Bits Bucket For August 9, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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S. Fla. home values remain depressed
South Florida Business Journal
The Miami-Fort Lauderdale metropolitan area continues to struggle under the weight of the housing crisis, with home values falling 15.2 percent, year-over-year, and 6.6 percent, quarter-over-quarter, according to the latest Zillow Home Value Index.
The report found home prices in the Miami-Fort Lauderdale area lost more than half their value (52.4 percent) since the peak of the housing market, falling to $146,500.
Nationwied, home values fell 3.2 percent, year-over-year, and 0.6 percent, quarter-over-quarter, to $182,500.
I was in Miami Dade/Broward and you wouldn’t know prices are falling. Looking in Hollywood marginal areas are pressing low $200k for dumps built in the 50’s that need tons of work.
But they are in Tucson. This story’s from today’s fishwrap:
South side hit hardest by housing-value drop
BTW, the South Side is our gang-banger hotbed. Not a place that a lot of people would seek out when they’re looking for a place to live.
I’ve noticed that total inventory around Syracuse is bloated but its all in the sub $100k homes. This is very different than what I think we had discussed and what I believed would happen. I’m interpretting the reason as the nickle and diming of NY state taxes and fees pushing people that were already on the edge financially out to other locales. But I”m not sure what area you turn to when the $75k home is something you overpaid for. There just aren’t that many rentals in this area. I think I probably mentioned we’re paying $500/mo more in rent than my piti on the last house and its no where near as nice.
Another thought: Anyone in trouble in a more expensive home is probably sophisticated enough to know they don’t have to pay for a while and no one will come after them. The lower income just might feel they have to get out before they’re thrown out.
On a related note, I have an old friend whose house is up for sale in New England. She’s heading to Florida.
Those Tucson comments are good reading too.
low $200k for dumps built in the 50’s that need tons of work…..
everyone has dreams.
is anyone stupid enough to pay that price? are any SELLING????
Sad part is they are selling in Miami Dade and Broward, it’s unbelievable.
In SW FL homes no longer seem to moving, this was timed with the oil spill in the Gulf. You can still find many homes well under 100k that need about 10K in work.
S. Fla. home values remain depressed. Really? is that right?
How about S. Fla. home values remain overpriced? Isn’t that more like it?
I have written before about the pavlovian nature of economists and forecasters, based on the results of having a Federal Reserve money printing system. Prices go up with inflation which goes up with increases lending and money creation. It always goes this way.
That’s how it works. Housing prices always go up, too, with the “model”.
Now, we are in a collapse, and the usual moronic voices chime in to let us know how things are “supposed to be”. Not gonna happen.
House prices are too high and sales indicate this is true.
I really wish media had intelligent people that weren’t advocates for some agenda. If this was a real story. It would simply state the avg/median house price and let us decide for ourselves whether prices were “depressed”……..an opinion, masquerading as news.
I was in Florida last week. Construction on the low-end has resumed, for some strange reason.
And sub 200K houses are selling. But many of the McMansions they built three years ago are sitting empty.
I visited a friend in one Orange County development, “Independence”, just north of Walt Disney World. Houses that sold for $300K a couple of years ago now sell for $190 and are, for the most part, occupied.
But a stretch of giant lake-facing houses are sitting empty.
Because with FHA lending guidelines, you can get into a $100K to $400K (depending on the county) home with 3% down. With seller concessions they might be crediting that 3% back to you on the HUD, so you might not put anything down. Homes over FHA lending guidelines require 20-30% down (often 30%) and 6 months in reserves. With 44% of Floridians underwater, who has that kind of cash for a downpayment/reserves. My prediction has been that homes under FHA guidelines will stabilize and anything over will continue to sit stagnant and continue to decline in value.
I think Florida is now in a death-sprial and will continue to decline for years to come (with the exception of a pocket or two here and there on some exclusive island, etc.)
For one thing, having empty houses nearby is a nuisance. They’ll get vandalized, burned down, or filled with squatters. And there are a LOT of empty homes. A few boarded up homes on a block and nobody will want to move to that block.
So do I. But remember, most of MSM is owned by just 6 companies and confusion creates churn.
Has the issue been resolved yet (by the courts/banks/government) of who actually has the right to foreclose, and what is sufficient documentation, when the mortgages are sliced and diced and bundled into different CDOs? I recall a judge in Ohio a couple years ago at the start of this mess not allowing foreclosures to proceed with the paperwork the finance companies had, and I seem to recall this problem being part of the reason argued for why we “needed” TARP.
I don’t think this was ever an “unresolved issue” from a legal sense. You have to prove who actually owns the mortgage (and that all the transfers of ownership of the mortgage were properly done) and that the person bring the foreclosure proceeding either is the owner or has been given the right to act on the owner’s behalf. Now the practical issues behind establishing all this if the paperwork was not handled properly are a whole other matter. Could be very difficult. But the law is not the issue.
Oh, and you have to prove the borrower is actually in default for however long is required by the documents and perhaps local law to allow foreclosure as a remedy, of course.
There’s a summary of some court cases involving MERS at
http://en.wikipedia.org/wiki/MERS
David Reilly in today’s Wall Street Journal writes: “Fed Must Beware Public’s Deflation Mindset.”
“Besides keeping watch on the actual rate of inflationary change, the Federal Reserve must closely monitor expectation about the direction of prices. That’s because those views often become self-fulfilling prophecies.”
I say bring it on. Deflation would be a wonderful thing.
I’m sure once again though that savers will be screwed by the “deflation is bad” mindset leading to yet more QE.
That’s because those views often become self-fulfilling prophecies.”
Really? How much has the price of a cup of coffee deflated at Denny’s in the last 5 years?
At what velocity does this item cause deflation?:
http://b.saaraa.com/wp-content/uploads/2010/03/rd-sign-e1267828047806.jpg
For me, a cup of coffee has gone down at my favorite watering hole, but not as a result of deflation, but because now I get a senior discount!
F* the prophecies; prices will align to incomes.
Of course this is what the banksters fear, since their loans used unsupportable prices as security.
Bingo
prices will align to incomes ??
And interest rates…The double Wambo-Mambo…Falling income and rising rates…
In my 30+ years as a working adult, I have never seen the cost of living actually “align” with incomes.
And until there is rioting in the streets, you won’t either.
In fact, where I live, I have seen 50% inflation at the grocery store and 10%+ increase in almost everything else, except of course, RE.
Well ecofeco, we are pretty close in age I suspect…I bought my first piece of real estate when I was 22 years old together with my parents…It was a duplex and I moved into one side…After I got married @ 26, I sold the duplex and bought a house…Single income household and I did not have some mucky-muck job either…Point being, there was a time “long ago” when incomes did align with the cost of housing so I would have to politely disagree with you…
Curious SC Dave, did that time coincide with a different soft time in real estate? It seems like in CA, there are brief moments in time where housing is pretty close to comparable to renting, only to be shoved out of whack again with small improvements in the market.
Rents are much more closely tied to incomes than home prices.
I wasn’t talking about just RE. We don’t live in compartments where one thing doesn’t affect another thing.
And the cost living is more than just shleter.
This is last week’s news (sorry if its a repost).
IBM sold $1.5B in 3Y bonds at 1%, even though its stock is paying a 2% dividend yeild.
(Link: www businessweek com/news/2010-08-03/ibm-bond-sale-signals-strengthening-debt-rally-credit-markets.html)
Sounds like some big money is preparing for deflation.
yeild=yield
I would bury my money before getting 1%.
So…. you’d take 0% over 1%… not to mention risk of gophers eating it??
yep.I would put it a secure box.1% is a slap in the face.
“So…. you’d take 0% over 1%… not to mention risk of gophers eating it??”
GOPhers…GOPhers…Ooops !?!
Grabs shovel and makes a beeline to fencepost #12 in the south forty while screaming “Damned “GOPhers”
i have been slowly pulling my “savings” out of the credit union.
making them give me $5000 cash every month.
the return they offer is nothing. the risk i take is high. i’d rather have the cash in boxes at home. screw the FED and the Banks and their 1% return and 18% borrowing rate plus FEES. Lots and lots of fees and assessments.
Screw them all.
They can’t lend without deposits and they have treated depositors like crap for 10 years. (thank the FED) Let’s take our money out.
Pay cash. End their game, especially the big banks.
if you have money in big banks, remove it. tell them you want 7% minimum for the money.
+1 Diogenes. I like your anger. I’m TIRED of responsible people paying for someone else’s greed.
Do the banks really need our deposits? Seems like the fractional reserver lending system has become a closed loop between the banks & the federal reserve. Borrow @ zero, invest in treasuries at zero+x, then profit risk free. Who needs those dirty nasty customer deposits anyway? WIthout customers to worry about and keep track of, think of the increased profit margin by firing nearly all of the bank employees!
After all the fees and such, yes Timmy Boy, 1% is losing money and you are much better off with it nearby, quickly accessible and liquid.
“i’d rather have the cash in boxes at home.”
just make sure a few months from now those bill will still pass the UV light test when you try to use them. not only that you might lose them, you could also end up having a visitor from the secret service.
I think deposits have historically been the best source of capital for banks–they may not “need” it, but they sure love to have it. Can’t disagree with the sentiment (pulling money out of banks). At a minimum, pay attention to fees and aggressively fight for lower/no fees.
I personally have gravitated toward Schwab Bank. Sure, they pay me nothing in terms of rate, but:
1. They reimburse me for any third party ATM fees (which means I can take money out from anywhere, even cash machines in Vegas–they reimburse those ridiculous fees as well);
2. No checking fees; and
3. Free online bill pay
Don’t know what their minimums are, but if my choices are 1. Readily available cash with no service, no interest, and the small probability of theft (depending on where you hide the money); or
2. Cash with service and no interest, but lower probability of theft
I take #2.
For what it’s worth, my partner borrowed money from Schwab for a home loan–they ended up being very competitive and gave him the best rate as well. It may have helped that they saw a large part of his financial picture and probably realized that he was a stellar credit risk.
(Disclaimer, I don’t work for Schwab, but quit use of Wells and a credit union long ago).
Their choice is inflation or deflation with default.
The debts cannot be paid, in either case.
Good luck to Wall St., trying to sell Main St. the idea that deflation is bad.
Guarantee if you took a random poll of 100 people, at least 80%, and probably closer to 95%, would state that “deflation” is bad; repeating the mantra being constantly put out by the MSM.
(Of course if you asked if “lower prices” are bad - then 80-95% would say no. It’s all in how you phrase it. The government/Fed can’t use “lower prices” as justification for stimulus though - they can use “deflation”.)
Guys, you all beyotch about the economy and what the hell we are going to do and express angst about the economy.
This is deflation and mild deflation at that.
Deflation comes in two flavors; manure and feces. You get either fast deflationary spiral and massive economic shock OR you get the exciting muddle through with drawn out defaults, bankruptcies and extended unemployment.
It will not get any better than this in deflation.
The 1800’s, with 51% deflation over a 100-year span, would beg to differ.
Deflation is akin to sobriety. We’ve become so alcoholic - addicted to inflation - that the prospect of sobriety now is horrific. And sure enough - the times that we do experience deflation (e.g. during the GD) are painful. But not because of the deflation itself. The deflation is just a symptom of the underlying re-allocation of previously mis-allocated resources. The housing market 1997-2010 is a perfect example actually.
Do you think we’d have been better off if housing prices had not deflated - and instead remained at 2007 highs?
I’ll state this - we certainly would have been better off - in the short run. In the long, run - not so much.
Inflation benefits debtors. That includes governments of course. The debtors pay off their debts over time with ever-cheaper dollars.
Deflation benefits savers. The cash they have accrued gains value (it can buy more) over time. Debtors on the other hand have to pay their debts with ever more precious dollars, and they have fewer of them each year.
So, if the majority of Americans are debtors, then for the majority deflation is indeed bad.
Got cash?
So, if the majority of Americans are debtors, then for the majority deflation is indeed bad.
I doubt very seriously the majority of Americans are debtors. If so the home equity rate for instance would be far below its current level of 38%. Per other info on this thread about 20% of mortgages are underwater - that means that 80% have positive equity - and that doesn’t include people who have a paid-off house.
Nevertheless if the majority of Americans are debtors your statement that deflation would be bad assumes a static situation. If the deflation causes people to change their lifestyles to become savers instead of debtors, that’s a good thing.
If you have a mortgage, no matter how much equity you have, you’re still a debtor. And deflation will most likely cause a change in lifestyle but it doesn’t change the fact that the debt is paid off in ever-more-precious dollars.
Though dollars across society are “ever more precious”, each given person still generally has more of them over time during the course of their life, due to savings and raises; at least until retirement when they begin drawing down savings.
Even though in a deflationary environment dollars become worth more over time - it doesn’t do one much good to stash them away forever. They’re worth absolutely nothing if they’re not actually spent.
It’s all in how you phrase it.
“I’m all for lower prices in housing - just not in my housing”
Well let’s see…..are most people savers or debtors?
I think the debtors are in the majority. For them, deflation is bad, perhaps even a hole some will never quite recovery from.
When an economy is expanding, managed debt is a required tool. When we’re going in reverse it can become a granite stone around your neck.
I need to get back to real world problems of my own, but before leaving this afternoon, i thought i’d add to the discussion.
INFLATION/DEFLATION. (i’ve made these comment before).
This is a result of the Central Banking system that allows a privileged few banker families to make vast billions of dollars dealing in “currency and lending”, while playing the markets with our money.
The natural state of capitalism is DEFLATION. Prices always get cheaper as better and more efficient ways to make products are introduced. Prices should not be rising except during times of war, famine, or government intrusion.
The FEDERAL RESERVE and the US Congress create “INFLATION” by stealing our money and printing money and diverting it to various programs that have no productive uses. (entitlements).
As was pointed out, under the previous gold standard with gold and silver money, prices changed very little over time. They went ballistic after getting off the gold-standard and allowing the dollar to be a true FIAT (whatever we say it is worth) currency.
This allowed the “Game” of creating constantly inflating prices, supporting debtors and destroying savers that we have seen since 1971, when the game got to a big lift off. (margins).
Things really got going under CLinton with the removal of Glass_steagal, restricting banking margin bids to 12 to 1. (free money), and extending them to as much as 40 to 1. (leyman bros.). This stupid marginalized casino gambling hit critical mass under Bush, with the housing bubble collapse, followed by the banking collapse. (Banks are broke. we just took their debts).
Now it’s over. The gamblers can’t cover their bets. They never had enough income to pay the debt service and the entire country (less some of us) is in default.
