Bringing The Market Closer To An Eventual Equilibrium
It’s Friday desk clearing time for this blogger. “Ari and William Morel are homeowners and grandparents who hope to save their home from foreclosure after becoming victims of what they consider to be a predatory loan. The Morels, whose troubles began in 2006 when Will lost his job as a bank adjuster, were told that they could not force the bank to modify the loan under the Making Home Affordable Refinance and Modification program. The program gives struggling homeowners facing foreclosure and who have a loan owned or guaranteed by Freddie Mac or Fannie Mae the opportunity to modify their mortgage payments or refinance to a lower mortgage rate. The Morels did not qualify because they had waited too long to apply. The bank had failed to tell them they qualified for the plan when they first went to them in February, according to the Morels.”
“‘We’re not looking to get a new house. We can pay a mortgage,’ said Ari Morel, who said she has lived in her current home for over 15 years. ‘We were cheated.’”
“Orlando’s housing starts, once a bellwether of success, have been cut by more than half during the past year, according to a real-estate analysis. The large number of foreclosures and short sales in the resale market has driven down prices of new homes as well, allowing buyers to employ ‘aggressive’ negotiation tactics, said longtime homebuilder Steve O’Dowd, VP of the Home Builders Association of Metro Orlando.”
“‘Market price is way down, and the ability to rebuild and reproduce that house at that price doesn’t exist — you can’t do it,’ O’Dowd said. ‘There may be a desire for new construction, but the replacement cost is higher than the market is willing to pay.’”
“New federal rules that went into effect May 1 prevent mortgage bankers from ordering appraisals on homes under contract to sell. It’s called the Home Valuation Code of Conduct, and it was created to address some of the problems that led to the nationwide run-up in housing prices and accompanying downturn. ‘It makes all the sense in the world. It truly protects the consumer. In the old days, you could talk to the appraiser and say, ‘I need this value,’ said Robert Runnells, production manager of Old Point Mortgage in Hampton.”
“It’s true the appraisals are coming in low, he said. ‘That’s more a product of the market,’ he said. ‘We’ve had more appraisals come in low this year than my previous 10 years combined. It’s hard to tell someone their house is worth less than they think it’s worth. Some people get mad at you; they point the finger at us, when it’s not us.’”
“The number of properties facing foreclosure in Hampton Roads has more than doubled from this time last year, according to a new study.And it’s not over yet. ‘We should expect more foreclosures in the future rather than fewer,’ said James V. Koch, an Old Dominion University economics professor.”
“Though foreclosures force people out of their homes, it puts others into them, Koch said. ‘Foreclosures aren’t completely bad. When they go on the market, they’re oftentimes snatched up by individuals who are looking for bargains and probably have an ability to actually meet the terms of the mortgage,’ Koch said. ‘I think, actually, some of the foreclosures are healthy in the sense that we’re really bringing the housing market closer to an eventual equilibrium. That sounds harsh, but we need to have some additional decline in the housing prices and some improvements in overall economic conditions before I think we’re going to see the housing market turn around.’”
“By midyear, 1,616 Honolulu homeowners had received a foreclosure notice, a 276 percent increase from the same period a year ago and a 31 percent increase from the prior six months. But while Honolulu foreclosures are growing, overall the city has a limited foreclosure footprint as compared to the nation…The same could not be said for the neighbor islands, which have been harder hit by economic recession and had experienced higher price swings during the last real estate boom, said Howard Dinits, a Realtor in Wailea, who specializes in Big Island and Maui sales.”
“Declining real estate values and increased joblessness, combined with a tighter lending market and a depressed economy, have created the perfect neighbor island storm, said Dinits, who has had to switch real estate firms twice this year due to office closures. ‘Get ready, it’s just going to get worse,’ Dinits said. ‘California was littered with foreclosures last year and we tend to lag that market by six to nine months or more.’”
“San Diego County home prices were down 18.52 percent from a year earlier, according to the most recent Standard & Poor’s/Case-Shiller index for May, released Tuesday. In the three-and-a-half years since the market’s price peak in November 2005, prices have fallen 42.05 percent to a level last seen in summer 2002. Still, prices remain 45 percent higher than they were at the start of the decade.”
“Though a tightened supply and an increased demand might typically indicate underlying strength, this market has too many issues to say for sure, said Mark Goldman, mortgage broker and real estate professor at San Diego State University. ‘I don’t like to be Dr. Doom in the housing market,’ he said. ‘We’ve taken most of our licks, but what’s going to cause the market to improve?’”
“Goldman said…with the potential for inflation on the horizon, a homebuyer could do well to buy a discounted home and lock in a mortgage at the interest rates in today’s 5 percent range. ‘I just see a bunch of stuff going on that can become a concern, but is now a good time to buy a home? Hell, yeah,’ he said. ‘Will prices slide some more? Yeah, they will. Are they going to slide a lot? No.’”
“Fueling optimism of a real estate turnaround in San Joaquin County, Tracy has been listed the eighth-hottest investment market by a statistics-based company that measures an area’s real estate affordability, crime, school rankings, lifestyle rankings and employment potential. Investment possibilities in a county where the median home price has dropped to $155,000, and the slight decrease in foreclosures brings hope to community leaders.”
“‘Foreclosures and unemployment rates are still way too high in the Central Valley, but I’m hopeful that we could start to see the market stabilize,’ said Rep. Dennis Cardoza D-Atwater. ‘This is a great place to live, and I think the housing prices in the Central Valley are underpriced.’”
“Rental prices across California fell 4.5 percent this spring compared with the same period last year, according to research. Fewer than 90 percent of Modesto apartments had tenants this spring, compared with about 94 percent a year ago and nearly 96 percent two years ago. ‘It’s definitely not going in a good direction,’ said Georgina Bockel, a West Coast consultant.”
“The purchase of Pacific Union Real Estate, a struggling but well-known Bay Area name, by a smaller rival in Marin might be a sign of things to come in these down economic times. The deal is the latest in an industry that has experienced seismic shifts locally over the past year. Marin has about 1,450 Realtors practicing, based on membership figures from the Marin Association of Realtors. Through the first six months of this year, there were 881 residential home sales in the county, according to MAR. At last year’s midpoint, there were 965 home sales. By the halfway mark of 2004, 1,987 home sales had already taken place.”
“‘We’re going to see more of these types of mergers and acquisitions to reflect the difficult market,’ said Katie Beacock, president of the Marin Association of Realtors.”
