The Housing Bubble

Coming soon?
http://www.spiegel.de/fotostrecke/fotostrecke-50262-4.html

Sorry if already posted

Joe Weisenthal | Dec. 22, 2009, 6:49 AM

A new report from FirstAmerican Core Logic (via Jonathan Miller) offers an update on shadow housing inventory.

Here are the key stats:

As of September 2009, First American CoreLogic estimated there was a 1.7‐million‐unit pending supply of residential housing inventory, up from 1.1 million a year earlier. Pending supply, sometimes referred to as “shadow” inventory, estimates real estate owned (REO) by banks and mortgage companies, as a result of foreclosures and other actions, such as deeds in lieu, as well as real estate that is at least 90 days delinquent. Normally shadow inventory would not be included in the official measures of unsold inventory. At the current sales rate, the pending supply is 3.3 months, up from 2.4 months a year ago. The months’ supply measures how quickly the inventory will run off given the current sales rate.

• The visible supply of unsold inventory was 3.8 million units in September 2009, down from 4.7 million a year earlier. The visible inventory measures the unsold inventory of new and existing homes that are currently on the market. The visible months’ supply fell to 7.8 months in September 2009, down from 10.1 months a year earlier.

• The total unsold inventory (which combines the visible and pending supply) was 5.5 million units in September 2009, down from 5.7 million a year ago. The total months’ supply was 11.1 months, down from 12.7 a year earlier. This indicates that while the visible months’ supply has decreased and is beginning to approach more normal levels, adding in the pending supply reveals there is still quite a bit of inventory that will impact the housing market for the next few years, especially in the context of the current increase in home sales, which is in part due to artificially low interest rates and the homebuyer tax credit.

Double Dip coming?
With trillions of dollars of price supports and Carta Blanca given to Fannie Mae, why are prices just stable? This is a classic Head and Shoulders move, and we are about to fall off of the shoulder.

How long will it be before a T-Bill Auction fails and 30-year paper goes over 6%? My guess is somewhere around the election. Yield curves cannot look like Mt. Everest forever.

Hope that the holidays were great out west - East Coast is getting a reminder that it is January this morning. Wish I had some skis on my feet.

Chinese companies are starting to come in and buy and fix them for housing- the value of being able to legally immigrate is greater than the value of the buildings. We should study the Chinese carefully - they want to buy here as an escape hatch. Funny, where would Americans buy if things got wierd here?

Thursday’s WSJ reviewed the book “Priceless”, by William Poundstone, a book dealing with behavior economics - basically a field of study that questions why we buy what we buy and pay what we pay and demonstrates “people are far less rational than they often believe”.

An excerpt: “In one experiment, a group of licensed real estate agent were shown a house and told it had been listed for $119,900. When asked to estimate a reasonable purchase price, their average was $111,454. When a different group of agents was told that the listing price for exactly the same house was $149,000, their average estimate was $127,318. The agents had subconsciously used the listing price as a reference point for their appraisals - even though they knew it was irrevelant.”

Huffington Post leans strongly to the political left, but they’ve come up with a delightful little YouTube clip that suggests you get your money out of the mega banks (those bailed out biggies that are costing taxpayers an arm and a leg) and put your money into good local banks.

As economist Gary North points out, ” This video is biased, mean-spirited, and simplistic; I love it! The more of these low-budget YouTube videos on the Big Bank bailout, the better.”

This clip is only four minutes and eleven seconds long, and uses “It’s a Wonderful Life” as a running theme. The main point: Support George Bailey and his local bank, which caters to the needs of the local folks, and stop enriching the mega-banker, Mr. Potter.

“The bankers are on the defensive. Let’s keep them there.” says North.

“Stick It to the Big Banks”

The U.S. public debt on December 30th was $12,144,893,016,570.46

This a phony number as it represents only the debt it owes nations and individuals who have loaned it money. It does NOT include the money Congress has borrowed from the Social Security and other government trust funds. Add that sum to the debt and the total is more than $19 trillion!!
< It’s difficult for to get our minds around piles of debt like this. To put it in perspective: Recall that one million dollars is $1,000.00 times 1,000. You know how hard it is to save a thousand dollars? Do it a thousand times and you’re a millionaire!

