Bits Bucket For August 13, 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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Not in Japan — just up and about…
Could pointing out the truth in a sea of MSM-led lies be considered peforming God’s work?
I hope so, because I don’t take any monetary reimbursement for my effiorts.
You could always hold up a “Will throw I-bombs for food” sign…
Today’s bonus question: If a laid-off contractor with two kids, a mortgage and a car loan is working three night shifts a week at his local gas station, how many iPads can he buy for Christmas?
“how many iPads can he buy for Christmas?”
Well, he deserves one for himself, but using the traditional “I’m going to Disney!” metric (1 x N family) he will by four.
BUT! Haha, I figured out your trick, he only needs three since his trophy wife will be leaving him this fall.
Pffffftttt… need a new keyboard.
“Pffffftttt… need a new keyboard.”
You deserve one!
Thats easy. Its a trick question - None. The Apple store will be so full of other “jobless” UE-benefit recipients that the back-ordered iPads will not be delivered in time for Christmas.
Eddies answer - As many as Obama promises to give him during the mid term election cycle….
Perfect-o.
How ’bout that market, chief?
1. ‘Tis a mere flesh wound.
2. QE2 cargo drops of cash are on the way — I can already hear the approaching choppers.
3. The stock market always goes up, in the long run. DJIA = 12K by year end.
Why is it amusing to be underemployed? I’m not getting your humor here.
Are you trying to insinuate that he’s working under the table while collecting unemployment? If he has a house payment, car payment and family, then maybe he will need to — isn’t that called survival?
I read it as making fun of the economists/pundits predicting recoveries in consumer spending or talking about how what we really need is more consumer confidence, but you are free to interpret as you prefer.
…Guessing we have an ex-CEO burger-flipper here?
Answer: His wife will decide and buy them…
If they see it, then I guess QE2 is a done deal. This week’s baby selloff in stocks is probably just a political meat tenderizer for the masses.
market pulse
Aug. 12, 2010, 9:38 a.m. EDT
Goldman Sachs sees gold at $1,300 in six months
Related stories
* Gold settles at six-week high on economic jitters (Aug. 12)
* Lower rates are bad for financials: Goldman (Aug. 12)
* Goldman changes top stock list on US slowdown (Aug. 12)
* Gold rises as world spirals toward deflation (Aug. 12)
By Claudia Assis
SAN FRANCISCO (MarketWatch) — “Significantly” lower U.S. interest rates point to higher gold prices, Goldman Sachs said in a note to clients made public late Wednesday. Goldman Sachs forecast gold futures at $1,300 an ounce in the next six months. The low rates lead to a high level of speculative buying in gold, which is now oversold, the investment bank said. In addition, Goldman’s economists expect that the Federal Reserve will return to quantitative easing measures in late 2010 or early 2011. “We believe that a return to quantitative easing could act as a strong catalyst to carry gold prices to higher levels,” the analysts said.
…
Weren’t they the ones saying oil at 200 too?Bunch of bullsh@tters over there.
we also said if you wanted oil at $60 we need a big huge recession, and by golly we got one…is everybody happy?
Good thing that cup of ice water isn’t anywhere near my mouth. Otherwise, you’d be owing me a new keyboard and monitor.
Yeah — their ‘forecasts’ tend to verge to outlandish extremes. Their ‘forecasts’ make more sense if you think of them as intended to psychologically browbeat sheep into making stupid financial decisions which will increase the size of Gollum’s bonus pool.
Be for certain, if Goldman-Suchs says they think it’s going up, then they are hoping you are buying so that they can unload and re-adjust their holdings. Do you think anything they promote publicly is actually going to be a winner for the public??
That’s right, Goldman-for-Suckers does not give out free advice for the public. Anything of value is reserved for their paying customers.
Predicting a .086% increase in something is hardly worth their time though, so not sure I understand GS’s motive other than rebuilding their damaged predictive presence 1 percent at a time.
I think there is some potential large sell off later in the year as dividends are going to be taxed at some obscene level soon. Hell, if I’m holding some of those stocks I’m talking with the other investors and board and getting the company to use the cash in other ways next year.
Big potential shift in pattern with the tax cuts ending this year.
This story makes sense if the gold price spike is interpreted as reflective of the market’s assessment of the prospects for QE2 to happen.
MarketWatch First Take
Aug. 12, 2010, 5:04 p.m. EDT
Gold rises as world spirals toward deflation
By MarketWatch
NEW YORK (MarketWatch) — With deflation looking to be on the way, it’s interesting to see gold rallying 1.5%, just as global stocks and some commodities such as crude oil sink on the realization that U.S. growth, and likely global growth as well, really is slowing.
Gold is known as a hedge against inflation, but, given the context, it sounds like Thursday’s action reflected its broader classic safe-haven play — just another symptom of the dominant risk-on, risk-off trading theme of the past two years.
…
As deflation sets in cash will grow scarce. I don’t see scarce cash going into buying gold. It’s more like holders of gold will sell their holdings for cash.
Cash is what pays the bills.
If the trillion+ dollar budget deficits continue that cash will remain scarce for everyone.
I lived in the Mexico in 70’s. The only ones who had cash were the gov’t and the rich. Yet inflation ravaged the country, and the only thing propping up the currency was the oil money. It got to the point where upper class Mexicans would go on shopping jinkets to Houston as clothes and other items cost a fraction of what they did in Mexico. People would board jets in Mexico City with empty suitcases and return from Texas with them full of brand new clothes.
Once the oil bubble popped the Mexican peso collapsed, going from 22 to a dollar to 150 in juist a few weeks. Mexico briefly outlawed the possesion of dollars (but not gold), not that it worked.
It got to the point where upper class Mexicans would go on shopping jinkets to Houston as clothes and other items cost a fraction of what they did in Mexico. People would board jets in Mexico City with empty suitcases and return from Texas with them full of brand new clothes.
Once the oil bubble popped the Mexican peso collapsed, going from 22 to a dollar to 150 in juist a few weeks.
Dang. All I have to do is change the places and year and add “upper-middle class” too:
People would board jets in
Mexico CitySao Paulo with empty suitcases and return fromTexasMiami with them full of brand new clothes.Between 1996 and 1998, Brazil’s reserves dropped by
$24 billion or 40%. While the IMF provided a $41.5 billion loan in 1998 to help Brazil defend its
currency, the central bank decided to devalue the real by 8% in January 1999. By the end of the
month, the real depreciated 66% against the U.S. dollar.
Pdf:
www-personal.umich.edu/~kathrynd/Brazil.w06.pdf
By the end of the month, the real depreciated 66% against the U.S. dollar.
This stuff happens quick. People who prepare for it are proven wrong for years and years and years, until one brief moment in time when they’re proven right.
Much like those that take first aid in boy scouts. Who the F needs to know how to make a tourniquet or set a splint? Well - once in a blue moon, out of the blue, someone will be glad that someone did learn it.
To carry the analogy to combo - people who learn first aid typically don’t do so at the expense of other abilities. In my experience people who own gold don’t own it in lieu of cash - they own it in addition to cash.
Yup! Although I’ve more cash than precious metals…About a three to one ratio.
It got to the point where upper class Mexicans would go on shopping jinkets to Houston as clothes and other items cost a fraction of what they did in Mexico. People would board jets in Mexico City with empty suitcases and return from Texas with them full of brand new clothes.
I don’t suppose anyone in the neighborhood saw them doing that… ;-/
I’m not sure I understand your comment. But I knew more than a few of people who would go to Houston twice a year on shopping junkets.
The upper middle class focused more on tour package to the US: especially to LA and Orlando. It was a relative bargain at the time.
They did then and they still do.
I’m not sure I understand your comment
When they come to the US…do they stop delivery of newspapers & mail?
The State of Wisconsin communities have a brilliant new Plan B.
It is called TIF Tax Incremental Financing Law (Extend and Pretend or Stressed to Distressed)
Thiensville seeks to declare TIF district as ‘distressed’
By Tom Daykin of the Journal Sentinel
Aug. 12, 2010 |
Thiensville’s Village Board is considering a proposal to take three to four additional years to pay off a debt tied to the community’s only tax incremental financing district.
A Sept. 20 public hearing has been scheduled to consider the proposal. It would declare the tax district as “distressed.”
Under a new state law, a distressed tax district may take up to 40 years to pay off its debt. State law typically limits the payback period to 27 years.
With a TIF district, a community usually borrows money for public improvements - such as roads and sewer lines - that are tied to new development. The property taxes from the new development pays off that debt. Once the debt is gone, the property taxes go to the community, its school district and other local governments, such as the county and area technical college district.
…In response, the new law was passed unanimously by the Senate and Assembly and signed by Gov. Jim Doyle. Along with allowing more time to pay off the debt, the new law lets a community take revenue generated by a successful district to help pay off a distressed district’s debt. The law’s supporters say it gives communities a way to avoid defaulting on their tax district bond debt.
Thiensville appears to be the first Milwaukee-area community to seek “distressed” status for a TIF district. But its situation is different from the communities whose troubles led to the law…”
However, some Wisconsin tax districts have run into trouble because the recession has reduced property values, so it’s taking longer to pay their debts. Some of the deepest holes are in smaller communities, such as Warrens and Necedah.
different !?!
Could they, like several Wisconsin communities, also have played the Credit Default Swaps on CDO’s game with Wall Street Boyz ?
Wisconsin School Districts Sue Royal Bank of Canada and Stifel Nicolaus and Co. in Lawsuit Over Credit Default Swaps
Five school districts in Wisconsin are suing Stifel Nicolaus & Co., Inc. and Royal Bank of Canada (RBC) for losses incurred after the bank and brokerage firm sold the districts “Credit Default Swaps,” (also called “CDS” or complex credit derivatives) worth $200 million resulting in some $150 million in losses. The school districts claim that the bank and brokerage firm told them that the CDS investments were safe even though they knew otherwise.
http://tinyurl.com/23xe4gj
Oh..Yea.. The residents of the Mequon-Thiensville School District are rich, white and crafty…very crafty.
Sell those big tax-pit houses Quietly, Swiftly and then move out Quickly before the Rush.
http://tinyurl.com/24enjp3
I don’t see scarce cash going into buying gold….Cash is what pays the bills.
Maybe cash and gold will be neither for nor against each other.
But for the past 10 years, cash has bought the gold, enabling gold to buy more cash.
Gold 10 year chart:
http://66.38.218.33/charts/popup/au3650nyb.html
“But for the past ten years, cash has bought gold, allowing gold to buy more cash.”
But during these past tens years the rising price of gold was driven by an expectation of rising inflation. Now that these inflation expectations are being revised downwards it is reasonable to expect the price of gold to follow.
Unless one is a die-hard gold bug, that is.
But during these past tens years the rising price of gold was driven by an expectation of rising inflation. Now that these inflation expectations are being revised downwards it is reasonable to expect the price of gold to follow.
Right but, expectin’s might not got nothin’ to do with it…
It’s a long ways up from here up to DJIA = 12K by year-end, especially given the market’s recent trajectory. But I am thinking a QE2 announcement might easily be a game changer.
Indications
Aug. 13, 2010, 6:05 a.m. EDT
Stock futures trade flat ahead of U.S. economic data
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) — Stock futures straddled the flatline on Friday, as stronger-than-expected growth data from the euro zone and particularly Germany were not able to offset anxiety over upcoming U.S. economic reports.
Futures on the Dow Jones Industrial Average fell 3 points to 10,268 and S&P 500 futures dropped 1.30 points to 1,078.
Nasdaq 100 futures declined 2.50 points to 1,824.70.
The Dow (DJIA 10,320, -58.88, -0.57%) ended down 0.6% on Thursday, as an unexpected increase in U.S. weekly jobless claims reignited worries over economic growth.
Data on retail sales and consumer prices for July are due at 8:30 a.m. Eastern time, to be followed later in the morning by the University of Michigan preliminary consumer-confidence reading for August.
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, is scheduled to speak at 11:30 a.m. Eastern on the topic “Too big to fail.”
“Given that he remains the only dissenter of the Fed’s current monetary policy, we wonder whether he will gives us some insights into his thoughts ahead of the FOMC minutes that we look forward to in about three weeks’ time,” Deutsche Bank strategists said in a note to clients.
…
But speaking of game changers, wouldn’t you expect a lot of people to sell stock before the end of the year due to the tax changes? I’ve thought that might cause a lot of down pressure by the end of the year.
“…cause a lot of down pressure by the end of the year.”
It should be already putting downward pressure on stocks, as nobody wants to be the last guy to figure out that now is the time to sell, only to discover that everyone else has ’screwed up the comps’ by already selling.
Not if you are expecting that they will change the rules at the last second in order to appease their Wall Street masters.
It should be already putting downward pressure on stocks
In theory, yes. I think I’ve noticed a trend among those who are seriously into trading, in that they hate to be early just as much as they hate to be late. So they end up playing chicken with each other until the last second and then they all try to get out at once. I’m half expecting a crash in October for that reason if nothing else.
I think that’s a good prediction. Let’s see what happens.
Obama’s housing reform panel angers affordable-housing advocates
By Zachary A. Goldfarb
Washington Post Staff Writer
Friday, August 13, 2010
Affordable-housing advocates raised concerns Thursday that the Obama administration is excluding consumer and community groups from playing prominent roles in a government-sponsored conference next week that will kick off efforts to overhaul national housing policy.
After the administration announced the 12 panelists for Tuesday’s conference, the nonprofit National Community Reinvestment Coalition said consumer and community groups had been “muscled out” by financial companies, economists and academics without a sense of how housing policy plays out in communities.
“Apparently being a community organizer qualifies you to be president, but it’s not good enough to be part of HUD and Treasury’s think tank on housing,” said NCRC chief executive John Taylor, whose group works with hundreds of community organizations to promote access to financial services for low- and middle-income people.
The criticism by affordable-housing advocates was notable because the Obama administration has so far paid much more attention to their concerns than previous administrations have. Advocates, for instance, had credited the administration with listening to community groups that argued that the government must do more to embrace rental housing for those who cannot afford to buy a home.
Panels and players
Almost everyone agrees that the government’s role in providing financing for home loans — now standing behind nine in 10 new loans — is too big and must be replaced by private capital. But an emerging flash point in the debate is how much the government may compel private companies to spend on ensuring that low- and middle-income people have access to housing — either by renting or buying.
Tuesday’s conference will feature two panels on housing reform — one led by Treasury Secretary Timothy F. Geithner and focused on financial markets, and another led by Housing and Urban Development Secretary Shaun Donovan and focused on broader housing policy goals. Six executives, five academics and a representative of a civil rights group will participate as panelists. After the panel discussions, breakout sessions will take up topics such as securitization and rental housing.
