The Housing Bubble

Deep in Debt, Six Flags Is Bankrupt…
By MICHAEL J. de la MERCED
Published: June 13, 2009

Six Flags, the theme park operator, filed for bankruptcy early Saturday in Delaware after failing to reach an agreement with lenders to reorganize its debt.

Six Flags is the latest company to prove unable to cope with its debt load at a time when previous solutions like refinancing are largely unavailable. The theme park operator, which had $2.4 billion in debt, faced nearly $300 million in payments to preferred stockholders due in August.

In a statement, Six Flags said it was seeking court approval for a restructuring plan it had already negotiated, which has the unanimous approval of its lenders. That proposal would eliminate $1.8 billion in debt and slice off the $300 million in preferred stock payments.

“The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets,” Mark Shapiro, the chief executive of Six Flags, said in a statement.

More jobs getting axed, heading south of the boarder and abroad. Our current unemployment rate in S.C. is said to be 11.5%

Saturday, Jun. 13, 2009
400 workers to lose jobs at SC headlight maker
The Associated Press

YORK, S.C. — A company that makes headlights for vehicles is closing its York County plant next year, leaving about 400 workers without jobs.

Hella Lighting Corp. officials told The Herald of Rock Hill that it will shift all its U.S. manufacturing to Mexico and Eastern Europe, closing the South Carolina plant next May.

The company blames the downturn in the economy and auto sales. Last year, the plant had 682 employees, while now Hella has 387 workers.

Hella nearly doubled the size of its York plant three years ago with a $13 million expansion.

Fire up the bulldozers…
AP June, 12

US cities may have to be bulldozed in order to survive
Dozens of US cities may have entire neighbourhoods bulldozed as part of drastic “shrink to survive” proposals being considered by the Obama administration to tackle economic decline.

The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature.

Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area.

The radical experiment is the brainchild of Dan Kildee, treasurer of Genesee County, which includes Flint.

Having outlined his strategy to Barack Obama during the election campaign, Mr Kildee has now been approached by the US government and a group of charities who want him to apply what he has learnt to the rest of the country.

Mr Kildee said he will concentrate on 50 cities, identified in a recent study by the Brookings Institution, an influential Washington think-tank, as potentially needing to shrink substantially to cope with their declining fortunes.

Most are former industrial cities in the “rust belt” of America’s Mid-West and North East. They include Detroit, Philadelphia, Pittsburgh, Baltimore and Memphis.

In Detroit, shattered by the woes of the US car industry, there are already plans to split it into a collection of small urban centres separated from each other by countryside.

“The real question is not whether these cities shrink – we’re all shrinking – but whether we let it happen in a destructive or sustainable way,” said Mr Kildee. “Decline is a fact of life in Flint. Resisting it is like resisting gravity.”

Karina Pallagst, director of the Shrinking Cities in a Global Perspective programme at the University of California, Berkeley, said there was “both a cultural and political taboo” about admitting decline in America.

“Places like Flint have hit rock bottom. They’re at the point where it’s better to start knocking a lot of buildings down,” she said.

Flint, sixty miles north of Detroit, was the original home of General Motors. The car giant once employed 79,000 local people but that figure has shrunk to around 8,000.

Unemployment is now approaching 20 per cent and the total population has almost halved to 110,000.

Reposting this from yesterday’s thread. A long, bitter and funny rant about Mozilo and the Elmer Fudd Nation (us). Now, I’d dearly love to see Mozilo and his ilk get theirs. But how? What are the solutions to this travesty of justice? I’m not sacrificing my life to bring justice to the dried out old prune. But does anyone have ANY ideas of what can be done non-violently, even though some of these criminals deserve otherwise?

http://www.counterpunch.org/ames06122009.html

Mortgages
Beware of Neighbor’s Home Foreclosure.
NYT June, 12

WHEN it comes to selling your house or planning your next home equity line of credit, being a nosey neighbor could very well pay off.

That’s one implication of a recent report from the Center for Responsible Lending, a consumer advocacy group based in Durham, N.C.

The report, which was released in May, focuses on the ripple effects of home foreclosures, and suggests that homeowners who are concerned about their home’s value should watch for signs of trouble among their closest neighbors.

This year alone, it says, foreclosures will cause an estimated 69.5 million nearby homes to suffer price declines averaging $7,200 per home. The loss in property value could total $500 billion.

The resulting loss in financial flexibility is significant. “Homeowners who had counted on using their home equity to finance their retirement, cover tuition costs, start a small business, or pay medical bills in many cases no longer have this option,” the report said.

