the realize it.
They are worried when that when j6p suddenly realizes that he isn’t just being bitch slappped but seriously mugged, gang-rapped and rolled big time by his so-called “friends”, all Hell will break loose
“…a sign of ignorance or deception?”
I think that if it was ignorance, we’re screwed and if it was deception, we’re screwed.
–
Prof,
You must know my answer by now — they are Crooks, or Crooks’ agents. They lie; they manipulate.
I can’t present more than 1,000 pages of evidence, but I have systematically studied the situation. I can only share my conclusions, right or wrong. I had wish I was wrong all along, but denial is something I don’t succumb to.
Jas
-
Jas and Prof,
Why not stupidity?
Is military History (when the stakes are survival itself) not full of blunders of the magnitude of leaving your queen hanging in Chess? (or bearing off wrongly in backgammon forgetting that opponent still has men on the bar, for those that prefer backgammon)
I think because both of you are analytical and seek to see the order in things (math, economy) you really are underestimating stupidity.
Really, look at military campaigns in WW2, specially the early months, the French and British had more tanks and men on the front while Hitler was occupied elsewhere gobbling one nation at a time. What where the allies doing? Paying soccer within binocular distance of the few German troops on the other side.
The Ruhr was basically up for grabs.
Jas, you can give me 1000s of pages/examples of crookedness.
Can we agree that we could do the same with stupidity?
–
Muir,
Do stupid people stumble into power? Even if they do, how come they are able to hang on as long as they have done, e.g., Greenspan? I find it highly unlikely that stupidity was at the root.
I would grant you that power can blind people people and they sometimes do stupid things, but I doubt that stupid people end up in the most powerful positions in the US.
Best to you and the rest of HBBers, as always,
Jas
Can’t say how I determined this opinion ,but I believe the Power group knew everything that was potentially coming ahead with the markets ,and no doubt they hoped they could turn around
the crash before it gained speed . One of the problems Paulson and the Feds had was that they didn’t have certain powers that they obtained later down the road to work their magic . For example ,the bail-out of Investment Firms and Insurance Companies verses Banks , after giving them Fed Loans ,was a
new twist .
They knew. One look at that Credit Suisse graph — showing the Alt-A ARMs and the Primes resetting their neg-ams in that second hump —
They HAD to know. Hell even *I* knew and the last time I had economics was in 10th grade.
Just because their intelligent, doesn’t mean they can’t be stupid at the same time. Many of them didn’t want to believe because it didn’t fit into their belief system.
+100
Policy makers do not make policy for you and me, so ALL public announcements are either lies or coded messages decipherable only by those of the inner circle.
If you pay attention, you can often see and hear when they tell you outright they are going to fuck you over.
But these guys are all liars. They know what’s going to happen 5 years from now, but they aren’t going to tell you. You might not like what they are planning.
When they “reformed” the bankruptcy laws, they knew then.
Yes that long ago.
Hopefully my longer post will show.
LMAO!
Your comprehension of global economics can be etched in block letters painlessly on my forehead…
This graph serves nicely to indicate how the U.S. consumption binge was fueled by massive trade imbalances during the Greenspan era. Will the current account ever get back into balance again, as it did before 1980 and again only briefly around 1990?
Interesting how the 1992 and 2002 recessions made it go back up a bit.
Figures,…Mr. Bear promoting a “Flat-Line” for the patients economic health.
I was not offering a prescription for good economic health, but rather just musing whether something which could not go on forever might some day stop.
Nice graph.
It always seems to go back to that same time doesn’t it?
“It always seems to go back to that same time doesn’t it?”
Muir, Indeed. It’s kind of tough to deny the problem with the obvious is right in front of your face yet they continued to try.
You can certainly track the trade deficit to the expolsion of debt on the Z1.
Question is, which came first? Did they turn on the debt first and create the trade deficit, or was it out trading partners willingness to lend us our trade deficit back that turned on the debt?
Question is, which came first? Did they turn on the debt first and create the trade deficit, or was it out trading partners willingness to lend us our trade deficit back that turned on the debt?
