Bits Bucket For August 18, 2010
Post off-topic ideas, links and Craigslist finds here
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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So the 9/11 mosque may be moved to a different location. The new location site will be donated by the state of NY. I eagerly await the anti-religion brigade to chime in and scream about separation of religion and state.
Or is that separation only applicable when the religion in question is Christianity? Had the state of NY offered free land to build a church, the ACLU would be filing suit at 9:01am this morning. But the state gives free land to Islamists, all is well.
Madam Moonbat sez…
Rep. Pelosi calls for investigation of WTC mosque opposition
House Speaker Nancy Pelosi, California Democrat, called for an investigation of those who are protesting the building of the Ground Zero Mosque on Tuesday. She told San Francisco’s KCBS radio:
AUDIO
“There is no question there is a concerted effort to make this a political issue by some. And I join those who have called for looking into how is this opposition to the mosque being funded,” she said. “How is this being ginned up that here we are talking about Treasure Island, something we’ve been working on for decades, something of great interest to our community as we go forward to an election about the future of our country and two of the first three questions are about a zoning issue in New York City.”
Suppose there was a housing bubble blog and it got hijacked by an Obama hater?
and it got hijacked by an Obama hater ??
I think it goes much deeper than that….
I understand where you’re coming from, Prof, but this IS the Bits Bucket:
“Post off-topic ideas, links and Craigslist finds here”
Which reminds me - has anyone ever posted a Craigslist find here?
The Governor’s idea of a compromise is indeed stupid and unconstitutional.
A religious group wants to build a religious institution on private property two blocks away from the World Trade Center site. There is no moral or legal grounds for anyone to be opposed.
Germany-Japan wanted to rule the world and where as brutal as it gets.
Today everybody wants to drive their cars,this is a political issue to get votes.Basically the gov’t doesn’t give a hang about any of this it always comes down to political gain and the almighty dollar.
“There is no moral or legal grounds for anyone to be opposed.”
I’d have to disagree with you on both counts. The moral ground is clear. The world trade centers are considered tombs, much like the Titanic or any other sunken ship. Or the Arizona, in Hawaii.
The moral ground is that we try to not disturb, but honor those who died in these types of events.
A mosque is clearly an affront to the people who died in the towers.
I was, after all, an ISLAMIC attack on America, and we all know the history of Islam. They like to erect monuments (mosques) everywhere they have had a great victory. This is a provocation, not the “free exercise of religion”. That is the moral case.
The legal basis is similar to churches meeting “anywhere” they want.
It doesn’t happen. The original churches all meet in peoples homes. They didn’t have zoning laws in ancient Rome and the surrounding regions. Recently, some people have met in peoples houses, and after complaints from the neighbors, they were forced to stop holding “meetings” in the houses as they were not “zoned” for an “assembly”. So, yes, the government, has the power as ruled by the anti-religious zealots to regulate where you can meet. It doesn’t matter if it’s your private property or not.
This proposed Mosque is an assembly area for gatherings of more than 100 people. It is being built in a commercial business area, and would probably need City Council approval to have an assembly there.
Traditionally, most governments will let Religious Bodies build just about anywhere, even in neighborhoods and will grant a new zoning for the Church or Synagogue, with little resistance.
I don’t know this case, but it’s clear, most people think this “placement” is inappropriate. The Council could vote to stop the proper zoning. Additionally, even if it is properly zoned, they could remove that zoning, and there is NOTHING the ISLAMISTS could do, but appeal the rezoning.
I know this from personal experience. I am sitting on property I bought that was zoned for duplexes. I was going to build 2 duplexes as my retirement plan. The County rezoned it, saying they came up with a new master plan, and my zoning under the old plan was ‘non-conforming’. Too bad.
It’s not clear that ‘most people’ think it’s inappropriate. I don’t. Most of my friends don’t. Also, you can’t do something that’s an affront to the dead. They’re dead. They don’t get cheesed off anymore. The relatives of the 9/11 vicitims might, but as we’ve seen, some support letting the mosque go there.
If you’re going to equate every faction’s and individual’s actions as representative of a religion as a whole, christianity won’t be looking too good, either.
It’s not clear that ‘most people’ think it’s inappropriate.
What color’s the sky in your world?
There’s a big difference between what’s considered appropriate, and what should be allowed. Per the polls about 50% of people believe the mosque should even be allowed. Most likely the vast majority of those 50% would still say it’s inappropriate (I’ve talked with a bunch). Overall probably 95% of people in America would view it as inappropriate. It is quite clear.
So the Muslims killed at Ground Zero on 9/11 are against the mosque?
You lost me at tombs… our country is a big tomb of the natives. Would you be happy if they moved it another block down? How about persecuting other terrorists religions or like not allowing the building of Churches in Oklahoma City for what Timothy McVeigh did (he was a Christian at one point)?
Legal grounds…..yes.
Moral grounds?…….you’re kidding, right?
I guess you would have no objections to NAMBLA opening their National Headquarters next door to a Boy Scout camp your kid was attending..
OF course, NYC has been bragging for years about how they are so much more progressive and diverse than us unwashed Neanderthals, so I really can’t see why they are getting so upset.
This is the hallowed grounds we speak of:
(Daily News)
Opponents of a proposed lower Manhattan mosque and community center speak in hushed tones about the sanctity of the “shadow of Ground Zero.”
Tell that to the patrons of the Pussycat Lounge, a strip club where a photo of a nearly naked woman marks its location just two blocks from where the World Trade Center stood.
Or the Thunder Lingerie and peep show next door, where the marquee sports an American flag above a window display of sex toys and something called a “power pump.”
Many come to the scene of the worst terrorist attack on American soil to pay tribute to pain and unspeakable tragedy. They’re welcomed by solemn memorials and a visitors center amid the noise of reconstruction.
If they’re so inclined, they can also buy porn, play the ponies and take care of all manner of personal business within steps of the former World Trade Center.
In a walk of the streets within three blocks of Ground Zero, the Daily News counted 17 pizza shops, 18 bank branches, 11 bars, 10 shoe stores and 17 separate salons where a girl can get her lady parts groomed.
There was a really great store full of TV, movie, etc. memorabillia just a block or two from the towers. I don’t think I ever bought anything, but I sure had a lot of laughs in there on my way home from the Municiple Building. Wonder what happened to it?
“…hallowed ground we speak of…”
“…..17 separate salons where a girl can get her lady parts groomed.”
Well……..that fits my definition of “hallowed ground”.
Whenever I get anywhere near one, you start hearing me say “Oh god, oh god……”
LOL!
How exactly does one groom nipples?
Hello X…
To continue with yesterday’s discussion, I was under the impression that all avionics where operating under some version of the linux operating system, since linux is very stable. I couldn’t imagine an aircraft flying on an automatic pilot gizmo that is running under a microsoft operating system. What happens if the OS crashes?
Did strippers kill 3000 Americans?
If the mosque is built, it will be built in memory to those 19 unspeakable people. And the gloating by the Imam in his daily sermons will be unbearable.
“it will be built in memory to those 19 unspeakable people”
On what, ahem, “grounds” do you base this claim?
I’ll have to check with a Collins or Honeywell rep to tell you what system they use. The engine stuff still runs DOS (but it’s not a super sophisticated program to manage these particular engines……..the only other thing it does is act as a data logger).
The Feds are slow to incorporate new OS in safety-of-flight related systems. They have seen Windows Vista, too.
“Did strippers kill 3000 Americans?”
Yeah, actually they have. But not all at once. Usually happens when the wife finds out that hubby blew 10 grand on “lap dances”.
Hey TCM and X- Honeywell uses a system called DEOS (digital engine operating system) Collins has something similar- the system does more than operate engines BTW- there are usually 2 and more often 3 computers working in parallel, so if one cr@ps out, the other one (or two) takes over- Pilots get warnings, ect. Worst case the pilot takes over and hand flys the plane
Not as risky as you might think….
NY gets what it deserves.
I am all for whatever the fcuk they want to build there. But no one can deny one simple fact that, for the hard core muslim types, it’s a big win. And mark my words, this so called “moderate islamic mousque” will attract and overwhelmed by harcore anti western muslims in no time.
One thing though, If the muslims end up implementing some sort of sharia law(financial) in wall street, I might even convert to islam. Allah hu Akbar!
If you’d read anything on the proposed mosque you’d know the imam is anything but ‘hard core’, and favors and very open, non-violent form of islam (sufism) that would disgust fanatics like Bin Laden, who would happily kill him if he were to preach it in Afghanistan or Iraq. If we start considering friendly, pro-western muslims like him as the enemy, then we’re doing Bin Laden’s work for him.
guess you would have no objections to NAMBLA opening their National Headquarters next door to a Boy Scout camp your kid was attending..
As much as I abhor religion, even I would not stoop so low as to compare it to the National Man-Boy Love Association.
(Well, maybe the Catholic church…)
“The Governor’s idea of a compromise is indeed stupid and unconstitutional”
i disagreed and gave you a lengthy reply as to why. None of my comments have been posted today, so i guess i’ll not give you my reasons why.
A mosque on every corner. The new Amerika.
7-Eleven Proposes Mosque Kiosks
…sorry, no link.
I dislike all religions equally. I haven’t seen any difference between my imaginary Buddha, my imaginary Mohammed, my imaginary God, my imaginary pink elephant, and my imaginary Yoda.
An object by any other name I OBJECT!
FWIW Bill, neither Buddha nor Mohammed are considered to be deities in their religions.
Buddha (Siddhārtha Gautama) was a spiritual teacher. I think that you would actually like him, as he contended that deities were irrelevant.
Mohammed was a self proclaimed prophet. Also not a diety.
yep. In all probability, Mohammed, Buddha, and Jesus Christ existed. God, Yoda, and Bob Dobbs on the other hand….
Yoda might exist… there is no proof saying he doesn’t.
Jeez, Jim, next thing you’re going to tell me is there’s no Santa Claus….
exist might I? proof I don’t there isn’t
FWIW Bill, neither Buddha nor Mohammed are considered to be deities in their religions.
IIRC, in Buddhism, gods are considered lower than humans, in that they’re less likely to achieve enlightenment. But I could be mis-remembering from college…
Its important to remember that Buddhism is an offshoot of Hinduism (and originated in India). In Hinuism their are in a sense two “tiers” of Gods. There is the godhead, which conceptually is similar to the Jewish/Christian/Islamic understanding what “God” is.
Then there are the lesser gods, like Ganesh or Hanuman. As it was explained to me, these beings are conceptually closer to the western understanding of Angels and Saints.
And then there are the Avatars, like Krishna and Rama. These are supposed to be incarnations of the Godhead.
This has absolutely nothing to do with housing, and I apologize for wasting anyone’s time with this.
Don’t apologize.
This blog helps me kick ass in “Trivial Pursuit”
Guess that means that Glenn Beck is an Avatar to certain segments of the population.
That was enlightening, In Colorado.
Krishna birth place has a temple dedicated to Krishna, next to the temple is a mosque which is a foot taller than the temple. The site has no relevance to Islam. Hinduism is a much older religion and the temple was build before Islam existed.
Better to send Islam packing from these shores. Some members of Islam are worst than the KKK.
And some of them aren’t……
I’d rather send the people who demand the butchering of the 1st ammendment packing.
Gotta agree hinduism is one weird religion. More paganistic than any other organized religion like Islam/Judaism/Christianity. Sure they have some fanatics but I don’t there is such thing as “converting to hinduism” or even a so called “practicing hindu”.
Krishna birth place has a temple dedicated to Krishna, next to the temple is a mosque which is a foot taller than the temple.
Somebody’s got a small pneis…….
I don’t there is such thing as “converting to hinduism”
I know one American guy who did. At least he said he did and named all his kids hard-to-say Hindu names.
Holy Cow! Mick Jagger married Jerry Hall in a Hindu ceremony somewhere in the south pacific IIRC, and then had it annulled (or whatever) when the SHTF. (The guy’s got good lawyers.)
This place might be a strong message by moderate Muslims AGAINST the violent @ssholery of the Islamists. Or it might be the sort of islamic triumphalism that the Glen Becks of this world are claiming it well. At the end of the day the GOVERNMENT has no right to deny the owners of this land the right to build based on what people might say in the buildings.
“At the end of the day the GOVERNMENT has no right to deny the owners of this land the right to build based on what people might say in the buildings.”
I completely agree. But it would be nice if the Muslim’s had some common decency on this issue.
So how far away would common decency say they should build? I’m curious. If I were building such a place, for safety’s sake, I might want to know that answer. Not that you would attack it, but there are undoubtedly some who are extreme enough to do so.
Would your common decency be the same as everyone else’s?
I completely agree. But it would be nice if the Muslim’s had some common decency on this issue.
um…. yeah.
For some history on that - see:
Dome of the Rock
Kasava Deo Temple
Hagia Sophia
Umayyad Mosque
Great Mosque of Cordoba
Seems the Muslims have a knack for building mosques on top of the locations of their conquests.
Pack:
And these places should have been our first targets when we were supposed to shock and awe saddam.
testing testing… is this thing on?
I’ve posted responses a couple of times, but they won’t show up. Trying again.
I hope they tell the state to get stuffed and build their mosque/cultural center/etc right where they planned in the first place.
Interesting to watch the supposed libertarians come out swinging against it. (excepting BiLA)
So the mosque 5 blocks away from Ground Zero is no problem? There must be a big line in the road that marks OK/Not OK for mosques.
Obama says recession recovery to take few years
By BEN FELLER The Associated Press
Posted: 3:20 a.m. Tuesday, Aug. 17, 2010
SEATTLE — A campaigning President Barack Obama said Tuesday it will take a few years to dig the nation out of the recession, warning impatient voters that any candidate promising faster results “is just looking for your vote.”
