Bits Bucket For March 11, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Foreclosures: Housing defaults soar in Palm Beach County, Treasure Coast
By Jeff Ostrowski
Palm Beach Post Staff Writer
Posted: 12:19 a.m. Thursday, March 11, 2010
Foreclosure activity skyrocketed in Palm Beach County and the Treasure Coast in February, fanning fears that the housing market still faces strong headwinds.
About 4,490 homes in Palm Beach County received a foreclosure filing during the month, up 63 percent from January to February and 68 percent from a year ago, RealtyTrac, an information provider in Irvine, Calif., said today.
Martin County foreclosures were up 52 percent from the previous month and 13 percent from a year ago, while St. Lucie County defaults jumped 69 percent from January and 39 percent since February 2009.
For investors like Myles Minns, head of Continental Properties in West Palm Beach, the wave of defaults creates a “land of opportunity.” After snapping up five foreclosures a week, Minns said he’s taking a breather.
“We had to slow down, because we made offers not thinking people would accept them, and they accepted them,” Minns said.
He plans to fix most of the properties and resell or rent them.
Minns said he has noticed an increase in foreclosures in Palm Beach County, a trend he attributes in part to lenders growing more assertive about taking properties.
“Banks were holding off and holding off,” Minns said. “They really didn’t want to foreclose right off the bat because they wanted to wait and see what would happen with Obama.”
Mortgage banker Bill Davis, head of Private Funding Specialists in Palm Beach Gardens, said rising unemployment rates and falling home values have sent many borrowers into default.
“People were holding on, holding on, and now they’ve capitulated,” Davis said.
“Banks were holding off and holding off,” Minns said. “They really didn’t want to foreclose right off the bat because they wanted to wait and see what would happen with Obama.”
And therein lies the problem. Government intervention preventing the bottom from being found, so recovery can’t take place. Boo-yah!
It wasn’t just Obama. Even before that there was the idea that congress or somebody was going to ride in and buy out the lenders. There was no way that could happen, so I’m not sure if it was an easy excuse for the banks, or wishful thinking. There were major moratoriums by the GSEs, Citi, etc. All these accomplished was creating bigger losses, as the house will now sell for less.
“Even before that there was the idea that congress or somebody was going to ride in and buy out the lenders.”
The banksters seem to have established a foreclosure rescue cargo cult. The politicians did their part to encourage hope among the adherents.
First, discovery. Then, recovery. Discovery is being prevented, so no recovery. Indeed, it’s not just Obama. But he’s sort of become a symbol for government overall.
What are the banks are doing? Levels of shadow inventory building or decreasing? Are banks more likely to process and disposition a foreclosure faster today than say, 1 year ago? Why is this a black hole that nobody seems to be able to decipher?
Likely answer is that it is all over the map. Bank A’s strategy, backlog trends are completely opposite of Bank B. Regardless, where are the charts/graphs, stats that show the numbers: Number of non performing mortgates over 3 months behind, average time to final disposition and method of disposition (foreclosure, short sales, loan mod)
“Likely answer is that it is all over the map.”
Doesn’t that depend on the degree of top-down coordination (aka collusion)?
“Doesn’t that depend on the degree of top-down coordination (aka collusion)?”
Are we even sure there is collusion though? Are there really meetings going on between banks unifying a strategy? Old white guys in smoked filled rooms shaking hands and agreeing on a foreclosure disposition rate/approach? These banks are still competitors, cash rich thanks to Fed and taxpayer and on their own - with each bank finding its own way through.
Collusion implies some sort of intelligent plan between two or more banks.
What is wrong with the above statement?
I think the trickle of foreclosures is more related to the desire for banks to earn their way through this mess (taking losses along the way) rather than taking them all at once and causing themselves to fail.
If you don’t think big business and high finance collude all the time, you are hopelessly naive.
Sorry, I’ve seen the ineptness of some of these banks. I wouldn’t put collusion past them, but deer-in-headlights/fighting for their lives is how I would generally describe them, not cunning.
In any event, the banks know that selling all their REO immediately is a bad idea (for both market and balance sheet reasons)–they don’t need to collude with other banks to figure that out.
Are we even sure there is collusion though? Are there really meetings going on between banks unifying a strategy? Old white guys in smoked filled rooms shaking hands and agreeing on a foreclosure disposition rate/approach? These banks are still competitors, cash rich thanks to Fed and taxpayer and on their own - with each bank finding its own way through.
———————–
I strongly believe there is collusion between the banks and the govt. There are too many anecdotal stories out there to suggest that this is indeed going on.
Who knows if anyone will ever be able to provide “proof,” but even Barney Frank once mentioned the “program” where banks keep properties off the market.
It never ceases to amaze me how everyone in this Nation seems to dance around this fact.
Every high and low-end gambler, con man and scam for profit hustler in the world knows where the deep pockets are.
In the pants of the US Taxpayers.
Of course there is collusion! They work together to make sure that the money is taken from us; they only stab each other when figuring out how to divide up OUR money!
I am not for gubernment intervention but you have to admit there might not even be a market if the gubernment did not do something.The problem was so huge that it had the capacity to bring down the whole financial system.What pisses me off is the fact they gave money to the bankers and wall street pigs and not main street.
“The problem was so huge that it had the capacity to bring down the whole financial system.”
Sounds like getting the too-big-to-fail banks out of the mortgage lending business might be a good first step to avoid a future “problem … so huge that it (has) the capacity to bring down the whole financial system.” The recent episode showed that Megabank, Inc is abysmally terrible at underwriting mortgage loans. They should stick to businesses they better understand, like dot com, telecom and automotive manufacturing, and leave mortgage banking to local, competitive, non-TBTF lenders.
TBTF is the ultimate hedging strategy.
“TBTF is the ultimate hedging strategy.”
At least until someone high in government wises up and busts up the trusts. But I guess the bankster lobbyists on K Street are part of the hedge?
Congressional debate continues over efficacy of fox-in-the-chicken-coop financial protection. The focus on payday lenders seems misguided; if consumers demand high interest loans and lenders are willing to provide them, where is the problem? Moreover, attempts to regulate payday lenders out of business will just push the problem into the relatively shadowy realm of Kneecap Collateral Lending, Inc.
Lost in the din of irrelevant discussion:
1) The role of Wall Street’s subprime mortgage lending kingpins in bringing the world financial system to its knees;
2) Megabank, Inc’s wild success in extracting government bailouts to cover their bonus pool at the same time Main Street USA was, financially speaking, flushed down the toilet.
Politics
Overhaul Rules Stuck On Financial Protection Agency
[4 min 19 sec]
by John Ydstie
March 11, 2010
Senate Democrats and Republicans are trying to work out differences over how to overhaul financial regulations following the financial crisis. One of the big sticking points is the proposed Consumer Financial Protection Agency. Democrats, including President Obama, want a separate and independent agency. Republicans want it to be part of an existing agency but Democrats say that’s been tried and didn’t work.
Desoto, Montgomery Wards, Packard, Studebaker, Pan Am, Eastern Airlines, Bethlehem Steel…all TBTF. s/
“…all TBTF”
My knowledge of the history of TBTF bailouts is rather weak, but I take the impression it is a recent (post 1980s?) invention. Please cite evidence you can offer to the contrary, as I interpret the advent of this policy as a fundamental causal factor in the US’s recent economic demise.
Dear Professor Bear:
re: “I take the impression it is a recent (post 1980s?) invention. Please cite evidence you can offer to the contrary,.”
I can’t because there is none. The entire TBTF is psycho-manipulation. There have been over 1200 auto manufacturers in the USA since 1900 and any number of mining, oil, airplane, train and rail companies that are out of biz.
Most Americans had never heard of AIG before their grandchildren were indebted to keep them solvent.
We still don’t know who they are.
As I occupy this small bit of earth’s history, I now realize it compares with the fall of Rome, Persia under the islamic sword, the fall of The Byzantine Empire and the Nazi and mongol conquests.
America [USA] has been on the edge of the abyss many times in its 230+years but I’m stoically resigning myself to the inevitable…and it ain’t gonna be pretty.
Note: the s/ means: sarcasm OFF!
What pisses me off is the fact they gave money to the bankers and wall street pigs and not main street.
BINGO
and now that money is doing nothing.
Congress can’t even bring to a vote a bill that would tax bankers (windfall profit tax). Given that almost all of their profits are the direct result of the US tax payer they should take home $1. That post yesterday by PB with the videos showed exactly how bankers have made risk free profit. Borrow massively from FED and loan to US gov by purchasing treasuries.
“…and now that money is doing nothing.”
Just like a coiled viper waiting for a hapless victim to wander within striking range is ‘doing nothing.’
I look at the ‘do nothing’ money as ‘rainy day under-the-matress’ funds. When the real fire sale begins, the banksters will be flush with cash to snap up devalued assets at a point when when Main Street is flat broke. Think of the whole Fall 2008 bailout as a wealth transfer scheme and it suddenly all makes sense.
“BINGO
and now that money is doing nothing.”
Money will bring Dow to new highs.
“I look at the ‘do nothing’ money as ‘rainy day under-the-matress’ funds. When the real fire sale begins, the banksters will be flush with cash to snap up devalued assets at a point when when Main Street is flat broke. Think of the whole Fall 2008 bailout as a wealth transfer scheme and it suddenly all makes sense.”
Exactly.
I believe that a large number of the houses in the shadow inventory will never really be on the market. It’ll all be transfered from one shadow entity to another - using our tax money to buy up the houses - to create what amounts to suburban slums used to house the debtor-class (everyone but the banksters.)
I guess I’ve come to terms with the fact that if the gov gave armageddon preventing stimulus money to the public, we’d definitely be in an inflationary period that would only accelerate the downward spiral of the middle class. Where they screwed up is they gave the money to the banks w/o any strings or guidelines attached. It also feels like a missed opportunity to turn the ship around and get it sailing in the right direction. I really was naive enough (before he chose his cabinet) to think Obama and the Dems might get to rebuilding infrastructure and preparing a workforce for future global competition. But like a drunk, I guess we have to find our rock bottom before we get down to the hard work.
Totally agree with you, CarrieAnn.
who is main street? Who is it you wanted them to give the $ to? Surely not the idiot homeowners. It seems the more we talk about the responsibility of the banks and the government, the less we hear about irresponsible homebuyers.
Exactly. How about we quit talking about the government handing money to any particular group for the time being? Was Washington supposed to shower every homedebtor, small business, and laid-off worker with cash?
I also find it very interesting how the “story line” of this recession has slowly shifted in tone; first, much of the blame was laid on greedy Main Street homedebtors, while now the finger is pointing solely at Wall Street. There was greed, avarice, cluelessness, and gluttony in both places, and if you ask me it was even more heavily concentrated on Main Street than Wall Street.
“There was greed, avarice, cluelessness, and gluttony in both places, and if you ask me it was even more heavily concentrated on Main Street than Wall Street”
…and still is, IMHO.
In their mind, maybe they think they have helped out main street. After all, there’s a tax credit for new home buyers and there is help if you end up in foreclosure.
What other help is needed that won’t inflate values again?
Sorry. I don’t buy it. The banks would not have proceeded to foreclosure and sale of these assets immediately if not for the administration. The would have waited for at least a while hoping the start of the crash was just a “blip.” Then they wouldn’t have been able to proceed all that quickly because they just didn’t have enough employees in those departments (and still don’t). At some point they wouldn’t have been doing it because they know that recognizing the losses would put them in violation of reserve requirements (for the loans they actually own), For the ones they are servicing but don’t own, getting to the sale ends the stream of payments they get for servicing the loan for the bond holders.
Uncertainty about whether the administration was going to do something, would be a tiny contributing factor. And the banks are in the best position to know that anything the administration does is not going to have any effect anyway. Don’t they KNOW that they aren’t going to participate in a program that gives them $1000 to forgive $100K of secured debt when doing it mean the FDIC will come to visit the following Friday?
Nope, I don’t buy uncertainty as a large contributing factor. As a PR friendly excuse, sure. Uncertainty about various taxes and expenses related to hiring people rings a little more true, after all, hiring is expensive and risky already. But for the loans? Not a chance.
“Nope, I don’t buy uncertainty as a large contributing factor.”
Economists have written at length about the potential effect of policy uncertainty to reduce the value of investment decisions.
Check out this book if you are interested:
Investment under Uncertainty
Avinash K. Dixit
Robert S. Pindyck
However, uncertainty does play a big role in decisions to buy. People don’t buy stuff so much when they’re uncertain. Especially houses.
Joe “where is my $8000 tax credit” isn’t showing a lot of capacity to evaluate uncertainty in the direction of the housing market. We are still dealing with a mania mental attitude. I just don’t think there is a lot of evaluation of uncertainty going on in most of the general populace - unless you count the uncertainty of whether the tax credit will be renewed when it runs out.
And I don’t see why the banks should be motivated to hold off on forclosures by uncertainty when they have plenty of certain things to face - not enough people to do the work, loss of servicing income if they do it, insufficient reserves if they recognize their losses. Those are real, immediate problems. Uncertainty about possible future programs related to mortgages is barely on the radar.
Exactimente, amigo! And firms (e.g. banks holding on to their REO, waiting for cargo drops of bailout money to drop from helicopters) don’t sell stuff so much, either.
“I just don’t think there is a lot of evaluation of uncertainty going on in most of the general populace - unless you count the uncertainty of whether the tax credit will be renewed when it runs out.”
The relevant side of the equation would appear to be the banks which are collectively sitting on a pile of foreclosures that are accumulating nationally at a rate of over 300,000 per month. I don’t believe these are selling nearly as quickly as they are piling up, but please correct me if you have better information. My impression is that many banks believe that ‘investing’ in delay will somehow pay off for them over the long run. Time will tell.
Good point, Bear.
The other thing that seems to not be getting into the banker brains is what happens to that pile of foreclosures. We can all point to examples of “just sitting there” houses that are slowing turning to ruin. Sometimes, with the help of vandals, they’re getting there faster.
In short, houses need to be lived in. If they’re not being lived in, the second law of thermodynamics takes over.
The government has done every hare-brained thing they’ve been asked to do by the NAR and MegaBank. No matter how big the bailout, how many trillions of dollars, the politicians have acquiesced.
What’s the next thing the politicians will be asked to do to improve the situation of NAR and MegaBank? It seems utterly incredible and hare-brained, but “right-sizing” the housing stock seems like an option. Providing incentives to destroy homes that have not been kept up.
It seems utterly ridiculous, but trillions in bailouts to the bad actors seemed utterly ridiculous back in summer 08.
“The other thing that seems to not be getting into the banker brains is what happens to that pile of foreclosures. We can all point to examples of “just sitting there” houses that are slowing turning to ruin. Sometimes, with the help of vandals, they’re getting there faster.
In short, houses need to be lived in. If they’re not being lived in, the second law of thermodynamics takes over.”
This may be intentional: if the houses all fall apart, then we’ll be short on houses, which will drive up prices. MegaBank will (naturally) never have to recognize the losses on the crumbling homes!
The biggest factor is simple - waiting for the Fed MBS purchase program to come along. It’s a lot easier to meet reserve requirements when you’re getting tons of money for assets that are worth far less than what you’re selling them for.
IMO there was no uncertainty w/regards to how the market was going to go - they knew by late 2005 it was going to crash, and crash hard. Inventory was skyrocketing, and prices were flattening. By early 2006 foreclosures were already on a strong upward curve.
Anthony Mozillo’s stock sales and Hank Paulsons going LONG Treasuries, and the bankruptcy reform bills would all agree with that conclusion.
“Hank Paulsons going LONG Treasuries”
There was never a better time to be long Treasuries than when the Fed Chairman, the Treasury Secretary and the President were all making “Panic Now!” public service announcements on national teevee in Fall 2008.
I recall Fed was supposed to by around 1 trillion of MBS from banks. When fed does that who owns those houses and who dispositions/sells those houses?