My view is that the unions extracted a lot of money that the elite felt was theirs. So they promoted free trade in order to weeken labor. This decrease in labor costs was deflationary.To to prevent deflation they slashed interest rates to stimulate the economy to hide the fact that jobs were being lost and to prevent deflation. This created the housing mess and the service economy ( it was harder to outsource these jobs). The elite skimmed the cream during the entire process. The only problem came when the ponzi scheme came apart. Now they use government to minimize the losses on the dollars they could not extract in time. Then they will get the gov to support large loans to Hedge Funds that will at some point start buying up all viable buisnesses and commodity producers. Then we will get inflation further concentrating wealth in the hands of a small minority.
What a happy thought
It’s the history of the human race in a nutshell.
Reagan taught us deficits don’t matter.
As long as the generation in question lives it up and then passes on before the bill comes due.
CNBC story…
Dear Mr. President, A Bonus Isn’t A Bonus
Stop paying bonuses.
Call them something else.
Think of something boring like “annual performance-adjusted block compensation.”
The assertion of the author is that we aren’t made about the AMOUNT of the compensation, just the name of the compensation.
WRONG!!!!! Stop paying people millions, sometimes $100s of millions a year, for doing little other than creating asset bubbles that are going to get dumped onto the federal debt as part of a clean-up.
I don’t care if you call it a bonus or a dingle-berry, as long as your total compensation in under $400K a year.
And, there was this assertion over and over that any max compensation should only be on companies accepting govrnment money…
WRONG!
The money supply should be shrunk to the point that asset bubbles go away. Then NO ONE would be able to puff up fake profits from which to drain off 100s of millions a year compensation, then dump it onto the tax payer when it goes bad.
Darrell, since you want that limit to apply to everyone, let’s make sure it applies to Hollywood stars, professional athletes, and class-action lawyers as well.
Can Oprah get by on $400K a year?
Read the last paragraph again. I want to suck the money out of the system so the asset price bubbles stop. That will take care of the excess compensation issue.
“Can Oprah get by on $400K a year”?
Heavens no, won’t apply to The Oprah. It will only apply to the ‘evil’ rich.
Just the ones blowing asset price bubbles.
Stop the bubbles and the compensation goes away.
“Can Oprah get by on $400K a year?”
Well, $400K does buy a lot of donuts, even in these troubled times.
Darrell, your determinant as to when the money supply is adequately shrunk would be…?
Bubbles aren’t apparent until they’re about ready to pop.
Of course they. A simple graph can tell you when a bubble is operating.
“Bubbles aren’t apparent until they’re about ready to pop.”
Criticize Greenspan out of one side of your mouth and then quote his lies on the other.
Typical.
LOL
Instead of a salary cap, I’d rather see a mandatory ratio. You can make as much money as you want, but it can’t be less than, say, 500 times that of your lowest paid employee. If, for instance, the janitor makes x amount at Evilcorp, Intl., then the CEO is limited to 500(x). If the CEO wants to make more, then the janitor has to get a raise, too. This would harness the spirit of capitalism to work for everyone’s benefit. Then, with rising profits and good management, everybody’s wages rise, even the lowest employee feels they have a stake in the company and society, the toilets are sparkling clean, worker satisfaction rises, dogs and cats live together in peace, etc.
(Of course, I realize that this is just a pipe dream and would just result in endless attempts to maneuver around the law. In reality, first my theoretical janitor’s work would be outsourced to another company. But, the CEO of that company would want more than 500(x) too, and wouldn’t want to raise the janitor’s pay, either, so eventually every low-level employee would be an “independent contractor” who would be totally subject to the whims of Evilcorp, Intl. but wouldn’t get health insurance or sick leave or anything like that because, of course, they are “independent contractors” and not really employees of the company. The janitor would retaliate by voting for Democrats who will tax his evil bosses more, hoping that some of that will make it his way. In the meantime, he retaliates by doing a really half-assed job. The evil CEO, meanwhile, works ever-harder to pay as few taxes as possible, and shows his contempt for the janitor at every opportunity.
Well, that was a depressing intellectual exercise!)
“You can make as much money as you want, but it can’t be less than, say, 500 times that of your lowest paid employee.”
Hmmm, that sounds like a complex version of the rule to share a cake between two children as equally as possible: one cuts, one chooses.
BD, sounds like we’ve worked for the same companies.
The CEO will then out-source (contract labor) all janitorial, customer service, and clerical positions so that the lowest-paid individual in his organization is some 35-year-old mook with two degrees and a CPA (who oversees a team of contractors who do the real work)
That’s what’ll happen….
