A New Upswing Or Retrospective Claptrap?
The Sydney Morning Herald reports from Australia. “Worried that $500,000 is too much to pay for a Melbourne house? The Reserve Bank isn’t worried and it expects prices to climb higher still. In a speech that amounted to a defence of Australia’s historically high house prices, Reserve Bank deputy governor Ric Battellino told a Melbourne housing conference yesterday to expect worse and to recognise that buyers were getting value for money. Prices would climb further because the global economy was growing again and because Australia had entered ‘a new upswing” that would extend its record 18 years of continuous economic expansion.”
“While there was ‘a common perception that house prices relative to household income in Australia are high’, Australia’s population was ‘more concentrated in a few large cities’ than were other populations and Australians had more free income with which to pay for housing.”
”’Australians seem to spend less of their income on non-housing consumption than is the case for US households, with a significant part of this difference explained by lower health costs in Australia,’ the deputy governor said. ‘Australian households, as a whole, appear to have the financial capacity to sustain a relatively high ratio of housing prices to income.’”
“The latest RP Data research puts the typical price of a Melbourne house at around $500,000 after climbing $46,000 over the past year and the typical price of a Melbourne unit at $398,000 after climbing $37,000.”
“‘Census data shows at 2006 there were 8 per cent more dwellings in Australia than there were households,’ Mr Battellino said. ‘Presumably, most of this surplus reflects holiday houses and second houses.’”
“‘Australian households as a whole appear to have the financial capacity to sustain a relatively high ratio of housing prices to income,’ Mr Battellino said. ‘It is certainly the case that the ratio is higher now than it was 20 years ago. However, this is largely explained by the fact that lower interest rates have allowed households to take out bigger home loans without increasing housing loan repayments. In turn this has given households more buying capacity in the housing market, which has been reflected in house prices.”’
The Business Spectator in Australia. “RBA deputy governor, Ric Battelino presented a speech that did everything in its power to justify bubble price structures for Australian housing. This is retrospective claptrap. Australian house prices rocketed to record multiples between 1995 and 2003, provoked by a generational mania that had its principal foundation in a colossal credit bubble fueled by non-banks and banks’ huge offshore borrowing.”
“We were concentrated in a few large cities before then and multiples had not expanded. It was also long before the commodities boom, population surge or housing supply issues. Prices may have been supported and boosted further by the surge in national income after 2003 but, even so, multiples of income remain 80-odd per cent above historic averages.”
From News.com.au in Australia. “More than one third of Australians plan to buy a property in the next two years despite concerns over higher living costs and rising interest rates, a survey…commissioned by mortgage broker Mortgage Choice, found. Mortgage Choice corporate affairs manager Kristy Sheppard said more borrowers were now taking ‘ownership’ over their financial situation.”
“As a housing market service provider, Mortgage Choice is pleased to see 41 per cent of respondents planning to buy property in the next two years and 43 per cent of them planning on an investment property,’ Ms Sheppard said.”
“The Australian housing market has emerged from the financial crisis relatively unscathed compared to its global counterparts, which would probably be part of the reason why 64 per cent of respondents believe house prices will rise in the period to November 2010.”
“Ms Sheppard said that while many borrowers were concerned about rate rises, 40 per cent were prepared for increases of at least five percentage points, a much higher figure than was forecast for the next few years. ‘This suggests many borrowers can comfortably repay their home loan sooner, if they put their mind and budget to it,’ she said.”
From Smart Company in Australia. “Over $68 billion worth of property developments are planned or underway on the Gold Coast, with the value of the work across all sectors now higher than expected during 2007, a new report has revealed. But head of property research at Advisor Edge, Louis Christopher, says the market is flooded and developers would do better to seek investments in other areas.”
“The figures also come after insolvency experts PPB announced earlier this week that 25% of all resorts and hotels on the Gold Coast are being watched due to fears they may become insolvent. The region was hit hard by the downturn, with housing prices falling up to 40% and several companies falling into receivership.”
“But Christopher says the Gold Coast market is flooded, and investors should consider moving their interests elsewhere as the area is not experiencing a recovery. ‘We are recording thousands of properties on the Gold Coast that have been on the market for over six months, literally thousands of them. This is not a market that has recovered unlike the capital cities throughout the course of this year, and is very similar to what we are seeing in other holiday locations across the country…very weak.’”
“‘At this stage, I think it’ll be very tough for developers to compete in the area unless they’ve got something essentially very, very good, or at or below market value. There is just too much stock listed.’”
“The luxury property boom continues. Yesterday it was $17 million for an unfinished mansion on Gold Coast’s exclusive Hedges Avenue. Today, a mystery buyer has paid $25 million for a mansion in the Melbourne suburb of Hawthorn. Earlier this month, Lachlan Murdoch paid $23 million for a mansion in the exclusive Sydney suburb of Bellvue Hill. He beat a strong field of bidders including Russell Crowe and Nicole Kidman for the property, which has sweeping views of Sydney Harbour.”
“The sudden boom in prestige property comes after a difficult period at the top of the housing market, where prices plunged by as much as 30% in some capital cities. Tony Kelly, managing director of the Melbourne office of valuer Herron Todd White, says an increase in the interest from international buyers is helping to push prices up sharply. The Federal Government’s recent decision to relax foreign property ownership restrictions has led to an influx of foreign buyers at all levels of the property market, he says.”
“‘When you think about what goes on in the southern part of the hemisphere, Australia is really one of the safest places to put money into property. Our economy is very stable and it’s been very strong compared to a lot of other places,’ he says. ‘If you’ve got some money in India and China, then Australia looks like a pretty safe place.’”
“A second contributing factor is a strategy used by agents to take selling campaigns out of the public spotlight and pitch high-end mansions to quiet, cashed-up buyers. ‘What they are trying to do at the minute is really marry somebody who might need to sell quietly with some of this international money coming in,’ Kelly says.”
From Asia One. “Property prices in Singapore jumped an all-time record 14.3 per cent in the third quarter, in tandem with the rise in prices elsewhere, according to some of the latest global data. However, property experts here say the steep rise in housing prices is unlikely to continue, thanks to a slew of government- introduced measures to prevent the market from overheating.”
“Quarter-on-quarter house price changes in Singapore, Britain, Canada, Germany and South Africa are back in positive territory after the financial crisis, according to Global Property Guide’s latest data. In the third quarter, price rises have occurred in 16 countries, and fell in only 11, of the 27 countries that have published their latest quarterly figures.”
“Hong Kong’s housing market, meanwhile, has entered a phase of irrational exuberance. House prices there rose by 3.1 per cent over the year to Q3, a significant improvement from the 7 per cent year-on-year decline ending Q2. In the three months to September, house prices jumped 11.1 per cent.”
“As for the Singapore market, some say prices may have already peaked. Mr Donald Han, managing director of real-estate brokers Cushman & Wakefield, noted that mass-market prices are already hovering at peak levels, aided by active pick-up in residential activity for the mid to low-end properties. Sell-out launches of private condos The Caspian near Jurong Lake and Alexis near Queenstown MRT station in Q1 show that confidence and liquidity have returned to the marketplace.”
“‘But Q3 prices have gone up too fast, in too short a time,’ he warned. ‘The steep V-shaped recovery cannot be sustained. The market needs a breather.’”
“But there could be more buzz for luxury properties priced above $2,200 psf.
Said Mr Han: ‘Top-end prices can go up by 25 per cent, as high-end investors look for bargains in Districts 9, 10, 11, Sentosa Cove and the Marina Bay areas.’”
“He also expects prices to climb 11 per cent for high-end units (priced between $1,500 and $2,000 psf) and 7 per cent for mid-tier ones.”
“Meanwhile, investors in Dubai, UAE, have something to be optimistic about: Dubai’s nominal house-price index increased 7 per cent in the third quarter, a significant improvement from an 8 per cent fall in Q2.”
The Associated Press. “Just a year after the global downturn derailed Dubai’s explosive growth, the city is now so swamped in debt that it’s asking for a six-month reprieve on paying its bills — causing a drop on world markets Thursday and raising questions about Dubai’s reputation as a magnet for international investment. The fallout came swiftly and was felt globally after Wednesday statement that Dubai’s main development engine, Dubai World, would ask creditors for a ’standstill’ on paying back its $60 billion debt until at least May.”
“Dubai became the Gulf’s biggest credit crunch victim a year ago. But its ruler, Sheik Mohammed bin Rashid Al-Maktoum, had continually dismissed concerns over the city-state’s liquidity and claims it overreached during the good times. When asked about the debt, he confidently assured reporters in a rare meeting two months ago that ‘we are all right’ and ‘we are not worried,’ leaving details of a recovery plan — if such a plan exists — to everyone’s guess.”
“Then, earlier this month, he told Dubai’s critics to ’shut up.’”
“The more than 2,600-foot (800-meter) Burj Dubai is scheduled to open in January as the world’s tallest building. But many other projects, including a tower even taller than the Burj Dubai and satellite cities in the desert, are still just blueprints.”
“The standstill will likely not immediately affect CityCenter, an $8.5 billion casino complex opening next month in Las Vegas that is half-owned by Dubai World. A Dubai World subsidiary and casino operator MGM Mirage agreed with banks in April to fully fund and finish the six-tower, 67-acre development of plush resorts, condominiums, a retail mall and one casino on the Las Vegas Strip.”
From NineMSN Money. “Brad Pitt, Angelina Jolie and David Beckham are set to lose millions on their luxury homes in Dubai, as the emirate’s debt spirals out of control leaving the future of the housing market hanging in the balance. Nakheel’s Palm Jumeirah development sold 2,000 luxury villas and apartments within a month in 2002, amid the explosive growth of investment in Dubai.”
“At one point, Dubai was said to house 80 percent of the world’s cranes.”
“With Nakheel unable to pay its debts, construction is likely to stall on the island, leaving the luxury villas surrounded by an ugly building site – which could see property values plunge. House prices in Dubai fell 47 percent in the second quarter, compared with a year ago, and Dubai World may be forced to sell off assets – including Nakheel developments - in order to repay its vast debt.”
From Live Mint. “It’s true that Dubai’s problems stem from the surreal happenings in real estate there, with the place being home to the world’s tallest tower and the biggest man-made islands. Real estate prices have fallen by around 50% in the sheikhdom and are expected to continue to fall. At the same time, the debt restructuring is a clear signal that there are still lots of buried mines out there and it’ll be a long time before the world economy will be out of danger.”
“Many of the economies and banks in the West continue to be on life support and their capacity to weather shocks is much diminished. Matters are not helped by the fact that many international banks have lent heavily to Dubai, banks that are still in a vulnerable position and need to raise capital. But if Dubai was a real estate bubble waiting to burst, other emerging markets, too, are overextended. Analysts have been warning about Eastern Europe, with their high foreign currency borrowings and dependence on exports.”
“Vietnam, another darling of emerging market investors, is also facing problems. And finally, while Dubai may be facing severe overcapacity in housing, China, the big daddy of all emerging markets, is also facing overcapacity in a host of industries, made worse by huge growth in credit.”
The Jakarta Globe. “One of the country’s largest property developers, PT Ciputra Development, plans to expand into China with a residential project due to start next year, with revenue of about $1.3 billion expected to accrue over 12 years, the company said on Monday.”
“‘The project, which consists of houses and high-rise units, promises a high profit margin of more than 40 percent gross, which is why we’re interested,’ said Tulus Santoso, a Ciputra Development director.”
“The project will include a total of 20,000 units, with the keys to the first 500 units — about 60 percent of them houses — to be delivered in 2011, he said. ‘In China, individual housing units can fetch three times the price of high-rise apartments.’”
“‘We will have to see later how the China project performs as this is their first venture in China,’ said Natalia Sutanto, a property market analyst at brokerage firm PT Ciptadana Sekuritas. ‘They’ve already been quite successful with their property developments in Vietnam and Cambodia.’”
The Thanh Nien Daily in Vietnam. “National Assembly representatives on Saturday voiced their disagreement with the annual house tax proposed by the finance ministry, saying it would cause adversely impact many citizens. According to the draft submitted early this month, homeowners would have to pay an annual house tax of 0.03 percent of the assessed value, which is based on total construction costs. Houses built for VND500 million (US$27,901) or below will be exempt from this tax.”
“‘With the current per capita income (less than $1,000 a year) the housing tax shouldn’t be levied within the next ten years,’ Ho Chi Minh City representative Tran Du Lich said.”
“Many deputies also said that to effectively curb property speculation, the stated aim of the draft on housing taxes, the draft should target those who own more than two houses. Tax rates on housing area should also be increased, as the proposed one wasn’t high enough to deter land speculation, said deputy Truong Xuan Quy from the northern province of Tuyen Quang.”
“‘The (proposed) tax rates are too low to curb land speculation, especially for land left idle,’ said Le Dung NA deputy from the Mekong Delta province of Tien Giang.”
“Representative Ngo Van Minh from the central province of Quang Nam, said, ‘We should never ask those who only own one house to pay tax,’ as people have already paid taxes when buying constructional materials.”
The Lahaina News in Hawaii. “‘What is happening with the real estate market?’ This is the number one question that I am asked on a daily basis.
The answer? A property priced right based on recent comparable sales, in a good location and in clean, modern condition will sell. In other words, if you are a serious seller, you are now entering your property into a beauty contest with a price war raging.”
