August 26, 2009

Bits Bucket For August 26, 2009

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Comment by wmbz
2009-08-26 04:14:18

Homebuilders Buying Land After Three Years of Cutting Inventory.

Aug. 26 (Bloomberg) — Signature Properties has been trying since 2005 to sell 4,000 finished lots in its Fiddyment Farm community, a former pasture and pistachio orchard northeast of Sacramento, California.

The developer sold 41 sites in April to Meritage Homes Inc. for $66,000 each, and another 41 in June to Hovnanian Enterprises Inc. for $68,000 apiece. This month, they got their best offer yet — $103,500 each for 77 sites.

Signature Properties said no.

“We decided to build it out ourselves,” said John Bayless, president of the Sacramento division of Signature Properties, a closely held developer in Pleasanton, California. “Our feeling is, ‘The tide’s turning. Let’s build ‘em.’”

Homebuilders that spent the past three years selling off land and writing down the value of property holdings are scouring markets in Sacramento, Phoenix, Denver and Orlando — cities synonymous with the real estate bubble — looking for deals on ready-to-build lots as they prepare for a rebound.

Writedowns and write-offs by 14 of the largest publicly traded homebuilders totaled $28.5 billion since the start of 2006, according to a July 15 report by Fitch Ratings.

Home prices in 20 U.S. cities fell in June at a slower pace than forecast. The S&P/Case-Shiller home-price index declined 15.4 percent from a year earlier, the smallest drop since April 2008, the group said yesterday. The gauge rose from the prior month by the most in four years.

Like a Shark

New home sales climbed 11 percent in June, the biggest gain in eight years, and housing starts were the highest since November. Single-family home starts increased again in July, for the fifth straight month, the U.S. Commerce Department reported on Aug. 18. July new home sale data will be released today.

“Like a shark has to keep swimming or it’ll die, it’s the same thing with builders,” said Kathryn Boyce, regional director in Sacramento for Hanley Wood Market Intelligence, a real estate research company based in Costa Mesa, California. “They have to keep building or they’ll die.”

Comment by lavi d
2009-08-26 06:10:31

Signature Properties has been trying since 2005 to sell 4,000 finished lots in its Fiddyment Farm community

I saw “FiddyCent Farm community”.

 
Comment by lavi d
2009-08-26 06:13:08

“They have to keep building or they’ll die.”

Or, to put it another way, “They’ll die building.”

Comment by rms
2009-08-26 07:32:48

Reminds me of an sign outside an Australian restaurant: “Eat Here Before We Both Starve!”

Comment by Hwy50ina49Dodge
2009-08-26 12:56:36

:-)

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Comment by DennisN
2009-08-26 13:35:08

That was the place in Willow Glen (SJ), right?

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Comment by SV guy
2009-08-26 15:54:09

“That was the place in Willow Glen (SJ), right?”

On Lincoln Ave. if I remember correctly.

 
 
 
 
Comment by aNYCdj
2009-08-26 06:20:43

They have 4000 sites sold only a hundred….yet they sold them for a profit at $66-68K … (unless they were just about to file bk and it was a desperation sale)

It the level of desperation that you have to buy or build is what i still don’t get after all that’s happened.

———————————————————————
$103,500 each for 77 sites

Comment by DinOR
2009-08-26 07:13:18

But you have to ask yourself, are they building 3,500 s/f floorplans or… are the builders gravitating toward homes that people could actually afford w/ conventional financing?

Given SAC was Ground Zero for the West Coast, I’ll chose to view this as a positive. It reaffirms my suspicion that all of the unsold McMansions are indeed Phantom Inventory and will continue to be ignored.

Comment by aNYCdj
2009-08-26 07:39:02

Yes but $100K for a lot is hardly affordable, unless they put a double wide on it.

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Comment by DinOR
2009-08-26 09:09:25

aNYCdj,

And trust me, that wasn’t lost on me. Hell, even at 66k, that’s starting to flirt w/ bubblicious all-over-again! ( Try 40k and that’s on an improved lot )

Again, that may or may not be a reality in Cali, but that is what they should be. Remember, this is how the builders made their money all throughout da’ Boom. The profit actually came from doping up the lot prices.

They’ve figured out how to get their money up front. And they likey.

 
Comment by GrizzlyBear
2009-08-26 11:35:32

“Yes but $100K for a lot is hardly affordable, unless they put a double wide on it.”

This is a crucial point that builders and developers overlook. Most families can only afford $100k homes, so the dirt is still grotesquely overpriced. I just read about a proposal to extend the tax credit to buy homes, and also loosen the restrictions on income and the first time home buyer status, so basically anyone who buys a home qualifies. This cash-for-cottages will help to prop up sales. This bust’s going to drag on for years…

 
Comment by DennisN
2009-08-26 14:55:14

That lot price may include permits and “impact fees” charged by local governments. You could charge $0 for the land and still have to cough up the other charges. It’s unclear whether the price for the improved lots already is burdened with these fees paid by the original developer.

 
 
Comment by sfbubblebuyer
2009-08-26 08:34:20

I suspect they’ll be building 2000-2400 sq ft houses. I doubt very much people will go back to buying brand new 1100 sq ft houses. And honestly, a smartly built brand new 2000 sq ft house is cheaper to heat and cool than a 60 year old 1100 sq ft house, at least out here.

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Comment by ET-Chicago
2009-08-26 09:29:20

And honestly, a smartly built brand new 2000 sq ft house is cheaper to heat and cool than a 60 year old 1100 sq ft house, at least out here.

Ah, yes, but the caveat smartly built makes all the difference, doesn’t it? Even when solutions are low tech — siting a building to maximize natural light and airflow, for example — developers rarely pursue options that aren’t profit-driven.

 
Comment by Jerry
2009-08-26 09:31:15

Most older houses with few exceptions were built much better than the fast put up subdivisions “tract” houses. Go look now at those nice 2000 sq. ft wonders with everything falling apart! No . Give me a older house that I can call a home.

 
Comment by DinOR
2009-08-26 11:35:55

Et-Chicago,

Bingo! It’s more about the most efficient way to shoe horn lots in to max out ROI. And that’s fine, but let’s not pretend taking advantage of natural elements played a part in the design.

In fact, I’m working hard to understand these aspects as well as learning how to create “micro-climates”. Yes, I understand that if I like a warmer, drier climate all I need to do is pack up and move to the desert.

Had I done this in 2005, I would now be found strung up in the garage of my overpriced POS home in Las Vegas? What “I” want to do is create an environment where people say “Gee, why is it always so much less windy/nicer/warmer here?” in a place where you’d least expect it! Now ‘that’ is an accomplishment!

 
Comment by sfbubblebuyer
2009-08-26 11:42:36

I’m not claiming that Toll Brothers etc. put together smartly built houses. I’m saying that a well built house of today is more energy efficient than a well built house of 60 years ago, especially in coastal california where it used to cost more to put insulation in a house than you would save in heating/cooling. :D

What I’m saying is that I doubt very much we’re returning to a brand new 1100 sq ft 3/1 house any time soon.

 
 
 
 
Comment by DennisN
2009-08-26 07:10:47

It’s really odd that they see a demand where Fiddyment Farms is located - north of Roseville towards Lincoln.

www dot fiddymentfarms dot com

The Lincoln area is packed with old-coot planned communities, e.g. Del Webb’s Sun City Lincoln Hills. My sister lives nearby in Rocklin. Not the kind of place I’d like to relocate to for retirement.

Comment by SanFranciscoBayAreaGal
2009-08-26 10:23:17

I hear you there. Ugly, ugly, ugly.

 
 
Comment by Professor Bear
2009-08-26 18:02:23

It’s great to hear the builders are snapping up land in California, right at the point when assessments have dropped for the first time since 1933. May they all enjoy eating some of the largest land price declines since the Great Depression.

 
 
Comment by wmbz
2009-08-26 04:20:07

Where oh where is the ‘move up’ buyer?

Mortgage applications rise as refinancing demand jumps.

NEW YORK (Reuters) - U.S. mortgage applications rose for a second straight week, with demand for home refinancing loans rising to its highest level since early June, data from an industry group showed on Wednesday.

Applications for loans to buy a home, an early indicator of sales, rose slightly, but nevertheless gained for a fourth consecutive week. The trend bodes well for the hard-hit U.S. housing market, which has been showing signs of stabilization.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Aug 21 increased 7.5 percent to 566.4.

Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate LLC, in an interview with Reuters, said that while recent data on home sales and prices point to stabilization, certain consumers are missing from the market.

“For the market to stabilize permanently we are missing one key element and that is the move-up buyer,” said Gillespie, who is based in Parsippany, New Jersey.

The move-up buyer is a homeowner who chooses to move to a larger home due to a lifestyle change such as a marriage, an addition to their home, a job promotion or a job transfer, he said.

“Once that move-up buyer is back in the market then we will see a true long-term stabilization of the market,” he said.

Comment by az_lender
2009-08-26 04:28:31

For every wannabe move-up buyer, there are half a dozen wannabe move-down buyers.

Comment by jeff saturday
2009-08-26 05:37:54

The house I am renting is being sold on a short sale. Twenty days and twenty showings. Place needs $60,000 worth of work, listing agent knows it because I showed and told him everything. I can`t say anything unless I am asked, 2 did and you should have seen the look of shock on the faces of those 2 realtors as I listed and priced the problems with the house, priceless. The LL who`s brother and father have already short sold their houses with the same realtor recommended him highly. With the $180,000 my LL is walking away from with dad and bro, I am guessing this one family is walking away from about 5 to 6 hundred grand. But from what I am seeing there is no shortage of people chaseing that $8,000 cash for junkers, IMHO, if they don`t continue this cr@p after November at least SE Fla. is in for a nice drop. I have a bunch of great realtor stories but I have got to get going.” You better get a house now, I`d hate to see you lose that $8,000.”

Comment by Skip
2009-08-26 07:54:20

Twenty days and twenty showings

That would be a great name for a movie.

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Comment by Hwy50ina49Dodge
2009-08-26 09:51:42

+1 :-)

 
 
Comment by GrizzlyBear
2009-08-26 11:41:00

Make no mistake about it- the cash-for-cottages program WILL be extended, and there’s a distinct possibility that the dollar amount will be raised, and the restrictions lifted meaning one doesn’t need to be a first time buyer, and income level is of no consequence.

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Comment by joeyinCalif
2009-08-26 04:37:17

“Once that move-up buyer is back in the market then we will see a true long-term stabilization of the market,” he said.

Not to pick nits, but it seems to me a market with lots of move-up buyers is not merely stabilized, but is actually a growth market.
I give it 8 or 10 years.

Comment by DinOR
2009-08-26 07:18:20

joeyinCalif,

I tend to think the NAR “pulled forward” so many move-up buyers it will take a long, long time for that end of the market to show any signs of life.

When you take 20-somethings in droves from apts. -directly- to dream homes just b/c “rates are low” ( you kind of have a tendency to do that? )

Comment by joeyinCalif
2009-08-26 07:56:09

yup.. Either the whole market moves “up” while new entrants fill empties at the bottom end, or none of the market moves for long…

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Comment by Neil
2009-08-26 09:23:01

Its been noted that many buyers out there are ‘one and done.’ My wife and I plan to do that. Why pay the nearly $100k in costs to fix up a home for sale, 6% loss, moving costs, fixing up the new place, etc. it takes to move from an owned home to a new owned home?

‘One and done’
Do not expect a significant move up market for 20 years. I’m serious. That model is broken.

Got Popcorn?
Neil

 
Comment by joeyinCalif
2009-08-26 11:18:24

Without the interference of some black swan, I suspect the general economy (not including real estate) will recover and start growing again long before the next 10 years have passed, and today’s hordes of FBs will thus have both the time and opportunity to heal financially (job availability) as well as get over setbacks like personal bankruptcies (7 years?), all things combining to produce some appreciable housing activity. But it may take 15.. 20.. It’s just too early to do more than guess, imo.

 
Comment by sfbubblebuyer
2009-08-26 11:47:48

My wife and I are “one and done” as well, Neil, unless circumstances change so much that we’re moving out of the Bay Area.

If we want a bigger house we’ll save up for a nice addition.

 
Comment by DinOR
2009-08-26 11:51:18

joeyinCalif,

And perhaps that is -exactly- what the REIC fears most? An economy that somehow manages to pull itself up by it’s own bootstraps with or without them?

That’s something they simply refuse to stand for! Thus all the bending over backwards on their behalf. Again, I think at some point “shoring up” their house of cards will no longer be practical and we’ll all have to move on?

I already have.

 
Comment by lavi d
2009-08-26 13:02:58

And perhaps that is -exactly- what the REIC fears most? An economy that somehow manages to pull itself up by it’s own bootstraps with or without them?

I just realized - this looks a lot like the recording industry trying to prop up the price of a music CD.

 
Comment by DinOR
2009-08-26 14:08:14

lavi d,

Or kick and moan about pirating, downloading etc. In fact you could say NAR used the music ind. as their model?

 
Comment by Neil
2009-08-26 21:04:49

sfbubblebuyer,

I know quite a few people who bought pre-bubble planing to sell and upgrade who instead upgraded. Its part of why I believe the move up buyer model will take a very long time to recover.

I see more an ex-owner (foreclosed) renting to get back in.

We’ve never had a housing ‘buying panic’ as we had 2003 to into 2006. That has eaten quite a bit of seed corn.

Oh, normally the ‘move-up market’ is 70% of sales. My 20 years is for when it is back to 2/3rds of the market.

Got Popcorn?
Neil

 
 
 
 
Comment by darthrealtor
2009-08-26 05:45:18

The only thing moving up will be interest rates. The final nail in this propped up farce of economy is going to be driven very soon.

Comment by michael
2009-08-26 06:32:52

i agree…i just don’t understand how much longer the lower rates can continue.

if anyone could explain it to me…i would greatly appreciate it.

Comment by Bill in Los Angeles
2009-08-26 06:51:57

I’m anticipating higher interest rates myself. I’m staying away from T-notes until I see them above 6%.

0.46%-yielding 52-week T-bills are just dandy for me, until then.

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Comment by Bill in Carolina
2009-08-26 12:54:55

Mike Shedlock of “Mish’s Global Economic Trend Analysis” explains why we won’t have inflation for at least the next couple of years. I have been following his posts for several years, and for a long time I didn’t feel his predictions would pan out.

According to him, with industrial capacity utilization hovering below 65%, and with wages still flat or falling, there’s little or no near-term likelihood of inflation.

 
 
Comment by darthrealtor
2009-08-26 07:17:05

Michael,

Low interest rates are a result of the most blatant ‘monetize the debt’ policy ever. The Fed is directly buying US Treasuries directly to keep yields low (and the government solvent) and also buying Fannie and Freddie mortgage paper to help keep mortgage rates artificially low. The bottom line is that the Fed will get a bunch of junk that it will write off and we’ll get a dollar with less purchasing power. Yippee.

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Comment by michael
2009-08-26 07:23:29

where does the Fed get the money to buy all those treasuries?

do they literally print it? or is it borrowed into existence?

if it’s borrowed…who does the Fed borrow money from?

does borrowing money into existence have the same inflationary outcome as printing it?

if so…then where is the inflation?

just some questions i’ve been wanting to ask for sometime now.

 
Comment by az_lender
2009-08-26 07:32:34

michael, I think the reason why we don’t see the price inflation yet is that the money the Fed is “borrowing into existence” doesn’t quite make up for the amount of imaginary money that was previously “borrowed into existence” and which is now disappearing with the massive defaults on mortgages.

 
Comment by packman
2009-08-26 08:02:27

if so…then where is the inflation?

Right here.

 
Comment by michael
2009-08-26 08:13:32

so…from 2000 - 2006 we did have huge inflation. it just wasn’t in the CPI because the CPI uses rents and not the cost of housing.

the bail outs we are experiencing now will just substantiate the inflation we experienced in housing prices from 2000 - 2006 and manifest itself as price inflation…or as inflation in equities (based on the DOWs recent rally).

basically the inflation has always been there…it was just a shell game…moving it from bubble to bubble.

does that sound about right?

 
Comment by darthrealtor
2009-08-26 08:21:37

Michael,

The question you are asking is like taking the Red Pill in the Matrix. Do you really want an answer?

The federal reserve is in the business of making money from nothing.

In essence all the Fed has to do to create money is push some buttons on their computers and then poof….instant money is created. They can then use that money however they please (prop up failing banks, buy treasuries, buy other paper assets, etc, etc). Some of that money ends up into the actual ‘paper money’ system where it is printed into existence. Monetary inflation will most likely occur when the Fed is forced to create too much money like what is occuring now (or inflation may occur as a result of folks expecting inflation to occur…a vicious cycle).

Numerous folks would like an audit of the Federal Reserve to find out exactly what institutions they have been propping up, but don’t hold your breath. We are all fundamentally slaves to the US banking system and it’s fiat currency.

That’s my dime store answer. I could go more tin-foil hat on you and espouse some of my theories about the outcomes of Central Banking and Fractional Reserve lending (like the fact that these systems always end up turning it’s participants into debt slaves), but I’ll spare you.

Look up ‘The Creature From Jekyll Island’ on Amazon for a very fascinating look at the US banking system.

 
Comment by packman
2009-08-26 10:18:12

so…from 2000 - 2006 we did have huge inflation. it just wasn’t in the CPI because the CPI uses rents and not the cost of housing.

the bail outs we are experiencing now will just substantiate the inflation we experienced in housing prices from 2000 - 2006 and manifest itself as price inflation…or as inflation in equities (based on the DOWs recent rally).

basically the inflation has always been there…it was just a shell game…moving it from bubble to bubble.

does that sound about right?

Yep - pretty much. In reality “inflation” is way more complex than people think. Official CPI numbers are a weak attempt to measure and present them - because for instance they don’t properly account for all things. Even though published CPI wasn’t that high 2000-2006, real price inflation was happening like crazy, in terms of how much money was being spent by people, and how much new debt was being created.

But after 2006 now - the prices on that same asset (houses) are of course crashing - though as you can see not down to the 2000 level; over time it’ll work its way back down to where it was if we would have had normal 3-4% yearly gains. If debt levels, which rose hugely in correspondence with home price levels in 2000-2006, were also crashing back down to “normal” levels, then all would be relatively good with the world, at least in terms of returning to a normal inflationary balance. However we see that that’s not happening. Mortgage debt levels remain incredibly high, and as a result home equity rates have been plummeting.

So prices haven’t changed a lot, but now we’ve got a huge amount of extra debt. So if debt = money, then WTF is going on? Right now there is a huge amount (somewhere in the neighborhood of $5-7 Trillion) of bad debt still outstanding that just hasn’t been written off yet. Much of this is now owned by the Fed (via MBS purchases) and much still by the banks (as enabled by the FASB removal of mark-to-market a few months ago) and Fannie and Freddie and Ginnie.

So now what happens? Something’s got to give. Somehow the gap between the now-low-prices and the still-high-debt has to be closed. I think the only way this can be accomplished is by raising prices again. This can’t be done though in a depression environment, with high unemployment and decreasing wages. So you get what we have now - the government debt is now spiking, with that newly-created money going back out into the world as stimulus money. That stimulus money (in the form of direct stimulus or of bailouts) stems the housing price declines, and is in fact now triggering some increases.

As a result:
- Rising home prices will stem the tide of defaults (we haven’t seen it yet - but we will soon I’m sure
- Huge bank profits from the still-huge amounts of still-good debt will help stem the bleeding of the existing bad debt

That’s the theory anyhow. Basically it’s an attempt at a 10-year swap of government debt (supposedly good) for bad mortgage debt.

The problem is this - the bulk of the government spending isn’t directly in housing - it’s spread across a whole mix of sectors (autos, infrastructure, consumer spending, health care, etc.). In order to re-inflate housing prices again they have to inflate *all* sectors. That’s why I think we have big-time general price inflation in our future.

 
Comment by james
2009-08-26 14:06:08

Our sense for inflation is really bad. There are big changes in velocity of money. Basically if you create 10T dollars but it sits in reserves, it doesn’t do anything.

Right now a lot of reserves are being created.

We may increase reserve requirements in the future permanently lowering velocity so that money may never show up.

Also velocity of money, or how fast we are spending, is going down. Again, hard to predict where it will end up in 2-3 years, let alone ten years.

The other thing is the amount of money may have seemed to increase but in fact credit may have been destroyed at a similar rate, it doesn’t manifest in prices.

Also the Fed and treasury are creating a lot of money. However, like with an increase in taxes coupled with an increase in government spending, does any of the money appear outside the closed loop? Basically you could create a bunch of money, pay it out in dividends and tax it right back to the government. What happens then? It doesn’t create any inflation there either. The delta between the payout and the tax is what gets pumped into the system.

There are a lot of potential outcomes here. Hence its a good idea to stay liquid and not get locked into long term low rate returns.

 
Comment by dude
2009-08-26 15:42:14

Another way to respond to michael’s questin about where the Fed gets the money. Darthrealtor’s response was also good.

The Fed pays for the debt instrument it is purchasing, entering a debit on its electronic ledger.

The Fed records the purchase of the debt instrument it is purchasing, entering a credit on its electronic ledger.

At the end of the day the equity position is even, and since they don’t need to show anyone the books or mark assets to market they just say that they’re solvent and it is so.

 
 
 
 
Comment by salinasron
2009-08-26 06:12:42

“The move-up buyer is a homeowner who chooses to move to a larger home due to a lifestyle change such as a marriage, an addition to their home, a job promotion or a job transfer, he said.”

How does that square with all the baby boomers going into retirement who will want to move on down?

Comment by az_lender
2009-08-26 07:00:53

My point exactly, when I said there would be 6 move-downs for every 1 move-up.

 
 
Comment by X-philly
2009-08-26 06:29:33

The move-up buyer is a homeowner who chooses to move to a larger home due to a lifestyle change such as a marriage, an addition to their home, a job promotion or a job transfer, he said.

Job promotions are so 2006.

Comment by ecofeco
2009-08-26 11:24:16

Along with raises, benefits, job security and pensions.

Remind me why I would want to “move up.” Let alone “how.”

 
Comment by GrizzlyBear
2009-08-26 11:51:19

“Job promotions are so 2006.”

Yes, they are. It’s job extinctions now.

 
 
Comment by FP
2009-08-26 10:03:26

Re-Fi applications rose, but where in the stats it actually that says approval rates. I also see “Pending home sales” in some reports but what is the actual close rates.

When you look at coporate revenue, revenues technically is something that actually closed. Not in lay-away.

Also, I can see why there are alot of re-fi apps. If your in deep creek with an Option Arm, Sub-Prime, or some stupid mortgage it makes sense to refinance. But I bet you in most cases, most of them will be turned down. I also think people that actually have equity is trying to squeez every last drop out of it.

Scam, scam, scam, spend, spend, spend, working the system, working the system, working the system.

Move-Up buyer? who are they in todays current economic state with high unemployment.

 
 
Comment by Michael Fink
2009-08-26 04:25:09

FL has a 99.9% chance of falling prices into 2011:

Mortgage insurer PMI Group said Tuesday there’s a 99.9 percent chance that property values in Palm Beach County and the Treasure Coast will fall further by the first quarter of 2011.

PMI says three dozen metro areas have a 99.9 percent chance of falling prices. Those areas include nearly all of Florida and huge swaths of California and Arizona.

http://www.palmbeachpost.com/business/content/business/epaper/2009/07/08/0708housingvalues.html?cxntlid=inform_artr

Remind me again why I should even consider buying now?

Comment by DinOR
2009-08-26 07:20:38

Michael Fink,

Yeah but that’s just in “three dozen metro areas”.

 
Comment by Professor Bear
2009-08-26 07:27:51

Economic Report

Aug 26, 2009, 10:01 a.m. EST
New-home sales jump nearly 10% in July
Up four months in a row, sales are highest since September

By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) - Sales of new homes rose for the fourth month in a row in July, rising an estimated 9.6% to a seasonally adjusted annual rate of 433,000, the Commerce Department reported Wednesday.

The seasonally adjusted sales rate was the highest since last September. The fourth consecutive increase in sales adds to the growing body of evidence that the market is finally growing again after sinking to a record-low sales pace of 329,000 in January.

Government statisticians have low confidence in the monthly report, which is subject to large revisions and large sampling and other statistical errors. In most months, the government isn’t sure whether sales rose or fell. The standard error in July, for instance, was plus or minus 13.4%. Read the full government report.

The government says it can take up to five months to establish a new trend in sales. Over the past five months, sales have been on a 373,000 annual pace, up from 358,000 in the five months ending in June.

Sales in April, May and June were revised higher. Sales increased 9.1% in June to a revised 395,000 pace.

Sales in July were 13.4% lower than a year earlier.

You don’t say?

Comment by dude
2009-08-26 15:45:26

By those numbers it appears these numbskulls are STILL building about 100K home/annum than they are selling.

 
 
Comment by Professor Bear
2009-08-26 07:30:08

“FL has a 99.9% chance of falling prices into 2011″

How about if we agree to round to the nearest whole number, and call it an even 100% chance of falling FL prices into 2011?

Comment by Michael Fink
2009-08-26 08:48:58

Sound’s fair and reasonable to me. :)

Really, it’s almost a sampling error that they even put the .9 (instead of just 100%). I guess the .1% percent chance of prices rising involves a hyperinflation scenario? Assuming our currency doesn’t fall through the floor, the chance of prices falling is 100%.

Although, in some areas of FL (not SE yet) prices are back in line with incomes. The problem in that there’s a horrific glut (Lee county comes to mind) that can’t be filled at any price. The only solution is bulldozing, there simply aren’t enough people who want to live there to soak up all the excess inventory.

Comment by Professor Bear
2009-08-26 09:26:50

“The only solution is bulldozing, there simply aren’t enough people who want to live there to soak up all the excess inventory.”

I have to call bullsh!t on this idea. I even might be willing to live there if I could buy one of these homes at a price of $1000 or less.

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Comment by packman
2009-08-26 10:26:30

Don’t forget to factor in ongoing costs - taxes, maintenance, utilities (not cheap in Florida), etc.

Would you for instance be willing to buy a Maserati for $1,000 - if you knew you would have to pay $20,000 per year in insurance and maintenance costs? I wouldn’t.

