July 19, 2009

Bits Bucket For July 19, 2009

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




RSS feed | Trackback URI

278 Comments »

Comment by peter a
2009-07-19 06:57:36

I just like the word “probably” in the title. Not have rose no its probably not definately.

Home Resales, Leading Index Probably Rose: U.S. Economy Preview
Share | Email | Print | A A A

By Shobhana Chandra

July 19 (Bloomberg) — Home resales in the U.S. probably rose in June and a gauge of the economic outlook improved, signaling the recession may soon be over, economists said before reports this week.

Purchases of previously owned homes climbed to an annual rate of 4.83 million, the highest level since October, according to the median of 57 estimates in a Bloomberg survey before the National Association of Realtors’ report on July 23. Figures tomorrow may show the index of leading indicators climbed for a third consecutive month.

Mounting evidence that housing is stabilizing is bolstering forecasts that government stimulus efforts will gain traction in coming months and lift the economy from the worst slump in five decades. Other reports may show rising joblessness is weighing on Americans’ moods, tempering optimism about any rebound.

“The end of the recession could be pretty close,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “We’re getting near the bottom in housing. It’ll still be a very gradual recovery for the economy, with a labor market that’s very weak.”

Reports last week corroborated that the housing slump, now in its fourth year, is dissipating. Housing starts unexpectedly jumped in June to the highest level since November as construction of single-family dwellings climbed by the most since 2004. Building permits, indicating future construction, rose the most in a year.

Signs of Stability

The National Association of Home Builders/Wells Fargo index of builder confidence increased this month to the highest level since September.

One reason for the projected increase in home resales is that prospective buyers are taking advantage of the plunge in prices caused by the foreclosure crisis. Filings reached a record in the first half of 2009, according to RealtyTrac Inc., an Irvine, California-based seller of default data. More than 1.5 million properties got a default or auction notice or were seized by banks in the six months through June.

The New York-based Conference Board’s leading index, which points to the direction of the economy over the next three to six months, rose 0.5 percent last month after a 1.2 percent increase in May, according to the survey median.

The jump in building permits was probably one of the biggest contributors to the predicted gain in the leading index, economists said. Fewer jobless claims and higher stock prices were also likely drivers.

Stocks Rise

Stocks have gained on optimism an economic recovery is at hand. The Standard & Poor’s 500 Index is up 39 percent since reaching a 12-year low on March 9.

A July 24 report may show the Reuters/University of Michigan final index of consumer sentiment fell in July after four consecutive gains, economists predicted. A preliminary reading dropped to the lowest level since March.

The U.S. has lost about 6.5 million jobs since the recession began in December 2007. Economists in a separate survey taken by Bloomberg this month predicted the jobless rate will reach 10 percent by year-end from 9.5 percent in June.

Federal Reserve officials thought the economy was “still quite weak and vulnerable to further adverse shocks,” according to minutes of their June meeting released last week. Even so, the report also said “the economic contraction was slowing and that the decline in activity could cease before long.”

Companies seeing an improvement include CSX Corp., the third-largest U.S. railroad. Jacksonville, Florida-based CSX reported second-quarter profit that topped analysts’ forecasts, and said demand for hauling most freight is stabilizing. Railroad traffic is considered an economic bellwether.

“We’re seeing pretty good stabilization in our markets,” Chief Executive Officer Michael Ward said in an interview last week. “We don’t see any further deterioration, and we see some incremental improvement in the near future.”

Comment by arizonadude
2009-07-19 07:14:24

Wow that is real specific.Just like the great economists saying there probably wasn’t a housing bubble.

Comment by yensoy
2009-07-19 07:21:51

Greenspan probably has a brain. Probably the size of a pea. The rest of his head is probably full of soil. Green shoots may probably emerge from his ears if seeds were planted in his head.

Comment by Ben Jones
2009-07-19 07:31:13

I used to think about AG alot, back when he was calling the shots, etc. I have no doubts he is/was very intelligent. Yet it was his blindness (and that of the other central bank chiefs) that was responsible for much of the mania. How will history look at that? Can we attribute this failure to the mania or personal flaws, or both? Personally, I’ll leave that to people looking back at it long from now. But it does call into question our reliance on central banking in general.

(Comments wont nest below this level)
Comment by palmetto
2009-07-19 07:33:26

“But it does call into question our reliance on central banking in general.”

The root of the problem, IMO.

 
Comment by aNYCdj
2009-07-19 07:41:45

Ben

Here is where we disagree a lot. I don’t believe it was blindness but just the opposite you never ever see people like me hired even as an intern near these people.

Imagine if i worked for Hillary, and i told her everyday about your blog….what would she have done?

same for greenie.

Otherwise the really scary notion that he knew exactly what was happening from your blog and chose to let all all ride on letters ARM

———————-
Yet it was his blindness (and that of the other central bank chiefs) that was responsible for much of the mania.

 
Comment by Ben Jones
2009-07-19 07:58:48

NYC,

I don’t think any of these people were reading this blog. A long time ago, we had someone post here that claimed to work in such a position as to know a little about AGs routine. It was said that he came down an elevator, got in a limo, went to this meeting or that, back in the limo, and so on for years. Can one not see a bit of detachment in the cards?

It’s more than that. Remember when Bush the first was campaigning for the second prez race, and he and his wife went to a grocery store? He was so amazed by the scanner the clerk was using that he asked to scan a couple himself. And how Bush 2 announced that the US was going to put people on the surface of Mars, when that is basically impossible, not to mention impractical. And I’m not picking on these guys; Clinton was supposedly having flings with prostitutes on lawns in broad daylight, while he was a governor, and almost everyone around him knew it.

I think when it really sunk in for me was the “reality based community” statement a few years ago. I came to see these people in power as out there in their own little world, flying around on jets, and doing whatever it is they do. So it isn’t as hard for me to imagine these powerful, unaccountable central bankers believing their own propaganda, so to speak. Is that dangerous? Hell yeah. These are the things we should be talking about post-bubble, IMO.

 
Comment by aNYCdj
2009-07-19 08:06:18

This is my point exactly Ben, its in the Hiring process they weed out people with critical thinking skills, or alternative views.

We would all be shocked If alans intern or office manager leaked a bunch of emails and memos from 3-4 years ago detailing the fraud and bubble..and he ignored it.
—————————
I don’t think any of these people were reading this blog.

Is that dangerous? Hell yeah. These are the things we should be talking about post-bubble, IMO.

 
Comment by NYCityBoy
2009-07-19 08:29:56

I see it all the time in this city. The protected, and insulated, over-class has no clue how the rest of us live. They don’t understand the struggles to pay rent, buy food and clothing. They say, “buy, buy, buy” because that is what they know. They are so far removed from reality that they may as well already be living on Mars. They float around at 50,000 feet, not having a clue what is going on down there on the ground.

Thus it has always been, and sadly, thus it will always be. The “leaders” have no clue about those being “led”.

 
Comment by talon
2009-07-19 08:35:09

It’s hard for those of us who schlep to the grocery store, line up at the ATM, and keep track of when it’s time to get the tires rotated to realize that the rich and powerful worry about none of these things. Why should anyone have assumed that Bush I had ever seen a checkout scanner, let alone been in a grocery store? He had people to do that for him his whole life. Same holds true for celebrities—most of them wouldn’t even be able to tell you their zip code because they have a staff to handle their day to day affairs.

A more recent example of this was Barbara Bush’s comment after hurricane Katrina to the effect that the people who were evacuated to the Astrodome were now better off than they were in their lower ninth ward homes. People like her are oblivious to most of society and recognize only two classes—servants and peers.

 
Comment by mikey
2009-07-19 08:43:02

You are onto something with that “own little world” and “nothing could go wrong” banker detachment thing Ben.

It appeared to flow from AG’s Washington to regional and down to local banks. I sort of followed Wisconsin banking insanity and their bad loan problems and if I could see this madness, you’d think anyone could.

Even today, another headline about the largest bank in Wisconsin taking more hits from bad loans both IN and OUT of the state.

It appears that the Masters of the Universe Syndrome was not confined he greedy idiots on Wall Street and DC.

M&I posts lower-than-expected loss
By Paul Gores of the Journal Sentinel

Posted: July 17, 2009

Marshall & Ilsley Corp. said Friday it lost $139.3 million in the second quarter as loans related to construction and development continued to deteriorate.

“It was the third consecutive quarterly loss for Milwaukee’s M&I, which is the largest bank based in Wisconsin.”

…”McEvoy said that although M&I, like many banks, is seeing more commercial real estate and business loans weaken as the recession drags on, those losses won’t be as bad as the housing development losses in Arizona.

In the quarter, M&I paid $25 million in dividends to the U.S. Treasury for its $1.7 billion investment in the bank through the Troubled Asset Relief Program, or TARP.”

http://tinyurl.com/ljt7fu

** Please note that this isn’t the only large bank in WI facing and experiencing Idiot Loan Problems**

 
Comment by DennisN
2009-07-19 08:43:55

Those blind spots are how people will be judged by history. Remember Neville Chamberlain? He was a really bright guy by all accounts. But he had a blind spot about how despots think. He just couldn’t “get it” that Hitler and Musso didn’t think rationally like he did.

By the way that story about Bush 41 and the scanner is not true. What Bush 41 was interested in was a

 
Comment by alpha-sloth
2009-07-19 08:45:59

I think Greenspan’s infatuation with Ayn Rand and her lame philosophy laid the seeds for this whole mess.

Ever slogged through an Ayn Rand novel? If not, here’s the gist- Civilization is carried on the shoulders of a brave, harried few. Most everybody else is a leech or, at best, an impediment to these strong, silent titans who bear the world stoically.

It’s not a long leap from this to the idea that those at the top are somehow a better, wiser, different breed. Heck, that’s basically the point of her whole philosophy.

Hubris crushes another failed idea.

 
Comment by DennisN
2009-07-19 08:49:34

finish my post.

What Bush 41 was interested in was a check signature validation scanner, NOT the generic bar-code scanner. See the story in snopes.com . I’ll bet most of you haven’t seen one of these advanced scanners even today.

 
Comment by NYCityBoy
2009-07-19 08:49:57

He even nailed her. That shows that her standards weren’t too high.

 
Comment by Ben Jones
2009-07-19 08:51:02

‘that story about Bush 41 and the scanner is not true’ ‘a check signature validation scanner’

I saw it with my own eyes on CNN when it happened. Do things get purged, perhaps? Is that surprising? When I was in college, CNN ran a clip for days that showed the democrats lined up in the house cloak room, and it looked like they were snorting something off the conference table. Then, CNN announced it was going to stop for ‘national security reasons.’ I even had a video recording of it until the tape broke.

 
Comment by NYCityBoy
2009-07-19 08:54:22

They are pretty far removed from reality in Worshington.

 
Comment by Ben Jones
2009-07-19 08:56:27

‘those losses won’t be as bad as the housing development losses in Arizona’

I see M&I foreclosure notices all the time here in N AZ. It’s almost always on individual lots, not houses.

 
Comment by Eudemon
2009-07-19 09:02:32

All of you are partially correct as I see it.

It’s not just the uberwealthy that are at a loss as to how most people live.

It’s also the very poor. They likewise have no idea how most people live.

The two play off each other at the expense of those in the middle. Both take what they can from the 80-90 percent of the middle to obtain what they want or need, including their psychological and self-esteem needs.

Neither has any real concept of the value of money, of hard work, of saving. Again, I always remember what happened post Rodney King with hundreds/thousands of poor trashing and burning down their own neighborhoods. What prompts people to do that? Why burn down your own in response to what others do?

Compare that hundreds of rich, young men and women in Chicago who flipped hundreds of cars (not theirs, mind you) in Chicago after the Bulls winning the championship in 1992. What compels the newly wealthy or the offspring of the already wealthy to deliberately trash the property of others with no regard at all?

Again, the concept of money, work and saving is a foreign concept.

What I remain confused by is how the newly poor or newly rich so quickly forget the sweat equity that they (at one time) and most others put into money-work-savings.

Any ideas? What flaws do you see in my thought process?

 
Comment by DennisN
2009-07-19 09:08:50

Ben go read the story on snopes.

http://www.snopes.com/history/american/bushscan.asp

 
Comment by mikey
2009-07-19 09:41:59

Here’s another WI bank in big trouble from out of state loans. I used to go to their Xmas Party dinners and knew Mr Hickey. His Florida loans scared the Hell out of me and I bailed out of his bank after a speech he gave 4-5 years ago. I took my cash too :)

Marine Bank parent seeks investors’ OK for bankruptcy plan
By Rick Romell of the Journal Sentinel

Posted: July 16, 2009

The parent of Marine Bank said Thursday that it will seek investors’ approval for a bankruptcy-court reorganization that would convert $105.3 million of high-interest debt into $60 million of preferred stock.

The plan would shore up Pewaukee-based CIB Marine Bancshares Inc., which has struggled under debt incurred as the bank holding company sought to expand in the early 2000s.

The company’s bank itself is strong and has capital levels that are well above national averages and higher than most local competitors’, said John Hickey Jr., chairman and CEO of CIB Marine. Depositors are protected, up to $250,000 and in some cases without limit, by the Federal Deposit Insurance Corp.

“This is about the holding company, not the bank,” Hickey said of the planned reorganization under Chapter 11 of the U.S. Bankruptcy Code. “It does not affect the bank, its deposits and its depositors.”

CIB Marine owns a single bank that operates as Marine Bank in the Milwaukee area, Arizona and Indiana, and as Central Illinois Bank in central Illinois.

As of March 31, the company had 17 bank branches and the equivalent of 172 full-time employees.

http://tinyurl.com/lx95rb

 
Comment by joeyinCalif
2009-07-19 10:50:33

..a couple things stick in my craw.

While these CEOs and boys at the top might have personally profited by deliberately encouraging the mania, and might have participated in fraud, they did so at the expense of destroying their respective companies.
Whatever “bail-out” the company got was a pittance compared to the losses… just enough to pull the company from the jaws of total destruction.

There was no reason for them to to push things that far, and it makes no sense. They had a cash cow and deliberately killed the cow?
——-
Another thing that bugs me is that they got away with it..

Sure, the heavyweights have the power to make big decisions regarding the general direction a company takes, but there are far, far more people surrounding them and below them (stock owners, employees, lenders, creditors, etc,) that depend on the company’s health and survival.

Together, those little people see everything.. They see the results of those decisions, can detect trends, and can read the writing on the wall.. And yet (almost) nobody issued warnings or complained?

Based on that, I tend to lean toward an infectious “mania” as the core reason for the mess, not a deliberate scheme or conspiracy.

 
Comment by Professor Bear
2009-07-19 11:33:31

“Clinton was supposedly having flings with prostitutes on lawns in broad daylight, while he was a governor, and almost everyone around him knew it.”

Slick Willie

 
Comment by ecofeco
2009-07-19 12:25:18

DennisN, while the Snopes article shows how the story got mangled, (and good find BTW) it doesn’t really dispel the “out of touch” factor, does it?

 
Comment by alpha-sloth
2009-07-19 12:26:34

“….I tend to lean toward an infectious ‘mania’ as the core reason for the mess….”

Agreed. There was undeniably a “mania”. But this was aided and abetted by a hubris-filled elite who thought it was perfectly normal for them to be making obscene profits while this mania raged, because, well, it only made sense that someone as specially gifted as them should become fabulously wealthy.

And yet this elite was the group that could most easily have nipped this mania in the bud, as, of course, would have been the duty of a true elite.

 
Comment by joeyinCalif
2009-07-19 12:49:23

alpha… the whole world has always been a rough and tumble place.
The idea that people, regardless of social status, are always trying to gain some advantage, or take advantage, doesn’t surprise me in the least. It’s business as usual.

Aside from the occasional Mother Theresa, we don’t really care about the mental stability of our benefactors.. and come crunch time it’s every man for himself.

..but that still doesn’t address my concern: Why would these enterprises (banks especially, although the govt could be included) destroy their own livelihoods?

Were they so blinded by “obscene” short term profits that they didn’t see the edge of the cliff? If so, how is this motivation any different from that of your average underwater FB?

 
Comment by alpha-sloth
2009-07-19 14:11:52

….”Why would these enterprises….destroy their own livlihoods?”

Wasn’t that exactly the flaw in the formula that Greenspan himself pontificated on recently? That he never thought the elite would destroy the very enterprises that made them the elite.

Simple answer (obvious to us non-elite) - When the up front take is enough, who cares what happens in the long run? Plus, if you play by the rules, it’ll take five lifetimes to make what you can steal in a couple years time.

 
Comment by joeyinCalif
2009-07-19 14:55:36

I wish I could say this from experience, but it’s only my impression that when your personal interest in a company is worth 3, 4 or maybe $500 million dollars, and you can cash out any amount of that whenever you want to, you’re not in it for the money. Nor are you likely to expose yourself to the risks of “stealing” more…

 
Comment by BanteringBear
2009-07-19 15:00:00

This whole country is out of control. The politicians would be more than happy to fuel another stock market and housing bubble, and party on like the days of yesteryear never mind the repercussions. None of the tough decisions which needed to be made, were. Has ONE person responsible for this crisis even been indicted? Where is the FBI? The IRS? The SEC? There has been no atonement. Until those responsible get spanked, there can be no healing. It’s gotten to the point where I can hardly stand to even think about it anymore. I am absolutely sickened by what’s happening. The rampant fraud, corruption, and overall lack of ethics is disgusting.

