The Housing Bubble

“…Anyway, this election isn’t about adding sales tax, right?”

It’s the bastard child of No Sales tax, A.K.A : Revenue Plan “C”

9.75% in Santa Clara Co. I do believe.

I call it “state border arbitrage”.

I’ve always thought living in Vancouver, WA was the best place tax wise. No state income tax in WA. Then you drive across the river to shop where there is no sales tax in OR.

I’ve pedaled through Vancouver, WA. The locals consider the “cross the bridge and shop in OR” game to be their favorite.

Oh, and along U.S. Route 202, just south of the Pennsylvania line, there’s a sign that says, “Welcome to Delaware. Home of tax-free shopping.”

Take that, Pennsylvania!

Could work in Spokane too, sort of if you drive to Montana to shop. Have to go through Idaho, but it’s the skinny part up north so it’s worth it for big ticket items.

Combined state, county, and city sales tax in El Mirage, Arizona is 9.3%. Phoenix is 8.3%. Most other suburbs fall into the 8% to 9% range (5.6% state plus 0.7% Maricopa County plus the city rate). The AZ governor is heavily pushing an additional 1% sales tax, but the legislature has resisted.

Here in Tucson, it’s a combined total sales tax of 8.1%. I was at a community meeting convened by a city council member last night. One fellow suggested that the high tax rate has suppressed spending in the city.

I would also like to call the city out for another tax, which is to be paid by local businesses. It’s called the use tax, and you’re supposed to pay it whenever you purchase stuff outside the city limits.

Needless to say, it’s a real PITA to figure out what is subject to this tax. It’s not like a sales tax, where your cash register figures it out on the spot. Instead, you have to drill down through your financials and purchase receipts.

And, if you’re business is like mine and makes most of its purchases in the form of services, well, sorry city, you’re not going to derive much revenue.

I’ve always thought living in Vancouver, WA was the best place tax wise. No state income tax in WA. Then you drive across the river to shop where there is no sales tax in OR.

It would be a good choice for retirement for that reason. However, I believe you do still have to pay Oregon income tax if you work in Portland (where most of the jobs are) even if you live in Washington. Anyone know for sure?

That’s correct. I am one of the almost 60,000 Vancouver commuters who cross the Columbia River every day to work in Portland. The state of Oregon gets it’s 9%+ from each and every one of us.

And, yes, we do most of our shopping in Portland, but the State of Washington still levies sales tax on big ticket items that require a license (cars, boats, ATVs, etc.) even if they were purchased in Oregon.

Everyone benefits from prop 13.

And:
War is peace. Freedom is slavery. Ignorance is strength.

Just kidding, but I and many disagree.

My property taxes are higher than the median for the nation. Combined with the highest sales tax, the highest state income tax, and huge fees for corporations (LLCs in CA have to pay $1800/year just to EXIST! Try having a part-time business out of your house under those conditions)–nobody can blame prop 13 for “ruining” california. We should be ROLLING in money! I wish I knew where it was all going.

In the Land of Ryo, taxes are never high enough, there is never enough govt spending and unions are never powerful enough.

In the Land of Ryo, taxes are never high enough,

lol, You are amusing with your Straw-men.

Eliminating prop 13 would lower taxes because house prices would be lower, thus, I am for lower property taxes.

You’re wrong again. I understand. You’re mad at me.

Rio,

The lower property rtaxes following would only exist in a vacuum of Market forces acting. Sadly, the politicians will still be able to get involved and override the mill rates, increasing them back to their current levels, while the house prices were dropping, all the while claiming that no such new tax increases exist. I don’t dispute your claim that it would unlock currently frozen inventory, but keeping the politicians hands off of property tax mill rates is a *good thing* TM.

The only exception I can think of that would be beneficial is to remove prop13 from applying to *commercial* real estate. Or at least getting rid of the ability to roll over the old tax rate though corporate transfer rules.

mathguy,

You could be right but I was referring to a possible situation if prop 13 had never been enacted.

I’ve seen studies that it helped the house price run-up.

Nah, they’re dovirced now. I seem to recall that there was a never-released commercial for a fast-track law firm specializing in divorces. I seem to recall a scene in which the husband questioned the alimony and child-support payments that would total 85% of his take home pay; the wife replied, “you can do this…Suzanne reaseached this…”

Assuming one hasn’t killed the other.

If he’s so gung-ho, why doesn’t he buy a house himself? Lemme guess…does she make more money than he does? Gold-digger. He wants to use her money to make flip/MEW profit for himself. DTMF.

“The guy actually stopped talking to her because she wouldn’t agree.”

Probably the best message about himself he could send to her.

“When someone shows you who they are, believe them the first time.” - Maya Angelou

combotechie
Although I am no fan of Maya Angelou, that was stellar advice.

<i…So do you think it’s his nesting instinct?

no… i think he has an intimate familiarity with the female nesting instinct.

She’s thinking ..”This guy is asking for a house.. kids.. commitment.. to settle down.”

Stopped talking to her? Maybe also holds his breath till he turns blue? He’s a child, and has ulterior motives. It’s safe to assume he’s taking advantage of her.

But will she do the right thing and reject him? Her nesting instinct makes it a toss up..

Maybe also holds his breath till he turns blue?

Several years back a female friend of mine (close to 30 at the time) dated a guy who would actually throw temper tantrums. He’d actually just go limp, and collapse on the floor. As an adult.

