Bits Bucket For February 24, 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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Name:Ben Jones
Location:Northern Arizona, United States
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Commercial Mortgage Default Rate in U.S. More Than Doubles
Feb. 24 (Bloomberg) — The default rate for commercial property mortgages held by U.S. banks more than doubled in the fourth quarter and may reach a peak of 5.4 percent at the end of next year, according to Real Capital Analytics Inc.
The default rate for loans on office, retail, hotel and industrial properties surged to 3.8 percent from 1.6 percent a year earlier, the New York-based real estate research firm said yesterday in a report. The default rate for loans on apartment buildings climbed to 4.4 percent from 1.8 percent.
“The level of distress continues to rise irrespective of improving economic trends,” Sam Chandan, Real Capital’s global chief economist, said in a telephone interview.
Business
One in four Wisconsin banks lost money in 2009
By Paul Gores of the Journal Sentinel
Posted: Feb. 23, 2010 |(24) Comments
Bank Winners, Losers in 2009
Highest net income:
Tri City National Bank: $22.1 million
Bank Mutual: $14.3 million
Natl. Exchange Bank & Trust: $13.1 million
First National Bank (Waupaca): $12.7 million
Waukesha State Bank: $11.3 million
Biggest losses:
M&I Bank: -$735.6 million
AnchorBank: -$158.7 million
Associated Bank: -$117.6 million
Guaranty Bank: -$52.6 million
First Banking Center: -$21.8 million
One of every four Wisconsin banks was unprofitable last year, as losses from bad loans mounted in the weak economy, and industry analysts say 2010 doesn’t hold out promise of a strong rebound.
Seventy-one of 281 banks based in the state, or 25%, lost money in 2009, the Federal Deposit Insurance Corp. reported Tuesday. That compares with 46 of 283 banks that posted losses in 2008, roughly one of every six, or 16%. In contrast, in 2005 only 2% of banks in the state were unprofitable.
The final quarter of 2009 was the worst period of the year for some state banks, with 83, or almost 30%, recording a loss.
The state fared better than banks nationally, however. Nationwide, 29.5% of banks had losses in 2009. The FDIC also reported that its “problem list” of banks in the U.S. had grown to 702, up from 252 at the end of 2008. The FDIC doesn’t identify individual banks on the list.
…and that’s a fact Jack !
http://tinyurl.com/ybn9ljy
If banks had to use honest accounting that reflects non-performing loans, instead of finding creative and wishful ways to hide them from quarter to quarter, the number of problem banks would soar.
“The level of distress continues to rise irrespective of improving economic trends,”
I can explain:
“The level of distress continues to rise irrespective of a fabricated stock market rally and improving fake government GDP and unemployement numbers”
Let’s see……..add the eight and five, carry the one……almost 1.1 billion dollars worth of losses.
And that’s the top five banks ONLY.
A trillion here, a trillion there, and you’re talking some real bucks.
May I suggest that the management of all money losing banks be replaced with monkeys throwing $hit at dartboards.
May I suggest that the management of all money losing banks be replaced with monkeys throwing $hit at dartboards.
That’s kind of insulting to poo-throwing monkeys, don’t you think?
It wouldn’t be a promotion. More like a lateral transfer.
Just remember, a closely-watched pot never boils over.
“The thing most pundits don’t understand, and therefore their readers don’t understand, is that the dollar has no other direction to go in the long run but down.”
~Chuck Butler
But in the long run we are all dead.
People live in the Now, whether they want to or not. The Now is where it’s at, it’s where we are.
And right now, at this very minute - the place in time where all of us live - the dollar is the place to be.
Combo,
I agree that now having USD is a beautiful thing. I’m currently looking at snowmobiles and to say it’s a buyers market would be an understatement. Your dollar position may eventually prevail but again, being all-in in any one position is dicey.
I have learned through the years, as I’m sure most of our HBB’ers have as well, that trying to squeeze the absolute top or bottom in anything is a loser’s game. I’m not calling you a loser. For me though, I would rather be early than late. I have zero faith in our leadership’s ability to stop the crackhead fiscal policies. I think the open market will eventually correct it and when it does it will be swift & ugly imo.
“For me though, I would rather be early than late.”
Ditto. It has often been noted that the stock market always goes up, in the long run. Perhaps if you diversify some of your static dollar holdings now into some static stock market investments, you will be insured going forward whether or not cash is king forever.
Full disclosure:
1) I use a dumb lazy portfolio strategy to do this.
2) I check my statements annually, at most, as I have more interesting things to do day-to-day than to replay Ebenezer Scrooge’s life.
It can become a bit overwhelming, can’t it?
Have you forever given up the short-term trading of a few years ago?
We’ve been out of the stock market (long and short, with the exception of some retirement funds) since October 2008, and out of foreign bonds since last October/November. This is the first time in years that I find myself utterly unable to decide what to do next. Trying to divine what will happen to any given asset or investment (including cash) over the next 5-10 years has never been so difficult, IMHO.
Your diversification method would probably be best…but I’m a chicken.
IMHO unless you have huge sums that can gain huge amounts even at low return rates, you’re better off with cash. Cash in the hand can get goods at sale prices and allows you to not have to pay interest on larger purchases. When opportunities arise, you are in a position to take advantage of them, including moving or seeking further education. For the average joe/jane, that seems like a much better return on their money and a much less chaotic way of life. Has to be worth something.
“But in the long run we are all dead.”
Not me !…I’m going to live forever or die in the attempt.
Catch-22
What? And he knows this?
Then why not short the dollar? Why tell everyone? In my experience, when there is a money making opportunity, not everyone knows, hence why not everyone and only a short few are making money.
Why do people have to act like they know everything?
Anyone think there is any truth to this?
Why do people have to act like they know everything?
Anyone think there is any truth to this?
I sure don’t know. That’s why people with wealth need to be diversified across asset classes and even countries if they can.
Everything points to a dollar drop except it is valued against other paper currencies as well. During a crisis the world runs to the dollar but the dollar is based on bad fundamentals. That’s why real estate, (at the right price) gold/silver and commodities play a role too. So does staying in shape as some posters advise and investing in one’s skills.
Man, who knows what the heck is going to happen…
If Europe implodes, there will be a rush to the
dollar. A shaky safe haven is better than none.
JMHO.
If Europe implodes, there will be a rush to the
dollar. A shaky safe haven is better than none.”
yep
why should Europe implode? Germany was till last year a exporter number one in the World( read this like they produce something tangible of value. ) till China is the curent leader now. France don’t have even 5% drop in the RE prices ( becouse there is simply no bubble and banks are into much much better positions than US “too big to fail”) . RE prices in Spain are not gone realy down much even with 20% unemployment ( most likely because the lending standards were differnt than us in US) Greece is as big as Oregon and that irelevant to the health of the big and even like that is in much better budget situation than the so called Golden state. Portugal may have budget deficit as US but much smaller debt burden, so Irland. UK is not into the euro zone so its problems ( i believe worse than us) is irelevant to the future of euro . How the heck this imposion of Europe is happening again , my dear?
Ua-ha-ha!
Ba-ha-ha!
Well “shorting the dollar” could have short-term spikes in the other direction, and leave you having to cover a massive amount of debt.
You need something akin to a CDS against the dollar that has limited downside.
(Read the excellent book “The Greatest Trade Ever” to see how a few people made billions betting against mortgages, with limited downside.)
“Why do people have to act like they know everything”
I dunno
What? And he knows this?
Then why not short the dollar? Why tell everyone? In my experience, when there is a money making opportunity, not everyone knows, hence why not everyone and only a short few are making money.
Why do people have to act like they know everything?
Anyone think there is any truth to this?
Stp, and others on this blog who like to crack on bankers/economists/etc. who make money promoting a given position -
Why is this an invalid thing? Chuck does short the dollar, in the form of investing on foreign currencies, PM’s, etc. He encourages others to do the same. He makes money when others do this, through his bank.
Does this make his position invalid? No. He backs up his positions with a lot of good information.
Same for other economists, banker, or any salesperson for that matter. Just because a salesperson has a vested interest in selling you a given product, doesn’t mean that product is bad.
I would actually seriously question any product that *doesn’t* have anyone with a vested interest trying to sell it to you. If no one has a vested interest in it, that raises red flags for me.
Yes this is even true for Ponzi schemes. Madoff of course had a vested interest in selling his investments. His investments were bad. So therefore the converse isn’t necessarily true - just because someone has a vested interest in something doesn’t mean it’s good. That’s why it behooves us to look under the hood ourselves whenever anyone’s trying to sell us something; to do additional research beyond what information we get from the salesperson.
To your last question - “anyone think there’s any truth to this” - I’d say check out his Daily Pfenning letter for yourself, and make a judgment call. Chuck’s a bit…. flaky…. but I personally think he’s right on a lot of things. He’s definitely knowledgeable in how currencies work, if not correct in his predictions (though from what I see he’s generally fairly correct most of the time).
Soros has shorted the dollar, that’s why he supports the Marxist Obama.
Pismoclam,
Soros called gold a bubble, then doubled his bet on gold EFTs.
Watch what he does, not what he says. And to correct you, he doesn’t “support” Obama. He owns him.
wmbz-
Your post prompted me to google Chuck Butler. Mr. Butler is the president of Everbank Global Markets and writes a daily newsletter, Daily Pfennig.
Here’s my question, wmbz: what is your opinion of Chuck Butler? How long have you been reading him?
Thanks.
I have small interest paying checking account with Everbank, have had it for 5 years now. Been very happy with them. Chuck Butler is one of the sharper currency annalist around, as far as I am concerned.
I am not a currency trader, but I like to try and keep track of what is going on with the monies of the world.
What currencies is the Dollar going to drop against??
The extra strong Euro ?
The stable (pun) Russian ruble ?
The Scan/Baltic currencies ?
Maybe some further drop against the Canadian Dollar, the Yen and Brazil.
The Dollar could drop against China. However, they might fight against that by throwing several hundred billion of reserves to lessen the fall.
this china bubble is about to pop. Brazil and australia are going to fall when the air comes out of commodities
I don’t see the commodities bubble popping anywhere. Just look around yourself. We in the developed world are consuming more “stuff” than ever before, certainly more than say 2 decades ago. We have a lot more “things”; these “things” are bigger than they used to be (if they existed back then); and these “things” don’t last as long. And the developing world is catching up with our levels of consumption (maybe not our currentl levels but maybe 1970s levels, and there are a couple of billion people in that bucket).
And that’s only “stuff”. Then there is food and all the inputs that go into food production. Food consumption is increasing higher than the world population growth rate which is already nothing to sneeze at. More food inputs are needed to coax ever-increasing yields from the same plot of land (and often shrinking plots of land thanks to urbanization, land degradation and removal of subsidies that causes entire farms to wind up).
I can only see an increasing need for commodities. Now the markets might have priced it in already, but this is the definite long-term trend.
We also need to keep in mind that the U.S. has only 5% of the world’s population. While of course we are the biggest consumers by far; with about 30% of the overall economy - the rest of the world is slowly catching up. Currently even a 15% drop in U.S. consumption is offset by just a 5% gain in consumption in the rest of the world. Over time this delta will get larger - e.g. when the U.S. shrinks to 20% of the world economy (it will) - then a 15% drop in U.S. consumption would be offset by only a 3% gain in consumption in the rest of the world, etc.
I’m looking at buying a couple of buildings
that a main grocery story chain leases, they
serve the outlying regions far from town and
both have a market cap of better than 10%.
Plus I’m looking a two local bars that have
long established clientele with an even better
cap. The owners are all older and tired and
want to finally retire. The grocery chain
will give me locked in steel 20 year leases.
My reasoning is that no matter what the economy does, people have to eat and some
will want to drink. My father, who grew up
in the depression told me that people always found enough money for booze.
Thoughts?
Rancher, I think your idea looks okay on the surface.
But, being an HBB-er, I’ll have to warn you to crunch the numbers thoroughly. We don’t want you getting into a bad CRE deal.
Buy a gun/ammo store, and you’ll have all the bases covered…..
Rancher,
1. You know or should know the outlook for commerical buildings and potentials in your area better than we do. A couple of second opinions from local or surrounding businessmen might be a better sounding board than here.
2. You either run the bars yourself or hire some really good bartender/manager won’t that don’t bleed you dry and ruin you. Even running or taking over an established bar is work, pr and risk. The key is usually good help.
I knew two guys that bought what they thought and claimed was a goldmine bar. They spent a fortune gentrifying it and lost their butts after a nearby company folded tents and left town. Of course, a pretty face can sell a lot of drinks and have the local boys stopping by as regulars. The bar and resturant businesses loose money as well as make it. They can be more of a headache that what they’re worth.
One business friend recently closed his bar/restuarant near Milwaukee and claimed that the new local Smoking Ordinace put him out of business. His large clientele of MD’s, nurses, hospital workers and lawyers just went across to a Milwaukee bar to smoke and drink after work.
Good luck
Rancher:
In a depression, cash is king and you want to be out of debt. So I’d say that if you can do it without taking on a loan, then I’d consider it.
The trouble is that you own the buildings, and not the store. You can absolutely expect the story to run into problems in the future. The first problem is when credit collapses. So much of our stuff is based upon Just-It-Time delivery, which in turn depends on credit. So do keep enough cash around to get you through.
My Grandfather ran a store during the Great Depression. His philosophy was “People always have to eat”. This worked out well for him. But he lost his original store, due to bad debts. People who owed him money would walk right by to go to Safeway where they could buy the same goods for less.
Expect no quarter if you run into trouble.
Fiji-Island wild-boar tusks are supposed to outperform all other currencies. I am long the tusks against a short position in abalone shells in a carry-trade move hedged by short dollars against long monopoly-money as these postions are expected to converge in an arbitrage-play.
Fiji Tusks? Damn, I sold my FT’s too early! My play is Guamanian Latte stones and Yap round stones.
Investing in Yap round stones adds a whole new meaning to the concept of a “carry trade”.
What if we are running out of abolone? Wouldn’t the value of their shells increase?
Yeah, but that still doesn’t mean that we’ll get the gold in the downhill currency race.
Well, I’m probablu not going to be around long enough to see it but I could see the good ole stubborn people that got kicked out of every decent part of europe, africa and asia dig in their heels on debt. Pay everything the hell off. Develop energy and trade independance and presue a strong dollar policy.
Heck, I feel that is just as likely an outcome as anything. We’ve been in outward mode for a long time. We could just as likely concentrate on independance for the next three decades.
The tea party people, protectionist democrats and others are all signing that tune.
Norwood to shutter San Antonio plant, lay off 345 workers.
San Antonio Business Journal 2-23-10
Norwood Promotional Products LLC has initiated a consolidation of the company’s manufacturing operations that will result in hundreds of lost jobs for San Antonio.
The consolidation, part of a cost-saving effort, affects 345 employees in San Antonio. Local employees will be given first consideration and relocation assistance if they qualify for open positions outside of San Antonio.
BIC Advertising & Promotional Products is the parent company of Norwood.
BIC Graphic manufactures BIC pens and related writing products. Norwood markets nearly 5,000 promotional items, such as employee awards, recognition and gift bags; calendars and planners; office magnets and badge holders; and glasses and mugs.
I think the interior of my GM car is made out of Norwood.
It’s “Neither Plastic NorWood”.
No, that’s a recycled-cardboard dash. The seats are stuffed with crumpled-up worthless bonds.
Spfffffffffff……
Just spit out my coffee in laughter@@@
The seats are stuffed with crumpled-up worthless bonds.
Ah! That’s why they’re so soft!
Pimco says their ‘junk bonds’ are the cat’smeow.
Sales sales sales make $100K in your first year….hundreds of these “jobs” on CL everyday in NYC.
The economy must be so bad even the spammers quit replying to resumes on CL.. I used to get 40-50 or more “earn what you are worth” responses a week….last time i posted my resume i got 3.
A jobhunting friend of mine said the same thing… even the temp agencies who pester almost everyone who posts on Monster, Careerbuilder, etc. don’t bother emailing anymore.
No employees = No employee awards programs
Now if I can only “short” the “Roach Coach”
Really long posts from newspapers etc, ain’t going through…
Ben-
Is there some threshold where the size of the posts begins to slow down the system?
Wordpress moderates up any long post as it may be spam. But I don’t want to tick off the press by posting entire or near entire articles, so I delete them. It’s best to use a bit of the report and post a link for those who want to read more.
and how long have you been telling people this? lol
wmbz,learn to linky please…
Thank you Mr. Ben for that novel idea…paraphrase & post a link…now who do we know that hardy ever posts a link? hmmmmm…
It’s a mystery Charlie Brown!
