Bits Bucket For February 25, 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.
February 25, 2010
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Freddie Mac losses mount, warns of foreclosures (AP)
WASHINGTON - Freddie Mac lost almost $26 billion last year, ominous news for taxpayers who are footing the bill to rescue the mortgage finance company and its sibling Fannie Mae.
Freddie Mac, which has lost a total of almost $80 billion since the housing crisis started in 2007, is bracing for more pain. The McLean, Va.-based company said a record 4 percent of its borrowers are at least three months behind on their payments and facing foreclosure.
Its chief executive, Charles Haldeman, warned Wednesday of a “potential large wave of foreclosures” still to come.
link?
I guess we have to go to AP and search for the title. wmbz is encouraging Hard Work.
Bill in L.A. Here’s a link to the AP story. I don’t post links very often because many times they won’t go through. It may be on my end.
http://www.clickondetroit.com/money/22655770/detail.html
Well they often take a bit of time to go up, which is good, that way we’re not wading through ehancement ads and the like.
ha -
I’ll bet I have more links of tasteless pics that don’t make it through the filtah -
tawk amongst yuhselves
Thank you for that link! $111 billion in the red and expected to go to $188 billion. This real estate bubble burst is far from over. Okay 4% of the customers are three months late with their payments. How many households does that amount to? I think that 4% will grow to at least 8% and the meltdown will be unstoppable. Obama will only have a prayer left.
Bill I posted a link, it just hasn’t made it through yet.
What I usually do is search for a fragment of text in google and even without quotes, I get the article in the first 2-3 results.
How often can a group of experts be caught flat footed before their profession loses all credibility?
Get a few simple ideas into your heads if you don’t want to look like fools again and again going forward:
1) Every economic data release is likely to be worse than you personally expect.
2) The green shoots meme was not supposed to be some kind of rigorously conducted economic forecast; rather it was merely happy talk to get American consumers back in the mood for borrowing and spending money.
3) People without money don’t spend much of it.
4) If hurricanes were not enough to stop Florida condo investors back in the summer of 2005, how could typical January weather in 2010 explain a drop to the lowest level of new home sales back to 1963? That is just plain dumb, and whoever suggested it is a certified idiot.
Economists surprised as new-home sales fall to lowest level in nearly 50 years
In this photo made Feb. 22, 2010, a sold sign sits outside a new home in Houston. Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.(AP Photo/Pat Sullivan)
By Dina ElBoghdady
Washington Post Staff Writer
Thursday, February 25, 2010
Sales of newly built homes unexpectedly plummeted in January to their lowest level in nearly five decades, providing more evidence of the housing market’s fragility.
Purchases of new single-family homes dropped 11.2 percent in January from December to a seasonally adjusted annual rate of 309,000, the Commerce Department reported Wednesday. Sales fell in every region except the Midwest, and the raw number of new homes on the market rose for the first time in nearly three years.
“No sugarcoating these numbers,” Mike Larson, an analyst at Weiss Research, wrote in a note to clients. “They stink.”
…
P.S. Haven’t U.S. foreclosures recently been running at above a 300,000 monthly rate? I am wondering if the rate of foreclosures recently passed new home sales; packman?
Well - new home sales is something I haven’t tracked, only new home starts (since the latter is put out as part of FRED data, the former isn’t as easy). I’ll see what I can do though…
Actually (posting this below since my other post hasn’t shown up yet) - a comparison of the data would be meaningless. The new home sales data is annual, the foreclosure data is monthly. So in reality the rate of foreclosures is about 12 times the rate of new home sales; so a graphical comparison is meaningless.
“new home sales data is annual”
The data are also very hard to compare, because the new homes sales data counts signed contracts rather than actual closings. So you need to take out the failed-to-close number from the sales data, and that data is not readily available. You can get an approximation of it from the cancellation rates for the large national builders, but not for the small ones.
Good catch. I hate when I miss stuff like that.
But let’s see: If the foreclosures are running at 300,000+ a month, I guess the comparable annual rate would be
12*300,000 = 3.6 million?
How does that figure stack up next to an annual rate of 309,000 new home sales?
3,600+ thousand foreclosures versus 309 thousand new home sales: Looks like it is about 12 foreclosures for each recent home sale these days?
Ouch!
That comparison would be all the more interesting if it reflected the shadow inventory or the wave of foreclosures, Mr. Freddie Mac chief executive, Charles Haldeman, reported in the article above were still to come.
“3) People without money don’t spend much of it.”
Lol. I love it (and I’m stealing it).
Did you know the primary difference between microeconomics (which applies to households) and macroeconomics (which applies to governments and countries)?
Microeconomics has a budget constraint which limits how much households can spend.
Microeconomics = Flying Cast Iron Skillet
Macroeconomics = Bonus + Italian suits
BwaHahAHAHAHAHAhaHAHHAHAHAAH!!!!
LOLOLOLOL…
Priceless
Have you priced a quality cast iron skillet? They ain’t cheap!
“They ain’t cheap!”
But they’re worth every dang penny!
So how many credit cards can those homes have?
“People without money don’t spend much of it.”
I dunno. I was thinking of the idiot couple on Suze Orman this weekend that were drowning in debt, had all of $1500 in savings and wanted to know how they could take advantage of the $8000 housing tax credit. Oh, yeah, and they had a habit of reaching out to Mom & Dad when they really got in a pinch.
That’s what’s out there, folks. Wish you could have seen their goofy smiles melt when she told them how stupid they were.
Did you see the SNL Suze Orman skit? Save on tanning by waiting till the neighbor stains their deck and lie underneath the boards to catch the drips.
3) People without money don’t spend much of it.
Well, actually in the past they did …. and that is why they are in the predicament they are in today.
“People without money don’t spend much of it.”
Oh, but that’s what got so many individuals and local governments in trouble in the first place. They all borrowed money from the housing ATM that didn’t really exist.
Fear not, however, Berserker Ben and his pals in Washington and Wall Street are hell bent on printing that money into existence.
That housing ATM did exist. Only for a couple of years though.
That housing ATM did exist. Only for a couple of years though.’
I know of a few old landlords who have borrowed against their early RE purchases to buy more RE and have been doing this for 30 years
Inflation Nation and now it ends
The Fed had themselves a really nice money tree, right up to the point when they drowned it in liquidity.
And if sales are still suppressed during the next few months, what’s the explanation then? Let me guess. After a long winter, people were out enjoying the delightful spring weather instead of buying houses.
The weather in California was absolutely delightful the first half of January, yet sales were down here too.
Of course the bigger problem is that the MSM prefers to quote industry shills rather than truly independent economists.
But even for those with purer motives, getting it right must be a challenge with the data for ongoing conditions so obviously flawed. If you don’t know what’s happening now, even getting a near term forecast right becomes a lot more difficult.
“And if sales are still suppressed during the next few months, what’s the explanation then?”
I’m going with the “deer in the headlights” as an explanation. When you’re not sure which way to move, sometimes you don’t move at all.
I guess that makes our little rental household the proverbial “deer in the headlights,” as we are still bubble watching from the same rental we moved into half a decade back.
“…we are still bubble watching from the same rental we moved into half a decade back”
Relax…Enjoy it, trash it, move on to the next one. How much can your damage deposit be anyway. (Bwaahaaahaa)
Careful Dale — you can be sent to collections unless you pay for the ‘extra’ damage you did.
“How much can your damage deposit be anyway.”
Less than the value of the maintenance we (well, I) have already put in to keep the place up.
“The weather in California was absolutely delightful the first half of January, yet sales were down here too.”
Well the story did feature a home in Houston. How much snow have they had this year in South Texas?
P.S. We have rental homes in our neighborhood where the Realtor™ handling the listing puts up “Sold” signs when it is rented out; seems Used Home Sellers have not yet invented signs that say “Rented.”
“P.S. We have rental homes in our neighborhood where the Realtor™ handling the listing puts up “Sold” signs when it is rented out; seems Used Home Sellers have not yet invented signs that say “Rented.””
The REIC staging gig continues–totally unprofessional.
Here in Tucson, they don’t do that. One day, the long-standing (but ignored) “for sale” sign just up and disappears. And, just as abruptly, there are occupants in the house. Renters.
“Of course the bigger problem is that the MSM prefers to quote industry shills rather than truly independent economists.”
I guess that’s why ‘they’ invented blogs: One man’s problem is another man’s opportunity.
PB …The independent economists seem to be more accurate than
any of the shills . I like your choice of articles you post ,even the ones you post to start debate . I like the way Ben lets us tear apart the crazy quotes and stories he gets from the media . I’m sure a lot of the media tunes into this blog ,and the trend started where the media all have their own blogs now . I use to notice how we would discuss a subject and than it would be the talking points on some media show shortly ,but with their own spin on it . Maybe I have imagined this ,but when I hear specific words that this blog coins ,I have to wonder .
“I like the way Ben lets us tear apart the crazy quotes and stories he gets from the media.”
I basically tear crap apart for a living, and enjoy it…
What kind of job would be tearing crap apart for a living ? Are you a plummer ? I always thought you were a math professor ,but I don’t know exactly when I picked up that thought ,it must of been years ago .
The crap I tear at is of the figurative variety (hint: check out some of my blog posts…).
The weather may have been nice, but a 16.6% unemployment rate put a chill in the air.
“3) People without money don’t spend much of it.”
And to a certain extent when you spend less, you find out that you don’t miss certain things that you bought more or less on “auto pilot”.
We all have so much stuff that when you start “shopping in your closet” and clearing the pantry you realize how much excess you have.
I’ve also been “eating down” my pantry/freezer and the only food items I’ve bought this month are bread, fresh veg and some dairy totaling less than $60.
Not sure there will be a permanent change in buying habits, but having additional money to set aside for savings or for a recreational goal (plane tickets, etc.) is satisfying and provides some incentive.
One of my former roommates and I were talking about spending. He’s even cheaper than me. He fixes his own car - never takes it to a mechanic. On the topic of buying a great looking car or some other new toy, we both said “then what?” We both were thinking maybe the novelty and enjoyment of that new material would wear off fast, just like the depreciation. Then you are out tens of thousands of dollars and have to get the next toy.
“He fixes his own car - never takes it to a mechanic.”
I guess he either enjoys fixing cars, or places a value on his free time near $0/hour?
It’s hard to say. He has a habit of conning other people to share costs.
Personally I place a value on my free time. I’d rather enjoy being lazy at Manhattan Beach while Don Elway’s Manhattan Beach Toyota changes the oil on my car.
For some people working cars is recreation.
An oil change on a Toyota is hard to beat for $25. On the other hand, my maintenance costs a true arm and leg comparatively. You may remember I bought a 911 Turbo about a year ago. I did my own 60k service, which helped me avoid spending an additional $1,000 at a mechanic. Every oil change I do myself helps me avoid spending an additional $100. The potential for maintenance savings on pricier cars is larger.
It’s was a significant expense (although one I’ve paid cash for, and still have plenty of cash on hand). I don’t regret it one bit. Frankly, it’s nice to have something real as opposed to more little bits of green paper. Enjoy it every day! I certainly don’t feel a need to rush out and buy something else to compensate for the novelty wearing out. Wife and I take some nice trips.
oh yeah you were going to show me the Porsche at the December LA meetup but you did not make it. I did not know you bought it.
I see some good looking used Porsches for sale in the area. Not ready to take the plunge. A colleague got one six months ago but hardly ever drives it the 65 miles (each way) to work!
My ideal toys: A Porsche and Ocean View house in La Jolla. But my own rule is I need to save six times the cost of the total before I do that.
Sometimes working on your own car saves time.
I can work in an oil change while doing other household chores. If I took it to a mechanic, I’d have to drive there, and either wait there or arrange pickup/dropoff (I’m single so no spousal driver). That’s a huge waste of time compared to the few minutes changing my own oil entails.
The guy whose job is to change oil is usually the least experienced guy in the shop. E.g. my brother took his truck into a quickielube place for a manual tranny oil change. They drained the tranny and put the drainplug back in, but failed to put new oil in. He drove a few miles down the freeway and his tranny blew up.
Some things are worth doing yourself others aren’t. I agree, oil changes are too cheap to mess with at home. I do my own brake jobs, as typically it takes less than an hour per axle and saves around $75 or $80, and I know I’m not going to get pressured to do stuff that isn’t needed.
At one time I had four cars in the house, mine, my wife’s, and two daughters, so the DIY saved enough money to consider. I tried to teach both daughters basic auto maintenance but neither would hold still long enough. One of the daughters (away from home now) just suffered a $700 brake job on a Scion. I bet I could have done it for $200 or less.
Serpentine belts, O2 sensors same story. Unfortunately on newer cars, thats about all that I can think of that are regular maintenace items that are within the scope of the backyard mechanic type.
“For some people working cars is recreation.”
I actually get that. I am not one of those people, but I certainly understand that one man’s work is another man’s recreation.
when i grarduated college i saved up $ 15K and blew it all on that shiny new mustang.
definately in the top 3 biggest mistatkes of my life. its right up there with trusting people and the designated hitter rule (not my fault…but it’s still a big mistake).
Don’t take it so hard.
My policy is to give kids a pass on stupid decisions until they reach 25 or so. The question is, did they learn anything from the experience?
Some lessons are learned best by personal experience.
Daughter #1 is making enough money now to think that she just has to have a used Audi A-4, turbo. Nothing I say about the cost of maintaining a near luxury German car carries much weight, so, I guess I will give here a pre-pass on what is guaranteed to be a bad decision. She has a good running Pontiac with a paid up 100K maintenance contract, but that ain’t fitting of her new station in life.
LIve and learn.
Fortunately, my daughters aren’t caught up in chasing the Euro-Trash. Audis are great cars, as long as you figure that you’ll get rid of it when the warranty goes out.
Prices on German car parts are high enough to gag a maggot.
Just had a A727 Torqueflite overhauled for my play-car. From Certified Transmissions. (the shop here has an excellent rep with the local fleet operators).
Price, including the torque converter? $450 bucks.
Read it and weep.
I’ll raise you one. Sticker shock is paying for
replacement CAT parts ie…one oil pan =
$1,100.00.
Sometimes you just have to go for it. I can’t see myself working for years and years without treating myself and/or my family to something. Otherwise, what’s the point? Hell, I may be dead tomorrow.
There’s saving and there’s saving.
