HBB On The Road To San Diego - Day Two
This thread can double as a bits bucket. I’ll be posting observations, etc, during the next few days on my trip out west.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Sorry about running a little late. I had computer and wireless problems this AM. Thanks to everybody who came out to Carlsbad last night, and hopefully someone will post some photos, etc.
We should chip in and get Ben a new laptop as a campanion to his other one. photos up by tomorrow. promise.
Cash for clunkers only which means a possible credit only if he’s upgrading from a pre pentium 166 to a 3ghz or higher.
only if he’s upgrading from a pre pentium 166 to a 3ghz or higher.
Wonder what I could get for my Kaypro?
Wonder what I could get for my Kaypro? My county’s hazardous waste center will take it off your hands for free.
My friend just bought two of them. I have a Kaypro II, Osbourne Executive, and recently picked up an IMSAI 8080. Going to do a little mobile museum exhibit (with the tons of other atari, commodore, amiga, TRS-80 and other various hardware) at two events. Should be interesting.
Ann —
I am in the doghouse w/ my actress daughter for missing her monologue last night. I simply was unable to tear myself away from the HBB gang’s August company.
I was trying to remember the name of that acting school in Pasadena you attended? Perhaps if I help my daughter figure out her future educational options, she will find it in her heart to forgive me for missing her strutting and fretting for a few minutes upon the stage last night.
“I simply was unable to tear myself away from the HBB gang’s August company.”
And what economic/housing issue did you have so much trouble pulling yourself away from? Oh yeah, FISHING.
In all seriousness it was great to see everyone last night. I tried to post a link to the photos this morning but I think the post got eaten. I will redo the post in the morning at the top of tomorrow’s bits.
Ack! You missed your daughter’s performance? Sorry for our part in contributing to your daughter’s performance.
Still, it was good to see everyone last night. We really need to do it more often.
Typos…
Sorry for our part in contributing to your absence at your daughter’s performance.
No worries — she is young, resilient and sassy. In fact, judging from recent experience, I noticed little difference in her attitude towards me from what it would have been if I had been in attendance.
This Freshman wishes he could have been there Ben!
Ben, when are you going to make it to the Pacific Northwest?
Or the Beeg Apple?
Goldman employees told no big purchases:
(Reuters) - Goldman Sachs Group Inc (NYSE:GS - News) Chief Executive Lloyd Blankfein told employees to avoid making high profile purchases, the New York Post said, citing sources.
Blankfein, who first asked employees to avoid large purchases late last year, has stepped up his campaign in recent weeks, a source told the paper.
“This is a sensitive time for us, and (Blankfein) wants to make sure that we’re not being seen living high on the hog,” the paper quoted an anonymous Goldman executive as saying.
Goldman has faced a torrent of unwanted publicity recently including an unflattering story in Rolling Stone magazine, which accused the bank of having a key role in various market bubbles stretching back to the 1920s.
A Goldman spokeswoman declined to comment to the paper.
Goldman could not be immediately reached for comment by Reuters after regular U.S. business hours.
Last week New York Attorney General Andrew Cuomo, in a report into compensation paid by banks, said employee pay “has become unmoored from the banks’ financial performance.
So, even the investment bankers are going to be saving more this year? ‘Cause I don’t see anything in there about getting paid less money - just not spending it in a way that inspires an article in New York magazine.
“That’s it guys, no big purchases. Nothing over $50 million. No extra Gulfstream or Leer jets this year. Charter flights instead.”
Drat! I’ll have to send the maid to pick up my new albino tigers.
What’s she look like? Leopard micro?
Lay low for a couple years, Willie. Hide the score.
.
Right…. that scene from GOODFELLAS…. was the 1st thing that came to mind when I read this…..
Timmy
Let’s hope it ends the same way. Cue the piano solo from “Lela”.
Lets hope so.
Lelaaaaaa
Goldman Sachs Group Inc (NYSE:GS - News) Chief Executive Lloyd Blankfein told employees to avoid making high profile purchases…
Isn’t there a scene like that in “Goodfellas”?
and we all know how well the warnings were heeded in Good fellas.
makes no sense to me..
Why would govt put pressure on rich people who want to spend money.. Regardless of where the money originated, if nothing else spending it puts the money back into circulation and helps some sector of the economy… also increases tax revenues..
It isn’t government pressure. It is the head crook telling all his crooked henchmen to lay low because the rabble are looking around for their pitchforks and torches!
i know.. i just skipped a step.. why is the head crook telling them to lay low? Govt pressure.
Govt is who got this anti-bonus crap started. And they wouldn’t have done it at all if the media didn’t pressure them.
i’ll say it again.. executive pay packages are right there in the prospectus for anyone to see, before the investor buys the stock and before govt budget wonks give them TARP money.
the whole thing sux, imo.. mark my words.. you support Big Brother limiting pay and bonuses for anyone, and we’ll all be sorry in the end.
I’m sure most of us wouldn’t give a rat’s patootie about the bonuses if the fraudsters didn’t come knocking at our door (the taxpayers’) looking for a bailout.
Hey folks, it’s so bad (how bad is it, Muggy?)that I set moldy garage carpet out last night for garbage, and someone removed it overnight.
I dunno, maybe they couldn’t see the mold, but it was not the kind of carpet you give to a friend.
They probably needed something to wrap a body in.
Good call, I can’t believe I didn’t think of that… that’ll make for a good CSI episode.
I got the results back from trace on your rug. We’ve got dog urine, baby vomit, and detergent. I think our killers are working together, maybe a pug an a toddler.”
The bad thing is that they’ll trace your DNA to it, so you’ll be on the hook for the body!
TEE HEE !!!
TEE HEE!!! to you alpha!! (the other got knocked down, Mr. Filter is upset…again.
U.S. Incomes Fall 1.3%, Biggest Drop in Four Years.
Aug. 4 (Bloomberg) — U.S. personal incomes tumbled 1.3 percent in June, more than forecast and the biggest drop in four years, signaling that consumer spending will take time to recover.
The decline partly reflected the unwinding of one-time transfer payments from the Obama administration’s stimulus plan, which boosted incomes 1.3 percent in May, figures from the Commerce Department showed today in Washington. Spending rose 0.4 percent in June as prices climbed. Adjusted for inflation, purchases fell 0.1 percent, the report showed.
The worst economic slump in seven decades eased last quarter as government spending programs started to take hold, underscoring forecasts the recession will end by the end of the year. The recovery is likely to be muted as job losses and falling home values cause Americans to boost savings and limit spending, which accounts for about 70 percent of the economy.
“We’ll see a weak economic recovery by past standards,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. “For a sustained pickup in consumer spending, we need a clear-cut improvement in the labor market.”
Also today, the National Association of Realtors said the number of contracts to buy previously owned homes in the U.S. rose in June for a fifth straight month and beat economists’ forecasts, as lower prices attracted buyers. The 3.6 percent gain in the index of signed purchase agreements, or pending home resales, followed a 0.8 percent gain the prior month that was larger than previously estimated.
Buy or sell now before the $8,000 tax credit goes away.
I wonder how many people went for $4,500 cash for clunkers and lost double that driving off the lot and went for the $8,000 first time home buyers tax credit and will lose quadruple that in a year.
“went for the $8,000 first time home buyers tax credit and will lose quadruple that in a year.”
Only quadruple? You are an optimist, jeff…
I had a buddy ask me a while back whether I was going to take advantage of the $8K credit (and he was kinda pissed that I qualified for it after being a bubble-sitter!), but my response to him was that $8K sounded like how much a $400K Seattle house would go down in a single month this year (e.g. about a 2% decline).
Yeah, I said something like that re the cars a couple days ago.
+ Cash for Clunkers = levarage up !!!
You mean before it gets doubled for next year to $16K?
After the market craters this fall, I’m guessing there will be a lot of pressure to do that.
‘Scuse me for being a bit obtuse, but I’m hearing a lot of HBB-talk about the housing market cratering this fall. Would that be because of:
1. Shadow inventory starting to trickle, then flood, into the resale market?
2. Interest rates increasing?
3. The economy, with its crummy employment picture, continuing to be lousy?
4. All of the above?
Please edumacate me.
Not 3 yet.
But we also have the following:
5) It takes a while to close on a house so sometime this fall it will be too late to get the $8000 credit.
6) Normal lower demand once the moving season for families with kids in school is over.
7) Anyone have another one? Isn’t there a moritorium on foreclosures ending somewhere? If corporate earnings don’t turn significantly positive for the third quarter, the stock market might tank again….
