Bits Bucket For May 2, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Thornburg Mortgage Files Bankruptcy, Blames Weakening Market…
By Dawn McCarty
May 2 (Bloomberg) — Thornburg Mortgage Inc., a 16-year-old “jumbo” home lender that rose and then fell with U.S. mortgage markets, filed for bankruptcy a month after saying it would seek court protection and shut down.
The company, based in Santa Fe, New Mexico, listed assets of as much as $500 million and debt of more than $1 billion in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Baltimore.
The mortgage loan market “has been adversely affected by weakening house prices, increasing rates of delinquencies and defaults on mortgage loans,” Clarence G. Simmons III, Thornburg’s chief financial officer said in court papers.
Thornburg said it, along with units that are in bankruptcy and others that aren’t, had a total of $24.4 billion in assets and $24.7 billion in debt as of Jan. 31, according to court documents. The company said it had $19.7 billion in assets and $19.3 billion in debt in “securitization trusts” of affiliates that haven’t filed for bankruptcy. In April, creditors took control of some assets held outside the trusts that were valued at about $4.4 billion.
Thornburg specialized in mortgages of more than $417,000, typically used to buy more-expensive homes, and invested in mortgage-backed securities. Jumbo loans, those too big to be sold to government-run mortgage buyers Fannie Mae and Freddie Mac, financed 10 percent of Southern California home sales in March, down from 40 percent a year earlier.
Housing Crisis
Founded in 1993 by Garrett Thornburg and Larry Goldstone, the lender thrived for 14 years by providing mortgages to borrowers with high credit scores who kept their homes even as the housing crisis escalated. By avoiding subprime loans and the defaults that followed, Thornburg’s delinquencies accounted for only 1.6 percent of its $21.4 billion portfolio at the end of last September, according to company reports.
Thornburgh started running short of cash in August 2007 as foreclosures nationwide headed toward new highs and investors became leery of assets backed by home loans. A bailout in March 2008 from buyout firm MatlinPatterson Global Advisers LLC failed to revive the company as lenders demanded payments to cover the plunging value of mortgage assets.
The company had $7.3 billion of mortgage-backed securities and owed its lenders $4.7 billion against those assets, according to company presentations. Thornburg on April 1 agreed to transfer its mortgage-servicing rights to the investment firms.
Remaining Assets
Thornburg said last month that it would seek bankruptcy and shut operations. Its remaining assets will be sold or liquidated to pay bondholders and creditors, according to the April 1 statement.
Wow! Thanks for that wmbz. Just goes to show you that even safe mortgages weren’t really safe and that the foreclosure bug is climbing up the ladder. Sure glad we didn’t buy that house last summer. Thanks everyone!
The relentless destruction of money rolls on.
RE: The relentless destruction of money rolls on.
WSJ had a clip this AM that the FED is gearing up for a multi-billion $$$ bail-out for the commerical real estate sector.
Yeah, Bernake, ya putz, why don’t ya give Steve Winn and Co., a few billion of taxpayer money so Wal-Mart America can continue to go watch the circus sideshow and play black-jack with credit card cash advances.
I would put it the money was destroyed when it was given away on bad loans a few years ago and frittered away on vanity items while everyone was in a state of euphoria. All we are seeing today is the bitter harvest.
On one side of a loan is debt, on the other side is someone’s else’s money. If the debt vanishes so does the money.
Those who think they have money because it is owed to them will rudely discover they don’t if the debt is repudiated.
A shockingly obvious point that seems to escape just about everyone.
With Jumbo lenders like Thornburg and Indymac biting the dust left and right, who will be around to prop up home prices in markets (like coastal California) which were heavily dependent on Jumbo ARMs for new money just a few years back?
As I’ve stated previously, 3 homes near me (Los Altos, Ca) for sale sit and wait. Been a loooong time since I’ve seen that. While I expected it, I’m sure it’s a shock to some of the “faux rich” around here.
Do you think those homes would sell if they lowered their asking prices? How much would they have to lower them?
(I suppose a $1-initial-bid-price no-reserve auction would suffice to answer my questions…)
Do you think those homes would sell if they lowered their asking prices >>
Yes they would…IMO, here are a few reasons why;
Estimated median household income in 2007: $143,832 (it was $126,740 in 2000)
Los Altos: $143,832
California: $59,948
Races in Los Altos:
White Non-Hispanic (78.2%)
Chinese (8.1%)
Hispanic (3.0%)
Two or more races (2.8%)
Japanese (2.6%)
Asian Indian (2.6%)
Korean (1.0%)
Other race (0.7%)
Other Asian (0.6%)
For population 25 years and over in Los Altos
High school or higher: 97.2%
Bachelor’s degree or higher: 71.3%
Graduate or professional degree: 35.8%
Unemployed: 1.8%
Crime rate;
82.5 vs. national average 320
ZERO murders in the past ten years..
Bear,
Yes I think they would sell. For that matter I think anything can be sold at virtually anytime with very few exceptions.
This is a very nice place to live and hopefully it remains so.
“For that matter I think anything can be sold at virtually anytime with very few exceptions.”
I concur. In fact, when pols and top policymakers claim that liquidity is drying up, I always look to see which man behind the curtain drained the liquidity out of the system. For a couple of examples:
1) If so many policy makers were not making thinly-veiled threats to jump start housing price inflation, would-be sellers would have little reason to hold out hopes for higher prices in the next twenty years;
2) If the Fed did not drop interest rates to the floor, taking away all incentives for savers to loan out money, then we would not have such a severe credit crunch.
Bingo! The flip side of ZIRP is that savers like me pull their money out of banks in response to nonsensical interest rates. Why save money at 0.5% APR? It’s nuts.
An institution that held an IRA account for me for 20 years reduced my interest rate from 5.1% to 3% on March 1st. I got a much better deal elsewhere and said goodbye.
Well, savers can loan out money at very high rates to people who can’t get credit elsewhere. But you have to have a reason to think you’ll be paid back. (My reason is, all my mortgage clients are still current. Of course, this could change at any moment. The reason why it might not change is, three words: big down payments.)
Nice to hear from you and your special investments. Keep it coming. Glad you’re OK, and you have taught me a lot over the years.
I don’t know what gives, but this property in the wealthiest area of Reno, NV just sold for $2,200,000, near peak bubble pricing. It makes absolutely no sense given the market is down nearly 50%. Something reeks about this sale. I’m not sure how it’s even possible. Certainly they didn’t need purchase money financing as no appraiser would sign off on something like this. Or would they?
http://www.zillow.com/homes/map/5695-Lausanne-Reno,-NV_rb/
FHA loan limit is over $700k in So Cal. So to answer your question, who will be around?
You the taxpayer.
The “jumbo” properties up here in Washington’s Columbia Basin usually include acreage with horse facilities and/or lake front access with a ski boat dry-dock. These high end places that are for sale have been sitting empty now for over 18-months as lending has dried up. Very few folks in this wind swept rural area with 7-month long winters can honestly support a jumbo mortgage.
I am seeing very little sales in certain traditionally Jumbo-funded San Diego zip codes these days. Case in point — Rancho Santa Fe (from DataQuick March 2009 sales report):
Place / Zip Code / SFRs / Median price / YOY pct change / Condos / Median price / YOY pct change / All combined new / Median price / YOY change / All combined / Median price / YOY change
Rancho Santa Fe 92067 3 $7,000,000 132.2% 0 n/a n/a 3 $1,300,000 -12.4% 6 $7,000,000 132.2%
Rancho Santa Fe post office 92091 3 $529,000 -66.4% 0 n/a n/a 1 $2,300,000 n/a 4 $537,500 -65.9%
Total homes sold in Rancho Santa Fe for March 2009 = 6 + 4 = 10.
There are over ten full pages of listings (more than 200 homes) for these two zip codes on the ForeclosureTown dot com web site, so it is not an inventory shortage that is suppressing sales.
P.S. Based only on those foreclosure listings (which probably understate total inventory by a factor of 1/2 or so), it would take 200/10 = 20 months to clear out the current Rancho Santa Fe inventory at the current sales rate.
Hey, Get Stucco, could you re re-represent that in a more easily readable format? Thanks very much.
Apr 30, 2009
The storm yet to come
By The Mogambo Guru
… my lazy worthlessness or penchant for depravity is not, for a pleasant change, the point under discussion, but rather about how so little money is being spent that Mr Wiggin again grabs my attention, saying, “Total US retail sales have rolled back to levels we haven’t seen since 2005,” which is made more comprehensible if you “Imagine if every single retail shop opened in the last three years shut down overnight.”
The fact that a local barbeque place opened and closed in the last three years brought this tragically home to me, but it’s going to get worse as he notes that “it was the first wave of defaults in ’subprime’ mortgages that sparked today’s economic meltdown”, which was bad enough, but not as bad as the news that a “second wave” of “toxic property loans, however - a flood what you call ‘option ARM’ or ‘Alt-A’ loans - won’t hit peak resets until 2011.”
And when they reset, the owners will find to their shock and dismay that these loan contracts “also carry a ‘reset’ risk in the fine print,” alerting the mortgagee that “already high monthly mortgage payments could as much as double - right at the height of the second biggest market meltdown since the Great Depression.”
He figures that “Millions more consumers will freeze up as their finances go over the cliff … more bank losses will drag down even more so-called ‘blue chip’ retirement portfolios … and the impact of the consumer bust will get ‘multiplied’ yet again. Millions more Americans could lose everything.”
…
Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
Too bad for Alt-A and prime ARM holders that the cramdown legislation was crammed down. That could have potentially resulted in people who bought $700,000 homes they could not afford having their principle balances written down to a meager $400,000, with $300,000 chipped in from renters and other non-debtors to help the wealthy manage their burdensome debt loads. After that, it would apparently be relatively little additional challenge to lock in generational low monthly payments on the refinancing of $400,000 in debt, with the interest rate subsidy provided courtesy of the Fed. Sorry to all the FBs living in expensive coastal housing who thought nearly-free luxury living was in the bag at the expense of myriad taxpayers in flyover country who would have implicitly borne the tab.
thank god it was defeated
Missed it by that much.
The Mogambo Guru is a true comic.
What the heck does he mean by “second biggest market meltdown since the Great Depression” ? Doesn’t he mean the biggest since the GD?
There was a pretty big recession in 1958.
Berkshire’s Munger Says ‘Venal’ Banks May Evade Needed Reform
By Christine Harper, Betty Liu and Erik Holm
May 2 (Bloomberg) — Berkshire Hathaway Inc. Vice Chairman Charles Munger, whose company is the largest private shareholder in Goldman Sachs Group Inc. and Wells Fargo & Co., said banks will use their “enormous political power” to prevent changes to the industry that would benefit society.
“This is an enormously influential group of people, and 90 percent of that influence is being spent to gain powers and practices that the world would be better off without,” Munger, 85, said yesterday in an interview with Bloomberg Television. “It will be very hard to accomplish the kind of surgery that would be desirable for the wider civilization.”
Munger said policy makers should seek to impose limits on banks that are deemed “too big to fail” after financial institutions worldwide suffered more than $1 trillion in losses. The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the recession.
“We need to remove from the investment banking and the commercial banking industries a lot of the practices and prerogatives that they have so lovingly possessed,” Munger said. “If they are too big to fail, they are too big to be allowed to be as gamey and venal as they’ve been — and as stupid as they’ve been.”