A billion dollars is $1,000,000.00 times 1,000. A trillion is $1,000,000,000.00 times 1,000. But we’re in hock for NINETEEN TRILLION!

Any idea how we can pay it off?

One of my New Years resolutions will be to ignore anyone who calls the popping of the housing mania/bubble “a crisis”… each time I hear a TV pundit describe the “housing crisis” and it’s devasting affect on the middle class, I nearly barf…

As has been said many times on the HBB, the actual housing crisis started w/the decoupling of wages (underwriting) from housing prices… the relationship between these two key economic statistics or variables, adjusted for inflation, remains the only fricken economic thing that Congress or the Fed need to wrap their little heads around and fix.. either you increase wages (jobs / wages) or decrease housing prices or deal with the consequences of not… just as say, a recession…. period..

Happy New Year everybody.
Here’re some things I’ve been pondering for 2010
1. Barney Frank set aside a cool $4 trillion for the next bailout (you can google it yourself, links don’t tend to post well)
2. FANNIE & FREDDIE get an unlimited taxpayer guarantee
3. Will get the bribes for (1st time) buyers get renewed or even enhanced?
4. Will the FED continue to buy all kinds of junk to keep interest low
5. Will the printing press and heavy borrowing overcome market forces. For how long? What will be the consequences?
6. Will the 2010 election remove both houses from Democrat control and turn off the money spigot? Let’s not forget, the people that initially turned on the money spigot were the Republicans & Paulson.
7. Who will keep buying US treasuries to finance trillion $$ deficits? China, suckers, printing press…?

There’re many variables at play. It is very difficult to make accurate predictions this year. Too many lobbyists. Too much market manipulation at all levels. There are gigantic fundamental problems in our economy and a happy ending to this mess is somewhat unlikely. What’s your take on this?

Here’s a little blurb emailed today to me from our local Crib Chatter site that is well worth remembering for future use:

“The government’s $8,000 tax credit for first-time buyers last fall created a momentum that helped significantly to get people with limited funds into houses,” said David Smith, vice president of sales and marketing for Cambridge Homes, Libertyville.

Years from now, when a houseowning friend or a family member complains about their bills, their taxes, their job, their everything - point them to quotes like this one.

Newsflash America - they’re looking for pigeons!

Chinese firm says won’t pay Goldman on options losses
Reuters

BEIJING, Dec 29 (Reuters) - A small Chinese power generator on Tuesday rejected demands from a Goldman Sachs unit to pay for nearly $80 million lost on two oil hedging contracts, part of a long-running dispute over how China deals with derivatives losses.

Goldman Sachs (GS.N) was one of the foreign banks, along with Citigroup (C.N), Merrill Lynch and Morgan Stanley (MS.N), blamed by the state assets watchdog for providing “extremely complicated” and difficult to understand derivatives products.

Shenzhen Nanshan Power (000037.SZ) (200037.SZ) said in a statement that it received several notices from J. Aron & Company, a trading subsidiary of Goldman Sachs (GS.N), for at least $79.96 million as compensation for terminating oil option contracts.

“We will not accept the demand by J. Aron for all the losses and related interests,” said Nanshan, in line with the stance it took last December.

“We will try our best to negotiate with J. Aron and resolve the dispute peacefully…but the possibility of using a lawsuit can not be ruled out when talks fail,” it added.

“J. Aron told us in one notice that if we do not pay the money, they will reserve the right to launch a lawsuit and will not send us any further notice.”

The State Assets Supervision and Administration Commission said in September that it would back state-owned companies in any legal action against the foreign banks that sold them oil derivatives, which resulted in losses when oil prices dived late last year.

A Beijing-based Goldman Sachs corporate communication official declined to comment.

Nanshan said in October last year that two oil option-related contracts with J. Aron were signed by its officials without authorisation from the company. In December 2008 it said in a statement it had terminated the deals, and that it would not accept J. Aron’s demand for payment.