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“Across the spectrum, stakeholders agree that our current system of housing finance requires fundamental reform,” said Jeffrey A. Goldstein, undersecretary of the Treasury for domestic finance. “This conference is an opportunity for us to broaden our perspectives on a number of key issues in a transparent way to make certain that all of the best ideas are on the table.”
The panelists include Bill Gross, Pimco’s chief investment officer, who has been a large buyer of securities backed by home loans; Moody’s economist Mark Zandi, who has advised politicians on economic policy; and Lewis Ranieri, who helped pioneer mortgage securitization.
The heads of Bank of America and Wells Fargo’s mortgage units will be panelists, as well as former bank regulator Ellen Seidman.
Seidman, who now runs a community-oriented bank in Chicago, and Marc Morial, a former New Orleans mayor who is now president of the National Urban League, are likely to be among affordable-housing advocates’ biggest allies at the conference.
Still, “it’s really not much diversity or real community perspective from folks that represent the end user of mortgages,” said Janis Bowdler, deputy director of the wealth-building program at the National Council of La Raza. “I am concerned that the process will be heavily influenced and informed by major industry players and economists.”
…
Zandi has no business on this panel. IMO he’s an empty suit. I would replace Zandi with Elizabeth Warren. She could give good coverage on community issues.
I wonder what the community advocate’s views are on rental housing. They seemed to fall for the NAR American Dream onwership BS more than anyone else.
“But an emerging flash point in the debate is how much the government may compel private companies to spend on ensuring that low- and middle-income people have access to housing — either by renting or buying.”
The government has been trying to prop up the price of housing. All it has to do is stop.
Exactly, reminds me of trying to get my kid to try something new (eat a vegetable, read a book, meet someone whatever). The more I push him the more he resists. If I back off and let him be, he will do it voluntarily and happily (eat the vegetable, read the book, chat with the new person whatever).
I didn’t take long to figure this out. Wonder why the government is so slow.
A big wow to the hypocrisy and slap in the face of his supporters from O.
He is playing with the big boys now and no time for you little people.
Sounds like the banks are trying to get in there and get a larger cut if the market turns around.
We aint got no friends in Washington, us little folks, be we conservative small govt types are social program liberal types.
Peace out board. Yo!
Here’s a shocker : If the government ends subsidies of low and middle income properties (section 8, Freddie/FHA/etc), the prices for those things will drop to where they can afford them without government help.
This is already happening. Matter of fact, I had a 2009 conversation with someone who works for an organization that’s involved in low-income housing. Seems that their pool of potential clients was shrinking.
Why? Two reasons:
1. House prices had come down to the point where people could afford to buy them without the help that this org provides. And, since this conversation, local house prices have continued to decline.
2. Job uncertainty. And this is something that people at all income levels have to deal with, not just the low-income folks.
Sure, if you like shanty towns.
With government support, you still get shanty towns. They just cost more in nominal dollars.
I’ve visited and seen a few under-the-bridge shanty towns.
You, obviously, haven’t.
I’d much rather those folks live in the S8 crack-house apartments than under the bridges.
Maybe you don’t care about mutant diseases like the current XDR-TB getting loose, or a resurgence in cholera among other nasty and deadly things you get with people who don’t have any access to basic hygiene, but I do.
People living under the bridge aren’t being supported by section 8/FHA housing. They’d be being supported by homeless shelters, which is a vastly different thing than subsidizing landlords and sellers, which is what section 8 and crappy loaning to deadbeats.
People are living under bridges because they have NO SUPPORT whatsoever. I really don’t want to see more of them. Large scale extreme poverty leads to large scale plagues and crime. I wished it wasn’t so, but that doesn’t mean squat in this world.
As for crappy loaning to deadbeats, you know the wealthy are now outpacing sub-prime in defaults and foreclosures, right?
And why rail against S8 when Fortune 500 companies are receiving government assistance of all kinds?
And then there’s TARP, which makes S8 look like giving quarters to a street bum.
I too, wish there was a better system then S8. But don’t think anyone is living “fat” because of it. You REALLY don’t want to live in or near S8 neighborhoods, nor do want to be in the position where you have to use S8 to keep your property.
Manhattan Luxury Condos Try FHA Backing in Sales `Game Changer’
Aug 13, 2010
Whitney Gollinger, marketing chief for a Manhattan condo building with an outdoor movie theater and panoramic city views, is highlighting a different amenity to spur sales: the financial backing of the federal government.
The Federal Housing Administration agreed in March to insure mortgages for apartments at the 98-unit Gramercy Park development, known as Tempo. That enables buyers to make a down payment of as little as 3.5 percent in a building where apartments range from $820,000 to $3 million.
“It’s a government seal of approval,” said Gollinger, a director at the Developments Group of New York-based brokerage Prudential Douglas Elliman Real Estate. “We need as many sales tools as we can have these days, and it’s one more tool.”
“…a Manhattan condo building with an outdoor movie theater and panoramic city views, is highlighting a different amenity to spur sales: the financial backing of the federal government.”
Affordable housing for super-rich Manhattans — what a concept!
Can Section 8 vouchers be used for these?
Oh, great idea.. We MUST insure that folks making 300K+ per year don’t have to come up with significant downpayments! How on earth would someone be able to save and still live a good life on that much income?
What a joke. Jumbo loans should be unavailable for people with under 20% down. Instead, we subsidize the interest rates for these people? Unreal..
Let me take the contrarian view here. Maybe this is not such a bad idea. You know, casinos ply high rollers with free booze. You think the high rollers can’t afford to buy their own champagne? (yeah, I understand casinos don’t want these folks to leave the table)
Look at it as a strategic investment to get high income earners to live in the city, thereby paying high income, property and presumably sales taxes. Make them feel wanted and pampered, throw a bone here and there, while pocketing a steady stream of money from them long term.
It also drives up the rent for anyone else who lives in the neighborhood as that becomes the new comp, sponsored by the federal government.
Then let the city pay for it.
“and it’s one more tool.”
I’m just too tired to find the joke that surely lies somewhere in there.
Amazing. You just can’t make this stuff up.
If we placed a few stategic signs in Spanish and English along the Mexican Border crossings and our many other points of entry stating…
“Welcome to America–You are about to become Bankrupt and Jobless too ”
…legal and illegal immigrants might have second thoughts.
Wow - just wow.
Apparently they didn’t get the “We don’t want to push homeownership anymore” memo from the administration.
(Or maybe the memo didn’t really go out, despite the recent lip service?)
Our leadership and policy is all about whatever it takes to abuse and use the labor generated by the working stiffs who aspire to move foward with optimism and hard work. This human productively is far more valuable and strategic to long term US viability than any FHA program’s silly bogus guidelines.
So many foreclosures, so many hapless, innocent victims…
Posted on Fri, Aug. 13, 2010
Philadelphia Housing Authority chief Carl Greene facing foreclosure
By Jennifer Lin
Inquirer Staff Writer
The mortgage foreclosure crisis has claimed an unlikely victim: Carl R. Greene, executive director of the Philadelphia Housing Authority (PHA).
Wells Fargo Bank has foreclosed on Greene’s $615,035 condominium in the upscale Naval Square development in the city’s Schuylkill section.
In a lawsuit filed July 27, Wells Fargo said the amount in dispute was $386,685.22.
Greene, 53, runs the nation’s fourth-largest public housing agency and is one of the highest-paid public officials in the city. His salary is $306,370, and last year he got a $44,188 bonus.
Kirk Dorn, a spokesman for Greene, confirmed Thursday that the housing chief was “involved in a dispute with his mortgage company.”
“It’s unfortunate that the dispute is now public, but he plans to deal with the matter in private,” Dorn said.
Dorn added that Greene “knows people will find it hard to understand how he could be involved in a possible foreclosure proceeding on his home, but he would prefer not to say more about it at this time.”
Greene bought his three-bedroom, 2,100-square-foot condo in 2007. Wells Fargo is not seeking to evict him.
Like any other Philadelphia homeowner threatened with losing a house, Greene will have to participate in the city’s mortgage-foreclosure program. He is scheduled to appear Sept. 16 in the courtroom of Judge Annette Rizzo.
…
Maybe Greene can get one of those zero-interest $50k loans from Obama to pay his mortgage, or some other HAMP help with his mortgage. Its only fair.
$350,000 per year to pass out “housing” to parasites. amazing. There should be NO “public housing” anywhere in America. If it’s public, then anyone should be able to go crash the place anytime.
It’s not public. It’s set aside for specific people who meet specific requirements outlined by government bureaucrats. the rest of us, who must find and pay for our own housing, are taxed to support this.
Welfare by another name.
I was told that in SoCal counties that the waiting list for section 8 housing is 5 years long, and that in some counties (like Orange) they’ve stopped accepting applications.
The story about the big crowd in East Point (Atlanta) wanting Section 8 application forms said the same thing: Not much Section 8 housing, multi-year waiting list.
BTW, a few weeks ago the local “paper of record” had a legal notice for a foreclosure. The creditor was Habitat for Humanity.
The creditor was Habitat for Humanity.
Several years ago, when I was an every-Saturday-morning volunteer, the local Habitat affiliate was proud of its low rate of foreclosure. Only two in 25 years.
Mind you, our local affiliate was founded in 1981, so the period in question would have been 1981-2006.
However, since that time, the HFH foreclosures appear to be on the rise. Why? Because I’ve heard about house dedications at locations where the building had been completed several years ago. Tells me that the people in the house had to move, and Habitat was moving a new family in.
Few years ago a nephew asked me to make a contribution to H4H. I’m not averse to making charitable donations, but I told him the country was already overbuilt and that H4H was adding to the supply of an overly subsidized product. However, Slim’s status as an H4H volunteer suggests there is SOME merit to the program. What is it?
I don’t know a ton about them, but generally the premise of H4H was “no free ride”. They had (at one time - not sure now) fairly strict criteria for who could get one of their houses. E.g. one of the criteria was that the owner-to-be had to put a lot of their own sweat into the project. I liked them and did a bit of work for them years ago.
Here in Tucson, the rule is that you have to put in 400 hours of sweat equity if you’re part of a two-parent family. Single-parent families put in 200 hours.
If the potential homeowner isn’t able to work at a construction site, there’s plenty that needs to be done at the HFH Tucson office. Or at the Habistore, which sells gently used furniture, appliances, books, and building materials.
All hours have to be entered into a logbook, and a Habitat staff member has to sign off before the hours are added to the tally.
Greene bought his three-bedroom, 2,100-square-foot condo in 2007
+
Wells Fargo Bank has foreclosed on Greene’s $615,035 condominium
Hard earned money,…well
spentinvested.(Hwy wonders if it has those designer roof tiles that are pleasant to look at…)
designer roof tiles. Are you being funny or are these for real? If so, pictures please.
Ah, good ol’ Philly. Why am I not surprised?
I sure wish OlyGal were around to share this post. She certainly lives in memory…
The Associated Press August 12, 2010, 9:23AM ET
Report: Housing poses threat to private forests
By JEFF BARNARD
GRANTS PASS, Ore.
Housing development on privately owned forest land needs to be added to the list of threats to the nation’s forests, according to a U.S. Forest Service report issued Wednesday.
Agriculture Secretary Tom Vilsack said in a teleconference from Washington, D.C., that he hopes talks held by the Obama administration with landowners will produce recommendations to make preservation of private forest land more profitable, reducing the pressure to sell it for development.
Some small markets pay forest owners to manage their lands to sequester carbon as a hedge against global warming, and for providing ecosystem services, such as providing shade that keeps streams cool for fish, Vilsack noted.
“What we need to do is make sure people are aware of the benefits (forests provide), where we need to be protecting these lands, and also creating innovative and creative ways through the taxing system, through regulations, through contracting and through ecosystem markets to increase profitability,” he said.
…
20 million illegal immigrants have to live somewhere!
20 million illegal immigrants have to live somewhere!
I thought that’s what Victorville was for.
Don’t forget Firebaugh!
Or Chowchilla…
Just imagine the vacant housing if they all went back. Truly serious problems then. Be careful what you ask for.
“Just imagine the vacant housing if they all went back.”
More downward pressure on prices, less State and Federal money going towards social services. Both good things.
Yet the federal government is trying to sell public lands and routinely allows business to mine, drill, graze and harvest them.
Legal
Too Big Not to Fail
August 12, 2010, 7:39 am
From John Carney in an Op-Ed for The New York Times:
The Obama administration is set to discuss the future of Fannie Mae and Freddie Mac, the mortgage giants that largely escaped reform in the financial overhaul of the Dodd-Frank law, at the Treasury Department on Tuesday.
It’s about time: the government’s role in housing finance has ballooned since the start of the mortgage crisis. Despite their central roles in the housing bubble, the Federal Housing Administration, Fannie Mae and Freddie Mac now back more than 95 percent of new mortgages. In 2006, at the height of the housing boom, the F.H.A.’s share of the mortgage market was 2 percent; today it’s around 30 percent. Given that the agency’s requirements on down payments and creditworthiness have been less stringent than Fannie Mae’s, that should concern all taxpayers.
The Obama administration is set to discuss the future of Fannie Mae and Freddie Mac………….
these are slush funds for democratic campaign donations. don’t expect anything but more money going their way.
‘Fannie Mae and Freddie Mac………….are slush funds for democratic campaign donations’
Thursday, April 21, 2005
‘CBO Director Douglas Holtz-Eakin, said the housing market no longer needs the parts of U.S. law governing Fannie and Freddie that Wall Street interprets as a federal guarantee of the companies’ obligations. ‘Therefore, those entities could gradually be relieved of the responsibilities and benefits of their current status as GSE’s and required to operate as fully private organizations, which would reduce their risks and costs to the federal government.’
‘I’m not pushing for the total privatization of the GSEs,’ said Alabama Republican Sen. Richard Shelby, chairman of the Senate Banking Committee. ‘The GSEs play a critical role in the housing market.’
http://thehousingbubble.blogspot.com/2005/04/congress-wont-reform-gses.html
Yes, that’s CHAIRMAN of the committee and the same party held the white house at the time. Oh and BTW, the GSEs were at that very time deluged with ’scandals’ (crimes IMO) and Shelby had long, meaningless hearings on ‘reform’.
But they didn’t do a damn thing.
The GSEs have been the cookie jar for the PTB for decades. If either party was any good we wouldn’t be in this mess.
But they didn’t do a damn thing.
The GSEs have been the cookie jar for the PTB for decades. If either party was any good we wouldn’t be in this mess.
Well, looks like I’m havin’ a beer early today. Thanks Mr. Ben!
LOL - Hwy I still have you on “ignore”, so all your posts show up in red in Firefox, and I only see the author’s name. I have to say - I get a chuckle in the predictability of your posts. There’s inevitably a red banner under any thread with the word “Democrat” or “Republican” in it.
Got one-track mind?
kuman di seberang lautan tampak, gajah di pelupuk mata tak tampak
Previously:
You Lie!
Seventeen slimy slugs in shiny sombreros sat singing short sad songs.