 
Comment by exeter
2009-07-19 15:04:16

The dummy Bush story is real. It got international airtime. Everyone saw it.

And B.Dogg has never been more correct in that the issue is truly a detachment from reality.

Do you guys recall the Queen of Mean the billionaress Leona Helmsley? Remember her fully substantiated, courtroom documented statement “taxes are for little people”? Combine that wealthy corporate elite arrogance with Ben’s detachment observations and viola….. you get crony capitalism. More wealth than you can imagine for the top 10% and serfdom for the rest of us.

 
Comment by alpha-sloth
2009-07-19 16:12:48

joey…..Their interest in the company was only worth those astronomical amounts because they jimmy-jacked the co up on cheap $ and voodoo financial games. They knew it and cashed out when the insiders do- right on time.

 
Comment by Silverback1011
2009-07-19 16:28:16

So sorry about whatever canard Snopes.com has come up with, but my first husband & I were watching in 1988 and saw the whole George H.W. Bush/scanner thing live. It was set up for him at a televised “town meeting”, and he played into in perfectly. They had a fakey cash register checkout line with milk and bread and other items present, I guess to show him how much their prices went up. He went over to it, and the “cashier” scanned the items through. He was astonished, and asked ( him or her ) to do it again. He couldn’t believe that such magical technology existed. I said heavily to my first husband at the time, ” It’s been a long time since that rich bastard had to buy his own milk.” We didn’t vote for him.

 
Comment by alpha-sloth
2009-07-19 16:48:35

Two threads in a thread. The double-helix DNA of a good, schizophrenic blog.

 
Comment by oxide
2009-07-19 16:56:55

….”Why would these enterprises….destroy their own livlihoods?”

It’s the Tragedy of the Commons.

All the landless farmers grazed their cattle on the common field in town, the Commons. The commons can only support a finite number of cattle sustainably. Of course the best thing would be for ALL the farmers to agree to limit their herds so that the Commons can grow its grass. However, an individual farmer will be richer if he increases his flock. So, there is no agreement, and all the famers breed big herds. Of course there are too many cattle for the Commons, and the whole field is eaten down to nothing, and all the farmers go out of business.

It’s a metaphor for a LOT of what goes on.

 
Comment by joeyinCalif
2009-07-19 18:21:26

alpha-sloth.. Tell it to Buffet..

..me thinks you may be projecting a mite..

 
Comment by alpha-sloth
2009-07-19 20:00:43

I’m sure Buffet knows. (I never project just a mite)

 
Comment by joeyinCalif
2009-07-19 21:04:37

Buffet hasn’t blamed the bubble or it’s crash on corruption, afaik. He did sell at least one home at a huge profit. Dumped everything in ‘05 and ‘06 I believe, right at the peak..
He’s fabulously wealthy and a CEO. Is he on your chopping block?

From a 2005 HBB link to a CNN article:
…”People go crazy in economics periodically, in all kinds of ways. Residential housing has different behavioral characteristics, simply because people live there. But when you get prices increasing faster than the underlying costs, sometimes there can be pretty serious consequences.”

CNN… 2007:
He said too many homes were bought by people carrying mortgages with little or no money down who then hoped to flip them quickly for a profit. “The housing market is sick and it’s going to stay sick for a couple of years” he opined.

 
 
Comment by John Galt
2009-07-20 13:57:49

Ben, that informant would be ME. I’ve not commented on your Blog since that time several years ago …

But the full story is more than you remember.

I was, until recently, a Computer Programmer/Analyst (I told my boss The Truth several months ago – in my defense he backed me into a corner so there was no way out). During the course of my career I worked with another Contractor who had a contract with the Federal Reserve Board of Atlanta.

The stories she told me confirmed my worst fears about who actually runs ‘Muricah.

She told of Greenspan leaving another Federal Reserve tower in another city by executive elevator, going to an executive basement, getting in a huge limo with chauffeur and tinted windows, going up a ramp past ‘blast’ doors that would open up for him, going to an executive hangar at the local airport, getting on an executive jet, flying to the Atlanta airport and reversing the process.

She described a completely isolated Fed with Granite everywhere. Executive eateries where the waiters were old school ‘Blacks’ in their red livery with white towels over their arm. The food would be served on real porcelain on mahogany tables with candelabra, the cutlery would be sterling silver. The real bosses inside this world would be older Ivy Leaguers called ‘Duff’ or the equivalent in their tweeds who would never seem to do any work but were definitely in charge.

Even, I would suspect, in charge of Greenspan.

They were soft spoken and gentlemen all according to her.

She felt there, she told me, like a peasant – though they treated her well.

Now as to Greenspan himself – he mystified me for years – but I think I’ve finally figured him out.

Recall that he sat at the feet of The Mistress – Ayn Rand. And though many, including myself despite my pseudonym, think ill of her overall and of her inheritors (Peikoff et al) nevertheless she was one of the premier intellectuals of the Twentieth Century. I can recall only one incident where she was bested in conversation – and that was by Ludwig Von Mises.

So here we have ‘The Undertaker’ as she named Greenspan, who hovered at the periphery of ‘The Collective’ (as they then named their cultus). Greenspan even wrote essays that appeared in some of her books. I recall one brilliant one on the Gold Standard.

When he was appointed head of the Fed I wondered, knowing of his background.

Well, there are only so many possibilities – I will list them.

He is stupid. This is absurd on its face.

He is a turncoat. How could this be – he indicated that he understood the issues – economic and metaphysical both then and hints now (to friendly interviewers) that he still understands them. No, I don’t believe any amount of money and power could have turned his coat to this extent.

He was a stooge. Here I think we find the answer. Rand came to the attention of the Rich and Powerful. I call them the Big Boys (trivia question – what comment made in a preface page to one of Malachi Martins books is the origin of my appellation?). Here on the blog there are many Names: ‘Da Boyz’, ‘The Banksters’, ‘The Pigmen’ and etc. But these I regard as the Minions of the Big Boys – not the Big Boys themselves.

But I digress. One is a young highly intelligent, highly ambitious man whose goal is to make it on Wall Street. One gets approached with an offer to investigate a new group with the promise of eventual reward. The young man knows positively that the reward will be forthcoming because he has seen these men reward others.

He accepts. He drifts into the movement. He can even mimic their arguments. Then he drifts out – never having been a ‘true believer’.

There is one other consideration that is rather politically incorrect. Alan may suffer, as many of his ilk (the highly intelligent and ambitious ‘ethnic’) do - what I call ‘Anglo Envy’.

One sees it rather explicitly in some of the films of Woody Allen. Think of Greenspans marriage – no ‘JAP” there. Think Henry Kissinger. Certain people (not us on the Blog) are in awe of the power and majesty of the Ivy League, Skull and Bones, Porcine Society, Wall Street crowd. They are ‘Old Money’ who have had their money so long that they are essentially above the Money Economy.

He was, I believe, recruited for a mission, he served well, then he was rewarded by his masters.

Does this sound conspiratorial? It may – but let me say that I am NOT a ‘Conspiracy Theorist’. I do not believe in conspiracies as the origin of History.

I believe in ‘Power Theory’ (Pareto et al). Powerful groups that are self conscious (of themselves – they may not be visible to the Masses) and wish to stay in power do so by generating what appears to the naïve to be ‘a Conspiracy’.

Well Duh!

Yes Ben we ought well be asking ourselves questions about all of this …

(Comments wont nest below this level)
Comment by aNYCdj
2009-07-21 19:14:54

Maybe you should comment more…….interesting stories

And yes isolation at the top levels seems to be the norm.

I really don’t think anyone would wan to kill greenie, but we would like to know WTF were you thinking?

Maybe he does have a 200+ IQ and just cant explain it to us mere high IQ folks!

 
 
 
 
Comment by edgewaterjohn
2009-07-19 07:30:41

“Fewer jobless claims and higher stock prices were also likely drivers.”

Okay, the stock prices have rebounded from the lows for four months now, and jobless claims started a decline much more recently. This argument really seems contrived - the cut and paste (cherry picking) of rationales and statistics is glaringly obvious.

Comment by NYCityBoy
2009-07-19 08:31:09

the cut and paste (cherry picking) of rationales and statistics is glaringly obvious.

That is what they are paid to do. Honesty is not their profession. Lying is.

 
 
Comment by pressboardbox
2009-07-19 07:58:05

How can an accurate index be sponsored by NHB and Wells Fargo. Its like having a Child-Molesters and Convicted Sex-Offenders babysitting and daycare rating. Who buys into this nonsense?

Comment by NYCityBoy
2009-07-19 08:32:47

Who buys into this nonsense?

The vast majority of the morons that surround us. You are in the minority. Don’t forget it. Why the hell do you think this is being discussed on a blog and not on Fox News or CNBC?

Comment by In Colorado
2009-07-19 09:15:28

Some are getting it. Went out to dinner on a Friday night. At 6:00 PM the restaurant was only 1/3 full.

(Comments wont nest below this level)
Comment by Eric in JC
2009-07-19 11:43:06

At 6pm aren’t most people still at work?

 
 
 
Comment by joeyinCalif
2009-07-19 08:47:44

People have less of a problem with sources when the results are more to their liking..

 
Comment by Professor Bear
2009-07-19 16:21:39

“The National Association of Home Builders/Wells Fargo index of builder confidence increased this month to the highest level since September.”

Frankly, I have no reason to doubt this index is credible, as I have paid attention to it for a long time, and it seems to mirror the bubble collapse quite accurately. What the media sound bite did not mention here is that at its current level of 17, which albeit is higher than the level of recent months, the NAHB sentiment index (HMI) remains deep in the basement. The lowest level it ever touched before the current episode was 20, in January 1991, after which it quickly rebounded to a level of 44 by January 1992.

It is different this time. The HMI reached a level of 20 in September 2007, and has remained at or below that level ever since (so far through June 2009, 21 months later). Here are the recent (record-low) levels, through last month:

09.07 20
10.07 19
11.07 19
12.07 18
01.08 19
02.08 20
03.08 20
04.08 20
05.08 19
06.08 18
07.08 16
08.08 16
09.08 17
10.08 14
11.08 9
12.08 9
01.09 8*
02.09 9
03.09 9
04.09 14
05.09 16
06.09 15
07.09 17

*All-time record low

A level of 50 (33 points higher than current) is considered to indicate “neutral” sentiment — where the building industry participants’ outlooks are evenly balanced between optimism and pessimism.

Comment by Professor Bear
2009-07-19 16:28:19

Also noteworthy: The HMI was at a level of 72 in June 2005, just before the onset of a more-or-less steady descent to its September 2007 level of 20. I suppose one could date the bubble peak for the homebuilding industry to June 2005, on the basis of the HMI.

(Comments wont nest below this level)
Comment by Professor Bear
2009-07-19 16:33:46

You can get the HMI data here. Note the data goes back to 1985, though the chart only displays data since 1995. If you know enough about MS Excel to change the start dates of your data, you can get a much more interesting graph by starting it in 1985. (Too bad they were not producing this index during the 1975-1985 period!)

 
 
 
 
Comment by az_lender
2009-07-19 09:37:45

“Housing starts jumped unexpectedly in June”
“Building permits…rose the most in a year”

Oh yeah, that is BOUND to boost the price of housing!

…er…

 
Comment by Professor Bear
2009-07-19 10:23:13

‘Mounting evidence that housing is stabilizing is bolstering forecasts that government stimulus efforts will gain traction in coming months and lift the economy from the worst slump in five decades. Other reports may show rising joblessness is weighing on Americans’ moods, tempering optimism about any rebound.’

The pickup in home sales would provide much more convincing evidence that a recovery is in progress were it not for extraordinary respiking operations underway, such as the $8K ‘new-homebuyer’ tax credit, the Fed’s interest rate buy downs, and government guarantees of FHA and GSE loans. It is entirely possible that the recent spike in home sales is unsustainable, as the the wave of fence-sitters who have recently been lured into buying will soon give way to an unemployment-led trough in demand. My guess is that the housing market has at least one more leg down, at least in terms of quality-adjusted prices, before anything remotely resembling market equilibrium is restored.

Comment by ATE-UP
2009-07-19 11:33:20

Prof B: I replied to you yesterday, re SIU did u see it?

Comment by Professor Bear
2009-07-19 16:01:36

“Talk later old Alumni.”

Hope we cross paths at some future alumni function…

(Comments wont nest below this level)
 
 
Comment by BanteringBear
2009-07-19 14:45:27

“It is entirely possible that the recent spike in home sales is unsustainable, as the the wave of fence-sitters who have recently been lured into buying will soon give way to an unemployment-led trough in demand. My guess is that the housing market has at least one more leg down, at least in terms of quality-adjusted prices, before anything remotely resembling market equilibrium is restored.”

A lot of the buyers are speculators. I don’t think that’s healthy at all.

Comment by Pondering the Mess
2009-07-20 09:22:38

If the goal is to prevent affordable housing for normal people AND to respike the bubble, then it is “healthy” - at least for the banks!

(Comments wont nest below this level)
 
 
 
Comment by ecofeco
2009-07-19 12:29:39

It took me years to know “feel good” news when I read it. This article is a good example.

Here’s the short take: “We have the fire under control, but the winds could change.”

 
 
Comment by edgewaterjohn
2009-07-19 07:01:00

Most amusing are all these “ideas” intended to minimize, or even avoid altogether, the pain associated with these bursting bubbles.

The idea that today’s pain can be avoided, deferred, or otherwise mitigated seems wholly born out of the American postwar epoch. In other words, large chunks of this society and its PTB are totally high on their own supply of idealized/sanitized history. To think pain is somehow avoidable seems the ultimate state of human hubris - not unlike the rationalizations behind the concept of a winnable nuclear war.

Of course the empty promise of pain avoided is a tremendous opportunity to seize more power. Power may be seized, but pain will not be avoided.

Comment by palmetto
2009-07-19 07:31:44

Excellent commentary, edge. And of course, in trying to avoid the pain, the agony is being drawn out.

I’m really kind of in shock about the expensive programs, like cap and trade and this Frankenstein’s monster health care plan, among other things, that this administration is trying so mightily to advance. I mean, geez, I’m all for energy independence and sane health care policy, but this crap is completely insane and out of control. People are hurting? Well, let’s just TAX the helloutathem.

Y’know, Bammy could get away with a lot if he just focused on the broken financial system, hunting down and punishing the miscreants, going after the criminals in the former administration, etc. But, oh, NO! He wants to “move on”. BS. Why let a few small details like the carnage of the previous eight years get in the way of his agenda? Yeah, let’s not fix any of that. Heaven forbid the justice department should even go there.

Comment by edgewaterjohn
2009-07-19 08:13:15

Right on, Palmy! No one is busting their hump to sort out what went on during these wars, are they? All that “move on” b.s. just lets them off the hook.

Always a new imperative, always a new crisis. Yesterday it was go buy duct tape, today it’s go buy a house. But the common thread is to keep shopping - lest the illusion be shattered.

 
Comment by NYCityBoy
2009-07-19 08:34:48

Y’know, Bammy could get away with a lot if he just focused on the broken financial system, hunting down and punishing the miscreants,

Many of those miscreants funded his campaign. That is why we are moving on dot org.

 
 
Comment by ecofeco
2009-07-19 12:35:03

“Avoid the pain?”

Oh no. We’ll get plenty of pain. The PTB won’t. No matter what happens.

Get it now?

 
 
Comment by EL Pato
2009-07-19 07:04:18

From San Diego:

Our police are now citing people for riding their bicycles on Garnet Ave in Pacific Beach. Apparently back in the 80s they made this illegal when they created the Garnet business district., but they only started enforcing the rule this year.

The fine is $88 when you get the ticket in the mail. The “bail” according to the muni code is $5. So the penalties and fees are 15x the cost of the ticket.

California has gone off the cliff. I cannot stand it here any more. It is a police state bent on extorting money from you at every turn.

Comment by arizonadude
2009-07-19 07:16:26

Yes I notice the cops are all over the highways giving tickets.They really like the no seat belt and cell phone tickets.The unions control the state now.Dont even try to fire a state worker who doesn’t produce.

Comment by EL Pato
2009-07-19 07:32:18

>>The unions control the state now.

Testify! It is really clear this is just a self-feeding relationship between unions and politicians. The unions make big campaign contributions. The politicians create more union jobs. And so it spirals.

Until San Diego goes broke, which is exactly where things are headed.

Here is another example of trying to kick the pension time bomb down the road for a few more years.

Not gonna work. I do wonder what happens when the cops/fireman etc realize they will not get their pensions?

Comment by EL Pato
 
Comment by palmetto
2009-07-19 07:52:27

“I do wonder what happens when the cops/fireman etc realize they will not get their pensions?”

That will be really ugly. They can and WILL turn on the people. Hell hath no fury like a law enforcement officer denied. I’ve been there. Little case of mistaken identity one time, when the cops came looking for the former occupant of an apartment that I rented back in 2005. Almost morphed into yours truly being hauled off to jail.

(Comments wont nest below this level)
Comment by aNYCdj
2009-07-19 08:11:36

Come on Peeps:

They will ALL get their pensions….no kidding….

But they may only get 70% cash and 30% IOU’s………lol

—————————————————–
“I do wonder what happens when the cops/fireman etc realize they will not get their pensions?”

