Bits Bucket For April 5, 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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Fust?
hmmm…. maybe
foiled again . . .
Lol.
Nothing could be finer than…..a hot cup of coffee
and a bright spring morning.
I distrust Oregonians when they claim fair weather.
Clear blue sky and calm here in Boise. Sausage and eggs coming up.
Here it’s a “Swedish” breakfast….
Raw fish on toast?
On the subject of breakfast
Where you been, lavi? Nice to see you. Even if you ARE eating bacon and oatmeal. That’s craziness! Now, bacon and grits—that’s delicious.
Where you been, lavi?
I actually got myself laid off which made schadenfruedensurfin’ a bit less enjoyable.
I am not, however a victim of the E-Con-O-Me, but a political casualty of the reduction of funding from the sekrit project I was working on for the gummint.
However, I have a week off and a job lined up for the Monday after that, and so I can once again enjoy the “thank-god-I-didn’t” stories.
(I love honey, butter and just a touch of salt in my grits. I’ve never tried bacon because that means I’d first have to learn how to cook a grit)
“schadenfruedensurfin’”
that deserves a trademark
Ohhhh! *delighted gasp! *
Lavi! I just somehow knowed you was one of them sekrit gummint people, yes, the minute I saw your picture on the HBB Las Vegas photo log that SDREbear posted!
I said to myself, I said: “Lavi d. looks just like I imagined he would, except where’s his matador cape and the rose clenched in his teeth? And also the sekrit gummint lab coat.”
Well I have good news for you - clear blue skies to the west of you in the Tri Cities!
Havwe a great day!
Nice up here near Spokane too; I took my Serotta Legend out for a 24-miler yesterday, and will do so again this morning. High temp yesterday was 59-degrees, and mostly sunny!
Nice? Partly sunny? 59 degrees?
I don’t think we made it down to 59 last night. Yesterday we made it up to 80. In a few minutes I am going golfing. Yes it is a dirty job but somebody must live in this wasteland known as Maui.
Hi, Rancher!
I had french toast with lumberjack syrup. I know it was lumberjack syrup, because it said so right on the bottle.
Coffee is hissing into the cup right this minute! Because I was so good and undustrious yesterday I shall reward myself with a giant squirt of whipped cream on it.
I meant ‘industrious’.
I’m back with my coffee, and I’m floating a giant Wilkins Ice Shelf sized heap of whipped cream on it, with a little Shackleton explorer hut emerging from the side in the form of a silver spoon, and there’s a tiny plastic orange monkey perched boldly on the top whipped peak, with an air of majesty and exploriness. Wait, was Shackleton the north pole or the south pole doomed explorer guy? Oh, who can remember, and anyway, you all know what I mean.
Anyway, I have titled this delicious breakfast drink the ‘Wilkins Ice Shelf Doom Delight’.
The coffee is from the Grotlet, on sale. It was some bizarro brand, which is why it ended up in the Grotlet on sale, but it’s tasty and I wish I had bought more bags.
I don’t always have to earn sweet whipped cream goodness with serious garden labors. Sometimes I say aloud: ‘Hey, I just picked up that marble.’ and then I run to the fridge and grab out the whipped cream can and just sort of suckle on it until there’s nothing left but nitrous in there.
Good times.
(slurp) Hey, now THIS here is a super-tasty ‘Wilkins Ice Shelf Doom Delight’!
…and shorly afterwards, Olygal appears appalled and suprised when her kayak doesn’t fit
Nope. *makes hand gesture indicating loftiness *
I’m on the ADD diet plan. I heartily recommend it for all those who enjoy suckling whipped cream cans and mainlining pie and ribeyes. Plus you don’t have to waste so much time doing that one thingie, you know the one, where you lay down and shut your eyes and hold still for a long time?
Oh, yeah—sleep. That’s a waste of valuable time, there.
Thx for the explaination Oly. I was sort of wondering what sort of rocket fuel diet managed to keep you going 0 to 60 mph 24/7.
Yar. And it’s just natchrell. I don’t have to pay anything for it or even read ‘Oprah’s Weight Loss Secrets’!
*reaches up and pats top of fluffy ADD head in a congratulatory sort of way *
‘Course, one day I’ll probably be in the middle of what I like to call a ‘hummingbird on meth’ ADD episode and will suddenly self-combust/explode in a dramatic shower of pink sparks…
*stops patting top of fluffy ADD head quickly, in case I precipitate that dramatic event right here and now *
Shackleton and his men survived. Great true story
Really? He’s one who made it? Well, then—the spoon has to be someone else’s hut. I ain’t having my spoon represent the hut of a non-doomed person and/or expedition.
That’s one of my breakfast rules.
I got Nalley’s Lumberjack syrup too. WinCo had it on sale last week. . . $1.98 for the 36 oz size.
Bright blue skies, no fog in sight, expected temperature low 70s inland, 60s at the coast.
Sitting at my computer, drinking a cup of coffee. Soon to head out to the beach (15 minutes by car from where I live) for my daily walk. Life is good, no life is great.
Fun! Do you find beach glass? I like beach glass.
I love beach glass also. Unfortunately not where I go.
Did you guys catch this NY Times op-ed by Joseph Stiglitz?
http://www.nytimes.com/2009/04/01/opinion/01stiglitz.html
I thought it did a rather wonderful job of explaining (with minimal math) exactly why the “subsidize the hedge funds” bailout will entirely misprice the toxic assets, thereby giving a non-transparent handout to the banks and screw over the taxpayers.
Very, very well done.
Also are there not just too many of these bad assets out there? I have read that we are talking trillions of dollars and if that is the case this plan will only get a small percentage of the job done.
When one industry ties up a huge proportion of free capital, they become too big to fail. If Madoff wasn’t such a drop in the bucket compared to the more legal-like corporate Ponzi schemes out there, he would have been TBTF too.