Comment by packman
2010-03-11 07:49:22
The biggest factor is simple - waiting for the Fed MBS purchase program to come along. It’s a lot easier to meet reserve requirements when you’re getting tons of money for assets that are worth far less than what you’re selling them for.
IMO there was no uncertainty w/regards to how the market was going to go - they knew by late 2005 it was going to crash, and crash hard. Inventory was skyrocketing, and prices were flattening. By early 2006 foreclosures were already on a strong upward curve.
You nailed it, packman!
You know, I don’t understand the banking business well enough.
I do remember speculating that banks would sit on forclosures because they can’t realize all those losses at once.
It has become very strange out there. Many people are living in places awaiting the forclosure axe for longer than a year.
America is saved…they’re bringing in Suzanne and her RE Pro’s.
Under the new Streamlined Short Sale Program proposal, Real Eastate agents rather than licensed appraisers, will determine the value of houses for the banksters.
This should be a hoot.
(sorry — my coffee went down the wrong tube)
You forgot Casey and Nina. Remember, ‘Save the Squirrels’.
Foreclosure rates up by smallest amount in 4 years:
Scripted fake recovery. Everyone stay in character.
http://finance.yahoo.com/news/Foreclosure-rates-up-by-apf-1830270269.html?x=0&sec=topStories&pos=2&asset=4c543b23423c255d7d71d3f23168083a&ccode=mp
Was there any discussion of the mountain of foreclosures that have already occurred but have yet to hit the used home resale market? I believe foreclosures have been occurring upwards of 300,000 per month for many months running (at least 12 to my recollection).
Bear,
There isn’t the NOTS level of default so… like I said… lingering in the shadows.
It’s still an increase, not a decrease.
Foreclosure rates up by smallest amount in 4 years:
Due to unexpected winter weather in winter time!
LOL.
When all homes have been foreclosed on, we’ll then have zero new foreclosures.
Won’t things just be peachy then?
Month on month, the numbers are down, year-on-year, the numbers are up nationally, except down year-on-year in Nevada, Arizona and CA. Florida is still a disaster.
Just like jobs, the trend is now in the right direction. It will take time to work through the shadow inventory, but given population growth, those homes will be absorbed, albeit at lower prices than before.
I’m not being a crazy optimist, just recognizing that business cycles have lifespans, this one too, shall pass.
At this point, houses are more affordable than they have been in a long, long time, it’s not unreasonable to believe that the worst is behind us with respect to home values. (although I believe the higher end has not corrected yet to the extent that it needs to, I think the low end has already bottomed).
Bwahahahahhahahhah!
It’s easy to keep the foreclosure numbers down when lenders refuse to issue NODs. There are too many stories out there about people who haven’t paid for months (or years!) without getting a NOD. I think this is how they are trying to hide the real numbers.
We are currently building <500,000 new housing units per year.
Population is growing by ~3,000,000 per year.
At current home prices, in most markets it is not economically viable to get raw land for free, put in the infrastructure, and build a new home for any kind of profit (i.e. the <500k number will not rise significantly until prices rise).
Are you telling me home prices are NOT going to go up significantly from where they are today within the next 2-3 years?
Bwahahahahahahah!
And housing prices are going to rise in a world of endless job losses and no salary growth?
Didn’t we already try that during the Housing Bubble?
The difference is that the housing bubble increased home prices far beyond affordable levels. We are no longer there. Homes are the most affordable on record in California (for instance) for people who have jobs.
Job losses are not endless. Job growth is a LAGGING indicator. We are just about at the inflection point where jobs will be created again.
Are you saying “it’s different now?”, and that no new homes will be built to accommodate a rapidly increasing population? I’ll take the contrary bet on that one.
All taxpayers, except the lowerincomers who pay no taxes will be on the “hook” for all of this debt. Wall St. and all Government DC payers know this fact! The high rich incomers will be ok but the middle class will be soon gone. Sad days ahead but escapable realty is the “True Teacher of last Results”
It’s also the middle class that mostly tried to live like they were rock stars - big houses, fancy cars, vacations, jewelry, toys, etc. Most people in trouble now did it to themselves one way or another. They forget basic everyday rules of living - how much house you can afford, rainy day funds, getting out of debt ASAP. And I don’t buy for one minute that the majority of them didn’t learn it and it’s all the schools’ fault either. If it were just poor ill educated folks that the big bad banks took advantage of, I might have some sympathy, but I was a notary and I did lots of refi paperwork for people and they all knew what they were doing and they all thought they were so smart and they all thought they were making a killing and these were very well brought up, educated folks.
The ultimate icon of overspending:
Cadillac Escalade with 22″ pimp rims. Followed closely by the pseudo Hummer with 22″ pimp rims.
“If it were just poor ill educated folks that the big bad banks took advantage of, I might have some sympathy, but I was a notary and I did lots of refi paperwork for people and they all knew what they were doing and they all thought they were so smart and they all thought they were making a killing and these were very well brought up, educated folks.”
Were these greater fools Boomers or Gen X’s and Y’s?
Suzanne! Suzanne!
Suzanne?
Roidy
Someone in the goobermint must have been going to those real estate seminars. They’re applying the Carlton Sheets method of getting rid of unwanted tenants, to underwater mortgage holders. Bwahahahaha!
http://www.nytimes.com/2010/03/08/business/08short.html
“And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.””
How does this help save the economy from a financial meltdown? It is so far removed from any legitimate government purpose it is disgusting that it was even proposed. I would prefer my tax dollars not be used as free handouts for people that buy crap they can’t afford. I have a feeling there will not even be a restriction on those that pulled out equity. More lowering of the US as the standard of living drops as we shift cash from productive activities to rewarding bad behavior.
Do you still get the $1,500 if you trash the house? No? Then maybe that’s what the $1,500 offer is really about.
Exactly. This is the Carlton Sheets playbook. (Please, don’t ask me now I know, it’s just too embarrassing)
Ah, but Carlton Sheets fell a bit short; His playbook doesn’t tell how to stick the taxpayers with the bill.
Exactly. This is the Carlton Sheets playbook. (Please, don’t ask me now I know, it’s just too embarrassing)
Aha!
Sounds like there’s a good story in there somewhere.
True dat. But he was just a private entrepreneur on the make. The goobermint improved on his model. Who says the goobermint can’t innovate? Pshaw..
“Do you still get the $1,500 if you trash the house? No? Then maybe that’s what the $1,500 offer is really about.”
I thought there were already built in incentives not to trash the house in a short sale situation because the FB wants to avoid foreclosure while at the same time having the lender forgive a portion of the debt. Isn’t it in your best interest to be nice to a lender if you want them to approve your short sale and keep a foreclosure off your record?
$1500 is for people who can’t afford to move to a rental without it, I guess. Though if the residents haven’t been paying the mortgage for a long while, I’d think having enough to move shouldn’t be a problem.
Gerald Celente: When people have nothing left to lose, they lose it.
I guess the banks have identified the growing existence of “nothing left to lose”.
“Though if the residents haven’t been paying the mortgage for a long while, I’d think having enough to move shouldn’t be a problem.”
Well, that may be how YOU and I think, but I’m sure a lot of other people see the mortgage holiday as their opportunity to get tattoos and flat screens!
Hopefully that $1,500 would be contingent upon departing FBs not trashing the house.
Take a good look at Greece, citizens of California, Illinois, New Jersey, etc. It could be a window on your future.
Actually, I kind of doubt that we will end up with that level of protests in the US. But it is going to be interesting to see what we will get.
And the articles that were posted late last night about the reaction in Germany were interesting too. Europe might want to be careful. If the “kick the bums out” [of the EMU] attitude is at all pervasive, the whole experiment could go kabluey (sp?).
Yes, I just posted Charles Hugh Smith’s article on why Cali is doomed and opined that it does sort of look like Greece. As to the protests, in a sense, they’re starting, with a few student demonstrations. But, maybe Meg Whitman will get elected and everyone can sell stuff on ebay.
I see possibilities with a Whitman governorship. Perhaps the banksters sitting on a mountain of California foreclosures could figure out how to sell them on eBay?
The protests will get ugly. People will set stuff on fire. It’s happened before in Cali, it will happen again.
I seem to recall such things happening in 1965. In Watts. And, if what I’ve heard is correct, that section of the Los Angeles still hasn’t recovered.
Same for other cities after the 68 riots.
Was in grade school in the inner city at the time and that was one of the most memorable events of my childhood.
Not to mention the Rodney King riot (1992), which was only marginally about Rodney King.
And after the initial OJ Simpson trial.
“But, maybe Meg Whitman will get elected and everyone can sell stuff on bay.”
LMAO. Good one Palmy.
Thanks, SV. Meg’s wet dream Corporatopian business model is to have people pay the company to work for it. Essentially, that’s what ebay’s business model evolved into. Brilliant, but evil.
Sounds better than the Cali model now, which is essentially that the company has to produce free stuff for everyone and pay their workers high salaries.
Years ago, when eBay first hit the ‘Net, you could pay above retail prices for used stuff. Well, those old days are good and gone. Nowadays, eBay is like the ultimate yard sale.
Agree, eBay has certainly created “price transparency” on the value of collectibles and similar.
It’s really handy for replacement parts and sturdy older stuff. I’d often rather buy a used - and possibly American made - item that has stood the test of time, instead of a new import that will quickly self-destruct.
In my opinion, the Euro is built on an unstable political foundation. Unstable foundations usually don’t handle stress very well.
Does anyone reading this blog truly believe that the Euro will be around in 5 years? In 10 years?
I’d be surprised if it was still around in two years, but that’s just me.
Hey, how about that Iceland, eh? Good on ‘em. Too bad we didn’t get a chance to vote on TARP like the good citizens of Iceland were able to vote on their version of it.
I think the Icelanders have the oldest legislature in Europe and one of the highest (non-compulsory) voting rates in the world. They have a stong sense of national pride.
Our government is much more comfortable ignoring its people because Americans are so passive about the process in general. We don’t take as much pride in it as they do, it seems.
We also have no constitutional procedure for nation wide referenda.
We have state legislatures OR can convene state conventions that are allowed to amend the US Constitution through a 2/3 majority. It isn’t just through Congress and the President, though it has never been done before. Maybe we should start exploring that option.
Could it be they have campaign laws that make politicians listen to the people?
yeah, but the jack booted thugs (feds) will just step on your head if they disagree with the states. 10th amendment be damned. Witness medical marijuana.
Could it be they have campaign laws that make politicians listen to the people?
Answer you own question. Polly and NSO have cited verifiable differences between the systems. Do you have anything to back up your pet theories?
“…the Euro is built on an unstable political foundation”
The Tower of Babel:
According to the biblical account, a united humanity of the generations following the Great Flood, speaking a single language and migrating from the east, participated in the building.
The Book of Genesis then relates how Yahweh, displeased with the builders’ intent, came down and confused their languages and scattered the people throughout the earth.
Perhaps one could say that the “global economy” represents the ultimate Tower of Babel then?
Just sayin’.
I thought this was refering to the huge super-skyscraper standing as a meaningless monument in the desert of the UAE? Hehehe…
We used to talk about this a lot on my money and metals blog. It never made sense that the Germans would put up with the monetary looseness that the Spanish, etc, would tolerate. IF the Euro fails, it’s because it was doomed from the start.
Anyway, the Euro was just one part of the plan by the technocrats to create a one world currency. A euro unification, north American and Asian; then all would be combined. Jeebus, the Trilateralists have been preaching this stuff since the 80’s. All anyone has to do is go back and read their magazine. And like the Euro, it never made sense that the US or Canada would tolerate the Mexican appetite for money creation, much less the banana republics south of there.
There’s a bill making its way through the House right now, HR4759, proposed by Gene Taylor, D-MS, to have the US withdraw from NAFTA. I’m glad someone is finally paying attention. It has a number of co-sponsors, too. Nice piece of legislation.
“…to have the US withdraw from NAFTA.”
Isn’t erecting trade barriers a separate issue from creating currency unions?
Perhaps I am missing the bigger issue, which is the question of with whom you, as party to a household, city, state, or nation, are willing to coalesce. Marriages, incorporations, currency unions and trade agreements all involve forming coalitions between groups of individuals based on the presumption that the benefits of cooperation will outweigh the moral hazard incentives for free riders to perpetually bleed the heavy lifters in the system. The TBTF problem and the Greek problem both exemplify the destabilizing impact of free riders on any coalition of governments or industry.
PB, to me, trade and currency have a definite linkage. Withdrawing from NAFTA doesn’t mean that we’re erecting a trade barrier, it just means eliminating a bad piece of legislation meant to cement the NAU and other stupid global “unifications”.
Amero idea, RIP!
I’m not sure the Amero is a bad idea. Might be a way to trick the US into having a hard currency.
Not to mention might get away from bailouts past. I believe we bailed out BOA on bad loans to mexico back in the 70s, 80s, 90s.
The populist tide against free trade is rising.
You know, I’m not sure what to think in this. Sounds like a repeat of the great depression.
Posted this many times; harder to undo things than to do them. So, we suddenly errect trade barriers. One of our few economic bright spots, rising exports, takes a dive.
While eventually this might improve the economy; the immediate impact will be to throw a lot of people that work in commerce related fields out of work.
This will be another economic shock.
Now, I understand that NAFTA is a bad peice of legislation. However, we made some agreements and it is probably better to negotiate than to make a sharp withdrawl. The long term impacts of showing inability to honor commitments would also be a major consideration. Much like how Carter messed up the United States by abbandoning allies.
I’m not sure the Amero is a bad idea. Might be a way to trick the US into having a hard currency.
Why would the Amero be any “harder” than the dollar?
Hello Carl,
If you get hard debt limits in place and can’t print or bailout with abbandon then you get caught in the situation with the Euro.
So, you have a country like Germany that starts to throw down the glove about this. Greece may get bailed out or they might not.
I’m guessing that bailing out GM and the GSEs is an order of magnitude larger bailout that Greece for the EU.
The “Amero” would just be a way to destroy the savers by basically giving us pesos for our dollars.
Oh, and then we’d all be accountable to some group of unelected government drones in some messy, “unified” government that basically consists of the poor nations leeching off the wealthy while the wealthy try to make us all poor.
Not a good idea.
Without NAFTA the USA loses it’s right to a fair share of Canadian oil and gas supplies. This means if the Strait of Hormous sp? is closed then Canada would be forced to reduce US oil supplies by one million barrels a day as we get one million a day from the Mideast to make up for the two million a day we sell to you.
Krugman has blogged on this repeatedly. You really can’t have a successful monetary union unless you also have a fiscal union and fluid labor market… something we have in the US but not in Europe.
‘a fiscal union and fluid labor market’
Well, they tried to get that in the euro unification but couldn’t get the votes, so they settled with what they have now. I guess they figured they could incrementally push that off on the various countries along the way. These guys are the ultimate Fabians; they think this is inevitable, and all they have to do is keep pushing.
“…they think this is inevitable, and all they have to do is keep pushing.”
Do they plan to teach every European to speak German along the way?
Maybe they want to teach the Germans to be Muslim? Immigration is important to consider.
I heard they’re bringing back Esperanto.
Deutschland, Deutschland, ubergegeben!
“…teach the Germans to be Muslim?”
Judging from the seventh grade course in European history in which I am peripherally enrolled, the Muslims missed their chance to conquer Europe back around the time of Charlemagne.
It’s hard to “bring back” Esperanto - a stillborn dead language.
IIRC more people can speak Klingon than Esperanto.
IIRC more people can speak Klingon than Esperanto.
Qapla’!
Today’s Score:
Ben Jones = +1
“Financial Innovation” = (-17)
Anyway, the Euro was just one part of the plan by the technocrats to create a one world currency. A euro unification, north American and Asian; then all would be combined. Jeebus, the Trilateralists have been preaching this stuff since the 80’s.
