The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Spot on! Nice job guys.
Very, very well done. Thank you for posting the links, Ben. Great work to all who were interviewed.
This is my favorite installment so far.
same here.
Nice job guys.
Ben, a good balance on the reg enforcement questions, jail and heads rolling. I would have been for hanging, drawn and quartered talk for some of the villians but I’m a well known HBB moderate.
Ben, the clips are all excellent, including this one.
I like the visuals.
Maybe it’s me, just can’t get into the music.
Interviews are great!
I kind of liked “The Bug” over the cowboys. Seems to me that is a combination that wouldn’t occur to an American.
On the previous installments, the music was louder than the voices, so I had to keep adjusting the loudness. This was nicely balanced. I must admit though, that I’d just as soon lose the music segments and listen to Ben and the Bloggers.
+1
It’s fine for transitions and stuff but I’m really not into the music continuously popping in and out.
But I’m a “serious documentary” type person. I like lots of in depth information and such. I’m disappointed when the doc is only superficial (e.g. “Enron: The Smartest Guys in the Room”).
Same here. I feel like I’d have to explain the background to anyone who wasn’t an HBBer. Are these just rushes? Is the doc going to tell a story at some point? ID who is talking, at least by screen handle?
ID who is talking, at least by screen handle?
This brings up a good point. If it were me, I wouldn’t put anyone on there who wasn’t identified by real name.
Otherwise you are going to have people watching wondering who in the heck are these people and why should I believe anything they say? Anyone can claim anonymously they knew the crash was coming all along…
Considering this is for foreign viewers, I am not sure the succession of visual imagery - either evoking all kinds of American cliches, or not understandable except for an insider (the hell versus heaven words which are never explained, same for Wynn vs Trump) - will help them understand the complexity.
It’s a pity, because the German media failed to explain the issue. The producers seem to have wanted to make something artful, but the issue at hand asks for detailed background and logical analysis. For a foreign viewer, the interviews need explaining, in my view.
“But I’m a “serious documentary” type person”
Me too, but I think the music in the background will keep the audiences they are trying to attract attention. Most of the people who will be watching this are the very same people who were duped by the PTB. The music adds the needed drama to the film.
I say great job, and keep the music!
I can’t view this clip, but I recall that on the first one Gershwin’s Rhapsody in Blue was behind the L.A. segment. I thought that was effective.
They should use Copeland’s Quiet City if there are any clips of ghost developments. Wonderful piece.
As a former sound engineer, I have to commend the sound quality. The content is up for debate, but for this genre the sound is top notch!
Well done.
OT
PB <— for
Bond market vigilantes saddle up
“Efforts to reflate the economies of the U.S. and Britain are running into one potentially major problem; the bond market.
Appetite for government debt in recent sales has been very poor, raising the cost to the two governments of borrowing and blunting their efforts to bring down market interest rates by buying back their debt.
This is a big risk for British and U.S. efforts to rescue their economies, and could be yet another self reinforcing downward force if holders of government debt get the frights.
Both countries are running hugely expansionary fiscal stimulus programs that will need to be paid for by gargantuan sales of government debt. At the same time both have such low official interest rates, 0 to 25 basis points for the U.S. and
50 basis points in Britain, that they are engaging in purchases of their own debt, or quantitative easing, in the hope that this lowers rates for consumers and businesses and encourages money to be spent or invested.
It is impossible to know exactly how effective the policy is, after all we don’t know what rates would be without it. We can though see two things clearly; there are lots of sellers when the U.S. and Britain seek to buy their own bonds, but when it comes to the far larger operation of issuing bonds to fund ongoing needs, investors are markedly less enthusiastic. The U.S. Treasury got a very poor response on Tuesday when it auctioned $6 billion of 9-year, 9-month inflation-indexed notes at a yield of 1.589 percent, better terms for investors than similar issues on the secondary market at the time. Of particular note was the fact that so-called indirect bidders, mostly foreign central banks, stepped up for just 26.1 percent of the sale, as against 47.2 percent at the last such auction in January, which was before the policy of Fed purchases of Treasuries was announced.
Mohammed El-Erian of leading bond investor PIMCO told CNBC that government bonds were “not worth owning right now” because of the “tremendous” amount of debt the U.S. will have to sell.”
To all:
The Fed will buy up to $300 billion worth of longer-dated Treasuries over the coming months to help keep interest rates low throughout the economy but at the same time it is buying from a market that is well aware that the Treasury needs to sell some $2 trillion of debt this year.
Speaking in Tokyo, it was clear that Dallas Fed governor Richard Fisher is aware of foreign investor’s concerns and has been seeking to reassure:
“Demand for U.S. Treasuries … will be determined by their attractiveness relative to alternatives and they may be judged more, rather than less, attractive under most reasonable future scenarios,” he said on Wednesday.
The Fed is determined to “short-circuit” any inflationary consequence of its balance sheet growth, and is in the process of acquiring new tools to help, he said.
“We realize … we are at risk of being perceived as monetizing the fiscal largess of Congress,” Fisher said.
Exactly. And while some might argue that the higher interest rates the U.S. may be paying will inflate away unpayable debts, this is perception that if anchored among investors, can very easily take on an extremely dangerous momentum of its own.
___
The understatement of the year:
” And while some might argue that the higher interest rates the U.S. may be paying will inflate away unpayable debts, this is perception that if anchored among investors, can very easily take on an extremely dangerous momentum of its own.”
Ben has said many, many times exactly these words: “unpayable debts.”
PB, FPSS and others have said for a long, long time that government policy has always been “inflate away unpayable debts.”
So, here’s my question, what exactly is this “dangerous momentum” the author hints at?
“…this is perception that if anchored among investors, can very easily take on an extremely dangerous momentum of its own.”
I would think he means that if US debt investors realize and are convinced that future inflation and higher interest rate will lower the value of their debt holdings, they may want to front-run that scenario and boycott buying of any extra US debt going forward while dumping as much as they can at the Fed’s doorsteps, driving the interest rate ever higher and defeat the purpose of monetizing the debt in the first place.
Frankly, I am more interested in finding out what he means by these new tools he is talking about that can do best of both worlds: inflate to wipe out unpayable debt but keep inflation at bay:
>The Fed is determined to “short-circuit” any inflationary consequence of its balance sheet growth, and is in the process of acquiring new tools to help, he said.
“…driving the interest rate ever higher and defeat the purpose of monetizing the debt in the first place.”
Why can’t the Fed use its position as bond investor of last resort to keep a lid on T-bond yields?
Prices are set at the margin.
The moment they stop yields will spike.
Also, it would take larger and larger amounts to keep a lid on the yields. You’d have a currency crisis long before that.
US has an external funding requirement due to low saving rate and trade deficits. Most of its debt has to be funded externally by definition and the Fed is the “last resort” by name only, to make people feel good, IMHO, as it can’t buy all the outstanding debt out there. This is what Stephen Roach called structure deficit in the US economy for the last 10 years.
Manipulating bond yields vs. selling them on the open market again leads to the debate about whether an interventionist central bank can manipulate macroeconomic behavior.
If acting in my own best interests, I would be suspicious of any pigs running around on the Fed farm with lipstick smeared on ‘em. I’ve seen enough Ponzi schemes for one lifetime and I don’t trust anybody anymore, including the Fed. My mattress is looking a lot safer to me than anything else, at least if/until inflation hits.
I’m guessing that short term investors would likely pass on treasuries once stock market or other investments presumably and eventually become more profitable, and may not be a viable long term instrument for selling debt once we reach the fabled bottom.
Long term investors are more cash poor these days, and probably want convertability given the current market instabilities. Don’t discount the possibility that full faith and credit in the US govt would wear down if we ruin our economy by continually raising taxes to pay the debt in the face of diminishing social, educational services and R&D budgets.
A gradual erosion of confidence could result in driving up bond rates to unsustainable levels. What would then be plan B?
“The moment they stop yields will spike.”
So why on earth do you think they would stop? I mean, wouldn’t discontinuing the yield-buydown policy pretty much bake a housing price crash into the cake, thanks to the 99 pct or so correlation of mortgage rates with long-term T-bond yields? I thought the Fed wanted to make sure that home prices stay unaffordable forever?
P.S. I did not mean to suggest that housing prices were not already crashing, but rather that higher l-t T-bond yields (and, by extension, mortgage rates) would result in an acceleration of the housing price crash.
Fine, so they won’t stop, and you’ll have a currency crisis instead.
The moment a CB enters a given market, I stop playing in it. It’s a pretty logical thing to do.
Fine, so they won’t stop, and you’ll have a currency crisis instead.
Bingo! No more cheap cr@p at WalMart. We will have to make our own sneakers, waffle irons, etc. And then there is that pesky commodity called oil…
New Tools –> Outlaw selling US T-bonds. Mandatory minimum purchases if you want to trade with US.
Otherwise –> Rendition to Gitmo South Pacific for Asian CBers
…
As noted before, much of the existing debt, which is where most of the risk is, is hedged. Thus, keeping rates artificially low creates market distortions, overwhelming collateral calls, and big termination payments for those paying fixed and who are already barely surviving given the state of the economy. If rates do not go up, a lot of ppl are in trouble. Anyone that thinks variable rates going down helps those with lots of variable rate debt doesnt exactly understand how the backside of these transactions work. It really depends on whether they were hedged or not. Note that this is a comment on rates going down, not a comment regarding Muir.
I think a lot of you forget how many Adjustable rate Credit cards there are outstanding. a 4-5-6% increase in rates and millions will have no choice but to default….then what?
——————————————–
So, here’s my question, what exactly is this “dangerous momentum” the author hints at?
But credit card contracts can be changed unilaterally by the issuer of the card, so just because the rate on which the card is indexed goes down, it doesn’t necessarily mean the rate on the cards will go down - the card issuer can just change the rate formula.
They will charge what the market and the laws let them charge. They won’t stick with a previous agreement (non-binding on them by its terms) that forces them to leave money on the table.
I know Polly I just went through that with $hi**ybank I got back my low rate but in 3 years there is no automatic renewal…
Sure they want me at 24% but not at 8..
In related news - it appears China is losing its appetite for U.S. Treasuries.
Which makes sense of course, since they were using all the US$ flowing in to buy them. Now that the influx of $ is slowing, so is the outflux. Same with Japan.
IMO the USG is hosed - royally. I think bond rates will be skyrocketing over the next few years, as there simply won’t be enough buyers at the current low rates.
Either that, or the Fed has a lot more buying to do than the measly $300 Billion they’ve announced.
1st qtr..7 Bil vs. 153 Bil 1 yr. ago….Yep…I would call that a cut back…
The government isn’t hosed.
They can roll the debt to all sorts of places. They can print money. They can lower expenses and raise taxes. Stretch out things by sending out long term bonds.
Also figure labor costs are trending lower.
If anybody is screwed in this its China; and people on fixed incomes (mom, you hearing me).
Losing appetites for treasuries means little. They will have to deal with their currency situation. Dumping low yield treasuries will just hasten price discovery.
In 1940’s, US debt/GDP ratio was higher than what we predict for 2010 - 2012. US Interest rates were also relatively low during that period. So, the sky is falling because we have so much debt and interest rates are low does not in itself mean much taking into account US econ history. Interest rates did begin rising substantially in the 1950s, but it certainly was not armageddon.
A good discussion might be what is different now compared to those high GDP/Debt and low interest rates of the 1940s that supports the “USG is hosed” theory.
