Bits Bucket For November 2, 2009
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The Housing Bubble
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Good morning fellow bubble-heads.
In yesterday’s BB, someone linked an article about how Ford may also join the other two formerly Big Three in needing a bailout. That got me to thinking. Is there any way to determine what kinds of vehicles the U.S. govt is buying for its various departmental fleets? Are they now buying more GM vehicles as a way of propping up their “investment” in that company? Would that be a logical move? Should taxpayers support such a policy?
We as taxpayers shouldn’t be bailing out anyone. Ask Ron Paul?
Here’s some recent Ron Paul commentary (from Oct 29):
“Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.
This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble’s collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve’s balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?
What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.
Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury’s program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person’s pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.”
It is certainly true that all increased current government consumption comes at the expense of future government and non-governemnt consumption. But there can be some benefit to these sorts “smoothing” actions by the government. The real problem is that over the last couple of decades the government has only pushed in ONE direction. They’ve been serving “hair of the dog” drinks in the morning rather than taking the punch bowl away when the party started going.
Where’s Eddie to call Ron Paul a “kook” once again? Ron Paul gets one HUGE thing right. That is one more than any other member of Congress that I can see. But the chimps at CNBC and their bull-plop spewers such as Eddie are still spending their garlic breath trying to discredit Ron Paul. The more sense he speaks the more the baboons have to fight to counter it.
Ford doesnt need a bailout..
http://www.msnbc.msn.com/id/33583171/ns/business-autos/
Here’s your chance, Straw Man Eddie. Why not see if you can say something for once to suggest you have more than an eighth grade education?
Apparently the shortbus has no wi-fi.
Exy, I can tell you’re angry today. It was a good day for capitalism so I understand. And you will be downright pissy tomorrow when HopeNChange is officially dead.
As for Ron Paul, two of my posts of his seem to have been censored. Oh well, so be it. He’s a freak of nature. Not much more to be said.
“He’s a freak of nature. Not much more to be said.”
A foolish consistency is the hobgoblin of small minds. And your posts are consistently foolish.
A Ron Paul supporter calling others foolish….a perfect example of irony if I ever saw one.
Eddie, you get more annoying every day and you are acting like it’s December already.
When a nation as a whole and it’s MSM supports and encourages the mass diversion of it’s energies, support and finances from productive legitimate businesses and companies that could produce valuable goods, services and jobs for speculative bubbles like dot com, the stock market crap and the REIC, it deserves some real pain and suffering…period !
“Please Sir, may I have another…?”
Overall I agree that companies that fail should go bankrupt but what do you do when foreign companies that are able to sell into the US are propped up by their gov. In an economic downturn you destroy your manufacturing base and foreign companies eat up the market share.
We do the same thing.
But what’s worse is when we prop up American companies (with tax breaks special import concessions) that offshore our jobs.
+1
Foreign holdings in US debt is increasing, not decreasing.
http://www.treas.gov/tic/mfh.txt
Foreign holdings in US debt is increasing, not decreasing.
http://www.treas.gov/tic/mfh.txt
Only in nominal terms. As a percentage of total debt purchases it’s going down a *lot*.
Graph
Foreigners are keeping purchases flat, while our total debt purchases are skyrocketing.
I posted a link that’ll show up in a few I’m sure.
He didn’t say “holdings” have decreased, he said “purchases”. He is a bit wrong on that - purchases have stayed somewhat flat, though China’s purchases have gone down quite a bit, offset by an increase from Britain. For the past 6 months Britain has bought way more than China.
you are correct and good point. Total purchase are flat, with slight increases by some countries, but relative to purchases relative to total increasing debt, it is a different story.
How about CITI? Was it rewarded?
Hear, hear, colbalt!
The Financial Times
US Senate to introduce draft financial bill
By Tom Braithwaite in Washington
Published: November 1 2009 22:42 | Last updated: November 1 2009 22:42
The US Senate is close to producing draft legislation on financial regulation – but in a form that complicates the Obama administration’s own plan for dealing with future crises and that may end the chances of a bipartisan law passing this year.
One senator and several aides said a bill would be introduced “within days” that redrew the regulatory map in a different way to draft laws put forward by the Treasury and the House financial services committee.
In spite of efforts by Barack Obama, US president, to woo Richard Shelby, the lead Republican on the Senate banking committee, people taking part in negotiations from both parties said they were unlikely to agree on a bipartisan draft law.
“I’m afraid we’re moving towards a partisan process,” Bob Corker, a Republican member of the committee, told the Financial Times.
One person involved with the talks said the week of November 16 had been pencilled in for the mark-up of the bill, which would address derivatives, systemic risk, resolution authority for failing companies and consumer protection.
As currently structured, the bill envisages a consolidation of the four banking regulators, stripping powers from the Federal Reserve and creating a single prudential supervisory body. In systemic risk regulation, the central bank would also lose power to a new council of regulators, in contrast to the administration’s plan to empower the Fed with new authority.
…
Sounds good so far…
Too good to be true - it’ll never happen.
The Vampire Squid (Fed/Goldman Sachs/JP Morgan/etc) will rule all.
Now all of a sudden ford truned a profit and beat estimates, WTF?
These guys blatantly cook the books so bad it not funny.Have you driven a ford lately?
Speaking of driving a Ford lately…I tried to plug my GPS into the cigarette lighter socket of my 12 year old Taurus yesterday. I’ve used the GPS in the car before, but this is the first time I bothered to plug it in since the unit was holding its charge so well and was topped off from using it in Canada.
Well, the socket assembly pretty much fell apart. There are two wires hanging down and I have a bunch of little metal pieces and maybe a plastic one or two. Can I fix this myself? It looks like you can buy the socket assembly for a few bucks, but will I need some fancy equipment to figure out which wire is which? A sodering iron to hook stuff up? I don’t need the cigarette lighter to work, but I would like to be able to get electricity out of the socket for the GPS and the ipod for long car trips.
Thanks for any help. I bought a kit to be able to charge it out of the computer or a wall socket, so not a rush, but I’m curious if this is something I can do with a quick trip to the auto parts store and 10 minutes or if I need to get someone with actual equipment to do it for me.
And arizonadude? Thanks for the transition. That was great.
I always buy a shop manual so I can do small repairs myself.
You can probably pick up one off ebay or from used booksellers at amazon.
Should be easy enough (liability note: you’re on your own)
1) Buy new part from autoparts store. Will likely be the same quality or worse than what you had. You’ll also overpay.
2) Disconnect negative terminal of your car battery (black).
3) On socket, black goes to black, red goes to red. If you don’t have one, get a set of wire cutters. Probably don’t need to solder. Considering it is a 12 year old car and you’re asking about soldering, if you don’t have an iron you’ll likely be fine just twisting the wires together even and using electrical tape on the end. If you don’t have an iron and want to learn how to solder…I don’t recommend learning on your car.
4) Reconnect battery.
Alternate 2 for the wicked cheap:
1) Disconnect negative termal of the car battery.
2) Take apart power socket, cut to bare wire.
3) Look at the thingamagig on the GPS that plugs into the socket. Cut off the end that plugs in the socket to bare wire.
4) Tape red wire to red wire, black wire to back wire.
5) Reconnect battery.
Note about alternate 2: you won’t be able to use your GPS in any other car any more unless you buy another adapter.
Alternate 3 for the lazy:
1) Buy a new car. On credit. With zero down. And spend an extra $3000 for the built in GPS.
Alternate 4:
Marry a GrizzlyBear who takes care of all of that for you.
Alternate 4 for 2006 HELOC crowd:
Torch/drown car, file insurance claim, buy new car with GPS built-in, leave house, mail keys to bank, sleep in mall parking lot
Griz….
Thanks for mentioning the whole detatch the battery thing, guys. I might have missed that part - I mean I don’t think about being able to charge the thing when the car is off, so I don’t think I would have thought about those wires being active off just the battery. Though, now that I think about it, could you use the cig lighter when the car was off?
I think I might actually have a soldering iron around here somewhere. I’ll have to look. And check out some books on auto stuff in the library. And stop off at the auto parts store where I get my windshield wiper blades for a third of what they cost at jiffy lube. I have a wire cutter in my needle nose pliers and an exacto knife for stripping and probably some electrical tape, so I think I have most of the tools/supplies that have been mentioned.
I have a project for next weekend!
Cigar lighter might only have one wire, and that is positive (red) that goes to the center conductor in the socket. The outside of the socket is ground, or black, or negative, and goes through the vehicle chassis.
There is a heavy red wire which is the + or center electrode of the lighter socket. A heavy black wire goes to the ‘case’ or outside metal part of the socket. There is probably another colored wire which provides power to light the translucent bezel when your lights are on. This wire is not necessary and should be taped. You can do it.
Yes, this is the least confusing of the responses, Polly. You can probably even see where the wires used to be soldered on the old piece. Buy the cheapest soldering iron, a small tube of solder, and after disconnecting the battery, solder the wires onto the new piece in the exact same places as they were on the old one, with the ground wire (black) on the outside, and the hot wire (red) on the inside. If you are not sure about soldering, go to youtube and I bet there are hundreds of videos.
So far thread is fun. Polly, any more things to fix?!!! My toaster doesn’t plug in right all the time, sometimes left. yuck
Go to ‘Louies Wrecking Yard’ on So. Union and Louie will fix it for you for a nominal charge plus a six pack.
Judging just based on ‘looks’ (ie, what i see driving down the street), the feds and my local state government do typically buy GM/Ford/Crysler products for police, fire, and fleet operations.
The large corp i work for does as well, simply because Ford and GM are the ones who make the trucks we use.
Why would that be, they have just made a $1B profit.
I’ve never had a problem with my 10 year old Ford. My family’s driven them for years. We had one lemon in the 70’s, but it was an exception.
I have a Ford Contour that’s my beater — bought it for $4k at 30k miles and it has 117k now.
Nothing but oil changes, brakes, and new tires…
I should add that the driver’s side window doesn’t roll down, which adds a funny twist to my Florida experience.
Like I don’t sweat enough already…
I too have driven Fords forever. I wouldn’t say the two lemons I got in the 70’s were “an exception” — I’d just say that after that, they learned to have most of the car made by Mitsubishi before bringing it over here and re-branding it. Anyway I’m still quite happy with Fords. Vis-a-vis the windows, the important thing is NOT TO SLAM the doors of a Ford. If you keep doing that, the windows will eventually either (a) stop opening or (b) fall down into their slots and be permanently open. Oh well. Love my Ford anyway.
U.S. stock futures pointed to a solid open Monday after strong results from Ford and ignoring the bankruptcy of CIT Group. The CIT bankruptcy also cost the US Taxpayers about $2.3 Billion. Anyone want to guess at GM?
Ford Motor Co. unexpectedly reported a quarterly profit, sending the auto maker shares up over 8% in pre-market trading. Ford swung to a third-quarter net profit of $997 million, or 29 cents a share, from a loss of $161 million, or 7 cents a share, in the year-ago period. Excluding one-off items, the group said earnings were 26 cents a share, while revenue fell to $30.9 billion from $31.7 billion. Analysts had been expecting a loss of 13 cents a share on revenue of $29.1 billion. The company also said it expects to be “solidly profitable” in 2011.
CIT Group Inc. in one of the biggest corporate bankruptcies ever, filed for Chapter 11 protection in New York on Sunday. CIT a major lender to small and midsize businesses, has struggled to avoid collapse since the recession triggered billions of dollars in loan losses and the financial crisis cut the company off from its main source of financing. With roughly $60 billion in assets, CIT’s filing is probably the fourth-largest bankruptcy in U.S. history.
“The CIT bankruptcy also cost the US Taxpayers about $2.3 Billion.”
Poof!
Well, look at it this way. At least Goldman paid us back. Whew, did they ever! (Palmy rubs painful posterior)
“Please, Sir, may I have another?”
“Whew, did they ever! (Palmy rubs painful posterior)”
Just remember, a significant segment of the population enjoys that sort of thing — not that there is anything wrong with that…
I wonder if the CIT guys will file a claim for big bonuses against the bankruptcy estate. Why the heck not?
The bonuses are not going to be paid in a BK
that’s why so many companies wanted to borrow money from the Fed.
I bought F about a year ago at 1.20/share. I guess I’ll hold onto it for awhile, since it won’t be going out of business soon. And I do like their cars. Wish I’d bought more than 1000 shares, but I felt it was too risky at the time.
REHobbyist,
Granted, and @ C/B around $2.00, for a ‘trade’ how wrong could you go? I’m sure you’ve walked away from twelve hundred bucks with ‘less’ satisfaction?
So… after S/T cap gains and a… modest profit, we still have a pretty f’d company and nothing really solid to go on? Bottom feeding off of decimated former cornerstones of the economy wasn’t what I somehow pictured for my 50’s? IMHO.
Oh dear, DinOR, I didn’t understand 3/4ths of your post (C/B, S/T). But I think that you said that I’m bottom feeding. Actually, I really like Ford and bought because I thought they had a good chance of surviving. I only buy stocks to hold for the long term and look for bargains. The trouble with the current market is that it’s hard to say which companies that look like bargins will survive. For example, I haven’t bought a financial stock in the last seven years.
I wonder if Government Motors turned a profit this quarter?
Well,
There’s no more C4C. I wonder what next year will look like..
Probably kind of dicey till cash4clunkers2 the sequilz is released.
Possibly around tax return time.
“CIT Group Inc. in one of the biggest corporate bankruptcies ever, filed for Chapter 11 protection in New York on Sunday.”
Is it safe to assume the PPT is going to backstop the stock market today? As my grandma’s kitchen placard pointed out, A closely-watched pot never boils over.
Sorry guys, but CIT is the (1) company the guv ’should’ have made every attempt to prop up. As loans to small businesses continue to evaporate.., store fronts continue to vacate.
Of course in our unENDING desire to see blood in the streets we can’t be bothered to give a rip about rank & file businesses owners. We should corn-hole them every BIT as hard as the FB’s ( and their lenders ) that created this mess.
Oh sure we can ‘champion’ worker’s rights and all that happy horsesh!t but I’ve YET to see anyone here stand up for small biz. We’re all on the same side of the table w/ Wilbur Ross talking down comm. RE until it reaches “can’t miss/free money” territory and let the consequences to ‘others’ be damned.
So how was everyone’s Halloween?
The point of destruction in capitalism is that those who don’t know how to run a business will be replaced by those that do. I can’t imagine CIT was managing risk properly. Therefore the thought is that they deserve to go bankrupt and be replaced by a healthy company, minus the baggage.
You have missed the point of the HBB crowd. It is not destruction that we want. It is a healthy economy. Too big too fail is completely anathema to this way of thinking. Keeping alive bad banks, bad lenders and generally $hitty companies does not make for a healthy economy. Pumping more money into CIT makes no sense. I want to see somebody else have their shot in a marketplace not completely f—ed by government meddling. I know it’s a lot to ask for.
Wanting destruction for the sake of destruction is not what is happening here.
NYCityboy,
..? Well, otay. I must have been absent the day the HBB crowd was passing out pitchforks though?
I’m in NO way taking up for the GROSS mismanagement that’s taken place at CIT. So don’t get the wrong impression. My wife’s company acquired them in the early ott’s just to take a huge loss only 2 years later. No love there.
And going NINETY percent LTV wasn’t exactly ‘brainy’ either. But ultimately it would only have to be replaced by some Gub’mint entity that was equally if not -more- inefficient? We ’say’ we want a “healthy economy” but only after doing it OUR way! Through complete decimation, degradation and humiliation!
( Btw, I’ve been a bubble blogger since ‘04 but I appreciate your concern )
+1 NYCB
Another thought is that this just might be what small business needs, a nudge to make them start off with smaller, self-financed expectations instead of fostering a debt-up-front /results-(maybe)-later environment. If it’s that great of an idea, the money will follow. I’m sure that there are many smaller VC type firms happy to step in and chase the right opportunities.
“a nudge to make them start off with smaller, self-financed expectations”
Ay-men to that. I’m astounded at how much I’ve heard in the last year about small businesses that “need” a line of credit to make payroll and replenish stock.
The concept of “positive cash flow” appears to be as unknown to many small businessmen as it was to housing specuvestors.
D. Riley
Wait a minute guys!? Just last week everyone was singing Woodie Guthrie tunes and organizin’ and all, you know for the werkers and now we’re a’ throwin’ them under the bus too?
O.K, got it.
DinOR,
The only ones getting thrown under the bus are the “debt-is-income” folks. In hindsight I would agree with you that if we had to choose ONE to bail out, perhaps CIT makes some sense. But if your stance has been “NO BAILOUTS!” why would you change the rules now? No means no.
FWIW, I agree with DinOR. CIT was the only bank so far that should have been “saved,” IMHO.
DinOR:
Here in NYC if you locate in an enterprise zone they will forgive up to 5 traffic tickets a month per vehicle…unless its really stupid like in front of a fire hydrant. That can add up to some serious money if your business is a service one.