How Summers gets more traction than Stiglitz I’ll never know. I can’t take any gov’t reform efforts seriously until Larry the Lech is out of the picture completely.
oops, I mean Leech…no proof he’s a lech to my knowledge.
From Milwaukee JS online Business
Breaking credit covenants has price
Companies often see cost of servicing debt increase.
“…Across much of industrial America, and in many other sectors as well, there’s a new obsession with debt covenants - the rules about financial ratios and other requirements borrowers must follow that are laid out in their credit agreements.
A slip-up technically puts lenders in charge of the company, which can mean something as serious as a trip to bankruptcy court. In reality, the remedies are usually less dramatic, but costly. And some say the problem has yet to peak among U.S. companies”
Among the examples of WI companies in article…
MGIC Investment Corp , the nation’s largest mortgage insurer, didn’t break any debt covenants. But the Milwaukee company said last month it would defer by a decade an interest payment on convertible debt that had been due this month. Ratings agencies subsequently cut MGIC’s debt rating to below investment grade - or “junk.”
http://www.jsonline.com/business/42455132.html
From the moment I sawthe plan it was clear to me it was just using FDIC to do TARP III.
The banks sell each other their worst of the worst using FDIC bonds. They then default and FDIC eats the loss.
Of course, FDIC doesn’t actually have the money, so will have to borrow it from Treasury.
TARPIII. Money flows from treasury to banks. Privatize the gains and socialize the losses.
I’m so glad we elected Obama and are getting some real change……
Better than Change; Acceleration!
What do you think would be the case if McCain had been elected? I doubt it would be much different.
No matter, the Wall Street looters are in the Congress and the Treasury. I can’t see that it would be much different. It isn’t different now than it was under Bush. I can’t think of any original Obama agenda that has been pushed, Congress is pushing and they are the exact same players. Things are picking up speed though!
Unfortunately the voters have no one to blame but themselves.
Last I recall there were only two choices and the sentiment above is that it wouldn’t make a difference in regard to the banks.
Maybe I’m wrong but I get the impression that the “plan” is to - as quickly as possible - get consumers back to some of the boom mentality. That might be the best plan, the problem(s) being so big. Whats the alternative? People are already very nervous and worried.
The discussion should begin and end on this one point:
Who out there thinks the consumer economy they witnessed between c. 1981-2007 was sustainable?
Come on, I’d love to hear a trees can grow to the sky argument as to how it’s possible for almighty government to override the forces of the market and nature.
I think they are desperate to create a new bubble. For the last 60 years, the way out of an economic slump has been to ease lending standards, lower rates, and flood money into the market where it creates a bubble.
It isn’t working this time bacause the credit standards were so impossibly loose that they can’t be loosened further, and in fact, are being tightened significantly. Seriously, where do you go from “No income, no assets, no job” loans against hyper-inflated appraisals?
What they need to do is find a way to sweep $5+ trillion (I think it will eventually be over $10T) in real losses underthe rug so we can get credit flowing and ignight a new bubble…. in something, anything.
It will take some wholesale debt foregiveness to pull that off.
RE: I think they are desperate to create a new bubble.
Without a doubt.
That’s exactly what high 4% mortgage interest rates are all about, ’cause the residential ATM is the only game in town.
From everything I’m reading, banks are now being flooded with re-fi requests. But because of massive cut-backs they don’t have the staffing to take care of the mob, lol.
And appraiser’s are being pounded to dust with stagnant fees and bad data resulting in constant re-do’s for appraisal management firms who dole out the work to those who will do it the quickest and cheapest.
Losta “CHANGE” here.
I’ll keep harping on my point
They need to do something right NOW from the bottom up……
Most logical is to wake up tomorrow and find i have $1000 more to spend on my credit cards…..most people have things they need asap, that we have been putting off to do. The engine light on my car is on probably just an oxygen sensor but its $300 i can’t afford it today…so lately i’ve been driving only about 25 miles a week.
so lately i’ve been driving only about 25 miles a week.
Really? That’s amazing. I drive about 25 miles a minute.
So, I guess by the time you’re back from the store with a gallon of milk it’s all spoiled by then, and you have to just put it down and sadly turn right back around and head out the door again for a new gallon of milk?
LOL oly gal, when you find the magic carpet to whisk you to the big apple, all of us here would relish (no not that kind) in your presence, and will give you the pink carpet treatment.
Take you to all the dainty high falutin places and finish it up with some pabst blue ribbon at the local heavy metal biker bar down the street….ok?
Take you to all the dainty high falutin places and finish it up with some pabst blue ribbon at the local heavy metal biker bar down the street….ok?
Okay! Long as it comes with some good zydeco!
They tried this with the stimulus last summer. Hand out $300-600 per person. Most people used it to pay down debt or saved it. That just made the problem worse.
The banks need every penny of interest they can get from borrows that still can pay, to cover the losses on those that can’t pay.
Handing money to Main Sreet, allows them to pay down debt, cutting the revenue flow to the big banks and limiting their ability to generate operating profits needed to cover balance sheet losses.
Datrll:
I didn’ get a refund because i didn’t have any income on the books to claim…whereas $1000-$2000 credit card pay down could be spent asap , it could also be coupled with a 90 day ban on any cash advances to prevent people from taking the money then declare BK.
dj,
If a $1000 cash advance on your credit card would push one to BK, one is alraedy screwed.
If one goes to BK court and hasn’t filed taxes for some time, I imagine one would be double tripple screwed.
I do not understand why you would take this check you imagine and use it to pay down the CCD so that you could immediately take a cash advance on the CCD!
My daughter says that if the govt gave $500 to teenagers, it would get back into the economy in no time!
My daughter says that if the govt gave $500 to teenagers, it would get back into the economy in no time!
Awsome let’s elect her president. We can broaden it out and give it to the homeless and people with bipolar disorder (provided they stop their meds). Real estate agents, and anyone with a record of purchasing a new highpriced car every 2 years over the last decade.
Actually I’m certain the next phase will be large rebates for trading in old cars, and limited life gift certificates in place of your tax return.
