Bits Bucket For February 20, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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We’re still having a minor server problem and are working on it.
Re: server problems
I’m sending in my monthly $10! Hope that helps.
Remember people, clicking on the ads helps pay for the blog ( i do it right before i shut down the computer, avoiding the need to close the windows later)
I know. I ordered over an hour ago.
Where IS she?
No tip this time.
Roidy
Child labor is not good. I deplore the use of a minor server.
Possible alternative to Fed-sponsored Megabank, Inc cartel-dominated banking system?
It’s time to throw the central bankers off the peoples’ backs, and restore local financial governance to once-robust regional economies (like California’s, for example).
Economy Prompts New Look At North Dakota Bank
February 17, 2010
Listen to the Story
Morning Edition
[1 min 10 sec]
February 17, 2010
The Bank of North Dakota, the nation’s only state-owned bank, might seem to be a relic. It provides loans to farmers, businesses and students. The bank’s president won’t take credit for North Dakota’s enviably low jobless rate, or the state’s budget surplus. But officials in other states are wondering if it is helping North Dakota sail through the national recession.
This is part of what I don’t get about the current situation. Let’s say a person still insists that we must have a central bank. Given the massive failure at the Federal Reserve (which is after all, just one group of people and corporations), why do we need THIS central bank? Couldn’t we just form another one?
Of course, IMO we could put whatever function the CB performs under the treasury. Then we will hear the cries of Fed apologists about the Great Depression and other ancient histories. Here’s a simple exercise; every time we hear about some poor FB losing everything, why not then hold the Fed responsible? And it’s fashionable to pour scorn on wall street, but no one seems to note that WS owns the Fed!
I’m not really suggesting it is a good idea to “just form another one.” Rather, I am suggesting, in resonance with recent Nobel Prize winner Williamson, that an increase in local governance of America’s banking system might result in better economic performance. I would love to hear from anyone who disagrees, especially in light of the North Dakota anomaly. Who says a sample of size one cannot be pragmatically significant, even if not statistically significant?
Oh, a Nobel Prize winner - instant credibility as in Obama, Stiglitz, and Krugman. Ugh.
You ought to consider first trying to get your brain around what the man said before summarily dismissing him as “just another one of them dumb ole’ Nobel prize winners”…
Nah — on second thought, don’t bother; it would take too much time and effort, compared to making a flippant and dismissive blog post.
Don’t forget Gore. I used to think the Grammies and Oscars were a joke. The Nobel Prize committee makes “the academy” look like a MENSA convention.
The Razzies, on the other hand - pure gold.
Outside the dubious honors in Peace and Economics, Noble Prize winners are THE smartest people on the planet.
I think the problem lies with big banks loaning money that they dont even have to loan.Use to be banks loaned based on assets they had due to deposits.Now a lot of the loans are bought by freddie and fannie and where that funny money comes from is beyond me.The bank originates the loan and then sells it ti freddie or fannie and boom they have more money to lend.We all know how this is working because the govt had to print more money for freddie and fannie.The other problem is leverage.some how these banks can turn a dollar in savings into 40-50 to loan based on modern day gambleing.Wall street is the modern day casino in action with insurance on top of insurance…….
Unfettered securitization blew the whole thing sky high.
It was also a matter of absentee securitization. Why should Megabank, Inc care one lick about sinking the California economy, as long as bailouts continually make whole their managerial bonus pool?
The mechanisms & tools: 0% FED Rate…Wall St. MBS-O-Matic Slice & Dice…4% mortgage Interest…0% down…no income verification…blah,blah,blah
The last 20 years in Financial America,… illustrated by A 30 second video:
http://www.youtube.com/watch?v=EPrYulad8W4
“…30 second video:”
Is that the CEO of Gollum operating the Sledge-o-Matic?
Here is a YouTube video of some young Wall Street banksters in training…
“… that an increase in local governance of America’s banking system might result in better economic performance. I would love to hear from anyone who disagrees…”
Our credit union was once like that until about ten years ago when it was taken over by a greedy reincarnation of Evita Peron. Local governance means nothing when a mania takes control over people’s minds.
North Dakota is a farm state; the people who live in farm states think differently than those who live is cosmopolitan areas. I’ll probably get flamed over this remark (but what else is new?). If enough flames are ignited then I’ll try to defend my position; If not then I won’t.
“…The bank is governed by the ND Industrial Commission, consisting of the governor, attorney general and the commissioner of agriculture, all elected officials.”
Well, what’s the ol’ HBB saying: It’ll works until…it doesn’t.
x1 example:
The KingFish!
40th Governor of Louisiana
http://en.wikipedia.org/wiki/Huey_Long
California is a farm state. Are you saying that if it works in ND, it might also work here?
“California is a farm state.”
Most of the people who live in California do not live on farms nor do they have jobs that support those who do live on farms.
I have worked with one of Huey Long’s direct descendants.
This former co-worker is very capable and intelligent person. I would assume Huey had these traits as well.
I’ve always said each city should have their own bank / savings.
After 200 years of simple compounding interest, even LA would have an actual surplus of funds by now and could self finance whatever needs they had.
Nope, just more government and fatter retirements!
Tankxs Mr. Bear, interesting fellow & subject material…I like “auditing” your HBB econ 101 links!
Common-pool resource:
From Wikipedia, the free encyclopedia
(Redirected from Economic governance)
“A common pool resource is defined above by a set of characteristics, but a common property regime is an institution. The implicit idea is that certain resources may have a propensity to be governed by common property institutions.”
“Common property regimes typically function at a local level to prevent the overexploitation of a resource system from which fringe units can be extracted. There are no examples of common property regimes which solve problems of overuse on a larger scale, such as air pollution. In some cases, government regulations combined with tradable environmental allowances (TEAs) are used successfully to prevent excessive pollution, whereas in other cases — especially in the absence of a unique government being able to set limits and monitor economic activities — excessive use or pollution continue.”
“The transition of resource governance from open access to common property to regulated private property is less well understood.”
Monsanto / Shell / WellPoint / GoldenmanSucks / Daffy Duck:
“Consequences, Schmonsequences, as long as I’m/we’re rich.”
“The transition of resource governance from open access to common property to regulated private property is less well understood.”
What about the transformation into unregulated, globally dominant cartel (e.g. Megabank, Inc)? Do Ostrom’s and Williamson’s theories touch on that eventuality?
The next thing the bank will have to do is make loans to unqualified people.That’s what got us here in the first place (community reinvestment act. Barney Frank, Maxine Waters, Chris Dodd, Raines, Johnson) . Sorry I got carried away. I wonder what the median price of a solid home in Hanna, Wyo is???
“And it’s fashionable to pour scorn on wall street, but no one seems to note that WS owns the Fed!”
Not completely true. I have made comments to that effect for some time, calling for indictments for Bernanke, Paulson, and Geithner, with my usual END THE FED commentary.
But then, aside from a few Blogs, who cares what I have to say.
It certainly is not an opinion that will be printed in any “mainstream” media outlets.
The big banks have the FED TARP Funds in their pockets and they are a mess.
Large regional banks have had FED help but are still in trouble. IMHO, these are the puppies to watch. Some of these large regionals went as crazy as Wall Street.
The number 1 and 2 largest state banks in any area are very important as they and their names are a matter of any State’s financial confidence and that runs deep into community’s banking and credit unions functioning no matter how rotten they are.
It should be interesting how these financial disasters are propped up in the next 2-3 years…should they make it that far.
Risky CRE Lending Deadly for Banks
FDIC Audits Point to Risky CRE Lending; Congress Warns of Dangers to Banking System
By Mark Heschmeyer
February 17, 2010
The autopsy of 16 bank fatalities completed this year have identified commercial real estate lending as the primary killer in more than half (nine) of the cases, and an accomplice in one other.
In the seven cases in which CRE was not specified, the primary culprit for the bank failures was identified as lending for acquisition and construction of development projects.
When the FDIC’s Deposit Insurance Fund incurs a material loss at an insured depository institution, the FDIC Inspector General is required to make a written report identifying the causes of the loss. A material loss is defined as anything more than $25 million or 2% of an institution’s total assets.
In reviewing the 16 material loss reports completed this year on banks that all closed last spring and summer, it becomes clear just how much of a toll commercial real estate took on these financial institutions. The closing of those banks has resulted in losses so far for the FDIC of $2.34 billion. The 16 banks audited had total assets of $7.62 billion at the time they were shut down. They were based in states from coast to coast including: Washington, Wyoming, California, Nevada, Utah, Colorado, Texas, Illinois, Georgia and North Carolina.
Last year in total, 140 banks failed with total assets of $170 billion. While the total cost to the Deposit Insurance Fund has not been tallied, losses have been averaging about 30% of assets. That would calculate to losses for the fund of about $52 billion for last year.
“Federal Reserve examiners are reporting a sharp deterioration in the credit performance of loans in banks’ portfolios and loans in commercial mortgage-backed securities (CMBS),” Jon D. Greenlee, associate director, Division of Banking Supervision and Regulation for the Federal Reserve Board, told the Congressional Oversight Panel at a Field Hearing in January. “Of the approximately $3.5 trillion of outstanding debt associated with CRE, including loans for multifamily housing developments, about $1.7 trillion was held on the books of banks and thrifts, and an additional $900 billion represented collateral for CMBS, with other investors holding the remaining balance of $900 billion.”
“Of note, more than $500 billion of CRE loans will mature each year over the next few years,” Greenlee continued in his testimony. “In addition to losses caused by declining property cash flows and deteriorating conditions for construction loans, losses will also be boosted by the depreciating collateral value underlying those maturing loans. These losses will place continued pressure on banks’ earnings, especially those of smaller regional and community banks that have high concentrations of CRE loans.”
…
Wow PB…you catch a lot of stuff.
I thought I was just kinda howling at the moon with my regional -smaller bank thoughts.
“The Congressional Oversight Panel is deeply concerned that commercial loan losses could jeopardize the stability of many banks, particularly the nation‘s mid-size and smaller banks, and that as the damage spreads beyond individual banks that it will contribute to prolonged weakness throughout the economy,” the report concluded.”
Now, I getting scared of the dark !