YET to see anyone here stand up for small biz. We’re all on the same side of the table w/ Wilbur Ross
aNYCdj,
Well! See? What are you whining about?! With perks like ‘that’, why… you’re assured to be a success!
I just think we’ve fallen prey to some serious group-think and pretty broad generalizations when we’ve gone so far as to even describe personal relationships ( husband, wife, daughter, son ) as “Ponzi’s!”
While we’re throwing Realtwhores ( TM ) why not the lenders that were such willing accomplices? If ‘them’ then why not the smaller banks that lent to ‘builders’? ( Fair ‘enough’ so far )
But sorry, when we’re willing to throw the job shop/specialty shops and countless ‘other’ small employers under the bus until they come out the other side, then gee, gosh, sorry. No, it IS “destruction for the sake of destruction”. I know it’s grand sport and all but some of us need to check the attitude.
I thought that was when you tossed out your 40 year old wife for two 20 year old hotties
when we’ve gone so far as to even describe personal relationships ( husband, wife, daughter, son ) as “Ponzi’s!”
I had an enjoyable Halloween weekend DinOR and I hope that you and everyone else did.
Had fun w/ NYCityBoy and his wife, they added a lot of life to a large party otherwise populated mostly by the over-65 crowd.
Great to hear you all had a fun get together.
As it turns out, lending money to small business doesn’t create anywhere near the sort of political capital as oweing money to big banks. Who coulda known?
Jim A,
And that was my whole point. Here we are ( and I understand everyone has had a belly-full of bailouts ) but without a mechanism in place to get capital to small bus. how are we going to -ever- recover?
I realize CIT is hardly without sin. Going 90% LTV isn’t very bright. But are to assume the SBA is going to fill the void they left? If that’s the case, we’re in real trouble.
Also, keep in mind that letting CIT fail is part of the Vampire Squid’s (Fed/Goldman Sachs/JP Morgan/etc.) plan. Destroy small businesses, then gobble them up and enjoy the rising unemployment. Unemployed people = poor people = people who need to borrow money to survive = more serfs for Megabank!
Isn’t Cit Citi?
No.
No.
However Citi is in a world of hurt.
Citi is C
Lady Bountiful strikes again!
http://www.cnn.com/2009/POLITICS/10/30/obama.hiv.aids/index.html
We really needed this, right?
Is there even an unseasonable time to do the right thing?
And let’s also let them in with leprosy, small pox,swine flu and exzachery desease.
ED ZACHARY!
Heck, let’s bring in every gimp and lame-ass with the most horrendous, weeping and oozing pustules. The worse and more contagious the disease, bring it on! The more vicious the culture, we’re here for ya! (Man, was I ever pissed when that student body beyatch at Richmond High started whining about how everyone was focused on the negative of the gang-rape and how they were the future leaders. I mean, geez, she sounded like she wanted a marching band, awards and prizes for Gang-Rape High!)
Let’s pack every orifice in every building in Washington and Wall Street with TB and Ebola victims. Hey, Nancy, fun for the entire family! Boo-yah!
How about bubonic plague, I’m sure we can resurrect that, too. What about scrofula? There must be someone somewhere who has scrofula we can bring in. If they’re out there, Lady Bountiful will find them and make papal decree to import them as soon as possible.
Nobel Peace Prize my patootie. LOL! If that wasn’t lipstick on a pig, I dunno what is.
I know some HBBers have been waiting for the DC housing market to follow the leads of CA/FL/AZ/NV, but….
Nation’s Capital Beats U.S. Housing Slump as Obama Budget Grows
Nov. 2 (Bloomberg) — Demand for new homes is growing faster in the Washington area than in any other major U.S. city as existing inventory shrinks and a record $3.52 trillion federal budget fuels the local economy.
Builders took out construction permits on 4,442 single- family homes in the Washington metropolitan area in the third quarter, up 11 percent from a year earlier, according to the Census Bureau. Nationwide, permits fell 17 percent.
The federal budget rose 18 percent this year to $3.52 trillion and is projected to grow to $5.3 trillion by 2019, according to the Treasury Department. NVR Inc.,Toll Brothers Inc., Hovnanian Enterprises Inc., Pulte Homes Inc., KB Home and D.R. Horton Inc. are buying land and reporting sales growth in Virginia, Maryland and the District of Columbia, anticipating job and home price gains in the region.
“It’s good to have a rich uncle and the federal government clearly isn’t spending less,” said Stephen Fuller, professor of public policy and director of the Center for Regional Analysis at George Mason University in Fairfax, Virginia. “We’re on a rebound much faster than other locations because of increased spending to manage the economy and to manage two wars.”
About 15 percent of all federal procurement goes to the Washington area, Fuller said. In the latest example of federal largess, the administration on Oct. 29 endorsed plans to extend an $8,000 tax credit for first-time homebuyers, which is scheduled to expire Nov. 30.
Price Rally
Prices of existing homes in the Washington region climbed each month from March through August, gaining a total of 7.8 percent, as measured by the S&P/Case-Shiller home price index. The index for the nation’s 20 largest cities rose 4.8 percent from its low in April.
In Fairfax County, Virginia, the most populous county abutting the District of Columbia, September prices surged 12 percent from a year earlier to a median of $365,000, according to Metropolitan Regional Information Systems Inc. The number of total listings fell 28 percent.
the election of the obama adminstration based on its rediculous “hope and change”, “yes we can” mantras was the biggest falling knife in the history of man.
(mccain would have been just as bad)
I dont know why anyone would want to live in D.C. My sister lives up there and she loves it (she’s also single). I had a chance PCS there, I said no, I would rather stay at Bragg. Too crowded, too expensive and getting more crowded by the day. The cost of living is outragous. I would like to visit, but to live there, no thanks…
It’s simple actually - people are attracted to power and money, and that’s the epicenter (along with NYC).
I did see an article recently how DC is very, very big for the singles scene, and I believe it.
Single scene in DC…hmmm. I suppose there are lots of singles. But singles you want to, uhm, date? Not so much. Think of the hottest 5 women (or men) you know from college. Any of them move to DC after graduating?
DC is where the nerds go to write 2000 page health care bills. Yeah yeah I know, I’m a horrible, shallow person who doesn’t understand that beauty is on the inside. Blah blah.
Nerds become a lot more attractive when you’re over the age of 30. Some of them even look better.
DC has epic high aids (I’ve heard).
Um, clearly you have never been to the dc area with comments like that. That area is overflowing with hot women.
Yes, they’re called ‘escorts’ ( and for a reasonable fee..? ) Just ask Elliot Spitzer.
No, I’m sure there are. JK.
Spitzer’s escort took the train from NJ down to DC to meet him.
I hope spitzer runs again……he was kinda stupid in the escort stuff but he was a damnn good civil servant.
I spent the better part of last year in and around DC / NoVa. The area has a lot to offer. Hot women is not one of them.
Spitzer’s squeeze at least took public transportation to meet him. Only cost the taxpayers $105 in subsidy To AmTrac. But, it’s environmentally friendly since Spitzer Didn’t use a condum!!!
I spent the better part of last year in and around DC / NoVa
Maybe they avoided You?
Nailed it, DD.
And not just “hot” - whatever that means, but women, real ones - pretty, ordinary, smart, dumb, skinny, plump, successful, struggling, whatever. Who would bother to listen to that stuff?
Ooooh. Is that your car? Oooooh. I love your 4,500 sq ft house and 3 car garage. Oooooh.
Having lived in the metro Baltimore area for thirteen months, I kinda like it. The people are friendlier and more of them know what a turn signal is than Phoenicians.
I handled the four season climate there. Love the green, and the best months are April and May. I found a good PM bullion dealer in the Lutherville area even.
There is a goldmine of J-O-B-S in the defense/security field, so you too, may like it there Step.
“The people are friendlier and more of them know what a turn signal is than Phoenicians.”
You are talking about Baltimore right? Baltimore MD? Home of the Oriels and Ravens?
The Baltimore where you have to wait a few seconds on a fresh red so that you dont get killed in a T-bone by some a$$hole? Baltimore of the 22″ gold plated rims and car stereos that you can hear in the next county? The baltimore that has roads in such poor repair that I had had to replace three (THREE!!!!) oil pans in the past year?
It is that Baltimore?
Just checking
Baltimore be duh ‘hood, yo!
Baltimore, where you can get a choice of drugs or bullets delivered with your morning paper.
Baltimore, land of free felons, gift-card stealing mayors, and corrupt cops.
Baltimore, land of endless, burnt-out rowhomes and lifeless streets, where water mains burst monthly.
Baltimore, a place where the drugged up locals will stare at you in your passing car with raw hatred even though they’ve never seen you before (been there, seen that.)
Ah, Baltimore!
Stpn2me
Now I definitely know that you’re sane. I admit that some jobs require living in the DC area, but it wouldn’t be my choice. We visited in 1970 and saw almost everything care about seeing. We did miss Arlington which I would like to see, especially the VietNam Vet Memorial. When my daughter visited several years ago,she asked what she could bring back for me. I told her “Just
a picture of the Memorial.” My husband is a VietNam area veteran, so it holds a special place for me.
It really was a long time ago for you. The Vietnam Vets Memoria is nowhere near Arlington. “The Wall” is right next to the Lincoln Memorial.
DC is essentially a crowded city like any other. But I will give credit for something: they are doing lots of urban infill and gentrifying the nasty parts of the city. I see nothing wrong with wiping out the blight so that people who work in the city (a lot) can live almost within walking distance.
I’m looking forward to visiting DC this weekend. I love visiting the monuments and museums.
I guess it’s up to me to defend DC. We’re not all here for the power. This fall has been so gorgeous, I think if you went for a bike ride on the capital crescent trail you would see a different side to DC. You could bike down to Georgetown, lock up your bike and rent a kayak to take out on the Potomac.
We live here because it’s my husband’s home town, so through him I see a very different DC:
Lots of friends and family around, and yes they are nice, normal non-lobbyists.
Free museums.
Beautiful fall, lovely cherry blossom spring (I’m not going to try and sugarcoat the summers)
Short drive to great historical sites: civil war battlefields, Harper’s Ferry, Annapolis etc.
Close to beautiful, diverse geography, farmlands, mountains, bay and ocean.
Great parks: Rock Creek, Sligo Creek etc.
Great schools in NoVa and MoCo — also county services such as fairs, libraries, pools etc.
Informed citizenry — lots of people working for non-profits, national organizations, international ones.
Diverse population — not just black and white, but Vietnamese and Ethiopian and Guatemalan etc.
Great ethnic food in the burbs — see above
What you said goes for many cities in the US, where it doesn’t cost $800K for a 3 bedroom house.
Atlanta:
Within 3 hours of Smokey Mountains National Park, 4 hours from the beach, 2 hours from the GA Mountains with fall foliage as far as the eye can see and you drive there by going through a diverse set of farmlands.
The Hooch is great for kayaking, floating, canoeing etc. Two lakes great for boating within an hour away.
Informed citizenry: Georgia Teach, Emory U, two of the top colleges in the country. Atlanta is #7 for cities with most college grads per capita. Not sure how working for a non-profit makes you more informed than for profit. Speaking of which Delta, UPS, Home Depot, AT&T Wireless, Coke, Cox Communications, CNN/TBS/TNT, Weather Channel all HQed in the city or immediate suburbs.
Cobb County school district, one of the country’s best.
Diverse population. And as an added bonus we’re about to elect a white woman mayor in a city that is 60% black. Try that in DC.
Civil War history… Kennesaw Mountain is 10 miles away. You can’t throw a rock without hitting something important that happened in the War of Northern Aggression around these parts.
Umm, kind of aggro response, huh Eddie?
I wasn’t claiming DC was the greatest city on earth, I was just pointing out its positives to people who said they couldn’t understand wanting to live here.
I would take the time to explain why working for a non-profit — whether it be gun rights or abortion rights — would make you more informed than your average retail/corporate worker, but I have to get dinner on the table.
Also, not sure how a majority black city electing a white mayor speaks to diversity, but whatever.
I’m not going to knock Atlanta, I know a lot of people like it, but it’s not for me.
Stepn, one HUGE DC attraction is JOBZ. Particularly if you are of middle age. This is the only area of the country where private sector age discrimination does not run rampant.
With one more child to fledge and get off to a good start - e.g., out of high school, and into some kind of useful skill whether it is trade school or college - the above is worth more to me than somebody in your position can imagine. By that, I mean ’steadily employed for the past fifteen years’.
In my experience, there is nothing worse than not being able to provide for your child
In my experience, there is nothing worse than not being able to provide for your child
I agree….
But I would rather be a farmer than live in D.C. It’s like florida, nice to visit, hell to live there..
hell to live there..
Maybe for you stpn. Not everyone likes the same things.
Just wanted to share that with you.
And not everyone thinks being a farmer is horrible. Even though it’s hard work.
biggest falling knife in the history of man ??
Just tells you how disconnected the republican party is…The neo’s have taken control of the party and now have reduced it to cult status…
Yeah but it’s a cult that will win the VA governorship and just might pull out the NJ win too. Or do you subscribe to the Gibbsy theory that these elections don’t mean much (which is why Obama has spent the last 3 weeks practically living in NJ)?
neo-con cult? sure..
liberal democrats a cult? you betcha…my friend actually named her daughter who was born the week of obama’s inaugeration “Hope” after his campaign.
unfriginbelievable both sides are for “their guy”…so much they both support corruption to the nth degree.
Politics = corruption. Always has always will. Might as well try and get your guy in to make sure the corruption benefits your side of things. Naming your kid after Obama is creepy.
Hope is a nice name, regardless. A block away lives a 5-year old girl named Liberty.
I mean a block away in my neighborhood, lives a 5-year old girl named Liberty.
Uh-ohh. And HOW would you know that?
She lives a block away in a neighborhood where a lot of us know each other. Her mom and I chat now and then. Sometimes when I’m working in my yard, they stop to look at the plants and the birds at my feeders.
I think it’s a cool name. When you have a kid named Liberty, you don’t need bumper stickers.
What if your kid’s name is Rand?
kid’s name is Rand
Damn, it took me a long time to get that one. D’oh.
but, Ron didn’t name his son after Ayn. They named him Randall, and Ron says the shortening to Rand had nothing to do with Ayn.
Dang, I didn’t get that one after all. Double d’oh! Shoot. I guess I need bumper stickers and name tags and forehead stickers for all!
By golly az, you’re right!
youtube com/watch?v=oD-R_OeP6tU
I live in the DC area, and own a house. I moved from CA in 2006 and sold at the very tip-top. When I relocated here I thought about renting for a while, but went ahead and bought for various reasons. I was aware of a housing bubble though not the scale of it, and there were enough positive benefits to offset the downside - I thought.
After becoming aware of the scale of the bubble, and seeing prices here drop quite a bit - I decided that was a bad decision - I should have rented for a while after all.
Now I’m thinking - maybe that wasn’t so bad a decision after all. Prices did fall, but indeed not as much as other bubbly areas, and are looking like they’re going to have a much higher bottom than other areas of the country, as the article suggests. For-sale inventory is down quite a bit, and sale prices have come back up quite a bit as a percentage of asking prices - historically 97-98%, peaked at 100% in 04-05, bottomed at 92% in 07, now back up to 95%.
I’m sure that we’re due for another leg down this winter, but what I’m seeing is that it’s definitely true that prices are holding up much better here than other areas in the country.
In the end I think DC will even out with other areas, though in the long run I think it’ll be a case of other areas “catching up” to DC due to inflation, rather than DC trickling down. The federal government just isn’t that big on scaling back.
Well, packman, you are the one silver lining in the DC housing news. Mazel tov.
FWIW, even though I’m benefiting from the general government growth and the housing stimulus, I’m against both, because:
- It won’t last (at least the stimulus part)
- It ain’t right
Way back in the early 60’s when I started looking for work, a federal government job paid somewhat less than an equivalent job in the private sector. But the better benefits helped make up the difference.
Now a federal government job pays MUCH more than the equivalent private sector job and the benefits are also MUCH better. Plus no layoffs to worry about and unless you kill your supervisor or do something equally egregious, you’re essentially fire-proof.
No existing political party will ever have the cojones to reduce the size of the federal government. Therefore, the D.C. area will continue to thrive.
Bill in Carolina,
So well said. When I first got out of the service in the late 80’s, the stock mkt. had just crashed and we were in recession for some time. Getting a job ( particularly in Portland, OR ) was… just about impossible?
At the time, the full/time techs at the air base were making about $11-$14 an hour. Given the bennies, it was just about a wash w/ the private sector. Man, when I learned how much those guys are making NOW it’s almost scary! There are plenty of them making over $30 an hour w/ bens. that have held their ground over time whereas in the pvt. sector, they’re all but a distant memory.
Probably should’ve signed up huh?
Funny this should come up today. An article from this morning’s Washington Times:
CAUSEY: Retirement jackpot is signed into law
Federal retirees who would like to get back in government and current workers anxious to become retirees both hit the jackpot in the Defense Authorization Act signed into law last week.