Go get your code pulled. Many auto parts stores will do this for free.
I’d loan you my scanner if you lived nearby.
Thanks, I think its 129 I have 2 senors had one replaced a year ago…
I agree polly ,really good article and it sums it up so well .
Nothing but tricky tricky tranfer of loss to different bagholders , being the future taxpayers . I knew that was their game from the first bail-out and I posted this view repeatedly . The fact that they didn’t clean up the corrupt system and avoided Justice and the current standing law was a real red flag for me that the
solutions would be just as corrupt as the original financial crimes of the GREED MACHINE .
The moral hazard of the road the Powers took ,and are still sticking to ,is so alarming to me . The government assistance plans just stomp on the Constitution and any sense of fair play .
A power who gets to choose who the winners and losers will be
is a Power that has trumped the law ,while using the guise of emergency to pull it off . People can think of a million better and cheaper ways in which the de-leveraging could of been done ,but that does not matter to this group of problem solvers
who think that the American people won’t know what hit them .
Nobody is saying that bail outs would not of been required as the
de-leveraging took place ,but corrupt systems would of been exposed and would of crashed as they deserved to crash and burn.
A purging was warranted ,along with some jail sentences ,but the Powers don’t want to give up their corrupt systems ,or even regulated them for that matter if they can avoid it . The Powers want the Global systems that pad the pockets of the World wide
Corporate World of big business and investment class elite ..What ever happened to Government by the People and for the People .
…screw over the taxpayers.
Huh? How is such a thing possible? Are not the taxpayers also the voters? Did I misunderstand something in Civics class?
1) A lot of the taxpayers that will have to pay for this can’t vote yet
2) This is not one of the plans that Congress has to set up. It is being done by Treasury. Not sure where the money is coming from - point above about there not being enough money to actually implement it is a good one.
Yes you did miss the most important part in civics class. You missed the part about rigged elections and choices between dumb and dumber or Tweedle Dee and Tweedle Dumb.
You also missed the part of the peoples’ votes being out right nullified because it wasn’t the result the PTB wanted and governments ignoring their own rules and punishing the whistle blowers.
Shall I continue?
Not trying to sound harsh, just pointing out how broken the system really is.
Post delay.
I think that a fine Sunday morning like this is a good day to ruminate on what is the next big name retailer to go under. I nominate Borders. Seems to me that their business model is shaking badly. Their coupon e-mails seem much more desparate and they are pushing their online program to get discounts from “partners” a lot more than they used to. When a store that sells actuall stuff looks like it is becoming entirely dependent on selling the names of its customers, I think they are in trouble.
Polly-
Borders has become a well stocked public library for people like me. Once upper middle class, I use to buy books every other week. Not anymore. Borders or Barnes was looking for a buyer, iirc.
They were looking for a buyer, and didn’t get one. That should have been the nail in the coffin for them, but they’ve managed to hang on.
Frankly, I thought their new “back to books” theme or whatever it is was just to cover the final spiral down to BK.
I’m going to guess Outback Steakhouse, Chili’s and maybe TGIFridays.
The Outback serves good food, spendy for sure, but good.
Outback uses, in my opinion, WAY too much salt. You can’t taste the beef under all the “rub”. No thanks.
The few times I was in an Outback I always thought it to be expensive. So I do not even go there anymore. Now I get an excellent porterhouse from the local butcher and cook on my grill for way cheaper.
Stopped going to Outback after the steak was too dry. My sister’s boyfriend had to send his steak back three times because they did not do it right. But I suspect the poor service is a regional thing. Bunch of spoiled kids working in that neighborhood of Ahwatukee…
As my kids say “…take this outhouse steak back…”
The one around is similar to too many chinese restaurants. It tastes good while you are eating, but after waking up in the middle of the night in pain a few times you decide to never go back.
There was an article in the NYT sometime this week about chain restaurants in trouble, and they placed Outback near the top of the list.
High debt ratio, aggressive overexpansion, somewhat higher price point than many competitors — Outback’s parent company has a number of issues to deal with simultaneously.
Ah, here’s the link to the article I was talking about:
http://www.nytimes.com/2009/04/04/business/04restaurant.html
Applebees way before any of those. Check out how much debt to free cash flow they have. Companies with little debt will survive. Others will not
Although a lot of items are poor candidates for etailers, books and DVDs aren’t two of them. Both are high-value and easy to ship. The B&M bookstores really can’t compete in either price or selection. Amazon has really made an end-run on used bookstores too with its partnership arrangement. I can order out-of-print books cheap that way. Last week I ordered a new/used book via an Amazon partner for $4. When it arrived from the used bookstore a price of $12 was penciled in on the flyleaf. I guess they would rather make a sure sale at $4 than hope some guy walked in the door to pay $12.
And of course they get hit in the other direction too - by the library. When you lose a job, you have more time than money so the library becomes suddenly attractive.
The library here is a poor choice unless you want best sellers or books on the schools reading list. I rarley find anything worth reading there.
The wife is a librarian in a city downbeach from Atlantic City, and lately it seems some libraries have sought to mitigate their homeless patrons problems by cutting back on the PC terminals available to the public. So, many of the homeless have gravitated down to where the wife works. On Friday, one older woman approached the circulation desk with a complaint she wanted the staff to address immediately: She claimed one of the homeless men was breaking wind excessively and was doing so purposely. So what’s the staff to do? Can’t discriminate against the gastrically challenged, can you?
I know a lot of people in the library game (including my sweetie), but mostly in academic libraries.
While commiserating with their public library brethren, the attitude seems to be, “Thank God I don’t have to take on the role of cop and social worker in addition to my normal job duties.” It’s a lot rougher gig than most librarians are prepared for …
Depending on your library system, they can often arrange an inter-library loan from another branch or even a partner library nearby.
Had a librarian friend that worked at the main Queens NY library branch - they had tons of problems with loiterers as the poorest of the poor would hang out here to keep warm, etc.