“There are 101 pending sales on West Maui, which is up 20 percent from 60 days ago and over the past ten months. On West Maui, there have been 16 residential home sales closed since Oct. 1, 2009. The lowest was $450,000, and the highest sale at $2,800,000 was in Launiupoko. Seven of the home sales were over $1 million.”
“West Maui condo closed sales since Oct. 1, 2009 total 34. The lowest priced fee simple condo was $179,000 for a 486-square-foot studio. Only four condo sales were over $1 million, and none of the condos sold as high as $2 million. Four of the condominium sales were leasehold, and the remaining was fee simple. Price per square foot ranged from $282 to $1,370.”
“This is a far cry from the $9,000 per square foot Paul Brewbaker quoted for elite Hong Kong properties in a recent speech on why Hawaii properties are an investment that international investors should seriously consider. Comparing the price per square foot numbers with international markets can make West Maui a real bargain.”
The Herald News in New Zealand. “Even with two earners, Donna and Terry Victory struggle on below-average wages to feed themselves and their 14-year-old daughter. Mrs Victory, 34, earns $15.94 an hour after almost nine years as a teacher aide for 27.5 hours a week at a school for disabled children in South Auckland.”
“Mr Victory, 37, also earns below the average wage of $25 an hour after 7 years as a fulltime quality assurance technician in the printing industry. Their combined incomes of just $933 a week after tax, averaged over the year and excluding overtime, gives them just $33 a week for food, petrol and other living costs after meeting their automatic payments of $1800 a fortnight for the mortgage, rates, insurance, a car loan and hire purchases on a fridge and washing machine.”
“‘We rely on Terry’s overtime to be able to make ends meet,’ Mrs Victory said.”
“This year that overtime has dried up with the recession, forcing the family to borrow twice from Mrs Victory’s parents. They are getting by now only because the overtime has picked up again since the recession bottomed out in mid-year.”
“Until 2006 they were renting, but the house was damp and Mrs Victory and her daughter Shontelle were constantly sick. When the landlord raised the rent, they applied for a state house. ‘They asked, ‘Are you on a benefit?’ ‘No, we both work,’ she said. ‘Well, you don’t qualify’ they said.”
“‘So then we thought about trying to buy our own house and were lucky enough to get a mortgage broker who secured it against my parents’ house. We had no deposit. We had huge loans from our wedding. We consolidated the loans into the mortgage.’”
“They bought a modest house in Papatoetoe for $279,000, paying off the mortgage at $1200 a fortnight. The interest rate dropped this year. But they used the difference to take a new loan for a car. ‘We don’t earn low enough to get Government help, and we don’t earn high enough to get by,’ she said. ‘We are stuck in the middle.’”
“Until 2006 they were renting, but the house was damp and Mrs Victory and her daughter Shontelle were constantly sick.”
The houses here are crap - almost all are below US building codes from the 1940s.
“When the landlord raised the rent, they applied for a state house. ‘They asked, ‘Are you on a benefit?’ ‘No, we both work,’ she said. ‘Well, you don’t qualify’ they said.”
Yep, they are real chumps. People on benefits in NZ live much better than honest people who prefer to work
“‘So then we thought about trying to buy our own house and were lucky enough to get a mortgage broker who secured it against my parents’ house. We had no deposit. We had huge loans from our wedding. We consolidated the loans into the mortgage.’”
Secured against the parents’ house. That is ugly. NZ is a recourse country. If they default, the banks could take both houses and they could still be left owing money!
“They bought a modest house in Papatoetoe for $279,000, paying off the mortgage at $1200 a fortnight. The interest rate dropped this year. But they used the difference to take a new loan for a car. ‘We don’t earn low enough to get Government help, and we don’t earn high enough to get by,’ she said. ‘We are stuck in the middle.’”
Modest is the only type of house in Papatoetoe! Working class at best, except many have been on welfare forever, so maybe “former working class” describes it best.
Also note that there are no fixed mortgages in New Zealand. They are all balloon notes, most with a very short expiry date, one to five years. So doing a refi in NZ doesn’t have the same effect as doing a refi into a 30 year fixed note in US. These people are so screwed when rates go up. They have no cushion for any resets. Ugly, it will be so ugly. The only hope would be wage inflation, and that isn’t happening.
But the mortgage broker says all will be OK, “This suggests many borrowers can comfortably repay their home loan sooner, if they put their mind and budget to it.”
‘…there are no fixed mortgages in NZ.’
There are also no tax advantages in having a mortgage. Therefore, for most Kiwi’s , paying off your mortgage is the only way to retire. The property rates are low, as is superannuation(SocSec). Older Kiwis are thrifty and used to living on less. The younger generation are becoming more materialistic. A scary thought, considering the fragility of their economy and potential for a HB.
Wow. For several years after visiting beautiful NZ, I dreamed of buying a house in Nelson or Wanaka. The ugly side of living there took a while to uncover, and your comments here extinguished the last flame of that particular dream.
Still a great place to visit, though.
I guess the only person who can afford to live in New Zealand is Peter Jackson.
And wealthy expats. A lot of NZ land is being bought up for exclusive luxury resorts. Way to ruin a delightful place.
To translate from Kiwieze to American English:
Fortnight = Fourteen days, 2 weeks, or, “bi-weekly”
On Benefits = On Welfare
Rates = Property Taxes
Petrol = Gasoline
Hire Purchases = Buying stuff on credit, installments or “rent-to-own”.
Mr. and Mrs. Victory = Another of Ben’s priceless names of irony he finds for us on a regular basis.
What are the imcome tax rates in NZ, I did the arithmetic and it appears to be around 44% at the $85K/year they are earning. Is the buying power of that $85K similar to $85K in the US?
OMG,
All these articles sound like history repeating itself. Doesn’t sound like anyone has learned anything.
Ain’t that the truth?
I’m telling you…the mentality is still very bubblicious around here. Everyone thinks the recession is over and we’re back to the races! People all over talking about “investing” in housing, etc., etc…
Not quite sure what to make of it, but it is disappointing.
We had a chance to enact some real changes that would have done our society some good. Now, because of all the govt interference, we are setting up the next round of FBs — and taxpayers are the explicit bagholders this time.
“Everyone thinks the recession is over and we’re back to the races!”
Everyone is right.
Tell that to Brad Pitt…
When I studied economics, recessions were described as how an economy purges malinvestment The RE bubbles are the biggest misallocation of capital the world has ever seen. IMO, the economy can’t recover until this situation is set right and resources go toward actual productive means, and even then it will be a while until that takes hold.
“The economy can’t recover until this situation is set right and resources go toward actual productive means, and even then it will be a while until that takes hold.”
Stagflation. Capacity in the production of goods and services other than housing is down, and it won’t be so easy to re-deploy construction workers and real estate brokers to other things. I’m see empty shelves, rising prices AND high unemployment in the future, particularly if things turn protectionist or there is a U.S. currency/debt crisis.
‘it won’t be so easy to re-deploy construction workers and real estate brokers to other things’
It’s true. When the Texas oil/RE bubble popped, we felt like we were in a period of stagnation for years. But looking back at it, the economy was adjusting and finding new, better uses for those construction/oil field workers, etc. This is why the sooner we get on with it the better.
IMO, these empty stores, and failed condo towers we see are restorative forces in action. It’s painful, but there is no other way.
That’s pretty much it in a nutshell.
We have evolved into an instant gratification society world wide. Everyone wants what some else has. Does not work that way, problem is, with unfettered intervention by government trying to ‘right’ natural corrections the distortions will continue to drag out for a very long time.
This is not a mere recession. This is a historic financial crisis with global impacts. Rogoff and Reinhart refer to it as The Second Great Contraction. The First Great Contraction in their classification is the one that started around 1929 or so.
The financial crisis isn’t over, as evidenced by the fresh news this week that the dollar is plumbing new lows, Vietnam is devaluing their currency and Dubai is delaying payment on a massive amount of debt.
Perhaps you ought to read a couple of articles on the thread above (or at least read something!) before posting again.
See the economy as a patient.
The patient had full blown peumenonia. He got some anti-biotics. The patient is now feeling better, back to work but still has a runny nose. And during the time he was sick, he lost some weight and is still not back to 100% strength.
You all see that runny nose as evidence that he’s about to lapse into a coma for 20 years.
I don’t use antibiotics, as they increase systemic health risk.
“You all see that runny nose as evidence that he’s about to lapse into a coma for 20 years.”
I see your posts as evidence that you are a salesman of some sort. Honest and accurate assessment are not your thing.
“I see your posts as evidence that you are a salesman of some sort. Honest and accurate assessment are not your thing”.
You have a 50-50 chance of being correct as to Eddies paycheck getter, seeing as how there are only two lines of work in the world. Sales or service. Many folks will try and refute that, however it can’t be done.
Eddie ,you cannot be for real . Come on fess up ,your a computer-generated mouth piece that has a program much the same as Larry Kudlow is and all the other Cheerleaders .
Eddie ,you never seem to mind that money is being stolen from one group to aid another group ,so fair play must not be programmed into your computer .
If your not a computer generated PR mouth piece ,you must be
a party that is benefiting from the rescue packages . On the one hand you act like a capitalist ,but you don’t mind communist rescue packages where it doesn’t matter who the bag-holder is ,especially if its the taxpayer .
This is not a issue of seeing a runny noise and going paranoid
over it . This is a issue of knowing the patient is dead and they are being propped up to look like they are alive .
OK, let me restate my point. Eddie either works in a field such as sales, PR, politics or scam artistry, where lying is a valued skill for bilking others out of their money, or else he has missed his calling.
So according to the HBB crew, I am a PR rep, a salesman, a real estate agent, a banker, a health care lobbyist. I probably missed one, hard to keep up with all my imaginary professions.
HW:
I’ve said this numerous times but here it is again…
I don’t believe govt bailouts are the best thing to do.
But
1. I can’t control what happens.
2. If I can capitalize on the bailouts I will.
You all I think agree you can’t control it either. But unlike me instead of capitalizing on the bailouts you throw hissy fits and talk about how unfair the world is. I think really the anger displayed here is some kind of anger that nobody consulted you for your opinion before deicing on the bailouts more than than the bailouts happened.
Eh, don’t take it too badly, m’dear. According to these yahoos, I supposedly wear horn-rimmed glasses and order blueberry smoothies at the gay bar.
“I am a PR rep, a salesman, a real estate agent, a banker, a health care lobbyist.”
You mischaracterized my post (probably deliberately). I did not say you are any of those. I merely suggested you had a talent for lying which would be wasted outside a profession in which deception skills offer a competitive advantage.
I don’t get this? How much of a “salesman” do you need to be when you have Cap Gains Exemption, Mortgage Interest Deduction ( property tax deduction ) 8K credit, 15k credit? 2nd home deduction and 4% cost of money at your back?
The bigger “the order”, the bigger the write off! Guys, the problem… is that no one knows HOW to sell any more! It’s a dead art ( along w/ s-e-r-v-i-c-i-n-g what you sell ) All we’ve managed to impart on our kids is discounting until we’re well into the low single digit profit margin and then cry to DC for “breaks”.
That IS… how we do “business” any more, isn’t it?
“So according to the HBB crew, …”
P.S. I am not the HBB crew. But you definitely are the strawman king of the HBB.
Eddie, how do you plan to “capitalize” on the bailout? Start your own bank? Sell your advising services? Trade gold?
It seems to me you’re spending very little time capitalizing and a lot of time arguing with us whiners.
Why do you waste your time on us mere mortals, anyway? What value do we have to you?
Well I seriously doubt Eddie is or was a DJ…..you need great people skills for that…….ooh ooh zinger…LOL
“I think really the anger displayed here is some kind of anger that nobody consulted you for your opinion before deicing on the bailouts more than than the bailouts happened.”
For someone who thinks so little, you sure do pretend to know a lot about what many others think.
Bear:
And from my viewpoint its also a freezing of communications the likes I have never seen before.
No matter how many resumes you send or even craft, or ask just basic questions about your company…people just don’t respond.
I really don’t think its me ….but it is super frustrating and being here does help me cope. So thanks all.
———————————————–
This is not a mere recession. This is a historic financial crisis with global impacts.
My phantom professions have been claimed by more than you, therefore I used the “crew”.
BTW is there Goodwin’s law for “straw man’” yet? If not someone should come up with it.
“So according to the HBB crew, I am a PR rep, a salesman, a real estate agent, a banker, a health care lobbyist. I probably missed one, hard to keep up with all my imaginary professions.”
Don’t forget nun! I called you an elderly Guatemalan nun. Just testing the waters here… to see where you’ll bite.
I still think you’re a mtg. huckster.
I’m a mortgage huckstering, PR pushing, health care lobbying salesman who works as a banker on the weekends and sells real estate during lunch hours. Wow.
Eddie, you’re not Ben’s alter ego are you?
Been lurking here a long time (since spring 2007) and perhaps it’s time to leave a more substantive post.
Y’all are one of the more ‘together’ groups of bloggers to be found on the net, so it’s always a surprise to see you keep feeding Eddie (Joey? Haskell?) the one thing he craves: attention. Actually it is probably not so much the attention he craves as it is the disturbing-the-sh** factor. He keeps pushing all the obvious buttons, and folks keep responding, long after he’s walked away laughing.
One of the more obvious buttons is the “but I thought all you people believed xxxxxx”. The giveaway part is emphasized. Another clue is the marching army of animated strawmen that accompany any statement he makes.
While it might not make Eddie go away right away if everyone stops feeding him, it will certainly hasten the day that he realizes he can’t disturb the sh** too much here anymore.