“Now, I’m getting scared of the dark!”
BOO!!!
What is the rationale for SPG (simon Property) buying Genral Growth?
close down the competition?
I just don’t get it.
SPG is a favorite short seller target but it (and the CRE generallly) seems to defy gravity.
It was excessive and speculative CRE lending that destroyed the S&Ls.
“It was excessive and speculative CRE lending that destroyed the S&Ls.”
Oh yeah — I still have vivid memories of empty, newly-built commercial office space around St. Louis, MO, where I lived in the late 1980s, and this was merely a visual impression, as I did not follow the RE market at all back then.
In my town of Sacramento we have a bunch of local banks tht are going under. They seem to have been started by small groups of banksters who started a bank for their own schemes (often real estate - related.)
Money seems to corrupt; whether you’re mega- or mini- matters not.
No question the FED and Banks are evil and need to be taken out hard. By the way…. did anyone watch Elizabeth Warren on Bill Maher last nite? You should. If you don’t believe banksters and fraudsters are bleeding you dry, you will.
Anyways BJ….. In the absence of the Fed, can you imagine the disaster of the executive or legislative branch calling out monetary policy?
‘In the absence of the Fed, can you imagine the disaster of the executive or legislative branch calling out monetary policy’
Like I said above, if you think we’ve got to have a CB, why not ditch the current bankers? This is a private corporation that has overseen a 95% devaluation of the FR note. The owners are old money that probably haven’t even gone to a grocery store for themselves in generations. Have they even been elected to dog-catcher? And haven’t they proven themselves incapable of oversight of the financial system? I can’t see a downside for getting rid of the Federal Reserve, even if their function is valid.
In this modern age, can’t we find a better way to control money supply? We have plenty of bureaucratic functions that are done outside of direct control of congress and the white house. Some may argue that we don’t need the government doing this at all, but that is a seperate discussion.
” The owners are old money that probably haven’t even gone to a grocery store for themselves in generations. Have they even been elected to dog-catcher? And haven’t they proven themselves incapable of oversight of the financial system”
If the general public knew who the ‘owners” really were, they’d probably start a panic or at least start looking for torches and a map to the castle(s).
Unfortunately, it’s all tied in with states’ CAFRs as well.
“The owners are old money” it is obvious that they are Medoff’s cousins…
Thanks for the lead. Here ya go…
I hope Elizabeth Warren gets a Medal of Freedom Award or some such once this episode in financial history is visible through the lens of the rear view mirror.
Elizabeth Warren: It’s Bank Lobbyists vs. American Families In Fight For Financial Reform
First Posted: 02-20-10 01:30 AM | Updated: 02-20-10 01:56 AM
Warren seems some how surprised that the regulatory reform idea has lost momentum. I guess she never read former Harvard professor Galbraith’s book, A Short History of Financial Euphoria? He has at least a chapter devoted to the aftermath of manias, in which he discusses the phony effort by congress to figure out whodoneit and the related phony promises to reform the system so it ‘can never happen again.’ It all sums to a Grand Congressional Kabuki Dance to opiate the masses.
P.S. Couldn’t help but notice all the fire sale prices on finance books that Amazon tried to sell me:
Manias, Panics, and Crashes: A History of Financial Crises (Wiley Inv…
Buy new:
$21.95$14.2765 Used & new from $10.00
The Myth of the Free Market: The Role of the State in a Capitalist Ec…
Buy new:
$24.95$21.3331 Used & new from $6.69
Technical Analysis: The Complete Resource for Financial Market Techni…
Buy new:
$89.99$65.3445 Used & new from $63.01
A Short History of Financial Euphoria (Penguin business)
John Kenneth Galbraith
List Price: $14.00
Price: $10.08 & eligible for FREE Super Saver Shipping on orders over $25.
That interview is OTT awesome!
Maher: “I had most of my money in Lehman.”
Warren: “You did pick the one large financial institution which was not too big to fail.”
Maher made a nice analogy between the Olympic luger death and the economy, which he said is “still sliding down a sheet of ice.” He neglected to mention that Gollum’s steel support structure remains unprotected along side of the track, ready to crush more unsuspecting sliders who fly off.
What Warren seems to be missing: The people who paid to put her boss into office profit immensely from the status quo financial system (e.g., too-big-to-fail); why would they want to change anything?
Basic conclusion from this interview: This crisis is likely to prove a wasted opportunity, as nothing has changed and nothing is likely to change, thanks to the army of banking industry lobbyists who have taken up permanent residence on K Street.
The Federal Reserve! Neither federal, nor a reserve.
Well, I don’t know about you, but the green paper in my wallet does say “Federal Reserve Note” on it. So perhaps it is federal, after all.
Not sure about the “Reserve” bit, given the availability of the virtual electronic printing press technology…
According to Wiki: “All state and local government agencies are required to place their funds in the bank.”
Therin may lie the difference between success and failure.
Could the state-owned bank explain why North Dakota has survived the Great Recession relatively unscathed? Given that this is the only state-owned bank in the U.S., perhaps we ought to consider creating more of them, in order to see if local governance does not result in better economic performance than the current banking system, with its perpetual stream of Fed- and Megabank, Inc-sponsored financial crises and bailouts.
Bank of North Dakota
The Non Partisan League (NPL), born in 1915, united progressives, reformers, and radicals behind a platform that called for reforms to return control of North Dakota’s government and economy to the people. Taking leadership of the state in 1919, the NPL formed the Bank of North Dakota (BND). Today it is the only state-owned bank in the U.S.
The bank was originally formed to create additional competition in the credit industry while providing a local source of capital for state investment and development. At the time the nearest financial centers were based in Minneapolis and St. Paul, and farmers were unable to get long-term financing at reasonable rates. BND was formed to “encourage and promote agriculture, commerce and industry in North Dakota.”
The bank is governed by the ND Industrial Commission, consisting of the governor, attorney general and the commissioner of agriculture, all elected officials. The commission, in effect, serves as the bank’s board of directors; it was formed with three members so voters could more easily monitor and influence bank policy.
In contrast to most commercial banks, Bank of North Dakota is not a member of the Federal Depository Insurance Corporation (FDIC). North Dakota Century Code 6-09.10 provides that all deposits in the Bank of North Dakota are guaranteed by the state.
The primary deposit base of the BND is the State of North Dakota. All state funds and funds of state institutions are deposited with the bank as required by law. Other deposits are accepted from any source- savings and checking accounts from private sources account for between 10 percent and 20 percent of the bank’s deposit base. Use of the banks’ earnings are at the discretion of the state legislature. As an agent of the state it can make subsidized loans to spur development; however, its profits and losses affect state tax burdens.
…
Use of the bank’s earnings are at the discretion of the state legislature. As an agent of the state it can make subsidized loans to spur development; however, it’s profits and losses affect state tax burdens.”
The bank is structured much like a co-op.
When I lived in No Dak the Bank of ND was a bank for bankers. A private person could not have (at least not easily) an account with the Bank. They did not have any branch offices. Maybe that has changed now.
State owned banks? Is that what anti-FED people are promoting? The politicians are going to control the money?
Trust politicians more than the private sector when it comes to handling the money.. hmm..
Should we take it as a warning when the MSM gloms onto an idea?
perhaps we ought to consider creating more of them, in order to see if local governance does not result in better economic performance than the current banking system..
ND may have the USA’s only one, and it may be looking good under today’s peculiar and unusual circumstances, but state owned banks have existed ALL OVER the world throughout modern history.
State ownership of the banks has a lot of history and statistics behind it. ND (with a population less than US post office employees) is hardly representative of what happens to countries run by state owned banks.
Lets trade places with a country wherein the State owns and politicians run the banks… all we need do is pick one. I’ll suggest Afghanistan?
‘State owned banks? Is that what anti-FED people are promoting’
Nice straw man, but I suggest you let people that have alternatives to secretive-billionaire-owned central banks put forward their ideas.
‘a country wherein the State owns and politicians run the banks… I’ll suggest Afghanistan’
I’d bet the first thing the US did after invading was to set up a central bank. But this brings up an interesting fact; a couple of years back I saw a list of the handful of countries that don’t have a CB. Every country on that list had been declared a terrorist state by the US.
It may be perfectly consistent that countries without a central bank tend to be economically troubled and are troublesome members of the civilized world..
I wish this entire paper was available, but all that’s here is the synopsis.
National Bureau of Economic Research
Rafael La Porta, Florencio Lopezde-Silanes, Andrei Shleifer
NBER Working Paper No. 7620
Issued in March 2000
In this paper, we investigate a neglected aspect of financial systems of many countries around the world: government ownership of banks. We assemble data which establish four findings. First, government ownership of banks is large and pervasive around the world. Second, such ownership is particularly significant in countries with low levels of per capita income, underdeveloped financial systems, interventionist and inefficient governments, and poor protection of property rights. Third, government ownership of banks is associated with slower subsequent financial development. Finally, government ownership of banks is associated with lower subsequent growth of per capita income, and in particular with lower growth of productivity rather than slower factor accumulation. This evidence is inconsistent with the optimistic development’ theories of government ownership of banks common in the 1960s, but supports the more recent political’ theories of the effects of government ownership of firms.
$5 for the complete report.. PDF..
http://www.nber.org/papers/w7620
“I’ll suggest Afghanistan?”
I suggest we export some of our top Wall Street bankers to Afghanistan, so they can do for the Taliban what they did to the U.S. economy.
Regardless of the scale of these boilerhouse fraud operations, when our gubbermint allowed anyone in FIRE with a holding company, an Llc, a phone and a cheap computer in mom’s basement to become or function like a freakin’ old fashioned brick n’ mortar banker, we slit our own darned throats.
The crooks were just waiting in the wings while their lobbyists worked writing legislation.
This wasn’t a matter of out-dated regs or safeguards, a necessary progression in lending or banking or even silly change for the sake of silly change.
This was a premeditated open season and a universal license to rape, loot and plunder the US and world economies, no more and no less.
mikey pauses and adjusts his rearview mirror…
“This was a premeditated open season and a universal license to rape, loot and plunder the US and world economies, no more and no less.”