Obama: Caterpillar to rehire if stimulus passes
updated 2/11/2009 12:41:21 PM ET
WASHINGTON — President Barack Obama said Wednesday that heavy-equipment maker Caterpillar has informed him it will rehire some of the thousands of workers it has laid off in recent weeks if Congress passes an economic stimulus bill.
“The time for talk has passed,” Obama said.
CEO Contradicts Obama on Rehiring Employees
Caterpillar Head Says More Layoffs Likely, Even With Stimulus Funding
BY KAREN TRAVERS AND JAKE TAPPER
Feb. 12, 2009
“Yesterday, Jim, the head of Caterpillar, said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off,” Obama said today in Peoria.
But when asked today if the stimulus could do that, Owens said, “I think, realistically, no. The honest reality is we’re probably going to have more layoffs before we start hiring again.”
Wha……??
Summer of recovery?
Well that’s a tragic blunder for Obama. Ask somebody who will make money off taxpayer handouts if they’ll do something if you give them the free money and believe them when they say ‘SURE I will! Pinky promise!”
Obama said Tuesday it will take a few years to dig the nation out of the recession, warning impatient voters that any candidate promising faster results “is just looking for your vote.”
With a historical high of government and consumer debt each above 90% of GDP, it’s going to take a lot more than a few years to dig the nation out of a recession. Sounds like Obama “is just looking for your vote.”
Gov debt to GDP was much higher after WW2. Around 120% of GDP.
And we were the only remaining source of high quality manufactured goods.
And we were under rationing and austerity.
And we were the only remaining source of high quality manufactured goods.
+1
Somehow people forget this fact when pointing to the boom time of the 50’s and 60’s. It’s pretty easy to pay down your debt when you’re a booming export economy. It seems we’ve had a harder go of it since then.
And the future brings…??
And we were under rationing and austerity.
Wrong cause and effect there. The rationing and austerity was during the period we were building the debt, not when we were paying it off.
Nevertheless - I did another post that’ll show up shortly - follow up to Carl’s post.
“The rationing and austerity was during the period we were building the debt, not when we were paying it off.”
That’s true, but my point was that the tighten-the-belt personal mindset was in place. Not true today.
tighten-the-belt personal mindset was in place. Not true today.
Yep.
As evidenced by the still-extremely-low savings rate that exists now, relative to the 50’s and 60’s.
(Even despite the fact that the savings rate actually includes debt writeoffs as savings!)
savings rate
Gov debt to GDP was much higher after WW2. Around 120% of GDP.
Had a feeling someone was going to point that out.
We’ve never had BOTH government and consumer debt each above 90% of GDP at the same time.
There won’t be any growth with the high levels of debt in both areas.
Chart of household debt versus GDP.
http://www.npr.org/blogs/money/2009/02/household_debt_vs_gdp.html
From that link:
“The problem is us. The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us… We’ve been living very high on the hog. Our living standard has been rising dramatically in the last 25 years. And we have been borrowing much of the money to make that prosperity happen.”
Beim seems to assume that the blame for banks vs. us is mutually exclusive. It is not. People don’t just en masse decide “let’s all go out and borrow a bunch of money” without some kind of prompting. There are only three things that can act as such initiative across all people:
1. Some new technology
2. Government legislation
3. Central banking activities
… While #1 may have applied to the dot-com boom - it most certainly doesn’t apply to housing. Therefore I refer to #2 and #3.
PAY them and they will come…
Business
Mercury to complete move of Oklahoma work to Wisconsin
State’s pledge of $5 million entices move to Fond du Lac
By Rick Romell of the Journal Sentinel
Aug. 17, 2010 |(67) Comments
Mercury Marine will move as many as 200 factory jobs to Fond du Lac as it prepares to close its plant in Stillwater, Okla., the company said Tuesday.
With the state pledging up to $5 million if the firm adds the 200 jobs, Mercury opted to move assembly of its sterndrive marine engines from Oklahoma to Wisconsin rather than to Mexico or elsewhere, a spokesman said.
The company said it plans to move the assembly work on its MerCruiser line to Fond du Lac by the end of 2011. Mercury already is moving its MerCruiser casting and machining to Fond du Lac, and expects to finish that relocation by early next year.
The proper paperwork for a foreclosure or short sale is an issue now that the home moaners’ equity is so many degrees below zero, but this is not a problem that WAMU’s alleged false affidavit factory can not solve.
On page 24/32 of the pdf file, or page 22 of the actual document:
http://tinyurl.com/The-Debt-Machine-pdf
I am not surprised.
Thanks for the find, TCM_Guy.
On page 12:
“Ira Leibsker, a Chicago collection attorney, told a recent FTC
workshop “that there are literally probably tens of millions of lawsuits being filed, and more will be filed as time goes on.” Faced with mounting claims and exhausted judicial resources, state courts sometimes do little more than rubber stamp claims.”
And on page 16:
“In New York City, researchers concluded that a surge in debt collection lawsuits was a major contributor to a near tripling in
all civil court lawsuits, from 213,000 in 2000 to 618,000 in 2007″
…
“The huge volume of collection lawsuits has nearly exhausted the capacity of state courts”
Many of these debts have been discharged in bankruptcy or were incurred by someone with the same name or have passed the statute of limitations for collection through the courts or are a result of identity theft. Often the cases were never properly served, so the debtor is unaware of the case.
We’re all paying for this misuse of the courts.
What bothers me the most is this mentality that the Judiciary is now an expendable pawn to be played with. Without a functional Judiciary we can not call ourselves a democracy. What they need to do is find out who in these corporations is responsible for this, and then give them ten years in a prison. But I don’t believe this is what is happening. Most likely, the people responsible for this are getting promotions.
John Perkins, author of ‘Confessions Of An Economic Hitman’
Somebody took the audio of an interview John Perkins did a few years ago and added animation. The result is brilliant.
Good luck.
(you may now convert to Islam or something…)
http://www.youtube.com/watch?v=n7Fzm1hEiDQ&feature=player_embedded
What do converting to Islam, or race relations, have to do with the scope of topics covered on this blog?
I suggest that you and Eddie step outside, roll up your sleeves, and settle this like men. The rest of us have a housing bust to discuss.
Huh?
Why are you so cantankerous?
Just relax…
Jesus…
(oops)
I’d take a break from the bust to watch your proposed smackdown, though.
Heck I’d even hold their coats.
I heard about this guy a few years ago. Nice short film. Good find.
The tragedy of the commons - short term gain that means long term pain. If my company doesn’t relentlessly pursue next quarter’s profits, then some other company will. If the US doesn’t relentlessy pursue the world’s resources, then China will. And the ones that will become the dominant force.
So how do we fix it?
Rise to stardom. Fall from fame. (Attempt to) revive career with questionable TV project.
Vanilla Ice vs. His ’80s Reality TV Cohorts
“The Vanilla Ice Project” will focus on Robert Matthew Van Winkle’s (yep, that’s his real name) “passion for home renovation” and document the room-by-room overhaul of his 7,000-square-foot mansion in Palm Beach, Florida, according to a statement from the DIY network, which plans to premiere the series in October
For so many stars of the 1980s and early ’90s, it’s just the way the cookie crumbles. Earlier this summer, Debbie Gibson and Tiffany threw away their ’80s pop star rivalry (and possibly their common sense) to film the Syfy movie “Mega Python vs. Gatoroid,” which features them brawling on top of dinner tables and in a swamp, and Gibson uttering the utterly appropriate post-fight line, “I think we’re alone now.”
The latest throwback to turn to TV for a tune up: Vanilla Ice. He couldn’t hack it in rap, but apparently, home renovation is his new thing.
Will the “Ice Ice Baby” singer’s latest endeavor crown him the king of cool again or make him melt into the morass of ’80s/’90s trash?
Seriously, is this from The Onion?
Sometime in 2008 we were sucked through a trans dimensional vortex into a the reality where Onion stories are true and mainstream media stories are satire. The transition was so subtle that few of us noticed.
Sometime in 2008 we were sucked through a trans dimensional vortex into a the reality where Onion stories are true and mainstream media stories are satire. The transition was so subtle that few of us noticed.
Wait.
That would mean that The Onion is satirical?
Obviously this bubble has not yet deflated.
10:30 pm, me on a phone call “Guess what Mr. Landlord…you have a problem!”
Really cool event here at your property last night. I was splish- splashing away in the shower when there were a couple of horrendous crashes and the whole house shook. My little yellow rubber duck is still shaking.
I live under 13 giant oak trees. These are old monsters and great for shade, squirrels and ravens. Some are nearly 5 ft in diameter and at least 200 years old. A monster main branch broke and fell on your nice 2 year old double garage nearly squashed my newer car. Thankfully, it was outside, buried in leaves and not a freakin’ scratch or a nick:) No storm or nothing, just a rotten branch whose time had come. Thud!!
Branch was nearly 25 feet long with leaves and thick as a human body. Oak is heavy and it wasted the entire lengh of the garage side and roof and buried my car under a canopy of leaves with it’s end.
I had crawled under the mass of leaves by the car and garage and had only my legs and little tennis shoes sticking out while my neighbors snapped some cell phone photos under the security lights for my LL. He was totally freaked out.
Ding Dong, the witch is dead !!
What a mess…Reason 101 that I am glad that I’m THE renter.
Homeowners insurance should take care of the worst of that. Wanna bet he’s uninsured/underinsured?
He’s well insured but thse photos of my toes sticking out had him reaching for nitrogylcerin tablets.
Ah… I see. Yes, somebody dying on your property is a heart stopper!
Glad your car is okay! And dropping on the garage is about the best place for it to fall. Easiest to get at areas for assessing and repairing.
“Glad your car is okay”
Thanks, for sure. I just paid good money to have that puppy waxed and cleaned two days ago.
Sounds like someone should’ve been trimming that tree. Using a chain saw, having a Bon fire and a fine cigar would be a great way to spend a day.
Back during the summer of 1982, a storm blew into Chester County, PA, and dropped a tree section on my parents’ house.
I was visiting them, and the next day, I was drafted for cleanup duty. One of our next-door neighbors showed up unannounced with his chainsaw and went right to work.
While Chainsaw Val was cutting the big tree into more manageable chunks of firewood, the Slim family was busily adding to the woodpile.
Another next-door neighbor showed up and stood there motionless. Wouldn’t even pitch in and help. If you’ve ever spent any time in the Keystone State, you’ll understand that such behavior is very un-Pennsylvania-like. We Keystoners help each other out.
Many years have passed, both neighbors have moved away, and I’m pleased to report that Mr. Motionless’s family sold their house to a delightful family that are very helpful to my now elderly parents. I’m so glad they’re next door.
But we still talk about how Mr. Motionless couldn’t be bothered to help us stack wood.
I knew a tennis player who would do absolutely nothing but watch his neighbors do all the work when mishaps occurred to his property. He sold the property, sold expensive items from the property and made it look like a theft, filed a false theft claim on his insurance for $80k, and left for Hawaii. Goodbye and good riddance.
Another next-door neighbor showed up and stood there motionless. Wouldn’t even pitch in and help….We Keystoners help each other out.
Why do Keystoners feel entitled to steal another’s labor? To make Pennsylvania into a utopian dream where the producers are punished?
There was no profit motive for Mr. Motionless to help so why would he? Community, neighborhoods and culture are built on free market realities, not destructive, collective altruism.
I don’t understand.
I might add something about this particular nabe: It was the most conservative and Republican areas I’ve ever lived in.
So, you might think that it would be a hotbed non-altruists. And you would be wrong.
Believe it or not, in that ultra-conservative environment, I learned about the importance of being helpful to others.
Case in point: There was another next-door neighbor (not mentioned in my tree story) who all but raised me. She was one of my reading mentors, and y’all know how I love to read.
Any-hoo, she was forever urging me to read books from her family library. Whenever I finished a book, I had to go down to her house and give an oral report on it. And she’d ask me questions, just to make sure I understood what I’d just read.
This lady had quite a serious heart condition, which all of us kids had been told about. We were told that we all needed to keep an eye on her, and we did.
I hated visiting my ex-wife’s family. Mainly because I spent all my time there being Mr Fixit on the cars, the house, the dishwasher, etc. etc.
Remember one night when the sister in law called me around 8pm on a Saturday night (4th of July weekend). Her POS Aerostar minivan was getting hot, and was blowing out coolant. And she was 50 miles away from the house.
So off on a road trip I go. Found this oddball heater hose they used on Aerostars was split. Thing was buried in the back of the engine compartment, and was one of those that you had to get from the dealer.
Whittled down a wood plug, and used a coat hanger and a pair of pliers to clamp it into the end of the hose at the accessible end. Heater was then inop, but it was July, no big deal…..refilled the radiator, and it was ready to go.
She then proceeds to get her panties wadded up, because I wouldn’t cancel the rest of my weekend plans to try to track down a new hose and replace it for her.
Wow, Rio is your comment serious? How about it’s just nice to help your neighbors. Good neighbors are, in my opinion, worth the price of homeownership. I have a neighbor who takes my trash/recycle can up my driveway every single week. No idea which one it is - they just do it (I leave before the trash trucks come, and I’m the last one home on that block - lots of stay at home or part-time job moms and retirees). It warms my heart to know someone cares at least enough to help me in that small way.
I was also told that, come snow time, there are a few neighbors with snowblowers that just take it upon themselves to plow all the sidewalks - not just their own.
Be it Pennsylvania or anywhere else, good neighbors helping each other out is the way it should be.
I learned the way to put a stop to this (I was Mr. fix it for a while) was to stop going there. If these people needed to see me they could visit me.
I was invited by a relative to visit them in FL. I took them up on the offer, but the expectation from the SIL was that I was going to spend my vacation scraping the old paint off the wooden shutters. She told me I was lazy. I dread the thought of what kind of swimming pool maintenance is required on a pool that is never used, so I have never been back.
Part of the reason that I have never owned RE is because I don’t want to do this shit on my own property. (It’s a quality of life issue for me.) Why would I do this for somebody else’s?