“Anyone have another one? Isn’t there a moritorium on foreclosures ending somewhere?”
I believe Cook County (includes Chicago), IL’s moratorium ends sometime this month. It was not widely reported, only applied under certain conditions, and was due more to the court system being backed up than to force more time for modification negotiations.
Cali’s second moratorium ends when, September?
polly has it right with (5) and (6). Those are the two biggest factors I see on the horizon.
(1) is also a growing factor, as pipeline gets primed with REO after the various moratoria expire. (2) I don’t believe, and (3) will be true, but I don’t see it as growing in significance.
Another few possibilities:
7) End of the seasonal modifications (e.g. Case-Shiller seasonal mod caused some anomalies in the numbers the last month or two, and will likely overcorrect in the other direction around fall.) More negative reporting on this will cause a feedback loop.
1. Shadow inventory - yes it’ll continue to hit the market, but who knows if or when it’ll be a flood. Most likely IMO it will just continue to be factor for years - like 5-8 years.
2. Interest rates - yes. They’ve already gone up some, and will probably continue to do so as the economy “recovers” and/or simply as inflation keeps looming larger as the Fed keeps its rates at 0.
3. Economy - hard to tell. Same as #1 seems to me.
Biggest factors I see are:
- The $8k credit pulled forward demand from the future and pumped up sales (and prices) this spring and summer. Even if the $8k credit remains in place, that pulled-forward demand will be gone by fall probably. It can be renewed only by an increase in the credit (e.g. to $16k).
- Sales are always down in the fall, even during a normal market. Prices are down too, relatively speaking. So even if prices are up when seasonally adjusted, the fact that they’re down month-over-month this fall will spook some “investors”, since they thought (based on the spring and summer month-over-month numbers being up) that housing had reached a bottom, and will now see that it didn’t really.
(first post got munched; retrying…)
polly has it right with (5) and (6). Those are the two biggest factors I see on the horizon.
(1) is also a growing factor, as pipeline gets primed with REO after the various moratoria expire. (2) I don’t believe, and (3) will be true, but I don’t see it as growing in significance.
Another few possibilities:
7) End of the seasonal modifications (e.g. Case-Shiller seasonal mod caused some anomalies in the numbers the last month or two, and will likely overcorrect in the other direction around fall.) More negative reporting on this will cause a feedback loop.
6) Normal lower demand once the moving season for families with kids in school is over.
It’s not just families with kids — in colder climes, that sale likely has to happen before mid-October no matter what the demographic. Sales slow to a tiny trickle mid-fall and don’t pick up again until spring, even in better economic times. So owners in colder regions know they have two months at the outside to make something happen, otherwise they’ll be sitting on their property for at least another 4 to 6 months.
Grrr… Response munched twice. I’ll try again later.
polly has it right with (5) and (6). Those are the two biggest factors I see on the horizon.
(1) is also a growing factor, as pipeline gets primed with REO after the various moratoria expire. (2) I don’t believe, and (3) will be true, but I don’t see it as growing in significance.
Another few possibilities:
7) End of the seasonal modifications (e.g. Case-Shiller seasonal mod caused some anomalies in the numbers the last month or two, and will likely overcorrect in the other direction around fall.) More negative reporting on this will cause a feedback loop.
5. The explosion of the Commercial realestate market.
Oh, and all the other things as well
Ahh, should have read the rest of the posts before I numbered that but anyhoo. CRE is going to crater by the end of the year as people find that they can’t roll their debt in to new loans at anything less than loan-shark rates. A rolling loan gathers no loss but it has to stop somewhere.
The ABR index is still as flat as road kill and everyone I know in the A&E biz is either out of work or holding on by their fingernails.
This thing is FAR from over.
List in April, Panic in September.
Getting dizzy with all those 5’s 6’s
5 6 5 6 5 6 5 6 5 6 5 6
whew, glad pc finally took the posts. 5 6 5 6 5 6 5 6
stop the merry go round.
remember the $2.5 mill 1 ac open house I mentioned?
Friend Pulled up the profile and not only is the 1st house refi’d to max, so is the primary residence and the other 2.5 ac right next door and due 1 yr 2010.
I think that one isn’t going to end well, but then they might be the lucky kind.
“It can be renewed only by an increase in the credit (e.g. to $16k).”
I see nothing there which the printing press technology cannot solve.
I foresee more of a slow leak rather than a bottoming. The government is going to do everything it can to try and limit the drop in prices.
We have serial bottom callers, and serial price crash callers. The Economist magazine had a major (cover?) article back in 2004 on the “House Of Cards” that was the world-wide real estate market.
Eventually one or both may be right… Prices are downwardly sticky though, in many things, until one gets capitulation.
“U.S. Incomes Fall 1.3%, Biggest Drop in Four Years.”
Did they forget to include Wall Street bonus payments in the calculation?
Did they forget to include Wall Street bonus payments in the calculation? I doubt it, but those bonuses are not paid every month, so there may be a bump in this report when they are paid. It would be interesting to see incomes regularly reported for those who are not at the very top of the heap.
Wall Street pays out bonuses only once a year.
Mission Accomplished!
In Awesome Depression, Obama-handouts will be income!
BOSTON -(Dow Jones)- GMAC Inc. said it was in discussions with the Federal Reserve Board related to the $5.6 billion the lender has to raise in new capital by Nov. 9.
GMAC has to raise this capital to satisfy the requirements of the government-conducted stress tests earlier this year. The lender could raise these funds through a mix, including issuing new equity, converting other capital securities into common equity, divesting its businesses or asking for additional federal help.
The $5.6 billion is “still a subject of discussion” between the company and the Fed, said Robert Hull, GMAC’s chief financial officer, during a discussion Tuesday on the company’s second-quarter results. Hull said GMAC doesn’t “have a clear answer or one we could disclose.”
The lender has until Nov. 9 to raise the required capital.
“GMAC has to raise this capital to satisfy the requirements of the government-conducted stress tests earlier this year.”
Every time I read that, a bizarro image pops into my head of government interrogators tormenting hooded bankers in the confines of Gitmo.
…government interrogators tormenting hooded bankers in the confines of Gitmo.
We can always dream…
Dare to dream!
Being facetious, but lets trade bankers and WS for gitmo guys.
“Every time I read that, a bizarro image pops into my head of government interrogators tormenting hooded bankers in the confines of Gitmo.”
ROTFLMAO. No doubt stuffing 3″ diameter rolls of hundred dollar bills where the sun don’t shine.
Is this why Ally Bank is offering above average savings rates? If so, hold out until the week before Nov. 9th. You might get some good CD rates then.
Ally Bank???
Yes, it’s the “new” GMAC bank.
CHARLOTTE (AP) — The banking arm of ailing auto finance company GMAC is taking on a new name, hoping to smooth its image and entice new customers as it works to drive deposit growth.
As of Friday, GMAC Bank has become Ally Bank, which will offer a variety of savings products, including no-penalty certificates of deposits, online savings accounts and money market accounts.
http://www.usatoday.com/money/industries/banking/2009-05-15-ally-gmac-bank_N.htm
GMAC Bank was changed to Ally Bank a few weeks ago.
AP ENTERPRISE: Federal tax revenues plummeting
WASHINGTON – The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.
The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.
Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.
The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.
http://news.yahoo.com/s/ap/us_plummeting_taxes
But..but…the recession is over! Homes sales have increased again! Nothing to see here! All is well!
I still can’t figure out what the heck the government is thinking unless it is to print our way to wiemeir ruin. They’re like the guy who lost his job and is running up every credit card he has before filing for bankruptcy.
FWIW (being Devil’s advocate here) - while the current trend is *definitely* towards that - absolute default within a few years’ time, the trend will probably not continue as such.
- I would imagine the bulk of the decreased revenue was due to last year’s fall stock plummet - i.e. people who normally pay huge capital gains taxes instead actually got money *back* from the government for 2008, since they declared big losses instead. Unless the DJI drops down below about 7k again before the end of the year - that same thing won’t happen this year. So 2009 receipts will definitely not drop as far, if at all.
- Government spending is in a huge spike right now due primarily to TARP and the Stimulus. While there have been talks of TARP2 and Stimulus3 (the one in February was 2), that talk has gone away as far as I see. Thus expenditures at this point at worst look to be flattening; even with the health-care plans.
A high-level view.
Cap gain income tends to be much more active in the 4th quarter.
More likely from lack of witholding on people who are wage earners and people who normally have to pay quarterly taxes on their regular income (1099’s) and are either not paying even though they should because they need the money or simply have much less income they are paying on.
