June 21, 2009

Bits Bucket For June 21, 2009

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the American Visionaries series from Schwarzfilm.




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234 Comments »

Comment by aNYCdj
2009-06-21 04:44:26

RAIN in NYC…who hoo i am saving tons on my electricity bills

I still haven’t installed my ac’s yet…

Comment by wmbz
2009-06-21 05:07:40

98 in S.C. Heat index 102, high humidity! Come on down.

Comment by aNYCdj
2009-06-21 05:25:06

Oh man do i know SC heat…Charleston Columbia Florence Beaufort…yup know it well man

 
Comment by Ol'Bubba
2009-06-21 05:28:55

Yup-
We have some good sweatin’ weather in the Carolinas this weekend.

Comment by wolfgirl
2009-06-21 06:17:16

But at least the is over, or so they say.

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Comment by wolfgirl
2009-06-21 06:18:19

The drought is over. Sorry, my fingers aren’t awake yet.

 
 
Comment by robin
2009-06-22 00:40:55

Orange County, CA small house with granny flat, electricity cost less than $100 total each of the past two months.

Everything double-insulated and Energy-Star approved, as always.

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Comment by mikey
2009-06-21 06:16:45

Carolina ice tea weather :)

Comment by socaljettech
2009-06-21 08:14:18

MMMM, sweet tea…. God I miss the South!

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Comment by sleepless_near_seattle
2009-06-21 10:01:55

At a store near you:

http://www.sweetleaftea.com/

 
 
 
 
Comment by WT Economist
2009-06-21 05:28:02

I haven’t installed my window fan yet. By I have dusted off the ceiling fans.

Comment by Ben Jones
2009-06-21 05:36:46

I believe yesterday was the longest day of the year, and I had to wear thermals last night. Even veteran Flagstaff residents are saying this is bizarre.

Comment by Incredulous (the original)
2009-06-21 07:06:20

Go to climatedepot.com or iceagenow.com to see what may be happening. So much for global warming.

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Comment by LehighValleyGuy
2009-06-21 07:38:11

No, no, it’s “climate change” now, not global warming. Every time the weather is different from any other time, that proves we need more government regulation.

 
Comment by Bill in Los Angeles
2009-06-21 07:40:16

Aren’t you the same LehighValleyGuy who yesterday implied that no one should be able to get wealthy through capital gains and dividends though? What’s with your tirade against regulation now?

 
Comment by LehighValleyGuy
2009-06-21 08:13:25

I’ve been posting tirades against regulation here for well over a year now. I don’t know how you could have missed them if you check in at all regularly.

 
Comment by SV guy
2009-06-21 08:34:20

“No, no, it’s “climate change” now, not global warming. Every time the weather is different from any other time, that proves we need more government regulation.”

+1

Soon coming to a town near you, a carbon tax.
If the greens’ get their way it will be a scam only rivaled by our own Federal Reserve. (For the record I’m not anti-environment, far from it. But I always have my BS detector set to high.)

 
Comment by ET-Chicago
2009-06-21 11:28:36

I’ve been posting tirades against regulation here for well over a year now. I don’t know how you could have missed them if you check in at all regularly.

Laugh — that’s true. LehighValleyGuy is very consistent.

 
Comment by BanteringBear
2009-06-21 12:17:38

Anybody discounting a rise in global temperatures need only look to the polar ice caps, which are melting at a shocking rate, for evidence. While the reasons for such are up for debate, and an argument could surely be made that it’s a temporary phenomenon, to deny the fact is foolish to say the least.

 
Comment by Claire
2009-06-21 15:16:48

I expect the animals coming out of the last ice age kind of liked global warming. Bet that was man too.

 
Comment by ecofeco
2009-06-21 15:30:38

There are two kinds of people in the world (yeah I hate these too, but in this case, it seems to hold true):

Those who understand the 2nd Law Of Thermodynamics, and those who don’t.

 
Comment by Incredulous (the original)
2009-06-21 19:02:46

“Anybody discounting a rise in global temperatures need only look to the polar ice caps, which are melting at a shocking rate, for evidence. While the reasons for such are up for debate, and an argument could surely be made that it’s a temporary phenomenon, to deny the fact is foolish to say the least.”

Actually, they aren’t melting at a shocking rate.

http://www.theaustralian.news.com.au/story/0,25197,25648336-30417,00.html

http://icecap.us/images/uploads/Scientists_Counter_Latest_Arctic.pdf

http://icecap.us/index.php/go/joes-blog

 
Comment by BanteringBear
2009-06-21 21:13:44

Indisputable fact: Since 1979, the size of the summer arctic polar ice cap has shrunk more than 20%. It’s real and quite obviously due to an increase in temperature. I personally believe that it naturally expands and contracts over the course of time, as temperatures fluctuate, but to deny that altogether, like many do, is foolish.

 
Comment by Dale
2009-06-21 22:43:58

Does this mean Al has to give back his Nobel Peace Prize?

 
 
Comment by cactus
2009-06-21 07:37:03

Very nice June in Phoenix but I think the heat starts next week forcast highs of 107 and lows in the 80’s

last week in Phoenix in any case

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Comment by aNYCdj
2009-06-21 09:00:11

Yeah but its DRY heat…….

 
Comment by Southwest Steve
2009-06-21 14:25:33

Yes, Low humidity makes all the difference, but phx is hell. 90 degrees and 25% humidity is great. 80 degrees and 80% humidity is the worst.

 
 
Comment by Michael Viking
2009-06-21 07:52:05

Funny! Last night I woke up cold and had to throw another comforter on the bed!

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Comment by iftheshoefits
2009-06-21 07:57:49

It rains nearly every day in Salt Lake. It poured yesterday afternoon, again this morning. Temps 20 degrees below normal.

It’s raining so much that everyone has turned off their automatic sprinklers for an extended period of time.

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Comment by Az-Retired
2009-06-21 08:44:03

We have been in Mammoth Lakes, Ca for a month now and it has rained the majority of the days and has been very cold. The mountains have lots of snow yet.Trout fishing has been exceptional. If Aladinsane is hiking the area he will be hard pressed to express the drought doomsday scenario he so loved to spout. Even the White Mountains which are on the east side of the Owens valley are covered in deep snow which is very unusual this time of year. Everyone here says “so much for global warming.”

 
Comment by Bill in Los Angeles
2009-06-21 10:06:31

Every 20 or 30 years the socialist power grabbers present some catastrophic scenario and they have of course a socialist solution: Kill business, raise taxes, and let the elite control everyone. In the 1970s it was the Ice Age, Barry Commoner, Carl Sagan, et al. In the 1990s and now, it’s the global warming with Sore Loserman the a$$clown “Nobel Prize winner” who travels back and forth in a Gulfstream jet that pollutes far more than a car, has a giant McMansion that has a huge carbon footprint, and all that BS.

 
Comment by ecofeco
2009-06-21 15:37:32

“Every 20 or 30 years the socialist power grabbers present some catastrophic scenario and they have of course a socialist solution: Kill business, raise taxes, and let the elite control everyone.”

Yeah just like the present situation. Damn liberals!

Oh wait… I forgot. Was Bush a liberal? Maybe I’m thinking of Phil “lets-repeal-the-Glass-Stegall-Act” Grahm?

Hmm, now I’m confused.

 
Comment by Eudemon
2009-06-21 18:37:56

You should be confused.

Your philandering hero - Bill Clinton - signed the repeal of Glass Stegall. It wasn’t just Grahm.

Present all sides or present nothing, that’s what I’ve heard smart people do.

 
Comment by banana republic
2009-06-21 23:59:59

I don’t suppose you know the vote in Congress on it? I guess all the Republicans voted against it?

Not!

 
Comment by banana republic
2009-06-22 00:04:06

Okay here is your answer…

The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by Republican majorities on party lines by a 54-44 vote in the Senate.

Ouch! You Republicans OWN this disaster every possible way it can be owned. Blaming CLINTON for this is not only cowardice, but it is also flat out lying.

There is a reason your party is GONE. Look at this country!

 
 
Comment by Southwest Steve
2009-06-21 14:23:49

78 in Santa Fe, light breeze, 28% humidity, blue skies, puffy clouds–it doesnt get any better!

I close on my house in 28 days and move to CA looking for a steal!

Odd… Santa Fe, NM is 78 and beautiful at 7000 ft.

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Comment by MovedToAugusta
2009-06-21 05:49:58

101 todays high in Augusta. blah.

Comment by palmetto
2009-06-21 06:04:23

Same here in Tampa Bay area. The weather has been really strange. All that rain in May, which was unusual. Now we’ve got the sort of heat we normally see in August, September. Except the heat is not being relieved by afternoon thunderstorms. I don’t like it. It seems like a set-up for a really bad hurricane or two.

Comment by Muggy
2009-06-21 06:09:33

Yesterday I had a hard time breathing. We went to West Shore Mall to let the littleman run around. I almost passed out walking back to the car (no, I wasn’t drinking :smile:).

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Comment by aNYCdj
2009-06-21 06:18:13

Muggy dats nutin…check this place out 95 degress dew point 82 heat index 120….Ive seen it even higher 140…steam bath city

http://www.wunderground.com/global/stations/41431.html

 
Comment by palmetto
2009-06-21 06:24:32

Amen, Muggy. Oh, BTW, I watched Cops last night. I get a kick out of the show from time to time myself. But I wouldn’t be the Palmster if I didn’t. Besides, some of the CA intelligentsia bloggers expect it of me, and I don’t want to let them down.

 
Comment by Muggy
2009-06-21 06:30:01

Well, Tampa was close yesterday: 95, DP80, HI 110

No joke. I’ve never been so freaking hot.

 
Comment by palmetto
2009-06-21 06:31:49

Sometimes the air in this part of Fla is so thick you can cut it with a knife. You almost need gills to breathe, that’s how bad it gets and yesterday was one of those days.

 
Comment by Ol'Bubba
2009-06-21 06:35:04

You know it’s exceptionally hot and humid in Tampa Bay when you walk across the parking lot and you leave a wake.

 
Comment by palmetto
2009-06-21 06:42:28

LOL, Ol Bubba, I was out at a flea market early yesterday and it was bad already, so much so, that I was a human waterfall (like the guy in Broadcast News), due to the fact that I’ve been drinking gallons of water the past few days. The check I wrote out for a small purchase looked like it had been in a rainstorm. I handed it over with a big, cheesy grin.

 
Comment by edward
2009-06-21 07:26:14

Fort Myers yesterday was 94 with 83 dew point for a heat index of unbearable.

 
 
Comment by DennisN
2009-06-21 08:59:34

Reports were that there was a tornado in the suburbs of Baltimore MD yesterday.

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Comment by Pondering the Mess
2009-06-22 09:49:37

Actually 2 or 3 tornados wandered through Maryland on Saturday. We also had 1 or 2 June 9th when brutal storms went through.

For better or worse, now the weather is shifting to hazy, hot, and humid, so no more cool rainy days for a while.

 
Comment by JoJo
2009-06-23 06:56:45

“Reports were that there was a tornado in the suburbs of Baltimore MD yesterday.”

Yes, it passed right by my house. I watched the rain swirl in different directions. Luckily, no one was injured.

 
 
 
Comment by scdave
2009-06-21 07:15:26

Its shorts and t-shirt here…

High 77
Low 56
Wind 10 from the NW
UV 0

Comment by Carlos Cisco
2009-06-21 14:36:28

Here in N Ohio, pleasant 73 degrees, 65 % humidity, no AC yet, no need to water, rains every 3 days or so. Windows open all night, 2 blankets; too bad utility co.’s.

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Comment by polly
2009-06-21 07:24:22

It is cloudy in the DC area so it isn’t really hot yet, just unbearably muggy. I’m sure the temp will catch up when the clouds move out.

I actually went outside this morning to take out the trash, pick up yesterday’s mail (two credit card offers), and walk up to the shopping plaza to buy a Sunday newspaper. Made it up and then down 20 stairs. I’m not sure if that was all that wise - guess I’ll find out when the first dose of the day starts to wear off.

I am living la vida AC. Haven’t had a shower and therefore no shampoo since Thursday night. I do not want to deal with any excess sweat. Allowed to do it Monday. I’m getting impatient.

Comment by dude
2009-06-21 09:28:28

I was happy to read yesterday that your surgery went well. May your swelling be minimal and the pain nonexistent.

Happy blogging meanwhile!

Comment by polly
2009-06-21 11:00:09

Thanks, dude. The pain is there, but it is definitely getting better. I’m already able to wait more than 4 hours between doses, and I am currently seeing how long I can make it on just one pill instead of two.

I am not a masochist, but I prefer to hear what my body is telling me when I can manage it.

Waking up in the morning is still no fun at all.

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Comment by Carlos Cisco
2009-06-21 14:39:46

Keep up the good work! Really minimize the meds but dont let it throb you awake. Save those pills for investment!

 
 
 
 
Comment by varelse
2009-06-21 10:25:50

Isn’t today supposed to be the first day of summer?

62 degrees and raining here in Massachusetts……..

 
Comment by exeter
2009-06-21 11:31:44

We haven’t had two consecutively dry days in a least a week and a half in downstate NY.

 
Comment by ecofeco
2009-06-21 15:25:55

101 in Houston. Light (hot) breeze. 2 weeks straight with no rain. No rain for at least another week.

