The Housing Bubble

Which is why the HBB was such a refuge. Thanks Ben.

Boy

Am I having Fun. Briefly…

Banksters offered me a verbal (no paperwork) last minute closing date at 20k over my cash offer and 15k over their FB’s agents listing price on advertised on the MLS. Okay says mikey from the turnip truck…humm, lets see here.

Sellers, their RE agent and bank loss prevention gang are all in on this lttle bait and switch last minute scam. This isn’t the 1st time that this little bunch tried to pull this con on this particlur shack. Their counter-offer is the BPO of the last atttempt ’sting” that fell through.

Sure looks like a pattern of “bad behavior” to me. The seller, the agent and the bank put the shack on the MLS for one price but knew their acceptance price was gonna be was always gonna be… 20k higher.

I may not get the shack but I’m on the warpath because they have messed with the wrong puppy.

My RE agent is screaming fraud, false advertising or something. I have some bank vp’s a$$E$ puckering so tight that they no longer want to talk to me without lawyers. I also tracked down the little worm in lost mitigation down in his Maxwell Smart dungoon to let him know that I knew where to find him and said “Hello”.

Everybody suddenly wants OUT of this short sale “deal”.

Did somebody…blunder ! They can’t sell the house until I release my Earnest Money from escrow. It’s gonna be a long cold winter…

mikey…smiles and wonders “Did somebody…blunder” ?

Oh my Goodness Toto…

The MLS listing still reads huge price reduction — but with(new and improved list price up 20k to 220k.)

Sheesh, nothing like a little mikey ranting and raving to drive the markets up and bring out a little honestly into the housing market.

Anyone want venture what mikey’s counter-offer will be tomorrow ?

uh $175k and it goes down $3k a week…sounds like a decent counter offer

“They can’t sell the house until I release my Earnest Money from escrow. ”

Huh? I always thought sellers agent could accept earnest money from multiple potential buyers along with their offers.

Unless you have an accepted offer in hand (and you probably don’t really—even if the sellers signed off on it, a short-sale should always have a seller-contingency stating that acceptance is also required by the lender), then I would assume they are free to sell it to someone else immediately.

Why would you think otherwise?

Seems to me that you can only have 1 signed legal contract and 1 escrow per house at a time with any 1 seller. That escrow(trust) must be properly dissolved prior to establishing a new one as long as the 1st contract is still valid and enforcible.

Screw up and you cloud any future sale and the title of that house as well as face legal action.

Lender approval is a for completion of the short sale is a whole different part of it. Although you have an accepted offer from the seller, you’re really negociating with the sellers agent and the lenders from there. They are party to the transaction as they hold lein on the title and should hold the promisary note. (No accounting MERS and GSE’s)

A seller and their agent can have as many 2nd offers lined up ready to go as they want to although you’d have to be brave to start handing over checks without an escrow account started.

It sounds as if your realtor thinks the seller has to sell at the advertised price.

They don’t.

Nope, they don’t.

But after we confronted their lender, their RE agent and the sellers, all who perfectly well knew the lenders set dream “price” was due to the previous failed attempted sale, the “suggested retail price” on the MLS suddenly was changed to reflect +20k on the listing.

Don’t try to pi$$ on me and try to tell me it’s raining

which may hold off any potential buyers in the wings for my still valid -lowball cash counter-offer.

It’s a all a con game…and then it’s business too.

If they can’t all get along well enough to live in the same house with each other, I don’t need more than one.

“Making all my bills and still saving.”

For too many, that’s proven to be a fairy tale ending. That’s so awesome you made it a reality and in a good place to boot. I’m happy for you and your little boy.

eastcoaster,
I am so tickled to see your post, and even more excited that your purchase has worked out so well. Thanks for the update. We haven’t found the toe tag house yet in So Ca, but your post gave me renewed hope. Hope you son is doing great.

What baffles me is vacant houses that could EASILY sell that sit vacant year after year. There are more than a few in my immediate neighborhood.

There is one on my block that has been vacant for 10 YEARS..adult children fighting over it, I believe.