Here you go:
- In the 1940’s our Federal Government’s debt to GDP ratio was indeed close to what it is today. However overall debt to GDP ratio - including corporate, household, and financial debt - however was no where near close. In 1945 it was 150% of GDP - now it is about 400%. (See Morgan Stanly graph I mention below)
- In the 1940’s taxes were *way* lower than they are now. Thus industry was able to pull itself out of debt rather quickly via profits. Now taxes are so high (and rising) that profits are eaten away, by a lot.
- In the 1940’s GDP per employee was very low, due to the war transition economy. So it wasn’t that the debt was high - it was that the GDP was low. Once we got going full-bore into a peacetime economy, the GDP per person went way up, and thus so did Federal tax revenue, and thus the Federal debt per GDP went way down. Now our starting point is the opposite - we’re ramping down from the full-bore peacetime economy into a recession/depression, and thus not only is GDP per person going down, but so is Federal tax revenue. Thus the ratio of Federal debt to GDP is taking off.
- In the post-war economy we had a *huge* advantage in that most of Europe and Asia had simply been destroyed by the war, whereas the U.S. was untouched. Thus we had a huge competitive edge in industrial production.
In the 1940s, most of the rest of the industrialized world lay in ruins. The USA was the ONLY safe bet for some time.
Appreciate the analytics and perspectives Packman.
and rising) that profits are eaten away, by a lot.
I would say NOW it is CEO pay, bonuses, stock options etc that are To The Mooooooooooon. And nobody elses pay shows up on the scale. That is what is eating up the “profits”.
+100
People stop buying US debt –> Then they stop taking $ for exports to USA –> USA needs to pay Gold or Asian currency for oil –> USA blasted to third world life style (or worse) for 98% of residents.
Under globalization, a third world lifestyle for 98% of US residents was always the plan. Heaven forbid that the super-rich should actually have to work for their money!
It is kind of interesting that the poor response was for an auction of inflation indexed notes. Does this mean that the potential purchasers don’t believe the inflation indexing will be done properly?
I thought this installment was the best yet. I wonder if they were listening to our comments, or it was happenstance in timing.
There seemed to be a wide range of songs used. If they are reading our comments, remember to get permission to use them in writing. If you don’t, they will go after you. Also make you don’t get trapped into turning it into a music video. While art house fans probably don’t care, J6P has specific tastes, and if they don’t like the music or it is too commonly known and thus a special meaning has already been attached by them to it, it can be distracting. It was toned down much more in this installment which is good.
Dark humor could be added by posting NAR slogans, and political quotes from Greenspan and politicians about the how great subprime was and how important it was to have people with poor credit and poor job histories to become homeowners. It was great to hear it from the ppl in the video, but slogans with names of the officals and politicans would add legitmacy since most ppl dont know who the ppl in the video are. Clips from debates and Realtor/developer/bank cheerleading conferences against a background of ghost towns would be cool as well. Also the point that although Wall Street seems to be taking a hit but the bankers themselves are still millionaires was dead on. Pics of their current vacations homes, cars, jets, against the layoff numbers for low level employees, would be a nice touch.
Great job.
One additional dark humor point. If it were me, I would also add references to HGTV and home flipping shows and related statistics. I think that if you get the NAR slogans in as well as the flipping show statistics, it will be a cult classic, and really highlight the mania mindset. Whenever someone unknown speaks, statistics or quotes in the back drop related to the point add a lot.
they keep pulling shows out of 2006 ?
exp on the international house haters
I think most of the flipping shows ended in 2008, but the 2006 statistics on them should be something that should be documented and remembered. I think during normal times, most ppl would find it hard to believe that ppl with no experience quit their jobs so they could buy crappy places, paint them, and have someone else install granite countertops and SS appliances and then sell for 50k profit in a short time span, and it was so widespread there were popular shows dedicated to the subject. I think My House is Worth What? or whatever it is called is still running, although they never seem to have a lot of disappointed ppl on the show.
I would love to see Property Virgins - Where are They Now - Reflections on Losing One’s Virginity. So many young ppl questioning the prices with the Realtor saying oh everyone gets cold feet, dont worry about it, in a few years it will be worth much more. I wonder what percent went into foreclosure, and what percent are unhappy with their decision.
HGTV’s Flip this house ( or was it flip that house, flip your house, flip my house??) hasn’t been on the air for awhile.
That show must have cost about $1.50 to shoot, so I imagine they must have run out of flippers to film.
I always like Kirstin Kemp’s Property Ladder. It was a pretty good show. I loved it when the flippers would say something incredibly stupid and she would give them that raised eyebrow.
So does taxmeupthebooty refer to paying down debt or do you just want the government to spend more?
Just curious.
Seems like they are perfectly willing to spend more.
I lived in Jersey most of my growing up years. All the big wigs politcos were into old folks homes. Were always thumping their chests about getting money for the elderly. Which they would funnel back to their pockets while giving substandard care to the old folks. Mom had a job inspecting those kinds of places. Great fun. We got the occasional death threat from democrats party boosters. Funny what happens when you have calls traced. Brake lines cut a couple times. Hassled by cops. Oh, I’d say we were almost killed by democrats or union folks a dozen or so times. Not real serious like car bombs. They were really just into intimidation.
I for one was happy with the RICO act. Made my families life a lot better.
So, I have a real hard time with taxing myself up the booty to fill the pockets of hacks while getting extreemly marginal returns. Prefer charity work, where I can get involved myself and no money goes to fund raising companies.
But hey, its better when the government is involved.
Mom had a job inspecting those kinds of places. Great fun.
Your mother was doing God’s work.
I agree about giving money directly to charity. At least that way one can research the charity’s money management, how they disburse their funds, etc. An onsite visit can be made to chat with beneficiaries of the charity, to gauge their satisfaction level. Among other ways to “qualify” them.
Once you hand over your money to any government entity, there’s no control whatsoever over how it’s spent.
Oh you said charity WORK -
better yet.
PBS Fronline online documentary “Living Old”. It’s excellent.
Excellent recommendations, Tim!
There seemed to be a wide range of songs used. If they are reading our comments, remember to get permission to use them in writing. If you don’t, they will go after you.
Any professional movie-maker is aware of this, and likely has someone) or several someones) assigned just to licensing issues.
It sucks when you can’t get the rights to a song you really want, though — there’s inevitably a scramble to fill the void with another piece of music that’ll work with the scene. Michael Moore famously wanted to use The Who’s “Won’t Get Fooled Again” for the end of Fahrenheit 9/11, and Pete Townshend refused to sign off on it. Moore settled for Neil Young’s “Rockin’ In The Free World.”
I know people that got in trouble for using songs on a project they thought wouldn’t get much attention. I always remind people as a result.
Do you know who this is made for? In case it is made for Germany, why do many commenters here imply it is made for their idea of a US J6P?
I’d like to ask the film makers what their intention is… In my view, video fails to speak to an average German viewer, if indeed it is made for him/her; and by average, I do not mean ‘below average intelligence’ (as the word j6p seems to imply for many here), but who has average information.
There is nothing like the NAR in Germany. It could not exist without the society being constantly on the move the way it is / has been, in the US. Therefore, it’s difficult to understand their power and influence, without first understanding what a ‘house’ represents in the US, versus Europe.
My favorite quote by a perp in this whole thing was from the orange man. He called Ben and those like him “superior spirits”.
“It would have been an insight that only a superior spirit could have had at the time.”
Angelo Mozillo 8/24/07, when asked why his company didn’t tighten lending criteria sooner.
Where are links to the first two segments, please??
http://www.youtube.com/user/anamericanplace
FASB Rules
Changes to fair-value, or mark-to-market accounting rules approved by FASB on April 2 allow firms to use “significant” judgment in gauging prices of some investments on their books, including mortgage-backed securities. The changes, which apply to first-quarter results, could boost capital balances by 20 percent and earnings by as much as 15 percent, said Robert Willens, a former managing director at Lehman Brothers Holdings Inc., who now runs his own tax and accounting advisory firm in New York.
Banks will also be allowed to exclude from net income any losses they deem “temporary,” making it easier to provide a flattering earnings picture, said Kersting at Edward Jones.
So are you saying ppl should not put too much faith in rosey earnings reports? I thought all this ended a few weeks ago.
Will the markets be smart enough to see through this or will we have to put the blinders back on again?
OT -
(I’ve been trying to make this post, with link, but can’t get it to show up - so I’ll try it without link and see what happens, then post the link as a follow-up).
So I was checking that Morgan Stanley posted the other day. It’s quite amazing. A few things came to mind:
- The amount of debt built up since the early 1980’s is staggering - and really just points out how false the recent “propsperity” has been, compared to say the prosperity of the 1950’s and 1960’s. In the 50’s and 60’s there was a significant increase in personal and corpororate debt to be sure, but at least that was offset by the reductions (per se) of government debt. Since the 1980’s *all* debt classes have just skyrocketed, not only in nominal terms but even in terms of percentage of GDP.
- It’s scary that this chart shows virtually none of the new debt that is starting due to the TARP, stimulus, etc. Skyrocketing doesn’t do justice to what’s coming, unfortunately.
- I was very surprised to see the large spike after the 1929 crash. The bulk of that is due to corporate debt - no big surprise I suppose given that we’re seeing the same thing now with big increase in corporate bonds. It’s surprising though too that there was also a significant increase in household debt - I wonder what is the cause. Perhaps it was unemployed people or about-to-be-unemployed people tapping into credit that was still available, in fear of needing that money due to the crash?
Here is the link:
debt graph
also since the 60’s wives work
and real wages have fallen since the 70’s
it’s a fake economy
OT
anyone know how often goog satellites update ?
E NC coastal communities seem to show no development- some builders site when you click on home available” there’s one or two listings in a whole development= wow !
Don’t forget the invent of computers and computer modeling.
Didn’t it used to take more than 1 hour to finance and buy a car?
Ha ha - bad example. It takes as long or longer now with computers. Now not only do you have to sit in the office and do all the paperwork with the finance manager, but then someone else has to transfer everything to a computer.
Some places do put things directly into a computer, but they still have to print things out for you to sign. Not much has changed really. It took me well over an hour on my last car - and that was paying cash - no financing.
Computers have definitely helped with a lot of things - e.g. I never go to a bank anymore. The transaction time of doing things online is about the same as at a window - but I save time from driving to the bank, and the bank saves tellers.
Yeah, even with computers it’s gotten more complicated to pay cash for a car. It took me 3 hours from start to finish to buy my last car back in 2004. I must have signed 20 pages of useless crap in addition to the check.
Years ago, all the dealer really needed was my signature on the check.
Since I think the link won’t get past the filter (odd since it did the other day when someone else posted it):
market dash ticker dot denninger dot net slash uploads slash debt dash trend dash breakdown underscore 2 dot jpg
(what a pain)
packman,
Send an email to Ben. Also have you tried the tiny url. I haven’t had any problems with posting a link when I use tinyurl dot com
Doh - I forgot about tinyurl - I’ll give that a shot.
Here it is.
A very telling chart, IMO. Also see my discussion above with Don’t Know Nuthin w/regards to post-WWII comparisons.
Got it, thx
I hate when we say false prosperity. We have pricing problems.
We have lots of issues with over production. Over production, not shortages. We also have wealth distribution problems.
When we have actual shortages then it would be something to really worry about.
All that debt was acting like real money for a long time. I think it generated some actual prosperity. What we don’t want to do is get into a situation where all we stop real productive activity, because bubble chasing is the only thing profitable.
But if you take away imports bought with funny money, the shortages would already be here, wouldn’t they? I expect actual shortages as soon as the inventory gets used up and people refuse to take IOUs to send us more.
Agree. Lots of production has been taken off-line. It will be interesting to see how fast it ramps up when current inventories are depleted.
