Bits Bucket For July 27, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Citi ‘milestone’ as Washington takes 34% stake
July 27 2009 00:30 |
The US government is poised to take a 34 per cent stake in Citigroup, increasing both its exposure to and influence over, the troubled financial group following Sunday’s completion of a long-awaited $58bn share offering.
The move is a milestone in a financial crisis that has forced the US authorities to come to the rescue of some of the largest institutions in the country. Citi has been a repeated recipient of government aid and is the only large surviving bank to have had to cede a shareholding to the government.
Will they please carve Citi up into less systemically-risky pieces? I am hoping my children might be spared the need to help fund a future bailout of Megabank, Inc… (I know, the “taxpayer” doesn’t have to “pay” anything, but isn’t an ad hoc rescue of the financial sector an implicit form of taxation on the rest of society, especially when you factor in the drop in the value of so many 401(K)s that occurred roughly coincidental to the rescue?)
Oh PB, why are you always so negative? Look on the bright side, we are all bankers now!
By propping up these monster banks, the government is basically reinforcing their bad behavior, and guaranteeing the same results in the future. I’m starting to believe that a mass “ruthless default” by credit card customers may be the answer. When 10 million people stop paying their credit card bills all at once, these POS’s will die an ugly death.
“…the government is basically reinforcing their bad behavior, and guaranteeing the same results in the future.”
This is known as the moral hazard problem.
Well GrizzlyBear, as customers, it will work. As taxpayers, it won’t.
The customers ARE the taxpayers.
Oh, 34%…seems to be a magic number…
Are we there… yet are we there yet?
Comment by hwy50ina49dodge
2007-08-21 11:28:49
Re: “The Bailout Theory of Redemption”
Remember? (And as Prof Bear noted: include & add with that 34% group… those tax paying US of A renters!)
“Federal aid ‘would come at a cost,’ said Douglas Duncan, chief economist at the Mortgage Bankers Association. ‘It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well?’”
&
“A lot of activities within the private sector, hedge funds, private equity — we are not sure where it’s going and what it’s doing,” said Andrew Crockett, the former head of the forum for central banks - the Bank for International Settlements - and now president of JP Morgan Chase International.”
is the only large surviving bank to have had to cede a shareholding to the government…………
i assume by this statement that all the other “loans” were basically unsecured, meaning the FED would get nothing if the banks and companies ultimately steal the rest of the money and close up shop.
So, what was the deal (based on the transparency we don’t have) I would guess that Ben Bernanke printed up 59 Billion dollars, gave it to Hank, who gave it to TImmy G., who handed it over to CItigroup. For the cash, Treasury takes back 5% of the stock on a company with a net worth of 14 Billion, after the loan.
Then, all the bank “managers” take a few billion in salaries and bonuses, and the business continues to “operate”, on the margin, waiting for more opportunties to fleece the taxpayers.
Does that about explain it?
Oh, i’m sorry, i was mistaken………
they say we got 34%. About 1/3 of the total value of the company? So, what is that number? Does anybody know?
We can’t mark the assets to market. We are hiding all the papers in the vault. What are they worth?
Answer: whatever the FED wants them to be to make the numbers work out in favor of doing the loan to give money to CIti’s “manager” and friends.
Article from the Arizona Republic. Lots of online comments on this article - I for one am all for it!
New law triggers fear for housing
It holds some owners liable for debt, even in foreclosure
A new law passed by the Arizona Legislature that makes homeowners liable for tens of thousands of dollars on homes lost to foreclosure is now the focus of an intense repeal battle.
An amendment to the state’s foreclosure laws, passed in the recent legislative session, was designed to protect small community banks from people buying speculative new homes they can’t sell for a profit.
But the impact of the change is much larger. It makes some homeowners in foreclosure liable for the difference between their mortgage and what their lender can recoup from reselling the house. In the current housing market, the difference is generally more than $100,000 on the typical Valley foreclosure.
Real-estate lobbyists and attorneys for homeowners are working to have the law repealed before the Legislature adjourns after completing its work on the budget. Banks are pushing hard to keep the amendment in place. If the new rules stand, they go into effect Sept. 30.
The new law would affect any Arizona homeowner in foreclosure who has not lived in the home for six straight months. This might include landlords, second-home owners and investors who bought homes hoping for quick resales and big profits. Once the home is sold in foreclosure, the homeowner would have to pay back the remaining value of the loan, minus the proceeds from the foreclosure sale. Currently, Arizona homeowners, including investors, who lose a house to foreclosure take a big hit on their credit scores but aren’t usually required to pay back lenders.
The new law isn’t retroactive, but those facing foreclosure now could be affected if the lender doesn’t foreclose and take back the home until after Sept. 30. Under the new law, lenders will be able to garnish wages and go after other assets to recover the money.
In metropolitan Phoenix, where home values have dropped 45 percent and foreclosures are at record highs, that amounts to millions of dollars.
“This won’t just impact investors. This law will hurt retirees who live in Arizona less than half of the year, or people from the Valley who own second homes up north,” said Tom Farley, chief executive of the Arizona Realtors Association. “Arizona is No. 2 for foreclosures now. If this law isn’t changed, the state could lead the nation for bankruptcies next year.”
Opponents of the new law say it will force homeowners to file for bankruptcy to protect their assets from lenders.
They also believe it will encourage more lenders to foreclose instead of trying to work out loan-modification deals with borrowers.
Some housing market watchers say the change could also deter investment in the state’s housing market, which would be a blow to the economy.
State Sen. Steve Pierce, R-Prescott, backed the legislation, SB 1271. He said in June testimony that the changes to the anti-deficiency statute are to help community banks that lend to investors hiding behind the current laws.
Pierce described scenarios in which investors had speculative homes built but couldn’t sell them and then camped out in them for a few days to claim them as primary residences so they wouldn’t be liable for the lender’s losses.
Under current Arizona foreclosure law, a homeowner doesn’t have to live in a home for a certain amount of time to claim it as a primary residence. In most cases, if homeowners can prove they receive mail at a residence, it’s enough proof of their residency.
Who is protected
The amendment was made to the state’s anti-deficiency law, passed in the mid-1980s, which kept lenders from recovering anything more than the home on a typical residential foreclosure. About two dozen states have anti-deficiency laws. Some small speculators have been using the anti-deficiency law to protect their other assets.
Under the new law, a homeowner must live in a house for six consecutive months to establish residency and to be covered by the anti-deficiency law.
Homeowners who lose a home to foreclosure, and who fail to meet the six-month residency requirement, will be liable for the difference between the foreclosure sale price and the original loan.
For example, if a lender forecloses on a home with a $400,000 mortgage balance and can only resell the home for $200,000, then the borrower still will owe the lender $200,000.
Opponents argue that while the new law may have been aimed at people having speculative homes built in small communities, it will have many unintended victims. Among them: people who bought second or retirement homes in Arizona and are struggling now because of the recession. Most of those people will fall behind on second-home mortgages before losing their primary residence. But if they owe too much on their second homes, lenders could go after their primary homes and all other assets to recoup the loss.
“There won’t be a lot of sympathy for the big investors, but the problem becomes legally working out who is an investor,” said Jay Butler, director of Realty Studies at Arizona State University.
Butler said he was at a meeting last week with real-estate agents who were “shocked” the legislation passed. “Lenders that shouldn’t have made the loans to investors in the first place,” Butler said, “are trying to cover up their own mistakes with this new law.”
Investors at risk
Many blame investors for the Valley’s housing boom that led to the current crash.
During 2005, investors were behind almost 40 percent of all of metro Phoenix’s home sales. Foreclosures started to climb in 2007 when investors couldn’t sell the houses for a profit and let them go into foreclosure.
“There are investors and speculators taking advantage of the (anti-deficiency) statutes,” said Tanya Wheeless, president of the Arizona Bankers Association. “When investors were making lots of money flipping houses, they never called up their lender and offered to split the profits. Now, investors are losing money and trying to hide from their responsibility of the losses.”
Opponents say the new law won’t affect the sophisticated investors who buy homes through limited liability partnerships that protect their personal assets.
Farley of the Arizona Realtors Association admits the broader impact of the legislation was a surprise. “If you have a second home in Flagstaff,” he said, “and fall behind on payments because your spouse has lost their job, lenders can foreclose and garnish your wages and put liens on your bank accounts and your primary home.
“What about parents who buy homes for their children to live in while going to college? If something happens to them in this tough economy, they could lose both their homes. And really, how many second-home owners can show they have lived in their vacation home six months straight?”
Last-minute lobbying
Real-estate lobbyists are working overtime to have the law killed before the Sept. 30 deadline.
A new bill must be written that repeals or reverses SB 1271. However, the Legislature is in a special session, and Gov. Jan Brewer would have to amend the purpose of the special budget session to hear the new legislation. She has amended the session once so far to include renewable-energy credits.
The Realtors Association asked Brewer last week to amend the current session and is looking for a legislator to back a bill to kill the changes to the anti-deficiency law.
If that plan doesn’t work, the new rules could not be changed until next year’s session.
Wheeless said she’s surprised so many groups are shocked by the new rules, because SB 1271 went through full hearings.
“The legislation was fully vetted and out in the open for those who opposed it to weigh in,” she said. “Our intent is to protect homeowners who live in their residences.”
Arizona attorneys are already receiving calls from lenders that want to know about the new law.
“I got a call from an out-of-state lender that is considering holding off on a foreclosure until after September 30,” said Phoenix real-estate attorney Marc McCain. “The lender thinks this investor has the income to pay the mortgage but is walking away from a home because he can’t sell it and just doesn’t want to keep paying for it.”
The new law could also lead to costly lawsuits.
“If the legislation isn’t repealed, it will probably end up being hashed out in the courts between lenders and borrowers,” Butler said. “The typical homeowner probably doesn’t have the money to fight a big lender, particularly if they are already facing foreclosure.”
Sounds good to me since it affects non-primary residences. But I’d rather see any money paid back going to dealing with foreclosure-related problems rather than to greedy lenders.
I have had some time to think about this article and it seems to me we may see some “investors” with multiple properties mail in the keys to the bank before the September date. It just seems logical to me - anyone else?
What about a law that puts a lien on title to pay off outstanding HOA dues? As an Association member it makes no sense to me that we are paying for the water/gardening/insurance/etc to maintain a unit in foreclosure, hard costs!, and yet this cost is not attached to the future ownership of the home. So, if a homeowner goes into foreclosure, files bankruptcy, doesn’t pay their HOA fees for months, this money ends up being sucked up by HOA members in good standing. Why can’t there be a law that basically states that when the bank or whomever takes over the property these outstanding HOA fees are part of the transaction costs?
Check with your HOA. My mom was on the board of her HOA, and they did file a lien against an owner who didn’t pay the HOA fees. They actually foreclosed on the property because the dues were so far behind.
AZgolfer,
Thanks for sharing that. Well worth the read. Again, I’m going to get behind any efforts to reign in rampant out of control speculation. As usual, the REIC argument is weak and self serving.
I don’t know necessarily what they’re proposing will in any be the answer, but if the NAR prefers the status quo, effect changes that make them the most unhappy.
Seem like a good law, but it shouldn’t be applied to houses purchased before the law comes into effect.
“What about parents who buy homes for their children to live in while going to college?
Low-hanging fruit anyone?
Right across the street, there’s a house that fits this description.
It was purchased in ‘04, and, yes, Darling Daughter did live there for some of the time while she was in college. (Now and then, romantic interests caused brief relocations to other addresses. And, invariably, she’d move back to her castle across the street.)
She moved out in May, and the family is attempting to fix the place up. But, judging from the pace of the renovations, they seem to be a bit short in the cash department. And, sorry to say, Darling Daughter and the roommates she rented to really made a mess out of the place.
And, that, people, is the downside of buying/renting for the students. They really know how to run a house down. Which means that when it comes time to sell, you’d better be ready to lay out some major money to bring the place back up to snuff.
If she were my kid, I would have told her to get a place in the dorm or find an apartment.
Arizona Slim,
As Ben has pointed out in the past, 2nd/vac./student homes were just another excuse to speculate. In Portland the M.O was lofts/condoze while Jr. was in school in the hopes that prices would have continued unabated enough to pay for said education.
And yes, just look at “their” room when they lived at home and multiply by the entire sq. footage of the dwelling to get an idea how trashed things can become.
You’ve hit the nail right on the head, DinOR. And, unfortunately for the folks across the street, speculation appears to have been their Plan A, B, and C.
Since that dog no longer hunts, they’re going the DIY route to fix the place up to sell, and, sorry to say, their talents lie elsewhere. They’re not very good at DIY repairs/renovations, and it’s becoming painfully obvious that they don’t have the money to hire the pros.
Same article’s in the Tucson paper. And, if the online comments are any indication, the flippers are gonna get their comeuppance. Bigtime.
Oh the horror! I’m going to have to either live in my house 6 months or pay my loan?
The changed AZ law appears to be similar to existing CA law.
California Code of Civil Procedure sec. 580b states in pertinent part:
No deficiency judgment shall lie in any event after a sale of
real property or an estate for years therein for failure of the
purchaser to complete his or her contract of sale, or under a deed of trust or mortgage given to the vendor to secure payment of the balance of the purchase price of that real property or estate for years therein, or under a deed of trust or mortgage on a dwelling for not more than four families given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of that dwelling occupied, entirely or in part, by the purchaser.
So you have to occupy the dwelling to qualify for non-recourse status.
And whats WRONG with that???
If you are an “investor” well …you take the full risk…..duh!
——————————————————–
So you have to occupy the dwelling to qualify for non-recourse status.
Something like 38 states are full recourse, and it doesn’t matter if its your primary residence and you’ve lived there for six months, so I am not seeing the big deal here either.
Problem is no one was checking to see if it was a Primary Residence. Heck I’ve read on this very Blog of “Investors” who had a dozen Primary Residence.
They got a better interest rate that way. They were being all Savy Like. Or was it all Fraud Like. Let the Banks burn for making these Loans.
OC Bear,
Yahtzee!
Again, these are measures ( common sense ) measures that could and ’should’ have been a breeze to implement and monitor.
If you’ve ever wondered what the country would like like if every stadium and HS gym were filled to capcity with freshly minted seminar wanna’ be investors all unleashed with butt-loads of borrowed money would look like, wonder no more.
How hard would this have been to nip in the bud? It obviously wasn’t in lender’s best interests to do so?
How hard would this have been to nip in the bud? It obviously wasn’t in lender’s best interests to do so?
Their business model was to make loans, not to make loans that could be paid back.
Right, and just ask Washington Mutual what it was like to -completely- lose sight of your business model and become a “Loan Store”.
Again though, I think we spend too much time analyzing this at the nat’l level when this should have been monitored at the state level. Hank Paulsen said as much in the early hours and… no one on CH wanted to hear it?
I’m pretty sure ‘just getting mail at the address’ works in California, just like it worked in AZ before they ammended the law a little.
And really, six months? The horror! I can’t believe these whiners.
sfbb,
Right, a bill from the cable company.., just ‘anything’. Magazine subscription, whatever..?
See, everyone here loves to ramble on about how ‘evil’ the Fed is and whatnot but one of the delays they had rolling out of the gate to address these issues was.., they didn’t even know what a specuvestor was?
It ( apparently ) never dawned on them that fine upstanding Americans would game the system, the IRS, their lenders, their neighbors, regulators and ultimately, taxpayers! The whole notion of “primary residence” didn’t surface until after we’d already thrown a few hundred bil. at this.
Every system humans come up with gets gamed until it implodes. Governments, countries, banking standards, voting laws, etc.
People in general are creeps. Thank goodness there are a few in specific that make living in a creep world bearable.
Milestone must be a typo, I think you mean millstone.
You have problem with Corporate Communist Capitalism©®™, comrades?
Maybe time in financial Siberia change your mind, yes?
Spitzer: Federal Reserve is ‘a Ponzi scheme, an inside job’
By Daniel Tencer
Published: July 25, 2009
The Federal Reserve — the quasi-autonomous body that controls the US’s money supply — is a “Ponzi scheme” that created “bubble after bubble” in the US economy and needs to be held accountable for its actions, says Eliot Spitzer, the former governor and attorney-general of New York.
In a wide-ranging discussion of the bank bailouts on MSNBC’s Morning Meeting, host Dylan Ratigan described the process by which the Federal Reserve exchanged $13.9 trillion of bad bank debt for cash that it gave to the struggling banks.
Spitzer — who built a reputation as “the Sheriff of Wall Street” for his zealous prosecutions of corporate crime as New York’s attorney-general and then resigned as the state’s governor over revelations he had paid for prostitutes — seemed to agree with Ratigan that the bank bailout amounts to “America’s greatest theft and cover-up ever.”
Advocating in favor of a House bill to audit the Federal Reserve, Spitzer said: “The Federal Reserve has benefited for decades from the notion that it is quasi-autonomous, it’s supposed to be independent. Let me tell you a dirty secret: The Fed has done an absolutely disastrous job since [former Fed Chairman] Paul Volcker left.
“The reality is the Fed has blown it. Time and time again, they blew it. Bubble after bubble, they failed to understand what they were doing to the economy.
“The most poignant example for me is the AIG bailout, where they gave tens of billions of dollars that went right through — conduit payments — to the investment banks that are now solvent. We [taxpayers] didn’t get stock in those banks, they didn’t ask what was going on — this begs and cries out for hard, tough examination.
“You look at the governing structure of the New York [Federal Reserve], it was run by the very banks that got the money. This is a Ponzi scheme, an inside job. It is outrageous, it is time for Congress to say enough of this. And to give them more power now is crazy.
“The Fed needs to be examined carefully.”
Spitzer resigned as governor of New York in March, 2008, after news reports stated he had paid for a $1,000-an-hour New York City call girl.
At the time, Spitzer had been raising the alarm about sub-prime mortgages. In the wake of the economic meltdown triggered last fall by sub-prime loans, some observers have suggested that Spitzer may have been targeted by law enforcement because of his high-profile opposition to Wall Street financial policies.
Investigative reporter Greg Palast wrote that federal agents’ revealing of Spitzer’s identity as a call-girl customer was no coincidence.
Palast wrote that the principle of “prosecutorial discretion” is often used to keep the names of high-profile persons out of the media when they are tangentially linked to a criminal investigation. In the case of Spitzer, the Justice Department chose not to invoke prosecutorial discretion.
Funny thing, this ‘discretion.’ For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him in diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.
Naming and shaming and ruining Spitzer – rarely done in these cases - was made at the ‘discretion’ of Bush’s Justice Department.
Spitzer recently told Bloomberg News that President Obama’s regulatory reforms of the financial sector are “irrelevant” because regulatory agencies have not been enforcing corporate laws to begin with.