I know of what you speak. (I’d love to have a chat with you sometime about it)
Don’t think that this is the end though. This is a preview of how bad it would be if it comes to be, however this will more likely be glossed over as a “failure of capitalism”, with a move more towards tighter global control rather than a move back towards autonomy. It’s a two-steps-forward-one-step-back process, and we’re now in the one-step-back phase. The foundations are being laid for the next two steps forward though.
‘two-steps-forward-one-step-back’
That’s what a “crisis” is for! I can’t say if they will or won’t succeed. It all boils down to the future of what they see as the impediment to true progress; the nation-state.
When I did my MBA a few years ago all the profs insisted that the concept of a “nation-state” was destined to the dust bin of history and that corporations would replace them. More than a few fellow students enthusiastically agreed.
I can already see the signs: “Welcome to Bentonville, a wholly owned subsidiary of WalMart.”
‘destined to the dust bin of history’
One funny thing about these globalists; everything they happen to believe is also “inevitable.”
Don’t think that this is the end though. This is a preview of how bad it would be if it comes to be, however this will more likely be glossed over as a “failure of capitalism”, with a move more towards tighter global control rather than a move back towards autonomy
Yep and that’s exactly what you are seeing in Greece, the notion of you need tighter oversite by the powers behind the Euro.
Of course if the riots overthrow or collapse the gov then all bets are off.
“it never made sense that the US or Canada would tolerate the Mexican appetite for money creation,”
It never made sense that the US would tolerate the Mexican appetite for population creation, either. At least, not in the US.
Gotta have that cheap labor.
And I can’t understand why, In Colorado, when mechanization is so readily available. It’s how, during the Civil War, the North harvested crops.
True, but most illegals are now working in the city, doing unskilled and semiskilled labor.
… Trilateralists have been preaching this stuff since the 80’s. All anyone has to do is go back and read their magazine.
Yikes! No thanks.
I wonder, would one world currency be such a bad thing? If governments couldn’t play with their money supply, they’d have no choice but to actually spend only what they collect in taxes, or at least only borrow what it can pay back. Greece is in a situation that it has to address it’s debts and must reach a resolution soon, while the US can go on doing stupid things with the help of the printing press.
Then we could just sit back and wait for the ascent of Nicholae Carpathia.
(Reference to the Left Behind series)
Think about a Global FED.
That may answer your question.
“Think about a Global FED.”
A global Fed would have many governments to answer to, instead of one. Might behave better.
A global Fed would have many governments to answer to, instead of one.
Answer to? I’m thinking the control might work the other direction, where many small governments would be easier to control.
Answer to? I’m thinking the control might work the other direction, where many small governments would be easier to control.
Ed Zachary. The Fed doesn’t “answer to” the government; especially a world-wide Fed wouldn’t answer to any measly single country’s government.
+1
The banks control the governments, not the other way around.
I never could figure out why a country like Germany, would want to throw it’s hat in the ring with a country like, say, Portugal.
Same reason why a rich banker would want to loan money to subprime borrowers. When done correctly it’s a method of gaining more power, and extracting yet more wealth, from the middle and lower classes. That goes within countries and across countries.
Bingo
Again look at what’s happening in Greece.
Listen to the rioters comments of. They understand that this is all about wealth extraction from and control of Greece. They see their salaries fall while bankers get bailed out. They see their gov controlled by Euro establishment.
but at what risk?
Certainly the Brits look wise now by keeping the Pound and not adopting the Euro.
I’ve still got some original DM notes - I wonder whether they will have more than collector’s value in a few years.
you can exchange them at any German business bank
The Brits are very proud of their Pounds, lemme tell you.
I experienced this firsthand when I visited family over there. Got quite an edu-macation about what the Pound means to them. It’s held in much higher regard than the dollar.
Demonstrations in California, if they occurred, would be uglier than in Greece. Most workers in Greece work for the government. In California it would be government workers versus poor government aid recipients versus the majority private, taxpaying workers.
But we’re a long way from there. People are still more worried about buying a Coach bag than demonstrating. Denial runs deep.
Agreed, unrest here would be criminal in nature, not political. Sadly, innocent people would get caught up in it, they always get caught up in it. It’s always easier to attack the weak than to attack the strong.
I was considering the idea of what sparks people to gather and protest while watching Tom Brokaw’s “Boomer” special on CNBC. Of course, they covered the 70s protesters, the hippies. But then Tom interviewed a gentleman that said he was too busy studying for his engineering degree and that he never was a part of that. And I remembered reading an article where the author claimed most of these protesters were “spoiled rich kids”. I was too young to have a comment on who the protesters actually were but it might be safe to say they were young, bright students who did have the safety of a cushy Mom & Dad’s home to return to if they failed. It was relatively safe to take the risk.
Are we facing something far more frightening than a draft card? Are we biding our time to gather more information on just what we’re facing to see how far we want to stick our necks out? If one took a public stand, would there be future repercussions w/future employers? Maybe the middle class just has to get backed further into our corners before we bite back.
A lot of the dissent began when they started canceling student deferments for the draft and upper class boys could no longer hide out in college.
Of course some joined the national guard…
The college protesters had financial fall back.
The equal rights protesters did not.
And most of the protests were over by the 70s. I ought to know, I was living in Alabama (Selma or Mobile ring any bells?) and it was pretty much over by 1972.
By 1973, we were out of Vietnam and that was end of the war protests as well.
The houseowning masses are too docile to rise up here. Besides, Panasonic and Samsung have ridden to the rescue with three dee tee vee just in time!
Seriously though, U.S. culture idolizes mindless criminal violence, cohesive politically motivated unrest is a no no. Put another way, serial killer, street thug = flawed hero - whistleblower, protester = terrorist.
Put another way, serial killer, street thug = flawed hero - whistleblower, protester = terrorist.
I can’t agree with that — there are plenty of examples to the contrary from the last 40 years, whether it’s the Kent State protesters or whistleblowers like Dr. Jeffrey Wigand (of tobacco fame). The first line of defense is usually to marginalize or ignore whistleblowers/protesters, lest they capture the popular imagination. When whistleblowers and protesters are cast as villains, a corporation with an agenda is most likely behind the smear campaign (whether it’s Monsanto or News Corp).
But I do agree that “cohesive politically motivated unrest” on the scale that Europeans can muster seems to make most Americans uneasy. Perhaps because it threatens to shake them from complacency.
“Were.” It exists no more.
The last comprehensive protests were the Rodeny King protests in 8 major cities at the same time. Only LA turned in to a riot and thus stole the show.
Didn’t see that on MSM did ya?
It’s easy to prevent “cohesive politically motivated unrest” if you convince the masses that the other half of the population is the enemy (Republicans vs. Democrats). Keep the rats fighting amonst themselves, and the true culprits can go about their business undisturbed.
kablooey
-d
See, I tried that spelling and it didn’t look right when I typed it. Looks much better in your post than it did in mine. We’ll go with your spelling.
I thought your spelling of kabluey was more colorful.
“Take a good look at Greece, citizens of California, Illinois, New Jersey, etc. It could be a window on your future.”
There was a good piece on NPR Marketplace last night (sorry, can’t find the link) arguing why the U.S. is different. Primary reasons include a common language, labor market mobility and independent dollar-based state budget processes which are supposed to avoid problems like the Greek debt buildup. My brain screamed at the radio, ‘What happened to California, then?’
“Take a good look at Greece, citizens of California, Illinois, New Jersey, etc. It could be a window on your future.”
The difference is, if any of those US states fail, it’s not about rescuing (or, uh, not rescuing) the little guy — we’re talking about some of the largest states, economically and politically, in the Union.
“we’re talking about some of the largest states, economically and politically, in the Union.”
And we’re talking about some of the largest unions, economically and politically, in the State.
(sorry, can’t find the link)
Linky
My brain screamed at the radio
Next time that happens, you should consider going back on your meds.
I’ve started hoarding food and water again. Do I need help?
Naw. Just don’t let it get to level 5. We wouldn’t want to see you on A&E one of these Mondays. And rotate the food.
Seriously, though. I am very glad to be in a more secure building than I was before my move. Even if we don’t end up with massive strikes and protests, being in a ground floor apartment with not even a dead bolt on the outide doors was not the most secure spot. Lots of cops (and much more tempting targets) in my new neighborhood.
“I’ve started hoarding food and water again. Do I need help?”
I made a reference to wanting specific set ups in my house/lot hunting so we could survive off grid if necessary. A relative looked at me like I had two heads, which is pretty funny considering he’s the one I’m thinking is going to end up living with us if things go south. No way he’d make it income wise on his own. He’s too hand to mouth.
I’ve run into someone that has shared w/me her husband wants to move further out from the city of Syracuse fearing mob break-ins after a severe market disruption. I didn’t ask if they were hbbers.
I have 2 other friends that are NOT hbbers and they’ve been setting up their barter networks over the last year or so. These people are CFO/board member types….not undereducated rubes that believe in UFO’s. I’ve been on boards (ZH) where posters have referenced their Armageddon property upstate. I swear those are the types who were buying up farmland in my previous location. There was a definite spike in brand spanking new farmettes just before and after the October market crash. You can always tell them from the real farmers. The house is 5x the size of the barn instead of the other way around.
My farm friends used to laugh when the city slickers moved into their big old houses, stripped nekked barns and 10 green acres.
The 1st question was usually, who do I have to call to have that mercury vapor light thingy moved away from the barn or installed closer to the house like it was a child’s night light.
Damned fool city people were afraid of the freakin’ dark !
Mercury vapor lights are nearly as inefficient as incandescent. Get a lower wattage metal halide instead. Or just turn it off. It doesn’t really do any good anyway.
Think about taking some of that money stashed for riots and no food and get it into the stock market.
“Restructure” Indeed! F&F are a gargantuan mess. If you have time go to 321gold and read “Enron Fun with Fannie & Freddie” No way to restructure what has been created. Keep kick’n it boyz…
Politics, shaky economy create no rush to restructure Fannie and Freddie
Washington Post ~ March 11, 2010
The federal government has spent the past half year seeking to roll back its emergency efforts at propping up the financial markets — with the notable exception of its involvement in mortgage giants Fannie Mae and Freddie Mac.
As the government has pledged more and more money to cover the companies’ losses, it has assured the public that planning was underway for overhauling the firms so the bailouts would end. As recently as December, the Obama administration said it expected to release a preliminary report on how to remake Fannie Mae and Freddie Mac around Feb. 1.
But no plan was produced, and in response to questions from lawmakers, Treasury Secretary Timothy F. Geithner clarified last month that it would be another year before the government proposes how to restructure the firms.
Sixteen months after they were seized to prevent their collapse, the companies remain wards of the state, running a tab that has now exceeded $125 billion in what has become the single costliest component of the federal bailout for the financial system.
They seem to currently serve the purpose of creating the appearance of an independent source of money that has been earmarked for propping up the housing market. If not for the diversionary purpose of Fan and Fred, the attention would naturally settle on whoever is actually backing the ongoing effort to throw billions and billions of dollars away on the housing market rescue effort.
2 interesting things:
I work as a subcontractor for a firm (no names or what is it doing - not important). The idea is that they have a job to do and they send emails to subcontractors in the area, if no one replies, they start calling. If I want to do it, I call them to accept the job. The payment is a flat rate depending on the type of job. I do this in my free time (I have a 9-5 job) because I like it and I would probably do it for half the money I get now.
Up until a few months ago I would get phone calls for jobs and most of them would be either too far or during my working hours so I would say no at which point they would ask if I would do it for more money. Recently, something else started happening. If I would say no, they wouldn’t offer me more but when I would say yes, they would ask me if I would do it for less …
Another thing is that the payment is delayed for 30 days after the call is closed (I presume it’s because eventual complaints from the customer meaning the job is not yet done) plus a few more days in the mail. Yesterday, I got an email saying that they offer “fast money” meaning that I also have the choice of getting the money faster (7 days after the call is closed plus mail time) but I would only get 80% of the pay.
Hard to believe inflation is close; lowering the standard of living (low wages high prices), yes but no inflation … just my 2c
“Hard to believe inflation is close: lowering the standard of living (low wages high prices), yes but no inflation…”
What you described in our post are symptons of deflation, not inflation. Money is tight hence the demand for your services has declined. “Fast money” is only 80% of 30-day delayed snail-mail money, etc.
The delay is/was normal due to the nature of work (I go on site, I fix things and the customer signs the paper saying that everything works AT THAT MOMENT, if something goes wrong later, the call is considered reopened and I have to go back)
It’s still a sign of tight money in that there are those who need the cash “now” - hence “fast money” - and they need it so badly that they are willing to forgo 20% of it.
Kind of like getting bent over in a pawn shop when money is desperately needed immediately.
It’s still a sign of tight money in that there are those who need the cash “now” -
Yep. I’d ask them if they wanted to pay me in 60 days for 10% more.
Nice
I’m sure he knows he is describing deflation…
“I’m sure he knows he is describing deflation…”
It’s hard to tell sometimes. People here have posted all sorts of deflationary happenings and have interpreted such happening as proof that inflation is running rampant.
I’m … mixed (like most people I don’t know what to believe). Recession/depression leads to deflation. Huge overproduction/stocks mean the same thing. Printing press is contrary. Who wins? I don’t know.
I posted what I noticed and what it means (deflation). but at the same time I look around and I see all kind of things that stay against normal market functioning (normal market functioning = fast resolving crises with deflation now and clean rebuild soon after - a dream …)
I rent; for the last two years the rent went up (a lot less than before but still up). I could move but my son’s daycare is across the street - much too convenient.
I work in research/academia. My previous PI ran out of money and he was forced to fire some people (including me, I found work a few weeks later, don’t worry) BUT he is prohibited by law to reduce or EVEN FREEZE wages, he has to give AT LEAST x% raises each year (based on some calculations).
My history professor in college worked in a clothing store during the Great Depression. The rule was: You came to work at 6 AM and immediately began working. Then at 8 AM you clocked in. Then at 4 PM you clocked out, but you remained and worked until 6 PM, at which time you could go home.
You don’t like it? Then hit the door; there are hundreds waiting to take your job.
Methinks something of this nature is going to happen in your circumstances.
Educators with real world experience have so much more to offer than career track academics. A silver lining of this event might be that more such professors appear in our universities to replace the pension/tenure hounds.
combotechie: I got a pretty good job some years ago. I liked it, it paid well. I made damned sure I got there before the boss did, and didn’t leave until after he did.
One of my old undergrad professors( Abnormal Psych) would welcome new Fall students with his back to them. he’d then wail,” I was a totally ski bum in Vail for 4 years between my Masters and Phd. Those were the best 4 years of my life”
He’d then turn to face his new class and say ” WTF…You’re STILL here ?”
“The rule was: You came to work at 6 AM and immediately began working. Then at 8 AM you clocked in. Then at 4 PM you clocked out, but you remained and worked until 6 PM, at which time you could go home.”
Didn’t wally-mart do this sort of thing?
“Hard to believe inflation is close;”
As a natural outcome of current events, inflation is nowhere near. As government policy to “solve” the debt crisis, it’s breathing down our collective necks.
Well stated.
Exactly. Don’t ignore the printing presses (TPP).
Not to mention the PPT…
JohnDanger, you’re not the only one who’s been offered such a “deal.” Time Warner’s doing it too.
Again, the ONLY deflation I’m seeing is wages. (and RE of course)
(and RE of course)
I wouldn’t be so sure, at least not for about the past year.
Damn. Good find. Just who the hell is buying that RE? And I have to wonder about shadow inventory as well.
That’s my chart actually - thanks much. It’s from data from here.
There have been lots of anecdotes of a new round of FB’s on the HBB the last few months - and I believe it. I also keep track of stats here in NoVA, and “available inventory” is quite low right now, with sales relatively high - just above historical norms. NoVA of course is a bit exceptional due to the way things are shaking out, but I’m sure there are pockets in other places that are similar.