The new perks were among half a dozen benefit improvements embedded in the giant defense package. The Obama administration initially opposed several proposals on cost grounds and stripped them from the so-called tobacco bill. But insiders say the White House agreed to accept them if unions agreed to go quietly along with 2 percent pay raise for federal workers next year.
(see article for details)
where’s the jackpot?
Comment by DinOR
2009-11-02 13:44:42
Bill in Carolina,
So well said. When I first got out of the service in the late 80’s, the stock mkt. had just crashed and we were in recession for some time. Getting a job ( particularly in Portland, OR ) was… just about impossible?
At the time, the full/time techs at the air base were making about $11-$14 an hour. Given the bennies, it was just about a wash w/ the private sector. Man, when I learned how much those guys are making NOW it’s almost scary! There are plenty of them making over $30 an hour w/ bens. that have held their ground over time whereas in the pvt. sector, they’re all but a distant memory.
Probably should’ve signed up huh?
———————-
You can’t blame public workers for these disparities. They managed to maintain a decent because their unions stood up for workers’ rights. It’s 100% the fault of private sector workers because they fell for the myth that “unions are bad” and allowed their employers to strip them of their wages and benefits. It’s the apathy of private sector workers that caused their problems. Don’t blame it on the public workers.
The above should read:
They managed to maintain a decent standard of living because their unions stood up for workers’ rights.
I think there may be a couple more good people in the DC area.
Too many Fed employees.
“Now I’m thinking - maybe that wasn’t so bad a decision after all. Prices did fall, but indeed not as much as other bubbly areas, and are looking like they’re going to have a much higher bottom than other areas of the country, as the article suggests.”
translation: my area is “special”.
LOL - OK whatever.
One of the things that I think some people on this blog have gotten wrong is the belief that “all areas are the same”. Well - they’re not. At least not in the short runs, and in many cases the medium runs. In the long run yes, for the most part they are, but even then not necessarily.
One need only look at Detroit for a prime example. Utah and Hawaii have had vastly different price swings than the rest of the country over the past 20-30 years, for various reasons. Areas like Houston and Austin, and even San Diego have been fairly different than most. Different areas *do* have different characteristics of housing price changes, driven by the success of the primary industries located in that area. San Jose has now been “different” than the rest of the U.S. for 35 years and running. Care to venture why?
If we manage to get some fiscal conservatism back into the federal government, then yes I do expect the DC area to go back to par with the rest of the country, but I seriously doubt that’ll happen anytime in the next 10-15 years, and certainly not before housing prices reach a bottom, within the next 3-5 years probably (in nominal terms).
So yes - DC is different, for now and for the foreseeable future. Ignore it if you want.
The only things I pay attention to are rents vs. median prices, and median prices vs. median incomes. Polly has shown, even today, that renting is remarkably cheaper than buying in your area. Also, median incomes don’t support median house prices. Bubble central.
As a life-long DC resident (ugh), I can understand what you’re saying and I agree with it to some extent.. but I’ve watched housing prices in this area double and triple over a period of 5 years, and that just ain’t natural. It cannot be explained away by government spending.
Believe it or not there was a period of time not too long ago where you could buy a condo downtown or well inside the beltway for $100k. And there was a time where a nice suburban home could be purchased in a ritzy area for $200-400k. Those times will return, IMHO, at least to inflation adjusted values.
Federal spending has decreased before and hurt this area just like everywhere else.. and it will happen again. I’ve seen it.
“If we manage to get some fiscal conservatism back into the federal government, then yes I do expect the DC area to go back to par with the rest of the country”
Exactly. Right now you can buy with 3.5% down and rather flimsy documentation of income and interest rates are in the basement. If one and three change, DC will fall just like everyone else will. By the way, when I got here in 2005, everyone told me that housing was so expensive because DC wasn’t just dependent on moderately paid government jobs anymore, there was real money out there and the economy was diverse. Well, you can’t have it both ways. We can’t have a huge up tick in prices from a diverse economy with high paid private sector jobs and be immune from decline because all the purchasers have safe government jobs. Doesn’t work that way.
Private contracting jobs were sky high under Bush. That will fall back. My office has been hiring, but they are experienced lawyers (plenty of grey hair, wrinkles and guys who wear suits to a business casual office becasue that is what they have in their closets) who are starting at under $100K - not enough to buy a $1.5 million house in Potomac even with two people earning that much.
DC will fall unless inflation hits HARD.
And all the garbage about no candidate being different than any other? I don’t really buy it. I think Mitt might pull a “capitalism requires businesses that make mistakes to fail” agenda. Might. He didn’t do it in MA, but I think he might try it if he ever became president. Just an instinct, and I don’t know if he could get elected, but I think strict doctrine appeals to him. Plus the idea of being a hero to a conservative movement. McCain wasn’t really interested in economics and would have done what he was told (more corporate welfare), but Mitt is interested. Again, just a guess.
“Federal spending has decreased before”
When? Must have been well before I was born.
When? Must have been well before I was born.
Well, we figured you must’ve been a youngster:
1983 Outlays = 23.0% of GDP
1991 Outlays = 22.0% of GDP
2000 Outlays = 17.8% of GDP
So yes it has happened.
(Currently it’s running about 25% of GDP)
I’ve watched housing prices in this area double and triple over a period of 5 years, and that just ain’t natural. It cannot be explained away by government spending.
Oh absolutely. The bubble here was almost on the scale of CA, FL, and NV, and began way before government spending ramped up.
Part of it actually was driven by telecom, starting in the late 1990’s - Verizon, Sprint have major facilities right down the street from me, and I know there’s a fair amount around Germantown, Columbia, MD and such (Ciena and bunch of others). That’s fading somewhat though.
Additionally was a lot of new post-9/11 military spending; with this of course being the epicenter of that.
All of that along with the general national bubble combined to make this a *very* bubbly area. It has gone down, and will continue to do so; but less than most of the U.S. until government spending ramps down, back to levels of 18-20% of GDP.
if i make 100K and spend 25K and next year i make 200K and spend 40K…my spending still went up.
As a % of GDP…whatever. I’m interested in either nominal or real terms. In that case, spending always goes up. Sometimes by a lot, sometimes by a helluva lot. But always up. So if you’re pinning your hopes of DC housing crashing from a decrease in spending you’ll be very disappointed.
Bink, Griz & Packman,
Bink, I’m also a life-long DC/NV/MD metro resident. The government, association, NPO and fed contractors are the core business and employers here. There really is no other metro area with a core business environment that comes close to DC.
And so Bink, I agree with you…over recent decades that mix of fed employees and NPO’s kept a relatively stable housing market. A huge wad of middle-class folks living middle-class lifestyles.
Housing appreciation of 200 to 300% was something that only happened in CA. And Packman - in 2006 you bought at the top - not knowing exactly where you bought, I would surmise there is still a strong downside to come.
But you do seem to have your eyes-wide-open and recognize that downsides are likely. DC was one of the last major markets in the run-up and the zombies that overpaid or over-borrowed are delusional.
I’m just seeing it now first-hand as investors including doctors and lawyers bought up waterfront cottages here on the bay that sat dormant waiting for buyers 15 years ago at 150K. Suddenly in 2001, these shacks were worth 500K - knock them down, spend 400K on a new house and value it at 1.5MM.
It’s now 2009 - some have tried to sell or flip. No takers at 750K let alone 1.5MM. Now some in foreclosure. I sit comfortably in my 80yo shack (very cozy and affordable) and watch these ass-clowns scurry like rats at the realization they are drowned.
DC has a long way to go - it will be slow and painful for the stupid.
It’s so simple it’s stupid…incomes don’t come anywhere near supporting valuations.
translation: my area is “special” ??
translation: my areas housing market is insulated due to the perceived dependability of government jobs…
You’d be surprised. Just this weekend I was painted into a corner defending some of my past career choices ( and although I was ultimately WELL proven to be accurate… ) it was a–long-time-coming.
My old reserve base up in Portland was on the chopping block long before I even arrived. This was the late 80’s so the economy was almost as f’d up as it is today. Not really.., but pretty bad.
The rumor mill/dead pool didn’t see us lasting past the 90’s but they managed to eek out an ‘existence’ until 2001! ….Just shy of what it would have taken me to retire. So guv jobs can hang in there long after they cease to make sense. Years after.
Government jobs ARE dependable. It’s those contractors that need to watch out.
dependability of government jobs
FWIW - Every single county in the DC area (about 12 within commuting distance) have less than 6% unemployment right now - some have less than 5%. DC has over 11% actually, though traditionally is very high - very few people who work for the government or government contractors actually live in DC.
Not saying that’s a good thing, just that it is what it is, and that’s in large part what’s keeping DC area prices from falling as far as other areas in the country.
When/if federal spending gets reduced significantly, that’ll change. That’s not a trend I see happening anytime soon though.
I got asked again this weekend when I was going to buy. I just said I wasn’t interested and since the companions were fairly intelligent, mentioned that buying at a teme of historically low interest rates and miniscule down payment requirements was a bad move for someone with a big downpayment saved. They let it pass once I added that it was a different thing for people with kids, etc. but I was single and an apartment was fine for me. I don’t think the last part is at all relevant, but there comes a time when you can’t let people know how little you think of the thought process they went through before buying if you want to keep friends. I could rent a house around here for $1600 a month that I couldn’t come close to buying for $450K. The numbers just don’t add up.
The average housing price in my neighborhood is still $800k, average household income is still around $100-150k.
It doesn’t get much simpler than that. I’m not sure why packman thinks these ratios are OK for DC but not for other locations, simply due to federal spending.
$150K a year = $12,500 a month.
$700K mortgage at 5% is $3700. At $1000 for tax, hoa, etc and it’s 37.6%.
And we all know interest rates will stay low forever. A permanently low plateau!
these ratios are OK for DC but not for other locations ??
Bink…I guess thats what I was trying to suggest in my post above “perceived dependability of government jobs”….I speculate that people employed by the Federal goverment in DC and the ancillary services that that depend on the same are willing to push themselves to any limit to purchase a home because they calculate no risk in losing their jobs…Just my guess…
and it’s 37.6% ??
Of which 90% + - is tax deductible…Effective percentage after tax is more like 22% + -….
High state and county taxes mean you are bumping up against the alternate minimum tax, big time.
Take home from the $150K income is probably close to about $6K assuming that there is a reasonable chunk of money going to the 401K. That $3700 is over 63% of take home before considering the tax effect which is of limited benefit because of alternative minimum.
Too much. You can rent the same place for $2500, easy - probably a lot less.
But the rest of that 150K income is taxed. What percentage of net take home pay is that 4.7K monthly nut? 50%? The SS/Medicare Tax alone is 1K per month (assuming dual incomes). And then there’s our friend, Mr. AMT, who will make sure that upper middle class folks pay their fair share of oncome tax (unlike the super rich).
It might work if you have no other debts. That means no his and hers BMWs/Mercedes/Audis. No annual trips to take the kids to Disneyworld, no hitting the mall, etc.
Oh right I forgot the tax deduction is to always be ignored.
Although maybe not.
$150K = 28% rate
On a mortgage of $4700, at least $4000 will be deductible the first few years. .28*4000 = $1120. 4700-1120 = 28.6% of gross after tax deduction.
Or simply put….quite affordable.
In Colorado - add in no child care expenses, no student loans, no car payments, etc.
Polly in what universe does $150K translate to $6K take home pay? The ATM is a 28% flat tax rate. Even with that and $0 deductions - which the ATM allows leff of, but still allows some - you’re at well over $8,000 net pay. And more realistically $9000 given the bare minimum of deductions.
I took my own gross salary and divided by 12. I took that number and divided it into my take home for two pay periods which is the take home for most months. Then I multiplied that ratio by 12,5000 to guess at what a person with $150K salary would take home most months taking into account most of the stuff that comes out before you see your paycheck in the DC area (FICA, fed taxes, state taxes, county taxes, 401K contribution, health insurance, small flex spending account contribution, etc.). If it were one person earning that that salary, the FICA would be a bit less (on a percentage basis because you would hit the max) and there would be a few extra deductions/exemptions, but the insurance would be a lot higher and, hopefully, they would be doing a spousal contribution to a retirement account and more contributions to the medical flex spending account.
It is not perfect, but it isn’t a bad estimate. 50% is about all you can get to take home. And the deduction from the interest and taxes pushes you up against the AMT very quickly when there are state and county income taxes to deduct.
By the way, the real number was $5840, but I rounded up on the assumtion that the hypothetical person doesn’t contribute to a pension, make charity contributions out of their pay check and pay union dues.
Union dues? Pension? I’m sorry I thought we were talking about 2009 not 1959.
Let me try again. The AMT is 28% flat tax on AGI. FICA, assuming you are an employee is 7.65%. That means the top rate you can pay is 35.65. Out of $12,500 that leaves $8162. Your $5800 is ridiculously low.
And this is worst case scenario if every single deduction you have is disallowed by the AMT which is highly, highly unlikely. And that is is the $150K is split in a way that both earners are subject to the full FICA. If it’s 120/30 or 150/0 the SS maxes out at $109K which means the $40K above that is only subject to 1.65% medicare which adds another $206.
Polly,
Your numbers are dead-on. 5x gross income was a huge stretch in the best of times when even nominal appreciation could be envisioned. Eddie’s numbers and “affordability” statements are at the core of the HBB issue - and will be proven as foreclosures and bankruptcies in Eddie’s affordability window continue.
Eddie, I’m not sure where you fall in all of this…are you trying to justify your bad investment/affordability decision…are you a desperate LO…or are you just clueless?
FWIW - I’m not what you would would consider a clueless renter - I’ve owned a home (well almost) for nearly thirty years and will tell you that your numbers are a clear path to bankruptcy.
Only 20% down, 2 - 2 1/2X income and at levels that renting reflects purchasing will restore the housing market.
Right now, the renters on the sidelines are the smart buyers in the future.
It seems we have a reading comprehension issue here. Nowhere did I say that current housing prices are “OK”, or that DC was not in a housing bubble, etc. All I said was that unless federal government spending drops significantly, that the DC area won’t see as drastic of a bottom as the rest of the U.S., relatively speaking. I’m talking about % drop, when compared with other areas that experienced a similar % gain on the frontside.
Geez folks. Let’s stop building illogical strawman conclusions please.
No strawmen are being burnt. I just interpreted this quote:
In the end I think DC will even out with other areas, though in the long run I think it’ll be a case of other areas “catching up” to DC due to inflation, rather than DC trickling down. The federal government just isn’t that big on scaling back.
To mean that you didn’t think DC could or would face a significant price drop. We disagree on that.. and it’s why I mentioned the disparity between incomes and sale prices. And I don’t consider 10-20% a significant drop.
To mean that you didn’t think DC could or would face a significant price drop. We disagree on that.. and it’s why I mentioned the disparity between incomes and sale prices. And I don’t consider 10-20% a significant drop.
I do mean that, but relative to current prices - not the peak. Prices have already fallen in this area 30-35%.
I think they’ll fall some more, but not a lot, in nominal terms. I should note that my belief in this is based in part in my view that there’s significant inflation coming within the next few years, with a particular focus on housing, with regards to government efforts to prop up prices.
We shall see.
30-35% seems a bit of a stretch. If you focus on far outside the beltway you might come close to those numbers, but the interior excluding PG County hasn’t fallen anywhere near those amounts. Not from where I sit.
I’m going both by my observations - from Loudoun County, and by the Case/Shiller numbers for the DC metro area:
2006 peak: 251.83
2009 March: 167.89 (33% drop)
Current: 174.66
(seasonally-adjusted numbers)
I believe you’re right in that the outer suburbs have dropped slightly more than DC proper, though not sure. Some areas - e.g. Manassas, have gotten it much worse.
Case/Shiller though uses the metro area as a whole, including inside the beltway.
I think the 30% to 35% price reductions are in the neighborhoods where the most fraud/ninja loans were going on. A friend in the office is looking at foreclosures with her husband (they are in no hurry) and says they all have illegal rooms in the basement and were clearly being used by many more people than the fire code allowed.
I don’t think they are looking all that far out, but a house in terrible shape that will require lots of work just to get an occupancy certificate will certainly be cheaper than its last sale price.
Houses in terrible shape are all that one can find in the “affordable” area of the market in central Maryland. Old, WW2 or Post-War era stuff, most of it small, in poor condition, but “upgraded” with Pergo-granite-steel (which as we all know balances out every other problem and adds $50,000 to the value of the house) - nothing much worth buying, especially considering the price vs. income disparity.
Maryland, NoVa, and DC will not be affordable for many years, if ever, IMHO.
Sure, prices have dropped 10% around here, but they have a long way to go and the plan is clearly to destroy the currency before allowing affordable housing around here.
Even the tabloids are catching up.
How the Economic Crisis Changed Us
by Michael J. Berland and Douglas E. Schoen
published: 11/01/2009
Despite tough times, 68% of respondents think the American Dream is still within their reach.
The changes in the economy over the past 18 months have had profound effects on the lives of people across the country. Now, for the first time, a new PARADE survey shows just how dramatically Americans’ goals, hopes, spending habits, relationships, and even their attitudes toward trusted institutions have been transformed by the recession.