“Regulatory agencies already had the power to do everything they needed to do,” he said. “They just affirmatively chose not to do it.”
” Funny thing, this ‘discretion.’ For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him in diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.
“Naming and shaming and ruining Spitzer – rarely done in these cases - was made at the ‘discretion’ of Bush’s Justice Department.”
There’s that word again: Louisiana
There’s that “other” word again: “compassionate conservative”
Thanksgiving dinner with the “TrueBeliever sibilings” …so much to discuss in such little time…
Ya know, Spitzer is a useful sort of person. He did a great job prosecuting all sorts of nasty stuff on Wall Street. Is there any way to use him in a manner that benefits society without also approving of his hypocrisy? Maybe he should go back to working for prosecutors or even regulators, but also have to wear a big scarlett “J” (for john) on his chest to remind him of why he doesn’t get to hold real power, only inform those who actually have it? Perhaps an embarrassing title (associate assistant to the under debuty for strategy) would be enough….
Accept the fact that he is a dude?
I’m okay with it. As long as he isn’t wearing diapers.
“…Spitzer is a useful sort of person.”
So is Barry Minkow…that’s what the SEC needs…a Dynamic Duo!
Is this even a question of Spitzer’s “hypocrisy” or a question of this society’s selective “morality of convenience”?
The man paid for a service in a transaction that involved two consenting adults. The fallout within his family is a personal matter and shouldn’t even be in the public discourse.
Once again Amerikuns get all worked up about “morality”. But where’s that Puritanical zeal when Benny boy goes on the tube with vague and empty predictions about the strength and timing of the eventual recovery?
IMHO, the man (Spitzer) hurt no one except his family - and that’s a private matter. Meanwhile elected officials are playing grabazz all over the Hill on our dime.
exactly. It’s decades past time for America to get over this dark age religion/femi-nazi war against consensual relations when most developed countries doen’t criminalize prostitution.
Spitzer did nothing wrong.
Umm…I think you will find that the femi-nazi actually agree with you on this point Bill.
A lot of very, very powerful people probably hate Spitzer.
Hence the manufactured outrage over his use of a prostitute.
Bill,
Not all parties to the “transaction” were consenting. Spitzer’s wife was most definitely harmed. Personally, I think cheating comes second only to murder as far as causing harm to another person. You seem to have absolutely no clue how much it can harm not only the spouse, but the children, friends, relatives, etc.
When a man or woman abuses or murders his/her spouse, is that not a crime because it’s “a private matter” between the husband and wife?
Again, just because you, personally, don’t believe in marriage, committment, honesty, fidelity, integrity, etc., doesn’t mean that it’s unimportant to others.
I am not sure whether or not Elliot Spitzer cheated on her. A married man having an extramarital affair is not necessarily cheating. Some wives are happy their husbands get satisfaction from someone else as long as they are still loved.
You and the other Cro Magnon Bible thumpers do not realize having a mistress is no big deal in France and Italy, as well as other nations. At his funeral, Francois Mitterand’s wife and his mistress both attended.
America has far to go to get rid of its puritanism.
Um, Bill…have you ever seen me “Bible-thump”?
What idiots choose to do (in Italy or France, or anywhere else) has no bearing on my own choices.
If **you** prefer a swinger’s lifestyle, nobody else should be able to stop you or your willing partners. If **I** prefer to have a monogamous relationship, then nobody should be able to stop me, either. In most marriages, BOTH partners usually take vows and promise to be monogamous.
You might never grasp this, Bill, but there is a reason for monogamy. There is almost zero risk for STDs and unwanted pregnancies (whoever doesn’t want the pregnancy is responsible for making sure it doesn’t happen, BTW — if you don’t want kids, get a vasectomy and use a condom). In addition to this, there is the very real concern for the children that result from the relationship. In a monogamous relationship, the father knows the children are his, and the mother knows her children are more likely to be cared for if her partner isn’t busying himself with trying to find new lovers, and produce more “competition” for the family’s resources.
Personally, I have no problem with polygamy, if ALL parties freely make that choice. The problem with **cheating** is that someone is usually breaking their vows (which mean more than a “legal” contract to most married people). There is an assumption that both partners will be faithful.
If either partner wants to have an open relationship, he/she should make that clear on the first date. That way, everyone is fully informed and can make the right decisions for themselves. You do fully inform your dates of your beliefs and intentions before engaging in a physical relationship, right, Bill?
Personally, I don’t care all that much about the nature of the offence. The issue is that elected officials entrusted with enforcing the law have a responsibility to obey it, even if they think a particular rule is stupid or inconvenient.
My comment was mostly aimed at the reality of the situation. He isn’t going to be elected or appointed to anything high level. Not anytime soon. And he is particularly knowledgeable about the things that are going on and need oversight these days. I was speculating (humerously, I hope) on what might be needed to get him back where he can do something useful without getting the folks who need his help in trouble.
You’re exactly right about getting him back into service - he is useful and talented. But he should return with his head held high and no shame whatsoever.
After all, at least he wasn’t playing footsie in the men’s room or harrassing capitve interns.
But he should return with his head held high and no shame whatsoever.
I’m going to leave that one alone. It’s too early on a Monday to comment.
Harrassing adult interns who want to be harrassed is a rotten thing to do, but not illegal. I’d hope you would have to go at least one step beyond shoe tapping to actually get convicted of solicitation (he pled out rather than face a trial). But Spitzer did violate the law. Even if he should not be humiliated by his desire for extramarital sex, he should be embarrassed that he decided to do it in a way that is illegal. There are other ways to get extramarital nookie. They are more likely to result in public exposure than the route he chose. Of course, his relatively safe choices didn’t prevent him from getting caught, but he chose to violate the law to limit his chance at being exposed. Bad bet. And still illegal.
Umm guys and gals, I agree with Polly. He was representing the law. prosecuted people using the law, and he broke the law by having sex with prostitute.
If he was having an affair with someone outside the marriage (no payment involved) then I would agree this would be between him and his wife.
I believe the interns he is talking about are the pages that serve Congress and are under 18.
Nobody calls Senate pages “interns.” They are pages. People with newly minted masters degrees sometimes get work as Presidential Management Fellows. They used to be called interns. The program changed its name. Did the pages change their name after the last scandal?
There is a thin line in terms of illegality when it comes to saying sexual things to an underage person. My recollection is that the most recent page scandal was clearly inappropriate (also just down right disturbing) but may have fallen a little short of illegality. Did the guy ask for pictures? Touch anyone? I don’t remember that, but I didn’t pay all that much attention to it at the time.
polly,
And while I’m not getting on a soapbox here, there were other parties hurt by ES’s actions. His call girl for one. We need to at least try to move toward a society where males aren’t encouraging ( and p-a-y-i-n-g ) for this type of “arrangement”. ( I know I’m not the only dad here? )
I think it’s a large part of what keeps the smut industry going. In principle, those of an inclination should only need about 40 hours worth of filmed s*xual activity. ( Depending on the viewer’s… preferences )
Why do we ‘need’ a constant FLOOD of new material? Why do we have to keep ruining younger people’s lives for our own cheap thrills? How much smut is enough, and why is it so important for these people to have a ‘fresh’ supply of skin?
Look, I’m not saying that I want my young female relatives to grow up to be call girls. Far from it. But there is something a little different about crimes that are only crimes when they are paid activities, but would be ignored by the law entirely if no cash was involved.
His behavior is far from admirable, but the reason he is disqualified from high office is because he was entrusted to enforce the laws he broke, not because the woman who provided the service may be harmed emotionally by her illegal job.
polly,
Fair enough. And I wasn’t rushing to her defense either? I think she knew what she was doing ( and had a pretty expensive lifestyle to boot )
Neither of the two went to jail, so what was the purpose again?
Except he was the the former Att. general for NYS, before becoming Guv. He was prosecuting prostitutes and johns while he was, presumably, a John himself.
that depends
I always thought Patterson was just a seat warmer so that Spitzer can run again next year for Governor.
“Federal Reserve is ‘a Ponzi scheme, an inside job’”
Is this why the Fed is so mortified over the prospect of a GAO audit?
Once we all read the match king, I suspect our posts will be enlightened regarding WS, past,present and future.
Rturning mine to the library today.
116 temp high. Someone want to visit? Ice cubes melted in 5 minutes-inside house.
And Polly, don’t pedophilia laws include ’suggestive emails’ to minors under 18?
No clue. Never took that class. How suggestive do they have to be? Is “hey, you look pretty sharp in that lacrosse uniform” enough? I just don’t know.
That’s definitely over the line, Polly. Report to the nearest offender registry at once.
Re heat: If I owned a gun, I’d point at the sun and shoot it out of the sky. At least in my imagination.
That article pretty much says it all. Maybe Spitzer getting busted is a good thing. If he had kept rising within the system, he may eventually have been co-opted. Now, he’s pissed off and has nothing to lose. I wish Obama’d invite him to the White House for a beer.
Dylan Ratigan seems a straight shooter too. I know everyone hates on CNBC here, but the show he hosted, “Fast Money”, is certainly no DCA rah-rah show-quite the opposite. Dylan was constantly questioning when anybody important would get prosecuted in this whole mess, and when he first left the show, I assumed he’d been muzzled. Turns out he got a promotion of sorts and he’s using it well.
I’ve been watching his new morning show “Morning Meeting” over on MSNBC, and am liking it a lot.
He’s pretty honest he thinks the whole thing was a cluster$%& and has on guests that speak against the conventional wisdom.
Oddly enough, Spitzer is a frequent guest there.
Spitzer’s a frequent contributor to Slate magazine, too.
he’s pissed off and has nothing to lose.
He’s has specific knowledge and is a good public speaker. He’d be a great one to rally the electorate to do something (finally) about the Federal Reserve and the Bezzle. The amount of economic pain the electorate feels rises with every foreclosure, bankruptcy, layoff, expiration of unemployment benefits, etc.
I have always been impressed with Spitzer’s mind ,that guy is really sharp ,to bad he got stupid on the side thing .
I also get the impression that he is pissed off ,and some people think that Wall Street was out to get him .
““Fast Money”, is certainly no DCA rah-rah show - quite the opposite”
It wasn’t when Raitgan hosted it. But since they’ve got rid of Mackie, it has become another CNBC cheerleading squad. I rarely watch it anymore for that reason. Will check out Ratigan on “Morning Meeting”, though.
I agree. The new hostess is likeable enough, but she’s in over her head with that crew and can’t really control the tempo and direction of the show. Still, the point of the show is to take your profits short-term, and most people on it are real traders who are way more candid in their opinions than the regular on-air cheerleaders.
“most people on it are real traders who are way more candid in their opinions than the regular on-air cheerleaders.”
True, but Mackie was still my favorite. Loved it when he’d get fired up. He was the best when someone would bring up GM. IIRC he was saying a year ago they’d go under, and he’d get all fired up about it.
I’m long gone too. Once I realized they were giving Dennis Kneale more air time that was it.
Why’d Mackie get the boot?
Probably for telling the truth too much. (I agree the show is a shadow of its former self, but they seem to be playing with the line-up, maybe they’ll get it right.)
Mackie litterally had a what appeared to be a melt down on Neal’s show one night… a couple of days later he was gone. google it, you’ll see
the process by which the Federal Reserve exchanged $13.9 trillion of bad bank debt for cash that it gave to the struggling banks
That is the ultimate “Cash-For-Clunkers” program.
+1
In theory, a lot of this Fed “Cash-for-Clunkers” program is structured as repos, so the banks should get their cr*p-tastic assets back down the road a spell, when in theory they should be solvent enough to deal with it.
Of course, the difference between theory and reality is larger in reality than it is in theory.
The Match King.
SEC came about after his time.
Spitzer is wrong.
They knew EXACTLY what they were doing.
We should have surmised that Citi would fall onto hard times when they bought the naming rights to the NY Met’s new stadium back in 2006.
Let’s add Citi to the roster of companies that were jinxed by stadium naming rights deals-
Enron Field in Houston,
CMGI Stadium in the Boston area,
PSInet Stadium in Baltimore,
Adelphia Stadium in Nashville…
I’m sure I’ve missed more than one.
Wrigley Field
Pro Player Stadium (Pro Player went bankrupt in 1999)
(P.S. I can’t believe it’s now “LandShark Stadium”. LOL at that one.)
UAL, does it have a stadium anywhere? BK 2x.
United Center–home of the Bulls and Blackhawks
United Breaks Guitars
At least that took a hundred years or so. But then, there’s the Curse……
How about the entire 1982 Knoxville World’s Fair? Commonly called “Jake’s Fair” at the time due to the heavy sponsorship/involvement of banker Jake Butcher, whose subsequent demise due to banking fraud is often cited as the beginning of the savings & loan crisis of the 80’s. (There’s that decade again.)
With the spectacular Wigsphere.
+1 Dirtdog!
US Air arena? A questionable case since it took ‘em ~10 years to go bankrupt. But they went bankrupt twice, so maybe that makes up for it.
Bird’s Nest might end up laying an egg. Don’t wish to ruffle any feathers but the infatuation with stadia goes back to the Romans. And we know how that party ended.
at least the Bird’s Nest looks cool- that puts it ahead of almost every other stadium
The Fleet Center in Boston
In case my longer post does not survive the filter system, here is a snippet from a tour de force article by Chris Mayer on the Daily Reckoning blog.
Beyond Subprime
By Chris Mayer
07/22/09 Gaithersburg, Maryland
We have mountains of debt to work through yet. The last bubble was one for the ages. We’ve all heard stories of one kind or another…
There was the glass cutter who earned $5,000 per month, pretax. WaMu gave him a $615,000 home loan with payments of $3,600 per month.
There was a house – a shack, really – that appraised for $132,000 and got a mortgage of $103,000. The owner hadn’t worked in 13 years. Upon foreclosure, a neighbor bought the house and paid $18,000 just to tear the thing down.
And the most eye-popping of all: A house in Fort Myers that sold for $399,600 on Dec. 29, 2005 – only to sell for $589,900 on Dec. 30, 2005.
America, it seems, just went crazy – borrowers, lenders, nearly everybody. These anecdotes and others are told in a new book titled More Mortgage Meltdown by money managers Whitney Tilson and Glenn Tongue.
…
What about the Central Valley strawberry picker with a $20K annual income who managed to borrow $700K+ to buy a house? Wasn’t that pretty eye-popping?
And the most eye-popping of all: A house in Fort Myers that sold for $399,600 on Dec. 29, 2005 – only to sell for $589,900 on Dec. 30, 2005.
LOL - given that Ft. Myers has seen perhaps the absolute worst price drops in the nation - down about 75%, I wonder what that house would sell for now?
Now, now, now. My recollection was that the strawberry picker made $17,500 per year but there were two adult pickers in the household so they made $35K total.
20x income is bad enough.
Just for old time’s sake…
Minorities Hit Hard by Foreclosure Crunch
May 3, 2007
By Anthony Ha
Rosa and Alberto Ramirez stand in front of their home, which they purchased with a subprime loan and may now lose.
Photo by: Nick Lovejoy, Staff Photographer
Hollister - Despite making only $14,000 a year, strawberry picker Alberto Ramirez managed to buy his own slice of the American Dream. But his Hollister home came with a hefty price tag - $720,000.
A year and a half later, Ramirez has defaulted on his loan, and he’s hoping to sell the house before it’s repossessed. And according to many housing advocates and civil rights groups, Ramirez is not alone. As mortgage foreclosures rise, many minorities are suffering.
…
Sorry to say, but there’s a lot of affinity fraud involved in this. There are, shall we say, less than ethical people within any group. And, to perpetrate their nefarious schemes, they choose others within their group.
It’s not just minorities. This also happens in churches. And social clubs. Et cetera. And so forth.
You have just summed up the state of the union and why seemingly stupid and criminal people are running things at all levels.
Minorities hit hard….
Ahh the media bias. Reminds me of my favorite Onion-style headline: “Terrorists Nuke New York - Women and Minorities Suffer Most.”
Don’t forget this one from Florida:
http://www.palmbeachpost.com/business/content/business/epaper/2008/09/04/a6b_mortgagefraud_0905.html
“The ring also enlisted straw buyers, such as the part-time Publix cashier whose income on loan applications was inflated from $13,000 to $344,000 so she could qualify for $1.3 million in loans on a Boca Raton home.”
An itinerant house-painter bought my San Jose house for $670K, 102% financing. What do you think a painter makes in SJ? $40K?
Not sure what a “Publix cashier” is ( but the $13,000 income I get! )
Again, I think this shows amply that any safeguards that should have been in place went completely out the window. I know we prefer to hammer on AG etc. but what went so terribly wrong that anyone that called themself a mortgage broker was basically able to rubber stamp loans of this magnitude?
Where were the STATE regulators?
It’s a cashier that works at a grocery store called Publix.
And where was the quality control that Wall Street should of exercised in passing on these pools of loans as AAA
investments ,that where rubber stamped by the Rating
Agencies ?
How to recycle a Winnebango…and sell hot dogs, ribs & cheap industrial beer…Filed under: “How Americans think outside the box”
http://www.ocregister.com/video/index.php?bcpid=1127694947&bclid=1125901233&bctid=30792128001
So we are back to destruction derby’s for intertainment in the OC eh ?? Maybe there is some hope…
So is Bernake’s media tour simply to get himself re-appointed Fed Chairman, or does he have another motive?
well, given that Ron Paul is finally getting some movement with the Audit the Fed, then ABOLISH IT, and……….Eliot Spitzer and a bunch of other people are actually getting airtime to say that everything this buffoon has done is absolutely WRONG.
And the Bernanke, just like Greenspan was totally unable to see the consequences of flooding the marketplace with cheap money, a la, “SUBPRIME IS CONTAINED”, “the housing market has bottomed”, “Securitization is new and innovative money managment”, etc, etc,
this is about saving face and presenting the American public with the lie and the image that the FED is the faithful watchdog of our money and credit systems, rather than a bunch of slimeball banksters robbing us blind while they live in unbelievable luxury.
CBS News
Politics
July 27, 2009
Fed Has Few Fans, Poll Finds
Federal Reserve Garners Lowest Favorability Rating Among U.S. Agencies, Poll Finds; CDC Tops List
(CBS) The Federal Reserve probably won’t be voted the “prom king” of government agencies any time soon, if a new Gallup poll is any indication.
According to a July 10-12 poll, the nation’s central bank scored the lowest rating among nine government entities - with just 30 percent of those polled giving it an excellent or good rating and 22 percent saying it has performed poorly.
The new scores represent a significant drop from September 2003, when the 53 percent of respondents rated the Fed’s performance as excellent or good, while just 5 percent found it to be poor. The Fed’s role in the nation’s financial crisis is likely the driving factor behind the erosion of public confidence.
