Bits Bucket For June 3, 2010
Post off-topic ideas, links and Craigslist finds here. The Florida/DC meetup link at the forum is here. Click here for the shadow inventory thread.
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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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The petition comments of the day:
‘In addition to the shadow inventory, why does the government prop up the market with low down payment loans through FHA, Fannie Mae, and Freddie Mac? There was a reason why 20% down payments and the ban of interest only loans were put in place.’
‘Free market economy will work it’s way out of this mess we have in Real Estate, Government should be out of it. We shouldn’t use Taxpayers money to manipulate markets to salvage morally and financially bankrupt banks. That is immoral.’
Retailers’ reports show tepid May for shoppers
Stores report weaker May sales, underscoring how fragile economic recovery remains.
NEW YORK (AP) — Americans pulled back on their spending in May after a tepid April, underscoring how fragile the consumer spending recovery remains, new data released Thursday show.
Cool weather and a quirk in the calendar — a late Memorial Day weekend that hurt May’s business but should boost June’s figures — dampened spending on almost everything from clothing to major appliances. The figures, from MasterCard Advisors’ SpendingPulse, include spending in all forms including cash from May 2 through Saturday.
But weakness in the past six weeks is due to more than thermostat and calendar flukes, analysts said. They cited unemployment, stock market jitters and the end of government funded rebates on energy-efficient appliances.
I do not find this article credible as it did not ONCE, use the word “unexpectedly.”
Too funny eco.
BofA: Mortgage Walkaways Have Huge Incentive
Diana Olick CNBC Real Estate Reporter
This morning executives at Bank of America rolled out their new “Principal Reduction Enhancement” program, which is an earned principal forgiveness plan for borrowers behind on their mortgages and whose loans are at least 20 percent underwater in value.
The plan is in conjunction with the government’s Home Affordable Modification Program, but the government’s principal reduction plan isn’t in place yet.
What makes BofA’s plan so proactive is that it employs, “a principal reduction as the first step toward reaching HAMP’s affordable payment target of 31 percent of household income when modifying certain NHRP-eligible mortgages — ahead of lowering the interest rate and extending the term.”
Why are they getting more aggressive on modifications?
Because more borrowers are walking away. Yes, I know we’ve talked about this forever on this blog and on CNBC, and the New York Times did a piece yesterday on it, and 60 Minutes did a piece on it a few weeks ago. The fact of the matter is it’s getting worse, and B of A execs are acknowledging that openly.
And it’s getting worse enough that BoA believes that allowing public cramdowns will lose them less money than eating the walkaways. That’s a lot of walkaways.
The question is just who is eligible for these cramdowns: the responsibles ones who are able to pay the mortgage, or the caseys? And where is the gov getting the money to fund a cramdown program? I thought the Senate rejected cramdowns because “the bankers own the place.”
Ed pays his mortgage every month, even though he is seriously under water. Ron, who is in a similar situation, stopped paying his morgtage ten months ago but is still living in the house. Now Ron is about to get a principal reduction from his lender.
1. What should Ed do?
A) Continue paying his mortgage
B) Stop paying his mortgage and wait for his lender to offer a principal reduction.
2. What do you predict Ed will do?
3) Can the Fed print money fast enough to replace all the money that’s going “poof”?
Depends on the terms of the cramdown. If the cramdown is attached to a BK and shackles to the house; e.g. any profit from a sale goes to the bank, Ed might think twice. (Assuming Ed even thinks even the first time, which appears too few people are doing.)
Anyone else suspect that the cramdown will be another of these programs that comes in with great fanfare but acutally helps, like, 1% of the applicants at most?
“Gimmie a mod man, mod me BigTime!”
“a principal reduction as the first step toward reaching HAMP’s affordable payment target of 31 percent of household income when modifying certain NHRP-eligible mortgages — ahead of lowering the interest rate and extending the term.”
Am I missing it, or does other people’s money besides Megabank of America’s and the home owner’s fund these principle writedowns?
If this is correct, I am having a hard time understanding why Megabank of America and their FBs cannot come to terms, in order to share the spoils of Uncle Sam’s generous ‘Save Our Homes’ subsidies?
Because the game is squeezing every last dollar possible from the FBs.
WSJ blogs, June 3
More Bank-Owned Homes Likely to Hit the Market
by James R Hagerty
…two of the leading contenders in this guesstimating game…have been comparing their methods…both say the REO count is on the rise…
After soaring in 2008, the REO total shrank for most of 2009 as foreclosure-prevention efforts slowed the flow…the REO count is rising again. [Barclays analyst] expects it to peak at 538,000 in August 2011 before starting to decline gradually.
Fannie Mae and Freddie Mac, two of the biggest holders of REO, both expect their REO inventories to increase in the next few quarters [but the analyst reporting this] doesn’t think the effect on prices will be as severe as it was in late 2008 and early 2009. …
Prices “went up” for the summer in this mountain resort community, and now nuthin’ is selling. Realtors bad advice to owners?
05/29/2010 Price change* $234,900
05/21/2010 Listed for sale* $199,900
03/19/2010 Listed for sale* $234,900
05/09/2008 Listed for sale* $365,000
04/17/2008 Listed for sale* $340,000
10/25/2007 Listed for sale* $365,000
10/19/2007 Listed for sale* $385,000
10/19/2007 Listed for sale* $375,000
10/19/2007 Listed for sale* $385,000
10/18/2007 Listed for sale* $375,000
09/30/2007 Listed for sale* $385,000
09/30/2007 Listed for sale* $365,000
06/21/2001 Sold $149,500
07/24/1996 Sold $77,000
Must be lots of jobs up there in the Mtn. area…
This always puzzles me when I see it. If they couldn’t find a buyer at the 05/21/2010 price of $199,900, why would they expect to find one at the higher 05/29/2010 price of $234,900?
You put a low low price to see if you can start a bidding war.
Possibly still get low balled.
Then relist again after the failure.
Course sometimes these are short sales and the people are wishcasting that the bank will take this low of a price.
Voodoo, er, supply side economics works by raising price when times are good, due to lack goods and services and raising prices when times are bad, due to lack of income.
This has been basic economic policy and practice for the last 30 years.
I wouldn’t pin the blame on the RE crowd’s advice to homeowners.
Not totally. I see and hear from lots of folks that are trying to sell their houses but “I won’t lower my price” mentality is pervasive and some RE’s in order to get the listing, just do what the homerenter is telling them to do.
Lots and lots of delusion out there. Plenty to go around, I’d say.
I agree with that as well.
Time to hike rates nearing: Fed’s Lockhart
June 3, 2010 7:32 AM ET
ATLANTA (Reuters) - The U.S. economy is almost strong enough to allow the Federal Reserve to begin raising interest rates, Atlanta Fed President Dennis Lockhart said on Thursday.
While he noted unemployment would likely remain elevated for some time, Lockhart said the U.S. central bank should not wait too long before beginning to tighten the reins.
“The time is approaching when it will be appropriate to consider recalibrating interest rate policy. I do not believe that time has yet arrived,” Lockhart said in the prepared text of a speech.
“The conditions that require a change of policy are not yet at hand. However, as the economy continues to improve and financial markets find firmer ground, extraordinarily low policy rates will not be needed to promote recovery and will become inconsistent with maintaining price stability.”
Hooray! My savings may actually start earning some meaningful interest.
Dream on.
Fed bank presidents seem to never fail to take advantage of MSM jawboning opportunities any more. I liked it better back in the day when the Fed was out of sight, out of mind.
You will never be able to retire.
http://www.chron.com/disp/story.mpl/business/7032207.html
Here ’tis, straight from the Treasury Department’s web site.
The Public Debt has officially crashed through $13 trillion on its way to $14 trillion!! From May 28th ’til today the debt surged more than $51 billion. That’s more than $7 billion per day! Generally, however, the U.S. is going into hock at the rate of only $4 billion per day, based on the $1.5 trillion increase in the Public Debt from June of ‘09.
What can be done to stem this runaway debt? Not much. Until a majority of voters demand a change in the nation’s downward spiral the Obama administration and the U.S. Congress will continue to run grossly imbalanced budgets, borrowing at the rate of a trillion or more dollars a year to pay the bills.
Meanwhile, mainstream economists are saying an economic recovery is in the works. The rate of job losses is declining. Some industries are reporting an uptick in profits. But the economy is chiefly driven by consumers, and they’re not doing their job. Retail sales in May were not as strong as hoped, although there was a small rise in consumer confidence. The Dow Jones Industrial Average fell 7.9 percent for the month, its worst May since 1940. Economists worry that businesses will limit hiring.
The federal government is doing its best to offset this sluggishness by pouring money through a variety of channels into the public’s hands. “Spending like a drunken sailor,” some wags say. However, a former drunken sailor said, “Yeah, but we stopped when we ran out of money!”
“….pouring money through a variety of channels into the public’s hand’s.”
Has anyone actually seen any of this government largess?
Public = Banksters
Exactly. This is a great example of disinformation.
Besides UE money’s paid to states (who, BTW have the last word on whether you actually get that money or not) I don’t know of anyone getting that money.
http://blogs.wsj.com/developments/2010/05/28/more-bank-owned-homes-likely-to-hit-the-market/
Unlike the penny jug at the state fair, the REO jar is hidden from public view.
‘It’s a bit like guessing how many pennies are in a gallon jug at the state fair, but housing analysts keep trying to count how many foreclosed homes banks and mortgage investors own.
Why should we care? Unlike at the state fair, there is no prize for guessing right. Still, if we can track the number of these REO (“real estate owned”) homes, we can get some sense of how banks and others are doing in their efforts to dispose of the properties and how much longer they will be weighing on the housing market.’
There is indeed a “prize” and it can run into the thousands of dollars.
Knowing the true inventory means you deal from a position of strength when buying.
The numbers in the 500K neighborhood seem like a very conservative (low-end) estimate of shadow inventory, as they ignore vacant homes that banks have not gotten around to dealing with, delinquencies which number in the millions and the ARM reset tsunami scheduled to play out through 2012 or so. The 500K reminds me of a body count after a natural disaster, where the count only reflects bodies actually seen by rescue workers, and ignores the many others that are buried under the rubble.
“Public service is my motto. Ninety percent of the people of Cook County drink and gamble and my offense has been to furnish them with those amusements.”
~Al Capone
“Supply will meet Demand.”
- Mister Market
“Demand won’t meet supply.”
- Mister Housing Bubble
“Demand won’t meet Supply. - Mister Housing bubble”
True that. Go to any ghost town and see for yourself.
Supply (housing) is not transportable and demand (jobs) is too transportable.
—- Mister Globalization
“No terms except an unconditional and immediate surrender can be accepted.
Grant, February 16, 1862 at Ft. Donelson,
“Demand is much fleeter of foot than supply,” Mr. Tulip.
Jim FTW
I keep trying to post a link to WSJ blog 5/28/10 entitled “More Bank-Owned Homes Likely to Hit the Market.” Word Press knows I already posted the link (so it won’t allow me to post it again), but I’m not seeing it posted, so trying a Blather message instead…
James R Hagerty points out that two top analysts agree REO’s are on the rise after falling through much of 2009. One of these analysts think REO’s will peak Aug 2011. Fannie & Freddie expect increase in REO’s next few months. Etc.
We’ll manipulate the Demand & the Supply…Mr. Oil & Ms. Diamond
From the American Bankruptcy Institute: May Consumer Bankruptcy Filings up 9 Percent from Last Year.
The 136,142 consumer bankruptcies filed in May represented a 9 percent increase nationwide over the 124,838 filings recorded in May 2009, according to the American Bankruptcy Institute,relying on data from the National Bankruptcy Research Center. NBKRC’s data also showed that the May consumer filings represented a 6 percent decrease from the 144,490 consumer filings recorded in April 2010. …
“While consumer filings dipped slightly from last month, housing debt and other financial burdens weighing on consumers are still a cause for concern,” said ABI Executive Director Samuel J. Gerdano. “Consumer filings this year remain on track to top 1.6 million filings.”
I thought we were in a new bull market?
For bankruptcy attorneys.
Have you guys heard the loan modification shiesters on the radio these days?Reminds me of the countrywide commercials in 05.I dont know how they get away with the deceptive advertising.
Yup, I’ve heard ‘em too. At the gym. It’s really hard for me to keep The Troublemaker (aka my mouth) in the off position.
That’s very true, polly. I know a fellow who practices that sort of law. The past few years have been veddy-veddy good to him.
How does a personal bankruptcy attorney make money? The only person I know who filed bankruptcy was my sister. She stiffed the lawyer (surprise, surprise), and then the lawyer tried to bill me. I said no thank you.
They charge attorney’s fees. And, yes, they do get stiffed.
Attorneys practicing in other fields have the same problem. Matter of fact, a longtime family friend, who practices divorce and child custody law, says that he’s the king of the writeoffs.
Don’t the customers pay in advance? It would make sense to make then do that.
Unless the debtor pays in advance, or the outstanding balance is discharged just as any other debt.
You definitely want to get your money upfront in that practice area.
I’m speaking from the personal experience of having hired an attorney a few months ago. (And, in case you’re wondering, it wasn’t a bankruptcy attorney.) Before Mr. Legal Eagle would do any work for me, I had to pay him an upfront retainer fee.
To me, if there is anyone you should avoid screwing around with, it’s your attorney.
That’s the reason I had to sell my Match HBAR AR-15; to finance my divorce.
Money well spent.
I did a few bankruptcies and the clients would get a cash advance without any prompting from me. But I was doing simple Chapter 7’s back then.
I thought that post petition BK attorneys were a preference item paid first from the asset of the BK estate (well after federal taxes in arrears). I’m pretty sure that is the case for corporate bankruptcies
Private sector adds 55,000 jobs in May, Less than expected. ~ June 3, 2010
NEW YORK (Reuters) - Private employers added 55,000 jobs in May, compared with an upwardly revised gain of 65,000 in April, a report by a payrolls processor showed on Thursday.
The April figure was originally reported as a gain of 32,000.
The median of estimates from 31 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 60,000 private-sector jobs in May.
The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which is expected to show a huge rise in nonfarm payrolls of 513,000 in May, based on a Reuters poll of analysts.
Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.