I once had a little-Hitler type boss who invited me over to his house to enjoy a hot summer day at his above-ground pool. I very quickly and vehemently declined, primarily since I do not associate with the LH types. I also sensed something was amiss here. I found out from a co-worker that the expectation was that I would help to assemble this thing, as it had arrived on his property in kit form.
Why do Keystoners feel entitled to steal another’s labor? To make Pennsylvania into a utopian dream where the producers are punished?
There was no profit motive for Mr. Motionless to help so why would he? Community, neighborhoods and culture are built on free market realities, not destructive, collective altruism.
I don’t understand.
Yes, because free markets and charity are of course mutually exclusive.
Wow, Rio is your comment serious?
No - it was very much tongue-in-cheek (apparently you don’t know Rio, though that comment could have come from one of about a dozen board denizens). But see my response above.
I had that happen. The branch itself was the size of a tree. I thought the house had been hit by lightening or a bus.
Thank god the house was old and had been built with hard pine 12″ rafters. Just messed up a few shingles. Try and find that these days.
I liked Vanilla Ice back in the day. I thought his hit was kind of fun. But that’s just me.
I was a volunteer at the FIRST Robotics thing. I witnessed lots of current high schoolers on stage doing Karaoke of “Ice Ice Baby. I guess it’s youtubes fault. It was strange.
I can’t decide between “Shake your love” and “I think we’re alone now (Cover)” though.
Is anyone else tired of the Remax ad with the smiling Re-al-TOR with the perfect hair?
Yes,she should go away.Not sure how many believe the garbage that comes out of her mouth.I imagine she has pissed off a lot of people.
No, I’m not at all tired of these ads. In fact I hope Remax spends a lot more of their own money by buying more.
Bring back “Suzanne Researched It”. The world could use a laugh.
Call it “The Revenge Of Suzanne” make it a VERY expensive production brought to us by the NAR.
Actually, the one that I kind of liked (I think it was promoting FHA) showed a guy turning on all the lights, then leaving the front door open. Then you see him on the phone: “Mom, tell dad I’m airconditioning the whole outside.” Buying a house pre-bubble, when I could afford it really DID make me feel “all grown up.” But just because something is good, doesn’t mean that you should be willing to pay ANY price for it.
Just last summer ReMax (I think) had and ad with people “kicking themseles” for not buying houses during that “once-in-a-lifetime” buying period. Wonder if any of the buyers who fell for it are now kicking themselves for being such suckers?
I remember those ads. They made me laugh. I was wondering what the homeowners who were losing those houses in foreclosure that were now ‘buying opportunities’ were doing. I’m sure ‘kicking themselves’ would be putting it mildly.
I remember those ads. They made me laugh. I was wondering what the homeowners who were losing those houses in foreclosure that were now ‘buying opportunities’ were doing. I’m sure ‘kicking themselves’ would be putting it mildly.
Well, here in Tucson, the insanity marches on. There’s quite a push to get low income people into foreclosed homes. See these two sites:
1. Your Way Home - Arizona
2. Live the Solution
I might add that the nabe that’s linked from the second site is on the South Side. That’s the bad news part of town. Lotsa gang-banging, drug trafficking, home invasions, and other not-so-fun stuff.
Not at all. I remain grateful for her intensive and objective market research, her superior knowledge of the local and national housing market, and her tireless efforts to educate me the buyer & get me the very best deal. That botox smile says, “I care.” And for making me aware that now [and every other day] is the very best time to buy. All that, and she only charges six percent.
Her perfect hair and botox perma-grin are just added bonuses.
Hey ho,
Heard lots of complaints about digital broadcast for TV. Well, personally I have perfect reception and have never noticed any fades at all.
I’m surprised about the fade remarks because the old system was the same frequency plan so had the same fade problems. If you are at the hairy edge of reception might be the digital signal breaks up.
Other thing you get with the digital system is more efficient use of bandwidth and coding gain. So, typically, there is a huge signal to noise ratio advantage with the new system. Hence in most cases your reception would be better.
I’m wondering if you are in some freakish fade zone due to reflections or something like that. Would have also effected your analog just the same. That or the networks are cranking down the power to save money.
I got a new TV with a built in receiver and it works very well. I have more stations than I know what to do with. So, do the networks. You have fox 11.1 11.2 11.3 broadcasting in three different formats of the same show. Plenty of other channels and subchannels. Continual weather and other news. All free. PBS even has multiple slots.
At first I was kind of upset with the digital decision but realistically it’s just way better service. Between that and my wifi connection to the net it is just way more TV than one needs.
Seems like there are big differences in the functionality so I’d say get a new TV with a digital receiver and a good blueray. Then you are pretty well set.
“I’m wondering if you are in some freakish fade zone due to reflections or something like that. Would have also effected your analog just the same. That or the networks are cranking down the power to save money.”
I can only speak for Brooklyn, NY, which had the best OTA reception (and the lowest cable use) in the US before the WTC attacks.
The temporary replacement broadcast center at the Empire State Building never provided as strong a signal. So the reception was a little fuzzy with analog.
With digital, there is no such thing as bad reception — you have it perfect or you don’t have it at all. So when the signal fades, the screen freezes into an abstract painting — kind of Leroy Nieman if you are watching sports.
Note that I don’t have a roof antenna, so the signal has to penetrate our brick building (and some buildings betwen us and Midtown Manhattan). The reception is better on the top floor than one floor down. It is better on days with no wind than days with wind, which surprises me.
And it was better with the converter box before the changeover than it was after the full changeover. Maybe they did turn the power down a while after the changeover was complete.
WT:
Tech details…due to the older Empire antenna structure you had to use a smaller size antenna (less weight) which also meant you had to supply less transmitter power to it as well
So you lost about 30% of the signal strength and distance.
The temporary replacement broadcast center at the Empire State Building never provided as strong a signal. So the reception was a little fuzzy with analog.
fox 11.1 11.2 11.3
I can’t use the “back” button with these weird decimal channels. Can you?
Yes, I probably don’t have the right equipment for the new digital age. When this stuff wears out, I’ll give your suggestion a try.
We have a Sony 13 inch color TV that we bought 23 years ago when my son was 3. Shortly after purchase, he came and told me that the TV was making funny sparks. I immediately unplugged it. It turned out he had poured juice through the vents in the back. After drying out, it has worked perfectly since. I’ll get rid of it when it gives up the ghost.
I have commented from time to time about how certain neighborhoods in the Ruskin area (Tampa Bay, south Hillsborough County) have deteriorated. But yesterday, I passed by one neighborhood on Shell Point Rd east of rte 41 and was shocked, I tell you, shocked at its appearance. It’s a formerly pleasant little subdivision originally built in the 1970s. Parts of it are single family residential, parts of it have duplexes. It was a middle and lower middle class area, but always more or less neat, shady, with the lawns well kept. It’s a traditional, non HOA subdivision that had some lots that people bought over the years and built on. So there are newer homes as well as the original 1970s homes.
It was pretty well vultured during the bubble, with people paying premium prices for those duplexes and some of the single family homes in there. At one point I went driving around on the back streets and there was a lovely place on half an acre for $280,000 just past the peak of the bubble. (just to give you an idea, this would never have sold for more than $150,000 and even that would have been a stretch)
From time to time as I drove by, I observed a sort of slow and steady deterioration, but yesterday, after not having been by for a while, the frontage looked like it has been hit by a bomb. Lots of orange stickers on those duplexes and some sfh, wildly overgrown lawns, broken windows, peeling paint, etc. I suspect one investor owned a bunch of properties and has now defaulted. Mind you, this neighborhood had become popular with some of the “guest workers” in the area as well as some of the folks who were relocated from the inner city.
Anyway, I’d like to congratulate Ruskin on its first observable, in-your-face slum, right on the main drag of Shell Point Road.
I feel sorry for the regular working class folks who have or had property in there.
And to think, we have destroyed hundreds if not thousands of these neighborhoods by ourselves, without any help from al-kaida.
hey palmy
notice any boiled peanut stands?
Ew.
Not lately. Boiled peanut stands tend to be in the roadside redneck areas, not at slum road frontage.
I got your point, however. Just so you know, I’m not a fan of boiled peanuts, or any kind of peanuts, period.
Maybe you’re thinking I ought to be a fan, though?
The most disturbing pieces of news was about the Fannie/Freddie conferences.
Filled with bank people that claim the same thing over and over. If we had a private mortgage market, the higher interest rates would prevent people from buying. They also were pretty open that securitization should continue with explicit backing from the government so the taxpayer takes the losses. Pretty bold about what they are asking.
So. Not sure what this means. More price supports and long term deflation since people can’t afford the prices.
I’m also noticing that a lot of rents are lower than what I’d expect out in the coastal area. That is it is not heading into positive cash flow levels from what I’d expect.
My guess is the math is working like this:
Rich guy gets loan buys house for xxx dollars. say 5% down.
Rents house out for cost of interest, taxes, hoa exc, PMI.
Rich guy pays principal. Interest rate is low so rent is pretty low.
The rich guy writes this thing off in his business expense as a big loss because he gets depreciation and interest and taxes are deductible.
Either the house goes up in value or stays flat maybe falls a little. In the meantime, if you can afford this, he gets a big tax deduction and the money goes into equity in the house. Sells it sometime later as a capital gain. Probably he lives in it for a year so he can claim it as a primary residence and shields it from any tax at all.
Wash, rinse, repeat. Further you don’t have to be vastly rich to do this. If you have 50k~200k to invest and a few hundred dollars a month in money to put aside, this would work.
Now I’m sure I’m missing something in IRS rules that say you have to show a profit some years, but not sure how hard that is to skirt.
I’m proposing this but I don’t know where this falls apart… might be people with I/O loans hanging on waiting for property to go up in value too.
Just noted the multiple is off from what I’d expect based on prices.
“Not sure what this means.”
I am:
‘We need to divert more tax dollars into subsidizing our industry, so that I personally can get RICH, RICHER, RICHEST!’
Capitalist on the way up, socialist on the way down.
Hypocrites to the end.
Privatize profits, socialize losses; lather, rinse, repeat.
This conference news is making me feel sick.
and irked
I’ll tell you what you are missing. You are assuming that people pay their rent, and pay it on time. You are assuming that people take care of rental property as if it were their own. It’s a neat little plan with cash flows coming in every month, paying off the accumulated debts. Let me give you a more realistic financial analysis.
For people who have a large quantity of properties, you can average out your losses. So, if you are a slum-lord, you can make a go of it.
But I can assure you, having dealt with RESIDENTIAL properties in the past, that it is something i would never want to do again. The worst thing that happened with rental properties was the imposition of “landlord-tenant” laws. They completely favor the tenant, making it difficult to remove them after they are in the place. It usually takes 3 to 6 months…….and they know it.
So, here’s the scenario:
You buy house. Spend $10,000 to $20,000 to effect upgrades from the distressed property condition (the previous owners quit paying the mortgage, were evicted, and removed everything they could, including the toilets and sink). You get “license” from City to rent property. You place sign and ad. Calls come in.
Everyone has little to no money. They can afford the rent, but not first, last, and security deposit (always get these).
You get a bunch of people calling for 2 months in the same financial distress.
You have lost 2 months mortgage payment, plus the month it took to fix up the house. So, finally, you get another applicant that says they will really, really take good care of the house and can pay the first and last if you can let them slide on the deposit. You agree.
After 5 or 6 months of getting the rent on time, the tenant becomes a “slow pay”. The date of receipt for rent starts sliding. First a week, then 2 weeks. Eventually they are a month behind. You tell them they need to get caught up. They have already overworked the stove, as they cook all the time for they and their friends, and you needed to replace it. The house is 10 years old and the water heater isn’t working properly.
Since they are already a month behind, you no longer have any “last month” rent. You apply the last month to the current month, while they assure you they will get caught up next month.
Next month they don’t pay. You tell them you want them to vacate, as you have bills to pay and can’t let them stay their for free. They have no place to go. You file with the sheriff’s department to begin eviction processes. It will take 90 days from the time the notice is filed. They pay another month and the process is halted. Next month same story. You file again, and this time they become derelicts. They are mad that you are not letting them live in your house. So……….when the finally are forced out, they pour gravel into your plumbing, remove whatever isn’t tied down and basically leave you a big mess to clean up.
You are now out 6 months rent and need to have new carpet put in because one of the girls boyfriends decided to repair his motorcycle in the living room, because it was raining that day, and hot. Much better to work in the air conditioning.
You are upset. You take them to small claims court. You win a judgment for $2200 for damages and back rent. They say they can’t afford it, so the judge lets them pay you back at $50 a month.
You get a check next month for $50. You get another one. Then, they quit paying. Meanwhile you need to come up with the money to fix the house and find a new tenant. There are plenty of applicants, but none of them have the first, last, and security deposit………..
Wash, rinse and repeat that.
I have.
I won’t do it again. If i ever do rentals again, it will only be in high income areas, where housing is basically unavailable to “working class” folks. Yea, i know, it’s all a tax-write-off. How much is the headache of no-pay, slow-pay tenants worth??? It’s difficult to access.
And….given the high number of walk-aways in the current housing market, I am of the opinion that we have become a nation of free-loaders. Do you think that someone that defaulted on a mortgage and lived “free” for a year or 2 is going to start paying rent on time? I know, you are going to “Screen” them. But YOUR mortgage is due, and you need a paying tenant. What to do?
The worst thing that happened with rental properties was the imposition of “landlord-tenant” laws. They completely favor the tenant, making it difficult to remove them after they are in the place. It usually takes 3 to 6 months…….and they know it.
One of my relatives is dealing with this very thing. She’s in CA and bought an investment house back in ‘04. (Yes, I know. Crummy timing on that purchase.)
She was renting it out to someone who seemed okay, then that someone lost her job. Things went to blazes after that. My relative finally got the tenant out of the house, the place is trashed, and guess who gets to clean it up.
