Bits Bucket For October 17, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Google me! This is a nice start, but when are the authorities going to go after the subprime mortgage lending kingpins over at Megabank, Inc?
Billionaire among 6 nabbed in inside trading case
By LARRY NEUMEISTER and CANDICE CHOI, The Associated Press
4:35 p.m. October 16, 2009
Raj Rajaratnam, billionaire founder of the Galleon Group, a major hedge fund, is led in handcuffs from FBI headquarters in New York Friday, Oct.16, 2009. Rajaratnam was charged with insider trading in the stock of several companies including Hilton, Clearwire, and Google. (AP Photo/ Louis Lanzano) - AP
NEW YORK — One of America’s wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits and was a wake-up call for Wall Street.
Raj Rajaratnam, a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to use insider information to trade securities in several publicly traded companies, including Google Inc.
…
………. “generated more than $25 million in illegal profits”………….
Your worth more than one billion and you risk everything for this relative pittance? Greed is like crack cocaine. This photo-op will make the masses feel good for awhile but this is a drop-in-the-bucket.
The corruption runs deeply in our society. May these P’sOS rot in hell.
Now they can apply for stimulous money.
“…drop in the bucket…”
Indeed. Here is a quote from the front page of today’s WSJ:
‘I’m dead if this leaks. I really am … and my career is over. I’ll be like Martha f…..g Stewart.’
That’s on target: These guys are about as important to the financial meltdown as Martha Stewart was to the tech stock crash.
They may well be Martha Fockers, but they are also small fish.
I view this story as a palliative to reduce the masses’ demands that a full investigation into the causes of last fall’s financial crisis be conducted, and the kingpins most responsible be prosecuted to the full extent of the law. (Sorry, there I go again with my casual approach to legal issues…)
I have become so cynical that I believe every exec from Megabank, Inc. is crooked. The odds, in my mind, of even the smallest fraction of them being called on the carpet for their sins is less than .01%.
$25 million is what this case is about.
If you don’t think he’s been using this type of scheme his whole career to amass his billions you might want to check your naivete, it’s showing.
Your point is taken. But I still say he is a small fish, in the big scheme of the root cause of the financial crisis.
So tell PB, why no smack down of dude for calling you naive, yet yesterday and even today, you don’t seem to hesitate in smacking down polly.
“…you don’t seem to hesitate in smacking down polly.”
I generally shoot from the hip as I see fit here. If you don’t like what I say, please feel free to smack me down.
P.S. Dude said I was naive, which shows he misunderstood the point of my post. But notice he didn’t try to dissuade me from posting. That is why I responded differently to him than Polly.
Could it be the best earnings season ever:http://www.cnbc.com/id/33347753
LMAO
Fortunately modern swindling leaves behind a clear paper trail.
“…Robert Khuzami, the S.E.C.’s director of enforcement, said of Mr. Rajaratnam in a news conference, “He is not a master of the universe,” outlining the civil case brought with the criminal case. “He is a master of the Rolodex.”
Hey, Crissy Cox of Newport Beach, CA…see this is what a “useful” civil servant is paid to do…remind me again Crissy, how many Wall Street “cheaters” did you arrest during your Cheney-Shrub employment period…0 is that right… 0?
The funny thing is that ferreting out fraud is just about the most fun that a federal employee can have. Just like all jobs, some of it is cool, some of it is deadly dull. Doing a good job might get you on more “prestigious” projects, but you have to get your kicks out of the prestige, since what bonuses there are for doing a great job on a long term project are pretty trivial. BUT, the interesting projects sometimes get you a chance to ferret out fraud. And that is cool.
“The funny thing is that ferreting out fraud is just about the most fun that a federal employee can have.”
That maybe true, but some of the federal lawyers that I have met must have been members of the “Sleepy Weasel Squadron”.
j/k
We know that Sens Dodd and Conrad got below market loans from Countrywide. When do they pick them up? Oh, never,Obama needs their votes for the socialised two trillion dollar health (sic) bill.
“Sleepy Weasel Squadron”.
This name totally enchants me. It would be the best band name ever!
pismo, do you have a problem with going after the Top, the really big offenders or are you just lopsided?
Are you allowed to ferret out fraud at Megabank, Inc, or do you have to narrow your sights to small-time hedge fund operators?
Regarding that billionaire, I hope they put him away in a rough prison so that he can become someone’s “boy.” Or become part of a brawl.
Young people who cheat a little and see how they leverage their gains become big cheats when they are older.
We need the slam of the hammer of the law to hit these people hard. Very hard.
I thought you were a libertarian.
I’m a hard core liberal in the Frederic Bastiat sense
http://bastiat.org/en/the_law.html
That’s equivalent to hard core libertarian, by those people who unfortunately sanction the socialists’ theft of our rightful label “liberal.”
My views are consistent with rule of law and not rule of man.
But would libertarianism (or hard core liberalism) ban insider trading? I would think they’d let the ‘free market’ sort it out.
Frederic Bastiat had a vision of today’s U.S. Congress:
“Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter — by peaceful or revolutionary means — into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.
Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws! Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess.) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.”
“I thought you were a libertarian”
I always thought he was J P Morgan ?
In reference to the insider trading
I know what I am saying is perhaps not politically correct but sometimes people coming from third world countries are used to conducting business in unscrupulous ways. Bribing officials and kick backs are a normal part of doing business. As the US tanks I am afraid we will learn more and more individuals in important positions will start lining their pockets this way.
Years ago ( 1979-1985, the middle of the Reagan years) I worked for an electronics firm near Seattle which was privately held. The company’s top brass announced in ‘84 that it was going to go public soon, and that they wanted all of the employees to purchase stock in order to show their loyalty and confidence in the company to outside investors. They made it clear that any employee who failed to buy at least a minimum number of shares would be fired, but they also let it be known that the stock would be worth far more than the employee purchase price as soon as the company went public. So most of the employees bought far more than the minimum and began to trade shares among themselves at higher and higher prices, a veritable mini-bubble of speculation. I was the last holdout out of around 1000 employees. I stalled, played dumb, forgot to complete the forms, delayed using every device I could think of without actually out-and-out refusing to buy the stock. I was a lowly technician and I simply could not afford it. At last I agreed to buy if I could immediately resell the stock to one of the other employees. Which I did, signing the forms for both the purchase and re-sale ( for a small profit ) at the same time. A few weeks later the same top brass revealed that all of the company’s projects in development were being cancelled due to poor or non-existent sales, and that sales of the older products had been plummeting due to obsolescence. In other words, the company was in serious trouble and in danger of folding. Within a few months, most of the employees were laid off and the company never recovered, and has long since vanished. The top brass had unloaded all of their stock on their employees, at a handsome profit to themselves, knowing that it would soon be utterly worthless. Quite a few of the employees lost their life savings, in some cases hundreds of thousands of dollars, a lot of money in the 1980s. Of course, they were stupid to fall for this. The SEC did a short investigation of the company’s top officers and directors, almost all of whom participated in this scheme, and concluded that although laws were broken, the culprits did not realize that they were breaking the law, it would be a tragedy if they faced legal problems when innocent mistakes were made, they had already suffered enough, blah blah blah. No charges were ever filed and no restitution was ever made.
I did manage to quit and go to another job before the axe fell in my direction !
Things were just as riddled with corruption 25 years ago as they are now.
Exactly pmseatac.
Remember the “greed is good” 80s? Yeah, that worked out well didn’t it?
Thanks for the inside story, pmseatac. You were one smart ex broke
‘lowly technician’.
I can’t believe..well yes I can. And it happens every day, ala enron and then some.
“NEW YORK — One of America’s wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits and was a wake-up call for Wall Street.”
WAKE UP CALL? WAKE UP CALL?
To infer this is in any way, shape or form “surprizing” to anyone on Wall Street is complete BULLS**T!
DOC
Please help me out on my arithmetic. If 8 out of 56 neighborhoods saw price increases, doesn’t that imply that prices either stayed the same or declined in 48 (= 56-8) neighborhoods?
Home prices across area ending decline, data show
Increases seen for 8 out of 56 neighborhoods
By Roger Showley
UNION-TRIBUNE STAFF WRITER
San Diego County’s three-year slide in home prices is ending, neighborhood by neighborhood, according to a quarterly breakdown from MDA DataQuick.
“San Diego County’s three-year slide in home prices is ending…”
Bugs: “eh, could be Doc…but the the unemployed’s inability to buy a house is just beginning…”
It’s not your math that’s flawed, it’s your thought process. You must start with the desired outcome as an assumption, and then use all force necessary to make the facts fit your assumption.
I have to admire Showley and other real estate boosters’ ability to always see a real estate recovery underway regardless of what the data suggest. This is a sure sign of strong character.
When the mind is made up, the ear is deaf to even the best arguments. This is the sign of a strong character. In other words, an occasional will to stupidity.
– Friedrich Nietzsche –
“It’s not your math that’s flawed, it’s your thought process. You must start with the desired outcome as an assumption, and then use all force necessary to make the facts fit your assumption.
Yeah PB…like ” The rules of math logic are evil and wrong, therefore, you must oppose all logic, evil and math”
Sort of like the old re run show where the lady tells the flippers, you HAVE to start with the end date in mind and work back.
When is the open house date? Now work back from there. They looked like bozos.
But the point is, do what fits your assumption and profit target?
lol
Thobbers = word coined in the 1920’s from a phrase similar to - thinking out the opinion that pleases one and believing it.
Henshaw Ward wrote a book on this subject - Builders of Delusion
Haven’t you heard, “San Diego’s different.”
Please help me out on my arithmetic.
The “headlines marketing” is more effective than the facts in the article. People will not read the article but they will start believing the headline.
In honor of the 99th bank failure of the year (by the way, if you told me a month ago that on October 17th I’d still be waiting for number 100 I would have never believed you…)
You and I in a little toy shop
Buy a bag of balloons with the money we’ve got
Set them free at the break of dawn
Til one by one, they were gone
Back at base bugs in the software
Flash the message, something’s out there
Floating in the summer sky
99 red balloons go by
99 red balloons
Floating in the summer sky
Panic bells it’s red alert
There’s something here from somewhere else
The war machine springs to life
Opens up one eager eye
Focusing it on the sky as 99 red balloons go by
99 Decision street
99 ministers meet
To worry, worry, super flurry
Call the troops out in a hurry
This is what we’ve waited for
This is it boys, this is war
The president is on the line
As 99 red balloons go by
99 knights of the air
Ride super high tech jet fighters
Everyone’s a super hero
Everyone’s a Captain Kirk
With orders to identify
To clarify, and classify
Scramble in the summer sky
99 red balloons go by
99 dreams I have had
In every one a red balloon
It’s all over and I’m standing pretty
In this dust that was a city
If I could find a souvenir
Just to prove the world was here
And here is a red balloon
I think of you, and let it go
Neun und neunzig luft balloons.
Here is an article from earlier this year on why “the Feds” should not try to prop up home prices. I am curious whether anyone can furnish evidence whether they followed this suggestion or not?
Feb. 25, 2009
Feds Shouldn’t Prop Up Home Prices
Home Prices Still Have Some Dropping To Do, If Washington Will Allow It,
By Declan McCullagh
In October, home prices fell 18 percent from last year, the sharpest drop on record. As Kelly Wallace reports, analysts predict prices will continue to fall into 2009.
