Bits Bucket For July 24, 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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Name:Ben Jones
Location:Northern Arizona, United States
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You mean if I can buy insurance once I get sick without any pre-conditions for the same price as buying it while healthy, I won’t buy insurance until I get sick? Nobody could have possibly seen this coming.
Maybe the next law Obama can sign into law is one that says I can buy homeowners insurance until after a fire burns the house and still be covered and I can buy car insurance after I have an accident and still be covered.
“WASHINGTON (AP) — Some major health insurance companies will no longer issue certain types of policies for children, an unintended consequence of President Barack Obama’s health care overhaul law, state officials said Friday.
Florida Insurance Commissioner Kevin McCarty said several big insurers in his state will stop issuing new policies that cover children. Oklahoma Insurance Commissioner Kim Holland said a couple of local insurers in her state are doing likewise.
Starting later this year, the health care overhaul law requires insurers to accept children regardless of medical problems — a major early benefit of the complex legislation. Insurers are worried that parents will wait until kids get sick to sign them up, saddling the companies with unpredictable costs.”
Don’t touch that third rail; you will get burned!
Yeah. It’s just going to put companies under and into the arms of govt. Which was the entire plan.
Is that why David Camp (Republican, Michigan) put forward a motion to eliminate the mandate from the entire health care reform law last week while leaving the “can’t get denied for preexisting conditions” portion in place? So, what was he trying to do? Eliminate private insurance in the US and force a single payer system? Because that is what the proposal would do. Oh, wait. Maybe he never meant for it to pass. It was just a political game. Why didn’t I think of that in the first place?
“You mean if I can buy insurance once I get sick without any pre-conditions for the same price as buying it while healthy, I won’t buy insurance until I get sick?”
There are religions that operate this way. If you have the option to convert in the afterlife, why would a rational person convert while still alive?
The kid quit college first semester. He was taken off our insurance policy and yesterday we received an offer from COBRA, around $350/mo. to keep him insured!
People who want insurance companies to accept anyone and charge the same rate to everyone, don’t understand what insurance is.
You are trying to compare insurance to socialism. What the Democrats are calling “insurance reform” is really socialized medical care. It’s really simple. Everyone pays. Some pay more than others. Everyone gets the same service, regardless of their general health, their personal lifestyles, their pre-existing conditions, and their health history.
To socialists, this is fair. Everyone is the same.
If you eat like a pig, get 100 lbs. overweight, smoke heavily, drink gallons of booze, snort cocaine, and have multiple sex partners, a series of infectious deceases, and spend most of free time watching Oprah and other informative shows………..you get the same care and service at the same price, or less, than someone who is more conscientious of their health.
That is the socialist dream. A world without distinctions and “prejudice”.
Everyone gets the same service, regardless of their general health, their personal lifestyles, their pre-existing conditions, and their health history…. Everyone is the same
On what planet? The rich in countries with socialized medicine can pay more for optional coverages by paying for it with cash or with private insurance riders that cover more.
It’s not as scary as your “everyone is the same” distorted description.
See? Even in Communist Red Canada they can still stick it to the man.
Health & Dental Insurance for Canadians
Canadian Family Medical Plans Insurance Direct Canada IDC
Are you one of many Canadians looking to supplement your Provincial Health Plan?
Thousands of Canadians are seeing the need to supplement their Provincial Health Plan with a private health insurance plan that will support them should the unforeseen happen.
Common health care expenses including eye glasses, prescription drugs, ambulance services and dental work – among others - are not covered by most Provincial Health Plans. These expenses can easily be covered by a health and dental plan.
Really, Diogenes , there is nothing precluding you or anyone else from paying more to get more.
On the other hand, your worthless slob caricature may get treatment for that XDR-TB and thus keep it from becoming an epidemic. Or AIDS. Or Dengue Fever. Or West Nile. Or just the plain old flu for that matter. And I’ve only named the diseases we have to worry about in my state.
Don’t forget it also counts on the magic money fairy to pay the bill.
Ever heard the one that goes “An ounce of prevention…?”
The Ounce of Prevention is personal care. Not government care. It is not up to the government to see that we take care of ourselves.
And what you point to as examples for government interdiction is EPIDEMICS. Well, gee, that makes sense, the government should try to stop the spread of disease for the good of the society. That’s been done throughout human history and has nothing to do with “public health care.”
As for AIDS, the government turned AIDS sufferers into a protected class, rather than quarantine them and try to prevent the spread to the broader society.
Thankfully, the transmission through blood limited its effect to the broader population, but i thought the CDC did a terrible job with the misinformation they spread about the methods of transmission and likelihood of infection.
But what’s amazing about the counter-arguments from my short post was this:
“Thousands of Canadians are seeing the need to supplement their Provincial Health Plan with a private health insurance plan”
Why would thousands of Canadians be seeking to purchase private health insurance to supplement the “public health care plan”????? Isn’t the purpose of having public health care so you don’t need private insurance? After all, Obama’s plan REQUIRES EVERYONE (who isn’t collecting a welfare check, their’s is free) to pay about $3500 a year for PUBLIC rationed HEALTH CARE Services. That will start in about 2 years.
The Democratic Congress even authorized 16,000 additional IRS agents to make sure each and every one of us pays the tribute the State thinks it is entitled to collect, for our own benefit, of course.
Cuba has public health care, along with Argentina, the former Soviet Republics, and yes, Canada, and Finland and Germany, too. In most places, I haven’t heard much good about it, other than they have it. Yet, when Castro had heart problems, he flew to Spain. Many Canadians come over the border here.
I agree there is a LOT of things that needed to be done to improve healthcare in the US of A. Tort Reform would have been a good start. Forcing states to allow insurance from other states would have been another. The fact is that TOO much regulation, that benefits the current players is hampering the insurance industry. Changing the regulations would have been a good idea. The current clan of Democrats who wrote the Obama Plan would have none of it.
dIOGNESE
We ration care here as well.
1. Caps on insurance plans, if you use to much you get kicked off.
2. Small companies forced to drop coverage when one employee gets cancer. That employee is then put in a very expensive high risk pool that pays nothing. The other employees who loose benefits have to purchase expensive plans on the open market. Of course many of them have less expensive illnesses that are now considered pre existing and aren’t covered.
3. Insurance companies deny coverage for a treatment that is rational based on available data but doesn’t have phase III data.
4. Insurance companies like Well Point dropping coverage for individuals with Breast cancer. They go back through your chart and if you didn’t report hypertension but at one of your doctors apts your BP was elevated, Well Point accuses you of lieing and drops your coverage..
5.
You said
Cuba has public health care, along with Argentina, the former Soviet Republics, and yes, Canada, and Finland and Germany, too. In most places, I haven’t heard much good about it, other than they have it
Well
Then you aren’t reading much. They pay 50% less per person and have very comparable outcomes.
Diogenes wrote - “Forcing states to allow insurance from other states would have been another. ”
The big problem with this is the insurance companies will “arbitrage” their risk and advantages between states. An example of this is S. Dakota and the credit card companies(Citibank comes to mind.). They are based there because of the advantage of S. Dakota law over most to other states concerning usury rates. S. Dakota has no usury laws while most other states have an 18% cap.
I’m just saying that it sounds good until you realize you have to change 50 states worth of rules and laws. Oh, and then you get into “Grandfathering”.
I just don’t know that it is practical.
Roidy
5 polls of THE ONE’s approval released this week.
Gallup: 44%
Rasmussen: 43%
CNN: 47%
Quinnipac: 44%
Fox News: 44%
The sheeple are finally waking up.
MSNBC 92%
Good one! Except it’s probably more like 98.5%.
His main, and now pretty much only, support comes from uneducated blacks. The same group he so brutally exploited to rise to power. Sigh.
That and unions,hispanics,hollywood,siliconvalley,media,teachers,college professors and last but not least 80% on this blog.
“and last but not least 80% on this blog”
That had me confused a bit for a while myself, but then again, you gotta figure in the fact that most of the areas most heavily hit by the housing bubble are areas that tend to have a heavily left leaning political culture.
His main, and now pretty much only, support comes from uneducated blacks. The same group he so brutally exploited to rise to power. Sigh.
The math doesn’t work.
Blacks are about 12% of the US population. Maybe half are voting age? We’re down to 6%. IDK. Maybe a third of that 6% have a college degree so we’re down to 4% of the American population. 25% of that 4% might not like Obama. We’re down to 3% of the American population.
Maybe 3% of the population is Obama’s main support?
“A third have a college degree.” Ha!!… maybe a third of a third of a percent.
“A third have a college degree.” Ha!!… maybe a third of a third of a percent.
Oh really?
17.6 percent of all black adults over the age of 25 have completed a four-year college education.
http://www.jbhe.com/news_views/47_four-year_collegedegrees.html
Add that to the AA degrees and various tech certifications not included in the above 17.6% I would say my estimate of 1/3 of adult black people having college degrees is close and your estimate of a 1/3 of a 1/3 has no basis whatsoever.
Let us not forget the self-educated who sometimes are smarter than those with college degrees.
And those blk males that have 4 yr college degrees get arrested at the same rate as whites…does sharpton or Jesse ever get a clue?
Maybe five percent of the sheeple, at best, are waking up, and far fewer are taking any kind of positive action to halt our march to national bankruptcy and a corporate collectivist state. My evidence? Wait till November, when the sheeple once again lurch into the voting booths and replace one set of Bankster-owned Republicrat marionettes and whores with another in the name of “change.” Just like the dupes did in Nov 2008, only to find the New Boss was pretty much the same as the Old Boss.
The great mass of sheeple remain as lobotomized as ever, and will right to the end.
Ah the old “lesser of two evils” approach. If you remember though, once Clinton was faced with a republican congress, our economy began to soar, and depending on how you do your math, we even balanced our budget for a few years. Republican congresses are almost willing to act as real fiscal conservatives when they are trying to stop the agenda of a democrat president. Maybe they can do the same thing with Obama.