+1000
May I fix that for you, PB?
“3) People
withoutwho realize that they don’t have money don’t spend much of it.”– or perhaps –
3) People who realize that the ONLY money they can depend on is cash-money don’t spend much of it. [/combo]
– or –
3) People who tried to act like a bank — ie — book “assets” as real money but then realized that they don’t have the priviledge of being bailed out like a bank and therefore don’t have any money don’t spend much of it.
– or –
3) People who suddenly discovered that the house isn’t ATM money but rather credit card money don’t spend much of it.
– or —
3) “Wealth effect” is toast.
A turd by any other name would smell as rank.
Well done, oxide.
Economists seem to have a bottomless reserve of “surprise” to draw upon.
Not only that but they use fractional reserve - they actually declare more surprises than they have in reserve, by a factor of 10:1.
And that’s not including the Fed’s printing press of fiat “surprise” declarations; ones with no real solid base.
They must go through a lot of blood pressure medication, being surprised like that all the time.
They must go through a lot of blood pressure medication, being surprised like that all the time.
lol, Then let me throw some more bones to Pfizer..
European Economic Confidence Unexpectedly Worsens
Feb. 25 (Bloomberg) — European confidence in the economic outlook unexpectedly worsened in February after the euro region’s recovery almost stalled in the fourth quarter.
http://www.businessweek.com/news/2010-02-25/european-economic-confidence-unexpectedly-worsens-update1-.html
U.S. core durable goods orders drop unexpectedly
2010-02-25 (Forex Pros)
Forex Pros - New orders for manufactured durable goods in the United States, excluding transportation, dropped unexpectedly in January, official data showed on Thursday.
http://www.forexpros.com/news/forex-news/u.s.-core-durable-goods-orders-drop-unexpectedly-122135
French Consumer Confidence Unexpectedly Falls In February
2/25/2010
(RTTNews) - French consumer confidence unexpectedly dropped to minus 33 in February, a survey from the statistical office INSEE showed Thursday. Economists had expected the index to rise to minus 28 from January’s revised reading of minus 30.
http://www.rttnews.com/ArticleView.aspx?Id=1222055&SMap=1
German Business Confidence Unexpectedly Declines
Feb. 23 (Bloomberg) — German business confidence unexpectedly fell for the first time in 11 months in February as the coldest winter in 14 years damped retail sales and construction.
http://www.businessweek.com/news/2010-02-23/german-business-confidence-unexpectedly-declined-in-february.html
You would think someone would find a new word for “unexpectedly”. - now if only I could find my thesaurus - hmmmm - how about - amazingly? Astonishly? Unanticipatedly (?) ; astoundingly; from out of the blue; unaccountably; unpredictably …….
“They must go through a lot of blood pressure medication, being surprised like that all the time.”
They must go through a lot of TAX DOLLARS, being surprised like that all the time.
Yup!
We sure aren’t running out of surprised economists yet.
Jobless claims take a toll
Surprising weakness of jobs data, joined by mixed durable-goods-orders report and division of market attention between D.C. and N.Y. cost equities early.
Duck! Watch out for falling home prices.
cnnmoney ~ February 25, 2010
Despite signs that the real estate market might be lurching forward, prices are expected to fall further this year and next.
The average home price in the United States will fall by about 6% by September 2011, according to Fiserv, a division of Moody’s Economy.com. And that’s after plunging more than 27% in the past three years.
Most of the projected home price decline will occur during the usually slow summer months of 2010. After that, prices should begin to stabilize, according to Fiserv, and stay almost flat through fall of 2011.
The main reason for continued decline, according to Mark Zandi, economist and co-founder of Economy.com, is foreclosures — the same thing that’s plagued markets for the past three years.
“Foreclosure sales will pick up this spring as mortgage servicers figure out who can qualify for a modification and who can’t,” said Zandi.
He figures there are at least 4.5 million mortgage loans either in foreclosure or clearly headed in that direction. When that additional inventory hits the market, it will provide numerous choices for buyers and encourage sellers to drop their listing prices.
The end of two federal programs, which have been propping up markets, will also tamp down prices.
Read the last paragraph about the expected big “rebound” in Merced. I want that crystal ball! -maybe some crystal-meth to go with it…
“Despite signs that the real estate market might be lurching forward, prices are expected to fall further this year and next.”
That Olympic luger lurched forward, too, until he stopped moving.
“lurching forward” means overbuilding low-priced pos first-time-homebuyer-scam diharrea-looking neighborhoods all over the place.
I like your description.
“lurching forward” is a death convulsion.
The end of two federal programs, which have been propping up markets, will also tamp down prices.
If these programs actually end, then I think “tamp down” will be quite an understatement.
If.
P.S. It’s also worth noting that treasury rates are a contributing factor. So even if the Fed ceases purchasing MBS officially - their constant purchase of treasuries (which officially they’re supposedly not doing; but I’m quite sure are nevertheless) keeps treasury rates low - driving private money out of treasuries and into MBS. This will continue to prop up lending and by extension home prices; at least prop them up moreso than the freefall that would happen otherwise.
If unemployment bennies don’t get extended I can only imagine the eventual deluge of homes for sale that will be unleashed. Even with the bennies that never replace 100% past income, there have got to be households running close to empty.
We have a real down season for buying around here when homes are taken off the MLS and nothing new comes on. In the last week or so we’re finally seeing new stuff. Seems like I’m looking at a lot more empty homes (priced at 2007 prices to boot) On an aside, I am worried about the integrity of local banks as we watch both commercial and residential failures begin to accelerate.
I call shenanigans! The housing market will be plagued by foreclosures well into 2011, 2012 and as long as people continue to buy at current prices. Here in 92646, 2000 sq. ft. houses are routinely selling upwards of $700K. They should be selling in the mid $400s, at most. (How buyers are still getting loans for these amounts remains a mystery to me). I don’t see why ANYONE would hang onto and keep paying a mortgage on a house that has dropped 30%-40% in value and they won’t. A brand new wave of foreclosures that isn’t even on the radar yet will hit the market as soon as the buyers run out of money and/or common sense.
Good point. I can’t flog that poor Credit Suisse graph forever. It needs serious updating.
But if anyone else needs to flog it, here’s the graph.
Good morning everyone. Me and the wife are having dreams of renting in Penn. I may do on post housing, but we also may look off post in C Barracks and the surrounding town…
Hundreds of desperate homeowners line up for help at PBC Convention Center this morning
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 7:00 a.m. Thursday, Feb. 25, 2010
WEST PALM BEACH — Desperate homeowners from across the country have made their way to the Palm Beach County Convention Center, where they lined up hours early for a chance to reduce their mortgage payments.
The Boston-based Neighborhood Assistance Corporation of America, or NACA, is promising mortgage modification help delivered over the next five days, remaining open 24 hours a day, and offering same-day service.
Some people have been waiting in line since midnight, hoping to be the first in the door to see a loan modification counselor.
Rena Williams flew from Los Angeles to attend the event. Her plane landed at 10:45 p.m. Wednesday and she was at the convention center by 1 a.m. About 30 people were already waiting.
“I’m dealing with One West Bank and they are not being helpful at all,” said Williams, bundled in a winter jacket, hood pulled tight around her face. “They’ve already set a foreclosure date for my home.”
Williams has a return flight to California at 6:45 tonight. She’s hoping a NACA counselor can get her a loan modification before she has to leave. Her foreclosure is scheduled for April 18.
“They can’t give me the run around if I’m here,” Williams said about her lender.
NACA Spokesman Darren Duarte isn’t surprised to see the amount of people in line this morning, even with the 24-hour sessions.
He said he’s heard people have traveled from as far as Washington state and Oregon.
“If you can save $300 to $400 each month for the next 30 years, it’s worth a plane ticket,” he said. “If someone has a chance at lowering their mortgage payments, they are going to come.”
At least 7,000 had registered for the marathon sessions earlier in the week. This morning hundreds of them formed a line that stretched around half the building.
Organizers wearing “Stop Loan Sharks” T-shirts walked the line, trying to answer questions before the 9 a.m. start time.
“I just want to get my mortgage lowered. I’ve been trying for a whole year and getting the run around,” said Pauline Wallerd, who drove from Ft. Lauderdale to get in line by 3:30 a.m Thursday.
“‘They can’t give me the run around if I’m here,’ Williams said about her lender.”
Lol. Williams has no imagination whatsoever.
LOL. This is one of the saddest stories I’ve read in a long time. Why are so many people so dumb?
“Organizers wearing “Stop Loan Sharks” T-shirts walked the line”
No doubt there were deceptive loans made, but the majority were not. People knew full well what they were signing up for and planned to ride the RE gravy train. A whole lot of people are trying to get out from under their original obligation, because their properties value went down, and that’s just not ‘fair’.
I’m still not sure about what is meant by a deceptive loan. What if the shady broker encouraged the FB to write in double his income on the loan app, and the bank, working off its “new paradigm,” didn’t reject the loan app? Yes, the FB should have vaguely known that his job and finances didn’t warrant a McMansion, but the bank failed in its due diligence, and breached some “good faith” responsbility in the process. Other FB’s, seeing the new paradigm work for their buddies, justifiably(?) signed onto the gravy train too. Who’s at fault, and who should take the hit?
[insert standard litany supporting draconian cramdown here]
Well the problem is that it’s a real “he said, she said” issue. Absent COMPELLING evidence to the contrary, you have to assume that people knew what they were signing. We certainly know that they SHOULD have known. And if the price that they agreed to was unaffordable for them with a regular loan, the remedy ISN’T just letting them keep the house. The remedy might be to give the house to the lender and deny them further recourse.
But, but, but … NOBODY else was getting “regular” loans, so why should they have? That would have meant buying a little shack. Of course, some of us DID look at the repayment charts and renting started to look better in a hurry!
I did mortgage loans for 12 years (10-15/month) and i can promise you that these borrowers are alot more savy than they let on. They scrutinize everything. I have never had a borrower just blindly sign away without knowing if they were getting a fixed or adjustable. If it was adjustable, even the least financially borrower wanted to know how and when it could adjust and how high their payment could go. If nothing else, every borrower comes to a disclosure at closing called the TIL or ,TRUTH IN LENDING in humongous bold writing. Trust me, the mear title of the document triggers every borrows self defense instinct that they are not being told the truth. They question every word on it. I never had to explain neg am, only trying to talk people out of it as I didnt believe in them.
If the borrower knew what they were doing and the Lender still gave them a loan they could not afford ,than the loan was
defective and a high risk that should not of been rated AAA
investment grade . These borrowers /or loan agents either upped their income ,which is fraud ,or the loan was defective in that the industry was giving loans that the party didn’t really qualify for the loan . Underwriting standards and income ratios can’t be defective or meaningless . Who made up the rule that
people would qualify on the teaser rate of 1.5% when their
effective interest rate was more like 6 or 7 % within a year of the loan closing . Back in the old days they would qualify
adjustable loans based on the adjusted up rate ,not some teaser rate .
Now I don’t know why Wall Street Money Changers thought they could defy gravity ,but as a tax paying Citizen ,I’m not very comfortable with the bogus underwriting and bogus loan product that emerged .
If the business was giving loans based on real estate always goes up and that will cover a faulty loan ,than the loan investors
should of been advised of that fact ,and than they could of sued everybody because loans cannot be made on a projection of future value anyway ,
Also , a crash in real estate values should of had no bearing on a loan payment being made by a qualified buyer ,unless the borrowers lost their job ,or somehow they went down in income ,divorce, whatever . But in this case borrowers who could
never afford the loan could not keep up with the payments and needed to sell or default . The industry told these borrowers that they could refinance out of the original toxic loan . You can’t say things like that because nobody knows how tight or
loose the money market will be .
The Wall Street money changers would like you to believe that they had no lawful requirements to underwrite loans and prevent fraud . You can’t just market loans in the secondary market calling it good low risk stuff while at the same time
breaching your duty to police it or qualify those bundles of loans or make defective product .
Would a insurance company insure a million dollar painting without requiring evidence that it was in fact a Million dollar painting ? Would a medical doctor operate on a patient without conducting tests to see what the condition was .
Bundling loan packages up into a security doesn’t change the risk of loss just because they spread out the risk in the trenches . it’s laughable that you get the statement that
they didn’t see it coming . Are they saying that they didn’t see that their faulty loan Ponzi-scheme would crash and be exposed if real estate didn’t continue to go up ?
But ,I have read where Wall Street made the assertion that
this would spread out the risk …the CDO’s. So,if this was true than when the real estate market crashed the loss would of been spread out ,so why did they need bail-outs and
all commerce came to a FIRE emergency ? It’s because they are full of it and if Congress gives them any more creditability than con artist ,than the Politicians are part of the con.
I remember when the circus used to feature animals. Changing times.
Some people have been waiting in line since midnight, hoping to be the first in the door to see a loan modification counselor.
Gee, I wonder if they camped out for that?
In the parking lot… +1 AB.
I’ll bet the street vendors are making a killing selling to the people in line. It is a gathering of idiots flush with cash having not made mortgage payments for a year.
I live nearby. I should stop by and see if anyone wants to buy some bridges.
Keep your powder dry and your weapon clean.
I have a friendly suggestion: For the foreseeable future, plan to rent until you either leave the military or the housing market has bottomed out. We know two military families in our neighborhood quite well. One of them is comfortably situated in a rental home, able to move at a moment’s notice if asked by Uncle Sam to do so. The other is deeply underwater; the guy recently told me about how he could not afford to either maintain nor to update his 1990 automobile because he had no cash on hand after paying the mortgage.
The other suggestion: Pay no heed to the serial bottom caller brigade. They have been bleating like a flock of sheep about how the housing market would bottom out “by the end of the current year” for several years running already, and so far, their stopped clock prediction has been perpetually wrong. One of these days their prediction is going to turn out to be correct, and whoever most recently said it will frequently jump up on a soapbox over the next decade and loudly proclaim that he was the guy who correctly called a housing bottom. When home prices are on a range of 100-120 times local rents, then you can safely return to the water (so long as there are no killer whales lurking nearby). We’re not there yet.
Once a fundamental-based bottom is in, it will make sense to buy homes again, even for military families. If you are not underwater on your mortgage, and provided you have not extracted all your home equity to purchase expensive toys and vacations, you can move any time you need to without losing your shirt, your credit rating or both on a short sale.