“During the buying orgy of the housing boom, many consumers overleveraged themselves by signing on for low-introductory-rate ARMs, apparently presuming that tomorrow would never come, or at least that the option to refinance always would be there. Toll Brothers raised a few financial eyebrows recently when it announced it would offer an adjustable-rate mortgage to its buyers at an eye-popping 3.75 percent rate.”
“When a high-profile company such as Toll Brothers rolls out an ARM, and with some fanfare, one has to wonder: Could these loans be making a comeback already? ‘ARMs are not evil; really they’re not,’ said Keith Gumbinger, a loan analyst at a mortgage-industry publisher.”
“Call it son of subprime. Experts warn that a new wave of mortgage foreclosures may be coming soon. The mortgages in question are $230 billion of option adjustable-rate mortgages, creative lending products that flourished at the height of the housing boom. ‘They’re probably going to default at a rate that makes subprime look like a walk in the park,’ warned Rick Sharga, senior VP for RealtyTrac.”
“They pose risks for the broader U.S. economy because they threaten to add inventory to a depressed housing market and could hasten the blistering pace of foreclosure filings — more than 1 million from March to May alone. ‘We can’t rebuild housing values when there’s a serious risk that another set of mortgages is collapsing,’ said Elizabeth Warren, a Harvard University law professor.”
“Foreclosure rates in the Baltimore-Towson metropolitan area are less than half the national average, according to a new report, but industry professionals have warned that the lull in filings is temporary and artificial and said they are girding for a new wave of problems in the third and fourth quarters of this year. ‘Foreclosures have probably been artificially low because of moratorium programs that have been in place,’ said Rick Simon, a spokesman for Bank of America Home Loans. ‘The expectation is that we’re going to see an increase, not just because we’re getting through that backlog but also because the projections are showing that people are not going to qualify for loan modifications because of unemployment.’”
“David McIlvaine, president of the Greater Baltimore Board of Realtors, also sounded a warning. ‘I work with numerous banks, and I’m hearing from banks …’get ready,’ because there’s significant inventory [of foreclosures] expected to hit the market in the third and fourth quarters,’ he said. ‘I would say it was an anomaly if just one bank was telling me this. But three different banks have told me that we’re in a lull, that loan modifications have slowed things down … we’re going to see a significant rise from what we saw last year.’”
“In the first half of 2009, Las Vegas posted the nation’s highest rate of foreclosure. More than six times the national average. But number crunchers at RealtyTrac say Las Vegas could see more houses on the market. If foreclosure filings from June actually become available, it would more than double homes for buyers all at once.”
“Realtor Nick Nolf believes banks and lenders have homes ready for sale but they won’t release them from foreclosure. ‘There’s a long period and that’s an ambiguous period because some of the banks will release properties at certain times. Sometimes they hold off,’ he said.”
“Bill Uffelman is the President and CEO of the Nevada Bankers Association. He says it isn’t collusion or shady plans by FDIC insured banks. Foreclosures take time to work through the courts. ‘It doesn’t happen overnight, but it isn’t something they sit on. There’s no advantage to them to sit on these properties,’ he said.”
“Southern California investors have returned to the Las Vegas market in force to look for bargains on single-family homes and helped drive Las Vegas to a record number of sales in June, housing industry experts said. ‘Real estate has always been a good investment, and right now it has never been better from a residential standpoint,’ said Steve Bottfeld, executive vice president of Marketing Solutions.”
“Glenn Plantone, a Realtor and president of the Real Estate Insiders Club in Las Vegas, said investors are taking advantage of a steep drop in prices since they peaked in 2006. In some cases, prices of homes in the northwest fell 70 percent. Homes that sold for about $300,000 are going for about $110,000 he said.”
“‘They are buying them for cash flow,’ Plantone said. ‘We are not even talking about appreciation potential.’”
“In once-inflated markets like Phoenix, Las Vegas and inland swaths of California and Florida, where prices have tumbled more than 40 percent, sales are rising because first-time homebuyers are snapping up bargain-priced homes. They are getting help from a federal tax credit. For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor.”
“Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax-deductible. So they jumped at the chance to buy some elbow room. ‘We figured that everything together, getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple’ to buy, said Carter, 20.”
“Neighborhood profiles by Jason Sheftell and real estate advice from Barbara Corcoran. Q: Most military families stay in their homes for four years or less, and often four years is rare! What advice do you have for military families — buy a home or rent? A: Stick to renting, as there’s just too much risk in buying a home for such a short period of time. If you buy, there’s no guarantee you’ll be able to get your money back or even be able to sell in the first place.”
“Q: My husband and I purchased a piece of land last year in Lehigh Acres, Fla., for a very good price, but it’s not in a very good area (lots of crime, foreclosures, etc.). My husband thinks the area will only get worse, with the economy the way it is, and wants to sell. I feel that the area will eventually pick up and that this is a good investment. What do you think?”
“A: The fact is you’ll have a tough time selling it now. There’s not much of a market for land because of the credit crunch. Very little new development is taking place and there are too many newly built homes and not enough buyers. You should hold on to the property and wait this rough spot out, as long as you can afford to carry it. You’ll do much better later, once the market recovers, than you can now.”
“House Democrats have declined to subpoena available records that might reveal whether other members of Congress got discounted VIP mortgages from subprime lender Countrywide Financial Corp. similar to the sweetheart deals given Democratic Sens. Chris Dodd and Kent Conrad. Countrywide was taken over by Bank of America a year ago.”
“Robert Feinberg, who worked in Countrywide’s VIP section, told…investigators and the Senate Ethics Committee that Dodd and Conrad were made aware that they were getting special deals on their mortgages. Elana Goldstein, one of Feinberg’s lawyers, said Justice Department prosecutors interviewed Feinberg last October but have not contacted her or her client since then.”
“The senior Republican on Towns’ committee, California Rep. Darrell Issa, has been trying for months to get Towns to subpoena Bank of America for Countrywide’s records. Daniel Frahm, a Bank of America spokesman, said the bank is ready to turn over the Countrywide VIP documents if it receives a subpoena. ‘They have it packed and ready to go,’ Issa said in the interview.”
‘Bill Uffelman is the President and CEO of the Nevada Bankers Association. He says it isn’t collusion or shady plans by FDIC insured banks….’There’s no advantage to them to sit on these properties,’ he said.’
‘Southern California investors have returned to the Las Vegas market in force’
I’m thinking that Las Vegas Now has been reading the HBB.
Anyway, another great week! My thanks to the guest posters and moderator. We’ve got more this weekend, so please check back. And if you are in San Diego or Orange County early next week, let’s met for pizza!
