Bits Bucket For October 8, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Realtors are Liars.
I saw this headline this morning:
job loss numbers not as bad as expected
lmao
ex census only 18k jobs lost, much better than expected.
I was happy with the numbers. Governments cut over 150,000 jobs, net loss 95,000. Private hiring was weakly positive. I think we’re going in the right direction.
Obama pocket vetoed the bill allowing recognition of notarized documents across state lines in a further attempt to stave off foreclosures. Bad.
So should everyone stop paying thier mortgage because the govt will not allow the banks to foreclose?
Only an idiot would pay his mortgage today given the messages coming from the gov/banks.
Why not? It would be just another facet in the farce known as the USA.
Im thinking that too.For all the people just hanging on they will see all this foreclosure bs and quit paying.They are making the problem worse.They have no leadership at all.They are clueless.The only they are doing is printing an borrowing money.
bofa halting all foreclosures in 50 states.So now you get to stay in your home until the election has passed.
the ‘12 election, that is.
dow 11000, pop the bubbly, again.
This bill was essentially another bailout for the banks/loan/Securities industry.
This is a problem of their own creation. Let them fix it, if it can be fixed.
It’s not a ploy to make the foreclosures better or worse. It’s an accounting thing allowing them to carry the foreclosures over to next years books, thus showing a false profit [or less of a loss] then they’ll roll, roll, roll, and they are in the fourth quarter of 2011 before they show any loss on ANY foreclosures of 2010. If they are halting foreclosures to do ‘internal investigations’, then they will ‘investigate’ [read that as 'stall'] ALL foreclosures for the year, or worse since their last accounting period. No foreclosures, no writing those ‘assets’ off the books.
“Obama pocket vetoed the bill allowing recognition of notarized documents across state lines in a further attempt to stave off foreclosures. Bad.”
Why? Because he should allow more fraud?
You cannot fall out of a well.
Realtors are Liars.
So what else is new? I have observed during this down turn many weak, incompetent, unscrupulous businesses are blatantly lying. Bait and switch tactics are rampant. Businesses are also offering unbelievable warranties and promising lower prices. They are doing and saying every thing to get suckers (customers) these days in order to survive.
I am by far one of the most cynical people I know and recently even I’ve been shocked at how blatant some of the desperate behaviors to grab cash have gotten. Basically more and more businesses have moved to pure short term problem solving. I guess shooting yourself in the foot by trashing your reputation is no longer an issue when you’re bankrupt and shutting down the business.
Examples? Maybe we don’t shop or buy much so we’re not tuned into this trend.
quanitative easing seems to be the new black.
Got Gold and Silver!
I guess shooting yourself in the foot by trashing your reputation is no longer an issue when you’re bankrupt and shutting down the business.
Speaking of which, that’s happening here in Tucson. From today’s fishwrap:
Beaudry RV forced to shut down
Story comments reveal a lack of attention to quality control and customer service.
Haven’t you heard? Businesses don’t need customers!
Liars? Not when it comes to their commissions. Banker’s don’t lie either!
Realtors are not liars they just don’t differentiate between ethics and little white lies.
http:www.BuildIdaho.com
Oct. 6 (Bloomberg) — Joseph Murin, former president of government-run mortgage bond insurer Ginnie Mae, talks about the outlook for the housing market. Murin speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)
http://www.bloomberg.com/video/63524428/ - 24k
Housing faces ‘powerful downside risks’
October 7th, 2010, 12:51 am
posted by Jon Lansner
Stabilization of U.S. real estate prices remains fragile and negative macro-financial spillovers could cause a double dip in real estate.
Outlook remains weak, with the latest home price expectation survey showing a 1.7 percent decrease in 2010 and an average 1.8 percent increase in 2011–12.
Double dip in real estate could have a long-lasting impact on the economic recovery.
Unless real estate prices recover materially over the coming quarters, (loan modifications and other workout efforts) may defer rather than avoid future foreclosures, adding to the large “shadow inventory” of properties for sale and hence depressing the recovery of real estate prices for some time to come.
Powerful downside risks to house prices include: low demand for houses; high unemployment; tighter underwriting standards; high rate of foreclosures; high rate of redefault on modified mortgages; rise in “strategic defaults,” borrowers current on payments but walk away because value of property is less than the debt.
http://lansner.ocregister.com/2010/10/07/housing-faces-powerful-downside-risks/83836/ - -
“Shadow inventory” is morphing into “subsidized housing” I’m afraid.
Appears we went from NINJA loans to NINJA housing. No income, no job, no problem. At least for now.
The creators of NINJA loans should have forseen NINJA housing. I regret not getting a NINJA loan, sure would have beat renting.
Price reductions are a net positive. As soon as prices reach inflation-adjusted norms (where’s “the chart”?) people will rush to buy houses that they can afford, pay down over thirty years, and live happily ever after.
I think that the last iteration of the chart over the summer showed that prices were at 2003 levels, with another 10% drop needed to reach historic averages.
“people will rush to buy houses that they can afford”
This is going to be a moving target IMHO for quite a while during the unwind as employer’s move rising healthcare costs to workers, as public employee layoffs accelerate and private layoffs continue, and while we’re on this side of the state and eventual federal tax increases. Then of course as the dollar falls, imports (energy, clothing, much of our food supply) prices will begin to eat away even more of budgets.
Death by a thousand cuts will result if mortgage holders don’t leave a large enough buffer.
Powerful downside risks to house prices include: low demand for houses; high unemployment; tighter underwriting standards; high rate of foreclosures; high rate of redefault on modified mortgages; rise in “strategic defaults,” borrowers current on payments but walk away because value of property is less than the debt.
I think he’s got it all wrong:
- low demand for houses - this has been solved by the “voluntary” foreclosure moratoria by the lenders/servicers (and soon to be mandatory given what I am reading from our elected leaders) which will lead to much lower supply, which is what the powers-that-be need to keep prices rising
- high unemployment - doesn’t matter if you don’t have to pay your mortgage
- tighter underwriting standards - doesn’t matter as much with much lower sales volume
- high rate of foreclosures - this only really matters if the lenders actually take the house away….which they won’t be any time soon
- high rate of redefault on modified mortgages - doesn’t matter if you don’t have to pay your mortgage and/or they don’t take your house away
- rise in “strategic defaults,” - doesn’t matter if you don’t have to pay your mortgage and/or they don’t take your house away
So when you add it all up, I just don’t see where the “powerful downside risks” are, unless you make a living selling or financing homes. Yes, those people will be hurt with lower volume.
Now, if they actually took the houses away and put them on the market, then I would agree that would be a “powerful downside risk” to home prices. But as we all have seen these last few years, that is the last thing the lenders, servicers, government agencies, Federal Reserve, Congress, regulators, et. al. want to have happen…..so it won’t.
This is all a game………a sad, evil, monstrous - but entirely predictable - game.
one quibble..
- high unemployment - doesn’t matter if you don’t have to pay your mortgage
that’s one half of the equation..
the other half is, it does matter if you want to get a loan. high unemployed does affect home sales.
Unemployment doesn’t effect sales?
Seriously?
This stuff would be funny if it wasn’t so pathetic.Just shows how economically illiterate so many so called “experts” are.How does this fool come up with 6-7 trillion? Why not 20-30 trillion, and send us all a million or 2 that way everything would be fixed really well.
Fed Needs to Pump Trillions More Into Economy: Analyst
CNBC.com
The Federal Reserve needs to pump at least $6 trillion to $7 trillion more into the U.S. economy to have any meaningful impact on sluggish growth, former Bush economic adviser Marc Sumerlin told CNBC.
Getty Images
Sumerlin, co-founder of The Lindsey Group, a Washington DC-based economic advisory group, also said that the U.S. would fall back into a recession if the Bush tax cuts aren’t extended beyond this year.
The Fed has hinted for weeks that it is ready to buy up more debt in the credit markets to help spur the economy, which is still recovering from the financial crisis of 2008. The U.S. central bank has already spent over $1 trillion since early 2009 to keep credit markets liquid in what has become known as quantitative easing, or QE.
What are the requirements to become an “Analyst”? I can throw randomn numbers out there too. 5 billion! 10 trillion! 55 eleventy quintapletrillion? Am I an analyst now?
You must be come annointed. If you are annointed with the title of analyst then you become an analyst.
Send me $100 and I will annoint you as an Analyst. Don’t delay, this is a limited time offer.
Sorry combo, your annointer license is expiring. Send me $150 and I’ll re-annoint you as an annointer.
Limited time offer.
I also read palms.
Hand me one-hundred dollars in cash and let me look at your palm and I will say to you: “You are very gullible”.
You will be astounded! There is NO WAY I could have known that!
You have to have a pretty face and double d’s to work for cnbc.
You need a serious face and a suit and must have no long-term memory or conscience.
You need to pass a “bar exam”, although I think it’s a lot different than the one I took.
you need to lie and be able to keep a straight face.
What are the requirements to become an “Analyst”?
You are willing to go to the press and repeat what your propaganda masters have told you to say.
So the Bush tax breaks have been in place for how many years? And it has created how many jobs? And their answer is to extend them? This reminds me of teaching a kid that the stove is hot, except in this case they keep touching the stove to get burned.
Unfortunately, Bush more than cancelled out the effects of the tax cuts with megacorp bailouts, massive spending, and runaway regulation.
And elective wars…
Two truisms:1) It’s Bush’s fault and 2)Don’t get into a land war in Asia. Hey Barry, you own Afganistan.
Operative word being “jobs.”
Conservative/Republicans/tj would argue that Bush created LOTS of jobs with his tax cuts — after all, unemployment was 5.5% under him, right? We lost all those jobs after Obama got into office and hiked taxes and slapped new regulations on the poor businesses and forced us all to buy health insurance, you see.
You have to ask how many GOOD, STABLE, CAREER JOBS were created. Ones where you could reasonably raise a family on. The answer is: Plenty…in India and China.
How do tax cuts create jobs in india and china? Would the solution be to now let the tax cuts expire while in a recession/depression? My taxes would increase while we hand Trillions to the banksters…real nice…let’s kick the middle class in the n#ts one more time.
Tax cuts don’t specifically create jobs in India/China, but they apparently don’t create (good) jobs in the US either.
And Obama wanted to allow tax cuts to expire ONLY on those making over $250K a year. The over 250K crowd presumably will survive the recession/depression just fine provided they took their own advice of putting away for a rainy day should they lose their jobs.
And if you think Obama is raising taxes on everybody, ask the Republicans in the Senate who took the middle class hostage by saying “tax cuts on everyone or no one so nyah nyah nyah,” and filibustering every attempt to keep those tax cuts on the under $250’s.
Tax cuts DID create jobs in Chindia. Companies got tax breaks for offshoring our jobs.
Bet you didn’t know that.
And in current news…
Republicans block ending offshore jobs tax breaks
http://www.reuters.com/article/idUSTRE68R40I20100928
Make all the jokes you want, I think the $6-7 trillion estimate is way too low for what I expect the Federal Reserve to do.
If you can, think back to 3 years ago and try and remember what you thought the Federal Reserve would do in response to the housing-financial crisis. I remember what I thought they were capable of…..and they have gone well beyond what I thought was possible.
This is an important point. Very few people accurately predicted the scope of the Fed response. Things that most assumed could/would never happen in America have happened. Nothing should be considered off the table when thinking about what the government may do next.
Very few people accurately predicted the scope of the Fed response.
I predicted that they would print any amount of money they thought was necessary, without limit, up to and including destroying the “dollar”.
So far, so good (on my prediction, that is).
Notice how most reports about “consumers” cutting back is written in a fashion as to say that’s a bad thing.The last line sums it up, folks living off the house. Those days are long gone, and nothing uncle sugar does will bring them back, period.
Consumer borrowing falls again in August, marking 2 years of monthly drops for credit cards.
WASHINGTON (AP) — Consumer borrowing fell again in August as consumers cut back on credit card use for the 24th consecutive month, the Federal Reserve said Thursday.
Borrowing by consumers declined by $3.3 billion that month. It was the 18th drop for overall consumer borrowing in the past 19 months.
Americans are borrowing and spending less as they face widespread unemployment and uncertainty about their financial futures. The reduced use of credit by consumers is a drag on the recovery, which has yet to show a sustained rebound.
Households are struggling to repair their personal balance sheets after the worst recession since the 1930s. The home foreclosure crisis is grim evidence that excessive borrowing can upend people’s lives.
Always remember who and what pays for the vast majority of media - online, TV, print, etc. Then think of what would happen to any major media source that started making “consumers appear to be spending too much” statements.
CONSUMERS ARE NOT SPENDING LESS. THIS IS A BLATANT LIE.
They are borrowing less, not spending less.
Consumer borrowing relative to GDP
but
Consumer spending relative to GDP
There, you make my point. Personal consumption may be up vs. GDP, but GDP is down overall. Therefore personal consumption is down in absolute terms.
GDP is down overall
No - GDP’s been going up since early 2009.
Thus, so is consumption, at roughly the same rate.
However I do need to correct my one chart some - the recent consumption data is based on Q2 GDP, not on an a higher rate of GDP that will probably be published. Nevertheless - we’re still quite close to a record level of consumption.
I think it’s been pointed out here that consumer borrowing is not declining. Instead the decline is due to the banks’ write-offs of un-collectible debts each month.
Thanks Bill - I forgot about that actually.
Also keep in mind it’s consumer expenditures that we’re talking about being up lately. I don’t believe this includes housing; so it’s not total spending.
??? What were they previously doing with that borrowing, then, saving it? Hahahahahhahaha.
Of course consumers are spending less.
No - they’re not. At least not as a whole.
There’s been a lot of talk on here about people living in yet-to-be foreclosed homes, still spending away on clothes, travel, etc. because they no longer have a mortgage payment to make. I think that, plus stimulus money, is what we’re seeing. I think the combination of those two offsets unemployment and wage cuts.
Keep in mind also - much of this consumer spending is on the high end, due probably mostly to record profits being seen at some of the big banks. E.g. Tiffany’s last quarter revenue was up 9% vs. last year. I suspect that spending for lower-end spending (read: lower and middle classes) is down, but higher-end is up enough to make up the difference and then some.
High end items are up in sales because you can’t hock kmart jeans and Penneys jewelry. You can sellhigh end items on Ebay and to the hock shop and net 50% cash…outside of the BK….
People are so short sighted. If you are lucky enough to be living rent or mortgage free, you should be saving that money for the time when your free housing situation comes to an end. In a few years we’ll hear sob stories about these people not being able to afford the lifestyle their free housing existence allowed them to enjoy.
Why am I responsible with my money, exactly? The system seems designed to punish me for not being a fiscal idiot.
Duration duration duration.
Somebody is slowly turning the spigot.
Of course a good part of the reason they’re borrowing less is the fact that they’re servicing existing debt. And yet we often don’t hear about how that is a “drag on the economy.”
Existing debt must be forgiven if we are going to have a “Great Do-Over”.
Well the plan seems to be to have the government pay it rather than forgive it per se.
“The reduced use of credit by consumers is a drag on the recovery, which has yet to show a sustained rebound.”
So we have to perpetually spend more than we make in order for the economy to thrive?
Would you like gummi-bears and sprinkles on your double-dip?
Yes. The Keynesian model is to flood the country with money to provide the druggie that short term fix to get him motivated to move to the next square on the board game.
If all we had to do was worry about the short term, we have no problem. The real problem though is a significant amount of Americans are now into the “new frugality.”
It’s still debatable whether the smart move is to be 100% invested in precious metals for the next ten years or 100% cash. At least I’m not convinced either way.
IMO, there is a 45% liklihood that we will have a deflationary depression, a 45% liklihood we will have hyperinflation, and a 10% liklihood that the Bernanke / Geithner / Obama economic policies will work. I’m hoping for that 10%. It’s buying the people with the “new frugality” time to get in a more secure financial position. Months or years of living expenses in cash/gold and zero debt.
IMO, there is a 45% liklihood that we will have a deflationary depression, a 45% liklihood we will have hyperinflation, and a 10% liklihood that the Bernanke / Geithner / Obama economic policies will work.
if economic policies don’t change very soon such as letting interest rates rise, then we are very sure to have an inflationary depression which is the worst of all worlds. and imo, there is zero chance bernanke/geithner/obama economic policies will work. we have to reverse them to have a chance..
+1 tj….I agree….
Bill, recommending that we have zero debt would imply that you are a deflationista. Am I correct?
Well, I am not sure. I have three times as much assets in government securities as I do precious metals, but I invest mostly in stock mutual funds, then a fifth of my stock funds in international. Quite a wierd mix. It’s pretty well diversified. Makes me focus on other issues!
It’s still debatable whether the smart move is to be 100% invested in precious metals for the next ten years or 100% cash.
Precious metals ARE cash, so I don’t understand your “debate”.
