The Housing Bubble

“They are jumping all over this because Toyota has a long standing reputation as building high quality cars”

There is one bomb crater in that undeserved reputation.

More to follow.

And that is what the media is - entertainment.

Bingo!

polly - generally I think you’re pretty much on with your observations, but I think you’re fairly naive w/respect to the media - they very much are in bed with government and finance high-ups. Do some google searching to see what I mean. There are very frequent meetings between key people in these parties.

There’s tons of wacky conspiracy stuff out there of course - much of it is way off the deep end. But please don’t throw the baby out with the bath water - there’s lots of truth there too.

I’ve always wondered, why can’t Toyota Engineers locate the engine’s oil filtor vertically rather than their usual angular position, which means a phucking mess when you unscrew the damned thing?

“There is one bomb crater in that undeserved reputation.”

The present fiasco even when sweetened w/verbal arguments won’t change the fact that a lot of American families have owned Toyotas for years. Lately (last 5 years we’ve heard of problems) but when I compare those problems to those some serious issues my parents had w/their GM cars or my hubbie had w/his Ford vehicles before I converted him IMHO Toyota still has momentum. What they do from here however is critical to whether or not they throw away their previously hard earned goodwill.

In my mind, Toyota may have done what American car companies did before them. They made people happy until they gained maximum market share and then decided to rest on their laurels and cut corners. I hope unlike the Americans Toyota smartens up before the customer goes elsewhere. I liked putting very little maintenance into 120k miles of driving and everything still working. I can report my current vehicle at 90k/ 6 years is humming along like all the others before them. Like new if you don’t count the parking lot scratches. That’s really the kind of vehicle Americans will be looking for in the future as our std of living diminishes. (the new car every 2-3 year quality level isn’t gonna cut it for much longer)

” the new car every 2-3 year quality level isn’t gonna cut it for much longer”
So true CarrieAnn, leasing and MEW just helped the car companies and sheeple extend the inevitable.

Americans seem to have a fanatical devotion to the Toyota brand, and seem to be in denial now that they are behaving like other car companies: cutting corners, etc. I was not impressed with the quality of my last Toyota (2002 Corolla) and at that point I realized that perhaps the Emperor had no clothes.

FWIW Europeans are perplexed by our devotion to Toyota and other Japanese brands.

CarrieAnn,

When I lived in CNY, we referred to Toyotas as “Rust-olas” because they rusted out after 6 years. Same with Ford’s for that matter.

Perhaps their (body) quality has improved in the last decade, but based on 1990s Toyotas in the Syracuse area, I find it puzzling that you have such devotion to them.

Last car was a 1999 Corolla. Bought it used with 60,000 miles and sold it with 229,000 miles on the odometer. Would have kept it longer, however, it was getting to the point where it needed tires.

Current car is a 1999 Corolla. Bought it used with 62,000 miles. Currently has 120,000 miles.

Clear sailing with both cars so far. The challenge is the 90 mile round trip to work Monday through Friday. For me the Corollas are relatively reliable inexpensive throw away cars. The switch to Corolla occured after a number of reliability issues with American made cars both new and used. My only requirement is that the car gets me from point A to point B with minimal regular maintenance.

buddy got a brand new 2005 corrola,5 speed manual, BETTER gas milage than a prius,
i don’t know how many miles but trouble free.

I’ve always wondered, why can’t Toyota Engineers locate the engine’s oil filter vertically rather than their usual angular position, which means a phucking mess when you unscrew the damned thing?”

punch a hole in the filter before unscrewing it

Toyota did start cutting corners in the 1990s. It’s called “decontenting.”

http://tinyurl.com/ykv5on9

Cincy….I remember in college laughing at the foregin rust buckets. That was early 80s. Had a Camry through the late 90s/early 00s. Just a few teeny specs of rust from pebbles flying up from highway or on the edge of the door. That was my 120k vehicle. Don’t know why things would be different here. We use salt on the roads in New England too. We had no garage either. I did wash and wax my vehicle regularly. And never got into any accidents. People used to ask me if it was new it shined up so well. Really.

With today’s vehicle I see multiples of them out on the road right now. I sometimes try getting into someone else’s there are so many w/the same description. Can’t say I ever saw rust on a one unless they’d been in a fender bender.

I don’t know if Toyota bodies have improved in terms of rust protection, but their frames certainly haven’t. In fact, they’ve gotten worse. Google “Toyota frame rust”, click images, and be glad you’re not driving one of those trucks or SUV’s. Scary.

Google “Toyota frame rust”

I know there were issues with Tacomas a while back (the ~2000 models). The 4Runners of the same year don’t have the issue - seemed to be related to them being transported across the ocean, if I recall correctly.

No issues with my ‘99 4Runner to date. Rust or otherwise.

Our Toyota runs like a charm, but I am glad the American press is (unfairly) hammering them. I anticipate paying a lower price for the same quality car (or same price for a better quality car) the next time we buy a Toyota in a decade or so from now.

Our Toyota runs like a charm, but I am glad the American press is (unfairly) hammering them. I anticipate paying a lower price for the same quality car (or same price for a better quality car) the next time we buy a Toyota in a decade or so from now.