Ellen Schloemer, the executive vice president of the Center for Responsible Lending, said that over the next four years, foreclosures would affect an estimated 91.5 million neighboring homes.

“As the foreclosure crisis continues to worsen, the contagion is spreading,” Ms. Schloemer said. “You can’t just say those foreclosures are hurting someone else.”

The rate of home foreclosures has rise sharply since 2007, when the first subprime adjustable-rate mortgages began resetting to higher rates. But even borrowers with good credit have defaulted on their loans as the economy has faltered.

According to the Mortgage Bankers Association, an industry trade group, about 1.4 percent of all first mortgages entered foreclosure in the first quarter of this year, a 20 percent jump from the fourth quarter of 2008, and a record high.

The center’s report relied on forecasts from Credit Suisse, which said late last year that about nine million homes would probably go into foreclosure in 2009 to 2012. The center also used late 2008 data from the Mortgage Bankers Association to estimate this year’s foreclosure figures (about 2.4 million homes).

Wall Street Journal

* JUNE 13, 2009

Stocks in the Black on Gusher of Cash

By E.S. BROWNING

With a 34% rebound in three months, the Dow Jones Industrial Average has pushed into positive territory for 2009, and one of the main reasons is disarmingly simple: Financial markets once again are awash in government cash.

The Dow rose 28.34 points to 8799.26 on Friday, as money managers continued shifting funds into stocks. Still, the Dow remains down 38% from its 2007 record of 14164.53, and it had seemed to plateau in recent weeks on worries about the strength of the global recovery.

But governments around the world are pumping money into the economy at a frenetic pace. Because businesses can’t put trillions of new dollars to work in such a short time, the money is finding its way into financial markets. Some investors have begun speaking of a “bailout bubble” being created in certain markets, and about a “melt-up” in demand fueled by the growing supply of money.

Ya think? I guess it is better to have a liquidity flood into the stock market than into wheel barrows, anyway…

Home sales rise as prices keep falling
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • June 12, 2009

Metro Detroit home sales rose by 12.6% in May as compared with last year, yet home prices continued their fall — an indication that the market hasn’t hit bottom yet.
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Overall, 5,955 homes were sold in May, compared with 5,288 sold in May 2008, according to Realcomp, a Farmington Hills-based multiple listing service.

The median sales price for homes sold in May was $50,000, a 44.3% drop from $89,700 in May 2008.

Foreclosures continue to drag down prices. In May, foreclosure sales accounted for 60% of all homes sold. And the median price of foreclosed sales in the metro area was $26,400 compared with a median sales price of $110,000 on non-foreclosed homes.

In the city of Detroit, the median sales price in May was $6,000, down 29.4% from May 2008.

Realcomp, which compiles data from closed sales reported by its Realtor members, said the inventory of homes offered for sale fell 24.9% in May to 50,181 compared with 66,811 a year ago.

Here come some excerpts from Arthur B. Laffers article,in the WJS.
From seekingalpha

Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That’s more than twice the size of the next largest deficit since World War II…

With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.

About eight months ago, starting in early September 2008, the Bernanke Fed did an abrupt about-face and radically increased the monetary base — which is comprised of currency in circulation, member bank reserves held at the Fed, and vault cash — by a little less than $1 trillion. The Fed controls the monetary base 100% and does so by purchasing and selling assets in the open market. By such a radical move, the Fed signaled a 180-degree shift in its focus from an anti-inflation position to an anti-deflation position.

The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 (see chart). It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless. The currency-in-circulation component of the monetary base — which prior to the expansion had comprised 95% of the monetary base — has risen by a little less than 10%, while bank reserves have increased almost 20-fold. Now the currency-in-circulation component of the monetary base is a smidgen less than 50% of the monetary base. Yikes!…

It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture.

Why doesn’t the Congress just pass a bill to give everyone who wants a house the seller’s full asking price and be done with this? This socialistic futzing around at the margins will not do much to prop up housing prices.

Nation’s Housing / Kenneth Harney
Congress may broaden eligibility for tax credits
2:00 a.m. June 14, 2009

WASHINGTON – Since first-time buyers are getting thousands of dollars in tax credits from the federal government to stimulate the economy, why shouldn’t all home buyers get equal treatment? And what about refinancers – couldn’t they make good use of a tax credit to help defray closing costs and loan fees?

Whatever your thoughts on these questions, there is an effort getting under way in Congress to extend tax credits to anyone who buys a new or existing home in the coming year, with no income limitations. In one case, legislation would even create a new “temporary” $3,000 tax credit to help defray the costs of refinancing mortgages on principal residences.