Hi CarrieAnn. I can relate. Since 2004, in Florida, I persuaded my fiance not to buy, all that time. You can say I won, but after each battle I suffered a period of coldness and indifference. Today, it seems like over those years I denied her the ‘pride of ownership’ for herself and son that all homeowners were experiencing. Many of her colleagues in her previous place of employment, from clerks to managers, drank the RE Kool-Aid , and found themselves in bankruptcy or foreclosure. So, we rented, she accepted a job offer in Michigan–we moved-able to do with no house to sell. We are both in our early forties. I owned a small building supply company in Florida, business fell of a cliff, so without a plan I moved to Michigan. She just put an offer on house I’m lukewarm about. I was content to rent since employment would be nice for me, I prefer Florida, and rent/owner metrics show no great disparity. The stress leading to the offer was unbearable, (over the Holidays to boot). I’ll chop my fingers off before I sign any house papers. Since she made the offer my stress has been reduced. I’m resigned to it–going with the flow. CarrieAnn, my advice to your friend is if he can buy it, let him, and make sure he knows it’s his house. By avoiding the doom in Florida you would think my opinion on housing would be valued. I was wrong. Looking back, I would have been better off keeping my mouth shut and letting her experience the loss.

Looking back, I would have been better off keeping my mouth shut and letting her experience the loss.

Are your finances separate? If not, it seems like you’d be grossly affected as well?

They are separate. I’ll pay her as if renting. Yes, I will be affected, namely when it comes to house repairs. What happens when the water heater goes or a major repair is needed–I don’t know yet.

So charge her for the repairs. Either that or get a rent reduction in anticipation of being the damn maintenance guy on call.

p.s. You do know that there’s a boatload of single women out there…

I hear ya, X-philly. What you suggest is probably the best option.

Meh. Marriage. It’s legal and largely cost competitive with prostitution. If your lucky, you can get em to clean up around the place too.

Good luck with the separate finances when the chips are down.

“CarrieAnn, my advice to your friend is if he can buy it, let him, and make sure he knows it’s his house.”

mrgynch, my advice exactly. I think Joey may be onto something when he mentioned ulterior motives. But (specific to my friend’s situation where I have a lot more info) why go into a marriage already making sure you’re planning your exit strategy. I (silently) wasn’t too keen on the bullying tactics and to tell you the truth, she was greatly concerned too. She has children and feels NOT buying this house is in their best interest. She’s very solid on what she wants to spend. Almost fierce. Rather than nesting, I fear she may be tripped up for wanting that warm bed at night. Or she may be rethinking whether the guy’s even worth sharing it with. I’m not sure he has the head on his shoulder that she has and that girl has solid goals.

Oxide and combo techie:

I think you both nailed it. Yes she makes more than him.

After I posted I stopped to think about the single women in my acquaintance. Only one has not drunk of the real estate koolaid, the rest believe the hype about real estate being the surest path to riches, blah blah etc.

The guys I know are split about 50-50. So even though there’s lots of single women out there it may not be easy to find someone with your same financial perspective, as it were.

In my case it’s the male counterpart who wants to buy a house. I told him to go ahead and get one, I’ll rent it from him. (he bought his residence years ago, paid it off). He’s not opposed to that idea, he knows he’d have a good tenant, and as the owner he’d be responsible for the maintenance. We’ll see.

mrgynch,

Unfortunately, that is the very scenario many of us here are up against. Now imagine dealing w/ 7 or 8 voting mbrs. of an HOA?

Each and every time an issue comes up ( and people are refusing to acknowledge the “new normal” ) I have to dredge up just how on-target I’ve been with all of my ( your ) predictions.

It can get to be a real drag since rather than “get it” typically it only leads to resentment. Especially since ( and I’m sure we’re a good 50-75k underwater on ‘our’ unit ) the bal. of owners have done numerous improvement projects from granite counter tops and landscaping projects! At least “I” had the sense not to sink another DIME into that money pit!

Owning a house, imo, is a belief system for some. And in my case I’ve been refuting those beliefs and winning the battles, but her beliefs haven’t changed hence the war is lost. Maybe I should be grateful for her not buying up to now and that she does well enough on her own to take the plunge. There will be consequences, however, for her going out on her own. It doesn’t look like two people moving closer together, I reckon.

D in Or-

maybe at your next HOA meeting you can hand out T-shirts with bar graphs of exactly how much underwater you all are?

That could be an icebreaker…

James,

Please tell me you just forgot to put the [sarcasm] tags on your comment above?

Maybe this is as good a time as any to bring this up? With as much as the human impacts as this debacle has dished out.., I’m really starting to wonder if you wouldn’t resent ‘anyone’ w/ whom you’ve collectively weathered it?

Both my wife and I have made repeated commitments -not- to take this out on one another, but there are… times!? Be it spending on the holidays or taking trips, gifts to the kids, and all the while not knowing if she’ll be laid off or where the next paycheck might come from?

You can’t live like Anne Frank ‘forever’ and I’m pretty sure even if I ‘was’ married to Christie Brinkley ( I’d have reservations about her as well )

“It can get to be a real drag since rather than “get it” typically it only leads to resentment”

So very true, DinOR. For all that effort not even a small nugget of gratitude is returned. ‘Told you so’ doesn’t advance the relationship, or the cause in your case. In my case, for the people around me who knew how I felt about the bubble, it’s going to be awkward to say, “I’m well, the weather stinks, she’s good, Oh! she just bought a house, gotta go.”

X-philly,

Why wait for the next meeting!? I’m ordering my yu-do as we speak!

Oh. That was a tasteless joke. Just felt a bit sarcastic this morning.

Thought the cost competative would kind of resonate with the renting is cost competative with buying mindset.

Ha ha.

Shoulda used the italics of sarcasm.

