Bits Bucket For August 8, 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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First again. Third time in a week. Must be the “edge” from living in Japan.
You get to experience tomorrow before the rest of us.
How does the future look???
Last!
Laster!
Just finished doing a search on the sales trend in my area here in North Jersey and the average sales price so far this year was 300K and most houses that do sell are between 250K & 350K and usually listed for about 6 months after reductions. What bothers me is the upper range homes between 500K & 650K do not even budge, some are getting close to being listed for a year. I think eventually these people or the banks are going to give in and start reducing. This will definetly bring the 250K to 350K homes lower. I’m sure this is going on in the surrounding areas too.
And that is why the low end of the market has not bottomed out even if homes in those ranges are selling at their current listing prices. When you can get a 5/3 near the train station to NYC and in a great school district for $400K, not $700K, people are not going to see the 3/2 no where near a train station with only OK schools at $350K as such a bargain.
Bingo, polly.
“What bothers me is the upper range homes between 500K & 650K do not even budge, some are getting close to being listed for a year.”
Why does this bother you?
And should hardly be a surprise too. The message those sellers have been getting ever since the very first price decline is that prices have bottomed.
For the new buyers with good credit who controlled their spending, saved, “Deflation is great”. Why should not there be Awards for “good common sense”!
“What bothers me is the upper range homes between 500K & 650K do not even budge, some are getting close to being listed for a year.”
Bear in mind that you are looking at homes which are priced above market value (i.e., priced at levels where they are unlikely to ever sell) and perhaps you will feel less bothered.
A home about an 1/8 of a mile from me in 94024 just sold. Not sure of the price but it sold in two weeks so I would assume they got asking or above. I drive by this house almost everyday and saw no evidence of people home shopping.
We know of this one home that’s been on the
market for eight (8) years because the owners
are living in LaLa Land when it comes to its value.
They’ll die there before lowering the price.
Whistleblower: Fannie Mae Bungled Anti-Foreclosure Program
WASHINGTON - Whistleblower Caroline Herron claims that the Home Affordable Modification Program (HAMP) was marred by delays, missteps, and executives preoccupied with their institution’s short-term financial interests. Her allegations provide a rare account from a former insider willing to tell what was going on behind closed doors with the government’s handling of the $50 billion HAMP program, according to interviews and documents reviewed by the Center for Public Integrity.
Herron charges in a lawsuit that Fannie, which had a $113 million contract to administer HAMP, pushed as many borrowers as possible into short-term trial modifications because it was eligible to receive incentive payments from the Treasury Department for trial modifications it booked before the end of 2009. Despite its original stated goal of saving three million to four million homeowners from foreclosure, HAMP permanently modified about 230,000 mortgages in the program’s first year - the equivalent of 8 percent of new foreclosures filed in 2009 alone.
Herron and others also criticize how Fannie and Treasury handled a “borrower portal” technology project aimed at helping to break the logjam of homeowners struggling to document and complete their modification requests. The lawsuit alleges that Fannie was reluctant to move quickly to make it easier for homeowners to provide extensive documentation to their loan servicers because it wanted to continue processing less-documented trial modifications.
A former Fannie vice president who returned to the mortgage giant in 2009 as a high-level consultant, Herron alleges that Fannie Mae officials terminated her $200-an-hour consulting work in January because she raised questions about its administration of the program.
I believe I have previously ranted about trying to get a private company whose executives get millions of dollars of compensation that is tied to financial results to do a public policy mission that may not be in the best financial interest of the company. Consider it repeated in this space. If you want to get a program implemented to fulfill a public policy goal, you have to use actual government employees who have NO financial incentive to undermine the program.
Maybe the private company representatives would be inspired to sacrifice their finances if they see you emptying your own wallet for that public policy mission.
But I doubt it. Financial self sacrifice is for young fools and they only do it once. I know, because I did the same thing thirty years ago. Lesson learned.
“If you want to get a program implemented to fulfill a public policy goal, you have to use actual government employees who have NO financial incentive to undermine the program.”
Clearly you are not referring to the revolving door between defense contractors and the high-ranking military officers who look forward to lucrative post-military careers with the same companies they are supposed to be overseeing while in uniform. It’s an inherent conflict of interest but a racket that enriches all concerned.
I can’t pretend to know the details of the defence contracting industry - though my understanding of revolving door is that it implies going back and forth between private and public sector multiple times which sounds unlikely in the military.
However, there are all sorts of reports around DC that the military has id’ed any number of projects they just don’t want and would gladly cut, but the congress critters representing the districts in which those project reside won’t let them. I think the armt recently did a whole big report on how the debt is a danger to the country and since military spending is part of the problem, they need to work on fiding ways to do their assigned tasks for lots less money. The report then went on to talk about ways to accomplish it. So, yeah, military officers are working on ways to reduce spending on contractors. Whether you want to believe it or not.
It seems like the biggest flaw in HAMP was a misperception among the program’s designers of the magnitude of the problem they were trying to solve. Had they understood how deeply underwater so many borrowers actually were, the futility of trying to bridge the gap between the amounts owed lenders and the means to repay it for more than a minuscule few individuals would have been obvious.
This blame game appears to represent an effort to shift culpability for the program’s failure from its designers (presumably the smartest guys on the Obamanomics team) to those charged with executing it.
I disagree. I think the biggest problem with HAMP is that the designers thought that banks would do something other than what they perceived as profit maximizing in order to - I’m not sure - build up goodwill with the public maybe? They were thinking like politicians, not business people.
In addition, I doubt they researched the exact terms of the servicing agreements, which really don’t allow for the servicer bank to voluntarily up and reduce the amount of money the bond holders will eventually get in return for a fee meant to reimburse them for administrative inconvenience. If it does allow it, it would probably make them subject to a law suit by the bond holders who thought it wasn’t a revenue maximizing strategy. Also, I don’t think they realized that the banks were never, ever, ever going to hire up large departments of fairly skilled employees to do work that earned them a small administrative inconvenience fee from the government and would end up getting them sued by the bond holders for giving away part of the principle of the bonds. And to top it all off, they seem to have no idea that 31% of gross income is way too high to create a sustainable payment for most two earner families.
The amount by which people are under water really isn’t the controlling factor. It is a big issue for the very new state programs where they are using some of the bail out money the big banks repaid to actually buy down principle on the loans, but that isn’t HAMP. HAMP money was never more than a tiny fee to try to subsidize the paperwork costs.
“The amount by which people are under water really isn’t the controlling factor.”
You and I obviously live on different sides of the beltway. From out here in Caleeforneeyah, it appears the depth of the water above borrowers’ mortgages would make it prohibitively expensive to make very many of them whole.
That wasn’t what HAMP was ever meant to do. The idea behind HAMP was the banks could forclose, sell to a new owner and go on from there. That was forseen as a possiblity in their servicing agreements with the bond holders and could be carried out. The HAMP payments were meant to incentivize them to create an alternative to forclosure and selling the house that involved a variety of reductions in principle and/or interest and doing it with an eye to what the owners seemed to be able to afford. THAT was not contemplated in the servicing agreements and the banks aren’t doing it - not much anyway - and not for a thousand bucks or two that they are offered to subsidize the cost of the paperwork. HAMP never was meant to use the money to reduce the principle. If there had ever been enough money in HAMP to pay down the amount between the ojutstanding loan and the fair value, all the banks would have been lined up to grab the free money. It was NEVER part of the program though I expect a lot of journalists thought it was.
A lot of this govt program back and forth, inevitable failure, resulting finger-pointing, etc, avoids the root problem IMO: this phenomenon some call a bubble. There is some collective blindness to a popular delusion I suppose, that prevents participants from looking directly at it. Throw in the vested interest certain parties have in taking advantage of the situation and we have a well-written recipe for denial.
Let’s go back and pretend that an honest discussion of what happened had occurred. As the mania unraveled and it became clear that the markets had succumbed to irrationality, suppose the government had public hearings on what a bubble was, how widespread it was, and so on. Let’s say experts had been called in to look at past bubbles and compare them to this one. And then people at the Federal Reserve, industry CEOs and various regulators were asked to comment within this context. I think that everything would have become much more clear and policy response could have been more effective. The public would also have come to see how the housing prices had reached absurd, unsustainable levels and what choices they faced. This scenario would not guarantee a better outcome, but would have made one more likely.
What happened instead surely made a bad situation worse. Even though the words housing bubble were used often, the true meaning of the concept was never fully embraced in government circles or the media. Recall that the focus quickly turned to regional manias and then to lending; prices had only got out of line on the coasts, we were told. This was a subprime problem and it was contained. Along the way, the fact that we had experienced a popular delusion was forgotten, and replaced by the idea that the participants had been tricked, even defrauded into their greedy behavior. And every victim must have a government savior! Slowly, as the collapse spread, the focus became the financial ‘crisis’. This was elevated into a systemic ‘crisis’ and scaremongering was used stampede the public into all sorts of foolishness. Down the slippery slope we went, and we found ourselves giving public monies to the same corporations who were the villains of this story! And with the bubble completely out of the minds eye, ’saving’ house prices became a government policy, with the full support of the vast industry interests of course.
Forgive me if I don’t follow the failure of this program or that; these failures were inevitable. IMO the real failure of the government and the media regarding the housing bubble was one of recognition. This can be attributed to stupidity or malice I suppose and I’ll leave it to history to sort that out. But I’m comfortable with the idea that in 20, 50 or 100 years no one will look back on this event and discuss HAMP, or TARP, etc. Rather I suspect that the chapter will be called something like, ‘the greatest financial mania in history’. And people will probably chuckle at the scampering, empty-headed foolishness that such an episode can involve.
“Throw in the vested interest certain parties have in taking advantage of the situation and we have a well-written recipe for denial.”
It will sure be most interesting to see what happens when and if DC policymakers ever move past the denial phase of the housing bubble stages of grief.
“This was elevated into a systemic ‘crisis’ and scaremongering was used stampede the public into all sorts of foolishness. Down the slippery slope we went, and we found ourselves giving public monies to the same corporations who were the villains of this story!”
Though utterly shameful, the situation at hand also seems somehow unavoidable.
Let’s go back and pretend that an honest discussion of what happened had occurred.
You nailed it on multiple points, Ben, but “an honest discussion” of the problems facing this country is virtually impossible given the interests of our political and financial elites, and their tools in the press, in avoiding such a debate at all costs. And the American public are frankly too dim-witted and docile to demand such a discussion - millions of them, with their greed and entitlement mentality, are all too willing to claim victim status rather than acknowledge their own role in the housing bubble.
All HAMP did was suck a few poor FBers into continuing to pay their mtgs on their under water houses for a few more months. It was never intended, sorry, it was intended to make everyone happy, bank and FB. The banks threw a few bones, less than 1% got REAL modifications. The banks kept getting their payments and the gov continued debasing the currency tryimg to inflate our way out. The banks loved HAMP.
“HAMP money was never more than a tiny fee to try to subsidize the paperwork costs.”
But that gets straight to my point: If almost nobody is underwater by a small enough amount to make a loan mod a realistic possibility, then there really is no point in creating a large scale program to subsidize nearly-nonexistent paperwork.
You still aren’t understanding. The money was only meant to subsidize the paperwork costs. That is it. The write downs were supposed to be done because they were better for the banks than foreclosing and selling to a new person. They were supposed to do it voluntarily in their own self interest. But they don’t own the notes. Bond holders do. And the servicing agreements don’t contemplate write downs of principle, only forclosing and selling. And they aren’t even do that very quickly because once they foreclose and sell, they don’t get fees for servicing the mortgage on behalf od the bond holders.
The only program that deals with meaningful writedowns of principle reimbursed by government money is the very new experimental thing in just a few states. There isn’t enough money in that one to make much difference, though it might actually help a few mortgage holders in a meaningful way if the states that inplement the programs can resist spreading the money around so widely that you still don’t get any sort of meaningful reduction.
“You still aren’t understanding.”
Indeed! Why create a program with almost no takers?
Because they thought that banks would see reducing principle as better than forclosing and selling. They really didn’t know that there wouldn’t be any takers. That is the only reason I can think of for designing the program the way they did. Honestly, if the banks did actually own the mortgages, some of them would have done it. Forclosing is a pain in the neck. Owning the property for a while is a pain in the neck. Selling the forclosed property is a pain in the neck. But the banks don’t own the properties. Bond holders do which means that they can only do what was foreseen and addressing in the servicing agreements set up quite a while ago. No room for business judgement to be used. None at all.
Either that, or it was the only thing anyone could come up with that sounded like it might work and wouldn’t completely destroy private contract law. Just a PR grab and nothing more. But I don’t think that is the case. I think people designed it who had never actually done a securitization deal and didn’t know the dirty, on-the-ground level details. That is what I think. ‘Cause I have done those deals and the whole thing sounded like a disater that found a place to happen to me. Banks don’t do stuff out of the goodness of their hearts. And they don’t risk being sued if they can avoid it. And they rarely do anything if everyone else isn’t doing something very similar. They just don’t roll that way.
+100 points Polly, you nailed it.
The question begs to be asked then and that
is “who really owns the notes?” How are they
bundled? And how do you actually identify
what is what?
“They really didn’t know that there wouldn’t be any takers. That is the only reason I can think of for designing the program the way they did.”
How could the Smartest Guys in the Room have missed what seemed so obvious to me and a plethora of other real estate hobbiests?
“But the banks don’t own the properties. Bond holders do which means that they can only do what was foreseen and addressing in the servicing agreements set up quite a while ago. No room for business judgment to be used. None at all.”
This seems to get back to a legal issue Ben Jones raised regarding loan modifications back when this program was first announced. In retrospect, it appears he noticed something quite important which the designers of this program overlooked.
Polly, so the fed (taxpayers) have to pay for the loan forgiveness or the lowered interest rate, to keep the bondholders and contract law happy.
test. do I pass?
Woo-hoo, I do!
(Internet problems had prevented me from posting from home. It works now.)
“Woo-hoo, I do!
(Internet problems had prevented me from posting from home. It works now.)”
This could be a problem Mr Spock.
You and your lame Varon-T disruptor.
Ready 3 photon torpedoes and lock in on his chimney.
“Ready 3 photon torpedoes and lock in on his chimney.”
Oxide, you may want to consider leasing my fully functional Klingon Cloaking Device and Home Defender. Works great to twart all manner of photon bombardment, HAARP waves, pesky chemtrails, and chiggers.