The Centers for Disease Control and Prevention, making news this year for its response containing the H1N1 outbreak, tops the list with 61 percent rating their performance as excellent or good. NASA, amid commemorations of the historic moon landing 40 years ago, followed closely with a 58 percent rating. The FBI scored 58 percent as well.
The Food and Drug Administration, which came under fire in the past year for its handling of a lethal salmonella outbreak, was second from the bottom, with just 38 percent of respondents giving them a positive rating.
The middle tier of agencies included the CIA, Department of Homeland Security, Environmental Protection Agency, and IRS, with respective excellent/good ratings of 47, 46, 42 and 40 percents.
…
“….The real reason we’re in a depression is because businesses and individuals borrowed too much and invested it poorly. Economist Murray Rothbard explained that a depression is the recovery stage:
“The liquidation of unsound businesses, the ‘idle capacity’ of the malinvested plant, and the ‘frictional’ unemployment of original factors that must suddenly and en masse shift to lower stages of production – these are the chief hallmarks of the depression stage.” Can’t Print Prosperity
What’s supposed to happen after a debt-based boom is a correction. Painful as it is, mistakes have to be corrected. False balloons have to be popped and strong hands must replace weak ones. But the federal government is doing its damnedest to prevent the economic correction from occurring. It would have only taken a couple of years. Thanks mainly to Congress this correction will stretch well into the 2nd decade of the 21st century.
Correction:
Congress gave out 800 Billion dollars. Ben Bernanke and Hank Paulson, and Tim Geithner have illegally made up all kinds of lending programs that indebt the taxpayer and made us responsible for the “payouts” of money by the FED.
By what right does Bernanke come up with all these various programs? Did he get congressional approval? NO. He just made it up and did it, with the Treasury “officials” complicit in the robbery. Who is holding these people accountable?
ABOLISH THE FED. Fire Bernanke, and Geithner and begin CRIMINAL investigations, somewhere on the lines of treason, for bankrupting our government through the banking system.
diogenes,
Here’s what’s worse. If only their calculations req. to correct this debacle were even vaguely accurate! If the cost to each and every taxpayer was 10 grand ( or whatever they’re claiming )… let me whip out my checkbook!
I’d be only too happy if it meant we could go back to 1995? But it won’t. Not even close. My estimation is that ( in the form of reduced services and opportunity for ourselves and our children, along w/ taxes ) it will cost us that much PER YEAR! Oh, each and -every- going forward.
Ben Bernanke and Hank Paulson, and Tim Geithner have illegally made up all kinds of lending programs
Congress did pass a law signed by Pres Bush that made all of this legal back in Sept. ‘08.
And was that law Constitutional, in anything other than a Kangaroo Court?
And was that law Constitutional, in anything other than a Kangaroo Court?
If the law were to be challenged, would I want the Supreme Court exposed as a fully Kangaroo Court?
Good luck finding someone who has standing to challenge the law.
But the federal government is doing its damnedest to prevent the economic correction from occurring. It would have only taken a couple of years. Thanks mainly to Congress this correction will stretch well into the 2nd decade of the 21st century.
Even if there were a concerted effort to do so, would it be possible to work through this mountain of debt in only two years? Is it possible to unwind something that massive, something 30 years in the making, in only two years? However I do agree that the efforts to date will mainly delay the inevitable.
SDGreg,
Two (2) years? If only! Maybe we can have an elective box on your tax return that says:
Would you like to make a donation to the Save America Fund?
Your spouse? Check here ____.
I was talking to a fairly sensible realtor last week and she said a fair amount of damage ‘could’ have been avoided had only builders ‘tweaked’ their business model only slightly. By putting in laminate counters ( vice all the granite ) going w/ sensible cabinets and leaving the sheet rock out of the garage and going with more modest floor coverings, think of the damage we could have been spared? But NOOOO!
I was talking to a fairly sensible realtor last week and she said a fair amount of damage ‘could’ have been avoided had only builders ‘tweaked’ their business model only slightly. By putting in laminate counters ( vice all the granite ) going w/ sensible cabinets and leaving the sheet rock out of the garage and going with more modest floor coverings, think of the damage we could have been spared? But NOOOO!
I’m not sure how taking out $10k in materials makes up for the $100k the builder overpaid for the land. Weren’t those extras just one more way for builders to mark up even more the price of an overpriced house? That business model needs to be blown up, not tweaked.
SDGreg,
Well.., that’s been ‘my’ bone of contention for a long time. It was a LAND bubble! But even though the air conditioning, RV parking slab and other amenities don’t really add up to a whole lot on the builder’s side cost-wise, they translated into ever bigger loans on the retail side. In fact, many of the mark-up items I saw being thrown in the marketing mix, weren’t anything you or I couldn’t do -ourselves- on a weekend project basis?
Remember, during the boom, every dollar spent on street appeal/flip factor converted to FOUR at the closing table! Agreed, but I think her point was still valid.
Not sure I agree either. They could have sold the new construction at “closer to fair” prices if they’d left out the higher-end finishes, but this bubble wasn’t just a new construction bubble. We saw plenty of instances of outdated crapshacks from the ’60s and earlier/later being sold at ridiculous prices as well.
Unfinished garages and cheap flooring would have made this crash even worse in terms of efficiency and recycling/replacement costs in the medium term.
Overdog,
Again, no doubt. One of my all-time favorite BB sites was “Mr.Over-valued.blogspot.com.” Truly over the top comedy based on crude pictures of even more crude asking prices of certified ancient dumps! ( We think some REIC’ster bought him off? )
But think of it this way. Mr. & Mrs. Howmuchamonth elect to go w/ the new home that’s basically stripped and their 102% financing! Well, make no mistake, they’re underwater. But.., not nearly so bad as their neighbor across the street that threw caution to the wind and said; “WTF! Shoot the works!” Oh and throw in a big screen!
So ( as it just so happens ) they are -both-now in default. One to the tune of $350k, the base model at… $275k. Neither will fetch more than $200k. Now multiply by a couple of million? You’re the guy eating it, remember?
IIRC the use of sheetrock in the garage has two drivers. One is fire code: you need a fireproof wall between the garage and the house. The second is that it’s becoming more important to insulate the garage, and it’s hard to stick up insulation without covering it with something - and sheetrock is a cheap covering material.
My garage didn’t come textured. They just taped the seams and puttied over the nail heads. It was left to the purchaser to put on a coat of drywall primer and then a finish coat.
DennisN,
However do you get by with a garage interior that isn’t textured!? I mean, what will the neighbors say?
It’s dozens and dozens of little things any builder could have made adjustments on to bring prices more into the realm of the “new reality”. Drop the fake @zz appliances and bathroom fixtures etc.
But then, without everyone “reaching over the hump” to trounce the gas pedal ( like a bunch of teens fer’ chrissakes ) I guess it wouldn’t have been a bubble? Only in -extreme- and after the fact cases did I see anyone try to amend their plans. Guys, this cr@p is where the “profit” was! Think back, how many builders were doing bread & butter stuff? As SDGreg points out above, NOT when you paid $100k for the freaking lot!
I have questions about the Alt-A and Prime resets:
1) Were those loans really as bad as the Subprime? Subprime means more than just NINJA loans. Subprime loans were classified by nodoc, stated income, fog a mirror. This not only included people with horrible credit scores but also people who were buying more house than they could have possibly bought otherwise. Alt-A and Prime were not done like this. They required documentation at a minimum. It seems that they will not default like Subprime.
2) Is there a quantitative analysis that projects the number of defaults from Alt-A and Prime? We have that chart that shows the total number of loans resetting in a given year, but that chart is years old.
3) Does ANYONE have any idea how the number of current defaults, workouts, etc. may have effected the potential number of defaults? I would think that the Alt-A and Prime defaults may have started in earnest earlier than the chart would suggest due to the bad economic conditions.
4) How will the Commercial Real Estate effect this onslaught?
I am by nature a pessimist. I’ve been trained over the years to plan and execute for the worst case scenario. Essentially, my mentors and experience schooled me to believe “anything that can happen generally will.”
The chart I’ve been referring to can be found on a number of blogs. Do a Google search: Mortgage Reset Chart. That should do it.
Roidy
I think that the Alt-A’s were subprime with better credit scores. I have seen a lot of Alt-A houses that might be going back to the bank, as their owners bought way more house than they could afford. So, a couple making 75K a year bought a 500K house, even when their credit was pristine, their income would not support the house. Queue in Alt-A. The terms were a longer horizon, and a recast. Generally 5 to 7 years. I am seeing houses bought in 2002-3 that are getting pummeled.
There is a chart somewhere that shows the Alt-A recasts starting in August this year, and peaking somewhere in 2011. I think that these houses are in better neighborhoods, and are more middle classish than the subprimes.
As for the primes. Even if you had an income in 2002 that could support your alligator, who is to say that you have that same income today? A lot of people that bought in 2002 were in one way or another involved in the REIC. The rest of us were looking for jobs, and not exactly looking for a house. I know that the Tech Wreck really hit me hard, and it took me quite a bit to come back up to an equivalent income.
I think that when commercial RE takes a hit, it will hit a lot of REIC’sters that looked at it as a safe harbor. A lot of GC’s, plumbers, electricians, etc. are looking at Commercial as a salvation as residential is all but frozen, with very little construction compared to what was there before. Once that hits, and these people are no longer employed, or employable (how could a RE agent making 200K a year work anywhere else with their skill set?) then we will see the bottom drop out of the Residential market a bit more. These are the FC waiting to happen, if they have not been initiated yet. After all housing follows jobs. No jobs, housing has no value!
I think that when commercial RE takes a hit ??
It has already occurred and is getting worse…Its just not discussed in the msm as much as residential..Cal-Peers sold a portfolio of 86 neighborhood shopping centers about 5 years ago for 2.8 billion dollars…They just bought it back for 1.7 billion..
Some of “us” Alt-A’s were no-doc mortgages. Yep, that was me, one of those no-doc deadbeats with my “stated income” — ‘cept I stated it honestly.
When I moved to the USA, I actually had good credit (from being here a decade before and keeping and using US credit cards) and a nice down payment. The appraisal was high compared to the price of the house, which was a good sign. Only thing is, they didn’t have reliable income figures from me, at least nothing they would accept.
I had a good job, but only for one month before the purchase. The previous jobs weren’t even paid in dollars, and they didn’t want any tax returns from Australia/UK/etc. Sigh.
So I went into the Alt-A bucket.
Yet we only paid about 0.25% higher than the norm at the time! I wondered why, but then again, we had a full 20% down payment as well as lots more verifiable cash assets/savings, enough living expenses for years without having to work, so that offset the risk, I guess.
And in the end, the banks made good decisions with us (and two other friends from my UK job who moved here as well) because we all paid off those Alt-A mortgages in a few years via refi once we got better “docs” behind us. So it’s not like *all* the Alt-A’s were headed for problems.
I think that this was the original intent of the Alt-A option… It was meant for professionals that had a Schedule-s, and would back out a lot of expenses that mere mortals were unable to do, and in this way pay less taxes, even though their income levels were much higher than shown, or had just landed a new job with higher pay, etc.
What ended up happening was that regular W2 joes would not have the amount of income, and would go the Alt-A route, and lie through their teeth about the income hoping either that the rising tide would help them, or that they would greatly increase their income, and be able to cover the resets.
what is a schedule S for? I googled and cant’ find out
It is an S-corp. Small corp that seems to be preferred by individuals masking as companies in order to get some deductions. Used a lot by Realtards and others who want to go to the IRS and tell them that they had 100K in income, but 95K in expenses associated to that income, so they end up paying the equivalent of 5K…
The definition is:
S Corporation Definition & Requirements for Eligibility
Definition of an S Corporation: a corporation that has between 1 and 100 shareholders and that passes-through net income or losses to shareholders.
Of course you just fill out a 1040, and where it states the income/expenses from business, you include that number there with a Schedule C. Sorry about the confusion.
Alot of guys I work with have phony side businesses. Not completely phony, but the exaggerated losses save them a bundle on taxes. Supposedly,they can only declare red ink for six years, but who knows. What a country/system.
Even if you had an income in 2002 that could support your alligator, who is to say that you have that same income today?
Exactly. Everyone seemed to buy based on the current situation, with little regard to what might happen in the future. Housing/construction was 6% of GDP 4 years ago. What is it today? 2%?
But wouldn’t all the refinancing that has been going on lately have taken care of quite a lot of those Alt-As?
Those Alt-A’s who were legit, as I like to think I was, will indeed be able to refi into normal mortgages after a few years of “stability”. Which is what we did.
Those Alt-A’s who ended up lying about their income (or were just overly optimistic) and couldn’t qualify for a standard refi later wen rates dropped like a rock are perhaps the ones we are reading about today.
And of course you have the ones bought at a bad/high price who the bank let get away with minimal down payment. Underwater loan = no refi.
Its been a while since I looked at them AltA. The most toxic was the option arm portfolio. Those loans by design can go under water and >70% of the customers of those loans were choosing minimum payments. The loan values were on the order of 500-700B, in Alt A only.
One of the things that will contribute to the severity of the second wave is the loan loss provisions were even less.
I believe there are another 700T in I/O loans as well.
Anyhow… the banks could liquidate all the portfolio and have plenty of money to pay depositors. Since they are heavily leveraged it means they have loaned out way more money then they have on deposit. However, they will go scamming for more money from the dingbats in congress.
700B … 700T… the billions and trillions are blending.
I think no-docs (if you lied enough) were Alt-As. I’ve always thought the subprime borrowers were either too stupid or too honest to just lie their way through a no-doc.
My understanding of sub-prime and alt-A… feel free to correct me or embellish
A subprime borrower is one who has great cash flow (good paying job) and horrible FICO
An Alt-A borrower is one who has pristine credit and crappy cashflow.
If this is fact, think about how things will play out from a geographic perspective.
exeter,
True. As the bubble heated up though, mortgage brokers were looking for ever bigger payouts, so they’d take someone w/ prefectly good credit and tell them, “You don’t want to get outbid -again-! Sure, I could go the more traditional route, but it’s a major hassle. With this Sub/Alt loan I can have you approved for home #5 this afternoon!”
And I think that’s how a lot of people got drawn into it.
Wkipedia says Alt-As involve one of the following- Too high loan-to-value; too high debt-to-income; bad but not horrible credit history; or little or no documentation of income,assets,etc.
Subprime is terrible credit; recent defaults, bankruptcy, or judgements against; and extreme loan-to-value or debt-to-income ratios.
Well I garbled the subprime ‘qualifications’ a little. Cancel the last two ratios I listed as qualifying. Basically, subprime is someone you’d never loan money to. (Except possibly the recently bankrupted) Alt-A is everyone that’s just a litle iffy. But it includes no-docs (yes, they are Alt-A) and this opens the door to everyone, because no-docs will probably fare as poorly as subprimes, no?
Two vital questions when pondering Alt-As-
1) What fraction are no-docs?
2) What fraction of no-docs are defaulting?
I think no-docs will be the worst performing segment of the entire market, even worse than subprime. If they’re a large fraction of the overall Alt-As, then we aint seen nothing yet.
Option ARMs seem to be the main culprit when it comes to the oncoming onslaught.
Some people used these Option ARMs because the rate was the lowest for them, and it didn’t matter whether the recast was at 5% or 20%, they have plenty of money to cover debt service no matter what.
Unfortunately (or fortunately, if you are a buyer), this is a small percentage of Option ARM buyers.
I saw a number where 75% of O-ARM had people paying the minimum (neg-am). This means that for 75% of the borrowers under O-ARM loans, this was AN AFFORDABILITY PRODUCT, not a convenience product.
I think we can bet that 75% of Option ARMs will blow up. People are overleveraged, and there isn’t any new leverage to replace what is there. Much like the commercial market, except in the commercial market, in many cases, there is still cash flow to pay the current, matured debt.
I agree. One look at the Credit Suisse reset chart shows that Option ARM resets will be the dominant player in 2010-2011. One look at the Business Week Map of Misery shows where these loans are concentrated: California. [I'm not pasting links here because my posts never show up when they include URLs. But these things are easy to find using Google.]
For example, 35% of mortgages issued during the bubble years in San Jose are Option ARMs. These have barely started resetting yet.
Anyone who believes, as do several of my co-workers who have bought in the past few months, that Silicon Valley real estate has bottomed out has got a very nasty surprise coming over the next few years, in my opinion.
Dow Jones- wire.
Once the poster child for an exuberant real-estate market — and exuberant real-estate stocks — AvalonBay Communities inc. (AVB) has had its comeuppance. The real-estate investment trust’s shares have fallen 61% in the past two-and-a-half years, as higher financing costs, lower rental income and leverage combined to devastating effect. But there is some good news: At a recent 56, Avalon’s shares reflect these challenges, and the deeply depressed state of the apartment-rental market generally. The stock is trading near the company’s asset value, which analysts estimate is between $47 and $70 a share, down from more than $120 two years ago. What the shares don’t reflect is a potential turn in the rental market, which could come sometime in 2011. REIT stocks should bottom well in advance of REIT operators’ results.
I wonder what cap rate they are assuming to get to NAV…
I did the math for an industrial REIT recently at an 8.5% cap with 10% vacancy, and land holdings worth $0 (not too high, not too low), and on that basis, the REIT was trading at about 25-30% of NAV. Now that seems to be a bargain. 100% of NAV leaves little room for error.
AVB’s dividend yield is 6%! 6% implies to me that they are still calculating their NAV on a very low cap rate.
If you dial back AVB’s dividend to 1998 levels, you will be getting a 3.4% yield on the current stock price. If you dial back some other REITs to their dividend amount as of 1998, their yield will be 20%+ on current stock price (some at upwards of 50%).
Good! The apartment I am currently vacating is run by these parasites. Their dismal financial performance may explain why they tried this month to sock me with a $75 “late payment charge.” Not only was I not late, but in fact as verified by my bank statement, the money left my checking account eight days EARLY. (I’m a zealot when it comes to on-time payments!)
To their credit, they reversed the charge immediately when I complained, but I wouldn’t be surprised if they made this “mistake” with every single tenant, under the assumption that some of them would assume that they really WERE late.
From behind “The O.C.” orange curtain…sans a peacock…
“He’s the king of foreclosures”:
“They’ve seen a lot of people in a lot of tough spots.
The jobless, the broken families, the terminally ill – Moon feels pity for them all. He’s haunted by the image of two bald children – both going through chemotherapy – who were getting out of their house because medical bills had eaten the family finances.
But, whatever of the reason for leaving, Moon also knows that many are reluctant to move.
One of Moon’s female employees recently was checking out a supposedly empty REO house in Anaheim when she heard a noise she didn’t expect.
She went in the garage and found a naked man sitting on the floor doing drugs.”
