The Housing Bubble

Older Women Are So Reasonable

AFTER BEING MARRIED FOR 44 YEARS, I TOOK A CAREFUL LOOK AT MY WIFE ONE DAY AND SAID, ‘44 YEARS AGO WE HAD A CHEAP APARTMENT, A CHEAP CAR, SLEPT ON A SOFA BED AND WATCHED A 10-INCH BLACK AND WHITE TV, BUT I GOT TO SLEEP EVERY NIGHT WITH A HOT 25-YEAR-OLD GIRL”.

NOW I HAVE A$500,000 HOME, A $45,000.00 CAR, NICE BIG BED AND PLASMA SCREEN TV, BUT I’M SLEEPING WITH A 65-YEAR-OLD WOMAN. IT SEEMS TO ME THAT YOU’RE NOT HOLDING UP YOUR SIDE OF THINGS.’

MY WIFE IS A VERY REASONABLE WOMAN. SHE TOLD ME TO GO OUT AND FIND A HOT 25-YEAR-OLD GIRL AND SHE WOULD MAKE SURE THAT I WOULD ONCE AGAIN BE LIVING IN A CHEAP APARTMENT, DRIVING A CHEAP CAR, SLEEPING ON A SOFA BED AND WATCHING A 10-INCH BLACK AND WHITE TV.

AREN’T OLDER WOMEN GREAT? THEY REALLY KNOW HOW TO SOLVE YOUR MID-LIFE CRISES.

The Government’s Endless Appetite for Spending

“Since they have been in full control of the federal purse strings, Democrats have spent a lot of money and got the country into a lot of debt. Hence the two consecutive increases of the debt limit in 3 months. And they aren’t the only ones. According to the Office of Management and Budget, the federal debt limit has been increased 98 times since 1940—more than once a year on average. Under President George W. Bush alone, Republicans voted to raise the debt limit by more than $6.4 trillion”

“Namely, the federal government’s endless appetite for spending.”

http://reason.com/archives/2010/01/21/the-governments-endless-appeti

There, both sides are guilty. IMO it will never stop until we tie the funding for “their” retirement funds to a balanced budget amendment. No balanced budget, no funds for the retirement of our elite political class the next year. If we don’t incentivize them to reach this goal, they will never truthfully try. I would love to hear the squealing if something like this were ever passed.

Here’s your chance to live in a 678 square foot condo in “The Mantra” in beautiful Vancouver, BC, Canada:

Be smart and buy one for just $560K
Or you can just throw your money away renting one for $1600/month

Each condo is named after a popular Vancouver RE mantra, such as:

“We’re running out of land”
“All the rich people in the world will move here after the Olympics”
“We’re a world class city”
“Canada doesn’t have subprime so prices can’t go down”

Buy now before interest rates go up!

Who cares? Deficits don’t matter, after all it’s ‘our’ debt, we’ll just buy it ourselves! I have said it before, I’ll say it again, as bad as Bush was in the monetary arena(and he was horrible), Barry will end up making him look like Hetty Green! So please tell me again how the ‘recession’ is over?

Debt Burden Now Rests More on U.S. Shoulders.

THE United States government borrowed more money than ever before in 2009, but its largest lender — China — sharply reduced the amount it was willing to lend.

The United States Treasury estimated this week that during the first 11 months of last year China raised its holdings of Treasury securities by just $62 billion. That was less than 5 percent of the money the Treasury had to raise.

That raised its holdings to $790 billion, leaving it the largest foreign holder of Treasury securities — Japan is second at $757 billion and Britain a distant third at $278 billion. But China’s holdings at the end of November were lower than they were at the end of July.

Not since 2001, when China was still a relatively minor investor in Treasury securities, had the country shown a decline in holdings over a six-month period.

CEOs to Hill: Quit calling us for campaign cash

WASHINGTON – Dozens of current and former corporate executives have a message for Congress: Quit hitting us up for campaign cash.

Roughly 40 executives from companies including Playboy Enterprises, ice cream maker Ben & Jerry’s, the Seagram’s liquor company, toymaker Hasbro, Delta Airlines and Men’s Wearhouse sent a letter to congressional leaders Friday urging them to approve public financing for House and Senate campaigns. They say they are tired of getting fundraising calls from lawmakers — and fear it will only get worse after Thursday’s Supreme Court ruling.

The court ruled that corporations and unions can spend unlimited money on ads urging people to vote for or against candidates. The decision was sought by interest groups including one that represents American businesses, the U.S. Chamber of Commerce. They argued that restrictions on ads they could finance close to elections violated their free-speech rights, and the court agreed.