 
Comment by Shizo
2009-08-26 10:31:20

Are you sure you want that ever increasing property tax bill? :)

 
Comment by Michael Fink
2009-08-26 11:08:10

Professor,

Maybe, but you have to realize that a house you buy for 1K is going to have gawdawful neighbors, no services, and will quickly become a ghetto. I doubt you’d want to live there (regardless of the home itself) for any length of time.

The problem is that there aren’t enough middle class buyers out there for these things. Sure, you can give them away for free, but that reduces the value of these things to 0 (long term) because of the caliber of people you’re going to get when giving them away/selling them for a insanely low price.

Also, there’s no work near these homes; and likely never will be. These things are just white elephants, they have little/no demand.

 
Comment by lavi d
2009-08-26 14:33:51

gawdawful neighbors, no services, and will quickly become a ghetto. … because of the caliber of people you’re going to get when giving them away/selling them for a insanely low price.

Also, there’s no work near these homes; and likely never will be

Wow, no jobs, crappy neighbors, deteriorating environment - I’ll take three! Put ‘em on my credit card.

 
 
 
 
 
Comment by az_lender
2009-08-26 04:32:55

Had to laugh at several articles yesterday interpreting latest Case Shiller as an emerald-green shoot. QOQ change was plus two point something percent, the first positive QOQ change in three years. House prices down 31% from peak. Down seven point something percent QOQ from Q408 to Q109. That wonderful Spring Bounce of plus two point whatever led to a lot of positive headlines. Who’s kidding whom !?! …oh, and none of the 20 cities in the index had a positive YOY change in Q209. But Cincinnati Business Courier says “Case-Shiller: Home Prices on the Rise” (transation: buy now or be priced out forever).

Comment by NYCityBoy
2009-08-26 05:18:44

Eddie must write for the Cincinnati Business Courier. Kudos!

Comment by Eddie
2009-08-26 05:40:50

Boy,

Your obsession with me is a little creepy.

Comment by X-philly
2009-08-26 05:46:54

I don’t think you’re a realtor or a troll - maybe someone who just purchased a home, or who has an itchy trigger finger due to insistent pressure from spousal unit?

That said, a couple of the posters gave a pretty good description of why a two percent “spike” in the current macro environment isn’t exactly a strong buy signal.

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Comment by Eddie
2009-08-26 05:54:13

I haven’t bought anything. I am thinking of it. I sold close to the peak, have been renting since. Didn’t even think of buying until this spring when I sensed things were starting to change. Houses that were sitting for sale for literally years started selling in my neighborhood. A friend of mine had a condo for sale that he stupidly bought as investment in 2003/4. He got an offer on it in June. He still lost money, but he did sell it. And I honestly didn’t think that condo would ever sell. It was a bit of a wake up call for me.

I was as bearish as anyone in 2007 and 2008. Just like I was bullish in 2003 when I bought my 1st house. But I’m not a kool aid drinker one way or the other. If I see things change, I will go with it. I’m not going to dig in my heals for some sort of housing/financial market ideology.

 
Comment by exeter
2009-08-26 06:31:37

You were dumb enough to buy a shack in 2003 and it appears you’re dumb enough to buy a shack in 2009.

What is your point?

 
Comment by Eddie
2009-08-26 07:26:32

Dumb enough to buy in 2003, and sell 4 years later for a little more than 2.5X what I paid.

 
Comment by Prime_Is_Contained
2009-08-26 07:27:30

Eddie, when did you sell your 1st home? And were you bullish or bearish in 2004, 2005, and 2006?

The reason I ask is that if you didn’t turn bearish until 2007 when the rest of the whole world did, your value to me as a leading indicator is diminished. :-)

I’ve never called you a troll; but I do think that some stimulus-induced and seasonally-induced noise in a couple of months worth of C-S data-points is a strange reason to call a bottom.

But I could be wrong, of course! :-)

 
Comment by cougar91
2009-08-26 07:54:50

>Dumb enough to buy in 2003, and sell 4 years later for a little more than 2.5X what I paid

Can you provide the address of this property? Since you don’t owned it anymore it shouldn’t be an issue. I just want to look it up on Trulia or something because 250% gain in 4 years, after the bubble began to burst in early 2006 is quite an amazing feat in itself.

 
Comment by exeter
2009-08-26 08:27:03

“Dumb enough to buy in 2003, and sell 4 years later for a little more than 2.5X what I paid.”

1) As Cougar suggested, provide some evidence of this. You’re full of it until then.

2) If and only if your assertion is true, and so long as it is understood that the bubble was a once in a multi-generational price aberration (some would say unprecendented), you’re telling us that your clueless enough or greedy enough to think that you can pull off this feat a second time based on what strategy, forecast or evidence?

Your response should include evidence that includes or suggests;

1) We’re at the bottom

2) Prices will return, nominally or inflation adjusted

3) At any time from today forward that you’ll be made whole including all costs and that you have a buyer at that price.

 
Comment by Hwy50ina49Dodge
2009-08-26 09:32:15

“…or greedy enough to think that you can pull off this feat a second time based on what strategy, forecast or evidence?” ;-)

The Federal minimum wage has increased to: $7.25 - July 24, 2009

 
Comment by Bill in Carolina
2009-08-26 13:04:32

We bought in Sarasota in 2002 and sold in 2005, owning the house for two years and nine months. Gross selling price was 1.85 times what we paid for it.

Prices went absolutely nuts in Florida during that time. A 2.5X gain in four years is entirely possible.

 
Comment by GrizzlyBear
2009-08-26 13:45:55

IMO, Eddie = shill.

 
Comment by packman
2009-08-26 14:23:17

We bought in Sarasota in 2002 and sold in 2005, owning the house for two years and nine months. Gross selling price was 1.85 times what we paid for it.

What part of Sarasota, if I might ask? I might buy down there someday, preferably close to (or on) the water.

 
Comment by exeter
2009-08-26 14:25:15

Is it a surprise to anyone that EdTard hasn’t responded?

 
Comment by lavi d
2009-08-26 14:45:56

IMO, Eddie = shill.

Ahhh. I don’t think he’s a shill. I think he’s divided.

I think he’s got his heart set on something, but his mind is saying, “Maybe we this isn’t such a good idea”.

So he came here to see if he could battle-test some things he could tell himself to get his mind to “shut up.”

 
 
Comment by NYCityBoy
2009-08-26 05:54:41

“Boy,

Your obsession with me is a little creepy.”

Actually I couldn’t care less about you. I have no respect for your opinion and thought I got that across. I don’t care what you do or with whom you do it. Knock yourself out. If making fun of you with one comment is obsession then you really have an interesting take on life.

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Comment by Eddie
2009-08-26 06:07:26

It’s not one comment, it’s several little snide comments over several threads. And like I said, a little creepy. But whatever.

 
Comment by michael
2009-08-26 06:35:19

i have an obsession with you eddie.

 
Comment by mina
2009-08-26 07:08:52

Eddie: don’t listen to them, I am really your biggest fan!

 
Comment by Olympiagal
2009-08-26 16:30:21

It’s not one comment, it’s several little snide comments over several threads. And like I said, a little creepy. But whatever.

I don’t think NYCityboy is obsessed with you, Eddie.
But if he is, it could be wayyyyy worse; he doesn’t log on over and over again while using different names each time in order to make it look like a whole bunch of posters are disliking you, and then go on youtube ‘American Visionaries’ series and post even more ha*te-mail about you there.
Now that is creepy.

(And that’s why I canceled my email account that I once used for HBB stuff. So my fluffy little Oly-head don’t end up stuck in some creepy fridge somewhere. I sincerely hope.)

 
 
Comment by salinasron
2009-08-26 06:20:11

“Boy,

Your obsession with me is a little creepy.”

Having been away for a week I’ve missed some of what’s going on but LOL, thanks for the morning levity.

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Comment by maldonash
2009-08-26 12:29:07

Funny stuff … let’s see if there is any evidence

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Comment by CincyDad
2009-08-26 06:06:34

But Cincinnati Business Courier says “Case-Shiller: Home Prices on the Rise”

I’ve told you guys before, it’s different in Cincinnati. Well, sort-of….

Our major non-government employers are P&G and Krogers - 2 Fortune 25 companies that are as steady as any in the world. Apart from these, insurance-type financial companies are probably the next biggest employers.

simply put… Cincinnati has very few boom-bust companies. We’re the ’steady-Eddy’ of the national employment scene. These companies run lean all time. Employment here grows an average of 1%/yr… 0% in a bad year, 1.5% in a good year.

Also keep in mind that there are a LOT of houses in the area that sell for under $100k. Not professional housing, but good housing for basic workers. It’s cheaper to buy than to rent. So that $8k tax credit goes a long way in Cincy.

Also, Cincinnati remains in a the mists of a major infrastructure rebuild that started a couple of years ago. 4 years ago Ohio raised its gas tax 6cents/gallon to help rebuild (and expand) the interstates and connecting roads. SouthWest Ohio, long neglected by the state, has been the major recipient of this money, so there are major road construction projects funded for the next several years, even before the Federal stimulous package. Couple this with Cincinnati’s major redevelopment of part of its riverfront, and construction jobs are probably expanding here, not contracting (at least for now).

So we have steady employment and major long-term construction going on. No wonder prices have fallen only about 5% here.

All of this will eventuall end, and when the rest of the country is growing again, Cincinnati will be stuck in neutral.

(if you lose your job, you can’t get another one.)

Comment by az_lender
2009-08-26 07:06:05

CincyDad says, “We’re the ’steady-Eddy’ of the national employment scene.”

Well, so, NYCB was RIGHT when he said “Eddie must write for the Cincinnati Business Courier.” !!!!

And BTW thanks, CincyDad, for implicitly assuring me that the corporate debt of the insurance companies is safe…now that I have nearly 10% of my net wth in Hartford, Pru, & Genworth as debtors.

Comment by CincyDad
2009-08-26 07:34:30

Western&Southern, Great American, Cincinnati Financial Corp (some insurance, I think), Ohio Causalty. These are the types of insurance companies around here. Not exactly house-hold names to people outside the area.

(NationWide and AAA insurance are up the road in Columbus. Progressive is further up the road in Cleveland.)

I don’t want to say all Cincy insurance companies are healthy because I do not know their balance sheets. But given the general financial conservatism of Cincinnati, it’s hard to imagine they got themselves into too deep a problem. Some of them keep capitalizing on their high ratings for financial stability in their ads.

But then again, FifthThird bank is HQ here, and was very financially conservative until it decided to seek good returns in Florida RE a few years ago. Oops. So no guarantees.

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Comment by milkcrate
2009-08-26 08:48:30

That Western Southern outdoor spinning clock has been telling the time near Pete Rose Way and the river ever since I can remember.

 
 
 
 
 
Comment by CA renter
2009-08-26 04:33:18

This is a re-post from the other day in response to other posters saying the market isn’t hot.

Have to agree with the brisk sales.

We are literally out looking at houses at least one or two days a week, and have been doing this for many years. At least in our area, we have a pretty good feel for what’s going on, and sales are definitely very brisk.

Just talked with a seller last night — original owner from the 1970s, presumably with no mortgage left — and she was visibly surprised that she got multiple offers within a few days. She had been hearing all the “bad news” about how slow the housing market was, and expected to be on the market for 60-90 days. She even listed above what the agent wanted to list for, and got above-asking bids for it.

The bubble is still alive and well in San Diego.
——————-

Update from last night: found out the buyer who was accepted is a contractor. No doubt, this parasite is looking to flip this perfectly fine, but not upgraded, house.

I hope and pray for higher rates. It’s the only thing that can bring sanity back to the housing market, IMHO.

Comment by az_lender
2009-08-26 04:46:18

Well, here’s my response: THE MARKET ISN’T HOT. You are just reporting that the persons who are still buying are nincompoops.

Francie, an unlicensed real estate agent who takes a 1% fee to match buyers w. sellers in an Arizona RV park, told me yesterday that so-and-so wanted $62K for Lot number such-and-such, but would be lucky to get $60K. (This Francie is always bullish.) I would not lend more than $40K on said lot if I were asked to lend anything, but even Francie is now saying, “People don’t want to part with their money, because of the stock market crash. They don’t want to go into debt.” This was by way of explaining why the demand for my loans is practically nil. I’ve made exactly two new private loans since January: one for $44K w/ a new client, the other a $12K addition to an existing low balance.

Hence I’m reduced to buying a few of those 12% Genworth bonds I mentioned a few days ago. And mucho cash-equivalents.

Comment by CA renter
2009-08-26 05:09:47

Here’s more… “Carlsbad Jim” (in San Diego County) has a post on his blog about some flippers (I believe they’re from L.A.) who have made over $100K in a few months on a house. They bought five houses, all cash, to flip, and appear to be making good money on every one of them.

http://www.bubbleinfo.com/2009/08/more-on-flipper-story/

Comment by Bill in Los Angeles
2009-08-26 06:56:09

I feel safer somehow in VEIEX. Those guys who flipped very likely made short term gains (not their primary address for 2 years) and are contributing to Obama’s economic policies. I like Obama but hate his economics and I avoid short term gains at all costs.

Got my company stock, which more than doubled since March 2 of this year when I bought 1700 shares. But no way would I sell them to donate to this government.

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Comment by CA renter
2009-08-26 05:11:38

az lender,

I just posted a response with a link to Jim Klinge’s blog, where he highlights the success of recent flippers in some of his recent posts. Hope it comes through soon.

Comment by cereal
2009-08-26 06:52:27

I think I will wait out the following:

Massive recasts 2010/2011
Commercial disaster
Credit Card disaster
Spain/Ireland/Eastern European unfolding disaster
The bond revolt
FDIC disaster

before I stick my 10 digits into the rain of falling knives

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Comment by Cassandra
2009-08-26 07:41:10

I agree. Just looking at the Credit Suisse chart convinces me that I’m not even going to look until winter 2010. While there may still be decreases after that, I think by then 90% of the damage will have been done. Besides, I just signed a 13 month lease… :-)

 
Comment by Cassandra
2009-08-26 07:46:21

Well, thinking about this some more, perhaps there is one more reason to wait: Boomers.

What kind of market damage will this demographic do as they die off, or otherwise unload their properties? How long will this take to play out? A decade? Two? By then I may no longer care.

 
Comment by DinOR
2009-08-26 07:59:55

Cassandra,

Well just ask Harry Dent? To his credit, he coined the term “don’t wanters” ( in regards to Boomer’s heir’s desire to retain their retirement homes ) even before the dot.com crashed.

 
Comment by scdave
2009-08-26 08:11:37

A decade? Two? By then I may no longer care ?

I would say Two….Think about what the Arizona or Florida market may look like in 2030….IMO, it also is going to have some negative GDP impact when all those pension and SS benefits go poof !!

 
Comment by Hwy50ina49Dodge
2009-08-26 08:58:27

“Think about what the Arizona or Florida market may look like in 2030…” :-)

I’m planning on getting one of these:
http://www.iconaircraft.com/

If I’m alive, I like Mr. Cole to fly me over Phoenix and do this:
“BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic*” (DennisN™)

 
Comment by patient renter
2009-08-26 09:40:35

“Just looking at the Credit Suisse chart convinces me that I’m not even going to look until winter 2010″

Indeed. I’ve yet to see any serious bottom caller explain away the pending mortgage resets or the shadow inventory.

 
Comment by packman
2009-08-26 10:35:16

FWIW - I think the pending resets are actually quite meaningless. Mortgage rates are still near historic lows, so the rates for these people won’t be be going up that much actually.

The vastly bigger factor is the home price declines we’ve seen since 2007, and the resulting delinquencies and foreclosures that have already happened. If I’m one of the fools who bought in 2004-2006 with an ARM, and in a bubbly area - then I’ve already walked away since I’m probably 20-50% underwater.

I think any recent ARM reset charts are misleading as well because they don’t yet subtract many foreclosures that have either already happened or are in process (seriously delinquent etc.)

To me the biggest thing that points to continued price declines is the still-sky-high empty inventory and the still-rising rate of defaults. These are more directly leading to price declines. Yeah ARM resets will have *some* effect, but even if they weren’t coming we’d still have price declines to come.

 
Comment by patient renter
2009-08-26 11:03:56

I think the pending resets are actually quite meaningless. Mortgage rates are still near historic lows

IMO, those statements are a contradiction. Sure the ARM folks might be safe for now, but if mortgage rates are near historic lows which way can they go from here?

That these things will blow up isn’t a topic for serious dispute. The only question is when.

 
Comment by Al
2009-08-26 11:41:28

“I think the pending resets are actually quite meaningless. Mortgage rates are still near historic lows.”

Packman,

If I recall right, the resets on some of these mortgages are from prime - x% (ie 3%- 1.5%) to prime + y% (ie 3% + 5%). While prime might be low, the reset after the teaser rate makes it an expensive mortgage. This will cause resets, assuming they haven’t already bailed as you pointed out.

 
Comment by packman
2009-08-26 11:46:02

I should have added this last part:

“Mortgage rates are still near historic lows - and will probably stay there for some time, like until the resets are complete.”

 
Comment by az_lender
2009-08-26 20:29:55

No matter what the rates are, the resets that go from I/O to amortizing are a wicked blow to those who figured they could sell or re-fi before reset time.

 
 
Comment by DinOR
2009-08-26 07:29:10

CA renter,

I don’t doubt it, and there -will- be a handful of short-term winners in all of this. I hope they take the money and blow it in Vegas on strippers and booze. I mean after all, easy come, easy go?

But it’s hardly a sustainable business model. The market doesn’t exist just so one person can get a screaming deal. But it’s still important to share these stories.

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Comment by NYCityBoy
2009-08-26 05:21:47

“People don’t want to part with their money, because of the stock market crash. They don’t want to go into debt.”

That is what is so silly. It’s not the stock market crash that should scare the average Joe. It’s the jobs market crash that should scare the heck out of him.

Comment by az_lender
2009-08-26 05:24:26

The particular population she is talking about lives on Soc Sec and their 401K’s, the only one with a (sort of) job is Francie!

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Comment by NYCityBoy
2009-08-26 05:29:34

AZ, I can’t believe they ever put money into their 401k. How many of us know a lot of people that don’t put anything into retirement?

 
Comment by az_lender
2009-08-26 05:45:09

On the one hand, you’re right…why do people in their 60’s have to take out a loan (from me) to buy an RV-park lot and a tiny MH?

On the other hand, Francie’s right…I know that several of my existing clients own stocks and would rather pay me my 9% interest rate than realize the loss on their stock holdings.

 
 
Comment by ecofeco
2009-08-26 11:41:27

Haven’t you noticed that all financial news refuses to acknowledge the real job situation? They act as if jobs are still out there, growing on trees and that they pay enough for J6P to continue to fuel the consumer engine.

Yeah, the markets have “decoupled” alright. From reality.

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Comment by Bill in Carolina
2009-08-26 13:11:16

CA renter,

Even if sales volume triples, as long as only nincompoops are buying, the market will not be hot. Remember that.

Comment by CA renter
2009-08-26 14:14:26

Perhaps our definition of “hot” differs. My definition means there are lots of buyers who are bidding up prices well beyond what they should be, based on rents, incomes, etc.

We did see a significant drop in prices in the lower-end neighborhoods, but 50% increases in 3-4 months???? We’re right back to crazy times!

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Comment by aNYCdj
2009-08-26 04:54:31

This is why I probably will never buy, even though i own 1/3 of my moms 2 fam. house. I like older and character. Not a dilapidated fixer upper, but this 70 year old rental i have nice plaster walls, old cabinets but they are solid wood…hard wood floors with interesting varied colors from years of sanding refinishing and sunlight..
————————————-
but not upgraded, house

 
Comment by Eddie
2009-08-26 05:47:00

That is what I encountered last week in St Petersburg and Tampa. Even with a rental that I liked, called agent back to see it a second time, was told it wasn’t available anymore as an offer had been put on it for purchase. Asking price was $700K-something, rent was $3300. On the water with a pool. Pretty good deal rent wise.

PS: Boy, yes, yes I know. No need to tell me.

 
 
Comment by Lucy
2009-08-26 04:42:45

Dude, just to clarify regarding the use of “energy” as currency. If you can solve the logistical problems and really use energy as currency (everyone has their own super-powerful battery and you discharge a bit into the 7-11 battery when you buy a pint of milk) then that would be a great idea.

But if you are suggesting some new electronic currency, say the “Energy” (with a capital E), which is convertable into a fixed amount of real energy. Then the flaw is that whoever guarantees that convertability will sooner or later default. This is what has happened to every gold backed currency throught history and I see no reason why it would be different this time.

Comment by az_lender
2009-08-26 04:48:20

What a good point. I guess you are including the US dollar. I hadn’t thought of the abandonment of the gold standard as a “default,” but of course that’s the right way to think of it.

Comment by palmetto
2009-08-26 05:09:43

Yep.

 
 
Comment by joeyinCalif
2009-08-26 05:00:36

Gold standard currencies haven’t defaulted..
What happens is a country is forced to take on far more debt than it has gold reserves (usually due to a war). It then willingly drops the gold standard.

Comment by az_lender
2009-08-26 05:47:51

That’s what Lucy’s defining as a default. Not a default on their treasury bonds, rather a default on the promise of convertibility. I agree with her definition.

Comment by joeyinCalif
2009-08-26 06:07:01

If willingly changing the monetary system can be termed a default, then refinancing a loan could be considered a default.

Default means failing to meet an obligation.

When a gold-standard country goes to war and spends every ounce of it’s gold supporting that war, it is officially bankrupt, but it hasn’t yet defaulted on any loans.
However, it’s very difficult to borrow money and the choices are few. Either surrender to the enemy or surrender to fiat currency.

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Comment by az_lender
2009-08-26 07:19:01

Refinancing a loan requires the consent of the creditor.

Abandoning the gold standard would typically be done without the consent of those holding most of the supposedly convertible gold certificates.

 
Comment by Prime_Is_Contained
2009-08-26 07:38:32

“If willingly changing the monetary system can be termed a default, then refinancing a loan could be considered a default.”

If they willingly changed the monetary system by pre-emptively swapping all currency for the stated conversion-rate of gold, then I would agree with you, joey.

Has that ever happened? Not likely. So your analogy is a poor one.

I think default is a far more apt description of what has occurred when countries dropped the gold standard.

 
Comment by joeyinCalif
2009-08-26 07:44:29

heh… well… lets see.. how do i counter that..

If foreigners own the certificates, they have already redeemed them for gold, so they are out of the picture.

The consent of the populace who hold/held certificates shouldn’t be difficult to get when they understand that their society is about to be crushed by the enemy.
Survivors will be enslaved.. forced to speak a new language.. forced to eat with utensils.
——

look.. I don’t enjoy arguing semantics, but the word default has a particular meaning. It’s nice when a word is solid, reliable and is easily understood by other people. It offers the opportunity to communicate.

tell ya what.. I will think about it and try to come up with a word that we all agree applies to a gold standard’s failure.. but it won’t be “default”.

 
Comment by Cassandra
2009-08-26 07:53:15

True az_lender. However, one could presumably hold physical gold, rather than the notes, if you were concerned about the default. This is the promise of any physical based currency. Though, electrons might be difficult to bury in the back yard.

Lately, I’ve noticed a lot of interest in lead. 9mm rounds seem to be popular.

 
Comment by joeyinCalif
2009-08-26 09:00:25

Prime_Is_Contained … It cannot be argued that war is a fact of life. As such it is never totally unexpected, and countries do prepare for the eventuality of war.

A country that accepts reality and understands the limitations of the gold standard also accepts the good possibility of their adopting a fiat system as a nearly inevitable fate.

“If (when) war comes we may run out of money and have to drop the gold standard.”

The admission alone is preemptive.

 
Comment by Al
2009-08-26 11:47:17

The term I’d use for this scenario is ‘breach of contract.’

 
Comment by Prime_Is_Contained
2009-08-26 17:38:03

“I will think about it and try to come up with a word that we all agree applies to a gold standard’s failure.. but it won’t be “default”.”

How about “currency debasement”; the currency used to be based on something….until it wasn’t anymore.

It sounds less bad than default, right? :-)

 
Comment by joeyinCalif
2009-08-26 19:49:04

When keeping the gold standard is much preferred but at the same time would be economically debilitating, the proper word may be that the standard is “sacrificed”.. or “surrendered”… or “renounced”.

Some may attribute various evil powers to the dropping of a gold standard, but check out wikipedia’s ‘gold standard’ page..

According to that, there was very close correlation between the earliness with which dozens of G-Depression era countries dropped the gold standard and their speed of recovery.

paragraph begins “According to later analysis..”

 
 
 
Comment by exeter
2009-08-26 10:27:47

“Gold standard currencies haven’t defaulted..”

There isn’t one currency that is pegged to gold today. NOT ONE…..Jo-E, do you just imagine this stuff? Dream it?

Comment by packman
2009-08-26 10:41:17

That doesn’t change the conclusion.

There are no gold standard currencies today because greed has taken over - the bankers know they can’t extract as much wealth from people when on a gold standard. That’s the reason why there are none today, not because the countries that did have them defaulted.

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Comment by joeyinCalif
2009-08-26 11:32:38

gaahhhh..
look.. when you’ve spent all your gold, and have nothing more to spend, you are bankrupt… period.

Where is the “default”? What loan or obligation did you fail to pay? How does the word “default” apply to the situation?

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Comment by CA renter
2009-08-26 16:38:49

When people hold your currency, and it’s supposed to be valued at “x”, if you suddenly print more money, the new value is “x-y” with y being the cost of inflation or loss of purchasing power.

Perhaps default isn’t exactly right until the fiat money is worth absolutely zero. Would you then agree that it’s a default?

 
Comment by joeyinCalif
2009-08-26 20:04:11

Good question.
Can a fiat system default? Can fiat money ever be worth zero?
Look at Zimbabwe’s problems…. x-y can get closer and closer to zero and the money might be worth no more than the paper it’s printed on, but will it ever have zero value as long as it’s legal tender?

 
 
 
Comment by Lucy
2009-08-26 19:41:48

The gold standard is a promise to pay the holder of the fiat currency a fixed amount of gold. When a country decides to go off the gold standard they default on that promise of fixed convertability.

 
 
Comment by dude
2009-08-26 08:28:02

The reason you wouldn’t have traditional default is because the currency would be an “E” or a $, it would be a Kwh or a kiloton. Those standards shouldn’t change. If a bank failed and it’s Kwh notes were worthless then the insurance agency that exists if any could back it, or if none then it’s caveat emptor.

