Bits Bucket For December 14, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
December 14, 2009
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Paul A. Samuelson, Economist, Dies at 94
By MICHAEL M. WEINSTEIN
Published: December 13, 2009
Paul A. Samuelson, the first American Nobel laureate in economics and the foremost academic economist of the 20th century, died Sunday at his home in Belmont, Mass. He was 94.
His death was announced by the Massachusetts Institute of Technology, which Mr. Samuelson helped build into one of the world’s great centers of graduate education in economics.
In receiving the Nobel Prize in 1970, Mr. Samuelson was credited with transforming his discipline from one that ruminates about economic issues to one that solves problems, answering questions about cause and effect with mathematical rigor and clarity.
When economists “sit down with a piece of paper to calculate or analyze something, you would have to say that no one was more important in providing the tools they use and the ideas that they employ than Paul Samuelson,” said Robert M. Solow, a fellow Nobel laureate and colleague of Mr. Samuelson’s at M.I.T.
Mr. Samuelson attracted a brilliant roster of economists to teach or study at the university, among them Mr. Solow as well as others who would go on to become Nobel laureates like George A. Akerlof, Robert F. Engle III, Lawrence R. Klein, Paul Krugman, Franco Modigliani, Robert C. Merton and Joseph E. Stiglitz.
Mr. Samuelson wrote one of the most widely used college textbooks in the history of American education. The book, “Economics,” first published in 1948, was the nation’s best-selling textbook for nearly 30 years. Translated into 20 languages, it was selling 50,000 copies a year a half century after it first appeared.
I’ll be darned, I wouldn’t have known PJS was still alive, since his text was certainly the “classic” when I was in college (early 60’s). I don’t think being Paul Krugman’s mentor would be anything to brag about. Krugman’s incessant calls for further stimulus seem idiotic. Heck, see the “China bubble” post by Leighsong below.
Anyone want to buy some citi stock so they can repay tarp?
only if I can borrow the money to buy the stock from the FED for zero percent.
Isnt funny how these banks are issueing more stock to repay the govt?So essentially gullable investors are repaying tarp for them.Bofa raised billions last week to repay tarp.Am I not seeing something here?
Bingo. Maybe the next stock-market downdraft has to await the completion of TARP repayments. Get the new stock issued, get the TARP repaid, then let the stock market go to heck in a handbasket, as surely it must (P/Es too high for a no-growth economy).
Also, with another stock market crash, they can then scream for more TARP to “save the eCONomy” and get even MORE LOOT!!
Do you consider front men for the Fed to be “essentially gullable investors”?
It could be a combination of FED front men and an implied threat to get pensions and mutual funds to buy more of their stock.
So they repay TARP with Issuance of stock. Then they pay themselves HUGE bonuses. Then they will adjust their balance sheets to realize their actual mortgage losses, THEN they will ask the govt for more help.
By repaying TARP, they are establishing credibility that they will be good for any borrowed money. Thus, the taxpayer can feel more comfortable bailing them out next time for a much larger amount. After all, it seems a 20% profit was made by the taxpayer on the deal. And clearly the next bailout will be a proper bailout as it will cover all the bad assets. Once that is paid back then everything will be settled and the stock must climb again. Knowledge of that fact (the markets always look ahead) will keep the stock price high even now, allowing the govt to get out with the 20% intact, and the 20 billion worth of new shares to not cause any dilution. It is a cunning and brilliant plan, but not without precedent. See SPG and other REITs for examples. SPG is almost at a dilution-adjusted all time high even though it is in the mall industry. That company is living proof that the concept of dilution is so last century.
Am I not seeing something here?
More like smelling something here…
“only if I can borrow the money to buy the stock from the FED for zero percent.”
Better make sure that loan is no-recourse!
I prefer Charmin.
I prefer Charmin.
The blue or the red one?
I like the green one that is becoming the U.S. dollar.
Actually Dude this is the way it’s supposed to work,$hitttty used to have 5 billion shares now its 22 and counting…dilute the shareholders
So even at $4 a share its still overpriced..but hey those bankers dirtied their diapers over the pay capping ,..had to clean themselves up somehow…
“Actually Dude this is the way it’s supposed to work,$hitttty used to have 5 billion shares now its 22 and counting…dilute the shareholders”
Shareholders should have been fully wiped-out, and debt-holders should have become equity-holders. In that case, we would be diluting the old debt-holders now, which would be equitable.
Prime…maybe that is round 2…dilute then wipe out
Shareholders should have been fully wiped-out, and debt-holders should have become equity-holders. In that case, we would be diluting the old debt-holders now, which would be equitable.
+1
Citi for all intents and purposes went bankrupt, thus the shareholders - including the execs with tons of stock options - should have ended up with nothing.
Same for JPM and GS, BTW.
If the TARP had been done in any reasonable way - a condition of receipt of TARP funds would have been bankruptcy declaration and reorganization. That way it achieves both the goal of “protecting the financial system” by allowing the TBTF banks to remain intact, but at least punishing the institutions by wiping out the shareholders, in a way that’s way more significant than the current slaps on the wrists.
But in a very real sense, the creditors are ALL THE ACCOUNT HOLDERS, and through the FDIC we’re already insuring their losses. I’m not defending the bailout, just pointing out that at some level, the taxpayers were on the hook either way. And THAT’S why we should be more careful to prevent this sort of RE/credit/investment bubble in the first place.
Not true, Jim; I am TOTALLY fine with the government stepping in to backstop losses to depositors (e.g. FDIC) and account-holders (at investment firms).
But that is emphatically NOT what happened. Stockholders and bondholders were instead the ones protected–which is not at all right. They classes of investors should have known their investments involved risk.
Perhaps I was unclear. I suspect that one of the reasons that the government stepped in is that the FDIC COULDN’T AFFORD to bail out the depositors. And in the interests of avoiding a national run on the banks, they tried using other means to bail out the banks. Yes, I wish they’d zeroed out the shareholders. But the panic that was coursing through the economy a year ago was not encouraging. To expect that every action that the government tried to do to stem the panic would work out well isn’t realistic. Of course the idea that valuations (of RE and bonds, and equities) can or should soon return to their credit bubble heights isn’t realistic either. But a slow decline in real terms isn’t a bad goal.
If you have a citi credit card, be extra vigilant with your account. A few examples of things to look out for:
1. If you still use mailed statements, watch out for statements mailed very late repeatedly (often received after the payment due date), with resulting late fees, penalties, and interest payments. The customer service department will refer to these as “mail glitches”. Oddly enough, no other mail such as utility bills will have the same ongoing problems.
2. Delayed posting of your payment to your account, resulting in late fees, penalties, and interest payments. The posting delays may be as much as two weeks after they have transferred money from your bank/checking account.
3. “Foreign Transaction Fees” for using your card in other countries, including Canada, sometimes running to hundreds of dollars. People have complained about this, according to the financial section of the local rag, and generally the “fee” will be removed since it probably wasn’t defined or spelled out in the cardholder agreement. citi probably assumes most people won’t notice this scam and will just roll over and pay it.
4. Completely random “fees” and “surcharges” that have no obvious origin or reason.
5. Failure to credit your account when you buy something with your card and then return it for refund.
It looks to me like the banks on the government t!t simply don’t care anymore if they have customers. Just skim money from people’s accounts until they get tired of it and leave, then receive a perpetual welfare check from the fed.
I always pay my bill in CASH at the local $hiiittybank…i have to pass by it when i get off the subway….it gets credited immediately. Go home and check no kidding.
The others will credit the same day and deduct next business day out of the checking account…so I always get a email copy with a transaction #…..But I know they are being scum by making the day end at 330pm like discover did… 331pm is a late fee.
Hey sometimes you need to know these things if you have an emergency cash outlay.
So never mail a check. That’s what they are telling you to do.
———————-
1. If you still use mailed statements, watch out for statements mailed very late repeatedly (often received after the payment due date), with resulting late fees, penalties, and interest payments. The customer service department will refer to these as “mail glitches”. Oddly enough, no other mail such as utility bills will have the same ongoing problems.
WSJ
UPDATE: China Vows To Curb Rapid Property Price Rises
By Shen Hong and Li Liu
Of DOW JONES NEWSWIRES
SHANGHAI (Dow Jones)–China said Monday it will step up efforts to rein in what it calls an “overly fast” rise in property prices in some cities by boosting the supply of cheap public housing and redeveloping slum areas.
The pledge by the State Council, the cabinet, isn’t entirely new but comes as China’s top leadership appears increasingly concerned about the buildup of long-term inflationary pressure as a result of a fast economic recovery made possible by a government-engineered credit boom and massive public spending.
Beijing is faced with growing public anxiety over an overheated property sector, as well as a potential asset bubble in the stock market, which could eventually threaten social stability.
China’s urban property prices grew at their fastest pace in 16 months in November, with residential prices surging 5.7% from a year earlier in 70 large and medium-sized cities, according to National Bureau of Statistics data. The increase was the sixth in a row and the biggest since July 2008’s 7% rise.
Analysts were unsure about what impact the government’s latest plans will have on the overall housing market, because of the lack of details, but said their effectiveness would ultimately depend on implementation. (Cont’d)
Yes, the whole world lost its collective mind!
Leigh
Those silly Chinese. Do they really believe THEY can see a bubble when the great minds at the US Fed can’t?
with residential prices surging 5.7% from a year earlier
Amateurs.
So, what “methods & tools” do you think lien holders of 2nd mortgages in China have recourse to utilize, I mean within Chinese established bankruptcy law?
Isn’t bankruptcy over there a place behind bars?
“Isn’t bankruptcy over there a place behind bars?”
Only if your family can afford to pay your per diem expenses. Otherwise…
They are probably correct in attribute the new housing & stock bubbles to the govt-engineered credit boom and the massive increase in public spending. So what good is it going to do to try to dampen the prices of houses and stocks? Won’t the bubble just move to gold or something?
You should see India.
Big difference. There is a huge glut of home supply in China, and rapidly expanding efficient public transport systems. In India the supply situation isn’t great and unless you are in the city center you don’t have access to many urban facilities. So in a perverse way the price increases in India may indeed be more justified than in China.
Out of control building and little progress with infrastructure in India, by comparison. Banks pushing car and home loans, at 8 percent. The world’s most expensive real estate now in Mulabhar Hills, Mumbai. Saw structures for monorails (Mumbai, Bangalore, Chennai), that just ended somewhere without any work being done. There are some six lane highways, and the rickshaws still use the passing lane, or the cows. Said highway then feeds, irrefutably, into some narrow old streets. Stop and go traffic from then on.
They have their own Bloomberg style TV in India now, business news 24/7, with all these pretty young Indian female US and UK MBA graduates, rattling on the whole day long that India is now among the world’s top three economic powers.
As to IT, some firms now train villagers and install computer centers in rural villages. While that prevents some of the landflight and keeps them from moving to the slums, what does that to the “outsourcing”.
There is a feverish atmosphere about all things business. Oh, and all graduates of one of the top Indian business schools were hired within three days, most of them by Goldman Sachs.
Meanwhile for the common people. Rents quintupling in a few years. Onions and potatoes doubling in a year.
There has always been an air of superiority in the mentality in India (the most cultured, most spiritual etc, best system including arranged marriage - heck, they even had tantra thousands of years ago). But now, this attitude is obvious also in the area of business. They know Western firms want a piece of the cake called growth, and they are there in force.
In any case, this is such a complex country, so mindboggling.
hindu superior tantra -
So true.
This will end well -
Leigh
Since Asia and the U.S. are decoupled, the fate of real estate bubbles in China and India is largely irrelevant to the economic destiny of the U.S.
Sellers,
FYI: your “newly” remodeled kitchen, the one you did in 2002, is now going on 10 years old.
In 1998 I replaced the stove and dishwasher in the house I owned at the time. I elected to go with almond colored appliances to match the refrigerator, which was still in good shape. I sold that house in 2002.
In subsequent years, I’ve come to realize that almond colored appliances are to the 1990’s as harvest gold and avocado colored appliances are to the 1970’s.
I wonder if stainless steel will go out of style as the years march on. I think black and white colored appliances will be classic and have staying power.
I’m trying to start a trend where granite countertops, stainless steel appliances and the generic cabinets are called the “foreclosure” style kitchen.
“foreclosure” style kitchen.
Don’t forget “Pergraniteel“
A day late, $500k short…
granperstain?
Asparagus,
LOL. Yeah I think I’ve gotten past agonizing over that. Still, if we were to consider just how much less painful this would have been for ALL of us had developers pulled the plug on the damn upgrade fru-fru cr@p in 2005?
I agree with asparagus. Granite/stainless/travertine combo now has a stigma as the cliche formula for financial hardship/remodelling overachievement. Monuments to a painful, unhappy period in history. Faux-Mediterranean exterior stying will also be regarded as representative of the “mistake-period” of history. Cool is always the next uncool but especially this time around.
I want a new name!
I want a new name!
“Coriander”?
Granite and stainless steel appliances were done, when you started seeing it go into half-a$$ remodels of 1000sf crapshacks, on all the house-flipper shows.
I think that I need to set up the forms and an autoclave, so I can start building carbon-fiber toilet seats, to go on the billet aluminum toilets.
I disagree. Just because these things (Meditetranean or Tuscan style, granite countertops, etc.) are the poster children for the bubble, doesn’t mean they are inherently bad in style. Granted, there are a lot of bad renditions out there, but I believe a lot of houses built in the last 10 years will age a lot more gracefully than the monstrosities from the 70s and 80s, just as a Thunderbird from the 60s looks better than say, a Pontiac Aztek.
Mediterranean. Sorry, I’m typing this thing on my iPod. Now there’s an example of classical design.
