Bits Bucket For October 24, 2009
Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
January 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
$hittigroup is in serious trouble. Raising rates of customers ahead of deadline. Desperation for revenue. Always a bad sign.
“desperation for revenue” …in my personal universe, a lot of clients are retiring their debts, i.e., paying them off in full. Hence my own desperation for revenue has caused me to agree to lend about $250K on a real house w/ 1000 feet of shoreline (but just a narrow strip on the “shore” side of the road). The shore is a bay shore a couple of miles from open sea. The “desperation” part of it is, I REALLY want their business, so am charging only 8.0% interest (a full point lower than usual) and have agreed that they need not retire the $80K note I have from them on another property. The shorefront house was listed at $399K, they believe their no-contingency offer of $310K will be accepted, and I said if they can come up with 20% down before selling the smaller house (the one w/ the smaller note), I would be OK with that. Just what we decry, buying before you sell…I did give them a small inducement to retire the other one, viz., I said I would give them a 20-yr mortgage on the larger one but be willing to convert it to 30 years if/when the other note is paid. I wouldn’t mind ending up w/ one of these houses; I DON’T want both of them.
“… in my personal universe, a lot of clients are retiring their debts …”
John Mauldin addresses this in his latest newsletter. To get a copy, google-up “john mauldin october 23, 2009″.
Mauldin is a good read.
Mauldin grew up in a different time, and his clients actually made money, so they likely can “retire” their debts. Fast forward to the new world where walking away from your debt is easy and kewl, and the lender is made whole by the taxpayers. Savers are losers!
Combo, thank you for the reference. This is the first thing I have read over the past five years that is not MSM pap, that offers some hope for the next generation. I have been despairing. My middle son -with a BS in a hard science - bagged the job market after nine months and joined the Marines. My oldest gets a Ph.D. in BioPhysics in December, with honors. No offers - I steel myself for a the announcement of a first job as a day care provider. My youngest is still in high school. I throw up my hands. I have no idea how to advise him, and he badly needs some kind of guidance.
These are decent, hard working kids with good grades who have kept their noses clean.
I have no framework of reference other than the old models. I have done my utter best, but there is nothing I can do to help them. It ranks right up there on the list of parental horrors: being powerless to help and guide your children.
So thank you for the Mauldin article, which I will read every time I would otherwise cry.
Too many eggs in one fragile basket.
That reminds me of a tongue twister from junior high. Quicky repeat this out loud 10 times:
A city cop shot a city sherrif.
(Yes, I know it’s juvenile
)
I slit a sheet / A sheet I slit / I sit upon a slitted sheet
Try ‘a tube of toothpaste’ three times.
Now I have to floss.
I don’t get it.
Faster
We are a Dumb country, seriously stooopid, our “leaders” couldn’t even figure this one out.
The regulations should have taken effect the day when it was signed it into law..
“We are a Dumb country”
What you mean “we”, Paleface? (Tonto to Lone Ranger)
Boy I really set myself up for these comebacks….
my sentiments exactly. we let our country be over-run by “immigrants” with an “ENTITLEMENT” view of the world. Well, not exactly, there were already a bunch of parasites on the “system”, voting for more handouts for themselves.
the influx of more government handouts simply added enough “votes” in the gimme camp to put a class of big-time spenders into governments everywhere in the US of A. Their “entitlement”, my expense, via taxes and unfunded mandates paid with free money from the FED, depleting my savings and wrecking the economy………we’re over the edge now.
By the way, I finally made the role of the unemployed. My last day was yesterday. Another 8 year dead -end. The last was 7.
Perhaps the government will support me? That would be fair wouldn’t it??
I’m sorry, Diogenes, and hope that you find something new and better soon. In the meantime, please take unemployment compensation. That’s what it’s there for.
Absolutely take the unemployment.If companies didn’t have to pay into it, they would have more money that could be used for salaries. Not sure they would actually pay employees more though. And good luck with the job hunting.
Yes, diogenes, my best wishes, I’m rootin’ for ya, guy. BTW, why do you think they’re pushing so hard for “hate crime” legislation up in DC? These folks must be pissin’ with fear, realizing how despised they are. They’ll probably transgender themselves so they can all have special protections.
Sorry to hear that, Diogenes. Haven’t seen you post in a while - good to see you around. Def. take the unemployment….won’t cover your living expenses, likely, but it sure helps.
And I agree on the entitlement folks. *SOMEONE* has to pay into the system. Current policy discourages that at the moment.
Diogenes, if you’re o.k. with it, let us know what you’re field is. I have a wide net here in Pinellas. I can’t promise anything, but I’ve made calls for HBB’ers before.
If I recall correctly, Diogenes, you worked for a company that supplies construction materials. They decided to expand just as the bust was developing, right? Anyway, you knew the music stopped some time ago, so hopefully you were able to save some money. Unemployment? You bet — every penny’s worth! Florida isn’t coming back for some time, so maybe a move would relieve the pressure. Remember, we’re all expendable; move slowly, keep your eyes front.
We could solve a lot of problems with term limits.
I’m all for term limits for politicians. My suggestion is: limit them to two terms.
One in the Congress, followed by one in the prison.
“limit them to two terms.
One in the Congress, followed by one in the prison.”
ROTFLMAO!
If we had public funding of elections all sides would get the same amount of money….then lets see if we need term limits
Exactly. Term limits won’t cure big money’s corrupting influence.
And I mean ALL sides so Nader, would have got the same amount as OH and McCrane
That would have made for an interesting election
I still like the idea I saw proposed here once upon a time - expand/change Congress to include 30% ‘conscripted’ individuals. Kind of like jury duty, but for a year or two. Yes, the average person is quite unintelligent, but ratio is small enough to keep from doing too much damage, and big enough to counteract the monied interests…
Will they get more bailout dough if necessary? Or is the bailout concept pretty much like the taxation concept by now in terms of political popularity? Come to think of it, when packaged in the form of a $700 bn TARP, bailouts amount to pure, lump-sum taxation. Were the Republitards too dumb to figure this out last fall, or were they just blinded by panic?
P Bear I recall only a handfull of Repubs voted for this bill. The TARP was designed by Paulson, Gietner et al. and if I am correct they are democrats all. It has been the same Ivy League group that has been the brains behind this mess for the last 20 years. This is a great country and I think the silent majority is finally awakening.
Paulson was W’s Treasury Secretary. Are you sure he is a Dumbocrat?
But aren’t they ALL members of the Goldman Saxocratic party?
“Goldman Saxocratic party?”
Loot first, ask later…
They are all Goldman Cronies.
Would you guys stop with the politics? It only exists to distract us from the actual banker pigmen pulling the ropes.
We really need an antidote for retardican amnesia ravishing the country.
Emergency Economic Stabilization Act of 2008 was written by Paulson and Bernanke and the bill was signed by the clown who appointed these two charlatans. Geitner was appointed in 2009 and had no input into this payback to the banks for keeping the the economy from collasping from 2000-2008.
The “Ivy League” co-sponsors?
Chucky “Death Panels” Grassley(r)
Jim “I’m on your side… honestly” Bunning(r)
Joseph “I can’t be trusted” Lieberman(d)
Susan M. Collins(r)
But who’s been in complete charge since January, and why are they only making things that much worse? It’s not that they’re not fixing things fast enough, instead they’re doing more of the same nonsense, at an ever increasing rate.
And didn’t our esteemed President and Speaker vote for the 2008 bailout enthusiatically and unapologetically?
They ALL work for Goldman Suchks and their thieving cronies in the “investment banking” community.
It’s a really nice arrangement. The FED (private company) prints up “dollars” and passes them to the “investment banks” at ZERO interest. they loan it out at 18% (now 30, can you say Mafia or racketeering), and keep the profits to spend in our ecomony as “legal tender”.
The BEST part is that they not only get the money for basically nothing, the can “leverage” up to 50 to one, since the repeal of Glass Steagel, so they can legally gamble in the market, and reap huge profits. They made some really bad bets in 2005-2007 and lost TRILLIONS of dollars. They are hiding those loses because the FASB says it’s okay.
And best of all, the really, really bad loans that will never be repaid, were “bought” by the FED with the help of the “Treasury”, so that nothing ever needs to be revealed.
What a great game! It’s too bad that the CONGRESS gave the FED the legal power to print the only “legal tender” in the USofA. They need to take it back and “WE THE PEOPLE” need to throw these crooks out on the street and take back the right to print out currency through the treasury, backed by GOLD.
If we don’t we will all be very poor in the not to distant future.
“We really need an antidote for retardican amnesia ravishing the country.”
Unfortunately, the current Democraptic destruction of the economy is not an antidote.
Just like drawing and quartering the condemned is not an antidote for their appointment with the hangman.
Check your history…. FED=JPMChase. GoldDiggerSucks sings harmony in the trio.
Yes cobalt, but drawing and quartering is much more satisfying and makes for better TV.
’silent majority’
LOL- Haven’t heard that one in a while. Wasn’t Nixon predicting their awakening 40 years ago? They’re slower out of bed than I am.
Yeah…. that’s a pretty good funny. No doubt there is a silent majority but it’s not the one FoxNoise adherents are wishing for.
Another Wisconsin Friday and Poof!…and another one Bites the Dust.
Regulators close Racine lender
Bank of Elmwood will become part of Tri City
By Paul Gores of the Journal Sentinel
Posted: Oct. 24, 2009
Related Coverage
Regulators close Racine lender
FDIC guards against crisis
Bank of Elmwood in Racine was closed by regulators Friday, the first bank failure in Wisconsin since the recession began.
All five branches of Bank of Elmwood will reopen Saturday as branches of Oak Creek-based Tri City National Bank, and all deposit accounts automatically will be switched to Tri City, regulators said.
The closing is among a nationwide cascade of bank failures that on Friday surpassed 100.
…In a statement Friday night, the Federal Deposit Insurance Corp. said Tri City’s acquisition of all the deposits was the least costly resolution for troubled Bank of Elmwood. Still, the cost to the FDIC insurance fund from the failure of Bank of Elmwood will be $101.1 million, the regulator said
http://tinyurl.com/ykj7dxs
FPSS, my previous post hasn’t come through yet, but is there any chance the gubmint will break up Citigroup (or just throw it to the ravenous pack of wolves like Lehman) rather than risk the political backlash of yet another bailout?
