February 21, 2009

The MSM Is Currently Feeding Us Dog Crap

Readers suggested a topic around the current “crisis” and the housing bubble. “I would like to see some discussion about the difference between “truth” and “conventional wisdom.” We are currently seeing revisionist history, by blaming subprime mortgages for the meltdown, while ignoring the 900 lb gorilla walking in the door (ALT-A resets/walk aways).”

“The MSM is currently feeding us dog crap, by saying that the latest plan will “stabilize” prices, and that current homeowners should be supportive, because it will stabilize prices at an artificially high level. But “gravity” says prices won’t stabilize until the demand for houses exceeds the supply (which IMO won’t be happening anytime soon).”

“Can artificially boosting “confidence” alter the laws of gravity? Everything I’m seeing with my own eyes has convinced me the bad news isn’t finished yet. Am I too pessimistic, or are the PTB pumping out happy gas to keep everyone from doing the final run for the exits?”

A reply, “When I keep seeing demand for many items, not just the purely discretionary, declining 10, 20, 30, 40, and sometimes 50+ percent on a YOY basis, it’s quite clear the bad news isn’t close to being over. The question for me isn’t whether this downturn will be severe, last for years, and affect many countries around the world, but what non-economic impacts will happen such as happened in the 1930’s?”

Another said, “Obama’s plan will NOT stabilize house prices. Even Obama, in his speech the other day, laid out a laundry list of people who would not be bailed out, like greedy flippers. Well I’m sorry Barack, all you need is ONE greedy FB to who is not helped foreclose and go BK. That will set your comp. The only way to stabilize home prices is the rescue them ALL, which is impossible.”

Mercury News. “The Obama administration unveiled a three-pronged plan to stop the nationwide slide in real estate values, saying it offers potential relief for struggling homeowners and a possible shot in the arm for an ailing economy. But it’s unclear how many in Silicon Valley will benefit since so many homeowners have big mortgages that may not qualify for one of the programs announced Wednesday.”

“Experts said the refinancing plan will help lower-middle-income borrowers in California, but may not do much for those with the large home loans typical in parts of the state, including Silicon Valley. That’s because the refinancings will be only for mortgages held or securitized by Fannie Mae and Freddie Mac, which only made loans under $417,000 in recent years. Slightly more than 60 percent of the home loans made in the state in 2006 and 2007 were over those loan limits, according to estimates by the California Association of Realtors, although in 2008, because of falling home prices, only 33 percent fell into that category. Also in 2008, the limit was raised to $729,750.”

“‘There are still a lot of people who can benefit from this,’ said Stanley Tseng, a past president of the Silicon Valley chapter of the California Association of Mortgage Brokers. ‘In the past year, we have encountered many, many cases of people who bought a home in the last three years who want to refinance but cannot.’”

The Sacramento Bee. “President Barack Obama unveiled a $75 billion foreclosure-prevention plan Wednesday, but it’s not clear whether it goes far enough to rescue California’s legions of distressed homeowners. Daniel Torres Jr. of Elk Grove, who works for the state Department of Corrections, is trying to avoid that fate, but said he and his wife are falling behind on their $3,600-a-month payments. ‘If they could just give us something that’s affordable,’ he said. ‘Just help us out on the payments.’”

The Atlanta Journal Constitution. “Getting better terms on their mortgage doesn’t do much good for someone who doesn’t have a steady income, said Mark Sulimirski, chief operating officer at Equity Depot. ‘It’s going to help some people, without a doubt,’ Sulimirski said. ‘But are they going to give a loan to someone who doesn’t have a job?’ ‘For the people who can’t make their payments regardless,’ he said, ‘it’s not going to make a difference.’”

The Review Journal. “The housing market is so down in Las Vegas, it’s got the analysts depressed. Dennis Smith of Home Builders Research and Larry Murphy of SalesTraq both reported 284 new-home sales in January, the lowest monthly total on record and a fraction of the number sold during the market’s boom in 2005 when nearly 40,000 new homes closed escrow. ‘They’re not good,’ Smith said of new-home sales. ‘I anticipated the number to be very low, but when you see the number, it’s very shocking.’”

“Homebuilders are not going to start new projects unless they can make a profit, which is difficult if not next to impossible in today’s business environment, Smith said. They have to compete not only with foreclosures, but with other builders selling homes for less than $100 a square foot.”

“‘I can’t wait for it to change because it will get better,’ Smith said. ‘I’m tired of talking to people who are losing their jobs. It’s depressing. I’m sure it’s astounding many economists how broad this recession is that started with housing.’”

“The resale median price is $155,000, the lowest price since January 2003, Smith said. ‘There’s a number that’s also shocking,” he said. “Anybody who stops and thinks about it says, ‘Holy cow, it’s a mess.’ Half the homes are priced under $155,000.’”

“Again, foreclosures are putting downward pressure on home prices. Murphy said a key statistic is that 67 percent of existing-home closings in January were bank-owned homes with a median price of $139,000. The remaining closings had a median price of $170,000.”

“Nevada Assemblywoman Barbara Buckley, D-Las Vegas, presented a plan to the Legislature to encourage banks to work with distressed homeowners. President Obama has announced a $50 billion package to help homeowners avoid foreclosure. Citibank is considering a 30-day moratorium on foreclosures. ‘Maybe there’s relief on the way, but I’m skeptical,’ Murphy said. ‘Everybody agrees that the first $350 billion we gave to the banks was used to shore up their balance sheets. They didn’t loosen lending and help stop foreclosures.’”

“Brian Gordon, a principal at Las Vegas business advisory firm Applied Analysis, said low home prices in Las Vegas are not sustainable in the long term. It’s a function of supply and demand, he said. ‘The market’s sitting on a ton of inventory that sellers are looking to unload,’ Gordon said. ‘New construction has all but halted. Their ability to compete in price is limited when you look at the resale market. Bank-owned prices are approaching $75 a square foot.’”

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Comment by SDGreg
2009-02-21 12:23:08

“‘I can’t wait for it to change because it will get better,’ Smith said. ‘I’m tired of talking to people who are losing their jobs. It’s depressing. I’m sure it’s astounding many economists how broad this recession is that started with housing.’”

Not Roubini, Thornberg and a number of others. Of course, the coverage provided to them by the MSM was but a tiny fraction of the coverage given to industry shills.

Comment by snake charmer
2009-02-21 14:54:06

Things still haven’t improved much in that regard. Roubini and Tasseb were on CNBC recently, and one of the hosts suggested that economic pessimism, now that these two men had Bill Gates and Michael Dell waiting in line at Davos to hear them speak, essentially had become ridiculous and had peaked. Then the hosts asked for investment advice. From the lack of respect you would have thought that Jose Canseco was the guest, or that Roubini in particular was an idiot savant.

Comment by rms
2009-02-21 20:52:55

“I can’t wait for it to change because it will get better,’ Smith said. I’m tired of talking to people who are losing their jobs. It’s depressing. I’m sure it’s astounding many economists how broad this recession is that started with housing.

Any economist worth a $h!t knows that recessions start with housing foreclosures.

Comment by rms
2009-02-21 21:58:37

“But analyst Sean O’Toole of ForeclosureRadar said the 5 percent rule makes the Obama plan toothless in a state where the average foreclosed home is underwater by $180,000.”

