Bits Bucket For February 13, 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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Name:Ben Jones
Location:Northern Arizona, United States
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For some reason, the Commerce Secretary post is proving difficult to fill.
Financial Times
Blow to Obama as fourth pick withdraws
By Edward Luce in Washington
Published: February 12 2009 23:03 | Last updated: February 12 2009 23:59
President Barack Obama suffered the fourth high-profile withdrawal of a key nominee on Thursday when Judd Gregg, a Republican senator for New Hampshire, stepped aside as commerce secretary candidate, citing “irresolvable” policy conflicts.
Mr Gregg, who was to be the third Republican in Mr Obama’s cabinet, cited policy differences over the $789bn (£552bn) fiscal stimulus, which remains likely to be passed in the next two days, and on which the senator abstained when it came to a vote this week.
My goat, Scape, will take the job. His mate, Patsy can be his deputy.
Since there is no commerce, why would we need a commerce sec?
To restore commerce?
We need to restore confidence. Maybe a dept of confidence?
Appoint con men to the cabinet. That’ll do it.
What we need is to put a price on all them asset backed securities.
While it’s sure to be a short term disaster, and there will be lots of casualties, it will restore confidence by setting values, calming the markets and, by extension, vitalize the overall economy.
And it is possible to be proactive. Do our best to predict where the chips will likely fall. Stand at the ready with plenty of lifeboats and warm blankets available.
Pussyfooting around the issue as the ship takes on water accomplishes nothing. The captain and crew alternate between being paralyzed with fear and running around barking inane orders. Someone needs a slap upside the head.
Minister of Truth?
Minister of Truth?
We’ve always been at war with Oceana.
Judd Gregg, a Republican senator for New Hampshire…
Did anyone else read that as “Judge Dredd”?
Okay. Never mind.
Hahahaah! I didn’t see the headline, or I would have read it that way. I always do that. I recently read a headline ‘Demons hold convention’ and was gettin’ all excited, with images of a truly remarkable buffet table, for instance, and thinking of some demons bonking their horns together while reaching for the ’shrimp and damned souls’ canapes, and then I re-read it. It actually read, ‘Demos(as in, those boring ol’ regular ‘democrats’) hold convention.’
Sigh. Boy, was I sad to give up the dream…
Sigh. Boy, was I sad to give up the dream…
I really wish you were going to be at the HBB Demon’s Convention
Me, too.
*sad face *
‘Cause I bet you and me together could REALLY decimate a buffet! Not to mention show everyone how to dance good on top of a roof. I excell at that.
Yes.
reverse trans-lexdysia rules!
Are you calling me a lentil?!
You know I’m teasing yer, ahansen.
Possession is ninety percent of the law.
Subsidies For Loan Workouts Weighed
Several Aid Plans Being Considered By White House
By Renae Merle
Washington Post Staff Writer
Friday, February 13, 2009; Page D01
The Obama administration is considering a proposal to help distressed homeowners by subsidizing lenders who cut the interest rate on mortgages, according to sources familiar with the discussions.
Interest rate subsidies are not going to do the trick for many underwater owners, at least those who recently bought (or mortgaged to the hilt) homes whose values doubled or tripled since 1998. The problem for many is that of literally being hundreds of thousands of dollar under water. Lower rates (and consequentially lower monthly payments) may make it possible to keep going through the motions of paying off an unrepayable debt burden for a longer period of time, but the number of owner-occupant households for whom this changes the optimal decision from walking away to staying the course has to be marginal at best.
Exactly. How low of an interest rate do I have to be given if I have a $400,000 mortgage to stay in that mortage when the street is lined wth homes for sale for $199,900 and rents are $1600? Too many people are doing the simple math and realizing that, long term, they are better of ridding themselves of that extra $200,000 of debt.
At some point, the comparison gets so stark that even a FB with only a grade school education can do the arithmetic necessary to understand that walking away is the best option.
I don’t know about that. Two days ago I was looking at some jewelry for my wife. Tag said $200, 50% off. The clerk, I swear to God, pulled out a calculator to figure out what 1/2 of $200 was.
I’m thinking that grade 8 math was plenty enough to keep FBs out of homes in the first place. The REIC and finance industry has done a great job, however, of creating a mythos of complexity around money.
‘The clerk, I swear to God, pulled out a calculator to figure out what 1/2 of $200 was.’
Wow. If God had been there He’d a been pissed and administered a smack-down to the clerk. Probably turned him or her or it back into a monkey and sent them packing back to the jungle to try again.
See, He hates it when His creations don’t evolve into anything worthwhile.
You assume people can do simple math, they cannot, it will look like a bargin to them until three months down the road when they are unable to meet their obligations yet again!
Too many people are doing the simple math
I’m not sure that the majority can do simple math, Hell over 50 percent don’t believe in evolution, Over 60% can’t name a single supreme court justice, 70% can’t name one of their senators. The fact that they took some of these loans in the first place shows they don’t know how to use math. I think they will find many who will jump at the chance to lower their monthly payment without considering the fact that the duration of their loan will be extended.
I’m not sure sure. I think it was greed that was their primary motivator. Getting something for nothing. Stupidity just influenced how they chose to grab some bucks.
And because they were stupid, greedy people, they chose a risky way to make money. (Greedy folks with brains do more complicated scams: take Leon Panetta, with cushy consulting gigs paid with bailout bucks)
They’ll walk away if they think the EZ-Money game is over. They are faced with the fact that there’s no more get-rich-quick, and now it’s the boring thing of making payments for 25 more years….
I don’t think the math is the problem. The banks are in the same position as the FBers, and they CAN do the math. (Now, if they ignore the answers the math gives them, that’s another deal entirely).
I thnk the problem is that governments/banks/FBers are all trying to delay “taking the medicine”, and are hoping some miracle (gold/silver asteroids falling from the sky, candy-crapping unicorns, whatever) will suddenly put trillions of new dollars into circulation, allowing the bubble economy to be patched and reinflated.
They’ll walk away if they think the EZ-Money game is over.
Spot on!
They’ll walk, wait a bit, and many will probably then buy a house for a “normal” price and resign themselves to the 30-year thing.
That is why, above all, it is critical for the PTB to keep bailout hopes alive in the hearts and minds of housing market cargo cult members.
Another government reward for incompetence.
When is it going to end?
when the Chinese won’t play along anymore.
What makes you think the Chinese don’t have us right where they want us about now? Isn’t a lender’s primary motivation to stick their customers with an unrepayable loan and then to foreclose in order to collect on the collateral?
Isn’t a lender’s primary motivation to stick their customers with an unrepayable loan and then to foreclose in order to collect on the collateral?
Can’t foreclose on a customer that can print money to repay the debt.
Given that a significant portion of the borrowed money was spent on the military, no it may not be possible to collected collateral.
And besides - U.S. treasuries are not collateral-based. They’re based only on the “full faith and credit of the U.S. government”.
Note that the same is true of things like credit cards, which is why companies like Capital One are really, really up the creek. Not only do you get skyrocketing defaults, but you don’t even get any collateral to sell to make up at least a portion of the losses.
All those unemployed workers are going to get really board over in China. Once they have a taste of city life its hard to keep them back on the farm.
Skip,
China has an excess of people moving to the cities for jobs that depend on us buying stuff. They also have an excess of young men because of the one child policy and a preference for boys over girls resulting in selective abortions. What do you do with lots of excess young men with no jobs in a dictatorship?
If you answered put them in the army and point them at something, I think you are correct.
“Note that the same is true of things like credit cards, which is why companies like Capital One are really, really up the creek. Not only do you get skyrocketing defaults, but you don’t even get any collateral to sell to make up at least a portion of the losses.”
What’s in Capital One’s wallet? Apparently not much.
*Cue a bunch of barbarians running in to Capital One headquarters with swords*
polly,
“If you answered put them in the army and point them at something, I think you are correct.”
Now think gulf wars I and II. The first was for Iraq’s benefit, the second was the US learning from a very bad man.
What’s in Capital One’s wallet? Apparently not much.
Thanks. That made my morning.
What makes you think the Chinese don’t have us right where they want us about now? Isn’t a lender’s primary motivation to stick their customers with an unrepayable loan and then to foreclose in order to collect on the collateral?
Loan is always repayable when you can print cash. This is the economic equivalent of the cold war. Both sides have the ability to completely destroy the other, of course they will both destroy themselves in the process.
It could end if some bright economist with leadership skills stood up and pointed out the folly of encouraging households and firms to engage in behaviors that amount to throwing money down the drain in order to qualify for moral hazard subsidy payments.
There was that WSJ editorial!
It was pretty articulate. I don’t think that’s enough.
You must be referring to Anna Schwartz?
…the folly of encouraging households and firms to engage in behaviors that amount to throwing money down the drain…
What I keep hearing is that the “consumer” needs to have access to credit.
Hell, I haven’t had a credit card in over five years. Now, I know many people on this board use credit cards prudently, but when did they become indispensable to existence for the population at large?
Ever tried booking airline tickets or hotel rooms without a credit card on a regular basis? Or buying stuff online? Or buying theater/opera tickets?
Try it, and get back to us to tell us how that works out for you. They’re pretty much indispensable these days.
And don’t say, debit-cards because those are functionally equivalent. In fact, they are far less secure.
Sorry, I just don’t buy this old-f@rty back-in-my day-we-walked-uphill-both-ways-to-get-to-school stuff.
And don’t say, debit-cards because those are functionally equivalent.
I got a debit card, but I can’t charge more than $300 to it a a time.
I’ve gotten hotel rooms, rental cars and a ton of bike/computer parts online - haven’t flown anywhere, though.
You gots me there.
“Ever tried booking airline tickets or hotel rooms without a credit card on a regular basis? Or buying stuff online? Or buying theater/opera tickets?”
They all take debit cards. Besides, airplanes suck, buying stuff online leads to @sses the size of a hippopotamus, and how many times does one go to the opera?
I live five blocks from the Met so the answer would be all the time.
CCs became indispensable when J6P starting using them to buy a pack of gum.
No exaggeration.
I know people who are so paranoid about being robbed they brag about not carrying any cash. So I ask them how they feel about being robbed every time they use their CC.
Glazed eyes and convoluted rational then ensue.
The universal use of CCs to buy item less than $20 also resulted in prices being raised so the retailer can cover their transaction cost.
Hooray! We all lose!
yeah, that s— really ticks me off.
local place when it opened sold cortaditos (cuban espresso with some dairy stuff in it plus sugar) for 80 cents. I used to pay cash. the hipsters moved in and used CCs to buy everything and now cortadito is 1.25. I am sure dairy price increase had some influence, but dairy was actually already up when they opened.
It’s the small merchants that have to raise their prices since the attitude of the banks is “bend over and spread ‘em” on the interchange fees, while big boys like Walmart and Starbucks can negotiate really low transaction costs. Some locals get charged $1.75 per transaction. How do you stay in business that way?
Bankruptcy is the new hotness!
One in Nine Contemplate Bankruptcy: Report
By KELLY CURRAN
February 12, 2009 1:24 PM CST
Advertisements
Twelve percent of Americans have either filed or considered filing for bankruptcy, according to a new survey released Thursday by FindLaw.com, a legal information Web site. The number of consumer bankruptcy filings has nearly doubled in the last three years, from 573,000 in 2006 to 1,064,927 in 2008, according to the National Bankruptcy Research Center.
For the first time I can remember, I saw an ad on TV for a bankruptcy law firm. They said you can get to keep some of your stuff and your credit won’t really be hurt that much. They dismissed firms that offer debt consolidation because they don’t really help. What you really need is an expertly-directed bankruptcy. What a bunch of vultures.
Just as the stigma for getting a 2nd mortgage was marketed away as an equity loan/refinance Soo will the stigma of being BK.
When this crisis is over, having a foreclosure or bankruptcy on your record will be as common as having had a divorce.
Vultures don’t kill. They clean up the messy, rotting carrion.
Yep. Vultures get a really bad rap - unjustly so.
True: our bankers are parasites, not scavengers - they have more in common with chest-busters from Aliens than vultures.
Yes - parasites is a good analogy.
Problem is that parasites are not supposed to kill the host. The parasite banks though got a little carried away, and have sensed a loss of blood - they’re stepping back and uttering a big “oops” as they see the U.S. consumer dead on the ground.
Time to find a new host.
Speaking of Vultures, Time has the 25 People most responsible for the Wall Street crisis. As a bonus, you can vote on how guilty you think they are:
http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350,00.html
Problem is that parasites are not supposed to kill the host.
How about tarantula hawks?
‘How about tarantula hawks?’
I’ve always thought that the creepiest part was how the tarantula will most often stand there patiently while the wasp walks around on it, probing and prodding and fondling around for the best spot to inject the venom. Just stand there and take it….
Hey, wait…is there an analogy here, I wonder?
skroodle,
Great link to the Time article! I especially enjoyed the photo’s of the guilty bubble blowers. Big headed Mozilo’s pic is the best.
“Speaking of Vultures, Time has the 25 People most responsible for the Wall Street crisis. As a bonus, you can vote on how guilty you think they are:”
LOL at that list. The fact that it has Bernie Madoff on the list at 9, and doesn’t even have Barney Frank on the list or other key folks like Jamie Dimon points out the ignorance.
Plus Alan Greenspan should probably be #1 - certainly way above 17.
(one oops - I just realized the list wasn’t sorted yet - still though it very much should have Barney Frank on it. He’s top 10 easy.)
My vote for “under the radar” contributor goes to Doug Warner III. - e.g. from Wikipedia:
Business legacy
Analysts say that Mr. Warner was a key figure throughout the 1980s and 1990s in the transformation of J.P. Morgan from a commercial bank to an investment banking firm. For example, J.P. Morgan was the first commercial bank since the 1930s to be granted the power to underwrite debt and equity securities. Under Warner, the firm ended lifelong job security as a result of a 1998 restructuring. One of his biggest cultural marks on J.P. Morgan was the creation of the “House Arrest” group, a dozen or so senior executives who met monthly to discuss management issues.[4]
(emphasis mine)
Haven’t they already been doing this for at least six months? Do they think that there are still millions of people out there that would be fine, if only they had a lower rate? Has anyone seen even one recent example of a person who lost his house strictly because a bank wouldn’t lower the rate?
Cash4gold people are hiring.They are loking for the realtor types who can swindle more people.
I love those commercials - “you mean, I can get money for gold? Gold is worth money? I had NO idea!”
“Gold recently made a BIG move UPWARDS! Take advantage of it NOW!”
Here we go again, this plan/mistake is going to happen in some form and promises to open a huge can of worms. The law of unintended consequences. The shear ignorance of the D.C. tragic comedy troupe is mind boggling, at least to me.
PACTA SUNT SERVANDA?
“The contract must be met,” said the Latins. But not any more. If you entered into a mortgage contract and it is now uncomfortable for you to meet its terms the U.S. Congress appears ready to relieve you of your suffering. It proposes letting judges change the terms of your contract! They will be permitted to change the interest rate AND even cut the principal you owe!