Two Dallas-area congressmen – one a Democrat, the other a Republican – have introduced bills that not only would broaden the reach of the current housing tax credits to almost everybody, but would keep the program going until either mid-2010 or the end of that year. The current credit expires Nov. 30.

Rep. Kenny Marchant, a Republican who represents the suburbs between Fort Worth and Dallas, is pushing a bill that would expand the current $8,000 federal credit to buyers of all houses – not just first-timers – through June 2010. The bill (H.R. 2619) would also create an unprecedented $3,000 credit to help offset “qualified refinancing costs” – closing fees, lender charges and the like – through next June.

In a statement, Marchant said his goals are to “jump-start new sales,” “reduce the housing inventory” and “stabilize housing prices.”

As to the refinancing credit, he said the idea is to encourage owners “to take advantage of current low mortgage rates” – cutting their monthly payments to stay out of financial trouble. The $3,000 refi credit could be used to pay for loan “points,” other transaction fees, or to “put equity in their home if they’re a little underwater.”
…

Vehicle fraud cases heat up

By MARC LIFSHER

Los Angeles Times

Sunday, June 14, 2009

Motorists unable to afford payments on pricey cars and gas-guzzling sport utility vehicles in this recession are turning to a time-tested financing solution: matches.

Insurance cheats are torching their vehicles in remote deserts. They’re pushing them off cliffs. They’re sinking them in lakes or ditching them in Mexico in the hopes of getting their policies to pay off, fraud investigators say.

Nationwide, suspicious vehicle fires or arson increased 27 percent in the first quarter of 2009 compared with a year earlier, according to the National Insurance Crime Bureau, an industry-supported agency that investigates all types of insurance fraud. So-called owner give-ups - cars intentionally destroyed or abandoned - jumped 24 percent.

Barbecuing a Beamer is one of the more dramatic types of suspected insurance fraud that’s increasing in this economic downturn, the deepest in more than half a century. But it’s not the only one. Suspicious personal injury slip-and-fall claims increased 60 percent in the first quarter; staged car accident cases were up 34 percent and commercial property fire/arson cases jumped 76 percent.

Some consumers figure that they’ve paid premiums year after year, experts said, and that their insurers might not closely check every single claim. In fact, investigators say they tend to be particularly busy during tough economic times when an increasing number of policyholders are caught in financial crunches.

“When the economy goes south, crime goes up,” said Frank Scafidi, a crime bureau spokesman in Sacramento, Calif.

Investigators say the number of suspected give-ups, which are often hard to prove, is minuscule compared with the more than 1 million vehicles reported stolen each year. They acknowledge that suspected fraud may be underreported because insurers can’t meticulously investigate every vehicle fire or disappearance. Nevertheless, they said, the trend is clearly accelerating with 757 suspected vehicle fires nationwide in the first quarter of 2009, up from 596 in the same period last year.

Crime bureau investigators found a direct correlation between owners missing multiple car payments and the filing of false insurance claims. Rising gasoline prices also appear to be linked to suspected fraud cases involving fuel-sucking SUVs. A soft used-car market also has consumers looking to their insurers for relief - albeit illegally.

“People think it’s an easier out if they can no longer afford a car, but, unfortunately, it’s a crime,” Scafidi said.

“If they owe $10,000 and can only sell the vehicle for $7,000, they’ll still owe $3,000 and have to buy another (cheaper) vehicle,” he said. “So, people find themselves in tight spots and are making foolish decisions.”

On May 2, police arrested Matthew A. Riddle Sr., 36, and his mother, Lydia Riddle, 56, of Stockton, Calif., as well as a Sacramento man, John D. Vier, 32, on suspicion of insurance fraud, felony arson, conspiracy and false reporting of a crime.

The suspects face possible prison terms and thousands of dollars in fines for allegedly conspiring to have Vier burn Matthew Riddle’s 1998 Ford Expedition in hopes of collecting a $10,000 insurance claim.

The arrests came after a witness tipped off the Sacramento County Urban Insurance Fraud Task Force, one of dozens of interagency law enforcement groups around the state that are financed by a surcharge on auto insurance premiums.

Owners desperate enough to burn or ditch their own cars are asking for trouble, warned John Standish, the automobile insurance fraud bureau chief for the California Department of Insurance.

If caught, “they’re still saddled with settling the debt even though the car is not drivable,” he said, plus they could wind up with a felony conviction for insurance fraud and a sentence of as many as five years in prison.

Any scheme to commit auto insurance fraud usually involves conspiracy, said Mike McKee, a crime bureau special agent who covers all of Southern California. “Family and friends are involved,” he said. “It’s not a spur-of-the-moment thing because there’s a lot of criminal intent and forethought.”