Are the ADP figures directly comparable to nonfarm payrolls — i.e., does the 55,000 ADP figure suggest a nonfarm payroll figure of 513,000 increase is “pie in the sky”?
I’ll be surprised if there is much of an increase in payroll employment other than temps.
I’ll bet the shift to “freelancers” continues. Compare the increase in jobs in the household survey, which includes the self-employed, with the increase in the non-farm payroll survey, which does not.
Of course all those retreating to rural land with guns, ammo and canned goods don’t show up in in non-farm payrolls either.
According to hbb no job is a real job unless it is a) manufacturing b) unionized and c) requires no skill/education.
That’s been my impression. And worse, somehow it’s somebody else’s job to provide you with jobs/healthcare/education and you name it. If you are not happy, bitch bitch and bitch……
Never ends.
What’s the point of remarks like this…
Employment numbers are hard to look at. The BLS numbers have a birth and death model. They also try to account for the strong seasonal pattern. ADP is more of a sample report that gives a better idea. ADP also does not count temporary workers.
Back when things were raging in 04-05 I claimed it was better to look at aggregate wages to see the inflationary or deflationary pressure. Was not a lot of inflation in wages sans construction. However, we did have full employment.
Personally think we are a decent way to recovery and we need to be examining our tax/spending codes for competitiveness with other countries/states. USA is on sale cheap and it’s a good time for business to take a look around.
Course it’s also a dangerous time with all the socialists looking for a quick score.
The line of thinking around here…In general think a big problem is 80%+ of the population anywhere isn’t really prepared to make it as thought worker. Hard for most of the people to keep up. The other thought is we need to generate exports to get the debt situation under control. That and cut consumption. Oil is probably the biggest concern.
According to hbb no job is a real job unless it is a) manufacturing b) unionized and c) requires no skill/education.
Eddie, what would you recommend for the bottom 25% of the population?
A) Manufacturing jobs
B) Permanent unemployment / welfare
C) Multi-level marketing
D) Send them to the gas chamber
I vote for A.
That isn’t what I meant and you know it.
What I meant was that anytime there is talk of jobs being created, the hbb set moans that they’re not “real jobs” because it’s not a 1950s job working at a manufacturing plant.
It’s time for some of you to get a simple fact straighgt. Manufacturing in the US is gone. Never coming back. Ever. Never, ever. When a job can be performed by someone in Chindia making $1 an hour as well as someone in Ohio making $30 an hour, it doesn’t take a PhD in economics to figure out where that jobs will exist.
Personally I would rather have our jobs be the high end, high tech, high skill variety and let Chindia have the low skill variety. But that’s just me.
Personally I would rather have our jobs be the high end, high tech, high skill variety and let Chindia have the low skill variety. But that’s just me.
I don’t disagree with your overall message, Eddie, but the reality is that not everyone in the US is capable of performing high-tech, high-skill jobs. So what do we do with them?
The reality is we NEED manual labor jobs. We need wrote jobs. We need stuff that the average and less than average people can do and get paid for. Otherwise, those of us who CAN do the high-skill jobs will either pay to carry these people, or at some point end up at the end of one of their pitch forks.
I’ll be surprised if there is much of an increase in payroll employment other than temps.
As an anecdote, my company (tech industry) has been hiring. 4 or 5 other people came on board the same time I did, and they’re looking to hire more…
So there are at least some companies out there who are doing well and adding to payroll.
Google and Yahoo are hunting!
HP is laying off 9,000 mostly in Texas.
Google and Yahoo are hunting!
And they are very picky. It helps to have a PhD. Your average Software Engineer is unlikely to get a foot in the door.
And they are very picky. It helps to have a PhD. Your average Software Engineer is unlikely to get a foot in the door.
I have a friend who recently started a software company. He’s most concerned with programming ability, rather than the letters after someone’s name.
He also likes to hire for cohesiveness. Meaning that his programmers need to get along with him and with their fellow programmers. Ahos need not apply.
And that’s the difference between big companies and startups. My favorite is companies in the 50-100 employees size that are starting to have just enough infrastructure in place to where my paycheck probably won’t bounce on a bad month and I won’t be on my own next year for healthcare, but still have the small company atmosphere where ability to get along with “different” folks means something.
“my company (tech industry) has been hiring.”
So is mine.
The freelancing shift is one of the major demographic trends of our time.
To companies, there are advantages to having us around. For one thing, there are no salary, training, and benefits expenses. And we work on a project basis. Once it’s done, you pay us, and we’re bye-bye. Off to the next freelancing adventure.
It’s possible to earn a good income as a freelancer, but here’s a little word of warning: It takes hard work. And it’s a different kind of hard work than what you did as an employee. You have to be constantly selling yourself and improving your skillset. And you have to have a sense of self confidence that would make Genghis Khan blush.
I could go on. In fact, I have before. But I’ve got to get on the phone and start prospecting for new business. It’s how I start my workdays.
Be typin’ atcha after I make my calls.
Thoae that can freelqance and get things done. those that can’t sit in a cube 8 hours a day complaining about how unfair life is.
Getting laid off from my “secure full time” job was the best thing that ever happened to me career wise. 8 plus years as an indie and cannot imagine ever working as an employee ever again.
“….different kind of hard work…..”
Exactly. And it’s a kind of work that not everybody is cut out for, for any number of reasons.
Eddie - what field?
Exactly. And it’s a kind of work that not everybody is cut out for, for any number of reasons.
And even if you are the rug can still be pulle dout from underneath you.
Also, in my personal experience as a freelancer, you need red hot skills that are in short supply to find gigs easily and it doesn’t tale long for others to crowd into the field, grasping for the brass ring. IT security has been a hot field recently, but it won’t be long until it gets too crowded.
From what I have seen in my field freelancing currently pays no better than a salaried position, plus no benefits.
Colorado,
i make about 15-20% more than what I would make as an employee. But with 2-3 month vacations, better tax situation ( with a sep i can contribute up to 50k vs. 15k with a 401k for example and 100% medical deduction as opposed to 7.5% AGI)
plus I choose when and if I work during the year. And I never have to worry about the corporate office politics or any crap like that.
And every few months I go somwhere new. New people, new challenges. Keeps things interesting vs. Same thing week in week out year after year.
Me again. I know we’ve talked about this before, but it seems as if there are freelancers and then there are those who really should be classified as employees.
And I never have to worry about the corporate office politics or any crap like that.
I have yet to catch my cameras and computers playing office politics with the furniture.
(Those) that can freelance and get things done. those that can’t sit in a cube 8 hours a day complaining about how unfair life is. Eddie
Are you complaining about this because you think the cube worker’s complaining is unfair?
Disclaimer: Eddie’s free-lance experience may not resemble your own.
You know why temp workers aren’t going to help the economy?
I’m shuttling around between 2-3 different airports locally, plus side trips to STL and DFW (I don’t get paid for my “travel time between jobs). I don’t have time to spend any money, even if I thought these deals were going to last. “Check engine” light went on in the car last night……if I’m lucky, I might get it to the shop a week from tomorrow.
And there is no way in hell I’m going to be buying any big ticket items anytime soon.
“Are you complaining about this because you think the cube worker’s complaining is unfair?”
I think you need to look up the word compalin in the dictionary. You think it means something it doesn’t
From my experience and those of my friends it is lucrative. I have more friends as independents ( I never liked the term freelancer) and they all do just fine. Better than fine actually.
No situation is cookie cutter for everyone. And some people are built for it while others are built for the supposed security of a 9-5 job.
I just don’t agree with the notion that by default, so many here dismiss freelancing as the ugly red headed step-child of the working world.
I think you need to look up the word compalin in the dictionary. You think it means something it doesn’t
Nope, it means what it means. Your were complaining about their complaining when you wrote.
“Thoae that can freelqance and get things done. those that can’t sit in a cube 8 hours a day complaining about how unfair life is.”
Complain definition: To express feelings of pain, dissatisfaction, or resentment. To express negative feelings, especially of dissatisfaction or resentment: grouch, grump, whine. Informal crab, gripe, grouse, kick. Slang beef, bellyache, bitch. See feelings, happy/unhappy.
IN BRIEF: To whine or find fault with something or someone.
Source: Answers dot com
complain definition:
1. to claim or express pain, displeasure, etc.
2. to find fault; declare annoyance
3. to make an accusation; bring a formal charge
Source: yourdictionary dot com
Good question, at least we know that ADP doesn’t have any need to spin things.
Are the ADP figures directly comparable to nonfarm payrolls — i.e., does the 55,000 ADP figure suggest a nonfarm payroll figure of 513,000 increase is “pie in the sky”?
Does non-farm payroll include gov’t jobs? Because the quote above speaks specifically to private industry…
ADP subtracts out stimulus jobs that are known temporary jobs. They also don’t have a birth/death model like the govt report.
As you can imagine the govt jobs report gets revised downward a lot.
Non farm payrolls include government jobs (currently census workers), and an estimate of people entering and leaving the workforce and an estimate of new job creations from new businesses. With that much “noise” in the calculation, the real answer to how many jobs, is “what do you want it to be?”.
I would think that the ADP number would be much more accurate as they just look at how many more (or less) people do thier existing clients have on their payroll this period vs. last and extrapolate that to the entire economy (except federal, state and local govt). A much cleaner, thus more accurate calculation.
In the AP version of that story you’ll find this gem:
“Claims above 400,000 are generally associated with a shrinking economy. But many economists attribute the current high level of claims to another cause.
They say it reflects a greater willingness by laid-off workers to seek unemployment benefits. In a healthier economy, workers who lose jobs expect to find another one quickly and don’t necessarily file for jobless aid.
But according to this view, after a deep recession, people who lose their jobs are more likely to request benefits and claims stay elevated even as the economy recovers.”
WTF? In paycheck-to-paycheck nation we’re supposed to believe this crap? The field of economics is a sham, it’s voodoo I tell ya.
What doesn’t make sense about it? Indeed we are a paycheck-to-paycheck nation, but as long as people are still receiving paychecks from the government, they’re happy (relatively speaking).
Exhibit A
Do you have a different explanation for the incredibly long unemployment duration - despite the fact that unemployment levels are (officially at least) below the 1983 peak?
Yes, today’s Gen X and Gen Y workers expect a higher level of personal fulfillment from their careers.
How’s that?
Not sure what’s the difference. Isn’t “expect a higher level of personal fulfillment” just another way of saying you won’t accept a job that’s beneath you, and that you’d rather stay on unemployment? If not - please elucidate the difference.
P.S. I know of one person for which this is exactly the case. He was unemployed for 8 months, but had job offers and other opportunities that I know he would have taken if he hadn’t been receiving an unemployment check, because he didn’t consider them ideal opportunities.
The majority of people actually cannot afford to live on unemployement only. Particularly if you need to pay for medical, house payments, car payments. Your example is possibly the exception rather than the rule.
The majority of people actually cannot afford to live on unemployement only.
My UI was $400/week (from Texas). If I had to, I imagine I could live on that, but would have had to make drastic changes - rent a room in a house for hopefully $600/month or so, and curtail expenses greatly.
Then again, that was the max amount that Texas would pay out. And I had savings, so I really didn’t have to curtail my lifestyle…
The majority of people actually cannot afford to live on unemployement only.
Agreed, its a mere fraction of the lost salary. You can’t even pay rent with it in higher cost locales.
I think the unemployment check would basically pay my rent check, and not much else. I’m not exactly living life large, either.
Not everyone is paycheck to paycheck. May be hard to believe I know. I was laid off in 2002, i did not collect a dime of govt money.
If “everyone” isn’t paycheck to paycheck then why did the bubble burst?
Simple - because prices were too high, even for the paychecks people were getting before unemployment started going up. Too many people counted on income from their homes to pay the mortgage.
That question maksa no sense. One can have savings and still not afford a 200% increase in an ARM reset. It was a bubble and it burst like all bubbles do whether people live paycheck to paycheck or not. Unless you believe paychecks caused the dotcom bust as well?
Eddie,
( And I’m with you on the employment thing 100% btw )
No, I wouldn’t say “paycheck to paycheck” ( as much as re-fi to re-fi ! ) One of my core complaints ( fuming from the cubefarm if you will? ) is that your Job all during the boom was just a ticket to a really great FICO score!
It was all FICO-driven. It was all about leveraging…. your fico. As far as the Dot.com bust ( even ETrade will only let you margin your account so far? ) so no, I never really saw a connection there.
Thank God our national reserves of unexpectedness remain more than adequate to meet any contingency!!
Missed it by, what, about 15,000,000 needed jobs?
Here’s an interesting listing that just hit the market.
Hurry! They’re not building any more haunted properties!
The 3-story legendary Amityville Horror house just hit the market boasting a renovated boat house and views of the Amityville River
$1,150,000
5bd | 3.5ba | Single-Family Home
ITEM: Finance officials from leading advanced and emerging countries have begun talks today on reshaping the global economic system to prevent debilitating crises like the one that took the world to the brink of a depression in 2008.
< A lot of hot air will emerge from the conference in South Korea, but nothing of substance. What the world needs is another Bretton Woods-style conference aimed at establishing a monetary system based on something more trustworthy than IOUs.
“have begun talks today on reshaping the global economic system to prevent debilitating crises like the one that took the world to the brink of a depression in 2008″
In other words, how can we continue to export high value jobs to low wage countries and keep the unemployed firstworlders consuming and servicing their debt without resorting to more bubbles?
At the end of the day, an IOU is all that money EVER is. It’s a “pay to the bearer” IOU but even when you’re carting aroung pieces of yellow metal, it represents an exchange of past production for future production. The only thing that linking it to a commodity, whether gold, cocoa beans, or big stone coins does is to attempt to limit the supply. And that doesn’t always work. When the Spanish looted the new world all that silveer caused a “price revolution,” back in Spain. When FDR took us off of the gold standard, the government didn’t control nearly enough gold to redeem all the dollars that it had printed. After all, that’s WHY they did it.
Bingo.
Little-known fact - there was quite a bout of inflation in the early 1850’s due to the California gold rush - a lot of new money was put into the system quickly, resulting in prices going up about 30% in a five-year period.
Yes and huge inflation in Europe when Spain brought back gold from the New World.
