The Housing Bubble

Oh, the horrors! I did forget about hyper limits, black holes, worm holes, gravity lenses, what else?

You also forgot Magnetic levitation? Put cars on tracks then magnetize them with similar polarity. The coefficient of friction can be reduced by making the car lighter and they will go faster and get better milage. Reverse the magnetic field and the cars will stop quicker. Easy as pie.

Oh goodie. It will only cost dm437,000 dollarmarks.Unemployment will be only 65% and benefits under Hillary will be extended from the 375 weeks of Obama.Housing costs will continue to go up and no one will be under water. Lareah back at NAR.

David Lereah will be Fed chairman during that remarkable period.

My bet is that by 2025 the few remaing people with money won’t want a car that doesn’t get 60mpg. Gas will be about $10 a gallon.

Aladinsane will be ok!

“Oh goodie. It will only cost dm437,000 dollarmarks. Unemployment will be only 65% and benefits under Hillary will be extended from the 375 weeks of Obama.Housing costs will continue to go up and no one will be under water. Lareah back at NAR.”

Hysterical much?

Gheesh….I hate this packing and moving thingy!!

Where did I get and accumulate all this house junk and extra clothes!?! It’s NOT possible that one guy and a grown kid(who deserted me prior to this move and is now AWOL in Alaska and very happy with his chick) could have gathered this much usless junk.

Heck, when I was a kid, I moved through the jungles with everything I had on my head and my back. Sometimes I traved fairly light for recon’s and sometimes the crew chiefs gave me the “evil eye” when I was loaded for bear and was carrying all of my little handy-dandy personal WMD’s and waddled towards their chopper.

Now I have I have more junk than my freakin’ stuff than my entire Airborne Brigade had at their silly base camp and I will have to throw out and head to Goodwill with a ton of junk even before the packers arrive on Tuesday. Ugh!

My LL ordered and placed a big dumpster in the driveway because he and his contractor friends are gonna totally strip, renovate and update and both units when I leave. He’s after “Mo Money”, good luck to him.

I’m gonna fill his dumpster even before the movers arrive, he’s gonna have to order another one…Sue Me !

That’ll learn him durn him.

A quick call to Goodwill before you head over would be a good investment of time. For example, I discovered that they will not take anything that resembles or includes a mattress, so my Jennifer Convertibles sleep sofa is toast. I think that is to comply with a state rule, so you may not have to deal with it, but It is worth a 5 minute call. Also, the whole bed bug thing may mean they have put restrictions on certain items.

Before giving anything to Goodwill, open a Guidestar.org account and read their financials. You’re looking for an IRS-990, which is the non-profit’s tax return. You will find the CEO makes over $500K a year - while underpaying developmentally disabled adults [aka, slavery] and charging higher than standard thrift store prices — all while bamboozling the public that they are a do-gooding charity - BAH!

..CEO makes over $500K a year..

so.. first thing we should do is check executive salaries before dumping our crap on their doorstep?

Right Polly, forgot about that bedding thing with the weird bugs in some states. Creepy

mikey checks his manual:

Animal House Rulebook for used and sagging 3rd bdr. single beds (without little bugs.)

Sayssss, err, Yes…Rule 14: When in doubt or danger of any local, county, state or federal rule, over the balcony, and into LL industrial dumpster. Airborne….!

Sheesh…this is as EZ as college.

Next.

Check Goodwill. Also check Red Cross, with85-90% going to overhead! I give to Mex Charities (leave on curb) overnight.

Just got back from Paris. Gas is (based on current exchange rates & metric conversion) $7.60 a gallon. While American attitudes certainly contribute to our large vehicle / poor mileage standards, I do believe it is simple economics that drive much of people’s choices. I did see a fair number of SUVs like the BMW X5 and high performance cars (R8s, 7 series sedans) roaming around. There is no question diesels were much more popular as well as scooters.

VW diesels have been available here in US since the late 70s. Hers is a 2002 and all of her friends make fun of it (they drive suvs and mercedes/bimmers). I tell her she will laugh last.

Need a laugh?

Wiki says: “The Department of Energy was formed after the oil crisis on August 4, 1977 in order to end the United States dependence on foreign oil …”

And yet I keep hearing how Carter was our worst President…

But you forget……a “comprehensive energy and fuel efficiency policy” is something a Socialist would cram down the throats of all those “free market” loving Amerrucans.