Of course, everybody wants “the link”. OK, no problem:
http://mdc.mo.gov/discover-nature/avoid-outdoor-pests/chiggers
I know a lot of us on HBB are smart and frugal shoppers in buying things besides houses. If we wanted to throw money away, we’d have speed-dailed Suzanne with one little hot hand while holding earnest money in the other years ago.
Why buy a full priced for that certain textbook, CD, bike or even a good functional dresser drawer for that teenager when you can buy one for 1/2 price or less at the local second hand resale store ?
Well, if the Cops in Wisconsin communities have their way, you better bring your ID, put on your lipstick and comb your hair because the stores are gonna have to snap your picture. Big brother is into used baby clothes and everything else. It won’t just be the Pawn Shops anymore.
“Moms come into New to You Kids in Greenfield every week to sell their babies’ outgrown rompers to the small resale shop. But the business says it will have to close if it has to comply with a new city ordinance requiring it to take each mom’s picture and send that, along with detailed descriptions of the items she sells, to a police database every day.
The Greenfield ordinance also imposes transaction fees on resale stores that could amount to tens of thousands of dollars annually - a big burden for small retailers.
“It’s horrendous. This will put us out of business if we have to adhere to it,” said New to You Kids owner Robert Reinhardt.
Half-Price Books, a national resale chain that has a store a few doors down from Reinhardt’s in the Greenfield Fashion Center, will consider getting out of its lease, district manager Joe Desch said.
Half-Price also is thinking about filing a lawsuit against Greenfield on First Amendment grounds, because the new ordinance, which takes effect next summer, will require the bookstore to send police a daily list of customers who sell books to them, with identification and titles sold.
But Greenfield Police Detective Chuck Fletcher has news for resale operators who think they can escape the reporting requirements by moving to another town: There soon may to no place to run, no place to hide.”
…and you thought that “1984″ was just some old 2nd hand book !
link..
http://tinyurl.com/2alr4hp
Sheesh…Olygal really loved the little used item places, stores and stuff.
I miss her…a lot!
She’d have beat one Greenfield Police Detective Chuck Fletcher serverely upon the head and shoulders with a giant geoduck.
Its what we are good at Mikey…Making laws..
Once upon a time, long, long ago, in a land far away, we were surrounded and a very angry enemy was about to personally eat ME alive.
What in the world am I doing HERE I wondered , this is definity NOT one of the US Army Fun, Travel and Adventure places that I had in mind?
Bugles, whistles, AK’s…this appeared to me, by all general indications, to be one of my my many very intense George Armstrong Custer moments…
A crouched down tiny Sgt Pandy(in a low whisper): “mikey…mikey!”
mikey in Airborne Turtle position(in a low whisper and scared to death): “yeah Sarge ?”
A crouched down tiny Sgt Pandy(in a low whisper): “‘mikey, Do It Today, Because Tomorrow It Will Be Against the Law.”
Little Sgt Pandy’s joke to cheer me up was very profound and today I scream it out loud.
“Do IT today America, because tomorrow, IT WILL be against the law.”
RIP, my little friend Sgt Pandy.
What a thread. Thank you.
And F U to all who heard of the Libertarian Party for decades but voted for the Democrats or Republicans because “the Libertarians will never win.” F You! This is what you gave us. Bigger and bigger government. Because “the LP cannot win.”
I gave up after 2008. You who kept voting for the DemReps “because the LP cannot win” made me drop out. F it all.
We have the school marm state you did not want but gave us because you voted for it.
Bill…Doesn’t it need to fail first before true libertarian principals can finally be embraced ? The far left wing nuts and far right wing nuts are just to entrenched…IMO, it will take a collapse first like the one that Dr. Paul Roberts is suggesting in the link below…Kind of depressing really…
And F U to all who heard of the Libertarian Party for decades but voted for the Democrats or Republicans because “the Libertarians will never win.” F You! This is what you gave us. Bigger and bigger government.
Understand the sentiments, Bill. One reason I never voted for the Libertarian Party, despite my own Libertarian leanings, was their open-borders policy. Also my support for effective regulation to curb the predatory proclivities of mega-banks and corporations.
But yes, a giant FU to the sheeple who voted Republican because “they’re the lesser of two evils,” willfully overlooking the fact that the Establishment GOP has become the zombie host for the neo-cons, military-industrial complex, and Wall Street interests. The GOP continues to spout empty populist/conservative rhetoric to fool the walking lobotomies who comprise their voter base, but the party could not be further from true Republican principles.
Wait Bill..Wait!!
There’s more….
Tiny Sgt Pandy did used to say” Do it today because tomorrow it will be against the law.”
but he ALSO always added…”But Don’T get caught…Don’t EVER get caught!!”
http://www.businessinsider.com/obamas-health-care-contains-a-hidden-tax-on-gold-coins-2010-7
The monstrosity called Obamacare has some real gems hidden in the 2300 pages Nancy Pelosi infamously told us we’d have to wait to see until this Orwellian power grab became law. For example, the new tax on private sales of gold coins or bullion valued at $600 dollars or more. While 5000 coin dealers are up in arms - as this will force them to create a 1099 each time such a transaction takes place, and lets Uncle Sam and the IRS know exactly who is buying gold [not that they would ever confiscate it like FDR did, heaven forbid!] - the reaction of the docile sheeple has been exactly as expected: a collective shrug. What the sheeple don’t understand is that a legal precedent has now been set to tax ALL transactions valued at $600 or more - the previous limit was $10,000. Wait until every Craigslist sale must be recorded on a 1099, and taxed, then the sheeple might finally realize what a massive intrusion into private commerce this is.
Echoing Bill, a heartfelt F U to all those who continue to vote to perpetuate this no-longer creeping encroachment of government powers and intrusiveness into the private sphere.
Libertarianism is getting so long in the tooth that it’s starting to remind me of the old Technocracy movement that arose in the 1920s. They believed the country should be run scientifically by scientists and engineers (like Herbert Hoover lol) Anyway, the old greybeard followeres were still around in the 1970s and 80s, assuring each other that if Americans had listened to the Technocrats, it would be in the mess it was in blah blah.
It was a nice safe place from which to critique current events while distancing oneself from the heavy lifting of change.
Montana, what is your alternative? I guess a valid alternative is to not vote at all.
But if your alternative is to vote for anyone in a political party which has a big government platform, you lost me. If you can find a political party with a platform for lesser government than the LP, let us know.
“The reporting system was developed a few years ago by the Green Bay Police Department, which maintains the database. Use of the system is free to municipalities, but some, including Greenfield and Wausau, are imposing transaction fees on resale stores to offset policing costs.”
The burden of proof has shifted from convincing a jury that personal property was stolen to the owner proving that the property legally purchased.
This piece reminds me of a flea market vendor who had $20k cash confiscated by the police because the fellow couldn’t prove where it came from. The police said drugs, but no evidence of drugs or sales of drugs ever surfaced.
I haven’t formed an opinion on this new law, as I know nothing about it, but as you describe it, it merely creates another reportable transaction to the IRS. If you pay your CPA, attorney, architect, whoever provides you a service $600 or more in a year, you have to give them a 1099. It doesn’t make the transaction newly taxable; it always was. Just like if you bought a gold coin on Monday for $1,000 and sold it on Tuesday for $1,040, that $40 gain was always taxable. It does sound like a hassle if the new law truly applies to all purchases of inventories. Likely opening the door for the Value Added Tax, which I also haven’t formed an opinion on.
Sounds like an attempt to tax the underground economy.
Fair Game ~ NYTimess
Housing Policy’s Third Rail
WHILE Congress toiled on the financial overhaul last spring, precious little was said about Fannie Mae and Freddie Mac, the mortgage finance companies that collapsed spectacularly two years ago.
Indeed, these wards of the state got just two mentions in the 1,500-page law known as Dodd-Frank: first, when it ordered the Treasury to produce a study on ending the taxpayer-owned status of the companies and, second, in a “sense of the Congress” passage stating that efforts to improve the nation’s mortgage credit system “would be incomplete without enactment of meaningful structural reforms” of Fannie and Freddie.
No kidding.
With midterm elections near, though, there will be talk aplenty about dealing with the companies precisely because Dodd-Frank didn’t address them. Unfortunately, if past is prologue, this talk is likely to be more political than practical.
I can’t wait until the Republicans begin vigorously attacking Democrats for their failure to address this one in the 2300 page financial reform bill. Of course, the Democrats can always come back and point out that the GSEs collapsed on Bush’s watch, and try to some how pin the blame for this inevitability on the Republicans.
All told, this has the makings of a great political cat fight. Got popcorn?
I can’t wait until the Republicans begin vigorously attacking Democrats for their failure to address this one in the 2300 page financial reform bill.
Another duped believer in the Republicrat puppet show. For those who think a Republican sweep in November will make the slightest difference in the direction the country is headed in, here’s the video the political & financial elites will ban some day: George Carlin’s “Who Really Controls America.” Learn something, Cantankerous Dupe of the Status Quo:
http://www.youtube.com/watch?v=hYIC0eZYEtI
I’m not a duped believer. I just find it entertaining to watch politicians club each other over the head, especially if lots of blood and guts spill out.
To each his own, I guess…
I would gladly vote Libertarian but they are just like the other guys and I have a small problem with them all.
(The Libertarians won’t crown me as their Warrior king and Absolute Monarch either)
I’m not a duped believer. I just find it entertaining to watch politicians club each other over the head
What’s really entertaining is to see all those dewy-eyed young Obama enthusiasts of ‘08 standing in the unemployment line. Bend over for your hope ‘n change, tools.
To say that a Republican sweep cannot make any difference is to say that the Obamacare will make no difference.
Are you kidding?
Sure it will be different… we’ll have a third war going in addition to ObamaCare… maybe even a 4th so we can engage the whole axis of evil.
Republican/Democrat are just different bumperstickers on the hellbound handbasket we’re in.
+1
Fannie Mae, Freddie Mac losing political support as U.S. reshapes housing finance system
Washington Post
For several decades, whenever a question of housing policy came up in Washington, two companies dominated. Fannie Mae and Freddie Mac marshaled armies of lobbyists, deep political connections and millions of dollars in contributions to get their way.
But now Fannie Mae and Freddie Mac, titans of the mortgage finance industry, are wards of the state, bailed out by Washington to the tune of $160 billion and banned from political activity. As the Obama administration and Congress prepare to take up overhauling the $12 trillion U.S. mortgage market, new interests are shaping the debate like never before.
Among those influencing many Democrats are affordable housing advocates and liberal think tanks that want the government to do less to foster homeownership and more to support rental housing for low-income people. Those influencing Republicans favor sharply reducing all federal support for housing.
“…more to support rental housing for low-income people.”
More Section 8 renters coming soon to a vacant McMansion in your ‘hood!
You call them Section 8 renters. Nancy Pelosi calls them core supporters and comrades.
I have to suspect the percentage of these folks who vote is vanishingly small. The political model Polosi et al work off is based on the support of bleeding heart liberals with bank whose priorities include giving Section 8 renters precedence on renting homes of their choice over the rights of non-Section 8 renters.
For several decades, whenever a question of housing policy came up in Washington, two companies dominated. Fannie Mae and Freddie Mac marshaled armies of lobbyists, deep political connections and millions of dollars in contributions to get their way.
******************************
Man, if that isn’t a red flag id as a major government teat I don’t know what is.
Buffett’s Berkshire Hathaway profit tumbles 40%
NEW YORK (CNNMoney.com) — Warren Buffett’s Berkshire Hathaway posted a second-quarter profit that tumbled 40% from a year ago, as the company suffered a $1.4 billion paper loss on its derivatives bets.
The conglomerate reported quarterly net income of $1.97 billion, or $1,195 per Class A share compared with last year’s $3.3 billion, or $2,123 per share, during the same quarter.
Berkshire’s $1.4 billion decline in the market value of its derivatives bets on stock market indexes and other financial instruments followed a gain of $1.5 billion a year ago.
Excluding its investment and derivative business, the Omaha, Neb.-based company booked operating earnings per share of $1,866, a 63% rise from $1,147 in the same period last year.
Times must be real tough for mr buffet.
Stupid question time. Why didn’t BRK-A ever split? Right now the share price is around $120K. Does this serve as a disincentive for people to “day trade” it?
This is mentioned in most articles that talk about him taking the company public. He doesn’t want to attract investors that don’t share his philosophy. Although he did split the B shares for reasons that didn’t make much sense to me at the time… simply to swap shares with one of the companies he purchased.
Is Paul Craig Roberts a tin foil hat guy?
If you can get past Alex Jones (barf) , this is a pretty good interview with PCR regarding an article he wrote describing in general detail how a collapse of the United States could occur. You don’t hafta be a scholar like him to come come to some of the same conclusions as he does, because the mechanics of political dissolution are always the same; the collapse of trust comes first, and all following behaviors come from people individually and collectively attempting to form or strengthen new and/or old bonds of trust between themselves and others.
Several times in this interview, Paul Craig Roberts discusses how federal power will be reduced/eliminated by lack of enforcement by state and local police who will simply ignore Washington and just work on protecting themselves, their families and their local communities; after all, what can they do about it?
Well, Mr. Roberts makes no mention of what that old crazy redneck has been warning for years (back in the day from the side walk in front of DMV)
The Feds could “invite” foreign troops in to “do the work Americans won’t do”
The Feds could “hire” Chinese troops to maintain “law and order”; and pay them with all the resources they can dig up, eat, drive, fuck, cart off, extort, steal…(cause you know they ain’t gonna take anything from a worn out printing press)
In other words, we could experience something similar to what Afghans are going through right now.
*gulp*
http://www.youtube.com/watch?v=dlQDDdR3G7A&playnext=1&videos=4-A4u76Qvy4
Paul Craig Roberts (born April 3, 1939, in Atlanta, Georgia) is an economist and a nationally syndicated columnist for Creators Syndicate. He served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as a co-founder of Reaganomics.”[1] He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. Roberts has been a critic of both Democratic and Republican administrations.
Please, the Feds have absolute control. It’s called the re-distribution of money. Imagine how long a state “rebellion” could last if the Feds cut off all the retiree SS and Medicare payments, plus money for food stamps, UE benefits, college loans, agricultural support payments, you name it.
The target would quickly turn from Washington to the state house and governor’s mansion. Too many people depend on the Federal dole now; Washington’s power is locked in. The states weren’t even willing to resist mandatory seat belt laws when the Feds threatened to withhold highway money.