[i]See these days there is a big stigma to marriage. You have fun as a married guy and end up in the paper. Now, the real savy guys, like Spitzer, they pay to play. Look he is on TV too all the time. See. Big social stigma to sticking with one woman.[/i]

On a slightly more HBB note; Spitzer was getting some folk hero status around here. Fine. He was making some noise about the banksters but was also a guy that liked to publish peoples names in the paper after prostitution busts. Try to ruin lives. Meanwhile the bastard is bilking the public for enough money to hire high end call girls.

Anyhow.

I really miss Big V… she would have a load to say about this gender RE battle.

DinOR, for many guys, James isn’t making a joke. I know far too many guys who were ruined or almost ruined by their exes.

Not that women don’t get see plenty of jerks as well.

My point being this: that a successful marriage is a very rare thing… and always was. Literally one in a million.

“Since 2004, in Florida, I persuaded my fiance not to buy, all that time.”

She has been your fiance for SIX YEARS????? Wow, it is not just the house buying fence you’re sitting on is it?

Massachusetts Saskatoon

Trust me.

Angus,

And sure I remember you as a reg. poster here! As glad as I ‘am’ for you, kind of doubting it would have worked out identically had you remained in Seattle?

At least Austin is a town where ‘rental’ MEANS ‘rental’ ( unlike the PNW where it’s just a book marker until either multiple bids come in or they default ) whichever comes first?

Maybe ‘that’ is what we should have trained our predictive efforts on? Instead of focusing on the Case/Shiller Knife Catcher Index, we should have been researching what Metro’s had the deepest rental inventory?

“At least Austin is a town where ‘rental’ MEANS ‘rental’ ( unlike the PNW where it’s just a book marker until either multiple bids come in or they default ) whichever comes first?”

I’m in Seattle, and have managed to find two separate landlords who have rented out SFH for at least twenty years. Neither struck me as likely to take multiple bids or to default anytimes soon–in fact, neither had a mortgage.

They’re out there; you just have to search harder for them.

Moved from Seattle to Austin 9 months ago. Do miss big ‘ol trees but don’t miss the RE koolaid’rs there. Sounds as though chickens finally finding the roost.

Interesting, Angus. I made the opposite move a year ago How’s the heat???

This is getting funny.

It will never end, IMHO, and housing will be stuck in some sort of unaffordable limbo of fluctuating high prices and rocketing defaults for years to come. So long as there’s money to be made from the fees involved and the banks can hide their worthless “assets” and value them at 2005 prices, I don’t see anything changing until some external event forces it to happen.

It will never end, IMHO, and housing will be stuck in some sort of unaffordable limbo of fluctuating high prices and rocketing defaults for years to come.

People have a choice whether to buy or to rent. And without double-digit annual appreciation (which everyone will eventually recognize is gone for good), there is no rational reason to pay such a huge premium to own instead of renting.

See for example yesterday’s SF Chronicle article which declares that the ownership premiums is “only” 233% now versus 296% a few years ago. One can debate whether there should be any premium at all, but certainly any sustainable number would have to be much closer to 0% than to 233%.

Thus in my opinion, unless the Fed can somehow force people to buy houses, (or, equally unlikely, induce double-digit house price appreciation but not double-digit rent appreciation), the problem is going to correct itself eventually no matter what the Fed does.

Will it take several more years? Undoubtedly. Irrational price increases went on for the better part of a decade, and the correction will probably take just as long.

I should clarify that the 233% figure is for the Bay Area, perhaps the most out-of-whack region in the country. Ludicrously, the conclusion was that since this number has fallen from “the usual” 296%, the Bay Area is one of the “top 10 cities to go from renting to buying.” I couldn’t make this up.

The same article listed some other cities where the ownership premium was closer to 0%.

Some examples:

Chicago, 28.7%
Cincinnati, 0.1%
Minneapolis, 14.0%
Philadelphia, 18.7%

Perhaps some folks from these cities can weigh in.

“That will satisfy government and PTB, who, in my (disputed) opinion, only want money flow to increase within the stagnant economy, and don’t really care about home prices.”

Professor Bear’s housing market stimulus recipe:

1) Forget about propping up home prices.

2) Let the Wall Street fat cats fully realize their gambling losses (no more bailouts — let them fail if that is where their high risk lending activities led them).

3) Make Fed ZIRP loans available to local mortgage lenders and to local mortgage lending startups, as an incentive to restart a private market based (grass-roots, free-enterprise capitalism versus top-down govt engineering) mortgage finance system.

4) Eliminate all of the myriad government subsidies which make U.S. home prices permanently unaffordable.

The upshot:

- Once home prices bottomed out at fundamentally affordable levels, lenders would no longer face falling knife collateral risk, and would stop hiding their cash under mattresses.

- Real estate sales activity would be quickly transformed from its current comatose zombie shoot status into a green shoot.

- Used home sellers and other REIC constituents would collectively be amazed to discover that affordable housing was actually good for their industry.

I like these ideas!

Unfortunately, I doubt they’ll ever happen, but they do make sense, for whatever that is worth.

TBTF has failed, as anyone with eyes to see and a mind to think should realize; however, the force of collective denial is an amazing phenomenon to behold. Why not just acknowledge that Wall Street’s fee-based mortgage securitization scheme is a bust, and encourage them (by force, if necessary) to divest of their mortgage lending operations? It is hard to overstate the information and efficiency advantages of a community-based mortgage lending system based on small, competitive, locally-based firms whose officers personally know their customers. By contrast, Megabank Inc’s impersonal grand national mortgage lending oligopoly scheme nearly collapsed the global financial system, thanks to adverse selection for really poor lending risks, and they would have collapsed themselves were it not for TBTF bailouts. Wall Street should focus its investment banking efforts on industries it knows well, such as telecom, dotcom and automotive manufacturing, and let all real estate lending become local again.