Omaha, Nebraska-based Berkshire Hathaway, run by Munger’s long-time business partner Warren Buffett, nevertheless is a large investor in some of the biggest U.S. banks.
Goldman Sachs
Berkshire paid $5 billion in September for preferred stock and warrants in New York-based Goldman Sachs, which was the world’s most profitable and highest paying securities firm before converting to a bank holding company. Goldman is now the fifth-biggest U.S. bank by assets.
Berkshire’s second-largest holding by market value after Coca-Cola Co. is Wells Fargo, the sixth-biggest U.S. bank. Berkshire also owns stakes in Bank of America Corp., the biggest U.S. bank by assets, as well as U.S. Bancorp, M&T Bank Corp. and SunTrust Banks Inc.
Munger said the financial companies spent $500 million on political contributions and lobbying efforts over the last decade. They have a “vested interest” in protecting the system as it exists because of the high levels of pay they were earning, he said. The five biggest U.S. securities firms, only two of which still exist as independent companies, paid their employees about $39 billion in bonuses in 2007.
“They would like to get back as closely as possible to business as usual, and they have enormous political power,” he said.
“Omaha, Nebraska-based Berkshire Hathaway, run by Munger’s long-time business partner Warren Buffett, nevertheless is a large investor in some of the biggest U.S. banks.”
So Warren Buffett the man who said what a shame it was that his secretary paid more income tax that he did is a direct beneficiary of billions of dollars in tax payer bail out money. Come on Warren how about 29 cents on the dollar, take one for the team. I know someone that will stand with you.
“So Warren Buffett the man who said what a shame it was that his secretary paid more income tax that he did”
And he was full of crap when he said that. He based that assertion on social security tax which Warren only pays on up to $109K a year of income whereas his secretary pays it on 100% of her income (assuming she makes less than $109K a year).
But that’s not really a “tax”. It is a pension plan where the secretary will get what she puts in and Warren will get back what he puts in. In other words the tax paid by both is proportional to the benefit received by both.
A typical secretary makes $40K a year. With just the standard deductions, she will pay 5-10% income tax or $3K to $4K. With some 401k contributions, a kid or two and a mortgage, she will pay $0 income tax. At the very least, if Warren takes his entire income as dividends, he will pay 15% of a few hundred million.
‘But that’s not really a “tax”. It is a pension plan where the secretary will get what she puts in and Warren will get back what he puts in.’
Really? Time will tell what she gets out, won’t it?
“In other words the tax paid by both is proportional to the benefit received by both.”
THAT, my friend, is a fraud. It is just a tax for anyone born after 1958, and an unfair tax at that. Surely you aren’t one of those who claim the payroll tax is a pension plan when talking about tax equity, but say Social Security is a welfare program when talking about expenditures?
“It is just a tax for anyone born after 1958″
I know 2 men born after 1958 that are receiving full SS disability benefits. Unfortunately they are both far healthier than most people their age. Always out working on their vehicles, playing catch with their kids riding bikes. I think about them on the 15th of every month when I make my tax deposit where I am not only paying my SS but matching my employees.
WT-
How did you come up with the 1958 date?
Scores of 51 year-olds are anxiously awaiting your answer.
It is approximate.
Aren’t these the folks who will have to wait until age 67 to collect — in theory?
And these are also the folks who spent all of their careers paying the higher post-1983 FICA tax rates.
Also, these are folks who entered the labor force during after the 1970s recession. Real wages for most Americans have been lower since.
It’s a bad deal all the way around and I wish I had the option to opt out. But that’s a whole different discussion. As far as the SS tax goes, it is “fair” in the sense that the more you pay in the more you get out.
Whether SS will be solvent in the future is up for debate. However as it currently stands, it is a pension plan where you get out what you put in. And if you earn $30K and pay 12.4% into the system you will get less than if you earn $100K and pay 12.4% into the system. And that’s the way it should be.
And if you earn $1 million you shouldn’t get anything at all, or remove the contribution cap entirely.
One or the other.
Social Security is a really bad deal for all but the poor. Only the poor have any hope of getting out more than they paid in, due to a benefits formula that progressively penalizes higher income earners.
I stopped working at 55, because paying the maximum into SS for ten more years would have added exactly $70 a month to my benefit. I’d rather have fun.
“And if you earn $1 million you shouldn’t get anything at all, or remove the contribution cap entirely. ”
Agreed. Only if you contribute nothing.
Nope. Removing the cap would be a moot point. SS is an insurance pool, not an mutual fund.
I’m with Bob in Vegas. Stopped taking a salary at 49. My mortgage biz may be risky but at least I contribute no more to SS. What I put into SS before that will eventually provide a subsistence if I screw up and lose my major assets.
Schemes and scams won’t much matter as SS will likely be means tested. Getchya on both ends.
So far the increases in payroll taxes in the 80’s have been nothing more than a tax increase to enable current spending without raising income or other taxes. With the decrease in employment, Social Security could be in deficit as early as next year (payroll taxes coming in versus benefits paid out). We’ll then begin to find out if those payroll tax increases were anything more than a huge tax increase on middle incomes to support current spending versus funding future benefits.
Regarding Social Security disability payouts, here’s something a bit more than anecdotal but nothing on which I’ve never kept score. Over the past two decades, I’ve seen literally thousands of presentence reports. These are prepared after a defendant either is found guilty by a jury or pleads guilty. When a judge imposes sentence on the defendant, he or she will have the report, which gives details on the crime, the victim’s input, particulars on the defendant’s education, background, etc. Well, one standard section of the report details the defendant’s finances: income, assets on one side; debts on the other. I’d estimate that 33% of the reports list on the income/assets sides of their charts monthly Soc. Sec. disability payments. Does sociopathy qualify as as a disability? Apparently, it does.
well I hear “mental” is one of the surest ways to collect. Much better than trying a soft-tissue injury claim, which is old hat. This I heard from a gal who “won’” SSD this way. A lawyer showed her the ropes. I think she felt she had to believe her own story though, because she went from being a pretty normal and pleasant person to being a f*cked up loser. You reap what you sow I guess.
With SSD you get Medicare and Section 8, which is not really that bad a deal in Montana.
He also figured in the amount of property taxes she paid on her house in Omaha vs the property taxes on his multi-million dollar house in San Fransisco.
Ha! But I thought Social Security is a pension plan and the funds are in a “lockbox”! \Stupid me.
Haha! I forgot about the ‘lockbox’ phrase….
Thanks.
‘“They would like to get back as closely as possible to business as usual, and they have enormous political power,” he said.’
It is this attempt to get back to business as usual under the false pretense that no world changing events occurred last year that I expect to drag out the financial crisis for many years to come.
Unfortunately, you are probably right.
“$12.8 trillion, an amount that approaches the value of everything produced in the country last year”
I don’t quite agree with this smart man. Isn’t government spending itself part of our GDP? How can you consider that something of “value produced”?
How can you consider that something of “value produced”? A bridge built with gov’t money is still a bridge for all that. Our “rule of law,” such as it is, does ease the process of making a living for many people. Would you prefer the current Bulgarian system, discussed a day or so ago on the HBB?
Buffett dispenses gloom at somber Berkshire fest May 2, 2009 4:12 PM ET
All Thomson Reuters newsOMAHA, Nebraska (Reuters) - Warren Buffett told a record crowd at a somber annual meeting of his Berkshire Hathaway Inc that first-quarter operating profit fell and the company’s book value declined 6 percent, as the recession weighed on many of the company’s businesses and investments.
Operating profit fell about 12 percent from a year earlier to $1.7 billion, as most of Berkshire’s businesses were “basically down,” Buffett told an estimated 35,000 people at the meeting in downtown Omaha.
The decline in book value results in part from falling stock prices and higher losses on derivatives contracts, and comes on top of a 9.6 percent decline last year, the biggest drop since Buffett began running the company in 1965.
The outlook punctuated a meeting that had a decidedly more serious and somber tone from years past as many investors expressed worries about the economy, Berkshire’s investments, and how long the 78-year-old Buffett plans to stay on the job.
Half the questions were pre-screened by journalists, providing a tougher and more substantive dialogue with Buffett and his 85-year-old vice chairman, Charlie Munger.
Berkshire’s stock has fallen 39 percent since December 2007, but Buffett said no stock buybacks are planned because Berkshire’s share price is not “demonstrably below” the company’s intrinsic value. Profit fell 62 percent last year.
Buffett offered a gloomy forecast for parts of the economy and Berkshire itself, saying some units are laying off workers as managers “look at the reality of the current situation.”
He also said massive federal efforts to stimulate activity could pay off, at a possible cost of higher inflation.
“It has been a very extraordinary year,” Buffett said. “When the American public pulls back the way they have, the government does need to step in…. It is the right thing to do, but it won’t be a free ride.”
Bottom is called, bottom is called!!
(in 2007 that is)
http://www.signonsandiego.com/uniontrib/20070501/news_1n1forecast.html
They’ll get it right eventually….
“The Anderson forecasters, who took the lead in predicting a housing slowdown nearly four years ago, project that prices will decline by less than 2 percent through next summer, then start to rebound.”
2009 - 4 years = 2005
You all remember when the Anderson forecasters took the lead predicting the housing slowdown way back in 2005, when Housing Bubble Bloggers were insisting that real estate always goes up, don’t you?
Cough… Hack… Wretch… Heave…
I think I have come down with an instantaneous case of swine flu!
Sorry about the dumb math — should have said 2007 - 4 = 2003 (it took a while to dawn on my insufficiently-caffeinated brain that the posted article was two years old).
I grudgingly admit that Leamer made an esoteric academic argument about homes being overvalued back in 2003 (something about price-earnings ratio for housing), but where were these guys when it mattered, during the parabolic bubble price blowout of 2005?
*test*
Down here at the pawn shop
yop
yop
You know, I dropped by the local pawnshop the other day, looking for deals…. Most stuff in there was STILL overpriced. How much is a used Xbox (NOT an Xbox360)worth? Much less than the pricetag they had on it. Most of the tools were priced at about one woud pay for ‘em at Harbor Freight.
Foreclosure is a foot away (literally):
Found out last night that my next door neighbor has been served.
What to do, what to do? It’s still cheaper for me to stay put than to rent, but this summer will probably be the last best chance to bail as there are Olympic (2016) true believers out there to play the role of GF.
Dang, that’s close. When did your next-door neighbor buy?
Will 2016 prospects re-inflate or at least maintain pressure within our local bubble? First we have to make the cut in October. Even if we get the nod,
sevensix years is a helluva long time to keep asset prices afloat when there’s so much chaos in the surrounding world.The Alt-A and Option-ARM reset storm is right around the corner.
I’m genuinely curious why would real estate values go up because of the Olympics?
Other than renting during the event, Chicago already has numerous sports venues and cachet such that the Olympics shouldn’t add anything to property values.
Was there a runup of real estate values before or after the Olympics in LA, SLC, or Atlanta that could be directly attributed to Olympic fever?
Lots of money is pumped into a city preparing for the Olympics (new transit system, stadiums, athletic centers, hotels, roads, bridges, etc) and that money ends up some place.
Its sorta like a stimulus package for a city.