“During the buying orgy of the housing boom, many consumers overleveraged themselves by signing on for low-introductory-rate ARMs, apparently presuming that tomorrow would never come, or at least that the option to refinance always would be there. Toll Brothers raised a few financial eyebrows recently when it announced it would offer an adjustable-rate mortgage to its buyers at an eye-popping 3.75 percent rate.”
“When a high-profile company such as Toll Brothers rolls out an ARM, and with some fanfare, one has to wonder: Could these loans be making a comeback already? ‘ARMs are not evil; really they’re not,’ said Keith Gumbinger, a loan analyst at a mortgage-industry publisher.”
Far be it from me to say nice things about Toll, but, in a very few cases, ARMs make sense. Say that you’re in medical school, just a couple of years from graduation, and you decide that now is the time to buy.
You’d most likely be experiencing a substantial increase in income within the next three to five years, so you’d probably be able to afford the higher payments after the ARM adjusts upward.
However, the population of those who fit the above description is quite small. For most wage/salary-earning homeowners, ARMs are a disaster.
I know, but it’s funny when a guy says something like this, then has to say, “really they’re not” immediately. Ah, the good ol’ Chicago Tribune; and some people say comedy is dead.
At least it’s not like Greenspan telling the world how much money they would have saved if only they’d gotten an ARM. That goes past comedy and over into tragedy.
“‘We’re not looking to get a new house. We can pay a mortgage,’ said Ari Morel, who said she has lived in her current home for over 15 years. ‘We were cheated.
The frugal, renters and savers are hearing a lot more HouseDebters singing THAT tune lately.
in a very few cases, ARMs make sense.
When we owed (thank god that’s over) we took out an arm. That was in 2003. It was a 7 year arm. The rate was right at 5%. We knew that one of two things would happen within 7 years. Either we wouldn’t be there anymore or we would have nearly paid it off. That was 6 years ago. If we were still there our balance would be 1/3 to 1/2 of the purchase price. For us it makes sense.
It is negative amortization, interest only ARMs that are the real culprit of the housing bubble. They were the WMDs. Plus they were given to out of work, or low salary people that had no business buying in the price range they were in.
ARMs are like Jack Daniels. In the right hands they are both a very good things. Now I’m craving Jack Daniels. Damn it.
We got an ARM back in 2003, anticipating a sale of the house before the end of the five year term. The rate was 4.75%, and we sold two and a half years after taking out the loan.
Our LTV was really low, about 20%, but it still bugged me that we had to leverage the house. It didn’t bug me enough to reach out for the Jack, though.
(Pass me the mojito pitcher, please.)
My sister and brother-in-law have had an ARM since 1983. Interest rate was 16%+ percent in 1983 and 6% or so last year. They never refinanced as the banks wanted larger mortgage amounts.
The ARM was a good deal for them since rates generally have gone down since they took it out.
Come on Slim, think again.
Take your medical student example: What if
You flunk out of school?
You get sick and have to drop out?
Want to take a job in another city when you graduate?
Why should anybody take an ARM flyer on something as risky as residential real estate anyway?
Take up high stakes poker if you love risk, the odds are better.
Ben, do you have a when and where on that pizza in SD? I personally would like to buy you a Bud Light or Blue Moon, or any other beer of your choice with the HBB version of the beer summit.
Yeah, I’ve got it all picked out. It’s in Carlsbad, so anyone that wants to attend can send me an email and I’ll reply with the details.
Hello Ben,
I would like to attend the event in Carlsbad . . . I’ll really make it this time. I live just off of Cbad Village Drive.
My names Randy - the few times I’ve posted it’s been as SDNewbie.
Kindest Regards,
Randy
Send me an email, at thehousingbubble@gmail.com
“Ari and William Morel are homeowners and grandparents who hope to save their home from foreclosure after becoming victims of what they consider to be a predatory loan.
Morel!? Their name is morel?! Those ineffably lucky souls! Except for the whole foreclosure thingie, and being consummate idjits, of course. But other than that, how very lucky they are!
Man, I cannot wait for the mushroom season to begin here. Then I shall gorge myself until I can’t waddle. Just like last year, and the year before…
Note further down in the article she says that they’ve lived there for over 15 years, which means they bought in 1994 or eariler, which means they ATM’d themselves to death, which means they can go kiss a geo-duck for all I care. They took the money, they sold the house.
The Morels of this store is “GO GET SOME BOXES!”
store=story
Sheesh, I got a little overexcited when I got to the all caps action.
I got a little overexcited when I got to the all caps action.
Happens to the best of us.
*makes soothing gestures in the air towards where I think San Francisco is *
Is that where your heart is? Scott McKenzie’s was!
Mine, is in Utarr, where Shorty, is producing a DDD CD, with Satan!
Mine, is in Utarr, where Shorty, is producing a DDD CD, with Satan!
You merrily jest, but it is true! Shorty IS in Utarr, hanging out with Big ‘S’. Let’s just see how jokey you are when you hear the banging on your door of two sets of hooves…
Look out for the ‘STRIGOI’ at midnight !!!
I have a box for them. It’s the box that my new solar porch light came in, and it’s full of packing peanuts and stress bubbles, aka bubble wrap.
Just think of the fun they could have!
Morel is a much better name than Shiitake
‘Slippery Jack’ (suillus luteus) is a pretty good name, too. I’m almost willing to eat them just for the name. Almost.
This is straight from the WTF file. Morel was a bank adjuster, but got sucked in by a . . . predatory loan? Yeah, right.
The boxes thing is becoming better than the bucket full of stupid line in that Oregon article I found years ago.
BOXES!, BOXES!!, AND MORE BOXES!!! WE ALL GOTTA GET…BOXES!!!!
P.S. sf:
When ya start talkin’ about kissing MY geo-duck…
Well, ya gotta go through OLy and Me.
“Ari and William Morel are homeowners and grandparents who hope to save their home from foreclosure”
I’ll admit that I have no interest in reading the whole story. This is the only part I’ve read. I just wonder WTF being grandparents has to do with anything. So what, they could breed and their in-bred kids could breed. Is this just an attempt to rile sympathy for two more dumb-a$$ troglodytic mouth breathers?
By the time I was born, my father’s parents had sold their house and moved into an apartment. It was one of those nifty, just outside of NYC brick buildings. I loved going to visit them.
Their myna bird-owning neighbor was one of my favorites. Didn’t matter who was really in office — if the neighbor asked the bird for the name of the President, it would say, “President Eisenhower.”