In most of the country you can buy outright for $180K. LMAO!

Comment by Claire
2009-02-21 12:23:33

If people can’t afford their mortgage payments they should never have bought the supersized house in the first place - sell the house or hand it back to the bank and rent! Rental payments are much more affordable!

Comment by SDGreg
2009-02-21 13:19:48

This is the part that is still missed by some who think the foreclosure rescue plans are a good idea. Most of the people that might lose houses to foreclosure could rent better housing for less than even a reduced mortgage payment. Paying less for better housing should be a good thing. It’s mostly not a matter of being homeless or not, but instead how much one will pay for what kind of housing.

Comment by gal
2009-02-21 13:32:09

I think the best rescue plan could be instead of subsidizing BS community, help soldiers who are returning from Iraq, providing them employment and down payment to buy houses were foreclosed houses are sitting empty.Those young people deserve the $50 billion more than people who were after the “American dream” with empty heads and empty pockets…

Comment by kirisdad
2009-02-21 16:01:33

Good for you, gal. I agree.

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Comment by not a gator
2009-02-22 09:44:35


I think they are already eligible for sweet terms of VA loans. But why not concentrate more resources there. Many of our young people coming home have lost limbs or are disabled in other ways. We owe them.

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Comment by gallery
2009-02-22 11:00:21

Why do we owe them? We certainly owe them medical care, but why housing? To my mind these soldiers were serving Corporate America. They helped Monsanto to take over farming there. They allowed the oil companies to make record profits. The arms industry prospered. Blackwater made off with billions. Let the Corporations pay for housing for these returning soldiers. Flame away, but military personnel do not automatically “deserve” more than any other government worker.

Comment by doug-home
2009-02-22 13:21:48

Hey Gallery
Obviously you have not fought in a war….did you avoid the draft like Bush /Cheny /Clinton? When I got drafted to vietnam no one listened when I asked ” Why do I have to fight so the military industrial complex can get richer?” I got out after only 13 months… followed by 19 months at Walter Reed. I am still in pain now and yes the govt that sent me owes me.

Comment by gal
2009-02-22 14:55:49

I think the only who serves Corporate America are Rothschilds, Rockefellers (or better said Corporate America serves their interests)and the financial elite of United states like Merrill Lynch investment companies…
Most of the American soldiers are the victims of the Corporate America who go to war like the Slaves in old Rome, to give their life for some not existing “benefits”… “They allowed the oil companies to make record profits” gallery It is not those soldiers “allowed” but me and you who elected the government who serves Rothschilds, Rockefellers and the rest of Corporate America…

Comment by polly
2009-02-21 13:48:20

I was watching a few minutes of CNN this afternoon while making a cake (in the oven now, party later). I could only take a few minutes, but there was an administration official talking about the modifications they are going to make on unaffordable mortgages. She said they were going to help people whose payments (full PITI) were more than 31% of their gross income. So I pulled out my handy dandy calculator.

Took my yearly income, divided by 12, multiplied by 0.31, looked at the result. HOLY SH*T, Batman! That is nearly double my rent. That is nearly 2/3’s of my take home pay. Now, I admit that my take home pay is less than it could be because I max out my 401k, put a bit in medical flex spending account, have fairly high state/county income taxes, and have some charity payments taken out each pay period and I am only counting two paydays a month (lets say the other two go to Roth contributions).

I could live on the 1/3 left over. I could even save a few hundred bucks a month on that nearly every months. BUT, I am only feeding one person and have no credit card or student loan debt and my car was purchased for cash 8 years ago and the insurance costs on it are low. I also get a public transportation subsidy. Now, there would be some tax benefit to the interest and tax portionof the PITI payments (lets give it 25% for a guess, but it could be a lot less), but if you were trying to feed 4 people, pay for day care/summer camp, make car payments and student loan payments and actually pay for your own commute, you would be totally BROKE on that sort of budget.

Formula for redefaulting almost immediately if you ask me. You might be able to fight through it if you could see a steady series of raises coming down the pike, or if you had no child care expenses, of if your car was paid for and your commuting costs were trivial and had almost no student loans. Otherwise, tough times.

Comment by Bill in Carolina
2009-02-21 16:52:25

Polly, I asked my wife (ex-realtor) what the percentages were back in the day. She says they started out at 28/33%, where the max mortgage payment was 28% of monthly gross, and the max for all debt payments (mortgage, car, credit cards, etc.) was 33%. It later went to 31/36 and then 33/38 while she was active in the business (mid 80s to mid 90s).

We had just one mortgage where the payment was close to 33% of gross (no other debts) and those were the hairiest couple of years for us financially. Sold that baby two years and one day after we bought it, and started downsizing ‘cuz the tax law changed to treat each home purchase/sale individually for capital gains purposes.

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Comment by iftheshoefits
2009-02-21 17:58:23

The other thing that people forget about the historical percentages is that they were based on 20-year mortgages, not 30-year. A 30-year mortgage was seen as less responsible, something you really didn’t want to do.

These endless discussions about whether or not buying a house is an “investment”, vs. an “expense”, always seem to me to be missing the point. I was always told that the reason to buy was not for the investment, but so that you could pay the darned thing off! Isn’t that the whole idea - to plan ahead, and ultimately be free of rent and mortgage payments altogether, as you move closer to retirement?

Comment by Professor Bear
2009-02-21 21:17:07

Our rent is less than 23 pct of our monthly gross, and we are cozy but pretty much fit into our modest rental home. I plan to keep renting until home prices have bottomed out — probably in 2011 or later…

Comment by not a gator
2009-02-22 09:49:00

Monthly rent is about 8% of our gross–living cheaper than grad students–oh, HELL yeah!!

Comment by Eudemon
2009-02-22 11:47:09

Most people don’t make anywhere near the money you do.

Comment by CA renter
2009-02-21 17:01:16

You are exactly right, polly.

Not only that, but as employer-sponsored healthcare and pensions are becoming more obsolete, people will have to save more of their income than when the 28/33% DTI ratios were established. the effects of the credit bubble (spending more than you earn/can afford) have been obvious for the past few decades, IMHO. The housing bubble really made that trend go hyperbolic.

One of the other posters and I were talking about this last night. If only 10% of your income is spent on housing costs, there is so much left over to save and spend on things that really enrich your life (charity, travel, even consumerism done right — no debt).

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Comment by polly
2009-02-21 23:25:51

Any hope of living on the budget I described would be wiped out if you had to purchase an individual health insurance policy for a family. Maybe even if you had to do it just for an individual. COBRA you might just barely be able to eke out if none of the other big expenses applied (child care, other debts such as car and/or student loans, or really big commuting costs.) Good catch. I should have included that in the original analysis.

Comment by Silverback1011
2009-02-22 04:36:02

Excellent points above. Couple of thoughts occur to me. My first husband & I had a house with a 25-year mortgage in the 1970’s. It was about 25 % of our income, but I remember crying and being worried when a tax increase caused the total monthly payment to climb above $ 600 in 1980 or so. It seems funny now, but I was really worried. This from a couple with no c.c. debt, who gardened and canned, and put a side of beef in the freezer every year. But we didn’t have much saved, either.