Too close to call.
$hitti is selling off its crown jewels one by one. How long can that last?
If I were to bet, I’d bet on bailout though.
Bailout? Man, that will cause a real backlash. I’m with you, it will be a bailout. Might not be a gov’t bailout but some trick of the Feds.
Roidy
It’s starting to look like another bailout in the not so distant future.
I mean why else would the government be so heavy handed with the executive’s compensation so late in the game? The obvious downside to reining in the compensation is that the talent leaves the company thus creating a worsening situation.
Unless of course the government is paving the way for another bailout by reining in the compensation so the tax payers won’t be so pissed off.
Talent?
Good Morning to all HBB Posters
Citi has deep financial ties to the Middle East. I think the oil kingdoms will have a final say in its fate and I doubt they will be in favor of losing their wealth by breaking it.
Can you believe this?
Citi, Bank of America Managers Averaged $18 Million Pay in 2008
By Bradley Keoun
Oct. 24 (Bloomberg) — Citigroup Inc. and Bank of America Corp. paid top executives an average of $18.2 million each last year as the banks accepted $90 billion of bailout funds, records from Treasury Department paymaster Kenneth Feinberg show.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aikhP_Hlb_0U
I don’t like his idea?
Bank Regulation Won’t End at Exec Pay
OK, HERE’S MY idea.
Tell me what you think.
We have these financial firms that got in really bad trouble. They took crazy risks and blew themselves up — you know, subprime lending, credit default swaps, that kind of thing — and nearly took the whole global economy down with them. And then there are these auto companies. They were so bad at making efficient cars and managing their businesses that when the recession hit, they were thrown into bankruptcy.
We had to bail them all out at the taxpayers’ expense to save the system overall. Taxpayers now own huge stakes in these firms — in some cases, the whole firm. And the worst of them will be on public life support for years to come.
The executives who made all the terrible decisions that led to this got incredibly rich in the process. Most of them have many millions salted away from bonuses and other compensation received before everything blew up. It hardly seems fair.
So what do we do about it?
http://www.smartmoney.com/Investing/Economy/Bank-Regulation-Won-t-End-at-Exec-Pay/?hpadref=1
Correct. Saud royalty have huge equity positions is (sh)Citi.
“Citi, Bank of America Managers Averaged $18 Million Pay in 2008″
Imagine how well those firms would have done if they had not lost mega billions of dollars in recent years?
I guess Citi might be allowed to fail now that Robert Rubin has gotten his millions from them and left.
The following are quotes from the Wikipedia entry for Robert Rubin.
“Robert Rubin received over $17,000,000 in compensation from Citigroup and a further $33,000,000 in stock options as of 2008.”
“In January 2009, Rubin was named by Marketwatch as one of the “10 most unethical people in business”.”
“In January 2009, Rubin was named by Marketwatch as one of the “10 most unethical people in business”.”
Top talent!
I’m sure Businessweek and the WSJ would have totally different opinions. Newsweek, too. Wasn’t it Newsweek that declared Alan Greenspan the “maestro” for his successive lowering of interest rates which spurred on the greatest stock and housing mania in history? Which has now become the biggest bust.
That’s because he is one of them. Part of the “club”.
They always print really nice stories about each other, until the ugly truth finally emerges………like Bernie Madoff.
He was a NASDAQ chief, for heaven’s sake, and beyond reproach. Now he’s in prison, but it took 20 years to figure out the scam he was playing.
“it took 20 years to figure out the scam he was playing.”
Yeah, but is was a coke bingegd, sex-fueled 20 years, so time went by sooooo fast!
Maybe Sh$ttbank would have been far better off hiring Jerry Ruben:
http://www.youtube.com/watch?v=OgeonR275aA
Old motto: “In God we Trust”
New motto: “I Got Mine”
“In January 2009, Rubin was named by Marketwatch as one of the “10 most unethical people in business”.”
That’s quite an achievement, given the competitive nature of the category.
10% default rate will do that to a company.
It broke late in yesterday’s bucket…but we rolled a natural to break the century mark!
106 banks this year! Woohoooo!
My 20+ borrowers still performing perfectly. Two words:
DOWN PAYMENT
You’re just jealous you can’t join this non-exclusive club.
ROTFLMAO
Two more words: Favorable selection.
By contrast, Subprime Sam’s FHA lending program, with its low downpayments and government guarantees, is rife with adverse selection for borrowers who are less likely to repay their loans, and lenders who are indifferent about whether the loans are repaid, as they come with a taxpayer guarantee of principle. Moral hazard also is a factor for both the borrower and the lender when taxpayers are involuntarily forced to serve as guarantors of the principle. Larger and riskier loans than would be financially prudent from a private lending standpoint are the natural consequence.
Has the FHA given any thought to the above? Underwriting guidelines are an inferior substitute for proper incentives.
The government guaranteed FHA loans serve the same purpose for lenders as government subsidized crop insurance serves for farmers. It provides a convenient way to send a stream of subsidy payments towards a constituency (lenders / farmers) who can provide a source of campaign contributions to the Congressmen who support the scheme. The fact that it is called “insurance” provides a convenient smoke screen for the taxpayer-provided kickback scheme. Happy farming, FHA lenders
To my mind, the downpayment serves two purposes. It reduces the lenders losses in the event of a borrower default. (usually by enabling the borrower to sell and make the lender whole) It also usually provides proof of a borrowers ability to live within their means. Of late, many lenders a seemed to substitute a good credit score for the second purpose. Unfortunatley, the credit score is a measure (imperfect, I know) of how well borrowers can live within their credit limit, not their income. And in an expanding credit environment, the two can be very different. So when the credit expansion stops, many of these people have NO experience with actually spending less than they make. Then the ice weasels come.
Or to put it more succintly, the borrower is in the first loss position.
It serves another purpose too — it prevents wild speculation in house prices (or any speculation at all). Prices are suddenly sticky on the way up.
First, gambling is no longer free fun. You have to pay-to-play. You have to hand over your hard-earned money, and so you think twice.
Secondly, that purchase price suddenly means something. When all your costs are rolled into a howmuchamonth payment, there is no difference between $200K or $300K. But if the bank wants 10%, suddenly there is an upper limit. If all you have is $20K cash, $200K is all you can afford — no buy-more-house games from the UHS.
Precisely.
Third purpose: By forcing the borrower to put more of his own skin in the game, a larger downpayment also increases the incentives for the borrower to keep making payments, as giving the home back to the bank is a matter of giving away your savings.
Really true only because people are irrational. You can’t change the past, so rational investment (or disienvestment) decisions revolve around estimates of the future. Except for tax considerations there’s no real reason to worry about what you paid for a stock or house when deciding to sell. What matters is today’s price, estimated future returns (either dividends or the value of the housing) and the estimated future price.
In a greater sense, even how much you owe only matters if you can discharge or default on those debts by abandoning the security through foreclosure.
I TOLD you, you just had to wait for the end of the fiscal year reports and meetings to finish up and the bank closings would recommence.
Hey, I work for the government. Don’t you guys trust me?
I know Polly. I should have believed you, if anyone. If it is any consolation (which it isn’t, I guess it is more of an insult), when Greenspan told me the path to wealth was to go buy the most expensive house I could find using a no-money down ARM I didn’t believe him either.
“I’m from the Government and I’m here to help?”
please stop Polly, I’m laughing so hard it hurts.
(but keep up the good work, I enjoy your posts)
And now we have Sheila “we cannot run out of money” Bair. Something tells me that quote will be with her for a long time.
I had heard many months ago that the FDIC was setting up a satellite office in South Florida. I can’t remember where I heard that. I was told it would be functional by September. And now look at last night. They closed 3 Florida banks. Something tells me that this satellite office will be very busy in the next few months. I can’t imagine that there is a single solvent bank in South Florida. The closings should come fast and often. Fridays will be busy in FLA.
Polly — in all seriousness, even though I have never met you, I trust you as much as I trust anyone who works for the government. It just comes across in your posts that you are trustworthy. They are lucky to have someone of your integrity working for them.
I second this comment. Thanks for posting your thoughts and perspectives from your unique vantagepoint.
Good to hear you are feeling better, Polly.
Here in Southside Jacksonville the condo market is on its knees. No more FHA loans (condo conversion converting back to apartments — new rules apply) and banks/credit unions aren’t lending in condo developments period.
Entry level SFH market (under 2300 SQFT) had a lot of activity over the last 5 months due to the tax credit, tax credit fraud, condo walkaways, easy money, and what not. It was a free for all. It’s over.
The middle market (McMansions 2500 - 3500 SQFT 4-6 bdrms) is reeling. Home debtors typically paid high 300s to mid 400s and they aren’t selling period. Many of the listings are short sales (FB/debtor stopped making payments and living rent free or moved away) in the mid 200s to low 300s. Many of them are empty or sparsely furnished.
How come nobody has ever wrote a song about the southside of Jacksonville?
——————————–
Southside Jacksonville
You must not be from around here.
Can anyone tell me who Brooksley Born is? Anyone? Anyone?
Seems like the toxic derivatives coverup began at least as far back as 1999, led by Greenspan and Summers and Rubin. Kinda makes this a truly bipartisan effort.
http://www.pbs.org/wgbh/pages/frontline/warning/view/
“I walk into Brooksley’s office one day; the blood has drained from her face,” says Michael Greenberger, a former top official at the CFTC who worked closely with Born. “She’s hanging up the telephone; she says to me: ‘That was [former Assistant Treasury Secretary] Larry Summers. He says, “You’re going to cause the worst financial crisis since the end of World War II.”… [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.’”
Worst financial crisis. They knew it as far back as 1999.
Got pitchforks?
Bill
“No one could have seen this coming.”
When people say that enough times they believe it.
