Bits Bucket For March 30, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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My tax season haiku:
09 taxes fubar
Tax guy does his magic
XGS dodges bullet
Yay, GS!
Deduction missed last year
Fixed for 09 filing
Big cheque on its way.
In housing news, there was a condo development on Saint John’s (NB) waterfront that stalled for a year or so but it seems like it will be going ahead now. It’s been 5 years in the making. They’ll have a lovely view of a large cargo shed on the dock, and across the harbour, piles of scrap metal. (personally I think a working port is interesting to watch, but I suspect most of these condo dwellers will want a “pretty” port with cruise ships and boutiques).
maybe you’d like our new Mullan Heights condos across from the gravel pit and cement plant.
Or, you can enjoy “Swampy Maple Farms” (my name for it) townhouses which are nicely built between: an interstate-style road, a loud railroad line, and the airport. I think one side is bordered by a large stone shop, too. Oh, and yes - it is built in an old swamp. All of this can be yours for prices well into the $300’s for townhouses!
IRS Haiku slam!
Procrastinated
not much income but still owe?
Gore’s “invention,” yo.
social engineers love me
trailer purchase snags
big tax credit from fed scum
inverted haiku
too early for poetry
i’m an idiot
Kids are grown.
Exemptions gone.
Pay full rate.
Kids gone? Full rate way cheaper!!!!
Tim forgot to pay
But that is no big deal
for Secretaries
CPA’s bad news
You owe a ton of dollars
So see you next year
Husband’s back S S check
Was nice at time of receipt
Unintended tax
It’s tax time? i had forgot
gotta call bob and schedule
i love late files, YEAH!
Unemployed for months
1099 on the benefit
Happy with small return
Lucky you. I have not dodged the bullet. Might be a good year to hire a CPA, but then again my taxes are simpler with no house. However, having been on UE for 6 months, contracting a bit in between, paying COBRA (with the subsidy), then getting hired as a W-2 contractor makes it not-so-straightforward.
Sadly, even having paid estimated taxes, the tax-man still wants another pound of flesh out of me.
Sounds like my story. Except I have a 19 year old deduction/freeloader that I get a college tuition credit for. That, and I withheld a bunch extra, back in the good old days when I was an “employee”.
We’re having a massive pity-party at the house. Seems that her “soul-mate” (yeah, the guy she was going to be with “forever”) decided that he didn’t need to be anchored down after all, after he got a six month taste of college living.
Tried to warn her, but of course, I didn’t know what I was talking about.
Mine will be 14 in May. Cant understand why I wont let her solder her cell phone to her ear. She thinks she has all the questions in the universe answered. She is even getting mad at my wife and slamming doors. I told her if she slammed another door in my house while I’m home, I’ll put her head in it and repeat…
My wife has been warning them I am coming home. It’s always like this after every one year deployment, they forget about how daddy operates..they will get a reminder in about 20 days….
this seems to require a creative pronunciation for “XGS” that I cannot frame my mouth to utter.
thanks to DC tax
I can always itemize
fed refund for me!
Estimated paid, but
Still not enough
So Cobalt blue
My family grows
Therefore my tax burden shrinks
In my pants it stays
Saw the discussion in the Bits Bucket the other day regarding the higher-end homes not declining as much as the lower-end homes.
Many good points were made regarding the desirability of those areas and the extra resources available to wealthier households, and wanted to add another theory.
During the bubble, the lower-end homes increased the most (maybe 3-6X pre-bubble prices), while the move-up homes increased maybe 2-4X. Essentially, the higher-end homes have less distance to fall to get back to “normal” levels.
Additionally, many of the buyers in the mid to high/mid neighborhoods were using lots of cash from the sales of their starter homes. Some people were bringing in $200K-$400K from their previous homes. This down payment enabled them to have some cushion, and many tapped that “equity” from their down payment right before things were about to crash (as noted in the other thread, lots of wealthy people were anticipating a recession and prepared for it). They have cash to ride out a fairly prolonged period of unemployment. This also allowed them to sell without being foreclosed on or going through a short sale. The “distressed” numbers would naturally be smaller in these areas. It does NOT mean there is no distress…just that they can hold out longer than those with absolutely no money and no access to more credit.
When the credit bubble burst, it hit the 100% LTV homes first because those buyers had absolutely no resources (without access to more HELOCs and cash-out refis), so they defaulted early. When the govt saw how quickly the market was deteriorating, they started their foreclosure moratoriums and began crafting all the bailouts we’ve witnessed over the past couple of years.
We’ve been watching the RE market in Southern California like a hawk, and it was very obvious that the bust was rolling into the better neighborhoods right as the govt interventions started. In my opinion, the reason the better areas haven’t fallen yet is strictly due to govt intervention. They were able to hold out longer, giving the govt more time to “fix the foreclosure crisis.”
I don’t think it can last forever, but it might take a long time before we see the better areas get hit.
BTW, our target areas (higher-mid) now have the lowest prices we’ve seen so far, even though the lower-end areas have bounced. It is coming, IMHO.
Patience…
In my neck of the woods its been the other way around. The nicer, higher end homes have come down more than the starter homes. So a home that might have fetched 500K at the peak is now only worth 350K, while the 200K homes dropped to 175K. YMMV of course.
Then again “high level” price here == entry level in other places.
I agree. There is very little movement in luxury homes here unless there are steep discounts. Lower priced homes are selling fast.
I should add location seems the most important variable (e.g., exurbs doing much worse than nice intown neighborhoods). When it first started, it was true that lower priced homes were the first to fall, it just took a little longer for those in higher priced homes to run out of access to credit.
“There is very little movement in luxury homes here unless there are steep discounts. Lower priced homes are selling fast.”
That’s how it is around here too. Then again, it seems all they were building for the last ten years were large luxury homes and all sizes of townhouses. Builders were tearing down a fair number of smaller “starter” homes to build those 3,000+ sf homes. I’m not saying there is a shortage of smaller, lower priced homes, though nearly all of them are at least 25-30 years old.
That is interesting point I have not considered. We had the same thing happen here. Intown neighborhoods that used to be filled with small 1050’s - 1970’s ranches became McMansion infill projects - prices jumped from $200k for a ranch to $500k but marketed instead as the perfect site to build a “dream” home. I will have to consider the effect that had on overall affordable housing near the city.
Here in Loveland the “desireable” higher en property is lakefront, which is what has held up the best on the higher end while the “golf course” McMansions have not fared as well.
“…I’m not saying there is a shortage of smaller, lower priced homes, though nearly all of them are at least 25-30 years old.”
Yes, old - and poorly maintained, though here in Maryland you have the choices of:
- Grossly oversized and overpriced McMansions.
- Mid-sized, overpriced, normal houses (relatively uncommon.)
- Endless falling apart dumps that are old enough to not know what central air and driveways are… these are “cheap” but how cheap is a place that is in such bad shape?
In So Ca, a local community paper this morning, The Los Angeles Daily News, is reporting the median price is up. The article reads like bubblicious deja vu, circa 2005.
There is another home in my neighborhood for sale. He’s a PhD who is relocating to the east coast for work. It went on the market this past weekend. I’ll post an update when it sells.
The longer this drags on, the more I can see the bad guys totally winning.
As odd as it sounds, yes, it looks like we can have housing prices completely disconnected from salaries so long as: we have endless greater fools “buying” houses, endless government meddling to prop up prices and let banks value assets at imaginary numbers, and endless Bailouts to give home-moaners the illusion that buying an unaffordable place is fine since someday the government will bail you out.
I agree. And, people like to say how the unemployed won’t be able to stay in homes. Not true. I envision the government directly providing support to unemployed homeowners to make sure they can afford to keep their home while also reducing the principal balance. Face it, homeownership is the new protected class.
Like I said the other day, all these “programs” are just head fakes to give future FB’s the confidence to jump in. The foreclosure steamroller isn’t going to stop anytime soon.
Same here in the carolinas. A lot of 1.5 million dollar homes going for 700k. The highest price home in sc. just sold…some might have seen it on cnbc. For sale for 15 million just sold for around 6 million.
Was that an oceanfront home, Lane?
It on or near it…in hilton head.
I should proof read.
It was in hilton head. Not 100% if it was on the ocean I want to say it was. About all the focus was on the house and the loss.
Lane
“Then again “high level” price here == entry level in other places.”
What’s also interesting is that our median and average HH incomes here are close what they are in San Diego county, and yet we still have no shortage of foreclosures here.
Patience is right. In the bay area the worst areas crashed back hard… back to cashflow positive for investors. Now they’re selling. I’ve talked to several agents who talk about how the bottom end having picked up means the top end will follow suite and you gotta get in! When I point out that the bottom end only bounced back after it became cashflow positive, and I don’t expect the top end to bounce back before it becomes cashflow positive, they blink in confusion, and then try and tell me how I’m wrong. Apparently the high end is a magical place where you only fall 20%, not 50%.
When my wife and I bought our place at about 32% off asking, everybody in the neighborhood and all the real estate leeches (realtors, appraisers, etc) were flabbergasted at the price we got. When I said we overpaid, they clearly thought I was an idiot. About six months later, and now neighbors are saying not to worry, that prices will come back up. Our ‘mind blowing’ deal of six months ago is now accepted as a real comp, and a high one at that.
I just shake my head.
The other difference in the high end is that such buyers are forced into using realistic financing (not GSE freebies).
For jumbo loans, expect 30% down, and rates at least 100-150bps above the Fannie/Freddie freebies. This is distinctly different than the low end, which has pretty much free money available.
The high end will be a slow grind down, as I don’t see the jumbo financing market improving anytime soon.
Like the OP mentioned above, our “high end” is very different from a lot of areas around the country.
At the peak, “entry level” homes were selling in the high $400K-$500K range, while the mid-level was in the $650K-$850K range. The very high end — La Jolla, Rancho Santa Fe, etc. — was never really on our radar, as these were selling for million*s* of dollars. Those homes might have dropped somewhat more.
For me, the higher-end doesn’t mean “luxury” (million-dollar+), but the ones that were selling in the $700K-$900K range at the peak. They are still selling for very close to peak prices.
The bottom end has bounced because of the positivie cash flow, as mentioned above.
LOL! California! The home of the $800,000 plain jane house and bankrupt state government.