Owner give-ups fall into two categories, McKee said. The most common is the amateur job, which usually involves the owner and a couple of relatives or friends. Professional rings charge a car owner as much as $500. The car or truck is either driven to Mexico for resale on the black market or taken to a “chop shop” to be stripped of its most valuable parts. Owners are instructed to wait three days before filing a stolen-car report.

One thing the professionals never do is set the cars on fire, McKee said. They want the money from the resale, and they want to keep as low a profile as possible.

“It doesn’t make sense for crooks to risk a felony charge by stealing a car, taking it to the desert to torch it and walking home,” he said.

Most amateur owner give-ups “make no sense in the real world,” McKee said, citing the recent case of Don and Orlando. (Investigators asked that full names not be used while the case remains open.)

Don was $1,400 behind on payments and had just lost his job. He allegedly paid Orlando $300 to drive the car out to the desert and burn it.

Before taking the keys, Orlando threw his daughter’s bicycle into the back of the vehicle for the long ride home, McKee said, reading from the case file.

Such cases usually lead to confessions and convictions, especially when somebody comes back smelling like gas, with singed eyebrows, McKee said.

State media? “people are clamoring for caps on executive pay and recoiling at the idea of bosses cavorting at expensive spas.”

A race to keep up with the tightwads

By YLAN Q. MUI

The Washington Post

Sunday, June 14, 2009

WASHINGTON — In these recessionary times, people like Seigrid Walker are no longer concerned about keeping up with the Joneses. Now the goal is to fall far behind them.

The 33-year-old lawyer from Mitchellville, Md., once regaled her friends with tales of shopping sprees at Nordstrom and Caribbean vacations with her husband. Now she tells her girlfriends about staying home for pizza night with the kids.

Putting away their wallets

WASHINGTON - In the midst of the longest recession since World War II, the American public has gone from a near even split between savers and spenders to a jump in the number of savers. The results from two Gallup polls on Americans’ spending habits reflects this change. (Note: These figures reflect results among adults).

If people know that she can no longer afford to get her hair done every few weeks, who cares?

“If they notice, it’s like, ‘Phew, I’m not the only one,’ ” Walker said. “There’s a certain camaraderie with everyone understanding that everything is tight.”

The recession has changed the conversation in America. As the era of conspicuous consumption fades along with our 401(k)s, people are clamoring for caps on executive pay and recoiling at the idea of bosses cavorting at expensive spas. At play dates and happy hours, friends are swapping recipes instead of making restaurant reservations. Coupons has become a more popular search term than Britney Spears on Google.

Instead of feeling self-conscious about spending less, people are flaunting their frugality. Both those who have lost income, such as Walker, and those who simply fear they may become at risk are part of the new discourse.

“Something very deep has changed in the American psyche,” said Dan Ariely, a professor of behavioral economics at Duke. “The recession basically woke us up.”

That change was in painful evidence yesterday when luxury retailer Saks reported May sales were down nearly 27 percent from a year ago and Nordstrom said its fell 13 percent. Abercrombie and Fitch, which has been reluctant to lower prices, was down 28 percent. Overall, sales fell 4.6 percent at U.S. chain stores, according to the International Council of Shopping Centers.

According to a recent telephone survey of 1,000 people that Ariely conducted for Bank of America, about 80 percent of those surveyed said they are more conscious of spending now than at the beginning of the year. A Gallup poll in April showed 59 percent of Americans enjoy saving money, compared with 48 percent in April 2001. The percentage of people who said they enjoyed spending money dropped to 37 percent in April from 45 percent in 1991.

Such large numbers have helped normalize a new, more thrifty pattern of consumer behavior, Ariely said. In other words, being cheap has become socially acceptable.

Sarah Morgan said she didn’t mind showing up at the Loudoun Valley (Va.) High School senior prom in her mom’s minivan. The 18-year-old and her friends considered a limo but quickly dismissed the idea once they realized it would cost $45 to $60 a person.

“Some people were like, ‘Oh wow, you came in a van, that’s cool,’ ” Morgan said. “Everyone is cutting back, and it’s an easier way to get to someplace.”

The same mind-set has helped turn consignment sales into a main topic of conversation during Gina Lincicum’s moms club meetings.

Loathe to attend events with paid tickets, they alert one another to free family outings. E-mail chains now share cheap crockpot recipes for summer. So many people have asked Lincicum for her homemade pizza recipe - as much as $20 cheaper than delivery - that she posted it on her blog, Moneywise Mom.