 
 
Comment by az_lender
2009-06-21 05:03:35

New SFH sold in April = 352K annualized
SFH starts in May = 401K annualized
(Haven’t I heard “401K” somewhere before? Hmm)

How wonderful, the housing industry is adding a thousand new empty houses in every state, just what America needs this year.

 
Comment by wmbz
2009-06-21 05:03:58

Treasury’s Got Bill Gross on Speed Dial…
By DEVIN LEONARD
Published: June 20, 2009
Newport Beach, Calif.

Every day, Bill Gross, the world’s most successful bond fund manager, withdraws into a conference room at lunchtime with his lieutenants to discuss his firm’s investments. The blinds are drawn to keep out the sunshine, and he forbids any fiddling with BlackBerrys or cellphones. He wants everyone disconnected from the outside world and focused on what matters most to him: mining riches for his clients at Pimco, the swiftly growing money management firm.

Mr. Gross, 65, has long been celebrated for his eccentricities. He learned some of his lucrative investing strategies by gambling in Las Vegas. Many of his most inspired ideas arrived while he was standing on his head doing yoga. He knows he has to be well dressed for client meetings or television — but instead of keeping his Hermès ties neatly knotted, he drapes them around his neck like scarves so he can labor with his collar open.

And with the collapse of Wall Street, Mr. Gross has emerged as one of the nation’s most influential financiers. His frequent appearances on CNBC draw buzz, as do his wickedly humorous monthly investing columns on the Pimco Web site. Treasury secretaries call him for advice. Warren E. Buffett, the Berkshire Hathaway chairman, and Alan Greenspan, the former Federal Reserve chairman, sing his praises.

“He’s a very individualistic person. He doesn’t come at analysis or investment judgment in the words, terminology or ambience that I have been used to over the decades,” Mr. Greenspan says. “That may be the secret of his success. There is no doubt there is an extraordinary intellect there.” Mr. Greenspan, it should be noted, now works for Pimco as a consultant.

Amid all of this, Mr. Gross and his firm are trying to shape the government’s response to the economic crisis. He is one of the most fervent supporters of the Obama administration’s plan to enlist private investors to help bail out the nation’s ailing banks and try to revive the economy.

That effort, known as the Public-Private Investment Program, or P.P.I.P., has gained little traction so far. But Mr. Gross has energetically defended its architect, Treasury Secretary Timothy F. Geithner, against critics like the New York University economics professor Nouriel Roubini and the New York Times columnist Paul Krugman — both of whom argue that the strategy is flawed and that it would be best for the government to temporarily nationalize so-called zombie banks to prevent a repeat of the Great Depression.

Comment by Ben Jones
2009-06-21 05:42:59

Gross is a commie, IMO…

Comment by palmetto
2009-06-21 06:08:09

“He learned some of his lucrative investing strategies by gambling in Las Vegas.”

There’s your trouble, right there. What I am learning about many of these guys is that the Emperor has no clothes. For all we know, Gross is another Madoff or Stanford.

Comment by ecofeco
2009-06-21 15:43:27

Exactly.

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Comment by yensoy
2009-06-21 06:15:41

You mean the “Socialize the losses” type one? Aren’t they all?

 
Comment by Hwy50ina49Dodge
2009-06-21 06:53:12

HBB Quick Quiz:

What does Gross, Mozilo, and Chrissy Cox all have in common?

“The O.C.” :-)

Comment by Ben Jones
2009-06-21 07:03:16

I’ve never understood this “The” thing with Orange County. When I was out there last summer, I didn’t see anything that remarkable about it. Of course, I felt the same with about 95% of California. The coast is nice, but the rest looks like southwest Texas with a lot of houses

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Comment by James
2009-06-21 07:25:20

I don’t either. If you aren’t into the beach and mountains there isn’t a particularly good reason to be here.

I’m at one or the other every week.

So many people live less than 5 miles from the beach and go to the beach less than 3 times a year.

Not many parks either is my biggest complaint. Mostly have them in places where its a landslide zone.

 
Comment by Bill in Los Angeles
2009-06-21 07:53:16

James, I’m a native Californian and you have that right. Unless you are in the high Sierras or at the beach, there is nothing special about California except…the ability to quickly and cheaply snow ski on a 15 foot snow base one day at Mammoth and go surfing the next day off of Malibu without having to fly in an airplane between those locations.

But that is why I like California. In Colorado it’s only mountains and better powder for skiing on. In Florida it’s only beaches. In Hawaii it’s beaches and not many high paying jobs. But you have all that in California, along with some good high paying jobs (still).

However, I’m probably going to have to leave California for work very soon, judging from layoff rumors at my company.

 
Comment by cactus
2009-06-21 08:03:17

“The coast is nice, but the rest looks like southwest Texas with a lot of houses”

Southern Ca yes different in N CA I’ve been through SW Texas Big Bend Marfia etc very remote areas and I think quite pretty.

 
Comment by Hwy50ina49Dodge
2009-06-21 08:05:57

Hey Ben, take note of the last sentence! :-)

Filed under: “I like the color purple & I’m somewhat of a non-conformist…so they threw me out… ;-)

Planned communities:

“Orange County has a history of large planned communities. Nearly 30% of the county was created as master planned communities, the most notable being the City of Irvine, Coto de Caza, Anaheim Hills, Tustin Ranch, Ladera Ranch, Talega, Rancho Santa Margarita, and Mission Viejo. Irvine has become the model master planned city, encompassing many villages which were all planned under a master plan by the Irvine Company in the mid-1960s. Many communities within California and throughout the country (and even outside the country including China) have used these Orange County developments as models for their own planning. Elements such as community clubhouses, numerous community pools, pocket parks, horse trails, and active associations were first established in Orange County master planned communities and have been copied in numerous places throughout the United States. Irvine was the first master planned community in the world, and sponsors visits from designers the world over who use it as a model to design their communities.”

 
Comment by socaljettech
2009-06-21 08:13:08

The only thing remarkable about the “OC” is the cost to live here. It was nice 20 years ago when there was some open space- but now, if you want to get away from people you have to leave the county. Sorry, James, gotta dissagree about the beaches and mountains- both are so over run with idiots they just aren’t all that enjoyable anymore. I used to bike at the beach all the time, but the traffic and exhaust have ruined that now.The mountains are a expedition to get to as well, thanks to the overpopulation out here and in Riverside county. Sad, because this used to be a really nice area, but now its just another souless suburban money trap. Thank God I rent! And talk about the emperor with no clothes- this county has a disproportionate number of people in $800,000 houses that are just a minor expense away from homelessness. This place has a very hard crash still coming, IMHO. I really hate to see it, I’ve lived here 47 years. Can’t wait to leave, now though.

 
Comment by SV guy
2009-06-21 08:44:09

“I really hate to see it, I’ve lived here 47 years. Can’t wait to leave, now though.”

+1

I have lived in the formerly great state of California for 45+ years. What used to be the best place on earth has gone to seed. I will not miss it when I go.

 
Comment by Bill in Los Angeles
2009-06-21 08:51:37

Around the South Bay part of Los Angeles along the half mile strip from the beach are houses with base price of $800,000. I cannot imagine that just a few are house rich and savings poor. I think most of them have less than $100,000 saved in their retirement plans unless they are movie stars or TV stars. That’s the way all up and down the California coast - house rich and savings poor.

 
Comment by DennisN
2009-06-21 09:26:10

I left California at age 53 after living there my whole life. My family had lived there since the 1860’s but it was no longer “home”. Everyone else in the family had either died or moved away.

The Boise valley reminds me of Santa Clara county in the 1950s, before twisted evil henchman “Dutch Hamann” (may god burn his soul in hell) ruined it. There are now more people living in Santa Clara county than live in the entire state of Idaho. And Idaho isn’t a small state in area(83K square miles vs. third largest CA 158K square miles, or larger than NY, VT, NH, and MA combined).

 
Comment by Professor Bear
2009-06-21 16:13:50

“Orange County has a history of large planned communities. Nearly 30% of the county was created as master planned communities,…”

Central planning at its worst shows its face in the guise of planned communities.

 
 
 
Comment by NYCityBoy
2009-06-21 08:20:56

“Gross is a commie, IMO…”

Ben, it seems to me that you are being a little hard on commies. Gross is much worse.

As I grow older there is something I don’t understand. All of these greedy, filthy leeches don’t seem to have any problem with what they are. I see it all around this city. I see it when I turn on CNBC (which I no longer do). I see it when I turn on FoxNews or CNN. We are surrounded by soulless, corrupt monsters. And still they go to church on Sunday, attend family functions and act like they are just another average citizen.

Watching CNBC is now like watching The Sopranos. These men commit crimes every day. They destroy lives and nations and then they try to act like they are “legitimate businessmen”. There is nothing legitimate about Bill Gross, Hank Paulson, Ben Bernanke, Jamie Dimon, Lloyd Blankfein, and the rest of the mafia that controls our nation’s finances. Maybe they are fooling some of the people some of the time. But they aren’t fooling this boy. Lock them up.

Comment by Incredulous (the original)
2009-06-21 12:27:33

And Dr. Mengele, um, . . .I mean Tiller was an unsher in the church he belonged to. Some church….Baby Jesus wouldn’t have survived either.

What you describe has been going on forever. The alleged titans of this and that think they’re entitled. Nothing silences a guilty conscience (assuming they aren’t all sociopaths) like buckets of money. And nothing overcomes everyone else’s natural horror and aversion than the promise (or even just the remote fantasy possibility) of shared buckets of money. Every greedy egomaniacal tyrant needs greedy sycophants, and the world has millions of greedy sycophant wannabes (some called ministers) waiting in the wings.

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Comment by exeter
2009-06-21 12:55:36

Add Ken Lewis to the list. All of them should be hanging from lightpoles.

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Comment by NYCityBoy
2009-06-21 13:32:14

Let’s setup our own lightpole factory. We will call it NYCityBoy & Associates Lightpole, Inc. That has a really catchy ring to it.

 
Comment by exeter
2009-06-21 13:40:43

I’ll dust off my gaffs and raise the rope. I knew I’d have a use for all my old lineman gear.

 
Comment by SanFranciscoBayAreaGal
2009-06-21 15:11:32

The word lineman brought to mind a song:

I am a lineman for the county and I drive the main road
Searchin’ in the sun for another overload
I hear you singin’ in the wire, I can hear you through the whine
And the Wichita Lineman is still on the line

I know I need a small vacation but it don’t look like rain
And if it snows that stretch down south won’t ever stand the strain
And I need you more than want you, and I want you for all time
And the Wichita Lineman is still on the line

And I need you more than want you, and I want you for all time
And the Wichita Lineman is still on the line

-Glen Campbell

 
Comment by exeter
2009-06-21 16:16:07

A classic.

 
 
 
Comment by banana republic
2009-06-21 15:31:33

“Gross is a commie, IMO…”

No Ben, he’s a lot worse. And when the Oligarchs stole from Russia what did the Russian government do? They arrested the biggest one. What did we do when our oligarchs robbed us?

Nothing.

When our election was stolen in 2000…what did we do?

Nothing.

What did Iran do recently when the same thing happened to them?

So we should stop slamming commies and admit as a country we have become a global embarrassment.

Comment by ecofeco
2009-06-21 15:50:52

What do you mean we did nothing banana republic? I wouldn’t call giving them even MORE MONEY, “doing nothing”.:lol:

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Comment by Takingbets
2009-06-21 08:03:49

Speaking of vegas, that’s where I’m at right now. Came over here for the weekend and this place is pretty much dead compared to past years. It’s summer vacation time and no people! I have seen LOTS of Chinese people here though. Wish me luck as I will be gambling my last hundred dollars before I head back to reality :-)

Comment by Ben Jones
2009-06-21 08:51:52

‘Wish me luck as I will be gambling my last hundred dollars before I head back to reality’

Here’s a funny story; when we were out there for the HBB meeting this spring, bink had to leave that Saturday night. We were downstairs in the casino and decided to head up to the suite. So bink says he is going to go gamble with his last chip; a couple hundred bucks or something. We get to the elevator to go up and there’s bink standing next to us. As I remember it, he had put down the chip, lost, and joined us before the elevator door could open.

Comment by Don't Know Nothin About Buyin No House
2009-06-21 19:21:19

Funny story

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Comment by sagesse
2009-06-21 19:51:31

This weekend, several hotels (e.g. Las Vegas Hilton) are booked out. The Encore is mid 500’s per night, the Wynn 400, Luxor back to 200 from 60 two weeks ago, MGM 300 from 119 etc. So there must be people. Ten days ago LV Hilton was 39 (direct booking, not from discount site), this weekend last rooms were 450.

I had thought the whole LV concept was dead. Apparently, the bread and circus show is still a draw.

 
Comment by sagesse
2009-06-21 20:09:10

But never mind, tomorrow (monday) prices are down again where they were, lots of rooms in the 20’s (twenties). Maybe this place will NOT reinvent itself again, ever.
The construction for the new Interstate bridge @ Hoover Dam is a sight. The arch is almost completed.