Stpn2me
My friends, who are retired from the Air Force put together a wish list of criteria on locations in that gave them a lot of places to consider.
Don’t remember all of them but here are a few…
1) Proximity to an AFB (for accessing the BX, etc,)
2) Reasonably close to a medium sized city with a decent airport (for recreational travel) and some cultural amenities.
3) Low taxes (property, income, etc.)
4) Reasonable prices for house with some acreage with water rights and room for garden, etc. (They are out west.)
5) Purchase price they can pay off at an accelerated rate to be free and clear as soon as possible.
Bottom line is they live very simply on retirement pay and work at other things for money for “wants” not needs.
Agree it is probably prudent to wait to buy until you retire from the military unless you have identified a place that fits your practical criteria and WILL ALSO MAKE YOU HAPPY.
You will have a lot of geographical choice. I envy you as you will be able to make a “fresh start” in a way many people do not have the choice to. Now that you’re back stateside, perhaps take a few trips to possible locations and find a military retiree network to consult (there’s gotta be a blog) for insights.
Not stateside yet, still have about a month to play in the sand here. But I am ready to get HOME.
Yes, I am ready to retire. I know I will buy a modest home, somewhere between $100k and 170K. That will allow my military retirement to pay the mortagage of a 15-20 year note. I really dont want to go past 20 years. It wont be too hard in N.C. My cars will be paid for. I have never bought a house before, sub 700 credit rating. I just recently got back into the TSP program, but I wont give them much, the last stock crash got me off of the stock and mutual fund scam. I am looking for a Homeland Security position in N.C. as I have a TS SCI…..I wont be working too hard, I plan on being an at home daddy for this new kid, the wife will have to work now!!! Lord knows of the last 17+ years in the military, 9 of them have been without my family. This new baby wont have to worry about that…
Ummm, I hope you haven’t told your wife she really hasn’t been working.
Not stateside yet, still have about a month to play in the sand here. But I am ready to get HOME.
And we’re looking forward to giving you a big, HBB-style welcome home party!
“…your wife she really hasn’t been working”
ziiiiiiiiiiiiinggggggggggggggggggggg….. (exeter™)
Funny you mentioned that,
One thing as a commander, I have to caution soldiers about the coming home trip. Mostly service members expect to go home and relax. Spouses expect service members to come home and take the kids and give the spouses a break and fix everything that broke while they were gone. It causes alot of friction sometimes. The more senior folks such as my family have it down pact. The younger ones are where I am going to have my problems.
Something about not being able to “directly” pursue happiness:
Monk: “So here’s what happened…”
Retired Air force Major (C-130 / SAC ) …builds beautiful large custom house near NW Charlotte NC, $$$$$$…wife spends x3 years decorating, $$$$$$…soon after…only x2 kids go/get college/marry, $$$$$$$$…after 30 years of hangin’ out with “military family environment”, theys decides FLORIDA is the place theys ought to be, builds new custom house,$$$$$$…wife begins multi-year decoration projects again,$$$$$$$, … kids post college/marriage encounter a few “stumbling blocks”,$$$$$…Major gets job with airline, …hub is Houston…Company townhouse provided by Company,…Pilots & Stewardess share townhouse,…
If you have a good enough “imagination” you can guess where this story is going…”Financially”
Bet it’s good for company morale. For a while, anyway.
Pilots & Stewardess share Company townhouse,
or
Pilots & Stewardess share company in townhouse
Houston!…we have a problem….
Oh no we don’t
Chinese drywall bankrupts construction firm
South Florida Business Journal
Chinese drywall has driven a South Florida construction company into bankruptcy.
Homestead-based South Kendall Construction Corp. was riding high just a few years ago, completing thousands of homes at the Keys Gate subdivision in Homestead.
The company made $4.8 million in gross income in 2008 and $3.8 million in 2007, according to court documents. Then, the homebuilding market crashed and owner Patrick Gleber discovered he had a problem: Dozens of homeowners claimed to have found stinky, high-sulfur Chinese drywall in their homes.
The company filed a Chapter 7 liquidation bankruptcy petition on Wednesday, claiming it has just $500 in assets. Also listed on the petition are 77 lawsuit claims of unknown amounts from Chinese drywall allegations. Some experts have estimated costs of $100,000 a home to fix Chinese drywall problems, which could result in a $7.7 million bill for South Kendall Construction if the claims were proven and successful.
Bankruptcy is just a business tool. Construction companies go bankrupt all the time and then emerge the next day with a different name.
This company claims it has just $500 in assets. Somebody in this company screwed up and left $499 to much in the coffers.
Which is why a “home warranty” backed by the builder is worth less than the paper it’s printed on.
Convention Halls, stadium, hotel, car rental and candy taxes aren’t selling well to the tourists…gee, who would of thunk THAT seeing Milwaukee is the well known Center of the Universe for rich tourists and businessmen ?
Tax revenue drops sharply for 2 districts
By Don Walker of the Journal Sentinel
Posted: Feb. 24, 2010 |(4)
The amount of tax revenue collected for the Wisconsin Center District and the Miller Park stadium district plummeted in 2009, a direct result of a deep recession and lower consumer spending, according to new figures released Wednesday.
Franklyn Gimbel, chairman of the Wisconsin Center District board, which operates the Midwest Airlines Center, the Milwaukee Theatre and the U.S. Cellular Arena, didn’t mince words about the tax collections, the lifeblood of the operation.
“It was the worst year we’ve had since 1996,” he said of the drop in tax collections. “It was a horrific year. Business travel was way off.”
…• In December, the Wisconsin Center District board voted to raise the countywide food and beverage tax from 0.25% to 0.5%, which could produce an additional $1 million in revenue this year. The tax is expected to go into effect on July 1 and will apply to sales of candy, soft drinks and prepared foods. Board members said Wednesday they remain interested in ending the increase once certain debt-service goals are met.
• On Wednesday, the board’s Finance and Personnel Committee tabled a measure that would raise the countywide hotel tax - now at 2% - by one-half of 1% with the income going to Visit Milwaukee, the region’s visitor and convention bureau. The district had slashed its commitment to Visit Milwaukee this year, but business leaders, including Stephen H. Marcus, the chairman of the Marcus Corp., said the tax increase was needed to try to drum up new convention and hotel business. Area hoteliers also have signed off on the increase, Marcus said, an indication that the board may ultimately vote in favor of the tax increase.
Besides the countywide hotel tax, the district collects a 3% car-rental tax and the food and beverage tax. It also receives a 7% hotel room tax formerly collected by the City of Milwaukee.
The city hotel tax collection was down 21.1%; the county room tax collection is off 20.5%; the food and beverage tax collection is off 5.3%; and the car-rental collection is off 17.8.
…The stadium district and its advisers have been reluctant to set a sunset date for the 0.1% stadium sales tax, which is collected in Racine, Waukesha, Milwaukee, Ozaukee and Washington counties. The tax first was collected in 1996, and in recent years it was hoped the tax would end in 2014. That now appears remote, with some suggesting the tax may still be in place as late as 2018. Stadium district officials say they won’t have to raise more money for the construction and financing of Miller Park, but will need more time to raise the amount needed.
http://tinyurl.com/ykpwrco
candy tax? You b$*tards!
Cartman?
Big city governments have been taxing the crap out of business travelers for years.
Another example of the parasite killing the host.
Yeah, when you rent a car at the New Orleans airport you get slapped with total sales taxes of 24%. It’s absurd.
No change to Fannie, Freddie until 2011
Geithner: Obama administration won’t seek to overhaul Fannie Mae, Freddie Mac until 2011
WASHINGTON (AP) — The Obama administration will wait until 2011 to propose an overhaul of mortgage giants Fannie Mae and Freddie Mac, Treasury Secretary Timothy Geithner said Wednesday, arguing that he wanted to put some distance between a new system and what he called “the worst housing crisis in generations.”
Geithner also told lawmakers the administration had no intention of including the two entities in the federal budget, even though they were taken over by the government in 2008 as they faced mounting losses from mortgage defaults.
“That’s going to be a difficult set of reforms, but we do not believe it’s necessary to consolidate the full obligations of those entities onto the balance sheet of the federal government at this stage,” Geithner told the House Budget Committee.
“No change to Fannie, Freddie until 2011″
That is the same thing as if Captain Sullinger had said ” feel free to move about the cabin” and told the flight attendants to roll out the drink cart instead of saying “brace for impact!”.
“…won’t seek to overhaul Fannie Mae, Freddie Mac until 2011″
Weren’t they already recently overhauled (Fall 2008)?
“No change to Fannie, Freddie until 2011″
Follow-on prediction: No housing bottom until after 2011.
“Geithner also told lawmakers the administration had no intention of including the two entities in the federal budget…”
So SIVs are legal then?
“No change to Fannie, Freddie until 2011″
Snowball allowed to gather momentum until at least 2011 when it turns into freight train speeds w/hard as ice impact. The “soft landing” meme is so dead.
“No
changecap on MBS purchases by Fannie, Freddie until2011after 2010 election.”We should all look forward to the opportunity to say, “We told you so,” on this predictable looming financial disaster.
And regarding Homeland’s and Benchmark’s “higher than expected” default rates, a turd by another name still smells as rank.
OutFront
FHA: The Feds’ Next Housing Debacle
Asher Hawkins, 02.25.10, 09:40 AM EST
Forbes Magazine dated March 15, 2010
To prop up house prices, the government is becoming a lender of first resort. The results are predictable.
If you want to know what government intervention in the housing market is all about, visit 105 South Wheeler Street in Plant City, Fla. Benchmark Lending, a mortgage brokerage headquartered in Suite 200 there, got flagged in 2008 by the Federal Housing Administration’s home loan insurance program because its clients had been defaulting at a rate roughly three times the 4.2% national average, leaving the FHA to pick up the tab.
Benchmark voluntarily withdrew from the FHA program that November. By then Homeland Lending was up and running in Suite 220 at the same address and with the same phone number. Benchmark cofounder and director Jeri L. Benson is a director at Homeland, too. In a further sign that it’s business as usual in Plant City and in Washington, D.C., the FHA, a part of the Department of Housing & Urban Development, has approved Homeland mortgages for taxpayer-backed guarantees. Homeland’s current default rate: like Benchmark’s, triple the U.S. average. Homeland declined to be interviewed.
Any surprise here? The folks at the FHA aren’t putting their own money at risk but other people’s. If it disappears–well, shucks.
The FHA has a $45 billion cushion to cover $757 billion in home-loan guarantees. This is just one part of the federal government’s investment in housing. Another is the bailout of Fannie Mae and Freddie Mac, which has cost taxpayers over $100 billion so far; a third is the Federal Reserve’s purchase of mortgage securities ($1.25 trillion).
How much will the FHA cost taxpayers? Officially, nothing. FHA officers have told Congress they don’t believe they’ll need a bailout. (Fannie and Freddie said the same.) In fiscal 2009 the agency took in $8.1 billion in premiums from home buyers, while paying out $8.7 billion to cover deadbeats.
It’s not hard to imagine how the FHA’s finances could deteriorate. The recently extended first-time home buyer credit gives buyers a subsidy of 10% of the home’s purchase price, up to $8,000, in the form of a refundable credit (meaning people too poor to pay income taxes get a check from the government). The FHA allows buyers to put down as little as 3.5%. The difference could be more than enough to cover closing costs, says Garth Rieman, a director at the National Council of State Housing Agencies. In short, the government will pay a family money to move out of a rental and into a home.
…
In short, the government will pay a family money to move out of a rental and into a home.
Why doesn’t the government just pay people to stay where they are. At least with Bush we did get individual stimulus checks.
“At least with Bush we did get individual stimulus checks.”
Done so the history books wouldn’t record a depression during Dubya’s reign.
How would the NAR get its cut if the government paid household whether or not they decided to move?
Dotzour: Land mines ahead for economy
Wichita Business Journal - 2-24-10
The national economy and the commercial real estate sector could improve slowly but steadily during the next two years but must withstand a series of government-planted “land mines” in order to do it, an economist told a group of Wichita business executives Wednesday.
Mark Dotzour, chief economist at Texas A&M University’s Real Estate Center, said he would declare the recession over if it weren’t for a series of potential economic problems of the government’s creation.
He said there are too many proposed changes to taxes and regulation that could harm small businesses, which are the largest creators of jobs in the country. He pointed to cap and trade, the health care legislation, proposed banking regulations and a series of other proposed tax changes. Some small business owners would rather quit their businesses than endure additional taxes, he says.
“You can run the smart people out of the country,” he said.
“You can run the smart people out of the country,”
You evidently can run them out of California, too.
Both of them have already left.
I know plenty of smart Asians who come and go from California. I expect at least a few of them to eventually buy homes and settle here, once the housing market finally bottoms out. I also would have to guess that though my sample size is small, it is representative of a much larger demographic slice.
The asians here tend to buy houses when the interest rates are very high. They buy with cash. Then sell a few years later when interest rates drop quite a bit.
“The asians here tend to buy houses when the interest rates are very high. They buy with cash. Then sell a few years later when interest rates drop quite a bit.”
That reminds me of what a former poster here, Hoz, used to often say: ‘Buy what China buys.’
Translation: Don’t buy any RE until interest rates look a little bit more normal or home prices look a lot more reasonable…
Don’t let the door hit you on the way out, Dr. Dotzour. I’m sure your brilliant acumen for spouting your master’s talking points will be heartily welcomed by the Somalis/Haitians/Argentines.
No, they’ve already implemented all of the things he’s warning against.
Clearly you’ve never heard this guy speak. He is his own master and openly questions Wall Street, the Fed, big government, etc. To quote him from last night, “We don’t need any more cheerleaders in Washington, we need mechanics.” He says makes over 100 speeches per year and backs them up with relevant data, humor and of course, his predictions. I’ve heard him three years in a row and he speaks as if he reads this blog - he doesn’t sugarcoat the facts. He openly spoke of the current practice of pretend and extend with regard to CRE and believes up to 1,000 banks will fail in this current cycle. When he is wrong, he admits it - he puts a giant caveat in his most recent predictions regarding the landmines.
“You can run the smart people out of the country,”
The Walton Family is leaving America?
“You can run the smart people out of the country,” he said.