I know a lot of people in the library game (including my sweetie), but mostly in academic libraries.
Hey, that reminds me. ET, how about you show us more photos of yer little mini-ET. That was a cute child.
If Muggy wasn’t hiding in a hall closet chewing on the winter coats and weeping, I’d ask him to do the same.
The Boise State U. library gives lending cards to locals (i.e. taxpayers) so long as they already possess a library card for the city public library. It’s not the UC Berkeley library but it still has a large collection of solid non-fiction books. IIRC public universities in California don’t do this.
wolfgirl,
Have you ever asked the library to order a book that you want to read.
Where I live if they don’t have the book I want to read at my branch, they will get it from another branch.
Yeah, as an avid reader and hobbyist B&M stores are dead to me. With a click of the mouse I can get used books from Britain or electric motor brushes from Japan. Why pay a middleman to select what you can and cannot buy?
Amazon has really made an end-run on used bookstores too with its partnership arrangement.
Those are their partners! The forward thinking ones can really cut costs and expand their market by partnering with Amazon. I wouldn’t be surprised if some of them closed up their brick and mortar store to focus exclusively on the internet orders.
Brian, a couple of used bookstores that I patronized over my years in Chicago have gone internet and book fairs only. Much lower costs operating out of your basement or garage.
I buy almost all of my books used thru either ebay or Amazon’s used book seller partners. Even with shipping, they’re still pretty cheap. The only place that I ever buy any book new is the airport, for some reason. It’s sort of a tradition that I buy a book for one leg of any flights I’m on. That’ll probably change soon, since I’m so frugal in other ways. At the moment, I’m replacing books that I enjoyed in my childhood and adolescence, as soon as I can remember their titles. I’m still trying to remember the name of one about a boy named Rustry and his faithful border collie that fought off a wolf. ( Yes, this is true ! Not much adventure in my hometown, so I developed a love of the “yarn”. )
Yeah, Borders has been bombarding me with coupon email offers and surveys too. The survey questions always seem to ask about their performance compared to Amazon, which I’m assuming is their main threat at this point.
Does anyone have an electronic substription to the New Yorker? I ask because my sister called me two days ago, saying there is an article in this week’s New Yorker which states only 10% of the house foreclosures in CA (current and future) have made it out the other end so far. I was taken aback and did not think that could be true. So I went to the web. Guess what? This IS JUST THE BEGINNING. Ben has years of work ahead of him (so order yourself a T-shirt, or just send him $50)
I found a research paper by Ranni Issac with the California Reseach Bureau. Go here to see it.
http://www.library.ca.gov/crb/index.html
Basically, in 2008 there were 240,000 foreclosures in California. Certainly, many of them have not reached the market yet or at least sold (an been absorbed). Coming soon in 2009: 260,000 FCs. In 2010: 220,000 and 2011: 185,000. This totals 905,000 FCs over the whole 4 years. If we assume half of the 2008 FCs have cleared and sold, that is 120,000 out of a potential of 905,000. That is only 13%, so the NYer seems to be correct.
This is going to get a lot uglier. The pain is just starting. I remember when the market turned in 1990. Each year people said the next year would be better, but it got worse for 5 more years, until it bottomed in 1995 and then stayed on the bottom thru 1997. And this bubble is worse in all regards.
Here is a better more direct link
http://www.library.ca.gov/crb/09/Foreclosures09Q1BrieflyStated.pdf
I can’t find this paper when I searched for it. Please provide more information or a better link.
Roidy
Ty,
Roidy
Roidy, here is a better link:
http://forecast.pacific.edu/powerpoint/Rani-Isaac_CRB-Housing-0309.pdf
Look at page 6 and you will realize less than 15% of the foreclosures have made it all the way thru the pipeline. We will soon be doing the real estate limbo…..how low can you go?
Jingle
For my neighborhood, Zillow is officially completely useless.
It says my house is worth $170K. What a joke. They do not use ANY distressed sales. Zillow shows one comp sale this year at $95 per sqft.
There were actually more than 23 transactions in my zip code the first 6 weeks of the year… SOME of those have to be comps.
Check out some of these…..
14038 N 48TH AVE
GLENDALE, AZ 85306
02/19/2009 MCFADDEN, BRETT $34,000
03/28/2006 $195,000
09/09/2003 $106,500
5209 W ACAPULCO LN
GLENDALE, AZ 85306
02/19/2009 RADOVIC, JONATHAN A $77,500
06/11/2004 $122,500
6112 W NANCY RD
GLENDALE, AZ 85306
02/19/2009 AYRES, JASON $79,900
09/02/2005 $214,000
08/20/2004 $135,000
04/19/2004 $105,000
5745 W BECK LN
GLENDALE, AZ 85306
02/19/2009 FREIMARK, DARLENE $94,000
03/19/2001 $107,500
5230 W AIRE LIBRE AVE
GLENDALE, AZ 85306
02/05/2009 ARNOLD, BRIAN M $148,000
04/28/2005 $237,000
14402 N 50TH LN
GLENDALE, AZ 85306
01/23/2009 HOOKER, BRIANNE L $118,000
10/23/2006 $224,900
14610 N 52ND LN
GLENDALE, AZ 85306
01/15/2009 CHEMELLO, JOE & ANITA $52,000
06/11/2007 $169,500
06/30/2006 $170,000
08/23/2002 $103,000
05/29/2002 $86,000
15617 N 59TH DR
GLENDALE, AZ 85306
01/15/2009 ELWELL III, WILLIAM R $108,000
01/28/2003 $139,000
6339 W AIRE LIBRE AVE
GLENDALE, AZ 85306
01/15/2009 FLETCHER, HERBERT & MARCIA $135,000
06/30/2006 $210,000
15819 N 59TH CIR
GLENDALE, AZ 85306
01/07/2009 WINEFSKY, BRIAN & MELANIE $67,000
06/05/2006 $205,000
5002 W PHELPS RD
GLENDALE, AZ 85306
01/07/2009 WALL, JACK $147,500
04/21/2005 $216,000
04/23/2002 $147,900
10/04/2001 $145,000
That is 11 of the 23 transactions. The other 12 I left off as they had no bubble transactions…. no data since 2002.