“Can Oprah get by on $400K a year?”
If she’s not asking for government money, why should she”
Entertainers are naturally going to see their income erode, unless they can capture a very large audience and there is still money in advertising.
Broadcast televisions is dead, major music labels are in trouble, and it is harder for any one entertainer to get the share of audience they did in the old days. You don’t need to put artificial constraints in, it’s going to happen if it’s going to happen anyway.
Can’t Corporations just understand that if people don’t earn decent wages they can’t afford the products that the Corporations offer. It’s clear that paying for products by debt hasn’t worked out and no doubt this was part of the greedy scheme of the short sighted Big Business and Money Changers world .
Corporations that think that they can take the lions share of the pot and still have paying customers are greedy short-sighted
pigs . The amount of money the CEO’s were taking ,while trying to say they had talent ,when it was really a fake debt /faulty lending boom that raised the profits of the Corporations ,is the real issue .
The long term plan of the Corporations was to expand to emerging markets World Wide ,while at the same time cheat the American wage earner more and more in the process by
out-sourcing ,dropping benefits ,and moving manufacturing to where-ever it produced the cheapest bottom line . The Corporations were headed toward a cheapest labor world-wide model for Business
while they earned those profits from debt slave American
fools . Now that the Corporations/Wall Street one-sided dream crashed the Corporations are getting rid of employees and bitching about any talk of a change in regulations and any kind of Protective measures for the American wage earner .
The foregoing is IMHO of course . Forgive me for not relying on the financial Authorities of this day and age .
I would agree, except that I don’t think most corporations or CEO’s have a “long range plan”. This crisis is the result of short-term greed and social Darwinism from those at the top. I don’t think they ever asked themselves any of the following questions:
“Is this moral or ethical?”
“Is this in the best interests of anyone other than myself?”
“Will there be any negative consequences from my actions (for the company, shareholders, employees, customers, country, world at large)?”
Now, probably somebody will pipe up and say that human’s generally avoid asking these types of questions anyway, no matter how small the stakes. However, it’s the last question that’s the important one. Sure, no surprise that they wouldn’t worry about the negative consequences for anybody else. That they pursued the things they did, regardless of the negative consequences even for themselves, says a lot about the level of derangement that prevalent in the upper echelons of the system…
Oh, wait, there haven’t been any negative consequences for them. In fact, they are getting free taxpayer money.
Never mind.
Externalities or Tragedy of the Commons, or maybe both. If megacorp pays its employees more, they might use the extra money to buy megacorp’s products, but maybe not and in any case they will use a bunch of it to buy other people’s products. And in order to have enough customers, megacorp needs all sorts of other companies to pay high wages too, and they can’t force the other guys to do that.
Henry Ford’s idea may have worked when he was the only guy making cars and a car was THE first thing that anyone with extra money wanted to buy (at least if they were auto workers and saw how cool they were), but it won’t work for most employers.
America was always a competition Country ,but that competition was between American Companies .
Once you bring in the equation of a Global wage force with all the different Countries playing by different rules, you have a problem, to say the least .
The regulations that were in place for years prevented Corporations from going haywire ,and of course lending was for most part based on the ability to qualify . To think that it was sound to use a World money supply to fund debt for Americans and other debt Countries was absurd . The World economy was based on a greed machine where the elite rich were getting rich off the unregulated systems as well as faulty trade and wage balances .
Wake me up when Corporation shills shut up about buying American Steel in the Presidents package ,rather than a World bid . Wake me up when America has its borders back and the idealist finally realize who gets rich by Globalism .
Who are you guys?! Do you have good bodyguards and lawyers? Rational thought, factual analysis and working for the common good while rewarding for merit, but still based on the realities of an imperfect world and making allowances for such are against the law these days. Didn’t you know that?
Cool Megabank, Inc graph:
Net Loan Losses / Average Total Loans for U.S. Banks with average assets greater than $15B
Recently climbing steeply above a ratio of 1, but still nowhere near early 1990s levels. I guess it helps when losses can be hidden off balance sheet?
Or just outright denied.
“Mark to model” ring a bell?
If you model it and run it fast in animation, would it look like an 8.3 on the Richter scale?
“So, 25% marginal 5% lost child credit 2% (8.3% x .25 approx because there is some rounding) lost student loan interest deduction
7.65% social security+Medicare 7.65% social security+Medicare employeer match that directly reduces my wage.”
