The Housing Bubble

(Totally OT)

Ugh.. Avatar up for best picture against Hurt Locker.

My faith in humanity is about to be tested. I haven’t seen Hurt Locker yet, but assuming it’s not a high school film project recorded on 8MM, it’s probably going to be more enjoyable than Avatar.

How can people; who’s JOB it is to critique movies, not deliver an accurate opinion on these blockbusters. Titanic was the same thing (although a much better movie), it certainly did not belong anywhere near best picture. It’s like they have to select the blockbusters, regardless if they are actually good movies or not.

(Back OT)

Oh well.. On another note, West Palm opened their waterfront this weekend.

http://tinyurl.com/ydtodqb

I wonder if this will come to be known as Lois’s (the Mayor) folly? Yes, it’s a good idea in concept. So is having one Ferrari for every day of the week. However, it’s too expensive, which is why most people would have left well enough alone, especially as the bottom falls out of the tax revenues for all the districts in FL. It’s going to be interesting, that’s for sure. I can be pretty sure that people are going to be wishing they didn’t spend that money a few years from now.

The New Poor ~ NYT ~ 2-20-10
Millions of Unemployed Face Years Without Jobs

BUENA PARK, Calif. — Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

“There are no bad jobs now. Any job is a good job,” said Jean Eisen, who became unemployed more than two years ago.

Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.

Hopefully this jobs “creation” bill will fail to pass. Not that it makes much difference. The “it takes a village people” will come up with some mangled up mess that will not cure a thing. However it is 100% guaranteed to waste billions of digital dollars.

Job-creation bill could fail in Senate ~(Reuters)~ 2-21-10

WASHINGTON - A job-creation bill could be headed for defeat in the Senate next week, lawmakers and aides said on Friday, as key Republicans have withdrawn support for what was supposed to be a relatively noncontroversial measure.

The measure’s uncertain fate highlighted the partisan rancor that threatens even relatively modest measures like the jobs bill, which aims to reduce the nation’s 9.7 percent unemployment rate before the November congressional elections.

A defeat could be embarrassing for Senate Majority Leader Harry Reid, who has struggled to hold his Democrats together on high-priority legislation like healthcare reform over the past year, and is sure to frustrate President Barack Obama, who has called for increased bipartisanship.

American Woodmark sales fall 32 percent
Washington Business Journal

Kitchen and bathroom cabinet maker American Woodmark lost money last quarter and blames continued weakness in the home remodeling segment for a 32 percent drop in sales.

The Winchester-based company had a fiscal third quarter net loss of $9.1 million, or 64 cents per share compared to net income of $23,000, or 0 cents per share in the same quarter a year ago. It had net sales of $89.2 million, compared to $131.2 million.

“The company’s net loss [reflects] our ongoing strategy to retain the organizational and production capacity to service our customers as demand for new construction and big ticket remodeling projects recovers,” said chief executive Kent Guichard in a statement.

Last year, American Woodmark closed two manufacturing plants, idled a third and cut its salaried workforce to counter falling sales.

I’m going to type up a rant against investment banks, even in their traditional role of helping companies issue stock or debt. It is going to take a bit, so I’m putting a place holder here so it won’t end up at the bottom of the page.

Please note that I am just getting over the virus my nephew gave me last weekend (had a low grade fever most of yesterday) so I’m feeling a little cranky.

This is largely inspired by my low grade but building fury at the president reporting that he admired these guys as business people. I used to work for them (through my first law firm job) and I don’t admire them at all.

Gave it awhile, sorry if this is a double post:

(Totally OT)

Ugh.. Avatar up for best picture against Hurt Locker.

My faith in humanity is about to be tested. I haven’t seen Hurt Locker yet, but assuming it’s not a high school film project recorded on 8MM, it’s probably going to be more enjoyable than Avatar.

How can people; who’s JOB it is to critique movies, not deliver an accurate opinion on these blockbusters. Titanic was the same thing (although a much better movie), it certainly did not belong anywhere near best picture. It’s like they have to select the blockbusters, regardless if they are actually good movies or not.

(Back OT)

Oh well.. On another note, West Palm opened their waterfront this weekend.

http://tinyurl.com/ydtodqb

I wonder if this will come to be known as Lois’s (the Mayor) folly? Yes, it’s a good idea in concept. So is having one Ferrari for every day of the week. However, it’s too expensive, which is why most people would have left well enough alone, especially as the bottom falls out of the tax revenues for all the districts in FL. It’s going to be interesting, that’s for sure. I can be pretty sure that people are going to be wishing they didn’t spend that money a few years from now.

10 percent reportedly late on mortgages

Nearly 10 percent of San Diego County homeowners with mortgages are at least two months late on their payments and are likely to default and fall into foreclosure, a sampling of area credit records shows.

According to Chicago-based Trans-Union, a credit and information management company, a record 9.9 percent of mortgage holders in the county were 60 days or more delinquent in the fourth quarter of last year. That’s up from 6.2 percent a year earlier and 1.5 percent, the historic average, at the beginning of 2007.

California’s delinquency was even higher, 11 percent, while the nation as a whole was at 6.9 percent — both record levels. TransUnion used a sample of 27 million consumers’ credit records, about one-tenth of the total available, to calculate the delinquency rate.

Foreclosures Seen Still Hitting Prices
wsj.com

More waves of foreclosures will keep downward pressure on home prices in parts of the U.S. over the next several years, two new studies project.

The studies—by John Burns Real Estate Consulting Inc. and Standard & Poor’s Financial Services LLC—conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure.

The Treasury Department is expected to give its latest update this week on government efforts to avert foreclosures.

The John Burns study estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments.

This “shadow inventory” of homes expected to hit the market is enough to last about 10 months, based on the average sales rate over the past decade, the Irvine, Calif., firm says.

The problem is concentrated in Arizona, California, Florida and Nevada. The shadow inventory is equivalent to 27 months of sales in Orlando, 24 months in Miami and 18 months in Las Vegas, the study estimates.

Over the past nine months, home prices as measured by the S&P/Case-Shiller index have risen modestly after a three-year plunge. That is largely because efforts to avert foreclosures have slowed the flow of foreclosed homes onto the market, temporarily constricting supply.

John Burns, CEO of the consulting firm, said investor demand for foreclosed homes remained strong. Thus, he said, prices were likely to be about level over the next few years, despite the looming foreclosure supply, if the economy continued to recover and mortgage interest rates didn’t rise sharply. But if the economy slumped anew and interest rates jumped, he said, “that’s going to cause prices to fall further.”