As for my mother’s side of the family, my grandmother (who’d divorced my mother’s father when Mom was in high school) was a lifelong renter.
I’ve somehow managed to survive the grandparental rental stigma. But don’t ask me how.
Ohhhhhhhhh You come from rental stock. ohhhhhhhh
hehe
In NYC that is or was so doable when your rents were low and controlled. If I were to be so lucky to have one of those situations, I too would be a renter for life. One of the things that ppl do in nyc is read the obits and run right over to the SUper with $$$. Never did that, but sure would like a prewar, multi room high floor unit. Was so skinny living in nyc. All that walking.
There’s a place in Star Wars where Darth Vader calls them ‘rebel scum’. I therefore always think of ‘rental scum’ as a term to use.
LOL
“I’ll admit that I have no interest in reading the whole story.”
You kinda already did. It was a short article. As usual, the reporter didn’t ask the tough questions like where the HELOC money got spent and those sort of things.
Oly - I’m with you - love morels. Just gotta soak ‘em first to let the protein swim away. Wish they were available around here.
Just gotta soak ‘em first to let the protein swim away.
*sits up straight all of a sudden *
What?! What do you mean! Protein?! Oh, no!
*paws urgently at tongue…*
…Hahaha! Just being dramatic there. I know in fact know about the hidden protein. I learned about it the very first time I found some morels in the compost heap and squealed with joy and dashed in the house and seized a skillet and a sharp knife. That’s when I learned that sometimes fat little slugs enjoy secretly sliming into the hollow interior of a morel and setting up residence and making a mess in there, not paying the bills and so forth. Like striped midget ACORN protesters. Just regular slugs, not banana slugs—a banana slug would of course be visible right away, wearing the morel like a beanie-hat.
Are you SURE they’re not available where you are? (I don’t know where you are, of course.) Morels are tricky and contrary. They might appear in Antarctica or even Utarr, just to be difficult.
I now get some every spring, sometimes a bunch, sometimes only a few, because all winter long I dump out my wood-stove ashes under trees here and there, and they love ashes. I simply dump ashes, sometimes add some compost, scrape bark and leaf duff over the ashes and then wait impatiently. Maybe you could fling ashes around, see what happens.
Happy Weekend to you Oly!, (and everyone else here too…)!
I am three beers in, so I’ll read from now on… maybe.
Happy weekend to you, too, ATE.
…Three beers?! I gotta catch up!
Mr. Filter sent my Poodle to Pluto.
Oly - I’m in Florida - none here that I know of. Long ago I had a good source of dried ones.
As for fresh, in some places they attract small critters like tiny beetles. Easy enough to get rid of them because under water they will crawl out if alive or float out if not. Long ago in Epicurious recipe reviews, there was a very funny review by an unfortunate soul who didn’t know this and served the morel sauce to her neighbors. When one asked what the crunchy “extra bits” were, closer examination revealed that they were well-cooked bugs. A yak here, a gag there and the neighbors would not share supper with her again. I felt sorry for the woman, but the review cracked me up.
Really? I had pictured you in… North Dakota.
I don’t know what North Dakota looks like, by the way. Do we even have one of those? Like with, you know, waving grain and stuff, with the slow susurrus of the wind.
Now my brain is all joggled.
Where’d you get your dried morels?
Do you get a permit?
Rancher, I don’t how to answer that question. Not really, I guess, I didn’t.
A permit for what? Having tea with Satan and Shorty? Eating morels from the ash-pile? Getting off-topic?
I guess I should go track down the top of your answer.
I’ve never gotten people complaining about the appraisal being low (except the sellers). If it comes in too low and you’re the buyer, consider it a blessing…especially now!
I think it’s all been fishy for quite a while. When I bought my first dump in 1990, I really thought the appraiser was going to give an actual number value. I asked the bank what it appraised for and they said oh it’s enough, no problem..sign here.
“In the three-and-a-half years since the market’s price peak in November 2005, prices have fallen 42.05 percent to a level last seen in summer 2002. Still, prices remain 45 percent higher than they were at the start of the decade.”
…
“Though a tightened supply and an increased demand might typically indicate underlying strength, this market has too many issues to say for sure, said Mark Goldman, mortgage broker and real estate professor at San Diego State University. ‘I don’t like to be Dr. Doom in the housing market,’ he said. ‘We’ve taken most of our licks, but what’s going to cause the market to improve?’”
Sounds like another 33 percent or more drop in prices is needed to cause the market to improve.
After another 33% drop, I’ll probably be ready to help the market improve.
Are you willing to rent for another seven years of your life before buying?
At what point does the downward slope of the curve lessen to the point where I can no longer hold out against the wife’s nesting instincts? And will inflation gradually lift the tide to where it’s not worth waiting for a little more nominal drop? I’m not saying we’re even close to being there, especially in the sticky 92127, but a guy’s gotta get a place eventually, if nothing else so I can nurture my own instinct for home improvement. My guesstimate is that I can hold off the wife for another year, tops.
Uh-oh. Calculus and married life. Anyone want to plot this curve?
A stochastic scatter graph would probably be better.
If the govt drags this on much longer, we will never end up buying our “family” home. At some point, our kids will be too old, and it just won’t be worth it.
Not that the govt cares about us lowly renters/savers/responsible-types, or anything. It’s only the home “owners” who matter in this country, I guess…
“At some point, our kids will be too old, and it just won’t be worth it.”
I already have my sites set on a smaller home, reflecting that my daughter will likely be off to college before prices bottom out. Meanwhile, I hope the banksters enjoy holding on to their falling knives all the way to the ground.
That makes me sad.
…and angry. I feel like a dim-wit for renting and waiting. Could have bought a nice spread in RSF, and be living the high-life with free rent. What a chump.
PB - I could be. I’ve already been renting for four, after selling out, and in the beginning thought it was a very temporary situation. Unfortunately, it could indeed talk a long time for prices to get to the basement, because of all the gummint interference that keeps unnatural prices on life support.
Amen to that.
Conundrum noted: Who regulates the regulators? (It seems like some very bright fellows included the principle of “checks and balances” in the US Constitution a couple of hundred years ago; perhaps that will suffice?)
U.S. House Passes Measure Letting Regulators Ban Incentive Pay
By Jesse Westbrook and Ian Katz
July 31 (Bloomberg) — The U.S. House empowered regulators to ban Wall Street incentive pay that encourages risk-taking after banks getting taxpayer bailouts outraged lawmakers and the public by giving employees billions of dollars in bonuses.
