Bits Bucket For April 9, 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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WSJ goes positive for housing:
By BRETT ARENDS
Talk about capitulation! Judging from my mailbag following last week’s coverage of the Case-Shiller housing numbers, almost nobody has a good word to say about the real estate market any more.
I’m an instinctive contrarian. So I hope readers don’t take it the wrong way when I say that when so many of you agree with me, I start to get nervous.
And where is my hate mail? The brokers must be totally whipped. Even a year ago anyone questioning housing prices could reliably expect a torrent of furious replies from those in the business.
Today? Almost nothing. And the few left are mostly of the “U r an idiot (Sent from my iPhone)” variety. Pitiful.
Maybe the moment of maximum pessimism is at hand after all.
So let me play devil’s advocate and consider the positive case for buying a home right now.
The key factor: Interest rates.
If you can borrow at 4.5% or 5% over 30 years, many purchases start to look appealing. Especially if we get a hefty dose of inflation down the line.
If that happens, your monthly payments will be low and you’d get to repay the principal over time with devalued dollars. That’s a double win.
Inflation isn’t guaranteed: The bond markets are only predicting about 1.4% inflation over the next 10 years, and BCA Research recently reminded clients that deflation, or falling prices, remains a danger. Unemployment is still rising and recent wages actually fell.
Yet if you had to bet from here, you’d bet on inflation in due course. The government is running massive deficits and has the printing presses at full throttle. That’s the classic recipe.
And inflation is the debtors’ friend — which is why it is surely going to prove the politically expedient way out of this mess.
Anyone purchasing hard assets like real estate, with a 5% fixed rate loan, ought to make good money if that happens.
I think it’s a case of post hoc. The markets come back when sentiment is at an all time low, but that doesn’t mean a perceived all time low will make the market come back.
Also, “lower than it has ever been before” does not in any way have to translate to an all time low. All time includes the future.
Exactly.
Without wage inflation I honestly can’t see this happening and who possibly thinks that will happen any time soon? Pas moi.
We’ll see inflation all right….just not in housing. And when that occurs folks will have even less dough to sink into their paper castles. And the vicious cycle continues……
In the presence of a budget constraint and Chindia willing to do jobs for even less, if they inflate, you just get an impoverished population and even cheaper housing.
That s alright we are importing cheap labor by the millions and most people think it is great! In fact Obama and co are about to make sure the wholesale change of America is complete.
Viva la Change!
Yep, I was reading about that this AM. Sick to my stomach. Although, O is an interesting chap. He tends to do these head fakes and I hope that’s true here.
NPR reported this morning that that H1B visa applications are way down. Now, they will leave the application time period open until they use up the allocation, but normally it is all used up almost instantly, and this year it is taking time.
Reporter said that high tech companies are wary to hire from abroad when there are so many out of work and they are actually in the middle of lay offs.
That s alright we are importing cheap labor by the millions and most people think it is great! In fact Obama and co are about to make sure the wholesale change of America is complete.
Funny, I keep hearing and reading the opposite — immigrants (legal or not) are returning to their countries of origin in droves, support money sent back home by immigrants has slowed to a trickle, H1B visa holders are getting laid off like everyone else, and tech companies are complaining about the “arbitrarily low” H1B caps this year.
They had over 40,000+ visa requests in only 5 days. Have no doubt, the remaining 45,000 will soon be filled.
Please note, these are for visas that will take effect in October of 2009.
I never saw anything that said the new immigration law would take off the onus on the employer to prove that there is no American applicant who could reasonably be expected to do the job (the current law and one not being questioned by the current Administration).
We need to be able to hire talented immigrants so that we can remain competitive (especially in high tech) with international companies that have access to a more educated and skilled labor pool, unlike that trained by our increasingly abysmal public schools (No Child Left Behind, anyone?).
Besides, Americans get hired by foreign companies too. A crackdown on all immigrant labor would just lead to retaliation that wouldn’t do anyone any good.
NPR reported this morning that that H1B visa applications are way down. Now, they will leave the application time period open until they use up the allocation, but normally it is all used up almost instantly, and this year it is taking time.
It’s a strange phenomenon — H1B applications are down, layoffs are up, the homegrown talent pool is richer because of attrition, and yet tech employers are still (perhaps reflexively) complaining about the caps.
I never saw anything that said the new immigration law would take off the onus on the employer to prove that there is no American applicant who could reasonably be expected to do the job
That is a common misconception.
There is no requirement on the part of the employer to prove that no American applicant could reasonably be expected to do the job.
New H1B legislation requires certain employers, called ‘H1B dependent employers’ to advertise positions in the USA before petitioning to employ H1B workers for those positions. H1B dependent employers are defined as those having more than 15% of their employees in H1B status.
The video below taken from a seminar by the law firm of Cohen & Grigsby explains how they can help companies legally avoid having to hire Americans:
http://www.youtube.com/watch?v=TCbFEgFajGU
Since lawyers are expensive, you can bet that companies save lots of money by hiring them.
NoSingleOne, I am a seasoned programmer and along with many other good people in this field cannot find work right now. There is no shortage of high tech talent.
What there is a shortage of is people who will do the job as cheaply as the imports. It is a race to the bottom, and one of the biggest reasons our economy is coming apart at the seams right now. After all what is the good of companies when no one can afford the products they make. The cheap labor makes “this quarters” results look good, but in the long run is ruining our country, which was based on the idea of a large stable middle class.
What there is a shortage of is people who will do the job as cheaply as the imports.
My understanding is that it is not immigrants taking these jobs, but corporations offshoring high paying jobs to Chindia and Europe. Coupled with their tax breaks and ability to avoid regulations and tariffs from poorly written free trade agreements, it has had a devastating effect on a broad number of industries.
There is no requirement on the part of the employer to prove that no American applicant could reasonably be expected to do the job.
Not true, at least not for the J-1 visas in the medical profession, which I am much more familiar with. Also, I thought that H1-B visas were time limited i.e. they could only stay a maximum of 3 years? Finally, I saw a referenced quote in Wikipedia that stated the cheap labor started flooding in after the Bush II Administration changed the requirement that H1-Bs had to make a higher wage than comparable jobs in the same geographic area, presumably another ‘knuckle-under’ to his corporate masters.
Not true for the J visas either. You can bring in “trainees”.
Medical Education and Training
Exchange visitors coming under the “J” program for graduate medical education or training must meet certain special requirements. They include having passed the Foreign Medical Graduate Examination in Medical Sciences, demonstrating competency in English, being automatically subject to the two-year foreign residence requirement (later), and being subject to time limits on the duration of their program. Physicians coming to the United States on exchange visitor programs for the purpose of observation, consultation, teaching, or research in which there is little or no patient care are not subject to the above requirements.
H1-B’s are time limited. They can be given for as little as a year and renewed to a maximum of 6. If, at that point, a further process has been initiated (for a green card or other visa) temporary extensions may be granted until the result of that process is known. I have seen people on H1-B’s for as long as 8 years who were then obliged to leave.
It’s not a great system. Not really fair on the visa-holders or the American workforce.
support money sent back home by immigrants has slowed to a trickle
Not really. What has slowed is the growth of remittances, at least to Mexico.
It is also interesting to note that H1-B’s are tied to a specific company(once the process for a Green Card is started, changing companies starts the process over).
If they were not tied to a specific company, then companies with the most urgent need for H1-B’s could offer more money and hire them.
Medical training positions don’t take jobs away from American resident physicians, so the discussion of visiting scholars is apples and oranges. To be a physician in this country, they must work in an underserved area or have special expertise until they get green cards.
AMR Offshored its entire HR dept. Manila.
In the presence of a budget constraint and Chindia willing to do jobs for even less, if they inflate, you just get an impoverished population and even cheaper housing.
BINGO and thus the reason globilization has been pushed. The elite will create a huge slave labor pool willing to work for food and shelter and not much else. Those that control resources and the government will become extremely wealthy and powerfull. Those that work hard and are innovative will eat scraps.
+1000
Unless the people on the bottom kill those at the top.
Bravo yet again, measton!!!
I took this snip from another site. Tracking import/export.
I keep hearing arguements that protectionism will save us. I disagree. Note our total exports were 126 billion for the month of feb. Imports were 152B. Now, these levels are already low. Also a substantial number of jobs are tied to the imports as well. Shipping, port workers exc. Well, if we do something dramatic here and go protectionist; we end up with killing a big chunk of the 120B and all the jobs that go with it. Imagine the disruption of the sans oil business comming to an end. Would probably result in a drop of 5-6% of GDP on top of what we already have. With out any multiplier effect.
Total February exports of $126.8 billion and imports of $152.7 billion resulted in a goods and services deficit of $26.0 billion, down from $36.2 billion in January, revised. February exports were $2.0 billion more than January exports of $124.7 billion. February imports were $8.2 billion less than January imports of $160.9 billion.
Now, we have to extract ourselves from the situation somehow. Not sure how to do that with out causing a massive disruption.
However, extracting ourselves from it and unwinding the situation now is a different proposition all together.
I’d also mention I was against NAFTA/China is a good guy trade status a long time ago. Before this mess occured. We exported a lot of critical technology and made a dangerous communist nation a more formidable opponent. China is an ancient power and they probably look at the US as some kind of upstart. They are looking everywhere but internally. The oppressive monarcy was relaced by a oppresive communist monarchy. I believe that we will be able to fend them off but things are going to get cold war kind of tense in short order.
Hopefully, China/India/Russia duke it out. We can sit on the sidelines. Enjoy.
Hopefully, China/India/Russia duke it out. I hope for no such things. However, at the rate Russia’s population is falling, in 20-30 years the Chinese can simply take a hike north and occupy the Russian east, since there will be very few Russians to oppose them.
RE: Without wage inflation I honestly can’t see this happening
Management at the Beantown Glob is demanding the guild craft unions take an immediate 20% wage cut and diminished benefit packages to address a $85 billion loss last year.
O’Bama, if he were worth a crap, should start the same medicine for the legions of federal government do-nothings.
(see Yahoo FBI post)
I haven’t read one word of these clowns sacrificing a thing.
“O’Bama, if he were worth a crap, should start the same medicine for the legions of federal government do-nothings.”
But government wages are a key method of monetizing! Were you actually expecting some sort of value for your tax dollars?
Why should government workers go down with the idiots in the private sector who don’t have the cojones to stand up to their lords & masters?
“Why should government workers go down with the idiots in the private sector who don’t have the cojones to stand up to their lords & masters?”
Alleluia someone gets it!!!!!!
Sadly, I just heard on NPR this morning that the weak willed food and beverage wage slaves at one of Connecticuts casinos voted down unionization 2 to 1.
who don’t have the cojones to stand up to their lords & masters
Or worse, who are grateful for being oppressed.
RE: “Why should government workers go down with the idiots in the private sector who don’t have the cojones to stand up to their lords & master
Because the “idiots” in the private sector pay the wages for the bloated government parasites that’s why.
And like the appointed head of any government entity really gives a rats azz about the bottom line anyway.
Just pass a tax increase and print more money, while they count the seconds before they can start drawing a pension or start on another one. Let the next guy be the one left holding the Ponzi bag.
And the government workers pay the wages of the private sector guys buy purchasing their products. And when was the last time someone had to pay higher taxes? My tax rates have only gone down for the last decade. While my “private sector” provided goods only go up (except for houses lately, hehe).
Why so desperately desire to bring others down instead of lifting yourselves up?
You must not live in California. In the last 3 months:
- Car tax doubled
- Sales tax increased 1% (it will be 10.25% in LA County on July 1st)
- Income tax rates raised for all income levels
- Child tax credit repealed (effective increase in taxes)
- Gas taxes raised
“Idiots in the private sector”
The biggest difference? We don’t get to vote on our bosses.
Let’s even the playing field, and make it illegal for government employees to vote. Especially for someone that is managing their payscales.
George Patton never voted…….said something to the effect that a vote against his boss was mutiny, but a vote for his boss meant that he was bought.
Jon, you obviously do not have the slightest clue about basic economics if you think that by returning some of the confiscated wages that pay your salary to the marketplace that you are somehow creating economic growth. The contempt you show for the people who pay your salary is sickening, but indicative of the entitlement mentality that makes people hate government workers. When I start to feel sorry for the laid-off workers from bankrupted government agencies, I’ll remember you and steel my heart. Hope budget cuts come your way soon, and hope you find out who the PBGC is.
And the contempt you show for wage earners is unspeakable. Why don’t you reveal your expertise in “basic” economics for us…. step right up to that. And while you’re at it, keep “your” money I’ll be sending the water dept. out to your shanty tomorrow to shut you off and the sewer dept. will be there by next week to disconnect your lateral. And now that I think of it, your shack is gonna burn to the ground as the fire dept won’t help you out. And stay off my roads….
yeah.. you keep your money because after all, low budget wage slaves need all they can get……punk.
Government workers are far less efficient than private sector workers. As evidence, I suggest one look no farther than the US private investment banking sector. Has any other sector of any economy in the history of the planet shown itself capable of throwing away money as quickly as they did last year? The government could never compete with that pace — too many of them pesky checks and balances slow them down considerably.
Well said, Jon and exeter.
While the rats fight each other over the crumbs left on the ground, the PTB are making off with the bakery. This tearing down of middle class by those within the middle class is rather astonishing. Why is it that so few people understand what’s going on?
all gov workers are kings now !
cradle to grave
they show less than 1% of total job cuts so far
See my post above. We need to privatize the whole economy so we can destroy wealth more efficiently. The government destroys wealth far too slowly to ever hope to compete with the private sector.
I remember just a few years ago when many were calling me an idiot for staying in my low paying stable Govt job with benefits.
Now I am getting too much and need to be reigned in….
Sounds like more Bush Legasy talk “there is no need to take care of those soldiers once they have done their duty”, “war time injury ?…just walk into any emergency room”
RE: my low paying stable Govt job with benefits.
Do tell what is low paying?
And be sure to include the details of your health care insurance, pension, vacation days, retirement, sick leave, maternity leave, family time leave, et. el.
Without wage inflation ??
If you are in the market “to borrow” and assuming you still have a job, you do have some wage inflation with the combination of lower prices & lower interest rates…
Too many “if’s” and “assumings” to make wage inflation work. Besides, in nominal terms wages are heading down right now.
Nominal? Try REAL. And been that way for years.
There will always be some people whose income increases, no matter what happens to the general economy. “Wage inflation” is properly considered on a population-wide basis. Rising wages for the US population is not in the cards.
Why wouldn’t Mr. 6Pack buy under these market conditions? Prices are low compared to yesteryear and falling. Supply is abundant. Interest rates are low. Plus, the government is giving him down-payment money to buy. It’s a double-plus good time to buy.
“Prices are low compared to yesteryear and falling.” - That’s reason #1
Reason #2 - Mr. 6Pack is probably in debt up to his eyeballs and is already worrying about losing his job.
Is it low enough compared to renting?
I’m a going to see if I qualify for a no money down.
I have posted links of Wisconsin RE fraud and lack of regulation before. The State allowed Felons convicted of murder, assault, gang crimes and fraud work in the RE and mortgage brokering business without checks or visits from State regulators.
A girl I know that called me and laughing mentioned this one.
Some guy opened a “toe nibbling fish salon” in nearby mall… and HERE come the state regulators
“The fish at Mayfair Mall were continuing to chew on toes Wednesday, but that might end soon, a state official said.