Same boat. My thoughts exactly.

“the next time we buy a Toyota in a decade or so from now” LOL!

Yep, sure sounds urgent..? Can’t say as I’ve ever met a ‘disgruntled’ TOY owner. The neighbor has his & her white camry’s and I always wondered how they knew which one was which? ( Like it matters? )

Me three!

Disgruntled toyota owner here, pleased to meet you.

My wife’s truck, bought new, well maintained, died of head gasket failure at 100k, due to a design flaw that was covered in the trucks made 6 months later. My mechanic told me there was no difference in the engines.

Then there was the screwing over on the bills I got for ‘maintenance’ performed under the alleged ‘maintenance contract’ (I guess since it was my wife taking the truck in, they figured they could gouge her. It took multiple hollering episodes on the busy showroom floor ok to claw back a refund for it.

What I paid for the maintenance contract came out to 60 bucks for each oil change, but I wanted things to be simple for my wife, so I paid it… and they STILL wanted to gouge me for more.

I would happily watch Toyota doused in gasoline and lit on fire. As, most likely, would those that died in a firey 100mph crash because their Toyota accelerator stuck, were there enough left of them to comment.

There. Now you have a counter example.

That is funny. I had a Ford Mustang that blew a head gasket. Funny thing was I received a notice warning about defective head gaskets failing at 80k miles. Said, gee I made 120k and no problems.

Put down the notice and started driving to work. See a bunch of steam going out the back end.

Well, I got a tow and 800$ later had a new head gasket installed. Just changed the oil and replaced the head gasket. Car went on just fine for another 35k miles before it blew another head gasket and my nephew decided to rebuild the engine.

“doused in gasoline and lit on fire”

Russ…, hey don’t sugarcoat it on ‘my’ account? LOL! Yeah, been there done that. Still, in their defense ( like James ) I’d been through multiple HG fiascos w/ my Ford and… became rather adept at changing them!

So no offense, but (1) HG fails to impress me. *Here’s my one and only HBB plug. Stuff is called ThermalWeld and simply put, Billy Mays should have been hawking this prdt!

Very cheap ( and quick ) fix. Even at retail it’s like $299. Heat up the car, pour it in, drive like hell, go in house, have beer. It really IS just that simple. My SIL and I scour CL for “has blown HG” posts. Not a bad little sideline. It’s not your HEAD’s fault! It’s all these aluminum engine blocks. They expand and contract at different rates and it’s just a matter of time before they blow.

Head gaskets are a major problem on older 4 Runners and Tacoma’s.

AmazingRuss,

That is a sucky story. I feel bad you had to endure that. I’ve heard more stories like that than I used to and I have a local Toy. dealership I refuse to go to based on some idiot acting like he was too busy to show me a car if he couldn’t check out my trade at the same time. He was standing there doing nothing! There are cretins everywhere.

AmazingRuss, that wasn’t Toyota, that’s just plain old everyday American car dealers.

And THAT is why GM and Chrysler are hurting. Because the American people, dumb as they are, aren’t THAT dumb.

The dealers have finally screwed themselves. And the same can happen to Toyota because of the arrogance of American car dealers.

American car dealers suck.

JD, a friend with a subaru told me that his owner’s manual said not to use chains/cables on it—something about them not working with the AWD system. I didn’t believe him and made him show me it in the manual.

Does that make any more sense to you than it does to me??

i’ll have to check again.
i remember reading that in one of the manuals, but the other ones just warned about chains/fender clearance
i’ll check and get back to you…..
from expereince though, i never expereinced a problem to the contrary…..
that’s it i’m too psyched up now…i’m goin’ for a cruise in the storm!!!

i have a 96 subaru w/ 176 k miles.

I can’t top that. My ‘96 has 130k. I’d like a minivan, but I don’t think anything is as good on snow and ice as a Subaru, any model. I did get the clutch done a couple years ago.

In the Legacy wagon you can also put a bicycle in the back without removing a wheel, or long XC skis no problem. Can’t do that with a Forester.

Nissan will be the winner. Take it from a G35 driver.

My friend’s late 90s Honda Civic EX had ~500,000 miles on it and was running great when he totalled it. My parents are nuts for Subarus. I keep making the mistake of buying VWs. Why, I don’t know. Currently, I’m in a Toyo Celica- made in Japan- no recalls yet. It’s got a clutch, too, so I think I could handle uncontrolled acceleration.

Hmm…now that I think about it, maybe the value of the rights is dependent on something else. So stock options where the strike price is dependent on something else? Again, you have to read the offering documets. Or at least the summary sheet of the offering documents.

If the house is priced lower than the FB owes, then that FB has to bring cash to the table in order to sell, unless the bank agrees to a short sale. That’s why houses are not priced right. The only way for house prices to come down is to record foreclosure sales as comps.

“The only way for house prices to come down is to record foreclosure sales as comps.”

Which the Realtor Crime Syndicate categorically refuses to acknowledge, accept and execute. Therefore why is anyone surprised when I say housing is in for a multi-year/decade long decline?