After re-reading what I just posted, a great sadness came over me. I’ve posted before about what I call a continuum of the human condition, with absolute freedom at one end and absolute slavery at the other. While one can argue as to where we are on that continuum, no one can argue about the direction we’re going.
no one can argue about the direction we’re going ??
I agree Bill…
Pray for the kids.
And we don’t get very much back for it….at least the CCC and depression era projects help build America…It seems almost a desperate necessity today.
——–
Too many people depend on the Federal dole now;
Feds withhold money? How about California withhold its taxes and keep them in state, better yet, they have already demonstrated they too have a printing press when they issued IOUs. If someone wants to do business with the state they can use the California/US Note exchange rate, coming soon…
I have a lot of respect for PCR. I tend to think he might be right. Indeed, all politics is local and these foreign “warlords” seem to be prevailing against our supposedly superior force. The same can most definitely happen here. And if and when it does, these oligarchs and a politician or two might not sleep at night.
BTW, this local alignment with the police is already happening here in the Tampa Bay area, as I’m sure it is happening in others. Recently two members of the Tampa Police Department were shot and killed by some doper. Well, I mean to tellya, the hue and cry that went up was unbelievable. Days of manhunts until they finally smoked the guy out, wall to wall news coverage, every day. Endless benefit events for the families, interviews with friends on how great these guys were, memorial services, biker processions, you name it. The slavering buttlicking from the local news departments was incredible.
Now, of course this was a tragedy, no doubt about it. However, I don’t see that sort of thing happening for fallen troops, really. So, yeah, alignment with local police. Already happening. Have a barbeque and a fundraiser and maybe these guys will look out for you.
Have a barbeque and a fundraiser and maybe these guys will look out for you ??
Or maybe these guys will look the other way when necessary is more like it…
That’s because they volunteered to get shot at in a foreign country, its that simple. Police take the risk in their own communities.
Vietnam was different lots got drafted and I’ll bet the same type of protest would happen again if people were forced to go into service at a time of war.
====================
However, I don’t see that sort of thing happening for fallen troops, really
Now that’s even further to the outfield than me. I don’t think we will get into that dire of a situation. Main street is cutting way back, and as Combo said, it’s a good thing. This cut back will have enormous consequences. If we have to cut back, so will government. We are starting to see the public upset about high paid politicians ($800,000 salaried Bell, CA city councilmember), and the fat pensions of government employees. We will soon go after the federal level and demand reform of the Congressional benefits - pensions, health care, and so on.
I predict tax revenues in 2012 (the 2011 tax year) will go down significantly, at least for the wealthier people. The revenue from the 2011 tax year will be less, not more. The Laffer curve in reverse will put the nail in the coffin of the socialist regime.
I work extra hours for free and if I do that in 2011 I will stay under the $200,000 income level. My Roth conversions are the 2010 FY instead of 2011 and my 2011 income will be significantly lower than my 2010 income. I am doing my part to starve the government of money.
doing my part to starve the government of money ?
You along with many others…Thats why ultimately we will see elimination of the current income tax system…We are going with the Flat tax & VAT…There will be winners and losers and one of the biggest losers IMO, will be owner occupied housing…Bye Bye mortgage interest deduction or at the very least only a severe limitation of it…Bye Bye property tax deduction…Hello Federal tax on all real estate transfers…
Au contraire, I see a hybrid tax system in our future. Don’t like the present convoluted income tax of the present day? It gets worse, with the addition of the VAT. The present system allows the CONgress to reward special interests with deductions, so they will not want to end this entirely.
The VAT portion will be the stab in the back on ROTH IRA holders.
I am doing my part to starve the government of money.
Sadly, they can always find other sources. The tax deductions you take advantage of could go away…or they could start taxing your savings. Or muni bonds..etc, etc.
I think it’s good you’re doing what you can, but sadly this is a war that we can’t win. Anyone who’s been fiscally responsible and has cash is going to get pillaged.
“I am doing my part to starve the government of money.”
Do you have some kind of special control over the Fed’s printing press technology?
I can adjust accordingly. By renting everything and not owning much, but having your assets mostly exchangeable with a computer mouse click, you can react to the government.
Muni bonds? If they tax them, you realize the advantage of them over cash or tresuries will disappear fast and no one will buy them. Municipalities won’t attract creditors and will be really dependent on economic fluctuations of their residents’ own incomes. So removing any tax advantage of muni bonds is very unlikely. If that does happen, my investment will change into something with a better tax advantage.
Municipalities won’t attract creditors and will be really dependent on economic fluctuations of their residents’ own incomes. So removing any tax advantage of muni bonds is very unlikely.
Actually, that will give the fed exactly what it wants - more power over the municipalities?
Think federal highway funds…the fedgov taxes everyone, then doles it out to the local gov’ts *IF* they enact certain laws.
Why wouldn’t they want to extend that power?
Look at Macy’s: U.S. tax code encourages companies to rack up huge debt. ~ Washington Post ~ August 8, 2010
Macy’s has become the great American department store, with 850 locations scattered across all but four states. And it has gotten there the great American way, by running up huge debts and flirting with default, or worse.
Like other U.S. corporations, it also has had a uniquely American incentive for its borrowing habits: the nation’s tax laws.
These rules offer extensive tax breaks to companies that borrow money and penalize those that raise cash in safer ways, such as issuing stock. Yet despite the recent financial crash, which exposed the perils of excessive borrowing, the rules are likely to persist in federal law because nearly all businesses in America would oppose eliminating these tax deductions, lawmakers say.
“These rules offer extensive tax breaks to companies that borrow money and penalize those that raise cash in safer ways, such as issuing stock.”
You get what you reward.
“You get what you reward.”
Until you don’t. These tax breaks are in effect government subsidies to these companies; Many (but not all) of these companies are able to “make money” because of the tax breaks. Take away the tax breaks and they stop making money.
Pretty soon they will be in bankruptcy court, get their debts wiped out, issue more common stock and then re-emerge.They will have pleunty of money to pay executives with the stock offering.These public companies dont give a sh@t about shareholders.They have learned to game the system just like donald trump.GM is doing the exact same thing.I dont trust the game.
“These tax breaks are in effect government subsidies to these companies”
You may be right combo but for a minute there I had a flash of thought that this was just the corporate version of the home buyers tax exemption. When credit expansion is necessary at all costs, the man behind the curtain makes sure to tell the Congress Critters to make it so.
Chrysler to close Kenosha factory in October, cutting 575 jobs
Journal Sentinel
Chrysler Group’s Kenosha factory will close in October, resulting in the loss of 575 jobs, the company announced in a filing with state regulators Friday.
The factory’s demise was announced last year when Italian carmaker Fiat bought Chrysler, leaving Kenosha and several other facilities to be liquidated in bankruptcy court.
The plant had been expected to close in this fall or by year end. A notice filed in conjunction with the state’s plant-closing and mass layoff law Friday says the loss of jobs is slated to begin as soon as Oct. 8, but could hit two weeks later.
The Chrysler plant makes 2.7-liter and 3.5-liter V-6 engines for the Chrysler 300, Sebring and Dodge Avenger, Charger and Journey.
State and federal politicians criticized Chrysler and the federal agency that handled the auto industry crisis last year for closing the Kenosha plant while accepting taxpayer funding to bail out the automaker.
Chrysler is continuing to make engines at plants in Michigan and Mexico.
“The Chrysler plant makes 2.7-liter and 3.5-liter V-6 engines”
From an article on making your car last 250,000 miles.
http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/the-joys-of-a-5000-dollar-used-car.aspx?page=2
“Car dealer Lang makes his living finding the hidden value in older cars, but there are some even he won’t touch. “Any Dodge Intrepid with the 2.7-liter, V-6 engine will be a piece of garbage,” he says. “I sold one that had been owned by the Salvation Army, gently driven and perfectly maintained. Within three months of selling it, the engine blew up.”
Whew, just went through about a week-long ordeal with my internet provider to resolve a connectivity issue. This customer service outsourcing to India and the Phillippines really bites the big one.
Welcome to the machine Pal.
Its the “vending machine” business model.
You put your money in and when you don’t get what was promised, all you can do is kick it, bang on it, tip it over, put MORE MONEY in it… because you can’t speak to an actual person to nresolve the problem (at least one that speaks English)
I must say, it was a very strange experience. There was almost a superstitious, ritualistic quality to the communication: Press this button, sacrifice a goat, wait five seconds, etc. There’s a definite heirarchy in the South Asian customer service system, like a caste system. The supervisors are a little more versed in English and have more of an English accent and know a little more what they are doing.
But I picked up very quickly that these guys have a good scam going. Getting a new piece of equipment is like pulling teeth from a hippo. One guy has to “consult” with his “colleague” from another department (the “billing” department) and they make a big deal that they’re going to give you something for “fwee”.
The first time I dealt with customre service in India (that I know of) was around 2003. I had just purchased a computer (the one I’m still using) at a big box store. I part was missing. I think it was the power cord for the speakers. I told the guy on the phone the part was missing. He said to go back to the store to get it from a customer service rep. I told him there wasn’t any customer service to speak of at BJ’s Wholesale Club and they didn’t have extra parts floating around. He didn’t understand. Boy did he not understand.
Eventually I think I ended up using a power cord from my previous computer, but I made him stay on the phone for an hour or more since that was literally the only way to express ire at the process - making sure that they were not able to “resolve” the issue quickly. Because, of course, in customer service, they no longer measure whether the issue was resolved to the customer’s satisfaction. They only measure how long it takes to get you off the phone.
I usually don’t print entire articles, but I hope Ben will make an exception in this case. I just saw this. Looks like the Senate passed this in a big hurry before the Indian lobbyists could descend en masse.
Boy, is my blood boiling. Eff ‘em for whining about “protectionism”. And if, as a sovereign nation, we want to “flout” international trade practices, too bad. They do, I’m sure. Bwahahahahaha!
Indian IT companies say border security bill would undermine trade practices
By Rama Lakshmi
Washington Post staff writer
Saturday, August 7, 2010
NEW DELHI — Representatives of India’s booming information technology industry said Friday that a border security bill passed by the U.S. Senate would promote protectionism and flout international trade practices.
The bill, approved Thursday by the Senate, calls for boosting surveillance along the U.S.-Mexico border by deploying more enforcement agents and aerial drones. The House could take up the measure next week.
Indian technology executives are rattled that the $600 million funding for the additional measures proposed in the bill, introduced by Democratic Sens. Charles E. Schumer (N.Y.) and Claire McCaskill (Mo.), would be raised by increasing the visa application fees of companies that employ 50 or more non-immigrant, skilled foreign employees.
This would affect companies that bring into the United States highly skilled workers under “H-1B” visas or “L” visas. The proposal would hit Indian IT-outsourcing companies that send thousands of workers to the United States to work on short-term projects that extend from three months to three years. For long-term projects, Indian companies hire locally within the United States.
Schumer and McCaskill say the bill would improve border security without adding to the deficit. “America must do a better job of securing our borders. This bill will help in a big way,” McCaskill said in a statement after the bill’s Senate passage.
“We do understand that the U.S. needs to secure its borders. But the notion that Indian IT companies should pay for sealing their border with Mexico is incongruent,” said Som Mittal, the president of the National Association of Software and Services Companies in New Delhi. “This is a populist measure that is protectionist and discriminatory and is not compliant with the practices of the World Trade Organization.”
He said that mixing trade and immigration issues is a mistake. “You are running on thin ice if you curb trade to talk about immigration,” he said.
The booming IT services industry has contributed a big chunk to India’s impressive economic growth in recent years. Industry representatives say the new law is likely to impose an additional expense of more than $200 million annually. Last year, out of the 121,000 H-1B visas issued by the United States, Indian companies got 12,000.
The bill, which affects renewals and transfers as well as new visa applications, was passed quickly by the Senate just before senators left for the August recess.
I had to go to our embassy in New Delhi when
on a business trip. My driver had to show his
papers and I had to show my passport as we
entered embassy row. What struck me was that the US embassy had a line several hundred feet long and four people thick waiting to apply for a US visa. Not one other
embassy had a line.
My ISP is a local mon-n-pop operation.
I think my ISP is Merlin…and you really, really have to believe in Magic !!
Jubak’s Journal8/2/2010 8:00 PM ET
Fannie and Freddie must die
The taxpayer wards have gotten billions in bailouts in the name of preventing a mortgage meltdown and housing collapse. And now Congress is looking for a solution.
Watch out.
By Jim Jubak
And now, fresh off passing the 2,300-page Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress promises to address the problems of Fannie Mae and Freddie Mac
Be afraid. Be very afraid.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/fannie-and-freddie-must-die.aspx
“No, the real danger is that a mistake in fixing Fannie and Freddie could take down the Federal Reserve. Or at least take down the Fed to the degree that any central bank, with a central bank’s ability to create money, could be taken down.
All hyperbole aside, a mistake in fixing Fannie Mae and Freddie Mac could throw the U.S. financial system into crisis again by destroying the Fed’s balance sheet.”
I find the Fed balance sheet to be a riddle wrapped in a mystery inside an enigma. What is to stop them from announcing later this week that they ‘found’ another $700 bn (or you name the figure) in the asset column of their balance sheet which they will allocate as they see fit?
Chrysler sales rise but problems lurk behind gains
By TOM KRISHER
The Associated Press
Posted: 2:00 p.m. Saturday, Aug. 7, 2010
DETROIT — A year after getting billions of dollars in federal aid to stay in business, Chrysler now brags each month about growing sales, insisting it is rolling down the road to recovery.
But beneath the surface of those sales figures are troubling signs for Chrysler. The company has a long way to go before it is truly healthy again.
Most of Chrysler’s gains this year came from sales to rental car companies, governments and other businesses, according to confidential data obtained by The Associated Press. Everyday drivers have shunned its dated lineup of cars and trucks.
A successful Chrysler is essential for the government because it is trying to get back the $15 billion in emergency loans it made to the company.
Chrysler lost $197 million in the first quarter, and it’s expected to post a net loss when it releases second-quarter results on Monday.
Not good if you are a bankster…Get to consuming, buy stuff!
Consumer borrowing falls in June for fifth straight month as credit card use declines again.
WASHINGTON (AP) — Consumer borrowing fell in June for a fifth straight month as households keep cutting back on credit card use.
Borrowing dropped at an annual rate of $1.3 billion in June, the Federal Reserve reported Friday. That marked the 16th drop in overall credit in the past 17 months.
