Bits Bucket For April 24, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Harvard’s Feldstein Sees U.S. Inflation Danger After 2010…
April 23 (Bloomberg) — Harvard University economics Professor Martin Feldstein said inflation will emerge as a threat to the economy after a sustained recovery develops next year.
“In the next few years inflation is going to be the bigger problem” than deflation, or widespread declines in consumer prices, Feldstein said in an interview with Bloomberg Radio. He also said “we’re not going to see a sustained turnaround in the economy until next year.”
Feldstein, a former head of the National Bureau of Economic Research and adviser to President Ronald Reagan, warned that the Federal Reserve will have a challenge in heading off inflation because of how it’s conducted monetary policy during the crisis.
Instead of expanding the central bank’s balance sheet by purchasing easy-to-sell Treasuries, the Fed has snapped up mortgage securities that are likely to be tougher to use as a tool to soak up cash, Feldstein said.
In an earlier interview with Bloomberg Television, Feldstein said he didn’t anticipate a lending boom from banks judged to have passed U.S. regulators’ stress tests on their balance sheets. Results from the reviews are scheduled for release May 4.
Not even Feldstein’s circular logic can stay on the track.
By “sustained recovery” I assume he means back to the go-go days of the past decade. And that works without a lending boom, just how?
Of course, he could mean back to 1980 as a recovery.
I think Feldstein is right. If you lived in the 1970s, you would know that you can have high inflation at the same time as high unemployment and no growth. That’s stagflation.
Yep.
IMO we are in for exactly that - a really long period of stagflation.
packman,
Right, and Feldstein seems gleefully oblivious to the fact that European banks are facing what’s been described as a “hydra-headed” problem in that they have exposure to bad bets on U.S Comm. RE as well as fires in their OWN backyard!
Unlike the boomers, I’ve always kind of preferred the 70’s anyway?
As a boomer, I have a real fondness for my experiences in the 70’s. It was a great time to be young in many ways.
However, we didn’t worry about health insurance or similar things that become more important as you take on “adult” responsibilities.
whyoung,
Even by decade’s end, I still wasn’t 21. So my perceptions are bound to be different than those that already had steady GF’s, rents and responsibilities. Such as they were in the 70’s.
Yet I don’t recall even “adults” so much as worrying about stuff like health insurance let alone obsessing about it? I DO recall however growing up and having a largely normal life without -any- health insurance at all! I think we had our parents sign a slip for $1.79 in case we got hurt in football practice?
Why should we trust a former adviser to President Reagan? Is he saying this time…to stock up in gold? PMs? treasuries? We’ve heard all of that before.
In advising Reagan on how to create voodoo economics, he helped construct the entire economic Ponzi scheme to begin with, what with all the deficit spending and focus on enriching stockholders and asset holders at the expense of workers.
“On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics.”
You heard the man.
_
_
Community Reinvestment Act rammed through by Tp O’Neil and the Dems, signed by Carter was the start of it all. We are repeating ourselves with the Dems and HR 600. 105% FHA financing. To $625k in Pismo Beach.
Yep Yep
Yep, and I believe that is where we’re headed. It’ll have many great benefits since it will crush the economy, savers, workers, etc. while rewarding those who get to feed at the Fed’s trough of printed fiat money.
You can easily have high inflation and no jobs: just keep printing money but don’t bother to employ anyone.
And now China ‘fesses up…They increased their gold stockpiles by 75% since 2003. Still a drop in the bucket compared to what they got in treasuries though
http://www.financialpost.com/news-sectors/story.html?id=1530063
the Fed has snapped up mortgage securities
OMG, “snapped up” again, in this context…
Agree 100%. We are in for a decade of pain. We cannot print away our problems. Not happening.
It will be worse than 70s.
In the 70s, a high school grad could get a job at the local blue collar shop and afford an apt by themselves. Yeah, the job market was bad, (though I could always find a job until the mid 80s) but the cost of living vs wages wasn’t as out of whack as it now.
Now? A college grad might be able to afford an apt by themselves. And the under-the-radar street hustle jobs that existed then have been outlawed. And real wages haven’t match real inflation.
‘Now? A college grad might be able to afford an apt by themselves. And the under-the-radar street hustle jobs that existed then have been outlawed. And real wages haven’t match real inflation.’
It is almost like some kind of entropy is happening but since we are in a pseudo open-system now, the only thing that can happen is permanent heat loss.
Help, Someone just evaporated the blog!
Amazing that you are able to post!
False alarm. It seems my feeble brain was easily stymied by the distinction between the weekend topics/bits blog. Maybe I could be a realtor?
HAR!
Thanks for the giggle.
Leigh
Excerpts from Bloomberg:
Hamptons Home Prices Drop 23% on Wall Street Firings
By Oshrat Carmiel
April 23 (Bloomberg) — Home prices in the Hamptons, the oceanside getaway of celebrities and Wall Street financiers, plummeted in the first quarter as the financial crisis cut demand for vacation properties.
About 23,300 Wall Street employees lost their jobs in the year through February as banks worldwide posted losses and mortgage-related asset writedowns of $1.3 trillion. The credit crisis that claimed Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Bear Stearns Cos. also pushed bonuses down 44 percent in 2008, state Comptroller Thomas DiNapoli said.
Damon Liss, a Manhattan interior designer and real estate broker for the New York-based Corcoran Group, has been trying to sell a three-bedroom East Hampton cottage since January.
Liss renovated the house, added a swimming pool and new oak floors and then listed it for $1.33 million. In April, he cut the price almost 10 percent to 1.2 million.
“The lower the price the more likelihood it’s going to sell,” he said.
Motivated sellers will follow, Dottie Herman, chief executive officer of Prudential Douglas Elliman, said in an interview.
Dead Market
“In January and February there was basically nothing going on,” Herman said. “There are probably people in the financial sector that really have to cut back.”
In neighborhoods that are close to the ocean where properties sell at a premium, the median home price dropped 45 percent to $637,500 from the year earlier quarter, Miller Samuel said. That’s the biggest decline among all Hamptons neighborhoods and is known as “south of the highway.”
The overall drop in sales is the biggest decline since at least 1992, said George Simpson, owner of real estate data company Suffolk Research Service Inc.
“It’s not a very happy place out here,” Simpson said in an interview.
The dollar value of all Hamptons transactions in the first quarter plunged 62 percent form a year earlier to $298 million, according Suffolk Research.
Now it’s turning into a real emergency.
““The lower the price the more likelihood it’s going to sell,” he said. ”
This guy is a genius! Other statements heard:
“Every time I throw my ball in the air, it comes back down.”
“When I close my eyes, it’s kinda like turning off the lights.”
“It’s not a very happy place out there”
Sigh… What can WE do to make it all better for you? Please, anything. Nothing would be too much to ask!
Oh… that’s right, we’ve -already- bent over backwards and it STILL wasn’t good enough!
“The overall drop in sales is the biggest decline since at least 1992, said George Simpson, owner of real estate data company Suffolk Research Service Inc.”
Suffolk them!
these are 2nd homes, geesh! these sorry saps are going to be marooned in their manhattan luxury condos for the summer. boo hoo
Technically, we’ve been bending over forwards
Spincter, meet Joshua Tree……..
X-GSfixer,
LOL! Sorry, my bad. Technical issue, but… important.
Hey Hamptons, can you hear me now?
So this BofA story is getting big. It looks to me like Bernanke and Paulson colluded in defrauding BofA shareholders, and left the SEC out of the loop.
Text of Cuomo’s letter
…
On Sunday, December 14, 2008, Bank of America’s CFO advised Ken Lewis, Bank of America’s CEO, that Merrill Lynch’s financial condition had seriously deteriorated at an alarming rate. Indeed, Lewis was advised that Merrill Lynch had lost several billion dollars since December 8, 2008. In six days, Merrill Lynch’s projected fourth quarter losses skyrocketed from $9 billion to $12 billion, and fourth quarter losses ultimately exceeded $15 billion.
mmediately after learning on December 14, 2008 of what Lewis described as the “staggering amount of deterioration” at Merrill Lynch, Lewis conferred with counsel to determine if Bank of America had grounds to rescind the merger agreement by using a clause that allowed Bank of America to exit the deal if a material adverse event (”MAC”) occurred. After a series of internal consultations and consultations with counsel, on December 17, 2008, Lewis informed then-Treasury Secretary Henry Paulson that Bank of America was seriously considering invoking the MAC clause. Paulson asked Lewis to come to Washington that evening to discuss the matter.
…
Bank of America’s attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and Board would be replaced:
…
Secretary Paulson’s threat swayed Lewis. According to Secretary Paulson, after he stated that the management and the Board could be removed, Lewis replied, “that makes it simple. Let’s deescalate.” Lewis admits that Secretary Paulson’s threat changed his mind about invoking that MAC clause and terminating the deal.
…
It also bears noting that while no public disclosures were made by Bank of America, Lewis admitted that Bank of America’s decision not to invoke the MAC clause harmed any shareholder with less than a three year time-horizon:
“Q. Wasn’t Mr. Paulson, by his instruction, really asking Bank of America shareholders to take a good part of the hit of the Merrill losses?
“A. What he was doing was trying to stem a financial disaster in the financial markets, from his perspective.
“Q. From your perspective, wasn’t that one of the effects of what he was doing?
“A. Over the short term, yes, but we still thought we had an entity that filled two big strategic holes for us and over long term would still be an interest to the shareholders.
“Q. What do you mean by “short-term”?
“A. Two to three years.”
Notably, during Bank of America’s important communications with federal banking officials in late December 2008, the lone federal agency charged with protecting investor interests, the Securities and Exchange Commission, appears to have been kept in the dark. Indeed, Secretary Paulson informed this Office that he did not keep the SEC Chairman in the loop during the discussions and negotiations with Bank of America in December 2008.
…
(empahsis mine)
Yes, but when saving the entire World is at stake you just cant expect everyone to understand. Mere mortals just could not possibly ever get it. If only the sheeple could just quit pestering Lewis and Bernanke and all of the other gods and just let them save us.
this BofA story is getting big
Yeah, I was kind of surprised how few people were interested in it when it was unfolding yesterday.
The latest that I could find was that it was Paulson who was really responsible for threatening Ken Lewis. Bernanke is most likely innocent. However, it is really Lewis who will take the brunt of the liability for not following disclosure rules and not representing the shareholders. All he cared about was saving his own skin, which he now stands to lose anyway.
I wonder what will happen to him?
“this BofA story is getting big”
Indeed it is. Lewis obligation is to the shareholders… end of story. Paulson and Bernanke are thugs that need to be hung high.
Right, and one commenter yesterday said that BofA -exists- to make profits for the shareholders… ( *not Ken Lewis! )
But no one here should be surprised in the least by any of this? Lewis’ forced and unnatural smile that he was “pleased to be adding the power of the name of Merrill Lynch to BofA” was to finance what knocked up farmer’s daughters are to shotgun weddings.
The problem is that it seems like Geithner has manipulated the Wall St story line to make sure the media doesn’t spend much time focusing on this. Witness all the hype surrounding the “stress test” results that will be released today.
Julius,
Right, and we’re all on pins and needles awaiting it!
Another example of how far into the ethical gutter our so-called “leadership” has fallen. He should have invoked the MAC, then resigned on principle. It isn’t like he’s going to be left impoverished if he quit.
What I find interesting is the fact that Paulson used the threat as leverage, and Lewis felt threatened enough to comply. Makes you wonder how many other people he was talking to, and who has really been behind some of these “stupid on it’s face” moves.
Add this to the fact that Wagoner @ GM was essentially fired by Obama, and you start to think that tin-foil hat types are right.
Makes you wonder how much coercion they are going to do to make a Chrysler and GM Ch 11 go “smoothly”. There are thousands of subcontractors, and it would only take a few of them with some good lawyers to muck up the plan.
Fearless prediction: Bankrupting GM and Chrysler will NOT go smoothly. The laws of unintended consequences will shift into overdrive, several critical sub-contractors will shut doors……..expect announcements that almost ALL North American assembly plants and suppliers (including the imports) will have extended summer shutdowns starting around June 1 (if for no other reason, to sit back and see what happens).
What will another 2-3 million on the unemployment rolls do to the unemployment rate?