The reason it works long term is because it has fixed value, default or no. It is just accounting work to figure out a base cost for nearly everything, from there the market can take care of prices. The government can still intervene with regulations and taxes but they aren’t going to change the value of the newton*meter.

Comment by dude
2009-08-26 10:01:41

I also thought of maybe a better example of how the system would work.

Let us suppose I get my electricity bill for the month, and I’ve used 200 kWh. My bill might read as follows:

200 kWh base charge =200 kWh
production fee at .1 kWh/kWh=20kWh
line charge at .2 kWh/kWh=40kWh
tax at .1kWh/kWh=20kWh

My total charge would be 280kWh for my monthly electricity bill, even though I only used 200kWh. The extra amount go to pay the salaries of the employees, the cost of equipments, etc.

Just about anything I can thing of can be valued this way, even those things that have the energy input for free (like crops).

 
Comment by lavi d
2009-08-26 12:02:47

they aren’t going to change the value of the newton*meter.

Hey duderino! I was going to write this earlier, but you didn’t seem to be around to comment on it, but you seem to be now, so:

Dude, just to clarify regarding the use of ?energy? as currency.

I am not dude and I am not the sharpest knife in the drawer when it comes to economics, but I am not ready to abandon this yet, unless I can understand the problems with it - or until I get flamed like poor eddie :)

Energy is a constant and it is infinite. What is not constant is the amount of effort and resources used to produce/collect/distribute energy. It is this conversion cost that I think can be a reliable basis for a currency.

If a kilowatt is worth $10 and it costs 1 kilowatt to grow a bushel of corn, then a bushel of corn is worth at least $10.

If you can grow a bushel for 750 watts, then you’re ahead, if it costs you 1.2 kilowatts, you’re behind.

We all seem to agree that it’s not the value of the paper you hold in your hand, but what that paper will get you, and most of what you can get has some energy cost associated with it.

The joule is just a more accurate measure.

What is wrong with this?

 
 
Comment by dude
2009-08-26 08:32:42

BTW, I really do have bigger things I need to worry about on a daily basis, and my currency risk is hedged nicely, thank you very much.

It’s just an idea I had on my drive into work, it’s fun to debate, even with the destroyers, but since it will never come to the fore why should I bother?

We’ll have a barter economy before we have the joule as currency.

Comment by Ol'Bubba
2009-08-26 09:07:05

Dude-
How are you hedging the US$? Just askin’…

Most of my asset allocation is in Money Markets denominated in US$.

Thanks.

Comment by dude
2009-08-26 09:53:54

Long dated calls on energy producers, precious metals, etc.

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Comment by robin
2009-08-26 20:53:25

Why aren’t you Eco FECO?

 
 
Comment by palmetto
2009-08-26 04:51:10

I was thinking it over last night after the China thread and I have to say, maybe I’m not a total protectionist. After all, China has those nifty mobile execution vans and it wouldn’t hurt my feelings to see a couple of those pull up to the offices of Goldman Sachs, maybe even to a couple of govmint offices, where the real criminals are.

And lets not forget that China’s great manufacturing machine began with prison labor, maybe that’s what all those “Fema Camps” are for, so we can re-build our manufacturing base.

 
Comment by palmetto
2009-08-26 04:55:22

Oh, by the way, if you can’t stand maudlin bloviating over a deceased degenerate, stay away from all TV and radio for the next couple of weeks or so.

Comment by edgewaterjohn
2009-08-26 05:09:46

His money can’t help him now.

Comment by cobaltblue
2009-08-26 05:31:55

But at least he finally quit drinkin’.

Comment by X-philly
2009-08-26 06:04:14

You must have missed the Simpsons episode where they showed Irish heaven.

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Comment by joeyinCalif
2009-08-26 05:14:16

i take it you don’t think we should institute serious immigration reform, or adopt universal health care in honor of his passing..

wikipedia has an interesting bio.. the guy attended 10 different schools by age 11.

Comment by patient renter
2009-08-26 09:47:20

One shouldn’t forget his advocacy for separating money from politics via public campaign finance. Having been in politics prior to the involvement of big money, his concern for this issue was legitimite.

Comment by joeyinCalif
2009-08-26 10:33:54

Public campaign financing seems like an admirable goal. I question if it would make any difference in what type of person gets elected. Politics is politics and money is power. Wealthy entities will somehow bestow power on those politicians who do their bidding.

Successful politicians must alternate between being the pimp, the whore and the john during the normal course of affairs, and you can never know what deals and compromises were made, nor what they really stand for. Perhaps Ted really believed in campaign finance reform.
In any event, I’m sure that as a man he had many redeeming qualities.. might have been kind to dogs and children. I’m not one to pass judgment. “Judge not lest ye be judged.”

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Comment by Big V
2009-08-26 12:41:52

We aren’t supposed to pass judgement on rapists and murderers? In that case, close down all the prisons. Why should the wealthy be the only ones to get away with it?

 
 
 
 
Comment by az_lender
2009-08-26 05:17:43

It took me a second to realize you were talking about EK rather than MJ.

I wanna say that although I disagreed with 97% of the legislation initiated by EK, he was an extremely effective legislator in his day (unlike BO or HC). Of course, we have too many laws already, so ineffective legislators are to be preferred. I think “The Party of No” is a very positive designation, just wish it were true.

Comment by palmetto
2009-08-26 05:24:35

“he was an extremely effective legislator in his day”

More’s the pity.

Well, there’s a young lady who has been waiting a long time to have a word…

Comment by jeff saturday
2009-08-26 06:00:29

“Well, there’s a young lady who has been waiting a long time to have a word…”

About 40 years.

Sometime around midnight, on July 18, 1969 Kennedy drove his Oldsmobile 88 off of a small bridge on Chappaquiddick island, into eight feet of chilly water. The vehicle landed upside-down. While Kennedy managed to free himself from the wreck and swim to safety, his passenger, 28-year-old Mary Jo Kopechne was left in the car to drown.

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Comment by Muddyfoot
2009-08-26 08:13:16

I thought Chris Matthews was going to cry on the Today Show this morning! I was thinking to myself “See ya’ in hell Teddy”. He should drown in a car for eternity.

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Comment by NYCityBoy
2009-08-26 05:26:00

“Oh, by the way, if you can’t stand maudlin bloviating over a deceased degenerate, stay away from all TV and radio for the next couple of weeks or so.”

Michael Jackson died AGAIN?

Oh, you mean that other nincompoop degenerate?

Comment by palmetto
2009-08-26 05:35:01

I have more contempt for parents who pimp their children out to celebrities in exchange for monetary and other favors.

Comment by palmetto
2009-08-26 05:38:08

Sigh, it really is like Rome before the fall, isn’t it?

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Comment by aNYCdj
2009-08-26 06:09:27

Yup we all like Brittney Spears ….right on pimpin’?

ooh oohh her initials are BS……..such a smart goil.

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Comment by DennisN
2009-08-26 07:43:10

Joe Sr. “pimped out” his kids into politics since he himself couldn’t run due to having been a big fan of Hitler’s government.

The most objective obituary is found in today’s London Times.

JFK was a strong anti-communist hawk and a tax-cutting fiscal hawk. People forget he ran to the right of Nixon in 1960 on many issues. In today’s world he’d be a Republican.

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Comment by michael
2009-08-26 06:38:07

i get the feeling the coverage of senator ted kennedy’s death is gonna make michael jackson’s look like an inner city ute misdimeanor murder.

Comment by eastcoaster
2009-08-26 07:53:27

Wait until the trial starts, though. It’ll be another media circus a la Court TV.

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Comment by DinOR
2009-08-26 07:37:25

NYCityBoy,

LOL! Yeah, I understand there were a ‘number’ of frantic instances in the final few months for MJ. And that’s why I think the whole notion of “charging” anyone w/ his ‘murder’ is totally ridiculous.

Had it been Keith Richards we’d be laughing it off. ( He was so rude & crude! ) But… bu.. not our Michael!

Comment by CA renter
2009-08-26 16:45:07

From everything I’ve read, seen, and heard, absolutely NOBODY was surprised by MJ’s death. His body was already weakened by decades of extreme drug abuse. The night/day he died, his body simply gave out. The doctor should not be tried for homicide, but perhaps negligence.

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Comment by darthrealtor
2009-08-26 05:46:30

Bush died?

Comment by palmetto
2009-08-26 05:51:52

Opposite sides of the same coin, really. I would have written something similar in that event.

Comment by darthrealtor
2009-08-26 07:18:47

I wouldda beaten you to it. ;-)

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Comment by Skip
2009-08-26 08:50:33

Lot of hate on this blog today.

Comment by dude
2009-08-26 10:50:47

There are lots of tense nerves around these days. I can feel it in many who post, especially having read them through the years. I know I’ve changed over the last couple of years.

Comment by Kirisdad
2009-08-26 18:36:49

I think it’s because everyone is realizing that, even with a new President, the war on savers will continue on. It really starts to wear on you.

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Comment by VicthebrickV
2009-08-26 20:48:47

You’d feel the hate too if you found out you were losing your job today while the REIC lies, wall street crony and banking bailouts continue all under the so-called Obama change will occur nation.

Change my ass.

 
 
Comment by wmbz
2009-08-26 09:55:19

Just wait until Bob Byrd aka grand cyclops KKK starts crying and waling!

He’s already asking for sickness care to be named after Teddy.

What will it be called SSSC Socialist Sot Sickness Care?

Comment by Hwy50ina49Dodge
2009-08-26 10:53:14

“…Just wait until Bob Byrd aka grand cyclops KKK starts crying and waling!” ;-)

Hey I’ve been wondering, is wmbz local slang for: “White Mercedes Benz” in certain parts of South Carolina?

“Run Hwy,…Run!” :-)

Comment by wmbz
2009-08-26 12:11:44

“Hey I’ve been wondering, is wmbz local slang for: “White Mercedes Benz” in certain parts of South Carolina”?

Man you are so damn close! Only one word off! The W is my last initial, been a Benz hobbiest for 20 years.

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Comment by Anon In DC
2009-08-26 11:19:52

In his first run for the senate he confessed that he had been expelled from Harvard for cheating on a Spanish exam. Another student went to take the test.

1) How dumb can you be that you can’t pass Spanish ? I guess if you are too busy partying and there’s no time for study that might explain it.
2) How dumb can you be to think nobody is going to notice that someone else is taking the test for you ?
3) Lot’s of dumb people in Mass. They voted him in office. Kinda of like the dummies in NY who voted in Mrs. Bill Clinton. Had her name been Hillary Rodham X. She would have been laughed off the face of the earth.
4) Teddy and MaryJo together (again) at last.

Comment by DinOR
2009-08-26 12:47:40

Anon I DC,

LOL! Well, I have (2) sisters that worked for the NSA and attended the DLI ( Defense Language Institute ) in Monterrey. Both assure me, having an aptitude for a foreign language isn’t necessarily a measure of intellect?

 
Comment by robiscrazy
2009-08-26 17:47:05

4) Teddy and MaryJo together (again) at last.

For some reason this just made me think of that Tim Burton movie Corpse Bride.

 
 
 
Comment by palmetto
2009-08-26 05:04:43

Are ya like me, folks? Did watching Bammy lionize BB in his white ducks make you want to reach for a barf bag?

Comment by NYCityBoy
2009-08-26 05:28:11

I didn’t see that but reading that he called Ted Kennedy the greatest senator of our time made me want to hurl. I guess that says a lot about our Senate.

Comment by palmetto
2009-08-26 05:55:13

It says a lot about our President, too.

Comment by palmetto
2009-08-26 05:59:23

But at least he gives good Teleprompter. Better than the last one.

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Comment by jeff saturday
2009-08-26 06:23:44

“But at least he gives good Teleprompter.”

But off Teleprompter…
“U.P.S. and FedEx are doing just fine,” Mr. Obama joked. “It’s the post office that’s always having problems.”

If I was selling National healthcare I might have said, we have the United States Postal Service and there is still room for U.P.S. and FedEx, although I am not the most gifted orator of our time.

 
 
 
 
 
Comment by Michael Fink
2009-08-26 05:26:38

Blog is hungry.. Sorry if double post..

FL has a 99.9% chance of falling prices into 2011:

Mortgage insurer PMI Group said Tuesday there’s a 99.9 percent chance that property values in Palm Beach County and the Treasure Coast will fall further by the first quarter of 2011.

PMI says three dozen metro areas have a 99.9 percent chance of falling prices. Those areas include nearly all of Florida and huge swaths of California and Arizona.

http://tinyurl.com/koqser

Remind me again why I should even consider buying now?

Comment by az_lender
2009-08-26 05:59:59

It’s a double post, but it’s such a good one that I loved reading it again.

Hey, 99.9%. Well, people buy lottery tix all the time with a smaller than 0.01% chance of winning! Doing their part to prop up their state governments. Guess this is the same thing (ha ha)

Comment by michael
2009-08-26 06:43:04

the difference between the lottery and buying a house during the run-up…you had to put up your on cash to buy a lottery ticket.

Comment by DinOR
2009-08-26 07:39:43

LOL. Well at least a like amount?

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Comment by Prime_Is_Contained
2009-08-26 07:45:30

100 LTV financing for buying lottery tickets!!! That is such an awesome idea! The PTB will be all over this!

That’s just the kind of creative thinking that makes this country great; I knew that we would soon find the road to prosperity again!

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Comment by Michael Fink
2009-08-26 08:58:02

I’m going to throw up.

Actually, I think that idea has long ago been implemented, you can buy lotto tickets on your CC can’t you?

So, using a credit card to buy something that has a 99.9999% chance of depreciating to 0 in the next 24 hours? Brilliant! :)

 
Comment by AnonyRuss
2009-08-26 09:06:33

“Actually, I think that idea has long ago been implemented, you can buy lotto tickets on your CC can’t you? ”

I am blissfully ignorant of whether this action is permitted.

 
 
 
 
 
Comment by salinasron
2009-08-26 06:07:39

Cash for baby seats. Yes! Buy, buy,buy! Buy now! The recession is over, I heard it on MSM.

BTW, the USPS who hasn’t laid off anyone in the past recessions has over the last two years cut some 100K people and is asking another 30K to take an early out. But that’s ok, the recession is over.

Comment by Eddie
2009-08-26 06:15:28

USPS laying off people isn’t an indication of anything other than the fact nobody sends letters anymore.

Comment by joeyinCalif
2009-08-26 06:36:24

“The U.S. Postal Service handles 212 billion pieces of mail annually, or about two items for every man, woman and child in the country every day, according to the U.S. Census Bureau.”
www dot livescience.com/mysteries/070705_llm_mail.html

The problem is they currently employ at least twice the work force required to do it..

Granted that something like 2 million emails are sent every second worldwide, but hard copy mail has not yet pulled a Ted.

Comment by scdave
2009-08-26 08:20:12

but hard copy mail has not yet pulled a Ted ??

Why ?? 90% of what I receive daily goes round file without even opening it…Now times that by 300 days a year and then again by every mail box….

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Comment by joeyinCalif
2009-08-26 08:44:25

i’m not claiming it’s not junk mail.. i’m just reporting what is sent. Someone is paying the postage to send it. There might always be some small need for hard copy.. Personally i prefer some things continue to be sent as paper for ease of bookkeeping.

interesting idea i heard about cutting down on junk emails sent and received: Charge a penny to send one.

While people who are fed up with junk would do it, most if not all mass mailing junk e-mailers certainly won’t pay it.

 
 
 
Comment by salinasron
2009-08-26 06:38:46

“USPS laying off people isn’t an indication of anything other than the fact nobody sends letters anymore.”

The USPS has taken a large position in the package shipping business from on-line buying. The thing hurting the USPS the most is prefunding the medical benefits so Congress can spend the money elsewhere.

 
Comment by Cowtown
2009-08-26 10:07:28

Priority Mail is my preferred way to send and receive parcels. Aside from junk mail and bills, though, I tend to agree that personal communication via snail mail is all but dead. I can’t remember the last time we got an actual hand-written letter (not counting postcards and greeting cards because they’re not the same as real letters).

 
 
Comment by aNYCdj
2009-08-26 06:15:43

Well i almost never write checks, and i write a few letters/note cards a month when i want it to be more personal.

I’ll tell you my carrier seems to be pretty happy these days, because he likes being outside, and they layoffs/buyouts are for the people inside.

Comment by Eddie
2009-08-26 06:36:49

I was gone for a week. Came back to a week’s worth of mail in the mailbox. 70% of it was junk mail that went straight in the garbage. 20% was bills that for some reason I still get even though I pay everything through e-bills or through my bank’s auto pay. That went straight to the shredder 10% was actual mail that I read. An invitation to a wedding and a couple of birthday cards.

Why do we need delivery 6 days a week again? I think 1 or 2 would do just fine.

Comment by aNYCdj
2009-08-26 07:00:57

Eddie:
i could see M W F & Sat…..or Monday Thursday and saturday

I think Sat delivery and having the PO open longer hours on Sat is a must, since millions don’t work on the weekends, and it would be easier to get any mail or packages that needed to be signed for.

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Comment by X-philly
2009-08-26 07:24:17

DJ -

can I get in touch with you through the link on your handle? I would like a mix of Don’t leave me this way, by Teddy P., Thelma Houston and the Commodores.

and probably some other tracks if I can get in touch with my friend Ralph who has a collection of the best ’80s music

 
Comment by X-philly
2009-08-26 07:26:51

and the Commodores.

Communards

 
 
Comment by eastcoaster
2009-08-26 07:55:40

So I don’t have to wait for my next round of Netflix movies. :-)

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Comment by In Montana
2009-08-26 09:14:54

I used to work for the PO when I was about 19, many years ago. I coulda retired at 48!! Man…but I was an incoming distribution clerk, and from the looks of things in my local PO offices the technology really hasn’t changed as much as was anticipated. Someone still has to read that addy and get it to the right carrier.

Wish I’d stayed there..talk about diversity! Memorize some distribution schemes and you’re in. Sit and BS while throwing mail & packages all night.

Comment by Bill in Carolina
2009-08-26 13:25:59

Montana, are you an alien? :-)

“Just about everyone who work at the post office is an alien.” - Agent J in Men In Black II, one of my favorite movies.

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Comment by In Montana
2009-08-26 15:21:38

Wasn’t that way then. It was whites, blacks and Japanese circa 1968, in Pasadena Calif.

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Comment by wolfgirl
2009-08-26 15:13:43

Our carrier is 3rd in line to be laid off and he has 8 years as a city carrier. He’s pretty worried since the routes are being rearranged. About the only things we get at the house are things that need a street address and junk mail.

Comment by aNYCdj
2009-08-26 15:32:33

wolfgirl:

yes some routes are being rerouted adding a street or two…but you have to really rely on foot soldiers here in the city, and with potholes pavements and very few mailboxes at street level its a demanding job….and they WALK back to the post office.

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Comment by iftheshoefits
2009-08-26 06:50:56

Cash 4 Codgers?

Comment by hip in zilker
2009-08-26 10:12:22

How much?

 
 
 
Comment by WT Economist
2009-08-26 06:25:50

When was the crime committed: when the credit card companies enticed people deep into debt, or now when they are forcing them to get out of it?

http://www.marketwatch.com/story/card-issuers-dont-care-and-theyre-proving-it-2009-08-26

“Lisa in Boston is at wit’s end. A few years back, she consolidated all of her outstanding debts — including her remaining student loans — onto a low-rate credit card that promised a rate of roughly 5% for the life of the loan…Recently, Lisa got a notice that Chase Card Services is raising her minimum monthly payment to 5% from 2%. That will raise the monthly amount due on her outstanding $14,000 balance from $280 per month to $700 per month.”

Go back to the wayback time. If it had been 5 percent all along, Lisa wouldn’t have gotten this deep in the hole.

“Joe in Tulsa, Okla., is equally frustrated. He has worked hard over the years to pay off his credit card bills, but because his work in the oil business can sometimes be spotty, he has always wanted to have available credit to get him through the lean times. When Joe recently paid off the bill on his Bank of America card, his “reward” was a note informing him that the credit limit on his account was being reduced sharply.”

Go back to the wayback time. If the limit had been low all along, Joe would saved in the good times and spent savings in the bad times, rather than running up debt in the bad times and paying it off in the good times. Instead of paying interest, he would have been earning interest, and would have been better off in the long run.

Whether Joe and Lisa deserve to keep their deal is debatable, but the credit card companies should never be allowed to put anyone else in this position again. Giving Americans credit is like letting a bunch of stupid cows out in a cornfield — they’ll eat themselves to death.

Comment by NYCityBoy
2009-08-26 06:51:22

“Joe in Tulsa, Okla., is equally frustrated. He has worked hard over the years to pay off his credit card bills, but because his work in the oil business can sometimes be spotty, he has always wanted to have available credit to get him through the lean times.”

Isn’t that what those things called, “rainy day funds” used to be for? Joe acts like a credit line was what the boys fought for at Saratoga and Bunker Hill.

Comment by WT Economist
2009-08-26 07:00:11

Remember the advice to keep six months’ living expenses in cash or equivalents for emergencies like job loss and ill health?

During the bubbles I read in many, many personal finance columns in many, many publications that this didn’t make sense. Leverage up to buy that house, and invest the rest aggressively, because you can always use your credit line as a rainy day fund.

Right up there with the advice to take out an ARM, make sure you have some debt to establish your credit history, etc. etc. etc.

Comment by az_lender
2009-08-26 07:13:41

“debt to establish your credit history”

Not needed. When asked for multiple credit references, I give exactly one. My Merrill Lynch account number. (Could just as well be another brokerage firm.) They ask for more, I tell ‘em there aren’t any more. They say I’m denied (whatever it is), then two weeks later they call back and say I’m approved (as if I cared).

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Comment by Jon
2009-08-26 10:03:29

People look at the advice of their parents to save for a rainy day, maybe the same parents who struggled most of their lives. Then they see apparently wealthy posers who buy everything on credit and use debt as their backup. Who you gonna believe?

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Comment by samk
2009-08-26 10:42:09

“Isn’t that what those things called, “rainy day funds” used to be for?”

I don’t get it when I talk to some of my coworkers and they tell me they have nothing but dust bunnies in their bank accounts. These are people who have been working far longer than I have. I don’t understand how people can work and not have anything saved up for when they no longer work.

Comment by Hwy50ina49Dodge
2009-08-26 15:31:15

“I don’t understand how people can work and not have anything saved up for when they no longer work”

They’ve held their monies in a passbook savings account. Come “hell or high water” they’ve followed their upbringing to be: “TrueBeliever’s™” …ask Mr. Bear, he’ll extrapolate how wise they have been, over the recent “Long Term” ;-)

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Comment by aNYCdj
2009-08-26 07:04:04

Hmmm….file BK and get rid of the student loans forever?

—————————–
she consolidated all of her outstanding debts — including her remaining student loans

Comment by DinOR
2009-08-26 07:50:58

Guys, I’m going to take serious exception to this. We can’t have it both ways. We’ve complained endlessly about MEW-financed this, that and the other thing but when someone uses c/c’s within their normal context, we jump all over them?

At least Joe and Lisa have not made ‘their’ problems ‘our’ problems by skimming equity ( for certainly less necessary purchases ) and then defaulting on their HOME loans!

I suppose that’s one of the main differences between myself and a great number of BB’s. I ’still’ see this as a Housing Bubble and *not a Credit Bubble. If GD housing wasn’t so freaking expensive would all these people be making everyday purchases on plastic?!?

Comment by NYCityBoy
2009-08-26 08:42:09

“If GD housing wasn’t so freaking expensive would all these people be making everyday purchases on plastic?!?”

In my opinion “yes”. Not all people but many would. We are surrounded by credit junkies. They will charge and charge and make minimum monthly payments. I believe it was a credit bubble. Housing may have been the foundation but people got addicted to easy credit and now see it as their god given right.

There is a reason they call them credit lines. (Wipes his nose while he types)

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Comment by DinOR
2009-08-26 09:21:36

NYCityBoy,

Chicken… Egg? I don’t know. It certainly didn’t seem to be the case w/ either ind. mentioned in the article. ‘Some’ will go to assert that “We’ve been in a Credit Bubble since the early 80’s” and that’s fine.

But when you have people out in Cali spending upwards of 80% of their pre-tax income ( and yes, we’ve had stories posted on this very blog to that effect ) what else CAN they do but use their c/c’s to keep them afloat until their -next- death defying re-fi!?!

Let’s put it this way, if homes were still in a range of 3 X Annual Income, would we be ‘as’ in debt? If the avg. DTI was at 28-33% for your housing needs, why would you pay 23% on plastic for everyday purchases when you can easily afford to pay in cash? Personally, I think it’s obvious but that’s just me. Housing Bubble.

 
Comment by dude
2009-08-26 16:32:02

My answer to that is, do the bankers want us to be that in debt?

 
 
 
Comment by DennisN
2009-08-26 07:55:43

Student loans are not dischargeable in bankruptcy these days. She may have done an end-run around this by refinancing into some other form of loan. It’s an interesting question about whether she could get away with this.

Comment by ATE-UP
2009-08-26 13:22:17

If she transmuted the student loan, then eventual BK debt from another global loan, I am not sure either. My guess is it is discharged. Did a few 7’s, but a long time ago. Good question Dennis.

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Comment by dude
2009-08-26 16:33:51

Ate, did you see my post to you last night in Bits?

 
Comment by ATE-UP
2009-08-26 17:15:53

No, but I’ll try to find it dude. Thanks.

 
Comment by ATE-UP
2009-08-26 17:32:07

Crazy, dude, but I couldn’t find it, and I am fair at skimming. Been up since 4 though. Can you re-post?

 
Comment by dude
2009-08-26 19:09:38

Here you go:

Comment by dude
2009-08-25 18:29:27
Ate-up:

Here’s an idea of what you could do with your free time if your state has an equivalent statute. Think Robin Hood…

California’s Unfair Competition Law, Business and Professions Code Sec. 17200
The law allows private attorneys to act on behalf of the public to sue businesses that engage in price-fixing, false advertising or other unfair business practices.

 
 
 
 
Comment by In Montana
2009-08-26 09:18:23

“onto a low-rate credit card that promised a rate of roughly 5% for the life of the loan…Recently, Lisa got a notice that Chase Card Services is raising her minimum monthly payment to 5% from 2%.