Also, I used to make quarterly payments because interest income on savings was high enough to warrant it. Now? Not so much.
Same here.
No quarterly payments this year from us!
“Thus expenditures at this point at worst look to be flattening; even with the health-care plans.”
You are forgetting about the treasury-fed two step.
Inflation is another form of taxes and it is coming.
Someone on the radio this morning said that the projected federal deficit over the next 10 years is a cumulative $10 trillion, which will nearly double the national debt. If a human person behaved this way many would rightly suspect that he had completely lost his mind.
Or decided to go to medical school.
“wiemar ruin”
If the equities market doesn’t have a large correction in the next 3 months, or gold closes above $1000 again, it is MHO that the inflationary collapse is baked in.
Given it’s likely effect in preventing prices from correcting off their bubble peak, shouldn’t the program be titled “Making Home Unaffordable”?
Wall Street Journal
* AUGUST 4, 2009, 10:35 A.M. ET
Mortgage-Servicer Performance Is ‘Uneven’
By MAYA JACKSON RANDALL and JESSICA HOLZER
WASHINGTON — Some 9% of eligible borrowers have received trial modifications under the Obama administration’s ambitious effort to help struggling homeowners, according to data released by the Treasury Department Tuesday.
The administration announced its highly anticipated plan to stabilize the housing market in February through a program that provides $75 billion in incentives for borrowers, mortgage servicers and investors. However, foreclosures are still mounting amid ongoing weakness in the labor market. U.S. foreclosure activity in the second quarter was up 11%, according to a July RealtyTrac report.
The administration Tuesday acknowledged that the performance of participating mortgage servicers has been “uneven.”
For instance, Bank of America Corp. has started trial modifications with only 4% of the eligible mortgages in its servicing portfolio, according to a report Treasury provided. Meanwhile, J.P. Morgan Chase & Co. has started trial modifications on behalf of 20% of its eligible delinquencies. Wells Fargo Bank’s share is 6% while trial modifications started by Wachovia Mortgage make up just 2% of estimated eligible delinquent loans, the data shows.
Despite the low numbers, Treasury still says the “Making Home Affordable” loan modification program is on pace to offer assistance to up to 4 million homeowners over the next three years.
The administration said it has asked servicers to more than double the total of trial modifications started by Nov. 1, which would bring the cumulative total to 500,000 in a few months. Currently, only 235,247 modifications have been started.
(234,247 / 4,000,000)*100 = 5.9 percent of 4 million modifications started, 94.1 percent to go…
The administration announced its highly anticipated plan to stabilize the housing market
Trying to control the market is like trying to hold back the waves.
Yeah, that worked really well for King Canute.
Slim, I saw your note yesterday.
If you post the link to your site, I’ll contact you to get the L & F agent name.
Thanks for your help. Here’s the link to my site.
Trying to control the market is like trying to hold back the waves. Where is King Canute when we need him?
The administration announced its highly anticipated plan to stabilize the housing market
The housing market will stabilize when all the boneheads who paid too much are foreclosed on and start over at more reasonable prices.
I am no financial genius by any stretch, but when I moved to Vegas in ‘05 there was no way in hell I was going to pay $400k for a 1600sq/ft stucco box!*
I have no sympathy for anyone who did so without seriously considering two very important questions - 1)why is the price so high? & 2)How can it possibly stay this high?
*(of course, I had the added incentive of not wanting to be on another mortgage with my then-wife)
It does intrigue me that while some realize that the skyrocketing prices from 1999-2007 were caused by a credit bubble, they don’t then realize that removal of that bubble will cause prices to revert to historical norms.
Now, how long that will take with the government funnelling taxpayer’s and their children’s money to the REIC with the relentless bailouts, is anyone’s guess.
That’s 5.9 percent too many!
I wonder what the U.S. is going to look like after this is all said and done. I’d like to think we’ll see smaller, decentralized government. The last 5 or so administrations have really screwed this country over.
“I wonder what the U.S. is going to look like after this is all said and done.”
Like it did in the 1940’s and 1950’s with big central government and grand plans for everyone
just a guess using the history repeats itself reasoning
“I wonder what the U.S. is going to look like after this is all said and done.”
Mexico.
The Soviet Union.
How did it become the gubmint’s duty to pressure bankers into extending forebearance to FBs? This is an exercise in futility, as so many homeowners are so deeply underwater that either the amount of transfer payments from everyone else to FBs would be politically unacceptable, or else very few FBs could be helped. I don’t suppose anyone bothered to put pencil to paper to figure any of this out?
Further, there really is no apparent public purpose to justify interfering with private contracts between lenders and borrowers. Those who sat on the sidelines outbid by FBs who borrowed unrepayable sums to purchase luxurious homes they could not afford should not now be forced to pony up with liquidity to help lenders extend forbearance to enable said FBs stay housed.
Why is this so difficult to grasp?
Tuesday, August 4, 2009
Few benefit from loan modification plan
The Treasury Dept. reports that fewer than 10% of eligible delinquent home-loan borrowers get help through the mortgage modification program. Some banks are doing better than others, but Obama administration expects all banks to do more. Bob Moon reports.
Kai Ryssdal: When you add it all up, the Obama administration has set aside $75 billion for its foreclosure prevention programs. So far, though, less than 10 percent of borrowers who are eligible for help have actually gotten any. That was the bottom line today from the Treasury Department’s first progress report on the voluntary mortgage modification programs it has. Voluntary being the key word there. Treasury say some banks have ramped up fast to offer lower house payments to those who can afford them. Others haven’t been so fast. Here’s our senior business correspondent Bob Moon.
…
Wall Street Journal
* AUGUST 4, 2009, 9:45 A.M. ET
GMAC’s Loss Widens on Charges, Souring Loans
BY APARAJITA SAHA-BUBNA AND KERRY GRACE BENN
GMAC Financial Services reported a second-quarter loss of $3.9 billion, driven primarily by a charge related to the lender’s incorporation and continued red ink stemming from souring mortgage loans.
…
Time for them to hand out some booooonuses. A.S.A.P.
Just keep making cute commercials and all will be fine.
Timmy loses it and goes after Sheila with F-bombs:
Geithner Vents at Regulators as Overhaul Stumbles
WASHINGTON — Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration’s faltering plan to overhaul U.S. financial regulation, according to people familiar with the meeting.
The proposed regulatory revamp is one of President Barack Obama’s top domestic priorities. But since it was unveiled in June, the plan has been criticized by the financial-services industry, as well as by financial regulators wary of encroachment on their turf.
Mr. Geithner told the regulators Friday that “enough is enough,” said one person familiar with the meeting. Mr. Geithner said regulators had been given a chance to air their concerns, but that it was time to stop, this person said.
Among those gathered in the Treasury conference room were Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro and Federal Deposit Insurance Corp. Chairman Sheila Bair.
Friday’s roughly hourlong meeting was described as unusual, not only because of Mr. Geithner’s repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.
Mr. Geithner, without singling out officials, raised concerns about regulators who questioned the wisdom of giving the Federal Reserve more power to oversee the financial system. Ms. Schapiro and Ms. Bair, among others, have argued that more authority should be shared among a council of regulators.
“You are talking about tremendous regulatory power being invested in whatever this entity is going to be,” Ms. Bair told the Senate Banking Committee last month. “And I think, in terms of checks and balances, it’s also helpful to have multiple views being expressed and coming to a consensus.”
From what I’ve heard, Sheila Bair is one tough lady. She doesn’t take shhhhh or fffff-bombs from anyone.
Timmy’s nasty behavior toward her will boomerang back on him.
Can’t help thinking that he’ll soon be heading back to the house that he’s having trouble selling.
Isn’t she the one who keeps advocating bailing out the FBs?
I believe that we read an article here about Bair removing her house from the market until prices rebound, based on the advice of her Massachusetts realtor. Before de-listing, it was reduced to a price that was more than double her 2002 purchase price. She is renting it out.
Timmay was just sore at Sheila for urging “timely recognition” of home equity loan losses.
It is almost budget season in DC as the government year ends September 30. Agency heads are required to put out budgets. How is she supposed to project a budget if there is no way to know how badly off the banks are?
The political play is interesting. If I were her, I’d put out 5 to 10 different budgets and say that I can’t choose among them because I don’t know what the real market value of the assets are and don’t know if there will be a move back to market pricing of balance sheet assets during the year.
Accounting nerd fireworks ensue.
Another accounting nerd? OMG, we are definitely going to have to go out for a beer when I come to DC. My treat.
