Bits Bucket For July 3, 2010
Post off-topic ideas, links and Craigslist finds here.
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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I just can’t wait for the fourth, mom, apple pie and guns…..
“After meeting with the organizer of a small group that plans to carry guns Sunday at Fourth of July events in town, police said they’re not expecting any problems.”
“You do not want to drop a gun out there in the very dark night and not quickly find it,” one of Culver’s posts at Opencarry.org says. “If we were to watch the fireworks from the crowd at the base of Snow King, I would definitely not open carry; too crowded, dark and noisy an environment.”
http://www.jhnewsandguide.com/article.php?art_id=6166
SCOTUS just re-affirmed the 2nd as an individual right.
40 states allow some form of CC permit.
The NRA is about to endorse Harry Reid for crying out loud.
I think it’s safe to say your side in the losing end of the debate these days. So just give it a rest and accept the fact that the people of this country want to have the right to own a firearm. Nobody is telling you to get one. If you don’t want one, don’t get it. But please stop this nonsense with trying to take away my right to own.
And a happy 4th to you too (brought to you courtesy of a lot of guns and men/women who used them).
And please stop using the strawman that someone… anyone is “trying to take your rights away”….
Frickin’ sanctimonious victim.
Just exactly what was the Chicago gun ban all about Mr. Smartypants? Or does the Democrat kool aid you drink completely seal off your eyes from seeing what is obvious to one and all?
victim.
Good Morning!
I’m looking at listings today. Maybe will go out to see some properties. Would report my findings. I’m scared to call a realtor as they will try to convince me to buy and I don’t want to take advice from them.
Martin
“I’m scared to call a realtor as they will try to convince me to buy and I don’t wnt to take advice from them.”
This statement projects uncertainity and weakness, something a salesman is sure to pick up on.
Fortify yourself with knowledge and understanding of just what it is that you want and you will innoculate yourself from their pressure tactics.
And, good luck.
If Redfin is in your area, call them — half the commission, and no pressure to buy, since the salespeople don’t make a commission per se (obviously Redfin still charges one, but the salespeople are paid salaries).
Before the Chile family relocated to NM, we were using Redfin in MA. If we ever go back (which could happen, I might ask for/get a transfer back in a year if things at work keep going this way). We really enjoyed the Redfin experience.
There was one house the Chile’s really liked except for one (now obvious) fatal flaw. Our Redfin representative actually said to us within a few minutes of us looking at the house, “this is a fatal flaw. I can tell you like everything about this house but this one, non-changeable aspect. Let’s stop thinking about it, there will be other houses. And this house is also $40k overpriced, so let’s move on.”
Highly recommended. And the NAR and traditional agents hate Redfin, so they must be good!
Fortify yourself with visiting the best luxury apartment complexes in your area and ask yourself why spending on maintenance and DIY is preferable to carefree living as an apartment renter.
Having no control over who you share walls with has always been, to me, a powerful disincentive for living in apartment complexes.
It works well for me most of the time. My neighbors in LA are quiet. My neigbhors in Phoenix are quiet. Surprised?
What kind of control do you have of the people living next door to your house. Wouldn’t that provide a disincentive?
Good question. You and I know there is no control. I remember back in 2000 a young guy and his girlfriend bought a $200,000 house in North Phoenix. After moving in they found that the next door neighbor’s teenager would be on a motorized razor in the late evenings in the street going back and forth at 11pm. They were trapped. Thirty year mortgage. But if they were smart, they would have sold in 2006 to a GF for $450,000 and pocket $250k capital gains tax free and be renting after that.
Aren’t you supposed to check things like that BEFORE you buy? That’s on the list: Check out the neighborhood at all hours to hear if there’s noise problems, trains, road noise, dogs…
It is easier to move from a rental than from a place you “own”. That said, I prefer lower density living. I have rented houses, duplexes and mobile homes - depending on my needs.
I may rethink this when I downsize from my current house. It might be nice to have a gym and a pool that are included in my rent.
I’m looking at listings today ??
Where ??
DC suburbs, NoVa area. Ashburn etc.
Forget a house. Go out and buy a congressman. Live the american dream.
Very true in times like these!
We have about completed the goal of integrating neighborhoods all over the U.S. The whole plan by the socialists several decades ago was to force schools to integrate, and neighborhoods to integrate, to force multiculturalism on us all.
The housing bubble was the last piece in the puzzle. NINJA loans, CRA, and so on got rid of the upscale house and neighborhood as a status symbol. It no longer means you earned your way to the neighborhood - with your consistent values of saving, working hard, and being accountable. Now some of your neighbors have lifelong patterns of cheating the system, extending their living beyond their means, and so forth. And they certainly do not share your values.
I have seen people suggest the solution to the homeless problem is to move them into the millions of empty houses, even the upscale ones that may have cost $600,000 at the peak of the bubble - in the best locations of some parts of the U.S. What are these people thinking?
This is the main reason I stay out of real estate. I won’t reenter until the people who earned their way to the neighborhoods are the only people in them.
At least while renting an upscale apartment I can purposely find the most expensive quiet apartment for my money and reevaluate at lease renewal time if the neighbor quality is going down. In large cities, there usually are better apartment complexes every couple of years or so.
“I won’t reenter until the people who earned their way to the neighborhoods are the only people in them.”
You’d be waiting a long, long, long time around here considering all the trust fund babies and people riding daddy’s, grandpa’s and other’s coattails.
I know quite a few people some w/multiple DUIs that never worked a day in their lives that have multi-acre farms Dad bought for them, riding stables Dad bought for them and the mere house Dad bought for them (pikers!). Bill, you just can’t live your life based on what others are doing. Buying their kids things like this doesn’t necessary bother me. Standing in the way of the law keeping an obvious alcoholic off the road by paying off the judges and cops does really bother me. I wish she’d find a little more drunken enjoyment on that farm Daddy bought her.
Time is on my side because I find that the better quality people are renters in the high end apartment complexes. We have to have credit checks, proof of insurance, and sign (in some cases) dozens of pages of leases. Lease violations will get you thrown out.
