Bits Bucket For January 7, 2010
Post off-topic ideas, links and Craigslist finds here.
Click here to find Jonathan Miller’s Housing Helix podcast about the HBB.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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BTW, I think the podcast is best heard through Internet Explorer.
Welcome to “Ground Zero”
Very astute remarks about people’s disdain for paradigm challenges, Ben…
UOP said the recession is over folks!!!It is official.Get out there and spend some money.
Most amazing aspect of paradigm shift resistance:
The extraordinary ongoing measures the PTB are undertaking, both in front of and behind the scenes, in their collectively futile attempt to sustain the housing bubble mania.
I hope I don’t need to provide examples to make my point; anyone who does not get it needs to read here more often, as we illustrate this principle every day with our routine posts.
YO YO YO, word up folks..sorry, I don’t know where that came from-sheesh. Anyway, friend is trying to cut a deal for a Rav 4.
Got any suggestions- since she wants to sprinkle her $ into the economy. Didn’t Toyota just post abysmal stats on their sales?
Any suggestions for her before she cuts a deal?
Her 1st car for herself in 31 yrs. Now that is a record, in my book.
“Her 1st car for herself in 31 yrs. Now that is a record, in my book.”
As the proud (joint) owner of two late-model Japanese cars, free and clear, I can say there has never been a better time to buy (a new automobile, that is…).
And Japanese autos make a very good inflation hedge investment: As long as you don’t crash them or fail to maintain them, they run forever, they have a high resale value, and if helicopter drops bury us in dollars, the nominal price of Japanese automobiles may actually increase over time!
Luckily, after the expiration of Cash4Clunkers, there are no more ‘affordable automobile’ programs in force to artificially inflate prices, at least so far as I am aware…
nominal price of Japanese automobiles may actually increase over time!
PB. Agreed, completely. Got any suggestions to get a good deal? Not full price?
“Got any suggestions to get a good deal?”
1) Find out what the dealer’s real bottom line is (i.e., what is the minimum cash offer for which they would sell you the car if they knew you were not in a hurry to buy and would walk out the door immediately on a whim if they tried to ask a penny more).
2) Let the dealer first indicate the price they would sell for if you financed through them. Work off this figure when negotiating a cash offer (presumably a dealer will ask a lower purchase price if they expect to make it up with scam financing).
3) Make your cash offer, along with a clear indication that it is take-it-or-leave-it.
4) Look up all the other dealers in your area selling the same make/model car that interests you, and be prepared to visit as many as necessary to get the deal you want.
5) Consider buying online.
Any questions?
P.S. We bought in Spring 2008; I have never previously worked with a car salesperson who seemed so delighted to have our business.
I just bought an 05 Mustang GT. Great buying experience. And I am having ALOT of fun with this car.
Never pay full price. I had the guy so mad at how much I talked him down on my Japanese car he was having a hissy fit in the back room when I didn’t take the undercoating. He was throwing things across the room. That was when they were selling. Play to fact they think women are stupid. It helps them not notice what you’re doing. (You’d think when my DH just sat back and watched that might have been their fitst clue I’d done this before)
Start with hitting the web to research what they’re invoice price is. There are websites that will give you wholesale prices on each option/package. Negotiate up giving them a certain percentage up from there. I felt several thousand on a large vehicle was good for them. That was a few years back but the web sites should be able to give you an idea of what’s an agreeable percentage now. Do not pay stupid add on fees ie advertising. Research bank rates for auto loans before going. Know the ceiling of what you want to pay because you don’t want to tell them you’re financing till the last minute. Take cars on the lot. Do not have them hunt for that special color you really want. And of course, play them against each other. They’re hungry.
Good luck!
edmunds.com is a start for car prices then call the dealer and ask for the on-line fleet sales dept
Here’s a tip on buying a “Japanese” car such as the Rav4. It’s made in the USA, not Japan, and being the owner of a 2007 Toyota made in the USA I can attest to the fact that the quality is not the same.
Small Japanese SUV made in Japan: Suzuki Grand Vitara is the only one I know.
Good luck!
Cool tips guys. Love my HBB!
“The Perot’s land…”
They seem to understand a basic principle of real estate investing:
Buy low, sell high.
Reminds me of investment advice in IBD, where the mantra is to buy high and sell higher.
Which may work, until it doesn’t.
Hey, that doesn’t look like “The Flag” in the background Mr. Ben!
No, that’s South Padre Island in Texas. I lived there for about 5 years.
I’ve fished there a number of times with my Texas buddies.
Where were you at Ben, Port Mansfield?
No, I was on SPI proper. PM is farther north. It is good fishing down there.
Nice interview Ben…
Yeah, very good interview. I liked the relaxed, conversational style.
Your (appraiser) interviewer hints at a big story that remains to be told:
That of how a real estate mania disenfranchises those who chose to play by the rules or otherwise refuse to participate, and greatly empowers those most eager to participate in fraud or to serve themselves up as the greater fools…
The fact that state and federal governments are working like mad behind the scenes to keep the unlevel playing field tilted in favor of fraudsters and fools is a clear indication the bubble is not yet fully deflated.
Richards continues push to ban drug dealers from mortgage field
By Cary Spivak of the Journal Sentinel
Posted: Jan. 6, 2010
Madison — Citing two convicted cocaine traffickers turned mortgage brokers, state Rep. Jon Richards on Wednesday continued his push for a lifetime ban to prevent known drug dealers from entering the mortgage field.
In a brief hearing before the Assembly Committee on Consumer Protection, the Milwaukee Democrat said that recently enacted restrictions preventing some criminals from becoming mortgage brokers do not go far enough. Richards noted that state regulators have repeatedly said they were unsure whether drug dealers should be banned from the profession…
Richards proposed his bill last year after the Journal Sentinel reported that more that 340 criminals, including burglars, drug dealers, thieves, an armed robber and a killer had mortgage brokers licenses in 2008.
Among the ex-cons to get licenses were Michael Lock and Billy Joe Cannon.
Lock, who is serving life for two murders, is awaiting sentencing on a $2 million mortgage fraud scheme he masterminded. Authorities have seized records on mortgages Cannon wrote as part of an unrelated criminal investigation.
“Hey Man, we were just selling a little Kool-Aid and moving a little Pot between doing those felonies and writing those mortgages.”
“We were on a break…we were ON A PERSONAL FREAKIN’ BREAK when all that nasty mortgage fraud stuff happened!!”
http://tinyurl.com/yeuxkl4
mikey,
Nice!!! Yeah, just to make a distinction, these guys weren’t your typical Boiler Room type guys doing a little blow in the parking lot. They were dealers, -convicted- dealers.
Good for Jon Richards, keep it up!
Yeah, just to make a distinction, these guys weren’t your typical Boiler Room type guys doing a little blow in the parking lot.
For sure DinOR, some of these guys were actually enrolled full-time in the University of Wisconsin’s Prison System or were on work-release programs while attending night school at the Milwaukee House of Corrections College while running their Mortgage Scams.
mikey,
In no way to pee on WI’s parade ( this is a pretty common occurence from coast to coast ) Any time you leave the door that wide open ( and given the magnitude of the dollars involved ) what are we supposed to expect?
Wow PB…1st you scare me with your math equations and now you tell me this.
Gheez…I live in a small town outside Milwaukee and I thought it was different here.
My hubby worked with some lowlifes when he was a warehouseman, and they all drifted over the mortgage industry too. I didn’t understand it at the time..
Even if you accept the (highly dubious) proposition that snorting cocaine is a “crime” that the government needs to punish, you still have to realize that cocaine traffickers are, at most, accomplices to this “crime”.
Now it is a well-established principle of the common law that an accomplice does not commit a greater offense, and so cannot suffer a greater punishment, than the principal actor. So if drug users are not being locked up, banned from certain occupations, and so on, it makes no sense to punish the dealers in these ways.
You must not have met many, if any coke heads. More useless people would be hard to find. Except for maybe meth heads.
I’m not a fan of drug dealers or mortgage brokers.
With that said, no one should be preventing the former from becoming the latter. Am I the only one who feels this way?
With that said, no one should be preventing the former from becoming the latter. Am I the only one who feels this way?
No, you’re not. I agree with you.
There’s a reason many ex-cons should not have certain privileges. Not handling large sums of other peoples money and owning guns make perfect sense to me.
ex-cons should not have certain privileges
I ask myself, then what does “paid their debt to society” really mean?
Can it never be paid?
I struggle with this question.
What’s so special about drug dealers compared to other felons? The fact that they committed a crime that shouldn’t be a crime? If being an MB is indeed a ‘privilege’, then ban all felons from it, not just the victims of our modern day witch hunts.
I have an old friend from high school who went from being an FBI-busted (plead out) sports bookie to a mortgage broker (naturally!). After banking on the subprime sales, he now negotiates workouts and refinances - for a big fee.
He often posts Facebook updates that say “Another day of helping people out!”. Foul.
Left LA,
And that is exactly the very things we should have been furiously trying to prevent! Incredible how REIC’sters just morph into the next logical vile organism?
Like former NAR/Cheerleaders now working the pocket short sales and FC’s.
Perhaps what we ’should’ be doing is making NAR/MBA membership part of a “work release program” in attempt to convert cons ( not vice versa? )
“I have an old friend from high school who went from being an FBI-busted (plead out) sports bookie to a mortgage broker (naturally!).”
Too funny! Straight from brokering one kind of gambling (illegal), to brokering another kind of gambling (legal)!
It also is proof that our nation is basically doomed. When the entire economic goal is to encourage fraud and debt-slavery, how can there be any real progress?
Well, look at it this way, the US buys opium from Turkey for our pharmaceutical corps. The US is fighting in Afghanistan against the AQ that make the people grow poppy crops. Um, why don’t we just buy those crops too. Disenfranchise the AQ from the people of A. And another thing..our laws put users, addicts into prison, seldom do the real heads of trafficking get put into prison- the US gov etc.Mostly just the users/addicts.
DD,
I simply don’t know of any instances where major dealers die of natural causes. Not quite as ‘tidy’ as you’re perhaps making it out.
Not quite as ‘tidy’ as you’re perhaps making it out.
Well, not as tidy, but it is there. You can’t deny that. Trying for fewer words.
It should be viewable on any browser, not just Internet Exploder. But, be that as it may, I was able to hear the audio via the latest version of Firefox.
When I’m referring to “it,” I mean the Housing Helix podcast interview with Our Fearless Leader. Good interview, Ben!
Great interview, Ben! I picked up this blog in 2007 IIRC, so it was interesting to hear how it all got started. Also interesting that only 5% of the readers actually post comments.
Wow… does that mean I’m one in a twenty?
Ben,
That was a very good interview. There should be a prominent link to that interview on the blog as an excellent history and background on the HBB.
Ben
I completely agree that the reason I searched out, found and visited your site was due to the ridicule from friends and family regarding the craziness of the market prices of housing.
Are you going to plan another get together life the Vegas event?
I say we have one further south. Tucson, anyone?
The next one planned for sure is DC in June. But I’m open to anything. I’ve never been to NY and would enjoy that.
When and where (beyond the obvious) is the June DC meet-up?
Not yet decided, but open for suggestions.
DC might be interesting. I could coincide this with a week in Rehoboth Beach, DE. We could do a day trip to Sussex County, DE to witness the depths of speculative depravity there.
Dogfish head baby!
My ‘raisin d’etre’…Meet ya at the tap!
In Milton of course! One of the nicer hamlets in Sussex. My colleague who is a home brewer always made it a point to take lunch there every time he came down from NY for a project meeting.
I look forward to DC or NY … please let me know if I could assist you in organizing the event.
Wave of Bankruptcies Hits States Hammered by Housing Bust ~ WSJ
Personal bankruptcies soared last year in Western states hit hardest by the real-estate bust.
In states such as California, Arizona and Nevada, where housing prices soared and then collapsed during the past decade, consumer bankruptcy filings rose roughly twice as much as the national average increase of 32%. Homeowners fell behind on mortgages and could no longer tap into their home equity to pay down other debts.
“There’s a close relationship between high levels of household debt, including mortgage debt, and bankruptcy filings,” said Samuel J. Gerdano, executive director of the American Bankruptcy Institute, a research organization made up of attorneys, accountants and other bankruptcy professionals. “That…has been exacerbated by the bursting of the housing bubble.”
In Arizona and Nevada, where bankruptcies increased most, filings skyrocketed by 79.6% and 59.5%, respectively. Nearly 6.2% of mortgages in Arizona and 9.4% of mortgages in Nevada were in foreclosure by the end of the third quarter of 2009, according to the Mortgage Bankers Association.
California saw personal bankruptcy filings rise 58.8% last year. At the end of the third quarter, some 5.8% of loans were in foreclosure there.
Not everyone who goes through foreclosure ends up in bankruptcy and not every bankruptcy is driven by foreclosure. Some states with relatively few foreclosures, such as Utah and Wyoming, had larger increases in personal bankruptcies than Florida, the scene of lots of foreclosures.
Personal bankruptcies soared last year in Western states hit hardest by the real-estate bust.
Thank goodness they got that bankruptcy reform legislation in place just in time!
Yep, the banksters get tarp and the average joe can no longer file chapter 7 if they make more than the median for their state.
“There’s a close relationship between high levels of household debt, including mortgage debt, and bankruptcy filings,”—Ya think?
Give credit where credit is due. This journalist did get the facts right!
CIB Marine finishes reorganization
By Don Walker of the Journal Sentinel
Posted: Jan. 6, 2010
CIB Marine Bancshares, Inc. (CIBH) announced Wednesday that it has finished its financial restructuring and has emerged from its pre-packaged plan of reorganization under federal bankruptcy laws.
“We have successfully completed our reorganization, and we have emerged as a much stronger bank holding company,” said John Hickey, Jr., chairman and CEO of CIB Marine Bancshares, Inc. “We have significantly reduced our future interest obligations, improved our capital position, and added approximately $106 million to our consolidated shareholder equity. The restructuring positions us to pursue our previously-announced capital plan free of the significant debt we incurred in conjunction with the trust preferred securities offerings.
CIB Marine Bancshares is the parent holding company of CIBM Bank, an Illinois chartered commercial bank that operates as Central Illinois Bank in mid-state Illinois and as Marine Bank in the Milwaukee area, Indianapolis and Scottsdale, Ariz. The bank and its branches were not a part of the Chapter 11 bankruptcy reorganization.
( I met and did lunch with Mr John Hinkey about 4 years ago while he gave a speech about the fiscal status of Marine Bank at a Christmas Party. He’s a very nice, charismic man. Never the less, he attempted to tap dance around my questions about the Illinois Holding Co and three days later, I moved my cash out of his bank. Regardless of FDIC, if he and his bankster people can’t be trusted safely manage my money and answer questions, I sure as hell can TRY to someone who can.)
http://tinyurl.com/y89wkh3
There has never been a better time to rent!
Rent now, or get priced in forever!!
Don’t throw your money away on a money-losing real estate investment!!!
* The Wall Street Journal
* JANUARY 7, 2010
U.S. Now a Renters’ Market
With Apartment-Vacancy Rate at 30-Year High, Landlords Cut Prices 3% in 2009
By NICK TIMIRAOS
Apartment vacancies hit a 30-year high in the fourth quarter, and rents fell as landlords scrambled to retain existing tenants and attract new ones.
The vacancy rate ended the year at 8%, the highest level since Reis Inc., a New York research firm that tracks vacancies and rents in the top 79 U.S. markets, began its tally in 1980.
Rents fell 3% last year, according to Reis, led by declines in San Jose, Calif., Seattle, San Francisco and other cities that had brisk growth until the recession.
In New York City, the vacancy rate improved by 0.1 percentage point for the second straight quarter, but around 60% of rental buildings dropped their rents in the fourth quarter from the previous quarter. Effective rents — which include concessions such as one month of free rent — fell 5.6% in New York last year, the worst since Reis began tracking the data in 1990.
Landlords now must entice tenants to renew leases. “We’ll shampoo their carpets. We’ll paint accent walls. We’ll add Starbucks cards,” said Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate investment trust that owns 63,000 units. He said the first half of 2010 should be “pretty ugly,” but was optimistic the sector would pick up later in the year.
Few markets have been spared. During the fourth quarter, vacancies increased in 52 markets, while they improved in 17 and stayed flat in 10. Vacancies increased most sharply for the year in Tucson, Ariz.; Charlotte, N.C.; and Lexington, Ky.
Vacancies are tied to unemployment, because many would-be renters move in with family members or double up during a downturn. Apartments have been squeezed because younger workers, who are more likely to rent, have experienced the brunt of job losses during the downturn.
Landlords were also hit last year by competition from a wave of new supply that hit the market. The 120,000 units that came onto the market last year, including some busted condo projects that had to be converted to rentals, represented the most new construction since 2003, according to Reis.
…
Another good call by HBBr’s and another wrong call by the industry shills.
The industry types said the rental market would tighten due to those in foreclosure moving into rentals, pushing rents higher. HBBr’s emphasized the supply increase and recessionary effects of people doubling up, reducing demand.
And then there was Robert Toll, who suggested renters would have to move back in with their parents. I am wondering how many former homeowners, now foreclosed and unemployed, have moved back in with Mom and Dad?
I noticed you didn’t put “homeowners” in quotes
recessionary effects of people doubling up ??
That is exactly what is happening…Vacancy rates for one bedrooms is even higher…
When I lived in Pittsburgh during that town’s Second Great Depression (the 1980s), the double-up phenomenom became so prevalent that a consortium of churches began to facilitate it. They formed a group called Wilkinsburg Interfaith Shared Housing. I lived in a WISH house and had some great fellow roomies while I was there.
— fell 5.6% in New York last year, the WORST since Reis began tracking the data in 1990.
Falling costs for consumers are “worst,” huh. I guess we know who THEY’RE working for.
Funny how that works. When gas prices fall, no one says “they’ve at the worst level in N months/years”.
Indeed! Why is it high prices in everything BUT housing is considered bad, but overpriced housing that destroys entire economics systems is “good?”
Amazing how our whole eCONomy is based upon keeping real estate unaffordable while “slashing costs” - getting rid of workers - elsewhere. If we can just cut costs to 0 by firing everyone and have real estate prices increase 50% per year, forever, we’ll achieve the new Amerikan Dream?!