Oy, I’m so confused..

Comment by Cassandra
2009-08-26 09:26:44

Payment = 5% of balance, rather than 2% of balance, still at 5% per annum interest.

The rate is still honored. The payoff is accelerated.

 
 
Comment by Neil
2009-08-26 09:48:11

“Recently, Lisa got a notice that Chase Card Services is raising her minimum monthly payment to 5% from 2%.

This should be law on most debt from now on. In particular, unsecured debt. Now, I know the transistion is tough, but in no way should people be paying for a decade for that HDTV they just had to have in college… If all debt on items with a life of less than a decade must be paid at 5% of the debt per month… we’ll go back to a society that can survive a financial shock.

I’m ok with car loans up to 4 years, but I think there has to be a down payment. Oh… how about as much as the car losses value when its driven off the lot. ;)

Home loans to 30 years? Ok. But amortizing loans only. Forget those option-ARM NINJA loans.

Furniture, appliances, and all other goods should be treated like credit cards: by law pay 5% of the purchase price per month.

I understand certain people want to/have to live beyond there means. I’m ok with them paying my bank credit card interest to pay my CD’s. :) But let’s get back to rational.

Think how low debt would be if instead of that $100 purchase only ‘costing’ $2/month its $5. Most consumer debt, with interest, paid off in less than 2 years.

I haven’t decided my ’solution’ on student debt. An educated society is as valuable as the interstate network. But first we need to have kids graduating high school actually possesing a high school education (reading, writting, math, history, some arts/music, PE. Heck, my stretches this morning were taught to me in 8th grade PE.)

Got Popcorn?
Neil

Comment by DennisN
2009-08-26 10:57:59

that HDTV they just had to have in college

Geez when I was in college I built hi-fi kits to save money - considerable savings back then. Paid cash from summer jobs too.

Comment by DinOR
2009-08-26 12:51:57

DennisN,

As kids we built a “Heathkit” guitar amp and it was a ball! Given it’s dimesions, it looked like it should have been a lot louder. I imagine they didn’t want to hear complaints from the parents that o.k’d the purchase?

Nothing a little 9 volt Fuzztone couldn’t cure though? Surprisingly it’s become big business again. Weber Amps makes kits for nearly every popular amp ever produced. Back to the single-phase mono-block “Gibson” amps.

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Comment by dude
2009-08-26 16:37:42

“If all debt on items with a life of less than a decade must be paid at 5% of the debt per month… we’ll go back to a society that can survive a financial shock. ”

Neil, you anti-capitalist anti-pig! That’s downright unamerican. How would megabank make mega profits in this scheme of yours?

/snark off

Comment by Neil
2009-08-26 21:16:27

you anti-capitalist anti-pig! That’s downright unamerican. How would megabank make mega profits in this scheme of yours?

lol

I’m sure they would scream how unfair it was to borrowers.

Got Popcorn?
Neil

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Comment by wmbz
2009-08-26 06:27:05

“There is no way out. Either the feds cease spending more than they can raise honestly, by taxation and reasonable borrowing. Or, the system runs into chronic, megadeficits…like the chronic deficits in the private sector during the bubble years. Then, it blows up.” ~Bill Bonner

Comment by Hwy50ina49Dodge
2009-08-26 06:42:03

“…Either the feds cease spending more than they can raise honestly,…”

Does War to bring… “Shazam-Islam-is-now-Democracy” cost money, or is the plan to recoup US of A monies spent via poppies & oil? :-)

“…He claims that America’s foreign policy exploits are tantamount to the establishment of an empire, and the price of maintaining such an empire could accelerate America’s eventual decline.” ~Bill Bonner

 
Comment by mrktMaven
2009-08-26 06:48:42

Any chance they’ll renew W’s tax cuts?

Comment by joeyinCalif
2009-08-26 07:25:45

be interesting to see what they do with the death tax cuts when it all expires in .. 2011? Govt is hurting for revenues in a bad way.. i can’t see them renewing it.

Uncle Sam’s prospects of inheriting maybe half of whatever Rich Dad tried to leave his kids is way too tempting to resist.

 
Comment by wmbz
2009-08-26 07:35:21

I would sincerely doubt it.

Comment by DinOR
2009-08-26 08:03:52

wmbz,

Normally I don’t challenge you, but, based on what? Seems to me it would be pretty unpopular politically to continue to allow “the wealthiest Americans” to retain that wealth when there’s so much suffering.

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Comment by scdave
2009-08-26 08:29:23

They will never get to the real wealth…Trusts,generation skipping etc…The Kennedy’s along with many other’s are a prime example…The wealth they enjoy today, like the estate in Martha’s Vineyard comes from legacy that was formed in the 1920’s…

 
Comment by wmbz
2009-08-26 08:47:48

DinOR,

I would be amazed to see a renewal of any tax “cuts” we are running full steam into a world of debt like no other. All I can foresee are tax “increases” not just on the ‘wealthy’ but across the board.

At some point in the not to distant future the FED will have to slow down the money flood, and the mighty U.S. will have to start working on it’s debt. Tax revenue must rise to do so, no way around it, IMO.

 
Comment by scdave
2009-08-26 08:55:25

NOOOOOOO question about it wmbz….The ONLY question is how ??

IMO, it will be a broad based progressive tax that cannot be avoided…Think VAT…

 
Comment by Jon
2009-08-26 10:07:56

The top tax rate was like 90% in the ’50’s and early ’60’s to pay off the GD & WWII. America survived and prospered.

 
Comment by DinOR
2009-08-26 10:43:00

Jon,

No reason to doubt you, and a lot of talking heads have made that very point over the last few days. All “I” can say is to revert -back- to that would un-do a LOT of the sacrifices those generations made.

As in it was totally unnecessary.

 
Comment by Jon
2009-08-26 10:59:11

To say that it is totally unnecessary assumes that other courses of action are actually possible under the form of government we have.

I’m sure I don’t have to say this on this board, but the problem is the ratio of debt to assets in this country is unsustainable. So the government has a choice, attempt to increase the value of the assets, or attempt to decrease the debt. And obviously there are different ways of doing both. I think the government is attempting to do both to some degree, and I think we all agree that the way they are going about it is ethically, as well as technically, wrong.

That being said however, I don’t believe we have a political system that is ethically or intellectually capable of doing anything else.

We would all like to believe that the Founding Fathers of this country gave us the best possible political system. Some here believe that our problems are because we’ve strayed away from it. My thought is that it was probably the best system in the world in 1798. It just doesn’t work for these kinds of problem in 2009 and should be changed. And until we face that, we are bound to repeat these kinds of problems.

We can all rant. But ranting at the wrong things doesn’t help a whole bunch.

 
Comment by DinOR
2009-08-26 12:57:30

Jon,

Good post. But things like monogamy ( for example ) and being square with one another etc. are there for a reason. We were faced with a problem and an opportunity. We utterly failed and ‘bailed’ instead.

I guess in the end you can’t be just “a little bit pregnant” so it doesn’t matter. We’ve completely lost faith in the FF’s anyway and now prefer to work the system in a way that benefits ‘us’ the most.

 
Comment by dude
2009-08-26 16:41:58

“The top tax rate was like 90% in the ’50’s and early ’60’s to pay off the GD & WWII. America survived and prospered.”

The globe was a lot bigger back then.

 
Comment by packman
2009-08-26 21:08:08

It helps if your competition - in this case the 2nd, 3rd, 4th, and 5th biggest world economies - are obliterated by war, while your country remains unscathed.

Once we lost that edge - after about 30 years when they all caught up in the 1970’s - we then had to fuel our growth by ever-increasing debt rather than by competitive advantage. And voila - here we are now.

 
 
 
 
Comment by potential buyer
2009-08-26 12:50:50

Never mind, we’ll have fixed this mess by going to war with Iran, N. Korea or fill in the blank.

The warmongers are still out there……………..

 
 
Comment by Hwy50ina49Dodge
2009-08-26 06:36:26

Anything ever get voluntarily recalled in China, ever? …or do they just sell it to Walfart at a “volume” discount? ;-)

“…Walmart is voluntarily recalling about 1.5 million Durabrand DVD players made in China…”

Walmart recalls 1.5 million items made in China:
August 25th, 2009, by Hang Nguyen, retail reporter OC Register

 
Comment by JustSayNo
2009-08-26 06:39:11

not sure how people think this blog is full of liberals - the grave stompers are here for awhile - time to take a break from this blog and some of the meanness exhibited here toward democrats who champion causes for the people instead of the corporations and the rich.

I miss the Kennedy’s and the goodness they tried to bring to a dark world.

Comment by Eddie
2009-08-26 07:37:53

Contributions to Obama in 2008

Goldman Sachs $994,795
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
UBS AG $543,219
Morgan Stanley $514,881

Indeed. The party of the little guy.

Comment by sf jack
2009-08-26 09:08:07

Google!?

I guess they really were scared sh**less over those antitrust rumblings.

Or maybe Eric actually did want an administration job?

Comment by packman
2009-08-26 10:45:27

I don’t know about you - but you’ve hit on the one in that list that scares *me* the most.

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Comment by Ol'Bubba
2009-08-26 09:17:34

Don’t be naive, Eddie…

I haven’t checked, but I’ll bet one alpha-sloth maligned barbecue pork chop that each and every one of those companies you mentioned also made sizable contributions to McCain in 2008.

Once it becomes clear that a candidate has a high probablility of winning they don’t want to appear as though they weren’t supportive of the new commander in chief.

Comment by Eddie
2009-08-26 09:29:52

I’m sure they did. They’re both beholden to the same people. Difference is the GOP doesn’t pretend to be for “the little guy”.

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Comment by hip in zilker
2009-08-26 10:18:01

Yes they do. Rural, redneck, non-elite little guys. I see very little overt Republican identification with Country Clubbers and corporate elites.

 
Comment by DinOR
2009-08-26 10:45:45

Well here we go again? And it works out perfectly for Dems! If we take a stand on TAX issues ( we’re filthy capitalist PIGS! )

If we take a stand on MORAL issues ( we’re in-bred rednecks! ) See? It all works out.

 
Comment by sfbubblebuyer
2009-08-26 12:46:03

DinOR

Freedom of Religion should prevent grandstanding on most of the ‘moral’ grounds that politicians like to chest-thump over.

And neither side ever wants to compromise because solving an issue would remove one of the few tools they have to bestir their apathy riddled constituents.

Neither side presents a viable economic platform anyway. Hold your nose and vote for whoever you think stinks the least.

 
Comment by potential buyer
2009-08-26 12:59:00

Anyone read the article today on Yahoo (from LiveScience) regarding Beliefs and Total Lack of Logic - pretty much about preconceived ideas and the inability to change or even to look logically at the supporting facts? Most humans don’t have the ability. So something to be said for not talking about sex, religion or politics.

 
Comment by DinOR
2009-08-26 14:26:04

sfbubblebuyer,

Point taken. It’s just that the Dem’s seem to think there’s some real traction in their ability to perpetually spin this to their ‘advantage’.

Hell, on blogs and in person, I’ve been smeared as ‘both’ a redneck AND a country clubber in the same conversation/post!

They’re not kidding anyone but themselves but I hope you can understand just how annoying that is?

 
Comment by sfbubblebuyer
2009-08-26 14:50:05

DinOR,

I don’t see that there’s anything wrong in general with the people who belong to either group. Dems get smeared as elitist arugula eating tax and spenders, welfare queens, or illegal immigrant loving bleeding heart liberals, and as you mentioned Repubs get smeared as black-hearted industrialists, ignorant redneck hillbillies, and intolerant fundamentalist jerks.

Those labels DO fit, but only about 10-20% of the people in the parties, the fringes. But those labels and those debates seem to define our ‘two party’ culture. There is very little space for the remaining 80% of the population, who would qualify as moderate dems or moderate repubs.

I’m not registered as and don’t identify with either, and probably never will.

 
Comment by hip in zilker
2009-08-26 15:28:01

DinOR, I wasn’t trying to call anyone a redneck, just make the point that the Repubs do purport to be on the side of the “little guy.”

The only mental label I have for you, DinOR, doesn’t have anything to do with politics. I think of you as a “cranky festival-hater” - and I am one too. :-)

 
Comment by az_lender
2009-08-26 20:51:41

rednecks vs country-clubbers

Here on this island is a country club w/ lots of members who are lobstermen or sternmen. They are mostly Republicans. The limousine guys from NYC also belong to the club, and they are Dems.

 
 
Comment by alpha-sloth
2009-08-26 14:17:06

LOL Grill your chops, and ‘Q’ your ribs, Ol’ Bubba. And pass the hot vinegar sauce, not sweet red stuff.

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Comment by hip in zilker
2009-08-26 15:32:34

Ol’ Bubba,

I’d like some BBQ ribs with your sweet red hickory sauce, please. I would get ridden out of Texas on a rail if I said this out loud, but I PINE for Kansas City Barbecue - Gates & Sons or Arthur Bryant’s - and their sweet sauce. And some of those sweet gooey beans.

I’ll bring the beer and some home-made cole slaw.

 
Comment by alpha-sloth
2009-08-26 17:56:23

He was ‘Q’ing chops! I had to step in. (Though I’m sure I’d eat one.) House Park not good enough for you, hip? Ya need no teef…

 
Comment by hip in zilker
2009-08-26 18:15:50

I’ve never been to House Park, although it’s not far from my house and I pass it all the time. I’ve never heard anyone mention it. Is it good?

I don’t eat BBQ much. Occasionally, we pick it up from Smitty’s Market in Lockhart on our way to or from Lockhart.

 
Comment by alpha-sloth
2009-08-26 19:32:16

Haven’t been there in over ten years, but yeah, it’s definitely worth checking out. Pretty good brisket, great prices, funky atmosphere. Lunch only I think.

 
Comment by Ol'Bubba
2009-08-27 05:28:20

I’m a very picky eater in that I only like two kinds of food: hot and cold. Okay, okay… truth be known, I’ll also eat some things that are room temperature.

 
 
 
Comment by In Montana
2009-08-26 09:21:25

In Montana corporations can’t write checks to candidates for state office. The money has to come from individuals or PACs.

Just sayin.

Comment by Jon
2009-08-26 10:13:54

Same in Florida, and the max contribution is $500. However, their is no limit in how much a corporation or any other entity can spend to spread the good word about a candidate. So the contribution limit is really designed to limit the influence of the little guy.

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Comment by dude
2009-08-26 16:50:05

The amounts Eddie cited above include donations by individuals employed by the firms listed.

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Comment by az_lender
2009-08-26 07:39:12

One facet you’re missing in the opinions of anti-Democrats (who may or may not be Repubs) is that many of us believe corporations work THROUGH the US govt to achieve their objectives. Think how REIC used Phony & Fraudy to jack up house prices. It’s not all about helping poor people.

 
Comment by cobaltblue
2009-08-26 07:49:18

” time to take a break from this blog and some of the meanness exhibited here toward democrats who champion causes for the people instead of the corporations and the rich.”

Please tell me you are 11 years old and still believe in the Easter Bunny. The Democrats, just like the Republicans, have made a big business out of hypocrisy, graft, and corruption. The sanctimonious crap that “Democrats look after the common guy” may be what has been spoon fed to you, college students and other inexperienced and idealistic types by the left leaning MSM, but it is still, simply, just crap.

Democrats just like Republicans have a long history of championing whatever brings them votes and money. An example you won’t find in the NY Times or the Daily Kos:

August 25, 2009
Name that Party: “NY Businessman” Hassan Nemazee Arrested for $74 Million Bank Fraud Against Citigroup

This is a big deal, but not just for the reasons you think:
U.S. Attorney Preet Bharara in Manhattan and the Federal Bureau of Investigations say Hassan Nemazee, with residences in Manhattan and Katonah, N.Y., fraudulently applied for the loans for Nemazee Capital Corp., of which he is chairman and chief executive.
Federal prosecutors contend Nemazee obtained the money by giving the banking giant “numerous documents that purported to establish the existence of accounts in Nemazee’s name at various financial institutions containing many hundreds of millions of dollars,” the Justice Department said in a statement. “In fact, those were fraudulent and forged documents.”
Do you know what’s not mentioned by CNN, or Reuters, or AP, or the NY Times, or Daily Kos?
A crucial detail from Nemazee’s bio:
National Finance Chair - Hillary Clinton for President, 2008
National Finance Chair - Democratic Senatorial Campaign Committee (DSCC)
New York Finance Chair - John Kerry for President 2002 -2004
He was also nominated by President Clinton to be U.S. Ambassador to Argentina.

Just imagine if it had been a prominent Republican instead, who wasn’t “championing causes for the people”.

Comment by sfbubblebuyer
2009-08-26 09:50:42

He’d get the same pass, Cobalt. If you’re in politics, you only get kicked out for murder, molestation, or non-preapproved graft. (You can have your graft, just follow the bylaws.)

It always amuses me when people try to pretend that one party is worse than the other.

In fact, the only time I’ve been vaguely pleased with our congress/president combination was when Clinton and the Republican congress fought with eachother so much that the deficit wound up declining.

Any time there is any kind of bonhomie between congress and the president, the country gets screwed ten ways til Tuesday. I’d much rather congress refusing to write the idiotic legislation the prez wants and the prez refusing to sign the crap congress DOES spew out.

 
Comment by DinOR
2009-08-26 10:51:37

cobaltblue,

While on a much smaller scale, I had the very same stunt pulled on me! The guy used multiple brokerages and phony acct. statements to leverage a dinky acct. into a conduit for fraud.

Even though this was years… ago, he has just NOW gone to prison. Of course none of the regulatory agencies will give you a “clean bill of health” it’s just, you get to live another day and nothing more.

I learned thru the prosecutors that this brand of fraud is actually quite common. Thankfully I was able to give my deposition over the phone.

 
Comment by Sleepr Cell
2009-08-26 13:34:32

“left leaning MSM”

Where is this leftward lean of which you speak?

The MSM is fawning all over the pistol packin granies at town hall meetings who aren’t even aware that MEDICADE is a government run program.

Yet in 2004 Howard Dean had an “anger problem”?

Give me a freaking break. The double standard is so obvious it’s laughable.

Comment by DinOR
2009-08-26 14:29:33

“fawning”

Well that there would be some real ‘recent’ “fawning” now wouldn’t it? Here we go again, a decade of slant undone by (1) incident. Don’t worry, we’re used to it.

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Comment by NYCityBoy
2009-08-26 07:50:06

A bunch of spoiled rich kids off of a family fortune that was made by numerous criminal activities. I must have missed the light they brought unless you mean “George” the magazine was some beacon for freedom. The Kennedys are the embodiment of liberal white guilt. As long as they have theirs they will certainly try to redistribute yours.

 
Comment by Hwy50ina49Dodge
2009-08-26 08:26:06

“…some of the meanness exhibited here toward democrats…”

That’s because the “democrapts” are one of only two possible things:
1. un-American
2. un-patriotic

A day without the “”TrueBeliever’s™ / TrueDeceiver’s™” spouting off & yellin’ …would be like drinking instant decaffeinated coffee from a styrofoam cup while listening to the “hog” futures… ;-)

(Hwy’s decided that his opening line this Thanksgiving to his “Compassionate Conservatives” siblings will be:
Cheney-Shrub: “We want him to succeed as President…we really do!”) :-)

Comment by NYCityBoy
2009-08-26 08:45:01

Partisanship - lazy and boring.

Comment by Hwy50ina49Dodge
2009-08-26 09:06:32

I understand that in Sweden, they fold the ping-pong table up in half, so that they can play against themselves, I hear it really improves their skill level! :-)

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Comment by Left LA
2009-08-26 19:08:24

Any chance of someone writing a Firefox plug in that automatically filters out posts with Smiley Faces?

 
Comment by hip in zilker
2009-08-26 19:16:06

you could ask drumminj to add that to JT … when he has a chance

:cool:

 
 
 
 
Comment by scdave
2009-08-26 08:34:08

how people think this blog is full of liberals ??

I would think that the neo conservatives are in the minority here…

Comment by Cassandra
2009-08-26 09:39:41

Dave, I don’t like to have to choose. I think it’s a false dichotomy.

I believe:
- One should be fiscally responsible, and live within their means (as I think most here would agree) This includes governments.
- Government should be as small (and cheap) as possible.
- Government should stay out of our personal lives.
- Contracts are sacred.
- In the constitution, whatever it says or doesn’t say. (rule of law)
- Issues of personal choice (marriage, abortion, etc.) are just that. However, one must stand accountable for their choices.

Ok, what does that make me? Besides obviously, very troubled.

Comment by Hwy50ina49Dodge
2009-08-26 11:16:34

“…Government should be as small (and cheap) as possible.” ;-)

National Weapon of last resort:
Nuclear bomb,…meet Cassandra…Cassandra, meet nuclear bomb.

National Delivery package of last resort:
B1 bomber,…meet Cassandra…Cassandra, meet B1 bomber

National Backup to 1st Choice Delivery package:
Trident submarine,…

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Comment by Cassandra
2009-08-26 11:36:08

It’s not my intent to argue over the particulars of what is necessary. Do we need nukes and all the stuff that goes with them? I don’t know. Did we pay too much for B1’s? Maybe.

But how many B1s, how many nukes, how many cool submarines could we have gotten with TARP funds?

IMO, regardless how one values bombers and the like, at least the tax payers got something. But what did we get for a $700,000,000,000, a mere stroke of a pen with TARP? Bombers and submarines are starting to look like a bargain.

I’ll not argue against national defense, or the fed’s role there. I might take issue over what it costs, and how much we need.

 
Comment by Hwy50ina49Dodge
2009-08-26 12:53:22

“Bombers and submarines are starting to look like a bargain.”

Hey now, you’re the one that came up with: “Mr. Deferred Maintenance” :-)

Who am I to argue what the “Long Term” costs $$$$$$$ will accumulate to when all these, “small gov’t is best gov’t” “TrueBeliever’s™ / TrueDeceiver’s™” runnin’ around hollerin’ and screamin’ about “National Health Care” …Why who cares if radiation lasts 50,000 years, or very sick people live to be a 103 by means of very leased inexpensive medical equipment, or America has to respond to every “crisis” human or otherwise around the spinning globe, so long as we all just muddle through with the money $$$$$$$$ extracted from the labors of “some people” more than “others”…and if we can’t extract enough, why we might possibly come to…the “end of the road”…Dang, I must have been born an optimist in my former 86 lives… ;-) (Hwy, pours a glass of wine and ponders what the heck he just discombobulated…)

 
Comment by Hwy50ina49Dodge
2009-08-26 15:08:57

“…But how many B1s, how many nukes, how many cool submarines could we have gotten with TARP funds?” ;-)

Hey, I know… let’s ask Mr. Bear…because he say’s that MegaBank Inc…still has all the TRAP monies safely locked up in the “digital vault” along with all those “hidden inventory” deeds! :-)

 
Comment by dude
2009-08-26 16:56:52

I hate to break this to you Cassandra, but that makes you part of the non-vocal majority.

 
 
Comment by lavi d
2009-08-26 12:24:07

Ok, what does that make me?

Right on!

Well, except for the strict interpretation thing - the world has changed in the last 230 years. I think the courts get things right most of the time.

As a matter of fact, even though I’m an unarmed social liberal, I think the Supes got it right on the recent 2nd Amendment decision.

“When guns are outlawed, only governments will have guns”

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Comment by lavi d
2009-08-26 14:20:28

Well, except for the strict interpretation thing - the world has changed in the last 230 years

Give or take a hundred… :)

 
Comment by Cassandra
2009-08-26 15:07:53

I hereby grant all rights I may have to “Mr. Deferred Maintenance” to Hyw50ina49Dodge. Make it your own!

(If consideration is required, a glass of that wine will be acceptable)

 
Comment by Cassandra
2009-08-26 15:12:40

oops, that last comment should have landed above…

Anywho “Well, except for the strict interpretation thing”

If you don’t like the constitution in its current form, change it. I’ve no quarrel with that.

My point about strict interpretation is that I just want to know what the rules are, and I want them evenly enforced. I can only master the game if I know what the rules are.

 
Comment by Hwy50ina49Dodge
2009-08-26 15:17:06

(If consideration is required, a glass of that wine will be acceptable)

Done! I’ll square up delivery with Mr. Ben :-)

 
 
 
 
Comment by WT Economist
2009-08-26 09:13:19

This blog has people who disagree on how we are screwed (inflation vs. deflation) and why we are screwed (individual malfeasane vs. government policy vs. social trends).

The point of agreement is that we are screwed, at least as far as the collapse of the recent bubble economy constitutes screwed.

Comment by Professor Bear
2009-08-26 12:42:57

The paper wealth mirage has vaporized. All that remains to be settled is who gets screwed and how.

 
 
Comment by Muddyfoot
2009-08-26 11:36:33

Hey I miss the Dead Kennedys. They were my favorite punk band. There, that was nice.

Comment by aNYCdj
2009-08-26 13:20:02
Comment by Muddyfoot
2009-08-26 14:24:53

Thanks for the DK vid!!! This was one of my fav’s, and I’d guess one of Teddy’s too. http://www.youtube.com/watch?v=l7TWLxCIgwE Awww, too soon JustSay No?

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Comment by dude
2009-08-26 16:45:36

“the grave stompers are here for awhile ”

It had actually barely been mentioned until your post. Thanks much.

 
 
Comment by Mike in Miami
2009-08-26 06:40:31

5 calls and 3 showings in the last week. I have the feeling soon I’ll reel in a sucker. I hate form them to “lose” the $8K tax credit and possibly be priced out forever.
As soon as the tax credit expires it’ll be all down hill again unless our politicians decide to up the dosage to maybe $15K for any buyer. Given the current environment this is not out of the question.

Comment by eastcoaster
2009-08-26 07:59:09

$15K that will need to be repaid, though, right?

 
 
Comment by cougar91
2009-08-26 06:44:58

Not sure if this was posted yesterday:

Aug. 25 (Bloomberg) — Manhattan apartment rents fell as much as 10 percent in August from a year ago as tenants gained negotiating power in the recession and forced landlords to offer concessions.

In buildings attended by doormen, rents on one-bedroom apartments dropped 10 percent from a year earlier to an average of $3,274 a month, according to a report by the Real Estate Group of New York. Studio prices fell 7 percent at those properties to $2,329 and two-bedrooms declined almost 6.9 percent to $5,161. Soho and TriBeCa were the most expensive neighborhoods.