Unless you already have a passport from your destination country (or have a lot of money) getting into another country as a legal resident is a lot trickier than most people realize. Most other nations are nowhere nearly as welcoming of immigrants as we are.
“…getting into another country as a legal resident is a lot trickier than most people realize.”
That is one reason why the average Asian who washes up on the Left Coast is smarter than the average Asian.
You make a good point, Bear. We often don’t realize that in the case of Asia, we’re getting the creme de la creme here.
Especially when it comes to the students who come here. I’m involved in a University of Arizona-affiliated program called International Friends. It’s sort of a town and gown type of thing between the university and the community.
On the community side, local people “adopt” students. Take them to dinner, events, local tourist attractions, that sort of thing.
You can also invite them to your house to have a meal. Let me tell you, the Thanksgiving meal that my Malaysian International Friend and I cooked up was a culinary treat. Made my house smell wonderful for days. I’m looking forward to hosting similar feasts with my IFs from the United Arab Emirates and China.
I’d like to do a lot more things with my IFs, but they’re very busy with school. It’s hard to catch them with a free moment. Reason: They’re excellent students, and they take their classes very seriously. Much more so than the average American UA student.
Watched “King of California”…the part with the naked Chinese landing on the beach…
So, which one’s are the “spi-ders” and which one’s are not?
After I discovered that little “trick” “they” did with those digital picture frames you can get for cheap and then have to plug into your computer…
Damn,… “they” are just too too clever…
You know like buying our recycled aluminum cans… rather than buying Caterpillar equipment & digging a big hole in their soil…
Perhaps they are more serious because they don’t have the social distractions of American students, being far from home and disconnected from their native social network and culture.
Most other nations are nowhere nearly as welcoming of immigrants as we are.
And that’s the problem!
“You can run the smart people out of the country,” he said.
Especially when opportunities in their country of origin are outshining what they’re looking at here.
Since it’s a local story, I read further. The estimable Mr. Dotzour was speaking at… wait for it… J. P Weigand & Sons 2010 Real Estate Forum.
Another money quote:
“Things will improve next year with better job growth, Dotzour says. Commercial buildings will see less vacancy and rents will begin to climb. But he still doesn’t expect new construction. The following year will be more of the same.
That forecast should give investors an impetus to act, however, especially because newly built space isn’t likely to come on the market.
“You want to own before this happens,” he says.”
Link to original story
The same online edition of the Biz Journal also notes that Wichita January home sales were at an 11-year low, and contains a link to an earlier story about an additional 70 layoffs at Hawker-Beechcraft.
CFO: D.C.’s revenue still dropping
Washington Business Journal
D.C. Chief Financial Officer Natwar Gandhi lowered his fiscal 2010 tax revenue estimates from December of last year, leaving the city with an additional $17.7 million it needs to find this year.
Gandhi also dropped his fiscal 2011 revenue projection by another $49.4 million. D.C. now faces a budget shortfall of roughly $240 million in 2010 and $605 million in 2011.
In a letter sent Wednesday to Mayor Adrian Fenty and the D.C. Council, Gandhi said he was again forced to downgrade his estimates on real estate taxes after incorporating administrative adjustments and appeals won by property owners at the Board of Real Property Assessment and Appeals (BRPAA), writing that “the D.C. real estate market has started to reflect the decline that has been happening nationwide for some time now.”
Gandhi has repeatedly suggested to the council that it professionalize the BRPAA to combat appeals from major commercial property holders.
Montgomery county, MD is having some big issues too - projecting budget deficit of $761.5 million for next fiscal year. Saw the article on the facing page to the ending of the headline article, “Failing Malls Blight Region.” Local free paper called The Examiner.
Hey nycdj,
The weatherman is calling for a “snow-cane” in the Big Apple, saying 13+inches and high winds. What’s going on up there? Did some group plan a global warming summit this weekend?
Not much — just media hype. There may be a two foot snow upstate, but up there, that’s barely news and might extend the ski season.
The only problem: I had to take the subway today (and perhaps tomorrow) instead of riding to work by bike, which stinks because I’ve been stopping off at daily Mass during lent and was unable to do so. But I’ll live.
Big flakes here, but melting into big puddles, so far. We’ve already had our average snowfall, plus a couple of inches! But if we got, proportionally, what Wash. and Philly have been hit with, yikes! We’d have 6 more feet coming.
Love that snowicane term they’re using. High winds, high accumulations? Wow, we must come up with a weather term for that. You know, since Dairy Queen has taken over the term “Blizzard”.
*eyes rolling*
lol
“Blizzard” + ™
You laugh…”they” won’t
Well its 11pm and its snowing sleeting and very windy….
What a mess getting around today
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!
Unexpected. A killer whale killed someone. What part of killer did they miss?
‘Killer profit opportunity’ for Sea World? Training new animals is expensive…
Don’t they sell killer whale stuffed animals at their gift shops for lil’ kids to hug on the way home…someone get me marketing on the phone…
LOL. I bought my kids starfishes. They’re pretty harmless.
I know, it’s a killer whale, not a let’s go to the mall whale.
Evidently the recidivism rate among orca is high.
From the point of view of the whale:
You take me from a very large ocean and keep me captive in a small tank and you give me food whenever I do what you want, and this is how it will be for me for the rest of my miserable life.
Why do I see my version of waterboarding in your future?
Seaworld’s attitude towards killer whales = pols’ attitude towards the economy.
Yeah fellas, you have it tamed and trained! Now just keep jumping on its back!
Step a little closer to the edge. The bottom of the tank needs to be cleaned and I have a great idea as to what to use to scrub it with.
Got dragged to that place when I was in SD. Meh, and double meh to the penguin exhibit. Poor liddle penguins…***sniff***
And from what I’ve heard those trainers are paid pretty shabby wages.
They are paid peanuts $8-12/ hour
Unexpected. Wall St. made-off with killer profits. What part of killer did they miss?
We met that trainer in lunch with the whales. Very sad. Personally would pay a lot more to go in IF it went to purchasing a much larger habitat.
In general, not sure the animals care that much. The whales seem happy.
Orcas don’t have humans on the menu … and the housing market always goes up! But there had to be a day when these chatty beasts decided it might be cool to eat a sting ray or a white shark, which didn’t used to be on the menu, either!
er, didn’t use to be … weren’t formerly, um something
In the PNW people go out in kayaks to “encounter” pods of killer whales. I’m amazed that so few get eaten in the process.
I’m visualizing a picture of Oly in her tiara, kayaking amongst the killer whales. And they’re too busy laughing at her jokes to even think of making a meal of her.
Did you see the viral video on Facebook where some guys in dinghy size boats were oat filming a pod of whales chasing a penguin? The film ends when the pilgrim jumps in the boat. The cameraman gets a few different shots of the orcas approaching and then moving just under their boats. After a bit of this, they turn tail and look for some other form of lunch. The penguin moves close to one of the boaters like he wants to give them a hug.
I always wondered why those guys just laughed while they filmed it all unfolding and didn’t worry about going in the drink.
Never, ever, has a “killer” whale attacked a human in the wild. I’d be pissed too if i was locked up in that sh@thole…. I might even kill somebody after enough years.
Watch the movie “The Cove” to see what the dolphin trade is really all about. (Orcas are the largest dolphin species)
Another example of a highly regulated, partially state controlled, not bailed out banking system making the proper tough choices? It bums me out when I think that Brazil’s banks might be better run than my country’s banks right now.
Brazil’s Central Bank Boosts Reserve Requirements Feb. 25 (Bloomberg)
The money that lenders must keep in reserve at the central bank will rise to almost the same level as before the global credit crunch
The higher reserve requirements “represent simply a gradual return to normalcy as the effects of the financial crisis are being overcome,”
Banks will have less cash on hand to lend after the measures take effect, which may slow credit expansion and increase rates for borrowers,
“We do not see them (higher reserve requirements) as a replacement for higher interest rates.”
“There is no more need for these measures,” central bank President Henrique Meirelles told reporters in Brasilia yesterday. “The liquidity conditions are already adequate.”
The move shows Meirelles is concerned with the inflation outlook and wants to reduce lending to keep a lid on consumer demand
Brazil, Latin America’s largest economy, is emerging from its first recession since 2003, and economists have increased their inflation forecasts because of increased consumer demand.
Banco do Brasil today posted a 41 percent increase in fourth-quarter profit after its loan book expanded 34 percent to 300.8 billion reais. The bank’s average 90-day default rate fell to 3.3 percent at the end of December from 3.6 percent in September. The bank said it expects its loan portfolio in Brazil to grow as much as 23 percent this year.
http://www.businessweek.com/news/2010-02-25/brazil-s-central-bank-boosts-reserve-requirements-correct-.html
Everyday its seems that we are closer to having wheels falling off this once great country of ours.
My observation of the day: spare parts are getting hard to find. Our over the stove microwave (a Kenmore) has been in the shop for a repair for over a month. They can’t find the part they need.
I have a cracked windshield on the car. I was planning to wait until summer to replace it, but am beginning to wonder if I should wait until then (sorry Mr. In Colorado, those windshields are back ordered and we don’t have a delivery date).
Ugh.
My mother lives in a rural area and has gone through several windshields because of the gravel roads…
Apparently there is some sort of procedure they can do to prevent the crack from spreading so you can postpone replacement.
Too late, its got a nice big one. I don’t really mind as it doesn’t obstruct the view. It’s $200 to replace it.
And most insurance companies will pay for the
crack to be fixed, no deductible.
“…My observation of the day: spare parts are getting hard to find”
(Hwy sends email to WAL-TON family to inquire if they are having similar “problems” in Arkansas)
Tell your microwave repairman to look for the part on ebay.
Near where I live the Goodwill has what they call an “outlet center” where they literally sell clothes and similar by the pound.
They also often have a big stack of household appliances that are a good source of parts for cheap. Picked up a replacement glass tray for my microwave there cheap.
I love the Goodwill! I haven’t bought new furniture, housewares or clothes in years. I’m about 20 minutes away from the Orange County headquarters in Santa Ana. They sell stuff by the pound there, too. Fabulous treasure hunting!
I believe that’s what he’s doing.
I just got a call! They finally got the part and fixed it!
My heating guy who just did a repair told me he was having a harder time getting parts . I got 27 years out of my clothes washer that I just had to replace . The guy who sold me the new washer said in essence that there is no way I’m going to get that many years out of the new stuff . If you take that into consideration on the price of products items are overpriced . I only got 7 years on my last fridge . Along with the hype of products being outdated in design ,products don’t have the potential to last as long these days Thats why I keep my very sound furniture ,that happened to be a modern design when I bought it ,so its still in style (not that I care about style that much ). Plastic fantastic toxic short lived disposable world we live in today .Oh well ,it is what it is .
Plastic fantastic toxic short lived disposable world we live in today .Oh well ,it is what it is .
I just love your posts, wiz.
“Plastic fantastic toxic short lived disposable world we live in today .Oh well ,it is what it is .”
What a wonderful turn of phrase, Housing Wiz! I love it.
I meant I love the phrase, of course—I hate our “disposable culture”.
I fixed my Kenmore microwave with parts from here.
http://www.repairclinic.com/
Got water?
Feb. 23, 2010, 6:21 p.m. EST
11.3 million homeowners underwater on mortgage
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — More than 11.3 million homeowners — nearly one-fourth of all Americans with a mortgage — owe more on their loan than their home is now worth, according to a report released Tuesday by FirstAmerican CoreLogic.
More than 10% of people with mortgages owe 25% more than their home is worth.
The number of underwater mortgages increased by about 620,000 from the third quarter, the firm said. Another 2.3 million mortgages had less than 5% equity in their home, which could be wiped out if home prices fall further.
Jayan Dhru, Standard & Poor’s global head of Financial Services Ratings, says U.S. banks are still in recovery mode as they manage the credit cycle while reducing leverage and risk. Reforming the banking sector will have unintended consequences on the broader economy.
In the fourth quarter, national home prices fell 1.1% compared with the third quarter, Standard & Poor’s reported in a separate report on Tuesday. See full story on Case-Shiller home price index.
Once the mortgage is underwater, owners cannot easily sell their home or refinance their loan.
Underwater mortgages are concentrated in few states: California, Florida, Nevada, Arizona, Michigan and Georgia. In Nevada, 70% of mortgages were underwater. In California, more than a third of mortgages were underwater.
“The rise in negative equity is closely tied to increases in pre-foreclosure activity,” CoreLogic said. Once a homeowner owes 25% more than the house is worth, foreclosure rates rise sharply.
…
Does the “Underwater Calculation” only include first mortgages, or are second mortgages and home equity loans also included?
Thanks.
Wow - has there EVER been a more blatant display of hypocrisy than Ben Bernanke within a just single day?
Warning of the effects of drugs on one hand…
Bernanke delivers warning on U.S. debt
With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.
… while handing out cocaine packets with the other.
Bernanke Stresses Need for Low Rates
WASHINGTON—After taking several small steps recently to remove the financial system from life support, Federal Reserve Chairman Ben Bernanke made clear Wednesday that he wasn’t close to the more momentous act of raising interest rates, thus tightening credit.
In his semi-annual testimony to Congress on the economy and monetary policy, Mr. Bernanke said that short-term interest rates, now near zero, were likely to remain there for at least several more months.
… keeping in mind of course that one of the prime recipients of said low rates is the U.S. government itself.
If the banks consider other banks to be better risks than the government of the US, couldn’t the interbank lending rate get to be heck of a lot lower than the rate on long term government debt?
I mean, once the banks unload enough of their bad bonds on the Fed, they will be a lot less risky as loan candidates. Of course, their CRE loan exposure could be too high. But the overwhelming majority of the new housing loans are sold to Fan/Fred or FHA guaranteed. FHA guaranteed might actually be a little less safe than regular government paper, but sold to Fan/Fred is sold to Fan/Fred - unless there is fraud in which case I guess you can be forced to take it back, but still…
I’m just saying that the risk premium for debt that isn’t US government issues doesn’t have to be a positive number.
There’s a big difference between investing in assets held by an entity vs. investing in the entity itself. In the case of the government - certainly the assets being bought by the government will likely return very large negative values, however the government itself will always return positive values, until such time as it actually goes belly up - pretty much dissolved via war destruction.
A bank itself will always be a higher risk than the government, since any bank will fail before the government. But interbank lending isn’t the same as “investing in a bank” because the lending is backed by bailouts - e.g. see AIG and GS. AIG’s stock went kaput, but GS’s investments in AIG’s assets (the derivatives) were made whole via government bailouts.
