Bits Bucket For August 14, 2009
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Time to start the Cash for Kitsch program now?
* WALL STREET JOURNAL
* AUGUST 14, 2009
Retail Sales Fell in July Despite Clunkers Program
BY SARA MURRAY AND ERICA ALINI
U.S. consumers reined in spending in July, exposing a vulnerability in an economy that appears on the cusp of recovering from the worst recession in 70 years.
The Commerce Department said Thursday that retail sales fell 0.1% last month, surprising analysts, after making gains in May and June. The “cash for clunkers” program, which rewarded qualified owners of old cars with $3,500 to $4,500 in vouchers, boosted sales of autos and parts by 2.4%, but it wasn’t enough to prop up losses in other categories.
…
Look for a lot of pre-Christmas sales as stores
are expecting low sales, plus the stores are not
restocking at their normal levels.
Commie Grinch! Bernanke says there will be Christmas. You just have to believe!
My MIL says you are wrong. (She already put us on notice that we are going to have to live off memories of the really rich Christmases we enjoyed several years ago.)
LOL. I can just see it — all the photos dragged out from previous Xmas’s and strung around the room like holiday lights.
You ought to see all the unused junk crammed into my kids’ bedrooms from recent X-mas’s. It is no laughing matter…
Pre-Christmas sales are happening right now.
““cash for clunkers” program, which rewarded qualified owners of old cars with $3,500 to $4,500 in vouchers, boosted sales of autos and parts by 2.4%”
Just how did the vouchers boost auto parts sales? Maybe buying a kitchen sink did too!
the traded in clunkers are supposed to be parted out. not sure if that plays a role.
No, the engines are destroyed and the cars are
crushed. No parts taken off…
So much misinformation, so little time. As best I can figure out, the C4C law mandates the destruction of the clunker’s engine by running it with an anti-lubricant. After that, any or all of the hulk can be sold for parts. Radios, functioning catalytic converters, usable tires mounted on rims, etc. are valuable. After a certain time, what remains must be shredded.
Many states, CA among them, prohibit the sale of used but functional cat cons. Talk about a stupid law.
Anyone who knows government programs knows that the surest way to get a voucher a year from now is getting a clunker back on the road today.
It had to run to trade it in, gotta get ‘er run’n with new parts.
Great program!! Sure beats giving AIG $100B for nada.
Thrifty public is just not buying
‘Seismic shift’ may hinder turnaround
By Stephanie Rosenbloom and Jack Healy
NEW YORK TIMES NEWS SERVICE
2:00 a.m. August 14, 2009
There is just one problem with upbeat predictions that the recession is ending: Americans are still refusing to spend money.
Retail spending is still far below that of a year ago in virtually every category, as figures reported yesterday showed. Major clothing chains including Macy’s, Nordstrom, Liz Claiborne and Kohl’s posted earnings declines this week. Even Walmart Stores, the nation’s largest retailer and one of the hardiest survivors of this recession, reported lower sales yesterday.
Taken together, the reports made clear that consumers were likely to continue hoarding their dollars into the usually robust back-to-school shopping season, a crucial time for retailers.
…
“This is only a little piece of what is a huge seismic shift — a return to savings by American consumers and a shift away from spending,” said Allen Sinai, president of Decision Economics. “Without the consumer, the economy will not have any kind of a typical recovery and will grow very, very slowly for a long time.”
Professor Bear,
With all due respect, I beg to differ. The consumer is still spending ( they just stopped spending money they don’t have? )
Not my opinion — just a snippet from a NY Times article here…
I agree with you. I don’t see empty stores, but rather shorter lines with less stuff crammed into the carts. For example, I have shopped at Costco for over ten years now, and only recently have I been able to get through their checkout lines in under five minutes, thanks to shorter lines and emptier carts. But the store is never empty.
Yep. Here’s an interesting retail retrenchment chart, but I completely disagree with the summary statement:
Retail sales are way off their old trajectory, and despite a
recent bounce, remain near crisis lows.Retail sales are way off their old trajectory, and despite a recent fall, remain near bubble-level highs.
Fixed that for them.
Senior Lunches…ala sample carts @ lunchtime.
Ah yes, senior lunches. Don’t forget Costco lets you in with an expired membership card - or none at all. Just tell the guy “I’m going to the pharmacy”.
That’s my opinion as well: if they had it, they’d be out there spending it. But that’s entirely anecdotal. It’s based on me not seeing the financial attitudes of people around me change to match their financial reality yet. I think it’s a good question because it makes all the difference in what any eventual recovery will look like.
I wonder what data might give an indicator of whether people have experienced an actual psychology change? I think I’d want to look at something like disposable income vs. retail sales.
“if they had it, they’d be out there spending it.”
That’s what I am witnessing among our little circle too jfp. Well actually my little circle isn’t slowing down at all. I hear some discussion of people being worried but it doesn’t translate into any change in behavior.
I heard last year one friend was put on a budget by her husband. She’s been regularly running up the cards anyway and then he has to take money from other areas for her to bring it back to zero. So I’d say that isn’t working. Also I’ve been hearing trouble between couples as one spouse bristles at the new “controls” the other attempts to implement. It’s second hand info but the discussion was that these new controls were leading to ideas of divorce rather than agreement that frugality was the best thing for the family.
What they just don’t get is that it’s pretty tough to open up the wallet when you’re still in debt up to your eyeballs.
“What they just don’t get is that it’s pretty tough to open up the wallet when you’re still in debt up to your eyeballs.”
I’m certain you know this is the purpose of Cash for Clunkers and Dough for Dumps?
“What they just don’t get is that it’s pretty tough to open up the wallet when you’re still in debt up to your eyeballs.”
I’m certain you know this is the purpose of Cash for Clunkers and Dough for Dumps?
LOL - I guess because it’s hard to see it when it’s over your head than when it’s at eyeball level?
harder to see
“…one friend was put on a budget by her husband. She’s been regularly running up the cards anyway…”
That’s scary. I can’t imagine being married to a woman like that. In fact, I wouldn’t. Of course, I’m not rich so I probably wouldn’t attract that sort of person anyhow.
+1, Grizzly. Very Scary! And a non-starter.
I still have plenty of money and am not spending.
That is because I do not see a viable future to keep replenishing that supply. My line of work (Computer Programmer) was off-shored to the extent that it is no longer viable as a decent way to make a living.
I see the same thing in the semiconductor industry, in the 90’s the manufacturing went overseas, now in the past 5 years the shift of professional engineering jobs is well under way (production support, QA, design, etc..) I know people who have been looking for work for a year, well be the implosion of the economy.
be = before
I have to agree with DinOr’s assessment here. We as humans are not all that much more than the common Drosophila (fruit fly) when it comes to resource consumption. This insect will consume and multiply until all available resources are depleted - then experience a collapse that will be sustained until the resources have an opportunity build up - then the process repeats. We as a species have shown the exact same deficiency in self-regulation.
Weak retail numbers only confirms that expanded spending in recent history was due to credit expansion, and not any real increase in spending power from the consumer. The home ATM is dry, the cards are maxed, and wage growth has been flat to negative.
Until one of these changes - I don’t believe any sort of recovery in consumer spending is possible.
Just one person’s thoughts . . . . . . .
From one fruit fly to another, have you seen the discounts lately?! hehe
Thinking of changing my handle to :the common Drosophila
but afraid Oly will get a hold of me somehow and feed this fruit fly to her frogs.
helppppp meeeeeeeeee
“I’d like to share a revelation I’ve had during my time here. It came to me when I tried to classify your species. I realized that you’re not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with their surrounding environment, but you humans do not. You move to another area, and you multiply, and you multiply, until every natural resource is consumed. The only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You are a plague, and we are the cure.”
“I’d like to share a revelation I’ve had during my time here. It came to me when I tried to classify your species. I realized that you’re not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with their surrounding environment, but you humans do not. You move to another area, and you multiply, and you multiply, until every natural resource is consumed. The only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You are a plague, and we are the cure.”
That’s not true - humans have lived for thousands of years in the middle east with … no…… problems…….
never mind.
Every mammal on this planet instinctively develops a natural equilibrium with their surrounding environment
That’s just another circumlocution for Death, Mother Nature’s way of telling us to slow down.
Thinking of changing my handle to :the common Drosophila
but afraid Oly will get a hold of me somehow and feed this fruit fly to her frogs.
Heavens, no! Yer too valuable. Besides, fruit flies are great. In fact, one of my favorite power-chants used to be a bellow of ‘Drosophilia melanogaster!’
‘Course, that was only when I was drunk, and it didn’t mean anything. I just liked the sound of the words. Nowadays my power-chants are all more sensible, such as ‘Eat! Eat! Eat!’
That chant goes with any situation, I find.
“Every mammal on this planet instinctively develops a natural equilibrium with their surrounding environment, but you humans do not.”
It’s a great quote, and a fun movie; if only it were true…
In reality, every mammal tries its best to reproduce and exceed the carrying-capacity of its environment, then experiences a population crash, and then starts it all over again (usually because its primary predator saw a population crash after the population crash of its food-source). And then round and round it goes.
This is simply the nature of Nature.
I’m amazed at the level of agreement on this one. Honestly though, I’m also disturbed that we as a “highly evolved” species have yet to learn how to overcome instinctive behaviors that are no longer beneficial to our long-term survival . . oh well . . .
Thanks for the conversation all. I’ve enjoyed it.
I’ve mentioned this idea before, but I think that there are more than a few of us who are moving into that time of life that is characterized by:
1. Being content with what we already have.
2. Replacing things that wear out, and that’s about it.
3. Not feeling driven to acquire more stuff. If anything, we’re downsizing our stuff inventory.
This doesn’t bode well for a consumption-based economy, but the U.S. economy wasn’t always this way. IIRC, the consumer spending portion of our economy used to be around 50-60%, rather than the two-thirds that it is now.
[quote]
1. Being content with what we already have.
2. Replacing things that wear out, and that’s about it.
3. Not feeling driven to acquire more stuff. If anything, we’re downsizing our stuff inventory. [/quote]
Arizona Slim,
your post makes so much sense it hurts some.
those 3 things used to be what this country was best at when everyone pulled together and worked toward a common goal.
It used to be called living your life and enjoying it - being around your family.
Now it seems that we are more interested in buying stuff (houses, cars) to show off to each other and getting our kids into a good school to become a lawyer or Wall Street financier who makes their money figuring out how to legally keep rich people from paying tax on their money all the while skimming off their 1% from the top.
The problem is that we need the people to start businesses in order to have jobs for these folks. Where are those people coming from ?
I have a couple of annecdotes/regional observations. Two weeks ago, I was shopping at the Rim, a nice shopping area in NW San Antonio, TX. Target, Ross, World Market, Justice and TJ Maxx were packed. Long lines at check out. Many, many Spanish speaking customers. Ross and TJ Maxx in particular were really crowded and trashed, merchandise laying all over the place. What recession? I asked two different cashiers and both said it’d been crazy busy. Saturday, my family and I were driving through an area of Houston, TX, for the first time. We saw a sign for a restaurant that we wanted to try for lunch (Todai, Japanese sushi buffet, they have ‘em in SoCal and we’ve enjoyed them in the past). It was located in a very new-looking contempary mall/entertainment complex next to the Ikea store, right along the freeway. This shopping center looked hip with a movie theater, Dave & Buster’s, Improv, a night club, Pump It up, indoor mini golf and lots of cute places to eat. All is business signs were on the outside wall of the place facing the freeway. When we walked through the center, nearly every business was gone or closed! Empty store fronts. Pump it up and the putt putt golf place had equipment inside but were closed. It was a Saturday afternoon. Dave & Buster’s, a Mexican restuarant and the theater appeared to be the only businesses still open. It was really strange. The place looked brand new. There was no one walking around at all. One store or restaurant had a sign claiming renovations but you don’t ask tennants to move out while while you remodel… Then yesterday, I went to Long Beach (Cali) Towne Center off the 605 at Carson. This is a huge center with a Wal Mart, Sam’s club, Lowe’s, Ross, etc and tons of restaurants. My elderly dad lives close by and I have been coming to this center about every five months or so for several years. Yesterday it was dead. Very little traffic (except for the In N Out) and many of the smaller shops had vacant store fronts. Like they up and left. This was a marked difference from last time I was here mere months ago.
Two weeks ago
Was that Pay Day?
That is when I see more folks, families (and basically not wealthy)& people shopping.
It’s different in Texas.
San Antonio does get a lot of shoppers from Mexico taking advantage of the lower prices.
The retail places in our area seem to be very busy. This, after a definite down-slide in the fall/winter of last year.
We had a number of retail/commercial spaces go vacant, but they seem to be filling back up in the past couple of months.
Not sure what to make of everything just yet.
Regarding C4C, I had a thought on my drive in this morning:
If the givernment really wanted to go green and save the planet, why didn’t they allow the option of turning in a clunker for $4500 in public transportation vouchers?
I know that in my case riding the train takes twice as long and is about twice as expensive as driving, but I think I’d probably go for the deal above. It would give me about 15 months of subsidized commute and take my clunker off the road.
Because that would be giving money to local organizations, not auto workers unions. Not as many votes for the buck in that case.
Maybe, but probably more like the majority of the US doesn’t have public transportation that is reliable and frequent enough to get us all to take a voucher.
I can’t see taking that voucher to stand in the 110 degree sun every day to wait for a bus to appear and take 2 hours to go down valley. Nosiree. I believe in recycling etc, but it would take most americans over 3- 5 hrs to do a round trip commute on the US’s really bad public transportation options.
Now if it meant there would be a High Speed train from LA- NYC, or Chicago, or San Francisco or Boston from the coast…interesting idea.
I’m with you on all those points. The thing is, I would say that there are far more people that could and would take advantage of this type of subsidy than those who are willing to take on more debt to by a new car at this point.
Unless they really aren’t looking to save the planet…
…or they just aren’t bright enough to think of this option?
Holy smokes. I can’t believe I’m this far up in the queue!
OK. umm. Oly, I am relieved and happy to see you back, and very sorry about the circumstances leading to your blessedly temporary absence. I did not send the rotten emails and am gratified that you have more or less tamed Sasquatch into a role as your protector.
Here’s my news contribution: I think this is the first time that the MSM has published the term “heist” in connection with a bank’s wrongdoing.
From Bloomberg, vis a vis BOA’s lawsuit seeking to prevent Colonial Bank from ‘disappearing’ assets for which BOA is a custodian:
“To the extent that the interests of the public are implicated in this case, they weigh in favor of requiring Colonial to honor its contractual obligations and avoiding what would amount to a $1 billion heist,” the judge said in an order posted online today.
I like the judge’s righteous anger. Perhaps we have found our one honest man in the entire legislative-executive-judicial complex.
Peace, and have a great day.
jane,
And I like ‘your’ anger. “Heist” is appropriately applied here. My question is why was there such a delay between the issuance of their C & D, the FDIC Stormtroopers and the public announcement?
Credit-card companies can cancel accounts without customer knowledge I’d hate to be traveling when that happened.
interesting article.. As expected, the author fails to dig deep and find out why the cards were canceled..
cancellation without warning.. well, i guess if people know ahead of time it’ll be canceled, they might do something dumb and expensive, like max it out.
It reminds me of a narc i once knew.. he told me he and his team would sneak up to the house they had a warrant to search or make an arrest, silently mouth the words “Police! Open up!” and pretend to bang on the door with their fists for the sake of any video cameras that might be on them. And then bust it down.
Of course, although it’s a legal requirement, cops don’t want to warn the occupants they are gonna bust in the door.. because within seconds, drugs go down the toilet.. guns come out from under the sofa, etc..
You never warn a guy when you are about to kick him in the groin. The reasons are fairly obvious.
Rules?? In a knife fight??
No need to these days. No-knock warrants are readily available and on the increase today. Number of people killed by police accidentally serving no-knock warrants at the wrong address also on the increase.
Were going to a cash economy anyway, so let them cancel the cards its one less monthly bill i never have to pay again.
Let em sue and the judge will dismiss
Were going to a cash economy anyway
Rats, I was so hoping for an all-barter economy.
I know you’re joking, but bartering has always been a big part of the economy for me. I’ll fix a DVD player or a computer for free, and then when I need help rebuilding a retaining wall the guy I fixed it for shows up to help. Cash is nice, but the challenge of getting things done without it is enjoyable.
An interesting thing I learned about bartering is that you’re supposed to figure out some cash value for the service and report it as income. I wish the IRS the greatest of luck with that.
And the IRS should be willing to accept your services to repair 28% of a DVD player as part of your tax liabilities.
Or 28% repair a DVD player - i.e. unscrew, take out shell and leave it at that.
“Were going to a cash economy anyway”
“Rats, I was so hoping for an all-barter economy.”
You guys sound so…Amish.
In southwest Virginina there was a barter theater. The Barter Theatre was founded by actor Robert Porterfield in 1933 in the tiny southwestern town of Abingdon; its original charge for admission was produce, handicrafts, or whatever the prospective viewer could afford. Theater still around. My guess is that you probably use money now. Theater is stage productions not movies.
Their risk model must be looking at folks who don’t pay-off their debt each month. You’d think the card company’s cash flow comes from those folks who always carry a balance? They don’t make anything off our family because we pay in full every weekend using their online account access.
tresho, thanks for the post. It is definitely info that needs to be spread around and a very good reason to carry more than one card. At least CU’s should be a good bet.
“Credit-card companies can cancel accounts without customer knowledge ”
I think the risk here is the total debt to income and possibly how safe is their job. CC companies sure don’t want to have high open lines of credit to people who may lose a job or house who could max out line of credit before then filing for BK.
Good theories all! ( Or they just might be cr@pping their pants? )
NYCityBoy brings up a good point though. Unless of course it’s a REIC’sta, then you ‘tell’ them you’re going to punch them in the face and then when they go to cover up you go for the groin!
Seriously, these guys are pulling out all the stops. What percentage of loan modification app’s do you people want to bet are being submitted by realtwhores, MB’s and nickel/dime builders? Who’s kickin’ WHO here?
Hey, I see plenty of used car and used house salespeople NOT making any sales. Lots of retail businesses and services are beginning to freeze up as pocket books slam shut.
From the no work, EZ money sales rackets and slimeball deals during the haydays of the past 5-7 years, it’s a really kick in the groin when you always figured that the customer or more aptly, your business MARK, owes you a good living.
Welcome to the New Austerity America…these changes in lifestyles are just beginning and we haven’t seen anything yet !