By JEFF COLLINS
The Orange County Register Monday, July 27, 2009
Posted the other day though pretty late - from the recent census Q2 data release -
Home vacancy rate not falling yet
Note that the vacancy rate of homes is still very high - it appears to have have leveled off but is not falling yet. The owner vacancy rate is falling some, but that’s offset by the increase in rental vacancies.
So much for buying an investment house to rent out, then sell “when the market goes higher again.”
BTW, a lot of current AZ purchases are being driven by this line of reasoning. If you can call it that.
Plenty of that going on in California, too.
“…it appears to have have leveled off but is not falling yet…”
Does the vacancy rate appear to have reached a permanently high plateau?
Does anybody have any information on house prices in the Hershey/Hummelstown, PA area? I don’t know this area but a friend would like to know what prices are doing and what the outlook currently is. I will defer to anybody that has a real knowledge of the area. Links to any sites would be appreciated. Thank you and now it’s back to your regularly scheduled CNBC viewing.
OMG, you’re thinking of moving to Pennsyltucky??!
We lived in Hershey/Hummelstown for several years in the ’90s. If you buy there, one of your first home accessory purchases will have to be a powerful snowblower. I don’t have housing price info, but here’s some of what you can look forward to.
The good: the smell of a batch of cocoa beans being roasted at the nearby Hershey plant, fly fishing the nearby mountain streams, hiking the nearby Appalachian Trail, the Hershey Medical Center (when you need good medical care), the beautiful Hershey Theater, relatively attractive suburban communities of varying ages, architectural styles, etc.
The bad: the smell of a batch of peanuts being roasted in peanut oil (imagine living next door to a KFC outlet) at the nearby Hershey plant, very few good restaurants, a remarkably large segment of the population that has never traveled more than 30 miles from their hometown, long cold winters with lots of snow, learning your TMI evacuation routes and assembly center location. Much of Harrisburg is genuinely ugly, as is the stretch of Rt. 322 from Harrisburg to Hershey.
Heck, if you listened to the fearmongers, I should be glowing in the dark, ’cause my elementary school was less than 1/2 a mile from a nuclear reactor.
if you listened to the fearmongers, I should be glowing in the dark Well, do you? Don’t leave us in the dark.
Pipe down, Sparky.
I’m not planning to move there. I know somebody that wants to talk somebody out of buying. I could really use a current update on the situation on the ground.
I grew up not too far from this area.
The people are a big plus — lots of PA Dutch influence. Lemme tell you, they have a work ethic that just won’t quit. And they’re not whiners. Give ‘em a tough job to do, and they give it their all.
Three cheers for Central PA!
hiking the nearby Appalachian Trail,
ala GuvSanford?
I used to hike the Appalachian trail but somehow, not so much action.
Hello. I have been a long time lurker on this board. If this info helps, I’d like to contribute. Just took a “road trip” through PA, and got home last Friday. I visited Scranton, Hershey, and Gettysburg. While in Hershey I had dinner with my two cousins; one lives in Hershey, the other is in Hummelstown. The discussion was mostly centered on the economy, and jobs are the number one concern out there. Both of my female cousins have househusbands, not by choice, but because their husbands can’t find work and have been laid off for some time. It seems that in most households it’s not uncommon for the wife/mother to be the primary wage earner. The housing market is falling fast, both commented on it as they were glad that they had bought over 10 years ago and were not underwater yet. Houses in town were cheap; Farmettes are still in the 350 – 550 range. Those people won’t sell till they get the price they want for it. Some new (note: anything under 10 years old is “new”) development but not much is moving and most find they are living from paycheck to paycheck with nothing saved. The park itself was dead, and the hotel I stayed at had a vacancy rate of over 40%. In a nutshell, unless you have an ironclad gov’t job, don’t even think of it.
Whats a farmette?
A farm for girls. Boys have farms.
slimmmmmmm ahhhhhhhh LOL
Gentleman’s farm. 5-20 acres and some outbuildings. For people who want to play at farming, not make a living from it.
Last time I made my opinion about medicare and medicade and govt programs in general on this blog, I got beat up. But I saw this commentary on the state of medicare and trusting govt and I couldnt resist getting some of you libertarians opinion on it. I am leaning libertarian lately and I want to know how you feel. My question is, do liberals EVER consider where money will come from to pay for huge programs. All this commentor talked about was how great govt programs are, but only addressed cost once in the phrase of higher taxes. Taxes cant keep going up forever, where is this money going to come from?
Also, he touts how people on medicare just loves the free program. Who are you going to find that is going to say they hate something they got for FREE, especially when it’s something that’s as expensive as healthcare?
I pray for our country as I fight for it. I feel our country is going in the wrong direction and we will all be the worse for it..
http://www.cnn.com/2009/POLITICS/07/27/zelizer.medicare/index.html
Medicare is not free.
http://questions.medicare.gov/cgi-bin/medicare.cfg/php/enduser/std_adp.php?p_faqid=2100
You are correct polly…touche..
But I know socialized medicine isnt the answer, I just feel it in my gut. It’s a feel good thing, to say everyone is covered, but I dont think it’s cost effective. My whole point is, no one is talking about how to pay for this. It’s going to be VERY expensive, especially to the future generations. In my simple mind, it just doesnt seem sustainable.
According to a Pew report cited this spring in the NY Times about 10 - 12 million of the ~40 million uninsured Americans are illegal aliens. Do you want to pay extra taxes to reward illegal with health care ? Not me.
Correct me if I’m wrong, but don’t we already pay by virtue of giving healthcare out in emergency rooms, etc.? When they don’t pay, the bills are higher for the rest of us (since hospital’s rarely make any money).
I’m not for the massive new healthcare plan, but I also acknowledge some of the inherent problems with solving the bigger problem.
I actually tend to like the “salaried doctor” approach. If, as a doctor, you get paid by procedure/test, and as a patient, you don’t pay for additional procedures/tests, then there is an incentive to over-test, and a counter incentive to be over tested. If you are salaried, and get compensated based on how good of a doctor you are, part of the cost spiral goes away. That is problem 1a with health care costs.
Problem 1b is access, which could be easier to solve is prices don’t rise as quickly. But there is no easy fix to this without having some stricter regulation with insurance companies (dictating what kind of plan they need to offer the public, for instance), and mandates for all individuals to carry insurance.
Access righto. We already pay for indigents- people I know who worked their entire lives in the goodolUSA and because of lots of reasons ie: jobs etc, they had no insurance to cover emergency needs.
When it gets to the ER, it is already to late to have it cost less in terms of primary care and preventative medicine care.
By the time someone gets to the ER it will have a HIGH COST to you and me, taxpayers. Also IF illegals have a job, they do in fact pay taxes. It is automatically withdrawn from their paychecks. The caveat is if they are working/many are or want to. If they are being paid under the table by AG corps etc then lets get on the ‘farmer/corp’ that does the under the table.
When it gets to the ER, it is already to late to have it cost less in terms of primary care and preventative medicine care. Lots of bad stuff can put people into the ER, which primary care or preventative medicine could have done nothing about. Stuff happens.
Yes, tresho, stuff happens, but alot of stuff can be put off or avoided altogether. Lets give examples
ie: teeth care = Heart disease. Unless the msm and scientists/mds are lying. Heart disease can come from lack of regular dental care.
ie: pap smears/mammograms = cancer.
ie: diabetes = amputations, heart disease, Circulation…
and so much more.
Yes, things happen, but so many can be avoided if caught soon enough and not cost you or me major tax dollars in the long run.
“It’s going to be VERY expensive, especially to the future generations.”
We _already_ pay more than the rest of the developed world, and in most cases we get worse outcomes to show for it.
That suggests it would not be “VERY expense”; in fact, we might even be able to save money while providing more/better care.
do liberals EVER consider where money will come from to pay for huge programs
As I said in that thread several times, we don’t need to pay a single dime more than we already are.
We spend 2 and a half times more than other industrialized nations on healthcare. We already spend more than enough to pay for healthcare for everyone - every treatment.
But I know socialized medicine isnt the answer, I just feel it in my gut.
The only way to achieve full care for everyone with our current spending is “socialized medicine”, more precisely, single payer. The current “free” system doesn’t allow this.
I can tell you this:
In my past I have experienced 2 government run programs either directly, or indirectly.
1st experience. Sister in Law in Canada (highly praised socialized health care)… Pregnant, went to get an appointment for her pregnancy, and to start getting all the tests, Ultrasounds, etc… Got an appointment for her at the 4th month, with the first Dr. telling her that she was not interested in attending her, so off she went looking for another one! Currently my wife is pregnant expecting our first with private health care. Got an appointment in 1 week. at her 2nd month.
2nd experience: Socialized medicine provided by the government.. As a DMD. My rate of charge for each procedure was capped. If I worked 60 hours a week, seeing patients constantly, and banging them out in less than 15 minutes (some DMD procedures could last a couple of hours) I would not make the minimum legal wage. They got around it though by making you a contractor with a fixed payment per procedure, no matter how long it took.
I have had a look into both sides of the medical equation, and it has not been pretty for the providers or the recipients of government provided health care. Does Health care need reform? Yes it does. Right now a lot of money is being used up by 3rd party (insurance co.s) that provide no services whatsoever, but just replacing the 3rd party of private health care providers, with a public entity, will just engender a whole new bureocracy that will neither be good, or efficient.
Your experience in the Army should tell you how bad it can get. My brother was in Afghanistan in 2003, and he got injured. While the attention he got, specially in Walter Reed was second to none, the discharge took him about 2 years of red tape. Talk about frustration!
Canada doesn’t have socialized health care. They have socialized insurance also called a single payer system. Docs are still in private practice, as you explained in your second example where you were an independent contractor, not an employee of the province.
Polly, sorry I was not clearer, but the second example is in Colombia, not Canada.
There is some private practice left in Colombia… for things like BOTOX, or quality health care.
If you are unlucky enough to fall into the clutches of the “socialized” system, either as a service provider, or a patient, you are trully doomed. The system that they have is very similar to the system that is being proposed by Obama, and from colleagues that labor in it, It does not work. Necessary procedures are routinely denied by the government due to cost, or lack of knowledge, and for the providers, the amount of patients that they have to see is ridiculous (something like 7 or 8 per hour).
The winners in all this are of course the until recently (15 years) created bureocracies to manage all the ringamarole of service providers, hospitals, dentists, and payments.
The emergency or scheduled care I received in CA was fine. Had no problems with scheduling or diagnostic for every incident.
Do you suppose that perhaps statistics indicate that the ol 80/20 rule might apply?
I’m with you. Some of the things Zelizer pushes aren’t quite as good as they seem:
The change [in Medicare payment structure] resulted in significant cost reductions. Most recently, in Massachusetts, state policymakers have observed that the existence of a strong government program has created an opportunity to achieve such cost measures at the state level.
Yes, the costs for the government payer are way down. But the losses are soaring at some Massachusetts hospitals. On a small, independent scale, doctors can start avoiding Medicare patients as payments get skimpier, but because of the health care mandates on hospitals, they’re kinda stuck and will be forced into a crisis if this continues. One way out of the crisis is to cut care back to what the money covers, but I don’t think the well-lawyered USA is ready for the rough and ready care that you might get with that — people here still want top outcomes even with half payments.
Unless there are huge taxes to pay for this, I can’t see any way out other than to ration/restrict care for the most expensive cases. I’m no medical professional by any means, but I suspect something similar to the old 80/20 rule holds in hospitals: 80% of the cost is created by 20% of the patients. Shunt them aside via neglect or rationing, and you can contain costs.
Or you can do it all via taxes. There aren’t enough mega-rich in this country to tax only them to pay for it (or won’t be, once you do start taxing!), but a reasonable amount like the UK’s 11% NI tax on everyone might be a start. Except that breaks a very oft-stated campaign promise that keeps popping up inconveniently. Ouch.
“80% of the cost is created by 20% of the patients.”
I’d go 90%/10%.
Amen edge - I was being conservative.
95% goes to 5% of the patients…
Hopsitals that are not extremely small make money on providing care to Medicare patients (the extremely small ones get special treatment from Medicare to make up for the inherent inefficiency of their size). Private insurance pays more than medicare, so they make even more money on those patients. Medicaid reimbursement is generally a lot lower than medicare - 65% to 75% if I’m remembering right. That is enough to make those patients a small loss compared to the hospital’s costs in some hospitals, but that using an allocation of all costs. They would be worse off if they had empty beds instead of the Medicaid patients who still cost less than their marginal costs.
Hospitals love to report losses compared with their charges, but the charges are easily a tiny fraction of their costs for providing the services. Don’t buy it. Only look at reports that compare their income with their costs. Catholic hospitals have been doing this for a long time. By the way, many hospitals are non-profits, so they shouldn’t be worrying about bringing in a lot of money over their total costs as they have no shareholders to please. Of course, since their administrators have negotiated pay packages similar to for-profit corporate executives with bonuses based on growth, they won’t act this way.
Oh, and if they have issued massive amounts of bonds to build a new birthing unit so they can sell it to the yuppies as having bamboo floors and soothing mauve color schemes created with low VOC paint, they might be in trouble no matter what their reimbursements from government programs look like, just like any other industry that takes on too much debt.
charges are easily a *huge multiple* of their costs, not a “tiny fraction”
Sigh.
issued massive amounts of bonds to build a new birthing unit
Hear, hear! It’s nice to have a clean, new hospital, and a bit of cheer is a help to those in the waiting area, but sometimes it does seem like overspending to me. I’m not sure, though, that spending money to attract heavily-insured yuppies is a bad move financially.
England/Canada/etc restrict care by making people wait. Currently, we restrict care by costs.
I think the answer is to stop making doctors the gate keepers of health and allow people to self-medicate.
To a certain extent, people are already self-medicating. Quite a few of us know how to treat our own ailments, and, quite frankly, it ain’t rocket science.
I can’t even buy contacts with a year old prescription.
I would love to have an iphone app that would give you one.
Yeah, the eye prescription thing is a bit over the top, isn’t it? Sure, my eyes change slightly year to year, but I cannot get a new pair of prescription Raybans without spending an hour and $60 visiting the eye doctor again this year so he can try (in vain) to sell me on contacts all over again. Sigh.
As some sort of a libertarian I agree that prescription drug laws should be repealed. Anyone should be able to go to a pharmacy and order anything they darn well please.
Is this smart behavior? Probably not. But why should the GOVERNMENT restrict all prescription drugs to those prescribed by a physician? Most people will still go to the doctor. Sometimes it will be easier to self-prescribe (e.g. your blood pressure prescription expires just when your doctor leaves town for a month’s vacation). If some idiot wants to take an overdose of heroin, be my guest.
Think what would happen if this approach was extended to other fields. People could be thrown into prison for doing their own income tax without going through a tax lawyer. People could be thrown into prison for working on their own cars without going through a “government certified mechanic”.
DennisN,
I’ve beaten on that very tangent for a long time. I think, further, if you wen’t to an automatic transmission specialist and he said he’d fix your car for $1,500, then 3 months later sends you ‘another’ bill for unseen difficulties, the state’s AG would be on him like ugly on an ape!
But for some odd reason where medicine is concerned, we’re all good with it!
Doctors the gatekeepers of health? I think you mean corporations. Last time I checked, it was Blue Cross that denied me care, not my doctor.
And one more thing, the upper 1% that got a Tax reduction 7 yrs ago, in time for a ‘occupation’, those taxes should be reversed.
Reductions not allowed to be permanent.
So it isn’t a tax increase, just return that 1% s taxes to where it was in 2000.
Stpn2me, I’m a doctor. I have practiced medicine for 23 years. Medicare’s chief drawback for health care providers is its criminalization of coding errors. Private insurers will simply deny payment when a diagnosis coding error is made. With Medicare, the gov’t will go after you for fraud.
Most doctors would still rather deal with Medicare than with the byzantine array of for-profit private insurers whose main reason for existence is to reap dollars for themselves. They do this by denying claims and denying care, by charging outrageous fees, and by excluding all manner of “pre-existing conditions” as defined by them. A developed nation can surely do better for its citizens than this broken, conflict-of-interest ridden system. Government isn’t perfect, but Medicare works.
Medicare isn’t “free”. If all the money spent by individuals and employers on health care was put into a Medicare-like pot, it would provide decent health care for the vast majority of us, and no one would have to depend on their employer or on some shark-like insurance company for health coverage. Cutting out the middleman leads to cost savings in most businesses. Maybe it’s time to give it a try in the business of health care too.
Dr. Elanor, if you were in Tucson, I’d be your patient in a heartbeat.
AZ Slim, I hope you never need my services. I’m a pathologist.
That exchange is a classic. Totally classic.
Yup, that’s what happens when I don’t know what kind of a doctor Dr. Elanor is.
Pathologists are the smartest physicians, bar none. But by the time they get involved, it’s too late.
Now that reminds me of a joke….which we all know in some form.
I do surgical pathology, examining everything from biopsies to Polly’s knee bits (if they were sent to Pathology, sometimes those cases are at the operating physician’s discretion) to large cancer resections. So, not *too* late if you’re *seeing* me, but you would be suffering from some ailment or physical misfortune!
My scoutmaster in Palo Alto was a pathologist and was involved in tissue matching for the first sets of heart transplants at Stanford Medical Center. The guy was a wag. Hosting a BBQ he’d go out with a scalpel and “perform an exploratory” to see if the steaks were done enough.
—- I agree that Medicare works, for the moment, and that private insurance is based on getting as much in premiums as possible and paying as little in benefits as possible. However, you left out the demographic tsunami that will shortly be hitting Medicare as baby boomers become eligible for it, and the other factors that will render Medicare insolvent in the next few decades.
—- If all the money spent by individuals and employers on health care was put into a Medicare-like pot, it would provide decent health care for the vast majority of us If you have links to back up this assertion, please provide them, I’d be interested in reading more on this. Anyone excluded from “the vast majority of us” will loudly complain about the health care they don’t receive, in any case.
C’mon, tresho, I deliberately did not say “all of us”, although I believe that to be true, yet you’re skeptical of my assertion anyway. There are about 47 million uninsured Americans right now. Estimate $1,000 to provide each of them with annual health care. Now I need to find out the aggregate annual profit of U.S. health insurers. If it’s less than $47 billion, then let’s increase the Medicare tax to cover the shortfall. By eliminating health insurance companies, their 20% or so administrative costs built in to every health care dollar also go bye-bye. Doctors’ offices and hospitals will be able to cut billing and coding staff too, so their expenses go down. Of course, these actions will create a temporary bump in unemployment, but at least all those unemployed people will have health care.
There is something very creepy about for-profit health care at a basic level. I would prefer to leave profiting off of other people’s misfortunes where it belongs, in the hands of lawyers and repo men. No offense to either of those professions.
leave profiting off of other people’s misfortunes where it belongs, in the hands of lawyers
Hear, hear!