“All that debt was acting like real money for a long time. I think it generated some actual prosperity. What we don’t want to do is get into a situation where all we stop real productive activity, because bubble chasing is the only thing profitable.”
Wow - tongue-in-cheek I hope?
Are you richer if you get a $100,000 loan? I don’t mean do you *feel* richer - I mean *are* you richer?
Maybe the spike in debt after 1929 is due to GDP falling and nominal debt increasing as a % of GDP.
Bravo… well done.
BJ=Voice of Reason
UCLA economics major=Technician who summed up the the fractional reserve confidence issue succinctly. In many ways, the solution is much more complicated than hacks and simplistic folks would have you believe.
Both guys are right though. Something big is going to happen and it’s going to be painful.
The UCLA guy stated that the markets crashed because of “too much regulation” like it was a fait accompli, and that the only truly ‘free markets’ are yard sales.
Yard sales are good free markets because you can trust what you buy: you can inspect before you buy and hold your neighbors accountable if they try to cheat you in small claims court, if not through neighborly arbitration. They are not likely to make out like our current bankers because they can afford better lawyers or declare bankruptcy.
The 1929 market crash occurred in an environment with relatively minimal regulation, and the SEC did not exist. Once we had it in place (to enforce transparency) there was a climate of stability and confidence that lasted until the anti-government zealotry of the 1980’s and beyond. In the case of derivatives trading, regulation did not exist at all!
I’m more inclined to agree with UCLA guy in that central bank regulation has been of dubious benefit.
I didn’t get the impression he was suggesting a lack of regulation was or could be the answer. More that he was suggesting increased regulation isn’t necessarily the answer either.
Those are just my interpretations from the limited clip, of course.
Btw, these clips are very easy to misinterpret. I know in Part I where I was interviewed we were discussing executives and what they knew.. but that wasn’t explained before the clip of me talking about how people couldn’t put 2 and 2 together. It sounds like I was criticizing everyone who bought a house or didn’t see it coming, but that’s not at all what I meant.
This is why politicians talk in sound bites.
‘I was interviewed we were discussing executives and what they knew.. but that wasn’t explained before the clip of me talking about how people couldn’t put 2 and 2 together.’
Haha, welcome to the interview world bink! I remember the first few times I got interviewed, I would see the article and go, ‘hey!’ It’s probably just the way it has to be. It would be boring if every article was a blow-by-blow 60 minutes style deal. I don’t know about sound bites, but I’ve learned to try to phrase my responses such that I somewhat state the question and then the answer. Or take my position explicitly, in my own words.
BTW, live radio is much more complete, but if it’s edited you’ve got the same problem. Print is an unknown. They can put anything you say down in any context. That said, I used to be worried that print journalists would pull a fast one on me, and they never have.
Ben had a nice statement toward the end of the segment, to the effect that we’re debating the regulation issue and other financial issues openly here — problems not often aired at the public policy level.
In that context, “UCLA guy” clearly represents just one of many strands of HBB thought regarding causes and possible solutions.
Orwell would love you. You are an example of duckspeak.
Do you ever question your democrat masters and their party line?
Keep on quacking out the party line.
poof!
I was wondering if any HBBers are actively considering “escaping” to another country when the time is right? What I mean by that is if anyone here thinks a better life is awaiting him or her in another country somewhere? I mean given the economic future this country faces and the actions the gov’t is taking, I can’t help but think most HBBers have a negative view of how this is gonna play out over the longer term. If that’s the case, do you foresee yourself moving to another country? If so which country?
Me personally, I have always thought that I would retire by 50 (I am 40 now) and move to another country where the cost is much lower than the US. If I stay in the US and own house in the US then all I will be doing is forking over ever-higher taxes (income & property) to revenue-hungry gov’ts (both federal and state) since I am such a big net saver and you know savers must be punished and wealth redistribute to other more “needy” ones. Some of the places I have looked at are Costa Rica, Panama and Honduras (Roatan Islands). Many of these places give you 10 or 20 years of no-tax on any property or investment you make in the country if you are an ex-pat. Of course I won’t be doing it for at least another 10 years.
Not bashing the economic outlook of the US in this thread, we do that enough everyday, but just curious to see if others have thought about leaving the USA for good.
The grass is always greener…
…over the septic tank.
lol… I will have to remember that one!
You can thank Erma Bombeck for that one. She had a book by that title.
Texas counts as another country……..just ask them.
I plan to build the “Summer Bunker” somewhere close to Lubbock.
Build low. Tornadic winds.
Really, really big sky, though.
Might be fine place to hunker down.
Thanks for filling in the reference, Packman. I wanted to leave the sentiment to speak for itself, but she is due the citation.
May she rest in peace.
Didn’t Ben get a place in Taiwan? There is a lot of unrest there now. I dont know if it effects him or not. There will be global unrest as a result of the fallout. In such times, some places are safer than others.
Really? I must have missed that. Ben if you read this can you expand on it? I mean why Taiwan of all places?
I may be wrong but I believe I saw it on a bio on one of his blogs. Please correct me if I am mistaken.
The farthest west I’ve ever been was California. I don’t own any RE.
I spent a lot of time in central America since I was a child. They have just as big a bubble as anywhere, IMO.
Thanks Ben, mis-understanding then. Yeah these “hot” Central American places, especially the properties near the beach, are up so much that it wouldn’t make any sense to buy now. But I have a decade to wait for the prices to deflate, which it will for sure.
It’s killing me now trying to figure out who it was. I specifically remember about a year ago looking at a bio on a real estate blog and seeing a pic of their house in Taiwan and thinking it was odd. This will bug me all day. Sorry for the confusion.
Dang and here I thought Ben was going to start a Central American commune where we could all move and hang around talking economics and politics until it came time for the idol worshipping portion of the ceremonies where we chant Ben’s name and burn effigies of Greenspan, Paulson, Geithner, Mozilo and Suzanne.
(On second thought a Jones compound in the lower Americas may not be such a great idea after all. But at least we would be guaranteed never to drink the kool-aid!)
Tim,
Are you sure it was Taiwan? I think it was Thailand as I vaguely remember the bio as well. I was about to say DinOR but I think he’s got a place in Philippines…
Yes, I think we are referring to the same thing. I still cant place it.
Yeah, I remember that condos were really cheap in Puerto Vallarta about 10 years ago before we gringos stupidly bid up R/E prices to US levels…
The Mexicans weren’t stupid - they took the money!
Prices in Costa Rica and comparables shot up 400% or more during the boom. They were not isolated havens untouched by the madness. Maybe if the market really crashes bad there because of the high % of vacation homes that must be liquidated, but not at these prices.
Yes CR shot up big, and that’s why it is no time to buy right now. Their prices are comparable to FL prices and that is a 3rd world country still. Wait a few more years, I have time.
cougar,
If there were a total collapse, what makes you think you would be welcomed?
I’m not challenging you, just trying to get you to think along a different line.
They welcome you now. Actually, they welcome your money.
In a total global economic collapse, you have nothing to offer.
If there is a total global economic collapse, yes one would not be safe anywhere. I am not trying to plan my life based on a total global collapse, just a long and drawn out global “decession”. And I am not really saying I am trying to make myself immune to a global collapse, I am just saying I don’t like some of the tax policies that is happening right now at both the federal and the state levels and I am afraid that is just going to get worse, with the baby boomers retiring en-mass and gov’t reluctant to cut back on spending, so the only way to go is tax those who have money (the savers). Granted no one can guarantee what happens in those other countries in 10 years, but I am just thinking out loud all options.
” I am just thinking out loud all options.”
Yes, and I hope that my reply did not seem unduly confrontational. It was not meant to be.
I too have had thoughts along your line.
It’s just that I have seen too many posts throughout the past number of years right here that miss the mark regarding living in South America.
No problem Muir.
BTW all the countries I mentioned are in “Central” America, not South America.
Frankly S. America is too far for me, I still want to visit my relatives in the US often.
I don’t think the babyboomers are going to retire en masse now.
Lots of my coworkers who are in their early 60s are all talking about staying for a few more yrs. Why? mostly because of lack of health insurance till Medicare if they retire now.
So, if people have health ins, they will stay.
Just the ones who are big shots , ceo’s, BOD types who are paid regardless, will retire. But if I was a BOD, heck I would keep that gravy train running endlessly.
“Why? mostly because of lack of health insurance till Medicare if they retire now.”
That was always the case unless you have primo public or private pension that covers health. Which is why I could never figure out how people could afford to retire so young. Even if you have a few mil, it’s all on the line with a catastrophic health event.
This is why you get catastrophic medical
insurance. For the first $10k, we pay $2.5k,
thereafter, the total cost is borne by the
carrier. Works for us.
forking over ever-higher taxes (income & property) to revenue-hungry gov’ts (both federal and state) ??
Lots of inexpensive places to live in America if you are retired with no need for a job…
Health insurance for a 50 years old, too young for Medicare, too rich for Medicaid, no job-provided insurance, what would you be looking at in terms of cost? I think that is also a big bleeder as far as money goes.
your right…Health Ins. is a huge factor…My Ins. premium is staggering…We need a national health care program of some sort or at a minimum some kind of catastrophic umbrella that all can purchase into so you don’t get wiped out…
Just don’t get sick.
“Just don’t get sick.”
Or have one on helleva massive fatal heart attack or a cerebral stroke with medical directives of NO heroics, tubes, battery chargers, MD specialists, sharp pointy objects or other any unnecessary veggie-supporting/ resucitative measures required.
We pay about $10,000 per year. I had a heart attack 3 weeks ago and my 2 day stay bill was $22,000. I would recommend every body should try to have health insurance. I can also make a moral argument for national heath. 60 million American don’t have heath coverage and I am sure they will get sick at some point in their lives.
Please remember I am making a moral argument only
The current system is too screwed up to survive, IMO. Too many economic dislocations (employers costs skyrocketing vs. the rest of the world, people unable to change jobs because of pre-existing conditions, etc) are being caused by the current system.
As far as “rationing healthcare”……..as far as the typical insuree is concerned, healthcare is already rationed. Try setting up an appointment for a non-emergency condition, and see how long the wait is. (Example: Scheduled a visit with my doctor this week; the soonest they can see me is the third week of June).
The insurance companies try to price-fix to make money , and the providers are gaming the system. If they are smart, they will start working on some solutions, before the government decides to make them the problem.
Saw the PBS Frontline thing about healthcare from a few weeks ago. A huge portion of the bills are directly related to the billing system itself. If anything, maybe build a new billing infrastructure to bring it all into one, and clean up that mess (just don’t let google do it).
Hi SUGuy - am so sorry to hear about your heart attack! I hope you are doing and feeling better. Our thoughts are with you, please take care of yourself.
SUGuy, I hope the damage from your infarct isn’t very serious. And I agree with you that health care IS a moral issue. Costs are out of control, both insurance premiums and charges for care.
SUGuy, I’m sorry to hear about your heart attack. Hope you are doing better.
Any one see 60 minutes last Sunday? Part of it was about the Las Vegas public hospital closing its outpatient clinic for chemotherapy. This not only impacts the poor it also impacts the middle class.
The Recession’s Impact: Closing The Clinic
“In the economic crisis, public hospitals are needed now more than ever. If you’re down on your luck without insurance, the county hospital can be your last resort.
Recently thousands of letters went out across Las Vegas telling cancer patients that the only public hospital in the state was closing its outpatient clinic for chemotherapy.
It’s the next thing in the recession - communities cutting back on services like schools or cops or public hospitals because tax revenues have fallen with the economy.
One of the charity patients who got that letter in Las Vegas is Helen Sharp, who didn’t realize how a crash on Wall Street might threaten her life.”