Hwy50… vs… “TrueChartBoy™”
Woodstock: “He said that ChartBoy is a… #!*%#! & a syphilis lipped puss pocked slimy toad!”
Snoopy: BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Hwy 50: BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Judge Lucy (pounding the gavel vigorously!): “Hwy…you’re such a BLOCKHEAD!” …The Court finds you in CONTEMPT!” …ChartBoy, the court finds you GUILTY & all your blah, blah, blah,.. “TrueHaskell™” = “But, but, but…” blathering aside…it further finds that you did willfully (but possibly without malice)…lead astray, misguide, misdirect, misinform, deceive, delude THE FACTS in order to accomplish a rather devious plot of propaganda in to support your FALSE claims using the Case-Shiller chart entered into evidence.”
Clerk Marci reads out loud legal description addendum:
Marci: “Deception…”
Deception is the act of convincing another to believe information that is not true.
Deception involves concepts like propaganda, distraction and concealment. Fiction, while sometimes manipulative, is not a deception unless it is portrayed as the whole truth; not to be confused with half-truths.In many cases it is difficult to distinguish deception from providing unintentionally wrong information. One of the reasons for this is that a person or an entire organization may be self-deceived.”
foederis pax pacis (Formal agreement for Peace & Harmony)
“…long, meaningless hearings on ‘reform’.”
More to come starting next week…
The GSEs have been the cookie jar for the PTB for decades. If either party was any good we wouldn’t be in this mess.
It was the REAL reason for their creation.
If only people knew just how “corporate” our government really was from top to bottom. *sigh*
I wouldn’t mind them so much if their yields were decent.
Imagine that. Shelby(bought and paid for by Fannie/freddie), Isaakson(r) the realtor and GWB providing the legislation(Zero Downpayment Act and Low Downpayment), 2001-2008.
Well done bought and paid for GOP.
I dislike party politics in general, but to suggest the republicans are clean in this is a joke. Consider that when I posted this, there was plenty of political/public momentum to do away with the govt/GSE tie. Here’s what I said in the post above:
‘OK, Mr. Shelby, I have a long memory and when this thing goes sideways, you will be reminded that the US could have escaped billions, maybe trillions in liability.’
It would have been that easy. And as head of the committee in charge of such actions, he was instrumental in stopping reform in its tracks.
German Economy Expands at Fastest Pace Since Reunification
The German Economy Expanded About 9 Percent
Aug. 13 (Bloomberg) — David Owen, chief European financial economist at Jefferies International Ltd., discusses German second-quarter gross domestic product which grew at the fastest pace since the country’s reunification two decades ago. He talks with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)
Germany’s economy grew in the second quarter at the fastest pace since the country’s reunification two decades ago, driving faster-than-forecast expansion in the 16-nation euro area.
German gross domestic product surged 2.2 percent from the first quarter, fueling euro-area growth of 1 percent, the fastest in four years. Economists had forecast GDP would rise 1.3 percent in Germany and 0.7 percent in the currency bloc.
Germany, Europe’s largest economy, is benefiting from a recovery in global demand after last year’s recession just as the euro’s 10 percent decline against the dollar this year makes its exports more competitive outside the region. At the same time, European governments are cutting spending to rein in ballooning budget deficits, threatening to slow growth in coming months.
I just hope they are not building Tiger tanks, U-boats, and Messerschmitts.
They are selling every BMW, Audi, VW and Porsche they can produce to someone in China. There is a 6 month waiting list for popular (and super expensive) cars like the Audi Q7. That’s not counting all the planes, railway stock, machines and capital equipment that China continues to buy. Beer and food sales is just icing on the cake.
“They are selling every BMW, Audi, VW and Porsche they can produce to someone in China. There is a 6 month waiting list for popular (and super expensive) cars like the Audi Q7.
Look for that to slow down along with the Chinese real estate declines.
Had I known less, I might have agreed with you. There will be an impact, of course, but let me tell you something about China.
Basically, you and your spouse have reasonably good jobs, you’re looking at say $60k / year. What do you with that?
1. Your kids schooling is paid for by the government
2. Your folks and in-laws take care of the kids after school (yes you all live in close proximity)
3. You don’t need to save for college - if the kids are smart they will get admitted and fees will be subsidized as usual. If they aren’t smart, they will figure out something, maybe become an entrepreneur.
4. Your company covers your medical insurance which is a small amount anyway. The state will take care of anything major.
5. You don’t need to put away too much money for retirement - you are covered between your sizeable inheritances (since you and your spouse are each the only kids) including 2 homes, your company 401k equivalent, the state and your kids.
6. The economy is going gangbusters and can only go up. You and your spouse are seeing salaries go up by 10% every year.
7. Your day to day living expenses are small (like $1500/month including rent), since after all you live like a frugal Asian.
So tell me, what else are you going to do with your money?
Basically, you and your spouse have reasonably good jobs, you’re looking at say $60k / year.
The Chinese typically make about 10-20% of what Americans make for the same job (I know). Thus “reasonably good jobs” won’t get you $60k in China; it gets more like $20-30k per couple.
Thus “reasonably good jobs” won’t get you $60k in China; it gets more like $20-30k per couple.
True, but I’ll bet there are enough higher income, ostentatious, status conscious new rich who just gotta have that Audi or BMW. Buick is so middle class these days.
If you aren’t smart you become an entrepreneur?
Wow, China sounds like paradise. If only I lived there I could be a weed killing entrepreneur! Wait, I bet weeds don’t even grow there, only flowers and fruit trees.
Perhaps the Chinese can reverse-engineer some of these cars and we can look forward to counterfeit 911s, and SLKs to go with our fake Gucci and Louis Vouitton handbags and Rolex watches.
You mean you didn’t know the Chinese were already doing that?
http://money.cnn.com/galleries/2008/fortune/0810/gallery.china_cars.fortune/index.html
The new bmw 5 series is sold out all over the world. My dealer here in Charlotte got more than most dealers and they are sold out. I was there 2 weeks ago and the sales guy says the pipe is filling so they will have more on the lot soon.
Also, keep in mind….there is only one plant in dingoffing germany that makes these for the entire world so it not a huge surprise.
Lane
In my best Artie Johnson imitation: “Veddddy intelesting!”
If those BMW’s are shipped with their infamous with run flat tires, we don’t have to worry about the Chinese…going anywhere.
Panzers
They are.
The Leopard tank is considered one of the finest in the world.
Their modern D/E subs are considered to be some of the most efficient and quietest made. And irony of ironies, they sell them to Israel.
The German Air Force has access to American as well European military aircraft and are also one of the prime nations in Europe’s joint military aircraft design and production, with the Eurofighter “Typhoon” being the most prominent.
Why not go for the “big loosening” of the refinancing rules, thereby changing the contractual agreement that determines the price of existing debt? It’s all taxpayer guaranteed, after all…
Fannie Mortgage Bonds Drop Most Since February on Refinancing
By Jody Shenn - Aug 12, 2010 10:16 AM PT
Fannie Mae and Freddie Mac mortgage securities tumbled, with prices for certain debt declining the most relative to U.S. Treasuries over two days since February on concern that refinancing will accelerate after the Federal Reserve said it would buy more government notes.
Fannie Mae’s 30-year fixed-rate securities with 6 percent coupons fell 0.25 cent on the dollar to 107.84 cents as of 11:20 a.m. in New York, bringing the drop compared with Treasuries to 0.49 cent over the past two days, according to data compiled by Bloomberg. The bonds, whose underlying loans’ rates average about 6.5 percent, reached a record 108.97 cents on July 27.
Mortgage bonds have struggled after climbing to all-time highs last month on concern that U.S. home-loan rates setting record lows will boost refinancing among borrowers with good credit and already relatively low rates, and that policy makers will change rules to help homeowners blocked from refinancing by reduced home prices, tighter lending standards and personal financial distress.
“Given that the government is taking baby steps here and there” to help homeowners “and the pace of announcements seems to be increasing, people are now budgeting for a non-zero possibility” of a big loosening in refinancing rules, Derek Chen, a mortgage-bond analyst at Barclays Capital in New York, said today in a telephone interview. In addition, the Fed’s statement “naturally tilts demand to the Treasury side,” a bigger issue for mortgage securities with the lowest coupons.
…
Legal
Say Goodbye to Fannie and Freddie
August 12, 2010, 7:28 am
From William Poole in an Op-Ed for The New York Times:
The Federal National Mortgage Association — known as Fannie Mae — and the Federal Home Loan Mortgage Corporation — Freddie Mac — were poorly structured from the time, 40 years ago, when they were set up as so-called government-sponsored enterprises. Both of these technically private companies, designed to foster the issuance of home mortgages, enjoyed implicit federal backing in the event they got into financial trouble but only weak regulation to prevent such trouble. Essentially, the federal government insured the companies’ liabilities but never charged a premium.
Fannie and Freddie had a license to print money. They could borrow at an interest rate only a bit over the Treasury rate and then accumulate large portfolios of mortgages and mortgage-backed securities earning the market rate. What a deal — borrow at the low rate, invest at a higher one, hold little capital and let the federal government bear the risk! Investors enjoyed high returns, and management enjoyed high salaries. Incidentally, politicians also got a steady flow of campaign contributions from the companies’ executives.
The GSE lending practices don’t just screw up the for-sale housing market, but also the apartment market.
A by-product of the GSE’s low rates and aggressive lending is that apartments never took the hit that other types of real estate took. While rents and occupancies have suffered, cap rates have stayed ridiculously low (6-7% or less in some places) because debt is still freely available (at 75-80% LTC at very low rates).
On the other cash flowing commercial properties, cap rates have risen to 8-9%), in part due to debt being more expensive at lower levels of leverage (50-60% LTC, and at higher rates than the GSEs).
So, what happens in the following scenario:
1. Commercial rents are flat, but financing (which is generally only available from private lenders) gradually improves to historic norms (60-70% LTC with lower spreads over treasuries or LIBOR–30-40% down payments still required);
2. Apartment rents rise somewhat (10% over 5 years–an aggressive assumption), but the GSEs change form (we can all pray, can’t we?), where they become more competitive with private lenders (thus dropping levels of leverage and increasing rate–increasing cap rates by 1% or more).
Answer…commercial properties increase in value despite no rent growth, while apartments fall in value despite rental growth. The only way for apartments to increase in value is if 1) GSEs stay as loose on the lending side AND 2) you get significant rent growth WITHOUT inflation and higher interest rates.
In other words most commercial real estate can increase in value by virtue of fundamentals (Net Operating Income) improving AND by private financial markets improving–apartments can only increase in value by virtue of fundamentals improving, as their source of finance never changed.
While rents and occupancies have suffered, cap rates have stayed ridiculously low (6-7% or less in some places) because debt is still freely available (at 75-80% LTC at very low rates).
Don’t you want your cap rate to be at least 10-12%? And, in a worst case scenario situation, you’d settle for 8% but no less?
If you only wanted to buy an apartment at a 10% cap rate (on NOI of course, not on gross revenues), you wouldn’t have been able to purchase a multi-unit apartment project at any time over the past, decade plus. I have a chart that shows average apartment cap rates going back to 1987. Never have they gone above 8% on average in the US.
Most apartment deals where you can buy for more than a 10% cap rate would require that you actually build the apartment project, not buy the existing, leased asset. Anything leased that I’ve seen was always below 9%.
I’d love to see an multi-unit apartment cap rate in the 10-12% range, and I’ve been looking….for about 15 years. Haven’t found one yet.
If you ask “why sub 8%”, I point you in the direction of Fannie/Freddie. I got a pricing sheet yesterday on Agency pricing. Here are the numbers:
10-year fixed rate financing at between 4.64% and 4.94% (Treasury plus 190 to 220 bps). Loan constants with amortization are in the low 6’s. This is 75-80% LTV. If you buy at a 7% cap, put 5% debt on it at 80% LTV, you get (before reserves and amortization), an equity yield of 15% right at the start. Of course, some of that yield goes to pay down the debt with amortization and reserves, but that’s a pretty healthy return when the alternative is buying a treasury at 3% (10-year) with no inflation protection.
I’m not saying that I like the idea of buying at those cap rates, but many are, and the only way they can justify those cap rates is because of the Agency financing.
Looks like my last post didn’t happen. Long story short, average cap rates for multi-tenant apartments since 1987 have been below 8%. Fannie/Freddie current pricing is up to 80% LTV at <5%. If you borrow that kind of money, you earn a 15% cash on cash return on equity, before accounting for reserves and amortization. Fannie/Freddie is what is driving the low cap rates, nothing more.
“Want” my cap rate at 10-12%? Absolutely. I’ve been looking for more than a decade, and haven’t found one yet on the multi-tenant residential side.
The only potential way to get to 10-12% would be to take construction risk.
On that side though I just looked at a deal today, where if the land were FREE, it the cap rate would be 9.5% after you are done with construction and lease-up. And I guarantee you that those numbers were aggressive (wrong both on costs and revenues).
So how come William Poole got kicked off of the Fed?
Legal
Freddie Mac Seeks More Aid After Big Loss
August 10, 2010, 2:37 am
The government-controlled mortgage buyer Freddie Mac on Monday asked for $1.8 billion in additional federal aid after posting a larger loss in the second quarter, The Associated Press reports.
Freddie Mac said that it lost $6 billion, or $1.85 a share, in the quarter. The company is required to pay a 10 percent annual dividend to the Treasury Department on money it has received from the government. That made up $1.3 billion of the company’s second-quarter losses.
The company lost $840 million, or 26 cents a share, in the same quarter last year.
The government rescued Freddie Mac and its sibling company, Fannie Mae, from the brink of failure nearly two years ago. The new request means they have needed $148.2 billion to stay afloat, about $63.1 billion of which is being used by Freddie Mac.
Freddie Mac is losing money from bad loans it backed, many of them before the housing market went bust. It had $118 billion in bad loans at the end of June, up from $103.4 billion at the end of last year. It owned more than 62,000 foreclosed properties in June, up from about 35,000 a year earlier.
Freddie: “If you want your $1.3 billion you have to give me $1.8 billion first.”
Government: “OK.”
Feds rethink policies that encourage home ownership
By Paul Wiseman, USA TODAY
Just how much should Uncle Sam do to help Americans buy their own homes?
For 70 years — and for the last 15 in particular — the answer has been: Whatever it takes.
Now, policymakers are pausing to reconsider. In the next few months, they’ll weigh whether there can be too much of a good thing when it comes to helping families finance the American Dream.
The rethink could mean a shake-up for a mortgage market addicted to government subsidies.
“This process of figuring out the government’s role is going to involve some hard choices,” says Alyssa Katz, author of Our Lot: How Real Estate Came to Own Us. “The moment you start changing the nature of what is guaranteed by the government, what is subsidized, you start to change the alignment of winners and losers. … We took for granted that anyone could get a mortgage.”
