Bits Bucket For July 10, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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HBBers, how are your Animal Spirits doing today?
Lost ‘Animal Spirits’ May Worsen Economy, Roubini, Shiller Say
By Eric Martin, Thomas R. Keene and Ken Prewitt
July 10 (Bloomberg) — The worst recession in half a century may be prolonged because consumers see few signs job losses and declines in home prices are ending, economists Nouriel Roubini and Robert Shiller said.
“The fundamental problem, as Franklin Delano Roosevelt said in 1933, is fear,” Shiller, a Yale University professor, said yesterday on Bloomberg Radio’s “Surveillance.” The Great Depression was deepened by a “sense of lost confidence or animal spirits that was a self-fulfilling prophecy. The worry is that we will have the same kind of issue arising again,” he said.
For entire article Google:
Lost Animal Spirits May Worsen Economy, Roubini, Shiller Say
The death of the green shoots meme suggests cash will be king for the foreseeable future.
Jul 10, 2009, 10:32 a.m. EST
US Stocks Mixed; Consumer Confidence, Earnings Worry Are Drags
By Peter A. McKay
A profit warning from Chevron and a weak reading of consumer confidence kept a leash on stocks Friday.
Major indexes were mixed. The Dow Jones Industrial Average was down nine points, or 0.1%, at 8174.10, hurt by a 2.8% decline in component Chevron after the oil giant said that poor profits at refineries and the financial impact of a weakening U.S. dollar will damp the benefit of higher crude-oil prices in its second-quarter results.
The comments highlight one of the main risks for investors this earnings season. According to Thomson Reuters, analysts are expecting a slide of about 36% in the S&P 500’s overall profits, led by big declines at basic-materials and energy firms who benefited a year ago from the last throes of a commodity bubble that has since burst.
Other blue-chip commodity names were mixed on Friday. Exxon Mobil was off 1%, while Alcoa was up 1.6%.
The market’s losses briefly deepened but leveled off again following the release of worse-than-expected data on consumer confidence. Reuters and the University of Michigan said their monthly index of sentiment fell to 64.6 this month from 70.8 in June. Analysts expected the measure to remain relatively steady, at 70.5.
“That report really got things going to the downside a little bit,” said David Bellantonio, head of trading at Instinet, a New York brokerage. “We’re also still in a low-volume environment, so you can get these little, quick moves that just take off.”
…
Is it just me or does it still seem like the party’s still just getting started? I know “green shoots” was hype but I seriously would not be expecting recovery for a few more years.
Forbes dot com
Doctor Doom
Brown Manure, Not Green Shoots
Nouriel Roubini, 07.09.09, 12:00 AM EDT
The jobs situation is even worse than the headlines.
The June employment report suggests that the alleged green shoots are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10% by later this summer–around August or September–and will be closer to 10.5%, if not 11%, by year-end. I expect the unemployment rate is going to peak at around 11% at some point in 2010, well above historical standards for even severe recessions.
…
Dammit! I am so sick of this! Economics is a science. What freaking part of I CAN’T SPEND MONEY I DON’T HAVE do these jeenuyusses not understand.
I’m joining PB for a straitjacket fitting. My head is going to explode.
The only thing we have to credit default swap, is credit default swap itself.
Speaking of CDOs etc… reading a good book.
The Matchking.
THE original Madoff and prior to Ponzi. This guy started all the new gimmicky things on WS.
oops.
The Match King
author Frank Partnoy.
Ivar Kreuger, the financial genius behind a century of Wall Street scandals.
Thanks for passing the book title along.
Muggy,
I ordered mine but unlike PB I didn’t spring for “express” so I’ll be waiting 6 to 8 weeks for delivery.
Ben, how do you stay calm when you read things like “The Great Depression was deepened by a sense of lost confidence or animal spirits that was a self-fulfilling prophecy.”
You have a way of calmness that is reassuring. Help me out here!
He’s maintaining that calm to keep us out of another great depression, Muggy. Don’t mess with his zen or we’re all doomed!
DOOMED I SAY!
The Zen of Ben
There’s your self-help book, Ben. Forget foreclosures and go into the “keeping people calm” business.
DOOMED I SAY!
Oh, noooOOOOOOOO!
*runs around in a circle screeching wildly *
…Okay, so my mom and sister are visiting and it’s terrific! About 3 really super gossip-fests so far, although only with sis, because my mom is tiresomely good and virtuous. She’s never mean-spirited or unkind and when provoked utterly beyond the bounds of human endurance she only prays and doesn’t shoot or hit anybody. Once, and only once did she lose it so far as to cry aloud in spiritual torment, ‘Oh, G—–, I’m just so worried about you! What if you end up in H-E-Double Toothpicks?!’ And I laughed uproariously and ran and told everyone I had almost made mom say a naughty word.
And as a reward for her remarkable goodness what did she get? Why, Sweet Baby Jeebus graced her life with eight (8) really naughty, very noisy, high-strung, explosion-loving, ruckus-causing children, known to law enforcement and emergency room personnel for 3 counties around our home town, and every single one of whom has acute ADD. That’s what you get for being good*, it seems.
HAHAHAHAhAHA!
But she still contributed to the discussion because she had many MANY stories of woe from the small town I grew up in. The names and particulars aren’t important to relate, but it seems many people have lost their jobs and are getting quite desperate. She said the little restaurant up on main street had an opening for a cook and several men who had been former office workers applied for it! Stuff like that. I was amazed to hear all of it. Schadenfreudy for some situations, but in other cases I felt bad. I mean, I’ve known these folks since I was a wee lass. Just regular folks, trying to make a living and care for their families as best they may.
* So such a fate is unlikely to afflict ME.
The Zen of Ben
Sign me up for 100 copies! Why, I’ll be calm as blazes in no time at all!
And, now that I remember, I’m still waiting for the ‘Ben Beefcake’ Calendar.
What on earth made those former office worker guys think they were qualified to be cooks? Did they have experience? I mean other than using a backyard grill every once in a while. I understand why former office workers think they can restock grocery shelves or something else where being a little organized and able to raise your arms above your head are the only skills needed, but cooking is a bit more than that….
What on earth made those former office worker guys think they were qualified to be cooks?
True. I think they are just desperate for a job, any job. This is in Utarr, by the way. A small town rather down south.
“I mean, I’ve known these folks since I was a wee lass. Just regular folks, trying to make a living and care for their families as best they may.”
You may be familiar with Vernal. I could describe to you a family tragedy that played out there in the 1930s…
“I CAN’T SPEND MONEY I DON’T HAVE” is simple enough, and that basic sentiment is a big part of microeconomics (budget constraints, indifference curves, and all of that). But with fractional reserve banking, the money part is not a constant. It is created based on how good the bankers are feeling about where the economy is headed. I’m not a big Keynes fan, but if he got one thing right, it was “animal spirits.”
Classical econ says that where supply intersects demand, you get the equilibrium P on the y-axis (don’t ask me why, as this is the exogenous variable) and Q on the x-axis. Applied to the market for money, they came up with r (interest rates, aka the price of money) on the y-axis and M on the x-axis (again, this is even though the x-axis variable here is endogenous).
So what does all this mean? Classical economists will tell you that how much people borrow (which they assume to be for capital improvements, aka Investment) is solely a function of interest rates. They go down, and people borrow more. Keynes said this was BS. Sometimes people were not optimistic about the future. They had no desire to invest. To him, investment was controlled more by “animal spirits” than interest rates. All else being the same, if the economy is trucking along and you lower rates, yes, the amount borrowed (and thus the money supply) will increase. But if people are recovering from a massive mania, their mood is going to affect MS more than any lowering of rates. This is the idea of “pushing on a string.” you can’t force people to borrow more.
You can link this into Minsky’s ideas. Minsky said the biggest driver of business cycles is the expansion and contraction of credit. IMO, Minky’s ideas couldn’t have been more validated than they have been by our great “credit crunch” and ensuing financial crisis. Basically, unlike Bernanke, he was able to see the Great Depression less as a problem of the 30s, and more of a problem caused by the great bubbles of the 20s. Eventually, people have taken on more debt than they can hope to repay. Aggregate demand, which had been inflated by the steady increases in debt (encumbered future earnings) comes crashing down. People have to pay down their debt. Sometimes, in such cases, the best thing for the economy as a whole would be one massive default. Let everyone start clean instead of paying for what they consumed yesterday, so that they can actually consume something today. (I’m not advocating that. Obviously, there are issues of fairness and moral hazard to consider.)
All of this is just to say that the animal spirits idea is not the same as when economists talk about “confidence.” Some of them are stupid enough to think it’s the same. They don’t know enough about their own discipline. But for the same reason manias matter and effect the economy, the opposite does, too.
Anonymous Coward,
Or… you could just say: Liquidity IS A COWARD!
Oh, and moral hazards be damned! LOL.
“…budget constraints, indifference curves, and all of that)…”
Macroeconomist to microeconomist: ‘What’s a budget constraint?’
“Economics is a science.”
If so, then why do so many of the profession’s leading practitioners devote so much energy into deceiving the public? Any other type of scientist besides dismal scientists would be drummed out of their profession for such conduct.
“If so, then why do so many of the profession’s leading practitioners devote so much energy into deceiving the public?”
Because once you introduce “animal spirits” you can say whatever the frick you want. Science doesn’t allow this wack ass term. So… you’re right. Currencies are basically just Heavan’s Gate type concepts and not science.
Perez Hilton is my new economist / time to hitch a ride on the mothership.
Sometimes fear is a very rational emotion.
Of course when that fear gets in the way of others profiting from your labor, well I guess then it’s a different story.
Buying overpriced houses and goods right now is about as irrational as one can get.
“Comment by edgewaterjohn
2009-07-10 07:51:03
Of course when that fear gets in the way of others profiting from your labor, well I guess then it’s a different story.”
Isn’t this what it is all really about? Owning a home drives people to work till they drop, but not before producing billions in profits for supporting industries. It is this unquenchable desire for home ownership that now provides a large part of our economy with steady predictable cash flow and capital at 30 year clips per consumer. What other industry or market offers the money making engine that home ownership offers? Real estate and related finance is nearly 1/4 our economy now and that does not even include the supporting industries. Herbert Hoover was right P Bear - promoting home ownership was the fastest and easiest path to growing US GDP. What sort of Gov leadership would want to stop this? Everything has a boom/bust cycle and what we are experiencing today is a relative negative blip in the big picture and simply the cost of doing business.
I hear Gov leadership is trying to increase the 8K home buyer credit to 15K. Welcome to Capitalism. It’s what we do best and who we are.
wow well said.
i’m not for reflating the housing bubble, but it’s role in increasing wealth in 20th century America can’t be understated.
I read that 19th century factory workers in England were motivated to work when sugar became accessible to the masses. Is home ownership analagous today?
Of course, whether this downturn is just a “negative blip” won’t be known for some time.
Yeah. Its animal spirits not lack of jobs in manufacturing or a super massive corruption of our banking sector.
Exactly. Lots of high fallutin’ economic theory these days can be construed as a means of diverting attention from the culprits who precipitated the economic collapse.
The animal spirits argument is flawed (just as it was in the ’30’s) in that it assumes that a lack of economic confidence is the cause of depression when in reality it is the massive misallocation of wealth.
Wealth over the last decade has been allocated to building factories in China & housing price inflation when it should have been allocated to manufacturing in the U.S., tools for increased productivity & the wage growth necessary to absorb the increased goods & services.
IMHO, no recovery will happen until the federal government recognizes this issue and puts forward the necessary policies to reallocate wealth in a productive way. I see no signs of them being even close.
But Jon, don’t you know that even though this a 75% consumer driven economy, that helping J6P increase his/her wages is just damn socialeest/commie thinkin?!
“…is..” *sigh*
One man’s “lost confidence” is another’s “realistically evaluating the situation”.
Reminds me of the daily “status” meetings I used to attend……. You had some guys who had no idea what was happening with their projects (because they were mostly out brown-nosing somebody) telling everybody that everything was hunky-dory. (Being on second shift, I had to follow these projects up).
Me, not being the “team-player” would say something like “Yeah? Well what are you doing about this?….And this?…..And this?”
About 75% of the time the project would finish late…….mainly for the reasons I had previously pointed out. Of course, the “quality lapse” was partially my fault, because “my pessimism meant that my crew wasn’t trying hard enough to complete it on time”
Just like this……part of the problem is due to “pessimism”. If there is any lost confidence, it is in the business and government doobers whose highly-compensated management of this mess has painted us into this corner.
“It’s a big $#it sandwich, and we are all* going to have to take a bite…..”
*- “All” meaning “Mr. Joe Dumba$$/MiddleClass/6-Pak-Taxpayer”
“Animal spirits.” This has to be the biggest con job in economics.
Yeah, I want the same “phenomenon” that go into this mess to continue.
I don’t want people who let emotion overrule reason, controlling things.
Goooood Morning!!!
How are you tightwads doing today?
You guys are really starting to effect me!
BTW,
Anyone on here ever had a house built on say an acre of land? I am interested in stories of what happened, what was bad, what was good. I am hearing through the grapevine of houses appraising for less that what it cost to build it with the land….
I am not First…i am such a loser next to you…
LOL,
We are two losers in a pod
Stepn2me –
I don’t know if I consider myself a tightwad (I can assure you my wife does not), though some of my posts may suggest otherwise. I just like to throw as little hard-earned money as possible down the financial black hole of the Real Estate Industrial Complex. Doing so requires the ability to see the lie in nonsensical platitudes such as “renting a home is just throwing away money” or “real estate always goes up.” It also requires a certain amount of personal financial discipline, such as not spending so much on your credit cards that you have to run a revolving balance and pay your creditors interest in perpetuity, or saving all the money you want to save off the top of your paycheck before your spouse sees any of it.
I want you to know that I really appreciate your posts, and hope the exchange of ideas here provides you with some respite from your challenging and dangerous occupation overseas.
Please,
Dont take my comments as disparaging. I mean NO insult to anyone. Actually, being a tightwad is a badge of honor for me as I didnt get into this housing mess.
I mean no disrespect toward anyone….
I took no disrespect from your comments
“before your spouse sees any of it”
Now ‘that’ should have been prefaced with a BOLD disclaimer! Like most small biz., I make my SEP contribution in the “Christmas Quarter”. You never know what kind of year you’re going to have?
I’ve never had issue (1) controlling ‘my’ spending, Mom… OTOH? Sound summation as always PB.
Heh. My wife makes sure I don’t see a dime of either of our paychecks.
(Okay, that’s not true. But I do get an allowance.)
sfbubblebuyer,
Is that a ‘bad’ thing? If my wife gave me money ( I’d only drink it? )
That reminds me though, after all these years I STILL can’t figure out what people that *don’t drink spend their money on!? I-just-can’t-figure-it-out.
I mean, can you buy a “new” bigscreen every… weekend? How many Starbucks can you ‘really’ actually finish? If I’m not going to ‘finish’ something, I guess I didn’t need it in the first place? ( Never had that problem w/ beer )
I spend mine on presents for the wife. And beer. Or wine. And DVDs. And computer games. And occasionally eating out with the coworkers at a place that exceeds my daily lunch budget. (We have a cafeteria that serves a passable lunch for 5.50 and doesn’t complain when you pile on the salad fixins.)
Having a separate account for dumb spending that is minimally funded makes it easier to keep tabs on that kind of thing.
Wow Stpn…calling the US Taxpayers tightwads !!
You DO realize that your next shipment of twinkies, Slim Jims and peanuts could be delayed not to mention other basic Army type stuff.
How far can you throw real rocks ?
LOL,
We have enough rocks around here! I keep twisting my ankle on em…..
I might build a rock house and sell it to a flipper..
Does that make ME a flipper?
Nope. If you build it, you are the developer. Possibly even worse than being the flipper.
Houses built of rocks can last for centuries, barring military demolition. I saw many examples of these last week in the Czech Republic.
The most accurate estimating is RS Means. It is the best estimating application out there. There are some others out there like Timberline but I’m not sure if it’s worth the $$$. Figure a structure for 45-$50/sq ft, materials and labor so long as you’re not paying any construction management(general contractors).
BTW, $45-50/sq ft is on your lot with village water and sewer. Otherwise add for well and septic. I’ve seen as high as $25/ft for rollerbit in rock. If the overburden is deep, you might get away with 10-15$/ft for auger bit.
What would you expect in times of falling land prices, falling labor rates, falling materials costs?
As crazy as this may sound..it may be CHEAPER to Buy and Move the house to the acre you want to live on…
And you could surely find something with character/moldings, real wood trim etc in an older house, then upgrade the plumbing/electrical and add sq ftg etc and voila, your own personal non cookie cutter manse.
Great move if you find some nice land and want to live there. Bad move if you plan to sell it since it usually doesn’t appraise for what you got in it. Make sure you pick a reputable builder that’s been in the area for a while and can provide references. Do your homework, don’t just pick the guy that turns in the lowest bid. Never ever pay large sums of money up front. Chances are that’s the last time you’ll hear from that contractor. When they get paid they consider the job finished no matter what.
Listen to him. Unless you’re a builder doing it yourself, building a place always costs more than buying a comparable house. Of course, you get exactly what you want, so that’s the premium you’re paying.
Never ever pay large sums of money up front. Chances are that’s the last time you’ll hear from that contractor. When they get paid they consider the job finished no matter what.
+ infinity.
If they’re buying materials/paying subs, make sure you get receipts. A lot of times you finish the house, pay the guy, and then a supplier or sub slaps a lien on the house because your GC decided to stiff them to enhance his bottom line.
Land prices are outrageously high in my area. The only ones stepping up to buy raw land to build are those with money to burn.
The house we sold four years ago was situated on 2 acres which went for $10,000 in 1970, about 5k per acre. That same lot would list for around $175k today. Have incomes in the US increased by 1600% since 1970?
Add to that the cost to build, and the extortionate taxes on new construction - only the money to burn crowd is buying ground today. And there’s not too many of them around, judging by the parcels that are listed and sitting unsold for years.