“Either the home is priced right or it is not. If it is priced right then it sells. If it is not priced right then it doesn’t sell.”

This is commerce reduced to it’s simplest form. Very basic but often forgotten.

Disagree somewhat, SV guy. What about necessities like gasoline, electricity, food, and health insurance? That always sells, no matter how highly they are priced. That’s why there is (some) government intervention in those idustries.

Prepares for stupid unfocused rant:

Bull&*$# Oxide. We saw big reductions of use in oil/gas with the recession. Not to mention food choices.

Health insurance, aka sickcare,… yeah. I’m going to go out on a limb here and say if you have no health insurance maybe you shouldn’t be playing tackle football with no pads, skiing, boxing, ice skating exc exc.

Not to mention this a country of FAT people. (YOU HEAR ME JAMES YOU STUPID FAT BAS$%^&). Probably ought to trim down.

I guess I’m saying is a lot of the wealth just encouraged stupider behavior. Think that is part of why we have trouble competing with third worlders. They are way more motivated and less tolerant of their ability to put up with their own personal bull&hit.

Don’t take this too the extreme though. Realize there are limits in this but don’t think we are close to the limit on fuel/food/electricity/medical care.

I’m about 10 miles from work by bike. Why can’t I just ride that to work? Would help me be less of a disgusting fatbody. How about car pooling?

i’m still paying to have my air conditioner on. Still paying for electricity for a big TV that I don’t fricking need. Still having too many lights turned on at night.

Oh, there is plenty of room for us to cut back in this country. And a lot of the afore mentioned stuff wouldn’t effect our standard of living one bit.

End rant:

What, where am I?

“What, where am I?”

You’re Live! on Hbb!…ya larda$$…You’re in LA, right? Why don’t you get Bill to be your workout partner? You guys could eat some nutritious algae and hit the gym at 5 am. (*snicker*)

Seriously, though, I agree with your rant. We could cut 50% of the waste in this country and still maintain our overall standard of living, if we’re smart. That’s the big ‘if’.

Forget it alpha-sloth. There are people who’s jobs depend on that waste. Especially the ones who aren’t very competent at anything else to begin with… like a favor to a friend who made a big contribution to your campaign and rehabbed nephew needs a job, kind of someones.

What a great rant! Bravo!

James,

If you stop buying foods that come in packages, you’ll stop eating foods that come in packages–which make you fat(ter.)
And you’ll save a whole lotta money, too. Oh, and drink water instead of flavored water. Same thing.

Good luck to you!

a

No doubt, many felt driven to a HNL ( Hole nutha’ level ) of un-affordability

The hoi polloi have been driven to a HNL of u-a for centuries; that’s nothing new. But for most of those centuries, it didn’t happen, simply because the hoi polloi don’t have the money to do so. They had to go to bankers if they wanted to act on their desires. And the bankers, realizing they too would take a hit, didn’t lend the hoi polloi any money.

But this time, bankers were AWOL this time for two reasons: a) regulators looked the other way, leading to too-big-to-fail etc. b) the bankers realized that they would take the hit, BUT, if they were able to delay the hit just long enough, they could grab their phony bonuses and platinum parachute the heck out of Dodge before the hit came down.

I believe that “b” was the main driver of this bubble — and the main driver of most bad business today.

oxide,

No I get where you stand on the issue, and call it “the turning of a phrase” but for a minute there it appeared you were crediting the HB to an “inanimate” object?

That’s all I was getting at.

Got some inlaws who say they’re to buy as soon as they get back from their vacation, before the homebuyer credit goes away. It got me thinking, that $8,000 is perfectly designed to rope in a couple just like them - both have good jobs for now, but never save anything. I don’t even think they can blame the kids for that, since most of them are grown, unless the guy has some child support from an ex. But they’ve still got their credit, so they’re going to bite.

That credit is keeping low-end housing floating along at $210 or so here, when it should be cratering down to $100k.

…but you all knew that already…

We have some friends who are very well-educated (MBS and PhD) who just bought a place because they thought “it was a good time to buy with the tax credit and low interest rates.” Did I mention they paid OVER what the appraiser said it was worth, so brought more money to the table instead of making the seller take the hit?

I love them (and did try to warn them), but what in the world were they thinking?

Often it is more efficient to engage in a group negotiation rather than a person by person method.

Kind of like hagling on the price of a burger at the mcDonalds.

I don’t like job-locked health insurance either.

And I loathe the individual health insurance market. So do the customers of that Anthem insurance racket in CA.

And I loathe the individual health insurance market

Slim, would you feel differently if the individual actually had clout? eg Insurance no longer tied to employment, and employers not being the only “relevant” customers of insurance companies?

I was at my girlfriend’s the other night when someone came knocking on the door collecting signatures in support of a healthcare reform bill. I didn’t have the heart to subject him to a debate on the merits of what he was suggesting. I just told him I didn’t support it and he went away…

I’m very concerned about the cramdowns IF the govt backs any losses (and is this even debatable at this point?).