I don’t know… sure beats some dude ranting against the same cartoon-caricature bogeymen, day after day, month after month. At least I usually learn something from the news posts.
But, everything within reasonable limits as Ben says.
Perhaps host a link up top to a page with the recommended posting guidelines. Then again, you might need a lawyer to review the page and hope your not sued because you either did or didn’t include something that the press, etc felt should either be included on the page or not.
Thanks Ben,
You do a great job and we know that it takes a lot of time and effort.
And if you haven’t been to the PayPal link to show Ben some monetary love, you should get there pronto-pronto.
It’s not the size of the post, but the magic within it…
The climate scientits have teamed up with the real estate scientists. Hide the decline…..
“Home prices slip, but annual price decline slows
The S&P/Case-Shiller home price composite index of 20 metropolitan areas fell 0.2% in December from November. Year-over-year, the index was down 3.1%.
Still, national home prices were down 2.5% in the fourth quarter of 2009 from 2008, a big improvement from the 19%, 15% and 8.7% declines in the three previous quarters of 2009. “
(The Wall Street Journal)
Sales of new single-family homes in the U.S. sank 11% in January to a seasonally adjusted annual rate of 309,000. It was an unexpected tumble that sent sales to their lowest level since records began in 1963 and wiped out much of the progress made in the last year. Economists surveyed by Dow Jones Newswires had expected sales last month rose 3.8%. Sales in December fell 3.9%, revised from an originally reported 7.6% decline.
Move on nothing to see here!!
There’s that “unexpected” again!
I don’t understand why people out of work in the Great Recession aren’t rushing out to buy overpriced “assets” to make the banks rich!? How strange it is!
And that was credited with a nearly 100 point rise on the Dow. The assumption is that it would scare Crazy Ben into keeping rates low for another few months. So much for the “rational markets” theory.
It was an unexpected tumble…
Man I’m getting drunk. I might be headed for an unexpected tumble.
What’s amazing is that from the headlines I was perusing earlier this week, it sounded like the market was steadily improving! Unbelievable.
real estate scientists
Not that’s my definition of a “dismal science”.
It’s a B.S. of a whole different sort.
This sure as hell can’t hurt their news division…
ABC restructures news, aims to cut 300-400 jobs
LOS ANGELES ~ Feb 23, 2010
LOS ANGELES (Reuters) - Walt Disney Co said it was restructuring its ABC News division, and a source familiar with the situation said the company aimed to cut 300 to 400 jobs or more than 20 percent of its staff.
An ABC spokesman said the division employs about 1,500 people.
In a memo to staff, Westin said on Tuesday the operation needed to re-think how it carried out its role and anticipate change rather than just respond to it.
ABC restructures news, aims to cut 300-400 jobs
It’s not good to be losing so many reporters and newspapers at a time when corporate interests are tightening their vice-grip on our government.
Agree. That’s why blogs such as this one exists; They fill in the gap.
No longer does the MSM get to enjoy the position of deciding what is news and what isn’t news. Now the readers get to have a say.
Agree. That’s why blogs such as this one exists; They fill in the gap.
I think (to an extent) and hope you are right but I’ve read that the newspapers especially were responsible for most investigative journalism. I don’t know how blogs will fill this crucial role in a democracy.
But I sure hope they can somehow, someway and someday soon.
I see lots of investigative journalism right on this blog from informed posters who can report about the inside of a story.
right combo,
luv the feet on the ground observations.
a poster’s credibility only comes over time though
Feet on the ground? No, pants on the ground!
lol, Bill.
Fortunately, Mickey Mouse is still running the news division.
You be lookin’ like a fool……..
The problem of course is
How many of us go to MSM post a link and an opinion vs getting a source to leak info, or filing a freedom of information act request, or any other form of investigative journalism.
Very true.
As much as we complain about the MSM, they have helped us gain credibility WRT our posts. Whenever someone posts something rather startling, we ask for a link. To whom/what will we link if the MSM is dead?
The Philadelphia Inquirer’s legendary reporters Bartlett and Steele won Pulitzers for their investigative journalism.
As far back as 1971, they were uncovering FHA financed
flipper abuse.
Today’s Inquirer is not living up to its storied traditions.
Today’s Inquirer is not living up to its storied traditions.
Very few news organizations in our Brave New World are living up to their storied traditions. Investigative journalism in particular takes a hit, as it requires skill, patience, accumulated knowledge, and relatively long lead times — virtues in short supply in an environment increasingly devoted to superficial 24-7 content generation.
(The linked article is great, BTW. Punchy, fact-filled, and no BS.)
We all had newspaper subscriptions, I recall anticipating the morning delivery, eager to read the latest installment in a series of exposés.
the writers were recently interviewed by the Philadelphia Weekly:
“Barlett adds: “The Inquirer of the 1970s, 1980s and 1990s was a unique situation. It was, quite frankly, ‘the place’ to work as a reporter or editor. There was an unmatched level of energy and enthusiasm and a shared commitment to produce not just the best newspaper possible, but one that stood apart from all others. …”
I’ll get the Sunday Inky from time to time, more for the Lifestyle section and to catch up on local goings-on.
When I’m Back East visiting the family, I am pretty much forced to read the Inquirer. Because reading the newspaper what the Slim family likes to do around the breakfast table. And we get into some pretty lively discussions about what we’re reading.
But I have noticed that the modern-day version isn’t quite the same as the one I grew up with. Been a lot of dumbing down, unfortunately.
By way of comparison, a family friend was a business/economics columnist for the Inquirer. IIRC, he won the Pulitzer during the 1960s. The Slim family consensus (which also was that of a lot of other Philly area folks) was that it was well deserved.
None of their current biz/econ writers could carry that guy’s typewriter ribbon.
Great find X-philly!
You should also look into the disaster known as HUD.
X-philly,
That was a fantastic article! Thank you for posting. It just goes to show how much things really don’t change. It could easily have been written last year.
An excerpt:
New Kind of Profiteer
During this period the slumlord began to vanish – that faceless figure who owned scores of ghetto dwellings, jammed two, or three or more families into single-family houses and charged whatever rent the traffic would bear.
At the same time, under the new Federal mortgage programs, another, a more hardy breed of profiteer emerged – the real estate speculator.
And statistics indicate he is more active in Philadelphia than any other city in the country with the possible exception of Detroit.
The speculators customers are the same people who rented from his predecessor, the slumlord. They are largely black and Puerto Rican. They have never owned a house before. Most set out to rent – rather than buy – and ownership was urged on them, sometimes with disastrous results.
The new housing programs made it easy for speculators to buy rundown houses cheaply, make a few cosmetic repairs and sell them at sharply inflated prices with FHA insured mortgages.
The Problem Wasn’t Solved
As for Congress’ goal to bring home ownership to the poor and halt the growth of the ghetto, something clearly has gone awry.
The boundaries of Philadelphia’s ghetto continue to expand, the houses continue to fall apart and many of the new owners are less than enchanted with home ownership.
———————–
Sometimes, I wonder if all these cash buyers we hear so much about will end up being tomorrow’s slumlords…and we will be the detested renters who cram into homes with multiple families.
Only 10% of the info on this blog is uniquely new news supplied by first hand accounts. The decline in investigative reporting and financial pressures will eventually choke off the supply of external news feeds to the blogs and what will replace it will be any-thing-goes internet echo chambers. Anonymous raging egos hurling epitaphs across the intertubes… Yeah I’m just jumping for joy, NOT!
To Ben’s point about posting, I watch how he does it and follow his style. 1 or 2 paragraphs + a link gets it done.
There will still be government reports….
The decline in investigative reporting and financial pressures will eventually choke off the supply of external news feeds to the blogs and what will replace it will be any-thing-goes internet echo chambers.
Techdirt explores this sea-change on a regular basis.
A few things from there that are interesting to consider:
1)Newspaper organizations (partially) exist to sell paper. They have to put something on the paper to justify their increased price over blank sheets.
2)Printing and delivering newspapers is EXTREMELY expensive contrasted with publishing a web page.
3)Many newspaper businesses experiencing trouble are hurting because of DEBT.
4)Historically, newspapers are only marginally concerned with “selling news to readers”. They are much more interested in “selling readers to advertisers”
And certainly more history lessons are required.
“Westin said on Tuesday the operation needed to re-think how it carried out its role and anticipate change rather than just respond to it.”
How about just reporting the news rather than spin it or trying to create it out of thin air? How about asking the tough questions? How about digging deeper? No free lunch for public officials be they on the right or the left or the middle.
How about just reporting the news
Expensive.
rather than spin it or trying to create it out of thin air?
Cheap, plus keeps corporate masters (read: ad $$$) happy.
Public officials already get free lunch — from the same corporate masters. We’re doomed.
Public officials already get free lunch — from the same corporate masters. We’re doomed.
Only if we want to be.
Here is a crazy idea
1. Fire all of your high priced TV heads that are not journalists.
2. Cut CEO compensation
3. Use that pile of money to hire real investigative reporters.
4. Report actual news.
+1000 measton. Exactly, what I was thinking. You could hire 10 top-notch investigative reporters (plus expenses) for one cue card reading news anchor.
I’ve always thought that sport and entertainment people are so enamored by fame that they could be paid $100k p.a. and they’ll still do the job.
Wonder why the entertainment industry hasn’t figured that out yet?
Sports and entertainment is an industry of strictly “who you know.”
“Report actual news” or in other words, report balanced news.
This is a key part of their demise. Depending on your persuasion the MSM basically trumpets the same stories with the same take. Where do they get their marching orders? Presumeably from the NY Times or the Washington Post.
Fox News is a lot more balanced, they attract more viewers and they sell more advertizing. Maybe you think the Fox News viewers are looney or (fill in the blank), but they’re a huge % of the population as ratings are starting to show.
Balanced? Get real.
Not to say that the others are either. You have to watch all of them to get an approximation of the “real story”
“Fox News is a lot more balanced, they attract more viewers and they sell more advertizing.”
Oooh-wee, that was a humdinger! Just when I start to get depressed with the economic news on this blog, the Lip comes in with a great joke. You made my day.
4. Report actual news.
This would work great if the average person was more interested in “actual news” than in American Idol.
“Actual news” doesn’t video well. How many times has an Action News Camera actually caught footage of something happening?
All you ever see is the scene afterwards, think police tape and flashing lights on cruisers, perp-walks and the heavily-edited recollections of stupefied neighbors.
A lot of news is encoded in piles of paper (bonds, bills, reports, etc) which just can’t be portrayed in a 30 second spot on the evening news.
Why do we allow these companies to continue to have access to public airwaves without properly functioning news divisions?
What are they doing to serve the public interest that justifies free access to public airwaves?
Great question. Is there a legal aspect to this? I.e. can we form a class-action lawsuit to address this issue?
We means the public, but maybe it’s time for the HBB to step up to the plate.
Well, it does cost a lot of money to send 3-4 people on a news shoot that may or may not get aired.
You can get by with 2, but its hard with 1 person to drive the van to the story, find parking, shoot and edit the story, then upload it to the main server from the van…but I guess that is the ultimate cost saving goal.
At least I have a chance now to help rebuild an internet radio station:
http://www.nytalkradio.net
Does this mean you got a job there? That would be great!
I got some news for ABC..
For news to have value it must be about something that matters to me. It must impart some knowledge that is beneficial to me in my life. It might somehow keep me out or trouble, further my progress, or inform me of opportunities that I’d be interested in.
By that measure, around 1% of the news is worthy of my time. One out of 100 news reports, one line in a 100 line story, or one minute of a 100 minute broadcast would be sufficient to get the useful news across..
The 99% remainder of the “news” is roughly 20% subjects that do not affect my life in any way, and 79% worth of fluff, entertainment, opinion, attempted manipulation, outright pandering, appeals for my support, political and otherwise, and advertising.
I strongly suspect that one might live a full, productive life in a big city and never watch a news broadcast, read a paper or turn on a radio, and not suffer in the least for being so utterly uninformed.
If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.
Thomas Jefferson
I strongly suspect that one might live a full, productive life in a big city and never watch a news broadcast, read a paper or turn on a radio, and not suffer in the least for being so utterly uninformed.
I suspect that’s quite true for some number of people. But can we collectively do that indefinitely without consequence? I think we are increasingly seeing the consequences of being broadly uninformed.
OMG, Disney has a News Division!!
Mickey: “And now the business news will be brought to you by Donald Duck”
Donald: “In today’s testimony chairman Bernanke quack..quack…quack…”
IIRC, 5 corporations own all of the MSM in this country.
No wonder their product sucks.
Fed’s Bullard: Will “try out” discount rate level.
Feb 23, 2010
RICHMOND, Va., Feb 23 (Reuters) - The U.S. Federal Reserve may not have to raise its emergency lending discount rate to a full percentage point above the interbank fed funds rate to normalize lending, a senior Federal Reserve official said on Tuesday.
“We’ll try out this 50 basis points (differential between the discount rate and the fed funds rate), we’ll see how it goes,” St. Louis Federal Reserve Bank President James Bullard told reporters after speaking to a business group.
“It’s not clear that you need the full 100 basis points to make it enough of a penalty rate so that banks don’t use the discount window for ordinary lending,” he said.
20,000 expected for five-day mortgage modification marathon
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 6:04 p.m. Tuesday, Feb. 23, 2010
By Tuesday, 7,000 people had registered for the free marathon sessions organized by the Boston-based Neighborhood Assistance Corporation of America, or NACA.
Walk-ups are also welcome, and considering turnout at the non-profit group’s 12 previous “Save the Dream Tour” stops, a lengthy queue may start forming long before Thursday’s 9 a.m. start.
“The convention center says they are getting calls from all over the country,” said Darren Duarte, communications director for NACA’s national office. “The hope is that with us going 24 hours, the lines won’t be as bad as they usually are.”
NACA tries to conveyor-belt the process with an estimated 320 counselors on hand at its “Save-a-Thons.” Representatives from major lenders will also be at the event.
About 30 percent of homeowners usually get a reduced payment approved the same day, Duarte said.
Its aggressive tactics has earned it near ACORN-level status.
While no illegal activities have been alleged against NACA, founder Bruce Marks has said he practices non-violent “bank terrorism.”
NACA is partly paid for with federal grants, including $15 million it received in 2008 from the Neighborhood Reinvestment Corporation, according to the center.
At a workshop Monday at West Palm Beach City Hall, attendees were told their mortgage woes were not their fault.
“Wall Street is definitely behind all of this,” said Joe Ayala, NACA outreach coordinator. “They have generated billions of dollars off your sweat. Let’s get a little of it back.”
General eligibility
You cannot own another property.
You must live in your property.
Items needed:
30 days of consecutive paycheck stubs. (If self-employed, you will also need six months of bank statements and a year-to-date profit and loss statement.)
Signed hardship letter.
Most recent mortgage statement, and property tax information.
Lenders and servicers expected to be present during the five-day event:
Bank of America/Countrywide
Wells Fargo/Wachovia
Saxon
CitiMortgage
Chase
Litton
Home Loan Services
American Home Mortgage
Fannie Mae, Freddie Mac
attendees were told their mortgage woes were not their fault.
Of course they were. Any kind of “outreach” or “community-based” whatever will say this. ACORN has been saying this for years…
No responsibility assumption, someone else is ALWAYS to blame, WOE IS ME!!!
Stepn, no matter how much woe or no woe the FB’s “feel’:
Must live in the home
No second homes, live in or not
Pay stubs <– that will weed out quite a bit
Hardship letter <– be interesting to see what’s in those
…are fairly hefty qualifications, at least by today’s “standards.” (20 years ago, this would have been SOP.)
I would love to see a follow-up to this article. How many FB’s showed up? How many thought to bring all this documentation, including proof of primary res? How many were granted a temporary rework, how many are granted a permanent rework? I’d be stunned if more than 5% of the attendees made the initial cut, and I’d be stunned if more than 2% are happily paying a rework nut a 12 months later.
How many FBs or people writing for them know how to put together coherent sentences to create a hardship letter?
Wow. That was quite mean.
“Pay stubs <– that will weed out quite a bit”
Don`t count on it.
The group, which also offers its own loans based on what buyers can afford, not their credit score, has built a reputation on shaming “predatory lenders” into working with it to modify mortgages.
Its aggressive tactics have earned it nearly the status of ACORN, the controversial community organizing group.
While no illegal activities have been alleged against NACA, founder Bruce Marks has said he practices nonviolent “bank terrorism.”
““Save the Dream Tour”
Loan modification be damned, just pass out the drugs!
Whatever it takes to keep the alligators fed.
What the hell is happening to our country?
We’re transitioning.
“We’re transitioning”.
It’s a real-time slow motion train wreck.
They need to continue to pass out the eviction notices. The housing market is trying to get affordable, but we (as a nation) wont let it. The “workouts” and “modification” programs are delaying the lowering and affordability of prices.