“The position of the department is that fish pedicures are not legal,” said David Carlson, communications officer for the Wisconsin Department of Regulation and Licensing.”
You’re after the LITTLE FISH Wisconsin… get the REIC Crooks
http://www.jsonline.com/business/42691332.html
And posted just above this were complaints that govt employees don’t do anything. See, they’re doing stuff.
The deal is the makinghomeaffordable.gov (just announced by my favorited President) is nothing different than subsidized housing. And a fascist president announcing this program seals the point. I avoid living among people who did not earn nor could afford the original purchase price of their house. They are liars and gamblers.
Also we could be headed the European way of perpetual 10% unemployment, what with the massive taxpayer-financed government programs and increased costs on businesses.
I avoid living among people who did not earn nor could afford the original purchase price of their house.
So….you’d be on Mars right now?
Wow! Ya can access Bens blog even from Mars, everybody! Who knew?
*shakes damp head in wonderment *
And a fascist president announcing this program seals the point.
Wait, is he a fascist or socialist or communist or tool of the financial powers-that-be?
I can’t keep it all straight.
“Wait, is he a fascist or socialist or communist or tool of the financial powers-that-be?
I can’t keep it all straight.”
Yeah, that’s what been so strange about his behavior. Sometimes he seems to be acting like just as much of a corporatist as Bush; other times, his policy decisions definitely range towards the socialist/communitarian end of the spectrum.
Then again, I suppose the exact same thing could have been said about our previous president (whom I wasn’t fond of either).
“Sometimes he seems to be acting like just as much of a corporatist as Bush; other times, his policy decisions definitely range towards the socialist/communitarian end of the spectrum.”
One day - bing - a light will go on in your head, and you’ll realize that there is virtually no difference between the two; that they are in fact two sides of the same coin.
And WTF is “communitarian”? Is that the new PC word for communist?
Don’t patronize me. I am well aware of this, which is why I voted 3rd party in the last election. Most others do not and then get offended when I point it out to them…so I’ve given up on it.
As for communitarian, google it. Maybe you’ll learn something.
Post eaten.
Don’t patronize me. I voted 3rd party (Barr) in the last election for this very reason. I regularly point this out to people and they only get “offended” when I do so; consequently I’ve given up on it.
Google “communitarian” and maybe you’ll learn something today.
Sorry - my words were harsh.
Nevertheless, being that you say you see what is - why do you then find his behavior strange?
Re: communitarian - from Dictionary.com:
–noun
1. a member of a communistic community.
2. an advocate of such a community.
sorry, but still sounds like just a PC term for communist to me.
I couldn’t vote for Barr because his mustache reminded me of a bad 70’s porno star.
Re: communitarian - from Dictionary.com:
–noun
1. a member of a communistic community.
2. an advocate of such a community.
Sheesh, that’s not right. Wiki it. Communitarianism is a philosophy that downplays individualism in favor of the community. It is definitely related to communism but not necessarily anti-capitalist.
Don’t go by what he says. Just throw that out of the equation and monitor actions. He says one thing in San Francisco and the opposite in Montana.
It’s just Bill. You can ignore it.
hahaha. thank you, needed to hear that.
“is he a fascist or socialist or communist or tool of the financial powers-that-be?”
Yes.
“Fascist President”????????
Perhaps you liked the previous President who permitted “torture”.
Meet the new boss same as the old boss!
+1
Wrong.
Case in point: One of Obama’s first acts after assuming office was to end the “extraordinary rendition” policy.
In principle, anyone W did not like could have been summarily labeled an “enemy combatant” and summarily shipped to Gitmo for some “extraordinary rendition” (e.g. waterboarding). Those unfortunate enough to be labeled “enemy combatant” had no legal recourse. This was no less than a complete abolition of American justice standards.
Obama was very quick to distance himself from this policy, and if you missed that, I would have to assume you are either a moron or an ignoramus, and possibly both.
LOL, Prof.
I never said I liked GB in the least. I have yet to see Obama releasing all the innocent victims held at Gitmo either however. I thought under US law we had 48 hours to charge or release?
Apart from his very elloquent speeches and charming charisma - name me one thing Obama has actually done to help Americans through this crisis. I was sickened to hear he was diverting tax payer money through some third parties in order to get around the limits set by Congress on bank officials pay and bonuses. What kind of crookery is that?
Again
Meet the new boss same as the old boss.
Nothing has changed except we are supposed to believe is has now.
Also we could be headed the European way of perpetual 10% unemployment,
Headed? The US is already there. US unemployment figures just look lower because they don’t count a huge number of people who aren’t working.
Note also that the Europeans don’t lock up 1% of their adult population like the US. People in prison aren’t counted as “unemployed”.
I think the rise in women staying home to raise their kids is directly related to the weak job market. For most families, daycare eats up too much of the second paycheck. Add in extra expenses, like business clothes and convenience foods and it’s a losing proposition for a lot of people.
The quality of most daycare stinks too. If you’re a college graduate, the difference in your standards versus the standards of most day care workers, is striking. Only the very top earners can afford good nannys, the poor get their care paid for by the state.
I think caring for elderly parents is also becoming a factor.
Woman’s work is devalued,therefore lower pay, and therefore relegated to family, now taking care of parents.
I actually see more Mr Moms. And bk’s due to much much lower incomes.
I’m afraid you’re already there. Add the excessive prison population, and adjust for statistical malarky even worse than they have in europe.
No capitulation yet in housing, as evidenced by the fact that 30 pct of 2008 purchases were seconds.
Signs the market has bottomed out:
1) The percentage of seconds has returned to historic norms;
2) Prices have stopped falling (the recent Case Shiller numbers showed them dropping at the fastest rate on record);
3) Peak prime and Alt-A ARM resets are history (maybe by late 2010);
4) Unemployment is receding (still climbing here in California last time I checked);
5) It is commonly agreed that real estate is the worst possible investment.
WE’RE NOT THERE YET.
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAAAAAAAAAAA!!!!!
“No capitulation yet in housing, as evidenced by the fact that 30 pct of 2008 purchases were seconds.”
The seconds of today may not be the same as the seconds of 2006 or 2007.
How many of these are buying second homes so they can walk way from their first home? For many people, that is the rational move at the moment.
“How many of these are buying second homes so they can walk way from their first home?”
I would have to hope quite a few, as these cases represent no change in the supply-demand picture, with the walk-away adding one home to the supply side at the same time the “second home” purchase subtracts one. These instances of churn do nothing to fix the overhang of a record number of vacant homes in the US market.
PBear…When you say “seconds” are you speaking of seconds loans or second homes ??
Second-Home Sales Fell Last Year
in News > Residential Mortgage
By MortgageOrb dot com on Tuesday 31 March 2009
The combination of vacation- and investment-home sales slipped to 30% of all existing- and new-home transactions in 2008, according to the National Association of Realtors.
However, more than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision.
The market share of homes purchased for investment was 21% last year, unchanged from 2007, while another 9% were vacation homes, compared with a 12% market share in 2007. The total share of second homes declined from 33% of all transactions in 2007 to 30% in 2008. In 2005, the peak year for home speculation, 40% of sales were second homes.
“We expected vacation-home sales to fall, given the impact of a declining economy on discretionary purchases,” says Lawrence Yun, NAR’s chief economist. “A steady share of investment-home sales results from buyers’ taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”
Amazingly, despite devastating crashes in stock, housing, container shipment and labor markets around the globe, the US housing market has not run out of folks with buckets of money and boxes of stupid.
“WE’RE NOT THERE YET”
For sure PB…As long as all these realtywhores remind me of this sweet lady…WE’RE NOT THERE YET
http://www.littlereview.com/goddesslouise/movies/cuckoo.htm
“No capitulation yet in housing, as evidenced by the fact that 30 pct of 2008 purchases were seconds.”
I’d be a lot more impressed if sales increases were being driven by first time buyers that could afford the houses they were purchasing. That would establish a legitimate, sustainable base under housing prices. However, prices must fall still more before this might happen.
However, there are good reasons to believe more people will be renting rather than owning housing in the future relative to historical averages of the past few decades. That would imply
more second house purchases in the future relative to purchases of houses as a primary residence.
I note that once real estate prices began landing hard in Japan, circa 1989, they kept on falling for maybe 20 years or so (that would bring you up to 2009). I know it is different here because this is the USA and all, but…
Well having just returned from Japan, two things I noticed: 1) They have negative population growth for decades now, and declining population growth overtime means less housing demand and 2) their peak bubble price was much higher than the US bubble price.
However, I will stick to my view that -12% more to go on the down side as called for by the CME Housing Future Contract prices.
“However, I will stick to my view that -12% more to go on the down side as called for by the CME Housing Future Contract prices”
CME Housing Future Contract prices have been wrong in the past; why should we assume that they are accurately predictive today?
No one should assume that, but it is as good as an indicator that has real money trading behind it can give us at the moment. If we go down 12% more from here then 29% so far + 12% the national average would have been down 41% since the bubble peaked in 2006.
How well have the CME Housing Future Contract prices done at predicting the price declines so far? MY GUESS: So far, price declines have proven worse than predicted.
But I would welcome evidence that the predictions implied by the CME Housing Future Contract prices are unbiased, as you suggest.
Five to six months out, CME Housing Futures have proven to be relatively accurate; further out in contact expiration months, more deviations. However these contracts were calling for far more down side back in 2007 than it was widely accepted at the time (of course not compared to HBBers) and real money is behind these contracts so someone is placing real bets on these.
So while not a precise indicator, it at least has something to back it up.
‘So let me play devil’s advocate and consider the positive case for buying a home right now. The key factor: Interest rates.If you can borrow at 4.5% or 5% over 30 years, many purchases start to look appealing. Especially if we get a hefty dose of inflation down the line.”
And what happens if you need to sell your home a few years down the road, and we’ve had a “hefty dose of inflation?” Interest rates will indeed be higher, and good luck trying to sell that house for what you paid for it in a high-interest rate environment.
But then your mortgage on a fixed rate will be worth much less inflation-adjusted too.
Well like others on HBB I got blown out of my short positions today, closed SRS positions with significant percentage loss. And this just after last week where I replied to FPSS saying SRS had more lives in it. Just goes to show you, when the gov’t is actively working against you with bailouts-galore, trillion dollar injections, money press printing overtime and war on shorts, it is ever more difficult to make $ as a short.
I think SRS will be rising again after this Spring hope eternal crap withers, but in the mean time I don’t have to fight the gov’t and be able to sleep.
Maybe the moment of maximum pessimism is at hand after all.
Not even. All the realtors I know are excited about the interest rates and tax subsidies being handed out for buying a home. With dropping home prices, “there has never been a better time to buy”.
Geez
I think they have reason to be optimistic, at least in San Diego. Many homes that we’ve been looking at (we only look at ones priced competitively in the higher-end neighborhoods) are getting multiple offers and all above what we would have paid. On top of that inventories are shrinking (I know, I look at them about everyday).
So far, it appears the spring selling season is going to be pretty good which is unfortunate because we were hoping inventory would pile up and further depress prices. Home prices will still sink but there are definitely people jumping in and buying right now. I have overestimated the amount of pain there would be this year.
You’re probably understating the number of people who are not paying their mortgages, but have yet to receive NODs. Also, the foreclosure moratoriums have affected inventory a great deal.
This downturn will probably last longer than most people ever expected, especially if the govt continues with their idiotic manipulations.
Also, many of the transactions I’m seeing are…FLIPPERS!!! (kid you not)
We are nowhere near the bottom, IMHO.
Same here in Maryland.
No capitulation in sight and plenty of idiots buying houses they cannot afford at stupidly high prices because: “its different here,” “housing will go back up,” the BRAC, government hand-outs, etc. Most of them have no ability to really pay the place off, but they don’t care since they plan on flipping it anyway.
Well, well, well.
The worst is over.
Onward and upward.
Not like one of the largest bankruptcies ever is looming ever nearer.
Two, in fact. And those (GM + Chrysler) are just the two that are on the tips of everyone’s tongues. There are probably more companies elsewhere teetering on the brink that nobody’s hearing about.
I am astonished at the amount of empty commercial real estate here in San Diego. Looks like a lot of companies have already packed it in. Most were probably “too small to care if they fail”
RE: I am astonished at the amount of empty commercial real estate here in San Diego
I was in San Diego visiting my son who just moved there 2 weeks ago.
Compared to the Northeast, sure looked like paradise to me.
Sure got beaucoup military money in town.
I called a Mitsuibishi dealership today an hour before the advertised closing time of both parts and service. Twice. Both times I was sent to the wrong brand department. Aparently I have an accent that makes “Mitsubishi” sound like “Chevrolet” to the receptionist.
The service guy was helpful, but sadly he was answering the call on his cell phone, so didn’t have access to much information. (Which is why I had to call the switchboard a second time, since he couldn’t transfer me.) I want to buy a $200 wheel, but the parts department went to phone message with no call back.
Either they are really busy, or already have done their layoffs, or maybe it is just business as usual.
Watch for one more airline, at least.
Why do corps get to have one, two, three or more bks?
Just to skroo the middle class and lower wages?
That which is a expected is a nonevent for the market.
Is the market “expecting” the full implications of these bankruptcies? Wall St.’s recent failures in predicting obvious future events seems to argue otherwise.
I agree that expected bankruptcies (or highly probable ones) are nonevents for the market. What is beyond the realm of expectations to anticipate is the chaotic dance between a massive systemic event (worse than expected and totally coupled almost everywhere across the developed world economy) and the policy response thereto (Fed, Treasury, IMF, etc measures to mitigate the impact of the crisis through extraordinary intervention).
“I agree that expected bankruptcies (or highly probable ones) are nonevents for the market. What is beyond the realm of expectations to anticipate is the chaotic dance between a massive systemic event (worse than expected and totally coupled almost everywhere across the developed world economy) and the policy response thereto (Fed, Treasury, IMF, etc measures to mitigate the impact of the crisis through extraordinary intervention).”
Perhaps bankruptcies such as these are not an IMMEDIATE event for the market. “Eh, GM’s bankrupt, who cares…that’s “flyover country”.” But what about when the resultant wave of foreclosures, bankruptcies, etc hits Wall Street? The pain will be fierce for sure.
As usual, Wall Street’s shortsightedness and ignorance of anything that doesn’t happen in its own back yard never ceases to amaze.
GM priced at $2/share - seems like there is still hope priced in, otherwise it would be trading for pennies right now.
A friend says it’s like 2003 when the market should have tanked and didn’t, so she’s done fighting the tape and has gone long.
Here is one big difference between now and 2003. And it is all the difference in the world.
Homeowner equity rate in 2003: 57.4% (and flat)
Homeowner equity rate in 2008: 43.0% (and falling very, very fast)
You may want to ask your friend to take that into consideration.
Plus credit was wide open in ‘03…not so much now.
Credit is still relatively open, and quite cheap for historical standards. However the ability to service the debt is fading fast. Hence no more accumulation of new debt and a rising default rate on old debt.
I’m done fighting the tape and am long gone.
Blano,
Friend lives in TX?
Short Squeeze today?
FYI, that’s sarcasm.
Almost certainly.
The market will jump on the Wells Fargo news.
Do you know if they put their balance sheet out there for everyone to pick through? I would love to take a look at it.
WFC is up 25%.
Man, this is just insane. To think that we’re paying billions of bailout $$ to companies that are hugely profitable just… blows my mind.
Well, wait a minute. Are they actually profitable or is it the same sort of shifty nonsense Citibank pulled with its “operational profitability” email?
