The Housing Bubble

Too early for coffee, and too late for same. Good morning and good night HBBers, have a great Sun-day!

See? I needed coffee after all. Have a great sunny Saturday.

How about that stimulus, eh? Heckuva job.

I usually give links to articles, but Paul Craig Roberts has summarized the current situation nicely.

Obama Helps Banksters Loot American Economy
By Paul Craig Roberts

There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical “New Economy.”

The “New Economy” was based on services. Its artificial life was fed by the Federal Reserve’s artificially low interest rates, which produced a real estate bubble, and by “free market” financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.

The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans’ wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.

The debt economy caused Americans to leverage their assets. They refinanced their homes and spent the equity. They maxed out numerous credit cards. They worked as many jobs as they could find. Debt expansion and multiple family incomes kept the economy going.

And now suddenly Americans can’t borrow in order to spend. They are over their heads in debt. Jobs are disappearing. America’s consumer economy, approximately 70% of GDP, is dead. Those Americans who still have jobs are saving against the prospect of job loss. Millions are homeless. Some have moved in with family and friends; others are living in tent cities.

Meanwhile the US government’s budget deficit has jumped from $455 billion in 2008 to $2,000 billion this year, with another $2,000 billion on the books for 2010. And President Obama has intensified America’s expensive war of aggression in Afghanistan and initiated a new war in Pakistan.

There is no way for these deficits to be financed except by printing money or by further collapse in stock markets that would drive people out of equity into bonds.

The US government’s budget is 50% in the red. That means half of every dollar the federal government spends must be borrowed or printed. Because of the worldwide debacle caused by Wall Street’s financial gangsterism, the world needs its own money and hasn’t $2 trillion annually to lend to Washington.

As dollars are printed, the growing supply adds to the pressure on the dollar’s role as reserve currency. Already America’s largest creditor, China, is admonishing Washington to protect China’s investment in US debt and lobbying for a new reserve currency to replace the dollar before it collapses. According to various reports, China is spending down its holdings of US dollars by acquiring gold and stocks of raw materials and energy.

The price of one ounce gold coins is $1,000 despite efforts of the US government to hold down the gold price. How high will this price jump when the rest of the world decides that the bankruptcy of “the world’s only superpower” is at hand?

And what will happen to America’s ability to import not only oil, but also the manufactured goods on which it is import-dependent?

When the over-supplied US dollar loses the reserve currency role, the US will no longer be able to pay for its massive imports of real goods and services with pieces of paper. Overnight, shortages will appear and Americans will be poorer.

Nothing in Presidents Bush and Obama’s economic policy addresses the real issues.

Instead, Goldman Sachs was bailed out, more than once. As Eliot Spitzer said, the banks made a “bloody fortune” with US aid.

It was not the millions of now homeless homeowners who were bailed out. It was not the scant remains of American manufacturing—General Motors and Chrysler—that were bailed out. It was the Wall Street Banks.

According to Bloomberg.com, Goldman Sachs’ current record earnings from their free or low cost capital supplied by broke American taxpayers has led the firm to decide to boost compensation and benefits by 33 percent. On an annual basis, this comes to compensation of $773,000 per employee.

This should tell even the most dimwitted patriot who “their” government represents.

The worst of the economic crisis has not yet hit. I don’t mean the rest of the real estate crisis that is waiting in the wings. Home prices will fall further when the foreclosed properties currently held off the market are dumped. Store and office closings are adversely impacting the ability of owners of shopping malls and office buildings to make their mortgage payments. Commercial real estate loans were also securitized and turned into derivatives.

The real crisis awaits us. It is the crisis of high unemployment, of stagnant and declining real wages confronted with rising prices from the printing of money to pay the government’s bills and from the dollar’s loss of exchange value. Suddenly, Wal-Mart prices will look like Nieman Marcus prices.

Retirees dependent on state pension systems, which cannot print money, might not be paid, or might be paid with IOUs. They will not even have depreciating money with which to try to pay their bills. Desperate tax authorities will squeeze the remaining life out of the middle class.

Nothing in Obama’s economic policy is directed at saving the US dollar as reserve currency or the livelihoods of the American people. Obama’s policy, like Bush’s before him, is keyed to the enrichment of Goldman Sachs and the armament industries.

Matt Taibbi describes Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentless jamming its blood funnel into anything that smells like money.” [Rolling Stone, July 13, 2009] Look at the Goldman Sachs representatives in the Clinton, Bush and Obama administrations. This bankster firm controls the economic policy of the United States.

Little wonder that Goldman Sachs has record earnings while the rest of us grow poorer by the day.

Good morning ahansen and Palmy!

WASHINGTON (AP) — The Treasury Department is scrapping plans to hire a cartoonist to lighten the mood of its employees who manage the nation’s $1.2 trillion debt, after a senator questioned its merits.

The cartoonist would have been hired by Treasury’s Bureau of Public Debt, which accounts for borrowed federal spending, at a time Congress is embroiled in a debate about increased government spending.

“Our training staff felt that at a time when employees are working extra hours, it might have been helpful,” said Kim Treat, a spokesman for the bureau.

But the effort was canceled because it had become “more of a distraction than an opportunity,” he said.

In a federal solicitation issued earlier this month, the bureau said it was looking for a contractor to conduct two, three-hour presentations for its employees on the benefits of humor in the workplace and the connection between humor and stress relief.