“Total: 47.3%.”
Gee, stop whining.
How about 28% AMT, 7.65% social security+Medicare 7.65% social security+Medicare employeer match that directly reduces my wage, 10% state and local income taxes (with no federal relief thanks to the AMT), and, if I were to do something freelance, 3% NYC unincorporated business tax.
That’s 53.3%, or 56.3% for self-employment income. And if I choose to spend it, the NYC sales tax is 8.375%, for a total 61.675% or 64.675% for freelance income.
But it isn’t likely to stay that way. New York State will probably raise the state income tax 1%. They call it a “millionaire’s” tax, cut now that we have fewer it will probably kick in at $250K for a couple, or perhaps $100K.
People are calling for NYC to do the same with its local income tax, but for now the proposal is a sales tax increase to 8.675%.
The MTA, zillions in debt, has proposed a payroll tax of 0.33%. It is allegedly assessed on employers, but in this labor market guess who it will be shifted to? The business community is in favor.
And, with all these taxes, and with my kid’s high school being gutted, the city, state and federal governments are borrowing and deferring costs like mad, meaning even higher taxes in the future. I predict a marginal tax rate of more than 70% for spent income, perhaps as much as 75%, with diminished public services and benefits.
By the way, retirement income is exempt from FICA, and NY state and local income taxes, no matter how high it is.
“How about 28% AMT, 7.65% social security+Medicare 7.65% social security+Medicare employeer match that directly reduces my wage, 10% state and local income taxes (with no federal relief thanks to the AMT), and, if I were to do something freelance, 3% NYC unincorporated business tax. ”
Sorry, but I’m going to have to cry foul.
Even if you have no allowable AMT deductions you still get the lump sum exemption of $75K single/$150K married.
28% AMT kicks in above $175K post exemption. So, $250K single and $325 marreid.
The 28% AMT kicks in after the Social Security cap of $102K per person.
It is impossible to be paying both on your marginal income.
Not if your spouse earns more than you do.
Okay… I guess.
My bad.
give me a break. you won’t be paying near 7.65% ss tax if your income is in the amt level.
Oh, and yeah…. I’m very glad I’m in a low tax state.
I pay $1500 property tax on my house. My family in CA pays 3-5x that. I also have half the state income tax they have.
I should have added I was ranting only on Fed, not my state taxes.
And my sales tax is 8%. 9% restaurant.
50% unemployment (with stimulus). All it would take would be an average of one person of every couple losing his/her job. Already happened in my house. The odds of a couple not having either job affected are not favorable. Mr Obama, am I correct?
I am worried about this relative to my children, all of who are two-payer households.
whom, vs who
From my memory, UK’s housing bubble was larger than US and started a decline earlier than US. They are now seeing declines in their luxury market.
From today’s Bloomberg page one:
London Luxury-Homes Prices Have Second-Biggest Drop on Record
By Peter Woodifield
Jan. 31 (Bloomberg) — London luxury-home prices had the second-biggest decline on record in January as would-be buyers struggled to secure mortgages from banks hurt by the global financial crisis.
The average value of homes costing more than 1 million pounds ($1.4 million) in London’s most expensive neighborhoods fell 3.7 percent from a month earlier, Knight Frank LLP said in an e-mailed statement today. In the past 12 months, prices have slumped 21 percent, the biggest annualized drop recorded by Knight Frank.
“The sudden restriction of mortgage finance” was the main cause of the market’s decline last year, Liam Bailey, head of residential research at London-based Knight Frank, said in the statement. “This factor is continuing to cause problems for the housing market and the wider economy.”
The cost of buying a luxury home in the U.K. capital has fallen for 10 straight months, declining 21 percent since the market’s peak in March. The biggest drop since the broker started the survey in 1976 was 3.9 percent, recorded in October.
Financial-services companies in London may cut as many as 60,000 jobs in London by the end of 2010, according to research firm Oxford Economics. As a result, the market won’t rebound anytime soon, Knight Frank said.
“Price falls should begin to level out towards the end of 2009, although 2010 is likely to see prices move sideways at best,” said Bailey. Knight Frank now expects prices to fall as much as 35 percent from their peak, compared with its previous estimate of 30 percent.