I high tailed it out of there in 1995 and the only question I ask myself is “why did I wait so long?”
I’ve been watching, too. The high end’s gonna get hit. Things are starting to sit.
Geithner says commercial real estate loans will continue to be problem but can be managed.
WASHINGTON (AP) — Mounting losses from commercial real estate loans will continue to be a problem for the U.S. and especially smaller banks, but it can be managed, Treasury Secretary Timothy Geithner said Monday.
“Commercial real estate’s still going to be a problem for the country,” Geithner said in an interview with CNBC. “But we can manage through this process.”
Geithner also said the Treasury Department’s announcement that it will begin selling the stake it owns in Citigroup Inc., which could net about $7.5 billion to the government, shows “how far we’ve come” in exiting from the financial bailout program.
The government received 7.7 billion shares of No. 3 U.S. bank Citigroup in exchange for $25 billion of the total $45 billion it gave the financial behemoth during the 2008 credit crisis. The Treasury Department said Monday it will sell the shares over the course of this year, depending on market conditions.
Phew. It’s contained. Glad to hear that, I was a little worried there for a second.
“Commercial real estate’s still going to be a problem for the country,” Geithner said…
possible “Understatement of the year” candidate for ‘10
A closely watched pot never boils over.
Score!!! Professor Bear’s grandma’s meme goes mainstream.
MARKET STRATEGY
A watched pot
If only they would stop rooting so hard for a stock-market correction, says Woody Dorsey of Market Semiotics, they might see one’s just around bend
You also dont want to fall asleep on the couch and be woken up by the fire alarm. Happened to me last week.
Hope you didn’t do any damage to your home.
I generally set the timer on my microwave to 40 mintues or something just so I know to go clean up in the kitchen.
No damage. It was a pot of spaghetti. I fell asleep watching tv on the couch, and the alarm went off once the water evaporated and the spaghetti began to burn. I did have to throw the pot out though. Investing in a timer is a good idea.
Glad to hear it was only the spaghetti and pot that burned, and that you were safe, Natalie.
“You also dont want to fall asleep on the couch and be woken up by the fire alarm. Happened to me last week.”
Better to be woken up by the fire alarm, than to have smoke, flames and heat disturb your slumber. Glad you are OK, Natalie!
I have also noticed that having smoke detectors in your home equals a chorus of annoying chirping noises as the batteries installed at one time, all start going dead at roughly the same time down the road.
REITs have been outperforming the last few weeks, especially ones not on life support. I sold my interests about a month ago, but appear to have missed a 10% further run up. I don’t get it. The rational appears to be that the decent REITs are able to increase their portfolio by buying properties at fire sales so their long term health looks stronger. I am not convinced.
Natalie:
Whats up with General Growth? its was BK under $1 now at $16 everyone wants it?
Last time I looked into it GGP was close to getting an agreement on a bankruptcy exit plan. There are also several take over plans in place. I do not know if anything more has happened in the last few days.
If you are a REIT leveraged at 40-50% of real value, and have cash flow of 2x your interest cost, where is the risk of crash?
I think people are tired of earning 0% in money markets, and are seeing that some of these REITs are not going to fall off the end of the earth. On the other side, REITs are a very good hedge against inflation, which most people expect is on its way.
I’m still long all my REIT bets from late 2008/early 2009. I’ll stick with it for a bit longer.
Aren’t REITS mostly in commercial RE? sounds risky.
“Geithner says commercial real estate loans will continue to be problem but can be managed”….with our printing press.
Did Turbo Taxcheat Timmy (Geithner) pay his taxes this year?
I still have doubts about TT Timmy’s “cheating.” Wasn’t he only out for about $27K? I mean, that’s chump change, barely worth cheating over.
I’m pretty sure he cheated: taxes are for the little people.
That, and I have a hard time having any sympathy for somebody who makes so much money via financial games and debasing our currency that to them $27,000 is a rounding error.
Spurt of Home Buying as End of Tax Credit Looms
The New York Times
DES MOINES — Nine hundred days after putting their house on the market, Andrew and Jane Palestini were beginning to think they might be stuck in Iowa forever.
The Palestinis put their home in Clive, Iowa, on the market in September 2007. “My feeling was it would never be a problem selling,” Jane Palestini said.
The looming expiration of the government’s housing tax credit pushed them into action. They dropped their price by an additional $10,000, to $235,000. Somewhat to their shock, a buyer emerged. The house is now under contract.
“I can’t feel happy,” said Mr. Palestini, a retired administrative law judge with the Social Security Administration. “Just relieved.”
After several disastrous months for home sales across the country, when volume dropped by 23 percent, the pace appears to be picking up again. The number of Des Moines homes under contract in February rose by a third from the January level. The number of pending contracts jumped 10 percent in Naples, Fla., 14 percent in Houston and 21 percent in Portland, Ore.
..The looming expiration of the government’s housing tax credit pushed them into action. They dropped their price by an additional $10,000…
i tell ya.. The effect a “looming” end to something has on people should be taken advantage of.
Time is running out! Act now before it’s too late..
There should be a tax credit once a month, or perhaps every 60 days.
To qualify, a deal must be signed in the first 5 working days. The slack time will increase anxiety on both sides.
“There should be a tax credit once a month, or perhaps every 60 days.
To qualify, a deal must be signed in the first 5 working days. The slack time will increase anxiety on both sides.”
Haha! Works for retail. Even seen Kohl’s on a sale weekend, an event that seems to be scheduled every few weeks? You’d think the shoppers were preparing for Armageddon and would never have the opportunity to buy Keds or a Keurig again.
Our local Kohl’s seems pretty sedate on the rare ocassion when I go in. Often just one cash register is open. I’m surprised they haven’t closed the place yet.
Given how high the markups are ($50+ for a shower curtain not to mention now you need a liner and a shell??) they don’t need to sell much to stay in business.
And their profit margins are calculated on planned sale prices, not the tag price.
That does seem to be the Khol’s model: sell things at absurd prices, and then put everything on sale most of the time.
Boscov’s also did that… it didn’t work too well for them…
LOL! Kohls always seem sto be on sale. I already know that if the item I want isn’t on sale that all I need to do is wait.
Still, the traffic level at our local store, even on weekends, is close to non-existant.
or khakis
Hee! Hee!
My wife got a Keurig about a month ago. I thought it was a novelty item when I first laid eyes on it. I have since learned to love the darned thing.
Be one of the first 60 callers and receive a free Sham-Wow storage baggie!
The range, the expression, the dignity of the Sham Wow guy. My favorite infomercial person of all time.
Roidy
And if you order before midnite tonite, you get _____.
You’ve heard the slap chop remix thing by the DJ guy on Youtube I hope. It’s addictive. The Billy Mays one is sad.
There should be an announced expiration date once a month to some government subsidy deal, with an ‘unexpected’ renewal announced each month when it is scheduled to expire.
No forethought, no interviews with non-biased economists, no rational thought given to the question: what happens when the credit expires?
Forget that. The broader question should be: What happened to journalism?
Ratings
“infosnacking”
political agendas by media owners
political agendas by advertisers long articles “too hard” [/Barbie math-is-hard voice]
dead trees
it went the way of the Titanic—down, down, down.
At least there’s no talk of extending/expanding said credit. (is there?) Perhaps the “$15K for everyone for ever” folk will speak up?
CA just dipped into its “reserves” to create a $10K home buyer tax credit. Now they are $20 bn + the cost of the home buyer credit program in the hole. Perhaps the thinking is that the drop in home values that would occur without creating the $10K credit would inflict more damage on the tax base than the cost of providing the credit?
Seems analogous to trying to avoid a fight with a bully by pushing him out of the way.
PB,
The last Ca $10K was spread over three years, and the difference of the credit per yr $3,333.33 less your state tax liability isn’t sent to you in a rebate check. It evaporates.
When I sent an email to the FTB, they replied they have no control over the external media coverage. (Since when? What a load of horse….)
PB,
Also, the last Ca Homebuying Credit was 5% of the purchase price, with a cap of $10K. Most folks I know don’t owe the state anywhere near that kind of dough. It’s such a sham. No one does the math, I guess.
At least with the Fed rebate, you get the difference in a rebate check.
“Seems analogous to trying to avoid a fight with a bully by pushing him out of the way.”
I did that when I was in eighth grade. For added effect, I did it in the cafeteria, in plain view of teachers.
The guy never bugged me again.
Well - yeah OK, bad analogy. In this case the bully isn’t actually a wimp on the inside. He really will crush you if you mess with him.
I anticipate, if the tax credit goes away, that the months following the removal of the credit will be the slowest home sales months in history. The Fed is also ending the MTG purchase program, which should push rates up a bit, and a tremendous amount of demand has been pulled forward over the past 1-2 years by the “free” money given to the buyers. It’s got to fall off a cliff after the removal of the credit..
I bet they extend it again.Extend and pretend.
tremendous amount of demand has been pulled forward over the past 1-2 years by the “free” money
On top of the 5-6 years of demand that was already pulled forward in this disaster of an industry.
Don’t worry - it won’t expire.
I predict endless housing (price) subsidies until the bottom falls out of the whole economy.
Then, they’ll say, “who could have knowed?”
We have a slew of houses in our area of S.C. that have been on and off the market for anywhere from a year to three. I spoke with a fellow some months ago that has had his house on the market for over two years. Will not drop the price, says he’ll sit on it, needs his price to move ‘up’ to a 4 bedroom house. He was certain the market for houses would turn around soon.
What a moron…maybe if he took an inventory of his stuff there is probably a bedroom full he could sell or donate..and walla and extra room. Amazing no one thinks that way anymore.
house down the street from me finally sold…at 1.1 million, down from original asking price of 2 million…
No kiddding! Sold signs everywhere. Homes selling in days. People talking RE ’cause they’re buying everywhere I go.
Our leaders may treat us like sheep cuz most of our compadres seldom disappoint.
(I mean no malice to the recent buyers here by the above comment. I know and respect the fact you guys have done your homework. This is a response to the burst of activity seen locally. Where were these people all winter when these homes sat and sat? It’s like they’re afraid they might be priced out forever.)
Sales are still slow out here in Larimer County. No too many for sale signs in the hood yet, but I did see the first “under contract” sign during the daily dog walk.