Amex just upped my late fees and interest rate. Never a late (on any card), never a balance month to month (on any card). Oh well. Not like it really has any effect on me.
Got a letter stating they were going to do the same on my Blue Amex. I believe it’s a global thing for Amex. I use Blue for small purchases like gas mainly. I use my other cards for larger purchases. Oh yeah, I pretty much pay it off every month.
Citi increased my balance 6months ago by almost 100%. Lately, they’ve been sending me checks to use for balance transfers or for larger purchases. I’ve been ripping them.
I got that notice too. The funny thing is thing is that I hadn’t used the card at all for months, maybe as long as a year. I really want to convert it to the USAA amex card, but I think it is just a bad idea to have all three of my cards with one bank. Sigh.
Of course, I do have one other card, but it is for work only and using for personal expenses (even if I pay it off before the bill arrives) can result in loss of job, fines and possibly prison. No thanks.
Yep, got the notice in the mail yesterday on my Amex. Doesn’t bother me a bit. I’m a freeloader. Now if they stop doing the % back and 30 billing cycle, then good-bye!
Let me serve as a cautionary tale :
If you’re gonna lowball, make sure you lowball so hard, you’re SURE they’ll never take it.
Apparently 30% off original asking isn’t low enough when estate taxes are starting to come due.
Ah well. We can afford it, can put between 20-50% down and really like the house, the area, and schools. (I love the lot, which is 2-3 times the typical bay area peninsula size.) It even has a view of the bay if you squint hard enough. After having our car broken into twice and several neighbors having their HOUSES broken into, we can’t wait to get out of our current neighborhood.
Did we catch a knife?
Certainly. But we took steps to minimize bleeding.
Well, if you have a house you want that you plan to stay in, worse things could happen.
If you look at a house as something that will cost you money, rather than something that will make you money, worst case it could have cost you less — unless you have to sell underwater. My view is if you don’t plan for this to be home indefinately, you shouldn’t buy anyway.
“After having our car broken into twice and several neighbors having their HOUSES broken into”
This is the really tricky part of buying… I can say that Pinellas County is an entirely different beast at night, and there are several neighborhoods by day that are beautiful, and by night become COPS soundstages.
The other problem, too, is that neighborhood fabrics are changing very quickly these days. This is my biggest concern about buying, not that I have to replace a few pipes the seller hid, but that I’ll end up in an area that is marginally safe.
Bubs will probably know where this is, but I lived in a nice lakefront community in Seminole (which is supposedly nice) and it was a total nightmare because everybody was nuts. My beater car still has a dent and a through and through hole on the taillight (either .22 or pellet gun) from my neighbor who shot up the block after his mom’s boyfriend was arrested for attempted murder (which happened in the parking lot). I also had a resident alligator in my backyard that regularly sunned about four feet from my backdoor. This would have been ideal for a few college dudes looking to great crunk every night, but not a place for a pregnant wife.
I have safely lived in very sketchy places in the past, but I owe it to my babies now to be more diligent.
With appropriate training, maybe the alligator could increase the safety of your nest.
Good idea, Al. Muggy, you could get two gators of the same size and strap them to your feet with a good tight set of buckles and a set of reins and then go around the nabe in them. You’re a big guy, right? So I suggest some 7 footers to start with, see how it works out.
Now, it won’t be a fast stroll—unless of course your shoes spy a delicious-looking poodle–but it’ll be a majestic stroll, I think we can all agree.
vegan-approved alligator skin shoes (as long as you don’t coerce them in any direction)
IIII’m not a Vegan! Jeeze, man, you can like trees and fondle them and murmur endearments and wear moss and laurel leaves in your hair and everything, and then run on out and briskly eat someone who’s all made of meat.
I do it alllll the time.
If we weren’t meant to eat meat, bacon wouldn’t exist.
and by night become COPS soundstages
Hah, if anyone would know that it’d be you
I have safely lived in very sketchy places in the past, but I owe it to my babies now to be more diligent.
Yeah, it’s funny how that works. I’ve experienced the same thing. (Without a Gator Variable.)
Pretty soon you have to worry about the quality of the educational options, too — if that outlook is poor, you really don’t want to be stuck with a home instead of renting.
I wouldn’t buy in a city without a very clear idea of where my child can go to school; any place “good” (whether public or private) can be to get into. I’ve seen plenty of otherwise sane, reasonable, laid-back parents flip out — including my own sister — when their child gets to be four and they have to navigate through the local school system.
Muggy thank you for that post. I was thinking about moving back, and immediately wondered about the social change that has occurred in the last 3-4 years. I got lucky, and moved down (2004) when things were “relatively” peaceful. Also, I deliberately moved into a nice middle-class condo complex where it was 75% over 55.
After I left, two years ago almost, all hell broke lose. Burglaries, etc. Honestly, unless you are wealthy, where would you go (move back), that you KNEW wouldn’t have a meth head or child molestor living next door to you in Florida. It seems like (no knock on you living there Muggy, I am jealous) that a person could not move back there without playing russian roulette. Look at your “Nice Lake Front Seminole Community” for a perfect example of what you know and I also thought. Good Post!
Ate, that’s exactly what I was thinking. FL has expensive safe areas, but few middle class hoods that are guaranteed to stay non-rental crime-free zones (no offense to renters -floridians know what I mean). I will retire to FL ( for family reasons), but, right now, I have no idea where.
I’ve never been to FL but from what I’ve read on this blog it sounds like an absolute disaster. From rampant crime, low wages, high unemployment, and massive over development, to hurricanes, oppressive humidity, large bugs, and alligators. It seems the only place decent would be right on the ocean, but then the property taxes and insurance would eat you alive. No thanks.
OT: Hey, Muggy, I responded to your question about creative output the other day, but not sure you saw it.
Yah, we’re definitely into the cops soundstage again.
Our current neighborhood is inbetween two ghettos and acts as a buffer for Atherton and redwoodcity/east menlo park.
It was great when we moved in, but we knew it was on the edge of sketchy.
Since the downturn and unemployment hit, it’s moved towards more sketchy.
I have, however, chased people out of the neighborhood by following them and calling the sheriff on them, and things have calmed down a little since then.
My neighborhood borders on Inglewood, CA - which is the doorway to South Central L.A. slummery. By coincidence, the cops in my area are prolific profilers.
Driving while brown is indeed a crime in Culver City.
Well, if you have a house you want that you plan to stay in, and can afford to make payments that you agree to, worse things could happen. There, I fixed it for you. Because durint the bubble, there are plenty of owner/occupiers who DID want to continue to live in the houses, but never had any meaningful chance of paying the mortgage according to the terms that they’d agreed to unless the appreciation fairy allowed them to REFI for a greater principal amount within two years.
We can easily afford the house and payments currently, and we’ll have a 1 year cash buffer in addition to other money, so we’re feeling pretty okay.
Sfbb, if you paid 30% off an already reduced 2005 bubble value, how could you go wrong? I’m assuming the asking was at least 20% less than ‘05 prices.
I’m convinced it can and will go lower. I’m not thrilled to be buying this early, but I love everything else about the place.
Their original asking was too high, so I think we’re more like 40% off of peak. I expect to lose 10-15% before we’re really ‘bottomed.’
But we’re out of the hood, the nesting instincts of the wife are soothed, and we’re in at a price that I can sleep with at night.
I agree. I am renting in CA after selling my estate 2 months ago in another state. Hoping to see another >15% drop when the banks finally decide to list all their inventory and a fight for the exits prevails.
No jobs, no incomes, no consumers, no problem.
sfbubble,
If you don’t mind me asking, where did you buy?
This is where we plan to stay unless we wind up leaving the bay area for some reason or another.
I jumped over to a layoff site and saw this and wondered if it would affect prices in your area:
http://www.webguild.org/2009/08/sun-autopsy-early-signs-point-to-massive-layoffs.php
“While Oracle waits for antitrust regulators to complete their scrutiny of the $7.4 billion purchase of Sun Microsystems, a source said major layoffs are to be expected.
The source said “Make no mistake. There will be blood on 101 (meaning Highway 101) from Marsh Road to Redwood City.”
It is predicted that up to 10,000 people could be laid off but it was not clear if they all will be in the bay area nor the time frame over which the layoffs would occur. The source expects one large major announcement and the remainder to happen in small batches.”
I suppose if you had second thoughts you could get out of it on the inspection. Also my lawyer told us there’s a certain point in the process (days after the offer is accepted) that they can get you out of it.
I’m not remarking on any possible knife-catching. Everyone has to decide for themselves what’s best. It sounds like you’d be happy to live there so congrats if you feel this is “the one”. We’ve been pretty darn close ourselves.
Yah, the layoffs could affect the area. We’re both in stable companies, and my company is actually hiring (albeit slowly), so we’re as comfortable as possible with our prospects as can be in this climate.
I’m positive we got in too early to catch the bottom, and if there’s one thing wrong on the inspections we’ll be out of there so fast we’ll leave little smoke-shaped outlines of ourselves.
But the house, and more importantly the lot, are pretty close to exactly what we want.
“we’ll be out of there so fast we’ll leave little smoke-shaped outlines of ourselves”
Loved the imagery.
I’m a pushover for a great lot too. You can change a lot about the building. Except for landscaping, the lot is what it is.
That’s my attitude, too. Fancy houses on crappy lots don’t do much for me.
Ditto what Carrie Ann said.
I’m a bit conflicted here, sfbubble. On the one hand I love it when good things happen to good people*, but on the other hand, if you become a knife catcher, er, I mean a ‘homeowner’ then it is very likely you won’t post anymore**. You’ll have lost the fire, and more importantly, you’ll be using all your spare moments to mow the lawn and curse at the plumbing.
So you can see my quandary.
*I don’t know if you actually are good. I’m going to assume so, however, since I like yer.
**And I would be sad! Lookit Marcus, and Leigh, and B. Durbin. They all bought houses and NOW THEY DON’T POST ANYMORE. That’s sad! I have a mortgage too, but that doesn’t stop ME. I still have spare moments to obsessively pore over Bens Blog. Maybe because my lawn is made of moss and because I tell myself it’s okay when water squirts out of the walls. In fact, that’s good, because the squirting water helps quench the flames of shorted-out antique electrical wiring.
“I tell myself it’s okay when water squirts out of the walls. In fact, that’s good, because the squirting water helps quench the flames of shorted-out antique electrical wiring”.
That’s our Oly!
Well, Oly, maybe I’ll post about the insane asking prices in the neighborhood.
Or how the neighbors all hate us for driving such a low comp into the area. (Our Realtor already made jokes about it.)
I might even post about how our dogs love having 4 times the yard space as before, INCLUDING a little hill to run up and down.
“Did we catch a knife?”
If you can afford to buy, your family’s health and happiness is certainly more important than money.
The fact that we’re not leveraging to the hilt to ‘buy the most house’ makes me glad, and this will be a great neighborhood to raise our current kid and our planned next kid.
That being said, everybody else should wait until 2012! DON’T DO IT! IT’S CRAZY!
Sfbubblebuyer,
You say you like the house, the lot, the area, and the schools, and most importantly, you’re moving your family to a safer area and you can afford it. So I say congratulations!
I hope to hear a lot of similar happy stories over the next few years on this board when houses finally become affordable again.
(Still way too early in my area, though.)
“…when houses finally become affordable again.”
They don’t really need to be affordable, if you are lucky enough to have a large pot of wealth to draw on. My wife has done an informal poll, and most of the families she knows in the area who bought over the past five years were in this group (sadly, we are not
).
Yes. Having 20-50% down makes it a much more manageable experience.
We had that pot of wealth in 2007 and didn’t buy, and I feel lucky, because we were able to add a little to it in the meantime.
Minimize your downpayment. We are in for the second leg down and it might be a crusher.
God help you.
If it were me, I’d sell the first time the house was broken in to. People that kick down occupied homes’ doors is a different type of criminal than one that breaks into cars.
If you can’t feel safe in your own home, your stress will go through the roof.
We were renting in the neighborhood that’s going downhill. And I agree, break-ins are a MUCH different thing than a car smash-n-grab.
Unfortunately, those types of break-ins happen in good areas too. Sad to say, I’ll have a security system, no matter where I live.
We’ll have one as well. But in good neighborhoods it’s usually a little more sporadic. Not 3 break ins, 5+ car robberies in 2 months in a 3ish block radius.
Our place was broken into twice. Both times through the same window. After the second time, I had a security alarm installed.
I told you to be careful sfbubblebuyer, LOL!
My own experience has shown that the bank (assuming REO) will continue to mess with you all the way through closing. Please remember that you are in all likelyhood the ONLY qualified buyer who has made an offer. Don’t give them even a millimeter.
It isn’t a bank, it’s an estate, and they kinda ran out of time before having to pay taxes/etc. So we’re not giving them an inch aside from agreeing to a slightly fast close. (27 days instead of 30 days.)
Congratulations, sfbubblebuyer!
It’s always nice to hear when one of our own is able to find a nice house at an affordable price. Yes, prices may still fall, but if you’re in a good place financially, you can close your eyes and ignore it.
Wish we could find the same. It seems “safe” middle-class neighborhoods are becoming a thing of the past in California. Neighborhoods are either barrios, or formerly nice middle-class neighborhoods that now command a huge premium over the lesser neighborhoods.
Probate is even better than REO. All they hear is, “show me the money!”
Toxic Loans Topping 5% May Push 150 Banks to Point of No Return.
Aug. 14 (Bloomberg) — More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.
The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.
The biggest banks with nonperforming loans of at least 5 percent include Wisconsin’s Marshall & Ilsley Corp. and Georgia’s Synovus Financial Corp., according to Bloomberg data. Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigan’s Flagstar Bancorp. All said in second- quarter filings they’re “well-capitalized” by regulatory standards, which means they’re considered financially sound.
“At a 3 percent level, I’d be concerned that there’s some underlying issue, and if they’re at 5 percent, chances are regulators have them classified as being in unsafe and unsound condition,” said Walter Mix, former commissioner of the California Department of Financial Institutions, and now a managing director of consulting firm LECG in Los Angeles. He wasn’t commenting on any specific banks.
Missed payments by consumers, builders and small businesses pushed 72 lenders into failure this year, the most since 1992. More collapses may lie ahead as the recession causes increased defaults and swells the confidential U.S. list of “problem banks,” which stood at 305 in the first quarter.
Banking On The Financial System? Not So Fast!
-Aug. 14 (Bloomberg) — More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.-
And Bloomberg appears to have recognized the key problem with these banks (all of which should have been shut over a year ago):
Excluding the stress-test list, banks with nonperformers above 5 percent had combined deposits of $193 billion, according to Bloomberg data. That’s almost 15 times the size of the FDIC’s deposit insurance fund at the end of the first quarter.
Yeah, that’s a problem.
But the real problem is regulatory malfeasance. See, the purpose of the Tier Capital Ratio is to permit the government (FDIC) to come in via the OTS or OCC before the regulatory capital cushion is entirely depleted, and if the law is actually followed and people actually do their jobs, there is no loss to the depository insurance fund.
That is, so long as a bank’s assets can be sold (in total) for more than its liabilities (deposits) there is no loss. The bank may go bust from a standpoint of being a “going concern” but there is no hit to the taxpayer, no hit to the depository fund and no problem (other than for the shareholders of the bank involved.)
But when you allow banks to lie for two years for the explicit purpose of “trying to earn their way through the cycle” you hitch your argument to the view that the real issue is one of consumer confidence, not excessive debt and loose lending.
Only a fool would have argued that given what we know of the lending environment from 2003-2007, yet that is exactly the argument that Bernanke, Paulson, Geithner, Blair and others have made through this entire mess!
President Obama should have closed all banks for a week when he first came into office, sent in the examiners, and allowed those with non-performing loan bases of 2% or less to re-open. He should have set forth a 2% non-accrual standard and stuck by it - hit that, you’re closed. Period.
But that would have run dimensionally contrary to the viewpoint that we must “enhance lending” to get out of this recession - a foolhardy perspective when the reason you’re in recession in the first place is that too many people made too many loans to too many people who had no money to pay them back!
Now we’re stuck - we appear to have “avoided” a Depression, but we have in fact done no such thing. We have instead played “extend and pretend” writ large on the taxpayer’s back, and yet the default rate continues to explode higher because we have refused to force these institutions to disgorge their bad assets.
In reality the root of this problem lies with lax (or absent) regulation over the last ten years in the banking sector, where “fog a mirror” loans were available for virtually any purpose.
As a consequence of our government’s refusal to face this problem head-on in 2007 and 2008 (despite many calling for it, myself included) we are nowhere near the end of this crisis, despite rallies in the stock market. Indeed, I remain convinced that recognition of reality will come fast and hard in the next year or so as these “not too big to fail” firms blow up one by one, forcing regulators to come in and close them, and finally, asset valuations are forced down to a realm that comports with reality.
(From K. Denninger)
Well said.
cobaltblue,
Hey! That’s MY soapbox you’re standing on damn it!
Yeah, it’s happening even at the local level. Our start-up bank had a FAML Program ( Fog A Mirror Loan ) and hadn’t collected payments from one builder for almost a year. None of this was reported to shareholders. When FDIC stormed the bank ( it was almost a relief )
I feel like the Fed and big banks and FIRE people are taking us down with them. Pretty much summarizing things.
New people in government are too stupid to realize this.
Once again, we’re getting burned by FIRE.
Ever hungry like a flame,
I consume myself and glow.
Light grows all that I conceive,
Ashes everything I leave-
FIRE I am assuredly.
(sorry Friedrich)
U.S. Homeowners Cut Asking Prices $27.8 Billion, Led by Nevada.
Aug. 14 (Bloomberg) — U.S. homeowners cut their asking prices by $27.8 billion with some of the biggest reductions in Nevada and Florida, states hardest hit by the property slump, Trulia Inc. said.
Owners slashed prices by 15 percent in Nevada and by 13 percent in Florida and Arizona in the year through Aug. 1, the San Francisco-based real estate data provider said today. A quarter of home sellers lowered prices at least once, by an average of 10 percent.
“Sellers are resetting their expectations in line with falling prices,” Peter Flint, Trulia’s chief executive officer, said in an interview. “We’re still clearly in a downturn even though we’re coming out of it.”
The median U.S. price of an existing single-family house dropped a record 15.6 percent to $174,100 in the second quarter, according to the National Association of Realtors, whose figures date to 1979. Sales increased 11 percent for new homes and 3.6 percent for existing homes, Commerce Department and Realtors data show, as buyers took advantage of discounts.