Well people also have the similar idea that higher stock prices are “good.” But just like houses, every dollar rise in stock prices is a dollar FROM the purchasers TO the sellers. The price is what you pay to secure the rights to future dividends.
Great comment, PTM.
Maybe not gas prices, but on yesterday’s NPR Marketplace program, the host referred to oil prices’ recent “winning streak.”
Good catch, and I suspect you are on to the more general reason the MSM always assumes rising asset prices are “good” and falling asset prices are “bad”: PEOPLE WHO OWN NEWSPAPERS ALSO OWN LOTSA FALLING KNIVES.
Most people who own newspapers are akin to homeowners in Detroit.
But eddie said rents were rising???
Good contrarian indicator there…
… of what really is happening, that is
Late yesterday I posted that I just learned, girlfriend and H, got their rent reduced over 300$ from 1650 t0 1300 and LL said they can stay till he grows old- 20 yrs. So she scored better than I did.
HBB encouragement led to diligent research on our parts, lots of CL viewings, actual ‘look sees’ and knowing what is out there, who is willing to negotiate, and then because you are already ‘IN PLACE’ the LL is lots more willing to negotiate a substantial reduction.
YEA YEA HBB and BEN!
Now that’s more like it.
HBB encouragement led to diligent research on our parts, lots of CL viewings, actual ‘look sees’ and knowing what is out there, who is willing to negotiate, and then because you are already ‘IN PLACE’ the LL is lots more willing to negotiate a substantial reduction.
Nice!
3%? 5%? Well hold me back! It’s time to party like it’s 1999!
Whoop. Dee. Do.
I am enjoying the benefit of lower rent in San Jose this year, though I did have to move in order to get it. But I’m not even upper working class, as defined by the mayor:
San Jose, Calif., Mayor Chuck Reed calls a family living in Silicon Valley earning $250,000 “upper working class.” That is about what two engineers working at a technology firm can expect to make, but “a family earning $250,000 a year can’t buy a home in Silicon Valley,” he said.
[Link omitted because my posts never show up if I include one, but the quote is from the April 16, 2009 WSJ.]
“We have dug ourselves a deep, deep hole of debt and obligation. We all know it, even the politicians know it. Yet instead of trying to fill it back up, we just keep on digging in the insane belief that the very act of digging will fill in the hole! Our actual debt owed is now about equal to our entire Gross Domestic Product and everyone in Washington is expecting it to double in the next decade, which means it will probably triple. That is impossible enough. On top of that there are the liabilities under Social Security, Medicare and Medicaid which are ten times that debt”.
“There are only two ways out. One, Washington stops spending on anything but the essentials, the constitutionally authorized powers, and phases out its support of the welfare state, all of it. We all know that is not going to happen. Too many special interests and dependent voters ensure the workman will keep digging until he collapses and dies in the hole. The only other way out is to purposely inflate the currency to reduce the debt, destroying our economy and buying power and leading to the emergency that this administration is waiting for. Their reaction to it, if it happens under their watch, is perhaps even more frightening than empty shelves at Wal Mart. It is time to opt out of this insanity and its consequences. We and our children should not have to suffer the effects of this incomprehensible irresponsibility”.
http://www.patricksamuels.com
Hair-of-the-dog Keynesian remedy:
If your economy is faces a black hole of unrepayable debt, just keep digging deeper until the situation improves!
isSorry for the editorial glitch…
There is daylight if you dig deep enough.
Right — and at that point, you will find yourself in another real estate bubble (the Chinese variety)…
I always thought it would be to Australia.
SF BAG - To further your thought - this assumes that one digs in a straight path through the center of the earth mainly from the west coast of USA … there are many other paths
maldonash,
I like your thinking
There is daylight if you dig deep enough.
As long as you can withstand heat of 10,000 degrees, and 3 million atmospheres of pressure.
“…3 million atmospheres of pressure.”
Now in an era of trillions, 3 million atmospheres sounds quite manageable.
LOL. It shouldn’t be a problem, since the pressure and temperature have actually gone down a lot as a percentage of world GDP. Eventually a good backhoe will do. Imagine how much we can save in shipping and transportation costs!
Didn’t Al Gore say that the temperature of the earths core was 1,000,000 degrees? He’s credible.
This is all pretty funny to me as just the other day I was thinking, what would be the perfect movie to spoof for what we’re currently confronting? All I could come up w/ is “The Core” w/ Hillary Swank.
All the stuff about “hot” in the center of the earth has been disproved.
Just watch Journey to the Center of the Earth.
I use the same logic at the roulette table. Just keep doubling my bet, until it comes up black…..
…and a rut is a grave…with the ends kicked out.
Well, there’s really no surprise that a governement democraticly elected by a populace as willing to borrow their way to the poor house as we are in the U.S. is also trying to live beyond it’s means.
The SOURCE is corporate, business school techniques. Whatever is good for the stockholders, skroo the majority of who they are trying to sell/market to.
Ok, I hate to be the one to say this, but the US debt and entitlement obligations needed to be solved in the 1980’s when they could be solved. Now, the debt obligation is so large that is cannot really be “fixed” without a huge amount of pain and suffering - and maybe not even then.
So, the only course of action is to move even further in. The idea is this, “When you can’t back out, move further in.” That is the course of action that is currently being followed.
I’m concerned about Social Security in that we must reduce the overall obligation by raising the retirement age and reducing benefits. Not to popular but can be done.
I’m certain that Medicare/Medicaid is toast and can’t be fixed. The obligation is just too large. Look through the article from the Center on Budget and Policy Priorities. URL is below.
http://www.cbpp.org/cms/?fa=view&id=1003
NOw, if we could just get the health reform that we need. Did the recent legislation passed in Congress do that? IDK.
Roidy
‘Needed to be solved in the 1980’s when they could be solved’, eh?
Too bad we discovered the magik of ‘voodoo’ economics right around that time, quite coincidentally!
Thanx again for saving us from reality, St. Ronnie! It’s worked out so well.
“Their reaction to it, if it happens under their watch, is perhaps even more frightening than empty shelves at Wal Mart.”
Keep this in mind.
They know full well how this will end. Infinite power and wealth for them, and poverty and 3rd world living standards for us. That was the goal all along; kill the middle class to achieve that sadist’s dream of a nation of 99% utterly poor and 1% absurdly rich.
That was the goal all along; kill the middle class to achieve that sadist’s dream of a nation of 99% utterly poor and 1% absurdly rich.
+1
It’s a little more complicated than that, but yes, the result is the same.
Unfortunately, I totally agree with your post, PTM.
The Day of Reckoning seems to be extending into Years of Reckoning in former bubble zones:
* The Wall Street Journal
* JANUARY 7, 2010
Wave of Bankruptcies Hits States Hammered by Housing Bust
By SARA MURRAY
Personal bankruptcies soared last year in Western states hit hardest by the real-estate bust.
In states such as California, Arizona and Nevada, where housing prices soared and then collapsed during the past decade, consumer bankruptcy filings rose roughly twice as much as the national average increase of 32%. Homeowners fell behind on mortgages and could no longer tap into their home equity to pay down other debts.
“There’s a close relationship between high levels of household debt, including mortgage debt, and bankruptcy filings,” said Samuel J. Gerdano, executive director of the American Bankruptcy Institute, a research organization made up of attorneys, accountants and other bankruptcy professionals. “That…has been exacerbated by the bursting of the housing bubble.”
In Arizona and Nevada, where bankruptcies increased most, filings skyrocketed by 79.6% and 59.5%, respectively. Nearly 6.2% of mortgages in Arizona and 9.4% of mortgages in Nevada were in foreclosure by the end of the third quarter of 2009, according to the Mortgage Bankers Association.
California saw personal bankruptcy filings rise 58.8% last year. At the end of the third quarter, some 5.8% of loans were in foreclosure there.
…
“could no longer tap into their home equity to pay down other debts”
Talked briefly w/ an MBA here just outside of Portland that said it became a very common practice for even CPA’s to advocate that homedebtors borrow against their home to purchase vehicles as the int. would ‘now’ be tax deductible.
Now damn it, I can see fly by night, newly minted MB’s doling out the kind of ‘advice’ but coming from CPA’s!? Anyone else encounter 30 yr. car payments?
Well, since most people are going be driving their cars for 30 years now, it almost makes sense.
In Colorado,
LOL. Yeah I’m sure that wasn’t exactly the original plan? I imagine most visualized they’d be getting new vehicles w/ every re-fi ( so like they’d be getting new ones at least every other year )
I was just aghast that CPA’s would be peddling the debt=wealth mantra.
DinOr,
I remember the one and only time I refinanced a former home (went from a 30 year note to a 15 year note with a better rate, no cash out) the broker asked me if I wanted to roll my car note into the new loan. My immediate reply was “Why would I want to make payments on a car for 15 years? That car will be in a scrap heap by then.”
I bet a lot of people take the bait though.
Not all CPA’s, just as any profession, ours has its idiots.
LOL. Yes I was asked to roll my car note into a refi, also. I refi’ed and went from 30 yr @8% to 15yr@5.4% with no cash out, no car loan, no new motorcycle, and no fancy European vacation. The idiot who was working on my paperwork at Wash. Mut. thought I had lost my mind. He seemed offended.
Roidy
Note: I sold that house in mid ‘06 for double what I paid for it in ‘00. It was close to being paid off when I did sell.
poormancometh,
I’m just surprised it came from ‘any’ CPA? But I suppose given the musical chairs ( read houses ) mentality of the time, it would have been someone ‘else’ that would have been paying off that car loan anyway.
I remember that advice in the media, for sure. That was the *smart* thing to do, even back in the 80s. Also, borrow student loan money to the hilt and invest it in the stock market. That was a winning strategy too.
It all works out on paper.
I remember hearing Ads on the radio that you were not a “sophisticated” investor if you left all that money tied up in home equity. I think people heloc’d and pumped money into the stock market. Talk about a one two punch! I am still trying to live with the stigma on not being sophisticated.
Point A - 2004 - consumers are sophisticated, or at least they should be. (AG said as much!)
Point B - 2010 - we need to keep “families” in their “homes”!
And so many think all we need to do is get back to Point A?
Dale,
Yes, or at least not so damn ’sophisticated’ I manage to turn my finances and future into an irreversible mess?
Now that you mention it, there was that famous quote from David Lereah where he said anyone that had a home that was paid off didn’t manage their finances very well!
I think the rank and file REIC mbrs. really seized on that and made it their battle cry. It wasn’t about “equity” ( it was about lifestyle! ) IIRC, that was 2004 and 2005 ( according to NAR ) was the Best Year Ever for 2nd homes.
“there was that famous quote from David Lereah where he said anyone that had a home that was paid off didn’t manage their finances very well!”
bwahahahha…and lord I felt like such a loser! Fortunately, I was at the time of my life where I had to admit I didn’t have cognitive abilities to handle high finance maneuvers like that and so just stuck to my dumb ways.
so just stuck to my dumb ways.
Smart Dummy!
Five years ago, an accountant all but chewed my face off about my lack of a motor vehicle. She said that my preference for getting around by bike was most unprofessional.
Well, since getting a 2005 car would involve a membership on the Payment Treadmill, I decided to wait until I could pay cash for one.
Since that time, I’ve continued to get around by bike. I decided that getting a car wasn’t so urgent after all. And I have a different accountant now. Besides, a good bit of my clientele is outside of Tucson, and my mode of transport troubles them not at all.
Right now, the newest bike I have is 15 years old. I do all of my own bike repair and maintenance, and, guess what, folks, it’s not difficult.
I got around by bike/walk/subway/bus for 15 years. got tired of hauling groceries in the cold and snow.
Slim, but you would look great tooling through Tucson on a Vespa.
A big fat Blue Vespa.
A big fat Blue Vespa.
Now THAT is what I want. Blue Vespa!
Recently met an old coot in Office M ax, who had driven his electric 3 wheel bike with navy blue canvas canopy and basket in the back into the back of the store. It fits in all aisles. He has designed it. So cool. $1,600+ and he can use it in manual mode too. He invented it.
As often as I find myself there ( and given the sq. footage of those blimp hangar sized stores ) I just may get one!
Other than the vespa, here is the guys info.
Electric Tricycle/Mobility Vehicle.
Green Machine.
Sorry it isn’t a bicycle too- just reviewed his flyer.
$1695 without canvas cover.
xb-420M Scooter.
Actual seat with back support.Cute as can be, functional!
Send me an email via Ben and I will scan his info.
ArizonaSlim,
You need that pink Vespa and pink helmet like that young girl on one of those TV (computer?)commericals.
Yeah…that an a black Harley jacket with chains and studs that reads” Ben’s HBB - Takes No Prisoners”
As I sit here, it is 5 degrees F outside, wind 15 to 24 out of the northwest, wind chill is minus 15. Hasn’t been over 15 degress since before Christmas.
Bikes and Vespas are overrated.
Not only 30 years of car payments, but the house is now collateral and can be seized if you don’t pay. I paid cash for my car, but that’s because I’m unsophisticated.
New jobless claims increase less than expected after 2 weeks of sharp drops ~ January 7, 2010
WASHINGTON (AP) — The number of people claiming unemployment benefits for the first time barely rose last week, after two weeks of sharp drops, further evidence that layoffs are easing.
The Labor Department said Thursday initial claims for jobless benefits rose by 1,000 to a seasonally adjusted 434,000 last week. That’s lower than the 447,000 that analysts expected, according to Thomson Reuters.
The four-week average of claims, which smooths fluctuations, fell for the 18th straight week to 450,250. That figure is nearing the roughly 425,000 that many economists say would be a sign the economy will start creating jobs.
LOL! It wasn’t that long ago that 400K newly jobless per week was considered “bad news”, but now the spin doctors turn it into good news.
I’m nearly certain that it wonn’t dip below 400K during this coming year.
Easing layoffs are nice but when there aren’t any new jobs coming line then, it’s not so nice. I read it but forgot the number of new jobs that need to be created just to get our heads above water before Sarah Palin’s second term. That was Krugman correct?
Wasn’t that something like over 350K? He sounded really depressed in those post.
Come on people, a heckuva a lot of workplaces go into hibernation during the December holidays. It happens every year, things just slow down. Let’s watch as more time is put between us and those December distractions.
Sure happened around here! Besides, with a clientele in academia, the December hibernation is to be expected.
This week we heard that our oldest department store (most recently a Macy’s) and an old mom and pop sportsman’s store are closing down. This with the mill closing..so I’m listening to local talk radio and they’re doing this “We’ve got to attract jobs to our town! Get the govt off our backs!” vague ranting. As if every other freaking town wasn’t trying to do the same thing. These idiots don’t know how to create jobs. And usually the local boosters don’t even know about new businesses (that aren’t retail) & totally miss it when jobs start to happen again.
Guess it helps to vent.
“We’ve got to attract jobs to our town! Get the govt off our backs!”
Translation: mega tax breaks for Corporate America, who will end up offshoring the jobs anyway.
“These idiots don’t know how to create jobs.”
I’m still figuring out why anyone thinks that a crop of pols who built their careers during a time of unprecedented credit expansion could possibly know anything about rebuilding the their local economic model during hard times. Those pols that are retiring - those are the smart ones.
At my employer, due to annual fiscal planning, there has aways been a seasonal pattern to “restructuring” with a layoff cycle just after Thanksgiving and just before bonus time in April.
Doing layoffs just before Christmas isn’t good for the morale of the survivors.
edge,
Right, they’ve seen how their REIC counterparts haven’t been held accountable in any way, and all that’s left is to take-the-blame.
They’re Upside/Downside guys and it guides their every thought, right down to ‘whom’ should pick up the lunch tab. Why would now be any different?
Here in Tucson, a well-known slumlord has started a recall campaign against the mayor and some of the city council members. His reasoning, if you can call it that, is that Tucson isn’t business-friendly enough.
The only way to create jobs is to give out massive tax breaks to corporate so that the corporate chooses their little town over another. Books have been written on this corporate welfare. The stimulus figure of $217K per job isn’t far off from what it was for private sector anyway.
as if it matters. the whole thing will just go overseas in a few years anyway.
oxide,
I’m not so easily disposed to just throwing in the towel. And it’s not as simple as just that. IndpendentAmerica.org has done a lot of research and some of the answers they’ve arrived at are kind of surprising.
Quick example, Registered Rep. Mag and the WSJ have reported that just since the start of the year, brokers have been leaving the big “wirehouses” in droves! Oh, and they’re taking Merrill’s clients w/ them!
MegaBank’s market share of wealth mgmt. has shrunk by over 10% just in the last year. I say kick ‘em while they’re down.
“I say kick ‘em while they’re down.”
I make my living off the Evening News
Just give me something-something I can use
People love it when you lose,
They love dirty laundry
Well, I coulda been an actor, but I wound up here
I just have to look good, I don’t have to be clear
Come and whisper in my ear
Give us dirty laundry
Kick ‘em when they’re up
Kick ‘em when they’re down
Kick ‘em when they’re up
Kick ‘em when they’re down
Kick ‘em when they’re up
Kick ‘em when they’re down
Kick ‘em when they’re up
Kick ‘em all around
We got the bubble-headed-bleach-blonde who
comes on at five
She can tell you ’bout the plane crash with a gleam
in her eye
It’s interesting when people die-
Give us dirty laundry
Can we film the operation?
Is the head dead yet?
You know, the boys in the newsroom got a
running bet
Get the widow on the set!
We need dirty laundry
You don’t really need to find out what’s going on
You don’t really want to know just how far it’s gone
Just leave well enough alone
Eat your dirty laundry
Kick ‘em when they’re up
Kick ‘em when they’re down
Kick ‘em when they’re up
Kick ‘em when they’re down
Kick ‘em when they’re up
Kick ‘em when they’re down
Kick ‘em when they’re stiff
Kick ‘em all around
Dirty little secrets
Dirty little lies
We got our dirty little fingers in everybody’s pie
We love to cut you down to size
We love dirty laundry
We can do “The Innuendo”
We can dance and sing
When it’s said and done we haven’t told you a thing
We all know that Crap is King
Give us dirty laundry!
- Don Henley and Danny Kortchmar
I never understood if the song was deploring that style of news or celebrating it. If it is sticking up for the rich and malevolent brought low by scrutiny, then meh.
It’s satire. And unfortunately, truth.
More unneeded, unwanted housing on the way for California…
The upside: Vacant houses ultimately either help drive home prices down to affordable levels, or provide shovel-ready projects for bulldozer operators. It’s all good!!!