Now, my second husband & I have a lot saved, and he was recently found to be disabled by Soc. Sec. and started getting a monthly check. Rumor has it that I’m supposed to be promoted at work in a couple of months. Hope it comes true. I’ll believe it when I see it in my paycheck. Plus, we have a fixed-rate mortgage. No problemo, right ? Wroonnng. He got his first disability check in January. Yesterday in the mail, he got something from Social Security caled a “ticket to work.” It’s a little piece of paper that says to “call about your return-to-work plan.” They say that if you don’t call a return-to-work agency that they’ve contracted with, you may be subject to re-examination by S.S. Well, we knew that. What is funny is that they are promising to find him a job (maybe), lots of help with transportation, work accomodations, etc., if he’ll just take his diabetes, depressed, memory-loss, heart-attack ridden self off the benefit rolls. It’s called the “Return to Work Self-Sufficiency” program. His first check came around Jan. 12th, and the date on his little Return-to-Work card is Jan. 13th. You’d think that with hundreds of thousands of able-bodied people in this country they can’t find work for they wouldn’t be too worried about one disabled American, but it’s not meant to be. Plus, they state in the booklet that came with the card that they’ve given his personal and contact info. to the return-to-work agency, so don’t worry, they’ll be calling. Ring-a-ding. The poor man has tried to work fulltime for the last two years since leaving pharmacy school due to his health, found 2 jobs as pharm tech and lab tech, and got fired/let go from both after 30 days for slowness. He can’t think fast or critically anymore due to various health issues. I’m sure that some hungry laid-off person would love those jobs and has them now, but they’re trying to help him return to the work force ? He applied to over 500 jobs last year, got 3-4 interviews, and got fired from the two jobs that 10 years ago, he was overqualified to do. Sad. Why are they wasting our time.

If something happened to him, as hard-working and as much of a saver as I am, I couldn’t keep the house we’re in. It’d be another returned-to-bank residence if I couldn’t sell it in a hurry. There is going to be rampant national unemployment, ghost towns, and whatever people have saved, they’re going to be hanging onto, not spending in the least.

A guy stopped by here yesterday and asked if we wanted to get some Weatherguard windows put onto the house. I just smiled at him and said we weren’t interested. Why would we spend about $10K on new windows for a house that’s a rapidly sinking asset/ship ? What a pathetic joke that would be. New carpet ? No thanks. I’ll get the old one cleaned, if need be. That’s what’s going to be wiping out thousands more businesses. No one will spend their money on “improvements” more than the minimal upkeep due to the fact that it’s just pouring money down an ever-wider hole.

Jewelry stores ? Nah. Pick it up used on ebay. Snowblowers ? Get one from the neighbor whose moving away. New cars ? I’m afraid to buy one from a soon-to-be bankrupt company. Who’ll service my new Saturn ? Dunno.

Comment by Eudemon
2009-02-22 11:52:12

“You’d think that with hundreds of thousands of able-bodied people in this country they can’t find work for they wouldn’t be too worried about one disabled American, but it’s not meant to be.”

Better re-think this statement, Silverchair.

Why is it anyone else’s responsibility to help your husband? Why is he entitled?

2009-02-22 12:43:07

Right- cause he is the only one that all us able bodied people needs to support. Funny how out of context the above rant is for the people that frequent this blog. The overriding theme has been personal responsibility and financial planning. Why dont you or hubby have savings to fall back on? Why didnt you take out a disability policy? No one is ever rooting for you to get on gov’ts nipple at our expense. This is the wrong place to look for sympathy for your situation.

Comment by Joe Lawyer
2009-02-22 17:56:20

Besides, he does not speak spanish-only, so he WILL BE CUT to make room for the important guests.

Comment by Spearmint_Tea
2009-02-21 14:34:39

Excellant point sdgreg!

Comment by Professor Bear
2009-02-21 16:43:12

“Most of the people that might lose houses to foreclosure could rent better housing for less than even a reduced mortgage payment.”

That’s right — it’s not in the consumer’s interest to keep making payments on an unaffordable loan, when they could rent the same house for relatively less. They should call the bailout what it is: a bank rescue plan, with little upside for the hapless owners of loans they cannot afford.

Comment by VaBeyatch in Virginia Beach
2009-02-21 19:51:23

Actually, if they had bought before the mania, and lost their job perhaps due to the mania, the rental prices could be a lot higher than what their mortgage was. Especially if they don’t have a job. Not everyone loosing a house now will be because of crap loans and HELOCs.

Comment by slb
2009-02-21 20:21:23

Actually, back in the day, being able to escape escalating rent was one reason to buy. Escalating property taxes can wipe that out, tho’.

Comment by Mike
2009-02-21 12:28:55

“Brian Gordon, a principal at Las Vegas business advisory firm Applied Analysis, said low home prices in Las Vegas are not sustainable in the long term. It’s a function of supply and demand, he said. ‘The market’s sitting on a ton of inventory that sellers are looking to unload,’ Gordon said. ‘New construction has all but halted. Their ability to compete in price is limited when you look at the resale market. Bank-owned prices are approaching $75 a square foot.’”

I don’t get this. Is he saying that housing prices are ready to go up again? If so, he’s in for a rude awakening - a home is only worth the lesser of what one is willing to pay for it or what they are able to pay for it. Where are all the steady jobs to pay for these 30-year fixed 20% down mortgages being created from?

Comment by polly
2009-02-21 14:19:49

I thought that was pretty incoherent too. Maybe he means that the supply will fall behind because there isn’t any building? He seems to assume there is plenty of real demand for what is already there. Anyway, the quote misses a few logical connections.

Comment by oxide
2009-02-21 15:53:13

He’s totally opposite from the truth.
If they bring back 20% down, low prices will be the ONLY prices. How manay people do you know with $40,000 in a checking account?

Comment by Neil
2009-02-21 17:07:20

That’s the point I’ve been making. A return to traditional credit markets will not respike the punch. It will take decades of people paying off their debt to re-create the property ladder.

Interesting times ahead.

Got Popcorn?

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Comment by combotechie
2009-02-21 17:59:47

“Interesting times ahead.”

Interesting times are already here.

Enjoy, and profit.

Comment by dude
2009-02-21 23:12:16


Comment by WAman
2009-02-22 09:02:39

FHA is only 3.5% down.

Comment by are they crazy
2009-02-22 13:10:44

Maybe I’m off base, but I don’t get all this talk about jobs being the answer. Even if they gave back jobs to all those who had lost them, the credit gravy train is shut down. So many were living on credit that once it’s removed, consumer spending takes a dive. It seems like the took the public’s credit piece of the pie and gave it to the banks, but their not giving it back. If the economy is really based on consumer spending, I don’t see as sustainable.

Comment by SDGreg
2009-02-21 18:21:05

It’s hard to know from what he said, exactly what he meant. I think the thinking is the same type of background growth that’s happened in the past (jobs, wages, people) will continue, such that in the absence of new building the excess supply will be absorbed more quickly and prices will resume rising in line with building costs which are higher than the current foreclosure sales prices.

But how much higher are building costs than current sales prices if you take away bubble land and materials costs and factor in lower labor costs? Absent job and wage growth which are both indeed absent and likely to remain so for at least two more years, it’s going to take years to work through the current excess supply. Lower home prices may be much more sustainable for much longer than he thinks.