One of the best parts of being a patent attorney is that your clients - the inventors - are actually happy to see you. They act like proud parents as they describe their new invention to you.
Most lawyers are more like ER doctors - the client is wheeled in battered and bleeding and you’re supposed to make their situation better.
dennisn, patent attny? can you provide .50 advice? simple ?
thanks-ellisisland1AThot mail DOTcommmmm.
thanks again.
Totally agree. My patient attorneys are the only ones that I willingly and gladly pay. Their expert advice and council have made me a lot of money over the years.
Been doing that for almost 40 years.
A developed nation can surely do better for its citizens than this broken, conflict-of-interest ridden system.
Got it Doc,
Here is where me and you disagree…
Why does the nation have to do better for it’s citizens? Arent the citizens able to do for themselves.
BUT, the answer surely cant be taxing everyone to pay for this. I dont want to pay for some fat a** drinking beers and smoking six packs a day on with a gut going from his chair to his big screen TV.. Then when he blows a lung he goes to the hospital talking about he has a right to health care paid for by the citizens of our republic. It isnt fair. And dont give me this democratic for the good of the people stuff, we are NOT a democracy, we are a republic and I highly doubt the founding fathers would approve of socialized medicine in the way it is being presented by our president. Actually, the only thing this country should guarantee is a chance to be wealthy and succeed, without the help of the govt. I would rather it be a pay as you go system, get rid of insurer’s altogether. Insurers had their chance and I agree it isnt working. But taxing everyone who makes a dollar certainly cant be the answer because eventually, there will be too many who looking for care with huge medical costs and not enough money to go around to pay for it all. Doesnt anyone else see this? I think it should be a fee based system where the individual pays for their own care. If hospitals knew there wasnt this huge pot of insurance money (taxes) going around maybe prices wouldnt be so high. It’s alot different knowing that if you dont stop smoking you are going to die alot sooner if you are the one paying the bill instead of a deep pocket insurance company. I apologize for sounding heartless, but at some point, we have to say, when is enough enough? I am tired of sitting here watching the will of my country get sucked out of it by those out there who feel the masses should be taken care of lip to toe. Well there just arent enough souls out there doing the “taking care of”. We cant take care of EVERYONE. Impending death is the mother of invention, trust me, I know. Take out the safety nets and watch how people will respond. You dont work, you dont eat. You dont work, you dont have a roof over your head. Everyone talks about how the people hold the power. The people only hold the power when they are governing themselves and not beholden to a central govt. You know what happens when people depend on central govts? Dictatorships. That’s right, Hugo Chavez. The poor will always outnumber the able, and they will always go for whoever promises them the most. “Who is going to save us now?” It makes me sick. I hate to hear, “what is the (federal) govt going to do”? WHO CARES? We shouldnt even be asking Washington what they are going to do about health care or the housing market..know who we should be asking? THE STATES. Your governers! I know alot of you who dont agree with me have forgotten this, but we are a republic of free and equal states, autonomous in their own right. The only thing the federal govt should be doing is negotiating treaties for imports and exports and insuring our defense from the idiots of the world, PERIOD. The federal govt should not be in the business of providing health care for every citizen. Period. Should it be the responsibility of the states? Probably. And if that state isnt taking care of you, know what you should do? MOVE TO ANOTHER ONE. I am so afraid the model of the impending socialism is going to look like california. I dont want my country in the position that state finds itself in now. I know we are in debt up to our eyeballs but what has done it? Programs. And too many of our immigrants today are coming from socalistic nations and expecting the same thing as where they came from, just on a grander scale in the “American dream”. Not saying there arent good immigrants these days, I’m just saying..
I dont have all the answers, BUT, I know talking about every american having a right to free health care and then taxing the life out of the citizens to pay for it isnt one of them.
There has GOT to be a better way other than what is being proposed. I see too many taxes on everyone and this problem being kicked down the road for generations to come….
Sorry about ranting guys…but there has to be other people who feel like I do…
(raises hand)
quite the wall of text there… :O
Sorry about ranting guys…but there has to be other people who feel like I do…
I often wonder how much “free” health care we could have provided for ourselves if we thought that taking care of our citizens was more important than “stopping” Saddam or bringing democracy (er, representative republicanism) to Iraq.
Billions for war, nothing for the poor.
I often wonder how much “free” health care we could have provided for ourselves if we thought that taking care of our citizens was more important than “stopping” Saddam or bringing democracy (er, representative republicanism) to Iraq.
Too many people fail to see the link between radical islam in Islamic countries and the idiots drinking the Shaira(sp?) Kool-aide here. Think socialism is bad? Wait until we get a muslim majority in our congress and they start wanting to change the constitution to reflect their values and institute muslim law. After all, the constitution is a living document, right? Think it’s far fetched? Given recent election events and how we are “apologizing” to the muslim majority in the world, you might want to think again. You never think about oppression until the islamic police is beating your wife because she isnt wearing her govt issued burka. I bet we have this crisis in the next 60 years…
Just a reminder women had more rights under Saddam then they do now. Please understand I am not defending how Saddam treated his people.
Please define recent election events.
I find it interesting that you are concerned about a possible take over by muslims over here and changing our constitution. Do you have the same concern about the some of the radical Christian groups that would love to keep women barefoot and pregnant regulated to second class citizens?
I don’t want to see any religion telling me or any woman how we can live our life.
Do you have the same concern about the some of the radical Christian groups that would love to keep women barefoot and pregnant regulated to second class citizens?
You probably won’t read this but I have this comment - got any other strawmen you’d like to create? You probably think that Christians want to bring back slavery too, don’t you?
packman,
Please read what I posted one more time. I said some Christian groups not all Christians. Wipe the fog away from your eyes.
There are plenty of people who brought their illnesses upon themselves. Even bleeding-heart health care liberals such as myself, LOL, want a system where those people have to lose weight, stop smoking, enter rehab, whatever in order to get preferred insurance rates.
Then there are the simply unlucky. Bad genes, bad protoplasm, being in the wrong place at the wrong time, whatever, they get something terrible dumped on them through no fault of their own. Maybe I favor a public health option because that latter segment of the population is the one with whom I interface in my work.
As for states’ rights: I don’t see why some child who has the misfortune to be born in the wrong state should suffer while a kid born in a “good” state gets good health care. The same goes for education. It isn’t at all easy for most people to pack up and move in order to have better services.
On the immigrant issue, aren’t most of our immigrants from Mexico, which offers them absolute zero in the way of benefits? BTW, I do not favor extending any kind of gov’t benefits to illegals.
Elanor,
Well said. In a story just this morning a 20 y.o died while saving a 9 y.o in a swimming accident here in OR. It was later learned that his diabetic condition only gave him a few more months to live at best anyway.
His mother said all the kid ever wanted to do was serve in the Army and serve his country. Instead, he was homeless, $200K in debt for medical expenses, and even his mother had no means to help any more.
http://www.katu.com
When I read ‘his’ story, I said, now here’s someone that’s deserving. But w/ his condition and lengthy treatments, he wasn’t even able to get into the service. Just a sad story all the way around.
It’s under:
“Man who died saving girl was extremely ill”
under local/regional. I think it’s a total keeper when people force you into a one size fits all camp.
As for states’ rights: I don’t see why some child who has the misfortune to be born in the wrong state should suffer while a kid born in a “good” state gets good health care.
The kid doesnt have a parent? Isnt it the parents responsibility to ensure they have a good environment? That’s the beauty of our republic. It’s the citizens of the state who improve the condition, not the state improving the citizens. THAT is the problem…
Isnt it the parents responsibility to ensure they have a good environment? That’s the beauty of our republic. It’s the citizens of the state who improve the condition, not the state improving the citizens. THAT is the problem…
+1
“Why does the nation have to do better for it’s citizens? Aren’t the citizens able to do for themselves?”
No. Not when the whole system is rigged and gamed by liars and thieves so that even those who try and want to do “good” are outweighed by those who don’t.
No. Not when the whole system is rigged and gamed by liars and thieves so that even those who try and want to do “good” are outweighed by those who don’t.
Exactly.
This whole boogieman of “impending socialism” is just intended to keep the dittoheads in a lather while the big pharma and insurance companies continue with business as usual.
Sort of how the phrase, “American Dream”, was used to keep the moonbats enthralled while the REIC conducted its decades of exploitation.
We’re all being played.
Feh.
Lavi d Yessiree.
Arent the citizens able to do for themselves.
No. Many people are unable to get insurance at all, the companies won’t take them. The current system doesn’t work for them, period.
As absurd as this may sound in today’s corporate bribe-ocracy, the government is actually supposed to represent the people and the people elect the politicians to act in their interest, even if the pols don’t get “contributions” from them.
Crazy talk, I know.
Geez,
For someone who’s first in line at the government chow line, you sure have a hard-on for anyone else who wants to get into that line, don’t you? As a military employee, you’ll be enjoying government-paid health care for the rest of your life and there’s something inside of you that just resents the idea that someone else out there might have the chance to enjoy the benefit that you take SO for granted.
-profit private insurers whose main reason for existence is to reap dollars for themselves. They do this by denying claims and denying care, by charging outrageous fees, and by excluding all manner of “pre-existing conditions” as defined by them”
yea I’ve seen that had to get a lawyer what a pain
“…something that’s as expensive as healthcare?”
How did that happen?, really…. how did “healthcare” become expensive $$$$$$ in America? $52,000 for an appendix operation?…it’s a good thing such surgeries are “rare events”… that seldom happen…. to most common folks from “various” genetic human backgrounds. Let’s not blame repubicans, let’s not blame Democraps, let’s not blame liperterians…let’s blame xxxxxxxxx, then and only then… will we get to the “root cause” of this “National medical debacle” and find a “workable” solution that works for ALL 305 million Americans currently in some sort of unknown health & financial status…
(Hwy, thinks to blame the genome mechanism for “creating” so many functionally defective units…he sits on the grass and ponders China & India and the average length of human life…)
(sigh) - why would anyone blame a libertarian for a federal policy? Name me one person from the Libertarian party who ever held a federal elected office in the United States.
I hate it when people smear libertarians as if they are the same as Republicans or Democrats. It’s a crafty attempt by the enemies of individual freedom to try to make a false meme that the Libertarian Party is no different from the two mainstream ones.
alan greenspan
oops. wrong. never been elected.
how did “healthcare” become expensive $$$$$$ in America? $52,000 for an appendix operation?…
They have to charge extra to account for the patients the end up paying $0. Its a hidden tax, most people never look at the bill.
$52K is the hospital chargemaster price. It is a point to start negotiating with the insurance company. For my knee surgery, the hospital was delighted to take less than 16% of the chargemaster rate for payment in full of their charges.
Good luck trying to negotiate that rate if you don’t have insurance.
“Good luck trying to negotiate that rate if you don’t have insurance.”
Many people do successfully negotiate a lower rate; we just call it BK.
It’s a sad state of affairs when that is the only way to negotiate a lower rate from otherwise ridiculously sky-high rates.
You forgot the trial lawyers. Think how much costs would drop if doctors did not have to practice defensive medicine.
Garbage. They practise what is called “defensive” medicine because they make a boatload of money off it. The New Yorker article that everyone was reading in DC last month dealt with a comparison of two areas in Texas - same outcomes, same demographics, same illegals, same state law restrictions on malpractice awards (kept low). Medicare costs in one were nearly twice as much as in the other. Culture of the medical community seemed to be the only plausible cause. Oh, and in the more expensive area, the docs were more likely to have a profits interest in the places that do the tests and procedures they prescribe, but that may be a result as much as a cause.
Everyone should read this article. It is important.
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande
Texas put limits on malpractice awards 6 years ago. I am happy to report a 40% across the board drop in doctors and hospital fees.
Oppsy, actually medical costs are up in Texas, my bad.
Skroodle, read the article. It is fantastic. Long but very worth it.
I just read it, Polly. It’s excellent. Very much worth the time to read.
I also feel a bit sad as it will fall on deaf ears. Mercenary, deaf ears.
Interesting! There goes the myth that it’s all the fault of high malpractice judgements, and the plaintiff’s attorneys’ lobby.
Because insurance companies have a deal with the hospitals to only pay $10k per appendectomy (or less, or more, depending on market share), so, for the hopital to pay for their costs, they need to charge anyone without insurance substantially more.
Remember, hospitals are incredibly expensive to build, since they need to withstand the worst natural disaster any region can be hit with (since you need the emergency room to still work).
Hospitals do not need their chargemaster rates to make up for pepople who have insurance or even people who don’t have it. That isn’t the way the system works. The chargemaster rate has nothing to do with their cost of providing services. I guarantee you, the hospital I used made money off the $1607 it accepted for the 5 hours I spent there having my surgery despite the fact that their initial charge was over $10K. Same thing for a hospital that says your appendectomy costs $52K and takes just $10K.
Think about it. Would you build a business model around assuming you would actually get paid huge amounts by people who don’t have health insurance most likely because they can’t afford it? No? I wouldn’t either. Neither do hospitals. In some states they get partial reimbursements for treating the uninsured from state funds, but that rate is way lower than private insurance reimbursement rates.
I guarantee you, the hospital I used made money off the $1607 it accepted for the 5 hours I spent there having my surgery despite the fact that their initial charge was over $10K.
In other words, the hospital’s regular rate is a wishing price, which hardly anyone ever pays in full. The vast majority of patients who might actually charged the wishing rate have no hope of paying it off.
A lot of things are priced at prices the manufacturer / retailer never expects to get for them… Next time you visit a Kohl’s (or similar) store note all the sales signage… If it’s not on sale this week it probably will be sometime this month.
My employer provides apparel that is planned to always sell for 20% or more off the original tagged price but still provide the planned profit margins. People love the illusion of a bargain.
Bingo! Both of you. Except in health care, the illusion of bargain is larger (80% off - you should feel grateful to your insurance company for saving you so much money), you don’t get to see the price tag before you buy, and there isn’t any option to go pick up the stuff you need used at a yard sale instead.
There’s already a form of “means testing” for Medicare. Seniors with “too much” income do have to pay more in the form of reduced social security payments.
Means testing will expand - it will expand dramatically at every level of government and in programs of all kinds. The rich will find loopholes, the poor will benefit - the rest will be expected to buy overpriced houses and shut up.
There is also a means testing for VA medical benefits. If you make over a certain amount or your assets are over a certain amount you have copayments and pay a certain amount for procedures.
That’s especially sinister, because a vet ought to be a vet. Either someone served or they didn’t. Externalities shouldn’t matter.
“My question is, do liberals EVER consider where money will come from to pay for huge programs.”
Good question. When someone talks up health “reform,” they talk up all the neat goodies we’ll get, and ask wouldn’t we prefer to get insurance without an employer required, and get pre-existing coverage, and all sorts of great things like that and you have to say YES of course I would, but their puny effort to explain how we pay for all that is a massive FAIL. Their fallback is always “well other advanced countries do it somehow.”
“well other advanced countries do it somehow.”
Yeah, like in Europe? Setting up Europe as any kind of ideal is fraught with complications and contradictions. They have their problems, big ones, only they’re not all visible from a table at a Paris cafe or balcony at a Tuscan villa.
It’s easy to understand how people have generally come to believe that medical care is a “right.” There you are, sick as a dog with something. You have no medical insurance. You’re broke. Surely society isn’t going to let you just die like an animal in the wild!
No, of course not. That’s where charity comes in. Good hearted people with a certain level of means will come forward to see you get looked at by someone with medical training. Often doctors, much maligned for being “greedy”, will volunteer their expertise.
But no one has a “right” to charity. There’s nothing in the Constitution that endorses such a notion.
Er, wrong. Thousands have died because they couldn’t afford medical care and neither could the “charity.”
I have no doubt that number is actually higher.
Good hearted people
as in those family values folks, those in office who vote against what they get caught doing?
I know of several families who have lost a family member to severe illness or tragic death. They can’t/couldn’t pay for health care or the funeral, so no “charity” bailed them out. It was in 2 recent cases, people in their neighborhood doing car washes and bake sales.
Small chump change for those who needed money to bury a loved one, or money to make someones health improve dramatically.
Either way, charities didn’t help, just the neighborhood folks.
Neither of the 4 examples I can think of got charity help from charity organizations or a wealthy patron.
“Either way, charities didn’t help, just the neighborhood folks”.
Of course I did NOT say ‘charities” I said charity, as in charitable people, such as the “neighborhood folks”. We have them all over our town. No system will save everyone, but many folks believe that letting the government take ‘care’ of them is the solution. Apparently you think that’s the route to take, and that is your right, as is mine to see things from my perspective.
In the tiny town where i grew up, a bake sale/raffle/carnival was held to help the mayor’s family pay for the medical costs associated with his Lou Gherig’s disease.
I find it sad and pathetic for the US that such a debilitating cost and disease should be paid for in such a manner.
Out of curiousity, how many here would support eliminating public education? I know there are issues with some school districts with cost and quality, but that’s not really what I want to delve into. Would people be content to have education be completely private?
I, for one, would not.
And I’ll admit just a wee bit of bias here. Except for a private kindergarten, for which I hope my folks got their money back, I was a public school kid all the way through university. And, more recently, through community college. And my mother is a retired public school teacher.
Furthermore, I make my living off of what I learned in my public high school commercial art and photography classes. And, through public schools, I learned to interact with all sorts of people. Not just those of my social class.
I agree completely. Almost all of my education has been through publicly funded schools. Good public schools are an excellent value and an asset to the country. While there are ways public education could be made better, I would not want to replace it with private schools.
Public schools don’t just benefit you by educating you. They benefit you by educating all the people who provide you with various services and products who happen to have been born to families that wouldn’t have educated them (as well or at all) if not for the public schools. So anyone who thinks they shouldn’t have to pay for public schools better come up with a way to not use doctors that went to public schools or spend time in buildings designed by architects who went to public schools or drive in cars designed and built by people who went to public schools or use utilities whose distribution network was designed by people who went to public schools or…oh, you get my drift.
Schools are infrastructre. Plain and simple. I for one am not willing to leave decisions about a large chunk of that infrastructure to any person who managed to procreate.
“Schools are infrastructre [sic]. Plain and simple.”
You could say the same about grocery stores, or clothing stores, or whatever. You want the doctor who treats you to be well fed and clothed, right? So there should be publicly run grocery stores, and clothing stores, etc., etc., funded by property taxes, and run by nice democratically elected boards, and there should be public meetings to argue about who gets what type of groceries and clothes. I can’t wait.
Those decisions are already being made, and made by people who have NO accountability to you.
If you think you have real choice from your local merchant, you need to get out more often because what you really have are compromises.