 
 
 
Comment by wmbz
2009-06-21 05:06:36

The Coming Oil Crisis
By Mohammed J. Herzallah | NEWSWEEK
Published Jun 20, 2009
From the magazine issue dated Jun 29, 2009

Canadian economist Jeff Rubin has a somewhat oracular reputation. Since 2000, he has predicted a massive oil-price spike, and he was among the first in 2007 to prophesy that oil would soar over $100 per barrel (a few months later, he said $150 a barrel and was basically proved right again). Now, even though oil has dropped considerably from its peak, Rubin warns that it’s bound to skyrocket once more and cause another, even greater economic crisis. In his new book, Why Your World Is About to Get a Whole Lot Smaller, he lays out how this energy crunch will occur—and why it will spell the end of globalization.

The scenario goes something like this: the ongoing depletion of the world’s oil resources, coupled with soaring demand from emerging economies like India and China, will send the price of crude through the roof, Rubin says. This will seriously escalate transportation costs, which in turn will cripple international trade, reverse commercial interdependence and disable the global economy. The resulting age will be one in which nations are isolated, technological progress is sluggish and travel is infrequent. The Middle East will be less relevant than it is today, and food scarcity will emerge as the foremost international problem. Countries with a shortage of arable land will scramble and compete to buy agricultural real estate from other nations (for example, as Saudi Arabia is already now doing in Sudan) to alleviate their ever-worsening food crises.

Rubin’s future isn’t all bad. To offset the effects of the energy crisis, governments will have to invest heavily in national infrastructure (especially public-transportation systems); national industries once hurt by outsourcing and foreign competition will thrive; and the environment will become cleaner as people are forced to use less fossil fuel and as cars disappear from the streets. But Rubin warns that governments can do only so much—successful adaptation to an energy-starved world will largely depend on individuals altering their energy-consumption norms. Still, he is willing to bet that people will make the right choices. All in all, he says, “don’t be surprised if the new, smaller world that emerges isn’t a lot more liveable and enjoyable than the one we are about to leave behind.”

Rubin’s argument is powerful. There’s no denying that the international economy has become critically dependent on oil as its main source for energy. Yet, like other believers in the “peak oil” theory, he falls into the trap of underestimating society’s capacity to meet future fuel challenges through innovation and conservation. The story of energy over the past century has been one of breakthroughs, not retreat—so although the energy problems we face today should be a cause for concern, global integration will continue to deepen and the world is not likely to get smaller any time soon.

Comment by Carlos Cisco
2009-06-21 05:29:21

Should his prognostications come to pass (Im not convinced that they will), you’d be looking at a global die off of at least 50 percent. Any wonder just how “enjoyable” that world will be??

Comment by palmetto
2009-06-21 05:59:20

The die-off wouldn’t be enjoyable, but over-population with respect to availabe resources is no picnic, either.

 
 
Comment by Hwy50ina49Dodge
2009-06-21 06:42:10

“Rubin’s argument is powerful…The scenario goes something like this:” ;-)

He’s too early, thinking to short term…the history Channel has it more right:

Life After People! :-)

“There was but the sun and the eye from the first” Thoreau

 
Comment by whyoung
2009-06-21 06:54:42

Rising energy costs could have an impact on re-industrialization… a friend who works in the furniture industry told me that last year, near the gas price peak, one of their textile suppliers re-opened an old mill in the south because - briefly - the manufacturing costs were competitive with imports.

And yea, I know you still have to have energy to run the factory no matter where it is in the world, but the “locavore” idea of consuming things that come from nearby does give me something to think about for things beyond food.

 
Comment by measton
2009-06-21 07:16:52

I thought your post from yesterday said we had more oil than we knew what to do with in North Dakota.

Just bought an electric car so I’ll be able to avoid the gas lines.

Comment by varelse
2009-06-21 11:30:03

I think it’s natural gas, not oil that ND has in abundance.

Comment by ButImNotDeadYet
2009-06-21 22:29:45

Bakken Oil formation, with about 4 billion barrels of oil (in North Dakota). At U.S. consumption of 20 million barrels a day, that pencils out to only about half a year’s worth of consumption…

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Comment by Bill in Los Angeles
2009-06-21 09:00:43

Individuals and cities are gearing up for this. Light rail in L.A., people buying smart cars and prious cars or merely living close enough to walk to work.

Or check out Phoenix and its light rail. In 2012 you will be able to take a light rail train from west Mesa to the 44th and Washington station and transfer to an air conditioned train system that goes to the Phoenix Sky harbor terminals. In essence, people living and working along the light rail corridor, including ASU, Tempe, downtown Phoenix (with its Chase Field ballpark) and the skyHarbor airport will have little reason for using a car. Occasional night out in North Scottsdale? Take a cab.

 
Comment by tresho
2009-06-21 12:47:00

Rubin’s scenario seems the same as James Kunstler’s “Long Emergency.”
[Sharply higher oil prices, never mind 'depletion' of world oil reserves] will seriously escalate transportation costs, which in turn will cripple international trade, reverse commercial interdependence and disable the global economy. At the very least, international trade will decrease as costs of transport and travel increase.

The resulting age will be one in which nations are isolated, technological progress is sluggish and travel is infrequent. Nations will still be able to communicate with each other. Tech progress that depends on cheap & abundant energy will be sluggish, but there are other avenues of economic development that can be pursued. Far fewer people will travel 1000’s of miles on a regular basis, but there will still be international travel as long as waterways are open. Fuel for sailing ships will continue to be quite cheap.

The Middle East will be less relevant That’s a feature, not a bug. A great blessing for the rest of the world, in fact. 9/11 would not have happened but for the world’s dependence on oil from the Middle East.

food scarcity will emerge as the foremost international problem. Countries with a shortage of arable land will scramble and compete to buy agricultural real estate from other nations Buying real estate for cultivation only makes sense in areas of the world close to each other. The very nature of ‘international problems’ has to change as international transport becomes expensive & difficult.

To offset the effects of the energy crisis, governments will have to invest heavily in national infrastructure (especially public-transportation systems); This is the last thing the USA will do and by the time it gets around to it, the investment will be extremely expensive & hard to carry out.
national industries once hurt by outsourcing and foreign competition will thrive; Some industries. I see a poor future for the auto, air transport, and tourism industries. Food production will have to change immensely.

the environment will become cleaner as unemployment skyrockets and people freeze in the winter, die of heat stroke in the summer, and/or starve. Few mention what might happen when flood levees, water & sewage treatment plants, etc. have trouble getting enough energy & resources for operations & repairs.

But Rubin warns that governments can do only so much—successful adaptation to an energy-starved world will largely depend on individuals altering their energy-consumption norms. Nope, I think governments (at this point) can do a great deal to mitigate future damage. However, the US government has abdicated its responsibility in this matter & shows no sign of changing this stance. The question is not one of an energy-starved world, after all, we all have a local free source of fusion power, just 8 minutes from here. The question is how much the world has to pay for its energy, and what sort of economy will be possible. I suppose if everyone stopped buying useless fripperies in the US, its energy-consumption would fall, but retailers would collapse en masse and the economy would move even further in reverse.

he falls into the trap of underestimating society’s capacity to meet future fuel challenges through innovation and conservation. The story of energy over the past century has been one of breakthroughs So, nothing to see here, folks, just keep moving and ignore the writing on the wall, something about “Past performance is not indicative of…” Where’s the remote?

 
 
Comment by Carlos Cisco
2009-06-21 05:08:25

Strange feeling here in N Ohio. Price of gas falling, lowest in the 2.50’s(opposite of last year), no real construction going on ( one house framed this year in at the next door development, only 23 more lots to go), increasing number of for lease /available signs, everywhere. !500 laid off steelworkers seem resigned to the fact that they wont be going back to work for many months, if ever. Cities with closed GM and Chrysler plants show no sign of increased cutbacks, layoffs or adjustment in services. Stores are less crowded (really no crowds), most big box stores have only one maybe two check out registers open. Real estate sales ads just as positive ever, talking up the stimulus $$ and low interest ( GF’s neighbor foreclosed, $100, now getting evicted) for “those who want to live cheaper than rent”. People seem beat down, resigned to whats happened. Strange feeling, unlike any of the last 6 or 7 recessions Ive lived through. Will I live through this one?

Comment by az_lender
2009-06-21 05:14:05

“Will I live through this one?”

– How old are you, Carlos?

Comment by Carlos Cisco
2009-06-21 05:30:59

Nearin’ SS age !! Can I depend on it??

Comment by scdave
2009-06-21 07:25:48

Can I depend on it ??

Only if you don’t have much to begin with IMO….Means testing to qualify is coming I think…Ditto for Medicare/Medicaid…

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Comment by palmetto
2009-06-21 06:28:59

“it will spell the end of globalization.”

Palmy does the happy dance.

 
 
Comment by Michael Fink
2009-06-21 05:15:33

Kendra Todd accused of fraud:

http://tinyurl.com/n632ss

Actually, this case sounds pretty weak, sounds to me like everyone here is probably guilty of something, but not much to prove it. However, I continue to hope that the stupid show on TV where people buy 5K worth of appliances and then are told that they “increased the value of their home by 15K!!!” will go away, and will go away very soon. So, hopefully they will at least start to charge some of these morons with something, anything to give them less time in front of the camera spewing gawd-awful investment advice!

 
Comment by jess
2009-06-21 05:21:37

this recession is just started.I don’t believe the hype,that it’s coming back soon.Maybe in 3 years.

Comment by Carlos Cisco
2009-06-21 05:32:23

5 year recession…. do you know what those are called??

Comment by Professor Bear
2009-06-21 08:16:12

Stop trying to depress us!

 
 
 
Comment by FB wants a do over
2009-06-21 06:05:32

Down here at pawn shop. Yop Yop.

Comment by Muggy
2009-06-21 06:48:05

doo-doo duh-duh, doo-doo duh-duh, dum-dum doo-duh (skwang skwang)

Comment by FB wants a do over
2009-06-21 07:26:02

but just remember that it’s flesh and bone

 
 
 
Comment by Bad Chile
2009-06-21 06:11:08

I can’t believe I missed this:

Real Estate Intervention (HGTV 11.00pm Sunday)

Summary of a Review
On the show’s first episode (which aired last Sunday), a couple in Baltimore refused to take Aubrey’s advice at every turn. Apparently blind to the fact that their house had all of the charm and style of an ’80s-era condo (and a cramped one at that), the couple seemed at first perplexed, then downright angered by the suggestion that their house was less desirable than houses priced much lower in the same area. Aubrey insisted that they wouldn’t sell their house until they lowered their price by $20K. In the end, the couple opted to rent out their place — at a monthly loss — instead. Aubrey told the camera that he felt sure that he’d helped the couple, but something deep inside him must’ve been screaming “I’ve failed again! Damn me!”

Comment by combotechie
2009-06-21 06:26:29

“I’ve failed again! Damn me!”

Not to worry, Mr Market will flog them with some reality.

 
Comment by polly
2009-06-21 07:30:13

The couple in my office who bought an investment condo (Northern Virginia, right near a metro stop) and are renting it at a fairly large loss seem to fight a lot more these days than they used to. I think maybe they lost their tennant. He once told me that I needed to invest in real estate because of the leverage. As near as I can tell, she has left their investment strategy entirely to him for years if not decades.

It isn’t going to break them, but I predict she is going to end up working a few years more than she wanted to at the rate they are going.

 
 
Comment by Muggy
2009-06-21 06:12:09

Happy Father’s Day!

Comment by Hwy50ina49Dodge
2009-06-21 06:46:35

Did Shakespeare ever right a line about the pitter patter of little feet, waking papa from his Sunday morning slumber? :-)

Comment by Professor Bear
2009-06-21 11:16:26

But of course!

Sonnet IX

Is it for fear to wet a widow’s eye,
That thou consum’st thy self in single life?
Ah! if thou issueless shalt hap to die,
The world will wail thee like a makeless wife;
The world will be thy widow and still weep
That thou no form of thee hast left behind,
When every private widow well may keep
By children’s eyes, her husband’s shape in mind:
Look what an unthrift in the world doth spend
Shifts but his place, for still the world enjoys it;
But beauty’s waste hath in the world an end,
And kept unused the user so destroys it.
No love toward others in that bosom sits
That on himself such murd’rous shame commits.

– William Shakespeare –

Comment by Professor Bear
2009-06-21 13:15:21

P.S. My lovely wife and I attended the Balboa Park Old Globe Theater production of Coriolanus last night. I could not help but think of many posts here when the Roman commoners appeared on stage with pitch forks in hand to protest the high price of corn.

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Comment by B. Durbin
2009-06-21 15:41:30

That’s a lot nicer way to say, “You’re cute; make sure you have kids so your good looks don’t die with you.” :D

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Comment by Professor Bear
2009-06-21 16:20:10

This was a huge theme for Shakespeare. Many of the Sonnets say the same thing in beautifully diverse ways. I sent one of these to a beloved friend many years ago after learning she intended to never have children. Two beautiful children and many years later, I cherish the memory of my successful subterfuge.

 
 
 
 
Comment by polly
2009-06-21 07:31:23

Happy father’s day to all the HBB dad’s!

 
Comment by FB wants a do over
2009-06-21 07:35:36

Hard to believe Father’s day was signed into law by Nixon.

The story of how Father’s Day came to be is still pretty interesting. A blog from a Detroit church explains that most historians credit a woman named Sonora Smart Dodd with creating the holiday. Ms. Smart Dodd was “inspired by her father, a widower and Civil War veteran named William Jackson Smart.” She wanted to do something to honor his memory while paying respect to all fathers.