The S&P study also says that the “overhang” of foreclosed homes expected to go on the market points to lower home prices.

Some borrowers are catching up on payments after having their loan terms modified, but S&P says current trends suggest that 70% of such borrowers eventually will redefault. Loan modifications “may be helping marginally, but they are not going to solve the whole problem,” said Diane Westerback, a managing director at S&P.

Loan servicers, firms that collect payments and handle foreclosures, seem to have “nearly exhausted the supply of plausible candidates for loan modifications” and will find that many loans are “unredeemable,” the S&P study says. As a result, servicers increasingly are looking to arrange “short sales,” in which homes are sold for less than their loan balances.

Two things:

1) Last monday I had lunch with a friend in Paso Robles who was on the way home from a second home in Cambria. In the past it was always, yes housing in falling but my house won’t because and everyone keeps moving to the beach areas. This day was ‘my gosh you should see what’s happening, prices are dropping and I could buy a better house now for what I paid’.
2) A friend of my wife living in Santa Clara called to say I want to thank you husband for talking sense on housing. In Sept. of 2009 we didn’t want to believe it,but he made sense. We just put our house up on a short sale, will save money by renting and will be leaving at the end of the year for Oklahoma where we have family and can live much, much cheaper. Both husband and wife will take their CA retirements (retiring this year) with them at that time.

So my wife and I did our taxes. I have been out of work and in nursing school for 3 years. My wife worked last year and made less than $12000.
Our return was for $9000. This is why our country is screwed. I do not see how this is sustainable. Multiply that by millions of people in the same boat and thats a lot of money.
I thank all the tax payers for your charity.

Man accused of renting foreclosed homes says he’s done nothing wrong

Land O’Lakes, Florida — The man accused of renting out foreclosed homes he doesn’t own said he was only trying to help the community.

“The homes are left abandoned, they’re getting burglarized, beaten up, it’s horrible what’s going on,” said Stephen Bybel.

He claims he’s done nothing wrong.

Pasco County Sheriff’s deputies arrested Bybel Wednesday morning, accusing him of illegally taking possession of 72 homes throughout Pasco County and pocketing more than $16,000 in rent last month from 31 of the homes.

“What I’m doing is trying to get people into homes,” said Bybel, “The big thing is, you’re taking money… it’s not about the money, it’s about getting people into homes so they don’t get any worse. I’m trying to preserve what’s left of them neighborhoods before it gets worse.”

The 31 families living in the homes they thought they were legitimately renting from Bybel are now being told they have to move because technically they’re squatters since they do not have permission from the homeowner to live there.

Nicole Holt learned Thursday morning that she has to leave the Westbrook home she just moved into on Saturday.

The mother of two, whose husband is serving in Afghanistan thought she found a once in a lifetime deal in the home. At $800 per month, it was a deal she couldn’t pass up.

Bybel seemed to be legit and told her he was trying to help the homeowner, she said. Now she has no idea where she’ll go next or if she can even afford it.

“It was very expensive to move in and I just got my kids adjusted to it. My sister is also renting from him and she has four kids,” Holt told 10 Connects.

She estimates she spent $2,000 on moving expenses, which includes the $800 rent, utility deposits and paying off utility bill still owed on the home.

She’s not buying Bybel’s claim that he was just trying to help.

“Whatever helps him sleep at night,” she said.

Lawyer misconduct rises with foreclosure record

Ripoffs of homeowners have become so commonplace that state bar associations from Florida to Arizona are warning their members of the many ethical pitfalls awaiting those who exploit the mortgage crisis. The California State Bar launched a task force a year ago to examine thousands of homeowner complaints about foreclosure lawyers.

Currently, the California Bar is investigating more than 400 attorneys who are suspected of ripping off thousands of homeowners across the country.

The organization that licenses and disciplines California’s more than 250,000 lawyers already has suspended or obtained the resignations of 15 lawyers while disciplinary charges are pending.

The first to be charged was Sean Rutledge, founder of the law firm that purported to represent Jacobs and 13 other homeowners.

Just months after securing a law license, Rutledge had been flying high. His United Law Group ramped up to several lawyers and opened offices in other states.

Today his license is suspended, his nascent career lies in tatters and he is under investigation in California and Ohio for taking fees of up to $3,500 from desperate homeowners then allegedly doing little — or nothing — to save their homes.

The California Bar formally charged Rutledge in July with not only failing to perform vital tasks to stop foreclosures, but calling his clients “losers” during the rare occasions they could get him to return their telephone calls.

Rutledge has denied the allegations and said he would contest the state Bar’s attempts to disbar him. He is appealing the dismissal of a lawsuit he filed against the state Bar, alleging that it violated federal laws protecting the disabled. He suffers from diabetes and alleges state Bar investigators ignored his need for treatment when scheduling meetings, among other claims.

He did not return e-mail messages seeking comment, and could not be reached through the United Law Group, which remains in business and calls the focus on its founder and firm a “witch hunt.”

“But Michael Bird, from the National Conference of State Legislatures, says it will be a long time before states restore optional benefits, like dental coverage.

“The fiscal downturn is so severe that, even if you were to raise taxes or fees, you still aren’t going to be able to plug all of the holes that exist right now,” Bird says. “This is all about saving part of the school year versus the early release of prisoners versus an optional dental program versus whether you’re going to be able to fill the potholes on the roads.”

Bird says state coffers are empty and all the easy choices were made long ago.” From NPR web site

I can attest that I can get into a dental office now with no waiting. Yes, I pay the full price but if you need the work it is well worth foregoing other things.

Rep. Ron Paul surprise winner of CPAC presidential straw poll

With participants naming “reducing the size of federal government” as their top issue, the 74-year old libertarian hero captured 31 percent of the 2,400 votes cast in the annual contest, usually seen as a barometer of how the GOP’s conservative wing regards their potential presidential candidates.

Former Massachusetts Gov. Mitt Romney finished second with 22 percent of the vote, ending a three-year winning streak at CPAC.

http://www.cnn.com/2010/POLITICS/02/20/conservatives.meeting/index.html?section=cnn_latest

How about the Paul/Romney ticket to take on BHO in 2012? Sounds like a winning combination to me.

From the Atlantic Monthly:

How a New Jobless Era Will Transform America

The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.

theatlantic DOT com/doc/201003/jobless-america-future

In today’s NYT:

The New Poor
Millions of Unemployed Face Years Without Jobs

Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.

nytimes DOT com/2010/02/21/business/economy/21unemployed.html

Sadly, the SD Union-Tribune has changed their web site to make it far more difficult if not impossible to post links to articles in their current dead tree edition. But they have not yet figured out how to stop me from typing on my laptop keyboard and hitting the “Add comment” button.