 
 
 
Comment by EL Pato
2009-07-19 07:42:55

>>The unions control the state now.

Testify! It is really clear this is just a self-feeding relationship between unions and politicians. The unions make big campaign contributions. The politicians create more union jobs. And so it spirals.

Until San Diego goes broke, which is exactly where things are headed.

Here is another example of trying to kick the pension time bomb down the road for a few more years.

Not gonna work. I do wonder what happens when the cops/fireman etc realize they will not get their pensions?

Comment by CarrieAnn
2009-07-19 09:40:24

“I do wonder what happens when the cops/fireman etc realize they will not get their pensions?”

Well locally we’ve got 2 fire districts that at are odds w/each other and have refused to support each other in multi alarm situations. Sometimes the “other” district is actually the closer station to a particular emergency situation but they don’t report. People’s homes have burned down. Nice. Talk about innocent victims.

(Comments wont nest below this level)
Comment by ecofeco
2009-07-19 12:41:20

Sounds like a Libertarian utopia. :roll:

Little know trivia: in the 1800s fire companies were exactly that, companies. They would often compete with each other to put out a fire. This competition often resulted in outright brawls between competing fire crews at the scene of the fire… at the expense of the loss of the property. The winning “bidder” then would extract payment from the owner by looting the remains.

*sigh* Some things never change and some people never learn from history.

 
Comment by Prime_Is_Contained
2009-07-19 13:40:30

“They would often compete with each other to put out a fire.”

My impression is that they were not always competing to put _out_ the fire; they were more like a protection racket. If you did not have a pre-existing agreement in place with them (e.g. you were not paying them protection), they would show up at the scene and actively _prevent_ another fire company from putting out your fire.

I’m not an expert on this bit of history; this is just what I picked up somewhere.

 
Comment by ecofeco
2009-07-19 18:58:38

That was true as well. Each company had their own “procedure.”

Much like today’s insurance industry, while there’s plenty of regulation, there is no reliable standard.

 
 
Comment by skroodle
2009-07-19 11:29:06

I remember the Rodney King riots when the police were actually on duty.

Can you imagine the police and welfare recipients all getting IOUs? Housing prices will rally take a dive.

(Comments wont nest below this level)
Comment by ecofeco
2009-07-19 12:45:18

Many law enforcement employees would will happily let the poor kill themselves.

Having lived in VERY poor neighborhoods, it’s no mystery why.

 
 
 
 
Comment by edgewaterjohn
2009-07-19 07:39:30

It’s not just CA, the coppers here are everywhere this summer putting Denver Boots on cars galore, staking out stop signs, and even checking city stickers. It’s the talk of the town and it seems no one can remember it ever being like this before. So much is this the case the a recent op-ed mused that our Mayor Daley had declared war on motorists.

Comment by peter a
2009-07-19 08:29:24

Carry a dewalt 18volt sawsall with you and cut the boots off in about 30 sec.

Comment by ET-Chicago
2009-07-19 09:13:50

Then you get to pay for the boot, too. And that ain’t cheap.

(Comments wont nest below this level)
 
 
Comment by ET-Chicago
2009-07-19 09:22:56

It’s not just CA, the coppers here are everywhere this summer putting Denver Boots on cars galore, staking out stop signs, and even checking city stickers.

Indeed, it’s madness out there. Now all the parking meters are seven days a week, too.

And they have thrown up more of those auto-camera thingies to capture people going through red lights, turning on red during a non-proscribed time, and so on. We got one of these turning right after a full stop and sent in an appeal. Some administrative lackey denied then claim (naturally) — and if you want to take it a step further, you have to appear in administrative court and eat the court costs. So, yeah, you can possibly overturn one of these auto-generated tickets if you don’t mind taking a half-day off, going downtown, battling The Man, and paying for the privilege.

Comment by Eudemon
2009-07-19 09:44:15

Here’s an idea -

Tell them you want a jury trial. That’ll stop ‘em!

(Comments wont nest below this level)
Comment by drumminj
2009-07-19 10:33:48

Tell them you want a jury trial. That’ll stop ‘em!

IIUC it’s a civil fine, and thus no trial by jury. Same with parking tickets and the like.

 
Comment by ATE-UP
2009-07-19 11:32:20

Eud: Your previous re rich/poor is the best post I have ever read. I do not understand the economics stuff very good, and know how smart these people are. But, for me what you wrote, was outstanding.

Thank You!

 
 
Comment by SaladSD
2009-07-19 12:26:14

Yup, paid $409 smackers, plus another $45 for online traffic school and $20 processing fee for one of these camera tickets, making a right turn on red. I admit, it was a rolling stop, but I doubt a police officer would have giving me more than a warning in another era. I’ve been rear ended for making a complete stop on a red light while turning right; you just can’t win.

(Comments wont nest below this level)
 
Comment by llcarlos
2009-07-19 13:32:31

I read on autoblog that you have to be stopped for a full 3 seconds or you get a ticket from the camera.

(Comments wont nest below this level)
Comment by Olympiagal
2009-07-19 15:08:30

I don’t think I’ve ever stopped anywhere for three whole seconds. That just sounds tedious.
However, because here in WA we got the cops out seeking for revenue lately, I HAVE recently begun stopping for 2 whole seconds.
And it’s tedious. :)

 
 
 
 
Comment by Joe Lawyer
2009-07-19 07:41:31

Unless you are an illegal alien. The cops won’t even bother to ticket them anymore. Whites and blacks disproportionately bear the burden of these *taxes*.

Comment by palmetto
2009-07-19 07:46:30

Testify, brothah! CA and the US in general now has a burgeoning Third World population to support and the money has to come from somewhere.

 
Comment by ATE-UP
2009-07-19 07:56:23

Cops are everywhere in Illinois. I mean everwhere. All you see are red and blue lights flashing, all the time.

Comment by edgewaterjohn
2009-07-19 08:15:07

That’s because there’s a low level war going on here. 13 dead over the July 4th weekend alone. If it ever gets hot this summer - look out!

(Comments wont nest below this level)
 
 
 
Comment by alpha-sloth
2009-07-19 07:57:23

Sounds like the Cali cops need to come to the South to learn the finer points of ticketing your way to prosperity.

You don’t ticket the locals, that just pisses them off and digs your locale’s economic hole deeper.

You ticket the out-of-staters (or out-of-county). THAT’S how you get a net inflow of money, and the locals are less likely to begrudge your fat pensions.

Comment by EL Pato
2009-07-19 08:23:31

>> You don’t ticket the locals, that just pisses them off and digs your locale’s economic hole deeper.

Oh they know….I got this ticket on Mother’s day in a “touristy” area. No doubt they figured the locals were off their Mom’s. The cops were blanketing Pacific Beach with tickets that day.

As he was writing the ticket, he asked “how long have you lived here”, “where were you coming from”. He wrote the answers on the tear off tab on the bottom of the ticket, which he kept.

So I think San Diego is up to date on the latest extortion techniques.

Comment by joeyinCalif
2009-07-19 09:16:04

some old woman tourist got killed as a passenger in a pedicab down there a few days ago.. no pedicabs, no bikes allowed.
People blame the cops for not doing their job.. and for doing their job.

(Comments wont nest below this level)
 
Comment by alpha-sloth
2009-07-19 09:55:59

Well, good. I’m glad to hear they’re doing it right.

(Comments wont nest below this level)
 
 
 
Comment by Bill in Los Angeles
2009-07-19 09:47:26

El Pato, California is not the only state making heavy handed laws. I know Arizona has been transforming itself into a police state too.

This morning on Hawthorne Blvd in Torrance I passed three bicyclists who rode in the street. Not the far right lane. But they were making a turn onto another street. It was very dangerous, but I was the only car behind them and only had to slow slightly. They knew what they were doing. However I can see that the cops would probably harrass them if they were in Pac Beach.

I said here before that state laws are becoming more draconian, making more actions misdemeanors and making more misdemeanors felonies.

When I am back home in Phoenix I drive 25 miles to a storage unit I rent. During the round trip I see more than ten violations of traffic laws, for instance. At the rate we are going, we’ll see people thrown into the slammer for every little nitpicking thing.

Get ready for the brave new world.

At least Arizonan private citizens tend to be libertarian. Maybe there will be a revolution against the police state in many states in a few years. The Declaration of Independence first paragraph noted that periodic revolutions are necessary to keep the government small.

Comment by maldonash
2009-07-19 10:43:40

The police are out of control in Los Angeles … I always wonder what it is about CA that the police have such attitudes. We all know the police mostly just shuffle paperwork and NOT “protect and serve” as they falsely claim. I also live in NYC and the police here are completely different - they seem to try to keep order and not harass. Although I saw a group of kids harassing each other - one group was three young white NYPD busting a few young African americans for playing music on the street - it was not loud. The AA’s made a argument that all of the businesses had their music blasting all over the street - they why can’t we play ours quietly?

 
 
Comment by ecofeco
2009-07-19 12:50:43

Just “gentle” reminders to the newly desperate not to step out of line.

Works for me, because crime has and will continue to increase.

 
Comment by Mike in Carlsbad
2009-07-19 22:04:45

My friend who is 30 and lived his entire life in Pacific Beach got a ticket for skateboarding on the sidewalk the other day. He told the cop he has been doing the same for decades, cop said he should have known better living there so long.

Guess since they banned booze on the beach there all the money they were raking in on alcohol CRV’s has to be made up some where.

 
 
Comment by FB wants a do over
2009-07-19 07:15:42

Have San Diego home prices reached the bottom?
July 18, 11:23 AM

For the first time in two years Southern California saw an increase in home prices. MDA DataQuick reported that home prices increased by $5000 from April to May in San Diego. But does this mean we’ve hit rock bottom? The market is shifting in that we are seeing a lot more buyer activity out there. From my conversations with perspective buyers many are trying to take advantage of the $8000 federal tax credit which has a deadline at the end of November. Also, many buyers do believe we have hit the bottom and its time to make a move, or at least prices are “low enough” to start making offers. In their eyes, affordability is up and rates are still low; it is time to pull the trigger.

But, I believe, the reason we’ve seen prices go up is because we have seen a decrease in inventory. This is not because the banks are running out of foreclosures but because they have not been releasing homes to the market. The California Association of Realtors is claiming a mere 2.5 month supply throughout the state. But that number only includes homes under $300,000.00 and that price range is where the buyers are.

In May, 83% of sales were under $500,000.00, the low end price range most new buyers and investors can afford. This, combined with a shortage of inventory, is resulting in multiple offers and driving up prices. One realtor I spoke with said she had 29 offers on a property, listed at $209,000.00 including one for $60,000 over asking! She couldn’t even accept that offer because the value was not there; it would not have appraised. Areas like Escondido are seeing less inventory and more competition when it comes to buyers in that lower price range. I have seen several of my clients outbid by investors offering all cash.

With June’s unemployment rate at 9.5% and 1 in 5 homeowners underwater in value, the foreclosures are bound to continue at a strong pace. According to MDA DataQuick, statewide, California has seen an increase again of mortgage defaults. Despite all the homeowners that were able to get their loans modified to stay in there home, there are significantly more homeowners that did not qualify for a “loan mod”. Once banks begin releasing new inventory into the market, (they have a stockpile…) I think we will see prices flatten out or even drop again.

Comment by arizonadude
2009-07-19 07:17:41

One of these days the bottom callers will get it right.Haven’t we heard this for 3 or 4 years now?

Comment by bink
2009-07-19 07:51:28

It’s like an endless Sir-Mix-a-Lot video.

Now I’m hungry for peaches.

Comment by ATE-UP
2009-07-19 07:57:31

I dated a girl named Peaches. Wait a minute..my stomach’s growling.

(Comments wont nest below this level)
Comment by hip in zilker
2009-07-19 08:35:38

Did you know that while there was only one Herb, there were six Peacheses?

 
Comment by Eudemon
2009-07-19 09:21:15

And once he bruised each of the Peaches, they fell off the (money) tree.

Herb is a felon. He and Spector should share a cell.

 
Comment by hip in zilker
2009-07-19 09:53:50

I didn’t know that Herb was abusive - didn’t know much about them. I spoke to the - I think - second Peaches on the phone once.

Spector, Ike Turner, MJ’s father, Herb …. horrible.

 
Comment by hip in zilker
2009-07-19 09:56:10

Oh, and I apologize for my pedantry, but I think that grammatically, it should be “each Peaches” or “each of the Peacheses.”

 
Comment by alpha-sloth
2009-07-19 09:57:53

I thought herb was a misdemeanor.

 
 
 
 
Comment by Michael Fink
2009-07-19 08:19:21

“sales were under $500,000.00, the low end price range most new buyers and investors can afford.”

Let’s qualify this statement “most new buyers can afford”. Now, I realize that it does say UNDER 500K, but that also includes homes that are 499-200K, a range that MOST new buyer certainly cannot afford.

All homes 300K+ require household incomes of 100K+, a range that only 15% of the entire United States falls into. So, put another way, of the new buyers out there (which I would assume is traditionally skewed towards lower income), only 15% should even consider homes 300K+. And 500K? Only about 5% of the population (household) makes 150K+, the minimum required income for a home approaching 500K.

Homes under 200K are what “most new buyers” can afford, not homes under 500K. They still just don’t seem to be able to do the math, I don’t get it. A 500K home is something only 5% of the entire population (many/nearly all of which already own homes) should even think about. It’s absolutely not in the “most new buyers” category.

Until we wake up from this pipe dream that <500K is a starter home, we are doomed to continue this cycle. A home <150K is a starter home (maybe <200K in CA, since it is a higher income state).

Comment by Socaljettech
2009-07-19 10:07:17

“A home <150K is a starter home (maybe <200K in CA, since it is a higher income state).”

I would dispute the oft repeated statement the CA is a higher income state. If you figure the higher state taxes, gas costs,insurance and the general cost of living here, it is a much lower income than most states. Our politicians like to pretend that everyone is making 100k+,and spend accordingly, but in fact that is not the case. You might crack 100k if you have two people employed, but you keep a much lower percentage of it here in the “Golden (shower) State”. The reality is that with the housing inventory here and the real wages being paid here, <100k is a more realistic price for a starter home, especially in light of the disrepair of most houses out here- you can put maintenance off for years or get away with really shoddy work due to our moderate weather, and most people will put it off as long as possible because they really couldn’t afford the house to start with!

Comment by NYCityBoy
2009-07-19 10:11:27

I make more than I would if we moved back down south. At the end of the day it is a wash. Here in New York City everything is more expensive. Even my wife charges me more than she did when we lived down south. Times are tough all over.

(Comments wont nest below this level)
Comment by drumminj
2009-07-19 10:36:33

Even my wife charges me more than she did when we lived down south.

Glad you’re back and posting regularly, NYCityBoy. Your sense of humor was missed.

 
Comment by maldonash
2009-07-19 10:46:00

What would NYC be like w/o the annoying tourists????

 
 
Comment by InMontana
2009-07-19 10:34:05

Exactly. People need to re-discover sticker shock.

(Comments wont nest below this level)
Comment by B. Durbin
2009-07-19 15:46:12

There are sites all over the internet that will calculate cost-of-living for you, making it easy to see if a job in new locale will pencil out. Before we moved to California, we used these to see what minimum salary increase would be required to make such a move desireable. We only moved after it became evident that the better salary would more than account for the cost-of-living increase.

It would not have even come close had the job been in SoCal or the Bay Area. We just went to a concert in the South Bay and the house & land flyer I picked up still had 2/1 sub-1000 square ft houses listed at over $500K… and many houses listed at over one mil that were, in real terms, nothing special.

It was, quite literally, laughable. Crazy stuff.

 
 
 
Comment by Pondering the Mess
2009-07-20 09:30:53

Now, now - if one lived in Maryland (Bedlam on the Bay), you’d understand that EVERYONE makes more money than average and there is no Housing Bubble here (even though you need to make about twice median HOUSEHOLD income to afford anything remotely decent or near jobs in this state.) Insanity!

 
 
Comment by Professor Bear
2009-07-19 17:04:50

“With June’s unemployment rate at 9.5% and 1 in 5 homeowners underwater in value, the foreclosures are bound to continue at a strong pace.”

I guess the Examiner folks missed the recent news that San Diego’s unemployment rate is now at double-digit levels?

Even with all the exceptional government interventions underway to try to prop up housing prices, I doubt this will be enough to offset the impact of the recession on (quality-adjusted) housing prices for the foreseeable future. And I question the sustainability of new hiring in construction and real estate, though I realize construction hiring may be due to stimulus-related government contract work.

Jobless rates reach recent highs for region, state
By Dean Calbreath
Union-Tribune Staff Writer

12:14 p.m. July 17, 2009

For the first time since the 1980s, San Diego County’s unemployment rate crossed the 10 percent mark last month, despite new hiring in the long-beleaguered construction and real estate industries, according to data released Friday by the state Employment Development Department.

The jobless rate – not adjusted for seasonal fluctuations – rose from a revised 9.6 percent in May to 10.1 percent in June, compared with an unadjusted 11.6 percent in California and 9.7 percent in the United States. (After adjusting for seasonal changes, the state’s rate remains the same, but the nation’s is 9.5 percent.)