Combo, transitioning to… Zimbabwe? Somalia? Wiemar? Mexico?
Chickens is king?
“but we (as a nation) wont let it. ”
Lenders and servicers expected to be present during the five-day event: Fannie Mae, Freddie Mac
Fannie And Freddie Receive Unlimited Future Funds To Stay Afloat
.W. ELPHINSTONE 12/24/09 09:16 PM Huffpost
NEW YORK — The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.
The Treasury Department said Thursday it removed the $400 billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government’s estimate this summer of $170 billion over 10 years.
Think Argentina - once wealthy, then not so much.
Combo, transitioning to… Zimbabwe? Somalia? Wiemar? Mexico?
Aladin, is that you …?
..Whatever it takes to keep the alligators fed.
Obvious at a distance but virtually invisible up close.
The “Parade of Modifications”!
At a workshop Monday at West Palm Beach City Hall, attendees were told their mortgage woes were not their fault.
Stunning.
Oh, brother. Here’s another story from the Arizona Slim file:
This morning, I awoke and stepped into a nice, hot shower. While I was shutting off the hot water, I noticed that the faucet handle wasn’t perpendicular to the wall.
So, time to remove that handle and see if I can re-install it so it is perpendicular.
Removing the handle wasn’t as easy as pulling it off the stem. Had to go get the faucet handle puller out of my tool bucket. And wouldn’t you know it, the process of pulling that handle caused the dang thing to break. Well, at least I got most of the handle off on the first try.
The puller was the right tool for the job of removing the faucet handle fragment that still adhered to the stem. Nothing like Tucson’s hard water for making plumbing parts really stick when they’re not supposed to.
Well, I was down to just the stem, and look at that thing. It’s about five degrees off perpendicular to the wall. Well, I pulled the stem out, and dang if I don’t have to replace that too.
Okay, that’s the story of how I began my day. Now it’s time to get to my point, and here it is:
The stem’s bent, and guess who’s fault that is? Mine. I did it and I’m not a victim. I guess I’ve just been overzealous when it comes to shutting off the hot water faucet. Or maybe I had a defective stem. Or something else.
Any-hoo, it’s time to head down to the plumbing supply house to get replacement parts so I can take a shower again.
That’s quite possibly the worst shower story I’ve ever heard.
Read it much slower and with a deep, sexy, female voice in your head.
Better?
And she is not asking a man to fix it….even more sexy..
While no illegal activities have been alleged against NACA, founder Bruce Marks has said he practices non-violent “bank terrorism.”
NACA is partly paid for with federal grants, including $15 million it received in 2008 from the Neighborhood Reinvestment Corporation, according to the center.
I just love finding out about my tax dollars going to “advocacy” groups like this. Yeah, let’s pay “outreach” workers to tell people it’s not their fault and to screw the banks, then I get involuntarily tapped to fund yet another round of bailouts for both banks and deadbeat “victims.”
Yep. We’re paying to keep ourselves “priced out” of the market.
Nice, huh?
Anybody happen to see the picture of the little plane that the guy crashed into the IRS offices in Texas. I read that he had also loaded the plane with a large container of gasoline to amplify the effects of the crash.
i saw the recovered wreckage of the plane. Twisted and tattered but recognizable. What happened to the wreckeage of the planes that hit the pentagon or crashed in Pennsylvania on 9/11? i never saw any of it.
Ron Paul makes the most sense, and ticks of Republicans the most, when he says that we are in a constant state of war here.
What happened to the wreckeage of the planes that hit the pentagon or crashed in Pennsylvania on 9/11? i never saw any of it.
I suppose the Geniuses in or Government were able to fake 9/11 and didn’t think of having some fake wreckage to show you.
It looks like you got ‘em! Go put up a website and YouTube channel with your theory! I’m sure the Government will capitulate once presented with your iron-clad findings.
just asking…
seems like there are so many knowledgeable people here there might be an explanation why there weren’t any wings lying on the ground outside the pentagon.
Uh, were there any passengers reported missing?
United States Solicitor General Ted Olson’s wife, Barbara Olson, was on American Airlines Flight 77 that crashed into the E Ring of the Pentagon on September 11, 2001.
I don’t think that was staged just so he could get re-married to his new wife on October 21, 2006.
Just sayin’
Because they probably folded up alongside the fuselage when they hit the building, and followed what was left of the fuselage into the hole. Then melted in the ensuing fire. And was then covered by debris from the building.
When planes crash at high velocity, they shatter like a rose dipped in liquid nitrogen and smashed on a table.
Years ago the air force mounted a Phantom
on a rock sled and slammed it into a concrete
wall at 450kts. The high speed cameras showed
the aircraft literally fragmenting into pieces
small enough to make them hard to pick up.
I’ll see if I can find a link.
My friend saw an airplane engine on the street in front of his NYC apartment. I believe him.
You never saw it, so it doesn’t exist?
I never saw you, but I’m guessing you exist.
Is Ron Paul implying 9-11 was the work of our own gov?
he was on cnbc a couple days ago (sqquawk box). He was really being harassed about “waht should we do about Iran?” Answer “nothing what have they done to us.” Q: “but they’re trying to develop a nuclear weapon?” A ” china and the soviet union had thousands of nukes . we negotiated and traded with them, why should Iran be any different.”
he did say that we have been in perpetual state of war and a democracy can’t function like that. “when should we be at a state of war?” A ” when it’s a declared war.”
So no , no 9-11 reference, i just thought of it again when i saw the fesulage hauled out of the building in Austin.
I do have a friend who worked in the world trade center who said that in the weeks prior to 9-11, when he came to work on Mondays there was a layer of powdery dust that covered everything and they had to keep bitching about it to get it cleaned up.
And this layer of powdery dust that covered everything prior to 9-11 is relevant to … to what exactly?
The CIA was putting in new drywall?
JD, WalMart has a sale on Reynolds Wrap. Better get there quick before they sell out.
Maybe it was Chinese drywall with C-4 in the gypsum. Could it be that the Chines could blow up every McMansion with the push of a button?
Nice.
Wow…. just wow.
I have absolutely no expertise in this area, but it seems to me that thousands of pounds of jet fuel might produce a more destructive explosion than tens of pounds of gasoline.
Exactly what I was thinking. Plus a large chunk of a WTC tower fell on top of those planes.
Can we get X-GSfixer to weigh in on this one? Please.
Hey, he’s just asking questions!
Exactly what I was thinking. Plus a large chunk of a WTC tower fell on top of those planes.
Well - JD was talking about the Pentagon and Penn planes, not the WTC ones. Nevertheless - plenty of wreckage was found. JD has no idea WTF he’s talking about.
kenetic energy is 1/2 * mass * (velocity^2).
Triple the speed and ten times the mass is 90 times the energy.
Just sayin’.
Aluminum burns at high temperature. Also, several of the jet engines did go completely through the buildings.
Aluminum melts at something under 1500 degrees F. When an airplane burns, there’s not much left.
Saw the results of a big hangar fire…..a bunch of Cessna T-47s were in a old wooden USAF hangar, partially fueled. Roofers were fixing the roof with torches (allegedly), set the building on fire…..dip$hits…
The only thing left was some aluminum slag, and the steel parts of the engines and landing gear. The magnesium pieces of the engine actually burned holes in the concrete two feet across X 8-10 inches deep.
Saw another one crash short. Fire only lasted about 5-6 minutes before the fire crew put it out. Even so, the parts of the aircraft exposed to the fire had started buckling and collapsing on themselves from the heat of the fire.
Yep.
I go camping a fair amount - I can say that even just a decently hot campfire will disintegrate an aluminum can to ash after about 5 minutes in the coals. Aluminum indeed burns at fairly low temperatures.
The suspicion is that the powder was from the installation of explosives used to cause the designed implosion of the world trade centers, so yes it was the gypsum in the wall board.
The suspicion is that something other than the planes’ jet fuel had to cause the huge steel coulumns that ran through the center of the building to fail. Even if the floors “pancaked” those columns could have bent or twisted but not sheared.
The real mystery is what caused the infamous building seven (next door) to the WTC to collapse later in the day. Supposedly it got hit by a steel girder.
Theories abound as to the details, but maybe certain parties got wind of the planned attack on the WTC and made the best use of it i.e. Silverstein (the owner of the WTC) got rid of the money losing white elephant that was the obsolete WTC (plus $2 billion to boot) and the US got its perpetual war on terror.
I just look to evidence that may confirm or deny some of the things suggested by these theories i.e a violent plane crash that leaves no trace of the plane or a steel building that collapses due to fire. Madrid had a hotel fire that burned HOT for 24 hours without collapsing.
The government says that we are out of recession. Maybe we are, but two of my neighbors just got layed off.
For some reason a lot of “truthers” (people who say 9-11 was an inside job) have gravitated toward Ron Paul. I would rather try to reason with a Moonie than with these people. While Ron Paul says that US policies in the Middle East, especially our unconditional support for Israel, have caused a lot of enmity toward us in the Muslim world, I do not think he has ever suggested 9/11 was “the work of our own government,” except in the sense that the U.S. government failed to prevent the attack.
I’m certain Ron Paul appreciates you mentioning his name alongside your theory about that cover-up..
Force = Mass x Acceleration?
Piper at 150 mph vs Boeing at 550 mph?
Secondly, from my window, I can see a hole with two metal structures rising out of it with tons of construction guys finally making some really good progress.
I can guarantee and have pictures that there was debris recovered. Please stop this insanity.
and yes, before anyone answers, the 2nd is not in the proper format but I doubt we need the accel #s to determine the difference.
It never ends.
And the theories of the “troof” just keep changing to suit the moment.
Seriously. While we deviate in the Bits section from strict discussions of housing, there are other, more appropriate web forums to bring up conspiracy theories.
JDinCT,
Does your post have an actual point?
Whether or not anyone agrees, a poster should not be criticized for asking an honest question.
During the bubble, many people thought we were wearing tin-foil hats because we thought housing prices would go down and take the stock markets and employment with them.
Though I don’t doubt that planes crashed into the buildings, the whole way the 9/11 attacks played out — especially the way things were handled afterward — certainly make one question how it all went down, IMHO.
The biggest problem I had with it was how Bush saw Saudi Arabians crash planes into buildings, then claimed we had to go to war with Iraq. Any monkey could have seen that Iraq had nothing to do with it, and that (going to war with Iraq…but not Saudi Arabia?) made me very suspicious.
Muggy asked yesterday:
“Comment by Muggy
2010-02-23 02:58:59
Any advice on how to ride this freaking thing out housing-wise? I get the money part (diversify), but where do I actually freaking live until this is over?”
Muggy,
I’m in the same boat. I have to live somewhere until the dust settles… Rents are still exorbitant, and rental stock is rather poor. Housing is still obscenely overpriced. The question is, if we wait one-two-three more years, will it be the right decision?
Rates ARE going up this year. Inflation will be picking up. (Remember, two years ago we were told not to worry about inflation for about two years? Time is almost up!)
The problem as I see it is that historically, during periods of high inflation, housing prices did NOT fall in the nominal terms. Real prices fell, but what good would it be to me if my real income also falls compared to inflation?
We used to have a guy on the board from Netherlands. He told us how housing there was completely unaffordable for any citizen but the very rich top percentile, and yet the government kept blowing up that bubble by subsidies out of the public’s pocket. What if we’ll have the same scenario here?
The government is hell bent on keeping housing prices up, inflation risk and currency annihilation be damned… They won’t care about savers like us.
If nominal prices do not fall, savers like us will be screwed.
At the very least, to have a small, overpriced, far from ideal place that I can call my own - maybe it’s not such a bad idea at this point in time? (Blasphemy, I know…)
“The government is hell bent on keeping housing prices up”
This is the line of thinking that got me off the fence and offering. This thing is taking waaayyyy longer than I originally predicted. If you told me in 2006 that in 2010 I’d be looking at essentially the same prices for rentals and purchases, I would have laughed. Well, here I am.
Poof/shazam all day long.
‘If you told me in 2006 that in 2010 I’d be looking at essentially the same prices for rentals and purchases, I would have laughed’
This is kinda interesting. In early 2005 posters here would guess how long meaningful declines would take and the periods were usually 7 years or more. Of course, that was when most markets were considered to still be rising, so it shows the psychology involved. Had you told us then prices would be down 50% in FL, AZ, NV and CA in 2009-10, I bet many here would have not believed it.
I personally know people that sold cuz they read here and got worried, then got itchy with all the cash and bought again, only to see it drop another $100k. What happens to any one person doesn’t change my wallpaper, so I don’t really care if or when anybody buys a house.
I totally get what you are saying, but in my corner of the world it is still out out control. I guess coastal Pinellas is the “fortress” of Central Florida. I understand that I could buy 5 houses in Cape Coral today.
What some of us here aren’t willing to admint is that fed interventions are in fact sometimes “working.”
“willing to admint”
That is a really, really funny typo. I wish Alad were still around for that one.
‘that fed interventions are in fact sometimes “working”
Tell that to my friends that are underwater by $100k on 2007 purchases.
Ben, we’re agreeing. No doubt 2007 was the wrong time to buy. I am not questioning your work, or the overall consensus here, but can we agree that the $8k/credit created a mini bubble among FHA-armed first-time buyers to mop up the last of the remotely affordable homes?
This was the last demo to fleece and get on the hook, and from what I can see in Florida, they pulled it off.
I think the truly horrifying price declines are going to start this year, unless of course the tax credit continues or, God help us, expands.
Also (this is why I love Bad Andy’s posts), what is the point if we aren’t here ruminating about when to buy?
That is what I was getting at yesterday: how bad is it to buy right now? Nobody has a good answer. I will agree that every year from the inception of this blog, up until the last few months, the answer was obvious.
Speaking of that, where’s Crazy Eddie?
You can only skin so many cats with the same old bait, I was about to jump in and take the $6,500 bait, but there is no rush. The trend is my friend and althought the decline has slowed there is still a decline and even after that it will be flat.
How many buyers are out there that have not purchased yet? Until people start getting jobs, I don’t believe there will be too much change.
There is probably more fraud involved with the tax credit than should be, last I heard there were about 86,000 cases of fraud.
Muggy, what was the last sale price on the house you bid on? From my experiences in FL, SFH areas are either very nice or undesirable/unstable rental areas. There is very little in between. The rental areas dropped quickly in price, the few really good areas will take much longer. Stay away from the rental areas. Even in a good RE market the area will decline and so will your equity.
That is what I was getting at yesterday: how bad is it to buy right now? Nobody has a good answer.
Well the answer is: nowhere near as bad as two or three years ago. I suspect that on average (and that’s really not worth much, who exactly lives in the town of Average?) we’re alot closer to the bottom than to the top. On the other hand, the only way that we’ll see a resumption of high levels of appreciation is in a runaway wage/price spiral, like the early 70s. And the initial response to a runaway wage/price spiral would be higher interest rates and lower prices. So if you find the perfect place at a good price you probably won’t lose that much by buying now. OTOH, it’s difficult to imagine that you’ll lose much by waiting another year or two. IMHO, If you live withing your means and keep saving up for a bigger downpayment you’re quite likely to come out ahead.
It’s all about timeframes. Prices are definitely way down since 2007. However they’re up since mid-2009, on a national average basis, and certainly as a direct result of the Fed and government actions.
The big drop was in the period between early 2006 and early 2009.
“Muggy, what was the last sale price on the house you bid on? ”
2006 $370k
“SFH areas are either very nice or undesirable/unstable rental areas. There is very little in between.”
Roger that. This ‘hood is almost entirely owner-occupied (I know because I have been eyeballing it for a rental for over a year now… nothing).
Muggy:
Tampa/St. Pete median Jan. 2006: $219,700
Tampa/St. Pete median Dec. 2009: $137,500
(Per FAR stats)
Prices very much have come down there since 2006, by a lot. Case/Shiller data shows the same.
The government and its puppetmasters are trying to create the sense of urgency, e.g. “Buy now or be priced out forever.” Some people may feel comfortable getting on the hook on probably the largest purchase in their lives in a day or two of whirlwind shopping, and making “closed envelope” offers in a bidding war, but that’s not me or probably for most of the people here. And it wasn’t the way real estate buying was done historically, except in the last decade.
Estimates of 2012 for the meaningful declines sounds about right as resets were predicted to have tapered off per the reset charts.
‘resets were predicted to have tapered off’
Yeah, but history suggests that prices hit low points a couple/three years AFTER foreclosures peak. To me, while it’s interesting to guess when that low point might occur, the question of actually borrowing or spending a bunch of cash at any point after the biggest bubble in history involves many considerations. Here in N AZ, the post-bubble recession is hitting hard. Will these buyers have a job next year, or the year after that? Will they have to move to find work? That’s one of the things that hit Texas RE owners in the 80’s.