We’ve been saying ourselves that if they start cramming-down principal balances for deadbeats, we are going to go out and buy whatever house we want. After we’re in, we’re going to stop paying and demand the lender cram down our principal to an amount we find acceptable. The govt/PTB will have nobody to blame but themselves. They have made clear who they favor (deadbeats or prudent, debt-free renters), and the deadbeats have won.

Yikes is right. Wow. I can see why - everyone who has shoveled their driveway on my street (including me) has just seen it all filled right back in by the wind. At least it’ll be easier to shovel back out tomorrow, since it’ll be loose fluffy snow. I imagine the same thing is happening on the roads.

From looking at the news earlier I’m surprised, and glad, that there aren’t more power outages than there are.

Long-term forecast doesn’t show any significantly warm days coming up, so this stuff’s going to be around for quite a while, unlike the December storm which was mostly gone after the warm rains a week or two after.

I am just grateful we have power. We have a shed full of wood should we need it, but I don’t know how we’d get the gang door open with all this snow!

Just spoke to my parents in PA. I told Dad that the storms are being referred to as “snowmaggedon.”

Well, not according to my folks. They think it’s lovely.

OTOH, the dog is pretty annoyed. She goes out on her walks and she can’t find any good scents to follow. They’re all buried under the snow.

My daughter (in Pittsburgh) calls it the Snowpocalypse. I’m compelled to remind her she was born in Minnesota during a blizzard - in April.

“The forces of global warming at work.”

Can’t tell if you’re being sarcastic, factual or just doltish. Could you clarify? Thanks.

He’s being anecdotal– just like the global warmists (or is it climate changists, or are we back to global warming now?)

Yep

big island? oahu?

Between the two. I live at 3100 ft on southeastern flank of Haleakala on the island of Maui.

HBB party at Crash and Burn’s house!

Oh — and read this book…

Interesting, I did the very same thing at Squaw Valley a little more than 20 years ago as a kid. A friend and I were the last people off the chair, either Emigrant or Siberia Express I can’t remember, and they closed it down due to high winds and blizzard conditions. You couldn’t see the end of your ski pole if you held it out. I was basically trying to “feel” my way down the hill at zero speed when I fell, backwards, 15+ feet off a cornice and into a massive drift. I was completely blinded by the snow, and lost both skis and poles. My friend, though only feet away, could not find me for ten minutes. It took us another 20 or 30 to find my equipment. We had a very difficult time making it back to the lodge.

Grizz,

Do you remember the avalanche that wiped out the lodge at Alpine Meadows? I was skiing the same day at Squaw. The snow was so deep it was unbelievable. Only Searchlight and Exhibition were open. Was snowed in at Tahoe (There are worse things) for about 5 days. Epic storm (1983 if memory serves).

You guys are making me miss CA!! We used to go skiing at Squaw all the time. These places in the east just aren’t the same.

Exactly. That is also the reason my sister got the garage. Her area is safe enough in the daytime but there is no way she should be out on foot there alone after dark.

Methinks that the same thing will happen with these local currency movements that are sprouting up. You can use those Local Dollars to your heart’s content, but for the businesses involved, it’s taxable income and the US Treasury prefers payment in US dollars.

Methinks that the same thing will happen to the local currency movement. Yes, people will enjoy using those Tucson (or whatever) Dollars, but, for the businesses on the receiving end, it’s taxable income. And the US Treasury prefers US dollars as payment.

Oops! Double-speak!

Very interesting, PB. I had not heard of these. How does the IRS feel about these currencies?

Well, I didn’t say that anyone is out there doing those exact studies. I just said that I am doing the equivalent of that in other industries.

Honestly, I’m not sure how you would get that data. I’m pretty sure the government doesn’t have any access to it. A lot of the toys and other spending probably went on credit cards, so if you had access to the data about spending categories on people’s credit cards and could tie that in to cash out refi’s you could do it, but that information is in private hands, not the government. And unless the private organization that did your refi is the same one that holds your credit cards, there is no way to match them up. So maybe a private company that both sponsored credit cards and did cash out refis could do it, but they aren’t likely to bother and if they did, they sure wouldn’t make the results public.

Polly:

That’s the point, if you hire people who cannot think outside the box, they “need” people like you to get the data.

It would be my #1 idea to change America. If you cannot think outside the box you go to the back of the employment line.

If you don’t read and understand alternative views like on this board, you go to the back of the line.

Do this a few million times in the next year and what a remarkable change I think will happen.

—————————————————
Honestly, I’m not sure how you would get that data

If you were on Hilary’s staff giving her an earful about mortgage fraud, then I imagine you would have gotten an earful back about campaign finances. And I imagine the message would have been delivered in no uncertain terms.

I have a hard time visualizing a staffer’s comments about housing fraud being a daily occurrence when the likes of Countrywide were making campaign contributions.

Bubba:

If that is the case why have no staffers come forward and written anything about this? Hillary is not a senator anymore.

No its like i said about they refuse to hire people who can think outside the box.

They claim to hire the best and the brightest but really what does a 4.0 or valedictorian really mean???????