The measure, passed 237-185 today, authorizes banking agencies and the Securities and Exchange Commission to prohibit compensation practices that threaten the sustainability of financial companies and “could have serious adverse effects on economic conditions.” The bill must pass the Senate and be signed by President Barack Obama to become law.
“What this bill explicitly aims at is the practice whereby people are given bonuses that pay off if the gamble or the risk pays off but don’t lose you anything if it doesn’t,” said House Financial Services Committee Chairman Barney Frank. “There is a wide consensus that this incentivizes excessive risk.”
Outrage over Wall Street pay was reignited yesterday after New York Attorney General Andrew Cuomo reported that nine banks getting U.S. aid paid $32.6 billion in bonuses last year. Cuomo’s report showed the nine companies paid 4,793 employees bonuses that exceeded $1 million last year.
In addition to targeting incentive pay, the House measure requires all public companies to give shareholders a non-binding vote on top managers’ compensation.
Representative Spencer Bachus, an Alabama Republican, criticized the measure and questioned whether it makes sense to give more power to regulators that “failed to prevent the worst financial calamity since the Great Depression.”
“Under the guise of empowering shareholders it is in fact the government that is empowered,” he said.
…
If I got a $1 mil bonus, I’d be set for life. Wow.
That’s hard to say. If you were in the group of Wall Street bankers who thought such lavish pay was normal, then your expenditures would most likely be set up to quickly throw the money away on luxury consumption.
your expenditures would most likely be set up to quickly throw the money away on luxury consumption.
I think it’s more likely the luxuries have already been consumed, and that future bonuses are needed to make the payments on the loans taken out to finance the luxuries.
tresh:
I think not, and instead I do think they are sitting on loads of money, regardless of expenditures of type.
It is human nature, (me included) to wish that though.
US Senators push for Fed disclosures
(AFP) – 6 hours ago
WASHINGTON — Eleven US Senators called on US Federal Reserve Chairman Ben Bernanke Friday to make public the names of financial institutions rescued with taxpayers dollars, and how much they received.
Democratic Senator Byron Dorgan and Republican Senator Chuck Grassley said recent reports of soaring Wall Street profits meant the Fed could no longer argue that releasing the information might spur a run on banks that got help.
…
As part of efforts to pull the battered US economy out of a paralyzing recession, the Fed has steered billions of dollars to individual banks in a bid to restore the flow of credit and keep the financial system afloat.
But US lawmakers have grown increasingly frustrated with what they describe as the lack of transparency in how the funds have been used, and what amounts have gone to individual institutions amid reports of soaring Wall Street bonus payouts.
True confession:
I find myself in a bit of a rage over the bonuses paid to TARP recipient employees. More than any other story to date on the housing bubble, this one really sets me off, as it appears to fully validate the American public’s worst concerns about how the TARP funds might be misappropriated.
So am I out of line here, are do other Americans feel like we have been collectively shafted in a way which is likely to soon be repeated, thanks to the perverse incentives Wall Street banks face to privately profit from actions which destroy our nation’s collective prosperity?
areorI can’t think when I am angry…
When the majority is so angry they can’t think, time for a Revolution ™ following by a reign of terror ™ and the traditional cleanup.
I don’t want a revolution — the treatment and its aftermath are typically far worse than the disease. (I refer you to the French Revolution and the Russian Revolution as cases in point.)
But I do want a restoration of the Rule of Law. Otherwise, capitalism is likely to fail (again), and is certain to remain suboptimal compared to what Adam Smith envisioned it could be.
You say you want a revolution
Well you know
We all want to change the world
You tell me that it’s evolution
Well you know
We all want to change the world
But when you talk about destruction
Don’t you know you can count me out
–Lennon / McCartney–
The French Revolution was necessary and needed… when aristocracy gets as rotten as it was, only cutting heads was the good solution.
Sadly I see the threshold today with the current “aristocracy” being almost as bad…
Also, as a Pole, the French Revolution led to Napoleon which freed us from the Prussian-Russian oppression and would he have destroyed Russia in 1812, the Duchy of Warsaw would have ruled from the Oder to the Lena, with Germany as a weak protectorate of France… sucks it didn’t happen!
Shoulda coulda woulda… at least it revived Polish nationalism so the country could survive another 100+ years erased from maps to be reborn in 1918.
But I digress…
“Society is like a stew. If you don’t stir it up every once in a while then a layer of scum floats to the top.” - Edward Abbey
“…a layer of scum floats to the top.”
I customarily use a spoon to scoop my stew scum off the top, then wash it down the kitchen sink drain. What do you guys do about the scum issue?
I am angry, therefore I am not.
“I can’t think when I am angry…”
Genocidal tendencies?
I’m of the mind that, over the long run, the TARP/bailout recipients are going to lose boatloads of customers. Heck, people in this-here HBB are already saying that they’ve closed their Big Bank accounts and moved their money to a community bank or credit union.
I’m also seeing quite a shift away from large, corporate-type businesses. The locally owned and operated outfits are the beneficiaries of this shift. (This was a huge topic of conversation at Tucson’s July edition of Green Drinks.)
Not an issue for the corporate types and large banks. Too big to fail financial institutions will just use tax payer money they received to buy up smaller community banks and credit unions. Large Inc.’s will do the same, gobbling up smaller competitors and paying with other people’s money.
Customers retained! No problem.
State chartered credit unions are tax exempt - not charity status, they can’t get tax dedcuctible donations, but exempt from income tax on the income of their core business of accepting deposits and making loans in various ways. They can’t be bought.
Some of the small community banks are run by families rather than being publicly held corportations. They are only for sale if their owners decide to sell them.
I hear ya.
Also think how much money was offloaded to rich bondholders.
Then think how much money was used for buyback of shares and other speculative activity.
The level of screw over here is just incredible. The fact is right now, people aren’t feeling the entire effect of this. When this drags over a long time and the wealth and money distribution gets much worse… oh it could get pretty nasty.
When we are in the nth year of anemic recovery of badly manipulated statistics and wealth distribution has gotten much worse. I’m expecting the middle class and poverty to become less and less distinguishable. Meanwhile the rich will become ostentaciously rich while the poorest will face dire circumstances. Meanwhile we’ll look at the national debt will have gotten progressivly worse. Expect the rich to be spending more and more on private security and the law enforcement will become more and more lopsided.
Esentially this is the thirdworldization of the US. If we keep going this way.
Basically the question comes down to who gets rich off all this debt?