The reason diesels are so prevalent in Europe is because fuel taxes are so high. If you want to reduce fuel consumption, tax it more, and let the “free market” figure out how to deal with it.

Everybody on this board rags on trucks and SUVs, but I’m betting quite a few of you weren’t even old enough to drive when it started. It wasn’t any great Master Plan by Detroit; it happened because (at the time) you got a lot more transportation for the money buying a truck vs. car.

(I remember going new car/truck shopping with my Dad back in 1970. There was only a couple hundred bucks difference in sticker price between a full size truck, and a compact car. The truck was by far better built and more versatile).

Until approx 1990, a truck was significantly cheaper, and had better resale value, than the typical mid-size car. It was only later that Detroit and the Japanese truck makers started down the bigger/roomier/more car-like path.

Greg Mankew an economist who worked for GW suggested just that. Tax gas and use the proceeds to cut the payroll tax.

Make energy more expensive and labor less expensive. Seems like a no brainer, and yet.

With Obama, Carter is now the second worst president. Why aren’t we drilling for our own oil? Too many dummies voting these days. Bring back the poll tax.Must talk English and pay taxes.

Comment by sleepless_near_seattle
2010-10-03 10:22:03
And yet I keep hearing how Carter was our worst President…
—————–

Funny, I was going to post the same thing.

“Moron” was coined in 1910 by psychologist Henry H. Goddard[3] from the Ancient Greek word μωρός (moros), which meant “dull”[4] (as opposed to “sharp”), and used to describe a person with a mental age in adulthood of between 8 and 12 on the Binet scale.[5]

It was once applied to people with an IQ of 51-70, being superior in one degree to “imbecile” (IQ of 26-50) and superior in two degrees to “idiot” (IQ of 0-25). The word moron, along with others including, “idiotic,” “imbecilic,” “stupid,” and “feeble-minded,” was formerly considered a valid descriptor in the psychological community, but it is now deprecated in use by psychologists.[6]

exetr… see that? If you really wanna cut someone down, use “”idiot” (IQ of 0-25)

RunJoeyRun, Pismoclam…. it’s all the same.

???

exeter, karl marx.. it’s all the same. (sans moronic winking face)

Karl Marx was much more polite than exeter.

Theres no need for alternate user names RunJoeyRun.

Tesla Motors is releasing it’s Model “S” (a sedan & a beaut) all electric car in 2012, which will get 300 mpc, with it’s faster battery recharge technology. We need to replace our 16 yr old Volvo, but we think the $53K is nose bleed high. Word has it, the price is coming down soon after. Anybody else interested in this firm’s vehicles?

I’m keeping my eye on them. That model “S” does look good. What I’d be most interested in is a cheaper plug-in hybrid capable of powering the house during a power outage.

Carl
You sound like my EE husband. I read that after Tesla makes some good dough on the release model, they will adjust the price and bring on new sedan models for mass appeal. This model S’ front end looks like my husband’s old Jag XKE V12 convertable, which he sold, and the guy who bought it died in it. RRRRRMMMM- crash!

Call me cynical, but us guys in the aviation business have seen all this before……….Silicon Valley types running their mouths about what dumb a$$es the “old paradigm” manufacturers are……

Wiki: “BD-5″ and “Eclipse Jet”……

Carl,

I too want a PLUG IN hybrid. I don’t like being tied to an electric charging station, not yet anyway. I read about a company that wants to offer an cell-phone like service: they put the charger in you garage, they put chargers all over the county, and you get all the free miles you can drive for $70-80 a month. I think that’s pretty high, depending on the size of the county. Do they charge “roaming” if you have to use an out-of-state charger?

Damn! I loved the BD-5! “Cutest” one-seater civilian jet I’ve ever seen.

I thought the Eclipse was in production and doing okay? Not great, but okay.

Oxide,

The company is called A Better Place. They are starting out in Isreal and the Netherlands. Israel has an obvious motive for not wanting to be dependant on oil for transportation and the Netherlands has a lot of renewably generated electricity. Both countries also have generally fewer long trips than a typical driver in the US have.