Vancouver 2010 is completely bananas, as far as real estate values go.
I never knew much about Teddy Roosevelt, other than the Rough Riders, Teddy Bears, Mt. Rushmore and “Walk Softly, but carry a big stick”. That was about it. And then I read this article in Vanity Fair magazine. What a guy! Sheesh, I wish he was still around so I could have a beer with him. Why can’t we have Presidents like this anymore? Imagine what the Grand Canyon would look like if it wasn’t for him.
http://www.vanityfair.com/politics/features/2009/05/teddy-roosevelt-excerpt200905
I think that we got the federal reserve as a reaction to what TR did to the PTB.
Palmy,
Go rent the DVD of John Milius’ 1974 film The Wind and The Lion. You will see the best portrayal on film of TR. Very loosely based on an actual event, you will see a Republican President use military force to fight a moslem terrorist. As is Milius’ wont, a surprisingly sympathetic portrayal of both sides is shown.
Highly recommended. If it’s not how TR really was, then it’s how he should have been.
“If Carlyle was correct in his theory that history is forged by the lives of great men, then Roosevelt earned his place in the American pantheon for simply refusing to let commercial interests desecrate this natural shrine.”
“Pedercaris alive, or Raisuli dead!”
Plus the Raisuli was one sexy dude, and the music and landscape were glorious. Great movie. It still stands up.
What a guy! Sheesh, I wish he was still around so I could have a beer with him. Why can’t we have Presidents like this anymore? Because the electorate, such as it is, chooses each President, and the electorate ain’t what it used to be!
Actually there’s another reason - in days gone by the party bosses picked the nominees, not the voters via the primary system. IMHO the party bosses did a much better job.
LOL, this is basically a condotel. I suppose you could live there, if you didn’t mind eating out all the time. But essentially, you’re buying a bedroom here. I don’t recall these being as high as $220,000, but I do recall them priced at $100,000, not long ago.
http://tampa.craigslist.org/hil/reo/1150397938.html
A lifetime room (er, boat anchor) at a “5 Star Resort Comminuty [sic], with membership access only” for the low, low price of $39K? If I don’t buy now, I could be priced out forever …
If there’s one thing inherently fraught with more downside than a condo, it’s a condohotel.
Bah.
Would be worth it on the gulf. On the bay, why bother?
Looks like a converted motel to me…
A blow to Fla. homeowners: 10% insurance hike
By MICHAEL C. BENDER
Palm Beach Post Capital Bureau
Friday, May 01, 2009
TALLAHASSEE — Property insurance rates could jump 10 percent this year across Florida under a bill state lawmakers approved Friday and sent to Gov. Charlie Crist.
If Crist signs off - and he has indicated he would - it would end a three-year rate freeze for Citizens Property Insurance Corp. customers and dismantle some of the changes lawmakers made in 2007 to suppress rates from private insurers.
I’m telling you, there is a very simple way to understand Florida lawmakers: whatever is the worst thing for the most Floridians, is what will happen.
You’re makin’ me feel all warm n’ fuzzy about Illinois politicians, ’cause occasionally we the people make out OK despite our long history of corruption and backroom intrigue.
The thing is, stuff gets done in Chicago. In Florida, you can count on another swamp being drained, and that’s about it.
You guys have waayyy better hair, though.
As I walked in the swamp, I sat upon a cypress stump…
I thought that I heard the ghost of Osceola cry…
Blow, Seminole Wind
“Property insurance rates could jump 10 percent this year across Florida under a bill state lawmakers approved Friday and sent to Gov. Charlie Crist.”
Presumably replacement costs have gone down and risks haven’t generally changed. So the unstated reason is they need higher rates to cover investment losses?
Thats how insurance works, you pay out claims from incoming premiums and the interest off of the float is your profit.
Or else they mis-priced the risk before and are adjusting it into line….
My brother, who lives near Orlando, is the only person besides me that I’ve ever known to Go Naked without homeowner’s insurance. His house is worth about 4% of his other assets. If he had to replace his house, it wouldn’t be a life-altering disaster. Meanwhile, the ins co’s would want a high rate AND a high deductible. He said go to hell.
It’s not really what I would like to picture while Going Naked.
I was in Dallas on a business trip this week. We walked around downtown a bit on the way to dinner on Thursday. There is a naturally occuring downtown, but it looks like some developers were trying to extend the area with some of the new urbanism walk around retail. I saw LOTS of empty street level store fronts. Lots and lots.
Someone should tell the developers that if they want people to walk around a downtown area, they need to volunteer to fix the sidewalks. I wouldn’t just stroll around that area on a regular basis. We were literally tripping over our feet on the uneven pavement. We tried to ask directions from the only other adults we saw walking - they were also from out of town.
My cab driver sounded like an HBBer at first - had bought his house for $68K before things went up with $45K down, acknowledged and was horrified that he could have bought a $250K custom home at the time, etc. But even this fairly level headed person gave evidence of having drunk a little Kool Aid: the house value went up to $110K and is still worth $90K so he thinks he “bought at a great time” (evidence of thinking of the house as an investment) and he thinks there haven’t really been lay offs in Dallas and won’t be and that the economy has made its final turn for the better.
I told him that commercial real estate issues were only just hitting and that there was a new set of mortgage resets that has only just started. Then I gave him a pretty good tip.
3-Dimensional Dallas downtown model built to sell urbanite condos.
Pics: http://www.creativegeographics.com/urban
Also: a 3D flyaround in QuickTime video.
For a look at the latest in what Dallas builders are creating:
The result is Urban Reserve, a 13-acre development devoted to contemporary design. Pass a neighborhood of standard issue brick tract ranches and turn onto Vanguard Way and suddenly one confronts what looks like scene from a science fiction movie.
One building looks like a rusty metal box; down the road is “Like a Houseboat,” a boxy structure bearing the lines of its namesake. At one end stands a gray and tan stucco with a silo-like tower — its owners plan to use an upstairs deck for martini parties. At the street’s other end is a steel and reclaimed redwood structure that looks like an enormous tree house.
http://online.wsj.com/article/SB124114122391175831.html
I MUST have one of those signs:
‘Ms. Cheatham, the developer, has made up new lawn signs: “Cool People Live Here. Please Do Not Disturb.”‘
Seriously, skroodle, could you or one of your henchmen steal me one?
If *only* I had henchmen!
minions, sidekicks, stooges, accomplices ?
Urban Reserve. I may have to move there.
I’m designing “What Bubba Likes” - a boxy structure shaped like a Lazy Boy recliner, its stucco exterior an homage to the upholstery of a recliner that has been exposed to the elements for a while.
A recycled “green” landscape replaces the traditional lawn, a ground cover of pop-tops, with a melange of old pickup trucks on blocks, recycled toilet bowls planted with spider plants, and beer-can wind chimes.
See? I learned to do the laughy face today. I knew it would come in handy.
What? You got spider plants growing out of old toilet bowls?
‘m sooooo sick of the stuccoid faux mediterranean she-it with the pseudo flagstone veneers that a rusty box sounds O-tay!
RE: the uneven sidewalks. The soil in the Dallas area contains a lot of Bentonite, which has the unfortunate characteristic of expanding significantly when it absorbs moisture, and shrinking again when it dries out. Kinda like frost heave up north, but it’s a year-round phenomenon and more pronounced.
When we first moved to Dallas in the early 80’s and rented a house, the lease actually had a clause that we water the house’s foundation on a regular basis!
I used to drive on new relatively unused streets near Las Colinas where it was hard to drive at night (no buildings yet so no street lights). Hard to drive because the streets were so wavy after a couple of years that my headlights were alternating aimed too close in front of me or aimed up into the sky.
“I saw LOTS of empty street level store fronts.”
There’s lots of that here too - new multiple level condos with mostly empty ground level retail space. How long can builders afford to let that space sit vacant before lowering rents enough so the space is occupied?
Here in the OC (CA), the model of commercial downstairs with a residential loft in the two stories above attracted several developers in Brea, Orange, Anaheim, and other cities. Most remain unsold after a year or more.
Downtown Dallas has been that way for many years.
Wait until August when it hits 105 and there will be nary a soul on the streets..
BTW: a lot of the buildings are connected via underground walk ways.
Your cab driver was wrong. There have been huge amounts of layoffs in Dallas.
Many Fortune 500 and slightly lessor companies have their headquarters or significant operations there.
I told him that commercial real estate issues were only just hitting and that there was a new set of mortgage resets that has only just started. Then I gave him a pretty good tip.
You’re a good’un, polly. Walking the world generously dispersing information AND good tips. Like Johnny Appleseed!
Except not wearing a pot on your head, I assume.
Nope. No pot on the head. But I do get to wear a wreath of flowers to celebrate the coming of the May tomorow.
Quid pro bailout
The Croesus Chronicles
Killing Us With Crony Capitalism
Robert Lenzner, 05.01.09, 08:10 PM EDT
Saving the system still involves retention bonuses, hedge funds, credit cards and stress tests.
The stench of crony capitalism obscures the very real challenge of turning around an economy losing 6% of its value on an annualized basis, and it is also in danger of snuffing out the stock market rally.
Imagine that Citigroup, in hock to Uncle Sam for $45 billion in capital, $306 billion in guaranteed debt, as well as the backing of its recent financings, wants to pay senior executives tens of millions of bonuses to retain their services. While the nation’s job losses still mount at a 600,000 a month clip, and the future profitability of Citibank is in serious question, such a squalid move is a seamy attempt to maintain business as usual on Wall Street, even if it’s on the taxpayer’s dime. It will probably happen.
Then, there’s the cosmetic solution for the quandary of Ken Lewis, who was eased out of his position as chairman of Bank of America ( BAC - news - people ) only to remain as the CEO, despite his willingness to sacrifice his shareholders in acquiring Merrill Lynch, though he desperately wanted to renege on the deal. This is the kind of compromise deal that makes headlines and appears to be reform. It’s meant to appease the good governance folks fuming on the sidelines. When are Barney Frank and Chris Dodd going to call congressional hearings to air this out and the Bank of America secret meetings with Paulson and Bernanke, in which Lewis was allegedly pressured to acquire Merrill Lynch or lose his job?
It is a revealing and reviling case study of Washington and Wall Street unknown to the public or the market at the time. Paulson would not put his promise of financial aid in writing, because otherwise he would be forced to make it public. But on Dec., 22 Ken Lewis told his board of directors, 15 strong, and 12 other directors, the threat to remove the board and management. On Dec. 30, at a special meeting of the Bank America board, that it “could only rely on the oral commitments of Messrs. Bernanke and Paulson. All in all, this is one of the most curious and crucial examples of crony capitalism in which a takeover was ordered in return for bailout money.”
Aren’t FOMC members generally above the reach of US law?
And the BIS employees too. Immunity on steriods and I believe it’s international!
Lewis didn’t “desparately” want to do the right thing. If he was desparate he could have done it. Probably would have cost him his job, but that is about it. No, he knew it was the right thing to do to kill the deal, especially given his responsibility to his shareholders. But, evidently, doing the right thing was not a high enough priority.
Tell Mr. Lenzner to go back to journalism school.
Polly,
My mom always was fond of reminding me that “there is ‘a rat’ in ’separate’.”
I guess you are suggesting there is not ‘a rat’ in ‘desperate’?