Using guarantees and tax breaks, the government pushed homeownership past 69% in 2004. Then it all came crashing down.
Housing prices started crumbling in 2007, panicking financial markets, forcing the government to seize mortgage giants Fannie Mae and Freddie Mac, and pushing the economy into the worst recession since the 1930s. Homeownership has fallen below 67%.
Now, Washington is preparing to rebuild the national mortgage market atop the ruins of Fannie and Freddie. The proposal, due early next year from the Obama administration, could make it harder to buy a home by reducing available credit or requiring bigger down payments. Low-income renters might get more government help.
…
AID FOR HOUSING
Federal support for housing in 2009, in billions:
Homeownership
Tax breaks $127
Spending $103
Total $230
Rental housing
Tax breaks $13
Spending $47
Total $60
Source: Congressional Budget Office
…
COMPARING HOMEOWNERSHIP RATES
Canada, where home buyers are required to make bigger down payments than in the United States, still has a higher homeownership rate than the U.S. How different countries stack up:
Country Homeownership rate Year
Spain 86.3% 2005
Italy 80.0% 2002
United Kingdom 70.0% 2005
Canada 68.4% 2006
U.S. 66.9% 2010
Russia 63.8% 2003
France 56.5% 2004
Germany 43.2% 2002
Sources: Statistics Canada, EMF Hypostat, U.S. Census Bureau
A lot of people dont have the fiscal sense to own a house.
“A lot of people dont have the fiscal sense to own a house.”
With those 2002- 2009 DreamPrices, property taxes, insurance, household operating expenses, and todays economic and job uncertainty, another group of people WITH a lot of financial CENTS don’t own a house.
…and they call us bitter renters.
Hmm….those foreign country ownership statistics are all pre-burst. I wonder how Spain is doing now?
Wow, look at Germany. I wonder if this is why they are doing so well overall.
I’ll have to check out Alyssa Katz and “Out Lot, How Real Estate Came to Own Us”! ( Title sums it up quite nicely )
But NO! Instead of carefully weighing the impacts and distortions of MID/CGE we’ll toss an $8k CREDIT on ‘top’ of the heap ( just to sweeten the deal? ) Full Speed Astern.
From “Our Lot” book summary:
How the homes we live in turned into the monsters that ate our economy and how the United States became a nation obsessed with real estate.
Anyone recall the old Peanuts Christmas special where Lucy tells Charlie Brown what she really wants for Christmas …. real estate.
Anyone recall the old Peanuts Christmas special where Lucy tells Charlie Brown what she really wants for Christmas …. real estate.
That was from “A Charlie Brown Christmas.” Which I remember well from my growing up years. Matter of fact, I think I caught the very first airing of this show.
My Mom used to send me chocolate chip cookies and a small bunch of carefully clipped out Peanuts gang newspaper comic strips. Strange, strange woman. She was a real trip and a troublemaker to boot.
The poor lady must have been really confused about Cub Scout Camp and the US Army because, this time, I was gone a while. If I was missing somewhere, her solution–send in cookies and Charlie Brown.
Somewhere in the jungle: “Chuckling and giggling”
nearby in the jungle: “Rata tat tat”
All we usuallly needed was a little H2O, ball and some pig ammo and here come some brave idiots in some expensive Huey’s risking life and limb to bring last weeks Sunday Funnies and some munchies in ?
No wonder they were laughing at us !
Between fast movers, artillery, cover ships and the high paid moorons down in MACV, Saigon, that impromptu MAIL run had to cost the US taxpayers a pretty penny.
People are strange…No wonder there was a lot of unidentified chuckling and giggling somewhere out in the jungles, and now in the deserts and mountains…”Rata tat tat”
Don’t mean nothing, cause the Powers That Be, probably have plans to build a 5 Star resort and spa or a pipeline there tomorrow. Maybe both.
Hey Ma, you forgot the Kool-Aid. We do NEED more Green Kool-Aid !!
OMG, we lag behind other industrialized countries. Obviously we need a huge socialist-style government housing bureaucracy to fix this urgent problem.
Germany:
Population 82 Million…citizens fiscally disciplined: 71%
America:
Population 310 Million…citizens fiscally disciplined: 2.019%*
*(note: 2% work for the 1% with 98% of the money. the “other” .019% are ordinary hard working American citizens)
42 million Amercans on food stamps.
With a 37% obesity rate.
Japan is conspicuously absent from that last, as is China.
And as DennisN states - all of those are pre-burst (except for the U.S. - interestingly)
I saw a documentary that showed how unused office space in Japan is converted and used as cheap housing for singles who work menial jobs (in spite of having college degrees) and don’t have a mom or dad to sponge off of (live with). The apartments were basically large cubicles with doors (the partitions went up to the ceiling). The rooms were large enought for a bed, a desk and a small closet.
The documentary was a story about mental depression in Japan and how Japanese society pretends its not there.
Nice article, yet primes are outpacing sub-primes in foreclosures and defaults.
Basically, the rich and well off are more deadbeat than the poor.
But let’s just keep blaming and punishing the poor. After all, HA HA, what can they do about it?
Most of the rich and well-off are rich or well-off because they made astute business decisions in the past. Walking away from their current mortgage is a continuation of their astute decision-making. Have said many times on this board: if one of my clients walks away, I have only myself to blame for a loan-to-value ratio that was too high.
I’m not sure what you are saying. Just providing an example?
But if it’s good for the goose, it’s good for the gander. I’m just tired of people STILL blaming the poor for this mess when the wealthy are far and away outpacing them in defaults and foreclosures.
HBBrs help me; has Turbo Tax Timmy Geitner been able to sell his house???
How long a dip gap is needed to convince economists that a recession has ended?
What the Double Dip Recession Will Look Like
Posted: August 13, 2010 at 3:34 am
“Nearly two-thirds of Americans believe the economy has yet to hit bottom, a sharply higher percentage than the 53% who felt that way in January,” according to a recent Wall Street Journal poll.
A growing and vocal minority of economists believes that there will be a double dip recession primarily because of the intransigence of high unemployment and the rapidly faltering housing market. The notion of a “jobless recovery” has been around since the recessions of the 1950s and 1960s. It is a concept built on a relatively simple idea: employment lags during a recession but it is always part of a recovery cycle. Production rises as businesses see the end of a downturn and anticipate improving sales. They are reluctant to hire new workers until the recovery is confirmed, but once it has been, hiring picks up.
The 2008 – 2009 recession was – if it is indeed over – different from any other because of its depth and causes. The first trigger was the drop in housing prices, which robbed many people of their primary access to capital. As that access disappeared, so did the availability of credit. Consumer buying power evaporated and business cut inventory and production. Joblessness rose. Finally, consumer confidence plunged.
The last downturn was so great that in some months more than 500,000 people lost jobs. The unemployment rolls are now more than 8 million, and perhaps more gravely, over 1.4 million people have been out of work for over 99 weeks – which means they are no longer eligible to receive unemployment insurance benefits. This segment of the population has already begun to add to the number of indigent Americans and will continue to do so unless they can find homes with friends and family.
The second dip of the recession that ended in 2009, according to economists and the federal government, is likely to begin within the next two quarters.
…
The first trigger was the drop in housing prices, which robbed many people of their primary access to
capitalfun money.Fixed it.
Though many of today’s foreclosures are not triggered by mortgage resets, the latest mortgage-reset charts show a big wave of resets peaking late in 2011, then falling off to almost nothing. So (after several years of the same) I am STILL thinking a real bottom will occur in 2012.
In all due respect please explain to me how can we have a double dip recession if the PPT and the fed has decided that the Dow will remain above 10,000. Isn’t the entire American public suppose to believe that what is good for Wall Street is good for America?
I hadn’t realized that there were ANY assumable mortgages left these days….but this article says all FHA mortgages are assumable.
Loans insured by the FHA are assumable; conventional loans, with a few exceptions, are not. That means that a home buyer who finances the purchase with an FHA-insured loan and who sells the house later, when interest rates are higher, will be able to offer a potential buyer the right to assume his low-rate FHA loan.
After approval of the buyer by the FHA, the buyer would assume all the obligations of the mortgage upon the sale of the property, and the seller would be relieved of liability. It would just as if the loan had been made to the buyer.
I assumed a 9% mortgage on my house in San Jose back in 1981 when the rates were up around 15%. Such a deal. But back then the lender wasn’t able to “qualify” the buyer: one of the advantages of assuming a mortgage back then was the ability to buy a house you normally couldn’t qualify for.
Linkey
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/18/AR2010021806648.html
Holy moley.. That’s a really, really big deal. Like, a big enough deal for me to call up my bank and see if I can re-fi into an FHA MTG. How valuable is an assumable mortgage in a multi-generational bottom for interest rates? I’m not sure, but, IMHO, the value of something like that (for selling your house down the road in a high interest rate environment) would be 10’s of percentage points in home pricing.
That’s seriously amazing, I really do need to take a look at the terms and talk to a LO.
FHA low money down for the rich, assumable mortgages, you’d almost think the government end game is to hold every mortgage. ; )
Looks like the Irish have a different attitude toward low interest rate mortgages:
“Fergal O’Brien, chief economist for the Irish Business and Employers Federation, said another threat is creeping up on the banks. They issued tracker mortgages during the boom at rates that are now underwater. “This has become a big problem. The banks are locked into loss-making contracts,” he said.”
“the seller would be relieved of liability. It would just as if the loan had been made to the buyer.”
Since when? Back in the day, we assumed a FHA loan. The seller was still on the hook. When we sold, the buyer assumed the loan. We were still on the hook, along with the original seller. Finally our buyer sold to someone who got a new mortgage, so we were all off the hook. When did they change the rules about the chain of liability?
Oh dear…1L property class again. Generally there are two different things which look similar: buying a house subject to the mortgage, and buying a house and assuming the mortgage. When you buy a house subject to the mortgage, the buyer promises to pay the mortgage going forward BUT the seller, whose name is on the original note, is still stuck with the liability. A proper assumption of the mortgage, on the other hand, generally substitutes the buyer in the place of the seller and it’s all between the buyer and the lender going forward: the seller is off the hook.
Palmy, are you sure your crooked realtor didn’t set up the sale as a sale “subject to the mortgage”?
Hey, Dennis, thanks for the input. Now that you bring it up, I seem to recall there was a reason it was done that way. The realtors involved were both decent folks, though, back in the day.
And, when you have a “subject to” assumption the lender likely has an acceleration provision in the note if any transfer of title was to occur…Although I have found that it has not happened much the fact is that it is risky…The ones that I have been involved with I have set up auto pay transfers with the existing mortgagor so the payments to the lender were seamless thereby not raising any red flags to the servicer that the title has been transfered…
Like I said, very risky and one should have some back up plan in the event the lender calls the loan…
Linky on Irish debt:
http://www.telegraph.co.uk/finance/economics/7940078/Irish-debt-under-fire-on-fresh-bank-jitters.html
Russia: Iran’s nuclear plant to start next week. Aug 13
MOSCOW (AP) - Russia’s nuclear agency said Friday that it will load fuel into Iran’s first nuclear power plant next week, defying U.S. calls to hold off the start of the launch.
Rosatom spokesman Sergei Novikov said Friday that uranium fuel shipped by Russia will be loaded into the Bushehr reactor on Aug. 21, beginning the startup process.
“From that moment the Bushehr plant will be officially considered a nuclear-energy installation,” he told The Associated Press.
The United States has called for Russia to delay the startup until Iran proves that it’s not developing nuclear weapons. Russian officials said that the latest U.N. sanctions against Iran won’t affect the Bushehr project.
Does Iran’s nuclear plant have a pointy nose and fins on the tail?
“It’s all Bushehr’s fault.”
Proves again that they have NO sense of humor…obviously the Iranian’s haven’t read Molly Ivin’s, else they would have never named it that…
Don’t worry - obama will talk with them and have NASA give a few more feel good lectures on the contributions of islam to putting a man on the moon…
Or, Obama could just appoint the Bush/Cheney/ Rumsfeld team to handle it given that they did such a marvelous job with Iraq..
“For fools rush in where angels fear to tread”
Charge!!
That does it! It’s time for Obama to really take off the gloves and deal with Iran! He’s left with no other option but to blame Bush for this situation!! Whatever happens is now due to him and Chaney. Hope that all you right wingers are satisfied!!
US business interests, the gov’t and the CIA have never met a bad guy or dictator they didn’t love…for a while anyway.
We ONLY pick or back winners. No wonder EVERYBODY loves us.
Batista, Diem brothers, Marcus, the Shah of Iran, Somowaye , Norieaga, Saddam, Augusto Pinochet, George Papadopoulos, Roberto Suazo Cordova, François “Papa Doc” Duvalier and Baby Doc, Vinicio Cerezo, Sir Hassanal Bolkiah, the Sultan of Brunei, General Sitiveni Rabuka, Mobutu Sese Seko, Ayub Khan, Yahya Khan, King Hussan II of Morocco, Musharraf, Suharto, Osama Bin Laden,
Hamid Karzai, just to name a few.
All this article means is they have already done it.
Not-so-green shoots: Target closing all garden centers - 90 in Florida
No link. Its in the Miami Herald
Job cuts I am sure.
They are low margin parts of the business with lots of maintenance.
Kind of like the entire auto industry?
Many, even a majority, of products in a big box store will be low or negative margin. At heart is the need to serve customer’s needs as good or better than the competition.
So the question to be asked is, is Target hurting so much on the garden store that it doesn’t mind potentially losing a segment of customers - those for whom the absence of garden center will be the push to switch - to Wal-Mart?
Wal Mart, Lowes. Home Depot, your local nursery.
Target wasn’t really geared to serve the gardening market.
Target is converting many of its stores to have a grocery inside. They have 1/2 aisle of bagged lettuce and 1 endcap of bagged apples and call it “Freshmarket.”
There’s very little selection, but the lure of one-stop shopping is very strong. They should just do what they do at Meijer; just put the wal-mart and safeway under the same giant roof and be done with it.
Wal-mart already has groceries - they started the trend IIRC actually. Threw in a bank even.
There’s a lot to be said for one-stop-shopping actually. The concept has existed for years in fact - i.e. malls. Wal-Mart (and now others) are just applying it to everyday shopping.
(including gas, of course)
They should just do what they do at Meijer; just put the wal-mart and safeway under the same giant roof and be done with it.
And this isn’t a new idea. During my Ann Arbor days, I did some shopping at Meijer’s Thrifty Acres. That was 30-some years ago.
For this Pennsylvanian, it was impressive. Nothing like the Acme stores outside of Philadelphia. Meijer’s had everything under one roof.
Kroger’s local stores in the PNW are branded Fred Meyer. They are sort of a cross between a Target and an mid-upper grade grocery store.
They’re closing them here in Tucson too.
