Bits Bucket For October 16, 2010
Post off-topic ideas, links and Craigslist finds here
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Here’s the resurfacing of a connection to a housing bubble story from a few years back that may have slipped from most of your memories, thanks to so much other housing-related excitement over the intervening years.
Rancho Santa Fe is the next community to the west of Ranch Bernardo, and is one of the wealthiest residential enclaves in San Diego County, not to mention the entire U.S.A.
Let’s hope there are more real estate fraud convictions to come, and the little (multimillionaire) fish in these stories soon start to get replaced by bigger (multibillionaire) fish.
Kontogiannis, Jailed Over Cunningham Bribes, Pleads Guilty in Bank Fraud
By Thom Weidlich - Oct 15, 2010 11:31 AM PT
Thomas Kontogiannis, serving prison time for his role in laundering bribe money for former U.S. Representative Randy “Duke” Cunningham, pleaded guilty in a $92 million real-estate scheme.
Kontogiannis, 61, pleaded today in federal court in Brooklyn, New York. He led a scheme to defraud Washington Mutual Inc. and Credit Suisse Group AG’s DLJ Mortgage Capital in connection with the development of properties in Brooklyn and Queens, New York, said prosecutors in the office of U.S. Attorney Loretta Lynch.
“I used the funds generated by the fraudulent transactions primarily to finance the construction of ongoing real-estate development projects,” Kontogiannis told U.S. District Judge Kiyo A. Matsumoto. “While I never intended to cause any financial loss to any financial institution, I knew that the means I was using to obtain these loans was wrong.”
Nine people were indicted in the case last year, accused of obtaining multiple mortgages and staging repeated sales of the same properties to straw buyers to obtain the home loans. The fraud began in March 2003 and ran until September 2007, prosecutors said. Three defendants pleaded guilty earlier this year and one has died.
Kontogiannis, who admitted to conspiracy to commit bank and wire fraud, previously pleaded not guilty in the case in June 2009. The conspiracy count carries a maximum sentence of 30 years in prison, Matsumoto said in court.
‘Expressed Remorse’
“Mr. Kontogiannis acknowledged his participation in fraudulent mortgage activities today,” his lawyer, Gregory O’Connell of De Feis O’Connell & Rose PC in New York, said after the hearing. “He expressed his remorse and hopes to put this matter behind both him and his family.”
Kontogiannis is serving a sentence of eight years and one month for helping to launder Cunningham’s bribe money through fraudulent mortgages that allowed the former congressman to buy a $2.4 million mansion in Rancho Santa Fe, California. Kontogiannis was sentenced in San Diego in May 2008.
Cunningham, a California Republican, resigned from Congress after pleading guilty in 2005 to taking $2.4 million in bribes from defense contractors. He is serving a sentence of eight years and four months.
The defendants in the Brooklyn case also allegedly obtained permits to construct multi-unit housing in Queens and Brooklyn and, to finance the projects, subdivided the land tracts and staged sales of the properties financed by the mortgage loans, the U.S. said.
…
It would be interesting to know if the so-called defense contractors were prosecuted.
Apparently it’s different in defense contracting than in banking. The defense contractors haven’t figured out the too-big-to-jail thingee yet.
WHERE THEY ARE
Randy “Duke” Cunningham: Former Republican congressman pleaded guilty to conspiracy and tax-evasion charges and is serving an eight-year, four-month sentence in federal prison in Arizona.
Brent Wilkes: Former defense contractor was convicted of bribing Cunningham and sentenced to 12 years in prison. The court ruled he could be free on bail while awaiting the outcome of his appeal, but he has been unable to come up with the bail amount. He is in prison in Los Angeles.
Thomas Kontogiannis: Financier was sentenced to eight years and one month in prison after pleading guilty to money laundering. He is being held in Massachusetts.
Kyle “Dusty” Foggo: Former CIA official and friend of Wilkes pleaded guilty in September to fraud. His sentencing is scheduled for Jan. 29.