Meant to add - it’s actually fairly fuzzy to me. The above is my take on it anyhow. Not sure if I really responded to your point thoroughly though.
(once my post shows up anyhow)
As an aside - here’s a chart showing government borrowing costs, both in interest rate and in $ terms. The treasury pays on average about 3.3% on its debt. Even though debt is skyrocketing, servicing costs aren’t, since the rate paid has gone down so much. However the rate simply can’t go much lower - thus servicing costs will start rising again; and by a lot if rates start to go up.
If he delivered that speech within 300 ft. of a school, we could have had him arrested.
Maybe BB wants them to raise revenue (taxes)? Yeah, good buddy knock yourself out!
Wow. Good stuff.
Ironically seems that BB doesn’t realize the Fed can get worked by the Treasury by printing all on their own. And they can, if they chose, totally bypass the Fed. And if he pisses us off as much as I think he is about to, just end the entire system.
Dumb ass.
Well - except for one thing - any notes the Treasury prints have to be correlated with silver they have in reserve. The Fed has no such constraint.
And now, for a little walk down (recent) memory lane…
* The Wall Street Journal
* BUSINESS
* MAY 4, 2009
USA Inc.: The State of Capitalism
New York Fed Chairman’s Ties to Goldman Raise Questions
By KATE KELLY and JON HILSENRATH
The Federal Reserve Bank of New York shaped Washington’s response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.
Stephen Friedman
During that time, the New York Fed’s chairman, Stephen Friedman, sat on Goldman’s board and had a large holding in Goldman stock, which because of Goldman’s new status as a bank holding company was a violation of Federal Reserve policy.
…
US = Gov of the banks, for the banks and by the banks.
US = Gov of the banks, for the banks and by the banks.
be nice…
banks are people too…
Possible Gollum ad tag line: “We do toxic assets God’s way.”
Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs
By Richard Teitelbaum
Feb. 23 (Bloomberg) — When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.
Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system.
A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.
…
I think the whole plan on the bail outs were hatched way long before the
the last minute FIRE call was made . In fact ,I use to like to watch them setting it up way ahead of time while I was in horror over what I thought the set up was looking like . They had a few snags to overcome ,but solving the matter based on standing law at the time was not
something that the corrupt and legally liable could stand . In retrospect
many are questioning the bail-outs .
I remember people saying at the time in essence that we couldn’t afford bail-outs ,but they did it anyway . Was it a good faith bailout in the best Interest of the Country ….no way . One of the problems is the public will never get all the information on what the fall out was going to be ,and what Countries it would ruffle .
PPT, better get to humping it today.
Humping, pumping, fluffing…
not sure what the best adjective is to describe the PPT’s interventions?
What do they call it when they make 12 oz of coffee look the same as 16 oz in the same size can?
Can? Can?
Old timer.
consumerist.dot.com calls it a “shrink ray”
Bernanke to stock market bull herd: “Party on, Garth! I’m gonna keep nterest rates low forever!!!
Bernanke repeats U.S. interest rates to stay low
Thu Feb 25, 2010 9:00am EST
WASHINGTON, Feb 25 (Reuters) - Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee on Thursday that U.S. interest rates will have to stay low for a lengthy period to counter a weak job market.
…
I’d say it is a pretty bad sign for U.S. stock market investors if the market can’t muster a rally right after the Fed chairman tries yet another round of psychological stock market stimulus.
But as with all addicts, the dose would have to keep INCREASING to be effective.
But now that Bernokio has rates at zero, it’s impossible to increase the dosage.
See my post above. What an incredible, incredible hypocrite he is.
Man has a job to do…
My vote for Incredible Hypocrite of the Week is Senator John McCain himself.
Mister “Big Gubmint stay out of our Health Care” has co-sponsored a bill for FDA regulation of vitamin and mineral supplements. Can you say: In the pocket of Big Pharma?
I knew that you could.
Years ago, I had a condition for which conventional medicine was just beginning to develop treatments. And I was in a bad way. In addition to having this particular condition, I was having a tough time getting to sleep and staying there.
So, I turned to alternative medicine. Took a relatively inexpensive over-the-counter amino acid, which I’d heard would help me sleep.
Well, guess what. Not only did I start getting a good night’s sleep on a regular basis, my other condition improved greatly. It no longer troubles me.
The amino acid was called l-tryptophan, and a few years after I used it, it was removed from the market. A few people had gotten sick, and, IIRC, some died. Upon further investigation, the problem was traced to a bad batch.
I think that l-tryp is back on the market, but I no longer need it. But it served as a useful bridge between illness and health.
What troubles me about McCain is that he’s talking out both sides of his mouth. He’s your senator, I know you will probably be voting for the Democrat candidate, at this point I don’t care who beats him because he only finds his conservative voice when he is facing a challenge from the right.
Except adding more regulation to vitamins and minerals is not conservative, which leads me to believe there is a bigtime payola in it for him, from the chem/pharma/industrial complex. Eff him and the horse he rode in on. I even voted for the old fool in 2008, wish I could take that one back.
fibromyalgia? After a whiplash injury, I been hurting all over for 10yrs now
If it is all green shoots from here, how come the stock market is dropping like a rock today? Isn’t the stock market considered to be a leading economic indicator?
Full Post
Posted Wednesday, February 24, 2010 3:51 PM
Bernanke Predicts Clear Skies Ahead to Congress
Robert J. Samuelson
The most interesting part of Federal Reserve chairman Ben Bernanke’s Congressional testimony today was his confidence that the economic recovery would continue. Some observers have expressed fears that the economy would falter as the effects of the Obama Administration’s “stimulus” program diminished and as businesses finished adjusting inventories. But Bernanke argued that the economy shows increasing strength in two crucial areas: consumer spending and business investment.
“Consumer spending has recently picked up,” he told the House Committee on Financial Services, “reflecting gains in real disposable income and household wealth and tentative signs of stabilization in the labor market.” For the last half of 2009, consumer spending rose at a 2.4 percent annual rate; for the first half of the year, it dropped at a 0.3 percent rate. At the same time, he noted that business investment in equipment (new machinery and computers) and software “has risen significantly.” In the fourth quarter, it increased at a 13 percent annual rate, the second consecutive quarterly increase; by contrast, it had declined continuously in the previous six quarters. He did concede that both residential housing and commercial construction remain weak.
…
How ’bout them January new home sales?
“If it is all green shoots from here, how come the stock market is dropping like a rock today? Isn’t the stock market considered to be a leading economic indicator?”
Ah yes, the leading indicator notion.
These days we also must consider the PSYOPS Index, which is the level at which the Ministers of Finance and Propaganda work together with Megabank to manufacture enthusiasm and expectations ABOUT the economy and markets.
The PSYOPS index, also known as the BS Quotient, tends to rise exponentially with “unexpected surprise” surrounding the failure of the government to improve the overall economy.
all that’s left is psyops and head fakes …
I guess we’re the new Soviet Union.
Orlando apartments sell for $6.1M
Orlando Business Journal ~ 2-24-10
A Sarasota firm bought a 360-unit apartment complex in southwest Orlando for $6.1 million.
FLR Waterways LLC, whose managing partner is Sarasota-based real estate firm Insula Properties LLC, bought the complex off Orange Blossom Trail near the Mall at Millenia from New York-based Waterways Florida LLC on Feb. 5, Orange County records showed.
Shelton Granade and Luke Wickham, agents with the multi-housing group of CB Richard Ellis in Orlando, exclusively represented the seller and reported more than 40 offers on the property prior to its closing, despite it being only 76 percent occupied. The buyer did not have a real estate agent, Granade said.
The complex, which was completed in 1988, was sold for $24 million in 2006, when Waterways Florida acquired it from then California-based developer JRK Orlando Partners LP, county records showed.
Whoa! 25 cents on the dollar compared to 2006! The new owner could get a lot of rental income from that.
Makes me wonder just how far back house prices will go? A couple of years ago I was thinking Arizona house prices will go back to 1998 levels.
Friday morning in Chandler, Az, while waiting for the dental hygienist, I overhead two dental assistants talking. One of them was mentioning she and her husband just sold their house they had for ten years. They put a lot of sweat equity in it. I think she mentioned a pond, decorative rocks, tiles. They were proud of it and sad to leave. She said they sold the house for what they bought it.
Some of the Phoenix houses are already at 2000 levels. Zillow seems to only go back ten years on price history. I’m thinking mid-1980 price levels can be reached in a few years because of boomers downsizing.
unexpected rise in jobless claims.
http://www.ft.com/cms/s/0/85763cb4-2215-11df-98dd-00144feab49a.html?ftcamp=rss
“unexpected”
Blame it on the weather.
Go on and blame it on the snow
Cause the snow don’t mind
And the snow don’t care
Next: a rat chewed through some wires, and shut down the stock exchange just before…
Don’t remind me. We had one lousy fricken
mouse that chewed up the inside of our almost
new LG washing machine; it’s still not fixed
after two months.
Bernanke probing Gollum? Don’t probe your bosses too heavily…
market pulse
Feb. 25, 2010, 9:40 a.m. EST
Bernanke probing Goldman’s dealings with Greece
By Greg Robb
WASHINGTON (MarketWatch) — Federal Reserve Board Chairman Ben Bernanke revealed Thursday that the central bank is looking into Goldman Sach’s dealings with the Greek government. “We are looking into a number of questions of Goldman Sach’s derivative arrangements with Greece,” …
OK we’re safe, the fox is going to look into where those chickens disappeared to.
“We are looking into a number of questions of Goldman Sach’s derivative arrangements with Greece,” …
I’m sure this ‘looking into’ will be on going, and then magically GS did nothing wrong. BB knows not to tug on superman’s cape, I’m sure he got permission to use the term looking into.
Bernanke probing Goldman’s dealings with Grease
Bernanke probing Goldman’s dealings with Grease
Woa, now that I re-read it, maybe I better explain my joke attempt…
Grease slang meaning:
A euphemism, meaning, to bribe, as in “to grease someone’s palm”
A term used to imply something illegal, under the table or unethical
source: wiki
The Fed probing Goldman Sachs. What a farce. Here, let me save the taxpayers a bunch of time and money and write their conclusion for them: “After an extensive investigation, we find evidence of wrongdoing on the part of Goldman Sachs. However, Goldman has committed itself to greater transparency in future derivatives-related arrangements with Greece.”
But I don’t want to save time and money. I want to see a dog-and-pony show !!!
It gets worse. I guess now that BB is probing Gollum, the Senate has decided he is serious about regulating bad boy lenders, and wants to go back to the plan of turning the Fed into the Supercop financial regulator.
Enjoy that friendly fury fox in your coop, chickens!
Was Bernokio’s nose growing when he made that statement?
countrystudies dot us/spain/8.htm
Sixteenth-century Spain was ultimately the victim of its own wealth. Military expenditure did not stimulate domestic production. Bullion from American mines passed through Spain like water through a sieve to pay for troops in the Netherlands and Italy, to maintain the emperor’s forces in Germany and ships at sea, and to satisfy conspicuous consumption at home. The glut of precious metal brought from America and spent on Spain’s military establishment quickened inflation throughout Europe, left Spaniards without sufficient specie to pay debts, and caused Spanish goods to become too overpriced to compete in international markets.
American bullion alone could not satisfy the demands of military expenditure. Domestic production was heavily taxed, driving up prices for Spanish-made goods. The sale of titles to entrepreneurs who bought their way up the social ladder, removing themselves from the productive sector of the economy and padding an increasingly parasitic aristocracy, provided additional funds. Potential profit from the sale of property served as an incentive for further confiscations from Conversos and Moriscos.
Spain’s apparent prosperity in the sixteenth century was not based on actual economic growth. As its bullion supply decreased in the seventeenth century, Spain was neither able to meet the cost of its military commitments nor to pay for imports of manufactured goods that could not be produced efficiently at home. The overall effect of plague and emigration reduced Spain’s population from 8 million in the early sixteenth century to 7 million by the mid-seventeenth century. Land was taken out of production for lack of labor and the incentive to develop it, and Spain, although predominantly agrarian, depended on imports of foodstuffs.
What’s that saying about those who don’t learn from history?
They got an F?
Local commercial construction contracts plummet 75% in January
Birmingham Business Journal - 2-25-10
Local construction continued to suffer into the new year, as commercial contracts saw a significant year-over-year drop in January.
McGraw-Hill Construction, a national tracker of construction activity, said contracts for future commercial construction in the Birmingham area were down 75 percent in January to $16.4 million, compared to $65.1 million in the same month last year.
Local residential contracts remained unchanged at more than $31.4 million last month.
Statewide, commercial contracts were down 38 percent to $205.5 million, from $330.1 million a year ago. However, residential contracts in the state rose 3 percent to $229.8 million.
Detroit Mayor Bing emphasizes need to shrink city.
Mayor says it’s not ‘an easy conversation,’ but people, services must be focused to save city. ~ The Detroit News
Detroit –Mayor Dave Bing said Wednesday he “absolutely” intends to relocate residents from desolate neighborhoods and is bracing for inevitable legal challenges when he unveils his downsizing plan.
In his strongest statements about shrinking the city since taking office, Bing told WJR-760 AM the city is using internal and external data to decide “winners and losers.” The city plans to save some neighborhoods and encourage residents to move from others, he said.
“If we don’t do it, you know this whole city is going to go down. I’m hopeful people will understand that,” Bing said. “If we can incentivize some of those folks that are in those desolate areas, they can get a better situation.”
“If they stay where they are I absolutely cannot give them all the services they require.”
Detroit –Mayor Dave Bing said Wednesday he “absolutely” intends to relocate residents
Oh, that’ll go over well… and be cheap.
Detroit –Mayor Dave Bing said Wednesday he “absolutely” intends to relocate residents
Oh, that’ll go over well… and be cheap.
I know, but I was thinking something different too. This is one of the only politicians lately who seems to have grasped the magnitude of a horrendous problem and proposed a radical change that might work. It seems doing nothing might not be an option anymore.
If we don’t do it, you know this whole city is going to go down.
I was thinking the same thing Rio.
I think the problem is how does he get the momentum for his constituents to understand so deeply and so completely that they are motivated to make the necessary changes. IMHO, human nature is to cling to what one knows and many take that to the level where it’s almost too late to reverse the damage.