We’ll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone
And the men who spurred us on
Sit in judgment of all wrong
They decide and the shotgun sings the song
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around me
Pick up my guitar and play
Just like yesterday
And I’ll get on my knees and pray
We don’t get fooled again
Don’t get fooled again
Change it had to come
We knew it all along
We were liberated from the fall that’s all
But the world looks just the same
And history ain’t changed
‘Cause the banners, they all flown in the last war
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around me
Pick up my guitar and play
Just like yesterday
And I’ll get on my knees and pray
We don’t get fooled again
Don’t get fooled again
No, no!
I’ll move myself and my family aside
If we happen to be left half alive
I’ll get all my papers and smile at the sky
For I know that the hypnotized never lie
Do ya?
There’s nothing in the street
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Is now the parting on the right
And the beards have all grown longer overnight
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around me
Pick up my guitar and play
Just like yesterday
Then I’ll get on my knees and pray
We don’t get fooled again
Don’t get fooled again
No, no!
YAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAH!
Meet the new boss
Same as the old boss
What’s this got to do with the housing bubble’s effects on the economy?
I’m no fan of Obama, but if you have to bash him here, can’t you at least nominally relate it to the subject at hand?
No he can’t. EddieTard has been banned from every internet forum except the HBB….. for now.
For what? Being a shameless Republican hack?
Like your ilk isn’t poisoning the blog with your socialist stuff.
+1
socialists, hobgoblins and boogeymen…. oh my!
What’s this got to do with the housing bubble’s effects on the economy?
That should be blindingly obvious for anyone with an IQ a point or two higher than ‘moron’, but I’ll explain.
BOTH parties voted for “ownership society” lending and credit policies that enabled an unprecedented degree of fraud, speculation, and unsound lending that created and sustained the housing bubble.
BOTH parties voted to bail out TBTF banks and other lenders who were far more concerned about short-term bonuses and creating fictitious “value” out of thin air than they were about the long-term viability of those loans.
BOTH parties continue to support bailouts and unprecedented government intervention into the markets and the economy, to prop up speculators at the expense of taxpayers.
BOTH parties oppose auditing the Fed and exposing the extent of collusion between the Fed, the banks, the rating agencies, and the supposed regulatory agencies.
The housing bubble is a direct effect of unsound policies that enabled millions of irresponsible people to take on financial obligations they couldn’t or wouldn’t honor. And the electorate continues to put their seal of approval on incumbents and candidates who are beholden to the banks and REIC, rather than promoting sane fiscal policies and personal responsibility/accountability, and letting borrowers and financial institutions suffer the consequences of their own greed and stupidity.
Is that linear enough for you, varelse?
I really think our litmus test for which politicians are decent is the TARP bailout. Especially the first vote, but for me first or second.
The Senate approved the bailout measure on Oct. 1, 2008, on a bipartisan vote of 74 to 25. The House initially rejected the proposal, but under prodding from the White House and leading members of both parties, House members ultimately voted 263 to 171 for the bill, with 91 Republicans joining 172 Democrats in backing it; 108 Republicans and 63 Democrats voted no.
Glass Steagle and any bill that supports outsourcing of our jobs would be #2.
Isn’t 43% just about enough to carry an election? And there is a good chance the economy will be on an upswing by 2012 — lots more than at the moment, anyway…
I feel this as well. The downswing was from 2006.5 till now… fell like we are getting a lot closer to the bottom of all this.
While it will certainly be quite rocky, I’m seeing the beginnings of recovery.
NODs have fallen and seem to be past peak. Estimates of REO on books were a bit higher than what it turned out to be.
Late in 2012 we’re in recovery and BO will be claiming he actually did something to make it happen.
Wonder how much damage he causes between now and then? Like most policies; it will not be clear for a while. Kind of like socialized medicine. Starts off OK but puts you on the road to ruin, unless like the stupid liberals on here, you take a nice short term look at history and gloss over all of the currency and governmental collapses.
Quite your whining sissy.
Could you please pay my health insurance… I don’t have any money, cause I lost it all.
Could you also pay my mortgage, cause the realator told me I could refinance.
And you too.
PB, do you think we’ll really be seeing the “Green Shoots” of recovery by 2012? Unless someone gives this economy a badly-needed enema, I just don’t see it.
Enema could be on the way…
If they find the courage to follow through on this plan, which for now is only discussed in hushed whispers, an unprecedented boom in the economy may result, as young families with high levels of training and future potential who are currently priced out of relocating would suddenly have the means to move and lay down roots where their skills and entrepreneurial talent could light fires under sluggish Main Street economies. They could unleash Main Street’s vast economic potential by a move to restore housing affordability and, by extension, labor market mobility, to historic norms.
Wall Street Whispers:
Will Obama Slay the Fannie and Freddie Beast?
A startling whisper has been reverberating around Washington and in the main stream press: Might President Obama slay the beast of Fannie Mae and Freddie Mac once and for all?
Such a move would fundamentally change both the way Wall Street operates and the way Americans think about life.
The Obama administration appears to be suggesting — very subtly — that homeownership isn’t a God-given right. That the American dream has morphed into an American entitlement. That millions of people who should not have been homeowners in the first place ended up paralyzed by unsustainable debt as a result.
And that, finally, to repair the system, the Fannie Mae and Freddie Mac model of subsidized housing should be resigned to the past.
Of course, senior administration officials who have been suggesting such a change aren’t the first ones to come up with it. Republicans and scholars have been saying so for quite some time.
Yet, it’s important that folks in Obama’s camp are starting to come around to the idea — publicly — that fewer Americans ought to be homeowners. Ultimately, they will be responsible for the structure of U.S. housing finance going forward — as well as the direction of trillions of dollars in private money that moves along with it, and the way major money center banks like Bank of America, Wells Fargo, JPMorgan Chase and Citigroup operate.
The administration has yet to “officially” outline any plan for the future of Fannie, Freddie and other so-called government-sponsored enterprises like Ginnie Mae and the Federal Home Loan Banks. Yet evidence is piling up about a shift in thinking — from a model where the government is heavily involved in mortgage finance to one where it’s largely absent.
“This crisis reaffirmed the need to achieve a better balance between ownership and rental housing,” HUD Secretary Shaun Donovan told lawmakers in the spring.
Another senior HUD official was more direct in an interview with the Washington Post recently: “In previous eras, we haven’t seen people question whether homeownership was the right decision. It was just assumed that’s where you want to go. You’re not going to hear us say that.”
…
THAT is the kind of graphic assessments we need in mainstream media…
Of course Obama is opposed to home ownership. He wants a country of people with no skin in the game. If you own nothing, you have nothing to fight for. And when when you own nothing and have nothing to fight for, a govt takeover is that much easier.
This is correct.
It’s interesting that Fannie/Freddie haven’t been touched. Why is that?
I think something more diabolical is in store - like disappearing property rights.
“Of course Obama is opposed to home ownership.”
Well, Eddie, that certainly squares with efforts so far to help the GSEs keep housing unaffordably priced.
But what will you say if the GSEs’ grip on housing is relaxed, and housing is allowed to adjust back down to affordable levels. Would you feel a moral obligation to retract all the nasty things you say about Obama every time you post here, and perhaps even to vote for him in 2012?
I am looking forward to the change of heart and attitude.
“I think something more diabolical is in store - like disappearing property rights.”
Or, horror of horrors, home ownership only remains available to those who can afford to repay their loans or otherwise fund a home purchase out of their permanent incomes. (Shudder…)
Freddie and Fannie are still there because they are the biggest slush funds for the demoncrats !
Let me be the first to say it was 85 degrees out at 1 am …and humid as all ……well i had to take the garbage out
Hah, I was swimming through the bathwater on the way home from work at 3 a.m. What a night, what a day. Are the open houses still jammed?
Be prepared to slash prices if you want to sell
In today’s market, you have to price aggressively if you expect to attract multiple offers.
By Amy Hoak of MarketWatch
no federal tax credit to entice buyers, today’s home sellers have to get even more serious about making a deal.
That means pricing aggressively — low enough to compete with foreclosures in some markets. It’s a conversation that stings, said Summer Greene, a real-estate agent for a Better Homes and Gardens Real Estate brokerage office in Fort Lauderdale, Fla.
“It’s like telling them that their children are ugly,” she said.
Many people with homes on the market already are slashing prices to catch buyers’ attention. Twenty-four percent of listings on the market as of July 1 had gone through at least one price reduction — that’s a 9% increase from the previous month, according to the most recent data from Trulia.com, a real-estate listings website.
Price cuts are more prevalent in some markets than others, and the average size of the cut varies, too. In Minneapolis, for example, 40% of the listings had at least one reduction and the average reduction was 9% of the listing price. In Las Vegas, 12% of the homes had price cuts, but the reductions averaged 15% off the listing price.
Watch your wallet in the presence of realtors and mortgage salesmen.
At least you can avoid using the services of these bloodhounds and not give them money. I wish I could say the same of politicians. Realtors and mortgage brokers are nothing compared to the vile brew of politicians we now have sniffing at our wallets, with only one thought in mind. “Everything inside that wallet belongs to us.” That is much scarier.
It IS scary, but it’s also what the American sheeple keep voting for. BOTH parties are corrupt, and BOTH parties are actively abetting the Fed-Wall Street collusion in ripping off taxpayers to subsidize the TBTF banks reckless speculation.
“It IS scary, but it’s also what the American sheeple keep voting for. BOTH parties are corrupt, and BOTH parties are actively abetting the Fed-Wall Street collusion in ripping off taxpayers to subsidize the TBTF banks reckless speculation.”
We find ourselves in a corrupt system. The fact that financial reform did pass and that we may actually deal with Fannie/Freddie does give a glimmer of hope.
Still, the Supreme Court declared corporations as people. They therefore have a right-of-free-expression in elections. How this works is beyond me, but there it is.
So, how exactly do we get those filthy rich financial corporations back to size so they don’t unduly influence the lawmaking and regulation to the point of a disaster? The solution to this will reside in the Board of Directors and the Shareholders.