“- Used home sellers and other REIC constituents would collectively be amazed to discover that affordable housing was actually good for their industry.”

They have a “unique” disease Mr. Bear:

“Consequences, Schmonsequences, as long as I’m rich.” Daffy Duck

“…as long as I’m rich.”

That pretty much sums up the Wall Street fat cat philosophy in a nut shell.

“Unfortunately, I doubt they’ll ever happen, but they do make sense, for whatever that is worth.”

One of the beauties of free enterprise capitalism is that good ideas have a tendency to rise to the surface, while bad ideas tend to die natural deaths. Of course, this evolutionary process will not stand in the way of artificial interventions to create zombie institutions where failure has already occurred but has yet to be acknowledged.

“One of the beauties of free enterprise capitalism is that good ideas have a tendency to rise to the surface,”

You must be joking.

All I’ve ever seen is good ideas being shut out, bought out or regulated against because it upsets the status quo. If you think you’re living in an innovative society, then you know nothing about what is really available. China’s high speed trains versus ours come to mind. Oh wait, we don’t have one. Japanese and European cell phones versus ours. Oh wait, theirs are far, far better. Amercian cars versus… Toyota. Never mind.

Don’t get me wrong. There is the occasional TOKEN innovation that somehow manages to elude the jaws of enforced status quo.

Post lag…

“All I’ve ever seen is good ideas being shut out, bought out or regulated against because it upsets the status quo.”

Like, for instance,
- electrification
- regrigeration
- telegraphs and telephones
- phonographs
- movie projectors
- teevees
- planes, trains and automobiles
- computers
- air conditioning
- etc etc etc.

Which of these were shut out, bought out, or regulated against? Or did you have some other modern inventions in mind which I never heard of?

All of them.

As I said, if you think you’re living in an innovative society, then you know nothing about what is really available.

You can start with the battle between Edison/Westinghouse and Tesla.

Or the 80 year monopoly of the phone company.

Or how the automakers colluded against railroads to kill passenger service. (you NE coasters may find this hard to believe but outside of a few west coast areas, the rest of don’t have commuter rail. Or ANY passenger rail for that matter)

I could go through the whole list and show how we are using inferior technology because of corporate greed and enforcement of the status quo.

Read more history. You can start with Google Books and read old Popular Mechanix. (in the 1930s a man invented a suitcase computer, but they called it an electrical calculator. A doctor invented the maser. Solar power was invented.)

I don’t make these things up kids.

Ecofeco —

I think we are on the same page. If antitrust laws were vigorously enforced to break up monopolies and oligopolies, we could have a much more competitively vibrant (and collectively prosperous) economy, but then who would provide the “free speech” to help get Congressmen elected who are willing to play the role of monopoly/oligopoly protector?

In short, we have had plenty of innovation over the course of U.S. history, thanks in part to the degree of free enterprise we enjoy, but it could be a lot better with fewer fat cats and greed pigs trying to milk the system to their personal advantage to the detriment of others, and more people who asked not what their country could do for them, but what they could do for their country.

Detroit is the only area with index below 100, at 72.14. Ouch. They’re at 1995 prices there.

All of California seems to be an enigma. Given the size of the bubble there - it’s amazing that they’re starting to head back up there. The only other place comparable is DC; which is understandable given the growth of government spending.

Only thing I can figure is that CA is a bit different than FL, NV, and AZ, in that it has a much wider economic base (farming, manufacturing, tech, entertainment), whereas FL, NV, and AZ are more retiree and/or tourist-driven. As such there’s more of a “platform” under the CA bubble perhaps (albeit perhaps temporary). Still seems weird though, especially given CA’s budget problems.

Went to the parade this weekend and eyeballed the Bayshore houses, noticed several were for sale. Got onto Zillow and started scanning around the area. Of course anything on the waterfront was 1 million +. Later found a townhouse that had sold about a million in 2007 and was short selling now for 380k. That is a HAIRCUT! The place was built new in 2007 as well, so probably has chinese drywall on top of it all. Sad.

Packman,

Long semi-focused ramble below.

California has other peverse incentives. Prop13 being the largest. Tends to make prices bubblier and people will hold on to things longer.

A lot of stuff built in Nevada and Florida had zero economic value. Far flung areas with little population that would need those houses. The retire population in Florida doesn’t need a bunch of 5 bedroom houses. We are talking people settling down with maybe a three bedroom house, single story, near hospitals and possibly some public transportation. They built a lot of stuff in exburb areas. Unless a lot of companies suddenly decide to move to inland florida, I don’t see it working. What goes first in those places? Population or business.

Vegas got a lot of homes built on that condo/vacation home model. So, they are in the toilet.

California… a lot more industry here. Agriculture, movies, aerospace, automotive, import/export, oil. Plus a healthy dose of tourism.

Now places that are agricultural are getting hammered and far flung suburbs. Close to the beach things are pretty far down but the bulk of the loans are AltA. So, expecting 2011-2012 to see more of the declines. That is one year or more after the recasts start to default at a high rate.

That isn’t the bulk of the California market but it is close.

Other things to consider with the budget. My guess is that business owners are looking carefully and probably extreemly wary of putting hard assets into place in California. Now, light industry that is easily relocated is different but other manufacturing will probably avoid any new investment like the plague. Eventually that will suck off population and pull prices down even further. Like with the mortgage recasts and inevitable defaults; there is a big time delay. People will start feeling the debt increasingly over the next decade.

Again I expect a long term deflationary trend. See Michigan? That is a long term deflationary trend. Pro-union laws drove business out along with draconian enviromental regulation. Business slowly fled the high wages. The liberals there keep taxing to death the few remains. I think the big blow will be Ford relocation of its headquarters out of state. They labor force is withering away.