While I expect there to be some RE bargains in the future, much of the “bottom picking” I see in the press seems to be based on the idea that house prices are going to spring up from some magical number. It might happen, but if it doesn’t, the housing bubble steamroller may claim a few more knife catchers.
Price action cannot be viewed in a vacuum, although that’s what the MSM is doing. Employment opportunities (or lack thereof) and state/local finances (read: property taxes) - must be factored in - now more than ever.
Ben,
Looking at having mom take some gambles with a little of the extra retirement money on houses in Michigan or Ohio. It is very inexpensive there and how a feeling will eventually rebound in wages.
Trade flows are shifting so as long as we don’t get some stupid protectionist move there might be the seedlings of a rebound.
I also get the feeling that things are getting a little more localized now. So, Detroit/Cleveland/Pittsburgh/Los Angles Inland Empire/Stockton are much further along than San Francisco/California costal/NJ/NY.
Our troll eddie might be right about Atlanta recovering a bit more. They didn’t go as far up and might have dropped down quicker. Plus a more positive manufacturing environment.
Still, it’s pretty risky. The portfolio is pretty diversified but I’m trying to get her into a liquid position if they monkey with reserve requirements exc.
And thank you Ben. This has been a wonderful learning experience for me. Really have begun to understand more of the banking system and the mechanics of deflation since being here. Kept me from losing my head and going with some foolish option arm purchase in the bad days.
Looking at having mom take some gambles with a little of the extra retirement money on houses in Michigan or Ohio.
Wow. You must really dislike your mother.
“Yeah, but history suggests that prices hit low points a couple/three years AFTER foreclosures peak.”
And let me guess: Foreclosures have yet to peak?
Ahem…
Editorial
February 23, 2010
Three years have passed since the housing bubble burst, and yet the number of mortgage defaults and foreclosures continues to increase. RealtyTrac tallied up a record 2.8 million homes that received at least one foreclosure notice last year, and predicted that 4.5 million would go into foreclosure this year. If so, that would be nearly one out of every 20 homes. Analysts also estimate that there is a “shadow inventory” of 1.7 million to 7 million homes in foreclosure that lenders haven’t yet put up for sale.
…
So let me guess: The banksters took $698.5 bn in TARP funds, leaving only $1.5 bn in foreclosure assistance available? At least the money can be used flexibly…
…
Last week, President Obama launched yet another initiative to avert foreclosures, offering $1.5 billion from the $700-billion Troubled Asset Relief Program to housing finance agencies in California and four other states where home prices have dropped by at least 20%. The administration gave states a great deal of flexibility in using the aid, which will help them craft programs for those who owe more than their homes are worth or who have lost their jobs and need temporary or transitional help.
Ben/Muggy:
I was one of those folks who sold in ‘06 — have been renting since 6/06. Am under contract now on a 4/2 sfh, pending close.
Combination of factors moved me from landlord-renting to bank-renting: Low interest rate, PITI is lower than renting comparable here (with 20% down — piti is lower, in fact, than my last mortgage from ‘97), $8k credit, interest tax deduction, and it’s a 7-10 year house (we found the school district we want our kids in at least until high school).
House value will likely plumb lower depths, and may not see appreciation in our 7 year time frame. But got to a point where “wife encouragement” and above factors moved the needle.
“But got to a point where “wife encouragement” and above factors moved the needle.”
Yes, exactly, although some people here are too quick to call “sucubus.”
I guess the new car magic wore off already.
“I guess the new car magic wore off already.”
Our rental house sucks and is not safe for our children.
Well the safety of the children is paramount there is no doubt about that.
I hope you don’t take my comment as snarky, I was supportive of you getting a new car.
“I was supportive of you getting a new car.”
Lol, you never can be too sure around here.
Sorry to hear about your conflict, Muggy. We are experiencing the same doubts here for the very same reasons — bad areas declined, but the govt bailouts were rolled out just in time to save the more desirable neighborhoods. Quite frankly, a lot of homes are selling for **above** their “peak” prices.
It’s not only wage inflation that can push up prices. If the dollar depreciates enough, plenty of foreign money can come in and buy up a tremendous amount of our inventory — and it’s happening already. I’m hearing from multiple sources about Chinese money buying up massive amounts of land and houses.
We are also seeing plenty of Europeans, but the Asians are all over the place. Of course, this is San Diego, so we might be more attractive to foreigners, but they are lining up to buy overpriced condos…just like during the bubble.
We’ve made multiple offers on houses at prices we thought were reasonable (even though they weren’t “pre-bubble” prices), and have been outbid every single time.
I am feeling poorer now than a few years ago. Once upon a time, $100,000 was a lot of money. I get the feeling that it means much less than it used to.
“I personally know people that sold cuz they read here and got worried, then got itchy with all the cash and bought again, only to see it drop another $100k.”
That story rings a bell. Sir Isaac Newton famously sold his shares near the top of the South Sea Bubble, only to later reinvest in it, catch a falling knife, and lose a bundle of money.
The South Sea Company was a British joint stock company that traded in South America during the 18th century. Founded in 1711, the company was granted a monopoly to trade in Spain’s South American colonies as part of a treaty during the War of Spanish Succession. In return, the company assumed the national debt England had incurred during the war. Speculation in the company’s stock led to a great economic bubble known as the South Sea Bubble in 1720, which caused financial ruin for many. In spite of this it was restructured and continued to operate for more than a century after the Bubble.
…
Quotes on the bubble
Joseph Spence wrote that Lord Radnor reported to him “When Sir Isaac Newton was asked about the continuance of the rising of South Sea stock… He answered ‘that he could not calculate the madness of people’.”[3] He is also quoted as stating, “I can calculate the movement of the stars, but not the madness of men.”[4] Newton’s niece Catherine Conduitt reported that he “lost twenty thousand pounds. Of this, however, he never much liked to hear…“[5] This was a fortune at the time (equivalent to about £3 million in present day terms[6]), but it is not clear whether it was a monetary loss or an opportunity cost loss.
I’d be looking at essentially the same prices for rentals and purchases
If what you mean is the monthly rent is equal to mortgage, tax and insurance, historically it is time to buy during normal times. But these are not normal times.
Run the numbers in a realistic rent/buy calculator. Factor in all different scenarios, rents and house values both falling and rising in the same and different directions by different amounts.
See if the hit’s to your net worth during some of the calculations will be lessened over different periods of time or if such hits will be offset enough by the advantages of owning too. Sometimes it’s worth it, sometimes not.
But if you want and need a 3/2 or a 3/1 I don’t think I’d buy a 2/1 because if there is any money loss, your not going to be totally happy with where you live either.
OK Muggy, you have to be exaggerating. I doubt that houses in your area are the same price as they were in 2006. Given that we have a huge number of 4- and 5-year ARM resets this year, why don’t you wait at least 8 months until the fall?
“OK Muggy, you have to be exaggerating.”
Me? Naw.
And MILLIONS of unsuspecting Credit cards users are going to have the same increases too
The New CC law allows immediate rate increases on variable rate cards…so much for the “recovery”.
Rates ARE going up this year.
The Netherlands Solution, where housing prices are kept propped up forever via a process that guts the nation’s economy, seems very likely at this point. The dream of TPTB would be housing that is overpriced and produces debt-serfs, but at the same time does NOT keep going up in value, so those same debt-serfs can never cash out with a big profit.
Think about the stock market over the past decade and how “buy and hold” has generally been a failed strategy, while those who are in the know and who profit from the churn have gotten rich. I suspect the end goal is to make the housing market the same way. The banks get rich, we get stuccoed.
“The Netherlands Solution, where housing prices are kept propped up forever via a process that guts the nation’s economy, seems very likely at this point.”
That’s my biggest concern… Combination of inflation and falling real income while keeping nominal housing prices high will be lethal.
Value of cash savings eroding, rates going up, expenses going up, nominal housing prices flat or rising (even if falling in “real” inflation-adjusted terms) - what a nightmare.
Exactly. The worst of all possible worlds.
Residential rents in Houston have dropped about 10%. That’s for both houses and apts.
Six months ago I saw some really good deals. Today, I’m seeing some of those same homes come back on the market 10 pct lower b/c the contracts fell through. Even the builders are lowering prices. We’re slowly grinding our way down here in Jacksonville.
The government is throwing sand in our eyes so it’s really difficult to say conclusively which way the markets are going. If the Treasury market crashes or forces government tightening, however. It could head south rather quickly.
American Future-Vision, Channel “G”:
ATHENS, Greece – Police fired tear gas and clashed with demonstrators in central Athens on Wednesday as violence broke out after a large protest march against government austerity measures intended to fix the country’s debt crisis.
Riot police confronted scores of violent protesters who hurled rocks, red paint and plastic bottles near parliament, in sporadic clashes that caused little initial damage.
Police detained at least two protesters.
Earlier, more than 30,000 people took part in a peaceful march, as unions staged held a general strike which grounded flights, shut schools and crippled public services in a show of strength against the government.
The 24-hour walkout comes as Greece is considering tougher austerity measures, including possible deeper salary cuts and extensive reforms of the civil service and pensions system, to pull the debt-ridden country out of financial crisis.
You can susbstitute “Chicago”, “L.A.”, “Miami”, etc, etc, and “city”; for “Athens - Greece - country”, and have a fairly reliable template for Future-Vision News at Nine.
“The 24-hour walkout comes as Greece is considering tougher austerity measures, including possible deeper salary cuts and extensive reforms of the civil service and pensions system.”
Sounds to me like the government is protesting against the people, not the other way around.
There’s noooo money.
“The lack of money is the root of all evil.” - Rev Ike.
Hey hey combo…Rev Ike was the man………he had it right
“Police fired tear gas and clashed with demonstrators in central Athens on Wednesday as violence broke out after a large protest march against government austerity measures intended to fix the country’s debt crisis.”
This is the true reason why governments like ours pay the underclass. To keep them from revolting. The problem is our underclass–those on the public dole–is now about 50% of the population.
This is the true reason why governments like ours pay the underclass. To keep them from revolting. The problem is our underclass–those on the public dole–is now about 50% of the population.
Maybe yes to the first 2 sentences and maybe yes to the third if one just considers Federal taxes.
However when one includes all taxes, state, local, sales, Payroll tax, I think, the poor pay just as much or more than the rich in total taxes and 50% are not on the dole.
Here’s one study, (Citizens for tax justice) I don’t know if it’s complete or not (it does not include SS or Medcare tax) but it’s easy to find many studies like it.
Sad National Norm: Soak the Poor and Middle Class to Spare the Rich
Nationwide, the study–Who Pays?–found that middle- and low-income families pay much higher shares of their income in state and local taxes than do the very well-off:
* The average state and local tax on the richest families is only 7.9%.
* Families in the middle of the income spectrum pay 9.8% of their incomes in state and local taxes–a rate one-quarter higher than the rate on the wealthy.
* The poorest families pay a whopping 12.5% of their meager incomes in state and local taxes.
So 12.5% there. Now add in sales tax, payroll tax and others and maybe they are paying about 20% in tax? Just guessing.
http://www.ctj.org/html/whopays.htm
Another poster posted facts showing the super rich are paying about 16% in total tax?
I’m just giving rough estimates but the poor do pay a lot of tax however some are receiving benefits too so it’s more complicated than me just making a blanket statement except to say that 50% are not on the dole.
The most regressive tax we have going on at the moment is high gasoline prices. If the working class really wants to improve its condition it should start by demanding better public transport and rejecting the automobile culture.
Having gone to the Auto Show this past weekend, I saw again firsthand how buying autos is hardwired into the working class mind. We’ve been going since 1978 (the best cars are still the vintage restorations) the mass produced stuff is garbage. For thirty years I’ve watched young fathers with wife and little kids in tow as they oogled the latest offerings: their fashions change, and the models change, but the song remains the same. (except for all the tattoos - wayyyyyy more tattoos)
Sorry Edge…….The working class should demand really affordable housing close to where the jobs are. If people lived close to the job centers they would use far less gas and would need smaller cars…or none at all because they would have access to public transportation.
I could live here without a car, I could pay to have our groceries delivered, and even a pickup/delivery service for our laundry.
The bus is on the corner….but I’ve had a car since i was 19, the adjustment would be hard unless I moved back into Manhattan.
If the working class really wants to improve its condition it should start by demanding better public transport and rejecting the automobile culture
The most regressive tax we have going on at the moment is high gasoline prices.
And it’s odd how many liberals I meet who think we should tax the crap out of gas….you know how many poor people would go broke because of that?
If the working class enjoy frittering away their finances on cars, so be it.
My girlfriend is firmly convinced that her father’s only interest in life is cars. She can only remember him truly being happy at car shows.
That seems to be why he pulled 60-80 hour weeks in a factory for his adult life. So that he could buy cars. And things for the cars.
Hey, more power to him - he met the needs of his desires with his own cash. What roasts my beans is when “families” say they need multiple vehicles - but then say they can’t afford child care or food. And then the limosine liberal pols that conjure up every tax deduction/credit possible to sustain what, in aggregate, is a monumental misallocation of personal and public resources.
Slight correction: J6P’s dream “car” is a ginormous pickup with a turbo diesel engine.
If the working class really wants to improve its condition it should start by demanding better public transport and rejecting the automobile culture.
Absolutely.
But that automobile culture has been entrenched for more than 60 years, and it pervades our transportation system. It’s not too difficult to reject the automobile in New York City or Chicago or a handful of other American cities, but mass transit is woefully inadequate in most urban areas, let alone suburbs and exurbs. Have the working class agitate now — I’m all for it — but don’t expect meaningful results for at least a decade.
The highway lobby vastly outspends the transit lobby. This is a tough nut to crack, but there’s a lot of reasons to keep trying.
“Job centers” are a myth, aNYCdj. Businesses move all the time due to many factors such as property taxes, age of the building, better deals, customer location, etc.
Not to say they don’t exist, but the for most of the country, mobility of both businesses and workers is the norm.
Municipalities and LLs also have a bad habit of raising the cost of doing business if they think they have a captured market.
“And it’s odd how many liberals I meet who think we should tax the crap out of gas….you know how many poor people would go broke because of that?”
I’ll bet that the boogeymen, er… liberals know that it will hurt the poor because of its regressive nature, but I’ll also bet that their ulterior motive is to disincentivize gas consumption with it’s deleterious effects on foreign policy and the environment and incentivize denser population hubs and mass transit/ride sharing. Carrot and stick?
But I don’t know. I’m not a liberal.
MrBubble
“If the working class really wants to improve its condition it should start by demanding better public transport and rejecting the automobile culture.”
To paraphrase the Clinton campaign: “It’s the buildings, stupid.”
You can’t have cheap, timely mass transit in the ‘burbs. We’ve sprawled out and now we’re stuck with cars, like it or not.
If the working class really wants to improve its condition it should start by demanding better public transport and rejecting the automobile culture
Maybe a better idea is for everyone to stop demanding something that someone else has to pay for.
The next step is to find some “other” to demonize and pin all these woes onto.
I know: Declare a “War on Terror”.
No, I don’t think so, Cobalt. We don’t have the high proportion of government employees that Greece does (60%).
And we have chicken-$hit Republican politicians. If they won’t vote against out-of-control pensions, nobody will.
http://www.sacbee.com/2010/02/24/2560206/schwarzenegger-whitman-back-away.html
Holy cow!!! 3% times years of service at age fifty!! New York State is 2%, minimum age 55. I realize that a lot of NYS police/fireman have 20 yr retirements, at 50%, but 3% times years of service is incredible.
It’s very likely it will go back to 2% at 55 (as it should). There’s really no way around it.
I dunno. Europe has a long history of labor strikes over pretty much anything. The U.S., not so much. Two years ago I was in Athens over May Day, and there was a general transportation strike that shut down the trains, buses, Metro, everything. For no good reason at all except that it was the European version of Labor Day. A few years before that, in Paris, we couldn’t get into the Louvre because the museum workers were on strike. The workers on some (not all, just a select few!) train lines were striking. Then there’s Italy, which seems to have a strike of something or other every week. I just don’t see American workers ever behaving the same way.
Strikes:
I just don’t see American workers ever behaving the same way.
Good point. I was talking to a Brazilian Sunday about Brazilians putting up with a lot of bs in a passive way and how Americans are like that too unless pushed too far and she said, “I love the French, they don’t put up with anything they stike all the time.” I web searched, “Why don’t American’s strike” just now and found this:
National Strike Day 2010: When Americans Strike, It’s Getting Serious
For Americans, a strike is an option of last resort. So when we do start talking about striking, it’s safe to say the situation has gotten really bad.