Perhaps a long prison sentence or two in a nice Club Fed? Hmm, I have one better! A nice stretch on “The Farm” down here in Louisiana. Note: The Farm is Angola Penitentiary. There they will be presented with a short handled hoe and several long rows of vegetables to keep them entertained during their visit
If and until you hold the BODs responsible for the governance of their respective corporations, there will be no forward progress. It is the BOD and compensation committees who are allowing all of this money to go to these “indispensable Super Geniuses.”
You them! They are the ones who have provided the means to increase our standard of living. The Super Geniuses were well paid to do it! ‘Specially during that Banner Year of 2008!
Roidy
Roidy
Roidy
What about lawyers?
Comment from arcticle in todays PB Post
Foreclosure vs. short sale -the pros and cons
Your article does not discuss one alternative which is actual foreclosure defense. You are assuming the lender has legal standing to execute the foreclosure or even has the legal standing to negotiate the short sale. In nearly half the cases we have investigated in the past two years, the trustee or the entity claiming ownership of the note and mortgage does not have that right under Florida law. We have proven in many cases the note is not in the mortgage pool they claim it is.
MFI-Miami
8:42 AM, 7/24/2010
Having A Vacation Home is No Vacation: If It Causes Stress, Is It Really a Vacation Home?
NYT
By PAUL SULLIVAN
Published: July 23, 2010
EVERYONE needs a place to live, but no one needs a second home. So choosing which vacation home to buy and where should be enjoyable. Still, people routinely buy second homes that end up being less than they expected, or worse.
I speak from experience here. My wife and I own a condominium in Naples, Fla. One of our neighbors is as bad as neighbors come. In Florida real estate parlance, he is a “condo commando” — a busybody who questions other residents on what they are doing and then routinely complains to the condo’s board about them.
Bad neighbors abound everywhere, but they seem particularly bothersome when they are in places where you go to relax. Shouldn’t everyone just be grateful to be sitting in the sun or at fireside near the ski slopes?
The dynamics of second homeownership often conspire against this, said Milton F. Pedraza, chief executive of the Luxury Institute, an organization that does research on wealthy consumers. “People become slaves to their homes. They buy into the headlines and that makes them pretty miserable with their vacation homes.”
Mr. Pedraza said one common cause of second-home misery was that owners failed to factor in how much time and money were needed to maintain a place from hundreds, if not thousands, of miles away.
Very good points!
“Shouldn’t everyone just be grateful to be sitting in the sun or at fireside near the ski slopes?”
Having lived in a few different tourist towns I think its fair to say that many of the 2nd home owners forget that a lot of their neighbors are year rounders, are living in their primary home, and have very different ideas about what they’re going to do with that property. Conflicts sometimes ensue!
Vacation homes should be homes that are used for….drum roll please….vacations. If you buy a second home as an investment, then yes it will be headaches. If you buy it to use as a vacation home and maybe rent it out occasionally, it’s headache free for the most part.
As for vacation condos….same as any other condo. Stay away from them, whether to live in, to vacation in or to rent out as an investment property. Condos are like airlines. Impossible to make a profit with.
The problem is you have to rent it out when you are not at that vacation home to make it worthwhile. And the most profitable time to rent it out is the high season when you want to use it yourself!
This is why it’s better to just stay in a five star hotel when you want to to on vacation. And maybe you will get tired of the same spot and want to vacation elsewhere next year. I know an old man at work who spent a week in Flagstaff. He’s used to near sea level altitudes. He said he enjoyed the dry cool air but had a rough time at that altitude.
My idea is to live in Phoenix most of the year and spend summers where it’s cool. If I get to the point where I could not stand high altitudes, I will simply vacation along the Pacific coast instead! Lots of choices and can never get bored by going to different places each year.
I’m amazed I agree with you guys but stranger things have happened.
“Vacation” ‘homes’. The mere concept falls flat much like the Bed & Breakfast business model.
Condos are like airlines. Impossible to make a profit with ??
Wrong again Eddie….
Right, as long as you disregard the loss of your original “equity” it is possible to make a condo investment cash flow positive.
“One of our neighbors is as bad as neighbors come. In Florida real estate parlance, he is a “condo commando” — a busybody who questions other residents on what they are doing and then routinely complains to the condo’s board about them.”
Unfortunately, Florida is a hotbed of these types. We have two of them in the little association where I’m renting. The first year renting here was quiet and pleasant, then some new resident hosed the other residents into thinking they needed a “manager” and naturally he has lots of experience as a property manager. He also has lots of experience as an a-hole. Doesn’t like me much because I came back at him when he was exceptionally rude, so tried to stir up some trouble between me and my landlord, who is a great guy and has the “manager’s” number. The guy has cost the residents plenty with all his useless “improvements” that of course he will now have to maintain.
I’ll be moving on when the lease is up. Why have to deal with one of these types when you don’t have to? Moving’s always a PITA, but I’m not that attached to this place.
We just got rid of an HOA board member who was not only an a-hole, but was trying to sell us down the river to the tax district while profiting his wife at the same time!
Given carrying costs, overly optimistic expectations, staleness over time, and conflicting and busy schedules, in most circumstances, spending two weeks per year traveling to different places around the World would be a more rewarding and memorable experience. The only major exception I see is if you are retired and actually plan to spend more than 3 months at the other place.
I agree, Natalie.
And thank you, cougar91 for elevating the discourse today.
I have a BIL that bought a second home on the inter-coastal waterway on our S.C. coast about 10 years ago for $750,000.00. It has been eating them alive in maintenance, taxes & Ins. The coast is hard on house’s, anyway he’s been trying to sell it for over a year now, for what he paid…No takers so far.
P.S. They use it about 3-4 weeks a year, spend the rest for the time chasing money to pay for it.
It sounds dreamy. Maybe I will give him a call. Hmmmmm. On second thought, probably not.
That’s a pretty expensive 3-4 weeks per year.
It sure as hell is! Wow! This is what my father told me years ago. You leave it vacant eleven months of the year and it’s worse than buying a new car every three years.
They use it about 3-4 weeks a year, spend the rest for the time chasing money to pay for it ??
There is a solution to this if structured properly….I along with a group of 11 other people are actively looking for a Beach House…They are very expensive…Something big enough and on the water is going to run 1.5 or so…We are going to form a LLC when we buy it to have very strict controls on ownership, take 3 weeks each and rent the place out in prime time for the other 16 weeks….
Okay, so which couple gets to use it the month of February? And I can imagine how much fun it will be to get everyone to kick in the amount needed for taxes, insurance and maintenance each year. That’s AFTER the ugly arguments and disagreements about how big a payment is actually necessary.
We have a friend who lives with two other property owners along a common, private driveway. She and one other owner ended up paying for its resurfacing, after giving up on trying to get owner #3 to kick in his share.
Sounds like a timeshare.
If it works for you great, but I could never get the math to work. I prefer to stay in hotel, and have someone else clean the room for me every day. If the roof leaks or you end up with crappy neighbors, you pick up and go.
Lets say you want to stay, oh, I don’t know, in Vienna for three weeks at a nice hotel, maybe $500/night that’s about $12,000 for the trip including airfare. How much is a vacation home? And it costs zero if you decide not to use the room.
Okay, so which couple gets to use it the month of February ?
Have you ever seen Capitola Ca, in Feb. ??
how much fun it will be to get everyone to kick in the amount needed for taxes, insurance and maintenance each year ??
What part of the 16 weeks per year in prime time rental did you miss out of my post ??
That’s AFTER the ugly arguments and disagreements about how big a payment is actually necessary ??
No payments & no arguments…
The house is paid down 60% and the revenue from the 16 weeks rental cover far more than the obligations…As far as the “arguments” what part of the “LLC” ownership agreement did you not understand ??
Lets say you want to stay, oh, I don’t know, in Vienna for three weeks at a nice hotel ??
Thats assuming you have booked that room in advance each year…With our case, we do not need to worry about “booking” or flights, or vacations schedules etc…You have it 3 weeks per year and they are random weeks…and its a 1 hour drive…
Finally, we own it…Kids, grandkids, great grandkids, great great grandkids, all get to enjoy…Kind of a no brainier if you can put the deal together…
SC Dave, in 2006 I changed my work location from the South Bay to Phoenix. I still visited LA from time to time during those days I worked in Phoenix and simply booked a room at an ocean view hotel for the weekend. Walking (staggering) distance to the pubs on the pier. I would visit my buddy and we’d have a couple of beers in mid-afternoon at one of the pubs and gab and ogle the “wimmin” - those were the days. And I’d walk back (not really stagger back). Quite a nice relief from the Phoenix temps. One time the same hotel put me in its best suite. That was memorable.
LA South Bay is great. But I worry about the idea of paying $140,000 for an eleventh or so interest in a beachside house that I would use for three weeks. A Hawaii timeshare costs you $25,000 for a one bedroom for one week - if you paid for it in 2007. Probably much like $18,000 now. So for $54,000 you can have 3 weeks per year in a much better place - Hawaii. Yeah I forgot you will get 1/11th income from 16 weeks renting it out. I don’t know ’bout that. But I think it’s breakeven.
My timeshare I have has twenty five different places in Canada, Hawaii, and Mexico where I can use the week in a one bedroom. But yeah I would never get sick and tired of a bikini view place in Hermosa Beach.
Good God….$750k 10 years ago? WTF is it? 10 Downing Street replica?
No it’s 3-1/2 acres sitting on the waterway with a never to be obstructed view of Bulls Bay a protected area, with direct ocean access on deep water. Beautiful secluded place, the adjacent property sold for 1.1 million two years ago.
Holy moly, your BIL isn’t too bright.
No he’s not dumb, bought the place 100% cash, just thought more family would want to use it, and possible rental at times. It is in a fairly remote area so it’s sort of out of site out of mind. Most people want to be closer to the attractions.
$750 K cash in SC what does he do ? a lawyer for columbian drug dealers?
Don’t get mad I knew of a law firm in Charleston who’s 5 partners all drove rolls royces….and that’s who they defended.