“You can go to a social and everybody’s talking about how to save money, and that wasn’t the case a few years ago,” said Lincicum, 36, of Burke, Va.

Consumer confidence has rebounded after bottoming out in February, according to data from The Conference Board. The index is now at its highest level since the financial meltdown in the fall, though 45 percent of people reported business conditions are bad compared with 30 percent a year ago.

But IHS Global Insight economist Brian Bethune said spending has not followed the same patterns. Retail sales fell unexpectedly in April despite a significant gain in consumer confidence that month. Low home prices and restricted access to credit have also curtailed the ability - and desire - to spend. The personal savings rate was above 4 percent during the first quarter, the highest it has been all decade.

People now idolize women like Stephanie Nelson, one of the new rock stars of the recession. Nicknamed The Coupon Mom, she retains a publicist and has appeared on “The Early Show,” “The Today Show” and “Oprah” since the downturn began. Traffic to her Web site tripled in 2008 and is up 67 percent this year. At another popular Web site, The Coupon Clippers, members brag about their latest gets on a Facebook fan page and bulletin board.

Coupon Clippers founder Rachael Woodard marvels at the change that has come over Americans as the era of spend-it-all has receded into the age of save-what-you can. Many of her new members are not financially imperiled. Some even report six-figure salaries, she said.

“You had to get around a certain crowd to talk about how much you saved or didn’t spend because you would be called cheap,” Woodard said. “Now it’s OK to talk about it

Per today’s Boomberg:

“June 14 (Bloomberg) — Reports on manufacturing and housing this week will probably offer evidence that the recession- stricken U.S. economy is within months of hitting bottom, economists said.

A 1 percent drop in industrial production in May, based on the median of 68 estimates in a Bloomberg News survey, was due mainly to auto-industry shutdowns that swamped gains elsewhere, analysts said. Other reports may show builders began work on more houses as sales steadied and consumer prices rose.

The fallout from bankruptcies at Chrysler LLC and General Motors Corp. is likely to reverberate through the industry and the economy in coming months, even as other areas stabilize. Plunging home prices, near-record low mortgage rates and tax credits for first-time buyers may help bring an end to the worst residential construction slump in seven decades. ”
———–

Bottom calling within “months.” I don’t believe the bottom callers just yet. My suspicion is that we’re in a skewed “w” recession, and we’re at the bottom of the first half. There will be a rise. But there are a few more shoes yet to drop: banks still have toxic assets (I don’t believe those banks are paying back TARP because they can — it’s a PR stunt IMO) and I expect more banks to go down. Alt-A and Prime still haven’t reset. Then we’ll hit a lower bottom (early 2011)?

What I’m curious about is the mindset of the American consumer. Are they really going to hunker down like they did in the 30’s, repairing everything and buying nothing? My guess says no. Buying new is as cheap as repairing (thanks to southeast Asian labor), so I don’t expect the consumer culture to retract. Heck, SUV sales began to increase as soon as gas went down to $2.25 or so. Talk about short memories!

Are we below 200 sqft yet in SD?
I didn’t think so.

Ca Foreclosure Moratorium (June 13th, 2009 )
(Didn’t we just have one expire?)
http://abclocal.go.com/kgo/story?section=news/state&id=6863875&rss=rss-kgo-article-6863875

Joe (Plagiarize Me) Biden is on Meet the Press today declaring that the Stimulus Plan is definitely “working”; yet another economic victory for the Obama regime.

Now, since Biden, Obama, and most of the politicos in DC have never had a real job, I wonder what they think “working” is.

I guess it would be along the lines of “Two hookers were ‘working’ the bar at the Plaza Hotel”, or “Is our conspiracy to empty the Treasury ‘working’?”

I still like the bulldoze DC plan. That could get some people productively working.

No cars for you. NEXT!

GM plans to close 35 dealerships in Florida

By Doreen Hemlock

South Florida Sun-Sentinel

Saturday, June 13, 2009

General Motors plans to close 35 dealerships in Florida as part of a restructuring plan that winds down 1,323 dealers nationwide by October 2010, executives from the troubled carmaker told a U.S. House committee Friday.

Pennsylvania stands to lose the most GM dealers: 90, followed by Ohio with 79, Illinois with 66 and California with 65, the company informed the Energy and Commerce committee’s oversight and inestigation’s subcommittee.

Only Alaska is spared shutdowns.

GM has declined to identify individual dealerships set to wind down, offering only the state-by-state breakdown so far.

We really need a California Czar!
And some gestapo’s

Question of the day:

What % of all SFHs sold are purchased with cash, without a mortgage?