Rents in Manhattan are falling as unemployment climbs. The number of job seekers rose to 402,200 in July, the most since 1992, New York City’s Comptroller William Thompson said yesterday. Landlords are offering incentives such as free rent and paying brokerage fees to lure tenants, said Daniel Baum, chief executive officer of the Real Estate Group.

“The concessions out there right now are pretty aggressive,” he said.

The city’s unemployment rate climbed to a 12-year high of 9.6 percent in July even as the national rate ticked down to 9.4 percent. The U.S. economy has lost 6.7 million jobs since the recession began in December 2007, making it the biggest employment slump in the last eight decades. Economists surveyed by Bloomberg predict the unemployment rate will reach 10 percent by early next year.

Comment by NYCityBoy
2009-08-26 06:54:31

“The city’s unemployment rate climbed to a 12-year high of 9.6 percent in July even as the national rate ticked down to 9.4 percent.”

And those that are working are making less money. Just ask the car services, the taxi drivers, the bartenders, the hotel people and even the thousands of people in the financial services industry. The stock market may be rallying but salaries are definitely not rising.

 
Comment by potential buyer
2009-08-26 15:09:30

Why would anyone pay that astronomical rent in Manhattan when there is a wonderful public transportation system in and around NYC?

Comment by NYCityBoy
2009-08-26 15:43:12

If you live and work in Manhattan it is great. The last time I drove a car was last December. Many of my co-workers that live in those outlying areas have cars. My rent may be higher but basic needs are shelter + transportation. My transportation costs are very low.

Many of my co-workers have commutes that are an hour or more each way. They also pay high commuting costs, whether it is a bus, New Jersey Transit, Metro North or Long Island Railroad. They gush about how their commute into Manhattan is so simple. Ask them what it’s like when a snowflake is in the air or a rain storm kicks up. That simple commute becomes a big pain in the rear-end. They come in swearing.

Getting in and out of Manhattan on weekends and off-peak hours is a pain. The subway doesn’t run as frequently. It doesn’t run express. If you like Manhattan it is nicer to live here and not deal with that on the weekends. The last time I set foot off of Manhattan for personal reasons was July 4th. Oh, wait I think we did go out to dinner with mgnyc99 a couple weeks after that. Those are the only times recently that I left Manhattan.

My rent went down quite a bit this year. That was great. My time and convenience have value for me. Living in Manhattan allows me to keep more of my time and that is the only commodity that can’t be bought.

Comment by green_shots
2009-08-27 06:17:07

I commuted from suburban NJ to downtown NYC for 6 years. Between train station parking, train ticket, and ferry ticket it ran about $600/month. Plus it took on average 1.5 to 2 hours, and that’s if you hit everything right. On weekends, forget it

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Comment by aNYCdj
2009-08-26 16:28:33

Like NYCboy said its time vs money I live in sunnyside just 15-20 min from grand central and that’s after taking the bus on the corner, it takes 10-15 min longer to get home due to where i have to get off the 7 subway, but i have the ability to park my car here.

Also if you have to put in a lot of hours being close to work is great, or if someone calls in sick they call you first and you get some nice OT.

 
 
 
Comment by cougar91
2009-08-26 07:23:53

We need a Cash For Remorse program:

Clunker Blues? You Aren’t Alone.
Published: Tuesday, 25 Aug 2009
By: Phil LeBeau

For the three or four people I know who have taken advantage of the Cash for Clunkers program, the euphoria of dumping an old car while buying a brand new ride has been tempered by the sobering reality they now signed up for a monthly car payment. None of them regret making the deal, but they certainly aren’t excited about now having to shell out $300-$500 a month for an auto loan. When one friend started complaining about having a car payment again, I chuckled and thought, “Yeah, that usually goes hand in hand with buying a new car.”

I bring this up because a new survey of Cash for Clunker participants by CNW Research found a higher than normal percentage of buyers “…have some or serious doubts they should have made the new-vehicle acquisition.” To be exact, CNW says 17 percent of 1000 people surveyed are now showing buyer remorse, compared to an average of 6-8% in a non-clunker environment. According to CNW, the reality of having to pay $275-$350 every month has some clunker participants worried about the impact on their monthly budgets.

This shouldn’t come as a surprise since the program targeted people driving old gas guzzlers. There’s a reason some of those people drove those cars: they either didn’t want or couldn’t afford a monthly car payment. That’s not a knock on those driving older cars, it’s simply reality. For many people, keeping the old car running fit the budget even if it wasn’t exactly what they wanted to be driving.

So why did they take the Cash for Clunker plunge? $4,500 (or more) being knocked off the sticker price of a new car is a pretty strong incentive. Throw that discount in with the thought of driving a shiny new car that won’t (or shouldn’t) break down and you have a combination too powerful for some people to resist. Now that the monthly auto payments are starting, some of those people are apparently having second thoughts.

Comment by cougar91
2009-08-26 07:30:42

I wonder how many of the recent first-time home buyers fall into this “remorseful” category and bite off more than they can chew to take advantage of the $8K credit? It’s going to be interesting to see the default rate of these first-time buyers vs. non-bubble first-time buyers let’s say from the early to mid 1990’s, when that type of data becomes available sometime next year.

 
Comment by In Montana
2009-08-26 09:24:02

LMAO. Reminds me of a recipient of a Habitat for Humanity house who complained about having to make the payments.

 
Comment by measton
2009-08-26 09:48:53

Yep
So now we have a lot of people who have 3-500 dollars less each month to spend on anything else for the next 3-6years, including house payments.

Comment by Bill in Carolina
2009-08-26 13:36:37

Guess what? The C4C rebate is taxable income! That will double the remorse.

 
 
 
Comment by Hwy50ina49Dodge
2009-08-26 07:24:04

News from behind “The O.C.” curtain: ;-)

(FPSS is a big proponent of “Timing”) ;-)

(No worries everyone involved..had a degree with a minor in “sensitivity”)

UC-Irvine laid off 21 facilities and maintenance people last Thursday, Aug. 20, in the first big layoff due to budget cuts, a university spokeswoman confirmed today.

“The workers were notified right after the school’s annual Staff Appreciation Day luncheon…”

“There were some delays in getting the notice out,” she said. “When they finally got it done it, unfortunately, fell on the day of the staff picnic.”

August 25th, 2009, by Mary Ann Milbourn, OC Register

Comment by Cassandra
2009-08-26 08:05:12

Ah yes, welcome our friend, Deferred Maintenance.

Comment by Hwy50ina49Dodge
2009-08-26 09:18:01

Hey Cassandra that’s a good one, “our friend, Deferred Maintenance” …I’ll and him to my list of “characters” in my modern version of “Pilgrim’s Progress” :-)

 
 
Comment by Prime_Is_Contained
2009-08-26 08:28:28

I’ll try to fill in for FPSS here:

BWAAHAAHAHAHAAAHAHAHAHAHAAAAHAAHAHAHAHAHAHAHA

Too priceless…

“We appreciate you……………….coming in today, but we won’t be needing you to come in tomorrow!”

Comment by Neil
2009-08-26 09:38:57

I cannot take schadenfreude from seeing maintenance people laid off. Yea… we have a bubble in the universities that’s HUGE, but of all the people to cut, these I feel for the most.

Its time to cut the UC overhead. In other words, administrator positions and salaries. Heck… keep going through all the California school districts. Get down to the same administrative overhead to teach costs they had in the 1970’s. Cut teachers… cut administrators (preferably the district level).

But it is ironic they did this on appreciation day…

Got Popcorn?
Neil

Comment by SaladSD
2009-08-26 12:14:34

First, we have to get rid of all the regulations that parents have clamored for in the past 30 years. That’s why we have the large bureacracy and overhead.

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Comment by mina
2009-08-26 10:06:18

I think I missed it somewhere, but where is FPSS?

Comment by Kim
2009-08-26 10:12:37

I’ve seen Da Kitty post on weekends, but not during the week in a long while.

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Comment by hip in zilker
2009-08-26 10:25:11

Recently posted that he was off doing summer fun things but would check in now and then.

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Comment by hip in zilker
2009-08-26 11:18:22

and that was on a weekend

 
 
 
 
 
Comment by wmbz
2009-08-26 07:25:32

Expect “Better Times” in Late ‘09 Even as Unemployment Keeps Rising
Aug 26, 2009

After months, or maybe years, of doom and gloom, are you feeling strangely optimistic about the economy? Think buying that house isn’t such a bad idea after all? You’re not alone.

Tuesday brought us more positive news on the housing and consumer front. The S&P/Case-Shiller Index rose 2.9% in the second quarter vs. the first, the first quarterly increase in home prices in three years. And, the Conference Board’s consumer confidence index came in higher than expectations. Meanwhile, the S&P 500 hit its highest level of the year intraday Tuesday and has risen about 50% since bottoming in early March.

Economists are feeling cautiously optimistic as well. David Blitzer, economist and chairman of S&P’s Index Committee expects “better times in the second half” and he has a “strong sense that the recession is in the process of ending.” He cites industrial production - which was up 0.5% in July – as evidence of a turn.

But let’s not get too ahead of ourselves.

Many questions remain about the sustainability of the recovery. Blitzer predicts the jobs market will remain weak and the unemployment rate will peak “north of 10%” – even if the Fed continues its expansionary policies.

Before we call the recession dead, one needs more proof housing has not only bottomed but is starting to improve. “Once you get into the beginning of next year housing has got be doing its part to keep this thing going,” Blitzer says.

But let’s say these green-shoots do start blooming. Blitzer says we’re still not out of the woods. The key then becomes the Fed’s exit strategy, which Blitzer believes must be done quietly as to not spook the markets. “They don’t want headlines ‘Fed shifts gears’ because that will get everybody nervous,” he says, suggesting the risks of a double-dip outweigh inflation concerns, at least for now.

Comment by Eddie
2009-08-26 09:34:28

I have a clunker. Went to see what the $4500 would get me. Turns out the dealers were asking MSRP for all the models that qualified instead of discounting heavily as they were doing pre-c4c. All the c4c would have done for me is get me a car for the same effective price as without it, but I’d end up a clunker short. And apparently pay state income tax on $4500 too. Thanks but no thanks.

Comment by Kim
2009-08-26 10:11:13

“And apparently pay state income tax on $4500 too.”

I think the income tax thing was no more than a rumor. The customers don’t pay income tax on that rebate, however I am still unclear as to whether the dealers might have to. There may have been sales taxes, though, depending on the state.

 
Comment by Jon
2009-08-26 10:30:09

Guy across the street is a life-long car salesman. He says most dealerships mark up a new car by $6000 and a late model, in good shape, used car by $4000. Most car dealerships finance 100% of the cost of the cars sitting on the lot. If a car isn’t moving they are losing money.

His mantra is that you can always get $4k off a new car and $3k off a used car, assuming your not dealing with the “premium” market (Mercedes, etc…).

 
 
 
Comment by wmbz
2009-08-26 07:32:55

US thrifts earn $4 million in 2nd quarter, first profit since late ‘07; 40 on ‘problem’ list’.

WASHINGTON (AP) — U.S. thrifts eked out a $4 million profit in the second quarter, but the number of troubled institutions continued to rise.

The Office of Thrift Supervision says the small profit in the April-June period, marked the industry’s first positive earnings since the third quarter of 2007. It compared with a loss of $5.4 billion in the year-ago period, and $1.62 billion in the first quarter of this year.

The agency also says the number of “problem thrifts” increased to 40, from 31 in the January-March period.

Thrifts differ from banks in that, by law, they must have at least 65 percent of their lending in mortgages and other consumer loans — making them particularly vulnerable to the housing downturn.

Comment by az_lender
2009-08-26 07:42:20

Does anyone know how to obtain an actual list of the 40 “problem thrifts” ? I went to the website of the Office of Thrift Supervision but was unable to unearth such a list there.

 
 
Comment by dimedropped
2009-08-26 07:33:58

No wonder sales are up….I was reading last months MLS sales prices in Orlando metro area and it reads like a furniture sale as opposed to RE. Condos are going for $4500.2/2 with 1090 sf.

Notice that NAR doesn’t discuss the median sales price lately?

Comment by cougar91
2009-08-26 07:37:37

$4500? Don’t you mean $45,000? If it’s only $4500 I would buy one.

Comment by Prime_Is_Contained
2009-08-26 08:31:31

Careful—you might be the only person in your entire building paying the HOA fees.

Comment by cougar91
2009-08-26 08:37:16

True, but max. walk away cost is $4,500 + some transaction cost. A few months of CD interests for me.

I should have qualified my statement by adding that of course it can’t be one of those old and run-down condo conversion units which are more trouble than they are worth even at $4,500. But I suspect that’s what these $4,500 2/2 units are.

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Comment by dimedropped
2009-08-26 07:38:34

Oh if you are thinking of buying one of these in Orlando you should know that 10,000 people moved out last year. Also recognize that we are losing about 500 jobs per week. Other than that everything is great.

Did I mention that most associations owe thousands in back fees and special assessments on each unit. Some high rise condos have no water at this point as they have been cutoff for non payment.

Comment by Ol'Bubba
2009-08-26 09:25:11

If that’s true than all I have to say is “holy freakin’ moley”.

Is all that true, dimer? Say it ain’t so.

Comment by DinOR
2009-08-26 14:34:22

“Say it ain’t so”

Oh… stop being such a wuss! So you have to carry 5 gal. buckets of water UP 5 flights of stairs? ( We’ll assume the elevator isn’t working either? )

Oh and you’ll be coming back down with a 5 gal. bucket of..?

God, where’s the REIC accountability for turning us into a 3rd World country? Hello..?

 
 
Comment by Hwy50ina49Dodge
2009-08-26 09:42:01

“…Also recognize that we are losing about 500 jobs per week. Other than that everything is great.” :-)

The Federal minimum wage has increased to: $7.25 - July 24, 2009

(you’ll find this referenced a little further up the tread)

Antoine de Saint-Exupery:

“If you want to build a ship, don’t herd people together to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” :-)

 
 
Comment by dimedropped
2009-08-26 07:40:06

$4500 is correct. Feel like a bottom to you? I believe that the banks will be giving them away within a year. We got thousands of empty ones.

Comment by cougar91
2009-08-26 07:43:20

Can you post a link or give a MLS # for the $4,500 2/2 condo? If it’s one of this old and run-down conversion units, then I can understand as those units are often in poor condition with possible structure issues.

 
 
Comment by NYCityBoy
2009-08-26 07:51:46

I need to reload the Joshua Tree extension. Does anybody have the URL where it was at? Thank you.

Comment by aNYCdj
Comment by samk
2009-08-26 10:54:21

Nice! I didn’t even know it existed!

Finally…an “Ignore” button of sorts.

 
Comment by NYCityBoy
2009-08-26 12:17:55

DJ, thank you so much. Once you’ve had the Joshua Tree, you can’t live without it. Wait, that didn’t sound good.

Comment by Carl Morris
2009-08-26 13:29:44

Hah hah :-). I second the usefulness of it, especially when it comes to checking on the late conversation from the previous day. Unfortunately the ignore feature hasn’t worked out so well for me and it’s my own fault. I get bored and peek anyway. It does help me to resist the urge to respond though, knowing that it’s my own fault I had to read such crap. So I guess it is useful in that respect.

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Comment by hip in zilker
2009-08-26 13:51:03

I ABSOLUTELY LOVE the JT extension for checking previous conversations, for efficiently checking updates on days with limited HBB time, and for easy formatting and previewing.

I don’t use the ignore feature. I like being part of a group with diversity of opinion and if I cut some poster(s) out, I would (artificially) narrow that diversity AND miss out on some humorous and human interest posts from individuals whose posts sometimes get up my nose.

I guess I’d rather be aggravated by some posts than narrow the parameters of the conversation.

And, as is often noted, there’s always scrolling.

 
 
 
 
 
Comment by Eddie
2009-08-26 08:07:41

Case Shiller is up.
New home sales up.
Inventory is down.
Prices are flat (-0.1% last month).

======================

Sales of newly built U.S. single-family homes rose for a fourth straight month in July to set their fastest pace since last September, while the inventory of unsold homes fell to the lowest level in 16 years, a government report showed on Wednesday.

The Commerce Department said sales rose 9.6 percent to a 433,000 annual pace, the highest in ten months, from an upwardly revised 395,000 in June.

The median home sales price in July fell 11.5 percent to $210,100 from a year earlier, the department said.

Compared to June, the median price slipped 0.1 percent.

The inventory of homes available for sale in July fell 3.2 percent to 271,000 units, the lowest since March 1993, the department said.

Comment by mrktMaven
2009-08-26 08:15:03

Buy with both hands, my friend. Ignore the naysayers.

 
Comment by pressboardbox
2009-08-26 08:22:41

“New U.S. home sales surged 9.6 percent in July, rising for the fourth straight month and beating expectations as the housing market marches steadily back from its historic downturn.”

From yahoo finance - actual headline

ok, let me rewrite it:

New U.S. home sales were up slightly due to much lower prices and strong government incentives which are soon to expire as the housing market temporarily pauses in its freefall due to massive government intervention the likes of which no human has ever seen.

Comment by eastcoaster
2009-08-26 08:45:08

Thank you for that, pressboardbox.

The thing is, I think Eddie is pretty much like the majority of people out there. I hear it from everyone all around me (not just realtors)…”Now’s the best time for you to buy!”…”I’m making an offer tonight - can’t miss out on that $8,000!”…etc.

Admittedly (as many of you know), I start caving into the pressure from time to time. The difference between people like Eddie and myself is - I come to the blog to be talked off the ledge. And I always am (thank you fellow HBBers)! He seems to be like the majority of the sheeple who don’t want to be talked off a ledge - who truly want to believe the worst is over.

However, if this is the bottom - then I will die a forever renter. Still too pricey for me outside of Philly - and I make a decent salary and have more than 20% to put down. Not sure where Eddie lives, maybe it’s different there (and I sort of mean that - if I lived in FL, I’d probably believe the bottom was here or near). But in my neck of the woods? No way.

Comment by Eddie
2009-08-26 09:43:07

I am looking to buy in Florida - Tampa/St Pete specifically, but I don’t live there right now.

I don’t dispute that government manipulation is part of the reason for the increase in sales/price. But so what? Govt manipulation in real estate has been the case for decades and it’s not stopping any time soon.

The $8K credit is making people buy. You may not agree with it and I don’t either. But that doesn’t change the fact that people are buying houses with it. And I think we all know the credit will get extended past November, and I think increased to $15,000.

Lots of things are happening that I don’t agree with, doesn’t make it any less “real”. I really don’t like that the government owns banks. But I bought a lot of XLF earlier this year when it was under $10 precisely because of the govt buyouts. And I have seen a 50%+ return on my investment so far. I can huff and puff and scream til I’m blue in the face about government intervention in the market. Or I can go along and profit from it. The choice is an easy one.

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Comment by Ben Jones
2009-08-26 10:41:45

‘Lots of things are happening that I don’t agree with…I can huff and puff and scream til I’m blue in the face about government intervention in the market. Or I can go along and profit from it.’

Oh, you’re profiting from buying houses now? Yes, the old, “I’m not a troll, but, but” routine.

Why are you wasting time talking to the HBB when there are all these “profits” to be made? And note that you are making the same case the trolls were making in 2005-06-07, etc. You know where they are now? Well, they ain’t at the foreclosure I’m working on right now. These FB’s flew off to Wyoming.

Again, why stop making profits at one? Buy 5 or 10 and let the government do what has never happened in history, which is reinflate a bubble! After all, they couldn’t take water to New Orleans, but they will make YOU rich!

You’re a troll dude, plain and simple.

 
Comment by Jon
2009-08-26 10:43:26

Eddie,

A little caution. I live on the east coast of Florida. Median SFH price has dropped from a high of $256K down to $117K last month. Lots of folks think the bottom is in. But, median SFH prices in 1999 was $85K and median household income has actually declined over the last 10 years. The population is in decline. Industry has been shipped out.

I expect to see median house prices fall back to $85K before this is over. And that might be a few years away.

 
 
Comment by X-philly
2009-08-26 10:16:08

We’re located in the “Sticky Belt” -down the East coast from Boston to D.C.

I wish I could access that spreadsheet from National City. They had historical prices from the 1980s to present -well until PNC acquired them - updated quarterly. In the Philadelphia metro, there was a forty point spread between the top of a real estate cycle and the bottom.

I’m not trying to call a bottom, however right now the asking prices I’ve seen are still on the upside of the baseline.

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Comment by X-philly
2009-08-26 10:27:53

I’m not trying to call a bottom time the bottom.

And I haven’t submitted any offers at all because sellers around here aren’t softened up enough to accept lowball.

 
Comment by eastcoaster
2009-08-26 10:41:51

True that, X-philly.

 
 
Comment by Professor Bear
2009-08-26 10:21:25

“The difference between people like Eddie and myself is - I come to the blog to be talked off the ledge.”

I would be happy to talk Eddie off the fence:

Faster, Pussycat, buy, buy!!!

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Comment by patient renter
2009-08-26 10:56:13

“Inventory is down.”

Correction: MARKET inventory is down.

There is the seen, and there is the unseen.

Comment by Professor Bear
2009-08-26 12:41:12

There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.

–Donald Rumsfeld–

So it goes with the shadow inventory.

Comment by packman
2009-08-26 12:58:04

LOL - on the surface that’s a really goofy statement by Donny, but in reality it’s quite true. I see it all the time in engineering, for instance; same is true for just about any field - economic, warfare, and romance for that matter.

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Comment by slb
2009-08-26 13:31:34

And the ‘knowns’ are all too often nothing more than beliefs based on folklore and/or intellectual sloth.

 
Comment by Hwy50ina49Dodge
2009-08-26 14:31:30

“…intellectual sloth” ;-) …my mind read this: “intellectual sleuth”

and flashed back to this:

What Happened Before The Big Bang?

“…The idea that the universe erupted with a Big Bang explosion has been a big barrier in scientific attempts to understand the origin of our expanding universe, although the Big Bang long has been considered by physicists to be the best model. As described by Einstein’s Theory of General Relativity, the origin of the Big Bang is a mathematically nonsensical state — a “singularity” of zero volume that nevertheless contained infinite density and infinitely large energy.

Now, however, Bojowald and other physicists at Penn State are exploring territory unknown even to Einstein — the time before the Big Bang — using a mathematical time machine called Loop Quantum Gravity. This theory, which combines Einstein’s Theory of General Relativity with equations of quantum physics that did not exist in Einstein’s day, is the first mathematical description to systematically establish the existence of the Big Bounce and to deduce properties of the earlier universe from which our own may have sprung. For scientists, the Big Bounce opens a crack in the barrier that was the Big Bang.

“Einstein’s Theory of General Relativity does not include the quantum physics that you must have in order to describe the extremely high energies that dominated our universe during its very early evolution,” Bojowald explained, “but we now have Loop Quantum Gravity, a theory that does include the necessary quantum physics.” Loop Quantum Gravity was pioneered and is being developed in the Penn State Institute for Gravitational Physics and Geometry, and is now a leading approach to the goal of unifying general relativity with quantum physics. Scientists using this theory to trace our universe backward in time have found that its beginning point had a minimum volume that is not zero and a maximum energy that is not infinite. As a result of these limits, the theory’s equations continue to produce valid mathematical results past the point of the classical Big Bang, giving scientists a window into the time before the Big Bounce.

Quantum-gravity theory indicates that the fabric of space-time has an “atomic” geometry that is woven with one-dimensional quantum threads. This fabric tears violently under the extreme conditions dominated by quantum physics near the Big Bounce, causing gravity to become strongly repulsive so that, instead of vanishing into infinity as predicted by Einstein’s Theory of General Relativity, the universe rebounded in the Big Bounce that gave birth to our expanding universe. The theory reveals a contracting universe before the Big Bounce, with space-time geometry that otherwise was similar to that of our universe today.”

http://www.sciencedaily.com/releases/2007/07/070702084231.htm

“Consequences, Schmonsequences, as long as I’m rich.” Daffy Duck

 
 
Comment by Hwy50ina49Dodge
2009-08-26 13:32:38

There are also, unknown knowns…but I’m a Taoist, and I’m not telling. ;-)

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Comment by Hwy50ina49Dodge
2009-08-26 13:39:17

Ha, that prompted this memory:

The was young girl who got her paper turned back with a circled “C”…when asked to describe something interesting that happened over summer vacation she had written that while in Argentina she watched as an old man on the wharf used a rope to tie “holes” together…the teacher remarked that she didn’t understand what was really happening… :-)

 
 
 
 
 
Comment by wmbz
2009-08-26 09:01:37

Just another shining example among 1000’s of gubmint programs…

Feds: Stimulus money sent to 4,000 cons
Herald report spurs probe…

One day after the Herald reported some surprised Bay State inmates - including murderers and rapists - were cashing in $250 stimulus checks, federal officials revealed the same behind-bars bonus was mailed to nearly 4,000 cons nationwide.

A federal watchdog is now probing how the cons were cut the checks. The same cash also may have been sent to fugitive felons, people kicked out of the country and even individuals now deceased.

It’s all part of the massive American Recovery and Reinvestment Act of 2009 - and what is becoming an accounting nightmare for red-faced feds.

“President Obama’s $787 billion stimulus bill has done more to help convicted criminals than it has to actually boost our economy and create jobs,” said Republican National Committee spokeswoman Sara Sendek.

The Inspector General of Social Security is now tracing the checks that were mailed to 3,900 prisoners at a cost of nearly $1 million after yesterday’s report in the Herald.

Social Security Administration spokesman Stephen Richardson said yesterday none of the prisoner recipients receive monthly Social Security benefits, meaning they should not qualify for a stimulus check. Such benefits are generally cut off to the incarcerated.

The IG also is investigating whether any improper payments were made to dead beneficiaries, felons on the run from the law, individuals living overseas and recipients no longer legally authorized to live in the United States, said IG spokesman George Penn.

Among the 23 inmate recipients in Massachusetts mentioned in yesterday’s Herald are a prisoner convicted of first-degree murder, three prisoners jailed for second-degree murder and five convicted rapists, according to the state Department of Correction.

Comment by sf jack
2009-08-26 09:15:01

And honestly…

Does anyone wonder why some are having trouble accepting more government in a healthcare system?