Idaho had the second-biggest average reduction at 14 percent, while prices were trimmed 13 percent in Hawaii.
The combined value of reductions was $27.1 billion in the year through July 1, Trulia said in its previous monthly report.
Sellers of higher-priced properties in states that haven’t been hard-hit during the housing recession may be “catching up with the rest of the country,” Flint said.
Discount Centers
Connecticut, Massachusetts, Rhode Island and Illinois had the highest share of homes with price reductions at 33 percent, followed by six states at 29 percent: Oregon, Washington, New Jersey, Minnesota, New Hampshire and Maryland.
Jacksonville, Florida, had the highest rate of reductions among cities tracked as 38 percent of listings there had been cut. Portland, Oregon, followed at 35 percent. Milwaukee, Minneapolis, Boston and Seattle each had 34 percent and Albuquerque, New Mexico, and Chicago had 33 percent.
Why is New York not on this list. **sigh**
Because these numbers are bull$hit. Go get a free copy of Metro or AM New York lately. They have had articles that clearly state Manhattan has fallen 25% in one year. Sigh!
What terrible news. Gotta keep that away from the lemmings. Was downtown riding bikes with kiddies in Manhattan today, taking advantage of free bike offer (bikearounddowntown.com) and was amazed, to put it nicely, about all the crap that was going up around Ground Zero. Naturally, it ate up most of the bike path below Chambers St. But what was nuts was the glass residential towers erupting on the edges of Battery Park City. Who’s paying for these soon-to-be-vacant 5,000-a-month flats? Fallout from the overheated printing presses … scary.
And btw, thanks for correx on Queens Museum NYC Panorama … it only seems like a football field in there. More like a baseball infield, I suppose!
Well, yes, Manhattan had fallen, but from what “make believe” levels? A 25% fall from a pie in the sky fantasy price is no bargain…
seriously i find people don’t really move much once they get to nyc.
I remember moving 5 times in 8 years when i lived in Charleston SC
idiot moron jerk LL, one sold the house , LL wanted apartment back for college son ….
Longest it took me to find a better deal…5 days
there’s hope - Maryland and NJ are on the list with a 29% cut in asking prices.
And so the dominoes fall.
“Connecticut, Massachusetts, Rhode Island and Illinois had the highest share of homes with price reductions at 33 percent, followed by six states at 29 percent: Oregon, Washington, New Jersey, Minnesota, New Hampshire and Maryland.”
NOT a 29% drop in asking prices. Just 29% of the places for sale had reduced their prices by some amount. Really means that 71% of places for sale in Maryland haven’t reduced prices and since prices haven’t come down much so far, that is wrong. I bet the overwhelming majority of the places that have reduced some are condos. Capitulation in MD is still far away.
If you don’t believe me, ask Pondering the Mess.
Why would I doubt you?
Oh, that was more rhetorical flourish to bring Pondering out of the woodwork and give one of his (?) patented rants. I admire the vitriol, especially when we talk about capitulation and Maryland.
No offense intended….
“We’re still clearly in a downturn even though we’re coming out of it.”
Things are getting worse while they’re getting better.
My wang fell off but the Viagra feels like it’s kicking in.
I was against the war before I was for it. (or some such thing)
I laugh at sheeple that still don’t understand that statement. Maybe they voted for X, X failed, they changed X and voted again, and again…..that’s how it is done. dooooooouh!
Chuck grassley voted For ‘deathbed panels’ 2003
2009, now against what he voted for.
My wang fell off but the Viagra feels like it’s kicking in.
LOL. You just made my day with that comment.
The jobless rate continues to increase, which is a good thing in a jobless recovery.
My parachute won’t open but the ground is still pretty far away.
good news, bad news.
We’re lost.
We’re making great time.
“We’re still clearly in a downturn even though we’re coming out of it.”
For how many years now has that elusive bottom remained one year out?
They can cut asking prices until they are blue in the face. Until they can match prices of the avalanche of foreclosures they are just ‘wishing lower’. I am in central FL on the front lines and you guys are going to just love what is coming next.
I am still keeping the faith that Fannie Mae and Freddie Mac may finally achieve their affordable housing mission. Too bad that like Moses delivering the people into the Promised Land, the companies did not survive to see their mission accomplished.
Sorry, atheists are not allowed to use religious analogies.
What makes you think I am an atheist? (I have never professed to be one, unless doubting that “real estate always goes up” qualifies me…)
*gasp* Athiests!!!!!!
what’s wrong with goddam atheists?
I’m an atheist, and some of my best quotes come from Rabbi Jesus.
I”’m an atheist, and some of my best quotes come from Rabbi Jesus.”
BINGO. It’s best not to make direct quotes though unless is involves delivering a backhand to someone who attempts to distort his words. It is the thinking behind the quotes that is so useful.
I sometimes wonder if Jesus was an atheist. His ‘good news’ is that all is forgiven, and heaven is here on earth, if we love one another. He never seemed to miss a chance to poo-poo the orthodox rules and tell everyone to just chill and be nice. His followers misunderstood his message (don’t they always) and translated it into something more intelligible to themselves and more profitable for the franchise. Irony is the universal constant.
alpha, not sure if I agree 100% on that atheist angle, but I’ve long thought that Jesus’ message was almost completely misunderstood.
And I’m pretty sure that if he were to come back like the devout Christians believe he will, he would be _PISSED_ at the things done in his name…
That would be rather fun to see, actually.
I sometimes wonder if Jesus was an atheist. His ‘good news’ is that all is forgiven, and heaven is here on earth, if we love one another. He never seemed to miss a chance to poo-poo the orthodox rules and tell everyone to just chill and be nice. His followers misunderstood his message (don’t they always) and translated it into something more intelligible to themselves and more profitable for the franchise. Irony is the universal constant.
You’re right about most of that. He was quite anti-religious as you say. Though I wouldn’t say “atheist” - he did state that all roads to heaven lead through his Dad. His message has been, and continues to be, twisted to no end, sometimes as misunderstanding but very often for profit (or both).
“Heaven on earth.”
Bingo. That was the key thing that I could grasp at age 7. When my sisters told me I should want to die, I was terrified. I liked this place at age 7. I liked it since and I like it now at age 50.
The religious types ever since gave me the creeps.
When my sisters told me I should want to die, I was terrified. I’m still amazed by all the people who believe that, just because they can use the words for “death” and “dying,” that they know something about it. I’ve never met anyone who had first hand knowledge of it. I mean, knowledge of really dying, not this namby-pamby stuff of having your heart stop & then start again later.
I think Jesus was ‘atheistic’ in the sense that I don’t think he envisioned god as some dude sitting on a cloud, watching and judging. I think he saw god as being within all of us–more immanent than imminent. That’s why we weren’t to judge or punish one another. He was clearly too metaphysical for his time.
This article makes me wonder about the spread between average asking prices and average selling prices, and whether that spread is increasing or decreasing.
Well, SFBubbleBuyer went under contract after he offered 30% off seller’s current asking price. That’s quite a spread!
That’s 30% off original asking, we’re only a little over 10% of the current asking.
It’s still a pretty decent spread.
“We’re still clearly in a downturn even though we’re coming out of it
Well, which is it? Are you coming out of it or are you in it?
The story of america, wanting to have it both ways…
Hey Step, how was the Steak and Shrimp?
Yahoo finance.
This November, the $8,000 first-time homebuyer tax credit expires. If I were a betting man (which I’m not), I’d wager if the market stumbles even slightly between now and the end of the year, a new tax credit will be issued in some form. (They may extend it regardless of how the market performs.) Even if the credit is extended, many first-time homebuyers are already scrambling to make purchases while they can still get a check from Uncle Sam.
To wit, check out the advertisement currently running on ZipRealty, a popular online real estate brokerage:
Circle November 30 with a big red pen, because first-time buyers now account for fully one-third of purchase transactions according to the National Association of Realtors. If this demand dries up, sales could resume their downward spiral.
The bottom line is this: The outlook for housing is murky, at best.
Low-end markets are benefiting from government support on both the supply side (foreclosure moratoria) and demand side (tax credits, FHA) of the equation. Meanwhile, high-end markets — as defaults on prime mortgages keep rising and the job market remains lousy — are seeing steep home-price declines.
Anyone touting housing’s so-called “bottom” is likely trying to sell you something — namely, a house.
wnbz:
I agree with you. And while not a betting man, I’m pretty confident I’ll never see the first time home buyer credit expire. Sure, there will much gnashing of teeth and hand wringing, but really, when was the last time a benefit like this was removed?
I fear the same thing with Cash for Clunkers.
Just remember, it’s not their money they are putting forward with that credit. It is our money. And they will always buy votes with “OUR” money.
Well arguably they’re borrowing the money at interest from the Chinese, we’re just responsible for the interest.
You mean your great great grandchildren will be responsible for it.
Well we start paying the interest right now, but effectively, its one of those neg-am payment option loans, so our great grand-children will be paying far more than we do.
“And while not a betting man, I’m pretty confident I’ll never see the first time home buyer credit expire.”
To develop a better subjective probability estimate, consider how many other US government housing stimulus programs, some of them presumably enacted as ‘temporary’ measures during the Great Depression of the 1930s, turned out to be permanent:
- Fannie Mae, Freddie Mac, Ginnie Mae mortgage market securitization program
- FHA
- Mortgage interest deduction
- Federal mortgage guarantees
- $500,000 capital gains exclusion on sale of primary residence
- Fed purchase of MBS to buy down mortgage lending rates
- American Dream Downpayment Assistance (nominally phased out, but effectively replaced and expanded by the $8K “first-time buyer credit”)
Do any of these (and others I am likely forgetting) qualify as ‘temporary’?
The problem with permanent subsidies is that, like a hard drug habit, once permanent they lose their effect (aside from permanently distorting the market). Then a new subsidy is necessary to achieve any noticeable stimulus impact. (On that note, I am going to make a pot of coffee…)
The missing bit of information in my list are (1) any housing market stimulus programs still in effect which I am forgetting to mention (there are so many!); (2) any previously enacted housing subsidy programs which ultimately failed or were otherwise shut down (e.g., Federal Savings and Loan Insurance Corporation).
“…once permanent they lose their effect…”
But note that if stupid people believe the government’s claim that a temporary program will end, the government buys ‘free’ stimulus on the announcement that the program which was supposed to end will instead be continued.
All of these stimulus efforts quickly get priced into the market and thus lose any affordability benefits. It’s simply a transfer of wealth from the taxpayer to the holders of property when they’re implemented. Cancel these incentives and the prices will drop maintaining the same level of affordability.
“Cancel these incentives and the prices will drop maintaining the same level of affordability.”
So long as lending standards are not debauched on a wide scale like they were back when Countrywide was selling ARMs to everyone with a pulse, I agree with you. Though I keep hearing some politicians suggest that lending standards should be loosened again, I am guessing that could prove politically suicidal in the middle of a housing bust.
I agree the new home buyer credit will be extended. I suspect this was the plan all along, but to get as many lemmings to buy as possible they put a dead line on it. Hurry up before the 8000 dollars is gone.
So you’re saying we should all buy, cause renters are the foolish ones not taking advantage of the benefits of home ownership.
It’s likely to be $15,000 next year.
Even if they do extend the time limit, it will lose an enormous portion of its effectiveness. Sales are largely up because people think they only have a month or two (more like weeks, but lets ignore that for now) left to sign a contract and still get the benefit. If they add a year to the program the time pressure vanishes and the sales won’t remain at anything like their current levels, though still higher than they would be without the credit. If they add two extra months it would catch a lot of people who meant to get the unextended credit but barely missed the cut off (maybe because their first choice had inspection problems or financing fell through with the first lender). Three months gives you a week or two to find a house and still have time to close if everything is perfect. Six months maybe gets them what they really want (keeps sales up because there is still real pressure to get in before the deadline), but it is over very quickly. If they then extend for another six months, you are getting to the point where no one ever believes it will go away and again, they lose the benefit of the deadline.
I’m not saying it can’t happen. I’m saying it isn’t a slam dunk.
That’s a good point polly.
polly,
Right, like “City Liquidators” having their once-a-week “Going Out Of Business Sale!” ( and and I’ve -got- to see the new Jeremy Piven movie btw! )
Moreover, this is simply encouraging more realtors to consider renewing their licenses yet again when what they ’should’ be doing is looking for gainful employment or going back to school or some sort of de-programming/re-education boot camp.
I’m pretty confident I’ll never see the first time home buyer credit expire.
As a point of reference - Australia already had a program providing $7k when last October it was expanded to $14k for existing homes, $21k for new homes.
We’ll probably get something similar. The PTB are stupid enough to believe that a sunset of this program will literally burn the houses on the horizon, so they’ll try to turn the earth to keep the sunset from happening.
(guffaw)
Doesn’t a ramping up of incentives do the same thing as deflation.
ie I have the money to buy now but if I wait 3 months I might get 21,000 towards a house.
Very true- unintended consequences…
Here is another:
I sold in 2007, so I refuse to buy because I don’t qualify for the $8K rob your neighbor fund.
“I sold in 2007, so I refuse to buy because I don’t qualify ”
The good news is that you will qualify next year; the bad news is that prices will not have bottomed by then.
How pissed off would you be if you rushed to buy to get the $8K and then the feds up it to $16K?
I’ve heard rumors of $18K, but noe the less- I’d be flaming pissed! In fact, I’d probably STOP paying my mortgage… oops.
“Even if the credit is extended, many first-time homebuyers are already scrambling to make purchases while they can still get a check from Uncle Sam.”
First time knife catchers will be in for a rude awakening once they see the price of their home drop a lot more than $8000.-
I see a lot of foreclosures clearing out of the market. Relatively good deals are gone within days. First time knife catchers are very busy getting themselves into trouble. Many houses are empty with over grown yards but no “for sale” sign. About each block has one of those.
Here’s the underlying math of a first time knife catcher.
$10K in savings + $8K from uncle Sam = $18K. Leveraged at 10% down makes for $180K total. Multiply this by a million fools or so and you have prices in the lower segment making somewhat of a rebound. Notice, $10K of $180K is about 5.5%, now those are solid lending standards, not like the zero or 3% down of bubble days. /sarcasm off
Once prices resume their trend to the natural equilibrium the first time knife catchers will all be under water. A hard but valuable lesson for the first time knife catcher and the retarded politicians that came up with this waste of tax money.
“First time knife catchers will be in for a rude awakening once they see the price of their home drop a lot more than $8000.”
That is one reason this stimulus is much more of a Rust Belt program than a Coastal Bubble Zone program. People who have watched with amazement as their neighbors’ homes have lost hundreds of thousands of dollars worth of market value are likely to be nonplussed by the prospect of $8000 in free falling-knifecatcher incentives.
Well, that plus the fact that it dramatically tapers off above $70k in yearly income.
According to form 5405 and the instructions, the $8,000 is the cap. It’s actually a percentage of the price of the home. (Use the smaller amount.) Does anyone know if the FHA gives them the $8,000 in full towards the down?
I see a fact disconnect, but was wondering if the govt. is giving FHA buyers a hand up (their you know what).
First time also means anyone that hasn’t owned a house in 3 years.
Anyone touting housing’s so-called “bottom” is likely trying to sell you something — namely, a house.
No truer words were spoken.
Race is on as U.S. home buyer tax credit nears end.
NEW YORK (Reuters) - Samantha Kielar is scrambling to find a house in Colorado before the doors slam shut on an $8,000 first-time buyer’s tax credit she needs for her downpayment or home repairs.
The clock is ticking fast. Qualified borrowers need to have house offers accepted by the end of September to assure lenders enough time to beat the November 30 federal deadline to close deals, industry executives said.
“I am willing to settle for something” to finish buying quickly, said 20-year old Kielar, who works at the Denver County Jail, and is a part-time student. The tax credit carrot “is speeding up the process,” she said, adding that “$8,000 could help remodel the house, redo carpets and cabinets.”
For loans backed by the Federal Housing Administration (FHA), which require a minimum 3.5 percent downpayment, the $8,000 can be also be applied upfront toward the purchase rather than later on tax returns like other mortgages.
The National Association of Realtors projects 350,000 additional first-time buyers will own homes thanks to the tax credit, said spokesman Walter Malony.
First-time buyers are injecting life into the most severely battered housing market since the Great Depression.
Home sales have risen for three straight months, a ray of hope after three years of tumbling sales that swept prices down more than 30 percent on average and drove record foreclosures.
The state of housing is critical to the overall economy. While stabilizing, housing is unlikely to quickly recover as long as unemployment stays at the highest rate in more than a quarter century, most economists agree.
But various federal stimulus offers, mortgage rates that sank to record lows in April and pockets of economic strength make home buying more fathomable.
Odete Gomes, a 30-year old women’s wholesale clothing buyer in New York City living with her parents and six-year old son, said the soon expiring tax credit “kicked me in the butt to not lose this opportunity” to buy her first home.
“Especially now with the government helping you a little bit, you just gotta go for it,” she said.
“you just gotta go for it”
Sounds like she had the same hopes for her baby daddy.
She needs to just stay where she is and save time and energy. I predict that in a short while she would be moving back home after the NOD on her loan.
“I am willing to settle for something” to finish buying quickly, said 20-year old Kielar, who works at the Denver County Jail, and is a part-time student. The tax credit carrot “is speeding up the process,” she said, adding that “$8,000 could help remodel the house, redo carpets and cabinets.”
Must not punch computer for delivering this message.
Must not punch computer for delivering this message.
Must not punch computer for delivering this message.
20 years old??????? That’s mind numbing.
When it comes to remodeling or replacing things in a house, $8k is but a drop in the bucket.
This 20-yr old is still playing house; now it’s in 1/1 scale.
““Especially now with the government helping you a little bit, you just gotta go for it,” she said.”
I’m glad that I worked all my frustrations out in the gym this morning. Good lord, and these people vote too!!
the sad thing is our government prays on their ignorance…democrat or republican…it’s always about the money.
i meant preys…but i guess either one works.
lol preys on and prays for our ignorance
What to do, what to do…
My landlord is raising my rent. I can try to negotiate, but then I’ll have to sign a 1 year lease. (I was pretty much on a month-to-month because I never signed any lease renewals.)
Not sure I want to be stuck in a rental for another year. I still have a bad feeling about eventual inflation, so I’m looking to buy within a year. The only problem is, the city is still way overpriced, and I just can’t bring myself to move to the burbs far from work…
What’s the most effective way to negotiate rent? Call or write?..