Congressional candidates who find themselves attacked by a flood of special-interest TV ads in the 2010 elections will likely reach out to their party’s biggest donors for money to help them counter the blitz.

“Members of Congress already spend too much time raising money from large contributors,” the business executives’ letter says. “And often, many of us individually are on the receiving end of solicitation phone calls from members of Congress. With additional money flowing into the system due to the court’s decision, the fundraising pressure on members of Congress will only increase.”

Among the others signing the letter are current or former executives of Quaker Chemical Corp., Brita Products Co., San Diego National Bank, MetLife and Crate & Barrel.

They sent the letter through Fair Elections Now, a coalition of good-government groups who hope the Supreme Court ruling will lead Congress to pass public campaign financing legislation they have long been seeking. Others supporting public financing include former campaign strategists for President Barack Obama and former President George W. Bush.

Rep. Barney Frank calls for replacement of mortgage finance giants Fannie Mae, Freddie Mac

WASHINGTON (AP) — A top lawmaker on Capitol Hill is calling for the elimination of mortgage finance companies Fannie Mae and Freddie Mac and the establishment of a new system to provide money for U.S. home loans.

Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said Friday he supports replacing the two companies entirely.

“I believe this committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance,” Frank said at a hearing on executive compensation issues. “That’s the approach, rather than the piecemeal one.”

His comments show how much the financial crisis has upended the relationship between lawmakers and the two companies. Frank was long one of the staunchest supporters of Washington-based Fannie Mae and Freddie Mac, based in McLean, Va.

The two companies, which have been run by the government since they almost collapsed in September 2008, have required $111 billion in federal aid to stay afloat. Late last year the Obama administration pledged to cover unlimited losses through 2012 for both companies, lifting an earlier cap of $400 billion.

Regulators announced last month the CEOs of Fannie and Freddie could get paid as much as $6 million for 2009. That has outraged Republican lawmakers on Capitol Hill.

“We are paying these people bonuses to lose tens of billions of dollars,” said Rep. Jeb Hensarling, R-Texas at Friday’s hearing. “What people do with their money is their business. What they do with the taxpayer money is our business.”

Fannie Mae and Freddie Mac provide vital cash to the mortgage industry by purchasing home loans from lenders and selling them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, or about half of all mortgages in the U.S.

So far, the Obama administration has been quiet about its plans for the two companies. In an interview Thursday on PBS, Treasury Secretary Timothy Geithner said the Obama administration will “propose a set of detailed reforms beginning this year” for Fannie and Freddie. But he said legislation will have to wait until next year “because it’s just a complicated thing to get right.”

Shares of both companies sank on the news. Fannie Mae closed at 99 cents, down 7.5 percent. Shares of Freddie Mac closed at $1.17, down 10.7 percent, but added a penny in after-hours trading.

Simple solution declare corporations non persons and designate them as national treasures. Personhood should never be granted to inanimate or non human entities. Otherwise I am declaring my pet rock a person with all the rights and priveleges of a human, both rights. Death and Taxes.

I’m considering taking the hook. I’ve been renting a modest farm house for six years. It’s part of a large parcel that used to be a dairy farm. My LL bought from his dad 10 years ago and has just held as an investment. It’s been a sweet deal for me, my rent is low, only a mile to the little town where mail and groceries can be had, the view fantastic, mind their own business neighbors unless you need something, wildlife, etc. A couple of years abo I asked the LL to sell me the piece across the road with old barn and pond and he was adamant that he was holding for the jackpot.

Yesterday he told me he wants to do a deal if I’m still interested. He is drowning in debt and needs to break the place up to sell. Dairy farmland is not real hot right now in big parcels but 10 acres still sell. The Menonites are not in expansion mode, probably because dairy doesn’t pay these days. I’m tempted, further tempted by the realization that he will be selling this house.

I’ve been looking for “land and camp” for some time, determined to stay in the county because two of my children have sunk roots here. It’s not time yet to get a true bargain. I don’t need a traditional house, an RV site and shop building would be just right, and I don’t want to pay high taxes in the future as my retirement budget will be low impact appropriate.

So, it would be about ten acres. Half in gently sloping alfalfa field. A stream on the back boundary. A pond above the barn which used to water 200 cattle and now supports a nice bass population. Ability to garden obvious. Two of the best wells in the township and a septic system (not up to code, but still). An old Pennsylvania style bank barn that is sound but needs some roof work, where my son and I do our several automotive projects. An expansive open though roofed concrete floored cattle shed good for out of rain storage. The gem is the milkhouse. One large open room with windows and doors which would make a nice office or even a passable bachelor pad, a utility room with toilet, water heater and space for other necessities. A large milking parlor, solid as a pillbox, that could serve as my wood working shop. All of this the tax man says is fully depreciated, meaning that whatever I did inside would be low to no tax impact above the land taxes, so $700 - $800 per year (who knows what the tax rate will be in future).