PARIS (Reuters) - Youths burned 1,137 cars across France overnight as New Year’s Eve celebrations once again turned violent, the French Interior Ministry said on Friday.

Car burnings are regular occurrences in poor suburbs that ring France’s big cities, but the arson is especially prevalent during New Year’s Eve revelry.

The number of vehicles torched was only 10 short of the record 1,147 burned this time last year, even though the Interior Ministry mobilized 45,000 police during the night — 10,000 more than 12 months ago.

I find the claims by the central bankers in top U.S. economic policy positions that they saved the system equally premature to W’s victory speech on the deck of the ship. Isn’t it too early to say yet at this point whether the financial rescue succeeded?

Timothy Geithner

The Treasury secretary was largely responsible for directing the federal government’s response to the financial crisis. He’s still got his work cut out for him.

By Daniel Gross | NEWSWEEK
Published Dec 21, 2009
From the magazine issue dated Jan 4, 2010
…
So you don’t think the bailouts were too friendly to Wall Street?
The idea that the strategy was unfair and has principally benefited a small number of institutions in New York is a mischaracterization of the design and result of the strategy. I thought people would have understood this after the failure of Lehman Brothers. But when you do too little and you leave the system with real fear that everything is going to fall apart, like any financial crisis, it hurts the poorest most. A just and fair strategy, even if it is politically hardest to explain and justify, is to use well-designed but massive force to stabilize the system.

World’s Tallest Building to Open in Dubai ~ January 02, 2010
Fox News

Dubai is set to open the world’s tallest skyscraper Monday amid the Gulf emirate’s financial woes.

The Burj Dubai tower contains 57 lifts, 1,044 apartments, 49 floors of office space and a hotel.

It can be seen from as far as 59 miles away and is estimated to have cost one billion dollars.

While the exact height of the building is under wraps, Emaar, the firm that developed the property, says it exceeds 2,640 feet, putting it far higher than Taiwan’s Taipei 101 tower.

“We thought that it would be slightly taller than the existing tallest tower of Taipei 101. (Emaar) kept on asking us to go higher but we didn’t know how high we could go,” Bill Baker, a partner in Skidmore, Owings and Merrill (SOM), which designed the tower, told the AFP. “We were able to tune the building like we tune a music instrument. As we went higher and higher and higher, we discovered that by doing that process… we were able to reach heights much higher than we ever thought we could.”

Property prices in Dubai have dived over 50 percent over the past year and some believe the skyscrpaer will be the last of the giant projects that have brought global fame to Dubai.

New year, old worries for U.S. stocks.

NEW YORK (Reuters) - U.S. stocks closed out 2009 with the best performance in six years, but monthly employment figures in the first week of the new year will keep investors focused on what is likely to be 2010’s reality — the economy’s struggle to recover.

On the data front, the main event will be Friday’s report from the Labor Department on U.S. non-farm payrolls in December. Economists polled by Reuters have forecast that payrolls shed 20,000 jobs in the final month of 2009, compared with just 11,000 lost in November.

The Institute for Supply Management’s report on manufacturing, due on Monday, is expected to show the ailing sector was still slow to expand in December, while a projected drop in November pending home sales, due on Tuesday, will underscore the housing market’s shaky recovery.

Major factors in the stock market’s 2009 rally have been ultra-low interest rates and the Federal Reserve’s purchases of securities. A repeat of November’s much better-than-expected unemployment report could cause investors to worry that the Fed will increase borrowing costs sooner than previously thought.

Thomas Wilson, managing director of institutional investments at Brinker Capital in Berwyn, Pennsylvania, said the unwinding of the fiscal and monetary stimulus, possibly in the second half of 2010, will be a “delicate and deliberate process” that could ruffle markets.

Here is more from the “speech on the ship” interview with Secretary Geithner (I accidentally hit the “Add comment” button before I was through…):

There are other costs associated with these efforts, like the weak dollar and the Fed’s large balance sheet. Shouldn’t we be worried about them?
I don’t see that with the dollar. When fear was most acute, people wanted to be in Treasuries and hold dollars. Even today, when you have moments of darkness, people want dollars. The Fed’s balance sheet is larger because it understandably decided to run a monetary policy to break the recession. But there are other costs not captured by what we’ve discussed. The government will bear losses in AIG, the automobile companies, and in Fannie and Freddie. But the losses there will probably be lower than what people think, too.