DON’T GET A HOME MORTGAGE.

The San Diego Union-Tribune
Sunday, February 21, 2010

Housing Scene
LEW SICHELMAN

Count the ways to save big money on your home mortgage

WASHINGTON — There are dozens of ways to make your housing investment pay off faster and at a greater return. In some cases, a small extra outlay may be required, sometimes every month, but the added expense is often pocket change when compared with the available savings.

Your mortgage is typically your largest monthly expense. Therefore, it offers perhaps the largest single source of potential savings:

* Extra payments.
…
* Private mortgage insurance.
…
* Refinancing.
…
* Property taxes.
…

The graphs on this huge post speak volumes about how far along we are and how much further we have to go in the return from bubble-era housing valuations.

And I am glad that Ritholtz points out the close resemblance of many economists’ perspectives to religious faith. A little more grounding in data-based reality and a lot less faith-based conviction would do much for the economics profession’s reputation.

Homes: Still Too Pricey to Stabilize
By Barry Ritholtz - February 18th, 2009, 12:34PM

The Obama plan is a little better than I expected, but it still dances around an issue that is sacrilegious to many economists: Home prices are still way too high for any stabilization and/or housing bottom to form.

While houses are not nearly as wildly over-priced as they were one or two years ago, they are still too high by most valuation metrics. Propping up home prices and the desperate attempt to forestall foreclosures only serve to delay this inevitable process. To effect a stabilization, housing bottom and recovery, overpriced assets need to fall even further.
…

When an investor shows up in your office with a gun in her hand….

On Dec. 15, Barton transferred, for a total price of $10, three vehicles to his wife Suzanne’s name: a 2006 Dodge Ram Mega Cab truck; a 2008 BMW touring motorcycle; and a 2005 Steed, a specialized chopper motorcycle that can sell for up to $40,000 new. Barton handed over sole ownership of a 2008 Cadillac Escalade to his wife in exchange for her assuming its loan payments, Travis County property records show.
Barton also took his name off the deed for the couple’s house in Austin’s gated Uplands neighborhood, which tax records show is valued at $644,000. It is now in his wife’s name only. A day later, property records in Hays County show, he transferred a 50-acre ranch assessed at $651,000 and owned jointly by the couple to her name only.
The sale price for each of the homes, according to the bills of sale: “Love of, and affection for, Grantee.” All told, Barton erased his name from property totaling nearly $1.4 million.

………

Barton, the CEO of Triton Financial, would have known the company was on shaky ground when he removed his name from the properties. On Dec. 11, a woman had confronted him in his office with a gun, distraught over what she said was the loss of her $125,000 investment. In the days leading up to the transfers, investors filed three separate lawsuits against Triton, charging that Barton had mishandled their money.

……….

Even investors who now worry that they will lose money through their connection with Kurt Barton agree that the founder and CEO of Triton Financial appeared to know his real estate, at least early on.
In 2004 and 2005, Joe Straubhaar invested in several apartment complexes Barton had purchased in and around Austin. The deals, in which Barton quickly rehabbed the properties and sold them, paid out returns as high as 15 percent, Straubhaar said.
He added that such successes inspired confidence in Barton as a money manager. Most of the profits Barton told him he’d earned were poured back into new deals.
“He seemed to have a good eye for such properties,” Straubhaar said, adding that much of the several hundred thousand dollars he invested with Barton now appears gone.
“He would find some distressed property and buy it at the right price,” said Greg Gill, a California investor who said that in 2006 he purchased a 20 percent interest in an office building west of Austin that Barton renamed Triton Plaza. “It’s been a real successful project.”
Gill said that success convinced him to invest more money with Triton. “He seemed to me he was real, and he proved he was,” Gill said.
Now, however, Gill said he stands to lose money, although he declined to specify how much.

……….

With the economy still recovering from a recession, selling Triton’s remaining properties may not be as simple.
“It’s certainly not a great time to sell a piece of real estate,” Gill said.
One possible consolation: Last year, the Internal Revenue Service modified its rules to give a tax break to people who lost money in a “fraudulent investment” and “Madoff-type” schemes. Triton’s “investors may qualify to take the special tax treatment,” according to a Web site set up by Harr to communicate with Barton’s investors.

Austin American Statesman headline: As regulators closed in, Triton CEO moved property to wife

I thought the home buyer tax credit was scheduled to expire on April 30, 2010. Has it already been extended again? And will the tax credit expiration date be repeatedly pushed out from here to eternity?

Anyway, it looks like real estate fraudsters now can at least enjoy bilking the IRS out of home buyer tax credit money through June 30, 2010.

Friday, February 19, 2010

IRS’ Housing Credit Checks
by Ken Harney

WASHINGTON — Despite back-to-back blizzards that shut federal offices for days, the IRS issued new guidance last week on the two tax credit programs that are powering the country’s real estate markets — the $6,500 credit for repeat buyers, and the $8,000 first-time buyer credit.

The new IRS policy clarified documentation that taxpayers need to submit to successfully obtain either credit. When Congress revised the credit programs last November, it ordered the IRS to tighten its rules and monitoring to curtail widespread frauds that had emerged earlier in 2009.

These included fictitious home purchases where people claimed and received $8,000 checks from the government on transactions that had never occurred. In some cases, federal auditors found that fraud ringleaders were submitting multiple claims for credits and splitting the government payouts with people who had no financial ability to buy a house.

To avoid such abuses in the revised credit program — which is scheduled to be available for qualified purchases closed through June 30 — Congress directed the IRS to spell out documentation standards in detail and to install monitoring systems to spot fraud upfront. Among the keys to the monitoring system is that all documentation accompanying credit claims must comply with IRS’ detailed rules.
…

In retrospect, wouldn’t it have been a lot smarter to first take stock of the scope of the real estate collapse, before presuming that some kind of quick fix program could largely offset the damaging financial effects of a collapsing bubble?

Can’t say the HBB didn’t offer fair warning…

A year later, reality sets in on housing fixes
Mortgages » Government aid program fails to deliver.

By Alan Zibel

The Associated Press
Updated: 02/19/2010 05:16:51 PM MST

A vacant home surrounded by a chain link fence, carrying a “bank owned”… (The Associated Press)

Washington »

The new president climbed aboard Air Force One a year ago for a trip to Phoenix to reveal his strategy for attacking the housing crisis. It was a signal moment in the buoyant early days of Barack Obama’s administration.