Don’t underestimate the impact of:
- Still-historically-low interest rates (thanks Fed)
- Still-loose lending standards (thanks FHA)
- Tax incentives (thanks Congress/Prez)
- “Bottom caller” mentality (thanks MSM). Just tonight in fact on the way home I heard some idiot on DC news radio talking about how prices are very low right now, and having no place to go but up. As you can see from the chart - they’re not, and they don’t.
“Another thing is that the payment is delayed for 30 days…”
Thirty days is a long time when things are unraveling.
I’m thinking about selling my house. We bought it four years ago. We love it, and planned to live here until we die. Well, last week a foreclosure house came on the market. We made a low offer on it four years ago, which was rejected. It’s now on the market for $225K less than we offered. We could probably make about $150K by selling our house and buying the foreclosure. I’d appreciate HBB comments.
“We could probably make about $150K by selling our house and buying the foreclosure.”
Whaddya need HBB comments for? If you can do that, freakin’ go for it. NOW!
But sell your own house before buying anything new.
Yeah, I was wondering how much you can rely on the idea the home you desire lost so much value yet your home that you need to sell didn’t. I know in this area prices are compressing toward the middle. Lower priced homes are holding and even increasing in price if a listing is in nice shape while the $400-500k slots are getting bloated and developing downward pressure. So perhaps that’s a beneficial situation in your area too but you don’t know till it hits the MLS….unless you’ve got deep enough reserves to take a loss on the one you’re in now for a dream home.
I’d also be nervous about the stability of the property tax bill. I’m almost thinking of waiting until NY gives out the bad news and the school districts react before I sign up for something that I know has the potential to move drastically upward.
Yes. Focusing on the buy price of home is so 2008 people. Problem going forward and the big money drain will be property taxes and the likely 20, 30, 40% increases, along with water, sewer too. At least with CA prop 13, you can somewhat predict and budget for base prop tax. Most other states you cannot and that will be the focus next 15 years. Similar to why people hate condos. You never know what will happen with the HOA fees and completely out of your control.
Agreed. A couple I know decided that they didn’t like the block they were living on.
And I don’t blame them. It’s a crummy block. Could never understand why they bought there in the first place. But I digress.
They bought a house in Dunbar Spring, which is one of those oh-so-cool, hippie-granola nabes just north of downtown Tucson. Lot of house price inflation over there in recent years. Something about the nabe becoming trendy.
Anyway, they paid something like $250k for the Little House on the Alley. Meanwhile, their other house just sat there with a “for sale” sign for almost a year. The final selling price was below the original asking price. That was back in 2007.
Any-hoo, I didn’t say before that this couple is, shall we say, in the sunset years of life. He’s in his seventies and not in very good health. She becomes Social Security eligible this year.
When they were living on Crummy Block, the man said — in every way possible — that he hadn’t worked since he was 54 years old. (I think he has a nice military pension.) And she was a retired city attorney.
That was then. This is now.
She’s come out of retirement and works as a cashier in a food store. I don’t think she’s working there just because she wants something fun to do. I think the “carrying two mortgages” thing still weighs heavily on her household finances.
wouldn’t your current house have also dropped in market value by a comparable amount? How would you “make” money in this scenario? Or do you really just prefer to live in the first house?
I wouldn’t make money. I would just retire the mortgage, saving money.
I’m curious just how your 2006-priced house can be sold for a profit in today’s market. Did you build it yourself out of beer cans or something?
I love you, pressboardbox. No, my house has depreciated. But I bought it with “bubble dollars.” I sold one and took all of the money and put it in the new one, knowing that it would depreciate. The one we live in now is in a great, quiet city neighborhood. We really do love it. The other one is a very nice old house in a good neighborhood, but it is a few blocks away from a bad neighborhood. It was bought in 2006 by an “investor” who thought he was getting a good deal, but it was eventually foreclosed upon. It’s true that I don’t know what my house will bring. I’m thinking of listing the house in a couple of weeks, just to see what kind of offers I get. If the offer is high enough, I could buy the other one outright.
I can appreciate your bubble dollars explanation. I am a firm believer that everything is always for sale for the right price. Nothing to lose by listing it. If you should ever need any beer cans, I’ve got you covered. Good luck with the sale. -carl
RE,
Give us your list of pro’s & con’s.
From here it seems financially obvious.
Cons: I like the current house better. My husband likes them equally. I hate moving and thought I’d never have to do it again.
Pros: new house is closer to my job, but I’m going to retire in two years anyway. The main pro is saving money. I thought I had everything figured out, but my sister and her ex-husband can’t afford to send my niece and nephew to college, and this would enable me to do that.
As some of you know, I have a real estate license. I think I’ll list it in a couple of weeks - very easy to do and costs me nothing. If I get a high offer, I can think about what to do. If I get a low offer, I can unlist it. I’ll let you know what happens.
Thanks, HBBers. My poor husband and I have been going back and forth for a few days - I now have a plan.
Tinfoil hat or truth?
http://dissidentvoice.org/2010/02/the-financial-coup-d%E2%80%99etat-the-economic-elite-vs-the-people-of-the-united-states-of-america/
The Financial Coup d’Etat
The Economic Elite vs. the People of the United States of America: Part IV David DeGraw 2/22/10
Although most of the Economic Elite live and operate inside the US, they are not concerned for our future. To them, the entire world is theirs…the Economic Elite have needed a thriving US middle class to increase growth and profits, but now, in the global economy, they view the US middle class as obsolete. They increasingly look globally for profits and they would rather pay cheap labor in countries like China and India
If you want further proof of this, all one needs to do is study the Wall Street bailout. The entire bailout is strategically designed to eliminate the US middle class. Every time you hear the word “bailout,” you should think “coup d’état.”
The bailout was a financial coup, an intelligence operation to seize control of the US economy and tax system.
The success of the coup is clear by the control of the US Treasury by Goldman Sachs criminal masterminds Hank Paulson and Tim Geithner, and the continued control of the Federal Reserve by Ben Bernanke.
In 1970, Hank Paulson began his career in the Pentagon working for Secretary of Defense Melvin Laird. In 1972, he then moved to the White House, where he worked for the Nixon Administration. He was “the assistant to John Ehrlichman during the events of the Watergate scandal for which Ehrlichman was convicted, and sentenced to prison.” After Paulson’s disgraced exit from the political world, he joined Goldman Sachs in 1974, eventually becoming CEO in 1999… While leading Goldman, Paulson developed very intimate relations with members of the Chinese elite, visiting the country over 70 times.
In 2004, during his time as Chairman and CEO of Goldman Sachs, Paulson personally led a successful effort to get the SEC to remove the “net capital rule,” which was a “requirement that their brokerages hold reserve capital that limited their leverage and risk exposure.” This was the biggest reason why the economic crisis happened
After making over $700 million on these shady high risk activities that created a ticking time bomb in our economy, Paulson left Goldman Sachs to run the US Treasury. Shortly after that, the speculative trading scams blew up, and there was the man who played the most pivotal role in causing the economy to crash now running the US Treasury and in charge of “maneuvering” trillions of dollars in national wealth to “fix” the economy. It was time for Paulson, along with his close confidant Tim Geithner, then heading the NY Federal Reserve Bank, and Federal Reserve Chairman Ben Bernanke, to engineer the greatest theft of wealth in history with the “bailout.
All three branches of our government are now complicit in what is literally the greatest theft of wealth in history, along with a mainstream “news” media that keeps going about their “reporting,” as if this wasn’t a crime, business as usual. Nothing to see here…
Obama’s Role
As hard as it is for many Americans to admit, after a year in office it is now obvious, to those who study policy decisions, that Obama’s rhetoric is very far from the reality of his actions. Outside of the tough talk Obama gives concerning “Wall Street Bankers,” all evidence clearly demonstrates that he is their puppet. The list of decisions that he has made to support the Economic Elite at our expense is already extensive.
the fact that the bailout started under Bush and went straight through without a hitch under Obama is proof enough…Obama’s campaign was heavily financed by Goldman Sachs, and prior to the election Obama often spoke with Paulson…Obama and Paulson engaged in 26 direct calls prior to the election. “Paulson placed more than twice as many individual outgoing calls to [candidate] Obama (14) as to President Bush (6).”
As soon as Obama was elected, he got rid of all the economic advisors…and replaced them with Wall Street insiders who were committed to “turning the bailout into an all-out giveaway.” He took the main players that caused the economic crisis to begin with, and put them in charge of economic policy.
Right from the start he appointed Tim Geithner, Paulson’s right-hand man, to run the US Treasury. Mark Patterson, a former Goldman Sachs lobbyist, then became Geithner’s Chief of Staff with the direct approval of Obama
It is hard to face the fact that we have been so taken advantage of and abandoned by the very people we supported and had put our hope and faith into. Americans need to understand that Obama, along with most of the Democrats and Republicans are not looking out for our best interests.
In 2004, during his time as Chairman and CEO of Goldman Sachs, Paulson personally led a successful effort to get the SEC to remove the “net capital rule,” which was a “requirement that their brokerages hold reserve capital that limited their leverage and risk exposure.” This was the biggest reason why the economic crisis happened
Yep. Here’s an article on the subject.
Not sure I’d call that “the biggest reason”, but it certainly helped increase the scale in the latter days of the bubble.
This chart most likely shows the results of that rule change - financial sector debt had started leveling off in 2003/2004, then took another turn upwards after that rule was put in place.
How could you even think this is remotely tinfoil? It’s what happened, isn’t it?
How could you even think this is remotely tinfoil? It’s what happened, isn’t it?
Yes it is what happened and I’m 90% convinced that it was the intent to pillage America for the benefit of the few.
However 10% of me still can’t comprehend how the few elite who could do such a thing WOULD do such a thing.
Patriotism and loyalty to one’s people and country are traits that have historically been distributed among all classes and power levels. What changed so much now?
“However 10% of me still can’t comprehend how the few elite who could do such a thing WOULD do such a thing.”
Evil is tough to confront, Rio. That’s why it can flourish, because most decent folks can’t see it for what it is. They can’t comprehend it. But, it’s a start that more folks are able to see it now.
The Tea Party movement is sort of a dim, fumbling, bumbling attempt to do something about it, but you can’t do anything about anything until you can confront it, see it for what it is. But at least folks are making a start.
Rio…It happened ,it happened .It was hard for me to believe at first also ,but I was watching this very closely while it was happening . I don’t know if people were watching my posts during that time period of the set-up and than the bail-outs,but I was warning everybody what the gig was ,course I sounded like a nut cake .
Its clear that Main Street ended up being the unsuspecting
pawn or mark in the bag-holder transfers .The FIRE call was one of the biggest acting Jobs in History because you can’t pull of the unthinkable unless you put it into a emergency that makes it look like no other options exist other than the ones the Culprits
want .
“…course I sounded like a nut cake .”
You bring to mind the quote on Russ Winter’s blog:
“During times of universal deceit, telling the truth becomes a revolutionary act.”
- George Orwell -
Rio…It happened ,it happened .It was hard for me to believe at first also ,but I was watching this very closely while it was happening
I know it happened and my “Tinfoil hat or truth?” Headline might have been unintentionally misleading but it was mostly questioning the “intent” not the facts of it happening.
Did they really know that they were gutting America’s middle class or did they reach too far and have to bail themselves out as a cover up of their greed and crimes?
Maybe this point does not even matter since the results are the same.
But I’m 100% sure it happened.
I’m 90% they intended it to happen. (Well, after your posts today I guess I’m now more than 90% sure they intended it to happen.)
“However 10% of me still can’t comprehend how the few elite who could do such a thing WOULD do such a thing. ”
I think they feel justified by people’s general ignorance or stupidity, so that we all have it coming in a Darwinian sort of way.
If recent events were planned from the start, then there was a miscalculation. As things stand at this moment it’s all good for the wealthy elite. However, continuing along the path is government and currency collapse. Like the rest of us, the wealthy elite are probably at their apex, and are looking at a long fall.
Having worked for government agencies most of my life, I don’t believe in conspiracies.
A conspiracy requires two things: Intelligence and collusion. Unlikely you will find either in government.
A conspiracy requires two things: Intelligence and collusion. Unlikely you will find either in government.
Not to mention the fact that people working in government talk as much as the rest of us. When that happens, news leaks happen.
A conspiracy requires two things: Intelligence and collusion. Unlikely you will find either in government.
Not to mention the fact that people working in government talk as much as the rest of us. When that happens, news leaks happen.
The level of conspiracy this would involve would be miles above government only pay grades.
We’re not talking about a high level manager blowing the whistle on a tobacco company.
The philosophical mantra among America’s elite is “Social Darwinism.”
As for conspiracies, I’ve walked the halls of Fortune 100 companies and you better damn well believe they conspire and collude… because your life depends on it.
The level of conspiracy this would involve would be miles above government only pay grades.
We’re not talking about a high level manager blowing the whistle on a tobacco company.
Yep.
Read “The Creature from Jekyll Island” and some other similar books to see what Rio means.
Guys with that kind of influence, and who make in the neighborhood of $10M - $500M a year really, really know how to keep their mouths shut, when doing so allows them to keep and/or advance their position.
“However 10% of me still can’t comprehend how the few elite who could do such a thing WOULD do such a thing. “
You need to get out more often. There are a lot of bad people in this world.
Besides, you’ve never heard “Power corrupts, but absolute power…?”
Labeling events which actually happened “tinfoil” is a standard troll strawman characterization technique which has been repeatedly practiced on this blog.
Labeling events which actually happened “tinfoil” is a standard troll strawman characterization technique which has been repeatedly practiced on this blog.
Your statement is correct but not in relation to my post. I guess you missed the question mark. (?)
“Tinfoil hat or truth?” is a question that can infer that the “tinfoil” people are actually the one’s telling the truth. (In this case the truth of intent as well the sequence of events.) My posts have been very consistent that I think the middle class has been ripped off.
Implying (if that’s even what you did) “Tinfoil hat or truth?” was a strawman is the strawman while the “Tinfoil hat or truth?” question is not a strawman.
OK RIO …I have always found that it was funny that Hank Paulson of all people became the Treasury Sec. at that exact time with all the conflict of interest he brought to that position . Paulson was one of the biggest players in this unregulated dirty business high leverage Casino games that brought the house of cards down . He had a hand in getting leverage increased as well as other deregulations .
I feel like Paulson and the other King Pins knew that when the house of cards fell based on Standing law ,he would be liable on a personal level .In fact without this Obstruction of Justice and Bail Out Paulson would of been Public Enemy
No. I ,along with the other Market Makers .
GS does act like the World is their oyster and the only thing that mattered was emerging markets . Main Street got throw to the back of the bus . They were sitting up this bail out for a long time and
the Congressional Hearings were Kangaroo Court shows for the people . There were no reason to bail out unregulated Investment Banks and Insurance Companies .
If regulated Banks were selling their paper to F&F and Wall Streets CDO markets
and most likely weren’t holding a big stake ,even if they might of been servicing the loans ,the big bag-holders were more so the
Investment Houses and the Insurance Companies . Are you following
me ? Wall Street Investment Banks were holding the Lions share and you combine that with the leverage they had and it would of been mayhem for all of them . They would of been sued silly IMHO.
Didn’t anybody notice that these mergers of Investment Banks and Regulated Banks were for the purpose of pulling off this robbery of the public coffers ? Hank Paulson saved the rotten Casino and made
the Corrupt entities even more huge to fall . It was all about creating immunity for the Culprits ,in my humble opinion of course . Congress went along with this because these culprits are their masters . It would of come out just how much the entire systems now revolve around BIg Corporation America and Wall Streets High Leverage rotten Casino games ,including Credit Default Swaps ,not backed by any reserves . The culprits saved their system and Main Street ,the same old pawns ,were left with the belief that they were saved .