Ben & gang, this is a fantastic blog .. please keep up the good work.
Curious, why are you posting, Ed, if you don’t like any of “us”, or the ideas posed?
What attracted you to this blog? I really am interested.
How did you find HBB? Curiouser and curiouser!
P.S. I am not the HBB crew. But you definitely are the strawman king of the HBB.
Jumping ahead without reading all the comments to his post, but to be fair, PB, Eddie has been accused of being most of those things, at one time or another. Not by you, but by various members of the HBB family.
Though, he did omit “computer program” from his list.
Nudge, nice to hear you post/say, what I have been thinking.
Step away from “the button”!
‘Though, he did omit “computer program” from his list.’
Not to mention rocket scientist…
“He keeps pushing all the obvious buttons, and folks keep responding, long after he’s walked away laughing.”
I can’t speak for others, but I occasionally get on the ‘yank Eddie’s chain’ bandwagon to alleviate boredom. I am sure there is some reciprocity in this respect.
I do find it quite unfortunate that he seldom if ever makes a comment that fails to reek of bias or bigotry, but it takes all types.
I go long periods of time not responding to Eddie ,but than I get in the mood to use him to get the conservation in to deeper levels . It’s always nice to have crazy talking points like Eddies to drive home points on a deeper level . If anything Eddie
is great to have around . Sometimes Eddie does come up with a good point that can’t be ignored ,(not that often)
But the view that Eddie has that many posters are just belly-aching about what happened and he is superior because
he is going to opportune on that which can’t be changed is so
in sink with his overall MO .
It would be the same as trying to convince someone that cancer is good and you just need to deal with it and learn how to use it to your advantage . No Eddie ,you have to kill the beast before it kills you . What Eddie doesn’t get is that these short term solutions don’t really solve the underlining problems and his short term selfish thinking is going to come back and bite him in the face some day . You still think that a small fraction of the population can be superior and take advantage of all the rest and the ship won’t sink eventually .
conversation …not conservation
Perhaps a physics principle is in play here — the Law of Conservation of Eddie?
Comment by oxide
2009-11-27 09:23:41
“Eh, don’t take it too badly, m’dear. According to these yahoos, I supposedly wear horn-rimmed glasses and order blueberry smoothies at the gay bar.”
funniest post I’ve seen on this blog in a l-o-n-g time…
(Don’t know if it’s blueberry smoothies this year, I believe it’s anything to do with chai tea.)
By the way Eddie . You claim this blog of people know that they can’t control what happened or what will happen ( this is your implication ).
I think the one thing that scares the Corrupt powers the most
is that they are going to be exposed ,therefore they continue to
spend major bucks with their PR campaigns in a attempt to
confuse the public . The Corrupt power brokers know that keeping people ignorant and sidetracked is their best defense .
One of the power brokers best ploys is to lead people to believe
that nothing can be done about their Reign of Power or they try to convince people that they are the good guys that are there to save them from the left or right or some other evil force .Hank Paulson was there to save the Financial systems and restore the credit markets and he immediately just gave capital injections with no requirements to the bailed out entities .Anything to keep from having it exposed just what
the thieves actually did and are still doing .
So,no Eddie I don’t agree that nothing can be done ,and I believe that the Majority is actually more powerful than the band of thieves ,so keep on fearing truth getting out .
I guess a runny nose = Dubai Debt Default, Commercial Real Estate Defaults (See Second Inning), growing unemployment, 15% CC default rate, continued massive foreclosure rate, record bank default rate, record national debt, massive municipal and State losses. Yup, the patient is doing fine, just a runny nose…
Did I read that right that Eddie said in essence that some posters or me had anger because we weren’t consulted before they did the bail-outs and we or I was more mad about that than the actual bail outs ? See what I mean about his crazy statements sometimes .
But ,let me assure you Eddie ,I don’t get calls from DC asking for consultations on what they should do and I had no expectation
that it would happen ,so it could not be possible that this is what I’m angry about as you suggested in your post .
“…nobody consulted you for your opinion before deicing on the bailouts…”
The funny thing is that I have seen fairly strong circumstantial evidence that at least some folks in high places might be reading what we post here, or at least thinking along similar lines. I suppose the fact that their ideas parallel some of our suggestions could be coincidental. Great minds think alike, you know…
Here is further evidence of resonance between discussion here and what policy makers are pursuing as remedies for the broken banking system.
I personally disagree with the notion that an audit equates to “poking with pitchforks” or an “attack on the Fed.” Come on — every other bank on the planet has to undergo the occasional audit. Why shouldn’t Americans know which highly-bonused Wall Street banks are getting bailed out, even as many on Main Street see their jobs and houses taken away?
United States
The Federal Reserve under attack
Poked by pitchforks
Nov 26th 2009 | WASHINGTON, DC
From The Economist print edition
Curbs on the Fed’s independence are advancing through Congress
POPULISTS and bankers have been at odds since America’s earliest days. Its first two central banks were shuttered in the 19th century in part because of their perceived closeness to financiers. In the wake of the financial crisis those tensions have bubbled back to the surface. The central bank is again in the cross hairs.
On November 19th the financial services committee of the House of Representatives voted—over the objections of its chairman, Barney Frank—to add a provision to a regulatory overhaul that would subject the Federal Reserve to examination by Congress’s investigative agency, the Government Accountability Office. Congress gave the GAO authority to audit the Fed in the 1970s, but exempted its monetary-policy and lending decisions. The new provision, pushed by Ron Paul, a conservative Texas Republican and Alan Grayson, a populist Florida Democrat, would eliminate the exemption. This could make the Fed less effective as a lender of last resort by making banks reluctant to borrow for fear that an audit would disclose their identity, and the Fed might become warier of raising interest rates for fear of one.
…
The Fed is now guilty by association, seen as too close to banks, too quick to bail them out and too generous and secretive when it does so.
…
The Fed and the Treasury now face the delicate task of trying to excise the Paul-Grayson provision from a regulatory overhaul they dearly want, in particular because it would create a process for avoiding future ad-hoc bail-outs. Their best hope is that the provision dies when the House bill is merged with one from the Senate. Chris Dodd, chairman of the Senate Banking Committee, has beaten back demands from senators in both parties for a similar provision. Mr Dodd’s own bill, though, is far from Fed-friendly. He would strip the Fed of its bank regulatory responsibilities and erode its independence by eliminating private bankers’ say in appointing regional Fed bank boards, and making the chairmen of those boards political appointees.
…
One of the power brokers best ploys is to lead people to believe
that nothing can be done about their Reign of Power or they try to convince people that they are the good guys that are there to save them from the left or right or some other evil force .Hank Paulson was there to save the Financial systems and restore the credit markets and he immediately just gave capital injections with no requirements to the bailed out entities .Anything to keep from having it exposed just what
the thieves actually did and are still doing .
So,no Eddie I don’t agree that nothing can be done ,and I believe that the Majority is actually more powerful than the band of thieves ,so keep on fearing truth getting out .
———————-
Right on, Wiz!
I’ve seen some of our ideas literally lifted word-for-word in the press. Not that I mind, of course, as it’s good to get the word out.
Agree with you PB, some people from the MSM and ??? have been reading this blog.
Did you also notice how the very same ideas some of us were fearing a few years ago — we actually detailed what we perceived to be the “worst case scenario” for bailouts — are the very same ideas they are using to “save” the housing/credit markets today?
Professor Bear……I have noted sometimes that specific language that is used on this blog somehow ends up in the mainstream ,or the talking points track with this blog . As you said ,it could be coincidental ,or people can come to conclusions
around the same time as the information flow comes in .
Ca Renter ….I have noticed that the MSM twists some of the talking points on this blogs also ,if in fact they are tracking ideas .
““Everyone thinks the recession is over and we’re back to the races!”
Everyone is right.”
Eddie, Eddie, Eddie.
Truly, every day and in every way, I’m so pleased for you; you’ve got all the answers.
Here’s a little tribute from the cobaltblue treasure chest:
http://tinyurl.com/y9bfpm9
You can fast forward to 2:45 if you’re feeling impatient; what with places to go, people to see, etc.
LOL. Oh ,by the way ,I think Eddie said he was a Insurance agent one time ,but hell he could of been lying for all I know .
House Wizard, yes you read that right. You guys are pissed that the PTBs are doing their thing and nobody asked your brilliant, know it all opinions.
The other things with you all is fear. You’re all afraid. Afraid to buy a house. Afraid to invest. Afraid to even use credit cards for crying out loud because you MIGHT be late on a payment and get hit with a fee. Afraid to keep money in the bank because the PTBs and the XYZ might do the 123 and kill the dollar or because the FDIC might go insolvent and then all hell breaks loose. There’s risk aversion and then there’s just downright paranoia.
From what I’ve read here over the last year or so, it seems like a very small percentage of you own a business. You all for the most part at employees. Salaried cube dwellers. Nice and safe position with the 2.5% annual raise and 2 weeks vacation. No risk in that.
And so you look at the risk takers of the world and despise them when they;re rewarded. The big bad investors who made tens or hundreds of millions are vilified. It’s not fair they made so much money while I’m only earning 1% in my savings account you lament. Except you forget the flip side, that they risked a hell of a lot to get that reward. And that’s essentially why you hate capitalism and embrace socialism. Capitalism rewards risk, socialist rewards trepidation.
Wow Eddie, I guess this means your an Al Gore fan right?
The housing bubble was more fraud than legit investment.
The other things with you all is fear. You’re all afraid.
Your the one who sound most hysterical most often in you posts.
From what I’ve read here over the last year or so, it seems like a very small percentage of you own a business.
And so you look at the risk takers of the world and despise them when they;re rewarded.
Actually, what we (well, I) take issue with is those risk-takers who were foolish, got burned, but then were made whole by the government/taxpayer. That means much of wall street, many banks, builders, bondholders, and stock holders.
People who take risks and succeed are welcome to get rewarded. But what we’ve seen in the past few years is people who took risks, failed, and yet have been made whole or gained at a cost to the rest of us. That’s not right, and presumably that’s (presumably) not what you’re arguing for.
The other things with you all is fear. You’re all afraid.
You’re the one who sounds hysterical in you posts. You freak out a lot.
The moneyed interests have left you behind to fight a rear guard action. I’d give you a “D” in your performance because you are amusing and take a licking and keep on ticking. You also make good points 20% of the time. Not well thought out, but OK because I appreciate a defender of capitalism too.
From what I’ve read here over the last year or so, it seems like a very small percentage of you own a business.
From your writings, I conclude that you are not the best at percentages, conceptualization or numbers in general. You don’t show a great ability to differentiate.
For example: Do you know what percentage of Americans own or have owned their own business? Have you ever? I don’t think you know and I don’t think you have whereas I have and I do.
Except you forget the flip side, that they risked a hell of a lot to get that reward.
There was no risk Eddy. Not taken from the people this blog is angry with. Their Daddy paid for an Ivy League, fratboy diploma. The got a job on Wall Street. They manipulated the system. They got rich by fraud. There was no risk.
We are not talking about a middle class gas station owner trying to make payroll Eddy. What risk did the shills of Wall Street take?
What risk did Indymac, or Countrywide, GS, or the titans of Wall Street take? WHAT RISK?? The only risk I see is the risk they took by being criminal.
Criminality is not a risk that should be rewarded.
Or do you think it is Eddy?
18:26:59
I have no idea why my post at 18:26:59 posted before I was finished typing it at 19:13:35.
The last “sentence” at 18:26:59 was Eddy’s that I was trying to put in italics.
Very well said, Rio.
Capitalism rewards risk, socialist rewards trepidation.
The problem with that statement is that not all risks are worth taking, but in our current system the government has rewarded a large number of people who have taken stupid risks. This has transformed a system for allocating capital to productive enterprises into aimless gambling. For this tragic misallocation of resources, we will all end up poorer.
I echo your sentiments about taking advantage of the situation to the best of your ability. We must live in the world as it is, not the world as we would wish it to be. But if we don’t stand up against the thievery that was the bailouts, our silence validates it, and we can expect more of it.
Haven’t been inclined actually to shout at Eddie, as others often do. But now I’m seriously tired of him. What makes him characterize HBBers as anti-capitalist? Some are (exeter), some aren’t (cobalt), etc etc. It’s true we share an idea that the economic contraction is not over, house prices are still high relative to rents, unemployment is likely to persist. Lots of us aren’t exactly sure of anything, but interested in sharing guesses. Eddie seems not to add value to the discussion. The suggestion by “Nudge” that Eddie be ignored is undoubtedly the right one.
You folks have a troll again! LOL!
Haven’t been here in a while, haven’t seen a clown like Eddie since back in the housing-bubble-denier days a couple years back. No doubt Eddie was a denier then too, and we all know how that worked out.
(I haven’t read his other posts, but I’m sure he’s come up with some unintentionally hilarious reasons why It’s Different This Time.)
In fact, I wouldn’t be surprised if he was one of the old trolls, returning after a long silence to try to assuage his badly mauled ego after being so ludicrously wrong for so long. Hahaha.
Too funny that anyone would bother trying to defend the indefensible after everything has plaid out so spectacularly badly. No worries, he’ll be gone by March when more brown hits the fan next year (because it’s really not different this time, after all).
HBB translation of Battellino’s remarks: “We’re working off a whole new economic model…”
HBB translation of Brad Pitt’s order for breakfast this morning:
“What do you recommend with this Joshua Tree?”