The plan, Obama told a cheering audience, would keep as many as 9 million people in their homes by lowering their monthly mortgage payments. The program wouldn’t save every home, Obama cautioned, but few people paid attention. Not with Treasury Secretary Timothy Geithner saying things like, “You’ll start to see the effects quite quickly.”

The numbers show a program that is failing to deliver, at least at this point. About 116,000 homeowners out of an initial 1 million who were targeted have had their loans modified to reduce their monthly payments, the Treasury Department said Wednesday. Only about $15 million in incentive money has been paid to more than 100 participating mortgage companies. That’s 0.02 percent of the $75 billion available.

Now the administration is changing the way it measures success by counting the number offered help rather than those who get actual modifications. “We didn’t say all of them were going to succeed,” says Michael Barr, an assistant Treasury secretary, who helped develop the plan.

“We were attempting to set realistic expectations, but I think we failed to do so.”
…

Decaying apartments symptom of housing crisis

In this Feb. 11, 2010 photo, Mary Fountain goes through a file full of papers that document the numerous violations at her apartment in New York. This Bronx apartment building, where city housing violations have increased from 82 to nearly 600 in 16 months, is among thousands of rental properties from Los Angeles to Harlem showing a creeping decay as housing values collapse and funds for repairs dry up. (AP Photo/Seth Wenig) (Seth Wenig - AP)

In this Feb. 3, 2010 photo, Tatequa Aridi, 22, arrives home at the Riverton Houses apartment complex in New York. A judge has ordered the foreclosure sale of the historic middle-class Harlem apartment complex that plummeted in value amid the housing downturn. (AP Photo/Bebeto Matthews) (Bebeto Matthews - AP)

By SAMANTHA GROSS
The Associated Press
Sunday, February 21, 2010; 11:43 AM

NEW YORK — There was no heat or hot water, so for weeks Mary Fountain would fill a bowl and put it in the microwave, then strip off her extra layers to sponge herself clean.

Upstairs, her longtime neighbor, 70-year-old Gearaldine Davis, peers skeptically out at her balcony, hesitant to step onto the cracked concrete. The last time the city inspector came by, he told her he was afraid to walk out there.

This Bronx apartment building, where city housing violations have increased from 82 to nearly 600 in 16 months, is among thousands of rental properties from Los Angeles to Harlem showing a creeping decay as housing values collapse and funds for repairs dry up.

As landlords find themselves owing more than their properties are worth, some have simply walked away, leaving garbage to pile up. Others have disappeared into bankruptcy, with unpaid utility bills. Some have tried to reduce their losses by neglecting basic maintenance.

“There are 100,000 apartments teetering on the edge” in New York City alone, said Harold Shultz, senior fellow at the Citizens Housing and Planning Council. “And depending upon the way various winds blow, they could fall over.”
…

Last september, the Wisconsin legislature decided in its infinite wisdow, to increase the tax on a pack of cigarettes by 75 cents. Governor Doyle even stating that increasing the tax to do away with smoking is his goal. Well, here we are 6 months later and guess what? Headline, revenue from cigarette taxes down by 98 million, causing a budget deficit.
The great cry on cigarette taxes, is to use the money to pay for the increased health care smokers are dumping on the system. Stupid is as stupid does. Not only did the reduced consumption reduce the tax revenue, it also reduced the settlement agreement pay back to the state. less sale, less settlement money.
At what point, do they kill the golden goose? Only a small percentage of the tax money goes to health care. the rest goes to the ever expanding government. I’m all for this type of tax, but, use the tax as intended.

A house was listed (short sale) yesterday and we will be making an offer. My realtor said there has been tons of traffic on it. Sold in 06 for $370k, listed $250k, we will be offering $215k. I am 95% certain we will be outbid, but what the heck — my realtor is willing to write offers regardless (he thinks it’ll go for about $230k).

I can’t wait for the tax credit to go away and the FHA standards to tighten/costs go up. A lot of the other people we see at open houses are young couples with their parents. That really bugs me.

Joey,
I’m not in the minority in wanting more banking regulation. You are Joey.

“All in all, do you think it is a good idea or a bad idea for the government to more strictly regulate the way major financial companies do business?”

Good Idea 59%
Bad Idea 33%
Unsure 8%

Pew Research Center Poll. Feb. 3-9, 2010.

According to the Yahoo News story, apartment buildings are falling into disrepair and foreclosure as well. While renters have made the smarter choice recently, I worry that many more renters are going to be ensnared by this crisis.

Oh, I almost forgot. Sen. Vitter, R Louisiana had a meeting. He invited me to that meeting. I’m pretty sure he didn’t realize that I was a HBBer from way back. I asked for specifics on how he was to “balance the budget.”

I asked a question about how - specifically - he intended to balance the budget. His response was “If you are in a hole, the first thing you need to do is to stop digging.”
My response was “Fine, I want to know, specifically, what you intend to do about balancing the budget.” I mentioned that there was no stomach in DC to do that and hadn’t been for decades no matter what party was in power.
I also mentioned that “we put two wars in a credit card.”
Boy did he get upset. I was cut off. Gee, it was like he didn’t want to talk about that. … like a brought up a subject best not discussed.

Specifics. Go figure.

Anyway, here is my follow up email to Sen. Vitter.

Sen. Vitter,
I attended the meeting in W. Monroe today. I thought it went well all things considered. Calls for America’s return to morality were well received by me. I’m not a religious person, but I do know that we must “do right.” The prayerful have no lock on that.

Yes, I had a question about the political will to actually address our deficit problems. No, I don’t believe that the Republican Party is going to do any better than the Democrats did.
There is no will to actually fix this. Like I said during the meeting, we put two wars on a credit card and act like we are on vacation. Two wars.

We then acted like there wasn’t a problem in the world. We bought cars we couldn’t afford, huge houses with no means to make the payments, failed to save for our retirements, failed to save for the future, failed to save for our children, failed to fix the problem, all while we are fighting two wars.

We have sent our soldiers through that war three and four times, and they are not happy about that fact.
In the end, there will be a price to pay for our feckless, selfish actions in the wars and with our debts.
Our soldiers “pay” first, we will then “pay”, then our children and descendants will “pay”.

I just don’t think it can be fixed as easily as you claim.
—

Roidy

P.S. To paraphrase, ” A HBBer in a room full of normal people is like a velociraptor in a room full of wiener dogs.” or something like that. See Shatnerology.