The LL indicated the negotiations could start at $30K. Quite doable for me cash and still have enough saved to keep my feet planted whatever happens with the tenuous job. I used to be a hobby farmer (and loved it) so I can do all that stuff including hoofed critters if time and inclination are available. I have a beautiful old Airstream to sleep and eat in and a cumbersome woodshop hobby which needs a shelter. I don’t need to impress anyone much, which is kind of the tenor of the whole area outside the Victorian strip in town, where I used to carry a grand house on my back.

So I am tempted to buy this place and solidify my A Plan as it is all a fit. I know that such a place might well be available at 1980 prices in time, but the amount to be gained is so low that I don’t see much advantage in the wait. My hampster wheel is winding down rapidly so maybe this is the right time to take a turn, camp out and watch from the bleachers.

WASHINGTON — President Barack Obama has sharply criticized a Supreme Court decision easing limits on campaign spending by corporations and labor unions, saying he couldn’t ‘think of anything more devastating to the public interest.’ He also suggested the ruling could jeopardize his domestic agenda.

In other words, corporations and unions should not be permitted free political speech. We listened to anguished liberal commentators rail last evening about the court’s decision being the “worst setback in a century.” Here and there a few pundits see the decision as a good thing.

George Will: “The court’s decision will be predictably lamented by people alarmed by the prospect of more political money funding more political speech. The Supreme Court has now said to such people approximately this: The First Amendment does not permit government to decide the ‘proper’ quantity of political speech.”

“The remedy is abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance.”
~Rep. Barney Frank (D., Mass.),

“People without jobs can’t shop like they used to,” observes Bill Bonner, “…and they can’t pay their bills. One out of 4 mortgaged houses is underwater. One in 10 is in foreclosure. Many more will probably go into foreclosure as the depression continues and default becomes more socially acceptable.

” Previous generations regarded default and foreclosure as a disgrace. Lenders priced this aversion into their lending rates. But now, default is just a shrewd financial move. When the financial costs of defaulting are lower than the costs of paying…that’s what borrowers will do. Just like Wall Street.

“As the depression continues, attitudes will change… Voters will probably want real change in Washington; that’s what the Massachusetts election may be telling us.”

Fear is good, for separating financially prudent bears from bovine brained bulls. Got vega?

* January 21, 2010, 2:15 PM ET

VIX Spikes as Fear Soars

By Steven Sears

Nausea. Disorientation. The trading monitor is filled with red. Stockprices are falling hard. One measure of panic sweeping the Street is the surge in the options market’s fear gauge, the Chicago Board Options Exchange’s Market Volatility Index (VIX).

VIX is up a remarkable 17% at 21.56 as panic sets in that the recent year-to-date strength in the stock market may be illusory. Jobless claims came in higher than expected, and in a consumer-driven economy it’s hard to get pumped about rising stock multiples when so many people are out of work, or afraid of losing their jobs.

The VIX spike is a potent reminder that at least half of what passes for fact on Wall Street is an odd admixture of conjecture and sell-side marketing. In recent days, it has been fashionable to say that a sub-20 VIX was signaling smooth equity markets, even though so much remains wrong in the U.S. economy. The only true statement that can ever be made about VIX is that it is volatile, finicky, and as prone to induce nausea as it is elation.

To be sure, it’s hard to look past the recent stock market volatility without wanting to own some security that increases in value when stock prices decline. Think about hedging. When the VIX declines, and it most likely will as panic subsides, look to reduce your equity risk either by reallocating or by hedging with options on the Standard & Poor’s Depositary Trust (SPY) that tracks the Standard & Poor’s 500 Index.
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We know the Fed cannot see bubbles, but perhaps Obama can see them.

* The Wall Street Journal
* JANUARY 22, 2010, 2:36 P.M. ET

Obama Bank Plan’s Bubble-Deflating Side Effect

By MICHAEL CASEY

NEW YORK—The Federal Reserve is thinking about just maybe, possibly, considering how to tinker with its policy framework to curtail asset bubbles in some instances.

But while the Fed dithers—for good reason—over this potentially risky shift in its focus, the U.S. President is getting on with the job.
Commentary

The best way to read the sell-off in world markets since President Barack Obama’s announcement of new curbs on bank risk-taking Thursday is that it took some froth out of them. It deflates some of the mini-bubbles in stocks, commodities, high-yield bonds and other risky assets into which the Fed’s aggressive liquidity infusions have streamed this past year.