 
 
Comment by awaiting wipeout
2009-07-19 07:43:41

I am attending a free Foreclosure Workshop class for 2 hours this coming Wednesday evening. It’s geared towards getting rich in multiple REO ownership and flipping. I thought I might get some insight into who my competition might be when we buy a primary residence. What’s that saying… “Keep your friends close, but your enemies closer”.

The presenter matriculated, and I believe graduated law school (?), but practiced wasn’t mentioned in his bio. I’m not sure of his angle yet.

Comment by alpha-sloth
2009-07-19 08:11:56

Wow, you’re really going into the belly of the beast. Try not to laugh openly or they may turn on you. You may want to bring some back-up.

“I wanted a mission. And they sent me one up like room-service.”

 
Comment by ecofeco
2009-07-19 13:02:58

Some of those free seminars can be educational even when they’re trying to up-sell you and others are just plain “tent revivals” for MLM crap.

I once went to a free seminar on personal and small business tax deductions. That was the day I learned that the wealthy do not pay taxes. Only the stupid ones do. Or if they do, the percentage is less than the lower middle class.

Comment by awaiting wipeout
2009-07-19 18:45:49

alpha-sloth-
I want to hear what’s being said to the sheeples. The radio ads were just such BS.
ecofeco-
I’ve learned things at seminars, that turned into a life lessson too. Sometimes you get to meet a segment of society, you would not normally meet.

Comment by alpha-sloth
2009-07-19 19:20:33

I agree! Never overlook any source of info. It’ll be good for laughs if nothing else. I look forward to your report.

(Comments wont nest below this level)
 
 
 
Comment by Blano
2009-07-19 13:58:42

So who’s doing the seminar???

Comment by awaiting wipeout
2009-07-19 20:39:28

foreclosurew*rksh*ps.com is where
I registered for it. I’m going to try and uncover who is behind it through the Ca Dept Of Corporations before I go. It probably is a DBA of a real estate related biz.

I checked out the Dept of Real Estate License Status Check, and found a few possibilities of who might be behind it company wise. The first names were similar.

 
 
 
Comment by crash1
2009-07-19 07:44:21

Oly, thanks for the laugh yesterday. I had to look for Kanab on a map. Damn, that’s one lonely place out in the desert. My sis has a friend in Kanab and she just got some wild idea to move there. I looked at listings and it looks like every other little desert town in that area. Tons of manufactured homes plopped down on the sagebrush with no thought or planning. As someone else mentioned, medical, recreation, and shopping is a miserable 80 mile drive.

Comment by Olympiagal
2009-07-19 11:12:41

No, thank YOU for the laugh, crashy. :lol:

And please, please keep us informed of how this story unwinds, for verily, it shall likely come to pass that there shall be much wailing and gnashing of teeth and bountiful cuss-words and comical sisterly moans of ‘What was I thinking?!.

Comment by ATE-UP
2009-07-19 12:27:11

I am schritzophonic, therefore I am…

But.

I think Oly Gal is playin’ hard 2 get w/ ATE-UP, and Shorty the Hairy Midget Jerk.

Both.

P.S. Oly Gal, how do you spell..oh, well, nevermind.

Comment by ATE-UP
2009-07-19 12:35:47

I meant to say ” I am (how ever spelled) and so am I. Ran 1/2 M today and started drinking beer heavily when I got home. Sorry.

(Comments wont nest below this level)
Comment by alpha-sloth
2009-07-19 12:47:07

Schritzophonic would be a great name for a band.

 
Comment by alpha-sloth
2009-07-19 12:48:55

and Shorty the Hairy Midget Jerk

 
Comment by ATE-UP
2009-07-19 13:07:55

Ask Oly.

 
Comment by ATE-UP
2009-07-19 13:39:14

Hey alpha, you’re cool.

 
 
 
 
 
Comment by FB wants a do over
2009-07-19 07:49:07

Bank ‘walkaways’ from foreclosed homes are a growing, troubling trend

Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January — five years after her mortgage company filed for foreclosure — that it was still in her name. Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes.

“I thought I had nothing else to do with that home,” said Atterberry. “I was so embarrassed and humiliated by this.” Her mortgage company didn’t buy the house and never took it to sheriff’s sale to see if somebody else would, leaving Atterberry the legal owner, responsible for upkeep and taxes.

Another slice of the dismal pie: In Cleveland more than 60 percent of the foreclosed homes sold by mortgage companies went for $10,000 or less. Some lenders also lose interest during the foreclosure process.

Shawn Martin doesn’t know what will happen to his property on Reno Avenue in Cleveland, where a foreclosure was filed on the two-family rental house in 2006. The sheriff sale had been scheduled, and Martin figured his lender took possession after he drove by and saw the windows boarded up and a tarp on the roof. But nobody bought it — not even his mortgage company.

“They backed out on it and just left it without even telling me,” Martin said. “It just sat there and decayed without me even knowing about it.” The house has been demolished and Martin is worried about being stuck with the bill.

“This is a nightmare,” he said.

Carol Zung’s two-family rental property on Adams Avenue in Cleveland is still standing — and that presents its own set of problems.

A few months ago she got a call from police that the empty house had been ransacked, a call that reached her in Savannah, Ga., where Zung moved to find work after a cascade of financial troubles. The house had been foreclosed on and set for sheriff’s sale in November 2007.

Whether it even went to sale can’t be gleaned from the court docket, which Zung has been checking in the hopes that this incredibly frustrating burden will be transferred off her 69-year-old shoulders.

Now there’s another wrinkle. During a recent check, Zung learned her mortgage holder had gotten the foreclosure decree vacated and the case dismissed. But the property is still in her name and she owes around $37,000 on the mortgage. Zung has been through bankruptcy and said she has no money.

“What do I do now?” she said. “There’s part of my mind that’s given up. Let other people figure out this mess.”

State Rep. Dennis Murray of Sandusky is drafting a bill he hopes to introduce in the next two months that would require lenders or mortgage service companies to take foreclosed properties to sheriff sale within a certain time — or see their mortgage lien erased. The lender wouldn’t be required to buy the property — only to take it to sale. More time could be given to lenders working to keep people in their homes by restructuring the mortgage. Under Murray’s plan, property that doesn’t sell could go to a local land bank.

“We’re saying fish or cut bait,” Murray said. “You can either take it to sheriff’s sale . . . or if you’re going to walk away from the property, do it now so the land bank process and the reclamation can get started.”

Separately, Cuyahoga County Common Pleas Judge Nancy Margaret Russo recently began ordering those granted a foreclosure decree in her courtroom to file the paperwork for a sheriff’s sale in about 30 days — or face being ordered to court for a contempt hearing.

“I think it’s a big problem,” Russo said. “It’s creating more abandoned homes with nobody responsible for taking care of them.”

It’s not clear whether she has the jurisdiction to issue such orders. But Russo — who was not aware of Murray’s initiative when she began hers — believed it was time to start a discussion.

Comment by Carlos4
2009-07-19 10:21:18

I can testify from being on the ground here that whole neighborhoods are worth south of $5000. One near an old GF, occupied by original owner, who inherited it but never paid a dime in taxes, went for $100. Zillow says its worth over $60K as I recall. Dont believe me. Zillow it : 7801 Spafford, 44105. Or, try the nice 3BR across the street, 7802 for $4000. Some folks have a long way to go to match Ohio.

 
 
Comment by FB wants a do over
2009-07-19 07:53:08

Many underwater homeowners are deliberately walking away from mortgages

A study finds that 26 percent of defaults nationwide are calculated economic decisions to bail out of loans by borrowers who could afford to make the monthly payments

Co-authors Paola Sapienza, Luigi Zingales and Luigi Guiso used interviews with 2,000 U.S. households in December and March to explore the “moral and social” dynamics of strategic defaults.

The two 1,000-person samples came from the Chicago Booth/Kellogg School Financial Trust Index, which monitors the level of trust households have in the financial system.

Among the study’s sobering findings:

Moral precepts keep large numbers of financially struggling homeowners out of default, but only to a point. Fully 81 percent of household heads said they believed intentional defaults on mortgages to be “morally wrong.” But that high percentage begins to crumble as negative equity grows increasingly larger.

When negative equity rose to $50,000, 7 percent of those who consider strategic defaults to be immoral said they’d walk away. At $100,000 negative equity, 22 percent would do so. At negative $200,000, 37 percent of those with moral objections would nonetheless default, and at $300,000, 38 percent said they would.

Among those who had no moral reservations, the percentages were much higher. At $50,000 negative equity, 20 percent said they’d walk away. At negative $100,000, 41 percent would do so, as would 59 percent at negative $200,000 and 63 percent at $300,000.

Tenure of homeownership, the frequency of foreclosures in a person’s ZIP Code and even politics influence an owner’s willingness to bail out of a mortgage. Owners under age 35 are less likely to have moral problems with strategic defaults, as are self-described political independents, compared with Republicans and Democrats.

Comment by Michael Fink
2009-07-19 08:33:53

“Owners under age 35 are less likely to have moral problems with strategic defaults, as are self-described political independents, compared with Republicans and Democrats.”

Basically, those who are able to think for themselves.. :) Sorry, that’s not really correct, but it is not surprising to me that it’s the younger (and free-er thinking political views) that are making the “right” decision by walking away from these homes.

Let me tell you something, I know, for a fact, that bankers are laughing at every MTG check they get on a home that is 50% underwater. They are happy about it, but they cannot believe that people are so stupid as to pay (rather than walk) on a home they paid 500K for that would be lucky to sell for 200K today (I’m in the FL market, and talking to FL bankers). It’s like having a “get out of jail free” card and not using it. Give the house back, let the bank eat the loss, your MTG contract explicitly states that this is what will happen if you stop paying. You’d have to be NUTS to try to try and “ride it out” in a state like FL/NV.

Comment by FB wants a do over
2009-07-19 09:30:50

Good point Michael. Suspect most folks who actively become interested in government/politics graduate through levels 1, 2 and at least 3 below as they get older. Not all fall into one of these categories, but it seems to be the trend for the majority.

As a way to calculate where you and yours stand, the following are general definitions for the five levels of political awareness.

1. Illiterate – A person who is politically illiterate might know who the President is or perhaps the Governor of their state but that’s usually about it. They don’t watch the news. They have no knowledge of the issues and don’t know the difference between a Republican and a Democrat. This person does not vote.

2. Misinformed – This category is for those who have latched onto an extreme sect, an emotional issue, a movement or a charismatic personality. They are often dogmatic about their views and prefer partisan rancor because they would lose an objective debate. They often know little if anything about other perspectives. They have a slow growing awareness of officials but are primarily focused on those they dislike. While this person might be passionate and loud about their views, they are also often hypocritical when it comes to the practice of these views. Politics is a character crutch for them. So in turn this person will usually claim to vote but often does not.

3. General – This is probably where most Americans reside. A general awareness is as the name implies. This person knows who some of the government officials are, they know some of the issues and can tell the difference between a Republican and a Democrat. They might be strongly motivated on one or two issues. They might pick their candidates based on personal appeal rather than party affiliation. They lean towards stability, moderation and bipartisan movements. This person votes in almost every general election.

4. Activist – This individual gets involved. Here you have a person with a good grasp of the issues, who can recite the details of sects within each party and has worked on at least one election. This person reads books about politics, keeps up with the daily news and might write articles or a blog with a political hook in it. They have a preference for direct contact and search for an abundance of information wherever possible. They learn how to build coalitions in order to advance their agendas. This person knows who all the candidates are and votes in every election.

5. Expert – This is the flip side of political awareness where-in the individual is the one making the news instead of following it. The expert might work in government, knows all the issues, knows all the candidates and power players sometimes personally. This person is likely to have worked in many elections. They understand the language of diplomacy and can strategize with institutions and community organizations when necessary. They can, as Jane Dudman of the Guardian newspaper said, “Exhibit sensitivity to different viewpoints and hidden agendas.” This person might appear on the talk shows, they might write political books and their opinions carry weight in the political community. They always vote and do so publicly.

Comment by SaladSD
2009-07-19 12:38:37

Wow, this is a terrific breakdown, I’m going to appropriate it, if you don’t mind. I do, though, think that most people are at level 2, based on my intermittent bouts of activism. Things are way too Alice in Wonderland these days to even bother with supporting any particular cause.

(Comments wont nest below this level)
 
 
Comment by pismoclam
2009-07-19 16:17:33

Send 1099s to the walk away defaulters. That will cure the s–t on the neck sickness.

 
 
Comment by In Colorado
2009-07-19 09:20:08

Received a “newsletter” from a realtor friend. It claims that Moody’s is predicting 50% appreciation in Larimer County, CO over the next 10 years.

I wonder how that is going to happen, given that median wages out here are still in free fall.

Comment by skroodle
2009-07-19 12:01:58

Lotsa Inflation.

Comment by Pondering the Mess
2009-07-20 09:38:58

But not in wages, of course.

(Comments wont nest below this level)
 
 
 
Comment by Lisa
2009-07-19 09:36:26

“A study finds that 26 percent of defaults nationwide are calculated economic decisions to bail out of loans by borrowers who could afford to make the monthly payments.”

Wow, just think of where this percentage will land once the AltA, OptionARM and Jumbo Prime resets start to hit. Bigger loan balances should make jingle mail a no-brainer for a good chunk of these loans, is my guess.

 
 
Comment by WT Economist
2009-07-19 07:57:14

Just got back from Mass. Jesus had pity on the masses, because they were like sheep. Perhaps that explains the housing and consumer debt bubble, as some of us are like wolves too.

In any event, the Times reports on people who have to sell. The example is a couple who sold in Manhattan at the peak of he bubble, were able to buy in Brooklyn for all cash after tripling their investment, hoped to do it again, and now “can’t sell after having to move.

http://www.nytimes.com/2009/07/19/realestate/19cov.html?hpw

“At first the Rogerses asked $679,000, the price at which their neighbor had sold his apartment. They have since cut the price several times and switched agents; they are now working with Anne Buckley of Fillmore Real Estate in Fort Greene, Brooklyn. The apartment is listed at $599,000; they will lose about $60,000 in transaction costs if it sells at that price.”

It’s a 2,000-square-foot condo. I’ll bet it could sell for $360,000, an affordable price for a couple earning $120,000 between them.

Comment by Bob
2009-07-19 08:32:40

priorities??? I never thought that little tiffany need a master suite w/bathroom …. but putting the baby in the closet while the cat gets its own room. Wow

——————————————-

“Right now, we might put the baby in the closet,” said Elizabeth Demaray, 41, of the compromise she and her husband, Hugo Bastidas, 51, may be forced to make when their first child arrives next month. “The closet is 54 inches wide and the crib is 53 7/8 inches wide. I just need to find an itty-bitty changing table.”

Last year, Ms. Demaray, a sculptor and assistant art professor, and Mr. Bastidas, a painter and art professor, moved to East 116th Street near Lenox Avenue, to a two-bedroom condominium that he also uses as an art studio.

But the 1,200-square-foot space is not big enough for the couple, his canvases, a baby and an exceptionally vocal Bengal cat that must be sequestered in its own bedroom at night if the humans are to sleep.

Mr. Bastidas paid $620,000 for the condo in February 2007. The couple listed it early this spring for $715,000 with Karen Shenker, an associate broker at Corcoran. The asking price was about what comparable units in the building, which has been LEED certified, had sold for. There have been no offers.

Comment by NYCityBoy
2009-07-19 08:48:48

Would it be wrong for me to wish death upon these artists? The little brat would probably be better off, not being exposed to these wackos.

Comment by Eudemon
2009-07-19 09:36:04

And turn the cat into a floor rug.

Won’t happen, ‘natch, as everything that happens in this household is all about the feelings of the Artists.

The baby might serve its purpose at a tony New York showing. It can be affixed to a metal bracket and be presented as living and breathing art that the earthy, aware Artists created themselves.

(Comments wont nest below this level)
Comment by ET-Chicago
2009-07-19 09:58:19

The baby might serve its purpose at a tony New York showing. It can be affixed to a metal bracket and be presented as living and breathing art …

I find that idea quite disturbing … and pretty funny.

 
Comment by Eudemon
2009-07-19 11:35:53

Yeah, it’s twisted….but less so than this sick NY couple, whose baby might be murdered/eaten by their Bengali leopard.

Might as well leave the baby in the NY subway.

 
Comment by Silverback1011
2009-07-19 16:40:39

So let me understand this. The kitty gets its own room, and they put the baby in the closet ? God pity this child.

 
 
 
Comment by DennisN
2009-07-19 08:57:44

Bengal cats are NOT regular cats. They are cross-bred with South Asian leapord cats. They cost about $6,000 from a breeder.

SIX THOUSAND DOLLARS FOR A CAT.

Comment by hip in zilker
2009-07-19 10:03:48

…those people sound like characters in a satire skewering pretentious NY artistas…

(Comments wont nest below this level)
 
Comment by DennisN
2009-07-19 10:58:44

Having a half-wild cat in a cramped NY apartment is as crazy as those nuts who keep pit bulls and great danes in similar lodgings.

Notice she’s having a first baby at age 41. I wonder how much they spent on medical treatments.

Also how he will be 73 years old when the kid graduates from college.

(Comments wont nest below this level)
Comment by Müggy
2009-07-19 11:41:04

“when the kid graduates from college”

Oh, that, well… he’ll probably get a full ride at Harvard with his life story.