X-philly,
You ’sure’ you don’t live in Oregon? Sounds altogether too familiar. I think Mike in Miami has it right too, when the check clears ( I’m outta’ here! )
Rewind time back to the 70’s in Bakersfield,CA. One builder was building great houses on one acre lots. After some years he paid someone to fly him over his development and found that most people fenced off 1/2 to 2/3 of the land. He then started building on 1/2 acre
lots and later on 1/3 acre lots.
Out west it was harder to sell the larger lots because people didn’t want that much property. A doctor friend picked up a 1700sq.ft. house on 7 acres that sat for almost a year for $90K. Five acres was planted in walnut trees and the property had two wells. He divided the land with the house, sold it off and cleared some of the walnut trees for his new house and ended up free and clear.
The problem in much of the West, eg Bakersfield, is we don’t have the nice hardwood forests they have back East (at least it seems like every house I see on TV back east has a forest in back).
I have an acre and my predecessors put it all in lawn…ugh. So now we have to keep it up. Other large lots have just bare pasture with invasive weeds taking over..hard to grow anything without irrigation because we don’t get that much rain, so you need irrigation. Meh.
I hate my lawn. I live in Florida. I have St Augustine grass. It grows 6 inches a week. This time of year I have to mow, edge, weed-wack & blow off clippings at least once a week. This time of year it take about 2 1/2 hours and I have to do it 95 degree heat. Florida sucks in the summer.
Then land prices have further to fall, don’t they…
We bought our river property five years ago at
65% of asking price. We then went through a 2 1/2 year fight with the city for the proper development approvals and are now finalizing the final plans.
Because of the delay, we had time to re-think what we wanted and reduced the size of the house by 50% and upgraded the quality of construction.
That, along with lower prices for construction materials and labor, has lowered our projected
costs by 60%.
One of the better builders in your area;
Paul Bostic…
Rancher,
I keep forgetting, are you in Bonanza? Bly? Beatty? Stop me when I hit it. We’re heading down this weekend and I’ve been dreading it. The Annual PT Test ( do wish me luck! )
The wife really liked Bonanza. It reminds us so much of Molalla, OR. Complete w/ seedy taverns. Any line on some decent acreage down there.., cheap..?
Good luck, DinOR! Pass that test with flying colors!
Grants Pass. We sold our ranch located in the
Applegate valley a few years ago, perfect timing.
Stpn2me -
Take a look at this book if you’re thinking of buying rural property. It covers things like easements, water and a lot of things you might not think of. The link is to Amazon books, the title is “Finding and Buying Your Place in the Country”, by Les Scher.
http://tiny.cc/FfEnu
Thanks…
The reason I ask is I want to avoid HOA’s. I dont believe in someone telling me what I can and cannot park in my yard…
If only HOA’s ended at that… a friend of my has been fighting with the local HOA over… the color of his lamp-post. What frightening color is it? Natural wood color - the horror! Of course, the darn thing blends into the surrounding bush and ornamental Japanese Maple so you’d have to be insane to considering it a problem, but that’s the typical HOA for yah! And you get to PAY them to annoy you!
Well, stpn, what kinds of things,plural, are ya thinking of parking in your yard? How many, how broke down, how noisy?
It is when it gets outa hand that sometimes you ‘wish’ you had an HOA, or code enforcer as a friend.
In the early 70s had a neighbor that had a rooster-didn’t know that daylight was when you were supposed to crow-not 3am. And the kid had a motorbike he rode in circles around his house incessantly, noisily being the operative word. Long before HOAs.
>>>I dont believe in someone telling me what I can and cannot park in my yard…
Clearly you’re not married.
My parents have designed and built three houses in the past twenty years or so:
The first one was in the early 90s. It had some really high end features including a curved wall, “smart house” wiring, a solarium, and in-law suite. Just two years after completion, Dad got a great job offer from a new company who bought their house from them and eventually resold it for $100K less than what it cost to build.
The next house also had an in-law suite, but was otherwise a more ordinary house. My grandmother passed on about the same time Dad retired, so they sold and made a lot of money on that one.
They’re living in #3 now. Its a “too big for two” smart house on a lake. But… they own it outright and have no plans to move. They’re happy; they have a lot of long-time friends in the area and they’ve formed community ties.
Its not easy building. It worked for them because Dad is “handy” and has an engineering background. Even though they had extensively researched their GCs, they replaced their first GC on House #2 prior to construction. Being retired, Dad was onsite a good portion of every day for construction of House #3. They kept a tight rein on the money and the schedules.
You’d be crazy to build anything right now…We’re just getting started on the mother of all real estate fire sales. And it won’t be ending any time soon.
Agree.
The oldtimer builders in my acquaintance won’t touch land at the current prices.
Hope this doesn`t show twice
“How are you tightwads doing today?”
Fine thank you, but you got me thinking what someone would call a house owner who was asking for a cram down.
Cramwad?
Loosewad?
Shotmywad?
Anyway Stpn2me stay safe and thank you for your service.
Shotmywad?
ROTFLMAO
I’m doing fine!
Solar panels are going up next week — a short term expense, but one heavily subsidized, and an effective inflation hedge for power.
Rode a bicycle to work. Considering not replacing the 12-year-old Saturn wagon when it is paid off.
Looking forward to some home-cooked meals, and free entertainment in the parks, over the weekend.
No debts, having paid off the mortgage as fast as possible, and no worries about my own situation. Lots of worries about others I know, however.
WT Economist,
One of my friends calls his Saturn the “Plastic Fantastic Motorized Wheel Barrow”! He has a qtr. mil. miles on it and I hate getting stuck behind him coming back from Guard weekend.
( It smokes all the way, but damned if ain’t still runnin’? )
I saw a show on the boob tube a few weeks ago about Saturn. Apparently GM abandoned the labor concepts that were used to make sure Saturns were built as well as they could be by the assembly line workers. That was in 2001. Saturns are just rebadged Pontiacs and Saabs now.
Yeah, I heard that it was so successful the gm PTB (union and executive) had to destroy it lest it catch on and imperil their mediocrity. Personally I never cared for their cars.
Stpne2me;
I built a 2nd home (lake cabin, ok more of a lake house) on 3.5 acres with 155 feet of frontage on a 400 acre recreational lake in northern Minnesota (approx. 125 miles due north of the Twin Cities- Minneapolis / St. Paul). Here is my experience:
a) Bought lot in 1999 for $27,000.
b) Pulled building permit with county (Cost: $125)
c) Started shopping for subcontractors (found some good ones)
d) Had electricity put in (MN Power had to run an underground line from across the road to a new power pole with meter at the end of the driveway): Cost $600
e) Had slab put in
f) Contracted with framer to complete the “shell” (framing, roofing, exterior sheathing & tyvek wrap, windows and exterior doors). Found a great carpenter who only charged $20 per hour. Had the whole shell done, including roofing for $2600 labor, and $5000 materials.
g) Winter sets in, no work done
h) Early spring, I do all the rough-in electrical wiring, hire local plumber for rough-in for $800, well drilled for $5000, septic tank and mound style drain field put in for $7500, I do all the insulating, exterior aluminum soffits and fascia, and put on all the vinyl siding.
i) Late spring, I do all the sheetrock hanging, tongue and groove knotty pine, electric fixture installation (including recessed ceiling lights), hire out the sheetrock taping/mudding (had a contractor quote me $2700, I argued and told him that based on my estimates it should not be more than $1000, we agree on $1200).
j) Early Summer, I contract the flooring out to Home Depot (they install vinyl flooring in the kitchen/dining, and carpet for the rest. I hang doors, install plumbing fixtures, bathtub/shower (2). Cabin is essentially “done” and we have a certificate of occupancy at this point.
k) Late Summer, build huge deck.
Total invested $97,000 (including land), not including my labor.
3 bedroom, 950 sq. foot 1 and 3/4 bath with washer/dryer, central a/c, 80% efficient forced air propane furnace, water softener, satellite tv, boat lift and dock.
FFwd to 12/01- I was activated on Title 10 duty from my part-time weekend warrior Aircraft Mainteance Squadron Commander role with the Air National Guard to go work at Andrews AFB at ANG HQ CAT (Crisis Action Team) as Exec. Officer. Spent 9 months on active duty for OEF (operation enduring freedom) and ONE (operation noble eagle). Returned Fall of 2002 to my former civilian employer. Get laid off in December, out of work until January, start working again for a lower salary. Had to sell cabin in 2003. Sold 9/03 for $160,000.
Woman who bought the place had tried to sell it, started at $379,000 in 2004, it is now on the market for $219,900. Since I have redeemed myself since then and work for a company that actually pays well, I am in a position to buy it again. But not at that price!! I would consider offering her $100,000 though.
There is another lake house on the same lake for sale, it started at $279,900 and is now at $160,000 (still not selling) and it is considerably bigger than my old place.
I certainly learned a lot by being the general contractor, and was fortunate to find subcontractors who were reasonable while also doing a lot of the work myself.
It is another story if you are building your primary residence. DId this once, it was the most stressful period of my life (ok, 2nd to working 16-18 hour days 6-7 days per week rotating shifts at Andrews AFB for 9+ months…). I would consider doing it again IF there was no pressure to “get it done” due to deadlines associated with having no place to live.
Best of luck to you. C-130’s rule!
C-130 rollin down the strip
Airborne daddy on a one way trip
Mission top secret, destination unknown
dont even know if I am ever coming home
C-17 flying over division
I dont give a sh*t about a weather decision…
Jumpmaster picked me up with ease
threw my airborne a** into tha breeze
A is for all the way
I is for in the sky
r is for rough and tough
B is for born to die
o is for one the go
RRRRRR is for RANGER
N is for NEVER QUIT
E is for ever
What cha got? AIRBORNE!!!
Great…you wake up one Airborne Officer and then they’ll all be singing. Then they’ll wake up the Marines.
It will be worst than the “Dancing Chipmucks” in here before long.
Ooops…”All the Way Sir !!
Wake up the Marines? Wait! I was a Marine. Was I asleep?
Roidy
tgun
“Best of luck to you. C-130’s rule!”
Amen!…What a great comment about that beloved legendary “Great Iron Bird” and the wonderful people who keep them flying.
Good post about building up north. Sorry that you sold up there.
Best of luck to you too.
C-130’s DO rule!…and so do all of the guys and gals that keep them flying.
Your cool last comment just made an old paratrooper smile. That’s all.
No problem Mikey-
Glad to make your day. Yes, I miss them too; although I never had the opportunity to actually bail out of one…
Been on C-130s and C-141s during actual airborne ranger drops however.
Roughest one was over the panama canal zone area in 1983, formation of 6 C-141 loaded with Rangers from Ft. Bragg; we’re orbiting the drop zone (over water), the doors are open, the wind blowing through the plane and being buffeted by turbulence. Just about lost my cookies.
The Rangers were highly amused since we declined their earlier offers of dramamine…
Have a great weekend.
Just check out the HOA’s if one even exists, on a potential house before ye buy.
I live in a nice neighborhood now with very loose guidelines. Our old neighborhood was a wee bit tighter (color of house, roof shingle color, percent of brick/stucco veneer on front of house, no trailers or rv’s parked in driveway, etc.).
However, once all the lots were sold and built up, the HOA (dissolved). It was nothing more than written convenants, with no teeth for enforcement. Besides, who could enforce it? The real estate used house seller agency was long gone.
There are no HOA fees where I am at now nor where I was. Simple Single family detached homes on a 1/4 to 1/3 acre suburban lot with city sewer/water.
Hmm, I wonder how many HOA’s could just vote to dissolve themselves. Is there state law requiring these things to exist?
Glad I’m not in one.
Also, in this economical cycle, down, double check to see if your HOA is solvent. I know of a few that the re person quietly alerted me that some HOAs are in bankruptcy. Bk????????????whew.
I just revisited John Makin’s monumental WSJ Op-ed piece from a couple of days back. I keep mulling over the concluding paragraph:
A Government Failure, Not a Market Failure
John H. Makin
July/August 2009
As a people we need, at all times, the encouragement of home ownership.
HERBERT HOOVER, 1932
…
The long-term solution is for government to stop playing favorites, as it has for decades with housing. Home ownership should neither be penalized nor favored under government policy. We have seen how that distortion led inexorably to a degree of wealth destruction we have not seen in our lifetimes. The distortion of the market introduced by government intervention can and must be brought to an end. The market that would take its place after this dramatic and admittedly difficult change would allow Americans to allocate their resources more effectively. It would no longer create an unjust advantage for the wealthy homebuyer. And it would, finally, make it possible for Americans to see their homes as they should be seen—not as investment vehicles, but rather, as the places they live, the hearthstones of their families.
I am deeply struck by the observation of how one ignorant remark by a sitting US president can lead to doomed policy for decades hence. And given my agreement with Makin on the pernicious effects of government intervention on housing market performance, I cannot help but cringe at the degree to which unlimited amounts of intervention are currently underway in a frantic effort to offset the collapsing bubble’s mean reversion to a fundamental market equilibrium. Apparently top policy makers either missed this Op-ed piece, or disagree with its findings.
Or is it rather that Makin missed something important in his analysis? How would our Congressmen fund their political campaigns without sucking money in perpetuity out of subsidies conferred on REIC constituents?
Market distortion case in point:
Wall Street Journal
* JULY 10, 2009
Mortgage Firms Prodded to Modify More Loans
By RUTH SIMON
The Obama administration is pressing mortgage-servicing companies to step up their efforts to modify troubled loans under its housing-rescue program, the latest sign of frustration with the pace at which mortgage companies are reworking troubled loans.
“We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share,” Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan said in a letter to 25 mortgage-servicing firms.
The letter was sent Thursday to the chief executives of companies that have signed contracts to participate in the government program, which provides financial incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels.
More than 270,000 borrowers have received modification offers under the program. But housing counselors complain many borrowers are waiting for help as mortgage-servicing companies get up to speed. The administration has said its program could help as many as four million homeowners.
…
What percent of the officially-advertised number of potential beneficiaries has been helped thus far?
100*270,000/4,000,000 = 6.75 percent.
If you live in a non-recourse state and you get your primary mortgage modified does that count as a refi and therefore subject to recourse or is it still considered your primary (walk-away-able) loan?
I suspect the lenders will write a new loan thereby positioning themselves for a possible deficiency judgement…I spoke to this in yesterday’s Bit’s…
You suspect, but does anybody know? It seems to me an important distinction. I suspect it does too. It’s too perfect a way for pols and banks to set the hook as it were and look righteous while doing it.
Not sure about that one - depends on if a new loan is created. That is why I would not do a mod just to save a few hundred bucks if it is a true re-finance. The right to repudiate the mortgage if I have to move away and the house is worth only 50% of what I bought it for is more valuable…
Hey, I saw KMFDM in Seattle once of all places.
“100*270,000/4,000,000 = 6.75 percent.”
Considering the data on how many of these re-defaulted within six months of the mod, I would argue that far fewer than that figure were actually “helped”.
Ah, but the bankers squeezed more blood from the stone, so all is good!
By the bankers, for the bankers - our new motto!
The Match King,
Frank Partnoy,
IVAR KREUGER… first and biggest and one to start all the derivatives, fancy schmancy offshore stuff.
“Ah, but the bankers squeezed more blood from the stone, so all is good!”
Actually, I would argue that the bankers lost more money due to the delay associated with the modification. The collateral likely went down in value during the extension period more than the additional cash-flow brought in by having the “owner” pay a few more months due to the modification.
Predictable result of bubble reflation interventions currently underway:
- Specuvestors come back in to the owner-occupied housing market in an attempt to milk the subsidy cream out of housing price movements, producing a dead cat bounce.
- The (national US housing) market experiences another precipitous drop going forward once the subsidy cream is milked away and the next rush of specuvestors to the exits commences.
Yep.
Exactly what happened with the Nasdaq after the dot-com bust. A bunch of bounces, with each resulting in a shallower drop but to a new low, and each longer drawn-out than the previous. The same is happening now, except in much slower motion. Nasdaq took 2.5 years to bottom - housing will probably take 12.5 years.
“…housing will probably take 12.5 years…”
Yegads — I have to revisit my renting strategy, as till recently, I had assumed that housing would be affordable again by 2011 or so. Thanks to the effect of policy interventions underway, the bubble will take much longer to unravel than if Mr Market had been allowed to work his magic unhindered.
the bubble will take much longer to unravel than if Mr Market had been allowed to work his magic unhindered.
Ding Ding Ding Ding
We have a winner:
“Magic Bubble Unraveling” takes the Litmo (Literature & Gitmo) prize for most tortured metaphor before 7AM.
Congrats.
Well - don’t confuse “affordable” with “bottom”. Affordable of course is a relative and subjective term - but in general housing will become affordable before prices actually hit bottom; much as stocks became “affordable” before they hit bottom.
If you’d have bought Nasdaq stocks in May of 2002 you’d have still seen a significant drop before the Sept 2002 bottom, but if you’d have held on until 2004 you’d have been back in the black again by a good amount.
Housing will be a very, very long bottom I think. Much like all the previous bottoms. If you look at the small previous housing bubble - late 80’s/early 90’s - the peak-to-trough on that was exactly 7 years. But the trough was very wide and shallow, such that the bulk of the price drops were at the beginning.
Link to graph forthcoming…
graph of Case/Shiller data
Prices are almost back to pre-bubble levels, but I’m quite sure they will overshoot, and probably by a lot.
IMO if you’re looking to buy 2011 may not be a bad time - probably 98% of the price drop will have occurred by then. The remaining 2% may take 5 years :), and as such be just noise amongst other factors.
(Talking in inflation-adjusted terms here BTW)
“graph of Case/Shiller data”
Casual inspection of their graph suggests the following:
1) At an inflation-adjusted index level circa 130, US home prices are still higher than at any point before the bubble inflated, going all the way back to 1900.
2) Prices through the end of your graph were still dropping at near the fastest rate on record, with no sign of bottoming out.