Comment by ET-Chicago
2009-08-26 09:23:23

Does anyone wonder why some are having trouble accepting more government in a healthcare system?

Yes.

 
Comment by exeter
2009-08-26 09:52:31

“honestly”? From you? lmao.

Comment by DinOR
2009-08-26 10:59:17

Yeah, I’m not sure what the big stink is here? I’m sure a lot of those guys ‘had’ been on the outside, made wages and paid taxes etc. Then… they got busted and sent to the slammer.

Truthfully, at 4,000, I think they did a fairly good job. Imagine -any- election w/ only 4k fraudulent votes? This doesn’t even register on my Agravation-meter.

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Comment by DennisN
2009-08-26 09:08:23

Let me repost my dumb question….

What happens to a bank’s bondholders when the FDIC seizes it and sells it off to another bank?

Comment by joeyinCalif
2009-08-26 09:27:10

i’m pretty sure that when WaMu went bust and Chase absorbed them, both WaMu’s shareholders and bond holders ate it.

But if there were enough assets to reimburse some amount? I dunno who has priority after the depositors. My guess is bond holders.

 
Comment by Professor Bear
2009-08-26 09:48:44

Why dumb?

Comment by DennisN
2009-08-26 10:15:41

Well I’d think the answer would be “bondholders are wiped out” or “bondholders are transferred to the new bank”. Those answers are diametrically opposed.

Zions Bank (aka Bank of Olygal) is selling 1 year bonds at 7%+, but they are IIUC not in the best shape financially. As a depositor I get emails from them about these bond offerings.

Comment by Professor Bear
2009-08-26 10:19:47

General principle of finance:

Yields that look too good to be true often reflect high default risk premiums.

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Comment by exeter
2009-08-26 15:23:19

I would think high yield and high default risk premium is synonymous. Aren’t the terms interchangeable?

 
Comment by Professor Bear
2009-08-26 17:16:35

“I would think high yield and high default risk premium is synonymous. Aren’t the terms interchangeable?”

They may often be used interchangeably, but they are not technically synonymous. For a counter example, look up the 30-year Treasury yields circa 1980-1982; to my recollection they hit 14 percent give or take a few basis points — an all-time ‘high yield’ over the course of Treasury bond history. However, this was arguably due to an inflation risk premium rather than a default risk premium, as accelerating inflation in the late 1970s had the bond market on high alert that a period of hyperinflation may have just begun.

The point is, if you have a technology called a printing press up and running, you need never technically default on your obligations (though if the printing press churns out paper money, it may be a good idea for households to keep their wheelbarrows handy…).

 
 
Comment by DinOR
2009-08-26 11:04:19

DennisN,

When our local bank failed, the common stock shareholders were -absolutely- thrown under the bus. ( A few claimed they were still alive, but you know what liars they are! )

Here’s what’s worse. Even though the board never failed to “pay out” a TEN percent dividend qtrly., it was in SHARES not cash! So… shareholders were given even ‘more’ shares of now worthless stock. Such a deal?!

Oh and it’s decimated the town and there’s Zero trust in the business community and everyone is trying to get out from under their lease and rest’s are closing and..?

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Comment by WT Economist
2009-08-26 11:55:28

I’m not completely sure, but I think the idea is this.

The new bank buys the good assets and ongoing busisness of the old bank.

That payment, and the bad assets that sank the old bank stay with the FDIC. So do the stockholders and bondholders. The FDIC, stockholders and bondholders divide the money.

My guess is that the bondholders are wiped out. After all, the FDIC ensures deposits, which take priority over bondholders, which take priority over stockholders. If the FDIC and (if over the limit) depositers are taking a hit, the bondholders must be wiped out.

Comment by DinOR
2009-08-26 14:39:19

WT Economist,

Just point of order here: if the LOSS exceeds $25 mil. then a “Material Loss Review” is performed by the FDIC and State Dept. of Finance & Corp. Securities and IF… negligence is proved, Directors & Officers *CAN* be held personally liable.

As in have their personal assets seized etc. ( Which is where WE are at in the process w/ the “bank” sh!theads )

We just can’t move forward. NO ONE wants to invest in so much as an expresso stand until locals get some justice here.

 
 
 
Comment by Professor Bear
2009-08-26 09:42:32

How’s that Bernanke Bounce looking, now that the reappointment announcement is out of the bag?

True (if mildly-embarrassing) confession:

I decided to take some stock market chips off the table on the reappointment announcement. I have dribbled a little spare change into stocks ever since last summer when the meltdown was underway, on the assumption that a flood of liquidity into the market would buoy stocks at some point this year. Now that everyone is under the impression that recovery is imminent, and that BB will usher in a New Era of prosperity, it seems like a reasonable time to lock in some gains (”Buy the rumor, sell the news.”), especially since the scary months of September-October lie dead ahead . Though bears generally find it extremely distasteful to go long into stocks, they also can recognize sure-thing gambles when they see them.

Thoughts?

Comment by Professor Bear
2009-08-26 09:46:04

Maybe I acted too quickly, as the MarketWatch folks are assuring everyone that increased home sales are resuscitating the stock market?

Home sales revive stocks

Modest declines on heels of durable-goods-orders report are erased as Wall Street increasingly embraces a belief that U.S. housing has bottomed.

Comment by Professor Bear
2009-08-26 12:28:27

So long as the Wall Street-listed builders get plunge protection share price support, what could possibly go wrong?

Aug 26, 2009, 1:46 p.m. EST
Analyst sees September sell-off looming for home builders

By John Spence, MarketWatch

BOSTON (MarketWatch) — One Wall Street analyst on Wednesday predicted a September correction for high-flying home-builder stocks, in the belief that lingering concerns over unemployment will curb investor enthusiasm for the sector.

Robert Stevenson at Fox-Pitt Kelton said housing stocks have become expensive after their big summertime rally. He warned about the “still significant operational headwinds they face over the next 16 months,” such as growing job losses.

‘While the bull-case argument for the group is stronger today than it has been in the past, we believe the recent rally is unsustainable.’

Robert Stevenson, Fox-Pitt Kelton

Builder shares are up fully 46% since July 8 and are outperforming the S&P 500 Index (SPX 1,026, -1.73, -0.17%) by a wide margin, Stevenson said.

“While we expect the negative news flow will continue to lessen in [the second half of 2009], we believe the home-builder stocks have overshot to the upside in the current rally,” the analyst wrote in a research note.

The stocks “have come too far too fast in the last six-plus weeks, and [we] expect the group to sell-off in the near term,” Stevenson added.

 
 
Comment by NYCityBoy
2009-08-26 09:56:26

Congratulations! It sounds like you did well. March was indeed a great time to buy, due to massive liquidity hitting the pool. Unfortunately, none of the bulls can understand that the underlying problems are not solved. They are just getting kicked down the road. They are even getting bigger. Here are just some of the problems.

- Rising taxes

- Unemployment

- Underfunded pensions that could explode

- Massive increase in public debt

- Toxic assets hidden on somebody’s balance sheet (banks, The Fed, corporate America)

- Overpriced housing

- Sagging infrastructure (it seems the stimulus forgot this)

- A dumbed down populous

- An out of control monetary oligarchy

- Massively bloated GSEs

- Underfunded Social Security and Medicare

- Boomer demographic nightmare

There will definitely be times to buy and sell in the years ahead. Unfortunately, we are going through a national menopause and the changes are not going to be easy or comfortable. That is why I will just be contented little NYCityBoy, letting everybody else snatch up those real estate deals. Life is too short to worry about a house when you don’t need to (the stories from my co-worker and his kitchen remodel make me realize this even more).

Comment by DinOR
2009-08-26 11:10:52

NYCityBoy,

Good summation. No, seriously, but don’t think for a minute just b/c someone is ‘long’ ( for the moment ) they’re oblivious to the underlying challenges?

Anything -but-. Think of it as the Eagles or the Stones or whomever making that “one last Final Take The Money And Run Tour!”

And then we tally up and say, “hey, that wasn’t half bad, and I don’t feel nearly as old as I ‘thought’ I would? In fact, it was kind of fun seeing chicks take their tops off in the crowd again! Well, maybe “one more… Final Tour”?”

 
Comment by Professor Bear
2009-08-26 12:11:12

Unfortunately Fortunately, none of the bulls can understand that the underlying problems are not solved.”

BwaHahAhHAHAHAHAHAAHAHAHAAAHAAAAAHAAAAAA!!!

(We miss you, FPSS…)

 
Comment by Professor Bear
2009-08-26 12:49:55

“…the underlying problems are not solved. They are just getting kicked down the road. They are even getting bigger. Here are just some of the problems.”

Not a bull myself, I cannot say whether they are completely missing these points. But there is another perspective which must certainly be driving some of the bullish sentiment, which is the overwhelming strength of the economics profession’s consensus that we are climbing out of recession and the economy is about to get back on track any year now.

In the early 1990s, the end of the recession was dated to 1991, and the economic malaise persisted until 1994 or so in most parts of the country, but if you had started buying stocks at the trough of the 1990 recession and continued to do so through 2000 or so, you would have made a bundle of dough by just buying and holding (and believe me, I know fairly simple people who did exactly this and profited quite handsomely).

The real issue, IMHO, is whether this recession is pretty much like the other post-WWII recessions, or if it is more of a worst-last storm, where a great deal of economic pain still awaits, and it takes much longer than it did to recover from other recessions of the past sixty years.

Comment by NYCityBoy
2009-08-26 13:42:24

but if you had started buying stocks at the trough of the 1990 recession and continued to do so through 2000 or so, you would have made a bundle of dough by just buying and holding (and believe me, I know fairly simple people who did exactly this and profited quite handsomely)

Prof, that sounds so easy. I know a lot of not-so-simple people that got clobbered around 2000. The key to investing is timing. Wait, that doesn’t sound much like investing. It sounds more like gambling. The Wall Street Casino is always open for business.

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Comment by Professor Bear
2009-08-26 14:10:52

Right — I forgot to mention that you would have needed to sell on or around January 1, 2000 :-)

 
Comment by Professor Bear
2009-08-26 14:14:09

“The Wall Street Casino is always open for business.”

As I have often noted, it is really the best casino around, as even members of religious orders which view the Las Vegas style gambling as sinful have nothing against investing in the stock market.

I look forward to politely engaging my LDS FIL in discussion of how well his portfolio weathered last fall’s Wall Street meltdown this X-mas. I can still vividly recall the blank look on his face about a decade ago when I tried to explain the concept of a stock market bubble to him.

 
 
 
 
Comment by Kim
2009-08-26 10:03:39

Take your gains or someone else will.

 
Comment by Professor Bear
2009-08-26 10:09:56

MarketWatch is the leader when it comes to pump-and-dump articles:

U.S. ECONOMY: FOCUS ON HOUSING
Trying something new

After an epic run of bad news, the U.S. housing market looks to be enjoying a turnaround, with new-home sales rising for a fourth straight month. Magnitude of July’s advance is nearly 10%.

 
Comment by mrktMaven
2009-08-26 10:36:33

Closed out last week. True believers out weigh me, however. 870 is the magic number.

 
Comment by Professor Bear
2009-08-26 12:33:10

Time to declare Wall Street bears a critically endangered species?

Aug 26, 2009, 3:25 p.m. EST
Stock advisors sentiment index hits late-2007 levels
Gauge shows fewest portion of bears since last peak of S&P 500

By Laura Mandaro, MarketWatch

SAN FRANCISCO (MarketWatch) — An indicator of investor sentiment on Wednesday showed stock market optimism had hit levels last reached in late 2007, the start of the last bear market and a possible sign that the recent rally is ready for a pullback.

The Investors Intelligence Advisors Sentiment index, which gauges the stock advice of about 150 newsletters and other paid market-advice outlets, said the portion of positive stock advisers jumped to 51.6% in the past week, the highest since December 2007.

Bears fell to 19.8%, the first time since October 2007 that the percentage fell below 20%.

A parallel with October 2007 is notable because the S&P 500 hit a peak that month and then tumbled for 17 months, losing nearly two-thirds its value by the time it hit a March low.

Earlier this week, Bank of America Securities-Merrill Lynch analyst Mary Ann Bartels said she was watching the bear percentage on Investors Intelligence for a break of 20% as one sign that U.S. stocks were reaching an intermediate top.

Since mid-July, the S&P 500 has jumped 17%. It’s up 54% since hitting March lows.

Analysts frequently use stock sentiment gauges as contrarian indicators. When positive sentiment gets high, the thinking goes, a lot of cash has already moved from investors’ savings into the market, leaving less available cash to drive stocks higher.

What positive sentiment means is that stock advisers have been recommending people buy stocks, minimizing their cash holdings, presumably,” said John Gray, an editor at the Investors Intelligence stock research service.

 
 
Comment by Professor Bear
2009-08-26 09:56:28

What is the value of a good FICO score? And does the new system materially affect it for many consumers?

Aug 24, 2009, 8:00 a.m. EST
Making the grade
New credit scoring model may boost some borrowers’ scores

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Even the most responsible borrowers slip up sometimes.

Maybe a utility bill went unpaid after you moved and the missed payment went into collections. Or, perhaps there are unpaid library fines or parking tickets in collections that are hanging onto your credit history and affecting your FICO credit score, which is widely used by lenders to evaluate your ability to repay a debt.
Kids off to college? Talk to your insurer

Smart Money’s Aleksandra Todorova talks with Simon Constable about the insurance issues parents should consider when sending children off to college.

With the newest version of the FICO credit-scoring system, however, minor delinquencies are now overlooked in calculating creditworthiness.

Under the updated scoring model, called FICO 08, small, missed payments lingering in collections with original amounts of $100 or less will no longer do damage to your credit score.

Consumers also are less likely to be penalized for any single delinquency if it occurred two or more years ago — and if their credit history is otherwise unblemished, says FICO /quotes/comstock/13*!fico/quotes/nls/fico (FICO 24.21, +0.09, +0.37%) , formerly Fair Isaac Corp., which developed the FICO scoring system.

“There’s more flexibility with missing a payment,” said Careen Foster, director of global scoring product management for FICO. “If you have a more habitual pattern of paying accounts late…you’re more likely to get penalized for that.”

If a consumer’s credit usage is high, that will be more likely to hurt his or her score with FICO 08. But getting close to your credit-card limits — even if you always pay on time — is penalized in some way in every FICO score, not only the recent edition, Foster said.

Comment by potential buyer
2009-08-26 19:01:47

Now everyone can buy a house with their exemplar credit scores.

 
 
Comment by Olympiagal
2009-08-26 10:03:34

A nice article from the WSJ on bubble psychology.

‘How I Got Burned by Beanie Babies’
http://tinyurl.com/lpfxvf

In the 1980s, I witnessed firsthand the Texas real-estate bubble and covered companies crushed in the junk-bond bubble. I wrote a book about the crash of 1929. And to my terrific shame, at the top of an inflated market, I once paid $50 for a $5 Beanie Baby named Peace.

Comment by Olympiagal
2009-08-26 10:41:59

I remember reading at the time about some rare Beanie Baby that sold for about $11,000, I think it was? An elephant. Wow. Think how much beer, books, and trips to the Chinese buffet THAT would buy!

And I’ve also related this story before–last year I went to a church rummage sale downtown and there was a big ol’ table covered with pristine Beanie Babies, with their tags on them and everything, never been played with. The price? 25 cents apiece, with evidently no takers.
Much like Florida condos….

Comment by packman
2009-08-26 11:15:57

LOL - wow.

The problem with the whole beanie baby craze was that people equated “rare” with “valuable” in the collectibles market.

Well I could go out in my back yard this winter and find an ultra-rare (one-of-a-kind, in fact) snowflake, but that doesn’t make it valuable.

The ignored factor was historical and/or artistic significance - neither of which any beanie baby ever had. In order for a collectible to be valuable it has to be rare and have historical and/or artistic significance. True collectors understand this.

It’s why a rookie Barry Bonds baseball card fetches, and will always fetch, a heck of a lot more than a rookie Jerry White (who?) card, even though there are probably a lot more Bonds cards out there.

Comment by evildoc
2009-08-26 11:49:05

Simply put, there is a difference between rarity (lack of prevalence) and cachet.

And… cachet is malleable, evanescent indeed for artificial fads, though at risk even for established collectables.

And, I say this as owner one of the three highest volume websites for sales of old collectable fountain pens. Really, if in few years $200 means meals for months or yet another toy…

-d

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Comment by Olympiagal
2009-08-26 12:33:43

Oooh, really? I like old pens. My favorite one is one I found at an estate sale for a dime or something like that. Maybe two whole bits. I don’t collect them to collect them, though, I collect them because I like to write and draw with them. I enjoy calligraphy, especially. Which, if you saw my handwriting, you would not believe one speck. If there was a ‘hideous profanation of innocent alphabet letters’ contest I would win, hands down.

 
Comment by lavi d
2009-08-26 12:37:30

cachet, malleable, evanescent

All in one post. Doc, you rock.

 
Comment by DinOR
2009-08-26 14:54:13

Too funny! But one of my big concerns is.., and you have to talk to a lot of people to stumble upon this, but I’ll have to call it a “Composite Character Victim”.

If you cold call enough, you’ll eventually come across people that claim to have been “taken” in every scam conceivable! I mean -everything-! You name it, the S&L Scandal, dot.com, beanies, all the way back to saying their grandfather “lost everything” to the original Charles Ponzi!

It’s kind of sad affliction really? Now, you know it’s BS. No one could have LIVED long enough ( nor continually had liquidity for the -next- scam ) but they’ve told the story so many times, they can tell it by heart. Save the lead card and call them back after the next Junk Bond Scandal or whatever and they’ll have claimed to being “cleaned out” on ‘that’ one TOO! ( Kind of sick )

 
Comment by Hwy50ina49Dodge
2009-08-26 14:56:17

Comment by lavi d
2009-08-26 12:37:30

cachet, malleable, evanescent

All in one post. Doc, you rock.

See what happens when you’re in a class without a “sliding scale”… :-)

 
 
Comment by Hwy50ina49Dodge
2009-08-26 12:04:45

How might it had turned out differently if only they “tagged” them:

“#86 of 20,000,000″ (…until production in China ramps up next Autumn) ;-)

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Comment by Olympiagal
2009-08-26 12:37:37

How might it had turned out differently if only they “tagged” them:
“#86 of 20,000,000″ (…until production in China ramps up next Autumn)

Exactly!

(from an article titled ‘Another ’90’s bad dream”, comparing the Beanies and dot-com bust.)

Both the dot-com and Beanie crazes thrived in an atmosphere of uncertainty. Nobody could say whether the Internet might actually live up to its hype as a transforming technology. As for Beanie Babies, Ty Inc. didn’t advertise and provided almost no information about the toys, so nobody knew for sure how many characters existed or in what numbers or even where you could buy them.

Ahhh, the ever so valuable illusion of scarcity. After all, “they aren’t making any more Beanie Babies/Pets.com shares/land/’luxury’ condos…”

 
Comment by ET-Chicago
2009-08-26 13:17:35

As for Beanie Babies, Ty Inc. didn’t advertise and provided almost no information about the toys, so nobody knew for sure how many characters existed or in what numbers or even where you could buy them.

When I first moved to Chicago in ‘98, I applied at Ty to write bio copy for Beanie Babies — they all had little biographies online. Sadly, I did not get the job. Or perhaps that should read, “Happily, I did not get the job.”

 
Comment by ATE-UP
2009-08-26 14:44:56

Ain’t makin’ no more Shorty’s either, for that matter.

“Ms. Rooster says, “Good! “

 
Comment by Olympiagal
2009-08-26 15:20:56

Ain’t makin’ no more Shorty’s either, for that matter.

That’s because Sweet Baby Jeebus admitted He made a terrible mistake with the first one.

 
Comment by aNYCdj
2009-08-26 15:54:35

Oly jeebus was a test tube baby…and the holy ghost was gods doctor who did a little simple “operation” on mary…..How else could have have do his miracles and rise from the dead?

OK its wayyyyyyyyOT…….Ben slap me……but i had along discussion yesterday about religion and she couldn’t wrap her head around the fact I choose none of the above.

 
 
 
 
Comment by mrktMaven
2009-08-26 10:51:43

“The only way to survive financial busts is to hang on long enough to outrun them.”

ROTFLMAO!!!! BWAAAAAAAHAAAAWWWWAAHHAAAAAA!!!

Comment by Hwy50ina49Dodge
 
 
 
Comment by DennisN
2009-08-26 10:25:44

DinOR,

Did you receive the email I asked Ben to forward to you?

- Dennis

 
Comment by dude
2009-08-26 10:43:38

Glenn Beck said something really funny this morning that I had to share:

“There is an EXOSKELETON being built INSIDE the US government.”

Comment by Hwy50ina49Dodge
2009-08-26 12:00:43

I just knew we would find a way to make useful Cheney’s old “Shadow” gov’t office. ;-)

 
 
Comment by wmbz
2009-08-26 10:53:07

One of our smarter home town robbers! Now you see me, now you don’t…

Doesn’t say what color he painted his face, he was not a white guy.

Robbery suspect spray-paints face for disguise, dies.

COLUMBIA, SC (WIS) - Richland County deputies say a man spray-painted his face in order to disguise himself during a robbery, but died after he had trouble breathing after the robbery.

Sheriff Leon Lott says on July 31 at around 7:00pm 23-year-old Michael Gregory Thomas and 24-year-old Thomas James entered the Sprint PCS store on Sparkleberry Lane, pulled out a guns and demanded money.

Lott says the two men stole wallets, purses and credit cards from employees as well as money from the store before ordering the employees into a bathroom while both men fled.

Lott says Thomas James spray-painted his face in order to conceal his identity during the robbery. Investigators later learned that after the robbery took place, James began having trouble breathing and died.

Comment by DennisN
2009-08-26 11:10:46

Darwin award winner Thomas James…..

Comment by X-philly
2009-08-26 12:03:21

Didn’t he ever hear the story about the Tin Man in the Wizard of Oz? Jack Haley almost died from the silver paint they applied to his face.

Those guys should have spent a little more time watching TCM before they planned their excellent adventure.

Comment by NYCityBoy
2009-08-26 12:56:35

That was actually Buddy Ebsen. He was supposed to be the Tin Man. The aluminum in his face paint nearly killed him and they had to replace him.

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Comment by X-philly
2009-08-26 13:13:20

I’m so glad he didn’t die from the paint.

He was perfect as Jed Clampett…

 
Comment by ATE-UP
2009-08-26 15:30:42

I didn’t know that.

 
 
 
 
Comment by joeyinCalif
2009-08-26 12:22:05

“Damn. I think we huffed it all. [cough!]”
“There’s one can left. [hack!]”
“Let’s spray paint our faces so nobody knows who we are, and rob Sprint… so we can buy more paint.”
“How about we wear Halloween masks? [choke]”
“Nope. Spray paint.”
“How about nylon stockings? We can pull them off fast.”
“Spray paint.”
“Hoodies and sun glasses?”
“Spray paint. [gag]”
“OK.. [wheeze]“

 
Comment by Olympiagal
2009-08-26 12:53:28

Thanks wmbz.
I must be a heartless person, because this story made me laugh merrily. Spray painting yer face?! Jeeze, man, only spraypaint your feet! Everyone knows that.
As for the top parts of you, that’s what Magic Markers and glitter and little gold star decals are for. If only this poor dingle had stuck with those instead he’d still be alive and wasting oxygen.

One of my favorite robber stories is a home-town beauty. Some guy from Shelton robbed the Key West bank over on the Westside of Olympia and then goes flapping earnestly for Eld Inlet in his wetsuit and swimming flippers whilst holding his bags of loot. He was going to swim to Shelton. Mr. Brainiac was lucky the cops tackled him before he reached the water, ’cause no way he would have made it. I would give a lot for a video of this event: ‘Flap flap flap…Oooof!’

Comment by wmbz
2009-08-26 13:08:44

This may be a true story…

After having dug to a depth of 10 feet last year,
> New York
> Scientists found traces of copper wire dating back
> 100 years and came to the conclusion, that their
> ancestors already had a telephone network more than 100
> years ago.
> >
> Not to be outdone by the New Yorkers in the weeks
> that followed, a California archaeologist dug to
> a depth of 20 feet, and shortly after, a story in the
> LA Times
> that read: “California archaeologists, finding traces
> of 200 year old copper wire, have concluded that
> their ancestors already had an advanced
> high-tech communications network a hundred years
> earlier than the New Yorkers.’
> >
> One week later, The State, a local newspaper in
> Columbia, SC reported the following: After digging as
> deep as 30 feet in his pasture near Prosperity
> SC, Bubba Brown, a self-taught
> archaeologist, reported that he found absolutely
> nothing. Bubba has therefore concluded that 300 years
> ago, SC had already gone wireless..
>
>

Comment by Hwy50ina49Dodge
2009-08-26 14:07:42

“…already had an advanced high-tech communications network…Bubba has therefore concluded that 300 years ago, SC had already gone wireless..”

Bubba must have found a mirror that was made before this guy:

The invention of the silvered-glass mirror is credited to German chemist Justus von Liebig in 1835

Those darn injun’s… they not only had sign language & animal calls, they used “Whitey’s” invention in a new innovative way:

“Hey Sarge, what’s that light shinning up on the ridge?” :-)

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Comment by Ol'Bubba
2009-08-26 14:11:40

A northern fairy tale begins with, “Once upon a time…”

A southern fairy tale begins with “Y’all ain’t gonna believe this sh!t…”

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Comment by Hwy50ina49Dodge
2009-08-26 14:14:12

+1 +1 :-)

You all makin’ old Hwy smile today

 
Comment by wmbz
2009-08-26 15:12:54

North vs. South child rearing…

Northern child getting ready to stick a fork into a wall socket…
Parent, Grabs child’s hand and says, don’t do that you could badly hurt yourself.

Southern child getting ready to stick a fork into a wall socket…
Parent, looks at child and says, go ahead you’ll only do it once!

 
Comment by ATE-UP
2009-08-26 15:35:19

:)

 
 
 
 
 
Comment by DennisN
2009-08-26 11:15:18

Deflation story from the field.

I got my monthly natural gas bill today from Intermountain Gas Co.

In it was one of those customer notices about a rate change. But it’s not what you would think. The price of natural gas around here has dropped substantially, so IGS has filed with the Idaho PUC for a 22.2% DECREASE in the price of gas it charges its consumers.