The FED is trying to pass the loses of the gamblers onto the “savers” through continued inflation. It is a sham and will destroy the credibility of the Treasury and the currency.
DEFLATION will occur because there isn’t enough money in the universe to cover all the bad bets made in the last 10 years.
It’s deflation, or the destruction of the dollar. Just look at Japan. 20 years of “stimulus spending” and government bailouts.
Prices always get cheaper as better and more efficient ways to make products are introduced.
No, COSTS get cheaper. Prices rise to what the market will bear. Therefore prices expand to fill the credit available. This is why few of us can live the old grandparent-cliché of paying cash for everything.
And how does this model account for globalization? If you spread 300 million people’s worth of wealth over 1.5 billion people, you gotta print a lot of money just to make those 300 million whole with even a basic standard of living.
Prices get cheaper.
E.g. cost of an average microwave oven in the 1980’s was about $400. Now they’re about $200. And with more features.
Same for computers, TVs, etc. Even cars to a great extent - the only reason cars cost more today is because they have way more features (including many unseen ones like safety features.
The only reason everything hasn’t gotten cheaper over time is artificially-induced inflation. Both prices and costs.
This is why few of us can live the old grandparent-cliché of paying cash for everything.
Since 2005 I’ve paid cash for everything except my current automobile.
i pay cash for everything, too. It’s the debtors that drive up prices by using credit to outbid people with cash. With limited supplies of dollars, they would be worth more and more over time, not less.
granite stone around your neck
the turn of the countertops …
Per bankrate.com, the median national net worth is $86,000. 20th percentile is $7,900. So no - the vast majority of people are not debtors.
The vast majority of people I’m sure have some loans of course, including mortgages. However they also have savings of some kind - bank accounts, 401k’s, IRA’s, pensions, Social Security, etc. In a deflationary environment the positive effects of those savings, combined with lower future cost-of-living expenses, generally more than offsets the negative effects of deflation on debt.
Deflation = bad is a myth perpetuated by the banks, who have a vested interest in inflation. Inflation encourages debt, and banks make money off of debt.
A debtor is someone who owes money. The state of their balance sheet doesn’t matter. Yes, those who have more liquid assets than liabilities could pay off those debts, but until they do they are debtors.
In this environment, when there’s no way that assets can safely generate any kind of meaningful return, those assets would be better used to pay down debt.
The state of their balance sheet doesn’t matter.
Disagree completely.
In my own particular example - I try to save $N a month for retirement. N is based on:
- Expectations of future inflation
- My current balance
I have a spreadsheet in fact, to use as a planning guide.
If I knew we didn’t have inflation ahead, or we had deflation ahead - I would put aside a lot less per month for retirement, freeing up money for other things, like paying down my mortgage faster.
If you are paying a monthly, yes, you ARE a debtor.
“If you are paying a monthly, yes, you ARE a debtor.”
Can we agree that a debtor is someone with a negative net worth, who can only continue existence by borrowing or working like a slave to extricate himself from his underwater position?
Otherwise you risk labeling independently wealthy people who rent because it is cheaper and more convenient than owning as ‘debtors.’
It seems like in this thread people didn’t consider that in a true deflationary spriral incomes deflate but your debts don’t. Hence, the pain. I think as James pointed out above, what we’ve got now is very little deflation.
20% of mortgages are underwater
NEW YORK (CNNMoney.com) — More than 20% of the nation’s mortgage borrowers owe more than their homes are worth.
At 21.5% for the third quarter, it is a small improvement over the previous quarter, when 23.3% of loans were underwater, according to real estate website Zillow.com.
This so-called negative equity is a hotly watched statistic because it is a prime predictor of foreclosure — second only to loss of income.
“It is the paramount challenge facing housing markets,” said Stan Humphries, Zillow’s chief economist. “We already have had record levels of foreclosure and, combined with high unemployment, negative equity is very toxic to the market.”
I seem to recall reading that these perecentages were much higher, but then again, these are probably based on zillow’s overly optimistic zestimates.
Anybody know if this calculation takes into account 2nd mortgages and home equity loans, or just the 1st mortgage only? Thanks.
I think it includes all the debt. But that’s a good point. If the second lien bank would agree to take the loss, a lot of people would be magically above water again.
Of course, second lien banks will never agree to take a loss. However, IMO, if they chose to be the substitute for a down payment, they deserved to be reamed.
It’s not so much that the second lien holders won’t accept a loss. But for the most part, they’re unwilling to accept a total loss, which is what HAMP envisioned in its first iteration. And really, why SHOULD they? At some level, we’re engaged in a giant game of chicken between borrowers, 1st and 2nd lien holders, and ultimately the Goverment and taxpayers to determine exactly who takes how much in the way of losses.
“And really, why SHOULD they? (accept a total loss)”
Well, that’s the very definition of a second lein, no? The primary leinholder gets paid off first. The second leinholder knew that going in. You’re right about the game of chicken, though. Having been bailed out once, the banks have every expectation of it happening again so they will delay and hope just like the FBs.
Why any underwater FB would be making payments on a second lein right now is beyond me. Its not like the second leinholder will foreclose, knowing they’ll get nothing after the first lein is paid anyway. Plus they will have the legal expenses to boot.
They are not all broke as well as under water. And some of them live in recourse states. Also, some people have other reasons to keep their credit clean such as those that need to retain security clearances.
Question: Were the 20% pieces in the 80/20 splits recourse even in non-recourse states?
I guess I wasn’t clear. What I meant was: why should they accept a total loss as part of a workout with the first lienholder or a short sale. In a foreclosure they’re going to get bumpkiss. But short of a foreclosure they’re not obligated to agree to anything. Since avoiding foreclosure is an oft stated goal and can sometimes reduce losses for the first lienholder, the assent of the second lienholder is worth SOMETHING.
I agree with oxide, the second liens banks deserve to be reamed. Typically, these seconds are written with much higher interest rates than the firsts; so the higher risk was baked in. These lenders gambled and they lost.
Many homeowners across South Florida still owe more than home’s worth
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 5:30 a.m. Monday, Aug. 9, 2010
— South Florida’s homes are treading water, managing so far this year not to sink further into negative equity. But analysts warn they better be good dog paddlers.
A second quarter study released today by market experts at Zillow found 44 percent of South Florida single-family homes with mortgages are underwater - real estate slang for owing more on a loan than the home is worth.
Hey glad you showed up…
Please xsplain: Hwy50inareallybadinvestment?
Sorry, did not mean to personally insult you.
Dodge is a registered trademark of Chrysler
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.
No worries, I thought ya was pokin’ fun of my “reallybadinvestment” of my Jeeps!
Never! I learned to drive in an old Willys WW2 jeep my dad owned. He owned it as long as I could remember and kept it at his place in Pa. I don`t know what he paid for it but as long as he had it and as much use as he, my family and the neighbors got out of it I am sure that was a great investment too.
More than 20% of the nation’s mortgage borrowers owe more than their homes are worth.
They should be working harder to pay down their mortgage so they don’t owe so much money.
Fed set to downgrade outlook for US
The Federal Reserve is set to downgrade its assessment of US economic prospects when it meets on Tuesday to discuss ways to reboot the flagging recovery.
Faced with weak economic data and rising fears of a double-dip recession, the Federal Open Market Committee is likely to ensure its policy is not constraining growth and to use its statement to signal greater concern about the economy. It is, however, unlikely to agree big new steps to boost growth.
Smaller measures to help the economy could initially take the form of a decision to reinvest proceeds from maturing mortgage-backed securities held by the US central bank, thereby preventing the Fed’s balance sheet from shrinking naturally.
Investors will also examine closely any changes to the pledge made by the FOMC in June to “employ its policy tools as necessary to promote economic recovery and price stability”, which could be hardened if policymakers choose to signal the potential for more aggressive move to boost the economy in the future.
I’ll keep saying pay down everybody’s CC debt by $3000. and Most will spend a good chunk of it on deferred items sure some with pay for lap dances…but it would be an overnight stimulus and not given to some bureaucrat siphoning the $$$ to buy a $50,000 desk for his brand new luzzyrie office
And those of us without CC debt will take a pitchfork to the White House, and justifiably so.
Like it was done when the banks were bailed out?
But we could keep it equal opportunity by mailing out stim checks to everyone.
But we could keep it equal opportunity by mailing out stim checks to everyone.
SIMstim checks?
Your proposed plan is impossible to implement. Some people have lots of credit cards. Which one gets the money? Do they get to pick? How do you make sure that each person only gets the credit on one of their cards? Some people don’t have any credit cards. How do they get the money? Do you contact them in advance to ask how they would like it? How do you make really sure that they really don’t have a card before you give them the money some other way? Some people get preapproved card applications for entities that aren’t eligible for cards like minor children or Fluffy the cat. If those applications were returned and cards were issues does Fluffy get $3000? Alternatively, your program has no easy way to give more money to people with kids which is kind of a given in the US. What if your identity is stolen and someone has opened a credit card using your name and credit? Which one of you gets the money? How do we figure out who should?
The only type of give ‘em cash stimulus that will happen administratively is checks. Bush did it. I don’t think it is going to happen again.
I’m still trying to drum up support for my “Move everybody’s checking account decimal point three points to the right” plan.
“Bush did it.”
$2K baby stimulus for households; $787 bn big daddy stimulus for Megabank, Inc.
Polly been out all day
Yes its simplistic….but its a start…,,but you tie the money to your SS # seems the best way….
———————————-
Some people don’t have any credit cards. How do they get the money?
Like they did for Katrina folks a $2000 debit card
So the foreclosed house I was looking at putting a lowball offer on just hit the MLS. (MLS: MC7406769). After touring the house and finding many, many, many things wrong with it but liking the overall layout and style, I tried speaking to the realtor, who wouldn’t return my calls.
I found the bank with the mortgage and called them up. They had “no record” and suggest I go through the listing agent. Well, I found another agent through an open house - one who had his head on straight. I explained the house and my lowball offer and he was game.
He calls me up a few days later to say the listing agent is gonna put it on the market for “around $450K”. Sounds good, I’m gonna work on financing and get back to you.
This week it hit the market for $675K AND it says in the description that offers won’t be reviewed for 7 or 14 days, depending on your agenda. Is this just a way to string people out and get the highest offer? What could have been a quick sale for a house that’s been sitting empty for over a year is gonna be a long drawn out affair.
Yep, stringing it out & trying to get the highest offer (and it works, damn it!!)
They do this in DC/ NoVA in may of the listings
I don’t even bother looking at them on the internet
i suggest you “move-along” as there is no deal to be had here!!
Do they really think people are gonna line up with their offers circa 2005? Seriously, this house would be a nice barometer to see how quickly a fool is willing to lay down 600K. People are fooling themselves with the housing prices in the DC Metro area.
I think its too late in the summer to offload it, so I may put in an offer somewhere around Christmas. My guess is it will still be there, with a 3K drop in the listing price.
People are lining up in the DC area, but not at 2005 prices - only for Foreclosures - I’ve heard that the “court-house-steps” bidding is quite a crowd some days
THe DC/NoVA marekt is still hopping right along, we have ALL the jobs here, ya know
and people need a place to live!!
Every other license plate is from Alabama, Florida, Ohio
No these folks are not summer tourists, they are new to the area & need a place to live!!
The send a revised offer $450 K is good for 14 days after that it drops $4500 (1%) every 7 days….
Sounds like there’s a serious disconnect. What happens if the appraisal comes in on the low side?
Does that matter if you come in with 100 percent cash? My guess is the realtor is looking for an investment type of buyer. One who will get it for 600K, put 10K into it, then put it on the market for 750K.
Sean,
You can always put in what your original offer was going to be anyway. Sounds like the market there isn’t as bad as some places, but you never know. I heard one lowball success story, which was accomplished because the buyer submitted the same low offer every two months for an entire year. Few folks have the skills to fix the “many many” things wrong that you found. Even if it goes to contract, they might be scared off by the home inspection.
Also - this may be tinfoil hat - but I hesitate to post MLS numbers of houses for which you have a curiosity ONLY from the standpoint that the listing agent might pee his pants at the thousands of hits and think there is more interest in the property than there really is.
I really don’t see anything wrong with them wanting to wait a couple of weeks to see what the highest offer is. Submit YOUR highest offer. When it expires, (and judging by their wishfull asking price it will) either resubmit or don’t if you have better options. If somebody is willing to pay more than you, more power to them.
Oh, Im not deterred by the high listing price. I just wanted to be responsible and get proper financing and save up for a nice down payment (Strange I know. I had a realtor laugh at me when I said this).
I really do like this area, but Im going to bet that the DC Metro housing prices are going to go down even further. People can say all they want about “We have all the jobs” or “This is Potomac, Maryland! Shangri-La with the Garden of Eden (Bethesda) right next door.” Its a nice area but nothing I want to leverage my entire families future on.(Quick fact: Did you know the creator of the 1990’s teen soap opera “Beverly Hills 90210″ was born and raised in Potomac, and wrote a pilot about his high school, Winston Churchill, and uber-rich teens and drama that ensues with popularity, beauty and wealth?).
Regardless, Im going to stick with my plan and continue to look. If it is still for sale when Im ready its lowball time.
I know which house your are talking about, we live fairly close. Keep us updated on your low balling. If I could find an even moderately decent place in Potomac for 450K, I’d be all over it too.
your = you… good god…
I half-expect the FED to give us a shock and awe this week.
More of the same?
Some new tricks?
stay tuned……
You can be sure they have something brewing!
They seem to be downplaying expectations for more near term QE in the MSM, perhaps to increase the psychological shock and awe if they do an about face at their meeting. I suppose they could also opt to officially move to forego QE, but then apply some sort of back door stimulus (sorry, I know that sounds bad…) — who would notice if they did?
“downplaying expectations ”
but…bu…but then they can’t claim anything was “unexpected…”
Or the next meeting…
The black swan just might be a 20 percent reduction in every mortgagor’s principal with an automatic reduction in interest rate geared to his/her FICO. Only a trillion or so; how much per vote would that come out to in deflated dollars?!?
“I half-expect the FED to give us a shock and awe this week.”
Really, a suprise from the FED !?! Goodie…What could it be ?
Well, we have about…
1,511 legal gambling facilities and 8,430 FDIC banks in the US…
(scribble, scratch, oops, eraser, carry the 9)…so we have about…
9,941 Casinos. That pretty much takes care of our gambling needs, and so…
Yeah !…It’s a new Water Park…the FED is gonna open a new Water Park for the HomeDebters, FB’s and the crimials to play in while they watch the taxpayers drown.
I’m sorry, Mickey. I just can’t agree with your assessment.