To Kevin Maloney, things are bad indeed. Maloney, a City of New York worker with a blue-collar background, says that both Republicans and Democrats have consistently failed the American population, leading to the current crisis. He wants to hold Washington accountable for its failures. And we can do it, he says, through something called National Strike Day, which takes place on May 10, 2010.
http://www.businesspundit.com/national-strike-day-2010-when-americans-strike-its-getting-serious/
Elanor, your comment reflects what I’ve seen when I’ve been to Europe. Not only are they quicker to strike, heck, they’ll take to the streets about just about anything. You name a protest topic, the Europeans are on it.
Elanor,
In NYS all municipal workers are hired under the Taylor Law, which prohibits strikes, rule book slowdowns or anything that can be considered a job action. This was enacted in the seventies after numerous strikes shut down NYC. The NYC transit strike, a couple of years ago, was illegal and should have dissolved their union, but the politicians let them off the hook. If they would try that today, it would have a different outcome.
Good point. And certainly the late 19th/early 20th century was a time of great unrest as laborers in the U.S. fought for decent working conditions and pay. Even now you occasionally hear about the “blue flu” among police forces, and then there are the teacher strikes. But massive general strikes of the sort Athens is seeing don’t happen here. Maybe it’s the divide and conquer tactics of the corporate PTB, our pervasive materialism (can’t buy stuff if you have no income!)and fear of losing one’s job that make American workers so docile.
Lots of folks whining about Scott Brown’s support for a measly 15 billion dollar jobs bill. Calling him a want-to-be Democrat Etc. If he didn’t support the jobs bill they’d say he was following party lines. Talk about a lose-lose situation. What will these same people call him when he votes down health care reform and Cap & Trade. He’s appears to be showing some much needed bipartisanship to break through the congressional gridlock. Scott Brown might be losing the battle, but I think he’ll win the war. Voting out the incumbents in November should be a no brainer.
This is exactly what’s wrong with our gov.
We should have a bunch of individuals voting as individuals who represent their local interests, instead we have some party loyalty test and if you fail you get blasted.
We should just save the gov some money and elect one democrat and one republican to congress to represent the parties interests. If they are all going to vote the same anyway why not cut some costs.
I guess it’s the same race to the bottom as it is for business. You have to eat your own just to stay abreast of the competition. So a Dem has to join with Dems, because if he doesn’t, they can’t “beat” (ie pass a bill) the Rebpulicans, who joined together the week before.
It reminds me of the day I learned that our society was doomed for real. It was the day I discovered how Richard Hatch had won the first season of Survivor. Did he build the best hut or catch the best fish or keep the fire going or do anything remotely resembling survival? No, all he did was network, collude, and leveredge his personal relationships in order to aseemble enough votes to eliminate the competition, betraying his allies and forging new alliances to favor himself as the pool of survivors shrank, acting for all the world like CEO of Megabank (and having a similar opinion of himself). And he won. Even on a desert island, empty sluthood trumped merit.
We’re doomed.
“leveredge” - I like that!
Survivor was an interesting social experiment - a sort of “Lord of the Flies” on TV.
And, as one could guess, evil won. This is usually the case, especially in modern society where people are trained to not see evil or call it what it is. I bet most of the poor saps voted off that island had no idea what happened to them, or if they DID know who was responsible, they still wouldn’t say anything.
I was watching some clips on “the Daily Show” from the Republican rally. What a bunch of idiots the repubs look like! I hate the dems even more. Our entire government SUCKS! Why can’t we just say it! We need some hope and change.
In the early 60’s JFK made a speech on National television that the Civil Rights Bill he was proposing was a ‘Moral ” issue . LBJ pushed the bill through after the death of JFK . This is a example of rights given by the Constitution that still needed additional Bills to make sure they were enforced .Apparently at the time JFK and his brother Bobby were concerned that pushing Civil Rights could affect the next election ,but they did it anyway . It was a moral and lawful issue that the Constitution wasn’t being followed in practice .
We are at a critical point in History again in which the current Politicians keep trying to weave Bills that pad the pockets of the elite rich and powerful ,rather than fight for the oppressed or even the middle class .It’s shameful how they bailed out the fraudulent banks and Investment houses that created this financial Ponzi-scheme while Corporation America betrayed Americans by any means to improve their bottom lines . Corporations have become a means to avoid personal responsibility ,and the Justice system just gave them more power .
One of the Founding Fathers said that if we don’t free the slaves now we are going to pay for it later . We paid for it later with the Civil War . If the Politicians don’t do the right thing now ,we are going to pay for it later and the price will be unthinkable, and everything that was fought for in the history of America will not be remembered .
One of the Founding Fathers said that if we don’t free the slaves now we are going to pay for it later .
Wasn’t that Ben Franklin? Late in his life, he became an outspoken Abolitionist.
Well said, Wizard.
One of the main motivators of the American Revolution was the heavy handedness of the East India Co. The English gov (the king) was nothing but a puppet of that early corporation.
It can be said that the East India Co WAS the Enlgish gov. at that time.
Yep.
The founders realized however that that was the nature of pretty much all governments - they are usually run by corporations; be they industrial, financial, or religious corporations. (using the term “corporation” in its more general sense)
Therefore they realized that the best solution was to simply limit the power of the government itself as much as possible - “bind them by the chains of the constitution”. This by extension would limit the powers of these corporations.
That’s why it baffles me that many people want larger government but at the same time less corporate influence. You can’t have both - one comes with the other.
They also tried to outlaw corporations.
Read “Gangs of America” by Ted Nace.
It’s free on-line.
One of many on my “to do” list. I generally don’t have time to actually sit and read stuff, so I get it from the library on CD, burn it to MP3, and listen to it in my car (since my car only has one of those old-fashioned cassette tape thingies, with which I have to use one of those weird-but-works adapter thingies).
+1
Apparently at the time JFK and his brother Bobby were concerned that pushing Civil Rights could affect the next election ,but they did it anyway . It was a moral and lawful issue that the Constitution wasn’t being followed in practice .
There was a time in most of our lives when politicians of both parties still did the moral thing, and were more beholden to the people and the principals of the constitution than they were beholden to money, re-election and political parties.
And then they were assassinated, putting the fear of god into any politician who might ever think of doing the right thing again.
A “measly 15 billion”?
To me that’s a massive amount of money. And given the government track record on bailouts, it’s more good money after bad. And all of it borrowed.
Was thinking it was small relative to the spending for stimilus efforts, TARP, etc.
Lol, didn’t take them long to reject $209k. Aww, I hurt the wittle selwers feelwings. They made they mistake off listing the closing on June 30th. Obviously this FB is trying to hold on as long as possible while simultaneously acknowledging that there is no hope after the tax credit.
My realtor still thinks that we’re the only qualified buyer and he knows we were the only offer. His advice: give them a few weeks of freaking out and counter at $195k when they call back.
I’m telling you guys, there are awesome realtors out there, but they aren’t easy to find.
Muggy,
Love it. Maybe you should offer to feed the squirrels too after your next price cut to 195k when they come back?
You got that right Muggy…counter with a lower offer…Eye likez dat!
You got it Muggy. Each subsequent offer should be at a lower price.
Love it, not only do they have to keep making payments while they cling to the house, they will get less in each subsequent offer!
Muggy, what part of the world are you in?
Pinellas County, FL (Tampa Bay Area). This offer is for a home in Seminole.
Clashes as Greeks protest crisis measures
ATHENS, Greece (AP) — Police fired tear gas and clashed with demonstrators in central Athens on Wednesday as violence broke out after a large protest march against government austerity measures intended to fix the country’s debt crisis.
Riot police confronted scores of violent protesters who hurled rocks, red paint and plastic bottles near parliament, in sporadic clashes that caused little initial damage.
Earlier, more than 30,000 people took part in a peaceful march, as unions staged held a general strike which grounded flights, shut schools and crippled public services in a show of strength against the government.
The 24-hour walkout comes as Greece is considering tougher austerity measures, including possible deeper salary cuts and extensive reforms of the civil service and pensions system, to pull the debt-ridden country out of financial crisis.
Officials from the European Union and International Monetary Fund are in Athens for an inspection of Greek public finances, ahead of a March 16 deadline from the EU to show signs of fiscal improvement or face
I guess the Greek Cypriots have taken their cue from the mainland Greeks…seems that we have a “petrol strike” here on Cyprus. There are 248 service stations but only 35 of them are open. The government passed a law to limit the price of gas at the pumps and threatened to use it. The station owners dared them to do it so, they did. The western half of the island essentially has no gas to purchase and there are very long lines when you do find gas. It was a flashback to the 1970’s for me.
Funny thing is that the real estate market here has collapsed, tourism is down and unemployment is way up but the government intervention which is supposed to protect the public has now started to damage the Cypriot economy even further. The station owners are no saints either but the government started this little tit for tat. European Govt’s. have strange ways of going about getting “justice” for us little folk.
I should have mentioned that the station owners (franchisees) closed their stations in protest rather than charging 1.5 cents less for a liter of gas.
Thanks for the informative post, Mugsy. Didn’t know you were in Cyprus. Hope your situation is good, and that you aren’t too negatively affected by what is going on all around you.
Funny thing is that the real estate market here has collapsed, tourism is down and unemployment is way up
Mugsy,
Hi, Do you know about what % of home sales in Cyprus are financed or cash purchased?
And about what % of homes are bought by foreigners as second homes?
And what is the home price multiple to a local’s yearly income?
Thanks,
I’m not sure about the cash/finance ratio but the majority of homes being built here are purchased as second homes or to rent out to vacationers/workers.
The price multiple is close to 8 or9:1. The average wage here is close to 35K euros. It’s insane but the RE market is off almost 80%. Yes, sales down by 80%.
“majority of homes being built here are purchased as second homes or to rent out to vacationers/workers.”
Motor homes also qualify as second homes. Let’s do away with mortgage exemptions if not in toto at least let’s start with second homes.
I guess the Greek Cypriots have taken their cue from the mainland Greeks
The Greek Cyp Riots - haha!
Officials from the European Union and International Monetary Fund are in Athens for an inspection of Greek public finances
Wow,
Talk about a loss of sovernty…
Stpn –
I think that you meant sovereignty? It’s got the “reign” baked right in!
The investors are alive and well in Hollister, CA. I picked this area to check housing prices since people in SJ area were buying in the highth of the bubble and it should drop faster than along the central coast. Here’s what I found:
1. Sold on 12/17/2009 for $345,001 now asking $499,000. $238 per sq.ft.
2. Sold in 2005 for $867,500 and again on 12/24/2009 for $398,000. Now asking
$569,900. $204 per sq.ft.
3. Same street as above: Sold in 2005 for $870,000 and again on 9/15/2009 for
$799,000. Now asking $749,800. House is 4200 sq.ft (6bed/5bath)
Price per sq.ft range in Hollister from $121 to $400. People putting house bought
in 1999 are trying to get $200 plus over purchase price.
That’s what ticks me off about recent years in the twilight of the Bubble: any half-way decent house that dropped to affordable or near affordable levels ends up “snapped up” by some infestor after being on the market days (or never on the market since the infestors usually have inside connections), and is then flipped at some stupid-high price. Argh!
As a nation, we need to stop thinking of houses as investments to be flipped!
It is the only market where they can quickly move into and out of making money. What else can they flip? ATV, RV, Harley, cars, boats, personal water craft, granite, or flat screen. Nope it is all houses all the time now. Can’t flip CRE, that is toast. So how about T bills? Nope, not enough pay off, so they are left with the crumbs of the housing bubble to try and extract enough to make it worth while. This won’t last long either. Quickly comes the reckoning.
Amen to that, Pondering. This is exactly what has frustrated me so much since the bubble (supposedly) burst.
There has been NO shortage of flippers, and I’m watching both LA and San Diego — same exact thing you’ve described above. Lots of investors purchased at reasonable prices in 2009, only to put them back on this year at peak bubble prices.
I was hoping we had seen the last of these parasites when the bubble burst. My patience with them is growing thin.
From Bloomberg regarding Jobless recover and Bernanke
Manufacturing jobs will be a focus for Senator Sherrod Brown, an Ohio Democrat and a member of the Senate Banking Committee.
“I want to hear Bernanke talk about how he’s going to rebuild American manufacturing,” Brown told reporters. “I look at this economy as more and more tilted to finance.”
“Finance should be a byproduct of growth,” he said. “That’s not helping our economy, that de-emphasis on manufacturing, emphasis on finance.”
Since World War II, the Fed has waited an average of six months after unemployment peaked to begin raising interest rates, and the central bank held off longer when inflation was low, Joseph LaVorgna, a Deutsche Bank Securities Inc. economist, said in a research note in November.
I want to hear Bernanke talk about how he’s going to rebuild American manufacturing, ????????????????????????????????????????????\\
I agree with your sentiment at the end and I think the FED works for the banks not for the US, but Sherrod I think the manufacturing side of things is more dependent on Congress and our trade policy.
The FED is a bank. All they want to do, as their actions demonstrate, is to keep the host body warm while they extract the remaining plasma.
The FED is a bank. All they want to do, as their actions demonstrate, is to keep the host body warm while they extract the remaining plasma.
The NY Times has a photo of Bernanke up on their front page this morning. Behind him in the photo is a projected image with the title “Net Worth Of US Households” and this subhead:
$17.5T
Wealth Destroyed
July 2007 - March 2009
Heckuva Job, Fed!
“I want to hear Bernanke talk about how he’s going to rebuild American manufacturing,”
i wonder what ms. brown would say if ben responded with this?
“senator…the fed’s plan is to allow housing prices to tank to the deepest depths since the great depression…improving housing affordability for the middle class…thus improving the comptetiveness of the u.s. worker with the rest of the world.”
“senator…the fed’s plan is to allow housing prices to tank to the deepest depths since the great depression…improving housing affordability for the middle class…thus improving the comptetiveness of the u.s. worker with the rest of the world.”
That’d be the day!
“senator…the fed’s plan is to allow housing prices to tank to the deepest depths since the great depression…improving housing affordability for the middle class…thus improving the comptetiveness of the u.s. worker with the rest of the world.”
———————–
Whether people like it or not, this is EXACTLY what needs to happen.
..how he’s going to rebuild American manufacturing,
I read an article about how profitable it is to manufacture overseas compared to doing it in the states.
Due to the huge costs of dealing at long distances and with foreign governments, the margin is slim.. something like 2 cents on the dollar.
If labor, government and we citizens work together, can we reduce the cost of manufacturing in the USA by two percent? That seems quite doable, imo.
But chances are that it won’t happen. We’d much rather continue to try to force the world to conform to our fantasy than adapt to the realities of the world.
I’m here to ‘fess up to hiring overseas help to complete some website projects. I’ve since come back to hiring only Stateside subs, with the exception of the Englishwoman who works on the “under the hood” stuff on two of my own websites. (She’s an expert on the content management system that I use. And she’s a nice person.)
I found that the overseas Indians didn’t have the same sense of time urgency as Americans. It took days to get even the simplest things done. And, despite the fact that English words were used, there was a language barrier.
“I look at this economy as more and more tilted to finance.”
How about a return to companies and customers with some capitol? Must every transaction have a percentage for gawd’s children?
Mortgage Demand Lowest Since 1997:
What now, masters-of-the-universe?
http://finance.yahoo.com/news/Home-purchase-loan-demand-at-rb-1475575272.html?x=0&sec=topStories&pos=7&asset=9cd52a405695cff9b75ccfab2864c519&ccode=1
tax savings?
A 15K new buyers tax credit, a 10K repeat buyer credit, and a 5K investor credit.
Problem solved.. For another 8-12 months.
and perhaps a 3k credit for referrals
Oh dear, it’s that pesky “unexpectedly” word again:
http://alturl.com/6vtw
undecipherably, undefeatedly, undeniably,underhandedly, understandably, understandingly, understatedly, undeservingly, undignifiedly, undistractedly, undividedly, undoubtedly, undulatingly, uneasily, unemotionally, unendingly, unenlightenedly, unenthusiastically, unenviously, unequally, unequivocally, unerringly, unethically, unevenly, unexpectedly, unfairly, unfaithfully, unfalteringly, unfamiliarly, unfashionably, unfavorably, unfavourably, unfazedly, unfearingly, unfeelingly, unfemininely, unflappably, unflickeringly, unflinchingly, unfocusedly, unforgetfully, unforgivingly, unfortunately, ungainly, ungallantly, ungenerously, ungenially, unglamourously, ungraciously, ungratefully, ungrudgingly, unguardedly, unguiltily, unhaltingly, unhappily, unharmoniously, unhealthily, unheedingly, unhelpfully, unheroically, unhesitantly, unhesitatingly, unhurriedly, uninformatively, uniformly, unimaginatively, unimpeachably, unimportantly,
There we go again blaming the weather!