A good friend and his wife drove up to Donner Lake today to clear their possessions out of a cabin that they’ve owned with two other couples for the past 15 years. I was amazed at how they made it work. The three couples bought it together and established a fund that they used for maintenance. The relationship was very amicable. He’ll be bought out in cash by a new couple. He and his kids are avid skiers and they really enjoyed the place, but now they’re moving on.
Without insane appreciation, a vacation home is going to do nothing but eat you alive.
If you buy a 250K vacation home, you have to figure about 2500/mo in upkeep. That’s about 30K/yr, and; that’s only assuming that nothing really goes wrong. Call it 40K/yr if you average out the good and bad years.
Anyway, 30-40K/yr to use a house for 1-4 weeks? That works out somewhere between 7500 (best case) and 40K/wk (worst case).
Ugh… Does anyone else see how insane that is? 7500/wk will rent you a house (perhaps a mansion) anyone on earth you could possibly ever want to go… And, no hassles, no worries.
Worst case, 40K/wk will rent you a house ocean front in the Hamptons or Palm Beach.
And this is the math for a 250K house; imagine 500-1M dollar houses! Ouch!
Unless you can really spend (and want to spend) 12+ weeks a year in a vacation home, it’s not going to even come close to making sense. And, even then, sometimes it won’t pan out… Snowbirding to FL is a perfect example, if you want to spend the winter (4-5 months) in FL, you’d have to be a mental deficient to buy a house. The carrying costs (especially taxes; being uncapped in FL is akin to sending a blank check to the government) will eat you alive. And you can rent a nice condo/house all over FL for pretty much any possible budget. I have friends that rent a nice house (2000 sq/ft, 2 miles from beach, gated/very nice community) for 3 months a year; 3K a month (furnished).
How on earth can you make owning that same house (figure 250K) pan out?
It’s funny, you remove stupid price inflation from the mix, and suddenly; things that seemed to make sense just a few years ago.. Suddenly… No longer do!
It only makes sense to me if you live close enough to spend most of your weekends there. For an Idaho example, you could live near your job in Boise and have a small place on the lake at McCall for the weekends. It’s about a 2.5 hour drive there. You could boat on the lake in the summer and ski at Brundage in the winter.
But you can’t “weekend” at a place that’s a long airplane trip away.
Only way you might survive this kind of deal is to buy cheap. My place cost 85K ten years ago, a small, isolated house with 17 acres, straight up and down behind it … it has problems, and would need 5K worth of fixing up, probably, to make it rentable to all but serious outdoors types. But I go up there to get away from anal NYC types, so don’t mind not renting to them. Bubble made it possible to pay it off, so carrying costs are low. Actually vacationing up there some this year. No regrets, I guess.
Twelve weeks in Baja California (in the days 20 years ago before times got really desperate) could be done for far under $1,000. I think it’s still possible. I love Mexico and am hoping things change in my lifetime down there so that it’s safe to go.
I knew of an unemployed engineering consultant who bided his time in Thailand for several months in the previous recession. He’d pop in on message boards from time to time and asked CJHunter to put him on the “hot sheet” again. No offers so he’s going to spend another several weeks there.
I’ve done the vacation rental thing. I’ll take that or a hotel long before I would ever consider buying a vacation home.
US bank failures this year surpass milestone of 100; regulators shut 7 banks to make 103
WASHINGTON (AP) — U.S. bank failures this year have surpassed a bleak milestone of 100 as regulators shut down banks in Georgia, Florida, South Carolina, Kansas, Nevada, Minnesota and Oregon.
The seven bank seizures announced Friday bring to 103 the failures so far in 2010. The pace of bank closures this year is well ahead of that of 2009, which saw a total of 140 banks shuttered amid the recession and mounting loan defaults. That was the highest annual tally since 1992, at the height of the savings and loan crisis.
The pace has accelerated as banks’ losses mount on loans made for commercial property and development. Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans. That has brought delinquent loan payments and defaults by commercial developers.
The Federal Deposit Insurance Corp. said it took over Crescent Bank and Trust Co., based in Jasper, Ga., with about $1 billion in assets; Sterling Bank of Lantana, Fla., with $407.9 million in assets; Williamsburg First National Bank of Kingstree, S.C., $139.3 million in assets; Thunder Bank of Sylvan Grove, Kan., $32.6 million; SouthwestUSA Bank, with one branch in Las Vegas, $214 million; Community Security Bank of New Prague, Minn., $108 million; and Home Valley Bank of Cave Junction, Ore., $251.8 million.
100 you say through 7 months of 2010. Wow. That’s unprecedented. Historical. A tsunami of bank failures of biblical proportions.
Except it’s not.
In 1989 there were over 500 banks that went under. Every year from 1987 to 1991 there were 200+ failures. And every single year between 1982 and 1992 there were 100+ bank failures a year.
There are 8000 banks in the country. 1.25% of them have gone under this year. Nothing to get worked up about.
Eddie,
I wouldn’t be so dismissive.
The 1987 to 1991 period was the Savings and Loan crisis of speculative banking. 200 per year was only for 4 years. we got the Resolution Trust corp. to settle all the bad loans with the Feds
1982 to 1992 is ten years.
In both cases, i believe there were more banks. Since then, there have been a lot of mergers, making less banks with more money in each bank.
The number of failures have been escalating since the 2008 banking crises. It’s only JULY and there’s already over 100. Will it be 200 before the year is out? Will this go one for 10 years?
Only 100 per year for ten years is 1000. 1000/8000 is about 12%.
That’s a lot. What effect will it have on Mainstreet??
The TBTF brokerages got their payout. What will the small time banks get? I think it’s bad, and worse than we are being led to believe.
Also remember that the “mark to fantasy” rule is keeping the failed bank list artificially low.
Terrifically so.
Don’t forget about TARP.
Disney gives sneak peek of new Hawaii resort
Aloha, Mickey: Disney gives sneak peek of new Hawaiian resort ‘Aulani’
KAPOLEI, Hawaii (AP) — More than 80 years after Mickey Mouse piloted “Steamboat Willie” and whistled his way into the hearts of children across the world, he has finally reached the shores of Hawaii.
The Walt Disney Co. on Friday gave a peek of its sprawling, beachside Hawaiian resort that is under construction and scheduled to open next year.
“Aulani” is Disney’s first major standalone resort away from a theme park and could serve as a model for future projects as the company diversifies and expands its vacation offerings.
“This is a very special project for us,” said Tom Staggs, chairman of Walt Disney Parks and Resorts. “It’s unlike anything that Disney has done before; at the same time, it’s very like many of the things we do.”
Aulani will have 359 hotel rooms, 481 time-share units, restaurants, a convention center, a 15,000-square-foot spa and a massive water play area that includes a volcano tube slide and snorkel lagoon.
But no bar, adult movies or string bikinis.
Pass.
We’re gonna need a bigger check book….
“The Federal Home Loan Banks, or FHLBs, may be the biggest financial players you’ve never heard of. Collectively, they hold $1.3 trillion in assets and are the largest U.S. borrower after the federal government.”
Standard & Poor’s Ratings Services lowered its ratings outlook on the Federal Home Loan Bank of Seattle to negative on the lack of approval for its plan to raise capital.
FHLB-Seattle is among the smallest of the 12 district banks in the FHLB system, with $51.8 billion in assets as of March 31.
Mortgage securities and other investments boosted profits at the federal home loan banks, but last year they recorded a combined $2.43 billion of charges on private-label mortgage securities, ones that aren’t backed by any government entity.
However, S&P said the government is likely to bail out the bank, if needed. because of the importance of the FHLB system to the U.S. housing market
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
~John Maynard Keynes, 1920
This is what so few people understand. That the governments policies of cheap debt and inflation, keep them on a tried mill until they die. I think this is why so many fell for Obama’s promise of giveaway’s. So many are just not able to make as inflation of the cost of living eroded our standard of living. We used to actually own things, now we have debts and are allowed to use the collateral, as long debts payments are kept up.
But I thought if I voted for the Messiah ““I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage”
Hmm…
Well if you lose your house to foreclosure and use public transportation, you won’t!
I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage”
Now Bill,
That was not what the lady meant and I’m certain you know it. Her quote was in the context of her thinking Obama was going to improve the economy, not that he was going to give her free stuff.
If after someone gets a job, they say “Wow now I don’t have to worry about buying Gentleman Jack anymore”, would you think they meant they thought their boss was going to buy them free whiskey?
I’m sure you don’t take the Bible literally either.
“That was not what the lady meant and I’m certain you know it”.
BS! That is exactly what she meant, and you know it. Now where’s my “free” stuff?
BS! That is exactly what she meant, and you know it. Now where’s my “free” stuff?
No it isn’t. Sorry to burst so many’s warped fantasy.
http://www.halfhill.com/inflation.html
For those of you haven’t seen this yet.
A real eye opener. As an example, if you were making 12k in 1981, you now have to make 31k just to equal the same purchasing power.
For those of you who weren’t old enough to be working in 1981, 12k was a good living. Not great, but you could live in a nice apt, furnish it, and drive a new, although not top of the line, car and still save money.
The mortgate payment on my parents house in suburban Houston was $298.00 in 1981. I think one could live on 12k back then with no other debt. I am sure the AC bills were high in the summer though.
“As sociologist and economist Franz Oppenheimer noted in his book, The State, there are two forms of sustenance: first, through one’s honest productive activity and voluntary exchange with others, (the economic means); and second, through theft and violence, the force and coercion of the State (the political means). For that is what politics is: the aggression of the State, which is why the State’s actions can never be principled.”
< Oppenheimer made this point in 1909. I have never heard anyone refute it, to any logical degree.
Some Tea Party supporters get it, but the concept flies like a lead balloon in the minds of the majority wedded to the proposition that politics is the end-all and be-all for the salvation of humanity.
Scott Lazarowitz believes the way for Americans to save our freedom is not through politics, but through principle – being uncompromising advocates of the sanctity of private property, freedom of association and individual rights.