Lucky for Brad, there is plenty of more money for him to make in the movie business to replace all that he p!ssed away on Dubai real estate investments.
Maybe so, but there are some interesting reflections here; remember when the Las Vegas condos were being pushed by celebrities? Like George Clooney’s tower that never got off the ground.
I can hear the sales pitches now, “your unit is next door to Beckham and Pamela Anderson is right around the corner.”
Tentative conclusion: Acting talent is not a very good indicator for real estate investing acumen.
Correction:
Tentative conclusion: Acting talent is not a very good indicator for business acumen.
I don’t believe for a second that Brad Pitt has always had a hankering to live in Dubai. He — along with the other actors and the members of the British fútbol team — have fallen prey to their business agents. Or, they had to have a Dubai condo, as if it were Tickle Me Elmo.
Personally… I never bought into the notion that -anyone- in “acting” has any money? Flop after miserable flop we’re to believe that Demi Moore gets $25 mil. for doing a picture?
Julia Roberts is a mega-mega millionaire? Please, these studio execs aren’t going to give these clowns any money up front? Nicolas Cage is bu… bu… broke? Yeah, BFSurprise. He never had any money to begin with!
Everything these people “have” is owned by the studio.
Couldn’t part of the staging of a condo include having a celeb live next door? It might be worth it to GIVE a celeb a condo unit as a lure to draw in others.
BTW, remember the report on this blog of how a condo was staged in part by hiring a foxie chick to do exercises in her leotards in the unit next door?
Clever marketing at its best, IMO.
It’s almost certain that Brad Pitt and others were given significant discounts on their propero create a buzz about the place and fish in other suckers.
measton,
Oh absolutely. Probably the celeb most likely to have a George Costanza “man crush” group of followers. Like most of his ‘peers’ they only portray (1) character over and over…
And people wonder why I’m such a fan of no-name schlock? It’s my little way of saying “You’re not getting a freaking DIME off of me!”
Lucky for Brad, there is plenty of more money for him ??
And therein the problem…This one has not played out completely yet but if 1982 is a guide the wealthy will come out on top “Big Time” again…With many people, like a good friend of mine, a recession like the one we have right now was a knock out punch…No more self employment for him and his way of life for him and his family that he had become accustom to will never return…On the other hand, a friend of my son has probably lost 5 mil or more the last couple of years in real estate development…Just a blip on the screen for him…He hardly knows he lost it…
1982 may not be a guide, when you consider the political climate. In 1982, the me-me-meeeeee mentality was on it’s way up. Now it’s on the way out.
I just got my copy of “This Time is Different” by Rogoff and Reinhart. It cost me $25 — 40 percent off the list price of $35 (I am sure that has nothing to do with deflationary forces, though…)
The book is probably a bit too dry and academic for most readers, but it certainly does drive home the point that the financial crisis currently underway is really not much different than many others that played out over the past 800 years, right down to the failure of the PTB to either anticipate it or to clearly apprehend it while it plays out.
eh? 2/7 = 28.57%, no? …Arithmetic Nazis strike again!
It’s either a 45 or a 33.
“We don’t earn low enough to get Government help, and we don’t earn high enough to get by,’ she said. ‘We are stuck in the middle.”
Well I don’t know why I came here tonight,
I got the feeling that something ain’t right,
I’m so scared in case I fall off my chair,
And I’m wondering how I’ll get down the stairs,
Clowns to the left of me,
Jokers to the right, here I am,
Stuck in the middle with you.
Yes I’m stuck in the middle with you,
And I’m wondering what it is I should do,
It’s so hard to keep this smile from my face,
Losing control, yeah, I’m all over the place,
Clowns to the left of me, Jokers to the right,
Here I am, stuck in the middle with you.
Well you started out with nothing,
And you’re proud that you’re a self made man,
And your friends, they all come crawlin,
Slap you on the back and say,
Please…. Please…..
Trying to make some sense of it all,
But I can see that it makes no sense at all,
Is it cool to go to sleep on the floor,
‘Cause I don’t think that I can take anymore
Clowns to the left of me, Jokers to the right,
Here I am, stuck in the middle with you.
Well you started out with nothing,
And you’re proud that you’re a self made man,
And your friends, they all come crawlin,
Slap you on the back and say,
Please…. Please…..
Well I don’t know why I came here tonight,
I got the feeling that something ain’t right,
I’m so scared in case I fall off my chair,
And I’m wondering how I’ll get down the stairs,
Clowns to the left of me,
Jokers to the right, here I am,
Stuck in the middle with you,
Yes I’m stuck in the middle with you,
Stuck in the middle with you.
- Stealers Wheel
“We don’t earn low enough to get Government help, and we don’t earn high enough to get by,’ she said. ‘We are stuck in the middle.”
Yep, Many a time in my life have I stood behind someone buying a higher cut of beef than I, with food stamps. Of course now they aren’t stamp’s, now it’s a credit card. Needed to try and erase the stigma, don’t want anyone to feel bad about themselves.
Charity is a good thing… Forced charity is not.
Don’t know the truth of it but I read somewhere that there was roughly 30 mil people on food stamps…
I can confirm by friend’s mother that the welfare cards can be used to buy anything frozen. It can’t be used to buy a prepared meal. But yes, lobster, shrimp, etc. Livin’ right. People wont don’t eat a ton wind up with $1K+ in available food on their cards.
The hits of the 70’s keep on comin’ w/ a bubble gum hit by Jerry Rafferty and Steelers Wheel.
Even today, I can’t listen to that song without picturing Mr. Blue cutting Marvin Nash’s ear off and dousing him w/ gasoline?
Didn’t Rafferty get real weird recently? Like he up and booked for a couple of months without telling anyone where he was?
Rafferty was also responsible for the hit song “Baker Street”
SFBA Gal,
Oh don’t get me wrong, he’s a wonderfully talented guy and he’s done a lot of producing over the years and the like, it’s just that the whole episodic event was totally out of character?
“sometimes you’re the windshield, sometimes you’re the bug…”
Ben,
Hope you had a great Thanksgiving.
test
New Z,
I was thinking about you the other day. Glad to see you posting.
I’m reading about competitive currency devaluations to maintain exports. Now all we have to do is re-pass Smoot-Hawley and I’ll be convinced we’re robots doomed to repeat the same programmed sequences over and over.
Can’t blame the U.S. for now borrowing enough this time.
I’ll be convinced
we’repoliticians are robots doomed to repeat the same programmed sequences over and over.PB,
Right, and now the HF’s are making their exodus from the UK for… ( yep ) Switzerland. Right on cue.
Rather than taxing them… or making a feeble attempt to regulate them ( there’s a laugh ) they just need to shut them down.
They serve no purpose, they don’t ‘reduce’ risk and never should have been allowed to exist in the first place? Near as I can tell?
Dubai…bloodbath today, or not?
Or CenterCity next week? I thought the quote about Brewbaker talking up Maui (in Hong Kong) as a bargain shows how interconnected these bubbles are. And Australia has a bigger bubble than the US, so to hear the central bankers talking like this demonstrates that we have a ways to go, IMO.
“I thought the quote about Brewbaker talking up Maui (in Hong Kong) as a bargain shows how interconnected these bubbles are.”
I must say, I had no idea how interconnected the bubbles were/are. When I first started posting here back in ‘05, I just thought the US was having a housing bubble, that it would pop, and that prices would go back to pre-2000 in a couple of years. I was really clueless as to CDOs, MBS, etc., and learned a lot about it here, among other things.
One thing I’m seeing is that this global interconnectedness is not a good thing.
I really wonder about China. I can only imagine the level of disinformation and opacity there is at least as much as here. What happens when that bubble pops?
“What happens when that bubble pops?”
Do you dare to venture where angels fear to tread?
‘this global interconnectedness is not a good thing’
I think we can separate what some call globalism and this global RE bubble, for the sake of argument. Global trade, as it’s been sold to us, is one thing. But a global financial mania has been a disaster. Now, who is responsible for deciding which is which and putting on the brakes? The central banks; the BIS, the IMF, and so on.
And if fools like this Aussie central banker don’t get it, after all the problems they’ve caused, maybe we need to look for alternatives to their stewardship.
“Now, who is responsible for deciding which is which and putting on the brakes?”
Punchbowl tactics
Central banks should use far more judgment in preventing economies from getting out of hand, says Michael Taylor
William McChesney Martin, the chairman of the Federal Reserve in the 1950s, famously said that it was a central banker’s job to take away the punchbowl just when the party gets going. As the world wakes to a colossal hangover and surveys the debris of wrecked financial systems and gutted economies, his successors stand accused of not doing enough to stop things getting out of hand. Their defence sounds like the excuses of indulgent parents who have stood by while their house is wrecked by a wild teenage party.
…
Michael Taylor, formerly of the IMF and Hong Kong monetary authority, has a senior regulatory position in the Middle East
Wall Street wanted a Global playing field for their leveraged money games and there was no thought to money supply being excessive and going to
unneeded places ,like into the hands of unqualified borrowers ,or some unneeded housing tract out in the middle of nowhere . Eventually local incomes didn’t matter ,or even local population
because it was all about selling the next great place to buy real estate and make a quick buck selling to the rich Baby Boomers or
some other absurd group that was going to be the next greater fool. Amazing how Wall Street conned the World .
Think of it as the wild wild west, where millions of buffalo roamed, and in the space of a decade or so, only a couple hundred were left, or some such thing. The analogy here, i’m getting to it, is that that a global economy was like millions of buffalo, with seemingy endless shots to be had for sport & profit, until there wasn’t any buffalo left… we’re spent, a little death.
Or CenterCity next week ??
Have not heard much lately on this…Is it done ?? Maybe Lavi can help with some info…
“Then, earlier this month, he told Dubai’s critics to ’shut up.’”
“He who raises his fist first, has run out of ideas first.” HG Wells
(Hwy uses a modification of this quote to include his “TrueBeliever’s™” siblings who yell & shout during Thanksgiving feast dinner so that “truthfulness” of their position is directly proportional to the decibel level of their voice.)
siblings who yell & shout during ..dinner so that “truthfulness” of their position is directly proportional to the decibel level of their voice.) YIKES, are you glad the dinner is over?!
See my last post from yesterday, I fell asleep and when I woke up the port was all gone… but not the subliminal racism
Dubai…bloodbath today, or not?/
I’m not sure if this will turn into the catalyst for another leg down, but it did upset my long setups from Tuesday… everything was looking good to the long side until that announcement on Wednesday, then everything dropped in premarket today.
These Countries that have no-recourse loans really know how to get their borrowers stuck with their non-fixed loans .
During the housing boom that was the crazy part ,people willingly were going on bad toxic loan product when low rate fixed loans were available .
The loan industry sold people a story that they could get a fixed loan down the road ,,,,famous last words . At the time the other sales pitch for toxic loans was that they were the best use of leverage because of the lower beginning payments . Turns out the loans that were pushed the most paid the highest commissions ,so no doubt people where discouraged from other choices at the time . But in general ,real estate was sold as a short term investment at the time ,rather than a end-user place to live for a long time .
I can just picture these guys/gals from Wall Street who love to play leverage games and generate money games even coming up with the talking points of real estate investment because it was all about a short term investment . Course they were making a lot of money for a while on how they were churning loans with the mania borrowers and the serial equity extractors .This was a dream come true for Wall Street to have the perfect money generating machine . This is why I have strong feelings that Wall Street cannot be a Lender along with being a investment entity ,they blow it every time .
Happy Black Friday to all. I am not much of a Christmas shopper, but a couple of my boys were eager to participate in the spectacle of the
5a opening of a local Target store. For the sake of quenching their curiosity, I fulfilled my fatherly duty and delivered them to the store just as the doors were set to open.
We were quite amazed to witness a line of no fewer than 1000 customers lined up on the sidewalk all the way around the back side of the building. The line moved quickly, and by 5:05a, we were in the midst of the throng of shoppers, trying to elbow our way towards the deeply discounted merchandise.
One of my sons went straight for a highly sought sandwich maker priced for $3. They had only four left by the time he was able to grab his prize.
We checked out of the express lane at 5:33a, with a CD, a sandwich maker, a blazer and a game in hand. I failed once again at shopping, as my wife had handed me a coupon for $15 off of total purchases in excess of $75, but our tab came out to a paltry $50. Cash is king this year!
“Cash is king this year!”
Say that again.
“Cash is king this year!”
Again.
“What are you, deaf?”
No, I just like to hear you say it.
I am happy to offer you my affirmations
“…That’s all your house is: a place to keep your stuff. If you didn’t have so much stuff, you wouldn’t need a house. You could just walk around all the time.
A house is just a pile of stuff with a cover on it…” George Carlin
http://www.youtube.com/watch?v=MvgN5gCuLac
Hwy, that is such a good comic bit by the great George Carlin.
Thanks.
It would have cost $50 using a Visa too you know. All you did by paying cash is forfeit an interest free loan from a bank for 22-28 days, plus any perks the card offers. Say, you are a financial wizard.
“All you did by paying cash is forfeit…”
…the aBILLity of Bank of Opportunity to claim that your payment was received 90 seconds past midnight of it due date… “thank you, we’ve deducted the $35.00 fee from your account, no need for you to do anything.”
But being a Haskell, this would never happen to eddie.
if we were in 1982, you might have a point. Pay electronically and that is not an issue. Unless…no, wait, do you actually send checks in the mail as payments? Explains a lot about the Luddite mentality displayed here.