FWIW - I always really loved Mediterranean/Tuscan style - but have been extremely dismayed to see how popular it’s become.
The real crime is where the developers were building Tuscan style houses in the Pacific Northwest. That’s just flat out WRONG. Just as you don’t build cedar sided mountain homes in Phoenix, you don’t build Tuscan homes in the PNW. A$$holes.
All of the new Med-style homes I have seen have no chance of lasting 20 years. Particle-board and styrofoam just won’t hold up depspite a thin layer of stucco and pastel paint. I would take a house from the 70s any day over a new POS. (I guess you can tell I live in an old house.)
When she was a realtor, my wife learned how what’s fashionable today will most likely be very dated tomorrow. It’s Corian and white appliances in our kitchen (present as well as past).
The 20s, 50s, 70s, and 00s were each periods that witnesed big booms in construction. And each had popular styles that were later derided as “kitschy”. Of course by now that 20’s craftsman style has returned to popularity. Just imagine that 50-80 years from now all that granite will be considered classic. Thus the wheel of style comes full circle. We hate whatever our parent’s loved, and are amused and later impressed by what came before.
I like stainless steel. I wouldn’t mind getting surplus resturant style fridge (especially if it has LCD displays of temperatures and the like), and I guess stove. Forget the consumer garbage, made in China, fail a day after warranty expires stuff.
It doesn’t matter which style is in style at any given time; it’s the quality of the design and construction. You can tell good quality from bad no matter which style.
I seriously doubt most of the stapled-together-by-near-slave-labor junk homes from The Bubble will be around long enough to be considered a classic. Toss on top of their shoddy construction the sheer number of them that sit emply in foreclosure as part of the Shadow Inventory, and their years are numbered.
I think it is still preferred over Formica and cheap white apps.
The new trend is actually colors, red, blue…
My bet would be on black for clothing and white for appliances. White for cars, too (think sunbelt migration).
White car screams “rental,” no?
White car screams - “please wash me as I am dirty again”.
Skip,
Actually, black (and dark colors) show dirt fastest. White and silver can be fairly dirty and only look a little dirty.
Black is worst, but white’s still bad. Silver and most colors are better.
(I’ve owned just about all car colors - except blue I think)
White is definitely better than the darker colors, though. We didn’t realize how good white was until we sold it and got a dark green truck. Not a good color if you want your car to look clean.
I wear black almost all the time, sometimes with green, red, or gray as accents. It makes life so much easier. Even my jeans are black.
Wolfgirl = Joanie Cash?
I wonder if stainless steel will go out of style as the years march on.
Most definitely.
I think the often slapdash granite and marble treatments applied during the bubble years — particularly the “luxury” bathroom treatments that seem slapped together even now — will seem as much or more dated than the appliances. (And don’t forget the bathroom + kitchen cabinetry!) Put together they form a distinct Bubble Style, one that will probably not wear well, even a decade out.
ET-Chicago,
True, and if we can afford to yard it out of there getting a dime on the dollar, I think it will be worth it to many of us just not to have that constant reminder of excess -staring- you in the face on a daily basis?
Yes, but if two people live in a 5000 square foot McMansion with a vaulted entryway, there may be other lingering reminders of excess …
ET-Chicago,
Only too true ( no amount of paint or wallpaper is going to change all that! ) I guess I tend to overlook those issues as we “live small” in 1,200 s/f.
When there were endless “condo conversions” of older apt. buildings where these were the order of the day, it was in fact, the only “improvements” being made.
As if that and that -alone- would seal the deal?
The most horrendous aberration to me are baths / showers lined with slate tile. Very pourous and uneven surface. Imagine a bath or shower that cannot be cleaned properly, not of soap scum, nor calcium or anything else. Was very popular in the “high end” of the Mountain West.
“Time to clean the shower—call in the sand-blasting guy!”
A pumice stone would probably work too.
If you have kids and stainless steel you will never ever buy it again. It is a full time job with the fingerprints. I think going forward in home decorating/design (if you have the money for that kind of thing) people are going to be less about looking good and more about practicality/affordability.
“If you have kids and stainless steel you will never ever buy it again. It is a full time job with the fingerprints.”
Not to mention that magnets won’t stick to it. Kids love fridge magnets.
White cars are the way to go if you live in a warm sunny area. Black is for fools.
_
I have 2 kids and stainless, no problem for the maid.
All commercial kitchen use SS, do you think they just like the extra labor?
Sounds like sour grapes.
The kitchen graniteel style seems to be hanging in there in the flips I’ve seen this year. But the beige marble bathroom is being replaced by white “subway” tile with color accents. It’s actually very pretty.
I doubt it. The double oven in my house, original from 1970 something is stainless steel. The only difference between a modern one and the ’70s one is that it is smaller and has dials instead of digital buttons.
Stainless steel for applicances has been around longer than you think.
Plus stainless is only a “fad” in that it is a luxury item. It’s not like “harvest gold” etc. that was big in the 60’s.
Stainless’s appeal was due to its luxury in its ease to clean and durability. It’s why it’s been used in pretty much every decent commercial kitchen for several decades now.
It may go away for a while, but if so only because luxury in general is going away, not because it’s a dying fad.
Depends on the grade. 300 series SS is much better, higher corrosion resistance and easier to keep clean. Most of the crap out there is 200 series, say SS barbecues that
corrode out in a year due to heat..you get
what you pay for.
Spot on, Packman. Per my post above, some designs and materials remain timeless precisely because they weren’t created for their trendiness, but because they are aesthetically pleasing and/or practical. And that’s why some things don’t easily go out of style.
That’s what gives me hope that stainless will hold up over time. For years you could never go wrong by choosing white appliances. Black appliances may gain that status as well. I think stainless steel will do better than many people think because it is functional.
But there is a big difference between the commercial-grade stainless steel appliances and the flipper-favorite SS junk produced in China, and sold in Home Depot.
“I wonder if stainless steel will go out of style as the years march on.”
Sorta like the Avocado colored apartment particularly that shaggy carpeting.
My 26 year old daughter loves avocado shag carpet. I think it’s because her grandfather had it. One of the first things her sister did when she bought the house was to rip out the carpet. But she saved her sister of strip of it. Just goes to show how different sisters can be.
I looked at a well used house in 2002 that had all brown fixtures. What era was that I wonder?
“What era was that I wonder?”
No clue. 70’s Single-wide Era? Wow, anyway the part that makes all of this so damned painful is.., having to tell your wife, “It’s not really a good time to be planning a big vacation”.
It’s not really a good time to be shopping for a new car, etc. etc. Most of us here are hunkering down for what we hope aren’t even tougher times ahead and setting aside cash and putting off major purchases.
It isn’t just a matter of “Suzzane researched this!” that creates friction between couples. O.K, great, we’re not going to get a bigger house and be knifecatchers but why can’t we at least..?!? Daily basis guys, daily basis.
How about those of us trying to convince our husband that it might be better to rent until the kids are grown, and we can retire to a much cheaper area?
Just venting there…
Yes, this stupid credit/housing bubble is causing strife in many households… My DH is getting very tired of waiting. Price declines were halted here due to all the manipulation, and I just can’t let us throw all our money away on buying a house. This is not fun.
CA renter,
Thanks for a dose of reality. According to many here, you should just tie your spouse up in a closet until this whole thing is over.
After which, s/he will thank you profusely! ( Right! ) It may even be a stretch to say “until the kids are gone” as truthfully, that is really just the starting point for most couples as a time they can -begin- to sock away major $’s.
Originally we planned to ‘buy’ in Vegas and just continue to rent while we continued to work toward retirement here in OR. But this was about a helluva’ lot more than just keeping your “arms and feet inside until the ride has come to a complete stop”. Sheesh, if only…
The PTB sure has made a mess for us, haven’t they?
Yep, but that was the goal: set husband against wife, child against parent, neighbor against neighbor. Then, once we’re all distracted, they can loot in peace.
Heh! I was just pondering what year my brown Hotpoint double-oven stove is. (Still works great!)
Late 70’s. The “harvest” color scheme didn’t apply only to harvest gold. Think of the colors of leaves that are just about to fall off the trees. Not the vivid colors, the muted dead colors. That was the 1970s.
(on a side note, the pop vocal music of the era had the same feel to it. All diminished minor 7th. Ick.)
I…………..
( love ya’ ) ba….by
I…………..
( love ya’ ) ba….by
Really? Hadn’t noticed. Yeah, the different genres “borrow” heavily from one another and that’s a great chord progression when used in Jazz but… Also notice how much “Country” became dependent on Blues riffs as they -exhausted- the mother lode of G, C and D.
I’m thinking of the godawful stuff we had to sing in chorus, like “My corner of the sky,” or godawful Styx ballads.
Country was wonderful from 1989 to 1991. Then Billy Ray Cyrus ruined it. Even worse, his daughter continues to ruin music.
oxide,
The Minor/Diminished Minor 7th ‘can’ be used with great effect ( Much of Santana’s material was done in those keys )
But like everything in the music biz, (1) success on the charts breeds legions of “me too” pulp! Our little cover band makes a genuine effort to 1) focus on lesser known “B” side material and 2) basically pretend that a LOT of the dilution in pop culture -hasn’t- even happened yet!
As if we were playing the chords for the very first time, blocking the countless knock-off’s that they spawned. Easier said than done but always worth the extra effort.
Yesterday I bought a pair of shoes at a sporting goods store and the employees did their darndest to sell me a warranty to go with them. Shoes, of all things.
My guess is their sales are down so the income stream needs to be boosted in other ways.
An extended warranty on shoes? I really wanted to call BS on that one, but can’t after a few moments think about it. Electronics sellers have been making a fortune off of the public’s stupidity, so why shouldn’t shoe sellers?
I don’t know whether to LMAO, or cry.
Dr. Martens now does “Docs for life” at about double the street price of plan old docs. Make ‘em resoleable and of slightly thicker leather (though still made in China).
Total sucker’s move, IMHO, having read the fine print.
I’d pay double to get a pair made in England.
I bought a $19.00 memory card reader at Best Buy and they offered me the extended warranty for $5.00. I told them I would take my chances. The clerk of course was oblivious to the idiocy of the offer.
Theyrr not oblivious, they have standing orders to push it on every sale. One guy tried to push the extended warranty on cheap bookshelves at office depot last week.
Theyre not idiots, they just get fired if they dont get a certan percentage, especially at the big box electronic stores.
The problem is the cost of the electronics has gone through the floor for the most part, but the cost of the warranty has stayed the same/gone up. 250$ for a 2 year warranty on a laptop that is selling for 650 is just silly.
“Theyre not idiots, they just get fired if they dont get a certan percentage, especially at the big box electronic stores.”
And if they’re on commission, selling warranties does very good things for their pay checks.
I told this story a few years back whence I got my Sony laptop. CompUSA had a screaming deal (at the time). Went in asked for laptop. “Are you going to buy a warranty?” No, I said. “We don’t have any,” they said. Went to another and the same thing happened. Went home p!ssed.
Went online and noticed they had the laptop as an online product as well. Ordered and selected in-store pickup and VOILA! the stores I visited magically had them. When I went to pick it up the guy wouldn’t even look at me. Had someone else help me who asked if I wanted a warranty. NOPE! “Well, these Sonys sometimes blah blah blah” I told them I was sure they wouldn’t sell me something that wasn’t of great quality and left. I’ve been using it since late 2005 no problem. CompUSA now closed.
(OTOH, given the moving parts with the screen, I could see how it might be advantageous to get a warranty for laptops, but if you take care of it and don’t yank it around…)
I have a friend who used to manage a CompUSA store and was fired for failing to meet the quota for extended service plans.
I have a friend who used to manage a CompUSA store and was fired for failing to meet the quota for extended service plans.
In the early 2000’s, I read that in 1999, Best Buy made more money off warranties than off sales of electronics.
I never bought another warranty after that.
I bought a citizen watch from JCPenney. One of those “Ecodrives”. It’s nice, but after 8 months in Afghanistan, the light no longer worked and there was a crack in the glass.
Luckily, I bought the extended plan and I just turned it in. They are due to send me a new watch…
BTW,
I am now wearing an X10 Sunnto. It just died as well, I guess because my sleeves covered it from getting sun to recharge. I am recharging it now….
Interesting. I had a Seiko divers watch that I love in style, but hate the crappy automatic movement. Have a citizens now, much prefer battery operated.
Sunnto makes dive computers also. Them watches with wireless air pressure sender run about $900 grey market.
I asked if their $65 warranty for the 2nd year of the iPhone covered theft (after my iPod got nicked). Nope.
I never, never buy a warranty.
“An extended warranty on shoes? I really wanted to call BS on that one …”
Trust, but verify:
Sports Authority (562) 402-3800.
What if the laces break? Is that a grey area?
Is “smelly” mentioned in the warranty at all?
Yeah, and what about the heels? Those things can wear down in a hurry.
That is covered, along with shoe shines, under the “service plan”
Personally, I’d never get a pair, they just wouldn’t look right on me at all. I think it’s more just a marketing ploy on Doc’s part to get people to maybe appreciate you -are- purchasing something that’s worth having around for awhile?
I don’t imagine they’re selling a lot of them? By today’s standards, you almost have to have as much of a disposal plan for the item you are considering as an ownership plan?
Warranties are E-Z money for them and they know it.
Funny how in an ever more disposable age - they’re pushing warranties like never before!
Speaking of “Made in England” ( and things that just might be worth salvaging? ) I recently picked up a Marshall Amp off of C/L. Real black market stuff.