It isn’t the people that get in debt.
Its the holders of the debt. And its not China that is the problem.
Definitely angry about the tarp bonuses being
doled out.
Very angry. Fed up. The straw that broke
the camels back…
wake up americans. sheesh.
You’re definitely not alone, PB.
(fellow, long-time hand-wringer, here)
Ben, I can’t believe you put that Barbara Corcoran piece out there. Every Friday a co-worker brings her column over to me. It always ends up with me finding a unique way of ripping it up. Often times I draw a little mustache and horns on her. Well, there are horns. I can’t remember if I drew them or they are really there.
So, now the scrawny little thing is saying that anybody that doesn’t plan to stay 5 years shouldn’t buy? I wonder if she was saying that 5 years ago. I still despise her.
I’m curious. With what intent does the co-worker bring the articles?
Is he/she on your team or on the, “see I told you we only dropped 2% last week!” team. If the latter, nevermind the fact that this same he/she probably aggressively forecasted 2 years ago that there wouldn’t even BE a drop.
Also, is the article simply a voodoo-like stand-in for his/her face?
Why don’t you dig up a couple of gems from the HBB archives circa 2005 or 2006 and shove it in co-worker’s face and see what their reaction is?
“‘We can’t rebuild housing values when there’s a serious risk that another set of mortgages is collapsing,’ said Elizabeth Warren, a Harvard University law professor.”
Why does rebuilding housing values even make sense as a policy objective? We have a long way to go from here, as the PTB have not yet left the denial stage of the housing bubble’s collapse.
There she goes again. That Elizabeth is a real truth-teller. How does she manage to stay in government? (Yes, I know. She hasn’t been head of the COP for very long. But still.)
Roidy posted this in bits, I think it deserves another look. Bwahahahahah! Tanks fer nuthin’, AIG! BOHICA!
http://www.dailyfinance.com/2009/07/31/after-182-billion-taxpayer-rescue-is-aig-on-the-verge-of-colla/
““Goldman said…with the potential for inflation on the horizon, a homebuyer could do well to buy a discounted home and lock in a mortgage at the interest rates in today’s 5 percent range. ‘I just see a bunch of stuff going on that can become a concern, but is now a good time to buy a home? Hell, yeah,’ he said. ‘Will prices slide some more? Yeah, they will. Are they going to slide a lot? No.’”
I’m gonna say this one more time:
Shouldn’t we wait until the surge of Credit Card Defaults, The surge of Commercial defaults, the surge of jobless claims, the surge of monetizing 2 trillion in new debt, the surge of municipal / state / bank failures, The surge of Alt-A / Prime recasts
be allowed to run their course before we pronounce a “bottom” ??
I guess you don’t believe in the government’s ability to save banks from further losses by propping up home prices until high future inflation sweeps away the real value of the debt? (I don’t mean to suggest this is actually part of the plan, but the advantages of this course of action seem obvious.)
I can’t help but thinking that a lot of payment-makers are going on strike. We’re all hearing about people letting houses go back to the bank. And, it appears, the same thing’s happening with credit card debt, CRE debt, the list goes on.
Any Floridians reading right now? I know this is a bit OT, but has anyone in other parts of Florida noticed a lack of miskeeters in their area? It just dawned on me that I haven’t seen a one, really, not a ONE so far this year, and this part of Hillsborough County is usually mosquitoe central. Not that I miss them, I’ve never really been able to figure out what their benefits might be. I suppose they are food for various birds, etc. But it is a little weird, considering the rain we’ve had. By now I ought to have had at least one or two bites, but nothing. I was talking to a lady over in Pinellas County the other day who was looking to screen in her lanai to avoid bugs and I asked her if she’d seen any mosquitoes lately and she kind of paused and said with surprise “well, now that you mention it, haven’t seen any around here either”. Kinda strange.
Mosquitoes will die off quickly when the humidity falls, although I can’t imagine Florida without continuous high humidity. Maybe there is a pandemic killing off Florida mosquitoes that we haven’t heard about yet.
I haven’t noticed many skeeters around Tucson this summer. Which is good, because our local air force carries West Nile Disease.
Come on up here if you miss them. Where I live outside Detroit it’s the worst place I’ved ever lived around skeeters, and this year they’re even worse. I got bit by one on April 17th (I remember ’cause I was so surprised).
Not to worry. I’ll be in Ann Arbor for U-M Homecoming. Sept. 24-27.
Yeah, and the answer is there are less Realtors. Reciprocal duty, you know, Palmy.
Ditto up here in the S. Sierras. Weird, now that you mention it….
““Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax-deductible. So they jumped at the chance to buy some elbow room. ‘We figured that everything together, getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple’ to buy, said Carter, 20.”
Hey Einstein, you’ll be lucky if your itemized deducts exceed your standard.
That’s what happens when you get your tax advice from a realtor.
well at least he’s not throwing his money away on rent!
Still though, if his PITI is truly only $145 more than rent, I say more power to him, deduction or no.
Only PI. Still has to fork over taxes, insurance and maintenance. And they say nothing about location, condition of house, etc…
Still, an improvement over the outrageous rent vs. own comparisons a few years back.
Does this news mean the House will no longer permit Megabank, Inc to provide incentive pay for bankers to throw hundreds of billions of dollars down the toilet?
U.S. House Passes Bill Allowing Ban on Incentive Pay (Update2)
By Jesse Westbrook and Ian Katz
July 31 (Bloomberg) — The U.S. House empowered regulators to ban Wall Street incentive pay that encourages risk-taking after banks getting taxpayer bailouts triggered public outrage by giving employees billions of dollars in bonuses.
The measure, passed 237-185 today, authorizes banking agencies and the Securities and Exchange Commission to prohibit compensation practices that threaten the sustainability of financial companies and “could have serious adverse effects on economic conditions.” The bill may be rejected by the Senate, which is reluctant to expand government’s role on compensation. President Barack Obama also has concerns about the bill.
…
Business Highlights
The Associated Press
Posted: 07/31/2009 03:00:57 PM PDT
Updated: 07/31/2009 03:00:58 PM PDT
House votes to clamp limits on Wall Street bonuses
WASHINGTON (AP)—Bowing to populist anger, the House voted Friday to prohibit pay and bonus packages that encourage bankers and traders to take risks so big they could bring down the entire economy.
Passage of the bill on a 237-185 vote followed the disclosure a day earlier that nine of the nation’s biggest banks, which are receiving billions of dollars in federal bailout aid, paid individual bonuses of $1 million or more to nearly 5,000 employees.