Americans backed away from swiping their credit cards for the 21st straight month. That offset a rise in the number of auto loans.
Households are borrowing less and saving more, and that has dragged on the overall economy by lowering consumer spending.
The $1.3 billion June drop in borrowing was much smaller than the $5 billion decline that economists had expected. The government also revised the May decline to show a smaller drop of $5.3 billion rather than the initial $9.2 billion decrease.
While a smaller decline could signal the long slide on consumer credit is leveling off, economists cautioned against getting too optimistic given continued lackluster job growth and tight credit standards.
“As long as income and employment do not show marked improvements, consumers will avoid taking on new debt,” said Gregory Daco, senior economist at IHS Global Insight. “Consumers remain bound by a weak labor market … high debt levels and a fragile housing market.”
I always take not of this particular data release. It’s seems relevant to this layman.
If you’re up for this kind of information, listen (and be very entertained) by retail analyst Howard Davidowitz sometimes on WBBR. You don’t want to miss him.
“Households are borrowing less and saving more, and that has dragged on the overall economy by lowering consumer spending.”
Isn’t it a said state of affairs to think of households borrowing less and saving more to be a BAD THING for them to do?
The govt should be encougaing conservation and less consuming. Will there ever be a day when people are rewarded for being good stewards? In our system success is based on what you have.Hopefully one day it will be based on what you do for people and the land.
The various governments may end up going the Willie Sutton route, meaning they may end up going to where the money is.
Right now the governments tax what we earn, they tax what we spend, soon they may want to tax what we save.
In sense they’re already there - property tax.
Household savings should be required to be registered with the government because they are a threat to the economy and hence national security.
No combo, not like that. Here, try this:
Let a big(ger) bank fail, and let the MSM televise some gnashing if teeth. Then tell people that unless they set up every single account that they have with the treasury for direct deposit (or auto withdrawls) - the FDIC will not guarantee a dime of their money.
Comment by combotechie
2010-08-08 07:37:45
Household savings should be required to be registered with the government because they are a threat to the economy and hence national security.
——————-
In a way, this is already being done. The govt has access to our financial data, including where we keep our money.
If you decide to opt out of this Big Brother system by using cash, good luck. If ever they decide to raid your house and find your “savings,” you’ll be labeled a “criminal” (must be a “militant” or drug dealer or deal in the black market somehow, right?) before you even hit the jail cell. It always makes me shudder when you see a story on the news and the worst thing they can say about some suspect is that s/he has a “cache” of weapons (even if they’re all legal), and “tens of thousands of dollars in cash.” Even though there’s technically nothing illegal about it, we are made to believe that these people must be “bad” for having cash like that around the house. God forbid they find piles of gold or somesuch.
Reality and the passage of time will prove the most effective teachers of sustainable behavior. Going forward, “personal policy” will likely trump “public policy”.
Frugal households turning into evil hoarders.
Pitchfork time.
consumers prison anytime soon?
There are already consumers prisons. They are the underwater McMansions that many of them are still desperately trying to hang on to.
“There are already consumers prisons.”
Welcome to the Hotel California
Such a lovely place (Such a lovely place)
Such a lovely face
They livin’ it up at the Hotel California
What a nice surprise (what a nice surprise)
Bring your alibis
Mirrors on the ceiling,
The pink champagne on ice
And she said ‘We are all just prisoners here, of our own device‘
The more things change, the more they stay the same in California:
“The song is an allegory about hedonism and self-destruction in the Southern California music industry of the late 1970s; Don Henley called it “our interpretation of the high life in Los Angeles”[6] and later reiterated “it’s basically a song about the dark underbelly of the American dream and about excess in America, which is something we knew a lot about.”
Here’s another long-time favorite. When I listened to it as a child, I took its message literally, missing the intended metaphor for the economic hardships of California living.
It Never Rains in Southern California
“It Never Rains in Southern California”, written by Albert Hammond and Mike Hazlewood, is the title of a song first released by Hammond, an English born singer-songwriter, in 1972. Hammond’s version became a hit worldwide, peaking at #5 on the U.S. Billboard Hot 100 that year.
The song concerns the struggles of a singer who moves out to California to pursue a career in Hollywood but does not have any success and deteriorates in the process.
…
“Mike @Petco Park”
BTW, we recently wend to the Padre’s game against LA. I have never seen such a full Petco Park! Made me think quite a bit about how much downtown SD and the Padres both could stand to benefit if you guys could figure out how to price your tickets to regularly fill the stadium.
What is the perceived advantage of running a ball park 80 percent empty much of the time, when the marginal profit of filling another seat is presumably greater than zero — especially when you consider the long-run returns to building a stronger fan base?
Rancher — Don’t tell me you don’t realize that we can collectively spend ourselves into prosperity, if we just put our faith into the Keynesian propaganda messages out of DC?
Thrower,
I just don’t know what got into me, for a minute there I thought I was falling into a hole in the middle of a Kansas corn field.
My mantra for the day is “Spend, spend,
and spend some more, for tomorrow we’ll
print more money”.
All is well, go forth and sin no more, my son.
“All is well, go forth and sin no more, my son.”
Masquerading as a man with a reason
My charade is the event of the season
And if I claim to be a wise man, well
It surely means that I don’t know
On a stormy sea of moving emotion
Tossed about I’m like a ship on the ocean
I set a course for winds of fortune
But I hear the voices say
Carry on my wayward son
There’ll be peace when you are done
Lay your weary head to rest
Don’t you cry no more
No!
Carry on, you will always remember
Carry on, nothing equals the splendor
The center lights around your vanity
But surely heaven waits for you
- Kansas -
YEAH this is what 25 year olds write today: What the helllll happened…
Katy Perry - “California Gurls” Lyrics
[Snoop Dogg]
Greetings loved ones, let’s take a journey
[Katy Perry]
I know a place where the grass is really greener
Warm, wet and wild, there must be something in the water
Sipping gin and juice, laying underneath the palm trees
The boys break their necks trying to creep a little sneak peek
You could travel the world
But nothing comes close to the golden coast
Once you party with us, you’ll be falling in love
Oh, oh, oh, oh, oh, oh
[Chorus]
California girls, we’re unforgettable
Daisy Dukes, bikinis on top
Sun-kissed skin, so hot will melt your popsicle
Oh, oh, oh, oh, oh, oh
California girls, we’re undeniable
Fine, fresh, fierce, we got it on lock
West coast represent, now put your hands up
Oh, oh, oh, oh, oh, oh
Sex on a beach we get sand in our stilettos
We freak in my jeep, Snoop Doggy dog on the stereo
You could travel the world
But nothing comes close to the golden coast
Once you party with us, you’ll be falling in love
Oh, oh, oh, oh, oh, oh
(Chorus)
[Snoop Dogg]
Toned, tan, fit and ready
Turn it up cause its gettin’ heavy
Wild wild west coast
These are the girls I love the most
I mean the ones, I mean like she’s the one
Kiss her, touch her, squeeze her
The girls a freak, she drives a jeep
The men on the beach,
I’m okay, I won’t play, I love the bay
Just like I love LA
Venice Beach and Palm Springs
Summer time is everything
Come on boys, hanging out
All that ass hanging out
Bikinis, tankinis, martinis, no weenies
Just to get in betweeny
Katy my lady (yeah)
You looking here baby (uh huh)
I’m all up on you
Cause you representing California
(Chorus)
[Snoop Dogg]
California girls man
I wish they all could be California girls (x2)
There’s only a few children who do what we do
“Bikinis, tankinis, martinis, no weenies
Just to get in betweeny”
Snoop’s a poet in his own mind.
Very sad, but that bad news is mainly among the economists, Wall street, and the current regime supporters who want the current regime to look good. It’s all good news for main street.
In the Beach cities of Los Angeles, frugality is not even mentioned. Grasshoppers still fiddling among the $30k millionaire set who drive from 20 miles inland to “appear” as if they live in HB or MB.
Juxtaposed, the only people I see working extra hours for free in the engineering firm where I work are the same people who drive modest cars. Who’d have thunk?
Bill - what is the job market for engineering, specifically for entry level fresh out of school with a BSEE? These things tend to be cyclical - could you inform us in what part of the cycle we are in?
There exists a belief that many of the companies that outsourced engineering to India are not happy with their results (incompetency), so now these companies are going back to hiring (competent) American engineers. I have no idea how truth there is in any of this.
how much truth
TCM_guy,
I am not sure about EE, since I’m a softie.
I have a local perspective, as you may have guessed. The client company I am farmed out to has been shedding people, and they are mostly senior engineers. They are picking up younger people (lower salaries). The senior engineers I’ve seen get canned are older than 50, on the average. Actually I observed that one was just a scapegoat and the others deserved to get fired for their poor performance. There are still open requisitions in software at that client company - about six requisitions for the L.A./ Orange County offices.
I get occasional head hunter calls for software, but those are my regular headhunters - from three firms in different parts of the country. A headhunter on my linkedin account announced that things are looking up (but they are as trustworthy as a realtard, and you know how that is…). This is the second headhunter who said things are looking up.
I also heard the outsourcing of engineering to India is not being favorable to the bottom line. There is a term for engineering jobs coming back to the U.S. I’m not sure if it’s “insourcing” or “backsourcing,” or “resourcing!”
Fresh out of school with an EE should be golden, recession or not. Back in the early 1980s the tech companies were choosing EEs to do software engineer jobs because EEs tend to have tougher degrees - more intense mathematics - tougher courses. I had good timing by stretching my college “career” until 1985 when the defense spending caused more job opportunities. I went to work as a federal employee at that time. The pay was not good but I was not suffering.
Back in the early 1980s the tech companies were choosing EEs to do software engineer jobs because EEs tend to have tougher degrees - more intense mathematics - tougher courses
My CS degree required all the same math + science that a EE required. I think the important distinction is whether the CS program is in the college of engineering or not. I had to take 3 semesters of calculus, probability and stats, 3 semesters of linear algebra, and 4 semesters of physics…
Compare that to a CS degree from the University of Texas - which is in the college of natural sciences, IIRC…
“…$30k millionaire set…”
I have to wonder if this set also frequents La Jolla?
“Juxtaposed, the only people I see working extra hours for free in the engineering firm where I work are the same people who drive modest cars. Who’d have thunk?”
My friend is a big shot that works for a major engineering firm. He works very hard and never panics.
Yesterday he calls me and was in a total panic and wanted me to take care of something right then and there because he had to make an appointment fast. He sounded pretty urgent. He was in a mad rush and naturally I said okay.
What sent this normally cool and collective guy into a total full-blown panic attack? Whatever it was, it had to be really cool.
Turns out he forgot to empty his pockets and sent his Apple iphone, with his whole business life on it, through the washing machine cycle. It appears that the Apple iphone isn’t waterproof. A little Tide, a few shirts and a $600 gadget…normal cycle…Go !
I didn’t know that you had to have an appointment with the stupid store to pick up a new iphone. They must be very strict people, those Apple iphone gadget people.
He laughed about it, after he got his replacement iphone. Funny how he and his life was so dependant he was on that stupid little thing. His Ruler is an Apple iphone.
mikey is not a big shot civil engineer superintendant in a major firm. However, mikey IS smart enough to know to empty all frogs, string, chewing gum and miscellaneous items out all pockets BEFORE pushing any washing machine buttoms without a responsible adult woman present and supervising me!!
Again, is this really savings we are talking about, or write offs (enabled by the various TARPs)?
“Consumer borrowing fell in June for a fifth straight month as households keep cutting back on credit card use.”
Perhaps Megabank, Inc should try ending some of its ‘Screw All Americans’ customer policies and see if that helps bring back credit card use somewhat…
Making speech illegal. It’s just unbelievable how this “multi-cultural”, “tolerance-based” society has degenerated.
BASIC RIGHT number ONE: Free speech.
Cops: Man charged after REFERRING to Conn. rampage
(AP) – 2 days ago
NEW HAVEN, Conn. — Connecticut police say they arrested a man at a management company after he mentioned the shooting rampage across the state that killed nine people and said he understood the killer’s mindset.
Fifty-eight-year-old Francis Laskowski of Derby was charged with breach of peace Wednesday after making the comments while working at Fusco Management Co. in New Haven.
Nine people died in the shootings Tuesday at Hartford Distributors in Manchester, including gunman Omar Thornton. Thornton told police in a 911 call that he wanted to avenge racial discrimination, allegations that company officials denied.
Laskowski told The Associated Press on Friday that his comments were blown out of proportion. He says his arrest was “ridiculous” and he didn’t make any threats.
Laskowski posted bail and is due in New Haven Superior Court on Tuesday.
Copyright © 2010 The Associated Press. All rights reserved.
What’s even worse is the co-worker or co-workers who turned him in. Shades of the Soviet Union.
Shades of the Soviet Union ??
Where already there my friend…
Correct, we have been heading in this direction for decades, now the push is in your face, full tilt. Very sad to watch, but what can one do about it?
I would highly recommend the book Going Postal by Mark Ames. It really dissects the school and workplace shooting phenomenons. One of his points is that he attempts to understand the mindset of the shooters.
I wonder how long until somebody gets arrested for reading it?
Like I said last night…
“Hell, Hades, like the Dark Fallen Angel, travels through the Night by Many Names”
A person has to be truly insane, lost and living in their own personal Hell to do something like that to innocent people.
That’s especially true if these killers knew or even have loved those people.
Those monsters must have the coldests hearts of all.
That stuff is way beyond plain simple Evil, it’s Total Insanity in my book.
I’m with you, Mikey.
Here’s the latest Money Supply Charts. Pay particular attention to what has happened to M3:
http://www.shadowstats.com/alternate_data/money-supply-charts
I guess we will have to take the Shadow Government Statisticians’ (SGS) word for it on massive declines in M3, as the Fed no longer reports it?
Is this how Poof! looks when plotted across the X axis?
I wonder how the efforts to stop this intergenerational Wall Street scam will fare. Any insights to offer among HBB posters?
A Letter to Secretary Geithner
Today, the Coalition to Stop Wall Street Home Resale Fees sent a strong letter to Treasury Secretary Timothy Geithner, as well as the heads of 11 other government departments and agencies; advising the administation to outlaw home resale fees. You can read the letter in full below:
July 29, 2010
The Honorable Timothy Geithner
Secretary
U.S. Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Geithner:
Wall Street Home Resale Fees threaten homeowners across the United States. Often unnoticed by consumers, these fees are also called private transfer fee covenants, and are recorded by covenant or sales contract by private third parties. They require that every time a home is sold for the next 99 years, a percentage of the sales price of the home (usually 1%) must be paid to the third party. In return, homeowners’ equity is taken from them, the price of their home is depressed, and the smooth transfer of real property is threatened – possibly making their home unmarketable.