I can also speak from personal experience that in a disaster situation, grocery stores have plenty of law enforcement and become temporary government operations.
The health, both mental and physical, of a society has a DIRECT impact on it’s ability to survive.
“So anyone who thinks they shouldn’t have to pay for public schools better come up with a way to not use doctors that went to public schools…”
This is the bogus hypocrisy argument again. Using that logic, anyone who’s against the mtg interest deduction shouldn’t be able to take the deduction him/herself, or interact with anyone who does, etc., etc.
“Schools are infrastructre. Plain and simple. I for one am not willing to leave decisions about a large chunk of that infrastructure to any person who managed to procreate.”
Polly, this is very condescending towards people with school-age children. If you’ve never “managed to procreate” yourself, you may find there’s a little more involved than you realize. And yes, amazingly, in a free economy, the people in the market for a service determine the nature and cost of the service– not government planners.
“Polly, this is very condescending towards people with school-age children”
Tough. The education of the children in this country affects me and my family. I prefer a society where we at least try to get all our new members up to a basic level of education so they can work and function and vote responsibly (also design roads, become doctors and other useful stuff). Not all parents can do that and some who could wouldn’t bother, but that isn’t the fault of the kids they have and the kids shouldn’t suffer for it. Neither should I or my family.
Polly:
Then why do we waste so much time and money on foster care and not adopt kids out quickly?
I agree many people should never have been parents, and those who put drinking drugs gambling etc ahead of their family responsibilities should be shown no mercy.
And even worse we have a Million people who desperately want kids but the plumbing doesn’t work right, and so many kids in foster care who are returned back to the same moron bio parent…
When will we say enough is enough and really mean put the children FIRST?
The law was changed in the 90’s so that is what is supposed to happen - putting the rights of the children to grow up in a loving home before the rights of the parents to control the fate of their kids whether they can take care of them or not. The fact that it doesn’t happen that way is just courts and agencies not doing what they are supposed to do.
By the way, my uncle and his partner don’t have the plumbing, but do have three great kids adopted out of foster care. It works sometimes. The legal formalities took a long time, but the kids were placed with a family looking to adopt years before the process had run its course so the adoption was just a blip in the lives of the kids - they liked getting new last names, but other than that, it was a non-event for them. That is what happens when you set things up sp the kids come first and have enough funding to do it right and not overburden the social workers - Vermont.
I would second it.
There are 2 or 3 resons why.
1. I can choose the quality of the education for my kids. Right now there is a one size fits all mentality. In MA it is the MCAS testing. It test Math and English. What happens to those that want to go to MD school?
2. Cost. Right now public school systems are burdened by an overabundance of administative folks Psychologists, Football coaches, etc , that fight tooth and nail to lay off teachers first. Of course the City complies, as it can say that its only option instead of rasining taxes is to cut teachers and extracurricular activities. Cue in the parents’ screeches of pain as now they have to figure out what to do with the monsters after school…
3. Fairness… Why should people who choose not to have kids, or send kids to private schools have to pay taxes for those who have 10 kids? It would teach some people to think and use a condom if they had to pay for a school. A lot of the housing bubble would have also been avoided in the perceived “better” school districts, as you would also have flexibility of sending your kid to the same school regardless of neighborhood…
4. Competitiveness. A private school system will compete with each other to provide either a better educated person, or a higher percentage of students graduating from college.
Some of you may wonder what happens to those that do not have enough money to put their children through school. I do not have a good answer for that, but there could be charitable schools that are encoraged by tax breaks for companies, or trades schools that are supported by the individual trades.
As a last thought, it would also take care of our immigration issues, as there is no freebie school that they can send their children to.
I posted a week or so ago that DH and I decided to send DD to private kindergaten, as our rental is in one of the worst schools in the district. I was having a hard time reconciling that with my frugal side. Tuition is expensive, and that’s a lot of money that could otherwise be saved for retirement or college.
Well, last night my SIL told me that the public kindergarten classes had 28:1 ratio - and she is in one of the best school districts in the area. ONE teacher in charge of 28 5-year-olds, and furthermore, some percentage of those are ESL students. What will that ratio be when states get serious about budget cuts?
I am a product of the public education system, but evidently standards have changed. I can’t argue for eliminating public education, but man-o-man, its hard to defend it. My daugher will have 13 in her class (no ESL).
Vouchers.
NO vouchers…Why should I pay to send someone else’s kid to a private school? It’s not my fault J6P dont have enough money to do it…
Why should I pay to send someone else’s kid to a private school?
You’re already paying to send them to public school. Assuming the cost is the same, what difference does private vs gov’t school make?
Now if you want to argue against property taxes paying for schools, or at least argue for parents picking up a larger % of the cost, I’m right there with ya. Child tax credit + property taxes towards schools is just grossly unfair for those w/o children.
I wouldn’t support eliminating it.
I too am a product of the public education system. Maybe for me I was lucky to go through school when I did. Teachers were excellent, classes great, counselors that actually cared about what was going on with the student.
As stated here before, I would like very much to see publicly-funded education (and its one-size-fits-all approach) eliminated. The ensuing vacuum would be quickly filled by traditional private schools, as well as co-op schools, tutors, home-schooling, and other approaches we haven’t even begun to think about.
Let parents take full responsibility for educating their children, and let each kid learn what is important and interesting to him or her, and at the appropriate time in his or her life.
Now it’s time for me to put on the asbestos firesuit.
I’m a California public school product, class of
‘60. Because of the advanced placement
program, I was able to skip almost my entire
freshman year. Sadly, those days are gone.
I graduated with Physics, Chemistry, Calculus, Spherical trig, drafting, four years
of shop, and four years of foreign languages.
Everyone at school pushed academics hard, no slackers, and the parents supported the school.
Then the CTA made it’s appearance.
The reason I asked this question is that in my mind, health care and education are very similar in that they both help us be productive members of society. It makes some sense for both to be provided at some minimal level (basic health care, primary education). Is there anyone out there that supports public education but not public health care?
Al …What about the fact if a deadly flu started hitting areas wouldn’t people want people treated so it doesn’t spread and kill us all .
Anyway another point . The private medical insurers are increasingly writing policies that have so many loopholes in them ,its sinister really . Here are some tricks that the Insurance Companies try to pull ,at hospitals anyway (I was at 5 )
(1) Labeling conditions different than what they are ,so they could denied based on the loopholes .
(2) Increasingly getting rid of Doctors in a Insurance pool who
tend to upset them in that they actually treat the patient .
(3) Labeling conditions chronic care ,when its still emergency care or acute care ,to squeeze out of paying benefits .
(4) They have shills hanging out at hospitals ,interviewing
the patients family ,but they are there to try to push the case
to the insurance companies benefit ,even to the point of twisting medical facts ….. In fact ,they like you to talk to them rather than the Doctor .
(5) They send people home to early ,or to a lessor facility ,only for them to come back again ,sometimes DOA .
(6) The hospital will release a patient pre-mature ,just cause they need a bed for a new patient . The first 4 days is when a
Hospital and Doctors make the most money on a patient ,after that the profit margin goes down .
(7) Wrongly so ,they are putting patients who are infectious
in rooms with other patients ,just to save a buck .
(8) Making to many transfers so they can keep charging new co-pays .
(9) They prejudice a case by bringing up already treated conditions ,or ones in remission . It’s really sinister why they do this .
(10) They make it difficult to go to a Hospital other than their choice ,if you are unhappy with them, they make you go
through a big ordeal to make changes like that . Have you ever wondered why Insurance Companies want to define what hospitals and doctors are covered under their policy ,or they give you limited choices .
(11) As i see it the corrupt system puts more time into
paper work ,and it hinders RN’s and Doctors from doing their job ,or what they really might want to do . If a Doctor knows he has to battle a insurance company on approvals or pay-offs ,how much do you think it might influence that Doctor ,likewise if the Insurance Company is more liberal with approvals .
Health care should not be based on the profit motive of a
Insurance Company ,or a Doctor or Hospital for that matter .
Right now IMHO ,to many games are being played ,and it all has to do with money .
What if we went National health care and people had the option to purchase a supplement policy if they want greater care than
reasonable standard care ,but the supplement is run by the same system (not insurance Companies )…..just a thought …haven’t even thought it out yet .
So if your leaning towards being a libertarian, are you willing to give up the benefits you will receive after you leave the service?
Do libertarians even want an armed service? I would picture an all volunteer militia that supplies it’s own weapons to be the only option for libertarians. Even then, it couldn’t have a chain of command so military manoeuvers would be rather haphazzard.
Libertarians tend to see war as a form of socialism– a gov’t-run command-and-control enterprise– and they tend to abhor most of our involvements in foreign wars. How to respond if/when there’s a serious, direct, threat to the country is something of a missing link in the theory, IMO, and something we still need to work on.
Ron Paul has suggested reviving the old practice of granting letters of marque and reprisal in response to foreign threats.
30,000 years of military history is easily available from your local library.
No need to reinvent the wheel.
libertarian schmarian. I still see ppl taking all the benes that are available. I dont’ see libertarians refusing anything based on “their principles”.
First of all, no one was “beating you up” you are the one with guns.
grin.shithowdy,if that made you feel beat up..can I duck behind someone else?grinningagain. Discussion is good and necessary to hone things, fine tune, and better/balance the ‘product/discussion’.
2nd, if you don’t like getting lumped into one basket, don’t do it to others, ie: Far Right wingers are the same as Far Left wingers. FAR.
Hopefully you find yourself a tad more moderate. Balance is good.
Not talking of a battlefield, but at home. Your situation is different
at the moment. Preservation of your life and your buddies.
So, when you use ‘liberals’, that isn’t the FLW, it is to the left of center. You will find many liberals who are fiscally more conservative than you think. We all have to live within budgets, as those to the right of center think as well. Maybe I am incorrect.
Don’t know why post appeared here,reply to stpns input.
You didn’t get beat up for your ideological leanings, you got beat up for coming across as a mindless idiot.
Tim Geithner Can’t Sell His House, Either
After a Price Drop, the Treasury Secretary Decides to Rent His House and He’s Not Alone ABC NEWS
July 27, 2009
The country is finally starting to see some positive signs in the housing market. But don’t tell that to Treasury Secretary Tim Geithner or the countless other Americans who still can’t sell their homes.
Geithner
Treasury Secretary Timothy Geithner bought this home in 2004 for $1.602 million. After a price cut, he is now renting it for $7,500 a month.
After leaving the tony New York City suburb of Mamaroneck to take his new post in Washington, D.C., Geithner put his five-bedroom Tudor home on the market for $1.635 million.
That was in February. By May, he cut the price $60,000 but still got no takers. A few weeks later, May 21, the home in New York’s Westchester County was reportedly rented for $7,500 a month.
So he bought his house in 2004 and wanted to sell it now, in 2009, FOR EVEN MORE now than the 2004 price? My, he is a financial whiz with his finger on the pulse of the markets, isn’t he?
Yeah, you’d think he’d take a little hit, sell it, and move on. (Surely he’s not got a 120% mortgage.) But maybe he’s engaging in Symbolism, showing joe 6pk that a real amurcan toughs it out, renting it out if need be, but always paying that mortgage.
Likewise, if he mails in the keys, it might be time to buy gold.
or maybe he thinks he might be moving back in soon
That’s what I’ve been thinking, for, oh, about six months. Methinks that Summers will also be headin’ out the door soon. Ditto for Bernanke. I think that boy’s next stop will be Princeton, NJ, which is where he came from.
((12 * 7 500) / 1 602 000) * 100 = 5.62% — not a bad return on the investment, really!
Shouldn’t you back out taxes, and insurance from that?
I hear that taxes in that part of the country are brutal. That would impact his bottom line. And I do not think that insuring a 1.6MM property is going to be cheap either.
That is if he owns the property outright. If he has to pay interest on it, there goes your ROI.
You get to depreciate rental property for a big tax savings, but I’m not sure his salary in DC is high enough to make that as valuable as it might be in other circumstances.
“Shouldn’t you back out taxes, and insurance from that?”
And maintenance and vacancy and whatever else. You’re right, and I’ll bet PB knows it. He’s just showing the detailed math done by accidental landlords to justify their decisions.
I was just being lazy, really. I believe you are correct, though — after subtracting off PITI and any other expenses, I would guess the return would be near 0. The picture would only get worse if the capital loss was included in the analysis.
til he finds out they were making meth in the kitchen
Or that the seemingly nice family he rented to turned out to be a bunch of housewreckers.
Verizon profit falls, eyes 8,000 job cuts.
NEW YORK (Reuters) - Verizon Communications Inc posted a lower quarterly profit and said it would cut 8,000 jobs in its wireline business, as weakness in wholesale and corporate segments overshadowed wireless growth.
Verizon, whose shares fell 1.5 percent on Monday morning, said it would accelerate cost cuts in its landline business, with new layoffs amounting to 3.4 percent of its workforce totaling 235,000 employees. They come on top of 8,000 job cuts in the last year.
“Clearly the broader economic issues are affecting the business,” Chief Financial Officer John Killian told analysts on a conference call.
The company said that some of the job cuts will affect contract workers as well as internal employees. It did not break out the split.
In addition to short term cost cuts Verizon would “also need to more significantly reduce the wireline cost structure over the next 12 to 18 months,” Killian said.
Verizon’s second quarter results were largely in line with Wall Street expectations. While revenue rose 0.2 percent in its mass-market landline segment, including home phones and small businesses, that was offset by declines in the wholesale and enterprise business.
Operating revenue rose 11 percent to $26.86 billion in the second quarter, and compared with the average analyst estimate of $26.85 billion, according to Reuters Estimates.
I just had to deal with verizon tech support.. Oh my!
Where do I start? Do I start with the Indian dude who barely understood my issue (DSL is not working, yet my phone is?) or with the fact that they “promise” to have everything “fixed” in 24 hours, and 5 days later it is still broken?
Or the fact that a really good tech (not kidding, the guy was good) tested every single connection from my house to the COLO, and yet once we got into the “cloud” i was not able to get anywhere?
To the fact that when I contacted the network team, they decided that it was my modem, that had been checked by aforementioned good tech guy, with 2 other brand new ones, and had the same issue?
Out of the whole mess, we dealt with 1 good tech (that finally fixed it after calling him direct) and 7 or 8 terrible ones. Knowing how the verizon union works, they are probably going to cut the good tech and keep the other 8 bozos….
Man it is something I do not want to experience again!
You always cut the guys who are good. They seem to think they deserve more money and promotions.
Dunno why they think they do.
Aren’t ya happy the Wireless side rejected the union a few years back?
WASHINGTON (Reuters) - Sales of new single-family homes in the United States rose more than expected in June, while the inventory of homes for sale fell to a more than 11-year low, government data showed on Monday.
Sales rose to an annual rate of 384,000 in June, the Commerce Department reported, up 11 percent from May, while the number of new homes still for sale fell to 281,000, the lowest since February 1998.
“The data will reinforce the developing thinking that housing market has bottomed and that the economy has stabilized and will grow in the third quarter,” said Jim Awad, managing director at Zephyr Management in New York.
“In the cocktail of the market, it will be viewed positively and will add credence to the bulls, who think we will have a rebound in the markets going forward,” he said.
Despite the encouraging data, the median sale price for a new home fell to $206,200, down 5.8 percent from the previous month, and down 12 percent from a year ago.
““In the cocktail of the market, it will be viewed positively and will add credence to the bulls, who think we will have a rebound in the markets going forward,” he said.”
I’m sure glad of that! Let’s get the uneducated buyers out there spending every last dime they have and then maybe we’ll start to see some real changes. Saw an open house this weekend that was $599K with a sub-floor that needed replacing, needed a new shake roof and was on a one acre parcel about 5 miles from the nearest grocery. People were looking, but all were dressed and looked like they would qualify for the affordable housing program.
I’ve heard from two people over the weekend that the housing mess is over.
Talk about deluded.
Did you see the upcoming Newsweek cover proclaiming the recession is over. I’m canceling my subscription.
“More than expected”, yet the stock market is not rocketing straight up on this news?
WMBZ,
I remain baffled. We are off peak annual new home sales of 1,200,000 - down 75%. So a month-on-month increase of 11% pushes the market even higher?
Foreclosures are coming in at 10,000 per DAY - eclipsing new home sales. Don’t even bring up the average sales price and shadow inventory.
Hey - Dennis called it. Peww
Good morning from Richmond, VA. I made the 13 hour drive up yesterday from Florida. A few things I saw along the way:
1. There are many, f’ed developments in Central Florida. We all knew that, but to see it from the road is an entirely different experience.
2. My path took me by Jumbolair, with is the airport home community in Ocala where John Travolta drives his 747 up to his house. Talk about specialized housing. I have to admit that there is something special about Ocala. I was there around sunrise, and seeing the fog, driving through the canopies…
3. The MASSIVE amounts of huge tracts of land in S.C. Low Country ‘For-Sale’ is staggering. I think one sign said 12,000+ acres.
4. I didn’t see much out of place in N.C.
With respect to your #3, keep in mind that the population of the Atlanta metro area is greater than the population of the entire state of South Carolina.
Those large tracts of property along I-95 are going to remain vacant for many years to come.
You’ve got that right, Bill. After all, who in their right mind would want to live right next to 95?
Personally I’m a big fan of massive…. tracts of land.
Packman, do you prefer low country, or high country?
You left out big country.
http://www.youtube.com/watch?v=j21ULe2hrY4
Yes, I also left out swamps, tundra, hinterlands, etc.
or the backwoods
Lots of good stuff on the SD condo market, but some of it maddening:
http://www3.signonsandiego.com/stories/2009/jul/26/1h26condo233719-top-down/?uniontrib
“Not all high-end condo dwellers are as happy with their buying decisions as they expected. One example is Tom Paschen, 52, who in 2005 moved from Orange County with his wife Lee to a 28th-floor unit in the Grande at Santa Fe Place, just west of the Santa Fe Depot downtown.”
“Since then, the monthly homeowners association dues have risen from $726 to $806; the market value has not improved markedly from the $1.65 million purchase price; and no one has made an offer in six months on the Paschens’home, listed for $1.68 million.”
“Paschen also complains about homeless people on the streets and deferred maintenance on downtown public infrastructure. He hopes to sell and buy a house in Mission Hills. From an investment standpoint, when you look at things, maybe it would be a smarter investment,” he said. “It might cost a little more, but it won’t lose value.””
Looks like someone’s ARM is about to reset and he can’t get out. He bought it right at the peak, now after four years of steep declines is trying to sell it for more than he paid and seems surprised that he’s had no offers after 6 months! Most of the other complaints are bogus. A 10 percent rise in HOA fees over 4 years should be no big deal. The homeless and downtown infrastructure problems were no different when he bought. Does he really believe that if he’d bought a house rather than a condo at the height of the biggest real estate bubble in history that it wouldn’t have lost value too?