What % of all SFHs sold are purchased with real, genuine cash, without the loan hiding elsewhere?

If a guy with very high stock equity/net worth also has a small margin balance before and after the SFH purchase, does this mean he financed? If having ANY debt means the SFH was financed, then is there EVER any such thing as a SFH purchased with cash?

“I gave cash for it” usually gets my red flags going, since this is a debtor nation: in debt we trust. My guess is that the people with real, genuine net worth (not RE bogus, small/medium/big business bogus, Madoff bogus, MLM bogus, Ponzi Bogus, etc.) are very few. But just exactly how few are there?

My wife and I are having Rochester fever again today. It appears that we’re in a time-warp, being on the bleeding edge of the bust in Florida, and eyeballing moving to the tail of the boom in Roc. Talk about a crappy play.

Apalachicola, Florida, June 2009
Me and my family are back from our annual vacation to northern Florida. I’ve visited this area on an annual basis since I was 6 years old, and I lived here for 5 years while I attended school (FSU). Yes, I love here!

Ok, I was on an island that is fairly remote as things go meaning that there are no “4-lanes” or direct shots to this area from the interstate. They do have very nice beach houses!

My wife and I usually take some time to nose around the place. What we found was puzzling.
1) The houses appeared to be rented but not quite as frenzied as in the past.
2) There was no construction in progress. This is a real break from the past 5 years. I have seen some abandoned construction in progress. There were 6 or 7 houses and lots abandoned unfinished.
3) The oystermen in the bay are more numerous than ever. I assume this is because there is no construction.
4) Restaurants appear to be failing.
5) Newer businesses are failing. Established businesses appear to be under pressure.
6) There are a lot of rental and private residences for sale.
7) There are a number of perfectly located houses that are abandoned, unfinished, or in disrepair.
There are a lot of houses that are looking great. The weekly rental market does not appear to be over built in that the beach houses are occupied.

It’s a mixed bag. The whole area appears to be under stress but not going down the tubes - yet. The final result will entirely depend upon economic improvement and a commitment by the local businesses to limit and control costs while giving a good product. I think that the good product part is slipping. Where this goes is not yet certain, but it is down for now.

We had a nice time! I love the beach.

Roidy

Ben, I think you mentioned the Florida meet-up going something like this:

http://www.tampabay.com/features/humaninterest/article1009708.ece

Palmcaster, CA, in the LA Times:

By Peter Y. Hong
June 10, 2009

But in 14 Southland ZIP Codes, mainly desert communities in the Antelope Valley and Inland Empire, median prices have fallen below levels recorded in April 1989, according to MDA DataQuick, a San Diego real estate information service.

That means thousands of homes in those neighborhoods — even houses barely 20 years old and in decent shape — have lost every dime of their appreciation, giving back not just the gains of the recent bubble but steady increases logged over a generation.

The April median price in Beatrice’s Lancaster ZIP Code of 93535, for example, was $87,000. That’s down 74% from a $334,500 peak price in 2007. Even worse was the 92410 ZIP Code in the city of San Bernardino, which covers several older neighborhoods. Its $61,000 April median represents an 84% drop from the peak of $370,000 in 2007.

Prices also tumbled below 1989 levels in neighborhoods in Palmdale, Hemet, Barstow, Desert Hot Springs, Victorville, Highland, Santa Ana and Oxnard, according to DataQuick. Several other inland communities, including parts of Moreno Valley, Banning and Rialto, had median prices that were only slightly above 1989 levels and below the April 1990 median.

http://www.321gold.com/editorials/schiff/schiff061309.html

Obama Nation: Crony Capitalism at it’s finest - latest from Peter Schiff.

Florida judges seek ways to ease congestion in courts caused by flood of foreclosures

By MICHAEL C. BENDER

Palm Beach Post Staff Writer

Sunday, June 14, 2009

TALLAHASSEE — With Florida accounting for one of every six foreclosures in the country and legislators showing little interest in addressing the crisis, a handful of judges are exploring ways to keep borrowers and lenders out of an increasingly congested court system.

“It’s very frustrating to recognize that consistently over the last three years we’ve sustained budget cutbacks and staff reductions in the court system and this tsunami has hit with foreclosures,” said Burton Conner, a judge in the judicial circuit that includes St. Lucie, Martin and Okeechobee counties.

That circuit has begun requiring borrowers and lenders to meet before their first court appearances, leading to many cases being settled. Meanwhile, Palm Beach County’s circuit court last week launched a pilot program to help homeowners understand options that could keep them in their houses.