Anyway, it’s from the early 90’s and I knew what was wrong w/ it and why the guy couldn’t figure it out so I “generously” offered the guy $100 bucks. He’d manhandled the micro-switches rendering 2 of the 3 channels useless and played bass thru it all but frying the pre-amp tube. ( D!ckehead )
Anyway, $20 later and some compressed air blowout and it sounds as good as new! Among all the upgrade BS sold during the Housing Boom, what if ANY of it can be salvaged?
DinOR:
My pet peeve was these high end condozes looked like hotel rooms.(the double sink mentality)…oh cant forget the walk in closet in the bathroom too.
I looked at a bunch of them and just asked a realturd one question: How do you fit a turkey platter in the sink?
None of them could answer.
I’ve never understood the desire to make your own bedroom look like a hotel. To me, the hotel room look screams of particle board, no books, only 8 TV channels, too many mirrors, and uncomfortable mattresses cluttered by 10 or 12 excess pillows. When I go “hotel room” emotionally I think of the night of September 11, 2001, when I couldn’t get home. Maybe it is because I tend to stay in guest houses and B&Bs on vaction, so I don’t associatiate hotels with being on vacation, but I don’t want my home to look like a hotel.
Polly:
I took pictures of the collaspe on the Greenpoint ave bride .. i used to have a view of the WTC from my picture window.
Any my dj friend was stuck here with probably $5000 worth of meat in his truck so we had to drive to every bodea and buy all the ice we could …couldn’t let the really old and noisy reefer truck idle all night.
Damn, and I thought I was dealing with a logistical challenge that evening trying to get some toothpaste (hotel had none, of course).
Funny thing, my boss and I were SUPPOSED to go to the Pentagon that day, and see whether we wanted any furniture that was going to be left over when the library moved. If we’d been there, we would have gotten hazardous duty pay for the pay period.
I was buying a pair of basketball shoes for my kid who is only 10. They were also trying to sell the warranty but I told them he will out grow it in 6 months. I asked them if the warranty covers sudden growth spurts for kids. He just looked at me in silence. The only time my shoe came apart is when it is time to buy new shoes.
I think I once managed to get a pair of sneakers to fall apart when I was a kid before I out grew them. Please note that this was right around the time I discovered the fun of making the playground swings go really, really, really high and then coming to a very sudden stop by plowing my front toes into the sand pit under the swing. I did this a lot. Also with swing set at home, which may have done more damage as toes were impacting compacted dirt, not sand. Also, I probably had the slowest growing feet in the history of childhood. All that said, I did somehow manage to get the toes of the shoes to separate before I out grew them. Just barely.
“…I was buying a pair of basketball shoes for my kid who is only 10″
Well, if he’s 6′ 3″ and can walk & chew gum and doesn’t like school that much… Commissioner Stern of the NBA can probably make arrangements for some really well made shoes for FREE!
You DIDN’T take the warranty? What are you going to do when those shoes get worn out from walking or some such thing?????
Don’t be silly! I’m sure the warranty doesn’t cover anything like walking, wear and tear, etc.
Now, if the shoes get eaten by an elephant or something, the warranty might cover that, so long as there are no elephants in the area.
For America’s Santas, It’s Hard to Be Jolly With the Tales They’re Hearing
In Hard Times, Kids Ask for Bare Essentials: Shoes, Eyeglasses and a Job for Dad
As a longtime Santa Claus at a suburban Chicago mall, Rod Riemersma used to jokingly tell children they would get socks for Christmas if they were naughty.
This year, he stopped telling the joke. Too many children were asking for socks. “They’ve probably heard their parents say, ‘Geez, I wish I had some money to get them clothes,’ ” says Mr. Riemersma, 56 years old.
A wintry measure of hard times can be found this holiday season on the knee of white-bearded, red-suited men around the country. A couple of years ago, children were shooting for the moon, asking St. Nick for Xboxes, iPods and laptops. But with the economy still fragile, many children are requesting basics such as shoes, library cards and even eyeglasses, say dozens of Santas who work at malls or on the party circuit.
http://online.wsj.com/article/SB126074986920489905.html?mod=WSJ_hpp_RIGHTTopCarousel#articleTabs%3Darticle
I could use some new socks. But, seeing as though the fam has already spotted me airfare for visiting them Back East, I think I’ll have to buy my own dang socks.
Yet even this year, there are still jolly moments. One occurred for Mr. Riemersma in suburban Chicago recently, when some children brought their 88-year-old grandmother to see him.
“Oh, no, I haven’t sat on a man’s lap in years,” the woman said, before she reluctantly climbed on. But after a moment, she grinned at him and said,
“But guess what, Santa? I still like it.”
That should all change starting today. Larry Summers said “The recession is over”.
Feel better now?
No, but I bet Eddie does.
I don’t feel better. I feel as good today as I did before he said it. The recession has been over for months.
Good thing we don’t need jobs or a future or anything for that to be true.
Yep, just keep on believing! And if people aren’t back to Bubble-land, it’s just their own darn fault, right?
Whatever!
Library cards? Those are still free around these parts.
Aren’t library cards free? I think I have 4 library cards in my wallet and have had others in the past and I dont’ recall ever paying for any of them.
This is for you Eddie (I think you posted the *fact* that foreclosure declined as an indicator the real estate market and the economy improving as the reason). Of course bank delaying foreclosures that would have normally happened and are just waiting in the pipelines should be totally ignored:
John Hussman:
“Last week, RealtyTrac reported that November foreclosure filings declined modestly from their peak in July. RealtyTrac SVP Richard Sharga appeared on Bloomberg and CNBC to discuss the numbers, saying “I’m afraid we might be looking at a false-positive trend right now. We haven’t seen any improvement in underlying conditions. We’re still looking at high levels of unemployment, we’re still looking at a high percentage of mortgages being underwater, and we’re still looking at limited credit availability which makes getting a loan difficult. So there’s no organic reason for these numbers to be going down and what we think what’s going on are some process delays and government intervention that is artificially delaying things.
“I think that first quarter of next year we’ll see a new wave of foreclosure activity. Delinquencies have been going up – we have five and a half million homeowners who are late on their mortgage payments right now, and many of those, under normal circumstances, would have already been in foreclosure. But the Treasury is asking lenders to make doubly sure that anybody who qualifies for the HAMP program or other modification program gets in those programs. We think we’ll probably hit the historic peak next year, in 2010, as a lot of the Option-ARM loans reset, as unemployment related foreclosures peak, before numbers finally start to settle down a little bit in 2011. We’re expecting the first quarter to be pretty ugly.””
It’s quite simply really. The main driver behind foreclosures - by far - is price. Prices go down, foreclosures go up.
Prices rose all through the summer this year - as driven by the then-new homebuyer tax credit. Naturally this price rise stemmed the tide of foreclosures.
HPI data shows prices still rising - but that data lags by quite a bit, with the latest being September. Anecdotally - the two main areas that I track - northern VA and FL - have seen prices starting back down again this fall now, as per more recent data than exists nationally. I think we’ll see that reflected nationally over the coming months - and as a result foreclosures will indeed increase again.
Not that foreclosure levels are low - they’re just barely off record highs.
Don’t forget interest rates - as interest rates go up, more people will default.
Perhaps, but I wouldn’t hold your breath waiting on interest rates to go up significantly any time soon.
Plus keep in mind ARMs are only about 15% of all mortgages right now. Thus interest rate changes affect only 15% of mortgages, whereas price changes affect 100%. Strategic defaults are happening across the board - for ARMs and for fixed-rates. Underwater people with fixed rate will walk just as quick as someone with an ARM.
You can also get more defaults as interest rates go up because people will not be able to sell for a high enough price to either cover their mortgage debt (fixed rate or not) or tempt the bank to accept a short sale.
Higher interest rates generally forcing down sales prices can up the foreclosure rate as well.
Yes, but the AVERAGE size of Option ARMs are something like $500k. This wave will hit markets generally less impacted so far. Places like Stockton are already down 50-60%. They won’t be hit much more (if at all) in terms of prices. I’m hearing stories from guys on the ground in those markets that tales of oversupply are overblown. Places farther west, who have only gone down 20-30% from peak will get hit harder this time around.
Yes, but the AVERAGE size of Option ARMs are something like $500k.
When I gave the number 15% I was referring to the total dollar value - about $1.5T for ARMs vs. about $10.9T total mortgages. So assuming the average ARM size is bigger than non-ARM, then the number of actual mortgages would be lower than 15%.
Not that it matters that much. In the end - both price and interest rate are factors. I just think that price is a much bigger factor of the two; borne out of course by the fact that foreclosures have skyrocketed despite interest rates being at all-time lows.
Rental Watch,
Nicely done. For all the talk of “the low end getting crushed” I don’t recall a lot of Option/Arms being written on $125k homes?
I mean what would the point of that have been? Not… that the MB’s & realtwhores wouldn’t have ‘taken’ the commissions but really more that there bigger fish to fry at the time. Course now they’d take just about ‘anything’.
…Option/Arms being written on $125k homes?
But they did.
Ya just can’t make this stuff up!
Leigh
You sound like you are saying price change is the thing that matters rather than price.
Yes, indeed that’s what I mean.
It is an important distinction actually, since high prices themselves can contribute to foreclosure. It’s a bit of an apparent paradox - since rising prices actually lessen foreclosures, but high prices contribute to them. Diving prices cause foreclosures, but lower prices lessen them.
Of course bank delaying foreclosures that would have normally happened and are just waiting in the pipelines should be totally ignored.
And, of course, no one (except those of us in the housing bubble blogosphere) saw this coming.
and furthermore, if we are to believe the reset chart posted yesterday on HBB by JDinCT, the resets peak towards the end of 2011. Hussman must know this, maybe he forgot.
On the Eddie bashing…
I’m not aware of the situation in Atlanta at this time. Perhaps there is a bunch of govt work in his area. Also note the bubble was much less severe there than in Fla and Ca. Out here we saw pretty humming sales last year. This year is starting to get pretty ragged.
For LA southbay:
I’d say that malls have not been very crowded at all. Plenty of parking and lines not to bad at cash registers. Didn’t see backups of traffic for the most part.
People I talk to are holding back on purchases. I’m personally saving more and cutting back. This includes the rich people I know that are taking heed to my advice on property investment, better deals next year.
Donations are way off at the church I attend.
Freeway traffic is down somewhat. Still painful but not as staggering.
My buddy that is a longshoreman is doing a little bit better. Has to be aggressive about shifts when they are available. I believe that things are better in export to help balance out.
Anyhow, much of coastal LA is still in bubble land and it is still epic relative to income. Every bit of money the govt comes up with is going to get sucked up by municipalities. Also seeing the govts around the country are picking up the california propensity to offshore handling of traffic violations while adding massive fines.
So, Fla, LA, NJ, Va, NY all have a ways to go. I think Carolina, Texas, Alabama, Georgia are further along to the bottom and recovery.
G’luck all
I was at Tucson’s 4th Avenue Street Fair this past week. Had a couple of volunteer gigs. At the second gig, the organization’s staff-member-in-charge of the booth went out to get a cuppa coffee.
When she came back to the booth, I asked her what the coffee shop people said about business. “Much slower than usual,” was the staffer’s reply. And she’d gone to a coffee shop that was right next to the fair.
“When she came back to the booth, I asked her what the coffee shop people said about business. “Much slower than usual,” was the staffer’s reply. ”
Had to drop my wife off at a strip mall on Sat. for an appointment. It was raining like hell. While sitting there for a half hour, people (mostly women) pulled up, got out of their cars, walked through the rain for a cup of SB coffee, walked back to their car with purchase in hand and drove off.
James,
Agreed, but what I -don’t- get is why GA became such a hot spot for failed banks!? Seriously, look at the heat map of Bank Implode etc. It seems like the one thing the do really well in? Failed banks.
We’ve also seen a number of fraud cases linked to GA as well. Massive cases. And just saying something isn’t as bad as FL doesn’t seem to hold a lot water!
It’s usually hard for a new bank to capture much of the established local banks’ good business. So lots of newer Georgia banks jumped into Florida real estate lending. (It was nearby and growing rapidly so much easier to capture some of the business).
bluto,
Certainly seems logical. We had a similar incident where our local OR bank failed. Before it was all said and done they had loans spread out all over the state.
Ashland, Medford and of course Bend, OR. It didn’t take them long to exhaust the local market of all the builders and projects that were available. Why would it be any different in GA?
Southern History. Atlanta was a big banking center for all of Florida. Plenty of banks have branches in both areas. Kind of the financial
Atlanta had a huge bubble as well but nothing on the order of California and Florida for just plain old stupidity. California is so vast and big tracks of desert were getting built up. I think people who havn’t lived here forget how huge California is and how spread out things are past the coastal region. On open road, west of LA, it is still a few hours to get to Nevada.
Now, I’m going out on a bit of a limb but the over building and intensity of losses will only be worse in a few places besides Florida.
Namely, Nevada and Arizona.
There seem to be many places out there with out water and with out a lot of prospects of viability. I know some old folks are looking for retirement there but you have to be aware that you might have to build your own water systems or pay for a truck to deliver, may not have a power grid, may not have a septic system exc. The most critical thing would be medical services though. I expect medical services to collapse in those areas.
Yep, Atlanta is nothing but gubimnt jobs. Nobody works at Delta, Coke, UPS, CNN, Home Depot, Suntrust, Cox, Georgia Pacific.
In all seriousness, I just do not see any signs of a recession around me. I know of one person that is out of work. But he doesn’t seem overly concerned about it. He’s going to Puerto Rico for New Year’s and proposing to his girlfriend. Concern for a job is about the last thing on his mind. I think he secretly was thrilled to get laid off. Gets some badly needed time off, some govt freebies in ue benefits to boot.