I was almost thrown out at one apartment complex because my insurance agent did not fax my policy to that apartment complex in Phoenix. I got letters of a lease violation. It was not my fault. So lease violations have to be taken seriously.
Anyhow that issue was resolved because I had to be proactive.
The same freedoms that are touted by individual homeowners - can have stereo volume up loud enough at all hours to hear in every room, can go without homeowners insurance for awhile, can paint my house purple - also are the same freedoms that can upset you - noisy neighbor blaring rap “music,” your neighbor did not have insurance and his house burns ground, and catches your house on fire, your neighbor in a non CCR community paints his house purple and has tall weeds in his front yard, etc.
Bill
My word. You don’t think a high school dropout on welfare and food stamps who sleeps in until noon every day should live in the same ‘hood as someone who went to school, got good grades, got a good job and works 12 hours a day to pay the mortgage?
What are you some kind of tea bagger or something? Geez, what a nutjob.
We have about completed the goal of integrating neighborhoods all over the U.S. The whole plan by the socialists several decades ago was to force schools to integrate, and neighborhoods to integrate, to force multiculturalism on us all.
You should try to get out of California. Everytime we go back to visit the heavy duty “diversity” stands out like a sore thumb. It doesn’t even feel like the US anymore. On our last trip all the buses had billborads advertising a Spanish language soap opera “Pecados Ajenos” (Other people’s sins).
You guys/gals are on a roll this morning. LOL.
Martin
Here’s some mother(ly) advice…(and drop the “F” word from my last name:) First, look at the listings that float your boat on Redfin or Realtor.com (the actual MLS, btw). Then go to Zillow and type in the address. Click on housing around it, and see sq ft, lot sizes (zestimates always off, but a ballpark), and get to know neighborhoods. Goggle Maps might have a visual of the curb appeal, and you can “drive” down the street. Due your due diligence, and for Godsake, don’t buy unless it’s long term. Don’t be in a hurry. We’re in unchartered waters. The predictions and reality are on the buyer’s side.
If you are that gullible, then have I’ve got a deal for you… (I’m licensed, and worked for a REIT).
Happy 4th weekend, ya’ll.
Zillow is more than 50 percent high in some city neighborhoods in Northern Ohio; in suburbs, probably 20 - 30 percent above recent selling prices. How long does it take to adjust prices to reality??
Yes, but they DO record sales, even the sort of distressed ones that they decline to use in their calculations. In a fairly uniform neighborhood, it is quite useful to see the range of prices that houses actually sold for, even if those zestimates are worth what you paid for them.
“Forget a house. Go out and buy a congressman. Live the American dream.”
They can be bought much more cheaply with a much better ROI.
“Forget a house. Go out and buy a congressman. Live the american dream.”
+100
Turn this into a bumper sticker!
Illinoise is broooooke:
http://www.nytimes.com/2010/07/03/business/economy/03illinois.html
” In Peoria — where the city faced a $14.5 million gap this year and could face an additional $10 million budget hole next year — Virginia Holwell, a trainer of child welfare caseworkers, lost her job when the state cut payments to her agency. She sits in her living room high above the Illinois River and calculates the months of savings left before the bank forecloses on her house.
“I’ve got enough to last until the end of August,” she says, matter-of-factly. “I’m 58 and I’m pretty good at what I do, and I got to tell you, I’m pretty devastated.” “
You might be good at what you do, Virginia, but the problem is that you don’t produce anything. In fact you are an enabler–providing the means to bury the state with people living in dependency. Now the state is broke; heck of a job, Virginia!
She’s the very personification of the reason for this entitlement mentality nightmare which is about to sink half the states. Thanks a lot V. Now go out and get a job that adds some value to our GDP!
Come on man, that’s harsh. I am the first to say cut government spending. But this is the one area where the cuts aren’t cool.
You have fire fighters maing $200K a year with overtime. You have cops making the same. You have “educators”, ie administrators paper pushing their way to $100K a year. And the list goes on and on.
That’s the problem. The problem isn’t the $25K a year social service worker. And especially a child welfare care worker. This “enabler–providing the means to bury the state” is often the only person in the world who gives a damn about a kid getting abused. But yeah let’s get get rid of her position and make sure the cop making $200K a year stays. After all just think of the hit to the local donut industry if we cut their salary.
Thank you, Eddie!
I take back some of the things I said about you (quote from Ghostbusters 2).
Societal parasites, and the enabling bureaucracies that sustain and expand freeloading and irresponsibility, form the core constituency of the Democratic Party. Pelosi, Reid, and public employee unions will fight tooth and nail to keep these entitlements programs going until the last drop of blood and taxes has been squeezed out of the productive middle class.
And don’t look for relief to the Wall Street political action arm called the GOP, which is doing all that it can to perpetrate the biggest swindle in US history - the transfer of private savings and assets to the TBTF banks that own these Republicrat toadies.
Here’s a father’s day nugget from a small California town. Enjoy!
Google: “Single moms get the blame”
If you have been the victim of a crime, harassed by a homeless person, or burdened with Draconian taxes, thank a single mother.
Ninety percent of homeless and runaway children are form fatherless homes. Seventy-one 71 percent of high school dropouts and 63 percent of young people who commit suicide are from fatherless homes. Seventy-two percent of juvenile murders and 60 percent of rapists come from single-mother homes. Seventy percent of inmates in state juvenile detention centers were raised by single mothers.
Contrary to a popular canard, young males raised without a father’s discipline are far more likely to be involved in serious criminal acts than even those with an abusive father. Girls raised without a father, or with a stepfather, are more sexually promiscuous and more likely to end up divorced or unwed mothers.
The term “single mother” is a modern, liberal euphemism well calculated to protect the guilty, that is to say divorced and unwed mothers. Of these forms of child abuse, the latter is more problematic. Illegitimacy is the single most important social problem of our time.