It is almost always the case that SOME people saw it comming, they just aren’t the ones that you listened to. It is difficult when you are presented with wild enthusiasium on the one hand and pessimism and fear on the other. The trick is to be prepared for good or bad outcomes. Don’t bet everything on either one, even if it WOULD be really nice if you bet everything on 32 and that number came up.
Isn’t this the meat of the whole matter? People only see what they want to see, truth be damned. How many here saw it coming? And really all we did was look, and trust our own eyes.
I tease my kids incessantly (now 7 & 9). They know I tell bold faced lies to them. Consequently, they’ve come to trust what they see, rather than what they are told.
Someone who tried to get her small agency to regulate derivatives. Instead of a substantive issue, it was interpreted as a turf battle, one that she lost.
The only issue in government — who is in charge. Half of them don’t even care about the substantive issues.
You have it backwards.
They’re trying to prevent Brooksley Born from enforcing regulations of the Over The Counter Derivatives market; she was trying to prevent today’s mess. Threats are what Lawrence Summers is all about. All of the players in that video worship at the same franchise; no bipartisan effort.
BTW, 1999 was the year that banking regulations were changed to enable banks to participate in speculative investing.
At one time there were, according to Frontline, $500 TRILLION in derivatives outstanding.
Pretty amazing isn’t it?
For the banking industry 1999 was the year the planets lined up. The enabler was the big-iron relational database such as Oracle manage the various tranches.
Of course they knew it back then. Thats when Philbert Gramm sponsored and passed the Gramm, Leach, Bliley Act. And yes, ALL of them had that little “r” thingie after their names.
What letter did the president who signed it have after his?
It is both parties Ex, someday that will sink in for you.
No it won’t. Exeter will remain blissfully, ignorantly partisan to the very end.
If you’ve been paying attention, I’ve persistently stated the last 30 years of the supply side lie is the cause, irrespective of affiliation.
Exeter, you are the most partisan poster on any blog that I’ve ever seen. You make Rush Limbaugh look open minded. You are so in love with the Democrats it is scary. I don’t think you will admit that Robert Rubin, Larry Summers, Bill Clinton, Nancy Pelosi, Chris Dodd, Charles Schumer, Barney Frank and Obama are Democrats.
This whole mess stinks. Both parties stink. Your partisanship stinks. I love your posts on upstate New York but I can’t stand any thought you have on politics. Your blindness is what’s wrong with this country.
Newp. I merely despise the lying GOP and everything they represent. They co-opted everything you can think of… economics, religion, middle class culture then redefined it which ultimately destroyed it. Being a current event junkie and reading voraciously news publications since I was 6, I watched them grab power through appealing to the lowest common denominator beginning in 1979. Their ever expanding power grab advanced their cause, year after year until they finally began to implode in 2006 as their hypocrisy became increasingly self evident. I refuse to apologize for the democraps and point out the failure and hypocrisy of the “conservative cause/republican revolution” at every opportunity.
That is the least partisan post you’ve ever done. My personal belief is that the Repubs sacrificed themselves on the born again altar. Too bad they also sacrificed us. Look at all of the things the Democraps co-opted such as the women’s movement, the civil rights movement, gay rights, affordable housing etc. Clearly the “leaders” don’t believe in any of that.
They all stink with a capital A-L-L. We wouldn’t be in this mess if they didn’t. The Dems preach idealism and practice graft at every turn. The Repubs are just as repugnant and phony. Excuse me while I take another shot.
The born-agains weren’t supply-siders, at least not at first. They just gave the supply-siders enough votes to wreck the economy.
And I also don’t get your point that the dem leaders don’t really believe in women’s/gay/civil rights. Can you give an example? Something along the lines of the bible-thumping anti gay rights repubs who keep getting caught cruising the men’s rooms.
Please name me one member of the Democratic leadership that puts anything above money and power. Let me see. There is Obama, Dodd, Schumer, Pelosi, Frank, Boxer, Feinstein, Reed, the Clintons, etc. I’m still looking. Let me check under the rug. Nope, none there. All of these political creatures pay lip service to gay rights, civil rights, women’s rights, etc. I’m sure that all of them live in highly diverse neighborhoods to show their support of civil rights and the down and out. Let me pause while I role my eyes or maybe Chappaqua is really located in “the ‘hood”. They are all about money and power and nothing else. Oh wait, let me not forget they are the anti-war party. Bwahahaha. Yeah, my post was just so far out there.
The born agains were dupes for the supply side fascists. The right used the bible-thumpers the way the left uses their entitlement pawns. It’s the same tactic, just different sides. Neither group of “leaders” has any intention of representing “their base”.
Well, you don’t get in a leadership position if you’re not into power. And I agree both parties have their hands dirty. But civil/women’s/gay rights were pretty much achieved. Blacks, women, and gays (except for marriage) all have equal rights, occupy positions of power,etc. But the born-agains got nothing. No prayer in school, no abolition of abortion, no abolition of gay rights. They were played for fools- I think that’s a key difference. Sure makes it look like the dems actually believed in the movements they purported to represent. The repubs, not so much.
One of the reasons I like Barack Obama far more than John McCain and both of the George Bushes is that he was at least honest enough to say that he’s going to rob from the productive and give to the lazy (Spread the wealth around).
George H. Bush said “read my lips, no new taxes.” His son at least encouraged tax cuts but with massive spending increases.
I would never ever vote for a redistributor of wealth, whether an admitted one or not, I’m just saying the Democrats have been more honest than several decades of Republicans.
NYCB….considering you took the words out my mouth, we agree far more than we disagree. But generally speaking, the public is suffering PTSD from 30 years of creeping conservatism.
the public is suffering PTSD from 30 years of creeping conservatism.
Or is it conservative creeps?
30 years Bible thumping agenda and failed attempts to control a woman’s body. The epitome is Sherrif Joe Arpaio. Every social conservative’s hero.
“I refuse to apologize for the democraps and point out the failure and hypocrisy of the “conservative cause/republican revolution” at every opportunity.”
Cheney-Shrub: “We want him to succeed as president, we really do.”
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
“But the born-agains got nothing. No prayer in school, no abolition of abortion, no abolition of gay rights. They were played for fools- I think that’s a key difference. Sure makes it look like the dems actually believed in the movements they purported to represent. The repubs, not so much.”
BINGO!
The fiscal self-servatives were delivered nearly every single wish on their list by the conservative “revolution”. The religious wrong got???? Nothing.
And guess what? The outcome was no mistake. All I can say is that I’m glad it’s over.
‘Course my favorite regulator to cast in the role of Cassandra is Armando Falcoln. http://www.washingtonpost.com/wp-dyn/articles/A30436-2004Dec27.html
I told you they knew.
“You’re going to cause the worst financial crisis since the end of World War II.”
This is where top economists are able to utterly mischaracterize the history that led up to the precarious economic situation back in 1999 and get away with it. Since they are top economists, whatever they say tends to be instantly accepted by the MSM without scrutiny.
The situation reminds me of some homes built at the edge of a landslide on Mt Soledad that has been active for eons of geologic time. A couple of years ago, when major ground subsidence wrecked some of them the blame was placed on a water main break. A San Diego geologist made a strong argument that the cause was the old landslide, not a new water main break.
Think of Born as representing the economic equivalent of a water main break, and years of economic policymaking under the likes of Greenspan, Rubin, Summers, Geithner etc as generating the tectonic pressure buildup which produces landslides and even major earthquakes, and you will get the point of my analogy. Summers’ comment was nothing other than an attempt to shift blame away from the deeply rooted cause to a convenient scapegoat.
It was common knowledge that this area was unstable, especially after a huge landslide in the early 1960s… From what I read, the City didn’t want to allow housing permits in this area and the landowners threatened lawsuits. They reap what they sow.
Murder, real estate, Halloween…scary:
“…Gomez and Salinas killed Ravida so Salinas could get money for a real estate investment, Paradise successfully argued. Gomez stood to inherit Ravida’s estate which was valued at more than $900,000.
Ravida, a Vietnam veteran, suffered from paranoia and schizophrenia. He bred and raised exotic birds on his Mira Loma property.
Ravida was killed Halloween eve, 2005, when Gomez drove him on errands. Salinas and another man wore Halloween masks as they approached the minivan and threatened Ravida and Gomez with a gun before shooting him in the head and her in the arm.
In reality, the carjacking was a ruse hatched by the couple to get $100,000 for Salinas to invest it in New Mexico real estate.”
http://www.pe.com/localnews/inland/stories/PE_News_Local_W_wsentence24.471a9d9.html
Sheesh Hwy….That is a sad story of money and murder.
Sorry Mikey…worse too…I’ve not even had my 1st cup of joe!
I’ve heard many a tale, but that one truly takes the cake. Nauseating.
Asset-price bubble risk returns amid loose policy
By Laura Mandaro. SANTA BARBARA, Calif. (MarketWatch) — The trillions of dollars in extra cash pumped into the global economy to ease the credit crisis could threaten a new asset-price bubble, finance officials say, but it’s not yet time to sound the alarm bells…
The steep rebound in stock markets and currencies of emerging markets, particularly those that export commodities used by industrial China, has raised fears some of the same drivers of the most recent crisis are again developing…
Many economists say a prolonged period of low interest rates in the U.S., combined with huge savings in China and elsewhere, helped create a sea of liquidity that led to an unsustainable run-up in real-estate prices and ultra-low yields on credit.
Andrew Sheng, chief adviser to the China Banking Regulatory Commission, said Asia is again seeing increased carry trade and capital flows. …the Shanghai Composite Index has gained 59% since the start of the year… Real estate prices in Asia have also surged. Regulators have started to curb what they see as speculative practices. Earlier this month, the Korean government asked non-bank lenders to raise debt-to-income ratios on mortgages in Seoul.
——————–
I think I undestand. If you give liquidity to a bank, it can do three things: the bank can pay some outstanding bills right now and the money disappears (bad), the bank can lend it out to good customers and make back honest interest to pay its bills (very good), or the bank can use the money to go back to the 2005 mentality of bubbling and speculating to collect fees and bonuses (very bad). Banks used TARP 1 to pay bills, the gov said no no, you have to lend it out. Then banks tried to speculate and the gov got really mad. But it appears Asia is going directly for the 2005 bubble and speculate.