(CBS) A housing report released Tuesday delivered this telling economic news: American home values in metro areas fell by 27 percent from their peak, according to the Standard & Poor’s/Case-Shiller index.
The Case-Shiller index is broad, sweeping a metro area’s cheapest housing markets in with its most exclusive. This can be misleading: in many cities, less expensive areas have fallen rapidly, spurring an uptick in purchases, while the priciest areas have slid less.
As the U.S. economy contracts, any sensible forecast calls for this slide to accelerate. Yet the federal government seems intent on trying to halt the normalization process, even though it would offer more affordable housing to prospective homebuyers.
The reason for this forecast is that buy-vs-rent ratios in such areas remain far higher than historic norms, a sign that localized housing bubbles have yet to deflate. The buy-vs-rent ratio is the equivalent of the price-to-earnings ratio for stocks; the Federal Reserve Bank of San Francisco uses a variant in its own analysis and noted back as far as 2005 that the “ratio is about 40 percent higher than the normal level” for San Francisco and Los Angeles. (You may have seen its cousin, the price-rent ratio.)
As of early 2009, the buy-vs-rent ratio is even further out of whack. A mile or so from my old neighborhood of Adams Morgan in Washington, D.C., you can rent a three-or-four bedroom house with off-street parking and granite counters for $4,300 a month near Calvert Street and 39th.
…
http://yelnick.typepad.com/yelnick/2009/….
Friday, October 16, 2009
Before You Jump Back Into Real Estate, Read This
Time for a little public service for those crazies buying back into housing. Amherst Securities did this report - Amherst Mortgage Insight - on the huge shadow overhang in the housing market. They count 7M units already delinquent, up from 1.3M in 2005 and more than the 5.2M annual home sales right now. They estimate an additional 300K go delinquent each month, or another 1M since this chart ended in Q2.
The government’s vaunted modification program doesn’t seem to have much impact, as 70% of them go delinquent again within a year. Maybe 1M of the overhang could be modified if all went well, but then 700K would go back into the overhang a year later. In other words, best case the modifications would only save a month’s accumulation of more overhang.
They look a little deeper into Riverside CA, which has 1,372 units for sale out of 34,800 total properties. If you add to the listings the foreclosures not yet listed, houses about to be auctioned off, and houses with a notice of default, you find over 7,000 units are in the shadow inventory - 20% of all houses in the city! Now, Riverside like Vegas and places in Florida was at the center of the irresponsible government-backed no-money-down loans of the housing bubble, so this sort of shadow inventory of 5x the listings is at the extreme. But they sample other places, and find LA is a 3x overhang, Vegas is 4x and NYC over 1x. San Diego, where some of the crazy buying is going on, is at 3.4x overhang - the buyers are nuts!
The problem right now is that defaults are happening much faster than liquidations, so the overhang is growing. See chart, which divides by loan type. Subprime are past their peak defaults, and the liquidation has caught up. AltA and OptionARMs are close. The problem is now in the Prime loans.
They conclude with an analysis why prices and sales seems to have bottomed: seasonal factors have given a temporary plateau. But the seasonal buoyant period is over, and both prices and sales should now resume a slump.
If you jumped back in and are now stuck, you have another option: sue! Bloomberg reports how condo buyers in Florida are suing for deposit refunds. Condos they put a deposit on in 2006 at $1000 sq ft are now down as much as 8x, and the worry is they will soon drop 10x or below $100 sq ft, the level in 1989! At those levels, maybe the crazies will jump back in and bottom fish …
“As the U.S. economy contracts, any sensible forecast calls for this slide to accelerate. Yet the federal government seems intent on trying to halt the normalization process, even though it would offer more afforadable housing to prospective homebuyers.”
Housing prices need to remain stable else more bank capital disappears into thin air and the financial system continues to deterioriate.
Like it or not, there it is.
And don’t forget the trillion dollars of mortgage resets due over the next couple of years. If housing prices are not PERCEIVED by the public to be bottoming out then a whole bunch more mortgages will be walked away from and the financial unraveling will continue onward, which will screw us all.
Keep the hope alive and maybe you’ll keep those mortgatge payments flowing into the banks.
“…which will screw us all.”
How would affordable housing screw prospective new home buyers? Or prospective buyers of failed banks?
Afforadable housing won’t screw Homebuyers. It’s not these homebuyers that are screwed.
It’s the banks that are screwed because they floated loans at bubble prices and are now eating it because house prices are now dropping to affordable levels.
Keeping housing prices up keeps the banks solvent. Allowing the housing prices to drop wipes out the bank’s capital which causes the banks to fail.
Failing banks destroys money and causes depressions.
“It’s the banks that are screwed because they floated loans at bubble prices and are now eating it because house prices are now dropping to affordable levels.”
Shouldn’t banks (and banksters) which are bad at banking be drummed out of the system, rather than kept alive on govt-sponsored life support?
“Shouldn’t banks (and banksters) which are bad at banking be drummed out of the system, rather than kept alive on govt-spnsored life support?”
I’m for that. Trouble is, nobody knows which banks are good at banking and which aren’t.
A year-or-so ago it was decided to allow large banks to fail and immediately world trade began to freeze up. That’s because, among other things, banks are clearing houses for financial transactions, and if it is suspected transactions won’t clear the banks then the transaction won’t take place and the economy freezes up. Hence the banks need to be made whole or backed by some very deep pockets.
As I said before, like it or not, there it is.
“Shouldn’t banks (and banksters) which are bad at banking be drummed out of the system, rather than kept alive on govt-sponsored life support?”
Yes, they should. But, as William Black has been so vociferous about, they are instead rewarded with some of the highest positions within the government. Who would have guessed that being an absolute failure was so lucrative?
“Keeping housing prices up keeps the banks solvent. Allowing the housing prices to drop wipes out the bank’s capital which causes the banks to fail.
Failing banks destroys money and causes depressions.”
No, irresponsible monetary policy with a complete lack of oversight of the banking industry and enforcement of regulations allowing, even promoting, massive asset bubbles causes depressions. There is zero evidence that putting the large banks into receivership and winding them down while smaller, more responsible banks assume their deposits causes depressions.
“No, irresponsible monetary policy with a complete lack of oversight of the banking industry and enforcement of regulations allowing, even promoting, massive asset bubbles causes depressions.”
Wrong. What you stated above doesn’t cause depressions, it causes financial bubbles. Depressions are caused when the bubbles implode.
“There is zero evidence that putting the large banks into receivership and winding them down while smaller, more responsible banks assume their deposits causes depressions.”
Back up to September 15, 2008, when Lehman Brothers was allowed to fail, and take a look at what then happened to the world’s economy.
“Trouble is, nobody knows which banks are good at banking and which aren’t.”
What about the stress tests? Or the FDIC death watch list? Somebody is certainly trying to figure out which banks are fit to survive.
That said, one of the problems with creating moral hazard through a de facto too-big-to-fail insurance program is that it encourages banks to think they can throw away money and still get made whole — at least with respect to bonuses for top management (not so much the shareholders, though).
“Wrong. What you stated above doesn’t cause depressions, it causes financial bubbles. Depressions are caused when the bubbles implode.”
You’re splitting hairs.
“Keep the hope alive and maybe you’ll keep those mortgatge payments flowing into the banks.”
From here on ought, surviving the mortgage crisis is all about The Audacity of Hope…
Since the money is all gone hope is all that we are left with.
Well nope, don’t mope! Cuz in Cali we are not yet at the end of our rope…any month now they will legalize dope!
At the end of the day, all attempts to keep sheeple tethered to their debt-traps will fail. They can’t stop the walk-away-revolution, particularly as popular angst grows against Wall Street bonuses. In a year or two, the sheeple will be promised a new New Deal. They can’t un-ring this bell. The game is over. The fraud has been exposed.
“At the end of the day, all attempts to keep sheeple tethered to their debt-traps will fail.”
Agree. But in the meantime they’ll commit their precious money to the system and this money will act to soften the decline.
Part of a spam-mail I recieved today…
5 Tips for Getting an Accurate Appraisal
Getting an accurate appraisal on your home can be tricky these days. Prices are fluctuating in many markets, and with fewer sales taking place, appraisers are having a difficult time finding recent comparables to value homes. But getting an accurate appraisal could mean the difference between selling your home and watching it languish on the market.
“It seems as if appraisers are giving much more conservative values now,” says Jeffrey Kahn, a broker-associate with CENTURY 21 Hansen Realty in Fort Lauderdale, Fla. “It makes it very difficult.”
Kahn recently worked on a deal where the buyer had to come up with an additional 10 percent down because the appraisal came in too low. That’s not unusual, he says.
There are things you can do, however, to help ensure that your home is appraised fairly. Here are some tips:
Consider getting an appraisal before you list your home. Kahn says that the listing agent can use the information it contains to help set a realistic listing price.
Make sure you and your agent are present when the appraiser comes. Follow him around the property, and make sure he doesn’t miss anything important that may affect the home’s value.
Provide information to the appraiser to help him determine the property’s value. A current survey, tax bill, list of personal property being sold with the home, title insurance policy, and proposed improvements can be helpful. Consider preparing a “brag sheet” that lists major home improvements and upgrades, the date of their installation, and cost.
Take a look at the houses that the appraiser is using as comparables, and don’t be afraid to let the appraiser know if your property is worth more.and why.
Make sure all areas of the home are accessible.
For more tips on getting an accurate appraisal, call our CENTURY 21 Office today.
We’re gonna trick him, follow him, squish him with paperwork and intimidate him UNTIL he hits our number.
list of personal property being sold with the home
I thought personal property (car, furniture, swingset, whatever..) was called a concession. Concessions are not to be considered for valuation purposes.
It’s called chattel.
Chattel or movable personal property, call it what you will.
If it’s being sold with the home then it’s a ’sellers concession’ and needs to be excluded from valuation.
This is strictly a matter of the distribution of wealth. Propping up the value of assets favors those in older generations who hold them vs. those in younger generations who might want to buy them. Doing so with borrowed government money will force younger generations to pay for the privilege.
I agree. The older generation, which holds the political and financial cards, seems very content to screw over the younger generation when the pie is shrinking. This is done both by saddling future generations with a crushing debt burden, and also through artificially manipulating asset prices (e.g. housing) to make sure the younger generation gets to pay way above cost for the privilege of entering the Ownership Society.
Good thing for them the Under-30 set is so much more financially savvy than the old folks…
And… To finish the younger generations off we have off-shored a large percentage of our better paying jobs to keep them from doing what they have done in the past which was to charge more for their labor, which left them sitting in a large house they did not want and could not sell, but paying through the nose for necessities.
At least the old folks are nice enough to hand them $8000 in first-time buyer tax credit to buy a home, just in case they don’t have 3 percent of $267,000 lying around to finance the down payment on their government-guaranteed FHA loans.
Hiding new stuff from your honey?
By Doris Hajewski of the Journal Sentinel
Oct. 16, 2009
A new survey this week shows that more than one-third of Americans hide purchases from their significant others. Forty percent of those who do say they’re trying to avoid arguments about money, according to the poll from Western Union.
This is a quarterly survey of 3,000 Americans. The poll also showed that people are worried about spending too much on holiday shopping this year.
That’s no surprise. But only 30% hide what they buy??? A voice poll of my colleagues here in the newsroom came in at about 75%
Thoughts? What’s your favorite hiding place?