I was raised in a closet, during the deepest recesses of a faltering economy. My father was a relentlessly self-improving boulangerie owner from Belgium with low grade narcolepsy and a penchant for buggery. My mother was a fifteen year old French prostitute named Chloe with webbed feet…

 
Comment by drumminj
2009-07-19 18:11:05

Having a half-wild cat in a cramped NY apartment is as crazy as those nuts who keep pit bulls and great danes in similar lodgings.

Dennis, I suggest you read up on the breeds before dissing them.

Just because Great Danes are large doesn’t mean they need room to run indoors. They’re mostly couch-potatoes, and so long as they get a decent walk or some play time, having them in a smaller apartment isn’t a big deal.

Pits are terriers and as such do have quite a bit of energy, but they’re fine as apartment dogs as long as you make sure to exercise them properly. Boxers are the same way, and I had mine in an apartment when I first got him and have him in one now.

Many “big dogs” do just fine in smaller living quarters. They’re not running around non-stop all the time. You just need to make sure to exercise and train them properly, but that’s true if you’re in a small apartment or a large house.

 
 
Comment by SaladSD
2009-07-19 12:41:56

Um, lose the cat? Space problem solved.

(Comments wont nest below this level)
Comment by SaladSD
2009-07-19 12:43:45

p.s. I love cats, can’t have one anymore because my husband is allergic, and no, I’m not paying $2,000 for one of those designer non-allergic breeds. Every cat I’ve ever had has been a foundling….

 
Comment by Prime_Is_Contained
2009-07-19 15:05:50

“Um, lose the cat? Space problem solved.”

+1, Salad. I thought it was pretty d*mn funny that the cat gets its own bedroom, and the kid gets a closet as a nursery! Priorities, priorities…

 
 
Comment by Cassandra
2009-07-19 16:21:38

People pay for cats?

(Comments wont nest below this level)
 
 
 
Comment by skroodle
2009-07-19 12:06:07

You forgot this part:

The couple bought it for $599,000 in cash in January 2006, after selling the Hell’s Kitchen apartment they had outgrown for $920,000 at the height of the market, and pocketing a profit that was three times what they had paid.

Comment by oxide
2009-07-19 12:34:19

Do you have to be in NYC to do art? I can’t believe they made $900K and immediately blew $620K of it. You could get a very nice house with land and garage for $100K or so. Hubby could do his art in a pimped-out garage/studio within 2-3 hr driving distance of NYC if he needs to do a showing, Mom runs the house, and the Bengal cat can take out the mice and rabbits that get into Mom’s garden.

But I guess there are people who HAVE to live in The City.

Comment by SaladSD
2009-07-19 12:45:54

And be a Bridge & Tunnel artist? so way not cool. :-)

(Comments wont nest below this level)
 
Comment by Eudemon
2009-07-19 13:17:23

Yes! All starving artists must live in NYC.

(Comments wont nest below this level)
 
Comment by Cassandra
2009-07-19 16:23:54

So if I read this right, they still had $280,000 in there pocket? That should rent a $5000/month place in Geneva for how long?

(Comments wont nest below this level)
 
 
 
 
Comment by aNYCdj
2009-07-19 08:17:06

50 Cent slashes price on Conn. mansion to $10.9M

FARMINGTON, Conn. — The price of the Connecticut mega-mansion owned by rapper 50 Cent has dropped again — to $10.9 million.

The 50,000-square-foot mansion is in the Hartford metropolitan area suburb Farmington. It was owned by boxer Mike Tyson.

It has 19 bedrooms and 37 bathrooms. It boasts a gym, billiards rooms, racquetball courts and a disco with stripper poles.

The New York City rapper bought it for $4.1 million. He said it had “a ‘Miami Vice’ feel” and spent $6 million on renovations and repairs.

The home was for sale for nearly two years before being pulled off the market in May. The initial $18.5 million price dropped to $14.5 million late last year.

50 Cent says he’s tired of the two-hour commute to New York City and wants to downsize.

Comment by NYCityBoy
2009-07-19 08:44:59

That place has no value. The cost to run it must be astronomical. Even with the stripper poles I wouldn’t buy that thing. Well, let me think. Stripper poles? Hmmmm. No, I still think I will just laugh at this hip-hop Mozart.

Comment by pressboardbox
2009-07-19 12:39:50

I don’t know. Stripper poles just might be the hot new granite/travetine set-up that homebuyers are looking for. If every flipper just put in some stripper poles it just might jump-start the market.

 
 
Comment by yensoy
2009-07-19 09:06:28

I predict it will sell for 50 cent to a dollar. That is based on the purchase price of $4.1M.

 
Comment by Muggy
2009-07-19 09:41:32

“he’s tired of the two-hour commute to New York City and wants to downsize.”

Him and 200,000,000 other Americans. We really built ourselves some nonsense.

Comment by alpha-sloth
2009-07-19 10:43:54

Do people who can afford such a house (and they are few) really “commute”? Seems to me they’d fly into NY whenever they felt like it on a helicopter. Or at least be limo’ed in during non-rush hour.

Comment by Muggy
2009-07-19 17:50:25

Actually, I hate to say this, but yes, a surprising number of NY’ers drive themselves around. David Letterman comes to mind.

It is sometimes different there.

(Comments wont nest below this level)
Comment by alpha-sloth
2009-07-19 18:19:43

I guess I mean commute in the sense of a daily drive to work. I’m sure they zip around in their cool cars.

 
 
 
 
Comment by Muggy
2009-07-19 09:43:31

Get Rich, or Default Tryin’

Comment by alpha-sloth
2009-07-19 10:47:44

LOL His next album was “The Massacre”

Comment by Müggy
2009-07-19 11:31:45

His last album will be, “Brown Paper Bag.”

(Comments wont nest below this level)
Comment by Prime_Is_Contained
2009-07-19 13:49:28

I prefer “Brown Paper Bag and Cardboard Box.”

:-)

 
Comment by Olympiagal
2009-07-19 15:10:53

Hahah!
Well, I prefer “Brown Paper Bag and Cardboard Box and a Shirt Nice and Stiff with Boone’s-Farm-Scented P*uke.”

 
Comment by alpha-sloth
2009-07-19 16:22:14

If I have to choke to death on my puke….I want it to be strawberry-scented.

 
Comment by Muggy
2009-07-19 17:53:29

“Brown Paper Bag and Cardboard Box and a Shirt Nice and Stiff with Boone’s-Farm-Scented P*uke.”

Fiddy (if you happen to read this blog), there are at least three people that strongly believe this is a great album title.

Also, next time the plan should be put the rap game real estate holdings in a chokehold.

 
 
 
 
Comment by joeyinCalif
2009-07-19 09:51:27

..50 Cent says he’s tired of the two-hour commute to New York City and wants to downsize…

Well, there might be a little more to it..
—————
50 Cent learns value of a dollar
The free ride is over at 50 Cent’s G-Unit Records.
[snippets]
…The rap mogul has confessed he was overgenerous with artists on his label. In fact, Fitty spent $8.5 million of his own money to take a lot of the rappers on his most recent tour…

Not only that, he’d hand out hundreds of thousands of dollars to them at a time just for the asking…
…..he called a meeting and told the artists at his label that the free ride was over…

“…I broke it down. I told them I wouldn’t be assisting them financially anymore. Pretty much I was telling them I wouldn’t be there. [In the past] they’d make a lot of money and spend a lot of money and have me there to fix it.”

Still, 50 lives in the largest mansion in connecticut - Mike Tyson’s former spread….

www dot nydailynews.com/gossip/rush_molloy/2007/07/05/2007-07-05_50_cent_learns_value_of_a_dollar-1.html

Comment by NYCityBoy
2009-07-19 10:09:14

50 Cent to posse - “Drop Dead!”

Now we know times are getting tough when these brilliant artists are having to make difficult financial decisions.

 
Comment by joeyinCalif
2009-07-19 10:20:20

i mighta screwed up .. just noticed the date on that article..

Thursday, July 5th 2007, 4:00 AM

My eyes saw 2009..

But, maybe things haven’t improved in the last two years (why would they?) and half-dollar is kinda stretched for cash and needs to sell.. What’s the mortgage payment on $4.1 million?

 
Comment by aNYCdj
2009-07-19 10:58:56

Do you think FINALLY the rap music biz will go broke…

Just in time for me to promote zydeco rock and blues?

Comment by joeyinCalif
2009-07-19 11:53:44

I dunno anything about the music biz or pop culture so i have no opinion.. but a couple years ago i asked a pro to predict the sequence of events through the coming economic decline and revival in general.

He said the most of the biggest would survive thanks to deep pockets, while failures would be mostly medium and small enterprises. The beginning of recovery will offer entrepreneurs a window of opportunity unmatched in many decades. The vacuum left by the failures will not remain empty.

(Comments wont nest below this level)
Comment by Big V
2009-07-19 12:36:22

Wait a second, Joe.

Just yesterday, you likened the current economic turmoil to a skydive requiring a parachute (as opposed to a bungie jump that will automatically spring back). Today, however, you insist that the gaps left by failures will quickly be filled by new players. Your reasoning today fits well with the bungie jump model, not so much with the parachute model.

Methinks you are indulging in some internally inconsistent reasoning.

 
Comment by joeyinCalif
2009-07-19 12:56:53

i didn’t equate a bungy with a springing back. You don’t spring back with a bungy.
Try it some time. You (hopefully) end up a few feet above the ground after bouncing around a lot, no worse for the wear.

I said there was NO bungy cord to save us. I suggested the dive we are taking is more like jumping from a plane, and that a somewhat controlled, parachute-type descent was preferable to smashing into the ground at terminal velocity..

 
 
 
 
Comment by SaladSD
2009-07-19 12:47:03

How about turning it into a rehab center or senior home?

Comment by ecofeco
2009-07-19 13:30:35

Since it’s set up as a strip club, why not keep it a strip club?

Comment by SaladSD
2009-07-19 16:05:15

How about a senior strip club? Might be a good way to keep them active!

(Comments wont nest below this level)
Comment by ecofeco
2009-07-19 19:00:58

“The Geriatric Gentlemen’s Club”

I like it!

 
 
 
 
Comment by bill in Los Angeles
2009-07-20 07:32:48

cRAP “musician” selling his house? I’ll bet his neighbors are hoping he goes out very fast. I’d be shooting myself if I had a cRAPPER move in next door while I’m a mortgage slave.

 
 
Comment by Bill in Carolina
2009-07-19 08:27:47

An investigative report in the Sarasota newspaper, ” ‘Flip that house’ fraud cost billions.”

The most disgusting quote: “Despite their role in one of Florida’s largest white-collar crime sprees, the vast majority of unscrupulous real estate flippers will never be prosecuted.”

Some others: “In June 2005, when flipping hit its peak, more than 2 percent of all Florida real estate sales fit the criteria for potential fraud… A close review of several thousand flips in Sarasota and Manatee counties showed that 40 percent of the flippers were industry insiders — real estate agents, mortgage brokers and attorneys.”

The story will run in multiple installments all week. It’s at www dot heraldtribune dot com.

Comment by InMontana
2009-07-19 10:44:35

yup, go looky loo at any listing that’s been out there awhile and I’ll guarantee you the shower is also one desperate Realtor-owner. coinkydink? ITN

Comment by easthawaii
2009-07-19 21:16:09

thanks, you made me chuckle

 
 
 
Comment by Socaljettech
2009-07-19 08:57:05

I’m going to try and instill a bit of calm back into Sunday morning since I haven’t seen Ranchers post yet and the HBB is all full of doom and gloom this morning-
Good Morning all!!
- I just finished my second cup o’ joe and an omelet made with tomatoes and green onions from my garden… man, what a great idea that was to plant that!! I had forgotten how different fresh veggies taste- I couldn’t buy an omelet that good at a restaurant if I tried!! I’ve been up since 5:30, enjoying the quiet before the city wakes up-a truly inspiring part of the day when anything is still possible and nothing seems as bad as it really is!
Now I’m gonna finish watching the Tour and fantasize of living the simple life in a place as beautiful as the French countryside… There is still hope- you just have to look a lot harder for it!!

Y’all have a great morning and enjoy life a little-

Socaljettech

Comment by Olympiagal
2009-07-19 11:05:34

I’ve been up since 5:30

Wha….? Yer crazy.
But at least yer a kind-hearted and perky crazy person.
:lol:

Comment by SaladSD
2009-07-19 12:50:22

I stayed up until 1 am. so there.

Comment by Olympiagal
2009-07-19 15:17:30

Me, too! We’re like twins!
Did you have a bonfire as well, and fall off the porch while you were explaining something loudly and dramatically? Because that’d just be creepy! :lol:

(Comments wont nest below this level)
Comment by SaladSD
2009-07-19 16:17:48

Hah! nothing so dramatic as that. Watched this rather depressing foreign film, Mochette, and then caved in to my online addiction for a few hours…. There’s a film, Tokyo Sonata, that I tried to order on Netflix but they don’t have it yet. They’re thinking of adding online addiction to the next edition of the DSM (Diagnostic & Statistical Manual of Mental Disorders). SOmehow this factoid is connected to Tokyo Sonata,,, but it escapes my mind…

http://filmeyeballsbrain.wordpress.com/2009/03/18/kiyoshi-kurosawa-tokyo-sonata-2008/

 
Comment by socaljettech
2009-07-19 17:20:10

“Wha….? Yer crazy.”

LOL, no doubt you’re right.. but morning is really the best part of the day here! Besides, the Race is on!!! The beautiful French countryside (unfortunately inhabited by the French) and today the Alps climb starts! I might stay up later if we could have bonfires but there’s no water if it gets too big and the whole LA basin might go up in smoke…hmm, no don’t have that much wood, Darn!! Bonfires remind me of the time more than a couple of years ago that we had a bonfire at the beach- some how a VW case made its way onto the fire- I think you could see it burn all the way to Catalina- the Rangers were NOT amused- but they let us off with a warning (back in the days you could do silly things like that and not get carted off to jail). I think you may have been there, no? Maybe it’s deja vu- the falling down and talking loudly part of your bonfire story sounds a lot like that night… especially the falling down part…

 
 
 
 
 
Comment by Muggy
2009-07-19 09:38:52

X-GS, if you’re out there, I thought I’d let you know that my fall USF bill came in: $944 for one grad class. It was $747 in 2007.

I’m glad I’m almost done.

 
Comment by az_lender
2009-07-19 09:51:48

Cousin Sherry in Maine finally decides to lower the price. Has been asking $400K for an older 4BR + guest cottage on 3 acres w/ distant waterview. No offers in 8 months, and only 2 or 3 lookers. The agent kept saying, “The price is not the problem.” (WTF?)

Yesterday I pointed out that the agent has produced no action at all, and that it is impossible to test the hypothesis that the price is not the problem, unless one lowers the price. Sherry said she completely agrees, that she has told the agent she wants to lower the price, that the agent agrees. There is no way Sherry can hang onto it during the winter w/o the guest-cottage income.

So I said, “How much did you lower it?” Answer: “We haven’t yet.”

Jeeeeeeeeeeeeezzzzzzzzzz…

Comment by joeyinCalif
2009-07-19 10:12:17

just out of curiosity.. does she need to sell? If not, why is it on the market?

If a property is way overpriced, an agent can’t be expected to put a lot of time or effort into it. An unmotivated seller makes it worse.
As for suggesting the client (customer?) lower the price, sometimes it’s wise to be prepared with a mouth-guard and chest protector.. things can get hairy.

Comment by skroodle
2009-07-19 12:20:33

Its prudent of the agent to make lowering the price seem to be the homeowners idea. I had a boss at work like that.

 
 
Comment by Kim
2009-07-19 12:58:26

Umberger’s column in today’s Chicago Tribune quotes a UHS:

“Sellers have to be at the bottom 30% of pricing [for comparable homes] and in the top 30% on the house’s condition.”

That would still be overpriced IMHO, but I welcome anything that lowers the comps.

 
 
Comment by Professor Bear
2009-07-19 10:24:35

We have nothing to fear but fear itself.

Citi and BofA fail to allay fears
By Francesco Guerrera, Greg Farrell and Michael Mackenzie in New York and Chris Bryant in Berlin

Published: July 17 2009 13:42 | Last updated: July 18 2009 00:43

Bank of America and Citgroup, both still reeling from the financial crisis, on Friday failed to dispel investor fears over their future after reporting second-quarter profits that were boosted by large one-off gains.

The banks, which have been bailed out by US taxpayers and are under close regulatory scrutiny, continued to suffer from consumers’ financial woes and appeared to lose ground to healthier rivals such as Goldman Sachs and JPMorgan Chase in investment banking.

 
Comment by Professor Bear
2009-07-19 10:27:35

Brother, could you spare $20,000,000,000 dimes?

Troubled CIT calls for $2bn infusion
By Henny Sender and Saskia Scholtes in New York
Published: July 17 2009 20:15 | Last updated: July 18 2009 00:55

CIT Group was in crisis talks on Friday night with a small group of its bondholders to cobble together a rescue financing that would stave off a bankruptcy filing.

In a day of negotiations that saw JPMorgan and Goldman Sachs drop out as potential providers of rescue funds, CIT approached bondholders for an infusion of between $2bn and $3bn.

Comment by NYCityBoy
2009-07-19 10:29:36

I would be willing to bet that top execs at CIT have done amazingly well in recent years. Anybody want to bet?