Houses on my block still selling for 600K +.

Who are these richie riches who can afford not to sell or rent? The houses are deteriorating and the neighbors have to deal with rats, etc.

The question is, after the house burns down, is a fraudulent claim that the house was owner occupied a sufficient cause to deny the insurance claim.

I’m not an insurance fraud expert, but I think that the insurance companies take “owner occupied” to mean that at least one person is actually living at the insured property.

Then hubbie can buy one home and wifey can buy the 2nd. There, problem solved. ‘Fire’ away!

It’s my understanding that they “self-insure.” Which is a funny term, because it really means NO insurance.

That would have been my guess too.

Self-insurance is for guys like Bill Gates who post a bond for automobile liability rather than pay for an auto policy. The auto policy would cover what, $500K in liability? Gates probably has that much in his checking account.

If .2% of the REOs owned by BofA burn down, they presumably just write them off. It’s probably cheaper than paying policies on ALL of them.

In Milwaukee, the lenders are not taking back the houses. The City has the right to bill the bank directly, not as a lien on the real property, for maintenance and upkeep, and taxes (weeds ect).

“No insurance” = self-insurance, with a walkaway option in case the house burns to the ground. Probably would be much cheaper in CA, at least in expectation terms, than actually paying an insurance company for a material level of coverage, though as a non-homemoaner, I have no idea whether this would be legal.

Medical………supported largely by government spending, with even more on the way.

Methinks the government spending isn’t going to support the high prices that the health care sector currently charges. After all, the feds have lots of auditors who can plow through invoices (and other things) and ask, “Does this REALLY have to cost this much?”

This very scenario is happening to me. One of my clients was recently awarded a federal research grant.

But, before he gets going on the actual research, all of us who are doing work for him have to justify our fees. I had to send a letter to DC a couple of weeks ago, in which I described my web development production process.

Haven’t been questioned on the letter, which is a good thing, but the project still hasn’t started.

So, there’s my data point in the larger story called “The feds don’t give up the money without a fight!”

Diogenes, I’m just reporting what I witness and it’s really surprised me as this is obviously not going on to this extent everywhere. I didn’t understand going into 2010 how far the Syracuse PTB would be allowed to go to keep the Ponzi going. These expansions are obviously pure pork. I’m no happier about the acceleration of tax payer supported largesse than anyone else. I report these things w/a feeling of distress.

You ask, “Do you really think these are sustainable?” Well, first of all I was stunned that last year’s expansions were happening. Slack jaw stunned. But NY is a state of graft and special interest power and obviously the slowdown has only accelerated that situation. Armed w/the powerful political mantra of job creation/protection I now believe anything can happen.

Now if you are asking if I’m happy my friends still have jobs, I’ll confess. Yes I’m happy they haven’t yet been thrown into this crisis and I’m hoping they’re saving in the meantime in case their number is soon up.

Implying that those houses should sell for 220-300k. Yah, we can all dream, huh?

300K+ homes in my nabe are now listing for low 200;s and sales only in mid to high 100’s; trend continues to be on a downward spiral. Buyers have gotten the message with the foreclosed beasts leading the way in final sale pricing. Sellers still have to torture themselves with double digit month listings before they cave. Realty offices merging or just closing the doors. Many nice former RE office buildings “AVAILABLE”. Few, if any, seem to be getting recycled. The Obloviator avoids these suburbs when he visits us here in the rust belt; he sticks with his 95% demographic in the cheesy zip codes. There he knows he can get a cheer or two out of them.

By the way, the Obloviator did visit a somewhat better zip code; the local Community College in Parma. Although it was by invite only for his cheerleaders, local libodems and camp followers, unexpectedly, some empty seats needed to be filled quickly. A student reported that someone came to his class and asked if anyone would like to sit in on the speech. Only 7 of 27 raised their hand. Telling.

President Obama lives in your head…. rent free.