Why American Business Fails 2-23-10
Good news: It was a normal day in Sharon Springs , KS, when a Union Pacific crew boarded a loaded coal train for the long trek to Salina.
The Bad news: Just a few miles into the trip a wheel bearing became overheated and melted, letting a metal support drop down and grind on the rail, creating white hot molten metal droppings spewing down to the rail.
The Good news: A very alert crew noticed smoke about halfway back in the train and immediately stopped the train in compliance with the rules.
The Bad news: The train stopped with the hot wheel over a wooden bridge with creosote ties and trusses.
The crew tried to explain to higher-ups but were instructed not to move the train!
They were instructed “The Rules” prohibit moving the train when a part is defective!
Naturally the entire wood bridge burned to crisp plunging the train into a ravine; but rules is rules.
We will post a link to entertaining pictures compleat with burnt orange harvest glow bridge next up.
Kodachrome train/bridge moment:
http://www.rense.com/general89/rules.htm
Key point from the above link: Don’t let common sense get in the way of a good disaster.
The true part of the story ends with the hot wheel over the trestle. The part about the higher-ups is supposedly false, the story (according to snopes) is that by the time the crew traversed the 1/2 mile back to the hot box the bridge was on fire. The crew did the right thing by disconnecting the train (both front and back) from the six cars on the bridge.
http://www.snopes.com/photos/accident/trainfire.asp
Of course the crew was immediately fired.
Well NOBODY will get fired for this because they followed the rules…or they can sue the employer for wrongful termination…and will WIN.
So 1 train full of coal in the ravine and a major link broken…nice tax Loss
“major link broken”
Not really. It’s a branch line, as I recall. And if you look closely, it appears that the cars are empty.
I’ve got a buddy that lives near Sharon Springs. I’ll check with him.
Maybe in some perfect world or on a lucky day.
Besides, ever tried to hire a lawyer when you don’t have a job? “Contingency” is a another one of those myths.
Think of all the broken-window style “green shoots” based on rebuilding the bridge!
Just think of all the jobs that would be created by a war - say a whole world war even! It’s even a proven theory - e.g. the U.S. unemployment rate in WWII went from 19% down to 2% in just 3 years; a quite unprecedented drop.
Not that I’d advocate that of course; I’m just stating that world war is the ultimate pure example of the broken window theory at work. On the surface it looks great for the economy; it’s kind of destructive though if you’re on the receiving end (even if you win the war - e.g. Britain and France).
http://www.arizonarails.com/bad_day.html
counter-theory
It’s the same bridge and fire. Compare the photos. What is rense.com ?
I expect this not a repost. If it it is, sorry, I didn’t expect anyone to beat me to it…
U.S. New-Home Sales Unexpectedly Fell to Record Low
Feb. 24 (Bloomberg) — Sales of new homes in the U.S. unexpectedly fell in January to the lowest level on record, a sign that an extension of a government tax credit may not be enough to rekindle demand.
“The foreclosure flow is robbing demand from the new-homes market and that process seems to be strengthening,”
The lack of jobs is another hurdle. Consumer confidence in February fell to its lowest level since April 2009
http://www.bloomberg.com/apps/news?pid=20601068&sid=aeWDqK73dHgE
I was so expecting the unexpected part.
DJI up 85 nonetheless.
“Party on Wayne!”
“Party on Garth!”
Unexpected by whom?
God,
It must suck to be looking for a job in this day and age….Makes sitting here in Afghanistan not so bad…
http://www.msnbc.msn.com/id/35504954/ns/business-the_new_york_times//
Actually, it has sucked for the entire past decade. It’s just worse now than before. I know plenty of EE’s, ME’s and Programmers who are either unemployed or underemployed (working as testers for $15/hr, etc).. Many of them were able to land temp tech jobs through Volt or Manpower a few years ago, but now not even that is available for them.
If sitting in Afghanistan isn’t so bad, what has this country come to?
I believe its called “Economic Conscription”. Very convenient for the wealthy who no longer have to worry about Junior having to postpone his Ivy League education because he was drafted. There no shortages of “volunteers” for the military these days. At my kids high school 16% of graduating seniors signed up last year.
This past weekend, I helped interview students who were applying to the University of Arizona’s business school.
The most impressive interviewee was a young man who’s currently a community college student taking 20 credits. He also works a total of 24 hours in two days at a local restaurant.
He’s a U.S. Army veteran, and he joined shortly after 9/11. Served in Iraq, delivered oil and other supplies while taking fire, and he came back to the States with PTSD. He was treated successfully and is now a volunteer at the local VA. His gig is helping PTSD vets recover.
After he finished, I turned to my interviewing partner and said, “We don’t deserve these people.”
Great story.
Sad to say, but the military desperately needs bright, middle-class kids. Especially in the combat arms.
In my experience bright, middle class kids can be tricked into doing one enlistment for college money but if you want them to stay longer than that you need to treat them like bright, middle class kids who could be doing something else if they wanted to. The army I saw in the late 80s was unable to do that. Perhaps they’ve changed, but I doubt it…
“I believe its called “Economic Conscription”. Very convenient for the wealthy who no longer have to worry about Junior having to postpone his Ivy League education because he was drafted. There no shortages of “volunteers” for the military these days. At my kids high school 16% of graduating seniors signed up last year.”
Thus, no problem holding back on the airstrikes during this latest Taliban offensive. It’s beyond disgusting that Obama would put our military at increased risk due to concerns that self appointed Hamid Karzai might get upset.
My buddy just got offered a job in Afganistan- to help set up (mobile?) Air Force bases there. He has a job locally but it is on the fence. He makes about $20/hr here. The offer: $185K for a 1 year contract. Dangerous? Yes- but he has no wife/kids and he is contemplating it. I told him to stick around here and stay alive, but the moo-lah is pretty tempting for him at this point. Got to pay for that house! I’m sooooooo glad I found this blog, sold in 2007 and have been renting ever since. Our 2 income family could be 1 at any time- and we’ll move into an apartment, it would suck- but I can live with it. Beats Afganistan. every. time.
Somewhat OT:
I scanned “Craigslist” because we’re looking to hire someone. I figure I should tap into the tax credit gravy train Congress is voting on.
I now know why there’s 12% unemployment! Resume’s suck. The spelling, grammar, and sentence construction on most resume postings makes The Housing Bubble Blog look like Shakespeare.
I just got an e-mail from someone wishing to network with me re: the business of design. I’ve gotten those before. The true meaning is that this is someone who wishes to pick my brain for free.
My reply e-mail consisted of one short sentence:
Be good at design and be excellent at business.
That should exclude about 99% of the general population.
The math sucks too, in my experience.
“Resume’s suck.”
Hmmmmm
sharp eye, al
“I now know why there’s 12% unemployment! Resume’s suck. The spelling, grammar, and sentence construction on most resume postings makes The Housing Bubble Blog look like Shakespeare.”
Hey, I can torture the Kings English just as well as William Shakespeare did.
Don’t let that stop you Reuven. I know many people who can neither spell nor enumerate and have no clue what the 2nd Law of Thermodynamics is and they have better jobs than I.
Market’s up on what headline news?
New home sales hit record low in January?
Bernanke worried about jobs?
Well, it must be because he forecasts low interest rates for a long time to come.
Or maybe because the Gov. is going to give tax breaks to companies that hire from the unemployed (which they should have done a long time ago).
Wall St. marches to its own beat, it certainly doesn’t hear any other.
It would cost less money if they just enacted a penalty tax for outsourcing or manufacturing elsewhere than America . Why shouldn’t Corporation pay for getting a cheaper labor advantage ? They are taking tax revenue out of America and destroying more jobs by every out-sourced job and every new plant moved to foreign lands. Finally there are a few people in the Media that are admitting that we have a serious problem with our lack of manufacturing base and job base in America now.
All countries need to improve their job base in order to thrive ,but we don’t need a gaming of the systems between Countries .
Finally there are a few people in the Media that are admitting that we have a serious problem with our lack of manufacturing base and job base in America now.
U.S. needs to value manufacturing base, then rebuild it, Bill Ford says, Crain’s Detroit Business 2/16/10
a healthy manufacturing base is vital to the strength of metro Detroit and the U.S. economy.
“No economy in the world has ever been strong without a strong manufacturing base,” he said. “Before we can rebuild our manufacturing base, we have to value it.”
Ford said manufacturing is the still the “engine that drives the economy,” as it accounts for 11 percent of the gross domestic product.
Ford is moving 1,000 jobs from Mexico to its Michigan Assembly Plant in Wayne to work on battery production for its 2011 Focus Electric, he said.
http://www.crainsdetroit.com/article/20100216/FREE/100219906#
Ford is moving 1,000 jobs from Mexico to its Michigan Assembly Plant in Wayne to work on battery production for its 2011 Focus Electric, he said.
————-
Wooo-hoooo! Finally, something is going the right way. One down and ???? more to go.
W T O
And don’t forget America exports too. You want an old-fashioned trade war, you will get it.
Bring it on!
Yep. We import more than we export (trade deficit), so I have no problem with a trade war.
We’re fortunate to have plenty of natural resources. We don’t need to rely on anyone else for our basic needs. We can trade with other countries who have the same (or better!) environmental and wage/labor policies that we have.
Let’s trade based on which countries provide the best goods with the lowest levels of pollution/waste, and the best working conditions/wages.
Following that logic, are investors even sure they want to see a recovery at all?
New home sales hit record low in January?
Bernanke worried about jobs?
Well, it must be because he forecasts low interest rates for a long time to come.
Only one reason why the combination of these things would cause the market to go up instead of down - inflation. Or at least expectations of inflation, thus leading to people using stocks as a hedge.
I don’t get it - Barry is saying recession is over and Benny is worried about jobs. They need to get a unified message to restore the hope that Barry wants and the hell that Benny wants.
Either way, I can live with the message. If all is good, then raise the rates back up to where they should be - 8% sounds about right. Or if all is not good, acknowledge it and quit throwing the last of our good money after extremely bad. Reward those that have lived within their means!!
The whole problem with this big “recession is over” debate is the very definition of “recession”. It can be one of two things:
A. The act of shrinking (recessing)
B. The state of being shrunk (recessed)
Ben & Barry’s use, most of the MSM use, and in fact even the NBER definition, is A.
Most of the layman’s use (e.g. when looking at a high unemployment rate) is B.
Technically, according to definition A, unemployment could remain near 10% indefinitely, with zero GDP growth, and we’re still out of the recession. 909% of people you ask on the street though would consider us still in it, because they view it as B.
P.S. to the subject - it seems that Ben’s plan is to keep interest rates low according to the B definition; to not raise them for instance until unemployment is down significantly.
Just because you aren’t get sicker doesn’t mean you are no longer sick.
Not sure if this was posted yesterday or not - either way here’s a repost.
Nearly 25% of all mortgages are underwater
…
First American CoreLogic, the research firm that monitors housing equity, reported Tuesday that 11.3 million homeowners — or 24% of all homes with mortgages — were underwater as of the end of 2009. That’s up from 23% and 10.7 million borrowers three month earlier.
…
So here’s a question. Why in the world is the rate of underwater homes still going up so much, given that prices were generally flat in Q4, and rising the 6 months or so before that?
Seems odd - something doesn’t seem to jive.
I’m really curious to see the forthcoming Fed flow of funds report for Q4, to see if there was perhaps an unexpected rise in mortgage debt. It had been falling somewhat actually, from $11.2T in Q1 ‘08 to $10.8T in Q3 ‘09. It doesn’t seem like there would be though, given the still-low rate of new mortgages.
Probably becauses prices aren’t flat, they’re still falling in most markets.
So you’re saying the Case/Shiller data is wrong? It shows only 6 out of 20 metro areas falling, both MoM and QoQ. The other 14 are rising.
P.S. see my linked chart below for a graphical summary.
I have no idea if Case/Shiller is right or wrong.
New mortgage volume might be slow, but refinancings stayed up last quarter. Maybe the HELOC spigot needs a new washer?
Clipped from a piece by Martin Weiss…
And anyone who thinks a Greek bailout will end the crisis, must think again.
According to Otmar Issing, former member of the European Central Bank’s Executive Board,
“Once Greece was helped, the dam would be broken. A bailout for the country that broke the rules would make it impossible to deny aid to others.”
Bottom line: The euro is now between a rock and a hard place:
Damned if the stronger euro members DO bail out the weaker members: To do so, they will have to print trillions of unbacked euros, which, of course, would crush its value on the world market. And …
Damned if they don’t: Because allowing Greece, Portugal, Spain, Italy, Ireland and other weak nations to default on their debts would cause a stampede out of euros, which, of course would crush its value on the world market.
The Euro was introduced at 110 to the dollar. They set it that was so it could fall a little and reach parity, which it did a few years later.
The Euro could get “crushed” quite a bit and merely get back to where it started.
You have to look at this and say: Well, so the Greeks will do what we should have done write off a lot of the bad debt.
Then they will have to live within their means. Big fricking deal. Experience higher borrowing costs. Good. Further making them live within their means.
They don’t bail these guys out and if the Euro survives it emerges as the stronger currency. Bail them out and as mention the flood gates are open.
I don’t understand the continual drive to stop working. Hell, I like to do engineering work. Design is one of the most invigorating things. You invent or create stuff or help realize some kind of product dreams. Must be the government jobs.
Not everyone is fortunate enough to have a challenging, invigorating, or interesting job. Not everyone is capable of doing such work. And even if the work is interesting, a bad manager can make it hell. And then there is burnout.
That said, I expect to find something interesting that will pay me a reasonable wage until I am no longer capable of any work. And since I find so many things interesting and need very little, that should be in the realm of the possible.
Casket Makers Dig In as Sales Take Hit
WSJ ~ FEBRUARY 24, 2010
As their sales slow, some casket makers worry their business is hitting a dead end.
Sales of caskets have been declining for years as more people choose cremation. But the economic slump is compounding the industry’s woes as those who do pick caskets buy cheaper, more spartan accommodations for the hereafter.
In response, casket makers are diversifying, building less expensive models and expanding cremation offerings. The country’s biggest casket maker, Hillenbrand Inc., parent of Batesville Casket, is going outside the funeral business altogether. Earlier this year it said it would spend $435 million to buy K-Tron International Inc., which makes factory equipment.
“We are a very significant player in an industry that isn’t growing,” explains Hillenbrand Chief Executive Ken Camp.
Part of the problem is people like Marc Kruskol, a 52-year-old publicist in Palmdale, Calif. He doesn’t want a casket burial regardless of how strong the economy is, he says. When he dies, he wants to donate his organs and be cremated. Traditional burials are a waste of cash, he says. “It’s like taking a bag full of money and burying it.”
Cemetaries are creepy. Ashes to ashes, dust to dust. A favorite spot - lake, river, or forest beats cold marble slab any day!
A pilot told me one that if he was in an airplane where a fatal crash was unavoidable, he was going to drop trou, turn around in his seat, and put the control column right up against his spincter.
Said it would take the NTSB years to try to figure that one out…….
Nice. We just traded dog tags amongst ourselves whenever we were on a malfunctioning C130, which seemed to happen every other flight. Just something to screw with the army, and hey, if our parents ended up unknowingly burying each other’s kids, worse things have happened.
Actually, do away with embalming and caskets and just be buried in the ground. Truly dust to dust. That’s the ‘green’ way.
Seriously. I wish they’d just market a canvas body bag. Fully biodegradable, no embalming chemicals. Dust to dust, as intended.
And then exhume them and put them in an ossuary the way they used to.
Alas poor Yorick…
I knew him well, too.
Hello lovely people of the hbb.
I have been on the Los Angeles redfin boards and I just recruited some folks to come onto our blog. So, you may see some new visitors around, let’s welcome them.
Tankxs!
Welcome to a wonderful diverse collection of HBB contributors that dispense common sense & free sharing ideas… sans the “hype” & need to be “RIGHT” about “everything”.
Speaking of new participants, Marquis Dee wrote a very interesting long post in yesterdays Florida thread that must have showed up very late. Nicely written reflection of lifetime observations on housing in Detroit, Boston, Cleveland.
I posted welcome comment encouraging him / her to re-post it here today.
But I am right about everything.
Hello lovely people of the hbb -
Just a heads up.I’ve been hanging out on the redfin Los Angeles boards, and I’ve invited some of the folks to check out Ben’s blog. So, if you notice some new visitors, be sure to welcome them to the party.
Sure hope these new guys don’t expect us to “do stuff” on a first date or anything…
Plus, tell them not to use all the bytes when they blog, or the server will get clogged up and Ben will have to call a plumber.