Hi all!
I was wondering if anyone else on here is following the market in southern NH? I have been patiently waiting on houses to return to ‘normal’ around here but it’s slow going.
I love the blog BTW, I have been reading it for the last 2 plus years and I have learned so much and it is about the only thing keeping me sane in this market! Everyone else thinks I am crazy for waiting to buy. They think this is as low as it’s going to get and I am crazy to pass up the tax credit! Just wanted to say Thanks for all the great info!

Hi All!
Is anyone following the market in Southern NH??? I am patiently waiting for houses to return to ‘normal’ around here but it’s slow going.
I have been following this blog for over two years and wanted to thank all of you for all the great info!
(sorry if this posts twice I don’t know what happened to my other one!)

What you should know about home foreclosure

By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 7:15 p.m. Friday, Feb. 19, 2010

After more than six months of wrangling with her bank to get a reduced mortgage payment through a federal loan modification program, Debra Jacobs has had enough.

The West Palm Beach resident is walking away from her home of 14 years.

“I’m just going to wait here until they put a padlock on the door,” said Jacobs, 58. “I’m so over it, I have to let it go. It’s too painful.”

As homeowners grow increasingly frustrated by the nation’s struggling foreclosure prevention programs, more may consider walking away as a viable alternative.

But there’s more to it than just stopping your mortgage payments and handing over the keys.

Boca Raton real estate attorney Marlyn Wiener says there’s no “right way” to walk away from a home.

Knowing the consequences, however, will at least help the borrower make an informed decision, she said.

“There is an analysis that each homeowner should do to find the best way for them to proceed,” Wiener said. “There isn’t a speed lane.”

The biggest gamble in walking away is whether a lender will try to seize a borrower’s assets to pay for its losses, Wiener said. Lenders have up to 20 years in Florida to collect a deficiency judgment.

But banks are more likely to go after borrowers who strategically default — a term meaning the homeowner can afford the mortgage but decides to stop paying because the home is no longer a good investment.

Moral dilemmas aside, Wiener said it can make financial sense in some situations to “pull the plug and regroup” if the mortgage is underwater.

Scott Haft, who oversees the mortgage modification and foreclosure defense division at the law firm LaBovick & LaBovick, said some lenders are willing to forgive a mortgage debt if a borrower voluntarily turns over the home without going through a lengthy court foreclosure.

“We say, ‘We’ll give you the keys on Monday, but you have to waive your right to pursue my client in the future for deficiencies,’ ” said Haft, whose company has offices in West Palm Beach, Boynton Beach and Palm Beach Gardens. “Many times, the lender is only interested in regaining the property.”

Another concern is whether the homeowner will have to claim forgiveness of debt on tax returns for the amount of money owed the lender.

The Mortgage Debt Relief Act of 2007 temporarily exempts people who lose their primary residence from having to claim the canceled debt, but the act is scheduled to sunset Dec. 31, 2012, and can’t be applied to investment properties.

“Everybody’s relationship with their properties and their loans is different,” Wiener said. “People need to take a look at where they are in life before they decide to walk away.”

One thing Wiener asks clients is whether they will need good credit in the near future to secure a car or student loan. A foreclosure can knock up to 300 points off a credit score — damage that can take years to repair and will stay on your report for seven years.

Lenders have recently stepped up efforts to ease the foreclosure process and avoid the complications when a homeowner walks away.

Citigroup launched a program this month that allows some borrowers to stay in their homes for six months without paying. In return, the homeowner turns in the keys at the end of the time period and keeps the home in good shape.

The federal Home Affordable Foreclosure Alternatives Program, announced in November, gives lenders incentives for offering deed-in-lieu of foreclosure and for approving short sales.

But for Jacobs, the alternatives are “too little too late.”

“Not only do I not know the options, I don’t care anymore,” she said. “It’s really sad it’s come to this.”

Palm Beach County’s misery index soars again
by Jeff Ostrowski

The Palm Beach County Pocketbook Pain Index continues to soar, thanks again to Florida’s nation-leading rate of “seriously delinquent” mortgages.

In a nod to the Misery Index (which sums national unemployment and inflation), I track a local index that combines three indicators: unemployment in Palm Beach County, inflation in South Florida and the rate of mortgages in Florida that are either 90 days past due or in foreclosure.

That adds up to an index of 34.05, the highest point for the measure since 1979, the year my quarterly index begins.

The Pocketbook Pain index is based on these stats: December unemployment of 11.5 percent, according to the Florida Agency for Workforce Innovation; South Florida inflation of 2.12 percent in December, according to the Bureau of Labor Statistics; and 20.43 percent of mortgages statewide that were either 90 days past due or in foreclosure in the fourth quarter, according to the Mortgage Bankers Association of America.

This entry was posted on Friday, February 19th, 2010 at 11:15 am and is filed under Uncategorized.

Are there any journalists out there who are sufficiently smart and ambitious to explore whether what Goldman Sachs did for the Greek government might also be happening right under our noses back here in the good old USA? This seems like the kind of story that could make a journalist’s career, if it panned out.

Just curious…

* The Wall Street Journal
* FEBRUARY 21, 2010, 6:55 P.M. ET

London Firm Was Created to Route Cash

By CARRICK MOLLENKAMP

Greece’s fiscal woes, the exposure of the European financial system to them and the role played by Wall Street in hiding the problems all converge in a fifth-floor office near London’s Liverpool Street station where a company called Titlos PLC was created in early 2009.

Just 22 days after Titlos was born, the National Bank of Greece SA and Goldman Sachs Group Inc. arranged for the company to sell €5.1 billion, or about $2.04 billion, in notes, according to U.K. and U.S. documents.

But Titlos wasn’t a real company and the notes weren’t designed for ordinary investors. Titlos doesn’t make anything and its only directors are two British executives who work for a firm that specializes in the formation of corporations and the sale of pooled assets.

Instead, Titlos, descendent of a 2001 deal to help Greece hide debt, was set up to take advantage of a European Central Bank effort to inject cash into a banking market hobbled by the financial crisis. Titlos’s notes were designed to be pledged for that program, according to filings by Titlos and the National Bank of Greece, and the buyer was the bank itself.

The history of Titlos also illustrates how bank and government dealings, often deeply intertwined, can complicate efforts to unclog a global banking system.

Gustavo Piga, a professor at the University of Rome Tor Vergata, says the opaque derivative trades that Greece and other countries engaged in “tarnishes the reputation of government” as it tries to police financial markets.

“There is this huge mortal embrace between the government and the banks,” Mr. Piga says. “It creates huge conflicts of interest in the actions of government.”
…

Maybe $1.5 bn in foreclosure bailout funding is not enough to help worthy home owners in Nevada and four other states stave off foreclosure?