The biggest downside surprise?
The [high] level of unemployment relative to what was happening in the economy as a whole. I’m not an economist, but almost all forecasters missed that. And that’s hugely consequential, because it’s the prism through which most people view basic economic health.
…

“Things are getting shaky abroad,”" observes the irascible curmudgeon Fred Reed. “America’s title of top dog has become questionable. While the US hemorrhages money in strange wars, China grows like kudzu. Economic power eventually, usually quickly, engenders diplomatic and military power. Signs abound. Japan talks about ejecting American forces, apparently not wanting to be used by Washington as a sepoy spearhead against a huge neighbor. The wind is blowing.

“I find it interesting to hear the BBC speaking casually of Japan as the world’s most technologically advanced nation, of China as ‘the world’s factory.’ It looks as if Asia will soon be dominant economically. The ‘war on terror’ pushes America toward bankruptcy and, when lost, will leave the Pentagon unable to pursue new adventures for, probably, a couple of decades. Another decade or so of war followed by a withdrawal will leave the United States impoverished, isolated, out of Islamic countries, and with its teeth pulled. Isn’t that what bin Laden or somebody said he wanted?” Reed concludes bin Laden and his henchfolk appear to be bringing the USA to its knees on a very meager budget.

“Barefoot and Panty Scanned”.

REAL ESTATE ~ LA. Times.
A foreclosure auction for the super-rich
The bids rise in $100,000 increments at this seven-bedroom, 11-bathroom Tarzana estate. ~ January 2, 2010

The bargain hunters jockey gingerly for a spot to park their luxury sedans and SUVs along Brewster Drive, a winding road in the hills of Tarzana.

It’s a woodsy neighborhood of large homes behind wrought-iron gates, and more than two dozen shoppers are here to bid for a piece of it.

Housing auctions are plentiful these days, including builders’ closeouts that lure hundreds of bidders to hotel ballrooms and public sales of foreclosures on the courthouse steps. But this time the steel-nerved speed-talkers at Kennedy Wilson Auction Group are unloading a palatial 13,500-square-foot bank-owned spec home that had been listed for $9.775 million just a year earlier.

“A one-off,” says Andrew Levant of the Beverly Hills auction house, meaning just that single property is on the block. The minimum bid at the noon event: $2.1 million for the seven-bedroom, 11-bathroom property.

“The typical auction we do — whether for a lender, developer or investors — is 20 to 60 units in a condo or patio homes project, not necessarily multimillion-dollar homes,” says Levant, who estimates that the cost to build the three-level Tuscan-style villa topped $7.5 million.

With a four-week marketing campaign and a budget of $25,000, Levant conducted eight open houses, plus some private showings, leading up to the auction on a recent Saturday. He says more than 250 people viewed the property, dubbed the Brewster Estate.

“There apparently are still lots of people interested in purchasing mansion-size homes,” says Levant, the firm’s senior managing director of business development. “They just don’t want to spend $10 million to $20 million for the privilege.”

More than an hour before auction time, the 29 registered participants begin signing in. They bring family, friends and real estate agents. They carry the requisite $25,000 cashier’s checks. A uniformed security guard keeps a low profile in the background.

If furloughs go, state workers fear layoffs could be next
Saturday, Jan. 2, 2010 - Page 1A

Tens of thousands of state workers began the new year Friday unsure whether to be happy about the prospect of a bigger paycheck in 2010 – or fear the prospect of a pink slip.

The uncertainty emanates from decisions handed down Thursday in three cases challenging Gov. Arnold Schwarzenegger’s decision last year to furlough about 200,000 state workers three days a month – tantamount to a 14 percent pay cut.

Alameda Superior Court Judge Frank Roesch ruled that the governor’s “emergency” actions, designed to help stem the state’s flood of budgetary red ink, were legally flawed, although he did not address the issue of reimbursing workers for lost wages.