44% of area’s mortgages are underwater
Jacksonville Business Journal ~ 2-24-10
More than 44 percent, or 147,498 of the residential property mortgages in Jacksonville, were in negative equity in the fourth quarter, and another 4.9 percent, or 16,270 were near negative equity, according to First American CoreLogic Inc.
Jacksonville’s negative equity percentages were nearly double the national average of 24 percent. Nationally there were 11.3 million residential properties in negative equity, up from 10.7 million and 23 percent at the end of the third quarter, according to a new report.
Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgage than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.
According to the report by Santa Ana, Calif.-based real estate information company First American CoreLogic, 48 percent of Florida’s residential mortgages were under water in the fourth quarter. Florida is also one of five states where negative equity is concentrated. Nevada, which had 70 percent of all of its mortgaged properties underwater, had the worst concentration of mortgages under water. The other states include Arizona at 51 percent, Michigan at 39 percent and California at 35 percent.
Negative equity in the house sounds much more sophisticated and not as bad as underwater. Poor, but proud FBs don’t want to accept that it is actually their own fault - especially the “highly educated” ones!!
45.4 percent here, I`m feeling pretty good about that 6 month lease I just signed.
Nearly 50 percent of Palm Beach County home loans under water or close to drowning
by Kim Miller
First American CoreLogic released its 2009 fourth quarter report on negative equity home loans this week, finding 45.4 percent of Palm Beach County mortgages are upside down. Another 3.6 percent were nearly underwater with less than five percent equity.
Deflation Is Coming and There’s Nothing Bernanke Can Do About It, Says Robert Prechter ~ Feb 24, 2010 Investing, Recession, Banking.
Contrary to popular belief, noted technical analyst Robert Prechter says the extraordinary action taken by the Federal Reserve to bail out the economy will not lead to runaway inflation.
“Deflation is gaining the upper hand very, very slowly, but it’s happening,” Prechter the founder of Elliott Wave International tells Tech Ticker. Of course, as anyone familiar with his work knows, he’s been saying this for years.
Why should we believe him now?
For the first time since 1982 core inflation fell in January as measured by the consumer price index. Prechter says it’s even more noteworthy that it’s happening “in the face of this tremendous amount of stimulus…from the government and a real attempt at stimulus from the central bank.”
Prechter describes the forces of deflation as a “socio-nomic” shift in social mood that will prevent Federal Reserve Chairman from printing too much money. “At some point, the voters - as you can already see from the Tea Parties - are going to start saying we’ve had enough” with government spending and bailouts.
If there was nothing he could do about it, we would have already had massive deflation, across all categories. As it is we’ve only had housing deflation, and even that seems to have stopped (prematurely).
Thanks for that post, wmbz.
Again, the only “deflation” I’m seeing is wages.
And the size of the packaging……
SEC puts new curbs on short-selling
SEC adopts new ‘circuit breaker’ curbs on short-selling in bid to buttress market stability ~ February 24, 2010
WASHINGTON (AP) — Federal regulators on Wednesday imposed new curbs on the practice of short-selling, hoping to prevent spiraling sales sprees in a stock that can stoke market turmoil.
The Securities and Exchange Commission, divided along party lines, voted 3-2 at a public meeting to adopt new rules.
The rules put in a so-called circuit breaker for stock prices, restricting for the rest of a trading session and the next one any short-selling of a stock that has dropped 10 percent or more.
Short-sellers bet against a stock, in a practice that is legal and widely used on Wall Street. They borrow a company’s shares, sell them and then buy them when the stock falls and return them to the lender — pocketing the difference in price.
The SEC move followed months of wrestling with the controversial issue. The SEC asked for public comment last April on several alternative approaches to restraining short-selling, and a bipartisan group of senators have been pushing the agency to act or face legislation.
hmmm…
timing is everything
Yep. If anything, this tells me they’re expecting another downdraft.
KB Home returns to the area
Washington Business Journal - 2-24-10
KB Home will open a new townhouse community in Alexandria this weekend, its first development in the Washington area since 2006.
Huntington Reserve, on Huntington Avenue near the Huntington Metro station, will include 85 three-story townhouses from 1,800 to 2,300 square feet. KB Home says the townhouses are all being constructed as Energy Star compliant. Prices start in the high $400,000s and are being primarily marketed toward first-time homebuyers.
Los Angeles-based KB Home, which pulled out of the Washington market and mid-Atlantic region in 2008, said in September it planned to resume building here as the housing market showed signs of recovery. The company retained land options in the region, anticipating its return to the area.
KB Home also stopped building in Chicago in 2008 as sales slowed there.
Many of the homes KB Home intends to build in the Washington area will be smaller houses that cost less to build.
3 story townhouse? 2000 sqft? 400K?
Are there still that many morons out there?
“Are there still that many morons out there’
Oh yeah — just offer them a little piece of gubbermint cheese, a granite countertop or a rebate check and they come out of their holes.
They’re really easy to catch.
10 Job Sectors in Decline ~~ Yahoo Jobs 2-24-10
People in almost every profession may feel like jobs are scarce right now. For many industries, this is a temporary situation. But jobs in some fields are expected to continue disappearing even after the economy picks up.
Is your industry on the decline? The federal government projects that a number of industries will lose jobs from 2008 to 2018.
“You can’t sit around and wait for news to come out about what’s going to happen to your industry,” said Alexandra Levit, author of “New Job, New You.” “You have to be proactive about this.”
Disappearing Jobs
Here’s a list of the top 10 industries expected to lose the most jobs by 2018 — and what to do if you’re working in one of them:
1. Department stores: Projected to lose 10.2 percent of the 1.56 million jobs they had in 2008.
2. Semiconductor manufacturing: Projected to lose 33.7 percent of the 432,000 jobs it had in 2008.
3. Motor vehicle parts manufacturing: Projected to lose 18.6 percent of its 544,000 jobs.
4. Postal service: Projected to lose 13 percent of the 748,000 jobs it had in 2008.
5. Printing and related jobs: Projected to lose 16 percent of its 594,000 jobs.
6. Cut-and-sew apparel manufacturing: Projected to lose 57 percent of its 155,000 jobs.
7. Newspaper publishers: Projected to lose 24.8 percent of its 326,000 jobs.
8. Mining support jobs: Projected to lose 23.2 percent of its 328,000 jobs.
9. Gas stations: Projected to lose 8.9 percent of its 843,000 jobs.
10. Wired telecom: Projected to lose 11 percent of its 666,000 jobs.
Note: Not a F.I.R.E. job amongst ‘em!
That bonked me over the head too.
And with the predictions of the education and health care bubbles bursting, what’s left?
Finance
“…“You can’t sit around and wait for news to come out about what’s going to happen to your industry,” said Alexandra Levit, author of “New Job, New You.” “You have to be proactive about this.”…”
And you’ll know exactly which industry to jump to… how?
Here’s an updated chart of recent housing prices per the Case/Shiller data the other day.
One thing of interest - note the delta between the 10-city, 20-city, and national indices. This makes sense, since the metropolitan areas tended to be more “bubbly” than rural areas during the bubble (10-city index being index being “more” metropolitan than 20-city index, which was more metropolitan the the national average as a whole). However as prices come back down - the delta has come down some but still remains, with a wider gap than existed on the front side of the bubble (about 2002 prices).
Seems like the reason for this is a general migration of people from rural to metropolitan areas, with subsequent reflection in prices. While prices in metropolitan areas have dropped somewhat faster than rural - the new baseline level (such as it is) for met areas is still well above that for rural areas.
Just thought I’d point out that observation. Thoughts?
Seems like the reason for this is a general migration of people from rural to metropolitan areas,
I would go with that. I can’t remember how much gas was in 99 but it was a lot less. It also depends how they measure “metro areas” and how much suburb that includes. In some cities, suburbs are pretty far away and many have been calling for the decline of the suburbs as energy costs rise.
And were most bubble new homes built outside or inside the defined “metro areas”? That could affect the supply greatly too.
I think if one were to dig one could find the details, though I’m too lazy and it’s not worth it. I believe I saw once where the metro areas do include suburban (e.g. DC metro area includes probably 5-8 counties). Key is though they don’t include strictly urban areas, which is probably 80% of all land area, maybe 30-40% of all houses.
IMHO, the reason the metro areas haven’t fallen as much *yet* is because the govt intervened in the market just befdesirable to the most desirable. By the time the govt got involved, the lower end had already dropped (~50%, in many cases), the mid-tier was dropping, and the higher end was relatively flat/getting slightly weaker. Basically, the market has been frozen in time as the govt passed their foreclosure moratoriums, and shoveled trillions of dollars into the housing and mortgage markets.ore those “higher-end” areas got hit. That’s why so many of us are frustrated with what we see as still very overvalued houses.
Price drops roll from the least desirable to the most desirable. By the time the govt got involved, the lower end had already dropped (~50%, in many cases), the mid-tier was dropping, and the higher end was relatively flat/getting slightly weaker. Basically, the market has been frozen in time as the govt passed their foreclosure moratoriums, and shoveled trillions of dollars into the housing and mortgage markets.
Architect index drops sharply in January
Birmingham Business Journal - 2-24-10
A leading economic indicator of construction activity dropped three points in January, beginning the third year of negative conditions.
The American Institute of Architects said its January Architectural Billings Index scored at 42.5 in the first month of this year, down sharply from 45.4 in December, said a news release. Any score below 50 indicates a decrease in billings.
The AIA said the culprit is the same - lack of availability of credit in the marketplace for new projects.
Update on the townhouse I rent, that was put on the market in mid-January. Bear in mind this is in Silicon Valley, where the prices dropped but sales never have ground to a complete halt. (Because its different here…hehe [how do you type a Beavis & Butthead hehe?]).
For 4 weeks, we had a dribble of realtors and their clients wandering through - I would say a total of maybe 12. I know this because they have to call first.
For the past 2 weeks - nobody. Not a one. So I happen to believe that the doom and gloom really has hit main street now. I believe the property is overpriced by $100k and I’m thinking, now everyone else is believing it also. But the mindset here is - you can charge what you want because the weather is gorgeous…………
I’ve noticed what might be a slowdown in the past couple of weeks, too. It’s too early and to small to tell if it means anything, but it would be interesting to see if the downturn is back.
One other thing, though, is that listings get A LOT of action when they’re first listed, then the buyers go off to the next hot thing. That’s why it’s so important to list a property at a very good price when it first hits the market. After awhile, people think there’s something wrong with it, and they won’t bother to take a look.
Nearly 50 percent of Palm Beach County home loans under water or close to drowning
by Kim Miller
First American CoreLogic released its 2009 fourth quarter report on negative equity home loans this week, finding 45.4 percent of Palm Beach County mortgages are upside down. Another 3.6 percent were nearly underwater with less than five percent equity.
Nationwide, 24 percent of all residential properties with mortgages were in negative equity, according to the report. That’s 11.3 million homes, up from 10.7 million at the end of the third quarter.
Negative equity continues to be concentrated in five states: Nevada, which had the highest percentage at 70 percent, Arizona (51 percent), Florida (48 percent), Michigan (39 percent) and California (35 percent).
Some people might wonder why I don’t quote Authority figures and the media very much . You have to respect something to quote it and also believe it’s the truth . I have seem so much PR hype BS throw out in the last 5 years that I want to puke . The ongoing lack of transparency has been insulting .
Congress conducts Kangaroo Court investigations after the fact and after they already shell out the money and you can’t do anything about it after the fact. Oh ,Hank Paulson didn’t do what he said he was going to do ,but Congress gave him blank check authority to do what-ever he damn well pleased . And than Congress complains about it later as if they didn’t realize they were giving Paulson Authority to do anything (another
power player from Goldmans ) .
And to think that the Politicians of today think the answer lie in pumping up real estate ,a asset that was overpriced as a direct result of faulty
lending and a fake mania and the rigged financial systems that were a Ponzi-scheme . Those financial systems are still in place . The Insurance monopolies are still in place . The new CC laws are still allowing usury .
Some people would say ,”Just invest in Mega Banks and Investment firms because they are the chosen ones and you will win .” Sorry ,I don’t invest in anything that might win in the short run ,but take the Country down in the long run .
Well, you have my respect housing wizard. I agree with you on all counts for whatever that is worth. Keep up the good posts. -carl
Ditto that. Another good post, Wiz.
Tax hike rejected, layoffs loom in Troy
Feb. 24, 2010 ~ U.S. News~UPI Newsletter
TROY, Mich., Feb. 24 (UPI) — The mayor of Troy, Mich., says 47 police officers will be laid off and the library will be closed down following voter rejection of a proposed tax increase.
Mayor Louis Schilling said the city’s $5.6 million deficit makes it impossible to continue business as usual.
“Even with the privatization and concessions, we’re still going to have to make cuts,” Schilling told the Detroit News after the results of Tuesday’s vote were posted.
Opponents of the $9 million tax hike cheered the outcome as a blow against machine politics in the Detroit suburb.
Cash-strapped LA going after unlicensed dogs ~ Feb 24
LOS ANGELES – Cash-strapped Los Angeles is going to the dogs — literally.
The City Council voted Tuesday to have two departments share information in order to track down people who haven’t licensed their pets.
Council President Eric Garcetti estimates two-thirds of the city’s dogs are unlicensed. Licenses cost $15 for a sterilized dog and $100 for an unaltered pet.
Getting all dogs licensed would mean at least an additional $3.6 million in fees to the city.
The Department of Animal Services has eight full-time people whose job is to find and license dogs. The Department of Water and Power keeps a meter-reader database of homes with dogs. The council ordered the departments to coordinate to find the pooches.
“Getting all dogs licensed would mean at least an additional $3.6 million in fees to the city.”
Let`s see, at $100 a dog those 8 people will only have to run down thirty-six thousand dogs to get to $3.6 million and that`s if none are fixed.
“I don’t own the monkey…..he just lives with me……..”
Can’t LA slap fees on pretentious wankers instead?
I’m not one to agree with this, that, and the other effort to go after things, but, in this case, I agree with LA. Especially on the difference in feeds between sterilized and unaltered pets.
In Tucson, a lot of the unlicensed dogs are of the pit bull variety. We’ve had them in this neighborhood. I was almost attacked by a couple of them a few months ago. Shortly after my near-miss, a kid getting off the school bus was chased by the same two dogs. He wasn’t injured, fortunately.
However, he did call 911, and the cops came out right-quick. They went to the owners’ house, and guess what, they denied that the dogs were theirs and that they’d never seen them before.
Well, the cops did a “knock and talk” tour of the neighboring residences. Not only did the neighbors finger the dog-deniers as the rightful owners, they also said that the dogs weren’t neutered and had a tendency to get loose.
I don’t know if the cops cited the dog-deniers, but I do know that animal control came and removed them from the neighborhood. And I also know that the neighbors are keeping an eye on the dog-deniers’ property. There are things going on there that, shall we say, don’t look legal.
IMHO, going at this problem from the licensing angle is going to hit a few fighting dog breeders in the pocketbook. And that’s going to be interesting, to say the least.
For more on this topic, visit this site. A friend of mine developed it after she survived a pit bull attack in Washington State.
The Department of Water and Power keeps a meter-reader database of homes with dogs
That bothers me. Homeland Security?
Hardly, it’s so the meter readers don’t get tore up.
This is quite a problem. Postal workers have to deal with it too.
so the meter readers don’t get tore up
Ahhhhh. No problem. Thanks for that.
**Housing Anecdote Alert**
1) Brother’s house at 310K is in escrow with a 290K short sale next door. Fingers crossed for him to sell/close soon. I think that he’s bringing a bit of cash to the table as well.
2a) The Napa condo my partner and I are living in (and moving out of this weekend) was bought for 340K by her friend’s husband. It was sold to them in 2006 by her husbands father. D’oh. It is now worth 140K. And guess what the rent is? 1400/mo. Guess what they father’s buyng price was in 1998? 140K. Their ARM resets in three months and they don’t know what to do.
2b) And now the woman from whom they rent their house also in Napa needs to sell it from under them also at a short sale or walk away. Don’t know the status of the LL’s mortgage, but the statistics would suggest that it’s an ARM.
More and more people I talk to are talking strategic default or having to cash out their 401k for the money to bring to the table for a short sale.
And the walls came a-tumblin’ down…
MrBubble
Good luck to your brother, Mr. Bubble.
Even though a lot of people like to portray walking away as a bad/sad thing, it has to feel refreshing to be out from under unserviceable debt.
FBI raids Toyota supplier Denso in antitrust probe
Feb 24
NEW YORK (AP) - Toyota supplier Denso Corp. says the FBI and Department of Justice have raided its U.S. headquarters as part of an antitrust investigation.