I was on a website today where people are organizing against one of our governor’s David Paterson’s proposed cuts. Now I’m no cheerleader of everything David Paterson but it was really obvious these people posting on this website were overwhelmingly processing his suggestion w/minds still stuck in the old paradigm. This is what angers me so much about all the recovery cheerleaders. So many people will not prepare for the amount of failure still in their futures until they have crossed the point of no return. And they call that leadership? They’re leading many into outright financial crises.
So where exactly does Mayor Bling plan to relocate said people?
Iowa?
Alabama?
Iowa?
Alabama?
No, it didn’t mention those states in the article.
I heard a radio show in which one guest had moved to Detroit and successfully created a farm there on a brownfield site. Another guest had done an extensive study on developing food production in decaying industrial cities, taking into account leftover industrial pollution in site selection - what can and can’t be mitigated. Someone talked about re-purposing malls and mall parking lots for food production.
It was a really interesting program, plenty of food for thought. It had a format similar to Diane Rehm show, but it was an unfamiliar show. I heard it on public radio driving through western Oklahoma - it might have been an obscure PRI agriculture discussion call-in show.
I think the problem is how does he get the momentum for his constituents to understand so deeply and so completely that they are motivated to make the necessary changes.
CarrieAnn,
That’s a big problem and you’re right about the level of denial in people and our leadership. Reality is just starting to feel real I think.
Another guest had done an extensive study on developing food production in decaying industrial cities,
Hip,
That’s interesting and on the comments section of the original article at detnews dot com most of the comments are positive towards the mayor’s idea and many of them talk about turning much of the land over to food production too.
more things I remember from the show:
One caller was interested in using more harvestable landscaping in public spaces. He was doing a pilot project in a midwestern town, planting fruit and nut trees in the courthouse and public library lawns and creating garden allotments on un-utilized public lands.
Another caller was a schoolteacher whose students had a garden project on the school grounds. Some of their vegetables were being stolen by homeless people camped out at a nearby river. The students decided to allow them access to part of the harvest following conditions (amount, timing, doing some weeding…).
The students decided to allow them access to part of the harvest following conditions (amount, timing, doing some weeding…).
Yay for the students!
But, at the same time, I think it’s wise to keep a garden where it can’t be seen by passersby. Cuts down on temptation. (In my own case, my garden is behind a six-foot fence.)
I saw a PBS show on this subject. It had a couple of billionaires funding the huge green project, for Detroit. What mayor Bing wants to do is consolidate, so less services are needed. He has no other options and I hope he’s successful.
Do you have any idea what program it was?
The Detroit depopulation adjustment could proceed along similar lines to that of some Japanese cities, moving people to be close to mass transit corridors. Wonder if the few scattered Japanese children today might all fit in a single upscale Tokyo neighborhood in the next century.
“Bailout rage is back. Thanks, Greece.”
New bill: Create jobs, become a resident.
Silicon Valley / San Jose Business Journal ~ 2-24-10
A bill introduced in the Senate would provide new, expanded visa terms for people who come to the U.S. and create startups.
The Startup Visa Act of 2010 allows for immigrant entrepreneurs to receive visas good for two years if they can raise a minimum of $250,000; of that $100,000 must be from qualified U.S. investor. After the two years is up, the person could become a legal resident if they’ve been able to create five or more jobs — not for children or a spouse — and can add another $1 million in revenue or investment.
A large number of angels and VC heavyweights are backing the bill, including Reid Hoffman, founder of Mountain View-based LinkedIn, and Brad Feld, co-founder of Mobius Venture Capital, which has an office in Palo Alto.
Ummm, that’s something that used to happen naturally - no special programs needed. Still, such immigrants might want to be sure they don’t emigrate from a country that might run afoul of Uncle Sugar some day. (think German Americans during WW I and Japanese Americans during WW II)
We have no American innovation for start-ups?
We have it. We just don’t get paid for it.
paid=rewarded
Thanks to Ronald Raygun, we aren’t likely to go Greek…
Feb. 25, 2010, 3:34 a.m. EST
U.S. workers unlikely to go the way of Greece
Weaker unions, cultural differences make any mass walkouts unlikely
By Liana Balinsky-Baker & William Spain, MarketWatch
CHICAGO (MarketWatch) — Ballooning deficits. Troubled banks. Budget cuts. Wage freezes. All these, and a basketful of other economic woes, fueled a general strike that paralyzed much of Greece on Wednesday — and many of the same conditions exist in the U.S. as well.
But considering the history of American labor, currently high levels of unemployment, the fragmentation of the union movement and considerable cultural differences, a similar nationwide walkout here seems extremely unlikely, almost regardless of how bad things might get.
…
To summarize - a leader is a lot more apt to do actions that result later in angry mobs if he first burns down the pitchfork factory.
Weaker unions are a symptom - not the cause. “Golden handcuffs” and TeeVee led to this.
It really is mind control. I keep flashing back to that cult classic Max Headroom TV series. Blipverts=Twitter?
George Packer and Christopher Hitchens talk about George Orwell and his work. Mr. Packer selected the pieces that appear in two recently published volumes of George Orwell’s work: “Facing Unpleasant Facts” and “All Art Is Propaganda.” Mr. Hitchens, essayist for The Atlantic Monthly, is the author of “Why Orwell Matters.”
booktv . org
Max Headroom, now that brings back memories. Another Sci Fi series way ahead of its time. The lines between MSM, corporation, and state were completely blurred - network executives watched TV ratings in real time and adjusted programming immediately. The people lived on the streets and even bartered in human organs.
Re: my SeaWorld comment yesterday
The state organization I worked for last fall had a conference there and was treated to a private, “behind the scenes” presentation, and that lady was our guide/host. My “insane set-up” comment was basically a nod to the fact that you have people swimming around with massive, powerful fish. During our show, one of the men trainers had to swim to safety after being held underwater for a very long time. I think the average person would have drowned 3x over, but he made it. They also did a trick where one of the whales did a spinning 360 across a platform.
Since I don’t attend these types of things voluntarily, it was eye-opening to be that close to the experience.
I havent’t been to Seaworld in about 15 years. I probably won’t be back anytime soon.
News reports say the park is packed.
“…powerful fish.”
Of course, orcas (aka ‘killer whales’) are marine mammals, not fish — far more intelligent, habituative and unpredictable in behavior than sharks. I am guessing if an orca gets into the habit of killing trainers, it might be time to retire it from service at SeaWorld and find a kinder, gentler killer whale to replace it? The problem is that training new orcas is expensive, especially if the choice to do so involves down time from having a pool full of them at a SeaWorld show.
You crack me up.
Has someone commandeered PB’s keyboard?
China To Purchase Half of IMF’s Gold
Business/Finance/Source: Pravda.Ru ~ 25.02.2010
China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.
World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.
The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.
China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.
Gold & US Treasuries…that ought to feed 1.3 Billion humans…until it doesn’t.
I assume they’re using some form of currency to pay for the gold. Perhaps their US Treasuries? I’d rather have the gold than the paper.
China’s not so enamored with U.S. treasuries these days - they’re dumping them. Seems gold is worth more to them now. Imagine that.
U.S. Real Estate was very valuable to the equities-rich Japanese in 1990 as well. Just adding caution to my optimism.
Found this interesting oops from Commodity Online just yesterday…
India keen to buy 191 tonnes of IMF gold
Published on February 24, 2010 at 16:50
MUMBAI (Commodity Online): Will India go in for buying the 191 tonnes of gold that the International Monetary Fund (IMF) plans to sell soon? Yes, India is a potential buyer for the remaining stock of IMF gold that is to be sold in the open bullion market, analysts said on Wednesday.
Last week, IMF announced that it is going to sell the remaining 191 tonnes of gold as part of its 403 tonnes of approved gold sales programme. In November 2009, India bought 200 tonnes of gold from IMF as part of the Reserve Bank of India (RBI) plans to mop up its foreign exchange reserves in the yellow metal.
Ever since the latest IMF announcement on its gold sale plans, there has been speculation that China, that has been aggressively pursuing to step up gold reserves, would jump into the latest gold selling offer from IMF.
But it is unlikely that China would go for the later offer of IMF gold sale. The China Gold Association has already said that it is not feasible for China to buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility.
Instead the Association said the country would continue to shore up its gold reserves by acquiring gold mines abroad rather than purchases on the international market.
…
(emphasis mine)
Bad call.
BTW - interesting that Pravda would get that scoop. No one else is reporting it yet, that I can see.
“…or even intent to do so would trigger market speculation and volatility.”
“This will NEVER happen in China,…trust me, history’s on my side!”
India bought 191 tonnes in November. The question was whether it will buy another 191 tonnes. Not sure how 191 and 191 add to 400! Well China got the “other” 191 tonnes. At $1100 spot that’s $74,301,865,000 worth.
Kitco currently reports gold up $7 per ounce.
Actually India bought about 200 in November; along with a couple of other countries the total was about 212 tonnes; thus the remaining 191 tonnes (from the original 403 available) being sold now.
So, going by Hoz’s advice to “buy what China buys”, it looks like we’ll all be buying gold now.
I can’t help but imagine in another 1000 years somebody will write a book called Guns, Germs, Steel and Banking and the author will talk about how the winners were the people who traded pieces of paper and electrical 1s and 0s for other peoples’ resources like their oil and gold, etc. It will be a fascinating read in the future.
All your resource are belong to us.
+1
May I humbly suggest: Gens, Germs, Steel and Blips
Blips is king.
I am surprised they are still in business.
Blockbuster to Close More Stores After Another Awful Quarter.
02/25/10 Company News
Struggling video-rental chain Blockbuster (BBI) posted another dismal earnings report for the fourth quarter — a period that is usually its strongest because of the holidays. The company — long under assault from Netflix (NFLX), rental kiosks and online video offerings — shut down 253 of its U.S. stores in January.
It now plans to shutter another 150 or so in April, and additional closures are planned for a total of between 500 and 545 stores in 2010. The latest moves follow Blockbuster’s closure of 374 U.S. stores last year, which left it with 3,525 entering 2010.
My daughter is renting DVDs now from a vending machine. Red Box I think it’s called. Hard for a brick and mortar store with staff to compete with that business model.
Modern day jukebox.
RedBox, hmmm…well, we were using them ’till recently…somethings happened though.
1.Seems they come up with a way that you can “reserve” a movie online….then go pick-it-up
2. They’ve added in lots of “Old Time Hits” not a bad thing, but it must take up slot space for recent releases
The problem is that when you sort by release date…there’s hardly any current movies available…not cool if you’ve waited in line for 7 minutes just to see what you “might” possibly be able to rent. Lots of frustrated people walking away “empty-handed”
I notice that at some stores they have x2 Boxes…maybe x1 of those should be on a “first-come / first-serve” basis… FWIW
I use the online reservation method a lot. They also send out codes for free rentals every once in a while.
Another problem I’ve run into is that the boxes in our area show pictures of what is supposedly available in the machine. Sometimes it just isn’t true. I’m not sure if this is because of the “return to any Redbox” policy or just plain poor inventory control.
I saw a Blockbuster DVD rental machine the other day.
Red Box apparently leases footprint at McDonalds and convenience stores. That’s a great business model.
They are mostly at grocery stores in my area. Wal-Mart, too. The Blockbuster Express machine I saw was at a Sheetz gas station.
We use RedBox all the time. We love it. It’s inexpensive- $1.00, you can find the movie at a location and *reserve it, and it will be there when you go pick it up. They email a confirmation that it was returned (you set that up), and no waiting in a line. RedBox is owned by Coinstar and other partners.
*They charge your CC. They are gracious about problems. We’ve been compt quite nicely.
We’ve been downloading straight to the TV or harddrive of my computer for a while now.
The pick-up/drop off model of movies will soon be completely dead.
Yeah, no kidding! Nothing can match the level of conveinence offered by downloads.
So that leaves about 2,500 more stores to close before they finally disappear?
Fed looks into Goldman:
This is like saying the murder suspect is looking into his own alibi: “Yep, rock solid.”
http://money.cnn.com/2010/02/25/news/economy/bernanke_goldman/index.htm?source=yahoo_quote
Hurry or be priced out forever…
FHFA: D.C. housing prices jump 10.5%
Washington Business Journal - 2-24-10
A government report says housing prices in the Washington area posted the biggest year-over-year increase in the nation last quarter, jumping more than 10.5 percent.
The Federal Housing Finance Agency says average prices in the Washington area were up 10.55 percent in the fourth quarter compared to the fourth quarter of 2008. It says average prices jumped 5.63 percent from the third quarter.
Nationally, FHFA says average year-over-year housing prices fell 1.2 percent.
FHFA calculates its Home Price Index using only Fannie Mae and Freddie Mac-acquired mortgages and excludes some foreclosure sales.
A separate report, the S&P Case Shiller Home Price Index, earlier this week reported Washington area housing prices in December were up 1.9 percent from a year earlier.
When broken down by states, the FHFA report saw price appreciation in Virginia was the second best in the nation, up 3.07 percent in the last year, topped only by Oklahoma’s 3.53 percent annual increase. Maryland prices in the fourth quarter were down 5.49 percent from a year ago.
Its good to be the king.
OK, which one of you wrote this?
Housing problem was the bubble, not the bust 02/25/10
As sales of new homes reach historic lows, there are increasingly strident calls for Washington to do something. These demands for action, however, fail to recognize that it was government, mostly Washington, which got us into this mess in the first place.
The rental vacancy rate is just shy of 11 percent, while owner vacancy rate is approaching 3 percent, both close to double their historic average.
The Federal Reserve’s extremely loose policies earlier this decade resulted in a massive reallocation of resources from the rest of the economy into housing
Washington must stop and re-learn basic economics. First, when you’re in a hole, stop digging. In the case of housing, as a country, we built too much. The cure is to build less. Second recognize that for markets to clear,
http://dailycaller.com/2010/02/25/housing-problem-was-the-bubble-not-the-bust/
Just received this e-mail Warning!
“If you get an email titled “Nude photo of Nancy Pelosi” do not open it! It contains a nude photo of Nancy Pelosi.”
LOL
Realty Check - Diana Olick (cnbc.com)
The mortgage walk away number
=
Negative $70,000
Sorry, couldn’t get the link to copy for some reason
Implies anyone down less than $70k is a “savvy investor” in this environment.