What to make out of that? Did Michigan suddenly become an undesirable place to live? Massive drought? No. Stupid progressive agenda persued on a major statewide scale made them non-competative. And it isinteresting to see the long slow grind of it as well. Nothing dramatic, just keep going for a long time. Plenty of other stuff to pick at there too.

Not making this as an attack on social welfare policy promoted by a lot of liberals today. However, you have to be careful enacting things on a state level vs national level. Also have to look at the frame work of a global market vs just a US national market.

And before you go off on a protectionist rant out there. Think longer term about China and India. Those are potentially huge markets in the future. There is a huge potential there.

Not saying this is the right answer but some kneejerk reactionary BS might be a long term mistake.

Right now, things are begining to stabalize. I expect, unless we do something stupid, that exports will continue to rise, wages real and nominal will fall a bit more and everything will begin to balance out.

Hopefully, we enact some careful legislation to make the banks more stable with less risk to the rest of us, along with working off the debt and getting away from conspicious consumption patterns.

“…that it has a much wider economic base (farming, manufacturing, tech, entertainment), whereas FL, NV, and AZ are more retiree and/or tourist-driven.”

Your post seems to assume end-user demand supports CA reflation. Here I had thought it was largely flippers making all-cash offers, but perhaps you have better info?

Your post seems to assume end-user demand supports CA reflation.

Well - “supports” is a relative thing. The end-user demand itself isn’t enough to support reflation, but end-user demand combined with shiny government incentives can. At a surface view this seems to have fed a new wave of speculation - a wave not as high as 5 years ago of course, but a wave nonetheless.

FL, NV, etc. also had the shiny government incentives, but not the end-user demand. Their wave of speculation is still waiting on an actual economic turnaround - e.g. so that the baby boomers can finally retire on their IRAs and pensions and buy up all that empty inventory. For now though there’s not much retiring going on.

james - sorry - too much to respond to at this point, however I did forget about prop 13; it makes sense that that would have some impact.

Bear, Packman

Just a note… bunch of really bad typos. I meant to say we haven’t seen the bulk of the drops in costal California. The lag in prices will probably cost us a lot of business.

I don’t think the prices are sustainable in the long term but expect a healthy amount of “inflation” to lessen the crash levels (That is past inflation being realized as capital flows back to the US.)
The fact is there is a lot of business in California. Inland valley is such a major agricultural producer and I don’t expect that to change. In fact I’m bullsih on Cali agriculture. THe cold snap will probably hurt orange production in the rest of the US for several years. Devaluation of the currency will also lead to increased food exports.

I expect that aerospace business continues to move along in its slow steady pace, picking up a bit when China decides to lose money in that area.

The film industry is going along just fine. That is a dynamic part of the economy where we still have a good solid technical lead. Top end marketing and all that.

State has some other contributors as well. We have very good ports with San Diego, Long Beach and San Fran. Long term viability there along with some rail systems.

Hence I expect costal California still has a lot of economic life left in it. Growth… maybe not. So a slower deflation here than in places like Florida, Pheonix and Vegas.

The tradeoff is places like Pheonix, Vegas and Florida have the potential for dynamic growth. I see California as developing a malaise. Particularly expect that enforcement of enviromental standards will head into the dumpper and quality of the beachs will take a dive. Similar with the debt burden and taxes eating away at the fringes. Companies will leave and I don’t see a lot of drive to bring them back in. We have tremendous momentum hence it will take a long time. There is a lot of talent floating around, not talking about myself here, and work base for high tech industry. However it seems like we have a heck of a time attaracting new talent. Most of the young people say F this sh&t with housing.

Another of the marvelous effects of things like Prop 13 is drives away young families. I suspect if we dig into it the average age of the non-hispanic population is decreasing. Overall points to a long monumental decline.

Would add here about my free trade remarks above: I was against NAFTA and favored trade status for China. Dead set against. Unfortunatly, it is harder to undo what has been done than it was to set this whole thing in motion.

I dunno… I think back to 98-99 … 2003… could we have broken the chain of events? maybe if we had kept the GSEs out of this we’d have less of peak, fewer forclosures and some method for moving things forward. Which is why I HATE Dodd and Barney so much. They campaigned against reform and led that charge.

Maybe if we hadn’t destroyed our border integrity and self reliance with NAFTA and China. Perhaps consumption wouldn’t have peaked so high.

Oye.

Overshoot? God I hope so!!

I would be in the market today if I believed there was an enlightened UHS out there who was willing to work subject to the constraints of my perspective. But the evidence suggests otherwise, and besides, renting is still less expensive than owning in coastal Cali.

What’s a “steal-deal”?
let’s save the address and reevaluate it in June or December.

“Thanks to government’s acknowledgment that financial recovery is too big to fail, and knowing govt will support them come hell or high water, the banks can take their time about it.”

Bingo! Banks get forebearance; meanwhile, households get NODs.

Yes, they get NODs.

You have no problem with the bank getting stuck with the devalued collateral. Why complain about the NOD? It’s also part of the contract.

Borrowers who do not repay a loan are sure getting a lot of sympathy around here..

I believe you are right, joey. Government guarantee seems to be the difference this time.

“You have no problem with the bank getting stuck with the devalued collateral. Why complain about the NOD? It’s also part of the contract.”

I have no problem with either NODs or devalued collateral. What I cannot tolerate is socializing losses due to stoopid bank lending (remember the $700,000 home loan to the Central Valley ag worker family who pulled down $30,000/year?). The consequences of a bad contract should go no farther than the signers; otherwise there is a moral hazard problem for Megabank, Inc to make lots and lots of bad contracts, then try to dump the toxic assets on Main Street. Is this hard for you to grasp, Joey?