In Colorado
I guess having a 4 legged family member gets you out in the neighborhood. Knowing you, you also carry a plastic bag and a pick up tool. The negative side of being a pet owner is they don’t get potty trained, educated, and move out. But they are lovable creatures, none the less.
They have short lifespans, so they do kinda move on at about the same time as the kid would.
Good point, oxide. My last dog lasted almost 17 years. He was a wonderful friend and family member. A German Shepherd mix .
They do have short life spans. “Wolfie” (Wolfgang), our german shepherd, is 5 going on 6. I can already see the tell tale signs of middle age creeping up on him: slight weight gain, he’s a bit more mellow now, etc. Probably 5 more years and he’ll be gone. He will definitely be missed.
The negative side of being a pet owner is they don’t get potty trained, educated, and move out. But they are lovable creatures, none the less.
Not to mention the negative effects that some owners seem to enjoy inflicting on their neighbors. Like treating the neighbors to multi-hour barkathons. (Keep the blasted dog inside the house, people! Or, if that’s too hard, don’t have a dog.)
The upside to pets is that you can legally leave them home alone and no college expenses.
But they don’t move home again when they find they cannot support themselves
Spokaneman
Yup, I’ve never heard about a “boomerang” dog, but kids, for sure. That’s when you change the locks or move away
Az Slim
Barkathons are just so uncool. There were days I wanted to apply “euthansia” on my a-hole neighbors. Going away and leaving the dog in the yard barking for days & nights. The poor thing was lonely.
In Colorado
I’ve had 3 German Shepherd dogs in my life, and they all lived 12+ years. Great dispositions. They live pretty long for a medium to large size breed (depending). We have pets right now.
no pets
Barkathons are just so uncool. There were days I wanted to apply “euthansia” on my a-hole neighbors. Going away and leaving the dog in the yard barking for days & nights. The poor thing was lonely.
Thanks, wipeout. You’re not alone in thinking such thoughts. Inflicting such pain on a lonely dog, and, by extension, on one’s neighbors is the epitome of antisocial behavior. Read all about it at BarkingDogs.net.
Carrie,
Based on the most recent NY REaltLiars data(feb), Onondaga County sales are down. See for yourself. Flat and negative numbers.
http://www.nysar.com/content/upload/AssetMgmt/pdfs/monthsales.pdf
I’m sorry but I’m skeptical.
Cause there’s no inventory exeter. There’s uber high stuff, there’s 2 bedroom low stuff and rental area fixers where the bullies get off the bus, there’s middle stuff if you’re into do it yourself fix up. And that’s it. Course I’m looking at a single school district. Can you zero in on those numbers? Numbers don’t tell the whole story. Sometimes you need feet on the ground. Unless you’re into a zillow online purchase. Because you know exeter I really don’t care what’s going on in Lysander or Tully or East Syracuse. I only care about where I want to buy.
Also those numbers don’t show what’s happened the last 3 weeks now do they?
No they do not. I can appreciate the nuance but in the end I think it is dollar volume that tells the broad story and that we don’t have access to.
It is spring time. We have been through this three (or four/five depending on your locale) times now. There will be a seasonal bounce and it will be spun as a recovery. Nothing new, nothing new at all.
Sales will pick up after the Super Bowl.
Oh, wait…
Sales will pick up after March Madness.
Sales will pick up after the US Open.
Sales will pick up after they slow down.
And the truth is sales will pick up when prices fall.
Again, in the spring home buying increases and in the fall it decreases.
And has since the dawn of time.
Payback Time
State Debt Woes Grow Too Big to Camouflage ~NYT ~ 3-29-10
California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink — budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay.
And states are responding in sometimes desperate ways, raising concerns that they, too, could face a debt crisis.
New Hampshire was recently ordered by its State Supreme Court to put back $110 million that it took from a medical malpractice insurance pool to balance its budget. Colorado tried, so far unsuccessfully, to grab a $500 million surplus from Pinnacol Assurance, a state workers’ compensation insurer that was privatized in 2002. It wanted the money for its university system and seems likely to get a lesser amount, perhaps $200 million.
Connecticut has tried to issue its own accounting rules. Hawaii has inaugurated a four-day school week. California accelerated its corporate income tax this year, making companies pay 70 percent of their 2010 taxes by June 15. And many states have balanced their budgets with federal health care dollars that Congress has not yet appropriated.
United States Federal, State, and Local Government Spending
Fiscal Year 2006
Overall government spending
Federal, State, Local $4,704.1 (billion)
Spending by major government function:
Education $900.8 (billions)
Health Care $783.8 ”
Pensions $747.1 ”
Defense $622.2 ”
Welfare $411.4
Interest $312.3
——
Assuming that’s representative of the current year, all I see is essential government spending. We cannot survive with less of any of it. There is nothing to cut.
Please tell me you’re being facetious.
Since i’m not gonna hook any keepers in this pond anyway.. yeah.. I am.
I agree. The politicians keep the fable of waste, fraud, and abuse going, but the reality is these items are a rounding error.
Where do we cut? The only cut I see would be interest if we could pay down the debt.
Oh wait! We tried that 10 years ago and cut taxes instead.
Roidy
Like so many FBs waiting for house prices to miraculously rebound, these state/local pols are just positive that their revenue streams will quickly swell again.
Exactly. I’d just like to know what kinds of tricks Connecticut has tried to turn. Sounds interesting.
And was Goldman Sachs involved in helping them come up with new accounting rules while secretly betting against them on the side?
California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink — budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay.
Derivatives to “plug holes” = TNT with fuse thrown over the wall
Public Pensions = 50-ton steam roller marching onward
Two totally different mechanisms; same result: flattening.
It ain’t over till it’s over, which sure ain’t yet.
“Hawaii has inaugurated a four-day school week.”
Oh, to be a Hawaiian kid right now!
I’d be willing to bet that the same amount of material can be covered in four days. I don’t know about the other people here, but I can recall a lot of time-filling from my school days.
I dunno there slim. We seemed to have plenty of material. A good bit of time was spent working on problems. If anything, seemed like we could use more classes.
Sad thing for me to see was shop classes ending. Always felt those were some of the best classes to learn stuff.
Back in junior high, the girls weren’t allowed to take shop. It was said to be unladylike. Or maybe they thought that proficiency with power tools would turn us into women who only loved other women. Or something like that.
Mind you, this was the same junior high that employed a gym teacher who, shall we say, was a woman with a preference. And more than a few of my classmates felt uneasy about having to shower after gym class. Reason: This particular teacher was very interested in how thoroughly the girls had showered.
Slim, you should have taken shop anyway and you never would have busted that faucet in your shower.
The shower faucet was easy to fix, thanks to the plumbing classes I took at the local community college. (The original problem was that the faucet was crooked, and that was due to a bent stem. Lord knows how that happened. But the replacement stem is perpendicular to the wall, the new faucet handle is too, and that’s the goal.)
As for my ribs, well, they took longer to heal. My bad for leaning against the side of the tub instead of working while seated inside the tub. Or padding the side of the tub with the bathmat or towel. Oh, well. Live and learn.
Of course there is no cut in pay for the staff….
Actually, I think they went back to five days a week for the rest of the school year.
I had friends in the Air Force that were stationed in Hawaii a few years ago. No base school and the public schools were so bad they sent their kids to a Catholic school at great expense. (Not something agnostics do casually.)
I had the same experience growing up. Only the off base school was Montgomery, Alabama circa 1971.
Some of you may know the significance of that time.
“pay 70 percent of their 2010 taxes by June 15″
So the expectation is that a company can accurately predict how much its income will be for the year less than half of the way through. Absurd!
Underestimate and there is a penalty. Overestimate and they get to take their sweet time refunding it. What a racket.
M&I extends foreclosure moratorium to June 30
The Business Journal of Milwaukee
Marshall & Ilsley Corp. said it has again extended its foreclosure moratorium, this time for 90 days through June 30.
Milwaukee-based M&I (NYSE: MI) initially announced its moratorium on Dec. 18, 2008, and has been extending it since then. The moratorium is on all owner-occupied residential loans for customers who agree to work in good faith to reach a repayment agreement, M&I said.
M&I’s runs assistance programs for potentially distressed homeowners the bank identifies in advance and offers assistance. The bank also offers a foreclosure abatement program that includes refinancing options such as term extensions and reduced rates that can be used to reduce monthly payments.
Marshall & Ilsley has $57.2 billion in assets and is the largest Wisconsin-based bank. It also operates in Arizona; Indianapolis; Florida; Kansas City; Minneapolis/St. Paul; Duluth, Minn.; St. Louis and Las Vegas.
Seeing where M&I operates, no wonder it has had a foreclosure moratorium on the books for over 15 months. If it were to actually realize some of its losses it would soon be just another name on the Bank Failure Friday (BFF) report.
GOP spent thousands on luxury jets, adult club
The Republican National Committee spent tens of thousands of dollars last month on luxury jets, posh hotels and other high-flying expenses, according to new Federal Election Commission filings, including nearly $2,000 for “meals” at Voyeur West Hollywood, a nightclub featuring topless dancers simulating lesbian sex.
——————
How Christian of the RNC! I bet the religious left is very proud of them!!!
Instead of deriding R-cans for their unChristian-like behavior, why not compliment them for their obvious diversity?
D-rat credo: Diversity is good.
They were obviously on a fact-finding mission of some sort.
And don’t forget the “Christian” militias who are nothing more than terrorists.
So typical of the GOP….. incite incite incite the freakish fringe and then have the audacity to say “how’d that happen” when it blows up.
Why does the GOP support terrrorism? They must hate america.
…they hate our freedom.
That’s the one thing I agree with you on. Believe it or not, I like Pres. Obama far more than Pres. Bush.
On the one hand we have socialism plus personal freedoms. On the other hand we had socialism and religious dogma invading our private lives.
We have more freedoms with Barack Obama as President.
Please name a piece of recent legislation forcing new religious dogma in our lives. I hear a lot of talk of this, but am not familiar with any. I want ammunition.
Thanks.
Recent legislation may be hard to find since so many Repubs. got the boot.
The examples are myriad.
Erecting the ten commandments in public places or the Texas state school board (dominated by repubs.) deciding to buy textbooks that skip over Thomas Jefferson but give specific references to their “intelligent design” incarnation of creationism.