Paul Craig Roberts says Paulson should be sitting in jail cell. I couldn’t agree more.
Hey now, you are giving casinos a bad name.
I go to Las Vegas, I put my money down and spin the wheel. I know the odds are in favor of the the house. But likely, there is a gaming commission that regulates it. Biased to the house, but a straight game. I can live with that. What you are talking about is simple theft.
The Casinos had been much more limited before deregulation and
Wall Street and the Banks were limited in how much money they could make by the regulations . Wall Street didn’t care that they were messing with real estate and turning it into a speculative
ATM market . Corporations were much more limited in how much profit they could make before Globalism/slave wage and the monopolies that followed made them stronger . All the while they set up new laws in which the Government by taxes would pick up BIg Business obligations .
I am talking about theft and games designed to leave pawns being the bag-holders . You can look at this at all levels of the financial systems and Global Big Business interest . You can see this in so many rigged systems that leave the lion shares to the elite and
the redistribution of wealth to a number of self interest groups.while the average wage earner middle class is dying on the vine ,and future opportunities seem more and more cut off.
Why would they do such a thing ……because they could .
“…operation to seize control of the US economy and tax system.”
The flaw in this analysis: Failing to recognize that Wall Street already had control of the US economy and tax system. The Fall 2008 bailout was just an instantiation of this fundamental reality.
Yep Wall Street was in control before the crash ,but this little
problem of being caught holding the bag when this little real estate Ponzi=scheme didn’t work according to plan came up . In other words I think these Masterminds are so stupid that they thought that real estate would just kinda level out,maybe only have a 10% correction and they would have enough time to get out if the correction was more .
They get out of markets when they think they are going to crash anyway ,and in a lot of ways they were playing those kind of bets when they saw signs of a weakening .Mozillo was a classic example of
a CEO that was going for the Pump and Dump exit .These culprit knew way long before the public that the markets were coming unglued . They would be the first to know when large blocks of loans were becoming non=performing .
The point is ,a quick decline was something they weren’t betting on IMHO . If you remember correctly it happened rather fast
because the meltdown had been postponed by new creative loan product and even greater fraud allowed and a big NAR campaign to keep the RE Ponzi Scheme going and builder incentives ,you name it .
Also ,they must of been sweating bullets knowing how this paper was rated AAA investment grade and at some point it had to be downgraded and that would of affected the whole Ponzi Scheme.
They were sweating bullets about at the same time that Madoff
was and they were getting calls for redemptions ,or knew they would soon .
They all should be in jail .
“As hard as it is for many Americans to admit, after a year in office it is now obvious, to those who study policy decisions, that Obama’s rhetoric is very far from the reality of his actions. Outside of the tough talk Obama gives concerning “Wall Street Bankers,” all evidence clearly demonstrates that he is their puppet.”
The “Hope and Change” campaign slogan turns into the “Same-O on Steroids” in reality. Every single aspect of the Bush presidency that the MSM lambasted and incessantly picked at, the Obama presidency has ratcheted into higher gear with the gas pedal floored. But the MSM now has laryngitis and amnesia. Where are the “grim milestones” of new Iraq Invasion deaths and casualties the NY Times and others would trot out every week? Conveniently MIA. What about those “irresponsible” Bush deficits? Obama has sent them exponentially higher, with the MSM puppy dog press lapping it up as “necessary stimulus”. And of course, if the “housing crisis” ever had anything to do with qualified buyers not being able to afford a home, then the Obama administation’s obscene bank-giveaways, borne by the taxpayers and funded by Majik Munny from the Fed, is the epitome of PERPETUATING a crisis that should have already ended through crashing RE prices.
What millions of Americans are discovering is that the Democratic Party and Obama currently represent “income redistribution” at warp speed -from the middle class directly to the pockets of the banksters.
Almost perfect summary of what’s happening. Throw in monopoly/oligopoly consolidation across industries and you have a system where there will be no middle class.
REhobbyist …need more information . You mean come out ahead in profit by 150k in 4 years ?????
I just lost an old friendship with someone who happens to be a realtor across the country in Maine, because I dared question the conflict of interest of a buyer’s agent in getting a commission based on a higher asking price. I suggested that fee splitting with a seller’s agent is still a conflict of interest with the buyer, since they are rewarded for ‘bringing in’ a GF and making sure not to sabotage the sale.
Even though I was merely bringing up points of discussion in real estate blogs everywhere, and were in no way directed at him personally, he chose to take it personally. It’s like arguing religion: it comes down to whether or not you have enough “faith” in someone to be ’sheparded’ down a particular path…or in this case, the path of potential financial ruin.
Oh well, good riddance. I used to know a few realtors casually a few years ago and remember their hubris about their incomes. I guess their skin is getting thinner.
A “buyer’s agent” would be doing his job if his commision was a percentage of the REDUCTION of the asking price.
From what I’ve seen, the typical “buyer’s agent”
-Checks the MLS to see what listings approximately match what you are looking for.
-Drives you around to look at houses.
-Fills out the offer sheet (which, BTW you can probably download online for free somewhere, or pay a lawyer a flat fee to make a template, if you are realy feeling generous).
-”Negotiates” counteroffers, terms, etc.
To me, you can make the seller’s agent work for you, when you explain to them that your lowball offer has a positive side, in that they don’t have to split the commission.
I have always been curious about the impact of realtor’s fees on housing prices.
Let’s say a house have been sold twice in 10 yrs (not uncommon few yrs ago). Isn’t the realtor fees of about 12% (6+6) already priced into the house in the next sale? I mean the seller has to price in the realtor’s fees each time he/she sells, right?
So to me it seems like it was basically a loss for sellers most of the time. Sure some sellers won but most lost. Banks and realtors were and are the real beneficiaries of this transaction, not the buyers and sellers.
When the revolution happens hope we get rid of these parasites (the middle men).
Actually, around here, they split the 6-7%. Basically, making $6000 on a $200K house, just to drive people around.
And in theory, the seller should be able to cut the price by 6%, if they go FSBO.
The reality is that they just decide to pay themselves the 6% commission.
I’ve related the story before, but my dad tried to sell his house FSBO. A couple who had signed a buyer’s contract with a realtor saw his sign, and came over to look at it (without having the realtor around).
Realtor called my dad, and told him that if he sold the house to these people, my dad would “owe” the realtor “his” 6% commission.
My old man, who is/was an even older, grumpier, p.o’d at the world, Pain In the Azz than myself, proceeded to tell the Realtor where he could pack some sand.
X-GSfixr
About what percent have middle-class, Jayhawker houses come down in price since the peak? 10-20%?
Split 5-6%. Then agents split with their brokers. Each agent makes 1.25-1.5% of the selling price. Great when it’s a $250K house. Not so great when it’s a $40K house.
I also think that the agent should pay for the inspection.
“Conflict of interest” is no longer illegal in this this country, and is a standard business practice
You didn’t know this?
Indeed, corruption is required these days.
Anyone else note the odd divergence the last two weeks or so between treasury rates and mortgage rates? Treasury rates are up quite a bit (e.g. 10-year from 3.6 to 3.74 since Feb 28th), but 30-year mortgage rates in the same period went from 5.12 to 5.01.
Usually these follow each other quite closely.
It’s even more odd being that the Fed’s finishing its MBS program this month. One would think that would have the opposite effect - that mortgage rates would go up faster than treasury yields.
Something weird going on.
Perhaps the Fed’s program hasn’t finished yet.
I suppose since they are not independently audited, the Fed could announce the end to a program but not end it; who would know the difference?
The people who sold them the bonds.
Yeah but would they tell?
Bank of America to Stop Charging 31,200% Interest Rate:
No, that’s not a misprint.
Let’s say you went to Starbucks and bought a $5 Latte. You swiped your debit card and didn’t have the $5 in your account.
Bank of America would charge you a roughly $30 overdraft fee, amounting to 600% of your purchase for a loan of that $5 for as little as one day. That’s bad enough.
Let’s assume you paid that overdraft fee (and the $5) in one week. There are 52 weeks in a year and the bad news is that when computing the annual percentage rate you must divide the interest charged by the percentage of a year you held the money to get the APR. Thus, 31,200% interest on an “annualized” basis, assuming you pay it in one week (it’s 218,400% if you pay it off the next morning!)
The bank will soon stop doing this, and in fact is mandated to do so without getting permission first for each transaction, as of June 1st.
The question that should be asked is why we should have to wait until June 19th for new accounts, or August 1st for existing accounts, never mind why this sort of outrageous behavior has been permitted in the first place.
Guido on the corner typically will charge you something obscene like 500% interest over the course of a year.
The banksters put Guido to shame.
(From Karl Denninger)
Let’s say you went to Starbucks and bought a $5 Latte. You swiped your debit card and didn’t have the $5 in your account.
I hate the big banks, but the above sentence is what is wrong with America. Why is one buying coffee without money in their account.
Better question maybe, is why is one buying a $5 latte without $5 in their pocket?
( maybe why is one paying $5 for a latte in the first place )
I think people can’t balance a checking account are being let loose with debit cards.
Cash “keeps you honest” and a cashless society, where each and every little purchase will be tracked and data mined so you can be marketed to scares me.
I’m using cash instead of credit cards more and more. I pay it all each month, but even giving them the merchant fee makes me sick.
It’s good to know that if, for the sake of our society’s economic welfare, we someday seek to deter foolish people from spending money they don’t have on things they don’t need, charging them 31,200% interest is not high enough to do it.
Oh yeah, my bank is pitching hard to retain “overdraft protection.” Or as I like to call it “overdraft BOHICA.”
Small businesses pounded by payroll taxes.
CHICAGO (Reuters.com) - Indiana small business owner Mike Hutson is facing a wakeup call when payroll taxes come due in April. Hutson’s bill is set to triple as record-high numbers of unemployed workers claim benefits from the state’s bankrupt unemployment trust fund.
“The economy is knocking us on one side of the head and our friends at the state house are taking care of the other side,” said Hutson, owner of Westfield Lighting Co., a residential lighting company located in the northern Indianapolis suburbs.
Hutson says the annual state unemployment insurance tax bill for his 16 employees will rise to $7,219 in 2010, or $451 per worker. Two years ago, before two rounds of layoffs, the total was $2,387 for 31 employees, or $77 each. That’s a per-worker increase of nearly 500 percent.
Increased property taxes and a downturn in residential construction have contributed to Westfield’s revenues falling from a high of $5.3 million in 2007 to $3.5 million last year, he said. To preserve cash, Hutson’s wife suspended her salary last year and he hasn’t drawn a paycheck since Christmas.
“It’s pretty expensive for us,” Hutson said.
It’s laughable how Fed tax cuts, credits, and other incentives are being offset by state and local hikes in taxes and fees. Doesn’t anyone keep a household budget anymore? If they did they’d realize that, like this business owner cited above, the peeps are just spinning their wheels.
Summary
FED tax cuts, credits, and bailouts go to the elite.
State and local tax hikes are more often regressive, increased fee’s and cuts in service hit the middle class and small business.
The consolidation game is going full speed ahead.
ITEM: Senators Lindsey Graham (R-SC) and Chuck Schumer (D-NY) are working on a Senate version of comprehensive immigration reform that includes a very controversial idea. There is a provision in the draft bill to force all Americans to possess a biometric ID card.
The US House of Representatives passed a spending bill last week that contains provisions establishing a national ID card, and the Senate is poised to approve the measure in the next few days. This week marks the American public’s last chance to convince their Senators they don’t want to live in a nation that demands papers from its citizens as they go about their lives. “Real” ID card coming….
Yeah, I’ve been following this, wmbz. Graham is a disgusting piece of mung.
“Graham is a disgusting piece of mung”.
Yep, he’s a spineless weasel, who keeps getting re-elected, of course.
The most disturbing thing about Graham, IMO, is that he really knows the law (unlike many of peers in Congress), but he’s consistently advocated for measures to take away civil liberties.
You are correct, he does know the law, and yet.
I think the real objection is the fundies who are afraid it will usher in “The Rapture”. Biometric ID is almost impossible to fake.
People who object to illegal immigration, want to reduce the incidence of identity crime and oppose terrorism should be in favor of it otherwise.
Anything that can be bought, can be faked.
How would you fake a retinal scan or a set of fingerprints?
I know the current system with photos is extremely easy to fake with photoshop or cosmetics.
got access to the ID system? just assign the scan to another name. Just a couple $ away.
True, driver’s license thieves can do that at the DMV already. However, you can’t have multiple unique IDs on a biometric scanner. Everyone is unique. I think it will still help even if the system is corrupted.
..How would you fake a retinal scan or a set of fingerprints?
As is true of any “foolproof” security measure, the problem will no doubt prove to have many solutions if and when criminal types see an adequate profit in finding them.
wikipedia… Iris recognition
..Many commercially available iris-recognition systems are easily fooled by presenting a high-quality photograph of a face instead of a real face, which makes such devices unsuitable for unsupervised applications, such as door access-control systems…
..How would you fake a retinal scan or a set of fingerprints?
You need to watch “Minority Report”.
And the best part with this new system is when your identity gets stolen, it’ll be practically impossible to restore it; you might just get tossed in the can for leaving your house because “your paperz” won’t be valid since somebody stole your ID.
Yeah, this will work out well for the citizens… not.
“People who object to illegal immigration, want to reduce the incidence of identity crime and oppose terrorism should be in favor of it otherwise.”
Yeah, but that would require intellectual consistency.
We already have a much-abused de facto national ID: the Social Security #. Replacing it with a hard-to-fake ID card would be a good thing.
“People who object to illegal immigration, want to reduce the incidence of identity crime and oppose terrorism should be in favor of it otherwise.”
If you are so inclined, it is also the only way to control access to public schools and free health care at hospital emergency rooms. If you think that a large portion of your taxes are going to fund there services to people who should not be able to access them, this is the only way to contol it.
I think the real objection is the fundies who are afraid it will usher in “The Rapture”.
Sir Isaac Newton proposed, based upon his calculations using figures from the book of Daniel, that the Apocalypse could happen no earlier than 2060.
So there you go …
Biometrics is nothing but snake oil. It can be defeated and it is not reliable. Meaning that when it fails, even you can’t use your own equipment.
They just had a 7.2 aftershock in Chile, near Santiago. Ouch.
You know you’ve had a bad earthquake when your aftershocks are 7.2.
That’s an aftershock? jeebus, that’s another earthquake! Those poor folks in Chile, my heart goes out to them.
Different location, no aftershock.
Right, Rancher? That was another earthquake, wasn’t it?
Well - news sources are calling it an aftershock. Aftershocks are often miles away from the original earthquake; as pressure is released in one area it increases in another nearby area, which is what causes aftershocks.
However that being said - I haven’t looked to see how “nearby” this epicenter is from the previous. Seems a bit too coincidental otherwise.
80 miles south of Valparaiso and 90 miles southwest from Santiago. Much closer to capital. Aftershock of 6.9 minutes after the
initial quake, smaller shocks are still happening.
Happened in Ciudad Mexico in the 80s. As I recall two 8+ quakes, two days apart.
I had family there in 1985. Phones were out for weeks. After about a week a received a phone call from the state dept. telling me they were OK.
My wife is Chilena, from Santiago. We were just there, and left a few weeks before the big quake. The whole country is spectacularly beautiful, and Valparaiso is my favorite city in the entire universe. The country is full of intelligent, hard working people. It sounds like it is slowly being shaken to pieces. They have ultra strict building codes since they are very prone to big earthquakes, but after dozens of major quakes over a week and a half, everything is starting to crack and crumble.
The country is full of intelligent, hard working people.
Agreed.
A few years ago, I had a client who was in Chile on business. He hired a cab and the guy was so good that he became my client’s personal cab driver for the entire visit.