That pullback is desirable. Surely many of the conservative opponents of Obama’s “populist” measure to prohibit banks from operating internal proprietary trading desks would agree. After all, they’ve been warning for months that the Fed’s near-zero-interest rate policy is fueling speculative excess in markets.

Instead, those critics are warning of a higher cost of bank capital, of further constraints on credit and, by extension, of continued weakness in the U.S. economy and labor market. The markets, they charge, are sending a “message” to the President.

Yet, if you look at the internal dynamics of the current market environment, the President’s move is a master stroke. While the reform is rightfully focused on bringing long-term stability to a banking industry incapable of self-regulation, it also produces a welcome cooling side effect in the markets.

By reducing banks’ capacity to exploit their informational advantages by buying and selling securities for their own account, the “prop trading” ban directly attacks the kind of activity that tends to convert accommodative monetary policy into asset bubbles.

The banks can afford to lose this.
…

Here is a sign of very unhealthy and overvalued financial markets: Speculation about BB’s reappointment is making them pitch and turn like an angry sea. Why would the Fed chair (re)appointment decision even matter if the recession was over and markets were properly pricing in the recovery?

* The Wall Street Journal
* HEARD ON THE STREET
* JANUARY 23, 2010

Obama Leaves Markets in a VIX

By LIAM DENNING

Fear and greed are the odd couple whose constant squabbling dictates the direction of financial markets.

Fear should be gaining the upper hand right about now. It took a pummeling last year as investors recovered their poise surprisingly quickly after the shock of Lehman Brothers’ collapse. Risk assets, be they stocks, high-yield bonds or commodities, provided handsome returns in 2009.

But this week delivered a salutary reminder that it is unrealistic to expect recovery from the worst U.S. recession since the Great Depression and a close brush with financial-system meltdown to be completely smooth. And risks can materialize from the most unlikely sources: In this case, a surprise Republican victory in Massachusetts.

The wild card of government policy is back with a vengeance. Thursday resounded to the sound of President Obama, bruised by the loss of a critical Senate seat, cracking his knuckles in preparation for a smack down with Big Finance. Standing with him was regulatory veteran Paul Volcker, suddenly a central figure in the administration again after a year seemingly spent on the periphery.

In contrast, Ben Bernanke’s reappointment as chairman of the Federal Reserve suddenly looks uncertain. What seemed like a done deal has been thrown into doubt as two more senators said Friday they would vote against Time’s Person of the Year 2009. A rejection of Mr Bernanke would signal a big political shift against the largely government-crafted economic and business environment, riddled with bailouts, that investors have become used to over the past year.
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I really dislike unions… their original purpose was noble, but nowadays, they’ve become money-hungry institutions that do not care about bankrupting companies/states as long as they get their sweet deals…

===============================

Public Employee Unions Are Sinking California

As the governor noted during his $83 billion budget roll-out, over the past decade pension costs for public employees increased 2,000%. State revenues increased only 24% over the same period. A Schwarzenegger adviser wrote in the San Jose Mercury News in the past few days that, “This year alone, $3 billion was diverted to pension costs from other programs.” There are now more than 15,000 government retirees statewide who receive pensions that exceed $100,000 a year, according to the California Foundation for Fiscal Responsibility.

Many of these retirees are former police officers, firefighters, and prison guards who can retire at age 50 with a pension that equals 90% of their final year’s pay. The pensions for these (and all other retirees) increase each year with inflation and are guaranteed by taxpayers forever—regardless of what happens in the economy

I would really love to hear from someone/anyone who can explain to me in a coherent and rationale voice why public sector unions are necessary anywhere - not just in California.

What needs there be for a union for public workers? is their employer motivated to unfairness out of greed? is the work high-risk or unsafe?

LOL change.

http://cartoons.nytimages.com/portal/wieck_preview_page_216521

Here is some uplifting news against the backdrop of renewed panic on Wall Street and ongoing gloom in the labor market: Against all odds, the California housing market is showing signs of revival (at least according to this har’ article)…

Try not to catch yerself a falling knife.

* The Wall Street Journal
* REAL ESTATE
* JANUARY 23, 2010

California Housing Shows Revival Sign

By JIM CARLTON

SAN FRANCISCO—California’s inventory of unsold, previously owned homes shrank to a five-year low in December, in another sign that the state may be coming out of its worst housing slump in decades.

The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008, when inventories were at a peak, according to estimates released Friday by the California Association of Realtors. The inventory levels are now at their lowest level since 2005, resulting in frenzied sales with multiple offers in some cities.