The contractor would have to be able to “create cartoons on the spot” about jobs at the bureau, the solicitation stated.

Treat said the solicitation was intended to collect more information, including how much it would cost, and that no money had been allocated toward the effort. The bureau’s annual budget is $187 million.

The office of Sen. Byron Dorgan, D-N.D., contacted the bureau after the solicitation was posted on The Drudge Report.

“Of all the agencies, the Bureau of Public Debt should know that there is very little that is funny about today’s economic conditions,” Dorgan said in a statement released Friday.

Summers. Feh. What a complete joke. Our guvmint can hand out propaganda better than the USSR of old.

http://www.nytimes.com/2009/07/18/business/economy/18summers.html

The Next Five Years.
Kenneth J. Gerbino & Company
Investment Management

* Inflation is coming back
* The U.S. stock market will probably stay in a trading range of between 6,000 and 12,000 on the Dow for a decade or more. A bull market year will be up 10-15%, a bear market year will be down 10-15%. This will be similar to the 1966 -1982 time period when the Dow stayed between 550 and 1,000 for 16 years
* Commodities will go much higher
* In 2-3 years inflation could be very severe and interest rates will go much higher. This will bring on another downward move in stocks
* After interest rates and inflation peaks in 3-5 years it will be a great time to buy quality U.S. stocks again
* Real estate will be a good buy in a few years
* China will buy gold mining companies and they will be followed by India. Why should these Central banks pay retail for gold when the can buy wholesale by having their sovereign wealth funds own gold mines and simply take the gold. This will take a lot of gold off the market and be very bullish for gold
* Disregard all the talk about the U.S. dollar being replaced any time soon. Russia pushing for this is a joke. California’s GDP is 40% higher than Russia! Texas is 10% bigger. The U.S. dollar is going down and so will most other currencies (but not as much as the dollar since the U.S. appears to be the current major monetary sinner
* Don’t worry about the end of the world or a great depression. Entrepreneurs, capitalism, free market players, producers and the movers and shakers of the world will find a way to make a product (and a buck) by producing and getting people something of value despite the politicians, inflations, recessions, panics and upheavals of the economy and markets. The old expression “The dogs bark but the caravan goes on,” is apt here

I have to laugh when people write about the breakdown of western civilization where there are no goods on the shelves etc. and there is chaos everywhere. Did you ever see that CNN special a few years ago when they were following the smuggling routes between Afghanistan and Pakistan. You saw these guys in turbans and flip flops and donkeys going over these high mountain cliffs on narrow paths risking their lives. On top of one of the donkeys was a case of Coca Cola probably bound for a small village somewhere. If they can handle getting Coke where people want it in the one of the most backward places on earth, I am sure the boys at Coke will also be able to figure it out here in the good ol’ USA., if things got out of hand. Ditto for almost all other goods. Good luck.

NJ woman cooks up bake sale to end foreclosure
(AP) –

TEANECK, N.J. — A New Jersey woman is hoping her bake sale will help forestall foreclosure and keep a roof over her head.

Angela Logan has until July 26 to raise $2,559.54 due her lender under a federal program to help homeowners in financial trouble.

The divorced mother of three sons has received orders for 42 “mortgage apple cakes” at $40 each since coming up with the idea last week.

Logan has lived in her Teaneck house for nearly 20 years. But she says a home-renovation nightmare contributed to her financial troubles.

Logan, an actress who also works locally as a comedian, tells The Record of Bergen County she and her family laugh to keep from crying.

Legendary TV news anchor Walter Cronkite dies…

NEW YORK (Reuters) - Former CBS News anchor Walter Cronkite, whose authoritative delivery of news events from the John F. Kennedy assassination to the Apollo moon landing and Vietnam War, made him “the most trusted man in America,” died on Friday at age 92.

Cronkite died in New York after an illness, CBS said. His family issued a statement weeks ago that he had been suffering for some years with cerebrovascular disease and was not expected to recuperate.

His death coincided with the 40th anniversary of the Apollo 11 mission, which took the first astronauts to the moon. Cronkite was a passionate chronicler of the space program and anniversary celebrations of Apollo 11 have featured frequent rebroadcasts of his coverage of the historic moon landing.

“He was the consummate television newsman,” said Don Hewitt, a longtime CBS News executive and creator of the long-running “60 Minutes” news program. “He had all the credentials to be a writer, an editor, a broadcaster. There was only one Walter Cronkite and there may never be another one.”

A person Sir Allen “bubbles” Greasepan used to follow…

“Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others.”
–Ayn Rand

Zions Unit Buys Vineyard Deposits as Four Lenders are Shuttered

July 18 (Bloomberg) — Zions Bancorporation’s California Bank & Trust unit acquired the deposits of Vineyard Bank, one of four lenders seized yesterday by regulators. The failures will cost the Federal Deposit Insurance Corp. a total of $1.09 billion.

California Bank & Trust in San Diego said it assumed $1.5 billion in deposits and $1.4 billion in loans from Rancho Cucamonga, California-based Vineyard, which lost more than $100 million last year as builders defaulted on construction loans. Vineyard was closed by the Office of the Comptroller of the Currency and the FDIC was named receiver, the FDIC said in a statement.

The FDIC entered a loss-sharing transaction with California Bank & Trust on the acquired assets. The regulator will also share losses on $1.3 billion of assets related to the seizure yesterday of Temecula Valley Bank in Temecula, California, which was shuttered by the state’s regulator.