Bingo. Invoke the clause. Resign. And tell everyone that he is resigning because Paulson told him he would be removed if he invoked the clause but he owed more to his shareholders. He could have come out of this a hero, at least to the Merril shareholders. AND Paulson would have had to resign immediately. You can’t have the Sec Treas in a conspiracy to commit securities fraud. He would have had to go
I can’t speak for everyone, but I am interested in the story but there just isn’t much to say about it. We already know corps and govt are in bed with each other. At this point I’m just quietly watching to see how it plays out.
My guess, Lewis will be hung out to dry for violating the circle of trust. BO might have to do something to make his admin seem more credible than the previous in this regard…but maybe not. The appearance of change may itself be enough.
bluprint,
Lost basically an identical sentiment post. I think that’s about enough feigned indignation already? No surprises here. Yet I’ve no idea what the current admin. would have to apologize for? Merrill’s fate was sealed long ago.
Politically, the current admin won’t have to apologize for anything, they just have to play the “it was the last administration” game to give the appearance that things are different now.
It’s an interesting situation. Presumably the govt (according to many people) is supposed to make sure things don’t collapse, that’s the premise for all the bailouts and such. So wouldn’t Paulson’s argument be that we (the govt/treasury) were trying to prevent collapse and were pressuring BoA to participate and take a bullet for the larger cause? BoA is indebted to “the american people” and did the right thing by not backing out of the Merrill deal.
You can’t serve two masters. In this case that’s exactly what Lewis was faced with.
bluprint,
That’s just the sad truth. “An offer you can’t refuse”
Again I realize this won’t be popular here, but I ‘do’ credit Hank with not letting the -entire- system collapse under his watch. It will take -years- to sort out just what happened here. Years he didn’t have.
Hey, I’ve been handed a few “lit sticks of dynamite” in my time and did the best I could with what I had. I was second guessed endlessly and it took me years… to get comfortable w/ the decisions I made. Even given the advantage of retrospect, I’m convinced NO ONE given the same set of circumstances would have done any better!
As long as Paulson didn’t do something illegal (unethical? immoral? unseemly?) then I would agree with you…because that means it was Kenny-boy’s decision to make. However, if he coerced Ken Lewis (legal definition) then he should be held accountable for that.
What a freaking joke. Bank of America forced to absorb the losses of that crooked investment bank, Merrill Lynch, and now we’re all going to absorb the losses of Bank of America. DinOR, you think the whole system would have collapsed had Merrill fallen, you haven’t seen anything yet…the FDIC is running out of money, who’s going to bail out Bank of America? Who’s gonna bailout FDIC and the Fed?
Merrill should have been allowed to fail, along with their creepy crooked friends at Goldman Sachs, and saving their butts is going to drag all the rest of us down with them.
Andrew Cuomo is a hero for exposing this, and would be even more so if he’d follow through and prosecute Paulson and Bernanke and Lewis.
lag,
I feel… your rage! Really I do. But don’t take my comment out of context? All I said was that things didn’t utterly collapse ( that ‘day’ ) And really nothing more.
We were home to the nation’s 14th bank failure this year, not a block from my office. That was -another- $50 mil. FDIC *doesn’t* have. I get it.
Paulson’s the biggest crook of all. Got the idiots in the Dem Congress to ‘blank check’ him 700 billion. Then flips 100 billion to AIG. Paulson has a vested interest in Goldman as his 700 million in retirement stuff is at Goldman where he worked for 30 years. AIG then sends 15 billion to GS at 100 cents on the $ for their insurance; as well as 8 billion to Deutche Bank (Greenspan’s employer) Credit Suise and the French.NO conflict eh? Get the horses, some ropes, and the trees.
Kenny’s gonna git Wagonered.
BP, Lewis should get hung but the real problem is Bernanke and Paulsons criminal behavior.
I’m not sure about Lewis at least with regard to this particular issue. (he’s probably done plenty of other stuff wrong being CEO…but I’m limiting to this issue)
See my recent post above, if govt is trying to keep the financial infrastructure from failing (that includes Dems, Paulson was doing the executive stuff but he was funded and greenlighted by a Dem congress) is it ok for govt to put pressure on one of the subject firms to make it all work together? I would think you of all people would be for that.
I suspect in a slightly different situation some would criticize BoA for not “helping” with the whole problem when they were recipients of bailout funds.
Having said all that, you know I’ll tie the knots if we can hang ‘em all, including the blue ones.
That’s ridiculous. Paulson and friends effectively pushed a standing CEO to avoid releasing accurate information about a business plan he was engaged in…sounds like all sorts of SEC violations to me.
And the validity of the arguement that we should look the other way because Paulson was “trying to keep the financial infrastructure from failing” is highly questionable. Many of us have argued that these sorts of forced mergers didn’t need to happen to keep the system viable; others of us have argued that perhaps “keeping the financial system viable” (i.e., maintaining the status quo of the system at that point) wasn’t the sort of noble goal the government told us it was.
As far as I’m concerned here, the end certainly didn’t justify the means.
We give a pass to govt all the time for doing things that wouldn’t fly outside of govt. Why should now be any different?
I remember seeing Thain & Lewis when they testified infront of Congress (before December, I think). Not knowing who is who initially, it was surprising that Thain seemed very upbeat and confident, and Lewis very uncomfortable and as if defeated. This observation struck me as odd.
Something to ponder -
Lewis is a paid employee of the shareholders and depositors.
In this spirit, he was required to invoke the MAC.
Instead he protected his paycheck.
Lewis may want to stay clear of his basement.
Leigh
Of course in light of Lewis’ behavior, one would think the natural reaction of investors/shareholders would be not to trust bankers again. But…
One would thing, however (along the lines of a discussion yesterday):
- How many shareholders actually *know* that they hold shares? I’ll bet not many (e.g. their shares are wrapped up in pensions, ETFs, 401(k), mutual funds, etc. - such that if someone did enough digging they’d find out they hold shares, but 99.9% of people don’t do such digging)
- How many shareholders are private vs. public (e.g. the U.S. government actually owns many of these)
etc.
There are no shareholder revolts anymore, because the shareholders are too far removed.
Would this situation rise to the level of blackmail? That’s what it sounds like to me.
There are no shareholder revolts anymore, because the shareholders are too far removed.
So even if you do own shares you can’t convince anyone that what’s happening is theft. They will only get mad when their 401k is in the toilet.
“They will only get mad when their 401k is in the toilet.”
Even then - their anger is directed towards their brokers for investing in the “wrong things”, not realizing that even good brokers was just as clueless as they were about things like this.
So many 401Ks are in the toilet, and so very, very few are angry about it, so far.
Everybody is angry about it. But they have no recourse.
Are they protesting? Yes. You just aren’t hearing about it.
Lawsuits? Lawsuits cost money. Money they no longer have. The ones that still can ARE suing.
Are the fraudsters being prosecuted? Yes. But the sheer numbers have gridlocked the system. (Google News)
In all sincerity and with respect, do you have a plan?
People in general are dumb.
One would also think that most people would have computed how much house they could afford to pay for LONG TERM and not make silly assumptions that their salary will magically double in a few years to pay for their absurd mortgage.
One would think that people would learn that if you have to lie about your income to get a loan, maybe you can’t afford that loan.
When one looks at all the other terrible decisions made by the average doorknob “consumer” these days I fully expect people will be back to trusting bankers and looking for a way to spend 110% of their paycheck each month the moment this crisis seems past.
Talking about basements, has antone noticed that the ” suicide of the CFO of Freddie isn’t getting much news play. Ok, so he worked there for over 16 years, he was deeply invloved in the federal audit.
1. Was he going to go public with the info that the fed wants to be kept quiet?
2. Why would a 41 yr old man with a great job, nice family commit suicide?
3. Suspected suicide.
With all that the government is doing to prop up this financial nightmare, I wouldn’t put anything past these crooks.
If a robber of a convenience store will kill a clerk for $50.00 bucks, what would robbers of billions do to get away with it?
His suicide/death may have nothing to do with his professional life. For instance, it’s possible he found out his daughter was dating an HBBer and couldn’t handle it. I’m working on my list of suspects.
hahahahaha, Al, oh Al.
YEOUCH!
When I first heard that this was a “suspected suicide”, I chuckled. That’s like when you hear that a big-name celebrity died of a “heart attack” or of “natural causes” - both are usually euphemisms for “drug overdose”. Here, when you look at the rest of the guy’s background a suicide just doesn’t add up.
I seriously wonder what this guy was threatening to reveal. I mean, if the government game plan has suddenly been stepped up to the Mafia-esque level of offing media informants, than what exactly could this guy have known about?
Numbers about the deep derivatives pit of German banks have been leaked today, anonymously. That would have been one possibility. Deep Throat style…oh one can hope.
Yep, people tend to get “hung” in basements these days.
from the Charlotte Observer (10/22/08):
Bank of America Corp. chief executive Ken Lewis has decried the big paychecks of financial services executives, but he isn’t asking for a pay cut.
In a “60 Minutes” interview broadcast Sunday on CBS, Lewis said Wall Street executives were overpaid. “It’s more egregious in financial services than any other industry that I know of,” said Lewis, who made $17 million last year. “We need to cut back compensation in this industry.”
But bank spokesman Bob Stickler, asked this week if Lewis would request lower pay, said: “It would be presumptuous for him to do that.”
Lewis has earned around $213 million since he became CEO in 2001, according to the Observer’s calculations, which counts salary, bonus, restricted stock, exercised options and other compensation. His biggest payday came in 2006, when he made $96 million, most of it from exercising stock options he had accumulated over the years.
Throw the shareholders under a bus to bail out the banksters…that’s the new American way.
Maybe some more people involved will be “disappeared” or otherwise removed from the game like the CFO of Freddie Mac. Knowing too much can be unhealthy!
Maybe Lewis disclosed all of this BECAUSE of what happened to the Freddie Mac guy, who knows, maybe he had reason to believe he’d be next.
Maybe Lewis disclosed all of this BECAUSE of what happened to the Freddie Mac guy, who knows, maybe he had reason to believe he’d be next. I sure hope many of those “in the know” have already filed documents with trusted others “to be opened in the event of my death.” Of course, their loved ones can also be threatened.
Brendan Barnicle -no kidding, a guest analyst on CNBC- just said the maket is stuck on the bottom.
What does Spongebab have to say?
Man. I can’t even blame that on fat finger syndrome.
By “Spongebab” I thought you meant Maria.
Arrrgh, We been keel hauled me maties.
I posted this other day:
Well - it looks like the first volley in the fight has already been fired, with another economist (formerly of Fannie Mae - surprise surprise) already questioning Robert Shiller’s historical data as precedent.
I found the turn around in housing prices pretty unbelievable. Perhaps the FHFA has gone to a market to model methodology?
“the long-term chart is based on a concatenation of different time series of home prices which use different methodologies, have different samples, measure different things, and all in all are, well, different.”
Looks like the upshot of the article is that Shiller’s data is derived from a very small sample with weak statistical power (i.e. an unacceptably large p-value for the statisticians out there). Shiller also uses a “concatenation” of poorly constructed to useless indexes, including figures from FHFA derived solely from data supplied by Fannie and Freddie, therefore missing the entire subprime market. He also fails to account for basic improvements in home quality and longevity.
However, whether you believe Professor Lawler’s or Professor Shiller’s charts, the trend looks very bad. Lawler makes a fantastic argument that the government should fund research into home price data independently. Given that I have had a very hard time finding reliable numbers independently myself, I would agree with that.
Considering trillions of dollars are being placed on the line based on what are likely inaccurate and overly optimistic projections by the Feds (Gee what at surprise!), we need to at least come up with a set of numbers that we can agree with or that at least have transparent biases.
Sorry, but LOL at the suggestion that government-agency-produced data could be either transparent or biased. One need only look at the recent FHFA fantasy home price index numbers and compare them with the vast array of other data, including experiences on the ground, to know how that would work out.
Nevertheless - you’re right it is a sticky problem, and I personally certainly haven’t looked deeply enough into Shiller’s numbers to know how accurate they really are vs. Lawler’s.
Generally I would trust university professors’ data before I would trust either government agency numbers or (obviously) industry numbers (NAR etc.)
“Sorry, but LOL at the suggestion that government-agency-produced data could be either transparent or biased. ”
Unbiased, I mean.
Generally I would trust university professors’ data before I would trust either government agency numbers or (obviously) industry numbers (NAR etc.)
Well, where do you think Shiller ultimately gets his numbers? That was Lawler’s entire point. His statistical sample is far too miniscule to really reflect what is happening nationwide.