Since Congress does not have a dime to pay for these revisions the bill must be paid by taxpayers - chiefly future taxpayers. Where the hell was Congress when our generation was struggling to meet its mortgage contracts?
Allowing mortgage modification in bankruptcy also could unleash a torrent of bankruptcies. To gain a sense of the potential size of the problem, consider that about 800,000 American families filed for bankruptcy in 2008. This year, rising unemployment and the weakening economy have already pushed the number near one million. But by recent count, some five million homeowners are currently delinquent on their mortgages and some 12 million to 15 million homeowners owe more on their mortgages than the home is worth.
” The nation faces a foreclosure crisis of historic proportions, and there is an understandable desire on the part of the federal government to “do something” to help. House Judiciary Chairman John Conyers’s bill, which is moving swiftly through Congress (and companion legislation introduced by Sen. Richard Durbin) would allow bankruptcy judges to modify home mortgages by reducing both the interest rate and principal amount on the loan. This would be a profound mistake”
I guess in a free market this would cause mortgage rates to double or triple to make up for the increased risk … but in our socialised markets that is not allowed.
I’m afraid something similar is coming soon in the Netherlands
That probably means that banks will stop lending all together or require something like 50% down. That in turn will put a damper on demand which in turn will put further downward pressure on prices. Lower prices will put more folks under water. That means more people are going to walk, etc.
No matter what our politicians cook up, you can’t print or legislate yourself to properity, but that won’t keep ‘em from trying.
“No matter what our politicians cook up, you can’t print or legislate yourself to properity, but that won’t keep ‘em from trying”.
Ed-Zackery
I’ve said this before, but I’m still amazed that Senators from 46 states would agree to send all their constituent’s money to California, Florida, Arizona and Nevada. It’s not just the quantity of mortgages in those states, it’s that the dollars upside-down per mortgage is so high. How many FB’s in Kansas are upside-down by $200,000? Probably very, very few. How many in California? Most of them.
It’s Casino Capitalism and Socialized losses…..
All I want is socialized medicine!!!
Oh, there are plenty of F’d buyers in other states, but most of them were not “subprime” - they just Alt-A and Option-Arm loans as ways to destroy themselves.
Maryland is one example: housing costs AT LEAST 5x median household income for any area if you want to buy anything more than a gutted tear-down. That is not sustainable… but by the time anyone realizes that, we’ll have sent all of our money to some other state to help the F’d buyers there!
As a Californian, and a believer in personal responsibility, I agree. Why should someone from Alaska subsidize my neighbor’s foolish decisions?
“Since Congress does not have a dime to pay for these revisions the bill must be paid by taxpayers - chiefly future taxpayers.”
Can’t the Fed just print the money (or do the electronic equivalent thereof)? So far as I can tell, that’s the plan…
PB, still neutral in the inflationist/deflationist outcome?
I’ve never been neutral. Deflation short term, inflation long run. Albeit the short term lasted upwards of 15 years in Japan, and in the long run we are all dead.
+1
“…inflation long run.”
I was hoping for the longest time the spinning arrow would stop @ 14+ % but there were too many 1% & 0 % numbers on the dial to be very optimist of that actually happening. Then again, my Dad taught me a thing or two about “carnival games” & the “callers” that promote them.
As Sir Greenisspent slips into the mist…Hwy ask again: “what will these “magic beans” do? And where well I find the “Goose-that-laid-the-Golden egg”?
PB,
You did say to count you in the deflationist camp, albeit a temporary camp, about a month ago.
Your answer today is, well, delphic.
You said ‘delphic’. Awesome!
As an aside, I was thinking about becoming an oracle the other day. Why not? I already got all the bizarre headgear anyone could demand in a prophetess, and I also already like to breathe in strange fumes. All I need is some acolytes, and I’m working on that.
Olympia — You might consider a future in central banking, as Sir Alan Greenspan was a latter-day delphic oracle if ever there was one.
Oly — To further my case, note that there has already been a latter-day saint who served as prophet, seer and revelator at the Fed (Marriner Eccles).
Asmy wife said… We should go buy a $1 million home so that the government will help make our payments for us.
As a Realtor™ might suggest to you, “Buy the biggest house you can afford.”
“Buy the biggest house you can afford.”
That is soooo 2008. Now you buy the biggest house you can’t afford. You don’t get free money if you can afford it.
… but still VERY 2009 in Netherlands and much of Europe
Well with the benefit of 20/20 hindsight, I SHOULD have bought a bought a nicer house in 1999.
Whocouldanoed mortgage rates would fall so far that I could refi to a 4.875% 15 year fixed in 2003? But of course I was more concerned with downside risk and making SURE that I could afford my mortgage.
“But of course I was more concerned with downside risk and making SURE that I could afford my mortgage.”
I used the same line of thinking as you when we purchased our home. I feel kinda foolish now thinking like that but I dident know the meaning of the word leverage at the time. What a Fool I was for playing the game on the safe side.
We should go buy a $1 million home so that the government will help make our payments for us.
Even the gulfstream socialist Congress is frugal enough to define a limit on when a home buyer is an FB. I think they will make responsible savers pay for the foolish mistakes of anyone who bought a home before January 2008 or HELOCed before January 2008. But the knifecatchers starting in 2008 are on their own.
I have a little trouble with your numbers. First if there are 300 million people in this country and the average family size is 3.19 That means that there are basically 100 million households. Now if 69% (probably a little high) own a mortgage that would mean that there are 69 million homeowners.
So you are saying that about 22% of people owe more than their home is worth? I find that a little hard to believe.
Not my numbers, from a WSJ article…
http://online.wsj.com/article/SB123449016984380499.html
“But by recent count, some five million homeowners are currently delinquent on their mortgages and some 12 million to 15 million homeowners owe more on their mortgages than the home is worth. If even a fraction of those homeowners file for bankruptcy to reduce their interest rates or strip down their principal amounts to the value of their homes, we could see an unprecedented surge in filings, overwhelming the bankruptcy system.”
Yepper — there are the numbers, right in the Wall Street Journal article. Watcha think, WAman?
100114- 69 pct of 114 is about 70 pct of 110 = 77 million homeowner households
“So you are saying that about 22% of people owe more than their home is worth? I find that a little hard to believe.”
- You must not know many Californians. BTW, with 37m population, CA is the largest population state, and also one of the most underwater.
Add FL to that list, and I’ll bet you have 70% of the underwater homeowners in just those 2 states.
Florida and California underwater? Michael, I didn’t know you were an Al Gore Fan!
Underwater or not, what a gorgeous day here in PBC, huh?
SFC,
Yes, it most certainly is. I have to go down to Sunrise this afternoon, but man, what a day. Hope this weekend holds this kind of weather. FL has many bad attributes (and just to be clear, has NO shortage of land) but this time of year in S. FL is just wonderful.
and the most underwater country is obviously the Netherlands …
Oh, it’s not water we’re under here. It’s b***shit. Buried up to our necks:).
If IT isn’t true today, it will be true or worse by the 4Q of 2009 .
“…some 12 million to 15 million homeowners owe more on their mortgages than the home is worth.”
I can’t believe the figure is that low.
100 million household. 67 million of them own homes. 40% own free and clear = 40 million mortgages. 1/3rd upside down….
I think this is the number Zillow puts out. But, it is BS. Zillow says my house is worth $180K, but one behind me sold for $130K and one down the street for $118K.
My guess is that it is at least half.
“This would be a profound mistake”
Again, I don’t agree. Businesses and the wealthy walk away from or renegotiate their obligations all the time.
The ban on renegotiating mortgages in bankruptcy came with a whole lot of other restrictions, like downpayments and PMI, only using second liens for a few very important things like home repairs or college, fixed rate loans that amortize the princinple, etc.
Well guess what — if the stupid loans are renegotiated in bankruptcy, perhaps they won’t be made anymore. At least for a while anyway, because plenty of stupid non-mortgage loans were made in the past few years too.
“Businesses and the wealthy walk away from or renegotiate their obligations all the time.”
Good point. Recently I saw Mitt Romney on TV and he said that the Big Three automakers should declare bankruptcy so that a court could invalidate their contracts with the UAW. That would screw the union workers out of deferred compensation that had earned and been promised, but for some reason that’s just fine with the people who wail about “the sanctity of contracts.”
GM/Chrysler/Ford are pretty efficient these days. It only takes about 20 hours to make a car.
Even at 100/hr, that is only $2k on a $40k Suburban or even $25k Ford Focus.
Reducing employee costs to zero would not fix the auto industry right now.
Don’t mention that to the good old Southern Republican boyz:
Shelby’s / Corker / McConnell, …they may wish to remind you of the “low cost” “cotton pickin’” employee plan that allowed them to be quite “profitable” in their industry in the 1840’s
Their industry? 1840’s?
heh.. you Dems better scramble quick if you hope to revise all traces of your history. Lots of books yet to be burnt.
“Founded in Ripon, Wisconsin, in 1854 by anti-slavery expansion activists and modernizers, the Republican Party quickly surpassed the Whig Party as the principal opposition to the Democratic Party. It first came to power in 1860 with the election of Abraham Lincoln to the presidency and presided over the American Civil War and Reconstruction.”
wiki.. “republican party”
Joey: unfortunately, the Republican party has been taken over my Dixiecrats. It’s no longer the party of Lincoln. Notice the emphasis today on “state’s rights”. That’s NOT what Lincoln was about.
the good old Southern Republican boyz
You are uninformed. Around here the most racist individuals are usually democrats e.g. the only member of the KKK in the senate (as far as i know) is a dem, Senator Byrd. A friend of mine, his grandfather hasn’t voted repub his entire life b/c Lincoln freed the slaves. I haven’t seen the old man in a while, but I guess his head must have ‘asploded when he got to choose between a black democrat and a white repub.
Additionally, it was the southern democrats who tried to block the civil rights bill in the 60’s. The repubs are what made the vote go in favor.
Not that I support either party really in most regards, but if you’re gonna shill at least make some attempt to get your facts straight.
Complete the logic Joey.
And where did the majority of segregationist Dixiecrats go to when they were chased out by the DNC? That’s right folks…… the good ol’ GOP. And the hate lives on in the hearts and minds of those who just won’t let go of all that cheap labor thanks to water carriers like Lott, Sandford and and their corrupt ilk.
NoVaWatcher .. while it has nothing to do with the fact that Democrats absolutely dominated Southern law, culture and politics up ’till around 1950 or later, i find your comment about Lincoln interesting.
Lincoln was as much aware of and supportive of States rights as he was any other part of the Constitution.
July 4, 1961 .. Lincoln, message to a special session of Congress:
“”Unquestionably the States have the powers, and rights, reserved to them in, and by the National Constitution; but among these, surely, are not included all conceivable powers, however mischievous, or destructive;..”
“destructive”.. meaning he didn’t think states has the right to secede from the Union.
Have you heard the GOP promoting such a notion lately? If so, where?
That there is even a (former) member of the KKK in the Senate at this time is an absolute disgrace. The tards repeatedly voting this waste of oxygen into office exemplify everything that is wrong with humanity.
In Texas, Lincoln freeing the slaves pissed everybody off so badly that they stayed Democrats right up until the civil rights movement. Then, that pissed them off so badly that they all became Republican. Many Southern states followed the same path.
Remember when Ted Kennedy was in the hospital…was it last year?
I have a vivid memory of watching on CSpan Old Sen Byrd, a person who so violently hates black people he joins an organization committed to their eradication, crying and boohooing over his “good friend” Ted Kennedy, who as a Kennedy is FAR too important to have his future destroyed over the murder of a mere peasant girl.
It was a truly touching moment. And of course Dems across the country pulled together in support of two of their most respected members.
lol
Yeah, they really are the party for the beaten down; for the little guy; for the ones who can’t protect themselves.
I shall never fight in the armed forces with a ***** by my side… Rather I should die a thousand times, and see Old Glory trampled in the dirt never to rise again, than to see this beloved land of ours become degraded by race mongrels, a throwback to the blackest specimen from the wilds. ”
— Robert C. Byrd
I wonder how many black votes he gets, since he’s one o’ them democrats that’s gonna save black folks.
I wonder how many black votes he gets..
a lot.. black and white.. because they are owned. Bite the hand that feeds you and you gotta fend for yourself. Democrats are expert at keeping their constituents chained to the democrat party.
Am I in an alternate reality? What about Nixon’s “Southern Strategy”? What about the riots at the 1968 Chicago DNC? What about Massachusetts? The Republican stronghold that turned into Demo one-party rule. As for the pols, yes, some of the old hawks like Byrd and Zell refused to switch parties, others, like Helms, did.
There are still some “old school” dems left in North Florida. The suspicion that Jim Davis was one of them was one of the reasons that Charlie Crist won the race for governor. The first thing he did as governor was to banish “Old Folks At Home” and replace it with a newer composition by a Florida native.
WT Economist,
Finally a “behind closed doors” peak at what has gone on behind the scenes on this topic.
http://finance.yahoo.com/news/How-Banks-Are-Worsening-the-bizwk-14351718.html
I think it settles a LOT of issues we’ve debated here.
No surprise here. Why would anyone expect the very actors that caused the problem to be the ones to fix the problem?
If we’re lucky, after they finish shooting themselves in both feet and hands we may still have a country left to salvage.
“…because plenty of stupid non-mortgage loans were made in the past few years too.”
But why let that $200,000 “equity” just sit there on a piece of paper in a file cabinet?…put that money to work! Extract your “wealth” and let the smart money boyz take care of it!” Get hip!
Daffy Duck: “Consequences, Schmonsequences, as long as I’m rich.”
But so long as you’re living there (or renting it out) that equity is, indeed “working.”
” House Judiciary Chairman John Conyers’s bill, which is moving swiftly through Congress (and companion legislation introduced by Sen. Richard Durbin) would allow bankruptcy judges to modify home mortgages by reducing both the interest rate and principal amount on the loan. ”
Now you know why the lady said “When Barack gets into office, I won’t have to worry about filling up my gas tank or paying my mortgage”.
This is a new era in economics wherein only the evil private enterprise employers and greedy bankers have to pay for things, as they should. The Government can take over everything and now it will be better. I for one am very happy that I won’t have to work anymore since the Government will take care of me and pay my bills. This has been a long time coming. Thank Barack for saving the USA.
yeah but you forgot the part about the trade off:
Gubmint will pay for all your necessities as long as you let them plant a chip in your brain that ZAPS you every time you utter a syllable against the Mighty Unicorn.
Read the fine print, baby.
“This is a new era in economics wherein only the evil private enterprise employers and greedy bankers have to pay for things, as they should.”
You mean they’ll stop trying to screw their employees, ripoff their vendors and lying to the IRS, the SEC and their shareholders and the public?
Wow! Talk about a fantasy!
(MarketWatch) — A program that would subsidize mortgage payments for troubled homeowners subject to an affordability test is being considered by the Obama administration…
Another reward for the incompetent.
When is this going to end?