And it made Megabank, Inc richer than Croesus during the happy times. Moreover, they were made whole by bailouts during the bust. So it was pretty much all good for Megabank, Inc, no?
Trust politicians more than the private sector when it comes to handling the money.. The politicians are going to control the money?
Excuse me, where have you been the past 2 years? The banking system FAILED. It’s BK. We are bailing them out remember? Why do you get really defensive whenever potential regulation or competition comes Bank’s way? They failed themselves, their shareholders and America and they’re taking us down with them.
And no one is suggesting all state owned banks, they are only pointing out other options that did not FAIL us. What’s the big deal?
And we don’t have to look towards Afghanistan to find a partially state owned bank better run than Citi or B of A.
Let’s look at Banco do Brasil.
Banco do Brasil founded 1808. It is one of the most profitable banks in Brazil. (It) is a publicly, government controlled bank.
internationalbusiness.wikia
The highly regulated Brazilian Banks are now being looked at as models of the way banks should be run. And they avoided all the bad loans, fraud and corruption that the US banks that you defend were involved in too.
Brazil’s tight bank rules a blessing in disguise Reuters 9/10/09
Brazil’s stringent banking sector rules, once seen as burdensome, are suddenly being viewed as admirable as the Group of 20 nations look to fortify financial institutions against future crises.
“Brazil’s system, which braved the crisis without the major bankruptcies and bank nationalizations that have reshaped capitalism in the rich world, is likely to be seen as a promising model by the group of developed and emerging powers.”
“Brazil today can serve as an example of bank regulation.”
Brazil’s stringent banking sector rules, once seen as burdensome, are suddenly being viewed as admirable”
“Now is the moment for these more developed markets that thought themselves slightly immune to this type of crisis to have some humility and adopt the parameters that Brazil adopted.”
http://www.reuters.com/article/idUSTRE58965M20090910
Brazil is not moving towards State owned banking, nor is it exactly an economic paradise.
Per capita income is less than in Mexico by any measure (World Bank, IMF, and CIA World Factbook).
There was serious hyperinflation for a while.. Brazil required a (record) $30 Billion loan from the IMF in 2002.
——-
Actually, movement towards more PRIVATE banking and towards bank mergers (the formation of larger, more powerful banks) is attributed with the many claimed recent improvements in Brazil’s economy.
This page is a pretty good primer on Brazil’s banking situation.
Welcome Reversal: Brazil’s Banks Are Strengthening Its Economy Despite the Downturn
http://www.wharton.universia.net/index.cfm?fa=viewArticle&id=1700&language=english
Brazil is not moving towards State owned banking, nor is it exactly an economic paradise.
True and True.
However Brazilian banks are regulated much more than American banks that is why we see quotes like this in Reuters.
“Brazil today can serve as an example of bank regulation.”
Brazil’s stringent banking sector rules, once seen as burdensome, are suddenly being viewed as admirable”
And Brazil did not have a housing finance bubble, and they have added 35 million people to their middle class. It ain’t perfect here for sure but progress is being made.
It does not make me happy as an American to see Brazil do some things right that America is doing wrong either but I can see some.
And I had read that Wharton article on Brazil banks before you posted it.
One of its quotes I found interesting in regards to the initial post about the bank of ND.
“We saw that it is important during a time of financial crisis such as this one, to have public banks that are strong and important.”
And you need to argue without straw men Joey. All things are not all black and white, with me or against me.
i was in Punte del Este last weekend..and the place was packed
with well to do brazilians..i mean there were 4 cruise ships of 900 each parked in the bay..
these are everyday brazilians..they werent here 2 years ago..blowing 60$us on 2hr sailcruises..and laying down 40$us for lunch..
i was in Sao Pauolo 5 yrs ago..and the papers tell it like it is..usa is under a foreign control..and has been for a longtime..
“Is that what anti-FED people are promoting?”
Could you fill us in on what the Fed PR staff are promoting? Is it all about creating straw man distortions of any suggestion that dares to question the unbridled hegemony of the Great and Powerful Fed?
There’s a reason why bad economic times provide the most fertile ground for government invasion and destruction of private enterprise.
It’s because a suffering people will momentarily devalue their hard won, precious few liberties and grasp for any immediate remedy to the pain.
The government is always anxious to step in and “fix” our problems for us… they need no encouragement. And every time we allow it, we increase their power over us.
Can’t we put just a little effort into resisting the “government solution”?
‘Can’t we put just a little effort into resisting the “government solution”?’
Does your world view put the Fed as some how separate from the government?
It’s because a suffering people will momentarily devalue their hard won, precious few liberties and grasp for any immediate remedy to the pain.
What? huh?
What the heck do fraudulent, out of control, corrupt, greedy, mismanaged, taxpayer bailed out, monopolistic, predatory banks have to do with my “precious few liberties”?
It seems to me that these corrupt, proven to be incompetent banking institutions have been a detriment to our liberty lately.
So to review a couple things you’re against lately Joey.
1. Regulating the failed banking system that helped ruin America.
2. Any movement to unseat incumbent politicians.
Hmmmmmmm
So the choice is between Wall St. or the federal government?
Are you serious? Really?
Recent events much?
Rio,
Your minority view doesn’t appeal to the rest of us..
We do not think America is ruined. In fact, we’re very proud of where we stand in the world, and have high hopes for the future.
We do not agree that the banking system is so corrupt it needs to be thrown out. We do not pray for the day the banks fail. Whatever connections exist between our government and big finance / big business are known, acknowledged and approved of by most of us.
We do not think Wall Street (which holds our investments and retirement funds) making huge profits is a bad thing. Having put our own money at risk, we have a huge, personal interest in the continued success of corporations, big and small while you, evidently, have nothing at stake..
We don’t care about CEO bonuses. We investors are the owners of those companies, and we are the ones that pay big bonuses. Our reasons for doing so are not your concern. Outsiders should mind their own business. Insiders can sell their stock (or buy enough to have a say in the matter) if they disapprove of how some corporation is run.
We do not think that because YOU are not getting what YOU want from government, all incumbents should be thrown out of office. Be it by vote or by campaign contribution, we put successful pressure on our representatives and, from our point of view, they do as they are told.
People who want to trash the system and start over are a distinct minority. If they were a majority, that majority would make changes happen. The lack of change proves where things stand.
Power to the people.
Rio,
Your minority view doesn’t appeal to the rest of us..
Who is “the rest of us” and what makes you so sure Rio is the minority?
..seems pretty obvious to me, Carl..
Rio promotes the idea that some kind of grass roots effort has a realistic chance of removing all the incumbent politicians. If Rio were in the majority, what explains the fact that incumbents are practically guaranteed to be reelected? Who’s voting for those guys if not the majority?
Shall we blame it on the myriad of special interest groups, as if these groups represented some minority?
Who among us is NOT represented by an active special interest group which applies pressure to our govt and other PTB?
Pick an issue. Pick an opinion. Congratulations! There’s an online organization that agrees with you.
http://usgovinfo.about.com/blorgs.htm
—–
That the large majority of us are invested in stocks and bonds is a simple fact and, as investors, we do not want to see businesses fail, much less see the stock market crash.
Only 8% of households do not have bank accounts. Do you imagine the remaining 92% majority does NOT trust the banking system as it exists?
—
But no.. forget all that. We don’t really approve of the way things are. Since it pains our egos to be in the minority, lets just blame it all on some conspiracy. We are only puppets.. victims. Nothing is our fault nor our responsibility.
Wow, Joey.
Have to disagree with your assumption that Rio is in the minority here.
You don’t seriously believe that the private banks have done a better job than well-run state banks, do you?
BTW, it looks to me like the Fed’s PR staffers are failing miserably in their efforts to quell populist demand for substantial financial system reform. If OBWan doesn’t deliver, I expect the next election cycle to serve up a candidate who will.
I’m watching closely to see which candidates refelct populist anger against wall streeet and the banksters.
Very litle so far from the democrats (mayebe Howard Dean has, but I haven’t heard it very much)
The lady wrestler vying for the Republican senate nomination here in CT had it prominently mentioned inher campaign material that there would be no more bailouts.
The next sell off and ensuing pleas for more bailouts might give us a lithmus test of who stands where.
We are already close enough to the election that I bet there are lots of incumbants who would not vote for a bailout just to prove they’re not on wall street’s payroll. (Of course, the MSM will probably be able to paint the pro-bailout people as heroes.)
DOW 6,000 here we come!
The problem is that candidates can say anything they want. IMHO, Obama won largely because of his populist stance during the campaign. He has done a 180, and I think many of us are exceedingly disappointed with his treatment of the banks and the people who run them.
He was supposed to clamp down on the banks and put money into developing infrastructure, technology, healthcare innovations, etc.
He lied. No other way to put it.
Your minority view doesn’t appeal to the rest of us..
You’re in the minority Joey.
Most Americans disapprove of Congress and most Americans want greater banking regulation.
Are you a paid straw-man producing shill for the Banks?
I think your employer is scared.
Upstate SC developer Jim Anthony was at Tiger Wood’s side yesterday supporting him and hoping for the best . You see , Tiger is involved with him building a gulf oriented money trap called Carolina Place . It’s in trouble , as are all of Anthony’s high $$$$$$ projects . He specilizes in getting Rich Yankees to build huge houses at ”Cliff” projects . You’ve seen all the glitzy ads . I just hope all his customers keep back enough money for a one way bus ticket back to Ohio .
Tiger Woods is one of the biggest money whores I have ever seen. Give him twelve dollars and a dirty text message and he will slap his name on any damn thing. Of course, after plastering his face across the planet, he whines about wanting his privacy. This guy is as phony as Bill Clinton, Obama, Larry Craig and all of the other closeted Republicans that preach about the evils of homosexuality.
We are not fighting a battle of finance, class or power in the U.S. We are fighting a battle over substance. We used to prize integrity, competence and goodness, now the common schmuck just loves “attitude” and shallow rhetoric. It has become a shallow country that gets wet over a Karaoke contest called American Idol and falls head over heels for some clown promising “hope and change”.