“Under the rug damned Elephant… Get Baackk under the Rug I say !”
Consider the flip side. When our older generation’s credit based prosperity implodes, their real assets will be available for pennies. These assets will pass to the younger generation at whatever price the market will bear and without massive debt. The older generation has not screwed the younger by borrowing from the future, they have screwed themselves. The younger generation will not honor the debts of the older.
How will they not honor them?
I guess it’s too tough of a question…or had you not thought that far ahead?
LOL. I don’t have a crystal ball ya know. But consider the possibilities.
I don’t have any personal debt, but if I owed a few hundred grand, my four kids together would never be able to pay those debts. They would let my toys go and live their lives. They would figure out how not to do what they cannot do. As for the National Debt, I think they will figure that out too. They can’t pay it.
They could always let ole Mr. Inflation work his magic.
The percent of this senior’s credit-based prosperity is zero.
same here.
“These assets will pass to the younger generation at whatever price the market will bear and without massive debt.”
How does that work if the central bank is actively trying to prop up the value of said assets?
Maybe it’s just me getting tired of watching them do that, but I don’t think their efforts are not sustainable. The PTB told us that we needed to save the banks to save ourselves and people went along out of fear and trust. These days I hear more anger and betrayal. Some tipping point, like the GS bonus absurdity, will lead to enthusiastic destruction. One can hope anyway.
oops on the double negative.
These days I hear more anger and betrayal. Some tipping point, like the GS bonus absurdity, will lead to enthusiastic destruction.
Well, I’d agree but WS just threw the masses a bone with that one itty bitty (vs. the BIG PICTURE)chump change of the 6 just indicted for fraud.
So, the masses can “see” something being done, but again, the masses will be fooled again for a short period. Smoke and mirrors, oh looky over there, bad guys, 25mill. vs TRILLIONS stolen from you, don’t look here, look OVER THERE.
Getting more cynical by the minute.
“Well, I’d agree but WS just threw the masses a bone…”
The bones WS throws don’t around don’t always seem to serve their intended purpose, especially when the justice system gets involved. For instance, how did that $33m SEC settlement with BoA over Merrill Lynch bonus payments work out?
That is the wisest set of 50 words to be deposited in the bits bucket since I can recall.
Re WT comment on privilege and wealth above.
Darn! I thought you had just miscounted my six word post.
It has nothing to do with older/younger generation and everything to do with the politically connected and obscenely wealthy versus everyone else.
Offshoring started 25 years ago. For some of you, that means YOUR parents were getting the shaft that far back, often after working 10+ years, thus losing any and all personal gains.
I’ve lived through what is now 6 recession in the last 35 years and every time J6P got the shaft while rich kept getting richer.
It’s an old game too. An hundred years ago my grandparents left the slavery of the thread mills in Paisley. We’re descendants of Robert the Bruce, who led a rebellion against the rich overlords. Two centuries of FREEDOM and they let their guard down. Centuries earlier, Donald led a rebellion against the rich overlords from Norway, which worked great for a while and then they let their guard down. Centuries before, my people left Greece to get away from the overlords (something to do with the Pharoah of Egypt) and fought their way to the end of the earth (which was at that time Ireland). Then they let their guard down. Centuries before that they fled the Middle East to get away from the overlords, something about Abraham…..
Any place left to go?
Good post Blue.
+1
Thanks Blue. People need to be reminded it’s the history of mankind.
Here’s a story on Florida.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a7s0rpuaOw50
“Condos on which they made deposits of up to $1,000 a square foot in 2006 are now selling for $125 to $350 a foot, said Jack McCabe, a real estate consultant in Deerfield Beach, Florida.”
“Prices could fall to $100 a foot, less than half the cost of construction, and a value not seen in 20 years, he said.”
Doesn’t that mean the price of construction is $200 psf? And yet people have $1,000 psf deposits, and some are still selling for $350 psf?
Florida, a sunny place for shady people.
Bulls***. There’s no way in he** that the cost of construction on a condo is 200/sq/ft. You can build a SFH from the ground for far less than that, and condos (with shared walls and the economy of scale) drop the cost even further.
I’d venture a guess that nearly all the condos built in S. FL have a construction cost of <150/sq/ft. There’s only so much granite/marble/tile that you can put in a 1000 sq/ft area.
Now, the land under the condo? That’s were the real insanity took place. I’m sure (to get these 300/sq/ft numbers) they are taking the cost of the land into account. What people just don’t seem to realize, is that, with a few exceptions (beachfront, deep water, downtown in the coastal cities), land in FL is effectively worthless. There’s more land than we could use in 10 generations; these condos in mall parking lots (Landmark at the Gardens) in the ghetto (Marina Grande, Riviera Beach) and in 2nd tier cities (Monteceito in WPB) paid 1000s of times the real value for the land they are sitting on. That’s where the real bubble was/is.
You make valid points, but high rise construction costs more than low rise construction.
Polly gave me a nice smackdown yesterday for my “casual approach” to legal issues. Sorry if this bothers some readers here, but the best I am willing to do in the legal arena is to point out instances where I think the law may be broken. I don’t have the time or interest to specialize in this area.
I take the same approach to the appearance of white collar crime as I do to the appearance of street crime. Except for that one time that I saved a girl who was about to be raped by yelling loudly until the would-be perpetrator ran away (I wasn’t brave or foolish enough to try to physically deter a 200 lb assailant).
You won’t catch me yelling out loud when I think I see bankers engaging in illegal activities. However, I will continue to post here when I see smoking guns in the MSM, in the hopes that the appropriate law enforcement authorities will investigate.
And despite my openly-professed ignorance of the finer points of securities law, I still believe that collusion by banks to artificially inflate real estate prices is not only anti-competitive, but also illegal. I also believe that a free-market economy performs best when a rule of law is enforced.
Countrywide Financial, KB Home accused of inflating home prices
By Steve Green (contact)
Friday, May 8, 2009 | 2:21 p.m.
Countrywide Financial is accused in a new lawsuit of teaming up with KB Home to inflate prices on new homes in Arizona and Nevada — allegedly hurting consumers by placing them in deals with negative equity without their consent.
Attorneys representing a group of homeowners said Thursday they filed a lawsuit in U.S. District Court in Arizona seeking class-action status against KB Home, Countrywide Financial and LandSafe Appraisal Services, claiming the three conspired to illegally rig home appraisals in KB developments in an effort to boost home values and sales prices.
The suit claims KB and the other defendants inflated home prices by as much as $280 million in Arizona and Nevada alone during a three-year period beginning in 2005.
“”It is particularly unfortunate in these challenging times that predatory attorneys file baseless lawsuits. We look forward to proving the lawsuit is without merit,” responded Craig LeMessurier, KB Home’s regional director of public relations. Officials at Bank of America could not immediately be reached for comment on the allegations involving Countrywide, which was purchased by B of A and is now called Bank of America Home Loans.
Rob Carey, the attorney representing the plaintiffs who allege racketeering by the defendants, said KB routed purchasers to Countrywide for loan services.
“Countrywide and KB were in cahoots, intent on sticking the homeowner with an inflated home appraisal to justify the purchase price,” Carey said.
…
I guess the lawyers are going to be busy for awhile sorting through bogus appraisals.
Remember in 2005 onward we were watching those practices take place
with the Builders/Developers and their “Special Lenders “. Remember all the kickbacks that were given and the prices were raised accordingly.
Not surprising that CountryWide was one of those special lenders .
Remember how I was pissing and moaning about this ,but I didn’t know at the time our taxes were going to pay for it in the final analysis . Strip Mozillo and his cohorts of every penny they have .
Love it when you are passionate PB!
I tend to get a little defensive when people point out my areas of ignorance, even when I am willing to admit outright that they are correct
I tend to get a little defensive when people point out my areas of ignorance, even when I am willing to admit outright that they are correct
I sure hope there’s not going to be a fall-out between Polly and P Bear or a leave-in-a-huff scenario.
They are two of my most favorite regulars - P Bear is like the play-by-play announcer at a game. Polly is the “analysis” person.
Oly’s the “color” guy (like John Madden)
(I’m the body-painted fan dressed in a barrel with a chicken strapped to my head.)
No worries — it’s out of my system already.
But on the other hand, Polly is mighty reticent today. I hope she offers a legal opinion on my question regarding whether the Fed has unlimited discretion regarding which firms (and households?) qualify for interest-free loans.
Maybe Polly slept in.
(I’m the body-painted fan dressed in a barrel with a chicken strapped to my head.)
BUT I WANT A STRAP-ON CHICKEN HEAD TOO!
*starts to chant and bang fists on desk rhythmically *
I want a chicken head!
I want a chicken head!
…Oh, I do hope no one leaves, either. PB and Polly are two of my all-time favorite posters also. Everything I ever read from either of them makes me that much smarter. Like microscopic layers of pearl-like wisdom gradually accreting on the little round pebble that is my natural Oly-brain.
One day many years from now, if I continue to read them both diligently, I might even be smart! Oooh! I can’t wait!
And now, if you’ll excuse me…
*resumes chanting and banging *
I want a chicken-head!
I want a chicken-head!…
Everything I ever read from either of them makes me that much smarter.
Me too. But it sure makes my friends/acquaintances etc get bored fast and walk away. To many ppl don’t want to know anything at all. Truly.
“But it sure makes my friends/acquaintances etc get bored fast and walk away.”
Hah! One of the reasons I post here so much is that it is good for my marriage. If I shared all the details of what we discuss here with my wife, she would probably divorce me in a NY minute. She is, however, typically impressed that I have already read, discussed and formed an opinion on almost every real estate article she ever mentions to me…
The law doesn’t belong to the degreed.
Keep on keeping on.
Thank, you, MilkCrate — I happen to agree with you. Though I may appear to be an ignoramus to those with law degrees, I don’t care a lick about it. I will ask questions until my fingers turn blue, and will interpret a lack of response as a tacit acknowledgment that I may be scoring a point here or there…
P.S.
Q. Why is practicing law like playing the viola?
A. Everyone is happiest after the case is closed.
Arrggghhhh, may have to move soon. We’ve had a pretty good deal renting a 3/3/1 townhome since 2005 within walking distance of my job. Landlord owns it free and clear and has been very easy to get along with, and I’ve made it all easy for her. Unfortunately the economy struck in the form of her ex-husband getting laid off and now he can’t help with the tuition for their two college students.
So, she wants to sell the place to get tuition money, and in her ideal world she would like to sell it to me. While she is being quite fair in her assessment of the value (considering Boulder bubble hasn’t popped yet), there’s a reason I’m a renter right now. She’d really like to avoid the hassle of selling it on the open market with a realtor, but for me to be even remotely interested in owning it she’d have to “give it away” and I doubt she’s willing to go that far.
So anyway, we’ll see what happens, but I think I’ll be moving soon and it’s going to be tough to find something that’s as good of a deal to rent in a similar location.
If you agree to show it for her it would stave off the inevitable, and there probably wouldn’t be many showing after the first week, especially during winter.
Well whats the asking price, and if an Investor buys it and raises your rent say 20-30% would you stay?
numbers man numbers
walking distance to a job is well worth a little over paying on rent… Especially if you can get some OT a month…then its a wash.