Before the age of nihilism and political correctness, out-of-wedlock births sullied the reputation of the mother and shamed her family. Since the social roiling of the 1960s, the stigma attached to the curse responsible for illegitimate births has largely disappeared, aided and abetted by the welfare state.
It doesn’t take a Big Brother village to raise a child. A child deserves and is best served by a committed, married mom and dad.
Happy Father’s Day to the working men who provide a home, sustenance and nurture for their children — all of whom are legitimate.
Matt Reeves
Lompoc
So I guess we should encourage all of those single women to get abortions.
who’d ever think that demanding black people read, write and speak English so they can get jobs and support their offspring is a racist idea today.
Lovely how the author blames the mother when 95% of the time it’s the father who bails out on his children.
Well capEtan:
This was a willing choice by the woman to open her legs to a deadbeat man..
Notice how very very few of these pregnancies are because of rape?
(AP)July 3, 2010, 12:25 pm
For years, most people who worked for state or local governments accepted a fact of life: Their pay wasn’t great. The job security was.
Now that’s gone, too.
States and municipalities are facing gaping budget gaps. Many have responded by slashing services, raising taxes and, for the first time in decades, making deep job cuts.
And public employees should brace themselves: Some economists say the job cuts could worsen in the second half of the year.
Those government layoffs make it harder to reduce the national unemployment rate, now 9.5 percent. The rate did fall slightly in June because more than a half-million out-of-work Americans gave up their job searches. Once people stop seeking work, they’re no longer counted as unemployed.
The economy is already under pressure from weak consumer spending, sinking stock prices, a European debt crisis and a teetering real estate market.
“It’s certainly a drag on economic growth in our outlook,” Mark Vitner, an economist at Wells Fargo, said of the loss of public-sector jobs.
It’s also a burden for residents. As state and municipal employees are cut, so are services. It takes longer to register a car, see a school nurse or travel to work by bus.
In California, state-run Department of Motor Vehicle offices have been closed on selected furlough Fridays to cut costs.
In New York City, a new budget will close up to 30 senior centers, shutter a 24-hour homeless center in Manhattan and eliminate nurses at schools with fewer than 300 students.
In Atlanta, the metro transit agency shut 40 bus lines and closed restrooms in June. Even so, 300 employees might lose their jobs to close a $69 million budget gap.
Julie Bussgang used to have assistants to help her keep order in her kindergarten classroom in Albany, Calif. Last year, those assistants were cut. Bussgang was left on her own.
“I’ve had kids calling for help from the bathroom, and I was alone with 24 kids,” she says. “We got through far less of the curriculum than we did in the previous year. Everything took longer.”
State and local governments cut 95,000 jobs in the first half of the year even as the economy slowly recovered. Private employers, by contrast, added 593,000 jobs in that time. It’s the first time the public sector has cut jobs while the private sector has added jobs since 1981, said Marisa Di Natale, a director at Moody’s Economy.com.
In the second half of the year, 152,000 more local and state government employees will be laid off, estimates Nigel Gault, an economist at IHS Global Insight.
Counting companies that work with state governments, a total of 900,000 jobs could be lost to states’ budget shortfalls, according to the Center on Budget and Policy Priorities, a think tank in Washington.
“In California, state-run Department of Motor Vehicle offices have been closed on selected furlough Fridays to cut costs.”
The Friday furloughs are over, at least for now, effective at the end of June. But the effects linger. It now takes about 45 days to schedule the soonest appointment at a DMV (versus just walking in and waiting in line). Last November it was 3 to 4 weeks.
As a side benefit, they get to collect all the fees, penalties, and ticket revenue associated with improper and expired registration. Any pretense that auto fees go to pay for the registration system is gone, and it is just another tax on those of us who actually have to pay.
This is actually encouraging news. Government is downsizing while the private sector is increasing jobs.
“This is actually encouraging news. Government is downsizing while the private sector is increasing jobs.”
Except that the private sector’s still reducing jobs and cuts in certain types of government expenses, like road maintenance, result in greater car repair expenses. In the short term, we need more people working regardless of who’s paying for it. But longer term, more private sector jobs with sufficient pay would be better.
Meanwhile, we’re pouring uncounted trillions into “permanent wars for permanent peace.”
Agreed. I’m sick and tired of wars.
Uhm, I thought Afghanistan was “the good war”, isn’t that what Mr. HopeNChange used to say? Now even that war is no good?
So hard trying to keep the liberal doublespeak straight these days.
WELL all you right wingers those getting unemployment should volunteer their time at the formerly PAID job just to keep the resume fresh
But I’ll betcha union rules prohibit that…
Julie Bussgang used to have assistants to help her keep order in her kindergarten classroom in Albany, Calif. Last year, those assistants were cut. Bussgang was left on her own.
Those government layoffs make it harder to reduce the national unemployment rate, now 9.5 percent. The rate did fall slightly in June because more than a half-million out-of-work Americans gave up their job searches. Once people stop seeking work, they’re no longer counted as unemployed.
The economy is already under pressure from weak consumer spending, sinking stock prices, a European debt crisis and a teetering real estate market.
“It’s certainly a drag on economic growth in our outlook,” Mark Vitner, an economist at Wells Fargo, said of the loss of public-sector jobs.
No, no, no! Government jobs are a “drag on economic growth”, because they have to be paid for by the private sector, either through inflation or through taxation.
Happy and safe 4th of July to all my hbb friends!
Filed under: “…reason # 486 to invest with communist China”
Tibetan environmentalist jailed for 5 years:
Sat Jul 3, 2010
BEIJING (Reuters) - A Chinese court sentenced a Tibetan environmentalist who organized villagers to pick up litter and plant trees to five years in jail for inciting to split the nation on Saturday
Late last year, the youngest brother, Jigme Namgyal, was sentenced to 21 months of re-education through labor for endangering state security for assisting Rinchen Samdrup in running his NGO.
The court found he had helped compile three audio-visual disks on the ecology of the region, possessed materials regarding exiled Tibetan spiritual leader, the Dalai Lama, incited locals to interfere with government work and tried to register the NGO with the government.