In Northern California’s Santa Clara County, where inventory has dropped to 50 days from 243 a year ago, Amanda Garcia said she and her father Luis Garcia finally gave up a nine-month search for a home last month, after they kept losing out on homes priced in the highly competitive sub-$500,000 market.

“It’s more like an auction nowadays,” said Ms. Garcia, 26 years old, a medical coordinator from Milpitas, Calif. “They shouldn’t call it a house sale.”

California’s housing market is closely watched because it is the nation’s biggest and helps fuel both the state’s economy and the U.S. building industry. With California still weighed down by economic problems, economists are looking at bellwethers such as housing to determine when California will rebound.

Of course, any long-term revival in housing will depend on California’s ability to shake off its high unemployment and the threat of more foreclosures. Some housing experts cautioned that inventories may be artificially low because many would-be sellers are waiting for the economy to improve before putting homes on the market.

“I’m convinced that once the general public believes prices have bottomed out and are coming up, more people will put their homes on the market,” said Andrew LePage, an analyst at MDA DataQuick, a housing-data provider in La Jolla, Calif. “And that will probably coincide with the economy and job market improving.”

Although most home prices remain well below their pre-bust highs of three years ago, California’s overall housing market has shown signs of stabilizing since early last year. The median price of an existing, single-family home rose 8.4% from a year ago to $306,820, marking the second consecutive year-over-year increase and the 10th straight month-over-month jump, according to estimates by the state Realtors’ association.

Sales rose at a slower year-over-year rate of 1.7%, compared with double-digit gains in recent months. Sales have been powered, in part, by a federal tax credit for first-time buyers, which Congress extended until the end of April.

Some brokers attributed the sales slowdown to lean inventories. “Right now, we need more listings,” said Lianne Pinkston, a Coldwell Banker broker in Morgan Hill, Calif., south of San Jose. “I have an all-cash investor, and they’ve wanted to buy a duplex or fourplex, and they’ve been making all-cash offers for over the asking price, and they’re still not getting anything.”
…

Dumb questions of the day: Why is it that when a politician shows signs of taking meaningful action to restore a semblance of normalcy to the role of banks in the financial system, he is immediately labeled a “populist” by MSM commentators. Isn’t reinstating a rule of law in the banking system a necessary first step towards reestablishing trust? What is populist about establishing and maintaining a rule of law?

Is there any chance the next Treasury Secretary might be chosen from outside the ranks of Megabank, Inc or Federal Reserve Bank alumni?

A Rift at the Fed Over the Bailout of A.I.G.
By LOUISE STORY and GRETCHEN MORGENSON
Published: January 22, 2010

New documents submitted to Congressional investigators examining the 2008 rescue of the American International Group show that officials at the Federal Reserve were deeply divided over the structure of the bailout and its long-term implications.

At the same time, regulators had to contend with major banks that were A.I.G.’s trading partners and were unwilling to accept a discount from the government when closing out the contracts the banks had struck with the insurance giant.

Ultimately, the government decided to make the banks whole on the contracts, a decision that the documents say was approved by Timothy F. Geithner, the Treasury secretary who, at the time, was president of the Federal Reserve Bank of New York.

The Fed’s decision to pay A.I.G.’s trading partners in full on tens of billions of dollars in contracts has been controversial because many analysts say they believe the government could have negotiated a price for a fraction of that amount, reducing taxpayer funds used in the rescue. Similar contracts were being settled at heavy discounts in other deals where the government was not involved.

Last Thursday, Thomas C. Baxter Jr., the New York Fed’s general counsel, told Congressional investigators of his frustration with the banks, according to committee staff notes obtained by The New York Times.

“We asked for concessions, and they said no,” he said, according to the notes. “I wonder why we even bothered.” Mr. Baxter also said that Mr. Geithner verbally approved the decision to pay full price to the banks.
…

Just because something happens to be populist doesn’t mean it can’t still be right. But I get your point, if a course of action is “populist” in the MSM view, the clear inference is that the unwashed are getting restless.

Chase Bank just sent me an offer.

They’ll give me $100 if I open a checking account with them by March 16th.

Could the “fire your bank” movement be picking up steam?

Good information from cbsnews about when/how Volcker increased his positioning and communicated his desire to curtail investing by banks. Not bad for 83 years old:

To make his case, he (Volcker) met with lawmakers on Capitol Hill and gave numerous speeches on the subject, traveling to at least nine cities on several continents to warn that banks had developed “unmanageable conflicts of interest” as they made investments for clients and themselves simultaneously.

“We ought to have some very large institutions whose primary purpose is a kind of fiduciary responsibility to service consumers, individuals, businesses and governments by providing outlets for their money and by providing credit,” he said during one speech in Toronto. “They ought to be the core of the credit and financial system. Those institutions should not engage in highly risky entrepreneurial activity.”