Comment by SaladSD
Comment by NYCityBoy
2009-07-19 13:08:21

Where are the f—ing arrests for all of these lowlife a–holes? Nothing is resolved until that happens. NOTHING!

(Comments wont nest below this level)
Comment by ecofeco
2009-07-19 13:35:38

Hey, you can’t treat “talent” like some lowelife, lying, thieving, two faced scum. Why the very idea!

 
Comment by Professor Bear
2009-07-19 15:57:17

Most depressing realizations in the aftermath of the bubble:

1) Those who were most responsible have profited handsomely.
2) There is little or no political will to give perpetrators their just desserts.
3) The evidence of large profits to be earned through engineering financial disasters suggests they will continue to occur with surprising frequency going forward (and nobody will ever see any of them coming).

 
Comment by Professor Bear
2009-07-19 16:48:09

Op-Ed Columnist
The Joy of Sachs

By PAUL KRUGMAN
Published: July 16, 2009

The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.

Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away.

Third, it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.

 
Comment by Professor Bear
2009-07-19 16:51:13

Krugman really nails it right here, IMO:

“Goldman’s role in the financialization of America was similar to that of other players, except for one thing: Goldman didn’t believe its own hype. Other banks invested heavily in the same toxic waste they were selling to the public at large. Goldman, famously, made a lot of money selling securities backed by subprime mortgages — then made a lot more money by selling mortgage-backed securities short, just before their value crashed. All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.

And Wall Streeters have every incentive to keep playing that kind of game.”

 
Comment by SaladSD
2009-07-19 22:12:07

Ah, the kicker is that now with G Sack minting new millionaires it’s lifting up the tax revenue. Saints be praised according to the breathless MSM. It’s like we killed all of G Sack’s competitors, and they’ve infiltrated the financial system like Alien tendrils in our bowels, and if we kill the Alien we kill ourselves. We’ve created the mother of all monsters.

 
 
 
 
 
Comment by Professor Bear
2009-07-19 10:39:10

All hail to the banks who used TARP money to bolster their bottom lines and to reward executives who cast hundreds of billions of dollars into the sea with massive bonus payments. If they are clever enough to place former employees in top government posts, thereby enabling them to spontaneously grab a massive amount of public money at the height of crisis, don’t they deserve the credit?

BTW, when I read articles like Mister Gimein’s, I have to resist the urge to spit, curse and throw things.

Resist The Urge To Punish Success
By Mark Gimein
Sunday, July 19, 2009

Money can’t buy love? For proof, look no further than Goldman Sachs. Last week, the firm reported a spectacular quarterly profit — close to $3.5 billion for the bank and about $385,000 in compensation for each employee for the first half of the year — and right on cue, the braying began for the heads of the Goldmanites. Earlier this month, Rolling Stone’s Matt Taibbi, in a comprehensive exercise in conspiracy mongering, primed the pump of outrage with his article “The Great American Bubble Machine.” Now a chorus of supporters has chimed in, shocked that in a recession the evil Goldman could turn such profit.

Comment by Professor Bear
2009-07-19 10:44:41

Fortune Magazine
The Deal
by Allan Sloan

Goldman Sachs bites Uncle Sam’s hand

The investment bank is fat and happy again, but you wouldn’t know it from its squabbling with the Treasury over the warrants in the TARP deal.

By Allan Sloan, senior editor at large
Last Updated: July 19, 2009: 8:40 AM ET

NEW YORK (Fortune) — I’ve always thought that the guys running Goldman Sachs were really smart, not only about making money, but also about projecting a classy image to the world outside of Wall Street. Clearly, I overestimated them.

If there was ever a firm with the motivation — and the money — to be gracious to the U.S. taxpayers who kept it alive when the financial markets were imploding, it’s Goldman. It had a chance to look good and do good for taxpayers and itself and Wall Street for a relative pittance — and has blown it. Horribly.

As you have probably noticed, Goldman is getting attacked for posting record profits and setting aside a record amount for employee compensation about three seconds after it repaid its $10 billion of loans from the Troubled Asset Relief Program. Repaying those loans freed Goldman from pay restrictions on its top honchos, who seem headed for record or near-record bonuses unless things go badly for the firm in the second half of the year.

What you probably don’t know is that Goldman, flush with cash and profits, is squabbling with the Treasury about how much it should pay taxpayers to buy back the stock purchase warrants it gave the government as part of the TARP deal. Talk about tacky.

Comment by Joe Lawyer
2009-07-19 18:49:56

Things WILL go badly for them.

 
 
Comment by LongIslandLost
2009-07-19 10:48:24

The outraged people are late to the party. My outrage began when TARP was being discussed.

But I’m glad they’re finally here.

I don’t mind that people are outraged over less than 1% of the TARP money being spent to line the pockets of crooks.

The outrage is good, accurate, and if it turns into votes, a sign that democracy works (eventually).

Comment by Professor Bear
2009-07-19 10:51:25

“My outrage began when TARP was being discussed.”

Same here. But then the regulars on this blog do have a tradition of early response.

 
 
Comment by Professor Bear
2009-07-19 10:49:07

The New York Times
Windfalls for Bankers, Resentments for the Rest
By DAVID SEGAL
Published: July 18, 2009

There was a time in this country when a company reporting a few billion in earnings could count its money while basking in polite, reverent applause.

That time ended Tuesday.

It was the morning that Goldman Sachs reported net income of $3.44 billion, a number that surprised even analysts who follow investment banking. JPMorgan Chase came two days later with news that it had earned $2.7 billion in the second quarter, even more than it earned in the same period last year, before the economy had a cardiac infarction.

Then on Friday, Citigroup and Bank of America — two of the great basket cases of the meltdown — reported outstanding numbers, too.

 
Comment by Professor Bear
2009-07-19 11:05:18

The ongoing moral hazard problem of free too-big-to-fail bailout insurance for systematically-risky banks has thus far survived the recent financial meltdown. Unless someone stands up to the likes of Larry Summers and Ben Bernanke to emphatically and persistently decry the problem of rewarding too-big-to-fail financial entities with free ad hoc bailout insurance, we can look forward to a continuation of the recent experience with financial engineering that fosters
mass scale wealth destruction for the private benefit of a few big banks. Without ample reform, I foresee this pattern continuing right up to the point where America’s status as the leading world economy is a chapter in the history books.

Wall Street bankers back for big payoffs from the ‘volcano’

By Steven Pearlstein/The Washington Post
Saturday, Jul 18, 2009 - 04:45:18 pm CDT

WASHINGTON — The rest of the country may be stuck in a nasty recession, but on Wall Street, where it all began, business is booming.

Last week, Goldman Sachs reported a record profit for the latest quarter while J.P. Morgan Chase weighed in with record revenue, and other banks are set to exceed expectations. Compensation levels in some areas are returning to 2007 levels, and firms are once again offering big salaries and guaranteed bonuses to lure away top traders and investment bankers.

Certainly we’re all better off now that some banks are healthy enough to remove themselves from government life support and pay back the Treasury loans. And if well-run banks can again earn an honest profit by taking smart risks and restoring the flow of capital into the markets — well, that’s what capitalism is all about.

Then again, it seems outrageous that the geniuses whose excessive risk-taking brought on the crisis, and who had to be bailed out by the rest of us, are the first to recover and could soon be earning what they did before.

It’s the pay, of course, that gets everyone up in arms.

 
Comment by Professor Bear
2009-07-19 11:07:41

Forbes
The Croesus Chronicles
In Goldman Sachs We Trust
Robert Lenzner, 07.17.09, 06:00 AM EDT

The investment bank has a special culture that has helped it respond brilliantly to crises.

Robert Lenzner

For some the spectacle of Goldman Sachs’ profits triggers awe; for others, many others, it’s triggering an intense spate of ire.

On Comedy Central’s Daily Show, Jon Stewart asked Rep. Barney Frank, “What are these Goldman Sachs guys going to do next, dip their [private parts] in gold?” Rolling Stone charges that Goldman Sachs created the dot-com, housing and commodity bubbles. Other headlines scream “Government Sachs” about the high posts in government held formerly by ex-Goldman Sachs bigwigs Hank Paulson and Bob Rubin, and currently by New Jersey Gov. Jon Corzine and New York Federal Reserve Bank President William Dudley. Bloggers buy the conspiracy theory and wail that GS must repay Uncle Sam for its largesse during the financial meltdown.

It was the same 54 years ago when Harvard professor John Kenneth Galbraith titled his chapter on GS in The Great Crash of 1929 “In Goldman Sachs We Trust.”

 
Comment by Professor Bear
2009-07-19 11:11:57

New York Post

GOOD FOR GOLDMAN, BAD FOR AMERICA
By TERRY KEENAN
Last updated: 4:43 am
July 19, 2009

CALL it the Goldman rally.

From the moment ace banking analyst Meredith Whitney turned bullish on the venerable firm Monday morning, through the after-glow of its blow-out profit report the next day, stocks were off to the races.

The Dow and S&P 500 put in their best winning streak since May, as pundits proclaimed that Goldman’s record quarter on Wall Street meant that all is right again on Main Street.

Sadly, just the opposite is the case. In fact, to turn a famous phrase on its head, what’s bad for America is good for Goldman Sachs.

 
Comment by NYCityBoy
2009-07-19 12:14:31

So, this f-ckface defines “success” as the destruction of the United States? Somebody find a lamppost.

Comment by ecofeco
2009-07-19 13:41:15

You have a problem with the final outcome of Reaganomics?

 
Comment by Olympiagal
2009-07-19 15:15:40

I don’t have a lamp-post, but I do have some big trees handy, with really scratchy bark that would cause additional abrasion and pain! Plus, given the destruction of the natural world that these pigmen have wrought, hanging off a big tree would provide a delightful touch of irony. And then we’ll hit them with mossy sticks, for more irony!
It’s be like squealy pinatas dressed in expensive pin-stripes…

*lapses into happy fantasy **

Comment by Cassandra
2009-07-20 06:20:46

oooh, a pinata!

(Comments wont nest below this level)
 
 
 
Comment by Professor Bear
2009-07-19 16:45:04

I expect nothing to come of the West Wing handwringing episode over Goldman. This is political theater for the sheeple, nothing more.

The media is also accepting without scrutiny Hank Paulson’s judgment that the financial system would have collapsed were it not for the bailout. Since history cannot be played twice, there is no way to test this assertion, but I think it certainly deserves careful analysis before jumping to conclusions, especially given the windfall profits that Goldman has reaped in the ensuing period.

Time Magazine
Goldman’s Sudden Boom Could Be a Bust for Obama
By Michael Scherer / WASHINGTON Friday, Jul. 17, 2009

Goldman Sachs chairman and CEO Lloyd Blankfein testifies before the House Financial Services Committee on Feb. 11, 2009

In a clear departure from the historical norm, the White House is not cheering the return of huge profits to Wall Street. On the contrary, the recent windfalls at Goldman Sachs and JPMorgan, and the promise of giant year-end paydays for banking executives and traders, has caused a bit of consternation in the West Wing, coming as it does so soon after the taxpayer bailouts saved the entire financial system from total collapse.

“If I were a Wall Street firm, I would perhaps be cognizant of the fact that the financial regulatory-reform process is only beginning in Congress,” warns a senior White House official, speaking about the political problems that huge paydays at Wall Street firms could create later this year, when new laws to regulate the industry will be written on Capitol Hill. Officials have also begun to worry aloud whether the Wall Street firms learned anything from the catastrophic financial crisis that was largely of their making or whether they are now returning to the old business of making short-term profits that create long-term risks.

On July 14, Goldman Sachs posted second-quarter profits of $3.44 billion, more than the company made in all of 2008 and about on par with the precrisis gilded age, while announcing that it had set aside $11.4 billion this year to compensate workers, or $386,489 per employee. The huge profits were hailed on Wall Street as another sign that the crisis might be ending. On July 15, the Dow Jones industrial average jumped 3.1%, and other banking giants are expected to issue their own similarly glowing reports. On July 16, JPMorgan announced that it had earned $2.7 billion in the second quarter.

 
Comment by Professor Bear
2009-07-19 17:10:03

The Chronicle of Higher Education
The Chronicle Review
A weekly special section

About the Author

Laurie Fendrich, a painter who lives and works in New York, is a professor of fine arts at Hofstra University. Her writing has focused on the place of art and artists in society and the education of young artists, but she has also written essays questioning the viability of beauty in a post-Darwin era, the meaning of abstract painting, and the tyranny of outcomes assessment. She will blog about university life, the arts. and culture.

Goldman Sacks Us Yet Again

“Why so gloomy, mice?”

The photo that goes with this caption is hilariously apropos — it shows a fat cat lying back against the wall with its ’sack’ aimed straight at the camera.

In this post, I’m going to go about as far outside my “area of expertise” as I can possibly go. In fact, I write with no qualifications to speak about the subject — a matter of economics — whatsoever. The only thing I bring to the table is that like most reasonably fair-minded people, I recognize a gross injustice when I see it.

Admitted econo-ignoramus that I am, I still consider the unpredicted economic meltdown (that is, save for a few prescient souls, like Paul Krugman, who saw it coming) we experienced this past year to be strong empirical evidence that economics deserves its reputation as the “dismal science.” Complicated as economics is, however, it’s not hard to grasp that Goldman Sachs is about to make a startling announcement. Like a phoenix rising from the ashes, Goldman will report tomorrow that they have achieved “blowout profits” (the phrase used in today’s New York Times report on their success) during this past quarter.

Well, forgive me for not jumping up and down with joy. That we taxpayers, who bailed the sons-of-*#%@!@$%!’s out in the first place, don’t get to share in any of these profits, is, for starters, an insult. (I always thought this would have made some sense.) Far more disgusting, however, is the economic injustice implicit in Goldman’s newly “earned” profits. Who among us, other than fat cats, thinks it’s a good thing for fat cats to make walloping profits from “trading” (what a silly euphemism for “skimming everything possible off the top” this word has become) while the country suffers through its deepest recession since the Great Depression?

Comment by Housing Wizard
2009-07-19 20:59:39

Didn’t anyone suspect this was going to happen ? I saw the set up for it before it happened . Come on , all of a sudden ,a newly retired CEO from Goldman’s becomes the Treasury Sec., right when the crash is really to blow . The Treasury Sec. and the Fed Chairman go about the process of changing laws ,and quickly make Goldman’s a
Bank Holding Company so they could go to the Discount Window as well as qualify for TARP later . Than all of a sudden the taxpayers are on the hook for giving one of the biggest loans in history to a Insurance Company (AIG).

Why wouldn’t the Feds pay for the defaulting loans directly ,thus
making it so AIG would not have that liability to pay on (after all they were going to buy toxic loans ,remember). Because GS would of suffered some loss being paid directly by TARP verses just getting a insurance pay-out from AIG for the full amount ,or no pay out because it went BK . Is anybody following me on this ,or correct me if I’m wrong . So GS also ends up taking I think about 10 billion from TARP ,and a cool over 30 billion from AIG on the credit default casino bet pay-off .

I still haven’t gotten the full answer on why a Insurance company could insure for that much ,without more funds to back a pay out like that .

 
 
 
Comment by Professor Bear
2009-07-19 10:47:22

QUICK VOTE RESULTS

Thanks For Your Vote!

1. Are homes affordable where you live?

Yes, thanks to the housing bust. 24%
Yes, always have been. 26%
No, they’re still too pricey. 50%

Total responses to this question: 40,099

Comment by Professor Bear
2009-07-19 11:35:10

If you want to vote, click on the link then scroll down a page or so and you will find the poll in a sidebar.

 
 
Comment by Professor Bear
2009-07-19 11:16:53

The accompanying graph reveals the flaw in this Faux News analysis. Throw out one outlier (on the right end of the graph) and the coefficient of determination for the regression they use to support their point drops to zero.

Home
States Hit Hardest by Recession Get Least Stimulus Money

FOXNews.com analyzed data tracking how the stimulus money is being given out across the 50 states and the District of Columbia, and it has found a perverse pattern: the states hardest hit by the recession received the least money.

By John Lott
FOXNews.com
Sunday, July 19, 2009

The stimulus bill “includes help for those hardest hit by our economic crisis,” President Obama promised when he signed the bill into law on Feb. 17. “As a whole, this plan will help poor and working Americans.”

But FOXNews.com has analyzed data tracking how the stimulus money is being given out across the 50 states and the District of Columbia, and it has found a perverse pattern: the states hardest hit by the recession received the least money. States with higher bankruptcy, foreclosure and unemployment rates got less money. And higher income states received more.

Comment by Housing Wizard
2009-07-19 20:27:55

The evidence keeps mounting that the public coffers are being looted by the corrupt ,who could give a dam about people that are in real need .
They really must view the working class and poor as pawns in their
Universe .

 
 
Comment by Professor Bear
2009-07-19 11:19:26

Area suicides show heavy toll of recession
Tragedies of four families highlight a larger trend, experts say
By PEGGY O’HARE
HOUSTON CHRONICLE
July 18, 2009, 10:59PM

Harris County suicides increased overall by more than 25 percent between 2006 and 2008, according to the medical examiner’s office, while the county’s estimated population increased by only 3.2 percent. The suicide rate per 100,000 people went from 9.33 to 11.41 during this time — an increase of more than 22 percent.

And the pace isn’t slowing — suicides in Harris County during the first quarter of 2009 are slightly ahead of the number reported during the same period in 2008.