Skepticism of all of the people trying to form public opinion, including phonies like Tiger, needs to be the order of the day. I have all but given up on watching pro sports. I would much rather read a blog than watch some juvenile delinquents dunk a ball then grab their breast, chest bump each other or make some gang signal. A return to substance starts with us all. I think Ben is doing a good job of providing a forum where substance is not only in vogue but bulls–t is completely out of fashion. Thanks, Ben. I think I will write you a check right now. You’ve earned it.
http://www.telegraph.co.uk/sport/golf/tigerwoods/7278265/Tiger-Woods-former-porn-star-breaks-down-in-tears-following-public-apology.html
And they say porn stars can’t act….
I did think this was very funny. The article states that she “gave up the porn business” at his request as an example of the “sacrifices” she made for him. In viewing the picture, I can see that she has an enviable figure based on the pulchitrude she displays in the shot. I think that she’s still eminently qualified to re-enter the porn business when she comes out of hiding and will probably be welcomed back with “open arms” ( and legs ). Why does an ex-mistress/porn star need an attorney ? He didn’t promise her anything such as marriage….
This whore sleeps with a married man and then expects him to “apologize” to her because she “thought they would spend a lifetime together”? You’ve got to be kidding me!
“Tiger Woods is one of the biggest money whores I have ever seen.”
Technically speaking, isn’t he more of a john than a whore?
Tiger is both. He prostitutes his name for money, and he’s a john in the more traditional sense.
However, I have to give some credit to Tiger for surfacing, saying his piece, and then disappearing again. Thank you Tiger. Stay out of the headlines, go “heal,” come play some golf when you’re ready.
I wasn’t sure if I was using the term john appropriately, as I know it can refer to a toilet, so I looked it up.
Not that I disagree with you at all, but the course you suggest can be a lonely one. The default setting for humans is to run the hegemonic social paradigm into the ground before they’ll start over. The good news is that overriding that default is entirely possible, but not at all easy. Yes, most certainly this forum is an invaluable part of that struggle.
Much of my own cynicism sprouts from the fact that we are constantly be told that our leaders are the best and brightest, but at the same time these leaders seem moribound by yesterday’s ideas and yesterday’s realities. As this crisis evolved they sought not to adapt and innovate, but to merely react.
The only certainty is that human existence is not static. Human needs may be, but not societies, nations, or economies. To impress me one of these “leaders” would have to confront the people with the truth - that better days do lie ahead, but that between them and us will be a prolonged period of struggle.
Such a person would never be elected to office, so you’re entirely right in implying that we shouldn’t even look to such people for answers. The fresh answers we need will be found in real people.
“Much of my own cynicism sprouts from…”:
Indemnified Corporations & “TrueBeliever’s™ / TrueDeceiver’s™ / TrueHypocrite™”
“Skepticism of all of the people trying to form public opinion…”
Hear hear! Long live skepticism! Short live naked emperors!
“We used to prize integrity, competence and goodness”
Check out Shirō Ishii on wikipedia, and see how much goodness we value.
“…I have all but given up on watching pro sports. I would much rather read a blog than watch some juvenile delinquents dunk a ball then grab their breast, chest bump each other or make some gang signal.”
Ha, to think that Jerry West & Oscar Robinson where my “teachers” for on court behavior:
West: 22 footer…Swiiiiish: “Take That!”
Big O: 30 foot cross court pass for an easy layup:”Right back at ya”
West: 19 foot turn around jumper: “eh, so you wanna get tough do ya!”
Big O: drives the lane cross handed dribble 10 foot finger roll: “ya mean like that!… you oughta get a tattoo Jerry, it might you LOOK tough!
West: 18 foot pull up jumper with 2 seconds: “There’s a tattoo for ya…”
Besides, the music selection & VOLUME at my last appearance for a NBA game made certain that Mr Stern’s Institution/Industry will not see any of Hwy’s cash for quite some time…I just have 64/32/16/8/4/2/1 to look forward to.
“I would much rather read a blog than watch some juvenile delinquents dunk a ball then grab their breast, chest bump each other or make some gang signal.”
Would you prefer some major league baseball tobacco chaw and crotch grab action?
(Sure wish Oly were around to comment on this subject…)
(Sure wish Oly were around to comment on this subject…)
…something about recognizing players by their below waist vertical cracks before your eyes get high enough to read the names on their jersey’s.
I gave that up many years ago when I couldn’t afford to go to a Mets or Yankee game.
I have all but given up on watching pro sports
I had a rather enjoyable conversation recently with a guy from the SD Padres sales office. I asked him how the Padres organization thought they could maximize profits by pricing their tickets so the stadium is 80 percent empty. I forgot to ask him what happened to all the home builder and mortgage lender billboards that I used to see around PetCo park back around 2005.
What is the cost of filling an empty seat at the ball park, anyway? Thanks to the baseball owners of Generation Greed, we have a whole generation of kids who are growing up deprived of watching America’s past time live. The absense of tomorrow’s baseball audience is the price of filling the hungry bellies of today’s greed pig owners.
Not much, probably, considering that confiscated taxpayer money builds most facilities these days.
I’ve always enjoyed baseball, but I pretty much quit going to games because of the prohibitive prices (not only tickets but food, etc.). Once in a great while, I’ll go to a game as part of a family affair or something along those lines. I do wonder though: who are all of the people paying those exorbitant prices? Has the population in this country grown enough to where these places can fill up with people, like me, attending once ever several years?
He’s great for distracting people from John Stack though.
Yeah and…
” mikey doesn’t golf!”
“INCOMING!”
It’s actually called The Cliffs at High Carolina. It is one of maybe eight properties Jim Anthony has developed in the upstate of SC and the mountains of NC. It’s my understanding he has also developed “Cliffs” properties outside the U.S. He buys relatively cheap hilly land (not suitable for much more than logging) in the boonies, subdivides it, and puts in the roads and utilities plus a beautiful golf course with a very upscale clubhouse. He then offers the lots. Waterfront lots on a lake may go for a million bucks; non-waterfront lots might be offered starting at $200K.
The concept was interesting, and profitable during the late Gilded Age. Buy property at one Cliffs community and you have access to the golf and other amenities at all the other communities.
The only thing is, most owners are only part-time or even just long weekend residents, so there’s really no “community.” Furthermore, most of the communities have sold fewer than half the lots, and lot purchases have dwindled to just a trickle. Resales of existing houses in those communities can sit for years. Who wants to buy someone else’s dream home when they can build the home of their own dreams?
I see foreclosure notices for properties in Cliffs communities almost weekly. I also hear that the developer is seeking hard money loans, I guess because he’s tapped out his other credit lines. I predict the banks will soon own these communities.
“…He buys relatively cheap hilly land (not suitable for much more than logging) in the boonies, subdivides it, and puts in the roads and utilities plus a beautiful golf course with a very upscale clubhouse. He then offers the lots. Waterfront lots on a lake may go for a million bucks”
Jim Anthony seems to go to a lot of trouble to make monies…
“pucker lips” sTrump Chapter 38: “Be good at only one thing: selling your name…it’s worth millions!… books/tapes/video’s are gravy money”
This Ohio boy just canceled his second last credit card; down to one now. Refused to submit to the new service charge (no sixty dollars for you, Citibank!) they tried to foist on me. Didnt even have the courtesy to let me speak to an American to do it; foreign operator had the gall to end the conversation with the statement “…thank you for your (business) and we look forward to continue doing (business) with you…”. Sorry lady, your 90 buck a month salary is going to have to come out of the pocket of someone else. Now, if I could only get rid of the last one. I’ll have to work on it.
Good for you, Carlos.
Hey team hbb.. I’m looking to drive my Harley
to DC from Wisconsin for the memorial day
rolling thunder for Vietnam vets… The catch is I want
to ferry as much of the great lakes.. Does anybody
know the east side of Michigan ferry system.. I’d like to get to
new York and then to Dc…
If i remember correctly, there is a ferry at manitowoc. Check the cities of Two Rivers, Manitowoc and Kewaunee. The city sites should have travel info on them. Going to Sturgis?
Yes - there is. It runs from Manitowac over to Ludington, Michigan. Three years ago, it was $90 a person to make the trip. You can also ferry your car across.
A ferry out of Milwaukee goes over to Michigan, too.
But, this is the west side of Michigan. I’ve no idea about the east side - perhaps a ferry out of Alpena? Seems right to me….
Once the rally is done, make sure to get to Wolftrap for the Memorial Day concert. Way better than the one by the steps at the Capitol - the one that gets on TV. Concert is by the Marine Corps band and USAA sponsors the fireworks. The piccolo obligato from Stars and Stripes Forever was the best I’ve ever heard.
Thanks… Will add that to the plans… Nobody has much on the east side.. Dang was hoping to float onE way and drive back…
we are going to the army band concert at Strathmore tomorrow.
There are no ferries on the east side of the Great Lakes. You can cross at either the Blue Water Bridge in Port Huron, or in Detroit at the Detroit/Windsor Tunnel or the Ambassador Bridge. All three are cool.
Is anyone in the market for a modest, lightly used Charlotte, NC mansion?
Here is yet another story about a guy who made the mistake of buying a new home before selling the old one…
The Wall Street Journal
Deal Journal
An up-to-the-minute take on deals and deal makers.
* London Coroner Investigates Deutsche Bank Stock Broker’s Death
* Is Pali Capital the Canary in the Coal Mine of Boutiques?
* February 16, 2010, 3:00 PM ET
Ken Lewis Puts His Charlotte Home Up for Sale: View Photo Gallery
By Dan Fitzpatrick
Former Bank of America CEO Kenneth Lewis is putting a four-bedroom, four–and-a-half-bath Charlotte, N.C. home up for sale, asking $4.5 million. But the longtime banker isn’t leaving the midsize Southern city that has defined him for the past four decades, according to his lawyer James Wyatt.
Instead Mr. Lewis and his wife purchased another house elsewhere in Charlotte, Mr. Wyatt said, and are in the process of moving to the new place.
…
There’s no indoor pool or sauna for my French Maid…So I pass.
You could check with Church of England.