Several Tibetan artists and intellectuals have been detained or have disappeared in recent months in what activists say amounts to the broadest suppression of Tibetan culture and expression for years.
I saw a great bumper sticker the other day. It said “F**k Tibet. Worry about what your own government is doing.”
Got that right.
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
How One Broker’s ‘Extremely Heavy Drinking’ Raised Global Oil Prices:
by Jacob Goldstein, NPR / Planet Money
“…British authorities banned a broker who bought more than $500 million in oil futures in a drunken stupor.
The trades cost him his job, led to a net loss of nearly $10 million for his company, and briefly raised the price of oil futures by more than $1.50 per barrel, a rise of about 2 percent.
He was working from home, on his laptop, in the middle of the night, after a weekend of golfing and heavy drinking. He told investigators he was “in an alcohol induced blackout,”
The incident happened last year, but the FSA didn’t issue its findings until last week. The broker was fined 72,000 pounds and banned from working as a broker for five years. When the ban expires, he can apply to have his privileges reinstated.
So much for “rational” markets.
If this is what a drunken buffoon can do, imagine what malicious insiders or hackers could do to bring the whole system crashing down. Scary.
What’s to imagine? You’ve just watched it happened.
Filed under: “…reason # 487 why the world hates the US Dollar”
Why Russia May Free Thousands Of Accountants:
by Ashley Lau,
About one fourth of the 900,000 people in Russian jails are accountants, entrepreneurs, legal advisers or mid-level managers, the deputy head of one of Russia’s lawmaking committees told Bloomberg.
“The current environment is like swimming with crocodiles in a pool of sulfuric acid,” the co-owner of a Moscow chemical distributor, who spent seven months in jail, told Bloomberg. “There’s a war on business people in Russia, and it’s purely business for officials. They can charge you with any crime and incarcerate you to extort money.”
Kind of a nice counter piece with the CISCO article from yesterday.
And yet there are still sucker companies like Cisco Systems that think they can do business in Russia. Good luck with that.
Cisco sent source code to India and it ended up in Huewei (chinese gov. company) products.
Part of outsourcing, get used to it.
Oh and all of the currency discussions we’ve had on here. Other amazing choices are like the Euro, Yaun, Ruble are all going to have major problems.
There is the old basket of currency and gold. Either of those would be fun as well.
Basically a bunch of central bankers wanting more freedom to play games and cause inflation. Aside from ours.
I have just noticed an added sign of price inflation: US Airways recently upped its miles you must redeem for a round trip flight from 25,000 to 30,000 on non-blackout days. That’s a 20% price hike.
The deflation dominoes are falling more and more.
“The deflation dominos are falling more and more.”
The airline’s price hike IS a sympton of deflation. Fewer passengers - a sympton of an economic contraction - are forcing the airlines to boost fees anyway the can.
Their embedded costs are tough to reduce being that they have all those planes they need to pay for (whether filled with customers or not) so their only alternative to keep from going out of business is to boost revenue.
Raising prices in the face of lowered demand? Doesn’t make much sense.
“Doesn’t make much sense.”
Nevertheless, there it is.
Some people have to fly. There is no other way for these people to get to where they need to go in a short amount of time other than by air. These are the people than can be price gouged.
In these cases price is not the determining factor of whether they fly or not, availability of seats is the determining factor. These people may bitch about the prices, but they’ll still pay them.
Not really.
Going from 25K to 30K is not a sign of inflation. FF miles are liabilities on a balance sheet. By getting 30K vs. 25K, USAir is reducing liabilities, not increasing revenues. It is the exact opposite of inflation, which is what again…of yeah deflation.
The cost to an airline to give you that seat, whether for 25K or 30K or 100K is almost $0. The plane is flying with or without you, so the only added cost is the cost of fuel and peanuts for the extra passenger…$10 maybe $20.
Frequent Flyer programs are a scam. I have over 130k miles with Delta and can never find a flight at the 25k-30k levels. However, at the 50-60k level flights are much more readily available.
The airlines have done a terrific job of pissing off their customers.
I ’splained this with mom a long time ago. Rewards/miles are nice but you will never get back the amount in increased fares for airline loyalty.
“The airlines have done a terrific job of pissing off their customers”
The customers have the airline system they deserve. All for the right to fly New York-LA for $139.
All the people who are willing to pay for first class service, and/or don’t live near a “hub” airport, are flying bizjets, either by outright ownership, charter, or fractional.
I know an airplane sales guy who always takes a box of business cards with him when he flies the airline. Every time he sees a pi$$ed off guy wearing a suit in an airline terminal, he gives him a card.
Frequent Flyer programs are a scam. I have over 130k miles with Delta and can never find a flight at the 25k-30k levels. However, at the 50-60k level flights are much more readily available.
You’re in the wrong program. I haven’t had much trouble finding good redemption opportunities on American Airlines, and have never paid the double rate. Of course, you do have to plan in advance, and sometimes pay co-pays, but still it is quite possible to save a LOT of money compared to buying the same tickets with cash.
For instance, I got two business seats from DFW to Buenos Aires this past January/February for a total of 100K miles and $4200. The cash price for those tickets was $6500… each.
The same flights also accrued enough “elite qualifying points” to get both of us Platinum AAdvantage cards. So now we don’t have to worry about luggage charges, can check-in early, reserve better seats, and so on.
I second you, technovelist. Delta sucks. I’ve gotten a lot of great tickets on American through their FF program, and have accrued a ton of miles through the Citibank Aadvantage program.
The best use of miles no matter the program or amount of miles is to upgrade on long haul international flights. A coach ticket to Asia is $1500. A biz class is $3-4K. So using miles to upgrade is a $2-3K value vs. using the same number of miles to buy a $400 ticket from LA to Dallas.