The Casinos would never have the audacity to try and ream you for 18% loan-sharking rates to play on their machines. And hitting you with every conceivable fee they can dream up, all while claiming to be providing you a “service”.
It’s true, they are both government licensed money scamming operations. But the casinos have some sense of morality amongst them.
I don’t think any of them are asking the government to cover their losses, either. It’s only the Bankers that get to gamble with our money in a Heads I win, Tails you lose, government sponsored playroom.
I’d trust the integrity of a casino operator over a banker, anyday.
“some sense of morality”
Actually, they have EFFECTIVE regulations, and regulators that are doing their jobs.
Filed under: “why x2 incomes help qualify your family for “Homemoanership”
Parents pay $55.8 billion for child-related services
August 9th, 2010, by Jan Norman, small-business columnist OC Register
U.S. parents will pay $55.8 billion this year for others to do child-related tasks they don’t have time or the skill to do
This is all work – which IBISWorld calls “parental outsourcing” – is dominated by the self-employed, independent entrepreneurs and, in some cases, franchises.
“There are an estimated 92.9 million children aged 21 or younger, accounting for 29.9% of the entire U.S. population,” said George Van Horn, senior analyst at IBISWorld. “The potential market for businesses in the parental outsourcing industry is huge.”
Here’s how IBISWorld divides up the parental outsourcing market:
IBISWorld counts services that take care of minor children – day care, nannies, babysitters – and that help them excel – school tutors, athletic coaching, preparation for SAT and other tests to get into college – but there are other services that aren’t on the list, such as music lessons, dance instruction (surely that’s not sports coaching) or summer camp. Yeah, kids are expensive.
“With few national firms operating in these parental outsourcing service categories, industry concentration is low,” Van Horn said. “Although thousands of operators do exist and competition is high for this industry, the players are small, so there is a golden opportunity for entrepreneurs to build operations and gain market share in this multi-billion dollar sector.”
Here’s how IBIS breaks it down:
* Child care centers, $22.8 billion (80% of industry cares for children under 7)
* Nannies and babysitters, $16.2 billion
* Family day care (which IBIS calls watching kids at the service provider’s home) $5.3 billion
* Sports coaching $4.25 billion
* Exam preparation and tutoring, $4.6 billion
That last category has some major players (Sylvan, Kaplan), and IBIS notes the growth potential is less.
I want to know what these guys are smoking. It must be really good stuff.
The market is working, and this problem is fixing itself……It’s called “Mom/Dad can’t find a job that pays more than $10/hr., so they stay home with the kids”.
Exactly.
As for what they’re smoking, it has to be crack for them to be that damn stupid.
Little relief seen for state and local layoffs
WASHINGTON — An injection of $26 billion in federal aid won’t be enough to save the jobs of more than a half million people who work for state and local governments or for companies that do business with them.
Economists say state and local budget gaps are so vast that up to 30,000 public jobs will be cut each month at least through year’s end. And private companies that contract with states and localities are likely to cut even more deeply.
All told, 600,000 to 700,000 jobs will likely vanish over the next 12 months at states, localities, private contractors and other businesses that depend on government business, according to the Center on Budget and Policy Priorities, a Washington think tank.
The July unemployment report, released Friday, showed state and local governments cut 48,000 jobs last month — the most in a year.
State and local governments already have shed 169,000 jobs this year. And since their peak in 2008, state and local payrolls have shrunk by 316,000; that figure does not include private sector jobs tied to government spending.
Economists say state and local budget gaps are so vast that up to 30,000 public jobs will be cut each month at least through year’s end. And private companies that contract with states and localities are likely to cut even more deeply.
I was wondering, won’t the states and munis increase their outsourcing to the private sector to save money?
Outsourcing doesn’t always save money
It just shifts it from workers to those politically connected individuals that get the gov contracts.
KBR has a
$20 case of coke they’d like to sell you.
I know they don’t always save money. And if there is corruption involved, which is a given in many municipalities, then fuggedaboutit. Still, you’d think that that an illegal alien janitor earning minimum wage might cost less than a union janitor who has a fat pension waiting for him.
Well yes, SOMEBODY comes out ahead. The question is whether it’s the taxpayers, stockholders, contracting officers or politicians.
Oh the pain!
Let’s see; Hundreds of thousands of employees lose their jobs while hundreds of thousands of retirees get full pensions.
Uh, I don’t think so. Something’s got to give. Since the employees are still producing and the retirees are merely consuming … I’d say the give will have to come from the retirees.
Interesting Times are at hand.
Something’s got to give. Since the employees are still producing and the retirees are merely consuming … I’d say the give will have to come from the retirees.
Agree that something’s got to give - but disagree that it has to be either of those. In either case - that’s a lot of votes.
What else can give? Simple - the economic system as a whole. Pump a lot of new money into the system and both the employees and the retirees can all get paid.
Sure it’ll wreck the economy long-term, but:
- By then the current round of politicos will be out of office anyhow
- Inflation isn’t caused by politicians - it’s caused by “the economy”. Or - worst case politically - it’s caused by the supposedly-autonomous Fed, who - not coincidentally - are not subject to November ballot boxes.
The actual politicians who are responsible are twice-removed from the consequences of their actions.
“I’d say the give will have to come from the retirees.”
A sufficient amount of QE going forward could settle that without a messy debate.
“I don’t think there will be much of a debate, just cuts.
That’s ok, they can always sell the house…oh wait!
More bailouts straight ahead for:
States’ pension funds, States’ general funds, FANNIE & FREDDIE, underwater homeowners’ (= proactive bailout for the entities that hold those loans) and assorted other gamblers that got themselves into hot water.
This will continue until the Federal gubernmint runs out of the ability to borrow fresh funds. That means most likely years, but not decades.
“Hundreds of thousands of employees lose their jobs while hundreds of thousands of retirees get full pensions. Uh, I don’t think so.”
Think again. In NYC, we’re going through this for the second time. Most of America will be going through it for the first time.
The senior citizens will get everything they have promised each other, even as taxes on those working soar, public education collapses, and the infrastructure falls apart.
OK, but what about all the people who depend on retirees to fund their jobs? Go visit a place like Reston VA (during the work day) and notice all the goods and services they are purchasing.
Just sayin.
You’re using Reston as an example of a retiree location?
Uh, kinda?; not so much a place that people MOVE TO in order to retire, more like people who retire in the house where their children went to high school.
BTW, where is the “ghetto” area in Reston?
Or was that not part of the plan of the “planned community?”
I’m sure there are some retirees in Reston, but the vast majority of goods and services are from the tech/government sector, which is quite booming.
(I live close by, and go thru Reston occasionally).
I used to live in Florida, and go to the west coast (Sarasota/Bradenton) often - now there’s a place dependent on retirees.
You’re right about Sarasota packman.
And for anyone considering a move to Reston, keep in mind that they have CC&R’s as thick as a phone book, and HOA’s (bureaucrats-in-training) that love nothing more than to seek out even trivial violations and come down like a load of bricks on the violator.
Anyone expecting to make a buck off retirees needs to start smoking the same stuff that those guys who want to start a “parental outsourcing” business are smoking. At least out here in Flyover.
The only place retirees spend any money around here is Denny’s and Walgreens. And those guys that sell the opthamologist’s those “cateract sunglasses” And the penny slots at the Indian casinos.
No kidding. Why do people around here think retirees are making fat bank and livin’ large?
Most retirees are just getting by or struggling to hold on to what they were holding when they retired.
And how so very nice of you all to parrot the corporate Wall St, mantra of “work or die.” Do you not think this won’t happen TO YOU?!
Four years into “retirement ” and I still punch a clock; either that or quit the medications in October and turn off the heat in March. Dont think it cant happen to you.
Carlos4, you’re clogging up the system. You need to get out of the way so someone younger can have your job.
Reston VA ?
Isn’t that a CIA/Contractor retirement Home ?
That’s the one. And you’re right. But I’m pretty sure retirees are still a pretty small percentage of Reston’s population.
Let’s see; Hundreds of thousands of employees lose their jobs while hundreds of thousands of retirees get full pensions.
It depends on who we are talking about here.
PRIVATE pensions are guaranteed by the government sponsored Guarantee Pension Fund. If the private pension defaults, the government fund takes over, but in this case they can limit the pension based on age, years of service, total income, and total contributions, by some mathematical algorithms, yeilding a smaller net fund.
Government pensions, on the other hand, are supposed to be guaranteed by the government. So if the County Commission said the Sheriff could be paid $230,000 a year, and retire after 20 years at 100% salary, then the citizens of that jurisdiction get to pick up the tab for that Sheriff and every other “public servant” that put in their 20 years of “service”. I think this is unless, the pension fund was put into some type of private fund, which most aren’t. The stealing will be allowed to go on for as long as the City, State or County can “support” the robbery.
Bankruptcy is the only option. It should be used frequently and repetitively.
“the employees are still producing ”
There is an assumption here by people being paid for their efforts that those who are retired or unemployed are non-productive. That is not necessarily true. My mother has contributed full time, volunteer labor for many years and is still doing so at 85.
Got
grocerydotcom/stucco/Gold!/ Pipelines?Partnerships Let Wealthy Play Oil Tycoons for Income:
“I see them spreading across people’s tax returns like wildfire,” said Bill Fleming, a managing director in the Hartford, Connecticut, office of PricewaterhouseCoopers LLP, the New York-based accounting and advisory firm.
“…Investors are pouring into energy-related MLPs, increasing their market capitalization 20 percent as of July to $183 billion from $152 billion in 2009, said Michael Blum, a managing director at Wells Fargo Securities… About 90 percent of new equity in the partnerships last year came from retail investors, he said.”
By Margaret Collins, Bloomberg
Uh oh…
“Economists put decimal points in their forecasts to prove they have a sense of humor.”
Former Treasury Secretary William Simon.
He wrote, “There is only one social system that reflects the sovereignty of the individual: the free-market, or capitalist, system.”
(He worked for another really funny guy — Richard M Nixon”)
Oh, and speaking of funny guys, I see in the news that Alan Greenspawn is NOW calling for a repeal of the Bush tax cuts.
Ha, Sir Greenisspent…
I bet my older brother a $2.00 bill that he will not send it back to the Queen,… voluntarily
We all know greenspan has no credibility.I’m not sure why the media still quotes him.He is a good bullsh@tter but thats about it.
For many he probably remains a symbol of ‘happier’ times, and they think that somehow something he blubbers might bring those times back.
Too bad they don’t also realize the extent to which he was the cause of their present anguish.
He’s like the doddering old coot you have come over to the house at Thanksgiving……..you know, the one throwing out the “N-word” every 15 seconds, while the kids sit around looking embarrased.
No, it’s NOT a repeal. “Repeal” must be in the lastest fax from Republican Talking Point Central.
They don’t have to ‘repeal’ anything. The tax cuts go away on their own. This is NOT the same as a tax increase. This tax cut is temporary, because a temporary tax cut is the only tax cut the Republicans could get through the Senate…by that evil shove-down-the-throat “reconciliation” process, no less. So, in order for the rich to retain their juicy tax cuts, they need 60 votes in the Senate to actively pass a bill to renew — and there are probably 50 Democrats ready to filibuster the heck out of it. (and Obama would veto it anyway.)
Sorry Repubs…the filibuster works both ways.
The only question is whether the Senate can retain the tax cuts on the middle class.
oxide,
Thank you. Once again I appreciate your presence, intellect, speed of typing and clarifications facts in regard to the issues.
You are really fast…not quite Google…but your mind is really quick.
+1
Hey, how’s that individual sovereignty thingie in the free-market, or capitalist, system, working out for you today…Joe6pac ?
joe6pac is busy buying new cars from the new found wealth of losing their home payment to angello mozillo.
Yup…new cars and houses…that individual sovereignty thingie is the way to go Joe.
Yup. Servitude goes much easier with a little gold plating on the shackles and bars.
His new car will end being his new home after he loses the house.
I never never listen to the economists as I have Faith in the American System.
(Psttt…hey, anyone on HBB got a good price on some 7.62 NATO linked machine gun ammo ?)
Mikey, is it true that back in the day, the Warsaw Pact made all their weapons slightly larger than NATO so they could use NATO ammo in a jam, but not vice versa?
Sounds right, the cartridge rim was larger, I believe it, had to to with the 7.62 Commie cartridge design on purpose like you say.
The rounds looked ALMOST exactly the same and the commies could use ours and they would work and extract the spent cartridge brass just fine.
The problem was the Commie rounds had a bigger extraction lip on the end of the shell casing and the extractors on our weapons couldn’t grasp the end of the round after it was chambered and fired.
Use their 7.63 rounds and the brass of the shell was stuck in the weapon chamber after firing the 1st one.
Well, we in the US of A were using 5.56mm or 223 rounds in our M16s and the russians were using 7.62x 39 rounds.
Course you could spend a couple minutes trying to cram a 7.62×59 round into an AK.
Then you could look at the big 222 problem back in Nam.
Personally like M14 but I wasn’t carrying one all day. The 16 was always a POS but better than the stupid AK which just sprays stuff all over. You can watch this on mythbusters or history channel. A very reliable weapon due to sloppy tolerances. Inaccurate after a few shots and at anything other than close range.
I really do respect the soviet made AK-47’s and their knockoffs.
Not to be on the recieving end of them of course but those things really worked, it was cheap to manufacture, seldom failed, was idiot-proof and was damned near indestructable. Through it in a muddy river, retrieve it 3 days later, drain the barrel and it would still fire perfectly. Rust didn’t slow them down a bit.
Nothing will get your undivided attention like a gang of guys coming at you with a bunch of AK’s.
Ak-47 is ok for accuracy. I used a knock-off version, I shot 5 bullets in about 100yard, 4 falls within 2 inches radius circle. It was a gun used by whole squad for firing examination.
The 7.62 X 39 is a Russian clone of the 7.92 X 33 Kurz cartridge used in the German Stg 44 (the FIRST “Assault Rifle”).
The AK-47 isn’t a “copy” of the Stg 44, but the design was influenced by it.
The 7.62 NATO cartridge wasn’t named as a “standard” until 1954 or thereabouts.
“It’s an AK-47, the weapon of choice of your enemies and it makes a distinct sound…”
-Gunny Highway
Assualt rifles for the average troop are made for spraying anywhere from point blank to 200 yards. Just like the name implies…assault (or butcher and bolt). They are firepower, close, dirty and made for murder. They don’t have to be deadly accurate, pretty or your favorite color…just as long as they work.
We aren’t talking 1000 yd target shooting for the Wimbleton Cup down at camp perry with them.
You need to try out a Valmet. Got to shoot one once. A high quality piece.