Aware of voter outrage about the bonuses, Republicans were reluctant in Friday’s debate to push back, even though they voted overwhelmingly against the bill.
The White House and Senate Democrats haven’t endorsed the measure, leaving its prospects uncertain. The Senate Banking Committee planned to take up the proposal in the fall as part of a broader bill overhauling financial regulations.
House Approves Limits on Executive Pay
By ANDREA FULLER
Published: July 31, 2009
WASHINGTON — The House approved a measure Friday that would put new constraints on executive pay, capitalizing on outrage over multimillion-dollar bonuses to Wall Street executives whose firms were bailed out by taxpayers.
The measure, which applies to any firm with more than $1 billion in assets, passed 237 to 185, with most lawmakers voting along party lines. The Senate will not take up a similar measure until after it returns from its August recess in September.
…
Republicans slammed the measure as yet another example of needless government intervention into private business practices, similar to arguments that Republicans have been making in the debate over health care overhaul.
“The Democratic majority has a great desire to have the government everywhere in our lives,” said Representative Tom Price, Republican of Georgia. “It cuts at the very core of our free market system.”
And what did the TARP, that enabled firms which lost hundreds of billions of dollars to reward their employees with rich bonuses, do to the very core of our free market system?
“Goldman said…with the potential for inflation on the horizon, a homebuyer could do well to buy a discounted home and lock in a mortgage at the interest rates in today’s 5 percent range.
I’d rather wait for interest rates to rise, further pushing down house prices. Then refinance later when rates fall again.
What makes you think interest rates will rise, given interventions underway to ensure they do not?
The fed can try to interfere all they want but our trading partners who loan us money may have a say in the matter don’t you think ?
So far, so good on that end.
Marin has about 1,450 Realtors practicing, based on membership figures from the Marin Association of Realtors. Through the first six months of this year, there were 881 residential home sales in the county, according to MAR.
At this rate each realtor may only sell one house this year. You can’t make a living like that. It sounds like about a thousand of them need to go find some productive work.
This is an excellent observation. To be a Realtor now days you need a spouse who is the main bread winner. And guess what kiddies, this is exactly the way it was before the boom !
“My husband and I purchased a piece of land last year in Lehigh Acres, Fla., for a very good price, but it’s not in a very good area (lots of crime, foreclosures, etc.). My husband thinks the area will only get worse, with the economy the way it is, and wants to sell. I feel that the area will eventually pick up and that this is a good investment. What do you think?”
I think you would be better off going on vacation in say Haiti or Africa and have lots of promiscuous sex with the locals. It would be less risky and you would temporarily have some fun at least. Chances are what ever you got stuck with would still not be as toxic as bare land in Lehigh Acres.
+1 LOL!
Wall Street Journal
Let’s Break Up the Fed
By AMAR BHIDé
July 30, 2009
The Obama administration’s plan to increase the powers of the Federal Reserve, says one critic, is like giving a teenager “a bigger, faster car right after he crashed the family station wagon.” Treasury Secretary Timothy Geithner disagrees. He argues that the Fed is “best positioned” to oversee key financial companies, and that the Obama plan would give the Fed only “modest additional authority.”
Mr. Geithner is right about one thing: The Fed’s power is already vast. But it wasn’t even well-positioned to supervise the likes of Citicorp. Broadening the Fed’s responsibilities won’t help. Instead, we should think of how best to dismantle an overextended Fed.
Though advanced economies like ours require organizations capable of taking on a wide range of activities, there are limits. As Frank Knight, the great Chicago economist, pointed out in his 1921 classic “Risk, Uncertainty, and Profit,” individuals who control large organizations have to delegate many decisions to subordinates. Entities like hedge funds, where individuals such as George Soros make most of the consequential choices, are exceptions.
…
In principle, an exceptionally talented theorist might capably run a Fed focused just on monetary policy. Setting the discount rate and regulating the money supply are centralized, top-down activities that do not require much administrative capacity. But without deep managerial experience and considerable industry knowledge, effective chairmanship of a Fed that relies on far-flung staff to regulate financial institutions and practices is almost unimaginable. The vast territory the Fed covers would challenge the most exceptional and experienced executives.
As it happens, the Fed has been led for more than 20 years by chairmen who had no senior management experience. Prior to running the Fed, Alan Greenspan started a small consulting firm and Ben Bernanke was head of Princeton’s economics department. Given their understandable preoccupation with monetary and macroeconomic matters, how much attention could they be expected to devote to mastering and managing the plumbing side of the Fed? While the record of the Fed’s monetary policy has been mixed, its supervision of financial institutions has been a predictable and comprehensive failure.
The Fed’s excessively broad mandate also has thwarted accountability. The CEOs of Citibank, AIG, Bear Stearns, Lehman and Countrywide are all gone—albeit with too much delay and with no clawback of unmerited compensation. At the Fed, no high-level heads have rolled. Mr. Geithner was promoted to treasury secretary. Mr. Bernanke is treated with great deference as he solemnly testifies that if it weren’t for the Fed, the crisis would have been much worse. But then, how can anyone be held responsible for failing at a job no human could do?
At the very least we should split the monetary policy and regulatory functions of the Fed, as was done through the Maastricht Treaty that established the European Central Bank. What we need now is a debate about how to break up the Fed—and some of the sprawling financial institutions it supervises—in order to make both the regulator and the regulated more manageable and accountable.
— Mr. Bhidé, a visiting scholar at Harvard, is the author of “The Venturesome Economy” (Princeton University Press, 2008). He is currently writing a book about the financial crisis.
Given salaries are falling rapidly, and even previously thought safe jobs in Local and State government are now in serious jeopardy, I put it out there the bottom for the housing market is far below it’s starting position. I would not be surprised if we do not see prices rolled back to the mid 80’s in some bubble areas of California, Florida and other severely over leveraged States so if there is going to be an “Equilibrium” it is not going to be pretty.
Do you think the PTB (the Fed, Treasury, zombie GSEs, FHA, HUD, FDIC, etc) will not work together to ensure that no affordably-priced bottom is ever reached? Or is it that you don’t believe any such effort will succeed, even if the attempt is made?
What happened during the 1990s bust? Did the PTB unsuccessfully attempt to prop up home prices, or is the current such attempt a first?
One only has to look at property prices in third world countries where prices have nothing to do with local salaries. The difference is that almost everything in those places is owned by very few. That said, no I do not see current efforts succeeding, short of demolishing all foreclosed homes or renting them as low income housing in a sort of “council house” type effort as the ranks of the homeless swell and hundreds of thousands of homes sit empty rotting away.