I’m not sure that they’re a scam, but they certainly are GRAFT. Most of the miles are EARNED on company time and are USED for personal travel. They’re clearly kickbacks. The federal government USED to require that all miles earned on official travel be used for official travel. I was shocked when they dropped that rule. I think most people are more likely to book their travel to maximize their mileage benefit than they are to award a contract based on some vender picking up the lunch check. It’s simply become so common and pervasive that people don’t even realize that it’s bribery anymore.
“There’s a war on business people in Russia, and it’s purely business for officials. They can charge you with any crime and incarcerate you to extort money.”
…and that’s different from here?
I’m quite sure they’ll all innocent.
Just pondering over the government debt… 14T… oh… with out interest it is 47K per person.
So your average household has 150k in debt or so.
Then your average debt burden to pay this off in ten years is 1500 per month.
That is about 1/3 the household budget. You can play games about who pays the money with tax rate changes but I guess this is a pretty good estimate. Tremendous debt burden for everyone.
I think simple little ways of looking at things like this are often the most telling. Not quite in a runaway situation but we clearly will still be deep deep in the hole in a decade. Maybe take three decades to dig ourselves out.
You’re assuming that we will dig ourselves out. I see collapse and the end of the USA as a political entity happening first.
In Colorado
“I see collapse and the end of the USA as a political entity happening first.”
You’re not alone in your vision.
James:
You do realize this country has had a debt since Day 1? Debt is nothing new. The day the War of Independence was over we were in debt up to our eyeballs. And 220 years later, we’re still there.
In 1791 the debt was $75M. Doesn’t sound like a lot, but it was 40% of GDP. Today’s debt is 60% of GDP. After WW2 the debt was 120% of GDP.
And your point is? Would you excuse murder on the grounds that it has happened throughout history?
Government debt is, pure and simple, theft by one group of taxpayers from another. And when carried to an extreme, it causes widespread socio-economic problems (witness Argentina, etc.) just like any other type of crime.
LehighValleyGuy,
Give a break with this hyperbole of theft and murder. My point is that we’ve always had debt and always will. The country hasn’t collapsed in 220 years. And it won’t collapse anytime soon because of it.
The country hasn’t collapsed in 220 years. And it won’t collapse anytime soon because of it.
I’d like to feel reassured, but your crystal ball seems a little cloudy. A few months ago, you were predicting Dow 12K by June.
I’m with Eddie on this one. The “National Debt is sort of one of those abstract numbers that doesn’t really mean anything, like the number of galaxies in the universe, or the NFL salary cap.
Just say we had to “liquidate” the country to pay debts. How much do you think Russia would pay to get Alaska back? Or Japan for Hawaii? Or China for the NSA’s databases?
I don’t expect Mexico to offer more than ten bucks for LA…….
The National Debt doesn’t mean anything… until the government can’t borrow any more money, other than from the Federal Reserve.
We’re pretty close to that point now. After that, the next stop is Weimar.
>>I don’t expect Mexico to offer more than ten bucks for LA…….<<
As far as they are concerned its already theirs.
“Debt is nothing new. The day the War of Independence was over we were in debt up to our eyeballs. And 220 years later, we’re still there.”
And back then, we were ever expanding our frontiers and resources, thus increasing our wealth. Just like a company, growth is obviously not unlimited.
Besides, your analogy is stupid — because “X” hasn’t happened up until now, and we’re still here, “X” will never happen? I’m sure the Roman Empire thought along similar lines, until of course, they “weren’t there” anymore.
I’d like to feel reassured, but your crystal ball seems a little cloudy. A few months ago, you were predicting Dow 12K by June.
_____________
11,400 in May not close enough for you?
As somebody else has pointed out elsewhere, it doesn’t make much sense to look at debt on a per household or per capita level because that’s not the way we PAY for it. There’s no real reason to conceptualize my share as being equal to Bill Gates or to the homeless guy under the bridge since we pay different amounts of taxes. If you’re looking at how it changes over time, you generally want to compare it to GDP: how does what we owe compare with what we make. But these are HUGE numbers that few people have a feel for. If you want to see what sort of burden it currently creates, it’s good to look at what percentage of expenditures goes to servicing the debt. How much of our budget simply goes to paying interest on earlier borrowing. But the problem with that is that is is highly dependent on interest rates. When rates go up, it can suddenly become MUCH more difficult to service existing debt levels. THAT is what the deficit hawks stay awake at night worrying about.
I owe a 145K 1st on my home at 6% interest. I’m 8 years into the 30yr fixed loan and am paying down principle now around $350/mo.
I received a unsolicited call from Wells saying I can refinance at NO COST due to a government program HALP, I think. I can get a new 30yr. fixed loan at 5%…a savings of about $92/mo. WTH?
Wells even knows I have a 130K 2nd/HELOC on the property, upside down by 100K.
They won’t refi the entire balance though. Bizarre.
I think the stimulus money is starting to trickle down. Should I take there deal?
See if you are getting stuck with a recourse loan or not. Also if you are going to walk away or not. 100k… depends on the percentage of the loan.
God help you.
Did you use that $130k second to save someones life? If so then I would want your loan to be forgiven.
Nope you guys, I’m fine where I’m at.
The HELOC was used to buy a place for a friend (couldn’t get a loan/great credit) last year. I hold the note at 8%-due in 4 more years. My interest rate is 2.99%. Net profit around $500/mo. Isn’t this what they call “carry trade”?
I just think it insane to refinance from 6% to 5% and start a new 30yr. mtg. just to save 92 bucks a month.
“and start a new 30yr. mtg.” I do not know the deal details to know if it is really “no cost” or the costs are just hidden or buried into the loan. If the gov. really is paying for it, and if you applied the savings towards principal, your loan will be paid off earlier than under the current schedule. Make sure it includes early prepayment with no penalty. I would ask them to send you an amortization schedule or do it yourself to see how many months you cut off.
Thanks Natalie, they also offered a 20yr or 15yr loan…the APR is the same as the interest rate, so there is NO fees. (bank makes their money charging 5% when it should be 4.5% or so). I haven’t received the paperwork yet, but will report back as far as prepayment penalties, etc. I make extra principle payments currently. I have a feeling banks will start lending again and this is just the beginning…I’m gonna hold out for a better deal, or not.