Hey Haskell, I bet your 82 year old grandmother has Windows 7, because as you say, the elderly in America all use the internet to pay their bills.
Haskell, always looking out for others and never himself.
So you’re a senior citizen and that’s why you send checks in the mail? You know, paying a bill online is not much more difficult than posting on a blog. You should look into it.
I’m 31 and I still send checks in the mail. Have never used online bill-pay, and really don’t see the point. I do have my credit card linked to my bank account so I can electronically schedule an EFT to pay it off…but everything else - rent, electric, water, and DSL paid by check.
It’s not just the old-fogies who still do that.
I misspoke. I used my VISA. We will pay “cash” next month when we pay it off in full, interest free. I will only go to 100% cash if Megabank, Inc starts charging us for the pleasure of using their plastic. Right now, we get to pay $0, ever, plus get frequent flier miles.
Life as a credit card “deadbeat” is schweet!!!
I will only go to 100% cash if Megabank, Inc starts charging us for the pleasure of using their plastic
I’ve made this point before, but right now it’s the merchant who’s charging us for the pleasure of using plastic. But they’re just the middleman. As you know, Megabank, Inc charges the merchant, who turns around and passes that cost on to you and I via higher prices.
I really wish people would realize this and take steps to choke off money going to Megabank, Inc. Sure, you may not get a discount for paying cash (though ask sometime - often times you can), but you can take steps to stop enriching the same banks and wall street types that everyone bitches about here daily.
it’s the merchant who’s charging us for the pleasure of using plastic. But they’re just the middleman. As you know, Megabank, Inc charges the merchant, who turns around and passes that cost on to you and I via higher prices.
TA DA.
So, cash really is cheaper.
So, cash really is cheaper.
Well, I’d argue that cash is more efficient. You may end up paying the same price, but you don’t have a bank in the middle skimming off the top. That extra cash may keep the local shop in business a bit longer, or may raise their margins enough that they can lower prices a bit.
Or they may spend it on hookers and blow. Either way, it’s win-win
Eddie is right this time. Those who pay in actual physical cash subsidize the float of those of us who pay now with plastic and repay next month with our checkbook. Of course, this matters little when real interest rates are in negative territory.
Eddie is right this time. WOW!
But it is all in the delivery. Ask any comedian.
“Those who pay in actual physical cash subsidize the float of those of us who pay now with plastic and repay next month with our checkbook.”
This is where the masses have to speak. It may be slightly better for an individual to use a credit card, but it would be better for us all if no one did.
Credit Card processing fees are built into the pricing structure of all the products you purchase everyday. Count on it. It’s like a hidden tax.
What, did you run out of FoxNews Talking Point Central, that you have to turn to the BankLobby Talking Point Central?
People use cards because they don’t have the cash, or because their want to raise their FICO, or because they want the frequent flier miles. The 22-day float is there and it’s nice, yes, but I’ve never heard anyone say they purposely use a card for only that reason. Only a salesman would push this as specific perk.
And I hate using credit cards. I’m always deathly afraid they’ll send the bill late, or receive my payment late. And how much would I “save” from this 22-day interest-free loan of $50? 50¢? It’s worth 50¢ to tell the bank to stick it.
It’s sad. Too sad, I just can’t take it any more.
The wife and I were walking the dog any a ‘former’ co-worker and her husband saw us as we walked across the parking lot. She got laid off almost a year ago and used up her 401k ( of 22 years ) in a matter of months in vain attempt to stay current on all their revolving credit bills.
I can see going into a hole to maybe keep your mortgage current but that unsecured cr@p? Under the bus you go. And to what end… did she keep her fico nice and spiffy ‘for’? She can’t get a pack of gum without $200 bucks down? And why would anyone in her/their situation want w/ e’fing credito any damn way? ( Hey I tried to help from Day 1 but will they listen..? )
She got laid off almost a year ago and used up her 401k ( of 22 years ) in a matter of months in vain attempt to stay current on all their revolving credit bills.
Anecdotal at best, but I had a talk with my aunt’s significant other at Thanksgiving… she’s does F&I at a large Nissan dealership in CT. She said almost everyone coming in the door to buy a new (or used) car had trouble getting financed because their credit scores had dropped and their debt to income had gone up.
The way she explained it, alot of businesses are down 25% or more in revenue and people are taking hits to their income, only their lifestyle isn’t changing to adjust to the lower income… guess what’s being used to supplement the cash-flow gap? That’s right, credit cards. Debt-to-income is shooting up because of the credit card use, making it hard for most of these people to get financed. With all the rate increases being pushed before the new Credit Card law goes in effect, the next shoe to drop will large swaths of people defaulting on thier credit cards.
I forsee more problems for any “discretionary consumer” business or credit card company in the next few months… by early next year, the desperation should set in.
“People use cards because they don’t have the cash, or because their want to raise their FICO, or because they want the frequent flier miles.”
I use my CC for nearly 100% of my purchases, even a single cup of coffee, and I only do this because I like to have a paper trail to examine my expenses. I have no frequent flier program, no float (I often pay my CC bill every night), and my FICO is fine.
I also like the idea of disputing, but have never had to do that.
I also like the idea of disputing, but have never had to do that.
See my post above, Muggy, on the effects of your behavior. Of course you’re welcome to do it, but using a CC isn’t “free” by any means.
Specific to your point about disputing..if you pay cash, you never have anything to dispute. So this seems like a flawed reason/argument. And for tracking expenses, they make receipt scanners + software that will do all that work for you. I don’t have one (and honestly I use a credit card from time to time, though make an effort to pay cash for things at local shops), but have a friend who’s done this for years and it seems to be a good practice.
I track my expenses with a sophisticated gizmo called a “checkbook.”
“Disputing” is if the product is defective, and the merchant won’t refund you. Visa will fight for your refund.
“Disputing” is if the product is defective, and the merchant won’t refund you. Visa will fight for your refund.
Point taken. I guess that’s why I make a point to buy my big-ticket items at places with a good reputation and good return policy, even if it costs a bit more.
I disputed a charge for the first time in my life this year, over a defective ebay item. The seller said no returns, and a it was really a borderline case, but it worked like a charm. There’s really nothing the seller could do to stop the chargeback.
Professor, you are a noble soul. Getting up before dawn to take your sons shopping! I hope they appreciate you!
What made the whole experience even more depressing is that, when you look at it, most of us don’t really start ramping up our ret. accounts until after… the kidz move out!
So she didn’t really have ‘all’ that much in the company plan to begin with, but it was at least a ‘base’ from which to build upon? What’s the old Rule of Thumb? You should have around 40k in your account by the time you are 40?
Well.., POOF! Welcome to Square One.
That’s a rule of thumb? Where did you hear that? And is that 401k, checking, cash, liquid, what?
…but a couple of my boys were eager to participate in the spectacle of the
5a opening of a local Target store. For the sake of quenching their curiosity, I fulfilled my fatherly duty and delivered them to the store just as the doors were set to open.
We were quite amazed to witness a line of no fewer than 1000 customers lined up on the sidewalk all the way around the back side of the building.
You’re a brave man, PB!
It looks like there may be quite the Black Friday on Wall Street today. But not to worry — the stock market always goes up, in the long run.
If this story seems gripping in the case of Dubai, just wait until a similar event eventually catches up with the Chinese commercial RE bubble. That will be ‘the big one.’ This is merely a flesh wound.
Now let me guess: Megabank, Inc has lots of gambling money on the table in the Dubai real estate market??? Where will the shoes land in the wake of this criselet?
Pre-Market Indications
Index Futures:
S&P 500 1,083 -27.80 -2.51%
DOW 10,225 -217.00 -2.08%
NASDAQ 1,742 -44.50 -2.48%
Retail’s ‘Black Friday’ overshadowed
Dubai World reverberations
Reuters
At a standstill: Dubai Marina towers loom over the Palm Jumeirah in this Thursday photo. The city-state’s extravagant building projects have been largely put on hold. (For background: What is Dubai World?)
• Global economy’s real-life stress test (First Take)
• Moral hazard for sovereign debt (24/7 Wall St.)
• Spillover effect for emerging markets weighed
Multibillion-dollar debt problems, including the possibility of default, in the Gulf emirate upset markets worldwide. Wall Street signals a massive case of post-Thanksgiving indigestion.
Check the subtle change in the MarketWatch headline. The PPT obviously has “absorbed” today’s stock market sell off.
Retail’s ‘Black Friday’ overshadowed
Stocks absorb Dubai blow
Blue chips plummet as much as 230 points in a bleak start to an abbreviated U.S. session. Dubai World debt problems, including the possibility of default, jar stocks and commodities worldwide.
Down 1.5% now. Oh noes, it’s like 1929 all over again!!! Someone tell the NYPD to patrol the bridges for people getting ready to jump.
Stocks can’t move by much more than 1.5% in one day before artificial restraints are triggered. Daily volatility is preemptively contained.
You must have been asleep last year when there were 5%+ declines in one day.
Not asleep — just not very interested in daily movements in the stock market, especially when it is so highly manipulated.
Of course, your prez W getting on the national teevee and telling everyone that it was time to “Panic now!” probably didn’t do much for the stock market…
Booshwacked!
President Bush Addresses Nation on Economic Crisis
Eddie,
I’m your (1) friend here ( so don’t go p!ssing ME off! )
Any statement to that effect makes a genuine mockery of the very REAL pain we’ve all… been through. ( Granted some more than others? ) I’ll tell all the people that ‘used’ to work at the wife’s Fortune 500 co. that their about to expire unemployment and decimated 401k’s really was all in their head.
“…their about to expire unemployment and decimated 401k’s really was all in their head.”
I’d like to go a step farther to suggest the whole financial crisis was a story use to justify a Congressionally-approved one-time lump sum $700 bn tax transfer payment into Wall Street coffers. This is entirely clear from the size of the bonuses the bank managers of Megabank, Inc are receiving this year. And, as Eddie has astutely noted, the mild (non-crisis) recession is already over as well.
PB,
Right, not that they were by any means smart enough to do this by “design” but they weren’t dumb enough to let “a good crisis go to waste?”
I just don’t have the words to share how -visibly- upset our friend was! She was insisting… my wife inform her about every possible “in” at her old company and it was tearing my wife’s heart out.
Besides, it’s November, it’s Oregon and I’m fuhreeeezing just standing there getting ‘worked’ for information! I mean this is beyond, WAY beyond the usual “putting the feelers out” type stuff. And the resentment that Mrs. D -still- had a job there! And I understand the “why me!?!” of it all. When you see people at the end of their rope, it’s not so fricking ‘funny’.
“When you see people at the end of their rope, it’s not so fricking ‘funny’.”
Let’s just follow Eddie’s lead and pretend that there is no financial crisis and the recession has given way to a new era of prosperity, and we will all feel much better.
Yes, you’re right on the money, Prof.
You might not feel better, but you will make more money. Which I guess should make you feel better. So yeah, what you said.
My personal finances are just fine. But I fear for this country, when it appears that our policymakers are wallowing in denial and basing their solution to the financial crisis at hand on a false paradigm. Moreover, I believe TBTF is extremely destructive to America’s collective prosperity.
In short, Eddie, and I realize this is very hard for you to grasp, but I am concerned for the collective well being of our country.
mockery of the very REAL pain ??
In Edee’s world this just presents a opportunity to prosper…
Heck, it does that in my world too.
I like opportunities, and this one here is a doozy. Why be coy?
Yeah, the Einsatztruppen were going to shoot all those Jews anyway, so why bury them with their teeth and let all that gold go to waste?
* The Wall Street Journal
* NOVEMBER 23, 2009
Early Data Suggest Suicides Are Rising
Reports Indicate 2008 Uptick Is Similar to Those Seen in Past Recessions, Though Cause Is Unclear
By SARA MURRAY and BETSY MCKAY
Early signs suggest the number of suicides in the U.S. crept up during the worst recession in decades, according to a Wall Street Journal survey of states that account for about 40% of the U.S. population.
…
This is merely a flesh wound.
PB, you made me do it.
“Tis but a scratch”
You have no arms left, yes I have, just a flesh wound.
http://www.youtube.com/watch?v=zKhEw7nD9C4
“oh I see, running away will you..”
This is awesome! Future petrol prices are crashing by the second, just in time for holiday travel season!!
Crude Oil Lt Sweet Electronic (Nymex)
NYMEX: CL08XE
Market open
CL08XE 74.03
Change
-3.93 -5.04%
Volume
Volume 155,499
Nov 27, 2009 9:21 a.m.
Has does this effect “Drill Here…Drill Now!” arguement?
Lots of red numbers today on Wall Street. It should be a great day for any shorts who did not throw in the towel just yet! I’m thinking circuit breakers may be triggered before the short trading day is over. Afterwards the Wall Street bovine herd will enjoy the pleasure of a very long weekend to mull over the implications of the Dubai situation.
Check out The Precious™ — down by $26/oz in a matter of hours!
Markets »
17.10M Dow Volume: -92% Avg Vol: 218.71M
Dow 10,249 -216 -2.06%
Nasdaq 2,126 -51 -2.32%
S&P 500 1,086 -25 -2.25%
GlobalDow 1,912 -35 -1.78%
Gold 1,163 -26 -2.15%
Oil 73.83 -4.00 -5.13%
I see a rush to cash. Anyone see anything different?
Nope. A couple of days ago, I suggested something like this would happen at some point over the next several months. Who’d ‘ave thunk it would begin as soon as Black Friday?
Lot of bubbletalk lately.