No offense guys but I think you’re both missing the point? The first step toward curing addiction ( is to get them to go to a meeting! )
I’m not holding my breath but anything at this point is a positive.
Niger Delta oil spills dwarf BP’s Gulf spill.
http://www.guardian.co.uk/world/2010/may/30/oil-spills-nigeria-niger-delta-shell
I’ve always felt that Obama’s goal is to reduce the US to the status of third world, anyway. Looks like the stars are aligning nicely for him.
Dang - didn’t know that. Thanks for the link.
That’s OK, all we need do is cap off that sucker with a small nuke.
The National Review AND Pravda agree on this concept!
http://article.nationalreview.com/435325/nuke-it/daniel-foster
The NRO article includes a link to the Pravda article, which advises Obama to go with the nuke option.
This has hit the mainstream media now. The NY Times is quoting a denial of government nuclear scientists that they are working on this option. Where there’s a denial, there’s probably something going on!
http://www.nytimes.com/2010/06/03/us/03nuke.html?hp
“Where there’s a denial, there’s probably something going on!”
You got that right! I would say we’ll hear of that within the next couple of weeks, if this latest “attempt” fails and with Tony Hayward on the line, it will. And that’s why you don’t want them to use a nuke unless and until Tony Hayward is as far away from this situation as possible. The guy’s a curse, IMO. Mark my words. I’ve signed the online petition demanding his resignation.
I’ve been pleading with my Senators and Rep to GET THIS GUY THE SNOT OUTTA THERE! It will NEVER resolve unless he’s gone and that’s just a cold-blooded fact. You NEVER ask someone who messed things up to solve a problem, it just can’t be done, when they mess up that bad. I promise you, right here, right now, as long as Tony Hayward is even remotely involved, nothing will work, not even that relief well we keep hearing about. The guy’s a complete disaster.
Go ahead and read a little about him on line. His troops don’t seem to care for him much and I suspect some of them probably don’t give a sh*t if the leak gets plugged, just to tweak Hayward. I’m not saying it’s right, but it’s just human nature.
Was talking this over with some other engineers. Problem is that there are so many pipes running down there the blast might cause other pipes to rupture.
Was thinking about maybe a 0.5kT device.
Need to drill a relief well to get the bomb in close and cause the shaft to collapse.
Also think we could use bunker buster or daisy cutter conventional weapon to do the job. Perhaps multiple in a simultaneous detonation. Still a big job to get the engineering together and do something at that depth.
So. There we are discussing peaceful use of the bomb to help the enviroment. Kind of epic reversal of fortune.
Half a kiloton? Do we have anything that small anymore after the Davy Crockett was taken out of service? That’s a subcritical mass which means really high-tech.
[The Davy Crockett was a man launched nuke: think of a bazooka with a small nuke at the end launched by a shoulder-fired tube. Damn, I want one!]
We were talking about that as well.
Might have to strip out a H bomb detonator and find some kind of vehicle to put it in.
[The Davy Crockett was a man launched nuke: think of a bazooka with a small nuke at the end launched by a shoulder-fired tube. Damn, I want one!]
We will need to watch this DennisN character, veeeery carefully.
I’ve always felt that Obama’s goal is to reduce the US to the status of third world ??
To achieve what objective ??
He sees himself as the great avenger, the great equalizer. His target is mainly the middle class. Destroy the middle class, you destroy the country.
The farther we travelled, the more nauseous it became. Soon we were swimming in pools of light Nigerian crude, the best-quality oil in the world. One of the many hundreds of 40-year-old pipelines that crisscross the Niger delta had corroded and spewed oil for several months.
Forest and farmland were now covered in a sheen of greasy oil. Drinking wells were polluted and people were distraught. No one knew how much oil had leaked. “We lost our nets, huts and fishing pots,” said Chief Promise, village leader of Otuegwe and our guide. “This is where we fished and farmed. We have lost our forest. We told Shell of the spill within days, but they did nothing for six months.”
That was the Niger delta a few years ago, where, according to Nigerian academics, writers and environment groups, oil companies have acted with such impunity and recklessness that much of the region has been devastated by leaks.
Regulation we don’t need no regulation the companies will regulate themselves???
When most people are poor gov is becomes a complete tool of corporations. This will likely be our future as the middle class in this country is destroyed.
Really? You think Obama ran for office just so he could reduce the us to 3rd world status? So all the education work politics was all so he could ruin the country? Seriously?
Believe it. Heckuva job, Bammy!
Seafood processors face tough choices.
Seafood processors say they’re in limbo as only a trickle of crabs, oysters and shrimp arrive at their docks, a result of the Gulf oil spill and related closures of waterways to fishing.
If they can’t get seafood to process, they can keep the lights on and meet their payroll for only so long, owners say. But if they shut down entirely, they could lose out on making money if some fishing areas reopen.
“It’s back and forth,” said Allen Estay, owner of Bluewater Shrimp Co. in Dulac. “It’s nerve-wracking. It’s making us crazy, not knowing what tomorrow’s going to bring.”
Since the Deepwater Horizon drilling rig exploded April 20, kicking off a continuing leak of between 19 million and 43 million barrels of oil, wide swaths of the Gulf of Mexico have been closed to fishing, a big blow to the state’s $2.4 billion seafood industry.
Louisiana supplies 69 percent of the shrimp caught in the U.S., 70 percent of its oysters and leads the nation in production of crabs, according to the Louisiana Seafood Promotion and Marketing Board.
“Louisiana…leads the nation in production of crabs”
They’ve recaptured the lead from Lindsey Lohan?
But let’s not count Arizona out. We’re still #1 when it comes to grouch production.
You can just about the entire Gulf aquatic economy from the Mississippi on east, goodbye.
For decades.
This IS our Chernobyl.
“You can just about KISS the entire Gulf…”
Mexico opens California office to provide ID for illegals.
National Security ~ June 3, 2010
The Mexican government is opening a satellite consular office on Catalina Island — a small resort off the California coast with a history of drug smuggling and human trafficking — to provide the island’s illegal Mexican immigrants with identification cards, The Washington Examiner has learned.
The Mexican consular office in Los Angeles issued a flier, a copy of which was obtained by The Examiner, listing the Catalina Island Country Club as the location of its satellite office. It invites Mexicans to visit the office to obtain the identification, called matricular cards, by appointment.
Rep. Dana Rohrabacher, a Republican whose district includes Catalina Island, said handing out matricular cards will exacerbate an already dangerous situation.
“Handing out matricular cards to Mexicans who are not in this country legally is wrong no matter where it’s done,” he said. “But on Catalina it will do more damage. It’s a small island but there’s evidence it’s being used as a portal for illegals to access mainland California.”
“Handing out matricular cards to Mexicans who are not in this country legally is wrong no matter where it’s done,” he said. “But on Catalina it will do more damage. It’s a small island but there’s evidence it’s being used as a portal for illegals to access mainland California.”
They’ve had these cards in Arizona for years. Locally, they’re known as the “get outta jail free” cards.
We had a guy rent a boat from our sailing club to pick up illegals and shuttle them into the port of long beach. Ended up with 60 odd people cramed onto the boat. Surprised me they could somehow fit and not cause the thing to capsize.
Anyhow, he got up to Long Beach and someone sent a Coast Guard boat to intercept. They said it was a tip off…
I guess he got 10 years in jail for smuggling. Was trying to score 10k… This is a little guy trying to make a score while he lives in his 27ft boat down in the harbor. Local character.
Kind of sad when I think about it. Didn’t know if he should have landed in Catalina Harbor. As far as I can tell it doesn’t make much sense as a landing spot unless the Harbor patrol guys are in on things. Basically the harbor is tiny, maybe a couple hundred acres. So, your harbor police check every single boat and are around almost all night. The other landing areas are not real friendly unless you use a raft and then you risk getting yourself killed in the night. Big walk around to the country club in Avalon and then you walk back and raft out again? Also highly visible.
My guess is we are talking about desert rat crossings.
My landmine plan will fix that.
“My landmine plan will fix that.”
I like the landmine plan. With fair warning, of course.
The Houston Chronicle is running an everyday series of “human interest”, “sympathy for illegals” stories.
Those are also a regular feature in our local fishwrap. Let’s just say that the online comments are, ahem, a bit lacking in sympathy for illegals.
The newspaper here won’t even put it on-line.
I wonder why?
I’ve had my mortgage for less than 3 weeks and it’s already been transferred to Fannie (servicing kept with original broker). Well, at least they have a good one to add to their portfolio!
Don’t think I’ve posted since settling. Settlement went smoothly. Property ended up being appraised at $7K more than I paid. While that doesn’t sound like a huge deal, many people around here are finding just the opposite when their appraisals are coming in…they’re finding they’ve overpaid and need to walk or make up the difference. So in that regard, I think I did pretty well. I still maintain that my house could lose another 10-15% in value before all is said and done, but with 25% down I won’t be underwater. I also watch the various online appraisal sites to see what they’re saying about my house. So far, the average of all of them (Zillow much higher, cyberhomes somewhat lower) is spot on what I paid.
As most of you know, this is my first house. I’m now on what I call a “12-year plan”. After my son graduates from high school, I’m free to do whatever at that point (55+ community near the top of that list).
Haven’t moved in yet - got lots of work being done (wallpaper removal, painting, carpeting). I will be officially in on June 19 and then the fun begins! Hopefully I will never have to post about any horror stories.
And, yes, I’ve already sent in my amended tax form to get the credit; as well as the rebate forms to the electric company for my new appliances.
Well, at least they have a good one to add to their portfolio!
Not to worry - if you default - we’ve got your back.
(whether we like it or not)
P.S. Congratulations on the new digs. Sounds like you’re about at the same stage in life as me.
Owning a home is a lot like having a kid - sometimes you hate it, sometimes you love it. And yes - much like having a kid - you certainly will have horror stories; that you can pretty much count on. It really helps to be handy.
“It really helps to be handy.”
By nature, I’m not. But I have learned that owning a home, or even renting one with a landlord who is to strapped to invest much time or money in property maintenance, provides a very good incentive for becoming more handy.
I used to do handy stuff even when renting an apartment. I made a few sets of shelves out on our little 5′ x 8′ 2nd-story patio, and even made a simple mantle for the fireplace (after confirming with the landlord it’d be OK).
It’s in my blood I guess. My father’s side were all engineers and handymen.
Yeah, I’m not handy either. But I probably could be if I had to - and likely will start heading in that direction. My plan is to build an arsenal of handy men and women. As long as I can write the check, I’m good with having someone trustworthy do the work. And I don’t always have to write the check - some of these handyfolk are friends who don’t charge (for little stuff at least).
As long as I can write the check, I’m good with having someone trustworthy do the work.
That’s the hard part - finding someone trustworthy.
What I learned by owning (and renovating a house) is that handy or not, 90% of the time you’ll do a better job than a contractor simply because you care more - it’s your house - so you’ll pay greater attention to the fine details.
Of course for highly-skilled work, if you don’t have the skills - attention to detail won’t help you
“12-year plan”
Are you assuming we aren’t on the Japanese real estate price trajectory ‘twenty-year plan’?
Eh, whatever. I’ll pay down the loan somewhat in those 12 years, I put 25% down, if it stays flat I won’t make a windfall. But I don’t care. I’m not in this to get rich. I’m in it to live and raise my son.
My point isn’t about whether you can pay down the loan. Rather it regards whether you will be able to recover the principle balance from sale proceeds when you are ready to move on in twelve years. Unless the Fed fails miserably in its stealth efforts to monetize the housing bubble, you should be fine.
With 25% down and 12 years paying on the principal, one would hope!
Not too hard to pay off the balance in 12 years. Its a good feeling watching the principle actual go down in the early years. I paid of Casa Spokaneman in 14 years and should have done it in 10.
Wow Coaster, it sounds like you are all in. You really held out on us in the group talk about that 12 year plan. There would have been plenty of live ammo in that angle. You have done what you wanted to do, and sometimes that in itself is a necessity. i did this with a farm years back, had to have a try at it, once was enough though.
I haven’t posted much in the menatime about my life without a house! The boat is still in drydock as I work on the engine overhauls. I’ve been living in an RV at the boat club in the meantime and life without responsibility seems to wear very well. No rent or utilities (OK it cost $600 for the season) wears well too, and I don’t watch the Real Estate listings anymore. I guess since I’m 55+ I am on the 0 year plan.
Hey, living where children are banned sounds like a really really bad idea. Like a room without windows.
A good neighborhood is balanced. Young families,
grandparents, and kids.
I agree. I half joke about the 55+ plan 12 years from now. Point being, though, is to get my son through school in a nice, stable environment and then I can go wherever I please. Which may be nowhere!
This neighborhood is exactly as you describe. It’s great. I have some older neighbors who’ve lived there since they built the houses 33 years ago, and some newer (they say it’s about 50/50 original owners to not). The people I bought from were original owners - wife passed away a few months ago and, sadly, the 91-year-old husband died last week. There are lots of kids for my son to play with (vs. none at our townhouse rental).
I appreciate all the congratulations! You guys have been very supportive - even if you didn’t think it was time to buy.
Yes a balanced neighborhood sounds great, however that tends not to be the case. In the neighborhoods I’ve lived in one group tend to think that they are the only ones that matter. It’s either the kids run rampant and think the entire block is their playground, not moving out of the way of cars on the street, etc or the grandparents think that it should be complete silence and everyone must keep their yards in perfect order or people without children are rant against everyone else not live by their ideals.
I would like to live in a balanced area, however when I hit 55 I will move to a senior community as long as I can keep my dogs with me.
A good neighborhood is balanced. Young families, grandparents, and kids ??
I totally agree…My neighborhood has went from balanced to 95% retiree’s…Although quiet, its kind of boring and even depressing sometimes…
eastcoaster
I am elated for you. What are the specs, and what made you decide on this home vs. others?
I bet you son is bouncing off the ceiling with anticipation.
“Hey, living where children are banned sounds like a really really bad idea.”
Yep, we hate the fact that there are no after-dark basketball games in the driveway next door, that we never hear a boom-box car drive down our street, and that we can leave our front door unlocked. We also hate the fact that all our neighbors are home during the week, instead of all the nearby houses being empty during the day.
But you do get to hear the hollow thud of old people backing over trash cans, or the unique sound made when a front fender hits the garage door frame…….