I was making the suggestion that the government fund independent research into this data, beyond just grant support for one person, and beyond the reach of partisan threats of funding.
It could be along the lines of the NIH or Census bureau, but obviously much smaller in scope. These agencies differ from FHFA in that they are non-regulatory and purely provide data for use by other agencies, therefore mostly eliminating partisan conflicts of interest.
Imperfect, I realize, but better than what we have now. Heck, make it a state regulatory function instead of a federal one, for all I care…you can just compile the data nationally later.
I believe that Shiller doesn’t “get” his numbers from anywhere - he actually created them from research on individual homes. I can’t speak to the sampling levels.
Re: Census bureau - don’t forget that these guys report directly to the White House now. Yes technically the census bureau is non-regulatory, but the data from there is definitely used - both directly and indirectly - for regulatory purposes.
The FHFA is definitely a regulatory agency. Note that the ‘O’ in OFHEO (now FHFA) is “Oversight”.
I agree, FHFA is regulatory and therefore not an appropriate vehicle for data gathering. Shiller’s data is the best we have, but as long as people use it with the caveat that it has numerous flaws (beyond just sampling) that even Shiller admits to.
Yeah, really - it seems like the Shiller data has been considered the “gold standard” in the real estate arena for quite some time. Why start questioning its legitimacy just because Shiller’s current data doesn’t square with the current administration’s agenda? Plus, does anyone really expect that government numbers would be “more honest” or “more accurate” than private numbers in this department?
it seems like the Shiller data has been considered the “gold standard” in the real estate arena for quite some time. Why start questioning its legitimacy just because Shiller’s current data doesn’t square with the current administration’s agenda?
Yeah, and they used to do pneumoencephalograms (injecting air into the skull and then x-raying it) until about 30 years ago. It was the gold standard.
Then the CAT scan was invented (by a record company, no less), which was safer, more accurate and much more comfortable for the patient. But according to your reasoning, why try to improve something when you already have a gold standard?
And Shiller’s methodology is not being challenged by another academic because “it doesn’t square with the current administration’s agenda”. What possible incentive does the government have to say Shiller is underestimating the future fall in housing prices (as Lawler is)? That is a very nonsensical straw man argument.
Troll, please go back to DailyKos. This is a housing blog, not a defend anything related to Obama or Liberalism, even tangentially, defense blog.
“What possible incentive does the government have to say Shiller is underestimating the future fall in housing prices (as Lawler is)?”
You have it backwards. Since Lawler says that Shiller understates the actual long-term rate of incline, he’s implying that the Shiller is overestimating (not underestimating) the future fall, since under Lawson’s model prices wouldn’t have to fall as far to get back to the historical rise line, since his “normal” line is higher and rising faster going forward.
The incentive the government has would be to try and prop up home prices; an incentive to which they’ve already admitted in fact. They can attempt to achieve this by convincing people that prices are already down close to their historic norms.
Packman,
You’re right…you caught me being sloppy again. But for the record, if the opposite had been true, I would still just as vigorously defend the integrity of data and the right for academics to debate their own methodology.
Whom would you trust: The soft-spoken, independent academic who has nothing to gain by distorting the real estate price picture, or the hedge fund consultant?
Aren’t those soft-spoken, independent academicians responsible for the whole global warming thingy? I heard from a very reliable source (Rush Limbaugh) that all these folks do is make stuff up to get government (taxpayer) funding.
packman,
This is a non-story.
I looked at superimposed graphs early this morning.
They both say the same thing.
Think this guy just wanted attention.
Agree that it’s a minor difference, but:
- It’s a difference nonetheless, where the new guy claims that the long-term trend in home prices is higher than the Shiller trend.
- Like I said I think it’s just the first volley - certainly not enough to even win a battle one way or another and certainly not a war, but it does begin to present a case that Shiller’s data may not be accurate, and therefore open the door for being replaced at some point with other less-subjective data later.
Note - I’m actually not trying to defend the accuracy of Shiller’s data here - heck it would take tons of time that I don’t have to give strong evidence one way or another. Like PB says though - look where each’s bread is buttered.
They will do ANYTHING to keep the Lie going. Make up numbers, make CFO’s vanish, whatever it takes.
People MUST get back into debt and start churning houses again for the all-consuming Ponzi scam to continue. How else are they going to get rich? If we had real jobs in a real economy, workers would be able to afford to actually buy houses vs. rent them from a bank, and we can’t have that!
Battered U.S. cities buy foreclosed homes to rebuild…
RIVERSIDE, California (Reuters) - California’s Riverside County has been one of the most punished areas in the U.S. housing crash and now local leaders are among the first in the nation with a program to buy foreclosed homes and sell them back to young families.
The city of Riverside is using money recently made available by the Obama administration to help communities lure buyers back to areas hit by a wave of foreclosures.
In recent weeks, Riverside began leveraging more than $6.5 million in federal Neighborhood Stabilization Program funds, added to its own redevelopment money, to purchase houses in the worst shape, fix them up and sell them to mostly first-time homebuyers. Other cities, like Chicago, are considering similar plans.
“Where a lot of communities are trying to figure out how to spend the money, or offering purchase funds or down-payment assistance, we’re actually very hands-on with our program,” said Eva Yakutis, the housing and neighborhoods manager in Riverside, California, a working-class community of 300,000 about 60 miles east of Los Angeles.
“We’re making the purchase, we’re overseeing the rehab, we’re overseeing the sale of the properties. We’re at the forefront of most cities or counties.”
California’s Inland Empire, made up of Riverside and San Bernardino counties, suffered some of the highest foreclosure rates in California during the housing meltdown, leaving behind thousands of boarded-up homes in blighted neighborhoods no longer attractive to young families even as prices dropped.
About 4,000 of Riverside’s 60,000 homes are in foreclosure and twice that number are considered to be at risk. Some 28,000 owners, or 1 in 27 Riverside County homes, defaulted on mortgages in the first quarter of the year, 35 percent more than a year earlier.
Home prices, which were plummeting, have leveled off, thanks in part to bargain hunters and speculators — but those aren’t the buyers coveted by communities seeking to rebuild. To address those concerns, Riverside’s program limits its participants to households with a combined income of $74,000 or less.
$6.5M / 4000 homes = $1,600 per home.
Not much fixing up you can do with $1,600.
you haven’t been watching HGTV have you?
you can get a perfectly manecured beautiful lawn for like 30 bucks. just need some lawn paint.
i first saw that 2 or 3 years ago and i still cannot get over lawn paint. i mean…i can see my grandkids face already…”tell me about when they painted their grass grandpa”.
THEY FRACKING PAINTED THEIR YARD PEOPLE!!!!!
how insane is that?
holy crap…can’t believe i forgot the MOST INSANE PART!!!
people LINED UP around the fracking block to BUY THE DAMN HOUSE WITH THE PAINTED GRASS!!!!
geez louise!!!
(please forgive me for losing it)
No, no—-it’s okay. I didn’t see that episode, or I’d a gone ape-p00p crazy, too, and then we could have lost it simultaneously and run around in circles screaming in unison.
I wonder if the HGTV episode of which you speak is on Youtube.
just talked to my wife and it was “flip this house” or “flip that house” and it was not HGTV but TLC she thinks. it wasn’t a recent episode…it was a couple years ago.
Well, did they do a super-cool paint job, with a Cubbies logo or R. Crumb’s Keep On Truckin’ guy or a python that swallowed a housecat or something like that?
I mean, we shouldn’t dismiss the fine art of lawn painting out of hand … should we?
Painting yards is insane.
They should be busy putting in the moats, razor wire and land mines. My little, marshmellow of a fat black lab, Cato, has been busy saving his pocket money to hire the big, mean german sheperd down the street as his personal bodyguard.
The use of “lawn paint” seems like a new nadir the battle for home sales. The old practice used to be to dump some short-acting fertilizer out there to green up the lawn in a hurry; but heck, why bother with that when you can just paint the grass green and act like it’s all good?
http://www.grassbgreen.com/Why_Paint_Grass_s/20.htm
I wonder how many people fail to notice that it’s painted grass. The stuff in you link actually looks pretty good. Talk about a pissed off buyer…
The same people with painted lawns bought this too:
http://www.sprayonmud.com/index.html
You can paint it. That increases the value like $10K.
Of course!
As we all know, if any upgrade costs $X, it increases the value of the house by 2 * $X or more.
So, based upon that realtor logic, one could generate infinite wealth by just repainting a room over and over again and then selling the house.
Hey, it makes as much sense as painting the lawn!
So now local govs are getting into the house flipping business… and they’re underfunded.
Isn’t this where it all started?
Yep. 10 years at LEAST. (dang)
news.yahoo.com/s/mcclatchy/20090424/wl_mcclatchy/3219015
This Pakistan issue is not going to end well.
No it won’t, and if Islamabad falls then it also threatens what little progress we’ve made in Afghanistan, and potentially causes an end to the détente with India due to a potenially extremist Muslim government. The previous US administration should have never pressured Musharraf to leave, even if he was an incompetent dictator…but maybe there was no choice because as long as he was seen as a pawn of the deeply unpopular US, his support base continued to erode heavily.
Musharraf was strongly anti-democratic and pro-US, but that led to a dip in his popularity. Now the replacement leader, Zardari, has poor alliances with the military because of his prosecution of impeachment proceedings against General Musharraf…this means that the Taliban and its allies have made stronger inroads and threaten to topple the government.
The only hope is that with Obama’s personal popularity as prez that a Pakistani government friendly to the US will be more popular and allow more effective anti-insurgency measures.
Imagine, an extremist Islamic government with nukes…yeah, I’m gonna sleep well knowing that.
When I was a kid, our own USAF dropped 2 nukes 9 miles from our house early one morning while I sleep. My Dad worked for those clowns and I knew the pilot and his son.
That was the 1st hint that my gov’t…was out to get me !
I’m assuming these didn’t detonate….
They partially armed, one was down to one safety, didn’t detonate but it was awfully, awfully close Julius.
http://www.ibiblio.org/bomb/armed_or_not.html
Yikes. That would have been a sheer disaster.
I remember hearing about something like this happening in Spain when two B-52s collided mid-air in the early days of the Cold War. One of the planes was carrying nuclear warheads, and when one of the devices hit the ground, it’s conventional “trigger” explosive was activated. The explosion didn’t cause a true nuclear chain reaction, but it did result in plutonium being spread over a fairly large portion of Northern Spain. The Spanish (wisely) then refused to let the US fly bombers in their airspace for the remainder of the war.
Pakistan issue is not going to end well ??
I hope it does not happen for the sake of all but my single biggest concern is a “event” occurring that we don’t see coming or something we are just choosing to ignore…It could induce a world wide meltdown beyond belief..It makes me very nervous and quite fearful…
If we could only get rid of religion we’d be so better off.
Then the power hungry dictators of the world would have to settle for ethnicity to start their conflicts.
Or land, or a place to put prayer rugs. Or pipelines.
I believe in the wholesaler (God). Skip the retailer. I agree.
stalin and hitler were in the “no religion is good” camp.
I am not afraid of terrorists with nukes. Couldn’t care less really. What I am terrified of is Americans not being willing to throw a crap load of nukes back at ‘em. Regardless of dead innocents.
If we truly go to war, which I do not hope for, we need to use the air force instead of sending men and women into harm’s way (when bombs blow their limbs off) with all the authority of a ACLU-restricted State Police officer. They can keep the lawyers out of interrogation as well.
use the air force instead of sending men and women into harm’s way (when bombs blow their limbs off ??
My exact point when I posted this yesterday;
Comment by scdave
2009-04-23 08:49:38
one root cause is the military budget over the last 25 years ??
Spot On Melvin…A antiquated, Bloated, Bureaucracy to the tune of 600 bil per year…
Then obvious right winger “amoney” got his panties all in a wad calling me a leftest…IMO, anybody that does not see our military as antiquated and wasteful is in denial OR is in the military and has a vested interest in the continuation of the gig…
Anybody that complains about the military needing to be “efficient” scares the heck out of me.
War is inherently an “inefficient” activity. The only way to make it “efficient” is to make sure it ends as soon as possible.
The problem with forcing “efficiency” is that you end up with weapons that are not effective, not adequately tested, or both. (Google “Douglas B-18″ or “Mark XIV torpedo”, “M-4 Sherman”, or “General Dynamics F-111″).