BTW, if you want good garden plants for this climate, the big boxes are NOT the place to shop. The small, independently owned outfits are much better. My personal fave is Desert Survivors.
It’s much better to buy plants from your local nursery than the big-box stores. Last year there was a national tomato blight, exacerbated from Wal-Mart, Home Depot, et al, sourcing their plants from one industrial-scale nursery.
Here in Tucson, the place to buy tomato plants is Food Conspiracy Co-op. They sell tomato plants that will actually grow here.
And, if you’re feeling frisky and want to start your tomatoes in seedling trays in January, Native Seeds Search is your kind of place.
Target closing all garden centers
The Target garden centers I last saw in Tucson were little more than concrete Christmas tree lots, anyway.
Well I’ll be…
http://www.hawaiinewsnow.com/Global/story.asp?S=12971858
HONOLULU (HawaiiNewsNow) – A federal grand jury in Honolulu indicted 14 people on charges related to mortgage fraud Wednesday. The FBI said Thursday morning that eight individuals have already been taken into custody with the assistance of the IRS and Honolulu police. A ninth person was arrested by the FBI in Seattle.
“The defendants are accused of operating their mortgage businesses as fraud factories, creating false documents to dupe lenders into funding sham home purchases” said Special Agent Tom Simon of the FBI.
And this differs from Countrywide how?
Don’t worry, Mozilo is under intense scrutiny by Feds right now.
I heard Angelo might face a fifty-dollar fine.
And pay for a new passport photo…tan & white / high resolution
“And this differs from Countrywide how?”
The crooks in Honolulu wear Hawaiin shirts and have real tans.
Retail sales post July gain as auto sales increase- AP
Retail sales managed a modest increase in July after two consecutive declines, but the strength was concentrated in higher sales of autos and gasoline. Most other retailers saw their sales fall.
I read that article. Auto sales rose a “whopping” 1.6%.
Everyone stopped paying on their home and now they are buying new cars.
There’s a growing body of evidence that links recent increases in spending to consumers taking payment “holidays” on other things like the mortgage.
I mentioned to a friend of mine that I had sent WF an extra $3k of principal last month. Since I’m only 8 years away from paying off my mortgage, I’m getting to where I can almost taste it. He was “But what about your deduction?” Man, I DO NOT understand people’s obsession with tax deductions. I pay something like $800 in orincipal and interest every month. Of which I get back maybe $100 at tax time. Even though the ~$550 in principal every month is a wash, I’m still netting something like $150 in interest every month. Paying off principal is something like a risk free* way of earning 4.875%, a much higher return than a savings account or treasuries.
*I’m not saying that PURCHASING a house is risk free, but given that I already own a house and live in a recourse state, early payoff does not generate any aditional risks so long as I maintain reserves sufficient that I don’t need to borrow money for possible emergencies.
Cause my Realtor TM said it was one of the great benefits of owning a house…?
Cause you don’t get a tax deduction for paying rent…?
/s
Oh, but you do get an even bigger tax “deduction” for renting! You don’t have to pay property tax!
Landlord does, I’m sure they work it into the rent if they can.
Mine bring in $30,000+ from the building I live in. They bought it for $300,000 a long time ago.
You could always just quit paying the mortgage, property tax, and insurance altogether and let the bank (government/taxpayers) pay those and live there for free while the Obama adminstration bends over backwards to “help keep you in your home”. You would be hansomely rewarded for this irresponsible outburst.
An illustration of how poorly the masses have been “educated.” Shell out $500 to get a $125 tax deduction if you’re in the soon-to-be 25% tax bracket. Stooopid.
I believe that a lot of people in flyover country don’t even have enough MID to lift them out of the standard deduction. It really is a “tax break for the rich”.
DennisN,
And that is really the dividing line isn’t it? When I look at the std. ded. ( Married Filing Joint in my case ) I stop and think, well just how ‘big’ of a mortgage do you really want/afford?
Perhaps it’s their impression in Flyoverland that it’s for the rich, but it’s really for The Coasts, right?
Those must be some LOW tax states. ‘Cause property and state income taxes alone get me out of the “standard deduction” zone. I think that part of the problem is that with a majority of Americans using tax preparation software or people, many people just dont really HAVE a real, working knowledge of how their tax liability is calculated.
Jim A,
And congrats on seeing the light at the end of the tunnel btw. You’re exactly right, a good many folks using Turbo don’t have a clue.
In general though, most Flyover inhabitants would be rather shocked at what we pay for prop. taxes on the coasts! I have rel. in MO/AR and they are shocked I tell you!
‘Some’ of us have gone so far as to suggest that prop. taxes shouldn’t be ded. on Sched. A as well? Here in OR the mindset is that “Well I’d rather pay a butt-load of taxes to the STATE and at least know my tax $’s are being spent ‘locally’ than to give it the Fed where I’ll never ’see’ it again?” ( and other twisted logic )
I have rel. in MO/AR and they are shocked I tell you!
I’m pretty shocked here in the Centennial State. Thank heaven for TABOR.
Well my state/county/city property tax bill is just shy of $3k for a house appraised at 220k. When you add State income taxes and the county/city piggy back income taxes I beat my standard deduction for a single person. But not by a whole lot.
You’re exactly right, a good many folks using Turbo don’t have a clue.
Timmeh joke in 5…4…3…2…
I just received my property tax bill for my Montana land.
A whopping $150 for 40 acres of prime forest. Sure it will go up when I build (I’m leaving next weekend to start) but what a nice change of pace from California.
lot of people in flyover country don’t even have enough MID to lift them out of the standard deduction ??
Which is exactly why IMO, we are going to see a significant reduction in the mortgage loan cap now set @ 1-mil…It will be politically doable to reduce it to lets say 250k because it will cover most of the mortgages in the country…
Let’s see…
Example couple in ID making $50K. Bought $180K house, 20% down, 5% note. That’s $7,200 interest. Property tax is .012(house value - $100K) = $800. Max. state income tax rate is 6%….say they are paying $2K.
$7,200 + $800 + $2,000 = $10,000
Standard deduction is $11,400. They take the standard deduction.
Ooops make that prop tax $960.
Still works out the same though.
I went and checked the statistics for Ada County (metro Boise). That $180K is the median house price. Median family income is close to my example at $57K. Still the same outcome - they take the std. deduction.
But that standard deduction could go away also DennisN…
Check this;
The Wyden-Gregg Bipartisan Tax Reform Bill: Why Congress Should …
Mar 15, 2010 … There are few people who can navigate the maze of the US tax code, while an ever-shrinking number of Americans are paying ever-higher taxes …
Excerpts;
Fundamental reform of the tax code is long overdue to repair the damage done since the last reform. Ideally, current reform would improve the code more than that of the 1986 reform by removing even more deductions and credits and lowering tax rates further.
Stop Trying to Alter Behavior with the Tax Code
Politicians are also guilty of using the tax code to get taxpayers to engage in behaviors Washington deems beneficial, like offering special tax credits for buying hybrid cars, going to college, or buying a new home.
Link?
Anyway it would make sense to limit the MID to that of a “conforming” mortgage, and reduce the conforming loan limit to the old rate. Wasn’t it about $350K? Put HUD/Fannie/Freddie back to the $350K limit and let all jumbos go onto the PRIVATE mortgage industry.
Yeah…I think something similar to that will happen…I did a little more research on the Wyden-Gregg bill and they say they are retaining the MID….They may retain it but I still believe it will be reduced significantly…
Stop Trying to Alter Behavior with the Tax Code
Define: “Non-compliant taxpayer”
nix using “wesley”
You know the old joke: Americans will spend $2 in gas to drive to a store to save $1 on a purchase.
That’s not a joke.
I know. I see it all the time.
It wobbles the mind.
…… beyond measure.
The stupidity of the average person is breathtaking.
My wife had a conversation with a neighbor the other day. It so happens a new development(800 new shacks) was approved in town and this broad said to my wife, “its a good thing that development was approved…. it will bring up ‘home’ values”.
Now my wife has been listening patiently to this anti-realtor vigilante and HBB’er for years and knew exactly how to respond to the dingbat.
Dingbat neighbors response? Ohhhhhhhhhhhh.
$2 in gas to drive to a store to save $1 on a purchase ??
How about $2.00 in gas to save 5 cents per gallon on a fill up…
I’d like to continue the conversation that i was having with Packman yesterday. Pack and I questioned whether it would be better if government hired all the people, which led to a discussion of why businesses don’t create more jobs. Pack had a model that there is a limited amount of goods and services, and that money represented labor. I questioned his model by saying it’s the demand for good (or the money to buy the goods) that was limited, and gave reasons how that demand could be filled by something other than a private sector job. OK:
Oxide: You assume that money represents labor. No way. Money represents government activity, ie printing press.
Pack: You’re talking about legal tender, not money. It’s a key distinction.
I disagree. There is HUGE distinction. Example: JoeSixPack works hard and puts away $200 a month. At the end of the year he can buy a $2400 necklace for his wife. Steve Jobs releases an iPhone fix and Apple stock rises; JoeBoxWine sells his Apple stock and makes $2400 profit. He too can buy a necklace. A mortgage broker writes a neg-am loan out of *poof* money and gets a $4800 bonus. He can buy two necklaces. BoA creates $2400000 “on margin,” i.e. out of thin air, when they securitize loans for 5 McMansions. They are too-big-to-fail and Ben Bernanke bails them out. Some low exec at BoA can now buy 1000 necklaces. Do you see where I’m getting at? Whether you acquire that “money” by printing it, *poof*ing it, or laboring for it, the end result legal tender with the same buying power. You could convert it to $100 bills if you wanted.
Pack: Sorry but please tell me where I can exchange my confidence for money.
The US government does this on a daily/weekly basis when they auction Treasury Bonds. China give us money, we give them our “full faith and credit.” And don’t forget George Soros’s legendary currency deal, where he made billions off of a temporary weakness in the British Pound.
Pack: Money actually isn’t a direct representation of labor - it’s actually a direct representation of value.
Really? :LOL: So all those McMansions really do have the “value” that an FB paid for them? That’s on the goods/services side. On the salary side, Peyton Manning does provide entertainment value. But what if Peyton Manning used his $10(?) million salary to provide $50K jobs for 200 people? I would argue that there’s more “value” in supporting a hundred families, all of whom would contribute their own labor rather than sit on their butts in front of the TV watching Peyton lose yet another Big One.
Pack: In the long run all money is spent. All money moves, even money which is socked away, inherited, etc. If it doesn’t, it’s worthless. In case you haven’t noticed - I’m concerned about the long run.
I can’t disagree with you here. Even my checking account is spent, if only as reserve currency for the bank to use for loans. The only way to not spend money is to physically put $100 bills in a mattress. However, we’re talking about a short term mess which is screwing up the long run. And not creating jobs for short-term gain is the worst possible thing a private sector can do, because it causes the most damange in the long run.
Pack: During that lag-time time there are jobs created in developing that innovation. This is in fact the core of capitalism.
That’s a nice fantasy, and it used to be true. However, companies are milking the last of the innovation pipeline for short term gain, without replenishing the pipe with new R&D. And don’t forget much of that R&D is outsourced to foreign entities, or socialized via the university system.
On other points, I agree that outsourcing is BAD for a variety or reasons, and I agree that there probably would be a job for almost everyone of every skill level if the US went protectionist. Good luck with that.
On a last point, I understand that it’s possible to sustain yourself by living the “low-level” life. But unfortunately, in order to do that, you need low expenses for housing and health care. And if other people have higher-paying jobs and can afford to pay more for such expenses, the price of expenses will rise to what the market will bear, and homesteaders will be priced out and will have no choice but to look for those non-existent decently-paying jobs. This result, by the way, is a DIRECT outcome of the income/value disparity we discussed yesterday, about the UPS driver making $20/hour and the exec making $3000/hour. The UPS driver doesn’t have much more of a chance at a decent life than the homesteader.
Hey, knock it off…no “economic philosophical philanthropy” before anyone’s had a chance to get something to eat,…white toast w/butter, mini-bagel, joe-O’s, chocolate chip waffles with organic berries…something dang it.
I telling Mr. Ben!
Daffy: “That’s just desssspiiiiicable!”
I think 90% of our society should work for the government and the rest should work in the porn industry. That way all the government workers would have something to do at their computers all day.
Great idea, except soon the Government will nationalize the porn industry and appoint Ashcroft to be the Czar.
pressboardbox,
Well it works for the SEC! LOL, yeah and the other photogenic 10% are happy too, what’s not to like?
Where I kind of tire of these RTTB ( Race To The Bottom ) endless posts is that, when was life ‘ever’ easy? Since when have workers ‘ever’ been able to assume their ben’s would be as good or better than their parents?
What kind of a cloud do you have to live in to think you wouldn’t be in competition w/ ____ bil. Chinamen for your very existence? Time to get real. My wife’s med. tech. co. has been working 10 hr. days 5 days a week and -mandatory- OT on Sat. The truth is, they have plenty of orders! They’re getting paid OT and then some. Obviously we’d rather have the -time- off during the few decent mos. of the year we get here in OR..! But this is a transformation that’s taken place for decades. Why get all mushy about it ‘now’?
Dang, someone leaked the plan!
I would counter that the Congress is already in the p*rn industry.
Echoes of Combo…
I cut a cash deal with a mechanic to fix my busted compressor (AC is slightly crucial in FL).
Tax fraud is king. We’re going Greek.
All underground economies are going to be expanding. Barter will be back big time.
As will the “Tax Gestapo”.
Barter is already back in a big way. I’ve been asked about it in my little biz. And I say no.
Why? Because I still have to pay my bills — and my taxes — with money. Not to mention the fact that our dear friends at the IRS consider barter income to be the same as any other income. Which means that it must be reported.
I calculate and pay “use tax” to my state for online purchases, e.g. books from Amazon. I’m sure most people just blow that off. Still you sign your income tax returns UNDER PENALTY OF PERJURY. It’s not worth a felony perjury rap for a couple of hundred bucks. Who knows what kind of “backdoor” into your credit card accounts are there for the IRS and state tax people to investigate your out-or-state purchases.
‘Course in MD, that’s not included with your income tax. You’re SUPPOSED to file your COM/ST-118A form quarterly. I don’t know ANYBODY who does this.
Right now “use tax” is a line on the regular state income tax forms in CA and ID - the only states I’ve lived in. People write in “zero” at their risk.
Coming soon to a state near you!
What about this idea: Small communities issuing their own currency to trade goods/serivces amongst themselves? It is completely legal - I saw it at Disney World where they issue “Disney Dollars” which can only be spent on the premises. They do it a fairs and arcades too. Just a thought…
http://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States
Flagstaff Neighborly Notes
High Desert Dollars Prescott, Arizona
Tucson Traders
Think I’ll get some & drop by “The OC” Amex currency exchange store and turn ‘em in just to see the look on their faces!