CNY has lost 33k manufacturing jobs over the last decade (can’t remember source of article read in the past week) Now I don’t think these expansions began to fill that hole but the difference isn’t that huge either. The thing is the jobs replacing those losses pay higher incomes. I also forgot another industry sector growing in this area: energy! I’m meeting people in this sector all the time and they talk of helping others from the industry move into the area. Must be all the new hydrofracking and nat gas drilling.

“The thing is the jobs replacing those losses pay higher incomes.”

House prices are going down in the lower priced primarily blue collar towns but are still being somewhat supported in this particular town due to what type of incomes are offered w/these new jobs.

Then there are the stories like the other day. We were told of an Arab SU student whose Daddy bought him a house all cash. Made the widow seller get out in two weeks and then was causing a commotion in some home repair shop insisting on crazy home repair turnarounds. The blue collar towns don’t attract the international Daddy will set me up students, I’d imagine. Now that I think about it deep pocketed foreign students also love the rentals here.

I’m skeptical of that ten year number but that is besides the point. Add up the job losses since the beginning of the supply side failure, circa 1980. I’ll wager the Syracuse MSA has lost hundreds of thousands.

I know a group of 30 or so real estate speculators who were buying in Syracuse in 2005 because it was “undervalued”. I’m sure they did their part in driving prices past historical affordability.

WT, I’d say Syracuse is putting all its marbles in the “green technology” bag. There are a few burgeoning start-ups that may germinate. Also see soon-to-appear comments on the energy sector invasion which I neglected to mention in my earlier post of Syracuse industry expansions. It appears hydrofracking and nat gas drilling is going to save us.

(God, please save me from stumbling into a contract on a beautiful homestead where the future holds an ability to ignite my kitchen fawcett fumes!)

http://www.youtube.com/watch?v=VEQMA0zwMM4&NR=1

Grizz,

Rather telling in and of itself. You know you’re in a bubble when you have ‘groups’ scouring the country just to find an area that hasn’t been exploited to the nth-degree already?

That… didn’t occur to them?

Thin-air money supporting the sale of Treasurys paying near zero interest rates also supports increased consumption spending as a substitute for saving when the return is near zero.

What I can’t fathom is why the Fed’s ZIRP seems to (so far) be working to prop up asset prices when Japan’s version (apparently) failed.

“Transportation” should have been “energy”.

Interesting observation….

The move away from “defined benefit” plans to 401(k) plans took place in the early to mid 1980s - about the same time as the stock market took off.

Mechanics don’t make money on parts, the shop does. Mechanics make money on labor hours billed. If the shop rate is $85 per hour, a commissioned mechanic typically gets half. Those hours are based on what the book says a job should pay (ie. a clutch on a Honda should take 4 hours). In this scenario, the commissioned mechanic makes zero dollars if he/she is not working.

Some shops have taken to paying a salary which escalates after say 20 hours per week billed. My friend pays a base of $800 per week for 20 hours or less, which escalates after 20 hours billed, and again after 30 hours billed, topping out at $1600 per week regular time, and much more after the mechanic hits 40 hours. $10 per hour for a mechanic is a joke, and no real mechanic would work for it. They’d simply move onto another town.

I worked as an auto mechanic for 10+ years. As cars have become more complex, there is a shortage of educated mechanics. The days of the backyard mechanic or the kid down the street who was “good with his hands” who dropped out of school and got a nice job at a shop are gone.

To be a decent mechanic you gotta be smart, literate, technical, and willing to keep going back to school as the technology changes.

Oh yeah, and after 15-20 years, as your body breaks down from constant exposure to toxins and lifting and contorting yourself, you better be ready to head back to school again to change careers.

Oh yeah, and after 15-20 years, as your body breaks down from constant exposure to toxins and lifting and contorting yourself, you better be ready to head back to school again to change careers.

And my cousin did precisely that. But, alas, the change of careers was into real estate.

BTW, he was the least talked-about member of the family during my 2009 visit with my aunt (his mother) in northern VT.

‘Bout all that was mentioned about him were his expensive tastes in cars, clothing, and everything else. And we Slims are not conspicuous consumers.