Didn’t they just adopt the .308 Winchester round as the 7.62 NATO back in the 1950’s?
The Russians still used the old 7.62 x 54R rimmed cartridge in their sniper rifles.
Xfixer,
I have a m1938 Mosin Nagant (Finn), but it’s a Sako not a Valmet. It’s arguable that Sako is even better than a Valmet, although Valmet did later branch out into producing the Porsche Boxster.
I’m talking the Valmet version of an AK-47. Can’t remember it’s designation. Buddy of mine had a semi-auto version chambered in 7.62×39. The thing was as nice as my “real Colt” AR-15 Match HBAR I had at the time. And shot just as well.
I think it’s the same gun that Al Pacino is shooting during the “bank robbery” in the movie “Heat”. You know, the one he uses to center punch Tom Sizemore’s forehead.
Not owning property will set you free. I see very nice houses for rent in Ahwatukee for very good terms. I just don’t need the space yet. I can imagine also getting a lease on a BMW and not worrying about maintenance issues.
If I can hold onto a job these next five years I am all set to quit this business travel for good and return to Phoenix. I want to experiment in solar power and learn as much as I can about air conditioning (just a long time obsession). I’m a desert rat at heart. Something about reading “Dune” back in the 1970s started my fascination with deserts and blue skies.
read “Dragon in the Sea” by F Herbert
When you perfect the stillsuit give me a call.
Thermodynamicly speaking, stillsuits are IMPOSSIBLE. The head of vaporization removed by evaporating sweat is what keeps you from quickly overheating. The idea that you can allow this to happen for cooling your body and then somehow magicly condense the moisture back without an active cooling system sounded impossible when I was 14 and nothing I’ve learned since then makes it sound any more likely.
I would say that owning property outright will set you free.
Being an owners doesn’t automatically mean you’re a slave to maintenance issues. There are plenty of all-purpose handymen for hire who will do everything for you to where the only thing you need to lift is the phone. And if you’re only “rent” is property taxes in podunk state, onwing outright is not a bad thing.
Property tax in flyover country can be reasonable. Here in Idaho they take $100K right off the assessed value for owner-occupied houses before multiplying it by a little over 1%. I paid about $1,200 last year. Landlords pay full-fare.
My nephew in Dallas paid about $7,000 for a similar sized house last year.
What free market system are you speaking of? The one with the centralized bank? How about the FDIC which is some kind of bank bailout as well?
We are all captive in this fiat bubble system. Perhaps it’s only the gold traders that are free.
Don’t bother James. You know the saying about wrestling with pigs.
Don’t bother James.
I wasn’t going to.
a stool with several legs
I didn`t make it up.
“The President’s strategy for economic recovery is a stool with several legs,”
stool (stl)
n.
3. A toilet seat; a commode.
4. Fecal matter from a single bowel movement.
Home • The White House Blog
Help for homeowners
Posted by Macon Phillips on February 18, 2009 at 09:36 AM EDT
The President’s strategy for economic recovery is a stool with several legs, as he’s said, and one of them is solving the foreclosure crisis.
“We must stem the spread of foreclosures and falling home values for all Americans, and do everything we can to help responsible homeowners stay in their homes,” he said yesterday as he signed the American Recovery and Reinvestment Act into law.
Though communities across the country have been affected by the crisis, Arizona has been hit particularly hard — in 2008, only two states had more foreclosures.
And President Obama is there today, in Phoenix, to unveil his “Homeowner Affordability and Stability Plan,” which will help bring relief to homeowners and bring some order to the housing market.
http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/
“We must stem the spread of foreclosures and falling home values for all Americans”
I hope he was wearing floppy shoes and a clown nose when he made this statement.
he doesn’t need funny shoes and makeup. he is a clown. just not a very funny one.
Well he does come equipped with big ears.
Interactive map from the Baltimore sun:
http://www.baltimoresun.com/business/real-estate/bal-homesales-zip-pricemap,0,1302043.htmlstory
Compares home prices changes from Jan - Jun 2009 and Jan - Jun 2010.
There is so much variation from zip code to zip code …
Thinking about this socialist regime attaching a rider to the Health care bill to report all sales of gold bullion at coin stores over $600 got me to conclude this:
The powers that be are gearing up to hyperinflate the dollar. They foresee a rush to precious metals purchases when hyperinflation kicks and and are preparing to be like the troll standing by the bridge expecting treasures in able to pass over.
I’m expecting Combo to deny this. But Bernanke wants to avoid a depression at all costs. He’s not nicknamed “Helicopter Ben” for nothing!
Gold bugs usually follow the news pretty closely, why doesn’t gold break out of its rangebound behavior on this news?
I think gold bugs are unsure of whether it’s a buy or sell sign. If you must sell an ounce of gold per day in four years to a dealer, every sale will be reported to the government. I’m a long term buyer of “everything” - stock mutual funds, gold, series I savings bonds, TIPS, municipal bonds, baseball cards, and T-bills. Well not really baseball cards - just kidding. I think our taxes will be lower in a dozen years than they are going to be for FY 2011. I think capital gains taxes will be much lower than now.
In the short run, we need to allow this socialist disease in the federal government take its course. There will be severe suffering in 2012 and the blame will be placed where it belongs.
I have mined for gold before as a hobby.I would go to the river and then mine and process my finds.the problem with gold that you find is that is not pure and must be refined to get out impurities.So when you go to sell it this is taken into consideration.If gold is at 1200 usually a buyer for your mined gold will only give you 70% of the 1200.So to the hobby gold miner you would only get 840/oz.Large pieces demand a higher price.
Just call it the “Inserted in the Health Care Bill just to pi$$ Bill in LA off” Bill.
why doesn’t gold break out of its rangebound behavior on this news?
Silly wabbit, because al jezera hasn’t translated the audio tape from Glenbeckinstan yet…
Come on Bill, we can make our daily pilgrimage to LA dealers for 599$ gold purchases. Surely we can get by on 4193$ of gold buys per week.
I suppose we could stop at multiple dealers and skirt the limit too.
In California you have to pay sales tax on precious metals purchases of less than $1500.
4% commission plus around 10% sales tax means gold better go up in price by at least 14% to break even. Not cool, not cool.
But in other states, James is right. It would be worthwhile to buy gold in Portland, Oregon - no sales tax.
Buy a quarter ounce per day per dealer. If you know several reputable dealers there, you have no worries.
But note smaller quanties of gold bullion have a higher commission. Once again you are screwed.
Thinking about this socialist regime attaching a rider to the Health care bill to report all sales of gold bullion at coin stores over $600 got me to conclude this:
What’s to stop people from crossing the border, either northern or southern, and sell their gold in Canada or Mexico? It’s very easy in Mexico as any Bank will buy your gold coins from you (you might want to bring a bodyguard with you)
What’s to stop people from crossing the border, either northern or southern, and sell their gold in Canada or Mexico?
One time I asked about 6 wealthy Brazilians where I could buy or sell some shiny gold coins in Rio. They said “We don’t have any place like that here”.
They were wrong.
Thinking about this socialist regime…
Here, have another stick for that horse…
Sounds like Aladinsane is going to be proven right, after all. Local coin dealer said the premium on fractional ounce gold coins jumped 200 percent since the 1099 news came out. Says very few to be had.
($1000 bn/$1 trillion)*($1.14 trillion)*(1.54 trillion yuan)/(7.7 trillion yuan) = $228 bn.
Conclusion: The Chinese wave of bad loans appears to be of no significantly worse magnitude than subprime was contained to in the U.S.
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.”
The report put the total amount of current loans to state-controlled enterprises at 7.7 trillion yuan ($1.14 trillion), meaning 1.54 trillion yuan are in the “problem” category.
As a result, the CBRC will order banks to increase their loan-loss provisions, it said.
…
Yes and we all know how honest china’s gov is ???
As bad as ours was I imagine they just pull a # from a hat.
“…not significantly worse magnitude than subprime was……”
Boy, they had me scared for a minute.
Bill,
Just keep believing in Ayn Rand and the Krugerrand…
“I think we have this Bill’s address and exact position triangulated now Comrade Ben”
Ayn Rand and the Krugerrand…
Ayn Rand was ignorant to basic aspects of human nature that the Krugerrand doesn’t even care about.
Michael Pento meet Mr. ForgottogetStucco,…Mr. ForgottogetStucco meet Mike, (Is it OK to call him Mike?)
Real estate called ‘poor investment’:
August 7th, 2010, by Jon Lansner / OC Register
“…Additionally, the U.S. has a deleveraging consumer who suffers from poor income and job growth. In my opinion, given the history bubbles, real estate will be a poor investment for many years to come.”
Poor investment = good place to actually, you know, live.
Before 2001 I never heard of Real Estate being an investment for anyone in the middle class or upper middle class.
Real estate can be a good investment just like any other asset class…I can make a very strong argument that income producing real estate can be a very attractive long term investment even if it does not go up one dime in value…In fact, its been the actual and anticipated appreciation of this asset class that has made many of them poor investments today…
I might add just for clarification, I do not consider a single family home a real estate “investment”…
“I might add just for clarification, I do not consider a single family home a real estate “investment”…’
Thank Godness for that scdave, because I was afraid that
you you completely lost your mind.
(There’s a lot of Stress out there folks and you never know who could go Postal in here.)
You’re cool…you’re cool scdave…(old buddy).
I always though of SFH or 2 family one not as an investment but more like a whole life policy….it builds cash value for 30 years.
I tend to think of it as retirement savings that you don’t outlive. After you house is paid for, it keeps paying a dividend-in-kind of housing for as long as you live there.
I think of it as a roof over my head and a place I could chase my wife naked…
“I think of it as a roof over my head and a place I could chase my wife naked…”
+1 Agreed — avoid those contractors!
Before 2001 I never heard of Real Estate being an investment for anyone in the middle class or upper middle class.
I heard it in LA from 1987-90 and I heard it in the Bay area from 97 onwards.
I hear it in Rio now.
Didn’t the Carlton Sheets RE investments infomercials start in the late 80s.
Looks like it’s almost time to buy - when they start telling Joe6Pack that RE is now a BAD investment (and he starts buying the BS)…!!
Your right.The contrarian indicator.When joe6pac throws in the towel it is a buy sign.It takes a long time for the real estate market to make moves.
“Looks like it’s almost time to buy - when they start telling Joe6Pack that RE is now a BAD investment …”
The time to buy is when Joe6Pack is telling Joe6Pack that RE is now a BAD investment. When EVERYONE thinks RE is a dumb buy … THAT’S when it will be a good time to go for it.
Joe6Pack plus the numbers: The numbers also need to be saying it is time to buy.
All that will be left for the buyer to do is:
1. Get the money, and
2. Be willing to commit (and this may be the hardest part of all).
It’’s at least a double dip in store for housing or worse, as far as I’m concerned.
I’ll wait and watch for a while. I am a comfy renter and can afford to buy even if I’m wrong.
“Hey, get off of that fencepost you scrawny little Vulture…that’s MY position!”
During the S&L disaster, that time was 6 years after the beginning.
6 years after the beginning
bingo, eco! We bought our little fixer-upper in Zilker neighborhood in 1992, at about the nadir for that type of property and location. (Before developer / infestors started driving up prices and people started fixing and flipping.)
For houses in good shape in the suburbs and neighborhoods with newer and more uniform housing stock and landscaping, in 1994 and the next couple years people could buy a house in good condition in a stable neighborhood for a reasonable price.
real estate will be a poor investment for many years to come ??
Pretty broad statement…
Ole getStucco is better than the legendary Chickenman…”he’s everywhere…he’s everywhere”
SOON TO BE NATIONWIDE?
http://www.ncsha.org/story/wheda-returns-lending-partnership-fannie-mae
The WHEDA Fannie Mae Advantage, available beginning March 1st, is based on Affordable Advantage™, a product developed by Fannie Mae exclusively for Housing Finance Agencies (HFAs) as part of an agreement between Fannie Mae and the National Council of State Housing Agencies (NCSHA), the trade association that represents state HFAs such as WHEDA.
Highlights of the WHEDA Fannie Mae Advantage include:
100% financing for borrowers with excellent credit A low-cost, 30-year fixed interest rate
As little as $1,000 cash out-of-pocket, reducing the amount of money borrowers need to close
Reduced mortgage fees, including no private mortgage insurance requirement
Job loss payment protection, which covers up to six months of mortgage payments in the event of an involuntary job loss
The WHEDA Fannie Mae Advantage can be paired with the home buyers tax credit
WHEDA’s income and purchase price limits are substantially higher than previous years – as much as 10-13% - allowing more families and more homes to qualify for this loan.
“We’re realistic that credit is tighter to get these days. We know that we won’t be able to serve necessarily the same folks as in the past. But we think Fannie Mae’s Affordable Advantage product is going to be the right tool the state needs to get people into safe, affordable homeownership,” said Riley.
OMG, the lengths that they will go to to prevent the markets from returning to a “normal” equilibrium!
By ensuring that there is still plenty of very-low-cost zero-down purchase money, they are trying to re-inflate. The only (minimal) difference is that they state that it will only be available to those with “excellent credit”. I wonder what they mean by that—maybe 580 and above?
Yeesh.
Great find, jeff.
“SOON TO BE NATIONWIDE?”
Where in the article does it suggest or infer that it would be nationwide?
“Where in the article does it suggest or infer that it would be nationwide?”
It doesn`t, I do.
Jeff’s post relates to this re-post from last week.
http://tinyurl.com/2cej26j
It’s a pilot program in 3 or 4 states and it might go national. Look at what my good friend and noted economist Dean Baker says about the latest desperate effort:
“You’re not necessarily helping if you’re helping them buy a home where they’re in the position they won’t be able to afford it. I don’t understand the logic of this. ***House prices are still going to fall***. And when they do, we haven’t helped these people who are going to have to work like crazy to pay their mortgage off, or they’re going to default. If you’re in a situation where this is the only mortgage you can get, you shouldn’t be buying a house.”
Realtors are Know-Nothings.
I can put with their incompetence and laziness, but I CAN’T STAND their effing arrogance!
Racism alert
Tree trimmer attacked by Africanized bees released from hospital Sunday
http://www.wtsp.com/news/topstories/story.aspx?storyid=140502&catid=250
“Africanized?”
(((shakin my head)))
Whats next?
Economy destroyed by AFRICANIZED president?
How come only pathologies are “Africanized?”
“How come only pathologies are “Africanized?”
Pathologies aren’t Africanized, the bees are. The bees originally came from Africa, what else should be called, killer bees, maybe?
If the bees came from Argentina then they would be called Argentenean bees when they are not being called killer bees.