New hotel could segregate downtown, housing activists claim.
Business Courier of Cincinnati ~ 2-24-10
Low-income housing advocates are asking Cincinnati City Council to reject a financing plan to convert the Metropole apartments to a boutique hotel, saying the redevelopment endangers one of the city’s only integrated neighborhoods.
The new argument against the proposed 21c Museum Hotel comes as council prepares to vote March 3 on a $2.5 million grant and $4.6 million loan that would help remodel the Walnut Street apartment property. A development company affiliated with the Cincinnati Center City Development Corp. is trying to bring a luxury hotel operator from Louisville to the building, which sits in the middle of downtown’s arts and cultural district. Council’s finance committee approved the financing package this week, with six members of council voting in favor.
In a Feb. 25 letter to city council, the group, Housing Opportunities Made Equal, argues that downtown is “one of only three (out of 101 communities) in Hamilton County that, as of the 2000 Census, had been racially integrated for over 30 years.” As of 2000, wrote HOME Executive Director Elizabeth Brown, there were 1,246 African Americans living downtown, about 10 percent of them at the Metropole.
“Removal of these residents from downtown furthers the destruction of an integrated, mixed income neighborhood and ensures total gentrification,” Brown wrote.
The new argument against the proposed 21c Museum Hotel comes as council prepares to vote March 3 on a $2.5 million grant and $4.6 million loan that would help remodel the Walnut Street apartment property.
My guess is the low-income housing advocates may be part of a coalition objecting to the city council granting $2.5 million and loaning $4.6 million for the conversion to the 21c Museum Hotel. I googled “21c Museum Hotel” and found the site for the Louisville downtown luxury lodging that is the origin of this project. Among the reviews besides the pretentious photos:
I suppose 21c Museum Hotel Austin is on its way next - city council will just add “hip” “green” “bicycle” and “music” to the pretentious arts twaddle to justify spending our money financing it.
Thanks for the post, wmbz.
$$$$hiT !!!!
There IS going to be one in Austin! I googled 21c Museum Hotel again and 21c Museum Hotel Austin is one of the suggested matches.
Oh man. I just can’t stand this stuff.
I tried to add a comment after I learned that there IS a 21c Museum Hotel Austin in the works.
I guess I didn’t disguise my curse word well enough?
sorry. hip’s endless rambling squared.
Moody’s Downgrade May Worsen Greece’s Condition, Risy Assets Move Lower. ibtimes.com ~ 25 Feb, 2010
After S&P, Moody’s warned that it may downgrade Greece’s credit rating in a few months. This raised market concerns that the country’s economic and political conditions would paralyze it measures to reduce budget deficits.
In an interview in Tokyo today, Pierre Cailleteau said that if there are significant deviations from the plan, Moody’s will even downgrade Greece’s rating by a couple of notches. Currently, Moody’s rating of Greece is A2, the 6th highest and 2 notches above the BBB+ held by S&P and Fitch Ratings. If Moody’s reduce Greece’s credit rating to the same level as the other 2 agencies, it will intensify the problem of the sovereign crisis as the ECB is going to revert to old collateral rule which requires ECB collateral to be at least A-.
Currently trading at 1.349 against USD, euro’s near-term remain weak. Against Japanese yen, the euro even slurped to 120.2, the lowest level in a year, as investors shift capitals from risky assets to safe havens.
Maybe we can knock some sense into this knuckle head.
Bernanke Defends Fed’s Ability to Supervise Banks
WASHINGTON — The Federal Reserve chairman, Ben S. Bernanke, urged senators on Thursday not to strip the central bank of its authority to supervise the country’s largest banks, warning that to do so would pose a “grave risk.”
“It’s hard for me to understand why, in the face of crisis that was so complex and covered so many markets and institutions, you would want to take out of the regulatory system the one institution that has the full range and breadth of skills to address those issues,” Mr. Bernanke said.
Mr. Bernanke also expressed skepticism about the feasibility of the so-called Volcker Rule, a proposal, supported by the Obama administration, that would prevent banks from owning hedge funds and private equity funds and prohibit them from risking their own money making market bets.
He also said the Fed was “looking into a number of questions relating to Goldman Sachs and other companies related to their derivatives arrangements with Greece,” after reports of the role that credit-default swaps had played in enhancing that country’s borrowing costs.
http://www.nytimes.com/2010/02/26/business/economy/26fed.html
Litmus Test: The People, or the Insurance Companies?
It’s also a simple question: would your Congressperson defend your interests over those of a group of large corporations that can spend lots of money helping or hurting his or her re-election chances? In light of the recent Supreme Court decision in Citizens United, which allows corporations to spend an unlimited amount of money in elections, the stakes are substantially higher than they used to be: now those corporations can spend millions from their treasuries to retaliate against or reward members of Congress. That spending can be sufficiently large to make or break an election.
Next week we are likely to get an unambiguous answer to that question for every member of the US House of Representatives, thanks to a bill introduced by Virginia Representative Tom Perriello. Perriello, a favorite target of the Tea Party protesters, seems to have gotten a clear message from both sides of the political spectrum: Congress needs to stop catering to big corporations and start fighting for ordinary people. So he’s going straight for the insurance companies’ jugular in an opening salvo for larger reform, introducing a bill to “restore the application of the Federal anti-trust laws to the business of health insurance to protect competition and consumers.” His bill is wonderfully short and spare: it’s two pages long, a mere twenty-nine lines of substantive text. It contains no loopholes and no compromises. It does one thing only: it applies federal anti-trust laws to health insurance companies.
It is a clean litmus test for determining whose side a representative is on.
http://www.thenation.com/doc/20100308/burner
This fellow must be nutz, the PTB say it’s over.
Brookings fellow: Recession is not over yet
Jacksonville Business Journal - February 25, 2010
Despite reports that the U.S. has emerged from recession, Brookings Institution Senior Fellow Anthony Downs thinks the economy is still deeply embroiled in it.
Speaking at an Urban Land Institute/NAIOP event in Jacksonville Feb. 25, Downs said the effects of years of overspending, overleveraging and loose lending regulations will continue to impact the economy on a national level, a state level and locally.
“The recession is not yet over,” Downs said. “We might have stopped falling, but we haven’t started the climb back up.”
Foreclosures will continue to weigh down the value of residential properties, Downs said, and a tremendous number of commercial properties are expected to go into default as loans made during the height of the market come due through 2013 that property owners won’t be able to pay off or refinance.
What’s worse, he’s pretty well nailed the causes of our current malaise:
Speaking at an Urban Land Institute/NAIOP event in Jacksonville Feb. 25, Downs said the effects of years of overspending, overleveraging and loose lending regulations will continue to impact the economy on a national level, a state level and locally.
I guess “Enron, the play” is opening in London’s West End…Art imitates Life….
The world becomes Enronised..25 February 2010
Tickets are still available…if you wanted the full Enron experience you could also steal them…In the play, Enron’s crazy, kamikaze exploitation of California’s deregulated electricity system comes to life through a Jedi Star Wars display.
Unable to make real profits, Enron inflated its fake success through ever more absurd “financial engineering.”…Its collapse should have taken the edge of a speculative boom…However, rather than focus on rebalancing the economy, politicians and market-makers decided to find new ways to keep the boom going - the equally hollow internet boom, the credit boom, the housing boom.
The men in boardrooms and cabinet rooms did learn lessons from Enron, but precisely the wrong ones. They imitated Enron’s ability to create imaginary profits and losses were hidden in dubious “instruments” that did not appear properly in the accounts…Hoped-for future profits were treated as if they had already arrived, like pretending all your Christmases were turning up together.
“Asset-backed securities” - packages of poorly performing mortgages dressed up as if they were guaranteed winners - were an Enron-style cheat and they sat at the centre of the credit crunch…Governments have not only encouraged Enron-style accounting in the market, they have used it in the state itself…And now it turns out Greece has been busy with Enron accounting, thanks to help from Goldman Sachs. It has been using a trick called “securitisation.”
So governments and companies that should have been concentrating on creating real value have instead saddled us with debts based on false values…There are two more important elements to this confidence trick…First, in order to make it respectable and to build confidence in the trick, politicians have had to stand in for cover.
http://www.morningstaronline.co.uk/index.php/news/content/view/full/87288
It played in the suburbs for a while before moving to the West End. I’m planning to go this summer, I’ll pick up cheap tix same day at the discount booth in Leicester Square. Tim Pigott-Smith is playing Ken Lay until May; I hope he extends in the role, because I’m going in July.
17K to lose jobless benefits in Indiana on Monday
25 Feb 2010
INDIANAPOLIS (WISH) - The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snows led to higher layoffs.
First-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000.
Meanwhile, thousands of Hoosiers already receiving unemployment benefits could lose them Monday. Congress has not yet voted to continue the extended benefits paid for by the federal government.
Those benefits, which go beyond the 26 weeks provided by the state, to a total of 99 weeks, expire Saturday.
“This is not a decision we can make here at the state level. We administer the program. But if they’re not going to continue the program than we cannot continue providing those benefits,” said Marc Lotter of the Indiana Workforce Development.
Lotter said about 17,000 Hoosiers will lose their unemployment benefits Monday if Congress doesn’t vote to extend them by Saturday.
Doubts Grow About Britain’s Exit from Recession
25 Feb 2010 ~ Associated Press
Fears mounted Thursday that Britain may not have emerged from recession at the end of 2009 after all, as statistics showed a dramatic fall in business investment in the last three months of the year.
The surprise 5.8 percent decline in business investment led many economists to reconsider their expectations that a 0.1 percent rise in gross domestic product in the fourth quarter would be revised upward in new data due out Friday - with some warning of a downward revision instead.
The parlous state of the British economy is expected to be a major issue in an upcoming general election and news that the country has not yet escaped the downturn would be a blow to British Prime Minister Gordon Brown’s Labour Party in what is expected to be a closely fought campaign.
Govt. Interference Makes It “Almost Impossible” to Forecast Stocks, Strategist Admits ~ Feb 25, 2010 Aaron Task in Investing.
If “it’s different this time” are the most dangerous words on Wall Street, “I don’t know?” are probably the ones most rarely heard.
There’s no shortage of hubris and declarative statements on Wall Street, especially among the pundits and strategist types. Thus, it was refreshing to hear Miller Tabak equity strategist Peter Boockvar say “it’s almost impossible to say where the market is going to go” in the short term.
There’s a very specific reason for Boockvar’s apparent modesty: The overwhelming influence of policymakers worldwide, which he says has forced market players to become political scientists.
“If I came into work every day focused on fundamentals, return on equity, economic data…company behavior, then I’d be able to tell you where I think the market is going to go,” he says. “But we’re all sitting around waiting to see how the market responds to…what the governments are trying to do to supposedly make things better.”
Maryland sells $595M in bonds, sees savings from Triple AAA rating
Baltimore Business Journal - 2-24-10
The state sold $595 million in bonds Wednesday, including $400 million in bonds whose interest is subsidized by the federal stimulus package.
Jefferies and Co. Inc. bought $195 million in tax-exempt bonds at 2.965 percent interest. Citigroup Global Markets Inc. bought the rest, issued through the Build America Bond program, at 2.849 percent interest.
State officials emphasized that Maryland’s Triple-A bond rating from each of the major ratings agencies helps it reduce the cost of borrowing money. The refinancing of the non-stimulus-backed bonds saved $8.6 million.
“Today’s overall low rate underscores the intrinsic value of our Triple AAA rating and shows again that investors see Maryland as an exceptionally safe and prudent investment,” Treasurer Nancy Kopp said in a statement.
Under the Build America Bond program, the U.S. treasury pays 35 percent of the interest owed on the bonds. That will save the state $11.2 million.
The state sells bonds to raise money for one-time construction projects, including road projects or building of schools and hospitals.
Lots of important data contained in this release from Elizabeth Warren regarding bank’s exposure to commercial real estate. I think a few of you will really enjoy it:
http://www.thedailymiddle.com/2010/02/25/elizabeth-warren-2988-banks-are-currently-classified-as-having-a-risky-concentration-of-commercial-real-estate-loans.html
Elizabeth Warren, “2,988 Banks Are Currently Classified as Having a Risky Concentration of Commercial Real Estate Loans.”
Can the PPT turn this bad boy green by closing time?
Doctors threaten Medicare backlash
February 25, 2010
NEW YORK (CNNMoney.com) — With a 21% cut to Medicare reimbursement rates set to take effect on Monday, the nation’s largest physician organization has informed its members about their options — which include shutting off practices to new Medicare patients.
“To our physicians, we are providing information on how to remove themselves from the Medicare program,” said James Rohack, president of the American Medical Association, whose more than 250,000 members include doctors, medical students and faculty members.
Federal law requires that physicians’ Medicare payment rates be adjusted annually based on a sustainable-growth rate that’s tied to the health of the economy.
Physicians face a rate cut every year, although Congress has at the last minute blocked those cuts from happening in seven of the last eight years and could still take action this year.
Temporary fixes aren’t good enough anymore, warned Rohack.
From my perspective, this is part of the necessary deleveraging that all wage earners will be experiencing but this group is powerful enough to slow down what will be increasing pressure. Don’t get me wrong. They do have to pay those suffocating education loans insurance premiums and let’s face it those costs need to revert back toward affordability too. The Hippocratic oath may in the mean time be revised to do no harm to those armed w/cash. (Shudders at the realization my age group lays in the potential fall out zone)
I wonder if that’s why gym membership appears up in the older age groups. Or maybe they’re just trying to appear young enough to deserve that job slot.
Forget education loans or even a minimum wage income, if you a reimbursed $60 for a Medicare visit how in the world are you going to pay rent (at an office that isn’t in a slum), receptionist/nurses that all want regular salaries with benefits, a back office or billing agency to actually get payment, transcriptionists that want to get paid by the sentence (necessary for electronic medical records), and of course, malpractice insurance? Docs make their expenses by charging several patients $120 for every $60 visit unless they practice substandard care by running patients in and out every few minutes.
I am a “public option” doctor as 70% of my patients are Medicaid, however, I am a critical care specialist (hospital based) so at least I don’t have to fund a staff. It is easy to say docs should work for free because of their ethics and morals, but everybody else from malpractice attorneys, office staff, equipment companies should expect full payment from the doc, not 21% less….