Our biggest problem is that we have a military presence in places that we don’t need to be anymore, like South Korea. Too many countries who are fully capable of defending themselves (and bearing the associated costs) are opting to “let George do it”, while spending money on their civilian economies.
Or, we could just stay out of yet another country’s internal affairs, let them go about their messy business of governance, and mind our own. Which, not incidently, sorely needs minding.
America was recently overrun by militarily-armed, religious fanatics who bombed, tortured, and tried to impose their draconian morality on the populace, abroad –and argueably at home as well. And guess what? We as a Country eventually got rid of them and their manicheans-in-charge.
It wasn’t pretty, and the world shuddered for a time, but America tried it, found it lacking, and is moving on. So will Pakistan, Taliban or no.
The threat of nukes simply levels the playing field–and provide an excuse for the US (and Israel, and Moscow, of late,) to invade for “security” purposes. Theoretically, Pakistan could put a man on the moon within the decade as well, but they won’t….
Take a deep breath–The Christianists didn’t nuke Iran. Nor will the Islamists nuke Iowa. The Hindus? That might be another story.
I’m not afraid of Pakistan’s or Iran’s missiles.
I’m terrified of their willingness to misplace a little fissile material and have it go boom at the Los Angeles docks that are just a few miles away from me.
I’m praying that there’s no Santa Anas that day (with apologies to Orange and Riverside counties).
The radioactive “dust” will catch you on the rebound. They are carried on the prevailing winds and go round and round the world…just like the Chernobyl and 3 mile island particulates did.
We should all have a more than a little Strontium 90 in our chromosomes by now
The nation was formed on a false ideology and deserves to be dissolved. Nukes do bother me, but what the big kahuna is 140 million people and rapidly growing with little by way of future prospects. If that isn’t a great breeding ground for future terrorists, show me another.
I can’t think of any good ending to this story.
Don’t worry! Pakistan is one of those small countries that don’t matter much. Barry said so during his campaign, weren’t you listening?
I was
Could someone parse the Ken Lewis/Hank Paulson/Ben Bernanke dust-up for me? Trying to make some sense of it. Like I’ve said many times, I’m not the sharpest tool in the financial shed.
Neither are they. Although they play ones on TV.
I was just reading Packman’s post above. Looks like there was a little Hanky-Bernanky going on. Of course, Lewis could always have said he wasn’t gonna do it and dang the consequences. He could have done that, if he thought it was the moral and legal high ground. But I guess he has to feed his family, right?
See above post - GMTA.
Leigh
palmetto,
Ah…! But after all the goodwill and celebrity he earned by digesting CountryFRIED, why stop there! He was their “hero”. A n-a-t-i-o-n-a-l hero. Their Go-To-Guy! And who doesn’t like being a hero! Personally, I think this is what this is all about.
OT: In the post-bubble world, one good thing about Countrywide is that it published lists of its REO properties, at least in California, with contact names with people who answer the phone. Others, like Wells Fargo, farm this chore out to a third party, which likes to play hide and seek with their information.
No, I haven’t bought anything.
Or maybe Lewis had some deeper understanding of what might lie in his basement should he refuse.
If he did that, he might have ended up having an “accident” in his basement…
If he did that, he might have ended up having an “accident” in his basement… Or he has loved ones within reach of the US Gov’t.
+10 colbalt. That there is t-shirt material…
I was thinking of making a shirt that says “F the FED”
Lewis thought he had a Dimon in the rough, Jamie. Bear markets are stern teachers. The invisible hand overwhelms 2B2F policies.
“Could someone parse the Ken Lewis/Hank Paulson/Ben Bernanke dust-up for me? ”
Hank says, “Ken, can your company eat this other company.”
Ken says, “sure”
Ken finds out later that the other company is poisonous, and says “Hank, I don’t think my company should eat that other company ’cause it’s poisonous”
Hank says, “EAT IT”
Ken says, “okay”
Ben looks up and says, “hey guys, look what I found in my belly button!”
Hahaha the funny thing about this mini-story is that it also more or less describes the process behind the attempted “merger” between Fiat and Chrysler…except that Fiat isn’t going to be manipulated as easily.
If I was Fiat, I’d sit back and wait for the bankruptcy. Why merge with a messed up company when you can wait and pick over carcass? If you can’t find any parts of Chrysler you want, just wait for GM.
WSJ - APRIL 24, 2009
By BRETT ARENDS
Is real estate cheap yet - or is it still expensive?
Maybe it’s both.
The latest data from the National Association of Realtors, which rattled nerves on Wall Street this week, showed national home sales are still weak. But they also showed how home sellers nationwide have split into two camps.
Call them “the haves” and the “don’t haves.” As in: Those who have to sell, and those who don’t have to.
The haves are the distressed sales. These include those in foreclosure, and those in pre-foreclosure “short sales.” Such sales are now booming - at bargain prices.
On the other hand, those who don’t have to sell are often hanging on to 2006 prices. And they are hanging on to their homes.
Prices aren’t dropping. And homes aren’t selling.
This could be ominous. It suggests - though it does not prove - that another shoe could be about to drop in real estate, as those who don’t have to sell realize they need to compete more aggressively with those who do.
Well according to today’s e-mail from my Friendly Neighborhood Realtor:
Yes, it is literally the best time to buy a home in 40 years.
(Emphasis his, not mine.)
Also, he says:
Contributing to this theory is another NAR report from late March that shows housing affordability at its highest level EVER. According to NAR, “The Housing Affordability Index shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.”
At least that’s the view from 30,000 feet. But what’s happening on the ground? At @properties, we’ve been experiencing a steady increase in web traffic, showings and most importantly sales!
I’m quite happy being my own judge of what constitutes affordability, thank you Mr. Agent.
Seems the 1990’s were a better time to purchase than today in most markets. Incomes were higher by comparison than today and house prices were lower.
You are correct.
I think that realtor should go ahead and buy every house he can get his hands on. Who knows, he might become the next Casey Serin. Knock yourself out with all the ’sweet dealz’ you can find.
Realy?! Increasing sales? In Chicago?!!
But, but, but …they just released this:
“From the Illinois Association of Realtors (as reported by Crain’s):
In the city of Chicago, sales fell 42.2% in March, to 1,181 compared with 2,044 in March 2008.
The rate of decline for the Chicago area slowed slightly from 28.8% in February but edged up from 40.4% in February in the city.”
A Realtor that I spoke with last week (in Victorville, CA) actually told me that it was NOT a good time to buy. Can you believe that?! She said that although prices are around <$50/sqrft, there is a huge flood of foreclosures coming because of the stay on foreclosures (she described them as “pent up foreclosures” which I thought was funny) and that prices are going to get even better. My target is <$35/sqrft for a place in an established neighborhood.
In other news, I had another Realtor lady show up at my door yesterday evening informing me that the bank was willing to pay me $2300 to move out within 21 days. I found out 6 months ago that the “owners” were being foreclosed on, so I quit paying rent and packed most of our belongings. The property was finally foreclosed upon 3 days ago. I was amazed at the speed in which they showed up at my door. It was good while it lasted.
Six or seven months rent-free ain’t too shabby at all. Plus $2300? Sweet!
$35 per square foot? Wow. It’s hard for me to imagine prices that low anywhere I’ve lived.
I’m living the dream! Just kidding.
The Realtor lady said: “Oh, I’m sorry.”
I played it off like I was bummed out, but inside I was thinking “Booyaa.”
My wife and I high-fived each other after she left.
Anyhow, I’d like to personally thank all of those FB’s for making this happen. I’d also like to thank IndyMac (Federal) Bank for the deposit and first months rent on my new 4 bedroom place and the good folks on this blog with their crystal balls and great advice.
BTW: We were planning on moving anyways. The elementary school that we are zoned for also houses a huge section 8 population. Ahem.
Smoove!
Well played, Mr. Bond!
Flippers wanted to sell, right at the same time we ran out of buyers. Then the flipper’s IO/Neg-am grace period ran out, payments went up, and they had to sell. Still no buyers. Whence the downward spiral. I ranted about this years ago.
This morning I checked Realtor.com in Central Ohio. They are still asking $420K for a McBox on a half-acre. Insane.
You should buy it since real estate only goes up!
Hahahaha… or not!
This insanity is typical in Maryland, too. I see houses that have been sitting for years are still stupid-high prices. Nothing changes and they’ll never sell at those prices, but it keeps affordability low and reduces one’s practical choices, so it is a good thing from the viewpoint of the realtors.
Tax assessment came out for Manassas Park, Va.
2008
$309,700 @ $1.10 (I think)
2009
$136,300 @ $1.69 (proposed)
Holy cow - that’s horrendous.
In Loudoun our rate just went up to $1.24, and I thought that was outrageous (it was by far the highest ever historically).
Taxes are going up up up!
You are kidding! That makes Florida look sane (nearly impossible).
I have inside info on the tax assessments and tax rate. Manssas Park is mostly residental with very little businesses.
The greedy hand at work…It never stops…Its self-serving…
please interpret the rate structure for the californians.
interpret the rate structure ??
Real Estate Tax Rate Structure ?? If so, it varies throughout the state because of “special assessments” but generally it is 1.2%
Bank industry to hear results of ’stress tests’
Bank industry to hear how well they did in ’stress tests’; government will detail methodology
Daniel Wagner, AP Business Writer
On Friday April 24, 2009, 9:31 am
WASHINGTON (AP) — Federal regulators on Friday will privately begin telling the nation’s 19 largest financial institutions how well they performed in stress tests to assess their soundness.
Regulators trying to stabilize the financial system also will release the test methodology they used, which could provide clues about which banks may be in trouble — but also could unwittingly roil the industry.
The results of the stress tests won’t be publicly released until May 4.
The slow-motion rollout is intended to blunt market reaction to the news of which banks are healthy, which ones could fail if the recession worsens and which need more money to survive.
News reports, including a confidential outline of the tests first reported by The Associated Press this week, have led analysts to start handicapping which banks could fail. The speculation will intensify with Friday’s release of the test methodology.
“I’m worried about the overreaction — people selling every bank short and pulling out all their deposits and hiding their money in the mattress,” said Scott Talbott, a lobbyist with the Financial Services Roundtable, which represents the biggest financial firms.
Regulators are striving to release enough information about the stress tests to inspire confidence. But they don’t want to give analysts so much detail that they can run their own tests on the banks before the official release of results.
The stress tests subject banks’ balance sheets to two scenarios. One reflects current forecasts for the recession. The other assumes the recession will worsen, according to the document, produced by the Federal Reserve.
Officials also are examining the quality of banks’ loans, according to an industry official and a regulatory official who spoke on condition of anonymity because they weren’t authorized to discuss the tests publicly.
The goal is to see if banks have enough money reserved to withstand these losses. If they don’t, regulators will force banks to boost their capital, with private or government money, and will take other steps to strengthen their balance sheets.
Some experts fear the hypotheticals aren’t tough enough.
The results of the stress tests won’t be publicly released until May 4.
Brings new meaning to the term “Cinco de Mayo”
Sign me up for some stiff drinks this May 5th.
Gettin’ bombed on Sinko De Banko?
nice
So the bank lobbyist thinks that pulling out of a potentially insolvent bank is an “overreaction.” Well elevate my feet and cover me with a blanket…I think I just went into shock.
I don’t see why they are making a big deal of this since it’s not as if any sort of truth will be announced.
We all know that all the banks will pass the stress test, the market will zoom upwards on the news, and a week later we’ll hear that the banks are fine, really, but they need another trillion dollars worth of Bailout money to line the pockets of the rich… Uh, I mean to “increase their financial stability.” or some BS.
I was just thinking…crazy stuff, but bear with me:
Trillion dollars is a million million dollars. That would be just 2 million median priced California homes at the peak in 2005. I saw a figure in a California RE blog that sales volume peaked in 05 at 600,000 homes. This was just ONE year of the housing bubble in one state.
During just Q1 alone of this year, there were 800,000 NODs and foreclosures nationwide.
So totally guessing here (once again, just guessing!), is it possible that we are going to see (assuming things stay roughly the same for the remaining 3Q of this year) at the worst for 2009 the equivalent of 3 years worth of California bubble purchased homes go into foreclosure? If the economic situation deteriorates for at least 1-2 more years as predicted, then the potential liabilities are just absolutely staggering! This doesn’t count additional economic losses from derivatives and the stock market, or the economic downturn in general. I have absolutely no clue what the figures would be nationwide.