Or by “cash” were you by some chance referring to “Federal Reserve Notes”, which are not federal, have no reserve, and are not notes? In that case, there is still no debate. They are headed for the trash bin of history, like every other irredeemable paper currency.
And as for this:
10% liklihood that the Bernanke / Geithner / Obama economic policies will work.
You are only off by 10%. There is no possibility whatsoever that those policies will work, if by “work” you mean “avoid a total economic catastrophe”.
Remember, “There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” -Ludwig Von Mises
Maybe the candy-crapping unicorn should introduce us to his cousin, the loan-crapping buffalo.
So that’s where stinky, toxic mortgages come from!
In Colorado,
You really should take a bow for a comment like that. In fact, it’s what we should be asking each and every time we speak with our representatives!
“Is ‘that’ what you’re telling me?” ( CEO’s, whatever… )
“Notice how most reports about “consumers” cutting back is written in a fashion as to say that’s a bad thing”
To be very, very fair about it, I think the reporters are just really proud of themselves that they actually understand the paradox of thrift. Not that it involves any numerical analysis, but it smells a little like math and they never really liked that sort of thing in high school.
I think the reporters are just really proud of themselves that they actually understand the paradox of thrift.
And the one thing they actually understand is wrong. In the correct Austrian view, there is no paradox of thrift, just a change in time preferences enabling users of capital to focus on longer-term projects.
polly’s right, lol. I notice it’s going around.. “why, people just aren’t spending enough! Yes that’s it, if we all just start spending again, we’ll be out of the woods! (you go first)”
An anecdote on consumer spending -
We’re trying to book an auto train from DC to Florida in the upcoming months. The booking attendant says it’s the fullest it’s been in the 20 years she’s been doing the work. Normally of course it’s fairly busy during the winter and spring months anyhow (snowbirds and all that), but e.g. in April it’s already almost full - something she hadn’t seen before.
Plane flights are extremely expensive and booked up more than usual as well (we travel there a lot, so have lots of past data to compare with).
And of course I posted this chart the other day - showing that consumer spending is not down - at all. It’s at a near-record high relative to GDP in fact, at 71.07%. The previous record was 71.08% way back in August of ‘09.
Plane flights are full because airlines have cut back capacity. There are fewer flights that are flying with more of the seats filled. It is very hard to figure out what an observable phenomenon means (hard to book an airplane ticket) if you don’t know all the rest of the data.
Yes this is true.
However I don’t think Amtrak has changed their train schedule. I could be wrong, though I don’t think the agent would have said what she said if so.
Generally the train’s more expensive than flights, since they bring your car; though avoiding having to rent a car can sometimes make it a wash.
Meant to add - I think that while the airlines did cut flights some in early 2009 due to lack of demand - it’s picked back up again since then, and I think demand now is about equal with what it was in 2007-ish, at least the impression I got from reading a newspaper article a few weeks ago.
Where does Amtrak offer a “car ferry” service? I hadn’t heard of that before.
The only service is DC (Lorton) to Florida (Sanford - near Orlando). It’s good for me though since I live near one end and have family near the other end that we like to visit. However I’ve only actually used it once, so far.
Generally it’s geared towards snowbirds, who migrate from the NE corridor to Florida every year, and want to avoid the mostly-boring drive through the south.
I think D.C to Orlando (or maybe Miami?)… something like that. I have relatives that use it.
link
If you are going to spend several months of the year in the warmer weather in Florida and can’t handle a two, possibly three day drive to get there, I’m not sure you should be driving your car at all.
You don’t have young kids, do you?
And it’s not a matter of “can’t handle”, it’s a matter of “prefer”. If I can afford it, and I prefer it, why wouldn’t I choose it?
Keep in mind too that 2-3 days of driving each way is not exactly cheap either. It’s 2-4 days of hotels, restaurant meals (which on the train are included), gas, wear and tear on the car, etc.
If it takes you 3 days to drive from DC to Orlando will make you will feel right at home in Florida.
When I was in college and early 20s a lot of my male NH & MA friends drove their grandparents’ cars down to FL for them and then flew back. Gram and Gramps flew down. It is a long drive for those suffering from hip, back or other ailments.
Packman,
I get not wanting to drive when going on vacation as the time for the overall vacation is limited and you’d rather not arrive tired and with cranky kids who have been locked up in a car for several days. Same issue for the return. I was specifically referring to the snowbirds in your original post. If they are going to be down there for months, and, presumably, are retired and therefore too old to be shuttling very young children, why not drive? Visit a few places along the way. The only real reason I can think of is that a long drive is too much even at a slow pace, and that makes me question whether the person or people in question should really be driving.
Well - personally I disliked the bulk of snowbirds when I lived there (as do most Floridians - except of course for the money they bring), so I’m not one to stand up for them. I’m just stating what is. New Yahkahs generally hate the south too - think they’re a bunch of backward yokels - and want to avoid it any way possible.
And FWIW - even considering myself as a southerner - there really just isn’t that much to see on or near I-95 from Richmond down to Savannah - it’s just a long really boring drive for most folks. To see much that interests most folks - which usually means the coast - you have to take some fairly long side-routes.
As for myself - I very much love to take my time traveling, and see just about everything en route, even on “boring” stretches of road. However being that I work for a living (unlike the snowbirds) and have limited time off, and as I say have to young kids who aren’t willing to put up with that (and a wife who is, but only to a point), it’s not feasible for me to take 3-4 days to get down there; my whole vacation would be eaten up on the trip itself, and we value time with family down there too much.
Also keep in mind that most snowbirds are pretty well off - they can afford the auto train no problem. And even for snowbirds that enjoy scenic driving - given a choice between spending a few days driving through the south vs. a few days driving through the Catskills (if they left later / got back sooner), they’ll generally prefer the latter. Did I mention that most of them don’t like the south?
(I like to tease them with offers of Cheerwine, Sun Drop, boiled peanuts, vinegar-based-barbecue, really really sweet tea, and the like)
It is a long drive for those suffering from hip, back or other ailments.
That too. My Dad in fact can’t really drive any more than a few hours.
For that matter - most snowbirds can’t drive worth a hoot in general. Many of them don’t even learn to drive until they retire! They just take the subway all their life in “The City”, and get rides with friends or family the rare times they venture out. Then when they retire they have to winter in Florida, they “learn to drive”, buy their Caddy and drive real slow.
The things I saw.
According to Rand McNally it’s 867 road miles from DC to Orlando. I’ve driven more than that in a single day when necessary (central Wyoming to San Jose, approx. 1082 miles), although it really knocked me out. I’ve driven San Jose/Boise many times in a day, and that’s around 680 road miles.
I can’t see how anyone could take more than two days tops to drive DC to Orlando.
Yep, I used to do a regular run between San Mateo, CA and Bozeman MT. Occasionally did an overnight in Reno if I wasn’t feeling like driving through the Sierras on the way back.
Cruise control is my best friend.
I can’t see how anyone could take more than two days tops to drive DC to Orlando.
All fine and good, and I’ve done it a few times. It can be pretty nice though to take essentially zero days (the train is overnight - leaves at 4pm and arrives at 9am) instead of 4 days of driving (round trip).
Not all of us are road warriors - especially with a 2-year-old that starts wreaking havoc if he’s not napping by 3pm.
Years ago we did the long trip. We hoped to make it early evening to Bradenton, but in north Florida it was already 6pm, had been pouring rain for two hours, and my then-1-year-old daughter was bawling her eyes out for an hour, and we hadn’t eaten yet. Sorry - but sometimes it’s worth stopping at a hotel for the night, especially if your budget allows.
Let’s hold of on projecting our lifestyle choices on others, shall we? It’s not like I’m screwing taxpayers by spending more $$ for a more comfortable trip.
Highway driving on the east coast is a lot more stressful than in rural areas in the west. Plus there are lots of slow spots around the congested urban areas.
It’s not like I’m screwing taxpayers by spending more $$ for a more comfortable trip.
Ahhh…..Amtrak is HEAVILY SUBSIDIZED by the taxpayer, to the tune of billions of dollars. I’m paying for your Amtrak trip.
Excuse me. Check is in the mail. Would you like for me to refund your tax money that went to pay for the interstate highways that I use, to subsidize the food I eat, the energy I use, the schools I’ve gone to, etc. etc. too?
In other words - b**** to your congresscritter, not me. I’m not using these services under false pretenses. I paid for Amtrak too. At least allow me to recoup some of my money.
Jeez.
Right. Capacity has shrunk in many cases. Hence, with a lower standard of living, we can have inflation.
Who knows, if enough mold grows even housing capacity might shrink.
Haven’t found specific longer-term stats, but at least recently yes - airline usage is growing.
Stepping back to look at the bigger picture - I think the majority of folks here on HBB have been underestimating the impact of the stimuli we’ve been getting. The low interest rates, the government stimulus, the MBS purchases, etc. have had significant effect. This is reflected in consumer spending, in home prices stalling their fall, in unemployment stalling its fall, GDP rising, etc. These things are either flat or rising, instead of falling as they certainly would have been without these stimuli.
(Don’t let this be construed as me actually being a proponent of said stimuli. However what I won’t do is deny its positive short-term effects on the economy.)
showing that consumer spending is not down - at all. It’s at a near-record high relative to GDP in fact, at 71.07%
We’ll if the boomerang kids are living in mom n dads basement instead of paying rent, then they might have “consumer” money to spend, even if they are only working PT for minimum wage or areceiving UE.
FWIW I’m not seeing all the much “consumer spending” in my neck of the woods, but of course that’s only anecdotal knowledge.
What isn’t anecdotal is that car sales are still in the toilet. Maybe J6P is going to Applebees or Chilis, but he sure isn’t buying a new car.
“Analysts” are predicting record auto sales in 2011 due to “pent up” demand that had been building since 2011.
Guess what Mr. Analyst? It’s a lot cheaper to fix up a 5-10 year old car than to buy new one. Would J6P like a new car? Of course! But its dawned on him that he’d rather not be burdened with a monthly payment.
A coworker was thinking of trading in his 10 year old GMC Jimmy (which runs fine). He went to the Subaru dealer and left in shock when he saw that the Outbacks on the lot stickered for $35K. I told him that even if he had to replace both the engine and tranny on his Jimmy it would be a fraction of the cost of a new Subaru.
Frugal is the new black.
Indigent is the new middle class.
Unfortunately indigent is still poor/lower class. What’s happening to the middle class is that it’s losing members.
A run of the mill, typical mid-size car stickers around $30K and up.
A 48 month loan @5%, with 20% down, works out to be about $600 a month. Basically a house payment, for anyone in Flyover USA.
The way the trend is going, you’ll have the choice of buying either a new car, or a house for basically the same price around 2015.
I wonder why we are spending so much “stimulus” money on highway improvements. If current trends continue, and the “used” car inventory gets run into the ground, a lot of people are going to be walking 5-6 years from now. No need to build roads for cars that aren’t going to be there. To say nothing about the hits to state/local budgets because fuel sales/taxes/tickets-user fees will go down also.
Nothing like killing another golden egg laying goose.
I wonder why we are spending so much “stimulus” money on highway improvements. If current trends continue, and the “used” car inventory gets run into the ground, a lot of people are going to be walking 5-6 years from now. No need to build roads for cars that aren’t going to be there.
Richard Florida raises the same question in his latest book, The Great Reset.
He also echoes what we’ve been saying about younger people not being as interested in home and car ownership as their elders.
Well, we could return to the days when it was easy to afford a small house withing walking distance of one’s job, just see any midwestern (former) manufacturing town such as Kokomo, IN. The original (former Crosley Radio) Delco Electronics plant on East Firmin St. (now a greenfield) was right in town, and when I had my work assignment at Plant 1, I used to walk to my apartment for lunch (and watch Perry Mason reruns).
“…..younger people not being as interested in cars…..”
They are plenty interested, actually. Too bad that a decent car, property tax, insurance, maintenance, gas, etc. prices them out of ownership.
Very few kids can afford to pay for a car themselves, by working part time after school……so the parents eat some/most of the costs. I ran the numbers once, and putting her in a car was the equivalent of 1/3 of her take home…….Basically, the fast food joint was getting a $2.50/ hour labor subsidy from the Bank of Mom and Dad.
When you include the costs of transportation, etc. and the effect on their grades when they work vs.study, it makes almost no sense for your high school kid to work.
It happened in 1985…pent up demand saved Chrysler.
Face it, cars do eventually wear out/can’t pass inspections. Very few repair shops will finance a $4k car repair bill.
And very few people will put out $2k to fix a car that’s worth $2.5k.
book an auto train ??
What is a “auto train” ??
see above
Was this the inspiration for the old SNL skit? I remember Bill Murray singing a Star Wars song.
Americans are borrowing and spending less
NO NO NO NO NO. WRONG.
Consumers are borrowing less, yes.
They are very much NOT spending less. They are spending in record numbers, in fact.
Cripes - the MSM is just outright lying now, to try to get people to borrow more.
where did they get that greenish toilet paper?
1) Raiding the 401K?
2) Defauting on the CC’s and are now paying cash?
3) Stopped paying the mortgage?
4) Filed BK? (similar to #2)
Never put anything past the bizarro world we now live in.
What if everybody stopped paying their mortgage? What would happen?
“What would happen?”
Good question. Maybe what we should be asking is what percentage of boomers/retirees ’should’ have a fully paid off mortgage by now?
What a shot of Love ‘that’ would have been huh? But no…
I don’t understand how the hell personal consumption could be up given that borrowing en masse has slowed way down. I looked at the BEA.gov site and personal consumption shows to me as relatively flat in absolute terms in the last few years.
Here’s an updated chart - the one I posted above is based on some older GDP numbers (including extrapolation of Q2 and Q3).
It’s not quite as close to the record as I presented, but still high relative to recent years, and especially high relative to historical norms.
Don’t underestimate the effect of millions of people who are now living mortgage and rent free, due to the foreclosure backlog or back living at home with Mommy and Daddy.
They are spending more because prices have gone up.
<”Notice how most reports about “consumers” cutting back is written in a fashion as to say that’s a bad thing.”</I.
That’s because as far as the FIRE sector is concerned, it’s THEIR money, not yours.
Neocons are the same way.
Cash-strapped US state cancels massive tunnel project
NEW YORK (AFP) – The governor of cash-strapped New Jersey on Thursday terminated work on a multi-billion dollar train tunnel linking New Jersey and Manhattan, one of the country’s largest infrastructure projects.
Governor Chris Christie’s office said the project, which has been in the planning for two decades, said the project was expected to substantially exceed its current budget of 8.7 billion dollars, reaching at least 11 billion dollars.
Following a 30-day review of the project, his office said “the ARC project will be terminated and staff will immediately begin an expeditious and orderly shutdown.”
“The ARC project costs far more than New Jersey taxpayers can afford and the only prudent move is to end this project,” Christie was quoted as saying.
Good move, although I am an admirer of mass transit. It’s the economy. If the people of New Jersey and Manhattan want that tunnel, they should hold one helluva bake sale, but the funding should not be forced - at gunpoint - out of people, as in taxation.
The NJ “big dig” boondoggle comes to an end.
Many political hacks and unions will be crying.
A $3 billion cost over run ALREADY - with the project not expected to be completed to 2018.
I can only imagine what it would have REALLY would have cost.
I thought the “big dig” boondoggle was in Boston. DId NJ have one too?
You know how the NYC crowd is. They are THE CITY.
Anything Boston does, they can do better…..even a giant Charlie-Foxtrot.
That’s clusterf@ck for those that may not be familiar.
But X-GS, doesn’t this only go hand in glove w/ your post above? Building a tunnel, for… what!? Try pedi-bridge.
Its a subway/mass transit tunnel…..as I recall, there is only one rail tunnel under the Hudson, and it is at max capacity now.
If it means that the banksters have to spend more time commuting, and have less time sitting in their offices/cubicles figuring out ways to rob the rest of us, I’m all for giving it the axe.
In fact, let them go to work one day, and blow up all the existing bridges and tunnels (and phone lines, internet connections) about 10 am.
If it means that the banksters have to spend more time commuting, and have less time sitting in their offices/cubicles figuring out ways to rob the rest of us, I’m all for giving it the axe.
In fact, let them go to work one day, and blow up all the existing bridges and tunnels (and phone lines, internet connections) about 10 am.
So THAT’s the explanation of this dastardly plot:
“The FBI stopped a terrorist plot to blow up the Holland Tunnel and, ah, flood Wall Street with the millions of gallons of water that would somehow make their way through the tunnel (without paying the toll, mind you) and bash their way out of the tunnel and up and down that Street of Walls.”
http://www.yourish.com/2006/07/07/1597
Illinois could use a man like Chris Christie.
Gallup Finds U.S. Unemployment at 10.1% in September
Underemployment, at 18.8%, is up from 18.6% at the end of August
by Dennis Jacobe, Chief Economist
PRINCETON, NJ — Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September — up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month — the unemployment rate was 9.4% in mid-September — and therefore is unlikely to be picked up in the government’s unemployment report on Friday.