Regulators have closed 57 U.S. banks this year, the most since 1992, when 181 lenders failed or entered government- assisted transactions. Bank failures, including 10 in Georgia, have drained more than $10 billion from the deposit insurance fund this year, led by $4.9 billion for Florida’s BankUnited Financial Corp., the largest bank to collapse this year.

The lenders closed yesterday had combined assets of $3.79 billion and deposits of $3.26 billion.

Midnight Special
- Creedence Clearwater Revival

You wake up in the morning
Your house is three years old
Half your blocks in auction
The other half aint sold

Your headin for the table the table
There`s a smell up in the hall
When they built your mansion
They used Chinese drywall

Let the housing bubble
Shine a light on me
Let the housing bubble
Shine a ever-lovin light on me

Yonder come miss Rosie
How in the world did you know
By the way she wears her apron
And the clothes she woe
Umbrella on her shoulder
and a mortgage in her hand
She come to get a cram down
In a workout plan

Let the housing bubble
Shine a light on me
Let the housing bubble
Shine a ever-lovin light on me

If you’re in Miami,
And you bring your wife
Don`t ya buy that condo
Don`t ya catch that knife
HOA will grab you
And the taxes bring you down
The next thing you know boy,
You’re foreclosure bound

Let the housing bubble
Shine a light on me
Let the housing bubble
Shine a ever-lovin light on me

OT… Here in S.C. we have rated at or near the bottom of the education scale for decades. No matter how many hundreds of millions we spend, makes no difference, of course the cry is always for more money, and we continue to pour it down the rat hole. Here’s an example of our common ignorance, but in this fellows defense he was most likely educated in our public school system.

Found this in the Greenville News in the Letters to the Editor page: “I write these words on the Fourth of July after rummaging through the change in my pocket and noticing with sadness that the new coins no longer have “In God We Trust” on them. Seems that they disappeared, and with little if any protest. Maybe it’s because we have forgotten where those words came from. Actually, they come from our national anthem, “The Star-Spangled Banner.” ~Bob Lawrence

What is in the drinking water in Greenville, SC? The national motto has NOT been removed from U.S. coins. It’s still on paper currency, too.

Mr. Lawrence contends the inspiration for the “In God We Trust” motto came from the national anthem. We doubt that. The motto began appearing on U.S. coins in 1864 and was first inscribed on the U.S. cent in 1909.

The national anthem was not adopted until 1931.

Should this stuff not be taught in school? Or do historical facts no longer matter?

Alright, let’s see if we can get this working…

From the Island Ad-Vantages, “Your East Penobscot Bay Weekly”

STONINGTON — Today, the building that once housed one of the town’s two convenience stores remains empty. It is owned by Union Trust, a division of Camden National Bank.
The bank took the property in foreclosure from owners Shelly and Steve Spivey and attempted to auction it in March. Beginning the bidding at $150,000, only one bid — for $50,000 — was received, and the bank opted to retain the property. The bank has paid the back taxes on the property.
The building and its 0.19 acres are currently listed with Sargent Real Estate for $137,500. (MLS #939863)

*************************

So much for the folks who think “it’s different here.”

Hi.
1. NYT RE section today has a great article about people who have to sell. Need more space for baby, job transfere to Swizterland. One numbskull bought (in this market !) before selling the old place. The quotes are great. YEP this time next year VERY interesting. Also an article about falling rents and how people are returning to the city but negotiating rents.
2. Inventory building in No. VA inside the beltway. It still might be different here but not for long.

This blog reminds me of the White Album…

Went for an early am walk through the neighborhood. Two years ago lawns manicured, etc now things are looking like an extension of TJ. A couple blocks away at a rental the new people moved in and put a sofa outside the garage door for the neighborhood kids to sit on. Another kid of about 8-10 rides a little motorized bike continually up and down the street. Another hispanic man who stays home all day long walks to the mailbox (NBU box) with 5 small kids, not on the sidewalk but right down the middle of the street and not even watching for people backing out of their driveways. It’s too early to drink so I’ll head to the gym later to work off my hostilities.

Went to check out two more houses in the surrounding area of Salinas. This time in Indian Springs a gated community. Both house were about 30 yrs old and what a piece of crap. Asking prices $500K and $700K+. All kinds of problems with sub-flooring, etc. Great view but houses need to be torn down and rebuilt. Amazing what people have paid to live in until they are being forced out. I am now a firm believer that people in Monterey Co. have absolutely no taste and by houses like they buy clothes and cars, that is just a label or an address.
Found out last evening that water prices are going through the roof over in the bay area (Monterey, Carmel, PG,Seaside) and that they are counting on a de-sal plant in Moss landing for relief. Let’s watch the environmental groups on this one.

San Diego’s serial bottom caller brigade has suggested the recent uptick in the median used home sale price is a sign that a bottom is at hand. How does their conjecture square with an unemployment rate over 10 percent for the first time since 1983? Are they sufficiently ignorant to believe that real estate prices can power steadily upward against the backdrop of double-digit unemployment, are is it that they are just lying through their teeth?

Jobless rate tops 10% in S.D. County
Uptick in hiring in some industries can’t offset losses
By Dean Calbreath
Union-Tribune Staff Writer
2:00 a.m. July 18, 2009

For the first time since the early 1980s, San Diego County’s unemployment rate surged above the 10 percent mark last month, according to state data released yesterday.