Everyone else is just living their regular lives. My brother in law made partner this year and he’s spending like he just won the lottery. My neighbors are going on their usual 2 week Christmas trip (I know since I’m taking care of their dogs while gone). It’s a family with 5 kids and a stay at home mom, the husband is ex-air force and now owns his own engineering company with a lot of work from MD. Don’t see him suffering any time soon.
Aside from an outdoor patio store, I can’t think of any stores that I’ve seen go out of business recently. Bars are packed, restaurants are packed, traffic is as awful as always. If I didn’t know it was 2009 I could swear it’s as likely to be 2005.
Well even in the great depression, most people had jobs.
A point that my mother loves to make. As in, “My parents both worked.”
And, yes, I’ll ‘fess up to the fact that I’m a bit biased, but if you want the job done with all the t’s crossed and the i’s dotted, call on my mom. She’s your gal.
Bars are packed, restaurants are packed, traffic is as awful as always. If I didn’t know it was 2009 I could swear it’s as likely to be 2005.
———————–
Hate to admit this, but it’s what we’re seeing out here as well (San Diego area). The bubble is back, and people are spending, spending, spending.
“Freeway traffic is down somewhat. Still painful but not as staggering.”
Now there is a sign of a serious LA recession…
Jeezuz is it pick on me day today? You can point to any piece of data and have 100 people tell you why that data is wrong. I’m not sure what giving someone’s opinion proves. For every one of your opinions, I can give you the link to someone else who has the opposite opinion.
The facts speak for themselves. Foreclosures have declined for 4 straight months. Retail sales have consistently been increasing. Home sales have increased for 5 straight months as have home prices. Everyone will have different interpretations of these data. I see the glass half full, you all see the glass as not even existing.
It’s cool.
You just aren’t a macro guy. The macro data looks the worst on record since they started keeping records. Mostly drawing comparisons to the GD. Worst job loss since the GD as well.
By in large the economic data is showing a >10% contraction in sales. Things like rev-par and import export are all far off.
Things we are seeing from a macro standpoint point to un unsustainable debt spiral. That debt will either require crushing inflation to pay off or strangling taxes for near 20yrs to get things under control. If it is even possible.
Wide scale reports are also indicating high levels of unemployment from almost every quarter.
Perhaps things are going smoothly now in Lanta. I’m of the “belief” that are banks are insolvent. My “belief” is because looking at the losses in CRE, falling rents along with the comming losses in RE due to the AltA problems, that TARP2 may be on the way. So that smoothness is going to disolve in the financial blnder in 2010.
The widespread effects of tax credits and stimulis will fade soon and be replaced be loss recognition and disbelief.
My take on behavior out there. Lots of people are bankrupt and they know it. I’d guess they are running out and spending like crazy in expectation of default. So, use the credit or lose it. Further people loosing jobs are expecting the past behavior to repeat itself and lucrative work will show up. They will be in for some rude awakening. Also got the people living in the forclosed house the bank has taken back yet. That free’s up some christmas cash.
If you believe what you are spitting out than surely we are at the bottom and great buying opporitunities are everywhere. Go full bore. Heck, make sure you max out your credit cards on stock purchases to maximize you returns. Knock yourself out.
Another note here. Would expect the YOY comparisons to improve. Basically when you have some really bottomed out quarters like we had, all of a sudden you can have dramatic improvement a year later. Go figure.
Also note, we had years and years of trolls on this board trying to talk everyone into thinking “Buy now or be locked out forever” and “problems are contained to subprime” or “Bear Sterns has plenty of liquidity”. So, when we get a new one on hear saying how they are the new wealth and “its a great time to buy”.
Forgive us if we are a tad bit skeptical.
You don’t compare YOY for things like foreclosure rates. YOY is useful for sales volume, not much else. As a self-professed macro guy you should know this.
Here why:
Nov 200 foreclosures
Dec 1000 foreclosures
Jan 900
Feb 800
March 700
April 600
October 400
What’s more important? That the delta has been positive every month for 10 months or that the raw number is 100% higher than YOY? As a self-styled macro guy you should know that the margin is where the story always lies.
Use a sports analogy. Team A is up 45-0 at halftime. They’re up 45-42 in the 4th quarter and Team B has scored on every possession in the second half. Do you look at the game and think Team B doesn’t have a chance, they **were** down by 45 at the half? Or do you think, hmmm Team B is sure making a run for it?
I didn’t say everything should be YOY comparisons. In any case you didn’t seem to take to anything else I noted in there. Plenty of other things will be compared to Q1 2009 and show improvement. Not to a healthy level or anything but will be spun that way.
In the case of housing, we are seeing very low MLS inventory. However, as a counter indicator we are seeing near record high levels of forclosure activity along with substantial numbers of foreclosed homes not on the market.
We all see them around California with plenty of reports from other places. I see them when I go walking in the morning. Been that way for a year. All over the place.
We’re also put off by all of the low downpayment loans with low rates. It is highly likely that a substantial portion of these loans will default. Because the downpayment was loan and the rate was low, loss severity will be high.
Unless we see a major driver for employment emerge we remain skeptical about housing. Not to mention looking at forclosure rates with out seasonality factors and just plain raw numbers is deceptive. Not to mention ignoring factors like forclosure mormatoriums. Currently, while numbers are improving, forclosure rates are still high. Employment numbers are also getting worse. Typically in these kind of busts, prices tend to fall off later in the cycles. So, previously there is a substantial time lag. You seem to be willing to discount those patterns.
Hence, we think housing is closer to the bottom now. However, it is likely that it is not all the way there and far better deals will happen in the near future. It is also likely we may have a protracted deflationary spiral, as much as it is likely an inflationary spiral. In one case the debt from what seemed like modest invesments in housing will turn out to be major losers. It’s likely we will see other assets, like stocks or gold, shoot up quickly. They will probably outperform housing.
Currently, a lot of us are on the fence about housing. Seems like between the Fed supports for banks, congress throwing money to the banks and banks sitting on property; well it will be a long long time before equilibrium is restored to historical norms. Consequently, we consider you to be one of those drinking the coolaide that helps drag out the situation.
Like I said, go run out and throw every penny you can lay your hands on into the markets. Buy as many houses as you can finance. Go after the leveraged stock indexes and write some options. That is if you really believe what you are saying. Heck, start an ultrabull fund and dive in.
Will be here in a couple years and you can talk to us from the free access at the local library.
We had a recession. It’s over. Employment will get better slowly. If you’re going to wait to get out of your 0.2% checking account until unemployment is 5% again you’ll lose a lot of money. Do as you wish.
I’m with Eddie, I think he should spend, spend, spend!!!!. I hope he, all his friends and family spend every last dime they have and then some. Without people like Eddie we’d really be in trouble.
Where would we be without the Eddie’s of the world. I only wish we had more of them. I bet Ikea loves him!!!!
As for me, I’m totally content being Debt Free with my savings earning .02%.I’m happy to view this train wreck from the sidelines. I figure regardless how things work out I’ll still be Debt Free and Cash rich. Good food, home cooked that is, good friends and Good wine is all I need. IMHO, Life doesn’t get much better than this. Life is Good!!!!!
And for Eddie’s friend, I hope she says yes:
“I know of one person that is out of work. But he doesn’t seem overly concerned about it. He’s going to Puerto Rico for New Year’s and proposing to his girlfriend. Concern for a job is about the last thing on his mind. I think he secretly was thrilled to get laid off. Gets some badly needed time off, some govt freebies in ue benefits to boot.”
She’s one lucky gal. To think her future husband is secretly happy to be laid off and is not concerned about being employment. Sounds like she’s got herself a keeper!!!! Just think they’ll have all that free time to plan their dream wedding and can pay for it with their free govement freebies in ue benefits. Eddie, hope you buy them one big, expensive wedding gift. Go Eddie!!!!
“We had a recession. It’s over. Employment will get better slowly. If you’re going to wait to get out of your 0.2% checking account until unemployment is 5% again you’ll lose a lot of money. Do as you wish.”
You offer no proof of your assertion that “the recession is over.”
You are spiteful towards anyone who refuses to drink the Kool-aid and jump in with both feet, tossing money around at the latest scams.
Then, you wonder why you don’t get a warm welcome here? Hmmm… I can’t imagine…
I think the suggestion for Eddie to max out his credit cards to buy as much stock as possible is an excellent one. Have you tried this yet?
Jeezuz is it pick on me day today?
I think the whole thing can be boiled down to two things…
1)Some people may think you’re giving bad advice:
If someone takes your point of view and goes out and blows a big chunk of savings on a down payment, then loses a job as the economy worsens, he’s in a world of hurt. If he goes with the general consensus around here, and doesn’t part with the cash right now, he’ll suffer no consequences, even if the economy improves
2)Many think you’re dead wrong and can’t figure out why you’re so confident:
There’s a diverse group of people here, yet most agree that the economy’s in big trouble and likely to get worse before it gets better. Some even believe that a large cultural shift is underway because of the downturn. These things are hard to reconcile with your generally sunny viewpoint.
Just my $.02 - I actually agree with some of the things you say and find others reasonable - aside from your insistence that Happy Days are around the corner.
lavi d wrote: “1)Some people may think you’re giving bad advice”
His words here are advice? You’re too kind. I’ve been using it as entertainment, sort of like that Black Knight character from the Holy Grail .. you know, the one who’s getting his limbs chopped off while insisting he’s fine and that it’s just a flesh wound?
Or sort of like: “Pay no attention to your lying eyes when you see empty homes and shuttered businesses .. the recovery is underway because we said it is! So there!”
Presumably there is some mythical gated (err, caged) community somewhere in which no one’s lost a job or a home and where no one’s felt the downturn of the economy. That experience, however, is not the same as what the other 99% of us are going through.
Eddie just likes stealing blog band width by enticing regular posters to beat on the outrageous crap he posts here.
Don’t feed the troll, and he will stop begging for food.
Eddie, the current “recovery” is like the Titanic leveling off a bit before slipping below the waves. The overall, long-term situation is horrible across neary every area and in nearly every way. Government-fed BS to keep the sheeple happy isn’t helping, though it does paint a rosy picture.
Just because you don’t see a Mad-Max style collapse in your area doesn’t mean that the economy is in the dumps and will probably stay that way for a long, long time.
I know of 2 upcoming CA foreclosures. One of them just bought a different house in the same neighborhood for half off peak and is going to let the old house go. The other bought at peak with some type of ARM and hasn’t payed in several months.
Well, well, well. Extend and pretend is now an FDIC-endorsed policy, as banks move non-performing RE “assets” to subsidiaries.
www dot heraldtribune dot com/article/20091214/ARTICLE/912141013/2413/BUSINESS?Title=Lenders-put-bad-loans-in-subsidiaries
“Some call the technique ‘extend and pretend,’ others ‘delay and pray.’ But by any name, the FDIC calls it fine.”
A pile of dung by another name is still a pile of dung.
You can’t shine sh!t.
But you can hide it temporarily using accepted accounting practices … or a brown paper bag.
or a brown paper bag ??
Nah…It will still smell…More like a zip lock..
“Nah…It will still smell…More like a zip lock..”
Anyone who has done any glacier climbing can tell you that even double-bagged in zip-locks, it will still smell.
Except mine, of course.
Mythbusters debunked that one. It wasn’t easy, but the found a technique that worked.
Did their technique involve the use of shinola?
Nope. Hands. And I guess the oils you have on your hands.
http://scanned-rocks.geology-guy.com/images/coprolite2.jpg
Sure you can. Just takes a while.
Just another sign that the Brain Trust has decided to save the banks, MBS holders, and effed homeowners, and let everybody else fend for themselves.
Once again, 12 months late, and a few hundred billion short. The problem has progressed to jobs and incomes. Unless you live in “Eddie-land”.
Houses might become affordable again…….but I’m betting it won’t be in my lifetime.
That’s my suspicious.
The scumbags have won, at least for this generation. By the time housing is affordable around here, I’ll be looking at retirement communities!
“Some call the technique ‘extend and pretend,’ others ‘delay and pray.’
….J…………..A…………P…………A…………N………
Yeah, and for nearly twenty years and counting!
Wow - good find.
This is bad - really, really bad.
“Extend and pretend” is the battlefield equivalent of draining every drop of blood from all the living and wounded to give endless transfusions to some “special” dying and already dead.
Once you have made the strategic decision that a few financial giants are “too big to fail”, you have also condemned everyone else to the trash heap of “too small to matter”.
It does not matter to the banksters and politicos if 99.99% of Americans become unemployed or bankrupt due to the “unintended and unforeseeable consequences” of perpetually bailing out the Megabanks.
All that matters to them is that the Megabanks survive; promising them more contributions and power in return.
But one veteran Sarasota banker said he transfers loans to his bank’s subsidiary so potential buyers do not know they are dealing with a bank.
“When we list the properties, we try to take title in some other name than the bank’s,” the banker said. “That way, the buyers don’t smell blood.”
Yeah, that will trick ‘em good - jeesh.
Leigh
Keep in mind the demographics of Sarasota. They are indeed quite easily “gotten”.
this is one of the tricks Enron used…and what happened to them…and their auditors?
Them, their auditors, and an entire state.
“In general, banks have devised ways to perform financial alchemy,” said Ken Thomas, a Miami economist and bank analyst. “They take a problem loan and, through different legal actions, turn it into a non-problem loan.”
Calling Sir Greenisspent, Calling Sir Greenisspent, …we need a “Knighted” economist to “xsplain” the mysterious and complicated mechanism commonly referred to in non-layman vernacular as: “FINANCIAL INNOVATION!”
Well I’m no ‘Knighted’ economist, but I will attempt to simplify the rather complicated concept of financial innovation.