Some repubs. are like peter schiff or ron paul, but it seems that the wingnuts have control of the party. Even though there is an absence of “recent legislation” their rhetoric is enough to get Independent voters to keep sending democrats back to washington.
that’s why they’re the new whig party.
Even though there is an absence of “recent legislation” their rhetoric is enough to get Independent voters to keep sending democrats back to washington.
that’s why they’re the new whig party.
Count me as one of those indie voters with a decided preference for continuing to send the Dems back to DC. Not that I care for their working families rhetoric, which, as a lifelong single person, I find very exclusionary. And don’t get me started on the Dems’ softness on illegal immigration.
But, these things not withstanding, the Repub rhetoric scares me.
I don’t know about you - but my life is controlled by actual laws, not rhetoric.
So again - show me the legislation.
Also since we’re talking presidential administrations here - that means national legislation, not some statue some guy in Texas or Alabama erected, or something done by some podunk local or even state school board. National legislation.
(last post responding to seenitall)
Just because they weren’t able to promulgate law somehow makes their agenda less threatening to individual freedom?
Spare us.
Spare me the stupid “spare me”.
Sorry, but “agenda” and “rhetoric” - things that are very subjective and without enforcement - don’t remove freedom. Laws - things that are not subjective and are enforced - do.
Here - I’ll give some tips.
1962 Engle vs. Vitate - outlawed school-sponsored prayer
1963 Abington School District vs. Schempp - outlawed school-led Bible reading
1973 Roe vs. Wade - legalized abortions
These are fairly recent specific things (off the top of my head - there are others I’m sure) that swung the pendulum away from religious dogma. I’m looking for specific things like this that swung the pendulum back the other way - towards religious dogma - during the Bush era.
Ya know….. you seem to have a habit of twisting the words and intent of others into something to suit whatever your motive is at the moment. I said “threat” to individual freedoms. A *reasonable* person without an ideological motive would assess the facts as they are. In this case, the “religious” right agenda and rhetoric which drive the efforts to pass legislation limiting personal freedom.
Clearly your ideological motives got in the way of the assessement.
some famous actor lib made a comment that there should be laws to imprison folks speaking lies about chavez.
that’s the kinda freedom i want.
some famous actor con made a comment that there should be laws to imprison folks speaking lies about bush.
See how that works?
Please name a piece of recent legislation forcing new religious dogma in our lives. I hear a lot of talk of this, but am not familiar with any. I want ammunition.
Stem cell research
Abortion limits
Laws precluding previously allowed same-sex marriage
Exceptions to hate crimes law for religious offenders against gays
“In God we Trust” on money (recently reaffirmed)
recent
…Oh, and Bush’s parting gift - Allowing health care providers to refuse to provide legal care on the basis of “moral objections”
Stem cell research
The acts that Bush vetoed were to provide new federal funding for research, thus vetoing them is not introducing anything new; especially not “invading our private lives”.
Abortion limits
Specifically?
Note that illegality of partial-birth abortions was done pre-Bush.
Also - this of course is very subjective. For many people abortion itself is an invasion of private lives, thus restrictions on abortion are in fact lessening invasion of private lives.
Laws precluding previously allowed same-sex marriage
Specifically (national laws/rulings)? All I see is the Supreme Court’s Lawrence vs. Texas ruling, which struck down a Texas sodomy law. So - this would be moving in the other direction.
Exceptions to hate crimes law for religious offenders against gays
Specifically? I can find none during Bush’s tenure. All I see are various changes stiffening hate crimes legislation in the 1990’s, and the 2009 Matthew Shepard Act, also expanding hate crimes’ punitive force. Also I’m curious as to how one would consider this to be an invasion of our private lives.
“In God we Trust” on money (recently reaffirmed)
No change made. (Again - curious as to how one would consider this an invasion of our private lives - let alone a new one.)
Sorry - no case made. Yet, at least.
Allowing health care providers to refuse to provide legal care on the basis of “moral objections”
A. It wasn’t with respect to actually providing legal care - it was with respect to referring patients to abortion providers.
B. This is forcing dogma into our private lives how? Rather it’s allowing one to follow ones own beliefs, which is exactly the opposite of forcing dogma, and what was exactly intended by the constitution.
How about this?
White House Office of Faith-Based and Neighborhood Partnerships
From wikipedia
The White House Office of Faith-Based and Neighborhood Partnerships,[1] formerly the White House Office of Faith-Based and Community Initiatives (OFBCI) is an office within the White House Office that is part of the Executive Office of the President of the United States.
Contents
OFBCI was established by President George W. Bush through executive order[2] on January 29, 2001, representing one of the key domestic policies of Bush’s campaign promise of “compassionate conservatism.” The initiative sought to strengthen faith-based and community organizations and expand their capacity to provide federally-funded social services, with the idea having been that these groups were well-situated to meet the needs of local individuals. As Texas governor, Bush had used the “Charitable Choice” provisions of the 1996 welfare reform (which allowed “faith-based” entities to compete for government contracts to deliver social services) to support the work of faith-based groups in Texas.
Critics of the OFBCI, including Americans United for Separation of Church and State and the American Civil Liberties Union, assert that it violated the Establishment Clause by using tax money to fund religion.
For fiscal year 2005, more than $2.2 billion in competitive social service grants were awarded to faith-based organizations. Between fiscal years 2003 and 2005, the total dollar amount of all grants awarded to FBOs increased by 21 percent (GAO 2006:43[3]).
I notice you left out the next paragraph:
Safeguards on faith-based organizations
Faith-based organizations are eligible to participate in federally administered social service programs to the same degree as any other group, although certain restrictions on FBOs that accept government funding have been created by the White House to protect separation of church and state.
* They may not use direct government funds to support inherently religious activities such as prayer, worship, religious instruction, or proselytization.
* Any inherently religious activities that the organizations may offer must be offered separately in time or location from services that receive federal assistance.
* FBOs cannot discriminate on the basis of religion when providing services (GAO 2006:13[3]).
Definitely an increase in funding of organizations that have religious roots (which I don’t agree with) - but again, not forcing religious dogma into our private lives.
You guys can try all you want, but you’ll find nary a shred of evidence, if any, of any actions or movement of government in the past 40 years or so towards forcing religious dogma on the people. Rather the trend has fairly consistently been the opposite - forcing as much religion as possible out of the people.
Well, aside from the continued Bailouts and the huge Obama-care bill that’ll be enforced by the IRS, yes, this is true considering all the other things The Prophet of Change has done for us… which includes… um… nothing.
Not that Bush was great, either…
including nearly $2,000 for “meals” at Voyeur West Hollywood, a nightclub featuring topless dancers simulating lesbian sex.
Hey, they have excellent food there (or so I hear). I’m sure the diners just decided to take the potential PR hit and made a pact to not look up.
Discovering that an enemy is having fun really brings out the hypocrite in people..
Shining light on the fact that the violators of the “values” the rightwing swear to uphold is in fact the rightwing. It sure does make them appear to be the hypocrites they really are.
Ex,
As I know you know, Rightwing and Republican are not the same thing. What these folks did will probably cost them their jobs and rightfully so.
Which is more hypocritical?
1) For the Republicans to allow/have this happen?
or
2) To have the obviously “free sprited” democrats/liberals to call the Reps’ on the carpet for going to a strip club?
Like I am shocked that this happened!!!
The dems and myself merely point out the hypocrisy of the GOP. Nobody demagogueing anyone for their sexual proclivities……. except for the GOP.
Discovering that an enemy is a hypocrite is really fun.
When having a good time annoys your enemies, it’s double-good.
When hypocrisy erodes your enemies credibility, it’s devine.
Knowing that one might lose all credibility and yet still be deemed more honorable and trustworthy than the opposition is the bestest.
And knowing that it’s the opposition who lost all said honor and trust?
Priceless
“Last month?” What, do they do this every month?
Makes me wonder about those frozen-smile wives.
And wait until it hits the MSM that Sen. Mitch McConnell is a bona-fide wig wearing drag queen. I don’t know why they’re holding it back. Wait until elections?
So was former Senator Malcolm Wallop (R-Wyoming).
lmao….. so sad. You have these closeted clowns demonizing and demagoguing everyone else for the very thing that’s going on in their own closet.
It seems hypocrites never learn.
Hearing you beat that drum of conceit over and over is tiresome.
Deal with sister. The rest of us have to live with the non-housing related ideological nattering every single day on this blog.
I’ll grant that you do. It’s the monotonous hate that grates, like getting poked a thousand times in the same spot by little sister.
Ya gotta give the guy some credit for honesty for turning in a 1950.00 bill from Voyuer’s on his expense account.
Why can’t I get that job?
As a conservative I’m appalled they were blowing our money on that.
For the religious right people… ah get bent. They are a bunch of southern big spending democrats. Can’t stand them.
I live in the south and have for decades and the “religious right” is so far right they make necons look liberal.
I wonder if they had a toe-tapping good time!
I no fan of the RNC and Steele in particular, but in fairness to them, the whole organization shouldn’t be stigmatized because one a-hole employee or contractor blew $2K in party money in a strip joint. The real crime is the pathetic RINO candidates whose campaigns they fund.
Mortgage rates start to creep upwards
By Tim Shufelt, Canwest News ServiceMarch 30, 2010
For Canadians now accustomed to rock-bottom mortgage rates, a harsh reality looms.
Rates are officially on the upswing, an indication the country’s housing market is finally poised to cool off and it’s the beginning of the end to historically low rates. It’s a move being closely monitored by those with variable-rate mortgages trying to cling to minimal monthly payments for as long as possible.
Is now the time to lock in to a fixed rate?
…
Is now the time to lock in to a fixed rate?
Anyone who hasn’t locked in a fixed rate by now is a fool - pure and simple.
If:
- Fed Funds rate = 0 for over a year now
- Massive Fed MBS purchases ending tomorrow
- Mortgage rates bouncing off of all-time lows around 5%
doesn’t scream “THEY WILL NOT GET ANY LOWER” to anyone with a relatively high rate, then said person is completely deaf.
That’s harsh, Packy. The peeps have been conditioned to expect another program, another intervention, another bailout - they can’t very well be blamed for not believing that this time is different.