The N Ohio area has been depressed for the last 20+ years; we’ve been continupusly scrapping out industries here since before many of you graduated from high school. Areas in flyover country such as ours have only recently been getting national attention. Politicians gave us a healthy dose of ingnorage. Now, the disease is spreading to the country in general. If you want to see what an area that was going to depend on medical ( the mayor actually said that for Cleveland circa 1990) and other assorted “industries”, come give us a visit. You’ll be able to see your town’s future.

The places that were running ads continuously for aircraft mechanics back in 2005 were all wanting guys with 3/more years experience, and were offering 12-15 bucks/hour.

Same places are still running the same ads. The problem is, when you are talking about moving 1000 miles to take a 12 buck an hour job, it makes more sense to take a 10 dollar an hour job stacking boxes or working at Wal Mart.

No way in hell am I going to take on the liability and stress related isssues that come with working on aircraft for $12/hour. If it comes to that me (and a bunch more like me) will get out.

And this is where all these “free-market” types don’t get it. They think labor is a commodity, and that Chinese/Mexican/Indian labor equals mine. And, like denying there was a bubble in housing until it blew up, they will push this same BS until it blows up in our collective faces too.

And this is where all these “free-market” types don’t get it. They think labor is a commodity, and that Chinese/Mexican/Indian labor equals mine.

And there’s no way in Hades that C/M/I labor comes anywhere near to yours.

Because you’re carrying this thing around called your brain. Which stores decades of know-how and experience. Not to mention the insight into what makes things fly and stay up in the sky.

That’s why I wouldn’t hesitate to board any aircraft that’s been maintained and/or repaired by X-GSfixr.

“they will push this same BS until it blows up in our collective faces too.”

Or until the planes start falling out of the sky.

“Because you’re carrying this thing around called your brain. Which stores decades of know-how and experience.”

Unfortunately Corporate America doesn’t value this at all.

And unions are evil, eh?

Oh wait, aren’t those the same guys that brought us the weekend?

If you want to scare yourself, go find a former airline mechanic that has seen some of the work coming out of some of these backwater contract shops.

Here’s the deal……you don’t have to be a licensed mechanic to work on airplanes, if you work for a Part 145 “Repair Station”. All you need is a QC department to “inspect and supervise” the work.

Back in the old days, this didn’t matter. We had something called “standards” back then. Back in the old days (and still around for the most part in General Aviation) most of the Part 145 shop’s staff were A&Ps, and the only guys not licensed were guys that repaired components (who could get a Repairman’s Certificate for specified items), or guys who just did some of the grunt work, and were well supervised.

Then the bean counters at the airlines decided that the FAA’s “minimum standard” was to be the new “Mark of Excellence”

Out with the A&Ps, in with Joe Blow off the street, whose work (and 20 other guys just like him) was “supervised” by one QC inspector. 20 guys?…….it could be thirty, as far as anyone knows. The FAA has never made a determination on how many people an individual A&P/QC Inspector can adequately “supervise”.

Or better yet, the FAA’s “Globalization” plan, which basically lets overseas shops work on US registered aircraft (mostly airliners) without ANY FAA oversight. All for “One Standard of Airworthiness”.

Made sense…….why fly an airplane back from Europe for work, if a Lufthansa guy could do it on site? Especially when Lufthansa reciprocated. But as usual, the bean counters who run the show saw a hole they could drive a 747 thru..

Want to know why it always seems like American Airlines and Southwest are always being beaten up by the Feds for maintenance issues? It’s because they are the only guys left who still actually do much maintenance on their own aircraft. Most of the other majors farm it out.

This plan works great for JetBlue and others, because their fleets are relatively new, and not much goes wrong with new airplanes. If/when they have to start hanging onto their airplanes longer………

None of this may matter, if the airlines continue to replace all their 40-50 something guys with 1500 hour fresh-off-the-press-ATP “Captains” and 5-600 hour co-pilots…..The airplanes may be trashed before stuff wears out.