Do you believe the American Dream is still attainable? Take the poll!
Nearly four out of five respondents (79%) say that they’ve felt the impact of the financial downturn, with one-third saying that the turmoil has had a big impact on their lives. Most respondents haven’t had to turn on the TV to appreciate the scope of the declining economy—they’ve registered its toll in their own faces or those of friends, family members, and neighbors. Sixty-nine percent have lost a job, suffered a reduction in pay, or know someone who has experienced one of these. Close to half have had difficulty making their mortgage or rent payments or know someone who has.
As a result, many Americans have made significant financial adjustments in their daily lives. Eighty percent say that they’ve been “forced to do more with less,” 73% have had to make unexpected changes, and 19% have sought some form of government assistance. Necessity has led 27% of respondents to pursue extra work.
Most people have also cut back on their families’ spending. Common money-saving measures include delaying or canceling vacations (42%), putting off major appliance purchases (34%), postponing or forgoing home renovations (29%), and choosing not to buy a new car this year (28%).
http://www.parade.com/news/2009/11/01-how-the-economic-crisis-changed-us.html
I’m surprised. I figured more than 68% of the public were idiots !!
“I’m surprised. I figured more than 68% of the public were idiots !!”
Hey!…they’re working on it…they’re working on it.
Hi, dave, hear anything lately about Riverbend? Seems to have gone quiet. I think there’s been a Chinese drywall problem there, though. Oh, and Lennard High in Ruskin is busting out with gang tagging on the traffic signs nearby. Hope it doesn’t go the way of Richmond High out in CA. That poor Driggers (old Ruskin family) kid was run down crossing 41 at night just north of the MacDonald’s. From what I’ve read, he wasn’t the sharpest tool in the shed, but a sweet kid. I don’t think they’ve found the hit and run perp.
Hey Palmetto,
Haven’t been to Ruskin in quite a while. Last time I was through there (late last year, early this year??) I was surprised they had built more homes in there… Just scratch my head as I can’t believe anyone would drive through there and still buy. Must be the tax credit being used for the down payments so they get in for nothing. If you want a good laugh look at some of the re listings where they are trying to sell for 100k and last year’s taxes were 5-7k based on the previous purchase price. Unbelievable but I’m sure alot of those folks were included in the above poll.
You still in Apollo beach?
The American dream may be in your reach even if there is 20 years of Japanese style deflation ahead and no growth - and if you are a doctor and who squirrels away your savings in government securities.
and if you are a doctor ??
Your better of (financially) to be a federal employee, a firefighter or in criminal justice of some sort…
scdave,
…maybe? Spending the next 20-30 years agonizing over every budget cut, measure and coming to a State Court near you, lawsuit over super-sized benefits just isn’t my bag.
There won’t be a lot of rest and relaxation for ‘this’ crowd.
One can only hope DinOR but my life long experience is they never have gotten smaller other than on the fringes…
scdave,
http://www.pensiontsunami.com
Does a great job detailing -just- how challenging that arena is SURE to become! I agree though, our small town OR Fire Chief just retired and… he’ll get about 97% of his working wage in retirement.
A lot of public emp. retirees that have leveraged that income to the inth degree are going to get caught w/ their pants down.
Fire Chief just retired and… he’ll get about 97% of his working wage in retirement ??
A good friend firefighter retired at 53 about 4 years ago…Roughly $12,000. per month…His wife also although somewhat less…They are “living large” in Hawaii with a number of other retired firefighters…
scdave,
On $12k a MONTH ( where ‘couldn’t you afford to live? )
Is ‘this’ what we wanted? Were we really ‘that’ much safer? As I’ve said in the past to my FF friends: “If you’re driving down the street and you see I’m on FIRE?! Don’t stop and help me ( I can’t afford you guys! ) Just let me burn!”
$12,000/mo!!!! Holy cow!! At 53 yo he couldn’t have worked much than 30 yrs. 97% retirement? What kind of salary/pension system do they have on the loony left coast? In NYS the most you can get is 78%, 74% for those in the system after 1975.
Its completely out of control Kdad….A god son of mine (31) made over $142,000. last year with overtime…I believe his base is a little over 100k…Not bad for eleven days a month eh…
Krisdad,
I expect those pension plans to go bankrupt sooner rather than later. Basically they game the system by getting overtime for their last 1-2 years. The retirement amount is based on those pay levels. So, it’s a call in system that gets abused.
Not seeing any progress on reeling this in so I assume default is the option.
Wouldn’t be shocked to see a baliout.
I don’t know, the rest of us are expected to put in 45 years, a full 50% more than a lot of the local yocal public pension handouts. This isn’t going to be pretty.
Kirisdad, scdave,
I’ve always kind of used the military as something of a barometer on this one:
50% of -BASE- pay! Not 50% of your flight deck/combat pay, your housing allowance and com-rats etc! BASE pay. True they can “retire” earlier, but trust me, it’s not nearly enough to live off of. Cambodia maybe. Not even the Philippines any more.
( They had a housing bubble too )
In NYS, you have to work almost 40 yrs for that 74%. NYC police/fire pensions are based on the last year of earnings, which is why so many retired after 911. The NYS retirement system is based on your last three (really five) years with a 10% cap between yrs, to prevent padding.
If the “American Dream” is what my parents lived, I see no reason to think it’s dead.
Dad was discharged from the Navy in ‘53 and married Mom, bought a 1000 square foot Chicago bungalow and raised my brother and me. We always drove used cars, vacationed at a low-rent lakefront tourist camp in Michigan, ate macaroni and frozen wax beans for dinner, and our mortgage was burned thirteen years after it was signed. We never felt “poor”. Not for one damn second.
Now if the “American Dream” is a 3500 square foot house with one bedroom, one big screen plasma and one cell phone per child, two new leased cars, a financed ATV and a boat, all before age 30 - yep. That dream is dead. Deader than a picked-over possum at the roadside.
Any news from the Sarasota area? Are prices in the Lakewood Ranch area nearing a bottom, or more pain ahead for sellers? I’m trying to relocate there, and rent or buy if a really good deal is available (don’t laugh!!)
Rent. Rent. Rent. We’ve still got a ways to go and if you’re thinking of buying in Lakewood Ranch, be careful, since it is/was a bubble development. You want to inspect the daylights out of ANY property you purchase there, making sure that Chinese drywall is not a component. Also inspect heavily for construction defects, since much bubble housing was built by unsupervised labor from south of the border.
I track the Sarasota area some, since I’m thinking of moving there someday as well. They’ve had a bit of a spring bounce, but I think it’s purely speculation based on recent price drops. Foreclosure inventory is *huge* there, and prices are still high relative to inflation. They’re in for another leg down, by a lot I think. Don’t buy anytime in the next 2 years at least, would be my advice.
I agree - rent. I saw last week prices are expected to fall another 20% in the area over the next year.
Correct me if I’m wrong, but isn’t Lakewood Ranch a “if you build it…” community? If so, those might not be that most stable in the coming years.
http://www.ft.com/cms/s/0/9a5b3216-c70b-11de-bb6f-00144feab49a.html
can someone explain please?
if there is no time to splain…just sum up.
Borrow dollars at 100 cents per dollar at a zero percent interest rate, pay the dollars back at something less that 100 cents per dollar and pocket the difference.
In the meantime use these borrowed dollars to buy assets that are rapidly increasing in value relative to the dollar, then later on sell these assets for a big profit.
It works well until it doesn’t work at all; that’s when everyone rushes to unload at the same time and a big crash in asset prices ensue.
“if there is no time to splain…just sum up.”
He is referring to the basic ‘Use depreciating dollars to buy commodities’ investment technique. When people all over the world are short or spending dollars to carry or hold long other currencies or commodities, this is known as the dollar “carry trade”. The reason this seems attractive today is that the interest cost to borrow dollars is very small, under 1% to near zero. So not only people with excess dollars on hand, but speculators who are borrowing or selling short dollars, are using the funds to “carry” commodities, oil, gold, etc.
For a while this works and then again there is a time when “unwinding” these carry trades produces the opposite effect of creating selling pressure on commodities and upward presssure on the dollar.
A little splainin’ and a little summin’, you’re welcome.
I’ll say it.
Thank you, cobalt for the explanation.
How’s the Bay area today, SF Gal?
It’s been cooler than normal down here in Mesa, AZ last few days. Right now at 0847 MST it is 61 degrees. And very dry, no rain for weeks and very little since last Spring. Then again, this is a desert.
A beautiful 70 degrees now at 12:44 PST where I live near the coast, tomorrow up to 78 degrees. Some of the inland areas of the Bay Area will get up to 80 degrees. Possible showers on Saturday. We need more rain here also.
95+++ and hot. yesterday, today, tomorrow, and Wed. Hopefully the fall weather returns EOW. upper 80s.
sumsplanation
Thanks C.
(got my tinfoil hat on)
could this carry trade be orchestrated to improve the “to big to fail” balance sheets with the profits made from the trade?
yes
“Could this carry trade be orchestrated to improve the “to big to fail” balance sheets?”
In a domestic sense, you have to think that the Fed believes it can reflate housing prices, stimulate the economy, and repudiate debt burden using depreciated dollars. Based on everything they have done so far, that must be the plan.
My view is that there is so much demand for govt services during a time of falling tax revenues and rising unemployment that the economy is detroyed as the currency depreciates.
In the govt view , a few major banks may be ” too big to fail”, but the flip side is, all of us individuals, families, communities and taxpayers are then “too small to matter”.
In the govt view , a few major banks may be ” too big to fail”, but the flip side is, all of us individuals, families, communities and taxpayers are then “too small to matter”
well said, cobalt
The whole problem with this inflate the problem away is
1. It will cause rising interest rates that force house prices down.
2. If food and fuel prices rise there will be less for manufactured goods, people will consolidate and live in smaller homes or share homes. 3 bedroom home will house 3 families if things get bad enough.
3 bedroom home will house 3 families if ??
Don’t even need the “if” around here…The immigrant & minority groups have been doing this for as long as I can remember…
“to big to fail”
Typo, but I like it!
Here’s a pretty good explanation:
http://www.ft.com/cms/s/0/f3aec6c2-b99e-11de-a747-00144feab49a.html
All of you missed a beautifully executed Princess Bride quote? For shame.
I don’t think this means what you think it means?
Does this make Michael the HBB’s Inigo Montoya?
Do you have 6 fingers on your left hand?
Do you always greet people that way?
Economic Report
Nov. 2, 2009, 10:17 a.m. EST
Pending home sales up 6.1% in September
Rush to take advantage of homebuyer tax credit boosts activity
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — An index that tracks pending sales of existing homes rose a seasonally adjusted 6.1% in September, the eighth consecutive increase, the National Association of Realtors reported Monday.
Pending sales are up 19.8% compared with September 2008. The index is the highest since December 2006. The index rose 6.4% in August.
Buyers were rushing to beat the expiration of an $8,000 federal tax credit for first-time buyers, according to Lawrence Yun, chief economist for the real estate lobbying and advocacy group.
Sales must be finalized by Nov. 30 to qualify for the credit, although the Congress may extend or expand the tax break through April. It takes about one to two months after a sales contract is signed to close the sale.
…
New Savings bond rates just announced for savings bonds purchased the next six months:
Series I: Fixed rate 0.30%, variable rate: 3.06%, total 3.36% annual
Series EE: 1.20%
52-week t-bills are around 0.38% so if there is serious deflation ahead, may as well buy Series I savings bonds. The 1.53% interest for the next six months makes Series I’s even more of a good deal, if you consider that’s like 0.30% per year for five years.
Savings bond yields never are less than 0%.
“Savings bond yields never are less than 0%.”
What if inflation over the next six months turned out to run at 2.53% while the series I only pays you 1.53%; wouldn’t the real yield be -1% (less than 0%)?
PB, the CPI-U rate is below the real inflation rate. But this is why you need to also buy precious metals bullion coins to hedge for real inflation.
In the future, the CPI-U rate may be 7% while EE bonds yield 5% anyway.
Are the EE bonds inflation indexed? I used to own some, and they had an inflation index backstop at the time; not sure whether they have taken that feature out?
No they are not inflation-indexed, but they are guaranteed to reach face value in 20 years (used to be 17 years). I stopped buying them when they increased the years. Automatic 4.2% annual rate of return for 17 years.
Buying $1000 worth this morning was a good thing, in light of the spot price of gold going up to $1065 tonight (Taxifornia time).
Talking to an old friend this weekend who is a commercial contractor in northern CA, he believes that commercial real estate prices will be coming back in 3-4 years. Nevermind the fact that they haven’t even bottomed yet. I didn’t question him too much, because I could tell it was a touchy subject. The Kool Aid is still flowing amongst those in the industry.
Maybe some of these people have bought the idea that perception is reality. If they are convinced that things will return to the way the were a few years ago, then they could feel that way.
commercial contractor in northern CA ??
What area of N. Ca. ??
Bay area all the way over to Sacramento.
Yeah well, three to four years is farther out than I can see but I am betting that it won’t…There is a new normal…Much different than the old normal…Just not quite sure yet what it looks like…
The stock market seems poised between a plethora of bad news the MSM avoids mentioning and a bevy of good news that seems manufactured.
Nov. 2, 2009, 9:51 a.m. EST
US Stocks Open Higher, Led By Financials, Materials; DJIA Up 23
* Bulls should start playing defense (12:01a)
* Taking the long view (12:01a)
* Tokyo slump leads Asia lower, Shanghai jumps 2.7% (5:01a)
* E.U. set to demand further RBS asset sales (10:06a)
By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks opened higher Monday as better-than-expected earnings and a forecast boost from Ford helped encouraged some buying following Friday’s weakness, although it recovered only a tiny portion of Friday’s tumble.
The Dow Jones Industrial Average was recently up 23 points, or 0.2%, to 9735. Financial components Bank of America and JPMorgan Chase led the gains, with Bank of America up 1.7% recently and JPMorgan up 1.1%. Alcoa and General Electric also rose 1%, though the Dow’s gains were held in check by a 1.7% slide in Intel.
Monday’s gains come as the market tries to recover from a particularly volatile week that saw the Dow surge nearly 200 points on Thursday thanks to better-than-expected U.S. economic expansion in the third quarter, only to be completely wiped out by a 249-point plunge Friday that showed the fragility of the market and how quick it is to start doubting any good news. Investors are scrambling to figure out whether the Dow’s 48% climb from early March can be justified.
“They’re going to be looking at every possible nuance to see where we stand with respect to recovery,” said Bruce McCain, chief investment strategist with Key Private Bank. “We’re watching consumer spending but effectively the most important issue is we need a spending catalyst that drives inventory rebuilding and some expansion of work hours to get this recovery off the ground.”
…
It is really hard to sort out where the market pricing should be.
So much bad news out there like the CIT and other deflationary news.
Plenty of upside surprises like F.
Then we have the stimulis bill creating noise along with lots of printing.
Tough to figure all this out. All this along with lots of moves to promote stability at random times and places?
I wonder if people don’t get that stability means the banks stay on top and ground this country into some kind of sterile mess?
It looks like the stock market is rocketing up, again. 130 point gain so far- how high will it go?
It went up 130 points, then got stucco…
Got stucco indeed. It actually went negative, recovered, now it’s heading down again… Who knows where it will end up today.
“If they can’t buy a home for lack of a stove, can they really afford a mortgage?”
Realtors roll up sleeves to move property
By KIMBERLY MILLER
Palm Beach Post Staff Writer
Sunday, November 01, 2009
It’s practically real estate lore, a time when housing contracts slid through the approval process like residents into a new gated community and real estate agents had little more to do than pick up the phone to settle a deal.
Today’s Realtors are working harder than ever to secure their clients’ loans from bashful banks and seal short-sale contracts that can take months to finalize.
Above and beyond
In this market, Realtors have:
Installed stoves.
Paid for and laid new carpet.
Funded a/c repairs.
Cleaned up after animals.
Helped landscape properties.
Giving up a smidge of commission is only the beginning.
When an appraisal is at stake, Realtor-fronted fixes to roofs, electrical systems and air conditioners are no longer taboo.
In this recovering market, agents have purchased and installed stoves - a required appliance for a Federal Housing Administration loan - paid for new carpet, cleaned up rat feces and helped landscape properties when a deal was on the fence.
If the sale ultimately falls through, the Realtor is out the elbow grease and cash.
“We used to have a market where people were just writing offers and buying homes and you didn’t have to do anything because it all just happened,” said Brian Paul, CEO of the Realtors Association of Palm Beach County. “Now, in this market, people are having to really work.”
Palm Beach Gardens Realtor Craig Fialkowski knows all about that. He personally ripped out and repaired a moldy wall in a kitchen in October before it was appraised.
“I told the buyer, ‘Just get some drywall and a sheetrock knife, and he said, what’s a sheetrock knife?’ I knew I had to help,” Fialkowski said.
He also recently paid $350 to have an air conditioner serviced in a home where the sale eventually fell apart.
“Lately it seems like everyone is going out of their way to get transactions done,” said Fialkowski, who works with Herman Group Real Estate.