The presentation I heard was well attended and pretty much everyone in the room wanted to throw money at him. The one thing he couldn’t address was my question. I asked him about needing to improve the overall grid in the US to make it work here and he brushed it off by saying that the US grid needed to be fixed anyway. The other real problem that they have (which he did acknowledge) is that you need a fairly large initial population to make the scale large enough to set up the places where you exchange out your almost kaput battery for a fully charged one (like filling up the tank). There are problems, but not insurmountable ones for densely populated areas. I don’t see the model working well in places where you are dealing with very low population densities.

The Tesla car is about as real as the one in “Back to the Future” that ran on banana peels and beer cans. I will believe it when I see it.

We don’t need cheaper transportation via automobile. What we need is alternative public transportation which works for the masses in the way of convenience and affordability. Cheaper fuel prices just means more traffic, and a lower quality of life. Some of these traffic jams I’ve been seeing over the past decade indicate a complete failure of the system insofar as commuting is concerned.

The Tesla car is about as real as the one in “Back to the Future” that ran on banana peels and beer cans. I will believe it when I see it.

The “S”? I assume you’re not talking about the little roadster because I see those on the street all the time in Boulder. We have a Tesla dealership here.

Take the first Grants Pass exit and head south
on 6th st. In the middle of town at H street,
park and take a walk to see all the chaulk art
on two city blocks of city streets. Band and
entertainment.

I still haven’t figured out the difference between a “greeter” and a “flasher”.

Google “Laguna Beach, Greeter” to see the
difference. For Flasher, google “Portland,
OR mayor flasher”

For Flasher, google “Portland ??

Hilarious…

walk to see all the chaulk art
on two city blocks of city streets. Band and
entertainment ??

Dang…Did not get this until this evening but I did not have time anyway…Got to get back…There is some work to do…

At one time in the far past, Spain imported far more than they exported and they thought this was a good idea.

So despite tax cuts for the rich manufacturing declined and unemployment rose.

Hmmmmm??

But I disagree with you on unemployment and wages, given the fact many jobs are outsourced now, they are replacing Americans at home with 3rd world cheaper labor (H1-B’s, L1-B’s and illegals).
Structurally we have a job deficit.

all of that would be self-correcting in a free market. the value of our labor should have been magnitudes higher than it is now. we could have then easily outsourced jobs because our labor would have been too valuable to do the things we can hire others to do.

an exaggeration can make it more clear. if the value of labor was zero (labor was worth nothing), then no one would hire anyone. and if the value of labor was approaching infinity, then everyone would be hired for nearly infinite wages. now, both of those conditions are impossible, but i used the extremes to make the point.

in a free market, the value of labor continues to rise because skill sets are improving and technology is advancing. developing countries would have low skill set labor and their labor would be worth less than ours and would be paid accordingly. it would be natural for us to export our menial jobs to lower value jobs for less pay.

unfortunately for us, the value of our labor is eroding as we enact more taxes and regulations. the more the value of labor erodes, the higher unemployment gets and the lower wages go.

I call this post a STEAMING PILE OF BS.

America did JUST FINE under higher taxes and similar regulations 20 years ago. I don’t think it’s the only problem now. Oh, that’s right, it’s only a problem when Democrats are in charge.

Other countries are training people to take tech jobs faster than we can invent tech (look at how India co-opted the Intenet within a decade). And now that your precious Free Market has free reign, American companies are now spreading the wealth of 300 million people over about a billion and a half.

Simple as that.

America did JUST FINE under higher taxes and similar regulations 20 years ago.

not as ‘fine’ as it would have done with lower taxes.

———–

And now that your precious Free Market has free reign

you really are deluded, aren’t you?

———–

American companies are now spreading the wealth of 300 million people over about a billion and a half.

another nonsensical statement.

wealth is leaving this country because taxes and regulations make it too expensive to produce in this country.

socialist policies are driving production to more business friendly governments like india and china.

————

Simple as that.

yes, for the simple minded.

wealth is leaving this country because taxes and regulations make it too expensive to produce in this country.

Sure. Taxes were higher under Reagan. Taxes and environmental restrctions could go to zero and the jobs would still leave. Hard to compete with folks that earn 1/6 of what you make. As for being more “productive” they are just as smart as we are. Wages will continue to collapse until wage parity with the 3rd world is achieved.