I know you are trying to be funny, prof, but, despite my atrocious spelling, what I am really trying to say is that journalists are trying to make Lewis look like some sort of victim and it doesn’t hold water. It is nice story line, since having a victim makes Paulson the bully and you get a nice clear narrative that everyone can understand. The hard job is to make ordinary people understand that in this type of deal making, the bully/victim thing is not real. They all have more than enough money to just turn around a walk away. That gives them power, not victimhood.
Lewis could have done the right thing. He would have lost his job and some status and some of his country club buddies might have jokingly told him that he brought down the US economy by letting Merril go down in flames (as opposed to whoever gets blamed for Lehman going down in flames taking the hit). But he would still be a hugely wealthy man. And he could have gotten his warm fuzzies by doing a few serious interviews (Bill Moyers and Charlie Rose come to mind) and saying in a ponderous voice that he just couldn’t do such a thing when he knew it was wrong for his shareholders and all the little old ladies and pension funds and other appealing regular folks were counting on him.
Polly, please excuse my gentle ribbing. Your insights are always greatly appreciated (and my spelling is far from perfect!)…
A crook getting taken by another crook shouldn’t be viewed as a sympathetic figure. A crook that voluntarily turns in another crook without any incentive to do so could be viewed differently.
The only thing that makes Lewis potentially less vile than Paulson is that we may now know more about the bailout process than we did earlier.
Lewis, Paulson and Bernanke were all engaged in a charade, and share responsibility for that part of the debacle. There are few people in positions of power who refuse to play in the charade.
As an ML bondholder, I was of course relieved by the BofA purchase — makes me think there must’ve been a bunch of politically powerful ML bondholders such as CALPERS hiding behind the curtain.
J K Galbraith’s “A Short History of Financial Euphoria” describes the obligatory Congressional hearings to identify the usual suspects in causing a financial crisis as part of the normal aftermath of financial euphorias.
Politico
Hoyer backs meltdown commission
By ALEX ISENSTADT | 4/22/09 12:43 PM EDT
House Majority Leader Steny Hoyer is backing a new push to create a commission to investigate the roots of the financial meltdown.
“The bottom line is, everyone wants to get to the bottom of why this happened,” Hoyer told reporters Tuesday. “I think a commission certainly can be useful.”
Are those who thought they saw ‘green shoots’ certain it was not ‘green pools’ they actually saw?
‘Green pools’ sprout from foreclosures
In Las Vegas and across the West, health officials take measures to keep abandoned pools from breeding mosquitoes and disease.
By Ashley Powers
LA Times
9:06 PM PDT, May 1, 2009
Reporting from Las Vegas — In the arid Southwest, the backyard pool was the equivalent of the white picket fence: a sign the homeowners had achieved middle-class status. But as the foreclosure crisis emptied neighborhoods, the once-gleaming pools — caked with algae and infested with mosquitoes — became fetid reminders of all that was lost.
One afternoon in Las Vegas, Robert Cole approached a 3,215-square-foot house on Bracken Cliff Court, armed with his chief weapon against the mosquito scourge: a container of silvery fish. A “For Sale” sign advertised the pool and spa out back. You could smell them from the frontyard.
The deck area near the small pool was decorated with red rocks and outfitted with a blue basketball hoop. On the water’s surface, a slick of green algae inched toward a rubber duck.
Cole tossed four fish into the spa and six into the pool, and a few drops of water splashed him. “Ugh,” he grimaced. “I got that nasty stuff on me.”
Good article. Thanks, PB.
All sorts of enjoyable bits.
California, Arizona and Florida also rely on Gambusia affinis, or mosquitofish. The inches-long creatures can survive for months in stagnant water, and to them, a batch of larvae is a prime-rib buffet.
In Contra Costa County in Northern California, officials breed up to 2 million fish a year, and some residents bring them home in coffee cans….”In the past, you’d just tell homeowners to take care of their backyards,” said Craig Downs, the district’s general manger. “But in the last two years, nobody’s been home.”
In Maricopa County, Ariz., which includes Phoenix, authorities are on track to respond to 14,000 pool complaints this year, said John Townsend, vector control division manager. They’ll need a sea’s worth of fish…
Wow.
(and another choice article quote, from the mosquito-spraying guy)
Two things persuaded him not to buy a house. He found prices too high, especially in homes big enough for him, his wife, six kids and three Chihuahuas. And yet, a woman bagging his groceries told him she owned two homes. How could she afford them?
“She’s probably got two green pools now,” Cole said.
Again I say it: Wow.
…his wife, six kids…
Catholics or Mormons?
If we all close our eyes and squeeze ‘em shut really tight, perhaps we can imagine that lawn of dead, brown grass covered in green spray paint is actually a yard full of fresh green shoots.
Maybe the stock market works this way too? Why not see how the financial world looks if you take a bunch of failing companies and flood them with green fiat money?
Honey, time to spray the lawn
Foreclosures in Riverside County have left many lawns dead and brown. An entrepreneur is painting them over with green paint. Just add water, some chemicals — and a willing suspension of disbelief.
By David Kelly
LA Times
May 2, 2009
The Insta-Green crew arrived on Peppermint Drive in green caps and green shirts, carrying buckets of green paint.
Their mission?
Convert a long-dead lawn into a lush patch of grass worthy of any golf course or polo field.
No sod or seed required, just a bit of water, a few chemicals and the willing suspension of disbelief.
Supervising it all was David Milligan, a laconic entrepreneur with an eye for opportunity and a nose for the niche market.
“I just happened to be in the right place at the right time,” he said modestly, as his three workers trimmed the lawn in preparation for its makeover. “The whole world is green right now.“
LAT
Tom Petruno:
Market Beat
Stock market becomes harder to shock
Tom Petruno, Market Beat
May 2, 2009
Nine weeks ago, the stock market couldn’t find a single thing to be hopeful about.
Now, seemingly nothing can upset it.
Chrysler in bankruptcy? No surprise there. Possible global flu pandemic? The authorities will handle it. The economy shrank at a 6.1% annual rate last quarter? Ancient history!
Blue-chip stock indexes this week rose for the seventh week of the last eight, with the Dow Jones industrial average adding 44.29 points, or 0.5%, to 8,212.41 on Friday.
The Dow is up 25.4% from its 12-year low March 9. Many broader market indexes have racked up bigger advances. The technology-heavy Nasdaq composite is up 35.5% after eight consecutive weekly gains.
As investors look at their own portfolios, the numbers probably will inspire relief — and suspicion.
Relief, because most or all of the market’s deep 2009 losses as of early March have been recouped. The benchmark Standard & Poor’s 500 index was down 25% for the year at its low. It has pared that decline to less than 3% (although that doesn’t make a dent in last year’s 38.5% loss).
Suspicion, because of the possibility that this could just be a trap — another rally aimed at sucking in average investors so Wall Street sharpies can sell to them, then take the whole thing down again in a hurry.
Joe Saluzzi, a veteran trader at Themis Trading in Chatham, N.J., worries about who’s driving this surge in share prices.
“The problem is that this now is a momentum market,” he says.
“The money coming in is from aggressive traders, not the buy-and-hold investor.”
Momentum traders don’t care which way the market is moving, Saluzzi notes; they’ve been buying over the last eight weeks because the trend has been up, but they’ll be “shorting” stocks as soon as the trend reverses.
And when it does, “I see nothing to tell me that we aren’t going to retest the market lows of March, or even go lower than that,” he said.
If there’s another market meltdown on the horizon, the damage to investor psychology would be massive. Another huge group of buy-and-hold investors probably would exit the stock market forever, unable to stomach the possibility of even heavier losses.
Those who stayed would face a market even more at risk of manipulation, legal or otherwise, by traders.
Of course, these fears are standard during and immediately after any severe bear market. People come to doubt that any rebound in share prices can stick.
“Of course, these fears are standard during and immediately after any severe bear market. People come to doubt that any rebound in share prices can stick.”
I don’t fear a bear market. What does concern me is the ongoing manipulation and propaganda. I don’t want my money in a market rigged for the insiders.
I have never owned a stock and never bought into the 401k trap…Personally, I think the 401k coo that the wall street boys got congress to pass was as big if not bigger than the mortgage finance debacle…
So you gave up matching contributions?
Not every place matches, BiLA. My past two employers did not.
Honestly, I think I’d give up matching simply to have unfettered access to my funds, and good investment choices.
self employed…
Not to mention most of those matching contributions were nothing to get excited about and had cutoff stipulations. Nor were they uniform in structure, competency or ability to self manage.
No… 401s were nothing but scams in the end. How many people do you know who got smacked hard by the stock market? I know plenty.
I did fine. Pulled all my money out of stocks a couple of years ago and put it all in treasuries (TIAA-CREF “guaranteed”). I now have my money split between the straight treasuries and TIPS (just in case), with 10% in high yield bonds (which have been doing great).
Giving up the 7% match my employer offers would be a huge mistake, and we have quite a few options… including options that don’t involve the stock market. I’m just waiting for my university to offer a Roth version of our 503b plan.
Groundhog,
I did pretty much the same thing in Jan 2007. I’ve had no problems or losses.
I don’t trust this market rally at all. I also won’t buy at the next bottom because it will have trashed the normal investors along with the “traders” to the point it will not recover for quite a few years.
TIAA-CREF is good. Low to no fees and no BS.
Roidy
Groundhogday and Roidy,
I did much the same thing, shifted everything into the fund option tied to treasuries around August ‘07. I shifted a little early and did miss out on some potential gains, but also avoided some very big losses. I still made around 4 percent last year when many others had losses of 30 or 40 percent. I do contribute enough to get the full employer match. Even with all of the flaws of the 401k system, I’m not going to give up that source of untaxed income (until it’s withdrawn down the line).
With the handful of fund options I have available and the restrictions on how often I can reallocate those funds, I’m essential forced into a “buy and hold” strategy for the broader market, not a very effective approach at the moment. At some point I may start to reallocate out of treasuries and into the international stock fund option as an inflation hedge. It’s not something I’m close to doing, just a future option I’m pondering at present.
The trouble with TIAA-CREF is that they drastically lowered interest rates on 3/1/2009. That cut my earnings on my retirement money by 33%. So I shopped around, found a better deal, and said a sad goodbye.
Everyone seemed to drop rates dramatically at that time. It was strange, but all of a sudden no money market accounts ANYWHERE were offering more than half a percent. I still haven’t read a reasonable explanation of how/why that happened.
401k’s ended up being a voluntary additional payroll tax for most!
At my last company they matched up to $500 each year so I met this amount. I cashed out when I left and ended up making some money after the tax penalty, but would have lost a considerable percentage had there been no match.
I don’t want my money in a market rigged for the insiders.
There is no such thing as a market now, just a wealth stripping machine controlled by the FED, Hedge Funds, and investment houses like Goldman Sachs.
As far as I’m concerned, it’s been rigged for 80 or 90 years. And you would be getting a 9% or 10% annual gain since then. In the 1930s your ancestors said the same thing: “the market is rigged…” No other way of investing has done as well over the decades. Not real estate, not bonds, not cash, not commodities.
If you got a tried and true way that beats stock mutual funds that a full time software engineeer can use, I’m all ears.
America is in a big government cycle. This cycle will end somewhere between ten and 20 years from now. All these big government policies enacted now will be reversed.