Davie Yards Files For Creditor Protection; To Cut 1,600 Jobs.
DOW JONES NEWSWIRES
Canadian shipbuilder Davie Yards Inc. (DAV.T) has filed for creditor protection in Quebec and plans to lay off nearly 1,600 employees, starting Monday.
The Quebec-based company said shipbuilding activities will continue during the restructuring with a reduced workforce of about 160 employees. Most of the layoffs will be temporary, it noted.
Davie Yards said accumulated losses due to currency fluctuations and project-cost increases related to payment delays by clients have hurt its operations.
Davie Yards went public in February 2008, raising almost C$42 million in its IPO of stock-warrants units at C$1.35 each.
Shares have been halted since early Thursday, last changing hands at 9 Canadian cents.
Davie Yards owns and operates the Davie yard in Quebec, Canada’s largest shipyard.
Lebanon: Salameh rules out any real estate bubble
Central bank chief attributes hikes in property prices to real demand, confidence in Lebanon
BEIRUT: Central bank Governor Riad Salameh said on Thursday that he does not expect a real-estate bubble to take place in Lebanon, and that the surge in property prices in the country is due to a real increase in demand.
Salameh said the central bank requires that borrowers and investors post the equivalent of 40 percent of the value of their approved property loans in a bid to prevent a real estate bubble; hence the loans given for any real-estate project do not exceed 60 percent of the amount of a project.
Prices of properties in Beirut and other parts of the country have risen sharply since 2007 as Lebanese expatriates in the oil-rich Gulf Arab states have poured billions of dollars into real-estate projects.
But it IS different there. You can ski and go to the beach on the same day. There isn’t anywhere else in the world that is possible, is there?
California.
And you can see how things turned out there…
Steve Keen from down under on the Keiser report. Worth the listen IMHO.
maxkeiser.com
I wish these sages would just write stuff out..can’t always listen or watch videos. If you know what I mean.
Yep I know, just that the last few minutes of Keen’s comments were spot on IMO.
Obama May Prohibit Home-Loan Foreclosures Without HAMP Review Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Dawn Kopecki
Feb. 25 (Bloomberg) — The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.
The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahuuwBS8KYq8&pos=2
I guess Barry and company have declared war on the folks that play by the rules. The government has NO business doing this, but of course that will not stop them.
I guess they want to increase the number of liars, cheaters and crooks in America. That is the natural consequence of creating incentives to punish the prudent and to reward the feckless.
The good news is that this will backfire and cause “unintended” consequences. The housing industry will soon become aware that this will have an adverse effect on their bidness.
Unbelievable!
I guess that’s one way to *solve* the mortgage crisis - make it prohibitive.
Whatever Bernanke may tell Congress should be taken with several large grains of salt, to be sure. Still….there this:
Rep. Brad Sherman, California Democrat, asked Mr. Bernanke directly whether the Fed would consider such a strategy [running price inflation at 4 - 6 percent], especially since IMF officials endorsed it.
“We’re not going to monetize the debt,” Mr. Bernanke declared flatly, stressing that Congress needs to start making plans to bring down the deficit to avoid such a dangerous dilemma for the Fed.
“It is very, very important for Congress and administration to come to some kind of program, some kind of plan that will credibly show how the United States government is going to bring itself back to a sustainable position.”
That’s what the man said! This appears to tell us that we cannot count on a blast of runaway price inflation.
“This appears to tell us that we cannot count on a blast of runaway price inflation.”
He didn’t quite say that, did he?
I am expecting a blast of runaway price inflation, followed quickly by Volckerization of rates to nip the blast in the bud before it becomes entrenched. If you have no idea what I mean, please refer to the 1978-1982 episode in monetary policy history.
“He didn’t quite say that, did he”?
No he didn’t, that was my take for now.
Though I can’t rule out the possibility that inflation will turn out “worse than the Fed expected,” I don’t see how deliberately creating hyperinflation could possibly be in their plan. Kill the dollar, kill the Fed.
Some more BS….
Obama May Prohibit Home-Loan Foreclosures Without HAMP Review
Feb. 25 (Bloomberg) — The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.
The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.
“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”
She confirmed the authenticity of the document, which hasn’t been made public.
How does this proposal square with contract law?
A few likely economic consequences:
1) Any remaining sources of funds for private mortgage lending would tend to dry up even more than they already have.
2) The FHA and similar government-coerced lenders would add to their already-lopsided market share.
3) Private lender qualification standards would get even more stringent than they already are, driving a wider chasm between those with stellar credit, who can qualify for private mortgage loans, and those with bad credit, who would be forced to either go to Subprime Sam for a home loan or rent.
4) Overall housing demand would drop due to the disappearance of the vestiges of private mortgage lending, resulting in further home price declines from the current level.
5) The performance of FHA and other government sponsored loans would worsen, thanks to the combination of selection for worse quality applicants for government-sponsored loans against the backdrop of further home price declines.
Other than the above, I foresee no problems — at least that I can think of off the top of my head.
The Obamanites’ foreclosure meddling will only make private mortgage lending drop off more quickly. Since it is already declining at the most rapid pace since 1942, why not kick the lending crash into super-duper overdrive? Pretty soon, Subprime Sam will be the only lender left.
* BUSINESS
* FEBRUARY 24, 2010
Lending Falls at Epic Pace
By MICHAEL R. CRITTENDEN And MARSHALL ECKBLAD
U.S. banks posted last year their sharpest decline in lending since 1942, suggesting that the industry’s continued slide is making it harder for the economy to recover.
While top-tier banks are recovering at a faster clip, the rest of the industry is still suffering, according to a quarterly report from the Federal Deposit Insurance Corp. Banks fighting for survival, especially those plagued by losses on commercial real estate, are less willing to extend loans, siphoning credit from businesses and consumers.
Besides registering their biggest full-year decline in total loans outstanding in 67 years, U.S. banks set a number of grim milestones. According to the FDIC, the number of U.S. banks at risk of failing hit a 16-year high at 702. More than 5% of all loans were at least three months past due, the highest level recorded in the 26 years the data have been collected. And the problems are expected to last through 2010.
FDIC Chairman Sheila Bair said banks are “bumping along the bottom of the credit cycle” and that the number of bank failures in 2010 will likely eclipse the 140 recorded last year.
The struggling U.S. banking industry remains a problem for policy makers eager for banks to lend again. Lawmakers on Capitol Hill and administration officials have pushed banks to lend, particularly in light of the billions in taxpayer aid injected into the financial industry over the past two years. Banking groups and their members counter that they’re under pressure from regulators to be more prudent and that demand from struggling consumers and businesses isn’t there.
…
This fellow had best wear a bullet proof vest…
Christie proposes cuts to N.J. unemployment benefits
25 February 2010 1 ~ NEWJERSEYNEWSROOM.COM
Citing the state government’s fiscal emergency, Gov. Chris Christie Thursday unveiled proposals to reduce benefits for future unemployed New Jerseyans and the amount of money employers must contribute to the jobless fund.
Christie said part of his action is to “stave off a devastating tax hike for New Jersey employers” that could increase an automatic payroll increase of as much as $683 per employee. The state Unemployment Insurance Trust Fund is presently insolvent.
The governor said the proposal would give small businesses some flexibility and provide critical relief during these tough economic times. The plan would, among other things, phase in manageable payroll increases designed to limit the impact on employers.
The plan also calls for reducing the maximum weekly unemployment benefit from $600 to $550. The governor noted New Jersey has the second highest benefit level in the nation; at $550, New Jersey would be the third highest.
It would require a one-week waiting period before benefits can be claimed, as is done in 40 other states. Christie said this would not shorten the benefits eligibility period and would result in $67 million in annual savings.
It would also require employees dismissed for “misconduct” to obtain other employment for a prescribed period of time before qualifying for unemployment benefits. This would save an estimated $189 million annually.
It would also require employees dismissed for “misconduct” to obtain other employment for a prescribed period of time before qualifying for unemployment benefits. This would save an estimated $189 million annually.
I wish that this had been in effect in AZ back when my bike shop boss fired one of my coworkers. Guy was one of those employees who was trouble wherever he went. And my boss quickly realized that.
Guy filed for unemployment, there was a phone hearing which I sat in on. Among other things, the guy said I was incompetent. Which was news to the boss and me, because this guy was such a lousy worker that I was practically running the store.
Anyway, he got his frackin’ unemployment.
Did you guys read this piece of crap, yet?
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahuuwBS8KYq8&pos=2
Obama May Prohibit Home-Loan Foreclosures Without HAMP Review
WHAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAT???
“If the president authorized it, it’s legal.”
– Richard Millhouse Nixon –
Yeah - wmbz posted this a few slots up.
Please re-post this tomorrow. It deserves full HBB treatment. Thanks.
Feb. 25, 2010, 8:17 p.m. EST
Bank lobbyists meet with Geithner to discuss bank reform
Groups, Treasury agree on Fed supervisory power, but disagree on other reform
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — For the first time in months, bank, buyout and securities lobbyists and Treasury Secretary Timothy Geithner met to discuss legislation to reform the financial sector in the wake of the crisis that shook the economy to the brink of disaster in 2008.
Geithner met with Financial Services Forum president Rob Nichols, U.S. Chamber of Commerce vice president Bruce Josten, Private Equity Council president Doug Lowenstein and other lobby groups that represent institutions that will be affected by the reform initiative.
Vandana Sharma, director at Standard & Poor’s Financial Institutions Ratings, talks about the impact of interest rates on U.S. banks. More capital, higher cost of funding and less risky behavior may reduce their future returns on equity.
At the meeting, Geithner pressed for quick bank reform to help foster sustainable economic growth. The meeting came as Senate Banking Committee chairman Sen. Christopher Dodd, D-Conn., seeks to craft legislation that can gain the filibuster-proof 60 votes needed to pass. Read about Senate discussions on bank reform.
Regulatory observers argued that the meeting was significant for Geithner because it was an opportunity for the Treasury Department to induce trade groups to come on board with aspects of the bank-reform legislation the agency supports.
Dwight Smith, partner at Alston & Bird LLP in Washington, contended that the meeting was meaningful for trade groups because they haven’t had an opportunity to get their message across to the Treasury Department for a while.
He added that it was also useful for the groups — which represent a wide variety of business interests — to show they had a somewhat unified front.
“There is an impasse on Capitol Hill, and Geithner thinks they need to talk some more to try to reach some sort of a consensus,” Smith said.
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* REAL ESTATE
* FEBRUARY 24, 2010, 10:46 A.M. ET
Backlash Hits Calpers Property Deals
By CRAIG KARMIN
Calpers took a hit last year when its investment in Manhattan’s Peter Cooper Village and Stuyvesant Town apartment complex collapsed. But Stuyvesant Town wasn’t the huge pension fund’s only foray into real-estate investments that involved ousting low-rent tenants.
The California Public Employees’ Retirement System has partnered with firms that have bought and converted rent-regulated buildings in East Palo Alto, Calif., and in other New York City neighborhoods, including Harlem and Manhattan’s Upper East Side.
Some deals have led to losses; at least one has paid off. But whatever the investment result, the conversion of low-rent properties to market-rent apartments—and ejection of some tenants in the process—is raising concerns within and beyond Calpers about its role in these deals.
(Sione Mahoni at his brother’s home in East Palo Alto, Calif., where he spends his days babysitting. He was recently evicted from his apartment.)
“These historical investments were made under previous investment leaders” and outside managers who handle Calpers real-estate investments, says Calpers spokesman Brad Pacheco. “Nevertheless, our current investment staff has this issue under study, and hopes to bring forward a policy discussion in the months ahead.”
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Easy money is just a gas until it explodes.
* HEARD ON THE STREET
* FEBRUARY 26, 2010
Good vs. Bad Speculation
By RICHARD BARLEY
Speculators, watch out! European politicians are out to get you. Some blaming sovereign-debt woes on credit default swaps, amid talk of banning default insurance unless buyers hold the bonds.
In a sense, they are right. Credit derivatives have a role in the crisis. But to complain now is missing the point. The really damaging speculation occurred from 2003 and 2007 when investors got carried away selling default protection too cheaply across the board.
By June 2007, CDS on Greece cost just 0.05 percentage point. Banks were seen as virtually riskless, with the Markit iTraxx Europe Senior Financials index at 0.07 percentage point. Greek 10-year bonds yielded only 0.22 percentage point more than German debt, despite a five-notch rating gap and Greece’s poor record of reining in debt.
Few complained then about speculators, even though prices were divorced from reality. Governments were happy to take the credit for a period of growth, stability and liquidity that let them dodge hard decisions and win elections.
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Keep them MSM soundbites about Gollum coming…
Fed’s Posture Improves in the Senate
The Federal Reserve is gaining support in the Senate and could emerge from the overhaul of financial-market rules as the primary regulator of the country’s largest financial firms, according to people involved in the negotiations.
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The bigger question: Why are market participants so lazy and dumb that they take the opinion of a few experts as the basis for their investment decisions? It is plainly crazy and also stoopid.
The Financial Times
Short View: The market’s Achilles heel
By John Authers, Investment editor
Published: February 25 2010 19:01 | Last updated: February 25 2010 19:01
Greece is the Achilles heel of world markets. Another ugly day of global trading can easily be traced back to renewed worries about Greece’s debt and its ability to service it.
Yields on Greek debt jolted upwards, as did the cost of insuring against Greek default, prices on the Athens stock exchange fell, and the prices of unrelated but risky assets in other markets followed suit. Plainly the Greek crisis, with its attendant risk of a crisis for the euro in future, is making waves far beyond Europe.
But it is unfair to put all the blame on Greece. A look at why sentiment hardened against its debt on Thursday reveals a deeper flaw – the regulatory incentive for investors to outsource their judgment on credit to a few rating agencies. Thursday’s spasm was driven by comments from a Moody’s Investors Service analyst, who suggested that if the country deviated from its austerity plan, its sovereign debt might have to be downgraded by two notches.
His views matter because regulations decree that they do. Moody’s rates Greek sovereign debt highly enough for the country’s banks to swap it for collateral at the European Central Bank. This is now a valuable source of funding. If Moody’s comes into line with other agencies, which give a lower rating, that source will vanish.
Thus a sharp renewed sell-off becomes a rational response to an opinion from one individual.
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