If Las Vegas is faster than other markets to generate sustainable jobs in whatever new economy emerges, then indeed the excess supply could be absorbed sooner. However, I have no good reason to believe Las Vegas will be more successful nor fasting in doing so. I’m more inclined to believe it will be either no faster if not slower.

Comment by Itsabouttime
2009-02-22 00:51:47

I thought he meant builders could not be sustained if prices remained low.


Comment by Eggman
2009-02-22 11:20:57

These guys are stuck on that statistic that said that 7K people move to LV every month. I was always a little suspicious of that stat - it was apparently generated by the person who accepts the surrender of out-of-state licenses in favor of a NV license. I would think that somebody buying a spec house in NV would need an NV license to show the bank that they were occupying the house, and could additionally try to use it to escape taxes in other states. It’s easy enough to both walk away from the spec house and revisit your own in-state DMV to get another license with your real permanent address. Or to move your NV ‘address’ to a mail drop for tax avoidance. I think that most of LV’s growth is a fraud.

Comment by speedingpullet
2009-02-21 12:41:49

Have fun in LV guys!
I’m sending you some mental righteous indignation to help stoke the Engine of Wrath. Go get ‘em!

Oh, and the Wynn has a really nice cocktail lounge.
They do verrry good Apple Martinis.

About the MSM thing - one mantra that they’re all chanting at the moment is ‘falling house prices is the Worrrrrst Thing In The Worrrrld!’.

Everything from 25% unemployment to the Fall of Western Civilization is being laid at the door of negative equity.

And, yet, no one has brought up the point that the harder they rise, the harder they fall… they’re screaming about 20% drops and completely ignoring the fact that that’s from a 200% rise in some locations.

So far, no one has explored the idea that house prices in line with incomes might, in the long run, help out a lot more people that setting an artificially high floor in property prices (as if its actually possible).

So far, no one has been able to get over the short-term pain and adequately explain to me ‘what’s so bad about affordable housing’?

While I think Rick Santelli may have been screaming for a different reason than I am - he at least had the chutzpah to point out that its impossible to put a floor on either stocks or housing.
Which, obviously, is an idea that’s floating like a lead balloon at the moment.

Anyhoo - have great weekend, and I fully expect the property thang to be ’sorted’ by the time you all come back.

Comment by palmetto
2009-02-21 12:49:31

“The MSM is currently feeding us dog crap,”

Currently? The MSM has been spewing dog crap for decades. There aren’t any Edward R. Murrows anymore out there, maybe on the internet, but the MSM consists mainly of paid teleprompter readers, propaganda mouthpieces, illiterate writers, etc. Consider that GE (defense contractor) owns NBC. These are corporate PR outlets, with Orwellian conditioning for the masses.

One of the things that the MSM keeps trying to pound into the people is how worthless and stupid they are and even we on this blog tend to take up the mantra, which tells me the Pavolovian conditioning is working.

“A nation of cowards.” I’m wouldn’t take that, would you, comrades?

“A government of snivelling panderers” Palmetto.

Comment by llcarlos
2009-02-21 16:51:34

Santelli and his fellow floor walkers are against any of their tax money going to FBs. I don’t think they are against high home prices if they have owned a home for many years.
CNBC is hard to watch lately, with everybody screaming at once I can’t hear a thing any of them are saying.

Comment by santacruzsux
2009-02-22 10:11:22

I’d take crap, at least I might be able to use it as fertilizer. All I seem to get is a bag full of vomit from the MSM. Meaningless regurgitated talking points repeated endlessly.

Comment by Eggman
2009-02-22 11:22:56

Cancel that cable. TV is for morons.

Comment by santacruzsux
2009-02-22 11:31:34

Lol. Believe it or not, I only have the basic cable package as it was cheaper to get my phone and internet with it than without it. 20 channels of nuthin. Thank goodness for Netflix.

When I say MSM I’m pretty much referring to the websites of the conglomerate media.

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Comment by are they crazy
2009-02-22 13:19:33

I guess I must be lucky because we pay for expanded cable and find so many interesting things to watch. Discovery, Science, NatGeo and movies galore on demand. In HD its beautiful to look at. It’s sort of like the net - there’s everything available and you can pick and choose from exercise channels to travel. At the end of a long day, a swim and then “Sunrise Earth” and a great glass of wine seems worth every penny. Rarely watch networks, never watch news, and use a dvr so we never watch commercials. Combined with internet it is still worth it to us. Should it cost less, would we like it to cost less, of course.

Comment by Lisa
2009-02-21 13:05:25

“The resale median price is $155,000, the lowest price since January 2003, Smith said. ‘There’s a number that’s also shocking,” he said. “Anybody who stops and thinks about it says, ‘Holy cow, it’s a mess.’ Half the homes are priced under $155,000.’”

It’s not a mess for the folks who sat out the bubble (whether by choice or not) and are able to buy. Foreclosures are selling because their price points are in line with what conventional lending allows for local incomes.

Comment by Tim
2009-02-21 13:39:04

It is a shocking mess. $155k is way too high!

Comment by CA renter
2009-02-21 17:05:31

Also, housing prices had risen pretty steadily since the early 90s in Las Vegas. 2003 prices were high, historically-speaking. Why weren’t they thinking those “low” prices were a problem then? Prices probably need to fall to mid-1990s levels (or lower?) before they make sense for the average buyers in LV.

Comment by VaBeyatch in Virginia Beach
2009-02-21 19:55:58

I thought a lot of the foreclosures are going to speculators? Can a normal person go get a loan on a foreclosure? I thought conventional loans were no good since the property can’t go through normal inspection and what not?

Comment by Bill in Carolina
2009-02-21 21:46:35

You can get a home inspection on a REO before signing the purchase contract. You should do so. The only thing is that the bank is selling the property “as-is” and won’t repair any problems your inspector finds. The inspection will help you determine whether to go ahead with the purchase, bargain it down, or walk.

Our house was bought out of foreclosure in 2005. The bank even paid the title insurance policy (that apparently is the norm with foreclosures). We feel we did well.

Comment by AbsoluteBeginner
2009-02-21 13:11:11

‘Nothing is over, Nothing. you cant just switch it off.’

Comment by Curt
Comment by palmetto
2009-02-21 13:17:33

For some weird reason, I think this past week was the real “light bulb” week for the American people, I really do. Call it vibes or whatever, but I think it has finally dawned on folks the trouble we are really in as a nation.

However, one thing to remember with the Pravdaized MSM is that it is never as good as they say it is, and never as bad as they say it is, either. It is, however, in the business of “creating” the news, so to speak, and “creating” those ideas that people will then agree to.

Comment by Doug in Boone, NC
2009-02-21 15:25:39

I agree with you 100%, Palmetto. I think that ol’ shit that was about to hit the fan finally reached the fan’s blades last week!

Comment by Professor Bear
2009-02-21 18:34:05

Eto Pravda!

Comment by rms
2009-02-21 21:50:34

I agree, Palm. CNBC’s Santelli rant made into many living rooms.

Comment by Andrew
2009-02-21 21:54:06

A tipping point, so to speak. I feel it too….