Clearly she was a woman with a plan. Alas, not everybody agreed with her pleas to “give it up for the papas” (our words, not hers). In fact, Ms. Smart Dodd’s proposal was often mocked when it first made the rounds. Folks felt it unnecessary. And the all-male United States Congress felt that having a holiday for fathers might look like they were trying to give themselves “a pat on the back.”

Additionally, many just plain didn’t want the holiday. An article from Inspiration Line explains that, according to an article in The Spokesman-Review, “one group of men conventioneers laughed and said they didn’t want a Father’s Day. A National Fishing Day would be better, they told her.”

Though many scoffed, the holiday was eventually accepted. In 1910, the first local Father’s Day was held. It wasn’t until 1924 that President Calvin Coolidge “made it a national event.” Then, in 1966, President Johnson signed a proclamation declaring the third Sunday of June as Father’s Day. President Nixon made it law in 1972.

It’s hard to imagine a time when the idea of Father’s Day was mocked and dismissed as ridiculous. If it weren’t for the tenacity of a grateful daughter, it may never have come to pass.

Comment by NYCityBoy
2009-06-21 08:34:57

Father’s Day started in Detroit? That’s pretty ironic. I’m guessing Father’s Day is a pretty confusing day in Detroit.

Comment by Cassandra
2009-06-21 09:42:15

NYCityBoy: Please stop. I’m laughing so hard I’m going to need medical treatment.

In an a (failed) attempt to stay on topic, does my medical insurance cover this?

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Comment by B. Durbin
2009-06-21 15:43:26

Spokane, NYCityBoy.

AKA “Spo-Vegas”, “Spokaloo”, and “resting on the laurels of Expo ‘74″.

I went to school there. :D

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Comment by Eudemon
2009-06-21 19:00:58

LOL!

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Comment by jeff saturday
2009-06-21 06:18:11

A. At the height of the Depression in 1933, 24.9% of the total work force or 11,385,000 people, were unemployed. Although farmers themselves technically were not unemployed, drastic drops in farm commodity prices resulted in farmers losing their lands and homes to foreclosure.

Number of people receiving unemployment benefits jumps to all-time high
by syracuse.com Thursday February 19, 2009, 9:38 AM

The number of unemployed workers receiving unemployment benefits jumped to an all-time high near 5 million earlier this month, while new jobless claims remain well above 600,000. Both figures were worse than expected and new projections from the Federal Reserve show unemployment rising for the rest of this year.

Many of the jobless get no unemployment benefits

By Barbara Hagenbaugh, USA TODAY. While 13.2 million people were unemployed in March, approximately 5.8 million were collecting unemployment benefits at the end of the month, double the number from a year ago, the government said Thursday. That means less than half of those who were out of work and were actively trying to find a new job were receiving unemployment benefits.

Comment by measton
2009-06-21 07:19:12

By Barbara Hagenbaugh, USA TODAY. While 13.2 million people were unemployed in March, approximately 5.8 million were collecting unemployment benefits at the end of the month, double the number from a year ago, the government said Thursday. That means less than half of those who were out of work and were actively trying to find a new job were receiving unemployment benefits.

Yes but didn’t you hear unemployment is down, the MSM said it.

Comment by ecofeco
2009-06-21 16:04:55

No inflation either!

Hurrah! We’re saved!

Comment by Silverback1011
2009-06-22 03:53:32

Just bought more silver last week !

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Comment by measton
2009-06-21 07:25:32

6 States Hitting Residents With Big Tax Hikes

California is facing the biggest budget deficit in the nation, yet voters’ willingness to chip in is starting to wane. Last month, they voted down five ballot measures that included sales and income tax increases. Who could blame them? At 11%, California has one of the worst unemployment rates in the country, the housing market has been decimated, and the state already raised taxes on sales by 1% to 8.25% and income by 0.25% (both of which expire in 2011). Gov. Arnold Schwarzenegger’s latest budget plan includes steep spending cuts across the government and cutbacks in social services

New York State Gov. David Paterson may have been unsuccessful in levying an 18% tax on soda and other sugary drinks in the name of combating obesity, but he’s had a hand in raising taxes on plenty of other “sinful” items, including tobacco (up to 46% from 37%) and wine (up 58% per gallon, or about two cents more per bottle).

For those living in New York, all those tax hikes can really add up. Second only to New Jersey, New Yorkers bear the second-highest tax burden thanks to a high income-tax rate of 7.85% (for those earning more than $200,000). And property and gas taxes are among the highest in the nation, according to the Tax Foundation. Nevertheless, shoppers can rejoice: The sales tax here remains relatively low at just 4%

Florida passed its budget in May with a not-so-pleasant surprise for smokers: a $1-per-pack hike (the first such increase in 19 years). Motorists also got hit with higher fees to renew a license or register a vehicle. It could have been worse, though. Senate lawmakers had proposed eliminating the sales tax exemption on items like bottled water and tickets to sporting events, both of which didn’t make the cut.

Massachusetts
The most hard-hitting for residents is a proposed increase in the sales tax to 6.25% from 5%. Both the House and Senate approved the measure and it’s looking likely the increase will pass by the July 1 deadline, says Noah Berger, executive director of the Massachusetts Budget and Policy Center, an independent research group. Satellite TV subscribers may also get hit. The state is proposing a 5% sales tax on satellite services. Providers, of course, are fighting the tax.

AZ
During the boom, construction accounted for at least a quarter of new jobs created. Since home prices have fallen 43% from their peak, the construction industry has lost tens of thousands of jobs, says McPheters. Arizona’s unemployment rate in April was 7.7%, shy of the 8.9% national average. Furlows for state employees.

Nevada used to be able to afford being so generous with its residents. Revenue from tourism and gambling supported the state just fine. But now, as consumers would rather put their coins in a bank account than a slot machine, that revenue source is drying up. In fact, the state boasts the dubious honor of having the largest deficit in the country as a percentage of its budget – 32%. It’s hiked the sales tax by 0.35% to 6.85% and taxes on hotel rooms are up 3%. It’s even gambling with its business-friendly climate by raising taxes on businesses.

If Gov. Janice Brewer gets her way, residents will pay for the state’s problems by shelling out an extra 1% at the cash register. The proposed sales-tax hike, which would bring the rate to 6.6%, was omitted from the budget the legislature passed this month, but the governor may veto the budget until it’s put back in

FED pumping money into wallstreet while states and future inflation to take it away from mainstreet.

finance.yahoo.com/taxes/article/107205/6-states-hitting-residents-big-tax-hikes.html?mod=taxes-advice_strategy

Comment by Professor Bear
2009-06-21 07:56:01

“New York State Gov. David Paterson may have been unsuccessful in levying an 18% tax on soda and other sugary drinks in the name of combating obesity,…”

That is unfortunate, as obesity is a condition which imposes large medical cost externalities on other citizens. This is one case where taxing an activity actually could serve the greater good, for both the obese and those who get to share their medical expenses.

Comment by NYCityBoy
2009-06-21 08:30:37

Professor Bear, we are on completely opposite sides on this one. The idea that the government can social engineer a better society through soda pop is just ridiculous. What comes next? Where does the slippery slope end? I might agree with taxes on alcohol and tobacco, to some extent, but taxing Mountain Dew for the greater good? Give me a break. And just think of all the corruption that comes into this one. Diet drink makers would be lobbying for ever higher taxes. Does Vitamin Water get a pass?

It is one thing to tax ALL cigarettes but just imagine if they said, “we are only going to tax Newport at this time”. Heck, you could probably even stir racial battles with some of this nonsense. Next thing they will be taxing only beers with more than 173.2 calories per 12 ounce serving. Then we will find out that the tax legislation was drafted by a lobbyist representing a beer company that produces a beer that has 173.1 calories per 12 ounce serving.

Have you seen some of the land whales that come waddling out of the New York City subway system? Greenpeace should be on the case. These mountains of matriculating mass are beyond any benefit from turning that Coca Cola Classic into a Diet Coke. That Diet Coke, used to wash down 4 Big Macs and a super-sized fry just might not be the straw that broke the camel’s back.

I am shocked that anybody would think Paterson’s stupidity on this issue is acceptable. I don’t mean to flame out on my old buddy The Professor. Feel lucky. When this idiotic idea was first announced I was much more animated about this subject. I would already have had 15 effenheimers out by now.

Lastly, as my trust in our elected officials continues to plumb the depths the last thing I want is for them to have even more control over my life. I have a taxation idea. Let’s quadruple the tax on all braille books and all seeing eye dogs. How would you like that one, Governor Paterson?

Comment by SV guy
2009-06-21 08:53:15

“Have you seen some of the land whales that come waddling out of the New York City subway system?”

You know you’re fat when you go to the beach to sunbathe and the people try to push you back in the water.

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Comment by Bill in Los Angeles
2009-06-21 10:25:00

Nice, but those land whales will be the ones receiving the bennies from socialist health care while us idiots who worked our behinds off at the gyms all our adult lives will be paying more than receiving.

Socialist health care is unfair to responsible people every where it’s implemented and encourages irresponsibility.

 
Comment by ecofeco
2009-06-21 16:09:10

Yeah and our current system is working just fine! No obese people eating junk food here in a nation that leads the world in obesity! No siree!

Oh wait…

 
Comment by Eudemon
2009-06-21 19:10:03

“Nice, but those land whales will be the ones receiving the bennies from socialist health care while us idiots who worked our behinds off at the gyms all our adult lives will be paying more than receiving.”

I dunno about that, Bill in LA.

Does the cost of paying for the obese outweigh (ha!) the cost of innumerable hip and knee replacements/surgeries required by rapidly aging exercise fanatics?

Many of the obese simply drop dead and are removed from the system before Social Security bennies kick in or shortly thereafter.

 
 
Comment by Professor Bear
2009-06-21 10:40:01

“Greenpeace should be on the case. These mountains of matriculating mass are beyond any benefit from turning that Coca Cola Classic into a Diet Coke.”

OMG, thank you for tickling my funny bone! Your hatred of this idea is far more intense than my love — in fact, I have no hatred or love for it. I just see this as one of various alternative means to help correct a system which requires me to subsidize someone else’s bad eating and exercise habits. It would be far better if private health insurers charged an obesity premium which reflected higher expected medical costs for those who do not balance their caloric intake against their metabolism’s caloric usage, but I don’t expect insurance companies to tackle this politically incorrect adjustment to their underwriting practices any time soon.

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Comment by Professor Bear
2009-06-21 11:21:04

P.S. I have nothing personal against anyone who chooses to maintain an unhealthy weight, so long as I don’t have to pay “too-big-to-fail” insurance subsidies to cover their above-average medical bills.

 
Comment by hip in zilker
2009-06-21 11:26:03

Actually, we just helped a nephew find a health insurance policy; he ended up with AETNA. His premium was raised 25% above his base premium, for two reasons :

history of tobacco use
BMI of 29

I don’t know if it was 12.5% for each, or if they have percentage rates that reflect a compound effect of multiple bad habits. My guess is the former.

If his BMI were high because he was solid muscle, we would have protested and I presume could have gotten a physician exam to determine. But he’s a pudgy and not very physically active junk food eater.

He doesn’t like to go to the gym or walk or cycle, but he doesn’t mind working physically, so we’re going to put him to work.

 
Comment by ET-Chicago
2009-06-21 11:44:49

I just see this as one of various alternative means to help correct a system which requires me to subsidize someone else’s bad eating and exercise habits.

Part of the problem, too, is that the health industrial complex is not geared toward preventative care at all — helping the people in question realize that a sedentary life eating processed, high-fat, high-sugar food all the time is a health issue, for example. No, they’d rather recommend cholesterol pills and weight loss pills and various magical surgeries instead of “Stop eating Double Whoppers and Twinkies all the time, buy some fresh fruit, and for christsake, walk a little!”

 
Comment by Professor Bear
2009-06-21 12:29:57

“…health industrial complex is not geared toward preventative care at all…”

How would preventive care play into keeping health care industrial complex’s perpetual money machine well oiled? Government-subsidized obesity is a good tool for keeping a steady stream of customers with supersized health problems flowing into the health care industrial complex’s clutches, which is good for the financial health of big pharma, big insurance and the AMA.

 
Comment by ET-Chicago
2009-06-21 12:44:30

Government-subsidized obesity is a good tool for keeping a steady stream of customers with supersized health problems flowing into the health care industrial complex’s clutches, which is good for the financial health of big pharma, big insurance and the AMA.

Exactly.

As a whole, the current mechanism clearly does not operate in a manner beneficial to the general population, though there are many individual healthcare providers doing a good job.

 
Comment by ET-Chicago
2009-06-21 12:52:52

Professor, you may be interested in this recent article in the New Yorker, which examines two towns with similar demographics (McAllen and El Paso, TX) and vastly different healthcare expenditures (and how this spending disparity possibly happened):

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande

 
Comment by hip in zilker
2009-06-21 15:31:41

Fresh Air interview with the author of that article, Dr. Atul Gawande:

http://www.npr.org/templates/story/story.php?storyId=105483669

The interview is worth a listen even if you’ve read the article. I listened to the podcast yesterday while driving.

 
Comment by B. Durbin
2009-06-21 15:55:05

There’s a simpler way of making sodas “healthier”– cut the corn subsidies. Once those are gone, cane sugar becomes more cost-effective, and high fructose corn syrup is less so.