Buh-bye American middle class.

..America did JUST FINE under higher taxes and similar regulations 20 years ago.

Business life was different 20 years ago. Consider the development of the internet.

“Other countries are training people to take tech jobs faster than we can invent tech.”

This is what the “work harder/smarter” crowd just doesn’t get. These folks are just as hard working and smart as we are and will work for as little as 1/10 of our wages.

Taxes and environmental restrctions could go to zero and the jobs would still leave.

yes jobs would still leave! i already said that. but less taxes and restrictions would see the value of our labor start to increase. new and better paying jobs requiring higher skills and technology would be created here. let making cars and computers and answering phones move overseas if we can’t do it cheap enough. it wouldn’t matter. we would be creating new things that we can’t even imagine yet, right here. our skill set and technology would be advancing. our labor would me worth more, because it would produce more. jobs and wages would rise.

..These folks are just as hard working and smart as we are and will work for as little as 1/10 of our wages.

you might be understating the facts..

Since it’s been a hot topic of discussion recently, i’ve been looking for info about outsourcing the last few days.

One page claimed 1,000 people in India commonly apply for these IT positions, and only 5 are accepted.
And their schools don’t mess around either.

Such fierce competition means Americans are competing with the cream of the cream.

let making cars and computers and answering phones move overseas if we can’t do it cheap enough. it wouldn’t matter. we would be creating new things that we can’t even imagine yet, right here.

I know we can do some thing but can’t imagine what it is? But in the process give every thing else. Hey makes no sense at all in a dumb sort of way.

Rio would present
Germany and Japan

Germany has regulation, unions, and taxes and still is a manufacturing powerhouse.

The problem with a rising tide lifts all ships occurs when there isn’t enough water. The idea behind globilization is that we will create a middle class in foreign countries that will buy goods and increase jobs for everyone. The problem is that if they start buying goods the cost of goods will rise due to limited natural resources. Thus the only people who become rich in TJ’s world are those who control natural resources and the gov of countries with lots of natural resources. The value of labor will collapse as countries fight each other for the jobs. This is exactly what is happening now. We are hearing talk about currency wars. Currency wars are a rapid way to make labor poor and resource controlers rich.

The USA and Germany have so very little in common.. why must we compare them?

The response to Rio would be that Germany was uniquely positioned to benefit more than any other country in the EU when it began.. And their success is sucking their neighbors dry.

Sun 3 Oct 2010
Dilemma: Germany’s Manufacturing Success Weakens Its Customers

If the rest of Europe hasn’t got the money to buy Germany’s consumer goods, Germany has to lend us the money to do so.
That is what is happening.
Today Irish banks owe German banks €127 billion and this pattern is repeated all over the EU. So the Germans are caught by their own success.
By being such a brilliant exporter, Germany has ensured that industry in other EU countries struggles, so the other EU countries fail to generate the surpluses they need to finance themselves.

http://www.thegulfintelligence.com/Docs.Viewer/d1930928-9dbb-4f8e-a67e-7ea0fbd2765d/default.aspx

Germany has regulation, unions, and taxes and still is a manufacturing powerhouse.

the united states had all of those many years ago also. but the tax rates were much lower then, than they are now. same with regs. much fewer of them many years ago. your example doesn’t negate the fact that lower taxes and regs increase the value of labor..

—————–

The problem with a rising tide lifts all ships occurs when there isn’t enough water.

if by ‘water’ you mean ‘wealth’, then it isn’t a problem. while wealth is in decline in this country, wealth worldwide is increasing. china for example, is adding a great deal of wealth to the world.

———

The idea behind globilization is that we will create a middle class in foreign countries that will buy goods and increase jobs for everyone. The problem is that if they start buying goods the cost of goods will rise due to limited natural resources.

new more efficient ways of production will ease the increased use (or in some places replace) of most natural resources.

———————

The value of labor will collapse as countries fight each other for the jobs.

in a free market there would be no need to fight over jobs. the value of labor will never collapse as long as the government stays out of the market.

—————

This is exactly what is happening now. We are hearing talk about currency wars. Currency wars are a rapid way to make labor poor and resource controlers rich.

the race to devalue currencies is a stupid outcrop of keynesian economics. the only thing that happens in the long run with currency devaluation is your currency will buy less and less, with inflation raging. cheap money lowers the standard of living.