3) If, by some miracle, prices don’t overshoot, then they have about another 20 percent drop ahead to reach the long-term average level post-WWII (circa 105).
Supporting Calculation:
100*(130-105)/130 = 19.2 percent
4) If prices drop back to similar levels to those of the period from 1920-1943 (75 or so), then they have a further 40+ percent drop ahead.
Supporting Calculation:
100*(130-75)/130 = 42.3 percent
Try not to catch yourself a falling knife.
P.S. My comments above pertain to the national US housing market. Bubbly coastal areas are likely to fare much worse.
2) Prices through the end of your graph were still dropping at near the fastest rate on record, with no sign of bottoming out.
It is worth noting that this is quarterly data, with the latest being Q1, so it’s over 3 months old. The monthly April data (not reflected) did show a tentative slowing in the rate of decline. I think this is reasonable given that it about coincides with when any affect from the housing stimulus would kick in.
Nonetheless being that those effects are temporary - such a flattening, while accurate, is premature.
Bubbly coastal areas are likely to fare much worse.
Indeed, core Bay Area prices have started falling but are still double to triple what they were during the 1990s. From what I can tell, the same is true of coastal SoCal.
Although I believe that over the next year these areas will finally begin to capitulate in earnest, it’s still going to be a long ride to the bottom. I don’t expect to consider buying until 2012 at the earliest.
From what I’ve seen the further out you get from the major cities prices have become somewhat sane but it’s an entirely different story in Marin, SF, peninsula down through Silicon Valley still obscenely expensive / overpriced IMHO. I think these areas still have quite a long ways to go and we are still early in the game per se.
Virginia Beach / Norfolk seems to still be very overheated. Still up 100% over 2001. Median household income went up $20K from 01 to 07, median home price went from like $150K to $330K.
Yah, on the peninsula it’s pretty entertaining. A lot of the areas are down 20%ish and pretending like they’re not. Houses come on at 1.2 million, get reduced down to 990k, sell for 975k or something and realtors use that as an argument to say the peninsula is down less than 5% because houses are selling at 95% of asking.
So when my wife and I see a house we’d actually LIKE to own and suggest offering another 20% off, the Realtors all groan and moan and complain. There is nothing I hate more than arguing with a realtor about the price I want to offer. Shut up and write the contract, or tell me you don’t want to work with me and walk away. I’ll find another realtor who needs a paycheck to submit my lowball.
I generally concur with what FPSS said in a recent post about the housing market versus the stock market. The housing market behaves in a very similar fashion, if you collapse the time scale — i.e., what can take place over a period of days in the stock market can require a period of years to play out in the housing market. Failure to understand this difference in price dynamics costs many a US household dearly in terms of long-term financial security.
There are a lots of overlaping factors and potential blowbacks for the the damned, innocent and the plain stupid going over the cliffs in this FIRE fiasco.
I suspect that we will see people and businesses in freefall into the abysis along with bloody fingernails left in the walls, as well as a lot of clinging along with the slow sliding in other areas.
It could go on for a long time as the bulls, FB,GF and the other Crispy Critters are driven over the edge. I just hope that the PTB will finally realize that they cannot be saved and don’t sacrifice all of us in the attempt prevent these fools from the inevitable.
In any event, I’m trying to well stand, watching and am prepared to shake my leg vigorously if i feel any little claws hanging on my pant legs.
that’s supposed to be “stand well back”
all this puter, typing, reading, spelling, making sense and then clicking stuff confuses me. I ain’t quitting though, I’m just going back into the cave for more coffee and a Balloonasaurus Rex Burger and I’ll be back.
Smart people CAN’T run me off !!
Removing the mortgage deduction is always a non-starter when talking about government interference in housing.
Removing the mortgage deduction is always a non-starter ??
Not so…Its under constant pressure…IMO, the likely outcome will be a severe curtailment of the mortgage interest deduction cap…Now at 1 mil, we could easily see it reduced to $300,000-$500,000….I would bet that if you take the mean average of housing costs in the counties that surround Washinton D.C. and add 20% that will be the new mortgage interest cap…Most of the country would fall below this mean so it will be “politically” doable…High costs area’s will take another body blow are going to squeel like stuck pigs…
Who is proposing a change in the mortgage deduction cap?
Who is proposing a change in the mortgage deduction cap?
Politicians looking for revenue…
I’m for removing mortgage interest deductions for second homes, motorhomes, etc. I would also favor a mortgage interest deduction cap for homes over $300K or better yet remove the deduction entirely. Maybe you could use it like depreciation on a rental, must be paid back when you sell or if you sell before 7 yrs.
Pretty sure there is currently no mortgage deduction on second homes. If by “motorhomes” you mean RV’s - I don’t think there’s one for that either.
The mortgage deduction extends to a second home (but not a third), provided that the total debt between the two does not exceed $1 million, and that the second home is not used as a rental property. (I assume if it is used as a rental property, mortgage interest would still be effectively deductible as a business expense, but I could be wrong about that.)
jbunniii,
Therein lies the problem. When it’s to my advantage to show the property as a “rental” well then that’s what I’ll do! When it pencils out in my favor, well then it was my primary residence?
Remember, you need only have “resided” there for -any- (2) of the last 5 years to “qualify”. It’s a deal too sweet to pass up. That’s why according to NAR’s own statistics, 35%+ of homes sold in 2005 were 2nd homes. It isn’t even a matter of FIFO or LIFO, it’s a shell game based on the “honor” system.
It’s roughly the equivalent of placing shares you purchased in 1975 into your IRA, not cash. But it’s a “level playing field”.
I don’t agree it is always under pressure, but you are much more likely to see it converted to a credit (at 20% or so) than see it capped at the interest on a $300K-$500K mortgage. So a person who makes big bucks would see less advantage (20% credit on amount paid gets them less than they would get with a deduction if their marginal tax rate is 35%) and those with lower incomes would see more advantage - partly because 20% is greater than their marginal tax rate but mostly because they would get their entire standard deduction in addition to the credit.
Any effect on the 35% marginal tax rate person is conditional on “fixing” the Alternate Minimum tax.
Certain boats also qualify as the “2nd home” and therefore are elegible for the mortgage interest tax deduction.
Boat has to have a “stove”, and “bathroom”. Portable alcohol stove and portapottie qualify!!!
So, you can buy an overpriced cuddy cabin boat (say in the 21 foot range), add the alcohol stove and portapotti, and you can deduct the loan interest.
Not that I am recommending that (after all, cash is king again), but I am quite certain that there were MANY FB’s who did in fact participate in this floating 2nd home game.
“As a people we need, at all times, the encouragement of home ownership.”
Sure, home ownership is great. Home debtorship is another story.
*Absurd observation alert
The lady next door always asks me to do menial tasks because I’m a “big” and “strong” “young” man. Can you imagine if I went around asking the same of women?
Hey lady! Can you help me _______ this right here? . You’re so healthy and fit, that it would be better if you ________ it. I’m tired of _________ this by myself. And when that’s done, I’d love it if you ________ my _______ . That hasn’t been done in weeks!
People should really think twice about asking for favors based upon physical properties.
Also, this lady quizzed me on my families’ future plans, this making the percentage of neighbors trying to “help me out” by selling us their house 100. No thanks.
Lady, I’m not interested in ________ your ________ just because you can’t afford the maintenance.
Muggy, c’mon can’t you see she’s trying to hook up?
“Oh Muggy, you’re so healthy and fit…”
“can’t you see she’s trying to hook up?”
I guess. Where were all these cougars when I was childless and single?
Somewhere in the Great Playbook of Life is hidden Rule #142:
Best opportunities for hookups present themselves when one is already “attached”.
If a man is already attached, women find the man much more desirable(after all he must have something going on to have already attracted a women).
Unattached interested men aren’t as much of a challenge and therefore aren’t as desirable.
That’s like banks and credit. If you already have a credit card, they will give you another. If you already have a loan they will extend you another. But if you don’t you’re on your own.
Ain’t it funny that when you are taken you become such a hot property.
“when you are taken”
Taken is waaayyy less important than “with child.” Since I work from home, I am able to spend a lot of days at the park and whatnot. Having a cute baby is like proof of performance — women see that little guy and they’re ready to go. My stories don’t even compare to my buddy who lives in Brooklyn and hangs out with his sprog in Prospect Park all day. He’s basically propositioned…
Watching my own wife, and meeting other women has made me realize how powerful the nesting instinct is, and how truly awful the Suzanne ad is.
ET, do you sense this as well? Are you more desirable now that you gots chillun’?
Having a cute baby is like proof of performance — women see that little guy and they’re ready to go
Hrm….so maybe a dog isn’t the right tool for the job…I should produce (or more likely borrow) a baby to woo the ladies?
Hrm….
Don’t produce, just babysit a friend’s chillun and a puppy to boot, You will be set.
Seems to do the same thing for women attracting men, but not in parks, following story, tune out…
Funny, but a number of yrs ago, women who had children weren’t such a hot commodity, but something changed. It seemed that then and now, men want someone to take care of them, and voila, single women can’t get a 2nd date, and it is much much harder or was, much more difficult to attract someone who wanted marriage/family. They didn’t seem to care that a woman had property, good job, healthy mind frame( I understand that is subjective)good shape, and traveled, fun, not loaded down with a horrible ex etc.
This subj came up a few times with all the single working women friends on either coast in the 80’s.
Beware of women that are that “into” babies- unless you want one too! A baby that is, and with her.
Be careful! Ask Air McNair how that whole ‘wife and kids at home and sexed-up lunatic at the bachelor pad’ thing worked out for him. I’ve got enough estrogen-related issues at my house with just ONE wife!
lol. I’ve been married for 16 years and can never imagine going through another marriage. 1 is definitely enough. I am in a financial position that a lot of middle-aged (and still quite attractive) ladies let me know that they are available for the full sugar daddy experience.
I’m like “what exactly do you have that my wife doesn’t? Uh nothing! That’s what I thought.”
“can’t you see she’s trying to hook up?”
“I guess. Where were all these cougars when I was childless and single?”
Still busy chewing on bones and red meat of their 1st victims ?
Ooops…I think Big V is going to hurt me …again !
Lets ask the relevant important question: Does she have large breasts?
“People should really think twice about asking for favors based upon physical properties. ”
So don’t do it for her. I have short friends ask me to get stuff of of shelves. I ask small friends to crawl behind tight spaces for wiring. I have gotten jobs because I can lift 100 pounds.
Now my question is: Is she physically able to do the tasks, and is just trying to get out of it, or is she genuinely unable to do it? For instance: Hey, can you move this piano? VS hey, can you weed whack my lawn? May have entirely differing reasoning and motivation behind them.
You meant to say, in order to keep this relevant to the blog, does she have great big….tracts of land?
‘does she have great big….tracts of land?’
Ah yes, nothing better than a Monty Python reference first thing in the morning.
I remember the term, if there’s grass play ball!
Also, if she has a private landing strip, you can tell her about your “plane” and ask if you can use her landing strip…
sorry, it’s “if there’s grass on the field, play ball”
LOL. Priceless but you need to pronounve it correctly
Huuge Traacts oof Laaaand
But father? What if I dont like her?
LOL, OK, don’t even get me started on Python quotes
I loved the scene with the two confused guards…priceless…
“Can you weed whack my lawn?”
Is that what they are calling it now?
I was just getting used to “hooking up” and “friend with benefits”.
So ask her to bake you an apple pie.
Naw. Depending on the person she might enjoy it. Ask her to do your laundry. A pie is like a gift. Laundry is work.
Okay you guys, ya want to start that game?
I hope not.
stpn?
I’ll gladly do my own laundry if someone will bake me an apple pie- with homemade crust and some sharp cheddar in the top crust please.
To unfairly generalize, when men ask for a favor, they’re admitting weakness. When women ask for and get a favor they’re leveraging their sexuality and proving their power to get others to do for them. So men are, in general FAR less willing to ask for help, directions etc than women are. YMMV, etc…
Speaking of women using their sexuality…..
Here in Afghanistan, some coalition partners (read the canandian, french, dutch and the Swedish..oh my god the swedish) can wear civilian clothes off duty. The americans cannot. So what you have is alot of blond and brunette 3’s and 4’s who wouldnt get a second look in the states or canada all of a sudden becoming 10’s and 11’s in a war zone. Because of the heat and round the clock exposure to the sun, they take advantage to get a tan. So they lay out in their country area’s in bikini’s and thongs cooking themselves in the afghan sun.
Not a problem. But it is so funny to see a woman surrounded by men here, looking like she is LOVING the attention she gets when the odds are in her favor. You see them walking on the board walk in flip flops, short shorts with a wife beater shirt one size too small. One walked by me with that “I am so hot(sexy)” look, which she was, but I said to her, “Now you know that isnt fair”
I am not playa hating, I just hate the game…..
One saying we have is that on the plane back home when it lands, men love to ask women like this, “How does it feel to be ugly again?”
Just noticing the double standard…
Just noticing the double standard…
It’s called a double standard because it’s twice as true.
Here is my own little gender “equalizer”:
MEN: Always put the toilet seat down after you finish the job. The lid, too. That way they have to bend over and lift the lid, just like we have to lift that flat white donut.
I do this because it has always bugged that men are forced to lift the seat when gravity works so much better. A woman can use a pinky to lower the lid…
So return the favor. Make em’ lift the lid.
Ya know, stpn, that brings up some serious ugliness on the part of the enlisted that I have known, officers that did pig night at the officers club. That is so &*() rude. Someday it will come to bite, those thoughts and words that “you” guys say or use.
“One saying we have is that on the plane back home when it lands, men love to ask women like this, “How does it feel to be…”
Men LOVE ???to ask women…WTh.
Now lets get back to real estate or related topics.
One saying we have is that on the plane back home when it lands, men love to ask women like this, “How does it feel to be ugly again?”
These would be the men so spiritually or physically deformed that even ‘ugly’ chicks wouldn’t put out for them?
HAHAHAHAH!
And Muggy, you ought to be thrilled that your wife ‘nests’. I bet she takes great care of you and your little-man, and soon, your little-gal. I bet she feeds you good and makes sure everyone has a blanket, and frets about your electrolytes.
If she didn’t, you would be a part of the vast legion of lonely guys with hungry eyes who just wishes a human with a p*ssy would speak to them kindly and feed them a good meal.
So men are, in general FAR less willing to ask for help, directions
—-
when my girlfriend asks someone for directions to an aisle in a store, she always finds someone interested in a sales spiel, that usually involves me having to pay attention and answer questions she doesn’t know the answer to, but is interested in.
So I’d rather wander around the store than listen to the salesman. both take the same amount of time.
Muggy,
All the kidding aside, I HEAR you bro. In our complex of 5 units, there’s only (2) husbands. 2 divorcees and a widow. The really annoying part is that they somehow think you’ll be ‘flattered’ to be called upon?
Hey lady! Navy stands for: Never-Again-Volunteer-Yourself! Look I -have- a wife to boss me around critique my every decision. I don’t need YOU!
Don’t they ever stop to consider it ‘may’ be awkward for your WIFE! How’s ’she’ supposed to feel? Oh, he put my chores on the back burner so he could attend to ‘yours’? I don’t think so. I end up taking the recycling to the curb nearly every week! Who do these people think does that exactly, the “recycling fairy”? I hear ya’ bro. Enough.
Thanks, Dude. We can have our secret, bitter little club. Maybe we can share evasion techniques, like how I always look to see if her garage door is up before I get the mail.
My wife thinks I’m a complete a-hole for even thinking about stuff like this. I asked her, “what if some guy just came up to you and demanded physical output just because you can.”
She said, “nobody would ever do that.”
EXACTLY.
“I always look to see if her garage door is up before I get the mail.”
I didn’t mean it that way.
Muggy…did you see this from last night?
I worked for this guy when i was a pup:
http://www.idelsounds.com/page/Gershon+Kingsley
Cool, DJ. Way cool.
We can have our secret, bitter little club.
You can call it: “‘The Co-Dependent Ween*ies Who Can’t say No and Who Also Haven’t Gotten Any in Wayyyyy Too Long.”
No, no—don’t thank me. I exist only to serve.
And now if you’ll excuse me, I’m going to go look in the mirror at my adorable self and whisper endearments at my reflection, because that’s so fun. Even for me, who already knows what I look like.
Jerks!
Well this is the first thing I teach a new DJ, how to read a map, and to listen to the all news station for traffic reports and understand them.
What good is a dj who is late to a wedding or a surprise birthday party?
———————————————————
So men are, in general FAR less willing to ask for help, directions
In addition to being slender of build, I am also short of stature. But I’m not afraid of doing heavy work. And I do work out in a weight room several times a week. So, ask me to help you move your heavy-whatever.
But I’m not afraid of doing heavy work.
I am. I don’t want to damage my pretty— since that’s about entirely what men value, and those simple dingle men thingies run a lot of water quality programs and so forth and simple stuff appears to work great on them.
AND, even more importantly, I don’t want to damage my back. Spines aren’t like asparagus: they don’t come back every spring.
I learned this from observation.
So here’s my opinion: You oughtta stop trying to move heavy stuff in order to prove yourself, you cute lil’ skinny midget*, you.
*And I mean that in a super good way. Yes, really.
LARGO — Pinellas County’s new $23.6 million park will have something for just about everybody: nature trails, ballfields, a dog park, playgrounds, wetlands and citrus groves.
But don’t line up just yet.
While construction of Eagle Lake Park in Largo will be finished five months ahead of schedule, the county says it’s too broke to open it before April.
BTW, Florida is absolutely off its rocker when it comes to “building” parks. Most places just require some parking, a bathroom, trailhead, etc.
I think “supersized” parks are another extension of the bubble.
All you (original) Sim City players out there - what happened to your city when you built too many parks?
“what happened to your city when you built too many parks?”
Ooh! I know this one!
You become governor, get your own private jet, free condos, and trips to South America!
If I recall correctly, the mayor of Largo, FL was vehemently opposed to this park when it was proposed back sometime around 2001-2003ish.
He was bellyaching about the lost potential real estate tax revenues if the land was used for single family housing.