Shifty.
The bank profits from the first quarter are largely due to AIG being forced to unwind their derivitives positions, and the banks getting fat profits for selling back their positions with AIG. Nothing in the WFC press release says anything about loan losses, rates of defaults, anything like that.
Any chance it might have to do with all that Level 3 mumbo jumbo??
that are hugely profitable
Give me limitless money @ 2% or less and I can make a fortune…Its easy right now to make a safe 6%….
Oh good - I was worried for a second that the government + the big banks were going to start being honest with us or something.
Just the next step in the government-orchestrated “bull is back” saga.
WFC is up 25%.
Man, this is just insane. To think that we’re paying billions of bailout $$ to companies that are hugely profitable just… blows my mind.
IIRC, Hank Paulson required at least a dozen large banks to take bailout money to obfuscate which ones were actually extremely shaky and prevent an orgy of short selling, whether their balance sheets were on the verge of failure or not.
WFC will take their lumps when HELOCs from 2005 reset. Of course, no one knows the true status of their level 3 assets for sure.
“IIRC, Hank Paulson required at least a dozen large banks to take bailout money to obfuscate which ones were actually extremely shaky and prevent an orgy of short selling, whether their balance sheets were on the verge of failure or not.”
Yep. All the more why it’s insane. There are multiple layers of insanity - it’s a veritable financial baklava wizardry feast.
It’s all over, folks.
That sure was a close one.
Big story today in the NY Times about Manhattan’s Housing market. And it’s not good. I know the Hamptons are dying, so Manhattan is totally expected. Second homes get sold before primary residences.
Here’s the link.
http://www.nytimes.com/2009/04/09/realestate/manhattan/09real.html?_r=1&ref=nyregion
I wouldn’t say it’s “not good.” Someone has to be able to afford to live here. There is plenty of demand, and I expect prices in the NY area to remain relatively high, but we’re looking at a 60% reduction just to get to “high” prices from insane prices.
“In the late 1980s, a surge in condominium construction in New York created a glut of condo apartments. Prices peaked in 1989, declined steeply in 1991, bottomed out in 1993 and stabilized in 1995 and 1996.”
I thought people learned their lesson.
“Mr. Miller said that during the last big real estate downtown, when studio apartments were so cheap that he considered buying one on a credit card, people thought the luxury market would never come back. ‘Conspicuous consumption was out of vogue in 1991,’ he said. ‘The market was back by 1997 or 1998.’”
Maybe this time they will. BTW, from the Brooklyn perspective, now all the people who really wanted to live in Manhattan will be able to, and Brooklyn will be affordable to those who want to live in Brooklyn.
BTW, from the Brooklyn perspective, now all the people who really wanted to live in Manhattan will be able to, and Brooklyn will be affordable to those who want to live in Brooklyn.
Great news for Brooklyn, which changed for the worse in many neighborhoods (IMO) because of the exodus from Manhattan. Hope my sister and friends there can enjoy the benefits without their respective neighborhoods going to seed.
And the creation of the myth of Hipster Brooklyn was a rationalization by those forced out of Manhattan - by spinning it as a new Bohemia it made it appear to be a choice to move there instead a failure to afford Manhattan.
I like the sound of this:
“The stress is most severe at the high end of the market. There are 350 apartments and town houses for sale in Manhattan with asking prices of more than $10 million, and inventory has been growing. It would take about six years at the current sales rate to absorb all those listings.”
Can’t be, it’s different here. What happen to all the foreigners and Wall Street types who had money to burn……………oh yeah.
Don’t worry, Obama for unknown reasons is pushing through immigration reform right now in the middle of a recession. The new citizens will no doubt be able to purchase all of the excess housing in the Hamptons.
http://www.nytimes.com/2009/04/09/us/politics/09immig.html?_r=1&hp
Here in Arizona, I know quite a few liberal Democrats who are rabidly against illegal immigration. They’re especially upset about the environmental damage that the illegals cause in the border areas of this state.
Hence, I think that Barack is going to get the mother of all pushbacks on this initiative. Not just from the Republican right, but from his own party and the independent voters.
In the past I’ve done a lot of humanitariany things in MX. Wonderful, wonderful people, and I felt and still feel real sympathy for their desire to get here. Because it’s much better here, relative to how so many of them get to live there. Shoots, you can’t blame them…
but you can shoot them. Hahahahah!
No, no, no, I just said that because I’d just said ’shoots’. Sorry.
Anyway, no shooting, but I’m a tree-huggin’ candy-a*ss volunteery and charity-donating Democrat and I’m very anti-illegal immigration. The only people I personally know who are PRO illegal immigration is the Farm Bureau/agribusiness guys, ’cause they can pay illegals almost nothing and then everybody else gets to pay for their, the illegals, health care, kids’ education, etc etc.
Greed, in other words.
I simply cannot see how having a permanent serf-class benefits anyone, including the serfs.
Although, like I said, having seen how the serfs live back home in MX, it’s better to be a serf here. But this is only serfishness of which I speak. Plenty of illegals didn’t come here looking for honest work, aka serfdom, in the first place.
Ahhhhh! *waves hands *
Look—it’s a very complicated issue. I believe I’m just gonna go eat a donut and think about water rights instead. ‘Cause those are nice and simple.
Hence, I think that Barack is going to get the mother of all pushbacks on this initiative. Not just from the Republican right, but from his own party and the independent voters.
Oh, I forgot to add—the Farm Bureau/big agribusiness guys I mentioned? Are political contributors, for sure. Almost entirely to the Republican party.
I mean, it’s pretty easy to track the PAC lists and contributors.
Anyway, a complex issue for sure.
And now for another donut!
Olygal, although I voted for Obama, I have to say I don’t like his pick for Sec’y of Agriculture. Tom Vilsack is ‘Mr. Monsanto’ and is not the progressive, family-farm oriented person I’d like to see in that position.
I have always thought that if we closed off the border than the folks that normally flee to the US would stay and be forced to stay and fix the problems of Mexico.
I thought the same thing about the Mariel boat lift from Cuba in the late 70’s.
Open Cuba to the Imperialist Snorkling Yankee Dogs!
All I need is my swimsuit, flippers, snorkle, mask, CC and passport.
I’m all packed, ready n’ waiting Fidel
“Anyway, a complex issue for sure.
And now for another donut!”
Invest in donuts…Olygal is ON A ROLL !
Obama wants to take care of our demographic problem so we don’t end up like Japan.
skroodle
I have always thought that if we closed off the border than the folks that normally flee to the US would stay and be forced to stay and fix the problems of Mexico.
I thought the same thing about the Mariel boat lift from Cuba in the late 70’s.
**************
It isn’t the wealthy that flee, not the educated or connected that flee. It truly is the downtrodden, poorest of poor. They can no more Fix the problems in mexico than you or I can.
I need a donut and water rights are s
It truly is the downtrodden, poorest of poor. They can no more Fix the problems in mexico than you or I can.
Thanks, desert. That’s what I was gonna say. Mexicans who sneak across the border to come be maids and strawberry pickers are not the empowered sort, is what I mean to say. ‘Serfs’, in other words.
Thanks, desert. That’s what I was gonna say. Mexicans who sneak across the border to come be maids and strawberry pickers are not the empowered sort, is what I mean to say. ‘Serfs’, in other words.
—————————–
Which is why we need to help them fix the problems in their own country. I think Obama could get far more support if he proposed helping Mexicans **in Mexico.**
While fairly liberal, I’m also staunchly against illegal immigration.
I don’t know of any Democrats who are pro-*illegal* immigration. In fact, it seems Republicans usually cater to the Cubans, who largely believe anyone from their country who makes it to American soil deserves automatic asylum. That’s a pro-illegal immigration policy if I ever saw one.
pro-*illegal* immigration Be careful of the word “legal” — remember our esteemed legislators are in the habit of passing laws they have neither written, read, nor understand.
A nutty state senator (Romer) tried to pass a bill that would have given illegals access to Colorado state colleges at resident tuition rates. Fortunately enough democrats broke rank and voted no.
The Cuban wet foot/dry foot policy is bizzaro.
Good point.
“Hence, I think that Barack is going to get the mother of all pushbacks on this initiative. Not just from the Republican right, but from his own party and the independent voters.”
Arizona Slim, I think you are correct here. Are there enough dollars/votes from cheap labor big business on the right and open border Dems on the left (not all Dems by a long shot) to move this legislation?
While there have been enough votes and influence in the past to reduce enforcement of existing immigration laws, there haven’t been the votes to weaken those laws or provide amnesty to the millions that have entered the country illegally since the last amnesty in the mid-80’s. I’m guessing Obama will tread carefully to try to avoid triggering a “pitchfork” moment.
Friend of mine and her husband have started looking at houses in the DC area (no, they aren’t in any hurry). Mostly in Fairfax county in Virginia and Montgomery County in Maryland. She said a lot of what they are looking at are foreclosures and that they are ALL in teribble condition. And we aren’t talking about need new kitchen cabinets and the carpet stinks bad condition, but tons of illegal modifications bad condition. She said that it looked like as many as 15 to 18 people were living in small houses - basements with a kitchenette installed and 5 or 6 bedrooms created, 1 car garage turned into two bedrooms. She said a lot of the rooms were barely the size of our cubicles which would translate to space for a twin bed, a pile of dirty clothes and a pile of clean clothes, and not much else.
Oh, and may I add Harry and David to my list of businesses that may be on the brink. They have a brick and mortar store near my building and I found a gift card for $10 off a purchase of at least $20 stuck in my door. And it is good through June. That is a cry for help. I walked through on Tuesday - still couldn’t find anything worth buying. Since when does a fancy food place not have chocolate dipped glazed apricots? Silly Harry and David.
Our little company gets all of us a Harry and David monthly subscription thing every year and I’ve never been impressed. I’d rather have the cash.
I’m with you. I want cash, baby!
I have been a reader for HBB for about four years and am now considering a purchase. But before you all gang up on me, consider the parameters:
1. I will be building a house, at cost plus a nominal fee from a very reputable builder in Atlanta.
2. We have seen prices fall around 20% already, and I do think we have further to fall, but feel confident the bottom in the area can’t be more than another 15%.
3. Purchasing the lot, in a great area with a short drive to all employment centers, from a bank at about half of the original “value.”
4. I have been a renter for over 10 years, getting married and am sick of the renter lifestyle (moving every 12-18 mos, car being stolen twice from parking garages, stairs etc).
5. The house has appraised at $150,000 over cost, and I will be able to make comfortable payments, will take advantage of the housing tax credits and lock in at a very low rate.
6. I was able to design the house, which is not a tyipical 3 side brick that everyone in Atlanta lives in. It is an efficient floor plan with easily expandable areas as our family grows.
I though I would share my thoughts with the group and take any positive or negative feedback they may bring.
Although I think we will still fall some more, Atlanta is cheapest city for its size that I am aware of. Why build new though. Is it just so you can design it? Can’t you get a distress property for below cost? I guess it depends on how valuable the lot is. You said it was in Atlanta. Thus, for the land to be valuable, I assume we are talking Buckhead, Morningside, VA Highland or Druid Hills. I have seen homes in foreclosure for over a million in these areas, which you should be able to get below cost and some should have livable spaces.
I should have also included Ansley Park. One of my favorite places in Atlanta.
You should be able to get a good deal on construction materials right now. Get as many bids as you can and do your homework on the contractors. There are a lot of good contractors look for work right now.
Are you acting as you own general or are you hiring a general contractor? They both have there pluses but to reduce headaches I would recommend a good general, but your costs go up with that.
Schweg,
I concur with the other posts. Spend time looking for the “right” foreclosure. What it will cost you to build means you’ll be taking an immediate 20-35% haircut when you sign the contract. Why? Because so many homes out there are now priced below replacement cost, so your new home will sink to that level.
Bill
Agreed. As you point out, I meant “replacement cost” when I said “cost.” If the poster insists on new and doesn’t plan to move, interest rates will never be lower so might as well get it done now. If, however, the poster is worried about falling prices (which is likely) and getting the best deal, it seems like the wrong route to take. The claim about 3 sided brick houses is something that applies to the surburbs, as the areas I mention all contain historic and newer custom designed homes. Atlanta has some of the most beautiful home stock I have ever seen, and I travel a lot. If we really are talking about the suburbs, I would be even more cautious, as building a custom home surrounded by the vanilla homes described usually doesn’t get top dollar at resale time. If it were me, in 2010-2011 I would buy a custom home in a historic neighborhood in the city with a big lot, paying below replacement. If the poster must add his or her own touch, they can use some of the savings to renovate.
1) Hopefully they’re making some money off you because in today’s environment, it’s a possibility the builder may go BK. That would be my biggest fear in building a brand new house today.
2) Oh, it could. Inventory looks really high in Atlanta area, no?
3)The land “value” is what you are willing to pay for it.
4) I can understand that, I made the choice to buy a home for some of the same reasons, but realize you still can have your garage broken into, gang signs spraypainted, you’ll get to know your plumber/electrician/carpenter, etc. well unless you’re really handy because stuff breaks. Somewhere I read that you spend about 3% of your house per year on updates, maintenance, repairs, etc, I’ve found that to be pretty close to what I pay.
5) The low rate is nice, the tax credit will help but that’s small beans. You know what I would appraise the house as? Whatever you’re paying for it. And is it in line with other houses on the block? Would hate to be the most expensive house by a wide margin on the block.
Anyway, just some thoughts. If you’ve got the dough (comfortably) and stable job and want the house–well, it’s your money and yours to take. I’m happy in mine, happy I didn’t overpay too too much in 2001, and happy I never expected it to be an “investment”.
If you know you’ll be in atlanta for a while (like the rest of your life), go for it. In a deflating housing market, houses will be worth less than their replacement value, so be aware of that.
I’m in a similar position, 2nd kid coming, small apartment, rented for 8 years now, huge war chest saved up. Do we want to move again to a larger apartment or just bite the bullet and buy?
1) We did some research and decided to invest in high quality storage (e.g. new platform beds with storage underneath), undertake a major spring cleaning and stay where we are. No need to move, even to a larger rental. Given the current rate of price drops and our current rate of saving, we should be able to purchase a nice home outright with cash next year.
2) Build vs. buy used? For the longest time I’ve wanted to build a relatively small, well-built, super insulated home. There aren’t any homes like that in our market. But the way things are going, it might make more sense to buy a used home and retrofit with extra insulation. Builders in our neck of the woods (Pacific Northwest) are being very stubborn so far, and probably have enough fat from the good years to hold out for a couple more years before really slashing prices.
Re: building a house (groundhogday).
You might check out prefab houses. I know of one company named wardcraft and some others that prefab houses in the plains and ship them all over the country. You can specify whatever you want wrt insulation etc. Many communities have now adopted the ‘06 energy conservation code and if you build to that spec you’ll have a tight house.
Where I live, everyone does prefab because our labor pool is tiny and all raw materials would be shipped in. A good prefab is indistinguishable and arguably better than a good stick-built.
Prefab doesn’t really make sense here. But I would go with SIP’s… so in a sense the shell would be prefab.
Schweg…
Sounds like you know what you are doing and are keen on the current market conditions…
There is a lot of intangible personal rewards that go with designing and building your home..Go for It….
RE: take any positive or negative feedback they may bring.
High 4% mortgage rates.
Builder’s desperate for work.
Good buys on building materials (no Chinese drywall!).