Oh, I’m not really an accounting nerd. I just play one sometimes at work.
Slim, you know something about bikes, right? Does this look like a reasonable deal (assuming that my height matches hers)?
http://washingtondc.craigslist.org/mld/bik/1304841103.html
Thanks. And like I said, I’m all up for a meet up.
That bike does look like a good deal. And it’s a bike shop Goose, rather than the dumbed-down (and poorer quality) Geese that Wal-Mart sells.
I say go for it.
LOL, Polly.
“agencies generally considered independent of the White House.”
You know darn well that’s not how Timmay and the WH see things. You will submit, and you will like it.
“You know darn well that’s not how Timmay and the WH see things. ”
Yes, the executive branch has a responsibility to set the policy used to _execute_ the statutes.
But they seem to be forgetting that the mandate to regulate actually comes from the law as passed by Congress. You can’t just override their Congressionally-given mandate with policy.
From NRO’s The Corner blog:
Over the weekend, National Economic Council director Larry Summers and Treasury Secretary Tim Geithner said that tax increases could extend beyond the wealthy and that they could no longer guarantee that the middle-class would be spared. Yesterday, White House press secretary Robert Gibbs restated the president’s pledge not to raise any taxes for families making less than $250,000, and sheepishly explained that Geithner and Summers “allowed themselves to get into a little hypothetical back-and-forth.” …
Geithner and Summers were taken to the woodshed for blurting out the truth: President Obama’s spending proposals cannot be paid for by simply taxing the wealthy.
Geithner should have rolled a hand grenade under the door.
And then gone right in to share his fate with the rest of them.
Geithner should have rolled a hand grenade under the door. Geither should fall on his own sword.
Come on, guys. You have all missed the most interesting part of this story from a DC perspective.
Who leaked it and to whom?
Even if there was swearing in the room, I assure you that it was nothing compared to what happened once it became public. So, fess up, Cougar. Where did you find this?
It’s in today’s WSJ (thank you Google).
Mark Felt leaked it
I wondered the same thing, polly! These high-level conversations don’t normally leak like this.
Someone wanted it to. Interesting…
Course, personally I’m glad to see a sign that the pressure is starting to get to “Timmay!” It will be really interesting if he cracks.
Andrew Leonard over at Salon had an interesting perspective on it. Maybe Turbo Timmy is leaking this deliberately to give himself more (wall) street cred? Man-Up a bit in the eyes of the banksters? Show the Hedge Find Boyz he’s got a pair?
Or he’s just loosing it. Dont know enough to apply Occams razor to this one.
Possible though unlikely. I didn’t specify who was swearing after the leak quite on purpose. It would be very unusual for both sides of a meeting like that to want it public, so I’m guessing someone thinks it is not a good thing.
Maybe rachel will have something dishy on this…
From NRO’s The Corner blog:
Over the weekend, National Economic Council director Larry Summers and Treasury Secretary Tim Geithner said that tax increases could extend beyond the wealthy and that they could no longer guarantee that the middle-class would be spared. Yesterday, White House press secretary Robert Gibbs restated the president’s pledge not to raise any taxes for families making less than $250,000, and sheepishly explained that Geithner and Summers “allowed themselves to get into a little hypothetical back-and-forth.” ….
Geithner and Summers were taken to the woodshed for blurting out the truth: President Obama’s spending proposals cannot be paid for by simply taxing the wealthy.
Wow. Sounds like Timmy is closer to the end than I expected.
Couldn’t have happened to a more deserving guy. We’ve got 3.5 years to anticipate similar outbursts from, “The One”.
“Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.”
Oh, reeeeeeeeeeally. How’s that audit of the Fed coming, Timmeh?
MOSCOW (Reuters) - Russian soccer fans have been told to drink whisky on their trip to Wales for next month’s World Cup qualifier to ward off the H1N1 swine flu virus, the head of the country’s supporter association (VOB) said Monday.
“We urge our fans to drink a lot of Welsh whisky as a form of disinfection,” VOB head Alexander Shprygin told Reuters.
“That should cure all symptoms of the disease.”
Russia’s Health Ministry has issued a public warning against traveling to Britain because of the spread of the H1N1 virus but Shprygin said he expected at least several hundred fans would go to Wales for the September 9 qualifier in Cardiff.
“Health officials say this virus is very dangerous but being a fan myself I can tell you that for a real fan nothing is more important than the well-being of the team,” said Shprygin, who also sits on the executive board of the Russian FA.
“Russian fans don’t fear anything or anybody so this virus will not stand in our way of supporting our team.”
The Russian FA also said health issues should not prevent fans from traveling.
“This is a sensitive time for us”. Doesn’t that make ya wanna puke?
I would love to see several states declare autonomy and try to secede and leave the Union. THAT would wake up the nation. For any state to declare that it’s citizens are no longer subject to the federal tax and that the federal govt no longer has authority within it’s borders would be refreshing. The states have a right to do this, in my opinion. The only problem would come when the fed govt would try to assert power in the state’s capital with military force against the governor. Would troops fire on other americans? I see this coming one day if we continue along this road to socialism that our country was never meant for.
BTW, I am only thinking out loud….I havent gone crazy yet
Hey Step, how hot it is over there (right now) old buddy?
Up there in the Golman Sucks article blano.
Thanks Ate.
It was 115 today, a little cooler…
Unbelievable. What a man you are.
Hope you brought a sweater.
For any state to declare that it’s citizens are no longer subject to the federal tax and that the federal govt no longer has authority within it’s borders would be refreshing.
I agree that would be pretty exciting, but highly unlikely as long as the Fed keeps handing out big chunks of cash to the states - that’s why we have universal drinking age and drinking/driving laws, for one.
I’m pretty sure that states lost this right with the south’s defeat in the Civil War.
I don’t know but there still is the Declaration of Independence.
“I would love to see several states declare autonomy and try to secede and leave the Union.”
Never happen. Sadly, frootcayke congressman and sliver groups pander the idea to those who don’t know any better.
I’m hoping Mississippi is first.
There is nothing west of the Mississipi for me. I’m still waiting on that quake to make Cali another Hawaii.
That won’t happen, Been forecasted since ‘65 or earlier and in 66 we saw folks buy alot of boats ‘just in case’.
I think California and Texas would be ripe for it. California because it wants those federal taxes to come to it (Cali is a net payer of federal funds) to fix the budget. Texas just because it’s Texas. They’ve never really liked being lumped in with the rest of the states.
Also, Utah so they can have actual freedom of religion (which translates into brainwashing children, unfortunately) and a few of the more liberal east coast states.
Montana has so many nukes in it that it would be a world crisis if they tried to leave the union.
..no longer subject to the federal tax..
While there are some costs, i think states have a net gain from being in the Union.
Back in the day, no state was obligated to set it’s speed limit to 55MPH but all 50 states did. If they didn’t accept it, they got their federal highway funds cut off.
It’s great to be independent, but like a kid that’s anxious to move out of dad’s house, he’ll soon find he’s gotta pay for a whole lot of things he never even considered..
Exactly how the drinking age was lowered to 18. Threats from the Feds.
You could see Texas, Alaska and California doing that.
Everyone else would be asking New York and Wall St to do the same.
New Jersey would probably declare independance but everyone would ignore them.
So, you’d have three new Bananna republics. California and their IOUs would be bankrupt in a week, after declaring Mexachinglish as the national language and a brief but failed attempt to rejoin California with its Austrian heritage by El Presidenttia Arnold and his new political bride Nancy Pelosi Schwartzengager.
Expect a Texas and Mexico to become one unified country and declare universal war on Panama. No real reason, its just a Texas thing.
Finally Alaska will give itself to Russia. Russia will of course sell it to the United States for a few million in treasuries then in 200yrs claim it was a lease.
i dunno about Texas.. they talk a good talk but i recall about 10 years ago when they went crying for federal disaster money for both a flood and a drought within a span of less than 9 months or so..
that’s the thing.. as soon as something bad happens, where can you turn? To momma. Send a care package.. i’m broke and hungry..
California could never make it on it’s own. i doubt any state could. You gotta have some sort of military presence. Military is not cheap. Gotta have huge “state” taxes to make up for all the federal services. No way can a state afford to build any substantial infrastructure like a big dam or highway system.
Then there’s being dealt with as a foreign country.. the freakin CIA and NSA will be all over that, inciting a coup.. trying to install a puppet govt. Massive competition from the USA would strangle whatever fledgling business economy you have. They won’t play fair.
Where’s this from, Ate??
Hey Oly Gal, I miss ya! Hope everything is OK!