Move and wait a year. They want to play chicken, make ‘em pay.
We’re deflating slowly but surely — we need the kind of reductions seen on the other coast. People are holding out here. You might have to wait two or three more years.
Why shift from a situation in which you have the flexibility to take every disadvantage being handed to your generation and get it back in the form of lower housing prices, to one in which you are locked in and vulnerable?
Just resolve to lower what you pay by six months rent over and above what you had been expecting. Then you can stay in your apt. and rehab the home you buy, someday.
“We’re deflating slowly but surely — we need the kind of reductions seen on the other coast. People are holding out here. You might have to wait two or three more years.”
WT, I gather you are not expecting hyperinflation to devalue your savings. Like NYck our biggest fear is that the value of our money sitting in savings will be frittered away before we have a chance to buy. My husband and I have felt like its threading a needle waiting for inventory to even build (it isn’t in our market’s price niche) never mind prices to drop but moving before we see our savings devalued significantly. Have I been watching too much Schiff?
Yes I’m worried about inflation. I see that as one way out of excess debt.
But I’m not sure overpaying for housing is a solution, because there are deflationary risks as well. Of course I already own a home, so that is easy for me to say.
Our other savings are primarily in 3-month T-Bills, with some (retirement 401K) left in stocks. That is due to inflation worry, as well as bankruptcy worry.
I’m concerned that there is a possiblity that the federal government might declare a state of emergency and roll over existing T-bills at near zero percent, but in that case it won’t be able to borrow more. As for investing abroad, I’m concerned there might be asset seizures from individual Americans in retailiation for a federal bankrputcy or monetization of the debt.
The worst case scenarios are really, really bad. If they happen, it might be possible to just move into abandoned buildings rather than needing to buy, if you can afford heat. The more likely scenario is falling housing prices for a year or two.
These are the ideas that make me feel like we’ll be threading a needle. There’s a feeling we should own our own property for when the SHTF while not overpaying. If the country somehow avoids SHTF, all the better.
If the fecal matter hits the fan what is in your pantry will matter more than whether or not you are a loanowner.
Like so many threads before have discussed to no end- it will be very difficult (read: impossible) to hyperinflate at this point without drastcally increasing wages. Consumers have made a paradigm shift in purchases and in the way they view $$$. This is the new normal. I like that phrase… I’ve used it a few times and most people agree!
Like so many threads before have discussed to no end- it will be very difficult (read: impossible) to hyperinflate at this point without drastcally increasing wages.
Keep in mind that some “wages” are directly tied to price inflation - i.e. anything with COLA (Social Security and many pensions). So even if private corporations reduce wages - some incomes are by contract tied to inflation.
“it will be very difficult (read: impossible) to hyperinflate at this point without drastically increasing wages. ”
I disagree completely. You’ve never lived through a currency collapse, I have, twice. What was once real currency exchangeable for food, goods, and housing, very fast (read: almost instantly) became a piece of toilet paper.
With dollar heading down the tubes, debt exploding, our trade partners screaming about diversifying from USD - all bets are off, IMHO. The scariest part is not being able to predict with any degree of certainty the timing of the SHTF, until it’s too late.
And what happened to the wages during hyperinflation, you ask? Nothing - there were NO JOBS AT ALL - rampant unemployment, and people resorting to barter of physical goods in order to survive. Those lucky few who still had jobs, preferred to be paid in other currencies and/or in physical goods (food, clothes, timber, heating oil, and whatever else that could be bartered).
Scary stuff, never want to live through such times again.
I always appreciate your perspective, NYchk. Thanks for posting.
Those COLA’s you speak of usually have a cap associated with them- at least the ones I have been graced to live under. I think the biggest was 4%, current job COLA is (was) 3.5% - that is until we voted to fore go it so we did not have to lay off 10+ employees…
As for the reply from NYchk- How many currency collapses did yo live in where the currency was considered the “reserve currency” for the entire world? Not trying to be argumentative- just trying to put this into perspective within our border. I agree with your concepts and do believe that bad things are coming. But that being said I’d like to think that dollars being worthless as suggested would cause merchants to simply refuse them not jack up the prices. Barter is not hyperinflation in my book.
I gather you are not expecting hyperinflation to devalue your savings.
Why are people so worked up about “hyperinflation” in the US at this point? Did Japan hyperinflate when its government started spending 100% of GDP during its two lost decades, in a failed attempt at reinflating it’s economy? Do you see any evidence of actual inflation, i.e. money-supply growth anywhere in our economy? The money isn’t making its way into the hands of consumers… banks aren’t lending, companies are cutting salaries and payrolls, credit is being slashed, consumers aren’t spending. All deflationary.
We are years, if not decades away from losing global reserve currency status. The Chinese and the US are bound at the hip in this. The Chinese have shifted to shorter-term treasuries, but they are still buying… and they will continue to buy unless and until other economies, including its own, can provide demand for its products.
Like I said, Am I watching too much Schiff?
Hyperinflationistas =kooks, cray-zees
Nevermind the fact that gold was up 300+%, oil up 750%, housing up 200% in years between 2000-2008. Of course the neanderthals never want to look in the rear-view mirror because they’re obsessed with the imaginary hobgoblins on the horizon. Aside from the glimpse of reality in that rear view mirror, they might drive off the road if they saw what they really look like.
“Nevermind the fact that gold was up…, oil up…, housing up…”
Yes, but how much of that was asset-ckass bubble vs inflation that will _stick_, exeter? That’s the million-dollar question, I think.
“Did Japan hyperinflate when its government started spending 100% of GDP?”
If I’m not mistaken the Yen wasn’t and isn’t (yet) the worldwide reserve currency.
The Chinese have shifted to shorter-term treasuries, but they are still buying… and they will continue to buy unless and until other economies, including its own, can provide demand for its products.
With whose money?
Up to now they’ve been using the money that we given them. As the economy continues to tank though that will be getting less and less, both due to less consumer spending in the U.S. and due to unemployment driving wages down.
This slowdown in exports to us means they’re a lot less willing to buy our treasuries. I’m pretty sure this is why they’ve been shifting to short term; the intent to ramp down purchases going further, or at least hedging for the possibility to do it if the economy continues to crap. It sure hasn’t been for the whopping 1-2% gains.
I heard on CNBC (so you know it’s true) that the Gulf States and Saudi Arabia combined buy more treasuries than China. And they depend on the US for survival, so they’re a pretty ‘captive’ audience as well. Maybe the quid pro quo is we let Goldman etc run up oil, so the sheiks have enough excess money to buy treasuries. (And surprise, surprise!–Goldman makes some scratch too.)
“Did Japan hyperinflate when its government started spending 100% of GDP during its two lost decades”
The biggest difference between Japan and US is in who owns the government debt. Japan funds 93% of its government debt internally, while US creditors are external. Japan exports, US imports. Japanese consumers are savers (the government failed to try to make their people spend), while Americans are over-spenders. It’s no real comparison.
US position and cost of borrowing is much riskier, and its cost of borrowing potentially more volatile. It’s easier to go bankrupt if you’re US instead of Japan.
“Just resolve to lower what you pay by six months rent over and above what you had been expecting.”
I love that. It’s another way of looking at it.
“What’s the most effective way to negotiate rent? Call or write?.”
Both. Call, and then put in writing the gist of the conversation.
What about moving to Queens or Brooklyn? Is it cheaper in those boroughs?
I’m already in the boroughs, and my rent is actually dirt cheap, comparatively speaking.
But I want it cheaper still, LOL. Economy is downsizing, people are losing jobs, Manhattan rents have fallen, bigger size apartment rents have fallen nicely where I live - I don’t see why my smaller apartment should be exempt.
The biggest selling point of this neighborhood is convenience and affordability, 15 minutes into the city at half Manhattan price. Well, since the city rents have fallen, what gives? Our rents should fall too, not rise. It’s a matter of principle. I really detest being taken advantage of and overpaying.
Chk:
are you in Brooklyn? I’m in sunnyside queens 15-20 min to times square off the 7
“Not sure I want to be stuck in a rental for another year. I still have a bad feeling about eventual inflation, so I’m looking to buy within a year.”
A year goes by awfully fast. It will probably take you a while to find the property you want, wade through the paperwork and close the deal anyway and by that time, your lease will be just about up. And it’s nice to have a month or two for the transition and moving, etc. If you can get negotiate a good deal, go ahead and sign the lease. New York has a ways to go, it’s the epicenter of jiggered markets.
“I still have a bad feeling about eventual inflation, so I’m looking to buy within a year.”
The first thing you need to do is find another blog since you are clearly not learning anything here. This may be the dumbest statement of the year on The HBB.
“The first thing you need to do is find another blog since you are clearly not learning anything here. This may be the dumbest statement of the year on The HBB.”
Ummm, no on both finding another blog and dumbest statement of the year. Simply because someone is worried about an event that you are not does not mean they are stupid or should not post here. Especially someone who has contributed to the blog and blog events like NYchk has.
Let’s quit attacking people and start debating ideas folks. I for one am getting sick of the name calling and the extreme reactions to expressed ideas/concerns. Don’t even get me started on the partisan ideology from posters foaming at the mouth.
If you don’t think hyperinflation is a possibility than explain why and present a sound argument. Anything else simply debases the blog overall.
Thank you, Bear.
+1
“I still have a bad feeling about eventual inflation, so I’m looking to buy within a year.”
NYCityBoy, would it make more sense to you if I replaced “eventual inflation” with “rapid currency devaluation and collapse”?
No.
“I still have a bad feeling about eventual inflation”
And what do you think will happen to housing when bread is $20 a loaf?
Muggy - that is a good question, one that’s puzzled me for a while. Unless wages rise to make that $20 loaf affordable, not likely, it would seem housing prices have to tumble. But then add the dilemma of cost-to-build. What happens then? I guess construction stops and people double up even more.
I understand those dots being connected and have made those arguments myself. But then do we wait for prices to drop till we can afford all cash? We have no debt but I wonder if it would get so bad that even we would have trouble getting a mortgage if banks grew scared to lend.
Also I’ve seen an argument made that the highly skilled will see their wages inflate and only the mid to lower skilled who face more competition for jobs would face stagnant or lower wages. I think he might have a valid point. Do you disagree?
We have no debt but I wonder if it would get so bad that even we would have trouble getting a mortgage if banks grew scared to lend.
That’s a self-correcting mechanism, no?
If things get that bad, the lending institutions still have too much real estate inventory on their books. To move that inventory, either a.) prices must drop so much that loans aren’t needed, b.) lending standards must loosen in order to accommodate would-be buyers. Unless the managers of said financial institutions are complete idiots, that is. And granted, that’s a troublesome variable.
Carrie - my supposition is that in theory price discovery causes prices to fall until the market clears and that there’s nothing anyone can do about that. People structure their needs and except for the rich, they pretty much discard their wants for the time being. So yes, I think that in theory houses could end up being salable for little more than what they will bring in cash. My paternal grandmother lost a hotel and a lot of rental houses in L.A. during GD1 because of this absence of liquidity. Printing money can’t help because wages can’t rise fast enough to compensate for a screwed-up pricing structure.
That said, I think that what is most likely to happen is what was predicted here from the earliest days of Ben’s blog - that prices will revert to their long-term norm, after a correction that will temporarily swing them below that. It means to me that we can expect to see 1998 prices without much difficulty and I wouldn’t be shocked for them to hit 1995 or below in some areas, with the best deals obviously being related to all-cash or very-low-LTV financing.
Opinions about this are all over the place, of course. Prechter just had an interesting television piece on dollar appreciation and price deflation - he conceded that he clearly is in the minority about that, but he gives a pretty persuasive argument, IMHO.
Does anyone know anything about the relationship of RE prices in Zimbabwe to other assets/bascis like a loaf of bread? I know wages failed to keep up somewhat. Seems we should be delving into this subject right about now.
There is no relationship because in Zimbabwe if you are politically connected you can have real estate free by simply showing up and kicking off the current owners.
It the “friends of Mozilo” program, but at a much higher level (”fiends of Mugabe”?).
Muggy- Yep, and how about the salary inflation that will never happen. If all the neccesaties are going up, your salary isn’t (might even be deflating), what makes people think they’ll even be a housing market, even if it deflates.
“what do you think will happen to housing when bread is $20 a loaf?”
CASH FOR CRUST
Bux4Beans
“what do you think will happen to housing when bread is $20 a loaf?”
A better question, what happens to housing when bread is $200 a loaf (and rising)? Answer - housing and other hard assets cannot be had at any $ price.
After the dust settles, goods will be comparatively revalued in whatever new currency that replaces the old $. The losers in such scenario? Whoever had the most cash on hand.
IF however we manage to avoid serious inflation, then it is possible the relative value of housing vs. everthing else will fall, even if nominal house prices remain the same. However, if you hold cash, then you still lose under that scenario - everything else costs more so cash is worth less, the credit will be harder to come, interest rates are higher, and the nominal housing price doesn’t fall (even if “real” price did).
What I really want to know, is what happened in US in the 70s. I hear current conundrum may be similar?
There are such things as negotiating skills, and there are books about how to acquire them . I read one called “You Can Negotiate Anything” many years ago..
Amazon… Well worth the 8 bucks, imo.
Another one:
Getting to Yes
I recommend Jim Thomas’ book, Negotiate to Win.
WHY on earth do you want to buy in NYC?
There is a 1 bdrm with a small yard for rent herein Sunnyside queens…not sure what he wants…
Where in the city do you live? how close are you to work?Do you get any OT at your job? How much is the rent….details NYchk details….
Trust me people ARE hurting, …are you in a Legal apartment, not a basement one?
Details? Why do I want to buy?
I work in Midtown, and live 20 minute cab ride, 30 minute subway ride away.
I don’t really WANT to buy in NYC or anywhere near because of outrageous maintenance and/or property tax situation (talk about fleecing the populace, not to mention rising city/state income taxes).
However I DO believe in the benefits of owning the roof over one’s head, and in living close to where one works. And I really miss the Central Park…
I’ve been waiting years to buy, renting in the cheapest place I could find in the meanwhile. I’ll be livid if those years of waiting come to nothing because the Fed accidentally-on-purpose prints too much money.
NYchk - my wife had this worry when we began to rent. I listed each month’s rent on a sheet of paper, in a declining-balance manner with 12 month’s worth total at the top. Since it is almost impossible that you’d move out before living in the apt. for the first day of the new lease, your real exposure to loss is only 11 months, tops. But since you also are unlikely to find, contract for and close on a property within the first 60 days of your new lease, your exposure is only 10 months’ rent. And so on. At any time, you can take your loss exposure for the remaining term of the lease and subtract it from what you were going to offer on the purchase. I think it is more likely that by having the flexibility to make a purchase offer with no prior-sale contingency, you would cause a seller to forfeit enough additional to offset your rent loss - and you can take your sweet time moving and getting the new place in shape first.
That is a good point I never thought out exactly like that Chip.
That is a great point. Thanks, Chip.
Find out what other comparable rentals in the area are going for. Present said data to landlord in writing.
Go on craigslist, find a similar place to rent. Get an idea of how much a place like you currently have goes for. Then you’re in a good negotiating position.
Similar places rent for $X, so tell your landlord you’re willing to pay $X and not a penny more. Take it or you’re moving elsewhere. Not sure how much stuff you have and how difficult it is to move, but then there’s the good feeling to stick it to your landlord.
Inflation will eventually hit us, but not within the next 12-24 month for sure.
We agreed to a 12-month lease with an escape provision that we can leave with 60 days notice upon the purchase of a house. I don’t see us exercizing that clause anytime soon.
I still have a bad feeling about eventual inflation.
OK so we get inflation gas prices go up, food prices go up, car prices go up, clothing goes up, interest rates go up. All the while the average Americans salary is flat or falling.
Now what happens to the price of houses with rapid inflation?
People will downsize and move in with mom or neighbors, or the car. Tent cities will spring up. Housing however will not rise certainly not the higher end stuff.
As a landlord myself, I would call. My take on rentals is that its easier and cheaper to keep a tenant, than to find a new one. remember, the unit will have to be repainted, all maintenance and repairs need to be done, maybe new carpets or re-sanding the wood floors. then, unless you have people waiting in line for a unit, it will probably be empty for at least a month…while doing the maintenance…. So, as a landlord ifthe rent stays the same, even without a new lease, I’ll save on the turnover. The additional rent increase is not equal to what it would cost to re rent. Especially if your a good tenant and pay on time.
Negotiate for no rent increase…settle for half of what they want.
Thank you all so much for your advice, it’s very helpful.
I’ll try to negotiate with LL, and see if I can get any discount.
And as a former LL, I found out, it was far better to keep a great-on-time paying tenant who rarely ever calls for anything, than to stand firm on a rent increase and maybe lose that good one for a bad one.
Once when a good tenant family moved, my property mgr came with me to look over the property. I was stunned at the mess. Actually mgr said, that it was really really good condition and I was very lucky. One can’t stay emotionally attached to a property when turning it into an income property. That was years ago.
I’m confident I will be able to knock another $100 off my rent in Ahwatukee in a year. I’m relieved that I signed my new one year lease today (I’m in my Phoenix location). I had a verbal commitment from the management that I would be paying $116 less per month. But now it’s a contract.
I base my confidence on reports such as the recent one from Deutsch Bank predicting 48% of all people with mortgages will be underwater in the next couple of years.
These are great times to be a renter, a buyer of a new Dell notebook, an owner/buyer of series I bonds, municipal bonds, and precious metals bullion!
I’m not a gold bug, but I fear I’m getting on precious metals bullion wagon myself…
I recently talked to Merrill Lynch’s Chief US market analyst and Head of U.S. Technical and Market Analysis. Buy gold was one of her recommendations. Ouch.
Warning to landlords in foreclosure: renters have new housing rights
BY SHANNON BEHNKEN
Published: August 14, 2009
You’ve probably heard a story like Christina Smith’s before. She had been in her new rental home for just two weeks when a foreclosure packet arrived from the clerk’s office.
The home she had just leased for a year was to be auctioned at the courthouse in less than a month. Smith, a single mother of three, scrambled to find another house to rent in the same school district.
“I was terrified I’d come home and find the house locked and all of our belongings gone,” she said. “I left as fast as I could.”
Smith had just spent $2,400 to move and said she had to borrow $1,800 for her 72-year-old grandma to move again.