Reyjakvik-on-Thames is in for some epic pain. They have barely any industry outside the financial sector.
“Reyjakvik-on-Thames”
“The cost of buying a luxury home in the U.K. capital has fallen for 10 straight months, declining 21 percent since the market’s peak in March.”
Now let’s add the huge decline of the GBP exchange rate to the equation and we must be over 50% decline in real terms already
Total decline from the peak, taking GBP rates into account, might get as big as -75%.
If I remember correctly the correction in the UK housing market started AFTER that in the US. In a BBC documentary some RE tycoon said that the London market (not the luxury segment) started to go down earlier, more than two years ago. But don’t count on bubble dynamics to match the US. The Dutch bubble started much earlier (around 1990) and is even bigger than the UK bubble, but still stable or growing (although most people think the real declines will start very soon).
90+% in real-terms but I’m an optimist.
Hey you Florida guys/gals,
Trying to be proactive here. Anyone know how to check if your landlord is paying the mortgage(s)? Manatee County. Thanks for any input.
Hey, how about the Battlestar Galactica episode last night! I loved it when he did that one thing…and then she…and Starbuck and Apollo did that one thing…and there that was that alien with the can of beets…
Hahahahaha! (I didn’t want to spoil it for any of yer.) Although I must say that examining Commander Adama’s incredibly mole-laden hide on last weeks episode has put me clean off chocolate chip cookies, at least for a while. I hope he’s got a great dermatologist.
But moving on; a good episode!
Yes. I watched the episode last night. I too loved what Adama and Starbuck both did. Although I have to say Adama did it much better.
Damn, these episodes are going by so fast.
Edward James Olmos was one sexy looking man when he was in Miami Vice.
I loved the episode too.. but who sends two guards to escort the freakin Admiral and a Cylon? Peg leg is soooo screwed.
Action-packed, indeed. Multiple strands of action leading off Gods-know-where.
(I wonder when you-know-who will spill the beans on you-know-who about you-know-what, you know …?)
I haven’t been staying up until midnight to catch them the last 2 Friday nights. But, I watched them on scifi.com today. AWESOME!!!
I love a series that you can tell is going somewhere. So much better than the soap opera type show where the writers are making it up as they go with no intention of it really going anywhere but cicrles.
Yup. X-files is one of them. A lot of promise, however the last 2 years the writers didn’t know what to do.
And here it is! I cut and pasted when you first posted it, cougar, with the intent of asking you later how your excellent girl-catching ideas was working fer you. (Assuming you was alive and uncrippled enough to type the answer in. I thought you might make it about 3 whole days into the bold New Year of 2009.)
Thanks for reminding me.
————————————————————————
Comment by cougar91
2008-12-18 10:42:06
Inspired by the various HBB gals on why nice guys can’t get chicks, I have made my new year resolution: I am going to go from nice boy to bad a*s for 2009. Here are a few behavior modifications I have came up:
2008 coug: Open car door for women.
2009 coug: Pretend to open car door for women, then as she is half-way out of the car, slam the door with full force and yell “Get yo fat ugly a*s out of my ride.”.
2008 coug: Say to her: “I would like to take you to see Yo-Yo Ma when he comes back”.
2009 coug: Say to her: “I would like to see yo mama behind your back”.
2008 coug: Say to her “I get along with women really well because I am a sensitive guy and a real good listener”.
2009 coug: Say to her “I really get down with yo hoes & b***ches”.
2008 coug: When finishing dinner at fancy restaurant: “I had a nice time with you, let me pay for this dinner”.
2009 coug: When finishing dinner at Soul Fried Chicken: “Yo lucky I am splitting it with yo ugly a*s”.
2008 coug: Say to her “One day I would like to have children and raise them the proper way. I love children.”.
2009 coug: Say to her “I need some more headcounts to fatten my welfare & TARP checks.”.
These behavior changes should now guarantee me & any other HBB dudes any women we fancy. Thanks, HBB gals.
Sorry, double post. But it’s so lovely and workable a plan that a double post is probably not remiss.
This post is dedicated to those of you who miss the trolls.
In Vancouver we have a local RE blog called “Vancouver Real Estate Anecdote Archive” which pulls quotes and anecdotes from the comments section on other blogs.