Gradually, Volcker picked up allies. John Reed, the former chairman of Citigroup, expressed his public support. So did Mervyn King, governor of the Bank of England.

http://www.cbsnews.com/stories/2010/01/22/politics/washingtonpost/main6128662.shtml

dictionary.com…

Pop⋅u⋅lism  /ˈpɒpyəˌlɪzəm/
–noun 1. the political philosophy of the People’s party.
2. (lowercase) any of various, often antiestablishment or anti-intellectual political movements or philosophies that offer unorthodox solutions or policies and appeal to the common person rather than according with traditional party or partisan ideologies.
3. (lowercase) grass-roots democracy; working-class activism; egalitarianism.
4. (lowercase) representation or extolling of the common person, the working class, the underdog, etc.: populism in the arts.

Populism smells like left wing economics of blue collar workers, but can be combined with southern religion, as in Mike Huckabee. Nothing in populism appeals to me.

Funny, I was watching a tenant move out of one of two office buildings in Nort Palm Beach Fl. yesterday that are now nearly empty. They were full last year.

By Adam Playford
Palm Beach Post Staff Writer
Posted: 12:25 p.m. Friday, Jan. 22, 2010

Federal stimulus money spent by the state resulted in nearly 88,000 jobs in 2009, according to new estimates from the Florida Office of Economic Recovery.

In addition, early figures from a recent White House Council of Economic Advisers report suggest that the stimulus’ total job impact in Florida — including money not allocated to the state — may have hit 128,800 jobs by the end of the year, said Don Winstead, Florida’s stimulus adviser.

The White House report showed Florida had the fourth-highest job impact of any state in the country, behind California, New York and Texas.

Both of these figures are estimates, calculated with complex economic formulas and are likely to change as more precise numbers come in, Winstead cautioned.

So the town I live in basically has all the rules HOAs do, but you don’t pay extra for it and they are reasonable (no junk storage, no cars on blocks, no overnight street parking, etc.). The result is that it is much nicer than the adjacent areas.

The lady across the street has been having a garage sale every FREAKING weekend for the last, I don’t know… forever. Today I had had enough and I was going to call code enforcement, but it turns out she lives in Largo and not Belleair Bluffs. I never, ever, ever, would have considered a garage sale a nuisance, but it’s clear to me she goes dumpster diving and that this is a major source of income for her (perhaps her only source). People park all over my lawn (not mine, but still), litter, jam up traffic, etc. Just when I think HOAs are stupid, my neighbor reminds me why sometimes rules are good.

I used to listen to punk rock, smoke, and drive fast. Now I listen to NPR, have code enforcement on speed dial, and worry about safety. I guess I should go easy on Boomers.

I’ve got a lot going on right now. Please allow me yet another rumination/therapy/braintrust session here at HBB. This is another massive screwball that is causing me to lose sleep (I am particularly interested in ETs response):

The company I freelance for has closed its NYC office and expanding in LA. There is the possibility that I could rejoin this outfit full-time. I don’t know what the pay would be exactly, but it would be in the $65k/yr. range. It ends in one of two ways: it becomes an Emmy/Grammy award-winning music house and I win big-time, or goes completely bust…

I think I hate LA and (with two babies) can no longer stomach that level of risk, so I think I have my answer, but you know, it’s a rare opportunity that a lot of people wish they could have, so I don’t take it lightly. If I was 23, single, no kids, etc. Florida would be history, but that’s not the case.

The office:

Well, we are moving through the process of getting our unwanted foreclosure office up and going to put on the market. Couldn’t be at a worse time, in a worse state ( depression in Michigan ). That being said, my sister is acting as our job planner. She’s cranky and extremely, extremely good at it, being a project contractor supervisor architect type with 30 years or more experience in the field, with a specialty in professional space conversions and add-ons to old, National Historic Registry buildings. Nobody messes with her. She’s getting quite grumpy but has helped us make wonderful choices in paint, carpeting, etc., and is making us stick to our budget. We will be cutting her a check for her time and irritability factor, even though she says she doesn’t want it. So don’t cash it, already.

She got us the realtor ( ! ) who turned her house for a cash sale within 6 weeks of it being on the market, at almost full price. It was extremely saleable, being in perfect condition and architecht-improved, but still….he’s been in the business for 33 years, and owns and manages commercial properties himself, so he has a good handle on what the market will bring. He said we will most likely not have to take a land contract on it, which surprised us. He’s given us sound advice about what improvements to make and what to leave alone. To our additional surprise, he said that there were office condos selling around there at pretty good prices. Who knew ? Are things turning around ? I don’t think so, but maybe some professionals who want to own their own offices think so. I have no idea, but if somebody wants to hand over the money to us, well, we’ll take it.