The tennis balls hanging in the garage at windshield height.
And getting to use words like “whippersnapper”.
“The tennis balls hanging in the garage at windshield height.”
Wow, I always wondered how you guys aviation guys flew those planes into the hangers without bending the wings.
House is 33 years old. Ranch with full walkout basement (2/3 finished) and full attic. 3BR (could be 4 if you moved the washer/dryer to the basement - the laundry room has a window and a closet and could be a nursery or office). 2 bath. 1450 sq. ft. not including basement. Front porch, back deck. No garage (which is the only drawback I have, but I didn’t make it a dealbreaker). 1/3 acre - nice, private backyard. Walking distance to son’s elementary and middle schools. It’s considered the “move up” neighborhood in this school district. Smaller house among larger ones, but not so bad to be small fish in big pond (when it comes to retaining home value) and the size is perfect for my little guy and myself. Neighbors all seem very nice so far; son’s already made a friend across the street.
Property ended up being appraised at $7K more than I paid.
QUICK - liberate that equity and buy a used Hummer…
“Quick - liberate that equity” LOL
Yeah Eastcoaster, where’s your sense of entitlement?
( Congrats! btw ) I realize it’s not a popular take on things here but I’ve always felt it’s an important element in a marriage that a couple at least ‘feel’ like they are working on/toward something together.
Well, unfortunately, there’s no “we” in my deal. I’m not married (anymore) so this is been 100% me. Very difficult, but a whole lot of sense of pride when I succeed. Would I prefer to be doing this with a partner? Yes. But my life would never move forward if I waited for that.
eastcoaster,
No offense intended ( and I kind of thought of that as I hit submit ) In any event, it’s something both you and your son can exhibit your commitment to each other.
Sadly what was a long standing cornerstone of American life became the “2 Year Plan” where couples commitment was to Flip the property asap and move up the property ladder etc. Funny how perverted that became?
So long as you can continue to afford the payments and don’t want to sell, being upside down doesn’t matter per se. What matters is whether you’re going to kick yourself for paying more than you had to if the price declines. Since it’s almost as hard to figure out the exact bottom as it is the exact top, worrying about that will get you nowhere.
I certainly do look askance at Zillow appraisals, they’re worth what you paid for them. Certainly in my neighborhood they seem VASTLY inflated. In a market where distressed sellers are quite common, their algorighm seems to ignore them, to the point where the house two doors down from me that went for $162,750 in Feb zillows for $272,000. But different markets and neighborhoods are different, so YMMV.
There’s always kicking room though. Casa S. could probably have sold for a tad over $300K at the peak (paid $107K in 1988 and have put around $50K or upgrades in since), when a week on market was considered a problem. Now, maybe $250K, with a fair amount of time on the market. There are times I wish I had followed my instincts and sold at the peak and rented, but I know Mrs. S. would not have been happy with that result. All in all though, after 22 years of ownership, it seems to have been a good move.
Of course many of us who saw the bubble early would have sold way before peak if cashing out had been our inclination. You shouldn’t waste too much time kicking yourself for decisions that you’ve made in the past. But you can try to learn from your mistakes and not make the same ones again.
Hi Eastcoaster. I wish you all the best in your new place. And I’d reconsider one of those 55+ places. Lots of retired people in your business, HOA dues, and CC&Rs. Stay where you are, pay it off, and move only if your son does.
I hope you create a lot of fond memories raising your kid in your new home. My twins can’t wait to get a dog, a cat, birds, and other pets. Have fun, lots and lots of fun!
At the end of the day, a house is where you raise a family; it’s not an investment. Walking distance to school and so on shows you’ve got your priorities straight. Congratulations!
My father would have been 98 today. He was so cool. I didn’t grow up with him around but was visiting him when CNN announced that cold fusion discovery back in the 80s. I was elated but he said, sounds like the perpetual-motion machine again.
When I bought my first house he said, could you get 1% rent for it? because he’d done all that. Had I grown up in his house things might have been different for me.
“because he’d done all that. Had I grown up in his house things might have been different for me.”
That’s because “he’d done all that”. Each generation seems to have to learn the hard way the same lessons previous generations have had to learn the hard way.
The beat goes on.
Unfortunately, the ones who do much of the child-rearing are clueless about the read world and tend toward magical thinking.
I was elated but he said, sounds like the perpetual-motion machine again. Like the RE bubble, the people who really wanted to believe in an endless supply of free energy/money got really angry at those of us who pooh-poohed the idea.
Life without those little grocery store plastic bags. . .
SACRAMENTO, Calif. - It could soon cost California shoppers at the checkout aisle if they forget to bring their own bags to the store under what would be the nation’s first statewide plastic bag ban.
The California Assembly on Wednesday passed legislation prohibiting pharmacies and grocery, liquor and convenience stores from giving out plastic bags. The bill also calls for customers to be charged for using store-issued paper bags.
wmbz,
But… bu.. if we all just stay renters we’ll be able to skirt all of this exposure to taxation, right?
Yeah, even hiding out in the woods is going to cost you more, at least in Oregon. Effective May 1 they raised fees on all park camping. Even living in a tent will cost you $18 a night. $24 for RV’s. At $720 a month you can rent a 2bd. apt. in the Portland area. Look for more.
“Even living in a tent will cost you $18 a night. $24 for RV’s. At $720 a month you can rent a 2bd. apt. in the Portland area. Look for more.”
This trend frustrates me to no end. How much can it cost to put in and maintain a “no-utilities” tent site???
Hate it…
Prime-Is-Contained,
And they implemented is RIGHT before the outdoor season so a lot of families/campers had already made their plans and reservations etc!
I’ve been a backer for user fees but this is ridiculous. As I’ve mentioned before, campers have a lot tied up in gear, RV’s etc. and by God they’re going to USE them! The State knows this so where they’re concerned, this was a no-brainer.
Oh, for crying out loud! I’ve been bringing my own bags to the store for decades. You kind of have to when you get around by bike.
It’s not an imposition to get your own re-usable sack and bring it with you when you shop. Really, it’s not.
Just curios - how many kids do you have?
Let me rephrase actually, since it depends on the situation -
How many people do you buy groceries for?
Slim,
Mrs. D has re-used her shopping bag for years, so no revelation there. My point was, when property values did nothing but go UP ( and prop. taxes as well ) why wasn’t this implemented THEN!?
All I see is another Post-Bust way to get in your wallet. Moreover, why should that be treated necessarily as tax rev. for the ’state’? It’s the store that gets stuck with the mess.
I’m of the mind that people should be rewarded for bringing their own bags. Makes things more fun.
For example, one of my favorite locally owned indie bookstores has a wooden nickel system. If you bring your own bag, they put a wooden nickel into a collection box that sits next to the cash register. After a certain period of time, they convert the wooden nickels into real-live donations to grassroots community groups.
Even though I’m a hardcore BYO bagger, I like this idea.
I bought a canvas bag from Safeway almost 20 years ago and they give back a nickel for using it. We usually need more bags but those ones really hold a lot and they’re really strong. Trouble is getting the checker to load it up - anything with a handle goes outside of course. I’ve never figured out why.
Imagine, American Pioneers actually made it across the West without seat belts, or as Radical Rick always says:
“How tough is it Hwy?”
Yeah, but how many people did they have to worry about running stoplights?
We make one giant trip for groceries every week and use about 12 bags. I guess the cloth bag manufacturers are going to do well, since I have to buy a bunch now.
I also use my grocery store plastic bags as trash liners. So now I’ll be purchasing plastic trash bags for the first time.
In my case, I’ll lose money, my grocery store will save money, and the environment will be a wash because I’ll still use plastic bags for trash. Oh well.
REhobbyist,
Good point ( and I think the states KNOW that ) making this even more of a ruse.
“I guess the cloth bag manufacturers are going to do well, since I have to buy a bunch now.”
“I also use my grocery store plastic bags as trash liners. So now I’ll be purchasing plastic trash bags for the first time.”
I have found that one cloth bag holds the same as three plastic bags, so you won’t have to buy too many cloth ones. Alas, the cloth ones do wear out too. And as certain containers (meat, cut fruit) have a tendency to leak, either the bagger will use plastic for those leaky items anyway, or you have to wash the cloth bag later. I reuse those plastic bags to clean up after the pet, so I’d have to buy plastic bags for that purpose too. While I am all for taking measures to reduce our environmental footprint, it sounds like Cali didn’t really think this one through.
Do baggy pants count?
Sure, as long as you have ‘em belted and worn around your waist. (Yours Truly really, really, really does not like the saggy pants look.)
I was kidding from the perspective of just stick all the items in your pockets.
What if you say you don’t want any bags? Just throw it all in the cart.
“Oh, for crying out loud! I’ve been bringing my own bags to the store for decades. You kind of have to when you get around by bike.”
Yeah…sometimes my g/f travels at Mach 1 speed plus upon her broom and she appears to manage it just fine too.
Plastic bags would be alright if they implemented recycling, but many places don’t.
I use mine for the small trashcans around my house.
I grew up with paper bags. You saved and used them for your trash can as well. At least they were biodegradable.
Buffett openly confesses his membership in the ‘No One Could Have Seen It Coming’ club…
From today’s WSJ, front and center of page A1:
‘I Was Wrong on It, Too’: Buffett on the Housing Bubble
Will Buffett’s legions of disciples change religion after reading today’s WSJ?
Does anyone honestly believe he didn’t see it coming?
Nope.He is full of sh@t as usual.Just trying to get more sympathy from the govt so his investments rise.
eastcoaster,
True that. I’ve found ref’s dating back as far as ‘02 for WB warning on the proliferate over use of deriv’s. So obviously he was concerned, this is simply his getting in step w/ revisionist thinking ex-post-facto.
But as CIBT points out, I don’t think there’s any doubt his strategies have become hopelessly outdated.
Do you folks think his tremendous wealth implies that Buffett is some kind of supernatural creature? Come on — if he is so heavily invested in Moody’s, he probably takes economic advice from Zandi…
A govt-sponsored board will select ratings firms, according to Al Franken’s proposal. I am sure he means well, but the idea that the government is somehow going to magically choose ratings firms that get it right is DOA.
Look no further than how wrong the Fed, the Treasury, Fannie Mae, Freddie Mac, &c were on the housing bubble for evidence on how well the government is at sizing up manias. If these guys couldn’t see it coming themselves, how will they manage to select ratings firms capable of seeing anything coming that could imply a future collapse of asset prices?
As to a better model of credit ratings, why not try to figure out how to replace the Moody’s/Fitch/S&P Groupthink model with The Wisdom of Crowds?
* The Wall Street Journal
* BUSINESS
* JUNE 3, 2010, 8:52 A.M. ET
Buffett Defends Moody’s Managers
By AARON LUCCHETTI
Billionaire Warren Buffett defended his firm’s investment in battered Moody’s Corp., saying that mortgage-bond ratings issued by the firm were overwhelmed by the “greatest bubble I’ve seen in my life.”
But the Berkshire Hathaway Inc. chief executive expressed doubts that even radical changes to the credit-ratings industry, such as creating a government-appointed board to select rating firms, would improve the quality and accuracy of ratings.
“I’m not arguing that this is the perfect model,” Mr. Buffett said Wednesday at a hearing by the Financial Crisis Inquiry Commission, which subpoenaed the investor as part of the congressional panel’s probe of the meltdown. “It’s very difficult to think of an alternative where the user pays. I’m not going to pay,” he said.
…
Several panelists praised Mr. Buffett. But the commission’s co-chairman, Bill Thomas, urged him to speak out more forcefully about needed changes in the financial system. “You’ve got to do more of this. This may be your real legacy,” said Mr. Thomas.
“I don’t disagree with you,” responded Mr. Buffett. “Perhaps no one spoke out enough in the past years during the bubble. Certainly, I could have done more.”
The fate of the pending proposal in Congress to create a government-appointed board to select rating firms is up in the air. The Senate approved the plan to require the process for initial ratings of structured-finance deals, but the House version of the financial-overhaul bill doesn’t include the proposal.
“I’m very confident that when it’s put together with the House version, it will remain,” Sen. Al Franken (D., Minn.), who proposed the measure, said Wednesday.
…
This is turning into a financial version of the Nuremberg trials. (except no one’s hanging) There’s carnage everywhere, but no one is guilty.
Just a little more pansyifcation…
Win a soccer game by more than five points and you lose, Ottawa league says.
In yet another nod to the protection of fledgling self-esteem, an Ottawa children’s soccer league has introduced a rule that says any team that wins a game by more than five points will lose by default.
The Gloucester Dragons Recreational Soccer league’s newly implemented edict is intended to dissuade a runaway game in favour of sportsmanship. The rule replaces its five-point mercy regulation, whereby any points scored beyond a five-point differential would not be registered.
Kevin Cappon said he first heard about the rule on May 20 — right after he had scored his team’s last allowable goal. His team then tossed the ball around for fear of losing the game.
He said if anything, the league’s new rule will coddle sore losers.
I move that all games end in a tie. When one team scores the other team should be allocated the same number of points.
What’s great about this idea is even if one team doesn’t bother to show up it won’t get penalized.
Sort of like the work ethic of a few people I know.
Cartoonist Horsley had the same idea….
http://blog.seattlepi.com/davidhorsey/archives/206958.asp
That cartoon is a riot!
Now, a question: If I want to go out and kill my opponent when I play a sport, but, at the same time, I’m honest about my feelings when the game doesn’t go my way, does that make me a purple American?
That’s a really funny cartoon…
Hey wait, that’s MY redneck brother on the snowmobile !!
Let’s cut to the chase and just fulfill everyone’s dreams right here and now. Certainly it’s in power of the world’s enlightened politicial elite to create heaven on earth. How mankind ever survived without them is beyond me.
Points taken guys, but for anyone that’s coached kid’s sports, getting whitewashed is demoralizing for some of the kids. They just up and quit.
I coached an Undefeated! girl’s BB youth league team and if we got up by too much, we put in the scrubs. It’s supposed to be about fun, certainly at that level. Now ‘mandating’ is a whole other issue!
If it’s about fun, then why aren’t the “scrubs” seeing equal playing time? They might even gain enough experience to eventually not be seen as a scrub…
sleepless,
Oh true enough. We’d even gone to the extremes of having a few of our girls ( all incredibly tall! ) play for the other team!