Remember that video clip where the woman, who had just experienced a religious type of rapture at an Obama campaign rally, said Obama will help pay her mortgage? She was right!
http://www.youtube.com/watch?v=P36×8rTb3jI
Obama and the Dems will pander to the DNC’s core base of the unintelligent and unproductive who want entitlements that the middle and working classes will pay for.
“Each according to his ability ,each according to his need .”
(The Communist Handbook)
Kind of sounds like what the Repubs have done and still do.
Oh, but a lot of them ARE working–”I work hard, I deserve it.” They just don’t like their piddly salary, so they’re trying to get rich quick some other way.
Yup, the total deadbeats did show up to vote but I would consider them a ‘halo’ constituency, not the core. These are not the folks who show up to primaries or local elections or local office “strategy” meetings … or who are providing the money.
Lots of people trying to live beyond their means. In 2000, the Repubs were all “Dare to be rich! We will expand your means so you can live high!” and the Dems in 2008 are all “We’ll hook you up with credit so you can keep spending in the manner to which you are accustomed.”
Remember all the SUVs with W stickers?
I have figured it out. The plutocrats are in charge, the parties are their puppets. Republicans use tax policy, EZ credit, and out of control military spending to make the rich richer and destroy the middle class, while the Democrats use inflation to rob the middle class of every last penny. Both convince middle class rubes that their policies–be they student loans and tax “credits” or tax breaks for hedgies and deregulation–will actually make middle class working people more wealthy. In the end there is no middle class and you have a 3rd world country, but no worries, it’ll be easier for the plutocrats to find “good help.”
I’m starting to believe in a rapture too.
Although it has nothing to do with religion - but with personal responsiblity, accountability, and the ability to perform simple math calculations.
Those of us who have been responsible with our money will be raptured off this miasm of incompetence and enablement of jackassery and nincompoopia.
… A program that would subsidize mortgage payments for troubled homeowners subject to an affordability test is being considered by the Obama administration…
Another reward for incompetence.
When is this going to end?
“When is this going to end?”
When we all decide to move to South America en masse.
When a tax revolt forces it to stop?
In the first paragraph in the Declaration of Independence note the line that says the citizens will tolerate tyranny for awhile before they revolt. It did not say how long. This toleration could take years or decades.
You can hasten the 2nd American Revolution privately by being an extremist in tax avoidance (I did not say tax evasion). You will have more money of your own left over and will be able to finance your way out of the Socialist Republic of the U.S. if it gets down to it. You will also help by shutting off some of the funds going into this socialist regime. Eventually enough producers will shut off the spigot and the recipients of the government checks will have nothing.
Of course being unemployed is a great way to avoid income taxes and not buying stuff avoids sales tax. There are a lot of involuntary recruits to the war on taxation.
Which is why this “income tax holiday” is such a joke.
No job=no income=no income tax to pay.
Uhm, unemployment payments ARE taxed.
You are reading between the lines. Tell me, do you follow the speed l.imit? Do you use your turn signals consistently? Do you yield when the sign says to yield? Have you ever driven a vehicle while having a buzz and never were caught?
How many millions of people got away with these? You can be next.
I’m just saying our society is becoming more fascistic and it’s an observation of mine that when jobs are scarcer and scarcer, the authorities will find an excuse to incarcerate anyone who does not conform.
oops. This post was meant for below. IE 8 beta is giving me a problem.
I’m just curious what’s going to happen when they do all their mortgage doctoring and people continue to default.
When is this going to end? Zimbabwe?
The housing market will have to wait for another day for its government help. Home builders and Realtors pushed for a $35 billion tax credit to support home sales. The heart of the package was a $15,000 tax credit to buy a new home, included in the Senate bill.
But it was eliminated from the stimulus in the House-Senate compromise. Instead, an existing $7,500 tax credit for first-time homebuyers was expanded to $8,000 and extended to the end of 2009.
Politico: Winners & losers in stimulus fight
Amounts to a big ZERO. On second thought, I’m certain there are a few braindead asswipes who thinks it’s a good idea to spend $300k to save $7500.
What’s in the stimulus bill for renters? It seems unlikely the $8,000 knifecatcher encouragement subsidy will measure up to foreclosure prevention cramdowns. The latter would have to be huge to provide sufficient incentives for deeply-underwater homeowners to stay put and keep paying the mortgage.
Oh don’t worry, renters haven’t been left out. You get to pay for it.
I think you have to pay that tax credit back ay 500 / month for a number of years.sounds like a joke to me.
I heard the payback requirement was eliminated in the current “stimulus” bill.
That is correct. It’s a $7500 tax credit.
The $7500 was an interest free loan over 15 years. The new one is $8000 max and a real credit, not a loan.
Did they keep the clause that allowed the credit to be transferred in payment of some liability or expense incurred acquiring the house?
AFAIK, the payback has been eliminated. I believe I saw that the other day. Those people who took last year’s stimulus are p**sed off now (the one that did have to be paid back)! Not only did they lose 20% or so in value, but they also are paying back a loan that the guy next door gets for free. Catching knives is VERY dangerous!
Dutch bubble update:
the Dutch economy keeps deteriorating at record speed. Four months ago it was ‘in perfect shape’, latest estimates now state the government will have to cut spending by 20 billion in order to comply with the Euro budgetary rules. The only budget post that is big enough to provide such an amount is the home mortgage deduction and subsidies for rental properties (total over 30 billion). So far the government has ruled out any changes to homeowner subsidies ‘because of the bad situation for homeowners’, but the discussion continues.
The Dutch housing market looks calm from the surface, with prices still rising modestly yoy. However, january sales numbers plunged a record 48% (or -38% yoy) and the media have started to write about a ‘buyers strike’. The last time that happened, in 1979, prices plunged by 40% within the next 1.5 years. And this time the previous price runup is at least 5x bigger …
Nobody tracks empty homes here, but the number of people who own two homes (with one of them empty and for sale …) must be at an all time high. This won’t change quickly, because the government is doing everything they can to stimulate owners to cling to their with prices by all kinds of subsidies for the second home (tax credits, cheap bridge loans etc.).
“…the government is doing everything they can to stimulate owners to cling to their with prices by all kinds of subsidies for the second home…”
I guess Tulipmania never ended, then?
So far as concerns owners of two homes, would the households in question typically have sufficient wealth to properly maintain more than one home (including making PITI when prices are flat or falling)?
Netherlands has seen tulipmania in various flavours over the years … once every 1-2 generations you can successfully start a new version of a national pyramid game.
The cost of owning a second home (rentals or speculative properties don’t qualify) is very low here, for the first two years effectively 1-2% of the purchase price. So people will gladly hold out for a few years, in the hope that prices will be 10% or more higher than so they more than make up for the carrying cost. As long as there is no outright fear regarding (big) price declines, this won’t change.
I think many of these people don’t have real assets, except the homes they can borrow (more) against. As long as official valuations keep climbing (they still do over here) there is no problem. But that could change on a dime; from that moment it is going to be slow drip that will kill many of them.
Fortunately our government is going to run out of money before the bubble really bursts; that hopefully prevents them from implementing the most stupid policies.
The last time that happened, in 1979, prices plunged by 40% within the next 1.5 years. And this time the previous price runup is at least 5x bigger …
Options?
A.) increasingly desperate governmental measures
B.) a market where the bottom drops out dramatically
C.) a combo platter
Should be an interesting couple of years, regardless.
(What are the penalties for not complying with Euro budgetary rules?)
A. for sure (despite the fact that they are short on money)
B. probably not as long as rates are extremely low
there are no official penalties for not complying with the euro budgetary rules. I think in 2009 none of the member states will comply … from that moment on it is a matter of time before some of them rack up huge debts (which is very profitable for those who do, and very damaging for countries with a more solid economy/policy).
In some way the euro will be toast; but difficult to say what will happen, opinions are divided (e.g. some PIGS leaving the euro, hyperinflation, total euro collapse with countries reverting to their old currencies?).
In some way the euro will be toast; but difficult to say what will happen, opinions are divided (e.g. some PIGS leaving the euro, hyperinflation, total euro collapse with countries reverting to their old currencies?).
I’m very curious to see what happens to the EU once the dominoes really start falling — the Union has such diverse nation-states and such little centralized power that it’s difficult for me to envision how the EU escapes intact, or without serious diminishment, at least.
‘Nobody tracks empty homes here, but the number of people who own two homes (with one of them empty and for sale …) must be at an all time high.’
How much money does the Netherlands have anyway?
the Dutch private debt load is about 1 trillion euros, against about 400 billion or so of money on savings accounts and in stocks/bonds. Most of the debt is mortgage debt, of course. But don’t worry (as our officials tell us), the current value of the homes is significantly more than the debt load. And of course, the people who have the savings are not the same ones who have the debts …
Now if homeprices start to decline seriously there would be a tiny problem. But of course that can’t happen, it’s different here
What happened to the Republican party?
I thought they were in favor of letting American keep more of what they make. Well, I’ve heard several of them call the tax credit in the stimulus “Wasteful Spending”.
One of them, missed the name, actually just said, “How is buying new cars for beurocrats a stimulus?” Honestly? Really? You don’t see how buying cars may help the auto-makers employ people? Seriously?
Jon Stewart nailed it last night…. For 8 years, Republicans spent like drunken sailors, and the day Obama took office, suddenly all this has to be paid back by our children. We can’t spend $800 billion to help unemployed Americans, but the Republicans had no problem with $200+ annual deficits, $600 billion for Iraq war and $1.2 trillion for capital gains trax cut.
Stewart says… Hey, American has weapons of mass distruction! Why don’t we invade ourselves so the Republicans won’t mind spending $800 billion to rebuild us!
And here is the kicker. One, on CNBC, just accused Obama for really dropping the ball by letting the house Dems write the bill. So, the reporter asks, Why did he do that? The Republican congressman says it was a major error.
How about this you idiots???? The Constitution says SPENDING BILLS ORIGINATE IN THE HOUSE!!!!! The Republicans wrote a bill too! And it got voted down because they got their butts kicked in the last election…. because they spent like drunken sailors for the last 8 years.
It costs $116 Billion to get each worker $7 a week more in their paycheck. The $116 B (plus interest) will hurt and is serious money, but the $7 a week will do zilch, nada, nothing to stimulate the economy, so to my mind, the $116 B is a total waste. Not all tax cuts are created equal.
Also, while spending bills may originate in the House, it doesn’t say a newly elected, very popular President has to let Nancy Pelosi screw up a good chance to get some positive things done. He’s certainly allowed to “suggest” things to her or even present ideas, numbers and language to the House and he didn’t and she went off the deep and and has now paid for it by losing a lot of the overreaching she tried for.
I think that constitutional thing was done away with last September when the Senate modified a bill to include the $800 billion TARP giveaway after the House didn’t pass the first one.
“I thought they were in favor of letting American keep more of what they make.”
How does wrenching a lump sum tax payment of $700 bn out of the American treasury and handing it over to Wall Street bankers who threw a far larger sum of money into the housing market’s giant toilet bowl fit into the Republican plan to help Americans keep more of what they make?
So all that credit created over the last 8 years, a terrorist attack on NYC, an all time high on the Dow, and a boom in real estate like none other was all the Republicans doing right? Dems had nothing to do with it. Ok sure why not. Then everything good and bad that happens in the next 4+ years then must be the doing of the Democrats right?
No. It was all your fault (meaning everyone that participated or did not speak out). You politcal guys keep letting these hacks play blame tennis and you fall for it every time. It’s your fault, no it’s your fault ad infinitum.
That’s why I laughed at Munger’s article the other day. Partisan politics will always be the norm in this country because the voting population doesn’t want solutions that may work (stimulus plan HA!), they want people to blame. That may change if we really go down the crapper, but meanwhile the tennis game goes on distracting you as your pockets are picked clean. Suckers.
Yet you’re the first to jump up and bemoan partisanship when the GOP gets rightfully lambasted for their corruption then join in the democrat bashing.
Nice.
Did I bash a Democrat? No. I will make it painfully clear again exeter, when Chimpy was elected I lambasted the Republicans that put all the tech crash blame on the Democrats. Now I will mock the Democrats that put all the blame on the Republicans. They are both at fault. They are both horrible institutions.
You, on the other hand, obviously have no problem with playing the blame game. I guess it makes you sleep better at night knowing that the banner you wave is always the righteous one.
We are all suckers now.
Don’t get me worng, I’m one of the people that agree that both parties suck.
I just wonder what happened to the Republicans that they magically switched from big spenders to fiscally responsible on a single day… What happend on that single day????? Oh yeah, they lost all power.
You guys DO realize that Jon Stewart is a ‘comedian’ first and foremost, right? Just strikes me a lot of GOP-Bashers ( many of whom claim “they don’t watch much television ) paraphrase Jon Stewart?
Just… an observation!
“You guys DO realize that Jon Stewart is a ‘comedian’ first and foremost, right?”
Yes. A liberal (and far more talented) version of Rush Limbaugh.
and what do you call Bill Oreilly and Rush Limbaugh?
Stewart is actually better than most of the reporters out there. His comedy is about pointing out the obvious to those that try to hide it.
I haven’t been keeping up with Stewart or Colbert recently, but I’ve got to believe they’ll be just as nasty at beating Democrats over the head with the truth.
And who do the GOP Boosters paraphrase?
Al,
No offense but I think that has -already- been safely debunked. My point is that a great majority of self-identified liberals claim “they seldom watch TV or read U.S papers” rejecting them as being “too biased” in preference for British or int’l publications, yet day after day spout Stewart’s lines.
That’s all.
… a great majority of self-identified liberals claim …
I enjoy your highly scientific analysis of liberal demographics.
A “great majority” of self-identified liberals claim that they seldom watch TV or read US newspapers? Are you nuts?
polly,
Can’t speak for The Beltway but as far as I can tell it’s a -very- common stance just about everywhere else. Kind of like people here that lambast Kudlow/Cramer et. al but claim they wouldn’t be caught DEAD watching the show!?
DinOR,
I’ll start out by saying I haven’t been able to catch the Daily Show recently because I’m mostly watching Wiggle and Learn with my kids. But if Stewart’s show is going to survive, he’s gotta go after whoever is in power. The Pubs have been giving him plenty to work with, but now it’s BO’s and the Dems turn. They seem to be off to a good* start. I’ll be disappointed if he doesn’t work just as hard to embarrass the Dems with the facts, and I think it’s too early in BOs presidency to assume that Stewart is giving him a free pass.
If my theory is correct, I’m sure plenty of self identifying Republicans will be quoting him soon enough.
* By good I mean flopping around giving comedians material to use.
Yeah, I’ve been wondering where their ‘come to jesus’ moment could have been, over the last 8 years….
Don’t get fooled again. Vote for none of the above.
What happened to the Republican party?
They were hijacked by the neo-cons with their fantasies of installing pro-US and pro-Israel democracies by force in the Middle East, by the military-industrial complex eager to cash in on such a hopeless but lucrative enterprise, and by Wall Streeters and Banksters who imposed K-Street values, not Main Street values, on the Republican Party.