She’s now trying to save the place from foreclosure, and she’s also undergoing cancer treatment. IMHO, she should concentrate on fighting for her life and let the house go back to the bank.
I am of the opinion that we have become a nation of free-loaders
Preach it brotha!!!
I get the same impression. Which is why I will never co-sign for anybody on a loan, will never make a personal loan (again), and will never own rental RE.
P.S. Recently, somebody asked me for a $600 personal loan, with collateral. Without even asking about what kind of collateral, I simply asked them why don’t they just sell their collateral for $600?
oops - forgot
why don’t they just sell their freak’n collateral
sorry
A Little trick Dio:..
At least here in NYC if you don’t ask for monetary damages just possession, it’s put on a fast track and you could have a court date sometimes in as little as 2 weeks, they still have to be served properly and the paperwork must be filed with the court… and then with a court order a sheriff could toss them in a few days.
They completely favor the tenant, making it difficult to remove them after they are in the place. It usually takes 3 to 6 months…….and they know it.
Those rules don’t apply in Florida and most other jurisdictions that i am aware of. The tenants have months to vacate. It depends on the lease. If you have a yearlong lease, the it takes about 3 months. If you rent month-to-month, then it is quicker.
however, if you enter a lease on a month-to-month basis, it’s almost pointless to have a lease. There are lot’s of regulations concerning real estate here, mostly because some many scams have been pulled over the years. The government always needs to “fix” the relations between landlord and tenant.
If i were to become a landlord, it would be for commercial property, only. With a real good lease agreement.
You could check to be sure….
To me being a former paralegal why should you be allowed to run up the landlord’s losses when the landlord is willing to eat the losses just to get the apartment back?
Most tenants defenses revolve around the amount of $$$ that should be payed the landlord…eliminate that aspect and why should the courts help the tenant?
Wash, rinse and repeat that.
Sad but true. I rented a house out that I couldn’t sell back in my Stupid Time. Gave me new respect for landlords.
Makes you wonder, where were these horror stories back when people were buying 2nd and 3rd houses to rent out as “investments”?
The were all inexperienced “investors”. They weren’t putting up much money, and realistically, MOST of them were buying them pre-construction and hoping to unload them by the time the properties were finished. For those who got in early, this scheme worked out okay, as demand was increasing faster than construction and prices were climbing faster than anyone dreamed possible. There were many flips before we saw all the flops.
Experts: U.S. can no longer afford housing tax breaks
WASHINGTON — Federal housing policy offers the wealthiest Americans billions in tax breaks without delivering much bang for the buck in increased homeownership, critics told government policymakers Tuesday.
“We aren’t getting our money’s worth,” Mark Zandi, chief economist of Moody’s Analytics, said at a government conference on reforming housing policy.
The government spent $230 billion last year to promote homeownership through tax breaks and spending programs. The biggest chunk — $80 billion — went toward the mortgage interest deduction, according to the Congressional Budget Office.
There’s a lot of things the US can no longer afford. But Helicopter Ben still has his printing press.
+1
The U.S. government has actually bought about $13.3 Trillion of stuff it couldn’t afford since 1836. Over 60% of that stuff we couldn’t afford has been bought just in the last 10 years, with most of that just in the last 3.
(Most of the purchases of that stuff was really just buying votes)
And votes spoil so quickly! They’re really only good for one use at best!
“U.S. can no longer afford housing tax breaks”
Interesting contrast to Gross, who says Uncle Sam should send a new flood of money into housing (and into Pimco).
Gross (and the others of his ilk) will get what he wants IMHO……
Take away the tax break on mortgage interest and you remove another artificial price support of houses.
I’m all for that. It will make homes more affordable. It will encourage people to save for a higher down payment and pay off their loans faster. It certainly will put the nail in the coffin of interest free loans!
Mortgage Interest Tax Deduction-
No other lame realt-whore talk has gotten more mileage, emptied more pockets and screwed more people than this one. And done so for decades. This lie has been successful beyond all measures.
I would PAY $$$ to see this one go away.
I’m going to go out on a limb here (as such) and state that there’s NO WAY the mortgage interest deduction is removed, or even reduced significantly, within the next 15 years. The PTB (REIC/government/FIRE economy) simply cannot afford to take that hit with a weak housing market, and will not allow it to happen.
There may be some token cut in the near future, but if so it will be just that - a small token.
Token cuts are given every year that the standard deduction is increased.
Yes.
Key is though - the NAR still has that “Mortgage interest is tax deductible!” reason #23 why it’s a good idea to buy a house on their list. (Nevermind all that standard deduction crap, nor the fact that interest portion of your mortgage payments decrease over time, nor the fact that you’re not actually getting any money from the tax deduction - you’re just losing less than you might otherwise lose.)
I really like to hear these RE shills tell me “but you get all of that money back at the end of the year.”
I have been thinking of a good retort to this, and I finally came up with one. ‘So let’s say my payments are $1k/mo, who is going to give me a check for $12k on the last week of December?
The biggest problem about the MTG deduction is that most “normal” people (those with median priced homes; 150K or so) don’t really benefit from it at all, it’s just used as a trap to fool them into buying an overpriced home. On the higher end (500K+), the deduction can make a pretty big difference, especially given that folks who can afford those homes are in higher tax brackets. However, the question that nobody seems willing to ask.. Why on earth should we subsidize the homes of the rich (to the determent of the less well off)?? It makes no sense that the MTG deduction can apply equally to a 50K MTG or a 400K MTG; if it’s to promote lower income homeownership it should be capped at the median income of an area.
The deduction, of course, just raises the price of the house on the other end because (just like IO and neg-am loans) it increases “buying power” because the actual payment is lower. Without it, home prices would have to fall by 0% (inexpensive houses that wouldn’t generate enough interest to matter anyway) to 20+% (million dollar homes where the homeowner is in a very high tax bracket already).
How is this a bad thing? The MTG deduction encourages borrowing/spending money that shouldn’t be borrowed/spent. Frankly, any deduction should be against how much EXTRA you pay per year on your MTG, not how much interest (debt) you manage to rack up each year.
Why on earth should we subsidize the homes of the rich (to the determent of the less well off)??
(Using rough estimates and generalizations for rough analogy)
I think we live in a bizarre form of “socialism” where 70% of the advantages and subsidies are given to the very-rich.
In order to keep this from being changed the very-rich receiving the 70% make it a point to vilify the poor receiving the 30%.
One tool of vilification is to cry “socialism” regarding the poor’s subsidies which then takes the public’s eye off the ball that most advantages are actually being given to the rich.
Because of the “socialism” card and the fears and feelings it ignites, it then becomes very difficult for anyone to shine the light on the rich’s looting and war against the American people.
However, this is changing.
One tool of vilification is to cry “socialism” regarding the poor’s subsidies which then takes the public’s eye off the ball that most advantages are actually being given to the rich.
Two other reasons the “socialism” tag is gaining so much use:
1)The religious right were played for fools in the late ’90’s by the GOP who proved, in the long run, to not be any more moral than the Democrats. It’s getting harder to “rally the base” with cries of “Gay Marriage/Adoption”, “Abortion” and “Christian Values”.
2)What people continually overlook is that Limbaugh, Hannity, O’Rellly, Coulter, etc are entertainers. They need audiences in order to make a living. In order to get and keep audiences, they have to keep finding new fears to exploit and grudges to nurture.
What people continually overlook is that Limbaugh, Hannity, O’Rellly, Coulter, etc are entertainers…………
You really ought to expand the list to include Dan Rather, Katie Couric, Barack OBAMA, the girls on the “view”, and all of the hosts and guests on MSNBC, NBC, CBS, ABC, and writers of the New York Times.
Dang Diogenes you are on a roll!
My feeling as well.
A much more likely change could be lowering the limitation of the size of a purchase-money mortgage. Right now IIRC it’s $1 Million for full deductability of the interest. They could lower this to “conforming” size mortgages without too many people complaining, and sell it to the liberals as “soaking the rich”.
Well we should get rid of the mortgage interest deduction ONLY if we ALSO get rid of the deduction of interest deducted as a business expense. Otherwise with landlords able to deduct mortgage interest and owner/occupier NOT able to deduct interest, the tax code would actively incentivise people rentals rather than owner occupation.
You all will appreciate the mortgage deduction when you buy. I don’t think we are “under taxed”. They need to quit spending PERIOD
“You all will appreciate the mortgage deduction when you buy.”
The standard deduction exceeds the itemized for me.
The mortgage interest deduction allows home prices to inflate so higher taxes can help support the great society programs.
Housing Summit: More of “Heads I Win, Tails You Loose”
Get this from ABC News:”The Mortgage Bankers Association has proposed a system in which risk-based fees on a class of mortgage-backed securities would be charged in exchange for an explicit government guarantee ensuring investors do not suffer losses.”
Fannie and Freddie did not make the boom or cause the crash. Still, they are an object lesson in how to cheat and leverage to pad executives pay and bonuses.
Here come the Fed Govt back to the Taxpayers to provide a 24-7-365 bailout to these money loosing pieces of drek.
Roidy
How come nobody ever discusses the financial compensation of the executives of Fannie and Freddie? I bet we would all puke.
So what chances do all of you (y’all in southern speak) think they will automically lower interest rates on Fannie and Freddie held loans? And how low will they go if they do?
Even if they lower it to ZERO for 30 years, most people would still not be able to pay the month bills, when you add in taxes insurance repairs water electricity..etc on that inflated bubble sales price.
I’m all for fully backing the mortgages only if we get to execute bankers that sell us bad loans. If they want no financial responsibility, let’s replace it with physical responsibility.
“explicit government guarantee ensuring investors do not suffer losses”
Huh?
Yeah that’s pretty dang scary.
And they actually think this will reduce the overall risk in the system.
I have news for them. You cannot remove, or even reduce risk in the marketplace. You can only transfer it from one place to another.
In this case of course it’s all being transferred to the taxpayers.
Ridonkulous. How about this:
I’d like all my losses from the 2000 and 2008 stock market meltdowns to be paid back. Nevermind the gains I received in subsequent years, they are irrelevant.
Is this really what “investing” expectations have become?
Is this really what “investing” expectations have become?
Yes. For government employees and unions.
Remember what the GM bondholders got? that’s right. nothing.
Remember what the GM bondholders got?
I have a friend that lost high 5-figures on that. He knew they were risky when he bought them, but he thought surely he’d get his share of the remains of the company if it cratered. Instead his share was given to the UAW if I recall correctly…it’s been a while now.
Model Corruption:
http://tinyurl.com/GM-BONDHOLDERS-GOT-FLUKED
And this is why enterprises with union labor will have a difficult time attracting capital in the future. After what has happened to GM bondholders, anybody who buys bonds from the FoMoCo is an idiot.
I wouldn’t mind backing a mortgage where the buyer put 100% down…
The NAR is running radio ads. They acknowledge it’s a bad economy, but it’s still a great opportunity to buy. Hey, the interest rates are low, housing is cheaper, so don’t be afraid. Call a real-a-t*rd today.
There’s never been a better time to buy (according to realtards on any day of the century…).
That one made me laugh…
really, perhaps they new tag line should be ‘Dont be a scaredy-cat’ with cute pictures of cats. That will work better than the current stupid Remax and NAR ads
They SHOULD be running ads that push contrarian investing platitudes. “How do investors get rich? When people are buying, sell. When they’re selling, buy. We’re in the middle of the biggest sell off in housing history. Do the math.”
They’d still be wrong, but at least they’d be trying to make people THINK about why you’d want to buy a house when housing is getting hosed. (They’d just be wrong about the timing.)
It is a good time to buy at the low end. It is an awful time to buy at the high end. By low end I mean less than $150K.
It might be a good time to buy at the low end if there were actually something good at the low end.
There are regions with good homes sub $150K, and there are regions with stable jobs… and the twain shall never meet.
It isn’t a good ime to buy at the low end if you consider the pancaking due to take place when the Alt-A and Option ARM crap begins mass-resetting. Why buy a low end home at X price when better homes will soon be just as cheap, and the lower end will be lower still?
I think the low end has gone down about as much as it will. Buying a $150K house with only 5% down over 30 years is about $750 to $800 a month at today’s rate. Add in tax/insurance and it’s under $1000.
You’re not going to find a comparable house to rent for less. A decent 3 bedroom apartment is $1000.
I’m looking at buying low end housing from an investment point of view. But I’m doing so while also thinking as someone who has $1K to spend on housing. Will I spend that on a house I own or on an apartment I rent? I think given that choice most people will pick the former. Not everyone will, but enough will that prices will sustain their current levels.
As for the arms that are resetting, the low end resets have happened already. The resets/defaults still to come are the high end. Someone who bought $150K with an arm and couldn’t make the payment bailed long ago.
Buying a $150K house with only 5% down over 30 years is about $750 to $800 a month at today’s rate. Add in tax/insurance and it’s under $1000.
And, you my friend, have fallen for the “how much a month” real estate buying program. You are looking at what the NAR is selling, that rates are the lowest in 50 years, prices are down and it’s easily affordable.
If you are planning on staying in the house for AT LEAST 10 years, then it may be okay. But typically, people move much more frequently.
So, here’s the problem: The last 25 years we were in a continuously falling rate environment…..all the way to the bottom. People who bought got to refi for lower and lower rates and got a good financial outcome.
Now, rates have only one way to go. They will go up.
When they do, the “how much a month” equation changes.
If you need to sell the house in the next 5 years, then the buyer will demand a LOWER price so he can have the same monthly payment that you think is “affordable”.
Unless the government continues to provide subsidies, this just isn’t going to work. Lower rates make prices go up. Higher rates drag them down, unless you make “funny” or shall we say “creative” mortgage financing arrangements, like Pay-option loans.