Here in AZ, the bubble is gone and we’re back to pre-bubble prices. Scary thing is, we’re still falling at 4%+ a month, with massive seller and buyer imbalance indicating there is no end in sight for the drops.
Scary thing is, we’re still falling at 4%+ a month, with massive seller and buyer imbalance indicating there is no end in sight for the drops.
That is the point the media continues to ignore. Recovery in six months, but just ignore that imbalance. Its not just active inventory. We have the shadow inventory, etc.
Two cousins of mine just sold their 2nd homes and were *happy* to only take small haircuts. Why? They’ll lose less in 2009 than if they had rented the homes out (after repairs).
We’re approaching capitulation…
Got Popcorn?
Neil
Wow! Three of those were now two thirds or more below peak bubble prices. Was the anything particularly unusual about the place that went from $195k to $34k? That’s more like a decapitation than a hair cut!
Condo… probably in a complex with a large number of defaults and the association unable to even pay the water bill.
We’ve had many, many reports of condos having their water shut off and all units forced to vacate because of $10s of thousands of unpaid water bills.
What is a condo worth if you can’t live in it bacuase there is no running water?
In the not too far past, I posted in favor of HOAs, but you have a point: HOAs are only as good as the occupancy rate of the project. If not enough people can support the maintenance costs, they end up being more expensive than hiring a bonded, licensed handyman with good referrals and a long history of good work.
In the past, I had problems with a gas oven. I hired a professional, had to do it twice about 18 months apart, when I was a mortgage payer. I would hire someone all over again who has the experience. I also hired a professional landscaper to make my front yard a Xeriscape. He did a very good job and it was money well spent. I attempted DIY years before and failed miserably!
I’ve ALWAYS thought Zillow was useless.
It is. According to them, my house actually went UP in value compared to when I bought it last fall. Who knows what they’re smoking…
Aren’t Zillow and Trulia NAR subsidiaries? I don’t care if housing falls through the ZERO floor, they and their minions need a noose in a very big way.
…there is no end in sight for the drops.
Would this be because the damage has spread from real estate to nail shops and life coaches? Which in turn, results in more foreclosures which means more empty tanning beds with resultant loss of… houses?
If so, what stops the cycle? When we get to the point where the only jobs left are sustainable ones (govt, medical, financial) and we need to somehow make up some sort of new economy for all the people who had nail/tanning/coaching jobs?
Yes. This is how it’s always worked. But remember, these situations are created. I’ve seen this cycle many times now.
Patience, Grasshopper. The treasury deal will take shape soon, and only qualified buyers, like PIMCO, will be able to bid on the great deals that will have profits guaranteed by the taxpayers.
There is an article on front page CNN today regarding California R/E sales picking up and inventory numbers decreasing. They did mention however that banks are intentionally bringing foreclosures to market slow and steady so they don’t glut.
Jingle, I mentioned this article earlier in the week — it’s about a guy named Leo Nordine, who has a booming foreclosure business.
Here’s the part you were talking about: “In California, only ten percent of the houses that banks will eventually reclaim have come on the market, according to Sean O’Toole, the founder of foreclosureradar.com. The rest is the hidden iceberg of ‘ghost inventory.’”
Here’s a link to the article summary:
http://www.newyorker.com/reporting/2009/04/06/090406fa_fact_friend
ET-C, yes that is the one. It is a little concerning everyone is feeling so much pain, yet 90% of the houses that have or will be foreclosed have not even seen the light of day. I find that mind boggling and hard to believe. If I had time to do my own research, I would, but for now, I will accept the fact there is an avalanche coming.
Completely off topic. The Wilkins Ice Shelf snapped off from Antarctica yesterday. The ice shelf, about the size of the island Jamaica, was 3200 sq. miles in size. Since the ice was already floating in the ocean it won’t add much to global sea levels it un-plugs a massive river of ice that will now accelerate their flows into the sea.
How often did giant sheets of ice break loose decades ago, before we stared keep track of this stuff? We just don’t know if this is common throughout the last 10K years, or if this is abnormal sign of global warming.
I don’t have a clue myself. One thing is different though, 10,000 years ago the human race was a tiny fraction of it’s current size and had zero effect on climate. I am pretty confident in one thing though, if the rest of the world is going to raise their standard of living to ours I would expect the earth will need to supply about 20 times more resources and energy. There will be side effects. It’s a lot about the rate of change that presents the challenge. Humans adapt pretty fast but other life forms not so much. Has anyone notice the drastic decline in bird populations over the last 50 years? I sure have.
And, if our standard of living falls to match the rest of the world????
The oil will still be sucked out of the ground and burned. The coal will still be dug out of the ground and burned.
If humans are causing global warming, then we are going to have global warming because we will not stop purning fossil fuels until they are all gone.
Any beleif that there is a possibility we will switch before forced to is just silly.
Agreed, when the rubber hits the road it’ll be business as usual with the fossil fuels.
Humans worldwide attaining the standard of living of Americans wont happen in this century…..unless there are only about 900 million after the depopulation.
I find the arguments about global warming interesting but irrelevant for real policy decisions. Burning coal is so dirty that the global warming effects are less important than the misery imposed on the people who are stuck downwind, and mining it is so desctructive, you might as well just evacuate the areas that are downstream of the mountains that they dig out and dump in the neighboring valleys. Since coal is the only “dead dinosaur” resource the US has that could last for a really long time, we have to get on renewable resources, purely for national security reasons. I don’t want to be dependent on OPEC and Russia for dino juice. The chance to move in this direction that GWB gave up right after 9/11 (telling us to shop instead) is the biggest tragedy of his presidency, IMHO.