Comment by alpha-sloth
2009-07-19 12:36:31

Damn! More excess housing.

Comment by Olympiagal
2009-07-19 15:12:10

I wish that didn’t make me laugh. That would mean I was a more considerate person, but it did, so I’m clearly not.

Comment by alpha-sloth
2009-07-19 15:23:55

Now you know.

(Comments wont nest below this level)
Comment by Olympiagal
2009-07-19 15:56:18

Yeah, what a surprise*, huh? Hahahaah!

*That’s the jokey part. I actually already knew this about me. Sigh.

 
Comment by Housing Wizard
2009-07-19 20:19:58

Come on ,that was funny .

 
 
 
 
Comment by ecofeco
2009-07-19 13:51:06

As I’ve stated is previous posts, many people are going to find themselves in situations they’ve NEVER experienced in their lives and are wholly unprepared to cope with for many reasons.

The biggest being that they find they were completely wrong about a lot of things, the first of which is that being poor is the fault of…. the poor. They now become the object of their own stigma.

“Judge not lest ye be judged.”

“…because some people are a little slow and make human mistakes. But others are just a$$holes to the bone.”

Comment by alpha-sloth
2009-07-19 16:05:50

+1 Learning you can fu** up too, or even be a victim of circumstance (this is a real phenomenon) is the true beginning of wisdom.

Comment by Silverback1011
2009-07-19 17:30:44

A lot of people can’t take it. They never thought they’d be wrong to that large a degree, and can’t cope with it. Luckily ( I guess ), I’ve already been through losing a business, paying back a couple of hundred thousand in debt from it, a very unpleasant divorce, life with a man who had an untreated personality disorder, job loss, moving 10x in that marriage, some other nightmarish happenings I won’t get into here, living in a slum type dwelling, living in a large mansionish type dwelling, have shopped at very fine stores and at the Goodwill and Salvation Army, know how to scrounge, and make some really knockout chili and cornbread, which can get you through some very tough times, have a marketable skill, and still manage to enjoy myself. So, all of life’s tribulations have definitely made me a tougher, if more cynical, critter. I sure wouldn’t kill myself over some debt. Screw the debt. Life goes on, and sometimes, you can pay it back.

(Comments wont nest below this level)
 
 
 
 
Comment by Professor Bear
2009-07-19 11:24:15

Out of the mouths of bloggers and babes:

Jeff Nielson’s Instablog
Another State descends into Financial Crisis 0 comments
Jul 19, 2009 12:24 pm

As California’s suicidal budget-impasse continues, another large, U.S. state is facing a similar (if smaller) crisis. Pennsylvania announced on Friday that it, too, is reneging on pay-cheques for state workers – with 69,000 currently affected, according to a CNN article.

The overall problem is that with state revenues plunging by close to 1/3rd, and with costs for virtually all state social programs soaring in the U.S.’s Greater Depression, this spending-crunch at the state level is just beginning. Even if, the U.S. economy began some anemic “recovery”, the best-case scenario at the moment, all this would do is lessen the rate of revenue-declines for U.S. states – meaning another round of budget-impasses and spending cuts this time next year.

However, for many reasons there is zero possibility of a “U.S. economic recovery” either this year or next year. The mini-crises of individual states are merely part of a much larger and broader pattern. The problem is that the U.S. chose to turn itself into an unsustainable “consumer economy” (i.e. a borrow-and-spend economy). Because individual Americans are unable to borrow, this means they are also unable to spend.

The plunge in U.S. spending currently amounts to somewhere around $2 TRILLION per year. This total can be broken down into the following categories. First, there is the loss of about $500 BILLION per year in home-equity spending. At the peak, this borrowing-spree reached over $800 BILLION per year. Now, those trillions of borrowed dollars are spent, the home equity that served as collateral is gone, but the debts remain.

Americans must now begin paying back those trillions in home-equity loans, along with attempting to reduce credit-card balances and other forms of debt – as U.S. consumers begin to “deleverage” their own individual balance sheets. This means somewhere around another $500 billion per year in reduced spending.

Then there are the unemployed. Contrary to the outrageous lies produced on an ongoing basis by the Bureau of Labor Statistics, somewhere around 15 MILLION Americans have already lost their jobs – with roughly 2 million more losing their jobs each month (see “U.S. economy to lose 20 MILLION jobs this year”). That is another huge chunk of lost spending.

 
Comment by Professor Bear
2009-07-19 11:40:56

Milwaukee, Wisconsin Journal Sentinel
Watchdog Reports
Easy Money | How the Subprime Market Unraveled
Lenders abandoning foreclosed properties
Benny Sieu

Alton Lewis wants to see the abandoned house next to his home torn down. An order by the City of Milwaukee to raze the building was issued in November 2008 but the building still stands.

‘Walkaway’ properties quickly deteriorate, dragging down borrowers and neighborhoods

By Cary Spivak of the Journal Sentinel

Posted: July 11, 2009

Rodney Lass surveys the house on E. Lincoln Ave. that he thought he had lost to foreclosure last year. The mortgage administrator that sought to foreclose on the property gave up on the effort, however, and Lass remains the owner.

$400,000 - Amount owed on nearly three dozen properties that were foreclosed in the past two years by lenders who didn’t complete the process.
Source: Journal Sentinel research

The Journal Sentinel calculated the amount owed in taxes for walkaways, or orphaned properties, by comparing a database of foreclosed Milwaukee County properties that were not sold at sheriff’s sales to properties being foreclosed by the city. Milwaukee begins foreclosure proceedings - which are separate from the proceedings brought by lenders - when the property has at least three years of delinquent taxes.

Rodney Lass figured his days as a homeowner were over when he was hit with a foreclosure judgment more than a year ago.

He stopped rehabbing his two-story Bay View home and moved on.

But what Lass didn’t realize until recently is that the house remains in his name today.

He’s still responsible for the taxes, upkeep of the property and the mortgage, leaving Lass perplexed.

“Why would I pay for something that I don’t own anymore?” Lass said.

The foreclosure, however, failed to go through after the California-based lender decided it didn’t want the gutted house. Lass said he found out for certain that he still owned it from the Journal Sentinel.

Today, the house at 703 E. Lincoln Ave. sits condemned, holes in its roof, a blight on the working-class neighborhood.

The home represents a growing phenomenon known as walkaways - properties for which lenders sue for foreclosure but never take the title.

For years, lenders complained about debtors who left the keys on the kitchen table and skipped town, leaving it to the bank to file for foreclosure and eventually take title by buying it at a sheriff’s sale.

The latest twist: Now it’s the lenders who are doing the walking, often without telling the borrowers, who may believe erroneously they have already lost title.

“This is just the meanest and nastiest thing (lenders) could do,” said Catherine Doyle, chief staff attorney at the Milwaukee Legal Aid Society. “Even more profound is the terrible damage to the community. All of us are going to have to bail them out.”

Comment by joeyinCalif
2009-07-19 13:56:27

Someone borrows money. Someone lends money. The borrower doesn’t pay it back.

Which party was the stupider?
Which deserves pity?
Which was at fault?
Which was tricked?
Which can be excused?
Which should be bailed out?
Which probably knew what they were getting into?
Which was not prepared?
Which suffers more?

All no-brainers if you first choose who’s side you’re on..

Comment by alpha-sloth
2009-07-19 15:45:42

neither
neither
both
both
neither
neither
both
both
who cares, as long as they suffer

Comment by Professor Bear
2009-07-19 15:52:24

“Which should be bailed out? Neither

Once that is agreed, the rest of the questions are strictly academic.

(Comments wont nest below this level)
Comment by alpha-sloth
2009-07-19 17:15:56

I think the suffering is of utmost importance.

 
 
Comment by Olympiagal
2009-07-19 16:05:10

Goodness, is this wonderful poitry? Because it’s the very best poitry I’ve ever read, if so. Except I think the 7th line down should not be ‘both’, but should instead be: ‘Huh? Nuh-UH!’
Because that makes more sense, given the obvious lack of prescience that has been so widely displayed, and also it stirs things up visually to write it that way.
Oh, and the final line is especially compelling and very pleasing.

So, overall I give an ‘A’ here.

(Comments wont nest below this level)
Comment by alpha-sloth
2009-07-19 16:36:42

Thanks, Teach. Huh? Nuh-UH? didn’t scan. And you know I’m a slave to the iambic pentameter, and answered as the muses demanded.

 
Comment by alpha-sloth
2009-07-19 16:40:13

Thought you’d like the final line.

 
Comment by Olympiagal
2009-07-19 18:40:42

Huh? Nuh-UH? didn’t scan.

I’m going to have to argue with you here. See, in this sort of honest ‘poet peasant’ sort of case it seems clear to me that an honest eruption of ignorance trumps any sort of slithery academic ‘iambic pentameter’ construct.

…You got ‘muses’?! Really! I been dying to catch me some of them! :)

 
 
 
 
Comment by Cassandra
2009-07-20 06:51:15

lol, it’s mean not to foreclose? Oh God please stop, I’m laughing so hard it hurts.

 
 
Comment by Professor Bear
2009-07-19 19:12:59

Bailout Overseer Says Banks Misused TARP Funds
By Binyamin Appelbaum
Washington Post Staff Writer
Monday, July 20, 2009

Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks, according to a new report from the special inspector general overseeing the government’s financial rescue program.

The report, which will be published Monday, surveyed 360 banks that got money through the end of January and found that 110 had invested at least some of it, that 52 had repaid debts and that 15 had used funds to buy other banks.

Roughly 80 percent of respondents, or 300 banks, also said at least some of the money had supported new lending.

The report by special inspector general Neil Barofsky calls on the Treasury Department to require regular, more detailed information from banks about their use of federal aid provided under the Troubled Asset Relief Program. The Treasury has refused to collect such information.

Doing so is “essential to meet Treasury’s stated goal of bringing transparency to the TARP program and informing the American people and their representatives in Congress about what is being done with their money,” the report said.

Comment by Housing Wizard
2009-07-19 19:58:19

Notice how they call for transparency ,after the money has already been spent ,a lot of good that will do . The oversight of the Tarp never had teeth to begin with because it was based on review after the act had been committed . Really ,the Tarp Bill was a insult to any thinking person and the power that was given Mr. Treasury and his Fed Chairman sidekick was unheard of . Is it any wonder that the money didn’t go to the purpose they said it was going for . I knew it ,I knew it all along ,(I read the TARP BILL ).

Apparently the Feds and the Treasury made no requirements as to how the Banks and Investment Houses spent this so called emergency money . You would think that something that was so vital to be deemed necessary ,or there will be a meltdown ,would have a few requirements . Oh no ,taxpayers only give money ,they can’t mess with how to run a Bank .

Comment by Professor Bear
2009-07-19 21:01:24

They will forever claim that the TARP was necessary to avoid Great Depression 2.0, and that the situation would have turned out so much worse were it not for the TARP. How can you question this claim, given there is no data to refute it?

Comment by Housing Wizard
2009-07-20 09:49:57

I can question the claim simply based on some of the pay-outs
that were made . Further i can question the claim in that the Banks didn’t use the money pursuant the way Paulson said was the purpose of the TARP (being to free up credit markets by buying toxic loans ). The banks proceeded to not lend money after TARP ‘injections were made

(Comments wont nest below this level)
 
 
 
 
Comment by Professor Bear
2009-07-19 19:19:23

California budget talks postponed
Posted 19m ago

Gov. Arnold Schwarzenegger is ruling out tax increases, so lawmakers in both parties have been coming to terms with significant cuts in state government, including spending for schools and universities.

By William M. Welch, USA TODAY

LOS ANGELES — California leaders are hoping for agreement this week on how to plug a $26 billion hole in the state’s budget that has prompted it to issue IOUs to cover government bills.

Gov. Arnold Schwarzenegger postponed a Sunday night bargaining session with the top four legislative leaders.

Schwarzenegger spokesman Aaron McLear said the Republican governor delayed talks until Monday because Assembly Speaker Karen Bass wasn’t available until late Sunday.

Bass spokeswoman Shannon Murphy said Bass, a Democrat, was ready for talks and blamed the delay on the governor: “The speaker feels they are close to an agreement and is eager to sit down with the governor.”

The finger pointing and delay is emblematic of the budget dispute that has gripped California for months as it teeters on the brink of fiscal catastrophe.

 
Comment by Professor Bear
2009-07-19 19:21:55

Time Magazine
California’s Crisis Hits Its Prized Universities
By Kevin O’Leary / Los Angeles
Saturday, Jul. 18, 2009

Students walk by Sather Tower on the UC Berkeley campus.
Justin Sullivan / Getty

California’s crisis continues while Gov. Arnold Schwarzenegger and legislative leaders inch slowly toward agreement on the deep cuts necessary to close California’s massive $26 billion budget shortfall. Now, even as the state continues to pay its bills with IOUs, the University of California, the nation’s leading public university, is being forced to cut its budget by $813 million — or 20%. It is highly unlikely that these cuts will be reduced by a budget agreement in Sacramento.

UC Berkeley will see recruitment of faculty drop from the normal 100 positions a year to 10. At 28,000-student UC San Diego, also ranked with Berkeley and UCLA among the world’s top 20 research universities, recruitment has been halted. More than 300 UC scientists have issued a white paper warning Schwarzenegger that the sharp reduction endangers the 10-campus system’s position as the premier public university in the United States and could have a negative impact on California’s future economic growth. According to UC officials, the cut in state funding brings the “amount of state investment in the University down to $2.4 billion — exactly where it was in real dollars a decade ago.” During the same time period, spending on state prisons has more than doubled to $11 billion.

Comment by SaladSD
2009-07-19 22:19:06

Saw a documentary a few years back about the prison industrial complex. Wanton waste and subcontractor pumped up prices for just about everything. I recall a basic chair was extraordinarily expensive, since inmates might use it as a weapon, or, hang themselves on it. yaddah yadda Those stackable plastic chairs just didn’t pass muster. Just like the military, this “industry” is milked for profit at every turn. I haven’t heard much about the prison bureaucracy and staff taking a salary hit.

 
Comment by bill in Los Angeles
2009-07-20 07:38:06

During the same time period, spending on state prisons has more than doubled to $11 billion.

Yes, this is the police state’s priority. Welcome to Fascism.

Now, if the people would only rise up, demand an end to victimless crime laws…Maybe California would not be in such dire straits.

 
 
Comment by Professor Bear
2009-07-19 19:23:59

Battling the Decay of Foreclosures
Gordon M. Grant for The New York Times

DERELICT HOME An empty house on Meade Avenue in North Bellport, N.Y., where four tiny ranch-style houses sit boarded up and vacant in the space of a city block.

By ROBIN FINN
Published: July 17, 2009

THE homes on either side of the decrepit structure at 716 Narragansett Avenue in East Patchogue, N.Y., are delineated by orderly chain-link fences. Their lawns are shorn, their flower beds painstakingly mulched. A parakeet twitters beneath twin sun umbrellas on the rear deck at one home, No. 722. With curtains fluttering in the windows and shiny S.U.V.’s hunkered in the driveways, the two residences are a model of working-class suburbia in repose.

But the decaying ’60s colonial-style house sandwiched between those two prim residences is a dead zone, one of a hundred vacant houses in the Long Island town that are widely believed to have caught the subprime mortgage contagion. Its front yard is a tangle of weeds and buckled concrete walkways, its backyard an illegal dumping ground for opportunistic contractors. In one of the broken second-floor bedroom windows, a child’s Scooby-Doo sheet, an incongruous remnant of happier times, is substituting as a window shade. No one would want to call this place home; no one does.

“It’s no good,” said Yanira Amaya, the frazzled neighbor at tidy No. 722, about living next door to an abandoned eyesore. Hers is not an isolated problem. Travel a few streets east to Meade Avenue in North Bellport, and the desolation is magnified. In the space of a city block, four tiny ranch-style houses sit boarded up and vacant, all presumably victims of foreclosure or its frequent harbinger, the negligence of an owner or investor.

 
Comment by Professor Bear
2009-07-19 19:27:31

24/7 Wall Street
The Government Gums Up The Mortgage Business
Posted: July 16, 2009 at 12:41 pm

The mortgage industry is pointing fingers at the Obama administration Thursday for falsely raising expectations of how the banks can help consumers avoid foreclosure.

What they cannot or will not say is that a public program that benefits a small class of individuals is bound to be hated. And that’s what the administration’s Making Homes Affordable program does.

Data released today by RealtyTrac suggest more than 1.5 million properties received a default or auction notice or were seized by banks in the first six months of 2009, up 15 percent from a dismal 2008. Assuming a conservative average house price of $200,000, that’s $300 billion of home mortgage debt that may need to be reworked in the first half of this year alone to avoid foreclosures, or roughly what’s left in TARP.

One in eight Americans is now late on a payment or already in foreclosure, according to the Mortgage Realty Association. And what has Making Home Affordable done so far to help them? It’s offered longer repayment terms, lower interest rates, and in some cases loan modification to about 325,000 — closer to 1 in 1,000 Americans.

The recovery program to-date has mostly helped those who simply stop paying their mortgages. Meanwhile, it offers nothing to arguably the worst victims of the housing crisis. That would be first-time home buyers in the past two or three years who now have negative equity, and are at risk of falling behind on their payments due to a recent job loss. Consider that it is now taking longer for the unemployed to find work again than it did at any point since 1948.