And yet millions of dupes still vote for this zombie party that has sold its soul to the predatory financial interests and speculators that are ripping their meat from their bones.
Run! ….Cheney has a scowl & “paddle” in BOTH hands!
Stick to housing.
+1
“One of them, missed the name, actually just said, “How is buying new cars for beurocrats a stimulus?” Honestly? Really? You don’t see how buying cars may help the auto-makers employ people? Seriously?”
The Big Three automakers have so many of their own problems that they subbornly refuse to correct - namely incompetant and passive management, a dealer network (protected by state dealer laws) that bites the hand that feeds it on a regular basis, and an onerous and ridiculous set of union contracts that would strangle any company - that having federal cars bought just to support them frankly amounts to ineffective and silly largesse.
Frankly, Obama needs to tell GM/Chrysler to file Chapter 7/11. (Chapter 11 for GM and 7 for Chrysler; GM is a going concern that has made solid progress on improving its products while Chrysler’s product line is mostly pure garbage and it shows in its sales figures.) Furthermore, Chrysler is owned by a multibillion capital management firm (Cerberus) that could invest some money into the firm if it wanted to - but it refuses to do so. As far as I’m concerned, Cerberus has no right to ask the American taxpayer for for any sort of money to “help shore up” its piss-poor investment. Did I mention that Daimler just listed its 19% stake in Chrysler as being worth zero (0) dollars? Zilch? Zip? Nada?
Ford should be commended for the fact that it has (at least partially) gotten its act together and not asked for bailout funds yet…although it looks like that could also happen before long since F had another huge loss last quarter.
Greenspan: “greed happens.”
Did you see the interview with him on the “House of Cards” show on CNBC last night? It was SO self-serving, I thought I was gonna puke. Greenie is one of the ONLY people (besides the president) who could have stopped this thing COLD in its tracks. A few mutterances by him, and the entire thing would have stopped overnight. If the American people heard Greenie say that the housing market was looking like a HUGE bubble, and it was going to pop just like the .COMs, this all could have been stopped in 2002.
The only complaint I had on that program was that they still won’t tell people, in simple terms, what they can afford. I want to see them come out and say “3X income is the maximum home you can afford”. We need to BURN this into the psyche of the American people!
“…Greenie is one of the ONLY people (besides the president) who could have stopped this thing COLD in its tracks.”
Ya know, lookin’ at Sir Greenisspent…youda thunk that he was old enough to have been learned: “Feed a Cold…Starve a Fever!”
Ya know, lookin’ at Sir Greenisspent…youda thunk that he was old enough to have been learned: “Feed a Cold…Starve a Fever!”
Unlike his predecessor who did understand that, and was fired by Reagan.
+1 Michael Fink
True, Michael, but the fraud of the “ownership society” had a lot more co-conspirators than the discredited fossil Alan Greenspan. After the bursting of the tech bubble, which Greenspan also helped fed, he should’ve been turned out to pasture.
Totally agree, the culpability stems throughout the country; millions are on the hook for this disaster. Homedebtors, RE agents, MTG brokers, banks, hedge funds… All responsible.
However, I can’t think of a single person MORE responsible then Greenie. Yes, Tanzillo is held up as the image of irresponsible lending (which he certainly deserves). However, he couldn’t have stopped this from happening, had the not written the loans somebody else would have.
Greenie was in the position to stop it, and could have done it without any legislative powers. All he had to do was hold a few press conferences and get newspaper headlines to read “Fed see’s massive, unsustainable housing bubble” . That would have stopped it cold. I can’t think of anyone else who could have, by themselves, stopped the bubble to this degree.
“All he had to do was hold a few press conferences ”
Press conferences weren’t his only weapon, either! The Fed had the _regulatory_ _authority_ to set lending standards for the banks. They could have made 3X income the required standard.
And yet he did nothing except cheerlead from the sidelines.
I actually thought at the time that he was encouraging ARMs because they would give the Fed more leverage on the economy with their rate-setting authority. In other words, the more ARMs out there, the more people whose monthly cash-flow position was affected by the Fed Funds Rate. Ergo in theory, more ability to steer.
Don’t want to pick an argument Sammy.
Wouldn’t be fair, you seem smarter than me.
However, seems that “consumer society” would be a better label.
Add that a zealots’ belief in a God given right to never-ending economic expansion and, there you have it.
Muir,
That would be The Consumership Society. LOL! ( Good on you )
Greenspan: “greed happens.”
So he was commenting on himself?
The free market just wants to be free.
WTH? Since when did it become a ‘duty’ to save or spend? When Bush uttered his foolish statement, it had no effect on my spending or savings habits. The idea that the citizenry is taking it’s Que on this matter from the gubmint is pathetic. Now Barry doesn’t know whether to sh!t or go blind so he splits the difference.
To save or to spend? Americans ponder their duty…
CINCINNATI (Reuters) - After the September 11 attacks, President George W. Bush urged Americans to go shopping. As he hands out $789 billion in economic stimulus, President Barack Obama has been less clear — and Americans simply don’t know whether they should save or spend.
“It’s a tough question,” said Cincinnati electrician and small businessman Mike Cavanaugh. “I think that in general the government wants us to spend. While saving may be better in the long run, spending I think can be contagious because we see each other doing it.”
In Scottsdale, Arizona, business owner Bill Austin said the government’s message has been mixed.
“The government doesn’t know what’s going to fix this, but I think they believe that people should start spending again,” Austin said. But he’s skeptical: “Just me going out and spending money isn’t going to fix this.”
After a year of being castigated for the consumerism that drove the nation’s boom-and-bust housing market, Americans can be forgiven for not quite knowing whether they are doing the smart thing by spending or saving.
Obama, at his first news conference as president on Monday, dodged the question, arguing that consumers, like the government itself, need to do both.
Since when did it become our patriotic duty to live in owner-occupied housing, for that matter? This idea has been around since at least 1995, when I first heard it from my professor in a college course on money and banking.
“…our patriotic duty to live in owner-occupied housing”
Here’s the strategy: “get poor people into mortgages (anyway, anyhow)…this get them through the Republican pearly gates known as the “Ownership Society”…then since most poor people are democrats, they well suddenly become real & true Patriot’s, not girly men Patriot’s, and then they will fight to the death to keep making their “Ownership Society” monthly payments…because to do anything else…. would make them unAmerican!
You may ask yourself, Hwy how do you know this? It’s a long story, but basically the only American’s that are both… True Patriot’s & “fiscally responsible” are Republicans.
… the Republican pearly gates known as the “Ownership Society” …
We as a country will be feeling the aftershocks from that
wretched philosophy for a long, long time.
When has our government ever “saved”? What a farce.
I think Obama needs to take a week off and ixnay with the long rambling rah rah speeches.
FDA banned Thalidomide. Saved a lot of babies from unnecessary birth defects (malformed/missing limbs).
Obama…. dodged the question, arguing that consumers, like the government itself, need to do both.
Is it any wonder the world at large is very concerned..
Obama…. dodged the question, arguing that consumers, like the government itself, need to do both.
It’s the truth they do need to do both, just because it’s not possible doesn’t mean it’s not the truth.
..beam me up..
What????
who says it’s impossible? I spend and save every month. No debt.
how to hurt the economy? trade all your fiatscoes for gold and bury it in the state park. then live in a cave and eat roasted tubers.
Saving puts new money into the financial system, creating resources so that companies can make new investments. Spending keeps the velocity of money at oxygenating levels.
Running for the hills makes the economy collapse and it’s like the Maya all over again.
What’s the point of saving, when the government is feeding future hyperinflation with it’s insane and never-ending bailouts and amassing of unpayable debt?
“15,000 job seekers flood career expo
Planner ‘blown away’ by crowds, long lines
by Carrie Watters - Feb. 12, 2009 01:00 PM
The Arizona Republic
About 15,000 job-seekers - double the usual number - flooded a career expo in Glendale on Wednesday at the same time that the number of prospective employers attending shrank.
Long lines formed outside University of Phoenix Stadium two hours before the 2 p.m. start of the career expo hosted by Valley-based job-finding company Jobing.com.”
“This time, 150 companies offered more than 500 jobs”
Why does an online only College have a stadium??
For their football team.
Which you can watch online
and bet online too!
Because they rape thier students for tuition.remember all the mortgage companies that sponsored stadiums?How about pets.com during the tech bubble.
So… you’re saying jobs ‘are’ important to one’s self? Hmm, can those 20 million MEW-Lifestylers get back to you on that one?
Just heard an NPR story about how the administration is planning to pass laws to relieve banks that are acting as loan servicers for securitized loans from being sued by the investors if they modify the loans. This threat of being sued for violating their fiduciary duty to protect the interests of the owners has always been the biggest obstacle that I could get my mind around. (Whether forced modifications end up being constitutional is a separate matter, that I amjust not qualified to analyze.)
Here is the problem. If you do this, you end up killing the securitization market for as long as the protection exists and as long as people remember that the government is willing to do this when it feels like it. Dead, dead, dead. Now, if you are trying to get the credit markets going again, how on earth does this help? The banksters testified earlier this week that they are lending from their own portfolios - believe me, they didn’t lie on those numbers. Their lawyers wouldn’t let them lie. They said that the problems with getting credit are because the non-bank money is absent. I believe that. That is the money that was being lent with essentially no underwriting.
Would you buy a bond made up of loans which specifically disclosed that the government could step in and change the interest rate and principle amount of the underlying loans at any time? No, neither would I.
The securitization market is undergoing ‘discontinuous change.’
Business Dictionary: Non-incremental, sudden change that threatens existing or traditional authority or power structure, because it drastically alters the way things are currently done or have been done for years.
That silly little thing called the Constitution is going to get in the way of this.
If it does it will be years from now after the heavy damage has long since passed.
The Constitution: It’s just a piece of paper now.
Time to try to pack the court again.
The Constitution is a dead letter. The one candidate who took it seriously, Ron Paul, was regarded as the lunatic fringe. The Masters of the Universe now know they have a free hand to ram through whatever “reforms” they see fit, knowing the sheeple, with their pitiful bleating for “security,” have no attachment to outmoded concepts like liberty.
The reason why the Constitution does not matter anymore, particularly the Bill of Rights, is because the stodgy Supreme Court is not doing its job to protect it.
However, the students of American political philosophy are aware that we as individuals have inalienable rights, independent of any government that we have.
Resist the initiation of force.
After you, Bill in LA, or shall I call you Bill Ayers from now on?
PLEASE KEEP TALKING SO THIS GETS KILLED!
Their lawyers wouldn’t let them lie.
HAHAHAHAHAHAHAHA.
That was funny.
I am perfectly serious. The numbers are confirmable. What is the dollar value of new loans made last quarter? If you lie, you get held in contempt of Congress and it is not pretty. Besides, they have no reason to lie. The securitized lending probably is the largest chunk of lending that has been cut off.
Stuff like “I don’t believe smoking causes cancer” is entirely different. You can lie about your personal beliefs in front of Congress all day long. But not about publicly available numbers. The risk is too high.
That’s one of those irrevocable steps. It sets fire to the ships.
Proponents will ask “What’s the harm in that plan?” Answers will fall on deaf ears.
“you end up killing the securitization market”
How is that a ‘bad’ thing? LOL!
i dunno why the govt is so quick to use threats. Business people do not respond favorably to threats. Threats incite a defensive posture and lead to conflict.
Now, we all know govt is pretty stupid about business dealings.. leave it to them and there’d be no toilet paper today and we’d be suffocating under mountains of it next week.
But can’t they find anyone who knows what they’re doing? I find the stupidity coming out of Washington simply amazing. It’s gotta be deliberate. There’s no other rational explanation.
I don’t think it is all that bad a thing from the perspective of protecting dumb borrowers from making stupid loans. Underwritten loans don’t get as stupid as securitized loans. But, believe me, the policy wonks in Treasury do not want this result. Not in a million years.
The securitization market is the root cause of all the problems. It _has_ to be killed.
warlock,
Thank you. In spite of financial-types describing the old model as “hopelessly antiquated” I don’t see much of a market for this cr@p paper going forward?
Securitization is not a market… it’s a financial tool. Damage caused by the misuse of a tool is not the tool’s fault.
Get rid of an axe because someone chopped his toes off only insures you’ll suffer a long, cold winter.
I get what you are saying joey, but is this a tool that can be used safely? It seems inherently unstable in that the buyers for the most part can’t evaluate what they are getting, and the seller has too much incentive to get lax in their standards in the name of capturing market share. I think securitization, as a tool, is more akin to a nuclear bomb than an axe.
I think you’re actually blaming the ratings system.. When rated correctly, there’s nothing wrong with me buying paper from a lender. I take on the risk and earn most of the profit. The lender gets his money back and a small profit, and can lend again. I can profit from real estate without getting my hands dirty.
But if you can’t even evaluate your risk, why invest in the first place? That would be crazy, no?
So, why were investors so anxious to buy all the MBS the lenders could produce without being cautious of the way the securities were being chopped up and rated? Because investors themselves thought RE would continue to appreciate forever, just like everyone else… they couldn’t get enough of those enormous returns.. they begged for more.
You think most of Madoff’s clients didn’t know exactly what was going on.. that they were tricked? They are pulling down a freakin 18% and don’t even ask questions?? Of course they’re not gonna ask.. they don’t care.. The game had been working for like 15 years.
I was approached with a pyramid scheme a couple months back.. make a ton of money. I told the guy “hey, this is a pyramid”. He says “Well, yeah.. it is, but you can get in early.”
imo, everyone knew what was going on. Everything’s A-OK until it collapses, and then they try to blame someone or something besides themselves.
I was going on the assumption that the ratings agencies are as reliable as the media, politicians, etc.
sorry, not true … exposed over the last few years … moody’s and s&p were the biggest fraud on wall street.
“Just heard an NPR story about how the administration is planning to pass laws to relieve banks that are acting as loan servicers for securitized loans from being sued by the investors if they modify the loans.”
yes I heard that also. there go the investors I can’t think of a better way to stop private money going to home loans.
I wonder if this will affect buying GNMA loans
Are they going to rework loans for the dorks that cashed out too? It sickens me that they are going to subsidize homeowners, but I bet the majority of these punks mortgage balance wasn’t just purchase money, more like flat-screen money.
I think that in order to qualify for assistance, you cannot have granite countertops in your kitchen. Any granite in the house and you are ineligible. That’s fair.
Sorry that bill was amended to also include any home with stainless steel appliances…
One condition that should be included: if any of the key information (assets, income, etc.) that the borrower provided on his mortgage application was false, then not a nickel of assistance. This would probably eliminate about 90% of the troubled borrowers, making the problem much more manageable.