It means they followed the rules to a T and dotted every i, hardly a reason for them to bookmark Ben’s blog.

I mean if I was on Hillary’s staff she would have gotten an earful everyday about mortgage fraud

Elizabeth Warren did just that in 2001(?) or so, but on a slightly different subject. Hillary was between jobs at the time, and invited Warren to summit/meeting somewhere. Warren pounded Hillary with charts about the ailing middle class, and about the BK reform bill (which took a long time to get to Congress). Hillary called it an “awful bill.” Then Hillary was elected Senator and voted for the bill anyway because of politics and donors. The bill was shelved but then brought back and passed later in 2005.

Warren recounts the episode in her book The Two Income Trap.

Even people who saw the bubble realized the political difficulty of taking away the punch bowl.
unemployment going from 4 to 5 percent was considered a crisis. well meaning people thought homeownership was a good thing to anchor people and revive neighborhoods. nevermind car dealers noat dealers the UHS too…..but it was so much a fabric of the economy it was akin to telling a southern planter in 1860 that slavery was not sustainable and he should find another model…..or like telling a 3-year-old that he has to stop eating cookies or he will get sick…..

of course the 3-year-old was the country (governement, constituents, special interests) and it wasn’t a parent warning the kid (or taking the box of cookies away). More like a 5-year-old sibling that the 3-year-old was good at ignoring.

hearing all this talk about “stabilizing” home prices, it’s like the 3-year-old just wants one more cookie.

JD, just a technical point of fact.

Premise: Energy from oil, and from steam engines before oil, is very concentrated, cheap, and readily available. It has spawned numerous force multipliers, with the ‘master’ - the driver - at the controls.

Argument: Before steam engines and oil became acculturated, the masters enhanced their wealth by conquering states and taking slaves. Slaves provided a force multiplier that enabled wealth accumulation through control by the master.

With the advent of steam engines, slaves became nonviable, economically speaking.

Slavery was eminently sustainable until a cheaper alternative was devised. Of course, if fuel becomes uneconomical, hence unsustainable, it is reasonable to presume symmetrical reversion to the prior state, as the owners of wealth will not relinquish their positions willingly. Look for politically correct framing in the return to slavery. We’ll start with prison inmates - a la Jenny Sanders - and work up the SES pyramid from there.

Given the massive efforts devoted to destroying the bases for critical thinking in our society, we the people will likely just shrug until our own doorbells are rung.

The point being - slavery is eminently sustainable. It is a fungible energy source, until an alternative becomes cheaper. Moral outrage will not quash the imperative for wealth accumulation and wealth preservation.

Again I ask:

Can you imagine an assistant or heck even an intern for Greenie or Bernake or TTT…providing documentation that they knew how bad it was, and the “intern” had Ben’s blog on his bookmark, and gave summations daily.

The fireworks

———————————–
Even people who saw the bubble realized the political difficulty of taking away the punch bowl.

jane- interesting post. Are you talking about debt slavery or outright slavery? The former, I think, has been found more profitable.

I’m looking way back in history, broad brush rises and falls of civilizations kind of thing. Slavery had been a constant as civilizations waxed. It disappeared once steam engines emerged into common usage, and disappeared from enlightened society with the advent of oil. Today, although slavery exists, it seems to be found in societies immersed in subsistence level poverty, where electricity and mechanization are not prevalent, where it assumes its historical status as a work multiplier. Not talking about the s*x trade.

I’m reflecting what I read, not advocating or prognosticating.

I am happy you are supplying congress with facts. It’s too bad they don’t quite know what to do with them.

Was it really all that difficult for the folks in congress to see what was about to befall the economy after the enormous debt build up over the last ten or twenty years?

Just how many of these “facts” would it have taken to open their eyes?

Wow!
Thanks alot for posting that packman.
it’s snowing here in the 06488, but that dark and grainy picture, with all the snow on the ground, really makes me want to: put more wood in the woodstove, dig out the x-country skiis, give the generator a test run, somebody’s electric is going to get knocked out when the winds really howel later today….

Congress is totally unnecessary? OK. That is a fairly extreme position. Do you have a suggested alternative? And are you talking about ditching the Constitution?

Congress is totally unnecessary? OK. That is a fairly extreme position. Do you have a suggested alternative? And are you talking about ditching the Constitution?

No kiding polly! I get so sick of the armchair critics that bitch but don’t lift a finger. Maybe “Lehigh Valley” does contact his elected representatives and organize his fellow voters but, as a general rule, his ilk do nothing but sit back and say “throw the bums out”.

I’m not apologizing for anybody but we have the people we have because they WERE elected. Now I guess we can blame MSM for brainwashing the people. Kind of pressumes there is a brain to wash. We desperately need an economic washout to yank people away from there tv/recreation and get them involved in their local/state/federal government…lets see some sample letters to a fedral rep. about what’s wrong….what you want done

Polly,
Don’t take combo’s joke as a poke at you. It’s all in good fun. I don’t want to speak for everyone but I value your opinion on this blog.

Congress is totally unnecessary? OK. That is a fairly extreme position.