Financial Innovation: the process of transferring losses or financial risk to another party, such as government or retirement funds, while charging a fee for doing so.
while charging a fee for doing so. Or, as Paul Volcker said in an interview posted in today’s WSJ: “I found myself sitting next to one of the inventors of financial engineering. I didn’t know him, but I knew who he was and that he had won a Nobel Prize, and I nudged him and asked what all the financial engineering does for the economy and what it does for productivity.
Much to my surprise, he leaned over and whispered in my ear that it does nothing—and this was from a leader in the world of financial engineering. I asked him what it did do, and he said that it moves around the rents in the financial system—and besides, it’s a lot of intellectual fun.
Now, I have no doubts that it moves around the rents in the financial system, but not only this, as it seems to have vastly increased them.”
For that Paul Volcker interview, google-up “paul volcker think more boldly”.
“Now, I have no doubts that it moves around the rents in the financial system, but not only this, as it seems to have vastly increased them.”
At a SOL moment like right now, the moving rents overlaid on decreasing rents creates a giant sucking sound of wealth transfer from Main Street to Wall Street.
“Financial Innovation: the process of transferring losses or financial risk to another party, such as government or retirement funds, while charging a fee for doing so.”
Dang Al, that’s good!
You didn’t even resort to “Transparency” or “Conundrum” …it even sounds better when I say it with a whisper voice & a slight mutter…
Clusterstock
Greenspan: Bernanke Is Out Of Bullets, Now Inflation Is The Big Risk
Last week Meredith Whitney declared that the government is out of bullets, and now Alan Greenspan is saying the same thing about his old place of employment, The Fed.
Reuters: The U.S. Federal Reserve has done all it can do to reduce unemployment and needs to worry more about the risk of inflation from the stimulus it poured into the economy, former Fed Chairman Alan Greenspan said on Sunday.
“I think the Fed has done an extraordinary job and it’s done a huge amount (to bolster employment). There’s just so much monetary policy and the central bank can do. And I think they’ve gone to their limits, at this particular stage,” Greenspan said on NBC’s “Meet the Press.”
Remember: this is a guy who knows his bullets, having fired them early and often at ever opportunity during his tenure at the Fed.
He’s probably right, though if anything he’s understating things a bit. The Fed, with its quantiative easing and massive expansion of the Fed’s balance sheet has already gone far beyond what many regard as safe.
Even if the Fed’s activites haven’t been dangerous and bubble-making, we should hope that the economy can somehow organically from here. If we’re still at the point where it’s on Bernanke to do the job, we’re screwed, especially in light of the higher Fed funding costs looming on the horizon…
Leigh
“There’s just so much monetary policy and the central bank can do.”
Now, now - what kind of attitude is that for a knight in shining armor to have?
Heck, all the Fed has to to is buy out all the CC debt and forgive it. That’ll get consumer’s back into the spending mood!
YEAHHHHHHHHHHHHHHHH
And think of all the lawsuits that wont happen….and all the lawyers/worker bees in the collection industry outta work…
Might just free up the courts to like prosecute criminals quickly, and get personal injury, malpractice,disability, product liability cases on a fast track….
aNYCdj,
Interesting. Of late I’ve seen any number of “wrecks” on Craigslist for autos. LOTS of them! And ‘perfect’ rear enders too.
Just enough to “total out” the vehicle but not enough that just a few body parts couldn’t fix and turn around in a heartbeat. Given the state of the economy, this insurance fraud stuff is going through the roof.
Agreed and that is why you should always claim that in any car accident…what you want is for the insurance company to pay off the claim WITHOUT raising your rates.
If you want to pay a fraudulent claim then its on your dime not mine prudential….PFFT!
—————–
this insurance fraud stuff is going through the roof.
They can’t shut off the printing presses. There will be riots in the streets if the unemployment and welfare checks stop arriving.
In Colorado,
Well don’t forget all the state and county workers that had it not been for Bailout One would be in the streets w/ bounced checks protesting too.
Good point!
And don’t forget millions maybe tens of millions are being forced into adjustable rate credit cards….imagine what a 4-5 % increase in the prime rate would do…
——————————
If we’re still at the point where it’s on Bernanke to do the job, we’re screwed, especially in light of the higher Fed funding costs looming on the horizon…
Why can’t they raise interest rates a little? Sheesh.
Why, haven’t you heard?!?!?!
If interest rates rise, the **whole world** will collapse! We can’t have people earning money on their savings. That would make them save more and spend less. Heresy, I tell ya!
Only banks are allowed to earn money on interest rates — that is, on the spread between what they earn on their own investments in Treasury bonds and other risk-free instruments, and what they pay out to households on savings (roughly 0%).
Florida condo nightmare. Six actual residents to cover fixed costs of $8,000 per month in their 42-unit building.
www dot heraldtribune dot com/article/20091213/ARTICLE/912131050/2416/NEWS?Title=Condo-buyers-allege-flipping-scheme
“When the Habers and their neighbors began trying to track down delinquent buyers, they discovered other oddities, including the fact that nearly every buyer was Brazilian and six had listed fake U.S. addresses on the contracts they signed to buy units.”
“…….to buy units.”
Let me finish it! Let me! Let me!
“…….while receiving cash at closing.”
gold star for x-gsfixer - do you want it on your forehead or the end of your nose?
Good question. Have to think about it.
Probably the forehead…….gotta leave room on the nose for the brown stuff, as that seems to be a major job prerequisite as of late…….
I bet they can foreclose on the other 36 units and each resident can come away with owning 7 units each!
I bet they can foreclose on the other 36 units and each resident can come away with owning 7 units each!
Could this really happen???
How wonderful it would be if these six owners could pay transfer fees and taxes and turn around and dump the condos for $50k apiece!
They can’t _individually_ foreclose and own, but the condo association probably can. In which case, the owners as a whole end up something valuable to sell in order to capitalize their HOA and perform maintenance/improvements with. Or maybe since they own the association, it could sell the units to the four owners for cheap (or even just distribute them?) and they could flip them them for more.
Forget that, bust down some walls, 7000sqft condos! Nothing like having 4 kitchens.
Really an interesting article, thanks. I found this exchange (when confronted with the current info) from two of the banks that are involved with the condos amusing:
“These loans were originated by a variety of third party entities over a considerable period of time,” said Mark Rogers, Citibank’s spokesman. “In an environment where the inflated marketplace values may have already been established on a larger scale, the values on these individual properties may not have seemed unusual.”
But Nancy Norris, the spokeswoman for JPMorgan Chase, said it is clear the deals were suspicious and her bank’s fraud department is now investigating.
Hmm, wonder why citibank is still performing poorly…
Without comment -
Fiji Times Online
Dollar melts down in Tokyo hot water
TOKYO, AFP –– As the US dollar struggles against other world currencies in financial markets, the greenback is literally in hot water and melting down in Japan.
Japan’s top toymaker Bandai has released paper-thin, rose-scented bath soap that looks like the American 100-dollar bill and dissolves to create a bubble bath.
To avoid being mistaken for the real thing, the “Bubbly Bubble Bath” banknote features the winking face of former US president Benjamin Franklin, and the number 1000 instead of 100.
A pack of 10 bills is a steal at just 250 yen ($F5).
“You can enjoy being rich cheap,” Bandai spokeswoman Yuka Saito said.
For those with fond memories of Japan’s bubble economy of the 1980s, a yen version of the soap is also available.
Bandai has already sold 200,000 bundles of the two currencies to stores since their launch three weeks ago.
For bathers who like a moment of quiet reflection in the hot tub, each pack offers some words of wisdom, such as “Money is the God of the World” and “Money does not change men, it only unmasks them”.
Bandai is also famous for the Techroid Zaku II robot, which is equipped with a CCD camera, walks by remote control and shoots a BB gun.
“Bandai is also famous for the Techroid Zaku II robot, which is equipped with a CCD camera, walks by remote control and shoots a BB gun”
Think I just found a great gift for the kiddies on my list.
Ooops! They’re $1,300 each- sorry kids. (You’ll shoot your eye out.)
Thanks for the chuckle alpha
Leigh
Well the Daisy model 1938 Red Ryder Youth BB gun is only 34.99. So they can shoot their eyes out for MUCH less.
“Money is the God of the World”.
ummmm…thinkin’ i may just wait and see how this whole satan worship thingy pans out.
It could just be an akward/sloppy translation of “Cash is King”.
To avoid being mistaken for the real thing, the “Bubbly Bubble Bath” banknote features the winking face of former US president Benjamin Franklin, and the number 1000 instead of 100.
It’s good to see that it’s not just our reporters who skip checking the facts!
“In the last two years, DC’s eighth-graders increased their math scores at a faster rate than all other big cities save San Diego.”
– from today’s WSJ, a piece about Michelle Rhee
My immediate reaction was to wonder about San Diego, whether the wonderful rise in eighth-grade math scores simply reflects the departure of some number of Mexican families formerly employed in construction. What do SD people think?? (I don’t question DC, I think Michelle Rhee is actually doing useful things there.)
My immediate reaction was to wonder about San Diego, whether the wonderful rise in eighth-grade math scores simply reflects the departure of some number of Mexican families formerly employed in construction.
Having family members in construction, and, having banged a few nails and turned a few wrenches myself, I can say that you need a pretty good head for math to get beyond the lowly apprentice/entry level.
However, from what I saw here in Arizona, the imported, Spanish-speaking level was working at the lowliest levels of the building trades. So, if they couldn’t add, subtract, divide, or multiply, it was no big deal.
I can say that you need a pretty good head for math to get beyond the lowly apprentice/entry level.
Do you mean real math, or basic arithmatic?
Going from really really low to really low could be a brazilian percent increase.
“My immediate reaction was to wonder about San Diego, whether the wonderful rise in eighth-grade math scores simply reflects the departure of some number of Mexican families formerly employed in construction.
my immediate reaction was to wonder how DC cheated.
There are some local press reports that the increase may have been mostly from high acheiving kids moving into the District and attending some very limited number of small charter schools.
i wasn’t suggesting my immediate reaction was rational.
IMHO, if true, it has several causes.
1) gentrification
2) Rhee
3) dramatic decreases in violence across the city over the last decade
4) my tendency to give panhandlers foreign currency, forcing them to learn exchange rates, the knowledge of which they then pass on to their kids.
It’s pretty easy to check whether this is the case. California’s Dept. of Education disaggregates test scores by ethnicity and income level (proxy free/reduced lunch price).
Check the N for the subgroup size. Also check to see whether the subgroups had similar scores over time. If the latter remains the same and the former decreased for Hispanic, then your hypothesis might carry water.
“In the last two years, DC’s eighth-graders increased their math scores at a faster rate…”
It’s really quite amazing what the human mind is capable of if you can “Force” its “Focus” on say…x1 task…like say: “Teach to Test!”
Another way to improve scores is to make this year’s test easier than last year’s. Teachers get better raises), kids have more self-esteem, parents are prouder; it’s a win-win-win.
Educational innovation is kinda like financial innovation (per that great definition in an earlier post today).
Dang. You beat me to it!
And it is certainly still the case that the scores are pretty low. There may also be some upper-middle class families that can no longer afford private school.
US protests at Japan clunkers scheme
US trade authorities have protested against Japan’s nine-month-old “cash for clunkers” vehicle scrappage scheme after Ford, General Motors and Chrysler complained that it discriminates against imported cars.
The private protest, lodged by the office of Ron Kirk, US trade representative, calls on Japan to review emissions criteria governing which models qualify for the programme, which offers up to Y250,000 ($2,800) in tax relief per vehicle.
No US-made car makes the grade – a result which Japanese officials attribute to dirtier engines, but which Detroit producers blame on the unusual way Japan measures fuel efficiency.
US irritation has been amplified by the fact that Toyota, Honda and other Japanese producers were big beneficiaries of Amercia’s cash-for-clunkers programme earlier this year.
European carmakers have also raised objections. Hans Tempel, president of Mercedes-Benz Japan and chairman of the Japan Automobile Importers Association, has called the Japanese scheme “unsatisfactory”.
Imported cars accounted for just 7 per cent of vehicles sold in Japan in 2008. Most were high-end European brands such as BMW and Mercedes. American carmakers sold just 14,000 vehicles, according to the importers association, less than a tenth of the European Union producers’ tally.
Japan’s incentive scheme pays Y100,000 to buyers of new cars that beat 2010 emissions standards by 15 per cent or more, and an additional Y150,000 to drivers who trade in cars aged 13 years or older for a “green” vehicle.
The government last month extended the popular programme by six months to September 2010.
http://www.ft.com/cms/s/0/9c166894-e8b4-11de-9c1f-00144feab49a.html?nclick_check=1
Funny how other others think protectionism is OK when they do it.
Japan measures fuel economy in an unusual way?
Oh? Is that why their cars get better gas mileage than Amercian made?
Oh they make their share of gaz guzzlers.
How To Short Mexico Ahead Of The Coming Oil Production Collapse
Shorting Mexico’s Peak Oil Economy
Green Energy Investing for Experts, Part II
The next Tequila Crisis will be a peak oil crisis. Mexico’s government is dependant on revenues from declining oil fields. The prospects for replacing these revenues look slim. Shorting Mexico Country ETFs looks like a good way to hedge market exposure.
In Green Energy Investing For Experts, Part I, I discussed why it makes sense to use companies and sectors that may be hurt by peak oil or climate change as a hedge against the market exposure in a green portfolio. In Mexico, peak oil is already a reality. Production has already declined , but, because most investors do not understand the irreversible nature of declines in oil output, the Mexican stock market had not yet discounted the damage that peaking oil production is likely to do to the Mexican economy.