Yeah, last we heard she was hooking up with not-a-gator to go bar hopping. You don’t think those two….nahh….still…those PNW girls are….”modern”.
Hey alpha, I would describe OLY GAL as neo-revisionist, retro, traditional, conventional, insane, quad-polar, and modern! Caveat, regardless of geography. What’s your take?
My granpa would have said “she’s a bubble off plumb”, but he’d wink as he said it.
Sounds better than what I said, alpha! Grandpas are always right!
“she’s a bubble off plumb
Good one.
I have to admit I read “bubble OF plumb” the first couple of tries, though.
a bubble off plumb
LOL - I like that. I’ll have to use it in a conversation soon.
“Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.”
Alan Greenspan, July 30, 1998.
Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.
It’s actually a reasonable position, ASSUMING the gov’t wasn’t going to bail out the losing party, or otherwise end up on the hook for the loss.
But this is what’s weird. We live, presumably, in a democracy, and we elect representatives, who, presumably, listen to the people and do what they want and what will benefit everyone. And we know that large majorities oppose the bailouts. And yet, they still happen. Somehow, “we” — whether you define “we” as the people at large, gov’t officials, or the “system” — we just CAN’T HELP IT.
So, is the remedy more regulation? Why not a real fix? Why not change the system so that bailouts have to be ratified in a popular referendum before taking effect?
I know some of you will say that the Glass-Steagall regime worked fine for 60 years until it was repealed by callous ideologues. I believe that it “worked” about as well as communism worked for 70 years. Individual freedom and initiative were suppressed, there were a host of minor-league disasters along the way, and finally the whole thing blew up.
I believe it’s time for some creative thinking. The 80,000 pages added annually to the Federal Register have failed to prevent the economic meltdown we are witnessing. It’s easy to say in hindsight that the wrong things were regulated or that officials were “asleep at the switch.” But if we chronically don’t have the manpower to understand, let alone enforce, all these regulations, maybe it’s time for a new approach.
It’s actually a reasonable position, ASSUMING the gov’t wasn’t going to bail out the losing party, or otherwise end up on the hook for the loss.
I’ll add something else. We perhaps would have been able to get away with such deregulation if the ratings agencies were truly independent agencies, and not under the government’s thumb (e.g. holding NRSRO status over their heads). I venture (admittedly conjecture) that some agencies would have rated many of the risky securities lower than they otherwise did, since they wouldn’t be under as much pressure to be actively involved in actually helping these derivatives to perform.
As it is though, the primary check that the free market itself has against these unregulated entities - the ratings agencies - aren’t themselves free market.
“’The bottom line is that all those McMansions that were bought during this housing boom are going to go the way of the 1973 Lincoln Continental,’ Merrill Lynch’s David Rosenberg writes. The housing bubble was the most over-owned, overleveraged and oversupplied real-estate market ever, he says, and its unwinding will take years. The revival of consumers saving their money for retirement - rather than expecting their homes to provide the cushion - added with ‘move down’ buyers will depress real-estate prices, he says.”
Dow Jones, December 20, 2007
Architectural history tidbit: The Victorian era was followed by Arts and Crafts and other styles that featured much smaller houses.
…Arts and Crafts and other styles that featured much smaller houses.
Is that why they’re called “Crafstmen”?
Absolutely. Quality not quantity.
The Arts and Crafts movement was everything modern housing isn’t. It emphasized reasonable sized houses, high quality construction, and intelligent, flexible floor plans that allowed a family to enjoy a house throughout their expected lifetime of ownership. (eg centrally located bedrooms that could easily become useful rooms after the kids had moved out) They were definitely a reaction to the oversized, overwrought victorians that they replaced- the McMansions of their day.
Will we see a repeat of this trend? I expect so, but probably revealed less in new construction than in people moving back to more reasonable sized homes as it makes less sense to own all the house you can afford, and as expensive energy costs encourage a return to urban centers and their usually smaller, older homes.
Builders will build smaller homes, and some may even use the words ‘craftsman’ or ‘arts and crafts’ to describe them. But they’ll never replicate the original quality.
In anticipation of this trend of moving back into the urban core, with its smaller, but older homes, Slim has a plan:
I’m looking at the catalog from our local community college. They’re now offering a home remodeling certificate, and lookie-lookie, I’ve already taken many of the required courses.
I’m thinking of signing up for the rest and getting that certificate. My focus would be on green remodeling, which I’m already doing here at the Arizona Slim Ranch.
I suspect the trends going forward will be :
Green remodelling for energy efficiency
Modular and flexible homes for new home building.
Green remodeling for energy efficiency is egg-zactly what I’m doing at the Ranch. And I’m doing it debt-free.
Good for you, AZ Slim.
My parents in Green Valley just stuck on solar to try and get off the grid.
What is partictularly sad (and loathsome) about the housing bubble is how many wonderfull old neighborhoods of modest, well built arts and crafts and prairy style homes all over the country were destroyed by star struck idiots who just had to have the fracking biggest, center hall, lawyer foyer, overbuilt monstrosity in a “nice nice established neighborhood”. In the DC area they finally started tightening up the zoning laws (and actually enforcing them) to prevent this sort of thing but not before some truely cringe inducing crap was thrown up.
The damage from this in-fill development is widespread. So many of our older neighborhoods in CA were destroyed, too.
Including Sears houses first manufactured housing.
I would LOVE to order one now!
Dow Jones, December 20, 2007
Excellent find.
I never heard a more profound characterization! What is that a metaphor, analogy, or what? Also, I had a 73 Continental! and a McMansion!
Looow Riider… “Sing along goin”…
I never heard a more profound characterization! What is that a metaphor, analogy, or what?
Analogy.
if he had said something like, “There’s no more credit to fill the tanks of America’s McMansion Continentals”, then that would have been more like a metaphor.
I think.
Thanks lavi!
Ooops! Except introducing your metaphor with a ‘like’ makes it a simile!
(Pedantic Man strikes again!)
I am not gay!
(Pedantic Man cares not about your sexual preferences. Only that they be grammatically correct and don’t involve dangling your participle into a split infinitive.)
so what?
’so what?’ is what his admirers always shout at Pedantic Man! It’s his battlecry!
alpha: Since I don’t know who Pedantic Man is, should I add HIM to the “Twilight Zone” gang?
Ooops! Except introducing your metaphor with a ‘like’ makes it a simile!
Hey P-Man, the part INSIDE the quotes is the metaphor.
But you are right that my characterization of my sample metaphor is a simile.
Ouch. That hurt my brain cell.
alpha-sloth,
“So what?” was addressed to ATE-UP’s confession that he is not gay.
Pedantic man’s : “…don’t involve dangling your participle into a split infinitive” left me speechless…
made me laugh.
mom was english major, and I am woefully ‘not worthy’.
Pedantic man’s : “…don’t involve dangling your participle into a split infinitive” left me speechless…
“… will depress real-estate prices, he says.”
References please!
Who’s the “he” to which the statement refers?
And who made the statement within Dow Jones? (Being that Charles Dow and Edward Jones have been dead for several decades now)
Thx
Merrill Lynch’s David Rosenberg, it’s there.
“The price of U.S. recession is paid in jobs”
http://www.reuters.com/article/GCA-Economy/idUSTRE5720J120090803
“Brusuelas also argues that firms overdid the job cuts in the panic of the fall of 2008 and will need to bring back workers quickly.”
For some reason so called experts think this is the case. I really believe it’s the opposite. They cut too late and are paying the price. Company should always be lean yet be competitive. Growth does not necessarily mean increasing headcount. Companies should start evaluating productivity. I see companies in the past that hire becuase they have cash to burn which means they have 3-4 people doing the work of one person. Actually, I still see this now. Now cash is not readily available and requirements to get capital will be much harder for the next 5 years.
Some have commented on companies will be very careful in hiring for the next 5 years. I concur with that thinking. In addition, there are more costs to keeping employees. Higher health Costs, Higher Cost Unemployment distribution, etc. This is especially prevalent in California.
Growth does not necessarily mean increasing headcount. Companies should start evaluating productivity. I see companies in the past that hire becuase [sic] they have cash to burn which means they have 3-4 people doing the work of one person.
No truer words were spoken.
And, true confession, I once had a job where I voluntarily went to part-time status before I left. And, wonder of wonders, I found that all of the major tasks could be accomplished in just 20 hours a week.
“Some have commented on companies will be very careful in hiring for the next 5 years. I concur with that thinking. In addition, there are more costs to keeping employees. Higher health Costs, Higher Cost Unemployment distribution, etc. This is especially prevalent in California.”