She’s still working on the asking price, everything is just talk so far. If an investor bought it and raised the rent that much I’d leave. For that much more there’s nicer stuff available even closer to work. No OT, I’m an engineer.
There’s a chance she may make me an offer I can’t refuse, though. She’s talked about taking all the rent I’ve paid in 4.5 years off of the price. I have a hard time believing that, but she’s got this weird hippie morality thing about money going on so anything is possible :-).
but she’s got this weird hippie morality thing about money going on so anything is possible :-).
Those hippies can get kooky, that’s for sure.
Work it, I say! Work it, my good fellow!
And don’t forget to bring out the mar*iJ*uana. Hippies like it.
*starts to sing prettily *
‘Oh, a spooooonful of m.j.
helps the transaction go down,
the transaction go doww-owwn,
the transaction go down,
….in the most deLIGHTful wayyyyyyy….
I take it she’s not you? She’s in Olympia too, and I wasn’t 100% sure all this time that maybe you weren’t my landlord.
If I didn’t own, I wouldn’t buy now. It’s a lot of headaches unless you enjoy maintance and yard work. I don’t want to have to deal with that in my 80’s.
Me neither. But if someone wants to sell to me for 50k under market value (I’ll believe it when I see it, but just sayin’), shouldn’t I consider taking it and then selling it myself? In this case I’ve actually been in the neighborhood for almost 5 years and watched the units around me turn over, so I have a good feel for the value. Right now things are still selling fast, amazingly enough.
Having said all that, I’ll probably pass on whatever is offered, for all the obvious reasons. I can’t believe she’ll actually make an offer I can’t refuse, hippy or not.
Tape from 2006 from Frontline …Interesting to view in light of the
loss of 401 k retirement with Stock Market
http://www.pbs.org/wqbh/pags/frontline/video/flv/generc.html?s=Fro1025b99798continuous=1
I’m sorry ..just go to Frontline and put in “Can you afford to retire?” It was a special that was done in 2006 ,even before the stock market
crash . Anyway it exposes the Corporation BK trend ,the 401k shortfall ,and a lot of other interesting insights into the lack of funds for people to retire ,as well as Corporations lack of proper funding of retirement .
Interesting from the tape they went into how a 1978 law allowing 401k’s were originally designed for higher end pay scale employees and than the 401k trend took over when Industry discovered they could reduce their
pension payments by about 50% by the 401 k approach instead of traditional retirement plans .
Oh it gets better…
They’ve consistently cut matching contributions as well. They’ve also eliminated ANY pension plan for new hires. (like anyone can even stay with a company for 20+ years)
They’ve also, mostly (though not in all cases), taken over control of your 401 as well, or offer such a limited set of choices as to make no difference.
Of course my favorite is the “Dead peasant” insurance they take out on you.
taken over control of your 401 as well, or offer such a limited set of choices as to make no difference.
That is for f.g sure. Testify Testify! Hands raised Lawdy.
Limited choices as to make no difference. THEN they changed from you being able to reallocate 2x monthly. to 1 x 90days for the “better” funds.
skrood skrood I say SKROOD.
Someone posted recently on the slowing pace of bank failures. I believe a week ago yesterday was the first FDIC Friday in many when no bank failures were announced.
The article I post below makes an important point: To a considerable degree, the FDIC controls the pace of bank failures. Like in the foreclosure arena, where banks are lagging behind on processing delinquencies, I suspect the FDIC is simply incapable of keeping apace with the rate at which banks are arriving in a failed position. Further, they have little apparent reason to hurry, given that economic recovery apparently is already apparently underway (can’t you guys see all them green shoots?).
I call BS on the notion that a recession is a poor time to buy a bank, provided that prices are set by market forces rather than government intervention. An efficient free market (the kind which is not distorted by government price support measures) will naturally find a mutually agreeable price between owners and would-be purchasers of assets. The problem is that the owners of failed banks apparently have the political clout to bring government-sponsored price support measures into play, in order to protect their failed institutions from going to the auction block at fire sale prices. This state of affairs does not seem either legal or desirable from a market performance standpoint, but that’s the way it is.
Hat tip to Mr. Ely for the money quote below. I believe the same comment applies to foreclosure homes, but I defer to Ben’s first-hand knowledge in this area.
Spotlight: Bank Failures
By Stephen Gandel Monday, Oct. 26, 2009
A shuttered drive-through window at a bank in Colorado.
* The FDIC’s Bank Leper List
* Bank Failures Sit at Unlucky 13, But Maybe Not For Long
* Financial Woes Spread to Smaller Banks
Even as the Dow Jones Industrial average returns to the 10,000 mark, the financial crisis is alive and kicking in the banking business. In the next week or so, the U.S. will reach a somber milestone: 100 banks down the drain in 2009. It will be the first time since 1992 that 100 banks have failed in a single year and only the 11th time it’s happened since the Federal Deposit Insurance Corporation (FDIC) was formed back in 1933.
The worst is far from over. The FDIC says 416 banks are at risk of failure, up from 117 a year ago. Soured commercial real estate loans alone may generate a fresh $600 billion in losses by 2013. Veteran bank analyst Gerard Cassidy of RBC Capital Markets expects as many as 1,000 lenders to go bust in total.
…
The run on FDIC funds is raising questions about how well the agency has contained the costs of the credit crisis. Bank failures are not of the FDIC’s making: the Federal Reserve failed to rein in mortgage-lending, while regulatory agencies like the Office of Thrift Supervision allowed banks to make loans without adequate capital. But the FDIC has the final say on when and how to close a bank, and some believe it has been waiting too long to act, adding to the cost of failures. Regulators labeled Chicago-based Corus Bank critically undercapitalized in March, but it took the FDIC until mid-September to shut it down–a closure that could cost the FDIC $1.7 billion.
Delays are happening in part because a recession is not a great time to buy a bank, and the FDIC is having trouble finding acquirers for troubled institutions. The FDIC could liquidate a failed bank or run it itself, as it did late last year with IndyMac. But those options tend to be even costlier. Meanwhile, “bad banks are more like fish than wine,” says Bert Ely, a bank-industry consultant and an FDIC critic. “They get smellier with age.”
…
Who cares about bank failures, so long as the stock market is going up?
Oct. 16, 2009, 10:21 p.m. EDT
California bank becomes 99th to fail in U.S. in 2009
By MarketWatch
SAN FRANCISCO (MarketWatch) — California regulators on Friday closed the San Joaquin Bank of Bakersfield, which became the 99th U.S. bank to fail in 2009.
The Federal Deposit Insurance Corp. said Citizens Business Bank of Ontario, Calif., will buy almost all the assets of the failed bank and assume all the deposits.
As of Sept. 29, San Joaquin Bank assets of $775 million and deposits of $631 million, the FDIC said.
The cost to the Deposit Insurance Fund will be $103 million, the FDIC estimated.
San Joaquin Bank was the 10th in California to fail this year. Before Friday, the most recent failure in the state was Affinity Bank of Ventura on Aug. 28.
“Rochester: Frank L. Wright house is up for sale for $875,000″
I guess it’s time to let someone else “enjoy” this piece of history.
http://www.democratandchronicle.com/article/20091017/BUSINESS/910170301/Frank+L.+Wright+house+is+up+for+sale+for++875+000
Got moral hazard?
Hat tip to Mr Richardson for making a distinction between the private banking industry’s Federal Reserve and the American people’s federal government!
Bailout Helps Fuel a New Era of Wall Street Wealth
By GRAHAM BOWLEY
Published: October 16, 2009
Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses.
* Goldman Sachs Group
* Bank of America Corp
Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes?
It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.
Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year.
Professor Bear’s thought: Loans from the Fed to Megabank, Inc at zero percent interest can’t hurt investment opportunities either, can they?
So even as big banks fight efforts in Congress to subject their industry to greater regulation — and to impose some restrictions on executive pay — Wall Street has Washington to thank in part for its latest bonanza.
“All of this is facilitated by the Federal Reserve and the government, who really want financial institutions to get back to lending,” said Gary Richardson, a research fellow at the National Bureau of Economic Research. “But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.”
…
To anyone who suggests the Wall Street resurgence is all good, since all Americans (and anyone else on the planet, for that matter) can participate in the wealth effects through stock market investing, I say “screw you.” Take a look at how much money Megabank, Inc destroyed over the past couple of years and how much they paid their top management while their balance sheets and stock prices went straight down if you want to see how likely you are to share the wealth with the multi-millionaire managers of Megabank.
I’m doing some work now for a MegaBank that got loads of bailout money. Had that not happened I’m certain I wouldn’t have this contract. Plus I fly up to NYC a couple of times a month for meetings. I stay in a hotel, take taxis, eat at restaurants. That’s all money coming directly from Megabank that enters the general economy and affects the little guy.
Next to defense contractors, my favorite clients are banks/brokerages and defense contractors. They spend the money to get things done. And if the govt kicks in a few billion to make it happen, all the better.
So in your world it’s okay for the government to kick in money for the bankers.
So then this means it should be okay for the government to kick in money for the auto industry, to kick in money for housing, to kick in money for health, to kick in money for unemployment, to kick in money for jobs, to kick in money for rebuilding our infrastructure, etc.
You wouldn’t want to be called a hypocrite right?
No he just like being on the Government cheese in an indirect way.
If I had my way I’d cut government spending by 70%. I know that will never happen. Hell, 0.07% spending cuts won’t happen. So I have two options. 1 is sit around and bitch. 2 go take advantage of what’s happening.
I have a friend who went ballistic when the stimulus was passed. Shortly thereafter his brother got a very nice contract with a county government that got a few million from the stimulus. His brother hired him as a consultant on the project. All of a sudden he didn’t think the stimulus was so bad.
Is that being hypocritical? Maybe. Does it really matter? No.
That money was extracted from the public for dubious purposes, yo.
Cabbie get a tip?
Of course. I am the most generous tipper you’ve ever seen when someone else is paying for it.
I’m doing some work now for a MegaBank that got loads of bailout money.
Major shocker, Joey, er, I mean, Eddie…
Beeeeeecause 2 people can’t simultaneously have a contract with a bank and not believe in the socialist claptrap you peddle daily? You’re a real trip dude.
What you just said does not make sense.
At the bottom of this is that you are spending my money and I do not approve. It’s not your fault so much, just being a pawn in the heist.
You don’t approve? Too bad. I don’t approve of about 1000 things that take place every day. That’s life.
Ahh, so what’s good for the goose is not good for the gander.
Let’s try again:
I don’t like the bailouts.
Bailouts will happen regardless of what I think.
If I have an opportunity to profit from bailouts, I will.
It’s not that about whether you benefited from the bailout Eddie. Good for you! Wouldn’t mind having some of that myself.
It’s just that the bailout did nothing to stop or slowdown a very high unemployment rate and it also rewarded the bad behavior of banks themselves.
The consequences of that is that will not be any real reform and therefore the process will repeat itself, causing more suffering and misery.
And when it does, position yourself to profit. That’s my point. These things will happen. You know they will. So why sit around and complain when you can set yourself up to make money? It’s like the housing bubble. You all saw it coming, you should all be me rich beyond your wildest dreams having acted accordingly by shorting builders, mortgage companies, banks. How many times did I read here the predictions of CFC going under? Did you short the hell out of CFC and make 1000X return on your investment?
Suffering and misery come to the clueless only.
“Let’s try again:
I don’t like the bailouts.