Comment by Kim
2009-02-22 14:20:30

“For some weird reason, I think this past week was the real “light bulb” week for the American people, I really do. Call it vibes or whatever, but I think it has finally dawned on folks the trouble we are really in as a nation.”

Up to today, the “Chicago Tribune” never seemed to print more than one (occasionally two) negative real estate article per issue. In today’s issue the bad news about housing and foreclosures was plastered through multiple articles in different sections. One article even talked about ghost neighborhoods, as discussed in this blog earlier this week.

I went to openhouse-dot-com to see what happenings were going on in my area. The first 7 pages (out of about 40) were multi million and million-plus listings.

So yeah, I am getting that feeling too. I must say, for this area, its about time.

Comment by Manny
2009-02-21 13:42:49

““Getting better terms on their mortgage doesn’t do much good for someone who doesn’t have a steady income, said Mark Sulimirski, chief operating officer at Equity Depot. ‘It’s going to help some people, without a doubt,’ Sulimirski said. ‘But are they going to give a loan to someone who doesn’t have a job?’ ‘For the people who can’t make their payments regardless,’ he said, ‘it’s not going to make a difference.’”

OMG those ruthless bastards! They won’t give loan to someone without a job. Somone quick, call Uncle Barry O and demand he sign an executive order banning such practices.

Comment by mikey
2009-02-21 15:24:59

Will the LAST HBB out of Las Vegas Please TURN OFF the lights ?

Oh…and pull Ben, Bear and that unidentified stripper out of the Fountain :)

Comment by Professor Bear
2009-02-21 20:26:45

Here’s to hoping we both make it to the next HBB gathering, Mikey…

Comment by mikey
2009-02-22 06:27:28

Yes, for sure Bear …but I thought that you were going to be in Vegas Bear this time :)

Comment by NoVa RE Supernova
2009-02-21 16:21:12


In June 2002, Richard Freeman, an associate of MSM-dubbed “political extremist and conspiracy theorist” Lyndon LaRouche, warned in stark terms of the housing bubble and the role of Freddie Mac and Fannie Mae in blowing it up to dangerous levels. This was when the MSM, Wall Street, and the Fed were assuring us that all was well. You can see just how dead on Freeman’s warnings, and subsequent EIR analyses were, on the housing and credit bubbles.

Comment by L. Opine
2009-02-21 17:37:37

Larouche can be right some of the time, it doesn’t make him less of a complete lunatic with a paranoid delusion disorder.

Comment by Professor Bear
2009-02-21 21:06:37

I pull in resolution and begin
To doubt the equivocation of the fiend,
That lies like truth.

Shakespeare’s Macbeth

Comment by not a gator
2009-02-22 09:56:49

his organization is very abusive, too

Comment by FP
2009-02-21 17:02:41

“The effort would help borrowers — both those current and delinquent — who live in their homes lower their monthly payments for five years. The servicer would reduce interest rates so that the monthly obligation is no more than 38% of a borrower’s income and then the government would kick in money to bring payments down to 31% of the homeowner’s income.

Servicers can also reduce the loan balance to achieve these affordability levels. The government will share in the cost, up to the amount the servicer would have received if it had reduced the interest rates.

Only loans where the cost of the foreclosure would be higher than the cost of modification would qualify. Also, Treasury will not provide subsidies to reduce rates to levels below 2%.

Obama’s plan also addresses critics who say that some homeowners need extra help because they are carrying so much debt on top of their mortgages. Those with total debt — including credit cards and auto loans — equal to 55% of their monthly income must enter a debt counseling program to qualify for a modification.

In addition to providing incentives to servicers and investors, the administration will also reduce borrowers’ loan balances by up to $1,000 a year for five years if they keep up with payments.

To entice servicers to modify mortgages in the wake of continuing home price declines, the administration and the Federal Deposit Insurance Corp. have developed a $10 billion insurance fund that will pay mortgage holders additional funds based on declines in a home price index.

The Treasury Department will also develop uniform guidelines for loan modifications, as well as require all financial institutions receiving government funds to participate in the program. Also, all federal agencies that own or guarantee loans will have to apply the guidelines where appropriate.

The Obama plan calls for legal changes to allow judges to modify mortgages during bankruptcy. Judges would be allowed to reduce the loan balance, a measure the financial industry fears because it would lower the value of the mortgage.”

This is one crazy foreclosure plan.

a FB owes $400,000 but only makes $50,000 a year. Will the government “kick in money to bring payments down to 31% of the homeowner’s income”. That’s a lot of money. And I can see alot of people in this situation.

“Servicers can also reduce the loan balance to achieve these affordability levels.” This will mean lower comps for the entire neighborhood which should bring down the value of the houses in the area considerably. It will be interesting.

It might be a good idea for two income earners to quit one of the jobs. Bring down mortgage payments to a “lower” 30% on one income and later get another job after the modifications. Do I see fraud along the way?

Comment by CA renter
2009-02-21 17:20:39

“Servicers can also reduce the loan balance to achieve these affordability levels.” This will mean lower comps for the entire neighborhood which should bring down the value of the houses in the area considerably. It will be interesting.

This is one of the potential bombs, IMHO. Question is whether or not they make the information public. It should be mandated that whenever a loan has been modified, then the transaction on public records is flagged so the sale (at the high, “unaffordable” price when bought during the bubble) cannot be used as a comp in the future. Only sales that are real sales — where the buyers are fully qualified, and can really afford the amortized payments on a FRM — should be used as comps for future sales.

Comment by gal
2009-02-21 17:56:25

It really seems like In past November in United States Communist Revolution took place. Congratulation guys! I hope communism will succeed in less then 5 years and we all will receive our desired houses for free…

Comment by Professor Bear
2009-02-21 18:47:20

Oh no no — you are confusing the Wall Street Investment Bank Share the Wealth program with a communist revolution.

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Comment by Professor Bear
2009-02-21 18:45:52

But part of the Obama mortgage rescue scam plan is to prop up housing prices on a permanently unaffordable plateau. How would reporting the rescued borrowers’ true abilities to make payment help with that facet of the scam plan?

Comment by Itsabouttime
2009-02-22 00:57:53

Puh-lease. McCain ran on the same program.

On this issue, the parties speak as one–stupidly.


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Comment by are they crazy
2009-02-22 13:30:59

From the politicians to the so called experts - they’re all stuck on stupid IMHO. They are taking a unique set of combined circumstances and they’re trying to make it stop with individual “conventional wisdom” solutions. I really think it’s blinders more than maliciousness. They think they work out one part of the mess without considering the others - no one’s looking at the big picture. The whole system has come grinding to a halt and no fix for one part of the problem will fix the whole it seems. There was no hope of doing anything until everyone got on board with the idea that there are huge problems and that wasted a lot of time.

Comment by cashedin05
2009-02-21 21:35:29

Eventually those modified homes may have to be put up for sale and sold at current market value. You will still have these places going short sale, forclosure or jingle mail…Either way, the prices still continue to regress back to true median.

Comment by denquiry
2009-02-21 18:00:03

Do I see fraud along the way?
NO. NO. NO. It’s called a work around.

Comment by otis wildflower
2009-02-22 11:37:48

NO. NO. NO. It’s called a work around.