Comment by wmbz
2009-08-26 12:13:45

Wonder when the price of NG will turn upwards?

 
 
Comment by wmbz
2009-08-26 11:27:08

Fed’s Lockhart sees slow, jobless recovery.

WASHINGTON (MarketWatch) — The economic recovery and the pace of improvement in the labor market will be “frustratingly slow,” according to Dennis Lockhart, the president of the Federal Reserve Bank of Atlanta. In a speech to a chamber of commerce audience in Chattanooga, Tenn., Lockhart said businesses seem likely to defer hiring until a pick-up in top-line demand is beyond doubt. When the Fed considers its exit strategy, the “quality” of the recovery will be more important than its “speed,” Lockhart said. His remarks fit with the cautious tone about the economic outlook from policymakers reported by participants at the central bank’s annual retreat in Jackson Hole, Wyo. last weekend.

 
Comment by wmbz
2009-08-26 11:32:39

Just wait until winter…

Power is shut off as bills pile up.
USA Today 8-26-09

More Americans are having their power shut off as the weak economy makes it harder to pay bills.

“We see record numbers of households becoming disconnected or in danger of disconnection,” says Mark Bixby, energy director of Rockford, Ill. Five years ago, his office distributed federal funds annually to about 300 households that had their power cut off. Last year, it was 1,834 households, and the number is likely to go up this year, he says: “It’s families that can’t find work.”

ComEd, which supplies electricity to 3.8 million customers in northern Illinois, says it has disconnected more this year than last but declined to provide specifics. The utility saw a 14% increase in bills 60 days late in the first half of this year compared with the same period last year, spokeswoman Kim Johnson says.

Regulations differ by state, but utilities generally may not cut power off during extremely cold, and in some cases extremely hot, weather.

Utilities say they try to help customers avoid disconnection with payment plans, referrals to social service agencies and grants to pay bills.
FIND MORE STORIES IN: Illinois | Commonwealth Edison | Chris Cox | Public Service Electric and Gas Company

This fiscal year, the federal Administration for Children and Families distributed a record $5.1 billion to states to help low-income households pay energy costs. The federal stimulus package includes $1.5 billion to prevent homelessness, in part by helping people pay utility bills.

Nationwide:

• Piedmont Natural Gas, which has 1 million customers in North Carolina, South Carolina and Tennessee, disconnected 9,039 North Carolina customers from November 2008 through February 2009, up 68% from the same period a year earlier. “The economy’s having an impact,” spokesman David Trusty says.

• Public Service Electric and Gas, which has 2.3 million customers in New Jersey, has seen a 20% increase so far this year in customers at least two months behind, says billing director Victor Viscomi.

This year, 30,000 more customers received financial assistance. Unemployment and foreclosures are growing, Viscomi says, and “bankruptcies are up approximately 30% among customers.”

• At Arizona’s Home Energy Assistance Fund, requests for help with utility bills are up 40% from last year, program manager Katie Morales says.

Chris Cox, 30, of Tucson, called after he got a cutoff notice. The father of four says he’s two months behind and owes $400.

Cox, who works in ad sales, says his commissions have fallen by more than half in four months. “I have family and friends that would have normally been in a position to help, but they aren’t able to now,” he says. “I don’t know what I’m going to do.”

Comment by Hwy50ina49Dodge
2009-08-26 11:57:39

Tsk, Tsk, I just feel for “Utilities” that can’t make a profit $$$$$ on the needs 0f 3.8+ million people, sad, just sad. (What was that saying about leaving enough fruit on the tree, so that some can go missing?”) ;-)

ComEd, which supplies electricity to 3.8 million customers in northern Illinois…

“We see record numbers of households becoming disconnected or in danger of disconnection,” says Mark Bixby, energy director of Rockford, Ill. Five years ago, his office distributed federal funds annually to about 300 households that had their power cut off. Last year, it was 1,834 households, and the number is likely to go up this year, he says: “It’s families that can’t find work.”

 
 
Comment by tresho
2009-08-26 11:40:29

California taxpayers on hook for $1 billion in unconstitional bond sales Tales of misfeasance, nonfeasance, and dumb-feasance.

 
Comment by tresho
2009-08-26 11:54:08

Bankrupt auto suppliers seek exec bonusesCourts asked to OK paying millions as jobs, benefits are cut. Some of the bonuses have come under sharp criticism from General Motors Co. and Ford Motor Co., as well as the trustees named by the Justice Department to monitor bankruptcy cases. “Considering the condition of the automotive industry and the adverse effect on auto suppliers, it is unclear why payments are even needed to retain employees who may have limited options to find employment elsewhere,” said Diana G. Adams, the U.S. trustee in objecting to a plan by Lear Corp.

Comment by Professor Bear
2009-08-26 12:52:02

Seems reasonable enough to me. If Wall Street bank executives that threw away tens or hundreds of billions of dollars qualify for bonuses, then why not bankrupt auto supplier executives as well? Is it really fair to penalize them just because they don’t happen to work at banks?

 
 
Comment by mrktMaven
2009-08-26 12:05:24

The home is Winston’s biggest seductive carrot. Low interest rates — BUY. Cul de Sac — BUY. Pool — BUY. Court yard entry — BUY. Tax Credit — BUY. Ignore falling prices and 30 year commitment. BUY!

 
Comment by Hwy50ina49Dodge
2009-08-26 12:27:25

The world just won’t quit spinning… ;-)

Filed under: “Those Bastards!” …or…”Monsanto gets patent for “Human Roundup” :-)

Researchers Combine Monkey DNA From Two Mothers in One Egg:
By Rob Stein, Washington Post Staff Writer…Wednesday, August 26, 2009

“…But the work also raises a variety of potentially thorny ethical and legal issues, including creating offspring with DNA from two mothers and a father.”

“With this you have potentially three genetic parents,” said David Magnus, director of Stanford University’s Center for Biomedical Ethics. “This will create the potential for legal and social conflicts.”

If applied to people, the work would also alter a family’s genes complement in a permanent way that would be passed down for generations, which would violate a long-standing taboo in altering the so-called “germline” because of the potential of unforeseen consequences. Some experts worry, too, that germline genetic manipulation would give rise to a market in expensive elective genetic enhancements.

Comment by Cassandra
2009-08-26 15:21:32

Better living through chemistry!

 
 
Comment by mrktMaven
2009-08-26 12:29:05

Aug. 26 (Bloomberg) — Pessimism about U.S. stocks fell to the lowest level since the Standard & Poor’s 500 Index peaked in October 2007, as economic reports and policy makers indicate the recession in the world’s largest economy is easing.

Comment by Professor Bear
2009-08-26 12:35:26

Conclusion: The stock market always goes up, as millions and millions of bulls cannot be wrong!

(Brings to mind something I once read on a bathroom wall:

“Eat —-. 10 billion flies can’t be wrong.”)

 
 
Comment by wmbz
2009-08-26 12:34:05

“Artificially Sweetened” Market Could Face “Seismic Readjustment,”

After the heady rally off the March lows, Todd Harrison, CEO of Minyanville.com, now believes the risk-reward favors shorting the market vs. being long.

“This is a Splenda market - because there’s so much artificial sweetener involved,” Harrison says.

After making bullish calls here in February (albeit early) and again late April, he’s more lately shorting the Powershares QQQ with a tight 2% stop. “That’s all I’m willing to lose on this bet,” he says.

Technically, the Nasdaq is currently at a major convergence of the downtrend line from its 2007 peak, long-term resistance at around 2000, and a 50% retracement of decline from the October 2007 highs to the March lows, Harrison says. That setup could result in at least a temporary setback for related stocks.

Longer-term, his concerns center around the novel idea that there’s going to be a price to pay for all the government stimuli that have resuscitated the U.S. economy and given a major jolt to both the equity and credit markets.

“The government is showing its hand and what they want to do: They want to transfer our obligations to our children, which will inherently lower the standard of living to our children,” he says.

But even worse than the shocking $9 trillion deficit America faces over the next decade, Harrison worries that we don’t control our own fate. “That transfer of risk to future generation is in the hands of foreign holders of dollar-denominated assets,” he says. “A seismic currency readjustment is a legitimate risk.”

 
Comment by cobaltblue
2009-08-26 12:41:54

Fed’s Lockhart sees protracted high unemployment

CHATTANOOGA, Tennessee (Reuters) - The U.S. economy is in the early stages of recovery but it will be a while before growth starts to bring down unemployment, a top Federal Reserve official said on Wednesday.

“My forecast envisions a return to positive but subdued gross domestic product growth over the medium term weighed down by significant adjustments to our economy,” Federal Reserve Bank of Atlanta President Dennis Lockhart said in prepared remarks.

“My forecast for a slow recovery implies a protracted period of high unemployment,” Lockhart, a voting member of the Fed’s policy-setting committee this year, told the Chattanooga Area Chamber of Commerce in a luncheon speech.

U.S. unemployment stood at 9.4 percent in July and is expected to peak at 10 percent later this year as companies slashed payrolls in the face of the longest recession since the 1930s Great Depression.

Lockhart also made plain the recovery faced challenges, notably problems in commercial real estate, while businesses remain cautious and credit conditions were still constrained.

The Fed has cut interest rates to almost zero and flooded markets with hundreds of billions of dollars to keep credit flowing and prevent the downturn from being much worse.

Lockhart said he supported the Fed’s stated plan to keep rates low for an extended period, and he expected inflation to remain contained.

But Lockhart also acknowledged that policymakers could not afford to leave stimulative policies in place for too long.

“The challenge my colleagues and I face is navigating between the risk that early removal of monetary stimulus snuffs out the recovery and the risk that protracted monetary accommodation stokes inflation expectations that could ultimately fuel unwelcome inflationary pressures,” he said.

 
Comment by hip in zilker
2009-08-26 12:47:32

This is too funny! I missed it when I read my last paper Vanity Fair, came across it when using the pages as packing material.

Global recession goes far deeper than imagined … Hell near bankruptcy … Lucifer blames excessive sinning … Trophy wives stuck with aging broke husbands … It’s HELL IN CRISIS

partial link: vanityfair.com/culture/features/2009/06/hell-in-crisis200906

 
Comment by wmbz
2009-08-26 13:24:31

Ayn Rand wrote, “when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed.”

Next to a photo of BB in an article be P.Schiff

 
Comment by Professor Bear
2009-08-26 13:38:16

I wonder if the home builders are getting a false “build” signal thanks to the combined effects of Dough-4-Dumps demand stimulus and artificial withholding of residential supply off the market as shadow inventory?

US housing construction slows in July

By Alan Rappeport in New York

Published: August 18 2009 14:29 | Last updated: August 18 2009 14:29

New US residential building slowed in July as construction of multi-family homes dropped sharply while single-family home construction continued to climb steadily, a commerce department report showed on Tuesday.

Separately, the labour department said that wholesale prices recorded their biggest annual decline on record last month thanks to plunging petrol prices, easing fears that government stimulus measures could spur inflation and offering a reminder that deflation continues to be a risk.

Housing starts fell 1 per cent in July from the prior month to an adjusted annual rate of construction of 581,000. The result trailed economists’ expectations of a jump in starts, but the June figures were revised up to show a 6.5 per cent monthly increase after originally showing a 3.6 per cent jump.

Data underlying the overall figure reflect a diverging market, with construction of single-family homes picking up as building of multi-family housing slows. Multi-family home construction was off by 16.7 per cent in July but single-family housing starts, which are considered less volatile, rose for the fifth month running, climbing by 1.7 per cent.

“The underlying picture is still consistent with a slow bottoming in this key sector,” said Alan Ruskin, strategist at RBS Greenwich Capital.

Comment by Professor Bear
2009-08-26 13:39:19

Source: Financial Times

 
 
Comment by wmbz
2009-08-26 14:05:51

From the UK, Welfare does such a wonderful job of motivating…

The ‘Shameless’ generation of benefit addicts: Almost five million adults live in jobless homes.
Daily Mail 26th August 2009

The number of jobless households has risen at its fastest rate since Labour came to power with almost five million people now living in homes where no one works.

New figures reveal a massive 4.8million people of working age now live in a home where no one holds down a job.

The data for April to June this year shows an increase of 500,000 on a year ago before the recession took a crippling grip on Britain.

The percentage of households where no adults work is now 16.9 per cent, up 1.1 per cent on 2008, according to the data from the Office for National Statistics.

It is the highest rate since 1999 and the largest year-on-year increase since 1997 when Labour came to power.

The data will fuel fears that the Government has cultivated a ‘Shameless’ generation dependent on the state and comes after the Daily Mail revealed at least five million people of working age have not done a day’s work since Labour came to power.
Like the five million Britons who have never worked under Labour, characters such as alcoholic Frank Gallagher (David Threlfall) in Shameless live on long-term benefits

Like the five million Britons who have never worked under Labour, characters such as alcoholic Frank Gallagher (David Threlfall) in Shameless live on long-term benefits

The figure does not include the 1.9million children who now live in workless homes, which is up 170,000 on 2008.

Workless households now number 3.3million, up from 240,000, while working homes are at 10.7million - down 410,000.

A massive 40 per cent of single parent families are workless. The rate is highest in the north east at 23.2 per cent and lowest in the East of England at 12.2 per cent.

Comment by potential buyer
2009-08-26 22:44:22

Just as well, since their unemployment is at 8%!

 
 
Comment by Hwy50ina49Dodge
2009-08-26 14:39:57

So, you take two like minded people…what’s the odds that they have the same “ring tone”? (Hwy, pours another glass of wine…) :-)

 
Comment by Professor Bear
2009-08-26 15:01:24

Zum Herz bin ich ein Deutscher.

Financial Times
Germany tells bankers to follow rules or repay bonuses
By Chris Bryant in Berlin and James Wilson in Frankfurt

Published: August 15 2009 03:00 | Last updated: August 15 2009 03:00

German bankers could be forced to repay bonuses if it transpires they have taken unjustifiable risks when making deals, the country’s financial regulator warned yesterday.

Bafin, the regulator, unveiled a set of risk management standards in response to the excessive risk taking and false incentives that policymakers agree contributed to the financial crisis.

Outcry at bankers’ bonuses is widespread in Germany, where the financial crisis confirmed a public suspicion of so- called “Anglo-Saxon” financial engineering. The corporate sector is best-known for family-owned companies that take a long-term outlook, while the bonus culture of banking was anathema to many Germans.

From January 1 all German banks will be obliged to implement new pay structures that outlaw short-term incentives.

 
Comment by Hwy50ina49Dodge
2009-08-26 15:43:38

Everything, but the sense of how to derive such things for themselves, ethically” Anyone else in America fit that mold? ;-)

“You’re talking about kids who had everything — the cars, the tennis courts, swimming pools, credit cards. And yet this happened,” he said at the time of the Menendez trial.

Crime story author Dominick Dunne, 83, dies in NYC
By POLLY ANDERSON (AP)

 
Comment by Sammy Schadenfreude
2009-08-26 16:16:00

While the MSM has become the shills of the corporate cartels who own them, the military has become even more Orwellian when it comes to ensuring “positive” news coverage.

http://news.yahoo.com/s/afp/20090826/pl_afp/afghanistanunrestmilitarymedia

Comment by Hwy50ina49Dodge
2009-08-26 16:35:26

“….According to a recent poll, 51 percent of Americans now say the war is not worth fighting.”

Cheney’s paddle hand is going to be mightily sore for a man of his age in “retirement” :-)

 
 
Comment by Hwy50ina49Dodge
2009-08-26 16:30:08

So, economically speaking Mr. Bear…where do we stand with “useful” housing & “useless” housing, or does the concept of Entropy…remain solely in the domain of physics? :-)

“Loosely speaking, when a system’s energy is divided into its “useful” energy (energy that can be used, for example, to push a piston), and its “useless energy” (that energy which cannot be used to do external work), then entropy can be used to estimate the “useless”, “stray”, or “lost” energy, which depends on the entropy of the system and the absolute temperature of the surroundings. As the “useful” and “useless” energy both depend on the surroundings, neither one is a function of the state of the system, and both can be quite tricky to quantify. This stands in contrast to the system’s Gibbs free energy, Helmholtz free energy, entropy, and temperature, all of which are well-defined functions of state. The Gibbs and Helmholtz free energies depend on the temperature of the system (not the surroundings), and do not purport to measure the “useful” energy”

Comment by Professor Bear
2009-08-26 17:10:45

Are you suggesting there might be a good idea thought up by physicists which economists have not already done their best to steal?

Entropy

The Entropy Law and the Economic Process

Comment by Hwy50ina49Dodge
2009-08-26 19:26:34

“…for surprising as it may seem, the entire stock of natural resources is not worth more than a few days of sunlight!” :-)

(Hwy walks away trying to remember how many gold coins he has purchased over the course of his finite life…no matter, it pales in comparison to aladinsane…)

 
Comment by Hwy50ina49Dodge
2009-08-26 19:56:36

Hey Mr. bear, have you read these listed books?

Comment by Professor Bear
2009-08-26 22:00:22

Entropy, yes. Entropy and the Economic Process is on my unread book list. (Rifkin is a bit of a left wing nutjob, but I still recommend the book as an interesting alternative view to the neoclassical economics catholicism…)

(Comments wont nest below this level)
 
 
 
 
Comment by Professor Bear
2009-08-26 17:05:26

Too-big-to-fail = big-enough-to-tax. I love it!!!

As long as Bernanke is coordinating strategy with fellow central bankers from around the globe, perhaps he can set forth the idea of making sure that this policy is uniformly implemented, in order to not give any one country’s bankers special advantages.

Financial Times
City regulator seeks to deflate financial sector with global tax
By George Parker in London
Published: August 27 2009 00:01 | Last updated: August 27 2009 00:01

The head of Britain’s City watchdog supports the idea of new global taxes on financial transactions, warning that a “swollen” financial sector paying excessive salaries has grown too big for society.

Adair Turner, chairman of the Financial Services Authority, says the debate on bankers’ bonuses has become a “populist diversion” and that more drastic measures may be needed to cut the financial sector down to size.

He also says the FSA should “be very, very wary of seeing the competitiveness of London as a major aim”, claiming the City has become a destabilising factor in the British economy.

His comments, floated in an interview in Prospect magazine published on Thursday, may be read in other financial centres, including New York, as a sign that Britain is becoming increasingly sceptical about the perceived advantages of being a leading financial centre.

Lord Turner’s suggestion that a “Tobin tax” – named after the economist James Tobin – should be considered for financial transactions is also likely to reverberate around the world. The proposed tax, which has previously been championed by development economists and the French government as a means of funding the developing world, has been fiercely opposed by the finance industry.

 
Comment by Professor Bear
2009-08-26 17:36:28

Repeat after me:

Negative wealth effects are not deflation.
Negative wealth effects are not deflation.
Negative wealth effects are not deflation.
Negative wealth effects are not deflation.

California property assessment values fell for first time since 1933

By Mark Glover
mglover@sacbee.com
Published: Wednesday, Aug. 26, 2009 - 12:00 am | Page 8B

The price Californians are paying for a prolonged recession and housing crisis hit home with a thud Tuesday.

For the first time since the California Board of Equalization began keeping records in 1933, the value of all assessed property statewide declined in a year-to-year comparison.

Amid the dismal numbers in BOE’s annual report, the Sacramento region was among the hardest hit.

BOE said assessments statewide for the 2009-10 period totaled $4.44 trillion, a drop of $107.2 billion, or 2.4 percent, from 2008-09.

The value of county-assessed property fell by $107.6 billion, or 2.4 percent, to $4.37 trillion. The value of state-assessed property, mainly privately owned public utilities and railroads, totaled $76.1 billion, a slight increase of $400 million, or 0.5 percent, BOE said.

“We’ve just gotten these figures in from the county assessors who are responsible for assessing property locally, and the (value) declines show that the housing market has been hit hard,” said Anita Gore, BOE spokeswoman. “Several factors are responsible for affecting values, including people buying homes at auction and foreclosures.”

Those durned auction and foreclosure buyers are sinking California property values.

D’oh!

Comment by Hwy50ina49Dodge
2009-08-26 20:13:23

“The value of county-assessed property fell by $107.6 billion, or 2.4 percent, to $4.37 trillion.”

That’s just CA right, right?

Geez, given all the piss and moan about 9 trillion National debt, history will have to rewrite the value of the Louisiana purchase and recognize those responsible for making it happen right?

“The purchase was a vital moment in the presidency of Thomas Jefferson. At the time, it faced domestic opposition as being possibly unconstitutional.”

Let’s get those “TrueBeliever’s™ / TrueDeceiver’s™” yellin’ & screamin’ about this violation of …”small gov’t is best gov’t” ;-)

Comment by Professor Bear
2009-08-26 23:22:10

“The value of county-assessed property fell by $107.6 billion, or 2.4 percent,…”

I am wondering how this would look with a more realistic ‘assessment’ of lost CA property value. Let’s just insert 30 percent to make the point: (30/2.4)*$107.6 billion = $1.3 t. Now you are talking about some real money…

Comment by Hwy50ina49Dodge
2009-08-26 23:54:55

I hope I live long enough to see… in what “state” Mr. Bear chooses his “retirement” ;-)

(Comments wont nest below this level)
 
 
 
 
Comment by Professor Bear
2009-08-26 17:44:20

California real estate ain’t going up any more like it always used to do. Where are all those rich Chinese investors when you need them? ;-)

Just wait until these assessments catch up to present economic reality — you ain’t seen nothin’ yet, baby!

Los Angeles Times Business
REAL ESTATE
California property values fall for the first time in 76 years

The 2.4% drop in the assessed value of all taxable property statewide means less money and more misery for state, local and school district treasuries.

By Marc Lifsher and Nathan Olivarez-Giles

August 26, 2009

Reporting from Los Angeles and Sacramento - The Golden State officially isn’t worth what it was a year ago.

Tax officials reported Tuesday that total statewide property values fell by 2.4% in the latest fiscal year, the first such drop since California began keeping records 76 years ago in the depths of the Great Depression.

The drop results from county tax assessors across the state hustling to lower the values of residential, commercial and industrial properties to reflect damage wrought by the deepest national recession since World War II.

As of June 30, the assessed value of all taxable property in California was $4.448 trillion, down $107.2 billion from a year earlier. The loss means less money and more misery for already strapped state, local and school district treasuries.

Essential public health and safety programs are facing more budget cuts and personnel layoffs, while schools probably will pack more children into each classroom, tax collectors warn.

“It’s pretty astounding. This is something we haven’t been through before,” said Howard Roth, the chief economist at the state Department of Finance. “This will hurt and have a lagging effect on revenues” that could last years.

Thirty-eight of California’s 58 counties suffered year-to-year declines, with 14 counties posting drops of 5% or more, the state Board of Equalization reported.

Southern California values dropped by an average of 2.5%, close to the statewide average. The damage ranged from a decline of 0.6% in Los Angeles County to a decrease of 10.5% in Riverside County.

Regionally, the Central Valley, which experienced a housing construction and sales boom early in the decade as coastal residents sought affordable mortgages, was the hardest hit by the collapsing market. Assessed values fell 9.9% in the northern San Joaquin Valley, 4.8% in greater Sacramento and 4.2% in the southern San Joaquin Valley.

San Francisco was the only highly urban county to show a significant increase in real estate values, 7.1%.

Historically, increasing property values always have been taken for granted in California, a state that for decades has welcomed new residents from across the country and across the world, said Betty Yee, chairwoman of the Board of Equalization, the agency charged with keeping track of real estate tax revenues.

But California can’t count on a natural rebound in housing construction and consumer spending as it did in previous recessions, such as the military-base-closure crisis of the early 1990s and the high-tech bust in 2000-01, Yee said.

The slight rise in housing sales this summer is a hopeful sign but won’t do much to boost tax revenues because homes are “being sold for much less,” Yee said.

In past tough times, Ventura County always managed to post some growth because of sales of higher-priced older properties, Deputy Assessor Huiling Tanouye said.

Her office has reviewed and lowered tax rates on 65,000 out of 90,000 parcels in the last year.

That’s about 25% of the county’s tax roll, Tanouye said. In the meantime, homeowners who think their assessed values are still too high are filing appeals at triple the rate of last year, she said.

“We hear from people who are in dire straits, and they will vent their frustrations to our staff,” Tanouye said. “We are here to listen, but we can’t control what’s going on.”

Foreclosures, she added, are pushing down assessed values even more in poorer parts of the county like Oxnard.

Bank-owned houses, some of which are being sold for as little as a third of their value compared with a few years ago, drive down government revenues because tax bills are recalculated based on the sale price when a property changes hands.

Although the first-ever statewide drop in property values is eye-opening, it shouldn’t be overly alarming, said John Husing, an independent analyst with Economics and Politics Inc. in Redlands.

“Everything was too overpriced, inflated beyond what the market could afford, and so now we’re getting back to reality, now we’re readjusting to the market,” Husing said. “Supply is answering demand again.”

He placed much of the blame for the busted housing market on speculators and mortgage companies, which rushed to put people into loans they couldn’t afford.

“A lot of people wanted houses and there weren’t a lot of houses to be had, so prices went up because we had a shortage,” Husing said. “So all these speculators were diving into the market, buying houses not to live in but to flip them.”

When the economy turned sour, the new homeowners “left the keys on the table and walked away from their homes, and that resulted in the foreclosure crisis,” he said.

Comment by Hwy50ina49Dodge
2009-08-26 20:22:00

“…The drop results from county tax assessors across the state hustling to lower the values of residential, commercial and industrial properties to reflect damage wrought by the deepest national recession since World War II.”

Poor Opie, look at what his Harvard education has done…to everyone… in just 8 months. I’m in “Shock & Awe” :-)

 
Comment by pressboardbox
2009-08-27 05:50:21

No problem here. The state can just raise the millage like they did here in FL. Our property tax rate went up to compensate.

 
 
Comment by Professor Bear
2009-08-26 17:49:32

I am guessing the peak number of foreclosure homes for sale will turn out “higher than Barclay’s expected,” and at a later date. They have underestimated the height and duration of the foreclosure tsunami crest.

* The Wall Street Journal
* REAL ESTATE
* AUGUST 25, 2009

Fewer Catching Up on Lapsed Mortgages

By JAMES R. HAGERTY

Homeowners who fall behind on their mortgage payments have become much less likely to catch up again, a new study shows.