$8k government tax credit
$150k mortgage level entirely reasonable for new construction.
Future inflation coming on like gangbusters.
So, if you’re comfortable with your job security and and the future quality of the neighborhood, you got my vote to go for it.
I built new in a 1998/’99 “dead” zone before the equity blast-off in ‘01.
I’d have never got the contractor I did for the amount I paid.
were it any later.
Timing is everything.
“4. I have been a renter for over 10 years, getting married and am sick of the renter lifestyle (moving every 12-18 mos, car being stolen twice from parking garages, stairs etc).”
Do as you wish. But it is a false choice that you have to buy/build or live poorly. Renting does not require dealing with multiple car thefts and/or stairs. I am certain that you can rent a single-level, singe family house with a garage in a relatively stable area from a non-FB for a reasonable amount of money. That is what I do in Metro Phoenix, which sees far more car thefts than Metro Atlanta. And I have not moved in four years, although I liked having that choice.
RE: She said a lot of what they are looking at are foreclosures and that they are ALL in teribble condition. And we aren’t talking about need new kitchen cabinets and the carpet stinks bad condition, but tons of illegal modifications bad condition. She said that it looked like as many as 15 to 18 people were living in small houses - basements with a kitchenette installed and 5 or 6 bedrooms created, 1 car garage turned into two bedrooms. She said a lot of the rooms were barely the size of our cubicles which would translate to space for a twin bed, a pile of dirty clothes and a pile of clean clothes, and not much else.
LMAO…Their description is very Indicative of the physical asset collateral backing the trillions of toxic mortgage paper foisted on the US taxpayer.
Tony Soprano & Co. and every other hoodlum in town will be flippin’ all this unrehabilitated trash like crazy thru FHA/HUD.
Just check the right boxes, Victor…
“No, no, Tony, I’m only the appraiser!” I’m only the appraiser!
My friend bought a house that had been used as an illegal rooming house. He had to rip everything out to the studs to get rid of all the roaches. The inspector marveled at all of the gang graffiti in the basement. There were bunks built into the walls of an extension off of the garage. So sad that people could be compelled to live that way.
So sad that people could be compelled to live that way.
It gets worse. There are slums in LA, New York City, and probably DC where not only are the homes crowded, but they ‘hot bunk.’ In other words, one of those makeshift bunks is for someone who works 1st shift and someone else who works graveyard shift rents the bunk for the other half of the day.
This is the dark side of the USA’s underground economy. But overall, thanks to our labor laws, its far worse in most countries.
Got Popcorn?
Neil
“But overall, thanks to our labor laws, its far worse in most countries. ”
Not in the underground economy it’s not. Once regulation goes beyond assuring the rule of law and property rights and further regulation will just push economic growth into the shadows. If an employer is already breaking the law by not paying overtime how hard is it for him to eliminate breaks, and OSHA standards, etc?
There are slums in LA, New York City, and probably DC where not only are the homes crowded, but they ‘hot bunk.’ In other words, one of those makeshift bunks is for someone who works 1st shift and someone else who works graveyard shift rents the bunk for the other half of the day.
———————–
Funny you should mention that. We have a house in our neighborhood (3/2 in a NICE area!) with anywhere from 15-20++ people living in it. If you drive by at 4:00 a.m., many of them are sitting in the garage or out front because they sleep in shifts because there are too few beds.
Is this really what we want to turn our country into? It’s sad to watch the destruction of the middle class.
Your Pal must be looking at Townhouse foreclosures - yep, each family gets a floor to live on.
Very common in some seedy parts of NoVA (NorthernVa)
Tell them to look in the over 300K market
I know FPSS will blast me here, but if the apricots are dipped in chocolate, do they really need the glaze?
Typical for the Maryland, NoVa, DC area.
This place is full of grossly overpriced, old houses in poor condition that would be a costly mistake if they were in good condition - but nooooo… they are often “sold as is” dumps. From the crumbling rowhouses of Baltimore city to the falling apart Post-War shoeboxes of the suburbs, you have plenty of options, all of them lousy, in this area. You also have to keep a special eye out for other forms of idiocy that will doom a house (well-water if you like to drink MTB, septic systems, heat pumps for those cold winters, etc.)
Too many poorly designed, shoddily built or poorly maintained houses, and too many dolts willing to pay everything they have (and then some) just to “own” the place for a few years until their lown resets.
Very little inflating here in Northern Ohio, except for gun and ammo prices and unemployment, or , increasingly, underemployment. Case in point: my retirement job employer announced the good news that everyone’s wages were reduced only 15 percent effective immediately. The bad news was that 10% of the staff were laid off. Oh well, at least the 10 inches of snow we had a couple of days ago is almost melted; a sure sign of spring is when it doesnt last. One sign of spring that is noticeably absent is the rush of homes for sale signs that sprout up along with the daffodils. Wonder why they’re holding back. Could they be waiting for the obamabuks? Maybe the big move is off for this year. How long will this last?
I live in Cleveland myself and the amount of new unemployment I notice on a daily basis pretty much shocks me. LOTS of small businesses in the Cleve have suddenly closed, and there seems to be an enormous amount of new jobless + rental space on the markets to boot. Out of the people I know personally, it seems like somebody else gets laid off on a near-weekly basis. The college seniors I know that are looking for “real” jobs have mostly given up and are happy snagging secretarial work or even menial labor-type jobs.
RE: except for gun and ammo prices
Decent quality assault rifles up 200% from $500. to $1500.
.223 & 7.62×39 bulk Commie block (Wolf) ammo up 100% (if you can find any)
You’d think instead of formulating plans to accommodate 40 million illegal aliens into this country when it can’t even provide jobs for it’s own citizenry, O’Bama would be kickin’ some azz down at the FBI, to placate the pitchfork carriers.
http://finance.yahoo.com/tech-ticker/article/225823/Mortgage-Fraud-Epidemic-How-the-FBI-Blew-It-and-Why-There’s-No-’Perp-Walks’;_ylt=AoRBcu7SrHhw1HlX3Qe9uQll7ot4?tickers=JPM,BAC,XLF,MHP,MCO,WB,FAS
These worthless mo’ fo’ government employees ain’t worth the sweat off a dirty camel’s azz.
The FBI was DIRECTED by the previous White House and DHS to focus on “terra” and not financial fraud.
It’s going to take time to change that ship’s course. But, first they have to get if off the sandbar where the previous “captain” rammed it.
What does Gone With the Wind have to do with this?
Did anyone else see the Daily Show last night? Nancy Pelosi was smiling in the most inappropriate places. I couldn’t tell if it was some media consultant’s instructions gone wrong, a plastic surgery issue (least likely since the smile did disappear a few times), or extreme nervousness on the edge of hysteria. Anyway, I’d like to see the guy from “Lie to Me” analyze the interview. Never mind the questionable nature of the science behind that show or at least the level of accuracy they attribute to the science. It was very strange.
She is a bizarre woman. The way she jumped out of her seat during Pres. Obama’s address was scary. Her facial expressions and words that come out of her mouth make me afraid, very afraid. As far as I can tell, she knows less than my 12 year old son about how the economy actually works and her ideas are so far to the left and out of touch with reality. I did not see her last night, but am not surprised. To think she is the leader of the House most definitely validates the Peter Principle.
Try to catch it on the computer or one of the reruns of The Daily Show today. I was truely taken aback. It was very disturbing.
Link to the interview:
http://www.thedailyshow.com/video/index.jhtml?videoId=223887&title=nancy-pelosi
Polly,
Her body language didn’t seem to match the message.
The message(s) seem rote.
I watched it twice, as if the first time wasn’t enough!
I showered early this morning - feels like I need another after that display - ish.
Leigh
To think she is the leader of the House most definitely validates the Peter Principle.
Maybe there’s something to that. Dennis Hastert and Newt Gingrich were definitely a few fries short of a Happy Meal themselves.
I won’t argue with you on that.
I think there is something about the job that causes you to go bonkers.
I remember when ever I saw Tip O’Neil I thought he was drunk.
He wasn’t - ?
I believe Tip loved his single malts….
“Thought he was drunk?”
Did you NOT see his nose?
No doubt it is NOT a partisan characteristic. I am an equal opportunity abuser of idiot politicians. I just find it a shame that Pelosi and Palin seem to be the 2 ranking women in the US polical world, both idiots an terrible role models as far as I am concerned. I feel sorry for my wife and daughter…. Not that George Bush or Chris Dodd or Barney Frank did anything for us men.
Maybe Pelosi is simply insane. And 2nd in line to the Presidency, after Joe Biden.
extreme nervousness on the edge of hysteria
I get that impression about her all the time.
She is giddy because she is getting what she always wanted: power.
I think Sarah Palin was/is drunk on the same stuff.
She’s medicated. My guess is Paxil, Prozac or Zoloft … and crack.
“The Smile” is part of the early training…Probably did some dancing, singing or theater in the adolescent/teen days and just carried it over…Same as the GOP Senator/Congresswoman ? from Minnesota…Irritates the crap out of me…
They should have flunked out of any accredited political “Charm School” in America with those freaky smiles.
Just to get, keep and move up in a job, required numerous smiling episodes for most women. And certainly women who wanted power. If you don’t smile at a man, they tell you to “smile more” and other sh@t. But never ever tell another man the same thing.
It could be yrs and yrs of trying not to ruffle feathers just to get ahead.
But watching her makes me uncomfortable and sad that as a woman, there really aren’t too many top level fems that didn’t have to earn that position by sucking up to men. Flattering those delicate egos and such. “yes yes yes you are such a smart, handsome, strong MAN”..coughcough. “why look at those biceps” my oh my.
Don’t get me wrong. I do like men, but to get to the top, the history is that a lot of pandering goes on that men don’t necessarily have to do. Slap on the back, a trip to a hooker joint/stripper joint and suddenly the golf game gets a biz deal.
Doesn’t happen that way, ever for women.
Wish we were alot further along. Maybe the next generation of women.
She told JS, after one of his questions…”I think you’re an economist!” WTF? Just because he asks you a decent question you think he’s an economist?
I love Kristen Wiig’s take on Pelosi on SNL - she gets the smile down just right (and the plastic surgery-”surprised” look):
http://www.hulu.com/watch/4264/saturday-night-live-nancy-pelosi
While I watched the clip it was eerily reminiscent of the Palin send up on SNL. Scary indeed.
Which is worse, bumbling politicians who seek war and are in the pocket of the banks or bumbling politicians who seek peace and are in the pocket of the banks?
The only time I watched her on TV was with the sound off. It was easy to tell that her speech had no substance, by body language and facial expression.
X-GSFixer,
I think you’re taking the wrong approach with Meredith Whitney, protesting your undying love and affection, etc. Women find that stuff boring. I think you need to challenge her, tease her a little. You need to be like, hey baby, why don’t you take a break from all that bank finance gobbledygook and come out to the real country. I wanna see if you have what it takes to hang out with a stud mechanic instead of all those Wall St. hand-wringers. Something along those lines.
WSJ takes down Meredith Whitney:
By DAVID WEIDNER
The Meredith Whitney myth might be in line for a downgrade.
The bearish banking analyst has been the toast of Wall Street and Main Street since Oct. 31, 2007, when she predicted Citigroup Inc. would have to raise capital, sell assets or cut its dividend. Ms. Whitney’s was a gutsy call that got results. Investors bailed. Citi’s chief executive at the time, Charles Prince, resigned two days later. She got death threats.
How good was The Call? If an investor sold Citi the next day, they would have saved themselves a 92.8% loss through Tuesday. Citigroup shares were above $40 the day Ms. Whitney issued her report; they have not closed above that mark again.
“The easiest call I ever made,” Ms. Whitney told an interviewer last year.
….
Well, almost. The Call did not say Citigroup was stuffed with hundreds of billions of dollars in toxic assets. It did not say that multiple banks will fail unless the government intercedes. It didn’t mention Bear Stearns (which she once expected to earn more than $11 a share in 2009), Lehman Brothers or American International Group Inc. It was a call that Citi was losing money and would have to take drastic action to raise capital.
I dunno. The first person to spot a meteor about to strike the Earth can’t be blamed for not knowing how big it is or where it will hit.
Did the WSJ ever bother to do a take down of Abbey Joseph Cohen? No, I didn’t think so.
The WSJ has been the next best thing to “useless” in predicting & understanding the current financial crisis. I don’t much care what they say about people like Whitney.
Yes, I know inflation is supposedly “the debtors” friend, but to me the “the buy now because of historically low interest rates” mentality was part of the part of the problem a few years ago and is no different now.
But the lower interest rates as a rationale for higher prices was always a bit confusing to me… the “how much a month is the payment people” somehow thought it was OK to pay more for the house since the payment would be the same as a lower purchase price at a higher interest rate…
If for example, any of them were offered low or zero percent financing on a car doubt if any offered to pay a higher price!
The president just gushed as he said the interest rates are the lowest since 1971.
What else has been happening in the 1970s? Slow growth, High unemployment, price inflation, massive government spending, and a commodities boom. Gold increased from $35 per ounce to over $800 per ounce.
Let’s see - we had a big stock market crash in 1974, followed by extremely high inflation. I seem to recall a big W.I.N. campaign shortly after that, in 1975. And no less than three recessions within a 10-year period, including the worst since WWII at the time. Then extremely high inflation for a period before we finally came out of the doldrums.
Not too sure I’d be proud of interest rates being the lowest since 1971. That’s not exactly a good precedent.
“But the lower interest rates as a rationale for higher prices was always a bit confusing to me… ”
Even more confusing is the insistence of realtors to buy now before interest rates go higher. When I pointed out that this should mean lower prices down the road I was told no, prices will be higher also (ie, at that point the argument reverts to “RE goes up in the long run”) so it will be a double whammy for me. These clowns want it both ways!
If affordability wasn’t such an issue there could be merit in their argument. As rates rise, people might be scared of an even high rise in rates and rush out and buy putting more and more pressure on prices.
With affordability so low, that just can’t happen. Higher rates have to translate into lower cost.
The “how much a month” seems really illogical to me as well. I can understand the average person being suckered into it but when the officials use it as a way to justify prices it just strikes me as dishonest.
The thing is, when you have historically low interest rates there is really only one way for them to go. That’s especially true when we’re doing everything possible to artificially keep rates low. You just can’t continue that indefinitely.
In the short term, one of two things are going to happen:
1. Rates rise - This will put downward pressure on prices.
2. Rates stay the same or drop - In that case there was no hurry to buy anyway….
They rush to buy because they’re scared that rates will rise. IMO, if I think houses are overpriced to begin with and I’m scared rates will rise, that is a big reason to not buy.
I’m scared rates will rise ??
Getting some leverage at these historical low interest rates could have some long term benefits properly allocated….I know some very smart people who are leveraging up @ 4.75% and then earning safe “After Tax” returns of 6%….
I was saying that if I’m scared rates will rise, I would not rush out and buy a house. I would use that information as a reason to not buy a house.
Like I said earlier, with affordability so stretched, rising rates will put downward pressure on prices.
I’m talking houses here, not leveraging up on other things…
I am talking houses also…The people I speak of are leveraging their homes,
deducting the interest and buying tax free muni’s….
So - anyone else having a problem with posts just not showing up? Even some posts without links just aren’t showing up it appears.
I had a post yesterday that did contain a link, but never showed up - usually these are slow (1-2 hours) but do show up eventually.
Yep, me too. I wonder if Ben’s doing some secret random filtering. It’s hard to believe this is just a software problem.