Though there were some glimmers of hope in the employment numbers – including a pickup in hiring in the long-beleaguered real estate and construction industries – there were not enough jobs to keep pace with new entrants to the market.

With a wave of high school and college graduates looking for summertime work, the number of jobless rose by 8,000, pushing the unemployment rate from 9.6 percent in May to 10.1 percent in June – its highest level since the recession of 1982-83.

“We may be starting to skate along the bottom, but we’re not able to take care of any new job seekers,” said Marney Cox, economist with the San Diego Association of Governments.

The seasonally adjusted California unemployment rate remained unchanged between May and June at 11.6 percent. Without the adjustment, the unemployment rate in the state – which lost 66,500 jobs – would have jumped from 11.3 percent in May to 11.6 percent last month.
…
Alan Gin, economist at the University of San Diego, said the local jobless rate could hit 11 percent or 12 percent before it begins to decline next year.

“I don’t see a lot of signs of a turnaround,” Gin said.
…

There has never been a better time for a member of the Megabank, Inc cartel to reap the rewards of a free too-big-to-fail insurance policy.

Rescued Banks Post Big Profits, Drawing Ire
Lending Hasn’t Risen With Strong Earnings

By Binyamin Appelbaum
Washington Post Staff Writer
Saturday, July 18, 2009

FILE - In this April 21, 2009 file photo, a branch of Bank of America is shown in New York’s Times Square. Bank of America joined other big banks in reporting a big second-quarter profit Friday, July 17, 2009, even as losses from failed loans continued to rise. (AP Photo/Mark Lennihan, file) (Mark Lennihan - AP)

The huge profits reported this week by some of the nation’s largest banks showed that the government is succeeding in its rescue of the financial industry, but the details of those earnings reports made it clear that the broader economy is not seeing the benefits.

Bank of America and Citigroup yesterday became the latest megabanks to report multibillion-dollar profits in the second quarter, joining J.P. Morgan Chase and Goldman Sachs. The four banks together earned $13.6 billion only half a year after they lost a combined $20.8 billion.

Washington once celebrated such profits as evidence of economic strength, but the current round of earnings has instead become a political problem.

Simmering public anger over the pay practices of large financial companies has been fanned by the news that banks rescued so recently are now profiting so massively, particularly because trillions of dollars worth of federal aid has yet to revive lending, a critical step toward economic recovery.

The Obama administration moved yesterday to harness that anger in the service of its proposal to reform financial regulations.

The president’s chief economic adviser, Lawrence H. Summers, said after a speech at the Petersen Institute for International Economics that the profits were made possible by “the extraordinary public support provided by the federal government.” While he welcomed the performance as “a positive indicator for the economy,” Summers said that the government still needs to reform financial regulations to prevent companies from engaging in the kinds of excesses that produced the crisis.

“No one should be confused about the extent to which the public sector has provided a foundation for financial recovery,” Summers said. “And in that context, it is the obligation of the public sector to insist that reforms be put in place so that the mistakes of the past are not repeated.”
…

Prediction: The Plunge Protection Team will chicken out and cobble together a behind-the-scenes rescue for CIT (along the lines of the Long-term Capital Management, Countrywide and Merryl Lynch bailouts). At the end of the day, CIT will prove too-scary-to-fail.

US-BUSINESS Summary

Reuters
Saturday, July 18, 2009; 9:52 AM

CIT talks to bondholders; bankruptcy still feared

NEW YORK (Reuters) - CIT Group Inc is in talks with a group of bondholders for $2 billion to $3 billion in rescue financing as it tries hard to avoid bankruptcy, a source close to the company said late on Friday. Bankruptcy is possible if these talks fail, and CIT, a 101-year-old lender that services nearly one million small- and mid-sized businesses, is also exploring the possibility of getting debtor-in-possession (DIP) financing, the source said.
…

Whither California’s budget?

Christian Science Monitor
Clock’s ticking for California budget talks

As a deal stalled over school funding cuts, warnings sounded about rising state debt and falling bond ratings.

By Michael B. Farrell | Staff writer/ July 17, 2009 edition

San Francisco

California lawmakers pushed back the start of summer recess Friday as they battle to end an epic budget stalemate that’s exacerbating a financial crisis and adding to calls for political reform.

If a deal isn’t reached soon, California’s bond rating could sink to junk status, warned state treasurer Bill Lockyer Thursday.

Legislators and Gov. Arnold Schwarzenegger seemed close to inking a deal earlier this week to close a $26.3 billion budget shortfall, but talks broke down Wednesday over cuts to educational spending.

“The good news is that they are on the last mile of the marathon. But even though they are close to the finish line, both sides have plenty of incentive to maintain their positions,” says Dan Schnur, executive director of the Jesse M. Unruh Institute of Politics at the University of Southern California.
…

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CNSNews.com
Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’
Thursday, July 16, 2009
By Penny Starr, Senior Staff Writer

Vice President Joe Biden (Photo by Penny Starr/CNSNews.com) (CNSNews.com) – Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money.

“And folks look, AARP knows and the people with me here today know, the president knows, and I know, that the status quo is simply not acceptable,” Biden said at the event on Thursday in Alexandria, Va. “It’s totally unacceptable. And it’s completely unsustainable. Even if we wanted to keep it the way we have it now. It can’t do it financially.”