But here’s the part of the story too many people haven’t heard yet: It didn’t have to happen that way.
Historically, renters haven’t had many rights if their landlord stopped paying the mortgage. A lender took back the home and the renter was forced to vacate.
But with so many renters getting tossed out, Congress changed the rules in May. The Protecting Tenants at Foreclosure Act says renters must be given at least 90 days to leave. In some cases, renters can stay even until their lease expires.
But, like Smith, so many renters have never heard of the new law and have no idea how to protect themselves from this type of situation in the first place.
As the economy struggles, Florida’s foreclosure rate continues to tick up. Investors who bought rental homes during the housing boom and can’t afford to keep them are walking away.
Nationwide, about 40 percent of families facing eviction are renting from landlords with homes in foreclosure, according to the National Low Income Housing Coalition.
Some landlords are doing the right thing and notifying tenants as soon as they fall behind on payments. Others, though, are using the sluggish foreclosure process - which can drag on for a year or more - to pocket rent money.
Renters may not find out until they’re served foreclosure papers themselves. Florida’s law requires renters be named in foreclosure lawsuits so that they’ll be informed.
So what can renters do?
First, don’t sign any lease before checking your county’s court records to verify that the home isn’t already in foreclosure. Keep in mind, however, that suits are not typically filed until owners are at least three months behind on payments.
If you receive foreclosure papers on a home you’re renting, don’t assume you have to leave right away.
Keep paying your rent until you find a new home. If you stop paying, you’ll likely get evicted, and that would hurt your credit.
If the bank takes back the home, you have a right to stay until your lease expires - unless the home is sold to someone who intends to live there. In that case, the 90-day rule would apply.
An investor who buys the home is required to honor a lease unless they sell to someone who wants the home as a primary residence. Again, the renter would have 90 days to relocate.
As for Smith, she says she’s learned a big lesson in due diligence.
Neighbors have told her that the landlord who knowingly rented her the home in foreclosure had done the same thing on the same home to two other renters.
“It’s a really dirty thing to do to someone,” she said. “I just hope no one else moves in and pays him money before the bank takes that home.”
“Historically, renters haven’t had many rights if their landlord stopped paying the mortgage.”
Historically, landlords were not often the type of people who could not afford to pay the mortgage.
But I may have spoken too soon, as the evolutionary process which drives some landlords into foreclosure leaves behind relatively more landlords who can afford to pay their mortgages in the current population.
By a similar principle, when you look at the outrageous asking prices for used homes shown on your local MLS, always keep in mind that you are looking at the asking prices of homes that have not sold, and some of which may never sell thanks to owners unwilling to drop their prices.
Jim Willie- Hat Trick- 8-14-09
FDIC Chairman Sheila Bair believes up to 500 more banks could fail, according to conversations between US senators and Bair from recent meetings. That story received little if any coverage. The real number is 1000 banks, from Bair’s own conversations. Little banks are dropping like flies, and we are due for a big bank to fail very soon. No need to guess, since accidents will be random among the crippled edifices. The biggest bailed out banks merely invest in USTreasurys, capturing easy profits from the steep yield curve. Lastly, prepare for a big surprise. AIG will soon be forced to reveal it is bankrupt again, encountering another painful failure, despite all its falsified reports of revival. It is dead, even after $180 billion in aid. AIG has been busy conducting a shell game to move assets from recently audited subsidiaries to the next subsidiary to be audited, in order to hide its neverending bust played out. It is a veritable Black Hole under the USGovt roof. For each and every sector of the ailing defunct landscape, one can safely said THAT AINT RECOVERY, FOLKS!! Stimulus, rescue, bailouts, nationalizations, and more USDollar ruination lie directly ahead.
! have always thought that money that was paid out by AIG was money
that the Banks and Investment Houses (Goldmans) didn’t have to pay back .
It was deal to just give one Company a Big Loan and have just one
Company fail to pay back the Tarp Funds . In other words ,would you rather get a Insurance pay-off from AIG ,or get Tarp funds you have to pay back ?
well…there you go. that pretty much was the plan i think.
Are you suggesting corruption at the level of Secretary of the Treasury?
Remember GS CEO was in the room with Hank Paulson during the AIG bailout. 13billion dollars of money for GS with no strings attatched, no pay back to US tax payer.
I’d bet my retirement account that GS and MS set this plan in motion long ago.
Will AIG’s bankruptcy 2.0 be the one that sticks?
Yeah, they’ve finally worked out all the bugs in the previous release. Anybody ever heard of Windows 1.0?
FDIC Chairman Sheila Bair believes up to 500 more banks could fail,…
The number of competitors of Megabank Inc. just keeps getting smaller and smaller.
(sorry PB to steal your term
)
(Reuters) - Large U.S. food companies say the country could “virtually run out of sugar” unless the Obama administration eases import curbs…..The companies warned they would hike consumer prices and lay off workers if the agriculture department did not allow them to import more tariff-free sugar. There could be a severe shortage of sugar used in chocolate bars, breakfast cereal, cookies, chewing gum and thousands of other products.
< Oh, the horror of it all! Overweight Americans might be deprived of a few candy bars and other sugar-laced junk if Obama doesn’t give in to the threat of the big junk-food manufacturers.
Watch the agriculture department yield to the corporate threats. Watch American waist lines continue to expand.
.
They (gubmint) should triple the tariff on sugar.
Mindless rubes will continue to gorge on candy bars & will have no problem paying higher prices.
Just look how well the higher taxes on cigarettes have worked out. Have smokers kicked the habit?? NO. Instead, they just keep a puffin!!
But they complain more. Isn’t that something?
Instead, they just keep a puffin!!
Instead they buy a helluva lot more cigarettes in places like Delaware and Indiana, low-price states adjacent to high-price states. The taxman taketh and the taxman createth new opportunities.
There’s a little edge of the Squaxin Indian reservation that sort of protrudes over the only road in and out of the peninsula where I live, and the tribe built a tobacco shop within that bump, along with the requisite bunch of firework stands. I’ve heard anecdotally that sales at the tobacco shop are wayyyy up lately, especially since WA recently imposed higher taxes on tobacco. I don’t smoke—at least not licit stuff, nyuk nyuk—so I never paid much attention to the cost of cigarettes although I remember a few months ago when I noticed that Marlboros were something like 7 bucks a pack?! I was flabbergasted!
Random thought here…
What if we heavily tax the use of high fructose corn syrup as a means to pay for health care reform?
Would we see more healthy food products on the grocery store shelves? Read the nutrition labels of most of your food staples and you’ll see high fructose corn syrup in things like cereal, bread, and ketchup to name a few.
Yep, Bubba, it’s been said that the corn syrup is perhaps the culprit behind much of the obesity and explosion of diabetes in the US.
it’s been said that the corn syrup is perhaps the culprit behind much of the obesity and explosion of diabetes in the US. I’ve been studying obesity & type II DM for over 30 years. I do not believe this “corn syrup” etiology, nor do I believe the reductionists who say that problem is simply eating too much & exercising too little.
what is it then?
what is it then? Too complicated to get into much detail here. There is too little known about why people stop eating when they do & how they maintain a stable weight. Remember - the vast majority of normal size people do not count their calories, they just eat. Somehow they stay the same size without conscious control, and if they are forced to exert themselves much more than usual, they will either unconsciously eat more or lose weight if extra food is not available. The history of the human race indicates death by starvation was far more likely than death by over-eating, so our genes are adapted to avoid starvation, as opposed to overeating.
— There has been one especially interesting study, more relevant to this issue than the vast majority of studies which get unwarranted publicity. Apparently healthy, fit, normal size young adults were studied and their glucose metabolism was analyzed, live, at a cellular level using a PET scanner. The study group was of descendants of families which tended to develop Type II DM in maturity, the control group was descended from families without a history of Type II DM. The study group showed a marked decrease in energy production at the cellular level compared to the control group. Remember, these were all young, fit, active adults. The study’s hypothesis is that the decreased energy production is the main predisposing factor to obesity & Type II DM, & will lead, over future years, to unconscious consumption of extra food to maintain energy output. The difference in energy production is not much: just an extra 100 calories ingested per day, one slice of bread, is enough to make you gain 10 lb. in a year.
My personal hypothesis is that there is something in the environment, more prevalent in the last 150 years, a toxin, nutrient deficiency, or slow infection that pushes the susceptible into Type II DM. It’s not high fructose corn syrup. If a successful prevention for Type II DM is ever devised for the majority of those subject to it, it won’t involve surgically-induced malabsorption or the concentration camp method of semi-starvation and forced exercise programs.
“My personal hypothesis is that there is something in the environment…”
There’s a theory that I like: it’s not HFCS per se, but it is the prevalence and _cheap_ prices of sweetened drinks in general.
There are some good studies that demonstrate that our bodies meter calories very well when we eat, but do not adjust well for what we drink. We evolved back when water was all we drank, and drinking was for taking in FLUIDS, not calories.
Under that theory, HFCS contributes, but largely because it is so much cheaper, not because it is so fundamentall different than drinking sugar-sweetened drinks.
There is an interesting podcast about HFCS versus sugar on the skeptoid podcast. It dispels it. I miss Pepsi throwback
I think the issue is quantity. Look how big meals are if you eat out. HUGE plates. Lower price, lower quantity please.
Just like gasoline taxes, cigarette taxes, and alcohol taxes; the taxing of high fructose corn syrup would be a popular way to fund a specific need. In the case of those three, roads, health costs, and anti-DUI efforts.
Except we all know there is no way once the politicians get their hands on that money that a tax on high fructose corn syrup would be put towards health care. It would find its way into the eternal game of vote buying, with some going to the police unions, some going to keep parents happy, some going to keep home prices and college tuition prices high, some going to keep the AARP crowd happy, some to the teachers union.
And shoot, wouldn’t you know it - the whole lot would be called for before a single dime was paid toward health care and educating the massess that two doughnuts and a Pepsi do not make a good breakfast.*
So propose new taxes and tariffs at your own risk even if you have good intentions. The contractor that built the road to Hades made a killing off that job because of those taxes.
* I had two doughnuts for breakfast. I skipped the Pepsi but I’m on my third cup of coffee with sugar and cream, so I’m in no position to talk.
I remember years ago magazines had ad for sugar touting that it was energy. Showed a drawing of a boy drinking something sweet.
Sin taxes are an easy way to increase taxes on the poor, without technically having to give up your campaign promises that you wouldn’t do such a thing.
PLEASE dear gawd allow sugar to be used again
Its not the EVIL ingredient….thats high fructose corn syrup….
we need a company to real sugar back in products
High fructose corn syrup, the corner stone of any healthy American meal. How else could we maintain a 3600 calories per day diet? Got to keep the health care industry humming at full speed. Triple bypass, diabetis, stroke and cancer have all high profit margins for health care.
Right — the agribusiness industrial complex and the FIRE sectors have jointly succeeded in miring the country in bad lifestyle habits coupled with a disfunctional health insurance system.
Maybe the Obamanomics Team could tackle the supply side of the health insurance problem (too many obese people swilling down high-fructose-corn-syrup laden products) before they fall all over themselves to rewrite the rules for the health insurance system? But do tread lightly, lest they jeapordize those agribusiness campaign contributions…
Maybe they could reform the debate into what is really the problem. INSURANCE companies. If the debate were lets reform the health INsurance problem, then health care would be affordable and wouldn’t get between you and your doctor. Because it aint the MD, it is the INSURANCE corp.
Agree, dd.
Not to mention RUM, the highest stage of sugar.
Rum on strawberries for dessert, not so bad.
Rum in the lemonade, quite refreshing.
Rum on the breakfast cereal, now you’re talkin’
Rum and Pineapple juice…my fav
drinkin’ rum and co-ca co-la
go down Point Kuhmahnah
both mother and daughter
workin’ for….the yanqui dollar
I read yesterday that corn seems to be in abundance this year. Should have taken the time to read why - what about the ethanol? Anyway, I’d imagine the trend toward natural (cane, beet) sugar content and away from corn-based fructose sweeteners might reverse for a while, messing up the ad campaigns of brands that were touting their “back to natural ingredients” moves.
Never fear — high-fructose corn syrup is here!
Is there any reason we can’t ramp up our sugar industry output and employ a few people?
Florida posters could probably explain more, but I believe the US sugar industry is very politcally well-connected. I think it’s primarily in Florida, where the industry does great damage to the ecology of the Everglades, uses tons of water, and ships in super-poor third-world laborers (to stay competitive!) that it treats as slaves. We should import our sugar from Central/South America, they’ll sell it dirt cheap, and it would help their poor farmers greatly. Maybe keep them from having to sneak up here to find work.
Thanks for the insight alpha.
Didn’t you see the movie “Striptease”?
(The villains were from “Big Sugar” in Florida)
“Didn’t you see the movie “Striptease”?
(The villains were from “Big Sugar” in Florida)”
Just finished “Skinny Dip” by Carl Hiaasen (same guy who wrote “Striptease”) and it involved the polluting of the Everglades, crooked politicians, basically slave labor and all kinds of things that if his writing didn’t make you laugh you’d be crying by the end. (Of course, in his books the bad guys do end up paying for their crimes but it is fiction.) Very funny stuff if you’ve never read him before.
I’ve read a couple of his books - he is indeed hilarious, as is his partner Dave Barry of course.
I like everything Hiaasen ever wrote. Striptease was great. I even liked the movie.
I just finished ‘Basket case’. I think ‘Sick Puppy’ might be my favorite.
There’s a huge amount of sugar beets grown here in Idaho. Drive out into the countryside and you will see giant piles of the beets. After extracting the sugar, the reesifdue
residue makes wonderful livestock feed.
the residue is used for high-quality livestock feed.
The Sugar industry primarily employs Haitians. And believe me, cutting sugar cane is not a job anyone wants to do. Even the Haitians.
Maybe, but you don’t have to keep them imprisoned in work camps and forced to buy everything from the ‘company store’.
Don’t we get a lot of our sugar from beets these days?
Don’t we get a lot of our sugar from beets these days? Don’t know one way or the other, but I suspect the underlying reason for US sugar import restrictions is that sugar from sugar beets costs more to produce than sugar from sugar cane.
Imported sugar without tariffs is cheaper than anything we can produce here. But protectionism remains in agribiz.
I would not be surprised to learn this talk about a sugar shortage is just another play on commodities. At least when oil hit $145/bbl, the talk then was ’supply and demand.’
I’ve heard it was that some stuff grows good in the USA, some doesn’t. We can grow other things better.
Isn’t it amazing that the government restricts imports to allow the domestic sugar industry to charge higher prices in order to keep it viable, and yet is unwilling to do anything about our dependence of foreign oil, because it might require short term sacrifices that could be criticized on right wing talk radio?
Is the federal government worried that if we became dependent on foreign sugar, Al Qaeda would take over Brazil and cut off our access to obesity?
“Is the federal government worried that if we became dependent on foreign sugar, Al Qaeda would take over Brazil and cut off our access to obesity?”
Priceless, WT!
Prime, no sugar, but heck we would still be overloaded with preservatives, and fake toxic stuff for shelf life.
Still have a twinkie on the counter from a year ago. As an experiment. Love my chocolate, so initially this was very tempting, but after a few months and no change in the item…eww I am just using it as scientific specimen.
It still looks the same. Frightening.
High Fructose Corn Syrup=Monsanto.
Way to big to be pushed around. They own the seed patents to world ag crops. Tax the end product? Unlikely. This documentary is educational and scary.
http://www.hulu.com/watch/67878/the-future-of-food
Plus Monsanto got one of their attorneys put on the Supreme Court.
Large U.S. food companies say the country could “virtually run out of sugar” unless the Obama administration eases import curbs
Import quotas are set by the Sec of Agriculture. It is very similar to how it was done in the old Soviet Union. Government bureaucrats forecast the coming years sugar usage and then adjust import quotas by country to allow in the correct amount of sugar to meet the goal. The goal is to allow sugar producers to make more money than the free market would normally allow.
The department evidently did a terrible job of forecasting sugar usage, or caved in a bunch to sugar producers this year
Here is a pdf (3 pages) of the quota allowances for 2009:
http://www.fas.usda.gov/itp/imports/Sugar/USTR_TRQ_Sept08.pdf
(interestingly enough, 12k tons came from Zimbabwe this year).
But… but… I thought Reagan and the Bushies eliminated all free-market-hindering regulations, thus proving that price bubbles such as these are only the product of free markets gone wild.
I’m confused.
If you notice, the companies are saying they need more *low-tariff* sugar. The reason sugar has such high tariffs is because of the power of agri-biz and farm state senators. Sugar would be much cheaper that high-fructose corn syrup, and would again replace it in many products, were it not for these tariffs. Corn would thus be much cheaper for ethanol, animal feed, etc. But I guess lower prices for energy and healthier food would be deflationary.
A minor observation from a couple of long road trips in FL/AL/GA - I saw lots and lots of U-Haul, Penske and other brand trucks on the road, but hardly any Atlas, Mayflower or other traditional commercial moving- company trucks. This was true in any direction. Made me wonder what the “summer transfer season” is turning out to have been like.
Saw relatively few tourists on I-75 between Atlanta and Orlando, except that a small theme park in Valdosta, GA seemed to be siphoning off some who otherwise might have gone on to central Florida - only conjecture on that one.
Makes me wonder how many people moved into Fla, Cal, Nev, etc with professional movers, and moved themselves out in a U-Haul type truck. Might skew some of the stats that the moving companies keep about in/out migration of states.
Just for grins I decided to check the U-Haul one-way index for today. The following are for a 14′ truck, to be rented on 8/29/09:
Tampa to Nashville = $961
Nashville to Tampa = $532
That’s a lot more even than it was a couple of years ago.
We’ll need a ticker symbol for that, BTW.
UHTTNR? (U-Haul Tampa-To-Nashville Ratio)
Close! If it were Asheville, you’d have UHTTAR and Oly would take note!
Can someone from the Tampa area give me their thoughts on housing from the local POV? My wife and I are thinking of moving there. We were there in January looking around. Saw lots of houses for sale in Hyde Park and Davis Island where we’d be moving to.
Checked again recently, barely any houses for sale. At least in the price range were were looking $450-550K for single family. Plenty for sale in the $700K+, and condos in our price range. But paying $400K for a condo….no thanks.
Rents for something decent - at least by what you can tell from online pictures, descriptions - is $2200-2500. Which is not too far off what a mortgage would be.