Why does this matter? Well, in studies they’ve done with comparable levels of cane sugar and HFCS, the latter has more adverse health effects, including increased belly fat AND more of a sweet tooth (the surmise being that HFCS stimulates the longing but does not fulfill it.)

Weird stuff. I expect HFCS to be the next bugaboo after trans fat. But really, it’s simple. We don’t need the corn subsidies, which date to WWII. We should cut them and look at ethanol from other sources, and sweeteners from healthier places.

(P.S. I have a friend who has an “obese” BMI but who also had a bone density survey done and calculated that the only way he could get his BMI below 25 was to starve to death or remove vital organs. BMI is not a useful measurement and it sucks that insurance use that instead of a competent health assessment.)

 
 
Comment by robin
2009-06-22 01:33:15

Just tax high-fructose corn syrup, the main ingredient of the 80% made-in-China ingredients of products found in 99 Cent Stores as well as most soft drinks. Read labels. Scary.

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Comment by gather no moss
2009-06-21 18:06:19

Not to mention the fact that you can buy soda with food stamps, you only need to pay the sales tax in cash.

Also, from the article, 4% is only the state portion of the sales tax, the county tacks on at least another 4%.

Property taxes in NY are insane.

 
 
Comment by Professor Bear
2009-06-21 08:02:19

“FED pumping money into wallstreet while states and future inflation to take it away from mainstreet.”

Could the states somehow restructure themselves to qualify as banks, in order to qualify for ZIRP financing from the Fed?

Comment by iftheshoefits
2009-06-21 08:55:10

“Could the states somehow restructure themselves to qualify as banks…”

Well, most state policians apparently view their own state as an ATM machine. Shouldn’t be too large of a step from there.

Comment by Professor Bear
2009-06-21 10:41:49

They have to consider what it would take to get their own printing presses, as apparently the Fed’s printing press works quite well for Wall Street banks, but not so much for state government operations.

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Comment by Bill in Los Angeles
2009-06-21 08:10:49

Gov. Brewer is the governor of Arizona, not Nevada, as the context in the sequence of paragraphs seems to imply.

 
 
Comment by jeff saturday
2009-06-21 07:38:51

Sounds familiar

“il duce”

Benito MUSSOLINI

Fascist Dictator of Italy 1922-1943

BENITO MUSSOLINI, (1883-1945), Fascist dictator of Italy from 1922 to 1943. He centralized all power in himself as the leader (il duce) of the Fascist party and attempted to create an Italian empire, ultimately in alliance with HITLER’s Germany. The defeat of Italian arms in World War 2 brought an end to his imperial dream and led to his downfall.
Mussolini was born in Predappio, near Forli, in Romagna, on July 29, 1883. His father, Alessandro, was a blacksmith, and his mother, Rosa, was a schoolteacher. Like his father, Benito became a fervent socialist.

1923

Fascist Dictatorship

At first he was supported by the Liberals in parliament. With their help he introduced strict censorship and altered the methods of election so that in 1925-1926 he was able to assume dictatorial powers and dissolve all other political parties. Skillfully using his absolute control over the press, he gradually built up the legend of the “Duce, a man who was always right and could solve all the problems of politics and economics. Italy was soon a police state. With those who tried to resist him, for example the Socialist Giacomo Matteotti, he showed himself utterly ruthless. But Mussolini’s skill in propaganda was such that he had surprisingly little opposition.

At various times after 1922, Mussolini personally took over the ministries of the interior, of foreign affairs, of the colonies, of the corporations, of the army and the other armed services, and of public works. Sometimes he held as many as seven departments simultaneously, as well as the premiership. He was also head of the all-powerful Fascist party (formed in 1921) and the armed Fascist militia. In this way he succeeded in keeping power in his own hands and preventing the emergence of any rival. But it was at the price of creating a regime that was overcentralized, inefficient, and corrupt.

Most of his time was spent on propaganda, whether at home or abroad, and here his training as a journalist was invaluable. Press, radio, education, films–all were carefully supervised to manufacture the illusion that fascism was “the doctrine of the 20th century that was replacing liberalism and democracy. The principles of this doctrine were laid down in the article on fascism, reputedly written by himself, that appeared in 1932 in the Enciclopedia Italiana. In 1929 a concordat with the Vatican was signed, by which the Italian state was at last recognized by the Roman Catholic Church.

Under the dictatorship the parliamentary system was virtually abolished. The law codes were rewritten. All teachers in schools and universities had to swear an oath to defend the Fascist regime. Newspaper editors were all personally chosen by Mussolini himself, and no one could practice journalism who did not possess a certificate of approval from the Fascist party. The trade unions were also deprived of any independence and were integrated into what was called the “corporative system. The aim (never completely achieved) was to place all Italians in various professional organizations or “corporations, all of them under governmental control.

Mussolini played up to his financial backers at first by transferring a number of industries from public to private ownership. But by the 1930’s he had begun moving back to the opposite extreme of rigid governmental control of industry. A great deal of money was spent on public works. But the economy suffered from his exaggerated attempt to make Italy self-sufficient. There was too much concentration on heavy industry, for which Italy lacked the resources.

Comment by palmetto
2009-06-21 09:17:17

Interesting article in Vanity Fair on the administration’s hold on the media.

http://www.vanityfair.com/politics/features/2009/07/wolff200907

Somehow I don’t quite see the prezzy morphing into Idi Obama, but then stranger things have happened.

Comment by DennisN
2009-06-21 09:37:26

More like Franklin Delanobama.

Comment by Blue Skye
2009-06-21 20:30:08

In his dreams. More likely: Herbert Hoobama.

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Comment by Bill in Los Angeles
2009-06-21 10:36:27

To be implemented quickly, Fascism requires nationalism and patriotism. some collective goal. We are far from that.

 
Comment by exeter
2009-06-21 18:16:07

Exactly Bill. Talk about a misinformed article and reader.

 
 
Comment by CarrieAnn
2009-06-21 07:48:20

NY: “The sales tax here remains relatively low at just 4%”

That point is misleading because it doesn’t talk about the county’s tax on that exact same purchase. The tax burden on the consumer between the two is often double that.

Onondaga Cty is at 8% right now.

Comment by NYCityBoy
2009-06-21 08:37:11

And New York City is about 9%. Sales tax is a painless tax just like punching someone in the dark is a victimless crime.

 
Comment by exeter
2009-06-21 18:13:22

8 and 1/4 in Dutchess but that’s nothing. The property taxes in this state are mind numbing. The last time I looked, Onandaga’s property taxes were beyond comprehension.

 
 
Comment by FB wants a do over
2009-06-21 07:53:22

Seeking Alpha

Worst Housing Number in Decades: What Is the Wall Street Media Smoking?

The housing numbers are as bad as they could possibly be. They show year-over- year housing starts to be down by 45.2% from May 2008. I cannot recall the numbers, but, if memory serves me, this decline is of the same magnitude as the housing decline which occured during the Great Depression of the 1930s.

Housing sales always are greater in April than in February. Furthermore, people almost always buy more houses in May than in April. The fact that they repeated that pattern in 2009 is not surprising. It’s been happening since the days of the Roman Republic.

The real news is that housing starts are deeply down year over year. On top of that, we must consider that fact that 2008’s numbers are way down from 2007, and 2007’s numbers were way down from 2006. Housing starts in May, 2006 were running at a seasonally adjusted annual rate of 1,957,000 (www.census.gov/const/newresconst_200605.pdf). In other words, since the height of the housing market, housing starts have fallen so deeply that they amount to only 27% of what they were 4 years ago. That is very bad news and it justifies a deeply downward move on the stock market. Frankly, it is surprising that the DOW and S&P 500 didn’t fall a lot lower than they did.

However, forget about all the doom and gloom of reality! Enter the Wall Street spinmeisters. Don’t bother them with reality. Here is the fantasy…

Bloomberg writes: “Housing starts jumped 17.2% to a seasonally adjusted annual rate of 532,000 units in May, up from April’s figure of 454,000…”[i]

Marketwatch wrote:“Housing starts bounced back with a vengeance in May, rising 17.2% to a rate of 532,000 on a seasonally adjusted annual basis”[ii]

No, I am not making that up. I’ve given you the citation and you can read it for yourself. As ridiculously stupid as that is, they really did write “…bounced back with a vengeance…”.

But, no one beats Wall Street’s big bank analysts at the exceptional skill of being out of touch with reality.

Zach Pandl at Nomura Securities in New York, for example, explained: “This (housing) starts report is actually very encouraging…”[iii]

What kind of weed are these people smoking?

This is a horrible economic news week so far. To add to the bad housing numbers, the Federal Reserve reported that industrial production fell 1.1% in May from April and, in an unusual twist, admitted that this news was “worse than expected.” Six Flags, which owes billions of dollars to its creditors, has filed bankruptcy. Extended Stay Motel chain, which owes billions more, joined them in bankruptcy court.

The most frightening thing is that this is probably only a first taste of things to come. The green shoots are becoming impossible to find, if there ever were any.

Comment by Professor Bear
2009-06-21 07:57:42

“What Is the Wall Street Media Smoking?”

Maybe them green shoots were cannabis?

 
Comment by Professor Bear
2009-06-21 07:59:11

‘…in an unusual twist, admitted that this news was “worse than expected.”’

Unusual? As I have recently noted, almost all economic data releases these days are ‘worse than expected.’

 
Comment by Bill in Los Angeles
2009-06-21 08:04:07

I list among my “favorites” a web site of lofts and condos in Phoenix, Las Vegas, San Diego, and Denver. I found some condos in gated communities in Vegas are for sale in the $70s per square foot. About 1400 square feet.

This morning in my e-mail my Phoenix zip realtor sent me a listing of an Anthem (north of Phoenix) condo. Three bedrooms, three baths, 1515 square feet for $129,000 …”as is.” Gated community.

Perhaps LV and Phoenix prices will bottom before Orange County beach cities and Los Angeles beach cities?

Sometimes I get tempted. Especially since I’m near a point of where I have to renew my Phoenix apartment lease. But then I also am thinking about converting my traditional IRAs to Roth’s in 2010…

Comment by Professor Bear
2009-06-21 08:11:00

“…in the $70s per square foot.”

I am not whatsoever interested in real estate investing as an individual (too risky), but might consider getting into REITs that take a value-oriented approach over the next decade or so, as the housing market tries to find a bottom. Can anyone suggest ideas on how to identify these?

 
Comment by Don't Know Nothin About Buyin No House
2009-06-21 10:34:33

There are a few newer downtown high rise condo’s in San Jose that are not far from “can’t give them away” reality. False introductory low HOA fees to try to get inventory down will need to rise soon for those unlucky residents. Add to that property taxes and the special assessments that plague every property sooner or later and it is a pretty grim scenario.

 
 
 
Comment by FB wants a do over
2009-06-21 08:01:10

Commercial Real Estate Loans Mature - Bigger Problems Arise

The problem is about to get very, very big: Between now and 2011, as much as $814 billion in commercial real estate loans will mature - and need to be refinanced. The problem is that the credit markets are still too tight for most commercial projects.

Most banks have tightened their lending standards, reduced the amount they are willing to lend and significantly reduced the value of the collateral (malls). This leaves many owners with little choice but to turn to the Feds.

Back in May - and with much fanfare - the Federal government announced it would soon be expanding its Term Asset-Backed Securities Loan Facility (TALF). It now plans to include existing securities backed by loans for apartment buildings, office complexes, shopping centers and other commercial property.

But these programs aren’t an industry panacea. If you read the fine print, they provide backing only if the securities are rated AAA by major rating agencies. This excludes just about all the needy real estate - and the REITs that own it - from participating in the program.

Comment by Professor Bear
2009-06-21 08:08:23

“Term Asset-Backed Securities Loan Facility (TALF)”

Is there an alphabet soup lending facility for state governments to tap into zero interest rate financing? If not, why? How come the Wall Street folks on the supply side of the disaster get to borrow at zero percent interest while the demand side (consumers, state and local governments, etc) get the shaft? Perhaps Elizabeth Warren’s new consumer watchdog agency could ponder the fairness of letting our nonelected Fed officials decide who gets interest free loans, while many taxpaying American citizens who had nothing to do with creating the financial disaster at hand get nothing but pink slips and no loans whatever due to the bad FICO scores that accompany unemployment.

 
Comment by NYCityBoy
2009-06-21 08:13:45

This excludes just about all the needy real estate - and the REITs that own it - from participating in the program.

Thank god. Too bad this will only be temporary. As we have seen, when it comes to robbing and pillaging, the Fed and Treasury are very flexible.

 
 
Comment by Michael Fink
Comment by NYCityBoy
2009-06-21 08:16:07

If this were a capital case I would pay $25,000 for the right to be the foreman on that jury. Have you ever seen the movie Twelve Angry Men? I would be all 12 of those men wrapped up into one neat package. There is only one verdict that would come out of that deliberation room.

Comment by Olympiagal
2009-06-21 16:07:22

I would be all 12 of those men wrapped up into one neat package.

Really? Nohow!
*giggle *

(PS. That there’s what I like to call ’sarcasm’. :) )

 
 
 
Comment by Kim
2009-06-21 08:28:06

Sotheby’s Realty has an ad in the Chicago Tribune today for a house on Magnolia in Chicago. Its an “urban retreat on a 34′ wide lot”. Asking price: $3,995,000.