On the CNBC program “House of Cards” last night, they showed a Mexican immigrant factory worker who got a 380 K house on a ninja mortgage. he then heloced it to death as it went up to something like 680 K. He was really bummed when reality and a foreclosure hit. He bemoaned his loss of “the American dream.” The pictures of the inside of the house showed stuff that was much better than anything I could ever afford (or would buy): flat screen TV, leather couches, etc. I have nothing against immigrants, but this was just insane.
play that out millions of times across america and that was our economy during bush’s crooked admin.
Bush is an imbecile, but Allan Greenspan, Barney Frank, and Chris Dodd are the real villains of the piece.
Don’t let Bush off the hook that easily. Not caring is very different than being stupid.
They reported that he made $900 a week and bought a $380,000 house and then refi’d to take more money out. Sorry but I have no sympathy for that level of stupidity. He sure did have nice “stuff.” The woman they showed moved from Compton to Yorba Linda and a $780,000 house. What was she thinking….
I can’t blame anyone for wanting to get the HELL out of Compton and she certainly ’seemed’ like a nice lady. Sounded a bit like “affiliation fraud” as ‘the miracle’ was delivered in church during a Sunday service.
What befuddled me was that Kyle Bass, the HF mgr. that took a pass on the Kool-Aid, had a “600% Return!” on his billion dollar investment ( but only doubled his money? )
Was it a matter that when his side of the Credit Default Swaps paid out, that was all there was and then the cupboards were bare? They really didn’t elaborate further. Anyone w/ some insight there, please feel free to share.
The guy said he was taking out equity to ’start a business’. Then he looks gobsmacked that his house is in foreclosure…..
Not much of a businessman, if he can’t use a calculator.
“The pictures of the inside of the house showed stuff that was much better than anything I could ever afford (or would buy): flat screen TV, leather couches, etc. …this was just insane.”
DH and I watched, and just about every house they showed (condition aside) was larger and nicer than the one we rent. Every FB featured in the show had nicer and much newer furniture than we have too. It was obvious that their HELOC money was going to places other than pool and patio renovations.
Not every FB deserves what they get/got, but I had little sympathy for those folks featured. Surely CNBC could have put forth a smidge more effort and found some true hard luck cases?
Oh ,these FB’s were sold on the concept of increasing their life style by equity money and the sure bet myth from the Marker Makers that “Real estate always goes up.” No doubt many of these
so called “American Dream Seekers” were given cash back to purchase ,or some incentive to sign on the dotted line .Maybe these people were dumb asses ,but, it more likely they are criminals with criminal intent . No doubt they were sold on the concept that they could just refinance or sell the Golden Goose shack .Some of these FB’s were told that they were just going to get paid for a while and another party would buy the house ,and their money was tied up or some to-bit story to get breathing bodies into the scheme .
Defrauding a Lender is a crime ,at least it use to be ,yet the silly Politicians still want to hide the crime riddled aspect of these poor homeowners ,who for most part were in on the scheme . No excuse for people making 900 a week buying 380k house. Rewarding a criminal scheme and all the parties associated with this scheme ,is the peg in the mess that will bring the house of card bail-outs down .
“Maybe these people were dumb asses ,but, it more likely they are criminals with criminal intent .”
You credit these people with WAY too much intelligence.
There is a segment of society that WILL spend every nickel that is extended to them via the credit markets.
True, but I think there was some intent. The guy I knew who HELOCed his house for double what even he thought it was worth said, “if the bank is stupid enough to give it to me, I’ll take it.” (He then proceeded to start an unsuccessful eBay business.) These people were cackling at first, thinking they had gotten one over the bank.
I think a bigger story that went unreported is the fact that vast swaths of the US economy have not been doing very well for 10-15 years.
Anyone in the manufacturing business remember all those Wall Street lectures about “…….we don’t want to invest in US manufacturing, because it’s not as profitable as other things we can invest in……”
(Like housing bubble MBSs or CDOs? Hows that working for you now??)
The distorted income stats generated by the crazy money being paid out to the people involved in building and financing this housing bubble camoflaged this fact.
Greenspan’s comment “….if we didn’t have the housing bubble, we would have had 10% unemployment……” shows that the government KNEW what was going on, but were playing along, because they were able to generate revenue from it (via taxes).
It worked great, until the Ponzi scheme ran out of suckers.
X-GSfixer,
Solid point. By AG openly admitting unemployment ‘would’ have reached those levels is to admit there is something very structurally unsound w/ our economy.
I think ‘that’ is what has griped many of us here? Let’s not address the inherint weaknesses, we’ll put a band aid on it and praise The Boom!
Greenspan’s comment “….if we didn’t have the housing bubble, we would have had 10% unemployment……”
So, jam today (pre-2006), and social chaos tomorrow (now)?
Nothing like kicking that can down the road.
I worked for one of the Bizjet OEMs from 1979-1999. I just remember all the lectures from the PTB that “….we have to make X% this year, because the Wall Street boys say they can make x+2% by just parking money somewhere else, and they won’t have to deal with the hassles of actually BUILDING something” Everyone in any manufacturing business that I know about was hearing the same thing.
Thus, a decade of 700-900 hours of overtime a year (because it was cheaper running your existing staff into the ground, instead of hiring more help), along with 3%/year “pay raises” (because if they actually gave everyone a REAL pay raise, they wouldn’t make forecast).
Me, being a dumb-ass country boy, couldn’t figure out how people could be making BILLIONS while spewing BS, while everyone I knew was running like hell just to keep even.
“I worked for one of the Bizjet OEMs from 1979-1999. I just remember all the lectures from the PTB that “….we have to make X% this year, because the Wall Street boys say they can make x+2% by just parking money somewhere else, and they won’t have to deal with the hassles of actually BUILDING something” Everyone in any manufacturing business that I know about was hearing the same thing.”
I’ve been hearing that since the late 1980’s some kind of guilt trip to make me work harder ? Then by the late 1990’s we were all investors watching the stock bubble.
Then the big one th ehousing bubble, I made more money in 2005 on my house going up than by working. Well its over now the housing bubble was the biggest and most widespread. Maybe a 401K echo scam but with the market down there is not much left there.
Wall street boyz what a waste
qaxbami
2009-02-13 07:20:06
“On the CNBC program “House of Cards” last night, they showed a Mexican immigrant factory worker who got a 380 K house on a ninja mortgage. he then heloced it to death as it went up to something like 680 K. He was really bummed when reality and a foreclosure hit. He bemoaned his loss of “the American dream.” The pictures of the inside of the house showed stuff that was much better than anything I could ever afford (or would buy): flat screen TV, leather couches, etc. I have nothing against immigrants, but this was just insane.”
Just curious what percentage of this do you attribute to immigrants?
I myself would think a very small amount, say less than 5%.
I wasn’t immigrant bashing. He was just an example they gave.
Sorry, didn’t mean it that way, I just think they are a small percentage of the problem, yet the media hypes it up.
I saw mostly middle class speculators here.
In socal it was a BIIIIGGGGG part of the problem. Between affinity fraud and “the american dream” they were the easiest marks for the scammers.
If you want proof take a look at any exurb on foreclosure dot com and peruse the surnames. My personal experience shows me that a large number of the worst FBs were first generation or second generation young adults. The natural born citizens were the ones cashing out to move to Texas.
Spend 30 yrs as an Indentured Servant to an expensive mortgage and upside down house or walk…
What do you think they are gonna do ?
Hey…we have more runners on level 6 Uncle Sam
Are they going to rework loans for the dorks that cashed out too?
Of course they are. Whatever the most sickening scenario is, you can count on that being the one that plays out.
Has anyone within the beltway stopped for one second to consider the folly of trying to respike the housing bubble. This policy is dead on arrival.
I work (though not live) inside the Beltway. I honestly don’t think they are trying to reinflate the bubble. A few people might say things that sound like it (more likely to say stop the collapse - economically similar but emotionally a bit different), but I don’t think they believe it. Besides, very few of the top executive branch people are that dumb - they are educated in this area. Legislature side is a whole other story. Not too many trainined economists in Congress.
I think (at least I hope) this is a desparate play to try to slow the collapse. You can go from making $50K to $40K in a year. It hurts like anything, but you can figure it out. Try doing the same trick from $100K to $40K. The state and local governments and the feds too need time to adjust to having a lot less money. They can’t do it all at once. They need time to renegotiate with unions, increase class sizes and close schools, stop capital spending projects. People need time to adjust to there being lots fewer jobs too - maybe move to one adult working and the other staying home. And the bankruptcy courts and banks need time to work through the back log of cases and foreclosures. Businesses need time to adjust to a lower level of discretionary income among their customers and figure out if they are really viable or not. Slowing the whole thing down is bad for most of us here on the HBB, but it is better for a lot of other people. I think that is the real goal.
Makes Pinocchio Lereahs soft landing comment even more hilarious.
Some times its better to just rip the bandage off really fast.
“Besides, very few of the top executive branch people are that dumb - they are educated in this area.”
It is far more politically convenient to be smart and agreeable than to be smart and outspoken, even if the outspoken individual is true to himself and the agreeable person is not.
+10
polly,
I agree, at (one) point, that ‘may’ have been the objective. Now we’re just drawing new lines in the sand on almost a daily basis.
I definitely think Darrell is spot on. Now, the battle lines are drawn in an attempt to mitigate a violent -over- correction. I must be honest, for a Friday the 13th, everyone seems to be hitting on all 8 cylinders. ( I was prepared for the worst! )
Possible, but I don’t think so. Don’t get the marketing mixed up with the real intent.
fx county may have to close the dept of Wymin’s affairs !!!!!!!
And we will expect you to tell us as soon as that happens, bootee. Really.
What? They aren’t going to close the Department of Trees?
+ One hundred giggles and a tampon.
“I think (at least I hope) this is a desparate play to try to slow the collapse.”
yea I think you’re right
I think that is the real goal.
A thoughtful insight, blessedly free from blame or hyperbole.
Thank you.
All it does is keep a couple more poor suckers on the debt-mill, running to stand still. At best, it helps on the margin.
I don’t think they are trying to respike the bubble. I think they are trying to avoid overcorrection to the downside. They are trying to stop prices at 2000+10% for inflation.
Of course, there are too many houses and not enough people that can afford them, so any attempt to stop the overcorrection will be a disaster.
Fair enough. The idea that one can stop the financial equivalent of a tsunami in progress is typical of hubristic financial engineering types.
“…any attempt to stop the overcorrection will be a disaster.”
The other part of the disaster will be long term, as current moral hazard subsidies will teach important behavioral finance lessons to the households of future generations. A system which is set up to reward stupid behavior is doomed to eventually fail.
“…will teach important behavioral finance lessons to the households of future generations. A system which is set up to reward stupid behavior is doomed to eventually fail.”
Bugs: “Dear Mr. Bear…eh, you have my vote when you decide to run for the Mayor of “Lost Wages”
Where was the government when mortgage brokers were peddling these Ninja loans? Personally I want my tax dollars spent on AFFORDABLE health care. I do NOT want my tax dollars spent on keeping the majority of these speculators in houses that they cannot afford. Housing prices cannot and should not be artificially propped up by the government. It’s ludicrous.
The government should be spending its time working on the very real problem of health care. Oh… and they should damn well regulate these fertility clinics in California.
We live in So Ca. Octumom’s “people” are looking into creating a 501(C) for her, using singles moms as a broader charity. I hope the IRS pierces that scam in a hurry. Nice to know our $838/mo (2 healthy adults) premium to Kaiser is going towards her litter.
Yeah, but you shouldn’t build your dykes at the low tide level. The correction in RE valuations CAN’T be stopped IMHO until prices fall far enough that purchase price/rental ratios are sane, and intentional landlords enter the market. Adding a few layers of sandbags THERE makes sense. Trying to keep those who are already seriously underwater from being foreclosed on is a wasted effort IMHO.
Health Care ,another area where the public is getting short changed and its a racket . I could tell you stories that would make your skin crawl .
When corruption takes over every conceivable section of a operating Society ,than its just a matter of time that the people will no longer be fleeced because they no longer will have funds left to be fleeced .
We have a winner.
Darrell_in_PHX
“I don’t think they are trying to respike the bubble. I think they are trying to avoid overcorrection to the downside. They are trying to stop prices at 2000+10% for inflation.”
–
Won’t happen.
In fact many areas in Fl passed 2000 prices(nominal) some months ago.
Miami is an exception, maybe were in 2003. But I saw some huge cuts this week.
There are nice places (not Ft Myers) were you can get 2000 prices in Fl today.
Faster and our other serious economics people,
Anyone know what has been going with credit default swaps? Are the contracts being allowed to expire? I’m not sure what a typical term it. Is it a year? A few years? Anything goes? Are they being cancelled? Is the volume up? down?
Any place I can go myself to do look up the volume numbers?
Thanks a million.
Come to think of it not a peep has been mentioned about AIG in a long while which is truly incredible because that alligator eats even more than the carmakers.
Just a couple days ago there was a story about China deciding not to buy several of the units it was offered.
AIG money flow works like this.
US Printing Press -> AIG -> Counterparties
In AIGs case you can be darn sure that silence isn’t golden. Following other insurance companies is also interesting these days. They are desperately trying to allow their hosting states to modify capital reserve requirements so that they can stay afloat.
Check out Hartford stock….not pretty. My gut feeling is that after the euphoria of the bailout passes the next major shoe will drop with another large wave of corporate bankruptcies and insurance co. insolvencies. I see DOW 6500 within the next 3 months.
Curious myself? I don’t move in those circles ( I’m sure the minimums were pretty high and certainly out of ‘my’ league? ) Yet how bad can anyone of us feel about ‘that’.
I’m getting a sinking suspicion that there was an orderly pay-out initially and it quickly fell apart as Bear Stearns and others slid into insolvency.
DTCC has some data:
http://www.dtcc.com/products/derivserv/data_table_i.php
Now they say it’s a mirage, don’t recall FED calling it that anytime in the past!
Fed Calls Gain in Family Wealth a Mirage…
Article Tools Sponsored By
By EDMUND L. ANDREWS
Published: February 12, 2009
WASHINGTON — The leap in wealth that Americans thought they were enjoying over the last several years has already turned out to be a mirage, according to new estimates by the Federal Reserve.
In its triennial survey of consumer finances, released Thursday, the Fed found that the median net worth of American households increased by a seemingly healthy 17 percent between the end of 2004 and the end of 2007.
But the gains were wiped out by the collapse in housing and stock prices last year. Adjusting for those declines, Fed officials estimated that the median family was 3.2 percent poorer as of October 2008 than it was at the end of 2004. The new survey offers one of the first glimpses of how American families were positioned financially as the roof fell in on the economy, and it provides some sense of how much wealth has been destroyed since then. Indeed, the destruction of wealth is still in full swing: housing prices are still falling, more than two years after the bubble peaked.
The survey suggests that the boom years were not all that wonderful even before the crisis set in. And it indicates that many households will have to greatly increase savings rates, which were below 1 percent, to make up for some of the lost wealth.
Adjusted for inflation, the median household income actually edged down slightly over the three years ending in 2007. The mean, or average, household income jumped by a respectable 8.5 percent.