We haven’t really talked about it in awhile, but just where does this rabbit hole end? How can we even hope to predict a bottom? Someone somewhere must have more concrete numbers than I can find, but they obviously wouldn’t have incentive to share if they work for the Feds.
NSO-
They end on a farm with a well and a garden.
News reports, including a confidential outline of the tests first reported by The Associated Press this week, have led analysts to start handicapping which banks could fail. The speculation will intensify with Friday’s release of the test methodology.
“I’m worried about the overreaction — people selling every bank short and pulling out all their deposits and hiding their money in the mattress,” said Scott Talbott, a lobbyist with the Financial Services Roundtable, which represents the biggest financial firms.
Regulators are striving to release enough information about the stress tests to inspire confidence. But they don’t want to give analysts so much detail that they can run their own tests on the banks before the official release of results.
Wow Scott is an optomist
It’s as clear as mud.
Does anyone really have any faith that these will be honest assessments?
Gee whiz guys, hate to sound conspiratorial, which has already endeared me to so, so many, BUT:
The Chinese gave us anti-freeze laced toothpaste.
The Chinese gave us melamine laced pet food.
The Chinese gave us lead paint coated kids toys.
The Chinese gave us rocket fuel additive laced baby food.
The Chinese gave us sulfuric acid laced drywall.
Methinks the Chinese have just given us a lethal supervirus.
Maybe they think they could clear the land of pesky Americans without firing a shot? No, too farfetched, wouldn’t they always have OUR best interests at heart???
Swine flu cases up to 7; officials expand probe By MIKE STOBBE, AP Medical Writer ATLANTA -
Health officials are investigating a never-before-seen form of the flu that combines pig, bird and human viruses and which has infected seven people in California and Texas. All the victims recovered, but the cases are a growing medical mystery because it’s unclear how they caught the virus.
None of the seven people were in contact with pigs, which is how people usually catch swine flu. And only a few were in contact with each other, according to the U.S. Centers for Disease Control and Prevention.
Still, health officials said it’s not a cause for public alarm: The five in California and two in Texas have all recovered, and testing indicates some mainstream antiviral medications seem to work against the virus.
Dr. Anne Schuchat of the CDC said officials believe it can spread human-to-human, which is unusual for a swine flu virus.
The CDC is checking people who have been in contact with the seven confirmed cases, who all became ill between late March and mid-April.
Because of intensive searching, it’s likely health officials will find additional cases, said Schuchat, director of the CDC’s National Center for Immunization and Respiratory Diseases.
One of Greg Iles’ novels (I forget which one) deals with the China/US issue. In it, a mad scientist is developing cancer as a weapon to use against the Chinese. I had never really given the issue much thought, but the book was awesome.
The story on the NBC Nightly News yesteday evening seemed to indicate the swine flu was coming from Mexico, not China.
And just as a side note, the big story here in West Central Florida is the tuberculosis scare at Lakewood Ranch High School. We’re seeing more of these respiratory problems and there is some linkage to immigrants from south of the border, although I don’t know the exact situation with Lakewood Ranch. Open borders just doesn’t cut the mustard.
“And just as a side note, the big story here in West Central Florida is the tuberculosis scare at Lakewood Ranch High School. We’re seeing more of these respiratory problems and there is some linkage to immigrants from south of the border,”
My youngest daughter tested positive for TB in junior high. She had to take medication for an entire year. How many of the immigrants that she caught it from finish their medication? Before Jimmy Carter immigrants weren’t allowed in the US without being tested for TB.
My darling friend has been sick for a month and in surgery today for stopping off in hong kong. Now I know what he really got. swine flu. poor guy.
I’ve been in that part of the world a few times and never gotten sick. (Always good to ID what’s on the dinner table just on general principle, though, so you don’t end up with mule or worse.) And I don’t spread disease there, far’n as I know.
By comparison, it’s not unusual at all for my spouse, who runs and owns a medical practice, to get patients in the building who have the type of TB that you don’t want to have. To a person, they all have immediate ties to Mexico.
Be fair. They give their own people the same fine stuff too.
Lotta smug xenophobia on this blog. Pathetic. Ignorant. Inexcusable.
Anyone catch this in the NY Times Business Section this morning?
http://www.nytimes.com/2009/04/24/business/economy/24norris.html?_r=1&ref=business
“Junk, circa 2009, is the worst junk ever.
Calculations by Moody’s Investors Service show that as of the beginning of April, a record 27 percent of speculative-grade debt issuers had a rating on their senior debt ranging from Caa down to C. These are the lowest rungs of credit quality — rungs that once rendered a borrower ineligible for a loan.
The default rate on leveraged loans and speculative grade bonds is rising rapidly. “We expect the default rate to get to the range of 14 percent by the end of the year,” said Kenneth Emery, a senior vice president of Moody’s. That compares to peak default rates of 10 to 12 percent during the last two recessions, in 1991 and 2001.
That could turn out to be an optimistic forecast. Edward I. Altman, a finance professor at New York University, says he thinks the rate will probably be in the range of 13 to 15 percent, but could go as high as 19 percent this year. If the recession continues into 2010, he fears that year could see a comparable default rate.
Martin S. Fridson, the chief executive of Fridson Investment Advisors, a money management firm specializing in corporate credit opportunities, looked back at the 1991 default rates for various quality high-yield bonds. Since there are many more low-quality bonds now, he says equivalent default rates would produce an overall rate of 24 percent — twice the old peak.”
Funny, I remember Noriel Roubini and Calculated Risk talking about this scenario, oh,,,, About mid 2006. Once again the MSM is a day late and a dollar short but at least they are now “getting” it.
This won’t end well.
But again, we all new that a while ago.
They don’t call them “junk” for nothing.
I still find it hard to believe that people will buy anything that says right in the name “Bad Stuff.”
“The Big Picture”:
—————————————–
The Elusive Housing “Fair Value”
By Barry Ritholtz - April 24th, 2009, 7:27AM
Those who are now calling a housing bottom (despite having done so for years) are finding comfort in this mean reversion. They shouldn’t — and for three reasons. The first is that asset classes which become wildly over-priced do not merely revert to the mean — they tend to carom straight through the mean, eventually becoming significantly under-valued. You see, if you only spend time above the mean trend line, and never below it, well then, that cannot possibly be the “mean” — the line down the middle.
Second, we know the recession plus a glut of foreclosed homes creates a “self-reinforcing cycle.” Job losses and income decreases lead to more distressed sales, with prices especially pressured. Falling prices make put mortgage holders underwater — holding homes worth less than the mortgage. This leads to walkaways, jingle mail, and even more foreclosures. All of this adds up to an even greater excess supply of homes for sale. More supply equals lower prices. The entire vicious cycle continues.
But the third issue is the biggest one of all. Its something we touched upon previously in NAR Housing Affordability Index is Worthless. None of the factors outside of price and interest rates are constructive to home sales. Outside of the $8,000 buyers tax credit, all of the rest of the factors impacting sales are deeply in the red:
1) Employment: Job losses and unemployment data remain at deep recession levels;
2) Down Payments: Surprisingly few buyers have a cash down payment of 20%. Unless we go back to LTV of 90 and 100%, that reduces the pool of qualified mortgage applicants.
3) Debt servicing: Many mortgage applicant do not qualify in terms of 25% of monthly gross income available to pay for Mortgage Principle and Interest. This is a function of the prior debt binge — credit card, HELOC and auto.
4) Credit: Lots of potential buyers damaged their FICO credit scores in the last round of leverage;
5) Non-purchase costs: have risen dramatically. The biggest being local property taxes, and energy. The silver lining is energy prices are more reasoanble lately, and thanks tot he recession, maintenance and repair costs (especially labor) are the cheapest they have been in years.
All of these factors only go to buying a house.
The bottom line: An increasing number of families no longer qualify for a standard conforming mortgage. We are still no way near a bottom in housing . . .
Sounds good to me!
CF, this is a good article. I posted a long comment along similar lines this morning that got swallowed by the filter, but I no longer have the energy to recapitulate.
I wish we saw more of this kind of stuff in the MSM, but it seems we’re all stuck with the same useless and outdated sources of information, defeating even far less amateuristic attempts to make sense of it all than mine.
Nice Post…
“The first is that asset classes which become wildly over-priced do not merely revert to the mean — they tend to carom straight through the mean, eventually becoming significantly under-valued.”
Knowing this, mightn’t the Fed potentially undertake extraordinary measures to try to offset the overshoot, such as driving mortgage rates down to generational lows?
They might but we’re talking about principal here not interest.
“Surprisingly few buyers have a cash down payment of 20%.”
Where is the surprise, in the aftermath of the Fed having run an ongoing War on Savers for many years?
Not getting the point on inability to pay 20%. Lots (most) home loans are written today still requiring less than 20%.
Hey! This is a real estate article!
Associated Press
Montana town wants its empty jail to be new Gitmo
By MATTHEW BROWN – 14 hours ago
BILLINGS, Mont. (AP) — President Barack Obama has 240 terror suspects he has said will be moved out of Guantanamo Bay, Cuba, within a year. The city of Hardin has a brand-new empty jail.
A match made in heaven? Hardin officials think so; Montana’s congressional delegation thinks not.
The development authority in Hardin, a city of 3,400 people bordering the Crow Indian Reservation, built the $27 million, 460-bed jail two years ago and has been looking for tenants ever since. Its construction loans are in default.
The City Council voted 5-0 Tuesday in favor of a resolution supporting a proposal to house terror suspects currently detained at the U.S. naval base in Guantanamo Bay while they await trial.
“Somebody has to stand up and put (the Guantanamo prisoners) in their backyards. It’s our patriotic duty,” said Greg Smith, director of the city’s Two Rivers Authority.
“Not on my watch,” U.S. Sen. Max Baucus said.
The Montana Democrat said the detainees’ presence would be a security risk to the community and exceed the capacity of the U.S. District Court in Billings, which would have jurisdiction over their cases.
The rest of the state’s congressional delegation — Democratic Sen. Jon Tester and Republican Rep. Denny Rehberg — agreed that bringing Guantanamo prisoners to Montana is a bad idea, though they support efforts to find some other use for the jail.
Smith said the city has sent out marketing packages to all 50 states, and the jail has hosted visits by prison officials from Colorado, Wyoming and other jurisdictions. Attempts to land contracts with the federal Bureau of Prisons and Montana Department of Corrections have been rejected.
Smith acknowledged that the city’s chances of getting the Guantanamo prisoners are slim but insisted that holding them would not be different from handling any other kind of prisoner.
“You have hardened criminals in jail all around the state, you have sexual offenders. When they’re in jail, they’re not a whole lot different,” he said.
Hardin Council President Harry Steinmetz referred questions on the issue to Smith.
Copyright © 2009 The Associated Press. All rights reserved.
I’m in a light mood today!
Leigh
So… I am having a happy day. All of this bad news is bringing a smile to my face. The only only problem is, I am running out of people to say, “I told ya so!” to.
Can I still get rich off this thing, or is it too late?
I think you already did.
I don’t see you holding no house.
S/he who holds all the dollars, wins?
Pretty much. Let’s see … independent of whether you’ve saved $1,000 or $1B, you can now buy:
(a) more houses, or (b) less houses
(a) more stocks, or (b) less stocks
(a) more bonds, or (b) less bonds
(a) more first editions of books, or (b) less first editions
(a) more Picasso’s or (b) less Picasso’s.
Money illusion cuts both ways. People don’t seem to think of this as a “real” return on their money when it actually is!
If you can time the bottom, then you can get an even better deal on all those things. The problem is…well…timing the bottom.
I was just openly questioning whether at some point you just suck it up and go on with your life? Some of us have been waiting through lean years of accumulating debt getting our education, then waiting out the bubble, and now we have to wait for deflation…which thanks to government intervention could take many years (if not decades if we go the way of Japan).
I hear and agree with what you’re saying…but I also don’t want to be a senior citizen, cash rich, and realize that I passed up a lot of opportunities for happiness along the way because they conflicted with my bank balance sheet. I could die tomorrow, or develop Alzheimers…rampant inflation or some natural disaster or societal breakdown could make all those piles of cash useless. I also have my mental health to consider.
Anyway, it’s all lose-lose from what I’m seeing…flame me if you like.
No, I sympathize with your position actually.
People have been saying that to me for many, many years. I guess I’m not the type of person who finds it easy to make decisions based on that line of thinking. It just goes against every grain in my body. Not terribly surprising given my personality type.