For the mathematically challenged, a twenty-five percent drop in housing prices on top of an extant twenty-six percent drop adds up to an overall housing price decline of (1-(1-0.25)*(1-0.26))*100 = 44.5 percent.

* The Wall Street Journal
* FEBRUARY 21, 2010, 6:08 P.M. ET

Nevada in Budget Squeeze
Hard Choices in Store for State That Already Runs Lean; Some See Opportunity

By ALEXANDRA BERZON

Nevada’s $887 million deficit is puny compared with California’s $20 billion hole.

But in a state that operates one of the leanest budgets in the nation, that amounts to a 22% shortfall, a gap that has some worried that the state might fall further behind in such areas as education and health care, where it already lags behind other states. Others sense an opening to chart a new course in small government.

“We are working on solutions to turn this recession into an opportunity to reinvent our state’s government,” Republican Gov. Jim Gibbons said in an emergency State of the State address this month. “We may never have an opportunity like this again,” he said. Mr. Gibbons faces a tough primary battle this year and has had low approval ratings.

Limited government is as much part of the folklore of Nevada as cowboys and mobsters. Shortly before Nevada became a state, mining companies—then the dominant industry—ensured a tax cap for themselves in the constitution. The state has never had a personal income tax, and voters enshrined that ban in the constitution in the 1980s. The state legislature meets in regular session only for a few months every two years.

Nevada has been hit hard by both the foreclosure crisis and a sharp drop in gambling and tourism spending. The unemployment rate was nearly 13% in December, up from 8.4% a year earlier. Housing prices dropped 25% in the third quarter of 2009 from a year earlier, when they were already down 26%.

Mr. Gibbons, a conservative who faces a tough primary challenge, is among those who are trying to use the latest budget crisis as a way to ensure Nevada doesn’t stray from its small-government roots.On Tuesday the legislature begins a special session to close the shortfall in the budget it approved a year ago, which includes this fiscal year and next.

However, that’s a mighty task in a state as flinty as Nevada.
…

Stories like this do a Californian’s heart plenty of good. After royally hosing Main Street in the bailout race, the Empire State deserves every bit of economic hardship it gets.

* OPINION: FEDERATION FEATURE
* FEBRUARY 12, 2010, 6:00 P.M. ET

Empire of Excess
New York is in for more economic trouble.

By E. J. MCMAHON AND JOSH BARRO

From the City Journal

Advocates of the misnamed “millionaire’s tax” enacted in New York State last year claimed that it would restore “fairness” to a tax code that favored the rich. After all, the statewide teachers’ union noted, “over the last 30 years, New York has cut its top personal income tax rate on the wealthy by one-half.” Technically, the union was right—but that was only part of the story. Thanks to the interplay of federal and state tax rules, Albany’s share of all income taxes paid by New York’s wealthiest residents has actually been rising since the 1970s. And it will soon rise to its highest level ever, if President Obama and congressional Democrats have their way. This is bad news for New York’s battered economy.

The last time New York was struggling with a major economic downturn, Washington gave the state and city a shot in the arm. In early 2003, Congress and President George W. Bush agreed to accelerate their already-scheduled temporary reductions in federal income-tax rates and to cut federal taxes on capital gains and dividends more deeply. Those investor-friendly federal cuts took effect at the same time as large temporary increases in both state and city income-tax rates, which the New York State Legislature had enacted over Governor George Pataki’s vetoes. The economic positives of the big Bush cut canceled out the negatives of the smaller state and city hikes.
[Graph] City Journal

Nearly seven years later, in the aftermath of a far more serious economic crisis, the winds of tax policy are blowing in a very different direction for New York. President Barack Obama won office on a promise to return the top two income brackets’ marginal rates (now 33 percent and 35 percent) to the levels in effect before his predecessor took office (36 percent and 39.6 percent). He’s virtually assured of achieving that goal no later than 2011, when the Bush tax law expires. With federal deficits swelling and pressure mounting for more “stimulus” spending, taxes could rise even as soon as this year. Meanwhile, the president’s allies in organized labor are sharpening another dagger for New York: a tax on financial transactions.
…

Contagion Theory is “out;” Cockroach Theory is “in.”

* The Wall Street Journal
* FEBRUARY 22, 2010

Debt Deals Haunt Europe
Investors Re-Examine Complex Financial Maneuvers Used to Hide Borrowings

By CHARLES FORELLE AND SUSANNE CRAIG

Concerns that Greece and other struggling European nations may not be able to repay their debts are focusing investor attention on another big worry: Economies across the Continent may have used complex financial transactions—sometimes in secret—to hide the true size of their debts and deficits.

Investors long turned a blind eye to European governments’ aggressive bookkeeping, aimed at meeting the euro zone’s budget ceilings. In reports to the Eurostat statistics authority, Portugal classified its subsidies to the Lisbon subway as equity. Greece insisted that large portions of its military spending were “confidential” and thus excluded from deficit calculations.

Now, suggestions that Greece’s budget could be further constrained in the coming years by interest payments on years-old bank transactions has refocused attention on long-forgotten financial deals undertaken by Athens and other euro-zone capitals to bring down budget deficits. Many of these deals involved currency swaps. In such transactions, countries might borrow in a currency not their own, for example, and use a derivative to offset the risk of currency fluctuations. But these instruments can also be used to artificially massage cash flows and liabilities, to meet debt and deficit thresholds.

Goldman Sachs Group Inc. did as many as 12 swaps for Greece from 1998 to 2001, according to people familiar with the matter. Credit Suisse was also involved with Athens, crafting a currency swap for Greece in the same time frame, according to people familiar with the matter.

Deutsche Bank executed currency swaps on behalf of Portugal between 1998 and 2003, according to spokesman Roland Weichert. Mr. Weichert said Deutsche Bank’s business with Portugal included “completely normal currency swaps” and other business activity, which he declined to discuss in detail. The currency swaps on behalf of Portugal were within the “framework of sovereign-debt management,” Mr. Weichert said. The trades weren’t intended to hide Portugal’s national debt position, he said.

The Portuguese finance ministry declined to comment on whether Portugal has used currency swaps such as those used by Greece, but said Portugal only uses financial instruments that comply with European Union rules.

Countries “look for things because it helps their arsenal of techniques used to reduce their budget deficits,” says James D. Savage, a University of Virginia professor who is an authority on EU budgeting. “The problem for Eurostat is the flourishing of new financial instruments and techniques. Member states are going to try to take advantage of them. There is always a catch-up game.”