Not all corporations fail to value quality labor. Schwab has yet to outsource any call centers…locating them throughout the US. Similar for other companies. This is an easily offshored position.

Not saying we are all going to strike it rich helping each other fix our Chinese built electronics, but while many corporations are seeking to cut costs by going to inferior/cheap labor, many have decided against such moves.

ragerunner,

Very most excellent point! When tabulating those parameters ( lo’ those many years ago… ) how many ppl had 25, 50, 150k in college loans?

How many were forking over $400 a mo. for med. insurance. Time to shuffle the deck.

It is not immaterial. If you had a business model based on commissioned employees with very little investment on your behalf, but shared in their commissions (or charged them for office use, etc.), wouldn’t you want to always be hiring, especially if your base was declining?

Sales volume is sales volume and solely a function of demand. It doesn’t matter if it’s spread across a few or many.

If that SOB hadn’t instituted the Massachusetts experiment, Congress would have NEVER passed Obamacare in its current form, which should more accurately be called “Romneycare”. Believe it.

What about TennCare? That was already in place too, losing buttloads of money.

“We are either all in it together, or we are not.”

That depends on what your definition of “we” is. At this point in time, the US has taken on the color of a taxing authority, not a sovereign nation. I no longer feel much connection to many of my so-called fellow citizens, most especially the folks that LaRaza so stridently advocates for. Talk about showing up and expecting a gift.

+100

Who pays for the Illegals?

Someone breaks into your house and the government says it’s okay for them to be in your house and by the way you have to feed them and they’re family for “free” whenever they’re hungry.

“Some people have a habit of shifting their views, as their taxable income and needs change”

Ya’ think? Right, like all my buddies that decide after they get their first ret. check from the military that all of a sudden we need to downsize the DOD?

“all of a sudden we need to downsize the DOD?”

I thought that had more to do with the top-heavy brass?

Here’s what I think will happen on the health care front:

The recently enacted bill isn’t winning plaudits. And the health insurance is using it as an opportunity to crank up its rates. HHS Secretary Sebelius (among others) is calling ‘em out on it.

IMHO, this is part of a larger strategy that’s aimed at proving that the private health insurance industry is fundamentally incapable of reform. Which will lead to the resurrection of the public option.

And, with the public option being something that people will actually be able to choose, oh, boy will they choose it. Will they ever. And this country will have a single-payer health care system within a few years.

The deficiency of the recently enacted bill according to the opponents is that it provides some limits on ever rising spending on seniors via Medicaid, while doing something for younger generations. To me, that is the GOOD NEWS.

The actual deficiencies are that it:

Failed to separate govvernment subsidized health insurance from one’s place of employment, discouraging entreprenuership and tying people to their employer.

Failed to end the practice of the health care industry charging different prices to different people.

Failed to junk group underwriting (and the game of excluding the sick from your group) in favor of individual underwriting with the government providing more funding for those who are sicker.

And failed to provide equal government subsidies to those in the same situation, rather than providing more subsidies to the financially (executives) and politically public employee unions) rich via greater tax benefits for employer-provided health insurance.

And costs will continue to skyrocket, single payer or no. Whoopee!

The Preamble of the US Constitution:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Maybe let’s delete that part of the general welfare, shall we?

Let all those uninsured jerks die outside the locked doors of your neighborhood emergency room.

In law school we were taught that the preamble has no legal meaning or force…..

General welfare comes in Art. I section paragraph 1 which recites in pertinent part “The Congress shall have Power … to pay the Debts and provide for the common Defense and general Welfare of the United States…”

I don’t think the founders meant the same thing when they said “welfare” that modern politicians do.

I’m not sure about the specifics of the ban. Here’s wikipedia’s take, it sounds like the anti-malarial use involves spraying:

Some uses of DDT continued under the public health exemption. For example, in June 1979, the California Department of Health Services was permitted to use DDT to suppress flea vectors of bubonic plague.[25] DDT also continued to be produced in the US for foreign markets until as late as 1985, when over 300 tonnes were exported.[1]

Restrictions on usage

In the 1970s and 1980s, agricultural use was banned in most developed countries, beginning with Hungary in 1968[26] then in Norway and Sweden in 1970, Germany and the US in 1972, but not in the United Kingdom until 1984. Vector control use has not been banned, but it has been largely replaced by less persistent alternative insecticides.