But action from Tallahassee has been limited, even with nearly 11 percent of all mortgages in Florida in foreclosure - the highest rate in the country, according to the Mortgage Bankers Association. Foreclosures in Florida dropped from April to May but were still up 50 percent from the same time last year, according to numbers RealtyTrac released Thursday.

During the spring session that ended last month, state lawmakers introduced 15 bills to address foreclosure issues. But 10 bills never received a hearing, including several that would have required mediation between lenders and borrowers. The Center for Responsible Lending estimates that one of every three homeowners facing foreclosure in Florida could stay in their homes with mediation.

Instead, lawmakers approved just two foreclosure-related bills: one to comply with new minimum federal regulations for lenders, and another to increase court costs for foreclosure cases from $300 to as much as $1,900.

The state “should have done more,” said state Chief Financial Officer Alex Sink, a Democrat running for governor.

Sink pointed to the state Financial Regulation Office’s failure to regulate mortgage lenders, a problem that allowed thousands of people with criminal records into the industry. The office’s chief resigned in August after the problems were first reported by The Miami Herald, but a replacement still has not been hired.

Attorney General Bill McCollum, a Republican also running for governor, called the foreclosure crisis a “very tough issue” that his office has tried to address by cracking down on fraud. But he said options for helping homeowners are limited.

“It is not something you can pump money out to avoid foreclosures,” he said. “We don’t have the resources to do that. There is no bailout in the state of Florida.”

Gov. Charlie Crist noted the rise in foreclosures in his State of the State speeches in 2008 and this year. But he has never included any specific foreclosure-related bills among his legislative priorities.

“We want to do all we can to help people,” Crist said when asked about the state’s responsibility to address foreclosures. “It’s a tough time right now.”

Crist pushed banks to halt foreclosures during the holidays last year and ultimately settled on a voluntary moratorium. Crist’s press office could not verify whether any banks participated.

Crist also named a foreclosure task force in February 2008, including elected officials and people from the banking and real estate industries. But the panel put out a report with just one recommendation to the legislature: to increase protections for people with subprime loans.

Lawmakers did not adopt it.

“There is just not an inclination to give the light of day to any of these foreclosure remedies,” said Rep. Darren Soto, D-Orlando, whose “Foreclosure Bill of Rights” would have delayed payments for many homeowners.

McCollum, who created a Mortgage Fraud Task Force in 2007, said homeowners facing foreclosure need to be more pro-active with their lenders. “In many cases the lender can and will work this out,” he said.

Several states, including Ohio and New Jersey, have implemented aggressive programs to require mediation between bankers and lenders. In Florida, two Leon County circuit judges made a proposal in December to the state’s 20 chief judges to create similar mediation programs.

Three of the state’s 20 judicial circuits have enlisted the nonprofit Collins Center for Public Policy to offer mediation.

The first such program arose in the Treasure Coast’s 19th Circuit, where borrowers and lenders are required to meet before their first court appearance. In the past month, 22 of the first 31 mediated foreclosure cases in the circuit were settled with renegotiated loans.

In Palm Beach County, Chief Circuit Judge Kathleen Kroll signed an order to require banks to consider revising a loan at the homeowner’s request. The court receives an average of 500 new foreclosures each week.

Last week, the courts in Palm Beach County began a service to make attorneys and law school interns available to walk homeowners through the paperwork. On Thursday, the first day the information sessions were available, 26 of 142 eligible homeowners attended.

“We want to at least have some contact with these people so they’re not deer in headlights,” said Palm Beach County court general counsel Amy Borman. “We want to help.”

As if homeowners didn’t have enough to worry about, now the SFgate is reporting that those granite counter tops can be as radioactive as uranium ore! Something to keep in mind if you buy a foreclosure…

San Carlos homemaker removes radioactive granite
Posted 6/7/2009 4:48 PM PDT

Granite countertops are durable, beautiful, and trendy. However, some granite contains as much uranium as commercial uranium ore, and those granites are radioactive. The Jupurana Bordeaux granite in Cathy Woods San Carlos kitchen emitted more gamma radiation than she wanted in her home. Her granite also emitted enough radon gas to triple the radon concentration in her kitchen.

When Cathy learned that her granite was radioactive, she assumed the East Bay showroom that sold her the stone would immediately offer replacement countertops and remove any radioactive granite from their showroom. However, their reaction bordered on hostile. They initially insisted that she had not purchased the problem stone from them. When I called the showroom in the guise of a customer, they told me their granite was no more radioactive than soil or water.
The following Saturday, I discretely took gamma readings on granite in the showroom. Their newest shipment of Jupurana Bordeaux was even more radioactive than Cathy’s countertops. A person in close contact with the new granite for an hour a day would exceed the recommended limit on radiation exposure in less than 2 months.
Cathy challenged the showroom’s owner about the ethics of selling radioactive granite. She pointed out that young children or pregnant women might be exposed to gamma radiation without their knowledge. She reminded him that breathing radon gas is the leading cause of lung cancer in non-smokers.