The extra effort coupled with the recent rebound in the market appears to be paying off, according to a September sales report from the Florida Realtors.
Palm Beach County single-family home sales were up 43 percent in September compared with the same period in 2008. Condo sales were up 30 percent.
At the same time, median single-family home prices in Palm Beach County were down 17 percent to $242,900. Condos dropped 24 percent to $106,700.
“People who otherwise couldn’t afford a home can now afford one,” Paul said.
But sometimes, just barely.
That’s when a Realtor has to judge risk vs. reward when it comes to putting money up to make a sale, and whether it’s really the best thing for the borrower.
“If they can’t buy a home for lack of a stove, can they really afford a mortgage?” asked Curtis Lowe, president of the Realtors Association of St. Lucie County. “I tend to try and help with the bottom line, but have I bought a stove? Sure, that’s a good return on my investment.”
Jennifer Hernann, of Exit Realty Neighbors in West Palm Beach, had clients who found a “cute little starter house” and qualified for an FHA loan.
One of the home’s bedrooms, however, needed carpeting - an FHA requirement.
So Hernann bought a carpet remnant for $120 and, although it wasn’t perfect, installed it herself.
“Some things are just worth doing and getting done with so you can get the deal closed,” she said.
Fialkowski has trimmed trees and laid mulch to make a successful sale when a homeowners association refused to release a house for sale without yard maintenance. Fialkowski’s clients had 24 hours to do the work.
“We went over to do it and Craig was already there sweating away,” said client Mary Carter, who bought the home with her husband, Keith. “We’re in new times and I guess you have to be prepared for a new set of rules if you’re a Realtor.”
“Installed stoves.
Paid for and laid new carpet.”
Gotten laid.
…
Something about an agent tightening a gas line fitting to a stove gives me the willies. How long before there’s a CO incident that takes out a whole family?
I can’t think of a cohort of people more ill-suited to use hand tools than the agents.
I think you are reading to much in to it. By installing, I don’t think that they mean the Realtor actually risked chipping a nail, but rather hired/paid to have it done.
Maybe so, but I wouldn’t leave it up to an agent to hire anyone who is actually trained. Chances are they are paying their unemployed brothers-in-law a few bucks on the side.
“I told the buyer, ‘Just get some drywall and a sheetrock knife, and he said, what’s a sheetrock knife?’
You know, that`s what they use to tape your toxic drywall. Unless he meant a utility knife wich is used to cut toxic drywall.
Every house is like that. How would you ever know?
IMHO, many sellers are still so delusional and if they really want the pie-in-the selling price. We love to rank on the re, but seriously, there are lots of seller nutjobs out there.
FHA loans require all the bedrooms have carpets? Huh? Why?
polly, the city/state codes require a front lawn for a COA(certificate for occupancy) when they are new. Stupid, I think for a desert. Codes /laws are sometimes bs.
FHA loans require all the bedrooms have carpets? Huh? Why?
“Big Carpet”.
I can’t believe it! Someone finally found a 6%’er that’s actually devlivering 6% worth and people are complaining!
Hey I say have at it! When we bought our first home it was an older gal’s “first sale”. The VA Inspection mandated the flooring in the kitchen be changed. She came over w/ the stuff my wife picked out and we really had a time of it!
Back then, when realtors said they “were all about the community” they meant it. The problem is, we can’t even get a fire lit under people HERE to bring disintermediation to the NAR Cartel (TM) How well do you think it will go over ‘elsewhere’?
Having sales dry up just b/c there’s a Buyer’s Strike isn’t the same thing as breaking up a cartel. PEOPLE!
Whitney Houston’s NJ Mansion Is Up For Sale
MENDHAM TOWNSHIP, N.J. (AP/1010 WINS) — Whitney Houston’s New Jersey estate, where she married Bobby Brown in 1992, is for sale.
Photo Gallery: Whitney Houston in Concert at Central Park
The five-bedroom, 12,561-square-foot house in Mendham Township is listed for $2.5 million. That’s less than half its $5.6 million assessed value.
The Coldwell Banker Web site estimates a buyer would have monthly mortgage payments of $10,819 based on a down payment of $500,000 and a 5 percent interest rate on a 30-year, $2 million mortgage.
Houston and Brown divorced in 2007.
And there’s the Nicolas Cage potential BK.
In a lawsuit filed Oct. 16 in Los Angeles, the star, age 45, claims that his longtime business manager, Samuel J. Levin, “lined his own pockets with several million dollars in business management fees while sending Cage down a path toward financial ruin.”
In the lawsuit filed against his business manager, Cage says he “relied on Levin to handle his financial affairs to ensure that he and his family would have a financially secure future built on the foundation of the substantial monies Cage earned through years of hard work.”
“Cage is now forced to sell major assets and investments at a significant loss and is faced with huge tax liabilities because of Levin’s incompetence, misrepresentations and recklessness,” the lawsuit alleges”
Anybody at HBB put their family’s security in the hands of somebody else recently? Anything really important, I manage it myself, regardless of how hard I am working or little time I have. Don’t most people operate that way here on this blog?
I think this case is similar to Madoff investors with a big dose of of greed mentality: I give my money to these money managers and they will make it grow more than what the little people earn. I am a high net worth investor (or Hollywood star) and therefore above those who have to schmuck around with .000001% earnings in CD, Treasuries when managing money that cannot get lost.
And maybe also there is a component of arrogance, and lazy? These hands-off investors think their lives, their work, are all too important and intense for them to spend time doing basic oversight of their money and finances. You can hear Cage’s elitist thinking in this statement:
“Substantial monies Cage earned through years of hard work.”
Like that’s any different than what the rest of us do?
Liked him in Moonstruck though…
Trust but verify.
He forgot the “but verify” part.
Don’t know nothin’,
I think you might be referring to Vincent Spano? “Snap out of it!”?
Anyway, glad you shared this article. Plays in perfectly w/ when I ultimately write my book “Why everything you ‘think’ you know about Hollywood is WRONG!” ( Someday..? )
Ahem, why is IT that every time some no-talent “star” burns through his money, it’s his “managers” that ‘did him in/wrong’ etc? We’ve been through this w/ everyone from Tom Clancy to Dan Haggerty ( Grizzly Adams ) After they do enough blow off a hooker’s @$$ they play the sympathy card and blame their handlers. Not buying it. Oh and yes, the @$$ belongs ‘to’ the ‘hooker’ so yes, it would be possessive.
so yes, it would be possessive
grammarian preemptive strike?
hip in zilker,
Well.., it ‘is’ her’s isn’t it? Unless of course it was in plural form?
Yeah let’s see, Willie Nelson, Tim Geithner..? I could go on. Tom Daschle? I think Michelle M@lkin did a great job debunking the “but it was my financial managers fault!” defense.
Look, we’re not talking about the Rolling Stones signing an abusive ‘recording contract’ at an age of 17? We’re freaking -adults-. The Amnesty for using the BIWMFMF Defense has EXPIRED!
Sure, it was correct. I was just amused that you made a peremptory strike against anyone who might (wrongly) criticize your punctuation of ‘hooker’s @$$.’
And I don’t disagree with what I gather you are saying, but what is BIWMFMF?
zilk, it’s his abbreviation of the defense named in the preceding paragraph.
Thanks, az. I guess double MF-s confused me.
yes, the “snap out of it” line was the best. I think it was Cher saying it as she slapped Nich Cage.
Speaking of Cher, you will need to include her daughter Chastity becoming a man “incident” in your book - even though a bit off topic for what you plan. I am all for expressing true sex orientation , but I have so many thoughts about this sad situation and it just isn’t something I can’t celebrate or understand.
I remember how cute Chastity was when she appeared on Sonny & Cher show and how pretty she was in her teens/early twenties. Makes it hurt more to see her take this path as shallow as that sounds. Can’t one simply carry on as needed without the complete transformation? How could she do this to her mother? Somewhat selfish if you ask me.
2. Wonder if Cher is partially blaming herself for this? Having Greg Allman and g*d knows who else around during Chastity’s formative years could not have been a good thing.
Sorry Ben and all, really off topic, but just so sad.
“And maybe also there is a component of arrogance, and lazy? These hands-off investors think their lives, their work, are all too important and intense for them to spend time doing basic oversight of their money and finances.”
Laziness, narrowness of interest. I’ve been on a musician bio kick, and it’s amazing how many got ripped off and blew off income taxes (of course). They are just so focused on their music, with a little side of sex and dope, that they are just naifs at this stuff. I’m sure it goes for actors too.
I’m amazed also at the tech people I work with who seem investment-savvy then come to find out they’re taking everything to a full service broker.
I always equated people that used full service brokerage with those that missed the dawn of PC/Mac age. Wonder how many under age 55 are using full service brokerage for bulk of their funds management? My main funds are in Fidelity, which I buy/sell on my own with occasional guidance from my acct reps when I have a question. I thought everyone operated this way?
I do have though this old ag edwards account, now wellsfargo advisors which does not let you do anything except view. If you want to move funds, sell or buy, you need to call “THE MAN”. This is money left from Mother, Dad’s and after they died, and out of respect to them and their long time broker, I left it there. But is is a dark and frightening place for sure.
I admit I’m not under 55, but I would NEVER use fookin Fidelity, which is not a Real brokerage house and has NO bond inventory to speak of. I use Merrill Lynch — yes, a full-service brokerage — which has a large bond inventory and plenty of Answers for my questions, as well as the capacity to receive my clients’ mortgage payments directly.
If all you want to buy and sell is stocks, or WORSE mutual funds, OK, I think you are a dope but you are welcome to Fidelity.
az,
You’re right about Fidelity and bonds.
Fidelity is bad because they have low bond inventory?
Now he knows how Debby Reynolds feels, and Doris Day and probably a lot of other folks who trusted their mgrs. and MGRs/Husbands.
yikes. Lesson #1. for a star, have your finances/investments checked with a second and perhaps third independent audit yearly. Learn how to read or understand them.
Call MC Hammer ( he’ll pick it up? )
Hammer time!
Hammer was Different………..no kidding
He spent it on people ok a big house or two but he had way too many people on his payroll. then the public changed its tune when NWA and Compton was the latest craze
And he didn’t downsize fast enough.
I had some co-workers come back from lunch and they said they saw Hammer at the Dairy Queen in Fremont, Ca down the hill from his house. Only it wasn’t just Hammer. They said two black mercedes’ pulled up and about 8 men got out. All on Hammer’s dime no doubt.
This happened around 1996.
Doesn’t a falling dollar indicate a decreased risk tolerance — for holding dollars? If investors were convinced the US recovery was sustainable, wouldn’t the dollar be strengthening on the purchasing manager’s index data release?
Currencies
Nov. 2, 2009, 10:30 a.m. EST
U.S. data stoke growth hopes and weighs on dollar
Several central bank meetings this week color currency trading
By Deborah Levine & William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The U.S. dollar declined on Monday, losing ground to major rivals after the Institute for Supply Management’s index of business activity rose much more than anticipated in October.
Along with reports showing rising construction spending and pending-home sales, stocks extended gains as investors increased their risk tolerance, detracting from the dollar’s safe-haven appeal.
…
Enlightening comment by InfoJunkie on MarketWatch dot com:
“The U.S. dollar began the week on a soft note Monday, losing ground to major rivals as strong data from purchasing managers in Asia and Europe prompted investors to cautiously up their risk tolerance, strategists said.”
This is complete nonsense, because the rise and fall of the Dollar has very little to do with the risk appetite of investors! It has more to do with the amount of Greenbacks been printed in the backyard of the FED and the smooth pushing of that worthless paper into the market through their crony friends at GS, JPM, BAC, etc.
If the risk appetite of investors was responsible for the weakness of the Dollar why didn’t the Dollar plunge during the Dot-com bubble prior to 2000, when every nurse and every cab driver was giving advice on how to invest in Wall Street?
During that period the Dollar was worth double the amount it is worth now compared to the Yen, the Swiss Franc, or the ECU which was the precursor Currency prior to the introduction of the Euro.
This talk is only @#$%&! to lure more people into the market so that the heavily invested Banks can get out at reasonable losses. So be careful with your investments and select carefully in what stocks you want to invest, to avoid getting burned by believing in stupid statements like this one.
Don’t ever forget that MW, CNBC, Bloomberg, etc are not advising you in financial matters when they put out statements like this one, according to their own statement, but they are entertainment channels, to avoid lawsuits!
Good health, and good luck to you all!
‘Catch Me If You Can’ aired last night. Timely.
My daughter was watching it. Naturally I found my mind wandering over to the really big fat cat bankers on Wall Street, who don’t have to resort to petty grifts in order to steal billions from the American public.
who don’t have to resort to petty grifts in order to steal billions
Nailed it.
Professor Bear,
I’m not saying it’s a “false dichotomy” ( b/c as usual, I think you’re pretty much spot on )
But the reality here is that even freaking E Trade requires 50% down on a margin account. ( And YES, they believe you when you ’say’ you have the financials to be marginable! )
The Dot.com Bubble didn’t run on 103% financing and necessitate the sale of Gov. securities ( read cr@p MBS paper ) to China!
I always make time to catch a few scenes from that movie and Special Agent Hanratty -still- busts me up! What makes Tom Hanks so great is that he goes to great detail to portray an era as it happened. Unlike the ‘ultra-cool’ green-screen cr@p they peddle today.
If the risk appetite of investors was responsible for the weakness of the Dollar why didn’t the Dollar plunge during the Dot-com bubble prior to 2000, when every nurse and every cab driver was giving advice on how to invest in Wall Street?
Good question.
IMO an excellent example how the very fundamentals of macroeconomic give-and-take change due to circumstances (e.g. national debt) and/or are simply misunderstood.
Samuelson op-ed from today’s Washington Post:
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/01/AR2009110101704.html?hpid=opinionsbox1
Not new discussion for HBBers, but interesting to see it discussed openly in the mainstream media.
If this columnist is reporting a possible problem of going broke, then the problem must be serious, as he is typically pretty far behind the curve in bringing problems to light (doesn’t have “the vision thing”…).
I should add, he does have the ‘middle-of-the-road consensus’ thing…
“…that is, tell lenders that it won’t repay them all they’re owed — was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn’t. Well, it’s still a very, very long shot, but it’s no longer entirely unimaginable.”
I don’t get why this would be necessary for the US, given (1) the dollar’s reserve currency status, (2) the technology called a printing press, and (3) the possible to use (1) and (2) to financially engineer a gradual but steady currency write down (like the one that started circa 2000). Please jump in here if you understand his point better than I don’t…
the
possiblepossibility…Like Greenspan has said, they can guarantee that everybody will get their dollars. They just can’t guarantee what those dollars will be worth.
He was talking about Social Security when he said that. Imagine what he thinks about foreigners…
Is Robert Samuelson related in any way to economist Paul Samuelson?
Trying to research this I found out that Larry Summers is Paul Samuelson’s nephew.
My perception is that Samuelson is a very common name. Conjecturing a relationship between two Samuelsons is somewhat akin to conjecturing whether Ben Jones is a blood relative of Edward D Jones.
You mean Eddie? Wow… Ben’s related to Eddie???
There’s an interesting article on Summers in Oct 12 New Yorker; I learned that Larry Summers is Paul Samuelson’s nephew reading it last night. It was a good issue: “the money issue,” all the articles and cartoons on financial topics.
Wikipedia says they’re not related (Paul and Robert), but Wiki has been known to contain errors.
Driving around central FL this weekend I saw more ’sign-twirlers’ than I have in a long time. Is this a bubble?
I’m wondering how soon the US will announce the trust bustups of JP Morgan, Goldman Sachs and Bank of America, in order to restore competition to our banking sector? Any thoughts?
Europe November 2, 2009, 9:20AM EST
Britain Set to Unveil Bank Breakup
To introduce more competition into the banking sector, the Labour government this week will propose selling pieces of Lloyds and RBS to new entrants
By Nick Clark
Chancellor Alistair Darling will this week unveil his proposed overhaul of the UK banking system which includes breaking up Lloyds Banking Group (LYG) and Royal Bank of Scotland (RBS) and bringing “at least” three new banks to the high street.
Mr Darling is preparing to announce the Government’s plan for the future of UK banking – as first revealed in The Independent last week – to the House of Commons in the next few days.
The Government is not yet ready to announce as it is still in negotiations with the two banks over their participation in its Asset Protection Scheme (APS), designed to insure billions of pounds worth of bad loans.
The Chancellor said yesterday there would be a very different look to the high street banks in the next four years.
He said: “What I want to do now is begin the process of reform and reconstruction so we have got a safer, more competitive banking system with more high street banks than we have at the moment, with new entrants coming in”. RBS, which is 70 per cent owned by the Government, and Lloyds, 43 per cent state-owned, will be forced to dispose of a string of assets, which will be sold to new entrants to the market.
…
That’s one way to address “too big to fail”. Maybe the most effective way.
More likely BofA and Goldman and WFC will announce the break-up of the US gov.