The Stockholm Convention, which took effect in 2004, outlawed several persistent organic pollutants, and restricted DDT use to vector control. The Convention has been ratified by more than 160 countries and is endorsed by most environmental groups. Recognizing that total elimination in many malaria-prone countries is currently unfeasible because there are few affordable or effective alternatives, public health use is exempt from the ban pending acceptable alternatives. Malaria Foundation International states, “The outcome of the treaty is arguably better than the status quo going into the negotiations…For the first time, there is now an insecticide which is restricted to vector control only, meaning that the selection of resistant mosquitoes will be slower than before.”[27]

Despite the worldwide ban, agricultural use continues in India[28] North Korea, and possibly elsewhere.[12]

Today, about 4-5,000 tonnes each year are used for vector control.[12] DDT is applied to the inside walls of homes to kill or repel mosquitoes. This intervention, called indoor residual spraying (IRS), greatly reduces environmental damage. It also reduces the incidence of DDT resistance.[29] For comparison, treating 40 hectares (99 acres) of cotton during a typical U.S. growing season requires the same amount of chemical as roughly 1,700 homes.[30]

Charity, as such, is supposed to be a stopgap anyway. For example, when my apartment building burned a few years back, I was most grateful for the charity bestowed by the Red Cross. It was so much more than money, it was shelter, a sympathetic ear, etc. For a week, until I could get situated elsewhere and get my renter’s insurance benefits started. I was most grateful for that charity, and to this day some of my family donates to the Red Cross. But at that point in time, I was between incomes and got caught with my pants down.

But it never became a lifestyle.

I’d like to give another plug here for the Red Cross. The community help they extend is awesome. Every time there’s a fire or some other event that leaves people homeless in a community, the Red Cross is right there to help stabilize the situation. Unless you’ve experienced it, you have no idea how incredible that charity is.

Amen brothah testify!

I think globalization is really just one result of our collective hypocrisy about government. We like government to enact all kinds of wishful thinking, in the form of regulations, so we can show how wise and enlightened we are. But when it’s time to purchase goods and services, we don’t want to pay the cost of complying with those regulations. So we send the work overseas to countries that don’t have them.

Globalization is in it’s infancy, and it will be many decades before all the kinks are worked out, as was the case with the Industrial Revolution.

And like the I-R, nothing can stop it.. nothing will stop it..

“So we send the work overseas to countries that don’t have them.”

I am reminded of an old bumper sticker that used to make the rounds:

“Buy American, the job you save might be your own.”

Of course in many cases our Corporate Capitalist Communist overlords didn’t even give us that choice.

I think globalization is really just one result of our collective hypocrisy about government. We like government to enact all kinds of wishful thinking, in the form of regulations, so we can show how wise and enlightened we are. But when it’s time to purchase goods and services, we don’t want to pay the cost of complying with those regulations. So we send the work overseas to countries that don’t have them.

+1

Most blatant example - if China, Mexico, Malaysia, etc. had a minimum wage of $7.25, globalization would disappear overnight.

This is merely impressionistic, but as I remember it, early globalization efforts were a way to kiss 3rd-world ass in order to keep them on our side in the Cold War. Then it became Nixon’s way to kiss China’s ass to exploit the rift with the USSR. Then you had the old Open Door morons (had a few in my family) who were so sure that the teeming masses of Asians would be a huge new market for OUR goods. LOL.

And of course the corporations were sooo helpful, coming up with all sorts of ideas…

We? The “I never liked math crowd” won’t ever connect enough dots to realize their purchase choices act as votes for how things must be done.

“Most blatant example - if China, Mexico, Malaysia, etc. had a minimum wage of $7.25, globalization would disappear overnight.”