I love the paranoia on this board.
Winston at MinRec, dude. I thought everyone knew. Oops! Police your thoughts, brothers and sisters. They are watching.
No kidding…I think Ben has better things to do then monitor the blog…
Some days I have 50% or more of my posts get swallowed. I find if you keep them short and avoid mentioning certain words it is more likely to make it past the filter. Also, if you post from a different computer (different IP) than usual it seems to filter you more. I’m not sure how or why that happens, maybe to eliminate the possiblity of mimicking trolls?
Just using the term “cocktail onion” got one of my posts delayed for hours.
Just shoot him an e-mail.
Leigh
AZ Purple Haze..it’s Ben’s mysterious stuff..ya mess up..ya never get out..it gets ya
APM Marketplace this morning reported that individual investors might have a great opportunity to buy some of the toxic waste off the banks. They completely miss the fact that the sale price is likely to capture much if not all of the various subsidies and guarantees the government builds into the PPIP — think of it as a nice way to disguise another direct infusion of Federal Funds directly into the banks!!!! The upshot is that there is no reason to expect the bagholder who ends up with this toxic waste to make any money off of it, as the money will be left in the bank that sold it.
I saw a blog comment from businessinsider.com where an American expat in Hong Kong that sums up the unrealistic views over maximum marginal tax rates and capital gains:
Americans once fought a revolution over less than a 2% effective tax. How times have changed. The US should be more like Hong Kong, which has no capital gains tax, a 15% top income tax rate (about 13.3% effective rate) and no sales tax.
Seriously…a city-state that for decades brokered most of the trade between China and the West, was a British dependency and now has the status of being a special economic zone, and has a long-ago developed infrastructure is being compared to the USA?
We are a nation of 300 million with a wide disparity in income, has ongoing infrastructure development and don’t derive 90% of our economy from the service sector (nor should we). We don’t rely on tariffs from trade transactions between economic giants or havens from environmental and regulatory laws that don’t affect us to fund virtually our entire economy.
Your silly excuses do not justify my top marginal tax bracket being close to 50% (fed + state).
Move to Hong Kong then. It’s not my fault this country is expensive to run, govern and defend.
It’s expensive to run because our government has long since stopped being limited in its powers and scope to the CONSTITUTION.
“The problem with socialism is you eventually run out of other people’s money” - Margaret Thatcher.
It’s expensive to run because America is a mercantilist power run for the benefit of corporations that try to escape the rule of law imposed by the voters who live here.
“Patriotism is easy to understand in America. It means looking out for yourself by looking out for your country”.
-Calvin Coolidge
+1 to lainvestorgirl.
Why is that in tough times, everyone is expected to sacrifice except the gov’t? They just pile on more gov’t programs and employees which remain in perpetuity. Eventually there will be nothing more than the gov’t and then the beast will die.
Limiting the government is simple:
1. Have a constitutional amendment that requires a balanced budget except in times of war or economic distress (as agreed upon by 2/3 of both houses).
2. Do not allow for the private financing of campaigns for office.
Unfortunately, the citizenry would never stand for either.
Some corrections:
Limiting the government is simple:
1. Have a constitutional amendment that requires a balanced budget except in times of war
or economic distress (as agreed upon by 2/3 of both houses).2. Do not allow for the private financing of campaigns for office.
Unfortunately, the
citizenrygovernment would never stand for either.Why is that in tough times, everyone is expected to sacrifice except the gov’t?
Funny to my eye the banks there share holders and bond holders have also not been expected to sacrifice, hell they haven’t even been asked to take the lumps they deserve.
I’d add # 3 to your plan
Law that forbids former government employees from ever working as a lobbyist.
Why is that in tough times, everyone is expected to sacrifice except the gov’t?
Nah - the government is sacrificing - see:
(from last month’s BLS report)
* 663,00 jobs were lost in total
* 126,000 construction jobs were lost
* 161,000 manufacturing jobs were lost
* 358,000 service providing jobs were lost
* 48,000 retail trade jobs were lost
* 133,000 professional and business services jobs were lost
* 8,000 education and health services jobs were added
* 40,000 leisure and hospitality jobs were lost
* 5,000 government jobs were lost
1/2 of edu and health is gov
“Patriotism is easy to understand in America. It means looking out for yourself by looking out for your country”.
-Calvin Coolidge
NSO, this is the same president that once uttered “the business of America is big business”. I don’t believe sustaining America involves securing a few conglomerates at everyone else’s cost.
“I’d add # 3 to your plan
Law that forbids former government employees from ever working as a lobbyist.”
If #1 and #2 are implemented, your Point #3 is already satisfied.
Okay, Julius…since Margaret Thatcher is the only person who can unassailably be quoted here, let me remind you that she also said:
“There’s no such thing as entitlement, unless someone has first met an obligation.”
I don’t see how LAIG is *entitled to benefiting from earning ridiculous amounts of money while living in a capitalist society but yet not be *obligated to support it.
Here’s my two point plan:
1. No more income tax withholding. Cash, check or plastic only.
2. Income tax day is moved from April 15 to the first Monday in November.
NoSingleOne,
Government is not SOCIETY. A capitalist society has no government because all taxes are anti-capitalist. Society is the free interaction among individuals whom trade what they produce for what others produce.
Government taxation is the forced trade of goods you produce for services the government provides that directly harm your interests. Welfare, warfare, government schools, FDA, and 1000’s of other laws a funded with MY money.
Everyone benefits from free exchange, but only the slothful benefit from government redistribution of wealth while the productive suffer.
Comment by Doghouse Riley
2009-04-09 12:17:32
Here’s my two point plan:
1. No more income tax withholding. Cash, check or plastic only.
2. Income tax day is moved from April 15 to the first Monday in November.
That would only work though if a constitutionally-mandated balanced budget were enacted, because as is the government has shown that tax levels are quite independent of spending levels; thus could lower taxes as much as they want without fear of reprise.
The reason Hong Kong can have such low income and capital gains taxes is that all land is owned by the government. The government leases it out in drips and drabs to keep property prices high. What this effectively amounts to is a property tax of about 20% of your income.
Funny all those small government advocates never mention this when they talk about Hong Kong.
BTW that policy was instituted by the British and has nothing to do with the Chinese takeover.
The idea that smaller government means less taxes is basically a myth then. For instance, if you don’t have a publically supported police and fire department, then you have to maintain your own security force and put in anti-fire measures. Similarly, if rents are high in an area with limited land because of legacy property owners or the government, you’re still just a poor either way. At least the government can be affected by votes in a real democracy.
All I know is, in my town police and fire protection are maybe 20% of the budget, tops.
“If voting changed anything they would outlaw it” - Unknown
First thing you must realize is that government does not provide “security”. They attempt to provide “justice” by punishing crimes *AFTER* they occur. You could just as easily have insurance companies that pay private detective fees. All you would need is a judicial system which could fund itself based upon fees placed on the losing party.
It may be far cheaper to simply insure the loss due to fire than to attempt to prevent it. Often water damage destroys more than the fire did. There would still be VOLUNTEER fire departments!
“It may be far cheaper to simply insure the loss due to fire than to attempt to prevent it. Often water damage destroys more than the fire did. There would still be VOLUNTEER fire departments!”
Why is it that I pay $150 to insure my house against catastrophe for a year, but only $20 a month for fire protection? Fire is the most likely thing that is going to destroy my house. The fire department seems far more reasonable than the insurance company.
There would still also be private fire departments (as there are now), hired by property owners and insurance companies to minimize losses.
There is a reason we moved from volunteer and private fire departments to public ones. Check the history.
Gosh, how is it we were able to have roads, police and firefighters back a hundred years ago when income taxes were about 1%? Nosingleone, you will never run out of government programs to justify overtaxation because you hate capitalists, you hate business people, and you would rather see money spent by the government than by the people who earned it. End of story.
Teach your children well! I’m sure they’ll need mo money for this wonderful new plan.
Plano officials consider alternative grading policy for middle schools…
12:00 AM CDT on Wednesday, April 8, 2009
By MATTHEW HAAG
Cheat on a test, get a zero. Turn in a late assignment, the grade suffers.
They are the long-established rules of engagement in school.
But now a growing philosophical shift is putting more emphasis on what students are learning overall, rather than mostly focusing on a grade that can be pulled down by smaller assignments, quizzes, bad behavior or poor study skills.
Plano school officials are exploring a policy for middle schoolers that would not dock grades for cheating or late assignments. And teachers wouldn’t grade some homework at all.
Plano ISD officials had hoped to roll out the new policy next school year, but the changes have been delayed because several teachers raised concerns they wouldn’t be able to hold students accountable, according to documents and e-mails obtained by The Dallas Morning News.
But for some parents and teachers, such policies lower expectations and soften consequences for students who don’t do work.
I live in a *good* school district, and 25% of the kids in our assigned elementary school still couldn’t pass last year’s standardized tests.
If I were a Plano parent, I’d be furious at the school board.
Is the Plano school board trying to raise future Captains of Finance?
When I was in high school, Plano had the highest rates of teen suicide in the state.
Future members of congress too.
Normally I’m against the pussifying of our youth…but I have long thought grades should better represent the knowledge you have as it relates to that class and be less correlated to other things (especially attendance and homework).
I see no reason why a student shouldn’t be able to use his or her own judgement as to what extent he needs to use the available resources (e.g. in-class lessons, homework, etc) to learn the material.
and soften consequences for students who don’t do work.
I don’t agree with this really. If one student understands the material easily (perhaps already understanding it before the class started) his time is better spent doing other things than repetitive problems or whatever. Perhaps that student could spend time practicing the piano and gain some mastery of an additional skill instead of wasting time doing problems that provide little or no marginal value. In this case the “consequences” are only softened because he shouldn’t really be doing that work in the first place.
If another student needs the practice to master the material but refuses to practice, then that will be reflected in the grade from tests. This is the student who should be doing the work.
Teachers/schools too often try to measure things in absolute terms instead of marginal benefit. Each professor may think every student should spend an equal amount of time on HIS class without regard to the overall education of the student. That doesn’t represent reality very well, in which humans have different strengths and weaknesses and need to spend variable amounts of time (for practice/study) on different skills to attain a given level of mastery.
Actually, frequent tests and graded homework are _much_ easier for the students. OK, yes, the teacher has to do more work (boo hoo, you get a big pension, you can grade papers at night). But by forcing students to stay caught up on class material, they do not fall behind so far they cannot recover. In my experience, falling behind in a math, foreign language, or science class is deadly. You quickly reach a point where you can never catch up. I am not so sure about history, English, or other classes.
I think the Plano teachers are trying to get out of grading homework. I hope the school board negotiates a corresponding cut in pay for the reduced responsibilities.
Interestingly, most college profs eschew constant grading of HW and other small assignments in favor of abstract lecturing and larger/fewer tests during the semester. This is the way I prefer to learn a subject, but it takes a specific kind of maturity and discipline that most elementary and/or middle school kids probably do not have.
On the other hand, perhaps switching to such an educational style would promote the development of that maturity.
“eschew….”
Gesundheit
“OK, yes, the teacher has to do more work (boo hoo, you get a big pension, you can grade papers at night).”
Spoken like someone who has never taught. That very fact was one of the myriad reasons I left teaching. That expectation that you only had to work from 8 - 3 and you had summers off, so boo-fricking-hoo. Well, once you add classroom preparation, paper grading, the need to get another job during the summer, lack of respect from peers (think “Those who can, do. Those who can’t, teach”), the fact that you probably won’t ever get that “huge” pension, the low wages and having to cater to and extol the virtues of your mouth-breathing progeny, it sort of loses its luster.
Rant off
Bluprint…I agree totally…I just could not have articulated it as well as you did…Nice post…
As someone who taught high school for three years and is now a university instructor, I have to disagree with some of your basic premises.
First of all, what do you mean by “learn”? Does performing on a test demonstrate learning? If so, when do you give the test? Right after the material is taught? Two years later? 10 years later? There is a huge amount of research out there demonstrating that deeper learning–long term retention, ability to synthesize, apply and relate to new material–requires iterative, ongoing intellectual engagement. Meaningful graded homework is absolutely critical because students need both incentives and feedback on a regular basis.
College professors generally don’t assign much graded homework–primarily to save their own time. Even at the undergraduate and graduate level, graded homework is a very effective learning tool.
Some good points. I don’t disagree that homework is a good learning tool. I think you overlooked my point that in some cases (individuals) it simply may be less (or not) necessary. For example, I have an accounting class (graduate level) that is often a repeat of material I learned in undergrad. I don’t do much homework in that class, just cover the stuff I’m not sure of or for which I need some refreshing. In other classes I do lots of homework intensely to be sure I got it because it is new and/or difficult material.
At the grad level, I find that profs frequently assign one problem to turn in. That seems like a superior alternative to what you find in lower levels where you have to turn in a whole chapter of hw. That way I can do the one for the grade but only do the rest of the homework if I need to. (sometimes I even work haflway through a problem just to refresh myself…like make sure I understand the rules but I don’t necessarily work out all the math, this has been working reasonably well I suppose since I work full time, am a full time grad student, 12 hours last term and the current, and still have a 4.0).
Perhaps some thought should be given to which kids need the homework and which don’t. Why should everyone be treated the same all the time? It’s a waste.
With regard to what you consider to be “learning” and how to measure, those are tactical issues. Look, I’m not saying its easy to measure or that where you decide to draw the line is easy but at some point a line has to be drawn. If you test for a certain level of knowledge then THAT is the bar, whether its weekly quizzes, quarterly tests or whatever. It’s not absolute, but its just a somewhat arbitrary standard. Such is life. We can’t all sit around doing multiplication tables for 20 years to be SURE we have learned it to the absolute possible degree.
The fact still remains that often times grades are given based on things other than knowledge. Many students will have lower grades who have a better understanding of the material than their peers. I’m just saying its a noble cause to work toward eliminating that and focusing on knowledge transfer.
For ME (and I know I’m not the only one), I would have done better in an environment that covered material faster and moved on when it was understood. My problems with grades always came when I was doing the same homework for the nth time (or doing problems for easily understood concepts) because the teacher is teaching to the lowest common denominator. It doesn’t make sense to let some kids starve intellectually to make sure that everyone gets a tiny bite. Let the advanced ones either move on or go do something else for a while that would be a better use of time.
Government schools make students apathetic toward learning and actively discourage independent thought and instead teach students to blindly trust authority figures (realtors, central bankers, politicians, economists, etc).
The most important thing to teach, is “how to learn on your own”. If you depend upon a teacher, then you will always be led around like a good little sheep.
Students are not taught with respect nor are they given any real responsibility. They know that most of their assignments are “make work” and that the classes are being taught by people whom have never lived outside the school environment (went from school, to teaching).
We need to encourage our kinds NATURAL curiosity and give them real responsibilities that require them to learn skills. Everyone I know learns 20x faster when they care about a subject and see how it is relevant to their life. These lessons also stick with them for years.
If they are given real responsibilities then, nothing less than 100% will do. They must figure out how to do things right. Letting a kid get by with “65%” simply undermines their foundation.
My brother and sister-in-law teach high school / middle school and the apathy of the students is the biggest problem. You don’t fix apathy with more tax dollars or by changing the grading system.
Yeah, I largely agree with this assessment. My biggest beef with the way primary and secondary (and heck, even tertiary) education is arranged in this country is that “learning” is whatever your personal teacher or school considers it to be. With some teachers, it’s possible to have a great grasp of the material and still not get the best grades simply because of the way they have designed their exams; conversely, it’s also possible to have little understanding of the material and excel on the exams if you know the teacher’s exam “tricks”.