“We’re going to go bankrupt as a nation,” Biden said.

“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that’s what I’m telling you.”

Keep picking on the CIA and one of these days were gonna need a lot of health care.

Indonesia suspects fugitive terrorist in bombingsJuly 18, 2009 10:26 AM ET

All Associated Press news JAKARTA, Indonesia (AP) - Suspicions hardened Saturday that the fugitive leader of a Southeast Asian terrorist group masterminded suicide bomb attacks on two American luxury hotels in Indonesia’s capital that killed seven people.

Investigators examined body parts and other forensic evidence in an attempt to identify the two bombers. They confirmed the death of a third Australian in Friday’s blasts — bringing the number of confirmed foreign fatalities to at least four — and said their earlier toll of eight had included the two bombers.

Terrorism experts said they strongly suspect the attacks were orchestrated by Noordin Top, a Malaysian fugitive who heads a breakaway faction of the Southeast Asian militant network Jemaah Islamiyah.

“I’m 200 percent sure this was his work,” said Nasir Abbas, a former Jemaah Islamiyah leader turned police informant who has worked with police on investigations into Indonesia’s last three terrorist attacks.

The bombers posed as guests attacked the J.W. Marriott and Ritz-Carlton hotels in Jakarta, setting off a pair of blasts that wounded more than 50 people, authorities said.

A police investigator also told The Associated Press on Saturday that Noordin was the most likely suspect.

“Considering the target, the location and content of the bombs, it was clearly the work of Noordin,” the investigator said, declining to give his name because he wasn’t authorized to speak to the media.

He said police had confiscated handwritten notes, a cell phone and a bomb encased in a laptop computer from room 1808 of the Marriott, where the bombers had apparently prepared for the blasts.

The investigator said a hotel receptionist told police that the man who checked into the room gave his name as “Nurdin.” He gave a $1,000 cash deposit because he had no credit card, he said.

Authorities have not officially named a suspect, but suspicion quickly fell on Jemaah Islamiyah or its allies. The al-Qaida-linked network is blamed for past attacks in Indonesia, including a 2003 bombing at the Marriott in which 12 people died.

The heads of four of the bodies recovered from the blast scenes — two at each hotel — had been blown off, the police investigator said.

It has been nearly four years since the last major terrorist attack in the world’s most populous Muslim nation — a triple suicide bombing at restaurants on the resort island of Bali that killed 20 people.

Friday’s strikes raised questions about security gaps at high-end hotels, which have become popular targets for militants in recent years, most notably in Mumbai, India, where attacks in November killed 164 people.

Security was boosted at sites frequented by Westerners across the Indonesian capital of 13 million, where hotels already screen every vehicle, and guests enter through metal detectors. However, many visitors say searches are often cursory.

The attack occurred as the Marriott was hosting a regular meeting of top foreign executives of major companies in Indonesia organized by the consultancy firm CastleAsia, said the group, which is headed by an American.

Officials have identified five of the dead — three from Australia, one from New Zealand and one from Indonesia. The Health Ministry initially reported the death of a Singaporean, but police said they were unable to confirm that.

Australian Foreign Minister Stephen Smith said Saturday after meeting with his Indonesian counterpart that the dead included Trade Commission officer Craig Senger.

“The hearts of our nation go out to those families,” he said.

Family members of another Australian victim, Perth businessman Nathan Verity, were expected to identify his body Saturday before taking it home to be buried, the Australian Associated Press reported, quoting a family friend.

The dead New Zealander was identified by his employer as Timothy David Mackay, who worked for cement products manufacturer PT Holcim Indonesia.

Officials said 17 foreigners were among the wounded, including eight Americans and citizens of Australia, Canada, Hong Kong, India, Italy, the Netherlands, Norway, South Korea and Britain.

Six of the injured were being treated for burns and shrapnel wounds in Singapore, a 90-minute flight from Jakarta, said International SOS, a provider of medical assistance.

None of the Americans suffered life-threatening injuries, State Department spokesman Robert Wood said.

Two of those wounded at the Ritz-Carlton were employees of Phoenix-based Freeport McMoRan Copper & Gold Inc., said Bill Collier, a company spokesman. He declined to identity the two men or their nationalities, citing company policy, but said their injuries were not life-threatening.

The blasts at the high-rise hotels, located side-by-side in an upscale business district in Jakarta, blew out windows and scattered debris and glass across the street, kicking up a thick plume of smoke.

The attackers evaded hotel security, smuggling explosives into the Marriott and apparently assembling the bombs on the 18th floor, where an undetonated device was found after the explosions.

Security videos captured the moment of the explosion in the Marriott. The brief, grainy images show a man wearing a cap and pulling a bag on wheels walking across the lobby toward the restaurant, followed by a flash and smoke filling the air.

Haha, in one of my research papers I cited an author named Borck.

I’ve been Borcked!

Amusing story out of Phoenix this morning (where at 8 AM it’s already a bracing 93 degrees). I was visiting with a friend yesterday who has a friend who, over the past several months, has been “snapping up” foreclosed houses to fix and resell. Lately this segment of the market here has been getting overheated, resulting in frequent bidding wars. This person bought a house in the west valley for $80K that was in fairly decent shape, put a little money into it for paint/carpet, and listed it for sale at $112. An offer came in, but, unfortunately, the appraisal came back at just over the price he paid which killed the deal. So he called the mortgage company and asked if they couldn’t somehow find a “friendlier” appraiser. The response? “We can’t do that anymore.” This is amusing on several levels, but the tacit admission of fraud encapsulated in the word “anymore” is priceless.