Yep, another example of the static analysis trap, which is to never assume that behavior will change in response to events.
“All underground economies are going to be expanding. Barter will be back big time.”
Yikes..forget going to the Wisconsin State Fair this week end with the kiddies Dear.
It’s time “show a little leg” and to start hijacking a few semi-trucks loaded with booze, cigarettes, chocolate and pantyhose.
For those that may have been waiting to see if the other shoe is about to drop in Comm. RE?
“Former factory sells for the price of a House”
http://www.statesmanjournal.com
Once tax assessed at $3.3 mil ( and 127,000 s/f and sitting on 8 acres to boot ) the former Tyco plant in Dallas, OR sells for $250k. What can we possibly add?
TTM officials did not return Statesman Journal calls about the recent sale.
…it had once listed for as much as $6.75 million, according to a real estate flier. The price dropped as it lingered on the market.
Schmidt said he didn’t know why the sale price had dipped even lower, but he planned to investigate.
From $6.75 Million to $250,000?
I have a cousin, lives in misery, Missouri…you know,… the pull-the-wool-over-my-eyes license plate state.
Specialized factories probably never recover the expense of their construction. That circuit board mfg. has probably been outsourced to Indonesia or the Philipines.
There’s a huge Tyson’s meat packing plant miles south of Boise (on the main UP rail line) that was closed when Tyson’s consolidated their work. The real estate signs on the property say it comes with something stupid like 1,100 acres - of sage desert! It’s been vacant and for sale since 2006. Prospective industrial buyers have turned it down because it’s off the high-cap electric grid.
DennisN,
Yes, specialized bldgs. ( particularly Tech. plants ) aren’t often transformed overnight, or without considerable expense! I thought what made the article interesting is that, we finally have a transaction that displays perhaps just where the bottom ‘is’ for comm. props such as this?
My question ( and I have many ) is that, what does this tell us about say for instance all the non-public REIT’s and the manner in which the PM’s have valued their holdings? Particularly VACANT holdings!?
Once tax assessed at $3.3 mil ( and 127,000 s/f and sitting on 8 acres)
My question ( and I have many ) is
Me too! Here’s mine: what’s it assessed value going to be “recorded” as the result of this “sale”?
8 acres zoned CRE in Salem for $250,000…really?
I found the agent by driving past and reading the sign. They want $12 million. Parcel is 1,586 acres and factory is 94K square feet. Agent is www dot jlboyd dot com .
Listing is http://looplink dot loopnet dot com/14891806/brokers/jlboyd
Specialized factories ??
And lumber mills of which both of you are probably very familiar with…
My first post got eaten…
I drove past the old Tyson’s plant to read the realtor’s sign. JL Boyd Co. 1586 acres, 600 of which are irrigated and in current agricultural production. 94K square foot building. Asking $12 million. Built 1977. Has sat since 2006.
Geez DinOR, you missed the real local citizen-story about economic… “mal-investment”
Salem area’s garden railroads will be on display:
For people such as Rex Ploederer, who’s hosting one of seven stops during Saturday’s Pacific Crossings Model Railroad Club tour, the railroad bug never let go.
“I kind of went over the top,” he said, gesturing to the more than 600 feet of track that encircle his South Salem home. “I decided to make it a whole lifestyle.”
“the railroad bug never let go… ‘I kind of went over the top,’ he said, gesturing to the more than 600 feet of track that encircle his South Salem home. ‘I decided to make it a whole lifestyle.”
I read of a divorce settlement where the husband got to visit his model railroad at the wife’s home, but he had to enter through the basement and stay there.
modified meaning: “under-ground railroad”
Ha! I’m going to use this definition tomorrow when I go on my historical tour of Cambridge, MA in 1776. We were part of the underground railroad.
And REITs are doing well WHY? They wouldn’t possibly resort to Mark-to-fantasy accounting would they?
pressboardbox,
That was kind of my point. And even though they’ve finally found a buyer, what a relief! ( the carrying costs were killing them! ) what is to be made of the potential for said remaining structure?
The realtor involved seems to think it can “accommodate a wide variety of uses” but that seems to me to be the very def. of Blue Sky.
WHY?
Cheap money…
American Dream 1950’s:
home
car
college
dog cat
money in bank
2010 American nightmare:
no home
beater car
can’t afford college
dog cat given to shelter
no money in bank
Now this is some progress kids?
2010 American Reality:
subsidized home
new GM car with subprime 0% financing
Obama-paid college tuition
pet Congressman
free food, electricity,housing, heath-care - no need for money in bank
Reality? Not in my neck of the woods.
What about This neck of the woods?
http://www.ajc.com/news/atlanta/thursday-calmer-at-east-590299.html
I watched the video an they be drivin’ some pretty nice rides.
American Dream 1950’s:
home
car
college
dog cat
money in bank
Let’s review:
American Dream 1950’s:
home: (1,200 sf)
car: (x1)
college: (PT work / no loans)
dog cat: ( mutt/ not designer labeled purebred)
money in bank: ( but you had to go into the bank to make a withdrawl)
2010 American nightmare:
no home: (Foreclosure)
beater car: (BMW series 7 repo’d)
can’t afford college: (loan ceiling reached)
dog cat given to shelter: (or fed food from China)
no money in bank: (lost ATM card…see item #1)
can’t afford college: (loan ceiling reached)
It never ceases to amaze me how many kids attend superexpensive private schools.
In her senior year my daughter received boat loads of 50% scholarships from 2nd and 3rd tier private colleges. Of course this meant that the cost would have been “only” 20K per year instead of 40K. She also was offered a 50% scholarship at the local state U. Guess where she went?
If she went to the University of Colorado, good on her. That school has many excellent programs.
Following the Great Depression, there was much more wealth equality in the U.S., as the value of assets held by the rich had diminished. And people, however modestly they were living, were living better than before.
Today, you might be able to live in a 1,200-square-foot house with one car (using a bicycle for many trips), home cooked meals, and vacations in a tent. But people on TV will be living much more extravagantly, and you probably used to yourself. So it’s a come down.
In addition, if middle class people have moved on to 2,400s-square-foot houses, if you are living in a 1,200-square-foot house you are living among people who in the 1950s were stuck in urban ghettos or mired in rural poverty.
Wt Economist,
And that’s a good part of what has bugged me? When we SOLD our home in 2004 and moved to a 1,200 s/f rental, it was -not- all that pleasant. Especially without an attached garage. There just weren’t that many rentals avail. at the time.
I don’t think most of us could shoehorn their lives into that, certainly not w/ kids. Even though we’ve had numerous observations over just what a “luxury” that would be throughout much of the world.
Yet obviously, most of those that ‘thought’ they were MC surely could not afford those 2,400 s/f places on a sustained basis? WAS there a happy medium in there that would have sufficed in your mind? DTI level?
mired in rural poverty.
Well, size isn’t everything…even in Texas!
Mystery quote: (Plug entire text in google for the answer)
he was so small at birth that he was not expected to survive the night. Put in a shoebox in the oven to stay warm, he survived, but remained small, growing to 4 feet 11 inches (1.50 m) and weighing only 95 pounds (43 kg). His diminutive size proved an asset as he went on to become a giant in…
I’m guessing it’s a quote about a guy who got drunk and crashed his car, then successfully sued the car manufacturer. Whattaguy!
sings
“…But it’s home mmm
the only life this boy has ever known
and the lord knows
how much I loathe
Tobacco Road, yeah (Road, Road, Road)
Tobacco Road, yeah (Road, Road, Road)
Tobacco Road, yeah (Road, Road, Road…”
Let me try.
American Dream 1950’s:
home with $50/mo GI bill loan
car with $50/mo GMAC loan
college degree in EE or finance
dog/cat
money in bank
hansom defined-benefit pension
2010 American nightmare:
McMansion in foreclosure
BMW you can’t afford repair parts for
college degree in sociology/ethnic studies
dog cat given to shelter
no money in bank
empty defined-contribution pension
To put it in perspective, the median household income in 1955 was probably less than $5,000 per year.
And the median for a “house” was that much or less…
My dad paid $11K for a brand-new house in PALO ALTO right after the war in 1947. At the time he was a lineman for the phone company. His parent almost stopped speaking to him, complaining “working folks shouldn’t spend that much money on a house.” IIRC it was 3% GI bill mortgage with payments around $50/month.
Last sale price of that house was $1.4 Million.
I think Ralph Kramden’s wages were $62 a week as a bus driver and his rent was $15 per week…..
Good trivia question for ya.
I wanna play!
American Dream 1950’s:
home with $50/mo GI bill loan
car with $50/mo GMAC loan
college degree in EE or finance
dog/cat
money in bank
hansom defined-benefit pension
American Reality - 2010
Living in foreclosed home
Paid-off car, truck, boat, seadoos from HELOC
Construction License
dogs (ex-wife took cats)
Unemployment
Social Security
‘Course I live in a 816 sq ft(+ semifinished low-ceilinged basement) house constructed in 1950….but then I’m single.
And I’m single and live in a 936 square foot house. No basement. And the carport was turned into a porch by a previous owner. I like that porch. Use it as a staging area for my work-on-this-place projects.
Works for me!
“To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”
-Paul Krugman NYT August 2002
September 26, 2006
“You can’t go anywhere without hearing people talk about “the real estate bubble.” Such talk drives me to distraction, and I’ll tell you why. It’s because there is no real estate bubble. Bubbles are for bathtubs.”
Kendra Todd - RE investor extrodinaire/ host of “My House is Worth What?” tv show.
Kendra really is close to being a pure genius!
“Bubbles are for bathtubs.”
They have the same small brain. Why does one get a Nobel prize.
Kendra Todd today:
http://growrichgodsway.com/
Poor Dr. Krugman. Poor Paul McCulley. They’re never going to live that one down.
Okay, people, I know it’s Friday the 13th, but I am here to cheer you up. Here’s your daily inspiration:
After Purple Hearts, Education
Tankxs Slim!
Philadelphia Housing Authority chief Carl Greene facing foreclosure
Inquirer
The mortgage foreclosure crisis has claimed an unlikely victim: Carl R. Greene, executive director of the Philadelphia Housing Authority (PHA).
Wells Fargo Bank has foreclosed on Greene’s $615,035 condominium in the upscale Naval Square development in the city’s Schuylkill section.
In a lawsuit filed July 27, Wells Fargo said the amount in dispute was $386,685.22.
Greene, 53, runs the nation’s fourth-largest public housing agency and is one of the highest-paid public officials in the city. His salary is $306,370, and last year he got a $44,188 bonus.
Kirk Dorn, a spokesman for Greene, confirmed Thursday that the housing chief was “involved in a dispute with his mortgage company.”
“It’s unfortunate that the dispute is now public, but he plans to deal with the matter in private,” Dorn said.
Dorn added that Greene “knows people will find it hard to understand how he could be involved in a possible foreclosure proceeding on his home, but he would prefer not to say more about it at this time.”
Greene bought his three-bedroom, 2,100-square-foot condo in 2007. Wells Fargo is not seeking to evict him.
Swede faces world-record $1m speeding penalty
The Swede was driving a Mercedes SLS AMG - which has a top speed of 317km/h.
A Swedish motorist caught driving at 290km/h (180mph) in Switzerland could be given a world-record speeding fine of SFr1.08m ($1m; £656,000), prosecutors say.
The 37-year-old, who has not been named, was clocked driving his Mercedes sports car at 170km/h over the limit.
Under Swiss law, the level of fine is determined by the wealth of the driver and the speed recorded.
In January, a Swiss driver was fined $290,000 - the current world record.
Local police spokesman Benoit Dumas said of the latest case that “nothing can justify a speed of 290km/h”.
“It is not controllable. It must have taken 500m to stop,” he said.
The Swede’s car - a Mercedes SLS AMG - has been impounded and in principle he could be forced to pay a daily fine of SFr3,600 for 300 days.
Under Swiss law, the level of fine is determined by the wealth of the driver and the speed recorded.
In January, a Swiss driver was fined $290,000 - the current world record.
“These f@!king Guys!,” Jon Stewart.
(Hwy wonders if the photo-enforcement image was blurry?)
And isn’t it still true that there’s no speed limit on the German autobahn?
BTW, fun factoid about the autobahn: In the final year of WWII, the Allies came ashore at Normandy. And proceeded to spend many hard weeks fighting through the hedgerows of western France.
The command staff, including Eisenhower, were concerned about the same thing happening in Germany. And then, when the Allies entered Germany, big surprise. There was the autobahn.
Which the Allies took advantage of, much to the chagrin of the German troops who had to march along the median strips as they made their way to the POW camps.
Eisenhower was so impressed with the autobahn system that he used it as a template for the U.S. Interstate Highway system.
“And isn’t it still true that there’s no speed limit on the German autobahn”?
Not on the entire autobahn, there are many sections where the speed limit is unlimited though. I have driven over in Germany on the autobahn on several occasions, and it is well designed.Very thick, something like 28″. Water shears off easily in the rain, excellent drivers for the most part. Far, far superior to the damn fools we have on the roads over here. IMO
Ah, yes, I remember German drivers from when I was in Spain. While the locals drove like hot-footed idiots, the Germans knew how to handle their cars.
OTOH, get ‘em out of their cars, and the Germans were a bunch of overweight loudmouths. They put the Ugly American stereotype to shame.
Are We Headed for a Lost Economic Decade?- WSJ
Despite record doses of monetary and fiscal support, the U.S. recovery appears to be stumbling. First-time claims for jobless benefits are on the rise and economic growth estimates for the April-June quarter have fallen to just over 1%. Many are now asking if we are on our way to a double-dip recession or even a Japanese-style “lost decade.”
The only reason the consumer is holding up is because they quit paying their mortgage and now they are on a shopping spree with the new found wealth.I know of a person with bofa who stopped paying a year ago and have yet to get a notice of default.
I know of a lady who has three rentals for which she hasn’t paid a dime in 24 months but who collects rent from each of her tenants. I wonder if she’ll be reporting that income on 4/15/2011.
Perhaps you could help things along. Here’s a fun-filled page from the IRS website:
How Do You Report Suspected Tax Fraud Activity?
Thanks Slim, I’ll keep it in mind if I get more particulars on the situation.
sleepless,
Seriously? Sounds like that Tom Vu guy from the 80’s? Good Lord. I see a world of diff between the rank & file FB and these clowns w/ wild-eyed dreams of early retirement/flipping for $’s.
My guess is that her “plan” was that she’d Sell each one of them incrementally and not pay cap gains either?
Sounds like a good reason for the tennants to 1099 her…..
While we’re on the topic of 1099s, they can also be employed to get deadbeat customers to pay up.
Disclaimer: I haven’t used the linked company’s services, but they’ve been here in Tucson for umpteen years, so I imagine they’ve had some success.
Obama signs $600M border security bill into law
Classic case of closing the barn door after the horses have left.