Can’t be more help here. Can only state the facts.
“Money illusion cuts both ways. People don’t seem to think of this as a “real” return on their money when it actually is!”
I _totally_ see it that way, FPSS! I felt twice as well off when my portfolio value didn’t change—but everyone else’s went down 50%. It’s all relative, and that’s less competition for my dollars should they actually get spent.
I _totally_ see it that way, FPSS!
Well, what’s your choice?
I’ve just stated the position. Either you must refute it, or as Sherlock Holmes said, when you’ve eliminated all other alternatives, whatever remains however unlikely must be the truth (= deflation.)
I appreciate the honesty and the objectivity, FPSS, thanks.
“Well, what’s your choice?”
I suppose I could choose to see it the way everyone does—e.g. not to get it.
” the only problem is, I am running out of people to say, “I told ya so!” to.”
Don’t limit yourself to people you know. What do you think open houses are for?
LOL
So guys, I would really really appreciate your advice. I graduated with my engineering degree a little over a year ago, and although I enjoyed my job, I quickly realized engineering is definitely not the way to go.
Literally, my company is currently half the size of what it was when I got hired. Many companies keep outsourcing engineering jobs because they can get the job done somewhere else for a cheaper price.
Unfortunately for me, engineering is an science that can be practiced anywhere. Thus, we have to compete with Indians, Chinese, Russians & Brazilians.
On the other hand, professionals like accountants, lawyers, executives, and doctors cannot be as easily replaced because in most cases regulations and practices vary a lot from country to country.
It is not as easy to bring a Chinese lawyer overnight and expect him to speak, write and practice US law overnight.
In the next couple of years, I would like to go back to school, but I am still undecided which would be the best way to go.
What do you think the better options are? law school? med school? mba program? else?
THANK YOU SO SO SO MUCH!
Skip the MBA.
Skip med school too…poor return on time and money invested. The long term trends for physician reimbursement and liability suck as well.
Skip Med school…takes 4yr ($200k) plus a min of 3yr intern (at $45k/yr income). Both require 80 hrs+ a week.
you’d do better being a nurse than a doctor. the work is stable
and very demanding
One word……..plastics.
Law degree then into a government job…
I think you already know this, but I have to say it. I have a Ph.D. in engineering. It sucks. Do not do it. There are too many people with Ph.D.’s and not enough good jobs. If you like technology, do it as a hobby.
I am sorry to rant …. but that’s the way it is.
I would go back and study accounting, but that is due to my personality.
There are no subjects in which there are not an excess of Ph.D’s - physics, economics, math, english, music.
This is not an argument against it per se but there is some truth to what the man says.
It’s clear from his comment that he knows this. He’s already looking at other fields.
But what kind of engineering? does it all suck, EE, civil, hydraulic etc?
HELL NO!
I would never go back to get a PhD in Engineering; it’s not what I see myself doing.
I have two kids one in Optometry the other in Dentistry. Not ruined yet.
You didn’t say which branch your degree is in (structural, civil, mechanical, computers, etc.) so it’s harder to say what the future holds for your profession.
I went to the Colorado School of Mines and received a degree in civil eng. This was after getting both an undergrad and grad degree in anhtropology/archaeology/linguistics at CU and being totally convinced by my friends/family (mostly my dad) that I could never get a reasonable paying job and I should go back to school. I had some experience in engineering before getting my undergrad degree.
I worked as an engineer for IBM for awhile and hated it. So, I went back to my earlier degrees and got a good job, then went indie, have worked as an archaeologist off and on for some time and never gone hungry, love it. Right now I’m making films and loving that. And no, I’m not rich, but I have everything I need.
In short, what I’m saying is do what you enjoy doing and you’ll find work because you’ll be better at it. Do what comes easy for you, that’s where your talents lie, do what you really love cause life can be awfully boring and torturous doing something you hate, even if you’re paid a fortune.
Just IMO. And BTW, I paid my way through all my schooling, not one penny from family, so I was pretty poor and wanted to get out and make some money. But I learned quickly that there’s more to life. Good luck, best wishes, and be happy.
Wow Losty…your life story would make a great book. What would you title it?
Hey, NSO, I wrote it already, it’s called “Uranium Daughter” - and also, “Desert Rats” - both are on Amazon, just came out. I can’t personally vouch for if they’re any good or not…
My next one is in progress and will be called “You, Too, Can Survive on Desert Flora.” (no fauna, I’m a veggietarian - and sugartarian)…
Degree in Electrical Engineering; honestly, I do not see myself doing this job for the rest of my life. That is why I am thinking more about the future.
I’d rather go back to school and learn new skills while I am young and have few responsabilities
I dunno. That’s a real subject.
If I say z-transform or information entropy, you don’t go HUH?
If you know how to program, there’s a lot of careers open as we speak. Might not be what you envisioned but not exactly dead-end either.
I would say go in to energy. That field isn’t going anywhere. Consider working for GE in either their wind or generation divisions. There are other companies out there like Bentley Nevada, Alstom, ABB, etc.
Most of these jobs are high paying but require a lot of travel. You will never go hungry though.
And no, I’m not rich, but I have everything I need.
Everything you need, plus, you’re doing what you love and having fun. I would therefore submit that you are ‘rich’.
Yep.
+2
Avoid debt.
Blue Skye
ChE Magna Cum Laud ‘78
+1
I don’t think all educational debt is bad, it’s excessive educational debt that one should avoid. A few examples from my own life:
A.) A friend recently got a PhD in environmental science. It took him a long, long time, but he managed to do it without incurring any debt, as he received research funding and/or tuition reimbursement all the way through. Smart.
B.) My sweetie will finish her Master’s in Library Science in a matter of weeks. She incurred about $10-12K in debt while going to grad school and working full-time, but the loan amounts will be easily offset by the increase in her pay (automatic where she works) and increased job opportunities. To me, that’s smart debt — easily manageable, with an easily quantified upside. (This is our only household debt, too.)
C.) A friend is currently getting a grad degree in film archiving + preservation at NYU. It’ll set him back about 100K. He’ll have increased salary and job opportunities, too, but I’m not sure those will ever outweigh the size of his loan obligations. I discussed this frankly with him before he moved, and he realizes the pitfalls. This guy loves what he does — and he’s great at his job, too. I personally wouldn’t have made this decision, but he is content with it.
“What do you think the better options are? law school? med school? mba program? else?”
Forensic accounting with an emphasis on business and tax law.
Something tells me a degree like that is going to be in high demand (if it isn’t already)
Whatever you do DONT go into architecture. It sounds fun and sexy but it generally isn’t and the preofession is tragically under-compensated.
Yeah, I’m an atchitect and I do often regret it.
ROTFLMAO.
Please forgive my terrible spelling today. Sheesh, can’t even spell ARCHITECT right
I was once told by my mentor that good engineers will always be able to find a job. I’m not claiming to be the best engineer (far from it), but I do strive to be the best and I think that my superiors can easily see this and they have always rewarded me ($$$) accordingly. My mentor also told me to drink lots of water before and during meetings. His reasoning was that it’s hard to fall asleep when you have to pee.
Anyhow, being fearful of losing your job, doesn’t do you any good. However, eliminating the idea that there is such a thing as job security personally prevents me from becoming complacent. I’d say that if you truly like what you do, continue to do what you do and do it better than the next guy. That means (especially for engineers) constantly learning new skills and technologies. It also helps to maintain high visibility with your superiors; what you’re doing, when you expect to finish, …
If you haven’t already done so, pay down any debt that you have and start saving your money. I personally find it very liberating knowing that I could survive without a job for 4+ years (Note that I graduated in 2003 and support a wife and 3 children.)
One more thing to consider: Two years ago, my former employer (Raytheon) gave a big presentation to their employees about how the baby-boomer population was made up of 77 million workers and that the combined total of gen x and y was about 44 million which would eventually create a huge worker shortage when these boomers begin to retire in-mass. Their concern was primarily the loss of knowledge and experience that would occur if this knowledge wasn’t passed on. As a result they began hiring more new graduates and pushing managers to utilize the mentoring programs that the company already had in place. For me this was a clue that having a secret clearance and staying in the defense industry was probably a good idea since they can not outsource these types of jobs. IMO.
Good luck!
In the seventies, us fresh faced A&Ps were told, “When all the World War II guys retire, demand for A&Ps is going way up!!!”
In the eighties, it was “When the Korean War guys retire…….”
In the nineties and early 2000s, it was “When the Vietnam War guys retire……..”
I’m still waiting.
I full expect that 300 years from now, some grizzled old crew chief on Moonbase Titan or Alpha Centauri is going to be telling the pups, “There is going to be a shortage of Starship mechanics, when those Romulan-Correllian Clone War guys retire!!!”
LMAO!
Hmm…In the 1970s my dad told me the next age is the information age. Took my first programming class in 1979, got the sheepskin, and have been heavily involved in the full software development lifecyle on dozens of embedded software projects since 1985 and only a total of 6 weeks downtime between now and then.
Don’t go back to school, move overseas where everything costs 1/4 what it does here, and take an engineering job earning half as much.
Become a government drone.
In New Future, there will be no real jobs. Just government drones that shuffle paper and debt around and doomed souls stuck working at the MegloWal-Mart.
How about working on the Maglev? With the speed train conscienceness becoming of age, that should prove to be a demand field. Civil, Mechanical, Elect., Transportation Engineering opportunities, I assume.
Accounting isn’t what it was either. H1-B’s and Outsourcing has hit it hard.
Brett, you could just go have fun for awhile and forget being responsible until you figure out what to do. It could take the rest of your life, if you’re lucky.
I have a hat I’ll send you for inspiration, it always gets some interesting responses when I wear it:
Utah Bigfoot Field Researcher
HAhahahaahahaha!
There you are!!
Have you given any thought about becoming a pirate or an auto mechanic ?
+2
‘Have you given any thought about becoming a pirate or an auto mechanic ?’
LMAO
If your goals is making more money as quickly as possible, there is no sure-fire answer as there was in years past for, say, lawyers or MBAs. Everybody’s looking for the fast track to the top and thinks that advanced degrees are the answer. Not true.
The key to success is the perception of being valuable. Sometimes that can be achieved with hard work, but others have done it with exceptional communication and sales skills without work or even any talent or ability. You can bust your balls, but if no one in power notices it (be it a boss or a client), you’re going nowhere. Conversely, you can do nothing, but if you can convince others that you are are valuable, you’re on your way to the top. An advanced degree is part of this latter example, to some extent, but it’s an awfully expensive and arduous way to go, and with so many advanced degrees out there (by people who have no value, real or perceived, btw), it’s no longer anything exceptional.
The old adage “Do what you love and the $ will follow,” is really about the fact that if you do what you love, you will be good at it and recognized for it, the recognition factor being a result of you talking about what you love and/or your work being so exceptional that others will recognize your value.
Your success is in the hands of others, be it bosses or clients. Communicate your greatness.
Law School. Hands down.
Joe, you may be the first lawyer I’ve talked to in a long time who says they would do it over again.
Yeah…Law is good, you can sue someone that cuts in front of you in the unemployment line
I’d look into the electric power systems where a top secret security clearance is required. The modern world is electrically powered, and you can’t import the power over great distances. A huge number of older folks will be retiring during the next ten years, so you’ll have upside potential.
You can still engineer stuff in the USA. I have friends that have come up with things and sell them direct on the intarwebs. Some parts are made in China, some in the USA.
I think it’s more about the person than the degree anyways.
Glad I skipped a couple of days.
Y’all are girly-men now, right?
heh.
You too, dudette!
Nobody expects the Olympic Inquisition!
You too, dudette!
Does that make you Faster Pussycat, Shop Shop?
Yes, and in an impromptu burst of extravagance I bought an attachment for my hand-cranked pasta maker yesterday.
It’s all downhill after this.
Have you fondled it much this morning, Fastette? (Your ravioli attachment, I mean.) I bet you have. I bet you caressed it and murmured endearments to it, and described what you were gonna do together…
That’s okay. That’s natural. It makes stuff cook better when you do this.
It hasn’t arrived yet but I did it in my heart of hearts.
But you knew that.
I did.
It’s all downhill after this.
I salute you, fellow girly-man.
You and your pasta attachment.
Pastaturi te salutant.
In continuing the fine fake Latin tradition from yesterday.
Latin is an ever-changing language.