Here’s the link:
http://tinyurl.com/c8cwqn
“As far as “rationing healthcare”……..as far as the typical insuree is concerned, healthcare is already rationed. Try setting up an appointment for a non-emergency condition, and see how long the wait is.”
That’s the reality for most in this country that do have insurance. It can take a long time to access care. Our health care system is broken. We spend too much, don’t cover enough people, and lag in the outcomes. We could be healthier for less cost.
Thank you all for your kind words. I am doing well. I was not over weight and I have worked out for the last 20 years regularly. The cause of my heart attack was stress. Now I am taking up yoga and living a healthy vegetarian life style. I strongly recommend people to get regular checkups and watch what you eat and exercise.
SUGuy,
Glad to hear you are doing well, and that you’ve had the opportunity to make some changes that will positively affect your life.
Agree that our healthcare system is horribly outdated and broken. We desperately need to change our healthcare model.
My father left the US 5 years ago…selling his house in Florida for a nice profit and took his retirement money to the DR…he is living like a king and surrounded with homeowners from the USA, UK, Japan, AU, and Canada.
He says he only returns to the US for certain medical procedures bit will never return to live here full time…he says his money would never allow him the life he has now nor would it last him as long.
It works for some. Only, many start noticing after a couple of years that they live in expat enclaves, and have nothing to do with the country as such. Unless, they are forced to notice, like in Thailand.
Ann, how old is your dad? And does the family have a plan for when he gets too old to take care of himself? If you don’t have a plan, I’m not surprised. Both of our sets of parents had lots of plans for their post-retirement years for having fun, but were in complete denial about the probability that they would need help someday. Most of them just hope that they’ll live to 80 in perfect health and die suddenly in their sleep. Then reality intervenes. Luckily for us they all waited until out kids were grown before they started failing. It’s been a long, painful process, and still continues . . .
On the other hand, he can hire one of the locals to live with him and take care of him when that time comes.
Maybe you should grab your Panama hat & Banana Republic lightweight trousers and get out into the real world, visit these places and see for yourself. Pay specific attention to the building frenzy evident in the forests of Panama, the (crazy) prices on your favored Roatan island, and the many second homes in CR. This may be a cheap education, by comparison. Why do you even worry about some idea of ‘retirement’ (i.e. phantasy) that’s so far away. Live in the now !
10 years isn’t far away and yes I have been to all those places personally in the last 2 years and that’s why I know the prices there now are still too high and now it is no time to buy anything. And I am not worry per se, I am just thinking about my options if my predictions come true and wanted to see if others have thought the same thing. One can’t live always in the present, that’s how we got into this mess in the first place.
Well I was provocative. You’ve been there, but what did you actually see? Why not share that? Many things can happen between now and then. ‘Living now’ does not mean being irresponsible, it actually means facing reality, as it is now. Who knows, maybe the Florida Keys are attractive in ten years - or not.
I saw a lot of very nice “mansion-like” houses on the beach that sold for outrageous prices for a 3rd world country, and all of them came from N. America or Europe. And I knew that gravy train would stop and the market will suffer big time. The infrastructure is not there outside of the big cities, I had to fly in single propeller aircraft in a few places because the roads stink. The crime is prevalent either in a few of the big cities, but I guess the same can be said for the US. Health care is supposedly adequate, but not great, provided you have the money. Ton of Americans, ran into many in gated communities and hearing the different American accents (NY-Brooklyn, southern states, California-beach-surfer-dude) . Many tourists from N. America & Europe due to the diversity of eco-tourism, wildlife and nice unspoiled beaches, so they do have some development potential for sure.
However they must take the pain first.
A new meaning for the word “escapism”, maybe?? Escapism was used to denounce the kids (” we live cheaper in Goa”), now its parents who do it.
What I can tell you, many Germans who live in Thailand had to find - after a while, they are not as welcome as they thought. For example, visa rules changing all the time.
Who created the spin about how great some of these places are ‘for future retirement’, if not the previously arrived expats, who milked the ones who came later. A lot of this marketing is hugely bubblesome.
The big question is how the locals will react if the trickle of expats become a flood……expecially if they are mainly 50-60 something Baby Boomers with no/little money, don’t speak the language, soaking up all the healthcare, and driving up prices on everything.
Everyone complains about taxes here, but one of the things it pays for is a relatively fair judicial system, and cops who at least play lip service to Constitutional protections.
I’m more concerned about some country coming into the USA and offering jobs/tuition/relocation assistance to our best and brightest kids to relocate.
If you bring lots of money to spend it shouldn’t be too bad. If you come looking for a job, free healthcare, education, etc. forget it.
Yes, we Americans would be the “illegal immigrants” they’d complain about all the time.
Nope, not at all. I don’t foresee it ever getting that bad. Would like to travel a lot though.
For a while, I was seriously considering New Zealand. Excellent exchange rate (most of the time) for the U.S. dollar, sparsely populated, beautiful, terrific food, nice people, and just about far enough away. I surfed online for real estate in the Nelson and Wanaka areas, and even downloaded the entire 97-page immigration brochure.
Then we changed presidents, and I’m waiting and observing how and what he does. Now, I figure we can always go to NZ for a month or two in our winter. The more I learn about other places, the more I realize they’re all pretty much as messed up, or are going to be, as the U.S. Different places may have different problems but they still have them.
The other place I’ve thought about is Bali. Again, great people, great natural beauty and a good climate for growing food, better than New Zealand’s. An American can live there like a very rich person for pretty cheap. That “living like a king among the poor natives” thing doesn’t fit into my personal ethical comfort zone, however. But Bali is a beautiful place.
“That “living like a king among the poor natives” thing doesn’t fit into my personal ethical comfort zone, however. But Bali is a beautiful place.”
+1.
The whole idea of living like a king precisely because the people are so impoverished that they will wait on you hand-and-foot for peanuts really turns my stomach. It strikes me as so exploitative. That article on Dubai’s slave-like servants the other day just about made my head explode.
What kind of real relationships can you cultivate in that environment? Your only “peers” would be the other ex-pats who are fine with preying on the needy—no thanks.
If I move abroad, it will be because I want to live like the natives, not live ON the natives.
There are some hotels, with the usual Bali style houses (the walls don’t go all the way to the roof, so the air can move through, and the insects can come visit)… not first class but smaller. Without the twice weekly insecticide spraying in the garden, like the fancy ones do. But still a compound that is acceptable to Westerners (and booked out, at a relatively high price, during the season). And you step outside the gate, and into the trash. There’s a village, narrow dirt paths, some huts, no toilets, a huge sow wallowing in the mud next to kids, and the people cannot afford even one moskito net. Two very different worlds.
We are thinking along the same lines. I prefer Queenstown but my honey thinks it’s a bit touristy she prefers wanaka. NZ is the most beautiful place I have ever seen.
I have to stay a U.S. citizen for my career. But I can always rent a place outside the U.S.
I don’t think things will be much better. When you look at what the U.S. Navy seals can do (and they did it well and justified and right) versus an anarchical society with no real army, you have to wonder what a malicious U.S. can do to an unarmed Costa Rica to get back at its own expatriots.
The U.S. is big. Lots of places to stash gold bullion and live free.
One of my business partners and I have a back-of-the-burner plan to pack up and move to Australia! We’ve looked at immigration requirements; for most countries, if you can demonstrate solvency combined with a business that can be moved, you can do it.
We both think the US is doomed. Visit any other industrial country, and they seem ahead of us, especially how the young people speak and act.
“…especially how the young people speak and act.”
I hate to agree with this, but it’s true. I’ve even heard of colleges having “behavior” issues in class now.
Yes and that damed Rock-n-Roll they listen to. And have you seen that Elvis Presley dance? Outrageous!
Skip, I get what you’re saying, but honestly, when you were thirteen did you rape or kill anyone? I’m not being hyperbolic here, read the Tampa area headlines.
There was a girl on my Jr. High bus that said she got raped. Really I think she got sexed into a gang. She had the baby aborted. I’m 33 now, and I don’t live in THAT bad of an area.
“We both think the US is doomed. Visit any other industrial country, and they seem ahead of us, especially how the young people speak and act.”
Some of these countries are ahead of the U.S. in some areas, but it’s not because of differences in the young people. The young people in this country see the problems we are facing much more clearly than a lot of older people that are still firmly in denial.
Expenses are really low in many of the places you mentioned. You could really stretch your retirement $$ if you reside outside of what’s considered the Western Industrial World. The 3 main problems I see are the language, security and staying healthy. Especially health care in a 3rd world country is probably not exactly up the challenges you’ll meet in your golden years.
Especially health care in a 3rd world country is probably not exactly up the challenges ??
Google “Medical Tourism”…
when I get older I’ll go to 3rd world for bypass etc
lots of good docs and 70% less
I had a full checkup at Bumrungrad in Bangkok a few years back. Cost me all of about $300 and included bloodwork, x-rays, etc. I was very impressed by the hospital (not unlike a 5 star hotel), attentive staff, and the whole process.
The whole “US is the best for medical care” attitude is arrogant. Sure, we have made some serious leaps in this country, but we also charge huge premiums for them. Our medical system also produced Octomom. Technically, she has produced 14 offspring, so I guess that makes her Quatuoromom?
Yes bumrumgrad is great. A lot of their patients are from Arab countries, prefering to go there, since the US has become so unfriendly. But the Aids Hospice of Klontoei Slum is not so great. And Singapore is great. The very educated blind man, who was laid off after 30 years at the phone company and is now without any income, not so great.
The more I have seen, I think the answer is, to change the system HERE.
If you are talking only about the availability of the latest/greatest high-tech procedures, the US is way up there.
If you are talking about the outcomes we demonstrate for patients across the board on very BASIC things like child-birth mortality, our system shows itself to be not-so-impressive at all. It’s pretty pitiful, in fact, all things considered.
In other words: great for the rich; not so great for most folks.
Domestic meltdown?
Plan A: try to find an unappealing, but dignified, job somewhere cold or remote or both
Plan B: clean toilets in one of the Gulf Oil States
No way am I following the herd, the herd is going to get slaughtered if things get that bad. Besides, I’ve worked some pretty crappy jobs, odd hours, outdoors, dirty, heavy lifting, etc. - those are usually the ones still available when TSHTF.
Plan B: clean toilets in one of the Gulf Oil States
The gulf oil states don’t seem any more impervious than the rest of us, do they? And in many ways, potentially worse off.
Ooops, that was supposed to be a thinly veiled swipe at the petro states and their utter contempt for us.
Ah, I didn’t catch the swipe — I suspected it was, but the rest of the post didn’t seem sarcastic.
Now that people are unable to cash out of their houses in the US, where is the next wave of Central American buyers going to be coming from?
unable to cash out of their houses in the US ??
I think its probably a world wide Phenomenon now..Lots of free cash flowed from all points on the earth…
Leave my free Hummer and 50 pct off condo and all the consumption credits behind? NOOO!
Surinam.
NSO, I have never been there, but it is my understanding that Surinam is hard to get to, heavily Moslem, and has descendent tribes of African origin living in the (unmapped) forest. Better visit first.
I was thinking Uruguay, but after reaching out, found no community of spirit re: sustainable living.
many urban centers in the US offer a tax-abatement for 10-15 years. it would also be a change of lifestyle that would be far less dependent on the car. I loved living in inner Cincinnati, taking the bus places and walking to the store. I’m sure you could afford to live in a much better neighborhood than i did, too.
I’ve spent a lot of time in Mexico, and I while we’ve considered it as a possibilty in the past we think it would only be possible if there are significant changes for the better in the government.