This news:
1. Could cause the stock market to explode on the upside because weak jobs data indicates the Fed will be forced to ease some more thus the economy will be stimulated and thus lemming investors will be pursuaded stocks are now a great buy.
- or …
2. Could cause the stock market to drop by many points because a weak jobs report is bearish on the economy and thus is bearsish for stocks hence at current prices stocks are overvalued.
I vote for number 2 because we already had number 1 a couple of days ago. A couple of days ago lemmings bought on rising stock prices, now it’s time for them to sell on falling stock prices.
Suck ‘em in one day, shake ‘em out a few days later. The beat goes on.
I that that is largely determined by whether those with money think the market is safe. For the past two or three decades, aggregate stock market levels have had more to do with anticipations of how much money was going to be funneled into the equity markets and less to do with estimates of future profits. This is classic more money chasing relativly fixed goods leading to higher prices inflation, but NOT inflation as measured by CPI. As the financial services “industry” has come to represent a greater part of the economy, and wealth has become more concentrated by those who invest it rather than spend it, less and less of the aggregate money supply has been bidding up the prices of consumer products and wages as opposed to searching for yield.
After the dot bomb bust, the “big pile of money” inflated the housing market through MBS which were regarded as “safe as houses,” by comparison. So where will all that money slosh next? Metals? I just can’t predict what the next bubble will be, but even with all the losses yet to be realized, there’s still alot of money looking for a new home, and it’s unlikely to find it’s primary mission bidding up the CPI.
QE 2 is gonna prop up the markets according to economists at cnbc.Its never been a better time to buy stocks.Even warren buffet said so.
The stock market is the tachometer of the economy-manipulation engine. It merely represents the effort currently being put forth to make this pig fly. Can it be traded? Maybe. Can it be trusted? Absolutely not.
I think they’ll ignore the Gallup numbers because they are “unofficial”. The the gov’t numbers come out, they will be much rosier, and probably less trustworthy.
The American version of Pravda
I’ve seen these “American Opinion” bookstores in various cities. Do you think their polling results should be trusted more than the government numbers?
Who knows?
I would think that Gallup would be somewhat reliable, but maybe they have an axe to grind as well.
Index Futures:
S&P 500 1,153 -3.40 -0.29%
DOW 10,873 -39.00 -0.36%
NASDAQ 2,006 -8.25 -0.41%
The futures market seems to favor your explanation number 2. Perhaps growing concerns expressed in the international news over the prospect of a currency war have effectively reduced the Fed’s scope for playing the QE2 card?
One thought that crossed my mind is that the Fed may have brought up the prospect of QE2 as a back-door means of strengthening the dollar, under the full realization that (1) a backlash among trading partners would make it difficult to execute; (2) the alternative would be to not follow through on announced plans, resulting in dollar-strengthening asset price declines (stocks, gold, etc) which nobody could have seen coming.
Checkmate!
P.S. The ongoing prospect of stealth intervention could render the above discussion moot.
Speaking of intervention, what a difference a few minutes can make to the future outlook!
Index Futures:
S&P 500 1,156.40 -0.10 -0.01%
DOW 10,910 -2.00 -0.02%
NASDAQ 2,016 1.50 0.07%
I keep asking myself why is all this govt printing press money good for the country?As I see it we keep going into debt over and over.Everytime the economy tanks all they do is print more money and borrow.They are not fixing the underlying problems.This is unsustainable model.All they talk about is QE 2 on cnbc and great it is for stocks.Borrow until you cant borrow anymore?
All this data is lovely, but the analysts in NY love to speculate about foreign affairs, too. World Bank meetings this week and China is peeved at one of their dissidents getting the Nobel Peace Prize. Business medial hyping how horrible a trade war would be and that it the next - thing - that - could - happen - after yelling about currency manipulations doesn’t do anything useful. No way to figure out who or what they are going to decide is more important.
This is a science?
In other news, I worked really late last night and I’m pretty sure I saw Rahm Emanuel walking back toward the White House at 10:30 last night as I was walking toward the Metro. He isn’t as short as everyone seems to think he is.
“This is a science?”
They don’t call it the dismal science for nothing. Kind of like how garbage men are “sanitation engineers.”
Bloomberg is reporting that
[t]he U.S. lost more jobs than forecast in September, reflecting a decline in government payrolls that shows the damage being done by rising fiscal deficits.
Employers cut staffing by 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a 5,000 drop. The unemployment rate unexpectedly held at 9.6 percent.
Do I get an HBB demerit for posting a quote with “unexpectedly” in it?
Linkey
http://finance.yahoo.com/news/Employers-in-US-Cut-More-Jobs-bloomberg-126013039.html
I suspect our economy was looted the very same way.
“Instant Karma’s gonna get you, gonna rap you upside the head…”
With the help of our hidden cameras, ABC News’ “What Would You Do?” recreated a bike theft in a neighborhood park to see what ordinary people would do if they witnessed a bike being stolen by a young teen.
The experiment used two actors - one white and the other black. Check out how differently people responded to each actor.
http://cottonfieldmovement.blogspot.com/
Guy uses $300 worth of tools to steal a $50 bike.
Stealing a man’s bike is like stealing a cowboy’s horse. Disgusting behavior, why can’t they use those tools and skills to steal stuff from the rich?
Time for Judge Dredd?
OK, it’s not even Halloween, and already the local chain stores are setting out their Christmas merchandise. How sick is that?
Sick, or desperate?
Desperate is right. I mean, there’s one chain store that put out the Christmas stuff BEFORE even the Halloween stuff. It’s depressing.
I mean, why don’t they just give up and put it out at the beginning of January and leave it there all year round?
I’d be willing to bet there’s some psychological merchant strategy that says putting out Christmas stuff gooses overall sales somehow.
my xmas budget is 100.00.
Dude,
Really? That is pretty frugal. I have 5 kids and 6 adults on my list, so that wouldn’t cover me. Two of the adults are already taken care of with a gift certificate to a restaurant that they love but can’t afford in the normal course of things. That includes their birthdays too, so it was a substantial gift. My brother and sister-in-law get their family membership to the museum renewed. Parents are still an issue, but I’ll figure that one out - maybe some movie passes. Please note that none of these gifts involve “stuff.” The kids will end up with stuff, but I just don’t see doing that for the adults anymore. Makes no sense at all. Why would I pick out a hat or a sweater for a rational adult who has tastes that differ from my own?
Please note that none of these gifts involve “stuff.”
I’m with you, polly. If I could put a stuff-repelling Kryptonite shield around myself, I would. I don’t want any more stuff.
I don’t want any more stuff.
How un-American of you…….
Michaels has been doing it since late August; it will be the final test.
Michaels? The craft store?
Yup; THE craft store. You had to look for it, but, it was there, for sale, in August.
It used to be that craft catalogs would have Christmas stuff year-round, but that’s because they made kits, and you needed time to make the stuff yourself. Not anymore; now it’s all ready-made. The textbook example of cheap Chinese junk. Of course the best way to decorate for the seasons is to use actual stuff from the outdoors for a few weeks and then chuck it into the compost. You’re guaranteed to be in-season.
Some stores have a permanent Christmas section in an out-of-the-way corner. I’ve seen it at a few Kohl’s and Macy’s.
Am I the only one who consistently buys Christmas stuff after the holidays? People are always looking for the best bargain, which they dont realize is on Dec. 26th when all their junk is 75% off.
I always buy decorations and christmas cards after the holidays. Always 75% off - great deals. And now I’m old enough that I haven’t had to buy decorations for the last couple of years. Our old dog used to break a few every year (God rest his soul) but our new dog stays away from the tree.
The Home Depots near me started putting their Christmas stuff out in July. They had the whole section full by mid-August.
Is it those cheap decorations from china?
Oh yes.
Christmas decorations used to be slowly accumulated over the years - and treated like family heirlooms. Different ornaments from different years told stories - like births, engagements, marriages, etc.
Hopefully some families treat them that way still, and take a pass on the big boxes’ crap. Now more than ever.
Yes John, it is still that way in our home. The theme trees are beautiful but somehow to me they seem to have the soul of the fake metallic trees of the ’60s. The kids love taking the ornaments out of the storage box each year and going down memory lane.
I have several ornaments I made in chidhood from kits. My husband has several ornaments of his childhood church and hometown. It is a celebration of family.
Saw the same thing on Target that I go to. Right after july 4.
packman,
I just think it shows a total lack of confidence on the part of the retailers. They’ve gotten burned holding merchandise over and nobody wants to be the bag holder storing items that won’t sell again til next year.
I’ve also noticed fewer selections among more commonly used household items. To that I can only say, about time!
I’ve also noticed fewer selections among more commonly used household items. To that I can only say, about time!
Fewer SKU’s and lower overall inventory levels is going to be the norm for most “brick and mortar” retailers from now on…..
Businesses have to scramble and come up with new strategies to maintain sales. The sales and marketing professional are finding it hard to maintain sales following the old tried and proven methods that worked easily when the consumer was flush with borrowed cash. Our observation has been that customers are taking a longer time to make purchasing decisions. Business can not county on a regular flow of sales. They are desperately scrambling for new methods and ideas. There are so many new seo, xyzproduct.com, xyzproductcalls.com, lead generation sites that are cutting into the traditional marketing/advertising methods also. Customers are also looking for deals. imho
“taking a longer time to make purchase decisions”
You’re… you’re.. not implying we’re actually ‘thinking’ about it before whipping our wallets out are you? I certainly hope not.
Yeah, we’re -all- looking for fresh ideas, even those in Gov. My daughter tells me they’re forever cooking up schemes to show how indispensable her little dept. is.
Unemployment Probably Rose as U.S. Companies Limited Hiring
Unemployment probably climbed in September for a second consecutive month as slower U.S. growth prompted companies to limit hiring, economists said before a report today.
Economy likely creating some jobs, but not enough
Companies likely added jobs in September, but not nearly enough to reduce unemployment rate
WASHINGTON (AP) — Companies likely added a small number of jobs last month, but hardly enough to bring much relief to the nation’s 15 million unemployed.
On Friday, the Labor Department will issue the final monthly jobs report before the midterm congressional elections. The report is likely to leave President Barack Obama in a precarious position: Democratic members of Congress will face voters with unemployment likely above 9.5 percent.
Economists estimate private employers added a net total of 75,000 jobs in September. But they expect that number to be offset by the loss of an equal number of temporary Census jobs. Overall, economists expect no change in the nation’s total payrolls.
Unemployment probably climbed in September for a second consecutive month as slower U.S. growth prompted companies to limit hiring, economists said before a report today.
The jobless rate rose to 9.7 percent from 9.6 percent in August, according to the median estimate of 83 economists surveyed by Bloomberg News. Payrolls excluding government agencies rose by 75,000, while a drop in public staffing as the decennial census wound down caused total hiring to decline for a fourth straight month, the report may also show.
Remember that the number needs to be +125K a month or something fairly large like that just to absorb the new members of the work force. Though I imagine that is not evenly spaced out over the year at all, and that number may have been set when immigration (legal and illegal) was higher.
Well of course illegal immigration is largely driven by the availability of jobs so….
And the availability of handouts.
At our local high school almost 50% of the guys volunteer for the military as there are no other options for them besides minmum wage PT jobs. The military is in a postion where they can now pick and choose who they will accept and they are becomeing quite picky. I suspect that most of these boys would have wound up in some construction related trade during the bubble.
In Colorado,
You sure the number is that high? Here in OR we’re not even near that. Maybe 15%, but you’re right, the recruiters reject most applicants.
It’s what the local paper reported last year. We’re pretty redneck out and I’m sure a lot of the guy at the HS think of a gig in the military as “butt kickin’ fun”
The military is in a postion where they can now pick and choose who they will accept and they are becoming quite picky.
Not only that, they’re not afraid to discharge recruits who aren’t making the grade.
Why is anyone even concerned about jobs? This is a jobless recovery, dammit.
economists are saying that the jobs numbers are better than expected, wtf?
Probably seems to be economists new word of the year.
Haven’t they all been “jobless” lately, at least when the bubble jobs (Realtor, Mortgage broker, construction worker) were factored out?
10% UE means 15 MILLION people are out of work. 4% UE is considered acceptable and normal. That means a constant 600,000 people in the UE line at any given time. (based on 150 MILLION workforce)
Here’s the fun part:
This means that 14.4 MILLION people need a job. A full time job. At 75,000 per month, it will take… 192 months to get everyone back to work. Or 16 years.
Recessions over the last 30 years have tended to come around roughly every 6 years, so that means… the government is lying every time about UE numbers.
So in order for everyone to have a job before the next recession starts, we need to create 200,000 per month.
Anyone here expect that to happen? Ever?
I’d like some opinions on something I’ve found researching properties here in Maricopa county (Phoenix).
Under our capitalistic system all property must be owned by someone/thing, no?
But here are three examples of properties the county assessor states have “no owner”.
http://www.maricopa.gov/Assessor/ParcelApplication/Detail.aspx?ID=117-04-090
http://www.maricopa.gov/Assessor/ParcelApplication/Detail.aspx?ID=509-10-202
http://www.maricopa.gov/Assessor/ParcelApplication/Detail.aspx?ID=160-44-010-A
Governments and NGOs are listed elsewhere as owners, so that can’t be the answer; any ideas that don’t involve contacting any level of government- I like to keep my head down.
Squat, and see if anyone shows up.
You could research the properties at the Recorder of Deeds office, no?
It’s just an error in the assessor’s records; you can find out who owns each of those properties by pulling up the tax bill.
http://treasurer.maricopa.gov/parcelinq.htm
Ah! Thanks!
Click on the Tax Information link
Then click on the Address link.
Bob is your uncle!
I wonder how many people in the suburbs of some major metropolitan areas shifted from one neighborhood to another during the bubble. When I moved to this area south of Tampa back in 2000, it was a sleepy backwater composed of three towns. Nobody much wanted anything to do with it and I liked it for that reason. Quiet, but still a reasonable commute to Tampa.
Fast forward ten years later and it’s a mess, courtesy of the bubble. The route 301 corridor used to be mainly farmland or vacant land. It has literally exploded with development and the traffic sucks profusely. I had high hopes that we’d see some of those ghost developments around here, but apparently, no such luck. There’s been a population and demographic shift and it looks like they’re here to stay for a while.
I wondered where all the dang people came from and have found that many re-located from other areas of Tampa Bay, one of them a notorious gang area. No doubt the residents were looking to get away from the gangs, but it appears the gangs followed them. There was a major incident a couple of nights ago involving gang members shooting each other up. Some poor old lady on the news said she’d have to move elsewhere to enjoy her retirement.
But it would be interesting to see what the areas from which many of the residents around here moved look like now.
Diogenes, been to Town ‘n Country lately?
And just why did the gangs follow the residents, you ask? HA! That’s because many of these residents have extended families which include gang members. But don’t expect any of the parents to own up to that. Oh, no. Their kids could be tatooed out the wazoo, have bedrooms loaded up with weapons, drug stashes in the refrigerator, stay out all night with their buddies, etc. and the parents would insist that their kids are good kids, it’s everyone else’s kids who are gang members, not theirs. They could see their kid with a gun in his hand, standing over a dead body and they’d INSIST their kid is a good kid and had nothing to do with it. I swear, that’s the mentality
Yeah, they moved here to get away from the crappy hood and brought it with them. Wherever you go, there you are.
Hell is other people.
Hell is Section 8 housing.
palmetto,
So true, here outside of Portland, OR we get all kinds of yuppies w/ zero control over their kids so they move out to distant b/r communities so their kids “won’t be influenced”.
Then all they do is teach the other kids “how we do things in the city”. Of course they bring their drug connections w/ them. Sad.
DinOR,
You’ve described the migration of Californians and New Yorkers. They leave the cesspool of the high tax, high regulation, high cost of living states for places like Florida, Texas, Arizona, Oregon, Colorado. And the first thing they do when they get there….register as Democrats and vote for the very same type of people that destroyed their home states.
And just why did the gangs follow the residents, you ask? HA! That’s because many of these residents have extended families which include gang members. But don’t expect any of the parents to own up to that. Oh, no. Their kids could be tatooed out the wazoo, have bedrooms loaded up with weapons, drug stashes in the refrigerator, stay out all night with their buddies, etc. and the parents would insist that their kids are good kids, it’s everyone else’s kids who are gang members, not theirs. They could see their kid with a gun in his hand, standing over a dead body and they’d INSIST their kid is a good kid and had nothing to do with it. I swear, that’s the mentality
You’ve nailed the Tucson gang mentality, palmy.
US population 2000: 281 million
US population 2010: 305 million
That’s a lot of extra people. And some of them decided to live in your neck of the woods. It’s not really that big of a mystery.