…
How can we prosecute Barney Franks, Dodd, Maxine Waters, Raines, and Johnson???
Have them become Republicans.
Nick, are you still selling pizza ? Love that name on a bill board.
Does anybody know what the term “openly gay” means when it is used in the gays in the military debate/discussion?
I think the people attempting to over turn the “don’t ask don’t tell” policy need to define it so all the service personel know what to expect.
It seems vague?
http://www.gaycenter.org
They an excellent organization that can assist you with all your questions and needs.
Meanwhile, the housing price collapse continues.
The closet door is open.
And another once great American institution falls.
The is the same military that allowed an islamo fascist to rise through the ranks to Lieutenant. On his business card he had SOA printed. SOA stands for Soldier of Allah. Nobody said a thing. Can’t offen him right? It’s his right to have whatever he wants on his business card. It’s his right to hang out with other islamo fascists. That man killed 13 soldiers in Texas. This tragedy could have easily been avoided if not the insane political correctness instituted in the military.
Now of course one of you will jump in and say how dare you compare gays to Hassan? And you know very well that is not what I’m doing. I’m simply pointing out that in the drive to become 100% pure PC compliant, institutions like the military are being destroyed.
You cannot expect the military to be a perpetual bastion of values not held by the populace.
I think the policy leads to a lot of “self censorship” that could ultimately be counter-productive.
And I’m pretty sure the military was one of the first institutions where minorities were in respected leadership positions.
—Now of course one of you will jump in and say how dare you compare gays to Hassan? And you know very well that is not what I’m doing. I’m simply pointing out that in the drive to become 100% pure PC compliant, institutions like the military are being destroyed.—-
This is a straw man. You create a second argument that merely diverts from your first, then argue that since you are not “doing” the second thing, then arguments against your first point won’t stand.
No, what we will jump in and say is that the issues with gays in the military have nothing to do with a straw-man-ish “drive to become 100% pure PC compliant” thus (in your imagination) destroying the military.
Rather, we will jump in and say, protecting the military from (assertedly) self-declared haters of it (assuming your SOA story is true), is rather different from acting out bigotry against a population that ardently wants to support its military, in this case the population of gay soldiers.
Furthermore there is no evidence that allowing gays already in the military to say they are gay hurts said military. Indeed, there is historical precedent that those most objecting to the non-straight folks harbor doubts about their own sexuality. And, successful armies of other countries- eg. Israel- have found no compromise in their vaunted military prowess due to their lack of worry (unlike the USA) about who is gay or not.
So… you are a bigot. You couch your pseudo-argument in straw man shroud.
Naughty.
Yea of course. I don’t want gays in the military therefore I
a) hate gays
b) am gay
Just like if I oppose anything Obama does it means I hate blacks (although how come I don’t hate whites, since he is 1/2 white?)
I really don’t care what gays do. Wanna be gay? Have a blast with it.
But where I do have a problem is where a very small minority - 5% of the population - dictates wholesales changes to institutions such as the military. In this case it is gays. I would have the same issue if it was left handed people with green eyes dictating wholesales changes just because.
And for the 1761th time, comparing sexual preference to skin color is ridiculous. One can’t control one’s skin color is. One can control one’s sexual preference.
Can anyone name any great military that has allowed open gays in its ranks. China? No of course not. They rightfully see the military as its intended purpose. A fighting machine. Not a vehicle for social upheaval brought on by ACLU lawyers with a cause. Some day down the road we will pay dearly for this decision.
Eddie, most of my gay friends could kick your ass. Stop the foolishness.
Oooh. Looks like we hit an Eddie nerve.
Telling.
Israel seems to do fine without worrying about who is gay.
But, again, you invoke the straw man, proving you at least secretly know you’ve no leg to stand on.
You cited imagined, straw man “PC” behavior seeking to protect anti-USA SOA’ers with pre-USA people who happen to have some sexual orientation or another.
No.