Maybe if we say this often enough, someone in high power will hear it and act on it? We can only hope…

You can’t. The only way that much influence and power is tamed is when they wound or destroy themselves.

“The only way that much influence and power is tamed is when they wound or destroy themselves.”

But even that is not enough if they have govt-provided free TBTF insurance. In fact, it may be necessary for them to blow up so badly that the system completelly collapses before anyone in power is willing and sufficiently determined to restore a functioning system.

The same hold true for empires.

It might be who of voters to remember McCain proposed a federal spendng freeze and Obama scoffed at the idea. look who’s turning populist conservative now……
Just more political lies from the annointed one.

You mean like the spending freezes that McCain proposed numerous times on the campaign trail and Obama REPEATEDLY said was NOT the solution.
His overused analogy was that freezes were like using an axe, when he wanted to use a scalpel to precisely trim the budget in areas that didn’t effect his friends and supporters.

Best part of all about Cheney-Shrub 8-year term:

They couldn’t forestall the news that the recession started in year 8, as the culmination of their efforts to wreck the country…

Cheney-Shrub Sept 2008: “If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.”

Cheney-Shrub hand lil’ Opie the “Non Hawaiian” a potato sack: “Now hop in their boy, and start a runnin’ & a hoppin’ ”

Doesn’t seem to stop the revisionist history messages, does it?

“They couldn’t forestall the news that the recession started in year 8, as the culmination of their efforts to wreck the country…”

I stand corrected. It officially started in December 2007, right about the time Hank Paulson issued a report which essentially forecast ‘No recession in 2008.’

What’s the old joke?

Ain’t that like a bunch of southern rednecks? Make a big mess then make a black man clean it up.

(ref. Republican “Southern Strategy”)

Shhhh. You are never supposed to mention the fact that nancy, harry and barry all voted for TARP.

budget problems we have are indeed caused by a myriad of people from both parties.

For the life of me I can’t figure out why more people can’t acknowledge this most basic FACT.

Without its understanding, it’s all just meaningless noise.

It will take several years (maybe even a generation) to undo the wreckage W left behind. The mistake Obama’s advisers made was to give the impression that a quick turnaround was within the realm of possibility.

it’s been over a year since the Messiah came down from the mountain top. Eddie 08:30:06

There it is… the “Messiah” thing…

I’m wondering why many on the Christian-right who are hostile towards the President call him the “The One” or especially call him “The Messiah” because by calling him “The Messiah” they could actually be breaking one of their Ten Commandments. And even if they are not Christian, using that term in that manner it is highly disrespectful towards another’s religion.

For example: The bible says, “Do not take the Lord’s name in vain”.

“You shall not make wrong use of the name of the LORD you God; the LORD will not leave unpunished the man who misuses his name.” - The New English Bible

And Christians believe Jesus is Lord.
Jesus said, “You call Me Teacher and Lord; and ye say well; for so I Am.” John 13:13

And in Christianity, Jesus is The Messiah, therefore for Christians, “The Messiah” is Lord.

Therefore a Christian calling anyone “The Messiah” in a derogatory manner most likely is taking the Lord’s name in vain. And if not actually breaking one of the Ten Commandments it would still be unacceptable because it would fall under the definition of blasphemy.

blasphemy: 1. impious utterance or action concerning God or sacred things Dictionary.com

So if they are Christian and calling our President “The Messiah” then they are by definition being blasphemous and are most likely breaking one of their Ten Commandments.

And if they are not Christian and doing it then they are, in the least, being very disrespectful of an important tenet of Christianity.

Let’s not forget Clinton, and even Bush 1 - they both had a direct hand in this mess.

(Clinton’s role w/the GSE’s and CRA has been discussed ad nauseum, but let’s not forget the GSE Act was passed under Bush 1 in 1992.)

“TrueHaskell™” = “Butt, butt, butt…”

Rio -

It’s because during the 2008 campaign 0bama’s supporters christened him “The One”, and some went as far as believing he was going to lead them to the Promised Land.

See artwork taken from 0bama supporter sites:
http://img683.imageshack.us/i/peoplekneelin.gif/
http://img683.imageshack.us/i/thedream.jpg/

@Rio: I agree completely with the blasphemy part, and might I add IDOL WORSHIP which breaks yet another commandment. Calling Obama “Messiah” like that must realize that he is only born a sinful human, like all the descendants of Adam.

Not only that, it is a cheap shot ad hominem attack which does NOTHING to solve the problems at their root.

Rio -
you may need to let Michelle 0bama know your thoughts on the subject:

“Obama’s wife, Michelle, opened the rally with a description of her husband that could, at moments, have been a description of Jesus Christ.

“We need a leader who’s going to touch our souls. Who’s going to make us feel differently about one another. Who’s going to remind us that we are one another’s keepers. That we are only as strong as the weakest among us,” she said, echoing biblical passages”

Link to Messianic campaign rally in South Carolina-

http://www.politico.com/news/stories/1207/7281.html

0bama/Oprah/M0: 21c Defenders of the Faith?

From the: “Link to Messianic campaign rally in South Carolina-”

“This is a very deeply religious state,” he said. “A lot of people came here directly from church.”

Yakety Yakety Yak,… lil’ Opie should have just told everyone there, “Like Shrub, Jesus is my hero”

X-philly,

Although I dislike the usage of both, I made a distinction between “The One” and “The Messiah”. It is “The Messiah” of which I wrote mostly.