Polly, you have heard of the Anti-Federalists, right? And you know that Thomas Jefferson was one of them? Have you read any of their writings?

And you do know, right, that for the first 13 years of our history, we didn’t have a Congress? And that during that time, we were fighting a war? On our soil? And that we won the war? If we didn’t need a Congress then, I don’t know why we would now.

And even until well into the 20th century, Congress was nothing like what we have today, with swarms of support staff and lobbyists everywhere you look.

Polly, you have heard of the Anti-Federalists, right? And you know that Thomas Jefferson was one of them? Have you read any of their writings?

And you do know, right, that for the first 13 years of our history, we didn’t have a Congress? And that during that time, we were fighting a war? On our soil? And that we won the war? If we didn’t need a Congress then, I don’t know why we would now.

LVG:

Ever heard of teh Articles of Confederation…that’s why they convened a constitutional convention and drafted the US constitution…
fought a war on our soil?…that’s the point, it was hard to get people from Mass. to go to Virginia to fight the British. a stronger central government has changed that…

And that we won the war?
More accurately British parliament finally decided it wasn’t worth the effort. There was a sort of congress by the way, it just had a different name - the continental congress.

And even until well into the 20th century, Congress was nothing like what we have today, with swarms of support staff and lobbyists everywhere you look.

well now we’re talking about reforming the government we have today. you should ask Polly what initiaives would be the most helpful in that regard. Be careful, you might learn something.

Hey Polly if you have a few minutes maybe NYCboy and us noo yorkers would like to met ya too. still comin to the beeg apple this weekend…….

” Trying to separate someone else from their money.”

Exactly, the savers/taxpayers are confronting an onslaught from wall street to Washington.

+1

I’m no Sarah Palin fan, but I will ask the question: is she any less prepared for the Presidency than the incumbent?

I’m no Sarah Palin fan, but I will ask the question: is she any less prepared for the Presidency than the incumbent?

yeah
a lot less prepared.
i think any serious law student reading hundreds of cases would have better preparation to be President than Palin. That individual might not have the managerial skills to oversee the executive office but he/she would have seen many parts of government and how they interact.

Don’t misread my comments. There are myriad backgrouds which could provide that prepartion, unfortunately Palin doesn’t possess the most necessary characteristic for the job that would permit that preparation: intellectual curiousity.

“I’m no Sarah Palin fan, but I will ask the question: is she any less prepared for the Presidency than the incumbent?”

I’ll take intelligent and unprepared rather than dumb and unprepared.

good one Grizz!

Whom said the current president is intelligent? Both are not qualified.

These are not people that rose to their positions due to actual political talent. They rose there because of their popularity; placed into these positions by people behind the scenes who do have political talent (ruthless as it often is).

As such, I don’t get worked up over stupid stuff these people do. They’re nothing more than the makeup - the rouge, eye liner, lip gloss, etc - that hides the true being.
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Totally agree with this. IMHO, the “people in charge” are not usually elected officials, have no term limits, and just try to find the most disarming face to put in front of the crowds.

???????

How did you get DoD in this? I was just saying I admire her points of view. I didnt say I wanted her as president. But I do admire her and what she accomplished. I do think Mcain was wrong to have her on his ticket as she was just too much of a shock to the system.

Correction: Mcain made a strategic error in choosing a complete imbecile for the VP slot. And the voters knew it and acted accordingly.

Palin = “one part practiced folksy, one part sassy and a little dash of high school bitchy”.

To a T.

Mr Bubble, I would not call Palin an imbecile. Way over her head, yes, but not an imbecile. BTW, I have the same feelings toward our current VP and I’ve been watching that, camera hungry, blowhard for twenty years.

” I have the same feelings toward our current VP”

And you’ll learn to love him.

Oh yea, that’s right, she isnt a liberal…

I think it was:

“What magazines and newspapers do you read?”

“All of them”

“Name one”

“I’ll get you that information”

…and…

“What do you think about the Bush Doctrine”

“…”

etc.

Don’t forget when she was asked about the bailout (TARP). This one really nailed it for me. It’s frightening, actually.

http://www.youtube.com/watch?v=npUMUASwaec

And a very limited view of who “real” Americans are.

” And you’ll learn to love him”
If I haven’t learned to love, the phony, after the last twenty years it ain’t happening. Although, he can be amusing, in a used car salesman sort of way.

And you’ll still learn to love him.

Then again, most people now consider a couple on their second or even 3rd marriage with a collection of half and step siblings to be “traditional”.

This is actually why Evangelical churches are full of former Catholics. It was the only way those couples could have a “church” wedding.

+100 on Ron Paul, I agree he would be more effective. I just feel compelled to defend ANYBODY who is part of the disenfranchised flyover contingent, who inspires such fear and loathing amongst the 1% of the population that controls 80% of the assets.

As I’ve said before, if Elmer Fudd ran, I’d vote for him.

This is part of my ongoing quest to regain my identity as a “citizen”, in preference to the default setting (”consumer”).