More troubling, one company is negotiating with possible investors to “securitize” projected revenue streams from pools of these fees.
State legislatures and federal regulators have recognized the danger of Wall Street Home Resale Fees to consumers and have begun to take action:
* The use of Wall Street Home Resale Fees has been restricted in 17 states: Arizona, California*, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, North Carolina, Ohio, Oregon, Texas, and Utah.
* HUD confirmed that these fees violate HUD’s regulations, and that the FHA will not insure mortgages for properties with Wall Street Home Resale Fees.
At a Congressional hearing in May, Rep. Brad Sherman (D-CA) called Wall Street Home Resale Fees a “new predatory scheme.” Federal Housing Finance Agency Acting Director Ed DeMarco has said that he is “very troubled” by what he is learning about the fees, and that he expects “the enterprises and FHFA would have something to say about this [issue] in the near future.”
We are opposed to the use of Wall Street Home Resale Fees. We write today to urge the Obama Administration to protect consumers and ban Wall Street Home Resale Fees.
Signed,
American Land Title Association
American Federation of State, County and Municipal Employees
Center for Responsible Lending
Georgia State Trade Association of Non-Profit Developers
Hawaii Advocates for Consumer Rights
Institute for Liberty
Interfaith Housing Center of the Northern Suburbs
Property Rights Alliance
National Association of REALTORS®
National Council of La Raza
Transport Workers Union
*California requires special disclosure when a home is placed under a Wall Street Home Resale Fee
“HUD confirmed that these fees violate HUD’s regulations, and that the FHA will not insure mortgages for properties with Wall Street Home Resale Fees.”
We are saved! I move that ALL mortgages have so-called Wall Street Home Resale Fees.
Great point!
Another waste of paper and ink. Timmay doesn’t respond to the bleating of consumers, and he knows the voters are too stupid to support candidates who stand for REAL change. All of the “former” Goldman Sachs employees who are setting this country’s economic policies know who their ultimate benefactor is, and it sure ain’t the dolts in the heartland.
“Goldman Sachs employees who are setting this country’s economic policies know who their ultimate benefactor is, and it sure ain’t the dolts in the heartland.”
WTF ….”dolts in the heartland” !?!
Like the slivers of the east and west coasts are the hubs of the Universe, the edges of civilization and the known World ?
Sheesh Sammy, you ARE in a your typical savage mood today.
Take a Pill and…Chill
The flat fee makes no sense.
BUT maybe it’s time to consider putting in a “split the capital gains” clause in mortgages. Right now a mortgage is a losing situation for the lender: if the house appreciates they get nothing, if it loses value the lender gets all the downside when the buyer walks away. Would it be so unreasonable to let the lender take say 20% of the capital gains on resale? They could then be more reasonable in other terms of the mortgage.
I’d rather see huge downpayment requirements or exceedingly high interest rates instead.
Diverse coalition targets home transfer fees
By Kenneth R. Harney
Saturday, August 7, 2010
Can you name a housing controversy that pulls Iraq and Afghanistan veterans, consumer advocates, labor unions representing transport workers and government employees, the title insurance industry, the National Council of La Raza, libertarian and property rights groups, and the National Association of Realtors together into a protest coalition demanding quick action from the Obama administration?
A more unlikely collection of real estate bedfellows is hard to imagine. Yet at the end of last month, 11 groups with widely divergent agendas and memberships formed the Coalition to Stop Wall Street Home Resale Fees.
The target of their protest: Private transfer fees being attached as liens on homes and requiring successions of property owners to pay a fee every time the house or lot resells during the coming 99 years. Although proponents say the concept helps real estate developers raise capital for projects by bringing in Wall Street investors, critics contend the liens amount to a perpetual money machine that lowers equity values for unsuspecting consumers and complicates real estate sales.
…
* POLITICS
* JULY 30, 2010, 7:36 P.M. ET
Home-Resale Fees Under Attack
By ROBBIE WHELAN
A coalition of real-estate industry groups is asking the government to ban a new type of fee on property transactions they say unfairly strips equity from property owners, including homeowners, and redistributes the funds to developers.
The group, led by the National Association of Realtors and the American Land Title Association, has asked U.S. Treasury Secretary Timothy Geithner to use the consumer-protection agency created by the recent financial-reform legislation to outlaw “capital recovery fees.”
The fees, also known as re-conveyance fees, are inserted by developers into covenants governing newly built subdivisions and commercial real-estate developments. They require sellers of a property to pay a percentage, often 1%, of the selling price to the original developer of the property every time it changes hands, for up to 99 years.
Municipalities have long used similar fees, called transfer taxes, to raise revenues or recoup public subsidies for private development projects, but private transfer fees are relatively new.
Freehold Capital Partners, a New York-based firm founded by Joseph B. Alderman, a developer from Texas, has taken the lead in the market, entering agreements with both commercial developers and home builders since 2007 to levy the fees. The company claims it so far has about $600 billion in real estate subject to the fees. Some firms on Wall Street are skeptical of that number; Freehold declined to disclose the names of its clients.
The new-home market is set to be worth $94.5 billion in 2010, according to the National Association of Home Builders.
Private transfer fees were being levied before the emergence of Freehold. Between 2001 and 2006, home-builder Lennar Corp. built fees into the sale of 13,000 homes in California. Lennar has used the proceeds to add $3.8 milllon to the Lennar Charitable Housing Foundation.
…
“The fees, also known as re-conveyence fees, are inserted by developers into covenants governing newly built subdivisions and commercial real-estate developments. They require sellers of a property to pay a percentage, often 1%, of the selling price to the original developer of the property every time it changes hands, for up to 99 years.”
Lol. And if I were a buyer of a property I would want to sign such an agreement because …?
“And if I were a buyer of a property I would want to sign such an agreement because …?”
Because all properties are subject to such fees; welcome to America’s Wall Street-run monopoly!
I’m loving this! I love watching these various groups splinter off and go against each other.
Is the NAR is pissed at the developers? Good. Time to fire up a batch of popcorn and watch them go at each other.
Does the NAR need money to fight its battles? Lol, raise the dues its members must pay. Levy a special assessment.
But others need to be drawn into the battles. The bankers need to bleed a bit. And the mortgage brokers. All of them need to feel some pain.
I can’t believe the recently paltry return premium over autopilot index fund investing justifies the exorbitant management fees that hedge funds charge their clients. At times like these, it may be better for individual investors to be smart than to be wealthy and dependent on others for money management advice.
* BUSINESS
* AUGUST 7, 2010
Hedge Funds Less Than Hot in July
By GREGORY ZUCKERMAN And MARGOT PATRICK
Stock markets surged in July, but many hedge funds were left in the dust.
Overall, the average hedge fund gained 1.9% in July, according to Hennessee Group LLC, compared with a rise of just over 7% for the Dow Jones Industrial Average.
Behind the lackluster gains: Some hedge funds, after suffering in May and June, trimmed their exposure to stocks in July. That reduced their ability to participate in the rally. Other funds had bets against the euro, but its rise—as worries about a euro-zone debt crisis receded—caused losses, say investors in the funds.
“This month was, well, a little crazy,” Jaime Lester, a senior executive at Soundpost Partners, wrote his clients on July 31, saying his firm was “poorly positioned for the market’s rally in July” and lost almost 1% in the month.
Others did worse. RAB Capital PLC’s Special Situations Fund declined 12.1%, and is now down 8.2% year-to-date, reversing double-digit gains earlier in the year. Big funds run by Brevan Howard Asset Management LLP in London and D.E. Shaw in New York dropped 2.3% and 2.7% in July, respectively, according to investors. John Paulson’s biggest fund rose 1.8%.
The lackluster performance shows how the industry continues to struggle to maintain momentum. After the pain of 2008, a grim year for markets and the industry’s worst on record, hedge funds are cautious about another big downdraft.
Inflows at hedge funds slowed in the second quarter, at a net $9.5 billion, after having reached $13.8 billion in the first quarter. Hedge Fund Research Inc. estimates the industry’s current size at about $1.6 trillion as of June 30.
For the year, hedge funds remain up about 1.9%, compared with a gain of less than 1% for the Dow, through July, according to an index composed by Hennessee, which advises investors. HFR puts industry gains for the year at 1.5%.
…
As I’ve mentioned before, index funds ARE actively managed. A bunch of analysts at S&P determine which large cap companies should be in the S&P500, based on some internal metric of “good company”. It’s just that you don’t have to pay them for their work.
Point taken. Why pay some hedge fund charlatan an advising fee when you can get actively managed funds for free?
N.J. awaits $670 million in aid to stop layoffs, boost Medicaid rolls.
WASHINGTON — Congress expects to pass legislation next week containing $670 million for New Jersey to expand its Medicaid rolls and prevent thousands of layoffs among teachers, police officers and firefighters.
The $26 billion emergency aid measure passed the Senate 61-39 on Thursday, with New Jersey’s Frank R. Lautenberg and Robert Menendez and all other Senate Democrats voting yes. Two Republicans, Susan Collins and Olympia Snowe of Maine, also voted yes.
The House will interrupt its August recess to consider the legislation next week, possibly Tuesday. If it passes, Congress will then send it to President Barack Obama to sign into law.
The compromise bill, which was scaled back from previous versions to help financially struggling states, would provide $16 billion to shore up Medicaid programs in every state and $10 billion to prevent layoffs of public employees, including about 160,000 teachers nationwide.
New Jersey would get $400 million in Medicaid money and $268 million to avoid layoffs, mostly of K-12 teachers. The U.S. Department of Education estimated that 3,900 New Jersey teachers could be retained.
Two Republicans, Susan Collins and Olympia Snowe of Maine, also voted yes.
Them Yankee lassies keep kicking in the 3rd leg of the Southern Gentleman’s
card table strategy game of: “TrueDoNothing™ / “TrueObstructionists™ / TrueGridLokers™”
Three cheers for Maine!
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
&
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
How do housing market bottom callers factor in news reports like this one to their self-assured forecasts that housing values will only go up from here?
My impression is that they blithely ignore the unemployment picture.
* ECONOMY
* AUGUST 7, 2010
U.S. Job Market Loses Steam
Private Sector Expands Slightly, but Governments Cut Jobs; Treasury Yields Dip
By SUDEEP REDDY
The government’s latest snapshot of the job market was bleak, a sign the economic recovery is running out of steam with 14.6 million Americans still searching for work.
In the wake of Friday’s disappointing jobs report, Neal Lipschutz and Phil Izzo discuss new predictions that it could be many years before the nation’s unemployment rate reaches pre-recession levels. Plus, test-driving the new Porsche Hybrid SUV.
The economy shed 131,000 jobs, as 143,000 temporary Census workers fell off federal payrolls. Private-sector employment grew by 71,000 in July after a downwardly revised 31,000 in June. Government employment, not counting Census workers, fell by 59,000.
The unemployment rate held steady at 9.5% largely because people gave up hope of finding work and left the labor force.
The latest figures confirm the labor market has lost much of its momentum in recent months. The private sector has added 90,000 jobs a month on average so far this year, well below the 125,000 needed monthly just to keep up with population growth, let alone recover the eight million jobs lost during the recession. Two-thirds of the private-sector job creation this year occurred in March and April, when the economy’s trajectory appeared stronger.
“It’s a double whammy because it causes people to take a psychological step back,” said Tig Gilliam, chief executive of Adecco Group North America, the staffing firm. “Now, it looks like not only has the economy slowed, but maybe it wasn’t as good when it was originally reported as we thought.”
…
Ben at the controls
[Federal Reserve Chairman ‘Helicopter’ Ben Bernanke (right) and Treasury Secretary Tim Geithner appear set to fly in with more help for the ailing US economy.]
Economy needs Bernanke to increase cash supply
By JONATHON TRUGMAN
Last Updated: 5:08 AM, August 8, 2010
Posted: 1:15 AM, August 8, 2010
That noise you hear, that’s the sound of helicopters in the distance.
While they may be in the distance, they are closer than they have been in quite some time, and chief pilot Ben Bernanke is leading the squadron.
We are now coming up on three months of very anemic economic growth, so limp many economists fear we are closer than we have ever been to a double dip. GDP registered a paltry 2.4% in the second quarter, a very disappointing number, especially after the economy has fallen so far despite the huge spending in the stimulus plan.
The only real economic successes we have had have been TARP, and the Fed’s first round of quantitative easing, which ended in March. TARP was primarily the brainchild of former Treasury Chief Hank Paulson.
TARP turned out quite well, as almost all of the money lent to banks has been returned to the government– some in less than a year and with a tidy profit to boot for taxpayers. Not so evil-sounding when you look at the facts, is it?
Quantitative easing, on the other hand, is the practice of non-traditional monetary easing by the Fed, and generally includes moves outside of fed funds interest-rate changes.
Quantitative easing is essentially, but not only, the increasing of the money supply through purchases by the Fed. It can be accomplished by purchasing securities as mundane as Tim Geithner’s Treasuries or it can be more exotic, like purchasing mortgage-backed securities. The US still does not permit the Fed to buy corporate bonds — like many other countries — which would have been a good addition to FinReg.
…
The myth that the Fed can solve all the economy’s problems by just running its printing press technology a bit faster seems to never grow old.
Constitutional government is a necessary protector of the economic means of life in a free society….The Founders would not have dreamed of creating a burdensome system of bureaus to micromanage the affairs of the population. But that’s the precise definition of The State…a costly ever-expanding complication involving the political means. On the one hand - basic government.
On the other - The State.
~ It’s a hard concept to get across. There are only two ways to sustain oneself. 1/ The economic means…that is, working to provide food, housing, raiment, and other necessaries for oneself and family, or 2/ relying on the political means to force the productive population to support the unproductive among us.
On the one hand, limited government as established by the Constitution, and on the other an out-of-control STATE festooned with bureaus to manage almost every aspect of one’s life.
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising them the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.”
~ Professor Alexander Tytler
Superman Comic Saves Family Home From Foreclosure
Unexpected Find of Action Comics No. 1 Could Fetch Upwards of a Quarter of a Million Dollars at Auction
A struggling family facing foreclosure has stumbled upon what is considered to be the Holy Grail of comic books in their basement – a fortuitous find that could fetch upwards of a quarter million dollars at auction.