Barn door left open
All the horses ran away
Quickly, shut the door!
P.S. So far as I am aware, one of the key purposes of downpayment requirements is to screen unqualified buyers out of home ownership.
By reducing downpayment requirements, the FHA adversely selects buyers with higher-than-average risk of default, as the inability to save up enough money to fund a downpayment is a bad signal for the potential of a household to uphold its commitment to repay a debt. I guess so long as the loan is federally guaranteed, the lender faces no risk of losing money, so perhaps my concern is misplaced.
FHA considers down payment requirements
By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, March 10, 2010; 8:40 PM
The Federal Housing Administration has concluded that its loan volume would have dipped by 40 percent in the next fiscal year and that 300,000 first-time home buyers would have been shut out of the housing market if it had raised its down payment requirements, as critics have pressured it to do, a top housing official plans to tell Congress on Thursday.
Borrowers who take out loans backed by the FHA are permitted to put down as little as 3.5 percent. The agency’s cash reserves have dwindled as defaults have climbed in recent years, creating concerns that taxpayers may ultimately have to come to FHA’s rescue.
The agency’s critics say that boosting the amount of upfront cash that borrowers invest in their homes would make it less attractive for them to default on their loans and walk away from their properties, thereby lessening the chances of a taxpayer bailout. Rep. Scott Garrett (R-N.J.) introduced legislation last year that would have required FHA borrowers to put down at least 5 percent.
…
Low downpayments and government guarantees help the FHA stand in the way of the prudent underwriting standards that private mortgage lenders would require as a protection against losing money on subprime loans. Subprime borrowers (those at higher-than-average risk of default) get a taxpayer-subsidized leg up in the competition for mortgage loans over financially prudent households which are less likely to default on their obligations.
Is this the kind of mortgage finance system which America collectively wants?
Is this the kind of mortgage finance system which America collectively wants?
America what a quaint notion, that what the people want matters. TARP went through when the sentiment for it was evenly devided between no and hell no.
But TARP was different. The situation was an emergency, so they had no time to stop and assess the American people’s collective preferences.
The point is how are you going to get a secondary market going (other than the government ) if the loans you market aren’t investment grade AAA ? You would either need insurance backed by reserves ,or you would
need to have good underwriting and skin in the skin to restore that confidence with the investors . Since the investors were already conned by the quality of the paper being not so good ,you can’t get money flowing unless quality is good . First the bottom has to take place so appraisals aren’t bogus ,subject to more declines . Than underwriting standards would have to be sane ,and than fraud would have to be something that is taken serious ,as in front line operators need to be,
well ……honest and busted if they aren’t.
I said this a long time ago that the bail-outs just prevented the meaningful discovery of just how corrupt the whole real estate lending system had become and all the other casino games that went along with it .
I guess the plan is to balance the back of the housing market recovery on subprime FHA lending? Sounds to me like more hair of the dog stimulus.
I find the assertion that increasing FHA downpayment requirements from 3.5% to 5% would jeopardize the housing recovery to be quite a revelation.
House Committee Talks FHA Reform
in News > Residential Mortgage
By MortgageOrb.com on Thursday 11 March 2010
Proposals to raise the Federal Housing Administration’s (FHA) minimum required down payment across the board to 5% would result in a greater than 40% reduction in the volume of FHA-insured loans, FHA Commissioner David Stevens will tell lawmakers today.
Stevens is scheduled to testify in a House Financial Services subcommittee hearing on the FHA Reform Act of 2010 this afternoon. In prepared remarks, the FHA head acknowledged calls for the agency to increase its minimum down-payment requirements and remove the option of financing the up-front insurance premium into the loan balance. Such proposals would help increase homeowner equity, supporters say.
Currently, the FHA allows for down payments as low as 3.5%.
“We share the goal of increasing equity in home-purchase transactions but determined after extensive evaluation that such a proposal would adversely impact the housing-market recovery,” Stevens will tell the subcommittee.
…
Is PETA taking heed of Megabank of America’s foreclosure policy?
* March 11, 2010, 9:42 AM ET
BofA and the Parrot: Bird’s Eye View of the Foreclosure Mess
“It isn’t about the parrot,” a lawyer for Angela Iannelli told me.
The issue, insisted the lawyer, Michael Rosenzweig of Edgar Snyder & Associates in Pittsburgh, was the distress inflicted on Ms. Iannelli by Bank of America Corp.’s bungling. As we reported Wednesday, the bank apologized for an incident in which its contractors entered her home near Pittsburgh while she was out, cut off utilities, padlocked the door and confiscated her pet parrot. Though Ms. Iannelli had fallen a month or so behind on mortgage payments, her case hadn’t reached the stage at which Bank of America would be justified in taking such actions to “secure” the collateral.
She had to find someone with a bolt cutter to get back into her own house.
Ms. Iannelli, 46 years old, alleges that the incident — which separated her from her 11-year-old parrot, Luke, for more than a week — caused so much “emotional distress” that she needed a prescription medication for anxiety.
…
Okay, time for some fun with cut -n- paste. First we have:
“It isn’t about the parrot,” a lawyer for Angela Iannelli told me.
And, then, three grafs later, we have:
Ms. Iannelli, 46 years old, alleges that the incident — which separated her from her 11-year-old parrot, Luke, for more than a week — caused so much “emotional distress” that she needed a prescription medication for anxiety.
So, is it about the parrot? Or is it about the money?
If I remember correctly, Germany made national ID cards/papers mandatory, after Hitlers takeover. Now a national ID card in itself is not a bad idea. Without one, no work or governments benefits . Whats wrong wth this is the potential abuse. The national ID card now, is the social security card. its simple, date of birth and a number. No problem.
A new ID card opens up the possibility of, a finger print, race/dna, criminal record, political party, religion, organ donor, medical insurance, tax payer id, voter id, drivers license, marital status, guns owned, etc.
This type of identification is the first step to a dictatorship.
The Jewish population of countries occupied by Germany, were required to obtain and register a similar ID. We all know what happened to them.
Exactly. National ID inherently just makes centralized control easier.
Otherwise - no problem.
We could just do tattoos on our wrists.
We could just do tattoos on our wrists.
Yeah, it would save them the hassle later.
Isn’t a driver’s license the defacto national id card already? And now you need a SS card to get one.
Next up doing away with checks and cash. Everything will be done with a credit card.
Wasn’t that supposed to happen 20+ years ago?
It was proposed again recently. Not sure how recently. I think I heard about it about a month ago?
That being said, hearing about it and there being any possibility of it happening are two wildly different things.
That will really put a crimp in begging for a living.
According to our local fish wrap… S.C. has an ‘expected’ boom coming in construction. After our colder-than-usual winter.
S.C. jobless rate sets record, could get worse.
Business ~ Mar. 11, 2010
South Carolina’s jobs woes deepened at the start of the year and will likely get worse before they get better, economists say.
The state’s unemployment rate reached a new high in January at 12.6 percent, up from a revised 12.4 percent in December, the S.C. Employment Security Commission said Wednesday.
Economists offered little hope for a quick recovery beyond an expected boom in construction after a colder-than-usual winter across the South.
“The worst is not over,” said Sam McClary, a labor analyst for the employment commission.
In my neck of the woods the local boyz are all excited about a 300 unit apartment complex that is going to be built.
http://www.coloradoan.com/article/20100311/BUSINESS/3110327/McWhinney+begins+work+on+luxury+apartment+complex+in+Loveland
Of course there was some Corporate Welfare involved. This is Chad McWhinney we’re talking about here after all.
Rates have not been finalized yet, but will tentatively be in the $800 to $1,700 range depending on views, floor plans and location within the project, said Mike Hill, director of multifamily development and operations, a new division of McWhinney.
I wonder how many low wage Lovelander’s can afford to pay that much. You can rent a really nice house here for $1700, and a decent house for quite a bit less.
“The project is being financed by Wells Fargo and backed by the federal Housing and Urban Development”.
I notice ‘Uncle Sugar’ is the backstop. Seems like there should be some more “affordable” units available.
Interesting. Remember just last month when there was some hubbub about how Japan was once again the largest holder of U.S. debt?
Well, turns out - not so much.
(link to data)
They just re-benchmarked the holdings, with some very large adjustments. China’s estimated holdings went up by $140 billion! Japan’s went down slightly, by $3B, while U.K.’s and Caribbean banking centers went down by a lot.
Based on the way the historical data shows, it seems maybe this is a common occurrence, like once a year. I just started tracking this data a few months ago, so don’t know for sure.
Seems pretty amazing that the data isn’t more tightly controlled than that. That combined with the other miscellaneous “household” holdings of $600B indicates that the treasury doesn’t have a firm grasp on who’s buying their debt. Not surprising I suppose - it’s weird though for the data to be so presented with such precision (data given to the nearest $100M), yet at the same time so inaccurate (wild $100B+ swings in estimates).
Follow up - from looking at historical data, there is indeed a re-benchmark done every year. What’s different this time is the magnitude, though it’s not that out of line with previous years, in percentage terms at least. E.g. for China:
2003: $15B up (18%)
2004: $10B up ( 7%)
2005: $28B up (17%)
2006: $55B up (23%)
2007: $46B up (14%)
2008: $72B up (18%)
2009: $32B up ( 6%)
2010: $139B up (18%)
Here’s a just for fun scenario:
Say you won the powerball (and no, I didn’t win).
Would you take the discounted lump sum (about 50% of the ‘jackpot’), or would you take the 20 (or is it 25) yeat annuity?
Reasons to take lump sum:
Higher taxes in the future
Possible hyperinflation
Annuity might not pay out (how secure is it? how is it invested?)
Reasons to take annuity.
Possible long term deflation.
Any other thoughts?
Always take the lump sum now, who knows what can happen in the future. The disbursing authority might be long gone.
Always get the WHOLE story first…..
LOTTERY QUESTION
A husband says to his wife, “What would you do if I won the lottery?”
She says, “I would take half, then leave you.”
“Excellent”, he replies, “I won 12 bucks. Here’s $6, now get the f%@k out.”
LOL - good one. Here’s another.
Husband comes home all smiles: “Guess what honey? Pack your bagsI I won the lottery!”
Wife: “Awesome! Should I pack for the mountains or beach?”
Husband: “I don’t give a **** - just get the **** OUT!”
LOL!
I am sure that has happened for real to more than a few lotto winners.
If you’d like to read about what happens to the winners, I recommend Money for nothing : one man’s journey through the dark side of lottery millions by Edward Ugel.
Ugel worked for a company that handled the payouts. As for his clientele, let’s just say that he wasn’t dealing with the sharpest tools in the shed. (Which lends a grain of truth to the Italian saying about the lottery being a tax on imbeciles.)
..Always take the lump sum now, who knows what can happen in the future…
And why would you know what the future holds once you possess that lump sum?
—
Say you won maybe.. 20 million bucks. Gonna put it under a mattress?
deposit it in a bank? Too much for FDIC insurance coverage. So, you are more or less forced to invest it. Where and how?
Maybe invest it in property, diamonds, gold and fine art.. ?
Whatever scheme you manage to come up with, the future value and security of your winnings will be far less than certain.
Do what any good politician would do - take the money and run!
edge, politicians don’t take the money and run. They take the money, stay, take more money, get re-elected, take more money, etc. Until they do something bad having to do with sex. And even then…
Chefs Call Proposed New York Salt Ban ‘Absurd’
Thursday, 11 Mar 2010
MYFOXNY.COM - Some New York City chefs and restaurant owners are taking aim at a bill introduced in the New York Legislature that, if passed, would ban the use of salt in restaurant cooking.
“No owner or operator of a restaurant in this state shall use salt in any form in the preparation of any food for consumption by customers of such restaurant, including food prepared to be consumed on the premises of such restaurant or off of such premises,” the bill, A. 10129 , states in part.
The legislation, which Assemblyman Felix Ortiz , D-Brooklyn, introduced on March 5, would fine restaurants $1,000 for each violation.
“The consumer needs to make their own health choices. Just as doctors and the occasional visit to a hospital can’t truly control how a person chooses to maintain their health, neither can chefs nor the occasional visit to a restaurant,” said Jeff Nathan, the executive chef and co-owner of Abigael’s on Broadway. “Modifying trans fats and sodium intake needs to be home based for optimal health. Regulating restaurants will not solve this health issue.”
Okay, my bias is showing here (there’s a chef in the Slim family), but I think that this proposal’s going a wee bit too far.
A good chef will lightly salt the food. It’s the bad ones who don’t. And we consumers have the choice of steering our business toward the places with the good chefs.
You do realize that salt is a very basic ingredient in many foods - like bread, right? The bill, as written, would outlaw all such uses of salt.
What are you in for?
Salt.
Murderer!
I hope Mr. Ortiz doesn’t get wind of the dangers of DHMO, or there’s yet another thing we’ll have to do without.
Nothing like a good chemistry joke to liven up the afternoon.
As a reminder - here’s a nifty quote from Chief Bloomberg from two months ago, that kicked off this whole thing. I think Ortiz just went a little too far.
Salt - bad for you? Apparently he doesn’t realize that if people don’t get salt - they die.
“Too much salt” - perhaps. But that’s not what he said.
Most salt in this country is iodized and is often the only source of iodine that people get in their diet.
Secondly, most prepared foods are unpalatable without salt. (that’s a nice way of saying they taste like crap)
NYC. Reason umber 4593 why I would NEVER want to live there.
They want to outlaw something, outlaw corn syrup for gods sake!
I thunk the purpose of them FHA loans was to help all Americans become home owners, not to prop up home prices?
And if the bolded paragraph in the passage below does not epitomize a Ponzi scheme, then I don’t know what does…
* March 11, 2010, 9:54 AM ET
FHA Says Higher Down Payments Risks Double-Dip Price Decline
By Nick Timiraos
Responding to critics, officials of the Federal Housing Administration are set to warn in Congressional testimony Thursday that a double-dip decline in housing prices may result from even a slight increase in minimum down payments on FHA-backed loans.
An increase in down payments to 5%, from the current minimum 3.5%, would limit new FHA-backed loans by 40%, equivalent to 300,000 fewer home sales, according to testimony that FHA Commissioner David Stevens is set to deliver on Thursday.
“We share the goal of increasing equity in home purchase transactions, but determined after extensive evaluation that such a proposal would adversely impact the housing market recovery,” Mr. Stevens says in his testimony.
The FHA doesn’t make loans but instead insures lenders against losses, and the agency charges insurance premiums to borrowers for that backing. Critics of the agency say that loans with low down payments risk putting taxpayers on the hook for big losses if home prices tumble further. Defaults on loans insured by the agency over the past three years have mounted amid the economic downturn, depleting the agency’s reserves.
Any steps that would sharply restrict the number of borrowers who are eligible for FHA-backed loans, such as higher down payments, would also limit the new business that the FHA desperately needs to help offset rising losses.
“It’s that sort of rationale that got us into the problem in the first place, that we need to be chasing the borrowers to prop up our system,” says Rep. Scott Garrett (R., N.J). “That’s what got us here in the first place.”
…
Yup. Quite the catch-22 for the FHA, eh?
BTW - this same principle applies to many things.
1. Find a thing that poor people can’t afford.
2. Create ways to fund the ability for poor people to afford it, mainly via loose lending.
3. Result = artificial increase in demand for said thing.
4. Result = higher price of said thing; an artificial bubble.
5. Result = less people can afford said thing, due to the higher prices.
The result is 180 degrees counter to original intentions.
Another prime, and current, example is college tuition.
The above list BTW is actually a best-case scenario. Left off the list is what often also goes along with it (e.g. in the housing bubble):
4a. Result = big profits for the lenders.
6. Result = crash in prices.
7. Result = defaults.
8a. Result = bailouts for lenders, in the name of financial stability.
8b. Result = poor folks end up worse off than they were before - and the ensuing crash takes the middle class down with them.