Talk of “peak gold” (lol), investors stretching for returns to beat out 0% return on cash and cash equivs, money managers reaching deep into risk to justify their fees, etc.
combo,
I got punk’d in ‘08 and I wasn’t ‘about’ to let that happen again! I’ve re-positioned ( and evidently not a moment too soon? )
When you think about it, what did we know on the 2nd of January 2008 ( that we didn’t know on the 31st of December 2007? )
What? It wasn’t ‘plain’ enough?
I see a rush to cash. Anyone see anything different?
Today no, however for the past decade, gold has substantially outperformed the DOW and the dollar, especially the past few years.
But hey, the dollar is due for a bounce and gold is due for a correction so if one has both or neither it really doesn’t matter.
Let’s agree the gold price — dollar exchange rate bungee chord is stretched very taut. That does not mean it cannot stretch a lot more before it finally snaps back.
Somebody - anybody - please fill in the blank:
Gold is a good investment in a deflationary environment because ______.
- Fiat money is worthless.
- Gold always goes up.
Gold is a good investment in a deflationary environment because ______.
Because Central Banks (ie Bernanke) have vowed to fight deflation in every way possible. So, if there’s deflation now, that means that inflation is likely on the horizon, as CBs flood the market with cash trying to stop deflation.
Basically, buying gold in a deflationary environment is being an early-mover into an investment, predicated on the expectation of a certain policy response from central banks. For example, Gold was a good investment last October, no? Price fell down to what, $700/oz, or so…and due to the falling dollar (A result of the Fed’s policy response), it’s now up almost 70% since then.
“…buying gold in a deflationary environment is being an early-mover into an investment, predicated on the expectation of a certain policy response from central banks.”
But at what point has a sufficient critical mass of ‘enlightened’ investors piled into gold so that it overshoots its utility as an inflation hedge and turns into a greater fool’s falling knife?
bungee chord
Speaking of 2 things mentioned on the blog today…
If you go to NZ and go to the highest place to bungee jump, if you do it naked, you don’t have to pay.
Just an observation worth sharing.
turns into a greater fool’s falling knife?
I can’t answer that question - I was just answering combo’s challenge
I’ve been on the fence the past few weeks. Do I sell some of my paper gold? Do I buy more physical because I’m below the allocation % I’d like to be at, but prices have run up so fast?
I’m realizing that I really have no clue how to play things in this environment. I’m still roughly 65% cash and not happy about that, but everything else feels like a bigger gamble.
Right now my plan is just to bulk up my savings and try to enjoy my life while I can. I’m still young, so hopefully in the next few years a “safe” savings+investing plan will become apparent.
Somebody - anybody - please fill in the blank:
Gold is a good investment in a deflationary environment because ______.
….because it has been?
But how would anybody really know? The only recent deflation the USA ever experienced was the 30s and maybe the past year or so and gold did fine in both very dissimilar cases.
But nobody really knows what gold will do that’s why it usually does what few know it’ll do. Gold is not good at following the “rules”.
From 1981-2000 gold did poorly and this was in an inflationary environment where it was supposed to do well.
The history of gold shows:
1. It holds value
2. It does well during periods of extremes, as in extreme or unexpected deflation and inflation, uncertainty or when things get gnarly.
“The history of gold shows:
1. It holds value”
Dollar price of gold in 1980 = $850
Dollar price of gold in 2000 = $280
Dollar price of gold now = $1176
Annualized nominal rates of return:
1980-2000 = ((280/850)^(1/20)-1)*100 = -5.4 percent / year
2000 - 2009 = ((1176/280)^(1/9)-1)*100 = 17.3 percent / year
Tentative conclusions:
1) How well gold ‘holds its value’ depends a heck of a lot on when you buy and when you sell, kind of like almost every other durable asset class.
2) Like housing, gold cannot go up by 17.3 percent per year forever. Buy low, sell high!
1) How well gold ‘holds its value’ depends a heck of a lot on when you buy and when you sell, kind of like almost every other durable asset class.
But I was speaking of “holding value” in longer terms than a couple cherry picked decades.
“It is said that an ounce of gold bought 350 loaves of bread in the time of Nebuchadnezzar, king of Babylon, who died in 562 BC” which is roughly what it buys today, a stretch of 2,500 years, while the dollar, on the other hand, has lost 97% of its buying power since 1913, less than 100 years ago, when the detestable Federal Reserve was given its diabolical unholy control of the nation’s banks and money by a corrupt Congress and allowed by a corrupt Supreme Court.” Source: Dailyreckoning.com
“Gold is a good investment in a deflationary environment because ______.”
A deflationary environment is a scary one, and since people are panicy animals they flee to perceived safety. With an army of gold bugs saying that gold is safe, demand for gold goes up.
I don’t know about where you guys are, but today on the radio(driving along) there was a really active, party-like atmosphere on one ’show’ or radio dj saying
which it turns out that it was a place that was decorated and festive and had little
WOW, just wow. It is almost like telling the hoi polloi, getting slaughtered will be really fun,and while you are waiting Your turn…watch others ‘Get theirs’.
Weirdness in the world today.
it’s not an “investment”. It doesn’t do any work. It’s a speculation.
you have to sharpen that hook combo.
“…for the past decade, gold has substantially outperformed the DOW and the dollar, especially the past few years.”
In other words, the smart money bought gold years ago. Now we are at the late stage in the gold runup, and like the greater fools who bought US real estate circa 2006, the dumb money is going to buy gold from the smart money right up until the day the parabolic price runup morphs into a crash.
Now we are at the late stage in the gold runup,
That is a common assumption. It also could be entering stage 2 or 3 of a long term bull market.
If it is a bubble, it’s a strange one. None of my friends, in the USA or Brazil own any gold whereas a lot of them own stocks and houses.
It’s not that gold is going “up”, per se, but rather the U.S. Dollar is weakening in relation to gold.
You can measure this better if you think in terms of relationships to other currencies, or, better yet, compare how many ounces of gold it takes to buy a certain commodity such as oil.
This says it all..
17.10M Dow Volume: -92% Avg Vol: 218.71M
Rancher,
Typical, but ( and this is NOT inwestment adwice! ) but as Professor Bear and I were bantering about last week, ( if you’ve -got- ST profits on your REIT trading positions, this would be the time to lock them in! )
I know, I know, you want me to take a STCG w/ barely a month left in the year!? Otay, if that don’t suit you, take a pass on the tax bill and give it back to the mkt. But don’t come whining to ‘me’?
Come back and maybe revisit them in early 2010. Oh and the wife’s former co-worker’s husband said if his co. doesn’t get a bridge loan before year’s end they’re shuttin’ her down. Along w/ their reduced pay and vac. time forfeiture. But it’s all in yer’ head ( according to ’some’ folks around here? )
Here is an article describing a phenomenon which I have long suspected to be a driving force in the San Diego residential RE market. There is no way end user incomes can support the lofty prices seen in many local markets. On the other hand, I see no reason the cash proceeds from illegal activities could not frequently suffice to cover the purchase costs for homes priced north of $500K.
I even once suggested this to an FBI agent I know. He either was unaware of this being a major factor in the local RE market, or else was not willing to divulge what he knew about it.
Realty Q&A
Nov. 27, 2009, 12:01 a.m. EST
Something to hide
The warning signs a money launderer wants to buy your home
By Lew Sichelman
WASHINGTON (MarketWatch) — Question: I am a broker in Irvine, Calif. I recently sold a home which drew five offers in five days. In reviewing the buyers’ financials for all five offers, I noticed that most of their accounts showed a number of large deposits over the previous 30 days from overseas — Taiwan, Hong Kong and China. Evidently, however, the buyers didn’t have to show their mortgage lenders any additional documentation as to whether these deposits were family gifts, loans or what.
In talking to other brokers here, I have learned that many of my colleagues have noticed the same pattern and believe this is a huge loophole in our financing system that is being overlooked by banks and lending institutions because [they think] large down payments, no matter where the money comes from, result in a reduced risk.
Answer: You might want to report your suspicions to law enforcement authorities. There are no hard, fast statistics as to the extent criminals are using real estate to place their illegal gains into the financial mainstream. But the Federal Bureau of Investigation, among other agencies, suspects that money laundering is becoming more common.
So much so that the Financial Crimes Enforcement Network, or FinCen, is considering a rule requiring real estate brokers, among other entities which don’t have a direct financial interest in property sales, to file the same suspicious activity reports that lenders are compelled to file when they smell something fishy.
While mortgage fraud and money laundering are often viewed as separate criminal enterprises, FinCen, a bureau within the Treasury department that collects and analyzes information about financial transactions in an effort to combat crime, has found they are often interconnected.
“Despite the relative illiquidity of most real estate assets,” the agency says, “money launderers have used residential mortgage transactions — fraudulently and legitimately structured — to disguise the proceeds of crime.”
…
Oh God, seriously? I never would have thought ‘that’?
Right, when the mf’r hasn’t even SEEN the property on which they are bidding, nope, nothing fishy there? And w/ legions of starving realtwhores, no room for manipulation there either huh?
Can we -please- get a handle on this situation once and for all? Please.
Professor:
Good in theory but you have willing buyers and you need to sell. I guess just let the treasury look into it after the sale.
In Humboldt county, California (AKA dope capital of the world), housing prices have only fallen by around 15% since the peak, the foreclosure rate is the lowest of any county in California. And there are no jobs here. Small businesses, politicians, and even our DA all embrace the dope culture here…because it brings in loads of money to an economically depressed area. Walk around the plaza in Arcata any day to see drug deals going down and bums lighting up. I can guarantee you that for many years the drug profits have been rolled over into local real estate.
My wife works at a local bank and has seen no shortage of “bums” who come in asking for their SSI/welfare check and have no job but yet own 8+ rental/grow homes in this community.
Maybe I will move north. Dang. Just like eddie implies, why let the folks make $ while you just stand there a whine.
It is either WS or GS or dope.
There are other ways, I am sure, but when The Tup perware guy has a ‘Eazy Up’ tent outside of his house and selling tuppe rware, I presume that things are either a, getting creative, or b, dire.
BTW, he had signs up everywhere and ppl were stopping while biking, walking, driving (me) and buying. Well, I got there 1st and got pushed aside for the gays that were approaching. Well, he lost my sale. Desert doesn’t take kindly to getting ignored. But I think he got some dates.
PB,
We’ve discussed this before, but I really think there is a large supply of USD in China (among other countries), and they are dumping the dollar.
I have no idea what the tax/legal ramifications are, but think they have the right (???) to buy property here with their dollars — assuming those dollars were saved legitimately over the years(????).
“At one point, Dubai was said to house 80 percent of the world’s cranes.”
That must mean that at one point in the recent past the “Medical Industry” & “Education Facilities” in America only had 19.9% of the world’s cranes right?
I thought all the leftover cranes were being used by the Amish.
Filed under: “Collateral damage of: “Shazam-Islam-is-now-Democracy” …the last time I saw Condi she was on Jay Leno laughing and still single.
“The divorce rate in the armed forces increased slightly again in the past year as military marriages continued to bear the stress of the nation’s ninth year at war.”
Military divorces edge up again in 9th year of war: AP
I imagine the culture shock to GIs returning to a passe U.S. from the turmoil of Afghanistan has a lot to do with these divorces. How could a wife (or anyone else) who hasn’t been there relate?
What could be of interest to a returning combat veteran that our society has to offer that can take his mind off of his experiences?
Does he really care that his wife is upset that she broke a nail, that her coworkers talk behind her back, that Paris Hilton got her hair done?
How could he care? Why should he care? How could any of this be of any importance to him?
It may turn out that he is bonded to his war buddies more than he is bonded to his family.
History repeats itself once again. Remember Viet Nam?
Remember Viet Nam?
Now my granddaddy sang me this song
Told me about London when the Blitz was on
How he married Grandma and brought her back home
A hero throughout his land
Now I’m standing on a runway in San Diego
A couple Purple Hearts and I move a little slow
There’s nobody here, maybe nobody knows
About a place called Vietnam
Lyrics: Johnny Come Lately, Steve Earle
+ + 1 Combo……SPOT ON !!
combotechie,
( Unlike ’some’ of my fellow Guard members ) I actually -have- been stationed overseas for a long, long time. In fact I was in the P.I from 2 MAR 83 to JUN 88.
You go thru phases. At first you ‘love’ the place and all the new and exciting experiences! Then… you begin to realize ( this ain’t the states mf’r ) You HATE all the rooty-toot ricky recruits fresh off the boat and get real testy w/ the locals.
Then… it just “is” and you don’t care any more. In fact, you’ll reach a point where don’t even care if you ’see’ “The World” again? Besides, you have this lucrative sideline black market thing goin’ on?
Isn’t there a saying: “You can’t go home again”?
You really can’t understand what that saying means until you look back at some point in your life and finally “get it”.
Until then they’re just words.
combo,
Yeah, I could ‘look’ at a guy and tell you how long he’d been there. I -know- you’re a newbie cuzz’ you still give a rip. Freakin’ boot camps!
You can also tell the guys that were ’short timers’ cuzz’ they went out of their way to let you KNOW they didn’t give a rosy rip! Run up unpaid bar tabs, total out their car, DUI ( yep, Smitty’s ’short’ alright! )
from the turmoil of Afghanistan has a lot to do with these divorces.
From another angle, when you are the wife/family, you get used to being in charge and making things work- unfortunately dad isn’t home to be a part- and then dad gets home and The Col starts ordering you around as if you don’t know Sh, and that you are HIS soldiers. It doesn’t work either way.