Hey, folks, got a question for you. I’m looking for a plumbing contractor for the Arizona Slim Ranch. Has anyone here used Angie’s List for finding contractors?
I’ve been asking around for recommendations, and that is taking f-o-r-e-v-e-r. I need to pick up the pace — my old leaky water line isn’t going to stay alive for too much longer.
I haven’t used angies list, but have you tried visiting a plumbing supply shop or local hardware store? Not Home Despot but a local-type place where they know the plumbers that come through the door.
Those guys might be able to tell you who is the most reliable in town who is most expenseive, etc.
Slim,
While I can’t give a referral as I don’t live in your area, I can explain what the proper solution to your problem is. Is your water main leaking?
Mike
The water line between the meter and my house is leaking. And it’s a 1950s-vintage galvanized water line that’s badly rusted. Shortly after I moved in here, the neighbor’s line (which is of similar vintage and condition) ruptured and I had a flood in my back yard.
So, it’s replacement time.
Pretty easy fix…Hardest part is the digging but water lines typically are no more than two feet down…The hard part will be “IF” you must go under things i.e sidewalk etc. Other than that I suspect its a union joint at each end and new 3/4 inch copper line…I would use “rolled” copper by the way…It will be faster and not require any “sweating” of joints…If you want to discuss further ask Ben for my email address and we can discuss…
Sorry for the late response slim, I am remodeling my bathrooms.
Regarding your water main, SC Dave brings a good suggestion using “annealed” soft copper. I went with 1″ type K, silver brazed, covered with a polyethylene sleeve. Doesn’t get any better than that. If you plan on staying put for awhile, type K Cu is the way to go. I would recommend that you increase one pipe size as well. If you need any further help let me know.
Mike
Two real estate brokers in my friend’s ReMax real estate office in the San Fernando Valley just died in the past month or so. Both were youngish, one was 43. One of them had just lost his house, his Mercedez Benz, and was living in an apartment with his wife and four kids. She says all the agents in her office are really hurting and stressed out, they saved no money during the boom and all spent money bigtime on expensive cars and big houses. Everyone in the office attributes the deaths to stress over debts and lower commissions.
All the more reason to live within one’s means.
Did they die from heart attacks?
While channel surfing last week, I saw a woman on the Dr. Phil show sceaming at her children for her failure. At the end of the segment it was revealed that she is a stressed out Realtor. I was shocked to see how much priority these people place on material possessions. It was very sickening to watch the release of her frustrations onto her family and I’m sure thats just a glimpse into millions of households all over the country.
I could imagine your friends were just as stressed out. The one thing I want to see emerge from this mania is for people to quit trying to impress others with their illusion of wealth.
The one thing I want to see emerge from this mania is for people to quit trying to impress others with their illusion of wealth.
It will temporarily become fashionable to be frugal. But look at the Chicago gangsters of the 1930’s. V16 Cadallacs, fancy suits, etc.
I’m sorry to hear these people died. I’m just as sorry to know that families are bearing an undue brunt due to the overconsumption of the bubble. But its not over. At least now not everyone will live off of borrowed home equity.
Ghat… I still remember being yelled at when I suggested, at work, that ‘cash out’ loans and HELOC’s be banned. I didn’t realize that even the KIA set were using HELCO funds for semi-local vacations (within driving distance) and another subcompact (or better yet, a full size truck). Now those same people ask “when will it get better” and before they take a breath they’re being *very* agressive in that the only correct answer is we’re near the bottom as their Realtor ™ friend told them so… I smile… I do not point out that cash out loans didn’t have to become illegal; the market took care of that.
Got Popcorn?
Neil
Commission Stress Kills —
makes note for American Psychiatric Association (APA), Diagnostic and Statistical Manual of Mental Disorders DSM-IV-TR and Vulture Buyers sitting on the Fence
Where did my post go. Anyway, two sort of young real estate agents in (one was 43) just died in my friend’s San Fernando Valley real estate office. All the agents believe it was due to stress over debts and lower commissions. One had just lost his house and Mercedez Benz.
Geez, well at least they died of natural causes, and not by gun fire like some of these crazies lately who lost their job or houses.
Hoo boy. I think I’m done trading ETFs, if SRS ever goes back up to a point where selling it makes sense. FAZ is down almost 20% today on the Wells Fargo news. I sold mine yesterday afternoon. What dumb luck. SRS has been dragged down along with it though. Sigh.
In local real estate ‘news’, there is a new-ish glossy (free) magazine here called Michigan Avenue. The current issue features the splendid 4500 sq ft Streeterville apartment of a 31 year old trader. He bought 2 adjacent units in 2005 and had them gutted to create one glorious tribute to urban Modernism. Not one word in the entire article about how far underwater he is.
Eh, I’m crabby today. It’s my birthday. Double nickels. Not happy-making. And then the market goes wild on the WF 1st qtr report, making me even more crabby. Someone say something to cheer me up, please!
In local real estate ‘news’, there is a new-ish glossy (free) magazine here called Michigan Avenue. The current issue features the splendid 4500 sq ft Streeterville apartment of a 31 year old trader.
Haven’t seen that one around — but you have to wonder about the brainiac who decided to launch yet another expensive ad-driven magazine in the past few years.
Is the similarly glossy, free, and vacuous CS (Chicago Social) magazine still alive and kickin’? Sounds like they occupy a similar niche. Last time I looked, CS had been radically slenderized by declining ad revenue.
One of those mags just started here in Tucson. Name’s BizTucson. First issue was heavy on fluff pieces and pretentious ads for overpriced geegaws. I don’t give this mag more than a year.
‘Michigan Avenue’ is chock full of glossy full-page ads. It had a little bit of substance, if you consider articles on Chicago power players substance. Mayor Daley is on the cover this month.
Come to think of it, I haven’t seen ‘Chicago Social’ around for a while. Perhaps this is its successor.
I’ll add my two cents. There’s a new magazine in Atlantic City: The Boardwalk Journal. Inaugural issue came out in February and had Donald Trump on the cover. Worse than that, its Real Estate columnist is the deposed elementary school assistant principal about whom I’ve been spreading the word on every “Rate My Realtor” site I can find on the web. I must be doing something wrong. Dude makes a monthly appearance on local Christian radio station which I e-mailed about his history. Well, he was on the station again tonight, going on about how “It’s different at the shore. . . . We actually have shortage of inventory. . . . A ‘For Sale’ sign on every other house really indicates a healthy market,” etc., etc. Go figure.
PS: Happy Birthday!
The nice thing about being over 54 is you can sleep with someone a third of your age and not go to jail.
LOL! You truly ARE Bad, Chile. In a good way.
That’s assuming you can sleep with someone a third of your age.
+1 BC
Happy Birthday!!
I’m getting slaughtered on SKF, so I share your pain. I view this carnage as a temporary situation, however.
Wow, SKF @ ~$75? Well, FPSS and crew did say they might throttle it good. But how much further? Is the jig up? Rode FAS up from Tue. close - that’s enough - these swings are something else.
The market is trading higher and higher on lower and lower volumes. The implication is obvious.
Happy Birthday, Elanor!
Not to me. I don’t have your knowledge. I think you often use the wrong measuring stick to measure what’s obvious, etc.
Can you help me understand the implications?
Fewer and fewer dollars are making the market move = bear market rally.
thanks sir!
I forgot to mention that tomorrow is Good Friday. (exchanges are closed.) Half the traders and market-makers probably took today off.
It’s very easy to move the market large amounts in such light trading. It’s not indicative, IMO.
It doesn’t make me happy to have others share the pain, but thanks for the birthday wishes!
Happy Birthday, Elanor. And many happy returns of the day.
Happy Birthday!
Here, I shall sing for you:
*sings, loudly and prettily *
Happy Birthday to yooooooo, Happy Birthday to yoooOOOOOOOO, Happy Birrrrrthdayyyyy, dear Elanorrrrrrr, Happy Birthdayyyyyyy toooo yoooOOOOOOOOOO’
*that last part was delivered with a rising crescendo full of grace and increasing volume, like as if a wolf or else a velociraptor was bellowing it energetically, out there in the forest *
And the best part here is, you didn’t have to hear this with your ears! ‘Cause I was lying about the ‘prettily’ part.
Sigh.
Well, maybe I don’t sing that bad. I hope.
Anyway, I hope you have a good day and get good presents and have a delicious cake. And remember—it’s okay to drink wine allllll day long on your birthday. So, whatchoo waiting for? Go, go!
Are you going to jump out of the cake for her?
Yeah, wearing nothing at all too like Marilyn Monroe supposedly.
How about just two strategically placed frogs?
Plastic ones, like you can get at the Dollar Tree, ’cause if they were live frogs they’d probably leap off in consternation when I busted out of the cake, and boy! Wouldn’t that be super embarrassing! Jeeze.
When I was little I actually had the desire to be a cake popper-outer one day. Only I had it all planned out—I was going to refuse to get out of the cake and instead just sit in there and eat it. Just eat and eat and eat cake, from the inside, like a happy termite.
My reasoning was, they wouldn’t want to squish or otherwise damage the frosting, so they couldn’t forcefully haul me out, but only sit outside making idle threats while I stayed inside the cake and gorged myself silly.
And by ‘little’ I mean ‘last week’.
And I’d bring a gallon of milk with me, because cake without milk? Nohow!
And of course a pillow, so I could take naps and recuperate periodically throughout the gorging process.
What? No. No blanket. See, because I assume that the frosting would act as insulation, and keep me nice and cozy warm the whole time, until I ate it the whole thing, at which point I would have gigantothermy to prevent any possible chill.
That was beautiful, Olygal. Especially when the wolf and velociraptor joined in.
My college roommate sent a great card that said eight glasses of water a day will make your skin look younger, but eight glasses of wine a day will make you not care how you look.
LOL
That was beautiful, Olygal. Especially when the wolf and velociraptor joined in.
Yes, well, I have skills, you know.
*nods soggy head modestly *
In fact, I often sing ‘The Butterfly Duet’ from ‘Madame Butterfly’ and I do it great. Now, some might question how I can sing a duet, but like I say, I got the crazy operatic skills.
*makes another modest head nod *
Why, I ’bout made a poor gawking man drive right off’n the highway the other day, he was so fascinated!
Obviously a Puccini fan, which is what I like to see in my fellow drivers.
FAZ now down 36%. And SRS 23%. Absolutely unbelievable carnage for my positions. Nevertheless, I doggedly bought more FAZ today @14.3 and 12.5, which will be my last purchases. Also added IYF puts (Aug 30) @2.95. Surely by August the truth will be out?
5 working days to go before April opex. I’m holding a bunch of SPG Apr 35 puts that will lose me in the five figures if they expire worthless. I’m making one final play today and quadrupling down @25 cents a pop if it hits in the next 10 mins.
Did not hit my bid for SPG Apr 35s.
FAZ went down to $10 + change. I’m buying more, damn it… Let’s just call it dollar cost averaging. HA! The volume today was suspect. My tinfoil hat told me that JPM is naked short selling it into oblivion… So what will I do? Buy more! Doomed I tell you, doomed!
You can’t sit on triple leveraged ETF’s - Get in, get out, preferably same day. Almost missed my FAZ sale yesterday - counting my lucky stars.
Happy Birthday, Elanor!!!
anybody have a good system on how to read blogs like this throughout the day? Ideas on how to differentiate new posts verses ones you’ve read?
That would be nice. Generally that’s what the forums are supposed to be for, but the problem there is that all new posts show up at the bottom, thus you don’t get the proper “branching” of discussions like you do on the regular blog.
There are other blog schemas that do both - all the discussion “branches” are hyperlinks, and then naturally the un-followed hyperlinks show up a different color. E.g. yahoo stock message boards are this way. It’d be a big change though of course if Ben wanted to transition.
The downside to that scheme though is that you can’t easily scan through the text of the responses like this scheme. So each has pluses and minuses.
We need better software to do this. We need to be able to filter posts by thread/subthread and/or times posted. Some day if I get time, I’ll try to put something together.
I’d like to be able to check posts as “read” and thus have only unread posts (in any thread) show up the next time I refresh the pages. That way fresh replies to previously read posts would instantly show up.
Ben said there is a wordpress plugin that is supposed to allow you only view new posts, but when he installed it it didn’t work well.
I imagine it’d be possible to create a firefox plugin that would alter the color of posts that are new since the last visit to the site. I’m not sure what resources are available for storing the last visit, though…perhaps I’ll put my copious free time to use once I’m done with my stupid taxes…
Every comment has a unique comment ID; therefore, it should be very easy to create a program that will parse the blog and keep track of unique comments, users, etc.
Perhaps I could write a nifty little program to do that. It could even check the blog every couple of minutes and notify you of replies to your own posts.
That would be great, VTD!
Glad to know I am not missing an easy way to accomplish. I have been stumbling along using the timestamp. If I quit reading just before 10:00 am, Later in the evening I execute a browser FIND 10: FIND 11: FIND 12: FIND 13: and so on.
So Wells Fargo makes a big profit. Did the new accounting rules make this possible? Very suspicious IMO.
“Very suspicious”
LOL, thats an understatement. They valued their Toxic assets at imaginary future values that will never happen. That and they got 25 Billion from TARP.
I would like the Governemt to give me 25 Billion, I’ll show a 24.9 Billion Dollar profit then turn the reighns over to the next guy. We’ll all be rich I tell ya, rich, rich, RICH!!
I’m curious about that as well. On the one hand - Wells Fargo supposedly didn’t want the TARP money (they were one of nine banks forced to take it), so conceivably they are validly profitable.
On the other hand though that may have been smoke and mirrors, and they really did want and need it, and indeed the FASB change is covering up losses that are waiting in the wings there. I seem to recall that Wells Fargo was one bank that had lots of potential subprime etc. losses in the pipeline, but I may be getting them mixed up with WaMu.
FWIW - about 2 years ago I made a note to myself that Wells Fargo appeared to be one of the stronger banks, and to buy WFC when it looked like things had shaken out. I wish now I had already made that move.
packman, I had made the same note about WFC, and GS as well.
The thing is, I don’t actually believe that we’re done with things being “shaken out”.
But I probably should have made a mental note to trade them relative to the rest of the pack on the bear-market rallies during the interim.
NEW YORK (Dow Jones)–Wells Fargo & Co. (WFC), expecting a strong $3 billion first-quarter profit, illuminated Thursday the benefits of its Wachovia Corp. acquisition and a resurgence in its mortgage business.
Wells Fargo sought to convince investors Wachovia was a catch: It said Wachovia’s legacy businesses, which last year were beset by mounting losses from adjustable-rate mortgages, were profitable in the first quarter. Wachovia’s contribution lifted Wells Fargo’s earnings to a record.
NEW YORK (Dow Jones)–Wells Fargo & Co. (WFC), expecting a strong $3 billion first-quarter profit, illuminated Thursday the benefits of its Wachovia Corp. acquisition and a resurgence in its mortgage business.
Wells Fargo sought to convince investors Wachovia was a catch: It said Wachovia’s legacy businesses, which last year were beset by mounting losses from adjustable-rate mortgages, were profitable in the first quarter. Wachovia’s contribution lifted Wells Fargo’s earnings to a record.