Rather, expunging those who would do shoot fellow soldiers due to being part of SOA is not same as expunging from military loyal Americans who happy to have a genetic anomaly that makes you (why is that, now?) uncomfortable. Back in the day, all the same arguments were made to keep folks with extra melanin (one might call the Black, i guess) from “mixing” with the white boys in the military. Bad for morale, it wuz, and all that. LOL
You would keep loyal blacks from mixing with loyal whites in the military and you try to equate that with the “good” goal of trying to keep out terrorists who would go on shooting rampages.
Straw man. Poor Logic. Come on out of the closet, Eddie. Let the sun shine in.
Poor Eddie.
Eddie drowns again.
Oooh. Looks like we hit an Eddie nerve.
Telling.
Israel seems to do fine without worrying about who is gay.
But, again, Eddie invokes the straw man, proving he at least secretly know you’ve no leg to stand on.
You cited imagined, straw man “PC” behavior seeking to protect anti-USA SOA’ers with pre-USA people who happen to have some sexual orientation or another.
No.
Rather, expunging those who would do shoot fellow soldiers due to being part of SOA is not same as expunging from military loyal Americans who happy to have a genetic anomaly that makes you (why is that, now?) uncomfortable. Back in the day, all the same arguments were made to keep folks with extra melanin (one might call the Black, i guess) from “mixing” with the white boys in the military. Bad for morale, it wuz, and all that. LOL
You would keep loyal blacks from mixing with loyal whites in the military and you try to equate that with the “good” goal of trying to keep out terrorists who would go on shooting rampages.
Straw man. Poor Logic. Come on out of the closet, Eddie. Let the sun shine in.
Poor Eddie.
Eddie drowns again.
More drowning Eddies…
—And for the 1761th time, comparing sexual preference to skin color is ridiculous. One can’t control one’s skin color is. One can control one’s sexual preference.—-
Because Eddie says so?
Let’s put aside that most who study this subject rather disagree with Eddie’s — One can control one’s sexual preference.—-
Once again Eddie does the straw man (sign of either weak or malicious mind). He argues a new point as if it were his original, which it is not. Even IF one can control one’s “preference” the control (Eddie’s claimed preference control) or lack of control (skin color) has nothing to do with loyally serving in a military, unlike being a terrorist who’d like to shoot fellow military men, the original point of all this. Doing the Straw Man dance is evil, eddie, dontcha know.
Indeed if it were good n’ ok to discriminate against gays in the military because they have “choice” (unlike black folk who cannot choose skin tone), then not asking and not telling would seem not to keep those evil choicers out, now would it?
And, of course eddie shows no evidence of damage done by either those not tellin’ or by those tellin’.
Eddie, spend few weeks in the Israeli military. Powerful good military it is, especially per capita. Try to explain to them why you think Black folk n’ Gay Folk are just as bad for them as an islamic terrorist in their military.
Chump
Eddie’s too young and inexperienced in the corporate world to see what is going on. For the last seven and a half years I worked with openly gay and lesbian engineers in Los Angeles and even “conservative” Phoenix. As long as the gays don’t pick up on me they are no problem with me. Only one gay I know in Phoenix is kind of annoying at times. But I bring up a shield and talk about former girlfriends as a reminder that I am not interested in men. I don’t work at that office anyway. The rest of them are career-oriented and very fine people. Most of them have national security clearances and are helping to defend Eddie’s Bible thumping Augustinian free speech.
Dear Eddie,
I don’t want you in the military. It’s not that there’s anything wrong with you, I just don’t want you in the military.
predictable replies
If one does not want a small minority of gay activists dictating how the military is run then one must be
a) gay
b) bible thumper
Is that really the best you all can do? I expected a little beter.
By that logic if you’re opposed to real estate agents, it means you secretly yearn to be one. Come on out of the closet boys and girls.
Eddie doesn’t have the physical or mental fortitude to do his patriotic duty.
Another straw man.
“Predictable” has what to do with “correct” or “incorrect”.