I was thinking maybe the Pope would be interested in a nice summer vacation home around Charlotte…
Could you get a loan of this amount with a federal government guarantee? (This is from the UHS web site’s mortgage calculator…)
Loan amount: $4,500,000
Num payments: 180
Annual Rate: 5%
Monthly Rate: 0.417%
Monthly Payment: $35,585.71
Total Paid: $6,405,428.38
Total Interest: $1,905,428.38
For more information: www dot morrocroftmtg dot com
Noteworthy aspect of the above financing arrangement: With a 15-year loan, interest as a share of total payments is only
($1,905,428.38/$6,405,428.38)*100 = 29.7%, versus closer to 50% of total payments on a 30-year loan. 15 years is the way to go if your bonus payments are large enough to support the shorter repayment period.
I’m up for it. We’re flying down tomorrow morning in our private jet with our butler in tow to make sure that he likes it before we put in an offer of $ 4,250,000. We’re trying to save a little money on the purchase.
Anyone know if Dan marino ever sold that “beautiful”home in weston FL?
If he already sold it, this must be one of the most carefully guarded secrets on the World Wide Web.
Dan Marino’s House For Sale. Includes Free Autographed Football
by Jon Azpiri | June 9, 2009 at 09:55 am
1557 views | 2 Recommendations | 0 comments
Dan Marino is offering you a one-time deal: if you act now, he will sell you his 19,500 square-foot mansion, throw in $1.5 million of furniture, and an autographed football. All for the low price of $13.5 million.
The NFL legend has been trying for mansion for three years (SIC
). The Dan Marino house originally listed at $15.9 million, but has since lowered it by more than $2 million (SIC — Realtors™ are Retards..
Marino purchased the property in 1994 for $370,000. The house features 10 bedrooms, 12 bathrooms, a pool, spa, putting green, two guest houses and 5,000 bottle wine cellar.
Those with $13.5 million kicking out around can check out Dan Marino’s house listing.
Weston.
Exactly not the place I would be looking to spend a lot of money to live. There are great homes out there, but, the land under the homes is worth about 0 dollars. It’s in the Everglades, and there’s limitless land in pretty much every direction. I can understand the appeal of moving way out west, but, part of the lure is the promise of very, very low home/land prices.
No way in he** I’d spend a bunch of money to move way out there; if it’s that nice and that expensive, I’d much rather be waterfront on Los Olas, or Star Island, or Palm Beach.. Or pretty much anywhere closer to the water.
Weston is for people to have big houses at low prices. Not for the rich and famous.
To be honest, I like the $ 4,500,000 mansion way better. It’s in better taste. Dan Marino’s house has an amazing number of gold and bronze-colored curtains with fringes on them. I’m very impressed ( well, make that alarmed ) wtih all of that cloth hanging around in there. What if there was a fire ? It’s hideous.
He said he would throw in a signed football for the new owner…..
Hey Dan, how about a super bowl ring?
oh that’s right…..he doesn’t have one
Stucco, I would rather have a white hot poker shoved up my, well, anyway, let me tell you a story. I don’t know if I have already shared this wonderful tale with the HBB. Hey, the Boy isn’t getting any younger, just sexier.
I used to live a couple zip codes over from that monstrosity in that picture. I was a member of the McMansion club. I was not a happy member. I made it less than two years before suburbia and owning a McMansion, and I didn’t even get fries with it, nearly drove me to drink. I can’t imagine what my liver would be like if I hadn’t gotten out of that place.
In the spring of 2005 I became the City Boy. It wasn’t until the summer of that same year that we unloaded our little vinyl slice of hades for $305,000. What do they say about boat owners? I haven’t ever owned a boat but I can understand.
The people that bought it from us did some upgrades. Of course the perfectly good counter-tops had to be ripped out and replaced with some ugly granite. The waste of this mania is epic. The robotic movements of our fellow citizens, I mean consumers, has been appalling. They put a screen on the deck. They did some other things. They then sat back and watched NC real estate rise rapidly in 2005 - 2007. I believe at one point our old coffin could have gone for $380,000 or so.
Then came along 2008. The shattering of the “it’s different here” illusion took place. Charlotte is a banking center, with BofA being the center of their solar system. Did anything bad happen to the banks? Oh, yeah, that’s right. The amount of new developments with huge houses in South Charlotte is almost mind boggling. They paved paradise and turned it into a suburban hell. The developers own that town. Our beloved friend Gayle would have been mad as a wild dog seeing what was going on.
Our old boat anchor went on the market in late 2008. If it had been priced at $350,000 a quick sale would have ensued. Instead they listed it at $370,000. Hey, they weren’t going to give it away. This house then became a classic example of the games played in real estate. These drones chased the market down, lowering the price, but never enough to get it sold. The price dropped to 360 and then 350. Of course it was then taken off the market to “freshen” the listing. It went back on at 360. WTF? Slowly the price got lowered to $339,000. At that price it disappeared from the MLS listings, not to return.
Good for them. They finally unloaded the mess. WRONG! I googled our old vinyl mausoleum and saw that they were trying to rent it out. I believe they were looking for about $2,000 per month. By the old 120 rule that would make the house worth $240k but never mind that. I don’t know if they rented it out or not. I do know that another neighbor, the guy that gives rednecks a bad name, had their house on the market for over 400 days. Their $340,000 asking price (on a house they probably bought in late ‘02 for $230,000) finally settled at $289,000. That house was smaller than ours but still not good for the dreamers that bought from us.
Two weeks ago the news got even worse for these delirious “homeowners”. The house across the street from us showed up on the MLS. That tomb was the same model as our tomb. But they had a better lot, more upgrades and had the $11,000 brick front (don’t get me started on brick fronts). The house sold for $377,000 in 2007. It is now in foreclosure. The asking price is $315,500.
KABOOM! I believe the sound I just heard was reality blowing up in the face of the dreamers that weren’t going to “give away” the giant vinyl and sheetrock box they bought from us. As I have said many times I am a founding member of the I Don’t Care to Ever Buy Again Club. I believe we may have a large branch chapter sprouting up in the south suburbs of Charlotte, NC. It will only get worse. At least it turned out okay for The Boy.
“Stucco, I would rather have a white hot poker shoved up my,…”
Ask me no more questions, I’ll tell no more lies…
“I am a founding member of the I Don’t Care to Ever Buy Again Club.”
To big of an “Association” for Hwy…I like small simple “organizations”…I’m still a card carrying member in this AAA club: “Acreage in America Association”
“The amount of new developments with huge houses in South Charlotte is almost mind boggling. They paved paradise and turned it into a suburban hell. The developers own that town. Our beloved friend Gayle would have been mad as a wild dog seeing what was going on.”
Thank you for that post. I am sure Gayle is smiling on it from wherever she watches. Substitute ‘North County San Diego’ for ‘South Charlotte’ and you have a similar story about development run amok.
I believe that seldom a day goes by here that someone doesn’t fondly think of her and her famous Utarr and Washington home spun stories…I sure do.
What do they say about boat owners?
The word boat is actually an acronym for ” Bust Out Another Thousand.” This is common knowlege amongst real boaters. Just ask them.
i learn more here than i did in school.
“That tomb was the same model as our tomb. But they had a better lot, more upgrades and had the $11,000 brick front (don’t get me started on brick fronts). The house sold for $377,000 in 2007. It is now in foreclosure. The asking price is $315,500.”
Now they’ve done it! Gone and screwed up the comps…
I was thinking about this clean, 1 owner home
http://www.cnn.com/video/#/video/us/2010/02/19/bulldoze.foreclosed.home.wlwt?hpt=T2
He showed the bank whose boss!!!
Acreage: 1.27
Siding: Hard Stucco
Parking: 3 Car Garage
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
If he’d never missed a payment on it and was current on his mortgage, I can’t say as I blame him. I wouldn’t have done it myself, but I wouldn’t let the bank have it, I don’t think.
Over a $ Million per bedroom??
We have had 20 bank failures so far over the course of seven FDIC Fridays in 2010. Given there are 52 weeks in a year, we are on track for a grand total of around (52/7)*20 = 148.571429 bank failures by year end, assuming the recent pace is reasonably representative of what lies ahead.
However, one should also worry about the potential for explosive acceleration in the rate of bank failures:
Year / Number of Bank Failures since Onset of Crisis (August 2007)
2007 3
2008 25
2009 140
2010 148.571429*
*Extrapolated assuming rate of bank failure for first seven weeks of 2010 continues through end of year
Business Briefing | Legal
Federal Regulators Close Four More Banks
By REUTERS
Published: February 19, 2010
Federal regulators seized four more banks Friday, bringing the total for the year to 20. The Federal Deposit Insurance Corporation said that regulators had closed the George Washington Savings Bank in Illinois; La Jolla Bank in California; La Coste National Bank in Texas; and Marco Community Bank of Marco Island, Fla. La Jolla Bank’s deposits are being assumed by OneWest Bank, FSB. George Washington Savings Bank’s deposits will be assumed by FirstMerit Bank National Association in Ohio. La Coste National Bank, which had one branch, will reopen as part of Community National Bank in Texas. Marco Community Bank will reopen as a Mutual of Omaha Bank.
…
Dump-and-pump…
Investment Banking
The Great Goldman Sachs Fire Sale of 2008
February 19, 2010, 3:46 am
From William D. Cohan at Opinionator:
When President Obama said that he “like most of the American people, don’t begrudge people success or wealth,” he was of course simply repeating a bedrock principle of American capitalism that even the worst financial crisis since the Great Depression cannot dislodge.
But one wonders if the president would be a bit more begrudging if he knew that at the height of the financial crisis, many of Goldman Sachs’s top deal-makers — although not Blankfein himself — moved quickly to unload their own stock in their firm. This happened both in March 2008, after Bear Stearns collapsed, and again that September, after the bankruptcy of Lehman Brothers and the near-unwinding of the rest of Wall Street.
If everything was really under control after Lehman collapsed, why were executives dumping their stock by the bushelfull?
…
“…— moved quickly to unload their own stock in their firm.”
Cut-and-run finance
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/7272803/Church-of-England-defends-disastrous-40m-Manhattan-property-deal.html
The Church of England is defending its disastrous 40 million GBP (about $65 million U.S. dollars) “investment” in Manhattan’s Stuyvestant Town apartment complex. Now I’m no Bible scholar, but I do recall some long-ago Sunday School lessons that focused on a parable about “building your house on solid ground.” If leaders of these organized denominations were truly guided by the philosophy of “What Would Jesus Do?” instead of “What Would Donald Do?”, they might be more focused on humility and service in this life, and reaping their reward in the next. You know, like what they’ve been telling their aptly-named flock to do for hundreds of years.