I doubt Americans are ready to abandon politics for principle.
“For that is what politics is: the aggression of the State, which is why the State’s actions can never be principled.”
hows ’bout 1863 for x1 example:
Terminating Southern Slavery = un-principal action by the Northern States
“I have never heard anyone refute it, to any logical degree.”
hows ’bout 1963 fors x1 more example:
Terminating “separate but equal” in the South = un-principal action by the Federal Gov’t
Beginning in 1956, Clyde Kennard, a black Korean War veteran, attempted to enroll at Mississippi Southern College (now the University of Southern Mississippi) at Hattiesburg. Dr. William David McCain, the college president made major efforts to prevent this by going to local black leaders and the segregationist state political establishment.
As a result, Kennard was twice arrested on trumped-up criminal charges and eventually sentenced to seven years in the state prison
After three years at hard labor, Kennard was paroled by an embarrassed Mississippi Governor Ross Barnett when it became known that Kennard’s treatment for colon cancer had been grossly mishandled
Dr. William David McCain:
“We insist that educationally and socially, we maintain a segregated society. … In all fairness, I admit that we are not encouraging Negro voting,” he said. “The Negroes prefer that control of the government remain in the white man’s hands.”
Although President Kennedy had proposed civil rights legislation and it had support from Northern Congressmen, Southern Senators blocked consideration of the bill by threatening filibusters. After considerable parliamentary maneuvering and 54 days of filibuster on the floor of the United States Senate, President Johnson got a bill through the Congress. On July 2, 1964, President Johnson signed the Civil Rights Act of 1964[1], that banned discrimination based on “race, color, religion, or national origin” in employment practices and public accommodations. The bill authorized the Attorney General to file lawsuits to enforce the new law. The law also nullified state and local laws which required such discrimination.
They keep returning to their “Tried & True ” ways:
“TrueDoNothing™ / “TrueObstructionists™ / TrueGridLokers™”
Looks like you left some out some information according to Wikipedia. I think racism crossed party lines back then as it does today.
“The bill was reported out of the (House) Judiciary Committee in November 1963, and referred to the Rules Committee, whose chairman, Howard W. Smith, a Democrat and avid segregationist from Virginia, indicated his intention to keep the bill bottled up indefinitely.”
“The bill came before the full Senate for debate on March 30, 1964 and the “Southern Bloc” of 18 southern Democratic Senators and one Republican Senator led by Richard Russell (D-GA) launched a filibuster to prevent its passage.”
18 southern Democratic Senators
1963 = DINO…Democrapt In Name Only
The democracy will cease to exist when you take away from those
who are willing to work and give to those who would not.
You just described early retirement.
Ummm, I plan to retire early and focus on things other than law with money I earned working 60 hours a week for decades after spending 5 years in graduate school while others were partying and/or having babies. No one gave me a free ride.
Natalie, I hope you don’t have siblings who have been materialists all their career and have a lot of junk but no savings. If so, don’t ever tell them your net worth. If you buy something you value (a nice car maybe, rare coins maybe), hide it from them. This is what I do. Although I only have a cheap car
“partying and/or having babies”
It seems odd to me to equate having a family with a life of partying on the contemptability meter. So you’ll be old, alone, head filled with memories only of work, but rich? If done in moderation, you should at least be able to get away with an “or” and still be fiscally responsible, so long as you maintain the strong work ethic.
It seems odd to me to equate having a family with a life of partying on the contemptability meter. So you’ll be old, alone, head filled with memories only of work, but rich? If done in moderation, you should at least be able to get away with an “or” and still be fiscally responsible, so long as you maintain the strong work ethic.
Hey?? You sound kinda Brazilian. They laugh at Americans living to work. Or at least they shake their heads with a confused look on their face when they think about it.
Whatever happened to work hard, play hard? Nothing wrong with having balance in life.
The financially savvy few of the boomers who did refused to live beyond their means (i.e. use credit) realized there is a trade-off between being financially successful, healthy, and having families. For well over 99.99% of us, you cannot have all three. You have to choose only two out of three. Only the ones born with a gold spoon in their mouths (Billy Madison types?) are lucky to be able to have all three.
So don’t knock us, there are far more boomers who have no children than you think!
vareize,
The ones who followed the advice “work hard play hard” die earlier. They don’t get enough sleep or exercise. Ever hear that we are currently in a recession with above 9.3% official unemployment? People who are still employed are far more serious about their jobs and far less apt to play these days.
Up until last month I had all three. I just had my first round of chemotherapy last week, and I’m starting to feel better today. But I’m so grateful for the help and love I’m receiving from my husband and kids. I don’t think getting breast cancer is related to hard work, and I don’t think I’ll die early anyway - the treatment is very effective!
I’m glad that the treatment is very effective. Here’s hoping you get back to your 100% self.
“The democracy will cease to exist when you take away from those
who are willing to work for themselves and make them work for the plantation for free.” Uncle Remus
You just described today’s current mobocracy.
The democracy will cease to exist when you take away from those
who are willing to work and give to those who would not.
Like taking taxpayer money to bail out the rich?
The democracy will cease to exist when you take away from those
who are willing to work and give to those who would not.
Yep, This is exactly what we’ve done. We’ve taken money away from people who worked and saved and handed it to skimmers, wealth strippers, thieves ie Wall Street and management and of course politicians.
Private property and individual rights is meaningless to those who depend on govt for their existence. The % of people who depend on govt for their existence is increasing exponentially. 47% of Americans paid $0 income tax last year. Obama’s approval rating is at 44-47%. This cannot be a coincidence.
Every action the Democrats take is to make more people dependent on govt and have less incentive to participate in the free market.
- govt run health care
- never ending unemployment checks, now up to 99 weeks
- lifetime employment through nationalization of Chrysler and GM
“47% of Americans paid $0 income tax last year.”
I love the twist of numbers. “47% of Americans” sounds impressive, but just how many of these “Americans” were children?
Measured by intellectual capacity, all of them.
“I love the twist of numbers. “47% of Americans” sounds impressive, but just how many of these “Americans” were children?”
47% of Americans who filed an income tax return had a tax liability of $0 (or less given EITC). I don’t know too many 6 year olds filing a 1040 do you?
If you want to go down this path fine…
There are approximately 140 million adults who work. 53% of those filed taxes and had a liability of $0 or more. Which means about 74 million people paid taxes. There are 310 million Americans. 74 out of 310 is 24%.
Which means 24% of all Americans - kids, adults, whatever - paid any federal income tax.
Happy now?
“but just how many of these “Americans” were children?”
How many of these children have “households”?
WASHINGTON — Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it’s simply somebody else’s problem.
About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization.
Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it’s still almost always better to file: That’s the only way to get a refund of all the income taxes withheld by employers.
In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.
Thanks for the clarification Jeff. The term “U.S. housholds” has a wee bit different definition than the all-encompassing term “Americans”.
It`s rare when I get something right.
I filed a 1040 last year and paid $0. I’ve paid as high as $50K a year in some years. With the damned government’s ZIRP policy, my income shrank to the point I’ve been living off the principal of my savings. Paying for my own medical coverage it’s not tough to end up owing $0 to the IRS.
I’d be happy to work a deal with the feds….put the fed funds rate back to 5% where it belongs and I’ll happily pay some federal income tax.
“It’s rare when I get something right.”
Lol. You don’t have to be right all the time, just at the right time.
” You don’t have to be right all the time, just at the right time.”
I`m gonna use that. Thanks
You don’t have to be right all the time, just at the right time ??
Great timing can make anyone look real smart…
“Great timing can make anyone look real smart…”
Studebaker trucks weren’t that much worse than others in they’re day…
Ford / Nov 2008
47% of Americans paid $0 income tax last year.
Yea yea we know the AM radio rant.
But what they never tell ya is that those 47% pay a higher rate of total tax than the super rich and many of the regular rich.
State tax, Local tax, Sales tax, property tax, utilities tax, payroll tax, medicare tax, phone tax, vehicle tax, Being poor tax,
Bunch o’ Bums huh?
So Sammy, the guy making $50,000 a year with three kids and a wife who doesn’t work to take care of said kids and doesn’t pay any taxes because of various deductions has the intellect of a child?
That’s just plain rude and shows you are the one who is the mental midget.
Is it fair that I have to pull this guy’s weight? Does he not drive on the same highways that I do? And when he discovers that he can vote himself benefits that someone else has to pay for you, what do you think he’s going to do?
The only people who should get the vote are those who pay more into the system in taxes than they take out in entitlements. Period. We’d have a vastly better political class and a sharp reduction in government-encouraged freeloading.
RyoInBrazil,
You can provide all the linsk you wants. The facts are the facts. 47% of tax returns had a liability of $0.
Whetehr or not somebody pays gas tax or sales tax is irrelevant.
Last year I paid close to $55K in federal tax. I paid $13K in SS tax. Another I paid another $8K in GA state income tax. And on top of that I also paid all the other taxes you mentioned. Yet people like you cling to this notion that somehow I’m not paying my fair share. You are beyond ridiculous.
It’s not that much weight to pull. By procreating, he is making a significant contribution to the FUTURE of this country. A small tax break for raising kids is not an “entitlement”.
Eddie
You’re in the F’d upper middle class. The elite don’t pay taxes and of course the poor with no money don’t pay federal taxes, but Rio is right if you look at total effective tax rate many of those people you claim are paying taxes are paying a higher rate than you. You are certainly paying a higher rate than the CEO’s Hedge Fund managers and Wall Street Titans.
I really get to you huh Eddie?
http://www.dailyfinance.com/story/are-the-rich-getting-richer-the-data-says-yes/19356546/
Eddie, I think that fewer are paying income tax because they truly can’t afford it and both parties realize that. The past forty years have disproportionately benefited the wealthy (including myself.) I don’t think that taxing the lower half will make them richer!
Yeah but Tea Party supporters are just a bunch of “teabagging racists”, so they don’t count!