I dunno. I could see the J6P crowd falling for her after a disastrous Obama first term. The only people she would alienate with her folksy, faux fundy charm are folks who always vote Dem anyway.

After all, Bush did win 2 terms, right?

After all, Bush did win 2 terms, right?

Point well taken. I think most people have the reaction of having put their hand on the stove once, though.

EE ???

electrical engineering?

‘hold on to what we have at all costs, this is our last stand’ world view from when I lived in that area. The community whose views you reflect is in a state of stasis and atrophy

Not really sure what you mean, I started petitioning for the Libertarians when I was 15 years-old and am generally considered a bit of a pariah to the majority of people i speak to at a summer babecue around here.

I’m all for radical change (maybe not exactly what you envision) but a real break from the policies we have become used to over the past 30 years.

legalize pot, audit the fed, end bank bailouts, cut the military by two thirds, means test social security, nationalize medicine, make taxation more progressive.
what are your ideas,aside from simply changing faces?

legalize pot, audit the fed, end bank bailouts, cut the military by two thirds, means test social security, nationalize medicine, make taxation more progressive.

Wow - quite the odd mix there, I have to say. Not sure I’ve seen that one.

means test social security, nationalize medicine, make taxation more progressive.

P.S. - I presume you don’t consider yourself Libertarian anymore, right? If so - you may want to do a bit of soul-searching.

legalize pot, audit the fed, end bank bailouts, cut the military by two thirds, means test social security, nationalize medicine, make taxation more progressive.
what are your ideas,aside from simply changing faces?
——————-

Believe it or not, I agree 100% with you on these issues.

Based on my reading and understanding, IMHO asset bubbles are manipulated phenomena engineered by the concerted actions of the entities who will benefit. The wheels are greased via campaign contributions and post-officeholding job offers. We see the revolving door between Goldman Sachs and the policy setting entities in our own government. It would be hard to convince me that politics and bubbles are not intertwined.

I would like to be convinced. This is not an understanding with which I am comfortable.

Thank you….i was working last week so i missed it…..

Thanks, Carl. I don’t keep up with this site very well these days. People can obviously email me if they have questions/bugs/requests since I might not see them here. Email addy at the link above.

Very true, PB.

My mother’s been calling BS on this shortage since the 1970s. Mom taught school for 22 years, and there was no shortage of people who wanted the job then. Nor is there now.

“They’re at the point where the “easy” cuts have been made; any additional budgetary shortfalls will wreak much more havoc.”

Trudat

It was very much a sarcastic statement back when it was made.

I know it’s just you on the subject so far PB, but still, any insight into whether this market in SD *is* headed into the realm of “true affordability” in the next 12-24 months? That’s really what I’m asking… Are these houses priced at 340k priced *right* considering they are 150x rent?

Here are the scenarios I’m considering:

Buying:
1) House prices stay flat for 10 years… After dropping from $520k, the house stays at $320k for 10 years. Don’t care.. building equity while having a place I can do what I want with.

2) House price declines 10% further over the next 5 years. Don’t really care too much as payment is still similar to rent, and 30k loss over 5 years is only 6k/yr, while I probably book same 30k in “equity” instead of rent.

3) House price declines 33% further to 225K in 2 yrs. Wish I had rented another 12-24 months. and got the house with more cash left for more remodeling/vacation/other investing. Interest rates are at 8-10%, but overall payment is similar/slightly higher, counter by bigger mtg interest deduction.

4) Prices slowly fall 50% further over the next 15 years Japan style. But after getting a 15 yr fixed at near equivalent rent, I own my home outright.

Renting:

1) Inflation stays relatively calm in rents, maybe even drop due to excess house supply coming on market. After 1 year lease, I renegotiate lower rent. Prices are flat due to foreclosure/intervention struggle back and forth.

2) Massive inflation from gov’t spending happens, house prices stay flat , but rents go way up. Safe for 1 year as I’m locked into a lease, then have to deal with high rents and who knows what with house prices and hoping interest rate hasn’t skyrocketed.

3) 1 year lease, but interest rates start rising quickly and house prices resume falling slowly. Stuck in lease as interest rates rise. Or break lease and buy a house. Or get 6 month lease or month to month, but pay more for it.

All this uncertainty just sucks. Over the last 4-6 years, it was easy to identify the bubble, and just hold back while insanity ensued. Now it is harder to tell, the gov’t is taxing the crap out of me to pay for the damn banking industry screw ups, and I have to slowly hoard cash & try to find some reasonable investments while it all may be devauled at any time due to gov’t foolishness.

“All this uncertainty just sucks.”

The worst sort of uncertainty is policy uncertainty, when the policy is predicated on the assumption that it will be possible to indefinitely thwart market forces. Market forces have already shown their ability to swamp the effect of distortionary interventions, and they are likely to do so again in the future, correctly predicting the timing of policy failure is a b!tch.

Mathguy, you have precisely laid out my dilemma. If I pull the trigger on the right place, at the right price, I’d be o.k., but like BadAndy’s post the other day: if a pull the trigger on a good place at an o.k. price, I eff up 5 years of patience.