Bailouts will happen regardless of what I think.
If I have an opportunity to profit from bailouts, I will.”
I don’t like theft.
Theft will happen regardless of what I think.
If I have an opportunity to profit from theft, I will
I don’t like rape.
Rape will happen regardless of what I think.
If I have an opportunity to profit from rape, I will
I don’t like murder.
Murder will happen regardless of what I think.
If I have an opportunity to profit from murder, I will
Nothing but net from behind the arc.
Re the savvy and erudite maldonash.
(Hey Server! Quit dropping my posts in helter skelter.)
Eddie, knowing it will happen and being able to position oneself are 2 different things.
Joey, why did you change your name to Eddie?
And why do you always choose blog handles that end with the “eeee” sound? It makes me think of “whiny”, “wimpy” and “snidely”.
“…not believe in the socialist claptrap you peddle daily?”
Which part of what I post seems socialist to you?
- The idea that banks should not be legally enabled to steal?
- The idea that capitalism works best under a rule of law?
- The idea that the Fed should be subject to a rule of law?
- The idea that banks should not be granted “free” (taxpayer-provided) too-big-to-fail insurance?
- The idea that laws against price fixing apply to banks, too?
- The notion that the Sherman Antitrust Act should prohibit Megabank, Inc from existing in its present state?
- The suggestion that it is discriminatory for the Fed to only make zero-interest loans to Megabank, Inc, but not to the rest of America’s households and firms?
ME CONFUSED. Please enlighten me, Eddie/Joey.
Comment by maldonash
2009-10-17 19:15:16
“Let’s try again:
I don’t like murder.
Murder will happen regardless of what I think.
If I have an opportunity to profit from murder, I will”
Careful there, pal, Fast Eddie gonna call you out as a socialist
Comment by maldonash
2009-10-17 19:15:16
“Let’s try again:
I don’t like murder.
Murder will happen regardless of what I think.
If I have an opportunity to profit from murder, I will”
Careful there, pal, Fast Eddie gonna call you out as a socialist
To be sure he will.
No, I will call you a socialist when you rant on and on about the evils of capital markets, banks and profits.
As for the federal reserve making loans to banks. Of course it makes loans to banks. That’s what it’s there for. It, like all central banks, is a lender or last resort to banks and other financial institutions who could not obtain credit elsewhere.
The Fed was not created nor was it ever intended to be a retail bank.
As a general rule I never go down the rat hole of a Fed debate because. The Fed has its own Goodwin law in that the conversation will eventually lead to the insanity that is Ron Paul. But I have to make an exception when I read something as ridiculous as what you wrote.
“No, I will call you a socialist when you rant on and on about the evils of capital markets, banks and profits.”
Please cite one post where I did any of the above, or else I will have to call you out as a bullsh!t mo-fo.
“As for the federal reserve making loans to banks. Of course it makes loans to banks. That’s what it’s there for. It, like all central banks, is a lender or last resort to banks and other financial institutions who could not obtain credit elsewhere.
The Fed was not created nor was it ever intended to be a retail bank. ”
Is it possible for individual American households to qualify themselves as banks, in order to get zero-percent financing from the Fed? If so, I am highly interested — where do we sign up?
Across the street from my RENTAL and listed on zillow this home is 494K yet I know for a fact it’s going for 390k as a short sale. and man is there a lot of excitement.
my place went up 24k already!
“…listed on zillow this home is 494K…”
Is that the ’sale price’ the lender posted when they took it as REO? If not, how on Earth did Zillow come up with that misleading figure?
I came across a good article on the Phoenix bubble fallout in the weekly alternative newspaper, the Phoenix New Times:
“On the first floor, residents and the public would be treated to a gourmet grocery store with coffee drinks and gelato, a bakery, and other shops. A new Italian restaurant was to be built in partnership with one of the Valley’s top chefs, Michael de Maria. The Trattoria M was to be equipped with a “wine aficionado room” and private “chef’s table” room, plus a casual dining area. (De Maria, who closed his Michael’s at the Citadel restaurant in Scottsdale two years ago to focus on Centerpoint, did not return calls for this article).”
The place described above is an unfinished, deteriorating structure frequented by transients and those on alcohol-based adventures. Probably not wine aficionados.
And hundreds line up to invest money into a fund named Radical Bunny? Sounds like a stable, winning organization to me:
“Why did he put his money into Radical Bunny? Easy, he says; it promised a solid 11 percent interest, while most everyone else offered 6 or 7 percent. The chance to make money with money appealed to many people with lesser means, Hansen says. “Hundreds” of people took out second mortgages on their homes and plunked money into Radical Bunny. Many will likely lose those homes, he predicts.”
“Bankruptcy records reveal that hundreds of Radical Bunny debtors are owed hundreds of thousands of dollars each, and much of that is tied up in the failed Centerpoint project. Several, like Hansen, had invested well over a million dollars.”
http://www.phoenixnewtimes.com/2009-10-15/news/concrete-bungle-tempe-s-twin-towers-condo-project-collapses-financially-leaving-investors-in-the-rubble/
ann gogh
Zillow’s zestimates aren’t accurate. My former residence was $160K higher on Zillow,then the same model on the UHS website. Even at the real listing price, the house down the street from my former wasn’t moving. IIRC 140 dom. Same McMansion model, both w/pools.(and absolutely no privacy)
What does UHS stand for? I see it posted here periodically and thought I would have figured it out by now. But alas.
Used House Salesman
Geez….I thought it stood for Utter Horse S**t.
DennisN
If that ws directd at my post, I’ve been tracking my former neighborhood n a calendar for 2.5 yrs and it isn’t Utter Horse S**t. Zestimates in my former pud are much, much higher than homes are curently listed at. Zillow doesn’t include REO’s or Short Sales in their stats,iirc.
Geez….I thought it stood for Utter Horse S**t.
No, he posted @ 15:04:36 +
Thanks. I was defensive, that’s for sure.
I’ve been using my laptop to post, and it seems to have a keyboard problem. Excuse the many typos. I’m back on my office computer from now on.
Hi HBB’ers,
I’m listening to Turbo Tax Timmy on The Economist this morning. It’s a wonderful interview just chock full o’ the stuff that Timmy and Co. will do to protect me and mine “next time”.
I want to address one small point that he glosses over in this otherwise articulate, intellectual, and forthright interview. Simply delightful!
I want to talk about “clawbacks” which is mentioned by Turbo Tax Timmy in the interview. After mulling this over for a few minutes, one soon realizes that there is no way “clawbacks” are going to work in any practical way. The executives, managers, traders, etc. will make sure that there is no way they will ever be held accountable. I remember the sad end to “self-regulation” in the early part of this decade which begat “no regulation what so ever”.
Still, Turbo Tax Timmy, believes that an effective clawback clause will be adopted as a pillar of future compensation agreements. I know he believes this because he says so.
Idiot.
Roidy
The tip of an iceberg often belies the far greater mass of ice that lies beneath.
Dismal Foreclosure Numbers Could Be the Tip of the Iceberg
October 16, 2009 12:34 PM ET | Peter Roff
By Peter Roff, Thomas Jefferson Street blog
As the U.S. economy collapsed last fall, due in no small part to bad home loans made in the subprime market, the Democrats and the Republicans both made a lot of noise about the need to shore up the housing market to prevent further foreclosures.
Unfortunately, all the talk has produced little positive result. Figures released Thursday show that nearly 1 million properties went into foreclosure in the third quarter of 2009. That’s an increase of 5 percent from the previous quarter and nearly 23 percent from just one year ago.
…
Megabank, Inc gets an idea for fighting the mortgage crisis: INTEREST-ONLY LOAN MODIFICATIONS!
Mortgage Investors Speak Out Against Interest-Only Modifications
10/15/2009
By: Carrie Bay
As reported by DSNews.com this week, JP Morgan Chase and other lenders are lobbying the Treasury Department to include interest-only periods for mortgages modified under federal guidelines. Interest-only loans are well-known as one of the subprime culprits that sent so many homeowners into default when their payments eventually jumped.
One group of mortgage securities investors says it is frustrated with loan servicers’ lack of sustainable modifications, and argues that these so-called “extend-and-pretend” interest-only restructurings will lead to a delayed round of re-defaults and add to the nation’s already strangling foreclosure problem.
“The Mortgage Investors Coalition is focusing on solutions to re-equitize homeowners,” said Micah Green, a partner at Patton Boggs LLP who represents the coalition.
The coalition was formed in March 2009 by asset managers who currently hold over $100 billion in residential mortgage-backed securities (RMBS), on behalf of pension funds, college endowments, and other investors.
The Mortgage Investors Coalition (MIC) issued a pointed statement Thursday, calling on the Treasury Department to reject banks’ recent proposal on interest-only modifications.
“Modifying homeowners into mortgages that have future payment increases and adjustable interest rates will not improve a homeowner’s situation,” Green said. “Doing so would ignore the fact that many of these homeowners are already in interest-only or other non-traditional mortgages and owe more on their mortgage than their home is currently worth.”
…
I have a question for Polly or anyone else who believe they have the legal knowledge to field it: Is there any chance the Fed could be replaced by a central bank which was constitutionally required to follow a rule of law in their lending practices which stipulated they could not exercise favoritism in which firms or households could obtain interest-free financing? The current policy of only making interest-free loans to the biggest banks and forcing everyone else to pay interest through the nose seems patently unfair.
“…seems patently unfair.”
Note that I did not say ’seems patently illegal’, because frankly, I don’t know about the legality. But I am curious: Are there any legal limits on whom the Fed can choose to enrich by making interest-free loans? Why shouldn’t any American household or business be able to borrow interest-free if the biggest banks on Wall Street are allowed to do it? What is the legal basis for this practice?
Upon reflection, I have an explanation for what bothers me about the Fed’s choice to only offer zero-interest loans to Megabank, Inc.
Suppose another private bank besides the Fed chose to only make zero-interest loans to customers with over $1,000,000,000 (or some other very large figure) in assets, and charged everyone else a market rate of interest. Further, suppose the customers who qualified for zero-interest loans had recently demonstrating themselves to be very, very bad credit risks, through losing billions and billions of dollars. Wouldn’t this be a case of illegal lending discrimination?
If yes, what is different about the private Federal Reserve Bank which places them above the rule of lending discrimination laws? I seriously claim to know nothing about the answer to this question, and eagerly await enlightenment from anyone sufficiently versed in the law to answer it.
It is called the golden rule of law. He who has the gold makes the rules.
Or is it the Goldman rule of law?
Or perhaps, “He who has the gold, breaks the rules —
without legal repurcussions.”
OK, Polly is either studiously choosing to ignore my post or otherwise not available to answer, but I have a hunch about why the Fed seems to do whatever it chooses based on pure discretion:
We are in a financial crisis, and hence the usual rules don’t apply. Thus everything the Fed does is granted blanket immunity from the usual rule of law under the special circumstances of a panic situation.
Now the next question: Is it legal for Megabanks to pay big bonuses to their top management, even when they lost billions and billions of dollars and when their shareholders have lost their shirts?
And for a third question: Is it even legal to ask questions about the legality of what the Fed or Megabank, Inc do, or do they enjoy some kind of blanket protection against Socratic inquiry regarding their operations?
Yes bear…shareholders can always vote with their shares.. as in shorting till the cows come home.