Below is a quote from the Oil Drum about Mexican oil production:
The President just changed the head of Petroleos Mexicanos (Pemex) as the revenues that the state gets from sale of its oil (making up nearly 40% of the federal budget) dropped 30% in the first half of the year. Current Mexican Government predictions that overall Mexican production will stabilize at 2.5 mbd over next year don’t reflect the collapse of Cantarell, and also fail to recognize that the promised increases in production from other fields are not reaching the goals set. It is only a few days since the production at Chicontepec was “evaluated” after falling some 12,000 bd short of target. This field is still in development, with ultimate production targeted at 550,000 to 700,000 bd by 2017, but as it is already 16% behind the mark that does not augur well for that future.
As Euan Mearns pointed out the fields at Ku-Maloob-Zaap (KMZ) which lie adjacent to Cantarell are being produced in the same way as Cantarell, and thus production has recently risen dramatically.
That means the Mexican Federal revenues dropped 12% in the first half of 2009 because of falling oil production. This is not a one-time hit to the budget, but part of an ongoing decline. That means that Mexican government revenues are permanently 12% lower, and likely to decline further as oil production declines further.
I can’t think of any good way to make up for the large and growing budget gap. Raising taxes would flatten an economy already hurting from the financial crisis. Cutting spending would do the same. Cutting funding to museums is painful but insufficient. Debt is currently at 44% of GNP, a high level, but possibly manageable if the decline in revenues were cyclical, rather than permanent and ongoing. With declining revenues, default and/or devaluation seems almost inevitable. No option would be good for Mexican companies.
Shorting Mexico
If the Mexican Governments’ fiscal situation is so dire, it makes sense to short Mexican companies, especially if the short is part of a hedge against exposure to world financial markets. With a hedge, the investor only needs to be confident that things are liable to get worse in Mexico more rapidly than elsewhere, or not get better as quickly.
That seems like a very good bet to me, so I looked for Mexican Country ETFs or closed-end funds to short. I found
• The Mexico Equity and Income fund (MXE)
• The Mexico Fund (MXF) and
• The iShares MSCI Mexico Index Fund (EWW)
http://www.altenergystocks.com/archives/2009/12/experts2.html
U.S. case highlights Mexico’s rampant oil theft
Robert Campbell
MEXICO CITY
Wed Aug 12, 2009 4:17pm EDT
Related News
MEXICO CITY (Reuters) - Mexico’s state-run oil company Pemex has an endemic problem of fuel thefts from pipelines that was highlighted this week in a case involving stolen oil smuggled into the United States.
U.S. customs authorities handed over $2.4 million to the Mexican government on Tuesday that was uncovered in a joint investigation into oil stolen in Mexico and sold north of the border.
Tapping into state oil monopoly Pemex’s PEMX.UL pipelines to steal gasoline, diesel and even jet fuel has generated hundreds of millions of dollars of profits for Mexican criminals for years.
Bernanke Will Wait Too Long To Raise Rates Just Like Greenspan. Their past is good predictor of their future response.
Get Ready For A Couple Of Hot Inflation Numbers
So far this year, the public perception of whether we’re in a deflationary or inflationary environment has tended to turn on the lack of year over year price increases. This has created the impression among many investors that inflation is “tame” despite the fact that prices have been rising all year.
When the the Bureau of Labor Statistics reported CPI data last month, it said that prices were 0.2 percent lower than October 2008. This pretty much white washed the fact that the month over month movement was a 0.3 percent increase. The cumulative rise in prices over the first 10 months of this year has been 2.8 percent. But hardly anyone noticed.
http://www.businessinsider.com/get-ready-for-a-couple-of-hot-inflation-numbers-2009-12
In my region retail inflation is already 20%+.
I’m feeling inflation here, too.
I don’t see so much inflation here in Florida. Publix the local grocery store recently offered a $50 BP gas card for $40 with the purchase of $25 of groceries. And on top of that I got 4 boxes of “Fiber One” cereal for $6.00. Yes, $6.00 for 4 boxes. Unbelievable. The groceries deals have been excellent, especially when you factor in my coupon clipping. I’ve never had such a low grocery bills.
I used my BP gas card yesterday and right before my eyes the guy at the gas station was changing the price of gas. It went from $2.69 to $2.59 as I was pulling in to get gas. I got my free $10 worth of gas, thank you Publix.
So, I’m not so sure about this inflation thing YET. I do believe it’s coming, but not so sure its around the corner. I still see lots of deflationary signs in our neck of the woods.
Posted this late Friday, just thought I’d run it by the resident tax experts to see what they think.
Got a letter last week from the state Department of Revenue….they want “additional information” about the Dodge Charger project I bought back in June (6 weeks before my job went pfffft), and put it on a “Non-Highway” title until my job situation gets resolved.
(Yeah, I know, I shouldn’t have been buying anything, but I haven’t seen a car this straight in a long time, and the price was definitely right, but I digress..)
Anyhoo……as suspected, it looks like the state has gotten around to looking at these cars as a revenue source. They want me to supply info on condition, running status, trim level, etc. etc., and to reply within ten days.
(but they haven’t said squat about my “driver”, that I pay the princely sum of $12/year in property tax.)
My attitude is that if they want to hammer me for property tax on a car that is currently undrivable, they can locate it and inspect it their own damn selves.
Any downside to just ignoring this request? I don’t see how they get off charging property tax on a car that is currently unusable. Frankly, if the plan is to beat me up on property tax after I finish it, it just gives me another incentive to move to another state.
Tell em everything they don’t want to hear. It is a pile of rust, engine seized, interior providing affordable housing for rodents (need tax credit). If they want photos, go to the junkyard and get some close-ups. You have to fight back while playing the game at the same time.
Ummm… Wouldn’t that be fraudulent?
Not if you could prove the rodents were unemployed recovering drug addicts.
If you have the time and postage (it could take a lot of both) to play with the state…..go for it.
What state is this that you have to pay property tax on vehicles?
Not sure what state X-GSfixr is from, but you have to pay property tax on vehicles in TX.
My ‘05 car is about $70 a year.
I live in Texas and have never paid property tax on a vehicle.
Are you thinking about the annual vehicle registration tax(tag)? That is based on the age/weight of the vehicle and the county you live in, not the value of the vehicle(and if you fill out the farm vehicle declaration you can save 1/2!).
Kansas……it sucks.
A percentage of the sticker price, goes down every year. A typical mid size sedan will be $6-700/year. Resale doesn’t matter, just the original sticker; so you still pay a lot more for a 5 year old Cadillac vs. Honda Civic, even though the Honda may be worth close to the same, when it comes time to sell/trade.
If you want to see some really pi$$ed-off people, stand outside the tag office, and wait for the people that have moved here tag cars from states that DON”T have property tax on cars. Around here, a family can pay as much/more on vehicle taxes as they do on their house.
Like I said, it sucks.
If you come to Kansas (at least Kansas outside of Johnson and Douglas counties), and wonder why there are so many clapped-out POSs driving around, now you know why.
One of the things I like about this blog is finding out about some of the pitfalls of relocating to other areas…….just doing my part to expand the database.
X-GS,
Interesting, but why stop there! Why I’ll wager there’s a pauper’s fortune in old boats sitting under tarps in barns and whatnot!
We used to have a similar situation in WA state, we paid and advalorem excise tax to register and renew our vehicles each year. In the early 90’s we had a bit of a tax revolt and voted the tax out with an initiative ballot.
It was not unusual to pay $700 or more to renew the tabs on a late model vehicle. It was a killer if you had a couple of vehicles come due at the same time.
Its now $40.00 or less.
The downside is the state just had to jack up taxes in other areas to compensate.
Montana too. You don’t want to buy a new or 1-yr old car here.
Maybe you can entice Tim Eyman to journey to Montana. He’s authored many a tax revolt initiative in WA saving the poor ol’ taxpayer billions. Of course, its just about bankrupted the state because the politicians have yet to figure out how to match spending with revenue.
Infact, the pols in WA might pay you to take him.
Colorado too. But it goes down as the vehicle depreciates. It’s about $400 on a new $20,000 car.
How about sending them a picture or two…..and if they wanted to inspect it they could. It’s Just a scare tactic
Yeah, just be sure to get that rattlesnake to move from his comfy spot in the back seat. Y’know, the seat that catches those nice afternoon rays of sunshine.
I wouldn’t recommend just ignoring it. That is likely to get you to the top of the “follow up on this guy” pile. I did a little checking on the Kansas Department of Revenue website. I don’t see any link to the rules about whether “non-highway” vehicles are taxable. As a matter of fact, I don’t see any stuff about the vehicle property tax and how it is calculated.
Do you know where this info is located? Put up the link and I’ll take a look at it….
Perfectly legitimate of the state to do this. If you have nothing to hide, send them a picture with a description of the condition.
Hey, if we can’t create real wealth and prosperity, we can always just change the accounting rules!
Accounting Change to Boost Insurers’ Books by $11 Billion
online dot wsj dot com/article/SB10001424052748704825504574582252820965322.html
I was going to write an explanation of why this accounting move is so wrong, but the article actually covers it.
“Consumer groups have complained that these (deferred-tax assets) are paper assets that won’t help pay claims if companies hit the skids.”
How about Long Term Care Insurance, where you pay a corporation for decades and expect the money not to have disappeared into executive bonsues along the way? Given that such corporations can make political donations to politicians who oversee state insurance departments, does anyone believe this has any chance of working?
WT, you just put into words what I’ve long suspected about long term care insurance. Thank you for doing so.
How about Long Term Care Insurance, where you pay a corporation for decades and expect the money not to have disappeared into executive bonsues along the way? I see a resemblance between that kind of insurance and company-sponsored defined benefit pension plans. Both make assumptions about the future that may not come to pass.
They’ll make assumptions that the minimum amount of money they can get away with needs to be reserved for claims, and pay out the rest in bonsues and profits.
Sign up a bunch of people in their 50s, collect a lot and pay a little for 20 years, and then suddenly find that reserves are inadequate when people start hitting their 80s. That’s the game.
That’s the game. The basic mechanism for making a profit from selling insurance: Take in more in premiums/earnings than you pay out in benefits. When earnings fall or the flow of premiums decreases, slash the benefits by hook or by crook.
You know, I had been THINKING about getting some, but recently they raised the rates on all those who THOUGHT that they were getting that insurance for a fixed monthly rate.
How about Long Term Care Insurance
IMO there is a serious philosophical problem with ANY contractual promise which calls for performance 20, 30, 40 years down the road– especially when one of the parties is a corp or government. So many things can change in that time frame, it’s really hard to know if such a promise can be enforced. Another example is life in prison without parole for an exceptionally violent criminal. How do we know the gov’t will be around and have the resources to keep that person locked up forever?
[should be italics off after 1st paragraph]
“Consumer groups have complained that these (deferred-tax assets) are paper assets that won’t help pay claims if companies hit the skids.”
Geez, Corporation’s have learned, time & time again…you need to have a “Plan B” just in case something mysterious happens…
“B” as in:
Bankruptcy
Bailout
Begin again with a new name & Board
But,But,But…
Bob, Betty, Robert, Bianca, Tom, Teri, Richard, Dick, Harry, Hank, Larry, Lefty, Lola…
i can’t get the article without a sub…being a corporate tax accountant i am interested if you care to paraphrase the article.
otherwise…i guess i could just look it up.
Sorry about that, it was free when I posted it, but it must have just slipped over to the pay side. I don’t have a sub either.
Sorry about that, it was free when I posted it, but it must have just slipped over to the pay side. I don’t have a sub either. It is still possible to get a free look at the entire article. I just submitted a long explanation how to do this. Your cite still works, but you can’t use it directly.
i can’t get the article without a sub Actually you can, but it’s rather tricky. If you attempt to recreate the original url based on LehighValleyGuy’s clue, httponlinewsjcomarticleSB10001424052748704825504574582252820965322html (I omitted all the ://..) and submit that to Firefox, you get a truncated WSJ article. If you take the title “Accounting Change to Boost Insurers’ Books by $11 Billion” and use Google to search it, Google will cough up a reference, click on that (in Google) and you will get the full article. You can also cut & paste the reconstructed url into a Google search window & then jump from the Google result to the full article.
This has been mentioned on the HBB before. The urls apparently used in the original citation & the one generated by Google look the same, but give different results depending on how they’re presented to Firefox. Maybe an HTML wizard can explain what’s happening.
thanks!
Michael,
It’s not exactly a technical article, but these parts seem to best describe what is going on:
“Under the measure, insurers will be able to count more of the so-called deferred-tax assets as part of their capital cushions.”
———–
“State insurance regulators have required deferred-tax assets and deferred-tax liabilities to be recognized in statutory financial statements since 2001, but the amount of such assets that can be recognized is significantly limited under an admissibility formula.
With the adopted change, the amount of deferred income-tax assets is still “significantly limited, but some of the overconservatism has been reduced,” the NAIC said in a statement.”
“overconservatism”
So that’s what prudent and conservative behavior is called these days.
We toured a couple of forclosures on Saturday. The agent has been pretty up front with us (not much of a kool-ade drinker), which has been why she is the one I call when I need a door unlocked.
The rule (at least in this area, not sure about others) used to be that in order to reset the days on market (DOM), a seller would have to take the house off the market (or at least off the MLS) for three months. It seems our local chapter of NAR has changed that rule. In order to reset the days on market, a seller need only de-list for 24 hours. No price change necessary AFAIK.
So caveat emptor, everyone. If you’re researching or looking at houses, don’t just ask the DOM, ask for the entire MLS history.
And thanks to the handful of honest agents out there who offer up the true statistics without being asked.
“…It seems our local chapter of NAR has changed that rule. In order to reset the days on market, a seller need only de-list for 24 hours.”