It was one of the largest contiguous parcels of land left in Pinellas.
Over here in Brevard County we are building a $35 million park! WTF! They are in the middle of construction and are determined to open it on time and staff it up. In the meantime, the County is producing a budget cutting 200 people in other departments, jacking up health insurance and cutting pay through furloughs by 10%.
Well, they’ll have to put those homeless people somewhere!
Home Sellers in U.S. Cut Prices by $27 Billion, Trulia Says…
July 10 (Bloomberg) — U.S. home sellers cut the prices of their properties by a total of $27.1 billion as the recession and rising foreclosures curtailed demand, Trulia Inc. said.
One quarter of sellers with homes on the market as of July 1 reduced their price by an average of 10 percent, the San Francisco-based real estate data provider said today. Properties listed for more than $1 million had the biggest cuts, with owners taking about 13 percent off the asking price.
Prices of existing U.S. homes dropped 17 percent in May from a year earlier, according to the most recent data from the Chicago-based National Association of Realtors. The decline helped boost purchases 2.4 percent to an annual rate of 4.77 million sales, NAR said.
“Sellers just have to discount their prices to reflect what’s going on,” Pete Flint, chief executive officer of Trulia, said in an interview. “Price reductions will stabilize the market, but I think we’re still some way off.”
The average discount on homes priced for less than $1 million was 9 percent, Trulia said.
In 2007 and 2008, “the lower end of the market was clearly cratering with subprime,” Flint said. “Now you’re seeing the top end of the market with price reductions.”
Among the 50 largest U.S. cities, Jacksonville, Florida, had the biggest percentage of discounts, according to Trulia. Sellers there slashed prices on 39 percent of homes for sale. Boston was second at 35 percent, followed by Minneapolis at 33 percent.
Florida, Nevada
Among cities hurt worst by the U.S. housing slump, Las Vegas and Los Angeles both had price cuts above the national average, Trulia said. The average reduction was 16 percent in Las Vegas and 12 percent in Los Angeles.
Trulia collects data from brokers and agents, third-party providers and multiple-listing services. The closely held company’s database includes 3.5 million properties.
Trulia excluded foreclosed homes and undeveloped land from the survey. It looked at all properties for sale as of July 1 and calculated how many had been listed for a higher price at any time since they were first offered. Some prices were cut more than once.
Sleazeball Homes… Screw’um take the money…
At Beazer Homes, It Was See No Evil and Pay No Penalty
Published: July 9, 2009
For years, Beazer Homes USA was much more than a builder of houses. It was a veritable crime wave.
The company defrauded buyers, particularly poor people being sold homes they could not afford. It defrauded the federal government by getting government-guaranteed mortgages for those buyers. It created subdivisions now dominated by dozens of foreclosed homes.
And while it was at it, Beazer lied to shareholders about how much money it was making. First, it lied by claiming it was making less than it was. Then it lied by hiding losses when the housing bubble began to burst. To keep the lies going, the government says, the company prepared fraudulent documents to mislead its auditors.
Last week, Beazer settled the legal problems stemming from its crimes. It entered into a remarkably generous deferred prosecution agreement with the Justice Department, in which the company will pay $15 million, and perhaps more if it manages to earn profits enough and does not decide to file for bankruptcy.
Some of that money will go to defrauded homeowners, assuming they file claims and submit evidence. No money is to go to lawyers who help those homeowners, however. If the company knows a particular customer was defrauded, and by how much, it is under no obligation to point that out to the customer.
Harry Truman used to say, “The buck stops here,” meaning that the president took responsibility.
Beazer could have a similar slogan, but with a very different meaning. The bucks have continued to flow to the top, but the company thinks the responsibility for the crimes lies elsewhere. Heads rolled among lower-level officials, but the chief executive and chief operating officer have kept their jobs.
The board — all of whose members were there when the crime wave was under way — has not changed at all.
wmbz,
Shout it from the rooftops brother! Yep, nothing to see here folks, move along. Do you have the original link sir? That’s a keeper. But there’s no need for REIC reform. We just need more homeowner incentives.
NY Times bizznezz section. Front page, above the fold. Read it on the train this morning.
http://www.nytimes.com/2009/07/10/business/10norris.html?_r=1&ref=business
AMEN. No one at the top is penalized, just the folks that took the orders below. All to familiar. Money flows up? Always.
“heck of a job, Brownie”.
“Fraud. It’s Job One!”
“How often does the government have to be wrong, and how wrong do they have to be before people and the media stop taking them seriously?”
It really doesn’t matter how wrong they are because they have considerable power, and knowing what asperations they wish were true/lies they’re attempting to peddle is an indicator of their future actions.
The idea that there’s some unheard majority which doesn’t like the way things are, or is not served by the way things are, is fantasy.
A citizen (or group) expects and demands his/her govt representatives to win some benefit or gain an advantage for that person. Everyone and everything else can go to hell. This is the system we have and it’s the one we deserve.
joey,
Well said. I want to rec. everyone rent “There Will Be Blood” this weekend and see what ‘real’ Americans once looked like? I also hear they have (1) on display at The Smithsonian.
Also the book, The Family.
Food Inc, award winning documentary.
And your recommendation are really good stuff.
IIRC, Daniel Day-Lewis won an Oscar for his role as the main character in There Will Be Blood. Great movie, but I found it hard to watch.
Not sure I agree with the premise that as an uber capitalist and hard working driven man you have the right to exploit, beat, and kill those around you. But hey, most did. Ford had a heavy (Harry Bennet) he kept around to handle uppity workers who got out of line.
Politics is about using other people’s money to impose your values on everyone else while enriching yourself. Nothing new here.
A system where everybody votes their own “selfish” interests is probably about the best we can come up with. The danger lies in people being altruistic and ready to die (and kill) for the “greater good”, whatever that may be (see: Mao, Stalin, Hitler, etc. ad infinitum). The problem is that no one truly represents these selfish interests of the people but instead the selfish interests of the banksters.
hmm.. so we live in a country where nobody represents the interests of the “people”.. really?
(Just to avoid the argument, I’ll concede that banksters, industrialists, the wealthy and whomever else you’d like to name are not actually people, and are therefore not entitled to government representation.)
You speak of Mao, Hitler and Stalin.. and that’s fine… but realize that your “problem” as described could well have fallen from their lips.
I was merely pointing out that idealism isn’t always ideal and selfishness (or if you prefer “the pursuit of happiness”) isn’t necessarily a bad basis for governing as long as it is the majority’s(aka the people’s) selfish (and, yes, rational and long-term) interests that are being pursued, and not the selfish interests of the banksters (who, of course, are also people, but -important point coming- are not the majority). Hardly novel thoughts. I’m not saying we should send the banksters to the gulag, I’ll leave that to the idealists.
no.. you’re got it backwards. Good government protects and supports the minority, not the majority.
The majority has innate majority power, and is quite capable of taking care of itself. It’s capable of taking anything it wants by force. It’s capable of majority-voting for whatever it desires.
Our system is designed to protect minorities.
Of course this isn’t news to you. You just happen to be caught up in the current frenzy and aren’t thinking straight.
—–
People were marching past your house shouting, carrying pitchforks and torches and you wondered what the commotion was about. They told you “We’re going to get that evil wealthy bankster down the street and give him what’s coming to him, and make him surrender his ill-gotten wealth!” and, thinking that’s a wonderful idea, you joined in..
Good government certainly protects the rights of the minority—while executing the will of the majority (also an important function). My point was that in a representative demcracy there is a problem when the reps don’t govern in the interests of their voters but in the interest of their biggest donors. This causes a breakdown in the “wisdom of the crowd” because this wisdom isn’t being honestly represented. Some point to the resulting problems as evidence of the stupidity of the majority when actually its evidence of the perversion of the system by well-moneyed special interests.
As far as the majority always getting what it wants, by force if necessary, this is certainly not seen in history. Ancient Egypt, Roman Empire, Medieval Feudalism, pre-revolutionary France, pre-Civil War American South, pretty much all of the third world even up to the present–This is the majority getting what they want? Or rather well-placed special interests?
..Good government certainly protects the rights of the minority—while executing the will of the majority..
Why can’t we get over this hump? Govt does NOT execute the will of the majority. If everyone wants you dead, is it good govt’s job to carry out their will? I don’t know where you’re getting this from..
look.. money is power. It can be used as political power. This cannot be denied.
OTOH, wealthy people are vastly outnumbered, perhaps 10,000 to one.
So, here you have a politician who must be elected and reelected. He needs votes, not money. He needs the support of the masses.
Does money buy votes? Sure, if applied carefully and correctly.. but BOTH candidates try to buy votes, while wealthy contributors are supporting opposing candidates.
Are people too stupid to see past attempts to buy votes? Are they mysteriously compelled to pull the lever like robots? Who is to blame if they get the people they voted for?? Who is to blame for not having better candidates? Why can’t people take responsibility for their govt?
We created this govt. We want what we want. We don’t care if our rep is a crook as long as he benefits ME.
———-
You’d have to wear some serious blinders to honestly claim that wealthy people have a single agenda, a single party, a singular goal which is opposed to the will of the people.
People need jobs. Jobs require business. Business requires business owners. Business and industry requires lots of money (banks). Without business owners, banks and banksters there are no jobs. No money. No food on the table.. get it? We’re all in this together.
If you don’t like the idea of your boss making more money than you do, become a boss yourself! Nobody’s stopping you. Or, go on the warpath with the rest of the mindless mob.. it’s up to you.
Read the Constitution. It’s basically a document spelling out how a majority-chosen government shall be set up, and how it will execute the majority’s will.
The founding fathers, rightly perceiving the dangers of the “tyranny of the majority”, placed several safeguards against it in the Constitution (including the much-maligned electoral college and most importantly, the Bill of Rights, which spells out rights that cannot be voted away. (At least not easily)
How far is a “ways”
Obama: full world economic recovery ‘a ways off’
Jul 10, 8:44 AM (ET)
By CHARLES BABINGTON
L’AQUILA, Italy (AP) - President Barack Obama said Friday the world apparently has averted economic collapse but “full recovery is still a ways off.”
a ways = “It’s not gonna happen while I’m in office.. that’s for damn sure.”
This last election amused me. Whoever ran had to be nuts since they were walking into a hurricane which would probably last beyond their first (and hence last) term. I get the feeling that McCain really didn’t mind losing that much.
And, if you watched Obama’s videos on the Change.gov website, you could tell that he was having some major “Oh, sh–!” moments.
Driving past the local mall the other day… it’s hot.. AC full blast..
At the signal, I see a mid-30’s sign twirler hiding in it’s tall shadow. Around the bend there’s another.. and another.. another across the street.. a total of 6 or so distributed near the intersection, all with the same sign.
It’s not unusual to see a few twirlers at this busy intersection. But what caught my attention was they were about the same age.. 20’s-30’s, white, clean shaven with neatly cut hair, and pretty well dressed.
I suspect they were kidnapped by Benny’s Discount Furniture Emporium while on their way to work.
This thing has only just begun..
OK I saw the dateline of your quote, was surprised the G8 meeting was in L’Aquila, just over the mountain from my family’s Italy hometown. So I go to Drudge to make sure it’s the same place, and the headline pic is of 0bama eyeballing some young behind, as Sarkozy (the chien!) approvingly smiles.
Go to the ABC news link to read the comments below the story, they’re funny.
(none of my links have been going through lately - sorry it’s a DIY thang today)
The chickie wasn’t wearing shoes, maybe he was concerned for the safety of the soles of her feet?
The funny part is Sarkozy leaning back for more viewing.
Too bad she had to turn around though…..the enjoyment immediately goes away.
Photoshop?
or you guys just being guys.
It is a pretty funny picture.
But… if you watch the full video you see that Obama is turning to help another women down the steps, the redhead is a very light skinned black, and Sarkozy is, without a doubt, ogling the redhead.
Watched the video. Obama seemed to be checking his footing and helping another woman behind him by holding her hand while she stepped down.
Sarkozy was definitely up to no good. He was twisting his head so he could see around Obama and get a better look.
“But… if you watch the full video you see that Obama is turning to help another women down the steps,”
Man that`s a shame, because for the first time I was proud of our president.
He told us that BEFORE he took office.
This should be news to your ears.
Heck we all knew that already. HBB is way ahead of the game.
ITEM: The New York Times Company is considering charging a fee for access to its website, and has begun asking its print edition subscribers how such a charge would affect their subscriptions. In a survey targeting existing subscribers, the media company said it was “considering charging a monthly fee of five dollars to access its content, including all its articles, blogs and multimedia.” Whatdya think?
Thats it! I will be reading the New York Post as New York Times is not worth the paper it’s printed on. Thinking about having to pay for it brings out the silent critic that usually says “there are no real news worthy news here”. BTW I usually rely on NPR for my daily information.
I’m more than happy to pay ALL papers for reading their articles - journalists etc.. need to be paid. If its good enough for me to read, then its good enough to pay for.
I went and donated a few bucks to Rolling Stone after reading Matt Taibbi’s article last week, because I read it somewhere else, and really enjoyed it. And wanted to give them some money for the effort they made…
Problem being is - when a lot of the news went online - rather than figuring out an easy way to get customers to pay for it (like actually buying a physical paper which guaranteed the newspaper got revenue), they decided to go down the way of web advertising.
So, advertising is falling off a cliff, lots of people have apps to block ads, most people never click on ad links… news papers/websites are losing money because of a bad business model.
If I Ruled The World, or even had a say from a consumer pov - I’d like to be able to read, say a few articles from one paper, then go and read some from another, scan a news website for some stuff, etc…. all online, and pay a small sum (say a few cents a page) for the priviledge.
But, in order to read the NYT - I need to take out a subscription, then another for the LA Times, another for the online WSJ, etc…
I’m paying full whack for several different papers - even if I only want to read an article a week. Plus I have to remember each of my usernames and passwords for each site…
What I’d like to see is a sort of Pay As You Go account - much like cell phones use - where I log in with my account number, and a small amount is taken from my balance each time I click on a page - for ALL media.
Every month I could top up the account by $10, $20 whatever, and I would debit the media by the number of pages I’ve read. I wouldn’t have to remember which ones I’ve subscribed to, nor pay in full for a service I may only use occasionally. And the media site would get some revenue that’s dependent on advertising.
It would mean that media would need to get together to make it possible, and it would mean that some enterprising company would need to put the whole thing together.
But, its an idea that would be practical to me, anyway. I’d happily pay, say, 10 cents a page for reading stuff straight from the horses mouth, so to speak…
That sounds interesting, save for one fact, the news media is owned by different people ie: Rupert Murdoch etc, and there is a strong possibility as there is now, that monopolies exist. Our news would be the same story, over and over again? Or not. NPR and PBS and BBC are good sources.
I agree that once they changed up the format, you can’t read certain articles unless you are a paying customer.
I love the saying, “if I ruled the world”. good one!
I’m thinking of something like a Paypal account… most online vendors use Paypal (or something like it) because its easy and popular with the end users.
In much the same way as retailers owned by different companies all use VISA (or some version of it) for charging customers.
Also, I think it would help smaller papers (ie non WorldCom), because you’d actually go to the original site and pay them for the story then and there, and not have to wait for it to be sold on to Murdochland.
I’d go as far as to say some blogs would benefit too - I support a few bloggers, but sometimes forget to chuck some cash in the tip jar to help them with costs. If I was paying, say, 10 -15 cents a hit, then I’d be paying a little continuously, rather than having to rely on my memory to donate. My memory sucks, and I’m old enough now to look up and say ’sheesh, another 6 months just went by, where’d it go?”
Just my tuppenceworth, anyway.
I guess the main problem would be in persuading online media to sign on for it, because it wouldn’t work if you got a few holdouts who insisted in doing it ‘thier way’.
But I guess that companies like AmEx and VISA had the same problem when they first started, too.
Adding on to that your thought if a central vendor could track the articles you click on they could present articles with similar issues from other newspapers so you wouldn’t have to click around too much for interesting articles.
Google News. Everything you want and free.
BTW, the newspapers have been “losing money” ever since I can remember. (decades)
Here’s a novel idea, how about publishing REAL news that is actually, I dunno, useful to people? (I know, crazy idea. It’ll never work)
I think the NY Times has been the official/unofficial mouthpiece for the Democratic National Committee for at least the last 8 years. Today they are basically the New York O-Bot Times. I think there are millions of East coasters who, if they read in the Sunday NY Times that eating dog-crap sandwiches for breakfast was the most responsible liberal thing to do, would show up for work Monday morning with dog-crap on their breath. I wouldn’t pay 2 cents for a ten year subscription to the NY Times. When the NY Times endorsed Obama, their number 1 reason was “the irresponsible Bush deficits”, which they were certain McCain would continue. Now that in 3 months Obama has quadrupled those deficits, they couldn’t be happier. The NY Times simply reflects a thoroughly discredited egghead notion that a bunch of leftist bureaucrats will always successfully manage the economy and nation better than anything else. They are dead wrong. Worse than worthless. I have nothing but contempt for that left wing propaganda rag and their Marxist editorial slant.
Don’t hold back. Tell us how you REALLY feel.
I disagree with their editorial policy about 99% of the time, but they do have lots of non political good articles. Don’t think I would pay, though. Did n’t they try a few years ago charging for premium content ?
They did that “Times Prime” or whatever as a pay-for-access experiment. It went nowhere. They charged for their editorials leaving the news and most feature stories free. Their plan flopped big time and they discontinued it.
LOL, CB. I think I detect a note of rancor in your post.
No good. I’m used to being able to read all the newspapers. I’ll pay $30 per month for that. But not just $5 for just one.
didn’t they try that before? At least they had some of their columnists like Dowdy behind a subscription firewall. They became immediately irrelevant.
The New York Times Company is considering charging a fee for access to its website…
I love reading Techdirt.com and I tend to agree straight down the line with their view of “Pay Walls”
The newspapers locking up content will only encourage their competitors to take their online traffic.