LOL
As if you needed anyone to tell you the obvious.
FPSS, glaringly obvious, yes.
But I don’t mind reading the glaringly obvious in the MSM. Most of the time I’m reading it primary to hear what the SHEEPLE are hearing. By knowing their inputs, I can understand and predict their psychology, and thus profit from it.
Excellent point. That’s the same reason I read the MSM.
That is the main reason I am checking every night what the shills on CNBC are talking about.
Anybody who didn’t participate in the Housing Bubble free-for-all could have told them this.
Greenspan knew it to…..hence his “if not for the bubble, 10% unemployment” comment on CNBC last night.
Right, so destroying The Global Financial System was worth not having to face 10% unemployment!? Pffftt, dude, we’re ‘there’ now. -Still- think it was worth it?
U-6 (broadest measure of unemployment) is at 15.4%.
Yep, 1 in 7 of your fellow Americans is unemployed.
Well it sure looks like Greenspan and companies “Wealth Effect” experimentation blew up the lab. Again, I just imagine if the Manhattan project boys were this reckless in their experiments. Granted the MP boys weren’t the biggest saftey sticklers, but what Gspan and company did would be equivalent to testing A-bombs in every major city in America.
Well, arguably they were: http://en.wikipedia.org/wiki/Louis_Slotin
“He was rushed to hospital, and died nine days later on May 30, the second victim of a criticality accident in history, from a total of 26 incidents.”
I venture that this credit experiment has already killed (literally) well over 26 people - probably in the thousands before it’s all said and done. E.g. new homeless people freezing to death, bankruptcy suicides, fraud-related murders, etc.
That doesn’t include politically-motivated deaths, like if China ends up nuking us after we default on our debt.
Are we not men?
We are DEVO
…gains were wiped out by the collapse in housing and stock prices last year.
Actually, my net worth’s up since 2005. But I didn’t have any houses or stocks - I just got single and went back to my original skinflint, curmudgeonly ways.
woo-hoo!
‘…and went back to my original skinflint, curmudgeonly ways.’
Sexy!
Looks like some people in AZ, CA, and NV are very adept knife catchers.
http://www.realtor.org/wps/wcm/connect/741c2a004d02a069a897ee8d0a12d865/REL08Q4S.pdf?MOD=AJPERES&CACHEID=741c2a004d02a069a897ee8d0a12d865
Phoenix is the new Detroit…
“Foreclosures continue upward climb in Valley
The ‘good’ news: Plummeting median price sparks 49% sales jump
by J. Craig Anderson - Feb. 13, 2009 12:00 AM
The Arizona Republic
Phoenix-area home foreclosures were on the rise again in January after a holiday break from bank repossessions, according to the latest home-resale figures from Arizona State University.
It’s a troubling start to a year in which many experts believe foreclosure activity will reach its peak, as equity continues to dissolve and another wave of foolish-in-retrospect mortgage loan products reset to higher monthly payments.
The upside in January was a 49 percent increase in detached, single-family home resale activity from a year earlier”
“Brauneis said his biggest concern is the high number of interest-only “Option ARM” and stated-income “liar” loans scheduled to reset to higher monthly payments in the coming year.”
“Foreclosure rates are definitely still on the way up,” said Brauneis, director of Protiviti, a subsidiary of Robert Half International.
“It’s going to get ugly.”
No sh$t? REALLY?
“In January, the median sale price for single-family detached homes in Maricopa County was $136,000, ASU reported.
That’s a 44 percent drop from the median of $243,000 the previous January.
Home prices fell 7 percent from December’s median resale price of $146,000, according to ASU.
In the past two months, a high volume of sales in Phoenix at disproportionately low prices has pulled down the median home price Valleywide.
In December, 1,360 Phoenix homes were sold at a median price of $90,000.
In January, the number of sales decreased to 1,190, while the median price fell to $74,500, ASU reported.”
WOW! Now I understand why you keep kicking yourself. What were peak prices?
At peak our housewas $270K. I began begging the wife to sell at $250K. When I finally talked her into selling, I wanted to list at $230K-$240K, but Realtor wanted to list at $250K.
Wife got madat me for arguing with the Realtor.
A month later I wanted to drop the price to $230K. Wife would not budge from $250K.
Couple months ago, the house right behind us went for $130K. Last month, one down the street went for $118K.
AND, we’re no where near bottom.
$270k to $118k
Ouch… But I have to agree, we are no where near the bottom.
I know too many knife catchers here in LA jumping at the chance to buy $1M homes ‘that were worth $1.5M.
I had to persuade my wife it wasn’t wise to buy 2 years ago. Now she talks as if she was always on board.
(Men: Do *not* correct the wife when she’s on your side!)
She just found her first nice home < $800k where we would consider buying. She has finally accepted that until we get down to low inventory, prices will not go up. We’re somewhere between 15 and 18 months in the beach cities of LA.
Oh, Wamu, BofA (Countrywide), and Wells Fargo all have held back listing foreclosures. When that dam breaks… Inventory will be over 2 years.
I still predict 2009 will be the greatest year of price drops (national and local). Nothing can stop this. The trade up market is broken. Too many ‘cashed out’ on the MEW train.
Got Popcorn?
Neil
I was lucky my wife wanted to sell the townhome as much or more than I did. We remembered the 1990 RE bust in S. Cali. No problem renting but she is pissed when she hears about the Governmnet planning to help with Mortgage payments and cram downs.
I don’t care I figure whatever the government does it will get twisted badly by low level officals who will steer the money to their family and friends just like any other 3rd world socialist country.
My wife in a year has gone from “but I really want a hooooouuuuuse” to “move out of our BMR rental? are you nuts?!”
Heh.
mrktmaven,
Perhaps a ‘little’ perspective here? No doubt, things are tough all the way around and will likely get worse in the near term. However, Darrell, myself and millions of others; our problems are SMALL!
Just look at all the over-leveraged builders, realtors and speculators that would be better off putting a gun to their head! ( We understand in Bend, OR it’s become quite the fashion? ) Sure it sucks, we’ll live, they won’t. Peanuts.
Yes, but with the numbers Darrel cited he may be better off putting a halt to further payments down the rat hole. He’ll live without making a payment for as long as a year and might just end up with an Obamariffic cram down.
“In the past two months, a high volume of sales in Phoenix at disproportionately low prices has pulled down the median home price Valleywide.
In December, 1,360 Phoenix homes were sold at a median price of $90,000. ”
Once again, the MSM distorts the situation. The fact is, the $90,000 figure is the market price. In this type of market, normal “retail” buyers have essentially disappeared. The market price is set by whomever is willing to fork out actual cold hard cash at an auction, short sale, whatever. In this case, those are mainly investors who are paying approx. 30% of the loan balance/previous sales price (since most were purchased with 0% down).
That’s the REAL market price being set by people with real money.
As I said a couple days ago, 14 months ago my Sis-in-law bought a brand new house for $200K. Same models had been selling for $250K-300K just 6 months earlier. A couple months ago, Countrywide rejected a short-sale offer for $110K. Last week they accepted a short-sale offer for $89K.
Now…. those people that owe $300K…. how many of them are going to actually pay it back??? How is the just annouced subsidy going to help the $3 trillion+ of upside-down-ness?
Hint: It WON’T!
“another wave of foolish-in-retrospect mortgage loan products”
Oh no, no, no. How on EARTH do these reporters keep letting them get away with this garbage? “Nobody could have seen this coming”/”Black swan event”, etc? Especially when there were plenty of people who did see this coming (the HBB, Robert Shiller, Roubini, etc) and tried to warn others.
In fact, anyone with a 5th grade education in math could have see that this was coming, and was totally unsustainable. It didn’t require a PhD in Mathematics or Economics.
Michael Fink,
I tried to link the Business Week article “How Banks Are Worsening The Foreclosure Crisis” but it won’t post. If anyone more “technically adept” can share that, please do!
It goes a looong way toward explaining all the better efforts to get the brakes on, but how banks/lenders/bagholders fought regulatory efforts every step of the way. I hate to say it but the article more or less vindicates Hank Paulsen, even if the “Hope Now” program was openly admitted to being little more than a PR ploy.
That article is prominently displayed on Yahoo’s main Finance page today.
Bleeve it is the full text. Fascinating reading.
I got the impression the article was attempting to prop up housing prices, maybe I’d better read it again.
foolish in retrospect? no, foolish in prospect. criminal in retrospect. keep it straight, mon.
Anyone watch David Faber’s CNBC special last night? It had way too many commercials, but I thought it was a very good, basic explanation of the housing and financial crisis. He picked good folks to interview and the homeowners were somewhat sympathetic, but their total stupidity showed thru. It showed the greed of all of the parties and allocated blame equally. He did let Greenspan off the hook. My liberal wife watched the entire thing and was scared straight and is no longer in favor of cram down or bailing these people out though she wants them to find decent shelter and have jobs and food. She hates Wall St more then ever.
be careful if you call someone greedy you might be labeled a poor basher (bashing someone who is poor etc)
Having spent yesterday afternoon in Court helping a 70 year old guy push back a credit card company from ridiculous collection practices, and getting a mentally challenged tenant an additional 45 days to move out from his foreclosed upon apartment, pro bono, I’m OK with my standing in this regard. I’m not against the poor, just the stupid
Calling someone greedy could only be considered poor bashing if greed was associated primarily with poverty … surely not the case.
Not saying that there aren’t greedy poor, but there’s plenty of greed all around and plenty at the top. A certain amount of greed surely helps in the acquisition of great wealth (not that it assures it by any means).
And skeptic’s comment “showed the greed of all of the parties” suggested to me that the greed of mortgage brokers and RE interests was conveyed.
I liked the one couple at riskof losing the house…. Had to cremate dad vs. burry to save money. God provided… Yeah, God killed your dad so you could getthe money you needed to get out of foreclosure….
Then there was the Iraq war vet too crippled by post tramatic stress to work so was on disability. They showes his uniform. Dude was an E5 in the AIR FORCE!!!! He probably never left the base! What was the traumatic stress??? He was probably safer there than at a base stateside.
Darrell,
“I” certainly don’t have any designs on my family spending a dime more than ‘that’ in the event of my untimely demise? So I was o.k w/ that part.
Assuming her husband’s condition was legitimate ( and I’ve no issues there either ) applying the money to get him in a better state would be spent than salvaging the dream home they couldn’t afford to begin with?
The AF ‘does’ have Forward Observers that direct airpower to targets on the ground and that’s something “I” would -never- volunteer for ( but I get your point there too )
The Air Force is the most “intelligent” service.
They only send their Officers out to get shot at.
Airman 1st Class Eric M. Barnes
Age 20
90th Logistics Readiness Squadron
Hometown: Lorain, Ohio
KIA: Died as a result of a roadside bomb attack on an Air Force convoy about 100 miles south of Baghdad, Iraq, on June 10, 2007
The Air Force created combat perimeter security and regular combat patrol units a few years ago.
Non-coms are also part of some aircrews and aircraft do get shot at and airbases do get mortared.
“She hates Wall St more then ever.”
She won’t understand hate until she’s tying nooses for the necks of Kudlow, Nordquist, Snow, Thain and the HMO and banking crime syndicates.
Ex, she is a liberal originally from Washington County, NY and her parents have an “Impeach Bush” sign on their lawn. We ar eehaded up to the ADK’s to our cabin in the frozen Tundra. I think the big yellow turd is finally finished. It is big, ugly, and appears to be mostly unoccupied. Wish I had a picture to post.
Hey RE Skeptic…. Spent any time with natives near the tundra? Hows the sentiment?
I will see this weekend. Of course its President’s Day weekend, so I expect Gore and Lake George Winter Carnival to have the hotels and restaurants near full. I did refi our house and camp a month or so ago as rates were ridiculously low, which required new appraisals…. The tone of the appraiser for each property (they are about 120 miles away and in different states) was consistent and VERY different from a few years ago. Both places are in very low volume areas with comps exceeding the mile/date guidelines Each took measurements and pics of EVERY room, opened closets, you name it. No joking, all business.
Here are the results, which I think are in line with actual market conditions. The Camp, which I have put $10k into and a lot of my own labor, appraised for 2K more then I bought it for, so I am now out 8K in cash plus my labor and owe 45% of its value to the bank. I would say the “value” of my improvements added 20-25k to the appraised value, so without them, it would have fallen about 15%. My home went down 12% from the last appraisal in Nov 07, and I owe 62% of its value to the bank. I think these are fair #’s and do actually reflect local market conditions given the properties themselves. I will say that in the ADK’s the $300k plus homes and +/- 100k mobile home type set-ups are dead in the water. I have seen some 100-120 properties near water or with land move and also some former $350k listings selling in the mid 200’s. The number of sales in each area are relatively small so you actual mileage with these numbers may vary.
Nice update. Thanks. My observations in Warren/Washington/Rutland counties are much the same. Anything above 200k sits and rots. I noticed a proliferation of $40k stuff that was non-existent just a few months ago. In my conversations with friends and family who were completely delusional about RE, they’ve been given a slice of humble pie. The extreme price increases were late to our area and it appears the fallout is late also but it’s very obvious now, even to the uninformed and bubble deniers. All they can say is “it’s bad”.
About the Big Yellow Turd on the east side of the N-way just north of Saratoga….. Are they rentals or condos for sale? I would be very surprised to see that abortion full, either now or in the future.
Sandor E. Samuels. Another unethical greedy Countrywide knob.
GM/DiTech & Countrywide: Thanks for your oversize participation in sinking the US economy for the next decade.
Idiot reneging borrowers: You suck. Go to hell.
Tidbit about Sandor E. Samuels (the multi-millionaire):
“In early 2007, as overextended borrowers began to default on too-good-to-be-true subprime mortgages, housing experts sounded an alarm heard throughout Washington. Christopher Dodd (D-Conn.), chairman of the Senate Banking Committee, wanted to push a bill requiring banks to modify loans whose enticingly low “teaser” interest rates soon give way to tougher terms. But he knew that with Republicans strongly opposed, he lacked the muscle, according to Senate aides. So Dodd did what politicians often do. He convened a talkfest: the Homeownership Preservation Summit.
A who’s who of banking executives gathered on Apr. 18, 2007, behind closed doors in an ornate hearing room in the marble-faced Dirksen Senate Office Building. Dodd told them they needed to get out in front of the foreclosure fiasco by adjusting loan terms so borrowers would continue to make some payments, rather than stopping altogether. Foreclosure proceedings typically cost banks about 50% of a property’s value. That’s assuming the home can be resold — not a certainty when empty houses multiply in a neighborhood. “What are you doing?” Dodd asked the executives. “What do you need me to do to help you modify loans?”
Some from the industry denied a foreclosure problem existed, including Sandor E. Samuels, at the time chief legal officer of subprime giant Countrywide Financial. They vowed to continue selling loans with enticing introductory rates as well as those requiring minimal evidence of borrowers’ income. “We are going to keep making these loans until the last second they are legal,” Samuels later told a fellow participant.”