Next up will be health care. The difference will be the lending will be done by proxy, to the Federal Government, rather than directly to the receivers of the service.
Your lower list shows why it is good for the government to understand the difference between long-lived household-owned assets (e.g. houses and stocks) and tomatoes. Artificially driving prices of long-lived assets above long-term sustainable levels by subsidizing their prices for low-income buyers can backfire badly for those who buy near the parabolic price bubble blowout stage of the cycle, particularly if the value of the subsidy (e.g. $8K) is small compared to the potential downside risk (lots more than $8K).
Another prime, and current, example is college tuition.
Have I got a website for you:
http://www.edububble.com/dpp/
The e-book’s pretty good too.
Most Americans have not even got the memo yet that there has never been a better time to rent, and the serial bottom callers are already declaring the party is over.
WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal
* March 3, 2010, 1:08 PM ET
Renters Poised to Lose Upper Hand
By Emily Peck
Renters–the ones with jobs anyway–have been having a good run the past year or so. But the party may be drawing to a close. The evidence, apartment operators are gearing up to build new rental units.
This year, real-estate investment trusts, or REITs, are expected to start close to $1 billion in new multifamily projects, according to real-estate research firm Green Street Advisors. While that still is less than average, it is a significant increase over the $100 million of development starts in 2009.
They’re betting that limited new supply, combined with an improving economy, will lead to ideal market conditions nationwide starting in 2011 or 2012, writes Dawn Wotapka in Wednesday’s WSJ. From then until 2015 apartment investment trusts may start raking in cash, says one analyst who looks at apartment REITS. Good news for operators, but less so for renters. As operators begin to make more money and feel more confident about the market, they’re likely to cut back on concession and to raise rents.
In January, apartment vacancies hit a 30-year high and landlords scrambled to entice renters, even in New York City, traditionally a tough town on renters.
But already in Manhattan the days of mega-concessions seem to be seem to wrapping up, at least in the most desirable neighborhoods. In New York, Equity Residential, which has buildings on the Upper West Side, Chelsea, Murray Hill , the Financial District and elsewhere, said it has stopped paying broker fees for certain unit types. In better times tenants pay that fee, typically one month’s rent.
…
“But already in Manhattan the days of mega-concessions seem to be seem to wrapping up, at least in the most desirable neighborhoods.”
Upper West Side = the United States? I don’t think so.
I’m pretty sure my current building and its sister building have just started to pay finders fees to outside people. At least there is a new place that finds people for apartments that has started to spam Craigs list with 5 or 6 ads in a row for the exact same apartment. Listings show up at 1 in the morning. Maybe they are in India?
Emily is my best friend’s wife, FWIW. Our first sons were born about the same time, so we’re going through all of this together. The comments section of that post are brutal!
Muggy, I went to the Comments section and my screen blurred the
“Go to most recent” with the “To report offensive comments” to make “Go to the most offensive comments.” Might be a good option for some blogs.
Hwy, I am open to suggestions on how to get rich if you have any.
Avoid falling knife real estate investments like the plague.
What if I view buying a house as means to put a roof over my family? Renting isn’t making me rich either.
This gets to the root of the problem of the logic of Hwy’s response: getting rich, and having a place to live, are two separate issues. See? Getting poor, and having a place to leave are better correlated, but I am in an entirely weird, grey area.
“What if I view buying a house as means to put a roof over my family?”
I suggest you start by asking yourself what kind of roof do you need to put over your family’s head? Once that is settled, consider whether it will be less expensive to rent the roof right now or to purchase it. If you decide to rent now, the next question to resolve is that of when and if it will ever work to your advantage to purchase it, and under what conditions that would be the case.
Given uncertainty about when housing prices have bottomed out and whether future housing price inflation will be low, medium or high, I fully realize I am asking you to do the impossible here, but this is what you should at least consider in the timing of a real estate investment.
Muggy it’s simple
Step 1 - Borrow 100 billion from the FED at 0% interest
Step 2 - Purchase Treasuries as the FED desires.
Step 3 - Sit back and collect a fat check for doing absolutely nothing.
But for some reason this takes “top talent” that requires enormous bonuses to keep around.
I am open to suggestions on how to get rich if you have any
Spend less than you earn… earn as much as you can… be willing to take calculated risks with your capital when the potential reward is worth the risk… maintain a sense of skepticism and ask “Cui bono” often.
The alternatives are few: inherit, marry up, or play the lottery…
And develop a clear personal philosophy on what it means to be “rich”, based on quality of life as well as $.
What it means to be rich to me, is what I have. A cool wife, two awesome kids, a job I like, and a lot of free time to wander.
and a lot of free time to wander.
…and fix stuff around your own house.
I look forward to saying “I told you so” to these greater fools in two decades, when they realize that the returns on their real estate investments were “less than expected.”
First-timers snap up 47% of homes
With tax credit ending, state figures may dip
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Thursday, March 11, 2010 at 12:09 a.m.
Nearly half of home purchases statewide last year went to first-time buyers, the highest since 1995, the California Association of Realtors reported yesterday. But its chief economist said first-timer dominance may dip a bit this year because of the pending end to the $8,000 federal homebuyer tax credits.
A survey of 15,000 association members conducted last summer showed that 47 percent of single-family resale purchases went to first-time buyers, up from 35.9 percent in 2008 and the highest since just more than 50 percent in 1995. The survey was not broken down by county or metro area.
The group’s chief economist, Leslie Appleton-Young, said the rise was due to falling prices, low mortgage rates and the tax credit. But when the credit ends this spring, she said popularity may wane among first-timers, although the proportion could still rise above 50 percent given how weak the more expensive end of the market continues to be.
“The top end is challenged by unrealistic pricing by sellers,” she said.
…
In a normal residential real estate market, don’t the percentages of buyers look something like this?
Investors (the “buy it to rent it out” crowd): 10-15%
First-timers: 20%
Mover-uppers: 65%
I’ve heard that, in addition to the out-of-proportion percentages of first-timers and investors, that the relative lack of mover-uppers is really weighing on the current real estate market.
We had an extraordinarily high share of first-timers last year. Hence I am expecting an extraordinarily low share of first-timers going forward, especially given that SD unemployment just ticked up to 11 pct and there are few jobs available.
There are no mover-uppers without first-timers, right? Did this last wave of FTs create MUs? If not, what happened? Did the FTs all buy new houses instead of used ones this time? Was the creation of MUs delayed, or is the connection broken?
“I look forward to saying “I told you so” to these greater fools in two decades”
Really? I think about Randy H. from Patrick a lot these days. Was all of the hassle worth it? (I believe he sold in 2004 and is still renting.)
“Was all of the hassle worth it?”
That is a question best answered at the individual household level, whether you are talking about the respective hassles of renting or owning a home.
I think “snapped-up” might be a little too enthusisatic - probably “were reluctantly lured into” would be more accurate.
I really hate that term “snapped up”. Every time I read it, a mental image of a stripper using one of her naughty bits to pick up a dollar off a table comes to mind.
Same with Plunge Protection Team. All I can think of is a toilet plunger with a big black rubber cup at the end of a long wooden stick. And folks like Paulson, Bernanke, Geithner, Greenspan, Summers, et al furiously plunging away at a clogged toilet.
“a mental image of a stripper using one of her naughty bits to pick up a dollar off a table comes to mind”
And you hate this?
“folks like Paulson, Bernanke, Geithner, Greenspan, Summers, et al furiously plunging away at a clogged toilet.”
And you hate this?
ROTLMAO, Muggy!
F, I fergot the F.
PS: It’s the grimy stage floor and money coming in contact with the naughty bits that bothers me.
“It’s the grimy stage floor and money coming in contact with the naughty bits that bothers me.”
Where is Faster Pussycat when you need someone to pile on?
Ya gotta develop a sense of humor so you can enjoy this stuff…
Obama presses China on currency in trade speech.
Mar 11, 2010
WASHINGTON (Reuters) - President Barack Obama pressed China on Thursday to move to a “more market-oriented exchange rate” in a speech where he laid out a plan to boost U.S. exports in the coming years.
“As I’ve said before, China moving to a more market-oriented exchange rate would make an essential contribution to that global rebalancing effort,” Obama said in the text of a speech.
“We all need to rebalance. Countries with external deficits need to save and export more. Countries with external surpluses need to boost consumption and domestic demand,” he said.
Obama’s rare comment about the currency comes as his administration faces a decision over whether to label China a
“currency manipulator” in a semiannual Treasury Department report due on April 15.
Such a decision would risk harming U.S.-China relations, which have already become tense over Obama’s meeting last month with the Tibetan spiritual leader, the Dalai Lama.
Good luck with that. This is like asking the playground bully to play nice. Ain’t gonna happen, China will do what’s good for China. If only our leaders had a backbone.
Hard work? No thanks! Meet ‘entitled to it all’ Generation Y
Daily Mail UK ~ 11th March 2010
They are the ‘entitled to it all’ generation to whom hard work is an alien concept.
Today’s young workers, it appears, believe they deserve jobs with big salaries, status and plenty of leisure time - without having to put in the hours.
A study spanning three decades concluded that those born in the late 1980s - the so-called ‘Generation Y’ - expect to ‘have their cake and eat it’.
Young workers see employment simply as a means for paying bills, according to a new study
Young workers see employment simply as a means for paying bills, according to a new study.
They were found to value leisure time far more highly than older members of the workforce and were much more likely to want a job with an easy pace and lots of holidays. They were also less likely to want to work overtime.
Generation Y are much more likely than previous generations to see work as simply a means of paying the bills.
And they saw work as less central to their lives and were more likely to agree that ‘work is just making a living’.
But they place great importance on salary and status.
In other words, said the researchers, the younger generation wants to ‘have their cake’ in big salaries and ‘eat it too’ by retaining a healthy work-life balance.
And they saw work as less central to their lives and were more likely to agree that ‘work is just making a living’.
Why expect anything more from a job when you are simply cannon fodder when its layoff time? When the corporation puts maximized profits before the welfare of its employees why should work be the center of your life?
I think that the Gen-Y crowd have simply seen through the BS of the notion that employees are ’stakeholders’.
“Generation Y are much more likely than previous generations to see work as simply a means of paying the bills.”
Having only been in the workforce for a few short years, most of them are all at the “cog” level instead of holding a postion where they’re influencing the direction their employer moves in. Give them another decade…one with opportunities for increased income and position, they’ll engage. I’m very impressed with the kids I work with. Most have their masters which mean their grades were high, and they express themselves well. They’re making peanuts right now but they still work hard and I only see a few cases of ignored responsibility.
They should just get their money the old-fashioned way. From Obama.
Life can be full of surprises.
Poverty, disease, and joblessness have a way of wrecking the most pleasant pipe-dreams.
Preach it, Daily Mail!
I’ve been reading a book called Strapped. It’s about how young people have a hard time getting ahead due to high student loan repayment burdens, the high costs of housing, health insurance, bearing and raising children, and transportation, the phases of the moon, being born at the “wrong” time, you get the point.
What’s really bonking me over the head is the college majors that a lot of these kids are choosing — French was used in one example. Another debt-slave’s story noted, “And then she went to art school…”
I was reading this book last evening while answering phones down at the KXCI community radio station. (It’s pledge drive time, people. Don’t make us come looking for you.)
And I was struck by the work ethic of those around me. Most of whom are, shall we say, older than the Generation Y crowd. And, even more shocking, but for the four staff people who were there to do things like handle the pledge processing, we were volunteers.
Around the station, there are volunteer deejays (in fact, most of them are volunteers), and some of them have been on the air for decades. You have to be very persistent about getting on the air in the first place.
It’s not enough to just take the deejay class. You have to be invited to go on one of the early morning (we’re talking 4 a.m. here, folks) spots and then you have to be good enough to be invited back. If you flub up the first time, being willing to work with the program director on improving your skills is a plus.
A lot of the young ‘uns don’t have this level of persistence. And it’s not just the deejays. I’ve met more than a few young musicians who think that KXCI will come looking for them. (No, bozos. You’ve got to tell us where your MySpace page is. Try dropping by the station with a CD and chat with the music director while you’re there. Get his e-mail addy and stay in touch with him. He’s a nice guy.)
Anyway, that’s my rant on youth and persistence.
A smart man once told me that the desire for a lot of money mixed with sloth was a recipe for fraud or criminal behavior.
In the least it’s a recipe for frustration and bitterness.
But on the bright side it also makes a great foundation for building a career in politics.
Or investment banking
You guys have heard me rant about investment bankers a lot, so I’m not a shill for the breed, but they aren’t actually lazy. Greedy, amoral, entitled? Sure. I’ll grant you all of those. But they do put in a lot of time at the office.
Yep ,the old easy money way path to greed gains is a form of being lazy IMHO and a lacking in patients to earn it the good old fashion
way.
I suspect that Gen Yers looked around at the previous couple of generations a deduced that there ain’t no loyalty on the part of employers anymore and figured why go the wrong way on a one way street. With “living wage’ manufacturing jobs all but gone, and temp employment the trend, why would the Gen Yers do it any other way.
(I’m a mid pack boomer and I think they have a valid point).
Right, they got their attitude from their environment, they weren’t “born” with it.
Yes, some of them might be overly entitled, but some are bright enough to see how corporations can exploit people in the name of “career advancement” and then toss them out like a used kleenex.
Unfortunately, “…work is just to make a living..” would be right, because modern business strategy is to NOT provide a path of advancement, improvement or promotion from with for your employees or pay lip service to it at best.
Yes, some companies still do, but mostly… not.
“[The national debt] is an abstraction, like the number of light years to the Andromeda Galaxy.” ~Doug Casey
Interesting from WSJ
Yeah, things are always the result of “bad government policy”.
But nobody can agree on what government policies are bad. Some of us think government policies that let the banksters go ape-$hit, and sink the Main Street economy in the process, is “bad government policy”.
Anybody checked “ceridian” “diesel”
Diesel consumption was way off in February ….due to the wether of course!
“Feb. foreclosure filings rise just 6% in U.S., fall 13% in Washington state”
http://seattletimes.nwsource.com/html/businesstechnology/2011312399_foreclosure11.html
And I have a neighbor family who just put their house up for sale. Within days they had an offer. They want to move into Seattle to be close to work. It is either 3/2/2 or 4/2/2 with a 2 car garage and a nice view. Backs up to a green belt. Prospective buyers are a couple with no kids - one is a teacher in the local school district.
Men’s Wearhouse Tumbles as Suit Demand Falls, Closing 100 Tuxedo Rental Stores.
03/11/2010 (MidnightTrader) — Men’s Wearhouse Inc.is down in morning trade Thursday, after it reporting a decline in fourth quarter revenue that failed to meet Wall Street’s expectations.
The Houston-based retailer of men’s clothing reported a net loss of $18.9 million.
Looking ahead to the first quarter, Men’s Wearhouse expects gross profit to rise in the low single-digit range.
The company said demand for suits fell sharply, and over 100 tuxedo rental stores are expected to close in 2010.
My wedding cost $1000 bucks mostly beer and food at the reception. Not one tux. My brother $100 bucks for breakfast at a greasy spoon (then off to Iraq). Why people pay for this garbage is beyond me. Nice part of his wedding was the picture at the JP that was under a sign reading felonies and misdomeanors.
My parents had a church wedding, and, if I’m recalling correctly, no reception. They got married in the city where they graduated from college, and that wasn’t the city where either side of the family hailed from. According to Mom, that proved to be a good way to keep troublesome relatives from attending the ceremony.
I knew a guy in the tux rental biz. He said that the lions share of the business is the high school prom.
I bet the days of the $30,000 HELOC funded wedding are pretty much over. The flasg weddings were just another example of people trying to prove how wealthy they were because their house had tripled in value.
Best wedding I ever went to was at NYC city hall then brunch in Little Italy.
Most weddings are potlatches. Ick.