Hey our guy in Afghanastan won again. And he didn’t even have to stuff any more ballot boxes. They just canceled the election. Looks like they are learning Democracy from us.
Afghan election commission declares Karzai winner
By HEIDI VOGT and RAHIM FAIEZ, Associated Press Writers Heidi Vogt And Rahim Faiez, Associated Press Writers 1 hr 37 mins ago
KABUL – Afghanistan’s election commission proclaimed President Hamid Karzai the victor of the country’s tumultuous ballot Monday, canceling a planned runoff and ending a political crisis two and a half months after a fraud-marred first round.
Ronald Neumann, a retired U.S. ambassador to Afghanistan, said canceling the runoff was the country’s best available option and that few were likely to contest the decision.
I’m glad we’re making the world safe for democracy.
Well at least Abdullah Abdullah is still breathing air, for now. President Hamid Karzai is a criminal, a very rich criminal. It’s sickening to see the sort of scum that the U.S. must sleep with for Israel’s sake.
Another bailout success story (at least for those who invested in this too-big-to-fail corporation’s bonds…). Is the Bond Pimp helping to drive the decisions on who will be left holding the bag on these bankruptcy resolutions?
CIT Filing May Help Bondholders, Erase Taxpayer Stake (Update1)
By Linda Shen
Nov. 2 (Bloomberg) — CIT Group Inc.’s decision to seek court protection probably will keep money flowing to bondholders and 1 million customers of the 101-year-old commercial lender. Shareholders and taxpayers won’t be as fortunate.
CIT’s Chapter 11 bankruptcy may give bondholders new notes at 70 cents on the dollar plus new common stock, and Chief Executive Officer Jeffrey Peek said clients will be able to get funds. Common stock owners could be mostly wiped out, and the U.S. Treasury Department said it won’t recoup much, if any, of the $2.33 billion of taxpayer money that went into CIT, the largest firm to go bankrupt after getting a federal bailout.
“It doesn’t look too good for the government preferred or any preferred holders,” Brian Charles, a debt analyst at New York-based brokerage RW Pressprich & Co., said yesterday. “It’s unlikely common shareholders realize any value.”
…
Another one of the nation’s largest lenders has filed for bankruptcy. On the brink for months, CIT filed for Chapter 11 protection on Sunday.
The prepackaged plan allows CIT to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses. The plan keeps CIT’s operations alive and makes it possible for the company to exit bankruptcy by year’s end.
But here’s the bad news: While senior debt holders will only lose 30% of their investment, we, the U.S. taxpayer, will lose the entire $2.3 billion we lent the company this summer.
William Black, professor at the University of Missouri-Kansas City School of Law is dumbfounded. “We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers.”
Black, a former top federal banking regulator, blames Treasury Secretary Timothy Geithner for negotiating such a bad deal on behalf of the American public.
His argument goes as follows:
The government was in no way obligated to lend the struggling CIT money and, in fact, initially refused to provide it bailout funds. More importantly, being the lender of last resort, the government should have guaranteed we’d be the first to get paid if CIT eventually filed Chapter 11. By failing to do so, “it’s like he [Geithner] burned billions of dollars again in government money, our money, gratuitously,” says Black.
Black believes the problem stems from regulators’ fears that if the banks recognize a loss on the bad assets it will create a domino effect that will wipe out the entire financial system.
“If that’s true we’ve got to get rid of capitalism,” he warns, “because if we can’t recognize losses in a capitalist system we have no future.”
I don’t understand why the treasury is behind the bondholders in these cases?
Because Treasury was _stupid_ in how they structured the bailouts. They came in as preferred shares, which is an equity position.
What Treasury should have done was come in senior to all bond-holders. And they should have also immediately stated that they would allow future bonds to be issued that were superior to their position—and all others.
In other words, penalize all past risk-takes, while ensuring that you do not reduce the ability of the under-capitalized firms to raise capital.
Treasury was stupid, if Treasury was trying to act in the best interests of taxpayers. But WHO are the bondholders actually? A lot of Geithner’s cronies? (Or was it Paulson then?) Or maybe a lot of public employees’ pension funds? There could be many reasons why Treasury decided to come in senior to common shareholders but junior to bondholders.
I get so tired of the DOW going up at ANY halfway positive news. I wish they took fundamentals into the equation. If so, I bet it wouldnt go up so much. You guys are right, there is alot of manipulation going on.
http://money.cnn.com/2009/11/02/markets/markets_newyork/index.htm?postversion=2009110211
Manipulation is not required, if the whole thing is a result of the weakness of the US dollar. See PB’s posts above. OTOH, Roubini does not agree with PB on this subject. Roubini thinks there will be another scramble for dollars just like the one last October, only probably more intense. Unusual, a 180-degree disagreement between NR and PB. I’m inclined to NR’s side in this case, but cannot be certain.
Unusual, a 180-degree disagreement between NR and PB. I’m inclined to NR’s side in this case, but cannot be certain.
I feel like the guys in the INLAWS, “serpentine, serpentine”.
as the bullets zip by.
How Goldman beat the housing market
One question that keeps sticking around: How did Goldman Sachs manage to get out of the building before it burned down? One answer — it sneaked out the back door while no one was paying attention.
McClatchy reviewed hundreds of documents, SEC filings and other material to piece together the story on this. Read the entire article here. The basics: In 2006 and 2007, Goldman sold more than $40 billion worth of securities that were backed by subprime mortgages. Goldman just didn’t tell the people buying the securities that it was secretly betting against those loans:
“The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion,” said Laurence Kotlikoff, a Boston University economics professor who’s proposed a massive overhaul of the nation’s banks. “This is fraud and should be prosecuted.”
The courts will get a shot at this. Several pension funds and other institutional investors have sued Goldman:
Mississippi Attorney General Jim Hood… assailed the investment banks “who packaged this junk and sold it to unwary investors.”
California’s huge public employees’ retirement system, known as CALPERS, purchased $64.4 million in subprime mortgage-backed bonds from Goldman on March 1, 2007. While that represented a tiny percentage of the fund’s holdings, in July CALPERS listed the bonds’ value at $16.6 million, a drop of nearly 75 percent, according to documents obtained through a state public records request.
At Clusterstock, John Carney argues Goldman wasn’t keeping any secrets:
Goldman’s top economist was warning about the housing market way back in 2005. In reaction to a study published by two academics in the Wall Street Journal that purported to show there was no housing bubble, Hatzius authored a note titled “Bubble Trouble? Probably Yes.”
It was written in the same cautious language of most of these Wall Street economists notes but it’s message was unmistakable: house prices are over-inflated and due for a serious decline.
…
That’s all well and good, but while we’re at it - how about grilling those fund managers who accepted AAA at face value with hardly any due diligence.
“you can’t cheat an honest man”
I think there are plenty of ways to cheat an honest man.
Besides, the fund managers were not honest and they weren’t cheated, as I am sure that they were able to keep both their jobs and bonuses.
Compared to their peers GS was smart and executed well - gotta give them that, right?
1st Man: “So, what do you think of Goldman Sachs’ execution?”
2nd Man: “I’m all for it.”
lol. which is worse?
Criminal, fraudulent, unethical and smart
or
Criminal, fraudulent, unethical and dumb
Hey, where’s Rancher having his coffee today? I wanted to wish him Happy Birthday.
Happy Birthday Rancher! wherever you are celebrating.
Thanks Hip and DD, I feel older than dirt..laughing..
I sitting here with a roiling stomach from the antibiotics that I’m taking for a wicked ear infection that broke out yesterday, me thinks
a spider bite from the wood pile. Very nasty.
I am also being wonderfully mothered…
I know it will be hard, but try to lay off the coffee. It’s a stomach irritant. I can’t drink coffee at all for that reason, hence the smoothie kick.
Right Oxide, The BOSS has already relieved me of my cup and put vast quantities of hot
piping goodies in front of me along with copious amounts of fresh juice. This is going
to be a nice day and Thanks.
Happy Birthday Rancher and many more.
Thank you SFBAG, kind thoughts. I TOO wish
for many more. Smile and laughter..
Tummy better?
I’m glad I have a stomach…..
Anyone else as pissed as I am that they are starting to see home prices go up again? I swear to god every other house on my block for sale is now selling, and at higher prices. Every time I see another one sell I have two thoughts: 1: Are people really that stupid? They are paying near peak prices ALREADY. 2: Time to get the hell out of the Bay Area and California. I’m talking to a firm in Austin as we speak…
You might want to stick around until after they let the $8K credit expire…
Like when? Maybe 2019?
Bingo.
Once the tentacles of the Powers That Be are in the housing market, they won’t let go.
More handouts to prop up prices, reward the foolish, and punish the frugal.
which could go on till June 10 if they decided to extend it.
I’m talking to a firm in Austin as we speak…
Who are you talking with, if you don’t mind? If you need contacts, let me know - I just moved from there, and am a software developer like I believe you are.
If you move to Austin, realize that many Californians have made the same move you are looking to make, and have driven/propped up housing prices. Don’t rush to buy just because it’s “cheaper”.
I’m well-aware of the California relocatee epidemic in Austin. I’ve been studying Austin as a city to relocate to for years. I have also visited it. I myself work as a UI/web, graphic designer. I’m talking to a mid-sized tech company there.
In regards to prices, it seemed that after I visited it, they swing very dramatically. Some of the older, more interesting neighborhoods in the hills in Austin were just as expensive as the Bay Area: Lots of yuppie/hipster type people living there. The houses were $400,00- $600,000, which seeing as how taxes are 3% would mean they pay close to $8,000 a year on taxes alone. But on the other hand, there were scads and scads of cookie-cutter houses in places like Round Rock for $150,000. A lot of the burbs there were really built-out and anonymous looking. On the other hand, parts of South Austin where things weren’t so squeaky-clean were still affordable. That and some of the smaller towns inbetween were also still really affordable.
All I know is that homes in the Bay Area are still stubbornly sitting at $475,000-$500,000 and the things are now selling again. There’s no choice here. Either you pay a lot to live anywhere that isn’t a ghetto shooting alley or you live in the ghetto and pay what it might cost for an upper end home in Austin.
jetson,
Since I came to Austin (and bought) during a bust, prices seem high to me - but yeah it’s not the Bay Area. You can get a nice place in a good neighborhood for what you would pay for a dump in the BA.
I think you mentioned once that you came from a rural area. Depending on where your job is, you might want to look around Elgin or Manor, east of Austin. (Disclaimer: I haven’t been out there for a while, so I don’t know what impact toll roads or new subdivisions might have had on the area.) I have several friends who live out there, in houses or mobile homes with a few acres of land and they love it. Creeks, windy roads, lots of wildscape. A few years ago, when my cousin was going to move to Austin, that was where she planned to buy - thought she could get the best deal for her money on acreage and house size and privacy there.
Thanks for the advice. I had been looking out towards Georgetown, which was a nice mix of rural and small town feel. I realize the prices are pretty high by Austin standards. But comparing the Bay Area to Austin, a ’starter’ home in the BA is $500,000, post bubble. In Austin its 150-200k. I don’t care if the prices are inflated. I’ve been saving for 6 years now, have enough to buy at that price with retirement mostly spoken for.
The hypocrite in me is worried about what Austin will be like in 5-10 years. When we visited, it felt like every other person there was also visiting and from California, the Midwest, o the east coast, and they were all moving there. I can see the area turning into another Bay Area hellhole. That would also mean property taxes will be through the roof. I guess I can’t talk since I am in fact one of “those” people.
You do get to vote on increases in property taxes and bond proposals etc. in Texas. Many times the voters turn them down.
The State Legislature does pass all sorts of senseless taxes on random things (eg “disposal” tax when buying car a battery which just goes into the general fund since you have to pay extra when buying a battery if you don’t bring in a core and there is no need of a program to dispose of batteries). Luckily, they are only in session 3 months every other year.
I can see the area turning into another Bay Area hellhole.
Unfortunately, I can see that too; it’s been happening to some degree for a while. I think Ben agrees. I believe his last word on Austin was “ruined.”
I’m settled in Austin, but if I were younger and looking for a place to relocate, I would probably shoot for a small Midwestern city or Midwestern college town. I like to be in an atmosphere where creative and educated people are appreciated, but I would avoid anyplace which that damn Richard Florida has decreed a magnet for the “creative class.” It’s just so horrible to watch nice places and neighborhoods and landscapes and fun local events get destroyed and replaced with a cookie cutter fake “urban hipster” commercialized scene, sprinkled with a little faux funky here and there to show people that they’re not in LA or Dallas or Houston, they’re in little weird cool Austin.
I guess living in Georgetown would keep you away from that, except when you decided to go to Austin to stand in line for a cupcake from an Airstream food trailer.
Georgetown and countryside is very nice. I taught at Southwestern for a year and didn’t like commuting, but liked the town. It has a little more midwestern feel, while Manor / Elgin area might be a little more hillbilly-ish. But as I said, my friends who live out there really love it & love their land.
jetson_boy, if you haven’t already, I’d check out the headhunting firm HireStarter. I never got a gig from them, but several of my good friends have used them to fill positions. I found them to be very tech-knowledgeable and know their clients well - both on a technical as well as cultural level. If they suggest a match, it’s likely to be a good one.
Condo/gated, Repaved street ( I think just for presentation value)
2nd time in 4 yrs, so it didn’t need it at all. Maybe they are hoping the “lipstick” will sell the units here faster?
* The Wall Street Journal
* NOVEMBER 2, 2009
U.K. Reforms Need to Slow, Bankers Urge
By MATT TURNER AND DOMINIC ELLIOTT
Some of the U.K.’s leading bankers have urged the Financial Services Authority to slow its efforts to overhaul markets, according to documents it sent to the regulator as part of a consulting process.
They demonstrate the level of discomfort the pace of change is causing an industry that has been nervous about publicly airing its dislike of reforms among widespread public anger over the financial sector’s role in the recession.
In letters to the U.K. market regulator’s chairman, Adair Turner, and its chief executive, Hector Sants, bank executives warned too little analysis had been conducted and raised concerns that proposals for change would stifle business by suffocating banks with too much regulation. They also expressed fears that opportunities for regulatory arbitrage would be rife if the U.K. pressed ahead with reform before securing international cooperation.
The letters were part of submissions made by several banks in feedback to the FSA’s Turner review. As well as Barclays PLC, Royal Bank of Scotland Group PLC, and HSBC Holdings, the banks that submitted feedback included Goldman Sachs and J.P. Morgan Chase & Co.
…
If they think of these letter writing banks as a partial list of trusts that need to be busted up in order to restore competition and legitimacy to the global banking system, the banking industry regulators will be off to a good start.
…
MarketWatch First Take
Nov. 2, 2009, 11:34 a.m. EST
There’s still value left in Fannie
Commentary: Would Washington really put a red line around a Goldman deal?
Manufacturing recovery hard to ignore
By MarketWatch
LONDON (MarketWatch) — Who says there’s no value left in Fannie Mae?
The government-owned lending operation (FNM 1.01, -0.07, -6.64%) is sitting on hundreds of millions of dollars in tax credits tied to low-income housing.
It can’t use them. But it could sell them to someone actually making money, like Goldman Sachs Group (GS 168.91, -1.27, -0.74%). See related story.
News Hub: Goldman Bids for Tax Credits
Goldman Sachs is itching to buy tax credits that Fannie Mae bought to offset future profits. WSJ’s Jon Hilsenrath explains the U.S. Treasury’s concerns about allowing the Goldman purchase, in the News Hub.
Alas! The thought that wildly profitable Goldman could offset some of its enormous earnings by picking up tax credits on the cheap from Fannie is off-putting, to say the least.
That’s especially true for the entrenched power elites in Washington who thought up the brilliant idea of a “quasi-governmental” agency like Fannie in the first place.
Trouble is, the credits have the most value to companies making the most money — and that’s Goldman Sachs these days. Putting a red line around Goldman doesn’t make any sense financially, even if it does politically.
Treasury Department officials should try to find a way to cut a tasteful deal.
…
Our LL offered to chip in to share costs for new toilets…
* REAL ESTATE
* NOVEMBER 2, 2009
Landlords Offer Incentives to Stay Put
By DAWN WOTAPKA
Amid the jobless recovery, some landlords are showering flat-screen TVs, cash, rent cuts and other incentives on tenants to encourage them to renew their apartment leases and thus avoid the expense of filling empty units.
The rise in unemployment has prompted tenants to seek roommates, move home or trade down to cheaper units. In the third quarter, the national apartment-vacancy rate hit 7.8%, a 23-year high, according to Reis Inc., which tracks vacancies and rents in the top 79 markets.
“Many companies are doing whatever they can to keep units occupied, especially heading into the seasonally slower leasing period,” said Paula Poskon, an analyst with Robert W. Baird & Co.
The trends are taking a toll on the bottom line. Apartment Investment & Management Co., which owns and operates roughly 150,000 units nationwide, reported Friday that its funds from operations, a key REIT metric, fell to 19 cents a share from 60 cents a year earlier. UDR Inc., which has about 45,000 units on the West Coast and in Washington, D.C., reported earlier this month that its funds from operations dropped 42% to 19 cents.