“State tax, Local tax, Sales tax, property tax, utilities tax, payroll tax, medicare tax, phone tax, vehicle tax, Being poor tax”
If their income is low enough they don’t pay state or local income taxes either. But thankfully they do pay at least some taxes.
Even if they’re renters, they pay property tax. The landlord factors that in when he sets the rental rate. But I once worked with an engineer who boasted how, as a renter, he didn’t have to pay any property tax. Not the sharpest knife in the drawer.
I don’t any mention of corporate and business theft.
Therefore his thesis is incomplete.
Federal budget deficit to exceed $1.4 trillion in 2010 and 2011
The federal budget deficit, which hit a record $1.4 trillion last year, will exceed that figure this year and again in 2011, the White House predicted Friday, providing fresh ammunition to Republicans who are hammering President Obama for all the red ink as they campaign to regain control of Congress in November.
What is $1.4 trillion dollars worth?
-28 times Bill Gates’ net worth
-36,750,000 Chevy Volt electric cars at the estimated price of 40,000 dollars.
-43,625,356 years of tuition at Harvard.
-133,043,714 First class tickets from Washington, D.C., to the Maldives and back.
-7,386,934,673 of Apple’s 16MB version of the iPhone4.
-402,739,726,027 tall Starbucks Chocolate Frappuccinos.
“What is $1.4 trillion dollars worth?”
A lot of private CORPORATION “bidness” work crated & labeled:
Iran & North Korea
“-36,750,000 Chevy Volt electric cars at the estimated price of 40,000 dollars.”
Could I get a subprime loan for 36 million Chevy Volts?
General Motors Agrees to Buy Subprime Lender AmeriCredit for $3.5 Billion
By Bill Koenig - Jul 22, 2010
I could give one to almost every household that didn`t have to pay federal income tax last year.
“What is $1.4 trillion dollars worth?”
In Zimbabwe $1.4 trillion dollars will maybe buy you a decent loaf of bread. Bernanke and Timmy dig this.
“$1.4 trillion”
That’s gonna leave a mark!
Geithner: Taxes on Wealthiest to Rise
The Obama administration will allow tax cuts for the wealthiest Americans to expire on schedule, Treasury Secretary Timothy Geithner said Thursday, setting up a clash with Republicans and a small but vocal group of Democrats who want to delay the looming tax increases
Mr. Geithner said the White House would allow taxes on top earners to increase in 2011 as part of an effort to bring down the U.S. budget deficit. He said the White House plans to extend expiring tax cuts for middle- and lower-income Americans, and expects to undertake a broader revision of the tax code next year.
“We believe it is appropriate to let those tax cuts that go to the most fortunate expire,” Mr. Geithner said at a breakfast with reporters.
————————-
Um, yeah. Then the insatiable Republicrat tax sucking machine keeps redefining “the wealthiest Americans” until it include any productive, taxpaying citizen not enrolled in a Democrat or Republican votes-for-entitlements scheme.
I could be wrong but wouldn’t you think this inevitable tax on the wealthy people add to the list of factors pulling the prices of houses down?
My annual income is slightly below the Bammy radar (after my catchup 401k deduction) but could be more since I will be declared an overcompensated employee this year. My investment income is mostly tax sheltered in tax deferred plans and municipal bonds. So I am watching this tax sunset issue carefully.
I’ve converted part of my IRAs to Roth’s early this year and will convert a huge amount after November to Roth’s. This will put me above the $250,000 income in 2010. Probably more like $400,000. With the tax sunset I certainly will not spread the conversion to Roth over two years. I will have about $175,000 income in 2011, well under the radar of Bammy.
Timmy makes his own tax cuts.
You will notice that neither party seem inclined to get rid of the loop holes that allow Hedge Fund Managers to pay effective tax rates of 15-16%.
Mr. Geithner said the White House would allow taxes on top earners to increase in 2011 as part of an effort to bring down the U.S. budget deficit. He said the White House plans to extend expiring tax cuts for middle- and lower-income Americans, and expects to undertake a broader revision of the tax code next year
Isn’t it Congress that makes this decision, not the executive branch?
He works in Bell (SE LA), but he lives in “The OC”
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Check out Ratso Rizzo’s Mug. (talk about dress for success!)
$800k Bell city manager had OC DUI:
July 23rd, 2010, by Chris Knap, Editor, Government, Politics and Investigations
OC Register:
Now our colleagues at the Los Angeles Times, who discovered that outrage and have been peering closely under the hood at Bell, report that Rizzo, a Huntington Beach resident, was arrested for DUI in his home city March 6 with a blood-alcohol level of 0.28, more than three times the legal limit.
Rizzo was also pulled over by the police six days after his DUI arrest for driving while using a cell phone, according to court records.
All three of Bell’s top administrators resigned last night in a closed session of the city council, but it’s not really much of a punishment. The Times reports that Rizzo and Adams, at least, are lined up to collect half-million dollar pensions from the state Public Employees Retirement System.
http://taxdollars.ocregister.com/2010/07/23/800k-city-manager-had-oc-dui/61381/
This kind of 3rd World kleptocracy is going to be the norm going forward, as the kleptocrats use patronage and graft to secure votes, and the criminal justice system and various “enforcement” agencies focus on protecting the status quo, rather than protecting the innocent and punishing the guilty.
See Hwy thinks that “TrueAnger™” PeeParty tea toadlers really ought to start at the “grass-roots” LOCAL level, where they can have a “TrueEffect™” utilizing: “TrueRecall™” that doesn’t split into Red/Blue derision…it could be based solely on LOCAL “economics”, for example they could start this way:
“TrueAnger™”: “How much do you make in salary for this poor low income city of 37,000″?
Answer: “$879,000″ + benefits + city car + pension & if that’s a number you choke on, remember I could get paid more in the private sector!”
“TrueAnger™” crowd (murmurng): “Put ‘em, on the recall list”
Starting your “TrueAnger™” revolt aimed at the top echelon seems rather cumbersome… like try to win a Tri-Athelon doing everything bass-ackwards. Besides, think of how much “Recall-Death” by a thousand cuts would look to those peering down from the granite halls of taxpayer built palaces of Gov’t “bidness” inside the diamond studded beltway!
Hwy
Sometimes I read your stuff and I think you are nuts!
Then other times I read your stuff and I am convinced you are nuts!
This kind of 3rd World kleptocracy is going to be the norm going forward,
Huh? This has been the norm since the dawn of time.
This ignorant knife catcher decided to sell her XHB on Friday after deciding an over 8% gain in less than two weeks was an acceptable return for investing in homebuilders. As for my LVS, I sold it at a 20% gain in less than a month. The game continues. Life without fear. I am not buying at these levels, but if they S&P stays above 1100 on Monday, I expect it will make a fast run to 1200, and along the way I will sell some additional holdings.
In a thread yesterday, some critter (Eddie is it?) expressed doubt about $2k/month taxes in Syracuse area for 825k house.
A listing in our area for sense of scale:
6105 Wolfeboro Rd
Dewitt, NY 13078 ” asking 799k. Taxes 22,439
Sorry if my guesstimate was off by a couple thou/yr
5027 Brittany Ln
Onondaga, NY 13215 Taxes $24498
And so forth…
On a 250-300k salary with mortgage and tax on that 825k house again around $6300/month + utilities (maybe $600/month average on that 4500k sqft house), not to mention maintenance, it seems shame when earning so nicely to blow half or more of salary on that monster house.
I reiterate:
Wow, more than half the monthly income for a “rich” man (250-300k salary) gone just for the house.
Stupid.
My $1000/month rent works out about right on my $325k/yr evil doc salary. And my superb, clean as whistle, loaded to bear leather 250hp Honda Accord Coupe 2004, long paid off. Yeah, i eat out every day before work at hospital, so, well, $1000/month on food.
Hmmm, my housing, car and food budget $2000/month.
But, yeah, I guess I could spend $7000/month instead, since I can afford the note.
Sheesh.
How bout this, evil doc:
cnyhomes.com: hbbers can start at the top of the entire inventory, each page shows the tax breakdown. They can then marvel at how heavy a tax burden some people will agree to to keep that “dream home”. Really, I think for some carrying that w/o complaint is a badge of honor, somewhat likened to carrying the mortgage in the first place. It means your successful when price is no object. Manlius & Dewitt contain some of the steepest I’ve seen, some in Onondaga. There was that one megastructure in Camillus.
You know, half the problem with the above is 250k - 300k isn’t rich. It’s purchasing power only gets you to what relatively recently was only upper middle class.
Jeez, and I thought Florida property taxes (for new arrivals) were high. With those kind of property tax rates, I presume New York doesn’t have a state income tax.
I hope you were kidding. New York has a vicious state income tax, which goes up to 7.7% at the top bracket.
KiKiDee: “…accidents happen”
So do SERIOUS lawsuits:
Alarms, detectors disabled so top rig officials could sleep
The Deepwater Horizon’s fire and gas leak alarms were disabled for at least a year to prevent false alarms from waking up rig leaders, a chief engineer told federal investigators.
July 23, 2010|Rong-Gong Lin II, Los Angeles Times Staff Writer
Reporting from Kenner, La — Critical fire and gas leak alarm systems had been disabled for at least a year aboard the Deepwater Horizon because the rig’s leaders didn’t want to wake up to false alarms, a rig chief engineer tech told federal investigators.
“I discovered it was ‘inhibited’ about a year ago,” said Mike Williams, the chief engineer tech who worked for rig owner Transocean aboard the Deepwater Horizon, which erupted in flames April 20, killing 11 men and starting the worst offshore oil spill in U.S. history.
What an apt metaphor for our asleep-at-the-switch regulatory agencies, like the porn connoisseurs at the SEC who saw no evil, heard no evil, and spoke no evil, while the TBTF banks and their allies perpetrated the greatest financial swindle on taxpayers in the history of the Republic. The fraud was aided and abetted by the Goldman Sachs “alumni” who dictate this nation’s fiscal policies, and enabled by their puppets in the House and Senate from BOTH parties.