(Non-Hawaiian) Muslim-Socialist Plan B: “TrueDoNothing™”
Is that the bill that replaces “border security fence” with “full amnesty”?
With all the technology that we have building a fence seems a little barbaric..Like a fence is really going to stop them…This is “feel good” instead of “do good” spending…We do such wasteful things to try and solve problems…
Juju: Miami has toughest job market in U.S.
South Florida Business Journal
Miami has the toughest job market of 50 of the nation’s major cities, with a little more than nine unemployed people per advertised job, according to the latest Juju.com Job Search Difficulty Index.
The index measures the difficulty of finding employment in each state. It is calculated by dividing the number of unemployed workers in each state, as reported by the U.S. Bureau of Labor Statistics, by the number of jobs in Juju’s index of online jobs in the U.S.
Washington, D.C., is considered the best place to find a job, with 1.8 unemployed workers for every advertised job, followed by San Jose, Calif. (1.23), New York City (1.44), Baltimore (1.67) and Hartford, Conn. (2.04).
Hey everyone, I’d like to get some opinions and any anecdotes that apply to strategic defaults in GA (right outside Atlanta).
A friend’s father has a terminal illness that’s progressively getting worse. The doctors can’t say for sure but it looks like maybe a year at most. He’s seriously underwater on his house and there’s no way it’ll sell. I mean WAY underwater - the structure is barely inhabitable). The monthly nut is something like $2,500 and he’s asking my friend to continue paying it (she has been the past couple months as he is now at the point where he can no longer work).
She has no problem letting the house go back to the bank - it’s totally in her father’s name and his credit doesn’t matter at this point. I wanted to tell her to just stop paying the mortgage, thinking the foreclosure process would take longer than he’s got, but after researching GA for the first time I’ve learned they have one of the quickest foreclosure periods in the country (or so I’ve read from ATL media but haven’t found any recent anecdotal evidence).
Does anyone have any advice or examples from the ATL area? If they stopped paying the mortgage today, how long before the Sheriff physically removes any occupants (her brother and his wife currently live there and will need as much time as possible to find their own place - long story)? What about the property taxes? Should she go the forbearance route and explain the situation to the lender, maybe paying a token amount to delay things?
P.S. I’m well aware of the ethical/moral dilemma - we’re way over that already.
Brian,
Wow, interesting Case Study. Not to be impersonal about it, just interesting ( and I’m sure not all that uncommon given our current situaion? )
I’m by no means a legal expert and we ‘do’ have a number of posters from the southern states that would be equipped to answer your questions BUT…
I think your friend has been thru enough! All her financial strain won’t save Dad, the house and only drag her down with it? If ever there were a case this would be it. In fact, the point that he’s underwater really doesn’t seem to matter. True, if there was a ton of equity there, then the sacrifice might be worth it.
If he has a whole life policy he ‘may’ have a provision that allows him to draw against it but at this point, shouldn’t we be talking about his -care- and getting him moved into a home?
Not trying to save the house. Trying to figure out how long they have to arrange suitable accommodations once it’s gone and avoid throwing away as many thousands of dollars per month as possible. If it goes into default and nobody is going to be thrown out for a year… it’s worth exploring.
He has no life insurance, she’s been paying his health insurance for a while (she is very successful, rest of the family not so much).
I was really just hoping to find out how long the foreclosure process is taking in that area right now. Something like 1-in-3 mortgages are behind there from what I’ve read and in my mind I can’t imagine the bank being in a big hurry to own this particular property- but as a lifelong renter who rarely even visits GA I’m clueless.
In a perfect world the lender would work with them on it (as it really is a legitimate hardship/disability case) knowing the property is eventually coming back to them anyway - but I’m naive and probably just imagining things.
Brian,
Sorry to hear things have become this dire. No LI, No HI. ( Note to other posters, let’s all agree to NOT leave our kids in this predicament? )
Yeah it doesn’t take a lot of imagination to see that most homes are underwater or nearly so. How did he wind up with that BIG a mort. payment that late in life? Does your friend have any emotional/family history/desire attached to the house? Not that it matters from an econ. standpoint, but she has been making some payments, right?
One thing you ‘could’ do ( why not, everyone else has ) is stick a For Sale sign in the front yard and list it? It may cut some ice w/ the lender just explaining that you really ‘are’ making an effort to get out from under it and orchestrate your asking price accordingly?
To be truthful, “I” don’t have a whole life policy either, but you should be investing the diff. anyway! Sorry we couldn’t be more helpful, that’s a tuff spot.
He’s a former hippy who was always poor. “Self-employed” insurance agent with no kind of insurance of his own. He inherited the house from his parents free and clear decades ago and has apparently been living off ever-more-ridiculous mortgages and refi’s. She has been helping make ends meet financially for years. Zero emotional attachment to the house but her brother (who lives there) does and he is resisting, causing extra unneeded stress. It doesn’t help when she lives 1000 miles away either.
Much of my research is aimed at convincing them all what the smart move is and to get over the sentimental attachment to junk. It’s really tough though when their father is dying in a hospital bed.
Brian, foreclosures may be quick in Georgia, but will declaring bankruptcy help stall the foreclosure? I know in Illinois it would. It sounds like your friend has enough money to pay a local lawyer for an hour of his time. That would be a good place to start.
I think the best advise you have gotten so far is from Kim to talk to a Lawyer and make sure its a lawyer that practices “only” in real estate in the county where the house is located…He would best know all the inside angles…I would also bring a letter from his doctor to the lawyer so the lawyer knows you are not playing any games…
Great Atlantic & Pacific Tea to close 25 stores
SAN FRANCISCO (MarketWatch) — Great Atlantic & Pacific Tea Co.
Friday it will close 25 stores in five states as part of a turnaround strategy. The company currently operates 429 stores in eight states including the A&P, Pathmark, and Super Fresh brands. Great Atlantic & Pacific expects the closures to be complete in the third quarter.
A&P stores are still around? I’d heard they had merged with Stop & Shop.
Reminds me of when Fairchild and Honeywell were considering a merger.
+1 for the person who posts the two corporate names that resulted from these mergers.
Honeychild?
Fairwell?
Hoenig Says Fed Zero-Rate Policy Reinforces Doubts on Recovery
Aug 13, 2010
The Federal Reserve’s commitment to keep its target interest rate near zero may backfire by fanning doubts the recovery can be sustained, Kansas City Fed President Thomas Hoenig said.
“If in an attempt to add further fuel to the recovery, a zero interest rate is continued, it is as likely to be a negative as a positive in that it brings its own unintended consequences and uncertainty,” Hoenig said today in a speech in Lincoln, Nebraska. Keeping the rate after a year of expansion “gives legitimacy to questions about the sustainability of growth.”
Hoenig dissented from this week’s decision to bolster the recovery by keeping the Fed’s holdings of securities at $2.05 trillion and has objected to every statement this year. The Fed’s longest serving policy maker today also dismissed concerns that deflation poses a risk to the recovery and said monetary policy isn’t a cure-all for the economy.
“The recovery is proceeding as many economists earlier this year outlined that it would,” Hoenig, who took office in 1991, said in prepared remarks. “It is a modest recovery, with mixed results.”
Does anyone think that there just might be something more insidious behind Mark Hurd’s dismissal from HP than a slutty cougar and some fudged expense reports?
Maybe not. There’s a shareholder’s derivative suit filed against the HP board for presumptively firing Hurd and making the stock tank without substantial evidence of significant wrongdoing.
The shareholders might wish to be careful about what they wish for
without substantial evidence of significant wrongdoing.>/i>
They might just get it.
I really doubt they would have fired him over a fudged expense account. I think it was something much, much bigger and they are busy burying that body while the media yaps and howls about a cougar.
This fellow is a complete retard, who some how garnered enough votes to run. He can’t even complete a sentence. One more example of how smart voters are.
SC’s Greene indicted on felony obscenity charge.
Associated Press
COLUMBIA, S.C. – Longshot U.S. Senate candidate Alvin Greene has been indicted on a felony charge of showing pornography to a South Carolina college student.
Court records show a grand jury in Richland County handed down the indictment Friday for disseminating, procuring or promoting obscenity. The Democratic nominee was also indicted on a misdemeanor charge of communicating obscene materials to a person without consent.
Greene was arrested in November after authorities say he approached a student in a University of South Carolina computer lab, showed her obscene photos online, then talked about going to her dorm room.
Greene has not entered a plea and has refused to talk about the accusations in interviews.
Who cares about all that. Has anyone seen the man’s birth-certificate?
Not required for US Senate.
Art. I Sec. 3 Para. 3 No Person shall be a Senator who shall not have attained to the Age of thirty Years, and been nine Years a Citizen of the United States….
Auto Sales Are on the Rise, Deals Plentiful for Consumers Who “Neogitate Hard”
Auto sales are on the rise once again. Sales of vehicles and parts rose 1.6% in July, the best month since the “Cash for Clunkers” program expired in March, reports the Commerce Department.
Summer incentives and low financing helped sell more than 1 million cars and light trucks, up more than 5% from a year ago. “You can get a very good deal. You should go in and negotiate hard,” says Rebecca Lindland, director of autos at IHS Automotive Group.
“The consumer is just not feeling that great,” she says. “We still have a lot of consumer hesitancy to spend money on a new vehicle. It is kind of the industry responsibility to make these vehicles as affordable as possible.”
Lindland expects auto sales to rebound this year, forecasting purchases of 11.4 million units after a dismal 2009 when only 10.3 million were bought. While she notes her concerns about consumer confidence and the unemployment numbers, she expects the recovery to pick up steam in 2011, forecasting sales of 13.5 million in the U.S.
Gotta call Bull$hit on the booming auto sales.
Every ad I see sounds as desperate as I can remeber. 0% financing for 72 months, big rebates, no money down, low credit-score NO Problem, etc. Even Honda and Toyota are offering EZ terms never before offered. Every car lot I drive past looks like a ghost-town.
Yep, I agree,a local Honda dealer is offering a new civic for $89.00 dollars a month. Don’t know the details, don’t care, just going for the howmuchamonth crowd.
Disappointing data darken economic outlook
Investors, businesses, consumers hunker down amid signs of slower growth.
The outlook for the U.S. economy just went from half-full to half-empty.
The latest economic data out this week confirmed a gloomier forecast issued by the Federal Reserve Tuesday after its regular rate-setting meeting. That has renewed fears of a so-called “double-dip” recession that are weighing on investors, spooking consumers and slowing businesses from hiring.
Many economists argue that a recovery, slow but steady, is still intact. But growth forecasts are falling, and the odds of another contraction are rising.
“The next couple of months or quarters will determine whether the economy double-dips or whether it actually picks up a little momentum,” said Stuart Hoffman, chief economist at PNC Financial.
After a surge in growth late last year and in early 2010, the government estimated last month that gross domestic product grew at a 2.4 percent in the second quarter, down from 3.7 percent in the first three months of the year.
Investors, businesses, consumers hunker down amid signs of
slower growthapproaching hurricane named: “Fundamentals”ROTHFLMAO! This moron is so damn stupid, that she blames Bush for her ethic violations! When will these brain dead retards get through their thick heads, and take any responsibility for their own actions? I know… never.
Facing Ethics Charges, Rep. Waters Points Finger at Bush Administration
Friday, August 13, 2010. (FNC)
Embattled Rep. Maxine Waters on Friday blamed the Bush administration for her ethics problems — saying she had to intervene with the Treasury Department on behalf of minority-owned banks seeking federal bailout funds — including one tied to her husband — because the Treasury Department wouldn’t schedule its own appointments.
The California Democrat said in a Capitol Hill news conference — an event rarely held during a congressional recess — that she reached out to then-Treasury Secretary Hank Paulson in late 2008 when his department failed to respond to the National Bank Association’s request for a meeting.
The really sad part is that she casts a shadow over the legacy of distinguished black members of Congress. (I’m thinking of Barbara Jordan here). Such behavior could lead some to think, “Oh, they’re all like that.” And they’re not.
You’re right, there have been a number of distinguished black members through the years. People like Maxine don’t care about any legacy or the good of the country, it’s all about loading their pockets. It really is a shame, and she is shameful.
I’m also remembering Bill Gray, who represented a district just outside of Philadelphia. A real class act.
Ok, folks, I just listened to her press conference.
White people produce programs to help black people BECAUSE they are victims of racism. They won’t say it, but thats what it is.
Waters got in trouble because she helped black people; I suspect without getting the permission of white people first.
Waters weak spot is that although she admits trying to help/defend MINORities and “the disadvantaged”; she is afraid to name white people as the source of the race problem.
By the time she does it will be too late for her.
We do this in an attempt to “rise above racism”.
Unfortunatly, the only way for a black person to “rise above racism” is at the end of a rope.
(((shakin my head)))
We never got out of the first “dip” that argument should be shot down for good by now. We “the street” experienced a brief sugar high from uncle sugar. Now what? Mo Money?
US ‘Virtually Certain’ to Fall Into A New Recession: Rosenberg
Friday, 13 Aug 2010 ~CNBC
The US economy is almost certainly headed back into a double dip recession, and economists aren’t seeing it because they’re using “the old rules of thumb” that don’t apply this time, well-known economist David Rosenberg told CNBC.
Consumers’ focus on shedding debt rather than spending will prevent the economy from growing and bring a halt to the recovery, said Rosenberg, a former Merrill Lynch economist who now works at Gluskin Sheff, an advisory firm based in Toronto.
“The risks of a double-dip recession—if we ever got out of the first one—are actually a lot higher than people are talking about right now,” he said. “I think that it’s almost a foregone conclusion, a virtual certainty.”
Rosenberg has long been pessimistic on the economy, believing that persistently high unemployment, weak economic indicators and massive debt-cutting—deleveraging—by consumers and businesses will send the economy into a double dip.
An Olympic ski-jump has a departure ramp angle of negative eleven degrees from horizontal. Even though the ski-jumper appears to be flying upward, he really is descending the entire run. Recovery was really no recovery, just a shallow break in the drop. More free-fall ahead, I’m afraid.
Let’s just hope we’ve already had our “Vinko Bogataj moment”.
(in case you’re wondering)
Awesome story; time will tell whether this metaphor applies better to the recent past or the near-term future U.S. economic situation.
The agony of defeat?
yep (see link)
I wonder what would have happened if if continued his jump?
He said the ramp was very fast, would he have set a world record then crashed at the bottom fence since he wouldn’t have enough room to stop?
It’s past time for news groups to stop interviewing or quoting this idiot, enough already, he’s clueless. IMO
This famous economist is really ticked off at the Federal Reserve for not inflating faster. “The Fed — which is required by statute to promote ‘maximum employment’ — isn’t doing its job. Instead, like the rest of Washington, it’s inventing reasons to dither in the face of mass unemployment. And while the Fed sits there in its self-inflicted paralysis, millions of Americans are losing their jobs, their homes and their hopes for the future.” ~Paralysis at the Fed?