Biggest tragedy interms of policy opportunity wasted. Obviously the lost lives related to other decisions are a larger human tragedy.
If nothing else, the “what about my ocean view” crowd wouldn’t have dared complain in October/November of 2001.
Realtors lie. They are making more waterfront property all the time. WWF is looking for cash to help out the polar bears that are losing their feeding ground, but I don’t know what they can do. The interesting part is that warming trends have a tendency to cause current changes in the seas that actually result in new ice ages.
“The interesting part is that warming trends have a tendency to cause current changes in the seas that actually result in new ice ages.”
That’s the uncomfortable scenario for the UK and Europe with the Gulf Stream.
I’d pay to see Gordo Brown encased in a glacier.
Me, too!* Absolutely!
*Say, who IS ‘Gordo Brown’?
I had to ask* because, sorry to say, I just became excited by the thought and wanted to see someone be ensconced in a glacier. It’d be educational! Especially if they didn’t volunteer for it.
*Sigh. Yes, I know Gordon Brown is the Prime Minister of the UK. I watch the teevee. I was being silly, because it’s a sunny and giddy Sunday here.
But I mean, come on—don’t all of you want to see someone ensconced in a glacier, too? It doesn’t even have to be a Prime Minister. It could even be a mail-man, or a mail-lady…sayyyyy…I know of a handy one we could use.
Well, if this is the OT section, I can do you one better:
The governor of my state has gone on a one-woman war against polar bears, and is fighting the Interior Dept when it comes to declaring them an endangered species. Come to think of it, she has gone on a war against education stimulus money, global warming, and sex education too.
“Barracuda Barbie” has even nominated one of her own to fill in a vacated state senate seat belonging to the other party (who left to serve a national office in DC), a break with long standing tradition and possibly even the State Constitution. But then again, she has never cared much for the Laws of Man when they conflict with her version of “Higher Law”.
I can understand why she is looking to expand her prospects for elected office nationally. She is really p!ssing off a lot of Alaskans with her power grabs and personal vendettas.
A pox on her House of Hillbillies!
Come to think of it, she has gone on a war against education stimulus money, global warming, and sex education too.
And she’s agin’ them witches, too. Don’t forget them witches! They’s bad!
Someone pissed in that gene pool of mongoloidism.
Thanks for giving me mild anxiety at breakfast, Blue Star. In honor of your information I went ahead and titled today’s delicious breakfast drink of coffee, whipped cream, and a little orange monkey to be ‘The Wilkins Ice Shelf Doom Delight’. (See above in the thread.)
Say, you’re not my sister, are you? She has a tattoo of a blue star on her back, and knows about ice shelves and stuff. If you are, then wow, this is convenient!
So, did you hear that Julie sneaked that total loser Josh over again for the night and mom is super pis*sed! And Bexsy and Nate had a fight. Oh, and Al is back to being convinced that fresh greenery next to his skin will remedy all those self-inflicted scars and dents, so he wants me to mail him a Hefty bag full of Washington state moss so he can tape it to hisself. I told him I’d think about it. (But I’m not gonna.)
Fear not, Oly. This information is meaningless. Just more global warming boogeyman BS.
This has gone on since Day One and will go on long after we’ve become little more than fertilizer for all these herbs y’all have been talking about on here lately.
So relax and have some more coffee.
If I remember correctly in the 70’s, the so-called scientists were exploiting their theories on an ice age coming. Now its global warming.
Ok so let look at pollution over the years.
1. WW1 and WW2 Dust, dirt, blood, gases, burning cities
and bodies.
2. Coal was the basic heating fuel for most homes till the
late 50’s. Coal dust so bad in Milwaukee, the snow
would be covered in black, minutes after a storm.
3. Gas guzzling cars without pollution controls of the 50′ and
60’s.
4. Mt St. Helens eruption..dust for years in the air.
5. In Milwaukee’s river valley, it was so bad, you could
smell the stink of foundries, slaughter houses, breweries,
steel shops and your eyes would burn.
6. Raw sewage floating at the shoreline at the beach on
Lake Michigan.
7. Vietnam war, Afganistan Russian war, Korean war, Iraq
war, Gulf war, Cambodia. Dust dirt and remember
napalm?
Take any or all of these pollutions from the past, the question is, where did all thhis crap go.
As much as Gore and his storm troopers push global warming, nothing man can do can stop the natural evolution of this planet. can we control sun spots? Can we control Chinas pollution, the dust storms of the desert, the eruption of volcanos, hell no. Let the earth do what it does. It got rid of the dinasoars, the earth will eventually get rid of humans. Let the roaches rule! Quit wasting my money on that which we cannot affect.
I guess you have no grandchildren. And if you stick your head into the sand I agree we will never find any solutions. All of the pollution you mention has had an affect on temperature, it is not as noticable because the National Weather Service updates it’s normal climate statistics every 10 years. Therefore we have to do a bit of searching to find that weather has changed quite a lot from 100 years ago. And it is getting warming that cannot be denied.
A big part of the solution would be to make it very easy for people to put solar panels on their roofs, give Tesla Motors the money we would give Detroit and then make it easy for us to buy Tesla’s cars. Then when you come home from work plug the car into the wall and re-charge it. A 4000 kw system can power a 2000 sq ft house and recharge the car.
No more oil or gas.
Now how many billion would it take to do that for 30 million homes? And does anyone think that would not make a difference?
Of course it would not be very popular as so many want us to keep buying the oil and gas.
It’s all about how much money you can keep. Don’t do anything about global warming–it’s my money you’re spending. Don’t do anything about health care or roads or education–it’s my money. I don’t care if my candidate is a lunatic anti-abortion grand vizier of the Klan–he’s promising not to raise taxes and that’s what matters most.
The greed and short-sightedness blow my mind.
The right to stay in possession of that which you have duly earned by your own effort is my idea of freedom. What’s yours?
http://www.time.com/time/magazine/article/0,9171,944914,00.html
Do we need to start TARP IV to bailout the penguins?