I’d rather have a reach around.. But then, I missed Vegas :/

Comment by palmetto
2009-02-21 17:15:30

Here’s some dog crap from the media. Bwahahahahaha! So much for human rights. Madame Mao speaks. For the US, no less.


Oh, what does this have to do with housing? Gee, I dunno, without human rights, nothing else matters.

The other day I made a quip about China being ripe for a Communist takeover. Now, it seems the US is ripe for a Communist takeover.

Comment by santacruzsux
2009-02-22 10:21:55

Like she could ever say a bad thing about her Chinese overlords. Go ahead and look up how Bill approved the wholesale transfer of tech to China during the 90’s. The Republicans had no problem with it either.

Clinton repeatedly put trade with China ahead of American national security. And now you know where our Secretary of State stands on the issue. She would have no problem putting you in shackles if it was good for the economy.

Comment by Bob in Vegas
2009-02-21 18:07:56

I bought a condo in Vegas in 1998 for 78K. Its value was steady until late 2003. Then I got a notice from a realtor that a unit in our complex had sold for 148K. I got a transfer out of Vegas in early 2006, and sold my condo in 2 weeks for 172K. I saw an identical unit in the complex for sale last month for 74K, 4K less than what I paid in 1998.

I’m retired now, and shopping around for a place. But I’m not buying yet. What is shocking to me is that condo prices in Vegas have dropped nearly 15% just since the beginning of January!

Make no mistake folks - this is the mother of all depressions that we are now entering.

Comment by cashedin05
2009-02-21 21:38:05

No depression. Just a long drawn out process of cleaning out the suckers until homes become affordable again.

Comment by Neil
2009-02-22 08:21:23

I still think we could avoid a depression.. except that our gubmint wants to repeat the same mistakes as before.

Interesting tidbit on the condo having a constant value, a bubble, and now is at below the prior constant value and is declining rapidly if not cliff diving.

Isn’t a great country where the government helped promote home construction for 18+ months after it should have collapsed? Gee… that won’t do anything to the resale ‘value’ of the condos under discussion… naaa…

Got Popcorn?

Comment by MidwestRob
2009-02-21 19:36:25

I’m seeing mid-1970’s prices on brick bungalows on the South side of Chicago. Sad to say the very area I was born and raised, I would not walk down many of those streets today.

Comment by JoJo
2009-02-23 07:43:31

[quote]I’m seeing mid-1970’s prices on brick bungalows on the South side of Chicago. Sad to say the very area I was born and raised, I would not walk down many of those streets today.[/quote]

Are you saying that the South Side of Chicago is the baddest part of town?

I’m in the camp that bringing housing prices down to where the average person can afford to buy without getting an ALT A or liar loan is a good thing in the long run.

Comment by DennisN
2009-02-21 19:59:15

I don’t think that a lot of “poor” Americans really realize how the present downturn affect real poor people.

“Tang Hui and his family prospered as migrant workers during China’s economic boom, earning $10,000 a year: enough to build a house, send a cousin to school and pay for his grandmother’s medical bills.

But those good days are over. The family’s cash earnings have evaporated, snatched away by a manufacturing crash cascading across China caused by falling global demand for its goods.

The nine people in the Tang family are facing an income of zero; their best hope to survive is to grow rice and raise pigs at home in the Sichuan Mountains….

In the past months, about 70,000 factories nationwide have closed. Beijing official Chen Xiwen estimates about 20 million migrant workers have lost jobs. Tens of thousands of villages in the countryside depend on migrant workers’ income. “

Comment by DennisN
2009-02-21 20:02:00

Let’s see if the link gets eaten…

www dot cnn dot com/2009/WORLD/asiapcf/02/20/china.economy.family/index.html

Comment by Neil
2009-02-22 08:25:01

What’s even scarier is that as projects wind down, another 50 million in China have precarious employment. If the US keeps sliding, some fraction of that 50 million will lose their job. Certainly, construction is going to slow in China; the road construction will not put in money as fast as a bubble building spree could.

Incomes of zero would be bad.

Got Popcorn?

Comment by robiscrazy
2009-02-21 20:03:30

More dog crap please! God, I’ve loved lurking here over the years.

Comment by Dave Barnes
2009-02-21 20:34:06

The RIGHT price for houses is approximately when the typical house costs 2.5x the typical family income.
This is the historical point where families can make the monthly payments for a long time.
Anything more and we have problems.

Comment by Professor Bear
2009-02-21 21:12:20

And problems, in turn, lead to big money for bankers, followed by bailouts for greedy bankers, accompanied by political pandering, followed by bailouts for fools who bought houses they cannot afford, accompanied by more political pandering, followed by a massive power grab by the Fed. Ain’t our banking system a prettiful thing to behold?

Comment by Professor Bear
2009-02-21 21:04:03

Sorry if this is a repost (I think I already posted it once, in fact). I suppose I am just overly fond of the idea that we are being collectively forced as a nation, against our collective will, to bail out fools.

This time, we have to bail out idiots
By David Brooks
2:00 a.m. February 21, 2009

Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice – people get what they deserve as much as possible.

Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations are compensating foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.

The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.

These injustices are stoking anger across the country, lustily expressed by Rick Santelli on CNBC Thursday morning. “The government is promoting bad behavior!” Santelli cried as Chicago traders cheered him on. “The president . . . should put up a Web site . . . to have people vote . . . to see if they want to subsidize losers’ mortgages.”

Comment by reuven
2009-02-22 03:27:58

I read this and was astonished at his conclusion. Even though he argues, we are subsidizing bad behavior, and responsible Americans will bail out their deadbeat neighbors, Brooks says it’s the correct thing to do.

Meh. I don’t need to hear him justify stealing money from hardworking Americans for the good of “America”

Comment by Professor Bear
2009-02-21 21:37:23

Kudos to the North County Times for reporting it like it is again and again — no MSM dog crap from them.

These quotes from Thornberg and Hamilton are music to my eyes. The Obama mortage rescue scam plan contains little to slow the ongoing crash of North County home prices.

HOUSING: Bailout will have muted effect locally, analysts say
Obama’s conditions leave many homeowners behind in North County
By ZACH FOX - Staff Writer | Saturday, February 21, 2009 5:31 PM PST ∞

Analysts said last week that North County homeowners can expect little relief from President Obama’s $275 billion housing bailout, based on details the White House made public last week.

Zillow, a real estate research company based in Seattle, reported this week that 34 percent of all San Diego County mortgages have lost too much value to qualify for the program —- more than double the national average.

Also, there are probably far fewer Fannie Mae and Freddie Mac homeowners in San Diego County than the national average. The government-sponsored agencies traditionally only backed mortgages for $417,000 or less.

From 2004 through 2007, the median home price in North County was more than $500,000. Meanwhile, there was a surge of lenders who required little or no down payment. The combination makes it likely that relatively few homes ended up with loans held by Fannie Mae or Freddie Mac.

While there is no information available on how many mortgages were backed by the government agencies at the county level, Freddie Mac’s share of loans on the national level was almost 26 percent greater than in California in 2007, according to data from Freddie Mac and the Census Bureau.

The portion of homeowners who may benefit from the second and third portions of Obama’s bailout package remains unknown.