I mean look at GS/PB, he’s still in awe of the my-tee wizard, and he’s a smart cookie!
(JK/Bear)
Not necessarily packman. Most of the Canadian VRMs are at prime -x, while locking into a fixed will get them a prime +y. Interest rates have to go up a couple of % before the fixed make sense. Also of note, most of the mortgages have terms of 5 years or less, so it’s not like they’re gauranteeing themselves a low rate for the next 25+ years.
Fair enough. I’m not familiar with all the ins and outs of ARM variants. (You could say I never stood for ARM twisting)
-1 for bad punnage.
Well - I’ve lost so many points the skunk rule took affect years ago.
Lets all pile on packman:
another -1 for ugh
It’s the Canadian aspect that through you off, eh? It is, after all, different here.
I’m thinking that once the Fed stops squashing down mortgage yields, there might be great investing opportunities for savers going forward in MBS. But don’t get caught long in them before the Fed exits their interest rate buy down program.
Thoughts?
* CREDIT MARKETS
* MARCH 30, 2010
Stirrings in the Mortgage Market
Search for Yield Is Drawing Investors to Residential Deals
By PRABHA NATARAJAN
NEW YORK—A unit of the government-controlled insurer American International Group is offering the first of two new residential-mortgage-backed securities worth a total of $1.8 billion, priming the pump for the return of so-called private-label mortgage-backed securities.
American General Finance Corp., through American General Mortgage Loan Trust 2010-1, is selling what could be the first of many deals, a $1 billion issue backed by existing prime and Alt-A residential loans made in 2003 and 2004. The triple-A tranche of $501.33 million is expected to yield 5%.
The company also is offering a second mortgage-backed deal of $800 million that is expected to be sold next month.
The first issue, backed by loans that are all current in their payments, carries a 50% credit enhancement to protect investors in case of default, and this has helped attract investors, one portfolio manager who has seen details of the deals said. RBS is the lead manager of the sale.
As a private-placement deal, the offering is being made only to select investors considered sophisticated enough to independently assess the offering’s risks. This is another sign that investors are willing to take more risk in search of higher yields. Residential-mortgage bonds backed by risky loans to borrowers with poor credit were the first to fall and are blamed for starting the credit crisis.
But the offer of good yield and credit protection, along with the fact that these borrowers have been current on their loans for more than six years, gives a boost to investors’ confidence in this new bond.
At its peak, the residential-mortgage-bond market was more than $2.5 trillion in size, with large billon-dollar deals hitting the market every week. After the fallout in subprime, issuance ground to a halt.
Since the crisis, the mortgage-bond market has been dominated by deals that carry guarantees from Fannie Mae, Freddie Mac and Ginnie Mae. Over the past year, there have been a slew of resecuritizations of existing residential-mortgage bonds.
In the past few months, there have been new deals but mostly small, customized offers to a small pool of clients. Earlier this month, the Federal Deposit Insurance Corp. sold three structured deals backed by a pool of performing and nonperforming loans, including home mortgages, and found a strong reception among buyers.
…
Guess how rallies that defy gravity all end?
P.S. Follow the Fed; with the end of QE will go the stock market rally.
Stocks & Markets March 29, 2010, 9:50PM EST
Stocks: A Rally That Defies Gravity
Investors are on the lookout for danger signs that could derail the stock market’s yearlong advance
By Ben Steverman
Finance
Defying the doubters, stocks keep climbing higher, extending a rally that has lasted more than a year. On Mar. 29, the Dow Jones industrial average and the Standard & Poor’s 500-stock index both traded at their highest points since Sept. 26, 2008.
All good things must come to an end, though, so investing pros naturally wonder how long the market can keep up its winning streak. The market hit its 18-month high in the face of widespread skepticism among both investors and the American public.
Most individual retail investors have not been participating in the rally. According to Morningstar (MORN), investors pulled $3.7 billion out of U.S. stock funds in February, the fifth month of outflows in the last six months. A Mar. 25 survey by the American Association of Individual Investors showed 34.7% of respondents are bearish, which is more than the 32.4% who are bullish and up from a 23% bearish reading at the end of 2009.
Many Americans seem unaware of the stock market’s success and gloomy about the economy, according to a Bloomberg National Poll released Mar. 24. The broad S&P 500 rose 72.4% from Mar. 9, 2009, to Mar. 26, 2010. Yet the Bloomberg poll found only 31% of American investors said the value of their investments had improved in the past year. By contrast, 22% believe their investments’ value has held steady and 46% believe their value has fallen.
Pessimism May Be Positive
…
..Most individual retail investors have not been participating in the rally…
Do individual retail investors have any idea what they are doing? Does Ben Steverman look to them for guidance?
Guess how rallies that defy gravity all end?
Problem is rallies tend to be like Wile E. Coyote - they can sometimes defy gravity for a long time - like 15 years even.
I think we have rebounded from the downward slope and all the important metrics have rebounded. It’s time to admit to ourselves that the heavy hand of the Govt. and FED can change the outcome in the short term. We live in an age where behavioral economics rule the world, not just the USA. We know the numbers don’t match at the macro levels but yet here we are. I suspect that in the end the investors that make the smartest bets understand this is a phenomenon of demographic changes both here and abroad.
Sure starting to seem this way to me, too.
“I suspect that in the end the investors that make the smartest bets understand this” is no market to invest in.
Look, the average retail investor has no chance in Wall Street these days. It used to be that the likes of Goldman Sachs was the smart money. Now it is nothing more than a ‘muscle’ trader with HUGE computers that can do what I cannot.
The DOW went from 14k to 6.6k and back to 11k all within 28 months. In between it had a 1000 point day and scads of 200 point or more days. 1000 points in one day.
I cannot make money taking risks that I understand. There is supposed to be an open, transparent market. The NYSE is no more open than the derivatives market. The reason is simple: computers can make more and larger trades in less than a second than I can in a lifetime.
I’m done. I’m out. I’m beat. I’ve been out since Jan. 3, 2007. I left the stock markets on my birthday. Happy birthday to me.
No more.
Roidy
Thanks to the HBB, I pulled nearly all of my money out of the stock market back in ‘08. The remainder is in a retirement account that I’m slowly moving from one place to another.
Reason for the slowness: It’s an account that was set up thru a former employer’s 403b plan. And the plan administrator won’t release all the money at once.
duration duration duration…
I don’t want to call the game until all the inventory comes out of the shadows.
You mean the Snythetic Bull-Market is finally here? A perpetual-motion machine exists? This time it really is different? Buy now or be priced-out forever? Let’s party!
Agreed - the illusion has won.
Fake markets have won, manipulation and lies have won. Reality is huddled in a corner with a mountain of facts that have no effect at all on the droning masses.
Unemployment is up, wages are down, but who cares - buy a house today?!
My hunch is the stock market rally will be sacrificed for the purpose of driving down uppity T-bond yields before they take flight. A flight-to-quality move by investors into T-bonds is a useful substitute to relieve the Fed of its QE burden.
Just a hunch, though…
Now THAT’S interesting…
As long as interest rates stay at 0%.
I know I’ve been spouting deflationista speak for a while.
However, I’d also say we have to watch the printing press guy in case he fires up the helicoptor.
We also have to keep an eye on things with the elections happening so soon.
It is going to be a mess.
Also think polling will be very difficult. Your talking a large swing vote of people living in tents this year.
A swing of power to fiscal conservatives might throw a wrench into things.\
If the market and economy tank in the next year, I expect Obama to be a one term president. Don’t think he can cope with having a very bare plurality in congress for very long.
This term has Hoover written all over it.
More like FDR’s first term. People opposing gov intervention and yet blaming the gov for not having fixed all the problems already.
As the grinding continues, the repub’s defense of Wall St and their opposition to bennies will lose them more voters. I’d say Obama’s almost a shoe-in for a 2nd term, especially if Sarah! is the repub candidate, as seems increasingly likely.
“More like FDR’s first term. People opposing gov intervention and yet blaming the gov for not having fixed all the problems already.”
Exactly.
the repub’s defense of Wall St and their opposition to bennies will lose them more voters
Very true, and sad that the Dems have the voters so incredibly snowed.
Take a look at campaign donations to see what I mean. What percentage of voters for instance would guess that in 2008 the financial sector gave more campaign donations to the democratic party than to the republican party?
Did you know that, alpha?
I’d say Obama’s almost a shoe-in for a 2nd term, especially if Sarah! is the repub candidate, as seems increasingly likely.
Will definitely agree with you there.
Who are these fiscal conservatives you speak of????
LOL - the S&P website that publishes the Case/Shiller data that just came out this morning seems to be a little… busy.
A one-month decline of 0.4 percent occurs at an annualized rate of
((1-0.4/100)^12-1)*100 = -4.7 percent.
Not to worry — ’tis a mere flesh wound. And besides that, after taking seasonal adjustments into consideration, prices actually rose in January!
market pulse
March 30, 2010, 9:09 a.m. EDT
U.S. Jan. Case-Shiller home prices fall 0.4%
By Greg Robb
WASHINGTON (MarketWatch) — Home prices in 20 major U.S. cities fell a not-seasonally adjusted 0.4% in January compared with December, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s. Prices were down 0.7% in the past year. David Blitzer, chairman of the index committee for Standard & Poor’s, which compiles the Case-Shiller index, said the rebound in housing prices seen last fall is fading. On a seasonally adjusted basis, prices rose 0.3% in January.
What does a seasonal adjustment from Dec to Jan mean? Why would the numbers be skewed?
Every month has seasonal adjustments - the only difference is the magnitude. Months that are similar would have similar magnitude.
E.g. say for a given location prices are adjusted upward $30k during the winter and downwards $30k in the summer, to account for seasonality. That $30k adjustment in winter would be done both in December and January.
Each month has slightly different variants for various reasons. December vs. January is affected by the holidays, for instance.
To add to that - the seasonal adjustments don’t try to predict the impacts of various things - holidays, super bowl, etc. All they do is take historical data and apply it empirically - e.g. for the $30k adjustments example above - that would be gotten from historical data for same the past 50 years or whatever - on average prices are $60k higher in summer than winter.
Or instead of an actual value they may use a percentage - e.g. prices are on average 5% higher in summer.