The article on politico looks to me like it had an agenda designed to offend core beliefs of Christians. I do not like this tactic. I really did not see any difference in the actual quotes of Mrs. Obama from many Christian right-wing politicians and their supporters who use Bible references and imagery in their campaigns. In fact, the right uses Bible imagery much more than the left. I do not see much problem with this unless it is taken to an extreme because after all, most of America values it’s Judeo-Christian history.

However, I really don’t see any difference if he is being called “The Messiah” by a Republican or a Democrat. I would condone neither.

The only difference I see is that it is the right that is utilizing that phrase now ad nauseum, and in a cynical and blasphemous manner. Even if there were two wrongs, that does not make a right.

I stand by my above post’s validity applying to both the left and the right.

ouch! Sad but true!!

Once again, Congress was NOT controlled by the Dems. 51% to 49% is a majority only on paper. (honestly, I can’t seem to find hard numbers)

And yes they did vote for it. At least you got that part right.

But openly supporting Wall St is not the Dem’s MO and makes me wonder what was really going on. And the Repubs NOT supporting Wall St. REALLY makes me wonder because one thing I’ve learned is that Repub don’t give a damn about J6P.

But openly supporting Wall St is not the Dem’s MO

Well - “crisis” mode called for an exception to the normal backroom support mode.

All I know is we sure as hell aren’t getting the full story. There are still a lot of things that don’t add up.

You were saying….

…that Eddie grossly takes everything out of context, does not understand imagery, is conceptually challenged and has been proven wrong about the recession’s depth, the productivity of American workers, rents rising, unemployment compared to the 80’s, and Eddie is blasphemous and/or disrespectful of Christianity when he calls our president “The Messiah” ?

Did I miss something?

Ryo give it up man, you’re spinning faster than John Edwards on father’s day.

+1 and LOL

Okay, I’m a Demmycrat and I voted for him, but dam (an edifice erected to hold back large amounts of water), that’s funny. Good job, Combo.

so true but even if he turns out to be a complete sellout we won’t have to watch vice-president palin preside over the senate (assuming the function had been explaned to her)

mmmmm..not too bad, depending on how close it is to Chicago. No matter how you slice it, it’s semi-skilled labor at best, which simply doesn’t pay well. The real question is how long those jobs will last.

Probably good benefits too. 14 per hour gets you into a 100k home. Not great or anything but hellva lot better than unemployed.

WHAT?! Are you serious?! $14 DOES NOT get you a house. What dream world are you living in? $14 is barely an apt in the ghetto with a roommate.

You do know that adjusted for inflation, min wage should be $11-12hr, right? (1980 - 3.10 @3-4% per year)

Oh, and no benefits.

Exactly oxide, although I hate hearing people say factory work is less than skilled. “Quality” is knowledge and skill, not just formula. And quality starts with the builder/assembler.

As for how long those jobs will last? I think “SUV” says it all.

Back in the late 1970s, I had a summer internship at a radio station in NYC. Crazy Eddie was a major advertiser, and even then, his commercials were over the top. Around the station, we cracked more than a few jokes about them.

Our friends over at Wikipedia tell the story of Eddie’s rise and fall.

This gives me flashbacks of the movie “Howard the Duck.”

We can yuck it up over the goofy commercials, but he really was ‘the model’ for today’s corp. structure.

Once again - I got caught in the Wikipedia net. I love to follow links to learn this stuff. From the Earl Muntz link I leared that the same guy that created Lear jets - Bill Lear - also created 8-track tapes, and even invented the first car radio. I never knew that.

(Though I’m sure much of it wasn’t so much directly invented by him - more by his minions; same is true of Thomas Edison BTW)

Stu Leonard’s is still the best market I’ve ever been to.

That was the station where I interned. But, nope, Jerry wasn’t there when I was there. The big star deejays were George Taylor Morris and Danny Near.

I’ve never had a teevee. And I don’t feel like I’m deprived of anything. Not having a teevee frees up a lot of time for other things. Like reading books. Volunteering. Bicycling. Visiting friends and family.

My TV consist of archived shows on HULU.

I’m half-way through season 2 of the A-Team

He is dead on. Giving welfare is like feeding strays.

“Giving welfare is like feeding strays.”

Especially giving welfare bailout payments to Wall Street’s stray fat cats.

He is dead on. Giving welfare is like feeding strays.

Spoken like a good Protestant Fundamentalist Eddie.

“…70% of respondents were happy that the Senate is no longer filibuster-proof.”

Democrapts = “Do Everything”
Repubicans = “Do Nothing”

100% result = “TrueGridlok ™”

San Diego Union tribune is a bunch of commie skum!

Not sure this summarizes the entirety of the Eddie Belief System:

Anything like regulatory enforcement designed to create efficient markets, protect investors from conflicts of interest, enforce trading rules and prevent widescale fraud is socialist.

Handing out free money via the Fed to bankers and having a semi-independant Treasury backed Federal bank that practicies social engineering via interest rates guesses, treasury purchases and quantative easing is free market capitalism.

Medicare is a God given right of the people for medical care they have not payed for but backed by taxation and is of course a pure capitalist system.

Probably missed a few things here.

Something about having the God given right to bomb any country that contains a majority of brown people. This includes California hitherto refered to as the People’s Republic of California; not including the Principality of Berkley who has revolted into a neo-narcissit commune dedicated to growing a wide variety of fruit.

Moral hazard, San Diego style:

Five in pension board case have charges dismissed

By Greg Moran, UNION-TRIBUNE STAFF WRITER

Tuesday, January 26, 2010 at 12:02 a.m.

OVERVIEW

Background: Six former San Diego pension board members were charged with breaking the state’s conflict-of-interest law in connection with their votes in 2002 to underfund the retirement system, as the city had requested. At that time, the city also was negotiating labor agreements that increased pensions for all workers. Prosecutors contended the two actions were linked and violated the conflict-of-interest law.