I’m proud to say some of those gals now play at the college level and any time I see them out in town they always comment on how fun it was! To be truthful, I usually showed up for ‘practice’ w/ the paper and the kids kind of ran things. I still don’t know the first thing about b’ ball.
If it’s about fun, then why aren’t the “scrubs” seeing equal playing time? They might even gain enough experience to eventually not be seen as a scrub…
In rec soccer there are no tryouts and in theory everyone plays. Rec leagues don’t keep standings or scores. Every once in a while there is a team that is super competitive and blows out the others. Those kids should be playing in competitive but for some reason don’t (probably due to cost).
Keep in mind that most kids who play rec soccer are doing it to get the exercise, learn some sportsmanship (be a good loser/be a gracious winner) and learn some teamwork. The talented ones move on to competitive leagues.
My son started out in rec, where he played for two years, after which he moved on to competitive, along with a few other talented boys on the team. The other kids stayed behind until they got too old for rec soccer.
I’m guessing that the Ottawa rec league imposed this rule because of bad sportsmanship. I have seen blowouts in rec where the winners taunt the losers, behavior that would warrant a red card in a competitive league.
“I have seen blowouts in rec where the winners taunt the losers, behavior that would warrant a red card in a competitive league.”
How about we teach them the error of their ways by giving red cards regardless of whether the league is competitive or rec?
How about we teach them the error of their ways by giving red cards regardless of whether the league is competitive or rec?
A red cards means ejection from the field, and unlike in American sports the ejected player cannot be replaced with another, its a penalty box situation that lasts the whole game. It also means suspension for the next two games.
Needless to say the coach as well as teammates do not look upon a red card as something trivial. The ejected player will receive plenty of grief.
We need to get back to the original spirit of play. Those who win by more than five get to give the losers wedgies.
In yet another nod to the protection of fledgling self-esteem, an Ottawa children’s soccer league has introduced a rule that says any team that wins a game by more than five points will lose by default.
When I coached youth soccer, there was simply a gentleman’s agreement to not run up the score. The league didn’t keep records as far as wins and losses - they simply wanted it to be about playing the game. But it was made clear to the coaches that if you’re up by a lot or have the other team severely out-matched, you should switch up some players, put your best forward in goalie, etc.
Made sense to me. 4th graders are too young to have to deal with getting pounded 15-0…
Granted, I ended up losing a game because I switched up my players too soon - after being up by only 2 points.
drumminj,
Moreover, the contra to all of this is, promoting the very “just win at all cost” BS mentality we accuse corp. America of playing with all the time here!
Winning “graciously” and a sense of fair play is what we taught in this country for years. In ways, you can almost assert that it’s the Jock Mentality so prevalent in our boardrooms that led us where we are?
Winning “graciously” and a sense of fair play is what we taught in this country for years.
We all know that “winners” are supposed to be arrogant, in your face jerks. That’s were our popular culture has taken us.
In Colorado,
Well isn’t that the way all our Bubble-Denying neighbors treated ‘us’ over the last ten years or so? Further, you needn’t even ‘win’ ( judging from the scoreboard ) just being more obnoxious/trash talking should suffice?
Up to and directly after selling our place in late ‘03 ( closed early ‘04 ) trying to ‘justify’ your actions to friends was uphill to say the least. What counts any more is, who is winning ‘now’. Even though BB’s have been more than vindicated.., they led the game longer, well, so far?
So behind by 5…Sounds like time for an own goal to me.
I can see teams inflicting self-goals. Soon they’ll be playing in the “opposite direction”.
What’s the difference between telling kid’s soccer teams if they lose by more than 5 goals they actually win, and guaranteeing TBTF banks that if they lose enough money playing the market that the taxpayers will bail them out?
The Gloucester Dragons Recreational Soccer league’s newly implemented edict is intended to dissuade a runaway game in favour of sportsmanship.
It is rec after all. The idea is to play for fun.
Competitive youth soccer doesn’t have these sorts of rules. If you end up near the bottom of your division yout team gets demoted.
Thing is, I DO like the original mercy rule. Beating people when they’re down isn’t something that belongs in rec club sports IMHO.
“In yet another nod to the protection of fledgling self-esteem, an Ottawa children’s soccer league has introduced a rule that says any team that wins a game by more than five points will lose by default.”
Ya know, if “protecting self esteem” is the goal here, there are some other options. For example, make the parents choose between A) telling the parents to go home and come back when practice or the game is over, or B) require the parents to play the same sport on an adjacent field (they’ll also get some exercize, they’ll serve a better example to their kids than they would sitting on their butts on the sidelines, and they’d (hopefully) be too distracted to yell at their kids, the coach, or anyone else.
I’d pull my kids out of the league so fast they wouldn’t even time to say “GOAL!”
Local news. Our small town is now on a run to raise
cash. A friend is leasing a small office space to a
doctor and is installing a second john and a few new
walls, new carpeting, and paint. The city hit him
with over $18,000.00 in fees for SDC’s and permits.
The permit fee to extend the line from the existing
john to the new one is $840.00. All fees, which
are legal in OR, are not subject to voter approval
and can be raised by whim. Grrrrrrrrrrrrrrr.
As I’ve said many times, the grass is “greener” here. Perception is alive and well as reality about this state.
My town has proposed new improvement “districts” which IIRC would actually coincide with the whole city. This is to raise money for maintenance without it going to a vote.
This is a GREAT example, Rancher, of how it’s not the labor costs that are killing this country, but excessive fees at the local government level.
Housing Double Dip a Done Deal -Diana Olick
http://www.cnbc.com/id/37469420
Does it come with chocolate sauce and sprinkles on top?
More like chocolate ex lax.
(couldn’t resist)
Dave Ramsey was on Fox and Friends this AM discussing strategic defaults. He made the blanket statement that if you could afford to pay your mortgage you should regardless of how underwater you are, because A.) it is the moral thing to do, and B.) the house will regain its value in “a few years”. If you live in Phoenix, inland empire of CA, S. Florida, or Detroit, ya gotta wonder what he is smoking.
Even here in Spokane, where we didn’t have a huge boom/bust, I doubt we will see ‘07 house prices for a least 10 years.
Well, since someone else did it, I figure I might as well come clean too. I also purchased a house a few weeks ago. Paid about 2001-2 prices for it, 90/sq ft (total), 110/sq ft (under air). I’m happy with the purchase; the sellers came with 175K to get out of the house (they bought in 2004). Conventional loan; insane interest rate (in the 4s, that’s incredible)..
Did I do “well”? Compared to comps TODAY, yes, I did. Compared to where prices will be in 12-24 months? I wouldn’t bet on it.. But I also wouldn’t bet against it.
Why did I buy? A few reasons.. My rental was being foreclosed (and was getting towards the “sheriff throws your stuff out” stage. I was holding a lot of cash; which, given the economic climate, was making me nervous. I think, at this stage of the game, inflation is a large (and becoming larger) risk; it’s the only real way “out” of the housing problem. Push inflation way up and suddenly, no more debt problems. And, frankly, I am at the stage (thankfully) where I could take a 30%+ loss on the house I just purchased and still be “fine” financially. Like all things; it was just time (for me) and I was able to find a house I like at a price I think is reasonable.
In 2006, it was blatantly clear what was going to happen to house prices. Today, I think it’s much murkier, there’s a good chance that prices will continue to fall (probably more likely), but there’s also a good chance that inflation will take hold and prices will stabilize. And, finally, I just didn’t want to move again; my rent payment was about 75% of my new home payment (all told, taxes, insurance, HOA, etc), for another 25% I got the “security” of knowing that I wasn’t going to have to move again (and a house that’s almost 2X the size).
How do I like it so far? I hate it. I’ve been doing nothing but building/painting/working on the house since we moved it. I’m assuming that this pace will slow, but, right now, I’m sorely missing the “carefree renter days”. But, I do really like this house; it’s a great location (small community on the water), and I’m assuming that I’ll like it better when I don’t just work on it non-stop. I’m making lots of “green” upgrades; not because I really believe in the whole “global warming” thing; but because of the money it will save me long term. That’s a good feeling; being able to effect changes that will have a persistent impact on my expenses moving forward.. So, I like that part..
Anyway, I welcome comments, but, at the same time, I’m not changing my tune (about the housing bubble or prices in general); all signs today point to down.. Tax credit is gone, interest rates just can’t go any lower (can they); as rates rise home prices will fall in response.. The only small change that I see today is that inflation is, IMHO, becoming a much more real threat. It’s the “final solution” to the housing/credit problem, and, IMHO, it’s got to be something that’s on our leader’s radar as the last ditch attempt to fix this problem. I’m not sure what else they have left; it’s just a question as to which outcome is less horrible; inflation or a continued collapse of the banking/housing sector.
I’ve had a similar conversation with myself. If prices where I live had fallen back to even 2003-4 levels (my house was sold for 420K then), we’d buy. But the Wall St. money floats all houses here. No decline, possibly a 5-10% increase in Forest Hills over past 2 years we’ve rented.
Only options are to rent and hope, while dreading signs of inflation, or to move further out and take on a 1.5 hour commute. Do wish we could leave NYC altogether. Luck to you, Michael. Sounds like you made a reasonable choice.
“But the Wall St. money floats all houses here.”
A rising liquidity tsunami tide lifts all asset prices.
I’m making lots of “green” upgrades; not because I really believe in the whole “global warming” thing; but because of the money it will save me long term.
My grandparents were real green. Cold in the winter in the house? - put on a sweater…
LOL - well back then it was more because a lot of people didn’t have a lot of green.
“the “sheriff throws your stuff out” stage”
Michael, congrats! Bubble-sitting is a pita ( I don’t care what anyone says! ) My former LL ( which… became my freaking ’seller’ ) is now terminal w/ cancer. They’re giving him less than three mos.
So NOW… “I” am the @zzhole and everyone is giving ‘me’ the cold shoulder for having been so vocal over what was obviously a week-handed LL. Oh and I’m sure your former LL was forwarding every penny you paid in rent to the lender…
“weak” handed ( my bad )
Being money/engery concious has been hijacked by the GREEN’s….
Isn’t that the truth. I’m not “green”, I’m just cheap. I’m pulling all the regular bulbs for CFLs (mercury problem at some point, I’m sure; the next environmental disaster in the making!), did some AC upgrades, and am looking at a heat pump for hot water (I’m in FL and the HW heater is in the garage; it’s like the perfect setup for a heat pump).. Again, not really a “green” thing, more a “save money long term” thing. Penny wise and pound foolish…
However, the house has a pool (and I can just hear that filter pump spinning the electric meter) and it’s larger than my old place; I’m hoping that all the “green” (cheap homeowner) upgrades I do will let me keep my electric bill about the same as it was before. If the ROI is <3 years, IMHO, it’s probably worth doing. And, since we’ve got such a generous president; a lot of this stuff qualifies for tax credits.. Which, of course, just jacks the price of them up, but, hey, at least I get something back!
The green movement has been totally commodified at this point. Nearly any green story in the MSM involves buying something new, as opposed to simply getting by with less or maximizing use value. Mainstream greenies are a conformist/consumerist joke.
+10 edgewater. There’s a joke about the employee at the water bottling factory. The boss says “Put something on the label to show how environmentally friendly we are.” All the employee can think to write is “Don’t buy me!”
The green movement has been totally commodified at this point. Nearly any green story in the MSM involves buying something new, as opposed to simply getting by with less or maximizing use value. Mainstream greenies are a conformist/consumerist joke.
Nice stereotyping.
Plenty in the green movement that push for using less, and maximizing value. Plenty who walk, ride their bike or take a bus to work. Plenty who choose to live in a small house in the city over a Castle in the burbs.
I included the word “mainstream” in there for exactly this reason. An example of “mainstream” green would be the schlock emanating from the GE/NBC/MSNBC/TWC politico media complex.
measton,
And I don’t want to speak for Edge but, his point stands, “politico media complex schlock” notwithstanding.
I walk to work, live small ( 1,200 s/f condo ) and cut corners wherever possible! The point is.., to marketers/corp. America, I might as well just start pulling dirt over myself now! I’m dead to them anyway?
The Green Movement might be ‘advocating’ all of the above, and that’s great but my Sched. C still encourages waste/consumption of all sorts. We need to make it PAY to be more efficient! Until then, it’s just lip service.
Unfortunately, as an environmentalist who “push[s] for using less, and maximizing value… who… ride [his] bike or take[s] a [ferry] to work… who choose[s] to live in a small house in the city over a Castle in the burbs.”, I have to agree with those saying that there is a tremendous amount of green washing going on.
I have friends who buy new Prii (Latin plural?) when their old cars are fine. I chide them by asking if they’ve come out with a model that allows for more than one occupant. Fools and poseurs.
We just planted all our our veggies in the compost that we made from all of our food and paper waste with the help of the worms that I collected during a big storm this winter. Cutting down on buying stuff will actually make us more able to give stuff away.
The antithesis (and solution to) the rampant greed prevalent in this country is not thrift, but rather generosity.
MrBubble
I agree with that 100% if you were talking about the MSM and corporate America.
BP - Beyond Petroleum????
my father used to tell a vegitarian chic i was dating that he used to be a vegetarian as a boy…not by choice.
I remember an article by some foodie complaining about how unhealthy the cheap food that you could afford with foodstamp was…ground beef, chicken drumsticks etc. Of course I was thinking–Idiot, he thinks that you can afford to eat meat every meal when you’re on foodstamps.
Congratulations Mike,
It sounds like you didn’t choose Mirasol or any of the other new communities.
I also recently gave in and bought in the area. Most on here won’t understand our decisions since they are still seeing paltry declines in their area. I paid $80/sq ft, but we’re not on the water. The house needs some updating but the roof is only 3 years old. It is a safe, older community with little turnover in the last decade. I expect some additional decline but not more than my 30% down payment. I did pay 50% more than the previous sale, but that was in 1987. For the previous owner that was a 1.8% annual return versus 3% inflation. It is hard to argue housing as a good investment, even in the long run, but I recently started a family and needed more stability.
I already miss being a renter even though I moved at least 10 times in 15 years. The house is a lot of work and it was always nice to get a fresh start every year or two.