Well let’s see, we have the ability to create a CARFAX…I’m certain some kid in graduate school can come up with a HOMEFAX…(Hwy has much faith in the abilities of America’s kids)
Kim:
It still will all go back to: can you rent it out in an emergency and at least break even. Let alone make a few hundred a month as an “Investment” property.
Not many in my area would come close.
where are you at Kim?
Chicagoland
I’ve seen the same DOM resets here in So Cal. We also used to have the 30 or 90-day rule, but have now seen them relist with new DOMs in a single day.
Well I’ve always argued that DOM shouldn’t have much influence on what you willing to pay for a property.
Good quote from Krugman today, one that is certainly housing bubble related.
Principle enunciated by Upton Sinclair: “It is difficult to get a man to understand something when his salary depends on his not understanding it.”
It’s difficult to get a man to admit to understanding something when his salary depends on his not understanding it.
These guys understood what was going on. I’d love to see all of the investments these surprised bankers and gov officials made over the last couple of years. Mozillo certainly understood what was going on. I’m guessing a lot of the other guys hedged their stock exposure by shorting financials.
More people should read Upton Sinclair. Or at least be familiar with who he was and what he wrote about.
What an interview on WBBR this morning!
Laurie Goodman was guest economist and made these important points and I’m not paraphrasing-
-There are 8 million underwater housing mortgages out there today and more to come
- 7 million of those will liquidate
- The bottom in housing is late next year *at the very earliest but not likely*
- Realistically the workouts/modifications/liquidations won’t stop for another 4-5 years
- Once housing bottoms, there will be *many many* years of flat prices
WBBR might have a podcast of this. Goodman had many figures and facts and there seemed to be no shooting from the hip at all. Those I mentioned are just the highlights that I can recall.
- “Realistically the workouts/modifications/liquidations won’t stop for another 4-5 years”
Why so many people can not or will not grasp/acknowledge these things eludes me. We have a long way to go, and “they” can come up with program after program but it won’t stop what has to happen.
It’s a matter of acceptance. Desperately hanging onto what was merely makes the medicine all the more bitter. 2005 was an unprecedented aberration that so many still view as normal.
Im singing to the choir here. The cesspool of corruption called the REIC can’t hear.
But not in DC!
EVERYONE & their dog is moving to DC ’cause we have all the jobs !
Our RE MArket has already rebounded & has no where to go but up!!
It’s 2005 all over again here - don’t ya know!!
Not only DC, but the surrounding area. I live in Montgomery County, in a town a good 40 minutes from the DC line in rush hour. Townhouse across the road from me is currently listed for $397,000. This is a 3 bedroom, 1 bath townhouse, with under 1800 square feet. Current owner bought it in 2007 (no doubt thinking they were catching a deal) for $448,000. Previous owner sold it to them in 2000 for $205,000.
Who in their right mind would feel comfortable paying anything REMOTELY near the asking price? And yet, I do not see prices coming down and yes, people are actually buying.
If people are buying, why would you expect anyone to lower the price? Sounds to me like you’ll we watching and waiting for a long time with that kind of expectation.
EddieBillie!
Excrement the union thug.
Just tonight they had an episode of “Real Estate Intervention” that was centered in Arlington, VA (IIRC). Even the “intervention” agent (Mike) said prices were going back up and that the market was strong — essentially recession-proof.
“But there’s an alternative view taking shape among some investors: The supposed “bottom” may be nothing more than a temporary plateau, they say, with more declines ahead.
Why? For the same reason that Dr. Laurie Goodman, economist and senior managing director of research for Wall Street’s Amherst Securities thinks lots of boot-to-bust metropolitan areas will see price declines in the months ahead: There is a massive 7 million unit “shadow inventory” of delinquent and distressed properties in banks’ foreclosure pipelines that haven’t been put on the market and haven’t yet affected prices.
For instance, in South Florida, lenders expect to take a total of 29,000 units into REO by the end of the year, up 9 percent over 2008, and almost triple the repossessions in 2007, according to Condo Vultures.
When these are finally listed, they’re going to be a wet blanket, and depress prices. Goodman forecasts price declines of another 8 to 10 percent in the coming months, just when the conventional wisdom is that we’ve already seen the worst.
However, Peter Zalewski, head of CondoVultures, says the key to South Florida pricing in the coming year will be location. Condos near or on the water are selling well to investors and second home buyers from the U.S. and abroad.
Demand is likely to keep their prices stable at least.
But in the inland suburban submarkets, which are less attractive to investors and second home buyers, Zalewski sees definite problems — and vulnerability to further price declines in 2010. ”
Published: November 6, 2009 Realty Times (a rag for the reic.)
However, Peter Zalewski, head of CondoVultures, says the key to South Florida pricing in the coming year will be location. Condos near or on the water are selling well to investors and second home buyers from the U.S. and abroad.
———————-
“Rich investors”?
“Second-home buyers”?
“It’s different here”?
Gee…where have we heard this before?
Not sure if this got posted in the past couple of weeks and I missed it or not. Interesting read by Hussman; it’s part rant and part mea culpa—mostly the former. But I agree strongly with his comments on policy implications:
http://www.hussman.net/wmc/wmc091130.htm
I was wrong.
Not about the implosion of the credit markets, which I urgently warned about in 2007 and early 2008. Not about the recession, which we shifted to anticipating in November 2007. Not about the plunge in the stock market, which erased the entire 2002-2007 market gain, which was no surprise. Not about the “ebb and flow” of short-term data, which I frequently noted could produce a powerful (though perhaps abruptly terminated) market advance even in the face of dangerous longer-term cross-currents. I expect not even about the “surprising” second wave of credit distress that we can expect as we move into 2010.
From a long-term perspective, my record is very comfortable. But clearly, I was wrong about the extent to which Wall Street would respond to the ebb-and-flow in the economic data – particularly the obvious and temporary lull in the mortgage reset schedule between March and November 2009 – and drive stocks to the point where they are not only overvalued again, but strikingly dependent on a sustained economic recovery and the achievement and maintenance of record profit margins in the years ahead.
Germany created its first true Bad Bank, into which West LB dumped 85 billion of bad paper (nominal value). These include much chunk from Ireland, and also a portfolio of US student loans, much to the dismay of some German commenters. I wonder who made what fees on the latter.
“Unexpected losses” will be born by the state of North Rhine Westfalia (shall I say it: tax payers), as well as some other banks.
In 2006, there was an article in the US that called West LB “one of the top financial institutions in development financing for high end luxury hotels, resorts and private residence clubs in the U.S.”
They managed, or rather, their “Bruce Davidson, Executive Director and Head of Hospitality and Leisure Finance, New York City” (where do they find these people: he was a former mortgage officer) managed to lend the money for the Sky Lodge in Park City, which was started when the bust already had begun. In a place that is over-over-over-saturated with luxury condos. The Sky Lodge is a 5* condotel, finished last year and no sales.
West LB, or their lightbulb of a Director, also lent the money for a super luxury “resort” in Southern Utah, Canyon Point, which you won’t find on any map - it’s near Escalante in the middle of nowhere, with the closest neighbors likely to be FLDS (plural marriage) kind in Kanab.
“It’s in the middle of an area that used to be Federal land for Navajo and Hopi tribes, but was claimed by Aman Resorts through a 2005 Act of Congress that swapped some private and Federal lands.” (”Canyon Land Development and Kane County, Utah, are finishing up an agreement and setting boundary lines for a new town to be called Canyon Point, Utah, which will encompass the Amangiri Resort”, said the Page newrag in May).
This place opened a couple of months ago, it’s a glorified condotel, villas starting at 9 million, rooms at 900 a night. The name of course is Asian, and their style is very nice - in Thailand. But Amangiri near Kanab, Utah? With West LB as the lender?
Never has it been so expensive to look at the rocks of Southern Utah. Have a look:
http://www.amanresorts.com/amangiri/resort.aspx
““Unexpected losses” will be born by the state of North Rhine Westfalia (shall I say it: tax payers), as well as some other banks.”
I’m guessing that I’m not the only one who is glad to see that the US taxpayer is not the only party invited to the sh*t-sandwich luncheon buffet.
Joke for the day
What is the difference between Tiger Woods and Santa?
Santa stops after three Ho, Ho, Hos
my favorite:
when mrs. woods was asked how many times she struck mr. woods with a golf clube she said…”ummm…i’m not sure…just put me down for five”.
Tiger just lost Nike, but Axe for men is ready to sign him.
It is near the Christmas break of the school year. The students have turned in all their work and there is really nothing more to do. All the children are restless and the teacher decides to have an early dismissal.
Teacher: “Whoever answers the questions I ask, first and correctly can leave early today.”
Little Johnny says to himself “Good, I want to get outta here. I’m smart and will answer the question.”
Teacher: “Who said ‘Four Score and Seven Years Ago’?”
Before Johnny can open his mouth, Susie says, “Abraham Lincoln.”
Teacher: “That’s right Susie, you can go home.”
Johnny is mad that Susie answered the question first.
Teacher: “Who said ‘I Have a Dream’?”
Before Johnny can open his mouth, Mary says, “Martin Luther King.”
Teacher: “That’s right Mary, you can go.”
Johnny is even madder than before.
Teacher: “Who said ‘Ask not, what your country can do for you’?”
Before Johnny can open his mouth, Nancy says, “John F. Kennedy.”
Teacher: “That’s right Nancy, you may also leave.”
Johnny is boiling mad that he has not been able to answer to any of the questions.
When the teacher turns her back Johnny says, “I wish these babes would keep their mouths shut!”
The teacher turns around: “NOW WHO SAID THAT?”
Johnny: “TIGER WOODS. CAN I GO NOW?”
What’s the difference between a golf ball and an Escalade?
Tiger can drive a golf ball.
” ‘Monetary management’ is a high-sounding euphemism for continuous currency debasement.”
~Henry Hazlitt
You have to be high for it to sound like sound economic policy.
From today’s WSJ DOT COM: “Pay Worries Slow BofA Search” — “The last-minute hitch shows how sensitive Bank of America is to outside perceptions of its compensation culture even after the company received approval to repay $45 billion in federal bailout money, freeing it from pay limits and scrutiny by Treasury Department official Kenneth Feinberg.
Directors involved in the hiring process are reluctant to offer Mr. Kelly [Robert Kelly, the 55-year-old chief executive of Bank of New York Mellon Corp.] anything that could stir up a public outcry, people familiar with the situation said. Similar worries about outrage over pay led Goldman Sachs Group Inc. to announce last week that its top 30 executives will receive no cash bonuses for 2009 despite the firm’s expected record profits.”
The Pig Men need an Extreme Makeover, more than just lipstick.
Had to add this regarding a house I saw in the past week…
House came on the market in what is generally considered a very good neighborhood on the Jersey Shore (NYC commute friendly).
5 beds 2 and a half baths I believe. Large amount of square footage. Backed up to Green acres. Appeared to be completely redone. At a price which defied logic for the area.
I walk in with wife and Realtor: “Holy crap, the whole house is lopsided! The floors are uneven!”
Wife and realtor disbelieve at first…
Look at the “breakfast nook” window…. there’s a freaking stream less than five feet away from the corner of the house.
Up on the second floor, I step into the weird stone type shower thing they did and there’s a lump the size of a football built into the floor… Get the wife and the realtor to step into into the Shower and there’s stunned to see how badly the work on the house has been done and they start admitting all the horrendous work…
Stepping out of the shower, there’s one of those giant bowls of marbles… I had the wife a few and proceed to drop (and after done with pickup as I didn’t want to cause an accident) the marbles onto the floor. In some cases, they ROCKETED away.
Finally, to top it off, they converted a 1 car garage into a room…. complete with severe dip in the middle of the floor and what I swear were oil stains seeping through but apparently they were just “natural” colourings of the wood (despite in the rest of the house, all wood floors, didn’t see anything of the kind)
Point: I can’t believe after all of this there’s still incompetents attempting flips.
I watch too much CSI: hope these were oil stains in the converted garage, since this house sounds like it was murdered.
Salad,
Totally OT, but I tried Bird Rock Roasters per your recommendation a couple of months ago (I think it was yours anyway), and they’re great! Thanks for the tip.
Cool!, I’m so glad to hear you like their beans, we’ve tried everything and they’ve been the best so far… Peets is our emergency default…
Amen to that. Peets is a VERRY distant second for me. The only place I’ve found that’s actually better than BRR is Coffee Klatch in San Dimas, but that’s mail-order for us here in SD.
Maz, We would all love to see this picture…….come on man go back and quietly snap a few…
———————
Look at the “breakfast nook” window…. there’s a freaking stream less than five feet away from the corner of the house.
Not sure if everyone saw, but Karl Case (of Case-Shiller fame) just retired.
Article.
A big bummer, and it’s sad since it appears he’s losing some of his memory ability.
“A big bummer, and it’s sad since it appears he’s losing some of his memory ability.”
This makes sense, considering some of his overly-optimistic comments on the likely aftermath of the housing-bubble bust.
Still, sad…
“The idea for the most influential measure of the nation’s housing market began in Karl E. Case’s living room about 25 years ago. The Wellesley College economics professor was stunned to realize he had earned more in equity in his three-bedroom home than he made teaching during the same period.”
I am similarly stunned that many Californians have lost more on the value of their houses over the past five years than I have earned in pre-tax income. Apparently I don’t earn enough money to live here…
Credit card changes driving customers away.
Washington Business Journal -
Credit card companies are lowering credit limits and raising interest rates, prompting many cardholders to use their cards less or even shut them down altogether.
A comScore survey asked people who have seen terms on their accounts altered if their charging habits have changed as a result. A total of 39 percent say they have either stopped using the card or closed the account, while 55 percent say they are using the card less.