It’s on a per-month granularity though, so it may be 5% higher in June, 5.5% in July, 5.5% in August, 4.5% in Sep, 2.3% in Oct, etc. etc.
Thank you.
How can housing prices be “seasonally-adjusted”???
http://finance.yahoo.com/news/Home-prices-post-smallest-apf-3722911936.html?x=0&sec=topStories&pos=main&asset=25b4fd2b237eb6706098ba7f0fbd790f&ccode=mp
How can housing prices be “seasonally-adjusted”???
Rhetorical question?
If you look at any non-seasonally-adjusted home price chart, you’ll see prices always rise more in the spring and summer than in the fall and winter (or fall slower, as the case may be).
Surprisingly this is true even for Florida - who’s peak “desirable” season is winter rather than summer. Only thing I can figure is that the snowbirds come down to rent during the winter, and while they’re there they get a bug up their butt to buy, and do so before leaving in the late spring. I’d be curious to hear native Floridians’ take on this actually.
I understand in the Spring or Fall home prices may be skewed to the higher end because people with school kids (who usually are looking for bigger places) want to move in the Summer. Why would Dec and Jan be different though?
I suppose a cold season has fewer buyers, while the supply is unaffected by weather.
The effect is Low demand, high supply = lower prices.
Buyers reappear when the weather clears. Demand, supply, and prices are normalized.
You add a dash of this, and a spritz of that. I prefer thyme.
Don’t prices always rise over thyme?
No longer sage advice.
I am curious to see how prices will adjust once the 1st time buyer $8K bribe season runs out.
LOL.
“Duck Season”
“Wabbit Season”
“Duck Season”
“Wabbit Season”
“Duck Season”
“Wabbit Season”
“Wabbit Season”
“Duck Season… FIRE!!!”
(BLAM!!!)
“How can housing prices be “seasonally-adjusted”???”
Unfortunately the balance on the mortgage isn’t seasonally adjusted as well.
“Seasonally adjusted” is a “smoothing” technique that is useful only to big investors. To everyday buyers and sellers, it doesn’t mean squat.
Houses will always cost and sell more from spring to fall.
Hrm, got an email from Zillow with information on my old house in Austin, TX. According to them, the value is down 14.3% in the last 30 days. Interesting.
They now value it about 10% under what I sold it for in 2008. Wonder what changed to have them re-value it so drastically?
You moved out?
You moved out?
Clearly that’s it. My presence in the neighborhood made the area considerably more valudable
yikes.
valudablevaluable.“Wonder what changed to have them re-value it so drastically?”
A few REO sales or short sales in the area probably pulled down the average.
TTT sez it ain’t no big thang.
Crain’s Chicago Business - The office vacancy rate in downtown Chicago has hit a seven-year high. The vacancy rate spiked during the first quarter to 14.9 percent, up more than a full percentage point over the 4th quarter of 2009.
Here in good ole Tucson, I’m seeing more vacancies in commercial real estate. Lots of recently built stuff that’s just sitting there, looking for the phantom retailers that never arrive. Or vacant lots where something was supposed to be built, but, for some strange reason, nothing is happening.
There’s a store front on my way to work that has become my own micro-level indicator.
When this building opened in 2007 as part of a multi-story condo project, the corner storefront was a cigar shop. (note: this is a working class nabe - not typical cigar store territory.
By 2008 it became a place that reconditions and resells printer cartridges.
Today it is a hokey “cell phone” store plastered with banners selling cut rate phone cards to call back to the “old country”.
From cigars to phone cards in three years. At least it isn’t vacant - like the other storefronts surrounding it.
“The office vacancy rate in downtown Chicago has hit a seven-year high.”
I drove by a plaza today in the Chicago Burbs. On one end was some kind of lazer tag place. On the other end was a realtor’s office. Everything in between looked empty.
Oh, boy. Realtor’s offices. Cue up the rumbling of another story that’s busting out of the Arizona Slim File:
After I go to the gym, I like to go for a little bicycle ride. Just a spin around the vicinity, then it’s back to the home front.
On my ride, I pass by a real estate agency office that’s been vacant for, oh, a couple of years now. Place used to be a house, then a local photographer fixed it up all pretty-like, and I went to a studio-warming party there three years ago. A friend’s band played while a studio-ful of artsy types did their best to impress each other. It was quite the party, all right.
Friend’s wife later told me that, despite the artsy-photos on display, the photographer’s specialty was portraits of real estate agents. Y’know, the portraits that they plaster all over everything.
It being 2007, and Yours Truly already being part of this-here blog community, I didn’t think that the photographing real estate agents venture was going to turn out well. It didn’t. The studio space was vacated a few months later.
The a real estate agency got hold of it, and did another fixup. Y’know, to make the place less artsy and more pro-fessional.
The agency didn’t last too long there either. Big ole “space available” sign out in front. I seem to recall it being planted along Stone Avenue sometime in ‘08.
Selective MSM Financial/”Recovery” Reporting:
March 30 (Bloomberg) — Confidence among U.S. consumers climbed in March as Americans perceived employment was starting to improve.
The Conference Board’s confidence index rose to 52.5, exceeding the median forecast of economists surveyed by Bloomberg News, from 46.4 in February, the private research group’s report showed today. Another report showed home prices rose in January.
Notice that the market’s expectation (according to a handful of sources I check) was 55 - thus, the lack of a material move on the number release, and some internal softness in the markets since it came out.
This, of course is not reported.
Gloom is lifting as firings slow and the expansion that began in the middle of 2009 is on the cusp of prompting companies to boost payrolls. Consumer spending, which accounts for about 70 percent of the economy is strengthening as households gain confidence the recovery will be sustained.
There’s a limit to how many people you can fire and still stay in business. When you’re down to the manager running the cash register there is a problem with further labor cost reductions.
Productivity numbers bear this out - everyone who still has a job is being told to work harder or lose the job they have.
And note the claim about consumer spending. But as I noted yesterday personal income is flat, and that’s with the crazy government handouts. Take them out of the picture and personal income is down for the second consecutive month (0.2% January and February), indicating that consumers are (again) spending money they don’t have.
This of course worked great during the credit bubble. How do we inflate another one when the consumer’s debt-to-income ratio is still too high and shows no evidence of coming back into balance?
Then there’s this now-dozen-times-or-more repeated load of crap:
Best Buy Co., the largest U.S. electronics retailer, last week reported fourth-quarter profit that exceeded analysts’ estimates. Sales at the Richfield, Minnesota-based company were boosted by cutting prices on flat-panel TVs and offering discounts during the holidays.
Sales at Best Buy were boosted on a year-over-year basis by the fact that last year their competitor Circuit City was still in business.
Yes, revenues and earnings were up against last year’s numbers - their single largest competitor went bankrupt in 2009, and as a consequence their annualized comparisons are being made in a market where the company that used to split market share with them no longer exists!
How many times have you seen that mentioned? Never.
(From K. Denninger)
Oh stop being such a party pooper, doomster, gloomster. Get with it be happy.
Hey OK, SF Gal! You’re right!
Let’s put on a show, the whole gang!
Let’s break into song!
How’s this:
In the moanin’;
In the weepin’;
Ain’t we got fun?
-or-
Crappy days are here again
The skies above bring tears again
Let’s sing a song of fear again
Crappy days are here again.
Wow I’m in a great mood already
Playing on KXCI right now:
“It’s nature’s way of telling you something’s wro-o-o-ong…”
Now that’s more like it cobalt.
Where is the “lower than expected” headline for the number?
Consumer Confidence Unexpecedly Lower Than Expected.
Indeed, if we can put everyone but Goldman Sachs out of business, think how high their earnings will rise! It’ll be a great “green shoots” recovery!?
Folks, I wish there were a way to take back our country from the crooks in Congress. Lo, this proposal (not mine) would be a good way to go if we could only figure out a way to make it happen.
Congressional Reform Act of 2010
1. Term Limits: 12 years only, one of the possible options below.
A. Two Six year Senate terms
B. Six Two year House terms
C. One Six year Senate term and three Two Year House terms
2. No Tenure / No Pension:
A congressman collects a salary while in office and receives no pay when they are out of office.
3. Congress (past, present & future) participates in Social Security:
“All” funds in the Congressional retirement fund moves to the Social Security system immediately. All future funds flow into the Social Security system, Congress participates with the American people.
4. Congress can purchase their own retirement plan just as all Americans.
5. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.
6. Congress loses their current health care system and participates in the same health care system as the American people.
7. Congress must equally abide in all laws they impose on the American people.
8. All contracts with past and present congressmen are void effective 1/1/11 .
Reply
Reply all
Forward
New
|
Delete
Junk
Not junk
|
This is REAL reform.
What - as forwarded for the Nth time by someone’s uncle Bob?
Yeah, let’s make it so that our leaders only can get 12 years of pay in their entire life, with raises below inflation. Nothing like that to draw the best and the brightest.
I’m not a fan of huge congressional perks - but let’s at least be realistic.
OK Packman, I know its unrealistic to hope for any of this reform, but which one of the first seven (7) seem the least bit unreasonable?
Answer: None are unreasonable.
You see they are the “Ruling Elite” that are going to treat us to the nanny state goodies while they skim millions off the top. Sooner or later we’re going to have to reign them in and I vote sooner.
1. Term Limits: 12 years only, one of the possible options below.
A. Two Six year Senate terms
B. Six Two year House terms
C. One Six year Senate term and three Two Year House terms
Term limits are a reasonable proposition certainly, and have been proposed off and on for some time. 1C is kind of stupid though, since crossover between senate and house rarely happens.
2. No Tenure / No Pension:
A congressman collects a salary while in office and receives no pay when they are out of office.
Tenure is irrelevant if you’re going to have term limits.
It’s simply not reasonable to not allow congressmen/women to have no job once they’re done with congress. So they’re going to support themselves and their families on just 12 years of pay - or just 2-4 years if they’re not re-elected? Not reasonable.
3. Congress (past, present & future) participates in Social Security:
“All” funds in the Congressional retirement fund moves to the Social Security system immediately. All future funds flow into the Social Security system, Congress participates with the American people.
Being that SS is a relatively small portion of retirement for most Americans, is it reasonable to put this severe a limitation on congress? No. That means that they’d have a lot less to retire on than non-politicians. Again - incentive for the best and brightest to not go into politics, if they can make tons more money doing other jobs.