Also, if the weapons of mass collusion continue the Copperfield-like midair suspension, that will piss me off and jam my plan (cue Lord Dark Helmet).

You seem to be thinking it through correctly, but remember that interest rates are at historic lows and thanks to the federal government, mortgages are still extremely easy to get. At some point, rates and standards will move back to a more normal range. In my opinion, the biggest risk to buying now is not that your payment will be higher if you buy at some point in the future, but that the price of the house will be considerably lower because rates have gone up and standards have gone back to normal.

So, if you plan on staying for a long time, don’t have a lot of cash saved, and/or aren’t able to save much each month, then this may be a reasonable time to buy. However, if you do have some cash piled up and/or are able to save a chunk each month, it seems likely that you may benefit from waiting a bit longer.

MacGruber!

A perfect hero for the bubble.

“…Copperfield-like midair suspension, that will piss me off and jam my plan (cue Lord Dark Helmet).”

Reference, please?

$350 for a 3/2 in Clairemont? Clairemont? Oh jeez. I don’t know what the answer is mathguy, but that seems like a heck of a lot of money for a very blue-collar area which used to be extremely affordable. If you think your timeline is somewhere between 2 and 7 years I would really rethink the purchase plan, if we have the price drops we should (down to a more normal multitude of income) you will not be a happy camper.

On the other hand, I can always move out of San Diego if prices don’t go down to a reasonable (in my opinion) level. Not everyone has that option. So I’m not the most unbiased source. But I do think prices are still going to drop.

Please let us know what you decide and I hope we see you at the next HBB meet-up. That is if Ben ever gets his fanny back down here!

2) House price declines 10% further over the next 5 years. Don’t really care too much as payment is still similar to rent, and 30k loss over 5 years is only 6k/yr, while I probably book same 30k in “equity” instead of rent.

This is the second biggest red flag in your posts, IMHO. There may be no “equity” even if you’ve been paying faithfully for 3-5 years. It’s really frustrating to hear people talk about “building equity” in a downturn (sorry, that’s a personal thing). What you are doing is paying down your debt, hopefully this is paid off when you retire. THAT is the ONLY long-term, financial benefit you should be thinking about when buying.

If you think you’re going to sell it before retirement, I suggest you continue to rent for awhile.

Oh, the **first** red flag was when you posted that you were planning to sell it in 2-7 years. If that’s the case, then it is a **temporary** situation. That usually means you should rent. The transaction costs alone (buying, selling…not to mention your ambitious add-ons that will probably cost **at least** $100K if you plan to add a second story to a single-story house) will eat up any potential “equity” you might gain from principal payments, IMHO.

We’re in the same boat, and I totally understand where you’re coming from. In some areas rents and PITI payments really are pretty close, and that is one of the signals we bears have been waiting for all these years. Still there is a lot of manipulation going on right now, and it’s my guess that we will still see prices fall over the next 2-3 years, at least.

No matter what you decide, I wish you and your family the best of luck!

To answer your question - see Case/Shiller home price data. See that last rise there? That’s the direct result of this excess cash being pumped in. And yes that rise does contribute to the coffers of towns, etc., and to Starbucks. It means higher property taxes. It means more HELOCs than would otherwise exist. More importantly it means way higher bonuses for bank execs - bonuses that often get spent on things like yachts and such, paying the salaries of workers in these towns, states, etc.

Not trying to justify this pumping of cash by any means. Just saying that yes - even though an inordinate amount of this cash does serve just to line the pockets of WS bankers (which is why its so morally wrong), much of it does also translate into more cash on main street.

They are currently using it to prop up a variety of markets and asset prices. City, state, and county pension funds and budgets benefit from higher asset prices by collecting higher taxes and paying less to subsidize pension fund shortfalls.

There are just so many potential beneficiaries of higher asset prices out there that it is hard to imagine our government not obliging them to the degree it is able to do so.

Why did the Zilldoe economist neglect to mention the role of government-fluffed housing demand that drove the debt cat bounce in home prices last year?

Feb. 10, 2010, 12:01 a.m. EST

Reversal of fortune

After trend of rising prices, some housing markets see about-face

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — One in five housing markets entered a second leg of home price declines in late 2009, after showing price increases for nearly half of last year, according to a report released Wednesday by Zillow dot com, a real-estate Web site.

In 29 of the 143 markets tracked by the site — including Boston, Atlanta and San Diego — prices flattened or began to decrease again in the second part of last year, after five or more months of consecutive monthly increases, according to the site’s fourth quarter real-estate market report.

Home prices in another 29 markets, including Los Angeles and New York, increased each month throughout the fourth quarter. But the rate of increase slowed from November to December in 21 markets, according to the data.

Nationwide, home values fell 5% in the fourth quarter compared with the fourth quarter a year earlier. Values fell 0.5% from the third quarter of 2009.

“While we have seen strong stabilization in home values during 2009, there are clear signs that they will turn more negative in the near-term,” said Stan Humphries, Zillow’s chief economist, in a news release.

“What we saw in mid-2009 was a brief respite from a larger market correction that has not yet run its course,” he said.
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