I think that most will agree that when things turnaround the first thing will be to bring all employees to a 40 hour work week and then pile on the overtime. Increasing employees will increase bene’s and costs.
“Brusuelas also argues that firms overdid the job cuts in the panic of the fall of 2008 and will need to bring back workers quickly.”
I actually agree with this line, to some degree. Here in Ohio, we’ve had a ‘muted’ economy for some time, so companies were already pretty lean. Not much hiring over the past 7 or 8 years.
Last fall a lot of layoffs took place, including at my place of employment. We’ve brought back a number of the people, and have actually hired some temp workers lately. Not all office staff were brought back, but the CFO admitted we were understaffed for the workload, but would need to stay as such for another year or so until we hopefully see some top-line revenue growth.
Once Corporate America resumes hiring, it will be offshore.
My CD saga continues…
As mentioned I am watching Corus Bank of Chicago with intense interest to see if it goes kaput before my CD expires in October, but I did not expect another Chicago banking institution to give me trouble since it is rated as “performing”: Alliant Credit Union, where I have 2 CDs opened in 2007 at 5.25%. One expired at end of July and I faxed in my non-renewal instruction letter since the rate is now very low at 2%. For some reason, they did not acknowledge my non-renewal instruction and went ahead and renewed it anyways. So I called the customer services and here is the conversation:
Me: Hi, my name is XXXXX wanted to close my CD account #XXXXXX because I faxed the non-renewal instruction a few weeks ago, but it somehow got renewed anyway. Can you close it and send me a check?
Alliant CS rep: Oh I am sorry you are having a problem. Let me look at your account history now. Please hold.
2 minutes later:
Alliant CS rep: Yes your CD was renewed at the end of July for another 2 years at 2% APY.
Me: But I faxed a letter say don’t renew, and I even have the fax confirmation report with timestamp on it.
Alliant CS rep: I am sorry about that mixed up, shall I close the CD and deposit the money in the savings account?
Me: no, because the savings account yield is even lower than the CD. I would like a check to be sent to me please.
Alliant CS rep: I see, please hold for a moment, I will be right back.
3 minutes later:
Alliant CS VP: Hello my name is XXXXX and I am the Vice President of Customer Services at Alliant, I hear that you wanted to withdraw your CD, is that correct?
Me: yeah, I do… uhm, is there something wrong? (I am thinking to myself a VP has to take a simple account closing request.. wtf? I mean my CD is at FDIC max. limit but it’s not like it is a $1 million CD or anything).
Alliant CS VP: Oh no but it’s just that we are sorry to hear you wanting to close your account. We offer competitive rates and we are a safe institution and if you check around with other banks you can clearly see that.
Me: yes but I feel that at 2% it is not worth it.
Alliant CS VP: Well with very low inflation it is still a very good deal.
Me: Well but with gov’t printing money and spending it like there is no tomorrow the dollar is going be worth very much vs. other currencies and 2% is no where close to making up for that.
Alliant CS VP: But if you don’t go outside of the country, it doesn’t make any difference, right?
Me: (I almost fell out of my chair at this point, but I managed to keep the conversation going anyway) Uhm, ok, but wouldn’t that matter also when you buy anything that is made or has any parts or materials made from outside of the country and isn’t that a devaluation of my purchasing power anyway?
Alliant CS VP: (after a slight pause) I guess…
Me: Listen, I am not calling you to debate economic theory but I want my CD closed and a check sent to me, unless you are willing to renew at 5% again. Are you?
Alliant CS VP: I’m sorry I am not authorized to do that.
Me: Then can I please have my check?
Alliant CS VP: Yes sir, I understand, the check is on the way.
Me: Thank you, and it was nice talking to you. Have a nice day.
That was the end of the conversation, and so far I have not seen the check yet. I give it until end of the week until I call them back and give them the WTF if I don’t get it by then. I don’t blame banks for wanting to keep funds but this is not the way to go.
If I have a CD maturing that I don’t want to be rolled-over, I always call the bank on the day of maturity, in addition to notifying them of the non-renewal ahead of time. I wouldn’t have a check sent, but rather have it deposited in a savings account at the same institution, that way I can have an ACH transfer of the money somewhere else the same day. You will be losing a lot of time for the check to be in the mail, then for the funds to be on hold while the check clears. I’ve never had to talk to anyone beside the first customer service rep I’ve reached on the phone when I do this, what happened to you seems bizarre.
That was the end of the conversation, and so far I have not seen the check yet.
Wow. thanks for the write-up
cougar, that was a cool exchange.
Thanks for posting that, Cougar!
I’d have to buy an 18-24 month CD to equal the APR my money markets earn, and there is no way I want to tie up the money that long for such pitiful interest rates. A couple of the lower-rated banks are offerring 2% on one year CDs, but its not worth it IMO.
Good luck with Corus. I doubt it will last until October. Its my understanding they haven’t found a bidder, but there may be something going on behind the scenes since the FDIC hasn’t shut it down yet.
I’ve been a short-term CD maven for quite some time. Wish I could get higher interest rates, but don’t we all…
Corus is freaking me out a bit–I mean, on friday they essentially said they’re done…and FDIC hasn’t closed them yet. My memory is shot since college, but I don’t remember a bank coming out and saying they’re essentially insolvent before. Is the FDIC still hoping some private equity comes in to buy the scraps? Are they worried about using a lot of their reserve to cover the deposits, etc?
the dollar is going be worth very much
NOT
Banks are really getting sneaky…
It’s all about the money. I am putting money in a safe in my home. Everyone is out for YOUR money…
http://redtape.msnbc.com/2009/08/in-new-hampshire-residents-pledge-to-live-free-or-die-apparently-that-even-extends-to-online-banking—an-eagle-eye.html
“NOT” going to be worth very much, is what I should have typed.
Coffee #3 coming up.
Alliant CS VP: But if you don’t go outside of the country, it doesn’t make any difference, right?
LOL - guess the guy hasn’t heard that you can actually invest in foreign currencies within the U.S. No wonder they’re going belly-up.
Bank failures/buy outs make me nervous. My bank (A) merged with another bank (B) a couple of years ago (AB). Then they were bought out (C). Now that bank is being bought out (D). I looked up ratings and current bank (C) is 3 star while future bank (D) is 5 star. Guess it’s safe to stay put, but - sheesh - this is a little nerve wracking.
I saw a couple FNM foreclosures over the weekend. One sold for list. Three others received multiple offers. The highest and best offer wins the bidding war.
A while back I mentioned several foreclosures within a mile or two either way of my place. All but one are still sitting there. One of those has a little activity preparing it for sale, otherwise nothing is going on at any of them…..no for sale signs, nothing. A couple have bank reps cutting the grass, the rest have their grass cut by the neighbors.
The one right next to me, a 3bd ranch on a double lot, sold for 30K cash. That’ll hurt the comps. Yeah it needed some work inside but the buyers are busy knocking it off and will be done before school starts.
Where was this?
This is in Jacksonville, Florida. Winston is selling government homes using government loans and government stimulus tax credit checks. He is everywhere. He’s a superhero. In some cases, he’ll pay for appraisal. It’s a ++ good time to buy or sell.
Ron LeGrand must be doing cartwheels with all the great deals Jax has to offer.
DIY chicken-and-egg business booming.
A few months ago, our local food co-op offered an urban chicken coop tour. It was quite popular and sold out well in advance of the tour date.
Government to announce “Cash-For-Cluckers” program. See here. But, don’t count your chickens before they’re hatched.
Another Cheep shot.
Non-registration required link:
nytimes.com/2009/08/04/business/04chickens.html
.
Does anyone find it odd that Bernake states that Greenspan errored in his ways by keeping interest rates too low for too long?
Isn’t that EXACTLY what he’s doing NOW???
Sheeesh!!!
Yes, I’ve thought the same thing many times.
Why is it that so many people agreed Greenspan’s low interest rates caused the problem, but Bernanke’s low rates are somehow supposed to be the cure?????
Sold my house in NM 4 weeks ago, now sitting with cash in CA on the central coast waiting for a deal. not much out there right now. I need to find out more about the back log of REO’s and NOD’s. The economy is awful up here with tons of retail vacancies. I want a house with land that is now $650k, for closer to $500k.
How about less than 500K.
Do I hear 400k
Will you take $200 for a lot more?
Hey, if the man wants to overpay, that is his right. We need market makers on the way down.
$500k?
WTF…. you’ve lost your mind.
30 days.. and the dough is already burning a hole in your pocket? Relax…. give it a year or two. There’s no hurry.
doncha just love all your friends dude?