4. Congress can purchase their own retirement plan just as all Americans.
What does “purchase” a retirement plan mean?
5. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.
Again why restrict congress to less than average raises? Average pay raises are in the neighborhood of 3.5 - 4.0%.
6. Congress loses their current health care system and participates in the same health care system as the American people.
That’s one I would agree with - except for one thing - what is this “health care system” that the American people participate in? There are many; there is no one system. Are we saying they should all go on Medicare? Buy their own insurance? Set congress up with some kind of corporate insurance? What?
7. Congress must equally abide in all laws they impose on the American people.
As far as I’m aware that’s already the case. It may be loosely enforced in some cases, but any Act wouldn’t help that any, since it only changes the laws, not the enforcement of them (except to perhaps allocate more money for investigation, jails, etc.)
Packman, that’s fine if that’s the way you think but IMO I want them to be citizen legislators that get in for a short time, work on the issues that they deem necessary and then get back to their real occupation. The way things are going they all come out millionaires not matter what they had when they started.
What if their “real occupation” is consulting? Would you propose that we force politicians to take just certain jobs - doctors, engineers, grocery store managers, etc.?
So just a quick act of congress voids all those old contracts, eh?
Sounds like the mortgage market.
Who do I call? Where do I sign?
ohhh…just be quiet and eat your cake you tea party, hate mongering, nazi, puppy killer.
Excellent start, Lip. Would like to see the original source. Packman, I’m surprised at you. Your logic is the same as those who say we need exorbitant pay for Wall St. to attract “top talent”.
I have a proposal to add:
Bills passed by Congress do not become legally binding until ratified in a general referendum of all voters. Furthermore, only those who vote for a law are bound by it.
9. Squealing minorty party squealers must grunt like the pigs they are.
Report: 40% of condo resales are distressed
South Florida Business Journal ~ 3-30-10
More than 40 percent of the 50,000 condominiums for resale in South Florida are either bank-owned or being marketing as a short sale, according to a new report.
Condo Vultures managing principal Peter Zalewski, author of the report, said distressed condos are tied to a contract at a rate that is three times faster than those not in distress.
“Today’s condo buyers are purchasing with all cash, so the natural focus is to gravitate toward the distressed units that can be acquired at a deep discount,” he said. “The product that is not officially deemed to be distressed is selling, but at a much slower pace.”
Of the 22,200 distressed condos on the resale market, more than 7,900 units, or 36 percent, are currently under contract, leaving about 14,300 troubled properties actively available for purchase, according to the report.
The vast majority of the distressed assets are marketed as a short sale, where the bank is willing to take less for the property than what it is owed. South Florida has 18,600 short sales and 3,600 bank-owned properties available.
“Condo Vultures ”
Now that’s a cool name!
A new iphone always does the trick: Next year an i-phone doesn’t need any network, then one that runs on solar, after that a new touch screen that goes in your shoe so you can control apps with your toes. Our lives are so awesome now!
The touch screen in the shoe is bringing back memories of Maxwell Smart.
“…if he had only used his power for good, instead of evil.”
Allena, you still out there? How is everything going?
I was surprised to learn that my high school sweetheart is at the center of the health care reform stuff. She’s also a documentary filmmaker, and perhaps I could put her in touch with you. (Or maybe you’re tired of talking about it?)
Just thinking out loud here…
No word on our contract. It is still at the bank awaiting approval for the short-sale. I have to admit, about 30% of the time I hope the bank rejects…
You’re in for a long wait, my friend.
Did you write an escape clause into the contract so you can keep looking (if you choose to) in the meantime?
Hopefully they don’t have your earnest money, and if they do, I hope you’re getting at least interest on it.
“Did you write an escape clause into the contract so you can keep looking (if you choose to) in the meantime?”
Naw, it’s this house or wait another year.
“Hopefully they don’t have your earnest money”
Nope, no earnest money until the bank approves.
Elizabeth must have missed little TTT’s memo, it’s under control baby!
Half of Commercial Mortgages to Be Underwater: Warren
CNBC.com
By the end of 2010, about half of all commercial real estate mortgages will be underwater, said Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel, in a wide-ranging interview on Monday.
“They are [mostly] concentrated in the mid-sized banks,” Warren told CNBC. “We now have 2,988 banks—mostly midsized, that have these dangerous concentrations in commercial real estate lending.”
As a result, the economy will face another “very serious problem” that will have to be resolved over the next three years, she said, adding that things are unlikely to return to normalcy in 2010.
Feds enlist NASA in Toyota probe
Business Courier of Cincinnati
U.S. Department of Transportation Secretary Ray LaHood said Tuesday that NASA engineers have joined investigators from the National Highway Traffic Safety Administration to examine the “sudden acceleration” problems reported in some Toyota models.
The National Academy of Sciences will conduct a separate investigation of acceleration and electronic vehicle controls across the entire automotive industry, the department said in a news release.
“We are determined to get to the bottom of unintended acceleration,” LaHood said in a news release. “For the safety of the American driving public, we must do everything possible to understand what is happening.”
And this falls under NASA’s purview because…
It doesn’t of course. Wonder if from here on out, with NASA cut backs they’ll be called on for all major recalls? Not just Toyota.
Ray DaHood’s on the J.O.B.
“Housing prices are probably going to sink. Why? Because they’re a consumer item, not an investment. For 100 years, a house was a place to live in…and housing prices more or less kept pace with inflation. Then, beginning in the mid-’90s people came to see a house as ‘the best investment you can make.’ They began buying houses as a way to make money…and as a way to save for retirement. It made sense. What would you rather have, a mutual fund growing at 10% per year…or a house that goes up by 10% per year? The house! Because you can live in it…and show it off. So you leverage up…you buy twice the house you can afford. You live better. And you make more money.
“Those days are over. But, not everyone realizes it.”
~ B.Bonner
Well, I’ve seen ‘em on the TV, the movie show
They say the times are changing but I just don’t know
These things are gone forever
Over a long time ago, oh yeah
from “Pretzel Logic” by Steely Dan
Steely Dan… One of my all time favorites!
He’s wrong. It may be over for now and some time to come, but the American RE industry has always been boom to bust to boom to bust.
In a move drawing national attention, Wisconsin Insurance Commissioner Sean Dilweg has taken control of more than $40 billion worth of risky mortgage-related liabilities and other troubled contracts from the insurance unit of Ambac Financial Group, as part of a restructuring plan intended to save the company.
The move, which regulators hope will stabilize the company and protect policyholders, must be approved in court under a final rehabilitation plan to be submitted within the next five to six months, said Mike VanSicklen of Foley & Lardner, which is representing the commissioner’s office.
There is no cost to state taxpayers, VanSicklen said, because payments of claims on the $40 billion in risky securities revolves around getting those policyholders to agree to accept less than they’re owed.
And VanSicklen believes most will agree to the terms, because the alternative means the company could collapse and they’d receive nothing, he said.
“It could bring down the whole company, to the disadvantage of all policyholders, including themselves,” VanSicklen said.
The insurance company has consented to the rehabilitation plan, he noted.
Claims from the $40 billion in risky contracts are threatening the company’s core business, which includes $310 billion worth of municipal bond policies.
The insurance unit, known as Ambac Assurance Corp., operates out of New York City, but is regulated in Wisconsin because it was founded here. It is the second-largest bond insurer in the world, founded in 1970, but it’s facing financial ruin after expanding from the relatively safe public-finance bond market into guaranteeing riskier investments such as mortgage-backed securities in the 1990s.
Under the plan, claims made by the holders of defaulted mortgage-related securities insured by the company would be paid at a rate of only 25 cents for every dollar of coverage, with an IOU that could mean more money later if business improves.
I guess GS didn’t buy their insurance from AMbac otherwise it would be 100 cents on the dollar .
as part of a restructuring plan intended to save the company.
Asking the obvious question - why save the company? Why not break it up and sell the pieces (e.g. the policies) to other entities?
WTF is wrong with these people? Why continue to support financial entities like these that are proven failures; that simply didn’t properly weigh the risk?
(Those are rhetorical questions BTW. I know full well why - just doing the Jeopardy thing and phrasing my disgust in the form of a question.)
Yes
The insured take a hit but managment of the failed company get’s to keep on making money.
Have you all forgotten that a corporation’s first duty is to its shareholders (BOD) and not the customers?
What are you guys, some kinda dang socialeest/commies?!
And government’s first duty is supposed to be to the people, not to the corporations.
Supposed to be, that is.
~ From a New York Times piece on the enormous debt towering over the individual states with respect to budgets and long-range obligations.
Joshua Rauh, an economist at Northwestern University, and Robert Novy-Marx of the University of Chicago, recently recalculated the value of the 50 states’ pension obligations the way the bond markets value debt. They put the number at $5.17 trillion.
After the $1.94 trillion set aside in state pension funds was subtracted, there was a gap of $3.23 trillion — more than three times the amount the states owe their bondholders. State Debt Woes
Can the federal government bail all them out? With what? Uncle Sam is already broke and living off the generosity of strangers willing to buy his IOUs.
Local governments are having a tough time making ends meet, too. They’re faced with cutting spending, raising taxes, or a combination of both. 2010 is shaping up to be another year of heavy angst.
With what?
Some tools never go out of style.
What they’re really have a tough time with is figuring out who to keep political favor with and who not to.
Does the brother in law of your biggest contributor get the road contract/consultancy this year, or should the local brand name employer still keep getting its million dollar a year tax break?
Tuesday, March 30, 2010, 9:28am PDT
Portland home prices keep falling
Portland Business Journal
Oregon’s high unemployment rate helped to drag Portland home prices down 4.2 percent in January compared with a year ago.
Nationally, home prices showed signs of moderating in January according to Standard & Poor’s Case-Shiller index, released Tuesday.
The S&P 20-city index was down only 0.7 percent in January compared to a year ago. It is the first time in three years that the annual rate came close to showing positive growth.
Both Portland and Seattle, however, had sharper declines. Portland prices were 4.2 percent lower than a year ago and 1.8 percent below the month prior. Seattle prices were 6 percent lower than a year ago and 1.7 percent lower than the month prior.