Rant all you want but wages will never converge with “world” wages. For example, American labor costs to produce a kilo of rare earth is/was about $4.00; China’s labor cost? 16 cents. There would have to be a lot more boarding houses sprout before a serious trend to convergence develops. Maybe after two or three revolutions, maybe.

Rant all you want but wages will never converge with “world” wages.

why would we ever want our wages to ‘converge’ with world wages?? we need to keep the value of our labor high so our wages will be high and so that we’ll have full employment. i want the value of our labor to be high and our wages to be high.

———

For example, American labor costs to produce a kilo of rare earth is/was about $4.00; China’s labor cost? 16 cents.

so let them produce the rare earth. we can buy it from them cheap. we would just be hiring them to produce it for us. then we can add value to the raw material by making something with it. we don’t have to produce it if we can get it cheaply.

———–

There would have to be a lot more boarding houses sprout before a serious trend to convergence develops. Maybe after two or three revolutions, maybe.

again, i don’t want ‘convergence’. nothing i’ve ever said has indicated i want the value of our labor to converge with a lower value of labor.

Hey, TJ, I mean, Carly Phoneyorina. Nice to see you on the blog!

The idea that high-tech means high-skill is totally wrong. Some hi-tech means high-skill, but a lot of high-tech reduces the skills needed. Thus, in addition to everything awaitingwipeout, joeyincalifornia, and measton are saying, another problem is that the more high-tech gadgets that are invented, the less structural support there is for high-skill or even medium-skill jobs.

For example, the ATM machine is 1970’s technology. How many tellers were put out of business by that one machine. Those jobs were definitely were not replaced by new jobs designing, building, and servicing ATM machines–those machines don’t take that many people.

As another example, how many clerical workers lost their jobs at the same time as computer word processing became ubiquitous?

I could continue this ad nauseum. The point is “high-tech economy” is yet another slogan foisted on the unsuspecting American worker clinging tenaciously to a hope for middle class livelihoods. I’m all for high-tech, if its useful. But, that kind of economy is not going to magically solve the jobs problem–in fact, that kind of economy makes it worse, and even more so when U.S. workers are competing with A+ students in India, who speak better English, and will work for 1/6th the pay for the few high-tech jobs that are produced.

IAT

hi IAT, thanks for the welcome (i think).

i’ve been around here for years but haven’t posted much until recently.

so on to your post..

The idea that high-tech means high-skill is totally wrong.

yes it is. they are separate. you van have high skill without hi-tech and visa versa.

———

another problem is that the more high-tech gadgets that are invented, the less structural support there is for high-skill or even medium-skill jobs.

that’s true, but it isn’t a problem. the skill has been replaced by technology, but that’s a good thing. the value of labor has moved a rung up the ladder by eliminating a job. now more can be done cheaper. that’s always good for production. the person that was replaced by technology has to enter the work force again and will get a job. probably a better paying job since the value of labor is increasing. paradoxically, it the goal of the free market to eliminate jobs with better efficiency. but new jobs are always being created in a strong economy.

—————–

For example, the ATM machine is 1970’s technology. How many tellers were put out of business by that one machine. Those jobs were definitely were not replaced by new jobs designing, building, and servicing ATM machines–those machines don’t take that many people.

ATMs could do the job cheaper. those were low value jobs being replaced by higher value technology. no harm was done. the economy was strengthened by better efficiency. former and future tellers went on to different jobs in a stronger economy. most of them probably got better paying jobs.

————

As another example, how many clerical workers lost their jobs at the same time as computer word processing became ubiquitous?

more low value jobs being replaced by higher value technology. why do you fear this so much? nothing bad is happening. the economy is growing stronger with automation and other hi-tech solutions.

———

I could continue this ad nauseum.

me too.