First the soldier has had his/her head scrambled from living and seeing the real world and then he/she comes home hoping that you are the ‘guys’ he/she were imbedded with and you have lost that comraderie.
You, the soldier, go through a depression as well as the phoniness of our MSM lives is a shock again.
Not saying I know personally- cept for having The Col for dad.
This war isn’t right. No war is.
My PT is Viet vet suffering from 4 stints and agent orange. His humor is only thing that keeps him sane. Listening and asking him to talk to me is really an eye opener.
It must be very difficult for the returning soldier, for yrs.
My dad did fine after Iwo. Loving devoted husband and father til the day he died. I miss him. Today is his birthday. We should be driving to the mountains today to hunt deer (rather to have a long walk in the woods and discuss the merits of a hand full of Aces, women’s breasts and single malt scotch).
OK, who’s doing some stimulating today?
I may stimulate. One of my lens needs a new filter.
Who else here is a closet stimulator? Come out, come out wherever you are.
Why do I have a “feeling” that you’re am·bi·dex·trous?
Oh, I think I’m just pun-tastic!
OK, I bought that filter.
I hemmed and hawed all week (which is ludicrous in and of itself) but it’s $40 and I want it, and now it’s mine.
Stimulate that, Dubai!
I will do my part today…Beer & a burger while watching some college basketball…
I walked to the local strip mall to observe other people stimulating. I guess I like to watch.
No shopping for me today. I am make it to the store tomorrow to get bacon and eggs. Having the son home for Thanksgiving break makes a difference in the fresh food we use.
Strapping sons have a maw like this:
I’m surprised bacon and eggs is ALL you would need to buy.
Oops, wrong maw. Try this one:
Maw? I thought you said craw.
It’s just the part I miss judged on. There’s steak, spaghetti, pizza, leftover turkey, and chicken besides vegetables and fruit.
I did all my stimulating in the past few weeks. Buying a bunch of outdoor gear which culminated in my first snowshoe outing yesterday. Luckily a lot of it was on sale.
Hopefully I’m good for a while, though I might just have to buy downhill ski equipment. Winter sports are expensive!
(still managing to stash away cash, though)
Pudy tat, did you have a good Thanksgiving?
More importantly, where is the description of the meal you cooked?
I went to a Russian friend’s place for the holiday.
Seriously, those people can drink! I was drinking wine, and they were matching me with vodka!
And the food was fantastic. The turkey was free-range, fresh not frozen, and absolutely and utterly kicked @ss in taste just by itself without any sauce. I was a happy camper.
And the glittering array of hors d’oeuvres was phenomenal. Nothing was “fancy” but just the spread and variety made my evening.
Ochen horrorshow!
Au contraire, mon frère!
There were a lot of toasts about how their new country had given them a “home”.
I assure you I am not the sentimental type (like duh!) but I found myself extraordinarily moved.
For once, people were thankful as was I - it was true to the spirit of the occasion not just a buncha lip-service.
Plus, the great food and wine didn’t hurt either.
Love fresh cooked turkey. Yummmmm.
‘There were a lot of toasts about how their new country had given them a “home”.’
I studied Russian in the early 1980s with a recent immigrant. She was impressed by the great abundance of available housing in the US, but appalled in equal measure by its dilapidated condition (thank you, HUD)…
Russian friend came to my place this time. So, Maine lobster Wednesday night, turkey Thursday, and oceans of borsch at all times. (He swears “borsch” should not be spelled “borscht.”)
You couldn’t pay me to fight the crowds today, especially not with such rich trading opportunities to be had from home (thanks, Dubai!).
DH, however, left the house at 5:30 to go to Sears to get new tires for his car. Yes, tires were one of the Black Friday doorbusters. Alas, they had none of the advertised tires in stock. He noticed that the rest of the mall was open, but not yet crowded, so he decided to pop in for a pair of sneakers. He said that just about everyone in the mall (at six or so in the morning) was a teenager.
Do garage sales count?
Yes.
It’s not the size of the stimulus that matters but whether you stimulated at all or not.
FPss.
My mind wandered to another place & time..
Oh yes.
Stimulating, stimulus, bungee jumping, naked, cranes, I think I see a thread here! Where is Olygal when we need to thread this altogether with geoducks?
Since I am a betting man, I assure you the following probably describes Oly’s state:
head
throbbing sensation
hangover
water
ice on head
lots of water
hangover
hair-of-the-dog
Did I mention hangover?
Hey did the subject of “reverse mortgage” come up in anyone’s Thanksgiving gatherings yesterday?
No, but a senior citizen told me ‘Now was a good time to buy’.STG!
The wine was really really excellent.
Does that answer your question?
“Then, earlier this month, he told Dubai’s critics to ’shut up.’”
That’s one way to deal with the naysayers on your commercial real estate boondoggle.
Well, you can’t seriously argue that that wasn’t a well-reasoned intellectual sanguine scientific response.
What does science have to do with Islamic investment banking?
Well, you can’t seriously argue that the logic is not impeccable.
Remember the term: “We’ve been skunked”
Score: 0 out of 7
O.C. hotels trim room rate discounts:
By region, 0 of the 7 slices of the county PKF tracks had year-over-year room rate gains
http://lansner.freedomblogging.com/2009/11/27/oc-hotel-rates-tumble-11/45813/
About this time, a year ago, I attended a wedding in Rochester at which there were many international guests. They were all talking about Dubai being the “next big thing.”
Yup, just not like that.
Mugster!
Yeah, I had me doubts from Jump Street. Building a freaking model of the The World ( ewwww…. ) out on a freaking sandbar or something.
We were all so ‘impressed’ watching one special after another on Discovery and NatGeo. Ewwww.., Ahhhhh..,
It’s a good thing those billionaires did all of that research on this crazy new thing called “erosion,” which is hard to understand and observe, even for a six year old standing by a creek.
Dubai has no oil. Think about it for a minute!
The entire game was a ponzi scheme from day one.
I will admit, those little robot monkeys that smack the racing camels’ backs are mesmerizing.
FPSS,
No reason to doubt you sir. I think it was just a matter that altogether too many of us were distracted staring down the barrel of CDS/MBS/CDO/ARS/SIV’s to really have the TIME to give a rip?
Otherwise I’m sure we’d have gotten around to it eventually.
Is that your new pet phrase now? “To give a rip”?
When I think of “rip-snorting”, the word “bodiceripper” always seems to follow which is why I find your usage funny.
FPSS,
When you’re hungover like a dog, it just seems to have a certain ‘flow’ about it, don’t you think?
Yeah, made the rounds w/ the in-laws yesterday ( and they’re no freakin’ altar boyz either? ) Not-a-rhum-drinker. Not like I once was.
“Not like I once was.”
But I’m as good once as I ever was?
I’m as good as I ever will be.
I love these conjugation lessons.
Eddie, you’ve been a great sport about being bashed here. Just promise us all one thing: that you won’t go away in six months when it’s obvious your bottom call was incorrect.
I don’t think any of the Pollyannas have stuck around.
That’s true! Whatever became of yesteryear’s troll brigage, including Gekko, BeaConst, AntonioVillaraigosa, LV_Landlord, etc etc etc. We sure do miss the trolls of yesteryear.
When Eddie’s bottom call proves wrong, I fully expect him to simply deny that he ever made it.
Dude the bottom has come and gone. There is no call to make. It’s done.
Will you admit your call that Dow would be at 3000 ever happened?
I’ll admit that your tireless willingness to lie far exceeds my patience to endlessly refute.
Presenting an alternative opinion is not lying. Jeez man you sound straight out of the USSR circa 1936 where anyone who disagreed with the propaganda of the day was a liar.
What have I explicitly lied about? i said the housing market has bottomed. How can you possibly say that is either a lie or the truth? There is no absolute answer one way or another and we won’t know that answer for a long time, either way. You can of course disagree with me and say I’m wrong and present a counter pov. But to call me a liar for expressing an opinion that differs from yous is intellectually dishonest. And I think you know that.
Same goes for me saying stocks will keep climbing for the foreseeable future and the economy is nowhere near as bad as what the MSM makes it out to be.
I suppose there is a fine line between outright lying and holding an opinion that doesn’t square with the evidence.
Eddie ,I want to see if your going to lie about this question to you . You use to be Joey before you changed your handle ,
right?
SD RE Bear and I were disussing this one night. We both think he’s Joey.
“You use to be Joey before you changed your handle ,
right?”
You nailed it! Joey the name changer has been defrocked!!!
BwaHaHAHAHAHAHAHAHAHAAAAAAAAAAAAA!!!!!!!
Aaah, the trolls.
You can never go home again!
Trying to think of a good inflation hedge where you can park your multimillion dollar year-end bonus loot? Try art.
* ARTS & ENTERTAINMENT
* NOVEMBER 20, 2009
The Art Market Shows Signs of Life
Sales were strong at fall auctions, though some key works fell short
By Kelly Crow
The U.S. art market appears to be on the mend. The major fall art auctions may not have sold everything on offer, but collectors showed a renewed willingness to bid up top examples of artists’ work. Dealers also said inflation fears and expectations of higher bonuses in the financial markets stoked strong bidding.
…
DinOR, I don’t know if you’ve seen this:
Direxion Daily Financial Bear 3x Shares (the Fund), formerly Direxion Financial Bear 3X Shares
Also a little OT: have you guys heard of the “tungsten filled gold bars” scheme? LOL!
The amount of “salted tungsten” gold bars in question was allegedly between 5,600 and 5,700 – 400 oz – good delivery bars [roughly 60 metric tonnes].
http://www.marketoracle.co.uk/Article14996.html
You know, Archimedes solved this problem a really long time ago. You just need a basin of water and some measuring cups.
Running down the street naked shouting “Eureka” is entirely optional.
basin of water and some measuring cups.
Running down the street naked shouting “Eureka” is entirely optional.
That was pre-thanksgiving. As in prepping food.
Eureka happened running through the house. lol
For measuring specific gravity that is fine, but tungsten and gold are almost identical in that respect.
W : 19250 kg/m^3
Au : 19320 kg/m^3
Even a high-school apparatus should manage that.
It requires the will to be sceptical, and verify things, and so on and so forth, but that will always be missing.
Yes you could get an accurate weight, but accurate volume is much tougher. To measure by volume, you would need ultra-good calipers and a perfectly shaped bar. Measuring volume by water displacement is not too accurate because the water meniscus is too irregular. Somebody said they “drilled” the bar to look for color, but you lose gold scraps that way.
It would be easiest to measure resistivity.
Fine, but measuring resistivity isn’t exactly rocket science, is it now?
Any high school can do it.
It’s the will that is missing.
“‘It would be easiest to measure resistivity.”
How about if one measured resonance by “ringing” it, as one would ring a bell?
I heard this is how coin dealers test gold coins.
As far as the missing will thingy, some monetary darwinism will eventually make its entrance, set its course, and work its magic.
Resistivity and Density?
Cheap equipment.
Resonance?
Fancy equipment and/or trained ear plus tuning forks.
Why get into details? All that is missing is the will not the bloody fre@kin’ equipment!
Whoopsie. Think of this 47% as a 6 flags rollercoaster. wheeeeeeee
“Think of this 47% as a 6 flags rollercoaster”
Why just think of it… ride it on youtube!!
http://www.youtube.com/watch?v=kUldGc06S3U
All this strum and drang over Dubai going broke. There are a few dozen Dubais coming down the pike.
+10
Dubai = heute sturm und drang
think Europe, Australia, China, Canada.
USA?
Paul Brewbaker is a hack and a serial real estate cheerleader. He has an agenda, and is incapable of separating his economic views from his (right wing) political views, even when the two are absolutely irreconcilable:
“Turn off the TV. This thing (the idea that a recession is under way) is in people’s heads.” - Sep 2008
“Brewbaker scoffed at the recession-promoters as simply piling on, and said the “vast majority” of economists don’t see a recession ahead.” - Nov 2007
“This ain’t no stinkin’ bubble.” - Dec 2006
“It’s better to get on the train now, because it isn’t coming back” - Jan 2006
Now, tellingly, he seems to be promoting selling off American property to the Chinese. True blue American, that one.
From an online question forum with Paul Brewbaker:
Me: Over the years, you seem to have been a consistent apologist for high housing prices, and have made dozens of disingenuous comments about how there is nothing fundamentally out of line where it comes to housing prices, blaming the high prices on the high cost of living, a strong economy in Hawaii, etc etc. As recently as 2006, you made the following (typical) statement about Hawaii RE: “It’s better to get on the train now, because it isn’t coming back,” you said. No mention of the role of banks, regulators, brokers, appraisers, ratings agencies and the Fed in creating the largest nationwide housing bubble in American history, creating a lot of problems for Hawaii. Even now, you seem sanguine on the risk this bubble poses to Hawaii. So, since everything we have seen for the last six or seven years is, according to you, based on fundamentals, and the Hawaii real estate market is doing so great, and the economy is strong, can you explain why I am seeing condos on Maui that sold in the 300-325K range in late 2006/early 2007 being sold (short sale) for 200k? A follow up: Do you feel any shame whatsoever for essentially being the mouthpiece for the speculative interests who either 1) put home ownership out of reach for a generation of Hawaii residents, or 2) created a generation of mortgage slaves?
Him: My answer is: (1)no; and (2)never happened.