We sold bullion, GLD, and our Disney Points ( The Timeshare Store) to pay for renovations. Gold has been falling pretty far and we cashed out. If it goes down as far as I think it will, we’ll just make more purchases at a much lower price later. We made good profits on both types of the shiny stuff-stock and actual. The Disney Points sold for enough that we’re happy. We had them and enjoyed them for 5 years, but the reality is that you can stay at the Sheraton in a beautiful room for $79 a night in Orlando ( we did it for the first night we were there after Christmas ), and everything else is down too, so it didn’t make any sense to keep our Saratoga Springs points. We found that the drawbacks with Saratoga are the sprawling size of the place ups the monthly maintenance fees, and it’s so far from things that it necessitates two bus transfers if we want to go to another WDW resort for dinner. Also, we had bought far too many points for us to happily use, necessitating a trip, so we got rid of them and scaled back.

We seem to be simplifying our possessions, and that’s fantastic. We couldn’t be happier.

Thank you, President Obama, for supporting the American people’s interest in a competitive free market banking system not dominated by an oligopoly cartel which only serves Wall Street fat cats. I would like to exercise the last remaining vestiges of my First Amendment free speech rights to express how very happy I am that I voted for you.

Obama to break up banks
Robert Peston | 17:38 UK time, Thursday, 21 January 2010

Banking reforms do not come bigger than those proposed today by President Obama.

In an echo of the break up of banks that was imposed in the United States after the Great Depression, he wants a limit on their overall size and he also wants them banned from three activities that in recent years have been central to many of them.

He is pushing for them to be prohibited from involvment in hedge funds, from buying and selling whole companies in what’s known as private equity and from buying and selling securities for their own benefit on so-called proprietary trading desks.

In simple terms, he wants to prevent banks from taking speculative risks to generate colossal profits, while knowing that if their bets go wrong taxpayers will pick up the bill.

It means that some of the biggest banks in the US - from Bank of America, to JP Morgan and even Goldman Sachs - may have to be broken up.
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President Obama did not say that the reform would only apply to those banks with a retail presence, such as JP Morgan and Citigroup (although perhaps it is what he meant to say). He said it would apply to “banks” as defined in US law - and Goldman became one of those in the autumn of 2008.

The big banks will hate his proposals - and will doubtless use their formidable lobbying power and financial resources to persuade Congress to water down the reform plans.

But Obama is up for the scrap. “If these folks want a fight, it is a fight I am ready to have”.

The US President believes that banks are back to their bad old ways too soon after their woes led to the biggest bank global bail out in history.

Goldman Sachs would deny this, but its near record revenues of $45bn for 2009 and 50% rise in staff pay to $16bn - or $500,000 per head - shows that the banking crisis, for it at least, is a dim and distant memory.
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With sufficient break up of systemically risky TBTF kleptocratic banks, I am guessing the international banking system might provide no more of a systemic threat to the global financial system than, say, dentistry.

Europe November 2, 2009, 9:20AM EST

Britain Set to Unveil Bank Breakup

To introduce more competition into the banking sector, the Labour government this week will propose selling pieces of Lloyds and RBS to new entrants

By Nick Clark

Chancellor Alistair Darling will this week unveil his proposed overhaul of the UK banking system which includes breaking up Lloyds Banking Group (LYG) and Royal Bank of Scotland (RBS) and bringing “at least” three new banks to the high street.

Mr Darling is preparing to announce the Government’s plan for the future of UK banking – as first revealed in The Independent last week – to the House of Commons in the next few days.

The Government is not yet ready to announce as it is still in negotiations with the two banks over their participation in its Asset Protection Scheme (APS), designed to insure billions of pounds worth of bad loans.

The Chancellor said yesterday there would be a very different look to the high street banks in the next four years.

He said: “What I want to do now is begin the process of reform and reconstruction so we have got a safer, more competitive banking system with more high street banks than we have at the moment, with new entrants coming in”. RBS, which is 70 per cent owned by the Government, and Lloyds, 43 per cent state-owned, will be forced to dispose of a string of assets, which will be sold to new entrants to the market.
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Fedex and UPS are merging into one giant package-moving express to better postion themselves in today’s economy. The resultant merger will be called FedUPS.