A copy of Action Comics No. 1, the first in which Superman ever appeared, was discovered as they went about the painful task of packing up a home that had been in the family since at least the 1950s. The couple, who live in the South with their children, asked to remain anonymous.
“The bank was about ready to foreclose,” said Vincent Zurzolo, co-owner of ComicConnect.com and Metropolis Comics and Collectibles in New York. “Literally, this family was in tears. The family home was going to be lost and they’re devastated. They can’t figure out a way out of this. They start packing things up. They go into the basement and start sifting through boxes – trying to find packing boxes – and they stumble on eight or nine comic books.”
Here is another reason to question the decision to walk away from a mortgage and stiff the lender and the insurer. I note that the housing bubble collapse bagholder identification process is now well underway, and in many cases it is the individual underwater homeowner who is getting left holding the bag.
It should also current prospective buyers who are thinking about stretching to buy a home in the current deflationary environment pause to reflect what they would do in the future if they found themselves deeply underwater and unable or unwilling to continue paying off an unaffordable mortgage.
Realty Q&A
Aug. 6, 2010, 12:25 a.m. EDT
Walk away from your mortgage? Insurer may follow you
Private mortgage insurers can — and do — file deficiency judgments
By Lew Sichelman
WASHINGTON (MarketWatch) — Question: I am currently living in a house with a mortgage that is upside down. My house in Pennsylvania is probably valued at $175,000 and my outstanding loan balance is $250,000. I’ve never missed a payment but I will need to move because of my children, and I really don’t see my home value moving up by $75,000 anytime in the near future.
A short sale doesn’t seem like an option because there are at least 10 other homes for sale in my community. So I am seriously considering walking away. I don’t care if my credit takes a big hit or even if I can’t buy another home for seven years. What does worry me is getting sued or having a collection agency hound me for the rest of my life.
From my research, it seems very unlikely that the bank will come after me for a delinquent judgment. However, I currently pay private mortgage insurance with my mortgage, and I am worried about the insurance company suing me or some other kind of lawsuit.
…
Here’s a story with all the hot-button issues for the HBB: gold, Chinese investments, and flyover country development.
Thanks to the efforts of a flamboyant Asian businessman, these families were being lured by the chance to invest in an Idaho gold mine that was once worked by Chinese miners - and by the opportunity to offer their children a new life in the United States.
“I admit the project is attractive,” Lu Yue, a woman who attended a Beijing seminar, told the China Daily newspaper. “Gold is always precious. Times change, but it keeps its value.”
By the end of Otter’s whirlwind weeklong trade mission in June, 20 investors had signed on to invest a total of $10 million that estimates say could create 200 jobs in Idaho. It was the first of what the state hopes will be a program that creates 1,200 jobs and brings $60 million a year to Idaho.
Linkey.
http://www.idahostatesman.com/2010/08/08/1295770/digging-for-chinese-gold-in-idaho.html
Food Stamp Cuts Coming.
The Great Recession continues on and one of the effects in Illinois is a record number of families receiving food stamps. The Illinois Department of Human Services states an all time record of more than 780,000 families received food stamps in June, an increase of 11.9 percent over last year, the Associated Press reports. Nationally over 40 million Americans use food stamps. Despite this increase, these families may be cut off from their support with the passage of a new bill to save the means of others.
The U.S. Senate passed a bill on Thursday that would provide $26 billion to states to help avoid teacher layoffs and cover Medicaid bills. However, to pay for this, $6.7 billion is being cut from the Supplemental Nutrition Assistance Program, and food stamp benefits will return to the pre-Recovery Act levels effective March 2014. The House is expected to vote in favor of the bill this week before the August recess. Americans on food stamps are currently averaging only $4.50 a day.
It … has begun.
Without a doubt.
How stupid is this? Who gives a fart about teachers and medical care if you can’t eat?
“How stupid is this? Who gives a fart about teachers and medical care if you can’t eat?”
or buy beer and cigarettes while we fund terrorists
Belle Glade Convenient Store Employees Arrested for Food Stamp Fraud
Apr 23, 2009
The Florida Department of Law Enforcement (FDLE), in conjunction with the Palm Beach County Sheriff’s Office, the Division of Alcoholic Beverages and Tobacco, the Office of Inspector General with U.S. Department of Agriculture (USDA), and the Federal Bureau of Investigation today arrested two South Florida convenience store managers on charges they committed nearly $1 million worth of food stamp fraud.
Gassan Ali, 35, of Belle Glade, and Imad Ali, 27, of Royal Palm Beach, were both charged with organized fraud, grand theft, and food stamp fraud.
5 Boynton convenience store employees charged with food stamp fraud bond out of jail
By Alexandra Seltzer
Palm Beach Post Staff Writer
Posted: 12:04 p.m. Friday, June 11, 2010
BOYNTON BEACH — Five people charged with public assistance fraud met their bond Thursday night and were released, according to Palm Beach County Jail records.
Ainda Khan, Kamal Ahmed, M.D. Abdul Gaffar, Mohammed Hossain and Rafiqul Chowdhury each met their individual bonds ranging from $6,000 to $9,000.
The men were arrested Thursday after undercover officers posed as customers with U.S. government food stamp cards and found fraudulent activity at five convenience stores in the city.
Police arrested Mahari, 48, a clerk at the EZ Mart on North Seacrest Boulevard; Hossain, 32, a clerk at Palm Food & Beverage on East Boynton Beach Boulevard; Gaffar, 52, a clerk at the Kwik Stop on South Federal Highway; Chowdhury, 50, president of First Stop Foods on South Federal Highway; and Ahmed, 27, a clerk at First Stop Foods.
Police said that an undercover transaction also took place at a Stop-N-Go on West Boynton Beach Boulevard, but they did not serve a search warrant at that location.
The investigation showed that store clerks were allowing customers to use Electronic Benefit Transfer (EBT) cards to buy beer, cigarettes and get cash, a Boynton Beach Police Department release said.
I predict a reduction in waistlines, a reduction in pigeon and Canada goose and fish populations, a reduction in food waste in landfills, an increase in bean prices.
~ Clipped from the Daily Reckoning…
“The epidemic of negative home equity won’t be cured anytime soon,” writes our stock market vigilante Dan Amoss, expanding on the cleanup effort in the Fannie Mae disaster. “It’ll require savings capital formation, a rebound in youth employment and household formation.
“We know that the lack of jobs and savings is the missing ingredient, because lower mortgage rates aren’t sparking a rebound in housing demand. Thirty-year fixed rate mortgage rates are now just 4.5%, down from 5.3% in August 2009. Yet according to the Mortgage Bankers Association, loan applications for new home purchases are back to 1996 levels.
“The homebuyer tax credit pulled forward future demand into late 2009/early 2010. Now that the tax credit has elapsed, demand is snapping right back to a very depressed level.
“In May, the National Association of Realtors reported a 30% month-to-month collapse in its index of pending home sales (see red line in the chart below).
“Then, just this week, it was announced that the index fell another 2.6% from May to June. Housing demand is clearly dismal without the tax credit.
Fire and Ice
Some say the world will end in fire,
Some say in ice.
From what I’ve tasted of desire
I hold with those who favor fire.
But if it had to perish twice,
I think I know enough of hate
To say that for destruction ice
Is also great
And would suffice.
-Robert Frost-
* COMMON SENSE
* AUGUST 4, 2010
Defending Yourself Against Deflation
By JAMES B. STEWART
The dreaded “D” word is back in circulation, and I don’t mean “depression.” Having skirted that potential calamity, the worry for policy makers and investors now is deflation.
On the face of it, deflation—falling prices—doesn’t seem like it would be so bad. Who wouldn’t welcome discounts that just keep getting better, like those sales at Filene’s Basement where prices got lower the longer merchandise stayed on the racks?
Of course, who knows what it really feels like, since most of us have never experienced prolonged deflation in our lifetime.
Maybe deflation would be a nice thing for people with secure, steady incomes. But deflation erodes profits and asset values. People wait to buy expecting lower prices, reducing demand. Lower profits cause companies to cut expenses, including employees. It is a downward spiral that, if Japan’s experience is any indication, is difficult to arrest.
Is deflation really a risk? The last deflation scare, after the Internet bubble burst in 2000, turned out to be a false alarm. What we got instead were soaring asset prices, from real estate to commodities to art. The Federal Reserve and other policy makers say they are determined to avoid it, and with the federal deficit having soared, deflation is the last thing they should want. (Inflation is the time-honored cure for big deficits.) Although short-term interest rates can’t really go any lower, the Fed can still revive other measures they stopped in the past year, such as buying Treasurys and mortgage-backed securities. If I had to bet, I would say we will avoid deflation.
…
Can’t find the clip of the Barry-tard adviser saying it may take up to 50 years to recover from this spill.
Disaster that never was: Why claims that BP created history’s worst oil spill may be the most cynical spin campaign ever
August 2010 ~ Daily Mail UK
The warm, white sand stretches for miles as clean and flat as a freshly laundered bed sheet.
The turquoise sea is so clear that I can see silvery fish playing around my toes as I take a cooling paddle.
If there is any more pristine resort in which to spend a summer holiday than Pensacola Beach, on the Gulf Coast of Florida, I would like to find it.
And yet, at a time of year when usually there is barely room to unfold a deckchair, the shore is eerily deserted.
Ask Pensacola’s fretfully quiet seafront traders why the tourists have all stayed away and they angrily recall one chaotic day back in late June.
Then, hungry for dramatic TV footage to support Barack Obama’s announcement, that the BP - or, as he preferred, ‘British Petroleum’ - oil spill was ‘the worst environmental disaster America has ever faced’, news networks descended on their town.
They quickly found what they were looking for: shocking images of Pensacola’s famously white beaches thickly-coated with sticky, black crude oil and apparently beyond salvation.
The apocalyptic message was reinforced in doom-laden interviews with locals. ‘It’s damn near biblical. This place is done for!’ lamented 36-year-old Kevin Reed, whose family have swum and sunbathed in the area for generations.
Yet, as I saw this week, nothing could be further from the truth. Strolling along the beach for an hour, I found just one, pea-sized tar-ball which crumbled to nothing between my fingers.
When, as a young boy, I played on Morecambe beach in Lancashire, worse things often washed up from the nearby ICI refinery.
Moreover, if the U.S. TV news crews had returned just three days after their original visit, they would have seen that the black morass had already been removed by some of the 20,000 clean-up workers hired by BP.
The workers are still there - only now they are using toothbrushes to sift out even the tiniest particles of oil.
But, of course, after a ‘catastrophic’ oil spill, a spotless beach doesn’t make dramatic viewing and who wants to know?
Long, long-time lurker here. This is my first post, and I write in the full knowledge that my lurker status does not entitle me to anyone’s considered response. Still, I have come to trust the opinions of many of you, and would be grateful for any input.
My mother recently passed away, leaving me and my two brothers a nice 4/3.5 in a close-in Washington suburb, where I will be living (unavoidably) within the next few years. I had not considered buying the place from my brothers, but because they’re nice guys and both already have places for their families to live (I do not - renter), they have agreed to sell it to me for what seems to be a considerable discount. That is, the place zillows for around 850K, but they said they would whack 150 off because they think it would be difficult to get that price and also because they believe it would be nice to keep the place in the family. Bottom line, with their discount and my third already in I would be paying around 450K for the place.
It would be a nice home for my family and me. I am also thinking it could be a good inflation hedge (I am more in the deflation-coming camp, but am also often wrong). Any impressions about whether it would be a good idea for me to buy the place now? My brothers told me I could think about it for a couple of months, but will have to act or forget it after that. Thanks.
I would spend a lot of time looking at what is for sale and what has sold to fully understand what the house is worth first. If it is a true discount and you would enjoy living there, you will do fine. If you are not crazy about the house or very certain about your future, I wouldn’t take on the stress. Also be prepared that if you sell the house for a decent profit in a short period of time, your siblings may get pissed even if they say they wont. Do they have some expectation that you will keep your mom’s house in the family? If so it may create an uncomfortable family situation if you decide to move. It is hard doing business with family. If prices drop considerably, you will feel uncomfortable about it. If you sell for considerably more than what they thought it was worth right now, they will get jealous and bitter. Just human nature.
I should add I speak from personal experience. When my grandfather passed, my aunt talked the family into letter her have his lake house for $250k in 2000. She sold it for $800k in 2005. There is still a lot of family bitterness about it. I doubt you will have the same experience but just throwing it out.
letter = letting
“…my aunt talked the family into letter her have his lake house for $250k in 2000. She sold it for $800k in 2005.”
Are you trying to suggest that 2000-2005 rates of home price appreciation are likely to soon repeat themselves? I note that this was possibly the five year period of greatest home price appreciation rates in U.S. real estate history.
I realize that lightning has been known to strike twice, though it doesn’t happen very often. Moreover, lightning strikes in successive periods of time are more-or-less independent; by contrast, history suggests that asset price movements shortly before and shortly after the end of a financial mania are negatively correlated.
She’s not saying that — more the converse, like, perhaps, how could she sit around the Thanksgiving table in two years if the house is worth $350k?
Uncertain, it sounds like they’re being fair, but somehow family deals always go sideways. At least for me, anyways.
“Also be prepared that if you sell the house for a decent profit in a short period of time, your siblings may get pissed even if they say they wont.”
Also be prepared that if you try to sell the house for a decent profit in a short period of time, only to discover that you can only sell for a loss, you may find yourself pissed at your siblings, even if you now think you won’t be.
Natalie is spot on regarding the risk of hard feelings in the family going forward, though it is unclear to me that real estate will always go up from here, as her post tacitly assumes.
I specifically stated in my post that prices could go either way. You know that I continue to rent. I just gave an example from personal experience.
Sorry to be such a housing price deflationist gloomster… it’s in my nature, I guess.
“That is, the place zillows for around 850K, but they said they would whack 150 off because they think it would be difficult to get that price and also because they believe it would be nice to keep the place in the family.”
Sounds like your brothers don’t trust Zestimates™ any more than I do. Why do they care about keeping that place ‘in the family’?
“Bottom line, with their discount and my third already in I would be paying around 450K for the place.”
This logic seems flawed. First figure out what your financial position (including housing alternatives) would be if you did not buy the place; then compare your position if you did not buy to what it would be if you did. Your mention of ‘…paying around 450K…’ implies that you are ignoring your ‘third already in’ when figuring out the purchase price.