Yes, it’s the Nobel Laureate himself urging the Fed to get inflation going at 3 to 4 percent. Paul Krugman is alarmed that the Fed chairman seems not to be listening to his sound advice. It doesn’t occur to Krugman that his advice isn’t any good. All he’s asking is that the US frantically try to postpone the day of reckoning by reducing the once mighty dollar to plain Monopoly money.
Krugman could be a tool of some big time ethnic groups that dependent heavily on real estate for a living and wealth accumulation.
“…Dhat turkle, it daid,…it just don’t know it yet!”
The city of Bell appears to have overcharged residents by up to $2.9 million, according to state Controller John Chiang:
LA Times / August 13, 2010
The increases the City Council set in motion starting in 2007, he said, are illegal.
The controller’s investigation is one of several probes launched after The Times revealed that top city administrators got high salaries. The California attorney general and L.A. district attorney is also investigating.
Bell residents ‘outraged’ by property tax overcharging
A previous Times story determined that Bell has the second-highest property tax rate of all but one of Los Angeles County’s 88 cities. The countywide average of all tax rates is 1.16% for every $1,000 of assessed value. The rate in Bell is 1.55%.
That means the owner of a home in Bell with an assessed value of $400,000 pays about $6,200 in annual property taxes. The owner of the same house in Malibu, whose rate is 1.10%, would pay just $4,400
No multiply this by a few thousand cities and towns across this country.
“…now…”
I am really impressed. They have learned well from the banksters.
“Rebuilding” and “replacing” sound fundamentally different to my ear…what about a third option: say “shutting down”?
Rebuilding Fannie and Freddie
Aug. 13, 2010
MarketWatch’s Alistair Barr explains how a replacement for Fannie Mae and Freddie Mac might work and what’s at stake, including the value of your home.
Hwy50 authorial intrusion: (”Hector great story,…now exactly…who OWNS the DAMN building? Please report on that! Newspaper/www 101:
who, what, when, where, why?)This old flag is no glory:
A tattered American flag on the vacant Garfield Building at 8th and Hill clashes with the downtown renaissance.
By Hector Tobar / August 13, 2010 / LA TImes
“There are more people on the sidewalks of Spring, Main and Hill streets, and they’re taking a look at their surroundings. Often, they see things they don’t like.
This very old Old Glory flaps day and night in the breeze with only one corner attached to the flagpole. “It’s flying like a dishrag up there,” Tyukody said. “It’s deteriorated and tattered. It’s not a respectful way to fly the flag.”
But the building’s been vacant since its most recent sale, in 1991.
Apparently, when the new owners closed the building, they forgot to take down the flag. It may have been flapping up there in the wind for 20 years.
When I called the building’s managers, they said they would take it down, but offered no other comment. On Thursday, the flag was still there.
Downtown’s historic core still has many other half-dead buildings — their storefronts are occupied by retail shops, but all their upper floors of offices are empty. Several of these buildings are topped by flagpoles without flags.
In other words, putting up a flag isn’t just a patriotic thing, it’s also the neighborly thing to do, a sign that a building is in the hands of people who care enough about the idea of community to engage in an old civic ritual.
Every month or two, Boghoskhan has the flag taken down to clean or change it. “It’s to show you’re proud,” he said.
But there’s one more reason he takes special care of the flag, he told me.
“I myself love this flag,” Boghoskhan told me. He’s an Armenian Iranian immigrant, he explained, naturalized as a U.S. citizen 10 years ago, and a grateful recipient of American freedoms. “It’s very, very nice to me,” he said. “I have respect for it.”
http://www.cnbc.com/id/38680807
The first time I saw someone put hard numbers to the REO out there. She seems to think there are about 600,000 homes as REO (not counting those in the process), and she thinks that 150,000 get sold each month.
She doesn’t do any thinking on how many are added each month. From a different source, it looks like there are about 200,000 foreclosure starts each month, with about 3.8MM homes at 60+ days delinquent, and about 350k modifications of some sort or another occurring each month (some pre-, some post-foreclosure start, I’m sure). The total homes delinquent seem to be trending downward unevenly (it was 4.1MM at year end to about 3.8MM at the end of May).
Everyone can draw their own conclusion. Mine is “bumpy road ahead, but bumpier road behind us”.
air ahead, cliff behind us.
Former Janus manager faces million dollar loss on house
By John Rebchook on July 28, 2010 · 1 Comment · ShareThis
Laurent Saltiel has this Cherry Hills home on the market for $5.9 million. The only problem – he paid $6.7 million, less than a year ago.
Laurent Saltiel is such a whiz at international stock investing, that the investment firm of AllianceBernstein LP in New York City, lured him from Denver, where he managed the $2.44 billion Janus Worldwide Fund for the Janus Capital Group.
Six months before the announcement last May that Saltiel would be a team leader and manage the International Large Cap Growth/Global Large Cap Growth funds for AllianceBernstein, Saltiel and his wife, Kimberly, paid $6.7 million for a home on more than 5 acres in Cherry Hills Village. It was the most expensive home to sell in the Denver area last year. (For the original story in InsideRealEstateNews, please visit Janus Manager Pays Record Price For Home.)
Now, he has put the 10,409-square-foot home, on the estate formerly owned by golf pro Craig Stadler, on the market for $5.9 million. It was not designed and built by highly regarded Debra Toney, who initially hoped the home would fetch in the neighborhood of $8 million. Cherry Hills Village values the home at $7,225,600 for tax purposes.
That means that Saltiel, if he gets his asking price, will face an $800,000 loss. And when the real estate commissions are thrown in, he will lose $1 million or more. Saltiel is not alone. While there are signs that the 7-million home market in the Denver area is picking up (see a previous blog, Million-dollar home showing rise) it’s because sellers such as Saltiel, are willing to take big financial haircuts to unload their properties.
Edie Marks, the Kentwood Co. broker who sold the house to Saltier last November, now is listing the home at the new price.
“It was not easy to get him to that,” Marks said. ” He has the ability to wait as long as he has to. But I told him it does not make sense to just have this home sitting here in Colorado and convinced him to go with this price. He has the ability to weather this and hold it until the market comes back. But I thought it would be smart to sell it, even at a loss, and just put it behind him.”
Marks said that Saltier family has just moved to New York, where they bought a unit in a high-rise in the middle of Manhattan. They also own a home in Washington state, she said.
And there is a big cost to holding the home.
Daily tab: $5,176
Records indicate he has a $4.69 million loan with a 5.375 percent interest rate. Monthly principal and interest payments would set him back $26,277. In addition, annual property taxes run $54,255.62, or $4,521 a month. If he was lucky enough to sell it after eight months of ownership, and figured that he paid a 5 percent commission of $295,000, the cost of ownership would amount to about $1.26 million, including the mortgage payments, taxes, loss on the home, and commission. Another way to look at it, that would equate to about $5,176 per day to own the home. And that’s not even including his utilities, lawn maintenance and other costs.
Interior photo of home listed by Edie Marks.
At the peak of the market, the land itself would have been worth more than $5 million, Marks said. And she estimated the replacement cost at more than $10 million. “The cost of building homes really has not gone down much at all,” she said.
Marks said people house-hunting today for homes priced in the stratosphere, expect to get unbelievable bargains.
‘No. 1, it is really about the price and No. 2, they have to feel they are getting a great deal,” Marks said. Unlike Saltier, many people selling at the high-end today do not have the financial ability to hang on, she said.
Buyers smell blood
“I think most of the sales we are seeing at the upper-end are bloods sales,” Marks said. “They smell blood. Even though that is not the case in this sale, you do get a lot of those. Or, the bank owns it and is ready to deal.”
She said that Saultier is firm on his price, and won’t budge from the $5.9 million.
Price not low enough
But Greg Geller, principal of Vision Acquisitions LLC, said he thinks Saultier will need to come down more, a lot more, before he can sell it.
“I’m sure he is a really smart guy and he understood when he bought it that it needed very much to be a long-term hold,” Geller said. “As a short-term hold, you’re not going to be able to sell it as $6.7 million any time soon, and he knew that. In today’s market, the number of people paying more than $3 million for a home is a very short list. High-end real estate is on life support.”
Marks said that she thinks the buyer of the home “will be someone who is very comfortable in his own skin, as Laurent is. They will not be trying to prove anything to anybody. Yes, it is over 10,000 square feet, but it is so warm and comfortable. And the grounds are fabulous. Some lucky buyer is going to take advantage of a great deal.”
Marks said that so far she has only had one showing. “I’m really just starting to market it,” she said. “The family has been living here until recently. And after 100-degree heat on the East Coast and close to 100 percent humidity, they plan to come back in the near future to beat the heat.”
One wag familiar with the deal, had this to say about Saltiel: “He should stick to picking stocks, not real estate.”
We have to “make him whole”. Can’t the taxpayers do something?
http://bit.ly/9M0YzW
Low life blood sucking vampire real estate professional.
Hi Ya’ll. Hope summer is treating you well.
It has been so full, I might pull a Slater.
See ya in the fall!
http://bit.ly/9M0YzW
Low Life Blood Sucking Real Estate vampire.
Hello Kids, Hope you are all playin nice amongst yourselves!
Hello SFObay gal!
Hi PDX lady- say hi to Romeo!
It has been so full that it isn’t unusual to see over 100 passengers on the standby list, so as far as airports are concerned, it doesn’t “look” like a recession, but then you hang around the town and it is a different beast.
Might have to ‘Pull a Slater’. JK.
Today, spoke with a Cafe owner who has been around this town since 93. He opened a Pasta restaurant 3 yrs ago- says that was the worst timing. Says he gets RE, Mtg, and all sorts of people coming to his small cafe to ask for a job. Well, some neighborhoods aren’t seeing the tough times..aka Indian Wells, CA.
From Cramer:
“Case in point, professor Nouriel Roubini and Nobel winner Paul Krugman, two of the loudest proponents of nationalizing our banking system during the height of our financial crisis. According to these academics, the banks were insolvent and should all be taken over by the government. Yet in retrospect, many of our nation’s banks were just fine and were able to recover with just some loans from the government.
Cramer said the collateral damage that would have been caused by a mass nationalization of our nations’ banks would have been huge. He said the economy wouldn’t have recovered, and there certainly wouldn’t have been a stock rally in 2009.
Cramer said never give much credence to academics unless they have real- world investing experience.”
Yet in retrospect, many of our nation’s banks were just fine and were able to recover with just some loans from the government….. From Cramer
The loans were just part of it. The big BS part was the taxpayers “bought” billions of the bank’s bad assets through the GSE’s and the Fed. “Loans my ASSets”!
We “own” it while Goldman Sacsks, Sack’o'chite Cramer lies.
Are you ready?
I have a friend vacationing in San Diego, and he says it’s the most amazing place on Earth.
Really?
Everyone wants to live here!
It seems that the Fed and the government are carrying out politically expedient economic policies rather than economically sound economic policies.
The result is that there is no great reckoning and recovery. But there is a slow continuous decline. I keep seeing the Japan analogy.
Wikipedia list of debt by country
Wikipedia list of external by country
Wikipedia can be tricky for hard facts (I find it a good quick and dirty starting point for information). But, if these numbers are accurate, what are the implications?
“politically expedient”
That is a very polite euphemism for desperation measures.
Krugman says Fed should do more “nonstandard” asset purchases to juice the economy
Paralysis at the Fed
By PAUL KRUGMAN
Published: August 12, 2010
http://www.nytimes.com/2010/08/13/opinion/13krugman.html?_r=1
“nonstandard”
QE2 (aka more hair-of-the-dog stimulus) is on the way. Ladies and gentlemen, place your bets accordingly,
yeah buy my CC debt so I can wake up with a zero balance…non standard my azzzzzz
Must-see movie: The Other Guys (Will Ferrell, Mark Wahlberg)
Its screen play involves cultural references to Bernie Madoff, too-big-to-fail, SEC negligence regarding Enron, WorldCom, AIG, etc, ponzi schemes, outlandishly excessive CEO compensation and bonuses, undsoweiter. The main characters mistakenly believe the Federal Reserve to be a prison (nice metaphorical touch by the writers!).
I am delighted to find the discussions some of us have engaged in for half a decade now behind the scenes in the blogosphere have entered mainstream culture though the comedic genius of Will Farrell!
Obama’s, Hitlary’s and Blagojovich’s home state is experiencing a disproportionate share of the bank failures relative to its share of U.S. economic activity.
Illinois Sees Its 14th Failure as Palos Bank and Trust Collapses
American Banker | Friday, August 13, 2010
By Joe Adler
WASHINGTON — Illinois regulators closed the $493 million-asset Palos Bank and Trust Co. late Friday, the 110th failure of the year.
The Federal Deposit Insurance Corp. sold the bank, located in Palos Heights, to Itasca, Ill.-based First Midwest Bank.
The acquirer paid the FDIC a 1% premium to assume all of Palos’ $468 million in deposits, and agreed to buy essentially all of the failed bank’s assets. The FDIC will share losses with First Midwest on about $344 million of those assets.
The failure, the 14th this year in Illinois, was estimated to cost the FDIC $72 million.
* U.S. NEWS
* AUGUST 13, 2010, 4:32 P.M. ET
Fannie Clarifies Rules on Tighter Credit Policies
By NICK TIMIRAOS
Fannie Mae told mortgage lenders on Friday that they don’t need to pull a second credit report before a loan closes, clarifying new lending policies that took effect earlier this year.
In June, Fannie instituted a “loan quality initiative” designed to cut down on sloppy underwriting and to reduce the chances that lenders might be required to buy back a defaulted loan. The initiative effectively led lenders to pull two credit reports, one when determining if a borrower was eligible for a loan, and a second immediately before the loan closed to make sure the borrower hadn’t taken on additional debt.
The goal was to ensure that Fannie was buying the same loan it had agreed to purchase. But lenders had voiced concerns that such policies were likely to result in loan approvals being delayed or canceled because prospective homeowners often charge credit cards for big-ticket items like moving services or furniture purchases shortly before a home purchase.
Loan officers had begun warning borrowers not to take on extra debt before closing. Bankers pointed to the rules as a further sign that credit standards, which had grown incredibly loose during the middle of the past decade, had overcorrected.
“Our primary objectives are to support borrowers’ ability to sustain homeownership and to strike a reasonable balance between requirements that may reduce loan repurchases and requirements that might over-burden lenders’ origination processes,” said Deborah Slade-Horsey, Fannie Mae’s vice president for single-family risk policy, in a statement.
…
Where’s my pitch fork?
Trial Near of Mozilo; Politicians Draw Heat
Federal probes into Countrywide are heading toward decisions that could determine the futures of former executives and public officials—and affect the broader effort to prosecute those held liable for the financial crisis.