Anyone else notice a major increase in the number of out-of-state liscense plates in your area. Not on the highways, but on the secondary roads. I’ve noticed a huge increase in the past several months, even though the population and jobs are not growing in the area.
Or is it just that 1,000 people /day are moving to Cincinnati?
(ps… they keep building like crazy around here, mostly roads this summer, but still a steady stream of houses. commercial construction is on hold - but remember, Cincinnati tends to be counter-cyclical to the rest of the nation, so we’re still in our construction boom period here)
they keep building like crazy around here, mostly roads this summer
That is beause of the ARRA (stimulus plan). The only projects eligible for funding are “shovel ready.. Well, you can’t design jack in 180 days so no money for you unless you had something already ready to go sitting on the shelf. Since most communities and states don’t bother to design stuff and put it on the shelfjust in case the money appears from heaven, there weren’t many “shovel ready” projects sitting around waiting for the ARRA.
Which means if you don’t have anything ready to go, you repave and fill potholes with the money.
Are they all California plates?
Some Cali, but not too many. Lots of Texas, Illinois, Virginia. and a lot from neighboring KY and Indiana, even though I’m talking 30 miles from those states and I saw relatively few of those before.
peter, behaaaaaaaaaaave..!!
I was posting about out-of-state plates almost two years ago. Is there even anyone left in the small towns of the Upper Midwest, because it seems they have all come to the cities.
Last week the Census confirmed my suspicions by saying that Chicago’s population increased by some 20,000 last year - making us the 8th fastest growing city - believe it or not - I didn’t.
A hallmark of globalization/third world is widespread migration to urban centers. Here in America the difference is that the people bring along a car. While there are empty condos and apartments galore - there are still no parking spots to be had.
It’s, uh, summer?
I feel like posting this morning…
Secondary sports are in trouble, it looks like.
1) The Arena Football league took the season off to restructure their player agreement to lower costs
2) The Major Indoor Soccer League suspended operaton a year ago as they seek to restructure to lower operating costs
3) LPGA - not only are the players revolting against the commissioner, but 7 tournements have dropped out this year. The golf tour is expecting to have just 10 stops next year.
4) Now Formuala 1 racing has an owner’s revolt against the managment. Apparently, they have an agreement to roll costs back to 1990s levels, but are still fueding with the governing body.
Sports is just another form of entertainment, and we are seeing the peripheral offerings take a major hit.
I wouldn’t say all of the LPGA players are revolting.
“Your Majesty!! The peasants are revolting!”
“Yeah, they stink on ice…….”
I actually watch the Tour de France coverage. The ads must be going really really cheap, cause the snuggie one is in regular rotation and it is JULY.
Getting my arms stuck inside a blanket is not the top of my worry list these days….
When I used to watch the TdF Smilin’ Bob was the most frequent commercial.
Yah, I don’t think advertising for the TdF in the states is really that expensive. I’m sure it took a dive after Lance retired. Yah, he’s back this year, but it’s just not the same level of hype.
I will watch the TdF if someone other than Lance breaks away in the mountains. As for Lance, I think that this will be the year that he realizes that the juice he’s been using just isn’t strong enough anymore.
Some one other than lance DID break away in the mountains today. In fact, two someones! His own teammate took over top position on Astana’s team, and a brand new to the tour racer broke out of the break away for the stage win. It was a pretty good race. (And by race, I mean the last 1/5 of the race, the first parts are only interesting for the scenery.)
Hey CincyDad,
As a very dedicated F1 fan and former racer, I know that item (4) above is a very complex issue. The FIA governing body wanted to introduce a cost cap of about 40 million pounds (per team) for next season, but the FOTA teams, who are actually auto manufacturers, didn’t want the cap. Current spending is in the $300 million/year per team area. There is also the issue of the Nazi (really, his father was head of the British Nazi Party) leader of the FIA, Max Mosley (who was caught on video getting whipped by hookers dressed as Nazi prison guards; I am NOT making this up), and his insane desire for dictatorial powers to change regulations at will, and many other issues. Bottom line, the teams threatened to quit F1 and start another series taking all the top teams and drivers with them. This has been partially settled and there is still hope they will get together, but the odd thing is that this was about NOT wanting to cut costs as much as the FIA wanted to. There were also rule changes that advantaged new teams entering the sport. Sorry to go on about this, but it is obviously of great interest to me. The FIA/FOTA spat is not a good example for your post, although I understand your point and agree.
Shrinking disposable income and severe contraction inadvertizing and sponsors…I would include NASCAR in there also…The weakest die off first
Sears has pulled big support from nascar. The truck series has always been the Craftsman Truck Series until this year; now it is the Camping World Truck Series, and iirc Camping World is paying half of what Sears paid for annual sponsorship.
Did anyone see the CNBC show about nascar? They showed this guy who takes his vacations camping in the infield at races with his family and friends. Usually he is surrounded by like people, with their banners and flags,etc., but this year I think they showed him at Lowe’s track in NC, he was surrounded by vacant grass! When they panned the camera it looked like something from Monty Python, this guy out there by himself!LOL
Ah, but here in Baltimorgue, there’s a plan for Forumula 1, Grand Prix, or some other racing event.
Our brilliant city leaders (including our “indited for fraud and stealing Christmas gift cards from crippled children” mayor) have decided that what Baltimorgue REALLY needs is to invite one of the big races to the city - where we don’t have a track - and then run the cars around the STREETS of the city, which will become their “racetrack” for the event?!
Stop and consider the insanity of closing off a bunch of major streets in the city for a long weekend so a bunch of race cars can zoom around them… nevermind the hazards involved (fiery crash into somebody’s store, etc.) or just how much everyone in the area will hate the noise and mobs of people… nope, the best way to fix a crumbling, corrupt, crime-ridden city is to basically start having street races in it. Right…
They tried that in Detroit too.
If they don’t tell anybody about them until the day of the race and film the ensuing carnage, they’ll have the highest rated sporting event in history!
They tried that in Spokane, WA. No way to charge for seating when it is in downtown. The sanctioned seating (pay to sit) will be mostly empty. Then the cost to set the concrete barriers, remove them, clean–up, etc. They will end up losing $.
FAIL!
Can someone please remind me again why managers of bankrupt firms qualify for government-provided bonuses? I am still missing how this plan fits into the whole paradigm of American capitalism, where bad decisions lead to financial losses.
Wall Street Journal
* BUSINESS
* JULY 10, 2009
AIG Seeks Clearance to Release Bonuses
American International Group Inc. is asking the Obama administration’s new compensation czar whether it should pay previously agreed-to retention bonuses, including about $235 million pending for employees at the insurer’s controversial financial products unit, according to people familiar with the matter.
…
They managed to steal trillions from the American taxpayer and now they want part of the loot. That’s exactly how bonus compensation is supposed to work. Capitalism in America died with the bailout, get used to it.
It’s not even Socialism, at least Socialist nationalize profitable companies from time to time. More like Facsim where government and big business cooperate to milk the working class.
“More like Facsim where government and big business cooperate to milk the working class.”
BINGO
Fascism is probably the single most wrongly-used word these days.
fas⋅cism
–noun
1. (sometimes initial capital letter) a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.
Given that we have a minority president, and that he’s been on a “world apology tour” for the U.S., I’d say we very much don’t have an emphasis on either aggressive nationalism or racism.
Better terminology IMO would be “crony corporatism” or “Oligarchism” (if such a word existed).
I thought Olygarchism had to do with eating mushrooms and clams?
Fascism, pronounced /ˈfæʃɪzəm/, comprises a radical and authoritarian nationalist political ideology and a corporatist economic ideology.
Fascism…… where the peoples interests are subservient to corporate interests.
Fascism…… where the high dollar corporate creeps bark, our elected officials cower.
Fascism….. where the dumbing down of the population results in nazi-like worshipping of lame idols such as flags, war and the war machine.
Fascism….. where the previously dumbed down population support airy-fairy immeasurable intangibles and hobgoblins…. even at their own economic peril.
I thought Olygarchism had to do with eating mushrooms and clams?
Plus wearing exciting helmets and pretty cummerbunds and executing developers freely.
LOL - exactly where is that definition from?
FYI dictatorship and corporatism are by definition mutually exclusive, since corporatism means the joining of many people into one entity, whereas dictatorship means the rule by just one person.
Being that fascism includes a dictatorship component - I would say that your definition of fascism is flat-out wrong.
Aside from that - there is nothing wrong with “corporate economic ideology” in general, and it certainly isn’t fascist.
What’s wrong is when a corporate economic system gets corrupted into crony corporatism, with behind-the-scenes special relationships and favoritism going on between certain corporations and the government, and as enabled by excessive government power. Then it becomes socialist and/or communist, though still possibly remaining technically a corporate system.
FYI, it is wikipedias definition. Merriam Webster is much the same so you were saying??
There is EVERYTHING wrong with “corporate economic ideology” in general, and it certainly IS fascist.
You can’t just make up stuff here. At least have something to stand on.
And there ya have it packman, it has happened and the ‘idea’ was good, but we have societies that do not give a …
about the overall and capitalism/ corporatism has run amok.
Monopolies rule.
“What’s wrong is when a corporate economic system gets corrupted into crony corporatism, with behind-the-scenes special relationships and favoritism going on between certain corporations”. And they buy off politicians, only mindful of the bottom line and their own pockets.
Hence the overaraching need for Campaign reform and
JustSixDollars DOT org. If pols didn’t have to rely on campaign funding from the monopolies, we Might have better representation. But that ain’t gonna happen anytime soon.
FYI, it is wikipedias definition.
I see that. However of the five source of the definition that Wikipedia uses as sources for its definition - only one includes the corporatism component.
Also of note is that “corporatism” in this context (follow the link) doesn’t refer specifically to business corporations, but rather to the more general concept of corporate societal groups:
“Corporatism is a system of economic, political, and social organization where corporate groups such as business, ethnic, farmer, labour, military, patronage, or religious groups are joined together into a single governing body in which the different groups are mandated to negotiate with each other to establish policies in the interest of the multiple groups within the body”
Back to the original subject - I’d be curious to hear your thoughts on how exactly a viable economy could be run *without* the existence of some level of business corporatism? FWIW - I’m actually not trying to be argumentative with that - I’ve heard the subject come up occasionally on this blog; generally fairly flippantly though. I believe that there may be a valid case that could be made, but I can’t think of how. I wouldn’t mind doing some further study on the subject however.
Hence the overaraching need for Campaign reform and
JustSixDollars DOT org. If pols didn’t have to rely on campaign funding from the monopolies, we Might have better representation. But that ain’t gonna happen anytime soon.
As a side thought - IMO people tend to way over-emphasis campaign funding and way under-emphasize other forms of favoring - e.g. political appointments; just look at the revolving door between Goldman Sachs, the Treasury, and the Federal Reserve for one good example. Another big example of course is business deals.
The original subject was this;
“More like Facsim where government and big business cooperate to milk the working class.”
Socialists, communists, fascists, marxists, UN troops are coming in the windows and hiding behind the chairs all singing L’Internationale. They’re everywhere!!
Ooops…I forgot to BLOCK the Faux News Channel.
Get a freakin’ grip people !
Wall Street still hasn’t gotten the message yet.
Oh, I think they have,
“Wall Street still hasn’t gotten the message yet.”
they are ignoring it, because the masses aren’t important to them. You and I don’t count. Maybe just to clean up the sweat from their iced tea glass.
Drive on james….
Dumb questions of the day:
1) Doesn’t rewarding managers who threw away money with bonuses create a massive moral hazard problem for future generations of managers to destroy more wealth?
2) Why is it so different on Wall Street? Anywhere else in the country, managers who destroyed wealth on the scale of the AIG folks would be fired or worse. Shouldn’t these managers be fired or possibly even sent to prison, rather than receiving bonus payments courtesy of Uncle Sam?
Lets see.. Uncle Sam decides to pull some company’s butt out of the fire and, sometime afterward .. lo and behold! The company has employment contracts which include bonuses! Whoda thunk it?! Oh well.. it’s too late now..
So, Govt then decides force the company to renege on the contracts, in fear of political backlash about any of that money being paid to people who may already have more money than their average constituent does..
Since the contracts are pretty much standard stuff and messing with basic contract law would require something on the order of a Constitutional Convention, they decide to try class warfare propaganda and political pressure to gain enough support for their little contract nullification scheme..
damn.. i forget who’s side I’m supposed to be on.. what was the question again?
The government had no problem nullifying contract law in the Chrysler and GM bankruptcies.
Regardless of how evil and obnoxious, the enemy of my enemy is my friend..
Show me the law which provides for using $$$ to pull AIG’s butt out of the fire, and I will find your concerns over minding contract law far more compelling.
“Show me..” something.. “and I will” .. do something.
So, if I do this then you’ll do that? You do see you’re proposing we enter a contract, of sorts.
If I agree, and if one of us fails to uphold our end of the deal can we appeal to the courts to make things right? At this point in time, yes.
But if some people –people who can justify any means to an end– have their way, how about tomorrow?
——
The only people who shouldn’t be very concerned about the inherent security of contracts are people who will never enter into one.
How about we agree not to proseecute them and throw them in prison if they give back the money they already took!
You have problem with Corporate Communist Capitalism©®™, comrades?
Was just reading this from last night and had to laugh:
——————–
Comment by rms
2009-07-09 22:20:18
…
Modesto’s poor neighborhood homes are now selling at or below 1997 prices, but you have to live there. No thanks!
———————
LOL - the number of places one could say this about are increasing. Detroit - wow you can get great deals on houses! Problem is - you have to live there.
It all gets back to - “you get what you pay for”. Actually, that’s not really true - you may get much less than you paid for, e.g. if you bought a house in Modesto in 2005.
Well in my neighborhood, 1999 prices ~1989 prices so that doesn’t seem strange at all.
IMHO, the failure of diversification can be attributed to limiting the set of allocatable assets to those in the conventional financial adviser’s tool kit, e.g. stocks, bonds, real estate and commodities. All of these asset prices can become simultaneously inflated in a highly correlated fashion if the central bank liquidity pump runs amok.
With central banks using massive liquidity injections to artificially prop up asset prices, one needs to look at (domestic and foreign) currency and precious metal plays as part of a diversification strategy. A tsunami wave of liquidity into financial assets raises all financial asset prices high into the air, while a receding liquidity tsunami drops them back to sea level or even carries them out to sea.
Anyone who had a sufficiently large allocation to cash last fall did pretty well through the financial meltdown.
Wall Street Journal
* JULY 10, 2009
Failure of a Fail-Safe Strategy Sends Investors Scrambling
Carl Mahler stood before a group of fellow financial advisers recently and voiced frustration and fear that a fundamental tenet of investing had been proved wrong.
“Hi. My name is Carl, and I’m a recovering asset-allocationist,” the Raymond James Financial adviser quipped.
Asset allocation, a bedrock of investing for decades, appeared to fail miserably in 2008. The conviction shared by most investors — that they should spread their money across myriad asset classes to minimize losses — was shaken as nearly all markets tumbled in unison.
…
yeah those plans work great, until they don’t.
Thank you HBB…
Once everyone became thoroughly indoctrinated by 401(K) advisers to employ the same “best possible” diversification strategy, there was absolutely no remaining diversification benefit to following the strategy.
Remind me again: There was a professor (of finance, I believe) who recently spoke out about the downsides of 401k. She had a name that was kinda-sorta like Ghirardelli.
What was her name?
you mean the one that proposed confiscation & replacement with some govt acct?
What do weak retail sales portend for commercial RE?
Wall Street Journal
* JULY 10, 2009
Weak June Sales Leave Retailers Anxious About Back-to-School
U.S. retailers posted steep sales declines for June as soggy weather kept shoppers home and comparisons were tougher due to federal economic-stimulus checks spent in the year-earlier period.
The poor showing this early in the summer leaves many chain stores with lots of inventory destined for the clearance rack just as the industry approaches the important back-to-school period.
“Retailers are having difficulty selling full-priced items, even in season,” said Ellen Davis, vice president of the National Retail Federation. Consumers are “shopping at a lot of places before they pull the trigger,” she said.
…
There are commercial R & D sites around here that are selling for “Less” than the land value…
Now that’s a source of some optimism - people actually holding out for a better price. It’s about time as it runs counter to the debt pushing message of the PTB.
Weak June Sales Leave Retailers Anxious About Back-to-School
I’ve hated seeing ads for back-to-school sales ever since I was young enough to go back to school.
Walking into Target or Walgreen’s and suddenly seeing placards and banners proclaiming back-to-school leaves me with an empty feeling of remorse - summer’s gone and she ain’t comin’ back.
For me, back to school was the equivalent of back to prison.
Retail needs a “Come to Jesus” moment.
Back to school sales in July? Christmas stock the day after Halloween? Summer clothes in March? Retail has been eating it’s future earnings for so long they now think it’s normal.
And my favorite, discontinue a great product in the name of “new, new, new!”
And don’t get me started about “planograms.”
From the Kingston Ontario waterfront….
Lively Buskers Festival in this beautiful waterfront town. Enjoyed some music, street theatre, a guy from Argentina who does an amazing juggling act with soccer balls and especially an artist who reproduces classics on the sidewalk with chalk. Interesting people, all with kind of a carney air.
The sidewalk artist says his take is down 75%. He’s not sure his lifestyle is sustainable. At least his lifestyle isn’t debt based, like his patrons.
Quite a few of the boats in Confederation Basin have For Sale signs. Most of them from NY. Off to clinb the Rideau towards Ottowa, built by the way, in preparation for an attack by the Americans.
Is a California bailout in the cards?
Wall Street Journal
* OPINION
* JULY 8, 2009
A New York Solution for Bailing Out California
In 1975, a Control Board cut spending, controlled the cash.
By HENRY S. ROWEN
“Ford to City: Drop Dead.” That was the New York Daily News headline in 1975 when President Gerald Ford promised to veto any federal bailout of a bankrupt New York City. President Barack Obama has responded in similar fashion to California’s current plea for help, explaining that many other states have severe budget problems. Besides, the Recovery and Reinvestment Act just gave the states $140 billion.