The report from Fitch Ratings Ltd., a credit-rating firm, focuses on a plunge in the “cure rate” for mortgages that were packaged into securities. The study excludes loans guaranteed by government-backed agencies as well as those that weren’t bundled into securities. The cure rate is the portion of delinquent loans that return to current payment status each month.

Fitch found that the cure rate for prime loans dropped to 6.6% as of July from an average of 45% for the years 2000 through 2006. For so-called Alt-A loans — a category between prime and subprime that typically involves borrowers who don’t fully document their income or assets — the cure rate has fallen to 4.3% from 30.2%. In the subprime category, the rate has declined to 5.3% from 19.4%.

“The cure rates have really collapsed,” said Roelof Slump, a managing director at Fitch.

Because borrowers are less willing or able to catch up on payments, foreclosures are likely to remain a big problem. Barclays Capital projects the number of foreclosed homes for sale will peak at 1.15 million in mid-2010, up from an estimated 688,000 as of July 1.

 
Comment by Professor Bear
2009-08-26 17:59:31

How can CA home prices drop by, what, 40 percent or so, but property values barely register any decline whatsoever?

‘Tis — a puzzlement!

Tuesday, August 25, 2009, 1:43pm PDT
California property values drop for first time since 1933
Los Angeles Business from bizjournals -
from the Silicon Valley/San Jose Business Journal

Comment by DennisN
2009-08-26 18:57:15

Well the total assessed value reflects bare land being converted into housing and commercial buildings. Developed land is generally worth more than bare land. But this would only be true with a combined effect of individual properties going up in value and lots of new construction - although either by itself would turn the trick. We know individual properties are not going up in value. We also know that new construction is slowing to a halt. Perhaps the overall effect reflects the curve of new construction.

Comment by DennisN
2009-08-26 18:59:22

Oops this is CA. There’s a prop 13 angle here: assessed property values go up after a sale even if the price has plummeted from a recent bubble value.

Comment by Professor Bear
2009-08-26 19:26:40

My understanding (which could be incorrect) was that Prop 13 places a 2 percent ceiling on annual assessment increases. If there is also a Prop 13 floor, then you are the first individual to alert me to it. Frankly, I doubt they included this feature, as it would be completely useless given that California real estate always goes up.

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Comment by DennisN
2009-08-26 21:05:54

I was talking about a big change in assessed value after a sale.

E.g.

House bought for $100K in 1980 goes up 2% a year.

House reaches bubble estimated “price” of $700K in 2006.

House sells for $420K in 2009 - 40% off the 2006 “price”.

However the assessed value for prop. 13 jumps up from $100K + (2% annual increases) to $420K.

If there are enough houses that sell, it could cause the state total assessed value to go down only slightly even as houses in general drop 40% from 2006 estimates.

 
Comment by Professor Bear
2009-08-26 22:20:40

“If there are enough houses that sell, …”

Dennis — That is a good example, but the ‘If’ you raise is a big one. I don’t know about other parts of CA, but folks in North County, San Diego with homes to sell that were commanding prices north of $700K circa 2005 are so far not dropping their prices to reflect today’s market conditions. The effect you have identified, which would work in principle, has limited impact, due to a dearth of reduced-price high-end sales (so far, at least).

 
 
 
Comment by Professor Bear
2009-08-26 19:30:13

“Developed land is generally worth more than bare land.”

Of course, but that is not the issue here. The question is whether bare land or developed land drop in value faster when both are falling. Since bare land is a production input to developed land, and nobody in their right mind (save perhaps the hope builders) buys production inputs to a sector of the economy experiencing an unmitigated free fall, whereas finished goods (houses) continue selling, albeit more slowly, I would guess that based on fundamental considerations, land prices would actually drop faster than home prices.

But please correct me if you have contrary evidence.

 
 
Comment by Professor Bear
2009-08-26 19:43:52

Important clarification:

California assessments have never before dropped — even all the way back to 1933.

Property values plunge across inland counties

SACRAMENTO–California property isn’t as golden as it used to be.

California has recorded its first decline in property values since at least 1933. That’s when the State Board of Equalization began keeping records.

 
 
Comment by Professor Bear
2009-08-26 19:40:19

Are there any investors out there looking for a steal on a California home priced below $100,000? Come on in and snap ‘em up, while they last! :-)

More Bay Area homes sell for less than $60,000
Carolyn Said, Chronicle Staff Writer
Wednesday, August 26, 2009

Condos for $20,000? Single-family homes for under $60,000? What is this, Detroit?

It’s the topsy-turvy world of Bay Area real estate. Despite studies showing prices slowly rising overall, homes at the low end appear to be playing a game of limbo, flaunting prices comparable to what you’d pay for a car.

Sometimes those ultra-low prices are come-ons to spur a bidding war; sometimes they reflect abysmal house conditions. It’s no surprise that the dirt-cheap properties are located smack in the middle of foreclosure hot spots - Pittsburg, Antioch, Vallejo, Richmond, Oakland. They tend to be either bank-owned foreclosures or short sales (selling for less than is owed).

David Lear of Sotheby’s International Realty in Danville is selling a one-bedroom condo in Pittsburg’s Lakeview complex near Los Medanos College for $48,000 as a short sale. The owner purchased it three years ago for $228,000.

“It shows you how dramatically the market has declined,” he said. “We’re not even the lowest-price unit in there; there’s a similar one for $38,000.”

Comment by Professor Bear
2009-08-26 21:57:41

“David Lear of Sotheby’s International Realty…”

Uh, isn’t Sotheby’s an auction house? I guess there has never been a better time to sell real estate by Dutch auction…

 
 
Comment by Hwy50ina49Dodge
2009-08-26 20:32:20

Blah, blah, blah…

Don Quixote:
Sanity may be madness but the maddest of all is to see life as it is and not as it should be.

 
Comment by FB wants a do over
2009-08-26 21:06:41

test

 
Comment by Professor Bear
2009-08-26 22:04:12

Can someone please ’splain the difference between “huddling” and “insider trading” to a Wall Street outsider? I always thought “huddling” was something done on the football field, but this sounds like something else…

* WALL STREET JOURNAL
* AUGUST 27, 2009

Goldman Subpoenaed on Huddles
Massachusetts Official Worries Tips Leave Some Clients at a Disadvantage

BY SUSANNE CRAIG

William Galvin, Massachusetts’s chief financial regulator, has subpoenaed Wall Street firm Goldman Sachs Group Inc., demanding information on the firm’s weekly trading huddles between its research analysts and traders.

Mr. Galvin, the Massachusetts secretary of the commonwealth, said he is concerned that the huddles, in which Goldman’s research staff give verbal short-term stock tips to the firm’s traders and then its clients, disadvantage some Goldman customers.

Comment by Professor Bear
2009-08-26 22:34:07

“Huddling” brings to mind the kind of “cuddling” that can send a girl off to buy herself a pregnancy test kit. But in the Goldman case, I guess you could say it is the non-huddlers who get screwed…

 
Comment by Hwy50ina49Dodge
2009-08-26 22:59:39

Apollo 13 (Old school)

Houston commander:
“Don’t tell me what it’s designed to do…tell me what it can do…

Hey Mr. Bear,… can this be applied to the “FED” :-)

 
 
Comment by Professor Bear
2009-08-26 22:11:55

Financial Times
US says debt outlook worsening
By Sarah O’Connor, Edward Luce, and Krishna Guha in Washington
Published: August 25 2009 19:37 | Last updated: August 26 2009 01:47

President Barack Obama announced his intention to reappoint Ben Bernanke as chairman of the Federal Reserve on Tuesday as the White House warned of a sharp deterioration in the US fiscal outlook.

Mr Obama said it was Mr Bernanke’s “bold action and out-of-the-box thinking that has helped put the brakes on our economic freefall”. The Fed chief pledged to do everything in his power to “restore a more stable economic and financial environment in which opportunity can again flourish”.

The announcement came as the White House pro jected the budget deficit would be $2,000bn higher over the next 10 years than it had predicted. Taken with a separate forecast by the independent Congressional Budget Office, the news presented a bleak picture of America’s deteriorating debt position.

The CBO released sharply higher deficit projections predicting the 10-year deficit would reach $7,140bn, some $2,700bn more than it had thought in March. Unlike the White House’s calculations, the CBO estimate assumes all policies will stay exactly as they are.

“If you include the administration’s fiscal plans, this implies a deficit increase way in excess of $10 trillion over the next decade – the numbers are deeply alarming,” said Bill Gale, a senior economist at the Brookings Institution.

 
Comment by Professor Bear
2009-08-26 22:16:38

Stop asking them hard questions and go buy yerself some more stocks. Don’t'cha know the stock market always goes up?

Financial Times
Questions over strength of recovery
By Michael Mackenzie
Published: August 26 2009 19:53 | Last updated: August 26 2009 19:53

Amid the thin trading volumes of a typically sluggish August, investors have been caught off balance as the normal relationships between US equities, government bonds and commodity prices have broken down.

At the end of July, the S&P 500 equity composite was below 1,000 points and the price of crude oil loitered below $70 a barrel. During August, the S&P and oil have risen to their highest levels in 10 months, amid hopes of a sustained recovery in the economy.

In contrast, the yield on 10-year Treasury notes has made a circular journey, rising from about 3.50 per cent at the start of the month, peaking near 3.90 per cent in early-August, only to be trading about 3.42 per cent on Wednesday.

“Something has to give when all you see are green arrows for prices across the major asset classes,” says George Goncalves, head of fixed-income strategy at Cantor Fitzgerald. “Strong commodities and stocks with falling bond yields cannot continue, at some point the normal relationships should resume.”

The breakdown between equities and bond yields reveals how divided investors are over the sustainability of the economy’s recovery.

While some equity research touts a V-shaped recovery for the economy, bond investors believe the economy will only derive a short-term boost from the replenishment of inventories. Beyond a bounce in activity this year, the debt-laden consumer is in no position to pick up the baton and accelerate the recovery into 2010, many argue.

“It may well be that more [bond] investors are signing on [to] the ‘sugar high’ from stimulus thesis and [are] worried about what crash lies beyond the boost from homebuyer tax credits, cash-for-clunkers and other temporary/transitory props for the US economy,” says Bill O’Donnell, strategist at RBS Securities.

 
Comment by Professor Bear
2009-08-26 22:31:59

The Icelandic banking crisis offers a special lesson for Megabank, Inc:

“Look on my works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.”

Financial Times
Iceland shows the dangers ahead for us all
By Robert Wade
Published: August 26 2009 19:53 | Last updated: August 26 2009 19:53

In the build-up to the global crisis of 2008, tiny Iceland was a canary in the mine, a leading indicator of wider vulnerabilities. Now, amid growing optimism about global recovery, Iceland may again be a leading indicator of trouble ahead.

In the space of a few days last October Iceland’s whole banking system collapsed and was taken into public ownership, including the three banks which went from nowhere in 2002 to rank among the world’s 300 biggest by 2007. These three now make it into a less glorious league – Moody’s list of the 11 biggest financial bankruptcies in history. The country’s average income fell from 160 per cent of the US’s in 2007 to 80 per cent this year.

The economic and political tipping points vary from place to place. But the news from the canary in the mine suggests people in other vulnerable economies in America and Europe should enjoy the good economic news while they can. There are good reasons to think it may not last.

The writer is professor of political economy at the London School of Economics and author of Governing the Market

 
Comment by Professor Bear
2009-08-26 22:39:09

Uh-oh…

Net Worth
Those who lose homes may face state tax hit
Kathleen Pender
Tuesday, August 25, 2009

Californians who lose their homes in a foreclosure, short-sale or deed in lieu of foreclosure this year could be hit with a state income tax on canceled or forgiven debt.

A state law that temporarily exempted many homeowners from this tax at the state level expired at the end of last year. Attempts to revive it have not been successful.

 
Comment by Professor Bear
2009-08-26 22:54:51

Leapin’ lizards — property values in California are no longer merely dropping — it seems they now are plunging!

(Que Chicken Little): The sky is falling! The sky is falling! Bawk bawk bawk bawk bawk…

abc7
KABC-TV Los Angeles, CA
California News
Property values plunge in Calif.
Wednesday, August 26, 2009

By Nannette Miranda

SACRAMENTO, Calif. (KABC) — According to new figures, 38 of California’s 58 counties saw a drop in assessed property value this year.

The State Board of Equalization found the assessed values of all taxable property in California fell by $107 billion from one year ago. It’s the first drop since the middle of the Great Depression.

BTW, what is the annual California state budget these days — I’m thinking it’s something slightly north of $107 bn?

 
Comment by Professor Bear
2009-08-26 23:15:10

Top News
Historian: Housing bubble like silver rush
Published: Aug. 26, 2009 at 3:24 PM

DAVIS, Calif., Aug. 26 (UPI) — A University of California anthropologist says her study of 19th-century silver prospectors sheds light on the recent bubble in the U.S. housing market.

Susan Glover, who recently received a Ph.D. from University of California-Davis, in a report published in the journal Human Ecology, looked at the relationship between what was reported in contemporary local newspapers and the strategy used by prospectors in Gothic, Colo. She found news reports tended to overstate what prospectors could find and understate the risks.

Glover suggests the newspapers themselves were misinformed and not deliberately passing on false information. She also said the newspapers reflected the kind of information passed on informally in saloons.

She compared the 19th-century silver rush in Colorado to the dot-com boom of the late 1990s and the housing bubble that brought on the current global financial meltdown.

She said overoptimistic information in the news media and from informal networks over-exaggerated payoffs while underplaying the risks.

How do the green shooters fit into her thesis?

Comment by Hwy50ina49Dodge
2009-08-26 23:33:44

“… She also said the newspapers reflected the kind of information passed on informally in saloons.”

Big nose Kate: “Wyatt Earp, you’re a bastard!”
Watt Earp: “How’s it you know that?”
Big nose Kate: “I’m also an astrologist, with a specific talent”
Wyatt: “What might that be?”
Big nose Kate: “shut up and sit right here”
Wyatt:”…right were?”
**!!@@@###
Big nose Kate: “Never mind, what’s your brother name?”

Comment by Professor Bear
2009-08-26 23:37:07

“Whiskey’s for drinkin’, and water’s for fightin’!”

Comment by Hwy50ina49Dodge
2009-08-26 23:41:29

And to think you live in San Die-a-go :-)

(Comments wont nest below this level)
 
 
 
 
Comment by Professor Bear
2009-08-26 23:39:36

Why, pray tell, should American investors worry one lick about what happens way across the Pacific Ocean? Haven’t the Bloomberg people ever learnt the decoupling theory yet?

Japan’s Bonds Rise After Stocks Drop on China Production Review
By Yoshiaki Nohara

Aug. 27 (Bloomberg) — Japan’s bonds rose, pushing 30-year yields to the lowest level in more than five weeks, as Asian stocks slid on speculation China will reduce production.

Thirty-year debt gained for a third day after China’s cabinet said yesterday it is studying curbs on industrial overcapacity, spurring concerns that the global economic recovery will falter. Longer-dated bonds led the advance before reports tomorrow that economists say will show Japan’s consumer prices slid at a record pace and the jobless rate rose in July.

“Concern about China’s growth is weighing on stocks, which is a support factor for bonds,” said Koji Shimamoto, Tokyo- based chief strategist at BNP Paribas Securities Japan Ltd., a unit of France’s largest bank. “Bonds could’ve been bought more, but low yields are limiting demand somewhat.”

Comment by Hwy50ina49Dodge
2009-08-26 23:44:59

“…after China’s cabinet said yesterday it is studying curbs on industrial overcapacity,…”

As they say in Id-aho when a black man enters a saloon after mid-night:
“What’s wrong with this picture?” ;-)

 
Comment by Professor Bear
2009-08-26 23:54:03

Why can’t bulls look more closely when information first hits the MSM McMegablaster?

* WALL STREET JOURNAL
* AUGUST 27, 2009, 2:05 A.M. ET

WORLD FOREX: Euro, Dollar Fall Vs Yen On Weak Asian Stocks

By Andrew Monahan
Of DOW JONES NEWSWIRES

TOKYO (Dow Jones)–The euro and dollar fell against the yen in Asia Thursday as weak regional share markets prompted players to sell those currencies for the safe-haven yen.

Dealers said that into next week, the yen may continue gaining against its rivals if global share markets remain sluggish.

In early afternoon trading, Japan’s benchmark Nikkei 225 Stock Average was down 1.82%, while China’s benchmark Shanghai Composite was off 0.42%. Those falls were large enough to encourage short-term investors to trim holdings of riskier assets such as the euro in favor of the yen, traders said.

At 0450 GMT, the dollar stood at Y93.70 compared to Y94.13 late Wednesday in Tokyo. The euro traded at Y133.47 compared to Y134.09, having tripped stop-loss selling orders around Y133.80 in the morning session, dealers said.

The greenback could fall further to Y93.00, and the euro to Y132.50 if share markets slump further, said Hideki Amikura, deputy general manager of Nomura Trust and Banking. Other dealers shared this view, saying there are buying orders around those levels.

The dollar began trading in Tokyo on a weak note, having given up initial gains on a better-than-expected headline figure for U.S. new homes sales and durable goods orders for July. That primed the currency for further falls against the yen, Amikura said.

Dollar weakness persisted in part because the U.S. data, on closer look, suggest the economic recovery is not as strong as first thought.

 
 
Comment by Professor Bear
2009-08-26 23:56:19

How could one know whether Crown is “gaming” their balance sheet?

* WALL STREET JOURNAL
* AUGUST 26, 2009, 11:47 P.M. ET

Crown Falls on U.S. Writedowns

By ALEX WILSON

MELBOURNE — Casino operator Crown Ltd. has booked deep write downs on its U.S. operations, resulting in a headline net loss of 1.2 billion Australian dollars ($995 million) for the year ended June 30.

The loss is down from a profit of A$3.55 billion a year earlier, when the bottom line included sizable gains on disposals and demergers.

Despite the large loss and heavy write downs, underlying profit was stronger than expected with Crown’s Australian casinos posting earnings growth. The company also said that gaming revenue growth in Australia is continuing in the new financial year.

The write downs are more severe than the market had expected. Analysts polled by Dow Jones Newswires ahead of the result had forecast that Crown would report a headline loss of A$368.8 million.

Chief Executive Rowen Craigie said the global financial crisis is having a major impact on the North American casino industry and conceded Crown’s investments in the market had been “ill timed”.

“Despite the write-downs Crown has one of the strongest balance sheets of any gaming company in the world,” he said.

“Crown’s capability and financial strength places it in a strong position for the future.”

 
Comment by Hwy50ina49Dodge
2009-08-27 00:00:12

Dear Mr. Bear…something that you might not have encountered: “The Logic of Life” by Francois Jacob Cheers! Hwy50

Comment by Professor Bear
2009-08-27 00:02:12

“The Logic of Life”

Definitely not. Thanks for the tip…

 
 
Comment by Professor Bear
2009-08-27 00:00:59

Subprime Lenders Line Up For $21 Billion In Fresh Handouts
Lawrence Delevingne|Aug. 26, 2009, 10:19 AM

The subprime lenders that helped send the financial system — and broader economy — into a tailspin are now getting billions of taxpayer dollars to help fix the housing crisis.

A new report by the Center for Public Integrity shows Washington is subsidizing them in what could be the next major credit bubble:

CPI: Firms that fed off the subprime lending frenzy that devastated the banking system are lining up to collect more than $21 billion in taxpayer funds meant to help bail out borrowers now in trouble on their loans.

The funds come from the federal government’s Home Affordable Modification Program (HAMP), begun in February by the Obama administration to coax lenders into modifying mortgages that might otherwise result in foreclosure. According to a Center for Public Integrity analysis of public records, of the 25 top participants in the program, at least 21 were heavily involved in the subprime lending industry. Most specialized in servicing subprime loans, but several both serviced and originated the loans.

As the Washington Post reports, at least 21 of the top 25 participants in the $75 billion program specialized in servicing or originating subprime loans. That includes JPMorgan, Wells Fargo and Countrywide, now owned by Bank of America.

As we’ve written, mortgage modification is essentially subprime lending all over again so this is to be expected. Our strategy is, basically, to pay the same-old firms to undo the mess they created. No surprisingly, it’s been slow-going so far. And it’s frustrating to see companies — such as AIG and Lehman subsidiaries — collecting more taxpayer dough.

 
Comment by Professor Bear
2009-08-27 00:22:09

Will BB raise interest rates, too?

Aug 25, 2009, 6:40 p.m. EST
Commodities countries first in line to hike rates: economists

Expected rate increases in Australia, Canada, Norway would support currencies

By Laura Mandaro, MarketWatch

(This update corrects the rate move by Israel’s central bank.)

SAN FRANCISCO (MarketWatch) — A far-flung group of countries that have benefited from rebounding commodities prices is getting ready to raise benchmark interest rates before the United States, Europe and some other major, developed countries, economists say.

Those rate hikes are likely to give fresh momentum to five-month rallies to the Australian, Canadian and New Zealand dollars, as well as the Norwegian krone, while weighing on the U.S. dollar, the Japanese yen and, to a lesser extent, the euro.

Higher commodities prices “have allowed Australia and Canada to have a source of strength to have earlier reversals of their monetary policy,” said Stephen Gallagher, chief U.S. economist at Societe Generale.

 
Comment by kidbuck
2009-08-27 02:18:42

“Even when solutions are low tech — siting a building to maximize natural light and airflow, for example — developers rarely pursue options that aren’t profit-driven.”

Light and airflow? The lots are so small and the houses so close together that they all block each others light and air won’t flow unless every house on the block has their windows open at the same time. Even then, because the houses are so close together, a neighbor three houses down can be heard passing gas.

 
Comment by Professor Bear
2009-08-27 04:04:48

Funny, isn’t it, how Toll Brothers’ share price has gone up recently despite their 8th straight reported loss? What are their investors thinking? Do they believe that companies some how become more valuable by losing money?

I have to wonder whether some of these Toll Brothers investors are going to wind up living at their parents’ house, when their investment finally tanks…

Toll Reports 8th Straight Loss as Recession Saps Luxury Demand
By Kathleen M. Howley and Peter Woodifield

Aug. 27 (Bloomberg) — Toll Brothers Inc., the largest U.S. builder of luxury homes, reported its eighth consecutive quarterly loss as the worst economic contraction since the 1930s sapped demand.

The fiscal third-quarter net loss widened to $472.3 million, or $2.93 a share, from $29.3 million, or 18 cents, a year earlier, the company said today in a statement. Revenue fell 42 percent to $461.4 million, according to the Horsham, Pennsylvania-based builder whose average sale price last year was almost triple the U.S. new-home median of $232,100.

Builders such as Toll Brothers are struggling to weather the biggest collapse of new-home demand on record. Sales of newly built properties probably will fall to 353,000 this year, the lowest in data going back to 1963, according to a forecast on the Web site of the National Association of Realtors.

There are signs of stabilization in the housing market that would lead to new homes and lead to more new home sales,” said Nicolas Retsinas, director of housing studies at Harvard University in Cambridge, Massachusetts. “But there are storm clouds ahead. We still haven’t made a significant dent in stopping the tidal wave of foreclosures which puts more property on the market, motivates the owners to accept lower and lower prices, and keeps people on the sidelines worrying about prices going down.

 
Comment by Professor Bear
2009-08-27 04:21:31

Oh dang, please, no more “worse than expected” or “even worse than we thought it was” numbers…

U.S. Economy Probably Contracted More Than Initially Estimated
By Timothy R. Homan

Aug. 27 (Bloomberg) — The U.S. economy probably contracted at a faster pace in the second quarter than previously estimated as companies made even bigger cuts in inventories, economists said before a government report today.

Gross domestic product shrank at a 1.5 percent annual rate from April to June compared with the 1 percent drop reported last month, according to the median forecast of 75 economists surveyed by Bloomberg News. Another report may show claims for unemployment benefits fell for the first time in three weeks.

Companies from Wal-Mart Stores Inc. to Macy’s Inc. cut costs and stockpiles to bolster profits as job losses caused consumers to curb spending. Leaner stocks and government programs to revive demand, including “cash-for-clunkers” and first-time homebuyer credits, are boosting manufacturing and housing, helping the economy emerge from the recession.

The inventory adjustment is further along than thought, setting the stage for increased production in coming months,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

Don’t you need customers in order to increase production? Or am I just missing it again?

Comment by Professor Bear
2009-08-27 04:23:53

Is Nigel expecting recession-wracked American consumers worried about the risk of losing their jobs to go out and purchase second or third cars, or to buy vacation homes? If so, I am wondering where he thinks the demand is going to come from, now that Cash-4-Clunkers and Dough-4-Dumps has burned the chair legs out from under what little demand was in the durable goods market?

But again, I must just be missing it…

 
 
Comment by jeff saturday
2009-08-27 04:27:24

Throngs of property owners expected to appeal their 2009 tax bills, Palm Beach County clerk says
By JENNIFER SORENTRUE
Palm Beach Post Staff Writer
Wednesday, August 26, 2009

WEST PALM BEACH — The number of Palm Beach County property owners fighting to lower their tax bills is expected to grow by as much as 21 percent this year.

As many as 16,000 property owners are expected to file petitions challenging their property assessments and homestead and tax exemption classifications with the county’s Value Adjustment Board, a five-member group that oversees appeals, the clerk and comptroller’s office said today.

How to challenge

Palm Beach County property owners have until Sept. 14 to challenge their property assessments and exemption classifications.

Petitions can be filed with the county’s Value Adjustment Board online, or in person at 301 N. Olive Ave., West Palm Beach. There is a $15 filing fee.

Property owners have until Sept. 14 to submit petitions to the clerk’s office. They must pay a $15 fee. Petitions can be filed online at http://www.mypalmbeachclerk.com.

Last year, roughly 13,200 property owners fought their bills.

The clerk’s office says the increase may have been caused by the economic downturn, rises in proposed city and county property tax rates, and a change in state law that requires the property appraiser’s office to prove their assessments are accurate.

Until this year, the property appraiser’s assessment was presumed correct during any challenge. The property owner was required to prove the assessment was wrong.

Under the adjustment board’s rules, special magistrates are hired to settle disputes between property owners and the county property appraiser’s office. The clerk’s office is responsible for processing petitions and scheduling hearings with special magistrates.

The property appraiser’s office mailed preliminary tax notices on Friday to all county property owners.

 
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