I guess the agents were honest… It really is “unlike anything you’ve seen before!”. At least I’ve never seen a price tag that high for a house on a 34′ lot.

Comment by ecofeco
2009-06-21 16:28:15

My 2 car garage is bigger than that. :lol:

 
 
Comment by Professor Bear
2009-06-21 08:32:22

May 2009 DataQuick price per square foot numbers for North County San Diego zip codes show a lot of air has leaked out of the balloon, though there still seems to be a bit of froth in those prices (sorry about the cluttered format!). Overall, the North County single family residence PPSF has dropped from $234 to $180, for a year-on-year decline of 22.91 percent. Here are the PPSF numbers for SFRs by zip code:

No Sold (5/09) 08 PPSF 09 PPSF Change
North County Inland 596 $234 $180 -22.91%
Bonsall 92003 5 $195 $201 3.41%
Borrego Spr. 92004 6 $184 $117 -36.16%
Escondido S 92025 33 $208 $150 -28.11%
Escondido N 92026 57 $205 $174 -15.01%
Escondido E 92027 73 $201 $145 -27.63%
Escondido W 92029 13 $222 $215 -3.05%
Fallbrook 92028 41 $234 $149 -36.52%
Julian 92036 6 $156 $165 5.27%
Palomar Mtn 92060 n/a $274 n/a n/a
Pauma Valley 92061 6 n/a $141 n/a
Penasquitos 92129 36 $286 $276 -3.47%
Poway 92064 32 $290 $260 -10.20%
Ramona 92065 22 $222 $183 -17.50%
Rancho Bernardo W 92127 36 $269 $244 -9.13%
Rancho Bernardo E 92128 38 $281 $279 -0.80%
Rancho Santa Fe 92067 7 $571 $446 -21.93%
Rancho Santa Fe post office 92091 5 $479 $391 -18.25%
San Marcos N 92069 31 $209 $164 -21.63%
San Marcos S 92078 29 $254 $202 -20.47%
Santa Ysabel 92070 1 n/a $239 n/a
Valley Center 92082 21 $264 $156 -41.05%
Vista S 92081 23 $226 $186 -17.87%
Vista W 92083 31 $203 $168 -16.87%
Vista E 92084 43 $215 $163 -23.82%
Warner Spr 92086 1 $173 $113 -34.84%

Comment by Professor Bear
2009-06-21 08:33:50

Having visited Valley Center, I find the $156 per square foot very high, despite the large YOY drop.

 
Comment by Professor Bear
2009-06-21 12:23:50

To try to tame down my considerable curiosity, I compared changes in North County single family home sale price per square foot to changes in the overall median sale price. My hypothesis was that the price per square foot would generally drop by more than the median, but my conjecture proved wrong; when zip code level changes are weighted by the recent numbers of homes sold, both measures of change dropped by about 18.8 percent on a year-on-year basis for North County zip codes. (That would amount to a one-year loss of roughly $94,000 on a home that was worth $500,000 in May 2008.)

Of course, some zip codes saw larger drops than others. For instance, Rancho Santa Fe (92067) saw a loss of 41.7 percent in the median price, but only 21.93 percent in price per square foot terms, suggesting that the really expensive homes are selling at a much slower pace compared to low-end homes. Even so, a 21.93 percent loss on one of these homes is nothing to sneeze at. For instance, if a Rancho Santa Fe home is currently valued at the May 2009 median sale price of $1,850,000, a 21.93 loss would amount to a one-year home equity loss of 0.2193*$1,850,000/(1-0.2193) = $519,668. Of course, half a million dollars is mere pocket change to anyone wealthy enough to own a home in Rancho Santa Fe.

Here are the numbers comparing changes in median price per square foot to changes in median sale price:

Zip Code No Sold Med PPSF Med Sale Pr PPSF Change Med Change
North County Inland 596 $180 $345,000 -22.91% -20.70%
Bonsall 92003 5 $201 $658,500 3.41% 54.00%
Borrego Spr. 92004 6 $117 $181,250 -36.16% -27.50%
Escondido S 92025 33 $150 $215,000 -28.11% -42.70%
Escondido N 92026 57 $174 $265,000 -15.01% -26.40%
Escondido E 92027 73 $145 $196,000 -27.63% -35.70%
Escondido W 92029 13 $215 $569,000 -3.05% 18.50%
Fallbrook 92028 41 $149 $285,000 -36.52% -42.20%
Julian 92036 6 $165 $155,000 5.27% -18.40%
Penasquitos 92129 36 $276 $602,500 -3.47% 5.10%
Poway 92064 32 $260 $610,000 -10.20% 28.40%
Ramona 92065 22 $183 $346,500 -17.50% -16.90%
Rancho Bernardo W 92127 36 $244 $684,750 -9.13% -6.40%
Rancho Bernardo E 92128 38 $279 $508,000 -0.80% -7.60%
Rancho Santa Fe 92067 7 $446 $1,850,000 -21.93% -41.70%
Rancho Santa Fe post office 92091 5 $391 $840,000 -18.25% -63.40%
San Marcos N 92069 31 $164 $320,000 -21.63% -17.30%
San Marcos S 92078 29 $202 $467,500 -20.47% -12.30%
Valley Center 92082 21 $156 $385,000 -41.05% -30.00%
Vista S 92081 23 $186 $371,500 -17.87% -10.00%
Vista W 92083 31 $168 $243,500 -16.87% -20.20%
Vista E 92084 43 $163 $265,000 -23.82% -27.70%
Warner Spr 92086 1 $113 $180,000 -34.84% -56.90%

 
 
Comment by Professor Bear
2009-06-21 08:38:51

I keep hearing from various sources (MSM as well as individuals who think they know something) that San Diego home prices have bottomed out. If that is the case, it is sure hard to find evidence in the YOY price changes from DataQuick. Here are year-over-year changes (from May 08 to May 09) in median PPSF for single family residences (middle columns) and condos (right columns) for major areas of San Diego:

Place Code ‘09 ‘08 ‘09 change ‘09 ‘08 ‘09 change

Central San Diego 491 $301 $246 -18.10% 372 $310 $250 -19.13%
East County 301 $229 $189 -17.44% 127 $182 $121 -33.62%
North County Inland 596 $234 $180 -22.91% 153 $228 $180 -20.84%
North County Coast 361 $276 $223 -19.34% 176 $327 $215 -34.27%
South County 315 $209 $168 -19.52% 146 $180 $141 -21.55%

Comment by Sweeping Changes
2009-06-21 10:48:50

my rental is down from 600 in 08 to 389k and now 377K

Comment by Professor Bear
2009-06-21 11:04:24

The Zestimate for our rental is $493,500, but there is no way on earth I would pay that kind of money for it. The square footage is 1835 square feet, which puts the Zestimate at $267 per square foot. Further, it is half of a duplex which used to be a 3-br until some creative partitioning turned the master bedroom into two separate but smaller bedrooms.

I guess the Zilldo folks missed the May DataQuick numbers which document that the sales price per square foot for single family homes in Rancho Bernardo West (92127) has dropped from $269 (May 08) to $244 (May 09) year-over-year?

Comment by Sweeping Changes
2009-06-21 12:24:45

This pricing must be against the law.

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Comment by Professor Bear
2009-06-21 13:07:25

I did a weighted average of the median May used home sales PPSF over all San Diego zip codes in DataQuick data, weighted by numbers of sales per zip code, and came up with $213. By contrast, the recent PPSF figure on Radar Logic shows a range of $175 to $206 (through April 17). Why the gap? (By contrast, the highest 1-day PPSF number on Radar Logic was about $388, in Dec 2005).

Rough percentage drop in PPSF (thus far) is:

(206/388-1)*100 = 47 percent.

Comment by Sweeping Changes
2009-06-21 13:20:06

It’s still a crime to charge hardworking and fiscally prudent california renters so flipp’ much.

 
 
 
Comment by michael
2009-06-21 08:47:38

Businessweek…the nation’s premiere business magazine bases a 2012 housing recovery on luch. (paragraph 2, sentence 2).

http://finance.yahoo.com/real-estate/article/107219/what-your-home-will-be-worth-in-2012.html?mod=realestate-buy

i can’t believe they even wrote that.

Comment by michael
2009-06-21 10:31:25

oops…not luch but LUCK.

darn typos.

 
Comment by Professor Bear
2009-06-21 10:45:42

“By 2012 we may finally get back to blissful boredom. With any luck, three years should be long enough for the U.S. economy to recover and for the nation’s housing inventory to shrink to more normal levels.”

How is inventory supposed to sink with a flood of option ARM resets leading to foreclosures piled on to the shadow inventory of repossessed housing that banks are already holding off the market? I guess the passage of time will solve the mystery…

Comment by Professor Bear
2009-06-21 10:46:47

Oops — I guess I should have said “shrink” not “sink” — my Freudian slip is showing once again.

Note to self: Inventory “shrinks”, prices “sink.”

Comment by Sweeping Changes
2009-06-21 10:52:22

I would like to be blissfully bored in a home of my own that costs less than rent.
curtsy!

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Comment by SDGreg
2009-06-21 11:22:37

“By 2012 we may finally get back to blissful boredom. With any luck, three years should be long enough for the U.S. economy to recover and for the nation’s housing inventory to shrink to more normal levels.”

Is it too much to expect insightful analysis from an American business magazine? With some luck, the Padres might be in the post season this year too. However, only a total fool would expend any money based on that luck scenario.

If 2012 ends up being more like the mid-1930’s, I don’t think most people would consider that “blissful boredom”.

 
 
Comment by DennisN
2009-06-21 10:59:51

Ugh. What a nasty article - an example of bad webpage design. Rather than a list of the 50 metro areas, they put a grid of 50 tiny thumbnails at the bottom. You have to open each one to see what area they are talking about. There’s no way you could guess the metro area by the thumbnails.

 
Comment by Bill in Los Angeles
2009-06-21 13:30:43

Lots of us here on Ben Jones’ blog even back in 2006 or 2007 forecast RE to bottom in 2012. What if it’s like waiting for Godot? 2012 is not really far off. Like the perfessor says, resets on the way, lots of shadow inventory, add likely interest rate hikes and higher taxes (which rob people of house payments) and you have a housing recovery that will probably be much further into the future than three years. I don’t expect Time Magazine to put a SFH on the cover of Time in 2012 and pronounce real estate dead.

 
 
Comment by Professor Bear
2009-06-21 10:49:28

We have had some recent alarmist posts on here raising the scepter of hyperinflation. To this group, I have to ask: How does your heightened state of anxiety take into consideration housing prices which have recently dropped on a national basis at the fastest rate in the history of the U.S. real estate market? Does your “model” of inflation exclude home purchase prices from the equation, just like the Fed’s does?

Comment by Sweeping Changes
2009-06-21 11:01:14

It means we can save 260k on a med. priced home in a state that is about to go down like the Titanic.

Comment by Professor Bear
2009-06-21 11:23:30

That’s what I don’t understand about the folks who are so anxious to jump in and buy a California home right now. If they had been passengers on the Titanic, would these people have willingly chained their ankles to the deck of the ship as it began to sink?

Comment by hip in zilker
2009-06-21 11:29:08

probably

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Comment by varelse
2009-06-21 12:10:44

But drinks were half price!

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Comment by Bill in Los Angeles
2009-06-21 13:22:40

I’m a backer of the stagflation hypothesis. Wages will be stagnant, unemployment high, low or no growth, and some prices will fall (house prices, rents) while others (food, energy, health care, education, commodities, gold) will rise. The kicker is that the monetary policy is easy money right now. Price inflation will have to follow. In stagflation, it is possible for house prices to continue falling. People dumping ten year notes and bonds will pressure long term rates to go up and that will make home buying less attractive.

 
Comment by SDGreg
2009-06-21 16:54:11

The subject of deflation versus hyperinflation was discussed on Financial Sense a couple of weeks ago. They said historically that unwinding bubbles typically ended with deflation in creditor nations and inflation in debtor nations. In the 30’s, we were a creditor nation and now we’re the largest debtor nation. That would argue for inflation this time.

However, when looking at aneconomy that might be 20 to 30 percent less than it once was for some time, it’s not hard to envision deflation in many things, not just housing, for some period of time. However, given the massive amount of accumulated public and private debt and the limited means to service it, I remain concerned about the possibility of an extended period of higher inflation in the not too distant future.

 
 
Comment by hip in zilker
2009-06-21 11:33:10

In a rare departure from the “it’s different here, Austin is just taking a little breather before it’s back to the boom, boom, boom times, we’re the new California, downtown is the new Manhattan” mantra - Austin American Statesman reports on the increasing rate of foreclosures.

partial link :
statesman.com/news/content/news/stories/local/2009/06/21/0621foreclosures.html

Comment by hip in zilker
2009-06-21 11:34:31

that posted immediately, BTW

 
Comment by Southwest Steve
2009-06-21 14:30:13

Yuk!! Austin is awful and the taxes are nuts.

Good thing is it is only the dumb Californians who live in inland LA. Believe me, know one with in 30 minutes of the coast, north of Ventura, has any interest in Austin. Aspen maybe??

Comment by drumminj
2009-06-21 14:48:44

Austin is not awful - What makes you think so? Yes, the property taxes are certainly high…but that’s with no state income tax.