This is the right response. If Washington bails out Sacramento’s $26 billion deficit, the odds are high that California legislators will once again kick their deep-seated fiscal problems down the road. However, we should recall that Ford’s veto threat was not the end of the story. Ultimately he did intervene, and so too may Mr. Obama. The history is useful in thinking about what to do today.
…
There is a all out frontal attack on Prop#13 right now…They see it as the quickest way to raise tens of billions..Hundreds of billions over time…They angle is to try and “Divide & Concur”…A split roll where all commercial (including apartments) will fall out from under the umbrella of protection of #13…As I understand it, it will take another state wide vote to overturn it (Unless there is some way the Fed’s can intervene?
It won’t work….Major employer’s that have been in place for thirty years or more will threaten to leave…See Intel, Apple & Cisco as a few examples…The tax increase to them would be “massive”…
“There is a all out frontal attack on Prop#13 right now…”
If the attack succeeds, look for CA housing prices to drop much further than expected, as Prop 13 is an implicit subsidy which helps account for the large gap between CA incomes and home prices.
PB:
I don’t see it as a subsidy, just common sense. Limit the taxes and you have more to spend on other items, govmint has to be more frugal since only new sales will generate higher property taxes. It benefits people who are house rich and cash poor.
And doesn’t the house get revalued when they die and leave it to the kids?
No it doesn’t get revalued, dj.
Also, businesses get this protection. Landlords get this protection. It’s a regressive tax that punishes anybody new to the state (business or persons) and encourages families to never sell houses because you can move into grandma’s house and pay 1/10th of the taxes.
Here’s the best part, you can BUY your parents out of their house and keep the tax base.
It’s a big F.U. to young families and new businesses.
It’s a regressive tax that punishes ??
Then why do states offer “Huge” tax breaks for business to locate and build new
facilities ?
Indeed - the amount of ‘million dollar’ SFRs I see, which are being taxed at 250K are astounding here in the City of Angels.
If they did for it residential too, we might actually see some price declines…
Intel corp is investing $7billion in other states because its cheaper than California.
I have less than a year in RN school then I am out off this state.
It is getting to expensive to live here.
Intel’s largest facility has been the one in Hillsboro OR for well over a decade. They stopped building the last highrise in Folsom CA years ago and have apparently no interest in continuing with it. All new construction is going on outside of CA.
For years, Arizona has been luring companies looking for an alternative to California. I understand that other Western states have been doing this too.
Here’s a link to the Folsom site history. FM8 is the building they laid the foundation for and then halted.
http://www.bizjournals.com/sacramento/stories/2004/09/06/focus1.html?page=3
$7billion in other states because its cheaper than California ??
Exactly my point !! They are investing outside of California because Prop#13 gives them no protection from property taxes…It will be taxed at full value + 2% per year…There current facility in Santa Clara is probably 30 years old…It is a huge facility….I am sure they are paying one 20th of the real estate taxes that they would pay if they built that same facility today if not less…Now times that by “every” business or company in the State..Like Perot said; That sucking sound you here will be company’s leaving the state…
As I understand it, it will take another state wide vote to overturn it
Maybe CA could link an overturn of Prop 13 to preventing gay marriage somehow?
Let’s see, bail out a city vs bailing out a state which by itself would be the 6th largest economy in the world. Not in favor of bailouts but it’s going to be interesting to watch this drama unfold.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee.
– John Donne –
Financial Times
California’s financial troubles echo across the US
By Cynthia O’Murchu and John Casey
Published: July 9 2009 19:37 | Last updated: July 9 2009 19:37
California has been garnering a lot of unwanted attention recently over the dire condition of its public finances. While California may be the most visible example – it is issuing IOUs to creditors instead of cash – our map shows that other states across the US have budgetary troubles.
Lawmakers in several US states have failed to agree on spending cuts amid falls in revenue from income and property taxes. States faced a cumulative budget gap of $121bn this year, according to the National Conference of State Legislatures, a research group.
…
As of today, cash is still king.
Financial Times
Wall Street set to slide on earnings fears
By Kiran Stacey in New York
Published: July 10 2009 14:06 | Last updated: July 10 2009 14:16
US stocks looked set to end a fourth consecutive week of losses on a negative note on Friday morning as oil giant Chevron warned its second-quarter earnings could disappoint.
Energy stocks have dominated the week’s trade as oil prices have tumbled from their recent highs. The price of a barrel of US crude fell a further $1.37 on Friday to $59.04. But investors had hoped that the peaks in oil seen before the quarter ended would boost profits. Those hopes took a blow when Chevron said a weak dollar had counteracted the effect of the oil price rise and its shares fell 2.1 per cent to $61.75.
Other energy companies were also affected. Exxon Mobil dropped 1.2 per cent to $65.21, ConocoPhillips lost 1.4 per cent to $39.75 and Schlumberger gave up 2.2 per cent to $49.10.
Less than an hour before the open, futures for the benchmark S&P 500 index were down 6.2 points at 872.7. Those for the Dow Jones Industrial Average fell 52 points to 8,082 and those for the Nasdaq Composite index dropped 8 points to 1,405.5. All were lower than fair value levels, which take into account dividends, interest rates and time to expiration on the contract.
Banks also lost ground in pre-market trade following a previous bullish session as reports said that several Wall Street firms are complaining the government is demanding too high a price for the warrants they hold as part of the financial bail-out earlier this year. As banks try to exit the Troubled Asset Relief Program, they are trying to buy back those warrants but negotiations with the Treasury have reportedly stumbled over the price.
…
Oil prices are dropping like a rock today. Will the lows of earlier this year be retested soon?
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
Oil prices are dropping like a rock today. Will the lows of earlier this year be retested soon?
Oil prices can drop it like it’s hot, but when does gas go back under $2.60 a gallon?
Maybe Lenny Dykstra can exit bankruptcy in less than a month, too and pass off all of his bad debts to the taxpayer like GM did. What a joke!
You mean the same Lenny Dykstra that was presented as a stock guru on Fox “Bulls & Bears”…I laughed every time I saw him open his mouth…To much tobacco juice worked its way into the cranium…Owned a few car washes so I guess that made him smart…
On MSNBC he gave an interview and said he was a victim of fraud committed by Washington Mutual.
Apologies for an off-topic post:
Olygal & Sleepless,
I have a question about Seattle. I am planning to fly to Seattle next weekend and spend a week going east, all the way to Glacier National Park and then back. I have never been to Seattle before. My flight is late arriving in Seattle (about 10:30pm) and start my trip toward Glacier the next day. I thought I could spend all night roaming around Seattle and not even bother having a hotel room.
Question: is there anything to do in Seattle from the hours of 11pm to 9am? Space Needle open? Any all-night museums? I am not into clubs and bars so I am not sure exactly is there to do for late hours.
Ha, good luck! Well, maybe there are a few things improved since I pulled my overnight trick in Seattle.
Well over a decade ago, I was headed out on a hiking trip in the Cascades. The airline lost my gear — only temporarily, of course. As in, till the next day.
So there I was, by the time we got this figured out, 11 PM with no camping gear, having to be back at the airport at 10 AM. Worse, ALL the hotels I called were full for some huge college football game. OK, there was one with rooms at an exhorbitant price I wouldn’t pay.
So I drove around and tried to find things to do, but after 2 AM it was pretty much the doughnut shop life. I slept in the car in a McDonald’s parking lot.
I hope you have better luck. At least now there’s good internet research info, and you can plan ahead for it.
Damn that doesn’t sound encouraging at all. I thought if nothing is open I at least can walk around all night in downtown Seattle and snap photos of lights and buildings with my Canon EOD-1D Mark III… but the thought of walking around downtown anywhere, much less a place I never been to, with a $3,500 digital camera gives me the willies.
Is downtown Seattle safe at night? I would have no problem doing this in Manhattan any weekend at any time.
Is downtown Seattle safe at night?
My nephew lives in downtown Seattle. Some of it is pretty rough at night, e.g. nightly shootings outside Belltown nightclubs. Read the PI for crime reports. seattlepi dot com
_Nightly_ shootings??? No way… Seattle is still pretty safe—safe enough that the shootings are still prominently reported. It’s one of the safest large cities if you look at the stats. Yes, there does occur the occassional random act of violence, but I never feel unsafe walking around downtown.
Now, would I do it during the hours when no one is out and about (3-4am), prominently displaying a $3500 camera? Probably not—that doesn’t seem smart.
But I have wandered around late night, and early early morning (4am bus to the airport) without feeling unsafe at all.
>prominently displaying a $3500 camera?
Prime,
Well, I am going to put it in my backpack when I am not using it, but for some of these time-lapsed nighttime photography, yeah it’s gonna be out of my bag on the tripod for 5-10 minutes for sure, no choice there.
What did you end up doing at 3-4am in the morning, if you don’t mind me asking? Just trying to get an idea.
Aren’t there quite a number of homeless in SEA downtown area? My creep meter flashed yellow in SEA, during the day; was staying a few blocks from Pike Place Market.
I have done the all night walk in Las Vegas, due to having to be at the airport at 4.30 am. It’s easy enough there, even if you are female and tiny, but it gets really tiring around 2 am.
I haven’t been up to Seattle in the wee hours very often and the times I have, I don’t remember all of what transpired the next day. I woke up with all my kidneys, though, so that’s good, right?
Therefore, alas, I cannot provide good advice. Although I should think that wandering around ANY strange city after dark while carrying expensive and easily-pawned items may not be a good idea.
I think it’s great you’re going to Glacier! Good thing, now that I think of it, because one of these days they might have to change the name. ‘Bare Dry Scree’, maybe?
I’ve been watching a house down my street trail the market down with ridiculous asking prices slowly being lowered as the market went flat. The for sale sign disappeared about a year ago and the grass quit being cut. I then noticed the previous owners being sued by I think Deutsche Bank. This last winter we had an ice storm that brought down many trees and branches and filled their yard with tree debris. Coupled with the unmowed yard this was becoming quite a site,
especially since it’s almost directly across the street from the biggest realty firm in town (Lexington, KY). now i’ve noticed a “bank-owned” for sale sign on the door. This is the first and only such sign I’ve seen here. Interestingly, the sign is kind of hidden, being as its on a shady porch i.e. it would be much more visible if it were placed in the (recently cleaned up) yard. I called the number on Sunday evening and the guy answers the phone and just says “hello” like its a residential line. I say “uhh, I’m calling about the house for sale” and he says there’s still some legal work being done and the house won’t be available until the end of the month. Then we both said goodbye but the guy never took my name or number or even identified himself. NOT typical realterr style. I guess the REOs go to the laziest, maybe I’ve missed my calling.
Some posters here have suggested when UHS respond like that regarding bank owned property it is because they are giving the good deals to their buddies.
Exactly.
All the bank-owned stuff will be held off to the sides until endless rounds of infestors and bank buddies can get the best deals. The rest of us who save our money and just want a decent place at a decent price will still be stuck with junk at absurd asking prices.
He certainly wasn’t pushing it at all. In my experience if you call a reeltor about a property and you don’t have your own reelotor they are on you like a rabid monkey thinking they’re going to get both sides of the commission.This guys attitude was try back later.
google the phone number, see if you can tell where it goes.
… and the grass quit being cut.
Reminds me of a stand-up routine I heard recently:
“My wife left me. A week later I noticed that my clothes were no longer picking themselves up, washing, and putting themselves away.”
lol Never underestimate the power of the passive tense- a busted politicians best friend……..”Mistakes were made, lessons were learned” (switch to active tense) “We’re moving on!” Translation: Quit asking those questions that reveal me to be a liar/moron/adulterer. Also, in my defense, the grass was cut by a service, so it seemed an accurate phrase.
tense=voice-Hey, it’s not my fault, it’s HAPPY HOUR!
US official: derivatives surprised government
Treasury secretary says power, risks of derivatives market caught US government off guard…
July 10, 2009, 10:43 am EDT
WASHINGTON (AP) — Treasury Secretary Timothy Geithner say the enormous scale of the financial derivatives market helped to cripple the U.S. economy and that greater oversight is needed to make sure it does not happen again.
Geithner is testifying before the House Financial Services Committee and House Agricultural Committee.
In his opening remarks, he said establishing a comprehensive framework to monitor the complex financial instruments is “crucial to laying the foundation for a safer, more stable financial system.”
Derivatives are financial instruments whose values are based on something else, such as a mortgage-backed security or a commodity like oil.
They have NO IDEA how bad it could have gotten. There are people way down the food chain (as in WAY down) who kept it from getting a lot worse. I don’t even like to think about how much worse it could have been.
“There are people way down the food chain (as in WAY down) who kept it from getting a lot worse.”
polly, would you elaborate on that? I’d love to know what you’re referring to…
Sorry. Can’t. But you know I would if I could.
I would think your work-a-day regulators/auditors/law enforcement/etc. who stopped the worst abuses.
Think of all the fraud finally being pursued by the FBI. Now quadruple that.
http://money.cnn.com/galleries/2009/real_estate/0906/gallery.affordable_homes_luring_buyers/index.html
I’m wondering if you all consider these people knife-catchers? Did any of the 5 get a good deal?
I’m sure most of the got decent deals ‘at the time’, however as time rolls on those deals will look less and less good. The ones talking about 20% off peak for a condo they’re ’splitting’ in Chicago are almost certainly knifecatchers.
The girl who’s paying $110 extra a month (including taxes) to own a condo 5 minutes from work instead of renting 50 minutes from work… well, she might come out of it okay. That comes out to 5 bucks for an hour and a half of commute reduction.
None of the others looked particularly great either.
No.
Broken Record here…..but……
10 Year down 12 Basis currently 11:34AM ET the Total Volatility for the week is in the neighborhood of 55 Basis Points at this time. The total weekly move would be only around 25 Basis Points down.
My Tin Foil Hat is telling me, peeps don’t know what to do. In Bonds, out Bonds, in Bonds, out Bonds.
It may mean nothing, money moving from Commodities to Treasuries. Or, it may be heralding another kick in the face. The thrashing back and forth has me fearful of the latter.
I am curious as to what others think of this wild Volatility. Just a reset? The New Norm? A Herald of things to come?
There is a big flight-to-quality move underway today into Uncle Buck. From Bloomberg:
CURRENCY VALUE CHANGE % CHANGE TIME
EUR-USD 1.3927 -0.0092 -0.6599% 11:53
GBP-USD 1.6188 -0.0148 -0.9029% 11:53
USD-CHF 1.0860 0.0075 0.6954% 11:53
USD-SEK 7.9696 0.1334 1.7026% 11:53
USD-DKK 5.3474 0.0352 0.6636% 11:53
USD-NOK 6.5344 0.0485 0.7484% 11:53
USD-CZK 18.6870 0.1250 0.6732% 11:53
USD-SKK 21.6290 0.1403 0.6530% 11:53
USD-PLN 3.1470 0.0425 1.3682% 11:53
USD-HUF 199.5640 3.4562 1.7624% 11:53
USD-RUB 32.7310 0.9810 3.0900% 11:53
USD-TRY 1.5565 0.0138 0.8912% 11:53
USD-ILS 3.9825 0.0405 1.0274% 11:36
USD-ZAR 8.2445 0.1238 1.5239% 11:53
USD-MAD 8.0941 0.0446 0.5547% 11:53
Did combotechie hack Professor Bear’s account? This is the 5th or 6th post worshipping the dollar in this thread alone!
I worship no asset class. I was merely noting a big current move into Uncle Buck, which I supported by posting data. If this fits your definition of “worshiping,” then so be it.
Here is another one, just for you:
Mark Hulbert
Jul 10, 2009, 1:41 a.m. EST
The Chartist now charts a downward path
Commentary: Top-performing adviser is back in cash, again
By Mark Hulbert, MarketWatch
ANNANDALE, Va. (MarketWatch) — Dan Sullivan has thrown in the towel on the stock market’s four-month-old rally.
That’s bad news, since Sullivan is not just any adviser.
His stock newsletter, entitled The Chartist, is in first place for stock market timing over the last three decades among those newsletters the Hulbert Financial Digest has tracked over this period. And though his mutual-fund newsletter — The Chartist Mutual Fund Letter — hasn’t been published for all three of those decades, it also is one of the top performers over the years it has existed.
So the bull market has lost a formidable ally.
…
Talking heads this morning said something about this being due to their *not* being a lot of discussion at the G-8 meetings about de-emphasizing the dollar as a reserve currency.
Eventually I think there will be a different global currency to replace the dollar as default for international trade. The key thing will be whether or not that actually *replaces* the dollar (e.g. the way the Euro replaced many others), or if it complements it.
If the latter - then certainly eventually the dollar will tank.
If the former - then the big question will end up being - at what exchange rate? The dollar may jump if a favorable decommissioning rate is given established.
O/T: But for some of you DC types. My son just arrived in your city for a training session and next Monday and Tuesday wants to know what would be worth seeing before flying out on Wednesday morning? Second year Pharm student meeting on leadership with other Pharm students.
I personally suggest the treasures of the Smithsonian.
Definitely the Smithsonian and the Mall. One day maybe rent a bike and take the trail to Mt. Vernon, perhaps stopping in Old Towne Alexandria and Arlington on the way. That’s a great ride. At night if he’s 21, the Dubliner on Capitol Hill, or Georgetown. Most of the young professional locals head over to the shore on Summer weekends, so it should be relatively quiet.
I would second Old Town Alexandria. George Washington had a townhouse here (if you look for it, you will find it and there is a historical marker plate on it), Pat Troys Pub (great collection of fire/police/military patches), Murphy’s Pub.
Mt. Vernon isn’t too far outside of Alexandria either and worth a visit.
The Newseum (news museum) is also pretty cool, can’t remember where exacly it is, close to Arlington I think.
I enjoyed the Air & Space museum, but I think it may have been moved (or part of it) to Dulles International Airport.
The new Air & Space (the Udvar Hazy center) is awesome but he would most definitely need a car to get out there. its a good 35 minutes from downtown.