When I hear HowMuchaMonth dopes, you can be quite confident they’re sub mid-twenties and don’t know any better.
http://www.huffingtonpost.com/2010/08/17/bill-gross-mortgage-refi-_n_685228.html
Bill Gross of the PIMCO “investment” fund is calling for a massive taxpayer-funded mortgage refinance scheme. His K Street lobbyists are no doubt putting the final polish on draft legistlation for the signatures of Wall Street’s Congressional stooges.
US Says Bankruptcies Reach Nearly 5-Year High ~ Reuters
U.S. bankruptcy filings have reached the highest level since 2005, government data released on Tuesday show, as the economy slows and the unemployment rate hovers just below double digits.
There were 422,061 bankruptcy filings between April and June, according to the Administrative Office of the U.S. Courts, up 9 percent from 388,148 in the prior three-month period, and up 11 percent from 381,073 a year earlier.
For the year ended June 30, there were 1.57 million bankruptcies, up 20 percent from 1.31 million a year earlier.
Consumer bankruptcies rose 21 percent to 1.51 million, and business bankruptcies rose 9 percent to 59,608.
U.S. bankruptcy filings have reached the highest level since 2005, government data released on Tuesday show, as the economy slows and the unemployment rate hovers just below double digits.
Wasn’t that bankruptcy reform law supposed to put a stop to this sort of thing? IIRC, Bush signed it into law in ‘05.
I seem to recall that it was supposed to put the brakes on serial filers.
Somehow I’m not surprised that in the wake of bankruptcy reform legislation the banks just lent more money to riskier borrowers. Kind of like a financial Davey Lamp, when risk is the limiting factor, risk reduction devices just allow one to operate faster/more productively. They don’t actually reduce risk.
Damn you Bush! It is always your fault!
Wasn’t that bankruptcy reform law supposed to put a stop to this sort of thing? IIRC, Bush signed it into law in ‘05.
What may be happening is this: (roughly)
The BK reform law forgives debt only if the filer makes below median income in his state. If not the debt is restructured.
Median income is a lagging indicator therefore many people now have income below the median income stat..
Therefore, many more qualify to have their debts discharged and not just restructured.
I think that at some level, the idea was that if you had above median INCOME and your net worth became negative you were more culpable than those with below median INCOME and negative net worth. But while the well off certainly can and should save enough that it takes a more unlikely set of events to send them into unrecoverable levels of debt it will certainly still happen to some of them. At the end of the day, bankruptcy is about net worth, not income.
I think it was argued that people above the median income would be more successful in Chapter 13. They had the income to pay back those credit card debts if they just made them a priority.
I think many of those formerly above median earners are now unemployed and are taking the opportunity to get off the treadmill.
Some may also be using bankruptcy as a tool to forestall foreclosure.
Major stores report profits, but sometimes even deep discounts aren’t enough.
NEW YORK (AP) — A dollar for a 40-ounce bottle of ketchup? Yawn. Four bucks for a 12-pack of Coke? No sale.
Even deep discounts on everyday items don’t seem to be enough to get Walmart shoppers to bite these days, and other chains are worried Americans won’t be in the mood to spend in the months ahead, which are critical for those companies.
On Tuesday, quarterly financial results from retailers including Home Depot and Abercrombie & Fitch showed that profits are rising because retailers are cutting costs and keeping their inventories lean.
But with the economy slowing once again and consumer confidence falling, they expect less out of the rest of the year, and they already have to push harder to get shoppers to buy.
Walmart hopes basics like underwear and socks will bring in financially strapped shoppers. It’s also stocking smaller packages for the days leading up to when customers receive their government assistance checks, and need to stretch their last few dollars.
Teen clothes store Abercrombie & Fitch, which slashed prices on some of its jeans by 40 percent to get people to buy for the back-to-school season, is expected to keep cutting prices through the fall.
So instead of customers paying $120 for a pair of tattered jeans, they pay $72. And who are these paying customers? The teens who work there, and their peers from school.
It is unimaginable that this business plan was even viable at one time. It wouldn’t bother me if this outfit went out of business.
These guys and whoever does Hollister surf wear.
Even here in California where people KNOW Hollister is a farming town hours away from the ocean that reeks of garlic and cow crap, they still wear those clothes. You might as well be wearing St. Moritz surf wear.
Having lived in CA, and knowing about Hollister - I had to ask “WTF?” when I starting seeing all this clothing. First time I saw it I though it was just someone from there - I figured no way that could actually be a branding thing. Then I started seeing it all over.
Maybe next we’ll start seeing a “North Platte” or “Des Moines” line of clothing or something?
First time I saw it (Hollister brand) I though it was just someone from there - I figured no way that could actually be a branding thing. Then I started seeing it all over.
LOL. Me too. True story. I was traveling in the Midwest when I lived in California. I see this girl at a BBQ with a Hollister shirt. I go up to her and tell her that I was just in Hollister that last week for a Bluegrass Fest and asked her if she was from there.
She had no idea what I was talking about.
I guess I didn’t either.
Hollister is 30 miles from the ocean and 45 minutes in regular traffic according to google.
that’s not very far.
But mentally Hollister is on a whole ‘nother planet.
Extended FDIC Coverage Now Permanent
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law on July 21, permanently raised the maximum FDIC coverage amount to $250,000. Previously, this amount was set to return to $100,000 on Jan. 1, 2014. Also, this increase is now retroactive to Jan. 1, 2008.
Also, this increase is now retroactive to Jan. 1, 2008.
Nice. So therefore one could probably count on a $1M or so guarantee now actually - if the market crashes again and banks fail I’m sure they’ll up it again and make it retroactive. At least that’s the message they’re sending.
So, I don’t have to go looking for another bank again?
Hey guys it was the raising from 100K to 250K which was a key factor in the S&L debacle….
Bankers had a whole lot more insured deposits they could play with
There was a great discussion yesterday on FHA, government guarantees, etc. yesterday. One statement that was made was a misconception - that the FHA doesn’t do jumbo loans. That’s not necessarily true, especially going forward.
E.g. see this article from the other day, presenting luxury Manhattan condos in the $820k - $3M range, and FHA backed.
“…that the FHA doesn’t do jumbo loans.”
To test the veracity of that statement, consider what the conforming loan limit is ($729,750 last time I checked) and ask what percent of all American households are qualified to buy a home selling for that much (my guess: less than 1%).
If it walks like a Jumbo, trumpets like a Jumbo, and stampedes like a Jumbo, it’s a Jumbo!
I thought the jumbo limit was around $300K for “normal” places and only got to $729K for “abnormally expensive” places like CA and NYC.
Qualifying for a $729K jumbo….80% of $729 = $583K, a third of that is $194K. So how many people have a household income of $194K or more? Apparently about 2.7% according to the statistics on wikipedia.
‘…only got to $729K for “abnormally expensive” places like CA and NYC.’
Right. This is the means by which folks who live on Main Street in Flyover Country get to enjoy the opportunity to help those who live in unaffordable coastal state housing ‘afford’ their mortgages.
“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.”
Love the jargon commission junkies rely on to alleviate guilt.
“We need as many sales tools as we can have these days, and it’s one more tool.”
There are many ways to interpret that “one more tool” phrase.
Somehow “tool” has been used to describe a guy’s manhood but also to describe an idiot. Is there some connection between the two?
Uncle Sam, Venture Capitalist ~ The Wall Street Journal
Meet the battery company that Obama visited yesterday.
President Obama kicked off a five-state campaign swing yesterday with a stop at a “clean energy” plant in Menomonee Falls, Wisconsin. As it happens, Mr. Obama couldn’t have chosen a better company to demonstrate the risks that taxpayers are taking with their billions in green stimulus investment.
The White House press corps has been dragged to so many of these energy events that it has lost interest in looking at the companies it visits. But the case of ZBB Energy is worth a closer look. Mr. Obama praised it for “pointing the country toward a brighter economic future,” but we’ll let readers decide if they’d write the same checks if they were investing their own money.
ZBB has been around for more than a decade, developing batteries and equipment to store energy from wind turbines and solar cells. More efficient and long-lasting storage devices have long been the Holy Grail of renewable energy, since they would allow operators to store intermittent wind and solar energy for later use. A technological breakthrough would be a great achievement, but the problem is that the effort has proven to be both difficult and costly.
That hasn’t stopped the Obama Administration, which has been investing willy-nilly in the commercial battery industry. And so last January, when the Department of Energy announced $2.3 billion in “clean energy manufacturing tax credits,” ZBB was one of 183 recipients—collecting $14 million.
We wonder who in government looked at ZBB’s filings with the Securities and Exchange Commission. Since going public in June of 2007, ZBB has been hemorrhaging money. The firm lost $4.9 million in fiscal 2008 and $5.5 million in fiscal 2009. In its most recent filing, in May, it said it had lost $6.9 million for the first nine months of its current fiscal year. It explained it had a “cumulative deficit” of $44.1 million and informed shareholders that it “anticipates incurring continuing losses.” It acknowledged that its ability to continue as a “going concern” was predicated on its ability to drum up additional funds.
http://online.wsj.com/article/SB10001424052748704868604575433882374313148.html?mod=WSJ_Opinion_AboveLEFTTop
Hey - it’s like the housing market. Just give it more money and all will be well, right?
This crap just gets more ridiculous by the day.
And, Spain recently cut its solar subsidies by almost half.
Name just one thing that this administration has done right. IMO if they go one way, we would be better off doing the opposite.
They’re pulling soldiers out of Iraq.
Anything else I say will be lost on you.
Which provides an answer to a prayer I say whenever I’m at the Slim family dinner table. Mom says, “Be with our troops,” and my response is, “Bring ‘em home!”
Aren’t the 50,000 or so “non combat advisors” staying there indefinitely?
Sad to keep 50,000 still at risk as “advisors” (a.k.a targets) or worse send them to Afghanistan. Why the hell are we in Afghanistan. Can any rational contributor on this blog tell me??
Name just one thing that this administration has done right.
Called BS on the Supreme Court in public. IMHO
Ding Dong the witch is dead?
News Flash: Fannie, Freddie are Kaput
http://tinyurl.com/26y8ymu
“the new system will almost certainly include (explicit) guarantees on certain types of residential mortgage-backed securities to help middle-class borrowers”
How much does Pimco stand to gain, and do private mortgage insurers stand to lose, if that taxpayer-funded subsidy program goes through?
“How much… do private mortgage insurers stand to lose, if that taxpayer-funded subsidy program goes through?”
I can’t believe any of them are still solvent, without taxpayer assistance, of course.
Fannie, Freddie are Kaput
My entire life savings says it’s in name only - the concept will live on, with mostly the same people involved even.
The fable of the scorpion and the toad comes to mind.
Toad = U.S. economy
Scorpion = U.S. government involvement in housing
Brings to mind the “all-out collapse” of Megabank, Inc in Fall 2008, closely followed by record profits and bonuses in 2009…
Freddie and Fannie and replacing it with a different beast would at least let them attempt to fix the worst abuses of lending standards.
But they won’t. It’ll be business as usual. GAME ON!
A beast by any other name would smell as rank.
Mortgage reform is a sham, just like financial reform was a sham. The key objective seems to be legitimizing a large flow of tax dollars to line the pockets of Friends of The One.
Fannie, Freddie Reform: The Government Needs To Continue Propping Up The Mortgage Market, Say Banking Execs
First Posted: 08-17-10 02:08 PM | Updated: 08-17-10 02:36 PM
WASHINGTON (AP, ALAN ZIBEL) — The Obama administration invited banking executives Tuesday to offer advice on changing the government’s role in the mortgage market. Their response: stay big.
While the executives disagreed on the exact level of support needed, the group overwhelmingly advocated the government should maintain a large role propping up the nearly $11 trillion market.
…
Auto Workers Decline Vote On Wage-Cutting Contract
Posted on Monday, August 16, 2010 2:28:58 PM by Abathar
IEDC Leader Angered By Decision
INDIANAPOLIS — The United Auto Workers union is not voting Monday, as originally planned, on a new wage-cutting contract at the General Motors stamping plant in Indianapolis that is facing sale.
JD Norman Industries, of suburban Chicago, asked for pay cuts as a condition of buying the plant. The proposed contract calls for cutting base pay from $29 an hour to $15.50.
Without a sale, GM has said it will close the plant next year.
Mitch Roob, CEO of the Indiana Economic Development Corp., said he’s angry that the local union essentially brushed off a deal that its national representation helped broker.
“This is a very disappointing outcome,” Roob said. “The national union … JD Norman, General Motors worked very hard to create a good proposal for the employees to take a look at.”
http://www.freerepublic.com/focus/f-news/2571621/posts - 49k
Why would the union guys agree to a pay cut when they already proved the Government will cave to their whims on command when tshtf? The unions are like Goldman, they own all of us.
A comment was made yesterday to the effect of “how could anyone afford to live on $15.50 an hour?” This to me shows just how far we are gone, in terms of our lifestyle expectations.
$15.50 an hour (That’d be over $30k per year) in Indiana can easily get you a fairly comfortable lifestyle. It’s not poverty, at least by 99.9% of the standards of the world.
We’re not talking California or NY here - we’re talking Indiana.
Looking at real estate - $138k gets you a decent 3,000 square foot 4-bedroom home on 1/3 acre. A mortgage plus property taxes on that house would be under $900 per month ($10k per year). And that’s not a poor house by any stretch. Even $80-100k will get a decent house.
Nothing could be finer than to be in 99er
In the morning
Nothing could be greater than to be a section 8er
In the morning
Where the government paychecks travel to my door
Shopping with my food stamps at the grocery store
Oh Nothing could be finer than to be in 99er
In the morning!
That’s probably sums it up as well as anything, Jeff. I’d guess there are a lot of people in this country who wouldn’t take an almost a 50% cut in pay without first getting their 99 weeks of unemployment (after which, $15.50/hr. will look pretty good).
I don’t suppose upper management will also be taking an almost 50% paycut too? Didn’t think so.