While the rulings were hailed by leaders of state worker unions as a positive step to end the furloughs, they also expressed fear that if the courts ultimately decide the governor lacks the legal authority to furlough them, the alternative could be worse: massive layoffs.

Cleveland: Rookie cops losing jobs in 10 days

Sherrie Flores has finished making supper for her two children, Elizha and Sharia, and is getting ready for work. As she adjusts her blue Cleveland Police uniform, she looks over and says, “I can’t believe that I won’t be doing this anymore in ten days.”

Flores gave up her six-year career as a Cuyahoga County social services caseworker to become a Cleveland police officer.

On Oct. 30, she was sworn in for duty, along with her entire class after graduation from the Cleveland Police academy.

On Christmas Eve, the entire rookie class was given pink slips by the City of Cleveland. Their jobs are being wiped out in a sudden budget cut.

Sherrie tries not to show her anger and frustration but said, “To go through the entire process for six months, all the hard work and the Police Academy, and then to work for 2 months, only to be laid off. It’s not right.”

The Mayor’s office says the city budget is suddenly in the red. Mayor Frank Jackson said, “The police officers can keep their jobs. It just entails a sacrifice.”

The police union was offered two tough choices: agree to a pay cut or face layoffs. The union voted 899 to 25 against the pay concessions.

FMCSA orders Arrow Trucking to secure Trucks and Trailers and Loads
Truck Industry Examiner

The Federal Motor Carrier Safety Administration (FMCSA) issued an Emergency order to Arrow Trucking Company.

The Emergency order cited that there may be a potential threat to public safety for abandoned trucks, and trailers sitting in truck stops, or rest areas, anywhere the general public has access.

The order states that Arrow executives are to make sure the trucks and trailers (1,400 tractors and over 3,000 trailers) are in secure areas.

Trucks and trailers abandoned in a truck stop parking lot are not considered secure. Daimler, Kenworth and International are who owns the trucks, and were offering drivers an incentive to bring the trucks into a dealership. They are offering the drivers a bus ticket, or $200.00 for travel. Rumors are that it takes up to 72 hours to get the incentives. So, if drivers were able to, they were getting fuel and just trying to get home, by any means whatsoever.

The emergency order states that Arrow management and officers are ordered to direct Arrow employees or other responsible and qualified operators to drive Arrow’s CMV’s to the appropriate facilities for the safe and orderly transfer of responsibility and control over the vehicles. If qualified drivers are not available or driving is not an option, then Arrow is ordered to have the vehicles towed to a safe and secure place and arrange for transfer of responsibility of the vehicles.

Will the Euro Become the Most Hated
Currency for 2010? ~ Bryan Rich ~ Weiss Research

For the better part of 2009 the U.S. dollar was the world’s most hated currency. But it’s looking increasingly likely the tables could turn in 2010. And the euro could take over that unenviable title.

In recent weeks we’ve seen a surge in scrutiny over sovereign debt. First, it was announced that Dubai would be “restructuring” its debt (i.e. default). And then the focus quickly turned toward the Eurozone’s weakest link — namely Greece.

This type of scrutiny can snowball quickly. Now other weak spots in the Eurozone, such as Spain, Italy, Ireland and Portugal are getting more attention. All of these countries are running massive budget deficits, many have huge debt burdens and all have muted prospects for growth.

That’s a recipe of trouble. Consequently, yields on government bonds in these countries have surged in recent weeks, reflecting the rising uncertainty surrounding their ability to meet debt obligations.

Weak spots could threaten the Eurozone’s stability.
Investors are concerned about a spillover of debt defaults that could escalate into in a sovereign debt crisis. That is, debt defaults that spread throughout emerging market countries, perhaps even the industrialized world.

These problems aren’t new. And they’re occurring in the same European countries that have been vulnerable from the outset of the global financial crisis.

But the attention for much of 2009 has been squarely on the U.S. And because of that, these weak countries have gotten a free pass for quite a while.

Flaws of the Euro …

Countries that have joined the euro currency have unique challenges when economic times are tough. And we’ll likely find that the range of problems within the Eurozone will present a major threat to the euro’s lifespan.