Schwarzenegger proposes tax credit to spark new home building
By Jim Wasserman
jwasserman at sacbee dot com
Last Modified: Thursday, Jan. 7, 2010 - 12:11 am
More than 20,000 California homebuyers could get state tax credits of up to $10,000 this year under a new stimulus proposed Wednesday by Gov. Arnold Schwarzenegger.
The governor’s plan to allocate $200 million in credits to buyers of new or existing homes is part of a job creation strategy. It goes now to state lawmakers for consideration.
“This is about helping eliminate extra housing to get construction back on tap,” said Victoria Bradshaw, Schwarzenegger’s secretary of labor and workforce development, in a call with reporters.
…
I guess 20,000 * $10,000 = $200,000,000 is a drop in the bucket compared to a $20,000,000,000 (or is it $21,000,000,000) budget gap — a mere 1% of additional debt for California’s underwater balance sheet?
Where is the money going to come from?
More IOUs no doubt.
Like I said, what’s another 1% added to CA’s deeply underwater balance sheet?
It’s all about Magic.
The median income in California is around 61k…everything else is a total illusion. Behold
mikey says “Abracadabra”
Pooof !!!
Rats, well, it might disappear soon but I’d sure miss it’s wonderful navel oranges, so I’m gonna make this trick go slow.
The median income in California is around 61k
I doubt those stats. Plez link those stats.
Plus we can’t count starz, do we?
Does that median income figure include the 17.5 percent or so of potentially employed workers with current incomes of $0 in the calculation? (My guess: No…)
Note that if you truncate the distribution by lopping off the bottom 17.5 percent through handing out pink slips, the official median can increase, even if nobody’s income actually went up.
Sheesh, you of little faith.
Doubt all you want to, the figure I used was actually read $61,021 for California in 2008.
It may not be accurate today but that’s what I read in an a article today.
I must protect my source of this one.
Well the Magic Kingdom is located in Southern California after all.
LOL
More than 20,000 California homebuyers could get state tax credits of up to $10,000 this year under a new stimulus proposed Wednesday by Gov. Arnold Schwarzenegger.
——————–
Frick, not this **again**!
They just can’t leave it alone…and with a “budget crisis” to boot.
“This is about helping eliminate extra housing to get construction back on tap,” said Victoria Bradshaw, Schwarzenegger’s secretary of labor and workforce development, in a call with reporters.
How does a tax credit to buy used or NEW housing reduce the extra supply? Wouldn’t a functioning, growing economy lead to more people having the financial ability to soak up those excess houses?
How about a bulldozer tax credit?
- Creates jobs
- Keeps home prices high, through elimination of unneeded, unwanted McMansion tract home developments
- Helps support high real estate appraisals (and property tax payments)
That is what the credits are all about.They want to get property values up so they can bring in more tax revenue.
You might think fixing govt expenses and lowering debt burden to be in a good position to attract business would cross ole arnie’s mind; seeing as he is a “republican”.
You know businesses must look at states with that much red ink and think gimmicks are not going to suck them into a bad tax situation.
During the last depression the gov spending produced dams highways, parks, etc
All we will have from our spending is rich bankers consolidating power over all.
Here in Tucson, the CCC projects are still in use. And, if you like to wander around looking at sidewalks, you’ll still see WPA stamped on the ones south of Downtown.
I discussed the WPA guides to the states here this very week.
Actually the CCC and WPA were two different things - different agencies. The CCC generally worked on things like national parks - things related to natural resources (thus the “Conservation” in their name), and the WPA did more general infrastructure projects.
Where I used to live - Petaluma CA, also had WPA stamped into the sidewalks.
IMO it’s an important distinction. Personally - I like the CCC idea, but not the WPA. IMO a mandate of the federal government to preserve common natural areas is valid and proper. This does not include things like city sidewalks, or other projects the WPA did like utilities, public buildings, etc. WPA was basically one giant set of pork-barrel projects, and thus subject to all kinds of bad politics - backroom deals etc.
IMO a mandate of the federal government to preserve common natural areas is valid and proper. This does not include things like city sidewalks, or other projects the WPA did like utilities, public buildings,
So roads/bridges you don’t need?
pork is everywhere- will ever be thus since beginning of Rome etc
So roads/bridges you don’t need?
Didn’t say that. I do think the interstate highway system also falls within the bounds of what the federal government should do, as a matter of national security (which is one of its primary functions). However beyond that - no. Local roads, bridges, buildings, etc. should be built and maintained by local entities.
packman,
But you have to admit, roads, sidewalks, schools, etc. sure beat housing subsidies, no? If they’re going to force stimuls spending down our throats, it might as well be something that’s actually beneficial to society, wouldn’t you agree?
Hobson’s choice. There should be no “if”.
Regardless - “if” the federal government is going to take *our* money and redistribute it in order to “stimulate” the economy - then yes I think it should be something beneficial to society. But since it’s the federal government - it should be for things that are beneficial at a federal level - to all people. Things like national parks, monuments, defense, national roads, environmental protection, and such. Not local parks, sidewalks, buildings, etc. which generally only benefit the people of that town.
Though sometimes it’s a gray line I know. Something can be deemed to have benefit to all people - like a museum in some town or a new national park, and also provide an inordinate benefit to the local economy, and as such be subject to politics and favor-mongering. Good judgment has to be used.
What about the stimulus? That was supposed to create so many wonderful things. No?
Stim is stuck in states that are dealing with their own ‘red tape’, which needs to get snipped and projects started.
Some are, but not in full swing till next yr.
Our conservative friends tell us spending on infrastructure is just plain stupid. (Unless it’s in their own congressional district, of course.)
Blame the bought-off grifters in the Senate.
Broken Window Economics anyone?
Bulldoze the excess houses just like they threw out the excess milk in the 1930’s.
I am reminded of the Heinlein book A Door Into Summer where the protagonist gets a job crushing cars that were made for the government to fulfill quotas and keep automaker employed.
Heinlein foreshadowed Cash for Clunkers? Cool, I didn’t know that. But I guess he had a pretty good example when FDR paid cotton farmers $100 million to plough their crop back into the ground. Poverty is wealth!
Speaking of housing, friend who is RE in OC just got lots of REO houses from the banks yesterday. Very busy day for her.
Hope to get more info soon( to report).
Great info, DD. Please do keep us posted.
No, no, no, we don’t need more stinken’ houses.
Been watching the squatters down the street move out today from a house the bank foreclosed on in June. The tenants lived there rent free for I don’t know how many months. Sheriff came today to change the locks. I think the squatters thought they’d get a last minute reprieve since they literally didn’t pack anything but just threw their stuff in the U-Haul. (Not stalking: I can see this from my living room window…)
I tend to view squatters as a necessary evil if it finally forces lenders to properly dispose of their vacant properties.
They have it ass-backwards…..they should be giving out tax breaks for tearing down houses.
“Cash for Crapshacks”
The sooner we can get the government out of the “behavior modification” business, the better.
I’ve said it before and I’ll say it again: couldn’t happen to a more deserving state.
Federal Reserve Chairman Ben Bernanke said on July 16, 2008, that Fannie Mae and Freddie Mac are “adequately capitalized” and “in no danger of failing.” Then-Secretary Treasurer Henry Paulson declared on August 10, 2008, “We have no plans to insert money into either of those two institutions.”
* Both Fannie and Freddie were nationalized 28 days later, on September 8, 2008.
Ben Bernanke claimed on February 28, 2008, “Among the largest banks, the capital ratios remain good and I don’t expect any serious problems of that sort among the large, internationally active banks…” Henry Paulson added on July 20, 2008, that “It’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”
.
* Since the recession started in December, 2008, 144 banks have failed.
Paulson informed us on April 20, 2007, that “All the signs I look at show the housing market is at or near the bottom.”
.
* The number of foreclosures skyrocketed shortly thereafter and will now any day surpass those during the Great Depression.
Ben Bernanke announced on June 20, 2007, that “[The sub prime fallout] will not affect the economy overall.”
.
* Less than one year later, the stock market crashed, losing 53% of its value, and is still down 25% despite one of the biggest bounces in history.
~ Jeff Clark
“adequately capitalized”
Till recently, they enjoyed a former $400 bn budget limit that has now (as of 24 Dec 09) been eliminated. Should we consider them to still be adequately capitalized? What does this statement even mean in a macroeconomists’ bizarro world without budget limits?
Liars lie. It is true. Only a fool would believe in Geithner and Bernanke.
Don’t these people know any shame?
Nope!
They answer to no one (well to congress) which is a complete joke.
I tend to view MegaBank as more or less a spoiled trustafarian child that has ‘really’ screwed up this time and now the well connected parents need to assemble a dream team of attorneys to keep his @$$ from doing hard time.
The kid knows he ain’t going to spend one minute in jail.
And yet you see markets swoon when these proven liars spew more garbage.
Geithner’s NY Fed told AIG to keep quiet on deals
Under Geithner, NY Fed told AIG to keep mum on billions paid to Goldman and others.
http://finance.yahoo.com/news/Geithners-NY-Fed-told-AIG-to-apf-255672802.html?x=0&sec=topStories&pos=1&asset=&ccode=
Someone please piece together this crime, from Goldman to Paulson to Geithner.
That’s easy. Paulson and Geithner are “ex” Goldman Sachs.
And it says paying the banks less or sharing more information could have sparked a global financial collapse.
——————
Funny how this same excuse keeps popping up every time the bankers want more money from the govt/taxpayers. Yet, we’re never really told **exactly** how this will happen, and whether or not there are other options to bailing out the criminals who started the credit crisis (on the way up) in the first place.
Bernanke is not only clueless but dangerously incompetent. He didn’t save the economy, he saved the weak sisters and bad actors to continue parasitizing us. Time magazine be damned.
Like Greenspan he was slow to recognize systemic risk, opposes real reform, and unbelievably thinks the Fed has only minimally contributed to the housing bubble. This a$$clown’s ego apparently needs even more of an intervention than the economy.
How can you make things better if you can’t acknowledge that you have a problem? It’s like alcoholism. But only in the pompous psuedoscience of economics do ‘experts’ think that the best treatment for drug addiction is to give the addict more drugs.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXIvW4igKV38&pos=1
TurboTax Timmy, then head of the New York Fed, told AIG to withhold key information from public disclosure - color me speechless! I can only imagine what hidden horrors await if Ron Paul succeeds in getting Congress to finally audit the Fed.
“…told AIG to withhold key information from public disclosure - color me speechless!”
If the NY Fed president (or Treasury Secretary) did it, doesn’t that make it legal? (I note that TTT is a protege of President Nixon’s Secretary of State Kissinger…)
…and 1 Nixon + 1 Kissinger = 999
Isn’t the 999 upside down?
It just goes to show how much of the financial system is a giant con-fidence game.
I really hope they kick the rock over on the Fed, so we can see what is living under it. Shouldn’t be pretty, but it would be interesting.
This ties in to my late posting in yesterday’s bitch bucket….
Reports are coming in that Chris Dodd announced his intention not to run again because Obama is considering booting TTT and puting Dodd in as Sec. Treasury.
Here’s the link I posted…..
http://thinkprogress.org/2010/01/06/dodd-treasury/
It all ties together…
1) TTT takes his house off the market.
2) Dodd announces he’s not running again.
Maybe Obama likes Dodd as a fellow Democrat, rather than Republican hold-over TTT.
Is TTT going to keep renting that house “until the market improves?”
Dennis,
I sure hope this is just baseless conjecture regarding Dodd. If he becomes Secretary of the Treasury, we’re in deep, deep trouble.
So, looks like Chris will fail at a higher level than he will before.
I can’t help thinking that the Obama Administration’s economic team’s locker room will need a revolving door.
I’m only speechless that our “open book” president is so complacent about his cabinet acting like the KGB.
Geeze. Dodd after Timmay.
Can it get much worse with Obama? OK forget I asked this.
I personally had faint hope that Obama would do something for the little guys out there. Instead it’s nice speaches followed by old school progressive BS expansion of welfare nanny state coupled with payoffs for big time bankers.
Yeah, there is some healthcare debate but all I’m seeing is there isn’t any way to pay for it so it’s just another BS welfare program. And giving vouchers and tax credits to people who don’t pay taxes means it just another welfare program.
On a plus note… I’m seeing very close to the beach areas for dirt cheap in Florida. Getting close to telling mom to buy a place. Yeah, the insurance and property taxes might be a hit.
Still some nice beach places to live out her retirement in.
Don’t think it is his choice.
Carter was sandbagged by the CIA in the 70s when he wanted to clean house at the CIA, note GHB in power pos then..and CIA PR machine helped ruin C’s term because they didn’t want the millions of reams of papers to be released and put under scrutiny.
I don’t like this anymore than you guys, but I think when you have Dick in power since Ford/Rumsfeld too through now.. you have some seriously bad Black MOld that has been around festering since the beginning, and now we are all really sick from their Infestation.
If you have a black mold infestation you have two choices:
1) Ignore it and get sicker
2) Clean it up, go through the pain, and keep it from happening again
But Geithner is not a GHB. His political capital has long been spent.
agreed on G, but seriously Carter wanted to clean up, got started then the PR cia machine took over, and we ‘bought it’ and nothing was ever done to preclude this generations monetary nationwide fiasco and related “christmas bomber” incident. What was sown, is what we are reaping, ad infinitum.
Seriously guys,
The problems with the Carter administration were CIA related?
You guys are nuts.
There was a nice peice on Carter as being an enabler of terrorism. Basically had the STUPID idea to play nicey nice with every crack pot on the planet. Of course they responded by saying “we got a live one” and played that sucker all dang day.
Those guys over there are like dealing with criminals and you have to have the right mindset to deal with criminals. Warm and cuddly isn’t it. They rule by fear and violence.
Good f’n luck if you think that is going to work.
(He) Basically had the STUPID idea to play nicey nice with every crack pot on the planet. Of course they responded by saying “we got a live one” and played that sucker all dang day.
But it’s more complicated.
The other day, a poster said that if terrorism’s goal was to help drive the USA into bankruptcy and fear, they were succeeding.
If your above quote could be said about Carter, could not the modification below be said about Bush II?
(He) Basically had the STUPID idea to play
nicey nicehard-ball with every crack pot on the planet. Of course they responded by saying “we got a live one” and played that sucker all dang day.I don’t think either political party has the moral authority on this issue.
And initiating and backing dictatorship coups isn’t it either. Which is what the CIA had been doing since WWII.
Would you trust the guy in this photo with your money?
Aw come on - he looks pretty trustworty to me!
Is that really his MOM???
Um… no. I just saw the Brady Bunch one day and it hit me - that Alice and him look a lot alike. I couldn’t really find a better picture of him to match though.
Was this legal?
* JANUARY 7, 2010, 3:48 P.M. ET
NY Fed Told AIG to Limit Details of Bank Payments
By ALISTAIR BARR
The Federal Reserve Bank of New York told American International Group to withhold details from the public about more than $62 billion the insurer paid to banks at the height of the 2008 financial crisis, according to emails disclosed on Thursday by congressman Darrell Issa (R., Calif.).
…
Old news. But still very important.
Well, quite a few foreclosures have popped up in my area in the past two days. Unfortunately, they are priced at or higher than regular sales. Oh well, 2011 it is! Depending on how quickly the Cal legislature acts on the governator’s idea of a $10,000 house credit, prices will probably go up or stay stable this year. The pumping continues . . . . . . Time to go to work.
Rubin, Oil Rally Predictor, Sees $100 Crude in 2010
Jan. 7 (Bloomberg) — Jeff Rubin, the former CIBC World Markets Inc. chief economist who accurately predicted oil’s surge during the last decade, expects crude to reach $90 a barrel this quarter and $100 by the year’s end.
Accelerating demand in Asia and the Middle East will force consumers to rely on costlier non-conventional energy sources such as oil sands, said Rubin, who spent 20 years with the Toronto-based bank and last year published a book on energy economics, “Why Your World is About to Get a Whole Lot Smaller.” Rubin correctly forecast in 2007 that crude would reach $100.
“It’s safe to say that we’ll see triple-digit oil prices by the fourth quarter of this year,” Rubin, 55, said in a telephone interview yesterday. “I would expect prices to move pretty close to that level, and be in the $90 range probably by the end of March.”
More reasons why the price of oil will go up and stay that way…
Salazar announces tougher rules on drilling.
WASHINGTON – Interior Secretary Ken Salazar on Wednesday announced policy changes he said will bring more scrutiny and greater public voice in how oil and gas leases are awarded on public lands.
Salazar said the changes should ensure stricter environmental standards in oil and gas leasing while bringing more clarity to the process to energy companies hoping to drill on public lands, mostly in Western states.
“We don’t believe we ought to be drilling anywhere and everywhere,” Salazar said at a news conference. “We believe we need a balanced approach and a thoughtful approach” that allows development of oil and gas leases on public lands while also protecting national parks, endangered species and municipal watersheds.
Salazar, a former Democratic senator from Colorado, criticized the Bush administration for what he called a “headlong rush” to lease public lands. Early last year, Salazar suspended 60 of 77 leases in Utah approved in that administration’s waning days.
Independent Petroleum Association of Mountain States said in a statement.
Kathleen Sgamma, the group’s director of government affairs, said Interior was blocking more than $100 million worth of leases that companies have paid for but cannot gain access to.
I see this as positive overall. It encourages development of competing energy sources and besides, is poisoning your water table for a little bit of oil really worth it? It’s refreshing to see anyone in a position of power take a long term view of anything these days.
So, I should go fill up the tank now?
Let them keep playing their games, they’re only hurting the little guy. We will see how long this can go on.
…and little guy, mikey sings…
“satisfaction,
satisfaction.
‘Cause I try and I try and I try and I try.
I can’t get no, I can’t get no.
When I’m drivin’ in my car
and a man comes on the radio
he’s tellin’ me more and more
about some useless information
supposed to fire my imagination.
I can’t get no, oh no no no.
Hey hey hey, that’s what I say…”
Once again I remind you all that supply and demand have less an impact than speculators and traders.
So - I’m trying to get a handle on how much interest the U.S. government pays on its debt. There seems to be a lot of different information out there, and lots of widely-varying figures. Like - really widely varying. There are a lot of different aspects to it of course - just trying to understand. If anyone can help me out, let me know.