“You Lie!” Joey Wilson
Crissy Cox was dragged kicking & screaming ’bout fraud from the SEC all the way back to his home in Newport Beach, CA
Our “asleep at the wheel agencies” were gutted during the Bush admin and have been in decline since Raygun’s “private government” policy edict.
Found this interesting 2002 pdf while searching for FHLB salary data:
http://www.gsereport.com/2002/September28-October11.pdf
Not that anyone really bought the Barney Franks of the world “no one saw coming” claim. A few nuggets from the report:
Financial consultant Bert Ely says maintaining Fannie & Freddie’s exemptions from SEC requirements that apply to other
publicly traded companies harms investors and taxpayers
Congress should prohibit Fannie & Freddie from repurchasing their own mortgage-backed securities (MBS), recommends
American Enterprise Institute Resident Fellow Peter Wallison (p. 26)
- It would “reduce taxpayer risks without affecting the mortgage markets”
“The OFHEO Risk-Based Capital (RBC) rule is a seriously flawed test at best and a complete joke at worst,”
Fannie & Freddie agreed to register their common stock with the SEC, but retained their exemption from registering their
debt and MBS with the SEC
I note that it was The Economist who called the subprime collapse in December 2006. Now they are calling for the end of the government sponsored duopoly mortgage securitization twins.
The Economist
America’s housing market
Unnecessary evils
The next big task of financial reform: dismantling Fannie and Freddie
Jul 22nd 2010
DIAGNOSIS is often much simpler than treatment. The failures of Fannie Mae and Freddie Mac, America’s housing-finance giants, are glaringly obvious. The two firms, which own or guarantee more than half of the country’s $10.7 trillion of mortgages, are awash in red ink. The Congressional Budget Office reckoned in August 2009 that the twosome’s cost to taxpayers could go as high as $400 billion. With housing showing renewed weakness, that number may rise.
…
Although everybody agrees on the need to overhaul Fannie and Freddie, nobody is rushing to do much about it. America’s thumping financial-reform bill, which was signed into law by Barack Obama on July 21st, found room in its 2,319 pages to create “Offices of Minority and Women Inclusion” in various federal agencies, but did nothing on Fannie and Freddie. The two were taken into “conservatorship”, a form of government ownership, in 2008 and have been put to work ever since. Virtually the only mortgages investors will buy are those guaranteed by the GSEs and other federal agencies. More than nine in every ten new mortgages written in America during the first quarter of 2010 were government-backed. Policymakers are horrified by this level of intervention and terrified about withdrawing it. The Treasury says it will put out proposals on the future of Fannie and Freddie early next year but there are few signs that politicians are prepared to get rid of them altogether.
…
A long goodbye, but goodbye nonetheless
There is still the fear that investors would flee the market in times of stress if they did not have a federal guarantee, implicit or otherwise. But other changes can sharply reduce that risk. Tighter underwriting standards would ensure that originators of loans remain disciplined: Britain’s plans for a more intrusive mortgage-lending regime provide one source of guidance. Better loan disclosure would help investors in mortgage-backed securities to do their own homework rather than just relying on guarantees. Funding instruments like covered bonds would give investors recourse to banks’ balance-sheets as well as the mortgages themselves in times of crisis.
None of this means it makes sense to get rid of Fannie and Freddie in one go. A gradual withdrawal is needed. The first step is to run off or sell their retained portfolios of mortgages. A second would be to squeeze the definitions of conforming mortgages over time, so that bit by bit Fannie and Freddie lose control of chunks of the prime market. American housing would, unfortunately, still have lots of props—agencies such as the Federal Housing Administration and subsidies like tax relief on mortgage interest. But the GSEs should go.
“A gradual withdrawal is needed. The first step is to run off or sell their retained portfolios of mortgages.”
Sell to whom? GM, maybe?
GM is getting back in the junk loan business, maybe GM can buy the junk loans from Fan and Fred and then we taxpayers can then bail out GM once again.
What’s their slogan: People are smart?
When someone first pointed out the disastrous nature of “everyone doing each others laundry”, who knew it would be the rich?
Because just who the hell are they going to sell those houses to? Certainly not the 50 million people who are unemployed. Nor the next 50 million who are worried about their just-making-ends-meet jobs and haven’t really seen a decent raise in 20 years. They have their own mortgages to worry about.
And DEFINITELY not the retiring boomers who are going to be trying to sell THEIR houses.
So once again, let’s give a big “job well done” (and bonus and raise for their “talent”) to the Master(bators)s of the Universe.
Well done.
Bullion Coin Investing May Cost You
7/23/2010 8:03:07 PM
Bullion coin investing has risen alongside gold’s popularity, catering to a small subset of investors who want physical possession regardless of how much more they may pay. MarketWatch’s Claudia Assis reports.
Of course you should keep your money in the stock market instead of buying those silly gold coins. Look at how much you would have now if you had put $10,000 in each one 10 years ago!
(i apoligize if someone has already posted this…if so does anyone remember the tread?…i would like to go read ya’lls comments)
…but…did ya’ll know economics was hard?
http://www.scribd.com/doc/33654737/Economics-is-Hard
It certainly is when you’re pulling things out of your a** and having to keep track of all the lies and voodoo jargon.
It’s curtains for Malins: Closing after 48 years, the fabric shop that can’t find any staff. ~ UK Mail
For 48 years, staff at Malins Fabrics have provided expert and friendly service to keep their customers satisfied.
Even during the worst recession in its history, the shop in a market town has remained profitable.
But today it is closing down because the owners can’t recruit any staff.
Partner Diane Bayes believes the benefits culture and a poor work ethic are to blame for her having to shut up shop after three years of coping with unfilled job vacancies.
She has put job posters in the window, taken out adverts in a local newspaper and tried recruiting through the JobCentre, but has barely had any applications.
The shop in Selby, North Yorkshire, selling soft furnishings, fabrics and upholstery has remained busy throughout the recent economic slump.
But despite rising unemployment, no one has seemed interested in filling the two or three full-time jobs she was offering at £9 an hour.
For the past nine weeks Mrs Bayes, whose last long-term employee in Selby retired in October, has opened that shop only on Saturdays and has run it herself.
But she said yesterday: ‘I am having to close this place down because we can’t get any staff. I am quite mortified about it.
‘We would have trained the right person up and given them full help and back-up.
‘I am closing tomorrow and have run the stock down, but if the right people came forward now we could think again I suppose.’
Mrs Bayes said she didn’t get a single reply to a local newspaper advertisement and has had only ‘a couple of phone calls’ inquiring about jobs.
She is convinced an easy reliance on the welfare state is to blame.
‘People come and say they are getting handouts and that’s what’s behind this problem,’ she said.
‘People also get offered a good wage for a job and they say, “Can I have cash because I’m claiming”. The few I’ve had, that’s the kind of thing they are saying.
‘I did try the JobCentre but they sent two 17-year-old lads. They had earrings and lots of tattoos.
‘I asked them what they knew about fabrics and they said they knew nothing but they had to come for the interview or they’d get in trouble with the Job Centre.’
Mrs Bayes, 63, began with the family firm as a Saturday girl at 14 and is now co- owner with the Malins family.
Selby has a population of 23,000. In the year to March 2009 the district’s unemployment rate was a below average 5.3 per cent.
“‘People also get offered a good wage for a job and they say, “Can I have cash because I’m claiming”. The few I’ve had, that’s the kind of thing they are saying.”
The disturbing thing there is how bold and open about it people seem to feel they can be. Sometimes social stigmas can be a good thing. A safety net is one thing, but you should be the shame of the neighborhood, afraid to show your face in public, if you make a lifestyle choice out of it.
So she’s blaming everyone else for her failure to pay a decent wage.
Ye…ah.
What do I say?
It’s good to save money in business but you can save yourself right out of business.
When the government steals enough money from the private sector, this is the result.
Maybe it’s time for government workers should take a 50 percent haircut, along with a 50 percent staff reduction.
Bet then that she could raise the amount she is paying workers.
What’s the problem with socialism as Maggie Thatcher said it - that socialism is great until you run out of other people’s money?
Well, there you go.
Maybe the gov’t should raise the unemployment benefits even more, so even more jobs would be unappealing, and even more businesses would close down. Everything would be just fine, since everyone would get enough “money” from the gov’t.
Death of the American Middle Class:
“So why are we witnessing such fundamental changes? Well, the globalism and “free trade” that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn’t tell us that the “global economy” would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.
Here are the statistics to prove it:
http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here%27s-the-stats-to-prove-it“
Linky no worky.
However, I was able to google it and found the article.
This has been ongoing since the 1980s. And the end conclusion is wrong. Once it’s gone, it will NEVER come back.
What the Eddies of the world don’t understand is that their 200+k job isn’t going to save them. Their small business isn’t going to save them.
The only ones who will have wealth going forward will be the overlords and their henchmen. Time to get a job as a politican or Blackwater.
I have been reading this blog for several years. I haven’t been reading it much recently, as work has kept me pretty busy lately, but I had to share a story.
My mom owns a beauty shop that she has ran for over 30 years now. My mom is not a “business woman”, she is a hairdresser who started her own business because it made sense. She has always done all the accounting herself, with the exception of taxes, which someone else does. She is not rich by any means, although at one time her 1200 sq. ft. condo in CA was valued at $500,000+. (I begged her to sell, but she wouldn’t listen.)
So I was talking to her on the phone last night and she told me that she is thinking of selling the shop and going on SS. (She lives for this shop and has never seriously talked about selling it before.) But she has been hearing rumors of all these new law changes and having to 1099 all her suppliers, health care rules etc. and she is worried that she won’t be up to the job of following all these new rules, and that what little profit she makes will end up going to new taxes, etc.
It just makes me wonder how many more small businesses are going to be closing for similar reasons.
Oh, she also told me that all of her customers who voted for Obama, are feeling a bit betrayed and are really angry. November is going to be interesting.
It just makes me wonder how many more small businesses are going to be closing for similar reasons.
Maybe. Or maybe she’s getting a little old and tired. I’ve seen parents get old and tired before.