Contagion issues have deeply concerned both policy makers and investors as the Greek debt crunch has unfolded over the past weeks. The cost to insure against a Greek default remains near record highs. Moreover, bond offerings from Spain, Ireland and Portugal in the past two weeks have succeeded primarily because they paid higher-than-usual yields.
…

It was a buying weekend for me. I don’t do this often. But my DVD player (I purchased new for $80 a few years back) in my Phoenix apartment quit. I think it was a power surge in one of the lightning storms last summer. Bought a Pioneer Blue Ray DVD player from Costco for $139. My TV is over 20 years old, but works well, so I don’t need the 1080i crapola.

Was living without a dining table for three years since my roommate moved out. So I got a wild hair and decided to buy a dining table. That set me back $700 or so, including delivery. The table is fine quality. I would go to Ikea for a cheapo table for my temporary address, but for my permanent address I need something decent and with decent quality. It looks beautiful. Oh the furniture store had a “going out of business” sale. Yeah, right. Don’t they all have a “going out of business sale every week?” Price don’t matter since I lived without a table for three years. But now it looks great. The dining chairs are of good quality too. Now the apartment is complete.

My rent will probably drop another $130 per month in October when my lease renews. More Option ARM and ALT A resets on the way for Phoenix. Shadow inventory will be released a bit too, to cause more prices to sink and more jingle mail.

* The Wall Street Journal
* FEBRUARY 22, 2010

Bailout Anger Undermines Geithner

By DEBORAH SOLOMON

WASHINGTON— Timothy Geithner’s role in calming the financial crisis landed him the coveted job of Treasury secretary last year. That same résumé is now dogging him.

In his next test, Mr. Geithner will find out this week how lawmakers are treating one of his main goals—revamping the nation’s financial regulations—when the Senate Banking Committee unveils its new bill. In Washington, where perception can take on the status of fact, the political woes facing Mr. Geithner are diminishing his authority.

Treasury Secretary Timothy Geithner toured a Philadelphia grocery store on Friday with Michelle Obama as part of an effort to refashion his public image amid anger over financial bailouts and banker bonuses.

His dilemma: The bank rescues he helped engineer averted economic collapse. Yet to some lawmakers, Mr. Geithner looks weak. His association with unpopular financial bailouts has become an albatross. His neutral rhetoric on bankers’ bonuses—the fat payouts are “very hard for people to understand,” he recently told CNBC—spurs talk that he coddles Wall Street.

Lawmakers have been bickering for months over Mr. Geithner’s regulatory revamp. Despite renewed confidence in the banks and a growing economy, Mr. Geithner gets little credit. His unwillingness to play the populist makes him an ineffective pitch man for an administration eager to defuse public anger over unemployment and the housing crisis.

To boost his image, Mr. Geithner is waging a charm offensive. On Friday he toured a supermarket in Philadelphia with first lady Michelle Obama to showcase efforts to reduce childhood obesity, an unusual event for a Treasury secretary. He demonstrated how a Treasury program offering tax credits in low-income communities can bring in businesses selling more nutritious food.

Mr. Geithner says even his wife has urged him to show more emotion in confronting the banks. His response: Doing so risks politicizing the Treasury.

Interviews with dozens of government officials show that Mr. Geithner has acted as a brake on administration officials seeking punitive action against big financial firms.

Last year, in a previously unreported move, he resisted efforts to oust Citigroup Chief Executive Vikram Pandit as a condition for more government aid, according to administration officials. He successfully argued against ripping up contracts that controversially allowed millions of dollars in bonuses to be paid to American International Group employees, stating: “This is not Bolivia,” according to two people who heard him say it.

Mr. Geithner also has pushed for banks to repay government funds (making them raise private capital instead) in defiance of some lawmakers and government watchdogs who said the firms should remain under Treasury’s thumb until they resume lending to help the economy.

“What we achieved in the financial sector was way above expectations,” Mr. Geithner said in an interview, pointing out “how quickly we restored confidence” in the financial system. “As long as I believe that we are making good judgments…and fixing stuff that was broken in ways that are going to make a difference, then I can live with the consequences.”
…

Given that the foreclosure crisis is over now, why aren’t the Fed and the Treasury winding down their unnecessary housing price support programs?

* FEBRUARY 19, 2010, 8:34 P.M. ET

U.S. Mortgage Delinquencies Edge Down

By JAMES R. HAGERTY

Fewer people fell behind on their home-mortgage payments in last year’s fourth quarter, a sign that the default crisis may be peaking, the Mortgage Bankers Association reported Friday.

Separately, the Obama administration announced plans to provide $1.5 billion to housing agencies in five states hit hardest by the crisis that would fund programs to help people avoid foreclosure.

President Barack Obama, left, campaigned Friday for Sen. Harry Reid in Nevada, where he also unveiled new funding to prevent foreclosures.

The trade group said 3.63% of mortgage borrowers were between 30 and 59 days overdue in the fourth quarter, down from 3.79% in the third quarter, based on its quarterly survey of lenders. Normally, that rate rises in the fourth quarter as heating bills and holiday expenses cause some people to fall behind.

The decline in this category of newly delinquent borrowers reflects a drop in the number of people losing their jobs, said Jay Brinkmann, the MBA’s chief economist.

But the overall number of people in trouble with their mortgages—those behind on payments or in the foreclosure process—continued to grow. At the end of the fourth quarter, 15% of home loans on one-to-four-family homes were in that category, up from 11% a year earlier. For the latest quarter, that equates to about 7.8 million households.

“We have fewer problems coming into the system,” Mr. Brinkmann said. But “we still have a big problem we have to deal with.”
…

Jim Moret, Chief Correspondent, Inside Edition and author of “The Last Day of My Life”

Hopelessness, Despair and the Winter Olympics

Posted: February 21, 2010 07:17 PM

A man in Ohio bulldozes his house to prevent the bank from taking it back in foreclosure. He said he was literally pushed to the brink after years of fighting with both the bank and the IRS. In Texas, a software engineer takes his own life and kills an innocent man, also injuring thirteen bystanders, when he intentionally crashes his private plane into a building where nearly 200 IRS employees work. In his suicide note, he ranted about the IRS, politicians, and corporate America’s “thugs and plunderers,” who are rewarded with government bailouts.
…
I wonder if (these acts) reflect a broader undercurrent of growing disillusionment and frustration in these challenging times.
…

Nikkei up 2.74% at this time of posting for its Monday Feb. 21 trades.