———

The point is “high-tech economy” is yet another slogan foisted on the unsuspecting American worker clinging tenaciously to a hope for middle class livelihoods. I’m all for high-tech, if its useful. But, that kind of economy is not going to magically solve the jobs problem–in fact, that kind of economy makes it worse, and even more so when U.S. workers are competing with A+ students in India, who speak better English, and will work for 1/6th the pay for the few high-tech jobs that are produced.

it’s just not true that hi-tech hurts an economy. hi-tech is high value, just as high skill is high value. they both increase efficiency and increase production, which increases wealth (unless it gets taxed away).

we should never be concerned about the jobs other countries are getting. we should only be concerned about enhancing the free market in our own country. it will provide many good high paying jobs if you do so. low value jobs will disappear. low skill jobs will slowly be automated. when they are, you and i and everyone else will have to pay less for what gets produced.

of course in the present environment of government intervention, this can’t happen. jobs will stagnate as the value of labor continues to erode.

we can’t command innovation. we can’t command high wages and we can’t command high employment. all that happens out of someone’s need, not anyone’s direction. that’s why a strong economy needs a free market.

You and I both can continue this ad nauseum. The difference is, my continuing is based in real data, whereas your continuing is based in several faiths, to wit:

1)If technology kills a job, the worker who had that job will get another job which demands equal or greater skill. There is no evidence in support of this faith as a general matter, and, basic human capital theory would suggest otherwise (i.e., the worker ages, and as one ages there’s insufficient time to reap sufficient gains to future human capital investment, so the worker will likely have to take a job based on their depreciated skill).

2)All high-technology increases productivity, so high-technology is a net positive. Tell that to the people of Hiroshima and Nagasaki, killed in the most efficient way ever devised. In fact, technology will only be a net positive when the social structure in which it is deployed MAKES it a net positive. For example, the Ancient Greeks had steam engines (in toys), but they also had slaves, so they had no reason to make the steam engine produce a net positive.

3)Taxation is the root of all problems in the economy. <This forgets that food inspections, the interstate highway system, the internet, indeed, all infrastructure on which the economy depends, was built (and is maintained) with those very taxes you decry. I’ve never heard a person denigrating taxes indicate just what level of taxation they think is proper. All I hear is LOWER, LOWER. Silly.

And so on.

If you set aside your faith and look at the evidence, then you’ll have to admit–those displaced workers will probably never have jobs as good as they lost, being more productive at something destructive is just more efficient destruction, and U.S. taxes are a necessity and probably are too low for some entities (compared to historic and international norms in developed (i.e., your vaunted high-skill) economies)).

However, when it comes to faith, most people can’t bear to look at the evidence. So, . . ..

IAT

If you set aside your faith and look at the evidence, then you’ll have to admit–those displaced workers will probably never have jobs as good as they lost

no i don’t have to admit that. the evidence that free markets work has been documented in many books on austrian economics written over decades. it’s your prerogative if you wish to ignore it.

you sound like you could have ghost written the uni-bomber’s manifesto. he might have hated technology a little more than you, but not by much.

you want things to remain the same. you want to have the same jobs with the same pay. but it doesn’t work like that. we advance in many ways and it’s good for us. what’s bad is socialist policies and excessive spending and taxes that drag the nation down economically.

Are you kidding? Did you not read my claim that:

I’m all for high-tech, if its useful. But, that kind of economy is not going to magically solve the jobs problem . . ..

I use a lot of high-tech in my job, and fully support its development. But I also accept it is not going to solve the jobs problem. This means that if we want high-tech and the good things it brings to reach as many people as possible (e.g., high-tech medical scanning, state-of-the-art operations), then we need a social and economic policy that makes that happen. Inventing stuff and just assuming that it will trickle down good things to everyone or most everyone is just blind faith.

IAT

Not with people like you in charge.

No answer to that, but I asked because while the graph seems accurate for my area at this time, I really do believe that the lower rated (in terms of forclosure troubles) town next to mine has a lot more shadow inventory than the town in which I live.

‘Being more explicit about the Fed’s goal ‘could help anchor inflation expectations at the desired rate’…’if inflation in 2011 were a 0.5 percentage point below the Fed’s inflation objective, the Fed might aim to offset this miss by an additional 0.5 percentage point rise in the price level in future years’

Ha ha! Yes, this conjures up images of fed guys in lab coats, using electron microscopes, eloquent-but-vague speeches and secret wire-transfers to fine tune the world. I’m sure they’ll figure this one out after they’ve counted the number of angels sitting on their pin-heads.

their pretense to knowledge would be hilarious if it wasn’t so disastrous.