Are Mexican fruit flies signs of a pathology regarding Mexico?
This just in: It has been reported that Japanese Beetles are now attacking Pear Harbor.
Hahahaha! That’s a good one, combo. I hate those miserable copper-colored critters with a passion. Tonight when making my nightly summertime garden rounds with my beetle-drowning-jar of rubbing alcohol in hand, I’ll think of it as a classic battle of good (me, of course) versus eeeeevil.
The “killer bees” originated in Brazil IIRC, where zoologists crosse the mor eaggresive African honeybees with the more mellow European honeybees. Apparently a few Queens managed to escape from the lab and the rest is history.
FWIW, the tiny black ants that are a perpetual plague in Southern California are “Argentinian Ants”
Argentinian Ants?
Are you trying to stir up trouble between California and Argentina?
One super-colony of Argentinian ants stretched 560 miles down the coast of California.
Terry Gross interviewed ant specialist Mark Moffett on Fresh Air a couple months ago. It’s worth a listen, very interesting.
I sounded like Cliff on Cheers, there.
One super-colony of Argentinian ants stretched 560 miles down the coast of California.
Sometimes it seemed like that super colony had a branch office in our home in Escondido. We couldn’t leave a dirty spoon in the sink overnight without drawing an invasion. All food had to be kept in tupperware in the cupboard or the same results would ensue.
I sure don’t miss those bastards.
Cliff: The very letters “D-N-A” are an acronym for the words “Dames are Not Agressive.”
Diane: They stand for dioxyribonucleic acid.
Cliff: Ah, yes, but uh parse that in the latin declention and uh my point is still moot.
Top 3 New Jobs in 2012:
1. FEMA Friend - Help the tens of millions of FEMA Campers across the nation with food lines and basic sanitation. Some crowd control; military or police experience helpful.
2. Squid Sergeant - Help the many mortgagors across the nation recover their Constitutionally protected property values and other trustee assets. Assist evictees to relocate swiftly. Protecting our Nation’s Banking Sytem is our God-given right! We are doing His work!
3. PhotonJournalist - Help catalogue the names, faces, addresses, phone numbers, email and bank accounts, Social Security numbers, spending, subscription and voting habits, and RFID chip I.D. serial numbers of consumers across the nation. Provide GPS coordinates to police and commercial authorities.
4. Piano Monkey- Beginning in 2010, flood the internet and airwaves with the same worn out hobgoblins in hopes that it will help the wingnuts gain office.
5. Magician. Continue to successfully hide those millions of people whose jobs were “created or saved” by all the various bailouts.
Freddie Mac says needs $1.8 billion from taxpayers.
WASHINGTON (Reuters) - Mortgage finance giant Freddie Mac (FMCC.OB) on Monday said it would need another $1.8 billion in aid from taxpayers, bringing its total request since it was taken over by the government two years ago to more than $64 billion.
The second largest U.S. residential mortgage funds provider reported a loss of $6.0 billion, or $1.85 per diluted share, in the second quarter, including a $1.3 billion dividend payment to the government.
That compares with an $8.0 billion loss in the prior quarter and is the best three-month performance in a year. The firm lost $840 million in the second quarter of last year.
The company said losses stemmed primarily from loans purchased or guaranteed between 2005 and 2008.
“Freddie Mac says needs $1.8 billion from taxpayers.”
Would this serve the GSE mission of keeping homes unaffordably priced?
Is there anything more subtle to the GSE’s current modus operandi than charging the U.S. tax base for the cost of propping up U.S. housing prices? What, if anything, am I missing?
This lowlife is as crooked as a dogs hind leg, but she’ll get away with. The race card will be played hard and heavy…
~ Bank in Maxine Waters case was weakest to get TARP help
Boston institution was slammed by collapse of Fannie, Freddie
Waters faces ethics charges for trying to help a bank to which her husband had ties.
The bank at the center of a House ethics investigation of U.S. Rep. Maxine Waters was the weakest to receive funds from the government’s Troubled Asset Relief Program at the time of its rescue, according to an analysis by the Investigative Reporting Workshop.
When then-Treasury Secretary Henry Paulson announced creation of the so-called “Capital Purchase Program” in October 2008, he said it was directed at “healthy institutions.” Nevertheless OneUnited Bank of Boston received a $12.1 million capital injection from the Treasury Department on Dec. 19, 2008. The money has not been repaid, according to Treasury Department documents.
Records show that as of Sept. 30, 2008, the latest quarter before the investment, OneUnited had “Tier 1 capital” of just 1.8 percent of assets. Of the 363 banks that got TARP money in the fourth quarter of 2008, at the height of the financial crisis, that was the lowest Tier 1 ratio.
In fact, none of the 987 banks that got TARP money between October 2008 and December 2009 reported a lower ratio in the quarter before they received federal cash. As of March 31, 2010, 16 TARP banks had lower Tier 1 ratios then OneUnited’s 4.98 percent.
Waters, a Democrat from Los Angeles, is alleged to have set up a meeting with regulators to help the bank, on whose board her husband served. OneUnited is based in Boston, but it has major operations in Los Angeles and Miami.
“This lowlife is as crooked as a dogs hind leg,”
A dogs hind leg isn`t that crooked, if it were it wouldn`t be able to walk.
to this day, i don’t understand how someone this useless and crooked could have a seat in our government.
i remember distinctly, when the government investigator looking into massive loans by FANNIE and FREDDIE and warning of impending disaster in housing if this wasn’t curtailed…………..
this low-life lambasted the investigator and said they should be investigated for impuning the reputation of Franklin Raines, saying how he was doing a great job increasing the number of homeowners in minority communities, which was his mission, and entitled to every dollar of the 10’s of millions they skimmed for running the agencies into the ground………….
also on the committee…………..barney frank.
If you think Fannie and Freddie are corrupt (and they are, thanks to Franklin Raines) then you better not look at HUD.
Doesn’t her brother play in Pink Floyd?
Utah Republican Senator Orrin Hatch has introduced a bill that could slim the government’s workforce. The Reduce and Cap Federal Workforce Act would bring down and freeze the number of civilian feds at February of 2009 levels. Agencies would need to make those reductions through attrition. The bill would exempt the Defense and Homeland Security departments and some intelligence agencies. Hatch says the government has become bloated, and his bill would cut it down to size.
There ya go. Of course the government was not too big in February 2009. I smell a running mate for Sarah…
The only thing bloated about the government is the number of contractors which outnumber the employees.
Thanks to this same line of “reasoning” (and I use the term loosely) the Federal watchdogs were crippled under Bush’s admin.
Hope nobody’s dog died or baby was poisoned, though I’m sure some of you took a hit from the SEC’s fabulous job.
Ee-gads, don’t get me started on government contractors.
And, true confession, I’m trying to become one. It’s kind of a personal thing — I look at a lot of federal websites and think, “OMG, that $#%^& is representing the United States of America? I could do better than that!”
Not to mention that I’ve done business with the feds before, and they were among the most enjoyable clients I’ve ever had. Add this to the fact that the feds pay electronically — no waiting for checks to show up in the mail — and you can see why this type of arrangement would be appealing to someone like Yours Truly.
Well, today I did battle with a federal website that I need to use in order to get a certain set-aside certification for my wee little business. Yes, I know. Set asides. But you do have to have the ability to do the work, and, in my field, I do.
Long story short: That website needed help of the sort that I could provide. Its interface was, shall we say, awkward. And dang if it just wasn’t working right. Server issues, the people on the other end of the tech support line told me.
I can’t help them with that, but, oh, I’m itching to give the feds a better online face.
Kud-blow sez…
A Democratic Panic Attack?
Larry Kudlow CNBC
With the disappointingly soft jobs report for July, and a faltering recovery overall, is Team Obama getting ready for some sort of new, liberal-left, Keynesian, big-bang stimulus package? Will they be desperate to “do something”?
Already there are rumors of an August surprise (to use the phrase of business columnist Jimmy Pethokoukis) where Fannie Mae and Freddie Mac forgive underwater mortgages held by millions of Americans. And with state and local government jobs having fallen 169,000 year-to-date, perhaps the Democratic Congress and the White House will seek an even bigger spending plan for teachers and Medicaid workers — on top of the $26 billion plan that just passed the Senate.
“Democrats are trapped by Tim Geithner’s statements that extending low tax rates for successful earners would actually imperil economic recovery.”
Or maybe the Democrats will come up with a new infrastructure-spending bill, perhaps for green technologies and whatnot. Or maybe they’ll extend unemployment benefits even more. My liberal friend Robert Reich is even talking up the New Deal’s Works Progress Administration (WPA), where the government employed millions during the 1930s.
With the announcement this week that Council of Economic Advisers chair Christy Romer will leave the White House to go back to teach at Berkeley, it looks like the center of economic gravity will shift leftward inside the West Wing.
“…where Fannie Mae and Freddie Mac forgive underwater mortgages held by millions of Americans…”
More hundreds of billions of dollars going “poof.”
Sounds like deflation to me.
Got cash?
How does one get one of them ‘forgivable’ mortgage thingees?
“Sounds like deflation to me.”
Sounds like free money to the borrower and the lender to me, in order to mitigate incentives for the borrower to walk away and leave the bank holding more REO inventory.
ore hundreds of billions of dollars going “poof.”
Sounds like deflation to me.
Poof all you want - we’ll make more.
Sincerely,
The Fed
“A Democratic Panic Attack?”
Panic…!?!
Hardly, I just show up early, locate every single Bush bot, clone or GOP spacecadet I see, target them all, lock on, push the KILL button on the voting video game machine and go merrily on my way for my pancake breafast.
Trying to save the world is hard work. You win a few…lose a few.
(I really love that purple boysenberry stuff)
“Hardly, I just show up early, locate every single Bush bot”
Is it as easy to locate a “Bush bot”, as it is to locate a “Barry-tard”?
More than 1,700 School-Based Positions Cut in CPS Budget Plan
Produced by City Room on Monday, August 09, 2010
Chicago Public Schools is unveiling a $6.4 billion budget plan for the upcoming school year. And to help balance that budget, CPS officials estimate more than 1,700 school-based positions will be eliminated. Those positions include high school teachers, custodians, clerks and teaching assistants.
The city’s teachers union has filed a lawsuit to prevent some of those layoffs.
School chief Ron Huberman says he’s willing to hear suggestions from the teachers union that would avoid layoffs, but time is running out.
HUBERMAN: If there is a rabbit in their hat where they can look at this budget, right, and produce savings and efficiencies that don’t harm students, we are of course going to look at it, but it’s August 9.
Huberman says the cuts in school-based positions are estimated to save more than $100 million.
Wanna bet there will be no RIF among the school administrators, except through retirement?
Since all school board employees are public servants, then their compensation should be a matter of public record. So maybe some local Chicago fishwrap can do an analytical story on the numbers of employed, and their compensation? For example, I believe the people from Chicago and Illinois probably would like to know what is the ratio of administrators to teachers, and how these salaries compare to each other. But is this way too much to ask from the local Chicago MSM?
Black people will continue to be lynched as long as they keep trying to “rise above racism”
???
This is a housing blog, not a race relations rant blog.
Eddie needs to pay attention to this announcement as well!
“TrueSpooky™”
Br’er Fox constructs a doll out of a lump of tar and dresses it with some clothes. When Br’er Rabbit comes along he addresses the tar “baby” amiably, but receives no response. Br’er Rabbit becomes offended by what he perceives as the Tar Baby’s lack of manners, punches it, and in doing so becomes stuck. The more Br’er Rabbit punches and kicks the tar “baby” out of rage, the worse he gets stuck. Now that Br’er Rabbit is stuck, Br’er Fox ponders how to dispose of him. The helpless, but cunning, Br’er Rabbit pleads, “but do please, Brer Fox, don’t fling me in dat brier-patch,” prompting Fox to do exactly that. As rabbits are at home in thickets, the resourceful Br’er Rabbit escapes.
Using the phrases “but do please, Brer Fox, don’t fling me in dat brier-patch” and “tar baby” to refer to the idea of “a problem that gets worse the more one struggles against it”
“racism”
I don`t like that. But hey, how about “huumism”
I`m a “Humist” and I practice “huumism” daily. I don`t like a most human beings, doesn`t matter what color they are though. Now there are some humans I like, once again it doesn`t matter what color they are. There are black humans I like, there are Hispanic humans I like and there are white humans I like. Can`t say there are any Oriental humans I like, but there aren`t any I don`t like either, don`t know any that well. Most of the humans I don`t like are white humans and I am white, so what does that make me, Oh that`s right I`m a “Humist” I don`t like most humans. But please Spook dont be offended if you are not a white human, it`s mostly white humans I don`t like because it`s mostly white humans that I have dealt with in my life. Whatever race you are, I am sure if I had dealt with more of them I would like less of them.
P.S.
I do like most dogs.
“I do like most dogs.”
Are you sure you didn’t mean you’re a “humorist”, jeff?
The burning question left in my mind by your explication of “Humism”, though, is whether dogs and small children like _you_.
“The burning question left in my mind by your explication of “Humism”, though, is whether dogs and small children like _you_.”
Yes they do! Dogs of all ages and children of all race. It`s really just adult humans I have a problem with.
“Yes they do! Dogs of all ages and children of all race. It`s really just adult humans I have a problem with.”
Then you’re alright in my book, jeff…
Matt Simmons apparently drowned at his home Sunday night
NORTH HAVEN, Maine (NEWS CENTER) - The Knox County Sheriff’s Department says Matthew Simmons, the founder of the Ocean Energy Institute, drowned at his house on North Haven late Sunday night.
Simmons was a leading investment banker for the energy industry and had recently retired to work full time on the new Ocean Energy Institute.
He was a leading proponent of offshore wind power and had started raising money to develop and build offshore turbines.
He and his family had also bought and rebuilt the Old Strand Theater in downtown Rockland.
OMG, this is horrible news. Not only was Matt Simmons a decent, intelligent man, he had so much off offer the world going forward. His legacy will live on. Sad to hear, indeed.
Died of an apparent heart attack, while in his hot tub. Autopsy today. Thank you,wmbz.
I’ve had heart flutters in a hot tub. Happened in my early 30s.
Fortunately, I had enough presence of mind to get out of said hot tub. And, wouldn’t you know it, once I did, my Slim-ticker was just fine.
That was the last time that my slender body ever went into a hot tub.
No problem, he was a sharp fellow, with some really good ideas.
wmbz-
He was recently interviewed by phone on some bubblevision show, where he ripped BP, our govt, and the PR machine a new one, but with class and a deep understanding of offshore drilling. The man knew his stuff, and still owned his soul at 67! For an Energy Investment Banker, that’s impressive. I life well lived.