If the Eddies write here that “housing is the best deal ever and you should buy now or be priced out forever”, there also would be “predictable” replies.
Chump.
Do provide evidence that a small number of “activists” is trying to run the military.
Do return to your original point, chump, because I have not forgotten it, that gays in the military would hurt it just as do islamic terrorists who shoot their fellow officers.
Chump.
Do return to your straw man argument, “you expected better”. Yeah, the guys who argued blacks should not mix with whites in the military because it would hurt morale also “expected better” when called out on it.
Chump.
Do return to your straw man personal claim that “choice” is an element of orientation, or that even if there were “choice” that makes the discrimination ok.
Chump.
Tell us again why what likely is the best per-capita Military on earth- Israel’s- has not problem having both sexes and both orientations serve together with honor.
Chump.
Do show us your study that shows that those who have not asked or told serve better than those who do ask or tell.
Chump.
Are you really secure in your own sexuality, Eddie?
Chump.
Remember claiming no $800,000 house in Syracuse area could possibly have $25k taxes?
Chump.
He was a Lieutenant Colonel, not a Lieutenant. That’s a senior officer.
And a Rear Admiral is not referred to as a Rear, at least not openly.
But there are Rear Admirals upper half, and lower half. Maybe I don’t want to go there……
Israel lets women in the military and lets them have guns.
But it doesn’t let them fight in combat units. They learned the hard way what a mistake that is.
—Now of course one of you will jump in and say how dare you compare gays to Hassan? And you know very well that is not what I’m doing. I’m simply pointing out that in the drive to become 100% pure PC compliant, institutions like the military are being destroyed.—-
This is a straw man. You create a second argument that merely diverts from your first, then argue that since you are not “doing” the second thing, then arguments against your first point won’t stand.
No, what we will jump in and say is that the issues with gays in the military have nothing to do with a straw-man-ish “drive to become 100% pure PC compliant” thus (in your imagination) destroying the military.
Rather, we will jump in and say, protecting the military from (assertedly) self-declared haters of it (assuming your SOA story is true), is rather different from acting out bigotry against a population that ardently wants to support its military, in this case the population of gay soldiers.
Furthermore there is no evidence that allowing gays already in the military to say they are gay hurts said military. Indeed, there is historical precedent that those most objecting to the non-straight folks harbor doubts about their own sexuality. And, successful armies of other countries- eg. Israel- have found no compromise in their vaunted military prowess due to their lack of worry (unlike the USA) about who is gay or not.
So… you are a bigot. You couch your pseudo-argument in straw man shroud.
Naughty. Dontcha think?
Hey, wasn’t this the Eddie who said noway nohow could an $800,000 house in the Syracuse area have $25,000/yr in taxes?
Did he ever apologize for that?
“Now of course one of you will jump in and say how dare you compare gays to Hassan?” Ummm, you didnt even bother to make a comparison. You just said spouted random and unrelated thoughts like a crazy person. I dont understand why most men are so confused as to what it means to be gay. It just means they are sexually attracted to men, just like your grandma, mom or sister (unless they too are gay). Big freaking deal. The dumbest is when ugly guys are scared they will be raped by gay men. Talk about who the real f*****t is.
Oh put a cork in it (e)Dwina.
You really do need to get out more….
Note: As much as I, personally, appreciate your sly online persona, please consider that many on this forum take your spew seriously– and it’s not helpful to the discourse. In fact, to some it’s downright hurtful. You’re a clever writer, but a little maturity would go a long way here–and you would make your point to the broader audience far more effectively.
That is all.
Give’s “never leave your buddy’s behind” a new meaning.
I think the Marine Corps should be ONLY gay men. We can call it the “Sparta” branch of our armed forces. And generals should only be lesbians. And no, I’m not joking.
Another hijack in the form of a question.
How is that highly-popular form of financial innovation known as “mortgage securitization” working these days?
I personally am quite fond of threat number three listed below: Let Megabank, Inc drink its own toxic Koolaide and see how they like it.