LOL; the one thing I don’t miss about being a renter is the “fresh start”. I hate moving!
No, I bought in Hobe Sound (off Gomez, if you know the area). I really couldn’t find anything that I liked in PBG that was reasonably priced. Mirasol houses (and many new places) are just not my style. The 20′ ceilings and expansive areas.. I just think it’s going to look “tacky” in 10 years; kind of like the gilded age houses look today. And, that’s just not who I am, I like nice things, but I’m not big into the “show off” stuff. I see those huge/expansive ceilings as “bling”, not really what I wanted for a place that I’ll be for a long, long time.
I completely agree about that style becoming dated and I think you made a much better choice. All of the new PBG HOA’s are in serious trouble and waterfront will always hold its value better.
Congrats to you as well!
FWIW - even though I (as most people on HBB) think prices are headed down some more - I think they’ve definitely experienced the bulk of their declines already, in nominal terms. I think we’re firmly in “buying may be a good decision if your situation is right” territory (vs. 2-3 years ago when we were in “buy only if you’re a fool” territory).
I live in Henderson, NV and was thinking about taking the plunge, I have property back in Oklahoma. I am fully aware of what it takes to own - (Pay a bank).
I am looking to possibly purchase at the end of this year or the begining of 2011, I don’t see any rush at this point in time especially in the Vegas area, still an overabundance of homes.
Since prices are comming down and most likley will not increase for some time I would greatly appreiciate any suggestions as to what criteiria I should use to determine looking at purchasing a home.
One rule that I use is purchase vs. rent, I also belive that the Vegas area realestat will appreciate faster than property in the central part of the country.
Why? What real economic output does Vegas produce? The whole city seems pretty disposable to me.
The trend is my freind.
-Vegas has the capacity for conventions at good prices.
-Vegas was is one of the fastest growing cities, even with the slow down the population still increased above other areas.
-There is only so much water and they can only build so many houses until they hit a limmit, unless they quit allowing water to go to California
-McCarren airport ranked 7 in 2005, is currently expanding.
If California legalizes gambling….Las Vegas will become a ghost town.
I was watching the history channel the other night and it was talking about quartz formations in ca and nv.Was talking about how quartz veins in ca were formed from plate tectonics and typically ran north to south in ca.The quartz formations in nv had a more random pattern and they firgured out the quartz formations in nv were from hot springs.
NV has a lot of minerals from what I understand.Mining is huge there.
When free electricity from dams goes away, Vegas goes away.
Water in Lake Mead is a key as well.
Someday they will come to their senses and allow the Nuclear waste repository at Yucca Mt. to go forward. Maybe after Harry Reid retires. That would be a huge boost to the NV economy.
Not sure if California would legalize gambling, they would have alot of problems with the Native American Tribes.
Also, retired people move to Vegas becaucse of the tax laws. Somthing California would never do.
One of my clients, a large US company, has its main data center in Las Vegas. (Personally, I’d put it in someplace cooler, but I suppose there was plenty of dark fiber running from LA and their other locations to there….)
I’d heard that the great place for data centers was now along the Columbia river near The Dalles in Oregon. Lots of cheap hydro power and moderate climate.
DennisN,
And with it, “lots” of new “high-paying” jobs. *cough*
The speculators came calling once Google opened that server center for that reason. I heard a story that one guy bought 28 houses in The Dalles. Now that reality has hit that there are only a few server jockeys maintaining the place, I wonder how that plan is working out.
They put the data center in Vegas to make trips to it like a vacation
Really, Vegas seems ripe for solar energy. Sun tracking mirrors aimed at a tower with heat collection on the top type of solar.
‘Really, Vegas seems ripe for solar energy. Sun tracking mirrors aimed at a tower with heat collection on the top type of solar.’
The technology is proven, too:
http://www.youtube.com/watch?v=F3I-VDAhELg
If I were considering buying in Clark Co., my biggest concern would be the continuing quality of the neighborhood. In other words will the massive number of vacancies eventually make the neighborhood nominally unlivable? When you start getting to the point where 30% or more of the homes are vacant, the quality of the neighborhood has to suffer. Perhaps some of the older neighborhoods are immune to this problem, but the newer ones seem like trouble in the making.
Congrats. I think you will be ok. Now isn’t bad if you are putting less than 50% down, and I think Fall may be optimal (combo of low rates and low sales). I was thinking of buying for all cash, so I may ride the stock market a bit and pray for inflation sooner rather than later, then cash out a couple of months in on the spike and buy a home. I could leverage by leaving my money in the stock market and also buy a home in the Fall with a mortgage, but that is not how I roll. Seems like you have other other goals than maximizing ROR, and that is cool.
congrats. we had to make a similar decision. we were renting, saving a ton, but new owners took over our apt complex and they were upgrading and hiking the rent. we were getting kicked out … plus we were ready to stop living with people above/below us. Looked into rents for houses in the neighborhood, and it was maybe $100 less a month than full mortgage, taxes, insurance, and in some cases renting was more than buying … so we took the plunge. Got a decent deal. Best schools around, very norman rockwell like place. it was great to go into the buying process with cash and perfect credit. got a very low rate, put 10% down, we’re already paying extra toward the principle so we will pay it off sooner, and overall we feel good.
we agree that prices will slide a bit, but we feel ok with our decision. It’s a tough call and you have to weigh a lot of factors …
JLR,
Nice points. I think so many of us get so wrapped around the economics of The Bubble we’ve lost sight of the fact that (1) of the primary driving factors behind owning your own home was ditching your d!ckhead of a LL!
Is it worth paying 2 X, 3X what equiv. rent would be? Hell no! But all things being equal, I’d rather pay my rent to the bank and think that’s held true as long as I’ve been an adult.
Nice points. I think so many of us get so wrapped around the economics of The Bubble we’ve lost sight of the fact that (1) of the primary driving factors behind owning your own home was ditching your d!ckhead of a LL!
That’s precisely why I became a homeowner.
In fact, it was exactly seven years ago today that I made this decision. It was triggered by something my landlady didn’t do while she was out working in her back yard. She had her boyfriend’s not-so-nice dog outside with her, and the dog wasn’t on a leash.
Well, I had called my bank to request pickup of a deposit, and my good buddy, the bank courier, knocked on my door for it. The dog ran up to him and bit him on the arm.
Landlady was screaming from the back yard, but fat lotta good that did. My courier had an injury that looked like it needed stitches. He was cussing a blue streak as he took my deposit and left. I didn’t blame him one bit. I’d be cussing too.
Well, after calling a lawyer friend and verifying that I wouldn’t be legally liable — the boyfriend and, likely, my landlady would be — I made the decision to go out and start house-hunting that evening. It was over 100 degrees, but I didn’t care.
I wanted to get some place where I could have control over my living environment. Since I was house-hunting during the height of the Bubble Era, it took almost 18 months to find something affordable. But I did.
As for the dog situation, my landlady took off and hid somewhere with the dog. Happened the day after it attacked my courier. This was prompted by an Animal Care officer banging on my landlady’s door.
Two days after the attack, landlady and dog still missing. An Animal Care officer came a-banging on my door, asking a bunch of accusatory questions and demanding to know if I had a dog. I told her that I was a tenant, and, per the terms of my rental agreement, I couldn’t have any pets.
I was so infuriated about being questioned that I got very little sleep that night. As soon as Animal Care opened its dispatch desk the next morning, I called and dropped the dime on my landlady and her boyfriend.
After that, I was persona non grata, which meant that my house-hunting was mandatory. My rent increased substantially in late 2003. To this day, I think this was because the courier had threatened to suit to get payment for his medical expenses.
Well, fast-forward to now. No pets here at the Arizona Slim Ranch. And I don’t allow visitors to bring their pets here. (I don’t want the legal liability. Or the noise. Or the mess.)
I also control this environment in many other ways that I never could when I was a tenant. And I like things that way.
We are blessed with a gem of a landlady. She leaves us alone so long as we send her a rent check on time every month. Whenever we call with an issue, such as the occasional invasion of nesting hornets through our chimney, she responds immediately with action to fix the problem. She pays our community recreation club membership dues and hires the Mexican workers who do our yard work. We send her a Christmas card and a gift at year end.
Why anyone would prefer home ownership to our cushy living arrangement for a lower monthly payment is a mystery to me.
Arizona Slim,
Not to say that little episode couldn’t have surfaced had you ‘owned’ that place but, the lack of accountability by your LL just smacks of being so typical!
Green Shoots,
Yeah, we all have warm & fuzzy stories about charming LL’s but the longer you rent the more likely you’ll find that is a longshot and then the odds start working against you. Very much so, enjoy it while it lasts.
“the longer you rent the more likely you’ll find that is a longshot and then the odds start working against you. Very much so, enjoy it while it lasts.”
Very wise words, DinOR! We have a fantastic landlord, however our lease requires us to do all the basic maintenance (lawn mowing, that kind of thing). He lets us deduct the cost of any repairs and often takes money off our rent in return for labor if we do the repairs ourselves. So even though we’re renting, its not always as simple as making a phone call.
Not to say that little episode couldn’t have surfaced had you ‘owned’ that place but, the lack of accountability by your LL just smacks of being so typical!
I might add that a few hours after I dropped the dime, the landlady and the dog returned from their Undisclosed Location. And, the next day, an Animal Care officer paid them a call. I was bicycling by as the officer was speaking to them, and, boy, did they have the long faces on.
The dog was quarantined in the boyfriend’s back yard — I think Animal Care should have taken it away, but that’s just me. And, ever after, landlady and boyfriend were very careful about keeping that dog on a leash.
All right guys, let’s lose the romantic term “homeowner.” How about “houseowner.” Green Shoots rents his “home.”
And Green Shoots, you are pleased with the fact that your landlady is likely hiring illegals to do your yard work? Maybe you should hire your own American citizen instead.
I’m a little cranky today - had some surgery two days ago.
And Green Shoots, you are pleased with the fact that your landlady is likely hiring illegals to do your yard work? Maybe you should hire your own American citizen instead.
Or, better yet, just pick up a rake and do the yardwork yourself. My mother and father still do, and they’re both in their mid-eighties.
Kim,
My experience is that if they’re ‘nice’ ( it just means that they’re NEW to the game! ) Once they’ve been around long enough, things are bound to become more bitter/controlling.
How many of us have worked w/ people over the years that were SURE being a LL was the road to riches? Only to have to endure their unending complaining and anxiety in the lunchroom..? ( Year after year! )
Hey D! You’ll never guess what stunt my tenant pulled ‘this’ time..? Uh, I really have to get to a meeting!
So we can have a lot of fun at the expense of CA’s that paid 4 X what the same place would rent for ( just so they could paint the walls! ) but renting is no cakewalk any more than LL’ing is.
“returned from their Undisclosed Location” LOL!
Yeah, what a ‘mature’ response. This is what I’d expect from a kid that’s never done anything more than a paper route. Certainly not the level of maturity I’d expect from soneone I had a ‘business’ relationship with?
( Maybe it will all just “go away”? )
Yeah, what a ‘mature’ response. This is what I’d expect from a kid that’s never done anything more than a paper route. Certainly not the level of maturity I’d expect from soneone I had a ‘business’ relationship with?
What was especially ironic was that the landlady and boyfriend were very in-my-face about their religious beliefs. As in, loudly announcing that they were headed out to church every Sunday and preaching at me several times during the week.
It got tiresome.
Well, during the wee hours of that morning when I couldn’t sleep and was waiting for Animal Care’s dispatch desk to open so I could drop the dime, I heard my landlady outside my bedroom window. Don’t know what she was doing there, but I was tempted to pop the window open and ask, “What would Jesus do?”
“heard my landlady outside my bedroom window”
Whoa… just weird. And we’ve all heard of equally bizzare behavior like driving by ( really really s-l-o-w-l-y ) and talking to your neighbors etc.
Fact is, we’re now closer to the end than the beginning and lots of bubble-sitters are going to feel compelled to do ’something’? It’s all fine and well to come here bragging about how you’re cutting a fat hog renting etc. but at some point we’ll ALL tire of the arrangement!
We’ve had several here of late “fall off the wagon” and even though they may be unsure about their choices at present, on thing’s for sure ( you can’t “live on a fence”! ) Someday soon, even if it means bringing cash to the closing, we’d like to ditch our condo and get something w/ a yard. Will it be ‘perfect’ timing or the perfect ‘place’? Doubt it.
How do I like it so far? I hate it. I’ve been doing nothing but building/painting/working on the house since we moved in.
Ha! Funny. I totally understand. I don’t hate it, but I’m looking forward to being done with all this upfront work. I know it will never truly end, but I know I can get to the point where I’m satisfied and coast a little. I haven’t moved in yet (2 more weeks) because I wanted to get the work done before (and not have to move my furniture around). But I do see light at the end of the tunnel. Painting almost done; carpets go in this weekend. Few more little odd jobs and it’s ready.
I paid 2004 price for my home (not adjusted for inflation). I don’t think they’ll drop to 2000-2001 around here based on median incomes, I’m thinking we’re about to stabilize (for a loooooooooooong time).
Most U.S. workers have nothing but Social Security and Medicare coming to them when they get old, and not until 67 in the latter case and 65 in the former case. With big reductions in benefits coming.
So will the federal government raise taxes, and cut these programs more, to free up funds to pay the pensions and retiree health benefits of public employees? Warren Buffett thinks so.
http://www.bloomberg.com/apps/news?pid=20601010&sid=airOwCWviFuU
“Buffett said last month that the U.S. may feel compelled to rescue a state facing default after the government committed $700 billion to bail out financial firms and automakers.”
In other words, having bailed out the richest white collar workers in the country, and the richest blue collar workers in the country, the federal government may feel compelled to bail out the richest retired workers in the country.
All at the expense of future generations and the less well off.
So what else is new? You always screw the poor. After all, what can they do about it?
They really should change the motto on all our currency from “In God We Trust” to “FU, I Got Mine.”
Contrary to popular, uninformed opinion, Horatio Alger is fiction. The number of “rags-to-riches” stories are so few as to be insignificant, yet they are presented as a common occurrence.
And now the path from poverty to middle class has been almost completely destroyed.
They’re pulling up the drawbridges everywhere.