So Dudley Do-Right has invented the concept of “inflation shortfalls”. I’d never seen that before.

“inflation shortfalls”. Double speak for “we missed the Vig”. It’s the Juice and the Capo is entitled to it.

What if the Fed authorized everyone to take a marker and add a zero or two on all dollar bills. Ones can be tens unless you are jobless or on welfare and then they can be hundreds. Should help them hit the target with that one.

Is it? I have heard of F&F making originators take the loans back, but not sueing them for the difference recovered after a foreclosure. And while I agree that these two things are similar economically, they must be different when it comes to timing and accounting.

Imagine a loan that was made for $400K and F or F have foreclosed and got $150K for the property after expenses. If a bank is told, “prove to us this loan met our underwriting standards despite all evidence to the contrary or pay us the $250K right now,” they are in a different place than simply being told to take a delinquent loan back on their books and repay whatever they got originally. The delinquent loan probably can’t be valued at par, but it might not be an immediate $250K hit, while the hit to actual reserves might be even higher. And they might be able to put off the full hit for a long while by not moving through foreclosure for a long time. And when they do finally foreclose, it will probably be a bigger hit than just the $250K because the value of the property will have gone down some more.

I don’t know the details of the bank accounting rules, but it seems that at the moment, the timing of the losses is very important to them. And their regulatory requirements are very front and center right now.

‘(TheStreet) — Top regulators appear to have lost patience with banks’ refusal to buy back billions of dollars’ worth of mortgage loans and are threatening to escalate the matter further if a solution can’t be reached…It’s possible that top lenders that are refusing to buy back mortgages from Fannie Mae and Freddie Mac could face legal action as well. Lenders and investors sell mortgage-backed securities to Fannie and Freddie under contracts that include “representations and warranties” about underwriting terms. If any of those terms are breached, Fannie and Freddie, which are overseen by the FHFA, can request that lenders repurchase the debt.’

http://www.thestreet.com/story/10862310/feds-may-sue-banks-over-buybacks.html

‘Big U.S. banks are facing legal pressure to make up for losses tied to pools of soured low-end mortgage loans. In the latest effort, a group of investors in 2,300 mortgage securities worth roughly $500 billion is seeking to force several banks that originated or are now servicing faulty subprime-mortgage loans to repurchase or modify them…The banks and lenders are fighting these efforts, saying they aren’t responsible for the housing crash.’

‘And the outcome is far from certain and could depend on potentially contentious negotiations and litigation that could drag out for years. At issue are the roles of trustees and loan servicers. Trustees are little-known administrators inside banks responsible for overseeing loan pools, or securitizations, on behalf of investors. Loan servicers handle day-to-day management of loans, including deciding how and whether to modify the terms of a loan. Both are charged with oversight of pools that hold thousands of loans.’

‘If a trustee, for example, discovers that a borrower lied when getting a loan, the trustee or loan servicer is responsible for forcing the originating bank to repurchase the loan on behalf of mortgage investors. Trustees enforce warranties made by loan originators when they sell loans to a trust, and oversee loan-servicing firms.’

http://online.wsj.com/article/SB10001424052748704814204575508143329644732.html

“The PTB mistake, as I see it, was that the money they used to ’save’ the system, was…”

Used to pay too many bonuses and to relieve too few troubled assets…

Banks versus GSEs: I like it immensely! Good luck to Fannie and Freddie!!

Better hide the interest rate hike imodium.

No rate hikes needed. From page 58 of the FNM link above:

‘The continued negative impact of the current economic environment, such as sustained weakness in the housing market and high unemployment, has adversely affected the performance of our Alt-A and subprime securities. The unpaid principal balance of our investments in Alt-A and subprime securities was $43.0 billion as of June 30, 2010, of which $31.9 billion was rated below investment grade. Table 25 presents the fair value of our investments in Alt-A and subprime private-label securities and an analysis of the cumulative losses on these investments as of June 30, 2010.’

What this real estate market needs is one of those colonoscopy prep things like Fleets Phospho-Soda®.

Raise mortgage interest rates to 10%. Flush out the crud.

Lmao…. I stated years ago that the Housing Finance and Sales Crime Syndicate needs an enema, pick your variety. 10% mortgage paper would be celebratory.