Bank stocks fall again
By David S. Hilzenrath and Zachary A. Goldfarb
Saturday, October 16, 2010
Bank stocks got hammered for a second straight day Friday amid concern that mortgage issuers could face a new wave of red ink related to shoddy lending and foreclosure practices.
The share price of Bank of America, the nation’s largest bank, fell 9.1 percent over the past week to close at a low for the year, as analysts said it might have set aside too little money to meet coming costs.
Companies that issued and service mortgages face a triple threat.
First, their efforts to seize and liquidate real estate held by delinquent borrowers may be delayed as they review reports of forged signatures, missing paperwork and other problems plaguing the foreclosures they have initiated.
Second, they could get drawn into a costly legal morass over allegations that they did not properly transfer loan documents when they pooled mortgages into securities that were sold to investors around the world.
Third, they could be forced to buy back billions of dollars of improperly issued loans that were sold to investors, such as the government-backed Fannie Mae and Freddie Mac.
The third issue is far from new, but it became cause for more concern this week as recent disclosures about sloppy or fraudulent documentation in the foreclosure process prompted investors to reassess the potential stakes.
The loan-servicing companies also face a Monday deadline from Freddie Mac to report any problems in their foreclosure practices.
On Friday, Standard & Poor’s Equity Research downgraded Bank of America stock from “strong buy” to “hold.” The ratings firm said it had “a lower level of confidence” that the bank “has adequately prepared for, and reserved for, future mortgage repurchase demands . . . and for the potential administrative and legal costs of the foreclosure crisis.”
In an interview, Standard & Poor’s analyst Erik Oja said that the crisis “threatens to morph into something perhaps uncontrolled . . . something very difficult to quantify.”
…
“The share price of Bank of America, the nation’s largest bank, fell 9.1 percent over the past week …”
But, but, but … it’s too early for its price to go down. Somebody somewhere really screwed up!
The bank needs to sell shares to sheeple so it can RECAPITALIZE. The stock is scheduled to down AFTER the sheeple have been sucked in, not before.
BTW, GM wants to soon bring out its IPO priced at twenty dollars a share, a price sheeple appear to be most comfortable with.
Do not buy gm shares.Biggest rippoff of the year.Its time public companies quit using bankruptcy as a way to raise new capital.This is not trumponmomics.
Fourth, every borrower with an underwater mortgage will see the rent free squatters now get an indefinite moratorium keeping them in their houses and decide they have been suckers for being current on their mortgages.
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/15/AR2010101506541.html
Even the MSM, for once, is reporting reasonably honestly and accurately on this story. The Washington Post notes the following:
“For foreclosure processors hired by mortgage lenders, speed equaled money. The financial incentives show that the problems plaguing the foreclosure process extend well beyond a few, low-ranking document processors who forged documents or failed to review foreclosure files even as they signed off on them. In fact, virtually everyone involved - loan servicers, law firms, document processing companies and others - made more money as they evicted more borrowers from their homes, creating a system that was vulnerable to error and difficult for homeowners to challenge.
“This was a systemic problem. It’s not like a few renegade employees made mistakes,” said lawyer Peter Ticktin, who defends Florida homeowners facing foreclosure. “It was industry-wide and pervasive, and everyone knew about it.”
The class-action lawsuits are going to be coming fast and furious.
Realtors are Corrupt
“Realtor arrested on child porn charges”
http://tinyurl.com/24pc25n
You are obtuse.
30 or 40 degrees?
If I’m not mistaken at 30 or 40 degrees he is acute, one needs more than 90 degrees to be obtuse.
Very creepy and scary. Big middle-aged married man owns a ReMax brokerage. You wonder how many children he’s molested over the years.
Mid-October is traditionally a great time to test a stock market rally.
As to any decline in speculative demand for housing, I suppose one might ask how much of that represents hot money from the Fed or its minions in the private sector. So long as the speculation is Fed-funded by super-duper cut rate loans, I see no reason this foreclosure flap should have any impact on speculative demand.