For instance, for fiscal year 2008:
U.S. Treasury data: annual interest expense: $451.1 Billion
Federal Reserve data: Federal government outlays for interest (FYOINT): $190.907 Billion
GPO Access (executive branch data):
- Total net interest: $252.757 Billion
- Divided one way - is $366.455 on-budget, $-113,728 off budget - mainly income from trust funds.
- Divided another way - is $451.143 on treasury debt securities (gross) (this matches the above treasury figure), then subtract off a bunch of other income from trust funds, both off-budget and on-budget.
Anyone know what are these trust funds? Presumably that’s income that’s going out one door (treasury), but coming in another (SS, Medicare, etc). Also - this trust fund interest is about evenly split between “on-budget” and “off-budget” - just wondering what that’s about.
Also, there’s an “other interest” category that’s generally been fairly small - however is now projected to grow quite huge, starting in 2009 actually. This is income interest (a negative value in the “net interest” expense calculation). Not sure what that’s about.
If anyone can enlighten, please do. Thanks.
I’m starting to focus a lot on the impact our debt servicing will have in the coming years, and trying to get a firmer handle on it.
Will post links to data…
Links:
Treasury data
Fed data (source is White House OMB)
GPO data (table 3.2 breaks out the interest)
Well I haven’t found any info to answer any of your questions, but you did clarify something for myself. I’ve been taking the lazy route and using Wiki for info, and couldn’t figure out how the Fed Gov was paying $261B of interest on ~$10T of debt. That’s about 2.5% interest, which is believable on newly minted debt but less so for treasuries issued years ago. Using the $451B for interest payments, which hasn’t been offset, pushes the average rate up to a more reasonable 4.5%.
The treasury actually does publish the average rate paid each month -
www dot treasurydirect.gov/govt/rates/pd/avg/avg.htm
Latest month November at 3.32% 2008 generally ran at around 4.5% (falling), with the debt around $9.5T (rising), so interest paid would be $430 Billion - about right (actual number was $451B).
I think though that value posted is only the average rate for matured treasuries and probably coupons for that month; thus it’s not an average for all treasuries as a whole, I believe. Also that’s over a two-year period, for whatever reason.
WIKI is a suspect source.
Sage advice *Or consider the source.
“WIKI is a suspect source.”
I feel comfortable using it for high profile / common info that would be subject regular verification.
“So - I’m trying to get a handle on how much interest the U.S. government pays on its debt. There seems to be a lot of different information out there, and lots of widely-varying figures. Like - really widely varying. There are a lot of different aspects to it of course - just trying to understand.There are a lot of different aspects to it of course - just trying to understand. If anyone can help me out, let me know”
Okay packman, here goes.
The United States of America isn’t merely flatass broke, we’re 2 levels below the freakin’ Devil, in DEBT and we’re shoveling coal without a union.
Link?
“Link?”
Hang on…I’m busy shoveling in the dark down here !!
How about “US is flatass broke dot com” or “shoveling coal without a union dot com”
Heck, that works! Good one SF.
Roh-roe…
CENTRAL BANKS
China sends ‘tightening signal’
People’s Bank of China tips yield on three-month bills higher for first time since August, a move potentially setting up a rate hike.
Well, you can’t blame them, with 10% growth last quarter, for yanking the leash of the credit-expansion beast. But if this increases demand for the Yuan while the dollar continues to wither, what does that do for the vaunted currency peg?
Schwarzenegger Seeks U.S. Funds.
SACRAMENTO, Calif. — California Gov. Arnold Schwarzenegger on Wednesday asked Washington for funds to help close his state’s massive budget shortfall — a move some other states are likely to follow in coming months as they deal with their own fiscal woes.
“The federal government is part of our budget problem,” the Republican governor said in his annual State of the State address, reiterating a longstanding complaint that California sends far more money to Washington than it receives in return. Mr. Schwarzenegger also said federally mandated spending of state money has further strained California’s coffers.
“We no longer can ignore what is owed to us,” he said, adding that Washington owes the state billions of dollars for various programs.
Ahnold’s credible threat: “Hand over our TBTF bailout, or we will go Icelandic on Wall Street…”
When your state is responsible for 13% of the country’s GDP, I reckon you have a little bit of leverage …
“go Icelandic” could just be the ‘pwned’ of this young new decade!
Arn-o,
If your citizens didn’t create all those scam profits and ponzi schemes, you wouldn’t have paid taxes on them….
Note: That was a little too generalizing. There are many good people in CA.
Here I thought it was Wall Street carpetbaggers who funded the big homebuilders that built over the entire state with McUgly tract home developments and who supplied $700,000 loans to central valley agricultural workers earning $30,000 a year in household income, but now I stand corrected.
Is this sarcasm? Were there no realtors, mortgage brokers, flippers who made fast money in Cali? Weren’t that at ground level?
Asparagus,
Agreed, I’m lost there too? This was demand driven, not that cheap/free money didn’t play a factor, but it started w/ the consumer, not WS.
disagree.
If WS didn’t act as the second-to-greatest fool* just so they book phony future profit and skim real fees, those little banks would have had to season the loans themselves. We would have stayed at 20% down etc.
Also it depends on what you mean by “demand.” Some demand for actual housing was always there. But after late 2002 or so, the only “demand” was for a quick RE buck. if there had been no quick RE bucks trickling down from WS greater fooling, there would be no demand for it.
—–
the Greatest of course are Fannie/Freddie
I agree that WS set the stage, but I think there are a lot of individuals in Cali who were willing participants. I’m blaming WS, but we can’t stop there. There’s more work to be done.
Likewise, there are a lot of Californians on this blog who took a long term look at the situation and said to themselves, this is crazy, I’m not playing this game. They seemed to resist the quick buck. Those are individuals’ decisions.
Wall street is ALWAYS out to get your money. ONLY blaming Wall street is playing the victim. One common theme I’ve taken from this blog is that poor, greedy decisions were made up and down the chain. You said it yourself, people looking for the “quick buck”. Nobody forced anybody to take on massive debt in hopes for making huge money in a year’s time.
I think that’s what PB meant. But it does seem like people are striking out in all different directions and completely schizophrenic about it. Like with the local economy boosters here - the conservatives want to blame big govt, the liberals want to blame WS, no one wants to look in the mirror. It’s always some other entity’s fault, someone safely far away who won’t get their feelings hurt and cancel their subscription or ads or whatever.
This morning on local radio there was some BS about saving th local enconomy, but no one actually said anything. It was all gas out the mouth, all “we gotta stand together and DO something by golly! let ‘em know we’re not gonna take it anymore!” whatever the f*ck that means.
I don’t know if I lost my other post . But make no mistake about this .
Wall Street and the Lenders , (REIC) ,breached their duty to underwrite loans and they mis-rated the junk paper to the secondary market in order to get those funds ,thus they created a fake
and fraudulent market . The lender is responsible to protect depositors/investors funds by proper underwriting and offer
loan products that are in keeping with that duty .
By making loans to “unable borrowers ” ,or fraudulent borrowers
WS and their Lenders created a false market of demand which would not of been there without the absence of their breach of duty to underwrite loans ,or rate high risk paper
properly (especially low down loans). WS just made up their risk models because they had no proof that these models were accurate or time tested . In fact they were riding off the past steam of prior markets in which underwriting was taken seriously .
It’s the lenders duty to screen for income and fraud on any loan application and its the appraisers duty to come up with a correct appraisal . The builders were not “arms length” with many of the loans they arranged either .
WS and the lenders know they are the responsible party ,but when you get bailed out and you get to hide your crimes and
say stupid stuff like “Nobody saw it coming “,your simply taking the heat off yourself for destroying the finances of the Word . Sure the borrowers jumped in on the mania and the hype and many were culprits in the fraud ,but WS was the Fraudulent Market Maker by their breach of duty on purpose because of their greed . The realtors also breached their
duty by hyping up borrowers on false myths and than directing them to loan agents they knew would get anyone
a loan by fraud ,they double escrowed property that pushed up prices ,and many engaged in cash back fraud in one form or another . Again ,these were the so-called professionals
creating financial systems that were corrupted from the top to the bottom .
Many borrowers became greedy and wanted to get in on the
bandwagon of the real estate fake upswing ,which could never of happened had WS and the Lenders and REIC actually done their duty . The mania and fraud ridden markets came about because of that breach of duty and total neglect ,and
uncontrolled greed of the unregulated WS and everyone of the so-called professionals that were involved with that loan transaction . IMHO .
Californians seem a little math challenged. If every state got back exactly the dollars they pay to DC in taxes, there would be no money to run the Federal Government (in a normal world).
What he means is that comparing federal spending in and for California with federal taxes collected in California, California loses. Most of the Blue States are in a similar situation. NY is in some ways worst off. The federal budget transfers money from Michigan to Tennessee, because Tennessee was poorer when the deals were cut; the auto industry has followed.
Most politicians in those Blue States have yet to reach the conclusion that that the more the federal government does, the worse off they get. Most politicians in the red states are against federal spending elsewhere, but not in their home districts.
Good summary.
California gets hit twice in this area. First in things like transportation where it gets less than Red States relative to taxes paid and second for expenses incurred as a result of lax Federal immigration enforcement.
That said, California still has a lot of self-inflicted fiscal problems.
SDGreg,
Not doubting you for a minute but it’s not as simple as Red/Blue. Oregon for the most part, is as Blue as it get’s and we contribute nearly -nothing- to the Federal coffers.
In fact, I’m sure net/net we’re beneficiaries.
Our State GDP is a rounding error of Cali.
DinOR,
I agree with what you say. I was using short hand which wasn’t very precise. It’s not as clean as Red/Blue. You have some larger, typically “Blue” states that tend to be donors to smaller, typically “Red” states. You don’t have to look hard, though, to find exceptions.
But of greater note is that California has been a big donor for a long time and even if that were to change, there are still many internal problems that need to be addressed. California’s problems run much deeper.
“…it’s not as simple as Red/Blue…..”
I am sick of hearing about red and blue states. There are different ratios (40/60, 52/48, 30/70) but to classify them as red or blue is not correct. We should have dark purple states, light purple states, violet states etc. etc.
California is a prime example. It is a mix of red and blue to the extreme - the central valley and SD area are very red the rest is very blue.
Hemet, San Jacinto, Temecula,Murrieta, Moreno valley, Riverside, Anza, Palm Springs, Indian Wells- entire Coachella Valley- vote red.
Obvious strategy: Become a poor state, so that money can begin flowing in across the border instead of out.
California is obviously pursuing this strategy…
PB,
Further, it’s the first time CA’s have actually been jealous of OR’s!
Governor Christine (I’ve never met a social program I didn’t like) Gregoire came to Spokane yesterday and in her speech intimated that Washington State may soon run out of money, whatever the heck that means.
Of course, the dems are pushing really hard for a personal income tax which is constitutionally prohibited in the state.
So, who knows, WA may be handing out Warrants like our poor kin to the south.
WA state is very unusual in having a heavy reliance upon sales tax revenues.. both from retail sales and the “B&O” business tax. There are a lot of complaints about the B&O tax and whether it makes us non-competitive for certain kinds of businesses. There are also complaints that the sales tax dependency causes revenues to fluctuate dramatically with economic cycles. But Oregoneans make the same complaint about their income-tax dependency! I’m guessing that generally speaking government revenues drop when the economy goes south, no matter how you structure your taxes.
Back in the early 90’s Bill Gates dad, a promanent attorney, led a commission to study the WA state tax system and concluded that the B&O tax was a job killer.
The commission advocated an personal income tax and a VAT tax on business activites. I tend to agree with the former, not so much the latter. Trouble is with the requirement of an ammendment to the State Constitution, it just isn’t going to happen.
The real problem is that Govt spending increases dramaticly during the boom years and then no-one can figure out how to rein in the spending when revenue drops. But yeah, there is no way to have a stable revenue base unless 100% of the the taxes come from property tax.
The real problem is that Govt spending increases dramaticly during the boom years and then no-one can figure out how to rein in the spending when revenue drops. But yeah, there is no way to have a stable revenue base unless 100% of the the taxes come from property tax.
Bingo! Same thing happened here in Arizona.
What is a B&O tax?
What is a B&O tax?
Didn’t you ever play monopoly? You roll the dice wrong and land on B&O - you pay the owner a tax.
It stands for “Business & occupation tax”.
googling on that phrase will find the wa.gov site that explains what it is.
Washington state assesses its tax on business activity on Gross receipts rather than Net income. B&O stands for Business and Occupation Tax. The rate is around half of a percent of gross revenues for manufacturers and retailers, and 1.5% for service industries (Dr’s Lawyers, hair sytlists). Its a very onerous tax in that its paid regardless of profitabilty. A manufacturing business has to have pretax income around 8% before the B&O is roughly equivalent to most states income tax rate. it is very onerous for start up’s or mature businesses and retailers all of which typically have low Net Profit Margins.
I took a tour of the Seattle underground years ago, and it was explained that the tax had its origins in the state’s attempt to bring prostitutes and opium sellers into the tax system. Don’t know if its true, but its a good story.
Very funny packman
Thank you Prime
I have a post with a link that hasn’t made it through the Filtertron yet, but states like Alaska and Mississippi basically double their federal dollars (Ole Miss more than doubles their money), while NY and California get back less than 80 cents for every federal tax dollar they send to Washington.
Is it not sort of a VAT ? People are complaining about a 0.5% to 1.5% rate instead of a state income tax !! They would then love a VAT rate of like 10.0% to 20.0% to eliminate the Fed income tax….without any wealthy tax loop holes.
Yes this is true. But California received far more federal dollars than they paid in taxes for several decades following WWII, and that federal largess was responsible indirectly for the CA highway systems, world class universities, etc… A bit of historical perspective puts the lie to Arnie’s complaints.
One of the largest sources of Federal funds going into a state is from military bases. But the anti-war types took over California and made it a hostile environment, so when bases were closed post Cold War California lost out. They lost more bases than elsewhere: NAS Alameda, NAS Moffet Field, Ford Ord, and many others.
I really doubt “anti-war” types had anything to do with all the base closings in California, in fact, where it not for all the bases, often in coastal areas, we’d have wall to wall housing development. Most everyone, Dems & Gops alike, are fiercely hostile to any enchroachments on Camp Pendleton by nearby municipalities (city of Oceanside, for example) and play the “national security” button to make sure they don’t nibble away all the raw land. I think the Defense Dept. saw that there were alot of WWII era reduncies in Calif. and it was politically expedient for them to close bases here.
Ummm Dennis, part of the closures was due to the Pentagon and the Base Closure Panel, wanting obsolete bases to be closed.
Defense contracting in CA was even more important that the bases. CA received an enormous amount of defense contracting, and that only really dried up in the late 80’s to early 90’s. The beginning of the end for the golden state.
But…..but…….what about the “Military-Industrial Complex” some rant so much about?
Seems to me that if they had so much pull, they would keep their bases in the “Golden State”, instead of moving the troops out here in the middle of nowhere.
Congress has always interfered with military procurement decisions.
Can’t blame business (of any kind) for making decisions to deal with that reality.
If every state got back exactly the dollars they pay to DC in taxes, there would be no money to run the Federal Government (in a normal world).
California doesn’t come close to making its federal dollars back.
For every federal tax dollar it pays out Cali gets back only 75 to 80 cents, depending on the year. Compare that to a state like Alaska, which contrary to its self-mythologizing as the most independent of states, gets back more than $1.80 for every dollar it sends to Washington.
I think there is a point here about California and New York. If you are a rich state, you pay more in and get more out.
But California and New York are not rich states: their poverty rates are high. They do have rich people, concentrated in Manhattan, the downstate NY suburbs, West LA, Silicon Valley. When those rich people get less rich, federal relationships don’t adjust.
The key here is the federal Medicaid matching share — 50 percent for these states, based on per capita income.
Overall though, on a net basis for all 50 states combined, the inflow to the states would have to be some percentage significantly less than 100% of the total outflow from the states if for no other reasons than foreign aid and military spending abroad. Maybe thats too simple, but I’m a simple guy.
Last time I checked, all our Interstate highways had a lot of truck traffic…….and none of it was stopping here, it’s all on it’s way to the coasts.
Same way with the airlines……a lot of FAA employees that are enabling all this East Coast-West Coast air traffic.
Our state produces a lot more oil than is consumed locally. And agricultural products. All that stuff has to get to the coasts somehow.
A billion dollars?
The US taxpayers OWE Arnold and California How Much !?!
Hey, you may have some cute blonde bimbos and a lot of real good oranges to export but you’ve got nothing else worth a billion dollars that I want.
Bite me.
I’d bring up a point about vegetables, but it seems that everything comes from Mexico anyway.
Especially now with year 3 of the drought hitting CA.
Chile, Honduras, Nicaragua.
Chinese Decision on Rates Seen as ‘Turning Point’ ~ January 7, 2010
HONG KONG — China’s central bank raised a key interest rate slightly Thursday for the first time in nearly five months, in what economists interpreted as the beginning of a broader move to tighten monetary policy and forestall inflation.
After breaking stride a year ago during the global economic slowdown, the Chinese economy resumed galloping growth over the summer. Government investments, real estate construction and consumer spending are all rising briskly, thanks to a surge in lending by government-controlled banks.
Even exports have begun to recover despite continued economic weakness in the European Union and the United States, China’s two biggest overseas markets.
How many turning points have yet to occur before this financial crisis comes to a close?
As Adam Smith said in similar context, “Be assured, my friend, that there is a great deal of ruin in a nation”.
You might want to make another bag of popcorn.
Yep, this ride ain’t nowhere NEAR over.
This track has more turning points than the Nurburgring.
If asset prices had fallen to levels near or below those supported by the fundamentals and we’d made the investments to begin developing a new economy for the future, then I would say this financial crisis was nearing a close. However, it’s apparent that we’re only nearing the close of the opening act. There are many more twists and turns ahead that will likely take more than a few years to play out.
Agree 100%, Greg. Very sad we didn’t choose that path.
Lennar Reports First Quarterly Profit Since 2007 (Update2)
Jan. 7 (Bloomberg) — Lennar Corp., the third-largest U.S. homebuilder by revenue, unexpectedly reported its first quarterly profit since early 2007 as the company took advantage of a tax change in the way it accounts for land sales.
Net income for the three months ended Nov. 30 was $35.6 million, or 19 cents a share, compared with a net loss of $811 million, or $5.12, a year earlier, the Miami-based company said in a statement today. The shares climbed as much as 12 percent.