I second everyone else on the Smithsonian, particularly the East Wing, and Sackler galleries.
The Corkoran has an excellent exhibit right now on the Arts & Crafts movement, in particular Grene & Grene.
Newseum, The Spy Museum, The capitol. all worth a look.
Fords Theater if he’s a history buff.
There’s actually a ton of stuff to do in DC and so far the really hideous summer weather hasn’t hit but no telling how long THAT will last. It gets truely nasty here right around now.
The new Air & Space (the Udvar Hazy center) is awesome but he would most definitely need a car to get out there. its a good 35 minutes from downtown.
Yes - I was thinking on the way to/from the airport - there’s a shuttle, since Udvar Hazy is right next to the airport. Actually it’s a neat thing to do if you ever have a 2-3 hour layover in Dulles. The museum is free, and it’s got incredible stuff - the Enterprise space shuttle, the Enola Gay, an SR-71, etc.
Okay, ya got me going, SFC. Is it possible to fly into DC National, then get one’s bicycle from baggage claim and ride into the city?
Absolutly, The Mount Vernon bike trail goes right past National Airport.
Dulles would be a bit more of a stretch but technically possible.
I enjoy the National Cemetary and ceremony at The Tomb of the Unknown Soldier every time I go there. Often I take my journal and sit in the empty amphitheater behind the tomb just to record some inspired thoughts.
Especially the National Air and Space Museum! Talk about a geek magnet — that place is it.
Additionally the Udvar-Hazy center out at Dulles, if he’s flying into or out of there. It’s the newer, larger version of the air & space museum.
What is his schedule (as in the hours he won’t be available for gawking) and what are his interests outside his area of specialty? I’m sure we can come up with a few ideas….
Polly
Don’t know his schedule yet. Arrived today on redeye and has a full day. He said that Mon and Tues are free for whatever. I’ll forward him some of the already posted suggestions. I contacted his Congressman and Library of Congress and something else were possible.
thanks
So he’s going to have actual daylight hours available? OK. Got it.
There are 3 big paying museums in DC. Cost you about $20 to get in. They are the Newseum (which is in DC very near the Mall), the Spy Museum and the Museum of Crime and Punishment. I’ve heard that the Spy museum is fun, especially if you can channel the spirit of a 12 year old boy.
Most of the rest of the DC museums are free. Of the Smithsonian museums, I like Natural History and American History. American History was just completely redone. Natural History has a new Oceans exhibit which is spectacular. The National Gallery is great if you want to look at American and European Art, but it isn’t great in other areas. The National Building Museum is great. He could try to check out National Geographic Explorers Hall, too. Some people who don’t really like museums say that they enjoy the postal museum which is up near Union Station. I like some of the stuff at the Museum of the American Indian, but please do not expect to understand much of the explanations. It is very “non linear” to emphasize that the peoples did not come from a linear western culture. I find it almost impossible to actually learn stuff rather than just get an impression. Air and Space is always crowded - go early if you go. They used to run a shuttle (costs money) from the Mall museum to the Udvar Hazey center which is the one out near Dulles Airport. It would make for a long day, but worth it, especially if you want to see a space shuttle. Check the website to see if they are still running it.
He is a pharmacy student? I haven’t been, but there is supposed to be a fun (and disgusting) museum of the history of medicine out at Walter Reed. You can get there by bus. Make sure you have photo ID with you.
I’d also recommend the zoo. It isn’t as good as the Bronx, but has its charms, especially in the reptile house and the rodent house (naked mole rats!). Oddly enough there is an aquarium in DC in the basement of the Department of Commerce. $7 for the aquarium. Zoo is free.
The cool place to “hang” is the U street corridor. Young people and food and drink. Also in Adams Morgan.
IMHO, two days is not enough to bother going out to Arlington or Mount Vernon. If you want to do one memorial, make it the Vietnam one. The wall is horrible and disturbing and essential - so many name, so many lives.
The Washington Post has a pretty good search engine on its website for stuff to do around the city. I’d look there too. And pick up a “City Paper” in the free orange and black kiosks around town. Express (free in yellow kiosks on weekdays) has some evening listings too.
Hope that helps.
For some really cool history (that wasn’t imported like most of the Smithsonian stuff) - check out the C&O canal locks in Georgetown - you can even ride a canal boat - though check for times.
The blind insist on leading the lame:
AP -”Geithner says derivatives blindsided the gov’t”
WASHINGTON – The huge amount of money tied up in complex derivative transactions helped cripple the economy, Treasury Secretary Timothy Geithner told lawmakers Friday as he laid out a case for greater government control over a generally unregulated sector of the financial markets.
“Establishing a comprehensive framework of oversight is crucial,” Geithner said in his opening remarks to a joint hearing by the House agriculture and financial services committees.
Despite apprehension among Republicans, the effort to add government restrictions to these more freewheeling financial instruments has gained support within the Democratic-controlled Congress.
“Clearly, we’re going to be significantly expanding regulation of derivatives,” said Rep. Barney Frank, the chairman of the Financial Services Committee.
Derivatives are financial instruments whose value derives from something else, such as a mortgage-backed security or a commodity like oil. The allure of the over-the-counter derivative, as opposed to those swapped on exchanges, is that it can be individually negotiated and tailored to meet the specific needs of the buyer.
Geithner said the ease with which derivatives were bought and sold in an era of easy credit encouraged financial institutions and investors to take on too much risk. At the same time, government regulators weren’t given the proper tools to mitigate those risks and protect the American consumer, he said.
In other words ,there was no requirements for transparency or reasonable reserves ,and de-regulation didn’t work ,in fact ,it produced the biggest ponzi -scheme crime wave in history .
And isn’t it interesting that Geithner views himself as part of the “Government” which should control all things now that the government policy is to let his “bank” make all the policies.
I wonder if Americans would react the same way to Geithner’s self serving pontifications if he just started calling the Federal Reserve by the name “Rothschild Bank” and referred to the U.S. Treasury as “our printing press” and to the U.S Taxpayers “the marks from whom we will confiscate all property and income”.
If you thought de-regulation helped produce the biggest crime wave in history, I agree. I also think that permanently placing “The Federal Reserve Bank” in the untouchable and unquestionable position as arbiter and de-facto regulator of all things financial, as now proposed by the Obama Administration, is the set-up for rampant theft and fraud on an even more colossal and catastrophic scale.
It’s sort of like two guys seeing a massive crime wave and saying “We need more cops to fight this crime wave! Where can we get people to become cops?” “Well, we got a whole bunch of people in the prison not doing anything right now. Why not let them out and give them badges?” “Sounds good. Git’r'done!”
I’ll have to agree with cobalt on this the FED should not be given more power. Regulation is the responsibility of the government and it should be done in the open and by people who are accountable.
“Regulation is the responsibility of the government and it should be done in the open and by people who are accountable.”
+infinity.
There seems to be a sudden renewed wave of optimism over the prospect of shorting builder stocks. It is quite amazing to me that there is still play in a strategy which seemed to me like a good idea as early as late 2004.
Wall Street Journal
* OPTIONS
* JULY 9, 2009
Traders Go Bearish With Bets on Home Builders
By ED WELSCH and TENNILLE TRACY
Options traders appeared to be making bearish bets in home builders Wednesday, as stocks in the sector declined.
In many cases, traders took positions in August options, which provide exposure to a wave of earnings in late July and early August.
After the worse-than-expected unemployment data earlier this month, traders are questioning whether the optimism over apparent signs of economic recovery was overdone, said William Lefkowitz, an options strategist at vFinance Investments.
“I think a lot of people thought the economy was turning and everything was going to be OK. Now you are starting to get some doubt in that thinking,” Mr. Lefkowitz said.
…
LOL. FWIW - I’m *still* shorting homebuilders myself, though plan to get out for good after the next leg down that I think is coming this fall. I did really get burned this spring, and mostly got out as a stop-loss measure. I’ve still got some in though.
Their market caps are still above 2000 levels mostly, which IMO is not justified at all. Not one of the biggies has gone bankrupt yet, and you know it’s coming. I think that people still underestimate the depth of the housing downturn yet to come; or should I say the length, which will just be a slow bleed to death for many of them.
Risk of course is inflation, which may serve to pump up their stock prices some. That’s why I’m planning to get out this fall. Given the current leg down though I’m tempted to go ahead and close out. I haven’t been paying as much attention as I should.
How can inflation be good for homebuilders. Interest rates will go up and people will have to spend more on food and fuel and materials for home building. If inflation comes it will not be the result of wage inflation that’s for sure so I see it as accelerating the decline in housing.
Inflation can be good for homebuilders for two reasons:
- In an high-inflation environment the best investment is fixed-rate debt, e.g. mortgages. So hypothetically a house can devalue relative to inflation but still be a good investment:
A. Buy house using 5% fixed-rate mortgage, 20% down
B. Inflation goes up to 7%, remaining there
C. Home prices go up 6% a year
So then home prices are still going down relative to inflation, but since your investment is leveraged, you gain 30% a year on your investment, soundly beating inflation.
- If (when) the homebuilders start making a profit again, the profits are larger than they otherwise would be, since they’re in inflated dollars. This is true of all companies of course - not just homebuilders. Thus stocks themselves are inflation hedges, including stocks of homebuilders.
The latter reason is why it’s not a good idea to short-sell *anyone* in the stock market in an inflationary environment. As an extreme example - the Zimbabwe stock exchange was the best performing stock market in the world in 2007; though of course in Zimbabwe dollars.
FWIW - I’m torn because I know that we are actually in a deflationary environment right now (especially in home prices); it’s hard to know when that will turn around to be inflationary. Being that if/when it turns it may be very quick - I’m not wanting to chance it.
As a follow-up - I certainly don’t expect home prices to go up 6% a year anytime soon - just using that to illustrate the general principle.
Actually I don’t think housing will be a good investment at all for still 5-7 years to come. But in regards to stock prices it doesn’t matter with I think - it matters with what the general investment community thinks. My single view on house investing isn’t going to drive stock prices up, but perceptions of “green shoots” (I think there will be another round next spring) can.
“In an high-inflation environment the best investment is fixed-rate debt, e.g. mortgages.”
What if interest rates adjust upwards to price in an inflation risk premium (like they did circa 1980)?
Not a problem of course if you already have a fixed-rate loan at a lower rate.
The thinking being here that there may be a burst (per se) of homebuying in the next couple of years *before* interest rates adjust upwards, in part fed by this expectation of inflation.
In the long run of course the housing market will inevitably meet an equilibrium anyhow; and any such burst will only be borrowing from the future. But investors don’t usually give a **** about the long run; they just see an upward revenue trend and extrapolate. (you can relate, right?
)
The ironic thing is that I am very much a long-run-investor personality type, however many of my investment decisions don’t follow that philosophy - simply because *other* people aren’t of that type. My “play” money tries to follow a lot of short-term trends, including short-selling stocks - which of course is the worst possible long-term investing strategy.
Don’t you still need a… job to buy a house? One that pays more than min wage?
24/7 Wall Street dot com
Troubled Homeowners Slashing Prices
Posted: July 10, 2009 at 4:58 am
Analysts who thinks that the housing market may rebound this summer better think again. Home sales have been slow and now there is evidence that homeowners are having so little success moving their residences that they are cutting asking prices at an alarming rate.
Housing website Trulia.com reports that “the price of nearly one in four U.S. homes for sale on July 1 had been sliced at least once.” The average cut was 10%, but in some cities it was much more.
Detroit, Miami, and Las Vegas are all markets where prices have been chopped by 15%.
The prices of homes in the US is already down an average of more than 20% and in some markets in California, Florida, Michigan, and Nevada that figure is above 40%. Economists have hoped that housing would find a bottom due to price cuts which make buying homes much more affordable. Mortgage rates are also near historic lows.
But, the new numbers show that the housing correction is probably far from over. A market like Detroit could end up with a price correction of more than 50% if past cuts and current cuts on asking prices are taken into account.
…
For months I’ve been stalking the Lofts at Moonlight Beach in Encinitas, and lo and behold, they haven’t sold one unit. They are now leasing:
http://voiceofsandiego.org/articles/2009/07/10/survival/191leasing070909.txt
I personally view the “slower-than-forecast” 18 pct YOY price decline in the April Case-Shiller/S&P numbers as a direct reflection of massive but unsuccessful intervention attempts to stop home prices from dropping like a rock.
U.S. Housing Market Is Cursed by Brain Freeze
Commentary by John F. Wasik
July 8 (Bloomberg) — If you are buying or selling a home in a market glutted with distressed properties, it’s time to change your attitude.
Don’t be misled by pundits saying the bottom may be visible in this stultifying decline. The real-estate recession will continue unless a massive brain freeze thaws. Buyers are afraid of purchasing a home at the wrong price while millions of sellers are locked into unrealistic listing prices.
Some good news after almost three years of deterioration is welcome, of course. In the latest S&P/Case-Shiller Home Price Index of 20 major U.S. cities, values fell 18 percent in April. That pace was slower than forecast.
That’s cold comfort as the collective psychology of the U.S. home market has been short-circuited for some time. We are largely hostage to the way our mind works. According to prospect theory, pioneered by psychologists Amos Tversky and Daniel Kahneman, the idea of losing money is a much more powerful motivator than a gain.
Our brains are telling us it’s painful to price our homes to reflect 20 percent to 50 percent losses in market values. So sellers overprice houses and wait for something to happen.
…
Any RE analysis that isn’t factoring in jobs and wages is useless.
“We are largely hostage to the way our mind works.”
What tripe. Snake oil anyone?
I have long suspected that academics live in a world removed from the rest of us, and recent MSM coverage of certain wacky ideas has only heightened my suspicions. How about the not-so-novel theory that household budget constraints coupled with a reversion to the traditional requirements that mortgage loans be repayable out of the borrower’s assets and future earnings might be driving home prices back down to affordable levels? No psychobabble economics, animal spirits or brain freezes are necessary for this theory to work.
LA Times Business
California: A ‘permanently smaller’ economy?
8:30 AM, July 10, 2009
Not that anyone in California should need more sobering-up about the state’s economic outlook, but the scenario painted by blogger Gregor Macdonald, who describes himself as a veteran oil analyst and energy investor, is particularly stark.
In a summary of his piece titled “The Scholarship of Collapse,” he writes:
“Without the two industries that characterized post-war growth in the U.S., housing and automobiles (and the financial industry that squatted on top of these) it’s hard to see how California — and the U.S. by extension — does not become a permanently smaller economy.
“I now foresee zero net physical infrastructure or housing growth in California for at least another 5 years. If housing units go up somewhere in California, they’ll be bulldozed someplace else. If new roads or highways are erected, they’ll be discontinued or dismantled somewhere else. Without California, there will be no sustainable U.S. GDP growth.”
I’m not convinced that the U.S. can’t grow without growth in California. Texans probably had similar thoughts when their mini-Depression began in the mid-1980s, with the collapse of oil prices and real estate values. But obviously the long workout ahead for California will weigh on U.S. growth.
In a broader view, Macdonald sees California as emblematic of the tipping point faced by the U.S. economy overall:
“The United States, just like California, now sits astride massive, gargantuan post-war infrastructure that was built with cheap energy and leveraged with cheap energy, for over 50 years. . . . To make matters worse, the federal government is in the midst of one of the largest policy mistakes in U.S. history as it has chosen to make enormous new investments in car companies, cars, biofuels, roads, and highways to the exclusion of public transport. This is a classic, textbook example of the sunk cost effect in decision making and is a hallmark of the collapsed societies of antiquity.”
– Tom Petruno
BINGO
+1000
James Howard Kunzler couldn’t have said it better.
LA Times Business
California: A ‘permanently smaller’ economy?
8:30 AM, July 10, 2009
I don’t know when you got back, but I sure appreciate your posts, PB.
Thanks.
Back yesterday, now jet lagged (it’s 5:15am where we were) but still up for posting, as the bubble news is at least as exciting right now as it was back at the onset of the credit crunch in August 2007.
Liberals and public transport - when will this end… Like all of us want to live the densely packed urban lifestyle like Europeans do.
Ever view a city like Tulsa, OK or Phoenix from the air - the urban infrastructure is made up of square mile sections with the “sprawl” distributed throughout. American infrastructure is designed around individualistic values (the very surveying technique that sectioned the landscape derived from the Northwest Land Ordinance which would deed a quarter section (full section in desert lands) to whomever would settle the land reflects the individualistic spirit of our culture… Older towns on the East coast, Asia and Europe were surveyed “organically” around rivers, valleys, etc and had everything much closer together.
United States
California’s budget crisis
Meltdown on the ocean
Jul 9th 2009 | LOS ANGELES
From The Economist print edition
As the state’s finances disintegrate, for many so does the California Dream
…
Mr Schwarzenegger, affecting insouciance as he smoked his trademark stogies, got his team to prepare a mocking YouTube video with footage of a committee hearing about whether cutting cow tails for udder hygiene was inhumane. “Right now, in the midst of a budget crisis, they are debating about cow tails, and I think that this is inexcusable,” Mr Schwarzenegger sneered, even as he chucked new reform proposals into the negotiations that are entirely unrelated to the current budget crisis.
…
California thus seems to be doing its level best to come to ruin and, as the nation’s largest economy, to drag the country’s hopes for a recovery down with it. The recession was the trigger but not the cause of the current malaise, which stems, as Fitch put it when explaining its downgrade, from “the state’s continued inability” to balance its budgets.
But what exactly does a crisis look like for an American state? “Falling off a cliff” is the usual metaphor but not an appropriate one, according to Ross DeVol, chief economist at the Milken Institute, a think-tank in Santa Monica. Instead of death on impact, he says, it is a matter of “who suffers in what order and how much?”
How is the new GSE 125 percent LTV underwater mortgage rescue plan supposed to help coastal bubble zones, where home prices are off by more than 40 percent and many are Jumbos (not GSE-financed)? BTW, a home that is 40 percent underwater requires a 167 percent (100*100/(100-40) = 167 pct) LTV program to rescue it.