Half of credit cardholders say they have seen changes to the terms of their account.
“With the economic environment and regulatory mandates prompting issues to make product adjustments, an already financially sensitive consumer is responding with dissatisfaction and an increasingly negative perception of their card issuer,” said Kevin Levitt, vice president of Reston-based comScore (NASDAQ: SCOR).
Nine percent of those surveyed say they applied for a new credit card with another issuer, while 8 percent said they transferred their balance to another card.
From a letter I just wrote to credit union:
In response to your letter of November 17, I am submitting a written request to close the Line of Credit associated with my account. Do not charge me the $25.00 fee associated with continuing this account.
Backgrounder:
For many years, this LOC was free of charge. And I seldom used it. So, away it goes.
Being careful about the amount of money I have in my account is something I can do myself. For free.
I don’t get the credit card balance thing.
Anyone who uses credit to replace income is an idiot (excluding emergencies). 825 FICO’s, because we’re pro-active. The banks can’t be trusted. Our APR on puchases is 9.25% with Chase. That’s still freakin high. What happen to usury laws? Oh yeah, the banks incorporated their cc divisions in DE…I forgot.
PBS has a great history of the credit card industry online. Worth watching.
Older one on the secret history of the credit card racket:
http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/
New One -Pertains to the new laws starting in 2010
http://www.pbs.org/wgbh/pages/frontline/creditcards/view/?utm_campaign=homepage&utm_medium=proglist&utm_source=proglist
Chase bumped me up to 13% a few months ago, paid off my balance and haven’t charged anything since. Cash is king!
Actually, the banks incorporated thier CC companies in North Dakota, which was the first state to deregulate interest rates on consumer credit. They needed the jobs at the time and the credit card companies flocked there.
Then Delaware got into the cc corp give-away mode. They stole the jobs from S.D. You are right, but the story doesn’t end there.
I got offered 0.9% for 18 months on my Chase card. How in the world are you at 9.25% with fico that high? Makes no sense.
Eddie
A teaser rate and a long term rate are two different animals, with all do respect.
I have great FICO scores too, and they “offered” me 13% after being at 9% for years. Are you sure that 0.9% offer doesn’t involve a 5% transaction fee?
Probably. But you can always get that waived with a phone call. And I think it’s 3%, which is still a hell of a lot better than 13%.
Eddie, Sounds like a wise money move. Pay .09% interest on you credit card balance. Hey, that’s a much better deal than EARNING .02% on your savings. You go Eddie!!!!!!!!!!!!
Rent Reductions Set at Manhattan Apartment Complex
NEW YROK (AP/ 1010 WINS) — A tentative legal agreement has been reached that reduces rent for thousands of tenants at a massive middle-class Manhattan complex for the next six months.
The agreement was reached Monday in state Supreme Court. It comes after the state Court of Appeals upheld rent controls at the Peter Cooper Village and Stuyvesant Town complex.
Rents will be reduced based on each tenant’s lease starting in January. The agreement is in place until a formal agreement can be reached following a study on exactly what rents are across the complex. It affects 4,400 apartments.
The East River enclave has more than 11,000 apartments. It was built to house World War II veterans returning to the city.
DJI is half way back. Old high was 14,000 and low was 7,000 in March. Closed at 10,500 today (all numbers rounded).
Where to from here?
DJI is half way back. Old high was 14,000 and low was 7,000 in March. Closed at 10,500 today (all numbers rounded).
Where to from here?
My guess is we’ll drift sideways through the end of the year, then another move up when 4th quarter earnings surprise to the upside… after which we’ll have exhausted this bear-market rally and move sideways until the next leg down sometime in the late 1st or early 2nd quarter.
Just a guess… I’m staying flexible in my brokerage account, taking short or long positions based on the price action of the security. I’m just waiting for the right time to unleash my inner bear, but I don’t think that will happen until next year.
12K on June 1, 2010.
I’m with Eddie on this one. If this market crashes, there is nothing to stop the fall. It cannot be allowed to crash again. The whole facade of what America is supposed to be crumbles exposing what America really is. If that happens, history changes. So it cannot happen.
Knowing that it cannot fail, it will go up.
Come 12K or 6K, I don’t care — I will keep dribbling in my dollar cost averaging until the DJIA goes to 39K… (circa 2035)
P.S. Neither Eddie nor I can accurately predict whether the DJIA is more likely to hit 12K or 6K first in real current dollars, but in nominal dollars,12K first is in the bag, guaranteed by the Fed’s printing press.
“A man’s wealth can be measured by what he has; but it can also be measured by what he doesn’t have and doesn’t want. When he wants little, he is a rich man.”
~Bill Bonner
I think you might also credit the buddha.
Or Thoreau: “A man is rich in proportion to the number of things he can afford to let alone.”
Weekend edition of WSJ - as part of the finance regulation being discussed — $3B of TARP funds will be used to prevent risk of foreclosures for the unemployed.
I don’t recall any help for me, as a renter, when I was unemployed.
FUBAR!!
Maybe we renters need to form a lobby. Seriously. If they’re going to prolong this recession, then we need our bailout, too! Why is it only the mortgage debtors get free rent?
D.C. hands out $15M in bonuses despite recession, budget gaps
December 14, 2009 ~ The Washington Examiner
The economy has been in the dumps for years, but the good times keep on rolling for some favored D.C. employees.
City officials have doled out nearly $15 million in bonuses and awards since Mayor Adrian Fenty took office in January 2007, records obtained by The Examiner under the Freedom of Information Act show.
Among the big winners were Schools Chancellor Michelle Rhee, who was handed $41,250 in August 2007 after barely two months on the job; Department of Health Director Pierre Vigilance, who was given $15,000 in 2008; and city property manager Robin-Eve Jasper, handed $18,000 over two years.
More than 5,700 city employees have been given $14.9 million in bonuses since January 2007. Among the big winners:
» Michelle Rhee, schools chancellor, $41,250 in 2007
» Mary Clegg, schools superintendent executive, $25,000 in 2009
» Karen Griffin, schools special education executive, $25,000 in 2008
» Eric Stanchfield, D.C. Retirement Board, $21,997 in 2009
» Anthony Pompa, finance office executive, $21,796 in 2008
» Robin-Eve Jasper, city property manager, $18,000 from 2008-09
» Pierre Vigilance, Department of Health director, $15,000 in 2008
The bonuses were ladled out even as the city was facing nine-figure budget shortfalls and officials — including Rhee — were firing employees by the busload, claiming they could no longer afford them.
Same thing happens here in our little city, on a smaller scale. They bitch and whine about budget short falls and how they hate to cut back. However the inside playas always find extra $ for all their “public service”!
True story: A few months ago, I was asked to share a few of my Downtown Tucson event photos with a local organization. As is my standard practice, which also is SOP in the photography profession, I offered to do an image licensing deal.
I was told (by the person who asked me to do this sharing thing) that the organization had no budget for such a thing. Well, I smelled a three-day old fish composing somewhere near the e-mail that brought me that message. So, long story short, I didn’t share any photos.
I later learned that this outfit has a $1.5 million annual budget, and a good chunk of its money comes via We the Taxpayers who support Our Fair City of Tucson.
Composing fish. We must be getting close to Beethoven’s birthday (Dec. 16).
I meant to say that the fish was decomposing.
Oops.
Yeah, I thought there was something fishy about that sentence, it just didn’t pass the smell test.
These amounts actually don’t seem all that high to me. I was complaining months ago that Rhee gets over $300k in salary alone, but these bonuses aren’t that high for people in that salary range. And I assume they’ve been planned bonuses… already factored into the budget.
The teacher firings might be excused as a budget issue, however there’s a LOT more to it than that.
Hotwire: S. Fla. hotel rates down 15%
South Florida Business Journal
The Miami/Fort Lauderdale area ranked third on Hotwire.com’s top 10 list of cities in North America where hotel rates have dropped the most, down 15 percent in the last month. The average price at a four-star hotel in Miami/Fort Lauderdale in December is $88, according to the report.
Only Houston (down 19 percent) and Jacksonville (down 17 percent) had bigger rate declines.
Orlando and San Francisco made their way back onto the list after falling off for a few months. Rates were down 14 percent in Orlando and down 12 percent in San Francisco.
“Some year-over-year discounts have eased up this month as we now enter the time when hotels had already begun discounting heavily in 2008,” said Clem Bason, president of the Hotwire Group, in a news release. “Despite some stabilization of these already low rates, some hotels are still lowering rates and will continue to offer some amazing discounts on Hotwire into the new year.”
Last week, Smith Travel Research reported that hotel occupancy in Broward and Miami-Dade counties rose for the second straight week. However, average daily rates continued to fall, with Miami-Dade hit the hardest – down 15.6 percent for the week ended Dec. 5.
My wife and I are thinking about making some offers… HELP
Stay strong, brother!
The new car smell isn’t intoxicating enough?
Muggy,
You can make offers all day long - just make sure they are low enough that they are not accepted!!!
I am struggling right along with you. Hard to contain all that has been bottled up for over 4 years. The spirit is willing but the flesh is weakening.
Hey Muggy,
Freedom is not for everyone. Saving money is not for everybody. Some were just born for debt and slavery. We’ll miss you!
Don’t do it, Muggy!
Or if you do, make sure you don’t pay more than 2000/2001 prices. Not that you can’t lose money at those prices, but because your losses are mitigated somewhat.
Great news. Lieberman has caved (as I knew he would) and will vote yes. ObamaCare is a go. I can’t wait.
Seems to me issues like ObamaCare and Cap and Tax are being directed at a very high level (above any elected official) and while I find Obama absolutely awful, I doubt this push is not coming from a health industry which sees vast legions of unemployed persons with bad credit and is making sure they get all the dough possible.
Lieberman only caved because the Dems caved first. They’ve removed the Medicare buy in and there’s no public option…. So please, tell me how this is Health Care reform especially when there are no price controls?
I wish the GOP had answers and ideas instead of just voting no.
It is always easier to be a critic than to perform.
I am pretty sure medical reform could start small and grow.
1. For the uninsured: Fund community clinics and hospitals. - Cost less than 1% of current plan.
2. Create groups anyone can join, in the same manner large companies currently buy, so self employed people can purchase insurance. This appears to be in the current proposals, which is really the one good thing that could come of this for all the 2000 pages or who knows what?
I am firmly opposed to fines against individuals or companies who are unable to afford coverage however. I believe this is at the heart of the current plans in hopes younger people will overpay for coverage they seldom need and be forced to do so to pay for us older folks who actually need health care.
Why insist on consistency when it stands in the way of another chance to kick banksters in the balls? Any excuse will do for the pleasure of yet another such opportunity.
* The Wall Street Journal
* REVIEW & OUTLOOK
* DECEMBER 15, 2009
Banker Baiting 101
Obama’s latest populist turn won’t help the recovery.
…
Now, amid Democratic panic over 10% unemployment heading into an election year, the President is attempting a double populist play: Blame the bankers for causing the financial crisis and recession by lending too much, and blame them again for causing high joblessness now by lending too little.
“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,” Mr. Obama said in an interview on CBS’s “60 Minutes” on Sunday. “They’re still puzzled why it is that people are mad at the banks. Well, let’s see,” he said. “You guys are drawing down $10, $20 million bonuses after America went through the worst economic year that it’s gone through in—in decades, and you guys caused the problem. And we’ve got 10% unemployment.”
He followed up that warm encouragement yesterday by hauling the bankers in to the White House to receive the command that “we expect an extraordinary commitment from them to help rebuild the economy.”
…
Only farting noises.
I am thinking if BB and company don’t bend over backwards to reassure equity market that they will keep the interest rate pedal to the medal for the indefinite future, the market will respond by strongly correcting.
What’chall think?
The Financial Times
Traders wary ahead of Fed rate decision
By Jamie Chisholm, Global Markets Commentator
Published: December 15 2009 07:40 | Last updated: December 15 2009 12:00
11:55 GMT. A reluctance by traders to take fresh positions ahead of the Federal Reserve’s last interest rate decision of the year left stock markets struggling for direction on Tuesday.
Not even Wall Street’s close overnight at a 14-month high could instil much vim, and the FTSE World index fell 0.4 per cent in activity that is rapidly thinning as the holiday season approaches.
US futures currently point to the S&P 500 opening lower by about 3 points at 1,111. Wall Street’s measure of investor anxiety, the Vix index, had dipped by 2 per cent to 21.2 on Monday – a low level that suggests traders are not expecting much volatility in the stock market for the rest of 2009.
The Fed announces its decision on monetary policy on Wednesday. While no change in the main rate is expected, investors are wary that Ben Bernanke, Fed chairman, could alter the accompanying statement in a manner designed to prepare the market for an end to the current ultra-loose policy.
Any such shift could provide further support to the dollar, and indeed the greenback was in demand, hitting a six-week high on a trade-weighted basis and an eleven-week peak against the euro. It was later up 0.7 per cent at 76.86 and up 0.7 to $1.4548 respectively.
…
——————————————————————————
The Market Eye
“RIP the GCT, A bit bonkers, but loved by many.” It may be too early to intern the Great Correlation Trade - where a falling dollar automatically equals rising stocks, industrial commodities and gold, and vice versa - but it’s certainly not as robust as it once was. Oil was the first element to escape the GCT’s dominion, dropping back well before the dollar began its recent rally. And now equities appear to be striving to slip the leash, trading near the top of their tight range of five weeks despite the buck’s move to a six week peak. Of course it has been easier for stocks to dismiss the GCT when the data - US non-farm payrolls and retail sales - have been relatively favourable of late. Any nasty numbers out of the states, however, could see the GCT rise again.
…