Comment by ecofeco
2009-06-21 16:50:18

Having watched Austin change over the past 30 years (though I don’t live there, but father south) I can tell you that Austin’s growth has far outstripped is infrastructure, mainly in transportation and retail convenience. And the once desirable parks have become too crowded to enjoy.

The traffic is bad and the laid back attitude that was Austin’s signature has been replaced by a striving workaholic “too busy for you” mentality.

Housing prices are ridiculous as are prices for most everything else. And the sheer “PC” is disgusting.

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Comment by hip in zilker
2009-06-21 17:14:06

ecofeco,

I don’t disagree with anything you say, although I don’t really notice the PC.

I thought you were in DFW area. Where are you? San Antonio?

 
Comment by exeter
2009-06-21 17:58:50

I knew Austin was a madhouse back in 2004 when the southwests largest established engineering firm was attempting to hire me for construction oversight there.

 
 
 
 
 
Comment by Sweeping Changes
2009-06-21 11:56:43

People are desperate to leave california, so they go to Austin..

 
Comment by Real Estate Refugee
2009-06-21 12:07:43

While purusing the Westside Homes insert in the LA Times this morning, ran across a full page ad from TheMLS.com which contained two bar graphs for the “Market Dynamics” of condominiums in “Primary Areas from Downtown to the Ocean”.

The first shows Median Price (Sold Listings) covering 12/28/08 - 6/14/09. Comparing first quarter with second quarter 2009, it apprears there was a 2% drop in the median price. And if you give their “trendline” lying across the bar graphs a cursory look, it appears that prices have stabilized.

The second bar graph is for Number of Units Sold for the same two quarters. Both the trendline and bars indicate a 64% increase in sales second quarter over first quarter.

Then you look at the numbers: 34 units sold first quarter; and 56 units sold second quarter. Total: 90 units sold in six months.

I just now did my own informal survey of TheMLS.com and found that there are approximately 1460 condo listings for Downtown + Hancock Park + Hollywood + West Hollywood + Beverly Hills + Westwood + West LA + Santa Monica.

If you factor in that there might be only a couple of listings for entire buildings just coming on the market, I’m willing to bet that the number increases by at least 50%.

So Professor Bear, if you will, give us a calculation on how many years of current inventory we currently possess at this rate.

Now, if you just looked at the pretty bar graphs, you’d come away with the impression that prices were stabilizing and sales were increasing dramatically. Without doing a little homework, you might start thinking that you’d better buy now or get priced out again.

Finally, it wasn’t until I started to really scrutinize the ad, that I noticed the “Primary Areas” in 9 point type underneath the 24 point type in bold. So, in order to get these numbers, TheMLS.com was picking and choosing which areas to include.

These real estate people are really starting to irritate me.

(Note: couldn’t find a link for the ad, if anyone else can, please feel free)

Comment by Professor Bear
2009-06-21 12:34:57

“So Professor Bear, if you will, give us a calculation on how many years of current inventory we currently possess at this rate.”

Get me the shadow inventory banks are holding off the market plus the latent inventory of homes that are likely to go into foreclosure or short sale over the next three years due to option ARM resets and unemployed owner occupants and I can come up with a ballpark estimate for you.

 
Comment by Professor Bear
2009-06-21 12:45:11

‘And if you give their “trendline” lying across the bar graphs a cursory look, it appears that prices have stabilized.’

The DataQuick price graph in today’s SD Union-Tribune Homes section shows a clear uptick in the median sale price over the past several months, which will doubtless lead the serial bottom callers to crow about prices bottoming out a couple of months ago. I suggest anyone who wants to make this case take a careful look at the period of the chart in 2007, when an uptick of similar magnitude immediately preceded the forty percent landslide in the median sale price from $500,000 as of late 2007 to under $300,000 more recently.

If this evidence that the recent uptick in prices does not imply a bottom has been reached is not convincing, then I suggest you address the following questions:

1) Has there ever been a housing market recovery anywhere on the planet when unemployment had recently risen from a low base to double-digit levels?

2) Is the wave of Alt-A and prime option ARM resets over yet?

3) Have banks cleared out their shadow REO inventory yet?

4) Have foreclosures dropped back to historically normal levels yet (ignoring the distortions caused by foreclosure moratoriums)?

5) Have very many people acknowledged that “real estate is the worst possible investment” yet?

 
 
Comment by jeff saturday
2009-06-21 14:14:51

1923 Sw Exeter Ct
Port Saint Lucie, FL 34953 Striking Drive-Up - Gated - Cul-De-Sac Location16$184,900
5 Bed, 3 Bath, 4,084 Sq Ft
Property Type: Single Family Home
Stately and grand home on Cul-De-Sac in upscale Newport Isles. Home features dual stairways to upstairs bedrooms. Massive den/bonus room upstairs great location for media… more

 
Comment by tresho
2009-06-21 16:22:55

From the website of the Hartford Courant at courant dot com:
HARTFORD - A New Jersey blogger is due in a Connecticut courtroom to face a charge of inciting violence against state lawmakers.

Harold “Hal” Turner of North Bergen, N.J., is set to appear in Hartford Superior Court on Monday [22 June 2009].

The 47-year-old former radio talk show host, who now broadcasts commentary on his Web site [i.e., posts webcasts], urged his blog readers earlier this month to “take up arms” against Connecticut lawmakers and suggested government officials should “obey the Constitution or die.”
Also see “Hal Turner” on wiki.

Comment by exeter
2009-06-21 17:55:09

Off to jail with Hal and his petty gripes.

 
 
Comment by B. Durbin
2009-06-21 16:26:37

Adventures in homeownership:

The yard is coming along nicely. It used to look like an abandoned lot but a couple of mows and some watering later, it looks like a half-dead lawn, which is a BIG improvement. Still not safe for little man, who wants to eat the ornamental pear berries. (Ick.) And it appears that we have a two-pronged sprinkler system for the backyard, with two missing or damaged heads. The wires were cut by some inept landscaper but we can turn it on by hand. (One of the two sets is intact, so we’ll just use that until we can fix the other ones.)

Neighbors said, “You didn’t check the sprinkler system?” Really, very very low on the list of priorities.

A large portion of the sideways tree has been removed, but there’s still a lot to go. Probably gain about 400 square feet by its removal. Oleander is gone, and that was fun. There’s a mint field (restrain your mint!) and blackberries to remove, and nutsedge. Weeds, weeds, weeds.

Three black widows so far. Ah, the joys of ownership.

Two rooms painted. Little man’s room is bright green, a color called Sweet Midori. I’m a big believer in obnoxious colors for kids’ rooms. Popcorn ceilings are evil when it comes to paint. EEEEEVIL.

Anyway, after the hectic move, tech week, show weekends and their associated duties, and getting the home to the point where we could have family over yesterday (baptism, grill party, s’mores, and relatives sleeping over), we can finally breathe a bit. There’s a lot of work to do but it’s almost all cosmetic, and we’ll be pulling the 45 cubic feet of books out of the garage so we’ll have room for a work bench.

Still have the cheapest house for miles. Hardly surprising. The bathroom wallpaper probably scared people off.

(Incidentally, you know that trick where the realtor calls you and says, “they have another offer”? Yeah, they tried to pull that. We thought about the seven months the house had been on the market, shrugged, and said, “Well, if the other offer’s better, they can have it.” Surprise surprise, the other offer somehow never materialized…)

So Olygal, we have two friendly neighbor cats who think this is their backyard, a bunch of alligator lizards that they torment, tons of pottery animals that keep turning up in the underbrush, and some birds’ nests in the dead tree. Those are deep enough that they’ll fledge before we get to cutting their living space away. The breeze– since you asked– smells very very faintly of salt water. Slightly damp and cool and with any luck, it will be present a lot this summer as we work on insulation and shade issues.

Lots of work. But we’re having fun AND the finances work in the proper direction (as in, cheaper to buy this space than rent it.) Most of the houses around here don’t fit that description and for some reason, they aren’t selling…

 
Comment by Professor Bear
2009-06-21 16:27:52

Destiny may prove me wrong in this conjecture, but the future inflation outlook seems strikingly clear to me at the moment:

1) The Fed pumps in lotsa money for the remaining duration of the crisis in order to stabilize consumer prices.

2) The end of the crisis takes the Fed “by surprise.” Conveniently, they end up behind the curve on inflation, which runs amok for a catch-up period while the debt shrinks in real terms.

3) At the end of the day, inflation which “nobody expected” eats away enough debt so Uncle Sam can carry on his dollar-denominated business.

* The Wall Street Journal

* THE OUTLOOK
* JUNE 22, 2009

Fed’s Exit Strategies Begin to Come Into Focus
By JON HILSENRATH

When U.S. Federal Reserve officials meet this week, they will spend a lot of time discussing exit strategies. When should they start unwinding their efforts to stimulate the economy? How should they go about doing it?

It’s easy to answer the first question: not soon.

The economy and financial markets have stabilized in recent weeks, but Fed officials want more evidence a recovery is for real. The economy is on track to contract at about a 1% annual rate in the second quarter, according to forecasters Macroeconomic Advisers. That would be the fourth straight quarterly contraction, a stretch of decline that hasn’t occurred since the Great Depression.

Most Fed officials believe the economy has a lot of ground to make up before worrisome inflationary pressures build. The underlying inflation rate, a measure that excludes volatile food and energy prices, is still slowing and tends to continue to slow after a recession ends. “The slack in resource utilization remains sizable,” Fed Chairman Ben Bernanke told the House Budget Committee recently. “Inflation is likely to move down some over the next year relative to its pace in 2008.”

Comment by Sweeping Changes
2009-06-21 17:58:23

What minefields will we be walking thru this week?
Getting out my planner so I can ‘be here now’ and participate in all the festivities.

 
 
Comment by milkcrate
2009-06-21 17:36:33

FT….

(The Cost of Sewage Removal Goes Up)..
______________________________________________

Warning of stimulus cash paying for bribes
By Brooke Masters in London

Published: June 22 2009 01:19 | Last updated: June 22 2009 01:19

More than $500bn in global economic stimulus spending could be lost to wasteful and fraudulent procurement practices ranging from bribery to selecting less efficient service providers, according to a report on Monday by Kroll, the world’s leading risk consultancy.

Governments have promised to spend $5,000bn (€3,587bn, £3,026bn) to jump-start their economies. But many of them – and the companies they deal with – have reduced spending on compliance and control functions as part of larger cost-cutting measures.

Studies of government contracting found that up to 3.5 per cent of the money ended up as bribes and 4-10 per cent was wasted by failing to pick the most efficient bidder, the report said. The numbers come from a 2002 study of World Bank figures and may understate the problem as it was conducted in more stable economic conditions, Kroll said.

Capital improvement projects are particularly vulnerable to corruption, the consultancy said. It recommended making procurement processes as transparent as possible and offering officials rewards tied to timely delivery.

 
Comment by Professor Bear
2009-06-21 19:16:05

The big Wall Street sponsored builders who brought us the McMansion craze and millions of vacant tract homes are heaving a collective sigh of relief now that (according to pundits) the worst is over and the housing recovery is in sight. I am still hopeful that at least of few of these will go under before the “longer than expected” recession is over, as I don’t feel they have experienced enough comeuppance for their pivotal role in creating the housing disaster.

Wall Street Journal

* COMMERCIAL REAL ESTATE
* JUNE 22, 2009

Land Deals Help Builders Stay Alive

By MICHAEL CORKERY

In Indio, a small city east of Los Angeles, the supply of foreclosed houses for sale is plentiful. Even so, work crews are finishing a batch of new homes for Lennar Corp.

While the recession wiped out many small builders, mortgage lenders and homeowners, the nation’s biggest builders have hung on, in part through favorable land deals, loan agreements and tax strategies.

Now, the worst appears to be over for most of them. Nationwide, new-home sales are showing signs of bottoming out. The stocks of the big home builders have rebounded from their November lows, and some have bolstered their cash and borrowing ability. Lennar and Toll Brothers Inc. each sold $400 million of bonds in April, and Ryland Group Inc. sold $230 million worth, a sign that some investors think these companies will make it.

A look at how Lennar navigated the worst housing crisis in decades reveals that timely land deals have been critical to its survival.

“Land can humble you,” says Emile Haddad, Lennar’s chief investment officer. “On the surface it looks like the simplest real-estate asset, but it’s really the most complicated.”

 
Comment by Professor Bear
2009-06-21 19:23:08

* The Wall Street Journal
* ABREAST OF THE MARKET
* JUNE 22, 2009

Is the Bull Run Pulling Up Lame?

Overextended Rally Seen Ripe for Downturn; Look Out 6547.05, Says Mr. Roth

By E.S. BROWNING

The stock market is stumbling.

After a powerful rally that pushed the Dow Jones Industrial Average ahead by more than 30% in three months through last week, stocks are clearly having trouble extending their gains.

Many analysts see a pullback ahead, and they are debating whether it will be just a temporary annoyance or something bigger and more painful.

Indicators of market health, including trading volume, buying demand and trading by companies and corporate insiders, are beginning to flash yellow or red. People also are beginning to question whether the economic fundamentals are strong enough to justify continued gains.

The Dow finished Friday at 8539.73, down 3% for the week. It is at the same levels now as in early May. The Standard & Poor’s 500-stock index, which a week ago was up as much as 40% from its March low, ended Friday was at 921.23, still 36% above the low.