But whatever happens, several local analysts said the bailout will do little to fix the housing market.

“They want to look like they’re doing something, but frankly there isn’t much they can do,” said Christopher Thornberg, an economist with Beacon Economics in Los Angeles who covers the Southern California housing market. “Too many people are too far under water.”

Thornberg said he expects home prices to fall 25 to 30 percent from current levels.

And Steward, the San Marcos real estate agent, said she isn’t hopeful about the loan modification process after completing several. She said the programs simply kick the foreclosure problem down the road a few years.

“They’ve set homeowners up so that five years from now, they’re going to be in worse shape than they’ve ever been,” she said.

Economics professor James Hamilton agreed with Thornberg that the housing problem is too big for Obama’s solution. Further, the UC San Diego professor said if the bailouts go too far, it might make the problem worse by encouraging foreclosure.

“Does everyone presume once they have negative equity, it’s time to ditch their obligation and once they’re there, they’re entitled to assistance from taxpayers?” Hamilton said. “If we get to the point where everyone is thinking that way, it’s way too big a problem for the government to solve.”

Comment by reuven
2009-02-21 22:30:33

A part of me wants to believe that Obama actually devise a program that would sound generous, but in reality few will qualify for, because he too realizes that the faster prices decline to historical norms, the better.

Sadly, I don’t think he’s motivated by this, and the rules are so vague that only scamsters will take full advantage, causing another little wave of fraud, and will only serve to prolong the pain.

Comment by kirisdad
2009-02-22 08:45:41

The best thing Obama can do is to ammend the IRS forgiven debt bill that Bush signed. The intent was to help foreclosed victims of the HB, but is now allowing people, that can afford their mortgage, to walk away. An oversight provision, into affordability, would decrease forclosures and add fairness.

Comment by Professor Bear
2009-02-22 09:10:27

Could the Obamanites change the IRS debt forgiveness rule without warning? Because if they announced the plan in advance, the rush to the exits before the law changed could turn into a stampede.

P.S. We had quite a few discussions at the time it went into effect about the likelihood this debt forgiveness rule would stimulate a large increase in walkaways.

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Comment by santacruzsux
2009-02-22 10:25:09

Does anyone even think any part of this plan came out of Obama’s brain? I bet this guy has never even balanced a checkbook on his own.

Comment by Professor Bear
2009-02-22 11:43:59

No. I think it is an amalgam of ideas out of Geithner’s, Summer’s, Bernanke’s, Volcker’s, Goolsby’s, Greenspan’s, (etc etc etc) brains.

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Comment by Professor Bear
2009-02-21 22:50:56

The rich are different than you and me. They have more money to lose. LAInvestorGrl, care to offer comment?

updated 2 hours, 17 minutes ago
9021-Ouch: Recession trickling up to Beverly Hills

LOS ANGELES, California (CNN) — The Lamborghinis and Bentleys still cruise Rodeo Drive in Beverly Hills.

Beverly Hills officials say they expect tax revenues to drop by about $24 million over the next 16 months.

But these days, visitors to California’s most famous ZIP code are more likely to take note of the empty storefronts and deep-discount signs.

Call it recession, 90210 style.

Fewer sales have meant fewer tax dollars even for this well-funded city.

City officials say they expect tax revenues to drop by about $24 million over the next 16 months. They say, as far as they know, that’s the biggest single blow to the city budget in Beverly Hill’s 93-year history. Budget cuts being considered to cover the shortfall include reducing police overtime.

Extreme wealth often cushions cities, just like it does individuals, during recessions. But Beverly Hills business owners say they’re feeling the impact this time.

Comment by combotechie
2009-02-22 06:11:42

Naked swimming = no shopping.

Comment by palmetto
2009-02-22 06:33:54

” But Beverly Hills business owners say they’re feeling the impact this time.”

You mean people are not buying “lugzhurry” goods as much? Hey, Hollywood is hurting, too. I think there is a SAG strike in the works, plus “globalization” has affected the industry as well. On the other hand, the entertainment biz was corporatized as well, and as a result, a lot of the product is really crappy. I’ve gone to my local video store to rent their five videos for five bucks special and have to spend a lot of time looking at the racks for movies I’d even want to bother with. Of course, there a probably some sleepers in the lot I’ve never heard of that might be quite good, but how do you know? Most of it kind of sucks.

Corporatization, globalization, idiotization.

Comment by Professor Bear
2009-02-22 08:23:17

When you say you are anti-globalization, what exactly do you mean? Do you suggest the United States should close its borders and go back to autarky? Surely you realize this would amount to taking a collective vow of poverty? Or do you believe that nations which eschew trade make themselves wealthier by making sure all production and consumption happens within their own borders?


Comment by Survival Instincts
2009-02-22 07:57:08

The other night there was a program about Hollywood and how they were being slammed because the “dumb money” had left the room. Apparently, the hedge funds have been throwing money at Hollywood and now it has stopped. Hence, all the bad movies you are finding in the bins.
And speaking of movies, Oceans 13 had a special feature that basically said Las Vegas will go on forever. I believe it was filmed in ‘05 It was really disgusting and I found myself watching it a second time because I could believe I was hearing all the blather. They were talking about all the tricks they use to trap you in their fantasy land. The amazing thing was their prime age groups were 20-30yr olds. I’m betting these are the kids whose parents Heloc’d their houses or were the subprime sellers.

Comment by GH
2009-02-22 08:03:32

It is clear Obamas plan is all about protecting the value of banking assets (They own the homes not the borrowers) by attempting to prop up prices. This is not about helping people but helping banks. I am hearing rumbles that Citi and BOFA will be taken over soon, so I suppose the govt is trying to protect it’s own value in a real sense, since it has basically siezed a large share of our nations banks.

I cannot help but wonder if there was not a more complex design to all this, since the outcome was clear to anyone who could do basic math several years ago. Hence this blog and others. During the boom, a large percentage of the worlds cash flowed into the US. That cash is not leaving in a big hurry or has evaporated?

Comment by Professor Bear
2009-02-22 08:58:52

“That cash is not leaving in a big hurry or has evaporated?”

I have an up-to-the-minute response to your question here:

Clinton: China Must Continue to Invest in U.S. Bonds
Secretary of State Tells Chinese ‘We Are Truly Going to Rise or Fall Together’
By Glenn Kessler
Washington Post Staff Writer
Sunday, February 22, 2009; 8:47 AM

BEIJING, Feb. 22 — Secretary of State Hillary Rodham Clinton on Sunday urged China to keep investing its substantial foreign-exchange reserves in U.S. Treasury securities, arguing “we are truly going to rise or fall together.”

China is the biggest foreign holder of U.S. debt, which helped finance the spending binge the United States went on before the current economic crisis. Some experts have expressed concern that China’s substantial holding of U.S. debt gives it increased leverage in dealings with Washington because any halt in Chinese purchases would make it more difficult to finance the government bailout and stimulus packages.

Comment by GH
2009-02-22 15:02:23

The chinese need to figure out how to tap their own people for demand. Not going to work without a lot of cultural changes on their end and a lot of wage increases. Wait.. 20 million just got laid off because we can no longer buy their stuff because they drove down wages here and now we have exhausted out credit cards…

Comment by Professor Bear
2009-02-22 08:59:58

The U.S. is the Chinese bankers’ Donald Trump.