If you think it’s different this time and we no longer will have cycles, I have a bridge I want to sell you.
The only qualm I have about 401ks is that the crooks running Congress and the executive branch are talking about raiding what’s left of our 401ks. A colleague of mine who voted for Kerry in 2004 voted for McCain because he read that people close to Obama want to raid our 401ks. Another colleague of mine told me pop-eyed Pelosi is threatening the same thing.
Joe the Plumber was right. They want to spread your hard-earned wealth around to the irresponsible. That’s enough to turn a lot of people into revolutionaries and win back what belongs to us from the statists. Get the pitch forks out and stab Pelosi in the rear end.
“Joe the Plumber was right.”
:snort:
:snort:
Swine flu?
What did Joe the Plumber say about those I assume he voted for in ‘00 and ‘04?
I’ll go out on a limb and suggest that JtP is a hypocrite.
“Swine flu?”
good one!
In the year 2000 it was not certain yet if Bush was a socialist. The election in 2004 was before the $560 billion Prescription Medical Benefit, the attempt to put U.A.E. in charge of our ports, before the attempt of protecting US Steel, and before the attempt to grant amnesty to illegals, as well as, of course, all the 2008 bailouts.
So perhaps JtP was comfortable voting for GWB in ‘04. I was happy at that time to vote for GWB (the only time I ever voted for any Republican for President) because as a 401k and IRA investor as well as stock investor, I got good tax breaks from the GWB Tax cuts, and I’m by no means rich. But due to the Prescription Medocal Benefit bill that Bush coaxed Congress to legislate, and Bush signed into law, I regretted immensely that vote. And especially with the other events.
I had no problem with our reaction in Afghanistan. And I was all for what we did up to when we captured Saddam.
There.
I think if JtP voted for Bush in ‘04, he too, deeply regrets it.
I’ll go out on a limb and suggest that JtP is a hypocrite.
Yar, sleepless. Plus he was all chin. That thing was bulbous and dimpled and huge. I just could not believe the chin that walked like a man. Implausible.
Where to go though? The new series I savings bond rates are 0% and I stopped buying them again. This is the second 6 month period of 0% savings bond rates, but worse: Fixed rate of only 0.1%
Trying to build up more cash via T-bills is my choice. This is certainly no time for me to crank up my dollar cost averaging above what I do now into equities, although I have been happy enough to buy into my 401k, IRA, and non-retirement mutual funds this year.
BiLA, Morgan Stanley bonds yield about 9-10%, and of the various financial houses, they may be among the least likely to default.
Accredited no more… Good luck selling REO properties under current market conditions. Does anyone know how to figure out how much REO Accredited holds?
Accredited puts in bankruptcy papers
Subprime lender selling off assets
By Lori Weisberg Union-Tribune Staff Writer
2:00 a.m. May 2, 2009
Accredited listed liabilities of up to $500 million and assets of up to $50 million in its filing. (U-T file photo) -
San Diego-based Accredited Home Lenders, one of the last remaining subprime lenders, filed for bankruptcy protection yesterday and is in the process of selling its remaining financial assets.
Acquired in 2007 by Lone Star Funds of Texas, the ailing firm was forced to liquidate its assets under Chapter 1l bankruptcy “as a result of extremely challenging market conditions and the desire to conduct an orderly wind-down and disposition of assets,” according to a news release.
In its bankruptcy petition, Accredited listed its liabilities as between $100 million and $500 million, compared with assets of $10 million to $50 million. Among its more than 10,000 creditors, HSBC Bank is the largest, claiming it is owed more than $90 million, the petition says.
“The erosion of the market for nonprime residential mortgage loans, combined with the tightening credit environment and the burden of substantial legacy claims, made today’s action unavoidable,” said Meade Monger, appointed by Accredited’s board of directors as chief restructuring officer.
“Prior to today’s filing, we have also been proactively working with our state regulators to help make certain there will be no disruption for our borrowers through this process. Moreover, we transitioned servicing of the loan applications in our pipeline to eliminate any impact . . . on the application process for those borrowers.”
As part of the liquidation process, Accredited will try to sell real-estate-owned properties it has acquired through foreclosure, as well as its mortgage-servicing operation.
…
“They were one of the very last subprime lenders that survived the scourge of the subprime meltdown,” said Mark Goldman, a San Diego mortgage broker and lecturer in real estate at San Diego State University. He worked for Accredited in 1992.
“These guys were professional and understood the markets, but got hammered,” Goldman said. “They fought the good fight to the bitter end, and they’re the last ones out the door (and) turning off the lights.”
High up-front mortgage recording tax discourages refinancing in New York State.
http://www.nytimes.com/2009/05/03/realestate/03mort.html?_r=1&ref=realestate
It it also discouraged cash-out refis, we are ahead of the game even if we are missing out on the currency-debasing-based low mortgage rates at present.
Imagine if California property values were reset to the currently appraised value, not the prop 13 value, each time the loan was refied versus each time the property was sold.
For home equity loans, I wouldn’t mind seeing a tax similar to the NY tax.
I wouldn’t mind seeing a tax similar to the NY tax ??
I was SHOCKED when I read that article…Thanks for the post WT…How regressive can you be…Refinance a 400,000 loan with a $450,000. new loan, pay a 2% tax on $450k…That equals a 20% tax on the extra money received…What iof you are just refinancing the existing amount…ou must come to the table with $8k plus fees ??
SDgreg…I politely challenge you or anyone else for that matter to make the argument for this 2% tax…
Ahh but you see only the “rich” will re-finance such large amounts. And a tax on the “rich” is OK since they can afford it or something like that. At least that’s what Sir Obama of Honolulu keeps telling me on his weekly prime time tv show.
Wrong it’s a tax on the middle class and upper middle class
The poor rent
The rich may pay cash and housing is a tiny fraction of their wealth.
Nope once again this is a tax of the middle and upper middle class just like AMT
Exactly.
“Nope once again this is a tax of the middle and upper middle class just like AMT”
According to Sir Obama of Honolulu $250K a year is rich.
“SDgreg…I politely challenge you or anyone else for that matter to make the argument for this 2% tax…”
My support for this type of tax would mostly apply to home equity loans, essentially taxing a form of income and perhaps also a way of providing a slight disincentive to take out such loans.
I’m neutral to slightly opposed to the New York approach of applying this tax even to simple refi’s. When done properly, refi’s reduce the cost of of borrowing, a good thing for the borrower.
However, we’ve also seen lots of examples during the past bubble where lenders pushed people that were in good loans into horrible loans that were very profitable for the lender but sometimes ultimately resulted in foreclosure for the borrower. If a transaction tax would reduce the potential for those types of loans, that would be a good thing. I have no idea whether the New York tax reduced refi’s and especially reduced the type that were hugely profitable to lenders and harmful to borrowers.
Or if people were taxed on their “stated income”.
+1
Debt is slavery!
That is the spot-on slogan of this decade.
It’s the spot-on slogan through ALL time!
This is true for thousands of years and is as true today.
Properly managed, some leverage can be your friend…
Properly managed, a chainsaw is a useful device.
Any more tips for us, Captain Obvious?
Point is debt is not necessarily “slavery”
Captain Cook…
Fine.
I’ll revise it - as long as you use debt to buy “productive” assets with “reasonable” leverage, it’s a good idea.
A house is not a “productive” asset not unless you rent it out for more than the ITIM (interest, taxes, insurance, maintenance.)
“Leverage is slavery” just doesn’t ring for me.
Captain Skye
At least one guy has found a good way to make some money out of this whole mess. He runs a company that paints green the dead lawns of foreclosed houses.
http://www.latimes.com/news/local/la-me-spray-painted-grass2-2009may02,0,5760419.story?track=rss
These are the only “green shoots” I can see in the current economy.
And they’re fake, like everything else.
This post is from a little more than three years ago, back when some people (mostly sellers and brokers) claimed there wasn’t a housing bubble. Now that we are in the worst recession since the Great Depression, it makes an interesting read.
http://gothamist.com/2006/03/29/real_estate_bub.php
“A couple of years from now, after the American real estate market has utterly collapsed, we may well look back at this day as a kind of high-water mark, the spot where the insanity peaked and then rolled back. Curbed broke the story yesterday– a crackhouse in South Williamsburg that has been flipped twice in the last six months, and is now being sold for about a million dollars.”
This Old House recently did a multi-part show on restoring an old Brooklyn row house. God did they pour money into that thing.
Old houses (100 +) are black hole money pits…Wonderful to look at but very, very expensive to own…
They have lots of character, ZERO function. But you are dead spot on SCDave.
The 2009 TIME 100
Scientists & Thinkers
Nouriel Roubini
By Paul Krugman
Nouriel Roubini was right. At a time when the likes of Alan Greenspan were dismissing concerns about excessive home prices and declaring that banks were stronger than ever, Roubini warned that there was a monstrous bubble in the housing market and that the bursting of that bubble would cause much of the financial system to collapse. And so it has turned out, with even the most seemingly outlandish of Roubini’s predictions matched or even exceeded by reality.
…
Does Roubini sometimes get it wrong? Of course. Everybody does. Four years ago, he was predicting an imminent end to China’s willingness to accumulate trillions in sterile reserves, leading to a plunge in the dollar’s value and to financing problems for the U.S. government. He was wrong about that, and no doubt he’ll be wrong again.
But he’s much more than a Chicken Little who finally got lucky when the sky did fall. Don’t be fooled by his sometimes over-the-top writing style: his warnings are based on sophisticated modeling and careful data analysis and have often proved right — not just in general but in detail. He was predicting $2 trillion in bank losses when most people thought those losses would be a few hundred billion at most, largely because he realized early on that subprime was only the beginning. And now even the International Monetary Fund is predicting U.S.-originated losses of $3 trillion or more.
So is Roubini a Cassandra? Yes, he is. Remember, people dismissed Cassandra’s dire prophecies — until they all came true.
Krugman, the winner of the 2008 Nobel Prize for Economics, teaches economics and international affairs at Princeton University
“Remember, people dismissed Cassandra’s dire prophecies — until they all came true.”
Actually Cassandra’s story was worse than that. Cassandra was given the gift of prescience by the God Apollo, she could see the future with perfect clarity. When she spurned his advances he cursed her so that no one would ever believe her warnings. So she could only helplessly watch events unfold, knowing full well the doom that was coming for her, her family and Troy and unable to do anything about it. I feel like that sometimes.
Oh dear. It appears Krugman and Roubini might have had… words.
RE: phillygal…
“back it up hd
Ever heard of Enzo Ferrari?”
hmmm…seems I see the adjective “disaster” mentioned a few times in the bbc report…
So if the big gun Enzo dudes are faltering, what’s gonna happen to the 1 liter motor boyz?
http://news.bbc.co.uk/sport1/hi/motorsport/formula_one/8019559.stm
ps-Fiat left the US market 30 years ago because the couldn’t cut it against the Bloated 3. As I recall from reading various blurbs from former Alfa Romero owners, Fiat electrics were somewhere south of British Leyland and Triumph.
Now they have to compete against US Honda & Toyota…
Carpe diem!
Fiat stands for, “Fix It Again, Tony.”
Or “Feeble Italian Attempt at Transportation”.