Me: So when you say there isn’t a generation of mortgage slaves, how would you define the generation of people in Hawaii who make a median income of mid-50K and now are coping with 650K median housing prices?
Him: Let me suggest to Matt and many others who are concerned about housing affordability in Hawaii that there is long literature on this subject, some of which can be found in things I have written, the conclusion of which is that there is nothing really new in the current environment (defined as today’s incomes, home prices and interest rates) relative to the way things in Hawaii have been for all of the decades for which I have data–which is about four or five decades, but not for all data. Matt thinks that makes me an “apologist” [his term], indeed, a “consistent apologist for high home prices.” Whatever. It is what it is, Hawaii is like what it’s like. I didn’t invent it, I don’t even claim to understand it more than anyone else. Don’t blame the messenger if you don’t like the message–I didn’t ask you, you asked me. Having said that, I encourage Matt and anyone else who thinks that I should pound sand to go get the data for four-person family median incomes, get the data for median home prices, get the data for conforming fixed-rate mortgage interest rates, and calculate for themselves an index of affordability from the data extant. It’s easy to do, “it’s all on Internet” as people nowadays love to say. Knock yourselves out. Alternatively, cheat and download an index like this from http://www.uhero.hawaii.edu. You will find, because I’ve done it, and I’ve even published it from time to time, that on a cyclically-adjusted basis the current configuration of incomes, prices, and mortgage rates comprises no worse a situation in Hawaii from a housing affordability standpoint from any other extreme of the housing valuation cycle in Hawaii. If you do the homework, that will make three cycles for which the complete calculation is possible, to my knowledge of the data (which collectively get you back to the early-1970s). That’s not a judgment call, that’s not an apology: that’s a fact, Jack. If you are really smart, you can calculate from the underlying income distributions, relative to the underlying home price distributions (in which case, of course, you need higher-order moments than the central tendencies such as means or their lame cousin, medians) how the relative welfare positions of various income quantiles have changed over the cycle as housing valuations change. I know a guy who likes doing this math BY OCCUPATION (better yet, a developer!). Note that home price movements are not monotonic by quantile, but you can discover that for yourself. You will doubtless find, although this is more of an hypothesis, as I haven’t updated my own calculation for a year or so, that the situation from 2005-2007 is not disimilar from the situation in 1980-82 and in 1990-92. By implication, the situation at the other extreme of the valuation cycle (e.g. circa 1998 or 1986) would have a constellation of variables yielding the opposite result (relative affordability as opposed to relative inaffordability). So, in layperson’s terms, it doesn’t get much worse than this–it has, in fact, been worse than this historically, but not by much–and while it does get better than this in Hawaii, it’s never as good in Hawaii as it is in many places on the U.S. mainland, although it is better than some, sometimes. I’m not sure why anybody would think that it should be as affordable in Hawaii as on the U.S. mainland. I will assert–although you are welcome to do the math yourself–that it was not much more inaffordable in Hawaii ON AVERAGE as of the end of 2007 (the most recent data I have) than it is or was at that time in San Francisco, Oakland, Fremont, San Jose, Sunnyvale, Santa Clara, Anaheim and the rest of Orange County and much of the greater Los Angeles area and much of San Diego County, California, although obviously these things do change over time. The same could not be said of the early-1990s, when Honolulu, in particular (but also somewhere like Maui), was unambiguously less affordable than all of those places. Just as a note in passing, it was way CHEAPER (relatively speaking, in affordability terms) in Hawaii than in California around the year 2000 plus or minus a year or two. That’s when I think I was variously quoted (I paraphrase) that “you should buy real estate” (at the time), or “you should have bought real estate” (now that the window of opportunity has closed). These comparisons are, admittedly, between Hawaii or Honolulu and the most expensive places to live in the country. Papers and papers have been written about why this is so (why these places are more expensive than others). On the demand side the reasons are obvious: better places to live than everywhere else by most Americans’ reckoning, and therefore places for which residency is in high demand. On the supply side, while debated, I and an emerging consensus in the literature think that a toxic combination of geographic scarcity and regulatory scarcity are to blame. NOT, I might quickly add, the economists who study these things, be they apologetic or not. Talk to your representative about regulatory reform, because the last time I checked you can’t change geography. Or, talk to the hand. Take your pick. The regulatory environment IS something people in Hawaii actually asked for, so one can’t possibly blame me for that. This is a democracy after all. It’s the Politics of NIMBY. Yo, if you think I’m making THAT up, Google “The Politics of NIMBY.” While you’re at it, Google “Glaeser and Gyourko” and start reading, if you really want some answers, but hey, don’t blame me because I actually did the math. Cut and paste this link and do your own homework if you don’t like copying mine. Check out:
http://www.google.com/search?hl=en&q=Glaeser+and+Gyourko.
Today’s thought from the late, great H.L. Menchken (1880-1956)
“As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron.”
http://jpetrie.myweb.uga.edu/mencken.html
Been there / done that. Don’t tell me you already forgot 8 years with W in the WH?
Exactly my thoughts Pbear…
Where do I send your Palin/Jeb 2012 bumper sticker?
LOL
Jeb? Bah. The Dems are shooting for the moon. They want Palin/Beck.
Beck has already said no thank you.
Right from the horse’s ass:
http://tinyurl.com/ye3s8cq
Dubai Default: Moral Hazard For Sovereign Debt
Posted: November 26, 2009 at 12:29 pm
24/7 Wall St
Dubai World, the de facto sovereign fund for the desert nation, has essentially defaulted on a large part of its debt. It has asked creditors for a “standstill” on paying back its $60 billion debt until May or perhaps later. Most of the debt is attached to the fund’s real estate arm known as Nakheel.
According to The Wall Street Journal, “The cost of insuring against a Dubai default rose sharply again Thursday in London, to $547,000 per year per $10 million in debt. That was up from $318,000 on Tuesday.”
This may not be the end of it. If Dubai is bailed out by other Arab nations or creditors give it reasonable terms to ease it obligations, sovereign commitments will have their own example of a “moral hazard” to consider.
…
Shiller (of Case-Shiller) believes we’re in a new RE bubble. The Newsweek article below suggests we are in an echo bubble, a phenomenon which has occurred throughout history, and that these will not grow as big, and will pop sooner than the last one (which of course raises the question of when did the last bubble start)
For the past several months, investors have been acting like it’s 1999, the first year when the Dow crossed 10,000, and stocks took off in complete disregard for reality. Yet the atmosphere then and now couldn’t be more different…
Where is Robert Shiller (the bestselling author of Irrational Exuberance) when you need him? In fact, the Yale professor, who accurately foretold the crash of 2001, has just finished tallying the latest Case-Shiller index of top U.S. housing markets, which shows that home prices fell 7.2 percent between December and April, before rising 5 percent between April and August. While historical gaps in data make it tough to track perfectly, Shiller believes we have just seen the sharpest turnaround in American house prices in a century…
How is it possible that home prices are going up again even as employment is going down in most parts of the world, wage growth is nonexistent, and public debt levels are reaching record highs? “We’ve just gotten very speculative in our behavior, and it’s a change that will likely last. I’m inclined to say that we’re seeing a new bubble,” says Shiller.
Or, more accurately, an echo bubble. It’s a term economists use to describe the smaller bubbles that follow on the heels of major ones, usually after the authorities helicopter in loads of cash to patch up the first round of damage, setting the stage for a second round of easy-money-driven speculation. The phenomenon has been observed throughout history, from the British railway bubble of 1830 to the Saudi stock bubble of 2005. Edward Chancellor, author of Devil Take the Hindmost: A History of Financial Speculation, says, “Echo bubbles tend to be smaller and fade away faster than the first bubble.” On average, they reach about 30 to 40 percent of the size of the original before bursting and sending market values back down to where they should have been all along, wiping out the gains of the echo, but generally not dipping back to the previous low. That implies a Dow falling to 7000 or 8000.
http://www.newsweek.com/id/220402
The head of the FHA used to be president and COO of Long and Foster: http://www.nytimes.com/2009/03/24/us/politics/24appoint.html
Talk about appointing the fox to head up security at the henhouse.
This clown will destroy the FHA in order to reflate the bubble and create more debt slaves.
The Administration must have wanted to select a true believer to head up the FHA, to try and make as many sales/loans as possible. And now we’re wondering why the FHA is becoming the next subprime crisis.
From the link:
Mr. Stevens, who would be assistant secretary at the Department of Housing and Urban Development, is president and chief operating officer of Long and Foster Cos., a real estate brokerage based in Chantilly, Va. He has worked at Wells Fargo, the mortgage finance company Freddie Mac and World Savings Bank, a lender based in California.
The same World Savings really pushed neg-am mortgage? The one that sunk Wachovia after Wachovia bought them out? The same World Savings that might sink Wells Fargo?
It’s no wonder FHA is sinking deeper with every passing month. That’s what this kind of “talent” does for a company.
Miami May Delay $120 Million Bond on Audit, Possible SEC Probe.
Nov. 27 (Bloomberg) — Miami may delay a $120 million bond sale after an audit showed lax budget practices and the city learned of a possible U.S. Securities and Exchange Commission inquiry, Mayor Tomas Regalado said.
Officials had planned to travel to New York on Dec. 7 to meet with underwriters about the bonds, which were to finance parking garages for the new Florida Marlins baseball stadium, the mayor said in an interview. The $515 million sports complex for the Major League Baseball team is being built with $360 million of public funds.
The internal audit showing the city didn’t comply with its budget standards, and a possible SEC probe, which would have to be disclosed in bond-sale documents, might alter timing of the issue, Regalado said.
“What concerns me about the audit is the appearance of impropriety and whether the SEC will follow up,” Regalado said. “This could affect the sale of the bonds.”
Regalado, 62, took office on Nov. 11 facing declining revenue with property taxes projected to shrink 6.6 percent during the fiscal year ending Sept. 30. He’s seeking to renegotiate a union pension agreement that will cost the city $90.5 million, 18 percent of its 2010 budget. Expense control is necessary for the city to maintain its A+ general-obligation bond rating, the fifth-highest investment grade, and “stable” outlook, Standard & Poor’s said in a July report.
Tigers Woods ’seriously injured’ in car accident after driving into tree outside home ~ Mail Foreign Service
‘Serious condition’: Tiger Woods, 33, crashed his car near his house in Florida
Golf legend Tiger Woods was seriously injured in a car accident today after crashing near his Florida home, it was reported tonight.
The 33-year-old, who is worth more than £500million, first hit a fire hydrant and then drove into a neighbour’s tree moments after pulling out of his drive.
According to investigators, the airbags in Woods’ 2009 black Cadillac Escalade did not deploy, meaning the vehicle was travelling under 33 mph when he crashed in the Orlando suburb of Isleworth.
The world Number 1 golfer was rushed to Health Central Hospital in Ocoee in a serious condition.
Woods was transported from his Windermere-area neighbourhood by the hospital’s own ambulance.
What I read was 2:25 AM
I wonder if Mrs. Tiger got a club head on him before he was able to get in the car.
‘Cash for Clunkers,’ household edition…
Program expected to boost appliance sales as economy drags
The proposed program would encourage consumers to buy energy-efficient household appliances. ~ Washington Post ~November 27, 2009
In U.S. history, there may have been no better time to own a junk car, a rattling old fridge and a leaking dishwasher.
On the heels of its ballyhooed “Cash for Clunkers” program for cars, the federal government is expected to finalize details in the coming weeks of another tax-supported shopping extravaganza, known as “Cash for Appliances.”
Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models.
And like the $3 billion cars program that gave consumers money for swapping their clunkers for more fuel-efficient rides, the appliance initiative seems destined to inspire shoppers, drive up sales for a while and profoundly divide economists over how much lasting good this chunk of government spending will do for the economy.
“The premise seems to be that for Americans to be richer, they need to throw out their old appliances faster — I don’t see it that way,” said James D. Hamilton, an economics professor at the University of California at San Diego, who has blogged about the clunkers rebates. “I don’t like the idea of just spending money for its own sake.”
OK I admit it - I”m waiting to get a little cash for my old refrigerator with the broken handle. I hate throwing big things in the landfill, but I am wasting energy with the old fridge. How much do I get?
Don’t forget cash for drafty windows.
I had new sooper dooper energy efficient window put in my house and the govment is picking up 30% of the tab. The utility company is paying another 15% (spread among the rest of the rate payers) so I’m making out like a bandit.
I’m feeling the “Echo Bubble” ……when is the Echo Crash going to take place ?
I am wondering if the echoes will look more like a stabilizing wave where the oscillations diminish over time or just a bounce on the way down?? The Great Depression had a few bumps too on the way down. It is my understanding these were interpreted at the time as proof the market had bottomed out…
Fascinating comments to an article in the Economist regarding the Dubai crisis. One poster provides a firsthand account of a “ghost town” since February 2009 and questions why financial analysts didn’t see this coming. Say no more…
http://www.economist.com/node/14977157/comments
Come on Australia, can’t you learn from our mistakes?
test strikeout normal
test strikeoutnormal“Fort Worth’s riverfront plan promises to create development on the Trinity that will double the size of downtown. Is that a good thing? And can Fort Worth pull it off? Former Republican County Chair Steve Hollaren, an accountant, points to high end condos near downtown that sit vacant and questions whether there’s a market for more on the water.”
Who in their right mind would want to have a dwelling on the banks of the Trinity River for God’s sake? A mosquito infested swamp 8 months out of the year, and a flood zone the other four.
We used to call that area the river bottoms.