I’m perfectly willing to rent for another year. Wife is on the “I don’t want to move twice again, prices have fallen so much, I hate renting, how can I raise a kid in a rental? she’ll have developmental issues (OK not the developmental issues but she does think raising an infant in a rental is some kind of child abuse)” kick. We’ve been renting a beautiful house for close to 3 years after selling right at the peak. But the nesting instinct is getting harder and harder to fight off I’m afraid.
Question I guess is this: if we do buy, is it the absolute worst thing we could possibly do? Or has enough of the pain hit Tampa that worst that will happen is lose a couple of bucks, but not the end of the world?
If you buy in Tampa right now it is absolutely the worst thing you could possibly do. Well…you could jump off a cliff, I guess. Or, get hit by a bus.
But seriously tell me what you really think.
Bring lots of ammo. A few claymores would not hurt so you can set up a perimeter.
at least the Tampa police are nice enough to put up huge flashing signs at night to “LOCK YOUR DOORS, SECURE YOUR VALUABLES”. Scared my wife so bad she almost let me buy a gun!
at least the Tampa police are nice enough to put up huge flashing signs at night to “LOCK YOUR DOORS, SECURE YOUR VALUABLES”. Scared my wife so bad she almost let me buy a gun!
Seriously? (the sign part)
Seriously? (the sign part) I wouldn’t get scared until the sign changes to “FIRE AT WILL”
Especially if your name was Will.
“…you could jump off a cliff…”
Are there really cliffs in Tampa? My recollection is that it is quite flat.
Another beach community that comes to mind (La Jolla, CA) is a different matter entirely…
You can always jump off a condo. It’s not as dramatic, but probably more symbolic.
Suicide-by-shark is a great way to be remembered in the news. It’s pretty easy around Tampa.
Suicide-by-shark sounds cool–How do you do it? Rub yourself with a pork chop and swim out to sea?
Just do a seal impression.
Just do a seal impression.
That works for the great whites off CA, where they eat seals. In FL you can just jump off a dock (happened to a guy in Tampa about 5 years ago - got eaten by a tiger shark)
You can always jump off a condo. It’s not as dramatic, but probably more symbolic.
And then maybe you could land on a giant faux Easter Island head, or else a Tiki bar, and that would be even more symbolic!
Suicide-by-shark sounds cool–How do you do it? Rub yourself with a pork chop and swim out to sea?
What kirisdad said. Be a seal.
This is why I painted my kayak to look like a giant almost ripe banana*.
Because I’m so wise, you see. I figure that sharks don’t like bananas in the first place, or else they’ll say amongst themselves “Oh, look, it’s not quite ripe yet, let’s wait til it’s ready and then eat it along with that little pink noisy thingie inside it.”
And so far I have not been eaten by sharks, so that proves my reasoning was sound.
*Nah. I just felt like it, and happened to be standing there looking at my new kayak whilst holding a paintbrush in one hand and a beer can in the other.
Actually, that’s how most of my projects start.
“Actually, that’s how most of my projects start.”
LOL…
How about if you drive your Hummer off of a condo rooftop onto an Easter Island head? That’d be super-duper symbolic. And shout ‘mission accomplished’ as you do it!
Oly, you may be doing the right thing for the wrong reason.
Sharks are mortally afraid – and for good reason – of venomous sea snakes. Sea snakes are striped yellow and black. A lot of divers off California have taken to buying wetsuits in basic black with yellow stripes on them, claiming they ward off shark attacks.
Oly,
You are one talented person
In our house my husband’s the one having nervous tics about not owning yet. He’s a do it yourselfer (previously a perfectionist professional) w/nothing to do. I look at the long term big picture. At least he trusts me and understands what’s at stake despite the crabbiness we endure.
The kids. They’re pretty darn happy despite having a low level yearning for a room they know will remain theirs “forever”. They understand how we’re thinking long term and putting off immediate desires for a better endgame. A life lesson worth modelling, no?
“In our house my husband’s the one having nervous tics about not owning yet. He’s a do it yourselfer (previously a perfectionist professional) w/nothing to do. I look at the long term big picture. At least he trusts me and understands what’s at stake despite the crabbiness we endure.”
Ditto here!
DD is too young to have any opinions on owning vs. renting. I think when we finally buy and explain that we aren’t going to move for a long, long time, she is still going to periodically ask when we’re moving again.
As a big do-it-yourself myself here’s a tip - when I was in college I got lots of rent discounts and/or payment on the side by doing work around the house for the landlord. So all is not lost on the DIY front when renting. It’s worth looking into, depending on how flexible the landlord is.
Second what packman said.
My landlord doesn’t mind at all when we do things around his house. We deduct the cost of items from the rent and send him the receipt. He can use that to write off some of his property taxes.
$2200-2500 rent x 120= tops $300K and you want to throw away $150-250K on a mortgage ($450-550K)….man it must be fun to have that much money to burn
Think of all the people you could help, giving that money to charity instead of a greedy homeOHnaz
And a 5% mortgage on $700K without any amortization of the debt at all is already $2917 a month. Plus add in property taxes and insurance.
A little more than $2200 to $2500.
This guy needs a calculator, not a house.
Did you read my original post? I said I DID NOT want to spend $700K.
I don’t see why the hostility here. I asked for opinions. My starting point is I DO NOT want to buy. If anything I want to be talked into NOT BUYING. Man, talk about a tough crowd.
Your last name would not be Haskell would it?
Last seen selling real estate in Tampa.
Eddie - are you familiar with the “rent ratio?” There are several versions, but they all end up in the same general conclusion about price. I am paying $2K/mo for a place that failed to sell at $800K. And if deflation continues I don’t expect any demand for an increase. If I were looking at a rent equivalent of $2,200, assuming a house of the same general quality and location as a purchase, I wouldn’t offer more than $330K for it, tops, and that only if it was “the only house for me.”
Recommend you not overlook the possibility of a huge “shadow inventory” in that area. Tampa probably is loaded with Option-ARMs and when those re-cast, prices could take a big further dive. In my amateur opinion, no matter how far prices have fallen, they could fall further. Try looking up prior-sales tax records for some properties there from the mid or early 1990s to see where the future could be.
Your neighbors-to-be in the counties south of there have been absolutely creamed this past year.
Eddies considering Davis Island, that’s a wealthy conclave where prices probably held up fairly well (for Florida).
Prices there have falled quite a bit. But not the 50% off like other parts of Tampa. At least from what I’ve seen. Prices are still outrageous IMO, but my opinion has always been I’ll pay more to get less house in a better neighborhood….whether renting or buying. And from what I can tell Davis Island is about as good as it gets in Tampa.
By Ari Levy
Aug. 14 (Bloomberg) — More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.
The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.
http://bloomberg.com/apps/news?pid=20601087&sid=aTTT9jivRIWE
“More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.”
That sounds pretty systemically risky to me. I thought the TARP was supposed to take care of this problem? At reappointment time, will Ben Bernanke be held accountable for the failure of the TARP to serve the purpose used to justify it to American voters, or was the TARP decision out of his hands (unlike the Bank of America - Merrill Lynch bonus deal)?
Is this example one of the 150?
Local bank at risk of action by regulators
S.D. National missing benchmark for capital
By Mike Freeman
Union-Tribune Staff Writer
2:00 a.m. August 14, 2009
San Diego National Bank has fallen well below the minimum capital levels required by regulators, meaning it must more raise money or risk government action.
In its second quarter, San Diego National posted a total risk-based capital ratio of 3.35 percent, according to documents filed with the Federal Deposit Insurance Corp. The ratio essentially measures a bank’s ability to absorb losses.
For a bank to be considered “well capitalized” by regulators, it must have a total risk-based capital ratio of 10 percent. San Diego National is rated as “significantly undercapitalized.”
“Something is going to have to be done because regulators aren’t going to allow them to continue to operate with these capital ratios indefinitely,” said Michael Perry, chief executive with San Diego Trust Bank.
…
Oh deflation where are thou? I hardly knew you. Wait, or is it inflation that we want? It’s so confusing…
Consumer Prices Hold Steady in July
In a sign that inflation is not roaring back as the economy stabilizes, consumer prices were flat in July from a month earlier, the government reported on Friday.
The Labor Department said its consumer price index was unchanged from June on a seasonally adjusted basis, and that prices this summer were 2.1 percent lower than last July, when soaring oil costs drove gasoline prices to $4 a gallon and lifted the cost of food and other products.
The drop in the last year has been the largest in almost 60 years.
Economists had been expecting no change in the cost of living in July. Excluding volatile food and energy prices, the so-called core rate of inflation rose 0.1 percent, also in line with expectations.
that’s because the “basket of goods” has been reduced to a pack of chiclets and a slim jim.
LOL
I prefer beef jerky
“In a sign that inflation is not roaring back as the economy stabilizes, consumer prices were flat in July from a month earlier, the government reported on Friday.”
Maybe it’s a sign that the economy is not stabilizing?
The Chinese bubble situation becomes increasingly interesting. Who is that Goldman Sachs economist who keeps defending his ‘decoupling’ theory? When this bubble finally blows, that theory is going to be put to severe test.
I will stick to my “messy divorce” theory regarding the future of the Chinese-American symbiosis. The collateral damage of messy divorces on innocent third parties always tends to be considerable.
I also personally know a fellow who did lots of Chinese property deals for his clients a few years back (not sure if he has done any recently). I wonder how many of his clients and other savvy American investors stand to get burned if China suddenly dumps government-owned property on the market?
China land set to fall
Aug 14, 2009, 12:22 a.m. EST
Supply glut seen cooling China property prices next year
Analysts say China’s rising property prices will soon begin easing, not just because of a much-discussed slowdown in lending, but because of a rush of new supply from government land auctions.
I’ve tried to explain to my coworkers that their super efficient government, long-term planning, public transport & infrastructure, coupled with eminent domain (right to redevelop as desired) is the very reason that property prices will not continue to rise. What makes a location valuable is access - to jobs, to parks, to hospitals, to public transportation, and if those elements are made available to all corners of a rapidly expanding city, there isn’t any huge benefit to living in the expensive areas.
On the other hand if a government is inefficient in scaling out the above urban conveniences, increasing population pressures will cause huge price rises in the desirable parts of town. Basic supply & demand.
Somehow they don’t buy my argument. Not that they have a choice in where they can park their money.
The more comments I read from you- the more I am becoming a fan. (I am a planner- small “p”)
OK- i’ll fix it before you all make snide remarks….
lowercase “p”!
Aug. 14 (Bloomberg) — Confidence among U.S. consumers unexpectedly fell in August for a second consecutive month as concern over jobs and wages grew.
The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 from 66 in July. The measure reached a three-decade low of 55.3 in November.
“unexpectedly fell”
A sign the recovery is not underway: Too many ‘worse-than-expected’ statistical releases…
I thought we were in a new bull market?Cocaine kudlow said to buy stocks, you cant lose!!!!!!!!!!!!!
I don’t necessarily think buying stocks is a bad idea, so long as you don’t buy too much at one time. Gradually dollar-cost-averaging into an internationally-diversified portfolio of stocks over the next two decades is my long-term economic survival plan.
Larry must be really hitting the blow right about now. I am sure in the end he will say he was just doing his part to save the world and really did not believe all the $hit he was bullishly babbling.
PolyFuel fails to find buyer, to cease operations.
LONDON (Reuters) - Californian fuel-cell technology company PolyFuel Inc said on Thursday it would cease operations immediately and seek shareholder approval to liquidate its assets after failing to secure a buyer.
“The board and its banker, KBC Peel Hunt have been unable to secure a satisfactory offer for the company on a going concern basis,” PolyFuel said in a statement.
Shares in London-listed PolyFuel were suspended in July when the company said it was struggling to secure new capital and warned it would have to wind down the business if it failed to find a buyer.
PolyFuel, which had been looking for funds to complete technology and product development, said last month that equity capital for development stage companies was proving “very difficult” to come by.
PolyFuel had developed a fuel cell power supply for the Lenovo ThinkPad notebook PC.
Why aren’t you buying? There is plenty of inventory, a tax credit in the offing, historically low interest rates, prices are 50 pct or more off peak, 3 pct down FHA loans are available, it is cheaper to buy than rent, and unemployment is topping. Sellers are in an extremely weak position, they are disgusted and want to rid themselves of their shame.
Do you have any effective strategies for buying homes at current market value, instead of at the inflated prices still shown on the local MLS?
Big Sis paid 250K for each of her two alligators. If the bank approves, she’ll sell them to you for 95K. There are no tenants, she stopped paying the mortgages, and she just wants someone to stop the pain — make it go away.
Little Sis and hubby paid almost $300K for their new alligator back in December 2006 before selling the old alligator. The old alligator is almost ready to put on the market (except for the collapsed above-ground swimming pool, but that is a long story). The good news is that thanks to extreme frugality, they owe very little debt on either alligator. The bad news is that they nonetheless will need to either sell or rent out the old alligator in the worst real estate slump since the 1930s.
Big Sis is the opposite. Took a chunk out of the second on her primary before she stopped paying on it and has been vacationing all summer long — Disney, Bahamas, Toronto, and the Carolinas. There is even talk about a new car for hubby and he doesn’t even drive a clunker. She is not going to stop vacationing, contributing to her church, or take her kids out of private school to fund losing investments.
MLS Strategies:
From: Go Dog GO! by P.D.Eastman
“Do you like the price of my house?”
“No, No, I do not like the price of your house.”
“Do you like my offer for your house?”
“No!, No! I most certainly do not like your offer for my house.”
“Good-bye!”
“Good-Bye…see you in 6 months”
That’s a hilarious take on one of my DD’s favorite books. Thanks for the chuckle.
That is so excellent, Hwy!
BTW- went out to investigate all the ruckus in my hot tub last night and was nearly bowled over when a 400# bb barreled past me, pursued by the hero dogs in full bellow–and climbed the pine tree under which I was standing. Freakin’ YIKES!
The drought has critters coming down from the high country right and left. Watch yer six!
California announced plans they are going to shut down their (i.o.u.) printing press. Next problem: Kissing up to Wall Street to restart the bond issuance sump pump. Wouldn’t it be easier to just convince the Fed to target some helicopter drops out here, instead of on the giant bull’s eye centered in the heart of Manhattan?
“The statist notion that government can dictate an economy where the laws of economics don’t apply is as ludicrous as passing laws against gravity or the movement of the sun.”
~Lee Muller
“If you can’t beat ‘em, join ‘em”
- English proverb
What? Worried the consumer may screw things up? I thought in this gubmint sponsored recovery we didn’t need no stink’n consumer.
Stocks retreat after 2 days of gains as investors worry consumers will hurt economy’s recovery. August 14, 2009
NEW YORK (AP) — Stocks fell sharply Friday as investors worried that nervous consumers will short-circuit the economic recovery.
Traders were disappointed by media reports that the Reuters/University of Michigan index of consumer sentiment fell sharply in the first part of this month, a sign that consumers may continue to curtail their spending as they worry about losing their jobs. Consumer spending is crucial for the economy to emerge from recession as it accounts for two-thirds of all U.S. economic activity.
The discouraging reading came a day after the Commerce Department reported an unexpected decline in retail sales. Investors were able to shake off that reading, but Friday’s consumer sentiment number had them bailing out of stocks and moving their money to the relative safety of government bonds. Treasury prices rose sharply, pushing their yields lower.
The Labor Department said the Consumer Price Index was flat in July after a slight increase in June. Inflation is bad for bonds because it eats into their fixed returns over time.
Meanwhile, the market shrugged off a report showing a bigger-than-expected increase in industrial production. Investors have come to expect an improvement in manufacturing activity; their concern now is the consumer.
Stocks fell sharply Friday as investors worried that nervous consumers will short-circuit the economic recovery.
It’s the damn consumers’ fault (again)!
And just to help those “should I put $$ into the market or not” fence-sitters out there, consider what the current market represents in terms of a multiple to GAAP earnings and not “fraud- extend-and pretend” earnings:
Make the companies that make up the S&P 500 mark their financial trash assets to the market, instead of fantasy, which they are doing now, and the current S&P P/E multiple is no longer 17.
Apply the restrictions and rules that are already on the books but nowadays no longer enforced, and the S&P multiple rises a bit to 140!
Why would any sane investor buy into a market through their 401K, company plan, mutual funds, or whatever, when the market is at 140 times earnings?
I don’t think they would; which is why the MSM is throwing lie after lie at the population regarding the economy, and CNBC and other O-Bot pump monkeys keep a circle-jerk going about “animal spirits” and “green shoots”. Which is why the PPT backstops every sell-off. Which is why nearly a trillion of Bernanke/Geithner funny money has found its way into the market via bailed-out banks.
Hallucinations, delusions, pretensions, fraud, and grand theft, do not a positive cash flow make.
Flash!! Consumers worried that wall street will steal the rest of their money, so they are not spending. How about that wall streeters?
Sounds like Wall Street will have to devise more effective means of stealing, if consumers are not voluntarily surrendering their money.
More effective means to stealing.
Release the inflation hounds. Gov prints money and gives it to Wallstreet, eventually those sitting on cash discover that it’s value has been stolen.
PS I’m still in cash at this point, my next big purchase will be a house, and inflation or no inflation there is no way housing is going to rise anytime soon. I’ve purchased most of the things I’ll need over the next 10 years.
“Gov prints money and gives it to Wallstreet, eventually those sitting on cash discover that it’s value has been stolen.”
Lather, rinse, repeat…
“…Consumers worried that wall street will steal the rest of their money, so they are not spending.”
Hey, let me verify that…What!, someone’s removed Hwy’s “Pitchfork Index” from the internet…Well, the last time I checked… sales were booming!
“Flash!! Consumers worried that wall street will steal the rest of their money, so they are not spending.”
B…buh….but…that isn’t in the model.
Ohio Woman’s Path Out of Unemployment Ends in Rural, and Job-Rich, North Dakota Interesting article, RTWT. The story is initially hopeful, but then the hope was spoiled at the end when she bought a mildewed mobile home for $7500, $100 down, 145 miles from her workplace (estimated with Street Atlas)! If she indeed intends to work in Bismarck & live in Glenfield ND, she will be spending a lot of time & money commuting. One way is 145 miles, which takes 3 hours. Assuming she makes 20 round trips a month & gets 22 mpg, at $2.67/gal regular, she will be spending $700/month just on gas to commute. However, I suspect (and hope) the name of the town she bought in was mis-reported, there are many small ND towns whose name starts with “Glen”. She paid way, way too much for her mobile home, considering its location. The comments to the article are worth reading.