Heck, Mexico is too expensive to compete, and their minimum wage is something like 80 cents an hour.

Most blatant example - if China, Mexico, Malaysia, etc. had a minimum wage of $7.25, globalization would disappear overnight.

But that would require, gasp, oh no, those pesky socialist labor unions.

Never mind, who needs to make more than $2 a day?

Look at this: SO COOL! Really gives you an idea of how little most people in the world are making.

http://www.worldmapper.org/animations/income_animation.html

Be patient, the animation is mindblowing.

…if China, Mexico, Malaysia, etc. had a minimum wage of $7.25, globalization would disappear overnight.

You put the cart in front of the horse.

When wages or prices change, or when environmental rules or business taxes or other costs change (and they do all the time), the global trade markets make an adjustment.

Wages are relative. If the lowest paid labor in the world makes $100 an hour, that country will get the business.. Higher wage countries will not.

Most blatant example - if China, Mexico, Malaysia, etc. had a minimum wage of $7.25, globalization would disappear overnight.

In an undergraduate econ class, we were talking about trade. I asked the professor about trade between a richer country and a poorer country. He said the rich country’s wages would fall and the poor country’s wages would rise.

This is basic knowledge in economics circles.

the rich country’s wages would fall and the poor country’s wages would rise.

So, in theory, wages must eventually equalize across the globe.

Then what? Is that the end of wage increases for mankind?

..ask him that next the time you run into him..

In Colorado,

No doubt, hands down. But this isn’t something ‘new’. It’s been quietly taking place ever since the MEW-well began to run dry. ( i.e No Free Cars for YOU! )

My SIL and I turn cars over for fun & profit so like I say, we watch this fairly closely, he more in tune w/ it than I. You’ll recall Ben posted sometime back that a dealership in Jersey was going to GIVE you a used car if only you’d buy a new one!

C4C created some sort-term distortions but as you point out, certainly nothing of an order to have impact over a year later? C’mon. Still, can’t say as I’m not disappointed we see free mkt. gremlins by the buttload where house-propping is concerned but sheeplishly shrug our shoulders when CAR prices spike ( in the 2nd leg of a double-dip R for that matter! )

What makes it all the more suspicious is that a good many of the vehicles I’ve seen ’spike’ have been on their lot for over a year! ( Uh… where’s the ‘dearth’ of supply here? ) And… they continue to SIT! Sorry, I see string pushers.

It really is that simple. People want cheap cars, especially since they actually have to pay for them now.

I observed this phenom in Mexico in the late 70’s and early 80’s. Back then the Mexican market was 100% closed. All cars (except on the border area) had to be built in Mexico. They were much more expensive than here (this was when a Ford LTD cost 5K in the US, the same model cost 10K in Mexico) only the upper class could afford new cars, and the middle class had to content itself with used hand me downs or VW bugs, which held their value fiercely once they sank to certain price point. Once hyperinflation kicked in they appreciated handsomely (of course new car prices skyrocketed as well).

Wow, explains why it was so hard to find a decent used minivan. Those things seem to be disappearing entirely. I finally got one but had to pass on the primo Odyssey and Sienna models.

joey,

Thanks for the link and I’ve no doubt it was scary times for the iron-peddlers. Here’s what I -don’t- understand? For the longest time we’ve had post after post, thread after thread about “how the gubmint is artificially propping up ‘home’ prices”

( but we can’t seem to recognize when they’re doing the very same thing in the used auto market? )

I’ll wager this is being driven by the usual suspects, the lending inst. and credit unions that are taking a BATH on jingle cars and they’re tired of taking it in the shorts!

The Used Lots themselves have NO pricing power -unless- there is collusion. Again, why did this happen virtually overnight?

i was shopping for a used, light cargo carrier with a hitch.. no trucks. So i’m looking at minivans.. dodge caravans and whatnot.. but they get better every year.. bigger engine.. 6 speed instead of four, etc. I haven’t pulled the trigger.

Again, why did this happen virtually overnight?