“Any impressions about whether it would be a good idea for me to buy the place now?”
1. How would you finance the purchase?
2. Would you cut out the Realtor’s 6 percent and other closing costs by purchasing from your brothers?
3. The key advantage of your brothers’ offer appears to be that it would save you and them from the need to dispose of property at a time when prices are generally perceived to be ‘low.’ But if you are a regular reader here, you probably realize there is no guarantee that home prices will not go lower still from here; look at Japan’s twenty-year post-bubble-collapse decline in property prices as an example of how this can happen. Your brothers would be transferring the risk of ‘lower than expected’ future housing values to you, at a point when some major investors (e.g. Bill Gross) foresee near-term deflation. You should think hard about whether $150K off a questionable estimate of market value is sufficient compensation for assuming this risk.
“My brothers told me I could think about it for a couple of months, but will have to act or forget it after that. Thanks.”
I am always suspicious of any deal where the other parties are pressuring me to hurry up and act. What are they planning to do if you don’t act soon? If the arrangement appears to be mutually advantageous to you and your brothers, you might propose a plan to mitigate the risk of catching a post-$8K first-time buyer credit expiration falling knife: Suggest that you will settle the purchase price based on the Zillow price after some period of time (six months?) which allows the market to adjust for the expiration of the $8K credit, in order to mitigate the risk that home prices go down by ‘more than expected.’ If your brothers refuse, I would suggest exercising extreme caution before going through with a deal.
Based on experience with my family, if you want a continued relationship with your brothers, don’t buy the house. The is just too much chance for hard feelings to pop up in the future.
Thanks very much for your comments. Much to mull over. I really appreciate it.
To Stucco: yes, I believe that avoiding the 6% UHS commission figures into everyone’s thinking.
BTW, I like your handle, as many from lowly me on up to the lofty Fed chair seem to concur with the sentiment.
If you are still reviewing comments this is what I think…
First…The $150,000. “discount” is really not as much as it appears…$50,000. of this discount would be cost of sale if the property were sold to a third party…Of the remaining $100.000.. Thirty Three Thousand is already yours…That leaves then $66,000. which is the effective “discount” you are receiving which is roughly 5%…Bottom line for me would be, do I want and can I afford the house…I would not buy it because of what I consider marginal savings particularly if you are now saddled with keeping the “family house” into perpetuity…
If it were me I’d sell the house, split the money, and live where I actually wanted to live. Use the money to rent someplace you choose and don’t run the risk of being trapped in the old house.
Btw, prices are still too close to the peak in DC. Don’t expect that house to do anything but drop in value.
“I’d sell the house, split the money, and live where I actually wanted to live.”
That advice seems sound from the standpoint of minimizing the risk of hard feelings between siblings, but what about the six percent factor (6 percent of $700,000 = $42,000)?
The issue of where this house is situated versus where you would really prefer to live is potentially huge; figure out your ideal housing choice and compare it to how you feel about living where your brothers would prefer you to live. Would you be much better off somewhere else, from both standpoints of housing satisfaction and housing costs?
Perhaps the risk of selling ‘at a bad time’ is less a concern, as if you plan to reinvest the proceeds into a home purchase, then presumably you will perceive unusually low prices as a benefit from the buyer perspective.
That fee is something that will have to be paid eventually. IMHO, the value lost by holding the house will dwarf* the commission anyways.
* I just met a dwarf and now I feel guilty using that term.
Couple thoughts
Zillow is not overly accurate though house prices are currently trending lower in most places. Might be best to get an appraisal in the near term as a starting point.
Does the house need any major work for example a new roof, appliances, windows, siding, heating system, Etc? These costs, if they exist, need to be factored into your decision one way or another. Not knowing your relationship with said family members, there’s a potential that they might think you’re nickel and diming them if you attempt to negotiate the major repairs into the final price. From what I’ve seen, it’s generally not your immediate family members that squawk about the lowering of the final price, but instead their spouses.
Realtors get up to 6 percent in commissions if you and your siblings decide to sell the house and split the money.
Suspect you won’t see a lot of appreciation in the value of the house anytime soon thus minimizing future regrets by family members and their spouses.
Mortgage rates are extremely attractive for anyone in need of a mortgage. Suspect they’ll be low for awhile. There is a risk they’ll be higher in a year or two, but then again no one can say for sure where they’ll be. House prices generally drop when mortgage rates go up, however, the price drops tend to lag the mortgage rate increases.
“…trending lower in most places…”
But still upwardly biased…
“Suspect you won’t see a lot of appreciation in the value of the house anytime soon thus minimizing future regrets by family members and their spouses.”
Right, but what happens if there’s a $30k roof bill in two years?
‘Our Lottery mansion is just too big’: Why family are selling the dream home they bought with £8.5m jackpot. ~ UK Daily Mail
Five weeks after losing his job, Neil Chester won £8.5 million on the National Lottery. He and his wife Kate then did what everyone does when they hit the jackpot – they bought their dream house.
Within four months the couple and their four children were installed behind the huge electric gates of Semple House, an 18-acre spread in the town of Romsey in Hampshire.
They then proceeded to lavish money on their new property, almost doubling it in size and adding some basic necessities for Lottery millionaires, such as an indoor pool, sauna and cinema room.
When Neil Chester won £8.5 million on the National Lottery he and his wife Kate did what everyone does when they hit the jackpot- they bought their dream house
When Neil Chester won £8.5 million on the National Lottery he and his wife Kate did what everyone does when they hit the jackpot- they bought their dream house
They also called in renowned garden designer Diarmuid Gavin to redesign the grounds. But even as the finishing touches are still being put to the property, it has been put up for sale for £4.75million.
The Chesters are living proof that the reality of a multi-million-pound superhouse can fail to be as perfect as the dream. ‘You do the Lottery thing of having a massive house, but you don’t think about the stress that comes with it,’ says Neil, 34.
You don’t realise how expensive running it can be, and there are rooms we never use.’ As well as the practical challenges of keeping their extensive lawns mowed and house immaculate, the couple have found mansion life has its downsides.
‘I always wanted to stay at home and raise the children and be with them,’ says Kate. ‘In a small house you are always all together. Now I have to make a point of finding them – we don’t even watch TV together as we are all in different rooms.’
Before they won the Lottery in 2007, Neil and Kate, 33, were living in Neil’s native Guernsey with their four children – Elliot, Owen, Max and Niamh – who are aged between four and 13.
Neil was an IT manager for a hedge fund, while Kate was a stay-at-home mum. Money was tight and the couple were struggling to renovate a modest townhouse they had bought on the island.
In fact, the house was in such a state – a wreck was all they could afford – that Kate returned to the UK with the children to stay with her father while Neil, who moved in with his mother on the island, tried to get the house shipshape enough for his young family.
Then, in the August, Neil was made redundant. He rejoined his family in Kent to lick his wounds. But two weeks later he bought five Lucky Dip Lottery tickets and on September 5, 2007, the couple found themselves instant millionaires.
Their dream house hunt led them to Romsey because it was close to Kate’s mother and, in January 2008, they spent £1.8million on Semple House. The cedar-clad property was built by a Royal Navy admiral who had been deeply impressed by the Gone With The Wind beauty of the Colonial houses in Williamsburg in the US while on duty there.
When he returned to Southampton, he built a replica of his favourite one. By the time the Chesters bought the four-bedroom house it was rundown, but by October 2008 they had planning permission to increase its size from 6,400 sq ft to 11,000 sq ft, adding a new wing in the process.
‘The idea was to add value,’ said Neil. ‘We were thinking about maybe moving to New Zealand at some point, or perhaps to another part of the UK. We weren’t really sure. So we always had saleability in mind.’
Innovations included a new stable block, despite the fact that the couple don’t ride, and a gym, even though Kate prefers to attend classes at a local health club. A dovecote was added to the roof of the new wing but, like the stables, it remains empty.
The main house has been reconfigured so it now has five bedrooms, three reception rooms and a huge kitchen/ living room. As well as the gym, the two wings give space for the pool, a games room, family room, cinema and rooms that can be used as a self contained two-bedroom flat.
The children love the games room and the family love the cinema, while the kitchen has become the heart of the house. But the airy dining room has been used just once, to host their niece’s recent 21st birthday party, and the drawing room is like the Mary Celeste.
The grounds, transformed by Gavin into an elegantly rolling expanse of grass leading down to a new lake, have not proved a hit with the children. ‘They tend to stick to playing on the patio and don’t really want to go exploring out there unless they have friends with them,’ said Kate.
The other issue is the enforced seclusion of living at the end of a private road, behind electric gates and with signs warning of patrols by fierce guard dogs. The couple have owned the house for two-and-a-half years but remain on no more than nodding terms with the neighbours, preferring to spend their time with family and old friends.
‘We are sociable and we always used to have people popping over all the time,’ said Kate. ‘This isn’t the sort of place where people pop in, and it’s not as if we can chat over the back fence.’ Sebastian Clarke, of selling agents Winkworth, thinks the house may go to a well-known buyer, attracted by the privacy and space.
‘Anything very unusual sells quickly at the moment and this is certainly unusual. Gordon Ramsay, Sir David Frost and Charlie Dimmock have houses in Romsey and this will appeal to someone of their ilk,’ he said.
While they wait for a buyer, Neil and Kate are considering what to do with their lives. Staying in Romsey is an option, but moving to New Zea and also appeals. And Neil is keen to get back to work.
‘I want my children to see me working and not just hanging around,’ he says. Their new property, wherever it may be, will definitely be a lot more modest – in Lottery-winner terms at least. ‘I think a 6,000 sq ft place would be perfect,’ says Neil.
“Five weeks after losing his job, Neil Chester won £8.5 million on the National Lottery. He and his wife Kate then did what everyone does when they hit the jackpot – they bought their dream house.
Within four months the couple and their four children were installed behind the huge electric gates of Semple House, an 18-acre spread in the town of Romsey in Hampshire.
They then proceeded to lavish money on their new property, almost doubling it in size and adding some basic necessities for Lottery millionaires, such as an indoor pool, sauna and cinema room.
They also called in renowned garden designer Diarmuid Gavin to redesign the grounds. But even as the finishing touches are still being put to the property, it has been put up for sale for £4.75million.”
Filed under ‘ways foolish housing investments can turn a large fortune into a smaller one’…
Dude, if *I* won the lottery, I’d think of upgrading my current space to a maximum of 3000 square feet*. 11,000 square feet for a single family is ludicrous.
*That would double the size of the current house. Part of such an upgrade would be making the kitchen bigger than the 88 square feet it is currently.
I wish I were joking with that number– my husband has discovered a love of cooking and after tasting the results, I want to give him every encouragement possible.
wanna see what 15,000 sq ft loft looks like in tribeca…
http://newyork.craigslist.org/mnh/reo/1885694378.html
Innovations included a new stable block, despite the fact that the couple don’t ride, and a gym, even though Kate prefers to attend classes at a local health club
I told a few years ago about the TX lottery winners I met when I needed an upholstery job (July 2000). The shop was a large metal warehouse on the new bypass outside Rockport TX.
The upholsterers were a family of little grizzly wizened hillbilly types, working in a plastic-sided cubbyhole in the corner. I had just called from the road, but though they knew I was coming, their ferociously barking and growling pit bulls came on the attack - they sounded ready to chew off my legs; I almost peed myself. The gnomish older lady said “they’re sweeties” and indeed when they reached me they calmed and gently snuffled around my ankles.
They gave me a good deal on my job. I walked outside with the daughter, who I had met in an upholstery supply shop the day before. She was the more “presentable” member of the family who dealt with decorators and supply shops.
She told me that her family had always worked for upholsters and hated it. Then they won the lottery. They bought some valuable land and had the warehouse built, so they could open their own upholstery business. Their building was large with garage doors to accommodate vehicles, boats, and small planes.
They were happy and proud of their business and their building. It was a few days before 4th of July and she informed me that they would be watching the fireworks in Corpus Christi from the best vantage point in town - they had become patrons of the Art Museum (or perhaps the Aquarium) so that they could attend the high society 4th of July Fireworks Gala just across from where they are shot off.
That’s the way to do it, Chesters!
Bank of America ‘Secret’ Short Sale Program | New BoA HPO Short Sale Program
Submitted by Tim Harris on August 6, 2010 – 10:25 am26 Comments | Popularity: 3% [?]Breaking News….
Bank of America is testing and will soon have a national roll-out of a new program that will revolutionize the short sale process.
This new program is called HPO Short Sale. (We know the ‘H-P’ stands for High Performance but, as of this post we still don’t know what the ‘O’ represents.)
Listen NOW to the Emergency Harris Real Estate University and Bank of American HPO Short Sale Teleconference…..all the details about this new program are uncovered. <———CLICK HERE TO LISTEN NOW!
Watch the video of Part 1:
Let me be clear, this new Bank of America HPO Short Sale program is what Harris Real Estate University has been an advocating for years. HREU has been pushing for stream lined short sales for well over 5 years. HREU is the original Realtor short sale training source. When you are ready to go beyond the basic short sale designation and training…when you are ready to build a true short sale business…watch this FREE Accredited Short Sale Designation (ASD) and download the FREE Short Sale Guide Book.
Needless to say, we are very excited about what this new HPO Program will mean to our industry.
Here are the details:
(Remember, this program is being quietly introduced, using only a hand-selected group of top short sale agents across the country. HREU will publish any additional information about this new program the second we get it…stay tuned to this site!)
* 6% commissions
* Every short sale seller and agent will be assigned a personal advocate who will shepherd the short sale through, using the new, simple process. Think of this as your own ‘short sale personal representative’.
* No pre-qualifying, no hardship required. Being upside down in the house IS the hardship.
* No documentation.
* No bank statements.
* No tax returns.
* No financial worksheets.
* No deficiency judgement.
* No financial contribution from the seller of any kind will be requested.
* Only requirements? -A listing contract -A purchase contract -An appraisal, though we’ve been told the appraisal will not have an adverse bearing on the final acceptance.
* 2 WEEK approvals.
Listen NOW to the Emergency Harris Real Estate University and Bank of American HPO Short Sale Teleconference…. all the details about this new program are uncovered. <———CLICK HERE TO LISTEN NOW!
More info will be released soon…
Adventures in homeownership
Convergence of events: Last week, we got a knock on the door. It was a water district representative telling us that they’re installing water meters on our street. When he saw my appalled look, he said that many people found that their bills went down when meters are installed. Cue hysterical laughter. I don’t know where he’s getting his information.