Here is a comment they found from Canadian Broadcasting Corporation’s web site, for their story “Condo-mania returns as buyers seek bargains in Metro Vancouver” (a local condo company is holding a sale on lot of unsold condo inventory). This is from about a week ago . I especially love the line “Most people are buying a home, not an investment”, when this guy is buying his third place.
“It really annoys me when greedy, lazy people complain about the cost of housing.
Yes, it is expensive!
Vancouver is the #1 place to live in the world.
Prices are not inflated tho. The price that homes sell for is exactly what buyers are willing to pay - and that is always how it will be. If you are not willing to pay those prices, then either give up on wanting to buy, or move somewhere cheaper. The prices will not drop drastically just because you want them to. Vancouver will ALWAYS have lots of foreign investors. That is the way things are here.
I make $52,000 a year and I own two large townhouses. I bought the last one a year ago. I have never been given any money from relatives or won anything. I dont have any special knowledge or opportunities. I simply wanted to buy a home, and made it happen. And then I wanted to buy a second one, and made it happen. Its not about how much money you make, because really, I dont make all that much! Its about your priorities and the decisions you make. If you really want something, go and get it!
Why buy now instead of waiting till “the bottom” has been hit? Well, we never know when the bottom has been hit until its already gone and prices have started to rise. Also, do you realize how many people are waiting for “the bottom”? Once someone declares that the bottom has been hit, the market is going to be flooded with buyers and there will be lots of competition and prices will rise. Right now there is a huge supply of homes and great interest rates, so even if prices do drop a bit more, you still may get a better deal now, just because there is so few buyers.
Even if prices do drop a bit more, unless you are intending on selling in the near future, it wont affect you. Most people are buying a home, not an investment , so even if prices do go down a bit in the short term, that has no affect on the value of your home say 10 years in the future.
If you want a home, and you can afford one, buy one.”
I will post links in a second.
Me, me, me! Lawd, I miss the trolls.
They are gone now never to return forever languishing in their garage-mahals with nary a gin bottle to help them remember their wistful dreams languidly wafting upwards like little fingers of smoke from their now-scorched credit.
Wow! Shades of James Joyce. Real talent, Puddytat.
Just for that, I’m revoking all your Times Square Rolex rights (such as they were?)
Aw, c’mon, anything but THAT!! Hey, it was a compliment, I LIKE Joyce!! Well, kind of.
Did I tell you the watch finally arrived? Other than being in the wrong time zone, it works great.
Oh, and I can’t change the time - it appears that the hands are painted onto the face…oh well, at least it’s right twice a day.
But hows come you had it shipped from Thailand?
Hedley Lamarr: My mind is a raging torrent, flooded with rivulets of thought cascading into a waterfall of creative alternatives.
Taggart: God darnit, Mr. Lamarr, you use your tongue prettier than a twenty dollar whore.
I noticed this morning when walking home from Shul that the neighborhood Realtors have a new tool in their arsenal: PINWHEELS! There were pinwheels affixed to all the open house signs I had to walk around.
That’ll get the sales going!
Links to the above post:
Condo-mania returns as buyers seek bargains in Metro Vancouver
http://www.cbc.ca/consumer/story/2009/01/20/bc-condo-mania-onni-richmond.html
“I make $52,000 a year and I own two large townhouses. I bought the last one a year ago.”
http://vreaa.wordpress.com/
Iraqi “free speech” …or… Democracy without heels?
Iraq sculpture honoring Bush shoe-thrower removed:
http://news.yahoo.com/s/ap/20090131/ap_on_re_mi_ea/ml_iraq_shoe_sculpture
..the statue had to be removed from the orphanage in Tikrit because government property should not be used for something with a political bias..”
Saddam must be spinnin’ in his grave..
Here’s the next asset bubble. Take a look
http://tinyurl.com/d6u7o8
Buy now before you are priced out forever.
That one made me come uncorked…
Price seems a little steep.. but quality don’t come cheap.
Let us not be too particular. It is better to have old second-hand earings than none at all. Twark Main
Ever get those emails from a scammer wanting you to cash a check for them take a look at Dear Mr. Scammer:
http://tinyurl.com/aws9y8
Too funny. Thanks for sharing that.
This one’s for you, Groundhogday:
www DOT cagle DOT com/politicalcartoons/pccartoons/permalink DOT asp?artist=stahler&date=090130
Long-promised various Vegas Valley maps and photos of malheur with attendant snarky comments
here