“Some condo sales go through because buyers pay all cash. That was the case for Prudential California agent Barbara Leinen Weber, who received two all-cash offers within one week of listing a $592,000, 800-square-foot condo on Prospect Street in La Jolla.”
That’s almost $750/sqft!
““We’re going to see the pool of buyers just dwindling,” predicted mortgage broker Dave McDonald, after toting up these new rules and guidelines. He said that if underwriting is not loosened up, it may take many years, if not decades, before San Diego’s resale condo median rises to $400,000 once again. The June median was $210,000.”
Loosening won’t help and yes it will be decades, if ever, before some condos return to their 2005 inflation adjusted values.
San Francisco Chronicle
California values prisoners over students
Charles B. Reed
Monday, July 27, 2009
During the budget debate, it became clear to me that something unthinkable has happened in California: Our fiscal meltdown has so distorted our legislative priorities that we are now a state that places a higher priority on prison than on higher education.
…
Thanks to the state’s $26.3 billion deficit, the California State University is anticipating a $584 million revenue shortfall for 2009-10. Overall, state general fund support of the CSU is expected to be approximately $1.6 billion, or about $600 million less than the level of state support provided a decade ago. But the CSU - the country’s largest four-year university system - has about 100,000 more students than it did 10 years ago.
The CSU’s plan to address the funding deficit includes employee furloughs and reduction in workforce, a 20 percent student fee increase, and other cost-cutting measures across the system. Additionally - and most regrettably - the CSU must now plan to reduce its enrollment by 40,000 students systemwide for 2010-2011.
The idea of turning away students is anathema to those of us who revere California’s Master Plan for Higher Education and its once-proud tradition of accessible, quality higher education for all. It is a sign to me that California has completely reneged on its promise of opportunity to its people.
On the flip side, consider that California’s prisons set the state back more than $10 billion per year. The proposed plan to release 27,000 prisoners would move to home detention those prisoners with a year left on their sentences, as well as the elderly and infirm, and change sentencing and parole rules for inmates who show promise of rehabilitation. But inconceivably, for some policy leaders in Sacramento, the idea of setting those people free is more unthinkable than denying 40,000 students the right to higher education.
…
I’d much rather spend money educating people than imprisoning them. Perhaps when cutting the CSU budget they could start with the remedial classes. I think one could argue we still have too many people going to college, not too few. I’d be more concerned if those that should go weren’t able.
Greg, Professor:
What about a Radical idea?
Lets force schools to teach to higher standards, so a HS grad can get a real job and wont “need” to take remedial course to get into college. That would eliminate lots of “students” We need to make a HS mean something …Also eliminating most summer vacations is a good idea too…
then we can close 1/3 of the colleges because they are not needed.
Also make unemployment checks tied to going back to school for some refresher courses or new job skills.
You won’t get an argument against that from me. I want the talented and motivated students going to college, not those that slid by in high school. For some, there should be more emphasis on learning vocational skills instead of going to college.
I’d be just as happy having educational as work requirements for getting welfare or for getting unemployment beyond a certain number of weeks. However, that education needs to be for marketable skills and there needs to be funding for that education. If most of one’s income is welfare or an unemployment check, there’s probably not enough left over to go to school.
If students just took all 4 years of the English, secondary level math, foreign languages and science that were available at my HS they’d pretty well educated.
“Any program in which the federal government not only provides the ‘funding”‘ but also regulates the ‘costs’ is going to be socialist.’
~Wm. L. Anderson
Report from San Diego coast. I’ve been considering moving to one of the north county coastal towns like Carlsbad or Encinitas and just spent a couple of days driving around. I noticed a distinct lack of for sale signs. There were only one or two within a number of blocks, when in past years, they seemed to be everywhere.
Since there weren’t many signs, I started focusing on homes that looked vacant, and saw a number that fit the profile. Not all in a row, but 1, 2, or 3 homes peppered through most of the blocks.
Other than that, prices on the homes formally listed are a bit lower than before, but still in the stratosphere. No real bargains. If one is noticeably lower, it turns out to be in a cruddy area, on a super busy street, or something equally detrimental. I’ve been hearing rumors recently (someone who knows someone, kind of stuff) that “foreclosures are coming” to the area “soon”.
Although I’ve been looking in this area for years now, it still shocks me how much the asking prices are for very modest homes. I know you “pay for the weather”, and I’m willing to do that to some extent, but this is ridiculous. The term “mania” has been used often on the HBB, and I’ve always agreed, but driving the streets and seeing the small homes and their unbelievable prices up close, really underscores how completely insane this all has been.
Question for those in the know, what’s the best way to check into the vacant looking homes? Do the research yourself, like try to find out who, or which bank owns it, then see if you can look at the property and make them an offer directly? Or, do you just get a realtor to do the work for you, since they probably have the information already? (I feel the same about realtors as most on the board, but happen to know of one that isn’t too bad, so I might be ok with working with him.)
Newt,
If you’re looking in that area then you must be following Jim The Realtor at bubbleinfo dot com, yes? He seems well in touch with the local scene and he’s funny & honest, I think.
makeschips,
No, I havent been following Jim the Realtor, but it looks like a good reference. After a brief look, info on the site confirms some of my observations. Thanks.
“I noticed a distinct lack of for sale signs. There were only one or two within a number of blocks, when in past years, they seemed to be everywhere.”
Same could be said about our ‘hood (Rancho Bernardo West — 92127). A couple of summers back, For Sale signs were ubiquitous and UHS were out in droves every weekend posting Open House signs. Now it is as though the UHS industry has collectively thrown in the towel — no For Sale signs, and few Open House signs on the weekends.
‘Although I’ve been looking in this area for years now, it still shocks me how much the asking prices are for very modest homes. I know you “pay for the weather”, and I’m willing to do that to some extent, but this is ridiculous.’
I feel exactly the same way. I am not willing to make a purchase anywhere near yesteryear’s bubble price level.
My attitude is that I’m unwilling to finance someone else’s retirement with my actual cash.
Few homes for sale in Poway and prices still very high. I should say few homes for sale under 500K
Try searching on ForeclosureTown dot com (Poway zip code = 92064). I just did; there are 207 foreclosure listings there and thousands more within a 25 mile radius of 92064.
“Question for those in the know, what’s the best way to check into the vacant looking homes? ”
Go to ‘Trulia.com’ and ‘Redfin.com’ and type in the cities that you are interested in. Move in close on the map and move it around, you’ll be surprised at what the market looks like.
Home foreclosures take nasty turn in NW Michigan
TRAVERSE CITY — The sun beats on a yard of weeds and sand at the Hitzeman place in East Bay Township. Towering sugar maples once shaded the corner lot, but those were cut and sold. The house was stripped of part of its aluminum siding; copper plumbing and wiring were yanked out, too. Neighbors helplessly watched as the owners, who faced foreclosure, stripped, sliced and sawed to create an island of desolation in a close-knit neighborhood of well-tended homes. Neighbors discovered there was little they could do as trees, siding and other valuables disappeared. They called the township, police, banks, and county prosecutor, to no avail. “The problem was the (lender) wasn’t interested in pursuing criminal charges,” the county prosecutor said. “It might qualify as common law mortgage fraud, but it has to be on the complaint of the bank, not some third party.” The township had no authority to intervene, Supervisor Glen Lile said. Before the housing market collapse, Green Lake Township supervisor Biondo typically called the bank that owned the property, and they’d generally clean the site. These days, banks sometimes don’t even know they own the property, he said. “There are so many foreclosures now, the banks just aren’t on top of it the way they used to be,” Biondo said. The stripping of wiring and other valuables finally stopped when neighbors confronted Mark Hitzeman as he pulled aluminum siding off the house. Some neighbors were irate and harsh words were exchanged, Goodwin said, but they stayed off Hitzeman’s property. Mark Hitzeman stopped removing aluminum siding after the conversation, packed up and left, Goodwin said. One side of the house remains partially sided.
There’s a foreclosed house a couple of blocks away. Vandals have already trashed the mailbox and ripped out the post that it was mounted to. I’ll bet that they’ll be starting on the house soon.
cutting down mature sugar maples is just evil
Darn straight. Geez, what kind of moron takes his rage out on trees ?
sounds like they sold them- it’s worse than rage, it was just for a buck
In these days of flipping, absentee landlords, and moronic homeowners, it’s sad how many great trees are cut down. 100+ year old trees cut down by someone who owns the house for a year or two. I’m sure the libertarians will attack me, but I think you should need a permit to remove any mature tree in a town or city, and show better cause than ‘I don’t like raking leaves’. If you don’t like big trees, don’t buy a house that has big trees. God knows there’s plenty of them.
“If you don’t like big trees, don’t buy a house that has big trees.”
I loved the trees in my yard. Then my neighbor lost about 12 trees in one ice storm. We listened to them come down all night. What a horrible sound.
From that point on the 100 footers on the side of my yard had a target on their back. Between my daughter whose room was on that side of the house and my elderly neighbor on the other side of the street, I always wondered if someone was going to get crushed every time we were hit with major storms.
The trees are still there but having sold the home, I’m really glad they’re no longer my responsibility.
I’m not saying no trees can be cut. Just that you shouldn’t do it for the heck of it. (Like to make it easier to mow, or to keep the birds from pooping on your car.)
I have a childhood friend that’s a developer and his group has been savaging the country side for 3 decades. They have never done a housing project where they didn’t take down damn near every tree. Sad and sickening to see.
Finally most of our counties have some green area rules, not much help but better than it was.
P.S. You should see the trees on this developers lake spread, beautiful lives oaks, maples, pines etc. Funny how that works.
Trees (even street trees planted with public money) also have an odd way of disappearing or ‘dying’ when they’re in front of businesses or billboards.
Municipalities put in some really bad street tree choices over the years….
In Palo Alto long ago, it was a priority to make the town attractive to East coast faculty members and their wives so that Stanford could raid them. In order to match the “fall color” aspect - which doesn’t happen in warm California autumns - arborists developed a hybrid of the Chinese sweetgum tree, later entitled “Liquidambar Palo Alto”. These trees were planted all over Silicon Valley.
Well the leaves turned bright red and yellow in the fall, but as these trees grew up they showed a sinister side effect: terribly invasive shallow roots that tore up sidewalks and streets.
Nowadays San Jose won’t let you remove a mature Liquidambar PA. They also BILL YOU when the sidewalk and street buckle. You the homeowner are screwed.
Can’t you poison the tree somehow?
Our HOA has had a tree removal program for the past couple years because the developer planted the cheapest, most invasive trees possible, including ficus and liquid amber, which lift the sidewalks. If you have a ficus near the foundation of your home you need to remove it immediately, the roots will go after your sewer lines. The replacement trees that the arborist recommended include crepe myrtle and strawberry guava. Of course, these selections may not work in your particular climate zone.
Hey, free money to buy houses!
WASHINGTON - Looking to buy a foreclosed home? There are new incentives.
Starting this month, the U.S. Department of Housing and Urban Development is kicking off a new program to sell vacant, bank-owned foreclosed properties that are weighing down neighborhoods across the country.
It’s called the Neighborhood Stabilization Program. Counties, such as Prince George’s County received the largest pile of money - $11 million dollars - to entice home buyers to purchase foreclosures in certain zip codes.
Fairfax, Prince William and Loudoun counties also received grant money from HUD.
Using the federal dollars, counties will loan home buyers up to 3.5 percent of the sale price of the home or a maximum of $15,000 as part as your down payment.
In only a dozen designated zip codes in Prince George’s County, a potential home buyer would receive up to 7 percent, or $20,000.
Michael Chelst with America Home Key says depending on income, “some potential home buyers can get into a home, with only a $1,000.”
Chelst says you don’t have to re-pay the loan if you keep the house for at least 10 years. If you do sell, you only have to pay back the loan, interest free.
Who qualifies? You need to be a first-time home buyer and receive under 120% of the median income of your area.
http://wtopnews.com/?nid=226&sid=1418100
If this program used the Habitat for Humanity model — screen the heck out of the applicants and require the successful ones to work a certain number of sweat equity hours — it could work quite well.
If by “work quite well” you mean PISS PEOPLE LIKE ME OFF WHO OWN A HOME AND NOW HAVE TO FOOT THE BILL FOR OTHER PEOPLE’S FREE MONEY
…then yeah, it’ll work great.
Whatd’ya know: If the government uses all manner of extraordinary, taxpayer-subsidized, market-distorting incentives to goose the housing market, home sales increase by “more than expected.” Who’da thunk?
Economic Report
Jul 27, 2009, 11:49 a.m. EST
New home sales unexpectedly shoot up 11% in June
Sales post largest rise since November 2008
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — Sales of new homes in the U.S. in June rose by the biggest amount since November 2008, climbing by 11% to a seasonally adjusted annual rate of 384,000, the Commerce Department reported Monday.
The report was stronger than expected and provided more evidence that the housing market has improved, analysts said.
Economists surveyed by MarketWatch were predicting a modest increase in new-home sales to 355,000, annualized. See Economic Calendar.
“The evidence continues to grow that single-family housing activity has bottomed out,” wrote John Ryding and Conrad DeQuadros of RDQ Economics.
…
Prediction: Thanks in part to all the housing market bottom calling currently underway, recent buyers who responded to government incentives to buy a home are likely to be surprised and disappointed to see their windfall incentives largely offset by another leg down in prices before the housing market recovers.
While I was bicycling around town yesterday, I came upon a “For Sale” sign with an $8,000 first-time homebuyer rider. In addition to giving the $8k figure, the rider said that now is a GREAT time to buy.
However, this rider was attached to a “For Sale” sign in Tucson’s Sam Hughes neighborhood. This is a move-up neighborhood with more than a little prestige. It’s right up there with the Tucson Country Club, El Encanto, and Colonia Solana. None of these areas are first-time homebuyer neighborhoods.
It appears that if one is of the stuff to actually be able to close nowadays, builders/sellers have no problem now with throwing a buyer a bone.
Kinda like those “hero” discounts. The ads show fireman and soldiers - but any buyer can probably get it if they just ask.
AZ slim,
You are not thinking like a new age family OR business… just like the builders that go BK or have there license yanked. Only to start a new business with lic. in spouse’s name .
The new age family will with a BK will just have the adult kids apply for first time home buying of the home of choice.
FYI, I am a bike rider also, from Michigan {AA area} working in CA. Over weekend tried to bike up Mt.Diablo north of me here.
Once finished lots have been exhausted, new home starts will dry up (and so will sales). In some markets, it could be 12 months, in other markets it will be longer.
At today’s prices, it does not make economic sense to buy raw land, get it entitled/improved, and build a home on it.
The only reason builders are building anything today is because they can buy small numbers of lots at less than replacement cost (or already own them), and can move through the land by building homes and selling them at prices that compete with foreclosures.
Rebalancing the world economy: America
Dropping the shopping
Jul 23rd 2009 | WASHINGTON, DC
From The Economist print edition
Can America wean itself off consumption? The first of a series on how the world’s four biggest economies must change to ensure sustainable global growth
GENERAL ELECTRIC has historically been a manufacturer, but in the long boom leading up to the financial crisis it became more like a bank. Half its profit came from its finance arm, GE Capital, which among other things had a lucrative business issuing mortgages and credit cards to American consumers. GE’s chief executive, Jeffrey Immelt, now talks like a man chastened. With GE Capital acting as a drag on the company, he vows that in the future finance will be a smaller part of the company. In its place GE touts its manufacturing and exporting prowess. Mr Immelt boasts of record aircraft engine orders at the Paris Air Show in June, none of them to American airlines.
Like GE, the entire American economy is at an inflection point. For decades, its growth has been led by consumer spending. Thanks to rising asset prices and ever easier access to credit, Americans went on a seemingly unstoppable spending binge, fuelling the global economy as they bought ever bigger houses and filled them with ever more stuff. Consumer spending and residential investment rose from 67% of GDP in 1980 to 75% in 2007 (see chart 1, left-hand side). The household saving rate fell from 10% of disposable income in 1980 to close to zero in 2007; household indebtedness raced from 67% of disposable income to 132%. As Americans spent more than they produced, the country’s current-account balance went from a surplus of 0.4% of GDP in 1980 to a deficit of almost 6% in 2006 (see chart 1, right-hand side).
…
A question, and this one goes out to all the HBB economic historians: When did the U.S. economy become so dependent on consumer spending for growth?
I seem to recall, that, as recently as the 1970s, the consumer spending share of the U.S. economy was around 50%. Nowadays, it’s around 66-75%.
And, IIRC, the Japanese economy is still only 50% based on consumer spending.
Please feel to correct the above figures.
Can’t say for sure - but it seems like the delta between consumption and production could be measured in the trade imbalance, wouldn’t it? Assuming so - this is probably a good indication.
The trade imbalance is correcting at a stunningly fast rate. Not sure of the macroeconomic implications, but it appears that we are currently on a trajectory to correct an imbalance which developed over the 33 year period from 1975-2008 within the span of a couple of years.
Not sure if you’ll read this or not - but the problem is the imbalance isn’t due to increased exports on our part, but decreased imports. Once our economy gets “back on its feet again” I’m sure the importing will start en masse, especially given the additional shackles being placed on American industry by the current administration and congress.
Meant to say “..the problem is the improvement in the imbalance isn’t due…”
Is it even a choice?
Both economically and environmentally, the boom economy was unsustainable. What is sustainable, however, is a belief among many that trees can grow to the sky.
GE’s Oil & Gas division, in the town where I currently live (Oshkosh, WI) announced over the weekend it’s laying off 93 people, or 1/3 of its permanent employees. This is due to a slowdown in natural gas turbine and compressor orders.
The company characterized the layoffs as “permanent”, not temporary…
The next shoe to drop… credit cards?
Agora5 7-26-09
By the time this is all over, another 14% of the $1.9 trillion U.S. consumer debt market will default, the IMF predicted over the weekend. That’s another $266 billion in coming losses for American mega banks. The IMF (not known for their worst-case scenario forecasts) expects $172 billion in similarly soured loans in Europe.
Of those bad consumer loans, credit card defaults are rising fast. Credit card charge-offs, loans that banks don’t expect to ever be repaid, have risen to a record 10.7%. Moody’s, the steward of this particular data, says charge-offs will continue to rise until unemployment begins to abate. By their estimate, joblessness will peak at 10% next year and credit card charge-offs will top 13%… both rosy projections.
And in terms of total soared bank loans, we’re already in uncharted territory. By the St. Louis Fed’s best guess, charged-off loans already account for 2% of the total loan assets of U.S. banks… a record high that’s still soaring into the stratosphere:
Seven more banks failed over the weekend, bringing the 2009 running total to 64. Georgia remains the bad bank capital of the U.S., with six of banks shuttered late Friday. Waterford Village Bank of Clarence, N.Y., took the seventh spot.