Howdy all. I have a new beta build of the Joshua Tree Extension, which addresses a few bugs in adding and removing people from the ignore list via popup menus on the web page.
I also added a link to the preferences dialog in the toolbar menu.
http://mysite.ncnetwork.net/drumminj_tx/download.html
Right-click on the Download link, choose “Save As…”, save it to your desktop, then drag it onto the Firefox browser window…
Assuming no other bugs crop up (please report them if you find them), I’ll be posting an official release in a few days.
So I went to Disneyland yesterday. For years, maybe for its entire existence, “It’s A Small World” was sponsored by Bank of America. Not anymore. It’s sponsored by Sylvania now. Interesting. Negative vibes for the customers, perhaps?
Another foreign purchase (Sylvania’s parent company is the German company Osram).
First the beer companies, now It’s a Small World. What’s the world coming to? (put intended)
Europe in 2000’s = Japan in 1980’s?
(
putpun intended)That’s OK….Russia is now putin tended.
Ugh.
Bad punsters need to be banished to Noman.
(Noman is an island, BTW)
I have some disco lights in my apartment (just a hobby) and they use OSRAM bulbs. Very nice stuff! Phillips is the big competitor.
What costume was the kid from the nation of Federal Reserve wearing?
Castrated bull?
Wasn’t he dressed like Mr Moneybags (the monopoly guy)
Instead of waterboarding - we should make all terrorists sit through 12 hours straight of “It’s A Small World” - in a boat with 12 annoying kids.
The war would end soon with all the intelligence we would gather…the Taliban would lay down their arms today knowing their fate if captured.
Cripes, that song will now be playing in my head all day long.
When I was a Disney “Imagineer” there were occasional charity drives where you’d get sponsors to pay per ride, and you’d ride “it’s a small world” as many times as you can stand it in a day. (I declined to participate as a rider.)
Many thought that the ride could be improved if you gave each rider 3 softballs.
Or a paintball gun.
.357
Not sure how Disneyland is laid out, but in Orlando “It’s a Small World” is not too far from the Frontierland Shootin’ Arcade. My suggestion was to combine the two.
I would think a 12 gauge would be more rewarding…
Yeah that had to be the most boring ride at old Disneyland. The beginnings of treacly diversity BS…
“It’s a Small World” was originally the Pepsi-Cola exhibit at the 1964 NY World’s Fair. (You’re all sooooooo young!)
Don’t know when it changed to BofA sponsorship.
BTW: I was at the 1964 World’s Fair! Don’t remember seeing you there.
I didn’t see you either, Reuven.
I was at the 1964 World’s Fair at age 9 but I don’t recall that exhibit. I hate “It’s a Small World.”
I was at the 1964 World’s Fair!
Me too, I was 2 and change. Those were the days.
I think I remember a fake helicopter ride thing.
Ever seen the movie “Americathon?”
Thar’s money in dem thar “flash crashes”.
Look what the CEO from TD Ameritrade is saying:
“We had a lot of trades. We don’t talk too publicly about the number, but that day was a record day for us.”
Hmmmm. Might this portend a sequeal or three?
Churn = transaction fees
Churn baby churn!
Disco inferno!
Churn baby churn!
Market is now significantly below the flash crash low, maybe it was not an error at all, just good reaction by the PPT.
Social Security fixes…..
I had a thought over the weekend. SS is not terribly solvent. One problem is that FICA is capped at income of around $100K. Naturally eliminating the cap would cause the problem to go away, but there’s great opposition to doing this.
My idea: eliminate the cap on individuals but not on corporate matching contributions. Corporations would be likely to drop their opposition to this fix, and after all they are never the direct beneficiaries of SS anyway. (You can argue that they are indirect beneficiaries of SS since it permits them to skate on pension benefits.)
So individuals would pay 6% on their wage income all the way up, and corporations would still enjoy the cap on their 6% matching contributions. To rationalize this scheme, self-employed people would pay 12% up to the cap and 6% beyond.
I dont’ have access to the data to crunch to see if this scheme would “fix” SS going foreward. It would be interesting to have some quants mull it over.
The problem with this approach is that SS becomes welfare instead of a “insurance” program - if you hit workers based on income but cap their benefits, fairness suggests only needy elderly get any benefits. I realize the whole program is a giant ponzi scheme, but turning it into a straight welfare program would be a huge adjustment.
FICA taxes would be a terribly unfair way to pay for this benefit as “unearned” income escapes taxation leaving the super rich free of this burden.
As a self-employed person (who has paid the MAXIMUM into the social security system since 1984), I think this would be outrageous. It would also mean that, with my 10.5% state income tax my tax on every additional dollar earned would be 35% + 10.5% + 12% = 57.5%. (Or higher if/when BHO raises the top bracket to 39%, and if CA puts in their “soak the productive” rate).
They need to raise the retirement age. That’s the fairest way to fix SS. And crack down on SSDI abuse. Any woman can walk into the local SSDI office, say “Boo hoo! I’m depressed” and collect money for the rest of her life….
…and as Mariner22 stated, if they uncap the SS contribution, the have to uncap the benefits! Otherwise, it’s welfare. And I would do everything (legally) possible to structure my corporation so my “income” is as low as possible. (Sort of like Steve Jobs’ $1/year salary he boasts of taking from Apple! Does he pay $0.12/year in SS tax, and take the rest in backdated stock options, taxed at long term cap gains rate?)
S corp shareholders do this already (modest salary, big dividends), just to avoid the uncapped medicare contributions, eliminate the SS max and it would be wholesale conversion of private companies to S status.
Fixing a problem by raising taxes…where I have seen this tried and fail before???
Yes, but it’s ‘different’ this time, we have hope&change!
The fairest and easiest fix is to eliminate a specific retirement age and payout.
Set the ratio of those working (including those also receiving) to those receiving (including those working) to 3 to 1. Those too ill to work jump the queue, everyone else has to wait to start collecting in age order.
People live longer, then they wait longer to collect. They start dying younger (don’t rule it out) they collect sooner.
Set the ratio of money collected to money sent out to 1 to 1. Workers to better, the seniors get more. Workers do worse, the seniors get less. Benefits and sacrifices are shared.
That would completely wipe out the Social Security problem. But Generation Greed is greedy, so it is non-starter.
“And crack down on SSDI abuse. Any woman can walk into the local SSDI office, say “Boo hoo! I’m depressed” and collect money for the rest of her life.”
Figuring out who is really disabled is no easy task. How can anyone really tell how much pain someone is in?
In practice, the government either rolls over as per above or, when money is tight, stops providing aid to the truly needy — except those savvy and affluent enough to work the system.
“eliminating the cap would cause the problem to go away”
I’m not so sure. Are you?
Bilderberg group’s top secret meetings: The Times UK
Splash! Could that be the sound of Lord Mandelson hitting one of the Dolce hotel’s four pools? Or Robert Zoellick of the World Bank? Paul Volcker of the US Economic Recovery Advisory Board? Or merely the euro taking another dive?
That is the thing about the Bilderberg group’s top secret meetings: you never know quite what is going on behind the police checkpoints.
Across the world, secretaries to the rich and the powerful have blocked out the next three days in their bosses’ calendars for their annual gathering, this time at the Dolce in Sitges, one of Spain’s most exclusive resorts.
On Thursday, 120 people will gather in Torquay. Henry Kissinger will be there, so will Helmut Schmidt, Baron Rothschild and Mrs Thatcher
Normally, every minute of their working lives is accounted for but, each year, a couple of hundred of the world’s financial elite and the more business-friendly members of the political class disappear from view; supposedly to save the planet from the dangers of parochialism, the nationalist genie.
Heh. Cue “The Obama Deception” now.
It would be fun to be a fly on the wall there!
CitiFinancial U.S. Network to Become Profitable, McDowell Says
June 3 (Bloomberg) — Citigroup Inc.’s plan to shift bad loans to a new division from its U.S. consumer-finance business will make the remaining network profitable, said Mary McDowell, chief executive officer of the CitiFinancial unit.
The “streamlined” branch network will serve 1.6 million customers and manage $18 billion of loans and other receivables, or about 70 percent of the current total, McDowell told employees on a June 1 conference call. The network will be profitable when excluding losses on $8 billion of receivables being moved to a new CitiFinancial division specializing in loan modifications, she said.
Now that’s what I call “extend and pretend!”
I think the MSM is intentionally not covering the destruction in market value and American wealth that is occurring in Louisiana and the Gulf states.
Bankruptcy rates skyrocketing as those who were barely hanging on after Katrina and Rita finally slip into insolvency.
Foreclosures multiplying from this point forward.
Who wants to live next to a toxic dump?
It’s our Chernobyl. Everything east of the mouth of the Mississippi is finished.
Forget the grandkids, U.S. debt could hurt you.
CNN Money ~ June 3, 2010
Letting U.S. debt grow unabated is often framed as an unforgivable burden to heap on one’s grandchildren.
But there are plenty of reasons today’s parents might be concerned for themselves and their kids.
If Congress doesn’t craft a plan to address long-term fiscal shortfalls after the economy recovers, potential problems could arise sooner rather than later, debt experts say.
Slower economic growth: After examining data from dozens of countries over the past two centuries, economists Carmen Reinhart and Kenneth Rogoff found a connection between high debt and reduced economic growth. Specifically, they found that when a nation’s gross debt reaches 90% of its economy, it often loses about one percentage point of growth a year.
U.S. gross debt — currently $13 trillion — will hit the 90% threshold this year. Gross debt includes money owed to those who hold U.S. bonds and money owed to government trust funds such as Social Security.
Reinhart has said the relationship between high debt and low growth is “self-feeding.” Low growth ravishes government revenue and increases the need to borrow. More borrowing builds debt. Higher debt increases pressure to tighten fiscal policies in order to reduce the risk that investors lose confidence in the country. But tighter policies can slow economic growth.
To cut to the chase: High debt = more percentage of the economy is banking.
While some facets of banking are necessary and useful - e.g. helping to manage your money, and to protect and invest your savings; earning interest from treasuries is not one of those facets.
That’s why debt growth is counterproductive. People who could otherwise work to contribute to the betterment of society instead sit on their laurels and collect interest.
That’s why debt growth is counterproductive. People who could otherwise work to contribute to the betterment of society instead sit on their laurels and collect interest.
With ZIRP this only applies to Wall Street.
The serfs earn 0%.
Nor is earning interest from bonds backed by consumer debt, IMHO.
Uncle Sam’s housing bubble reflation efforts appear to be gaining traction. Buy now, or get outbid forever!
* HOME FRONT
* MAY 28, 2010
Luxury Sales Bounce Back
Bidding wars for a $2 million house? In some markets, sales of high-end homes return to levels not seen since the boom
By JULIET CHUNG and JAMES R. HAGERTY
For years, Jennifer Metz and her husband John yearned for a bigger home in San Francisco. Three months ago, the couple started looking, figuring that in this shaky economy, their $3 million budget should provide them a pick of attractive homes and accommodating sellers.
They were wrong. Hours after seeing a 5,000-square-foot fixer-upper in Presidio Heights with an asking price around $2.7 million, the Metzes put in a bid—and lost. Soon after, they made another offer on a four-bedroom in Russian Hill. Their bid was rejected.
Last week, the Metzes rushed over to a large, dilapidated home in Pacific Heights that needed a lot of work but was asking the (relatively) low price of $2.25 million. The Metzes put in their over-ask bid the next day, but lost that one too: There were nine offers; the winning bid was $2.56 million.
“It’s frustrating,” says Ms. Metz, a 44-year-old stay-at-home mom whose husband works in finance. “You think you put in a good offer but, no.”
…
Wouldn’t you love to know how much high-end demand comes from end users like the hapless Ms. Metz versus investors who are banking on Uncle Sam’s housing bubble reflation efforts to send a liquidity windfall of cashola their direction?
P.S. I am thinking once the Chinese property bubble has sufficiently deflated, a key source of investor demand for high end SF housing may evaporate. I certainly wouldn’t sniff around that market until China was largely sidelined from the residential RE investing scene.
Lest anyone think I am just blowing smoke:
How a Bursting Housing Bubble in China Could Slam the U.S.
By PETER COHAN Posted 4:30 PM 06/02/10
China’s housing crisis is much worse than the one in the U.S., according to a Chinese government minister, and given the scale of its pumped-up real estate bubble, suddenly deflating it could have global consequences.
“The housing market problem in China is actually much, much more fundamental, much bigger than the housing market problem in the U.S. and UK before your financial crisis,” Li Daokui, a member of China’s Central bank monetary policy committee, told the Financial Times.
The worst consequence of a burst housing bubble might be a huge spike in interest rates. But fear of an even bigger force — Chinese citizens’ anger at the high cost of real estate — could tame China’s efforts to constrain the housing market.
111 Times Median Family Income
There is some data to support Li’s concerns. For example, official Chinese data showed real estate prices in 70 cities climbed 12.8% in April, the fastest one-month annual rise in five years, according to AFP. During the height of the U.S. property bubble in 2005, house prices rose an average of 22% a year, only to plunge 20% in 2009, according to Standard and Poor’s.
But even more striking is the gap between what Chinese earn and what they must pay to buy a residence. AFP reported that in 2009 a typical 970-square-foot apartment in Beijing cost $278,160 — 111 times the average annual income of $2,514. By contrast, in November 2007, the average U.S. house sold for $316,800, a relatively modest 5.4 times the median household income of $58,480.
What Is to Be Done?
The key question for Chinese policymakers is what to do about the bubble. Li is among the inflation hawks at the Chinese central bank, but there are others with a more dovish attitude towards inflation. And on that score, China’s official statistics reveal relatively modest inflation of 2.8% in April, compared to 0.9% in the U.S.
Li has been calling for increases in taxes and higher interest rates to keep the Chinese real estate bubble from bursting too suddenly. AFP reports that China currently has no residential real estate tax, but does charge 1.2% on 70% to 90% of the value of commercial real estate. China will try to impose a residential real estate tax to slow down the bubble, in addition to “tightening restrictions on advance sales of new property developments, introducing new curbs on loans for third-home purchases, and raising minimum down payments for second homes,” according to AFP.