“We do need job growth in order for our business to prosper,” said David Neithercut, chief executive of Equity Residential, the country’s largest apartment REIT by market capitalization. “I think 2010 will be another year of doing the best we can.”
…
Our LL offered to chip in to share costs for new toilets…
Been wearing the old ones out have we?
Am I missing something? You, as tenants, are actually paying towards new toilets? Why on earth would you do such a thing?
Eddie said the following in yesterday’s BB:
Imbecile, stop trying to read our @#$%ing minds and assigning ulterior motives to our point of view. I have no problem with anybody earning 10M, or 100M for that matter. But THE MOMENT THEY GET MY HELP, they LOSE ALL RIGHT TO UNFETTERED WEALTH. Do you have a @#$%ing problem with that?
I am a prime example. Right now I’m a lowly worker bee. But I have aspirations to a million-dollar salary. And when I do I will ALWAYS be better off than what I am now, even if my tax rate is 99%. You DO understand incremental rates, don’t you?
Ie, unless my tax rate is 100%, there is always SOME incentive to earn a little bit more so I can get 1 cent more for each additional dollar earned. If I decide it’s not worth it? I cut back on working more. I DO NOT STOP COMPLETELY. That’s what you would expect us to believe; that I would stop working entirely just to spite the govt, but crippling myself in the process.
Oh no, you say, I would fire people or take my ball and go abroad. Then you do your usual strawman act and claim that all the rich people will leave the US leaving only the poor who have no clue how to work let alone run a business.
Well I’m here to tell you that many of the currently rich people were once literally poor themselves. You make it sound like no poor person can become rich. Certainly if all the parasites left the country there would be an incredible opportunity for the remaining folk (a few of whom may have IQs of over 100) to take over leadership positions. But in your sad mind you have assumed that the US is currently comprised of smart, rich people and a bunch of dumb apes who know nothing and can do nothing. Hope you don’t mind me revealing this to the board, after all, that is what you continually do to the rest of us.
Oh, and we think the rich are thieves and need to be punished? What kind of @#$%ing punishment is it to go from a 60-foot yacht to a 20-footer? From a Porsche to a BMW? From that $10 million mansion to a $2 million hovel? You have no clue what the word “punish” even means.
Once again, remember, my main point is that ANY OUTSIDE HELP for your company and you give up all your “free market capitalism”. Will you admit that without taxpayer help none of Goldman Sachs, JP Morgan, AIG, Bank of America, Citigroup, etc, etc, would be in business today? I know some of them paid back the TARP. But that was because they got a lifeline when nobody else did, and used that money to buy assets on the cheap; assets that could have in fact been bought by the taxpayer directly with the same money! Then the taxpayer would have reaped the full benefit, instead of ZERO DOLLARS. Forget zero, what do you think of the @#$%ing 2.3 billion LOSS from the CIT bankruptcy? How do you feel about supporting the hefty salaries and bonuses at that company now that you have lost 100% of your investment? Bet you’re ecstatic because we didn’t lose any of those brilliant minds to a foreign country and because all those employees still have their jobs.
And of course this is about tax policy. A super-high marginal rate at the upper echelons is a guaranteed method of ensuring that the income gap never widens. If you’re complaining about a 90% tax rate you should also be complaining about a 35% rate (compared to the 15% rate). Why are you happy with 35% but not with 90%? I bet there are some people who stopped working because they were paying out 35% as opposed to their neighbour who was only paying 15%. Right?
Your mentality is similar to those who say that if a company is doing well then no valuation is high enough. For example when Google crossed $500 some say that since it’s doing so well, market leader, and all that, it could go to $1000, even $2000. At that point, market cap, P/E ratios and growth rates are thrown out of the window. This applies right now to many companies in the stock market.
It’s the same with CEO salaries. The difference is that with stocks, market forces eventually prevail (although I’m beginning to doubt even that in today’s rigged setup involving who else but these same CEOs) and bring the P/Es in line with rational expectations. In the case of CEO salaries, THEY GET TO DECIDE THEIR OWN by being on the BOD of each other’s companies and of course, holding the govt of the day by the balls via lobbyist funding. This is an oligarchy, pure and simple.
Finally, I feel differently about CEOs of companies that actually produce something of value to the nation and the world, such as durable goods, food, energy, materials, etc, efficiently and without subsidies. For such companies the sky should be the limit. But when middlemen whose main function is to “enable” transactions, and whose revenue comes from skimming off the top of said transactions, rake it in at a rate far outweighing their actual contribution to society, I puke in disgust. Whether you are a trader, stockbroker, real-estate broker, car salesman or any other middleman you do NOT deserve 10x-1000x the salary of regular productive workers. And you are ONLY GETTING IT NOW because WE BAILED YOU OUT. If we didn’t bail you out not only would your companies have gone under, but YOUR ENTIRE INDUSTRIES would have shrunk and pay scales reduced to be in line with their intrinsic value to society. THAT’S CAPITALISM AND FREE MARKETS AT WORK! This BS we have today is NOT CAPITALISM!!
Oh, and we’re all tired of your @#$%ing sweet talk about never receiving a check from a beggar. You would kiss the ass of an asshole who makes a few million dollars because he employed a hundred laborers and “personally speaking” gave you a check for 100k, because you got yours and he “created jobs” (you certainly wouldn’t be happy to be one of the laborers). You’re a selfish sonofabitch with no regard for the common good. And you have the gall to tell us that WE don’t care.
Wow. Just…wow. What a delightfully indignant, angry, righteous rant. Seriously. Thank you.
BTW, I agree with everything you said. Every. Thing.
standing ovation +10000
thanks for giving voice to those of us sick of Eddie
My advice to you is figure out what marginal tax means. You haven’t a clue. When a tax rate is 99%, nobody in their right mind will work that extra hour if it means 59.4 minutes of that hour will be spent working for the government.
In your entire rant, you didn’t once refute the point. The higher the tax, the less incentive there is to work. And no I am not happy with 35% either. Don’t put words in my mouth.
And exactly who made you the grand poobah of all things salary? Car salesmen and traders can’t make lots of money according to Sir You? So now we will put salary caps on professions because they don’t meet your standards? Give me a break.
I have no idea what you’re talking about in your last paragraph. I’m a laborer who makes $100K and kisses the ass of millionaire? Am I close?
You are right. I don’t care for the common good. I care about myself, my family and everyone can fend for themselves. I don’t want or expect anyone to look out for me and I don’t look out for anyone either. Read Adam Smith and see why that’s a good thing.
“When a tax rate is 99%, nobody in their right mind will work that extra hour if it means 59.4 minutes of that hour will be spent working for the government.”
What are you talking about? Who is it you are imagining to face a 99% marginal tax rate? Or is this yet another one of your hare-brained strawman distortions of reality?
I am referring to this piece of nonsense written in the above socialist diatribe.
“And when I do I will ALWAYS be better off than what I am now, even if my tax rate is 99%.”
Any other questions?
“Ie, unless my tax rate is 100%, there is always SOME incentive to earn a little bit more so I can get 1 cent more for each additional dollar earned. If I decide it’s not worth it? I cut back on working more. I DO NOT STOP COMPLETELY. That’s what you would expect us to believe; that I would stop working entirely just to spite the govt, but crippling myself in the process.”
Yes, I have more questions. Did you read past the first paragraph below the blue quote section, the one which starts with the word ‘Imbecile’, which, btw, I am surprised to see here, because I thought that was one of Ben’s banned words?
Just in case you had no time to read past that paragraph, I posted in the next one. If I understand the main point, it is that a really rich greedy guy (like, say, a Wall Street banking CEO who stole his multi-million dollar bonus from the American people) is so bloody greedy that he would be willing to keep working a little more just to get another penny on the marginal dollar of earnings. In other words, greedy people have a higher marginal utility of wealth than others.
Any questions, Straw Man Eddie?
“Who is it you are imagining to face a 99% marginal tax rate?”
Eddie was not imagining this; it was an example thrown by LesserFool, NOT a strawman.
Eddie might have a hard time distinguishing between an example and a straw many, or he might pretend to have a hard time making the distinction, and we will never know which it is. Reading one of his posts is like listening to George W. Bush give a speech, never knowing whether he just looks and sounds really, really dumb, to make the rest of the really dumb people who voted him into office feel better about how dumb they are, or if he really, truly is as dumb as he looks and sounds.
In his defense, George W. Bush always seemed and acted much brighter than Dan Quayle ever did (Daddy Bush’s VP).
Sorry, I meant marginal when I said incremental. And I do have a goddamn clue; the whole point is to stop these pigs from “working that extra hour”. As if their tenth million comes from putting in a couple of extra hours a week. Give me a break.
What the 99% rate achieves is it puts a damper on the size of corporations. I actually agree with you here. Mr CEO determines that there is no benefit to his company growing bigger than X market cap because he is not seeing that much extra profit. So he stops GROWING, which is my point; this is a GOOD thing because it will prevent the advent of govt-subsidized megacorporations. He does not stop WORKING, which is what you seem to think is going to happen.
Maybe I wasn’t clear; if an entrepeneur like Bill Gates manages to create a megacorp on his own steam, following all existing regulations and not sucking on the govt teat, then I don’t wish a 99% tax bracket on him. He can stay at the 45% or whatever bracket, employ thousands of people and make you happy.
But a single dollar from me, the taxpayer, and the 99% bracket immediately comes into force, staying that way until the dollar has been repaid 10x. That’s right. I want a return of 1000% on my money. Since I’m the lender I get to set the interest rate. The whole point is to discourage anyone from ever borrowing from me.
Like I said above, I do agree with you here so there is nothing to refute. And I stand by my position. Here’s another reason: I think that when people go above a certain level of wealth they often get lazy. And greedy. Not sure what that level is; it probably depends on the person. But I’d be willing to bet that - assuming the level of ability to be equal - a guy lower down the food chain earning less would be MORE inclined to innovate and get to his pinnacle than the fat cat who is already there. Many of us would have seen this in our companies: often the hardest, if not the best, work is put in by newbies out to prove themselves and not by the tenured architects who simply do not have that hunger to succeed.
There are obviously exceptions to this rule but I don’t think it justifies the legalized raping of the rank-and-file across the board by anybody who simply happens to be an executive.
Tell you what. You stop assuming our motives and we’ll stop putting words in your mouth. Deal?
This is a democracy, right?
A. I get to tell you what I want in my ideal world, the same way that you throw your drivel in our faces on a daily basis. I don’t expect you to agree with what I say.
B. Perhaps car salesmen deserve a break. After all they are already screwed with the advent of online price-checking. But real-estate agents clearly have an unfair and undeserved monopoly on housing transactions. I predict that eventually they too will fall victim to the internet; it’s only a matter of time. You know what? Traders, as long as they bear the full risk and don’t have inside information, are fine upstanding people in my book. But millions in fees to take a company IPO? Or for a merger or acquisition? For what, to do some paperwork? I’m sure those costs are passed on to the company shareholders. Which is fine I suppose, as long as it’s not the taxpayer down the line.
C. I don’t think sportspeople, singers, or actors deserve the money they make either. But those spheres are in my opinion examples of true free markets. If the sheeple don’t pony up for game tickets, movie tickets, CDs and what not, those salaries will collapse. If that’s what the people want, then good on those at the top of those industries. I can appreciate raw talent, self-made (or genetic), even if it doesn’t actually produce anything.
Then you should be vehemently protesting along with the rest of us at what is happening. You are not just fending for yourself. You are taking care of AIG, GS, BofA, GM, Chrysler, CIT (oops! Let’s just write that one off), etc. etc. ad nauseam. Just because you don’t see the money disappearing from your wallet doesn’t mean you aren’t becoming poorer by the day because of all this charity work you’re doing.
The day hyperinflation conquers us, or rioters come and destroy your household, or you need some emergency supplies and you don’t get any from your neighbours because you’ve been a selfish dick towards them THEN you will start caring. And then it will be too late.
This is a democracy, right?
NO, wrong. And it makes all the difference in the world…
“In the case of CEO salaries, THEY GET TO DECIDE THEIR OWN by being on the BOD of each other’s companies and of course, holding the govt of the day by the balls via lobbyist funding. This is an oligarchy, pure and simple.”
Lesser, very well articulated! I have a great appreciation for those who invest their own time and money to start up a business and employ people. That is hard work and the rewards should not be controlled by some eggheads in Washington. However the oligarchal feeding at the trough by CEOs and executives of BAILOUT financial recipients is not capitalism at work. It is cronyism at work.
Goldman Sachs has become the financial government inside the government, dictating policies where friends of Goldman Sachs get big rewards and the enemies get closed. They have become indistinguishable from the Federal Reserve and Congress in their power. This results in massive overpayment to their buddies at the top of the banking/finance heap, with taxpayer money.
It is graft and corruption on the grandest possible scale. These very guys created a Depression; and now orchestrate how they get rich off of the problems you and I have to live with.
My, my, my…finally
ditto whew
Hello HBBers, I am a long, long-time reader but rarely comment. This morning my boss asked me to find out if we can see records of commercial property sales for the last five years in LA County. After a brief and unfruitful web search, I knew just where to turn! If anyone can let me know where to find this data, I would much appreciate it. I will look for responses here. Thanks advance! And thank you for the years of entertaining & educaitonal reading.
Crickets.
G major refrigerator hum augmented seventh crickets. Sink drip percussion in fourth measure.
commercial property sales for the last five years in LA County ??
I am assuming you mean Los Angeles…This data is available but it usually originates with the large commercial brokerage houses…It would be very difficult to do it if you don’t have the data bank resources…I would turn to Marcus & Millichap or CB Richard Ellis to get this info…Hope this helps…
That helps very much, thank you! I will look into both of those.
You can buy that information from Reis, Inc.
http://www.reis.com
It’s sales database goes back to the start of 2005. The rent, vacancy, construction and net absorption database goes back to 1980.
Oh looking at Redfin today. Seeing a house in Hermosa Beach sold in 2002 for 420K and is currently listed at 820K.
There is a long long way to go.
420K was the old loan limit I guess. Also that would be about 4.2x income for that area.
This is less than 1.5 miles from the beach in that area of fringe that is still “beach”. I suppose some sucker will jump in at 729K range.
I don’t think we’re even halfway through this market crash. A lot of the stronger hands are still burning cash, waiting for a turnaround or miracle. Part of the reason for the dramatic fall in the median is due to the weakest hands on the bottom end folding, and those properties selling for huge discounts, distorting the median as more expensive properties continue their terminal mls rides.
“A lot of the stronger hands are still burning cash, waiting for a turnaround or miracle.”
That part I thoroughly enjoy — you might call it the revenge of the middle class Schadenfreudist.
Normally I don’t comment on here but love the blog. Polly you can buy a replacement for the lighter socket at Pep boys and the wires can’t be hooked up backwards as one has a round plug on it that goes to the center post and the other one is a little spade. It should cost maybe four or five dollars to fix.
Thanks, Rich. I’m going to check it out this weekend. Plus apartment hunting as well. Good times.
World’s largest and most lavish cruise ship makes waves as she hoves into view off Portsmouth coast. 02nd November 2009
Nautical fans got a treat today when the world’s biggest cruise ship sailed into British waters.
The 20-storey, 1,180ft Oasis of the Seas dwarfed the Isle of Wight ferry as it made its way along the south coast to drop off hundreds of workers who have been making the finishing touches to its on-board luxuries.
Enthusiasts flocked to the cliffs of Hampshire in the hope of catching a glimpse of the ship - not that they could miss it. It is three times the size of the QE2 - and five times as big as the Titanic.
It is en route from its shipyard in Finland before crossing the Atlantic for its official unveiling in Florida.
The £855m vessel can accommodate a staggering 6,360 passengers and 2,160 crew in recession-defying luxury, with cabins including ‘multi-level urban-style loft suites’ boasting floor-to-ceiling windows.
On-board entertainment will be enough to satisfy even the most jaded millionaire, including the aquatic amphitheatre, handcrafted carousel, zip-wire racing diagonally down nine decks and even what is billed as the world’s first floating park.
It also features not one but four swimming pools plus various whirlpools, volleyball and basketball courts, rock climbing wall and a ‘youth zone’ with theme parks and children’s science labs.
The ship is so vast it is divided up into ‘neighbourhoods’ with special themes, including a tropical zone with palm trees and vines among the total 12,000 plants on board.
Limbo dance: The Oasis Of The Seas clears a crucial obstacle, lowering its smokestacks, to squeeze under the Great Belt Bridge as it leaves the Baltic Sea with barely 2ft to spare.
Last night, at shortly after midnight, hundreds of people gathered on beaches at both ends of the Great Belt Bridge, which connects the Danish islands of Zealand and Funen, to see the ship make its way out of the Baltic Sea.
It was a very tight squeeze indeed considering there was only a 2ft gap between the ship and the bridge as it passed beneath. It only cleared it by lowering its telescopic smokestacks.
‘It was fantastic to see it glide under the bridge. Boy, it was big,’ said Kurt Hal, 56.