Here’s the link. The article includes a little news that Brazil is doing the same thing as Asia:
http://www.marketwatch.com/story/asset-price-bubble-risk-returns-amid-loose-policy-2009-10-20?link=kiosk
Sorry, a bit bogus. To get an asset bubble you need changing psychology. Not happening for real estate. It’s there in equities, I do agree.
The other thing that is there in equities is banksters with TARP- and Fed-funded gambling chips to lay on the casino table. The question is whether Megabank, Inc is using some of its gambling chips to invest in residential RE, isn’t it?
“If you give liquidity to a bank, it can do three things:…”
There is at least a fourth option: Stuff the dough under the proverbial mattress and wait for asset prices to bottom out before going on a fire sale shopping spree…
Fifth option: use the money to invest in a Senator. Christopher “$15K for everybody!” Dodd comes to mind.
This is fun!
Senator’s motto:
If you stimulate the FIRE sector, the campaign contributions will flow.
“Fifth option: use the money to invest in a Senator.”
There are five Wall St/banking lobbyists for every senator and congresscritter according to Frontline.
Also stuff it under a matress so that it will be available to cover the losses that it will have to recognize once the accounting rules go back to refelcting reality, not fantasy.
What does say about the “Medical Industry” …when the town can’t keep a Wal-Fart open…but they can build a “Medical Plaza”
Hemet planners OK medical plaza, hospital: 10/23/2009
A proposal to build a medical plaza and 49-bed hospital at the vacant Walmart on Florida Avenue has cleared a key hurdle.
Hemet planning commissioners Tuesday approved a conditional use permit for the $60 million project, which calls for a two-story, 145,582-square-foot medical mall and a two-story, 87,695-square-foot hospital with 49 beds.
http://www.pe.com/localnews/hemet/vitindex.html
Maybe excess supply and decreasing demand for cheap chinese junk, but increasing demand for medical services, and the market responds accordingly?
I thought that closing Wal-Marts was a good thing! Now you tell me that Wal-Marts are better than hospitals?
Now, the evil insurance industry only pockets obscene profits. I can’t imagine that they would never actually build new facilities to deliver services.
Naw, Wal-Fart is still a commie Chinese enabler…more of a comment about how Hemet, CA…is “gaining” an image as amongst such places as Bakersfried & Fontucky.
Repeating a story I tried to post about an hour ago. Sorry if it appears twice.
Client owes me about $80K on a small 3BR, well fixed up, big lot, about 1/4 mile from my rented apartment. Wants to buy another fixer-upper about the same size but w/ large outbuilding and 1000 feet of bay shore. Asking price on the shorefront property is $399K. Client told me he would be offering $310K contingent upon sale of the smaller house (which might actually sell because it IS small). Instead, client offered $310K w/ no contingency, and asked me to put my offer of an 80% mortgage loan (at 8% interest) in writing for the seller. I wanted to know what happened to the contingency, he said that would’ve made the offer look feeble. I said “Oh well, if you can come up with the $62K down, I guess I don’t care.” What I put in writing was an offer to lend up to 80% of the purchase price on the shorefront property, but with a term of only 20 years; said I would be willing to convert it to a 30-year mortgage if/when the smaller house is sold and note retired.
My problem here is, although I wouldn’t mind getting stuck w/ one of these houses, I certainly don’t want both. Hence a desire on my part for them to sell the small one quickly, even though they are paying me 10% per annum on the smaller note. Life on the Edge ?
Hi Az. Hope you are well. You’ve been doing this lending successfully for a long time. Going from what you are posting, you smelled trouble with this new deal, and acted accordingly. If you sense that you shouldn’t have done it, it’s probably not too late to change your mind and refuse the new loan, correct?
“My problem here is, although I wouldn’t mind getting stuck w/ one of these houses, I certainly don’t want both.”
Look on the bright side: At least you are in the lending business.
Many American households currently have the problem of being stuck w/ two houses. My sister’s household offers a case in point: They bought a new place at the end of 2006, with the intention of selling the old place and moving by the summer of 2007.
Now it is fall 2009, they only moved to the new place this past July, and they almost are ready to try selling the old place. Unfortunately, a worsening foreclosure crisis stands in their way.
Here is a comment to the article I linked above. The main point is a familiar one: “Now is the time to buy.” Do ya think she might be a UHS?
“I agree that foreclosures will always be part of real estate but the recent climate has brought on more than expected. I read an interesting post about why now, if you are economically stable, is the best time to buy. I thought it was interesting because with all of the foreclosures we do tend to focus on the negative side of the market.”
Professor Bear’s home purchase advice:
IGNORE STOPPED CLOCK UHS ADVICE LIKE “NOW IS THE BEST TIME TO BUY.”
DON’T BUY UNTIL YOU CAN GET WHAT YOU WANT AT WELL BELOW $100/sq ft!!!
OK az personal question time……20 yr 30 yr what happens if you are no longer with us before the loan is paid off?
Seems like you are stretching for yield…
Just wanted to say thanks to all you HHB bloggers for steering me in the right direction the last 4 years. I don’t post much but for quite a while I was a daily reader. I live in Utah and have been laughed at and made fun of on local blogs because I refused to buy during the bubble and it was nice to come here and read what like minded individuals had to say. Well I waited out most of the bubble and am closing on my first house next week. I still think Salt Lake has further to fall but I found a deal on a REO that was just too good to pass up. It is a 3 year old mcmansion on .21 acres in a good neighborhood that is close to work. It needs some carpet cleaning and some touch up paint but is otherwise in great condition. We’re paying $50.78 a sq/ft for the place, putting 20% down and will be paying 17% of our monthly income to PITI (28 % on my salary alone).
Thanks again everyone!
Just pay the damned thing off as fast as you can.
I don’t know that many people grasp the point of your comment, but generally speaking, one should run away from mortgage debt as quickly as possible, especially during a credit crunch when an incipient dollar rally is likely to make those future interest payments to the bank “more valuable than expected.”
The best thing to do (especially if you are in for much lower than 28 pct of your monthly household income) would be to start off with a shorter-term loan (10 years or 15 years, say) at a lower interest rate. Let the debtbeats pay away their life savings to Megabank, Inc; there is no reason for you to keep the banksters’ children in shoes.
We would have done a shorter term loan but want the lower payments for when we have kids and the wife stops working. I can pay the thing off as fast as I want but if I lock into a shorter term loan I can’t lower the payment without refinancing.
Shorter term loans normally come with a lower interest rate. I am not sure how the situation looks at the moment, given the topsy-turvy state of the Fed-manipulated interest rate environment we are in right now.
Make the wife work extra and pay the damned thing of.
I sound like a broken record.
I would take the longer loan/lower payment. A you said you can pay off early. Besides children, illness can cut into income. It never hurts to be conservative about what you can pay.
Right. I had a 15-year, but paid it off in ten.
Here’s what to do. Expecting the wife to stay home? Then bank her salary, net of taxes, living off one income. That means two things:
1) The standard of living doesn’t drop when she stays home.
2) There will be a load of cash that can be invested or used to pay off the loan early, depending on what offers the higher rate of return. In my case, it was better to pay off the 7.0% loan.
Wolfgirl,
Do you work in banking PR? Perhaps they could find a position for you
The longer you take to pay off a loan, the more the banksters get to rape your future earnings.
Comparative illustration:
$600,000 loan
5% interest rate
30-year monthly payment* = $3,220.93
Total interest payment = 12*30*$3,220.93 - $600,000 =
$560,000 (NEARLY MORE THAN THE PURCHASE PRICE OF THE HOME!!!)
15-year monthly payment = $4,744.76
Total interest payment = 12*15*$4,744.76-$600,000 =
$254,000 (less than 1/2 the 30-year loan interest payments, due to the magic of compound interest), PLUS YOU GET THE DEBT ALBATROSS OFF YOUR NECK IN 1/2 THE TIME!
Don’t like the high 15-year monthly? Buy a cheaper house:
3,220.93/4,744.66*600,000 = $407,303.45.
$407,303.45 loan
5% interest rate
15-year monthly payment* = $3,220.93
Total interest payment = 12*15*$3,220.93 - $407,303.45 =
$172,463.95.
Moral of the story:
Don’t let the scheming, scamming Megabanksters and the hacks in DC who support their schemes bilk you out of your life savings by tricking you into buying a house you really cannot afford. Live within your means, and live happy
Besides, if you pay off your mortgage in 15 years or less, you will have time to save up for your retirement. Don’t count on someone else to do the job for you.
*If you have MS Office, open up MS Excel and enter
=pmt(0.05/12,12*30,-600000)
“30-year monthly payment* = $3,220.93″
I couldn’t sleep at night. Really!
I don’t know that many people grasp the point of your comment, but generally speaking, one should run away from mortgage debt as quickly as possible
What are you smoking, Professor? If I pay off the mortgage then I lose that wonderful tax deduction. (Glug, glug) You must have damaged your (glug, glug) brain to think such silly (slosh) thoughts. I think don’t you not understand finance high too goodly. Good is debt (falls down from keyboard).
NYCB,
Did you and Eddietard study finance at the same university
Prof, we did not. But clearly you failed Recognizing Sarcasm 101.
Maybe I failed Recognizing Sarcasm 101. I need another Monster to get me going. I just keep telling myself, “debt is good. Debt is good.”
“Maybe I failed Recognizing Sarcasm 101.”
Three winks mean you recognized it.
Make sure that you post on the local blogs, too. Come to think, the cheerleader blogs that used to make fun of you probably no longer exist!
Ha ha!
“McMansion” sounds like 3000 sq ft. $153,000 sounds like a reasonable price. Everything sounds good to me.
Congratulations, Jared.
I’m living for the day that Neil buys a house in L.A. for a similar price and stops eating popcorn.
I have some long distance family members that were trying to buy “investment” houses in Atlanta and Utah in 2006 or 2007. Today they are unemployed and posting on FaceBook about having nervous breakdowns.
The turtle wins the race and the road is littered with dead rabbits.
Today they are unemployed and posting on FaceBook about having nervous breakdowns.