The monetary union in Europe consists of a common currency and a common monetary policy. But fiscal policy is determined by each individual country. And to patrol those fiscal decisions, the European Union established its Growth and Stability Pact that, among other things, sets two criteria for member countries:

1) Deficit spending by its member countries cannot exceed three percent of GDP, and

2) Total government debt cannot exceed 60 percent of GDP.

For those who advise moving to No Dak for a job and cheap housing…. it is now -33 degress below zero, with a 4 mile breeze.

From NYT, very interesting pictures too. It’s like living in a coffin. I wonder if Americans will ever put up with such a living arrangement?

For Some in Japan, Home Is a Tiny Plastic Bunk

TOKYO — For Atsushi Nakanishi, jobless since Christmas, home is a cubicle barely bigger than a coffin — one of dozens of berths stacked two units high in one of central Tokyo’s decrepit “capsule” hotels.

“It’s just a place to crawl into and sleep,” he said, rolling his neck and stroking his black suit — one of just two he owns after discarding the rest of his wardrobe for lack of space. “You get used to it.”

When Capsule Hotel Shinjuku 510 opened nearly two decades ago, Japan was just beginning to pull back from its bubble economy, and the hotel’s tiny plastic cubicles offered a night’s refuge to salarymen who had missed the last train home.

Now, Hotel Shinjuku 510’s capsules, no larger than 6 1/2 feet long by 5 feet wide, and not tall enough to stand up in, have become an affordable option for some people with nowhere else to go as Japan endures its worst recession since World War II.

Once-booming exporters laid off workers en masse in 2009 as the global economic crisis pushed down demand. Many of the newly unemployed, forced from their company-sponsored housing or unable to make rent, have become homeless.

NY Times front page story today: “U.S. Loan Effort Is Seen as Adding to Housing Woes” was very interesting. Finally, the administration and the media are starting to raise the points many of us made here two years ago.

They even advanced the notion that we may have been better off if we simply let everyone who got a mortgage they couldn’t possibly pay back default quickly, without prolonging the process.

Picked up a copy of the local fish wrap (aka Rancho Bernardo News Journal) after my Sat a.m. racquetball game today. Here are the opening paragraphs of two front-page articles:

Homes, businesses coming to 4S Ranch
By Elizabeth Marie Himchak
December 30, 2009

Two new neighborhoods, a county park and grocery store are among changes 4S Ranch residents can expect to see in 2010.

California West Communities will soon begin offering homes in Andalusia and Monteluz, two neighborhoods in the northern part of 4S Ranch. Both are accessible via 4S Ranch Parkway and Alva Road.

These are the first new homes to come onto the market in 4S Ranch for a couple of years. Andalusia will have 94 homes and Monteluz, 63 homes.

Mike Rust, vice president of Newland Communities, which developed 4S Ranch, said now that California West is putting these lots on the market, there will be only 131 lots available in the future. These are adjacent to the two neighborhoods and Newland is looking for a builder to start developing them later in 2010.

What makes Andalusia and Monteluz different from most neighborhoods is the availability of some one-story houses, which Rust said should be particularly popular among older homebuyers.

Besides a few custom homes on large lots in Woodbridge built as single-story homes, Rust said the last time a single-story model became available was 2003-2004, when Standard Pacific built some.
“The single story sold very fast and was very well-received,” Rust said.

Building a single-story model is possible in these neighborhoods because of larger lot sizes Newland created when the entire community was designed in 2001.

California West has not yet announced a starting sales price, but that should be available by Andalusia and Monteluz’s grand openings on Jan. 30.

Rust said Newland started developing 4S Ranch in 1993, and the community should be built out within a couple more years. Homes first became available in 2001 and 4S Ranch has grown at a slightly faster rate than Newland expected.

“I think 15 years was reasonable to expect, but we’ll have that beat by a couple of years,” Rust said, explaining the community’s location, schools and close proximity to Interstate 15 and employment centers in Rancho Bernardo and Sorrento Mesa were factors.