But if they take a guv bailout….screw em….paying back the money is NOT good enough…eg Goldman Shats
Take back your rotten assets….then pay your mega bonuses if you think you can get away with it.
But OhbahhmaH doesn’t have the guts for that.
—————–
Now the next question: Is it legal for Megabanks to pay big bonuses to their top management, even when they lost billions and billions of dollars and when their shareholders have lost their shirts?
He who owns the Lawmakers gets the gold, man.
usual rules don’t apply.
Not since 1978 or thereabouts.
State lawmakers scrambled Friday to figure out if they could fix an oversight that has cost thousands of out-of-work South Carolinians extended unemployment benefits.
“I’ve never seen a job market like this before,” she said. “I’m 62, and I’ve been working since I was 19. It’s ridiculous.”
http://www.postandcourier.com/news/2009/oct/17/leaders-aim-to-fix-benefits/
She’s full of it. The recession is over, right? Happy days are just around the corner.
“I’ve never seen a job market like this before,” she said. “I’m 62, and I’ve been working since I was 19. It’s ridiculous.”
And there’s the corker. Many people sail right through several recessions and think all is right in their world… until the next one when it’s their turn to eat the sh!+ sandwich.
62? Maybe she forgot about those other 5 recessions in the last 35 years?
And speaking of “glitches” in the system, Texas is having major problems with the food stamp program because they don’t have enough staff and computers to process all the legitimate claims.
Texas is having major problems with the food stamp program because they don’t have enough staff and computers to process all the legitimate claims.
Wow. and I thought TX doesn’t believe in “socialism” as in helping out their out of workers.
“I’ve never seen a job market like this before,” she said. “I’m 62, and I’ve been working since I was 19. It’s ridiculous.”
Wait, isn’t this where Joey/Eddie chimes in to say that the only reason these folks are unemployed is that they’re not looking hard enough for work?
Gotta love our little troll-boy.
Back to serial lurking
So what would you do?
I was surprised by all the negative comments to my plan to give up a management job at a car store and finish up my teaching degree… First off I’m not a bad person because I choose sales as a career. I worked hard, gave back to my community, and treated people fairly in every aspect of my career. I have made profit for myself and my dealership, my family and theirs. Please don’t lump me in with every bad egg you know, I am more then just what I do for a living. Hell, I’m in this business because I had no choice, I left college to support my large family (4 younger sisters) after my father was unable to work and wracked with cancer. The car biz at the time was my best option, I grew up around it, I knew what to do, and I knew I could make enough money to keep everyone afloat. One summer turned into 4 years before my father beat back lymphoma and was healthy enough to work again, and at that point my income was near 6 figures and I was happily putting a girlfriend (now wife) through college. I gave up my dream of teaching and life was good.
Fast forward to today, the car biz is dead in this town thanks to a oversaturated market and the greater economic collapse. There are a few reasons we can’t move for a few years and so I need to make a hard decision. In 2 years I can have my teaching cert and be ready to teach mid/highschool science (general, bio, maybe chemistry), OR, I can be working in the car biz, making vastly reduced wages while putting in 70 hour work weeks. I’d be no closer to my goal of opening a business either way, and if the market really does implode the way everyone here seems to expect there won’t -be- a job for me there anyway.
To everyone so sure that I will be unable to land a job, what option do I have? I’m not looking to get rich quick, I’m just looking for something comfortable to do over the next 5-10 years and be able to watch my son grow up and participate in his life. I don’t consider 40k a year to be a pay raise guys, i’ll make more then that this year (next year, not so much…). I am thinking my QUALITY of life will improve. To everyone so adamant about how difficult teaching is, my wife is the most happily employed person I know.
If in 2 years its impossible to get a teaching job anywhere I contend that we’ll all have bigger problems to worry about, like learning to sustinence farm. I mean if the job market is THAT bad then can anyone tell me what I should be doing? I have some savings, I am young, healthy, attractive, personable, with a partial degree and a decade in the car business (which obviously carries a bad rap judging from the hostility here). What should I do?
I didn’t chip in the other day, but I’ll chip in today: I give you a positive comment
I don’t see anything wrong with anything you’ve done or plan to do. I hope the teaching thing works out. Good luck! If teaching doesn’t work, there are always other sales opportunities. Maybe not in cars, but there are plenty of things to sell.
Well thanks. I had to rant a bit, somehow my comment yesterday was taken wildly wrong… I hold no I’ll will towards teachers, I don’t think its easy money, I’m not a slimeball looking to leech off society.
I just want something stable and a chance to go to actually live with my family. As it sits I’m at work when the wife isn’t, and while she’s stood by me thus-far (she’s amazing) can I honestly count on this forever? I would sacrifice some time with family making last years wages, but only because it would put me close to owning a business of my own (yes, I have a plan that would work incredibly well in this economy thanks to my specific knowledge of a completely unserved 700,000 person market).
I will not get there at my current pay, and the sacrifice at home isn’t worth the costs. Even if I only matched wages with my wife I could be in my business in a small handful of years. I’m not giving up my dreams, but in the meantime getting to spend time with my lovely wife and son is worth the risk of giving up a job that will stress me out, work me raw, and make me minimum wage…….
And if I never get my business off the ground I still have a pretty nice life at 80k - 100k in family income, free health insurance, retirement, and time to live outside the workplace. Assuming I can get a teaching job. I’m confident I’ll be ok.
Probably working under the table…..
I think think educational system is broken, we spend way too much and get too little in return.
Why do kids succeed? Because they are pushed and motivated to a higher standard.
I really don’t blame the teachers as much as i do the lack of any guts American have to demand our kids succeed.
Eliminate the rap hip hop ghetto language from schools, No summer off if you can’t speak English and communicate without swearing or using the N word.
We don’t need millions of people with 4 and 6 year degrees in America for probably 1/2 the jobs. But it is a standard you must have to get in the front door….why??? a 1 year tech degree would be just fine, or an apprenticeship
I see education being cut 1/3 and i wish the money would be spent to make a high school diploma a real challenge to get. So employers won’t force you to get a college degree and all load you down with that debt.
I can dream ….can’t I
———————–
I mean if the job market is THAT bad then can anyone tell me what I should be doing?
Temporal,
You have already answered your own question! Your family and yourself are the only ones that you need to satisfy with your career decisions.
I also left college to help with family expenses and later returned to get a degree. The school work was much easier with a couple years of work behind me and a little better focus. I managed (had to) work while going to school. Your situation and opportunities sound most fortunate. Good luck Teach!
Temp, the negative response for me, at least, was your ‘come to Jesus’ moment. That will really offend anyone in the education world, and if a good principal smells that, they won’t hire you because they know their investment in you is worthless since you will leave when ‘things get better.’
At several of the schools I serve, there are many subs who have a sense of entitlement, and get mad when they don’t get called in every day. These are people that never took a Friday several years ago, and now it’s ‘our’ fault or something. Typically these people are kept out of circles by teachers and used up by administrators.
I don’t care one way or another, but you’re basically the same as some guy that just realized he ‘wants’ to sell his house. ‘Getting into teaching’ is truly like a rush to the exits + everyone ‘wants meaningful work’ now that stucco and Hummers are fading.
It’s most likely too late for that.
Actually muggy, I didn’t take your response as negative at all… You seemed constructive and honest.
I understand the sentiments you have towards the rush for the exits mentality. I myself have avoided running for the “next best thing” over the years (I watched people jump ship to be mortgage brokers etc) even at the cost of lower wages during the time. I wanted to stay at one place, to move up in the company. I felt mighty smart as all the green grass seekers found their way back to cars. Maybe your right, maybe it is too late, maybe I’m the last alligator in the puddle at the end of the rainy season. I don’t want to sit here while the puddle vanishes and everything dies. I’d rather cross the desert to find a better puddle. The odds are against me but what choice do I have?
forgive me for any spelling issues - typing from my palm pre in a hurry…
“The odds are against me but what choice do I have?”
Well, if you truly love people, and can overcome bias, you’ll be a great teacher. Chem would be #2 on my list, as a lot of people leave for the same reasons as Bio. All in all, Bio is the most bulletproof cert IMHO. Go for that.
I dunno. My fave teachers from my schoolin days were the veterans. But they had energy and love for what they did. Their enthusiasm was contagious! In the district we recently left I saw a lot of burn out, cynicism and thinly veiled contempt toward children simply because they weren’t easy students.
Interestingly enough, my son now is one of the star students in his new district scoring in the top 5% of state assessments. He would never have been that in the last place. Why? Because the school had decided he was deficient and treated him like a demon seed. His confidence was failing fast. He was dying inside.
What was wrong w/him? Slightly on the asperger scale. They thought his symptoms were a bad attitude to be punished. He further panicked because you dont rile an aspie up by yelling at them or condescending to them, you calm them. I brought them documented examples of how other schools were dealing w/issues. They refused to read them. The diagnosis meant nothing to the teachers. It was his fault. It was our fault.
Except, the next district never once had a problem w/him. From day 1 teachers treated him w/kindness; they knew how to minimize his symptoms until they weren’t an issue. Now I have teachers running up to me in the parking lot to tell me how much they enjoy having him in class. You have to wonder how much of the earlier symptoms were just anxiety from constantly being treated so poorly. We got his mid term report today. It’s A’s and a B and full of “a pleasure to have in class” comments. Same kids, same parents, night and day results. The difference was the quality of teachers and administration.
Temporal, If you can be an inspirational loving teacher. Please we need you. I will get down on my knees and profusely thank the dedicated ones but America has more than a few burn outs to replace.
Many posters see things in monochrome.
All doctors are the devil.
All LLs abuse tenants.
No journalist ever contributed to society.
The rich must have stole it.
Shrubbery was worse, or is it BHO?
I sat good luck in new career path.
“What should I do?”
1. Go back to the dealership.
2. Secretly prepare a Suggested Invoice Sticker Price from $38,000 and change it to $3,800 and change and well as the additional paperwork made out to mikey.
3. Email me your telephone number.
4. Be prepared to meet me on the lot after dark with the keys by the hood of a shiny new 2010 model, with the contact and your Dealer plate.
Unlike, some of these hard hearted people, mikey is prepared to forgive you !
Didn’t you ever see “Fargo”?
“Fargo”?
Wood chipper.
Ya, sure, yabetcha.
My two cents:
My wife was a teacher. She lasted 3 years before burning out. It was sad to see really since she loves kids and always wanted to be a teacher. But once she entered the system it wore her down to the point that the $30Kish wasn’t worth it. She knows many ex-teachers that went down the same path and were out within 5 years.
It’s a grueling thankless job that pays crap. My advice would be don’t do it.
Eddie, where did she teach? And at what grade level?
One of my kids and the spouse both teach at the HS level in the PNW and still love it after 10+ years. Stressed? Burned out? Not that we’ve heard.
Obviously some do stick it out otherwise there’d be a lot of empty schools. She taught 3rd/4th grade. I think HS would be less stressful. You’re actually teaching then. Elementary school is babysitting to a large degree.
I’m not sure that teaching HS isn’t babysitting when students can bring blankets and sleep in class. I wouldn’t have believed the blankets if I had seen it frequently. My kids reported on the sleeping.