While I can’t claim to have been totally mentally healthy while unemployed (hah, can’t even claim that now!), but I certainly can’t understate the benefit of having low fixed costs and a bunch of savings while unemployed.
Most people don’t *get* it until it’s too late and they’re already suffering. I was just explaining this to my (now ex-) girlfriend last weekend…we talked finances, and I was trying to point out the benefits of having some cash on hand at home, >= 6 months living expenses in cash in the bank, a few weeks food, etc. It’s funny how she ‘got’ it, but she still had all her money tied up in her employer’s (Microsoft) stock and very little cash.
Hopefully I got through to her…even if she is stupid enough to kick me (me, of all people!) to the curb
Four years ago, at the time of this blog’s inception, my wife’s three Utah-resident sisters all lived in owner-occupied housing, and my wife was the oddball renter. As of this post, only one of the four sisters are members of the Ownership Society, the youngest, who was lured to hurry up and buy this fall before the $8K first-time buyer credit expired.
It should be obvious to all by now that the announced expiration date merely served to provide a reason for a Grand Kabuki dance as the warmup act to announcing the program’s extension.
I really don’t see how bad it could get paying 50/sq/ft. Eventually they will have to build houses again, and, when they do, the cost to build is >50/sq/ft. That doesn’t mean you won’t lose short term, but, in the long term, I like your decision.
I’m looking for 100/sq/ft down here in FL (where I live; there are places that are that price, but they are generally out in dying communities, or areas that have no reason what-so-ever to live there). I’d be thrilled with 50/sq/ft!
That was my thinking too, short term I might lose but long term no way. One thing to keep in mind is they count unfinished basements in the $/sq ft calculations. My finished area is costing me $76 a sq ft but I get an additional 1400 sq ft of shop/storage/future media room space.
BTW, congrats — sounds like you did very well with respect to affordability and falling knife avoidance. I look forward to vicariously enjoying many similar HBB home purchase success stories over the next decade or so.
I still wish you could figure out a way to stiff the bank on the interest payments, though. Perhaps you will figure out how to make a million bucks, and pay off the loan within a couple of years of its inception.
I’ve already figured out how to stiff them interest. All I have to do it pay an extra $1000 a month for the first year and I just stiffed them $35,000 in interest. I can easily do that for at least the first year and the longer I keep it up the less they get. If I do it for the life of the loan and they’re out $130k.
You are not stiffing the bank. You are making a prepayment of principal. You only pay interest for the money while you are using it.
Nice to see one person understands basic financial principles.
I give Eddie points for hanging in there. I thought he would have gone away after being renamed “Eddietard” a couple of days ago.
“Eddietard”
In his twisted world, he is probably honored to have earned himself that title.
I’d be hurt if any of you could make a cogent argument as a rebutal to me. 3rd grade name calling….meh.
Now please return to grand tales of evil banksters stealing money from the poor children.
Please show us that math example again from yesterday so we can revisit the reasons why we knicknamed you Eddietard.
Unless it’s in Detroit.
We bought for about $90/sq ft at the trough of the last bust in Cali. Boy does that seem a distant memory at this point!
What city? I’m still seeing astronomical asking prices along the Wasatch. Was this property on the MLS or was it part of the shadow inventory?
It was on the MLS, It’s under contract right now. I’d give the MLS # but I like my privacy.
OK, I actually asked just to see if they had used conventional methods because my brother is also looking. Most of the best deals down here in LA aren’t on the MLS, I guess so the banks save that fee?
Are you looking at list prices or sale prices? I am still seeing astronomical list prices here in Rancho Bernardo 92127 (e.g. median MLS list price stuck near $1.2m) , and median sale prices to the tune of $500,000 lower…
$50/sq is a decent number.
$50/sq is a decent number.
Not in Detroit. I don’t think we can use square footage numbers. It all comes back to “location, location, location”. I do hope Jared well. It sounds like he will be okay.
I spoke to the buddy yesterday that I begged not to buy in August 2007. He did make sure to tell me he could never be a renter like me. I forgot to tell him that I could never sleep if I knew my house was worth $100,000 less than I paid for it, like him. He’s a good guy but even good guys are blind sometimes.
NYCB….. I was speaking relative to what it costs to build. Naturally, I wouldn’t build in Detroit.
I can imagine that “New York” conversation:
NYCB: Hey Buddy, how ya doin’?
Buddy: Pretty good, NYCB.
NYCB: So your house is worth $100,000 less now? I’m really sorry about that.
Buddy: So you’re still renting? I’m really sorry about that.
NYCB: You’re a good guy, Buddy.
Buddy: So are you, NYCB.
NYC: I’ll call you next year when your house is worth $200,000 than it is now.
Buddy: OK. Too bad you’ll still be renting. Bye.
That’s not realistic, because there’s no dreadful swear words coming out of NYCityboy. Also, where’s the kick in the n*ts?
NYCItyboy: (bending over the writhing body of nu*t-kicked pal)
&**%$!! Hahahaahah! I told you so, ya @#&$* REtard!
(lifts bottle of Jack Daniels to lips, gulps in a thoughtful fashion.)
Did that feel better than losing 100 thousand @&^$# dollars? Huh? Huh?
Prone FB Pal: (feeble whimper)
I love Oly-gal. The tears are running down my face.
I swear Oly was a writer for Max Headroom
Jared, do you mind telling us the neighborhood or area in which you bought? I track the Wasatch Front pretty closely, and at this stage, buying anything but deeply discounted REO property is not a wise move. Sounds like you did well, good luck with things.
And yes, pay the blasted thing off as quickly as possible. Nothing like removing the PI from PITI!
When there is an oversupply of 10 million houses, the price is falling like a stone, jobs and income are vaporizing and gov’t is throwing trillions of $ at keeping prices up, you didn’t wait out the bubble.
Debt is slavery, even if it’s bought at a discount. Hope your term is short and sweet.
“Debt is slavery, even if it’s bought at a discount. Hope your term is short and sweet.”
It seems to me we’re the only people who understand this. A $250k shack is really a $450k shack when debt services costs are considered. Forget property taxes and maintenance. I explain it to fools preparing themselves for the indentured slavitude of house-debtorship but their eyes glaze over. This reaction appears to be the end result of cult-like programming by the REIC and their MSM hatchetmen.
Haven’t you ever heard of “good debt”, Exeter? Sheesh! I hear about it all the time, usually from people loaded with debt.
Blue Skye, I fully expect the prices to keep dropping here for at least two more years and I hear you on debt but there everyone needs a place to live. For us the house is a major upgrade from the rental we are now in and the PITI is the same as rent. If we rented a home like we’re buying we would be paying several hundred more than what we’re paying to the bank so for us it’s a matter of not a matter of finding the absolute bottom it’s a matter of balancing our quality of life with a good deal. Even if we got the land for free the cost to build the house we’re buying would still be 15-30k more than what we’re paying so I don’t think we’re making out too bad. The other thing to consider is the fact that while Utah does have a lot more economic pain than the experts will admit too we aren’t going to get hit as bad as other states this time. There will be a bottom at some point and I feel like we’re buying close enough to it to be comfortable with my decision.
“this time”
I think you are viewing this little speed bump in the perspective of your life’s experience. You percieve that the worst is past and this recent difficulty was not just the first step on a flight of stairs.
I actually disagree with FPSS on this one. Pay as little as you can and put some $ in the pillow case. If your bet is correct, you will be rolling in the clover. If it is way wrong, you will have some walking money. Peace of mind either way.
On the building costs, if your house is standard construction I must disagree with you. Especially with regard to what the replacement costs are now and what they will be a few more years into the collapse.
Hey, it matters if you are rolling in the benjamins or are a deadbeat.
Clearly, the strategies are different for different people. I have no problems with the deadbeats. It’s just that their path is different from mine.
Different from mine too, but maybe we’re all deadbeats now.
I’m just going to opine here that since Jared isn’t willing to state where this house is then it probably is either far south of Provo or on the west side of Utah lake, alternately far north past Ogden. $50/sq. is not a good deal in those areas.
My thoughts exactly. Or you could add Harriman to that list also, no?
Now 50$/sq ft in Sugarhouse, & I’m all ears…
I’ve been in Portland for the last two days. It’s very nice here. We took a tour to Astoria and the Lewis & Clark fort yesterday. One of the locals told me that they have some condos for $90,000 on sale that were $215,000 when they were built a few years ago. No, thank you. But apparently riverfront houses are still exorbitant.
Currently, they are exorbitant. Soon, they will be derelict.
What makes you think the banksters’ price fixing scheme* won’t suffice to keep housing prices unaffordable forever? They have certainly done a great job so far, despite an apparent dearth of demand for Pacific state housing priced north of $500K.
*I confess this is a conjecture; there is a smoking gun, but so far, no suspect has been apprehended in the case.
“What makes you think the banksters ‘price fixing scheme’ won’t suffice to keep housing prices affordable forever”
As for me all I have to do is study the mortgage reset chart.
affordable = unaffordable
unaffordable = soon-to-be delinquent
soon-to-be-delinquent = eventually-will-be-dumped-on-the-market
Not until they stop the banks from marking to fantasy on the valuations of these properties.
If I’m a cash starved banker with derelict property do I prefer to pay 10K/annum while stating a value of 500K on the balance sheet or write off 200K by selling?
eventually-will-be-dumped-on-the-market = time2buy
I’ve been in Portland for the last two days. It’s very nice here. We took a tour to Astoria and the Lewis & Clark fort yesterday.
Portland is a great city! I love Portland. Have you gone to the Japanese gardens? The Rose test gardens—I guess the roses’d be pretty much over now.
Ahhhh….Porrrrrrtlannnnnnd….
“What makes you think the banksters’ price fixing scheme* won’t suffice to keep housing prices unaffordable forever?”
Perhaps we should start to measure American house prices against gold. The Fed, and the finance mafia, may be able to keep house prices stable in terms of ever devaluing dollars. But can they do that and keep the prices stable against gold? I’m guessing, “no”.
‘I’m guessing, “no”.’