Yes, I agree with RER below, SERIOUSLY consider locking in a 15 year loan, even if the ammount /month is slightly more. When you look at ammortization tables, you pay down interest much more quickly in the first few years of a 15 year loan compared with a 30 year loan, although the effect is not as severe at lower interest rates.
In order to evaluate this deal, add up the remaining interest you’ll be paying on your current loan.
Then add up the total interest on the proposed loan.
I’m willing to bet that the total interest on the new loan exceeds the remaining interest on the current loan.
Finally check out a 15-year loan on your remaining principal, again looking at total interest paid and if you can afford the monthly payments. See if WF will go for that.
“Should I take there [sic] deal?”
FWIW, you will draw the short straw in any contractual deal.
“So your average household has 150k in debt or so….I see collapse and the end of the USA as a political entity happening first…You’re not alone in your vision.”
Observe and learn, grasshoppers, how bankster mob money and debt can ruin lives, families, businesses, entire countries, and empires.
So does the U.S. Congress control The Federal Reserve or is really it visey versey???
You’ve seen Maxine Waters and some of our other critters in Congress.
Not the most intellectual bunch.
They really think they are doing you a big favor by getting you a loan.
They think they are doing the country a favor by getting into more debt and running more stimulus projects. Not realizing how this might effect us from a competition standpoint.
They aren’t looking at our tax/benefit structure from an international standpoint. They aren’t looking carefully at stimulus as investment to make us more competitive.
This is taking into account the small percentage that can possibly identify the bill of rights OR know what the function of congress is. Most of the congresscritters are salesmen.
Thomas Jefferson’s name gets thrown around these days by the tea partisans, which is a good thing. A populist movement of the right or left that neglected Jefferson would be a sorry affair indeed. Jefferson’s distrust of concentrated power was such that he left a legacy for every dissenter against the state.
But Jefferson did not stop there.
He was, as well, a relentless critic of the monopolizing of economic power by banks, corporations and those who put their faith in what the third president called “the selfish spirit of commerce (that) knows no country, and feels no passion or principle but that of gain.”
Jefferson might not have wanted a lot of government, but he wanted enough government to assert the sovereignty of citizens over corporations.
In the early years of the 19th century, as banks and corporations began to flex their political muscles, he announced: “I hope we shall crush … in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.”
Some would have us believe the founders intended for corporations to control our elections — and, tragically, five of these Tories sit on the U.S. Supreme Court, where they recently ruled that the nation’s biggest businesses may spend whatever they like to buy the results that serve their bottom lines.
The better angels among the founders would be aghast.
host.madison.com/ct/news/opinion/column/john_nichols/article_1ad1454d-3da6-5030-aa58-5b3b30adcb8f.html
Measton, I’m glad to see that you’ve become a Jeffersonian. Now let’s try to figure out what Jefferson meant by “crush[ing] … in its birth the aristocracy of our moneyed corporations.”
According to Ted Nace’s book “Gangs of America”, in 1800 there were 335 business corporations in the U.S., and during the subsequent decades there were frequent debates about whether and under what conditions new ones should be chartered. What would Jefferson have thought? Would he have favored chartering thousands of new corporations, and then enacting hundreds of thousands of pages of impenetrable regulations in an effort to pretend that citizens “control” them? Or would he have agreed with the New Jersey editorialist of the 1830s (also quoted in Nace) that “Legislatures ought
cautiously to refrain from creating the irresponsible power of any existing corporations or chartering new ones. . . .” ?
Strangely, Nace himself opines that “by 1816 getting rid of the corporation was no longer a viable political option.” Would Jefferson have agreed? Remember, this is the guy who thought we needed a new revolution every generation to keep government from getting out of control.
I’m no expert
I suspect that if Jefferson had wanted to do away with corporations he would have said so.
I’m no expert
Me neither. But chartering zillions of new corporations and then setting up dozens of new bureaucracies to surf the net while pretending to regulate them, doesn’t sound like “crushing them in their birth” to me.
Happy Fourth!
If a Depression is on your mind, here’s what to do:
http://tinyurl.com/37odfb3
I keep wondering if anyone can be prepared enough for a depression. It’s interesting the author said all recessions are actually depressions, but economists called them “recessions” so that people would not panic them into more severe economic crises.
This “recession” officially started in December of 2007. And recently some economists have been saying this recession is over. From my perspective, that’s debatable. People are still tight with their money. The workplace where I work has plenty of stuff to do but they eliminated overtime two years ago. Also with the official unemployment rate at 9.5% (14% in Nevada and 12% in California), a lot of people are feeling a depression out west.
I thought it’s interesting the author mentioned how valuable treasuries were in the GD. “At times of peak panic during the Depression, people would pay more than $1,000 for a $1,000 T-bill — just to make sure they got $1,000 back.”
There were no TIPS, as far as I know, in the GD. But even they would be valuable IMO. Certainly Savings bonds. I bond yields would be 0% in the depths of deflation. In fact, this was the yield for I bonds in 2009 from May to November.
Do any of you have a plan of action? Downsizing? My drastic plan in case I lose my job is to sell most of my stuff or give it away and rent an apartment where I used to rent in Tucson. The rent is $679 for the 1 bedroom unit I rented in 1997. The rent back in 1997 was $650. The location is perfect. Or I can get a studio for $500 per month in the area. Lots of good roads for road biking and several nearby trails in the Catalina foothills for mountain biking.
From the article:
“In a deflationary period:
“Debts become progressively more onerious, because wages shrink or disappear entirely. Income becomes more valuable, because each payment has more buying power.”
Lesson: Keep your job. If offered an early retirement incentive DON’T TAKE IT! Keep on working instead. A job translates into a steady flow of incoming cash.