One fairly obvious way to cut public school education budgets: Reduce required years of schooling. If this idea catches on, perhaps we soon can get back to the America where an 8th grade education was enough to get you through life.

Political Hotsheet
February 16, 2010 3:40 PM
Utah State Senator Proposes Making 12th Grade Optional
Posted by Spencer Magloff

(CBS/iStockphoto)

Reductions in education spending traditionally take the form of cutting teachers, administration or salaries. But with Utah’s $700 million deficit lingering over lawmaker’s heads, a new proposal has recently attracted as much curiosity as disdain: Make 12th grade optional.

State Sen. Chris Buttars from the Salt Lake City suburbs told the Public Education Appropriations Subcommittee earlier this month that many students squander away their senior year, making it an unnecessary expense and another one to alleviate the large budget shortfall. He said eliminating 12th grade altogether would have saved $102 million.

“You’re spending a whole lot of money for a whole bunch of kids who aren’t getting anything out of that grade,” he said. “It comes down to the best use of money.”

Buttars later scaled back his proposal to just give students the option of skipping 12th grade if they finish their requirements in three years, according to The Salt Lake Tribute. That proposal could reportedly save around $60 million.

It’s unclear how many students would opt for early gradation (SIC ) if given the option.

“What I’m trying to do is find that money for the $700 million ongoing shortfall in ongoing money, and at the same time try to keep as many dollars as possible in the program,” Buttars said last week at an education funding subcommittee hearing, reports station KSL-TV in Salt Lake City. “This does that. Now, to what extent we don’t know because it’s their option.”
…

I wish that when ever I encounter a citizen paid “worker” they would have to legally hand me a card that gives their “vitals”:

Hi I’m Cindy
Attitude profile: “I could give a flying #!*k
Job: STATE DMV Mid level management / supervisor
Age 53
Salary W/ benefits: $89,000
Vacation time: 20 days per year / 28 weeks accrued
Sick Days: 8 hrs per month / 42 days accrued
Holidays: 12 per year
Work week: 5 days 9-5
Actual work week: 2 days 7 hrs / 1 day 6 hrs / 1 day 4 hrs / 1day 4 hrs work + 4 hrs training
Pet peeve: citizens with “attitudes” & 0 trans fat laws
Automobile: Mercedes 500 & moped (when gas is above $3.90 per gallon)
Retirement date: maybe next year or perhaps…Never!
Last vacation: Mexico / breast enhancement
Waist size: “Run Hwy…RUN!

From The Sunday Times
February 21, 2010
Obama’s ‘Chicago mafia’ blamed for paralysis at the top
Christina Lamb in Washington
…
“This administration has managed to divide its friends and unite its enemies,” said Steve Clemons, director of the American Strategy Programme at the New America Foundation.

He and others lay the blame on the Chicago team, advisers from Obama’s adopted city. “Obama’s West Wing is filled with people who are in their jobs because of their Chicago connections or because they signed on early during his presidential campaign,” complained Doug Wilder, who in 1990s Virginia was America’s first elected black governor and was an early backer of Obama. “One problem is they do not have sufficient experience at governing at the executive branch level. The deeper problem is that they are not listening to the people.”

Obama relies on five people, four of whom are Chicagoans. They are Rahm Emanuel, his chief of staff, David Axelrod and Jarrett, his political advisers, and Michelle, while the fifth kitchen cabinet member is Robert Gibbs, his chief spokesman, who comes from Alabama.

The president consults them on everything. Military commanders were astounded when they participated in Afghanistan war councils and referred to them as the “Chicago mafia”. It was this group that inserted into Obama’s Afghan surge speech the deadline of July 2011 as a date to start withdrawing.

With Democrats fearing big losses in the mid-term elections in November, the knives are out for Emanuel, whose abrasive manner and use of profanities have won him few friends. Although his job is to deflect criticism from his boss, Rahmbo, as he is known, seems to have gone over the top.

The Wall Street Journal reported him losing his temper at a strategy session in August and referring to liberals as “f***ing retarded”. He is said to have sent dead fish to a pollster whose numbers he did not like.

Leslie Gelb, president emeritus of the Council on Foreign Relations, called on Obama to remove Emanuel, arguing that he needs someone who knows how to navigate Washington or will end up being no more than a speechmaker.

“No one I’ve talked to believes he [Emanuel] has the management skills and discipline to run the White House,” he wrote in The Daily Beast.
…

The United States of Chicago

Bill Thomas

Sunday, February 21, 2010

The Obama administration is tanking, and Democrats and their media flacks are blaming everyone but themselves. Talk-show host Bill Maher zeroes in on the basic theme: Americans “are not bright enough to really understand the issues.”

“The biggest culprit in our current predicament,” as Jacob Weisberg sees it in Slate, is “the childishness, ignorance and growing incoherence of the public at large.”

In other words, the same voting public that fell for “hope and change” and put Barack Obama in office a year ago suddenly is too stupid to notice the genius at work in the White House.

With Obama not inclined to do what presidents are supposed to do, namely keep the country solvent and secure, lots of people are wondering what gives. Talk about dumb.

Some on the extremes, as Obama himself noted, believe his health care reform program is part of a “Bolshevik plot” to wreck the nation’s economy. Others, not smart enough to think in those terms, are just afraid of losing their jobs, homes and life savings.

Obama learned his politics in Chicago, where complainers are ignored. But in Washington, Democratic Party officials are concerned his “transformative” presidency may be transforming millions of former supporters into an angry mob.

The latest polls shows the party has something to worry about. Obama’s job approval numbers are in free-fall, from over 62 percent early last year to 47 percent last week. On top of that, surveys of voter sentiment suggest the 2010 congressional elections will see GOP gains. Scott Brown’s win last month in Massachusetts took away the Democrats’ 60-vote majority in the Senate, forcing the administration to work with Republicans, something it was planning to avoid.
…

Here is a contrarian signal of an incipient l-t T-bond rally if ever there was one: A MarketWatch article pimping bets against Treasurys.

ETF Investing

Feb. 21, 2010, 12:01 p.m. EST

ETFs that bet against Treasurys profit on higher yields
Cracks in government bond market open door for bond bears

By John Spence, MarketWatch

BOSTON (MarketWatch) — Leveraged exchange-traded funds geared to profit from falling prices on long-term Treasury bonds have performed well in February from rising yields, as markets worry about U.S. spending, deficits and inflation.

These bearish or inverse ETFs essentially let investors bet against longer-dated Treasury securities, but they are risky and require close monitoring.
…