From what I gather, the people we’re talking about (people and businesses who regularly trade in “newer” used vehicles) keep a car around 36 to 48 months.

They bought their last batch of new cars maybe 42 months ago… which would be.. very early 2007? That’s really close to when the RE bubble was recognized to have burst.

They were on schedule to trade in those cars right about NOW.. but they’re not doing it. This is the first wave of cars NOT being traded in.

Unless there’s some remarkable, unexpected recovery, new cars bought in 2007 / 2008 won’t be traded in next year.

Or if you’re like my wife and really want a 70k car and only want to pay 25k. Took time plus a willingness to buy a model unpopular with the type of people who buy 70k cars new.

measton/Dennis,

Good points all, and it’s not like I hadn’t considered them? ‘My’ question ( or utter disbelief ) surrounds the fact that I went on a 3-day Labor Day weekend to (1) market and came ‘back’ to an entirely different one the following Tuesday!

It just struck me as being altogether too coordinated. This flies in the face of our general ( myself included ) premise that once Deflation takes hold, there IS no recovery!

Carl Morris!

Yes! Thank you. This is where I spend much of my life. Normally Dennis and I agree on a broad spectrum of matters but I’ll have to respectfully disagree here.

Given this will be parked in your driveway/garage for the next decade or so… the ‘time’ is well spent where ‘I’ am concerned. Considering you are the one that’ll be writing out the checks for maint. etc. is there really a way to do ‘too’ much research on this?

On a side note, I’ve become an expert on electric guitar amps “no one else wants” have no “collector value” ( than God ) and are -extremely- under-rated! If you want throw untold sums of money at “highly collectible” Fender Twins ( there’s only too many ppl out there more than willing to take your money! )

I’m a guitar amp heathen…I actually like Cybertwin heads once I figured out how to get what I wanted out of them.

Carl Morris!

“Cy…ber Twin”? Did I hear you say Cy…ber Twin?

An outrage! Yeah, I get tired of that BS too. Same “it’s different here” mentality that drove half the HB. If… there were (1) guitar/amp/neighborhood we should dispense w/ the other 99.9% and commence flocking there ASAP!

No individuality, no imagination, just herd mentality. FWIW, I keep stumbling on steals for “trans-tube” or hybrid/solid state etc. amps that people just seem to want to keep GIVING me! My last acquisition ( a Marshall AVT50H ) the guy was so desperate to get rid of it he sent his WIFE down to deliver it to me! Then took 10% -more- off the asking price! Just insane what’s going on out there. Selling perfectly good equipt. for pennies on the dollar to get onboard the Vintage Gravy Train.

No one has any confidence in their OWN judgment and they’re worried like hell they’ll “get stuck w/ a white elephant”.

Yeah, you heard me :-). I’ll even admit for every single sound/environment there’s probably a vintage amp I’d like better. I just like not have to have a bunch of them. I was iffy at first but somebody clued me in to the importance of the compressor and turning the input trim way down to get to where the compression wasn’t kicking in too soon. I’m pretty happy with it now, and I love the built in stereo tape delay simulator that never needs maintenance but has wow and flutter good enough to be indistinguishable from the real thing when mixed with everything else. Not for everybody, but works for me.

“Vampire-Squid”?

China already has a Vampire-squid. It’s the CCP. Two Vampire-Squids can’t be tolerated.

Roidy

Or maybe the PRC government saw what being “pro-business” did to the US economy.

I think they saw what it did to gov. The center of power in the US is Wall Street and corporate titans. In China it is the gov. China’s gov above all else wants to retain power over not just the people but corporations as well. They still want to pick the winners and loosers.

I trust it is the strategy least likely to force them to publicly admit to insolvency.

..Insolvency means the inability to pay one’s debts as they fall due..

Not unloading allows them to continue to pay their bills.

If they dump too many properties and are forced to absorb the losses now, they won’t be able to pay the bills.

It’s a race against time. Given enough time, the banks can build reserves with which to absorb losses. Meanwhile, they can pay the bills.. and the opportunity for complete recovery remains alive.