…
See full article from DailyFinance: http://srph.it/c3NYqc
Meat Grinder Market Could Last 8 Years: Rosenberg
CNBC ~ June 3, 2010
Global debt issues and investor fear have the US mired in a “meat grinder” stock market that likely will last another six to eight years, economist David Rosenberg said Thursday.
Debt-cleansing cycles generally last six to seven years and the current run is in about its second year. Global economies are trying to shed debt, with varying levels of success as several European countries run risk of defaults and uncertainty grows over the effect debt will have on the US.
At the same time, broad cycles of low market returns and wild stock swings usually last 16 to 18 years, and this is the 10th year of those conditions, Rosenberg, chief economist at Gluskin Sheff, said in his morning note.
Neither trend, if kept intact, would bode well for stock prices.
“It will not be a straight line down but the fundamental trend line is down as far as US equity prices are concerned, and racked with intense volatility,” Rosenberg said.
He pointed out that 22 of the past 26 trading sessions have seen swings of 200 points or more in the Dow Jones Industrial Average, while positive moves often are accompanied by low volume.
“Look at what has happened just this cycle-the worst stock market since 1937 followed by the best stock market since 1932 followed by the worst May for the Dow since 1940,” Rosenberg said. “There’s a word for this type of market. It’s called a meat grinder. No return for a decade and yet plenty of sleepless nights on this roller-coaster ride.”
‘Global debt issues and investor fear have the US mired in a “meat grinder” stock market that likely will last another six to eight years, economist David Rosenberg said Thursday.’
The world could use a few more honest economists like Rosenberg. The economics profession suffers from a glut of porcine beauticians and a shortage of porcine realists.
I’m sorry.., what was that? ( I couldn’t hear you I was getting a “debt-cleansing cycle” done down at the spa ) They assured me it’s all the rage!
Yeah, I’m afraid DR’s spot on there.
Is that the one where you lay face down on the table?
No, that would be the colonic, which, if what I’m hearing is correct, requires the recipient to be lying on his/her right side.
I heard the same comment from Morgan Stanley’s David Darst (that we are at best in a mild bull run, but that they expect tepid stock market gains for the next several years).
Ocean currents likely to carry oil along Atlantic coast.
June 03, 2010
BOULDER—A detailed computer modeling study released today indicates that oil from the massive spill in the Gulf of Mexico might soon extend along thousands of miles of the Atlantic coast and open ocean as early as this summer. The modeling results are captured in a series of dramatic animations produced by the National Center for Atmospheric Research (NCAR) and collaborators.
The research was supported in part by the National Science Foundation, NCAR’s sponsor. The results were reviewed by scientists at NCAR and elsewhere, although not yet submitted for peer-review publication.
“I’ve had a lot of people ask me, ‘Will the oil reach Florida?’” says NCAR scientist Synte Peacock, who worked on the study. “Actually, our best knowledge says the scope of this environmental disaster is likely to reach far beyond Florida, with impacts that have yet to be understood.”
Good Congressional testimony from James K. Galbraith. It’s about the (largely unrecognized) role of fraud in the our beloved, housing-driven financial crisis.
Are you sure? Popular opinion is that the FBs were able to give themselves final approvals and verifications on their own loans.
Just another lunatic politician…
Congresswoman: White Supremacist Groups Behind Arizona Immigration Law. ~ June 03, 2010 ~ FOXNews.com
A California congresswoman is pointing the finger at white supremacist groups, who she says have inspired Arizona’s new law cracking down on illegal immigrants.
Rep. Linda Sanchez, D-Calif., told a Democratic Club on Tuesday that white supremacist groups are influencing lawmakers to adopt laws that will lead to discrimination.
IIRC when she won her seat there were allegations of voter fraud (illegals voting).
She’s another moron.
The one thing I really like about Arizona’s new law is that it’s acting like a dayglow green dye marker and showing us just who is exactly for illegal immigration and why.
Case in point: Article in today’s Detroit Free Press.
Mayor Proposes Cutting School Nursing Positions. ~ NY
New York City workers may be facing layoffs. Libraries are bracing to lose financing, and caseworkers are girding for bigger loads. Now add to the list of victims of citywide budget cuts nursing positions at small schools, public and private.
To save $3.1 million, Mayor Michael R. Bloomberg has proposed eliminating nursing positions, which are provided by the Department of Health and Mental Hygiene, at schools with an enrollment of 300 students or fewer.
School and city officials differ on how many schools such a move would affect.
According to preliminary estimates by the mayor, the move would affect 146 schools, though that number may be adjusted downward if schools get exemptions for specific children’s health needs.
No unionized nurses would be laid off.
I can recall, from junior high days, having to walk a friend to the nurse’s office. Friend had gotten another one of her killer migraines, and it was so bad that she couldn’t see.
And I think the nurse just called her mom so that friend could rest at home.
Fast-forward a few years, and my mother was teaching at a different school in the same district. By that time, the school nurse was dealing with all sorts of stuff — depressed kids contemplating suicide, drug overdoses, dispensing daily doses of psychotropic meds. Mom was friends with that nurse, and boy, that lady sure had some war stories for Mom.
My ex-MIL was a school nurse, a card-carrying member of the 1960s Democrat “Great Society”.
Then in the early-mid 70s, they started bussing the inner-city riff-raff in……..and she got to see “diversity” up close.
She now thinks Glenn Beck is too liberal.
What drove my mother over the edge was mainstreaming. There were kids in her school who she and the other teachers referred to as “droolers.”
And there also was that guy for who the school had to build a special desk shield. Because he just wouldn’t/couldn’t stop amusing his, ahem, personal parts during class time. The desk shield was there to prevent the other students from seeing the, errr, action.
OMG. What in the bloody hell is going on….
AP NewsBreak: Feds halt new drilling in Gulf.
WASHINGTON – The Obama administration is blocking all new offshore drilling in the Gulf of Mexico, a day after regulators approved a new permit for drilling in shallow water.
An e-mail Thursday from the Gulf Coast office of the Minerals Management Service says that “until further notice” no new drilling is being allowed in the Gulf, no matter the water depth. A copy of the e-mail was obtained by The Associated Press.
The announcement comes a day after the minerals agency, which oversees offshore drilling, granted a new drilling permit for a site about 50 miles off the Louisiana coast, 115 feet below the ocean surface. Environmental groups accused the administration of misleading the public by allowing work to resume in waters up to 500 feet deep while maintaining a moratorium on deepwater drilling.
Y’know, what gets lost in all the current uproar is that BP and the other companies haven’t been doing deep water drilling in the Gulf for the helluvit. Or to be mean and nasty to the environment. They’ve been doing it because there’s demand for the oil.
You’re totally right. We all own this spill.
Anyone up for having an actual energy policy not written by Big Oil instead of making it up (poorly) as we go along?
“haven’t been doing deep water drilling in the Gulf for the helluvit”.
With out a doubt, it’s easy to sit on the side lines and throw barbs, but each every one of us uses oil, period. I am sure every oil drilling/producing company would much prefer to drill in a few hundred feet of water if they could, off shore.
Substituting oil, is not going to happen in my life time, I am sure. Reducing our dependence on it I believe is.
Well, if people (especially guys who are compensating for something) would stop using 12 mpg, 300+ HP pickup trucks as commuter vehicles then maybe they wouldn’t have to drill in deep water.
When I walk the dog every night it seems that every other driveway has a shiny pickup truck that has never been used for real work. I guess that now that the CAFE standards will be going up for trucks that we’ll be seeing fewer of these gas guzzling monsters in the future. I remember when 6 cylinder engines on full size pickups was not unusual. It wasn’t that many years ago.
And our alternate choices to oil, are … what?
Contrary to more uninformed popular opinion, as consumers, we aren’t given real choices. Brand X is damn near exactly like Brand Y, only the packaging is different.
I remember when almost all retail packaging went 100% plastic.
I still can’t buy an electric car. Nor do I have access to public transport. Not does most of this country.
And even though the cost of full solar panel (or wind) installs are now less than a new car, I still have to fight my local HOA to be able to install them.
Again, what are our other choices?
So don’t go saying “we”. That’s bullcrap. Outside of boutique (and overpriced) catalogs, the corporations control our options.
“The Obama administration is blocking all new offshore drilling in the Gulf of Mexico, a day after regulators approved a new permit for drilling in shallow water.”
Let’s set the record straight. The key words (blocking all new USA drilling in the Gulf of Mexico). Check out who else (countries) have wells there and who else will continue to drill. USA continues practice of self-flagellation rather than handle crises in a timely manner and continue with proper safe-guards.
Those rigs need to be inspected.
To not do so is now not only irresponsible, but deadly dangerous.
Some of your buttons are easily pushed, people.
North Korean envoy warns war could erupt soon.
Jun 3, 12:33 pm ET
GENEVA (Reuters) – A North Korean envoy said on Thursday that war could erupt at any time on the divided Korean peninsula because of tension with Seoul over the sinking of a South Korean warship in March.
“The present situation of the Korean peninsula is so grave that a war may break out any moment,” Ri Jang Gon, North Korea’s deputy ambassador in Geneva, told the United Nations-sponsored Conference on Disarmament.
North Korea’s troops were on “full alert and readiness to promptly react to any retaliation,” including the scenario of all-out war, he told the forum.
I’d encourage everyone here to watch the documentary, Welcome to North Korea. You’ll see more than a few scenes showing members of NK’s military.
If those guys are getting enough to eat, I’d be very surprised. I mean, come on. I’m short of stature and slight of build, but, compared to them, I’m a giant. Ditto for the NK civilians. A lot of them appeared to be very thin — too thin, in fact.
Methinks that plain old human hunger will end this one very quickly.
[continuing the confession trend]
We bought as well: escrow signing was Wed and we close/get keys on Fri. I have been watching for 4+ years while we rented in the same neighbourhood (Belltown in Seattle). It got to 35% off the alltime sales price(new unit with condo building at 80% now sold). It was about $8/sqft more than an exact model sold at the auction earlier this year - but I did not want to pull the trigger then. Interesting the the seller (builder) wanted a higher sales prices for comparables i think, and letting us get more on helping with closing fees (which we did not need as we are putting down 50%) - but whatever.
Can prices go down another 10-15% - of course? But it made sense for us. Can one of of loose their job? Yes! But we can afford the mortgage on 1 salary.
Forgot to thank all the contributors to this site - especially those that come up with the really funny snarky comments - so much fun. There is just so much valuable info here.
Being a snarkatroid is one of the great joys of my life.
bob,
I have a good friend that lives right off Western Ave. and against all my better advice, he bought about a year and half ago. Not that he’s regretting it all that much, they like their bldg. and are free to travel etc.
He was a bit concerned about the area though. It was a rough neighborhood not all that long ago and is starting to see signs it may be regressing?
It wasn’t that he was unaware or unconcerned there couldn’t be a correction, really more that for all the bad news ( it just didn’t seem to be materializing? ) And that’s what I’m not getting about some posters here, the Global Fin. Sys. collapsed… and prices haven’t really reflected that! Perhaps they never -fully- will? So right about now, home prices or “getting a steal of a deal” is just about the least of my concerns.
What originally attracted us to bubble blogs to begin with was that we all ( well most ) thought home prices would HAVE to subside or that there would be some awesome deals to be had! Unless you were lucky enough to be looking in FL or Vegas, nothing has really changed all that much? Other than some of us now no longer have jobs. To be honest, this couldn’t have turned out worse if we tried.
Sounds like you covered the bases — especially regarding the worst-case scenario of one of you losing your job.
We went through that back in 1993-1994. However, being the enterprising fellow that I am, I didn’t waste much time finding short-term opportunities to maintain an income stream while figuring out my next big move in life. And we had an affordable mortgage — none of this amortization of $500K+ in principle at a low rate nonsense which sucks all the oxygen out of many middle class families’ budgets these days.
Best of luck, Bob. Can you do some commentary on condo living after you move? I’m curious about it. When we get old I wonder if it might be a good idea to go condo.
This story gets fuglier by the day.
New Projections Show Gulf Oil Surging Up Atlantic Coast
By JILLIAN SCHARR
Updated 5:30 PM EDT, Thu, Jun 3, 2010
A still from the University Corporation for Atmospheric Research’s video shows the projected range of the BP oil spill at day 132. Researchers say the oil will be carried northeast by Atlantic currents and miss Tri-State shores.
New projections show that currents will soon carry oil from the Gulf of Mexico into the Atlantic Ocean and up the Eastern seaboard — but won’t hit New York, probably.
The projections, released today, on day 45 of the BP oil spill, come from the National Center for Atmospheric Research (NCAR) — which, despite its name, routinely studies ocean currents as well.
…
And to think that the “Beyond Petroleum” greenwashing ad campaign almost worked. Heck, it even won an American Marketing Association Gold Award.
Great. Now the east coast will be killed.
This might be worse than Chernobyl.
Oh crap.
Reminds me of a Sierra Club mailer that a coworker showed me shortly after the Exxon Valdez ran aground. It showed a picture of Captain Joseph Hazelwood above a caption saying that it wasn’t his driving that caused the disaster. Instead, it was ours.
Buffet on the housing bubble:
“But he said he counted himself among those who failed to foresee the collapse of the housing bubble. Buffett called it the “greatest bubble” he had ever seen.”
http://finance.yahoo.com/news/Buffett-defends-rating-apf-2324431079.html?x=0&sec=topStories&pos=main&asset=&ccode=
Bernanke’s answer to the US economic woes - more lending. Perhaps it’s time to move away from such a debt-based society. While lending is important, it should not be seen as the cornerstone of an economy. Let’s encourage real engineering, not “financial engineering” where the goal is to extract as much wealth as possible from the borrower.
Bernanke’s appearance in Michigan, where the 14 percent unemployment rate is the country’s highest, is part of a series of Fed gatherings around the nation to discuss small-business lending. Policy makers are seeking to encourage the flow of credit that would allow small companies to expand and hire, bringing down the jobless rate from close to a 26-year high.
“Our collective challenge is to help ensure that creditworthy borrowers have access to credit so that, should they choose, they can expand their businesses or increase payrolls, helping our economy to recover,” Bernanke said at the event at the Chicago Fed’s Detroit branch.
http://www.businessweek.com/news/2010-06-03/bernanke-says-u-s-unemployment-imposes-heavy-costs-update1-.html