My father rode on some boxcars from Ohio to California as a teenager in the 1930s. He was an adventurous type. He did the right thing, had few possessions, was very flexible. Worked in steel mills, was a boxer, did demolition derby, managed a drive in restaurant where the waitresses were on roller skates. Worked on his grandparents’ farm. Learned how to fly at a junior college in Maine, enlisted in the Army Air Corps and flew planes in the Pacific in WWII. His grandfather lost $1 million in the GD. Most of that money was in stocks.
I learned from my father that flexibility is key. Unfortunately in my case I have to be flexible in my 50s. He was flexible in his 20s and 30s. In his 50s he had a paid off house.
Yes you are right. Having an income keeps you in survival mode. I wonder how many of the 25% unemployed during the GD were not flexible - that they had to stay in their neighborhood because their kids were in school or because they had a house in that area? In my dad’s case, he did not wait around for jobs, He was proactive and went to the jobs. The unemployment rate to people who go to the jobs is probably a much lower rate than the unemployment rate for people who wait for jobs to come to where they are.
My dad was in the navy around 1930, and I’m pretty sure he was floundering before getting on permanent with Pac Bell around 1938. His father was phone co. too, and my mother (divorced) said g-dad got his son a job. But later my dad said no, all the guys at Pac Bell had sons who needed jobs. What he did was work on the crews stringing power lines across the desert from Hoover Dam, and hung around and hung around hiring offices until he finally got something. Then he hung on for dear life and worked his way up to white collar & big desk.
Only after he was established did he marry my mother and start a family. He was about 30 by then. He was on track to be a VP and move back to NYC but his rise was halted by the GI’s graduating from college. I found this out from the diary I discovered after he died.
My plan of action is to keep working if I can find a job that I don’t despise, which is a moderately likely possibility at this point. Otherwise, my expenses are low enough that my monthly nut can be met via Social Security starting next year, so my savings will last a LONG time (30 years or so) even if they don’t go up in purchasing power any more than they have in the last 10 years.
So I’m hedged against a deflationary depression (as unlikely as that may be) via Social Security, and a hyperinflationary one via the normal means.
As for Treasurys, I wouldn’t buy them with someone else’s money, as I expect a hyperinflationary depression when the government turns to the Federal Reserve as the “lender of last resort”.
Adventures in homeownership:
Before indulging in fire-based activities, make sure the correct hose is attached to the pump. You’ll save yourself a few heart-stopping moments.
Boy am I glad I’ve been watering the lawn…
Okay B. Durbin, fess up! You’ve piqued our curiosity so you owe us.
Does it by chance involve alcohol and barbeques?
Okay,
My favorite way of celebrating the Fourth: A good burger and fries from the Counter. And I’m now awaiting fireworks. But it looks like it will be an overcast evening. So going to Redondo Beach King Harbor will be a waste of time. A couple of glasses of Forth wine (Cabernet Sauvignon) and I’m good - really really!
Contrarian Chronicles7/2/2010 5:00 PM ET
The housing bubble hangover, part 2
A booming ’shadow inventory’ in the housing market is almost certain to bring another wave of falling prices and another round of Federal Reserve stimulus.
By Bill Fleckenstein
MSN Money
Economic and financial problems are now garnering more attention as the “Goldilocks” viewpoint that prevailed earlier this year has disappeared — which isn’t surprising, as that view was only a mirage anyway.
Much of the blame for upcoming weakness can be laid at the feet of housing, although there are going to be additional culprits. As folks know, government incentives have mostly run out (though the time to close on a home and get a tax break was extended), and supply is building and liable to swamp demand. That should lead to lower prices, which will likely also impact psychology.
Scared of its own shadow
Recently mortgage banker Mark Hanson nicely laid out a handful of reasons for housing’s excess supply, or “shadow inventory.” Readers may recall from the real-estate bubble days that I used to refer to Mark as “Mr. Mortgage,” before he revealed his identity. He understands the housing and mortgage markets better than anyone else I know, so I thought I would share some of the causes for pent-up supply mentioned in his recent report:
The 8 million loans in some stage of delinquency.
The 100,000 to 125,000 new notices of default being given out monthly.
Short sales, which are surging and are now government-endorsed through the Treasury Department’s Home Affordable Foreclosure Alternatives Program, and may be the ultimate form of shadow inventory due to the fact the borrower does not have to be delinquent and the property never has to be listed on the Multiple Listing Service. With almost 30% of the 57 million homeowners who have mortgages owing 95% or more on their property, the pool of more than 15 million homes that are short-sale eligible is a mega-threat.
Modification re-defaults, which, according to Standard & Poor’s, will occur at a 70% rate. Based on the national loan modification surge that began in earnest only in the third quarter of 2009, and the ultimate bubble we are experiencing now, we are seeing just the positive effects of modifications and not the negative re-default effects. But the leading edge of the re-default wave is upon us now, and before long it will produce a new and substantial channel of mortgage loan defaults and foreclosures that few are modeling at this time.
An improvement in sentiment and price stability in some regions that has encouraged homeowners to sell after holding off for three years as the market crashed. In fact, as sales surged last month, thanks to the taxpayers’ gift (the homebuyer credit), inventories rose sharply, catching even National Association of Realtors economist Larry Yun off guard. He commented on it after last month’s existing-home-sales report. This is the first evidence of pent-up supply having a negative impact on housing fundamentals.
I agree with Hanson that the effects of all this are only just beginning to be felt, but it seems to me that the second leg of falling home prices is probably under way. That, plus high unemployment, ought to force the Fed to swing into action.
Contrarian Chronicles7/2/2010 5:00 PM ET
The housing bubble hangover, part 2
A booming ’shadow inventory’ in the housing market is almost certain to bring another wave of falling prices and another round of Federal Reserve stimulus.
By Bill Fleckenstein
MSN Money
Economic and financial problems are now garnering more attention as the “Goldilocks” viewpoint that prevailed earlier this year has disappeared — which isn’t surprising, as that view was only a mirage anyway.