The best option I can see is Chile, followed by NZ. I think it’s no coincidence that both of those places are far off the beaten path.
Ok I don’t know if this will come through, I don’t have very good luck posting here, but I just had to reply.
I bought property in Roatan in 2003 and my b/f and I have already built a house there with the intention of retiring there someday. It is not perfect, but you are right about the money-hungry tax people, our property tax there is minimal. We also specifically stayed away from the US communities, people in those places tend to think it is normal to tell your neighbors what they can do on their property.
It is an absolutely gorgeous place and we can’t wait to move there. Unfortunately, with all this financial mess, it will probably delay our retirement (we are mid-40s), or maybe speed it up if we find ourselves out of work. LOL
Ok, I’ll be amazed if this even shows up. But I’m giving it a try.
Ben, you’re well spoken. It gives me comfort that there are people like you out there. Thank you. (Seriously.)
obschina wrote, “for the love of god Ben , please ban olympiagal before her blather destroys any more minds”
Cram it, obschina!!
Thanks, and I agree. If it wasn’t for posters like OG, I wouldn’t even keep doing this blog. I learned long ago that if one deals with the general public, there is no way to keep everybody happy.
BTW, I’m still in the middle of nowhere, working on my ’stray houses’ as one person put it. It took me an hour just to download this video clip. But I’ll be home tonight and can get back in the swing of things.
OG is one of the better posters on the blog…Get a sense of humor or tougher skin if you have heartburn with her posts….I do miss hoz though….
I miss Hoz, too. I hope he’s OK.
Olygal makes me smile.
There was a guy named deathspiral who made me laugh out loud - I wonder what happened to him.
I have been hoping Ben could shed some light on what happened to hoz…Ben ??
OG helps me get through things when I have a rough, depressing day.
OG is one of the better posters on the blog…Get a sense of humor or tougher skin if you have heartburn with her posts….I do miss hoz though….
———————
Hear, hear!
(regarding both Olygal and Hoz)
“BTW, I’m still in the middle of nowhere, working on my ’stray houses’ as one person put it. It took me an hour just to download this video clip. But I’ll be home tonight and can get back in the swing of things.”
Buying tax deed houses?
You have to admit she attacks people and some don’t find humor in her posts and flirtations. It’s not a chat room.
Who has she attacked personally Renter? Please name the attackees. Also if you don’t like her posts scroll on by.
Neither is it a stock picks forum.
Neither is it a discussion about best paces on the planet to ride out a financial collapse.
If Ben’s blog were just a doom and gloom blog, it would never have had the success it has had.
I’ve always thought of it as a place where very intelligent people that look with their own eyes for the truth, gather and postulate about a myriad of, as yet unrealized, possible futures.
And, if it is to be a total collapse, I want people like Oly around, rather than people bemoaning their fate at the mercy of the powers that be.
+1000 Muir! my thoughts exactly.
-
- 
some don’t find humor in her posts and flirtations.
Hey you can’t fault a girl for trying.
Who is obschina and why is he/she/it saying mean and stupid things about Olygal? Lemme at him/her/it !
Someone here described the indescribable OG as the resident court jester and poet laureate. I concur. Plus, she can cut to the heart of an issue with a few well-chosen words. But then, I guess that’s one of the court jester’s traditional roles.
+1 I’ve tried to post (of course)
+2. Olygal is my sista.
Who’s Olygal?
Oly’s one of my fav’s on this site.
I think the people with the fewest brain cells are worried about “destroying” them by diverting the few they have left from more critical work, like breathing.
NSO….. LMAO…
me too
Someone here described the indescribable OG as the resident court jester and poet laureate.
Hey! That was moi!
Actually, Oly is a lot like Dave Barry. I’d put in a link to Dave Barry, in case you haven’t heard of him, but apparently, if you put more than one link into a comment then you get spam-filtered and if you get spam-filtered and it’s a busy day, Ben just has to dump you into the void with all the other spammers.
c’est le computique.
Actually, Oly is a lot like Dave Barry.
Correction:Oly’s writing is a lot like Dave Barry’s
Sheesh. Dodged that frog.
I am probably one of the more conservative, opinionated, older fuddy-duddies observing (and sometimes commenting) on this blog. I agree with some, disagree with others, and think a few are stark-raving mad! However, I enjoy reading all the comments and repartee and OG is included even though sometimes I scratch my head trying to decipher what the heck she is saying. Free speech is alive and well! Skip over anything you don’t like.
And I like you too.
Muir (ultra Socialist, Liberal, opinionated, younger poster)
…and I agree with CrackerJim !
mikey,
Ooops
It’s all just part of the anti-froggist agenda.
Hey, where’s my post? I been all sniffling and being mushy and everything.
What will they not resort to, those anti-froggists*…
*shakes soggy head sadly *
(Actually, I really AM super soggy right now. This is not theatrical, just this once. It’s raining like utter blazes here at this time.
But I still don’t see my sniffley and gushy post. Prolly for the best, because, well…you know. )
*Jeebus loves frogs. He just told me this. Hey, if you doubt me? YOU go ask The Man!
Oh! I didn’t see this post by obschina. Was it yesterday, when I was gobbling ham like some sort of primitive aborigine who had never seen a Hickory-Cured Ham before?
Well: here’s a useful hint for you, obschina and/or renter.
When you encounter a poster or post you don’t want to read?
Do what I do. Don’t. Read. It.
Boldly skip my post and read someone else, or go crochet a pretty doily, or whatever.
How hard is that? I mean, it’s not like you’re getting graded or something.
And for those of you who said you don’t mind my stream-of-consciousness blathering, which I admit is sometimes a bit off-topic, perhaps, just a teeny little bit: Thanks. I mean it.
The HBB is one of my favorite places to spend my waking hours, and you guys are why.
(Well, I have to go now… I have something in my eye *sniffle, gulp, sniffle *
)
Shane…Shan…I mean Oly…Come back…Come back Olygal!!
We love you, Oly!
OT
RE SRS and SKF
Sold pre market what I bought Friday (post market.)
Made 2%+ SKF
and less than .5% SRS.
As I write this, the financial are up.
While I was visiting the relatives in Michigan on Friday, it looks like some significant market moves occurred. WTF?!!!
So how were things in Bland Rapids??
I’m in the process of saying goodbye. Parents will soon be moving close to me, and sister is moving to FL. It’s gonna be very weird to have few ties left there, just one grown-up niece who is staying in the area.
I’m looking forward to visiting Grand Rapids at the end of the month, to buy a cheap house. Where’s a place to buy cheap used furniture? And where can I go out to dinner?
REhobbyist, it’s been over 30 years since I lived there. My family tends to frequent the chain restaurants you can find anywhere. Sorry I can’t give you any tips on where to dine or shop. Except garden centers. Their prices are much cheaper than anything to be found where I live. Every spring around Mothers’ Day, I drive to west MI and fill my car with flowers to put in my garden. Something I’m really going to miss.
Bernanke didn’t see his shadow. Six more weeks of irrational exuberance!
“Six more weeks of irrational exuberance!”
LOL!
Six more weeks of irrational exuberance!
LOL! I’ll share that with people that point to this as evidence of a recovery.
SKF and SRS are only down a fraction, but lotsa banks up 10% or so. I’m just staying put.
I think this Friday’s triple-witch is gonna be super-exciting.
Watch out - there’s more pain for us bears yet.
May JPM 37.50 calls will go in the money.
My GE came in today.
how can 50 cents be worth 210 dollars?
the spread on the SKF 40 dollah April put/call on the SKF.
taking this thing off the table is gonna be one for the RECORD BOOKS…
sorry, I Winston-bot told me, “Dont you mean twenty five cents and 105?”
SKF is going to trade in the 40’s, in the not too distant future. By shorting the instrument that J6P thinks is money, you are the money.
Bank rally unabated in the Orwell Bottom.
. Spent the weekend in Palm Springs CA.
Things look grim. The town was full of a mixed blend of people. There was a thing called the White Party for gay guys. The streets did not look like a big party. You could hardly tell that there was a party at all. Mild observation: Gay guys seem to have more money than the average Joe and thus more discretionary spending. I though the town would have been full of people. Some door persons (guys and girls) were trying to convince you to come in and have a drink.
The hotel price was very low for a holiday weekend. No problem getting a hotel on the day I wanted. No advanced reservations. The restaurants were not crowded. Some had a wait of 5-10 minutes but no problem being seated for food or at the bar. I observed many stores that had not made it thru the winter months and were closed. These stores are on the main street in town. I would hate to be a store off of main street.
My girl friend that I was with went shopping for dresses. Most were 30-40% marked down. Most stores have sales on everything.
Do not know a lot about Palm Springs, but things look good on the surface, but to me it seems trouble is just under the surface.
Any one else observe other vacation spots over the weekend?
BIL took my neice to Park City to go snowboarding a couple of weeks ago. They found a couple ski shops with 50% off everything. He asked the shopkeeper when they usually run the sale in case he came back next year, and was told that it was the first time they ever had an across-the-board sale like that.
“Any one else observe other vacation spots over the weekend?”
As discussed last week, St. Pete Beach and all the Gulf Towns here are still raging, although my friend just went to Orlando and said Universal was creepy quiet.
Nice to see and hear some of you guys.
AP Poll: Taxpayers more frugal with refunds
WASHINGTON (AP) — Most people say they plan to use this year’s tax refund to pay bills, deciding in this sour economy to be more frugal with their annual windfall.
Fifty-four percent of those receiving refunds said they intend to pay off credit card, utility, housing and other bills, according to an Associated Press-GfK poll released Monday. That compares with 35 percent who said the same thing a year ago
The deadline for individuals to file their 2008 tax returns is Wednesday. As of last week, the Internal Revenue Service had sent out about $200 billion in tax refunds. Commissioner Doug Shulman said the agency expects to send out about $330 billion by the end of tax season.
http://www.google.com/hostednews/ap/article/ALeqM5hUqj5B5bTav9HIt6xz7TMTkcq1CgD97HLNG00
Miami housing: The power of cheap
Prices soared in the bubble and have crashed in the downturn. Now buyers are venturing back.
Theresa Caccamise paid $85,000 for a fixer-upper that sold for $410,000 two years ago.
Raul Lamus (shown with his family) bought a $1.7 million home that went on the market for $2.5 million
Ricardo Melendez snagged a condo listed at $120,000.
Map
MIAMI (CNNMoney.com) — Ivette Castillo thought buying a home at a time like this was out of the question. But when a friend told her there were great deals to be had in Miami, Castillo decided to test the waters.
To her amazement, she found she could have her pick of condos in the trendy Brickell neighborhood for less than the $1,200 she was paying to rent in nearby Doral. She bought a $99,000 pad that had been in foreclosure but needed little more than a paint job. The same condo sold for nearly $185,000 a few years ago.
“It was such a great opportunity. I didn’t think twice,” said Castillo, 24, who owns a marketing agency. “I’m getting more for my buck.”
Castillo is among the thousands of people scooping up homes and condos in the Miami area, where properties are selling for a fraction of what they were just a few years ago.
It wasn’t too long ago that the Miami housing market was one of the hottest in the country. Cranes filled the skies as developers rushed to cash in. Home values shot up 75% over three years, and some of the most desirable addresses doubled in price.
The market peaked in late 2005, and then it crashed hard.
As foreclosures soared, South Florida housing prices fell an average of 36%. The foreclosure rate hit 8.9% in February, up from 3.8% a year ago, according to First American CoreLogic. That compares to 1.7% for the rest of the country. Sales ground to a standstill.