But the Making Homes Affordable plan does nothing to help those individuals. It only helps those who are employed at low or mid-wage jobs who stretched by taking some of the worst adjustable loans out there.

If it can’t help those who really need the help, and if it can only help 1 in even 100 vs. the 1 in 8 who need it, perhaps money set aside for Making Homes Affordable is more equitably spent elsewhere.

 
Comment by alpha-sloth
2009-07-19 19:42:09

Hey, “honest eruption of ignorance” is my middle name, and I try not to stand in its way.

Muses are a challenge to catch, being flighty and scantily clad. It helps if you’ve been drinking.

Comment by alpha-sloth
2009-07-19 19:44:36

See? I pissed off the muses and they posted me way down here. O so far away from the person (olygal) I was responding to.

 
 
Comment by Professor Bear
2009-07-19 20:58:56

Redfin has a good link with comparative charts and commentary on the Case-Shiller Index for San Diego:

June 30, 2009
Case-Shiller: Price Drops Still Slowly Moderating

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website.

Here are the basic Case-Shiller stats for San Diego County as of April:

April 2009
Month to Month: Down 0.1%
Year to Year: Down 20.0%
Change from Peak: Down 42.3% in 41 months

The following chart shows the San Diego HPI scaled such that the November 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the San Diego HPI was at or lower than it was in the latest data (July 2002).

Prices continue to decline in San Diego, and a 20% year-over-year drop is certainly nothing to sneeze at. However, it is definitely worth mentioning that the trend of decreasing magnitude of price drops in San Diego and LA is also continuing…

To recap, we have seen the following interventions in recent months meant to boost the housing market:

* $8k first-time buyer tax credit
* 4.5% - 5% mortgage rates
* various moratoriums on foreclosures
* numerous federal programs encouraging loan workouts

The apparent result of this host of actions has been a flattening to very slight upticks seen in the chart above, in a month that is historically one of the strongest of the year for the real estate market. I guess you can color me underwhelmed.

And here’s our final chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

 
Comment by Professor Bear
2009-07-19 21:06:46

SPECIAL REPORT Road to Rescue
Manhattan home prices plunge
Huge downturn for co-op and condo owners in pricey housing market. Number of sales ticks up as buyers with money take an opportunity.

By Les Christie, CNNMoney.com staff writer
Last Updated: July 2, 2009: 12:09 AM ET

NEW YORK (CNNMoney.com) — The housing bust has finally clobbered super-pricey Manhattan home prices.

Reports released Thursday by four major New York brokers show that prices cratered during the three months that ended June 30.

Prices fell between 13% and 19% compared with the same quarter last year. The brokers found median prices that ranged from $795,000 to $849,000.

The decline shows a marked turn from the first quarter of 2009, when the year-over-year change in median home prices ranged from a loss of 2% to a gain of 6%.

Another change in the recent period: More people are buying.

The number of sales picked up by more than 28% in the second quarter, according to Prudential Douglas Elliman.

Driving the increase were sales of studio apartments and one-bedrooms, both of which gained market share, according to Jonathan Miller, president of appraisal company, Miller Samuel, which compiles data for Prudential Douglas Elliman.

“It’s value-based shopping,” said Pam Liebman, chief executive of the brokerage Corcoran Group. “People are coming back into the market, but nobody is going to overpay.”

 
Comment by Professor Bear
2009-07-19 21:09:09

Business
Manhattan storefront vacancies at highest level since 2001
Blomberg News
July 17, 2009

When Barnes & Noble Inc. closed two stores on East 86th Street this year and Circuit City Stores Inc. shut another, neighborhood volunteers took the vacancies into their own hands. They sent e-mails to their favorite retailers asking them to rent the spaces.

Manhattan shopping strips from the Upper East Side to SoHo are flooded with empty storefronts. The borough’s second-quarter vacancy rate rose to 12.4% and now stands at the highest since 2001 as rising unemployment and the recession curb spending, according to data compiled by Faith Hope Consolo, chairman of the retail leasing and sales division at Manhattan- based Prudential Douglas Elliman Real Estate.

“The consumer just stopped shopping,” Ms. Consolo said.

More than 15% of the 185 stores on Madison Avenue between 57th and 72nd streets are vacant or about to lose tenants, according to New York-based broker Cushman & Wakefield Inc. In SoHo, 11% of the 551 stores are listed as available for lease. About 9% of the 265 stores on the Upper West Side are without tenants or soon will be.

Rents may fall as much as 23% by the fourth quarter from a year earlier and may continue dropping through 2010 given the pace of unemployment and consumer demand, according to Sam Chandan, chief economist at research firm Real Estate Econometrics in New York.

The average Manhattan asking price may decline to IUS$98.12 a square foot by the end of the year. It was US$109.09 at the end of the second quarter, the chief economist said.

Manhattan still holds appeal. An entertainment company and a restaurant are close to signing leases for 70,000 square feet at the former New York Times building, said Joshua Strauss, a vice president for broker Robert K. Futterman & Associates. In February, Discovery Times Square Exposition signed a 20-year lease for an additional 60,000 square feet, he said.

Private industry employment in the city fell by 91,200 jobs, or 2.8%, in the 12 months through May. New York City’s unemployment rate will reach 9.5% by 2010, leaving 400,000 jobless for the first time since 1993, city Comptroller William Thompson said July 13.

“Reduced daytime traffic due to employment losses will cause tenants to go dark, putting a strain on current owners,” Encino, California-based broker Marcus & Millichap Real Estate Investment Services wrote in a January retail report. “Concern has mounted regarding the health of mom-and-pop and boutique tenants.”

Comment by Professor Bear
2009-07-19 21:11:58

The Business Insider
Clusterstock
Manhattan Real Estate Crashes
Joe Weisenthal|Jul. 2, 2009, 5:44 AM
Tags: Economy, Housing Crisis, Housing, Real Estate, New York

The Case-Shiller numbers indicated that things are getting worse and worse for the New York region real estate market, and now we have Q2 data for Manhattan specifically, and it’s ugly.

According to the 2Q 2009 Prudential Douglas Elliman Manhattan Market Overview, put together by appraiser Miller Samuel, suggests the median price of a Manhattan home, whether it’s a condo or a co-op, fell by 25.6% in the quarter, with volume off 50%.

 
 
Comment by Professor Bear
2009-07-19 21:15:16

US News and World Report
Why Do Home Foreclosures Keep Rising? 6 Things You Need to Know
July 16, 2009 04:54 PM ET

Five months after the Obama administration unveiled a sweeping initiative designed to reach 9 million struggling homeowners, home foreclosures continue to rise at an alarming rate. Foreclosure filings were reported on more than 1.5 million properties in the first six months of the year, a 15 percent increase over the same period of last year, according to RealtyTrac. All told, 1 in 84 American homes—or 1.19 percent—received a foreclosure filing during the period. “We talk about green shoots or about things getting worse at a slower rate, but this is one thing that is getting worse month by month,” says Patrick Newport, an economist for IHS Global Insight.

 
Comment by Professor Bear
2009-07-19 21:23:29

* The Wall Street Journal
* CAREERS
* JULY 20, 2009

As Boom Times Sour in Vegas, Upward Mobility Goes Bust
By TAMARA AUDI

LAS VEGAS — Drew Johnson and his wife, Tina had the life many Americans only dream of: A big house in a swanky suburb, a backyard hot tub, and a $100,000 deposit on a new condo with views of the Las Vegas Strip and 24-hour concierge service.

They did it all on the salaries of a construction-equipment salesman and a cocktail waitress who brought in $1,000 a week in tips alone. But the recession has slashed their incomes by nearly half, and financing for the condo might not come through.

“It’s Vegas,” says Mr. Johnson, who fears he could lose most of his deposit. “We gambled.”

During the boom years, Las Vegas wasn’t just a place where gamblers could hit the jackpot, but where hard-working hotel maids and cocktail waitresses could, too. The city offered something almost no other place in America did: upward mobility for the working class.

Now, that is evaporating.

The recession has jolted Las Vegas in a fundamental way. Like other job-creating cities in the Sunbelt, Las Vegas saw its population, income levels and housing prices surge over the past decade. And like those cities — including Phoenix, Orlando and San Diego — it’s been battered in the bust.

 
Comment by Professor Bear
2009-07-19 21:25:55

Real life slide show version of Leaving Las Vegas

 
Comment by aNYCdj
2009-07-19 21:38:45

Come on $100K is chump change, be a man get 3 jobs and save all your loot, and keep mr johnson inside your pants and in 5 years you will have $100K again.

——————————–
“It’s Vegas,” says Mr. Johnson, who fears he could lose most of his deposit. “We gambled.”

 
Comment by Professor Bear
2009-07-19 21:40:08

As Bernanke and Paulson vigorously strive to claim credit for saving the global economy from financial ruin, other knowledgable commentators are pointing out how the TARP funds were misappropriated and never used to purchase the troubled assets which Paulson claimed would sink the world economy if they remained on bank balance sheets.

Since the troubled asset problem is unresolved, I guess the global economy is still doomed, at least according to the logic that was used to strong arm Congress into agreeing to the TARP.

And I have a question for the writers of this outstanding Op-ed piece: Don’t you realize that transparency is the enemy of Wall Street banksters’ potential scams?

* The Wall Street Journal
* OPINION
* JULY 20, 2009

Why Toxic Assets Are So Hard to Clean Up

Securitization was maddeningly complex. Mandated transparency is the only solution.

By KENNETH E. SCOTT and JOHN B. TAYLOR

Despite trillions of dollars of new government programs, one of the original causes of the financial crisis — the toxic assets on bank balance sheets — still persists and remains a serious impediment to economic recovery. Why are these toxic assets so difficult to deal with? We believe their sheer complexity is the core problem and that only increased transparency will unleash the market mechanisms needed to clean them up.

The federal government then decided to buy the toxic assets. The Troubled Asset Relief Program (TARP) was enacted in October 2008 with $700 billion in funding. But that was not how the TARP funds were used. The Treasury concluded that the valuation problem seemed insurmountable, so it attacked the risk issue by bolstering bank capital, buying preferred stock.

But those toxic assets are still there. The latest disposal scheme is the Public-Private Investment Program (PPIP). The concept is that private asset managers would create investment funds of half private and half Treasury (TARP) capital, which would bid on packages of toxic assets that banks offered for sale. The responsibility for valuation is thus shifted to the private sector. But the pricing difficulty remains and this program too may amount to little.

The fundamental problem has remained untouched: insufficient information to permit estimated prices that both buyers and sellers find credible. Why is the information so hard to obtain? While the original MBS pools were often Securities and Exchange Commission (SEC) registered public offerings with considerable detail, CDOs were sold in private placements with confidentiality agreements. Moreover, the nature of the securitization process has made it extremely difficult to determine and follow losses and increasing risk from one tranche and pool to another, and to reach the information about the original borrowers that is needed to estimate future cash flows and price.

This account makes it clear why transparency is so important. To deal with the problem, issuers of asset-backed securities should provide extensive detail in a uniform format about the composition of the original pools and their subsequent structure and performance, whether they were sold as SEC-registered offerings or private placements. By creating a centralized database with this information, the pricing process for the toxic assets becomes possible. Making such a database a reality will restart private securitization markets and will do more for the recovery of the economy than yet another redesign of administrative agency structures. If issuers are not forthcoming, then they should be required to file the information publicly with the SEC.

Mr. Scott is a professor of securities and corporate law at Stanford University and a research fellow at the Hoover Institution. Mr. Taylor, an economics professor at Stanford and senior fellow at the Hoover Institution, is the author of “Getting Off Track: How Government Actions and Interventions Caused, Prolonged and Worsened the Financial Crisis” (Hoover Press, 2009).

 
Comment by Professor Bear
2009-07-19 22:02:50

Wall Street Journal

* BUSINESS
* JULY 20, 2009

Commercial Loans Failing at Rapid Pace

By LINGLING WEI and MAURICE TAMMAN

The commercial real-estate market, valued at about $6.7 trillion, represents 13% of the U.S.’s gross domestic product. But the recession and scarce credit are pushing more commercial developers and investors into default. Meanwhile, property values continue to decline, and banks are required to record a loss on any troubled real-estate loans where the appraised value falls below the amount owed.

Delinquencies on commercial mortgages held by banks more than doubled to about 4.3% in the second quarter from a year earlier, Foresight Analytics estimates. Rep. Carolyn Maloney (D., N.Y.), who heads the House’s Joint Economic Committee, said she is working with Treasury Department officials on a plan to try to head off rising defaults on commercial mortgages before they cascade into a crisis.

In contrast to home loans, the majority of which were made by about 10 lenders, thousands of U.S. banks, especially regional and community banks, loaded up on commercial-property debt.

 
Comment by Professor Bear
2009-07-19 22:19:19

Will the Chinese credit bubble pop before or after the financial panic ends in the western nations? The growth in lending certainly does suggest they have gone parabolic, with a one-month doubling time!

Jul 19, 2009, 11:45 p.m. EST
Top Chinese bank regulator warns of loan growth risks
By Lisa Twaronite, MarketWatch

TOKYO (MarketWatch) — China’s top banking regulator issued a strongly worded warning over the weekend about the risks of his country’s surge in loan growth in the first half of this year, according to reports.

“(We) must control the risk of real-estate loans,” said Liu Mingkang, the head of the China Banking Regulatory Commission, was quoted as saying by Reuters.

“In the first half of the year, our country’s banking loans expanded rapidly and helped play an important role in stabilizing the economy, but the loans growth has led to accumulated risks also increasing,” he said in a statement dated Saturday.

Liu said banks should strictly follow criteria for granting loans on second mortgages, closely observe capital adequacy ratio standards and ensure the quality of loans.

Chinese banks made 1.53 trillion yuan ($223.9 billion) last month, more than double the 664.5 billion yuan in lending seen in May, according to data released earlier this month by the People’s Bank of China.

 
Comment by desertdweller
2009-07-19 22:19:52

Back to Business
Cashing In, Again, on Risky Mortgages
By PETER S. GOODMAN

Some of the very people who made a killing in subprime mortgages are now offering loan modifications for desperate homeowners, sometimes with unsavory tactics.

NYT 19JUL.

 
Comment by Professor Bear
2009-07-19 22:22:41

Jul 17, 2009, 3:21 p.m. EST
Here’s a switch: Americans who don’t spend
New ‘normal’ of living within means is here to stay
By Jennifer Waters, MarketWatch

CHICAGO (MarketWatch) — Grace Case hasn’t used a credit card in more than two years. She’s given up her cell phone, buying new clothes and toys on a whim, getting her hair colored every month, making big-ticket purchases until they’re absolutely needed and going to concerts — her and her husband’s favorite form of entertainment.

She shops garage sales, uses coupons and never finds her fridge full of leftovers because she stretches every meal she makes.
Obama’s take on recession, recovery

President Barack Obama talks about the recession and his plans to rebuild the economy at a campaign rally for New Jersey Governor Jon Corzine.

Her 3-year-old daughter Emily plays with toys that were bought for 10-year-old Adam when he was a toddler. She grows many of her own vegetables, buys meat in bulk and carpools to work.

“I’m just managing my budget within the parameters of what I have,” she said.

Her frugality was forced upon her when the Fulton, N.Y., accountant lost a $60,000 a year salary in 2006 and faced the frightening truth that she was unemployed with $41,000 of credit-card debt, two car payments and a mortgage that her husband’s machinist salary alone couldn’t cover.

“I didn’t really pay attention to my debt,” she said. “I always thought that I would pay it off later. But later came a lot sooner than I had planned.”

 
Comment by "the writing's on the wall"
2009-08-16 11:54:01

“newly poor or newly rich so quickly forget the sweat equity that they (at one time) and most others put into money-work-savings.
Any ideas? What flaws do you see in my thought process?”
newly poor tend to be disabled (often mentally). newly born-poor tend to be offspring of the previous. IMO, those are the people who self-destructively “riot”.
newly rich are rarely hard-workers, in fact they’re unlikely to be workers at all, since real work is normally poorly compensated in the USA. most rich people in the USA are simply glib & obsessive salespeople. I’ve worked for only one ethical boss/manager/owner. the rest were slime. more than 50% were/are openly proud to be slime. others were either vapidly self-delusionally defensive in claiming virtue, or just attempting to market themselves (albeit crudely).

people tend to be raised in “class perpetuating” environments. there’s a delicate balance(s) between “diversity” and “assimilation”. IMO, class warfare has tilted toward the destructive side during the “reaganomics” era.

there’s another category of social “class”. the gradually semi-rich: middle class person doing useful “brain work” (eg, traffic engineering), who lives economically, and is somewhat lucky with career-long savings.

which suggest the real problem lies within the “defense”. poorly performing customers. poorly performing stocks holders. poorly performing workers. (on average) all economically defend themselves poorly. easily scammed. easily scammed into accepting** a culture/law that makes it easy to scam.

much is due to the underdeveloped ability to conceptualize different conditions, including conceptualizing another person’s conditions. (observe eg, reactions to other’s driving errors, including reactions by those who of course occasionally commit errors)

there’d be some improvement if “everyone” did a year or two of real work. picking tomatoes, cleaning up after demo & grading, “convalescent care”, etc.

** or in the case of dittoheads, enthusiastically promoting scammers culture/law.

 
Name (required)
E-mail (required - never shown publicly)
URI
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post