The showroom owner showed no remorse for selling radioactive materials to unsuspecting families. He proclaimed loudly that he was not doing anything illegal. He has a right to do business. Besides, what did she expect him to do with the large shipment of Jupurana Bordeaux that he just received?

After several discussions with the showroom, Cathy negotiated a discount on replacement granite that was not radioactive. However, she had to bare the cost of a second fabrication, and her cabinets were scratched when the radioactive granite was removed. The fabricator was less meticulous on the replacement granite, and she was less pleased with the new installation.

The Brownshirters appear in Albany, NY on Thursday, to prevent any opposition to the ObamaNation. President ObamACORN, where are you?:

Obama’s ACORN Brownshirt Mobs Assault NY Senator

Sturmabteilung

That’s a German word that has little resonance in America today. Few remember what the German militia Brownshirts, of the Nazi Party, were outside of the stereotypical use of the term to describe someone who they think is intolerant. Even fewer remember the tactics and purpose Brownshirts served in establishing totalitarian power in a collapsing republic in Germany in the 1920s.

They were the original uniformed thugs Hitler used to organize demonstrations and engender support for the National Socialists and their plans to nationalize the economy and implement a new kind of governance: fascism. Eventually they became street brawlers who dealt with any political opposition to the Nazi ideology. They threatened, intimidated, and assaulted and murdered those who opposed the “change” Hitler was bringing to Germany.

The similarities between Hitler’s Brownshirts and Obama’s use of ACORN is astounding. Like the Brownshirts of Nazi Germany, ACORN serves to rabble-rouse, intimidate, threaten and bully the political opposition to Obama and the Politburo Democrats that are solidifying their control of the country. In Germany, the Brownshirts were sent to voting places to intimidate and beast up anyone they suspected of not supporting the Nazis. During the election, not only was ACORN charged with intimidation and fraud in some states, a widely seen Youtube video showcased Obama supporting New Black Panthers dressed up in military fatigues carrying nightsticks to intimidate the voters.
The Brownshirts did the same thing in Germany, and were often pardoned for murders they engaged in – same as Obama’s Justice department pardoned the thugs intimidating voters in Philadelphia.

History repeats itself in a fashion that should send alarm bells off in the heads of any American that has any modicum of understanding about liberty and history. On Thursday, Obama’s ACORN Brownshirts stormed the NY capitol, and assaulted State Republican Senator James Alesi, and spitting in the face of his chief of staff.

A mob of 150 ACORN mobsters stormed the capitol in Albany NY to “protest” and prevent the transfer of power from Democrats to Republicans due to the caucusing of two dissident Democrat Senators with the Republicans, which effectively gives the GOP control of the NY State Senate when certified. As a result of the two Democrats switching “sides” as it were – the ACORN rent-a-mob was dispatched to storm the capitol and intimidate the Senators.

Does anyone remember a mob of Republicans storming the Senate to intimidate Democrats when Arlen Specter or Jim Jeffords jumped to their side? Anyone recall a crush of mobs with pre-printed signs with political talking points accusing them of engaging in a coup de tat??

I didn’t think so. But here – there is zero tolerance for disloyalty to the nazi- er…Democrat Politburo. The State Senate in NY is now shut to prevent the orderly transfer of power as Majority Democrats have closed the chamber to prevent the transfer of power.

Want to see the frog that joined me last night while I was sitting on the deck reading?

http://www.flickr.com/photos/26352634@N05/3625819274/in/set-72157619648353561/

I mean “microwave”..sheesh..I need some more strawberry shortcake over here !

homegrown strawberries?

For your entertainment pleasure to night.

“Obama Drastically Scales Back Goals For America After Visiting Denny’s”

http://www.theonion.com/content/video/obama_drastically_scales_back

Hi guys…I haven’t posted frequently, but I have been a fan of the blog for the past few years. We just started going to open houses here in the suburbs of Philly and we found something that looks reasonably priced and we are thinking of moving forward. Only one problem, we have no idea where to start. We haven’t been pre approved in the last few years and don’t know how to find a good lender or good real estate lawyer. We have excellent credit scores and more than sufficient cash for the 20% down payment. We are going to take our time and if the house doesn’t sell while we are getting our ducks in a row, we will probably put in an offer.

Thanks in advance.