U.S. Household Worth Rose at Slower Pace Last Quarter (Update2)
March 11 (Bloomberg) — Household wealth in the U.S. grew in the fourth quarter at a slower pace, limited by a drop in home values that indicates the recovery in consumer spending will take time to gain speed.
Net worth for households and non-profit groups rose by $700 billion to $54.2 trillion, marking a third consecutive gain, according to the Federal Reserve’s Flow of Funds report issued today in Washington. Wealth increased by $2.78 trillion in the third quarter.
American consumers cut borrowing at a record pace last year, the figures showed, in a bid to repair the damage from overextended balance sheets and the loss of wealth during the recession. The need to replenish savings combined with the loss of 8.4 million jobs means spending, the biggest part of the economy, will be restrained.
“We are still in the very, very embryonic stages of a recovery,” said Brian Bethune, chief financial economist at IHS Global Insight in Lexington, Massachusetts. “The patient is healing, but the credit markets are still in critical condition. We’re a long way away from normality.”
American consumers cut borrowing at a record pace last year, the figures showed, in a bid to repair the damage from overextended balance sheets and the loss of wealth during the recession.
Those naughty consumers! They might even start buying things with the money they have!
“The patient is healing, but the credit markets are still in critical condition. We’re a long way away from normality.”said Brian Bethune
I’m sure Brian’s idea of “normality” is where we were several years ago, not the new “normality” we are heading into.
Not so much a minor detail that unlike Federal Government, State and local governments are not allowed to run with deficits.
Nearly Half of Kansas City Schools to Close
Thursday, March 11, 2010
KANSAS CITY, Mo. — The Kansas City school board narrowly approved a plan Wednesday night to close nearly half the district’s schools in a desperate bid to avoid a potential bankruptcy.
The board voted 5-4 after parents and community leaders made final pleas to spare the schools even as the beleaguered district seeks to erase a projected $50 million budget shortfall. The approved plan calls for shuttering 29 of 61 schools — a striking amount even as public school closures rise nationwide while the recession eats away at academic budgets.
“The urban core has suffered white flight post-the 1954 U.S. Supreme Court decision Brown v. the Board of Education, blockbusting by the real estate industry, redlining by banks and other financial institutions, retail and grocery store abandonment,” Kansas City Councilwoman Sharon Sanders Brooks said to applause from a standing-room-only crowd of more than 200 people.
“And now the public education system is aiding and abetting in the economic demise of our school district,” she said. “It is shameful and sinful.”
Many school board members said the vote was difficult. An emotional Duane Kelly called it “the most painful vote” he has cast in 10 years on the board.
Under the approved plan, buildings will be shuttered before the next school year. Teachers at six other low-performing schools will be required to reapply for their jobs, and the district will sell its downtown central office. About 700 of the district’s 3,000 jobs — including 285 teachers — also are expected to be cut.
Sounds like a district with more bureaucrats than teachers.
Kansas City’s “district’s enrollment of fewer than 18,000 students is about half of what the schools had a decade ago and just a quarter of its peak in the late 1960s.”
I’m from KC and went to the KCMO schools. In the late 60’s and early 70’s a lot of my friends families moved to the suburbs specifically because of fear of school busing.
Seems like these guys were quite prescient.
HALF the schools?! They are in deep… trouble.
REDC Bulk Auction
http://tinyurl.com/ykv53bc
So does this mean that these bidders pay .10 or .20 on the dollar and then try to sell each property to us at .60 or so?
Is there any doubt about who Tim Geitner works for
BRUSSELS (AFP) – European officials on Thursday defended planned new EU legislation regulating high-end financial services from “protectionist” charges, amid anger from US Treasury chief Timothy Geithner.
Michel Barnier, European Commission financial services overlord received a letter from Geithner “regarding plans to regulate speculative funds and alternative funds,” commission spokesman Amadeu Altafaj told journalists.
A report in the Financial Times said Geithner’s letter warned against planned curbs on hedge and private equity funds that are held outside the EU, even if managers operate on its territory.
Altafaj said the legislation that will go before EU finance ministers for their approval on Tuesday consists of regulation that would “reinforce transparency and the responsibilities of key actors in these markets.
“What we are doing, we are doing because there are clear G20 guidelines,” he underlined, referring to the Group of 20 of leading world economies, which has emerged as a key decision-making body in recent months.
In the letter, Geithner said the draft European Union directive would impose tighter restrictions on investment funds, saying proposed new rules might damage US hedge funds, private equity groups and banks by curbing their ability to do business with Europe, the paper said.
“In the letter, Geithner said the draft European Union directive would impose tighter restrictions on investment funds, saying proposed new rules might damage US hedge funds, private equity groups and banks by curbing their ability to do business with Europe, the paper said.”
“Don’t c*ckblock God’s work!” said Geithner.
“Is there any doubt about who Tim Geitner works for”
Nope! And when his bosses at GS,JPM etc… Jerk his chain, he barks.
Greeks Strike Over Budget Cuts, Bonds, Stocks Decline (Update2)
March 11 (Bloomberg) — Greek hospitals, airports and schools were shut and police scuffled with protesters as unions staged the second general strike this year against government budget cuts to curb the European Union’s biggest deficit.
Greek bonds declined and stocks fell as the strike disrupted public services and forced the cancelation of all 479 flights from Athens International Airport. Bus and subway drivers, doctors, journalists and teachers walked off the jobs to protest 4.8 billion euros ($6.5 billion) of wage cuts and tax increases announced by Prime Minister George Papandreou March 3.
“The measures taken so far are unjust, demanding sacrifices from workers that aren’t being demanded from the employers, businessmen and bankers that created this crisis,” said Stathis Anestis, spokesman for the GSEE union. The union said 90% of the unions 2 million members adhered to the strike.
House bans earmarks to for-profit companies
Washington Post ~ March 11, 2010
Facing an election-year backlash over runaway spending and ethics scandals, House Democrats moved Wednesday to ban earmarks for private companies, sparking a war between the parties over which would embrace the most dramatic steps to change the way business is done in Washington.
Earmarks, which lawmakers use to direct federal money to specific projects, have long been a target of reformers seeking to limit spending abuses. Wednesday’s announcement is considered a way to block no-bid federal grants to private firms that can afford to hire well-connected lobbyists to plead their cases, and although it will not have a major impact on overall spending, Democrats hailed it as a key step in restoring trust in Congress.
“It ensures that for-profit companies no longer reap the rewards of congressional earmarks and limits the influence of lobbyists on members of Congress,” House Speaker Nancy Pelosi (D-Calif.) said, linking the move to earlier decisions to ban gifts from lobbyists and forbid privately financed travel.
Democrats made the move to bar earmarks for for-profit entities despite fierce resistance from many rank-and-file lawmakers who rely on them to spread federal money around their districts and consider them crucial to their political fortunes.
Facing an election-year backlash over runaway spending and ethics scandals, House Democrats…
They finally noticed!
..Democrats hailed it as a key step in restoring trust in Congress…
Heaven forbid that whatever the circumstances, we are ever so stupid as to trust Congress..
Something we can ALL agree on!
Smartphones will shake up paid content debate
ABU DHABI (Reuters) - Media companies longing to bring a paid-for culture to the Internet might just get what they want if they pay more attention to the smartphone revolution that is changing the way people access the Web.
Huge numbers now use mobile phones instead of desktop computers to get online — a development that has spawned whole new business models in China, the world’s biggest Internet market.
Paying to read content on the Web, an outlandish idea as recently as a year ago, is slowly but surely establishing itself as the next business model in the Western media mainstream, spearheaded by Rupert Murdoch’s News Corp (NWSA.O).
But meantime, sales of smartphones — part of a telecoms economy very different from the PC Web — are set to outpace sales of desktop computers by 2012, IT research firm Gartner said this week. Some believe it could be as early as this year.
And in China — which has more Internet users than any other nation — paid content is a non-starter, says Kai-Fu Lee, a former head of Microsoft’s (MSFT.O) and then Google’s (GOOG.O) China operations who recently quit to run his own company.
“Chinese consumers have a stronger conviction that things should be free, so efforts to charge for premium content have basically completely failed,” Lee said at the Abu Dhabi Media Summit this week.
“Paying to read content on the Web, an outlandish idea as recently as a year ago, is slowly but surely establishing itself as the next business model in the Western media mainstream, spearheaded by Rupert Murdoch’s News Corp (NWSA.O).”
Wrong. This is Rupert dreaming again. I’ve heard this for decades.
The model is, was and always will be that the crappy time wasting entertainment you want people to pay for will either be paid for by advertising (or some form of sponsorship) or nothing.
Pay per view is NOT the dominate economic model. Packages like cable, dish, Internet, cell phone… that’s the dominate system and will remain so.
I thought stuff like this was almost impossible to do, since the advent of the instant check swipers… Guess not.
Boston Blackie’s owners charged in $1.8M check fraud
March 11, 2010 SUN-TIMES MEDIA WIRE
Three Chicago men who own and operate a popular restaurant chain were charged Thursday with a check scheme that defrauded at least two banks out of more than $1.8 million.
The owners of Boston Blackie’s — Chris Giannis, 38, and his father Nick Giannis, 62, as well as restaurant manager Andy Bakopoulous, 38 — are charged with two counts each of felony theft, according to a Cook County State’s Attorney’s office release.
Chris Giannis has also been charged with two counts of being an organizer of a continuing financial crimes enterprise, a Class X felony, the release said.
Prosecutors say the men facilitated the scheme through the use of Internet wire transfers, electronic bill payments and electronic stop payment orders.
They allegedly engaged in a “check kiting” scheme — in which offenders write checks from banks where they have existing accounts with non-sufficient funds and then deposit the checks with another financial institution, withdrawing the funds before the checks clear. This ultimately leaves the financial institution that covered the checks the victim of theft.
According to prosecutors, two banks have been identified as the initial victims, Charter One and Washington Mutual. The scheme also involved other area banks including J.P. Morgan Chase, Broadway Bank, New Century Bank and Citizen’s Bank and Trust.
Charter One lost about $1.03 million between January and February 2009. Washington Mutual sustained losses of about $833,700 based on thefts that happened in September 2008, the release said.
Now in the past I’d say those thieves, but now I must consider is the enemy of my enemy my friend? and exactly who are the thieves?
Wow — the owners of Boston Blackie’s on the take. Ha.
Government may seek more authority to regulate vehicle safety Thursday March 11, 2010
WASHINGTON (AP) — Government vehicle safety regulators may seek greater authority to investigate defects in cars and trucks following Toyota’s recall of more than 8 million vehicles for safety problems.
David Strickland, head of the National Highway Traffic Safety Administration, said Thursday his agency will take a “hard look” at the power it has to set safety standards for automakers. Current authority, acquired in the 1960s and 1970s, may not be enough to oversee the technology used in modern vehicles, he said.
Strickland told a House panel that it is unclear whether the agency can regulate “in a way that allows the auto industry to build and sell safe products that the consumer wants to drive.”
Oh great ,and here I had the illusion that they were checking for safety in the car business .
So,finance has not been regulated for consumer protection . Food has not been properly regulated ,including dog food . Medical Pharmacy
business not given enough years to check for safety by let-up from the FDA ,causing the re-call of a number of big drugs after they killed to many . OK lets see illegal immigration not regulated or enforced for years . Oh,and that little matter about drywall from china . Guess they don’t check products allowed in the states .
I have had enough products fall apart on me ,or emit a toxic smell ,
or come apart in the sun ,or clothes fall apart ,to know that what we are getting is junk.Does anybody think that anything is being regulated and checked for safety very well these days ,including the money systems ? What about appliances that have a shot lifespan
now? Globalism without regulation is just peachy keen whether it be
money systems or products ,not to mention this little matter about how its affecting the job base in America. Monopolies not busted and
I guess you got the perfect system for going back to the Jungle days .
I have had enough products fall apart on me ,or emit a toxic smell ,
or come apart in the sun ,or clothes fall apart ,to know that what we are getting is junk.
It’s true, a lot of imported stuff nowadays is JUNK. It’s cheaper (in the short run) but junk.
You have problem with Corporate Communist Capitalism©®™, comrade?
It pays to be a Greek hair dresser.
Patchwork Pension Plan Adds to Greek Debt Woes
Vassil Donev/European Pressphoto Agency
A protester during a demonstration Thursday in Athens. As a consequence of bargains struck between strong unions and weak governments, Greece has promised early retirement to about 700,000 employees.
By LANDON THOMAS Jr.
Published: March 11, 2010
ATHENS — Vasia Veremi may be only 28, but as a hairdresser in Athens, she is keenly aware that, under a current law that treats her job as hazardous to her health, she has the right to retire with a full pension at age 50.
“I use a hundred different chemicals every day — dyes, ammonia, you name it,” she said. “You think there’s no risk in that?”
“People should be able to retire at a decent age,” Ms. Veremi added. “We are not made to live 150 years.”
Perhaps not, but that still makes it difficult to explain to outsiders why the Greek government has identified at least 580 job categories that are deemed to be hazardous enough to merit retiring early — at age 50 for women and 55 for men.
The law includes some predictably dangerous jobs like coal mining and bomb disposal. But it also covers positions like radio and television presenters who are thought to be at risk from the bacteria on their microphones and musicians playing wind instruments who must contend with gastric reflux as they puff and blow.
As a consequence of decades of bargains struck between strong unions and weak governments, Greece has promised early retirement to about 700,000 employees, or 14 percent of its work force, giving it one the lowest average retirement ages in Europe at 61.
…
Wow PB …..I thought life doled out a little wear and tear regardless of
what you did . Maybe people should change jobs every 5 years so you only wear out parts of the body for so long ,or your only exposed for so long ( just kidding) . I’m more concerned about safety hazards that aren’t transparent .
OK,so cars are to complicated to check ,financial systems have complicated
securities and to big to fall systems and no body can regulated or see those flaws or see it coming ….wow …just everything is just so complicated in this NEW AGE order of tricks and lack of transparency and enforcement .Everything just regulates itself I guess . Like the AAA
rated MBS’s ,the whole ball of wax is what ever has been crammed down the throat of the American people in the name of this so called progress and innovation .In my very humble opinion …your not getting value for the dollar ,and certainly not safety or enforcement of the rule of law .
But at least we have an honest, strong government that we can believe in and take great pride in paying for.
Self regulation is an engineering technique that becomes an instant oxymoron the moment you try to apply it to social systems.
You guys will love this: the girls at my wife’s school were asking her about being a mom… they all thought you automatically get WIC when you have a baby.
http://en.wikipedia.org/wiki/WIC
I had to look it up. Well, well, well, there’s all sorts of goodies out there I don’t know about. But it appears your wife’s students are already pretty well versed in this stuff. That’s scary, eh? Who needs school, when you got Uncle to take care of you? Just spoink out a kid.
* The Wall Street Journal
* ROI
* MARCH 12, 2010
How to Salvage Your Retirement
* By BRETT ARENDS
Is it too late to save your retirement?
For many, the answer is surely yes. News out this week shows that 29% of those who have already retired have saved nothing at all to support themselves, while only a third have saved at least $50,000.
To put this in context: A retirement account of $50,000 will provide a 65-year-old man with an annuity of just $4,000 a year.
Yet according to the latest annual retirement survey from the Employee Benefit Research Institute, a nonprofit think tank in Washington, two-thirds of those in retirement don’t even have that much set aside.
It’s true that many will still be okay. That’s because they will have a good benefit pension, or a lot of equity in their home, or both. Neither is counted in the survey, and both can be very important.
But neither pensions nor home values are what they once were. And many won’t even have them.
Overall, this is a pitiful state of affairs at the tail end of the biggest financial boom in history. Today’s retirees lived through the incredible bull market that began in 1982. Bonds as well as shares skyrocketed. Most of them should be rolling in money.
Instead they were relying on … what? Santa Claus?
…