“building your house on solid ground.”
The foolish man builds his house upon the sand…
Tishman Speyer purchased Struyvestant town with no money down, they sold all of their debt to GSEs, pensions and apparently the curch. They likely grossly overpaid even at the time of the purchase. I’ve seen artcles that suggsest the investment has lost over 50% which I believe is much more than NY real estate in general. It was a really sweet deal for MET LIFEwho sold to Tischman speyer at the peak for an overinflated price. It was a sweet deal for Blackrock who got to collect fees for sellling the debt, and it was a great deal for Tishman Speyer who got to collect management fees for a few years and got a sweetheart deal from MET LIFE on another property prior to the Struyvestant town purchase. They purchased the Met Life building for 50% of the sq foot cost of other buildings sold at the time.
The Church of England is defending its disastrous 40 million GBP (about $65 million U.S. dollars) “investment” in Manhattan’s Stuyvestant Town apartment complex.
…
Now I’m no Bible scholar, but I do recall some long-ago Sunday School lessons that focused on a parable about “building your house on solid ground.”
Same here, yes, and also something about not laying up for yourselves treasures upon earth…
Just days after becoming controller of financially strapped Harrisburg, Pa., in January, Daniel Miller began uttering an obscure term that baffled most people who had never heard it and chilled those who had: Chapter 9.
The seldom-used part of U.S. bankruptcy law gives municipalities protection from creditors while developing a plan to pay off debts. Created in the wake of the Great Depression, Chapter 9 is widely considered a last resort and filings under it are more taboo than other parts of bankruptcy code because of the resulting uncertainty for everyone from municipal employees to bondholders
More money going pooof
“More money going pooof.”
Deflationist!
Why can’t the Fed just print a little bit more to make up for the ‘Poof’ factor?
‘Cause a little more won’t do it.
Fine — so why can’t the Fed print just enough (whatever that is) to sterilize the ‘Poof’ factor?
You’re talking about replacing many, many trillions of dollars that have already gone poof, and many more trillions on their way to poofville. You’re talking hyperinflation.
There is nothing that the Fed can do to prevent the collapse of the largest credit expansion in history.
“trillions of dollars that have already gone poof, and many more trillions on their way to poofville”
Poofalicious
Pooftastic
Pooferrific
“You’re talking about replacing many, many trillions of dollars that have already gone poof, and many more trillions on their way to poofville. You’re talking hyperinflation.”
Not really. I honestly don’t believe the Fed would deliberately destroy the U.S. dollar, thereby destroying itself. Rather I suspect the plan is to inflate just enough to replace all the money that went ‘poof,’ then inflate no more.
Part of this plan would involve drawing Maginot Lines under asset prices (e.g., DJIA = 10K, U.S. housing prices no lower than their year-end 2008 levels, etc). Currency printing and stealth asset price support could be used to lock U.S. asset prices at the Fed’s preferred levels until sufficient economic recovery ensued for private market asset demand to get back on its feet. Those who are currently buying assets at artificially supported price levels are likely to be underwhelmed by their returns during the incipient lost decade.
I’m not saying the above is what is actually happening; just that it is my best guess scenario. I also have no reason to believe the plan will work, as it basically amounts to untested, seat-of-the-pants financial management.
“There is nothing that the Fed can do to prevent the collapse of the largest credit expansion in history.”
To say they can do ‘nothing’ seems like a bit of hyperbole. It is quite clear that the Fed is doing everything within its power to prevent the bubble’s collapse from evolving into a replay of the 1930s. The real question seems to be to what extent the Fed can transform what might otherwise be a catastrophic financial collapse into something relatively more benign. Their self-congratulatory trumpeting of their success in this exercise seems highly premature.
You can’t replace all the money that went poof without massive inflation because the Fed can’t force the money it creates to be allocated back to the assets whose market value has gone poof. Making money is not the same thing as reinflating the bubble. Money goes where the market dictates it will.
“Making money is not the same thing as reinflating the bubble. Money goes where the market dictates it will.”
Perhaps that explains why so much of the poof-replacement money enters the world with strings attached:
- $8K homebuyer tax credit
- big increase in federally guaranteed mortgages
- Fed MBS purchases, which incidentally serve to suppress mortgage interest rates and support home prices
- Uncorking of GSE $400 bn budget limits
Does your comment about the market dictating where money goes pertain to money with tight constraints on how it enters the financial system?
Obviously not. But even the $8000 new buyer credit can’t be forced into the value of houses where new buyers don’t want to live or ones they can’t afford under current lending standards even with the credit. But the buyer’s credit isn’t a program of the Fed - it belongs to Treasury. The Fed’s tools are not completely undirected (see purchase of MBS’s), but are a heck of a lot less directed than all sorts of special targeted tax credits.
“But the buyer’s credit isn’t a program of the Fed - it belongs to Treasury.”
What’s the difference? Both are run by central bankers working in close alliance to contain the never-ending financial crisis, no? Where is the institutional independence, and how does it show up in policy on the ground?
You can’t replace all the money that went poof without massive inflation because the Fed can’t force the money it creates to be allocated back to the assets whose market value has gone poof. Making money is not the same thing as reinflating the bubble. Money goes where the market dictates it will.
This is it exactly.
Bear,
What is the difference? New tax programs have to be passed by Congress including at least one Republican senator. That is the difference. The Fed has no such constraints. It may or may not consider the wishes of the executive branch. I have no idea. But Treasury can’t make up new laws. Only enforce them once they exist.
If most municipalities default on bond debt, it won’t happen on the same day. It will occur over two years or so. It would result in higher yields as investors flee to other assets - real assets, wouldn’t you think, Combo? And to T-bills yielding under 0.1%. Gold bugs would see their spot price go way up. It would be a flee to safety.
Bond debt is one form of debt, promises of lifetime pensions and health benifits is another.
A public pension (or any other type of pension) doesn’t have to go bankrupt; they can just decide to cut back on the amount of money they pay out.
The same applies to Social Security and Medicare promises.
Whatever the case, less money paid out to those who were promised means less money floating around in the system, which means a scarcity of money.
Scarcity of something that is desired increases its value, it increases its price. People who have money during a period of money scarcity will get to buy on the cheap things that are for sale by those who are desperate for this scarce money.
A lot of gold has been bought by buyers who believed that a currency collapse due to hyperinflation was imminent. If the currency does collapse then they will have be proven to be right.
If instead deflation runs rampant then these gold- buyers may/will turn around and become gold-sellers. Looking around me I see few signs of hyperinflation and lots of signs of deflation, thus I am a cash-is-king guy and not somebody else.
“Scarcity of something that is desired increases its value, it increases its price.”
I am unclear what it is you are suggesting is scarce. Are you suggesting the Fed is running out of virtual paper?
“People who have money during a period of money scarcity will get to buy on the cheap things that are for sale by those who are desperate for this scarce money.”
Our little household is not wealthy like most other San Diego households, but we have always saved a little for the proverbial rainy day. I would have assumed that now would be a good time to buy wine on the cheap, but I just don’t see it. In fact, the bottles I used to purchase for $4 now generally sell for $6. What gives in the land where cash is supposedly king if cheap wine is increasing in price during a recession?
the 4$ bottle is going for $6 but maybe the $25 bottles are going for $20.
There is a glut of wine out there.
I used to buy bobby mondavi CabSav (1.5 liter) for 12.99
now i drink little penguin (yum!) for $10.89. It’s austalian.
“There is a glut of wine out there.”
I would guess both wine and houses are headed into a pancake market phase, where the quality distribution is increasingly compressed into a narrow low-end price range. The top is getting crushed by a dearth of rich people with money to burn, while the bottom is propped up by stimulus coupled with the formerly wealthy scrimping on quality to make ends meet. The same dynamics are naturally in play across various consumer durables markets (violins, wine, houses, cars, etc).
“There is a glut of wine out there.”
Another product of easy money and Groupthink run amok.
Retirees by the hundreds - thousands maybe - took their pension buyouts and RE gains and decided to open up wineries that carried their own label. It was the latest IN THING to do.
Grapes need grapevines, a no-brainer of a statement that implies a lot of capital investment for a delayed return because, unlike an annual crop such as wheat or corn or soybeans, grapevines (as do orchards) take along time to produce fruit after they have been planted. This means that for many years growing grapes eats up a lot of money without generating any returns. But that’s okay because the wine promoters (the guys that sell all the winemaking stuff to hopefull winemakers) did a “market study” which concluded that everyone of planet earth was soon going to be drinking wine in enormous quantities.
Meanwhile the promotion of the idea that drinking wine was a prestigeous act increased the demand for fine wines, which in turn led to an immediate shortage of fine wines (Remember, there is a big time lag between planting vines and reaping grapes. The thousands of newly planted grapevines haven’t begun to produce grapes yet.)
Then, all of a sudden, a totally unpredictable, a totally unforseen event took place: Tens of thousands of grapevines that had been planted all over the globe began to produce grapes. Wineries everywhere were producing an ocean of wine and selling this wine to … to whom?
If they were lucky they got to sell to Trader Joes, and trader Joe sold them to their customers at two-bucks a bottle. That’s two-bucks retail; I don’t know what the winery got for a bottle of wine but it’s a good guess it wasn’t anything close to two bucks.
The 99 Cent store was selling wine for 99 cents a bottle.
A lot of folks have lost a lot of money - are still losing a lot of money - doing their winemaking thing.
Next up? Almonds, everyone on the planet is going to be eating enormous quantities of almonds.
“Then, all of a sudden, a totally unpredictable, a totally unforseen event took place: Tens of thousands of grapevines that had been planted all over the globe began to produce grapes. Wineries everywhere were producing an ocean of wine and selling this wine to … to whom?”
Time to build effects + too many folks with boxes of money and buckets of stupid = Major crash when the vines all start bearing fruit.