“…One way is 145 miles, which takes 3 hours.”
Well, it might be a “tad longer” when the arctic winds blow south from Winnipeg during the…WINTER!
(Hwy thinks the O-Hi-O pilgrim family will not last the first season in America’s frontier lands)
I have a friend that knows cars that drives 100 miles each way to work in Missouri. I know cars, and drove 100 miles each way to law school for 3 years. (Not being sexist Oly), A 63 year old lady in a Nissan with 230K in North Dakota, (unfamiliar w/ weather) will NOT make it through one winter driving 300 round. She’ll wreck, go insane, or blow a head gasket, (on the car).
It is not even possible.
Otherwise, I admire her spunk. But, why did she buy something that far away, w/o renting first? A ( moldy trailer, sight unseen) there is something missing to this story.
How stupid is she?
DOn’t they have rentals in the town she got the job?
does everyone own?
And 7500k for a mobile home. OH brother.They don’t have good insulation at all.
The Dough-for-Dumps program must be working, as suggested by the effect of the government-engineered dead cat bounce in the Case-Shiller Index in reducing the percent of mortgages in negative equity positions. But how will underwater numbers look after the ginormous foreclosure tsunami finally hits the shore?
As an article in the current print edition of the Economist notes, efforts to prop up prices at above-market levels have historically failed in spectacular fashion. Perhaps it is different this time? (So far the evidence suggests not…)
Aug 13, 2009, 6:58 p.m. EST
Almost one-third of home loans under water
The number of negative-equity mortgages drops slightly from prior quarter
By Emily Glazer, MarketWatch
SAN FRANCISCO (MarketWatch) — A slowing in the pace of home-price declines helped bring down the portion of home-loans with negative equity — the situation where borrowers owe more on their mortgage than their home is worth — according to data from First American CoreLogic.
More than 15.2 million U.S. mortgages, or 32.2% of all mortgaged properties, were in a negative-equity position on June 30, edging down from 32.5% at the end of March, according to the real-estate information company, which tracks data on about 90% of mortgage loans nationwide.
The aggregate property value for loans in a negative-equity position was $3.4 trillion, according to the report.
…
Zilldo’s estimates, as always, are too high…
24/7 Wall Street
Underwater Mortgages Reach Epidemic Levels
Posted: August 11, 2009 at 6:00 am
Posit: Underwater mortgages hurt home sales and increase delinquencies and foreclosures.
People who have to pay their mortgage holder to sell their homes are less likely to be sellers. A home sold for $200,000 when it has a $250,000 mortgage is a home that the owner may not be able to afford to sell.
People living in homes with monthly mortgage payment that stretch their abilities to cover their living costs may stay in homes that they believe have a lot of equity and where a sale will eventually bring them a profit. That hope for a bonanza may encourage them to go through the agony of making large payments. People who have no hope of making money on their homes are more likely to be willing to abandon them or be kicked out.
Both of these trends make it more likely that the housing sales pace will continue to be slow and property values will not recover.
Real estate research firm Zillow says that 23% of mortgages are now underwater. The company adds that the number could be 30% a year from now. One of the major reasons for the trouble is that home values fell 12.1% year-over-year in Q2 to a Zillow Home Value Index of $186,500, resulting in a total 22.3% drop in value since the market peaked in mid-2006. Twenty-two percent of all transactions in June were foreclosures, a possible sign that people are not willing to fight until the end to save their houses.
…
I for one hope that the American ‘consumer’ will change their ways. One thing is for sure, the unemployed make for a lousy consumer.
Americans No Longer Seduced By Shopping: The Case Against a ‘V’ Shaped Recovery
Posted Aug 14, 2009 08:00am EDT by Peter Gorenstein in Investing.
The American consumer - not as sick as it once was but still not feeling like its old self, just yet. Despite signs things are getting better in certain sectors retail remains in a deep funk. As was reported on Thursday, July retail sales fell 0.1 percent coming in below an expected gain of 0.7 percent.
Someone who wasn’t surprised by the weak data is former Wall Street retail analyst Kristin Bentz. “It’s going to take this consumer a long time to recover,” she says. The author of the retail focused investing blog, The Talented Blonde, believes the recession has changed the consumer’s behavior forever. “I think that Americans are willing to do with less and aren’t going to be so easily seduced by retail.”
Bentz tells Tech Ticker that the key to turning things around is the job market. But in the meantime, if we continue to spend more and shop less you can kiss that talk of a ‘V’ shaped recovery good-bye.
With that in mind, Bentz says the key to investing in retail stocks is, “picking your spots and following where they’re going to go.” That means trading down from a higher end retailer like Abercrombie & Fitch to more moderately priced merchandise in Aeropostale. “It’s the right product at the right price in the store at the right time.”
From behind “The O.C.”
Good thing Irvine is one of the “safest” cities in America….
“Orange County had never seen the likes of me,” Gallo adds.
“He goes on to claim that he was a pot dealer at 13, a cocaine user at 14, a stickup kid at 16, a coke smuggler for a Mexican drug trafficker at 17, a car-bomber at 18, an undercover witness for the FBI at 19, an accused murderer at 20, and a porn movie producer at 21.”
“Gallo writes that he now lives under an assumed name in the federal witness relocation program someplace in the United States, hiding out from Colombo Family and Lucchese Family mobsters he ratted out to the FBI.”
“Breakshot,” a true crime memoir by a kid from Irvine:
August 13th, 2009, by Larry Welborn OC Register
http://www.usdebtclock.org/
my favorite number is the one just about in the center of the page.
Fed a Rudderless Ship?
Axel Merk
Sustainable Wealth
Aug 13, 2009
How much excitement can a statement by the Federal Reserve’s Open Market Committee (FOMC) generate? Given that the Fed has been printing over a $1 trillion of fresh currency over the past year, more are indeed taking note when the Fed speaks.
In our assessment, the Fed statement is a compromise of what may be an internal dispute at the FOMC. We are referring to a $300 billion program to buy Treasury Bonds, previously scheduled to run out in September. Buying Treasury Bonds is intended to lower long-term interest rates; and from what we can tell, it is in the Fed’s foremost interest to keep long-term rates low to keep the nascent economic recovery on track.
However, massive financing requirements by the federal government, states, as well as the private sector, not to speak of international public and private issuers, may push the cost of borrowing higher this fall. Alas, the Fed wants to keep some powder dry to intervene in the market.
Trouble is that there’s very little powder left in the approved program. In the past, our Senior Economic Adviser and former St. Louis Fed President William Poole has referred to the Fed’s initiatives akin to sipping from the ocean with a straw. It may not be prudent to open a new box of powder at the last minute, but if the Fed intends to use it, the market should be prepared for it. Hence, it may have made sense to increase the program now.
The committee wanted none of that, yet to admit that something may need to be done, they extended the length of the program without the amount. That’s like saying we keep the bar open an extra couple of hours, but good luck finding any alcohol. With many alcoholics in the room (we are referring to market participants addicted to cheap credit, not Fed officials), we have our doubts they won’t convince the barkeeper (the Fed) to make more cheap booze (currency) available.
All of this may be a prudent tactic. More likely, however, it reflects an internal battle at the Fed, as some are calling for less, others for more cheap credit. Is the Fed becoming a rudderless ship? It may require a crisis to see strong leadership yet again. And another credit crunch we may get if the cost of borrowing goes up.
Of course, we wouldn’t have this discussion if the Fed allowed market forces to play out and weed out the weak players. But the political will to pursue sound monetary policy seems absent all too often as the credit crisis evolves.
From behind “The O.C.” (cont.)
To think this happened right under Cheney-Shrub’s SEC warrior-king Crissy Cox’s nose…and in his own Newport Beach, CA backyard as well…tsk, tsk, tsk.
I hope the hamster is O.K., (Hwy wonders what the poor little fella’s name is?)
“…The court-appointed receiver for Tustin lender Medical Capital Holdings reported today that “noteholders will almost certainly suffer significant losses on their investments.”
The company raised $2.2 billion from 20,000 investors before the Securities and Exchange Commission sued it last month for fraud.
Medical Capital bought unpaid bills, known as receivables, at a discount from hospitals and other health providers.”
Among the investments:
* Vivavision Inc., a maker of cell phone applications. Its sole product, the receiver wrote, “was a live video feed of a hamster in a cage.”
* An unreleased movie, The Perfect Game, about a sandlot baseball team from Mexico that went to the 1957 Little League World Series. Medical Capital poured at least $20 million into that venture.
* A yacht, the Homestretch, moored in Newport Beach. The receiver said a Medical Capital subsidiary occasionally employed a captain and crew for sailing excursions aboard the Homestretch, primarily for Medical Capital CEO Sidney M. Field and President Joey Lampariello. The website for the yacht has been taken down, but we have a copy HERE.
Receiver: ’significant losses’ for MedCap investors:
August 12th, 2009, by Ronald Campbell OC Register
Half of Tampa Bay Area mortgages underwater.
“http://blogs.tampabay.com/venture/2009/08/wake-up-and-good-morning-xxxxx-1.html”
how high’s the water, mama?
five feet high and rising!
…looks like we’ll get blessed with a ‘little’ more rain…
(Johnny Cash-less Society)
How wide is my pooter, papa?
Five inches wide and rising!
…looks like we’ll get blessed with a “little” more pain.
Lou Reed
Seriously, sorry Ben. That was a little over. I joke around with alpha a lot. Again, I apologize. Delete, as I don’t know how.
no take backs!
And we wonder why the fella yesterday was perturbed at “us” getting off track with our conversations.
You just wonder.
alpha/ate..behave..someone is trying to read seriously.
HAHAHAHA
oh yeah…them skollers…Hey, smart guys! Here’s yours!
(_!_)
:
:
from the treetops–where I hang
The New Fall Fashion is Inflation…
Michael Pento
Posted Aug 13, 2009
Get ready to be hit by some startling inflation data. The data soon to be released by the government will put a dagger through the hearts of those who are predicting a protracted period of deflation. Wall Street and Washington are telling you inflation isn’t something we need to be concerned about for years to come. The truth is starting this October the reported Consumer Price Inflation data will become ugly. That is because the year over year comparisons of energy and commodity prices become very unfavorable.
To start off, there is little evidence even now of deflation in the current year’s data. Already we find if we annualize the first six months of inflation data in 2009, the rate of CPI is running at a 2.8% annual rate. But the focus has been on the year over year change, which has been very quiescent–negative 1% for May and -1.2% in June. The YOY negative CPI print has been the direct result of plummeting energy and commodity prices.
How important are commodity prices in the CPI calculation you ask? According to the Bureau of Labor Statistics, the relative importance of commodities in the CPI index is 39.556%!
For the immediate future the storm clouds of inflation will not visible to all. The price of oil has been halved from its peak of $147 a barrel last summer to $70. And the Reuters Jeffries CRB Index has fallen from $400 to just over $260 as of today.
Therefore, the inflation data coming out for July will have the benefit of over a 50% decline in the price of oil as compared to last year. And the August data will also enjoy the pleasure of a 35% decline in the CRB Index from a year ago. However if we assume today’s prices, come December the CRB Index will be up 26% instead of down 35%. And instead of being down 50%, the price of oil will be up 100% come Christmas.
The soon to be reported surge in inflation will primarily be the result of a continued weakening in the US dollar. Our efforts to ignite the reflation of the housing market have been placed on the back of a depreciating currency. A strengthening dollar and a deflationary environment just can’t exist while the monetary base has doubled in the past year and with an 8% increase in M2.
This gives Ben Bernanke reprieve from addressing the weak currency and inflation for the next few meetings - including the one taking place today. But come November, the spotlight on the FOMC meeting will be especially intense and bright. The Fed will either have to decide to defend the dollar or allow inflation (even as reported and acknowledged by the government) to run way above their target level of 2%. The point remains the same however; he must soon provide a real rate of return for savers while at the same time most likely putting a nail in the coffin of this recovery or seek to continue our inflation and debt addictions.
CPI data however isn’t year-over-year - instead it’s constant data, and the % change announced is annualized monthly data, is it not? Thus CPI numbers (e.g. today’s being 215.351, last month’s being 215.693) only include data measured that month, and are not comparisons vs. the previous year, I’m pretty sure.
and how would CPI data look minus cash for clunkers and 8k for housing. What will happen to demand if we get inflation that does not trickle down to wages and lending tightens even more.
The data soon to be released by the government will put a dagger through the hearts of those who are predicting a protracted period of deflation.
I call bull on this. Just because some trader wonk speculated on higher oil and commodity prices after an epic commodity bust and the rest of the investment world piled into the same trade doesn’t mean there is inflation. Yes, we may see higher prices at the pump than from 6 months ago, but given there is no fundemental reason for the market to move as such and the traders are just playing momentum, eventually prices will fall again… at the end of the day there must be an end-user for the commodities. No industrial demand, no end-user.
And IMHO, M2 alone isn’t an indicator of money-supply growth and inflation in this economic environment. All it tells me is that savings is increasing… It tells me nothing of the velocity of money, the availability of credit and the most important point in my mind, the outstanding debt. Again, the boogy-man of inflation is being pushed. Did Japan manage to inflate it’s way out of a 20-year economic doldrum? Qui bono?
Got oil?
You see what happens in a “free market” filled with “financial innovation” that is constantly operating on improving “efficiency” by a simple mechanism known as: Supply & Demand!
(It helps if the commodity is something both business & consumers need, kinda like corn syrup)
Oil demand goes down…prices go up! ($3.01 in Southern CA)
“…Earlier this week, the government said the country’s petroleum supplies remain well above average as demand continues to slump.”
http://finance.yahoo.com/news/Energy-prices-slump-with-apf-1979564368.html?x=0&sec=topStories&pos=2&asset=&ccode=
Health Care Stirs Up Whole Foods CEO John Mackey, Customers Boycott Organic Grocery Store.
Joshua has been taking the bus to his local Whole Foods in New York City every five days for the past two years. This week, he said he’ll go elsewhere to fulfill his fresh vegetable and organic produce needs.
John Mackey’s op-ed elicits boycott of Whole Foods
Customers are threatening to boycott Whole Foods stores after the company’s CEO, John Mackey, wrote an op-ed discussing his ideas for health care reform.
“I will never shop there again,” vowed Joshua, a 45-year-old blogger, who asked that his last name not be published.
Like many of his fellow health food fanatics, Joshua said he will no longer patronize the store after learning about Whole Foods Market Inc.’s CEO John Mackey’s views on health care reform, which were made public this week in an op-ed piece he wrote for The Wall Street Journal.
Michael Lent, another Whole Foods enthusiast in Long Beach, Calif., told ABCNews.com that he, too, will turn to other organic groceries for his weekly shopping list.
“I’m boycotting [Whole Foods] because all Americans need health care,” said Lent, 33, who used to visit his local Whole Foods “several times a week.”
“While Mackey is worried about health care and stimulus spending, he doesn’t seem too worried about expensive wars and tax breaks for the wealthy and big businesses such as his own that contribute to the deficit,” said Lent.
In his op-ed, “The Whole Foods Alternative to ObamaCare,” published Tuesday, Mackey criticized President Barack Obama’s health care plan.
Mackey provided eight “reforms” he argued the U.S. can do to improve health care without increasing the deficit. He suggested that tax forms be revised to “make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance.”
I occasionally go into Tucson’s Speedway Blvd. Whole Foods store. More often than not, I don’t buy anything. Place is just too expensive. But I am interested in what they charge.
Since the beginning of this year, I’ve noticed a lot fewer people in the store. ‘Round these parts, WF is called Whole Paycheck.
Meanwhile, down on Funky Fourth Avenue, there’s the local, member-owned Food Conspiracy Co-op. It’s doing better than it has in years. Matter of fact, it just paid out a patronage dividend to its members.
owner is an idiot.
and most of his crap, he admits is crap, not organic.
Woman sets self on fire, walks around Miami mall.
MIAMI (AP) - A woman set herself on fire at a Miami mall Thursday, then walked around engulfed in flames as shocked shoppers watched, authorities said.
Two men and a woman who tried to help her were hurt, but not badly.
The 43-year-old woman, whose name was not released, doused herself with a flammable liquid at the Mall of the Americas, said Miami-Dade Fire Rescue spokesman Arnold Piedrahita. She had third-degree burns over 75 percent of her body and was found conscious in a parking lot. Authorities do not know why she set herself on fire.
She was air-lifted to a hospital.
Witnesses said she was in a clothing store called Savage Boutique when it happened. Jose Morales, 24, said he was about to pay for earrings for his girlfriend at a nearby kiosk when he heard screams and thought someone had fallen.
When he turned around, he saw the blaze and realized someone was within it.
“This woman is just walking like this, super slow, completely on fire,” Morales said, his arms stretched out at his side to show what the woman looked like as she walked out of the store. “You couldn’t see nothing but fire.”
Morales said witnesses used two fire extinguishers on the woman, who was on fire about two-and-a-half minutes. All of her clothes except her underwear disappeared into ashes.
After the fire was out, Morales said, the woman walked out of the mall and into the parking lot.
The two men injured helping her were treated at the scene while the woman who helped was taken to a hospital.
The mall remained closed as of late afternoon.
“The mall remained closed as of late afternoon.”
…until the barbecue smell clears out…
That has to be one of the craziest stories I have ever heard. Hey, baby, only in Florida.
I thought the woman did this in Russia after domestic disputes with their men?
Some men in India do it to their wives as does afghanistan,iran,iraq in less educated circles.Including douses of bleach in their faces.
“…until the barbecue smell clears out…”
OMG, alpha—that was SO WRONG. And yet I couldn’t help LOL.
well i guess bill collectors will never ever call her to try and collect for a long long long time
Here’s a moral dilemma for you: My personal view is that I do not want to be a burn victim and if I undergo extensive burning my Living Will says no antibiotics to fight infections, no skin grafts, nothing but massive pain killers until I die which hopefully will be sooner rather than later. My choice and I believe I have the right to make it.
My problem is what do I do if I see someone else burning as badly as this woman is? If someone is engulfed in flames should you allow them the quicker death which is what you would wish? Or should you assume that one day they will be grateful for life and you should jump in and help (which is what I would do with any other attempted suicide)? I don’t know the answer. I suspect in the situation my instinct would be to act and save the person, but if given time to think about it I might do nothing to avoid massive pain and suffering. Just curious - anyone know what they would do in this situation or would everyone just try and save her?