This guy has lots of money so he’s not exactly going to be financially damaged by this little snafu. Still, as stuff like this gets out it may put a damper on the foreclosure knife catchers.

http://finance.yahoo.com/news/Regulators-shut-banks-in-apf-3150718720.html?x=0

Regulators shut Calif. banks, small banks in Georgia, South Dakota; marks 57 US bank failures

* By Marcy Gordon, AP Business Writer
* On Saturday July 18, 2009, 2:36 am EDT

“The number of people searching for the term “economic depression” on Google is down to normal levels, Summers said.

Searches for the term were up four-fold when the recession deepened in the earlier part of the year, and the recent shift goes to show consumer confidence is higher, Summers told the Peterson Institute for International Economics.”

Unbelievable the Washington DC mindset coupled with that of the so called scholastic elite and fed to the main stream media sheepal.

Hello fellow Goldmans. What a great day in Goldman. I am so proud to be a Goldman. I love the new president of the United States of Goldman. Go Goldman!!!

Does anybody believe that a American Corporation that sets up a
manufacturing plant in a cheaper labor country should have to give up their rights ,and be charge a high tax for importing the products back to America ?

Does anyone here know anything about the Kanab, Utah market? My sister just told me she bought a house without even looking at it. Says the price and interest rate couldn’t be beat. Oh well, I tried.

The number of speculators in the real estate market right now is almost unbelievable. I just saw a news snippet of a guy in Detroit who has purchased 250 properties so far. He is flipping them, though they didn’t say how buyers were obtaining financing, and these are very, very poor neighborhoods. Las Vegas has recently seen the most sales per month in it’s history. In northern, NV, the speculators are almost in a feeding frenzy as there are multiple offers on low end properties. While the prices may seem inexpensive as compared to the market peak, I still think they are overpaying when all is said and done. Furthermore, can a market really be considered healthy when it’s mostly driven by speculators? We’ve got 2005 all over again, albeit at lower prices. This can not end well, IMO.

Amish emergency care: Amish farmer Josiah Yoderhad PSVT, just like he told me. And he required synchronized cardioversion about once every year or two. He had been offered ablative surgery many times. But he considered how often he required cardioversion and decided that the cost of surgery wasn’t worth it.

Surprised, I looked around to see that the charge nurse hadn’t even started with the IV prep. Instead, she gave me a knowing look and said, “He never uses any sedation.”…this man was going to pay the full price of what I billed for my services. And he was going to pay it in cash…that day. Mr. Yoder’s bill was a fraction of what would normally have been charged for that diagnosis.

“To burden a country currently in the throes of a violent recession with such a bureaucratic albatross clearly illustrates the scarcity of economic intelligence in Washington.” ~Peter Schiff

Benito Obama is pushing as fast as he can… Who pays?

Prescription for Disaster
by Peter Schiff

The health care bill unveiled this week by the House of Representatives (with the full support of the Obama administration) is one of the worst pieces of legislation ever drafted. If passed, it will reduce the quality and increase the cost of health care in America. But more importantly, it will severely undermine our already weak economy. To burden a country currently in the throes of a violent recession with such a bureaucratic albatross clearly illustrates the scarcity of economic intelligence in Washington.

In the first place, specifically taxing the rich to pay for health care for the uninsured is the wrong way to think about tax policy and is an unconstitutional redistribution of wealth. While the government has the constitutional power to tax to “promote the general welfare,” it does not have the right to tax one group for the sole and specific benefit of another. If the government wishes to finance national health insurance, the burden of paying for it should fall on every American. If that were the case, perhaps Congress would think twice before passing such a monstrosity.

In the second place, the bill is just plain bad economics. For an administration that claims to want to create jobs, this bill is one of the biggest job-killers yet devised. By increasing the marginal income tax rate on high earners (an extra 5.4% on incomes above 1 million), it reduces the incentives for small business owners to expand their companies. When you combine this tax hike with the higher taxes that will kick in once the Bush tax-cuts expire, and add in the higher income taxes being imposed by several states, many business owners might simply choose not to put in the extra effort necessary to expand their businesses. Or, given the diminishing returns on their labor, they may choose to enjoy more leisure. More leisure for employers means fewer jobs for employees.

More directly, mandating insurance coverage for employees increases the cost of hiring workers. Under the terms of the bill, small businesses that do not provide insurance will be required to pay a tax as high as 8% of their payroll. Since most small businesses currently could not afford to grant 8% across-the-board pay hikes, they will have to offset these costs by reducing wages. However, for employees working at the minimum wage, the only way for employers to offset the costs would be through layoffs.

The uninsured self-employed, or those working as independent contractors, will be forced to buy insurance or pay a tax equal to 2.5% of annual income. Either choice will divert resources from more productive uses into an already out-of-control health care bureaucracy.

Sadly, the bill does nothing to restrain or alter the dynamics that have caused health care costs to spiral ever higher. In fact, the bill will intensify these pressures.