Now and forever more - this portion should include a statement as to whether or not the FASB rule change was or wasn’t applied w/regards to said profits.
(I’m sure such details are included in the bowels of the detailed numbers to come out - it’d be nice though if it was included in the headline summary, just so we all know whether or not to believe them).
New accounting rules and that little divvy cut not too long ago…
Manufacturing is so yesterday. We make our money by printing it, and the details of distribution are a government function
Bank of One has spoken
-jesse
You’d be mighty profitable too, if the govt were covering your losses with rules that let you value assets at whatever you want.
Also, it doesn’t hurt if they were willing to throw the currency under the bus just to lower your cost basis.
It’s easy to be profitable when you’re a bank.
CA Foreclosures About to Soar
http://www.fieldcheckgroup.com/2009/04/07/4-7-ca-foreclosures-about-to-soar/
Thanks for the link.
Uh oh.
I notice that page, bad grammar and spelling aside, still breaks out numbers for IndyMac, Countrywide, and WaMu. Perhaps Countrywide and WaMu now refer to those units within BofA and JPM - if so then why break out JPM separately? I had thought IndyMac was sold off now, but I see from Wikipedia that apparently they’re still wholly-owned by the Fedguv.
Watch out if Megabank, Inc is you landlord, as they foreclose on people who are current on their rent payments.
California Foreclosures Jeopardize Renters as Banks Seize Homes
By Ari Levy and Dan Levy
April 6 (Bloomberg) — Laura Hecox was baffled when an officer from the San Diego County sheriff’s department came to her home in February and said she was being evicted. She hadn’t missed a rent payment on her four-bedroom house since moving there a year-and-a-half earlier.
“They told me to leave, to get a few things together,” said Hecox, 37, who lives with and supports her four kids and mother. “I got booted out just like that.”
Hecox didn’t know the home she was renting in Chula Vista, California, about 10 miles north of the Mexican border, was in foreclosure because her landlord was a year behind on mortgage payments. The new owner was a group of investors led by JPMorgan Chase & Co., the third-biggest U.S. home lender.
BTW, I thought JP Morgan was an investment bank. Since when are they a home lender?
NEW YORK (AFP) – Sweeping layoffs of government employees are needed to prevent New York going bankrupt, Mayor Michael Bloomberg said Thursday.
Bloomberg, who is in tense negotiations with municipal workers’ unions, said an extra 7,000 jobs would have to go unless major reductions are made in employee benefits.
“We cannot continue. Our pension costs and health care costs for our employees are going to bankrupt this city,” he said in comments broadcast on NY1 television.
Whoops even the gov jobs are falling off a cliff. Yep inflation is right around the corner.
The Pentagon sponsored a first-of-its-kind war game last month focused not on bullets and bombs — but on how hostile nations might seek to cripple the U.S. economy, a scenario made all the more real by the global financial crisis.
The two-day event near Ft. Meade, Maryland, had all the earmarks of a regular war game. Participants sat along a V-shaped set of desks beneath an enormous wall of video monitors displaying economic data, according to the accounts of three participants.
“It felt a little bit like Dr. Strangelove,” one person who was at the previously undisclosed exercise told POLITICO.
But instead of military brass plotting America’s defense, it was hedge-fund managers, professors and executives from at least one investment bank, UBS – all invited by the Pentagon to play out global scenarios that could shift the balance of power between the world’s leading economies.
Their efforts were carefully observed and recorded by uniformed military officers and members of the U.S. intelligence community.
In the end, there was sobering news for the United States – the savviest economic warrior proved to be China, a growing economic power that strengthened its position the most over the course of the war-game.
The United States remained the world’s largest economy but significantly degraded its standing in a series of financial skirmishes with Russia, participants said.
1. My guess is that they are preparing how to deflect blame when things collapse. Don’t hate your beloved gov and the financial elite in this country, it’s those darn chinese that have crippled us.
The DOD has recognized for a long time that technology and economics have as much to do with winning and losing conflicts, as basic military power does.
Wargaming has been around for a long time. It’s good for determining possible strategies and capabilites, and for outlining options for different scenarios.
Too bad the investment banks and hedge funds didn’t “wargame” their strategies.
Too bad the investment banks and hedge funds didn’t “wargame” their strategies.
Oh I think they did wargame their strategy and that they are winning.
+1!
DETROIT – Detroit Public Schools would close 23 schools and lay off 600 teachers in a proposal released Thursday that would consolidate facilities in a shrinking district facing a projected $303 million deficit.
Poof more jobs and pensions lost.
This country will soon be willing to work for a bowl of rice and a cardboard house like other good third world workers.
600 teachers to save 303 million… that amounts to $505,000/year per teacher. I know if I was given $505,000 I could build a class room, teach 120 students every day while providing all of their school supplies and take home a $450K salary, the second year the salary would be $475K because the fixed costs of building a new building the size of a traditional classroom + desks, chairs, and bathrooms would be paid off.
With a classroom size of 30, this is a cost of $17K/student. At that price every family with two kids could afford their own private teacher making $34K/year (average teacher salary around here).
I think they were closing some schools which also means administration heating maintenance ect.
The excerpt posted on HBB doesn’t specify that the reductions specified would -eliminate- the $303m deficit. I’d hazard a guess that it almost certainly doesn’t.
If in fact there were a plan to eliminate $303m in costs and only 600 teachers were laid off, I would call that a major victory, since well over $200m would have to come from the parasitical non-classroom part of the budget.
Why so glum?
Today was a great day for the banks and the boyz, and what’s good for them is good for you.
The Pentagon sponsored a first-of-its-kind war game last month focused not on bullets and bombs — but on how hostile nations might seek to cripple the U.S. economy, a scenario made all the more real by the global financial crisis.
In case my first post didn’t make it
My guess is they are really planning on how to deflect the blame when the Titanic hits the oncoming iceberg. And then we’ll be off to the protectionism race and buidling more weapons to stimulate the economy.
Do they have a war game for a scenario in which a nation’s own citizens cripple their own economy?
“on how hostile nations might seek to cripple the U.S. economy”
Haven’t we already demonstrated that we’re more than capable of doing that ourselves? We don’t need assistance from “hostile nations” to get that Mission Accomplished.
“on how hostile nations might seek to cripple the U.S. economy”
If I were a country looking to destroy the competition. I’d lend them a bunch of money and bribe their elite to bribe the politicians to outsource nearly all of their manufacturing and technology jobs. Then I’d stop lending them money and sit back and watch.
Did they model that scenario?
I didn’t think so…
“…outsource nearly all of their manufacturing and technology jobs.”
You couldn’t have achieved that without the help of the green lobby and US environmental laws, which made the forced outsourcing of dirty US industries a fete accompli.
How about a nice game of chess?
LOL. Nice WG reference.
A strange game. The only winning move is not to play.
Later. Right now lets play Global Thermonuclear War.
“My guess is they are really planning on how to deflect the blame when the Titanic hits the oncoming iceberg.”
Sheesh. And you guys say I’m paranoid.
“…but on how hostile nations might seek to cripple the U.S. economy, a scenario made all the more real by the global financial crisis.”
Why invent a straw man out of hostile nations when our own financiers and top government officials who oversee the financial services sector have so successfully demonstrated their ability to do the job without any external help?
It’s all good now!
Had responsibilities to take care of.
Got back just after the bell.
Guess, we’re out of the woods now.
Close one, but we pulled through!
We got one for the gipper.
Blue skies
Smiling at me
Nothing but blue skies
Do I see
Bluebirds
Singing a song
Nothing but bluebirds
All day long
Never saw the sun shining so bright
Never saw things going so right
Noticing the days hurrying by
When youre in love, my how they fly
Blue days
All of them gone
Nothing but blue skies
From now on
Happy days are here again
The skies above are clear again
So let’s sing a song of cheer again
Happy days are here again
Altogether shout it now
There’s no one
Who can doubt it now
So let’s tell the world about it now
Happy days are here again
Your cares and troubles are gone
There’ll be no more from now on
From now on …
Happy days are here again
The skies above are clear again
So, Let’s sing a song of cheer again
Happy times
Happy nights
Happy days
Are here again!
The First Great Depression had much better music than this one! 100 years from now, nobody will listen to the hip-hop garbage we’re producing now.
Summers: Economic free fall will end in months
MarketWatch
The economic “free fall” will come to an end in the next few months, President Barack Obama’s top economic advisor said Thursday.
“We are confident that the measures put in place mean that this sense of free fall we’ve been living with will be arrested in the next few months; that will set a platform for expansion to come,” said Lawrence Summers, director of the White House’s National Economic Council in a wide ranging interview at the Economics Club in Washington.
I think this is called, trying to set a floor for an expected drop.
I made my bets today.
Hoenig Says Few Big U.S. Banks to Need More Bailouts
(Bloomberg) — Government stress tests of U.S. banks’ ability to withstand a deeper recession are likely to indicate that most don’t need more taxpayer money, Federal Reserve Bank of Kansas City President Thomas Hoenig said. 15:09 EDT
Global Stocks, Oil Gain as Treasuries, VIX Fall; Banks Advance
Bloomberg — Global stocks rallied, driving the benchmark index of investor anxiety to a six-month low, as better-than-estimated earnings at Wells Fargo & Co. and speculation American banks will pass government stress tests boosted confidence in the financial system. Oil gained and Treasuries fell.
“The worst is behind us,” said Alan Gayle, a Richmond, Virginia-based senior investment strategist at RidgeWorth Capital Management, which oversees $60 billion. “We’re working our way through the credit crisis and that’s why the market is cheering.”
Hoenig Says Few Big U.S. Banks to Need More Bailouts
Bloomberg
Government stress tests of U.S. banks’ ability to withstand a deeper recession are likely to indicate that most don’t need more taxpayer money, Federal Reserve Bank of Kansas City President Thomas Hoenig said.
Retailers’ sales may signal shopper confidence
NEW YORK (Reuters) - Many U.S. retailers posted smaller-than-expected sales declines for March in a sign that shoppers may be regaining confidence to open their wallets after more than a year of recession.
The U.S. trade deficit tumbled in February to the lowest level in nine years as collapsing demand from consumers and companies reverberated around the globe.
The gap narrowed to $26 billion, less than anticipated, from a revised $36.2 billion in January, the Commerce Department said today in Washington. Imports plunged for a seventh consecutive month, leading to declines in the deficits with Japan and China, while exports climbed from a two-year low.
The shrinking deficit is another piece of evidence that the U.S. economic slide eased in the first quarter; Morgan Stanley economists now project gross domestic product dropped at a 5 percent annual pace, less than their previous forecast of 5.9 percent. At the same time, dwindling demand for imports may be bad news for nations that depend on American consumers for their own growth.
Let’s see retail sales dropped less than expected but imports plugned much more than expected. Things that make you go HMMMM? Is this really another sign that the US economic slide has eased????? People don’t have money to buy stuff so this is good news???
Pretty grim recap from a Retail Industry magazine:
http://www.shoppingcenterbusiness.com/articles/MAR09/story1.shtml
I read this on MarketWatch:
“The politically sensitive deficit with China dropped 31 percent to $18.9 billion in February, but remains the largest trade gap with any country. America’s deficit with Japan fell to $2.2 billion, the lowest level since December 1984. The deficit with Canada, America’s biggest trading partner, dropped to $1.82 billion, the lowest level since December 1998.”
Wow the Japan # is scary. Those are pretty dramatic declines. Basic accounting 101 tells me that there is going to be a lot fewer US dollars available for buying our debt. I would also note oil and gas inventories are still building clearly telling me industrial output is still declining.
Speaking of the DOW & S&P, if they really do discount the future by about 6 mo. then what was it telling us in early March 2009? Is August going to be the bottom of the curve in employment, housing market declines?
It’s remarkable for the markets to rally like this heading into a long weekend. It’s probably a great opportunity time to buy or sell.
It’s a fine line between stupid and clever.
Funny you should say that!!
After hours bought 200 SRS at 32.91
and ___________ 50 SKF at 65.87
stops at 30 for SRS
stop at 63 for SKF
I have no other open position
NEWTON, Mass. (AP) — Shares of Hospitality Properties Trust fell nearly 20 percent on Thursday as the company suspended quarterly dividends for the remainder of the year.
The Newton, Mass.-based real estate investment trust said it expects its 2009 distributions to be at least equal to the minimum amounts required to remain a REIT for federal tax purposes. REITs are required by law to distribute the equivalent of 90 percent of their taxable income as dividends.
The company said severe limitations on the availability of capital to meet debt obligations prompted the suspension of dividends.
GREENVILLE, S.C. – Shriners hospitals, which have provided free care since before the Great Depression, are considering closing a quarter of their facilities as donations stagnate, costs increase and the charity’s endowment shrivels.
The group’s director says it’s the only viable option.
Officials at the Florida-based organization say it is siphoning $1 million a day from its endowment to balance the budget for 22 hospitals in the U.S., Canada and Mexico. Meanwhile, they say, that fund has fallen to $5 billion from $8 billion in less than a year because of the sputtering stock market and a charitable giving slump that has hurt philanthropies nationwide. The fund has been declining since 2001. The group will vote this summer on the closures
just in time for the wave of uninsured.
The Nation The Nation – 2 hrs 15 mins ago
The Nation — Two days ago I wrote about introducing a new kind of scale-based antitrust. Before exploring some other structural reforms, I want to encourage people to join a nationwide demonstration of support for some basic principles of structural change in the banking sector.
On Saturday, 60+ demonstrations will be held around the country, demanding structural change in the banking sector. The group organizing the demonstrations, a New Way Forward, started less than a month ago, but is already approaching 10,000 members. A New Way Forward embodies the logic of the most thoughtful economic thinkers in the country, translated into clear, direct language and action.
We/they support a Nationalize, Reorganize, Decentralize platform, pointing to Krugman on the need for temporary nationalization, Simon Johnson on the need for removing current leadership in the banking sector, and Mike Lux on the importance of creating a new, decentralized private market, with new banks run by new people. Any bank that’s “too big to fail” means that it’s too big to exist in a free market.
Anyone know anything about this group.
www
anewwayforward.org/demonstrations/
The Nation — What seems most immediately alarming about the bailouts and the $787 billion stimulus, write Leo Hindery and Donald Riegle in the April 20 issue of The Nation, are the countless indications that the rescue package still falls woefully short of what is needed to confront the emergency economic conditions we face.
With the US economy having contracted at a stunning rate of 6.3 percent in the last three months of 2008, a quarterly performance rivaled only four times since the Great Depression and getting worse in ‘09, a growing unemployment rate, now at 12 million people, and foreclosures up 81 percent, many economists are arguing that this current bailout is bound to fail, inevitably pushing perhaps millions more Americans over the brink of financial collapse.
The other central problem with Obama’s bailout from the point of view of experts like former IMF chief economist Simon Johnson, Joseph Stiglitz, Paul Krugman, James Kwak, George Akerlof, and Robert Shiller, is that recovery will fail unless America breaks up the financial oligarchy. The solution is to have the government temporarily take over failing banks, break them up and sell them off in the private markets. This is not the current plan.
I believe the bulk of the supernova bank failure downside risk is already removed by the country roads leading to the Chamber of Commerce who is hosting the After Hours meeting… its already localized. Suffering rural bank failures is no longer an option.
double and triple astro-turfing is bad form in the new and improved world.
Only 53% of American adults believe capitalism is better than socialism.
The latest Rasmussen Reports national telephone survey found that 20% disagree and say socialism is better. Twenty-seven percent (27%) are not sure which is better.