Now this is one heck of a business plan, just order your employees to buy…
Panasonic orders staff to buy £1,000 in products
Leo Lewis, Asia Business Correspondent
Its electronic gadgetry is gathering dust on the shelves of high street stores, nobody is buying new fridges and the mountain of unsold plasma televisions is growing by the day.
However, in desperation, Panasonic has hit on the perfect counter-attack against the consumer slump: it has ordered every member of staff to go out and buy £1,000 of Panasonic products.
Large swathes of corporate Japan are expected to follow suit, either by directly commanding or indirectly “pressuring” employees to divert part of their salaries towards the goods that their employers produce.
Toyota has already tacitly applauded a “voluntary” scheme in which 2,200 of its top brass decided to buy new Toyota cars, and the president of Fujitsu recently e-mailed 100,000 staff and gently pointed out how nice it would be if “employee ownership rates” of Fujitsu PCs and mobile phones were a little higher.
The 10,000 Japanese staff affected by Panasonic’s unorthodox strategy do not have long to consider their purchases.
Management insists that staff buy their Panasonic goods — whether they need them or not — by the end of July.
..definately inflationary.
Yeah, and what would you do if you were an employee?
Buy, and dump the product out on craigslist (or whatever) as fast as you can before your fellow-droids figured it out to take the smallest loss possible.
Or make excuses about your grandmother’s death, etc.
Forcing employees to snort your cocaine = FAIL.
i juist Googled “panasonic employee discount”
Can’t get into the employee side of panasonic.com without user / password .. but there’s other hits.
Sports bike blog..
one guy says :Anyone here work for Panasonic?
And if so, is it true that employees get a 30% discount?
another: 30% for employees is probably about right….i know i got my sony xbr tv for OVER 30% off..but i didnt ask questions
another says.. Wouldn’t be suprised, theres huge markup in electronics. 50% in many cases.
another.. “I work for Panasonic also, and we DO get an employee discount, but it has to be from internet sales, and on top of that, it is limited to certain products (usually overstocked items). The discount to us is not a set amount, but depends on the product, (plasma tv’s is about 30% right now).”
———
I can see buying some TVs and high end cameras at discount and trading with friends.. or maybe take orders and sell at a profit if the discount is big enough.
“I owe my soul to the company store”
What if all failing businesses required this? This wouldn’t save the scrapbooking and candle shops. Wouldn’t be bad if you worked at a grocery store, though. (Or a bar or liquor store!)
That kind of thing is common in clothing stores. For the most part, the cash register clones HAVE to wear currently sold product that they must purchase, albeit with an employee discount.
So, the layoffs in my company finally took place yesterday. They removed about a third of all engineers I work with; thankfully, I was not one of them.
Something I found interesting is the fact that about 75% of all H1-B employees were laid off; I don’t know if there is an actual reason behind it, but I wonder if other companies are doing the same.
At least in my company, H1-B employees got paid at the same level as US employees; thus, keeping foreign workers would be more expensive when you take into account all the lawyer & immigration fees.
Also, there are no minority members within my office anymore.. yay! It’s all white men, some white women, and I couple of US-born asian & indian guys. The only minorities work in the front desk, cafeteria and the janitors.
Good times!
Political pressure. This is another hot item for politicians to spout off about. If your company is large or gets government contracts or money, I’d bet there was political pressure to do the firings that way. Just wait until they start filing EEOC claims….
We do not have government contracts at all, and the company is about 600 employees worlwide.
Maybe they’re just “patriotic.”
Do you consider keepin US employees a bad thing?
No, I am just skeptical when politicians start imposing “buy American” restrictions in porkulus bills, and beat up big corporations for not firing foreign workers first, as if the Politicians have any clue about this stuff. I’d prefer a merit based system and free trade, but then again, I’m not trying to get elected.
Yeah, that was my first reaction too. Keep the best staff but then I figured that the company had probably brought in fairly average talent in via the H-1’s. There are companies that do that.
The really good talent was sucked up early in the H-1 game. Exception are the US-educated but still foreign nationals who must get visas to work here … sucks to be them. As hard for them to get a job in technical field as native-born, since they are not going through the H1-B broker mill. (The whole point of this system is to have labor you can dispose of at the drop of a hat.)
Glad my foreign national, US educated friend (from HS on) got married to US citizen last year and will be getting her green card. Very bright and talented, green card will let her “get job at grocery store.” Hard out there for science majors, especially if you don’t make it to phd.
Well at some level it does become hard to justify those Visas when you’re laying people off. Theoretically the reason for them is that you can’t hire enough people already in the country, so you have to bring in foreigners to do the work.
I agree 100%. A co-worker from India would have needed a new H1B in a couple of months. It would have cost the company a few thousand dollars to get the paperwork completed; on the other hand, they had a handful of people that could do the same job w/o having to rely on a work visa.
It just makes sense financially!
I mean to say “A couple of US-born asian & indian guys”. I shouldn’t be typing so early in the morning.. lol
Ha ha ha, for a minute there I thought you really did couple with them…
I hadn’t had coffee this morning :-p
There’s minorities, and then there’s “disadvantaged minorities.” It gets confusing.
In general, Asian immigrants or second-generation Asian-Americans place a premium on a good education and a strong work ethic, along with a great deal of native intelligence. They also look after their own. It’s no accident they’re thriving in America.
Most of my colleagues are first and second generation Asian Americans. They have a stronger sense of family than other races or mixes (such as me). But out of 50 of them, there are three who party too hard and drink alcohol heavily. They are sort of an embarrassment to the others.
For the most part, Asian Americans in LA remind me of how my family was in the 1960s. Then we became dysfunctional in the mid-70s!
Also, there are no minority members within my office anymore.. yay!
Huh? What, do they make you nervous or something? Afraid they’ll take your job?
The best boss and mentor I ever had was a Jew; the kindest coworkers I’ve ever had (and most generous of their time) were two Black men. One of the best teachers I’ve ever had was a drawling redneck from Alabama. The most annoying boss I had was a white male. He didn’t have much of a head for technical stuff, so I used to have to wear him down for weeks until he thought the method I wanted to use was his idea.
I’ve worked with jackasses and bullies, too, and, trust me, they come in all colors and sexes.
Did Geithner&OBwan decide to phase out stock market plunge protection?
Frankly, if I were in their shoes, this is exactly what I would do: Let’er rip early on, to a point from which a market rebound by next election season is in the bag.
Congress passing the stimulus bill dident stimulate a rally today. Maybe we will see one when it is signed?
I think you give them too much credit, strategically speaking. Besides, Geithner is a sacrificial lamb. He won’t last a year.
The Cheney-Shrub “Shadow Legacy” effect is still… growing mold.
“…One program, Hope for Homeowners — which Bush officials and banks promised last fall would shield 400,000 families from foreclosure — has so far produced only 25 refinanced loans.”
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!!
“…On the defensive, the industry nevertheless benefits from one strain of popular opinion that home buyers who took on risky mortgages — even if the industry pushed those loans — don’t deserve to be rescued.”
“…However the skirmish ends, the industry’s contention that it has done as much as possible to limit foreclosures seems hollow”
How Banks Are Worsening the Foreclosure Crisis:
http://news.yahoo.com/s/bw/20090213/bs_bw/0908b4120034085635
So, CEO did a little horse and pony show.
Last spring we decided to slow our growht and go for profitability. We expected to be slightly profitable and ended up being substantially profitable. YoY growth was originally projected at 40%, but that was scaled back to 20%. Ended up at 50% YoY growth.
Profitable AND cah-flow positive with revenue per employee up substantially.
So, he went to the board with a normal 5% or so merit increase (annual inflation raise). Board said no. He asks, how canI tell the employees what a good job they are doing, then tell them no raises?
Board says that NO ONE in the industryis giving raises. So, CEO goes and looks hoping to find someone giving raises. Can’t find any.
At least no layoffs or cuts for us.
Highly inflationary, I’m sure.
sorry, 50% yoy growth was REVENUE growth. Head count grew about 2%.
Free beer yesterday and free beer tomorrow but no free beer today.
Let’s see, they can’t give you a raise when times are good because they have to look good for the investors and they can’t give you a raise when times are bad (even if they are doing well) because, well times are bad.
A 75% consumer driven economy that doesn’t give it workers raises = FAIL
I’m going camping this weekend @ San Simeon, I’ll check out the 60′ RV section to see if any one their matches his description.
“…He has since left the area.”
Local developer files for bankruptcy:
http://www.ksby.com/Global/story.asp?S=9838342
Maybe the folks in “The O.C.” were on to something with that “gated community” template thingy.
“…A Louisiana man finds a homeless man living on his property, but doesn’t call the police.”
“Instead, Jim Stewart moved the homeless man, Kenny Woods, from under his porch to inside the home.”
“Woods and his dog, “17,” are now security guards for Stewart’s property.”
Homeowner invites homeless man living under porch to move in:
http://www.ksby.com/Global/story.asp?S=9824339
opportunities everywhere, for both parties
How many times have we heard this prior to their company collapsing within a month after their announcements?
BofA CFO: Bank is financially strong
Price went on to say Bank of America believes it has the best deposit franchise in the world, which is a “very cost-effective funding source,” and that the company’s liquidity “continues to be strong despite the difficult market environment.”
http://finance.yahoo.com/news/BofA-CFO-Bank-is-financially-apf-14353498.html
Hearing such a pronouncement has up to this point been a fantastic signal to get short said stock.*
* Not investment advice. YMMV. **
** I’ve been short BAC for a long time–my only regret is that it was a very small amount.
Sorta like the NFL/MLB team owners “Vote of Confidence” in the head coach or manager.
You think Kaiser might be having a public relation problem…or is there a Simon Cowell $$$$$$$$$ money making profit in such behavior?
America land of the Free…or…menace to society?
Octuplets doctor has another patient expecting quadruplets
“The patient, who is in her late 40s, wanted one baby. Dr. Michael Kamrava transferred at least seven embryos to her. She is now hospitalized without insurance.”
http://news.yahoo.com/nphotos/IVF-Clinic/photo//090210/480/c3d7444cd9694a52876b99e2e1feadf7//s:/ap/octuplets
Now they’re trying to suspend mark-to-market accounting?
Geez, somebody better tell the Candy-Crappin’ Unicorn™ that closing your eyes during a plane crash doesn’t prevent the plane from crashing!
Wow, it’s like the senior convention of Dumb-n-Dumber out there.
They’ve been talking about suspending mark to market for months, possibly over a year. It’s an outlandish consideration.
I’ve got the solution to the bank’s mess. I have several boxes of paperclips in my office. I’ve appraised them at $1,000,000,000/clip and there are 100 per box. I’ll sell each box for $35.00 (my cost: $3.50), but they’ll record them at the appraised rate. I make some money, and we’re left with solvent banks.
Totally, FPSS.
Suspending mark-to-market is just drawing the shades on the windows in the hope that no one will notice the sewer is backing up and flooding the house with “legacy assets” (I hear that’s the new branding for the same old toxic cr*p).
Adding more uncertainty to the market by letting the banks cook their books—-I’m sure that will end well, guys.
Didn’t we go through this same kabuki-show with Paulson?
Do the laws of accounting or physics change depending on whether you’re a Democrat or a Republican?
Lawd, we live in a land populated by mental midgets. Where is the outrage in the MSM?
“Where is the outrage in the MSM?”
Are kidding me? Every night there are at least a couple of guests on Kudlow who scream at the top of their lungs “STOP MARK TO MARKET NOW!” MSM, CNBC in particular, is 100% behind this insanity.
Everybody is talking about how critical it is to restore confidence in the market. And after that turns around and proposes to make the market even more opaque by suspending mark-to-market. It is a bizarre world.
The MSM ARE mental midgets. Who do you think sold this country on the unicorn?
There is a unicorn living in your head….. rent free.
No outrage from the MSM. The MSM is owned by corporations; GE, Viacom, Disney.
“legacy assets”
Sounds like something you would cash in to buy an estate at the Heirloom Collection development.
link? I need to do a paper on this topic and am trying to collect as much info as possible and I want as timely information as possible.
Here’s an old mention related to Geithner’s speech the other day - sounds like FPSS has some new info though - I’d like to see a link as well if possible.
Bloomber article
I saw this one today and there are quite a few links on the page to different sites dealing with the issue (I think). Hope it helps.
http://finance.yahoo.com/tech-ticker/article/175140/How-to-Fix-the-Financial-Crisis-Suspend-Mark-to-Market-Accounting?tickers=ING,C,BAC,JPM,WFC,XLF,SKF
“Still, there remains the prickly question of how to deal with banks’ toxic assets, now euphemistically called “legacy” assets. Ryding, a former Bear Stearns chief economist, does believe there’s a chance these assets really are just temporarily distressed. If true, that suggests many firms are suffering from a liquidity crisis, as policymakers and bank executives contend, vs. an insolvency issue, as many economists and market watchers fear. ”
ROTFLMAO. That’d be right up there with “It’s just a flesh wound!”
Add John Ryding to the running list of fools.
I’d like to know how long is “temporarily”. Sure, in 15-20 years they will probably be worth what they think they should be worth today.
World Press award goes to US foreclosure photo:
“The international World Press Photo jury has selected a photo by US photographer Anthony Suau as photo of the year 2008. It shows an armed police officer searching a deserted home in the state of Ohio….
Because when you first look at the picture you think that your looking at a war-image. A war-image that refers to either a criminal war of a drug-war. What you realize is that this is actually an economic war…”
http://www.worldpressphoto.org
U.S. consumers’ mood falls sharply
The Reuters/University of Michigan Surveys of Consumers said its index reading of confidence for February tumbled to 56.2 from 61.2 in January.
“Confidence fell in early February as consumers came to the consensus that the economy would remain in recession throughout 2009,” the report said.
“Moreover, nearly two-thirds anticipated that the downturn would last five more years.”
http://biz.yahoo.com/rb/090213/business_us_usa_economy_sentiment.html?.v=3
When unemployment goes up, management looks for every little excuse to fire an employee. Of course, laws against discrimination. So they will look for political opinions, whether the employee is a team player, etc.
At the same time in all big cities the police and courts look for any excuse to get more violators of victimless crimes. Even if most of the violators will pay some time of fine to stay out of prison their history will be “tarnished” and they will have a “record,” thus making another excuse for management not to hire the violator of a victimless crime.
This is the hidden totalitarian society within the “land of the free.”
We have the largest prison population of any nation in the world.
“Land of the free” died decades ago with the corporate prison industry.
Bill,
From what I’m reading you have recently been fired and have also been arrested for drug or s*x crimes.
Probably a good thing for the rest of us. I’m not sure why you think violators of our laws should be given a pass.
You’re obviously not a “Team Player” with society at large. Good luck with your future.
they found the kiddy porn on his computer?
It wasn’t me! I was keeping it for a friend!
Congress is debating the bailout. Bunch of monkeys trying to hump a football conjures the most appropriate image for me.