The simplest (but by no means fullest) explanation of why health care costs so much is that demand exceeds supply. Demand is a function of how much people are prepared to pay. Insuring more people will drive demand for health care services even higher. (To truly get a handle on out-of-control health care costs, we need more people paying for routine medical care out of pocket, and tort reform for medical malpractice. See my previous commentary.)

As costs continue to soar, expect additional tax hikes to fund the added expense. As these additional taxes further encumber a weak economy, the diminished tax base will yield lower total tax revenues – despite higher rates. As the politicians attempt to pass ever higher increases to make up for revenue shortfalls, a vicious cycle toward insolvency will ensue.

The worst part of the whole fiasco is trying to imagine the bureaucracy necessary to administer this plan. My guess is that the government provider will mis-price its policies on the low side, pushing employers to dump private sector insurance for the taxpayer-subsidized alternative. Such a system will further distort health care pricing and, ultimately, make a bad situation intolerable.

The enormity, complexity, and expense of this bill could well pull the rug out from what many of my cheerleading colleagues believe to be the beginning of an economic recovery. The way I see it, the economy is walking dead anyway, and this measure is the equivalent of a stake through the heart. But even if we manage to escape the grave this time, Congress is working on a few other ideas that will surely keep us buried.

Well I just went for a walk to check out an open house just a mile plus away. I wanted to see if anyone out this way had any idea on how to build a house, especially when people were paying $500K and above. Doesn’t seem like it so far. This one was now listed as $385K. Pictures on the internet (Trulia in this case) do lie, not Trulia’s fault, just the RE crowd putting their best talents to work. The RE’s present even had a broker there to pre-qualify me. When I pointed out the errors in the floor plan one RE piped up and told me that I could change that. My response, “at this price it better be turn-key perfect”.
Then I told them that I’m looking to see what’s out there and I have no intention to buying until I see what the neighborhood is going to look like after all this musical house playing is over. They agreed that all the dead and dying lawns don’t make one anxious to buy.
The best part was when I mentioned looking at the on-line sites of Redfin and Trulia and how it looked as though someone had shot the different housing areas up this way with a 410 shotgun. I love the sound of an audible sigh. Now I’m sitting here typing and drinking an ‘orange blossom amber beer’ before I hit the really hard stuff.

So, I was going thru my mp3s this afternoon and ran across this gem from 1983 performed by Keith Morris and the Circle Jerks. Seems appropriate for today’s political climate. Think it’s also on the Repo Man soundtrack.

————————————————————

in a sluggish economy
inflation,recession
hits the land of the free
standing in unemployment lines
blame the government for hard time

we just get by
however we can
we all gotta duck
when the s*it hits the fan

10 kids in a Cadillac
stand in lines for welfare checks
let’s all leach off the state
gee!the money’s really great!

soup lines
free loaves of bread
5lb blocks of cheese
bags of groceries
social security
has run out on you and me
we do whatever we can
gotta duck when the s*it hits the fan

For the first time, some I actually know is taking the “ruthless default” way out (No. Cal, Santa Rosa). But her Mom just bought a house in the same town as an “investment” because it was “cheap” and is trying to get the son/brother to rent it at above market rates… so she can “break even.”

They are still selling crazy out there.

For gods sake is pilosis mouse OK
Dozens injured in San Francisco light-rail crashJuly 18, 2009 9:47 PM ET

All Associated Press news SAN FRANCISCO (AP) - Several dozen people were injured when two San Francisco light-rail trains collided Saturday afternoon at the West Portal Station, authorities said.

Forty-four people were taken to hospitals — three with what appeared to be severe injuries — when a San Francisco Municipal Railway L train rear-ended a K train at the boarding platform about 2:30 p.m., officials said.

“This is probably one of the largest multiple-casualty incidents in recent years (in San Francisco),” said Pat Gardner, a deputy chief with the San Francisco Fire Department.

The tiny mouse that became a hotly disputed symbol of wasteful spending in the congressional debate over the $787 billion economic stimulus bill has returned to pester House Speaker Nancy Pelosi.

The Obama administration quietly announced last week that as much as $16.1 million from the stimulus program is going to save the San Francisco Bay area habitat of, among other things, the endangered salt marsh harvest mouse.

That has revived Republican criticism that the pet project was an “invisible earmark” in the massive spending bill for Mrs. Pelosi, whose San Francisco district abuts the bay, and epitomizes the failure of stimulus spending to help an economy still shedding jobs.

“Lo and behold, the government has announced that the mouse is getting its money after all,” House Minority Leader John A. Boehner said while standing beside a poster of the furry varmint. “Speaker Pelosi must be so proud.”…

With appraisals now in lenders’ hands, Realtors worry that lower valuations will stifle any recovery
Click-2-Listen
By JEFF OSTROWSKI

Palm Beach Post Staff Writer

Sunday, July 19, 2009

Realtor Robert Garrison thought he had put together solid deals for two homes in Palm Beach County. Then the appraisals arrived.

One property, west of Lake Worth, had a contract for $257,000. The appraisal came in at $180,000. The other home, in Loxahatchee, found a buyer willing to pay $250,000. The appraiser’s estimate: $215,000.

Sometimes a home sale can be salvaged despite a low appraisal. Doug Clark of Boca Raton Realty said he represented buyers in two recent sales west of Boca Raton.

In one sale, the contract price was $210,000, and the appraisal came in at $200,000.

In the other, the buyer offered $275,000, but the appraiser valued the house at $260,000.