Oh wow. It’s 9:49 pm here on the west coast. I just stumbled on this post.
Very bad news. I respected Matt Simmons and have read “Twilight in the Desert” and kept up with his web site.
Say it ain’t so. Please.
Americans buying U.S. Treasuries, which the Chinese are calling a bad investment.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=absG1Wh492W8&pos=5
“Investors who have lived through the crash in technology stocks in 2000, the collapse of equities and the housing market in 2008 are increasing the emphasis they place on asset preservation, which may help keep yields lower for longer, said CRT Capital’s Ader. ‘Three times in the last 10 years I have been personally hit, I’ve experienced a loss of wealth, and I’m not unique as a Baby Boomer,’ Ader, 52, said. ‘This changes dramatically the nature of how we’re going to be looking at our future.’”
The question is whether the great boomer stock selloff is underway. And if it is, who will buy, as younger generations are poorer and facing facing lower wages, higher taxes and diminished public services? Or, at what price will they buy? Same as in housing — you can’t screw future generations and still expect them to buy you out.
“I do not think U.S. Treasuries are safe in the medium and long run,” Yu, a member of the state-backed Chinese Academy of Social Sciences, wrote. The ’scary trajectory’ of budget deficits and a growing supply of U.S. dollars put their value at risk, he said.”
The question is whether the great boomer stock selloff is underway. And if it is, who will buy, as younger generations are poorer and facing facing lower wages, higher taxes and diminished public services?
Why the bankers and FED will be the buyers of course.
They will take control via a series of inflation and deflation which they manipulate.
A one-month increase in inventory of 6.3% occurs at an annualized rate of (1.063^12-1)*100 = 108% (a more-than-doubling of current inventory over 12 months’ time).
WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal
* Real Estate News: A Glass House, Fannie’s Losses and Low Mortgage Rates
* Atlanta’s Pink Elephant Finally Sells, $25 Million Off
* August 6, 2010, 10:18 AM ET
Housing Inventory Grows
By Nick Timiraos
Is this what the beginning of a double-dip feels like?
The number of homes listed for sale grew in many U.S. cities in July, a month when inventory typically declines.
The supply of homes available for sale in 26 major metropolitan areas at the end of July increased 2.6% from one month earlier, the seventh straight month-over-month jump, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The figures include all single-family homes, condominiums and townhouses listed on local multiple-listing services in markets where the firm operates. (See the data.)
Nationally, inventories typically decline in July as the big spring sales months give way to a more sluggish summer. Zelman & Associates, a research firm, says July listings have typically fallen by 0.8% from June over the past 28 years.
Compared to one year ago, the July inventory in the 26 markets covered by ZipRealty was up 7%.
Western markets continued to see the largest monthly increases in inventory, led by a 9.6% gain for Las Vegas, 7.9% for Orange County, Calif., and increases of 6.3% in San Diego and the San Francisco Bay Area.
Markets with an increase in inventory also saw declines in list prices. Median list prices fell by 3.6% in Phoenix and San Francisco, and by 3.3% in Las Vegas, from the previous month.
“We just don’t have as many people out actively transacting,” says Pat Lashinsky, chief executive of ZipRealty. “They’re waiting, they’re looking, they’re seeing homes, but they’re not buying.”
California cities also had the largest annual increases in housing inventory: San Diego (53%), Orange County (32%), and San Francisco (28%).
…
UN says Pakistan floods worse than 2004 tsunami
Aug 9 09:42 AM US/Eastern
The United Nations said Monday that massive floods in Pakistan had affected 13.8 million people and eclipsed the scale of the devastating 2004 tsunami, as anger mounted among survivors.
The Pakistani government and UN officials have appealed for more urgent relief efforts to cope with the country’s worst ever floods, with President Asif Ali Zardari due to return home after a heavily criticised European tour.
The entire northwestern Swat valley, where Pakistan fought a major campaign to flush out Taliban insurgents last year, was cut off at the weekend as were parts of the country’s breadbasket in Punjab and Sindh.
“This disaster is worse than the tsunami, the 2005 Pakistan earthquake and the Haiti earthquake,” Maurizio Giuliano, a spokesman for the UN Office for the Coordination of Humanitarian Affairs (OCHA), told AFP.
He said the 13.8 million affected outstripped the more than three million hit by the 2005 earthquake, five million in the 2004 tsunami and the three million affected by the Haiti earthquake in January this year.
I didn’t realize natural disasters were a competitive sport.
Come to think of it, our church took up a collection for tsunami victims and for Haiti, but so far nothing for Pakistan.
Never mind. Ignore. They might have done so when I was in Boston one weekend.
McDonald’s July Sales Rise 7%, Topping Estimates
McDonald’s Corp. said comparable- store sales climbed 7 percent last month from a year earlier, the most in more than a year, fueled by U.S. and Asian sales at the world’s largest restaurant chain.
Analysts projected global sales would advance 5.1 percent, the median of three estimates compiled by Bloomberg. Sales at restaurants open at least 13 months rose in all regions, with a 5.7 percent increase in the U.S. and a 10 percent gain in Asia, Africa and the Middle East.
Sales of frappes and fruit smoothies helped fuel growth as temperatures surged worldwide. July was the second-hottest month in New York City on record, according to U.S. government data. McDonald’s, led by Chief Executive Officer Jim Skinner, has added frozen drinks and other items to attract diners to its locations outside regular meal times.
See, global warming ain’t so bad!
Sales up, but share price is always a concern.
New Leaf Tea fired nearly 1/3 of its employees today as the company attempts to reduce expenses even as it experiences significant sales growth.
The firings are part of a re-staged sales effort to divert cash and other resources into five key markets, according to COO Bill Sipper. While New Leaf will not be pulling out of any states, the workforce reduction will allow the company to focus on slotting fees and promotions within areas in which it has the strongest potential to deepen its consumer base, according to Sipper.
“Our volume is increasing at nice levels and we’re definitely outpacing the category and our competition,” Sipper said. “But our overhead was increasing at higher levels than we would have liked.”
New Leaf Tea COO Bill Sipper ?
I think it was Office Max or one of those chains that fired all of it’s good employees to boost earnings, I suspect so the CEO could make one more good bonus before the company went belly up.
IIRC it was Circuit City. They replaced anyone with any technical knowledge with minimum wage idiots.
They went BK about a year later.
And Best Buy ended up with their customers.
Darwin…
I believe that was Circuit City. Short term boost, long term suicide.
Short term boost, long term suicide.
Sounds familiar.
Thanks, I almost forgot the other corollary of voodoo, (dang it) er, “supply” side economics.
Cut staff when times are bad and claim hardship and cut staff when times are good and claim “strategic repositioning.”
Economic Slowdown Catches Up With Nascar
Associated Press
Empty seats were common last month at the Brickyard 400 in Indianapolis, where attendance was about half that of 2007.
The Behler family could see that firsthand while sitting atop their old school bus in the infield at Pocono Raceway for last week’s race in Long Pond, Pa. From that perch, they saw empty patches of grass with untrampled dandelions that in years past were covered by other spectators’ cars, campers and trailers.
Fans like the Behlers who are showing up to races are spending less, too.
“Everybody’s still coming, but no one’s spending,” said Susan Behler, who arrived last Sunday, race day, instead of Friday night to save money. “Three years ago, I used to spend $200 or $300 every time I came here. Now, it’s a question: do I need it?”
Other sports leagues have been hurt the past two years. But Nascar — with its heavier reliance on working-class fans, low fuel prices and the beleaguered auto industry — has suffered disproportionately, racing industry executives say.
The NASCAR brass will have to order up more, and more spectacular, crashes.
Triad foreclosures rise 30 percent
The Business Journal of the Greater Triad N.C. Area
Foreclosure filings in the Triad jumped about 30 percent during the first six months of 2010 compared with a year ago, according to state figures.
In Guilford County, the number of filings rose to 2,176 from January to June this year, a 31 percent increase from 1,655 during that time period in 2009. Meanwhile, Forsyth County filings spiked to 1,266, a 30 percent jump from 970 during the first six months of 2009. The number of filings in Alamance County rose to 539, up 30 percent from 415 a year ago.
State officials said they expect foreclosures to continue rising through 2010 because unemployement remains high.
Three Years on, Is the Financial Crisis Over?
CNBC ~ August 9, 2010
Three years ago to the day, BNP Paribas, the French banking giant, suspended redemptions on three funds, marking the beginning of the credit crunch.
The collapse of the US subprime market and its knock-on effects of the mortgage-backed securities market began a series of crisis that have come close to bringing the global economy to its knees.
Three years later, it appears the world remains clouded by uncertainty. Unprecedented actions by central banks and governments across the world have averted a melt-down in the global economy but commentators say we are not out of the woods yet.
“The crisis will be over when bank lending returns to normal, equities rise and risks come down, this has not yet happened,” Brendan Brown, head of research at Mitsubishi UFJ Securities, said.
“The major problem is that quantitative easing has been counter-productive. The central banks have stopped prices from falling. When prices fall, people buy but by shoring up asset prices the central bankers have stood in the way of recovery,” he added.
The Federal Reserve starts a meeting Tuesday to decide on rates and speculation is mounting over whether the Federal Open Market Committee (FOMC) will announce further quantitative easing to help shore up confidence.
“The big risk is that the Fed reacts to its own depression. The Fed could over-react and would be better off going on holiday rather than announcing yet more QE,” Brown said.
Serial bottom callers will regularly call bottoms.
Three years.
Get Mr. Peabody and let’s take the Wayback Machine to 2007. August 2007, they were still denying there was any problem. August 2008, still in denial of a major problem, recovery by 4Q.
August 2009, recovery starts from the recession just acknowledged.
August 2010, recovery strong enough for little people to part with their money, but too weak to stand on its own.
U.S. Stocks Advance Amid Speculation of Fed Stimulus Measures
Aug. 9 (Bloomberg)
U.S. stocks climbed, with the Standard & Poor’s 500 Index building on last week’s rally, amid speculation the Federal Reserve may introduce measures to stimulate economic growth tomorrow.
The Fed’s Wall Street cargo cult following has high hopes now for more near term QE. It would be pretty interesting if the FOMC says no mas.
Western Maryland hit harder by recession
Northrop Grumman, Kongsberg Automotive closures add to woe
The Baltimore Sun
Two well-paying blue-collar employers in Washington County are shuttering their businesses, adding to the woes of this Western Maryland county that already has a jobless rate among the highest in the state.
The soaring unemployment rate is a painful step back for a county that has tried in recent years to diversify its economy and attract new, high-technology businesses to the area. Known as “Hub City,” Hagerstown has been at the center of a regional economy for years, with its highway connections and rail lines offering trucking and distribution companies easy access.
But over the past three years, the weakening economy has bled the Hagerstown area of jobs, mainly related to construction and manufacturing. In 2006, Washington County’s unemployment rate averaged about 4.4 percent. In June, it stood at more than 10 percent and has been as high as nearly 12 percent this year, while the state’s hovers just above 7 percent.
Structured Notes Are Wall Street’s `Next Bubble,’ Whalen Says
Aug 9, 2010
Wall Street banks are creating the “next investment bubble” by selling opaque and unregulated structured notes to investors hunting for yield, according to Christopher Whalen, managing director of Institutional Risk Analytics.
Using the same “loophole” that allowed over-the-counter sales of collateralized debt obligations and auction-rate securities, firms are pitching illiquid structured notes whose value is partly derived from bets on interest rates, Whalen wrote today in a report.
Whalen, who predicted in March 2007 the collapse of the mortgage-backed securities market, said that these structured notes “promise enhanced yields that go well into double digits” and “often come with only minimal disclosure.”
“The only trouble is that the firms originating these ersatz securities, as with the case of auction-rate municipal securities, have no obligation to make markets in these OTC structured assets or even show clients a low-ball bid,” Whalen wrote.
Structured Notes Are Wall Street’s `Next Bubble,’ Whalen Says
Aug 9, 2010
It’s about darn time I say.
Recession-Plagued Nation Demands New Bubble To Invest In
WASHINGTON—A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.
“What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future,” said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. “We are in a crisis, and that crisis demands an unviable short-term solution.”
The current economic woes, brought on by the collapse of the so-called “housing bubble,” are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.
Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to† begin encouraging massive private investment in some fantastical financial scheme in order to get the nation’s false economy back on track.
he most support thus far has gone toward the so-called paper bubble. In this appealing scenario, various privately issued pieces of paper, backed by government tax incentives but entirely worthless, would temporarily be given grossly inflated artificial values and sold to unsuspecting stockholders by greedy and unscrupulous entrepreneurs.
“Little pieces of paper are the next big thing,”
http://www.theonion.com/articles/recessionplagued-nation-demands-new-bubble-to-inve,2486/
“Little pieces of paper are the next big thing,”
Next?! This has been the ONLY thing since we sent our industries offshore in the 1980s!
Reader’s Digest Leads Magazine Circulation Declines
Aug 9, 2010
U.S. consumer magazine circulation completed two straight years of declines, weighed down by sliding sales of Reader’s Digest and Playboy magazines in the first six months, Audit Bureau of Circulations data show.
Average total circulation for 440 magazines slipped 2.3 percent to 313.8 million from a year earlier, the trade group said in an e-mail today. Industry circulation has declined since 2008’s first half, when it was unchanged.
Magazines rely on circulation figures to set advertising rates and attract new marketers, said Ken Doctor, an analyst with Outsell Inc. in Burlingame, California. Continued declines may damage publishers’ ability to boost profits, he said.
“Magazine publishers are going to be looking more at tablets to grab readers and advertisers,” Doctor said in an interview, referring to devices such as Apple Inc.’s iPad. “Tablets give magazine publishers a chance for a do-over of sorts, by presenting their content in a totally new way.”
No. Both publications haven’t had relevant, readable articles in decades.
Believe it or not, Playboy used to have some great articles. Really cutting edge and controversial stuff. They did the edgy stuff that Rolling Stone magazine does now.
My favorite Playboy article was an in-depth interview with “Wall Street Week’s” Louis Rukeyser. After the interview was completed they got the photographer out to take his picture, at which time Lou started to get undressed!
He said didn’t he have to pose nude in Playboy? So there he is in a full page photo, naked as they day is long, standing by the pool and covering himself modestly with a copy of the Wall Street Journal.
Gates Announces Plan to Cut Major Military Command in Virginia
FoxNews.com
Defense Secretary Robert Gates on Monday announced a plan to shed one of 10 major military commands as part of his effort to strip billions from the Pentagon budget.