What’s new: The California Supreme Court dismissed the charges against five of the former board members but allowed the case against former firefighters union President Ronald Saathoff to go forward.

What’s next: Three of the defendants are involved in a federal pension-fraud case. A decision by the U.S. Supreme Court on the federal fraud law is expected this year.

A unanimous state Supreme Court dismissed criminal charges against five former members of the San Diego retirement board yesterday, but concluded that the case against a sixth member, former firefighters union leader Ronald Saathoff, could go forward.

The decision ended most of a legal battle that began nearly five years ago when District Attorney Bonnie Dumanis charged the six former board members with breaking the state’s conflict-of-interest laws.

The decision will not do much to help the city’s ongoing pension woes.

The court essentially ended the case against Cathy Lexin, former human resources manager; John Torres, a fingerprint expert with the San Diego Police Department and former vice president of the city’s largest labor union; Mary Vattimo, former city treasurer; Theresa Webster, former acting auditor; and Sharon Wilkinson, a city analyst.

Writing for the court, Justice Kathryn Werdegar said the five could not be prosecuted because their actions in 2002 were shielded by other provisions of the conflicts law.

In a now-infamous sequence of events, the retirement board in 2002 adopted a proposal pushed by top city officials to put less money into the pension system than was needed to keep it adequately funded. At the same time, the city negotiated new labor agreements that increased pensions for all workers.

Prosecutors contended that the two actions were linked and violated the conflict-of-interest law.

That law is intended to prevent public officials from self-dealing. Among other things, it bars public officials from participating in contracts in which they have a personal financial stake. Werdegar said that while the defendants did have a financial interest in the 2002 plan, it was the same interest held by the 20,000 other members of the retirement system. That common interest does not pose the kind of conflict the law aims to address, she said.

“For public officials to have a conflict of interest, there must be some differentiation between their financial interests and those they represent,” Werdegar wrote. “Here, there was none.”
…

Seems a couple of those articles mentioned were opinion pieces too, not actual headlines of cnn money…

Here are some other CNN headlines to balance today’s anti-CNN, cherry-picked, cobbled claptrap.

Stimulus and jobs: What the fight’s all about
‘Daunting’ outlook will mean bulging deficits
Spend. Cut. Obama’s tough spot on debt
US jobs are the key to sustained recovery
Beware the 4 new asset bubbles
People @ Work: The Great Recession Is Worse for Men

If this issue concerns you, you’re not alone. Here’s a group that’s working to help solve this problem.

Dogs Deserve Better

I’m not a PETA guy; just wanted to make note that Megabank, Inc’s labor and mortgage loan liquidation program is a bit hard on America’s pet population…

You’re not a PETA guy? Why not. They do great work.

Like putting tofu cream pies in the faces of Canadian MPs…

Thanks for keeping us informed of your twin’s whereabouts…

Twin trolls

Eddie Money is back visiting the ’80s.

When he is providing facts for discussion, Hwy, it would be nice if you met him with facts instead of ad hominem attacks.

I disagree with some of Eddie’s conclusions about the economy, but these personal attacks are driving me nuts. I skip big chunks of threads to avoid them: “page-down, page-down, page-down, oh look, something that isn’t a personal attack and might be worth reading for a change.”

“…How much did hope and change - global warming version cost while attending Copenhagen?”

I calls Haskell’s pot stirring as I see’s ‘em:

Haskell
True
Myopic
Instigator

I finally got the Haskell thing. Seriously, Leave it to Beaver references? What is that show, 60 years old? Come on man, if you’re going to insult me, at least use some references post-1970 for us non-retirees in the crowd.

“…if you’re going to insult me” lol

Haskell, as I’ve told you before, it’s a classification I use solely for you

Here’s a Fact: Hwy uses this for classifying Haskell pot stirring posts:

Haskell = “TrueMyopicInstigator ™”

If you’re insulted by this Haskell, too bad.

If the shoe fits, wear it; I would find a more recent cultural reference, but this one seems cobbler-made for you.

Leave It to Beaver (S2) - “Eddie’s Girl” pt.3/3

FACT: Nancy Pelosi and the other 20 house members spent on average $2200 per night while attending the AGW conference in Copengagen.

Carry on with the emotions Hwy49 and Bear Dude as you ignore the fact that your beloved Dems spent more on a night of luxury hotel digs than many people earn a month.

Hey but that’s cool, the Dems are all about looking out for the little guy, right?

Dems … Pelosi… wha-huh?

I don’t give a flying fark about this political hooey, but Mr Strawman King is making up some new fantasy about I post here to avoid calling attention to the devastating rebuttal yesterday to his assertion that “the economy began to recover six months ago.”

PB - don’t forget - don’t feed the trolls.

Remember the prayer:

God grant me the serenity to ignore the trolls,
the courage to debate with honest opponents,
and the wisdom to know the difference.

Thanks for the serenity prayer. In fairness to Eddie, that post we did yesterday to destroy his case that “the economic recovery began six months ago” probably would not have happened were it not for his goading.

We can only hope.

Really? Did you think carefully about this answer?

Ooops. My bad. No, I didn’t think before typing.

BTW, I’ve seen all sorts of cases where a cop pulls one car over for speeding while the rest of the freeway traffic goes whizzing by at many miles above the posted limit.

I am always happy to see cops kept busy ticketing other drivers.

I am also glad that people like to speed faster than I like to speed.

There’s an anecdote cops have - after pulling over a speeding motorist, the motorists asks him “Why me? There are tons of people speeding!!”, to which the cop answers “When a fisherman makes a cast - he doesn’t expect to catch every fish in the pond, does he?”