Foreclosure debacle to test stocks’ rally
NEW YORK | Sat Oct 16, 2010 3:04am EDT
NEW YORK (Reuters) - U.S. banks will be in the limelight next week as several household names report earnings and investors worry a forced halt to foreclosure proceedings could hit the sector and end the recent rally.
Bank shares fell sharply on Friday on very high volume, continuing a slide from the previous day. Although recovering some of their losses, Bank of America shares hit their lowest in over a year, while the KBW bank index fell 2.4 percent.
Shares of Bank of America, the nation’s largest mortgage lender, have fallen 9 percent during the week. Over 595.9 million shares of the company’s stock traded on Friday, the most since April 2009 and over four times the 50-day moving average.
Investors worry banks did not follow proper due diligence when foreclosing on homes whose owners were not making mortgage payments, which could result in costly litigation, fines and additional mortgage repurchases.
Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey, said that situation could also weigh on the housing market if the uncertainty discouraged buyers from entering into contracts on properties under foreclosure.
“That speculative investor on the margin may choose to not to engage in that activity, which means there’s the potential that you could have some weakness in demand, particularly in the lower-end speculative range of the housing market,” he said.
…
A silver lining has appeared in the dark cloud of the Great American Foreclosure Fiasco: Reporting on the story at the Nation’s top newspapers has been outstanding!
Winners and losers from a foreclosure holiday
By Elizabeth Razzi
Friday, October 15, 2010; 8:39 PM
The foreclosure machine - which turned out to be more automated than most would have guessed, with some processors admitting to signing off on key documents without giving them a glance - threatens to grind to a halt as some of the nation’s biggest banks are forced to reexamine their document-handling processes. Despite calls from activists and some members of Congress for a nationwide moratorium, foreclosures are still proceeding. But Bank of America and Ally Financial (formerly GMAC) called a moratorium on their foreclosures as they review past transactions. J.P. Morgan Chase is reviewing loans in 41 states.
To proceed with foreclosures, banks must be able to document that they really do hold titles to the homes in question, and that they have followed the proper legal procedures in seizing the properties.
Although few expect that many homeowners in default will ultimately be able to remain in homes they can’t pay for, in the short term, delays in the foreclosure process offer them some respite.
Many analysts warn that a prolonged foreclosure moratorium could damage the housing market’s recovery by delaying the day when supply, demand and home prices come into balance. And there could be untold damage to banks and the financial system if the banks can’t find a way to resolve this problem quickly. But, in the short term at least, there are other potential losers and winners from a foreclosure holiday.
…
‘Bank of America and Ally Financial (formerly GMAC) called a moratorium on their foreclosures’
GMAC is foreclosing like crazy in N AZ. A young man I was working with on Thursday got a call from an REO broker we both know. Seems his landlord hadn’t been paying the mortgage, it went to trustee sale on Wednsday and was already listed the next day. The broker tells him, ‘let’s talk cash for keys.’ It’s a BOA house.
The days of FBs meekly handing over the keys and doing the walk of shame out the doors once they get the NOD may be over. They have every incentive now to stay put and demand that lenders produce actual proof they own the loan - a process that could take months or years, during which the FBs live rent free.
in this case, Sammy, the occupant was a tenant, not an FB.
Understood. But the tenant can still tell the lender they want to see proof that the lender holds the mortgage before meekly complying with any eviction order.
Good for Wells Fargo…
Wells Fargo: We Won’t Stop Foreclosures
Bank Says It Won’t Halt Foreclosures Despite Employee’s Testimony that She Signed 500 Documents Daily Without Reading Them
(AP) Wells Fargo & Co. does not plan to halt foreclosures despite an employee’s testimony that she signed up to 500 foreclosure documents daily without reading them.
The employee of the San Francisco-based bank said in a deposition taken last March that she signed between 300 and 500 foreclosure documents per day, verifying only her name and title.