(PS, I’m not suicidal but if I were this would be the LAST way I would pick! Jeez.)
True story from the Arizona Slim File:
Earlier this week, I was in a continuing education class with quite a few people from law enforcement and the fire/paramedic service. One of the paramedics described a recent case in which she revived a system abuser (one of those people who’s always calling 911). Comment from one of the sheriff’s deputies: “Why?”
BB&T Said to Be Taking Colonial in FDIC-Brokered Deal (Update1)
Aug. 14 (Bloomberg) — BB&T Corp. is taking over Colonial BancGroup Inc., the Alabama lender whose collapse would mark the biggest U.S. bank failure this year, a person familiar with the matter said.
Colonial, Alabama’s second-largest bank, will be turned over to BB&T in a deal brokered by the Federal Deposit Insurance Corp. as soon as today, said the person, who declined to be identified because the agreement wasn’t public. Montgomery-based Colonial is being shuttered by regulators after an expansion into Florida saddled the lender with more than $1.7 billion in soured real-estate loans.
“This deal absolutely gives BB&T a market they sorely need to be in,” said Bob Patten, an analyst at Morgan Keegan & Co. who met with BB&T Chief Executive Officer Kelly King this week. “They would only buy under an ironclad loss-protection agreement. They don’t want to take any risks in this portfolio.”
The takeover would make BB&T the ninth-biggest U.S. bank by assets, moving it from 11th ahead of Capital One Financial Corp. and SunTrust Banks Inc. Regulators are closing banks at the fastest pace in 17 years amid mounting losses on real-estate loans in the worst economic crisis since the Great Depression.
“The FDIC does not comment on open institutions,” agency spokesman David Barr said in an e-mail. BB&T doesn’t comment on rumors, spokeswoman AC McGraw said. A call to Colonial spokeswoman Merrie Tolbert wasn’t immediately returned.
“This deal absolutely gives BB&T a market they sorely need to be in,”
I’d sure like a credible explanation of this statement. Sounds like they don’t want to be left out of a GS type
TARP feast.
Sen Chuck Grassley voted FOR so-called “death panels” in 2003.
Time Magazine’s Amy Sullivan pointed out last night that, for all of his ardent demagoguery on the so-called “death panels,” Sen. Chuck Grassley (R-Iowa) voted for just such a provision in 2003.
Remember the 2003 Medicare prescription drug bill, the one that passed with the votes of 204 GOP House members and 42 GOP Senators? Anyone want to guess what it provided funding for? Did you say counseling for end-of-life issues and care? Ding ding ding!!
So either Republicans were for death panels in 2003 before turning against them now–or they’re lying about end-of-life counseling in order to frighten the bejeezus out of their fellow citizens and defeat health reform by any means necessary. Which is it, Mr. Grassley (”Yea,” 2003)?
Reps. John Boehner (R-Ohio) and Thaddeus McCotter (R-Mich.), who both claimed end-of-life consultations could result in “government encouraged euthanasia,” also voted for similar policy in 2003.
Just a little politics thrown into todays BITS and BUCKETS.
“There is really nothing evil in letting senior citizens know what options face them as they approach the end of life. We all should be allowed to die with some vestige of dignity”.
(Quote from a sickness care article).
Of course I don’t want some gubmint trained social worker splain’n my options, but that’s just me. Wonder who splain’n Teddy Kennedy’s exit options, to him?
Wonder who splain’n Teddy Kennedy’s exit options, to him? Prolly his bartender, nyuk, nyuk.
tresho, brain tumors are not funny, in any way.
Saw it first hand 2 x.
tresho, brain tumors are not funny, in any way.
Saw it first hand 2 x. Never said they were. Teddy’s current ailment does not exempt him from getting fun poked at him for his other ailments. ‘Show me the way to go home.’
I don’t think that’s its wrong to give counseling on medical conditions and a party having the choice to not be aggressive with medical options if they want ,especially when the
procedure might only get you a few more months of pain and misery before you die .There is nothing wrong with just applying comfort measures for terminal conditions in which the person might have up to six months left . But shouldn’t it be the choice of the patient, or family, or their directives ,rather than a heartless medical panel ,or Private Insurance Company ?
To not even be told about options or what the success rate
is ,is a denial of the liability of the insurance policy .
I know a guy that was told that if he had a operation he had a 60% chance of dying on the table ,and if he didn’t have the operation they didn’t know how long he would live . The guy
made the choice to not have the 250k operation and just live out his life whatever he got . He told me 20 years later he was still living out his life . Not to say that some operations
are not a must have ,or the patient will die .
I also know someone else that took the option of a dangerous operation and survived ,only to die a couple of years later of something else .
But ,I think what everyone fears is that a third party, in bad
faith with money motives ,will make a decision on a life without regard to choice or the true medical conditions. Yes ,maybe it will get down to what you can afford or not ,or how much your willing to shell out to have options ,but currently in my opinion ,the Private Insurance Companies are already trying to push medical decisions to increase their bottom line ,in spite of what might be covered in the Insurance policy . Further , the cost of medical care isn’t justified ,and what other product can be a life or death matter if you don’t have coverage ? What other product do you buy that a person (Doctor ) tells you you need something ,and you get the bill later ?
Don’t know what the answers are ,but health care insurance shouldn’t consume such a high % of the monthly income ,just like real estate should not exceed 20 to 30% of the monthly nut either . Maybe seniors do need to pay more toward Medicare ,however Medicare does cost the seniors and it isn’t free ,and you need gap policies to really cover costly conditions .
Outstanding post.
great post.
personally believe in alternative medicine/natural ways first.
surgery last.
Except for this knee surgery!
So far, the Obamanites’ health care proposal is a PR disaster that makes Hillary-care look like a relative success. The “kill grandma” meme is what has really taken hold of the American psyche.
Long live the… “TrueDeciever’s™”
Like a complete unknown: Bob Dylan frogmarched to collect ID after rookie policewoman fails to recognise scruffy music legend
By Daily Mail Reporter 14th August 2009
Back in 1965 Bob Dylan sang: ‘How does it feel to be on your own, with no direction home, like a complete unknown?’
Now, 44 years later, the world-famous musician got his answer when he was stopped by a police officer who didn’t know who he was.
The 22-year-old officer asked the ‘eccentric-looking old man’ for identification papers after stopping him in the U.S. seaside town of Long Branch, New Jersey.
Bob Dylan
Music legend: Bob Dylan had been taking an afternoon stroll when residents of Long Branch, New Jersey complained of a man ‘acting suspiciously’
Not recognising his name, the officer ordered him into the back of her police car, driving him back to his hotel to check his story.
It was not until she radioed her colleagues at the station to ask who he was, did she learn of her error.
The 68-year-old singer had been in town for a concert with Willie Nelson and John Mellencamp.
He was taking an afternoon stroll through the town’s Latin quarter when town’s police station received a call complaining that a man was acting suspiciously.
Police officer Craig Spencer said: ‘Residents called to complain there was an old scruffy man acting suspiciously.
‘It was an odd request because it was mid-afternoon, but it’s an ethnic Latin area and the residents felt the man didn’t fit in. Lets just say he looked eccentric.
‘We dispatched a young woman officer. She is 22 and unfortunately she had no idea who Bob Dylan was.
‘He was on a walkabout but she wasn’t entirely convinced of his innocence.
‘She took him back to the hotel to check his papers, then she called us to check who Bob Dylan was.
‘I’m afraid we all fell about laughing. If it was me, I’d have been demanding his autograph not his photo ID.
‘The poor woman has taken rather a lot of abuse from us,’ he added.
‘I offered to bring in some of my Dylan albums, but unfortunately she doesn’t know what vinyl is either.’
This is not the first time that the notoriously reclusive singer has been spotted out alone.
He shunned his chauffeur-driven car after a concert in Belfast in 1991, and was captured by a television crew waiting at a bus stop instead.
The music legend once told an interviewer: ‘Being noticed is a burden. Jesus got himself crucified because he got himself noticed. So I disappear a lot.’
‘We dispatched a young woman officer. She is 22 and unfortunately she had no idea who Bob Dylan was.
It’s unfortunate? Why because otherwise he could get special treatment that you and I couldn’t get? Doesn’t seem unfortunate to me. It sounds more like justice, which is supposed to be blind.
I was thinking the same thing. So it’s perfectly fine for some other funny-looking old guy who doesn’t seem to fit in to be harassed by the police, while behaving in a completely peacable manner on a walk?
He was harassed by a 22 yr old female P.O.that gave him a ride back to his hotel?
He was detained; last time I checked, it was not illegal to walk quietly down a public street in the UK. Is operating your feet without a valid driver’s license now illegal?
LOTS of stuff gets you put into jail in the UK now.
what used to be normal activities 20 yrs ago, and long ago are not legal any longer ie: pontificating in Trafalgar Square.
Now you get hauled off. Cameras everywhere, EVERYWHERE.
Two thoughts:
- Yep. Justice is supposed to be blind. They act as if celebrities should get an automatic “get out of jail free” card. Wrong.
- WTF did he do? Last time I checked “acting suspiciously” was not only not a crime, but wasn’t even grounds for being “picked up” by the police. Either there’s more to the story that’s not being reported, or Dylan has grounds for harassment it seems to me.
Police officer Craig Spencer said: ‘Residents called to complain there was an old scruffy man acting suspiciously.
Geez, you guys, this happens to me ALL the time…especially when I’m in “The O.C.” or up north in Novato/Marin (there, they used to think I was Jerry Garcia, I’s just smile and say, no I’m Jerry…his brother.
)
My fear is that one day, I’m gonna instinctively reach down to itch my balls and then the “military trained cops” are just going to shoot to kill, successfully!
(they just killed a homeless 25 yr old man “acting suspiciously” just down the street from my in-laws in Orange, CA…of course there’s a large park (sleeping bushes) next to a Catholic church (free meals) 200 feet from where they killed him (”he was unarmed, but “acted aggressive” …bang!)…guess the cops forgot about that…I really don’t know why police dept’s around the good ole US of A spend so much US taxpayer monies on taser’s when their first response is to shoot bullets first. Guess it would have been to much trouble, time & effort to let a K9 chew on him for awhile…that would most likely bring a personal/city/county lawsuit…
Scary. all of it.
Funny that this story should crop up during the 40th anniversary week of The Most Meaningful Rock Concert Ever.
I am, of course, referring to Woodstock. And, IMHO, I can’t wait for this week to be over.
Heard more than enough about Woodstock when I was a kid.
“Bob Dylan” is an alias anyway. His real name is Robert Allen Zimmerman.
I wonder what name is on his driver’s license or other ID?
I don’t believe, in Zimmerman.
Good thing he wasn’t black! Then it’d be his fault for ‘gettin’ mouthy’ with a hard working cop!
Yawning got the one man thrown into jail recently.
OMG, what next, passing gas makes you a felon?
Rep. Sheila Jackson-Lee: Town Hall Phone Call Not Rude
Scott Ott for ScrappleFace
(2009-08-14) — Rep. Sheila Jackson-Lee, D-TX, who appears in a viral video making a cellphone call at a town hall meeting while a cancer survivor was trying to ask her a question, today explained that she was not being rude to the voters in the room.
“I didn’t know the answer to the question,” said the lawmaker, “So I decided to use one of my lifelines to ask an expert who had actually read the health care reform bill. As everyone knows, I’m entitled to two lifelines and I only had to use one.”
Asked about reports that the House member had used ‘her lifeline’ to phone a K Street lobbying firm, Rep. Jackson-Lee said, “If you want to hear from someone who read the bill, why not talk to one of the people who wrote it.”
“If you want to hear from someone who read the bill, why not talk to one of the people who wrote it.”
The really comical thing about this is that I’m virtually certain she does not see the irony of her statement.
Not to make light of the situation, but the consumer may be toast:
Woman on fire: Onlookers use fire extinguishers Thursday to put out the flames after a 43-year-old sets herself ablaze in the Mall of the Americas in Miami.
The woman was on fire for about two-and-a-half minutes and suffered third-degree burns over 75 percent of her body, said a Fire Rescue spokesman.
She was was found conscious in a parking lot and was air-lifted to a hospital soon afterwards.
Two men and a woman who tried to help her suffered minor injuries.
Authorities do not know why the woman set herself on fire. Witnesses said she was in a clothing store called Savage Boutique when it happened.
Jose Morales, 24, said at a nearby kiosk when he heard screams and thought someone had fallen. When he turned around, he saw the blaze and realized someone was within it.
‘This woman is just walking like this, super slow, completely on fire,’ he said. ‘You couldn’t see nothing but fire.’
Morales said witnesses used two fire extinguishers on the woman, who was on fire about two-and-a-half minutes. All of her clothes except her underwear disappeared into ashes.
After the fire was out, Morales said, the woman walked out of the mall and into the parking lot.
The two men injured helping her were treated at the scene while the woman who helped was taken to a hospital.
The mall remained closed as of late afternoon.
Technocratic politics = The illusion of imminent crisis, the pretense of public consensus, and the suppression of open debate.
To be fair, Obama certainly did not invent it.
False flag events, propaganda, and disinformation have been around for ages.
Today it seems to be so prevalent that you need to automatically reject whatever notion they are trying to project and look very carefully behind the curtain.
Question authority - they are masters of distraction
“To be fair, Obama certainly did not invent it”.
To be clear I never eluded to B.O. and would never accuse Barry of ‘inventing’ anything, he certainly has not. He is very good at reading aloud, his handlers are no better or worse than anyone else.
He is finding out that mere words read from a teleprompter are not all that it’s takes to con the public though.
He may need to come up with a better scam.
“…Technocratic politics = The illusion of imminent crisis, the pretense of public consensus, and the suppression of open debate.”
Another “Drill Here!…Drill Now! …kinda moment!
Hotel rates are sure slipping in San Diego!
AP Weird News
A luxury resort in San Diego is offering rooms for $19 a night–if you don’t mind sleeping in a tent.
The Rancho Bernardo Inn boasts three pools, a spa, and a golf course. It typically charges more than $200 a room, but business is down, so through Aug. 31, guests can get a ’survivor’ package that lowers the rate for each amenity they give up.
For $19, guests give up breakfast, air conditioning, lights, sheets, and even the bed.
Oh, and bring your own toilet paper.
General manager John Gates says the hotel hopes people who try the promotion will return at full price.
General manager John Gates says the hotel hopes people who try the promotion will return at full price. Who needs a tent with no bed? What they left out was that the ‘room’ was on the roof of the hotel.
Less sex, more TV idea aired in India.
UTTAR PRADESH, India (CNN) — On World Population Day this year India’s new health and welfare minister came out with an idea on how to tackle the population issue: Bring electricity to every Indian village so that people would watch television until late at night and therefore be too tired to make babies.
Could the remote control be a birth control method?
That statement raised eyebrows across this vast country — but what are the realities and reactions from families who make up the second largest population in the world?
At 80-plus years old Omar Mohammed has never heard of population control.
He lives in India’s most populous state Uttar Pradesh and has certainly done his part in contributing to India’s burgeoning population.
“Now you see I have 24 children, 13 boys and 11 girls,” Omar says.
Omar believes only God can decide how many children you should have. He lifts his hands to the sky and says: “This is His command. It’s not my doing, it’s His doing.”
On the other hand there’s the Arora family in the capital city of Delhi. They have two children.
“You can’t even get enough water or electricity now. So its advisable that people have only two children and then they should stop having more kids.” mother Anjana Arora says.
LOL! That’s no flat screen it’s an oven door!
Fake plasma TVs just latest in con artist ploy
Friday, August 14, 2009 S.F.Gate
“Rocks in a box” used to mean exactly that - rocks or bricks used to weigh down a new appliance box, and sold to anyone gullible enough to buy them.
These days, scam artists have updated their product offerings to meet changing consumer demand: game stations, laptops and plasma TV screens.
Fakes of these costly electronics can be purchased off the street just about anywhere in the Bay Area, said Inspector Marty Dito of the San Francisco Police Department’s economic crimes unit.
Recently, Dito said, police officers recovered a phony plasma TV screen during the search of a parolee’s home “with a Best Buy sticker on it.”
Police connected that TV to another case in which a victim had been lured to a location to purchase a TV and was robbed upon his arrival.
Earlier this week in San Leandro, police recovered an oven door gussied up to resemble a 37-inch plasma TV. The screen was obscured by Bubble Wrap and stickers plastered on the front of it. But upon closer inspection, the silver trim around the screen was aluminum foil.
Acting on a tip from a citizen who was approached to purchase the TV in a San Lorenzo Wal-Mart parking lot, police officers stopped Anthony Myles, 52, of Richmond and confiscated the mock appliance, oven door. Myles was released because possession of such items is not a crime, said San Leandro police Lt. Pete Ballew.
“Acting on a tip from a citizen who was approached to purchase the TV…”
“Myles was released because possession of such items is not a crime”
How is mis-representing the goods offered for sale not a crime???
My respect for Bair keeps growing as she stands up to the bullies by voicing her opinions publicly in spite of attempts to shush her.
I wish more of our public servants had her backbone.
http://finance.yahoo.com/news/US-official-parts-of-apf-4158324710.html?x=0&sec=topStories&pos=5&asset=&ccode=
I like Sheila. And I also like Elizabeth. As in Warren.
Me too!
Happy 232 birthday Hans Christian Ørsted.
He’s not as famous as Darwin or Newton, but if you’ve ever used a modern gadget, chances are you have this 19th-century Danish physicist to thank—and what better time than on his 232nd birthday?
http://news.nationalgeographic.com/news/2009/08/090814-hans-christian-orsted-oersted-who.html
He picked a great day for his birthday
Goodness, how many candles? Call the fire dept!
PB,Is it your birthday too PB?
If so, HAPPY BIRTHDAY, if not, heck, HAPPY BIRTHDAY anyway!
I once bought a VCR from the back of a pickup in Newark, CA. Seller was an African American gentleman who approched me at a gas station near Dumbarton Bridge. Showed me the Sony VCR box and said I could have it for a 100 bucks, I said I only had 40 bucks. He grudgingly put the box in my car and I handed him the money. His last words to me were “Oh, Oh look out it’s a police car”, as I turned around he was gone.
That was a very cheap but valuable lesson.
Forgot to mention when I got home and took the brick out of the box. I wasn’t that upset and my co-workers and I had a laugh.
Geez rentor I never seen an African American gentleman selling stuff that fell off trucks…its always a ghetto “n” type…