But it’s all good. I bought several bottles with Wine Spectator ratings north of 90 today for an average price under $10; couldn’t have done this a couple of years ago — that’s for certain!
In vino veritas. More “truth” for us who have cash! Good thread!
“Number 9. Number 9. Number 9. Number 9. Take this brother, may it serve you well.”
Are there any mutual funds which gamble on sovereign debt? Perhaps some kind of international government bond fund is the way to tap into this investing opportunity?
Please offer your suggestions.
The Financial Times
Greece set for critical test with bond issue
By Kerin Hope in Athens and Anousha Sakoui in London
Published: February 19 2010 23:00 | Last updated: February 19 2010 23:00
Greece is close to attempting a multibillion-euro bond issue, in what will be a critical test of the country’s credibility in financial markets as it battles with a spiralling debt crisis and strikes.
Bankers in Athens expect a syndicated bond issue to be launched within days after the government appointed a senior commercial banker on Friday as new head of its debt agency.
…
Greece’s debt crisis remains acute, with no specific promises of support from eurozone partners and €20bn of bonds to be rolled over in April and May. But the interest rate premium demanded by investors in 10-year Greek bonds over German bunds stabilised this week.
George Papandreou, the prime minister, said on Friday during a visit to London: “We are not looking for money from other countries … What we are simply saying is: we’d like to borrow on the same terms as other European and euro-area countries.”
…
“It’s important for Greece to break the ice in the next 10 days and see whether they can raise funds,” said one. “The outcome – good or bad – would facilitate the discussion with the European Union over financial support for Greece.”
…
EDITOR’S CHOICE
Outside Edge: Pay up for the glory that was Greece - Feb-19
Overview: Fed discount rate move eclipses Greek woes - Feb-19
Head of Greek debt office replaced - Feb-19
FT Alphaville: Meet Petros Christodoulou - Feb-19
Analysis: The eurozone: Athenian arrangers - Feb-16
In depth: Greece debt crisis - Feb-16
Sovereign CDS are the investment choice du jour among the well-healed. Which scares the bejesus out of me.
I’m not impressed. It used to be Madoff was the investment choice of the well-healed.
Make that, the formerly well-heeled.
Is it wrong of me to pray to God that the Greek sovereign debt situation leads to jail time for top managers at Goldman Sachs?
Greece, Germany and Goldman
You just can’t make this stuff up. Germany trashes Greece for being a nation of “lazy cheats.” Greece snarls back that Germany should pay the Greeks World War II reparations before opening their big traps. There are accusations about Goldman Sachs helping to hide Greece’s debt. And then, Greece fires the head of its debt office and replaces him with a guy who used to work for…
That’s right — Goldman Sachs. (Rim shot!)
…
“…fires the head of its debt office and replaces him with a guy who used to work for…”
GoldenmanSucks is a very “viral disease” … “they” are even immune to Monsanto’s “Roundup”
shouldn’t the new spelling for GS be Goldman Sacks?
I used to joke that Bear Stearns should be spelled Bare Sterns….
Following up on Yesterday’s post, which i didn’t have time to catch, I just couldn’t help but ponder how stupid stories with editorials such as this don’t get more scrutiny:
“After 25 years of saving for his first home, Kevin Gehle bought a townhouse in Coral Springs for $189,000. It had recently been renovated with new kitchen appliances, cabinets and flooring. When he moved in, he retiled the bathroom. He had paid $13,000 in fees when purchasing the home, but figured it was fine. This was a home he was going to live in for 30 years.
“All your savings and everything goes to, you think, your home, and you think it’s going to hold price,” he said. “Well, it did for about a year.”
With the housing bubble ready to burst, Gehle’s mortgage jumped from $900 to $1,400 – an amount he wasn’t able to pay.”
The guys “saves” for 25 years, “buys” a house for $189,000, let’s say $200,000, with fees and improvements, but has a $900 per month mortgage payment that goes to $1400 in a very LOW interest environment. So, my question is: HOW MUCH did he save in 25 years?
$1000 per year? $2000 per year? $100/month? What? The story doesn’t say, but if you had saved $700 per month x 12 months x 25 years, you would have had $210,000 and PAID CASH, with NO interest accumulation over the 25 years. Why did he have a mortgage at all?
And if he couldn’t save at least $500 per month, over 25 years, lets give him 10% growth on the money over the entire 25 years from a “savings account” = $165,000 dollars “saved”. Why the $1000 per month mortgage?
The story just doesn’t ring true. He didn’t save anything to speak of. He had no business buying a townhouse, or any kind of house, except perhaps a trailer in a park because he is completely financially incapable of raising enough money to afford one. Period.
I can’t stand another sob story about some wide-eyed “investor” who thought the road to riches was “buying” a residential property. This was not a “buyer” this was a renter with an option to sell at a higher price. The Sun Sentinal should get better reporters. No more tears for fools.
Thank you, Diogenes, for taking the time to do the calculations. I think that he had an interest-only loan. He probably only “saved” enough for closing costs. No pity for him.
Is everyone getting the “House Rules” ad to the right? What was Neiman Marcus thinking? I go through a lot of effort to keep bugs OUT of my home. Why would I want to look at nine giant pictures of them on the walls?
I noticed that. What were they thinking?
Question to the board:
Are there ANY areas in Florida, California, Arizona, where you can buy a non-getto house for a reasonable price-to-rent ratio?
I’ve had it with New York. EVERYTHING is still way overpriced, both in the city and Long Island. I put together a buy vs. rent calculator, and buying at current asking prices makes sense only if you expect very high annual inflation in the next 10 years.
Yes, I am on the fence again in Pinellas County, FL
There are non-ghetto houses all over the place (Palm Harbor, Seminole, parts of Largo, parts of Clearwater, Belleair, Belleair Bluffs, parts of St. Pete) that in some cases are less than rent. I am paying $950/mo. (it will go down in 2 months)… a place, exact same sq. ft. just went under contract for $95k and it is in a better location/bigger lot than my rental.
The problem is entering the 3/2 market, but if I wanted a 2/2 retirement joint in Pinellas, I’d be in hog heaven.
I should add that there are also homes in beach communities at reasonable prices, but we’re trying to avoid flood insurance.
Sheesh Muggy
The mean elevation of Florida is only 100′ and the lowest point is Sea Level, it’s nearly surrounded by water with hungry critters and it is subject to heavy rains.
With a wife and little kids, forget the house, forget the flood insurance…
“You’re gonna need a bigger boat”
I’ve been to St. Pete and I liked it very much… Clearwater I didn’t like at all because of ugly new construction on the beach.
What are the best ways to find listings/info on-line for those areas? (And which areas are considered “good”?)
$95K sounds like a very good deal…
I use all kinds of sites, but usually these three: zillow (gives you last sold), google maps (I like to see sat), and Floridamoves
Also, you can get the history here: pcpao.org
Thanks!
No problem, you my also LOVE this St. Pete Times site: watch.tampabay.com/homes/
If you like a city feel and St. Pete, check out Euclid and the old Northeast. Damn, there are some seriously awesome homes there. I would not live there because my job is based out of mid-Pinellas. I am looking in the Seminole, Largo, and Belleair Bluffs areas.
You need to be REAL careful with St. Pete though, there are areas of nasty crime (Bartlett Park, parts of downtown, some areas around Central Ave.) Do NOT let anyone talk you into Kenwood or the south side.
NYchk
Plenty of places but what if you have to have a job to survive?
Then it still could be too expensive.
———————————————-
where you can buy a non-getto house for a reasonable price-to-rent ratio?
” I’ve had it with New York. EVERYTHING is still way overpriced, both in the city and Long Island.”
You’ve got that right, HYchk. It’s not even worth looking. I wish more NY’ers would realize this. Although I think a lot of suckers were taken out of the buyers pool, in the last year. I saw a flurry of buying last fall by the idiots that believe the hype about it being a great time to buy and running out to get their tax credit. My strategy is to sit back and build up savings. Patience will be rewarded, as many houses are sitting on the market for years and the pressure is building with sellers and banks.
Yes. In Sacramento there are lots of affordable houses in non-ghetto neighborhoods. The problem is that they are in the suburbs. Nothing affordable in nice city neighborhoods.
“Many sellers are very angry and the struggling ones are bad business.”
This comment from a realator aquaintance on hearing of my LL’s antics. He put the house I’m in up for sale for $240K. It is BTW a POS 1000 ft2 farmhouse, awfull in all regards. Tried to sell it to me for $180K in 2007 and for $80K to the tenant here in 2004. Several people have told him he is nuts and he is pissed off about it. Now his wife told him he is nuts and to get out of the marital nest, so he’s moving here. “It will sell for what it’s worth in a couple of years.”
HAHA! I think he is right. He is so angry that he cut down the yard tree yesterday, a century old Sycamore. A$$hat.
I have six weeks to clear out.
Better to be single than to be divorced. Your LL will be giving half his assets to his to-be ex. At least they are depreciating! His wife is certainly unappreciating!
That sucks, but hopefully you’ll get a nicer place for the same or less money than you’re paying now. Ironic that LL may have devalued the place a little further by getting rid of that tree. Most people value having shade, privacy, and established landscaping.
Yeah, your LL is definitely a person of less favor.
tell him that tree he cut down cost him $10,000 off the price of his “castle”
People who cut down old trees that are not a hazard nor diseased should be…
I HATE those people. Morons. Every single one.
http://www.huffingtonpost.com/2010/02/19/obama-announces-modest-fo_n_469790.html
Obama announces yet another “modest” housing bailout targeting five states where foreclosures will be particularly bad. I’ve lost track of all his bailouts and Czars and summits.
Just keep the hope alive and keep those alligators fed.
Hopefully the hopeful are not competent in grade school arithmetic; otherwise they will quickly figure out the program is a sham. Which of the geniuses on the Obamanomics Dream Team vetted the numbers behind this program?
Those who refuse to do arithmetic are doomed to speak nonsense.
– John McCarthy –
The numbers are not so high that they cannot be handled by the ignorant masses (taxpayers.)
“A Modest Proposal” — How did they come up with such a fitting description? (heh heh…) Do you think OBWan’s PR staffers have read much Jonathan Swift?