That documentary is great. I just finished watching all 5 parts. Looking forward to the final film. I want to purchase it as soon as it’s available to the public.
I linked to the anamericanplace YouTube page from my facebook page and encouraged all my fb friends to watch.
I wish I knew who all the interviewees were. I know Ben, obviously, and A. Hansen, but the others I don’t know who exactly they are.
My favorite caption in the film was, “Ben In Color”. Made me laugh.
Watching price on a condo near me. Bad area, been sitting on the market for 400 days. Suddenly they raise the price. I keep seeing these sudden price raises and a sale after a year. I’m betting this is going to be a down payment fraud to a GSE. Probably a “gifted” 60k down followed by early payment default. Not sure if its a straw buyer or not.
Price Reduced: 09/06/08 — $420,000 to $400,000
Price Reduced: 10/23/08 — $400,000 to $360,000
Price Reduced: 11/06/08 — $360,000 to $350,000
Price Reduced: 11/25/08 — $350,000 to $340,000
Price Increased: 04/28/09 — $340,000 to $399,500
Sent it to FBI.
“Sent it to FBI.”
I’m sure they’ll drop everything and sent out a team out to investigate.
“Sent it to FBI.”
There’s a devastatingly gorgeous, mutli-racial man - with a complicated childhood - half way through law school, who is checking his blackberry now. He’s on it — as soon as he gets back from the Iowa Field Office, where he’s been investigating the theft of hybrid seed technology.
Actually, it’s probably just one of 476,885 in the inbox.
Good for you, james.
We’ve been seeing the same thing here in the San Diego area. Sometimes, some very high-priced listings sit for a while, then suddenly sell over the list price.
Something is definitely going on there, IMHO.
A Brooklyn livery car driver passed himself off as a hedge fund mastermind to swindle investors out of $20 million, Manhattan federal prosecutors say.
Alan Fishman, 49, was arrested Thursday night along with Daniel Ledven, 37, of Cresskill, N.J., on securities and wire fraud charges in a scheme that dates back to 2003.
Prosecutors say the trio raked in millions by conning victims into believing that A.R. Capital Group, which once had offices at 39 Broadway, was plowing their hard-earned cash into international real estate ventures and leveraged trading.
I’m having trouble breathing because I am laughing so hard.
BWAHAHAHAHHAHAHHAHAHAHHAHAHHAHAHAHHHHHHHHHHHHH!!!
I have to laugh as well… until I remember that this is taking place all over the country and represents a HUGE lack of capital available for tangible investments, like an ongoing business or raises for J6P or R&D.
In other words, not back into the community through local market mechanisms.
This morning I was reading a ‘Scientific American’ magazine (btw, we’re all doomed, it looks like) while eating scrambled eggs and I came across an article of a chimp named ‘Santino’ in the Swedish zoo who shows planning skills—he hoards up rocks and stones and debris to chuck at people.
I first saw that article from a link posted HERE, awhile ago. I remember the discussion on it, and in that article how they took away his projectile rocks and stuff but he’d get more and the poor chimp eventually got neutered in hopes of taming his aggression, and in response cobaltblue posted: ‘Poor Santino, now he really has no stones…’ and when I read that I just laughed my bum right off.
It was MUCH more interesting to me from having been posted and discussed here on Ben’s blog.
So then I thought how someone, Mike Fink I think it was, posted a link to a fascinating article about growing gem-quality diamonds, and Big V with her talking duck, and how Fasty with his enticing foodie tips and the gusto he showed for nettles caused me to finally go try some instead of continuing to say, ‘Oh, yeah, one of these days” (they’s super tasty. Now I regret all the wasted, non-nettle gobbling years), and ET and edgy discussing seeing the woods and fields creeping back into Detroit, and then the awesome link to the photo-show of Detroit’s descent into decay, I forget who posted that but it was great and I never would have encountered it elsewise, it’s in my shortcuts now, and how I enjoy seeing the occasional photos of mini-muggy and mini-ET so much, and hope to see mini-blu (well, since she’ll be a girl, maybe that’s not exactly what we want, but you know what I mean, blu).
Then yesterday, hearing that Ben had a doggie named ‘Tobasco’, and the photos of desert sweet-pea that lost-in-utarr took and posted and that blasted a pang of nostalgia through my heart like a big sharp arrow, and zilky’s impressive giant rat-gobbling snake nature video that was so fascinating, and Blue skye pranced around in the pollen and got rained on….
Man! This blog would be awesome enough if it was nothing but only eternal discussions of housing and markets and money and stuff, but it’s SO much more even than that.
It’s like, it’s like…the Uber-blog!*
So I got all misty-eyed and sniffled a bit and shouted praises to Jayzus…
Nah, not really. I didn’t get misty- eyed, nor shout praises to Jayzus. I just felt very happy and washed my dishes. And you know what? As I washed the knife I remembered when I posted a question about the best way of treating wooden knife handles in right here in bits bucket and got good advice from all over. And now look at all my great-looking and properly-oiled knives!
Huh huh huh?
See? ‘Zactly what I’m sayin’!
So, I guess my point is, first—Ben’s Blog is entirely terrific, and thanks so much, Ben. And secondly, since it’s so educational and all, then it’s perfectly fine to spend so much of my time poring over it. Right? Because it’s educational.
)
(Whew! I thought I was just obsessed.
*And since this is the Uber-blog, someone tell easily me how to make an ‘umlaut’ appear in type, so Uber can be spelled right.
btw, we’re all doomed, it looks like
Well, we’re all doomed anyway. The interesting question is what’s the timeframe?
The earth will burn to a crisp when the sun goes red giant. When I first learnt that as a child, the thought depressed me. I fell into a deep funk until the next day I realized that I would be long dead before the earth burnt up. Somehow that cheered me up endlessly - I must be the rare child who was cheered up by the thought of his own mortality!
I must be the rare child who was cheered up by the thought of his own mortality!
Ya wierdo. (Now, I’m teasing yer, you know.
)
Ah, yes. I recall learning about the red giant event, and if the sun were to go nova, which it could at any minute, since who can tell with these whimsical suns, and what if dogs came along and ate me except for the palms of my hands, and after watching ‘The Black Hole’, one of the rare movies I got to watch as a lass, then I was scared of random black holes, giant evil robots, lack of gravity, and our vacuum cleaner. (Because it looked vaguely like Maximillian, the evil robot, and would sometimes shoot sparks and clash gears in a terrifying fashion.)
I was quite imaginative, so there was a veritable smorgasbord of terrors I could and did present myself with. Eventually I decided to amortize my terrors, so to speak. I selected a few and ignored the rest.
For instance, I’m still quite scared of vacuum cleaners…
I was quite imaginative
Was? Still are, I assume, and I generally, assume right.
So was and am I. Good stuff! I can conjure up an entire dramatic scene in my head fast enough. It makes boring subway rides go faster.
I’ve never been on the subway. I’ve only seen subways in movies and on the teevee. I do adore clickety clackety trains, so I might like it very much, or I might very much NOT—is it claustrophobicky? I am not a fan of little dark tunnels.
How I know this is from the one time I tried caving, at the Nutty Puttys (www.nuttyputtycave.com) when I was a teen in Utarr. There was a group of us driving around joggily in the desert in pickups one warm summery night in summer vacation and someone brightly suggested “Hey, let’s go to the NuttyPutty’s”! Well, I was game, that sounded fun!….little did I know.
We drove and drove for freakin’ forever, with Toby Keith and Willie blasting on the radio and we got there— and this is before it was all gated and organized, it was just a hole in the ground. So I started in and man, I went totally apesh*ite in about 5 seconds. I started screaming and clawed my way back out and dashed off into the dark howling and just ran and ran and ran. Eventually I stopped to take a breath, calmed down, looked around me, saw the truck headlights beaming in the dark about a mile or so behind me. I trudged my way back through the sagebrush and was greeted with many amazed stares. I was like: ‘Sorry. I didn’t know that was gonna happen, either.’
So no caves for me.
It’s more boring than claustrophobic although I suppose it would be at least a little bit claustro. I mean I’m pretty claustro and it doesn’t bother me much.
Olympiagal
The NYC subways are truly wonderful, much cleaner and more efficient these days. Quick, cheap-ish and essential to our way of life here. Recommend them when/if you visit.
Remember a day about 20 years ago, go on the train for the ride to work and had a vague “what’s wrong with this picture” feeling for several stops… finally realized i was on a totally graffiti free car! Quite an odd feeling.
Yeah, it ain’t the 70’s no more!
…got on the train for the ride to work and had a vague “what’s wrong with this picture” feeling for several stops… finally realized i was on a totally graffiti free car! Quite an odd feeling.
Did you go totally apesh*ite and run away into the dark wilderness all shouting and carrying on and so forth? ‘Cause that’s the best way to handle these moments, is what I hear.
FPSS, by the time the sun gets big enough to make Earth uninhabitable, we may have figured out how to put an Earthlike atmosphere on Mars … buying us some a little more time. See my piece in Feb 2001 Proceedings of the National Academy of Sciences.
If you type: über
you get: über
If you type: Über
you get: Über
Replace the first “u” or “U” by “o” or whatever, etc.
Thanks!
See? This IS the ‘Über’ blog!
I’d just go with Über-blog and be done with it - no pesky “quotation marks”.
“Okay”.
ROTFLMAO
BWÄberÄberÄberÄberÄberÄberÄberÄberHÄber?
BWÄberÄberÄberÄberÄberÄberÄberÄberHÄber?
Easy, there, cowboy. Uuml;mlauts aren’t for amateurs.
Uuml;mlauts aren’t for amateurs.
Sigh…
As we can now all see. Back to the practice-board for me. Hey, but I did manage to make the laughing face, so that’s good.
You’re a freaking HTML genius! You can even type the instructions and have them appear correctly. Never works for me.
Now, can you explain how to type the instructions of how to type the HTML without bungling it? I’m guessing it’s some proper placement of apostrophes or quotation marks or something.
Now, can you explain how to type the instructions of how to type the HTML without bungling it? I’m guessing it’s some proper placement of apostrophes or quotation marks or something.
Yeah, and hurry it up, Mr. Faster-n-Smarty-pants, because meanwhile I’m sitting here getting grouchy AND looking dumb, all at the exact same time.
Tëst
&:-)uml;
Däng!
It’s okay, PB.
Here, have a potato. (hands him a pötater)
Here, have a potato. (hands him a pötater)
HAHAHAHA! Got it! Süper!
HAHAHAHA! Got it! Süper!
*falls off wooden chair laughing with joy at accömplishment *
Küdos, Ölygal!
Agreed - that’s what keeps me coming back here. Housing is interesting, sure, but I’m not in the market, don’t own any real estate, so it’s not really worth reading and talking about every day.
However, when you get a bunch of intelligent, knowledgeable, diverse, and generally respectful folks together, good things happen.
It’s interesting to think about the world pre-internet. I highly doubt I’d have been exposed to so many different perspectives and ideas, read the books I have that have been recommended here, etc.
read the books I have that have been recommended here ??
I agree…I have ordered many books that have been recommended by posters on this blog…
I tend to send myself emails as “reminders” of books to get. Turns out there’s still a LONG list for me to get to.
The other day I was in a used book store and saw the book Class by Paul Fussell, and recalled that I had made a note of it several years ago I believe from a recommendation on this blog. Haven’t gotten to it yet, though.