Like much of the U.S. homebuilding industry, Lennar is struggling to sell houses at a profit while competing with foreclosures and other distressed real estate. The company had a $285 million operating loss before recording a $320 million tax gain because U.S. law now allows builders to carry back losses for five years.
Lennar’s profit was “all from tax gains not from operations,” said Jim Wilson, an analyst with JMP Securities LLC in San Francisco. Wilson rates the shares “market outperform.”
“the company took advantage of a tax change in the way it accounts for land sales”
If that’s not a green shoot, I don’t know what is.
Ex post facto law?
Well, when you log on first thing in the morning and see “Lennar posts profit” ( what were you guys actually expecting? )
I am breaking my, “don’t post from work”" rule, but I have two things:
1. PB, we’ve both been here long enough… please do not refer to my wife that way. We’ve been through a lot through this whole ordeal, and she has been very patient: gators, tail-lights shot out, attempted murder on neighbor, Sheriff snipers in our front yard etc. My wife gets it, trust me (all of this in “good” neighborhoods).
2. I told my LL that we were going to lowball houses, and they offered to take another $150/mo. off rent + redo the kitchen and add a lanai while we’re gone this summer. Turns out that they eventually want the house back, but want us in there while they renovate. As luck would have, we can leave for extended periods of time since we’re in education. So not only will they be renovating, but they won’t charge us rent for those two months AND they’re going to lower the rent.
My cash just went combo.
So not only will they be renovating, but they won’t charge us rent for those two months AND they’re going to lower the rent.
That sounds like a pretty good deal, eh?
#2 SWEET, must be in Florida
Good fortune Muggy, we would have missed you!
“PB, we’ve both been here long enough… please do not refer to my wife that way.”
I meant no offense to you or your wife. However, I do shoot from the hip, and if any man who posts here says his wife is insisting that they buy a house, I guarantee you I will summarily exercise my free speech right to serve up a humor laden YouTube version of the Suzanne Researched This commercial.
And will you also exercise your free speech on behalf of the women here who are constantly fighting their husbands who are bound and determined to buy a house?
Just say no applies to all spouses, not just wives!
And Muggy, I hope things work out for you. This deal sounds good, although make sure you have enough of a lease to avoid “we sold the house, please be out next month!” Bring your wife to DC* in June. If a weekend with the housing bears doesn’t scare her out of buying, nothing will!
*Dates, locations, arrangements to be announced maybe, someday.
‘…gators, tail-lights shot out, attempted murder on neighbor, Sheriff snipers in our front yard etc. My wife gets it, trust me (all of this in “good” neighborhoods).’
Home ownership provides no insurance against those problems. To the contrary, when home purchase prices and rents are out of whack, for the same money you have available to rent a place, a home purchase is more likely to wind you up in a neighborhood where murders occur regularly and gunshots can be heard during the evening hours from within the walls of your children’s bedrooms.
I know this first hand, from our living experiences in the condo we used to own.
pssssst….say you’re sorry.
For unwittingly getting stucco with a condo purchase which
subjected my family to the evening sounds of gunshot? Or for inadvertently insulting Muggy’s wife?
I hereby state that I am sorry for anything I ever did which unintentionally harmed or offended any other human being on the planet.
(Whew!) Now I feel much better…
me too!
Comment by Blue Skye
2010-01-07 11:08:28
pssssst….say you’re sorry.
Just in case you wanted to rent out that spare condo you have sitting there doing nothing…a cautionary tale:
http://cnews.canoe.ca/CNEWS/Canada/2010/01/07/12375051-sun.html
Wow… just wow. Its a wonder Toronto doesn’t have a plethora of arson cases on its hands, because that’s the only solution I can come up with.
Oops… rental is a condo. Oh well.
Kiiiiim..?
(LOL)
Yeah Wow.
Of couse, if I was her, I’d probably be in jail long before this for arranging cut-rate visit to that woman by one of the under-employed “Detroit Boyz”.
I know, I know - stuff like this is rare. People can say what they want about being a landlord, but I’ll maintain it is something best left to the pros. This is especially the case in the big northern cities - no way! Dealing with the fickle gyrations of the stock market don’t come close to the frustration facing this landlord.
If not a pro, at the very least have a personality that is very well-suited to the task. Which I most certainly do not have.
I’d say at the very least, it’s a F/T gig. Sure most start by moonlighting, but if you want to take it serious, you’ll have to quitting your day job sooner or later.
( Most people are know that are LL’s aren’t very well suited either? )
I did the landlord thing once, thought it would be a great way to finance the kids’ college. I bought a reasonably nice duplex in a decent neighborhood. What a freaking nightmare. I sold the thing about four years later at a 20% loss and chalked the whole thing up to a very valuable lesson.
WA state has very onerous Tenant Landlord laws that make evictions very long and very costly. Fortunately, I never had to do an eviction, but I did once pay a tenant $500.00 to leave. Flash five $100. bills in front of a welfare mom and you get her attention. I learned that trick from an acquaintence that has dozens of rental units. (The joke was on the WM, I would have gone to $1000 had she negotiated)
I drive by the place every once in a while, and I always say a little prayer to the Gods that be for getting me out of that debaucle.
My family had a rental when I was in high school. Our first tenant fell a year behind on rent over a two year period and completely trashed a house that we thoroughly renovated before leasing it out. That experience vaccinated me against the desire to ever try the landlord thing.
A lesson far more valuable than anything taught in high school.
Have a F/coworker in Portland -her H is a soft touch, ex military- that is a conundrum for sure, anyway, she told me that H let someone live in their rental free for over 1 yr, always letting their whining wear him down.
Sheesh. I said, HEY I want that deal too.
Whine ON alert..
why can’t I ever get that kinda deal, good neighborhood, great rental house, FREE for over 1 yr..
Whine off.
DD,
I’m guessing the soft touch H is probably getting some P from the F he is renting to.
I’m guessing the soft touch H is probably getting some P from the F he is renting to.
If only.
I heard this story, and all the over time she works- H is retired, and penny pinching she does, and yet, they almost did it again with another f of their son’s. I don’t get it. They are hard right republicans- seriously! lol See, what I mean. f.g amazing.
Lacking a strong judicial system that can evict deadbeats in a timely manner, in India it is typical to collect up to ONE YEAR’s rent as a security deposit in case of default. One year is usually enough time to kick out the tenants legally or otherwise if they stop paying rent. If the Toronto incident starts becoming commonplace, this is what is going to happen here as well, making it even more difficult for renters.
Heck, why shouldn’t it happen here? It seems the govt is all about rewarding the deadbeats at the expense of people who try to be responsible. If home “owners” who don’t pay their mortgages are “victims” it would be discriminatory if we didn’t confer that same “victim” status to renters, wouldn’t it?
(just playing devil’s advocate here)
I really wish deadbeats of all types would reap what they sow. I have no problem helping out people who are going through a difficult time due to influences beyond their control, but the “victim” thing is getting old, especially when it’s coming from people who voluntarily took on debt they could never afford to repay.
Look she is clueless…and greedy, probably has a cheap lawyer
If she REALLY wanted the tenant out, she would have filed for possession and not asked for back rent…it puts it on a fast track and the tenant loses a lot of defenses if the landlord doesn’t ask for money.
Embrace Home Loans Celebrates Opening of Branch in Peachtree City, Ga. Businesswire ~ 1/7/10
Embrace Home Loans, a prominent leader in the mortgage industry and a direct lender for Fannie Mae and Freddie Mac, approved by FHA and VA, and an issuer for Ginnie Mae, officially opened a new branch in Peachtree City, Ga. The branch is located at 1125 Commerce Drive, Suite 100A.
“We are pleased to join Embrace Home Loans and are excited about our future,” said Joy Millard, branch manager for the Peachtree City branch. “My team and I have been helping people in this community with their lending needs for more than 15 years. Now as a part of the Embrace Home Loans family, we’ll be able to offer even more loan products, further expedite the process and close more loans, more efficiently. With more than 26 successful years behind them, we’re positive this will be a great and beneficial partnership for not only ourselves and Embrace, but to the Peachtree City community.
This is a great time to purchase a home and we look forward to helping more families in the area with their mortgage financing needs.”
This is a great time to purchase a home and we look forward to helping more families in the area with their mortgage financing needs.”
When is it NOT a great time to purchase a home?
I’m not sure on that one.It has been a great time to buy a home for the past 10 years as I remember the NAR saying.Realtors need to eat and pay for the benz.
Next year.
Always next year.
When is it NOT a great time to purchase a home?
May, 2006?
Warm here in S.Carolina. We are only going down to 15 with wind chills around 5 by weeks end(night). Furnaces running full tilt.
Midwest bracing for heavy snow — wind chills of 50 below!
Next Arctic Blast blows even colder…
Persistent cold tightens grip on nation…
Britain’s big snow shuts cities…
Arctic blast freezes Texas…
Weekend Freeze Looms for Gulf Coast…
Florida races to save crops…
ICE DELAYS FLIGHTS IN TAMPA…
~Headlines from Drudge
It’s going to be in the mid-60s here in Tucson. Better yet, we had a spot of rain this morning.
We are normally in the mid 50’s to lower 60’s during the day and in the high 30’s to mid 40’s at night. So when longer term cold snaps hit us, the natives damn near freeze. Bundle up like Eskimos.
We may get 1/16 inch of snow tonight, so the grocery shelves will be devoid of milk&bread and the car crashes will commence.
The local oil and gas suppliers love it though, heaters running round the clock.
That’s climate change for you.
“That’s climate change for you.”
Yep. Greater swings in local weather variability. I think that you’re getting it, even if it’s kicking and screaming!
MrBubble
“chirp”
I’ve gotten it all along. Whatever happens with the weather is either a non-event, or it proves climate change / global warming/ [insert catchphrase du jour.] Nothing that could ever happen would DISPROVE it. It’s a non-falsifiable theory.
That’s right!
If we freeze, then “they” were correct. If we melt, then “they” were correct. But their front man started out by saying we are going to melt by mans hand, and called it “Global Warming” so I am to keep referring to ‘it’ as such.
The force to control and confiscate is strong. It will find another incarnation.
It is JANUARY. sheesh. It is supposed to be this cold in winter. Sometimes not so cold.
Ahhh……….. My heart bleeds for you.
Todays weather from Maui News;
Trade winds 5-15 MPH. Highs in the low 80’s. Partly Cloudy with slight chance of windward showers.
What is a furnace?
That is just so wrong.
I like my winters here. Just right. I just wish we had more rain.
Rain? what is that?
sweeping out more sand…
The Milwaukee Area can expect 6-12 inches of lake effect snow by to night.
I don’t care. I enjoy the snow, I got a ton of groceries yesterday …and I have a LL with a strong back, a snowsuit and a a monster snowblower.
ha ha ha
Oh!…and if I lose power and heat, I have TWO cute very friendly single RN’s downstairs with a fireplace, lots of wood and plenty of booze.
I’m pretty sure that the last thing that they put on my Death Certificate will be “Death by Freezing” !
Speaking of booze.
On the weather dot com there are a few weather related videos-duh, but one that stands out..
Cities are using VODKA for melting ice.
check it out. And it is environmental. Get THAT!
And here in Spokane 75 miles as the crow flies from the 49th parallel, we are at a balmy 35 degrees, and no snow. This time last year we were in the low single digits and staring at 60 inches of snow on the ground with 40 inches more to come before spring.
The big winter storm they’ve been warning us about here in Chicago seems like kind of a bust. The tiny little flakes only amounted to 3-4 inches, while they predicted 8-12. The low tonight is a tame 18F. I’ll trade my heavy coat for a light jacket!
Eau Claire Dude AKA Fresno Dude
westwindwood2003@yahoo.com
On front page of the of the Eau Claire Sunday newspaper, we have the headline “State, region see foreclosures jump”. To summarize, there were 30,642 foreclosures for 2009 and 25,541 in 2008 for Wisconsin, a 20% jump as noted on preliminary figures from ForeclosureAlarm dot com, a Madison based website which got the figures from court documents. For Eau Claire and Chippewa counties, the increase was the same. David FitzGerald, president of the Realtors Association of Northwestern Wisconsin said that foreclosures might keep rising nationally for 2010 because of high unemployment and teaser-rate mortgages.
By the way, on the back page of the second part of the newspaper, at www darwinawards com, (that commemorates those who improve our gene pool… by removing themselves from it) the 2009 award goes to two fellows in Belgium who used dynamite to make a withdrawal from an ATM. They were standing too close when the blast leveled the bank.
Millionaire Hit With $290,000 Swiss Speeding Ticket.
January 07, 2010
ST. GALLEN, Switzerland — A Swiss court has slapped a wealthy speeder with a chalet-sized fine — a full $290,000.
Judges at the cantonal court in St. Gallen, in eastern Switzerland, based the record-breaking fine on the speeder’s estimated wealth of over $20 million.
A statement on the court’s Web site says the driver — a repeat offender — drove up to 35 miles an hour faster than the 50-mile-an-hour limit.
Court clerk Heidi Baumann-Becker said Thursday the unidentified driver can appeal the decision, handed down in November, to the Swiss supreme court.
The Blick daily newspaper in Zurich reported the fine was more than twice the previous Swiss record of about $107,000.
I think I just found a way to pay for National Health.
Most Excellent Dude!
CHICAGO (AP) — Boeing Co. said its customers ordered just 142 commercial airplanes last year as the recession forced airlines to shrink.
The net total reported on Thursday was Boeing’s lowest since at least 2003 and just one-tenth of the 1,413 orders in 2007.
Deliveries are up, orders are down, and the stock goes up $2 (from 52 week highs) on the news? Are investors thinking they’ll leapfrog the bad news and be ahead of the game when orders ramp back up? How does one become a contrarian-contrarian?…because I really don’t get investor psyche AT ALL.
Maybe investors are just relieved that the 787 made it back to the airport.
It’s not that people don’t want to fly…
It’s that those TSA thugs won’t let people on all the freakin’ planes that are already sitting there !
Here is the answer to stock market guru “Eddy”:
http://www.marketwatch.com/story/fund-flows-firm-suggests-government-bought-stocks-2010-01-05?source=patrick.net
“We cannot identify the source of the new money that pushed stock prices up so far so fast,” Biderman said in a statement Tuesday.
Are foreign stocks the way to go in 2010?
The source of approximately $600 billion net new cash necessary to lift the market’s overall capitalization by $6 trillion last year could not be identified by TrimTabs, Biderman said. The money, he said, didn’t come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds.
“We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers. Why not support the stock market as well?”
Isn’t that almost exactly the same amount that “households” suddenly spent last year on treasuries or something like that over the year before? It’s just weird that we keep hearing that same number.
I’m guessing it’s from the same source, since TrimTabs references the same Flow of Funds report from the Fed (the z1 report), and also this statement “The money, he said, didn’t come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds. ” is nearly identical to the same statement made by Sprott the other day regarding the $600 Billion or so of unexplained money that was apparently going into treasuries. My guess is that Biderman is just conjecturing that some of that money - was applied to stocks also.
Hypothetically it’s all from the same pool of “investment money”. So if “whoever” hadn’t bought $600B of treasuries, interest rates would have skyrocketed, and the $600B would have had to come from *somewhere* - with that somewhere being mostly money that otherwise went into equities. So really - propping up the bond market is also propping up the equities market. Keeping yields super-low on treasuries drives real money towards stocks.
I have to ask it again, isn’t it a crime to manipulate with financial markets ? If not, then why Madoff is in jail?
Madoff’s problem is he didn’t have the government-mandated ability to create his own money. It’s a lot easier to get into trouble when you play with OPM. It’s a heck of a lot easier to get away with it if you can just create your own. “See - it’s even got my name on it - Federal Reserve Note - I can do whatever I dang well please with it!!!”
(getting to the very crux of the problem with fiat money systems)
600 billion here, 600 billion there—pretty soon, you’re talking about real money!
LOL. I’m confused. Is this a sell, or in fact a buy, signal?
LOL. I’m confused. Is this a sell, or in fact a buy, signal?
You have to ask American “oligarkhs” like Mr. Buffet who usually order government to manipulate with the market in order for them to make money. They don’t go to jail for “inside” information, same way as Russian “oligarkhs” got support from Mr. Putin and got their lost money back…
It is very easy to invest if you have your people in”highr” offices…
Wow, can’t believe I’m the first to post this story from today’s NYT. Paradigm a shiftin’? Don’t count on it. Check out the comments, where bitter homedebtors tell the guys in the story to “man up” if they don’t like wasting all their free time on home maintenence:
Men Happy To Be Free From Owning Houses
“THE house was an ordinary house: It bore him no malice. Alan Berks knows that now. But back in the spring of 2005, when Mr. Berks, a playwright, and his wife bought the three-bedroom home for $214,000, it often seemed that it was trying to ruin his life.
Alan Berks the renter had spent his evenings with friends at African dance nights and jazz clubs. Alan Berks the homeowner lost an entire day rearranging the living room furniture. “I did find a spot for the couch that made me happy,” he said. “I was proud of myself. But where the couch is — that’s how I’m going to measure my happiness from now on? I remember thinking: ‘This is how people live? Why am I doing this?’ ””
“Men Happy To Be Free From Owning Houses”
Muggy?
PB, I am not exaggerating: I could live out of a tent, or be a live aboard like (calling Blue). The problem is the three other people that are dependent on me.
When I visited a friend in M’boro, Tennessee a while back I slept on her front porch. In that same state, I know a guy who put himself through college living in a tent in the woods behind the restaurant where he was a chef (calling Allena). One of my favorite memories is of this one extreme outdoor dude I knew in college (Buffalo) who slept with all of his windows and doors open — all year long. One morning he woke up with a snow drift in his living room.
I not just owning one… I can do without the house altogether.
It’s not just owning one…
Hah! I just came over here from the NYT website to post this very same article. Here’s the link:
http://www.nytimes.com/2010/01/07/garden/07men.html
I had the privledge of spending New Years day up to my elbows in a plumbing job that required not only removing substantial sheet rock from the inside wall of the house, but also cutting a rather sizable hole in the outside wall of the house, of course while it was raining, snowing and blowing like crazy. I’ll spare the details, but the problem stemmed from the installation of the water softener 20 years ago. I suppose I could have called the plumber, but that would have been a $700 job at least. Besides I am just one of those crazy do it yourselfers. I still have to replace the dry wall, and finish replacing the siding where I had to cut the hole; oh yeah and replace the carpet in one room of the basement.