Even though it’s dead.
HBB = moremque sinistrum sacorum incolitis locis barbaricos ritus
That’s us alright
Latin is an ever-changing language.
Even though it’s dead.
I’ve thought about this subject, and I’ve come to the conclusion that Latin is much like a Zombie drag-queen, when you think about it.
Zombie drag-queens need love too, you know!
Not me, man, I’m a girly girl.
Where the h-e-double-hockeysticks is Oly???
Hopefully off dating Anne Heche.
Well, if she really did give up on men (and forever is usually just a month or two in my book), I picture her more likely to be hanging with Squatch than some Hollywood type.
It’s a matter of being down to earth, and Squatch are more into frogs and such, I would think, anyway, not knowing any first-hand (that I’m aware of, anyway).
Well, if she really did give up on men (and forever is usually just a month or two in my book),
Hahahaha! Yer pretty insightful, arencha.
But no! No, I say!
*makes decisive and complicated gesture indicating the ragged state of my brutalized and morose spirit, and how I’m not gonna be such a dumba*ss anymore, led about like a blind poodle by my idjit heart and fizzling hormones, but will instead only pace tragically along the bank of the ocean, weeping in the rain, with not even an umbrella or even a jacket because I’m so anguished, and howls of sorrow will pour forth from my soul like a foghorn, henceforth *
But anyway, I couldn’t date Bigfoot, even though he’s not a ‘man’, strictly speaking, but only an anthropoid, because he’s too hairy. And even shaving wouldn’t work; remember when I recently mentioned the ‘Episode of the Shaved Bigfoot’? Over in Shelton, this was. Disastrous!
*shakes head reminiscently *
OK, but don’t you think the hair thing could be overcome? I mean, I dated a guy once in Berkeley who looked like a cross between Bigfoot and Jesus, he was totally cool, a mathematician with a PhD, spent all his free time running the mathematical odds on the Cubs winning (he was from Chicago, his family owned Wrigley Stadium, at least that’s what he told me). Can’t let your prejudices overcome your quest for happiness…I mean, what if you found out BF was RICH???
I mean really rich, like my Chicago friend.
And he followed me out to Colorado…
where he got shot by some redneck rancher. Oh well…
Hopefully off dating Anne Heche.
I think Ann Heche became straight again after she used Degeneres to get some tabloid face time - and work.
Didn’t she end up marrying a human of the male persuasion?
phillygal say:
Pick a lane and drive in it.
Pick a lane and drive in it.
Why be “merely” happy when you can expand your horizons and be ecstatic?
Sorry, but you knew that was just too irresistible.
Shot and killed by redneck rancher? Yow
FPSS:
Yes I know: Boring, pedestrian, ho-hum.
Guess I’m settling down?
I hope you all have a nice weekend!
p
Pick a lane and drive in it.
Hmmm. That’s probably not the best metaphorical exhortation me, because when I drive go from zero to Warp 8 in 9 seconds, and I zoom all over the road zigzaggily, with frequent schreeches to a blazing tire-burning halt so I can leap out and go see what’s going on, or rescue a plant, or look at a moth, and other stuff like that.
So, see—a different metaphor would be better.
Here I am! And my hands are itchy, because it turns out I don’t know how to fondle stinging nettles right. ‘Grasp them firmly and they won’t sting’, whatEVer.
They’re busting out all over the place now. Soon I will attempt to cajole Fastette into delivering the Nettle Recipe of Wonderment that he keeps nattering on about, ’cause I will make it, and rejoice, and also teach those nettles a lesson, by eating them.
Figure out a recipe for goatheads, while you’re at it (no, NOT the real thing - yech - the weeds).
OK, for the real thing too if you’re hanging with Squatch, I guess that would be something they’d enjoy, barbarians that they are.
Cure for nettle stings: rub the afflicted area with the pollen on the underside of ferns. I’m assuming you have ferns in the vicinity…. ( l lived near Mukilteo for about 4 years after my dad had one of his mid-career walk-abouts. We hightailed it back to SoCal due to sun deprivation)
Lost…I believe it’s lavi d or ranchers TURN to watch Olygal.
FPSS and I watched her LAST night and she didn’t fall or hurt herself
ROT!! (short for ROTFLMAO)
Yeah, right, I bet you just THOUGHT you were watching Oly. She’s very clever and probably was out watching YOU.
Or else her Bigfoot buddy was…be wary, be very wary…
I didn’t fall, but I grabbed some stinging nettles last night, like how you’re supposed to do it, but they still stung me, so there goes my positive reference for your next babysitting job, Mikeena.
And then I grabbed them again this morning, a different way, see, I snuck up on them and tried to be more delicate-like, and they stung me again…sigh.
Yes, I have gloves! But you’re SUPPOSED to be able to grab them, I heard, if you do it right!
They don’t call them American Stinging Nettles for nothing little “farmgirl”.
From under the leaves no sting. get the young and cook them. That will teach them. Take out there young.
SNAP!
Do I have to? And forget the stinging nettles,
Redstem Filagree is much worse and we just
discovered it all over the place. Oh, it’s
common name is puncture vine……
Laugh FPSS…I just hope she knows her American snakes better than her herbs, weeds and mushrooms.
And here’s a really nice recipe from the most unlikely source: WSJ.
she knows her American snakes better than her herbs, weeds and mushrooms.
There are old mushroom foragers and there are bold mushroom foragers but there are no old, bold mushroom foragers.
That was a nice link, Fasty, thanks.
I guess I’ll give up my attempts at sneaking up on the nettles all Sacajewea-like and just march out there wearing gloves and yank ‘em into a basket.
I hate wearing gloves because I like to thoroughly feel what I’m touching. (And that is why my poor little paws are all bashed up, scarred, and–at present—itchy. One of those ‘consequence’ thingies I disapprove of so heartily.)
Anyway, I’m going to try again this weekend, and eat and eat and eat! There’s some in my yard I will first consume and also I think I mentioned the other night that while I was moping around in the forest I encountered what looks like a half acre or more of new fresh nettle shoots!
Ooooh, it’s exciting!
I thought I was Fastette. Is it ALL wearing off?
I thought I was Fastette. Is it ALL wearing off?
Thanks for reminding me that you’re an honorary girl, Fastette. I forgot this in the excitement of planning to eat a zillion nettles.
March new US home sales down 0.6 pct!
New US home sales down 0.6 percent in March from revised February number, beating expectations!
Alan Zibel, AP Real Estate Writer — New U.S. home sales dipped slightly last month, but still beat expectations as builders start to see long-awaited encouraging signs about the housing market — including a dip in the inventory of new homes for sale.
The Commerce Department said Friday that sales fell 0.6 percent in March to a seasonally adjusted annual rate of 356,000 from an upwardly revised February rate of 358,000. February’s results were adjusted upward by more than 6 percent.
March’s results exceeded the expectations of economists surveyed by Thomson Reuters who expected a sales pace of 340,000 units. Sales were still down nearly 31 percent from March 2008.
The median sales price fell to $201,400, a 12 percent drop from a year earlier. The median price is the midpoint, where half sell for more and half for less. Prices are likely to remain weak for months as builders continue to clear out their stock of unsold homes.
There were 311,000 new homes for sale at the end of March, down 5.2 percent from 328,000 in February. At the current sales pace, the government said it would take almost 11 months to exhaust the supply of new homes on the market.
The glut of unsold homes and competition from deeply discounted foreclosed properties puts even more downward pressure on prices and on builders’ profits.
The report measures signed contracts to buy new homes rather than completed sales, so March’s results could reflect the early impact of a new a new $8,000 tax credit for first-time buyers signed by President Barack Obama in mid-February.
WOW! Happy daze are here again!
Better max out your Visa and get on board!
After all, beating newly revised BS expectations from the newly revised BS propaganda machine requires us to behave irrationally, as a solemn and patriotic BS duty.
………………….NOT
Isn’t that number just the homes for sale in San bernardino and Riverside counties.
Better than expected - rally!
Hi all I just had a quick question about escrowing. When you use bank financing do you have to escrow your property taxes and homeowners insurance??? And is interest applied to escrow?? I live in a state where property taxes are high and if I didn’t escrow I would save on my monthly payment, which allows for more saving. I can’t seem to find anything on the net about this subject so I figured you all could point me in the right direction. Thanks
CorpsmanUSN
I was required to escrow for the last mortgage I had, and I did not receive a penny in interest. We had a very low rate on the mortgage and the interest didn’t amount to much, so we tolerated the “loss”.
The mortgage prior to that (same state), did not require escrow. We put an amount aside each month and that money (obviously) earned interest for our benefit.
In my experience escrow requirements depend on the loan, but different states may have their own rules. I wouldn’t be surprised to see more restrictions in the future, though.
Who knows what the rules are but I recall not so long ago escrow was required by lender if borrower had a bad track record paying property tax or if their FICO was low.
But since today’s lending is an ever changing work in progress, you just need to do some research on your particular situation.
http://dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx
March Dataquick numbers for socal are out.
LOL!
Beverly Hills 90211 1 $73 -94.8% 4 $650 -28.7% $26
Interesting anomaly.
Question
whats poway in CA near San diego like and the areas around there ?
Nice area, good schools. Areas serviced by the Poway school district extend into portions of the city of San Diego. It’s one of the more affordable places in the county with better schools. A number of my coworkers with children have located in that district. On the other hand, if you don’t have children it’s low on the excitement factor, typically suburban. However, it’s only about 30 minutes to many of the attractions in San Diego - longer during peak commute periods (15 freeway).
Pretty much the only thing anyone ever says about Poway is the schools, it’s soccer mom/dad central.
Big Santa Ann wind driven wildfire risk. In this decade alone, two major wildfires have roared out of the mountains to the north through the heart of Poway:
- Cedar Fire (2003)
- Witch Creek Fire (2007)
Purchase a home in the path of future wildfires at your own risk.
Purchase a home in the path of future wildfires at your own risk.
Yar, like those morons who keep on building giant houses on the steep and very unstable shorelines of Vashon Island, and elsewhere too, and then are astonished and displeased when winter comes, it rains like mad, and their house falls into the water.
I mean, how can this still be a surprise?
OK I know about wildfires I used to live in Moorpark CA.
Nice schools thats important to me I have two kids.
I have a job interview at a place near the intersection of the 5 and the 805 poway seems close by ?
Condo-closing walk-aways phenomenon finally arrives in Seattle:
http://seattletimes.nwsource.com/html/localnews/2009113376_condoclosings24.html
I’ve been saying for several years that we’re roughly a year behind the rest of the country; but I’m beginning to think maybe I underestimated by a bit. There’s still no doubt in my mind that we’re on the same roller-coaster tracks, though!
out one her, its missing.
thats three.
is this thing even on?
Palmdale update:
March sales for 93552 best since December and triple year ago numbers. 96 homes total, putting the inventory at 3.6 months. I question this number though, because my on the ground evidence is that there are many, many houses for sale and not on the MLS. I guess the broker is trying to save fees.
NODs in the zip are up 24% MOM and running even YOY. There were over 3 times as many NODs as sales in the month. In 93551, the coveted westside, NODs shattered the record at 592. That is 6 times sales!
In my individual case I am finding that the houses that interest me are now available and sitting on the market. There are at least 5 “perfect” houses now out there. Why not buy? Well, I’m not paying rent, my LL stopped paying his mortgage last November and said if he wasn’t paying I shouldn’t either. He’s a stellar human being. Until that NOD gets posted I have just about zero urgency to buy, especially as each new month brings a new “perfect” listing to market, and at a lower price!
Stay safe out there folks, we live in interesting times.
Hey Dude, I was wondering about your squatting. Sounds good!
About the worst thing to happen so far is that the pool filter needs a rebuild before the season. I’m glad to do it. When I consider how bad some of the vacant properties around the area are starting to look I really feel I’m doing a community service.
One of my fantasies is that when Wamu got bought out by Chase they lost this loan in the shuffle. I’d be content to live in this house for free until I die. I’ll even mow the lawn once in a while!
The tax collector will probably not go along with that life plan.
Pay the taxes and claim the property after a few years, 4 in Utah, IIRC.