It’s interesting to think about the world pre-internet.
Heckfire! No, it ain’t! I do my best to entirely repress memories of those bad old days. I dimly remember playing with burned sticks and hooting and wearing the hairy pelt of a creature I kilt with my stone adze*, and when I wanted to know something I’d have to go to the library and make an interlibrary request. Since it was a one-room library in a tiny town, partially open, and only when the librarian felt like it, (this is before IIIIII became the librarian, when I was 17 or maybe barely 18) and then by the time the book actually arrived I didn’t even care anymore.
*shudder *
*what’s an adze, anyway? It’s different from an axe, I believe. Oh, hey! Lookit me! I shall now type in ‘adze, wiki’ and in 2 seconds will be able to learn more than I EVER wanted to know about adze’s! Wow, technology is GRAND!
More about the wonders of technology: I well recall when my brother, in high-school, was complaining about writing a term paper and how incredibly tedious it was to have to incessantly cut-and-paste all those information bits into one paper.
So I mocked the livin’ blazes out of him, and he said, ‘So, youuuuuu never did any cut-and- pasting?”
And I said, very patiently, “Al—we didn’t even have internet when IIIII was in high-school.”
And he stepped back and he looked at me with purely gobsmacked astonishment and on that, THAT very moment, peeples, was when I had a presentiment of what it’s gonna be like to be an old lady rocking on the porch, sitting there nattering on about ‘the good old days’.
I must say, it wasn’t that great a feeling. I mean, I’m freakin’ 36 years old! I haven’t even bought a cane or a hearing-aid yet, and already I’m a dinosaur!
Sigh….
And, speaking of Jayzus…
http://tinyurl.com/dz4zx2
‘Holy pancakes! Virgin Mary seen on griddle’
…Since the discovery, the griddle has been taken out of service and placed in a shrine in a storage room.
I especially enjoyed the photo that accompanied the article. Masked gaudy luchadors reverently pondering a griddle. Hahahaahah! *happy sigh *
You know what? Being alive is funny almost every single day, isn’t it.
But, see, my BIG question is now solved! What to make for breakfast tomorrow! I’m a gonna make Righteous Pancakes! I wonder if the Virgin Mary will go better with maple or with lumberjack syrup? Butter in either case, of course. Jeeze, like Virgin Mary would tolerate margarine?! As if! Nohow.
Mrs. Butterworth’s syrup. You can just tell see got Jeebus in her soul!
But I have no ‘Mrs. Butterworth’s Syrup’, ecofeco. That’s fancy-like. I only have maple syrup, for if I need real maple syrup sometime, like for a glaze, and I also have a giant bottle of ‘Lumberjack Syrup’ that I got for two bucks at the Grocery Outlet, and which is consumed by real lumberjacks all the time. (There’s an axe on the bottle, is how I know this. The bottle wouldn’t lie to me, would it?
)
But I still want to have some Jeebus in my soul…
What are your sentiments on raw land prices dropping a whole lot more? Do you think deflation will depress land prices a bunch more? One of the spots I am looking at is averaging $7,000/acre. And that is if you buy 30 acre parcels. What kills me is that the land is not development friendly and might have a costs basis of spit for the current owners. Hence, thoughts on land going for fire-sale prices if push comes to shove.
I think you’ve answered your own question (even if you didn’t say “where?”)
There’s no more need for development and they are development unfriendly. Throw in Econ 101 and I’d just say wait.
FPSS, I’d give more than two cents for your two cents on where the markets going. Frankly, I’m stunned at the ability of the market to levitate week after week.
If I had confidence in my own opinion, I’d tell you.
The markets are trading higher and higher on lower and lower volume. This is a short squeeze. If I were to guess, I’d guess they’ll go a lot higher.
I may cover my shorts though. If enough pension fund money (= dumb money) gets convinced, we could go a lot higher.
Still looking for a late ‘09, early ‘10 fallout? So far ‘09 seems to be according to what you and a few others suspected.
$1000/acre MAX.
If this is to be the greatest downturn since the Thirties then it will be greater than the downturn of the Seventies.
I wasn’t around in the Thirties but I was around during the Seventies. The lesson I learned from the Seventies is the market can become incredibly cheap by any measurement one cares to use.
In my view it is reasonable to expect the cheapness of today’s Market to surpass those years.
Agreed, combo.
Thanks FPSS. You guys have been mentioning the short squeeze all week and I haven’t been paying attention.
Dang. Crazy ain’t it? I’m with you. How are they doing it? Based on what? Insider info on the Second Coming?
But this why we’re in trouble in the first place. “Mark-to-fantasy.”
Agree with those predicting market must get cheaper than in the 70’s. Hence my prediction of Dow 3000 (the inflation-adjusted equivalent of the 1974 Dow bottom at 595).
raw land prices dropping a whole lot more?
@ 7k per acre for thirty acres it sounds fairly rural…If I were looking for rural raw land I would be searching the auction sites OR a 2nd or 3rd generation broker in the same area…They likely know where the deals are before anyone else…
properly priced rural Oregon property has started selling in a matter of hours.
Hammers are dropping on the foreclosures, and the foreclosures are actually picking up speed… the banks unload, or they go under. The banks do not want to go under….they dont want the property. The crowd has turned into a feeding frenzy of vultures.
Pretty ugly stuff is occuring mostly to small business owners unloading whatever they accumulated over the last 25 years (cars, guitars, gold, real property). Consumer pocket books are snapped shut..and only the strongest hands can or will step in on the big tickets.
many small hands dont want to see it, talk about, and quite frankly think about it….the foreclosure moratorium has ended….. the big price drops this year are the bottom….you can time it with low rates, but those are going away very quickly.
Bond Bear Market is beginning
THE INFLATION IS COMING
Interesting perspective, Voz. Glad to see you’re still with us, and not out tending to your garden and avoiding the time sink that is the HBB .
We’re seeing much of the same here, and I’m back to wondering where all the money is coming from. It feels awfully 2003-ish.
I have at least a decade horizon. Probably much more. The location is most likely the rural south, in Virginia potentially.
‘@ 7k per acre for thirty acres it sounds fairly rural…If I were looking for rural raw land I would be searching the auction sites OR a 2nd or 3rd generation broker in the same area…They likely know where the deals are before anyone else…’
I bet there will be deals in the years to come. No way they can re-ignite the bubble and greater fool charades. I have my theories and instincts but bottom line is to start doing my homework and keeping track of prices in the years to come.
7k per acre sounds rural?
I suppose it does if rural means 4 way intersections to you.
Rural land is worth what you can earn from it. You cannot pay $7K per acre based on earnings from forest or field by harvesting its crops.
When rural people stop saying land will never go down, then you will see what rural land is worth.
The farmer I rent a little house from bought his land ten years ago for $250 an acre. He now thinks it is worth $3500 per acre. Not as farmland, but as an “investment”.
How could this be hard for readers here to grasp?
“How could this be hard for readers here to grasp?”
I’m not sure Blue but this idea that acres is somehow worth these absurd numbers being tossed about is head-scratching. And it’s not just on this blog. It’s everywhere. It’s definitely symptomatic of the bubble mentality and I hear it mostly from younger folk. It’s one of the more disturbing elements of the mania.
When rural people stop saying land will never go down, then you will see what rural land is worth.
And I cannot wait for that day. I’m sick of arguing with farmers that are planning to be developers some day.
‘This is my retirement’, yada yada….
….I hear that ONE MORE TIME, and I’m gonna smite some Wal-Mart overalls clean off somebody!
Yes, really!
Don’t look now, but now ya see it, now ya don’t!
(From DOE/Lawrence Berkeley National Laboratory)
“Blurring the lines between magic and science: Berkeley researchers create an ‘invisibility cloak’:
The great science fiction writer Arthur C. Clarke famously noted the similarities between advanced technology and magic. This summer on the big screen, the young wizard Harry Potter will once again don his magic invisibility cloak and disappear. Meanwhile, researchers with Berkeley Lab and the University of California (UC) Berkeley will be studying an invisibility cloak of their own that also hides objects from view.
A team led by Xiang Zhang, a principal investigator with Berkeley Lab’s Materials Sciences Division and director of UC Berkeley’s Nano-scale Science and Engineering Center, has created a “carpet cloak” from nanostructured silicon that conceals the presence of objects placed under it from optical detection. While the carpet itself can still be seen, the bulge of the object underneath it disappears from view. Shining a beam of light on the bulge shows a reflection identical to that of a beam reflected from a flat surface, meaning the object itself has essentially been rendered invisible.
“We have come up with a new solution to the problem of invisibility based on the use of dielectric (nonconducting) materials,” says Zhang. “Our optical cloak not only suggests that true invisibility materials are within reach, it also represents a major step towards transformation optics, opening the door to manipulating light at will for the creation of powerful new microscopes and faster computers.”
Zhang and his team have published a paper on this research in the journal Nature Materials entitled: An Optical Cloak Made of Dielectrics. Co-authoring the paper with Zhang were Jason Valentine, Jensen Li, Thomas Zentgraf and Guy Bartal, all members of Zhang’s research group.
Previous work by Zhang and his group with invisibility devices involved complex metamaterials – composites of metals and dielectrics whose extraordinary optical properties arise from their unique structure rather than their composition. They constructed one material out of an elaborate fishnet of alternating layers of silver and magnesium fluoride, and another out of silver nanowires grown inside porous aluminum oxide. With these metallic metamaterials, Zhang and his group demonstrated that light can be bent backwards, a property unprecedented in nature.
While metallic metamaterials have been successfully used to achieve invisibility cloaking at microwave frequencies, until now cloaking at optical frequencies, a key step towards achieving actual invisibility, has not been successful because the metal elements absorb too much light.
Says Zhang, “Even with the advances that have been made in optical metamaterials, scaling sub-wavelength metallic elements and placing them in an arbitrarily designed spatial manner remains a challenge at optical frequencies.”
The new cloak created by Zhang and his team is made exclusively from dielectric materials, which are often transparent at optical frequencies. The cloak was demonstrated in a rectangular slab of silicon (250 nanometers thick) that serves as an optical waveguide in which light is confined in the vertical dimension but free to propagate in the other two dimensions. A carefully designed pattern of holes - each 110 nanometers in diameter - perforates the silicon, transforming the slab into a metamaterial that forces light to bend like water flowing around a rock. In the experiments reported in Nature Materials, the cloak was used to cover an area that measured about 3.8 microns by 400 nanometers. It demonstrated invisibility at variable angles of light incident.”
Wonder if anyone has any first mortgages, home equity loans, UHS, or condotels they’d like to make “disappear”???
Transparency?
No “poof?”
Thanks for sharing that info! I’m fascinated by reading about how to bend light. Awhile back, I read about our taxpayer money used to confirm one of Einstein’s theories by observing that the sun bends light too. I forgot the details of it. Someday in the far future this science could lead to mega telescopes that would be used to see details in other stellar systems (volcanos, oceans, or whatever) on planets a couple dozen light years away.
I always keep saying I want to live forever so I can enjoy discoveries of the future!
Bill In Los Angeles-
Have you been to JPL’s (NASA’s)Open House? It’s held in May each year in La Canada. It’s free, and of course the food vendors are overpriced. We just got back. If you haven’t been, it’s great!