Allena, I hope you check the blog tonight. Here’s my littlelady (3 mos this weekend).

i864.photobucket.com/albums/ab205/muggyflo/taters.jpg

The highest cost of the housing bubble…

http://www.sun-sentinel.com/news/palm-beach/wellington/fl-wellington-family-shooting-20100123,0,3998699.story

He was a former mortgage broker with several underwater FL propertys…poor wife & kids

Anyone else watching COPS? They just raided a foreclosure in CA.

Can someone explain what ‘central bank independence’ means? Does it mean independence from Wall Street, independence from Washington, or something else?

I guess if a bunch of economists with ties to big money corporate interests say that Bernanke’s reconfirmation is essential to the future survival of the human race, then it must be so.

Updated January 23, 2010
Bernanke Boasts Strong Supporters, but Can They Save His Job?

FOXNews dot com

The Federal Reserve Chairman certainly has his share of supporters, most notably President Obama, but will they be enough to win him another four-year term as Democrats look to strike a more populist tone?

Federal Reserve Chairman Ben Bernanke suddenly found himself this week at risk of losing his job, after some Democrats in the Senate voiced opposition to his confirmation to a second term, but could he really be bound for the unemployment line?

Bernanke is credited for helping to reverse the recession but also criticized for not doing enough to prevent it. And with Democrats looking to strike a populist tone after a tough upset loss in Tuesday’s Massachusetts Senate race, the Fed chairman is an easy target.

Even so, Bernanke certainly has his share of supporters, most notably President Obama. Will they be enough to win him another four-year term?

Economists, for the most part, stand behind Bernanke. Those surveyed by FOX Business suggest if Bernanke is not confirmed, there is no one to replace him.

“There is no clear alternative, which is one more reason why it seems inconceivable for him not to be reappointed,” Mark Zandi, chief economist at economy.com, said.

Stuart Hoffman, chief economist, at PNC Bank was even harsher:

“If the Senate rejects Bernanke,” he said “the ‘no’ voters should resign in shame. There is no second choice.”

Mark Vitner, senior economist at Wells Fargo, said regardless of his replacement, a “no” vote for Bernanke means trouble.

“Businesses do not trust Congress right now, and a move to oust Bernanke would cast considerable doubt about the independence of the central bank. They need to confirm him,” Vitner said. “If the Senate rejects Bernanke we will have a whole set of new problems and probably a double dip.”
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How is it possible to distinguish the impact of political pushback from that of the end of Wall Street’s year-end bonus season on the stock market? After all, the stock market crashed in the first several months of 2009, and I cannot recall any political pushback at the time…

Political push-back stalls stock market rally on Wall Street
By Renae Merle and Tomoeh Murakami Tse
Washington Post Staff Writer
Sunday, January 24, 2010

NEW YORK — Washington spent months nursing the financial system back to health after the 2008 economic crisis, stabilizing then reviving battered markets and ultimately restoring trillions of dollars in investor losses. Wall Street’s political fortunes have not fared as well.

Now, an aggressive stance against the bankers, financiers and even government officials popularly blamed for causing the crisis is gaining political momentum, and there are signs it is eroding the very financial stability the government championed.

Moves to rein in the country’s biggest banks and talk of blocking the reappointment of Federal Reserve Board Chairman Ben S. Bernanke torpedoed confidence in the stock market last week, sending share prices into their steepest decline in nearly a year. Analysts fear conditions could worsen before they improve, as anger at Wall Street morphs into uncertainty about its business practices and prospects.

The anti-Wall Street mood darkened after President Obama’s Democratic Party suffered a stunning upset in the Massachusetts Senate race. That loss, attributed to concerns that the administration wasn’t focused sharply enough on the country’s continuing economic woes, came as many of the financial firms bailed out by taxpayers in the past two years reported massive profits and announced another round of big bonuses.

By Friday’s closing bell on the stock exchange floor, the Dow Jones industrial average had plunged 4 percent over four days. The Chicago Board Options Exchange’s Volatility Index, which measures the degree to which investors expect stocks to swing and is often called the “fear gauge,” had shot up 50 percent for the week. And in a move reminiscent of the depths of the financial crisis, investors piled into government bonds, seeking cover from the turbulence.
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There were some signs Saturday of Washington working to calm Wall Street. Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) and Republican member Judd Gregg (N.H.) issued a joint statement predicting that Bernanke would be confirmed.

“In the last few days there have been a flurry of media reports on Chairman Bernanke’s confirmation prospects, highlighting a very vocal opposition,” the statement said. “Chairman Bernanke has done an excellent job responding to one of the most significant financial crises our country has ever encountered.”
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Well when you consider that the majority of the trades on Wall Street are now made by these titans, I’d say that any message sent by markets movement is a message sent directly by Wall Street and says nothing about what mainstreet feels.