SOL time for Democrats. And good luck to Eddie with his DJIA > 12K by year-end 2010 prediction!
95,000 jobs vanish
The U.S. labor market sheds more jobs than expected in September, as state and local governments lay off workers during the month. Private-sector nonfarm employment, though, expanded by 65,000.
Looks like the stock market shrugged it off, again!
I swear, and asteroid could hit the Earth or Yellowstone could erupt and kill 50 million people in the western US, and the market would shrug it off.
If Yellowstone erupted, it would probably take out the east coast too.
It’s 1:15 PM and the Dow is above 11K. Where’s Eddie?
Why? Is he going to erupt too?
Dow up 50 after the jobs report.
Care to try again?
Hah! Right on schedule. Where you been the last couple months?
Ah, there you are.
Duration duration duration.
The only stock market number I’m intersted in is DOW on the evening of November 3.
Any gains due to the GOP tsunami have already been priced in. Aside from the delusional Kos/msnbc crowd, everyone knows the GOP will win big on Nov 2.
For the record I am predicting 55 seats in the house and 9 in the senate.
PB - you/we made the mistake of allowing Eddie’s prediction in nominal ($$ denominated) terms, not in real terms, like compared with assets like gold, or even other fiat currencies. Heck even vs. the crappy Euro the DJI is actually down big since Eddie’s 12k prediction; let alone against stronger things like the Yen or gold.
How does the 0.0015% APY checking account so many of you have your money in fare in terms of real dollars?
At least we have money to keep in crappy money market accounts, loudmouth loser.
Nothing is going to stop the Wall St. from their year end bone us’s even if they have to swap stocks back and forth and put in extra cooling for the program trading servers until Dec.!
IMF Calls For A New Round Of Huge Bank Bailouts
The IMF is calling for a huge new round of bank bailouts.
As the Telegraph noted yesterday:
Lenders across Europe and the US are facing a $4 trillion refinancing hurdle in the coming 24 months and many still need to recapitalise, the Washington-based organisation said in its Global Financial Stability Report. Governments will have to inject fresh equity into banks – particularly in Spain, Germany and the US – as well as prop up their funding structures by extending emergency support.
Prop up their funding structures?
That’s lord master speak for “you and me and our tax money.”
Does your state have a money shortfall? Why not demand that illicit drugs be legalized and taxed?
Harvard economics professor Jeffrey Miron thinks California residents should not only approve legalizing marijuana when they go to the polls next month, but he says that should only be the beginning.
All drugs should be legalized nationwide, Miron says. Pot, cocaine, LSD, crystal-meth — you name it.
“Legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition. Of these savings, $25.7 billion would accrue to state and local governments, while $15.6 billion would accrue to the federal government,” Miron claims in a recent Cato Institute report he co-authored.
~ Just say”Yes.”
They could hand the drugs out in schools in bowls next to the condoms.
“All drugs should be legalized nationwide, Myron says. Pot, cocaine, LSD, crystal-meth - you name it.”
Don’t forget paint-thinner and glue.
But we need age restrictions: Nobody under the age of twelve should be allowed to use any of this stuff without permission from their parents.
Birth control pills used as sleeping pills?
Slipping a birth control pill into your teenager’s orange juice each morning may help you sleep at night.
It would be an interesting study to see the what the increase in taxes collected when prohibition was ended. And tack on the costs of alcoholism that society must deal with since then.
Obviously, today, these taxes are not helping with the massive local/state deficits (although one could argue that has more to do with insane spending levels. But what would stop even more insane spending from the taxes collected on meth and crack?).
Of course there was no alcoholism during prohibition.
But prohibition did create the mafia which we fought for the next 60 years.
2banana is anti-government unless it stops people from doing things he doesn’t like.
2banana is anti-government unless it stops people from doing things he doesn’t like.
You mean things like:
murder
stealing
treason
fraud
rape
kidnapping
etc.
FYI - I never said I was against legalizing drugs. I just don’t see it as the “money maker” people think it is going to be. And if that is the ONLY reason to legalize it, then maybe we should rethink that position.
” no alcoholism during prohibition”
Ha ha, funny. It almost sounds like you think people actually didn’t drink.
I hope the marijuana legalization proposition passes in California this fall. We’ll grow a plant in our back yard. Anybody have a recipe for brownies?
It’s funny, but I declined medical marijuana during the eight weeks of nausea I experienced while being treated with a chemotherapy drug well known to cause nausea. I took conventional antiemetic drugs in the 48 hours after infusions, but I decided that I preferred nausea to feeling goofy. I always thought of pot as being a pleasant drug, but definitely recreational. Alcohol makes me sick and high, but pot just made me high.
Luckily my new chemo drug doesn’t make me nauseated, just tired, weak and achy.
REHobbyist,
Good to hear you’re making a recovery! Hang in there man.
I’d railed about this for years. Do you know how many of our daughter’s friends learned to get high w/ their parents? Just sad. Further, I’d beg to differ in that, while we usually made alcohol avail. to the kids growing up, you can always switch to water, soda etc.
Prohibition was ended due to a need for an increase in government revenue and that it was impossible to enforce.
It’s different today.
“Legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition.”
Cops don’t like layoffs.
Then after a Saturday night out, driving would really be an adventure.
I’d rather demand that political favor contracts be canceled and given to whoever was REALLY the lowest bidder.
Do growing concerns over the prospect of a currency war limit the Fed’s scope for playing QE2, or do they do they exercise laissez faire monetary intervention regardless of what U.S. trading partners say or think?
Oct. 7, 2010, 12:58 p.m. EDT
IMF chief warns about lack of cooperation
Currency war is bad for global economy, Strauss-Kahn says
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — Cooperation on the global economy is “decreasing,” the head of the International Monetary Fund said Thursday, warning countries about the risks of a so-called currency war.
Momentum to cooperate on economic policies is “not vanishing but decreasing,” IMF managing director Dominique Strauss-Kahn told reporters ahead of the annual meetings of the IMF and World Bank. He said that falling cooperation is a threat, because “there’s no domestic or national solution to [a] global problem.”
Strauss-Kahn added that some countries consider their currency a “weapon,” and that the “currency war” being talked about by many is a negative thing.
China, Europe, U.S. bicker on yuan
The U.S., Europe and China stepped up their bickering over the valuation of China’s currency, prompted by fears that competing foreign-exchange policies could hamper the global economic recovery. John Bussey discusses.
“That’s certainly not for the good of the global economy,” he remarked in a press briefing Thursday morning.
…
State and local government layoffs will only increase. They can’t print money like the Feds can…
AP: Economy loses 95K jobs due to government layoffs
AP via Google News | October 8, 2010
WASHINGTON — A wave of government layoffs last month outpaced weak hiring in the private sector, pushing down the nation’s payrolls by a net total of 95,000 jobs.
The Labor Department says the unemployment rate held at 9.6 percent. The jobless rate has now topped 9.5 percent for 14 straight months, the longest stretch since the 1930s.
The private sector added 64,000 jobs, the weakest showing since June.
Local governments cut 76,000 jobs last month, most of them in education. That’s the largest cut by local governments in 28 years. And, 77,000 temporary census jobs ended in September.
There is that WORD again - but in Canada!!!
Canada unexpectedly loses jobs in September
Montreal Gazette | October 8, 2010
OTTAWA — The Canadian economy unexpectedly lost 6,600 jobs in September, Statistics Canada said Friday, as the country’s recovery faltered after an initially strong rebound from recession.
The jobless rate declined to eight per cent during the month, from 8.1 per cent in August, “as fewer people, particularly youth, participated in the labour market,” the federal agency said.
Economists had expected between 10,000 to 12,500 jobs would be created last month, following a gain of 35,800 in August, with the unemployment rate staying at 8.1 per cent.
Douglas Porter, deputy chief economist at BMO Capital Markets, said “there is no denying the fact that employment conditions have cooled markedly from the piping hot pace seen as recently as the spring.”
After belt tightening for the past two years our local city gov’t is giving the all clear sign. No hiring expected, but they are going to cancel the furlough days that have been in place for the past two years.
Wouldn’t this action constitute a felony?
Bloomberg
Man Who Had No Mortgage Faced Foreclosure Anyway
October 07, 2010, 9:18 PM EDT
By Ann Woolner
Oct. 8 (Bloomberg) — Jason Grodensky paid cash for a South Florida home last December. With no mortgage and full ownership, he had no fear of foreclosure.
And yet, Bank of America foreclosed on the house seven months later, according to the South Florida Sun Sentinel. The court-ordered foreclosure took place July 15.
Grodensky tried for months to get answers from the lawyers and lenders involved. He got nowhere until he contacted the newspaper which started poking around. Now, Bank of America says it will straighten out the mess at its own cost, the Sun Sentinel reports.
Banks that are suspending foreclosures in much of the country call mistakes in paperwork mere technical errors. This implies that the foreclosures, or most of them, were otherwise on solid legal ground and that any mistakes were the unintended result of trying to handle too many cases in too little time.
No harm. No foul, right?
Not true. A great deal of harm has been inflicted, and not just on the rare homeowner wrongly judged to be delinquent.
…
How can I foreclose on the house of the CEO of BoA by mistake?
That would be alot of fun.
I promise to clean up the mess I make at my expense (maybe)…
This is the sort of crap that happens in the “new” Russia. I recall nychick mentioning this sort of thing, people filing paperwork against property without any real claim.
But how did BofA even get this guy’s name & address? I mean he paid cash, or do the banks just assume they own ‘everything’ in Amerikah?
i don’t know, but maybe he bought the property from an FB BOA short sale?
“But how did BofA even get this guy’s name & address?”
IIRC, the original owner was in pre-forclosure with BofA but sold the house in a short sale to the current owner before the foreclosure was completed. BofA’s right hand didn’t know what the left hand was doing, so while one department completed a short-sale on the house, with a complete lack of communication, the other department continued with foreclosure proceedings.
IIRC, the original owner was in pre-forclosure with BofA but sold the house in a short sale to the current owner before the foreclosure was completed. BofA’s right hand didn’t know what the left hand was doing, so while one department completed a short-sale on the house, with a complete lack of communication, the other department continued with foreclosure proceedings.
If I were this all-cash-buying, almost-foreclosed-upon guy, I’d lawyer up and sue the bee-jabers out of BofA.
Y’know, for pain and suffering. Or something like that.
“…or do the banks just assume they own ‘everything’ in Amerikah?”
Is this a trick question? Because they do.
“Oct. 8 (Bloomberg) — Jason Grodensky paid cash for a South Florida home last December. With no mortgage and full ownership, he had no fear of foreclosure.
And yet, Bank of America foreclosed on the house seven months later, according to the South Florida Sun Sentinel. The court-ordered foreclosure took place July 15.”
“the house of sand and fog” and I thought it was fiction
B of A suspends all foreclosures in all states and the housing bubble bust drags on I am in no hurry to buy a house
a) can get forclosed on as a mistake
b) not sure of the title
c) have no idea what a fair price is
d) job insecurity might have to move
That’s what title insurance is for. If bofa foreclosed on him, my guess is he failed to purchase the insurance or his title company did a piss poor job for doing a title search.
Now, Bank of America says it will straighten out the mess at its own cost, the Sun Sentinel reports.
Well he can sit back and relax now, now that they are going to “solve” what Bank of Oppoortunity created in the 1st place. I’m sure this “mistake” created no stress for Mr. Jason Grodensky, none whatsoever.
“Wouldn’t this action constitute a felony?”
You have problem with Corporate Communist Capitalism©®™, comrade?
How is it again that eradicating a failed business model could harm the financial system?
In middle of foreclosure chaos, local firm keeps popping up
By Brady Dennis and Ariana Eunjung Cha
Washington Post Staff Writers
Friday, October 8, 2010
As courts across the country face a wave of foreclosures, a name little known to the public has cropped up on thousands of court filings as a stand-in for prominent banks, lenders and mortgage servicers.
Mortgage Electronic Registration Systems (MERS), headquartered in a nondescript office building in Reston Town Center, has flourished quietly over the past decade, saving financial firms hundreds of millions of dollars by helping them avoid the time and expense of filing mortgage documents and paying fees each time a loan changes hands.
Its motto: “Process loans, not paperwork.”
But lawyers throughout the country increasingly are challenging that approach, questioning whether the company has the legal right to foreclose on homes, on the grounds that it doesn’t actually own mortgages. And the argument is gaining traction with some judges.
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Yet without proper paperwork to establish ownership, banks and other lenders have also faced legal difficulties with seizing homes when borrowers default. The result in some cases has been the use of flawed and fraudulent documents in foreclosure cases.
Concerns about improper paperwork have prompted some of the nation’s largest lenders and several states to halt foreclosures until companies can provide proof that they own the mortgages and have a right to seize the homes.
The MERS headquarters is tucked amid chain restaurants and retail stores near Dulles International Airport. But the firm’s reach extends far beyond this slice of suburbia.
The company is an integral part of the system that emerged during the global housing boom, when mortgages were created and sold, sliced and diced, packaged and repackaged so quickly that financial firms had neither the time nor the patience to file paperwork in local courthouses as the loans were traded. By using MERS, lenders were able to reassign loans quickly and cheaply. But often the chain of ownership was not accompanied by an official paper trail.
The MERS registry tracks more than 65 million mortgages throughout the country and continues to facilitate rapid-fire transfers that keep the market for mortgage-backed securities humming.
But if courts increasingly begin to nullify the MERS model - different judges have issued differing rulings - this could call into question the legitimacy of millions of mortgages, wreak havoc on the real estate market, spur costly litigation against Wall Street banks and ultimately harm the broader financial system.
…
this could call into question the legitimacy of millions of mortgages, wreak havoc on the real estate market, spur costly litigation against Wall Street banks and ultimately harm the broader financial system.
Works for me.
I especially like the part about ‘costly litigation against Wall Street banks.’
Where are the mass tort lawyers on this issue? I have yet to see any TV ads advising FB ’s to contact them for a free consultation. Has anyone else?
It takes a while for this sort of thing to get started. This isn’t a car crash. Patience.
Also, you don’t spend too much money on starting up that sort of thing unless you are sure that Congress isn’t going to just wade in and take over. TV ads come later in the game.
“Where are the mass tort lawyers on this issue?”
They’re probably chomping at the bit, but this is a crisis, so the normal due process has likely been suspended until further notice.
Buying Beats Renting as Foreclosures Cut Home Prices in Texas, California
By Danielle Kucera - Oct 7, 2010 9:01 PM PT
The surge in Arizona foreclosures allowed Chris Escobedo, a 31-year-old college counselor with a wife and two children, to buy his first home — one larger than the house he had been leasing.
“We realized what kind of house we could get for the same amount we were paying in rent,” Escobedo said in an interview. Monthly costs including taxes and insurance for his new home, a foreclosed property near Phoenix, total $1,014 — just $14 more than the rent on his old place, he said.
Cities in Texas, California, Florida and Arizona offered the best deals for renters looking to buy in September as an increase in foreclosures, a decline in home values and an unemployment rate near a 26-year high kept prices down, San Francisco-based real estate data company Trulia Inc. said today.
Arlington, Texas, topped the list of the cities in which buying was a better value than renting, followed by Fresno, California; Miami; Mesa, Arizona; and Phoenix. Trulia compared the average rent on two-bedroom apartments and other rentals in its database with total homeownership costs, including mortgage payments, taxes and insurance, in the 50 largest U.S. cities.
Foreclosures are adding to a swelling U.S. housing supply as an unemployment rate of 9.6 percent and the end of a federal homebuyer tax credit dampen purchases. In August, home seizures rose 25 percent from a year earlier to 95,364, RealtyTrac Inc. said. Almost one-fourth of all U.S. home sales in the second quarter involved properties in some stage of mortgage distress, according to the Irvine, California-based data provider.
…
Buying certainly beats renting considering you can stop making payments altogether for “an extended period of time”. Try that as a renter and your $hit will be on the sidewalk.
We won’t know until many years from now whether it was better for family finances to be a cash-strapped renter or a delinquent buyer during this period.
Well, when they say a difference of $14 bucks a mo. are we to assume they intend to imply ‘after’ tax advantages or are we talking non-REIC $14 bucks here?
DinOR, you keep forgetting that a large majority of taxpayers take the standard deduction.
Rents are increasing very high in the DC area, to the point where a house is almost starting to make sense. However, any decent 3-bed SFH is still in the $300K range. I’m still waiting.
I saw an ad in the Express that my old apartment building is offering two months free for new renters. So, rents may be high, but if you are willing to move every year….
Our last move cost us the equivilant of one and a half months rent. So that’s a lot of hassle to pocket (essentially) a half months rent.
In other words, for the other 95% of the country, renting is still the better deal.
You gotta love yellow journalism.
Following up on yesterday’s discussion on theory.
Alpha, you’re wrong:
A scientific theory is required to stand up to observation and testing in a variety of settings.