It’s just like ‘Halo III’!*
Boy, I hope the Master Chief makes it…
*Actually, I suck at Halo III. I always get mad and throw the controller at the screen and shout, ‘Didn’t you SEE the alien, ya moron?!’
That’s a game-ender, right there…
This is going to end very badly.
UAW wins big Chrysler stake but can’t run company May 2, 2009 5:17 PM ET
All Associated Press news DETROIT (AP) - The United Auto Workers union would appear to be the big winner in the Chrysler bankruptcy saga, having exercised its considerable political muscle to win a 55 percent stake in the country’s third-largest automaker.
But when you consider the 55 percent is in a company that lost $16.8 billion last year and has seen its sales drop by half, the victory seems less impressive. Especially since the union’s stock must necessarily be converted at some point to cash to pay billions of dollars in retiree health care bills over the next 25 years.
Plus, the union’s control in the boardroom will be limited. Despite the large stake, it gets only one seat on a nine-member board that will govern a new Chrysler-Fiat joint venture.
Yes, the union could still come out the winner at Chrysler and at General Motors Corp., which has offered the UAW a 39 percent stake as part of its own reorganization plan. But that depends on the iffy prospect of the companies making money again and their stock values sharply rising.
“I think it’s a whole lot weaker than it appears,” said Gerald Meyers, a University of Michigan business professor and former CEO of American Motors Corp. “I would say the UAW wouldn’t want to get into the speculative game of the stock market. That’s not reassuring to retirees.”
Unions have in the past traded an ownership stake in a struggling company for wage cuts or other money-saving steps. For the most part the deals, such as an employee stock ownership plan at UAL Corp., parent of United Airlines, have worked well at first, only to fall apart when economic times grew tough, with labor and management fighting as profits declined.
The UAW started making concessions during 2007 contract negotiations and that helped in negotiating the stakes they stand to gain now. At the time, both GM and Chrysler had huge labor cost disadvantages compared with Japanese automakers, mainly because they have far more retirees and had agreed to pay their health care bills.
For GM, the health care tab is projected to total $46.7 billion over the lives of about 350,000 retirees and spouses. At Chrysler, it’s $10.9 billion for around 82,000 retirees.
So to unload the costs, the companies persuaded a reluctant UAW to take billions in cash to set up trust funds called voluntary employees beneficiary associations, or VEBAs, to pay the bills starting next year.
But the U.S. auto market went bad and both automakers ran out of cash. Enter government financing and the Obama administration, which engineered the Chrysler-UAW deal. Chrysler has now formed an alliance with Fiat, and the government will finance what it hopes will be a quick Chrysler bankruptcy. Chrysler plans to close five more factories and shed thousands more workers as it slims down and resets to build Fiat-designed fuel-efficient cars in North America.
The UAW spent nearly $5 million in independent expenditures to promote Obama’s campaign, according to the nonpartisan Center for Responsive Politics, and some Chrysler debtholders contend that the union was unfairly rewarded for that support. Secured creditors were offered roughly 30 cents on the dollar for $6.9 billion in debt. A few balked and the deal fell apart late Wednesday, triggering Thursday’s bankruptcy filing.
The UAW’s reward, though, could turn out to be punishment if the stock price doesn’t rise.
No! Really? The UAW is being rewarded by Sir Obama of Honolulu at the expense of private capital? I’m shocked I tell you, just shocked since I was told over and over that Sir Obama was a centrist and we had nothing to worry about with him in office.
I’m incensed too, considering what a standout excellent job private capital did with these companies in the first place! How dare he give someone else with a different plan a chance!
Maybe, just maybe the UAW had something to do with the Big 3`s problems.
“For GM, the health care tab is projected to total $46.7 billion over the lives of about 350,000 retirees and spouses. At Chrysler, it’s $10.9 billion for around 82,000 retirees”
“The UAW spent nearly $5 million in independent expenditures to promote Obama’s campaign, according to the nonpartisan Center for Responsive Politics”
Learn to like the UAW and national health insurance. Neither are going away.
The UAW may not go away. But when they have finally destroyed what is left of the US auto industry, what do you propose they do all day? Rhetorical question actually. They do nothing all day and get paid $73 an hour now. They’ll do nothing all day and get paid $73 and hour then. Only difference is the money today comes from Chrysler ownership. In the future it will come from the US Treasury.
Unions are a cancer on economies.
You may be right about national health insurance, but the UAW will fail. It`s only a matter of time.
Correction: Ingorance is a cancer on economies.
Well someone needs to tell these unions that the golden goose is very sick.
Boston Globe’s big deadline nears, union hopeful May 3, 2009 12:05 PM ET
All Thomson Reuters news NEW YORK (Reuters) - The Boston Globe may learn its fate Sunday as management and a key union try to hash out concessions that parent company New York Times Co says are crucial to keeping newspaper alive.
The Times Co had set Friday as the deadline for the union to make its concessions, but extended it through Sunday night after both sides said they made progress toward an agreement.
The Boston Newspaper Guild said it has offered deep cuts in member pay and benefits to help the Times find $20 million in cost cuts at the Globe.
The Times said the paper would lose $85 million this year and the cuts were essential to keeping the Globe open.
Oh I see. So now it is the government’s role to decide who should run private companies? I know. Maybe Sir Obama of Honolulu can take the last place team in the NFL and give it to the players to run the next year. After all the owners screwed up so someone else should get a chance to run things.
Well, the last place team in the NFL did come from Detroit.
Came across this seach property sales in the big apple:
http://nyc.everyblock.com/
Drove the Mrs. into Medford to do some shopping at the Mall and other stores. I usually bring a book (which I did) however, this time I accompanied her
into the Mall.
Stone empty. Very, very few people and several
shops shuttered.
While she shopped, I looked at a very nice two caret diamond ring, D & F1 for only 18k marked
down form $26k.
Oly girl, you are a spring chicken, please enjoy
your youth and vitality while you can chasing forest
nymphs and laughing frogs. Lord, I wish I was still
39 but that would take me back almost 30 years,
and I’m not going there.
…So, what book did you read, while the Mrs. was shopping?
That’s more to the point, Mr. ‘I-R-Nostalgic’.
I looked at a very nice two caret diamond ring, D & F1 for only 18k marked down form $26k.
Oh, yeah? What for? Why’d you need them? Why didn’t you get pearls, instead? I only ask, because I want to know.
It’s this cursed insatiable curiosity thingie I got. You don’t have to answer, s’okay.
Rancher,
You and the Missus can enjoy chasing forest nymphs and laughing frogs too. Autumn ones, of course.
Man, can anyone beat this for the “nice try, idiot” award?
A few days ago, I noticed that a house around the corner had a pile of trash out by the street, beside a city utility trash bin. I’m satisfied that this neighborhood is for the most part “live and let live” with respect to lawn care, extra vehicles around, etc. But this looked nasty - an old piece of carpet wrapped loosely around some junk. I say (without irony) that it looked like it would attract and shelter rats. It wasn’t furniture or kids’ toys or landscaping materials like old bricks or fence posts, which do get salvaged by neighbors and passersby.
Of course, the city didn’t pick it up on trash pickup day. They only pick up the city bins. And even on bulk trash pickup days, there are rules about contents and bundling.
When I passed by a little while ago, the mess was still there with the addition of a sign spray-painted on a piece of plywood : “FREE TRASH!”
I thought, for the first time, “so that’s what HOAs are good for!”
Now that I am taking a serious look at properties in AZ and CO I can tell you there is something wrong with Case-Shiller’s data. At least it appears that way. I saved “For Sale” magazines from 2005 and 2006 for the Denver area, and I do not see any drops like what CS is saying are going on. In fact, I see the same thing in AZ, to a degree as well. In fact, if you remove the short sale listings from the mix (that haven’t been lender approved) there is almost no difference in price, and in some cases prices are even higher than they were 2-3 years ago.
Maybe 10-15% off in the Denver areas I am looking at, and that is a big maybe. But I am just as likely to find a house 20% above 2005 prices as I am to find one below it. And almost all of the houses that are not foreclosure are above 2005 prices, regardless of what CS says.
I think what is holding up prices are the FHA loan limits. You only need 3.5% down, which isn’t THAT much money. The loan officers I have spoken to say it is far easier to get these loans approved, since the taxpayer gets screwed if you don’t pay it back. The FHA limits are over $700k in Southern California, around $350k in Phoenix, and $400k in the Denver area. That is holding things up IMO. Also, 50% debt to income is still common.
I really don’t see where these big price drops that I see in CS are coming from. Yes, the median has dropped in these areas, but that is more a function of the mix of homes selling (lower end) than anything else. But CS is supposed to compare like properties, and all the like properties I see are over 2005. CS says they should be back at 2001. No way. I don’t see that at all. Not in any of the areas I am looking at ($300-$400k range), or most people would care to live in. Everything is still way overpriced.
I am not even going to waste my time downloading CS anymore. Worthless.
“Now that I am taking a serious look at properties in AZ and CO I can tell you there is something wrong with Case-Shiller’s data. At least it appears that way. I saved “For Sale” magazines from 2005 and 2006 for the Denver area, and I do not see any drops like what CS is saying are going on.
…
I am not even going to waste my time downloading CS anymore. Worthless.”
The problem could well be in your lack of understanding of CS ‘data’ rather than in the numbers. To put it simply, it is perfectly conceivable that the CS-S&P Index could stay the same or increase while market values are falling, provided the average quality of the homes selling is increasing at the same time. I suggest you educate yourself about what this index is supposed to measure and how it does so before you go on a rant about flaws in their calculations.
Thanks for the slam PB. Unfortunately, your conclusions are wrong. Let’s start with…what is the intent of the CS index?
“The S&P/Case-Shiller Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States.”
The key flaw is CS is not accurately tracking changes in the value of residential real estate in many of these markets. I believe they are only considering a very small slice of these markets and it makes the data worthless.
“These indices use the repeat sales pricing technique to measure housing markets.”
I think this is part of the problem with CS. If you only have lower end homes in poor neighborhoods selling, yet the overall area has too few sales to register, it makes the numbers look a lot worse than they are. In the Denver area, for example, CS says prices are back to 2001 levels. My research of 10 cities says this is way off the mark. It is much closer to 2005.
I suspect it has to do with their use of repeat sales. Either there are too few to matter, or the areas I am looking at don’t go back far enough to have them. But this still supports my conclusion that the index is worthless, when you are evaluating a region using their numbers. It flunks its stated purpose.
It does not track changes accurately in the regions I am researching. Not even close. So do not think that because CS says prices are back to 2001 levels that you are going to find houses in that region that are anywhere near 2001 levels, using public sales data.
So…if this is true, and I believe it is, what exactly is the purpose of CS? What useful information does it provide?
Now…if you actually have some facts that you would like to share supporting your argument (and not just meaningless slams) I am all ears.
Jack Kemp dies at age 73
Former Bills QB Jack Kemp, a U.S. congressman and one-time vice-presidential nominee, died Saturday, his spokeswoman and a longtime friend said.
Kemp helped get the Ownership Society Humvee rolling while HUD secretary under George H W Bush.
Tü﹑rbo Tax Timmay Test
Tü﹑rbo Tax Timmmay Test
Türbo Tax Timmay Test