“While the money can be used to target troubled homeowners suffering from unemployment, negative equity (homeowners who are underwater), and even those with multiple mortgages on their homes (like second mortgages or home equity lines), the ultimate amount available for the five states — $1.5 billion — is a pittance compared to the amount of delinquent homeowners. As of Dec. 31, the Mortgage Bankers Association estimates that about 1.5 million homeowners in those five states were delinquent on their mortgages, according to data released Friday.”
How does $1.5 billion spread over 1.5 million FB’s work out mathematically? Does it come out to about $1000 per deserving home owner, or is my math wrong?
$1,500,000,000 / 1,500,000 = $1000.
Good luck at bailing out people who are $100,000+ in the hole with $1000 in ‘deserving homeowner’ support.
I bet “administrative costs” and bank fees will eat up at least two thirds of this allocation. What a crock.
I like that short sale program that they’ve been touting. Pay people $1000 dollars to hand the deed to the bank, who call it a short sale. Credit dinged for only two years, and write the damned thing down.
Jacqueline Salit
Executive Editor of The Neo-Independent magazine
Posted: February 20, 2010 10:39 AM
Independents See Through Washington’s Magic Show
The Washington political game is like a magic show. It’s filled with smoke and mirrors which create the perception that one thing is happening, when something else altogether is going on.
At a magic show, it looks like a lady is being cut in half, when she is actually stuffed into part of a box. Or that someone is levitating above a table, when there are wires holding them in place. Partisan Washington has a special set of illusions that are all its own.
These days the national political scene is buzzing about independent voters. They supported Barack Obama in 2008, putting the Democrats in power, but then they voted for Republicans in key statewide elections in 2009 and 2010. The establishment says “independents are on the move!” — first to the Democrats, then to the Republicans. And of course, each party claims independents as their true supporters, whenever they swing in their direction. But if you listen closely to this kind of talk you’ll realize it’s hokus-pokus.
…
Democracy is the worship of jackals by jackasses.
- H. L. Mencken
(my patron saint, so to speak.)
Those that can make you believe absurdities..
can also make you commit atrocities..
Voltaire
Ghetto Loans and Baltimore city is suing.
Human Interest In Bank Practices
How much senior executives earn, in cash and stock, is public information. How they make it is public too. Trouble is, the two are barely brought together in reporting. One story’s a business story, the other’s, well, for the “human interest” file.
As all humans have a reason to be interested, let’s pull the pieces of one tale together. Let’s take Wells Fargo, the bank whose CEO just topped the charts — as the top earner in the country for 2009.
According to analysis released by Equilar, an executive compensation research firm, Wells Fargo CEO John G. Stumpf was paid a personal best of $18.7 million in cash and stock in 2009. That’s up 64 percent from two years earlier. That means that Mr. Stumpf is making twice as much as Lloyd C. Blankfein, his counterpart at Goldman Sachs — the “great vampire squid” himself. Does that make Stumpf Mr. Super Squid… ?
http://www.thenation.com/blogs/notion/531031/human_interest_in_bank_practices
Hey Combo,
Remebering that I’m a certified deflationista…i am a little surprised by the way 10 and 30 year treasuries backed up in yield (down in price) last week.
obviously the quarterly refunding didn’t go so great (less foreign bank buying/ lower bid to cover). Maybe the glint of optimism in equities sucked a litle cash away.
Some say it’s the bond vigilantes are finally getting sick of the stimulae ad nauseum. I think the bond buyers are going to come back in droves when people panic out of equites. Hope all the blog readers know about TLT (Long bond etf), TBT (short selling etf of long bonds), and JNK (high yield bond fund etf)
Some of the developments around Boise appear to be becoming “unlocked”. I’m not sure how else to describe it.
The Pepperwood townhouse community went into some kind of legal limbo almost 2 years ago. Existing duplex townhouses dropped off-market even when new, and a row of a dozen odd townhouses were halted in mid-construction. These latter got a roof but were left with exposed naked OSB on the exterior walls. No doors, no garage doors, etc.
All of a sudden something has happened. Crews of workmen have shown up and are replacing the black-with-mold OSB with new sheets. Existing “finished” townhomes are being reworked, with piles of drywall and other detritus on the driveways. These “finished” townhouses now suddenly sport realtor’s signs and about 2/3 sport “sale pending” signs.
My guess is that the “finished” townhomes were walked away from by the original developer and did not receive proper “winterization”. This caused burst pipes and the need for massive rework.
Coating shee-yats with sugar don’t make them no strawberry shortcakes.
WOW. We had a crazy day viewing houses. Among them:
- a house with yellow walls, carpet, and ceiling from smoking
- a 4/2 with massive water damage to which the neighbor came into and begged us to buy. He recently caught a guy sawing off the pool hardware. According to him the home has been vacant for about 3 years and caught up in court limbo because it was renovated with $200k of embezzled money.
- A house a lady had just died in, and the odor hadn’t totally cleared
- a nice house we would have offered accept the idiot planted an oak tree in his backyard 40 years ago and now the freaking thing is starting to live one corner of the house
- a nice 3/2 shortsale we will be presenting an offer on
geez, we would have offered on except, the idiot planted an oak tree in his backyard 40 years ago and now the freaking thing is starting to lift one corner of the house
Bad text-to-speech program?
I hope you lifted one leg and micturated on that particular corner.
Symbolism is everything sometimes!
Naw, he was a nice, old man. I actually haven’t met any a$$hats at open houses. I guess those types have already left town. Most people we’ve met are old and moving in with family or off to assisted living.
All the old guys with CPAPs love it when I identify their machines. Not necessarily a good thing for me, but I guess it makes them fell a little better.
Alrighty, I am meeting with my realtor tomorrow to draw up the offer on a 3/2 short sale in Pinellas. I’ll keep y’all posted.
—> reaches for flamesuit
..now that’s the kinda thing I will most likely buy. Structural damage, especially foundations, is so scary it immediately turns off almost everyone.
In my younger days on a small construction crew, we specialized in fire jobs and mud slides and similar disasters…some insurance work.. water and mold damage.. traveled around and rescued many nice homes, some in danger of collapse or sliding down the hill, but worth saving. Replaced and/or reinforced entire foundations.. installed concrete retaining walls.
Smoke damage (not from smoking cigarettes) is labor intensive but pretty simple to remedy, as is fire damage. Tear it all out.
As for the cosmetic stuff, there’s not a lot of value in it. It just takes a stomach for removing whatever unpleasantness exists, and those properties are not likely to be sufficiently discounted.
Looks like the USA is going to be flying solo in Afghanistan pretty soon…..
I’m sure are troops are up to the mission…….what exactly is the mission again? oh that’s right….have their army stand up so ours can stand down……no, no that was the other war…..oh well …no more bitchin’ about ineffective allies…..seeing as there won’t be any…..
Our office news: we got the new carpet and flooring in on Thursday and Friday. It looks nice. The painters sucked. We’re cleaning up from where they splashed paint-laced water all over the toilets ( all down the sides ) and got tan paint ( trim color ) all over the faucets and door handles. We complained. The stairs to the basement were painted horribly. The walls and trim look very nice but the crew they sent over was terrible and we will never use them again. We got some money taken off of the price of the job but it wasn’t enough. He would up deducting over $600 due to issues. It should be ready to show this week.
from the NYTIMES article. Obama says we can start to withdraw in July 2011…..right
Protecting Tenants at Foreclosure Act
Kind of surprised I haven’t seen this discussed on the blog. Passed last may it gives renters who are current witht their rent the right to stay for the length of the lease.
Come to think of it, it seems like a FB could give his son a five year lease real cheap and the foreclosing bank has to live with it (or him)
Maybe there are limitations.
Looks like Dick Blumenthal (future senator to replace Chris Dodd) is on the job explaining to the banks what the tenants rights are.
Dimedropped! where are you? My brother-in-law and his brother are both skilled experienced tradesmen. They live in Toronto Canada. They want to build in Ft Myers FL. The goal is to build and sell at a profit.
What do you think?
Ben could you send this post to dimedropped with my e-mail address? Please.
OMG, seriously, Cape Coral / Ft. Myers is ground zero AKA Cape Coma and Fart Myers.
After many years of diligently scrimping and saving I’m now finally in a position to buy my first home. I’ve found a property I really like. The problem is, the home is an REO and it needs a lot of work. The house is missing all its fixtures and appliances, so it is currently not habitable. This means I am unable to secure a standard FNM mortgage on the purchase.
I have enough funds to pay cash for the house, but not enough to also complete repairs.The cost of repairs are about another 1/3 of the purchase price of the house.
After some research it seems my options are:
1) Pay cash for the house as-is, then use a hard money loan for the cost of repairs. This is very expensive, at interest rates of around 10%. Too expensive to contemplate really. In theory I could refinance after the repairs are done to pay off the hard money loan, but that will still leave me with massive upfront costs to deal with.
2) Secure a 203(k) FHA rehab loan on the ARV. It seems very few lenders offer this so they’re very hard to find. Even then the interest rate is probably 1% above a FNM 30yr fixed, plus considerable upfront points and fees, so again it is more expensive.
3) Pay cash for the house as-is, then use a HELOC to pay for the repairs. This option seems to be very cost effective, cheaper even than a standard 30yr fixed (I’ve been quoted ~4%) and minimal up front costs. Really, it seems too good to be true; it’ll be cheaper, more flexible and far less hassle than a traditional mortgage, and I have the option to refinance into a 30yr fixed whenever at minimal cost.
Will option 3) really work? My biggest fear is that I’ll buy the property for cash, using up all my savings but then have no access to funds to complete the repairs. This will blow my life’s savings with nothing to show for it in the end. How can I be secure that this will work out?
YOU just answered your own question…..
I see this as a DJ too, bar owners spend up the wazoo for a perfect bar opening then and after 6-8 weeks when the hype has worn off are struggling to pay the help…let alone advertise on the radio.
————————
My biggest fear is that I’ll buy the property for cash, using up all my savings but then have no access to funds to complete the repairs.
At repairs running 35% of the cost of the house, I would not pay cash unless I had a secured loan to finish the job.
This is a very bad roll-the-dice kinda scenario.