Hey pal, keep it in your pocket. Never understood a trigger happy man.
Pretend you are in a courtship, take your time.
“If the economy doesn’t recover soon, it doesn’t matter what your social, economic and political agenda is. There’s not going to be any revenue to pay for it.”
~Wm. Gale, Tax Policy Cntr.
There’s not going to be any revenue to pay for it. The USA doesn’t need revenue, it just makes up its money as it goes along.
‘Zactly.
“Revenue?!! We don’t need no steenkin’ revenue!!!”
+ 2 trillion/annum
A field note from my friend Jim the long-distance trucker: His company is based in ND. They are having more trouble getting loads than ever before, he’s been working out of that area 15 years. Some times he waits 1-2 days far from home for a load, this has never before happened. He gets paid a bit for waiting, but not as much as for driving. Some times when he is closer to home, he runs with less than a truckload, servicing spots very close to his home base, something he had very seldom done before. Driving by Chicago is always painful for truckers, but recently the traffic volumes there are noticeably less than ever before.
Thanks for the update, tresho.
Iv’e been lurking since late ‘05. I’m a renter (never owner) getting antsy and wanting to buy before the tax credit expires. I’ve seen a few houses that are selling at 2002 prices. My husband wants a garage to work on his car, and thinks I’m a cheapskate and is losing patience. Talk me down.
you should buy asap.. that way you’re essentially out of the market and, in a year or two when prices have fallen substantially, there’ll be one less qualified buyer i have to compete with..
joey you have such a gentle way;>
and packman, good answer!
i was gonna mention one house i track in san francisco.. According to Zillow, it’s “zestimate” fell $80,000 in just one month earlier this year. How’s that compare to the tax credit?
But then i’m thinking that there’s no point in being reasonable.. Spending money is, for some, powerfully satisfying .. kinda like sex. It haunts you until the urge is satisfied. You really can’t talk people out of it.. but a cold shower might slow things down..
It’d be a lot cheaper to rent a space at Public Storage to work on his car for 2 years than the money you’d lose over the same 2 years buying a house now.
Then he can buy a new car.
How’s that?
(P.S. See above discussion on the reasons why the current house price “bottom” isn’t really a bottom)
Need more info pico . . . hard to present a rational arguement either way if we don’t know where you are, how bubbly is your market, price point you are looking at, what you can afford, inventory levels, etc.
Michigan: Firms accused of selling fake medical policies.
“The policies, which were marketed through radio ads”………
This has become a big problem IMHO. Apparently radio stations will air most anything as long as they get paid.
There are times when I listen to 4-5 minutes worth of ads between songs, and I swear they’re all scams. Debt modification, bankruptcy, foreclosure scams, Robert Kiyosaki seminars (without Robert of course), certain “enhancement” drugs, and even a pill that will guarantee to make your day better. “Good Days” I think it’s called. And much more.
There are times when I listen to 4-5 minutes worth of ads between songs…
Two words:
MP3 Player
They bill themselves as purveyors of health savings accounts. Which come with a high-deductible policy. Which requires you to blow through thousands of dollars of your life savings before the policy kicks in.
Some savings.
Something I’m seeing in my area: Bright orange urgent notices from the electric company. They’re hanging these on mailboxes, gates, and other places where they’re visible to passersby.
And what are they? Well, they’re notices that say that you’d best pay your past due electric bill(s) in full within 24 hours, or your power is going bye-bye.
BTW, the electric company also requires a re-activation deposit equal to your two highest electric bills in the past 12 months. In short, don’t get behind with Tucson Electric Power or they’ll really zap you.
One of these notices got posted on the mailbox of a place at the other end of the block. Happened yesterday morn. Today, it appears that the place, which has been rented to crummy tenants who’ve been running the place down since April ‘07, is deserted.
Oh that’s classic! Take one, copy it on similar paper, and put them on other people’s mailboxes too. Not only does it give the impression that the person doesn’t pay their bills, it will tie up the electric company with mad callers.
it will tie up the electric company with mad callers.
Anarchy!
Okay, evil Tucsonans, here’s what you’ll need for creating TEP havoc in your neighborhood:
Astrobrite orange paper and one of these fine announcements. Remove it from the mailbox or gate of your least favorite neighbor. No sense in giving him/her warning that the electric company’s giving him/her just 24 hours to pay up. Now, go photocopy it and place it on the boxes of other crummy neighbors.
Have fun!
Guerilla tactic, nice.
But if your meter is INSIDE you can refuse to let the electric company inside…then they have to sue you in court
Only a Marshall sheriff etc with a court order can demand to get inside….. If you still refuse they can try and cut your service off from the outside wires or underground …..if that fails then they can actually break down the door and get your meter….
Interestingly - the S & P is exactly at 1000 now, and the Nasdaq is exactly at 2000.
Now we just need the DJIA at 4000.
Bill Clinton’s cool, and, I always thought he was. Good Job President Clinton.!!!!
P.S. I hate politics, and don’t EVEN know what a party is.
“cool” belongs to a beatnik playing bongos.. a cool cat. Our guy Bill is slick.
Yeah.
Sen Schumer claims SEC will move to ban “flash orders,” a form of front-running. SEC head Schapiro said, “I have asked the staff for an approach that can be quickly implemented to eliminate the inequity that results from flash orders.” SecTreas Geithner says, “#$@%$*><+@!!”
From a layman’s view - this seems like a good thing. Flash order to me appear to be quite blatantly insider trading, which of course is illegal.
+1 packman. They should not only be banned; those who came up with “flash orders” and sold them as a product should be prosecuted.
It is blatant, open sale of inside information. The only reason someone would want that information is to act on it (e.g. front-run it); it is by definition not public information yet.
They are essentially paying to get a peak at the orders in the book before they go in the book.
“They are essentially paying to get a peak at the orders in the book before they go in the book.”
Even if it is insider trading, it’s still legal. Just sayin’.
can’t put the genie back in the bottle.. can’t put restrictor plates on traders’ carburetors.
Although anyone can gain access to flash orders by paying a fee, they are useful only to traders who have computers powerful enough to act on the data within milliseconds.
Solving this is a matter of everyone updating their equipment to be competitive.. Evolve and adapt or die.
…flashed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — before they are routed to everyone else….
Just 0.03 seconds.. just??
i did a real quick google search (so don’t fault me for being inaccurate) and…
World’s fastest computer is capable of 40TFLOPS (40 trillion floating-point operations per second).
40Trillion x 0.03 = 1,200,000,000,000 .. That thing does 1.2 Trillion operations in “just” 0.03 seconds.
———-
Someone is working on a 1,000,000TFLOPS system.. one-million-trillion flops..
Chucky Schumer has his hands full..
I find myself wondering whether a class-action lawsuit would make sense here.
They are intentionally delaying _my_ orders for their own benefit (subscription fees), and the benefit of a chosen handful of high-freq traders. And I may get worse execution because of their intentional delay.
Actionable? Seems possible.
Financial Times
Ditch theory and take away the punchbowl
By John Plender
Published: August 4 2009 16:18 | Last updated: August 4 2009 16:18
There are, by now, a thousand and one ideas in circulation on how to change the regulatory architecture of finance. But what about changing the central bankers – or at the very least their mindset, since their notions about how to deal with bubbles have proved extraordinarily costly for the rest of us.
Fifty years ago, central bankerly wisdom was encapsulated in the splendid phrase of William McChesney Martin, longest-serving chairman of the Federal Reserve, to the effect that the job of the Fed was to take away the punchbowl just as the party gets going. That is the polar opposite of the view of Alan Greenspan, who presided over the Fed during the bubble period. He believed that bubbles were difficult to identify and that the central bankers’ task was to clear up the mess after the bursting of the bubble rather than to make a pre-emptive strike to rectify it.
The curious thing is how little debate took place over such a dramatic metamorphosis in the approach to monetary policy. What is striking is that the shift coincided with the replacement in the monetary policymaking process of old-style, market-savvy central bankers, often without formal economic training, with academic economists.
Note, in passing, that William McChesney Martin was a career stockbroker who graduated from Yale in English, not economics. He spent most of his time at the Fed fighting administrations that demanded easy money with the support of a majority of academic economists.
Note, too, that the new breed of economists in central banks have been doggedly wedded to the idea that markets are efficient, despite the recurrence of bubbles throughout history – a phenomenon that makes a nonsense of this belief. And their focus was largely on consumer prices rather than asset prices which did the damage.