Ah, the satisfaction of a job done right.
But, here’s the crazy thing, I would still rather own than rent, and still think that ownership, done correctly is a good financial move. (Clearly old school)
While I was Back East, my parents’ septic tank backed up. The lovely stuff flowed into the basement. This was the day after Christmas
So, time to call Hickman Sanitation, the same company that installed my folks septic system back in ‘66. Back then, they weren’t much bigger than a one-outhouse company.
Well, that was then, this is now. Hickman has quite the company. A fleet of trucks. A major porta-pottie rental operation. (Need dozens for your family reunion? Give them a shout.)
Better yet, the owner of the company came to the house to pump us out.
‘This is how people live? Why am I doing this?’
Because… REAL ESTATE ONLY GOES UP!!!
Hahahaha!
And no one is going to do anything with that “goes up” phrase? Come on, people, where’s that ornery HBB sense of humor?
Slim, I think they lost their funny bone. It got all serious in here.
Yeah, where’s Oly when we need her sense of humor?
where’s Oly
Was thinking the same thing recently. We throw in a few humorous quips and they fall flat with all that pixie dust and gnomes and such.
The link:
http://www.nytimes.com/2010/01/07/garden/07men.html
Job Growth Erodes as Housing Bust Pushes Mobility to Record Low
http://www.bloomberg.com/apps/news?pid=20601109&sid=ajImkJ5FYdQ8&pos=11
“Raul Lopez, laid off from three construction jobs since October 2007, is focusing his search for work near Antioch, California, because his $392,000 mortgage is almost triple the price his home there would sell for today.”
“If it wasn’t for the house, I’d probably move closer to Oakland, Hayward, San Leandro, places where there are jobs,” said Lopez, 36, who is married with four daughters.
“The ability to relocate for employment, which helped the U.S. recover quickly after previous deep recessions, is the latest victim of the housing bust. About 12.5 percent of Americans moved in the year ended March 2009, the second-lowest ever, estimates Brookings Institution demographer William Frey, after a 60-year record low of 11.9 percent the previous year.”
“Some households are staying put because they owe more on their mortgages than their properties are worth; others have trouble selling houses in depressed areas, economists say.”
“One of the hallmarks of America’s labor market is a high level of mobility,” said Joseph Stiglitz, a Nobel Prize-winning economist, in a Jan. 3 interview in Atlanta, where he was speaking to an economics conference. “We are about to lose that.”
“It’s a constant factor,” Seltzer said. “Conservatively, in at least 70 percent of the searches I’ve worked on in the last 12-to-18 months at least one or two candidates have withdrawn from the process after they’ve investigated their real-estate situation.”
“This is our first national slump caused by a housing bubble and that ties down workers,” said Nobel Prize-winning economist Paul Krugman in a Jan. 4 interview. “It is a transitory thing, but transitory can mean several years.”
‘“This is our first national slump caused by a housing bubble and that ties down workers,” said Nobel Prize-winning economist Paul Krugman in a Jan. 4 interview. “It is a transitory thing, but transitory can mean several years.”’
Something tells me Krugman fails to grasp the deeper significance in Groucho’s line from the Marx Brothers’ 1929 movie The Cocoanuts:
“You can get any kind of house you want. You could even get stucco. (Boy, can you get stucco.)”
For those w/o a long history of reading here, it is noteworthy that the 1929 stock market crash was preceded by a 1926 Florida land bust (ring any bells???)…
There clearly was a massive real estate bubble in Florida in the mid-1920’s that preceded the stock market crash in 1929 and the Great Depression in the 1930’s. But how many were unable to move during the 1930’s due to being tied to housing? There was quite a migration from the plains to California during the Dust Bowl years of the 1930’s.
It’s been a while since I read The Grapes of Wrath, but didn’t the Joads and their ilk move west after their properties were foreclosed by the banks? Voila: mobility problem solved.
…but didn’t the Joads and their ilk move west after their properties were foreclosed by the banks? Voila: mobility problem solved.
———————–
Foreclosure: a surprisingly simple solution to a great majority of our nation’s problems.
Yes. I’ve often wondered about the relationship between the two actually. It doesn’t really seem to be a cause/effect relationship since it took *so* long for it to happen - over 3 years. Probably had some effect I would imagine.
Unlike this bust - mortgage debt (nationwide) continued to skyrocket right up until the market crash in 1929 and even a few months beyond into 1930. This time though mortgage debt flattened starting in late 2007/early 2008, about a year earlier relative to the crash.
Seems like in the GD the housing crash was caused by the stock market crash, with the one big anomaly being Florida which folded early from the game.
An interesting note about the Florida housing crash - though it had started somewhat already by late 1925, it was really exasperated by two big oceanic events in 1926 -
1. The sinking of the Prinz Valdemar in the mouth of the bay in January 1926, blocking ocean traffic for a long time and causing prices of food etc. to inflate tremendously. The Prinz Valdemar had been arriving with the purpose of becoming a floating hotel.
2. The Great Miami Hurricane in September 1926, which was really the last big straw. It was a category 4 that wiped out most of the city, and made it obvious to many that Florida wasn’t quite all it was cracked up to be.
Nature always seems to kick your ass when you are already bent over.
Like now.
Like now.
peek a boo
Nah, this weather now is light weight. pffft. Be over in a coupla daze.
No, I mean when we’re bent over like now. The economy and all. Thin ice.
Dust bowl, hurricane, earthquake, flood, volcano, Wall Street falls into the Atlantic, that kind of surprise.
, that kind of surprise.
That is what I am saying, Mass Hysteria… calling Ghost Busters!
“Dust bowl, hurricane, earthquake, flood, volcano, Wall Street falls into the Atlantic, that kind of surprise.”
Oh please on Wall Street falling into the Atlantic, then we’ll finally have a chance to move onto something better. That might bring us back from the abyss instead of pushing us over the edge.
“One of the hallmarks of America’s labor market is a high level of mobility,” said Joseph Stiglitz, a Nobel Prize-winning economist, in a Jan. 3 interview in Atlanta, where he was speaking to an economics conference. “We are about to lose that.”
+100
Not just the people who fear losing money if they sell, ie the fools as they have already lost money.
It’s the people who used the 8000 tax credit and low interest rates. Once interest rates rise they will not be able to afford a home elsewhere. They will not want to move.
I remember the cries of “Buy now or get priced out forever” from the stampeding herd of realtors and homebuyers. Now it sounds like “Buy now and be priced IN forever!”
I suppose one potential plus of this lack of mobility might be to finally force more telecommuting and on more than just a local basis.
http://www.nytimes.com/2010/01/07/garden/07men.html
Link to the entire article.
Two houses that my wife and I looked at over the past 3-4 months have just raised their prices. One from $179,000 to $189,000 and one from $200,000 to $220,000. So I call up the real-a-tor this A.M. and ax wuz-up?
He tells me he has had 7 listings do the same thing since X-Mas. I asked what are they thinking? He said that he has asked the same question. In each case the ‘owners’ believe the housing market is going to bounce back hard this spring and they don’t want to lose any equity.
Anyone else seeing this in their area?
Looks like some folks down here in Dixie think D.C. has saved the day and happy dayz are just around the corner. Biting deep into the BS sandwich be served up by the gubmint. Hoping for change.
P.S. I am sure the above prices sound cheap to many of you. Just keep in mind, we are in central S.Carolina. These houses are not shacks in this area.
Good to see in a way, there’s nothing like some price hikes to bring out the lurking inventory.
And, just think, in a few months we’ll see them with their “for sale” signs continuing to creak in the wind.
Which scenario is more likely to cause capituation?
Prices dive when people expect prices to dive or prices dive when people expect prices to rise?
Yup, to date this has been a fairly linear event, the real gnashing of teeth will begin when expectations start to fail.
“Good to see in a way, there’s nothing like some price hikes to bring out the lurking inventory.”
Exactly. We should see this expressed not only in higher asking prices, but with more houses being put on the market. This should speed up the process of showing this housing “recovery” to be nothing more than a small, short term rise in the middle of a larger, longer-term decline.
Comment by edgewaterjohn
2010-01-07 11:22:11
Good to see in a way, there’s nothing like some price hikes to bring out the lurking inventory.
———————-
Precisely. This is a point I think many are overlooking. I’ve heard from a number of people that they are “waiting for the market to get better” so they can sell their properties. I think there is far more “pent up” supply than demand out there.
Two houses in my area have increased asking price.
One dropped initially about 15-20% and now is back up 7%. It’s been on the market for 2 years now??
But of course! After all, they don’t want to give it away.
If overpriced enough, not only won’t it sell, but you won’t have to bother keeping it tidy for showings. There won’t be any.
Right!
The two houses I referenced have been on the market for over one year.
I said to the real-a-tor if they didn’t sell at the lower price what makes them think they’ll sell at the higher price. His response was,they (the ‘homeowner’) feel like they need to try something.
I said, you are correct! Drop the damn price until it sells.
Don’t want to hear that though.
See, sometimes we jump all over the RE persons when it is indeed the owners who are making the calls.
And the “owner making the call” is egg-zactly what happened w/ the house that’s across the street from my parents’ place. Here’s the story, courtesy of the Slim family:
Couple got divorced, and after the husband moved out, there was an attempt to sell. And the place just sat there.
The neighborhood consensus was that the price was too high. So, off the market it went.
Mom says that the lady bought another place and the ex-husband lives there. But he’s gone a lot. Perhaps he’s crashing at a girlfriend’s place. We just don’t know.
What’s really frosting the nabe is the fact that the man and some other relatives took it upon themselves to cut down several trees, including one in the public right of way.
The neighbors watched the cutting, and one of them told me that she was more than a little frightened. Reason: The cutters really did not know what they were doing. And they were working with tools that, shall we say, are not for the inexperienced.
There’s a lot of cut-up wood across the street from my folks, and it’s just been sitting there. Y’know, like the house is most of the time.
While I was visiting the folks, I heard more than a little neighborly hand-wringing about the appearance of this property. So I decided to help out. (Hey, it’s better than listening to all the kvetching.)
I found a box that my parents were about to recycle, and I cut it apart. From one of the cut-up sections, I made a sign that said “Free Firewood” and I posted on one of the lumber piles.
Voila, that pile began disappearing. Once, while Mom and I were out walking the dog, a jogger came by, and Mom said hello. I let her know about the wood. (Nothing like word-of-mouth advertising.)
I also found the local chapter of Freecycle, and offered to show one of the more computer-literate neighbors how to join and post an offer for free firewood. There are also some huge pieces that would work well for furniture makers and sculptors. There’s another Freecycle offer.
My folks and their neighbors weren’t as interested in Freecycle as they were in the word-of-mouth method. Which consists of knocking on the door of another neighbor who heats with wood and asking if a restocking of the woodpile would be in order. Some of them also know of furniture makers and sculptors.
So, with the neighbors working together, Mr. Don’t Care About His Yard’s excess wood will soon be gone. Mom reports that the “Free Firewood” pile has completely vanished, so we are making progress.
I still think that they should join Freecycle. Beats hand-wringing and kvetching.
The underwater HouseDebtors in America are all under House Arrest.
Like all other prisoners, they’ll wiggle, squirm and play all sorts of games in the HOPE of a glimpse of sunshine…but they AREN’T going anywhere unless some fool buyer or lender actually releases them to walk.
They can’t sell…
They can’t move…
They can’t refi…
They can’t make the paym’ts…
They’re afraid for their jobs…
They look forward to Spring, with it’s Alt-A’s, quirky ARM’s resets and Prime defaults.
They need something to do to occupy their self-imposed confinement time…let them Play The Price IS Right.
It makes them Feel Rich Again !
Oh…and don’t even mention the growing Shadow Inventory to them.
They’ll make a Mess on the floor.
“Free firewood”
One of the things that the local spinmeisters DON’T want people to know about, is the ridiculously high burglary/theft rate.
Quickest way to get rid of stuff you don’t want? Put it in the driveway with a “For Sale” sign on it…. Leave it out overnight.
Or have a garage sale, and wait for the packs of four generations of illegals to show up, in their busted-ass Chevy conversion vans, and their “no habla” of any price, until you just give $hit to them, just to get them off your effing property?
Garage Sales……..just not worth the hassle anymore. After my last one, I just pitched a lot of pretty decent stuff, just on principle.
But I digress……Have I mentioned that the “costs” of illegals to our society vastly outweighs the “benefits”.
But I digress……Have I mentioned that the “costs” of illegals to our society vastly outweighs the “benefits”.
X- not today.
“Two houses that my wife and I looked at over the past 3-4 months have just raised their prices. One from $179,000 to $189,000 and one from $200,000 to $220,000. So I call up the real-a-tor this A.M. and ax wuz-up?”
It actually shows up in real world housing market data that if you set your (reservation) price higher, it will generally take you longer to find a buyer, but (on average) the sale price will be higher.
The tricky part is finding a price that balances your wishing price against the cost of waiting; in the current market, there is a risk that by pricing high, you will end up waiting for years for a buyer who will never come.
Was just looking today and noticing plenty of high end RE with 100+ days on the market and the shadow inventory has not appeared yet. Some REO they are trying to move.
I’m eyeing a few places west of PCH. Small houses for the neighboorhood but very close to the ocean.
I still remember that not long ago, California costal was a cheap place to live. Even San Fran was cheap.
So, wondering when those areas get effected by all the crime, taxes, budget malize exc. Then the money people will head for… I don’t know… places where they can be better insulated. Probably inland… maybe to better beach places like gulf beaches. Maybe to great estates in flyover country. Perhaps to the better tax havens like Texas and Bama.
I still remember that not long ago, California costal was a cheap place to live. Even San Fran was cheap.
Wow, what are you smokin ?
You have got to be kidding us, yourself? The coast has not been cheap since before the late 70s. And I wasn’t there then, sooo.
I have friends who had major income and would not buy, but rented for more than a decade in area north of SM.
But then maybe your income is seriously north of the average $61,000 CA salary mentioned earlier today, or yesterday! Then good for you ;>
Homeowners stung as mortgage lenders hike charges by £1,400 a year - despite Bank of England holding rate at record low
07th January 2010 (UK)
Cash-strapped homeowners are being stung by rising mortgage rates which cost up to £1,400 extra a year, research revealed today.
It shows that lenders have been raising their mortgage rates despite the Bank of England keeping the base rate at 0.5 per cent since March last year.
Yesterday the central bank said it will continue to hold the rate at this level, the lowest base rate since the Bank was founded in 1694.
nationwide
Causing havoc: Many mortgage lenders such as Nationwide have put up their standard variable rate even though the base rate has been kept deliberately low by the Bank of England.
But the research, from the financial information firm Moneyfacts, said eight building societies have raised their standard variable rate during the base rate freeze.
The SVR is the mortgage rate that customers revert to when their special deal, such as a two-year fixed rate or a three-year tracker, ends.
Up to 5.5million people have a mortgage which is on or linked to a lender’s SVR, a number which has soared in recent years because they are often the cheapest available deals.
In a red alert, Moneyfacts warned that more and more lenders may decide to increase their SVR in the coming months.
Darren Cook, a mortgage expert from Moneyfacts, said: ‘The momentum to increase SVRs appears to be gathering pace.
‘Now that a few have taken the step, it is highly possible others will follow.’
An increase in the SVR is an expensive headache for homeowners, who are already struggling to pay their mortgage and all the other household bills.
Kind of like the credit card company jacking rates at will, only with a lot more teeth.
Debt slaves.
Banks Should Make Swap Prices More Transparent, N.Y. Fed Says.
Jan. 7 (Bloomberg) — Goldman Sachs Group Inc., JPMorgan Chase & Co. and other banks in the $605 trillion over-the- counter derivatives market should make swap prices more transparent, according to the Federal Reserve Bank of New York.
Derivatives regulation pending in Congress should support the use of electronic trading platforms for all market participants, the New York Fed said today in a staff report. In some cases, users should be required to employ a price-reporting system similar to one established for the corporate bond market in 2002, according to the report.
Electronic trading platforms “lower search costs by improving the ability of market participants to more quickly determine the range of prices at which they could potentially execute a trade, and to more quickly and easily identify a counterparty offering attractive terms,” the report said.
A bill passed by the House of Representatives last year requires that most standard and actively-traded OTC derivatives be executed on regulated platforms unless no trading system will accept them. Wall Street banks have resisted making more price information public because the trades are among the most profitable areas for the firms.
Two essential ingredients for a successful, capitalist system are:
1. full transparency in all transactions
2. full accountability for all market participants
Without these things, any kind of “capitalist” system will end up reverting to a small, elite group of very wealthy people who control the entire wealth of a nation and its people.
Black Swans Abound as Year of Tiger Shows Teeth: William Pesek
Jan. 7 (Bloomberg) — If many of us could have turned around the moment we entered 2010 and made obscene gestures at 2009, we would have.
After the wreckage of the past 12 months, 2010 has to be a good year, right? Good for governments staving off financial chaos, good for households struggling to stay afloat, good for investors wondering which rules of economics and markets still apply. It really is hard to see this year outdoing the last one in the doom-and-gloom department.
Yet the Year of the Tiger might live up to its name and be a fierce one. Here are five reasons why.
http://www.bloomberg.com/apps/news?pid=20601039&sid=a6oJ.p_VFnSw
“Japan is hardly alone. Governments are pouring untold trillions of dollars into economies financed with fresh bond issuance. The debt glut is as unprecedented as it is unsustainable. Expect credit-rating companies and investors to be sniffing around for potential debt crises, be they in China, Greece, Japan or Vietnam.”
What happens if all countries go into a coordinated devaluation? Isn’t that really the plan here, anyway?
Expect credit-rating companies and investors to be sniffing around for potential debt crises, be they in China, Greece, Japan or Vietnam.
I believe both have proven their noses to be defective already.
Year of the Tiger.
I can’t resist the play on words here:
“Eye of the Tiger”
Risin’ up, back on the street
Did my time, took my chances
Went the distance, now I’m back on my feet
Just a man and his will to survive
So many times, it happens too fast
You trade your passion for glory
Don’t lose your grip on the dreams of the past
You must fight just to keep them alive
It’s the eye of the tiger, it’s
the thrill of the fight
Rising up to the challenge of our rival
And the last known survivor
stalks his prey in the night
And he’s watching us all with the eye of the tiger
Face to face, out in the heat
Hangin’ tough, stayin’ hungry
They stack the odds, still we take to the street
For the kill with the skill to survive
Risin’ up, straight to the top
Had the guts, got the glory
Went the distance, now I’m not gonna stop
Just a man and his will to survive
The eye of the tiger…
- Survivor
SF U R hot today!
DD,
I have my days. Sometimes the material provided by the HBBs is just too good to pass up.
Spanish unemployment at new records: 19.3% and 40% for the young.
Spanish unemployment rose to the highest in more than a decade in December, 19.3%, capping a year that saw the nation’s jobless rate soar to double the Euro- zone average. The number of people registering for unemployment benefits increased by 54,657, or 1.41 percentage points from November to 3.92 million.
Rodriguez Zapatero and Socialists are trailing the conservative opposition according to the latest opinion polls Rodriguez Zapatero and Socialists are trailing the conservative opposition according to the latest opinion polls
From a year earlier, unemployment climbed by 25%, admitted the Spanish Labour Ministry on Tuesday. The only good piece of news this year was that the number of jobs destroyed in 2009 was 200.000 less than in 2008.
European Union data said Spain’s jobless rate jumped to 19.3% in December and the International Monetary Fund forecasts that it will rise above 20% by the end of 2010. While the Euro-area economy will probably expand in 2010, Spain’s government expects a full-year contraction as the real-estate market works through an excess of at least one million unsold homes and households pay down debt.
Wow! This sounds like a verrry smart plan…
Chicago Police May Scrap Entrance Exam: Report ~ NBCDFW.com
The Chicago Police Department is seriously considering scrapping the police entrance exam, sources tell Fran Spielman.
Dropping the exam would bolster minority hiring and avert legal battles, according to one source, while others confirm that the exam could be scrapped to open the process to as many people as possible.
However, the lack of an exam would make Chicago the lone major city without one, and experts contend that the exam is integral to eliminating unqualified applicants.
The CPD has tried in recent years to boost minority hiring by offering the police exam online and turning to minority clergy to help in the recruitment effort.
Police Union Chief: Scrapping Entrance Exam “Sounds Ridiculous”
But those efforts have met with frustration. Despite seeing an increase in the number of minority applicants in 2006, the last year the exam was offered, the online component was never launched.
And as of last year, one in four patrol officers were African-American, but just one in 12 Lieutenants were of color.
Fraternal Order of Police President Mark Donahue said the plan “sounds ridiculous.”
“With this, you’re taking away one of the steps that attempts to legitimize the (hiring) process,” he said.
Yeah they’re scrapping the entrance exam - but they are making them stay at a Holiday Inn Express the night before joining the force.
I am not a Doctor, but I play one on tv.
I am not a Police Officer, but I play one..
and I stayed at a Holiday Inn.
Now that was excellent DD.
bowing at the waist!
They tried a version of this in DC under Marion Barry. Barry hadn’t hired enough officers and Congress finally demanded that the city hire more. Barry responded by limiting applicants to city residents. That was too small a pool. They didn’t run adequate background checks nor provide adequate training. Some of those hired were convicted felons. For several years afterward, every time there was an embarrassing incident involving a DC police officer, it was inevitably from this group of hires.
In one of the more notable incidents, a person pulled over on a traffic stop on New Year’s Eve was handcuffed to a mail box. A Washington Post photographer just happened to be driving along, saw a screaming women handcuffed to mail box, and photographed the scene. The police, from the group of ill-fated hires, seized the camera and threatened to destroy the film. In the end, the photographer got the camera back and the picture of the woman handcuffed to the mail box was published on the front page of the Washington Post.
Using short cuts in hiring police is not a good idea.
I posted today and I see that my email address was posted at the beginning of it. This is a test to see if it happens again or did I just make some kind of mistake.
Hoenig to BB: “Time to take a hike.”
Thanks be to God for long institutional memory.
The Fed
Jan. 7, 2010, 1:48 p.m. EST
Kansas City Fed’s Hoenig calls for sharp rate hikes, starting soon
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve should start tightening monetary policy — spelling higher U.S. interest rates — “sooner rather than later,” said Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, on Thursday.
“The Federal Reserve must curtail its emergency credit and financial market support programs, raise the federal-funds rate target from zero back to a more normal level, probably between 3.5% and 4.5%, and restore its balance sheet to pre-crisis size and configuration,” Hoenig said in a speech at the Central Exchange in Kansas City.
Hoenig will be a voting member of the Federal Open Market Committee, the panel charged with setting interest-rate policy, this year.
However, his views are likely to conflict with a majority of the central bankers, who reaffirmed only three weeks ago that economic conditions are likely to warrant keeing the fed funds rate at exceptionally low levels “for an extended period.” See more on the FOMC’s December policy meeting.
Hoenig didn’t spell out either exactly when the Fed should begin the process of hiking rates or how fast it should proceed.
“I believe the process of returning policy to a more balanced weighing of short-run and longer-run economic and financial goals should occur sooner rather than later,” he said.
…
Thank you, Thomas!
The Financial Times
Bond investors wary of QE’s end
By Michael Mackenzie in New York and David Oakley in London
Published: January 7 2010 19:34 | Last updated: January 7 2010 19:34
In the US and UK, bond investors are watching anxiously as central banks prepare to end their purchase policies known as quantitative easing.
The nervousness centres on one big question: just how high will bond yields rise this year, as last year’s big buyers of debt depart from the scene. And do private investors have the capacity to take the central banks’ place?
While an improving economy can cope with rising bond yields, there comes a point when sharply higher interest rates threaten a nascent recovery in activity, particularly for the US housing market. As such, while QE is set to end early this year, it could well return in order to prevent higher yields damaging the recovery.
The US Federal Reserve is scheduled to end its QE programme in March. But this week minutes from its December policy meeting disclosed that officials are worried that ending QE then might undercut recent improvements in the housing sector. It suggests the Fed is distinctly more cautious about the outlook for the economy in 2010 than perhaps the equity or commodity markets, both of which seem to be banking on a V-shaped economic recovery.
All of which potentially sets up 2010 as a year where bond markets flip 180 degrees more than once, fearing the end of QE and higher rates, only to rally sharply, should the economy lose steam, raising the prospect of a double dip recession.
“The Fed could be pushed into trying to keep a lid on rates,” says Dominic Konstam, head of interest rate strategy at Credit Suisse. “The start point for 2010 is central banks and how they will inch towards an exit strategy,” he adds….
Is there any possibility whatever the Fed will actually follow through with announced plans to end quantitative easing without implementing another program of similar purpose and equal or greater anticipated impact?
At this point the thinking is that they don’t actually need a program, to do what they want.
Kansas City Fed’s Hoenig has been a most straight shooting Fedman.
Parts of the Mid-West are some of the last bastions of common sense Americana left.
“Kansas City Fed’s Hoenig has been a most straight shooting Fedman.”
Either that, or he is their designated sabre-rattler.
I don’t think so. He obviously is willing to stand up to the prevailing view (e.g. by publishing this bluntly honest assessment last March of the consequences of TBTF) and I am guessing he takes a lot of political heat for doing so. Hoenig stands for what is best about America: Independent voices in the policy process who are willing to put principle above profit.
Better link…
“History, however, may show us another experience. When examining previous financial crises, in other countries as well as in the United States, large institutions have been allowed to fail. Banking authorities have been successful in placing new and more responsible managers and directors in charge and then reprivatizing them. There is also evidence suggesting that countries that have tried to avoid taking such steps have been much slower to recover, and the ultimate cost to taxpayers has been larger.”
That alternate approach was pushed by some a year ago. Instead we got bailouts for Megabank with Megabank left to squeeze consumers and the economy alike.
I don’t see this happening in 2010. We are in the season called
E L E C T I O N S, and E L E C T I O N S was its name-O.
eason called
E L E C T I O N S,
Naaaaailed it!
Someone cited a paradigm shifting article in the NY Times today. How about this one from Roger Lowenstein recommending walking away from mortgages?
http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?hp
“Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials.”
Great article, thanks for posting it!
Uh-oh! The MSM is telling people to put on their walking shoes!
http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html
Whoops! WT Economist beat me to it.
Yep, I posted that also. Why should anyone be surprised? However it does go against the ’save’ Americas home plan. Do the denizens of D.C. really think peoples are going to sit under water for a decade or more? That’s where they get their bonus money from man.
Nancy Sinatra’s message for Megabank, Inc:
“You keep lying, when you oughta be truthin’
and you keep losin’ when you oughta not bet.
You keep samin’ when you oughta be changin’.
Now what’s right is right, but you ain’t been right yet.
These boots are made for walking, and that’s just what they’ll do
one of these days these boots are gonna walk all over you.”
Well, technically, it was Lee Hazlewood’s message for Megabank, Inc. He wrote the song for Nancy to sing (and produced several records for her as well).
The economic ‘experts’ who stopped making sense
Why, despite the financial crisis, do we still put our faith in economists, asks Edmund Conway. (UK Daily Mail)
After a night at the orgy, the ancient Romans would cure their hangovers by stuffing themselves with deep-fried canaries. The Greeks favoured frying up sheep’s lungs. For decades, we Britons have relied on bacon sandwiches to soak away the headache and nausea after a night out. But it was not until earlier this year that scientists at Newcastle University claimed to have pinpointed how fried meats cure hangovers by boosting the metabolism and creating amines which clear the head.
In much the same way, economics is a science which employs some of the world’s most intelligent people and most powerful computers in order to prove the bleeding obvious. When I first started writing about the subject, one excited academic told me to look into behavioural economics, which he described as the most “exciting and radical” of all the fields of economic research. Its most edgy, controversial finding? That people occasionally behave irrationally, driven by emotion rather than reason. Well, duh.
One of the real achievements of Paul Samuelson, the revered American economist who died earlier this month, was to put into mathematical form so much of what was rather obvious to the man in the street (for instance, the idea that people tend to buy what they prefer to buy).
But there was an unintended consequence to this: so much maths was injected into the discipline that economists became terrified of making assumptions that couldn’t be backed up by equations. This ascent to a lofty peak of geekery and abandonment of common sense helped precipitate the economic and financial crisis of the past few years.
http://www.telegraph.co.uk/finance/comment/edmundconway/6914740/The-economic-experts-who-stopped-making-sense.html
But there was an unintended consequence to this: so much maths was injected into the discipline that economists became terrified of making assumptions that couldn’t be backed up by equations. This ascent to a lofty peak of geekery and abandonment of common sense helped precipitate the economic and financial crisis of the past few years.
I can remember my 1970s days as an economics major. You did have to take calculus in order to graduate from the program, but, hey, that wasn’t any big hurdle as far as I was concerned.
More important than the mastery of calculus was the ability to present a coherent, logical argument. And our professors were more than happy to challenge any part of the argument that wasn’t up to snuff. Matter of fact, some of them treated this challenge the undergrad game like it was their favorite sport. Even bigger than University of Michigan football, if you can imagine that.
During the mid-1980s, I worked as the managing editor of an economics journal at another university. By this time, the math droids had taken over the economics profession.
I couldn’t help thinking that, behind a lot of those mathematical formulas was a lot of “garbage in, garbage out.” I became so disenchanted with economics that I vowed to get as far away from it as possible. I never held any sort of job in the field again.
Thank you, HBB-ers, for re-introducing me to the sporting side of economics. Even when you poke holes in my arguments.
“Why, despite the financial crisis, do we still put our faith in economists, asks Edmund Conway. (UK Daily Mail)”
Why, despite the financial crisis, do we still put our faith in rating agencies or care what the rating agencies say, ask certain countries.
Great point
I’d love to see Iceland not only say fu to world central bankers but then when the rating agencies cut their rating start a public campaign to ridicule the rating agencies for their past performance.
Heck I’d become and Icelander if they went this far.
“After a night at the orgy, the ancient Romans would cure their hangovers by stuffing themselves with deep-fried canaries.”
- Old-school hair-of-the-dog hangover cure?
- Nowadays, hair-of-the-dog is done with economic stimulus.
After a night at the orgy, the ancient Romans would cure their hangovers by stuffing themselves with deep-fried canaries. The Greeks favoured frying up sheep’s lungs. For decades, we Britons have relied on bacon sandwiches to soak away the headache and nausea after a night out. But it was not until earlier this year that scientists at Newcastle University claimed to have pinpointed how fried meats cure hangovers by boosting the metabolism and creating amines which clear the head.
Canaries …Wow!
Here in America we must use sheep like the Greeks because all that we will hear after this orgy is the sheep.
OMG…The lambs are screaming.
Quick Clarice, take a lamb under one arm and a house under the other and Run Clarice… Run.
You and little Timmy can save them !
“Quick Clarice, take a lamb under one arm and a house under the other and Run Clarice… Run.”
LOL…
Walk Away from Your Mortgage!
http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?hp
Walk on By Your Mortgage (Sung to the tune of Walk On By)
If you see me walking down the street
And I start to laugh each time we meet
Walk on by, walk on by
Make believe
that you don’t see the laughter
Just let me laugh
in private ’cause each time I see you
I break down and laugh
And walk on by (don’t stop)
And walk on by (don’t stop)
And walk on by
I just can’t believe I’m over you
And so if I seem cheerful and bright
Walk on by, walk on by
Happiness
has come back again
So let me shine
The laughter and the happiness you gave me
When I said goodbye
Walk on by
and walk on by
and walk by (don’t stop)
Walk on by, walk on by
Happiness
has come back again
So let me shine
The laughter and the happiness you gave me
When I said goodbye
Walk on by (don’t stop)
and walk on by (don’t stop)
and walk by (don’t stop)
heh.. I give them credit for a valiant attempt to equate personal default with business default.
Should there be no difference between the way we deal with others and the way business deals with others?
One could say YES! ..and many around here will.. but I doubt they’ve considered all the consequences..
joey my man,
Is Eddie your alter ego?
Should there be no difference between the way we deal with others and the way business deals with others?
——————–
I’ll bite…
Since the people who run the megabanks are supposed to be the “experts,” and since their collective actions are more likely to cause systemic risk, then they should be held to a higher standard. Is that what you’re getting at?
Divorce attorney style…
Conn. police: Ex-Bush lawyer tried to kill wife.
Jan 7 02:34 PM US/Eastern
NEW HAVEN, Conn. (AP) - A onetime top attorney to former President George W. Bush is accused of trying to kill his wife at their Connecticut home by beating her with a flashlight and choking her.
Fifty-seven-year-old John Michael Farren is charged with strangulation and attempted murder. He was ordered held Thursday on $2 million bail.
His lawyer Eugene Riccio calls it “a tragic situation.”
Farren was deputy White House counsel to Bush. He also worked on the campaign and transition for former President George H.W. Bush.
An arrest affidavit says the attack occurred after Mary Farren delivered divorce papers Monday.
Police say she passed out during the attack Wednesday night at their New Canaan home and later fled with her children.
She is stable at a hospital with a broken nose, broken jaw and other injuries.
Why didn’t he just shoot her in the face during a hunting trip. They know that works,it was an accident man she walked right in front of my gun.
Or, perhaps, attack her with a cane, as was the case with Sen. Sumner in 1856? (That happened on the floor of the U.S. Senate, BTW.)
Probably used a Mag-Lite…….made in USA.
If he’d used a Chinese flashlight, he’d have only been charged with assault.
so, were they under water on their house? what’s the point here?
“A onetime top attorney to former President George W. Bush is accused of trying to kill his wife at their Connecticut home by beating her with a flashlight and choking her.”
He sounds like a very nice fellow — for an attorney, that is.
“Divorce attorney style…”
Looking on the bright side, at least she is still alive to collect alimony payments.
More and more are walking away, and it should come as no surprise to anyone. Of course this goes against the big D.C. plan of “saving” peoples houses. We evolved into an instant gratification society,(I want it now) and I want it all. So does any so called ‘expert’ really think Joe&Jane are going to sit back, ass-backwards upside down, for years, perhaps a decade or more?
Hell no, here are the keys baby. I’ll just get another house, and hopefully turn it back into an ATM in short order.
We don’t live in grandpas America any more those days are long gone. Now give back my equity damn it, or I’ll hold my breath until I turn blue!
The Way We Live Now ~ NYT
Walk Away From Your Mortgage! January 7, 2010
John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.
Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?
We don’t live in grandpas America any more those days are long gone. Now give back my equity damn it, or I’ll hold my breath until I turn blue!
And then you’ll pass out and start breathing again.
Yep, That’s what Andy Taylor told his boy Opie, when he was throwing a fit. Some smart assed new neighbor kid had told him that’s how you get your way. Turned out… you have to work for it, lesson learned.
California version:
Give me my TBTF bailout now, or I will turn blue and default on my debt…
Our so called “leadership” (Washington, Wall Street, Business community in general) have been “walking away” for years, with no ill effects. Donald Trump is the poster-boy for this behavior.
Now, their house of cards is dependent on J6P being “responsible”
Back when local banks held the mortgages, you could lay that guilt trip on people. Now, nobody knows who “owns” the mortgage, and your only contact is thru some call center in Bangalore.
We are getting closer to the big “do-over”. Maybe.
True.
Only one problem ,those thieves are making us pay for this debacle .
If it was a simple matter that they paid for their bad lending ,that would be one thing ,but the POWERS are picking who is going to pay and who isn’t . You all haven’t felt the effects yet of how you are going to pay ,well maybe by low interest rates on savings and other
indirect ways, maybe you have lost your job already .
The Powers have chosen the course of Moral Hazard ,which will result in the wrong parties being burdened and all kinds of
contortions .
Only one problem ,those thieves are making us pay for this debacle .
I know. Will it stand?
It COULD be changed within the context of our government structure.
Haven’t major burdens been legally “restructured” before?
Essentially you’re saying that your promise to do something means nothing..
everything’s strictly contractual.. nobody’s word is binding.
“Will you call me tomorrow?”
“Sure I will.”
“Can we put that on paper?”
“Uhh.. let me ask my attorney.”
Wall Street better add to their “Risk Models”, that if you create a false market through faulty lending you might get people walking in droves rather than bear the burden on a major price crash of that false
market ,especially if you were stupid enough to give low down
no recourse loans to begin with .
After watching all these people walking away from their obligations, and if I were a lender sometime in the future, I’d add a line to all my mortgages:
If the market value of the property (described above) ever falls below the amount due on this note, this note is immediately due and payable.
If I were a borrower, I would avoid your bank and find another one with looser terms. This shouldn’t be difficult, given the U.S. government’s demonstrated interest in picking up where the collapsed subprime mortgage lending sector left off.
Looser terms? What bank would be dumb enough to risk your walking away and leaving them holding the bag after seeing this debacle?
i tell ya.. this walk-away thing is gonna have some serious repercussions.. beyond imagination.
Is the AIG bailout fair territory for a Congressional audit, or does this verge into the off-limits area of “Fed monetary policy independence”?
Jan 7 2010, 2:40 pm by Daniel Indiviglio
Geithner’s Fed Hushed AIG About Swaps
Still not clear on why I don’t trust the Federal Reserve to be the systemic risk regulator? Want a great example of a conflict of interest where it urged a firm to withhold information to ensure its bailout go smoothly? Bloomberg provides just that today. It turns out the New York Fed, then under current Treasury Secretary Tim Geithner, may have told AIG to withhold details about the banks that would benefit from its bailout due to its swap agreements. This is ugly stuff.
…
Anybody wanna work for the NFL? This one seems like it might have the best benefits. DJ? X-Gulfstream?
http://footballjobs.teamworkonline.com/teamwork/r.cfm?i=27302
“Experience with choreography and styling”
WTF is “styling”?
Housing Forecast: More Foreclosures, Home-Price Declines
“I think 50% more people will lose their homes to a bank this year than they did last year,” predicts Burns.
I wonder if the prediction on resets in this article includes the 30% who have already walked away from mortgages due to reset in ‘10-’12, as per some comments made on the HBB a few days back.
Anyone have a source as to where that 30% number comes from?
I was driving today in one of the newer sections of Howard County, Maryland. I came across a massive development of McMansions on a former farm field - not a tree in sight, three acre lots, and giant houses. I used to be quite impressed by the size of those behemoths, but today, I was just annoyed at being the unwilling bagholder for those distressed mortgages.
Expanded money supply, high unemployment, and recession = stagflation?
U.S. spending its way to stagflation
So, how can we forecast a 4% to 5% inflation rate for 2010? If the recession is not over, shouldn’t we see deflation continue? The answer is somewhat counterintuitive, but it is not a new phenomenon, it is called stagflation. It was last seen during the 1970s, after the U.S. eliminated the gold standard and had to pay for the Vietnam War and the irresponsible spending programs of the late Sixties and Seventies. Inflation ran into double-digit territory at the same time as we experienced recession and high unemployment.
The administration’s lack of fiscal restraint is going to result in unprecedented levels of printing by the Fed. Under the current forecast, the U.S. Treasury needs to raise around $4-trillion to finance a $1.5-trillion deficit and to replace Treasury debt that is due to expire in 2010. In the last five years, issues of new Treasury securities have already climbed from a couple hundred billion dollars to $1.5-trillion in 2009, to double that in 2010. The debasement of the dollar that started in 2009 is certain to continue — and with it inflation will come, starting in 2010.
Unless the U.S. government reverses the current trend and cuts spending dramatically, inflation is soon going to accelerate to levels we have never experienced in this country. Never before have we had such reckless monetary policies, not even in the Seventies.
http://network.nationalpost.com/np/blogs/fpcomment/archive/2010/01/07/u-s-spending-its-way-to-stagflation.aspx
Fannie relaxes lending standards in Florida to boost the condo market
http://www.reuters.com/article/idUSN0720137220100107?type=marketsNews
The government relaxes lending standards which leads to more foreclosures, but continues to make the loans. Who gets paid here? Lenders, realtors, builders. Why not just give lenders and realtors and builders direct transfer payments, and stop with the blowback of moral hazard created by rewarding bad lending practices, setting the stage for yet more destructive practices in the future?
The core problem is that the government has stated its desire to stabilize housing prices (unsaid - at bubble levels). With that as the stated national goal, the government’s agencies will pursue that goal, trying to reinflate the bubble. I’m not surprised that government lending agencies would relax lending standards again. That will lead to more bailouts. I say - it’s clear the government is interested in keeping lenders and realtors and builders happy. Can’t they find some way to get them cash in a less destructive, and moral-hazard-prone way?
I don’t think stabilizing housing prices should be a national priority because it just winds up stripping wealth from home buyers and funnelling that to realtors, lenders and builders, concentrating wealth in the process. Forget about the anti-free-market repercussions and buildup of moral hazard.
I don’t care about clowns making loans to other clowns, just as long as I don’t wind up being forced to be the bagholder. And that’s what this is more of.
I continue to doubt that the real goal.. the long-term goal.. is to stabilize prices at current levels..
imo, they do not want prices to fall TOO fast, but they aren’t stupid, and they KNOW current (bubble) prices are simply unaffordable.. they are unsustainable.
Everyone is aware that prices must and will fall to the level of affordability.
——-
The main problem is (and remains) actually how to deflate the bubble without the financial system collapsing. The way to do it is to support lenders and resist gravity’s pull.
Stability will only be found at the bottom. Life will be good at the bottom. We all want to get to the bottom. We just don’t want to be smashed to bits in a free-fall.
“…but they aren’t stupid,…”
Given the evidence, that seems like a pretty strong assumption.
“We just don’t want to be smashed to bits in a free-fall”.
We would have already been at the bottom and rebuilding, if gubmint had kept their controlling grubby hands off. So now we’ll have huge distortions and drag this mess out for years to come, great plan!
Time to learn to speak Japanese? (Or maybe Chinese?)
Too late for me, but I can make suggestions to my kids…
I’ve thought for a couple years that the most valuable combination of languages to know going forward are English, Portuguese and Chinese.
Too bad Portuguese is so tough.
“The main problem is (and remains) actually how to deflate the bubble without the financial system collapsing.”
Yep. Totally agree. Everything else follows from this.
The Great Contraction is destined to roll on. How it is managed is the real issue, IMO.
My hunch (and I post it here because I am very interested in your take):
- The collectively optimal objective for international Megabanking cartel members would be a coordinated mutual devaluation of developed nations currencies, accompanied by ’stabilized’ (inflated through deliberate financial engineering) asset prices.
- Those who are not sufficiently wealthy or who are too skeptical about Ponzi schemes to own many real assets (or paper claims thereon) are the designated bag holders.
- Too many smart people in the global economy who understand the above motivations have already grabbed claims on real assets in anticipation of Megabank, Inc’s incipient attempt to devalue away all their problems. This demand for inflation hedges makes further coordinated asset price inflation / currency devaluation very challenging for the financial engineers pulling levers behind the curtain.
Un f/ing believable.
Seriously , if you own a home and are trying to sell it you will have to compete with rich condo builders who gabled and lost and are now getting federal help to sell their condo at the expense of your house or condo.
Apparently there just isn’t enough money on the planet for everyone to indefinitely enrich themselves on a housing market Ponzi scheme. Before the housing bubble is a terrible memory fading into the history of financial folly, bagholders will be indentified and will get stucco holding the bag.
Falling rents = Exhibit A in commercial RE crash:
* The Wall Street Journal
* COMMERCIAL REAL ESTATE
* JANUARY 8, 2010
Rents Signal Rise of D.C., Fall of N.Y.
By CHRISTINA S.N. LEWIS
The office market in Washington, D.C., is poised to topple New York as the nation’s most expensive, reflecting the declining fortunes of the nation’s financial center and the government expansion under way in the U.S. capital.
Rents declined in almost all of the 79 American cities tracked by Reis Inc., a New York based-research firm, in the fourth quarter of 2009. The largest fall was in New York, where average effective rents — or the net amount tenants pay after landlord concessions — fell nearly 20% to $44.69 per square foot annually. It was the sharpest decline in rents ever recorded by Reis since it began compiling data in 1981.
By contrast, average rents in Washington were $41.77 per square foot, down 3.3% annually. Reis estimates that by the end of this year, rents in New York will come down to around $41.07, slightly below their estimates for Washington of $41.27.
“The financial crisis hit New York hard, which is why it’s down so much, whereas the government is one of the few sectors that has actually added jobs,” said Robert Bach, chief economist for Grubb & Ellis, a Santa Ana, Calif.-based brokerage firm.
Nationwide, effective rents fell close to 9% last year to an average of $22.44 per square foot, Reis found. It was the largest annual decline on record. Meanwhile, the vacancy rate rose to 17%, the highest since 1994.
Washington’s ascent may be short-lived, Mr. Bach notes. While Washington, D.C., may remain strong relative to other cities, Mr. Bach said the city has a large amount of new construction under way, which could depress the market eventually. In addition, CBRE Econometrics Advisors, another research firm, estimates Manhattan rates at $60 per square foot, while the average effective rent in Washington, D.C., is $46. “I wouldn’t anticipate New York falling as far down as $46,” said Raymond Torto, CBRE’s global chief economist.
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Noted many times a couple years back, when those of us predicting that rents would eventually fall were endlessly pilloried by whole army of Eddies:
Other things being equal, falling rents imply lower equilibrium owner-occupied housing prices, as rental housing and owner-occupied housing are substitute goods in the household consumption function.
This point is obvious to the professional economists in the virtual room, but given the bevy of disinformation the REIC serves up to confuse basic economic concepts, I thought it was worth mentioning once again.
At what point did propping up the housing market become part of the Fed’s mandate?
* The Wall Street Journal
* JANUARY 8, 2010
Fed Plan to Stop Buying Mortgages Feeds Recovery Worries
By LIZ RAPPAPORT and JON HILSENRATH
The Federal Reserve’s pledge to stop buying mortgages by the end of March is sparking fears among home builders, mortgage investors and even some Fed officials that mortgage rates could rise and knock the fragile housing recovery off course.
Rates on 30-year fixed-rate mortgage have risen by a quarter of a percentage point in the past month to around 5.2%, according to HSH Associates, near their highest levels since September as the bond market has pushed up long-term interest rates amid signs of an improving economy.
The recent rise in mortgage rates could be a prelude to even bigger increases in coming months as the Fed steps away from support for the market. That prospect has some in the markets counting on the Fed to change course and keep buying past March, which many officials are reluctant to do.
When such a big investor stops buying, “that could lead to material increases in [interest] rates across the board,” said Ronald Temple, portfolio manager at Lazard Asset Management. He sees mortgage rates rising by a percentage point when the Fed stops buying. A withdrawal of government support, combined with high unemployment and rising mortgage foreclosures, could push home prices down 20%, he said.
The Fed now holds $909 billion of mortgage-backed securities. In the past year it has purchased 73% of the mortgages that government-backed Fannie Mae, Freddie Mac and Ginnie Mae have turned into securities. Purchases by the Treasury pushed total government purchases above $1 trillion. The Fed says it plans to top off its purchases at $1.25 trillion by the end of March, but must decide in the months ahead whether the economy is strong enough to stick with that plan.
The urgency of sustaining the housing market has sparked a debate inside the Fed. Many Fed officials don’t think ending the purchases will have a large effect.
If mortgage rates shoot up or the economy weakens, some Fed officials argue, the central bank might need to keep buying. But with the economy improving and the mortgage market already heavily dependent on government, other Fed officials are eager to get on with an exit.
“I think the economy is starting its recovery, and there’s reason to be optimistic,” Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said Thursday.
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I like the fact that Hoenig is for raising rates sooner rather than later (discussed above), but unfortunately it’s apparently for the wrong reason. His comment about the economy starting its recovery indicates he’s still got the Keynesian impulse that rates should be used to control the economy, just that he seems to be more optimistic than others about how well we’re doing.
(Which perhaps speaks even more poorly of him)
it’s apparently for the wrong reason.
But Hoeing said the same thing on interest rates when things were SLOWING down too in 07-08.
“What experience tells me, once inflation beings to rise systematically … even when the economy is slowing, once it gets to that point, the hardship for correcting that, at some point, is greater,” he said. “So by delaying your attention to inflation, you actually accelerate your problem.” Hoeing, Jan. 10, 2008, From the article, Economy slowing, price pressures rise: Fed’s Hoenig, Reuters
He’s also against TBTF doctrine, FOR the “Swedish” bank solution, greater transparency and a “systematic set of principals and a detailed plan to guide us.”
Hard to say. He might also be using the standard Keynesian justification as an artifice to cover up his deeper populist impulse to protect the value of the U.S. currency from debauchery.
A withdrawal of government support, combined with high unemployment and rising mortgage foreclosures, could push home prices down 20%, he said.
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Isn’t this exactly what’s supposed to happen in a “free market” economy? If the fundamentals aren’t there to support a certain price, then the price is SUPPOSED to fall. What is the problem here?
My, you are up early today!
Agreed that this is what is SUPPOSED to happen in a free market economy. Not so sure what is supposed to happen in an economy with a state-guaranteed banking system, where falling home prices are highly correlated with bank failures. Thanks to so many banks who got stucco with nonperforming mortgage loans and households whose rational self-interest dictates they would be better off walking away from an unrepayable personal debt than continue paying off a deeply-underwater mortgage, it is pretty hard to predict who the ultimate bagholder will be in this debacle.
A reasonable guess: Main Street American households who saw no profit whatever while Wall Street’s greed pig banksters walked away year after year with hundreds of millions of dollars in bonus payments will enjoy the misery of sharing the costs of the lending sector’s underwater mortgage problem.
“…Isn’t this exactly what’s supposed to happen in a “free market” economy? If the fundamentals aren’t there to support a certain price, then the price is SUPPOSED to fall. What is the problem here?”
Oil & Diamonds come to mind…
Green States vs Red states:
http://www.utahgasprices.com/Price_By_County.aspx
Now, if I could only find a map of Oil & Diamond storage facilities with levels of transparency…then couple that with the “financial liabilities” of “The Ones” who open & close the release valves, then I might be able to…
Didn’t catch the entire interview, but caught brief wind of the suggestion that Donna Frye believes a BK filing may best suit the deeply underwater San Diego city govt.
Home » News » 2010 » January » 7th »
Donna Frye Sounds Off On State Of The City
Donna Frye, elected to represent the 6th District on the San Diego City Council in 2001, is termed out at the end of this year. We talk with her about her advocacy of open government, the budget crisis of 2009 and what’s next in 2010, both for the city and for Frye herself.
By Maureen Cavanaugh, Pat Finn
January 7, 2010
Maureen Cavanaugh: At the end of last year, These Days conducted a series of interviews with the members of the San Diego City Council. We talked about the highs, the lows and the challenges facing the city in 2010.
But there was one City Councilmember, who, because of scheduling conflicts, got away. This morning, we’re very pleased to have her join us to conclude our series of city council interviews. I’d like to welcome Donna Frye, who represents the city’s Sixth District.
Let California drown, voters say
By: J.P. Freire
Associate Commentary Editor
01/06/10 5:24 PM EST
Most Americans oppose a bailout for California, according to a Rasmussen survey. Just 27 percent of voters believe the state should receive federal bailout money while 55 percent think the state should go bankrupt. (For the record, states cannot declare bankruptcy.)
This news comes as Arnold Schwarzenegger reportedly pushed against the health care reform bill as “health care to nowhere,” filled with “bribes, deals and loopholes.” Schwarzenegger has been on a rampage against the bill because the bill would increase costs for an already insolvent California budget.
Legislation was recently introduced in the legislature that would have actually prohibited municipalities in California from declaring bankruptcy. Why? Because doing so would allow these municipalities to cancel their current labor agreements, something unions fought for tooth and nail.
In other words, while California can’t even save itself, the federal government is compounding the problem by foisting more financial burdens on the state.
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As I have often pointed out here, if plankton dies, so do whales.
My question for those who suggest that California should drown:
If (economic) whales die, what happens to the countries in which they are situated? (Hint: Think TBTF…)
Don’t mean to suggest here that a near-term CA bailout is a done deal. For one thing, OBWan most probably would prefer having a D-ratic governor in the state house. Letting CA continue to wallow in unrepayable debt and, more generally, in economic hell, might be a useful national-level political strategy to help assist a D-ratic candidate on the way in. Given that CA has already endured a couple of years of economic hell, I don’t see why the state couldn’t gasp and choke its way across the finish line of a gubernatorial election without completely sinking before Help Finally Gets On Its Way.
There is also a modern precedent for blocking assistance to a political entity.
Well maybe we can deal with the Illegals, why should they get free health care when americans can’t.
Its time to bill Mehiko for the damages…or give us a Billion barrels of oil next year and we will take care of your people in our country …
Fair is Fair
The AIG fiasco is like a stain that cannot be washed away. As Lady Macbeth might have said, “Out damn’d spot.”
The AIG fiasco keeps getting worse
By Colin Barr, senior writerJanuary 7, 2010: 5:02 PM ET
NEW YORK (Fortune) — The AIG bailout isn’t going away, much as Treasury Secretary Tim Geithner might like it to.
The $180 billion fiasco was back in the news Thursday, after Bloomberg reported that the Federal Reserve Bank of New York prodded the troubled insurer at the end of 2008 to withhold some gory details of its bailout deal from the public.
The instructions came at a time when Geithner, who is now the Treasury secretary, led the New York Fed. Along with Fed chief Ben Bernanke and former Treasury Secretary Henry Paulson, Geithner was one of the key architects of the federal response to the economic meltdown of 2008.
The New York Fed says the final decision on disclosures always rested with AIG (AIG, Fortune 500), which since September 2008 has been propped up by multiple infusions of taxpayer funds. But the claim rings hollow, given all the bailout-information jockeying of the past year.
Around the time the New York Fed was striking details from an AIG securities filing, former Bank of America (BAC, Fortune 500) chief Ken Lewis was deciding not to let investors in on what a disaster the bank’s purchase of brokerage firm Merrill Lynch was shaping up to be.
Lewis claimed Paulson and Bernanke pressured him not to disclose growing losses at Merrill to shareholders — a claim the policymakers rejected and that many observers pooh-poohed.
Just a few months later, the Washington Post revealed that regulators at the Federal Housing Finance Authority had pressured executives at troubled mortgage financing company Freddie Mac (FRE, Fortune 500) not to disclose the cost of carrying out its expanded federal housing-market support duties.
In that case, Freddie Mac made the disclosure, though only after negotiating with regulators over its wording.
The common theme seems to be that government officials “don’t want to do anything to spook the public or investors,” said Peter Cohan, a management consultant in Marlborough, Mass. “Of course, then you end up with a lot of other fallout later, as we can see now.”
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