Denso spokeswoman Julie Kerr says the supplier’s office, located in Southfield, Mich., was raided on Tuesday. She says the company is cooperating with the investigation, but declined to offer details of what the government was looking for.
Kerr says the investigation is unrelated to Toyota’s recent recalls. Denso is a major parts supplier for Toyota and is one of two suppliers of its gas pedals. While gas pedals from the other supplier were involved in Toyota’s sticky accelerator recall, Denso’s have not been implicated.
But amazingly, they can’t seem to manage any kind of raid on Goldman Sucks
+12 billion
Seems like TM doesn’t have a friend in the world lately. Woe is the company caught in the crosshairs of crusading politicians.
GM to end Hummer line ~
Business First of Louisville - 2-24-10
General Motors Co. will shut down its Hummer brand after a deal to sell it to Chinese heavy equipment maker Sichuan Tengzhong Heavy Industrial Machines Co. fell through.
“One year ago, General Motors announced that we were going to divest Hummer, as part of focusing our efforts on Chevrolet, Buick, GMC and Cadillac going forward,” John Smith, GM vice president of corporate planning and alliances, said in a news release.
“We have since considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed,” Smith added. “GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.”
Just saw this on Marketwatch, good riddance to these monsters and all their ribbon magnets…
A neighbor has a bumper sticker (on her compact car) that says, “There’s nothing dumber than a Hummer.”
“There’s nothing dumber than a Hummer.” lol
Karma baby…for that Cheney-Shrub tax credit!
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
&
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
I wonder if it fell through before or after they got access to the designs for the original H1.
Have they been able to unload anything?
Saturn - RIP
Pontiac - Didn’t even try - RIP
Hummer - RIP
Opel - ??
Get yer hummer now or be priced out forever - they aren’t making anymore hummers!!
Maybe the next bubble is a hummer bubble
I’ve always been a fan of a good hummer.
LOL - I was wondering if someone was going to say that.
When I first saw this I misread it saying the deal for us to give Hummers to the Chinese had fallen through.
I mean, I know China is holding about a trillion dollars in T-Bills and reserves, but seriously - just because we got forced to collectively “service” Wall Street, does that mean it has to be LITERAL with China? Then I realized the article was talking about the Hummer vehicle.
This time, anyway.
“Do I look like Mrs. Obama?”
I knew they should have built civilian SWAT Response Vehicles or a handy dandy light tank. Now, those puppies would have sold in America.
http://www.fuh2.com/index.php
Enjoy the one-finger salutes to Hummer H2s and their owners.
Thankxs…goes well with Merlot
(Hwy wonders what it cost for AAA insurance per year)
“The H2 is a gas guzzler. Because it has a gross vehicle weight rating over 8500 lbs, the US government does not require it to meet federal fuel efficiency regulations. Hummer isn’t even required to publish its fuel economy (owners indicate that they get around 10 mpg for normal use). So while our brothers and sisters are off in the Middle East risking their lives to secure America’s fossil fuel future, H2 drivers are pissing away our “spoils of victory” during each trip to the grocery store.”
“The H2 is a tax loophole. Under the current tax laws, business owners can deduct nearly half the cost of their H2s. If you are in the highest tax bracket, that’s a tax savings of nearly $10,000! The government rewards you more savings for buying an H2 than you’d get for buying an electric car.”
Tuns out I’m a redneck!
Are you a Liberal, a Conservative, or a Redneck?
Here is a little test that will help you decide.
The answer can be found by posing the following question:
……………………………………………………………………….
You’re walking down a deserted street with your wife and two small children.
Suddenly, a mugger with a huge knife comes
around the corner, locks eyes with you, screams obscenities,raises the knife,and charges at you.
You are carrying a Kimber 1911 cal. 45 ACP, and you are an expert shot.
You have mere seconds before he reaches you and your family. What do you do?
……………………………………………………………………….
Liberals Answer :
Well, that’s not enough information to answer the question!
Does the man look poor or oppressed?
Have I ever done anything to him that would inspire him to attack?
Could I possibly swing the gun like a club and knock the knife out of his hand?
Does the pistol have appropriate safety built into it?
Why am I carrying a loaded gun anyway, and what kind of message
does this send to society and to my children?
Does he definitely want to kill me, or would he be content just to wound me?
If I were to grab his knees and hold on, could my family get away while he was stabbing me?
Should I call 9-1-1?
We need to raise taxes, have paint and weed day and
make this a happier, healthier street that would discourage such behavior.
This is all so confusing! I need to debate this with
some friends for few days and try to come to a consensus.
……………………………………………………………………….
Conservatives Answer: BANG!
……………………………………………………………………….
Redneck’s Answer:
BANG! BANG! BANG! BANG! BANG! BANG!BANG! BANG! BANG !
Click… (Sounds of reloading)
BANG! BANG! BANG! BANG! BANG! BANG! BANG! BANG! BANG! Click
Daughter: ‘Nice grouping, Daddy! Were those the Winchester
Silver Tips or Hydrashocks?! ‘
Son: ‘Can I shoot the next one?!’
Wife: ‘You ain’t taking THAT to the Taxidermist!!!!!!
That’s a redneck for you: wasting perfectly good ammo in another clip when the first one did the job.
Anything worth shooting, is worth shooting twice.
I miss my guns…
http://www.youtube.com/watch?v=PapZO7NXB3Q
Rule #4 for surviving in Zombieland: always double-tap.
I`m Conservative.
I’ve been around a little killing, some darned good fights and a lot of hospitals.
Seem like everyone enjoys seeing a little blood…until it’s their own.
Hey gang, the real definition of a redneck is someone who doesn’t even notice when the stock market crashes.
I like that one, Lost.
What Is a Dollar?
by Edwin Vieira Jr.
Mr. Vieira is an attorney specializing in constitutional law. He is the author of numerous publications on monetary law.
This is a condensed version of the monograph “What Is a Dollar?,” distributed by the National Alliance for Constitutional Money. All rights to this condensed version are reserved by the National Alliance for Constitutional Money, Inc.
The question “What is a ‘dollar’?” seems trivial. Very few people, however, can correctly define a “dollar,” even though a correct definition is vital to their economic and political well-being.
http://www.thefreemanonline.org/columns/what-is-a-dollar/
I bet some poor guy on the street without a dollar to his name can tell the good lawyer what a dollar is.
In 1970s money, it’s about 10 cents.
Kinda easy isn’t it? It’s 100 cents.
Senate seeks bank reform, Obama weighs in
WASHINGTON (Reuters) - Key senators pushed for a bipartisan agreement on a package of reforms to tighten rules for financial industry behavior as President Barack Obama on Wednesday blasted critics who call his policies “socialism.”
Negotiations for some kind of Senate pact, possibly ready by early next week, seemed to build as Senate Banking Committee Chairman Chris Dodd and Republican Senator Bob Corker of Tennessee prepared to meet Treasury Secretary Timothy Geithner.
“We’re working, a lot of members are, the door’s open,” Dodd told reporters after addressing the Credit Union National Association. A spokeswoman said later it seemed likely a bill setting out reform proposals will be ready next week.
Obama, speaking to the Business Roundtable, a lobby group for top executives including Wall Street titans, sought to defuse some opposition to reform that he claimed was grounded in a misrepresentation of administration objectives.
“We have arrived at a juncture in our politics where reasonable efforts to update our regulations, or make basic investments in our future, are too often greeted with cries of ‘government takeover’ or even ’socialism,’” Obama said, adding he was “an ardent believer in the free market.”
Can’t wait until we get to see what kind of band-aid policies the senators propose to put on the gunshot wound.
I’ve heard the Consumer Financial Protection Agency and the Volcker rule are unlikely to succeed. Two of the most important reforms I can think of are going to fall by the wayside. All I can say is, I’m going to vote against everyone who voted against them this fall.
Agree that these are two of the most important features of any bill — along with creating a transparent market for derivatives/insurance.
Public college tuitions spike 15%, even 30%
February 24, 2010
New York (CNNMoney.com) — Tuition at many public colleges and universities is skyrocketing, thanks to state budget deficits that have choked off funding for higher education.
The University of California, for instance, estimates a 30% increase in the 2010-2011 year. “California’s $20 billion deficit will make it hard for the [state's] legislature to provide funding to the schools,” said Patrick Lenz, UC Berkeley’s budget administrator.
Next year’s tuition numbers aren’t final, since many states are still hashing out their budgets. But one thing is certain: Rates are going up, and the schools that will be hit the hardest are in the states that have seen the worst of the economic downturn.
For example, the Universities of Nevada, Florida, and Washington, each estimate that their tuitions will jump 10% to 15% next year.
University of Washington’s Associate Vice Provost, Gary Quarfoth said the school expects to raise rates by 14% to help make up for a $21 million cut in funding from Washington state.
Here in Tucson, the University of Arizona is trying to justify a tuition increase to the levels of its “peer” institutions. Only problem is, the institutions that it names as peers are much more selective than the UA.
Banks don’t care where the payments come from. Willing to “help” jobless and make themsevles look like good guys while the treasury pays the tab: You Gotta Be Kidding Me!!!
http://www.reuters.com/article/idCNN2419735720100224?rpc=44
“No, I am not shitting you.” - Arnold Schwarzenegger in Terminator 3.
Roidy
Will they ever stop kicking this can…and making things worse in the process?
It seems that every new program to “save the homeowners” is more ridiculous and surreal as time passes.
There is no way they can justify these actions.
This for anyone who still might think the current political system is pure. If this doesn’t make you sick nothing will.
http://tiny.cc/8bHFy
A little humor from Maxine:
The economy is so bad, if the bank returns your check marked ‘insufficient funds’, you call and ask if they meant you or them………..
Wow, I just saw that Sea World lady during a conference in September. I remember thinking the whole set-up was insane.
Please elaborate.
The NPR news story seamed to be trying to soft peddle the fact that a large killer whale grabbed a woman from the side of the pool and drowned her.
Don’t you mean a large ocean-going mammal kept captive for the enjoyment of humans?
…but yeah, I was hoping Muggy would follow up with what he meant by “set-up was insane.”
So what happens to the whale? Release back into the wild? Extermination? What?
Arguments could be made that you couldn’t put a killer whale that apparantly likes to kill people back into the ocean. Nobody in the surfline would ever be safe again.
(Not saying I agree, just saying that it is a good argument.)
But then, do you really want to kill the thing?
Damn weather — screwing up home sales again! Who moved my housing market green shoots?
Economic Report
Feb. 24, 2010, 11:13 a.m. EST
New-home sales fall to record-low level
Tax credit can’t halt decline to 309,000 annual pace in January
German economy stagnated in fourth quarter
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — Sales of new U.S. homes plunged 11.2% in January to a seasonally adjusted annual rate of 309,000, the lowest rate on record dating back to 1963, the Commerce Department estimated Wednesday.
The third-straight drop in sales on a month-to-month basis was unexpected. Economists surveyed by MarketWatch forecast sales to rise slightly, to a pace of 355,000, with buyers taking advantage of a new federal tax credit. Read our complete economic calendar and consensus forecast.
“The housing market remains very, very distressed,” wrote Dan Greenhaus, chief economist for Miller Tabak & Co.
“There may have been some weather-related issues playing havoc with the sales data but clearly, these results are extremely unnerving,” wrote Jennifer Lee, an economist for BMO Capital Markets. “There is nothing positive to glean from this report.”
…
So - we had a major storm on December 19th, and a major storm on February 6th (in the east at least - a few days earlier in the west).
None in January.
Sorry. Not the weather.
If anything the weather would have pushed some sales from December into January.
Now February I could see. That was one heck of a storm, and basically shut down much of the east coast for 2 days minimum; 1/10 of the 20 working days in February. Many areas had little function for a whole week.
“Now February I could see.”
Sounds like we might be on track for another record low new home sales figure for February? Thanks a lot, global warming!
First off, those arguing that housing is rebounding have been pointing to sales activity and price action where during the second half of 2009? For the most part they talked about the Sun Belt - not the Northeast and mid-Atlantic. So if we follow their own argument, the areas hit worst by the snowstorms are not those they were saying are the source of the rebound.
Haven’t foreclosures recently run at a 300,000+ level per month? I am thinking we may have recently reached the point where foreclosures (which add to supply) are happening faster than new home sales (which remove supply).
Comments?
Correction: I guess new home sales technically don’t impact the supply of existing homes, as a newly built home becomes a sold home; i.e., there is no net game to used homes on the market when a new home sells.
By contrast, 300,000+ foreclosures would be expected to eventually add 300,000+ to existing home supply.
On the other hand, if the non-foreclosure market balances demand, then 300,000+ foreclosures would be expected to add an additional 3.6 million used homes to supply over the course of a year. I am probably double counting somehow here?
Posting late in the day so not sure how many will read this…
Moved into a short term rental from out of state with a LARGE, corporate-owned/managed complex in metro Denver just after Christmas 2009.
My lease ends in May, they want a 25% increase to go month-to-month. What a joke… I’m looking at comparable and better rental units at 20% less than I’m paying now.
So, did you tell them about the cheaper units? Are you willing to move (hopefully, they’ll get the message without your having to move).
Please let us know what happens.
Good luck!
I guess the Icelandic, Dubai and Greek debt crisis are all contained at this point?
Next…
* FEBRUARY 25, 2010
The Euro’s Next Battleground: Spain
By STEPHEN FIDLER
MADRID—Greece set off the crisis rattling the euro zone. Spain could determine whether the 16-nation currency stands or falls.
The euro zone’s No. 4 economy, Spain has an unemployment rate of 19%, a deflating housing bubble, big debts and a gaping budget deficit. Its gross domestic product contracted 3.6% in 2009 and is expected to shrink again this year, leaving Spain in its deepest and longest recession in a half-century.
At the center of the crisis are millions of Spaniards like Olga Espejo. The 41-year-old lost her administrative job at a laboratory in Madrid, then found a temporary post replacing someone on sick leave—until that job was abolished. Her husband and her sister have also been laid off—all among the one in nine working Spaniards who have lost jobs in the past two years.
Each gets an unemployment check of at least €1,000 a month, or about $1,350, part of a generous social safety net that Madrid says it won’t cut. But Ms. Espejo’s benefit runs out in July and her husband’s in May.
“What prospects do any of us have now?” Ms. Espejo asks.
…
* FEBRUARY 24, 2010
New Home Sales Plunge to ‘63 Levels
By SARA MURRAY
Sales of new single-family homes plunged last month, underscoring the fragility in the housing market.
Sales dropped 11.2% in January from a month earlier to a seasonally adjusted annual rate of 309,000, the Commerce Department said Wednesday. The decline brought sales to their lowest level since the government began tracking the numbers in 1963. Sales were 6.1% lower than in January 2009.
This gauge of new-home sales is particularly volatile because it is based on a very small sample size and carries a wide margin of error. Still, the sharp decline is an indication that the housing market remains feeble, despite improvements in the past year fueled by low mortgage rates, reduced home prices and a government tax credit for home buyers.
The tax credit, which was expanded and extended, is set to expire April 30. It could lead to an upturn in sales in the next couple of months as buyers rush to take advantage of it, analysts say.
…
If analysts say it, then it must be so.
Call me a contrarian, but didn’t new home starts crash this past year? In our neck of the woods, new home sales would be down because **there are very few new homes being built.**
Lord knows I’m a bear, but I think there are other explanations for the low sales number (no inventory).
Just looked at SD Radar Logic data. 2009 was a ginormous debt cat bounce reflecting stimulus earmarked to housing; looks like the crash has started up again in 2010 in search of a fundamental bottom…
Actually, for clarification, their data ends in mid-December 2009. But there is definitely the appearance that a crash has resumed…
New home sales sink to a new low in January
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 7:50 p.m. Wednesday, Feb. 24, 2010
In the 17-state Southern region, which includes Florida, the seasonally adjusted annual sales pace in January dropped 9.5 percent from December to 162,000, the lowest figure since December 1974.
“We thought things were starting to get better. We thought we had hit bottom. We thought January would, at the worst, be flat,” said Bernard Markstein, a senior economist and vice president for the National Home Builders Association. “It’s hard to find any positives here.”
When someone blocked the wrong guy in practice on my high school football team, the O Line coach would calmly walk up to him and ask. Why did you do that? The answer that would usually start, but never finish was, I thought. He would scream DON`T THINK! DON`T THINK! YOU`RE NOT HERE TO THINK! JUST DO YOUR G. D. JOB!
Does anyone really believe the FED is going to end buying MBS’s on March 31? And if so, why do the “experts” think it willonly lead to .25-.5% rate hike. How can that be all that is possibly keeping investors from playing ball right now?
The GSEs will pick up where the Fed leaves off (if the Fed stops buying mortgages at all).