In both cases, the buyer agreed to pay a little more, the seller agreed to take a little less, and Realtors on both sides of the deal gave up part of their commissions.

Clark blames the lenders, not the appraisers, for low values. One house boasted new windows, a new roof, a new air conditioner and a renovated kitchen, yet the lender allowed the appraiser to raise the home’s value by only $5,000.

‘The underwriters, who never see the property, are giving guidelines to the appraisers,’ Clark said. ‘The appraisers can’t really give their honest opinion.’

The buyer of the Loxahatchee home decided to pay cash, but the other deal is languishing, Garrison said.

“To be selling at $257,000 and get a $180,000 appraisal is insanity,” said Garrison, an agent at Keller Williams Realty. “It’s killing the market.”

Garrison’s gripe isn’t just sour grapes from a Realtor who lost a commission in a difficult economy. Realtors, mortgage brokers and home builders across the country say lowball appraisals threaten to stall the housing recovery before it starts.

In separate surveys this month by the National Association of Realtors, the National Association of Home Builders and John Burns Real Estate Consulting, real estate professionals cited appraisals as a major obstacle. In the NAR survey, 37 percent of Realtors said they had lost deals because of appraisals.

Because mortgage amounts are based on appraisers’ estimates, appraisals are a crucial cog in the machinery of the housing market, but the cog seems to have ground to a halt in recent months.

After suffering huge losses from plummeting property values, lenders are leaning on appraisers to be more cautious. And appraisers’ jobs have grown more difficult amid wild swings in prices and sales volumes.

To some extent, deal-killing appraisals are the natural fallout of a wrenching real estate bust. Prices plunged, and appraised values followed.

Adding to the pain, “distressed” deals — foreclosures and short sales — make up a huge chunk of transactions, and those bargain-basement prices create a point of comparison for appraisers valuing houses whose sellers are not underwater.

“The inappropriate use of foreclosed and distressed sales as comparables is driving down the values of everything,” said Jay Carlson, a home builder in Punta Gorda and president of the Florida Home Builders Association.

Appraisers took a heaping helping of blame for the housing bubble. Some say they’ve responded by becoming too careful.

“All this pressure is being put on the appraisers,” Garrison said. “They’re so scared, they’re so gun-shy, that they’re finding the lowest comps they can.”

New rules stoke outrage

It seems every Realtor has a horror story.

Dave Petruzzelli of Petruzzelli Real Estate in Boca Raton recently helped a friend dispute a lowball appraisal on a 3,000-square-foot house in Boca Raton. The homeowner needed the appraisal to refinance his mortgage.

The first estimate came in at $230,000. After Petruzzelli wrote a five-page letter, the appraiser tried again and came up with a much higher figure: $650,000.

“It was absolutely ridiculous,” he said of the huge swing in value.

It’s not just low appraisals frustrating Realtors, mortgage brokers and builders. They’re also outraged by new rules that have upended the way appraisals were conducted for years.

Beginning May 1, all home loans bought by Fannie Mae and Freddie Mac, the mortgage giants that account for more than half of all loans, must follow the Home Valuation Code of Conduct. The new rules forbid mortgage brokers from ordering appraisals.

Instead, lenders must order appraisals. The appraiser can be an employee of the lender, but more commonly the appraiser is hired by a third party known as an appraisal management company.

The rules discourage appraisers from talking to Realtors and mortgage brokers about their price estimates. The new guidelines, negotiated last year by New York Attorney General Andrew Cuomo, aim to end the cozy relationships among appraisers, Realtors and mortgage brokers that encouraged inflated values.

‘Doing a haphazard job’

The new rules have created a litany of side effects, Realtors and mortgage brokers say. For starters, appraisal management companies sometimes take hefty fees that discourage experienced appraisers from working for them.

“I don’t think the appraiser is intentionally trying to kill the deal,” said Alan Sperling of Mortgage & Investment Consultants in Boca Raton. “But the appraisers are going out and doing a haphazard job because they’re not getting paid very much.”

Wellington appraiser Gina Rascati said she does not work with appraisal management companies because they take as much as half of the appraisal fee. On a typical appraisal that costs the borrower $350 to $400, the appraiser might keep only $175 to $200.

“I don’t know how appraisers are able to do appraisals at that price,” Rascati said. “The only way they can is to do it so fast and cut so many corners. The appraisal management companies want the cheapest appraisal they can get.”

What’s more, appraisal management companies often assign properties to appraisers who don’t know the local market.

Vince Laviano, owner of Better Homes and Gardens Real Estate in Palm City, said the new rules mean appraisers from Broward and Indian River counties come to Martin County to appraise homes.

“It’s pretty bad when you’ve got an appraiser calling a listing broker and saying, ‘Where is that property? How do I get there?’ ” Laviano said. “Anybody can do an appraisal, but you’ve got to know the market to really understand the trends.”

With the Home Valuation Code of Conduct sparking so much discontent, NAR, NAHB and the Appraisal Institute have put a full-court press on Congress, aiming to change or delay the rules.

Cuomo argues that the rules are necessary and that critics are looking for someone to blame for a cratering housing market.

“With home prices falling and foreclosures rising, this complaint is simply wrong and risks returning us to a corrupt system filled with conflicts of interest that promoted artificially inflated values,” Cuomo spokeswoman Emily Browne told The Associated Press.