“It’s a highly desirable location,” Rust said.
…
——————————————————————————-
City’s financial troubles to impact RB in 2010
By Elizabeth Marie Himchak
December 29, 2009

In 2010, Rancho Bernardans will be faced with adapting to a tighter city budget while maintaining the community’s aesthetics as Rancho Bernardo moves closer to its half-century mark.

Maintaining and improving infrastructure are among challenges facing Rancho Bernardo as the mayor and City Council work on finding long-term solutions to the city’s budget problems, said Councilman Carl DeMaio.

“The state is threatening infrastructure money on a lot of projects,” DeMaio said.

The good and the bad of the housing bust

Bucks County Courier Times (PA)

From Y2K to H1N1 - Less construction meant less revenue for municipalities and school districts. Lower prices gave open space preservationists a boost.

At the height of the construction boom 10 years ago, developers were planning to build as many as 7,300 homes in just one year in Bucks County. In 2008, the number plummeted to about 800 - the lowest number in four decades.

And the forecast does not look good.

www dot phillyburbs.com/news/local/courier_times/courier_times_news_details/article/28/2010/january/01/the-good-and-the-bad-of-the-housing-bust-1.html

1. At New Year Eve party. One couple is starting to buy sub $40k short sale row houses in Baltimore…will put in $10k each and then get Section 8 renters…good luck with that.

2. At New Year party. One couple, 10 years ago, had bought a one week island time share for $5k. Their yearly HOA (for one week) is $800. However so many people are not paying the $800 that management is taking back the weeks, and then letting existing weekly owners get extra weeks for the HOA fee of $800. This couple purchased an extra week. The couple said that a week “purchase” right now would be about $9k. I did not want to stir up the festivities by asking why the HOA defaulting “owners” didn’t then sell their weeks use, instead of abandoning the time share for just $800. Prehaps there is no market/financing??

Ginormous Rat in garage + Wine + BB gun = potential loss of security deposit

The Safety Net
Living on Nothing but Food Stamps

By JASON DEPARLE and ROBERT M. GEBELOFF
Published: January 2, 2010

Ms. Bermudez, by contrast, tells what until the recession seemed a storybook tale. Raised in the Bronx by a drug-addicted mother, she landed a clerical job at a Manhattan real estate firm and heard that Fort Myers was booming. On a quick scouting trip in 2002, she got a mortgage on easy terms for a $120,000 home with three bedrooms and a two-car garage. The developer called the floor plan Camelot.

With millions of jobs lost and major industries on the ropes, America’s array of government aid — including unemployment insurance, food stamps and cash welfare — is being tested as never before. This series examines how the safety net is holding up under the worst economic crisis in decades.

“I screamed, I cried,” she said. “I took so much pride in that house.”

Jobs were as plentiful as credit. Working for two large builders, she quickly moved from clerical jobs to sales and bought an investment home. Her income soared to $180,000, and she kept the pay stubs to prove it. By the time the glut set in and she lost her job, the teaser rates on her mortgages had expired and her monthly payments soared.

She landed a few short-lived jobs as the industry imploded, exhausted her unemployment insurance and spent all her savings. But without steady work in nearly three years, she could not stay afloat. In January, the bank foreclosed on Camelot.

One morning as the eviction deadline approached, Ms. Bermudez woke up without enough food to get through the day. She got emergency supplies at a food pantry for her daughters, Tiffany, now 17, and Ashley, 4, and signed up for food stamps. “My mother lived off the government,” she said. “It wasn’t something as a proud working woman I wanted to do.”

For most of the year, she did have a $600 government check to help her care for Ashley, who has a developmental disability. But she lost it after she was hospitalized and missed an appointment to verify the child’s continued eligibility. While she is trying to get it restored, her sole income now is $320 in food stamps.

Ms. Bermudez recently answered the door in her best business clothes and handed a reporter her résumé, which she distributes by the ream. It notes she was once a “million-dollar producer” and “deals well with the unexpected.”

“I went from making $180,000 to relying on food stamps,” she said. “Without that government program, I wouldn’t be able to feed my children.”

http://www.nytimes.com/2010/01/03/us/03foodstamps.html?hp