Details of today’s arrival in the Solent were kept a closely guarded secret, and the ship won’t come into port, instead meeting a tender for the transfer of around 300 shipyard workers.
But enthusiasts kept a close eye on websites charting its course.
Once the drop-off has been made, the Oasis will make its way across the Atlantic where operators Royal Caribbean - who have already ordered a sister ship, Allure of the Seas - will officially name it before its first cruise, to Haiti next month.
Company officials are banking that its novelty will help guarantee its success.
Sensitive to charges of conspicuous consumption, its builders say it is also the world’s most environmentally-friendly cruise ship, reusing all its water and discharging no sewage into the sea.
Staggering: The 20-storey liner, which is five times larger than the Titanic.
The cruise liner is so vast it is divided up into ‘neighbourhoods’ with special themes. It boasts 21 swimming pools, a carousel, a rock climbing wall and even a science lab.
What shall we do today? Take your choice from surf machines, volleyball and basketball courts, a miniature golf course and even an 82ft zipline. There are even two 43ft-high climbing walls.
Grand old lady: The Oasis of the Seas is more than three times the size of Queen Elizabeth 2 which has been at sea for 40 years
OASIS OF THE SEAS - Will it fit in my marina?
Length - 1,180ft; weight - 225,282 tons; decks - 16; passengers - 6,360; crew - 2,160
Cost to build - £800million; price for a two-week cruise - from £1,300
630,000 gallons of paint needed to decorate it
2,300 tons of water in its swimming pools
12,000 plants on board including hundreds of palm trees
3,300 miles of electrical cables to keep the lights in its 2,700 cabins blazing.
http://www.dailymail.co.uk/news/article-1224504/Ocean-Of-The-Seas-Worlds-largest-lavish-cruise-ship-squeezes-Danish-bridge-sailing-British-waters.html
I always thought “hove” was a past tense of “heave” but am willing to be corrected…
Dow up 68 in the last 30 minutes. GO PPT GO!!
Geithner “Burned Billions,” Shafted Taxpayers on CIT Loan, Prof. Bill Black Says
Nov 02, 2009 Peter Gorenstein in Investing, Recession, Banking
Another one of the nation’s largest lenders has filed for bankruptcy. On the brink for months, CIT filed for Chapter 11 protection on Sunday.
The prepackaged plan allows CIT to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses. The plan keeps CIT’s operations alive and makes it possible for the company to exit bankruptcy by year’s end.
But here’s the bad news: While senior debt holders will only lose 30% of their investment, we, the U.S. taxpayer, will lose the entire $2.3 billion we lent the company this summer.
William Black, professor at the University of Missouri-Kansas City School of Law is dumbfounded. “We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers.”
Black, a former top federal banking regulator, blames Treasury Secretary Timothy Geithner for negotiating such a bad deal on behalf of the American public.
His argument goes as follows:
The government was in no way obligated to lend the struggling CIT money and, in fact, initially refused to provide it bailout funds. More importantly, being the lender of last resort, the government should have guaranteed we’d be the first to get paid if CIT eventually filed Chapter 11. By failing to do so, “it’s like he [Geithner] burned billions of dollars again in government money, our money, gratuitously,” says Black.
Black believes the problem stems from regulators’ fears that if the banks recognize a loss on the bad assets it will create a domino effect that will wipe out the entire financial system.
“If that’s true we’ve got to get rid of capitalism,” he warns, “because if we can’t recognize losses in a capitalist system we have no future.”
“We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers.”
‘We’ = Timothy Geithner, former President of the Federal Reserve Bank of New York City?
Volcker’s about to be interviewed on CNBC.
Please post a link to a video transcript if one becomes available.
It was pretty worthless. He was on his way to give a speech, and seemed preoccupied. Here’s the tail end of it:
http://www.youtube.com/watch?v=Dg2FCda7fng
I don’t think Volcker has any sway with the current admin. More of a token from the past. Time for him to hit the front porch at the sunshine home.
Online job ads tumbled in October
Business First of Buffalo
* Online job ads drop in Milwaukee are
* Sacramento’s online job ads plummet
* Conference Board: Consumer confidence erodes further in October
The slumping job market showed no sign of improvement in October as advertised vacancies on the Internet declined by 17.2 percent in the Buffalo area.
The Conference Board’s Help-Wanted OnLine Data Series showed 14,300 openings locally last month compared to 17,200 a year ago. new ads were off 15.4 percent to 9,500 from 11,200 year-over-year.
The Rochester area suffered a 23.1 percent decline in online job openings, dropping to 10,500 from 13,700 in October 2008. new ads fell 23.8 percent to 6,900 from 9,000 a year ago.
Nationwide, the Conference Board said such vacancies declined by 83,200 to 3.28 million in October.
The report said online labor demand has been relatively flat since the low point in April 2009, increasing a modest 117,000, or slightly less than 20,000 per month. The October decline reflected dips in labor demand across much of the nation.
From another website in a galaxy far far away….
This should come as no surprise but Ron Paul says Federal Reserve Policy Audit Legislation ‘Gutted’
Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.
The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.
“There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.”
Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.
Keith Kelly, a spokesman for Watt, declined to comment and said Watt wasn’t immediately available for an interview. Watt’s district includes Charlotte, headquarters of Bank of America Corp., the biggest U.S. lender.
…who is looking out for the little people again?
“Watt’s district includes Charlotte, headquarters of Bank of America Corp., the biggest U.S. lender.”
Watt a coincidence!
Bad-dum-bum.
(Note to self - add “Mel Watt” to my “evil list”)
I forgot the link to the headlines to give credit where it’s due.
from bloomberg com apps news pid=newsarchive&sid=atc2o1ijLRno
Enjoy.
Wow! That is pretty appalling.
Canandaigua fire department layoffs?
The City of Canandaigua could layoff half of its fire department.
It’s a proposal coming from the City Manager to close a $1.7 million gap in the 2010 budget.
The city’s 14 firefighters are outraged and threaten a lawsuit if the city approves the measure. Some merchants say they’re scared.
For more Rochester, NY news, go to our website, http://www.whec.com.
Build brick, mortar and concrete houses, don’t overstuff it with inflammable crap, go easy on the candles, and soon you can live with half the fire department you had.
Bats in the U.S. Face Mysterious Disease.
Bats are vital and in their own way, adorable members of our ecosystems and essential predators for flying insects. Now entire populations are being threatened by an emerging and fatal disease known as White-Nose Syndrome.
White-nose syndrome has swept nine eastern states over the last two winters, killing bats at hibernating sites at rates approaching 100 percent. At this point, the disease shows no signs of slowing its spread across the country, wiping out bat populations along the way.
The implications for ecosystem health, agriculture and forestry — and even public health — are potentially enormous. Many North American bats are already listed as threatened or endangered under the Endangered Species Act. Without decisive action, white-nose syndrome could precipitate the demise of several species in the United States before scientists even have a chance to determine the cause and a possible cure for the disease.
The most urgent need for addressing this crisis is increased funding for research, coordination, and management. Multiple federal and state agencies as well as private institutions are trying to cope with white-nose syndrome; none have the resources necessary to deal with a threat of this magnitude.
I think it’s called the Ginobili Virus…
http://www.youtube.com/watch?v=g1DpjBEwekE&feature=related
Isn’t this how natural selection is supposed to work? Some subset of the population will be immune, and ultimately will flourish. Those without a natural immunity will not…
I hate how we feel the need to intervene and “engineer” everything in the world around us.
Testify. I’m sooo over it.
If you don’t mind once that “natural selection” has started to impact humans, sure.
The same logic could be used to ignore colony collapse disorder, which would almost certainly, directly and significantly, affect humans. (not that I want to open that can of worms)
If you don’t mind once that “natural selection” has started to impact humans, sure.
I’d argue it should affect humans more than we allow it to. On a purely biological level, we’ve been weakening the species with all of our medical treatments. Rather than selecting for a better-adapted gene pool, we’ve kept the ‘inferior’ genes alive and kicking. And yes, I realize that my genes might be some of those that are selected out if we cease to do this.
It’s an interesting thing to think about..on one side, the ability to come up with ways of beating disease is a trait that is being selected for. However, in the process, we’re keeping around arguably weak genes. There’s really nothing to measure “right” vs “wrong” against…it just kind of is.
I think we’ve all entertained amusing ideas about a return to “natural selection”, and I think we’ve all joked about America heading towards Idiocracy. This is probably the first time outside of the Unabomber I’ve heard someone seriously suggest we might benefit from the destruction of civilization, however. And I think that’s what would be required to return to a society in which the weaker are allowed to be killed off.
Some might argue that using our brains to choose to save other organisms, and other people, who might not otherwise survive, is just an extension of natural selection. We are a part of nature, after all.
Drummin,
You said:
“There’s really nothing to measure “right” vs “wrong” against…it just kind of is.”
Well, yes there is a measure - I’m just glad you recognize your genes might be some of those that are selected out.
Children need protection from…”it just kind of is.”
Natural selection is one thing. Getting poisoned by Monsanto is quite another. That’s not natural selection. That’s organisms dying because of a dickass better-living-through-chemistry, evil corporation.
Agent Orange, anyone? Ask the Vietnamese with Agent Organge offspring about natural selection.
This is probably the first time outside of the Unabomber I’ve heard someone seriously suggest we might benefit from the destruction of civilization, however.
I’m not sure where you got that was what I was saying? I was simply pointing out that modern medicine has allowed us to keep certain, arguably ‘less desirable’, genes in the gene pool that otherwise would have been selected against.
Some might argue that using our brains to choose to save other organisms, and other people, who might not otherwise survive, is just an extension of natural selection.
This is a point I was making above by saying “the ability to come up with ways of beating disease is a trait that is being selected for.” Perhaps I just wasn’t articulate enough. I’m sick and all Nyquil’ed up, so my brain isn’t working at full capacity.
Children need protection from…”it just kind of is.”
Why is it that children are special in this way? I don’t get that…either genes code for qualities/behavior that is better adapted to survival or they don’t. Adult, child, etc, it’s all the same.
Roubini Predicts “Mother of All Carry Trade Unwinds”
Nouriel Roubini has officially left the “hedging your bets on the economy” camp. He has declared the markets to be frothy because super low dollar borrowing rates have turned the greenback into the funding currency for the carry trade.
Far more important than the peppy rally in the stock market is the resumption of early 2007 style risk taking in the credit markets. As Gillian Tett of the Financial Times noted last week:
Earlier this month, I received a sobering e-mail from a senior, recently-retired banker. This particular man, a veteran of the credit world, had just chatted with ex-colleagues who are still in the markets – and was feeling deeply shocked.
“Forget about the events of the past 12 months … the punters are back punting as aggressively as ever,” he wrote. “Highly leveraged short-term trades are back in vogue as players … jostle to load up on everything from Reits [real estate investment trusts] and commercial property, commodities, emerging markets and regular stocks and bonds.
“Oh, I am sure the banks’ public relations people will talk about the subdued atmosphere in banking, but don’t you believe it,” he continued bitterly, noting that when money is virtually free – or, at least, at 0.5 per cent – traders feel stupid if they don’t leverage up.
“Any sense of control is being chucked out of the window. After the dotcom boom and bust it took a good few years for the market to get its collective mojo back [but] this time it has taken just a few months,” he added. He finished with a despairing question: “Was October 2008 just a dress rehearsal for the crash when this latest bubble bursts?”
http://www.nakedcapitalism.com/2009/11/roubini-predicts-mother-of-all-carry-trade-unwinds.html
He is a gloomster, and what’s even worse, he’s a Keynesian.
Half of US kids will get food stamps, study says.
Nov 2 04:01 PM US/Eastern
AP Medical Writer
CHICAGO (AP) - Nearly half of all U.S. children and 90 percent of black youngsters will be on food stamps at some point during childhood, and fallout from the current recession could push those numbers even higher, researchers say.
The estimate comes from an analysis of 30 years of national data, and it bolsters other recent evidence on the pervasiveness of youngsters at economic risk. It suggests that almost everyone knows a family who has received food stamps, or will in the future, said lead author Mark Rank, a sociologist at Washington University in St. Louis.
“Your neighbor may be using some of these programs but it’s not the kind of thing people want to talk about,” Rank said.
The analysis was released Monday in the November issue of Archives of Pediatrics and Adolescent Medicine. The authors say it’s a medical issue pediatricians need to be aware of because children on food stamps are at risk for malnutrition and other ills linked with poverty.
“This is a real danger sign that we as a society need to do a lot more to protect children,” Rank said.
Food stamps are a Department of Agriculture program for low-income individuals and families, covering most foods although not prepared hot foods or alcohol. For a family of four to be eligible, their annual take-home pay can’t exceed about $22,000.
“This is a real danger sign that we as a society need to do a lot more to protect children.”
Well we are keeping them from starving. Hopefully we won’t stop doing so.
Tennessee manufacturing job losses mount
Memphis Business Journal
Tennessee has lost the more manufacturing jobs in the last year than it has in the past 12 years, according to the 2010 Tennessee Manufacturers Register.
The report states Tennessee has lost 41,537 manufacturing jobs since September 2008, compared to 15,110 of jobs lost between September 2007 and September 2008.
Since 2001, when the state had 547,494 manufacturing jobs, Tennessee has lost 26.4 percent of those workers, giving the state 403,030 manufacturing employees.
Tennessee has a total of 7,711 manufacturers, with transportation equipment being the highest employment sector in manufacturing.
Those jobs have dropped 20.6 percent in the last two years because of the closure of Peterbilt Motors Madison plant, which affected 2,000 workers, and layoffs at Nissan’s Smyrna facility.
“As with the entire nation, the recession continues to hit Tennessee’s core sectors, while the faltering housing market has affected industries such as wood products, furniture and building products,” Tom Dubin, president of Manufacturers News, said in a statement.
What a shock. I never would have thought over regulation, absurd union demands and high taxes would lead to manufacturing jobs going overseas. Who could have possibly predicted such a thing?
Just wait until card check passes. You think manufacturing jobs are vanishing now…you aint seen nothing yet.
Great! Now we have a Too-Big-To-Fail Tool company:
http://finance.yahoo.com/news/Stanley-Works-tool-maker-to-apf-420866674.html?x=0&sec=topStories&pos=main&asset=&ccode=
Wow - being a big do-it-yourselfer, I’m ashamed to admit that I honestly thought Black & Decker was owned by Sears. I didn’t know it was an independent company.
I’m also amazed to find that Stanley is bigger. They seem to be in a lot more non-consumer stuff than B&D.
Little help guys: Friend of mine is missing a 15 yr old daughter, pass it along where you can.
http://www.mmahawaii.com/component/content/article/1-latest-news/1929-missing-person-alert-15-year-old-girl-meghan-olcott-hilo-hawaii.html
This is a excerpt from John William’s shadowstats.com last Thursday. My take on it is that we will see commodity price increases beginning to take hold and reflected in many manufactured or processed items. Anything that requires an income stream to own or operate, such as cars, construction equipment, boats, airplanes, or housing will come under selling pressure. Overall employment will decrease, the level of consumer demand will decrease, and maintenance and operating expenses will increase.
Look for renewed selling pressure on real estate.
“The general outlook for the U.S. economy continues to be for severe contraction, with the worst still ahead. The downturn will remain generally unresponsive to traditional stimuli, other than as seen in occasional blips from government giveaway gimmicks. The business contraction is structural in nature, tied to a lack of real growth in consumer income and liquidity constraints from contracting consumer credit. As a hyperinflation unfolds, the current circumstance will evolve into a hyperinflationary Great Depression.
All U.S. recessions in the last four decades have had at least one positive quarter-to-quarter GDP reading, followed by renewed downturn. Such likely will be the case with the growth reported in the initial estimate of third-quarter 2009 GDP, that is, a quarterly GDP contraction for fourth-quarter 2009. With broad money supply in near-term contraction and with no relief to the structural problems impairing household liquidity, there is no economic recovery on the horizon.
As expected, the positive quarter-to-quarter change in third-quarter activity reflected one-time impacts from the clunkers and the first-time homebuyers programs, and a buildup in business inventories that will face liquidation in the fourth quarter.
The estimate of 3.5% annualized real growth for third-quarter GDP included a 1.7% gain from auto sales, a 0.6% gain from new residential construction, and a 0.9% gain from a largely-involuntary inventory buildup, which appears to be understated. In aggregate, those one-time stimulus or inventory items represented 92% of the reported quarterly growth. The nature of the stimulus-related gains was that they tended to steal business activity from the future. The months ahead are the future. Accordingly, fourth-quarter quarterly GDP change likely will turn negative, again.
Separately, in recent reporting, new orders for durable goods are continuing to bottom-bounce, not to recover. Also, the Conference Board just released its September help-wanted advertising number, showing a sharp monthly deterioration to a new historic low level.”
First he says: “The business contraction is structural in nature, tied to a lack of growth in consumer income and liquidity restraints from contracting consumer credit.”
Then he says: “As a hyperinflation unfolds, the current circumstances will evolve into a hyperinflationary Great Depression.”
To me it seems these two statements contradict each other.