Near the same time, I went to mow the backyard. Hmm– that patch of lawn is suspiciously green and healthy. (I am not exactly in favor of heavy lawn watering.) And look, the ground goes squish… ooh, broken sprinkler pipe! Exciting!
Further information: Our sprinkler setup, in three parts, has several busted heads and the wires were disconnected long before we looked at the house. This wasn’t a huge problem since the landscaping is overgrown enough to make the installed system work poorly; we just didn’t turn anything on pending getting the heads cleared and repaired. But now we have to call someone in for repairs* and we may as well get the whole thing fixed.
Just what we didn’t need.**
*We can fix a lot of things around the house. This is not one of them for overly long and detailed reasons.
**One of the very first pictures I took with my digital camera was the fountain of water that shot up outside our apartment window one day from a busted head. Mind you, we were on the second floor, and the water went up past the roofline. Pretty impressive.
It was a water district representative telling us that they’re installing water meters on our street. When he saw my appalled look, he said that many people found that their bills went down when meters are installed.
My (now ex’s) parents had the same issue. When a meter got installed, their water bill was HUGE. Turns out they had some leaks they’d never noticed…got them fixed and got the municipality to knock down the bills…
You know this is a pet peeve of mine……landlords bitttching to high heaven about their water bills.
If you figure my landlord pays around $1000 a year for 2 apartments….wow that’s a lot
but break it down that’s about $3 a day ..since he is not here a lot that is about $2 a day for me for clean water and sewer….
Hah hah — housing market manipulation appears to have its limits — even for the omnipotent Fed!
* The Wall Street Journal
* AHEAD OF THE TAPE
* AUGUST 9, 2010
Fed Must Beware Public’s Deflationary Mindset
By DAVID REILLY
Inflation and deflation are a lot like baseball, at least considering Yogi Berra’s saying that “90% of the game is half mental.”
Besides keeping watch on the actual rate of inflationary change, the Federal Reserve must closely monitor expectations about the direction of prices. That is because those views often become self-fulfilling prophecies.
With the Fed meeting Tuesday, the danger at the moment is that a deflationary mind-set is taking hold. Friday’s employment report, which showed anemic gains of just 71,000 private-sector jobs, only adds to such worries.
This week’s meeting is likely to feature further debate over whether the Fed should renew extraordinary measures to kick-start growth. These may include resuming purchases of Treasury debt or mortgage-backed bonds, likely, at least to start with, by using money generated from existing holdings of such debt as they mature.
It is unlikely the Fed will feel compelled to act this week. But there is a growing belief in markets that a second round of so-called quantitative easing is likely at some point.
While the first round, via $1.7 trillion of debt purchases, helped arrest the housing-market nose-dive, additional measures carry risks. One is that talk of more easing creates, at least in some cases, deflationary pressure of its own.
One place this can occur is in housing. Average rates for a 30-year mortgage fell last week to 4.49%, according to Freddie Mac, the lowest rate since the 1950s. Now, talk of more Fed easing may stoke expectations of even lower rates among homeowners looking to refinance, or potential home buyers.
If so, that could cause them to hold off in hope of getting even better deals. That is classic deflationary thinking. And in housing markets, the prospect of rising rates, not falling ones, has typically speeded sales as buyers look to buy before mortgage costs increase.
As it is, already-low home prices coupled with low rates haven’t done much to revive housing, especially following the expiration in April of the home buyer’s tax credit. In June, pending sales of existing homes fell 18.6% from a year earlier.
It just goes to show that, even for the Fed, doing more isn’t always as easy some would think.
http://ahead.bankofamerica.com/empowering-consumers/bank-of-america-home-loans-improves-short-sale-process-for-homeowners-and-real-estate-professionals-2/
We are also piloting a cooperative short sale program that includes proactive outreach to customers who have been unable qualify for a home retention solution, or have fallen out of a workout program, to measure their interest in a short sale. The property will be listed at market value, and Bank of America will work with the customer and agent throughout the marketing period. If an offer is received, we will be in a position to approve the sale within two weeks. This program is currently in a limited pilot stage, and we hope to expand it soon.
——————————————————————–
Bank of America ‘Secret’ Short Sale Program | New BoA HPO Short Sale Program
Submitted by Tim Harris on August 6, 2010 – 10:25 am
Let me be clear, this new Bank of America HPO Short Sale program is what Harris Real Estate University has been an advocating for years. HREU has been pushing for stream lined short sales for well over 5 years. HREU is the original Realtor short sale training source. When you are ready to go beyond the basic short sale designation and training…when you are ready to build a true short sale business…watch this FREE Accredited Short Sale Designation (ASD) and download the FREE Short Sale Guide Book.
Needless to say, we are very excited about what this new HPO Program will mean to our industry.
Here are the details:
(Remember, this program is being quietly introduced, using only a hand-selected group of top short sale agents across the country. HREU will publish any additional information about this new program the second we get it…stay tuned to this site!)
* 6% commissions
* Every short sale seller and agent will be assigned a personal advocate who will shepherd the short sale through, using the new, simple process. Think of this as your own ‘short sale personal representative’.
* No pre-qualifying, no hardship required. Being upside down in the house IS the hardship.
* No documentation.
* No bank statements.
* No tax returns.
* No financial worksheets.
* No deficiency judgement.
* No financial contribution from the seller of any kind will be requested.
* Only requirements? -A listing contract -A purchase contract -An appraisal, though we’ve been told the appraisal will not have an adverse bearing on the final acceptance.
* 2 WEEK approvals.
“Bank of America ‘Secret’ Short Sale Program”
Is that even legal at a public company? I doubt it…
“Indeed, the Fed from early 2009 to the program’s conclusion on March 31, 2010, bought some $1.3 trillion of Treasury bonds, Fannie Mae and Freddie Mac mortgage-backed securities and agency debt with dollars essentially created out of nothing.”
I dispute this oft-repeated notion that the Fed can wave a magic wand and create wealth out of thin air. Someone has to pay for freshly created liquidity; otherwise, why would counterfeiting be illegal?
Feature
SATURDAY, AUGUST 7, 2010
Time to Print, Print, Print
By JONATHAN R. LAING | MORE ARTICLES BY AUTHOR
We have to embrace quantitative easing in order to avoid the kind of economic stagnation that’s plagued Japan.
FED CHAIRMAN BEN BERNANKE’S recent testimony before Congress was fairly pallid. He described the current economic outlook for the U.S. as “unusually uncertain.” (When isn’t it?) Growth in gross domestic product seems to be flagging some, but Bernanke implied the Federal Reserve wouldn’t be reaching into its bag of monetary tools unless the economy were to double dip into recession or financial markets turn unruly again as in 2008.
That’s a mistake. The Fed should, and probably will change its tune by the fall and fire up the printing presses. Its current stance of watchful waiting in the face of slowing economic growth, inflation cycling below its preferred target rate of 1.7% to 2% and naggingly elevated unemployment strikes some observers as nothing short of mind-boggling. With good reason, these critics are pushing the Fed to adopt the deflation-fighting strategy that Bernanke mentioned in 2002, when he was a newly minted Fed governor. He suggested that the Fed could always buy long-term government bonds and corporate debt to mainline more liquidity into the financial system to counteract incipient deflation.
This approach has come to be known in financial circles as “quantitative easing,” though the tactic rarely has been employed. The Bank of Japan tried it with mixed success early in this decade, and it became a centerpiece of both U.K. and U.S. monetary policies during the 2008-2009 financial meltdown. Indeed, the Fed from early 2009 to the program’s conclusion on March 31, 2010, bought some $1.3 trillion of Treasury bonds, Fannie Mae and Freddie Mac mortgage-backed securities and agency debt with dollars essentially created out of nothing.
…
Small wonder the fat cats are all loading up on Treasury bonds!
Fed Easing Debate Intensifies as Economic Data Point to Slowing Recovery
By Daniel Kruger - Aug 6, 2010 12:47 PM PT
The Federal Reserve may return to “unconventional” monetary stimulus as early as next week’s policy meeting as the U.S. economy continues to lose momentum, according to Goldman Sachs Group Inc.
The firm lowered its forecasts for gross domestic product and raised its estimate for the jobless rate as growth slows and the “reacceleration in U.S. output” expected for 2011 is made more doubtful by “heighted Congressional resistance” to additional fiscal stimulus, Goldman said in a note today.
The Fed is likely to begin with reinvesting the proceeds from maturing securities in its existing portfolio of mortgage- backed debt in other debt instruments, Goldman economists said. The measures could also include asset purchases, such as Treasuries, or a more “ironclad” commitment to low short-term policy rates, Goldman said. The central bank’s policy-setting open market committee meets Aug. 10 in Washington.
“This would be a ‘baby step’ in the direction of renewed unconventional easing, although it would probably be packaged as a decision to prevent a gradual tightening of the overall stance,” analysts led by chief U.S. economist Jan Hatzius in New York said.
Policy makers bought $1.7 trillion of mortgage and government debt from March 2009 through March of this year to keep borrowing costs low while the economy recovered from the worst recession since the 1930s. Should the central bank decide to resume purchasing fixed-income securities it would buy “at least $1 trillion,” they said.
…
Potentially huge economic problem caused by current policy regime at the Fed:
Rather than investing in projects which they judge to be economically profitable, investors are tempted to allocate their portfolios towards whatever asset class they believe the Fed is likely to support.
Malinvestment on a gargantuan scale is a likely consequence.
It’s reminiscent of the Soviet central planning debacle.
Those in charge truly believe they know what’s best for everyone. When things are going badly, they cannot help but move towards a centrally-planned answer, because a large part of the reason they are at the tops of these huge organizations is the deeply-held belief that they do know best.
“It’s reminiscent of the Soviet central planning debacle.”
My concern, exactly. The idea that the Fed or other body of central planners will wisely pick winners and losers in a manner which best serves long-term American prosperity is ludicrous.
Certainly the Smartest Guys in the Room realize this folly?!
They can’t see it. The lens through which they view life, the one which allows them to rise to the top of these gargantuan organizations, also blinds them to other things, which “the little people” can see.
In preparation for the end of Bush’s tax cuts, I am eager to sell my dividend stocks before the end of this year. I’m thinking of value stocks with a price/book ratio of less than 1, P/E of 15 or less, yield of less than 1%, and market cap of $5b or more. Using that criteria, I dug up three: RIG, MU, and LNC. They are worth watching the next few months, IMO. I’m thinking LNC may be a good long term hold, as I’m wanting to hold it for more than ten years (until the socialism is reversed in the next pendulum swing of politics). Strategy is steady growth with low or no taxes on the “hold,” no capital gains taxes as long as I hold through the socialist ordeal.
Comments? suggestions?
Just heard from me loverly wife that my gainfully employed BIL cannot buy a house because he cannot get a loan. Apparently he even offered to put up a large downpayment as part of his offer on one home, and no bank would loan him the rest of the dough.
Based on this anecdote, I am guessing Wasatch Front housing may be in for a big crash (or should I say ‘even bigger crash’?)…
How is it again that you spell SUBMERGING?
Emerging Markets Report
Aug. 8, 2010, 7:40 p.m. EDT
Chinese banks reportedly face wave of bad loans
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — China’s banks could see as much as 20% of their loans from state-controlled firms go bad, a report said Sunday, even as the nation’s banking regulator said non-performing loans were on the decline.
Recent stress tests conducted by the China Banking Regulatory Commission (CBRC) showed 20% of all outstanding loans to state-owned companies were “in trouble” as of the end of June, the Japanese business newspaper Nikkei reported, citing an unidentified CBRC official.
The official was quoted as saying the loans failed to meet lending standards and could result in default, although “the risks are still manageable, and the loans are not seen as non-performing.”
…
How many homes does the average Chinese citizen own?
Aug. 8, 2010, 8:25 p.m. EDT
Some China banks halt third-home mortgages: report
By China Bureau
SHANGHAI (MarketWatch) — Some banks in Beijing and Shanghai have voluntarily stopped issuing mortgages for purchases of third homes, the Shanghai Securities News reported Monday, citing industry sources.
Beijing allowed banks to stop issuing loans for such purposes in parts of the country in mid-April.
Industrial & Commercial Bank of China Ltd. (1398.HK) and Agricultural Bank of China Ltd.(1288.HK) have stopped issuing mortgages for third homes in Shanghai, and other banks in the city are expected to follow suit, the paper said, citing property agents.
The paper also cited Xia Bin, an adviser to the People’s Bank of China, as saying the government’s policies on the property market announced in the first half shouldn’t be changed as they are preventing overly fast price rises in parts of the country.
* FEDERATION FEATURE
* AUGUST 6, 2010
U.S. Debt Load Among World’s Worst
Social Security and Medicare will break the bank.
By NICOLA MOORE
From the Heritage Foundation
This year, the U.S. public debt is projected to reach 62 percent of the economy—up from 40 percent in 2008 and nearly double the historical average, according to recent Congressional Budget Office (CBO) estimates. The financial crisis and recession drove much of this debt swing, yet larger problems loom in the future.
By 2030, the CBO projects that debt will more than double to 146 percent of GDP.[1] The only good news, if it can be called that, is that the U.S. is not alone. Two recent studies by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) highlight the significance of the global debt challenge and stress the need for governments to aim higher than short-term deficit reductions. For the U.S., one of the most poorly positioned countries, addressing the long-term debt challenge must include prompt reform of Social Security, Medicare, and Medicaid.
…
* LETTERS
* AUGUST 9, 2010
Golden State Is Better Than Its Government
Troy Senik, in his review of Joe Mathews and Mark Paul’s “California Crackup” (Bookshelf, Aug. 6), makes the common mistake of confusing the state of California with its government. The state government, not the state itself, is “imploding.” Certainly, the two are related and certainly the economy of the state, like those of other states, is fragile. But the state’s economy is among the top 10 largest on Earth and still kicking out gushers of production.
The effect of the “crackup” will be much less on the state at large than on two distinct groups. Either the over-benefitted public sector retirees are going to face Enronesque pension disappointments, or the bondholders foolish enough to lend money to the irresponsible folks in Sacramento are going to get Chryslered.
To those who advocate the bailing out of the unionistas and Wall Street bondholders with tax increases: I would not attempt such a bamboozle in the forseeable future unless I had a second home offshore in a privacy-loving jurisdiction, perhaps Spain.
John Rogitz
San Diego
“Chryslered”
LOL!