Among other things, Broaddus said that he had expected the language in the Fed’s June 23 communiqué to be “markedly more pessimistic, less optimistic than the corresponding statement after the April meeting.” Of course, it wasn’t markedly different; it was just somewhat weaker. Perhaps the Fed is trying to avoid spooking folks. Broaddus also noted that weakness in the housing market “increases the probability” the Fed will be happy to let Q.E. II set sail.
Much of the blame for upcoming weakness can be laid at the feet of housing, although there are going to be additional culprits. As folks know, government incentives have mostly run out (though the time to close on a home and get a tax break was extended), and supply is building and liable to swamp demand. That should lead to lower prices, which will likely also impact psychology.
Scared of its own shadow
Recently mortgage banker Mark Hanson nicely laid out a handful of reasons for housing’s excess supply, or “shadow inventory.” Readers may recall from the real-estate bubble days that I used to refer to Mark as “Mr. Mortgage,” before he revealed his identity. He understands the housing and mortgage markets better than anyone else I know, so I thought I would share some of the causes for pent-up supply mentioned in his recent report:
The 8 million loans in some stage of delinquency.
The 100,000 to 125,000 new notices of default being given out monthly.
Short sales, which are surging and are now government-endorsed through the Treasury Department’s Home Affordable Foreclosure Alternatives Program, and may be the ultimate form of shadow inventory due to the fact the borrower does not have to be delinquent and the property never has to be listed on the Multiple Listing Service. With almost 30% of the 57 million homeowners who have mortgages owing 95% or more on their property, the pool of more than 15 million homes that are short-sale eligible is a mega-threat.
Modification re-defaults, which, according to Standard & Poor’s, will occur at a 70% rate. Based on the national loan modification surge that began in earnest only in the third quarter of 2009, and the ultimate bubble we are experiencing now, we are seeing just the positive effects of modifications and not the negative re-default effects. But the leading edge of the re-default wave is upon us now, and before long it will produce a new and substantial channel of mortgage loan defaults and foreclosures that few are modeling at this time.
An improvement in sentiment and price stability in some regions that has encouraged homeowners to sell after holding off for three years as the market crashed. In fact, as sales surged last month, thanks to the taxpayers’ gift (the homebuyer credit), inventories rose sharply, catching even National Association of Realtors economist Larry Yun off guard. He commented on it after last month’s existing-home-sales report. This is the first evidence of pent-up supply having a negative impact on housing fundamentals.
I agree with Hanson that the effects of all this are only just beginning to be felt, but it seems to me that the second leg of falling home prices is probably under way. That, plus high unemployment, ought to force the Fed to swing into action.
Nothing slows the continued theft by executive nation, not even bankruptcy….
Under that proposal, unsecured creditors, including bondholders owed $35.8 million, would receive a $365,000 “cash gift,” while Neff’s lenders would take the company’s equity or cash repayment.
Bank of America Corp. (BAC), Wells Fargo & Co. (WFC) and GE Capital Markets Inc. are providing the financing. Neff revealed that it will pay those lenders about $5.5 million in fees after the bankruptcy watchdogs at the U.S. Justice Department objected to the company initially withholding the information from public view.
Also Wednesday, Neff obtained court approval to pay more than $900,000 in bonuses to its top 10 officials, including Chief Executive Graham Hood.
To be paid those bonuses the managers must meet certain earning targets for three specific timeframes.
Hood is in line to receive a $225,000 payment and Chief Financial Officer Mark Irion could see as much as $130,500. Eight Neff vice presidents would share in the remaining bonus pool, if the targets are reached.
http://online.wsj.com/article/BT-CO-20100701-710667.html
Up for a challenge? try following this cluster of a foreclosure:
1. On December 7, 2004, James L. Morgan and Carol L. Morgan (the Morgans) executed that one certain Texas Home Equity Adjustable Rate Note in the original principal amount of $500,000.00 payable to Argent Mortgage Company, LLC (Argent), which was recorded on December 15, 2004 in the official public records of Montgomery County, Texas (the First Lien Note). [Movant's Ex. No. 1].
2. On December 7, 2004, the Morgans also executed an instrument entitled Texas Home Equity Security Instrument, which was recorded on December 15, 2004 in the official public records of Montgomery County, Texas (the First Lien Deed of Trust). [Movant's Ex. No. 2].
3. The Morgans executed the First Lien Deed of Trust in order to give a first lien on the certain real property to Argent so that the First Lien Note would be collateralized. Specifically, the Morgans granted a lien on improved real property located at 16909 Butera Road, Magnolia, Texas (the Property). The First Lien Deed of Trust contains a due on sale clause with respect to the Property. [Tape Recording, 5/25/2010 Hearing at 11:17:44]. [Movant's Ex. No. 2].
4. On December 13, 2004, Argent assigned the First Lien Note and the First Lien Deed of Trust to Ameriquest Mortgage Company (Ameriquest). [Movant's Ex. No. 3]. This transaction was evidenced by a document entitled: Assignment of Deed of Trust Document Number 2010041985. Ameriquest did not record this document.
5. On the same day that Ameriquest took an assignment of these instruments—which was December 13, 2004—it assigned the First Lien Note and First Lien Deed of Trust to Wells Fargo Bank, N.A. (Wells Fargo).[ 4 ] [Movant's Ex. No. 4]. This transaction was evidenced by a document entitled: Assignment of Deed of Trust Document Number 2010041986. Wells Fargo did not record this document.
6. Barclays Capital Real Estate Inc. DBA Homeq Servicing (Barclays) is the servicer for Wells Fargo. Therefore, Barclays is responsible for, among other things, collecting payments that are due under the First Lien Note.[ 5 ]
Here’s the rest…
http://www.leagle.com/unsecure/page.htm?shortname=inbco20100702540
Umm…After reading the link and not comprehending the typical dry lawyer-ese, I reached the final paragraph.
The debtors (the Morgans) are not liable to Well Fargo. However Wells Fargo rightfully can foreclose on them.
I take it the debtors don’t have to pay attorneys fees to Wells Fargo yet WF can foreclose.
Who wins?
The future buyer of the house, whenever that sale occurs (next year? five years from now?).