The FDIC has spent more than $13.5 billion this year keeping banks afloat, roughly half its total war chest.
The bank of I.O.U.S.A. is still doing what it does best. The U.S. government is set to issue a record $115 billion in debt this week. They’ll cut $6 billion in 20-year TIPS today, $42 billion in 2-year notes tomorrow, $39 billion in 5-years Wednesday and $28 billion in 7-year notes Thursday. Heh, notice how readily Uncle Sam writes those short-term IOUs. And only $6 billion in long-term, inflation-protected paper? It’s as if he were afraid of betting against inflation.
The government will use some $1 billion of its debt sale proceeds to finance the “cash for clunkers” program, which officially starts today. Ugh… in case you are unfamiliar with this madness, here’s the gist: If you own a car (must be “drivable” and made after 1984) that gets less than 18 miles per gallon, you can get up to $4,500 in government money if you trade it in for a car that gets at least 22 mpg.
Already own a fuel-efficient car or have no trouble affording your gas-guzzler? Like every crisis bailout in the past few years, those who made prudent financial choices will get nothing more than the prideful self-assurance that they’re not total jackasses.
And get this: Chrysler — you know, that bankrupt automaker — announced last week that it would offer “cash for clunkers” buyers an additional $4,500 in “free money” or 0% financing. Have they learned nothing?
“The flipside of cash for clunkers is this,” adds Dave Gonigam, one of our fine resident thinkers. “How many people still driving a ‘93 Monte Carlo can really afford to buy even something like a stripped-down Ford Focus? I predict this program will have only a marginally higher number of takers than Hope for Homeowners, another feel-good boondoggle that can’t even accomplish its stated goals.”
The word “retarded” is a perfectly good word, but this will annoy a bunch of folks. You would think in this PC world we live in at least one clown in the house would have noticed it.
‘RETARDED’ HOUSE BILL
July 26, 2009
The proposed health-insurance bill from the House of Representatives refers to mentally disabled people as “retarded” — a term advocates, relatives and physicians find outdated and offensive.
The bill refers to: “A hospital or a nursing facility or intermediate-care facility for the mentally retarded . . .”
The phrase could cause more problems with groups for the developmentally disabled, who were angered when President Obama referred to his poor bowling skills on “The Tonight Show” as “like the Special Olympics.” Obama later apologized.
Not a huge problem with a proposed bill as it can be fixed with a global replace, but I bet they didn’t finish running the text past all the normal legislation experts that check for imprecise or outdated language.
Too many people wayyyyyyyy too thin skinned. It’ll get changed.
Engineering is getting dragged into the PC world - and I’m not talking about personal computers either.
There’s a big push on to replace the terms “master” and “slave” on things like databus and LAN design. Pretty soon automotive engineers won’t be able to talk about an “advanced” or “retarded” spark plug timing.
Too funny - now our euphemisms are getting replaced by euphemisms.
Next thing you know they’ll be calling the Central Bank (formerly known as the “Hive of Scum and Villainy”) the “Federal Reserve” or something stupid like that - LOL.
sigh….
Looked at a patio home with a nice enough non-pushy realtwhore yesterday. It’s been on the market for nearly 400 days. The folks that lived there died and the ‘kids’ are trying to sell it. I asked the fellow how things were going, he said slow and had been for more than a year. I asked had the $8000.00 dollar credit had any impact that he could tell. He said ‘a little’ and that he new of a good number of people that would like to buy but are having trouble qualifying for conventional mortgage loans.
Why, was my next question. Answer low credit scores, debt ratio way to high etc… Of course I said that the damn prices were still to high in our area, for our average income, which is around $38,000.00.
Answer, yea there’s that too!
The real estate situation has a long way to go,the flip-tards and specu-vestors will not be back in droves as so many are hoping for. Reality will set in at some point, but with D.C. ‘central planning’ jiggering with the entire market it’s bound to stay screwed up for a long time to come.
Health Plan to Treat Blue Dog Syndrome
by Scott Ott
(2009-07-23) — House Speaker Nancy Pelosi, D-CA, today announced a new provision to the massive health care reform bill that would provide treatment for so-called Blue Dog syndrome which she said has afflicted members of her own party.
The condition causes a rash rejection of legislation that includes new expenditures without compensating cuts. Recent outbreaks threaten to cripple major Obama administration initiatives.
While the cause of Blue Dog syndrome remains mysterious, experts think it may originate in a lawmaker’s home district, and spread by face to face contact with voters.
“If we don’t suppress it early,” said Rep. Pelosi, “we risk a pandemic that could threaten our way of life.”
Derivatives Bill…
WASHINGTON (Reuters) - Congress will consider steps to curb speculation in the $39 trillion credit default swaps market and could prohibit investors from speculating on a borrower’s credit quality, according to a U.S. House of Representatives Committee document obtained by Reuters.
Congress and the Obama administration have been pushing for oversight of the market since insurer American International Group Inc’s near-collapse because of its exposure to credit default swaps. The swaps are used to insure against debt defaults and speculate on a borrower’s credit quality.
The House Agriculture and Financial Services committees will consider two options to curb speculation including a ban on so-called naked credit default swaps — swaps for which a trader or investor does not hold the underlying asset being insured, such as a bond.
The other option would require derivative dealers and investment advisers that manage in excess of $100 million to report their short interests in credit default swap contracts to the appropriate regulator, according to the document.
The derivatives bill is part of a broad overhaul of U.S. financial regulation sought by the White House and Democratic lawmakers in the House and Senate.
The House is expected to begin debating this week a separate measure that would give shareholders the right to cast nonbinding votes on executive compensation at publicly traded companies.
Policymakers have been broadly pushing for oversight of the $450 trillion over-the-counter derivatives market, which includes the credit swaps.
The bill would give regulators authority to set position limits on dealers in credit default swaps, or CDS. It would also shift oversight of ICE Trust Clearinghouse from the Federal Reserve to the Securities and Exchange Commission, the document said.
Be Ready When the Market Tops
By David Grandey
All About Trends
July 27, 2009
The S&P 500 jumped another 4.13% last week — can this rally continue? It’s time to gauge where we stand today, and what to look for this week in the markets.
From where I’m standing, the market looks very overbought right now. That means that after the last three consecutive weeks of rallies that we’ve just experienced, the market is currently at risk of topping off and heading back down. But technical analysis is more than just speculation, so it’s time we look at a chart…
While we usually use the Dow, OTC Composite and S&P 500 charts to get a glimpse at what’s going on with the market at large, today we’ll be looking at the Wilshire 5000 and the S&P 500 for a view from the top.
It doesn’t take a rocket scientist to see that major indexes have come a long way, and are now sporting major bearish technical indicators. But you sure wouldn’t know it by watching TV.
Traditional Wall Street “buy and holders” would do themselves well by taking note of this…
When the markets see bad times on the horizon (forward thinking) they run the markets higher. Why would they do that you ask? So the big, smart money that is never on CNBC can get out.
Said another way: You have to sell peanuts when the circus is in town — and one look at the last 10 days suggests that the market is the high wire act currently on stage.
Looking at the daily charts of the indexes, as well as a number of Investor’s Business Daily leaders, all we see are peaks and stocks in overbought territory.
While we aren’t seeing anything but a peak on the daily charts, we sure are seeing topping/bearish structure in the shorter-term frequencies — not just on the indexes but also in leading stocks.
So, what’s the bottom line right now?
The real test will be what happens after a pullback to initial breakout levels. Will we see a bounce? That bounce is what you really want to watch for, as more often than not the markets have a way of testing and returning to the scene of the crime.
If we are going to top in the next week or two, then a pullback of the recent breakouts are in order with another move up to put in a top.
But, but, bbbut, almost all the economists are saying the recession is over.
The recession may be over, but does the recovery justify the equity prices?? I would say no, and that’s how I’m going to trade.
Disclaimer: don’t take advice from me.
Commentator on 60 Mins last night said he sees 50% coming back off the latest advance. Not off the total, just off what has gone up since March.
“the Austrian school of economics…has been insistent all along that the whole Federal Reserve modus operandi of creating excess money and credit was…a big, stinking load of bankrupting inflationary stupidity.”
-Mogambo Guru
“stupidity” greatly underestimates intent. These ain’t no retards.
Does the Mogambo or anyone else have a proposal for a better banking system than the one we have? Because bitchin’ and moanin’ about the status quo is pretty much an exercise in futility if you don’t have anything better to suggest? (Of course I know Mogambo is a gold salesman, so perhaps that is his main motivation…)
Y’aall will appreciate this. We just bought a new car for my wife ( $18,200 w/ $24,800 sticker price- 4cyl foreign sedan) I wanted to buy it before the clunker bill kicked in,hers doesn’t qualify, and when business picks up they might not deal. Anyhow, no one seemed to be working in the dealership one receptionist one salesman ( two kids) I tell the kid I’m paying cash and he asks me how much I want to put down, I’m not kidding!. I left and came back when a grown up was there. I bought it and go down today for some paperwork and the manager wants to speak to me, OK. He asks why I’m paying cash and I tell him that the banks are giving me zero int. so why not? ( we bank the payments that we stopped paying years ago) He then explains that a car loses 20% of its value when it leaves the lot,WTF. I say, “ok, keep the car, I’ll go buy one two years old” He shut up and we’re picking it up tommorrow. I still can’t figure out what the moron was getting at.
He was trying to sell you a loan using whatever dumb reason he could come up with (even it didn’t make any sense).
Yeah. Sounds like he was trying to imply that since the car is worth $14,400 once you leave the lot, you are better off having an $18K loan outstanding pay x% interest than having $18K less cash in your bank account. How very odd.
you are better off having an $18K loan outstanding pay x% interest than having $18K less cash in your bank account.
What if it was a 0% loan?
Then it is a bit of a wash assuming you like having loans hanging over your head. At some level, I just prefer to pay ‘em and get it over with no matter how low the interest. For example, I pay off my car insurance bill when it arrives twice a year even though you can pay over a few months without charges. Who wants to receive or have to remember to pay another bill?
But if they offer you a 0% loan, you can try to say, “no but I’ll take the extra discount instead….”
No, it was 4.9%. I was really starting to think I was missing something. It made me think of 105% home mortgages and walking away. In this case, he made me think of walking away BEFORE I bought it.
The managers are even “stupider” than the sales guys. I once was in the position of getting a company car but due to production delays at Ford, my company decided to have me visit a local lot instead of buying through the leasing company.
Found a car I liked with a great salesguy who also happened to be just back from Iraq. I get the VIN so my company can order it from them. I told the salesguy I don’t have the authority to buy it right there and then, but will have company call them in the morning. When he tells the manager this, the manager forbids him from giving me the spec sheet with the VIN. So childish. Never mind the fact that I could have come back later, gone out to the car, and written down the VIN myself. Manager lost the sale that the salesman (that I really wanted to help) had already closed. What a d!ck.
So, I went elsewhere. Then I went home and showered.
I say, “ok, keep the car, I’ll go buy one two years old” Oh I love it
Yep drove a friend once to buy his car. Cash purchase. Finance manager can’t believe how “unsophisticated” my friend is.
What Big said, and the guy almost screwed himself in the process.
When you get a loan, you are on the hook not only for the amount of the loan, but the interest as well.
It truly amazes me the number of intelligent people that this simple fact seems to escape.
YOU are RIGHT…miss 1 payment or be late 1 day and that 0% becomes a 12% loan overnight and you are stuck…
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It truly amazes me the number of intelligent people that this simple fact seems to escape.
Hey Olygal, I used the word phytosanitary in a sentence for the first time ever today.
How to make the Fed as politically capture-prone as possible: Make it the sole regulator of the fraudential sector.
JULY 28, 2009
Revamp Could Hurt Central Bank, Warns Head of Philadelphia Fed
By JON HILSENRATH
Charles Plosser, president of the Federal Reserve Bank of Philadelphia, expressed reservations about the Obama administration’s plans for rewriting the nation’s financial regulations, saying it could leave the Fed with an ill-defined role as bank regulator and make it less effective at its main job of fighting inflation.
Mr. Plosser is one of 12 Federal Reserve regional bank presidents who have a say in Fed decisions about interest rates and bank supervision. His comments were among the most skeptical yet from a Fed official on the Obama plan. “You don’t want an institution that is so heavy into other things that it fails to do its appropriate role on the monetary policy piece,” Mr. Plosser said in an interview Monday, emphasizing the primacy of the Fed’s job in promoting price stability.
Federal Reserve Bank of Philadelphia chief Charles Plosser said the Fed may raise interest rates in the ‘not-too-distant future’ to combat inflation. Above, he is seen taking part in a panel discussion at the University of Delaware in January.
Mr. Plosser expressed some discomfort with the plan to designate the Fed as the overarching protector of financial stability. “I would feel more comfortable with this if I had a clearer statement of what it is we’re expected to accomplish,” he said. “I want that authority defined in a way that protects the independence of monetary policy.” Mr. Plosser’s concerns are notable because they come from within the Federal Reserve system.
…
Wall Street Journal
JULY 28, 2009
U.S. Effort to Modify Mortgages Falters
By RUTH SIMON
An Obama administration effort to reduce home foreclosures by lowering the mortgage payments of struggling borrowers before they fall behind is failing to help as many people as expected.
Among the problems: Some homeowners are being told they must be behind on their payments to receive help, which runs counter to the aim of the program. In other cases, delays are so long that borrowers who are current on their payments when they ask for a loan modification are delinquent by the time they receive one. There is also confusion about who qualifies.
…
The Obama administration in February laid out its foreclosure-prevention plan to much fanfare. One part of the program provides financial incentives for mortgage-servicing companies to reduce loan payments to affordable levels, not just for people already in trouble but also for those who are at risk of falling behind because of a change in their circumstances.
So far, more than 200,000 borrowers who are delinquent or at risk of default have received trial modifications — the first step. Administration officials said the modification program could eventually help three million to four million people.
…
The Obama administration foreclosure-prevention plan math
3+3=2
Chinese bank lending grows exponentially with a one-year doubling time:
Financial Times
China warns banks over asset bubbles
By Jamil Anderlini in Beijing
Published: July 27 2009 12:45 | Last updated: July 27 2009 12:45
Chinese regulators on Monday ordered banks to ensure unprecedented volumes of new loans are channelled into the real economy and not diverted into equity or real estate markets where officials say fresh asset bubbles are forming.
The new policy requires banks to monitor how their loans are spent and comes amid warnings that banks ignored basic lending standards in the first half of this year as they rushed to extend Rmb7,370bn in new loans, more than twice the amount lent in the same period a year earlier.
…
The serial bottom caller brigade is calling the umpteenth bottom in housing, thanks to the recent government-engineered uptick in new home sales. How did “driving people back to the (housing) market” become a function of the US government? Didn’t they try something like that in the early 2000s? And how did it work out for them? I personally have nothing against a sustainably healthy housing market; I just don’t believe this can be financially engineered through the market-distorting effect of heavy-handed government subsidies. I also expect the market to face another leg down, as once the current crop of fence sitters have been lured with subsidies into making purchases, there is likely to be a subsequent trough in demand due to fundamental factors (dearth of new job openings, natural speed limit on household formation, reluctance to buy a home when prices are still falling, etc).
Notice how the article harps on the 10-month high in the builder’s confidence index, while somehow failing to mention that its current level of 17 (versus a neutral level of 50) would be an all-time low (back to the start of the survey in 1985) except for the recent period.
Financial Times
New US home sales surge in June
By Alan Rappeport in New York
Published: July 27 2009 15:57 | Last updated: July 27 2009 19:24
New house sales in the US jumped by 11 per cent in June, providing some of the strongest evidence yet that the market has bottomed out after being savaged for three years.
There are increasing signs that the combined impact of falling prices and low mortgage rates, along with aggressive government incentives, is driving people back to the market and stirring sales.
The monthly rise was the sharpest in nearly nine years, far exceeding economists’ expectations, and followed a revised increase of 2.4 per cent in the previous month. House sales rose to an adjusted annual rate of 384,000, the department of commerce said.
“[This is] more evidence that a bottom is forming in the housing market, with new home sales confirming the signal provided by other housing data,” said Alan Ruskin, a strategist at RBS Greenwich Capital.
Last week saw a rise in existing home sales and prices, while housing starts jumped by 3.6 per cent in June and housebuilder sentiment hit a 10-month high in July.
Economists at Goldman Sachs said: “At long last, the downturn in the US residential real estate market may be drawing to a close.”
…
Recession, depression, crisis, credit crunch, financial panic…
What’s in a name? A turd by any other name would smell as rank.
Wall Street Journal
JULY 28, 2009
The Great Recession: A Downturn Sized Up
Unemployment Lines Have Been Long Before, but No Prior Slump Since World War II Has Hurt So Much on So Many Fronts
By JUSTIN LAHART
…
“A normal postwar recession ends when the Fed thinks it’s done enough to fight inflation,” says Brad DeLong, an economic historian at the University of California, Berkeley.
But this downturn was set off by a housing and credit collapse, making Fed rate cuts less effective in spurring growth. Economists believe Friday’s GDP report will show the economy contracted again in the second quarter and that, in combination with downward government data revisions, could make this recession’s GDP drop even larger than 1958’s.
The good news: This recession’s drop in household income hasn’t been nearly as severe as one of its predecessors. That is partly because many states have extended unemployment benefits. It also is because workers haven’t seen their earning power eaten up by rising prices.
That wasn’t the case in the recession that stretched from 1973 to 1975, when food and energy costs jumped. Adjusting for inflation, U.S. household income fell 5.3% during that period. In the current recession, it has fallen by 3%.
But this recession has eaten away at Americans’ wealth like never before. Falling home prices have decreased the equity the U.S. households have in their homes — that is, the value of their homes minus what they owe on them — by $5.1 trillion, a 41% drop. They also have lost trillions of dollars in the stock market. No other episode of wealth destruction since the 1930s comes close.
As households work to rebuild the stores of wealth they lost, they spend less. Although spending has recovered a bit, it is still an inflation-adjusted 1.9% below its peak 2008 levels.
Only two other downturns have had comparable spending drops. In the 1953-54 recession, when Congress added to the Fed’s inflation-fighting efforts by extending an unpopular tax on corporate profits, spending fell by as much as 3.3%. That drop was matched in 1980, after President Jimmy Carter, in an attempt to rein in inflation, persuaded the Fed to introduce stringent controls on the use of credit.
Reversing those policies, and getting spending moving again, was relatively easy. But reversing the drop in wealth isn’t. That means that tepid consumer spending could be a drag on the economy for years to come.