When all is said and done, would you want the job of managing and motivating these workers, simmering with anger after taking a cut like that? Poison environment for years to come. From that standpoint, it might have been better if GM had let everyone go, sold the plant, and then JD Norman could hire from scratch at their target rate.
In a obscure little town in IN, yes. But not in suburbs of Chicago and Indianapolis.
Yes, in the suburbs of Indianapolis. I took that info from an actual listing there. The plant/union in question is there, not in Chicago.
Indiana is a very cheap place to live - including in Indianapolis.
True, but wages here tend toward the low end because of our COL. That said, my college friends routinely estimate that my house costs approximately 3 or 4 times what I actually paid.
Yeah, houses are cheaper, but….
Medical care is just as expensive
Food is just as expensive
Consumer goods are just as expensive
Energy is just as expensive
And they certainly can’t afford the cars the parts they make go into.
Who is supposed to buy all this stuff if $15/hr is a “high end wage”? I think that in a few years we’ll be remembering times (like now) when 10-11 million cars were sold per year as “the good years”
Medical care is just as expensive
Food is just as expensive
Consumer goods are just as expensive
Energy is just as expensive
I guarantee you they’re not, in most cases. Are you familiar with “overhead”?
I’ve lived in lots of places - expensive and cheap. Most things are very tied together. E.g. food is a lot more expensive in CA, as is gas, etc. Some things are more universal, like autos and such.
I’d guess that its close enough for all practical purposes, definiteley not enough to compensate for a 50% loss of income.
The 50% loss of income is another point. I was just addressing the “no one can expect to live on $15 an hour” point.
Regarding the 50% - better a 50% loss of income than a 100% loss, wouldn’t you say? Or have you not seen the millions and millions of jobs being sent overseas?
YUP Colorado:
Even my little DJ business would be a lot harder to start from scratch if i was getting Indiana wages instead of double or triple that in NYC.
Maybe it’s the principle of the thing.
The history of these deals is for the employees to do give-back after give back, repeatedly cutting their pay and benefits, and the end result is that they always close the plant and move ops to China or Mexico anyway.
I’m betting that all the kids that could theoretically live on $15 hour were laid off years ago.
I recently had a conversation with a semi-retired attorney. Being in the Upper Midwest, he took more than a passing interest in the foibles of the auto industry.
His practice focused on small businesses, and I got more than a faint impression that he thought his clientele was a lot smarter than the people running the auto companies.
What really bopped me over the head was what he said about one auto company’s request for a give-back. The workers, thinking that the give-back would save their jobs, readily complied.
Shortly thereafter, the big boys of that company voted a substantial pay increase for themselves.
I remember that. I thought it was really stupid for management to do it. Even if they thought the white collar guys deserved it the timing was atrocious and set them up for a bitter battle the next time.
I wonder if there will be a corresponding cut in the prices of their products? Who in their right mind would accept a nearly 50% pay cut to do the same job?
I think they should shut the plant down today after that move.
Deere 3Q profit soars 47 pct as US, Canadian farmers invest in large equipment; Europe lags.
Deere & Co. said Wednesday its third-quarter profit grew 47 percent because American and Canadian farmers bought enough of the company’s large equipment to offset a sharp downturn in Europe, but Deere kept its forecast for the year conservative.
The company reported $617 million net income, or $1.44 per share, in the quarter that ended July 31. That’s up from $420 million, or 99 cents per share, a year ago.
Deere says global revenue spiked 16 percent to $6.84 billion.
Agricultural equipment sales in the U.S. and Canadian markets increased 19 percent in the quarter. Sales in other markets rose 16 percent, but that figure masks the European weakness.
Mortgage applications rise 13 pct. on low rates
Refinancing hits highest level since May 2009 as consumers seize on lowest rates in decades.
WASHINGTON (AP) — Mortgage applications rose 13 percent last week as consumers refinanced at the lowest rates in decades.
The increase was driven by a 17 percent surge in applications to refinance home loans, the Mortgage Bankers Association said Wednesday. Those taken out to purchase homes fell by more than 3 percent. The numbers are adjusted for seasonal factors.
Home refinancing hit the highest level since May 2009, but was still lower than the last big boom during the first three months of that year.
Applications to refinance loans made up more than 81 percent of all home loan activity, the highest share since January 2009. Low mortgage rates have failed to spark home sales, which remain hobbled by the weak economy and tight credit standards.
Rates have fallen since spring as investors sought the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields.
The average rate for a 30-year fixed loan rose slightly to 4.6 percent from 4.57 percent a week earlier. The Mortgage Bankers Association’s survey covers more than 50 percent of all applications nationwide.
What’s missing is any mention of the costs of the refi. I’ve been told that they can run into the thousands of dollars.
Yes. Most are around $3k, some are more. Depends on a number of factors, including state and local fees/taxes, as well as the nature of the loan (some are “no-cost” refi, which is to say they just transfer the actual refi costs into a higher principle).
I can think of a lot better things to spend $3k on, TYVM.
Depends on the situation. I refi’ed last year actually, after rates went down to 5%. I did the math, and the crossover point was about 5 years out. I figured I would most likely be in the house longer than 5 years, so pulled the trigger.
Did mine last month. 15yr 4.375%. Cost to close 2400 and they paid me a $3800 incentive. Net gain 1400 applied to principal.
Now if I can just do that 100 more times.
The other day rates were at 4.44%. Unbelievable.
I made the comment last year that I thought there was a decent chance the government would indeed actually re-inflate the housing bubble to a great extent - they have to, or else will most likely just die. Well - they’re trying their darndest. I’m actually quite shocked at how successful they’ve been so far. The struggle continues.
I think they’re not hoping to actually reinflate it, but rather to throw enough air in to keep it sinking slowly until wage based inflation catches up.
Sadly, wages are going down, making it a futile struggle.
“I’m actually quite shocked at how successful they’ve been so far.”
New home mortgages FELL by 3%. That’s not exactly “success”. At best, they’re cushioning the landing, as sfbubblebuyer pointed out. Low rate refis are the “thank you for not strategically defaulting yet” boobie prizes.
Low rate refis are the “thank you for not strategically defaulting yet” boobie prizes.
And the key word in that sentence is…
…yet.
Yup, exactly. But time may very well be running short. Amazing that some think wages will rise to fill the gap.
Talking about success at keeping prices propped up, not in new home sales. The banks don’t care as much about new home sales right now - they’re more worried right now about stemming the bleeding of losses. Being that the root of the losses is foreclosures due to price drops, and prices are up now for the past year - yeah I think they’ve been pretty successful.
In a real unobstructed free market home starts would have bottomed at about 200k, vs. the 500k where they did bottom (because interest rates would be about 10% right now, at least).
The same industry that reportedly encouraged lying on mortgage applications just a few years back is now trying to root out and punish compliant liars.
* REAL ESTATE
* AUGUST 18, 2010
Banks Face Fight Over Mortgage-Loan Buybacks
Fannie and Freddie Work to Push Bad Loans to Originators; a Search for Applicants’ Lies
By NICK TIMIRAOS And APARAJITA SAHA-BUBNA
While mortgage delinquencies are easing, banks are facing a new round of losses from loans made just before the financial crisis, and the fight to keep them off their balance sheets is intensifying.
Leading the charge to make originators repurchase their loans are Fannie Mae and Freddie Mac, the two government-owned finance agencies that guaranteed the mortgages. The firms are sorting through delinquent loans for signs of any violations of the representations and warranties, known as “reps and warranties.” In essence, they are looking for lies made by borrowers or lenders in loan applications.
Freddie last week said it would begin taking tougher action against banks that drag their feet on buybacks as it renegotiates its contracts to renew loan-sales agreements from those banks. Freddie said it had received $2.7 billion from lenders on repurchases during the first half of the year, up from $1.7 billion in the year-earlier period. The number of repurchase requests that haven’t yet been satisfied jumped to $5.6 billion at the end of June, up from $3.8 billion six months earlier.
While the company isn’t likely to cut off its partners, it could use those renegotiations to force banks to settle up on repurchases.
Banks are pushing back. “It’s a loan-by-loan fight,” Bank of America Corp. Chief Executive Brian Moynihan told investors in March. “This will be a war that will go on for a while.” On Aug. 6, Bank of America said it faces $11.1 billion in unresolved repurchase demands, up 46% in just six months.
The bounced loans are mounting fast as investors try to deflect losses back to their sources and put an end to the lingering aftereffects of the financial meltdown. When banks receive repurchase requests, they often try to force other banks that originated the loans to repurchase them.
Given the hundreds of billions in nonperforming mortgages at stake, “these battles could just go on for years,” says Christopher Whalen, managing director for Institutional Risk Analytics. “We have at least two more years of misery.”
…
This is good for the country. This reckoning will create the proper incentive effect going forward.
Ah, yes. The Reckoning. I picture a real-life Hieronymus Bosch painting featuring Barney Frank, Franklin Raines, David Learer, Chris Dodd and thousands of mortgage tokers and home-moaning flippers. It’s called “Garden of Flippers’ Delight”.
The same industry that reportedly encouraged lying on mortgage applications just a few years back is now trying to root out and punish compliant liars.
Well if they kept good records of those they egged on to lie, they should have no problem rooting them out now, and making the case against them.
“You’re mad because they lied to you? They lie to everyone! They lie to the fish!”
The movie…Falling Down (1993)
I like how the banks are at war against doing what they are contractually obligated to do. Yet they cry about delinquent loan-owners and strategic defaults.
Cracking down on mortgage fraud:
http://www.signonsandiego.com/news/2010/aug/17/cracking-down-on-mortgage-fraud/
Nothing too surprising here, just filling in the details:
“But federal prosecutors say the business was the center of a mortgage fraud scheme that churned out scores of bogus W-2 forms, fake pay stubs and false tax records for a network of almost two dozen real estate agents and loan officers. The documents helped secure about $55 million in fraudulent loans from banks and mortgage companies between 2002 and 2008 to purchase homes in San Diego County and the San Francisco Bay Area, court records show.”
“This kind of fraud was rampant during the real estate boom days of a few years ago and peaked in San Diego County in 2006. But new government regulations and greater vigilance by burned lenders are helping to ease mortgage fraud schemes.”
The lenders wanted fraud to happen. They needed it to happen to make all of the loans they made. Fraud was very profitable for them.
“Several of the larger cases filed by the U.S. Attorney’s Office in San Diego cover that time period. They are being filed now, in part, because it takes time for investigators to unravel the schemes, said Curt Novy, president of the San Diego-based Corporate Mortgage Advisors. Novy works with federal and state authorities to investigate fraud and testifies as an expert in criminal and civil cases. “These cases can take a year or two to investigate and unwind,” he said. “You’re seeing cases that happened between 2004 and 2006 or 2007 just starting to come out with indictments now.”
“Assistant U.S. Attorney Robert Ciaffa, chief of the major fraud section of the U.S. Attorney’s Office in San Diego, declined to comment on pending cases. But in general, he said, the loose oversight by banks and regulators fed the frenzy.”
Loose, as in none.
The lenders wanted fraud to happen. They needed it to happen to make all of the loans they made. Fraud was very profitable for them.
Ding-ding-ding! We have a winner!
“The national average for mortgage fraud in 2010 is 0.55 percent, according to CoreLogic. That means for every $100 that is loaned, 55 cents is being fraudulently obtained.”
How about Medicare fraud? The government could easily earmark $1-billion/yr for fraud investigations, but the politicians don’t care to go there.
Home sales slump in July
Southern California sees a 21.4% drop in home sales from 2009 but tax credits skew the figures.
A “For Sale” sign is seen in front of a house in Hemet earlier this year. Southern California home sales were down 20.6% in July compared with June. (Gina Ferazzi / Los Angeles Times / March 17, 2010)
(’Fundamental change’ for Fannie, Freddie, Geithner says)
By Roger Vincent, Los Angeles Times
August 18, 2010
Southland home sales fell dramatically in July as federal tax credits for buyers expired, yet the median home price declined only slightly from June.
Observers say buyers’ rush to take advantage of the tax benefits pushed forward sales that would otherwise have taken place later in the summer, creating a statistical drop that didn’t signify sudden underlying market weakness. When averaged, home sales have been fairly flat in recent months, said Gerd-Ulf Krueger, principal economist at HousingEcon dot com.
“The lack of progress on the economic front is just having a very problematic impact on the psychological situation of a lot of American consumers,” Krueger said. “They are very cranky.”
…
Greek Bonds Slump As Austerity Backfires, Country Enters “Death Spiral”, And The Violent End Game Approaches:
Those patiently following the Greek Bond-Bund spread to its inevitable conclusion have been fully aware that the plan that Europe is betting its entire future on, is patently flawed: namely that austerity, by its definition does not, and will not work. In fact, instead of bringing stability, austerity will slowly but surely eat away at the economy of whatever country it is instituted in - in some cases slowly, in others, like Greece, very rapidly. Indeed, the Greek spread has now risen to levels last seen during the early May near-revolution in Athens, at well over 800 bps. And for the specific consequences of austerity, Germany’s Spiegel has done a terrific summary of what it defines as a “death spiral” for the Mediterranean country: “Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back. A mixture of fear, hopelessness and anger is brewing in Greek society.” Spiegel quotes a a typical Greek: “”If you take away my family’s bread, I’ll take you down — the government needs to know that. And don’t call us anarchists if that happens! We’re heads of our families and we’re desperate.” All those who think violent strikes in the PIIGS are a thing of the past, we have news for you. The (pseudo) vacation season is over, and millions of workers are coming back. They may not have money, but they have lots of free time, lots of unemployment, and even more pent up anger. Things are about to get very heated once again, first in Greece, and soon after, everywhere else.