A theory is not required to stand up to observation and testing to be considered a theory. Theories are shown false quite often. That doesn’t mean they weren’t theories - they were still theories, they were just disproven.
E.g. note this snippet from Wikipedia’s page on scientific method:
A scientific theory hinges on empirical findings, and remains subject to falsification if new evidence is presented. That is, no theory is ever considered certain.
Alpha is correct. I teach the scientific method in my college chemistry class because I want them to take away something that they can use once they have left my course (I want them to think about the various ‘theories’ that they hear about on the news). The four steps in the scientific method are:
1) observation
2) hypothesis formation
3) experimentation/testing of hypothesis
4) theory - the hypothesis can be considered a theory once it has survived the experiments/testing, though it may be changed along the way
Contrary to your assertion, a theory MUST stand up to testing. Having worked in science before I taught, I would have been laughed out of chemistry if I attempted to present some kind of ‘theory’ as a given with having done some sorts of experiments to support my case; it is merely a hypothesis until I do. Exceptions are in mathematics and some areas of theoretical physics, where mathematical proofs form the basis of validation of a hypothesis, but the requirements for becoming a theory are still quite rigorous. Calling it a theory does not make it so.
IMO, Wikipedia is completely unreliable for anything other than pop culture.
…WITHOUT having done some sorts of experiments…
No offense chem guy, but actually I think you’re wrong. Step 4 is conclusion, not theory, at least when applied to the scope of a given specific experiment. I don’t have any of my old science books with me, but I’m pretty sure that’s the case, and that’s what I see from looking it up other places online (besides Wikipedia).
I think “theory” isn’t really a formal thing in scientific method, or at least not a formal step. As such, it really is just popular nomenclature. And in popular usage, it generally refers to the hypothesis stage - where something is postulated via observations or background research, but hasn’t gone through full testing and analysis.
In the scientific method “theory” is discussed, but it’s not a step in the method, but rather an explanation for observed behavior. This may actually come in the latter stages of a given experiment (as you show) - however in that case the given theory isn’t the same scope as the hypothesis, but rather of larger scope.
E.g. take evolution. One might have a (something) (let’s not call it a theory yet) that all animals evolved from one starting point in evolution, out of the primordial soup or whatever. One might then form a hypothesis that any given species can evolved into another species. One could take that hypothesis and run a specific experiment - say the flamingo experiment described yesterday. Say the experiment indeed shows that flamingos can indeed evolve into another species. Now one can apply that conclusion and form a theory - that all species evolved from something else.
However that theory is of different scope than the experiment itself. The fact that flamingos can evolve was proven by the experiment. The theory that all animals evolved from something else is a different, new theory; it’s not the conclusion of that specific experiment. The very specific theory that flamingos can evolve into something else existed before the experiment was run, not after.
If instead the experiment showed that flamingos can’t evolve (or at least didn’t in this instance), then the specific theory that “flamingos will evolve under the conditions of this experiment” may have been proven false, whereas the more general theory that “all animals evolved from other things” still may exist as not disproven.
I still trying to figure out where those darn Flamingos came from in the first place!
Packman,
You are correct, ‘Theory’ is a popular nomenclature, but it is one that is used (generally) by non-scientists to cover any explanation for things scientific, whether or not there is evidence to support them. It is also used by advocate scientists to ’stretch the truth’, as it were, to take some kind of observation, apply a plausible explanation to the data, then call it a ‘theory’. I am afraid that you may have fallen victim to one or both of these.
However, for those of us who believe that science should be untainted by politics and whatever else, a ‘theory’ does have a very important and specific meaning. As such, it must be 1) supported by testing/experiment and 2) falsifiable. Naturally, falsifiability can be achieved through experiment if it comes after the initial theory formation.
I note that you made a statement, then followed up with the evolution example, of the apparent case where a theory is of larger scope than a hypothesis (end of third paragraph and the evolution example). This is simply incorrect.
When one makes a hypothesis and tests it to confirm what will (hopefully) become a theory, then the theory applies to the specific cases which have been tested. Of course, if we test a theory on enough different samples/types of subjects, then we can then generalize our findings and publish it as a theory and there is nothing wrong with that, IF THERE ARE ENOUGH DATA POINTS, as well as sufficient reasoning as to why we are generalizing.
In the evolution case you cite, you form a hypothesis about evolution, perform an experiment, then jump to conclusions. In science, the theory resulting from experiment only validates the portion of the hypothesis which has been tested. In this case, you are attempting to prove common ancestry for all species just by showing that one species of flamingo can change into something else.
????
All you have shown is that flamingos can change into something else. Nothing more. If you wanted to continue to work along these lines, then you should show that (numerous) other species of today ALSO change into something else. At that point, you might be able claim ownership of a generalizable theory about the change of one species to another, but nothing more. Confirming the evolution problem as you stated would require still more experiments.
I agree that theory in scientific terms can be defined as a generalization of the results of experiments (and maybe observations). However it is just that is it not - a generalization of results of experiments. Is that not however a change in scope from each individual experiment? Thus “theory” isn’t actually step 4 in the scientific method you list above, but rather a separate meta-result of a collection of experiments and/or observations?
Different example - Starbucks coffee. Let’s say I pay a few visits to a given Starbucks on Elm St., and each time I get a coffee, it tastes like crap. So I form a hypothesis - this Starbucks on Elm street has crappy coffee. I test this hypothesis over the next few weeks by ordering different coffees, and every time it’s crappy. So I form a valid conclusion - this Starbucks on Elm street has crappy coffee.
Now I wonder - do all Starbucks make crappy coffee? Based on my observation of the one on Elm Street, and my knowledge that it’s a chain that has some kind of quality control and that gets its coffee from the same sources - I form a theory that all Starbucks coffee is crap. Is that not valid as a theory?
I want to test this theory. So I start going to other Starbucks’ and ordering coffee, as an experiment to verify and further test this theory. Well, turns out the coffee at pretty much all other Starbucks’ is pretty darn good! I investigate further, and find out that the Starbucks on Elm street has a leak in their water line, and the water is tainted, making the coffee taste bad.
So my conclusion (step 4) from my original hypothesis (coffee at the Starbucks on Elm street) is still valid and correct (they never did fix the water pipe). However my theory that all Starbucks coffee is crap is now proven to be invalid.
Thus that theory (all Starbucks coffee is crap) - while it was a resulting offshoot of my initial Elm street Starbucks observation/experiment - is different in scope, and can be proven/disproven independently of the Elm street experiment. That theory was actually the first step in my later larger-scope experiment that involved all Starbucks (or at least a set large enough to disprove the theory).
Packman…. have you… once in your life… ever… EVER admitted you made a mistake? That you are wrong? EVER?
Try it some time. It’s refreshing.
I once thought I was wrong… but I was mistaken.
(seriously - doing a search on “I stand corrected” on my userid in the HBB search function does turn up 3 hits, at least.
)
It is my theory that the prior to the 1930’s the entire world was black and white and shades of gray. Yes, there is color artwork that predates that decade, but don’t forget most artists were/are insane.
(Just re-read my “Indispensable Calvin and Hobbes”).
Chemistry Guy
For clarity, do you consider evolution a theory or an hypothesis?
“…no theory is ever considered certain.”
And this is why I don’t understand how adherents to faith-based world views can consider themselves true scientists, as opposed to highly-qualified technicians. Isn’t religion all about fostering a pretense of certainty for those who cannot tolerate doubt?
Well… that explains a lot for me.
Seriously packman. Seriously. You’ve just flunked high school science.
The real downturn/depression begins now. I’m not kidding, either. I’m basing this on what I’m seeing locally. The local PBS radio station is really on their knees sucking for donations (I’m listening right now) and there’s a note of desperation in the pleas.
But that’s not all. I have a part time gig that allows me to see how people locally are spending their $$. Believe it or not, the summer wasn’t half bad. Now is the time that things should be picking up over the summer numbers. Not happening.
And I’m following an online sales forum. Same thing happening there. Seasonal sales pick up should be starting now, but it isn’t. It’s going in the opposite direction.
Relax. QE-2 is coming. Nothing but blue skies ahead.
Palmy, I think Florida is in a really bad way, based on everything I read. In contrast, I feel hopeful about California for the first time in 10 years. Part of it has to do with the fact that it’s easier for banks to foreclose, and there seems to be some action in that area. And the state legislature is finally on board with having to cut pensions/benefits (except for their own legislative employees, who get benefits on par with the bloated pensions of police, fire, prison guards.) Things will slowly reverse.
Yesterday I went to look at a fourplex apartment house in downtown Sacramento, bank-owned (BofA). The bank is asking $350,000. Ridiculous. The place was bought in 2002 for $260,000 by a guy who used to work for the state legislature and is now a lobbyist. Naturally he took out 200 grand in cash a few years ago. It needs a lot of work - carpets, paint, appliances, roof. The guy probably renovated his own house and bought a Mercedes. The bank should price it at $250,000 to prevent future foreclosures. My prediction is that a sucker will pay $300K for it and lose money until the economy improves or until it forecloses again.
As someone else looking to buy a bank owned home, how do you formulate your initial offer? Let’s say you were to put in an offer on that place in Sacrameno: Do you go strictly by ARV x .60 or is there another way you come up with it. The reason I ask is because its tough to get good (non agent) advice about purchasing a REO. One house I looked at here was listed for 475K. If I took an agents advice of “don’t offend them” I would have offered 465K, but just this week they dropped the price to 440K. Obviously there is room to bargain. Just curious on everyones thoughts.
Palmy, collectively as a society we’re too close to the forest to see the trees. This thing gets daily coverage in the MSM like none of us has ever seen - and that’s no accident. To maintain the illusion of control they’re inundating the public with stats and headlines.
I trust your local obs more than any news report - which I still read only because the MSM makes the Onion look tame.
The local PBS radio station is really on their knees sucking for donations (I’m listening right now) and there’s a note of desperation in the pleas.
I’ve heard that same thing here in Tucson.
OTOH, at our lovely little 50,000-watt community radio station, we just wrapped up a $100,000 pledge drive. We’re pretty new to the world of six-figure drives — just had our first in March ‘09. But, despite the higher goal and the tough economy, our listeners have been coming through in fine form.
Could it be that in a world of 500 channels, it is silly to have PBS begging for money in the first place? 95% of what is on PBS can be found elsewhere.
PBS TV (WETA in the DC area), is really going after me too, as if they were desperate.
However, I’ve noticed that the PBS NewsHour, which is produced by WETA, is starting to look mighty glossy. They have web extras and podcasts, and they are now sending the anchors on location: Margaret goes to Afghanistan and Iran, Ray Suarez goes to Mexico, Paul Solmon went to China. This ain’t cheap!
I don’t think they need my money as badly as they say. I don’t mind getting mail, but the first telemarketer who calls me “on behalf” of WETA is going to get an earful.
I don’t think they need my money as badly as they say. I don’t mind getting mail, but the first telemarketer who calls me “on behalf” of WETA is going to get an earful.
This past summer, I participated in a calling party for KXCI. We had lists of donors, and our job was to call and thank them for support of the station.
No asking for money, no siree. We were only calling to say “Thank you!”
The people we talked to were floored.
Here’s really big news on the PBS front.
The PBS affiliate in Los Angeles, KCET, is dropping its membership in PBS. They refuse to pay the $7 million dues owed PBS.
The drastic move comes after a months-long battle over the dues KCET must pay the national organization. Last year, the dues totaled nearly $7 million, or almost one-fifth of the station’s $37-million net operating revenue. Station officials say that amount is far too high. PBS, fearing that a reduction in the sum could lead to demands for similar discounts from other member stations, refused to budge.
“After four decades as the West Coast flagship PBS station, this is not a decision we made lightly,” said Al Jerome, KCET’s president and chief executive, in a news release. “We have been in discussions with PBS for over three years about the need to address challenges that are unique to our market as well as our station.”
http://latimesblogs.latimes.com/showtracker/2010/10/sorry-charlie-rose-los-angeles-pbs-affiliate-kcet-exits-network-fold-to-go-independent-.html
schiff explains how crazy the FED is acting..
http://www.europac.net/media/video_blog/gold_currency_war_adp_inflation_jobs
He is moving a good portion of his business offshore, dont blame him.I am wondering how high gold will go.To me it is an obvious bubble but just like the housing bubble they last a lot longer than you expect.There are going to be some smart people make a bundle shorting gold.There are a few etf’s that let you do that.
He is moving a good portion of his business offshore, dont blame him.
new regulations are forcing him to. he said he’d rather stay in the USA and hire people to work here, but he can’t. the new regs make it impossible.
the people passing laws in the USA don’t have a clue as to the damage they are doing..
There are going to be some smart people make a bundle shorting gold.
Maybe, if by “gold” you mean “paper ‘gold’”. Individuals can’t short physical gold… and that’s a good thing because you would get your clock cleaned.
tj
I’ve followed Schiff for 4-5 years now. He’s smart, seems to see thing clearly, and has been pretty accurate, whereas Puplava is a “floater” in some regards. Thank you for the link.
you’re welcome amigo.
Its a good thing the Recession is over already with all of these problems we are having.
QE #2 is going to save us and stocks are going to rally bigtime.
Bernanke is going to be man of the year AGAIN.
Can’t wait for $10/gallon gasoline…
Maybe it will take a share of Google, Apple or whatever internet darling to fill up the tank on an SUV?
Although I don’t think that’s the outcome the stock jockeys have in mind. One gets the feeling the some people out there think that hyper-inflation, should it appear, will somehow assert itself selectively - sparing them but ravaging everyone else. Buy hey, that’s what they thought about housing prices too!
You’ll b able to snap up a behemoth SUV or pickup for pennies on the dollar. Those “plastic go carts” will be in high demand.
QE #2 is going to save us and stocks are going to rally bigtime.
stocks will stay the same its just the dollar going down make’s them worth more dollars
I just don’t see how the jawboning about QE2 could suffice to keep the DJIA propped up at 11K, without some stealth intervention to aid and abet the outcome.
Do you?
It’s pump and dump for year end bone us’s for Wall St.
Bank of America halts foreclosure in all 50 states. Just announced by Diana Olick on CNBS.
Crap. Am I doomed to rent forever?
Yes, unless you want to overpay for the non-foreclosed scraps that are left over….
We are all renters now.
BofA just announced a halt to foreclosures in ALL 50 states. Hot off the press. The next step is halting foreclosures worldwide and next the entire Milky Way Galaxy. Party on, squatters!
“These days,your’re either squattin’ or you’re a chump” -Warren Buffett
I am beginning to think that people who are paying thier bills are the ones getting taken for a ride.
As I mentioned above, what would happen if everybody refused to pay their mortgage (other than no new mortgage being offered).
Would they forclose on everyone and garnish our wages for the deficiencies?
…what would happen if everybody refused to pay their mortgage…
They would just bill us renters for the shortfall……
“I am beginning to think that people who are paying thier bills are the ones getting taken for a ride.”
Especially the higher income earners.
People who try to play by the rules = DUPES (myself included!)
Who benefits most from QE-2?
A) megabanks
B) you and me
Why does every “fix” for the “struggling economy” have to directly put obscene wads of cash in the biggest criminal’s pockets? Just asking…
Because the criminals are in charge? (I know it was a rhetorical question).
The law says that the person holding the mortage can foreclose on a property if the payments are not being made as agreed. The person (bank) has to hold the mortgage. If a person (bank) tries to foreclose, they have to prove it. The way to prove it is to have everything filed at the county courthouse.
They decided to skip that step to avoid paying fees to the various counties. They got caught. Now they will have to extra legal work to take the original mortgage and trace it through to whom owns it now. This is absolutely necessary to maintain property rights. Property rights come from having a valid title and valid mortgage liens. Only when they have done all this legal work can they then start the foreclosure process. In a fee society, we have property rights protected by law and hence the need for lawyers. The people holding the mortgages messed up big time and they just need to fix these one by one.
With the unemployment as it is, they can hire thousands of folks to just start on file after file and get the documents correct and then move on with the foreclosure. It is very simple.
They decided to skip that step to avoid paying fees to the various counties. They got caught.”
So we’ll bail them out again right ?
So we’ll bail them out again right ?
Yes….with increasingly worthless U.S. dollars…….
DOW 11,000!! Wooo-hoooo!!! Keep the bad news coming, baby!
W street loves high unemployment, remember this is a “jobless” recovery the more that are jobless means we are recovering faster. Which equals a higher stock market. I guess the DOW will hit 14,000 when we reach 25% unemployed!
The stock market did quite well in Zimbabwe a few years ago in nominal terms when its government did QE. Unfortunately, Dow 12,000 is not very impressive when $12,000 will not even buy you a K-Mart suit. Printing unlimited money always ends the same way. See Continental currency, Confederate currency, Weimar Republic currency, Zimbabwe currency. Got Gold or maybe even better Palladium? Unless you think it is different here.