San Francisco showed the strongest signs of rebounding with home prices up 9 percent over a year ago. Las Vegas had the largest one-year decline, with prices down 17.4 percent in January compared to the prior year.
“Other recent data on housing also paint a mixed picture,” said David M. Blitzer, chairman of the index committee. “Housing starts continue at extremely low levels, recent reports of home sales suggest the market remains difficult, and concerns remain about further foreclosures and a large shadow inventory of unsold homes. We are in a seasonally weak part of the year, but we can’t say we’re out of the woods yet.
…
They must be on the wrong side of the teeter-totter Mr. Bear.
1st jump in LA/OC home prices in 3 years
March 30th, 2010, by Jon Lansner OC Register
The S&P/Case-Shiller home-price index for LA and Orange counties rose 3.9% in the year ended in January — the first gain in 3 years.
The index, on a monthly basis, rose 0.9% in January from December — the 8th consecutive month-to-month gain.
S&P/Case-Shiller tracks home values by matching sales and purchase prices of the same property in a given period, then building a “paired sales” index out of the collective gains or losses recorded in a region with a set period.
This most recent S&P/Case-Shiller gain seems to validate, in part, the notion of rising prices found in other indexes recently:
* DataQuick, which tracks the movements of the median selling prices for all residents — new and resale — showed a 14.9% gain for Orange County in year ended January. It pegged LA County gains at 9.3% for the same period.
* California Association of Realtors had its median selling price of Orange County single-family houses up 13.6% in year ended January.
Steel prices to rocket under new contract ~ FT
By Javier Blas in London and Peter Smith in Sydney
March 30 2010
Global steel prices are set to leap by up to a third, pushing up the cost of everyday goods from cars to domestic appliances, after miners and steelmakers on Tuesday agreed a ground-breaking change in the iron ore price system.
The deal by Vale of Brazil and Anglo-Australian BHP Billiton with Japanese and Chinese mills marks the end of the 40-year-old benchmark system of annual contracts and lengthy price negotiations. The industry instead agreed to move to quarterly contracts linked to the nascent iron ore spot market.
So then that’s like linking house prices directly to spot lumber prices? Yeah that makes sense.
Sure there’s naturally a relationship there - but why make it a hard tie to a volatile commodity price, if not for collusion purposes?
(There I go asking rhetorical questions again)
“…marks the end of the 40-year-old benchmark system of annual contracts and lengthy price negotiations.”
“We don’t needs no stinkin’ “Free Market” prices…”
Well here in sunny Mesa, AZ it is 82 degrees going on 2PM. Relative humidity at 16%. The backyard smells very strongly of orange blossom. Around the orange trees it looks like a light dusting of snow, from all the white blossoms that have fallen off. Just took a few minutes to skim some of them out of the swimming pool so as to not clog the filter. So what else is new? I notice that the administrative “fees” on my money market funds are almost as much as the miniscule dividends they pay these days. Makes me wonder what people who actually depend on their interest income to live on are doing about it.
My own personal objective was to have employed some of that money into buying some local low cost real estate and becoming an active landlord type. However it seems the government and I have different ideas about how to make housing “affordable”. It also seems I have a different opinion about bailing out irresponsible lenders and borrowers than the government has.
It also seems I have a different opinion about whether the “little guy” or the “biggest guys” are the ones being favored by the current administration. And lastly, it appears to me that fraud, waste, corruption and abuse are in full control of the resources and wealth of this country and planet. This bothers me not so much because of my own needs or wants or desires, but for what it seems to mean for those who are youngsters today. I have two granddaughters who are 6 and 3. I wonder what the current policies of insanely piling up of mountains of debt will mean to them. The costs observable, and partially hidden. The unknown calamities and destruction of what might have been. The untold costs of misallocated capital and taxes and resources.
Other than that, having a wonderful day in sunny Mesa, AZ. How ’bout everyone else?
Having a fantabuloso day here in Tucson. Went outside to weed the Front 40 during the noon hour. Oh, that warm sun felt good!
Try 52 week T-bills or two year notes. No transaction fees. Just buy equal amounts of 52-week T-bills every four weeks and when the year turns around it will be like buying one month T-bills every month but with higher interest and laddering.
Oh, did I say no fees? Much better than money market.
60 percent of Sacramento employers expect to hire in Q2
Sacramento Business Journal
Three of every five companies plan to hire employees during the second quarter in the Sacramento region, the second-consecutive quarter with a positive outlook on job growth, according to a recent Pacific Staffing report.
It’s an about-face from second-quarter 2009, when 59 percent of company executives had no plans to hire workers, according to the quarterly report.
Human resource managers say the need for customer service, sales and technical skills are in high demand during the next quarter.
And the biggest challenge for companies? Fast-rising health care benefits for workers, according to the survey.
Pacific Staffing contacts 100 company executives in the region for the quarterly survey. The latest poll was conducted between Feb. 22 and March 18.
Yo dude Ripped, don’t you read the papers, you need to pull a Cheney/Woods citizen privilege…the “right” not to be “interviewed for 72 hours” following “the-incident”
Filed under: Justice is blind & has no sense of smell.
Rip Torn pleads not guilty in Conn. bank break-in:
“Torn is charged with criminal trespass, carrying a gun without a permit, carrying a gun while intoxicated, burglary and criminal mischief.”
How can this be? I thought we had big ‘free’ stimulator bucks, gonna ‘create’ mo jobs… They need to get team Barry on the stick.
NY freezes construction funding
The Business Review (Albany)
New York state will stop funding new or ongoing construction projects as of April 1.
The freeze on spending is necessitated because temporary state spending bills, which take effect Thursday, do not include any appropriations to pay for construction work.
The action potentially places hundreds of projects in jeopardy around the state, and it may lead contractors to halt projects and temporarily lay off workers. The state Department of Transportation has begun notifying contractors of the impact of the temporary spending bills.
However, a construction industry representative predicted no contractors would immediately halt work, since they are accustomed to waiting at least a week before getting reimbursement from the state.
Interesting, ain’t it? But then again, isn’t NY the home of Wall St.? TARP and all that?
You know, the lying, thieving, bassfish that made this damn mess?
This is only because there is no budget yet. Happens every year. Temporary interim budget is bare bones.
Handy, but down and dirty, inflation calculator.
http://www.halfhill.com/inflation.html
ran the calculator for $1,000
1930 to 1940
went down to $813!
That was before the invention of the virtual (computerized) printing press technology.
Using Shadowstats, I am making less than I was in 1974 when I started my first full time job.
I thunked they already done rescued the Geeks with grifts?
The Financial Times
Rescue fears trigger Greek bond sell-off
By David Oakley in London and Kerin Hope in Athens
Published: March 30 2010 19:01 | Last updated: March 30 2010 19:01
Greek sovereign bonds suffered a sharp sell-off on Tuesday as investor concerns over the country’s financial health flared up again.
The price of seven-year bonds issued only on Monday tumbled as a new issue of 12-year paper struggled to find buyers.
”Greece still has big problems,” said a senior banker. “The Greek bond syndication was very disappointing. Investors still do not have faith in Greece and are only prepared to buy the bonds for higher yields.”
In spite of mooted support from the European Union and the International Monetary Fund, investors remain concerned that Germany could refuse to provide financial aid if the Greeks fail to meet their deficit reduction targets later in the year.
Greece must raise €35bn ($47bn) of debt this year to avoid a bail-out. It has sold €18bn so far
Yields on Monday’s €5bn syndicated bond rose more than a quarter of a percentage point to 6.30 per cent, a big sell-off for a new issue. Yields have an inverse relation with prices. The bond was trading 3.5 percentage points over German Bunds which is close to a record premium for Greek bonds.
Greece’s unexpected sale of 12-year bonds – a re-opening of an earlier issue due to mature in 2022 - raised only €390m, less than the sale’s €1bn upper limit.
Debt managers in Athens said a yield ceiling of 6 per cent was set in the auction of the 12-year bond.
Investors said market sentiment had been hurt by the fact the seven-year bond attracted a much smaller amount of orders than the country’s two other new bonds this year.
…
So long as the Fed continues using QE to squash yields, what’s the worry?
Bloomberg
Fed’s Fisher Says U.S. Can’t Ignore Effect of Deficit on Yields
March 30, 2010, 8:40 PM EDT
More From Businessweek
* Volcker “Optimistic” on Passage of Regulatory Overhaul Bill
* U.S. Television Prime-Time Ratings for Week Ended March 28
* China to Reduce Food Component in CPI Calculation: Securities
* Emerging Markets to Have ‘V’ Shaped Recovery, Roubini Says
* German Banks May Face ‘Significant Losses’ From Southern Europe
By Vivien Lou Chen
March 30 (Bloomberg) — Federal Reserve Bank of Dallas President Richard Fisher said the U.S. can’t ignore the effect of the growing federal deficit on Treasury yields and the outlook of investors.
“Even under the most optimistic of scenarios, large deficits will be run for as far as the eye can see,” Fisher said in the text of a speech today in Tucson, Arizona. “The markets, fearing the consequences of runaway deficit financing, have bid up longer-term nominal rates, resulting in a yield curve that is now historically steep.”
Fisher’s remarks underscore the view expressed last week by former Fed Chairman Alan Greenspan, who told Bloomberg Television that he’s “very much concerned” about the financial situation of the U.S. Greenspan said higher yields are a “canary in the mine” that may signal further interest-rate gains and reflect investor worry about the “huge overhang of federal debt.”
“Some of this, of course, may reflect an improvement in economic growth,” which should be about 3 percent this year, Fisher said during the speech at the University of Arizona’s Eller College of Management.
…
“So long as the Fed continues using QE to squash yields, what’s the worry?”
What, me worry?
The Alfred E. Neuman School of Economics is alive and well and running the show quite nicely without any adult supervision, crank you very much.
Combo — This one’s for you:
Credit is Dead. Long Live Cash!
Why the return of a cash economy is good for consumers and businesses alike.
By Daniel Gross | NEWSWEEK
Published Mar 24, 2010
From the magazine issue dated Apr 5, 2010
Cheap and plentiful credit has powered the U.S. economy for decades. But since the financial crisis of 2008, America has gone on a drastic debt diet. Just as families are paying down credit-card debt and building up cash reserves, businesses large and small are learning to operate in an environment where cash once again is king.
…
Yep.