From Zero Hedge
All those who think violent strikes in the PIIGS are a thing of the past, we have news for you. The (pseudo) vacation season is over, and millions of workers are coming back. They may not have money, but they have lots of free time, lots of unemployment, and even more pent up anger. Things are about to get very heated once again, first in Greece, and soon after, everywhere else.
Not to mention that, with the exception of Ireland, the weather is pretty hot in PIIGS-land. And you know what that does to tempers.
Soon to come to America…
Except we have guns (except in certain progressive cities that will, of course, burn first).
Gee thanks, if that happens I’m coming to stay at your house.
(but of course I agree)
”If you take away my family’s bread, I’ll take you down — the government needs to know that. And don’t call us anarchists if that happens! Some Greek dude
I’m not big on welfare and food-stamps however, when our job base is gutted and our economy is hollowed out to make those at the top richer, I do understand why we have them.
The government does too.
Agree with ya there, Rio.
And, in case anyone hasn’t been paying close attention to the history of the Great Depression years, permit me to bring up this point: During the Depression, there was massive social unrest in this country. Massive.
As in, near-riots at the re-election campaign stops of Herbert Hoover in 1932, frequent (and angry) marches on Washington, and widespread (tacit) support for celebrity bank robbers like Bonnie and Clyde, Pretty Boy Floyd, and the Dillinger Gang.
Great find by wmbz in yesterday’s bits.
Research carried out at Newcastle University has found that coriander and turmeric – spices traditionally used to flavor curries – can reduce by up to 40 per cent the amount of methane that is produced by bacteria in a sheep’s stomach and then emitted into the atmosphere when the animal burps.
“Working rather like an anti-biotic, the spices were found to kill the methane-producing “bad” bacteria in the animal’s gut while allowing the “good” bacteria to flourish. The findings are part of an ongoing study led by Dr Abdul Shakoor Chaudhry at Newcastle University.
There are around 30m sheep in the UK, each producing around 20 litres of methane a day, emitted by burping. Methane (CH4) is more than 20 times as powerful in terms of causing global warming as the main greenhouse gas, carbon dioxide (CO2). As well as the environmental implications, the sheep itself also loses an estimated 12 per cent of its food energy to methane production, resulting in a lower milk and meat yield.”
So my new weight loss program includes producing more methane. Every little bit helps.
12% loss of food energy means 13.6% more cookies! Hallelujah!
Question for anyone who thinks they know anything about lending:
A friend just told me about getting turned down on a refi application for an $80K loan, which represents the balance of what he owes on a Coastal Cali home that would probably sell for $400K+. His credit is fine, but he is self-employed, which I guess disqualifies him (never mind that five years ago, anyone who could breath could get a loan by just showing up at the lender’s door). But at a LTV ratio of 20%, what could a lender possibly stand to lose on this?
This sort of story really p’s me off, given that the FHA/FNM/FRE trio are still out there making loans to unqualified borrowers and covering their subprime loans with federal guarantees that put the taxpayer on the hook in the event of default.
But at a LTV ratio of 20%, what could a lender possibly stand to lose on this?”
yea thats stupid if he quits paying they can take his house
Similiar experience. Was recently turned down for a $80K loan by a mortgage broker. Broker told me there wasn’t enough money it for them. Wanted me to refi for at least 130K. His suggestion for a 80K loan was to visit a small bank / credit union.
Same here. I took the larger loan, made sure there was no prepayment clause, and sent the unneeded balance back with the first payment. It was quite satisfying. Oh, and there was a flat fee for the re-fi of around $150, if I recall. Knocked off about 1-1/2%, too. This was in about 2002.
Someone asked in a post yesterday about ‘who pays for’ bailouts. One example is someone like my friend; he is far more credit-worthy than your typical FNM/FRE/FHA-financed borrower, yet thanks to our federal housing policy, the private lending sector is in virtual shutdown mode; hence there are no monies available for him to borrow in a deal that would clearly work to his and a private lender’s mutual advantage.
America’s private free-enterprise economy is busted.
My guess would be his self employement income history was either incomplete or had gaps or his other debts where too high.
I’d recommend trying another bank.
Seems like an odd case indeed.
Just a guess - maybe the bank’s cost structure is such that they actually take a loss on the closing costs of their loans, and expect to make it up in interest spread over the life of the loan. However the loan has to be big enough to warrant this - if it’s too small the bank would lose money on it. Was the loan perhaps a “no closing costs” loan? Or perhaps a “low cost” loan?
If not - try another bank. Many large institutions (like utilities) try to fit all their customers into a given model, to take advantage of economies of scale. If a customer comes along that doesn’t fit that model, even though it may be a customer that would otherwise be profitable, the customer gets refused.
“…they actually take a loss on the closing costs of their loans, and expect to make it up in interest spread over the life of the loan.”
His current rate is 8%, and people are refinancing in the 4.5% ratio. But maybe closing costs are too high on an $80K loan to make it work…
Is the refi with the same bank that he has the loan with? If so, it may just be a case of them not wanting to lose that great 8% income stream.
(In which case another bank would probably be more than willing to steal his business).
Over how many years was the $80K to be paid back? If it was less than 15, I can see why the bank would say no. Not enough profit potential, with a lot of risk incurred.
Oh and the self-employment = no loan myth is just that. High income that is verifiable is high income. Key is verifiable and consistent, ie can’t make $20K one year $200K the next and average it out to $110K. It has to be $110K every year and that is after expenses. Problem with a lot of SEs is they think they make $100K but only make $60K after expenses.
Wanna know why he was not approved?
The fees (to the loan officer) on an $80,000 refi are probably less than $1,000. Who would want to go through all the underwriting hassle for that when there are fees in the thousands of dollars on a much bigger refi deal?
He didn’t get denied because he is self-employed, they used that as an excuse. He got denied because it wasn’t “profitable” enough.
Man, the beef in Brazil is very lean. I mean there’s almost no marbling at all. It tastes good but I miss the marbling. (But maybe my body doesn’t) They butcher it different too. There are no T-bones or Porterhouse however I just found what looks like a rib steak bone in cut so I’m happy. They have a lot of cake here but no pie. Hey, I should make a pie. It’s been very cold at night. Mid 50’s. Windy and cool today.
Oh yea housing:
A semi-wealthy Rio dude told me last week that he could no longer afford (because of higher prices) a condo in Rio in the neighborhoods he was accustomed to.
Foxconn to Hire 400,000 China Workers Within a Year
Aug. 18 (Bloomberg)
The number of new hires at Foxconn may be more than three times the combined workforces at Apple and Microsoft Corp., the two largest U.S. technology companies.
Foxconn Technology Group, maker of Apple Inc. iPhones and Sony Corp. games consoles, held morale-boosting rallies across China today, three months after a spate of suicides at the company. More than 100,000 workers signed a pledge entitled “Treasure your life, care for your family,” Foxconn said in a statement.
Foxconn Technology Group plans to hire as many as 400,000 workers in China in the coming year and will build factories closer to employees’ homes after a spate of suicides at the maker of Apple Inc. iPhones and Dell Inc. computers.
The Taiwanese company aims to boost its China workforce to 1.2 million to 1.3 million people after revenue jumped 50 percent in the first half, Louis Woo, special assistant to the chief executive officer, said in an interview today. Foxconn will expand to inland provinces Henan and Sichuan because that’s “what the new generation of workers wants,” he said.
Foxconn Technology Group, maker of Apple Inc. iPhones and Sony Corp. games consoles, held morale-boosting rallies across China today, three months after a spate of suicides at the company. More than 100,000 workers signed a pledge entitled “Treasure your life, care for your family,” Foxconn said in a statement.
If those rallies were anything like the ones that we American employees have been forced to sit through, those folks were probably saying the Chinese equivalent of BS under their breath.
Business
U.S. needs to reset mortgage mess
By Antony Currie, Reuters August 17, 2010
Washington faces a mortgage market conundrum. A conference today hosted by the U.S. Treasury is supposed, finally, to start addressing what to do with Fannie Mae and Freddie Mac. But the bunch of fixes proposed by regulators and lawmakers in attempts to make private home loans safer is causing other problems.
Assuming the eventual goal is to sharply reduce the role of government agencies in mortgage finance, then there’s a matching need to increase private-sector funding for mortgages. The most obvious difficulty is crowding out by the subsidized agencies. But there are other structural barriers to private lending, too.
The most glaring case of crowding out is in so-called jumbo mortgages, where borrowers may meet all other criteria to conform with Fannie and Freddie standards except that the loan they want is too large. Until the crisis, the maximum loan the GSEs could guarantee was US$417,000 for single-family properties. Now it’s US$730,000.
Neither banks nor asset-backed investors — both of which increasingly want to hold loans of this kind — can compete with the lower funding costs the government agencies enjoy.
Another example is the subprime market. The Federal Housing Administration has made it almost impossible for banks to consider jumping back in, however cautiously. The agency made US$451-billion in loans last year, accounting for a quarter of all new U.S. mortgages. Not only are its funding costs lower than the private sector’s, it is also using methods discredited by the housing crunch, such as taking only minuscule down payments from borrowers. In that regard, its decision last week to increase the minimum equity requirement to 10% is encouraging.
If the government loosened its grip on these parts of the market, banks should be able to pick up the slack, especially in jumbos. Bank lending alone, however, would struggle to compensate for any broader moves to shrink Fannie, Freddie and the FHA.
That’s because even with the inevitable somewhat higher mortgage interest rates, there’s simply not enough room on U.S. banks’ books. Over the past decade, lenders’ balance sheets have rarely accounted for more than 15% of U.S. mortgage financing, according to a report last year from the Federal Reserve Bank of San Francisco.
Read more: http://www.montrealgazette.com/business/fp/needs+reset+mortgage+mess/3406879/story.html#ixzz0wzXzmr7U
No Consensus on Future of Housing Finance
Long after the housing collapse, there’s still no clear road forward.
Pablo Martinez Monsivais / AP
Treasury Secretary Timothy Geithner addresses the Conference on the Future of Housing Finance, Aug. 17, 2010
More than two years after the collapse of the housing market, are we any wiser? If we measure what we learned from the real estate bust by the level of agreement at yesterday’s Treasury Department Conference on the Future of Housing Finance, we haven’t learned much. “Some suggest that, as a government, we have provided too much support for housing, while others suggest we provided too little,” said Treasury Secretary Tim Geithner. “It’s safe to say there is not yet any clear consensus.”
Fannie Mae, a private entity supported by the government, was created during the Depression to help Americans get affordable mortgages. Successive administrations of both parties backed a national goal of making as many Americans as possible become homeowners. But after Fannie Mae and Freddie Mac faced collapse in 2008, leaving taxpayers holding the bag, many said that maybe more Americans should look at renting.
The fault lines in yesterday’s discussion centered on how much involvement the government should have in the housing finance market. The implicit promise of support from the federal government to Fannie and Freddie may have made banks more reckless in writing mortgages. On the other hand, more support for the government-sponsored entities could be the best way to pull America out of the current housing slump.
The government currently owns 90 percent of mortgages through Freddie Mac and Fannie Mae, which were bailed out by taxpayers to the tune of $148 billion. Is that too much involvement or not enough?
The most radical perspective of the day came from Bill Gross, founder of the largest U.S. bond fund, Pimco. For him, the answer to what role the government should have in housing finance is simple: complete nationalization. He said that would mean all American mortgage financing done under one government roof. “The only way to bring housing back and to create liquid … mortgage finance going forward would be to provide a government guarantee,” Gross said yesterday at the summit.
Gross argues that a private-sector approach would dramatically increase the price of home loans, slowing the economy to a “snail’s pace.” Even more striking, Gross says the government should refinance most mortgages in the country, bringing interest down to 4 percent.
Secretary of Housing and Urban Development Shaun Donovan argued for going in the other direction. “The government’s footprint in the housing market needs to be smaller than it is today,” he said. Donovan emphasized a government role in helping provide cheaper options for rentals.
…
Secretary of Housing and Urban Development Shaun Donovan argued for going in the other direction. “The government’s footprint in the housing market needs to be smaller than it is today,” he said. Donovan emphasized a government role in helping provide cheaper options for rentals.
Oh, Shaun, stop that truth-telling stuff, wouldja?
“More than two years after the collapse of the housing market”
Um, am I the only one that thinks the “collapse” is still occurring?
“Long after the onset of the housing collapse, there’s still no clear road forward.”
Fixed it 4 yer…
“Gross argues that a private-sector approach would dramatically increase the price of home loans, slowing the economy to a “snail’s pace.” “
Some of the 2005 Option-ARM liar loans had fees totaling more than $50k for a 3/2 rancher SFH. Could closing costs really get much higher, Herr Gross?
Study: A quarter of renters won’t ever buy
San Francisco Business Times
More than a quarter of people who rent a place to live do not plan to buy a home, ever, according to a survey by real estate information business Trulia Inc.
San Francisco-based Trulia found that 27 percent of renters don’t ever plan to buy, and that two-thirds of those who do plan to buy will wait more than two years. Such postponed buying could delay the U.S. housing market’s recovery, Trulia said.
Pete Flint, Trulia’s CEO, said, “Renters converting into buyers are crucial to turning around the housing slump.”
Last week, Trulia said there was “no end in sight to price reductions” in the national housing market.
When asked what could influence them to buy a home in the next year, people surveyed listed several factors, of which the top three were:
* Being able to save up a down payment (47 percent)
* Getting a new job (28 percent)
* Low or lower interest rates (27 percent)
Trulia, which runs a website for people looking to buy a home, also found that only 9 percent of those surveyed said a big home (over 3,200 square feet) was ideal. More than half prefer a home that’s from about 1,400 square feet to 2,600 square feet. Trulia sees this preference as a “veering away” by Americans from big trophy homes.
“Renters converting into buyers are crucial to turning around the housing slump.”
Smart renters will watch out for their wallets, as the Fed and other federal financial entities have proppped up home prices when they should be approaching affordability.