In responding to the celebrated question posed by Queen Elizabeth II as to why nobody foresaw the catastrophe, many academic economists have wrung their hands and repeated the mantra about the difficulty of identifying bubbles. This foolishly accepts a mistaken premise. For there were many people, from the Bank for International Settlements, to academe, to commentators in the Fourth Estate, who identified the lunacy at the time. The economist Paul Krugman remarked, with only modest exaggeration, that the last people to twig were those at the top of the Fed.
And these are the people who want to claim the mantle of financial supercop?
This guy is wrong for so many reasons. I will just mention a few:
1) Unemployment is still going up; can anyone remember when the housing market bottomed out before unemployment topped off? I sure can’t…
2) The shadow inventory lurks nationwide, especially on the high end, where Alt-A and prime resets will continue to add to it for the foreseeable future. This will act like the blanket of ash that smothered the Village of Pompeii in 89 AD, snuffing out the prices of all lower quality housing beneath the high-end Jumbo-financed properties in desirable areas.
3) Where did all the money used to finance real estate investment originate? In the bubble markets which he acknowledges are now toast. The absence of bubble money for investment purposes is enough by itself to ensure the price crash in flyover country.
4) Got manufacturing jobs?
5) Got vacant homes? (19m+ or so)
Seeking Alpha
Why Shadow Inventory Won’t Derail a Housing Recovery 7 comments
by: Ryan Avent
August 04, 2009
Cslculated Risk links to a Reuters story noting that shadow housing inventory could derail a recovery in housing markets:
According to Zillow’s latest Homeowner Confidence Survey, 12 percent of homeowners said they would be “very likely” to put their home on the market in the next 12 months if they saw signs of a real estate market turnaround, 8 percent said “likely,” while 12 percent said “somewhat likely.”
He then adds more discussion, noting that this shadow inventory includes foreclosures in the pipeline and bank-owned properties not yet for sale in addition to homes that owners may soon place on the market when conditions improve.
I’m skeptical that this is going to destroy a recovery, however, for a couple of reasons. For one thing, this is flexible inventory. If a glut of sellers leads to a reversal of price increases, then many of these would-be sellers will rethink their decision and pull their homes off the market. For another thing, shadow inventory, and especially the foreclosure and bank-owned share of that inventory, is geographically concentrated in markets that continue to decline. Localized housing gluts in bubble markets like the southwest and Florida may continue to be a problem while tighter markets improve. Shadow inventory may not derail the national housing recovery, in other words, but merely delay recovery in some particularly weak markets.
…
I’m having some very cold Chardonnay, reminiscing about driving my lil’ red ‘55 Studebaker truck down to Baja to surf in the mid ’70’s…It’s a good thing I bought that Ford stock at $1.83…I smile to think I sold it at $5.23…at least I got some of that Delphi BK money back in a round about way!
The good old days of corporation failures…
“…When the war ended, Studebaker’s reputation for reliability led to increased sales, and the company prospered until the Great Depression. In 1933, in the depths of the depression, the company went into receivership. Normal practice at the time was to simply sell all of the company’s assets and pay off the creditors as best as possible. Studebaker however, was able to convince Congress that its real value was as a going concern, wherein workers would still have jobs and pay taxes. Bankruptcy law was revised by Congress to let the company put forth a plan of reorganization and repayment of its debts. The company recovered from the depression, and by the late 1930’s was in financial health again.”
You all know how this story ended…a little further on down the road…”
Financial Times
US prime borrowers fall behind on payments
By Nicole Bullock and Saskia Scholtes in New York
Published: August 4 2009 22:30 | Last updated: August 4 2009 22:30
The number of US prime borrowers behind on home loan payments has risen sharply, signalling further problems for banks and investors.
Standard & Poor’s said higher unemployment combined with a prolonged housing market slump had afflicted even the highest quality borrowers.
The dollar volume of prime mortgages in delinquency or default rose 13.8 per cent between March and June, according to a study of private-label prime, subprime and Alt-A home loans conducted by S&P. Borrowers of Alt-A loans have slightly better credit histories than subprime borrowers.
These three categories of mortgages, totalling $1,620bn, are not backed by government-sponsored enterprises Fannie Mae and Freddie Mac, but were originated by banks, packaged into securities sold to investors.
“Today’s prime borrower is far more at risk than the prime borrower of any other cycle,” said Michael Thompson, managing director of market, credit and risk strategies at S&P. “If unemployment continues to get worse, this is where you will have the greatest vulnerability and it may not yet be factored into the valuation of residential mortgage-backed securities.”
…
Washington Post
MORTGAGE MODIFICATIONS
2 banking giants criticized
BY KEVIN G. HALL
khall@mcclatchydc.com
WASHINGTON — The Obama administration on Tuesday offered the first of what will become monthly reports on mortgage modifications, including a name-and-shame approach that will allow the public to see which banks are and aren’t working to help keep struggling Americans in their homes.
The first report, covering more than 30 lenders, found a dismal performance to date from two banks — Bank of America and Wells Fargo — that have received large sums of taxpayers’ bailout money. The report is likely to produce more pressure on these two institutions because the rescue money spent on them was expected to encourage greater lending and more loan modifications.
In a conference call, Assistant Treasury Secretary Michael Barr said that servicers who collect monthly mortgage payments on behalf of banks and investors who hold pools of mortgages had modified 230,000 distressed mortgages since mid-February. The administration wants large mortgage servicers to modify 500,000 troubled home loans by Nov. 1.
“I think we’ve been disappointed . . . about their performance in helping people in a timely fashion with the respect they deserve under difficult circumstances,” Barr said.
…
Business Week
Real Estate
August 4, 2009, 10:42PM EST
Mortgage Modifications Can’t Catch Foreclosures
Lenders have modified more than 235,000 mortgages under an Obama Administration program, but the first half of 2009 saw 1.8 million foreclosures
By Elise Craig
BW Exclusives
With unemployment projected to continue rising, leaving more homeowners without jobs and unable to meet their mortgage payments, Congress can expect an earful from constituents about what it’s doing to stem the tide of foreclosures.
Against this backdrop, the Obama Administration on Aug. 4 unveiled an optimistic report on its signature foreclosure initiative: Mortgage companies have offered to adjust more than 406,500 loans under the Making Home Affordable program, and have actually modified more than 235,000. The Treasury Dept. lauded the program’s “rapid progress,” saying that it “puts the program on track to offer” modifications to 3 million to 4 million homeowners over the next few years, encouraging news for homeowners seeking to keep a roof over their heads.
That’s an impressive start for a months-old program, if not the dramatic success many would have liked, analysts said. “The numbers are really good,” says Jaret Seiberg, a policy analyst for Concept Capital’s Washington Research Group. “This is a classic instance where reality and perception collide in Washington and disappoint everyone.”
…
I note that the 235,000 Making Home Affordable loan modifications to date was surpassed by the number of estimated 371,000 jobs lost in the July ADP employment index. Given that this was the smallest monthly private job loss figure ADP reported since October, and that many of the recently unemployed are home owners, it looks like homes will need to get a lot more (retroactively) affordable or the jobs picture will need to get a lot better soon to avoid a foreclosure pileup going forward.
Economic Report
Aug 5, 2009, 8:53 a.m. EST
Private-sector sheds 371,000 jobs in July, ADP says
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — In another sign that the labor market remains weak even as the economic downturn is moderating, private-sector employment in the United States fell by an estimated 371,000 jobs in the July ADP employment index, the smallest decline since October.
The goods-producing sector lost 169,000 jobs, while the service sector lost 202,000, according to ADP.
“Despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months,” ADP said in a statement.
…
For all the “special” people in “The O.C.”…
You property value goes down…but…your “special” add-on taxes go up…Live from behind “The O.C.” curtain…it’s Mello-Roos!
http://cams.ocgov.com/Web_Publisher/Agenda08_04_2009_files/images/A09-001248.HTM
Who moved my stock market rally? Or is this just yet another opening bell head fake, to be smoothed over during the course of the trading day by the great liquidity pump? Too early to say…
market pulse
Aug 5, 2009, 9:37 a.m. EST
U.S. stocks start lower; ADP offers little cheer
By Kate Gibson
NEW YORK (MarketWatch) — U.S. stocks opened modestly lower on Wednesday, with investors retreating after four days of gains, after a private-sector report offered little cheer on unemployment.
…
P.S. The silver lining: The dollar will reverse its recent declines somewhat if this stock market selloff proves to have legs.
Mr. Bear, …you guys didn’t happen to take Ben over to the “alien” house in Rancho Santa Fe last night did you?