Paging Mr Aladinsane…
You know, I’m disappointed. We’re already 30 comments in and still no sign of a fun thread discussing coffee, cars, or GPS systems.
I guess we’re serious only on Saturdays?
My pot of coffee is almost gone. Now time to head off to the soccer pitch for an 8.30a game…
OK, I’ll go.
Coffee followed by farmers’ market followed by public library followed by hitting my favorite dried pasta store.
There’s a nice little Saturday for you.
I don’t need GPS. I already know the places.
Our coffee pot is drained. Saw a K-Mart ad for a $69 GPS with “spoken street names” in the weekend newspaper inserts. I paid $99 for our Mio Moov early this year.
For easy transfer I glued a small square of Velcro on the dash of each of our cars and a mating strip on the back of the Moov. The GPS hangs down and rests against the dash so it’s not blocking vision out the windshield. It was pretty easy to find a place on each car’s dash where the GPS wouldn’t block a control or display yet still be within view.
Oh good, got a call to play tennis this PM. That means I can put off until another day figuring out why the pontoon boat outboard motor’s trim control has stopped working. I guess a 12 year old boat is gonna start having those kinds of problems.
Last cup of coffee and headed for the shower.
Bye.
No joshua trees, frogs, gold bars, PPT, or trolls either.
Aah, the good ol’ days … SIGH
What about those St. Joesph fellas buried in the sand… geez bink, there must be what… 10,000 in Vegas alone?
Why don’t they put coffee makers in cars? That would be a great option.
It would only work in cars with dark brown interiors, I would think.
Why don’t they put coffee makers in cars? That would be a great option.
Better yet, why don’t they have intravenous packs you can hook up to a small espresso machine and get a nice steady stream of joe pumped right into your veins all day long, the pumping action to be fueled by your action? Like a stillsuit! (Like in ‘Dune’, for you non-sci-fi fans)
And then have a hat that delivers whipped cream. A cute hat, not a stupid hat, obviously.
That’s a great idea, Oly; we can call it a can’t-sit-still-suit.
The only design change we need to make is the “pumped right into your veins” part. I want to savor every last sip. So it needs to come out the of the sip-tube that was already part of the still-suit concept.
Finished my coffee with some new friends at my hotel. Time to fly back to Sacramento. When I get home I’ll get back to my hobby!
I can hear my little espresso machine hissing out a stream of Bolivian Fair trade medium roast. I shall soon sip it leisurely and perhaps suckle on the sweet teat of the the whipped cream can as a reward for being so good and industrious and virtuous lately.
Actually, I haven’t been very good and industrious and virtuous lately, but who’s keeping track? Not me. I just want to squirt a can of whipped cream into my head with joy, and so I will, dam*mit!
…You know, it’s great to be an adult, (at least a nominal adult) sometimes.
I am enjoying my 3 rd cup of Green tea with skim milk, Fennel and Cardamom seeds. It is loaded with antioxidants.
0g Fat
8g Protein
5mg Cholesterol
Live is good and it is a wonderful world.
“Actually, I haven’t been very good and industrious and virtuous lately, but who’s keeping track? ”
The Great Pumpkin is keeping track of you and he drinks beer and plays cards with Santa wild child !
The Great Pumpkin is keeping track of you and he drinks beer and plays cards with Santa wild child !
Dangit! I think you might be right.
That means no flame-thrower for Christmas for good little girls this year. Alas, I might not even get a DollarStore lighter, at this rate. Someone should have warned me earlier.
“The Great Pumpkin is keeping track of you and he drinks beer and plays cards with Santa wild child!”
Oh goody, a new Tim Burton movie!
This time of day my anticipation will be about what 2 buck chuck bottle will I open tonight? Merlot.
I had a good Saturday. My half-mile sprint day is Saturday. This morning I swam it well under my mini-triathlon time in 1991 when I was 32 (How’s that, Mikey?).
Then I got my cable TV and internet back. It turned out as I thought, a problem on Time Warner side. Some flunkee tech disconnected my cable from the box a couple of weeks ago and did not reconnect it.
The third nice thing to happen is the management at the apartment complex where I rent here in LA backed down further on raising my lease. It’s going to be the same rent, which is $300 less per month than back in May of this year. They were going to raise it by $150. I have the lease papers right here on my Laz-y-boy sofa.
Life is good as a renter! I’m looking down my nose at RE cheerleaders! Also in finding lots of ways to cut costs on food and beverages. Brown bag lunches and such!
I was told I’m starting on a new project next week. I heard it will be a year long, but my realistic tendencies say 4 months. I tend to be too negative, so a seven month lease here in LA is fine for me. I’m signing!
This morning I swam it well under my mini-triathlon time in 1991 when I was 32 (How’s that, Mikey?)
Wow…if you mean mikey with a little M, I think that’s really great.
You know me Bill, I think you’re JP Morgan, The Great Carmak of Investing and Superman all rolled into one.
Just teasing Bill, sounds like you are doing great both physically and financially. You just need a good wommin and some booze to enjoy the trauma and drama of real LIFE Bill.
New York Times: new condos with glass exteriors have HVAC issues and leaks.
http://www.nytimes.com/2009/10/25/realestate/25cov.html
Frankly, I just don’t get “cool” architecture. We’ve gone and added a whole bunch of buildings that will never be LEED certified, that’s for sure. And frankly, I don’t think they look that good.
Don’t buy buildings built in booms, when the construction and building materials industries are stretched.
Do a Google search on 165 Charles Street. These are the famous condos bought by such stars as Natalie Portman and Martha Stewart. I think they were also trying to ditch them as fast as they can after completion. These glass abominations facing the West Side Highway are a crime against humanity.
Does this article remind others of whistling past the graveyard?
Leaders
Currencies
The diminishing dollar
Oct 22nd 2009
From The Economist print edition
Why it’s unlikely to turn into a dangerous collapse
ONE of the few calamities that has not befallen the world economy during the past two years is a dollar crash. During the bubble era that preceded it, many (including The Economist) fretted that foreigners, tiring of America’s gaping external deficits, would send the greenback slumping and interest rates soaring. In fact, the opposite occurred. The crisis began within America, and the deeper it became, the more the dollar strengthened as fearful investors sought safety in Treasury bills. Between September 2008 (when Lehman Brothers failed) and March 2009 (when America’s stockmarkets hit bottom), the dollar rose by almost 13% on a trade-weighted basis.
…
From the comment on the article:
Sylvain Allard wrote:
Fri, 2009-10-23 10:48
Despite the commentaries arguing the Economist is wrong - they are actually right. We no longer operate under sane economics fundamentals - we are in economics fantasy land.
I will argue why the Economist is right and how it’s working in this bogus economy:
1-The Fed prints tons of dollar - let’s say 200 billion everyday. Of course it’s worthless, it’s only paper. Most is converted electronically.
2-The same day it wire-transfers around 150 billion to friendly-countries (UK, France, Japan, Australia) which in turn buy for 100 billion of US Gov bonds and invest back in the dollar.
3-When the bonds come to term, the Fed prints more dollar and give them a profit. And on and on and on.
This is the only way the US ”financial” economy can remain strong - and I agree with the Economist, this can go on for many centuries.
The common logic that the more dollar you print the more likely you’ll have inflation is faulty. The Fed can print 2 trillion dollar out of thin air tomorrow and it won’t change anything. This system has been going on for years and it can goes on for many more years.
Don’t look further, the system is quite easy to understand. Of course, anything Universities teach students in economics is all bullshit.
“The common logic that the more dollar you print the more likely you’ll have inflation is faulty. The Fed can print 2 trillion dollar out of thin air tomorrow and it won’t change anything. This system has been going on for years and it can goes on for many more years.”
My view would be that from one day to the next, the Fed can print trillions, and the fact is, you don’t see the inflation the next day.
Of course, you can also swallow a few grains of sand and not get sick. You can do that day after day, maybe. But one day when you decide you can swallow 15 pounds of sand, you do get sick, and you die. Since 1913 the Fed has debased the dollar by about 95%. No one saw this happen overnight. It happened gradually. What is not gradual today, however, is the fact that the Treasury and Fed must constantly monetize our debt. And the fact is, our debt is now beyond anyone’s ability to repay it without massive and imminent debasement of the dollar again.
What will happen over the next few years will be fundamentally different than what has happened in the last ten or twenty. We are rapidly approaching the point where our financial belly is full of sand and the body is about to shut down.
Drink enough water, and you will die.
I suppose if too much liquidity was supplied to an economy for too long, the economy might die as well.
Last year somewhere in New York a radio station did a contest called “wee for a Wii”. Whoever drank the most water in a given amount of time, without going to the bathroom, won a Wii. One woman drank so much that she died. It happens.
“Of course it’s worthless, it’s only paper.”
Dude,
If I have Ben send you my home address, will you kindly send me all the worthless Fed-printed paper you own (including the electronically converted portion)?
Sincerely,
Professor Bear
Better yet sent it to me…I’ll buy Gold! …I’ll send you back half of what you were going to send to Mr. Bear…then forward the rest to Mr. Bear…he’ll never know that anything is amiss!
PS,
Naturally, this will include a “lifetime” supply of Ben’s favorite beer as a “THANK YOU!”
Soupy Sales just told the kids to go into mom’s purse and send him all the pieces of green paper with pictures of presidents on them.
At least PB is targeting the adults.
“Does this article remind others of whistling past the graveyard?”
whistlingmotionlesspastin thegraveyardcoffin?I would argue that one of the things that we should have already learned from the housing bubble is that the the economy is currently so highly leveraged and interconnected that many things that SHOULDN’T be dangerous are. Percentage-wise, the declines in RE prices that we’ve seen shouldn’t have caused the economic-crisis and panic that we saw last year. I have NO IDEA at what level the dollar decline that we’re going through could reach a similar tipping point. And I wouldn’t be shocked if nobody else has any idea what it is either.
Whatever the tipping point for the dollar turns out to be, rest assured that nobody could have seen it coming.
Here we are
http://i864.photobucket.com/albums/ab205/muggyflo/Fam1.jpg
My heartfelt congratulations to Mrs. Muggy.