And again, not a single GOP vote this go around. My, my this is getting interesting - modern day pols usually don’t dig their heels in like that anymore - let alone stick together as a bloc.
Comment by edgewaterjohn
2009-02-12 06:28:42
Well, others here know far more than I, but FWIW I’ve been closely following UCO (2x oil up) lately. But I’m just playin’ with a spec account - nothing serious. It fell through $8 yesterday, and might nibble if it does so again today. It’s a new one, and 2x, but again - this is playin’.
—
still following it?
Nibbled at triple seven - sounded like a lucky numba! Blew threw $8 and halfway through 7 pretty fast didn’t it?
I’ll keep watch next week, like to see where/if it catches some support again.
-looks disconnected.
rule of thumb says if you see a 6, you should take it off. Unless of course, you are an investor.
Its just playin, right?
Consumers have cut back sharply on food spending, shunning restaurants, opting for generic products over brand names, trading in lattes for home-brewed coffee and shopping for bargains. That is hurting sales and profits at many food processors, grocery chains and restaurants.
In 2008’s fourth quarter, consumer spending on food fell at an inflation-adjusted 3.7% from the third quarter, according to data from the Commerce Department’s Bureau of Economic Analysis. That is the steepest decline in the 62 years the government has compiled the figure.
Yep, that also must be inflationary. LOL
BWAHAHHHAHAHAHAHAHHAHAHHHHHHHHHHHHHHHHHHHH!!!
The big drop likely comes from two things, said Joseph Carson, an economist at AllianceBernstein who worked at the Commerce Department in the 1970s. First, consumers have been trading down to lower-priced items. Second, he thinks many households dug into their pantries for staples rather than going to the store, a trend that can’t continue indefinitely. “You can’t contract at this rate for long,” he said. “It’s just shocking.”
Actually, you can. You can trade down to DIY. Throw in substitution of lesser goods, and that contraction can go on for a VERY long time.
DH and I have dinner reservations for Valentine’s Day, and the restaurant called last night to remind us. Never had that happen before. LOL
Also, FWIW, a friend just emailed that she has been on hold with the unemployment office for over 90 minutes waiting to find out if her benefits were extended. She worked for the same place for over 20 years before being let go, and isn’t trying to “work the system”. Another sign of the times.
My friend just told me her sleep furniture store is closing march 4th after over twenty years. she has a two year lease left but she is just moving out.
I was shocked but not surprised.
be surprised she hung on that long
lots of places went belly up already in 2007 in Floriduh
No kidding…where do they find these retards? I would like at some point in my life to get an economics degree, but jerkoffs like this would make me embarrassed to admit I had one.
How can they not realize that people could, in large numbers, start buying bulk pinto beans, raising veggies in the summer/fall (greens will grow until december at least) and start raising their own chicken/rabbits/other to help out. If a person was so inclined, he could eat VERY cheaply and still be eating very delicious and nutritious meals.
You’re telling ME this? ME?!?
But seriously, yeah, they really don’t get it, do they?
“You can’t contract at this rate for long”
Gee, where else have we heard that before? It’s becoming a common refrain.
From what I understand this can contact all the way to the point where people eat dirt.
contact=contract
BTW eating grass comes right before eating dirt, in case you’d like to know if we’re getting close.
You’re telling ME this? ME?!?
Well….I knew you would appreciate it more than most.
To follow my friend’s new career…she wants to buy a chinchilla farm!
She is a natural contrarian indicator.
Blue Skye, if you’re around, thanks for the reply to my query in yesterday’s bits about whether there is a tax credit for installing solar panels on a home.
In case anyone is interested, I found a gov website with info about tax credits for home improvements to increase energy efficiency:
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits#c1
When you sharpen your pencil, keep in mind that $1/watt is on the way.
Less than a $1 a watt and already in production.
Google.
Big banks place moratorium on some foreclosures…
NEW YORK (Reuters) - Citigroup Inc, JPMorgan Chase & Co, and Morgan Stanley said they had placed a moratorium on foreclosing on some home loans to give the government time to launch a $50 billion mortgage relief program.
The moratorium announcements come days after major bank chief executives committed to pausing mortgage foreclosures at a Congressional hearing.
Foreclosures have skyrocketed during the mortgage crisis. The National Association of Realtors said on Thursday that sales of foreclosed homes helped drag the median price of existing homes to its lowest level since 2003.
Citigroup said its moratorium, which started on February 12, will last until either President Barack Obama has finalized the details of a program for modifying mortgages, or until March 12, whichever comes first. It applies to mortgages that Citi owns, to borrowers living in their homes.
Well, dang! Now Obama actually has to come up with a plan. Isn’t simply announcing that there will be a plan enough to keep Wall Street happy for a day or two?
Think this is the catalyst for the next rally and sell-off (when plan is announced)?
I’m seeing it as more of a “we can keep these mortgages on the books at face value” foreclosure moratorium plan. I’m sure the loans they are holding off on foreclosing are the ones that are the most worthless. Those ones they’ll sell to the govt at a great discount, like say 10%.
The rally, more a side effect.
I have started thinking of house prices as a giant cylinder of water with a hole drilled in the side about half way down and marked median income affordability. I also picture politicians at the top pouring buckets of water in to keep the level above the affordability line. When they stop the water will leak out and stop at the affordable line. The politicians are filling their buckets from Lake Bailout which is fed by the Tax Payer River.
Add a siphon to the affordability hole for overshoot.
Arizona cuts 9000 from Dept. of Economic Security.
“The cost-cutting moves, which officials said would affect nearly every service the department provides, come in response to more than $90 million in cuts to the department’s budget last month. The department, which oversees agencies including Child Protective Services, the food-stamp program and child-support enforcement.”
http://www.azcentral.com/arizonarepublic/local/articles/2009/02/13/20090213des0213.html
Comment: I suspect the next big cut will come from the Dept. of Public Safety where they cut the number of police by 20% and release all the prisoners from the jails and the stage is set for mass public unrest.
Comment: I suspect the next big cut will come from the Dept. of Public Safety where they cut the number of police by 20% and release all the prisoners from the jails and the stage is set for mass public unrest.
They will only release the villent criminals and not the dope smokers. In fact, they will arrest more dope smokers. That’s how government works. The violent criminals will work for the police to scare people into wishing for more security. More security means more push for taxes.
“This is the worst; after the sixth quarter of negative growth, it will be the first quarter ever of negative earnings,” said Howard Silverblatt, senior index analyst, at Standard & Poor’s.
…
As of the close of business Thursday, Silverblatt calculates S&P earnings per share, on a reported basis, at a loss of $10.44 for the quarter. If financials were taken out of the equation, that deficit would drop to $2.35 a share.
MrktWatch: S&P heads to first quarter of negative earnings
Eh? They haven’t reported six quarters of “negative growth” - Q1 2008 was quite a bit higher than Q4 2007 actually.
Nonetheless - that’s quite a shocking drop in earnings, and now way below the bottoms from the last two recessions (both still positive):
2002: $3.00
1991: $2.55
More and more, the data is pointing beyond Recession to Depression.
In the last two recessions, you kept the corporate re-financing game going by lowering interest rates. In this cycle, you no longer have that option.
In short, earnings were goosed by cheaper debt.
The long Ponzi of rolling debt into more debt from 1983 to 2007 is over!
Would you remind me again how many times interest rates can be taken from 18% to 0%?
Do you mean before you’ve snorted the Candy-Crappin’ Unicorn™’s candy or after?
the P/-E analysis
Yeah, there was plenty of that during the dot-bomb bubble.
Yes but this is the index as a whole. Have we ever seen the P/E for the S&P 500 reported as —?
True, true. I feel this shorting opportunity coming on.
Lawd, I haven’t been this excited since ……………………………… Sep 2008.
That was sooooooooooooooooo long ago! It’s like withdrawal or something.
Barry is taking his show on the road to Az. next week to save the day, for suffering home ‘owners’.
Obama to outline plan to stem home foreclosures…
WASHINGTON (AP) — Several major banks are expanding their efforts to halt home foreclosures while the Obama administration develops its plan to help struggling homeowners.
The White House said President Barack Obama on Wednesday will outline his much-anticipated plan to spend at least $50 billion to prevent foreclosures in a speech in Arizona, one of the states hardest hit by the foreclosure crisis.
“It’s not intended to be measured by one day’s market scorekeeping, but instead to ensure that the 10,000 Americans each day that have their homes foreclosed on, and the millions more that are barely getting by, are protected,” White House press secretary Robert Gibbs said Friday without providing other details.
Treasury Secretary Timothy Geithner announced a revised effort to stabilize the financial system on Monday. It contained outlines of a foreclosure-relief effort, but few details.
“I had been planning to blog today on US Treasury Secretary Timothy Geithner’s proposals for saving/reviving financial intermediation in the USA. However, picking through the entrails of this multi-faceted, surprisingly incomplete, seriously underfunded, occasionally well-designed but mostly inadequate, counterproductive and unnecessarily moral-hazard-creating set of proposals was just too depressing. I will wait till I am at my parents’ home this weekend, mollified and mellowed by my father’s good claret, before I review the Geithnerbharata.”
http://blogs.ft.com/maverecon/2009/02/save-banking-not-the-bankers-or-the-banks-the-case-of-ing/
—
Buiter has a 15 page resume’. I’m not sure if he knows how to swim though.
कृपया Don’t,
Miss-Treatise
LOL
How did you get the Devanagri script in HTML?
and let you trademark it?
NEVER !!!
In all seriousness…. I get lucky, a lot
माधर्चोद् तेरा भोंस्डा।
I’m gonna get banned for this one! LOL
I googled your scritch scratch and nothing came up. do tell…
you don’t wanna know, fpss, you are very bad (in a good way
)
February 16, 2009, Alexandria, Va. – The National Credit Union Administration (NCUA) placed Center Valley Federal Credit Union of Wheeling, West Virginia, into liquidation Friday, February 13, 2009.
–
this came on the heals of the Sherman County Bank, Loup City, Nebraska bellyflop.
Im not sure if the vegas book on bank failure friday counts Credit unions, but the +/- was 2.5
I took the over.
again on the heals.
Riverside Bank of the Gulf Coast, Cape Coral, Florida.
its live on the intertubes !!!
Corn Belt Bank and Trust Company, Pittsfield, Illinois.
-trifecta, vegas book pays the over.
Pinnacle Bank, Beaverton, Oregon
I stopped at the local cider mill today, a bit of an anachronism but a local landmark that simply makes good cider. I wanted 3 gallons for a batch of applejack. It didn’t look like he was making cider, but he said he had some. “I have apples, but people just don’t have any money.” How much for three gallons I asked after a taste from the barrel. “$7″. How much for 5? “how about $10?” Done.
Welcome to 1980.
Two carboys will be all a bubble by morning.
How do you make it? I turned a batch of pressed (I have a cider press) apples into something alcoholic, but it tastes terrible. Also this past fall I picked 75 lbs of apples and used a wine recipe this time (which partially means a lot of water added, where the cider/applejack attempt didnt use any water, only juice).
I made apple wine once out of frozen conentrate and the result was light and tasty. I had hopes for my attempt at applejack/cider but it fell short. So, any tips?
oh yeah, for the wine, this time I didn’t press the apples. Just chopped em all up and added water, suger yeast and let them soak.
You need to kill all the native yeast + bacteria via boiling, and add back the “good yeast” that actually do the fermentation to convert to cider.
That, and you need all the canning/sealing stuff. It’s not easy, and I’m no expert.
I use campden tablets (potasium metabisulphate) to kill the bad stuff, no need to boil.
In the old days, hard cider was made by allowing the juice to sit in an open container until it captured natural yeast from the air, just fyi.
And I just bottle my wine in normal wine bottles, no special sealing. The ph level and alcohol act as preservatives and I’m very clean in my methods, so no bad stuff.
I make some pretty decent wine. Just the attempted cider turned out like crap. I think it might be a good cleaner though…
Natural fermentation (= sourdough) is a bit of a cr@pshoot which is what lead to the more scientific approach in the first place
I’m a very big fan of natural leavening (= sourdough) for bread including maintaining my own sourdough starters in my apartment.
However, the schedules and work involved is so much that I’m not surprised that people go for commercial yeast instead.
But the taste, the taste, the taste …. lawd, i needs me my sourdough back.
I’m lazy on my bread, I use brewer’s yeast. On the cider I use Chanpagne yeast. Jacking the cider is an whole other thing. It’s not “wine”.
Consult your local moonshine laws.
‘Consult your local moonshine laws.’
I would, iff’n I could focus my eyeballs that long.
Actually, I’m out of applejack. I done drank it all. Ahhh….memories….actually I don’t got no memories. Heck, I can’t even recall my name anymore. And that’s how I know I brewed good applejack.
Natural fermentation (= sourdough) is a bit of a cr@pshoot which is what lead to the more scientific approach in the first place
A total p00pshoot, that is, but how amazing when it works!
I’m a big fan of natural fermentation, philosophically speaking, but it takes a somewhat stable environment, consistency in ingredients, and time for serious trial and error.
Sinle pass distillation? So what do you get, like 40% or so? I’m not distillin yet, but its in my near future.
If I’m ever in blue skye country I expect to have a nip.
Have seen the price of a house in my former Fresno neighborhood take a huge zillow fall. This is near Fresno air terminal.
Here is the price hisory
07/22/1993: $58,000
06/30/2000: $62,500
11/22/2008: $98,480
For sale now at $69,900.
Zestimate $143,900
Peak Zestimate $248,000 in January 2006.
3 bedroom 2 bath, 1300 square feet. Someone missed the falling knife 3 months ago and wants out badly! A 2100 square foot one sold for $184,000 in October. Ouch!
Three types of pepole: People who can count and people who cannot count. Actually we will divide them into 1) productive savers (taxpayers), 2) tax recipients (the big bankers and other corporate fat cat, socialist engineering bureacracy paper pushers, and welfare moms or 3, the incarcerated.
Category number 1 is dwindling. And many people from number 1 will become number 3s. From victimless crime laws that currently exist and from numerous more victimless crime laws to be put on the books. Free speech may become a victimless crime. I wonder when they will plug Peter Schiff or Ron Paul?
Yes, this will take more revenue out of the government’s pocket, but as we see lately, the government does not act rationally. I predict I will fall into category 3 sooner or later, but at least I will not be sanctioning the regime. Freedom is the one thing hou have when you have nothing left to lose.
Why would you be in Cat 3?
I just got a rather strange and unsettling call from WAMU.
The guy said to look it the mail for a $100 gift certificate offer to use next Monday, and that they would be open on the holiday.
Another cash crunch coming, or just part of the ongoing avalanche?
I’ve been getting an avalanche of $100 offers from banks.
Most have minimal-ish-ly boring requirements. I think I’m bored enough to just get all of them, get my candy, and shut them down.
what is money?
http://research.stlouisfed.org/fred2/series/BOGNONBR
OK, but think about this, this is a bank, asking for cash, and willing to give cash to get it. Do you think they can pay the incentive from tarp funds?