But in recent months, low prices and low interest rates have been luring buyers. First-timers are finally finding homes they can afford, while investors say that for the first time in years they can negotiate deals that make sense.
The sales numbers are dramatic. In February alone, condo purchases skyrocketed 71% from a year earlier, while home sales soared 68%, according to the Florida Association of Realtors.
“I’m busier now than I was at the height of the market,” said Ron Platt, an agent with Keller Williams Realty.
I’m looking at an REO right now. If it’s for real, I’m buying.
Anyone know how to get smoke smell out of a fire damaged home? Apart from that and the water damage, everything looks good. It’s a great neighborhood.
That’s next to impossible, from what I hear. My business partner had a medium-sized fire in his house last year, replaced all the furniture and carpets, cleaned the air ducts, and has had specialists in to clean out the smell several times with no luck.
My sisters house had a medium-size fire a couple of years ago. They are both smokers and I don’t think they really noticed any difference.
“They are both smokers and I don’t think they really noticed any difference.”
ROTFLAMO!!!!!
Ozone. O3…..
It will take a while and at high doses but it will rid the place. Any fabrics are spent and aren’t recoverable. I suggest you use outside air to supply your ozone generator or the generator eat itself. Ozone is the only compound I know of that will burn up odors effectively.
They use ozone generators to get smoke smell out of motorhomes. You have to seal it up (not be there) while the thing runs. Might work for a house? Eats plastic up.
repaint.
I would contact some local “restoration” contractor and ask some questions about what there scope of work typically is for remediation…
Details, mrktMaven. How much?
It’s a SFH for 105K — MLS ID #480035. Realtor says it will take about 100K in remediation. I’m not interested.
By the way, my observations are that the article is accurate.
The listings I follow move quickly and prices are lower.
For the Real Estate I am interested in, I do not expect much lower prices.
I’ve been very Bearish.
Here’s my reasoning: in my neck of the woods, the mortgage is less than taxes, insurance and maintenance.
A typical house might have taxes around 7K-9K (typical house)
At 5% fixed 30 years, 100K is $522 +-
If a house is selling for $250K, a 50K reduction (20%) doesn’t change the total numbers much.
So, I’m changing my call.
packman, I hope you read this.
Muir:
Thank you for reply to my request for info re Jupiter Beach. I appreciate it.
Welcome!
__
HBBrs
By the way, all HBBrs can ask me about living/working/investing/buying in the greater Miami area.
Good in depth knowledge of Miami, Coral Gables, Coconut Grove….
Fair knowledge elsewhere.
Will Miami Beach / South Beach ever get “cheap”?
cougar,
Miami Beach was very, very cheap.
If you look at “Scarface” the scene on the beach with the chainsaw was Miami Beach for all my childhood.
Retirees, mostly Jewish in their 70s+
After Mariel boatlift there were clotheslines strung from across buildings.
Those same buildings are now the chic, art Deco boutique hotels.
It’s pretty funny to me because I remember them boarded up.
(You see that also in the old MIami Vice episodes)’
Now, as to your question, now that we have a little History here.
The answer is I have no idea.
But, I’ve proved that I am honest.
“A typical house might have taxes around 7K-9K (typical house)”
Needless to say I won’t be moving to Florida.
Indeed, that it mind boggling.
Muir,
FWIW - I think the Miami market is behind the curve somewhat. It’s crashing later than SW Florida (Sarasota / Ft. Myers), from what I see, by about 6-12 months. As such, I think Miami’s still got a long ways to go down yet, especially on the condo side of things. If you look at OFHEO and Case/Shiller data, Miami’s still fairly high priced historically. I don’t really pay attention to anecdotal evidence on specific properties like you mention - every property has unique characteristics, so there can be big price variations that can be outliers w/regards to the general trend for an area. Primarily right now that’s happening a lot for places that need a *lot* of maintenance work, e.g. foreclosures. So when I read that such-and-such bought something for 75% below the three-years-ago price, I don’t think it means much. I look at overall medians, which I think Case/Shiller is good at following; and even FAR data is more meaningful w/respect to that than anecdotal evidence.
Curious - why did you mention me? Referring to my posts a few weeks ago on the possibility of us being at the cusp of the ‘U’? Or referring to my desire to buy in Florida some day? (for the latter - I’m thinking of the west coast not east coast). I know we had some discussions about something but I forget what - refresh my memory.
“Referring to my posts a few weeks ago on the possibility of us being at the cusp of the ‘U’”
Yes to above. I stated that I respectfully disagreed with you and that we were not close to the cusp, that it would pick up speed.
Some days later, you posted about “eating crow.”
And yes, Case Schiller will show, I repeat will show further declines.
My point is somewhat subtle.
For me, and only for me, for my market, a further decline in prices of 25% is not a factor in buying.
There is also another subtle point which I offered to HBBrs.
The article is correct; therefore, do not be surprised if there are big increases in sales and this is trumpeted as a “turnaround.”
I’ve consistently accurately predicted my market.
Condominiums (specially high end) will continue to plummet.
Nice housing, say like in Coral Gables, may on paper show a lower median.
But, and this is subtle, I can get today the same price I will get in the future, but not lower.
(p.s. FYI The West Coast has red tide. I’d be careful if you or a loved one have any health issue. I’ve lived in Fl for 40+ years. It’s not something I just read about.)
That market, I call a bottom.
“That market, I call a bottom.”
Wow. Daring call, considering that the economic pain appears only to be growing as the layoffs mount.
Muir, what do you think about Key Biscayne? Specifically the single family homes. Thank you!
Muir,
Are you buying and where will you be buying?
Key Biscayne —
Ahhh….
What can I say?
Richard Nixon’s Winter White House with Bebe Rebozo.
Need I say more?
Just kiddin!
But the above was true.
That’s some expensive Real Estate you are interested in South Fl!
My dental hygienist bought a condo there, but that was like 20 years ago, when mere mortals could do that.
Ok, ok, I’ll answer.
Venezuelans bought a lot during the past years.
It’s beautiful, always has been.
Many real mansions there now, where before there were 50s houses.
I’m somewhat hesitant to say more.
There is value there, but with the money we are talking about there, it leaves me somewhat humbled, to be honest.
SanFranciscoBayAreaGal,
Gables (North of US1) or the Grove.
Looking for a small 2/2.
Saw some 1925 homes (2 of them) typical Spanish, George Merrick houses. Both had legal guest houses (all told under 1500 sq ft for both structures)
Both asking 299K both needed work.
I’ll pull the trigger if I see something I like.
Otherwise, I’m happy in my 19th floor.
I would strongly advice against any condo purchase at this time anywhere in Miami.
The lower end houses in high-end established neighborhoods type dwelling which I seek are starting to pop up.
There will be more, I’m not desperate.
Any further info e-mail me at SteveMuir61 + @ yahoo and you know the rest.
Krugman nails it again.
This is a column about Republicans — and I’m not sure I should even be writing it.
Paul Krugman
Today’s G.O.P. is, after all, very much a minority party. It retains some limited ability to obstruct the Democrats, but has no ability to make or even significantly shape policy.
Beyond that, Republicans have become embarrassing to watch. And it doesn’t feel right to make fun of crazy people. Better, perhaps, to focus on the real policy debates, which are all among Democrats.
But here’s the thing: the G.O.P. looked as crazy 10 or 15 years ago as it does now. That didn’t stop Republicans from taking control of both Congress and the White House. And they could return to power if the Democrats stumble. So it behooves us to look closely at the state of what is, after all, one of our nation’s two great political parties.
http://www.nytimes.com/2009/04/13/opinion/13krugman.html
Just look at these crazy tea parties the morons on the right are throwing. The truth is, and everyone with an IQ over say…80 already knows…is that the folks on the right are just poor losers. They lost, so now Fox and Rush are trying to fabricate this bogus outrage. Nobody should take the right serious today. When Chuck Hagel and the sane members of the old right get the party back let us know. Hey, I’m rooting for you guys! We need a balanced system. But until that day comes, the right can be taken just as seriously as ex-members of Heaven’s Gate cult.
I would also add that I don’t feel comfortable leaving all the decisions to the Dems (or any one party). So please Republicans, come to your senses and do it quickly!
The Republican Party is dead. They care more about cramming religious superstions and their worn out social conservatism down our throats than to return the U.S. to small government. Stab a fork in the Repugnant Party.
It would be nice to see the Republicans rebuilt with a focus on the Constitutional core values (Eisenhower Republicanism) and reform (i.e. Teddy Roosevelt Republicanism) and not on “family values” and neoimperialism. Seriously. Washington needs a credible and loyal opposition party.
Look to Maine.
Senators Snow and Collins are good people. They steer clear of the social agenda and are reasonable people. As are all Mainers…
I agree 100%! I am hoping Republicans denounce idiots like Flush Limpdick and Sean Insanity, and get back to Eisenhower Republicanism. Heck, I might even join them!
We need a viable opposition party not run by large corporate criminals (aka Wall Street) or religious nutcases.
I guess one run by large union criminals and global warming nutcases is fine though.
“Seriously. Washington needs a credible and loyal opposition party.”
I agree. I have been a registered Democrat for much of the past two decades, mostly because of what the Republican Party has become. However, I have now dropped that party registration as a Democrat twice in California because of the excesses of one party rule.
Is that you Bill? lol
For the 1,000th time, I’m very liberal. My private lifestyle would be abolished by the social conservatives. Besides, people such as Laura Ingraham, Rush Limbaugh, Sean Hannity insult me by assuming if you are for 100% pure capitalism, you must be against abortion.
You are just as prejudiced, at the other side. You do not realize that there is a consistent application of freedom to both the pocketbook and the bedroom. You cannot have economic freedom for long without civil liberties. You cannot have civil liberties for long without economic freedom.
I vote libertarian because it’s the only party that is principled for freedom. All others are hipocrites.
I guess I missed the other 999 times you mentioned it, Bill. I don’t think I am prejudiced at the other end, which isn’t exactly a surprise. I also agree 100% about the consistent application of freedom to both the pocketbook and the bedroom. They both go hand in hand. See, we find ANOTHER thing to agree on.
BTW, I may actually join you voting libertarian, if Obama doesn’t drain the swamp in his admin. But I think he will. He must be the loneliest person in DC. One honest man.
In any case, I still disagree with a shitload of things you say.
“The Republican Party is dead.”
+1 Sad, but true.
Let the Republican Party die if it by saving it means just a slower journey toward socialism than the faster pace the Democrats offer.
I would rather go full speed ahead to total destruction, at least that way, we can build a new country sooner while having learned the lessons (hopefully) from the path that led us to our demise.
I agree but the alternative is “alternative” lifestyle and global warming lunancy shoved in our faces.
As misguided as some of
Obama’sGeithner’s ideas are, it kills me that McCain wanted to have Phil Gramm of all people be the Treasury secretary…it would have happened if he hadn’t made his famous gaffe. They reward loyalty over competence.I think if you can rest the blame for the current debacle on any one man’s shoulders, it rests on his for making sure Brooksley Born couldn’t do her job and regulate the derivatives markets. Result? AIG and oversized level 3s. Alan Greenspan (another Republican) comes in at a very close second, Chris Cox third.
The Republican I respect most and whom I think Obama is overlooking for a serious cabinet post is Sheila Bair.
Sheila Bair is good. Chuck Hagel is good. There are still many good Republicans out there but they are overwhelmed by the likes of Rush, Hannity, Steve Forbes, Cocaine Larry Kudlow, etc. You just don’t hear from the sane ones that often. And the Dems have issues too. I consider the party the lessor of two evils. Nothing more.