From the Census Bureau: HOUSING STARTS
Privately-owned housing starts in March (2009) were at a seasonally adjusted annual rate of 510,000. I am not clear if this figure is comparable to the 356,000 annual pace of new-home sales reported for the first three months of the year?
latest news
U.S. new-home sales down 30.6% in past year
ECONOMIC REPORT
New-home sales fall 0.6% to 356,000 annual pace
Sales higher than expected in first three months of year, revisions show
By Rex Nutting, MarketWatch
Last update: 11:02 a.m. EDT April 24, 2009
WASHINGTON (MarketWatch) — Sales of new homes were nearly unchanged in March, the Commerce Department reported Friday, adding that sales in the first two months of the year were stronger than initially reported.
Sales fell 0.6% in March to a seasonally adjusted annual rate of 356,000 from 358,000 in February. February’s sales pace was revised higher from 337,000 reported a month ago. January’s sales pace was revised from 322,000 to 331,000, the low for the cycle.
WSJ economics reporter Kelly Evans and Phil Izzo discuss the latest jobless claims and a report showing existing-home sales slowed despite declining prices.
“It appears new-home sales are at least stabilizing in the mid-300,000 range,” wrote Adam York, an economist for Wachovia. “We would not completely rule out further declines from here, but are hopeful that a bottom is forming.”
A bottom in sales doesn’t imply a bottom in prices. “With supply overhang still huge and mortgage financing difficult to obtain, home prices are likely to decline considerably further in the quarters ahead,” wrote Joshua Shapiro, chief economist for Maria Fiorini Ramirez Inc.
So is the current rate of overbuilding roughly
510,000- 356,000 = 154,000 per year, or am I missing something in my interpretation of these numbers?
It’s odd actually. I believe 510k is total starts, including multi-unit structures, whereas 356 is one-unit structures, though it’s not stated in that article. If you look at St. Louis Fed data - sales vs. starts for SFH are nearly identical - 356k vs. 358k.
However the short-run relationship between the two is actually somewhat irrelevant. What’s relevant is the build rate vs. the long-run consumption rate. The long-term rate is generally about 1,100k per year. The current consumption rate is very low of course due to prices falling, which means that in reality the “backlog” of homes is being relieved.
Backlog in this case though refers to two things combined:
A. Currently empty homes
B. Homes that people live in but shouldn’t be living in - i.e. that will be foreclosed on at some point and later empty.
A is actually fairly flat right now and has been for some time (though still very high). B is what went more through the roof during the bubble, but is now shrinking (though also still very high).
So A is flat, but A + B is shrinking as foreclosures happen.
Eventually when A+B get back to historic norms, home prices will flatten, relative to inflation.
I’m not sure I buy that A+B is shrinking; aren’t some areas showing WAY more NODs than sales? That suggests to me that since B is decreasing, A is probably increasing.
What is your source for saying that A is flat?
Census vacancy rates which have been 2.8 - 2.9 million empty units for about 2 years now.
There are indeed way more NODs than sales in many areas, however this is offset by builders selling new homes that they built 1-2 years ago. That is happening actually - I’ve been tracking builders’ unsold inventories, and they’ve been shrinking quite a bit. They still have a lot relative to the sales rate, but the absolute numbers have been coming down quite a bit.
I do think there’s a chance that A will start going up for a little while, because foreclosure rates are ramping up big-time right now as moratoriums are lifted, but the decrease in homebuilder inventories can only go so far.
B will continue shrinking of course as foreclosures are sold. What is unknown though is exactly what the value of B is - all we know is that it’s shrinking. We don’t know when it will stop shrinking because we don’t know what the value is. Its value depends to a great extent on the economy itself, and this will become moreso over time.
“A bottom in sales doesn’t imply a bottom in prices. “With supply overhang still huge and mortgage financing difficult to obtain, home prices are likely to decline considerably further in the quarters ahead,” wrote Joshua Shapiro, chief economist for Maria Fiorini Ramirez Inc.”
Not to mention….
1) Rising unemployment
2) Most who bought during the bubble years will be stuck in their houses (or trying to repair their credit if they foreclose), so they won’t be in the buying pool
3) Not many have a 20% down payment saved, or with a smaller down payment (e.g. 5%) can swing the required debt to income ratios demanded with stricter lending
As I see it, there will only be three primary groups left to buy:
1) First timers who have never owned
2) Pre-Bubble buyers who sold during the bubble and saved their cash
3) All cash buyers
How all this inventory will ever be absorbed anytime soon is beyond me.
Random anecdote:
I helped a friend move a couple of weekends back. It was one of the “demand-destruction” events I had mentioned a little while back: a friend who is concerned about losing her job was moving in with a friend instead of having a 3br rental-house to herself.
Anyway, as I strolled around the place, it occurred to me that they were doing the precisely wrong thing. 180-degrees wrong. But of course it was too late to change the tide of events at that point.
The friend she is moving in with bought her house at the peak–and within a couple of years it will become clear that she is way Way WAY underwater (yes, I tried to talk her out of buying back in 2006, but she would have none of it). Eventually, the thing that will make the most sense to do will be to walk away from it.
But the house that I was helping empty out was a PERFECT house for the recession/depression: 3br upstairs, one BR/BA/LR in the basement, nice big living spaces on the ground floor, and relatively inexpensive rent for the area. You could pack 4 in there pretty comfortably, and incredibly cheaply—which would be a perfect way to ride out the recession.
Instead, she’s moving into the house that is owned by her friend; it’s much smaloler, and they definitely won’t want more than two in that house, and (at a guess), probably costs 1.5X in cash-flow what her current rental does (so 75% if split). But before this thing is over, I’m guessing they’ll both realize they could be paying less elsewhere on a rental.
The thing that would have made the most sense would be to help the other one move out of the owned house and into the rental.
Sigh.
Some things you can’t explain even to a good friend.
Dang.
The nineteen biggest financial institutions are too big to fail and will not be allowed to.
http://www.msnbc.msn.com/id/30390411/
The criteria for the stress test released.
http://www.marketwatch.com/news/story/US-releases-bank-stress-test/story.aspx?guid=%7BA0F3B386%2DD75B%2D4301%2D96DB%2D5315B135CB98%7D
“The Treasury asked banks to provide details about whether they have geographic concentrations in particular securitized assets. The agency will also look at credit card debt and commercial loans and packaged commercial loans.”
I’m surprised they’re still worried about geographic concentration. After all, it’s contained to planet earth.
After all, it’s contained to planet earth. It’s what our alien overlords want us to think.
Hard time hits the zoo; dozens of animals expect the pink slip:
Ee-Ee! Ooh-Ooh! Animals Get Pink Slips at Bronx Zoo
Posted By:Cindy Perman
Think you’ve got problems finding a job? Yeah, well at least you have opposable thumbs.
Faced with a $15 million budget shortfall, the Bronx Zoo, like other zoos across the country, is being forced to lay off some of the animals in addition to their human counterparts.
The 265-acre wildlife refuge in the middle of New York’s concrete jungle is closing four exhibits and giving pink slips to hundreds of animals, including deer, bats, porcupines, foxes, lemurs and antelopes, the AP reported.
What’s a laid-off lemur to do? What kind of job can you get if you’re a porcupine?
You can’t type. You can’t work a cash register. The Lion King and Madagascars 1 and 2 have already been cast. And let’s just say, with the unemployment rate barreling toward 10 percent, there aren’t many positions open that require skills such as waddling around and licking salty things. [DIS 20.31 0.68 (+3.46%) ]
When reached for comment, one of the night monkeys said: “Ee ee … ooh ooh… ah! ah!,” then threw a handful of excrement at the paparazzi.
Arleen the antelope took a long drag on her cigarette and then replied: “Are you, #$%^-ing kidding me?”
Words failed the lemur when he learned of the news, but his reply was no less dramatic:
Then he promptly ate the pink slip.
But don’t worry about where the next banana’s coming from: These New Yorkers are going to be shipped off to other zoos across the country. You’ll recognize them because they talk faster and are more surly than the animals from other regions of the country.
“You’ll recognize them because they talk faster and are more surly than the animals from other regions of the country.”
Advantage in a zoo is you feed one laid off animal to another you want to keep.
Don`t tell Pilosi
Fla. Lawmakers consider off shore oil drilling April 24, 2009 5:24 PM ET
All Associated Press news TALLAHASSEE, Fla. (AP) - The state House is ready to vote on a bill that would let the governor and Cabinet approve oil drilling within three miles of Florida’s coast after Democrats spent more than an hour raising concerns that the proposal could hurt the environment and tourism.
Democrats also questioned why the proposal came up so late in the 60-day annual legislative session and whether there’s even enough oil off the state’s coast to make exploration for it and natural gas worthwhile.
Hey Olygal! I have 2 words for ya:
Betty Hutton
For some reason, that’s who you remind me of.
You wouldn’t happen to look like her, would you?
Veronica Lake?
Judy Holiday
I look like a meaner, shorter Malibu Barbie-doll except with fangs and no b00bs. Is what I recently hear.
However, this was from someone who was vexed with me for some stupid reason or other, and I don’t believe it. IIIIIII think I look like Veronica Lake!
Hey! Sleepless-near-seattle! You’ve actually met me, what do you think I look like? (Say ‘Veronica Lake’. And that I have b00bs!)
Olympia,
Of course you have B00bs, and they are a wonder. No gentle female spirit of the forest such as yourself could not have B00bs. They are the essence of the nurturer. Hey, the Bible says that God has B00bs, and you are in his image, right? Some cannot see beauty with their eyes open.
Most of our self image threats are from people with no perception, who try to project their pathetic self image of worthlessness on us, like it will make them feel better to make us cringe or cry. Cast them off, they are the odd piece of the jigsaw puzzle, that will not fit anywhere!
Skye
Of course you have B00bs, and they are a wonder. No gentle female spirit of the forest such as yourself could not have B00bs. They are the essence of the nurturer. Hey, the Bible says that God has B00bs, and you are in his image, right?
Freak, yeah! ‘Zactly! Welllll spoken, sirrah! Especially the ‘they are a wonder part’.
*shouts enthusiastically down at torso *
“Ya hear that, b00bs?! Yer fine! Blue Skye says so! Go, b00bs, go!’
You know, I think they appreciated that.
Oh, and frankly, I thought she was far more talented than Lucille Ball.
+1
Miracle on Morgan’s Creek.
Of course, you have the inimitable Preston Sturges directing …
Friday night is bank & credit union failure night
bloomberg.com/apps/news?bid=20601039&sid=aColIYAe.RaU&refer=home
April 24 (Bloomberg) — Give money away. That was a solution to the housing crisis mortgage giant Fannie Mae hit on last year.
Faced with growing numbers of homeowners unable to make mortgage payments, Fannie decided to fund loans to borrowers that were instant losers.
The point was to buy time. Even though those loans resulted in a $453 million loss, they helped keep troubled homeowners from defaulting. That meant Fannie for now didn’t have to make good on loan guarantees that may have cost it as much as $2.4 billion.
The big game of kick the can strikes at a deep-seated fear among many investors — that banks and others faced with mounting housing losses are finding all manner of dubious ways to push a day of reckoning into the future.
If that’s the case, any improvement in the housing outlook might be a mirage obscuring even greater pressures building in the financial system. That would eventually counter better-than- expected first-quarter results from many banks.
Facts we don’t need no stinkin facts.
Known as the “HomeSaver Advance” plan, Fannie used the program to provide “foreclosure prevention assistance to distressed borrowers,” according to its 2008 securities filing.
The plan entailed Fannie funding loans to help distressed borrowers get current on their mortgage payments. Fannie said there were about 71,000 advances made in 2008 with an average value of $6,500.
Really Thinking
Fannie funded $462 million in such loans during 2008. The company tells investors in notes to its financial statements, though, what it thinks the loans are actually worth.
Based on market prices, Fannie said the loans had a value of just $8 million. That’s right, the loans, which are in many cases just months old, were worth 1.7 cents on the dollar.
My tax dollars at work. Few for a minute I thought they were wasting them.
http://openid.net/
I alone luv you.
I alone temp you….
fear is not the end of this….
Comment by Faster Pussycat, Sell Sell
2009-04-23 20:11:56
It’s best to play with pussies when they don’t bite off your tongue.
here’s yer kitty cat… (___*___)
outed again..
hey everyone,
Way off topic but…Beware of the new swine flu epidemic. No vaccines for it. Number one - avoid public places, yes public transportation, sporting events, concerts, and so on. Wash your hands with soap and often. Keep a balanced diet, and be sure you have at least 20 minutes of intense calorie burning exercise per day. It raises your body temperature, sweats out toxins, and burns up some contagious viruses.