We could give them mortgages to live in those empty houses in AR and FL, with the AC on full blast of course. That way we take care of the penguins and kick start the mortgage and building industries to reflate the housing bubble. Unemployed nail salon and life coaching people could start fish delivery services. And so the penguins don’t get bored in the suburbs, NYCdj could host a zydeco party every night.
*gasp *
Man! Zilky, you are clearly a genious!
Agreed.
Why thank you. I’d like you both to be on my dissertation committee for my PhD in House Staging.
I was watching hgtv this morning, and something made me remember the commercial where the guy is watering his lawn, behind him is a huge house, and he says something like, “I’m a member of the country club, I have a 3 car garage, I just bought a brand new car…and I’m in debt up to my eyeballs. Somebody please help me.”
Haven’t seen that commercial for awhile. Ah, the good old days. I know some people in the media are speculating about how Americans have become a nation of savers now, and we will have a worse recession because Americans aren’t spenders anymore. But I remember the guy from the commercial, and I have every confidence that Americans will (on average) always spend every nickel they have, plus every nickel that someone will loan. I am sometimes below average, oh well, someone has to be a slacker…
Have a great Sunday, everyone! It is a hot spring day here in Houston.
Here ya go. A classic!
http://www.youtube.com/watch?v=hn5EP9StlVA
2009 version
http://www.youtube.com/watch?v=OPsuCJvRxqY
Back in the early 80’s, my brother had a co-worker who had saved nearly $100,000 by living at home with his folks and not going anywhere on vacation. Seemed like the guy was a tight-wad and loser even if he had a nice cushion in the bank. Times have changed. I’d tell a kid to stay at home and save their money nowadays as banks will always be around to take your money in the form of interest.
Stanley Johnson
Stanley Johnson… An American Classic !
Thx for the memories Lending Tree.Com
“I’m a member of the country club, I have a 3 car garage, I just bought a brand new car…and I’m in debt up to my eyeballs. Somebody please help me.”
Hahaha! I love that commercial. I wish there was a site that archived commercials, because there’s quite a few I enjoy and would like to have available for my viewing pleasure. Hey! Maybe there is! Does anyone know? Oh, I hope! Of course, there’s the Clio awards, but I mean, just archived commercials in general.
For instance, I recall the Miller commercials that came on throughout the entire hockey season some years ago. Man, they were terrific. I liked them as much as the games! Maybe even more. Like the one with the Hawaiian guys cheering and then they rolled on the ground? That one ’bout made my head asplode with laughing.
Sigh. I quit watching hockey when the players stood out that whole season. I decided they were all dead to me.
Favorite lines to this day:
“I must be in the front row.”
“He missed the tag……HE MISSED THE TAG!!!!”
Search YouTube. You’d be amazed what’s up there. Nestlé once had a commercial for white chocolate candy bars from 1986. That commercial bugged me for 20 years, and I finally found it on the Tube.
Yep. YouTube and Google Video, which Google’s own video section just like YouTube. (yes, I know Google owns YT)
Does anyone here know if the people getting write downs on their mortgage balances, that if in the future their value goes up they have to pay back any of the write down when they decide to sell?
I believe the bill you are referring to passed the House in March but is still sitting in the Senate. The issue you raise is one still being debated.
I’m not sure about the bill. I just know that the write downs are already happening.
Not on a large scale. The VAST, VAST majority of loan modifications being done at this point, involve ballon payments after the end of the modification period. This is why the re-default rate is so high!
I was thinking about the cramdown legislation. A voluntary loan modification is just an agreement between the parties. They can agree to anything they want.
‘A voluntary loan modification is just an agreement between the parties. They can agree to anything they want.’
Aww, come on Tim, you’re going to ruin an internet fairy-tale pointing out contract law stuff like that. There are entire web sites devoted to the belief that they are victims and the FBs run in the fields freely, skipping like children.
What if you have to get your cramdown from a judge in BK court? Doesn’t that void all the contracts?
I thought you were referring to the cramdown legislation which will have rules. As for voluntary loan modifications, ppl can voluntarily agree to whatever they want.
It is a catch-22.
Let them keep all the upside, and everyone will wantin on it. Don’t let them keep the upside, and they’ll just walk now.
Eather way, there is NOTHING that will stop house prices from falling until inventory and demand are back in balance.
It is my opinion that the increase in purchases is a CAUSE, not coincident to increase in defaults.
I think there are a lot of people doing the buy-and-dump method of loan modification. Go buy a new house, then stop making payments on the old. I know many people that have done this, and I don’t know that many people.
They already have this. It’s called the “capital gains tax”.
The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
The amount excluded reduces the taxpayer’s cost basis in the home.
The amount excluded reduces the taxpayer’s cost basis in the home.
Aha, so they may get hit with higher capital gains taxes years down the road.
It depends. Assuming it is your principal residence, otherwise applicable exclusions would still apply.
A good YouTube video about retail stores just walking or vanishing.
“Retail Blowing out to fast to record-Onterio Mills”
http://www.youtube.com/watch?v=2_ZtKi1ujmk&feature=email
That was something! The United States is starting to look like a 3rd world country (and I’ve been to a few).
Ugly ugly retail architecture. I weep for the dead trees.
This is also a “middle class tax break” that can cost the US treasury nearly a trillion dollars. Somehow the middle class and most Democrats overlook this extremely generous and unprecedented tax break.
Well, I’ve been re-reading Galbraith’s “Great Crash of 1929″ and you’d swear he was reading this blog from beyond the grave if it wasn’t for the fact that it was written in 1955.
Even though it is chockful of facts and figures, he has quite the talent with em-dashes, commas and semicolons, and a felicitous “turn of phrase” that would impress even Olygal.
You were right about this rally having legs. Pulled the plug on some long stuff Friday though, curious to see what this week brings now that the G-20/Euro lovefest is over.