Ben and I disagree on a lot of issues, but at the end of the day I consider Ben a sane person with a different opinion. We can have a fact-based debate and still come to different conclusions. But some of the nutjobs on the right make that impossible. Heck, there are some nutjobs on the left as well. But nothing like you see on the right.
Tea party anyone? Crazy people.
Yes, Chuck Hagel, Colin Powell, maybe the Maine Senators (Snowe and Collins)…but after that I draw a blank. I’m surprised at how hard it is to come up with names.
I like the the Maine Senators. Reasonable, thinking people. Not absolutists.
I’d forgive Colin Powell. He is a good and honest guy that got suckered by Chimp and Company. I always liked him.
You draw a blank because there are VERY FEW decent ones. They sure screwed this country up before they were done though.
Colin Powell? The Army press officer responsible for covering up My Lai? That Colin Powell? Or did you mean the Colin Powell with the vial of “anthrax” who bald-faced “bullshitted” (his word,) the world at the UN in the run up to Georgies little misadventure in Iraq? The Colin Powell with the son, Michael, who tried to eviscerate the first amendment at the FCC over an undraped nipple??? Men of great national integrity, for sure….
Man had a chance to publically redeem his (and America’s) moral imperitive –twice. And sold it out bigtime both times. A national disgrace. Shun him.
It is difficult to get reasonable “fact based” debate when one’s every sentence is anchored with name calling.
Sometimes it is useful to write what you feel, take a deep breath, and then delete a bunch of non factual words.
Okay so I am a little upset by what the GOP did to our country. But I won’t apologize for my anger. Especially when those same people slam the clean-up crew every day, not to mention supporting a madman that had hundreds of thousands murdered in Iraq. Oh yeah, and I was called unpatriotic for having the balls to bring up the obvious by the same people that were helping destroy it.
If you sense total disgust for the Republican party in every post I make, I consider it Mission Accomplished.
OK, call it mission accomplished.
I was a CO in 1970 and I went the whole nine yards with it. Why I am not in jail is a total miracle. Not all Registered Republicans sing the party line, or want the status quo, or always act like friggin sheep.
On your cleanup crew, I think you ignore the fact that they were all on the playing field already, totally in play during the past years. No, it’s not a cleanup crew. It’s a relay race, and faster runners have the baton.
Wake up!
Hey BS, point well taken about not all Republicans going along. In fact, I am actually one of them. I was a registered Republican for most of my voting life, until I started putting the pieces together. I also agree that a lot of the cleanup crew are insiders, but Obama isn’t one of them. And let’s face it, if this thing falls apart he is going to get all the blame. Heck, if it goes right he will get the blame because it didn’t go better. He cannot win.
Here is an example. Just look at this story.
http://news.yahoo.com/s/ap/20090413/ap_on_go_pr_wh/obama_dog
They are slamming Obama because his puppy may not technically be a shelter dog. I also caught the outrage that he wasn’t doing enough against the pirates. Now that the pirates are gone, they move on to the next slam. You have to see this. Nobody is that blind to the bias. They slammed him for his Europe trip, the iPod, criticizing America, etc. etc.
Not a lot of love for Obama since he took office. No honeymoon. Basically the media is on 24/7 attack Obama mode. In these times, you would think these worthless POS would try to stick together. But I wasn’t expecting it. Those of us that watched the news media attack Clinton relentlessly for 8 years, only to see them lay down for chimp, were expecting this treatment.
At least the Dems had enough decency to not use 9/11 to attack Chimp, and I think they should have. He was to blame. Nope, that was a dead issue. Even before they could open their mouths, the media had basically said it would be unpatriotic.
I sure hope you are catching this because I am getting tired of pointing out the obvious.
Wake up!
Crazy? I suppose you consider Pelosi, Reid, Frank, and Dodd sane. Please.
Why is a Tea Party crazy? This country’s founders fought the British for far less tax injustices than what we experience today. It’s about time. I would love to eventually see a huge tax protest where millions of people refuse to pay their income taxes.
This may be really to late, but do you know the REAL reason the Tea party happened?
Thank goodness. I thought for sure you were going to say Ron Paul. Maybe I’m spending too much time online.
I actually like a lot of what Ron Paul has to say, but I think he is very naive on foreign policy. His isolationist views were a show-stopper for me.
I think Obama’s approach to foreign policy is the right one, and over the next 2-3 years I expect more than a few of you guys to come around and see the light.
While Ron Paul says leave us alone and we’ll leave you alone, Bush told the world it was our way or we’ll blow you up. That was a disaster.
+1 on McCain and Phil Gramm.
Fiscal, moral, and traditionalistic conservatives have not been represented well by the recent Republican party tenets. However, it would be wise to not discount the fervor and depth of such conservative beliefs.
What a bunch of BS. He just doesn’t want the Dems to get blamed when all this blows up in the next two years.
And to that I will add…
The Republican Party has been an unmitigated disaster since the day Ronald Reagan chose to open his 1980 campaign in Philadelphia, Mississippi - site of the murder of three civil rights workers.
Seriously, why would anyone open their campaign in a place like that? The party has been morally BK ever since. And that says a lot, considering that Nixon came before.
The last Republican President worth a shit was Ike. And it is no coincidence that this country turned to shit after 28 years of Republican dominance.
But let’s blame it all on Carter and Clinton, not to mention Obama.
Well, he did win twice, so you can’t really argue with success.
I hope you are enjoying our success. I always wondered what living through the great depression was like.
Hi B-republic,
Over the past few years I have come to appreciate that there are valid reasons why some folks are at the opposite end of the political spectrum from me.
Opposition and polarity are not bad things in and of themselves - it is good that reasonable people disagree on things.
So I for one appreciate and try to understand your anger, disgust, and negative opinions towards the Republicans since Ike, for example.
Only by trying to actually understand that view which is anathema to the one we most tightly hold, does actual progress occur, IMHO.
It is good to have passion; without it, the most important things in life would never get done.
Let us hope Ben does not ban all discussion from this blog that could be construed as “too
poltical”, for where there is Housing, there is Money; where there is Money, so is there Political Influence and by necessity Politics in general; we can all agree to tie our comments back to the Housing Bubble, upon which the Housing Bubble Blog came to be a unique and extremely valuable forum.
We bid you peace; over and out.
Fiscal, moral, and traditionalistic conservatives have not been represented well by the recent Republican party tenets. However, it would be wise to not discount the fervor and depth of such conservative beliefs.
Financial Times
Tarp investigator seeks evidence of book fiddling
By Tom Braithwaite in Washington
Published: April 12 2009 23:32 | Last updated: April 12 2009 23:32
The official policing the $700bn Tarp fund says he is investigating whether banks have “cooked their books” to secure bail-out money.
Neil Barofsky, special inspector-general for the troubled asset relief programme, told the Financial Times he was seeking evidence of wrongdoing on the part of banks receiving help from the fund, which was designed to ease credit conditions and support distressed industries.
“I hope we don’t find a single bank that’s cooked their books to try to get money but I don’t think that’s going to be the case,” said Mr Barofsky, who has been dubbed the “Tarp cop”.
Tinfoil hat time! Could this news have anything to do with Goldman Sachs reporting earnings early?
One can hope, and further hope that if so, this will some how come to light!
Nice link from Krugmans blog
http://cop.senate.gov/documents/cop-040709-report-executivesummary.pdf
One out of four ain’t good.
A review of these historical precedents reveals that each successful resolution of a financial crisis involved four critical elements:
• Transparency. (Nope.) Swift action to ensure the integrity of bank accounting, particularly with respect to the ability of regulators and investors to ascertain the value of bank assets and hence assess bank solvency
• Assertiveness. (Yep.) Willingness to take aggressive action to address failing financial institutions by (1) taking early aggressive action to improve capital ratios of banks that can be rescued, and (2) shutting down those banks that are irreparably insolvent.
• Accountability. (Nope.) Willingness to hold management accountable by replacing – and, in cases of criminal conduct, prosecuting – failed managers.
• Clarity. (Nope.) Transparency in the government response with forthright measurement and reporting of all forms of assistance being provided and clearly explained criteria for the use of public sector funds.
I am wondering how Professor Bernanke would grade a student’s exam paper which showed only 25 percent correct? I personally would give it an F without hesitation.
Recession causing lawyer layoffs at big firms
http://finance.yahoo.com/news/Recession-causing-lawyer-apf-14911769.html
Bernanke Bet on Keynes Has Meltzer Seeing 1970s-Style Inflation
Bloomberg
“Federal Reserve Chairman Ben S. Bernanke is siding with John Maynard Keynes against Milton Friedman by flooding the financial system with money.
If history is any guide, says Allan Meltzer, the effort will end in tears. Inflation “will get higher than it was in the 1970s,” says Meltzer, the Fed historian and professor of political economy at Carnegie Mellon University in Pittsburgh. At the end of that decade, consumer prices rose at a year-over- year rate of 13.3 percent.”
____
I’ve enjoyed my deflation.
Time to move forward.
“All that money is going to find a home,” says Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio. He sees oil prices increasing to “$80, $90, $100 before the end of next year” from $52 a barrel now.
Commodity prices may be more prone to rise as the world economy recovers because tight credit and volatile pricing will discourage investment in new supplies, says Mark Zandi, chief economist at Moody’s Economy.com, in West Chester, Pennsylvania.”
___
This makes sense to me. (commodity prices)
All except for the “as the world economy economy recovers” part.
Seriously - I think yeah the economy will “recover” but not in the way most economists are predicting. Taxes, government debt, and inflation (all intertwined) will continue to be a drag on world economies like never before. This will go on for 10+ years, and quite possibly for 100+ years; until such time as there is a fundamental shift away from our debt-based and increasingly-socialistic economies - if that ever happens.
What I’m saying is that I think we may never get back to previous levels of industrial production, and thus to previous levels of commodity usage - at least in terms of per-person usage. We may get back to previous levels in *nominal* terms after (if) population catches up.
That’s why I wouldn’t bet on commodity prices going back up in the near future.
That being said - what *may* drive them up is:
- Intentional cutbacks (e.g. OPEC); i.e. essentially price fixing.
- War-related shortages, either due to spikes in usage or to destruction in production capacity.
However I don’t think an economic recovery will significantly drive commodity (oil, wood, metals, textiles, etc.) prices up.
“That being said - what *may* drive them up is:
- Intentional cutbacks (e.g. OPEC); i.e. essentially price fixing.
- War-related shortages, either due to spikes in usage or to destruction in production capacity.”
What about running the money presses at full bore?
Well - that too. I was thinking more up relative to other things (i.e. relative to general inflation), including the stock market for that matter.
‘He sees oil prices increasing to “$80, $90, $100 before the end of next year” from $52 a barrel now.’
It sounds like we are in for deja vu all over again.
I lean towards the deflation camp, but I put a good portion of this year’s Coverdell contribution into oil stocks/ETFs. I’ve got a 15-year time horizon, and I believe the dropoff in drilling and exploration will catch up with us before then.
It sure looks that way. As the economy wallows, efforts to reduce dependence on petroleum will likely lose steam.*
* silver lining would be the demise of cap-n-trade
You can have stagnant wages, high unemployment and lowering home prices while general price inflation everywhere else. After all, the 1970s in the U.S. there were stagnant wages, high unemployment and high oil prices.
I’m in the inflation camp, hence I’m biased in Series I bonds, TIPS, gold bullion, and equities. about 16% in municipal bonds, which are not good during inflation times.
Geez deflation, I had you at hello.
Goodbye deflation, hello hyper-stagflation.
I would point out the much of the liquidity the Fed has injected has been structured in such a way that they can withdraw it in relatively short order. Much of it is repo agreements of relatively short duration, which can be unwound quickly if not renewed.