New underwater-rescue plan won’t save many Bay Area homeowners
The Obama administration’s recent decision to expand the Home Affordable Refinance Program to help borrowers who are more deeply underwater on their mortgages won’t do much good in the Bay Area.
Michael Maloney/San Francisco Chronicle
I wrote about the revised plan in my July 2 column, which you can read here. Under the new guidelines, people who live in the home and are current on their payments might be able to refinance their first mortgage even if the loan amount is as high as 125 percent of the home’s current value. When the Home Affordable Refinance Program was originally launched, the maximum loan-to-value ratio was 105 percent.
The big catch: To qualify for the program, your loan must be owned or guaranteed by Fannie Mae or Freddie Mac. That doesn’t include too many people in the pricey Bay Area. Before the conforming loan limit was raised in high-cost areas last year, a large percentage of homes here were too expensive to be purchased with a loan eligible for sale to Fannie or Freddie.
…
“If you want to end the recession as soon as possible,” Warren Buffett told CNBC yesterday, “do nothing to encourage new home builders. That’s tough on the home builders, but that’s the prescription for getting supply and demand back in balance… The best thing we can do is not to be building a lot of new houses.”
Ummm, Warren, Slim here. Can I kiss you?
God bless Warren Buffet.
The man who invented the phrase “financial weapons of mass destruction.”
Someone else who saw it coming.
From the first cited article in the thread, with Shiller and Robini saying loss of “animal spirits” will end the recession:
“The fundamental problem, as Franklin Delano Roosevelt said in 1933, is fear,” Shiller, a Yale University professor, said yesterday on Bloomberg Radio’s “Surveillance.” The Great Depression was deepened by a “sense of lost confidence or animal spirits that was a self-fulfilling prophecy. The worry is that we will have the same kind of issue arising again.”
Anyone agree with me that the fundamental problem is debt, and the arrival of a future that was sold out in the past — public, corporate, personal?
The right quote is from Queen:
I want it all I want it all I want it all and I want it now
I want it all I want it all I want it all and I want it now
“Now” has become back then.
“Gotta find me a future move out of my way.”
Sorry, it was encumbered, securitized and sold.
It is estimated that there is at least $50 TRILLION dollars of derivatives and other snake oil deals out there.
As I understand it, that’s the entire world’s GDP for the NEXT 20 YEARS.
Very interesting data from WaPo about new household formation in the US… stick a fork in greenshoot already:
Fewer New Households Formed in Recession
Unemployment Likely to Make The Trend Worse
The number of people setting up their own households has fallen to some of the lowest levels in a generation, a trend that threatens to prolong the recession.
Many people, young and old, who in more promising times would be out on their own, are finding themselves like Alan Ridenour — stuck at square one.
A few months ago, the 22-year-old Texan had imagined himself going from government-agency intern to financial analyst, moving out of his college dorm room and into a place of his own.
That was more than 50 job applications ago. He is still an intern. And instead of his own place, his current address is the couch in his sister’s place.
“It’s not exactly how you picture yourself out of college — in an internship,” he said. “You got to eventually get a job that pays the big-boy bills.”
The recession has wreaked havoc on all sorts of life plans. Tumbling stock prices have cut retirements short. Layoffs have forced middle-aged children to move in with mom. Falling home prices prompt unhappy couples to rethink divorce. The larger consequence of all these discrete decisions is that Americans are forming fewer households, which in turn helps prolong the downturn.
The surplus in housing is dwarfed by the surpluss in rooms and squarefootage that we need. This is the card that the gov just can’t see coming.
The surplus in housing is dwarfed by the surpluss in rooms and squarefootage that we need. This is the card that the gov just can’t see coming.
Don’t you mean “surplus in rooms and square footage that we have but don’t need.”?
Yes rooms they don’t need.
They’ve squeezed as much as they can from the middle class of this country, as the middle class moves into poverty they will consolidate families and ditch expensive toys.
As the middle class is destroyed they will squeeze those with incomes in the top 5% to 0.5%. There was an article on assuming anyone who moved money to the caymens was trying to avoid taxes. I’m sure this does not hold for the top 0.1% they will continue to hide cash. All of the proposed tax changes to pay for healthcare hit those with incomes ie doctors, lawyers, lower level management, sports stars ect. Hedge Fund Managers and the elite will continue to pay much lower effective tax rates.
Hey nycdj. You probably already know about this…
nytimes http://www.nytimes.com/2009/07/10/arts/music/10djs.html?_r=1&8dpc
Dancing for people with daytime jobs.
New opportunities abound?!
I saw that today as well but didn’t read the whole thing.
It’s funny though how they treat this like it’s some sort of new phenomenon. It’s not.
Mid day sunday ‘raves’ have been going on for 15 or 20 years now. It started basically as a London thing, moved to the bid cities here (LA, Miami, NY) a little later and has been going strong ever since.
Unfortunately I’m getting a little long in the tooth to go to these things but I certainly did my share back in the day.
If I went to one now they would probably think I’m some sort of pedophile creep
Yes I been to a few…mostly house techno music, stuff i find BORING as heck.
Its really hard to be creative anymore. Its all about Money, and when that happens I don’t care how big a name you have it still sounds like hamburger music…..bland and the same.
I think that is the next big ripoff to end soon, the Celebrity DJ who gets paid a lot…to fly in and dj for a few hours…
Gennie Mo: New GM to Offer Public Option Car
by Scott Ott
(2009-07-10) — Now that the federal government owns 61 percent of General Motors the automaker plans to introduce a ‘public option’ vehicle as part of a sweeping plan to provide new cars for some 46 million Americans who lack proper transportation.
The new Government Sponsored Enterprise (GSE), dubbed Gennie Mo in a fashion reminiscent of Fannie Mae, will produce the low cost, high quality model to force private automakers to cut their prices and ultimately to guarantee the right of every U.S. resident to own a late model vehicle.
Rep. Barney Frank applauded the move and immediately introduced a bill that would require Gennie Mo to sell its cars to low-income citizens with no downpayments and no credit checks, at below-market adjustable interest rates.
LOL.
This came from The Onion, right? RIGHT?
Can somebody please get Barney Frank the heck out of the finance committee at the very least? My left butt cheek has more fiscal knowledge and responsibility than that stooge.
Not The Onion, but is satire - from Scott Ott at Scrappleface.
It’s good satire, because it’s just about at the edge of plausibility.
What sells it is ‘the right of every U.S. resident to own a late model car’
I could see Barney saying something like that.
Hi gang, I got a cool email from ahansen today and posted it on my blog, you’ll enjoy it a lot!
http://spotted-dog-ranch.blogspot.com/
And the theft continues
WASHINGTON (AP) — The Treasury Department is selling its financial stakes in bailed-out banks for one-third less than they’re worth, potentially shorting taxpayers up to $2.7 billion, a bipartisan congressional watchdog says.
The estimated shortfall concerns warrants, financial instruments that allow Treasury to buy shares of the firms at a set price in 10 years. If the stock prices of the banks go up, as they are expected to do, taxpayers could reap a healthy profit.
Treasury obtained the warrants when it began injecting billions into the nation’s largest financial institutions in October. They were considered a “deal-sweetener” — a way to help taxpayers benefit from the upside of a financial recovery that depended on billions of federal dollars.
Many large banks received permission to exit the program far earlier than was initially expected. Last month, Treasury announced that 10 of the nation’s largest banks — including JPMorgan Chase & Co., Goldman Sachs and Morgan Stanley — could repay about $68 billion of bailout money.
Twenty-two smaller banks have repaid their bailout money, and 11 of those have repurchased their warrants. If the warrants for those firms “had been sold for their true market values, taxpayers would have recovered $10 million more,” according to a report Friday from the Congressional Oversight Panel, which was created by Congress to oversee the $700 billion bailout fund.
The warrants were sold at a one-third discount over their true prices, according to the panel’s study. If warrants in the more than 600 banks participating in the bailout were sold at such a discount, that would mean taxpayers received $2.7 billion less than the panel estimates the warrants are worth.
Anyone following the Sergey Aleynikov case? Lots of intrigue…Goldmans-Sachs, FBI, secret source code that can manipulate the markets, arrested faster than a terrorist would be (in court on a holiday), etc. etc.
The guy who stole their magic bubble machine? Does seem to have disappeared from the headlines right quick.
Google News - “goldman sachs” There’s a few stories.
My favorite: “Goldman Sachs Loses Grip on Its Doomsday Machine”
from Denninger (Market Ticker)
Well now they’ve gone and done it:
“The staff of the SEC has expressed its belief that California’s recently issued IOUs are ’securities’ under federal securities law. As such, holders of these IOUs and those who may purchase them are protected by the provisions of the federal securities laws that prohibit fraud in the purchase or sale of securities,” the agency said.
That was a mistake.
Here’s why.
If you performed work or were otherwise owed money by the State of California (e.g. you are owed a tax refund) you’re owed money, not a bond.
What the SEC has just done is equivalent to declaring that you were not paid at all.
You did not agree to accept payment-in-kind, therefore, absent agreement you cannot be compelled to accept this bargain.
Therefore, if you are owed a tax refund, you still are.
If you invoiced the state, it remains outstanding.
I predict that the line in front of the courthouse is going to get very long, very fast, and furthermore, if you’re a vendor to California, you better quit shipping - now - before you wind up taking a forced haircut.
3.75% is nowhere near a reasonable interest rate for an insolvent institution, nor are you likely to appreciate the discount if you try to sell these “securities” for immediate cash
On the drive home I was listening to Talk Radio. One of the news updates was that the State of California had sent out a request to a large number of their vendors/contractors/servicers that they would like them to review and see if they could give them a 15% discount. Some Gal running a company that is contracted with California said that this was pretty much a joke and Profit Margins were in the neighborhood of 1%-3%.
Every company that I have done business with that has tried this sort of thing, ie ask for a discount and reduce costs has either shrunk or gone Bk some point in the near future. I am sure you are all shocked by this revelation.
Those Untouchable Pensions and Prop 13 are getting eye balled more every day.
“…see if they could give them a 15% discount.”
Since CA doesn’t own a fiat money press, it sounds as though they are doing whatever they can to jump start deflation.
I feel another I don`t stand with them speech coming.
Wells Fargo Sues itsel…ROFLMAO
http://www.foxbusiness.com/story/markets/al-lewis-wells-fargo-bank-sues/
“It takes some pretty shameless lawyers and a rich culture of corporate stupidity for a company to sue itself. I hope Wells Fargo loses this case and ends up having to drag itself all the way to the Supreme Court.”
Great find OCBear
I was driving in Bethesda, MD this evening, and wound up behind a big Ferrari. I immediately wondered if the driver’s gains were ill-gotten or legitimate.
Quite a difference from before the meltdown, where I would have just been envious of the fellow’s success and never considered if the gains were ill-gotten.
New York Times
U.S. > U.S. States, Territories and Possessions > California
California Budget Crisis (2008-09)
Updated July 10, 2009
California is facing a budget crisis caused by combination of outsized budget gaps, unusual budget rules and a morass of financial obligations approved at the polls. The state’s July 1 budget deadline passed without an agreement in place, and the state’s controller began printing i.o.u.’s in lieu of cash to pay taxpayers, vendors and local governments.
California’s budget woes have grown steadily since the housing bubble burst in 2007. The state has been hit especially hard by foreclosures, and has been hampered by steep drops in tax revenues and by high unemployment. In 2009, tax receipts were down 27 percent from the previous year.
…
I wonder what the wrong path looks like?
Geithner: Stimulus is working and on right path
By ANNE FLAHERTY and JIM KUHNHENN
The Associated Press
Friday, July 10, 2009
WASHINGTON — Despite persistently high unemployment, Treasury Secretary Timothy Geithner said Friday the Obama administration’s economic stimulus plan is on the “expected path.”
“There’s been substantial improvements in arresting what was the worst recession globally we’ve seen in generations,” Geithner told lawmakers Friday.
Biden just said everybody guessed wrong. If there have been substantial improvements why is porkulus 2 still on the table? This is incompetence with lots and lots of zeros.
All is for the best in this best of all possible worlds.
– Dr Pangloss –
Robin Olson
Sacramento Political Buzz Examiner
Rob Olson has had a love-hate relationship with politics since high school, and has written and worked in the field for several years during and after college. He can be emailed at allthatisgold1984@gmail.com.
Sacramento Political Buzz Examiner
California’s fiscal armageddon
July 9, 8:58 PM
Few Californians involved in politics can ignore the state of their state’s finances, particularly ones like me living 15 miles outside of Sacramento. The situation grows worse daily, with a recent report that the state controller John Chiang will begin issuing IOUs to taxpayers and small businesses.
In a more amusing turn of events, Arnold Schwarzenegger’s spokesman evidently felt compelled to declare that the governor “is not against condiments.” In a more predictable turn of events, large banks are indicating that they will no longer redeem California’s IOUs. And in probably the worst financial crisis in California’s history, the government faces a $26.3 billion shortfall for the new fiscal year.
Quite simply, there are two ways to fix the state’s problem: bringing in more revenue or cutting back spending.
…
The political situation in Sacramento is dire, and those who work here know it. For years the politically savvy have known that California’s government is ineffective at best, but in the last several months the mood has darkened as new lows have been reached. In an odd twist, there is probably a great number of the elite who feel powerless, who merely shrug their shoulders in knowing resignation that California is quite possibly ungovernable.
I hope that they are proven wrong, that the legislature fixes itself, and rights the ship of state.
But right now, I’d have to say that the Titanic had a better shot than the sinking government of California.
SF Chronicle
Big banks to reject state’s IOUs after today
Carolyn Said, Chronicle Staff Writer
Friday, July 10, 2009
(07-09) 19:26 PDT —
With the state’s biggest banks poised to spurn California IOUs after today, state and federal officials stepped in Thursday to try to lessen the pain resulting from California’s inability to pay its creditors.
California Treasurer Bill Lockyer cajoled banks to change their stance. Meanwhile, the Securities and Exchange Commission said it would regulate IOUs to thwart exploitation by investors buying them cheaply.
Cash-strapped California is churning out IOUs to pay taxpayer refunds and vendors. From July 2 through Wednesday, Controller John Chiang’s office said it issued 91,213 IOUs totaling $354.4 million. The IOU total could hit $2.87 billion if the situation continues throughout the month. The IOUs mature on Oct. 2.
Bank of America, Wells Fargo, JPMorgan Chase and Citibank plan to stop accepting the IOUs after today. Some smaller banks and credit unions will still accept them for existing customers.
“Our office will be contacting the banks to try and convince them to extend the July 10 cutoff date,” said Tom Dressler, a spokesman for Lockyer. “That would lessen the likelihood that recipients are going to suffer hardship after Friday.”
…
The California budget crisis is like a ginormous asteroid careening through space on a direct collision course with planet Earth. The incipient disaster is universally anticipated with great consternation, but there is nothing anyone can do to prevent its occurrence.
Financial Times
Governator plays it cool over IOUs
By Matthew Garrahan and Lionel Barber in Sacramento
Published: July 10 2009 22:37 | Last updated: July 11 2009 02:04
Arnold Schwarzenegger faces the fight of his life. The “Governator”, best known for slugging it out in Hollywood blockbusters as an indestructible cyborg, displays steely confidence as he battles California’s worsening budget crisis.
As some of America’s biggest banks on Friday stopped accepting IOUs issued by the cash-strapped state in lieu of money, Mr Schwarzenegger defended his handling of the crisis and denied playing a high-stakes poker game with political opponents over California’s finances.
“It’s not about who blinks first,” he told the Financial Times in a Bedouin-style smoking tent outside his office. “It’s not a game of chicken.”
California, which would be the world’s eighth-biggest economy were it a country, began its fiscal year last week without a budget because of political gridlock.
…
Bank of America, Wells Fargo and JPMorgan had set a time limit on accepting the IOUs, which California has been forced to print as it faces a $26bn deficit.
But it emerged late on Friday that Citigroup had agreed to extend its deadline for accepting the IOUs until July 17.
Bill Lockyer, California’s treasurer, said: ”Citi made a difficult but responsible decision. As for the other banks, their refusal to continue accepting IOUs is disappointing. I continue to believe they would better serve their customers and the taxpayers of California if they continued to accept the IOUs.”
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My sincerest wish is that the decision by mavens of Megabank, Inc to not accept CA IOUs comes back to bite them in the ass, as myriad home defaults in the crashing CA economy result in “larger than expected” losses on the toxic paper held by these banks.
Home builder Lennar Corp. stashes cash for drywall
By ALLISON ROSS
Palm Beach Post Staff Writer
Friday, July 10, 2009
MIAMI — Home builder Lennar Corp. has set aside nearly $40 million to deal with homes that it built using defective Chinese drywall, the company said in a regulatory filing on Friday.
In a form filed with the U.S. Securities and Exchange Commission, the Miami-based builder - one of the nation’s largest - said it has identified about 400 homes in Florida that it built with defective drywall. Most of the homes - which only constitute 2.1 percent of the homes Lennar built in the state - were built during the 2006 and 2007 fiscal years, the company reported.
Chinese drywall
Certain Chinese-made wallboard installed in thousands of Florida homes between 2000 and 2008 has been found to emit sulfuric odors and gases responsible for corroding electrical wiring, air conditioning components, bathroom fixtures such as toilet handles and even jewelry.
Through May 31, Lennar said it has accrued $39.8 million of warranty reserves to deal with the defective building material. It has spent about $5.4 million of that. The company also has $20.7 million for covered damages under its insurance coverage, Lennar said in its filing.
The company also said that 41 Florida state court lawsuits and two federal class-action lawsuits have been filed against the builder regarding Chinese drywall. It is trying to abate the state actions under a law that allows builders to repair problems.
In turn, Lennar (NYSE: LEN, $8.32) has filed a lawsuit against the entire supply chain that brought them the drywall.
Some drywall imported from China has been found to give off a sulfur odor linked to metal corrosion in homes and blamed by some for health problems in homeowners.