Does she qualify for community college teaching jobs? I talked my HS math teaching sister into stepping up to a community college gig, and she has never, ever looked back…
My wife is 8th grade science. She spends her days doing labs, teaching funstuff, and has minimal homework to grade (what little she does have she pays a struggling friend of ours to do, it helps her without just blatently giving her cash, she is also borrowing one of our cars until she’s on her feet)…
Science is one of the cool classes. Now trying to teach 8th grade english in phoenix? Not for all the tea in china :).
“Now trying to teach 8th grade english in phoenix? Not for all the tea in china”
That is a bias you will need to overcome, as you would have ELLs in your 8th grade science class. This issue is the heart of my current field work.
Actually I wasn’t saying that because of all the ELL students…
My point was English is a difficult to teach class in a middle school environment (despite the student’s ethnic background, English is a very homework intensive in-depth subject for a teacher to teach, and kids at this age-group aren’t typically interested in it).
To put it another way, the english teachers I’ve talked to at my wife’s work were all unhappy, and wished they had chosen a different route in their career…
This would largely be because those of us who majored in lit and realized there were no jobs requiring a major in lit (other than marketing — no thanks) thought we’d be talking about books in class.
Hardy, har, har.
Instead, I am teaching 15 year olds what a subject and verb are because they DON’T know. I’d attribute this largely to the fact that their parents are VERY uneducated (mainly immigrants, at least where I work in Southern California) and secondly to the fact that most of them NEVER read — at least, not anything other than poorly worded and spelled text messages.
However, if you love your kids and teach them what they need (regardless of what the state standards tell you you’re supposed to be teaching) they will learn, appreciate what they are learning, become more OPEN to learning and reading, and respect and love you back.
That is more reward than most other professionals will ever get.
Still, I totally, totally understand English teacher burnout and would almost NEVER recommend it as a career path for someone who is thinking about it because they love literature.
People make the best choices they can. Few of us have the ideal career. One that you can do and make decent money is a good deal right now. This is especially true right now. Good luck with whatever career you pursue.
This could be the flip side?
St. Lucie tops state in foreclosures
By KIMBERLY MILLER
Palm Beach Post Staff Writer
Thursday, October 15, 2009
St. Lucie County topped the state in September for its rate of foreclosure filings with 1,900 homes - one in every 69 - in some stage of foreclosure, according to a RealtyTrac report released today.
The number of filings is a 15 percent increase over August and a whopping 73 percent jump compared to September 2008.
It was enough to push St. Lucie to No. 1, with Lee and Osceola counties coming in second and third respectively.
“I think we anticipated that there was going to be more coming,” said Curtis Lowe, president of the Realtors Association of St. Lucie County, about the foreclosures. “People may have been making ends meet, but then if they have an adjustable rate mortgage and it goes up; it’s pushing them way over the edge.”
Palm Beach County ranked 25 in foreclosure filings statewide in September, according to the Irvine, Calif.-based RealtyTrac, which began issuing reports on foreclosures in 2005. That reflected a 28 percent decrease in Palm Beach foreclosures in September compared with August. But with 2,992 homes in some stage of foreclosure, it was still a 13 percent increase over the same time last year.
Martin County ranked 38 statewide in September foreclosures, a 14 percent decrease from August and less than a 1 percent increase over September 2008. About one of every 290 Martin County homes had a foreclosure filing in September, faring better than Palm Beach County, which saw one in every 213 homes under foreclosure.
The statewide average for September was one in every 158 homes, while the national average was one in every 372 homes. Florida posted the third-highest foreclosure rate nationally in September - behind Nevada and California.
St. Lucie had skirted the top Florida foreclosure spot all summer, coming in second in July and third in August.
Lowe said he doesn’t want to read too much into the rankings as counties swap positions all year long.
“It doesn’t make me feel bad, but not good either,” he said. “We were No. 1 in the country for growth several years in a row, and this could be the flip side.”
My LL has not paid the mortgage on the place I am renting in Jupiter Fl. in over a year and it has still not shown up on RealtyCrack, along with about 10 other houses I know about. Only the Shadow knows.
When Michelle Holmes, bought her Martin County town house, she never thought she’d be securing a loan guaranteed by the U.S. Department of Agriculture.
“It was really easy to work through,” Holmes said about buying her $120,000 town home late last year. “It had a really quick turnaround time.”
Without a down payment and good credit score, she was able to secure a Rural Development Home Loan, backed by the USDA, through Palm City-based East Coast Mortgage Lenders.
And Holmes isn’t alone. She joins dozens of other Treasure Coast residents taking advantage of the little-known home loan program, where the USDA essentially guarantees a mortgage with a bank, should the loan go bad.
According to documents from the Florida’s USDA Rural Development office, which tracks the program, 46 loans for $5.81 million have been doled out to home buyers in Martin County in 2009. A stark contrast to 2005 when the program had no loans in the county,
The program is also proving popular in Indian River County with 34 home buyers receiving a total of $3.73 million in loans so far this year.
To qualify, the homes purchased must be located in an eligible rural area as defined by the USDA, which is why the program isn’t as popular in densely populated St. Lucie County. Only $528,487 for six mortgages with the program were identified there in 2009.
The program offers 100 percent financing, stays at a low fixed interest rate, has flexible credit guidelines and home buyers with low credit scores may qualify.
Paul DelGrosso, vice president of Vero Beach-based All American Mortgage Lenders Inc., said with lenders tightening credit standards and less money available for borrowers, the program is proving to be a popular mortgage avenue across the Treasure Coast.
“We really saw a pick up on USDA loans when the 100 percent financing went away,” DelGrosso said. “Everything else, FHA (fixed-rate loans guaranteed by the Federal Housing Administration), the VA (fixed-rate loans guaranteed by the US Department of Veterans Affairs) required a 3 percent down payment, but this was true 100 percent financing.”
Providing mortgages to borrowers who didn’t have a substantial down payment and not-so-stellar credit scores is arguably what pushed the Treasure Coast’s and nation’s housing market to the brink of collapse after the boom of the mid 2000s.
A recent article in BusinessWeek titled “Subprime Redux” even characterized the USDA loan program as a throwback to those times when homeowners binged on a smorgasbord of easy credit.
The report states, “in Port St. Lucie — a coastal town littered with foreclosures and empty subdivisions — roughly one in five mortgages is coming through the Agriculture Dept., according to local industry players.”
Gainesville-based Ellen Boukari, public information and community development coordinator for the USDA Rural Development’s Guaranteed Rural Housing Loan program, said BusinessWeek’s report contradicted the agency’s Treasure Coast statistics.
“After reviewing program eligibility areas, St. Lucie County has more ineligible areas than Indian River County. Also, all of Martin County is program eligible,” Boukari said. “This may provide some explanation why loan volume is higher in Indian River and Martin counties.” Doug Kent, owner of Mortgage Masters Group in Port St. Lucie. also disputed the magazine’s claim.
“There’s hardly any (USDA-backed loans) in St. Lucie County,” Kent said. “I think people are critical of it because it’s a riskier program. These people don’t have skin in the game without a down payment. So, they might have a valid point.”
But despite criticism and naysayers, those in the real estate industry see the program as a positive and believe it’s helping the recovery to the local housing market. They hope more mortgage firms on the Treasure Coast will use the loans to get home buyers in vacant properties.
“It’s a really attractive program … and it’s the economy and defaults creating problems with foreclosures not these type of loans,” said Pollis, who owns East Coast Mortgage Lenders and helped Holmes obtain her loan. “The fact is values are down. The real estate market has dropped and people are upside down in their mortgages. It’s an uphill battle, even if they did put 20 percent down on a home back in 2005, nothing’s going to change their situation. That’s the major problem here.”
Has anybody read up on the Copenhagen Treaty?
http://www.youtube.com/watch?v=ddQvhdCyhe4&NR=1
Looks like I’ll be moving to the Country of Texas soon.
*** tilts ear toward window, hears the distant sound of a troll laughing, and change jingling…
Is that good or bad?
yesterdays bits. Again, it is a corporate thing. I doubt seriously that teachers want new textbooks yr after yr. First they know the students don’t usually have the extra scratch for them, and 2nd. except for the internet PCs etc, the information is usually the same as last yr. So why?
Corporations. Neil Bush has a major textbook corporation that is tied into ETS, which Barbara said she would donate to New Orleans after Katrina ONLY HIS books. ETS is tied to Bill Bennett who worked for them before when it was just a multi million $ corp, then got the gig for Education Secretary, suddenly the ETS corp became a BILLION $ corp overnight. Imagine that.
“Neil Bush has a major textbook corporation that is tied into ETS,…”
It’s nice to be Neil Bush.
I suppose I was hasty in my comments. Those sidebars are important. I guess I shouldn’t so easily dismiss the contributions of left-handed homosexual manatees to the field of mathematics.
Hawaii’s health insurance premiums are nearly tied with North Dakota for the lowest in the country, and Medicare costs per beneficiary are the nation’s lowest.
Hawaii residents live longer than people in the rest of the country, recent surveys have shown, and the state’s health care system may be one reason. In one example, Hawaii has the nation’s highest incidence of breast cancer but the lowest death rate from the disease.
Hello friends.
We are living a very calm month in october. There’s not green shoots neither bad news. I thought this month became the reality, the bad news about the economy. But everything is still. I think is the calm before the storm. we’re aproaching to a new 1,5 dollar vs euro and 75$ the oil barril. But there’s no news. Our goberment have done a great job for cause good impression about economy is in recovery.
In spain we have a economist called Santiago Niño Becerra. Since 2006 he was predicting what now is happening. As he says, this is not a normal crisis but a sistemic crisis. And now we are living in the precrisis. The real crisis will become in 2010. Your spanish fellows are in a forum called “burbuja inmobiliaria” in this link “www.burbuja.info” and most of people there believe in things that Santiago says, not that goberment says.
If you know how to read spanish here you can read his articles: http://www.burbuja.info/inmobiliaria/burbuja-inmobiliaria/51307-articulos-de-santiago-nino-becerra-post-oficial.html
In anyway I go to translate the last article of SNB. Maybe is interesting for you. Sorry for my spelling mistakes, I’m not english and yesterday were too much beers.
Tomorrow.
It’s curious (no: it isn’t) that is emerging a new worry: inflation: as states continue to have injected and injecting massive amounts of money into the system, there may be a danger that the money, when recovery has occurred , triggering an inflationary surge.
This reasoning forget two elements: 1) inflation arises when consumption is greater than supply (I use ‘consumer’ and not ‘demand’ on purpose), and 2) prices can be reduced by improving productivity, and uses reasoning: the system will continue operating as it has worked up until now through interactions where monetary and financial manipulations of interest rates, money supply, trading and role of states, will remain the essence of economic scenario.
From the outset, I think what will come of this systemic crisis will be a completely different reality that has led to a systemic crisis we’re going to have to go (we’re going to have to go because it is inevitable because follows the evolution of things), why should I think?, because it is absurd that it becomes a situation identical to that which caused the crisis that produced the change. The latest example is the Great Depression.
Consequently, instruments that have so far been used in reality and the elements that have hitherto characterized the reality will change. These instruments were designed to avoid price increases occurred and turn them off, and reactivate the cyclical downturns that were unleashed, the aim was growth through consumption-global-with everything imaginable, so that the global-supply-of should not have any restrictions. The recent past and present are known.
But that happened in an atmosphere of wasted resources, inauthentic use of factors and virtual payment and collection of what is bought and sold. And the future, I think, is going to be just the opposite because that procedure, which has led to dramatic increases in GDP, though fictional, is exhausted.