City of Phoenix moving closer to 4-day work week
Associated Press ~ August 18, 2010
A three-day weekend and a four-day workweek may become the norm for City of Phoenix workers, making it the largest city in the nation with a reduced work day week.
The modified mandatory schedule, however, would not operate citywide, said Cathy Gleason, Phoenix’s budget and research director.
“Clearly, we wouldn’t apply it to libraries, community centers and senior centers,” Gleason said. “You can’t say we’re going to shut it all down.”
Phoenix water plant workers, aviation employees and public-safety staff would continue working normal weekly hours.
Faced with enormous budget deficits, cities are saving money by closing offices one day a week.
And with widespread layoffs and pay cuts casting a gloom over offices, giving workers a three-day weekend boosts both employee morale and productivity, supporters say.
Clearance Sale: Barnes & Noble Didn’t Evolve Enough
How did Barnes & Noble fall so far so fast? ~ WSJ
The giant bookstore chain, whose superstores once struck fear into the hearts of independent booksellers everywhere, put itself up for sale this month, rendering it the corporate equivalent of the remaindered books it sells at a discount.
The company said it made the move because its shares are undervalued, but to me there was an air of desperation about it.
The simple explanation for Barnes & Noble’s decline is the Internet, which spawned Amazon.com e-readers and digital books. But that didn’t have to be the end for B&N, which had a dominant market position and should have out-Amazoned Amazon, leveraging its brand and innovating when it began marketing and selling books online.
I know exactly when B&N lost me as a customer. Some years ago, to compete with Amazon, B&N began offering free same-day delivery in Manhattan if you placed your order over the Internet by 11 a.m. I did so several times — and not once did the books arrive when promised. Everything I have ordered from Amazon has arrived on time or earlier. Then came Amazon’s game-changing Kindle, and instant delivery. Nothing I’ve read about B&N’s belated rival Nook has tempted me to try it.
Isn’t Borders also in trouble?
Barnes & Noble once could boast the brick and mortar store with the highest sales volume in the US: the store in book-devouring San Jose. Amazingly enough people in San Jose have the highest per capita book consumption in the US (due in part to the Silicon Valley effect).
But the tech effect was a loser in the long run. Amazon’s “partners” give me immediate access to small used bookstores all over the country - I never buy books new anymore. I recently purchased a long-out-of-print copy of the WPA writer’s project guide to the state of Texas as a present for my nephew’s wife’s birthday (they live in Dallas). I think I paid $6 shipped via Amazon partners.
I’ve become a fan of the WPA writer’s project state guides. Written around 1940, they present an idealized Norman Rockwell view of America and they are completely non-PC. They use jarring phrases like “drunken Indians” and “lazy Mexicans” - and this in a publication underwritten by the US government!
Another Threat to Economy: Boomers Cutting Back.
America’s baby boomers—those born between 1946 and 1964—face a problem that could weigh on the economy for years to come: The longer it takes for the economy to recover, the less money they’ll have to spend in retirement.
Policy makers have long worried that Americans aren’t saving enough for old age. And lately, current and prospective retirees have been hit on many fronts at once: They have less money, they earn less on what they have, their houses aren’t rising in value and the prospect of working longer to make up the shortfall has dimmed significantly in a lousy job market.
“We will have to learn to make do with a lot less in material things,” says Gary Snodgrass, a 63-year-old health-care consultant in Placerville, Calif. The financial crisis, he says, slashed his retirement savings 40% and the value of his house by about half.
“Policy makers have long worried that Americans aren’t saving enough for old age. And lately, current and prospective retirees have been hit on many fronts at once: They have less money, they earn less on what they have, their houses aren’t rising in value and the prospect of working longer to make up the shortfall has dimmed significantly in a lousy job market.”
Looks like the policy makers can’t get anything right.
Survey: Big employers expect 2011 health cost hike.
INDIANAPOLIS — Large employers expect their health care benefit costs to rise 8.9 percent next year, and more will ask their employees to make a bigger contribution, according to a survey from the National Business Group on Health.
The nonprofit, which works with big companies on health care costs, said Wednesday their members tell them they expect costs to rise more than the 7 percent increase they expected on average for this year.
A total of 63 percent of employers who responded said they planned to increase the percentage employees contribute to their premiums. That’s up from 57 percent last year.
More employers also say they plan to raise the annual maximum amount employees pay for health care costs.
A total of 61 percent intend to offer a consumer-directed health plan in 2011. Those typically pair insurance that carries a high annual deductible with an account fed either by an employer or by the employee through pretax contributions to help cover costs.
The National Business Group on Health said its survey was based on responses from 72 companies, each with more than 5,000 employees. These companies provide their own insurance and have a health insurer administer the coverage.
The continuing squeeze.
This contraction is causing some prices to rise. Some will call this price rise inflation. But inflation is caused by too much money chasing too few goods.
This price rise is caused by not enough money, not too much money.
Just for the record.
Whirlpool Layoffs Coming this Fall ~ August 18, 2010
Whirlpool has confirmed a round of layoffs is coming to its Fort Smith plant in October and November.
Jill Saletta, Director of External Communications at Whirlpool released the following statement this afternoon: “Plant management has confirmed that they anticipate some layoffs to take place in October and November. The October layoffs are due to the end of production of counter-depth refrigerators at the plant, which we announced to employees at the end of 2009. November layoffs are anticipated due to softening of demand, which is typical at this time of year.”
The jobs will be moving to one of the company’s existing plants in Mexico. Whirlpool has not said exactly how many employees will be cut from the Fort Smith plant.
Hecho in Mexico?
You mean like my ‘97 Pontiac Junkfire that I purchased new? And GM has J Mellencamp tell us we need to ‘buy ‘merican.’
telling us
Do you mean John Cougar Mellencamp?
“The jobs will be moving to one of the company’s existing plants in Mexico. Whirlpool has not said exactly how many employees will be cut from the Fort Smith plant.”
They might want to rethink that.
http://tinyurl.com/3xtcmfl
Entering a Death Spiral? ~ UK Times
Tensions Rise in Greece as Austerity Measures Backfire
The austerity measures that were supposed to fix Greece’s problems are dragging down the country’s economy. Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back.
The feast of the Assumption of Mary on Aug. 15 is the high point of summer in the Greek Orthodox world. Here in one of the country’s many churches, believers pray to the Virgin for mercy, with many of them falling to their knees.
The newspaper Ta Nea has recommended that the Greek government adopt the very same approach — the country’s leaders have to hope that Mary comes up with a miracle to save Greece from a serious crisis, the paper writes. Without divine intervention, the newspaper suggested, it will be a difficult autumn for the Mediterranean state.
This dire prognosis comes even despite Athens’ massive efforts to sort out the country’s finances. The government’s draconian austerity measures have managed to reduce the country’s budget deficit by an almost unbelievable 39.7 percent, after previous governments had squandered tax money and falsified statistics for years. The measures have reduced government spending by a total of 10 percent, 4.5 percent more than the EU and International Monetary Fund (IMF) had required.
The problem is that the austerity measures have in the meantime affected every aspect of the country’s economy. Purchasing power is dropping, consumption is taking a nosedive and the number of bankruptcies and unemployed are on the rise. The country’s gross domestic product shrank by 1.5 percent in the second quarter of this year. Tax revenue, desperately needed in order to consolidate the national finances, has dropped off. A mixture of fear, hopelessness and anger is brewing in Greek society.
I spent a few minutes examining the abandoned houses around me, and I noticed that none of them have updated soffits. That’s a problem for all of the FHA backed knifecatchers.
In other words, much of the housing stock can’t be financed, even if there are sheeple willing to sign.
Russian billionaire lands in San Luis Obispo County, California
Big a$$ yacht, supermodel wife, the works…
http://tinyurl.com/29eb52r
Wow…I couldn’t get into the HBB room for the longest time this evening.
I thought CIB had welded the door shut to keep me out again.
If the Fed’s going to monetise debt, now’s the time to do it
Laurence Kotlikoff our guest wrote on Aug 13th 2010, 17:18 GMT
FIRST, some background. The US is bankrupt.
Don’t take my word for it. Take the IMF’s.
In its recent review of the US economy, the IMF said, “The US fiscal gap is huge for plausible discount rates.” And, “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of US GDP.” (See section 6 here.)
The fiscal gap is the value today (the present value) of the different between projected spending (including serving official debt) and projected revenue in all future years.
To put 14% of U.S. GDP in perspective, total revenues currently constitute only 14.9% of GDP.
…
Let’s consider this most likely scenario. I.e., let’s consider the fact that Uncle Sam has a time-path of expenditures net of taxes, which he can only “finance” by printing money. I put the word finance in quotes because printing money is simply a way of imposing a hidden and subtle tax, which economists call seignorage.
In printing money and spending it, the government meets its obligations. But the extra money leads prices to rise by more than would otherwise occur. This reduces the purchasing power of the money and of the government bonds people already hold. And this loss of purchasing power of existing money balances and the decline in the real value of government debt represents the seignorage tax.
So monetary policy is a form of fiscal policy, and we have to think about the Fed’s actions from the perspective of fiscal policy. If we take it as given that Uncle Sam will print money to “cover” his bills, the only question is when. He can print money today to pay off future bills or he can wait until the future to do so. Printing money today to buy long-term Treasury bonds is an example of the former. Sam can also print money today to buy assets that will generate income over time. The return on those assets can then be used to pay future bills.
For example, the Fed could print $9 trillion this morning and buy back all outstanding Treasury bills and bonds. (Note, the Fed would need to print more money if the price of these securities rose as it was buying them up.) This afternoon, it could print, say, $25 trillion and buy up half the world’s stocks. These two acts would make a big improvement in Uncle Sam’s finances.
But the prices of goods and services would skyrocket and the dollar would lose all of its value. Worse, everyone would see they’d been taken and that they should never have held dollars or anything denominated in dollars. Overnight people would make the yuan, the Canadian dollar, or some other more trustworthy money the reserve currency.
So as much as Uncle Sam would like to print $9 trillion this morning and $25 trillion this afternoon and shave $34 trillion off his $202 trillion fiscal gap, he’s not likely to do so for fear of exposing his racket.
Instead, Uncle Sam, actually, Uncle Ben (as in Ben Bernanke), has decided to print money to buy back US bonds and to buy private assets, but on a smaller scale. We heard this week of the Fed’s plans to further expand its “balance” sheet and purchase longer term US Treasury bonds. The Fed also will, it appears, continue to indirectly purchase private assets, primarily in the form of mortgage-backed securities issued by Fannie Mae and Freddie Mac.
This makes sense. When prices are stable or falling, the ability of the public to see through to what’s really going on is that much less. Indeed, exacting the seniorage tax is easiest when prices are falling because the public doesn’t realise that had the central bank not printed so much money, prices would have fallen even further and they would have enjoyed a bigger increase in the purchasing power of their money and government bonds. I.e., when prices are falling and the government prints money, it effectively taxes holders of money and government bonds by limiting their real capital gains on these holdings.
Yes, this is very subtle, but that’s what’s going on.
…
Aug. 19, 2010, 12:27 a.m. EDT
Big investors pulling the exit chute
Commentary: Grab a beer and avoid the bond-bubble bang
By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) — It’s a common misperception that nobody saw the financial crisis coming save a few savvy traders. In fact, everybody saw it coming.
It’s just that no one knew when or how it would manifest itself. Same thing is happening right now with the bond bubble.
Visitors to the trading floors, bars, pubs and restaurants in New York and London from 2004 through 2006 would commonly hear investors and financial types counting their blessings and profits, and saying, “when this thing finally ends it’s going to be ugly.”
Which way is the bond market headed?
The relative riskiness of bonds is probably greater than most investors acknowledge relative to stocks, according to Barron’s Michael Santoli.
Most people speculated it would be tied to derivatives, which meant mortgages. The media, including MarketWatch, was full of stories about crazy prices and ridiculous lending practices, as well as the dangers of securitization and cutting mortgages into pieces to diversify the risk.
But nobody, at least that I have heard from yet, thought “ugly” meant we’d see a run on Northern Rock in the U.K., and the collapse of Bear Stearns, Washington Mutual and finally, Lehman Brothers.
That’s the way it is with financial bubbles and busts. People can see them coming, but they don’t know where they will hit or how hard. As Bloomberg columnist Mark Gilbert said in his book about the latest crisis, “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable,” it was caused by a “conspiracy of the well-rewarded.”
Confident something will happen but unable to give up those last few pennies of profit for fear of missing out, everybody hangs in there until the last possible moment, when the race for the exit begins.
In retrospect, the 9% decline in stocks in Shanghai in one day in February 2007, was the beginning of the crisis. But nobody thought much about it at the time, especially once stocks bounced back. It would be six months before Northern Rock shuddered and shook Britain, and a year before Bear Stearns collapsed. But even that spring of 2007, MarketWatch — and others — were writing about the coming subprime lending crisis. See 2007 MarketWatch story on whether lemming loans will drive the economy off a cliff.
It’s a natural inclination to follow greed as far as it will go, which is always too far. This summer’s repeated headlines and stories about the bond bubble bursting serves as a stark reminder of this phenomenon. Everybody knows that this period of low rates is unsustainable, but investors continue to plow money into bond funds. Once the end happens, it will be difficult to get out without losses. But nobody wants to be the first.
There are increasing signs that something is going to have to happen soon. European bond yields, particularly sovereign yields, are at levels not seen since the teeth of the Greek/Ireland/Portugal/Spain debt worries this past spring. Junk bond sales are booming as investors search for yield, throwing risk to the wind. Gold is hitting new highs. This past week, mortgages lenders witnessed a surge in refinancings even beyond the strong rally they’ve seen all summer. Equity trading volumes are pathetic.
And underlying all the worries is a growing concern that the free markets, once manipulated with derivatives, are now being manipulated by governments and central banks, as they use every possible technique to keep interest rates low to try to stir up some sort of economic rebound.
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