They are beautiful, Muggy. Kids are the best thing. Except for when they fight (mine did constantly for about 11 years) and when they do illegal things as teenagers. But it’s worth it.
Congratulations, Muggs!
Oh, Muggy! How lovely! What a beautiful baby! You must be so delighted. Gosh, she does have a lot of hair.
I bet mini-muggy is thrilled to be a big brother. He’s gotten big since the last photo—the ‘housing bubbles, snot bubbles’ one–haw, I loved that one. It’s cute how he’s sort of gingerly handling his new sister.
What a beautiful family you guys make. Thanks for the photo, that’s so nice to see.
Congratulations, Muggy!
What a nice photo. The Littleman is gettin’ bigger-er.
Congrats!!!
That`s a Keeper!
Great photo Muggy. You guys are holding her warm and lovingly.
I know all about little kids. You FEED them and they will grow.
Oh, and ALWAYS make sure her Mom is close by for the all the additional details not included in the Little Kid Manual.
“You FEED them and they will grow. ”
I don’t understand, is this a buy signal?
You…didn’t get the (mikey’s Dad’s EZ Edition) copy of the Little Kids Manual…did ya?…did ya ?
Nice kids muggy, you are gonna be a busy guy…Got plenty of Crayolas, Legos and a large supply of 100% fruit juice ?
Haha. I am looking forward to the legos again. You know, they’re for the kids… that and the R/C cars, although I may have to go with R/C boats here.
Yeah Muggy..R/C cars and boats, Legos and electric trains.
We better stop now or I’ll be into my 3rd childhood. I really envy you…Except at 3 am in the morning !
“and electric trains.”
Aww man, I almost forgot that. My dad is a HUGE Lionel collector.
She’s a definite “buy”. I raised a son but would have been proud to have had a daughter too. Some people do say boys are less of a worry than girls. Don’t believe it !!
My boy should be hanging or dangling somewhere on a moutaineering rope off of the face of a cliff wall at Devils Head State Park rock climbing with his buddies just about now…Sheesh !
Where’s Devils Head State park?
Sorry, it’s Devil’s Lake State Park, WI which has a Devil’s Head Resort or something.
I get my little Devil’s mixed up when I worry.
Congrats, Muggy!
Do I detect green shoots of sibling rivalry in that photo? Watch that toddler as baby steals away mom’s attention…
LOL, PBear. My older one got pretty neurotic for about 6 months after his little brother was born. It was charming - facial tics, holding his crotch constantly, and going back to wanting a bottle. Then the years of fighting. Amazingly, they are now best of friends and live together.
The fighting in our household lasted about 12 years. Only recently has a truce been called, as big brother finally feels secure enough about his own interests, abilities and relationships with his parents to cut younger siblings some slack.
HOOAH!
That little one will be strapping on a parachute and standing in the door in NO time!
I wish you the best, man….
Stpn2me
Kinda funny how interest rates recently spiked up just as all the harried tax credit buyers are about to close. Everybody gets a cut of the 8K and then some. IOWs, the buyer is not getting a free lunch. Everyone else — UHS, banker, seller, mortgage insurer, surveyor, local taxing authority, appraiser, title insurer, closing attorney, policymaker, and so on — is dining on the buyer’s illusory free lunch.
Exactly. Someone asked me if they should rush to buy. I said the would pay $20,000 extra to get that $8,000 break.
I will say this, however. How about telling the REIC that the federales will lift the first time buyer credit to $10K, and make it permanent and adjust it for inflation, if the mortgage interest deduction is phased out, and a matching downpayment requirement is added?
That would make the subsidy do what the REIC says it does — allow people of modest means to buy homes.
The phase out would allow those who have already bought based on the deduction to keep it, providing they amortize the loan. The amount they are allowed to deduct would go down each year.
Double Bubble, defaults and trouble:
“I have never seen anything this bad,” said Dan Tishman, CEO of Tishman Construction, one of the nation’s leading construction and management firms, comparing the current slide to major commercial real estate busts in the 1980s and ’90s.”
“Even as economists and federal officials point to recent signs that the recession may be ending, there’s widespread concern that commercial real estate could pose a threat to the recovery. Federal Reserve Chairman Ben Bernanke told members of the House Financial Services Committee this month that “commercial real estate remains a very serious problem.”
Though the market is only about a third the size of the $22 trillion residential market, in some ways the problem for commercial real estate is more severe. Unlike home mortgages that run for 15 or 30 years, much of the roughly $1.6 trillion in commercial real estate loans outstanding involves much shorter terms of three to seven years. Many of the loans were written at the height of the boom.
“There was this unbelievable bout of lending that occurred all on a very short term,” said Tishman. “With short maturities you’ve squeezed the accordion as close as you can get and caused a lot more refinancing in a short period of time.”
Commercial real estate became hugely popular with bankers during the boom. In 2006, commercial real estate made up 56 percent of U.S. banks’ loan portfolios up from 40 percent a decade earlier, according to FDIC data. For smaller banks with assets under $1 billion the concentration is even higher. Some 74 percent of all loans held by smaller banks are secured by commercial real estate. These roughly 6,500 banks represent some 90 percent of all U.S. banks.
The risk for consumers is that heavy losses on commercial real estate could force banks to tighten lending for home mortgages, car loans and credit cards even further. It also could force bankers to try to offset commercial loan losses by accelerating sales of foreclosed homes, which could put further pressure on home prices.”
Link to full article: http://tinyurl.com/yz6fzq4
Mesa is the third largest city in Arizona, with a 2008 population of over 460,000.
Homeless students in Mesa rising dramatically
by Ray Parker - Oct. 23, 2009 09:48 AM
The Arizona Republic
The number of homeless students attending Mesa Public Schools has increased dramatically in the last three years.
Statewide, there are 25,250 homeless students, an increase of about 75 percent since 2006.
Mesa Public Schools, the state’s largest school district, has seen its homeless student population grow by more than 400 the last three years to 1,280.
Educators and homeless coordinators will discuss the issue during the annual Conference on Homelessness scheduled for Oct. 26-27 in Phoenix.
Homeless experts said a tighter economy, the rising cost of gas and groceries, and minimum-wage paychecks are pushing more families into poverty - and leaving many with no permanent place to call home.
“I’ve never seen (homelessness) on this scale,” said Jennifer Griffin Davy, homeless family liaison for Mesa Public Schools. Last month, the international nonprofit group Feed The Children donated nearly 2,000 backpacks filled with school supplies, snack food and books. The bulk went to Mesa homeless students.
Districts are required by federal law to provide each homeless student with the resources they need to receive an education. That includes everything from transportation to school from wherever they are staying temporarily to school supplies or uniforms.
Imagine being in Canada/France/Denmark/Germany, donating to Feed the Children, and receiving a thankyou-update letter from a homeless kid in freakin’ Mesa Arizona. This is insane.
i was born in Phoenix in the 1940’s; lived here all my life ‘cept ‘66-’74. i have never seen things this bad.
Gonna get worse.
And how many of those are illegals I wonder. Or are we not allowed to ask that anymore in the ear of hope’n'change?
And another question…you are all so quick to dismiss anything written in the papers when it comes to positive news. Then it’s all lies propagated by your PTBs and PPT and whatever other imaginary groups exist. But a story on those poor poor children and nobody thinks twice about the accuracy of the story. 2000 homeless kids!! Oh my, quick, someone send $1B to Mesa to fix the problem and create a new bureaucracy staffed by 300 new govt employees to manage it. You people are being played and you don’t even know it.
So I had space panic this weekend and I went looking for a 3/2 since we added a littlegal… I’ve already got a place to check out $100 less/mo. than what we’re paying now, and they’re willing to wait for us to give notice. The guy has owned it since 1979.
It happens to be near my fav park, too. I’m checking it out tomorrow.
Lemme guess… Lake Seminole Park?
My back up guess is the Pinellas Trail.
Fort DeSoto Park is nice, but too isolated.
It is near the trail, and Seminole is close, but I’d have to tell you offline. I maintain a healthy course of paranoia.
If you are in the middle of the park, it is hard to tell that you’re in Florida’s densest county — the reason I love it.
No worries, Muggs.
I lived in Pinellas for about 10 years and the Pinellas Trail, Lake Seminole and Ft. DeSoto were among my favorite parks in the county.
I used to do quite a bit of rollerblading and biking back in those days. The Tampa Bay area has many beautiful areas.
Outside Looking In
By Michael Hirsh | NEWSWEEK
Published Oct 24, 2009
From the magazine issue dated Nov 2, 2009
Paul Volcker saw Barack Obama as an “agent for needed change” when the former Federal Reserve chairman endorsed him for president in January 2008. But lately Volcker has been feeling a bit ignored by the White House, and thinks that Obama isn’t changing Wall Street enough to avert another subprime disaster. Last week the current Fed chief, Ben Bernanke, came up with a proposal to make big banks behave: he pledged to change the way the nation’s top 28 banking companies pay their executives, removing incentives for short-term gains and “working to ensure that compensation packages appropriately tie rewards to longer-term performance.”
But Bernanke didn’t go nearly as far as Volcker says we should. Volcker wants to keep major commercial banks that enjoy federal-deposit guarantees away from big-time speculative trading. “They shouldn’t be doing risky capital-market stuff,” Volcker told NEWSWEEK before the Fed announcement. But, he adds, the president “obviously decided not to accept” his recommendations. Volcker says he was used as “some kind of symbol of responsibility and prudence” by the administration during the campaign, and now speaks to Obama only occasionally. A White House official, who didn’t want to be named talking about personnel issues, says Obama pays close attention to Volcker—and other dissenters, like Mervyn King, the Bank of England governor who also called last week for substantive structural changes to banks considered “too big to fail.” “The president has a great deal of respect for Paul Volcker; he has met with him more than a dozen times in the White House, and seeks his input frequently,” the official says.
…
Wow, that’s very telling, IMHO.
At least we were all right about Volcker. Can we toss Obama (and everyone else) and put Volcker in charge of the U.S.?