The Zimbabwe stock market was the best performing over the 2000-2009 decade, by far actually.
(in nominal terms)
Some google searches will indicate just how well they’re actually doing economically.
I would question Palladium. It’s currently in demand for cat cons. But if TSHTF and governments collapse, environmental laws will be ignored/repealed so there will be little use for Palladium going forward.
A record 30% of unemployed out of work at least a year
USA TODAY
A record 30% — or 4.4 million — of the nation’s 14.7 million unemployed workers were out of work at least a year in August, up from 23% in December, according to an analysis of Bureau of Labor Statistics data released Thursday by Pew Economic Policy Group. The figures are not seasonally adjusted.
The ranks of the severely long-term unemployed have remained stubbornly high in recent months, even amid a noteworthy drop in the number of all long-term unemployed Americans — those out of work six months or longer. Put another way, a hefty share of the long-term unemployed — 71% — were out of work at least a year in August, up from 48% a year earlier, BLS figures show.
Go figure. 95,000 jobs were lost last month yet the unemployment rate remains 9.6 percent. ?? Several studies show the true rate exceeds 10 percent, but the Labor Department uses its own arithmetic. (No one really expected the number to go into double digits prior to the November 2 election.)
The jobless rate has equaled or exceeded 9.5 percent for 14 consecutive months, the longest span of elevated joblessness since monthly records began in 1948.
Students protest fee hikes, layoffs
At least 500 students rallied in UC Berkeley’s Sproul Plaza on Thursday and then staged a raucous sit-in at the campus’ historic Doe Library in the latest in a string of protests begun last year to oppose fee hikes, layoffs and course cutbacks in public higher education across the state.
The event was part of a nationwide Day of Action for Higher Education, with similar but more low-key protests at other campuses in California and other states.
“You’re being lied to by UC and Sacramento!” geography Professor Richard Walker told the crowd. “They tell you we have to cut staff and child care subsidies. But where’s the list of vice chancellors being cut? They don’t tell you the plan is to cut professors and bring in more teaching assistants.”
I’ve gotta jump on w/the professor on this one. When I see what the SUNY system administrators are making on the public payroll, it makes my blood boil. And its not one person per system, its a whole clique of them.
Students protest fee hikes, layoffs
they might as well protest sunrises and sunsets..
Tell me again this isn’t a Depression, Uncle Sugar, and your propaganda vending machines?
Look at this, everyone:
The days of privatizing the profits for Wall Street and socializing the risks must end. As radical as this sounds, in truth it would be no different from when — before 1970 — Wall Street was a series of private partnerships.
We can’t turn back the clock: Wall Street’s big firms will never again be private partnerships. Instead, I propose that each large Wall Street firm create a new security that represents — and is secured by — the entire net worth of its 100 top executives. This security would be subordinated to all other creditors as well as to all preferred and common shareholders; in other words, if a firm goes bankrupt, this security is the first to be wiped out.
Had such a security existed at the time of the collapse of Lehman Brothers, the net worth of the top 100 Lehman executives — no doubt totaling several billion dollars — would have been collected after liquidating everything they owned and paid to Lehman creditors, who under the current system will be lucky if they get back 10 cents on the dollar.
Wall Street’s first reaction to this idea — aside from profanities — will be that it cannot possibly be done. Or that it would somehow threaten the sanctity of our capital markets.
But, in fact, it can and should be done….
You can see the rest of it here: http://opinionator.blogs.nytimes.com/2010/10/07/make-wall-street-risk-it-all/
“I propose that each large Wall Street firm create a new security that represents — and is secured by — the entire net worth of its 100 top executives.”
A ‘turtles all the way down’ security?
Come on, PB. This is amazing. It is a legally plausible way to set up all those bonus clawbacks that people keep wishing for around here but are not in and would never get in an executive contract. It is pure genius.
“It is pure genius.”
Right up there with COLI = Corporate Owned Life Insurance:
Fund employee benefit plans by purchasing life insurance contracts on the covered employees. If an employer works them to death, there is more money available to pay benefits to the surviving plan participants.
Did you even read the full article?
What exactly are your objections to the most highly compensated executives having to pay up if the actions that they take result in a huge bubble that gives them giant bonuses in year one and causes a collapse of the system in year 8? Don’t you think it would provide some incentive to to avoid the collapse?
“Don’t you think it would provide some incentive to to avoid the collapse?”
Yes, but I see no reason they would agree to this.
Isn’t their net worth mostly stock in their own companies?
A chunk of it is in options, but when they actually own the stock, they diversify.
They’re on the right track, but first of all, the idea should apply to all corporations, not just banks, and secondly, the 100-exec group is highly arbitrary. Executives should be liable for corporate debts and torts to the extent they were involved in contracting them, or supervised those who were involved. Directors and shareholders are also enablers and should be liable as well.
Really it would be much simpler just to abolish the principles of shareholder limited liability and D&O immunity.
Instead, I propose that each large Wall Street firm create a new security that represents — and is secured by — the entire net worth of its 100 top executives.
i wonder how you would force them to do that. if i was forced to put my entire net worth, i would resign immediately.
you couldn’t ‘force’ anyone to do it except at the point of a gun. and any attempt to force anyone into something like this seems to be extortion to me.
if i was forced to put my entire net worth, i would resign immediately.
That’s the point, tj. No one is forced to be a bank exec. And if officers can’t be responsible for misdeeds of their corporations, then those organizations should not even exist, much less receive government charters, favors, and bailouts.
No one is forced to be a bank exec.
but to force them after they are already bank execs is extortion. you know, ‘do this or else’. i’d have no problem with it if it were a requirement for the job. then you’d know going in and agree to it or reject it. but if you’re already there it seems a little heavy handed to me.
And if officers can’t be responsible for misdeeds of their corporations, then those organizations should not even exist, much less receive government charters, favors, and bailouts.
yes, they do need to be responsible for their misdeeds. prosecute them. and you’re right that if they can’t be made responsible, then those organizations shouldn’t even exist.
It is called passing a law. You know, that thing that Congress does. Not extortion.
After Wall St. has literally destroyed our economy, you’re worried about hurting them?
Seriously?
Well tj, then go ahead and resign. If you can’t stomach it, someone else will. Take your superior skillz to another country and make your fortune.
Although, I do agree to some personal limits. Maybe let them keep 2 million tops. If they can’t live off that for life, then they never had any business being an executive of anything in the first place.
I guess you could force it as a condition of a bailout. And it would most definitely work. Remember when Ken Feinberg threatened to cut the CEO pay when banks didn’t pay back their unneeded TARP funds? That solved the problem right quick.
To my mind, its central feature should be that each of the top 100 executives at Wall Street’s remaining “systemically important” firms be personally liable for the risks they take. Not just their unexercised stock options or restricted stock, but every asset they have in their possession: from their cars to their fancy homes to their bulging bank accounts….
We can’t turn back the clock: Wall Street’s big firms will never again be private partnerships.
What’s wrong with forcing WS firms to be partnerships? Why does he automatically exclude such a possibility? Lawyers generally can’t hide behind a corporate veil: firms have to make several members be personally liable.
It’s been years since I took bus. org., but….
If a purported corporation is found to be lacking in some legal formality, the court will deem it a partnership. All business organizations are by default a partnership unless definite steps are taken to avoid the legal presumption of partnership (at least under CA law).
I know of no case where a business which was found by the courts to be an accidental partnership challenged such a finding on constitutional grounds.
Why can’t Congress simply void the corporate structure of the errant WS firms, and let them default back to partnerships? Corporations are state law creations, but that hasn’t held Congress back in other areas.
Lloyds of London got out of the business of unlimited liability when liability became unlimited too.
Would someone pull the plug on this jackass. The pickle we are in rests largely on his little shoulders.
Greenspan Says U.S. Creating `Scary’ Deficit By Borrowing
Oct. 8 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said the U.S. is involved in a “dangerous game” with its stimulus strategy. Greenspan spoke yesterday at the foreign-exchange FX10 Conference in New York sponsored by Bloomberg LP, the parent of Bloomberg News. Erik Schatzker and Deirdre Bolton report. (Source: Bloomberg)
Former Federal Reserve Chairman Alan Greenspan said the U.S. fiscal deficit is “scary” and the federal government needs to cut spending on entitlements.
“We’re involved in a dangerous game,” Greenspan said yesterday at a foreign-exchange conference in New York sponsored by Bloomberg LP, the parent of Bloomberg News. “We’re increasing the debt held by the public at a pace that is closing” the gap between our debt and “any measure of borrowing capacity,” Greenspan said. “That cushion is growing very narrow.”
He must be talking to the part of the populace that are just waking up because no one else is going to believe that flagrant line of BS.
“Here’s the ultralight you ordered Mr. Smith. By the way did I mention I also sell life insurance?”
“We’re increasing the debt held by the public at a pace that is closing” the gap between our debt and “any measure of borrowing capacity,” Greenspan said. “That cushion is growing very narrow.”
yes this is correct so the answer is “cut spending on entitlements.”
I beleive the MSM is softening up the voters to accept less or nothing even though the ’surplus” was spent on who knows what and now its gone and so are your “social security savings”
soon the bond bubble will bust and the dollar will fall like a peso and that will complete the utter destruction of wealth of middle America’s baby boomers.
What comes next ? could be bad.
How about your 1983 deal to “Save Social Security” Mr. Greenspan? The middle and working classes have been paying higher taxes ever since to build up a “trust fund.”
Cut entitlements is right:
http://www.reuters.com/article/idUSTRE68R40I20100928
Republicans block ending offshore jobs tax breaks
Oct. 8, 2010, 10:28 a.m. EDT
Do we need protection for the banks
Commentary: Stall on foreclosures shows failure or mortgage market
By MarketWatch
NEW YORK (MarketWatch) — The foreclosure documentation failures at some of the nation’s biggest banks is a kind of karmic justice.
Lawmakers on Friday called for more mortgage lenders to halt foreclosure proceedings after several banks failed to properly review documents. The failures include “robo-signing” a practice in which documents are signed but not read. Read full story on lawmakers calls to halt foreclosures.
Sounds like a a typical closing for a homeowner.
…
Some one emailed this to me.
“Twas the night before elections
and all through the town
tempers were flaring.
Emotions all up and down!
I, in my bathrobe with a cat in my lap
had cut off the TV tired of political crap.
When all of a sudden there arose such a noise.
I peered out of my window. saw Obama and his boys.
They came for my wallet, they came for my pay
to give to the others who had not worked a day!
He snatched up my money and quickas a wink
jumped back on his bandwagon as I gagged from the stink.
He then rallied his henchmen who were pulling his cart.
I could tell they were out to tear my country apart!
‘On Fanie, on Freddie, On Biden and Ayers!
On Acorn, On Pelosi’ He screamed at the pairs!
They took off his cause and as he flew out of sight
I heard him laugh at the nation, who wouldn’t stand up and fight!
So I leave you to think on this one final note-
IF YOU DON’T WANT SOCIALSM GET OUT AND VOTE!!!!!
Bud
No matter who wins we will get “socialism”, just slightly different flavors of it.
BINGO!
Twas the night before elections
and all through the town
tempers were flaring.
Emotions all up and down!
I, in my bathrobe with a cat in my lap
had cut off the TV tired of political crap.
When all of a sudden there arose such a noise.
I peered out of my window. saw Grover Nordquist and his corporate thugs.
They came for my wallet, they came for my pay
to give to the others who had not worked a day!
He snatched up my money and quickas a wink
jumped back on his bandwagon as I gagged from the stink.
He then rallied his henchmen who were pulling his cart.
I could tell they were out to tear my country apart!
‘On Boner, on Freddie, On Cantor and Angle!
On TeaParty, On Palin’ He screamed at the pairs!
They took off his cause and as he flew out of sight
I heard him laugh at the nation, who wouldn’t stand up and fight!
So I leave you to think on this one final note-
IF YOU DON’T WANT CORPORATISM GET OUT AND VOTE!!!!!
So? You have problem with Corporate Communist Capitalism©®™, comrade?
Track of the Day: ‘Big Wave’
In “Big Wave,” she sings about being young in the “new American way”: bankrupt, depressed, unable to fully commit. It reads depressing but sounds euphoric—the closest thing to a clever, heartfelt anthem that isn’t billing itself as an anthem at all. It’s precisely that—the gravitas that is injected into effervescence that makes the song so lovely and makes California so golden.
http://www.theatlantic.com/culture/archive/2010/10/track-of-the-day-big-wave/64238/
LaHood Weighs Urging Ban on All Driver Phone Use in Cars
U.S. Transportation Secretary Ray LaHood says he believes motorists are distracted by any use of mobile phones while driving, including hands-free calls, as his department begins research that may lead him to push for a ban.
If the phone mechanism was built into the car and it’s speaker system w/controls in the steering wheel, talking on the phone would be like talking to your passenger.
That’s part II.
Yep, and there is nothing that could be done about that. Along with the radio/TV plus some folks can’t talk to a passenger and drive without it being a distraction. However texting while driving takes the cake IMO.Some studies show that it causes more accidents and death than drunk driving, and I believe it.
Wait til after the election in Ca. Have a good suck on a doobie. Who will be the first one killed by a stoned driver???
Care to guess how many old folks loaded up on prescription pain killers and can barely walk are cruising the boulevards and highways?
Speaking as a bicyclist who’s almost been creamed by distracted motorist, I think that Mr. LaHood’s idea is a good one.
Pardon my typing. I meant to say “motorists.”
I think every cell phone sold in the last 3 or 4 years has included a GPS chip. An easy fix is to just put the phone in “sleep” mode when the GPS detects that the phone is moving. If you get or make a call while stopped at a traffic light the call is terminated as soon as you start moving. Same for text messages. The screen goes blank while underway.
Technologically it can be done. But politically?
Why do you need goverment to do everything for you?
Part of what is neat about a cell phone is one gets to keep talking while he is moving; The call is handed off to one antennea after another as the phone moves through the city or countryside or whatever. This roving feature is one of a cell phone’s alluring qualities.
Just because a cell phone user is calling from a moving car doesn’t necessarily mean he is driving the car.
And because the phone is moving doesn’t necessairly mean the caller is even in a car.
If you don’t like my driving, stay off the sidewalk……
BEEP BEEP!
Bank of America halts foreclosure sales in 50 states amid expanding furor over document errors
WASHINGTON (AP) — Bank of America Corp., the nation’s largest bank, said Friday it would stop sales of foreclosed homes in all 50 states as it reviews potential flaws in foreclosure documents.
A week earlier, the company had said it would only stop such sales in the 23 states where foreclosures must be approved by a judge.
The move comes amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.
“We will stop foreclosure sales until our assessment has been satisfactorily completed,” company spokesman Dan Frahm said in a statement. “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.”
Oct. 8, 2010, 12:18 p.m. EDT
Bank of America halts foreclosure sales
Lender says the basis for its foreclosure decisions is ‘accurate’
By Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) — Bank of America Corp., one of the largest mortgage lenders in the U.S., said Friday that it will stop foreclosure sales in all 50 states to check how it handles documents supporting home seizures.
The halt on foreclosures will continue until the review “has been satisfactorily completed,” the Charlotte, N.C.-based banking giant and Dow Jones Industrial Average component said in a statement.
“Our ongoing assessment shows the basis for foreclosure decisions is accurate,” Bank of America said. “We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus.”
…
While everyone is applauding the halt in foreclosures due to corrupted paperwork, maybe they will also celebrate dealing with all phony paperwork. Now that we’ve invited the banks to re-evaluate mortgage paperwork, they could go back & investigate all the paperwork involved in the sale of the home, also. With so many outraged at dishonestly, it would be the perfect time to revisit all the fraudulent loan applications, inflated appraisals, loans as primary residences for flipping purposes, etc. Lest we forget, most of the underwater or foreclosed sucked plenty of equity out of their houses, tax free, and had a grand old time spending it. Now they’re all crying the blues and screaming it’s the government’s fault, it’s the bank’s fault. Like anyone forced them to behave as irresponsible dolts.
Now that we’ve invited the banks to re-evaluate mortgage paperwork, they could go back & investigate all the paperwork involved in the sale of the home, also. With so many outraged at dishonestly, it would be the perfect time to revisit all the fraudulent loan applications, inflated appraisals, loans as primary residences for flipping purposes, etc.
I’d like to see that happen too.
And, speaking of the loans as primary residences, when they were actually rented out, there’s a huge problem with that in Tucson and Pima County.
If you try to report it to the county assessor’s office, they just la-dee-dah you off the phone. Like they’re not missing that higher tax revenue that comes from higher assessments on rental properties. It’s really strange.