How can one tell whether a mania has not ended? Well, for one thing, few people are saying real estate is the worst possible investment — just yet. And then there are the recurring bidding wars, very reminiscent of the bubble era peak. The mania lives on!!!
* The Wall Street Journal
* HOUSE TALK
* JULY 31, 2009, 3:11 P.M. ET
Rookie Home Buyer Mistakes
Rushing to grab the tax credit and caught up in a bidding war over a distressed property, a first-time home buyer omits the basics.
By JUNE FLETCHER
Like many first-time buyers who want to take advantage of the $8,000 tax credit before it expires on November 30, Brendt Montgomery was in a rush to buy a home. And what better than a seemingly bargain-priced distressed property?
Mr. Montgomery, a 25-year-old manufacturing engineer, recently moved to Atlanta from Pittsburgh. After looking around for a day, he quickly found a condo that had been repossessed by the bank. He gave it a quick tour, made an offer and then embarked on a short vacation. While he was gone, a bidding war erupted, and spurred by the competition, he upped his bid to $143,100. His offer was accepted, and as soon as he returned, he signed a 33-page contract without really reading it. He was thrilled.
But the high didn’t last more than a week or two. After paying $2,000 for an earnest money deposit, plus $250 for an inspection and $85 to the condo association—but before the deal closed–he again toured the condo.
There were problems: dirty carpets, mold in the air conditioning system, holes in the wall. He had second thoughts about how secure the first-floor location might be, and realized that the north-facing windows would never let in much light. “It was a little depressing,” he says. “I realized I’d acted hastily.”
…
The Baltimore Sun
Viewpoint: The pigs are back at the trough
By Arianna Huffington
July 31, 2009
America, it seems, can’t wait to get back to business - risky business - as usual. No matter how atrocious business has been.
Newsweek’s latest cover story declares that The Great Recession is over. A Merrill Lynch report concurs, saying, “The recession is over … We are bullish on global equities.” Goldman Sachs is placing riskier bets on the market than it did before the financial meltdown (and setting aside huge amounts of money to pay its executives).
The problem is, this victory dance is being done on top of the same shaky financial system that nearly toppled over, sending us all plummeting into the economic abyss. And while the market is over 9,100 (with another 10 percent gain predicted by the end of the year) and Goldman, Citi and Bank of America are reporting multibillion-dollar profits, unemployment is heading to 10 percent, foreclosures continue at a rate of 10,000 a day, credit card defaults are hitting record highs, and states all across the country are cutting vital services to the bone.
We’ve seen this headlong rush to move on before. And it should be making us very afraid.
In 2003, I wrote a book called Pigs at the Trough detailing the corporate greed and malfeasance that brought us the financial scandals at Enron, WorldCom, Tyco, Global Crossing and many others. Rereading it in the midst of the current crisis, I was stunned to see the direct line connecting the outrages of 2003 to the predicament we are facing today, and how they set the stage - and opened the door - for the much larger, more sophisticated and much more dangerous excesses that drove the housing and financial collapse of the past year.
…
There is NO downside to the risk. In a heads I win, tails YOU lose scenario, massive bonuses are paid out to senior members if the risks pay off and if they do not, they are bailed out and massive bonuses are paid out.
NPR
Senate Subpoenas Banks Over Subprime Mortgages
9.57 am
July 30, 2009
By Mathew Katz
Goldman Sachs, Deutsche Bank, and Washington Mutual were issued subpoenas by a Senate panel investigating evidence of fraud in the subprime mortgage crisis, the Wall Street Journal reports this morning (subs. req’d). Washington Mutual is now largely owned by JPMorgan Chase, so their subpoena also drags Wall Street’s other titan into the mix.
Citing officials familiar with the subpoenas, the Journal said the Senate Permanent Subcommittee on Investigations is trying to find out whether internal memos show that bank executives doubted the financial soundness of the mortgage-backed securities their institutions put together.
The subpoenas will force the banks to hand over hundreds of company e-mails — even if they don’t find show evidence of fraud, they’ll provide an interesting snapshot of what executives at the time really knew about those delightful subprime mortgages.
The British MP are leading the charge towards eliminating free “too-big-to-fail” bailout insurance. STAY THE COURSE!!!
Bank regulation reform needs to be more radical, say MPs
Cosmetic banking regulation reforms will not end muddle, says Treasury select committee
* Phillip Inman
* The Guardian, Friday 31 July 2009
* Article history
An opportunity to impose fundamental reforms on banks at the heart of the credit crunch is being lost as ministers indulge in “cosmetic” reforms that do little to end the muddle of financial regulation, a powerful group of MPs says today.
The Treasury select committee has accused the government of rushing to endorse the current regulatory system, with minor adjustments, before considering the remedies needed to keep banks from returning to reckless dealmaking and lending.
In a hard-hitting report released today, the all-party group of MPs said it was unacceptable to allow banks to grow in value to several times the national income and be “too big to fail”. Instead the government’s approach should be based on there being no banks that are “too big to save’”.
…
I would personally rather shoot an entire herd of elephants than allow them to run amok and trample and crap all over innocent bystanders. De gustibus non est disputandum, I guess.
Capitol Report
Jul 27, 2009, 4:01 p.m. EST
Bernanke’s protests on too-big-to-fail ring hollow
Statements at town hall meeting don’t reflect reality in Washington
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Like any politician, it seems Federal Reserve Chairman Ben Bernanke is prone to saying one thing when he’s on the hustings and doing another thing when he’s back inside the Washington Beltway.
A case in point is the issue of too-big-to-fail banks roaming the American economy.
Bernanke was asked about this issue more than any other during his town hall meeting on Sunday night with citizens of Kansas City.
The Fed chairman went to Kansas City to assure the average Americans that the economy was on the mend and the central bank was on top of the situation. But going through decades of endless debate and little action over the too-big-to-fail question didn’t fit with that strategy.
“The problem we have is that in a financial crisis if you let the big firms collapse in a disorderly way, they’ll bring down the whole system,” Bernanke told the meeting.
“When the elephant falls down, all the grass gets crushed as well,” Bernanke added.
…
‘Real estate has always been a good investment, and right now it has never been better from a residential standpoint,’ said Steve Bottfeld, executive vice president of Marketing Solutions.”
“Real estate has always been a good investment,”
SAY WHAT??? Do you have a brain tumor, Stevie?
Holy shit. WOW!