How about Oscar Wilde…also admirable in his foresight.
“Things don’t change, people do”
Thoreau
Great quote.
Ah, Sunday morning reading Galbraith and waiting for the garden to come up. Life’s good!
in these matters, is like a lovely and accomplished woman who must wear black cotton stockings, heavy woolen underwear, and parade her knowledge as a cook because, unhappily, her supreme accomplishment is as a harlot.
Well, why can’t she be both?
It’s called ‘multi-tasking’. I recommend it.
AHahahahaAHAHAH!
I think you are going to see an uptick in margin debt on the April data. I mentioned opening an SRS position yesterday.
Anecdotal, a large number of commercial hit the listiings locally last week. And, and a private residential auction has occured in my neck of the woods…..buyers were strongly represented on the residential side….. however, very little business formation is occuring. SRS may make a significant move over the next 90 days. Muir took my note last evening as a medium term hold, which on re-reading, seemed to indicate poorly worded comment on my part.
I’m following this one closely.
gl all!
From Yahoo….
Recession outlasts even extended jobless benefits
WASHINGTON – In the coming weeks and months, hundreds of thousands of jobless Americans will exhaust their unemployment benefits, just when it’s never been harder to find a job.
Congress extended unemployment aid twice last year, allowing people to draw a total of up to 59 weeks of benefits. Now, as the recession drags on, a rolling wave of people who were laid off early last year will lose them.
“I’ll work in McDonald’s,” he said. “I got no pride as long as the people in this house eat, have hot water — that’s all I need.”
Long, like many of the long-term unemployed, has tried to learn new skills. For three months, he spent Saturdays and Sundays working to get his commercial driver’s license. That led to work as a cargo loader for a couple of months at the supermarket warehouse. But since then, nothing.
States typically provide 26 weeks of unemployment benefits, an average of about $350 a week. Last year, Congress tacked on 20 extra weeks of benefits, and later it added 13 additional weeks for people in states hardest-hit by unemployment
http://news.yahoo.com/s/ap/20090405/ap_on_bi_ge/unemployment_losing_benefits
“I’ll work in McDonald’s,”
NOT so easy anymore……most place want you to be Bi lingual if you are on the register. And then expect you to fill in when they are short staffed. I have not seen many older white mene(never seen an older black man) in McD in a long time
RE: In the coming weeks and months, hundreds of thousands of jobless Americans will exhaust their unemployment benefits, just when it’s never been harder to find a job.
Banks are gettin’ robbed every day in Beantown and the surrounding metropolis.
And in places like Oakland CA, restaurants full of patrons are being hit by gangs.
Better leave that Rolex and wallet full of credit cards at home!
4th inning IMHO.
RE: In the coming weeks and months, hundreds of thousands of jobless Americans will exhaust their unemployment benefits, just when it’s never been harder to find a job.
and this is when we will start to see the uptick in crime and social disorder. Unemployment, welfare, food stamps are all designed to keep the poor and formerly middle class from rioting and eating the rich.
In the early 80s on Long Island gansters committed many horrendous crimes, with this one the most notorious:
http://www.nytimes.com/2002/06/28/nyregion/prison-release-recalls-horror-li-diner-1982-rampage-led-law-raising-felony.html
Five African American men from Brooklyn went out to Long Island on a hate-crime rampage, raping, defecating on people, and forcing white patrons of a diner to have sex with each other.
The rampage started the Friday of Memorial Day weekend in 1982, when five young men from Brooklyn stole a Cadillac from a garage there. It continued in Plainview, where they invaded Thomas and Janet Reilly’s home, raping, beating, robbing and urinating on guests at a party held by the couple’s 20-year-old son.
And it culminated early the next morning, when the men burst into the Seacrest wielding handguns and a shotgun, then robbed and terrorized customers, demanding that they strip and ordering some to have sex with each other. At least one waitress was raped. Two young men were shot. Mr. Bouloukos and several others were pistol-whipped, and all 80 or so people inside were held hostage for more than an hour.
The perpetrators are now out of prison!
I have to put in a plug for a just-slightly OT, but relevant 1939 movie that’s up at Archive.Org
http://www.archive.org/details/middleton_family_at_the_worlds_fair
It’s described as “This drama illustrates the contribution of free enterprise, technology, and Westinghouse products to the American way of life. The Middleton Family at the New York World’s Fair pits an anti-capitalist bohemian artist boyfriend against an all-American electrical engineer who believes in improving society by working through corporations. The Middletons experience Westinghouse’s technological marvels at the Fair and win back their daughter from her leftist boyfriend.”
A lot of references to the First Great Depression, the WPA, etc. The more things change….
Good find. I usually love those old films, especially the hard core propaganda ones, but that one is just painful.
But a good find nonetheless.
Any of you New Yorkers see the latest Prudential RE commercial? It features this loser couple desperate to unload their shanty. I’m not sure the subliminal message yet but it is certainly vomit inducing.
Ready your puke pans for this one.
Can you link it from somewhere??
Found it Blano..
http://www.youtube.com/watch?v=yrk8BTzdCKE
I watched it a few more times… once without volume. What struck me was the final still shot. The behemoth looks like a early 20th century prison or tuberculosis clinic.
I still think this one is the worst. Maybe because I am both a fence sitter and the “they” they are talking about.
http://www.youtube.com/watch?v=xCoRfaYWEww
“It features this loser couple desperate to unload their shanty.”
Lol. Are the actors same ones that did the “Suzanne Reasearched It” commercial?
Not nearly as pathetic as that spineless blob of $hit and hag of a wife in the Suzanne/Century21 commercial. These two were pseudo-sophisticated metro-sexual type losers. B actors.
Tell me again how you feel, there. Because I cannot tell.
That ad was astounding, but I wouldn’t blame the actors! They did a great job portraying the most dysfunctional pathetic couple ever in a few short seconds. I want to strangle the wife, and yell at the husband to GTFO of that toxic relationship.