It seems quite optimistic to assume that there is a “right choice” for Bernanke that will magically keep inflation under control without hurting the jobs recovery…
Bernanke’s trillion-dollar decision
By EAMON JAVERS | 10/24/09 6:55 PM EDT
Ben Bernake stands in a room.
The biggest decision of the economic recovery will be made in the next six months, and President Obama will have almost nothing to do with it. Photo: AP
The biggest decision of the economic recovery will be made in the next six months, and Barack Obama will have almost nothing to do with it.
…
Fed chiefs worry about inflation. Bernanke wants to take the money out quickly enough to prevent the economy from overheating and causing a jump in prices that strangles growth. But move too fast, and the economic recovery runs out of fuel.
Presidents worry about jobs. Obama probably wouldn’t mind a little overheating, say, next summer – when voters are starting to make up their minds about the 2010 congressional elections, and he hopes the economy can shake the 10-percent unemployment rate doldrums.
“Any chairman of the Fed will do what’s right for the country, not what’s right for the administration,” said Ernest Patrikis, a partner at the law firm White & Case who spent 30 years at the New York Fed. “That’s his job – that’s why he’s apolitical.”
“The exit will be so difficult,” said economist Joseph Brusuelas of Moody’s Economy.com. “Bernanke wants to engineer a recovery that does not include inflation. Obama wants a more robust recovery and like many political actors may be willing to forgo a little inflation for a little more employment.”
The White House is already worried that jobs won’t be coming back fast enough next year, Fed or no Fed.
Obama economic adviser Christina Romer warned a congressional panel Thursday that the jobs picture will remain “painfully weak” through 2010, with a seriously elevated unemployment rate for another year.
So all the White House can do is watch and wait, and hope it doesn’t pay a political price for any missteps by Fed officials they can’t control.
“It’s a dicey thing to do, and they know it,” said Sen. Richard Shelby (R-Ala.), the ranking member on the Senate Banking Committee. “They have to be careful.”
…
“Bernanke wants to take the money out quickly enough to prevent the economy from overheating and causing a jump in prices that strangles growth.”
Oil is already at $80 per barrel. Does idiot Ben think his massive liquidity pump has anything to do with that? It’s only a matter of time that $80 oil cripples this “recovery”. Let’s see what happens at $100.
Is it time to dump your ARM?
Some 1.5 million adjustable-rate mortgages reset soon. If yours is one of them, you need to decide whether to lock in your rate and refinance into a new loan.
By Beth Braverman, Money Magazine staff reporter
October 21, 2009: 5:42 AM ET
(Money Magazine) — If you are among the 6.5 million homeowners who took out a low-rate adjustable-rate mortgage during the housing boom, you’ve probably spent the past couple of years waiting for your day of reckoning to come.
After all, you’ve probably heard repeated warnings that when your ARM resets your payments would spike dramatically: an especially big problem if you used a low-rate ARM to stretch for a home you could barely afford.
The good news is that scenario hasn’t come to pass. Instead, interest rates have fallen to record lows, and when your ARM resets you’ll probably see your monthly nut fall, not rise.
But once the economy stabilizes, the government will start peeling back the policies that are keeping mortgage rates low.
“Eventually rates are going to go up very significantly,” says Greg McBride, a senior financial analyst at Bankrate.com. The Mortgage Bankers Association predicts fixed mortgage rates will reach 5.9% by the end of 2010 and 6.3% by the end of 2011.
…
Spin baby Spin
Palm Beach County and Treasure Coast home sales surge as credit opportunity knocks
By KIMBERLY MILLER
Palm Beach Post Staff Writer
Saturday, October 24, 2009
Sales of existing homes in Palm Beach County jumped 43 percent in September compared with the same month last year, a sign that the $8,000 tax credit is working and another indicator that the market is clawing its way back, experts said.
Treasure Coast sales showed a 53 percent increase from September 2008.
The data, released Friday by Florida Realtors in conjunction with a report from the National Association of Realtors, showed that 746 homes were sold in Palm Beach County in September and 572 were sold in the Treasure Coast.
Statewide, 14,419 homes were sold, a 34 percent increase from September 2008.
“What we’re seeing is an unleashing of pent-up demand,” said Walter Molony, a spokesman for the national association. “Consumers have been holding back and there’s been a lot of frustration, but now we’re seeing a rush of sales activity.”
Home sales nationally rose 9.2 percent year-over-year.
While the numbers point to a recovering housing market, some Realtors and mortgage brokers cautioned against declaring a clean bill of health.
Douglas Rill, owner of Century 21 America’s Choice Realty in West Palm Beach, said year-over-year comparisons can be misleading.
September 2008 was a “dismal” time, he reminded. People were running scared from the recession - a retreat that likely lowered home sales - and were soon hit with a stock market plunge in October.
“Everybody was paralyzed,” Rill said. “Therefore, sales figures being up compared to a year ago is not a big surprise to me.”
In a month-to-month comparison, Palm Beach County showed a slight drop, from 754 home sales in August to 746 in September. The Treasure Coast showed an increase from 537 to 572.
One looming spoilsport to the budding rebound is an expected increase in foreclosures as adjustable-rate mortgages come due, combining higher monthly payments with deepening unemployment.
A flood of foreclosures would increase inventory while causing prices to dive.
Rill said banks have gotten smarter about releasing a load of foreclosed homes at once. But reaching critical mass could force their hands.
According to LPS Mortgage Monitor, which studies home financing, 10 percent of loans in Florida were in foreclosure in August. Add delinquent loans to that figure and it grows to 21.7 percent.
“We are a far cry from being through the foreclosure problem,” said Skip McDonough, a broker with Family Mortgage in Jupiter. “There’s a potential for many loans not to perform with the change in interest rates, and that’s the tsunami we really worry about.”
Florida’s median price was $142,000 in September, a 19 percent decrease from 2008. Prices mostly held steady in Palm Beach County and the Treasure Coast when compared with August, but both dropped when compared with September 2008.
Palm Beach County’s median fell 17 percent to $242,200. The Treasure Coast saw a 20 percent decrease from September 2008 to $110,800.
“Small dips in the median sales price is still more positive than a dramatic fall,” Rill said. “If you add in the fact that interest rates are still great and there could be an extension on the first-time home buyer credit, there hasn’t been a better time to buy real estate in the past decade.”
Like single-family homes, condominium sales increased in volume but dropped in price.
In Palm Beach County, condo sales were 30 percent higher than in September 2008, but median prices fell 24 percent to $106,700. In the Treasure Coast, condo sales jumped 94 percent but median prices fell 33 percent to $94,100.
It seems like walking would be the best “investment strategy” for many households who are currently deeply under water. However many homeowners walk away from unrepayable debt, I am sure Megabank, Inc will figure out some way to collectively stick all US taxpayers with the tab for all the crazy loans they securitized.
I don’t know about the rest of the world, but I would greatly prefer to rent a home from a local landlord than to rent money from a Megabanker.
Refinancing lifeline fails to reach most ‘underwater’ homeowners
Federal plan misses about 97 percent of eligible borrowers
By Renae Merle
Saturday, October 24, 2009
A seven-month-old government program to help homeowners with little or no equity refinance their mortgages has so far reached fewer than 3 percent of those targeted, with many struggling borrowers deciding that the benefits of a new loan aren’t worth the closing costs.
This lackluster performance reflects the difficulty of helping the growing segment of “underwater” homeowners — those who owe more than their home is worth.
…
Scarce equity
Recent studies have shown that one-third of borrowers are underwater on their mortgage. In the Washington region, about 34 percent of borrowers owed more money than their homes were worth during the first quarter of the year, according to First American CoreLogic. The problem is most acute for borrowers who took out loans in 2006 and 2007 — about 60 percent of them are underwater, according to Fitch Ratings.
Yet for many underwater borrowers, refinancing isn’t always attractive because they could still owe more than the value of their home and face years of payments before they regain equity. Refinancing can be especially risky for those homeowners who might move within a few years or who are nervous about losing a job.
“If you’re deeply underwater, it’s going to be a long time before you regain equity, unless housing seriously rebounds. So investing more in the house is maybe not the best strategy,” said Andrew F. Haughwout, a research economist at the Federal Reserve Bank of New York.
…
Leaving homes behind
A growing number of underwater borrowers are walking away from their homes even if they can afford the payments, according to recent studies. More than 25 percent of mortgage defaults during this housing crisis have been so-called strategic defaults, according to a study published in June by professors at Northwestern University, the University of Chicago and the European University Institute. Another study by credit bureau Experian and Oliver Wyman, a strategic consulting firm, estimated that nearly 600,000 borrowers “strategically defaulted” on their mortgages in 2008, more than double the number from 2007.
Housing experts say these borrowers are calculating that their homes are no longer a sound investment. For example, a borrower who is 25 percent underwater would spend nearly 10 years making regular payments before regaining any equity in the home, according to mortgage research firm HSH Associates.
“They are effectively renters with all of the costs of homeownership,” said Jakabovics at the Center for American Progress.
How did putting the GSEs into govt conservatorship address the problem of rising losses? I would think the risk of loss would go up after a government takeover?
* BUSINESS
* OCTOBER 23, 2009, 8:51 A.M. ET
Freddie Sees Rise in Delinquencies
By KEVIN KINGSBURY
Freddie Mac said Friday that delinquencies in its mortgage portfolio continued to rise last month, putting further pressure on the mortgage financier.
It and larger sibling Fannie Mae were put into conservatorship a year ago by the federal government amid fears of mounting losses at the companies.
Freddie said September delinquencies on single-family residences rose to 3.33% from 3.13% in August and 1.2% a year earlier.
…
And now FHA is turning into their identical triplet. Have there ever been Siamese triplets?
Posted on Wed, Oct. 21, 2009
Commentary
A compounding nightmare
By Jamie Lau
Low- and middle-income households with credit card debt owe, on average, $9,827 on their cards. If you make the minimum monthly payment - often 2 percent of the balance or $10 - at 10 percent interest, it will take you more than 26 years to pay off the balance, including $6,812 in interest.
But what if the rate was raised, or if your rate was tacked to the prime rate (currently 3.25 percent)? It could take more than a lifetime to pay off that debt.
…