It is a distinct possibility. Imagine thusly:
Loan servicer tries to foreclose but can’t as the the alleged owners of the loan (a trust) never had the paperwork properly filled. Since the loan is now in arrears and the property is worth way less than the outstanding ballance, the trust doesn’t really want to take it on. At this point the real owner of the loan is the bank that originally securitized the whole shebang (if, at least the first transfer was valid and it probably was since this is a pretty easy transaction and the huge investment banks that did this part of the deal have lots of lawyers and accountants that work for them). So, the securitizer is more than willing to do the work to dump the bad loan on the trust, but now the trust has a reason to check and see if the loan actually qualified to be in the pool. And there we have it. It may be 6 years too late, but there is now a real reason for the alleged owners (the people who own the tranches of bonds that were made from the securitized pool of loans) to look into whether they are buying what they paid for or not. Since the real legal transfer hasn’t happened yet, they might be able to duck out of it and demand their money back. However, the big investment bank is stuck because their tranfer from the originator of the loan was probably valid and if it wasn’t, the originator might be out of business anyway.
I am going to enjoy watching this.
Wow - had to read that couple of times - but yeah! This is going to be very interesting.
Unfortunately this will probably be a huge overhead cost to the economy for years (decades even) to come. I hope we can afford it. And I hope the PTB don’t just decide at some point “F it - this is getting to be too much of a hassle. Time to hit the reset button”. (I’m not really joking - though what the “reset button” means is a big question mark.)
However, the big investment bank is stuck because their transfer from the originator of the loan was probably valid and if it wasn’t, the originator might be out of business anyway.
Don’t worry, the Federal Reserve will buy the loans from the investment banks at par…..see, problem solved!
There’s some chatter in the blogosphere that Congress is still in session making the pocket veto option unavailable.
The One needs to grow some b@lls and actually veto the bill.
You took the words right off-a my keyboard!
Are you talking about BUSH ???
What a changed country we have become in our expectations of ourselves. A less affluent America survived a Depression and world war without anything like the 99 weeks of unemployment insurance, welfare payments, earned income tax credits, food stamps, rent supplements, day care, school lunches and Medicaid we have today.
Public or private charity were thought necessary, but were almost always to be temporary until a breadwinner could find work or a family could get back on its feet. The expectation was that almost everyone, with hard work and by keeping the nose to the grindstone, could make his or her own way in this free society. No more.
What we have accepted today is a vast permanent underclass of scores of millions who cannot cope and must be carried by the rest of society – fed, clothed, housed, tutored, medicated at taxpayers’ expense for their entire lives. We have a new division in America: those who pay a double fare, and those who forever ride free.
We Americans are not only not the people our parents were, we are not the people we were. FDR was right about what would happen to the country if we did not get off the narcotic of welfare.
America has regrettably already undergone that “spiritual and moral disintegration, fundamentally destructive to the national fiber
Carpet fiber plant closing in Royston, Ga.
ROYSTON, Ga. (AP) - Beaulieu of America says it’s closing its carpet fiber plant in Royston next month, eliminating 192 jobs.
Beaulieu, which is based in Dalton, plans to stop production Nov. 26 at the Royston plant, where spun yarn is manufactured.
The plant ranks among Franklin County’s 10 largest employers.
Beaulieu bought the Royston plant in 1985. The facility has operated under different names since the early 1950s.
Political dissent now a major crime in America.
Disturbing news, and questions arise from the news of a newborn baby being seized and taken from the baby’s parents, and the affadavit states the affiliation of the father, John Irish to the group “Oath Keepers”.
Setting a chilling precedent and in a manner befitting the most tyrannical of regimes, the government seized a newborn baby girl today because the father has associated with the lawful, pro-peace, pro-constitution, anti-violence Oath Keepers. What makes this particularly scary is exactly that, that the ‘Oath Keepers’ is a peaceful, pro-rule of law organization which supports serving military, veterans, peace officers, and firefighters and reminds them of their oath to the Constitution of the United States in a direct and open manner.
omfg.
Something smells. Link, please.
Links cause my comment to not be listed 100% of the time. Google Jonathan Irish oathkeeper kidnapped.
This is a response to the state kidnapping by Oathkeepers:
UPDATE : 10/07/2010 10.53PM PST — We have confirmed that the affidavit in support of the order to take the child from her parents states ,along with a long list of other assertions against both parents, that “The Division became aware and confirmed that Mr. Irish associated with a militia known as the Oath Keepers.” Yes, there are other, very serious allegations. Out of respect for the privacy of the parents, we will not publish the affidavit. We will leave that to Mr. Irish. But please do remember that allegations do not equal facts — they are merely allegations (and in my experience as a criminal defense lawyer in small town Montana I saw many allegations that proved to be false).
But an even more fundamental point is that regardless of the other allegations, it is utterly unconstitutional for government agencies to list Mr. Irish’s association with Oath Keepers in an affidavit in support of a child abuse order to remove his daughter from his custody. Talk about chilling speech! If this is allowed to continue, it will chill the speech of not just Mr. Irish, but all Oath Keepers and it will serve as the camel under the tent for other associations being considered too risky for parents to dare. Thus, it serves to chill the speech of all of us, in any group we belong to that “officials” may not approve of. Don’t you dare associate with such and such group, or you could be on “the list” and then child protective services might come take your kids.
Note that there is no allegation that Oath Keepers is a criminal organization or that Mr. Irish, in the context of his association with Oath Keepers, is committing any crime. We are not advocating or planning imminent violence, which is the established line where free speech ends and criminal behavior begins (See Brandenburg v. Ohio, 395 U.S. 444(1969), which, as Wikipedia notes, “held that government cannot punish inflammatory speech unless it is directed to inciting and likely to incite imminent lawless action. In particular, it overruled Ohio’s criminal syndicalism statute, because that statute broadly prohibited the mere advocacy of violence.” We don’t even advocate that the current serving use violence of any kind, let alone imminent violence. We ask them to merely stand down.
Neither is Oath Keepers a militia, for that matter. However, EVEN IF WE WERE, that also would not be a valid reason to take someone’s child away. PRIVATE MILITIAS, JUST LIKE OTHER VOLUNTARY ASSOCIATIONS, ARE NOT ILLEGAL, and it is not a crime to associate with them. To the contrary, we have an absolute right, won by the blood of patriots, and protected by our First Amendment, to freely associate with each other as we damn well please so long as we are not advocating or planning imminent violence or directly harming our children (and no, teaching them “thought crime” like “All men are created equal and are endowed by their Creator with certain unalienable rights,” or that those who swear an oath should keep it, does not count — at least not yet). A parent associating with a militia is not engaged in child endangerment and is not evidence of child endangerment (despite the shrill screeching of people such as Mark Potock of the SPLC, who desperately wants it to be so). Just recently a Time Magazine article described how the reporter visited the happy home of a militia member and his family — and those kids are still at home, where they belong, as is the case with many th0usands of children across this country who have parents who “associate” with private militias and all manner of other non-criminal groups. You had damn well better defend the rights of those parents to freely associate in their militias and keep their kids while doing so. You can bet that if you let such an association be listed as grounds for taking children from their parents that it won’t only be militia folks who have their rights violated. Homeschoolers, evangelical Christians, gun owners, etc. will also be on the hit list. Just wait. Remember Pastor Niemöller’s timeless warning:
They came first for the Communists,
and I didn’t speak up because I wasn’t a Communist.
Then they came for the trade unionists,
and I didn’t speak up because I wasn’t a trade unionist.
Then they came for the Jews,
and I didn’t speak up because I wasn’t a Jew.
Then they came for me
and by that time no one was left to speak up.
A modern version might read like this:
They came first for the militia members,
and I didn’t speak up because I wasn’t a militia member.
Then they came for the three percenters,
and I didn’t speak up because I wasn’t a three percenter.
Then they came for the Oath Keepers,
and I didn’t speak up because I wasn’t an Oath Keeper.
Then they came for me
and by that time no one was left to speak up.
So, defend the right of even the most hardcore militia members to freely associate without that right being chilled and suppressed by means of the threat of taking their kids.
But this particular listing of an association with Oath Keepers as one of the reasons for taking a child from her parents is all the more absurd, taking it to a whole other level of Alice in Wonderland “down is up” and up is down,” when you consider that a significant percentage of the members of Oath Keepers are current serving police, fire-fighters, and military personnel. Three of our state chapter presidents are current serving police officers. How can “associating” with such fine men and women who are daily trusted with tremendous power and responsibility constitute evidence of child endangerment? How can it be that a New Hampshire police department can consider someone associating with other current serving police officers as evidence of child abuse and endangerment? Only in the bizzaro world of the SPLC are public servants who commit to simply following the law, keeping their oaths by refusing to violate your rights ,considered “extreme” and “dangerous.”
This is the camel’s nose under the tent. We need to fight even this one instance of such a violation of the right to associate and to peaceably assemble, and we need to push back against the new world of thought crime that is being relentlessly pushed upon us. If this listing of mere association with Oath Keepers is allowed to be used in this case to justify, even in part, removing a newborn from the custody of her parents, with nothing else alleged about Oath Keepers except that the father “is associated” with this organization, that will have a sweeping chilling effect on the First Amendment protected rights of freedom of speech, peaceable assembly, association, and petition for redress of grievances for all of us — and it will only be the beginning.
OK, now it is TIME TO PUSH BACK — peaceably, of course, using our voices and pens. Let the officials in question know that you strongly oppose their listing of an association with Oath Keepers as one of the reasons for taking this child. Let them know you insist that they remove that “reason” from the affidavit and issue a public retraction, and until they do so, they will hear from all of us, and also from our legal counsel. And we won’t relent until they respect our First Amendment protected rights of free speech and association and cease and desist this chilling of those rights. Be professional, but firm. Make them hear you.
Stewart Rhodes
So basically - aside from a statement from Irish himself - we don’t actually know if his child was taken because of his association with Oath Keepers - all we know is that he is associated with them.
Can’t really make any conclusions unless someone besides Irish actually says why his child was taken. I’ll bet a few beers that it wasn’t only because of his O.K. association.
I guess we’re going to see a stampede of pedophiles and NAMBLA members hauling azz to join “Oath Keepers”.
What is more likely?
-A giant government conspiracy to take kids from “Oath Keepers”?
-An abusive, control freak policeman/public safety worker (yeah, I know, it’s a stretch) throwing out the “Oath Keepers” card, in an effort to retain “custody”.
-A giant government conspiracy to take kids from “Oath Keepers”? -X-GSfixr
Do you understand that oathkepers is attempting to defang those currently in power intent upon circumventing the limited powers outlined by the constituion?
Yes?
Then you understand why it is important for said usurpers to intimidate the oathkeepers.
An abusive, control freak policeman/public safety worker (yeah, I know, it’s a stretch) throwing out the “Oath Keepers” card, in an effort to retain “custody”.-X-GSfixr
Better read again…it is the government that is playing the oathkeeper card. The government also said that oathkeepers is a militia so what else are they blatantly wrong about?
The whole country is acting like a bunch of 12 year olds.
Anyone with kids knows what I’m talking about. Their tendency to whine, point fingers, throw out the “victim” card, and have “selective memory”………but when all the facts are in, you find out how many pertinent details have been omitted.
I hear this stuff all the time from my Fox News/dittohead friends/acquaintances. Always getting e-mails from them, loudly announcing some kind of socialist atrocity that Obama or Nancy Pelosi is committing. But when you actually go check the facts, it’s never quite as cut and dried as it’s made out to be.
Can’t tell you if as much noise is coming from the other direction……maybe it is, but I’m not seeing it. Maybe I need to find some liberal/Democrat friends.
I just find it strange that nobody was worried too much about “oathkeeping” until January 2009.
“I am in the pay of the US Government. If I vote against the administration, I am voting against my Commander in Chief. If I vote for the administration in office, I am bought.”
George S. Patton
“I am in the pay of the US Government. If I vote against the administration, I am voting against my Commander in Chief. If I vote for the administration in office, I am bought.”
George S. Patton
Point of history: President Truman loathed Patton.
Why do you want a link to a press release?
Because I’d like to see it.
From googling the text above, or “John Irish” and “Oath Keepers”, I don’t see any press releases. All I see is various message board discussions and opinion pieces (basically the above text), and a video of a phone interview with Irish. No news from any impartial news sources (even local newspapers, radio/TV) of the child’s arrest, that may corroborate his claim that it was only because of his affiliation with Oath Keepers.
I do see this - from the Oath Keepers site (emphasis mine):
UPDATE : 10/07/2010 10.53PM PST — We have confirmed that the affidavit in support of the order to take the child from her parents states ,along with a long list of other assertions against both parents, that “The Division became aware and confirmed that Mr. Irish associated with a militia known as the Oath Keepers.” Yes, there are other, very serious allegations. Out of respect for the privacy of the parents, we will not publish the affidavit. We will leave that to Mr. Irish. But please do remember that allegations do not equal facts — they are merely allegations (and in my experience as a criminal defense lawyer in small town Montana I saw many allegations that proved to be false).
Thus the child may not have been taken at all due to Irish’s association with oath keepers, but for other (presumably more valid) reasons.
Just trying to get the whole story, which isn’t provided in lint’s post.
If Jonathan or his wife had done something wrong then there would need to be an arrest or formal complaint. Clearly taking the child from its mother is not lawfull or medically advisable.
In no way can oathkeepers be considered a militia as is erroneously stated in the affidavit. What else is erroneous in the statement. Owning guns is also listed yet to no complaint.
Exactly what is the criminal relevance of Jon’s political affiliations? This is yet another attempt to intimidate Americans into submission.
If you are considering having a child in a hospital and you are vocally opposed to the obvious governmental attempts to banish fundamental laws then your child may be taken away from you.
What gets me is how obvious a political move this was. No mention of Jon’s political affiliation would be required if there was truly a threat to this newborn’s life. Its as if the the government has become desperate and hyper paranoid to the point of stealing people’s kids as an intimidation tactic. Folks, the government thugs are becoming very bold.
Look at this: FBI busted tracking student, demands GPS spy gear return
Several days ago a 20-year-old Santa Clara, Calif. student discovered a GPS tracking device hidden on his car. After his friend posted a picture of it online, speculating about its its ties to a secret FBI investigation, the feds themselves came a-knockin’, according to Wired.com. They wanted their toy back.
or how bout this obvious setup to silence a big critic of AIPAC: http://www.free-edgar-steele dot com.
Political dissent is now being punished friends.
Pacman,
What possible relevance does a man’s political associations have with taking his infant child away? If his political associations are not relevant then why reveal it on an affidavit?
If this guy committed some atrocity then why is it not listed front and center of the affidavit?
This would be understandable in Stalin’s Russia.
If the kid wasn’t taken from the wingnut, he should be.
Wow! I was convinced that the HBB was near 100% high intellect posters. So now it is only 99% insightful, bright thinkers and 1% yahoo message board fare. Exeter, your words are as hasty as they are callous and inaccurate.
If you have children they can be taken by the state without a warrant and for no logical reason. Furthermore, there is incredible economic incentive for the state to steal children.
protectingourchildrenfrombeingsold.wordpress.com/
The dude is whacko. That’s why they took his child.
No other reason.
You have a “just world” view indicated by the idea that the government could somehow take better care of the infant than its own mother and father. You believe the government cares about you don’t you? Bunches of documented cases of kids being murdered, raped, tortured , and mistreated while in state care.
“The dude is whacko. That’s why they took his child.”
A voice of reason and sanity. Thank you.
Oct. 8, 2010, 3:12 p.m. EDT
Ex-White House top economist backs more stimulus
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Christina Romer, the former top economic adviser to President Barack Obama, called on Friday for more federal spending and urged the Federal Reserve to undertake additional quantitative easing to give the economy a boost.
While there was still a debate over how much the Fed’s proposed plan to buy more government bonds would help the economy, the policies “need to be tried” because the economy is still in “crisis,” Romer said in remarks on the sideline of the International Monetary Fund’s annual meeting.
…
Ford, Dealers Say Credit Access Helping Recovery in Auto Sales
New-vehicle buyers are having an easier time getting credit, signaling U.S. auto sales may continue to accelerate after last month reaching the fastest pace since the government’s “cash for clunkers” program.
Federal Reserve data shows banks began easing consumer- lending standards in July, and the Fed’s loan facility program rejuvenated the market for securitized auto debt, said Ellen Hughes-Cromwick, Ford’s chief economist. Data from CNW Research shows improved sales for buyers with weaker credit scores.
“Credit has begun to ease for automotive in general,” Hughes-Cromwick said today in a telephone interview. “We should see consumer credit begin to evidence some recovery, but it is a slow go. I don’t think anybody is baking in some sizable cyclical uplift in the next 12 to 18 months.”
So they are loaning to subprime buyers again basically?
Yep, now anyone with a pulse can get a zero down, zero percent car loan. Buy a new car now or be priced-out forever.
They wouldn’t have any sales if they didn’t.
I think your right.
He is right.
As I stated sometime last year or previous, this whole debacle was predicated on having run out of expanding markets (customers) and being forced to either loan to sub-prime or go stagnate.