Systemic change will emerge from this crisis have to do with efficiency and productivity, and the necessary consumption and supply measure, and with the goal of zero waste. In a scenario like that unemployment of labor as we understand it today if it is a problem, but inflation?.
Of course it is always possible to artificially inflate prices by regulating the supply or via taxes to curb consumption spending for commodities is lower than it is, but that inflation would be another completely different inflation.
(It is said. In the USA the support will continue until “well into 2010″ (El País 10.10.2009, p. 28), while the OECD said that between the second and third quarters of next year, Spain will grow positively, but USA has it that painful, and for completing the arrangements, the Index of Consumer Confidence in the kingdom in September fell 9.2 points reaching the same level as showed in June, with the section ‘Expectations’ the most dropped: 10 , 8 points, leading to the perception of the economic situation of Spain recede 12.9 points (Dossier Econòmic 10-16.10.2009).
My impression (mine) is that, who can / have to, are tinkering with reality. ‘Are we being misled? “Says the fund, not that I know, but what if I think is that with Adobe Photoshop type software is actually more Light composing a less aggressive, more digestible. After tomorrow it will not do any good, of course, but tomorrow. Tomorrow).
(Lacartadelabolsa you’ve read in a long, long: Spanish financial institutions have sub-prime: loans, real estate and not to be outstanding as the working population will lose their jobs and businesses when it begins to rain cancellations orders and non-payments, said that such was the subprime Spanish and good: it’s coming to light. Lately been Moody’s, but a reader sent me something much wilder: this: FT Alphaville »Blog Archive» Are spanish banks hiding their losses?. Of course, all this can be believed or not deny, qualify, but the debts are financial institutions are there, as everyone must have income to pay their debts, if not … ).
(In a few days will discuss this matter in greater detail, is an advance. I do not think we are in deflation, but we are moving towards a deflationary environment, outright; is your cause?, Sinking consumption (almost all); ” the reasons for the collapse?, falling final monetary income (money you have in your pocket to reach the end of the month) and depletion (long ago) of debt capacity. “Increased savings?, not at all: no-consumption, which is not the same, ie unable to consume: the saving is something thought, planned, non-consumption is something, yes, but the desperate).
Santiago Niño Becerra. Professor of Economic Structure. IQS Faculty of Economics. Ramon Llull University.
thank, google translater
Cruzcampo,
Gracias por la perspectiva de España.
Way OT.
Went to the Great Wall today. Can any Chinese speakers here tell me what this sign is supposed to be saying?
http://www.flickr.com/photos/tppllc/4021314367/sizes/l/
Apparently, the wall is still effective because I didn’t see one Mongolian on the south side of it.
lol.
“Front the slope steep please loose headway”
Translation: Steep slope proceed with caution?
Shesh Reuven, can’t you read English? Stoopid round eye with your fish eye lens.
Just to set the record straight on Fast Eddie’s accusation that I am a socialist, I am not. Rather, I am a capitalist in the tradition of Adam Smith, the father of capitalism, who pointed out that capitalism functions best when governed by a rule of law.
Do you have something against governance by a rule of law, Eddie? Or is it that all animals are created equal, but some animals are more equal than others in your corner of the planet?
Tehran Times
Iran’s Leading International Daily
October 18, 2009
Why Obama’s housing rescue hasn’t prevented record foreclosures
After taking withering criticism for the Department-of-Motor-Vehicles pace of its initial efforts to keep struggling borrowers out of foreclosure, the Obama administration proudly announced last week that it had hit its goal of 500,000 trial loan modifications almost a month ahead of schedule. But with the foreclosure rate hitting a new record in the third quarter, the government’s ability to put a meaningful dent in the tally of housing-crisis victims faces renewed skepticism.
Foreclosure filings were reported on 937,840 homes in the three-month period, a 23 percent jump from a year earlier, according to a report real estate firm RealtyTrac released Thursday.
Home foreclosures in September, meanwhile, decreased 4 percent from August but remained 29 percent higher than a year earlier. “”REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts, and high volumes of distressed properties,”" RealtyTrac CEO James Saccacio said in a press release. Here’s a look at why home foreclosures continue to break records even in the face of the Obama administration’s expansive efforts to prevent them.
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Foreclosures pose challenge, cost to census count
Families who abandon home harder to track, more costly to tally
Associated Press
October 18, 2009
LOS ANGELES — - Foreclosures will make it tougher and more expensive to get an accurate census count next year as families move in with relatives or are left homeless, the Census Bureau’s director said last week.
Director Robert Groves said he expects some of the census questionnaires mailed out in 2010 will land at empty homes in areas hard hit by the housing crisis. That means census workers will need to make more door-to-door visits to verify whether anyone lives at these addresses, and that costs more money.
“One absolutely unambiguous impact of the foreclosures is there’s going to be more people knocking on doors. It’s going to be more expensive to do that,” Groves told reporters during a visit to Los Angeles.
Job losses have left more than 13 percent of American homeowners with a mortgage behind on their payments or in foreclosure, according to an August report by the Mortgage Bankers Association. The worst of the trouble has been concentrated in California, Nevada, Arizona and Florida.
Some economists expect a wave of foreclosed properties could hit the market next year after many lenders put a moratorium on foreclosures during this year to stem the crisis.
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This article contains some gems. For example, do “previously upper-middle-class families” go straight to homeless status in a typical recession?
“Groves said census workers will need to focus on reaching out to families that have doubled up with relatives until they can get back on their feet. He said many may believe their housing situations are only temporary, but they need to be counted wherever they are living next spring.
He also said census workers are paying extra attention to counting the ranks of the newly homeless, such as previously upper-middle-class families hit by the recession.”
Found in my e-mail this morning spam with subj.: Behind in Your House Payments? This type of spam is the first for my mailbox. Could be a barometer of increasing delinguencies?
What do banksters have against the notion of a rule of law? Do they think their industry can somehow thrive in an outlaw society? Why can’t they see what a mess has been created by two decades of progressively laxer regulation?
Obama, Advisers Push Back on Bank Lobbying Against Regulation
By Julianna Goldman
Oct. 18 (Bloomberg) — The Obama administration is fighting back against banking industry efforts to weaken the president’s plan to revamp financial regulations.
White House officials say they are frustrated that major financial firms are fighting President Barack Obama on the regulatory overhaul after taxpayer bailouts helped firms restore profits and near-record compensation for executives.
Their anger is directed even at companies such as New York’s JPMorgan Chase & Co. and Goldman Sachs Group Inc. that have paid back their government assistance and reported a surge in third-quarter earnings this week.
“We are disappointed by the lobbying of anyone in the financial industry against regulatory reform, considering the obvious need for change on that front,” Valerie Jarrett, a senior adviser to Obama, said Oct. 16.
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These guys are saying the right things, but actions speak louder than words. It is too early to say whether action will follow rhetoric.
‘Firm Rules’
Now is the time for “firm rules of the road so that banks can’t game the system and the financial crisis on Wall Street doesn’t end up hurting folks on Main Street,” Obama said Oct. 15 at a Democratic Party fundraiser in San Francisco.
Lawrence Summers, director of Obama’s National Economic Council, reinforced the theme Oct. 16 in New York.
“There is no financial institution that exists today that is not the direct or indirect beneficiary of massive taxpayer support for the financial system,” Summers said in remarks to a conference sponsored by the Economist magazine.
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BILLIONS IN PROFITS
The News
Goldman Sachs and JPMorgan Chase each reported profits of more than $3 billion for the third quarter.
Behind the News
Both banks benefited from billions of dollars in federal aid during the financial crisis — money they have since repaid. Goldman’s results were powered by its trading operations; JPMorgan’s profit owed much to its investment banking division. The results bolstered their positions as Wall Street’s strongest banks as others continued to suffer from bad loans.
Fats cats stick it to Main Street yet again
Wall St. Rip-off, Round 2
Jessica Fargen By Jessica Fargen
Sunday, October 18, 2009 - Updated 2h ago
Outrage is brewing on Main Street at word that the Wall Street fat cats bailed out by taxpayers just a year ago are raking in $140 billion, even as average Americans lose jobs and struggle with soaring health-care costs, stagnant wages and a world of economic hurt.
“Wall Street is mocking us,” Robert Weissman, president of Public Citizen, a Washington consumer group, told the Herald. He expects populist anger to build when billions in bloated bonuses are handed out later this year.
“There will be much more rage and much more befuddlement that this could be going on within the year that the same industry has been saved by trillions of dollars of public support,’‘ he said.
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“Let them eat cake.”
Latest Wall St. bonuses are simply obscene
BY Nomi Prins
Sunday, October 18th 2009, 4:00 AM
Last week, Goldman Sachs released its second-best set of quarterly earnings ever, putting the firm on track to paying its highest bonuses ever. Reacting to suggestions that this was somehow wrong, Goldman Sachs Chief Financial Officer David Viniar said, “We are focused on the economic climate. We are focused on what is going on with other people.”
He held back what most people at Goldman are thinking: “We really just don’t care.”
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The Lilliputians sure are murmuring loudly this weekend.
From The Sunday Times
October 18, 2009
Survival of the greediest: The 2009 bonus scandal
Investment banks profit as the public suffers
Dominic Rushe and Iain Dey
Fat Cat Graphic
Inside the London headquarters of Goldman Sachs, the chatter last week focused on one thing. As ordinary mortals feared rising taxes and unemployment, the concern for staff of the “giant vampire squid” — as the bank has been labelled — was what to do with the vast bonuses heading their way.
A mere year after the financial system was bailed out with hundreds of billions of pounds from governments around the world, Goldman’s bankers are set to reap more loot than ever. Bonuses of £5m to £20m per person are likely in its senior ranks after the bank announced profits of £2 billion for the third quarter of this year.
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Raymond J. Learsy
Scholar and author, “Over a Barrel: Breaking Oil’s Grip on Our Future”
Posted: October 17, 2009 06:48 AM
Goldman Turns Into a Financial Frankenstein While the Fed Snoozes Away
Megabank, Inc keeps biggering and biggering and biggering…but bear in mind Herbert Stein’s Law will ultimately rein them in:
Anything that cannot go on forever will end.
This has gone on quite long enough. It is time for the Audacity of Hope to morph into the Audacity of Change.
Bush/Obama Policies Helped Biggest Wall Street Firms Get Even Bigger
Sunday, October 18, 2009
Washington’s response to the economic crisis that began last year has done little to help the average American get going again, but it has helped some of Wall Street’s most powerful institutions become stronger than ever. Reducing interest rates to near zero has not loosened lending to allow small businesses to thrive, but it has helped Goldman Sachs and JPMorgan Chase finance their high-risk trading, which has yielded big returns this year. These banks are also benefiting from fewer or weaker competitors who aren’t in a position to challenge these revitalized behemoths.
Because Goldman Sachs and Morgan Stanley were allowed to reinvent themselves as bank holding companies, they were able to borrow money cheaply and issue bonds, guaranteed by the Federal Deposit Insurance Corporation, worth tens of billions of dollars.
“All of this is facilitated by the Federal Reserve and the government, who really want financial institutions to get back to lending,” Gary Richardson, a research fellow at the National Bureau of Economic Research, told The New York Times. “But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them.”
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