Of course, the risk is that the need to unwind occurs before the banks are actually solvent again, and that such a rapid sopping-up of liquidity would cause another wave of bank distress.
In my view, they’re walking a knife-edge, and it’s impossible to predict in which direction things will fall.
Yesterday after our guests went home, my husband and I went to see a great big old mansion recently foreclosed. It was fun to see - original kitchen, beautiful grand staircase balanced by basement servants’ quarters and rear staircase. Seven bathrooms with hundred year old fixtures. But the real story is that it was bought in 2001 for $400K and refinanced in 2005 for $1.5 million. And no improvements have been made - it’s decaying. Breathtaking fraud. But I guess it’s legal. I wonder what they did with the money.
“Commodity prices may be more prone to rise as the world economy recovers because tight credit and volatile pricing will discourage investment in new supplies, says Mark Zandi”
When you read through some of the oil industries web sites it is very apparent that new exploration is way,way off. I won’t be at all surprised to see oil back at $80 or so in the next year.
Oil will be at $80/barrell because the weakening dollar will first be seen in rising in imports.
BULLETIN GOLDMAN SACHS REPORTS HIGHER EARNINGS AND REVENUE, ANNOUNCES $5 BILLION EQUITY OFFERING
MARKETWATCH FIRST TAKE
Rescue the economy? Try the SEALs
Commentary: If banks act like pirates, they should be treated like them
By MarketWatch
Last update: 11:31 a.m. EDT April 13, 2009
WASHINGTON (MarketWatch) — President Barack Obama has put the wrong federal agency in charge of the rescue of the financial system. Instead of hiring Tim Geithner and the TARP, he should have hired the U.S. Navy and the SEALs.
When lawless pirates captured an American sea captain, the Navy put the hostage first. Now he’s safe, and the hostage-takers are dead or jailed.
When lawless bankers captured the global economy, Geithner put the hostage-takers first. And the hostage-takers are stepping up their demands: Change the accounting rules, guarantee us against any losses from the toxic assets, and rig the stress test so we all come out smelling like roses.
Old-timers may remember with nostalgia the days when it was easy to tell the difference between a major financial institution and a criminal enterprise. Those days are long gone.
Consider, for instance, the indictment unveiled last week against a San Diego street gang on multiple counts of mortgage fraud. According to federal prosecutors, the gang arranged to buy 220 properties for more than $100 million from 2005 to 2008. They overpaid for the properties by taking out liar loans using phony appraisals. They then funneled a kickback to a company controlled by the defendants, the indictment says.
Liar loans? Phony appraisals? Kickbacks? That sounds pretty much like the business model for the mortgage brokerage industry in California during the bubble. Maybe the real complaint is that the mob was muscling in on their territory.
Whoo baby - love that!
+1.
Awesome.
“Why are we rescuing banks when we should be maybe even throwing some of them (bankers) in prison.”
– Ben Jones –
American Visionaries Part 3
My take:
Disaster capitalism relies on financially engineered panic to shock the populace into a state of mind where de facto pardons of major culprits can easily be hidden behind rescue measures to avoid systemic collapse.
Word is the boyz want to get the BARF bucks paid back fast. They don’t cotton to Barney Fwank & Co. looking over their shoulders. Can’t say I blame them for that, I wouldn’t want that old gas bag banking queen anywhere near me.
Goldman Sachs to Raise $5 Billion in Stock Sale, Posts Profit…
April 13 (Bloomberg) — Goldman Sachs Group Inc., the sixth-biggest U.S. bank by assets, reported first-quarter profit that exceeded analysts’ estimates and said it plans to raise $5 billion in a share sale.
The New York-based bank earned $1.81 billion, or $3.39 a share, in the first quarter as a surge in trading revenue outweighed asset writedowns. The results beat the $1.64 a share estimate of 16 analysts surveyed by Bloomberg.
Chief Executive Officer Lloyd Blankfein is raising money to shore up finances and repay the U.S. Treasury $10 billion it received in October after the bankruptcy of Lehman Brothers Holdings Inc. Goldman Sachs, the most-profitable Wall Street firm before converting to a bank last year, is seeking to rebound after posting its first quarterly loss since the company went public in 1999.
“A return of taxpayer funds would manifest the bank’s strength and set it apart from the pack,” Isabel Schauerte, an analyst at Boston-based financial research and consulting firm Celent, said before the announcement.
First-quarter revenue was $9.43 billion. Fixed-income trading revenue was a record $6.56 billion, 34 percent higher than its previous record. Equity trading revenue was $2.0 billion.
“They don’t cotton to Barney Fwank & Co. looking over their shoulders. Can’t say I blame them for that, I wouldn’t want that old gas bag banking queen anywhere near me.”
So when given a choice, you would side with the Wall Street gangsters over someone like Barney Frank?
BTW, how was the Tea Party rally you went to?
“BTW, how was the Tea Party rally you went to?”
Probably about the same as your weekend in front of the peoples homes that received AIG bonuses, that were not or were or the devil made do it approved by Chris Dodd.
Here’s the way I see it.
Goldman Sachs is going to dilute shareholders in order to retain the ability to vastly overpay themselves without anyone noticing.
Where do I sign up.
Did I miss the discussion that the guy in FL, Goldman Sachs has hired the Big Gun law firm to pursue this guy cause he has a blog that exposes GS to the public and names names.???
Sorry ’bout sentence structure. eek.
Wall Street Journal
* APRIL 13, 2009, 2:54 P.M. ET
For Potential Renters, Foreclosure No Longer Means Denial
By Dawn Wotapka
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–During the easy-credit housing boom, apartment operators grumbled as waves of tenants fled to ownership. Now, post-crash, many multi-family operators struggling again to ink leases are trying to woo renters back by overlooking foreclosure-blemished credit histories.
“In the old days, we wouldn’t even rent to someone who had a foreclosure on their record,” said Jeffrey I. Friedman, president and chief executive of Associated Estates Realty Corp.(AEC). Today, foreclosures are “actually a targeted market.”
The change shows just how tough the economic downturn has been on the apartment sector, which has seen compound annual total returns shaved by more than half for the 12 months ended March 31.
Mounting unemployment has depressed occupancy averages to their lowest in years. With rent increases nearly impossible and landlords throwing in freebies to fill units, the bottom line is feeling stress. Turning “to lower-quality tenants is another indication of distress in the market,” said Macquarie Capital analyst Michael Levy.
It also reflects that the foreclosure pool contains too many potential renters to ignore. New foreclosures started this year are estimated by Barclays Capital at 2.8 million, with 3 million expected in 2010.
While many will bunk with family or rent another house, some eye apartments. Plus, plenty of people caught in the housing crash were good renters before being lured away by creative financing - tempting low payments and even no-money-down deals - that fed the foreclosure crisis.
“In the past few years, many classic renters were able to take advantage of lax lending standards that allowed them to get mortgages that, in previous cycles, they would not have been able to get,” Levy said. “You have hundreds of thousands of potential renters struggling to keep up with their mortgages.”
In Denver Colorado, commercial property right on fwy, reduced price from $3,000,000. to $1,500,000.
Woopsy daisys.
Have the photo saved, but don’t know how to forward that attachment.
What do you guys think of Obama opening up Cuba? I think it is awesome. It is ridiculous that everyone else can go to Cuba except us. It is ridiculous that we cannot legally buy Cuban cigars. It is ridiculous that we shunned Cuba all these years because they threw out our mafia families.
Totally ridiculous.
Correct me if I am wrong, but didn’t Slick Willie have a fondness for Cuban cigars?
He did, and they are EXCELLENT.
LOL
And now I am remembering some kind of sick humor involving Monica and Cuban cigars… Those were the good ole days!
I agree with your conclusion, but not with your reasoning (if you can call it that) about mafia families.
What part of my reasoning don’t you agree with, or understand? Castro came to power after dictator Batista was overthrown. Why was he overthrown? There were many reasons, but one of them was the disgust with the way Batista let the mafia take over Havana. And once Castro was in power, the first thing he did was throw them out. And then the mafia made many attempts on his life.
You have to understand something. Cuba is 90 miles off the coast of Florida. This means any law that the USA can come up with is irrelevant in Cuba. Gambling. Prostitution. Anything goes in Cuba and it was worth billions to the mafia. Within 30 minutes you can be in Cuba doing anything. And as long as Batista was in power that was going to stay that way.
Castro and his fellow Cubans were right to throw that asshole out. He was bought and paid for by people that could care less about the Cuban people.
Please let me know of any inaccuracies you find with my facts.
I think it’s a smart idea. And Obama is handling the issue smartly.
Me LUV Olygirl. Me hav lil vizit wit innyone hoo sayz shee not kool.
- Bigfoot
http://en.wikipedia.org/wiki/File:Statuette_Vulcanus_MBA_Lyon_A1981.jpg
He’s Vulcan. Dont hold it againt him. I dont.
OK - got to give my opinion on the trailers (I guess that’s what they are right?).
Generally they’re spot on, presenting a lot of the viewpoints that are given on the blog. To be honest though - just a bit too artsy and a bit too little of substance for my taste.
I’d like to see in-your-gut facts and figures and charts, and calling out more specific responsible parties - especially politicians. It’s great to call out guys like Mozillo, but IMO he’s small potatoes compared with the real culprits of the game. I’d like to see calling out of Fannie Mae and Freddie Mac and guys like Barney Frank for their role. Bush for his “ownership society” crap. Clinton for his pushing of CRA and Fannie Mae credit loosening. The banking institutions like Goldman Sachs, JP Morgan, Citibank, AIG, and some specific names like Joseph Cassano etc. - guys who were the drug kingpins on the front end. And at the very top headline of the marquee - Alan Greenspan - for his insane interest rates and pushing of ARMs.
Seems like there should be more info quantifying just how insane it got - how high prices got compared with historical norms (over double), how in debt everyone really got, etc. Guess it’s the engineer in me - I love graphs - especially ones showing the bubble itself, and the rise in foreclosures would be good.
One big culprit too that people hardly ever mention anymore is the huge preponderance of “Flip This House” etc. TV shows. Heck in 2005 there were 20 such shows!
Also to be honest I’m a bit disappointed in the “impact” of the various shots of foreclosures and half-completed housing etc. They look mostly just like regular construction sites. It seems like there could be a lot more trashed foreclosures, houses with overgrown yards and with slime-filled swimming pools, streets lined with “for sale” and “foreclosure” signs, etc.
Loved a couple of the innuendos in the western town though - the undertaker, and the “leadership” with bandannas on :).
This is an interesting project that still has a year or so to go, so allow that they may be thinking about some of the stuff you are.
Had you been in Vegas, you would have seen these weren’t normal construction sites. When something is falling to hell, and it’s new, it gets your attention. It did really remind me of Texas in the 80’s.
As far as foreclosures, we didn’t have any authority to go to those. The film crew is coming to my little town for more interviewing and then I am going to show them some foreclosures. But I have the insurance and authorization to do so. Now, whether we’ll see gross or nice will depend on what’s on the list that day. I can tell you most are fair to very nice condition. Some are disgusting. But you can see foreclosures any day, any year. To see brand new, multi-million dollar projects falling apart, half-finished? Maybe not again in my lifetime.
So get this - the week after announcing a $3B profit Wells Fargo says they may need $25 Billion more from the treasury!!!!
el linko
April 13 (Bloomberg) — Wells Fargo & Co., the second- biggest U.S. home lender, may need $50 billion to pay back the federal government and cover loan losses as the economic slump deepens, according to KBW Inc.’s Frederick Cannon.
KBW expects $120 billion of “stress” losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote.