Bits Bucket For January 20, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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F.H.A. to Raise Standards for Mortgage Insurance. ~ NYT ~
The Federal Housing Administration, which is supporting the housing market by insuring thousands of new mortgages every day, is expected to announce on Wednesday that it is tightening standards.
Borrowers who get an F.H.A.-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of the loan, up from 1.75 percent.
Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.
Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.
———————–
This is one of the biggest scams out there. This 6% is included in the sales price, artificially raising the price of comps for new sales.
And it actually penalizes someone who isn’t going FHA. One of the offers I made in the past year was rejected, no counter. House ended up selling for full asking price with 6% back to the buyer at closing. FHA. The “net” price on the house was close to my offer. Had they countered, I would have gone up to that price.
“And it actually penalizes someone who isn’t going FHA.”
That’s exactly the point of D-ratic ‘affordable housing’ programs:
The government creates privileged classes of home buyers who get a leg up in the market, at the cost of government-sponsored discrimination against other would-be home buyers who don’t fit the government’s definition of ‘worthy homebuyer.’
The government creates privileged classes of home buyers who get a leg up in the market, at the cost of government-sponsored discrimination against other would-be home buyers who don’t fit the government’s definition of ‘worthy homebuyer.’
they wouldn’t do that with Health Care would they ……
“The government creates privileged classes of home buyers who get a leg up in the market, at the cost of government-sponsored discrimination against other would-be home buyers who don’t fit the government’s definition of ‘worthy homebuyer.’”
Exactly!
And the “best” part is how this rewards greed and stupidity while punishing the responsible.
The government creates privileged classes of home buyers who get a leg up in the market, at the cost of government-sponsored discrimination against other would-be home buyers who don’t fit the government’s definition of ‘worthy homebuyer.’
So someone who is in debt up to their eyeballs vs. someone 100% debt-free; and someone who has $0 money in the bank vs. someone who has at least 20% downpayment is the “worthy” homebuyer? Is this a parallel universe?
Eastcoaster,
How did you find out that it was 6% back to the buyer? Is this public information?
My realtor told me the sale price, the price the sellers gave back to the buyers (I did the math), and that it was FHA. All makes sense now.
I want to know the details on the house I lost this week. If it was another cash-back-to-buyer-at-closing deal and the “net” rivals my offer, I’m going to be mighty irked. And may just contact the selling agent with some choice words.
btw, Remax seems to be the worst company to deal with. PA is a dual agency state and I swear they abuse that to get double commission (I’ve heard others speculate on this as well). Wouldn’t be surprised if that was the case this week.
Thanks for the info, Easty. What a racket! Who needs the mafia when you’ve got the realtors.
Eastcoaster -
sorry to hear about your troubles.
Me and the wife are using Redfin (not sure if they’re in PA yet). We looked at two houses with a Redfin employee, both houses we walked out of she mentioned that she felt they were grossly overpriced, and that they weren’t nice houses and we shouldn’t even consider buying them.
We’ve been happy to use Redfin. They split the comission with you that they’d get as buyer’s agents; and in exchange you do all the legwork. They basically open up the house for you to look after you set up an on-line appointment to see the house. It works wonders.*
* (Except for the fact that everything is grossly overpriced still.)
But I bet she didn’t say that until you were walking out, did she? Not many realtors will persuade you to NOT buy a house, but the honest ones will certainly concur with YOUR decision not to buy.
When negotiating, we always offer to pay SELLER’S closing costs. Why should brokerage fees be included in the sale price? This takes a bite out of the Realtors’ fees and will reduce our taxes. It makes no sense to include brokerage fees in the sale price when you don’t add transaction costs into FSBO sales.
We do the same.
Excellent news… this should create some distance between my conventional familyu and NINJAs excercising their right to “own the dream.”
Now, raise rates, too, please and I should be all set in about a year and a half.
Never mind rates, bring back the down payments. Real ones. That’s part of why seller assists lured in buyers. If you roll the closing costs into the mortgage, and the seller “assists” you 6% of the price, suddenly you can buy a house without a down payment, even if the bank requires one.
btw, what % of a house price is closing costs? Isn’t it 2-3%? If so, then 6% is obviously meant as down payment assistance. and honestly, shouldn’t it be 1009′d?
“and honestly, shouldn’t it be [1099]d”
Of course it should. The IRS probably can start requiring it right now, under existing law.
Barack H. Obama last week called people who are legally operating S Corporations “tax evaders”, even though they are following the law to the letter….While at the same time he encourages home buyers to participate in all sorts of tax avoidance scams, some not so legal (like the 50% of people who lie to get the $8000 first time homebuyers credit)
I suspect the down payment requirements would be huge right now if the government wasn’t backing all the mortgages.
I expect home prices would be much lower right now for exactly the same reason, coupled with lots of other reasons (Fed MBS purchases, first-time buyer tax credit, zombie GSEs w/ $400 bn credit limit abolished, foreclosure relief, foreclosure moratoriums, allowing (encouraging?) lenders to hold homes off the market which should be on the market, etc etc etc)…
There’s no doubt that Fannie, Freddie, FHA, CMHC (Canadian) are all making really stupid loans that private business would not touch which is propping up the market. It will be interesting to see what public debt figures will look like once these ‘off balance sheet SIV type vehicles’ are added on.
PB, I actually don’t think the Fed MBS purchases are affecting the housing market that much. It’s not like the banks are actually lending the money out again.
“PB, I actually don’t think the Fed MBS purchases are affecting the housing market that much.”
- This is part of the Fed’s larger yield suppression program which also includes l-t T-bond purchases…
- Lower mortgage interest rates imply the buyer has a higher purchase budget constraint. For illustration, suppose the buyer could afford a $2000 monthly on a 30-yr fixed rate mortgage. Further suppose he buys with $8000 down. Without going overboard with complicating details, the amount of house he could afford on that $2000/month depends on the interest rate:
Rate / Purchase price budget limit (assuming $8,000 downpmt)
4% $426,922
5% $380,563
6% $341,583
7% $308,615
8% $280,567
You can see that going from 4% to 8% lops $146,000 or so off the home purchase budget…
Bingo PB. Seems like it also serves to keep standards looser, i.e. allowing banks to simply make loans that they wouldn’t otherwise make - or would make only with a larger downpayment and/or a higher rate. The banks can afford to make riskier loans because they’re not taking the losses on these loans, since the loans are packaged up in MBS and sold to the Fed.
If the Fed wasn’t buying, the MBS’s would be sold for much lower prices, or not sold at all. If they weren’t sold at all this means the banks would have to hold these as liabilities against their capital requirements, thus wouldn’t be able to make as many loans. If they were sold for lower prices the banks would lose money on them - big money. Thus they simply wouldn’t do this.
My take anyhow.
+1
Now, raise rates, too ??
I wonder if we are going to see it in any near term say, 1-2 years ?? Its hard to see any economic rebound sufficient enough to allow the fed to increase rates…IMO, it would be a death blow to a patient in intensive care…
For now, I am going with what I have for the past year or two…Low interest rates as far out as I can see… Rising taxes and costs in the things we must have like Insurance and municipal utilities…Deflation or Flatline in most everything else…Poor GDP performance outside of Government…. Stagflation…
Agree, but hope we’re wrong. IMHO, stagflation is the worst of all worlds.
“Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs.”
Dang! No more free cars and vacations rolled into the mortgage loans? It’s so not like 2005 anymore…
From CNN: The FHA will also require borrowers to have at least a credit score of 580 to qualify for the agency’s 3.5% downpayment program. Those with lower scores will have to pay at least 10%.
OMG! How about 750+ to get a gov’t backed loan?
They are also going to allow rapid flip properties to be purchased. Old rule was the property could not have been purchased within 2 years. Now it is getting reduced to 90 days.
Just keep digging the hole deeper.
Foreclosures, Bad Weather Probably Stalled U.S. Housing Starts.
Jan. 20 (Bloomberg) — Housing starts were probably little changed in December as rising foreclosures and inclement weather kept builders at bay, economists said before a report today.
Ground may have been broken on 572,000 houses at an annual rate compared with 574,000 in November, according to the median estimate of 70 economists surveyed by Bloomberg News. Permits, a sign of future construction, may also have dropped.
A projected record 3 million foreclosures this year will probably swell the number of properties on the market, hurting builders by making existing houses more attractive as prices fall. At the same time, the government’s extension and expansion of the tax credit for first-time buyers will probably help underpin demand in the first half of the year.
“There is risk of a further decline in housing coming from the dynamic of elevated foreclosures,” said Julia Coronado, a senior economist at BNP Paribas in New York. “Like the rest of the economy, there are a lot of speed bumps in the road.”
NPR reported this morning that these numbers were “surprising.” Were any of YOU surprised?
How about a Super Bowl home deal, with a free (added to the fha loan) big screen television? Better hurry, they won’t last!
Better yet: how about a free house with purchase of a big-screen TV? FHA loan included, of course.
Bad weather sure does drag down the housing market a lot more these days than it did back in 2005, when Florida flippers braved the tailwinds of hurricanes to snap up investment properties…
It’s Time to Freeze Government Wages
~ Real Clear Market ~ 1-20-10
There’s a recession going on, but you wouldn’t necessarily know it by looking at public employee earnings. If you work for the government, you’re far less likely than your private-sector counterparts to have been laid off in the recession, and you probably also saw relatively fast wage growth.
As states and localities continue to fight budget crises, they have an opportunity to close gaps by freezing employee wages. Because public employee compensation rose too fast over the last three years, they should be able to do this while retaining quality employees at least as well as they could back in 2006.
During the recession, public employees have done better than private ones on two measures: total employment and hourly compensation. Over the last two years, private payrolls shed 7.3 million jobs, but public sector civilian employment actually grew very slightly, adding 98,000 jobs.
This makes sense: public-sector layoffs cause anti-stimulative ripples through the economy, and governments might even capitalize on a recession as a good time to hire employees cheaply.
The trouble is, that’s not what they’ve been doing. Instead, they’ve been retaining employees expensively.
We hear so much about this, but every single municipal and state employee I know has not had a raise, and most of them have seen pay cuts, furloughs, elimination of overtime, reduced benefits, etc.
Exactly where are they finding these public employees who are getting raises?
New York - the just announced governor’s emergency budget cut less than 700 positions statewide. Knowing cuts in education and medical aid were coming several districts voted yes on giving local teachers and other groups some decent raises.
Fed employees still recieved COLAs this year.
By this year, I meant 2009. My mind is resisting the fact that it is 2010.
Well, TECHNICALLY, annual raises for federal employees aren’t COLAs, since they aren’t determined by CPI but by whatever number congress and the president pass into law. And yes, we have gotten one for CY 2010, (voted on back in 2009) and yes, that is stupid and wrong in these tough but low-inflation times.
I got the increase in my last paycheck. If you look at the final number after increased witholding for taxes, higher health insurance premiums, etc. and take into account the extra $5 per week I had taken out for charitable contributions (completely voluntary), my increase in take home pay is less than a dollar a week.
Not complaining at all. It is wonderful that the increase covered the higher health insurance premiums and the additional charitable contributions. I appreciate being able to stay even in a recession, though the safety of the job is worth far more to me. But the increase wasn’t anything to write home about.
COLA? For 2009 or or 2010?
I’ve heard Social Security recipients will not receive any COLA in 2010 because of the CPI.
Federal wages aren’t increased based on cost of living. There is some magic formula out there that determines how much federal employees are underpaid compared to private industry employees with similar jobs. That formula pegs federal employees as underpaid by something like 15%. (For example, I took a 20% decrease in pay from my previous job when I accepted this one.) Or it used to be 15%. I bet it is less now. Anyway there is a law (dont’ know the name) that mandates an increase in federal employees wages to the comparable amount if Congress and the President don’t make it some other amount. Since no one wants to see federal employees get a huge raise in one year, they always come to an agreement, generally in the range of 2% to 4%. The idea is that the gap will be closed slowly, rather than all at once.
Of course, this doesn’t mean that any individual federal employee makes 15% less than they could in the outside market. A lot of people who have worked for the government for 20+ years do get more than they could at a new job and probably more than they could at a private job where they had been an employee for 20+ years. Of course, in private employment, people get fired for getting too expensive with senority, so the comparison is a little odd anyway.
I have NO idea what factors went into the original formula. I don’t even know what the law is called. Obviously, it is time for the formula to be re-examined, especially to take into account involuntary furloughs that seem to be proliferating.
Yeah, the nature of Federal employment is different enough that any dollar for dollar comparison is pretty flawed. In the last year or so, they DID add some “invisible compensation” to my pay stubs. Stuff like the SS matching payment, the government’s share of my health insurance etc. I think the idea is to make people appreciate their benefits a bit more.
Polly - I’m curious as to your take on this article -
http://www.cato-at-liberty.org/2009/08/24/federal-pay-continues-rapid-ascent/
Not trying to bait - just wanting to get your side, being a Fed employee.
I’m getting a 404 - Page not found error. This is from IE directly, not any filtering program.
Can you give a summary of the argument in the article or a new link? I’ll try to respond.
Hmm - bad link I guess. Trying again manually…
www dot cato-at-liberty.org/2009/08/24/federal-pay-continues-rapid-ascent/
(replace “dot”)
will post hyperlink again in a sec…
General gist is that the author looked at the BEA data and found that - at a high level - federal civilian pay was increasing significantly faster than private, since 2000. However (as criticized) it doesn’t do apples-to-apples for similar job types, since that data isn’t available.
Apparantly the Cato institute doesn’t like direct linking. but if you go to their web page and search for federal pay this article is at the top of the list.
In general Federal compensation tends to be much FLATTER than that in the private sector, ESPECIALLY when you add in the benefits. Really, nobody gets rich, but most get a reasonably well off-middle class lifestyle, and everybody gets a pretty good health and retirement package, especially when compared to what low wage workers typically get. There aren’t big bonuses, or stock options, but the government won’t actually go out of business.
link
Jim, correct me if I’m wrong here, but this is the first year in a heck of a long time, that the general federal work force has not had pay increase parity with the military base pay increase, isn’t it?
I’d say that if the federal increase became higher than increases in salary for the private work force starting around 2000, it is because Bush had to agree to give the civilian feds higher increases in order to get higher military ones. Or that the Congress wanted higher increases for the military and then realized they would irk their civilian federal constituents a whole lot if they didn’t maintain pay raise parity. Or some other interpretation - I don’t keep up all that much with the politics of the federal budget - with the same basic results. Globalization and “winner take all” phenomena flattened private salaries combined with desire to increase military pay (for post 9/11 retention and related reasons) and civilian federal pay raise parity would make for federal pay scale outpacing private salary increases. Fairly easy to explain.
If the law I mentioned above kicked in around that time, that would also explain it - they were trying to slowly raise federal pay to the private sector equivalent, but I think that rule was in place a while before 2000, but Clinton managed to keep the raises more in line with overall private sector ones. Of course, back then, there were overall increases in private sector salaries, so it was easier to stay in line with the private sector and still have a non-zero increase.
Thanks. That makes sense. I don’t necessarily agree with it happening, but it makes sense.
I think the problem is that both sectors have tried to keep pace with each other w/regards to salary increases - the problem however is that it doesn’t take into account turnover due to layoffs. The private sector has a much higher turnover rate, and often people getting laid off take a lower salary in their next job (e.g. like I did recently; took a 20% pay cut in a new job). So each position by itself may get an average 5% per year pay raise - but the sum total of positions in the sector may only get a 2% per year raise. This works in favor of a sector with a lower turnover rate - which even if each position has the same 5% raise might however see a sum total of 4% per year raise when turnover is accounted for; higher than the 2% of the private sector.
(hypothetical numbers, to explain what I think has happened to some extent.)
We hear so much about this, but every single municipal and state employee I know has not had a raise, and most of them have seen pay cuts, furloughs, elimination of overtime, reduced benefits, etc.
The expensive government payrolls aren’t where you think they are… My wife is a union employee of a large Southcoast Mass city. She hasn’t had a raise in over 3 years and last year was forced to take a 10 percent cut in hours (essentially a wage cut as she’s paid hourly). She has more work than she can handle because they are short-staffed from the layoffs last year and now the city is proposing passing on higher insurance premiums and reduced coverage for her insurance. And before you say she is still overpaid, this is a women with a BS in Environmental Science and over ten years experience in her field, and yet, she barely earned 40k last year. She isn’t allowed to be paid overtime, as it isn’t in the budget, so if she works overtime, it is comped as time off…
Meanwhile, salaried managers/administrators haven’t seen any wage or staff cuts. The Police and Fire Unions continue to collect massive overtime pay and lock up the top 30 or 40 public employee incomes in the city (all over six figures). And don’t get me started on Teachers… or more specifically the Education Adminstrators like Principals/Vice Principals earning 150K/yr…
The State and Local governments, especially in Mass, are top heavy and the Police and Fire unions hold the threat of insecurity over our heads to justify high pay via overtime/etc.
“The State and Local governments, especially in Mass, are top heavy and the Police and Fire unions hold the threat of insecurity over our heads to justify high pay via overtime/etc.”
Sounds exactly like California. The Sacramento Bee did an expose not too long ago about firefighter and police salaries/overtime/pensions. Most 6-figure county/local/state salaries are indeed firefighters and police. Quite a cry from 20 years ago when these professions were among the lowest paid…now they easily make more than any engineer or scientist and are competitive with most general practitioners. In fact, in my little abode of Eureka, a 20-year neurosurgeon at the local hospital makes around $200K annually, his nurses make $110K/year, and the Cal-Fire batallion chief pulled in $140K. And, the unions’ pensions are absolutely criminal: 80-90% of gross pay after 25 years of service.
Sounds exactly like California. The Sacramento Bee did an expose not too long ago about firefighter and police salaries/overtime/pensions. Most 6-figure county/local/state salaries are indeed firefighters and police. Quite a cry from 20 years ago when these professions were among the lowest paid…now they easily make more than any engineer or scientist and are competitive with most general practitioners. In fact, in my little abode of Eureka, a 20-year neurosurgeon at the local hospital makes around $200K annually, his nurses make $110K/year, and the Cal-Fire batallion chief pulled in $140K. And, the unions’ pensions are absolutely criminal: 80-90% of gross pay after 25 years of service.
The State and Local governments, especially in Mass, are top heavy and the Police and Fire unions hold the threat of insecurity over our heads to justify high pay via overtime/etc.
——————–
Absolutely the same situation here. What many people might not realize is that the top-level/admin positions are really political positions. Lots of greasing of hands and “helping” the connected people out, so the administrative/political types can find themselves a lucrative position in the private sector after they’re done in the public sector. It’s the same way from top (Federal level) to bottom (municipal level). Very, very bloated at the top. The people who do the actual work (and I am including cops, firefighters, and teachers) are not the ones who are grossly overpaid.
BTW, if anyone thinks cops/firefighters are overpaid, why did they have such a difficult time trying to recruit new hires during the boom times?
—————–
The LAPD and police departments around the country are engaged in an intense competition over an increasingly limited pool of suitable people interested in becoming cops.
In Los Angeles, the department is fortifying its recruitment efforts in its drive to beat out other departments and attract the elusive recruit. The department has increased its full-time recruitment team from two to 12. It is offering a $1,000 cash reward to any employee who brings in a successful recruit. And recruiters are hitting the college job-placement circuits.
http://articles.latimes.com/2006/jul/02/local/me-recruit2
I’m with you CA renter for the same reasons. Where ARE they getting these figures?
“… and governments might even capitalize on a recession as a good time to hire employees cheaply.”
As in Uncle Sam wants you for the U.S. army.
When I was a Navy recruiter it was so hard to find quality folks to enlist that I prayed for a recession/depression. Seems that my prayers have been answered a little late. They’re having no problems signing people up now.
Mugsy,
I didn’t know that. Interesting. When I spoke w/ an Air Guard recruiter not long ago, he said that actually less than 15% of the males age 18-25 meet basic criteria.
H.S grad, no major legal issues, can pass the damned ASVAB and can actually do a handful of pushups!
Well they DO grant more waivers than they did ten years ago. And they raised the maximum age of enlistment too…
In many cases, public wages are effectively frozen by very low official inflation statistics, not to mention deep holes in public budgets. If you want to save monies on undeserved compensation, claw back illicit bailout-funded Wall Street bankster bonuses. It appears the President has already taken action.
Bear,
The bonuses are insult added to injury but they are the insult part of the problem. I’d like to see us go after more of the AIG bailout money. We should be going after the bulk of the TARP and if Citi is getting preferable tax treatment, in effect not paying off the TARP; Where did that money go?
We should also be looking at the structure. While it is probably most satisfying to go after bonuses, we need to focus on the larger problem. Like I’ve been mentioning, banks are driven to sit at the edge. Nothing has changed with reserves. Nothing has changed with leverage.
Government is corrupt (they make the rules) at almost all levels…They will never cut, or reform in any meaningful way..Unions are to entrenched and politicians sold out long ago…They will trim around the edges thereby throwing a little red meat to the howling private sector at the same time raising taxes & fees in every way they can…
Hold on to your wallets folks…The Greedy Hand cometh…I agree with Bill in L/A…Look for ways to reduce your taxable income….
Many states are going broke. It may get to the point where the union contracts are thrown out in a bankruptcy type court. They have been trimming round the edges, but time is coming when deep cuts will be forced.
In most cases (except probably last night with Scott Brown’s election), the majority of voters are tax recipients, earning less than the minimum taxable income. They have no disincentive other than to vote for more government spending and more perks from the productive class’s wallets.
California has for decades been beyond the point where “democracy is two wolves and a sheep voting on what’s for lunch.” Hence I can see where the only valid predictions for this state is for higher state income taxes, sales taxes, and hundred odd other taxes, as well as higher spending.
However California cannot touch your Roth IRA, cannot steal your municipal bond interest, and cannot steal your income from US treasuries. And if you buy and hold stocks for decades, then move out of California to a better tax situation, any gains on those stocks you sold in the new state won’t go to California.
In most cases …, the majority of voters are tax recipients… They have no disincentive other than to vote for more government spending and more perks from the productive class’s wallets.
U gotta be kidding me… Productive class?
Do people really think they are superior because they can do something that is more difficult to outsource? A tool and die maker used to be more productive than most now in America’s new “productive class” of paper pushers, bankers and esoteric code writers. I can’t believe what I just read.
What choice do the others have? Find a good factory job? Make a living by the sweat of their brow. Retrain for what? Those days are gone, outsourced by your “productive class.” Are you kidding me?
A few in the “productive class” might still have somewhat protected jobs due to certain expiring skills, brilliance or the luck of the draw but none of these members of the “productive class” should feel so smug and superior that they don’t recognize the damage being done to formerly hard working Americans.
The contempt shown to the average American worker’s current plight by the “productive class” is unconscionable and disgusting.
Advice: Stay in Brazil.
I’d rather have Rio right here in the good ol’ USA.
Excellent post, yet again, Rio.
i work for the state gov and I can tell you that I lost my raise last year with the furloughs I have to take, don’t get a raise this year, and don’t get matching in my 401K anymore. And we face more layoffs in the near future. This is MD … a state doing relatively well, budget wise, compared to most states.
My wife works for the local public library. No raises, furlough days, etc. The city also had some layoffs and closed open job reqs, and that’s with steady tax receipts. Of course they were used to tax receipts growing 3-4% every yery year, so for them 0% growth is a crisis. When It tell public sector folks that I haven’t had a pay increase since 2006 they look shocked. Then I tell them that last year HP had across the board pay cuts and you can see the horror in their eyes. Many really do believe that wages in the private sector are high and that its easy street.
WA state employee salaries have been frozen for some time.
In maryland most counties have have had wage freezes and layoffs for two years, as has the State Gov, plus (or actually minus) workers had to take unpaid furlough days off. The Gov just announced that the next budget will have layoffs, no pay raises, and 10 days mandatory unpaid furlough days.
If Maryland is doing this then most states are/will be doing the same thing.
“Luxury” condos in Phoenix on the road to foreclosure
“Most of the units in 44 Monroe, the swank, 196-unit luxury high-rise could be headed for foreclosure. The bank has filed a notice of trustee’s sale, the first step toward taking over 182 unsold condos.”
http://www.azcentral.com/news/articles/2010/01/19/20100119monroe0119-ON.html
Not sure, but i think every new condo tower in Phoenix and Tempe is now in foreclosure and/or bk.
lookn’ like it’s almost time to pick up that retirement/vaca condo on Camelback fer cheap
Is Camelback near Brokeback mountain?
Unfunded Benefits Dig States’ $3 Trillion Hole.
Jan. 20 (Bloomberg) — Everyone seems to know the current path of federal fiscal policy is a deathtrap over the long term. What’s peculiar is the relative inattention to the balance sheets of state and local governments.
Hidden behind accounting fictions, the politically unspeakable reality is that public employee pension systems are under-funded by more than $2 trillion. Add more than $1 trillion in unfunded health-care benefits for retired public employees, and state governments face protracted structural deficits ranging from challenging to insurmountable.
Unfunded promises are the equivalent of government debt. The burden of promises made by state governments to their employees — effectively an invisible wealth transfer from future taxpayers to current and prospective public-sector employees — amounts to about one quarter of U.S. gross domestic product. The strength and durability of the current economic recovery are unknowable; that state and local governments, which employ one in nine workers, will be a drag on that recovery is certain.
Ultimately, mathematically unsustainable trends must reverse. As with New York City in the late 1970s, eventually the federal government may get involved in redefining the services state and local governments provide, the benefits paid to public employees and the burdens on taxpayers. States cannot kick the can down the road ad infinitum.
“effectively an invisible wealth transfer from future taxpayers to current and prospective public-sector employees”
taxing current citizens for the benefit of others is redistribution of wealth and debateable as to the degree of acceptability or necesity.
taxing future, unborn and/or unrepresented citizens through the issuance of enormous debt for the benefit of others is tyranny.
+ 1 wmbz….Nice find…Everybody should print this out and tape it to the wall at your desk…It IS the elephant in the room….
The state of Illinois is perhaps the poster child in this regard. They have underfunded their pension for years and are now $53 billion behind per the lastest calculation. Yet legislators refuse to cut pension benefits for even NEW employees, and they refuse to raise taxes to pay for state obligations. Make a choice guys, you can’t have BOTH gold-plated pensions and low taxes.
Can we eliminate Medicare now?
Will all the debt older generations are running up, younger people won’t get it anyway, and the Republicans claimed that any attempt to do anything for younger generations now would threaten what they are entitled to.
And how about health insurance for retired public employees? If you followed the dealmaking there, you know that has to go.
I’m prepared to vote for something for everyone. Or nothing for anyone. This ripoff is flat evil.
“Can we eliminate medicare now?”
Good luck with that.
Old people vote in vast numbers.
and so do their grown kids
And if you got your wish, what would you envision happening…
What’s you plan?
And their grown kids don’t want to pay for their parents medical bills and have old mom and dad move in with them for their golden years.
i’m fine with my parents moving in and taking care of their medical bills….but not yours too.
So you have have lots of money available to pay for your parents medical bills, with or without insurance?
yes…a college degree…professional certification and an asston of 80 hour work weaks pays off.
weeks.
Michael, sweetie, do you know that an overnight stay after a procedure for your mom or dad will run you about $90,000? One little trip to the cardiologist to correct an episode of atrial fibrillation will decimate your life savings. One ICU stay near the end of life will cost you a million. You have no clue.
Michael, sweetie, do you know that an overnight stay after a procedure for your mom or dad will run you about $90,000? One little trip to the cardiologist to correct an episode of atrial fibrillation will decimate your life savings. One ICU stay near the end of life will cost you a million. You have no clue.
And of course those are $1.50 in a socialized system.
Sorry but I call BS on those numbers, especially in terms of cost vs. price. Health care’s gotten massively expensive, but a large portion of that is those that can afford it paying inordinately for those that can’t already.
Got a link?
calling BS on those numbers too sweetie…nice touch.
if the average cost of end of life care per person is $ 10 million bucks. (assuming they have more than one of those million dollar stays over 20 years) then they really need to fire up those printing presses.
What if the ballot read “Do you want government out of medicare?” That’d rope in the morons and probably get it passed. Or at least give their brainwashers a difficult bit of explaining to do.
Or better yet, “Do you want the government out of the military?” More than a few heads would probably explode trying to rationalize their position on that one.
not necessarily out of the military but a greatly reduced one.
see eisenhower’s speech regarding the military.
that’s because most people cannot see beyond next week. 50 years from now…the country would be better off if the government got out of medicare today.
would my parents or neighbors be better off? probably not…would their children and grandchildren be better off? yep.
that kind of vision is what is lacking in politics today.
Really? Because Medicare is cheaper and more efficient than private insurance and has fantastic customer satisfaction…
Surely it is in our interest to get rid of Medicare and throw seniors into the hand of the private insurance companies who will undoubtedly look after the best interests of the elderly.
50 trillion dollars.
And you would rather pay $70 trillion for private insurance that provides worse coverage? Is this the solution?
Or perhaps, just perhaps, we need to address spiraling health care costs in a serious manner.
Medicare advantage which is a program that allows private insurance companies to provide the benefits of Medicare costs something like 15% more than medicare per person.
I’m all for ending medicare. Good example of the government being unable to control spending.
Same as the pension problem.
What do you suggest, wmbz, as an alternative to Medicare if we cut out all government health insurance? Haitian health care - every man for himself?
I would suggest that families, friends, church groups and communities work together, save for the future and take care of one another.
i think it’s funny that everyone (cept mabye eddie) could see that free or easy money/credit creates excessive risk taking in the investment/banking world but cannot understand that the same concept exist in the social world.
Fat chance that’s gonna happen.
So my pastor or friends can perform the open heart surgery on my father? That’s a great idea.
???
LehighValleyGuy thinks church groups and neighbors should take care of each other as an alternative to Medicare.
Seems obvious the “save for the future” part implies that “take care of one another” refers to still paying real doctors to do the service.
I think we could have an alliance of the Catholic hospitals to controll costs.
My guess is that if we ended medicare that costs would fall significantly.
You know, around here we can understand that loans ON A MASSIVE caused a bubble in house prices. However, you suggest that LOANs to the government on a SUPER MASSIVE SCALE might be causing a bubble in medical care prices.
Also seem to be incentivizing not saving in so many ways here. The people don’t save because they EXPECT nanny state to be there for them. The government drives up costs and pays for it in loans which enrichs the wealthy even more. Also pounds the savers with inflation. That causes other programs to help the truely helpless to become more difficult. It also increases our taxes more than we receive in benefit, because as we all know you take it in the shorts with interest.
It looks like a downward spiral. The costs and fraud are outrageous. The cost of generating the money in treasury auction fees, purchased with zero interest loans from the Fed and paid to the holders with 4.5% interest to the rich guys… all together it is a big fricking mess.
There is an alliance of Catholic Hospitals. Google Catholic Health Association.
If you can find that they charge significantly less than everyone else, get back to us.
Polly. Will do.
I think it near impossible to tell in the current enviorment with massive government subsidies to keep medical care unaffordable.
What do you suggest ??
Cuba may be worth evaluating…
What do you suggest, wmbz, as an alternative to Medicare if we cut out all government health insurance? Haitian health care - every man for himself?
This is so predictable– yet again, Third World countries are being trotted out as the only alternative to massive government boondoggles. Apparently, prior to the start of Medicare in 1965, we were all rioting and slashing and burning each other in the streets, until the wise and benevolent Feds decided to give people health care.
“Apparently, prior to the start of Medicare in 1965, we were all rioting and slashing and burning each other in the streets, until the wise and benevolent Feds decided to give people health care”.
Yep, that’s what the big gubmint crowd would have one believe.
I have asked many times the same question and generally get gobbledygook answers. What happened before food stamps? I know, people were starving to death the country over. Knowing better, than waste my time, I quit responding.
They didn’t eat at all. Or they ate stuff like molasses and toast for breakfast. And dinner. On Sunday, you might get a bologna sandwich. At least in Dust Bowl Oklahoma.
William Manchester wrote in his book “Goodbye Darkness” (his memoir of being a US Marine in WWII) that something like 15% of the 1940 draftees were rejected by the military, due to the effects of malnoutrition.
There are still a lot of poor people in the US. My daughter’s boyfriend got government-subsidized breakfast and lunch, which at the time, were the only meals he could count on. (And if you’ve seen the kind of crap that most school districts are serving kids nowadays, nobody is doing him any favors).
At least until he started having dinner at our house every night. It didn’t bother me, especially after I heard what was going on behind the scenes. It was nice having someone who thought everything I cooked was great, vs. my finicky daughters.
Actually, prior to Medicare a lot of old people couldn’t get access to quality health care and died as a result. And at the time Medicare was implemented, health care was far more affordable than at present. Should you take away Medicare and let seniors fend for themselves with the private insurance companies, many would die due to poor and inadequate treatment.
“…….many would die due to poor or inadequate treatment”.
Which is why a lot of people (without saying it out loud) support the elimination of Medicare.
Especially if you can expand the definition of “Senior” to people age 50 or over.
Unless and until the beneficiaries come to believe they may end up in the same boat as those coming after, they’ll never be willing to do anything or forego anything for anyone else.
This is so predictable– yet again, Third World countries are being trotted out as the only alternative to massive government boondoggles.
Not the “only alternative” though. On today’s posts we’ve learned of satisfied consumers of the French and the Colombian medical systems.
Here’s another example, Brazil, a third world AND a first world country sharing the same space. I’ve known about 30 Brazilians who have lived in the USA AND in Brazil. NONE of them would trade the Brazilian system for the American health care system. Why? Because our U.S. system is pathetic. In the report below an expert even calls our system “pathetic”.
In Brazil, if you’re poor or temporarily low on dough you get socialized medicine. If you have some money you can buy good private insurance at an affordable price. What’s not to like?
Hey fellow Americans, Dems and Repubs, wake up! The American health-care system is a busted joke. We got third world countries with higher levels of satisfaction spending one third the money. Dang.
Europe and now THIRD WORLD COUNTRIES LAUGH at the American “health-care” debacle.
Here’s a world-report on the pluses and minuses of the Brazil universal system. It reports on the public plans more than the private insurance plans but I’m very satisfied with Brazil’s private insurance too.
http://worldfocus.org/blog/2009/01/26/the-highs-and-lows-of-universal-health-care-in-brazil/3768/
I think many that oppose socialized medicine don’t so much fear that it would be a disaster, but rather they fear it would work quite well. (Like it does in the rest of the world.)
No, Lehigh, Haiti is in the news so much that I chose it as just one example of third world health care.
40 years ago, health care was pretty simple - there were few diagnostic tests - plain xrays, a microscope for blood smears and urine samples, and few drugs or procedures that were effective treatments for few diseases. That’s why people used to die young, but almost anyone could afford to pay for things like a plain xray, a cast for fractures or penicillin for pneumonia. Now we have an incredible array of pricey tests, equipment, and procedures that allow us to fight diseases. Of course we have to use them and to continue to develop them. We also have to come up with a way to pay for them. Families and friends ain’t gonna cut it.
59% of Americans currently have employer-provided health insurance, down from 64% in 2000. When we get below 50%, the voters will demand coverage. It’s inevitable.
I sincerely hope so. I’d like to see something tangible for my tax dollars.
Anyway, I shouldn’t complain. If my future health coverage is threatened, I’ll just get my ass back to the UK.
Ahead of the Bell: Housing Starts
Report on home construction expected to give mixed signals on recovery
WASHINGTON (AP) — Housing construction likely grew for the second-straight month in December, but applications for building permits are expected to show a decline — a pair of mixed signals about the shaky housing market.
Economists surveyed by Thomson Reuters expect new home construction to rise to a seasonally adjusted annual rate of 580,000 in December, a 1 percent increase from 574,000 a month earlier.
Housing starts “better than expected” — WHO’D HAVE THUNK IT? Happy days are here again!
Economic Report
Jan. 20, 2010, 9:30 a.m. EST
Housing starts slip 4% in December; building permits rise
For 2009, new construction falls to post-World War II low of 554,000
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — Capping the worst year for housing since the end of World War II, U.S. housing starts fell 4% to a seasonally adjusted annual rate of 557,000 in December, the Commerce Department estimated Wednesday.
For all of 2009, an estimated 554,000 homes were started, down 39% from 2008’s total and the lowest on record. Starts of single-family homes dropped 29% to a record-low 444,000 in 2009.
…
Painted in the starkest terms, starts are down about 75% from the peak in 2006.
“This extremely depressed level of new construction should allow inventories of unsold new homes to enter the key spring selling season at reasonably balanced levels,” wrote economists for Morgan Stanley.
The December estimate of 557,000 was better than the 540,000-unit rate expected in the median forecast of economists surveyed by MarketWatch.
…
I don’t even understand why they compare anything against 2006. It would make more sense to use 2002.
Americans Grow Weary of Government Intervention in Marketplace.
~WSJ~
Republican Senate candidate Scott Brown’s surge in Massachusetts comes as a new Wall Street Journal/NBC News poll found increasing voter unease over the federal government’s expanding role in the private sector.
For the first time, a majority of Americans—53%—disapprove of the government’s increased role in the economy since the financial crisis, up from 44% in March. And 48% said Washington was doing too many things better left to businesses and individuals, a plurality seen in polling since September.
The government’s takeover of General Motors, the biggest economic intervention that happened solely on Mr. Obama’s watch, drew the strongest negative reaction. Nearly two-thirds of Americans surveyed, 65%, disapproved of the government’s taking a majority stake in the troubled auto maker. Independents were highly critical of the move, as were Republicans.
No surprise Marcia lost, the good news is this may help create more log jams in D.C. the less that comes out of the cesspool the better.
On the contrary, it may have put the final nail in the coffin of bipartisanship and ushered in a new era of Senate Democrats passing partisan legislation through reconciliation. To pass legislation without 60 votes, Dems need only refer to the Republican playbook.
There’s a new Talking Point out there that Obama “isn’t listening to the other half of the country.” I’ve seen it echoed (i.e. “dittoed”) here. Bush/Cheney never listened to the other half of the country, and their “half” was a whole lot smaller than Obama’s half. Obama tried to rise above that, and for his trouble received scorn from one side and shivs from the other. The question is, what will he do now? I really don’t know.
The partisan rift runs deep. The President is supposed to be the President of all, not just his political syncopats. This man got a majority because he promised to rise above. He has lost the majority because he has not. There is no evidence of sabotage against his virtuous agendas. There is no evidence of virtuous agendas.
…This man got a majority because he promised…
Does that mean the majority of us believe in a politician’s promises?
I thought 59 to 41 was a majority.
I had the voters in mind.
OK.. a majority of voters believe what politicians promise.
If true, it strikes me as amazing.
believe.. politicians.. hmm..
i dunno.. Seems there’s just gotta be some better explanation of why politicians get elected.
“I had the voters in mind”
As do “I” sir! They’re the real winners here. I’d have felt the same had it been a Rep. “lock” and “willable” seat since I’ve been in the 8th Grade.
What I think this marks the end of is; simply moving to a given area, Austin, BA ( or Portland for that matter ) and having a turn-key ideology you can just plug yourself into and let others do the thinking/heavy lifting and bask in the warmth.
Congrats to Scott Brown and all, but this ’should’ serve as a loud and stern warning to BOTH parties.
We’ll see. I’ll be encouraged when banks payments to politicians generates the outrage that banks payments to bank execs has.
There is no evidence of sabotage against his virtuous agendas.
I see two pieces of sabotage. The first is the Republicans filibustering (no cloture) everything, and I mean everything.* The second was the Primadonna 5 Dems in the Senate who extracted pound after pound of flesh for a cloture vote within their own party.
In fact, I believe it’s a good thing for Dems that Martha lost. The Primadonna 5 just lost a LOT of power, especially Lieberman. Vote #60 has infinte power, but vote #59 is worthless. Horsetrading is now worthless, which means that Dems don’t have to waste time catering to Republicans and their teebaggy townhalls. As said below, Obama may very well go Chicago. And I think Harry Reid is just chomping at the bit to do the same.
———
*blanket obstruction isn’t what the filibuster is for, but it’s within the rules so you can’t really argue spirit of the law etc. Now, if they brought back the stand-up filibuster al la Jimmy Stewart, it might get interesting.
This man got a majority because he promised to rise above. He has lost the majority because he has not.
I have to disagree with you here. Yes, he got elected because he promised to rise above. But he couldn’t rise above without help from at least a few moderate Republicans who would at least vote for cloture on bills, even if they eventually voted against the actual bill. It was the Republicans who have refused to rise above. Obama chose not to strike back (yet), and that’s why the base is staying home.
Blue Skye,
Fair enough, ( and Michelle M has already cautioned on some of the pre-mature revelry )
Still, it’s an incredible statement. Against the backdrop of Martha Antoinette Coakley just about ‘anybody’ should have been able to beat her. In a normal world?
One thing’s for certain. Both parties remain averse to accepting responsibility for their own failures.
“Obama chose not to strike back ( yet )”
What’s an Emegency Landing of Air Force One at Logan Int’l on a Sunday ( no less ) about? If there’s been any “striking back” it looks more like “lashing out” to me?
In spite of instances to the contrary, yes, they are standing in a circle and firing at will. Oxide, don’t look at this a Dem defeat. It’s not, rest assured MA is still… solid “Kennedy Country”. He’s just one guy.
The ‘victory’ lies in the fact that pols will find out that the one thing they can count on from here on out is that there is no “base” to count on any more! About time.
Why is this “cloture” thing good for you and me? My understanding is that it is a vote to have No Discussion. No debate, no public conversation, only back room deals. I don’t like anything about it. It would seem useful after exhaustive comments, but not before. When deployed at the onset it is just a bully tactic.
“…Why is this “cloture” thing good for you and me?”
Let’s ask the senators from the South:
“Filibuster was particularly heavily used by Senators from Southern states to block civil rights legislation.”
wiki/Cloture
Because cloture passes the Democrat’s plan, which is “good”, while if the Republicans do the same thing it is “bad.” Because, you know, Republicans are evil and Democrats are saints… or so we’re told despite all evidence that both parties are just 2 heads on the same hydra.
Why should I “hope” the Democrats can pass their BS and bring “change?” All our Dear Leader has so far is continued the failed policies of the past, but at a greater speed! Do we really want to add even more failures on top?!
Gridlock is the only hope at this point!
Why is this “cloture” thing good for you and me? My understanding is that it is a vote to have No Discussion. No debate, no public conversation, only back room deals. I don’t like anything about it. It would seem useful after exhaustive comments, but not before. When deployed at the onset it is just a bully tactic.
I believe (though I could be wrong) that cloture is only used to end filibusters - thus it doesn’t really prevent valid debate. Its main purpose is to not allow a very vocal minority to override a “supermajority” (e.g. see Hwy’s ref to civil rights legislation), though still allowing them to override a small majority (between 50 and 60%).
Well then, has it been used to end a filibuster or prevent one? If to prevent one, then HWY’s example isn’t to the point.
In what way are they smarter? I never understood that claim.
Last night on Fox News, Juan Williams stated that the word he was getting from the Obama Administration was they were moving toward “doubling down” on their recent goals of Healthcare legislation and Cap N Trade.
I guess we’re going to get a lesson in how it’s done in Chicago and it should be interesting to see if it works on the national scale.
And C-SPAN cameras will be allowed to record all that doubling down, no doubt.
(oooh, the transparency, it makes me tingle all over)
Transparency just followed bipartisanship out the window.
And C-SPAN cameras will be allowed to record all that doubling down, no doubt.
What do you mean? Are you talking about matters before the Legislative branch or Executive branch?
C-SPAN has never had carte blanche (nor should they), but generally they have much more access to the legislative process. I think the network’s access to Congressional matters remains largely the same. As far as executive transparency goes, the previous administration was one of the worst ever, certainly the worst in the modern era. So we have nowhere to go but up.
No I’m talking about during his campaign 0bama promised to let C-SPAN in to document the health care negotiations. And he did so at least a half dozen times at various events.
Jon Stewart of the Daily Show even did a piece about it.
Brian Lamb, C-SPAN’s CEO wrote a letter to the White House asking POTUS to make good on his campaign promises. This all occurred within the past month, the links shouldn’t be hard to find.
The 0ne repeatedly promised during his campaign to let the cameras record the bill’s progress. The network’s chief exec sent a letter to the WH asking them to make good on their pledge.
My other reply to your post hasn’t showed up yet, who knows maybe too many allcaps.
X-philly,
And ‘this’ more than anything is what has upset me about the guy. I am in no way saying John McCain or anyone else for that matter could contend w/ the economic issues we are now facing one-lick-better.
But damn it, how could BO have been more clear about his simple intentions on having this televised!? Many of his supporters here have been tap dancing around that for weeks now and I’m impressed by -none- of it!
Hope he thinks reneging on that simple promise was worth it? Not.
The answer as to why The One is a liar is simple: “Uh, it’s Bush’s fault! He lied!”
The supporters of The One will be blaming Bush (or comparing everything to him) until 2012 and beyond.
No I’m talking about during his campaign 0bama promised to let C-SPAN in to document the health care negotiations..
Ah, gotcha.
I have no problem with that in theory — though I’d note that Obama has no power to get his congressional counterparts to agree to open up the committee process to the public eye. Such negotiations almost always take place behind closed doors. I doubt it would be in the various congresspeople’s political interest to publicly air such a high-tension and already contentious reconciliation, either.
“…To pass legislation without 60 votes, Dems need only refer to the Repubican playbook”
Yes, Cheney-Shrub left footprints in the “procedural” sands for lil’ Opie to follow.
Master Yoda: “Around the survivors…a perimeter make.”
“Obama tried to rise above that…”
Instead of running against wall street, he embraced Bernanke, Geithner, the bailouts, and the bonuses. Instead of delivering affordable housing, he is creating more subprime lending and subsidizing future bank losses via FHA. It’s all more of the same but with even bigger deficits. Where is the change?
mrktMavenFL,
What a relief! Yeah, everyone has tried to make this solely about healthcare. It isn’t.
Yes, you can add this to the list:
India outsourcers hiring staff as US demand grows
By ERIKA KINETZ, AP Business Writer – Wed Jan 20, 9:15 am ET
MUMBAI, India – India’s top three outsourcing companies are ramping up hiring and increasing pay as global corporations, mainly from the U.S., send more work offshore to cut costs as they emerge from the downturn.
http://news.yahoo.com/s/ap/20100120/ap_on_bi_ge/as_india_outsourcing
Obama tried to rise above that
You funny.
Obama is a socialist with Chicago style politics. He method is to destroy anything that gets in his way to instill what he thinks we need for a glorious workers paridise.
Obama to GOP: ‘I won’ - 1/23/2009
Obama is a socialist with Chicago style politics. He method is to destroy anything that gets in his way to instill what he thinks we need for a glorious workers paridise.
You have enough talk radio buzzwords in place, you just need to work on your spelling and grammar. Then the talking point shall be complete!
To pass legislation without 60 votes, Dems need only refer to the Republican playbook ??
Yeah…Remember that ?? What goes around comes around…Pay back is a bi$ch ain’t it….
scdave, back in day… at the beginning of a new school class, you’d always find one out in the playground, away from the adults…a “TrueDeceiver’s ™” kid who could “dish-it-out” but “couldn’t take it” …goes running to a teacher, pointing a finger.
December 22, 2005
Cheney Casts Tie-Breaking Senate Vote Cutting $40 Billion to the Poor
“Yesterday the senate narrowly passed a budget bill to cut $40 billion dollars of federal spending by ending funding for foster care, child support and student loans. The bill would also impose new fees on Medicaid recipients and new work restrictions on state welfare programs
The $40 billion dollars in budget cuts is dwarfed by the $70 billion dollar cost of a Republican proposal expected to be voted on next year that would extend previous tax cuts enacted in 2001 and 2003. The contentious budget bill was passed by a 50 to 51 vote. Five Senate Republicans joined the Democrats in opposing the measure. Their combined votes would have led to a 50-50 tie. However, Vice President Dick Cheney cut short his trip to the Middle East in order to cast the tie-breaking vote.
As president of the Senate, Cheney was able to break the deadlock and pass the measure. Critics of the bill note that the poor and middle class would bear the brunt of the cuts. Democratic Senate leader Harry Reid called it “an ideologically driven, extreme, radical budget. It caters to lobbyists and an elite group of ultraconservative ideologues here in Washington, all at the expense of middle class Americans.” The American Council on Education announced this is the biggest cut in the history of the federal student loan program.”
political syncopats
I like that. Is that “synchronized patriots”?
You have to be kidding oxide. Obama has throw all sorts of big government, regressive socialist rhetoric out there. Over and over.
I’d expect a lot fo the welfare reform to be undone through his broad sweeping proposals to take over entire industries.
Cap n trade, healthcare, automotive to name a few. Not to mention keeping the worst of the Bush doctrine with respect to TBTF.
It has not been the change people needed. More of the same while expanding entitlements.
Not saying the (R) is a great alternative but such a large expansion of social welfare programs isn’t where people expected to go.
There has been improvement in Iraq and Afganistan mostly due to things that Bush had proposed. Not the withdrawl strategy and timelines that candidate Obama blathered about. Clearly those were some sweet little lies that you and a lot of others wanted to believe.
The reality is bonusgate is a distraction from the bulk of the money being stolen.
The reality is the bulk of the cost of medical care isn’t insurance. Again another artful distraction.
But go on keep chasing those ghosts and demons while worshiping at the (D) church. Are you a member of the reformed Labor Church of (D) or the Liberal branch of House of (D)?
“Americans Grow Weary of Government Intervention in Marketplace”
Crop subsidies for farmers, and food stamps for consumers.
Large ownership in GM, and auto financing for consumers.
Buy bad mortgages, and FHA mortgages and Section 8 for consumers.
Large stake in failed Wall street firms, and financial market manipulation through the president’s Working Group on the Economy.
Free market capitalism works!
Government strategy to killing the free market:
- Utilize myriad visible and stealth interventions to cripple the ability of the free market to function.
- Undermine the rule of law that is a necessary underpinning for a well-functioning free market.
- Use the FUBAR operation of the defunct free-market as evidence that free markets don’t work, in order to politically justify a high level of government intervention.
Ahem, for the uninitiated…
FUBAR:
definition: F@cked Up Beyond All Recognition
( There IS no “2)” )
…Beyond All Recognition
Beyond all Repair
Prof Bear,
BINGO! You got it exactly right especially as it relates to healthcare.
I think you nailed it, PB!
This is precisely the same strategy that republicans (ie free market) has been using to kill government. Payback is a beeyotch.
?
It’s the “Starve the beast” strategy. The idea is that Republicans screw up government on purpose, in order to make the people hate government. As a result, you get people like Reagan to come in and deregulate the whole mess, which led to what is happening today.
Then when Dems finally win and try to govern, they can’t fix much because the gov incompetance is so entrenched. People get impatient, “throw the bums out,” and Repubs swoop in yet again and make government even worse while they use the power to steal some more. This has been going on for 40 years.
“Starve the beast”
And who, exactly, is ‘the beast’?
- Conservatives think it is big government
- Liberals think it is Megabank, Inc
- Libertarians think it is all of the above
- I think ‘the beast’ is US
Exactly, oxide.
But you left a very important part: their mantra of “Smaller Government” has instead created more government CONTRACTORS, thus costing more.
Now who do you think are getting all those contracts?
“Less government” has been the biggest scam.
“…Government strategy to killing the free market:”
Free Market strategy to making Government rules irrelevant:
Indemnify Corporations
US Bancorp profit rises, but so do charge-offs
By JOSHUA FREED
The Associated Press
Posted: 7:56 a.m. Wednesday, Jan. 20, 2010
MINNEAPOLIS — U.S. Bancorp says its fourth-quarter profit more than doubled from a year ago, as mortgage banking revenue grew.
The bank says it also benefited from growth in traditional deposits, giving it a cheap source of money for loans.
But it still wrote off more bad loans during the quarter, and expects those write-offs will increase in this quarter as well, because of economic conditions and weak home prices.
US Bancorp said Wednesday it earned $580 million, or 30 cents a share, for the last three months of 2009, up from $259 million, or 15 cents a share, a year ago.
The profit and its $4.38 billion in revenue were better than analysts expected.
Net loan charge-offs were $1.11 billion, up almost 7 percent from the third quarter.
Passenger Planes have been leaving the Port au prince Airport in Haiti , completely empty , yet there are hundreds , if not thousands of American citizens with US passports desperate to leave that torn country . Those without the means to go out through the DR are stuck there ,for now .
You see the US is in charge of the airport , and Homeland Security has decreed that since they are not allowed to profile between desperate Americans , and sneaky terroists , no one flys until the computors are back up, there, and the ”Watch” lists can be checked to keep the bad guys off the planes .
Talk about big brother thinking , it’s here .
There could be tons of Al Qaeda operatives surreptitiously trying to board red cross chartered aircraft as we speak! Bring on the full body scanners!!!!!!!!
What a bunch of wimps we’ve become.
One of the few groups in Haiti operating hospitals is the Israeli Defense Force. They set up mobile hospitals in tents and are treating many people.
http://www.jpost.com/servlet/Satellite?cid=1263147891096&pagename=JPost%2FJPArticle%2FShowFull
So what do mainstream African Americans think? They, along with other “Liberals” are saying that Israel has gone to Haiti to “harvest organs”: http://www.ynetnews.com/articles/0,7340,L-3836929,00.html
One of the reasons that I, who am fundamentally a Liberal, sides with Conservative politics. The Liberals in this country have some very dangerous, crazy beliefs, rooted in hate.
So what do mainstream African Americans think? They, along with other “Liberals” are saying that Israel has gone to Haiti to “harvest organs” … The Liberals in this country have some very dangerous, crazy beliefs, rooted in hate.
What are you talking about?
There’s nothing “liberal” or “mainstream” about that idea, just as attempts to tear down the wall between church and state or infringe on citizens’ privacy are not truly “conservative” ideas.
Don’t worry Reuven, that man is not a mainstream African American. He is an extremist.
Do you have a link? I am hearing the opposite… they are taking out Americans on empty and returning aid planes. They’ve even taken out a couple flightloads of Haitian orphans and kids whose adoption was already in the works. Other countries are ticked their nationals aren’t getting out as quickly.
It might help if they bought their own C-17s and C-130s, instead of continually relying on Uncle Sugar”s airlift.
Of course, a lot of it depends on how many airplanes the facilities at the airport can handle per hour, too.
7
Heckova job, Brownie.
Now let’s see if Sen. Scott Brown has actual Republican principles or is going to sell out to the Wall Street whores of the national GOP leadership.
I doubt it. The more things change, the more they stay the same. I’m guessing Sen.-elect Brown will be just another face in the GOP crowd. And do we really think Brown will be re-elected? I doubt Mass. turned Republican overnight.
So we are predicting there will be no more Ronald Reagans? No more Barry Goldwaters? No more stock bull markets? No more sunny days?
Regardless, there has to be some upside, thanks to the greater likelihood of legislative gridlock (more gridlock = less costly and harmful legislation…).
I’m not so sure “gridlock” is working anymore.
Sometimes even a bad/sub-optimal plan is better than no plan at all.
At least a bad plan has the benefit of being tried, and is subject to revision.
The alternative is to continue with “Free Market” principles, which really mean giving Wall Street a license to steal, while J6P and Main Street continue to slide down the poop chute.
I loved gridlock during the Clinton administration. I’m not so sure about now.
Two years ago a lot of us were worried that 2010 would look like Argentina after its default. Probably all of the government interventions and bailouts have at least deferred collapse. Some would like to just get it over with and have the government stop trying to prop up the system. Some days I feel that way. Other days I think that this prolonged fall is the better way to go.
“And do we really think Brown will be re-elected?”
The Mass democratic party will have to come up with a candidate that the middle can support. Sounds simple but some of the best candidate rarely comes out of the primary.
SS,
Totally agree with your post but this article made a good point and I would add that those that take the risks should pay if the risk turns sour.
It doesn’t matter if Brown is a liberal or conservative Republican
“Reihan Salam and Andrew Sullivan are arguing the finer points of Scott Brown’s ideology. That’s fine to do with a president or a governor, but it’s misleading with a legislator. Kit Bond, for instance, is one of the most liberal Senate Republicans. Jon Kyl is one of the most conservative. Have you noticed any major difference between their voting records? Do you think that Democrats are much likelier to secure Bond’s vote on a controversial issue than Kyl’s vote?”
http://voices.washingtonpost.com/ezra-klein/2010/01/it_doesnt_matter_if_brown_is_a.html
I think the same is true of moderate vs liberal Dems. So, when it comes time to vote this fall I might have to decide to vote for McCain when in reality I would rather vote for a rock.
The more I think about it, I think we should throw them all out and start all over.
“throw them all out and start all over”
exactly.
Well, the guy hasn’t even been sworn IN yet, so I’ll reserve judgement for now. I enjoyed his story about driving around Central MA and seeing a home made campaign sign on a front lawn ( that he hadn’t actually put there himSELF! )
Finally, a sensible post. Everyone predicting doom before he gets in office. I suppose these doom predictions were the same before inauguration day, 1981 just before morning in America.
That day led us to this one!
“Morning in America” yeah right you mean “Swipe the credit card and say deficits don’t matter.”
I think the same is true of moderate vs liberal Dems.
Total BS. If the moderate Dems had the same voting record as the liberal Dems, we would all be signing up for a Public Option.
My understanding is that he was against the tax on large banks recently proposed. Meet the new boss same as the old boss.
Housing starts tanked. Can you say “double dip?” I knew you could
Actually, I’m not sure how much more reduced housing construction can subtract from GDP. Diminished starts just bring equilibrium closer.
Traditionally, housing has pulled the U.S. out of recession. Best look elsewhere this time. What was the source of demand that pulled the U.S. out of the Depression. Uh, perhaps a third option is available.
They may not diminish GDP but they certainly won’t add to it. One more economic piston of the American engine is cracked. Maybe all those government jobs they’re filling will help…
Diminished starts will EVENTUALLY allow us to grow our way out of the huge excess of housing that was thrown up during the bubble. It’s part of the long term answer to our problems, but like diet and exercise it’s no fun so expect lots of whining.
+1
The key to getting back to equilibrium is getting this number back to historical norms. A low housing starts number is key to that.
Thought another key too is general economic prosperity (true prosperity). Otherwise even if housing starts remain low - inventory won’t be reduced because people are consolidating into multi-family residences, which is what’s happening right now. Eventually though the consolidation will slow as we reach a true bottom, and population growth will cause the trend of housing occupation to reverse, and start to reduce the empty inventory.
Jim A,
Yep, it was a -total- misallocation of resources to begin with. The treadmill is your new best friend. Start liking it!
Military machine up and running, check.
nycjoe,
I like the suggestion of sending those w/ the necessary skills and qualifications down to help rebuild Haiti. It would be a start?
BofA loses $5.2B in 4Q as it repays bailoutJanuary 20, 2010
8:03 AM ET
All Associated Press news CHARLOTTE, N.C. (AP) - Bank of America Corp. said Wednesday it lost $5.2 billion during the final three months of 2009 as consumers struggled to make their mortgage and credit card payments and the bank repaid its government bailout money
Amazing how important those bonuses and high pay levels are. They’re even willing to take a big loss to get them. Seems a bit… topsy turvy.
Reward top management, screw the shareholders and taxpayers…
Sounds like something you learn with a MBA.
I have a problem with this whole bank loses money but still pays bonuses crap. If your bank loses money, you don’t get a bonus. Individual performance needs to be tied to company performance. Simple as that. Your individual performance really doesn’t mean squat if ultimately what you are doing and getting rewarded for does NOT result in being the right things for the success of your business. Why is this so difficult?
The reason it is so difficult has to do with the Wall Street — Washington symbiosis:
1. Systemically risky Megabanks get free (Main Street funded) too-big-to-fail bailout insurance
2. Megabank, Inc’s lobbyists make sure Washington politicians get plenty of campaign contributions
3. Once elected, Washington politicians maintain right to pay bailout claims as needed out of the unannounced TBTF insurance program
4. With bailouts when times are tough and gargantuan profits when times are good, Megabank, Inc has plenty of cash to pay humongous managerial bonuses plus campaign contributions to pols who, once elected, will ensure the TBTF insurance program continues indefinitely
—————————————————————
Other than getting screwed by the uncanny tendency of the Fed’s helicopter drops of cash to land on Wall Street, whether in the form of profits or bailouts, where does Main Street enter the above picture?
I suspect the banks didn’t like the strings attached to the TARP money (executive pay pressures). They certainly didn’t enjoy paying the penalty for withdrawing from the program.. but they got out as soon as possible regardless.
And I think there will need to be another round of TARP assistance. Maybe two or three over the next couple years.
I’m thinking there will be lots and lots of bank PR work over the next few years, as PR prostitutes are hired to generate propaganda that offsets the perception that the Wall Street banksters stole hundreds of billions of dollars public monies.
Would you agree?
hmm.. hijack the thread whydontcha..
Bank propaganda? Why bother with it? Who would they need to propagandize?
————–
We’re discussing the positives and negatives and potential consequences of banks repaying TARP funds.
Do you have an opinion on this topic?
“hmm.. hijack the thread whydontcha..”
When in Rome, do as the Romans. And you are one of the best Romans on the blog, pal.
Thank you very much, PB.
And you are one of the best.. one of the best.. You are certainly one of the best..
I’m absolutely positive you excel at something too.
I’m not a PR hack, if that is what you were trying to spit out…
There won’t be another round of TARP assistance. It would be political suicide. It would politically more popular to socialize the banking system and be done with it.
Public Option bank for a straight up checking account.
Public Option FHA for a loan with 20% down.
No more 30-day loans for businesses - they can build up their own 30 day buffer.
No more leverage for the big boyz corporation — if they want to expand, they can save up and/or raid their bonuses and salaries.
We obliterate the credit system and go back to Grandma’s life of Cash&Layaway.
There would be blood in the streets, but at least there would be blood in ALL the streets, including Wall Street. Politically it’s more viable than any more TARP spigot.
I read that the poster-child of objections regarding how the recovery is being handled is the General Motors takeover, now 65%? owned by the US Treasury (but soon to be offered to the public as an IPO)..
Why on earth would people object so strenuously to that, and yet somehow prefer banks be taken over, rather than just serve them another shot of TARP?
Exactly. No new TARP. A few legislators might try, but they will never be able to pass it. It will be a generation before they can do anything other than give more money to the FDIC, keep silent in the face of quantitative easing, etc.
Homeowners opt to flee instead of fight as loan modifications start to lose luster
Palm Beach Post Staff Writer
Posted: 1:59 p.m. Sunday, Jan. 17, 2010
Desperate homeowners scrambling to get a loan modification through federal foreclosure relief programs are beginning to shun the offer, opting for a strictly business approach to the dilemma — walking away.
Because the majority of modifications don’t reduce the principal payment on loans made during the overpriced boom years, underwater mortgages could still be drowning 10 years out.
The better option for those borrowers, some say, is to take the hit now and attempt a short sale, deed in lieu, or even allow their home to go into foreclosure.
“What motivation is there for a homeowner to pay a mortgage that is three times more than the property is worth?” said real estate attorney Rashmi Airan-Pace, whose Coral Gables firm Airan2, Airan-Pace and Crosa specializes in foreclosure defense.
Recently, Airan-Pace secured a modification for a Miami Beach client that shrank his monthly payment from $3,700 to $1,600. But it was only a reduction in interest rate — allowed by the Home Affordable Modification Program to go as low as 2 percent.
“I called him in and he said, ‘I’m not signing this,” Airan-Pace recalled.
He owed $470,000 on a property worth less than half that.
“Many homeowners feel that if they take a modification now, a decade down the road, they’ll still be coming to the closing table with money,” Airan-Pace said.
Lenders’ reluctance to reduce principal amounts on loans made during the overpriced boom years is a problem for the Obama administration’s $75 billion program to protect homeowners from foreclosure.
The Treasury Department’s December report on the program, released Friday, showed that just 17,280, or 26 percent, of permanent modifications awarded nationwide included either a reduction in principal or, more likely, a temporary reduction that is tacked on at the end of the life of the loan.
Through December, 66,465 permanent modifications had been awarded and accepted by the borrower through the program. But that’s still just 2 percent of the total number of eligible loans that are 60 days or more in default.
Just 8,405 loans in Florida received a permanent modification.
Even if the numbers improve, some real estate experts aren’t optimistic that Making Home Affordable will save troubled borrowers or the economy, especially in such hard-hit states as Florida where home values took epic plummets.
With 46 percent of mortgages in Palm Beach, Broward and Miami-Dade counties upside down in the third quarter of 2009, according to analysts at Zillow.com, Airan-Pace predicts more homeowners will snub modification plans that don’t cut principal payments.
That’s a departure from the current clamor to receive a modification.
Well there are plenty of people for whom walking away may be the best answer, but I don’t think that owing THREE TIMES what the house is worth is particularly common. I’m not saying that there aren’t cases Miami Condos where thats true but many more people are probably looking at being 20-30% underwater. Which with bubble pricing is probably something like being underwater by their gross annual income. Is your credit rating worth a year’s pay?
For sale
706 Duchess Ct Palm Beach Gardens, FL 33410 $170,000
3 Bed, 2 Bath | 2,511 Sq Ft
Single Family Home
Property Information for 706 Duchess Ct
Property Features
Single Family Property
Status: Contingency
County: PALMBEACH
Subdivision: Evergrene
Year Built: 2005
3 total bedroom(s)
2 total bath(s)
2 total full bath(s)
Palm Beach County
Property Appraiser’s Office
Property InformationLocation Address: 706 DUCHESS CT
Municipality: PALM BEACH GARDENS
Parcel Control Number: 52-42-41-25-12-000-0360
Subdivision: EVERGRENE PCD PL 9
Official Records Book: 19462 Page: 1888 Sale Date: Oct-2005
Legal Description: EVERGRENE PCD PL 9 LT 36
Owner InformationName: FAULK CHERYL &
Mailing Address: PO BOX 52
ETHRIDGE TN 38456 0052
Sales Information
Sales Date Book/Page Price Sale Type Owner
Oct-2005 19462/1888 $432,710 WARRANTY DEED FAULK CHERYL &
“I’m not saying that there aren’t cases Miami Condos where thats true but many more people are probably looking at being 20-30% underwater. Which with bubble pricing is probably something like being underwater by their gross annual income. Is your credit rating worth a year’s pay?”
I think it’s more than just whether someone is somewhat upside down versus hugely upside down. If the cost of paying for that upside down house wasn’t too different than the cost of renting and was generally affordable, one could much more easily decide to ride it out and keep making the payments even though the property was upside down. But when the cost of owning is substantially more than renting and not generally affordable, it’s much more tempting and rational to consider walking away.
“Homeowners opt to flee instead of fight as home modifications start to lose luster.”
From the micro level this is probably the right thing to do, but from a macro level … we’re screwed.
Trillions of dollars of bank collateral will go poof.
At some level they already have gone poof. The question is what are we going to do about it? Will we recognize it is or pretend that it is still there? And what will we do about the little girl in the corner insisting that the emperor has no clothes? Listen to her, or muzzle her to make sure nobody hears her?
“The question is what are we going to do about it? ”
We are not going to do a damn thing about it. But not to worry, thanks to Barney Frank we have $4 trillion set aside (well we could print it up in a hurry) for banking crises II. Coming soon to an economy near you.
Mike,
Yeah, this is just insulting. There are plenty of people that would love to get the deal this guy got and evidently 2% money just isn’t working for him?
Hey! I thought RE was all about the cost of money!?
They have already gone poof, but what about the new “oh forget that nasty mark-to-market thing” rules? Are those just for bonds, or are they for directly held loan assets as well? Because having no reserves and having to report to regulators that you have no reserves are two different things.
Ok 26% are actually getting the modification…
So, according to my thinkn’ the other 76% are going to :
Foreclose
Short Sale
Walk away
Hmm, I still may get a deal this Spring/Summer in NoVA..
Anyone have a clue when the majority of these will “hit”?
You might want to reread the article. Only 2% of elgible FBs are getting mods.
Thanks Combo - ok 98% will
Foreclose
Short Sale
Walk
So again I ask, when will the majority of these “hit” or does anyone really know………………………?
Of that 2%, how many of the reupFBs will be refubared in the near future?
Job loss
Divorce
Illness
Taxation
Depreciation
Death
Despair
I’m guessing half!
So 99% ??? Good grief!
I guess I can wait another 3 years for my home purchase in NoVA….
Good question, as with so many people involved it’s impossible to say if the controlled descent (thus far) is sustainable or if something spooks the herd and it falls apart.
That’s why the maangement of popular expectations is so crucial. So far it’s been a “recovery is 6 months out” approach - but that approach has a lot of inherent risks. They’d be better served to tell it like it is and get the populace prepared for a drawn out event.
Starting in April, the HAMP bill supposedly forces banks to accept short sales or “in lieu of forclosure” walk-aways, for those who started the HAMP process but are not converted to permanent modifications. There could always be more legislation to overturn this. This is also when the revised home-buyer credit ends(again, subject to another extension), so after that, you might see people getting worried and more properties dumped on the market.
Looks like a double-wammy after April, but then again, they will extend & pretend with all these helpful Programs ( HAMP & Home Buyer Tax credit)
I’d like to see both Programs “expire” & see what would happens to RE prices then………
” “I called him in and he said, ‘I’m not signing this,” Airan-Pace recalled.
He owed $470,000 on a property worth less than half that.”
While I tend to side against the lender in cases like these for writing the loan in the first place, this guy clearly thought the house was worth what he paid, or at the very least he thought he’d make gobs of cash when he sold.
The sense of entitlement of some of these borrowers is quite breathtaking. This is the type of borrower that I feel should be banned from buying again for at least 15 years without at least a 50% down payment. Of course, with the govt continuing to backstop things, fat chance of that. Hopefully the lenders have come to their senses.
I read a Q&A in today’s Sacramento Bee. Seems that there were two sellers in a 2009 short sale, but the lender sent the 1099 for the entire amount forgiven to one seller, and is refusing to change it. Oops! This is going to be a huge Joshua tree pain for investor groups trying to unload houses. The person at the top of the list carries the entire tax burden. Can you imagine the phone calls and letters this guy is going to have to write to lenders and the IRS? And his partners probably won’t cooperate, because they get off scot-free!
“Seems that there were two sellers in a 2009 short sale, but the lender sent the 1099 for the entire amount forgiven to one seller, and is refusing to change it. Oops!”
Does it matter? I’m not familiar with all the details, but didn’t Bush forgive that tax debt on mortgage deficiencies through 2009, and then it was extended by Obama?
I just talked to a colleague who wants to move to PA, but is upside down. When I mentioned a short-sale or walki g, he said, “no way, that would ruin our credit. How would we buy a house in PA?” I said, “rent one” and he countered, “but we want to have kids!”
Amazing.
Looks like he’ll remain your Colleague for quite a while then!
A very large portion of people equate “rent” with “cramped apartment”.
A thought - seems like this can partially be chalked up to Hollywood. E.g. how many sit-coms are actually made that show:
A. A family living in a single-family home that they own? (Lots)
B. A family living in a cramped apartment they rent? (Lots)
C. A family living in a single-family home they rent? (None that I’m aware of)
As opposed to renting a magicly huge apartment in Manhattan? And in how many sitcoms is it actually discussed whether they’re paying a mortgage or rent? If it’s not a plot point, it never comes up.
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it complicated financial system that hides it.”
Seems to be implied by virtue of house-livers never having to deal with a landlord, and oftentimes the plot does include things like them doing remodeling, etc., which of course you wouldn’t do if you were a renter.
P.S. I say this, but I haven’t watched much TV the last 6 or so years - right about the time I started having kids, not coincidentally. Adult TV at least. Not that I’ve ever been a big TV watcher.
Didn’t mean for that part in italics to be there. Ignore that.
Well, he can always bring a check to closing…. Which is why I object to the usual definition of a “short sale” as needing permission from the lender to sell for less than you owe. You don’t need permission to sell for less than you owe. You need permission to repay the lender less than you owe.
I just talked to a colleague who wants to move to PA, but is upside down. When I mentioned a short-sale or walki g, he said, “no way, that would ruin our credit. How would we buy a house in PA?”
As I mentioned a few weeks ago, my wife turned down a good academic job in CA, mainly because we didn’t want to move farther from friends and family.
Now the epilogue: My wife’s boss was just offered a good job in the NYC area, but reluctantly turned down the job because he and his wife discovered they’re underwater on their home. (It’s a nice house, and they can certainly afford the payments.) I’ve been warning him about just that scenario for years now (he scoffed), and it’s finally come to pass.
ET, that must give you a certain amount of morbid satisfaction. Just don’t expect him to acknowledge it. I have lots of people who ignored my advice and lived to regret it, but not one of them has told me that I was right.
I am really breaking my, “don’t post from work” rule today, but it’s a slow week.
Anyhoo, I have mentioned before that I write music (freelance) for a company that provides tracks for TV ads and whatnot. On average I gross $8k/yr. with a range from 2-20k. This is the first year (2009) I went below $2k and I basically made nothing. I bring this up because my music is goofy, fun, and often whimsical — which is the sound of good times. Judging by my tracks licenses, I’ll be able to call recovery when my licenses pick up again.
That’s a unique indicator.
Where in PA does your friend want to live?
“Where in PA does your friend want to live?”
Philly ‘burbs
What `burbs? I can speak to the area outside of NE Philly (Montgomery/Bucks County area - specifically Willow Grove/Hatboro and surrounding areas).
Muggy,
And that would be about an avg. of $8k/yr more than I… have ever made from music! Good on ya’!
A big part of “the band” is that I put it on the back burner all the years we were raising children. I just didn’t want to see the same for my SIL’s. Btw, we’re working up Deep Purple’s “Highway Star” and it’s perfect for us ( w/ 3 guitars )
There was a lot of counter-melody and over-dubbing that most cover bands are forced to gloss over. I’m stoked.
DinOR muggy:
I know DJ’s that make 50K-100K a year by being full time wedding djs, and dj to the high end stuff ($2500 for a dj!) ( Plaza Hotel)
I know someone in Maui that makes over $200K as a wedding dj, but then Maui is a destination place and he does 150+ weddings a year, and lots of them during the week.
I have made $30-40K as a dj, but it was hard work. Since almost nothing get booked during the week, so some weekends you do 3 or 4 gigs. There was 1 labor day weekend in 2003 I did 6 gigs 1 Friday 2 on Sat and Sunday and 1 on labor day….never again….even with a roadie it was a lot…..but they were all close together with 5 miles of each other so it was doable.
aNYCdj,
( Oh… this is at the tail end of Open Thread anyway! )
I recall reading that The Stones were hacked off at Zep in the early 70’s for putting on 2 and even THREE hour shows! Hey, these guys were used to the club-circuit ( sans liquor lic. ) and playing (2) 45 min. sets w/ like an HOUR break in between sets! The Stones described the early 70’s tours as absolutely draining!
What I’m seeing today is, an abandonment of the Blues, a return to hard, mainstream rock and much more emphasis on the basics from the guitar players. No more “arsenal” of floor pedal effects and two-handed “tapping” techniques. Like Frank Zappa said; Shut Up and play yer’ Guitar!
“much more emphasis on the basics”
That’s a nice way of saying they don’t have talent. C’mon, man, does the guitarist from Fall Out Boy even come close to Jimmy Page (even when he’s just playing rhythm)?
I am comfortable pigeonholing certain generations for certain things, and Gen Y+ sucks at *playing* music. They can make it, but they can’t play it.
Muggy,
So well said. What makes it more obvious is that, playing rhythm is about a HELL of a lot more than just repetatively pounding out the -same- chord with the same -dynamic- until the ‘next’ ( near identical ) chord change comes along!
In fact, I find playing lead a LOT less demanding. Joe Walsh ( one of my all-time favorites ) was once quoted as saying, “Stop playing notes people don’t care about!”
I think one of the best examples is Jimmie Vaughn ( Stevie’s older brother ) and the work he did w/ the Fabulous Thunderbirds.
I am comfortable pigeonholing certain generations for certain things, and Gen Y+ sucks at *playing* music.
The Expendables from Santa Cruz has a very good gen Y guitar player.
http://en.wikipedia.org/wiki/The_Expendables_%28American_band%29
I am thinking the songs from “Free credit alert” dot com..
With very affordable virtual samples (now many free) cheap sequencers and easy loops available to anyone with a pc or mac, not a great line of work for putting food on the table for sure.
“…not a great line of work for putting food on the table for sure.”
Precisely why I moved on… the guys that I freelance for are on call 24/7, have ridiculous schedules, and sweat bullets every three months hoping that royalties will cover any shortfalls in creative fees. It’s madness, really. Not to mention they always have to finagle “off camera talent” gigs every year to keep their SAG cards and health insurance.
That being said, they do pretty well, but I expect them both to die at the board. Not a bad way to go, I suppose…
Can this be so?
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it.”
~ Frédéric Bastiat~ The Law
~~Bastiat was a French economist, legislator, and writer who championed private property, free markets, and limited government. He died in 1850, yet his popular small book, “The Law,” is still in print!
I would adapt it some -
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it, and a
moral code that glorifies itcomplicated financial system that hides it.”IMO changed moral code hasn’t been what’s enabled the plunder; financial complication - to the point where even the above average person throws up their hands and says “whatever” - has.
P.S. I think in the original quote Bastiat said “a moral code that justifies it”, not “a moral code that glorifies it”.
Different times, same behavior. Amazing.
sorta makes you wonder if this behavior might be perfectly natural..
I do suspect it. Along the same lines, I note that accounts of murder go back to ancient times (e.g. think of Cain and Abel in the Old Testament of the Bible). So murder is also perfectly natural behavior. In fact, I would go so far as to suggest that any of the behaviors prohibited by the Old Testament rule-of-law popularly known known as the Ten Commandments are ‘perfectly natural’, including “Thou Shalt Not Steal.”
So what was your point?
my point..
Mike called it amazing.. but if viewed as just another exhibition of human nature, it might be better labeled as “hardly surprising”.
It is human nature and I see some of you are finally boning up on your history.
Good for you.
Specuvestors do not seem too happy this morning.
Looks like they want cash.
Cash is king today, I will admit. US$ is up big.
Main reason would probably be the prospect of killing or paring the health care bill.
Could also more generally reflect the likelihood of legislative gridlock, and the logical consequence thereof, which would be greater difficulty with passing new spend-now/pay-later D-ratic govt programs.
We’ve evolved from
Gwor stuff to
Make stuff to
Build houses to
Build malls to
Shuffling papers and Nail Salons to
Government deficit programs.
If the last stops, what will the new economy be?
Doing each others laundry.
“A village that tries to make a living taking in each other’s laundry is nothing compared to a nation whose citizens try to make a living speculating on each other’s production.” [Quote about the Roaring Twenties]
All this talk about the results coming out of Massachusetts has me thinking…have any of you, my fellow HBBers, ever considered running for office? If you’ve thought about it, what’s stopping you from actually doing it?
We discuss a lot of politics here and represent a lot of view points from across the political spectrum. We spend a great deal of time criticizing the people who are in office at any given time for the decisions that they make. (They deserve every bit of that criticism.) We also spend a lot of time suggesting and debating alternate courses of action.
We toss around a lot of really good policy ideas here, but there’s the rub. It’s all well and good for us to vent and post on a blog about what the dingbats in our government should and shouldn’t be doing, but we know that none of them read here or care to listen to a bunch of bitter renters. Why not get some HBBers in office and really get some “change” in Washington? Seriously, we should start our own party.
So have you ever thought about running for public office? Just curious.
“If you’ve thought about it, what’s stopping you from actually doing it?”
Can anyone occupy public office these days without seriously compromising his integrity?
That’s one of the concerns I’ve always had PB.
Also, can you get anything done in Washington if you’re not part of the establishment? Can anything get done in Washington without working within the power structure (lobbyists, etc.) and “system” that is already in place?
I think this is what discourages a lot of people that could be real change agents from giving it a go. You have to be a part of some established “block” in order to even get anyone to listen to you.
Another big factor is money. You CANNOT be elected to public office in this country without significant financial backing. If you are not indepently wealthy, that means aligning yourself with one of the two major parties so they can help you raise money. Or raising your own if you can, and then once you’re elected, you’re beholden to the money that got you into office.
I think I’ve answered my own question. The obstacles are too daunting. Why bother? And so we continue to get nothing good out of Washington. The more things “change”, the more they stay the same.
“Also, can you get anything done in Washington if you’re not part of the establishment?”
Case in point: To his considerable credit, Ron Paul’s Fed audit is going to happen.
” If you’ve thought about it, what’s stopping you from actually doing it?”
Time & money. Running a campaign costs a lot of money. Spots on TV, mass mailings, signs at every corner and people to put them up. The cost of entry is just too high. It’s like “you don’t like the cars coming out of Detroit, just start your own car company.”
The 2 established parties are well connected to corporate money, you just can’t compete against that head on. None of the ones in power have the least bit of interest in a 3rd political force. They will do anything they can to undermine your effort.
…anyway, I thought about it before.
“Running a campaign costs a lot of money.”
It must help considerably to be born with a silver spoon in one’s mouth…
I posted this rather late yesterday in the bits bucket, and would like to repeat it for the benefit of anyone who missed it; hence I am reposting it with some slight edits.
I have recently given careful thought to what we have learned from this financial crisis. Here is a sketch of the lessons Wall Street has taught the world about how to steal for a living:
1) make sure you always steal very large sums of money, to make it worth the risk of getting caught red handed;
2) make sure to conduct your theft operation in broad daylight, so everyone can see exactly what you are doing;
3) announce to everyone that you are doing God’s work so they will think you are actually doing something socially beneficial;
4) conduct your theft operation during the height of a crisis, and justify it by saying the rescue was necessary to save the planet from a catastrophe;
5) have your PR team brief the MSM on all the reasons why your crisis response was necessary and socially beneficial;
6) have your lobbyists ply top politicians with campaign contributions to gain their support;
7) place corporate alumni in top policy jobs so they can coordinate the operation from the inside.
Can anyone add anything to my description of ‘innovative financial engineering,’ or have I just about covered it? (I am thinking a bit more could be said about free govt-sponsored too-big-to-fail insurance programs, but I have covered that topic exhaustively in my posts over the past three or so years…)
Proposed addenda:
Whenever possible, aspire to the oligarchic model in scope and girth. Grow quickly, not wisely. Gobble as many smaller companies as possible, even if the fit is poor and/or implausible. Poke your corporate fingers into any available pie, the more obtuse (financially speaking) the better. Be proactive in positioning your firm as an essential Too Big To Fail entity.
“…Grow quickly, not wisely.”
Business model #1: Sell Krispy Kreme donuts to “special” people who own Hardley Davidson’s & Hummers:
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Business model #2: Open 16,120 coffee shops with a cup of joe @ $2.45 & free WiFi:
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
#3 Sell Beanie Babies on e-Bay
#4 Sell pets-pheranalia on a dot com site
#5 Sell medicinal marijuana
etc etc etc
Yeah, you need to get your hooks into public funds so “we all suffer” either way. This is how they’re getting away with TBTF.
Can anyone answer this question? Why would an individual purchase two condos from a condo LLC and then turn around and sell them back to the same condo LLC but under a different corporate name? I’m researching a local gang of thieves/infestors. They bought an apt building in 2006 for $4 M more than its appraised value of $8 M with delusions of a quick flip into condos.
Probably a woman. I’ve noticed they like to buy stuff and then go back a few days later and return it.
(packman ducks)
+ 1.
Duck + 1 too.
Boooooooo, Packman.
So an INDIVIDUAL bought from the LLC, formed a CORPORATION, transfered the property to the CORP, then the CORP sold it back to the same LLC?
Yes. What would be the point of this?
Seems kinda obvious.
Ownership under an LLC limits liability. That’s where it gets it’s name. The person is no longer liable. The “corporation” is. If sued, the guy’s worldly goods are not at risk. Only the assets of the LLC are.
It looks like someone made the mistake of buying the property as an individual.. realized the mistake, made some sort of deal with the sellers, and fixed it.
Haha Packman and Cougar. Actually it is a woman. We have a fair amount of impulse buyers here who don’t even bother to return items. They just leave them on the sidewalk with the tags still on them. A friend of mine got a nice pair of skis on Beacon Hill, never used.
That reminded me of this guy who stole stuff and returned it. Remember him? He was a mucky muck in Health and Human Services.
Enjoy.
http://www.msnbc.msn.com/id/11770707/
Is one of them named Bonnie?
Interesting tidbit on WSJ on-line area”
http://blogs.wsj.com/economics/2010/01/12/economists-views-on-interest-rates-housing-bubble/
“Economist’s views on Interest Rates / Housing Bubble”
“MARK GERTLER, NEW YORK UNIVERSITY PROFESSOR: “If we could go back in history and make one policy change…”
LOL, speaks like a dude that bought a loft in 2006 with an ARM.
MICHAEL BORDO, RUTGERS PROFESSOR: “The Fed didn’t cause the house price boom per se. Its causes were varied …
But loose monetary policy provided much of the fuel.”
That sounds about right. The Fed’s loose money was a necessary but not a sufficient condition for the bubble to occur (and to recur).
“The Fed didn’t cause the house price boom per se…”
Was it Sir Greenisspent’s wise wizardry or “wishful thinking” I’m seem to have some sort of “conundrum”
“Wishful thinking is the formation of beliefs and making decisions according to what might be pleasing to imagine instead of by appealing to evidence or rationality.
Studies have consistently shown that holding all else equal, subjects will predict positive outcomes to be more likely than negative outcomes. See positive outcome bias.”
BRAD DELONG, BERKELEY PROFESSOR: “… And it wasn’t the bubble’s collapse that caused the current depression–2000-2001 saw a bigger bubble collapse, and no depression.”
GULP!
Apparently he’s one of those that believes that “Stock Market” = “Economy” (or in his case Nasdaq = Economy)
MARVIN GOODFRIEND, CARNEGIE MELLON UNIVERSITY PROFESSOR: “Interest rate policy was appropriately stimulative in the 2002-3 period. But rates should have been raised less mechanically and more aggressively in 2004-5 on grounds of the usual macroeconomic conditions. The appreciation of house prices was but one of many indicators which called for a somewhat more restrictive interest rate policy at the time. A somewhat tighter stance of interest rate policy then could have cut off the last year or so of the house price appreciation and prevented the worst part of the subsequent adjustment.”
That wishy-washy passive voice description of monetary policy that was too loose for too long makes me wonder whether anyone was steering the ship at the time?
The bubble would have popped in 2004 instead of 2005 if Greenspan had uttered just a few words about dangerous loans and raised interest rates a little.
KENNETH KUTTNER, WILLIAMS COLLEGE PROFESSOR: “The ‘bubble’ didn’t really get going until 05-06, by which time the Fed had raised rates to more or less normal levels.”
“…it is a generally accepted stylized fact that, as Milton Friedman noted, the monetary policy transmission mechanism has “long and variable lags…”
Monetary Transmission Lags and the Formulation of the Policy Decision on Interest Rates.(United States and United Kingdom comparison)(Statistical Data Included)
Federal Reserve Bank of St. Louis Review | July 1, 2001 | Goodhart, Charles A. E.
JON STEINSSON, COLUMBIA PROFESSOR: “Excessively easy monetary policy by the Fed played at most a minor role in causing the housing bubble. Those that think that excessively easy monetary policy by the Fed played a major role must think that the Fed can have a major influence on real interest rates for a very sustained period of time. It is not clear to me that this is true.”
We’ll find out before long now, won’t we?
Allow me to play catch up here for a sec.
1. The Fed IS powerful enough to engineer a recovery at will/support house prices/ensure endless prosperity.
2. The Fed IS NOT powerful enough to cause economic troubles/spot bubbles/prevent crashes.
Ok, got it - they’re the solution to all our problems but the cause of none of them! Whew, they started to lose me there.
Do you do PR work for the Fed? If not, you should consider it, as you are good at convincingly making two completely opposite statements in close succession.
If the Democrats are smart, they’ll:
-Forget about sighing a watered down health care bill, and remind everyone who sabotaged it.
-Announce a full court press against Wall Street, via the Justice Department SEC, and IRS. And do it for real, not the way they are doing it now. If they are lucky, they might even take out a few of their political opponents in the House and Senate (of course, they may lose Schumer, Frank, etc., but nobody ever made an omlet without breaking eggs).
If the Democrats are smart, they’ll: ……
I believe that would be politically brilliant.
But it would take guts.
-”Announce a full court press against Wall Street, via the Justice Department SEC, and IRS”.
They may ‘announce’ one, but there would not be any serious follow though. Just not going to happen… Unfortunately.
Mortgage pain persists for BofA, other big banksJanuary 20, 2010 1:35 PM ET
All Thomson Reuters news CHARLOTTE/NEW YORK (Reuters) - In a sign that the U.S. banking sector’s problems are far from over, lenders including Bank of America Corp reported falling bond trading revenue and mortgage lending weakness in the fourth quarter.
Chrysler May Merge With Italy’s Lancia in 2010
January 20, 2010
In an interview with Britain’s Autocar.co.uk, Fiat/Chrysler boss Sergio Marchionne indicated that the Chrysler line of cars could “converge” with the Fiat-owned Lancia brand by the end of the year.
Marchionne told the publication that “in Europe, Lancia is an undersized, underdeveloped brand, with nothing bigger than the Delta [compact hatchback]. Chrysler, which has a true global reach, has nothing smaller. Put them together and you have a full line-up.”
Buffett Opposes Obama Bank Fee, Likens Plan to Taxing Congress.
Jan. 20 (Bloomberg) — Warren Buffett opposes President Barack Obama’s proposed levy on financial institutions because firms including Goldman Sachs Group Inc. and Wells Fargo & Co. already repaid bailout funds.
“I don’t see any reason why they should be paying a special tax,” said Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., in an interview on Bloomberg Television today. Supporters of the plan to tax the banks “are trying to punish people,” he said. “I don’t see the rationale for it.”
“I don’t see any reason why they should be paying a special tax,”
How about if they call it a TBTF insurance premium?
Morrell will close Sioux City plant in April.
SIOUX CITY — Smithfield Foods told meatpacking workers and local leaders late Tuesday that it plans to close its John Morrell & Co. pork plant in Sioux City later this spring
The decision would deal a major blow to metro Sioux City’s economy. Morrell’s slaughter and processing plant at 1200 Bluff Road is one of the city’s largest employers, with nearly 1,500 workers.
Dozens of additional jobs, from trucking to cold storage to box making, also could be in jeopardy. In addition, Morrell is a major buyer of hogs from tri-state region pork producers.
Late Tuesday afternoon, the Sioux City plant’s general manager, Dan Pacquin, called Mayor Mike Hobart to notify the city that the slaughter and processing plant would close on April 20, city economic development director Marty Dougherty said.
While this is bad for employment figures, it’s good for the environment. Hog farming is out of control in this country and is destroying thousands of acres with toxic waste.
And do we really need to eat all that damn pork? No, of course not.
U.S. construction industry in doldrums -survey ~ Wed Jan 20, 2010
* Construction industry unemployment rate over 22 percent
CHICAGO, Jan 20 (Reuters) - A survey of U.S. companies that build highways, buildings and sewers found nine in 10 predicting their business will not rebound in 2010 from depressed levels, a trade group said on Wednesday.
Based on the responses of some 700 contractors across the United States, 88 percent of the firms do not expect overall conditions to improve before 2011 and some will likely go out of business, the Associated General Contractors of America said.
“It means the construction industry is in for another difficult year in 2010,” Stephen Sandherr, the trade group’s chief executive, said in a conference call.
Why buy a house now if you can get one for less later?
Jan. 20, 2010, 11:51 a.m. EST
Builders stocks lower on new rules, housing data
By John Spence, MarketWatch
BOSTON (MarketWatch) — The home-builder sector traded lower Wednesday after the Federal Housing Administration said it plans to increase some fees for borrowers and put stricter lending requirements in place.
The SPDR S&P Homebuilders ETF (XHB 15.57, -0.29, -1.83%) was down more than 2% in late-morning trade.
Separately, the Commerce Department on Wednesday said housing starts slipped 4% in December. See Economic Report on housing starts.
Deutsche Bank analyst Nishu Sood said the decline may have been more related to winter volatility and weather than anything else.
“New home sales are reapproaching all time lows while starts and permits are 28% and 41% above their all time lows. In our view the divergence is because builders are in a much better inventory, liquidity and expense position than they were a year ago,” Sood said in a research note Wednesday.
“They are ready to look ahead to the spring season and housing recovery and even rebuild some inventory for the renewed tax credit,” the analyst wrote. “The problem is that so far demand doesn’t seem to be cooperating.”
…
2009 airline revenue: Worst drop ever ~~ January 20, 2010
NEW YORK (CNNMoney.com) — The airline industry suffered its largest drop ever in passenger revenue last year as a weak economy grounded many would-be travelers, an industry group said Wednesday.
The Air Transport Association of America said total passenger revenue for the major U.S. carriers fell 18% in 2009 versus the year before. It was the largest drop on record, exceeding the 14% decline in 2001.
The revenue decline was due to a 6% drop in passenger volume, and a 13% plunge in the average price paid to fly one mile, the ATA said.
“The global recession, accompanied by high levels of unemployment, hit air travel demand especially hard in 2009,” said James May, ATA chief executive and president, in a statement.
“The revenue decline was due to a 6% drop in passenger volume, and a 13% plunge in the average price paid to fly one mile, the ATA said.”
Drop the price 13% and get a 6% drop in volume.
If anyone is looking to make a small fortune he should consider investing a large one in an airline.
Payroll taxes increase for many employers across USA.
NORFOLK, Va. — Last year was the worst Don Miller had seen in more than 20 years of running a graphic printing business here.
Business slumped 15%, and he had to lay off two of the three workers who helped him print stickers and signs for Navy ships.
Miller hopes to bring them back, but hiring will be more expensive for all Virginia business owners this year. The recession has emptied Virginia’s unemployment insurance trust fund, and the state is making up for it by raising taxes on employers and cutting jobless benefits for seniors.
In 2009, the average business owner paid $95 per employee. This year, the tax will be $171, according to estimates by the state workforce agency. “It’s another added expense to hiring somebody,” Miller says. “Everything’s going up, and business is going down.”
The economic tightening rolls on…
Obama made nice with the bankers and loaded up his administration with Harvard policy wonks who really don’t know the country. This hits the nail on the head.
Coakley’s Loss: Pie in the President’s Face
Barack Obama went to Boston to rally voters and got a pie in the face. He lost his innocence as the valiant young president and also lost his sixty-vote majority in the Senate. Now we will find out what the man is made of–either a true political leader or just another show horse. Dozens of explanations are being offered for why the Dems were humiliated in Massachusetts. Democrats incline to grab easy answers. The president, if he is tough enough, will instead face the hard message of this political fiasco.
The special election displayed monumental miscalculations by which Obama has governed, both in priorities and political-legislative strategies. It may seem perverse and unfair, but the president’s various actions for reform generated a vaguely poisonous identity. Amid the general suffering, Obama is widely seen as collaborating with two popular villains–the me-first bankers and over-educated policy technocrats of the permanent governing elite. Obama made nice with the bankers and loaded up his administration with Harvard policy wonks who really don’t know the country. These malignant associations gain traction because people see there are grains of truth in observable reality.
On Sunday, I listened on the radio to Obama’s soaring speech at Northeastern University and remembered again why his oratory first took the nation to the mountaintop. His attack lines lashing bankers and insurance companies were fluid and tough, shouted repetitively over the rising cheers. His diction was loosely colloquial. He dropped the hard g’s to get down with the folks. Too little, too late, I figured. He is still masterful, but this is performance, not substance. People grasp the difference between the two. This gulf will imprison Obama as a stereotype for weakness, a joke on late-night TV, if he doesn’t change.
The humiliation, I decided, could become a good thing for this presidency if it forces Obama to rethink his political strategy and rearrange his governing order. For all his brains and talent, for all the brainy people around him, the Obama White House seems tone-deaf and blind on many aspects of the popular reality. Too full of itself to listen closely. Too condescending to recognize the rage and fear are about more than right-wing frothers.
http://www.thenation.com/doc/20100201/greider
We Can’t Even Talk About Giving Geithner A Pass, Unless He Knows What Caused The Crisis
Marshall Auerback | Jan. 20, 2010, 1:33 PM
Tags: Regulation, Wall Street, AIG, Bailout, Tim Geithner
It was only a matter of time before someone emerged to defend Tim Geithner and his actions in light of the wrong decision to bail out AIG. Michael Grunwald of Time Magazine (the publication which anointed Ben Bernanke “Person of the Year” in 2009), has likened the attacks on Geithner to someone who “booed Lassie for tracking mud on the carpet after saving that kid in the well”.
In Geithner’s defense, Grunwald trots out the usual “sanctity of contract” arguments: “Nobody has explained how or with what authority anyone could have invalidated AIG’s contracts with all those far-flung institutions on the fly, or why that wouldn’t have worsened the panic.” It is interesting that such a sacrosanct principle was seen as irrelevant when thousands of UAW workers were forced to rework their supposedly inviolable contracts to save GM and Chrysler…
Let’s be clear: contracts are modified all the time, provided the stakes are high enough. It seems absurd for institutions to invoke “sanctity of contract” when the large financial firms who insist that “a contract is a contract” conveniently omit the fact that they would be toast in the absence of the bailouts Grunwald is seeking to defend.
The problematic nature of these contracts aside, the justification for defending Geithner’s actions seems questionable. The bailouts “worked”, we are told. The banking system is supposedly functioning and the cost of inaction allegedly would have been far greater panic, untold bank runs, and vastly greater economic misery. Well, if one defines the practice of banking as proprietary trading, the creation and sale of toxic instruments such as credit default swaps, collateralized debt obligations, collateralized loan obligations, and generating profits via credit card loan sharking activities, then yes, the banking system is “working” again. But how is that helping the rest of us? And how does it contribute to future financial stability?
…
The flippers who inflated the housing bubble are back, with government-sponsored, taxpayer-guaranteed FHA loans, no less! Your tax dollars at work…this is a healthy sign the housing market has recovered, I’m sure.
Investors dominate home flipping, auctions
Robert Selna, Chronicle Staff Writer
Wednesday, January 20, 2010
House flipping, a quick-buck scheme pursued by amateurs and professionals alike during the real estate boom, now is dominated by investors willing to pay all cash, who troll auctions for foreclosures that banks are gradually trying to siphon off their books.
This trend, which took hold more than a year ago, gained more ground last week when the Federal Housing Administration reversed a rule and decided to allow government-backed mortgages for homes sold and resold within 90 days.
Some real estate experts say the FHA change is another step by the government to help prevent lenders from sending a wave of foreclosures onto the market as many analysts have long predicted.
California foreclosure data show that the number of houses purchased by investors at public auctions statewide climbed from 833 in December of 2008 to 2,648 in December of 2009, an increase of 218 percent.
The figures, from research firm ForeclosureRadar dot com in Discovery Bay, also indicate that at December Bay Area auctions, about 20 percent of the sales went to investors rather than back to foreclosing lenders. In December 2008, that number was 3.2 percent.
The data define any property not reclaimed by the bank at an auction to be an investor purchase because auction foreclosure sales require buyers to pay all cash, something most typical home buyers cannot afford, according to Sean O’Toole, CEO of ForeclosureRadar.com.
A significant percentage of flippers from the boom times used mortgages to buy and flip homes that were rapidly appreciating, O’Toole said.
…
What is the limit on ‘affordable’ FHA flipper loans — $729,000 or something like that?
Never confuse a FHA-loan-funded flipper-driven echo bubble with a housing market recovery — unless you enjoy catching falling knives, that is…
* SAN FRANCISCO BAY AREA
* JANUARY 21, 2010
Bay Area Housing Market Starts to Pick Up
Year-Over-Year Price Gains Return to Cities Near the Coast, but Inland Areas With More Foreclosures Still Struggle
By JIM CARLTON
Bay Area homeowners haven’t had much to cheer about in the past few years amid the nationwide housing-market meltdown. Now there’s a glimmer of good news: The local housing market last year began showing signs of a tentative, albeit uneven, recovery.
Cities closer to the coast such as Palo Alto, Belvedere and Tiburon saw a return to year-over-year price gains of previously sold homes in 2009, according to MDA DataQuick, a data provider in La Jolla, Calif. But other towns in harder-hit inland areas like Vacaville and Vallejo mostly lagged.
Overall, though, the region last year fared much better than in 2008. In 2009’s fourth quarter, 29 of 91 cities or communities around the Bay posted gains in the median price of an existing single-family home from the same period a year earlier. In contrast, only two cities or communities logged such gains in 2008, according to DataQuick. The 2009 quarterly data didn’t include the last week of December.
“We appear to be in the early stages of a fragile recovery,” said Andrew LePage, a DataQuick analyst. Still, he noted that the median home prices in most Bay Area cities and communities remained well off their peaks.
…
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
“…Megan concludes that people who walk away are “jerks”. In the accompanying video, she makes her case.”
“The banks are fragile already, why hand banks more loses voluntarily?”
Walking Away From Your Mortgage Is Morally Wrong And Financially Stupid, Says McArdle:
http://finance.yahoo.com/tech-ticker/walking-away-from-your-mortgage-is-morally-wrong-and-financially-stupid-says-mcardle-407319.html?tickers=xhb,len,kbh,ms,bac,wfc,c&sec=topStories&pos=9&asset=&ccode=
From the comments:
Lady, you’re full of crap. The mortgage lender was the GAMBLER. There isn’t right and wrong here, it is a simple accounting determination. I entered an arms length agreement with my mortgage holder, who gave me money to finance a house. The house is the collateral. WHY should I give up more money than the house is worth if the house won’t recover? If you walk away, you get well in about seven years. Should I stay TRAPPED in my house, crippling my income, keeping my kids and wife at lower levels of care because of what happened, the banks took advantage hoping THE COULD FLIP the house. They lost. Get over it. Walking away from your house WAS your last resort before the credit markets MADE the move to GAMBLE with THEIR money and your future by HOPING you’d default, and they can flip it. Uhh, no it isn’t heads I win, tails you lose. This is the first time in history the banking regulators and banking industry abandoned their 36/28 rule, and decided the indigent and felons could be sold a house only to flip it again. That’s BULLS1T. Not everybody has a job for life, and paying $600K for a $450K house over the next 30 years? KISS MY ASS! (Jingle jingle jingle all the way.!)
Rosenberg: Housing Is In A Depression, And It’s Already Double-Dipping
Joe Weisenthal | Jan. 20, 2010, 11:37 AM
Tags: Housing, Housing Crisis, Real Estate, Mortgages
The latest NAHB numbers from yesterday are more fuel for David Rosenberg’s argument that housing is double dipping:
HOUSING STILL IN A DEPRESSION
It is truly a sad state of affairs when an extension of a housing tax credit, super- low interest rates and the incursion of the Fed balance sheet into the mortgage market all translate into a down housing backdrop. The NAHB index fell for the second month in a row, to 15 in January from 16 in December, 17 in November and the nearby high of 19 in September, which takes the headline down to June 2009 levels. In fact, this is the fourth lowest reading ever. What was really striking was the dip in the ‘prospective buyer traffic’ sub-index to 12 from 13 – the lowest this has been since last March when everyone seemed to think the world was coming to an end.
And the stimulus for housing, if not renewed, could add some uncertainty to the outlook – the Fed’s purchases stop at the end of March and the deadline for the $8,000 tax credit
for first-time buyers (and $6,500 for move-up buyers) is April 30, in terms of when the purchase contracts have to be signed, and the deal must be completed by June 30.
But the first kicker is expected to come today, as the FHA comes out with its new (and higher) fee schedule (to 2.25% from 1.75% according to the New York Times) and tightened lending standards too (though amazingly, the 3.5% minimum down-payment requirement is not expected to be touched; but a minimum FICO score of 580 established – this is largely for “show”) because what few people realize is the losses the government agency faces and the extent to which a taxpayer bailout lies ahead.
…
Housing Is In A Depression, And It’s Already Double-Dipping
I think that would mean it’s a good time to buy right?
No. It has only begun to double-dip at this point; see the article on FHA-funded flippers posted above to get an idea why the bottom is taking a long time to form…
“I think that would means it’s a good time to buy right?”
I think it will be a good time to buy when this question won’t need to be asked.
Is it my imagination, or is the number of MSM articles openly pointing fingers of blame at the subprime mortage lending kingpins steadily increasing?
* REAL ESTATE
* JANUARY 21, 2010
Goldman Subprime Fallout Hits Home in South Carolina
By AARON LUCCHETTI
FORT MILL, S.C.—Tony Redman used to earn $100,000 a year from his sales and technology job at a Goldman Sachs Group Inc. subprime-loan unit called Senderra Funding LLC. But he hasn’t had a steady paycheck since being laid off in June, and a shrinking savings account will force him to swallow his pride if he doesn’t land a new job soon.
“You enter this job market and you get slapped upside the head,” says Mr. Redman, 37 years old. Earlier this month, he drove to an unemployment office from the townhouse where he lives with his wife and two children, but couldn’t bring himself to collect benefits from the government. “In a month, I’ll stand in line,” he says.
The downsized ambitions and desperate job hunting that grip some former Goldman employees here are a sharp contrast to the company’s expected announcement Thursday of record-high profits for 2009. That means big bonuses for most traders, investment bankers and other workers at Goldman, traditionally among the highest-paid on Wall Street.
Fort Mill, S.C., officials had hoped the mortgage industry could replace lost textile jobs. But subprime job cuts contributed to a shortfall in property and sales taxes that is forcing local leaders to make painful sacrifices, including the delay of a new middle-school opening. Above, Massey, a stalled subdivision, in Fort Mill.
In Fort Mill, a city of 10,000 residents about 20 miles south of Charlotte, N.C., local leaders saw the subprime-mortgage industry as a way to help retool the economy from its withered roots in the textile industry. But more than 700 jobs at Senderra, HSBC Holdings PLC and other mortgage operations that popped up during the housing bubble have since disappeared or moved away.
Unemployment in Lancaster County, where Senderra got a tax break as a job-creation incentive, hit 18% in November, the latest month for which figures are available. The U.S. unemployment rate was 10% in December.
At Goldman and other securities firms, subprime loans are mostly in the rearview mirror as Wall Street rakes in higher revenue from resurgent trading markets and the U.S. government’s efforts to stabilize the financial system last year. Last week, Goldman Chairman and Chief Executive Lloyd Blankfein brushed aside attempts by a committee investigating the financial crisis to pin blame on the 141-year-old company for the subprime meltdown.
…