The plan to eliminate Joint Forces Command in Norfolk, Va., is sure to draw heavy criticism from Virginia lawmakers who opposed the idea weeks before Gates decided to make it official.
Gates also detailed other efforts to reduce waste and duplication at an afternoon press conference, including a plan to cut the Pentagon’s use of outside contractors by 10 percent next year.
The Virginia-based command trains troops from different services to fight together. Joint Forces Command, with nearly 4,900 employees and annual salaries of more than $200 million, was the largest single cut announced Monday.
Six Virginia lawmakers issued a written statement opposing the cut last month after a board of advisers first proposed the idea. The lawmakers, including Democratic Sens. Jim Webb and Mark Warner, called the proposal a “step backward” and potentially “harmful” to military capability.
“It is illogical … to recommend that we undo what our nation has worked so hard to achieve in military jointness over the past two decades,” they said.
The command holds more than 1 million square feet of real estate in Suffolk, Va., and Norfolk, Va.
Savings will be offset by the cost of shifting some jobs and roles elsewhere. The Pentagon has already announced a target of cutting $100 billion over five years. And earlier this year Gates ordered a top-to-bottom paring of the military bureaucracy in search of at least $10 billion in annual savings needed to prevent an erosion of U.S. combat power.
Gates took aim at what he called wasteful business practices and too many generals and admirals, and noted that “overhead” costs chew up as much as 40 percent of the Pentagon’s budget.
Gates took aim at what he called wasteful business practices and too many generals and admirals, and noted that “overhead” costs chew up as much as 40 percent of the Pentagon’s budget.
I just finished reading Matt Latimer’s book, Speechless, about his work as a speechwriter. Before he was part of GW Bush’s speechwriting team, he worked for Donald Rumsfeld over at the Pentagon.
Although his take on Rumsfeld was quite positive, he wasn’t as enamored with the Pentagon press office. Bunch of no-talents seeking to avoid work in every way possible.
I think Donald Rumsfeld was just the inside gopher, errand boy and up front hardcore PR man with name recognition. He was Cheney’s boy although Cheney had once worked for him. These type men are inter-changable when it comes to a cause.
Guys retired generals Wayne Downing(WAD) and Barry McCaffery and the rest of the TV media experts were the out-house spinmisters. The neocon’s had a terrific loyal network and they all had a job, a “somewhat” common goal and a desire to fulfill it.
“Powell felt Cheney and his allies — his chief aide, I.
Lewis ‘Scooter’ Libby, Deputy Defense Secretary Paul D. Wolfowitz and Undersecretary of Defense for Policy Douglas J. Feith and what Powell called Feith’s ‘Gestapo’ office — had established what amounted to a separate government.”
— Colin Powell – from Bob Woodward’s book, Plan of Attack
Even with the “Gestapo”, I would also say that that was an understatement by Powell. who finally thought that he was an insider, but never really knew or completely understood what he was up against.
(the neocons also purged the old generals and admirals at the pentegon before they went to work)
Latimer tried to hire a woman who was eminently qualified for her job. (IIRC, she was to be some sort of researcher/fact-checker for the speechwriters.)
She was turned down for the job, and Latimer wrote that it might have had something to do with her, ahem, orientation.
Oh and I do agree with Nixon about Rummy.
“In 1971 Nixon was recorded saying about Rumsfeld “at least Rummy is tough enough” and “He’s a ruthless little bastard. You can be sure of that.”
Remember August 9, 1974? Nixon wasn’t lookin’ too tough on that day.
San Diego’s local economy is going to see a repeat of the early 90’s with home prices tumbling. I know first hand because I work for one of these companies and word is already out we are all out the door in a month. Defense contractors are the back bone of San Diego’s economy:
Huge defense cuts could affect S.D. companies
Monday, August 9, 2010 at 3:44 p.m.
The Global Hawk unmanned aerial vehicle is designed by Northrop Grumman in San Diego and is widely used for intelligence gathering in the Middle East.
/ Northrop Grumman
The Global Hawk unmanned aerial vehicle is designed by Northrop Grumman in San Diego and is widely used for intelligence gathering in the Middle East.
The Global Hawk unmanned aerial vehicle is designed by Northrop Grumman in San Diego and is widely used for intelligence gathering in the Middle East.
Photo by K.C. Alfred
Aerial view of the General Dynamics/NASSCO yard in San Diego. (Archive image)
U.S. Defense Secretary Robert Gates said today that the defense budget must be cut by $100 billion over the next five years, and that about 10 percent of that money will directly affect contractors, especially those who support or directly work in intelligence gathering.
(Story on Gates’ proposal)
Gates called for the elimination of the Joint Forces Command in Norfolk, Virginia, and the phasing out of scores of military and civilian executive positions. But it is unclear where other cuts will be made. The cuts — if they survive Congress — could impact San Diego County contractors, which are involved in a broad variety of work. The reduction has the potential to affect everything from orders for new unmanned spy aircraft to the repair of Navy ships.
Here is a sample of defense companies with local operations, and what they’re working on:
Northrop Grumman has plants in Rancho Bernardo, Kearny Mesa, Mission Valley and Carmel Mountain Ranch. The company has about 4,000 local employees, many who develop Global Hawk, an unmanned aerial vehicle (UAV) that’s been widely used in the Middle East for intelligence, surveillance and reconnaissance (ISR). Northrop also is working on a military airship.
General Atomics Aeronautical Systems has plants in Poway and Sabre Springs, where it designs and develops the Predator and Sky Warrior UAVs. The company has 3,200 employees and is hiring 40-60 workers a month.
“Our business is positioned well for the long-term, and we historically have been successful at obtaining required funding for much needed ISR assets despite standard budget cuts,” said Kimberly Kasitz, a General Atomics spokeswoman.
Science Applications International Corp. of San Diego, which has about 3,900 employees. SAIC has contracts to maintain and improve various computer and electronic systems, especially on warships and submarines.
Cubic Corp. of San Diego, which has about 1,100 employees, many of whom work on combat training technology for fighter pilots.
General Dynamics/NASSCO of San Diego, which recently laid off 560 workers and subcontractors due to a downturn in commercial and military shipbuilding and repair. The company has about 3,800 employees.
BAE Systems Ship Repair of San Diego, which repairs and modernizes warships. The company has between 200 to 400 workers.
Continental Maritime of San Diego, which repairs warships (200-400 employees)
Marine Group Boat Yard Works of Chula Vista, which repairs and services military, government and commerical vessels. The yard, which has 102 employees, is currently building small boats for the Navy
It’s also possible that the cuts will affect the Space and Naval Warfare Systems Center in San Diego, a Navy command that uses scores of private contractors, especially on projects involving intelligence-related equipment. Spawar has about 4,500 employees in San Diego and Point Loma, most of whom are civilians
Nixon should’ve pulled out in 1913.
noted that “overhead” costs chew up as much as 40 percent of the Pentagon’s budget ??
Ya think !! Anyone surprised ??
Where is my $600 leather toilet seat???
man it’s so much softer and bigger and allows a man to comfortably enjoy the morning briefing reports without all the irritation and lower back pain from that a $6 walmart Chinese one made from toxic materials
*COUGH* Haliburton *COUGH*
Carnac The Munificent
New tax filing reveals $156 million transfer from Johnny Carson estate to charitable foundation.
AUGUST 9–In an unprecedented act of celebrity philanthropy, the charitable foundation created by Johnny Carson has reported receiving $156 million from a personal trust established by the entertainer years prior to his January 2005 death, The Smoking Gun has learned.
The nine-figure transfer from the late entertainer’s estate was disclosed in a tax return filed three months ago by the John W. Carson Foundation, records show. The massive bequest leaves the Carson foundation with assets dwarfing the largest Hollywood charities–even the foundation run by entertainment titan David Geffen, whose organization listed assets of $80 million on its most recent tax return.
Which will then be run just as the others are: to the benefit of the administrators.
Turned on NPR this morning while I was out running errands.
Had an infuriating story about the child “victims” of foreclosure. And they asked for callers to comment, but they only wanted “victims” and their parents.
Seems that the same type of parents who lie on their mortgage applications also lie to the school district about where they live after they have to move for non-payment of the mortgage. And for some reason, it’s an awful thing (according to NPR) that schools DARE to hire investigators to catch these tax and service cheats.
Then a lot of sob stories from parents who, boo hoo hoo!, had to MOVE. And the horror of their children having to live in rental housing! Why, they may get picked on by the other kids. One suggestion is that schools raise money to keep deadbeats from having their houses taken back. (I couldn’t make this up if I tried.)
This is one reason we should kill all funding for Public radio…
Plus the fact they hogged up all the frequencies back in the 60’s and 70’s taking away any chances the “public” can have their own community radio stations…..and don’t forget those $30-40K a year communications colleges that only have an internet station
again there are no FM frequencies available on the educational band due to the “Public” radio of the states making sure no one else gets a voice……..
again there are no FM frequencies available on the educational band due to the “Public” radio of the states making sure no one else gets a voice……..
Baloney. Besides our public radio station, which has a lot of listener input, Austin has KOOP, KAZI, KMFA community stations and the Liberty independent station that hosts Alex Jones daily.
I’d rather pay for public radio than to pay down your credit cards.
Hmmmm that’s very unusual…….
I will see how that happened, maybe Texas was CHEAP….and didnt want to pay for public radio…and allowed that opening to occur.
1980 - KUT installed its new public radio network satellite earth terminal and became NPR’s southwestern regional uplink, one of only 17 network stations with the capability to transmit as well as receive satellite-delivered radio programs.
1982 - KUT began broadcasting in stereo at 90.5 MHz with 100,000 watts of power, antenna height at 1,595 feet, and a total signal radius of 97 miles—bringing to fruition the federal funding and extraordinarily lengthy regulatory application process that had been started in 1972.
97 mile radius and no one in that area will ever get even a new low powered fm station forever……
we have our public radio station kut
But we also have these community stations - KOOP, KAZI, KMFA, and the one Alex Jones is on; there’s a UT student station as well. The latter originally had a very small broadcast area, but now reaches way out into the suburbs.
Hip…The Texas Guvmint was Slow in hogging the frequencies….
you guys got lucky
Here’s that tear-jerker of an NPR story about child “victims” of foreclosure and their scheming parents who lie to keep them in the district. (After all, if they lie on the mortgage application, they’ll lie on everything else.)
http://www.npr.org/templates/story/story.php?storyId=129086929
Ursine culture is the new black! Will bovine-brained commentators be banned from the MSM?
The Rise of the Permabears
By LANDON THOMAS Jr.
Published: August 9, 2010
LONDON — The central question dividing economists these days is whether Western governments should spend more to ward off a potential second recession or retrench to hold down their ballooning debts in a bid to restore confidence among investors.
But Albert Edwards, an investment strategist in London for the French bank Société Générale, says the debate is a waste of time. To be specific, he forecasts a “bloody, deep recession” that produces a stock market collapse of at least 60 percent, followed by years of inflation of 20 percent to 30 percent as persistent money printing by central banks desperate to improve the situation ultimately sends prices soaring.
Mr. Edwards’ leather sandals and chuckling demeanor belie his reputation as perhaps the City of London’s best-known permabear — a species that has long flourished on the outer margins of the financial industry but rarely inside mainstream banks.
That is no longer true.
With the shocking financial crisis of 2008 still fresh in people’s minds, and gloom-spinning economists like Nouriel Roubini having achieved pop-icon status, even long-standing pessimists like Mr. Edwards — who has been forecasting a Japanese-style stock market slump in the United States since 1997 — are being treated with newfound respect.
In many smart-money circles, listening to bears has become stylish, especially now that doubts remain about the sustainability of the euro zone, concerns grow that the United States may slip back into recession and that even the Chinese growth engine may seize up. But to some, the popularization of extremely dire forecasts suggests that the pendulum may have swung too far.
“Nothing is ridiculous anymore,” said Philippe Jabre, a hedge fund executive in Geneva. “There is no doubt that these days extremely negative research is being tolerated more.”
…
Looks like that old Gaming the MLS caper’s still with us. House around the corner had been for sale since, oh, April.
Last week, I noticed that the “For Sale” sign had disappeared from the front yard. Just like that — poof!
Since the local agents tend to trumpet things like “Sale Pending” and “Sold” like they’re the Second Coming, I figured that the ownership hadn’t changed.
Well, this past Saturday morn, I noticed a new “For Sale” sign right next to the “For Rent” sign that’s been up for several weeks. The FS is with the same agent as before, but the old MLS number doesn’t work now.
Methinks that it’s one of those “New Listing!” capers.
Meanwhile, the house behind me, which has no street frontage, had a “For Sale” sign nailed to the carport roof’s fascia. Or it did. I didn’t see it when I was weeding the back yard this morn.
Methinks that the agent (who’s also listing the other house) may be about to post a new sign. With a new MLS number to boot.
One $700K listing in town was on the market a while (a year?). At an open house we were told that the owners had rented it out after buying a new house and failing to sell the first one. The renters had done some damage before losing their visas and being shipped back to wherever they came from, so the owners had done a bit of repair work and were eager to unload it so as not to become landlords again. They lowered the price $15K and it still sat and sat (its probably only worth $500K at today’s prices IMO). A few months ago a “for rent” sign was added to the for sale sign, and I noticed today the signs are gone. No sign of a sale record, so I believe the owners have become landlords once again.
So is HPQ a buy at 42? I can’t believe that Hurd is not replaceable.
All they need is another guy obessed with friring people and moving jobs offshore and they should be fine.
Or do you believe that HP products are superior to the competition?
O/T
I have several pounds of black drum fillets. Any advice on how to cook them? (I usually cook whole fish, not so familiar with fillets.)
I’ve got lots of onion, garlic, plenty of different kinds of peppers from the garden, most types of fresh herbs.
DennisN? Anyone?
I’ve never seen or cooked a Black Drum.
From wikipedia….
Yuch.
It is recommended those over 15lbs pounds (7 kg) should be released, as the flesh is very coarse and often contains worms.
This sounded good….
Black drum creole.
http://cookeatshare.com/recipes/black-drum-creole-85759
Black drum is awesome. It’s far more flavorful than red drum (redfish), which we also catch in the flats the intracoastal waterway between Rockport and Aransas Pass. Black drum heads make good fish stock.
These fillets were cut from 16-22 inch long fish, so the flesh will be good.
I think I’ll try the creole tonight as I’ve got everything on hand. I’ve got so many peppers of different shapes and colors, so I’ll use lots of peppers.
As to worms in fish, when you eat high end sushi one of the things you are paying for is the sushi master’s skill at deftly carving the long worms out of the slab of tuna. (The worm’s body twists around through the tuna muscle fibers, and a big slab of tuna will have 2 or 3 long ones winding through it.) That’s the first step after they receive the tuna shipment.