Now I’d like to see a survey of how many can define capitalism and socialism.
I have an idea.
Those that think socialism is better can all live together and live under socialist rules and those that believe capitalism is better can live together and live under capitalist rules.
At the end of five years, migration between the two will be allowed. It’s not hard to guess where most of the migration would be. Just need to look where most of the world wants to migrate today, the U.S. (yes, were not totally a capitalist nation but much closer to it than most). I don’t see people trying to get into Cuba, Venezula or the former Iron Curtain when it existed. The U.S. didn’t become the most powerful and prosperous nation in the history of planet earth by being a socialist country.
Socialist is what countries become when they are preparing to die.
No I think countries become socialist when wealth gets concentrated into fewer and fewer hands. That’s why venezuela went socialist.
Last I checked plenty of foreigners want to get into Europe which can be described as a group of socialist countries.
So, then nothing changes with socialist countries, the wealth and power is still concentrated with few people. It seems the common people have just been duped except they are more likely to live in an authoritarian state.
When citizens of nations have to resort to confiscating wealth from the more productive to support themselves, atrophy has set in and the nation is on the road to ruin. It’s like your adult kid who never gets a job or moves out of your house. Nothing good is going to become of that kid.
Primarily only because of proximity, given a choice my bet would between the U.S. and Europe the majority would chose the U.S.
Note I in no way support welfare, but I definitely support works programs to keep the unemployed from becoming destitute and criminal.
I don’t support Gov owning the banks, but I do support Gov breaking the banks into tiny pieces. Too big to fail is Too big for capitalism and free markets. Monopolies destroy capitalism and lead to facism, which is what we are moving towards.
I support the gov owning or highly regulating (like a utility) highways, internet, cable, phone lines, electric lines, rail lines. Then open bidding for all to see on the internet will determine who uses these resources. No entity can consume more than 10% of capacity, and they can’t resell it once they bid on it.
I support gov run health care, Medicare works. Medicine for profit is expensive and less effective. Healthcare should come with limits based on cost benefit analysis. If you want more than you can pay for it or buy insurance but the basics and preventitive care are covered. This will save us money and improve our health in the long run.
I support SS as an insurance program to make sure that anyone who has worked can be sure they will have basic food and a roof if say they get sick or the stock market collapses after they retire, not much more. You want more start saving.
I support gov run schools, they are Americas melting pot. You want to have religious or ethnic education, do it after school or on the weekend.
Many think that makes me a socialist. Democracy and dictatorship are completely separate issues from socialism and completely free capitalism.
Agree with you on that one.
I’ve always asked that those who advocate higher taxes start by voluntarily paying in more than what the law requires. Be good boys and girls and set the example for us heathens.
Funny how it never seems to happen.
“Cuba, Venezula or the former Iron Curtain when it existed”
Except for Venezuela, all dictatorships except in name.
They pretended to have socialist economies.
They never tried very hard to pretend that but a few, none had any power.
Spain, France… wonderful places.
I have an idea.
Those that think socialism is better can all live together and live under socialist rules and those that believe capitalism is better can live together and live under capitalist rules.
We already have this in the PNW. OR is the socialist state and ID is the capitalist state. When you drive from OR into ID you notice that the unpainted run-down farm houses with rusty klunkers parked out front transition into well-kept farm houses with new shiny cars in the driveway.
Observer, Milton Friedman long ago pointed out the differences between North Korea and South Korea, East Germany and West Germany (before unification), and Hong Kong and China.
But there are still plenty of idiots trhiving off of capitalism who want America to become less free. I agree with you. Those idiots should move to North Korea and allow us to enjoy liberty.
I’d like to see a list of the questions. One can get any response he likes if the questions are carefully tailored.
Ahhh…. cash is taking a beating combo
I think the problem is that American flavored capitalism is economically repressive to much of the population, especially the younger part. It will take a lot of propaganda to keep the status-quo. I will say, so far it’s worked pretty good.
Recently, much of my thinking has involved antitrust policy. Instead of imposing after-the-fact regulations on corporations, why not pass a new antitrust policy that limits the size to which companies can grow? Current antitrust law limits a variety of anticompetitive behaviors, like price fixing, and is focused on consumer welfare and market manipulation. But antitrust could become a tool for limiting size qua size, not just size when it becomes anticompetitive. It would require a major overhaul, but in the long term a size-based antitrust policy might actually be simpler than the complicated and often unworkable measures of market share and examinations of inchoate consumer needs.
Why? Because economies of scale, which work well for creating widgets, are very dangerous when it comes to influencing political decision-making. Political power amassed by concentrated financial power leads to serious distortions in political decision-making, so that Congress can pass absurd, non-responsive legislation that gives illogical copyright extensions, dangerous environmental licenses, and tax breaks to those who least need it. Antitrust law now limits anticompetitive behavior as between companies within an industry; it could limit corporate power in the political sphere by creating a default maximum size.
I just got a call from a friend that he is being laid off from a well known high tech company. they are trimmimg 5000 people within the next 12 months and all in the US. Funny how the stock makrket roars on Wells Fargo surpise earnings. I do’t believe all these Financial earnings. They are cooking the books with the help of the government. Where are they achieving these revenues?
From what I read
WFC wrote of 6.9 billion last quarter, this quarter they wrote of 3 billion. Is there any chance that things have improved that much, I think not. Mark to Market has been removed and this is fantasy accounting. Notice 6.9 billion - 3 billion = 3.9 billion ie just about what they projected as profits. This is a BS train and eventually it will derail, just can’t say where.
From credit card rate increases and re fi’s plus Tarp.
The dollars are in place for a recovery story to emerge. Banks ARE Solvent and Profitable
- I have Winstonized this comment for your approval
Yeap.
I approve.
I’m just trying to get a bump on Monday on my shorts and will start going long from thereon out.
the thrill of the supernova downside.
the hardest habbit to break.
here’s the habbit I broke: It aint different, and the decoupling story is real, right up to the Pandemic…
I have tinfoiled this for your amusement
I’m just trying to get a bump on Monday on my shorts and will start going long from thereon out.
You know, Muir, I was considering laughing my bum off at this time, for a number of reasons.
But then I realized you meant something else.
But I still may laugh my bum off, anyway.
No problem there Oly , we know where your mind is
I aims to plese mam’.
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+6.667.
I must be keeping company with some really great characters. Some of you may remember that I personally knew the controller at New Century. My wife worked for him for years. Well, turns out a client I wrote a software program for last year was operating a $200+ Million Fraud in California.
http://articles.latimes.com/2009/mar/06/business/fi-friedman6
I met Bruce on several occasions. He was a real cocky asshole. Turns out, he was also a convicted felon. But boy was he living large. Nice cars, houses, planes, etc. Bruce even asked me to invest in his company. He guaranteed 9-12% annual returns. Having a finance degree (and not being stupid), I asked him to explain how he could guarantee such high returns. Sorry, but it sounded too good to be true, so I passed. It was also very confusing, and he made a point of making me feel like an idiot because I didn’t get it. I also made sure all my invoices were paid pronto.
Here is the really sick part. I looked over the lawsuit and they listed the investors that were fleeced. Most are elderly, but many of them were the same people I was working with at the company. He screwed the employees and their family members. Shit, he even screwed the chick he was screwing! She was also listed as an investor.
You cannot make this shit up!
Hi all. A nurse at work this morning is trying to sell her father’s house. She is his executor - he has dementia and can’t take care of himself anymore. She put it on the market for $205,000 and received an offer of $180,000, which she countered until the prospective buyer walked. She told me that the roof is bad and it needs a lot of work. It was classic: I strongly recommended that she lower the price. She said that her siblings are pressuring her to get a high price for the house, and that she doesn’t want to “give it away.” I talked with her awhile and convinced her that if she gets $150,000, that’s a huge amount of money, given that her dad paid $11,000 for the house and it was paid off 35 years ago. And I stressed that it will be many years before prices go up. I hope that it works. She is completely stressed out with maintaining a house 100 miles away while taking care of her dad and working fulltime. If she sells it, you all get one point for shaping my views on real estate!
It is really too bad that the nurse does not recognize that you are the only true friend she has at this stressfull time.
My Dad was executor of the estate when his folks died. Put the house for sale at lik 60,000 and it didn’t sell. Asked the guy renting the other house on the property how much he could afford - 29,00K. Sold that day. Two people very happy in that transaction. Such a pain maintaining an empty house 200 miles away.
I’ve seen this situation even BEFORE the bubble burst! When more than 1 kid has a stake in selling a deceased parent’s house, they never agree. If the child takes an offer the others think is “too low”, they’ll be angry for the rest of their lives.
Starting with June account statements, any credit-card customer w BOA who carries a balance and has an interest rate below 10% will see his or her rate jump into double-digit territory. A company spokeswoman declined to provide an exact number, saying the changes would affect less than 10% of the bank’s card customers in the U.S. The bank has 70 million card customers world-wide, but doesn’t break out the number of customers who are in the U.S. “It impacts a small portion of our cardholders,” said Betty Reiss, the spokeswoman.
The bank’s move follows similar rate increases that other banks, including Citigroup Inc., J.P. Morgan Chase & Co., and American Express Co. have implemented in recent months. The banks, facing rising delinquencies, blame the economic turmoil. Many have been tightening the screws on people with less-than-perfect credit, but now they’re pinching a broader range of customers who have good credit records, but carry a balance.
This is called the power of oligopoly and facism. Time to squeeze the turnip for blood.
Megabank, Inc’s oligopoly death grip on the credit markets might help them overcome their propensity to throw money down the toilet on the assumption that too-big-to-fail bailouts will somehow make them whole every time.
It’s also a sign of a mega credit crunch. Raising rates motivates borrowers to pay their cards off sooner. As a result, borrowers will alter their spending, borrowing, and saving behaviors.
Just gas — no latte. Stop 401-k contributions — need to payoff cc. Use the visa, hon; don’t use the American Express card. Austerity is the new black.
I believe the GSE conforming loan limit is $729,750. If they bought the home for $729,900, does that suggest they had to bring a downpayment of $150 to the closing table?
The genius analysts cited by USA Today forecast the California overhang of vacant homes will be absorbed by year-end 2009. Does that take into account the unemployment rate that has already soared above 10 percent with no letup in sight, against the backdrop of prime and Alt-A resets which are scheduled to have a devastating effect through 2010 on loanowners with high-end coastal homes they cannot afford?
I DIDN’T THINK SO.
Open house, anyone? 1 in 9 homes sit empty
By Haya El Nasser, USA TODAY
CHANDLER, Ariz. — The white notice taped to the front window of a luxury home in the Vasaro subdivision is a telltale sign.
“Bank-owned,” says real estate agent John Groves, without skipping a beat.
There are other clues. Dirt where a lush lawn should be. Vacant lots on either side. And the sale price: $729,900 for a never-lived-in, 5,500-square-foot, five-bedroom, 3.5-bath custom home that about a year ago was listed for more than $1.2 million.
In a nearby subdivision of this community of 246,000, one of the largest suburbs in metropolitan Phoenix, a foreclosure sign in the front yard of a more modest house signals yet another financially troubled home needing a buyer.
Multiply that scenario hundreds of thousands of times. From Maine to Hawaii, millions of new McMansions, post-World War II bungalows, modern downtown lofts, exurban town homes and inner-city row houses sit empty. This unprecedented glut of vacant homes — one in nine homes across the USA, according to the Census Bureau — will change the real estate landscape for years.
One constant throughout the collapse of the housing bubble which continues unabated: The bought MSM real estate propaganda machine is still intact and throwing out false information in an attempt to lure sheeple into catching falling knives as the foreclosure crisis and recession continually worsen. Don’t be a sacrificial lamb — it would be much better for everyone concerned if Megabank, Inc shriveled up and died than if many more US households financially hung themselves on a cross of debt.
Banks appear to still be county on their Fed and their Treasury to bail them out from all these vacant homes. How about if we just print money and hand it to them to cover their losses on all this REO that they are holding off the market? Or did we already try that?
I personally don’t know why Sharga thinks that affordable housing would be so disastrous. I thought it was a policy goal? LET THE REO FIRE SALES COMMENCE!!!!
Banks aren’t reselling many foreclosed homes
Carolyn Said, SF Chronicle Staff Writer
Wednesday, April 8, 2009
A vast “shadow inventory” of foreclosed homes that banks are holding off the market could wreak havoc with the already battered real estate sector, industry observers say.
Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.
“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.“
Here is a misleading but informative graph overlaying SF Bay Area foreclosures and foreclosure sales since January 2007.
The graph is misleading for the following reasons:
1) It shows flows when the interesting variable is a stock variable: The buildup in unsold foreclosure homes, which according to the caption is something like 20,000. A nice addition to the graph would be to show the rising stock of unsold foreclosure homes hanging over the Alt-A Bay Area housing market like the Sword of Damocles.
2) It shows a big dropoff in the foreclosure rate last fall, presumably due to foreclosure moratoriums. But there is no hint of latent foreclosures — homes that are in a status which would have qualified them for a foreclosure since last fall if not for the moratorium. Many of these may eventually be foreclosed, as the owners are FBs who got stucco with an unrepayable debt.
3) The deteriorating employment situation is not taken into account, but suggests that the rate of foreclosures should increase so long as unemployment continues to rise.
4) The prime and Alt-A reset problem could disproportionately impact the Alt-A Bay Area, driving still more foreclosures through 2010.
Nonetheless, it appears there is an overhang of 20,000 or so empty REO homes in the Bay Area, alone. Will some high-level government official please bail out the banks who are sitting on these properties so they can once again start lending out money to help people buy houses they cannot afford? Perhaps it is time for the Fed to open an REO department?
Thanks for that. I needed some sanity today due to the re-emergence of, what Grenspan would call “irrational exuberance”. There are some really good links on this tread, which I’ve just spent quite a bit of time reading. Fortunately, I’m less employed than previously, and I have time to do so.
Still, I wonder: Is it a change in sentiment or just a bear rally? I’m in a position where either could be an advantage; If the bear continues, I can buy a house or rent cheaper. If the markets continue to rally, I’ll have more work.
Are Federal Funds being used to help banks hold their REO inventory off the market? If so, how can we stop the practice?
Just asking, as the USA Today article posted above suggests banks are sitting on a mountain of unsold inventory, and I don’t understand how they could afford to throw so much money away unless (1) the government was subsidizing their efforts to keep homes off the market; (2) they were anticipating some kind of bailout to take the REO homes off their balance sheets.
Bottom callers are looking for a turning point this fall…
Wall Street Journal
* ECONOMIC FORECASTING
* APRIL 9, 2009
Economists See a Rebound in September
By PHIL IZZO
Economists in the latest Wall Street Journal forecasting survey expect the recession to end in September, though most say it won’t be until the second half of 2010 that the economy recovers enough to bring down unemployment.
Gross domestic product was predicted to contract in the first and second quarters of this year by 5.0% and 1.8%, respectively, on a seasonally adjusted annualized rate. A return to growth — a modest 0.4% — isn’t expected until the third quarter. In the fourth quarter of 2008, the most recent period for which data are available, the economy contracted 6.3%.
“The end of the decline isn’t the beginning of the recovery,” said David Resler of Nomura Securities Inc. “It’s like a boxing match. Even if you win the fight, it’s not going to feel as good when you get out of the ring as when you went in.”
Does Wage Inflation
Cause Price Inflation?
____
Answer later on this morning?