“This 40% rally isn’t based on a 40% increase in fundamentals,” says Michael Farr, president of Washington, D.C., money-management firm Farr, Miller & Washington. “The economy is still declining. Credit isn’t coming back. Unemployment is rising and we are seeing a much less robust consumer. I think the market at some point is going to give back a large portion of these gains.”

Comment by Professor Bear
2009-06-21 19:24:37

Michael Farr sure is a gloomster. Why can’t he see the thicket of green shoots sprouting up all over the place?

Comment by Sweeping Changes
2009-06-21 19:39:23

He needs 3D glasses and a smokescreen.

 
 
 
Comment by Professor Bear
2009-06-21 19:31:54

Before the Senate gets slap happy with using debaucherous lending standards to respike the mortgage market, hows about if they look around at how many lives they have wrecked through encouraging families to buy houses they cannot afford, destined to eventually go into foreclosure?

Stories like this one really point out the pitfalls of management by crisis. They haven’t even figured out yet how we got into the mess, but that is not stopping the proposal and use of myriad hair-of-the-dog stimulus programs to fix things.

Wall Street Journal

* JUNE 22, 2009

Changes Urged to Rules on Condo Loans

By NICK TIMIRAOS

Two Democratic lawmakers are calling on Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.

In March, Fannie Mae said it would no longer guarantee mortgages on condos in buildings where fewer than 70% of the units have been sold, up from 51%. Fannie Mae also won’t purchase mortgages in buildings where 15% of owners are delinquent on condo association dues or where one owner has more than 10% of units, which the firm sees as signals that a building could run into financial trouble. Freddie Mac will implement similar policies next month.

In a letter to the chief executives of Fannie and Freddie, Reps. Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, and Anthony Weiner (D., N.Y.) warned that the 70% sales threshold “may be too onerous” and could lead condo buyers to shun new developments. The legislators asked the companies to “make appropriate adjustments” to their underwriting standards for condos.

Comment by SDGreg
2009-06-22 03:36:42

Those new standards appear entirely reasonable, long overdue, and very much necessary.

“Two Democratic lawmakers are calling on Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.”

Many of those developments aren’t viable. Throwing lenders and borrowers under the bus in an attempt to salvage projects that should fail is just wrong.

I’m much more concerned about the viability of the overall American economy than the housing sector and so too should Congress. If the fundamentals of the American economy are sound, housing will eventually recover. Trying to artificially prop up housing will do little for the overall economy.

 
 
Comment by sagesse
2009-06-21 20:54:29

If there is still a fire, here is a bit of oil.
Or: who saved the Hamptons.

Fromt the Guardian:

“Goldman to make record bonus payout”.

“Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm’s 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.

A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.

Staff in London were briefed last week on the banking and securities company’s prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever.”

 
Comment by Professor Bear
2009-06-21 22:11:09

Fire moves into houses abandoned by foreclosures
By ADAM GELLER
The Associated Press
Sunday, June 21, 2009; 12:44 AM

FLINT, Mich. — Like the house across the street gone missing and the one at the corner stripped of its front door, the weathered brown bungalow at 1430 Jane Ave. bided its time, edging nearer to a meeting with a wrecking crew.

But in a city with more than 1,000 abandoned homes slated for demolition, it would have to wait its turn. Until, at 8:15 a.m. Oct. 8, the little house jumped the line.

When firefighters arrived seven minutes later, the front of 1430 Jane was already swollen with flames - the latest in a long, sad string of fires destroying scores of homes this half-empty city no longer has any use for.

Except this one was different.

Like the others, the owner had thrown in the towel. It was in tax foreclosure and ready to be forgotten.

But it wasn’t empty.

“Gordy!” neighbors yelled in to the flames. “Get out of there if you’re in there!”

Flint’s abandoned homes usually announce themselves by the boards covering their windows, walls ripped open and scavenged for pipes and aluminum siding. But at 1430, a pair of chairs hung from the porch. Blinds flapped from bedroom windows.

And as firefighters battled in, a terrible paradox was revealed. In a city and a nation awash in empty structures, one man’s abandoned home can be another’s man refuge - and sometimes his final resting place.
———————————————————————————
In this May 14, 2009 photo, Elmer Crawley, Gordy Yoesting’s half-brother, looks over the burned remains of the home in Flint, Mich., where Yoesting died in a fire last October. (AP Photo/Carlos Osorio)

Chart shows home vacancy rates over time and number of structure fires in vacant homes (P. Holm - AP)

In this May 14, 2009 photo, synthetic flowers at the base of a tree form a temporary memorial to Gordon Yoesting in front of the burned home where he died last October on 1430 Jane Ave. in Flint, Mich. (AP Photo/Carlos Osorio)

In this May 14, 2009 photo, three abandoned homes are boarded up along Jane Ave. in this East Side neighborhood of Flint, Mich. (AP Photo/Carlos Osorio)

In this May 14, 2009 photo, Andy Graves, a primary captain in the Flint, Mich., fire department, talks about the challenge of fighting fires in the city’s many vacant buildings. (AP Photo/Carlos Osorio)

 
Comment by Professor Bear
2009-06-21 22:18:03

If Nick says it, then it must be so.

Echo boomers a lifeline for embattled U.S. housing
Mon Jun 22, 2009 12:23am EDT
By Lynn Adler

NEW YORK (Reuters) - The children of baby boomers will eventually resuscitate the pummeled U.S. housing market, Harvard University said on Monday, but in the meantime, limits on income and credit are sustaining the three-year bust.

The highest unemployment in almost 26 years, record foreclosures and rigid lending threaten to overcome emerging home sales progress despite unprecedented efforts by the Obama administration, Harvard’s State of the Nation’s Housing 2009 report said.

Echo boomers, the children of the post-World War Two baby boomer generation, offer a massive source of support for housing, the study said. The generation is entering the peak home buying and renting ages of 25 to 44 and numbers over five million people more than did their parents’ record-sized group in the 1970s.

“Echo boomers are larger than the baby boomer population. Couple that with immigration and you have the seeds, the possibility of a housing recovery,” Nicolas Retsinas, director of Harvard’s Joint Center for Housing Studies, said in an interview.

The group will bolster demand for the next 10 years and beyond, supporting the sagging housing market even if immigration drops, the study said.

The challenges are myriad, however, said Retsinas, a widely followed housing industry expert and former senior official in the Department of Housing and Urban Development.

“We have to find a way to stabilize housing finance in this country,” he said.

 
Comment by Professor Bear
2009-06-21 22:21:23

Voice of San Diego dot org
The W’s Trouble: ‘The Tip of a Very, Very Large Iceberg’
Owners of the W San Diego decided this month to walk away from their mortgage on the building, signaling trouble in the local hotel market. Photo: Sam Hodgson
By KELLY BENNETT

Wednesday, June 19, 2009 | Downtown’s W Hotel is accustomed to being in the spotlight.

With great aplomb, the luxury hotel opened in 2002 after building considerable hype. It even employed a hotel-room-on-wheels with Plexiglas walls where underwear-clad models frolicked on plush beds as it drove through the city streets. Another iteration featured partying swimsuit-wearers to promote the hotel’s beach-style bar with a sand floor.

Now, the W is attracting attention again, but of a decidedly soberer tone. The hotel’s owners announced last week they will stop making their mortgage payments, sending a ripple of disquiet through the local hotelier community. While the W’s trouble might be dismissed as an isolated incident, the market for hotel and office and retail space in San Diego in general is in deep trouble.

“<bWe are at the tip of a very, very large iceberg,” said Alan Reay, president of Atlas Hospitality Group, an Orange-County-based hospitality real estate firm. “We’re going to see a lot more of that.”

Across the country, hotel revenues have dropped off a cliff. In San Diego, those revenues are expected to drop 24 percent this year, according to a report released Tuesday by PFK Hospitality Research.

Two-thousand-nine is going to be the worst year on record in the U.S. lodging industry in the more than 70 years that they’ve been keeping records, and 2010 isn’t going to be much better,” said Jim Butler, an L.A.-based hotel lawyer and author of the Hotel Law Blog.

 
Comment by Professor Bear
2009-06-21 22:26:45

It’s amazing that with home sale prices off by nearly 50 pct, Bay Area home sales have dropped, not increased. Suggests that would-be sellers expect the market to come back soon rather than continue to drop, as why would they hang on to falling knives?

SF Examiner dot com
Home prices drop, less units sold
Staff, wire report
06/18/09 9:51 PM PDT

There were fewer homes sold in The City last month than during May 2008, and the median price dropped almost 20 percent to $634,000, a real estate tracking company said.

In the nine-county Bay Area, the median price fell to $341,500 from $517,000 a year ago. That’s 49 percent less than the peak reached two years ago, according to San Diego-based MDA DataQuick.

 
Comment by Professor Bear
2009-06-21 22:34:12

WSJ com tracks the housing market with news, tips and analysis

* June 15, 2009, 10:02 AM ET

Beaches and Freeways: How Coastal Values Have Fallen

By Nick Timiraos

How far have values fallen in coastal California? This video from Jim Klinge, a north San Diego County Realtor adept with a video camera, provides some insight.

As Mr. Klinge notes, values have fallen even along the coastal submarkets that were once seen as mostly immune from the collapse in home prices elsewhere. Now, while signs of a recovery mount in some of the most distressed inland markets, declining values along the coast are just beginning to lead to short sales and foreclosures in mid-to-upper end housing markets.

Notices of defaults, which represent the first stage in the foreclosure process, have jumped in the first quarter of the year as foreclosure moratoria and a state law to slow down foreclosures have expired.

In Carlsbad’s 92009 zip code, where Zillow tracks a median home price of more than $500,000, nearly one in 50 homes had received a notice of default in the 12 months ending in February, according to RealtyTrac. Further south, in San Diego’s tony La Jolla suburb, where median prices measure at nearly $1 million, around one out of 100 homes had received a default notice over that same period.

 
Comment by Professor Bear
2009-06-21 22:45:46

Good news for Bay Area home prices
James Temple, Chronicle Staff Writer
Friday, June 19, 2009

(06-18) 18:54 PDT — Bay Area home prices rose from April to May, the second straight monthly gain and a surefire sign that the cold-cocked real estate market is finally coming around.

Unless, of course, it’s not. The data could just as easily reflect growing distress in the high-end market that is forcing more well-to-do owners to unload their homes, distorting the statistics with discounted but still relatively expensive properties and foreshadowing greater pain to come.

 
Comment by Professor Bear
2009-06-21 22:51:03

New York Times Op Ed
June 21, 2009, 9:13 pm
California Bailout, Impossible or Inevitable?
By The Editors

California budget(Photo, left to right: Rich Pedroncelli/Associated Press, David McNew/Getty Images) Left: A father and son demonstrating in Sacramento last month with a sign reading “child care for all.” Right: Gov. Arnold Schwarzenegger spoke about the state budget this month in Escondido, Calif.

New York was on the brink of bankruptcy in 1975, when the investment banker Felix Rohatyn helped oversee the city’s rescue and recovery. But California’s current problems seem to be of a different order. “I certainly don’t recall a feeling of hopelessness here as I seem to sense there is about California’s present situation,” Mr. Rohatyn told Geraldine Baum of The Los Angeles Times in a recent interview.

The Obama administration has told California not to expect a federal bailout. So how should the state deal with its $24.3 billion shortfall? Can it save itself? Or is it likely that the taxpayers of Iowa and Utah will end up picking up the tab of the state that represents an eighth of the nation’s economy? We asked Ron Paul and others for their views on what has to happen next.

 
Comment by Professor Bear
2009-06-21 22:53:46

The Desert Sun
Palm Springs, CA
California bailout? No way
Legislators got us in this mess, so federal funds unwarranted

The Desert Sun • June 21, 2009

The Obama administration has made it crystal clear it has no intention of bailing out cash-strapped California.

Treasury Secretary Timothy Geithner and other federal officials decided the state, hammered by the global recession and a failure of legislative leadership in Sacramento, must get its budget in order before federal officials could consider lending the Golden State a hand.

Washington’s primary concern: A California bailout would trigger a cascade of demands from other states.

We agree with President Barack Obama’s stance, even as we acknowledge that the economic ripples spawned by California’s continued economic malaise cannot be ignored. But this is a crisis where those elected to solve the state’s greatest challenges and carve its future have simply not done their job.

Obama’s press secretary, Robert Gibbs, affirmed last week that California’s situation is a dire one. “We’ll continue to monitor the challenges that they have,” he said. “But this budgetary problem, unfortunately, is one that they’re going to have to solve.”

That’s the right answer.

 
Comment by ex-Wreck
2009-06-21 23:11:29

With apologies to Robert Frost:

Two loans diverged in a yellow wood
And sorry I could not be one borrower
And borrow both long I stood
And peered down one as far as I could
‘Til it bent around the undergrowth.

And then took the ARM as just as fair
For it was sassy and had a lot of flair
But as for that passing there
Had worn both about the same [not!]

And on that morn both equally lay
With eaves no rot had painted black
Oh I left the first for another day
But knowing how way leads on to way
I doubted I would ever pay it back

I’m telling this with a sigh now that the bubble has burst hence:
Two loans diverged in a wood and I,
I took the greedier one and
That has made all the [solvent] difference

Comment by Sweeping Changes
2009-06-22 07:16:36

post for 6-22 Bits

 
 
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