They chose sub-prime. And when that ran out…
Well. Here we are.
Dow Tops 11,000 for First Time Since May, Stocks Creep Higher on Expectations of Fed Move- AP
Stocks are edging up after another weak report on unemployment added to expectations that the Federal Reserve will step in to prop up the economy.
Up is down, down is up.
No. Up is up and down is down. Anyone with a scintilla of knowledge about how stock markets work could have predicted 11K (and dare I say 12K).
When the alternative is a 0.0015% APY checking account you don’t need to be Modigliani or Miller to figure out where the better investment option is.
When it crashes big, I’ll be thinking of you buddy,
When the alternative is a 0.0015% APY checking account you don’t need to be Modigliani or Miller to figure out where the better investment option is.
Absolutely true: Gold is by far a better investment option than a “checking account”.
Fair is foul and foul is fair
Hover through the fog and filthy air.
No. Stock are edging up for Wall St. year end bone us’s.
Home ownership ain’t all that no more…
* HEARD ON THE STREET
* OCTOBER 9, 2010
Banks Boxed In on Foreclosures
By DAVID REILLY
Shoddy lending practices fueled the housing bubble and led to massive losses. Now, shoddy paperwork in the headlong rush to foreclose could become a new source of pain.
Bank of America has decided to halt all foreclosure sales. So will other banks follow BofA’s lead and what impact will the move have on the housing market? Rick Brooks and Brett Arends discuss. Plus, the Dow tops 11,000 and the $2.8 million car.
In recent weeks, J.P. Morgan Chase, Bank of America and Ally Financial have temporarily halted foreclosures in 23 states due to flawed affidavits used in legal proceedings. Friday, Bank of America expanded this halt to all 50 states, while PNC Financial Services said it was stopping foreclosures in 23 states for a month.
Banks insist the problems are administrative and can be cleared up in a few weeks or months. But investors, who have largely shrugged off the issue, should dig a little deeper.
The affidavit problems may yet point to more serious issues with the documentation and the legal basis for mortgages that were securitized, or sold to investors.
“Is there a question about who owns things?” said Christopher Peterson, a law professor at the University of Utah who has studied securitization and mortgage-title issues. “If you don’t think so, you’re kidding yourself.”
…
BofA halts foreclosures in all 50 U.S. states
So what are the odds that those people electing to pay their mortgage every month on time will now decide to stop paying?
Is this a gimmme or what?
Too good to be true?
Hooray - christmas is saved for all those families that had to decide between paying the mortgage or buying crap from China and wrap them as gifts. Don’t wait for black friday, get out there now and spend, spend, spend!
Yes Virginia, there really is a Sant Clause!! /sarcasm off
“Part of my constitutional duty is to do congressionally directed spending. I am vigorous in going forward with congressionally directed spending. I fight for it.” - Democrat Senator Harry Reid, October 2010
Dang EBIL unions! Taking yet another wage cut! (yes, I said “another” Don’t make me google the hundreds of others that unions had to take in the last 20 years)
http://www.google.com/hostednews/ap/article/ALeqM5hmJZz_Skr4ho8nshzG78r2pucZhwD9IN3TT01?docId=D9IN3TT01
ORION TOWNSHIP, Mich. — General Motors and the United Auto Workers have reached a cost-cutting deal that could help accomplish what once seemed impossible: Making a profit on small cars built in the United States.
The deal, announced Thursday, could cut in half the hourly wage of some longtime UAW workers at a factory in Orion Township, Mich. It’s the first time the union has agreed to a pay cut for workers who are not new hires.
‘… could cut in half the hourly wage of some longtime UAW workers …”
Half? Wages cut in half? The UAW?
VERY interesting times.
“Half? Wages cut in half? The UAW?”
Poof
Poof
Poof
Poof
Poof
“Under the wage deal, 40 percent of the line workers will be paid $15 an hour. The remaining 60 percent will make traditional UAW wages of around $29 an hour.”
Wow.
More Americans who can’t afford to buy a new car.
It’s all good.
Republicans block ending offshore jobs tax breaks
http://www.reuters.com/article/idUSTRE68R40I20100928
I’m going to vote republican this year. I don’t think enough people have been effed enough to know who really effed them.
More pain ought to do the trick.
The Wall Street Journal
* HOMES
* OCTOBER 9, 2010
Delays Could Stall Recovery, Analysts Say
By ROBBIE WHELAN
Further delays in the foreclosure process might be a good thing for delinquent homeowners: They get to stay put a bit longer, usually for free.
But economists say the delays impede recovery of the U.S. housing market.
They argue the best way to heal the market is to let banks foreclose quickly, allowing homes to be resold at lower prices to qualified borrowers. That would clear the market and help stabilize prices.
“If foreclosures slow down dramatically now, from a months supply perspective, the length of time it takes to work through all of it gets longer, ” said Sam Khater, senior economist with CoreLogic, a real estate research firm.
At the end of August, the number of U.S. home loans either in the foreclosure process or 90 days delinquent tallied more than 4.4 million, according to mortgage research firm LPS Analytics. That’s up from about 3.3 million at the beginning of 2010.
Meanwhile, the time to complete a foreclosures is growing.
According to LPS, the average foreclosure took 478 days in August, up from an average of 292 days in 2006. It takes even longer than average in states that require a judge’s approval.
Mark Zandi, chief economist for Moody’s Analytics, said delays eventually inflate mortgage interest rates because lenders pass the costs of an expensive foreclosure process to future borrowers.
“They know that if the foreclosure process is long and arduous, the cost to foreclose is higher, and those costs are embedded in the mortgage rates in each state,” he said. “In the future, lenders will charge different rates for different jurisdictions, because if there is a foreclosure problem, and the costs are higher, they’ll want to be compensated for it.”
Mr. Zandi favors a federal standard for foreclosures to shorten the time it takes. The process now is much quicker in such states as California, Nevada and Arizona, which don’t require a judge’s approval, than in such states as Florida and New York, which do.
A rising tide of mortgage delinquencies also worries investors. Ted Jadlos, chief executive of Berlos Capital, a mortgage-advisory firm, said it doesn’t make sense for banks or the government to forestall foreclosures, when thousands more continue to go delinquent.
“If you artificially stop the foreclosure process, that’s like turning on the garden hose to fill your pool, then saying the pond is filling up too fast, so you just kink the hose and say there, I’ve stopped the problem,” he said.
“You’re basically saying, ‘There were rules that governed this market, but now there aren’t.’”
* ROI
* OCTOBER 8, 2010
The Great Mortgage Mystery
* By BRETT ARENDS
The big question from the mortgage meltdown isn’t why so many distressed homeowners are defaulting on their loans.
It’s why any of them are still making payments.
In the worst-hit areas millions have no equity left, and little hope of seeing any anytime soon. The market value of their homes is far below the size of the mortgage.
If they just stop paying, what is going to happen to them? In many cases they may get to live in the home rent-free for months, even years, until the bank gets around to seizing it.
If Frank Abagnale—the con man played by Leonardo DiCaprio in the film “Catch Me If You Can”—were operating today, he’d probably be living rent-free in a super-luxury high-rise in Miami.
Consider the latest revelations. The big banks are so backed up with foreclosures that some of them resorted to hustling through repossessions without the proper paperwork. Some of them—including Bank of America, J.P. Morgan Chase and Ally Financial’s GMAC Home Mortgage—have announced a temporary freeze in some states on further foreclosures while they sort through the mess.
In one case, a bank employee said she was approving 8,000 foreclosures a month. By my math, that’s roughly one for every minute and a half. No, she wasn’t reading all the documents thoroughly. (As one wit observed, the banks paid about as much attention to foreclosing on the loans as they did to making them five years ago.)
In many cases, thanks to the fallout from securitization, it’s not even clear who owns the mortgage. The payments may be due to different financial institutions around the world, some of which have gone the way of all flesh.
No wonder a fair number of borrowers have simply gone on strike. Nobody knows exactly how many are doing so deliberately—a so-called strategic default—though some estimates suggest these may account for nearly a third of recent defaults.
According to the Federal Reserve Bank of New York, one mortgage borrower in five in Florida and Nevada is more than 90 days’ late on payments, and in Arizona and California it’s about one in eight. It’s a wonder it’s not more.
A while back I received an email from a woman in Florida that illustrates the issue.
Her neighbor across the road had stopped paying his mortgage about a year and a half earlier, she wrote. He was still living in his “luxury condo,” and the lender hadn’t come after him yet. After all, he told her, they were so backed up with the housing collapse it might take them years.
My correspondent—a lawyer—was wondering whether she was being stupid for continuing to make her own payments. After all, she, too, was deeply underwater; her mortgage was far bigger than the value of the home.
So what happens to those who simply go on strike?
Even where the bank is coming after them to evict them, it is taking months, maybe years. During that time they are living rent-free.
When they are evicted, the bank then puts the home on the market. It may take months more to sell. Let’s assume it sells, but for a lot less than the size of the mortgage. What can the bank do then?
In some states, the bank can do very little. In so-called nonrecourse states—which include California and Arizona, two of the worst-hit in the housing collapse—banks basically have to eat the loss.
…
If Frank Abagnale—the con man played by Leonardo DiCaprio (above) in the film “Catch Me If You Can”—were operating today, he’d probably be living rent-free in a super-luxury high-rise in Miami.
* HOMES
* OCTOBER 9, 2010
BofA Halts Foreclosures
Bank Expands Freeze After Pressure From Government-Run Mortgage Firm
By DAN FITZPATRICK, DAMIAN PALETTA And ROBIN SIDEL
Bank of America Corp. imposed a nationwide moratorium on foreclosures and the sale of foreclosed homes after it came under intense pressure from a government-run housing-finance giant worried about documentation problems, people familiar with the situation said.
The bank called the halt as concern mounted from legislators and state prosecutors about procedures used by lenders to foreclose on homes. Many banks use so-called robo signers, employees who sign hundreds of documents a day, without carefully reviewing their contents, when foreclosing on homes. Critics say that could result in improper foreclosures.
Freddie Mac, the government-run mortgage-finance company that along with Fannie Mae owns many of the mortgages serviced by banks, pressed Bank of America to expand its search for problems with the foreclosure documentation process, said the people familiar with the situation.
On a call Thursday with several banks that included Bank of America, a Freddie official said the mortgage company wanted the institutions to look at foreclosure documentation across all 50 states, and asked them to consider putting a stop to the entire foreclosure process, say people familiar with the call.
Many in the banking industry fear that the widening paperwork problem could cause further delay on foreclosures and threaten an already weak housing market, which in turn is stalling the broader U.S. economic recovery. On the other hand, it could provide a brief financial respite to people who have defaulted on their mortgages and are still occupying their homes.
As of August, there were more than 4.4 million home loans that were either in the foreclosure process or 90 days past due, according to mortgage research firm LPS Analytics. Since 2006, about 6.4 million homes have been lost through the foreclosure process.
…
Wifey and I were just having a hypothetical discussion. Suppose we goes out and buys the biggest McMansion for which we qualify to borrow the money, then stop paying the mortgage immediately after moving in. Since there is a national foreclosure moratorium in place, I guess we would join the ranks of rent-free livers? For how long would we be able to get away with not throwing away our money on mortgage payments before we were kicked out of “our” (wink wink) home?
I told my wife that I am certain if we try this, it will backfire terribly, if for no other reason than because I have a conscience. But I am still pondering what could possibly go wrong with this evil plan, or why millions are not executing such a scheme as I type…
More waterboarding of the dollar by the Fed seems imminent.
‘Bernanke put’ risk for shareholders
By Michael Mackenzie in New York and David Oakley in London
Published: October 8 2010 19:21 | Last updated: October 8 2010 23:26
Don’t fight the Fed. That is the mantra driving financial markets now.
As the prospect of another super-sized dose of cheap money from the world’s most powerful central bank has gained traction, the dollar has tumbled. Almost everything else, be it Brazilian government debt, the Thai baht, UK gilts, gold or the price of crude, is rising.
…
“QE is as much about falling yields as it is about weakening the dollar,” says Dominic Konstam, global head of rates research at Deutsche Bank.
Since the Fed’s policy meeting last month, the dollar has tumbled 4 per cent on a trade-weighted basis, hitting a succession of 15-year lows against the yen. It has lost 5 per cent of its value against the euro, too.
In turn, dollar-denominated commodities such as oil have soared. Crude is up 10 per cent, while gold has risen nearly 5 per cent, to a record high this week of $1,364 a troy ounce.
The S&P is back above 1,160 and is at its highest level since May, while US Treasury yields have fallen back to below their lows of August. The 10-year note yields less than 2.4 per cent, its lowest level since January 2008.
The question now is how long this rally in stock markets and dollar-denominated asset classes will continue. For stock markets bulls, much is riding on the Fed delivering QE2 on a scale that justifies the run-up in share prices. The problem is nobody knows how big any asset-buying programme might be.
Too small and the market will be disappointed. Too big and sharply higher inflation may follow. Beyond questions about the scale and scope of QE2 – or the “Bernanke put” – a bigger risk for investors is that quantitative easing fails.
Tony Crescenzi, portfolio manager at Pimco, says the effectiveness of quantitative easing is “a major unknown even for the Fed, as few truly know the effect that a given amount of QE will have on financial conditions, and few truly know the impact that any loosening of financial conditions will have on the economy”.
The pessimists point to Japan, where quantitative easing has failed to stimulate the economy, or the stock market, over the past decade. Some analysts argue that, if US banks remain reluctant to extend credit, then the Fed is unlikely to prevent a prolonged period of anaemic growth, or even another recession.
There is no guarantee that QE2 will work, says Ken Wattret, chief eurozone economist at BNP Paribas. In Japan’s case, deflation – falling prices and economic stagnation – was the outcome. He adds however: “The difference in the US and the UK is that they have moved much more quickly than the Japanese did and the financial injections have been much greater. This means the chances of success are much higher, which is good news for equities.”
“…instead, the bigger problem was that during the credit bubble everyone failed to ask hard questions about finance.”
I beg to differ. We’ve asked a plethora of hard questions right here on the HBB. Who cares if they listen?
The Financial Times
An Anthropologist in America
By Gillian Tett
Published: October 8 2010 23:41 | Last updated: October 8 2010 23:41
When I was growing up, I wondered how it would feel to appear in a Hollywood movie. It never seemed likely: I have spent my career first as an academic, studying the anthropology of marriage rituals in the remote mountains of Tajikistan, and then as an FT journalist, writing about equally specialist subjects such as Japanese banking and collateralised debt obligations.
But the credit crunch has changed the world. Last week, Sony Pictures released Inside Job, a documentary telling the story of the financial collapse. The narrator is Matt Damon, the Hollywood star best known for the Bourne films. It also has interviews with luminaries such as George Soros, Christine Lagarde, Paul Volcker and Nouriel Roubini. And along the way, I also make my first appearance on the silver screen, filmed in unflattering close-up.
By any standards it is a peculiar career twist. When I first started writing about high finance five years ago, the topic seemed so geeky that it was ignored by the mainstream. Banking did not get Hollywood salivating. Hunks such as Damon did not wake up dreaming of CDOs, even though as Jason Bourne he is no stranger to other off-balance-sheet entities, given his role at the black-ops arm of the CIA, Treadstone.
These days, however, finance has become so notorious that it is almost sexy. Hence Damon’s appearance in this low-budget film and the fact that several other finance-focused movies are being released this autumn, including Wall Street: Money Never Sleeps and Client 9 (which narrates Eliot Spitzer’s fight with high finance). Next year, a film about the Lehman collapse is also due out. According to Wall Street gossip, the role of Lloyd Blankfein will go to the wise-cracking Danny DeVito. Jamie Dimon, however, will be played by Richard Gere. Awesome casting job!!!
Is this sudden celebrity focus on high finance a good thing? Not for my own peace of mind. Last month I went to the premiere of Inside Job at the Toronto International Film Festival. It was a deeply unnerving experience. During most of my career I have enjoyed the luxury of hiding behind the lens, watching others. Seeing my face splattered on a 30ft screen came as a shock.
But in a wider social sense, I am thrilled that films like this are now being made. For behind the making of Inside Job is a more important point about the way that power works in the western world.
Since the financial crisis occurred, there has been anger about what bankers have done. After all, the popular narrative goes, those bankers engaged in all manner of complex tricks which made them fabulously wealthy; and since this came at the expense of everyone else, it is presumed that bankers deliberately hid their complex games.
In reality, that narrative is only half correct. Yes, some bankers did many incredibly irresponsible things. Many also became rich. But this did not happen simply because bankers were deliberately hiding their activities (though some were); instead, the bigger problem was that during the credit bubble everyone failed to ask hard questions about finance. Those CDOs represented an area of “social silence”, as an anthropologist might say; a part of society that everyone ignored. Thus bankers were free to engage in crazy games, because western society had labelled this activity “dull”. And was enjoying cheap mortgages.
…