That’s what our teacher in “sushi 101″ class at Central Market told us anyway.
“…deftly carving the long worms out of the slab of tuna…”
Do sushi worms cause problems in the human digestive tract?
What I gathered from the sushi chef was that they cut long worms from the slabs of tuna that the special sushi suppliers send fresh to restaurants. Since aesthetics are an important part of sushi, they need to maximize the long smooth muscles fibers when they remove the worms from the flesh.
Otherwise, the worms are cut from the tuna that we get in tuna steaks, sashimi grade tuna (previously frozen), canned tuna, cat food, etc., without so much concern. There’s the prime bits and the chopped up bits.
What causes problems in the human digestive tract is the oilfish, butterfish, or other names. I can’t find a good online source to link to right now, but I’ve read about it.
It is awesomely delicious, awesomely. And indigestible in some way, so a common - perhaps universal - reaction is intestinal leakage.
I don’t know if it was sold in the high end places. It wasn’t sold in grocery store sushi coolers AFAIK. But it definitely sold in the medium and good - places for a while.
I think not any more.
I like to take fillets and put them in a large freezer zip lock, with Kraft zesty Italian dressing as the marinate. Leave them in the refrigerator over night, and cook them skin side down on the grill.
cook them skin side down on the grill
I wish these had a skin side on them. These are naked. It’ll have to be oven or pan. I like the marinade in freezer bag idea.
If I cook some that way, I can saute onion and peppers, get fresh tortillas and make fish fajitas.
As Recovery Loses Speed, Fed Mulls Ways to Help- AP
Federal Reserve policymakers are in a bind: they want to say and do things that will energize the economy, but in doing so they risk making things worse by sending signals that the recovery is in really bad shape.
We need ‘Mo money…
I say the fed should print up as many trillions as it takes to send us all $250,000.00 (or more) so we can get this show back on the road. Problem solved, now get out there and spend you consumers, for the good of the country.
Trading volume in the basement today as the world hangs on Benny’s every word…
And so the boyz ask, growth is good but are lower borrowing even better? Can they have both?
lower borrowing costs that is. oops.
OK maybe my $3000 paydown on a credit card maybe unworkable
so how about a $750-$1000 check towards a desktop, laptop, netbooks?
Upgrade millions of Americans into the computer age…..
One requirement they all have wifi and at least 1 year of high speed internet service… ……..since we are all being forced into being a mobile society to keep up with the coming job market.
Finally, at lest she is charged…
Maxine Waters Charges Spelled Out by U.S. House Ethics Panel.
A congressional ethics panel accused California Democrat Maxine Waters of bringing discredit on the U.S. House of Representatives by helping get government assistance for a troubled bank in which her husband held stock.
After Waters was warned by Financial Services Committee Chairman Barney Frank to refrain from helping OneUnited Bank, she broke three House rules by failing to stop her chief of staff from providing such aid, the committee alleged.
The Boston-based bank was seeking $50 million in emergency government aid to avert financial collapse in September 2008, the ethics panel said in a statement of alleged violations. Such assistance would also have prevented the investment of her husband, Sidney Williams, from becoming “worthless,” the panel said.
Theoretically savers should be in good shape during deflation, since their money would be worth more. The problem, is that unless the money is stored in cash at their home, there is some 56 trillion dollars of debt just here in the US a large part of which will go unpaid during a severe deflationary cycle. The question is if you will actually be able to get access to your hard saved cash…
Then there is the question of pensioners??? Will they get paid? In other words, if the majority of debts default due to deflation, who will and who will not get their money back?
I really do not think much thought has been given to the idea that inflation was already created through debt, and that if that debt goes unpaid, our economy collapses and no one gets anything… Clearly it is better to get money out there flowing so this does not happen - and accept our inflationary medicine. Credit card companies are already cutting credit lines, so there is little choice for many but to pay down their debts. Forcing debtors into default seems like a very bad idea though - even for savers. That said, the current economic policy seems bound and determined to keep killing small business owners and others who continue to lose jobs at a historic rate…
Time to admit Obamanomics has failed
Examiner Editorial
Chairwoman of the White House Council of Economic Advisers Christina Romer is retiring during one of the worst economic downturns our country has experienced. (Gerald Herbert/AP file)
It’s no coincidence that Christina Romer, chairwoman of the White House Council of Economic Advisers, announced her retirement the day before Friday’s brutal unemployment report. With 131,000 more jobs lost in July, and downward revisions of 97,000 for the previous two months, it’s easy to see why she would start looking for the exits.
Romer is best known for drafting the February 2009 report “The Job Impact of the American Recovery and Reinvestment Plan,” which the White House used as an ammunition belt in the fight to gain passage of its $862 billion economic stimulus bill (the actual cost of which exceeds $1 trillion when interest is included). Romer predicted that following passage of the stimulus bill, unemployment would plateau below 8 percent last fall and by this month register at 7 percent. That’s not close enough for government work, as unemployment stands at 9.5 percent today. It would be higher except that hundreds of thousands of frustrated job seekers have given up looking for new jobs and dropped out of the labor force.
Predictably, the stimulus bill has proven to be an extraordinary waste of borrowed money that has failed to create jobs, generate economic growth or do much of anything other than line the pockets of White House political allies. That and give $308 million in subsidies to BP before the Gulf oil spill disaster, and subsidize a study on what happens when monkeys snort coke.
Read more at the Washington Examiner:
“Romer predicted that following passage of the stimulus bill, unemployment would plateau below 8 percent last fall and by this month register at 7 percent. That’s not close enough for government work, as unemployment stands at 9.5 percent today.”
So much for (1) economic forecastibility; (2) the ability of central planners to socially engineer a lower unemployment rate.
In Crackdown on Energy Use, China to Shut 2,000 Factories
August 9, 2010
HONG KONG — Earlier this summer, Prime Minister Wen Jiabao of China promised to use an “iron hand” to improve his country’s energy efficiency, and a growing number of businesses are now discovering that it feels like a fist.
The Ministry of Industry and Information Technology quietly published a list late Sunday of 2,087 steel mills, cement works and other energy-intensive factories required to close by Sept. 30.
Energy analysts described it as significant step toward the country’s energy-efficiency goals, but not enough by itself to achieve them.
I’ll call b*llsh*t.
This sounds like a great face-saving way to shut down idle capacity, without having to admit that the economy is slowing and demand for these construction raw-materials is slackening.
Income Slips in 45 of Biggest Cities
Nearly every big city saw incomes plunge in the past year.
Total personal income declined last year in 45 of the nation’s 50 biggest markets, according to a report by the U.S. Bureau of Economic Analysis.
Total personal income (TPI) is defined as the sum of all money received by all residents of a given metropolitan area in a given year. It encompasses such diverse sources of income as salaries, interest payments, dividends, rental income, and government checks.
Bridgeport-Stamford, Connecticut, suffered the worst decline in total personal income of any major market: 6.10 percent. Other sharp drops were registered in Las Vegas (down 4.98 percent), Detroit (down 4.25 percent), and New York City (down 4.11 percent).
Companies started slashing workforces in the early days of the Great Recession and have yet to do any significant hiring. At they same time as actual layoffs, many businesses have forced pay cuts on their employees. So it’s not a great surprise that income would decline in nearly all of the nation’s biggest cities.
nice post wmbz…
As I’ve said, the ONLY deflation I’m seeing is RE and wages.
And yeah, good find wmbz.
For the 2010 year income may go up if you consider people converting IRAs to Roths.
For the 2011 year income may drop significantly as the robbers calling themselves the Federal Government enact higher taxes on the wealthy.
Yup last night I was at WNLK am radio help a guy on this radio show…and the girl audio engineer was all by herself running 4 radio stations, 2 were completely automated…and the other 2 were partial….I mean a classic rock station and oldies stations on total automation, heck we used to get high school kids to do this payed them to learn….
Now they broker radio shows…yup people pay for their 1 or 2 hour show. and the host takes on the financial responsibly …times have changed and not for the better.
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Bridgeport-Stamford, Connecticut, suffered the worst decline in total personal income of any major market: 6.10 percent.
Great vampire squids to Fed: “Must — have — more — liquidity!”
With all the clamoring for more hair of the dog, what is the risk the Fed will fail to withdraw the punch bowl before it is too late?
Stocks rise as investors await Fed meeting outcome
By STEPHEN BERNARD (AP) – 55 minutes ago
NEW YORK — Investors are getting optimistic that the Federal Reserve will restart some of its economic stimulus programs.
Stocks closed moderately higher Monday, a sign that many traders expect the Fed to take steps to put some energy back into the recovery. The Dow Jones industrial average rose 45 points, more than making back its loss from Friday.
Volume on the New York Stock Exchange fell to its lowest level of the year as many investors stayed out of the market while they waited for the Fed’s decision. Many have been avoiding big investment decisions for much of the summer because they have no sense of where the economy is headed.
The Fed’s assessment of the economy, and any plans to resume its stimulus measures, will be issued after its meeting ends Tuesday afternoon.
“The market loves stimulus. The market wants stimulus,” said Joe Saluzzi, co-head of equity trading at Themis Trading LLC in Chatham, N.J.
The Fed will likely leave its federal funds rate near zero, but the central bank could signal plans to restart some programs such as its purchase of mortgage-backed securities or buy Treasury bonds. The central bank’s programs ended earlier this year when it appeared the recovery was proceeding well.
“The Fed has a lot of tools in its tool shed,” said Larry Rosenthal, president of Financial Planning Services in Manassas, Va. “They have to bring buyers back into the market; they have to bring consumption back into the market.”
…
Ah, do I detect an air of desperation wafting through that article?
Surely sounds like a potential setup for disappointment as well; if the Fed doesn’t break out the liquidity, look out below!
I still enjoy this article:
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm
Never fear, Bernanke will print and print.
Sure does. Other articles today with a similar theme make much of the need to further lower long term rates, but with a 30-year mortgage at ~4.5% - how much lower can they go?
NYCB opined a few days back that we might see 4% 30-year mortgages, maybe we just might. These fiends are fixated on the notion that an army of housebuyers awaits if only they can hit their magic number.
Seems like they have pretty much committed themselves to more QE, whether by accident or by design.
well yes edge….desperation is setting in
Even the spammers are giving up flooding my inbox when I post my resume on CL
“The Fed has a lot of tools in its tool shed,”
How many FOMC members are there?
And now for your daily moment of Corporate Communist Capitalism©®™
The Obama Administration is Paying to Offshore Your Job
Under director Rajiv Shah [an Obama political appointee], the United States Agency for International Development will partner with private outsourcers in Sri Lanka to teach workers there advanced IT skills like Enterprise Java (Java EE) programming, as well as skills in business process outsourcing and call center support. USAID will also help the trainees brush up on their English language proficiency.
USAID is contributing about $10 million to the effort, while its private partners are investing roughly $26 million.
“To help fill workforce gaps in BPO and IT, USAID is teaming up with leading BPO and IT/English language training companies to establish professional IT and English skills development training centers,” the U.S. Embassy in Colombo, Sri Lanka, said in a statement posted Friday on its Web site.
“Courses in Business Process Outsourcing, Enterprise Java, and English Language Skills will be offered at no charge to over 3,000 under- and unemployed students who will then participate in on-the-job training schemes with private firms,” the embassy said.
http://www.informationweek.com/news/software/integration/showArticle.jhtml?articleID=226500202
I read the government is ready to ask FNMA and FMAC to forgive part of the principal of thousands of mortgages that are underwater.
maybe this is just a rumor anyone else hear this ?
You mean like this Reuters blog bit?
An August Surprise from Obama?
Aug 5, 2010 00:26 EDT
2010 | Fannie Mae | fredd | GSEs | housing policy | Obamanomics
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.
Not sure what’s new there - aren’t there already a lot of people getting mortgage debt forgiveness via HAMP?
(emphasis mine)
Wait, aren’t WE FNMA and FMAC??
from Barrons;
To get a mortgage at a historically low 4.75% requires a loan-to-value ratio of 80% or more. Higher LTVs require a rate closer to 5.50% with mortgage insurance, so it isn’t economic to refinance a 6% or lower rate. And for loans of 7% or more with small balances, it also isn’t worth refinancing given all the other ancillary costs, such as lawyers, title searches, mortgage recording taxes and all the unbelievable expenses that everyone who’s ever gone through a closing has been subject to.
Loosening lending standards to qualify homeowners to refinance at current low rates could set off an avalanche of refis, which could decimate the MBS market. That’s because virtually every mortgage-backed security trades at a significant premium, say 106-108. When loans get prepaid, the investor gets back par value, or 100, resulting in an immediate 6%-8% capital loss.
The premium prices reflected homeowners’ inability to refinance 6% and higher-rate mortgages when they lacked equity, stable employment, or both. If the rules of the game were to change, lowering the bar to qualify for new, low-rate loans would unleash a torrent of new, low-coupon (say 4%) MBS that would drive down prices in the market, writes Marsallo in a note.
The ironic result would be higher mortgage rates for prospective home purchases. Unintended consequences, indeed.
But Marsallo points out that principal reductions on already non-performing home loans would not affect prepayments on MBS. Those non-performing loans aren’t in the pools that back MBS but are in the portfolios of Fannie and Freddie.
Still, he continues, since underwater homeowners are likely to default if there is no loan modification, the scheme might have a point. The foreclosures are going to cost taxpayers billions, but if principal writedowns get some of them to start paying again, it might be worth it, Marsallo suggests.
This takes a Solomon-like decision: forgive a portion of a loan that exceeds the value of the house, thus rewarding a bad economic decision by the homebuyer, or accept the waves of foreclosures that are sure to come. According to a Deutsche Bank forecast, the army of underwater homeowners could rise to 20 million by 2012 from 14 million currently.
Housing, if we were honest, remains at the core of the nation’s economic problems, writes Scott Minderd, chief investment officer at Guggenheim Partners. And the problem is the number of houses for sale and, even more importantly, the “shadow” supply of distressed properties not yet on the market. There is a backlog of houses with delinquent mortgages that haven’t worked through the foreclosure process. Or they are held on banks’ balance sheets, waiting to be sold when market conditions improve.
“According to a Deutsche Bank forecast, the army of underwater homeowners could rise to 20 million by 2012 from 14 million currently.”
Apocalypse Then
“they have to bring consumption back into the market”
That must be why sign twirlers are getting to be kind of numerous in my Iowa city. Oh, not for houses, but to attract people to the new and or struggling restaurants all over town. I wonder what they’ll do come Winter time?