Comment by Professor Bear
2009-02-22 09:03:23

From the WaPo article (not sure it will post):

“The Chinese are recognizing our interconnection,” Clinton added. “We are truly going to rise or fall together. By continuing to support American Treasury instruments, the Chinese are recognizing” that interconnection.

At a joint news conference with Clinton on Saturday, Foreign Minister Yang Jiechi sidestepped a question about whether China was looking for alternative investments for its foreign exchange reserves. He said China looks for safety, good value and liquidity for its investments.

Treasury bonds are “a good investment [and] a safe investment,” Clinton told the interviewer Sunday.

Comment by Little Al
2009-02-22 08:05:01

It’s Sunday morning and none of the gory details of the housing blogger convention has hit the lusty light of cyberspace. We wait with baited breath and aching heads. Comeon how many shotgun Elvis weddings occured last night with Queen Elton as best man?

Comment by Professor Bear
2009-02-22 08:44:55

Is there a precedent for the U.S. gubmint trying to stop a housing price crash in progress? If yes, how did it pan out? If no, how likely is this one to work, given that home prices in many places (e.g. San Diego) remain well out of reach of local incomes, and the amount of price declines that have already occurred make the rational decision for many FBs to walk away and drop off the keys?

The comments served up in the dog-crap-serving MSM all reflect a presumption that big brother’s newfangled plan to prop up prices and bail out millions will succeed wildly compared to the failed plans rolled out on Bush’s tenure, but I am highly skeptical.

Rescue plan for homeowners strikes a nerve
Bailout backlash hits as aid targets individuals
By Stevenson Jacobs and Alan Zibel
2:00 a.m. February 22, 2009

A Boulder County sheriff’s deputy posted a no-trespassing sign on a home in Longmont, Colo., that was foreclosed this month. Some pundits have attacked Obama’s plan to aid homeowners. (John Moore / Getty Images)

Banks were bailed out. So were automakers. So why not struggling homeowners?

The question has struck a raw nerve across the country, with critics saying the Obama administration’s latest housing rescue rewards people who bought homes they couldn’t afford. Others counter that the taxpayer-financed plan will slow spiraling home prices and avert a deeper economic disaster.

The debate captures the strong emotions stirred up over who benefits as the government tries to fix the financial crisis. It’s likely to remain on the front burner for months as lawmakers consider other contentious issues – such as whether bankruptcy judges should be given the power to impose changes on borrowers’ home loans.

“I feel like I’m doing the right thing paying my mortgage, and now apparently I have to pay my neighbor’s mortgage, too. People are really angry,” said Kim Sansom Guymon, a stay-at-home mom who bought a three-bedroom home with her husband in suburban Seattle in 2001 and has watched it drop $150,000 in value since last summer.

Rescuing “underwater” homeowners doesn’t sit well with Robert Bechler, either. Still, the 37-year-old flooring contractor said he sees little choice.

“If they don’t bail those people out, it’s just going to get worse. It’s a necessary evil, I suppose,” said Bechler, who with his fiancee just bought a house in Cape Coral, Fla. for $92,000 after waiting years for prices to fall.

The rescue plan unveiled Wednesday by President Barack Obama offers $75 billion in incentives for banks and investors to reduce struggling home borrowers’ interest rates and make other changes to loan terms. The money will come from the second half of the $700 billion federal financial bailout. The goal is to keep 4 million homeowners out of foreclosure and halt free-falling home prices.

Comment by Professor Bear
2009-02-22 09:01:56

Financial-literacy classes failing to school Americans adequately
By Greg Burns
2:00 a.m. February 22, 2009

With so many personal-finance decisions turning into disasters, a chorus of voices is singing the praises of financial-literacy education.

Make every American a financial whiz, the thinking goes, and credit bubbles never will bedevil us again.

Trouble is, growing evidence suggests that financial-literacy courses don’t work. Worse, they may actually hurt, in part by making their graduates overconfident about limited skills.

Few want to hear that message, said Lauren Willis, a professor at Loyola Law School in Los Angeles, whose recent paper, “Against Financial Literacy Education,” shook up all sorts of vested interests.

“I get hate mail,” Willis said. “People believe in financial-literacy education. It’s like a religion. It’s like apple pie. They’re not interested in knowing the truth.”

Comment by not a gator
2009-02-22 09:12:14

Whoa, Ben, rather combative title this morning, eh?

Not that I disagree or anything… we don’t call it gerbil cage liner for nothing.

Aldous Huxley was wrong… soma doesn’t come in a pill … it comes over the airwaves.

Sheeple get shorn.

Comment by not a gator
2009-02-22 09:41:04

‘Holy cow, it’s a mess.’ Half the homes are priced under $155,000.’”

This guy deserves to be taken out and shot. No, really.

Psst: median household income is around $50K. Or less. And 3x income is a max; for prosperity, 1.5-2x income is best. So homes should be HALF of that. SUCK ON THAT, BIG BOY.

Comment by Professor Bear
2009-02-22 11:59:52

It’s a day late, but this REIC propaganda piece seems to belong in the MSM dog crap thread…

Southern California home prices fall, affordability returns to normal

A home for sale in Altadena. As values slide, Southern California may be at the start of a long period of relatively affordable housing.
January’s median sales price falls 40% from a year earlier, to $250,000. As the Southland’s bubble continues to deflate, the ratio of price to income has returned to historical levels, analysts say.

By Peter Y. Hong
February 20, 2009

Southern California — with home prices now at 2002 levels and falling — is at the start of what is likely to be a long period of relatively affordable housing, economists and housing market analysts say.

Home prices are now below their historical average compared with incomes, putting them within reach of more people than they have been since about 2000, several studies show.

(Better than Foreclosures, HUD Homes Buy with $0 Down and Bad Credit.)

But that doesn’t mean prices will stop falling soon, especially if jobs continue to vanish at their current pace.

After soaring during this decade’s housing bubble, home prices recently fell back in line with what people earn — and then kept falling.

Comment by banana republic
2009-02-22 13:06:01

When they were affordable before we weren’t in the midst of a great depression. It is different this time.

Comment by Professor Bear
2009-02-22 13:35:22

Actually they weren’t affordable before, unless you are talking 1998 or earlier. Some people in SD were clued in to overvalued home prices as early as 2000, and we are only back to 2003 levels so far (on a price per square foot basis, at least).

Comment by banana republic
2009-02-22 13:04:12

I think the title of this topic misses the mark. The MSM isn’t “currently” feeding us dog crap. They have been doing it for much longer than that.

In fact, IMO they are nothing but liars. The most untrustworthy group in the country. Where were these people in the run-up to Iraq? It isn’t like everyone was positive about it. They made sure the negative voices were silenced.

Treason any way you look at it.

Look at the job they did when this housing bubble was growing? Horrible. Look at the crap job they did attacking Hillary and Bill Clinton. They are shameless. Gave Bush a free pass. If 1/10th of this crap had been done when Clinton was president he would have been impeached. Oh wait, he was…for lying about a BJ.

So please don’t say the MSM is doing a crap job now. It is a blanket statement. The MSM and news media in general are COMPLETE CRAP.

And look at where we are now! I blame them.

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