Well that was the reason I asked her why she was thinking about getting rid of the shop, I was worried she was having problems or not feeling well. But she said that wasn’t it and I believe her because my mom likes being busy and HATES having nothing to do, she will be lost without her shop.
Also, neither her or my dad have a pension of any sort other than a very small 401K that my dad had from a previous employer, they are not in very good shape to retire. And I don’t know how my mom will support her shopping habit on a fixed income.
But why would she “sell on the rumors” and not wait to see what will happen? Isn’t it going to be years from now? And many details in laws change by the time they go into effect. I think there are bills being proposed now to deal with the 1099 thing.
As I said, she is not a “business woman”, I think she doesn’t want to take a chance on getting in trouble for something due to ignorance and end up losing her shop, or being fined. She cannot afford to pay any ridiculous fines, nor can she afford to pay health insurance for the people who work in her shop. (They rent spaces from her and that money goes towards the whole shop rental.) I am not sure how that kind of situation will be affected.
I will tell her to talk to some of her more business oriented customers and see if they can give her some info on these new laws, and maybe her tax person can shed some light on the new tax requirements.
If you think it is odd to have her talk to her customers, some of them have been coming to her since I was a kid and a lot of them are business managers, etc. You would not believe how much advice and help she gets from them. And unfortunately, I am not much help, I work with computers, networks and radios as an engineer at a big company that makes things that fly.
“… my mom likes being busy and HATES having nothing to do …”
This spells DOOM for many retirees as many of the retired have learned …
…but they learn only after they have already retired, which means they learn too late.
Depression and early death awaits many of the retired who are not properly prepared, IMHO.
Yeah, I worry about that too. She has always been a very busy person. I don’t think she will do well in retirement.
I just finished researching the new 1099 regulations. I does NOT add more tax. It does add some extra paperwork, but it asks people to do nothing that they shouldn’t have already been doing. Like truthfully reporting their actual business income and deductions.
It’s also going to be almost impossible to enforce.
“But she has been hearing rumors of all these new law changes ”
Rumors? These aren’t rumors. They are laws that have been signed. Obamacare will mandate that any supplier that she buys $600+ from will get a 1099. And the law says that she has to provide health insurance for her emplouyees or pay massive fines. Small businesses will collapse by the thousands if not hundreds of thousands from the added costs of Obamacare.
“I just finished researching the new 1099 regulations. I does NOT add more tax. It does add some extra paperwork”
I travel a lot every year. All my travel is on my corporate credit card. I can easily spend $600 on a ticket and $600 on a hotel stay. So every airline, every hotel I stay at will need me to create a 1099. I rent cars from Avis. So Avis will need a 1099. If I eat at at the same restaurant a few times a year and the total is more than $600, the restaurant will need a 1099. If I buy any equipment like a printer, a laptop that is $600 from Best Buy, I need to send Best But a 1099.
I buy health insurance through my business, so BC/BS will get a 1099. I buy gas that is more than $600 from Chevron, so they get a 1099. My car is a lease through my company, so I guess Audi will get a 1099.
I could easily have to send 100 1099s out every year. I will spend tens if not hundreds of hours tallying up all the expenses and figuring out who gets what 1099. And then spent hours trying to find the federal tax IDs of every one of these companies as well as their addresses.
And my business is a 1 person operation. Imagine a business with 10, 100, 1000 employees all travelling just 5 times a year.
But yea it’s just a little paperwork, no big deal.
Eddie, you seem to obfuscate for the hell of it. Unless this hairdresser has 50 employees she would not be required to cover healthcare. duh. If you need to constantly indulge your Obama obsession (what would Freud say?) at least get your facts right.
I didn’t realize that it was over 50 employees, that is at least a good thing. She only has about a dozen or so people working at the shop.
You guys ever notice that eddie’s posts have more “I, me, mine” stuff in them than any one else’s?
This development will be apt to send shock waves through financial markets…
July 23, 2010, 7:15 p.m. EDT
Financial reform bill claims first victim
Asset-backed securities issuance freezes as rating agencies balk
By April H. Lee and Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) — It took less than a day for the Wall Street reform bill to claim its first victim.
President Barack Obama signed the legislation into law on Wednesday. Soon after, the asset-backed securities market ground to a halt.
Ford Motor Co. (F 12.72, +0.63, +5.21%) , which was planning to sell a package of auto loans to investors, pulled the deal. There have been no asset-backed securitizations in the U.S. this week, according to Dealogic. That compares to a weekly average of almost four deals worth $1.83 billion in the previous ten weeks.
…
Cry me a river.
I say it’s time for the gov to license a bunch of start up bond rating agencies and tell the big 3 to suck it.
Again Feingold tried to push an amendment that would create a pool of rating agencies and if you wanted to sell securities they would be rated by one of these randomly selected.
The PIGs Barney Frank and Dodd said let’s study it.
Kudos to the California highway patrolman who warned the CEO of Calpers on the housing bubble back in 2003! This is a story destined for legend, right up there with the shoe shine boy stock tip story from 1929.
Too bad the Calpers CEO ignored the warning.
* BEST OF WSJ.COM’S MONEY BLOGS
* JULY 24, 2010
From Deal Journal, MarketBeat and Wealth Report
Union Foretold Housing Bubble
Calpers CEO Told in ‘03 To Avoid Risk, Buy Gold; Tipped Off by Police Buys
In February 2003, the chief executive of the California Public Employees’ Retirement System, or Calpers, was sent a letter maaking a number of predictions.
It said a housing bubble would soon deflate and wreak havoc on average consumers.
It urged Calpers to resist risky investments in a push for higher returns. Aggressive investing, it said, could jeopardize retirement benefits.
It even suggested—tongue-in-cheek—it might be wise to bury gold in the backyard in anticipation of the looming burst of the housing bubble.
The housing market, of course, did collapse—beginning in late 2006. Some Calpers investments from risky land deals to massive housing complexes went bust. The fund, underfunded, recently raised employer contribution rates and is considering lowering its annual return goals. And since February 2003, the price of gold has more than tripled.
The prescient letter, sent to former Calpers Chief Executive Fred Buenrostro, wasn’t from a Wall Street analyst or a Federal Reserve governor. It was from the leader of a small highway-patrol union in California.
Jon Hamm is chief of the 14,000-member California Association of Highway Patrolmen, where he has worked for 26 years. He has never held a position in finance or economics. Rather, he is an economics junkie who pores over financial websites in his free time. “I don’t count myself to be an expert,” the 51-year-old says.
Still, Mr. Hamm notes, he considers his interest more than a leisurely hobby. Having a view on what is to come economically helps him when he negotiates benefits with an eye to the long term, he says.
Members of his union and acquaintances have been among Mr. Hamm’s key economic indicators. Around the time he sent the letter, he had been mentally filing away anecdotes about highway patrol officers and friends purchasing $400,000 homes. Mr. Hamm negotiates members’ salaries—officers earn an average of around $60,000 a year—so his antennae went up.
He sent Deal Journal a copy of his letter shortly after leading a coalition of four unions that negotiated less-generous pension benefits for their workers last month in order to avoid furloughs and layoffs amid California’s budget woes.
…
Of course, Mr. Buenrostro didn’t listen to the very smart Mr. Hamm. He was too busy at the time taking bribes from a placement agent steering funds to Wall Street firms.
http://www.sacbee.com/2010/07/20/2901046/placement-agent-villalobos-says.html#mi_rss=State%20Politics
10 to 1 he steared CALPERS to purchase a piece of Stuyvesant town apts in NY from MET LIFE.
IMO a Multi billion dollar fraud commited by MET LIVE Blackrock and the front company Tishman Speyer. Suckers were GSE’s and CALPERS and others
wikipedia.org/wiki/Stuyvesant_Town%E2%80%94Peter_Cooper_Village
Evidence from the Wall Street Journal on the persistence of real estate bubble-era thinking:
- Increasing housing affordability is “bad.”
- Declining housing affordability is “good.”
* The Wall Street Journal
* HOMES
* JULY 23, 2010
Home Sales Dip as Unsold Inventory Persists
Glut of Properties on Market Hints at Falling Prices Through Rest of Year as Sector Adjusts to End of Buyers’ Tax Credit
By NICK TIMIRAOS
Sales of existing homes declined in June while the inventory of unsold homes rose, a combination that doesn’t bode well for prices in the months ahead.
In its monthly report on home-sale transactions on Thursday, the National Association of Realtors said sales were running at a seasonally adjusted annual pace of 5.37 million last month, down 5.1% from May but up 9.8% from one year ago.
…
Unsold homes are also growing as signs of home-price stabilization in some markets have encouraged homeowners to test the market. Karen Wiese moved into her current home in Fair Oaks, Calif., five years ago after she and her husband, a homebuilder, decided to live in it rather than sell for less than the $1.1 million asking price.
On Wednesday, she listed the six-bedroom home for $639,000.
“We don’t even know if we’ll get a looker,” she said. Ms. Wiese, 59, is building a smaller home on an adjacent lot and said she wants to downsize because her husband died last year.
One bright spot: falling mortgage rates, which continue to serve as one strong tailwind for the market.
The average rate on a 30-year fixed-rate mortgage was quoted at 4.56% this week, according to a weekly survey released by Freddie Mac on Thursday. The 15-year fixed-rate mortgage averaged 4.03%. Both are the lowest since Freddie began its survey in 1971.
Nonetheless, the prospect of weak demand has prompted housing economists to taking a dimmer outlook of the housing market, according to a monthly survey released on Thursday.
Some 60% of the 109 economists and other analysts surveyed by MacroMarkets LLC expect home prices to decline this year, up from 40% in May.
Separately, the Federal Housing Finance Agency said its monthly house-price index in May was up 0.5% on a seasonally adjusted basis from April. The index is up 1.6% over the last three months, but down 1.2% from a year earlier.
Time to end govmint Diversity policies
http://www2.timesdispatch.com/news/2010/jul/23/webbgat23-ar-348131/