Such practices have been called into question by attorneys general in 50 states. They have accused mortgage companies of violating state laws.
Wells has not halted foreclosures and says it has discovered no problems in the legal documents used to process them. The company said earlier in the week that it would review pending foreclosures for potential defects.
“Our records show that Wells Fargo’s foreclosure affidavits are accurate,” said company spokeswoman Vickee Adams. When the company finds employees that don’t follow procedure, it takes “corrective action.” She declined to comment on whether the Fort Mill, S.C.-based employee, Xee Moua, still works for Wells.
The banks last stand?
It won’t be just the banks. Given all the others that were in on the fraud - realtors, assessors, mortgage brokers, and FBs themselves - the legal mess will be collossial and could drag on for years.
“Our records show that Wells Fargo’s foreclosure affidavits are accurate,” said company spokeswoman Vickee Adams. Now, where’s my bonus?
“Our records show…” or “We are unaware of any issues” translate into, “We’re willfully turning a blind eye to the issue so we won’t have to deal with it.” All of the TBTF banks were rushing to create, bundle, and sell mortgages. There was tremendous fraud and errors baked into the process, given the pressure to “hit the numbers.” Now all it’s going to take is for law firms to start getting former Wells Fargo robo-signers under oath and deposing them, and the ugly truth is going to spill out. And juries will not be sympathetic with the banksters.
Better stock up on popcorn before the Fed’s newly-engineered inflation hits corn prices!
I will take grim satisfaction in seeing all those unemployed Obama voters spending their last $7 on a can of beans, thanks to Ben Bernanke.
So what if they find a few mortgages that are not in order? They’ve plenty of others to work on and can sell the stinkers to the government.
Freddie Mac and Fannie Mae are like drug-resistant syphilis and gonorrhea. With each dose of stimulis money the disease just comes back stronger. Eddie can probably provide some personal insights on the subject.
Flashback to 1870 as Cotton Hits Peak
Cotton prices touched their highest level since Reconstruction on Friday, as a string of bad harvests and demand from China spark worries of a global shortfall.
Stocks end mixed as financials stumbled for a second-straight day while a big jump in Google shares lead technology stocks and the Nasdaq higher. Plus, cotton hit a 140-year high. Mike Reid wraps up all of the day’s market action.
The sudden surge in prices—cotton has risen up to 56% in three months—has alarmed manufacturers and retailers, who worry they may be forced to pass on higher costs to recession-weary consumers.
The December cotton contract hit $1.1980 a pound minutes after the opening of trading on the IntercontinentalExchange Inc. on Friday. It is officially the highest price since records began back in 1870 with the creation of the New York Cotton Exchange.
Peak cotton? That’s one that wasn’t on my list of suspects.
B…b…but Ben Bernanke said we need more inflation. QE2 is inbound as we speak.
He already got himself plenty — gold, cotton, oil, etc. How much more does he need?
One can only imagine that every slave from eight to eighty were working from dawn to dusk, and probably lots of whites too while cotton prices were peaking.
With the ongoing water shutoff to the CA central valley, US cotton production is probably going to trend downwards permanently.
Where’s most cotton grown these days? Egypt? India?
Cotton consumes more water than any crop I believe…Get it out of California…
Not as much as rice! Which is also grown in the central valley.
“rice!”
In the middle of an extended drought. With state-subsidized water “rights” to water stolen from headlands elsewhere. And diverted to mega-land corporations. Now headquartered offshore.
Your tax dollars at work.
its hard to see this extended drought that we are in the middle of from mammoth lakes.
using mammoth mountains snowfall history that goes back 41 years we see that the 40 year average snowfall is 342″
09-10 - 557.9″
08-09 - 470″
07-08 - 333.5″
06-07 - 222.0″
05-06 - 578.54″
04-05 - 570.1″
current 6 year average - 455.32
the 6 year average is 33% higher then the 41 year average.
how would you know we are in the middle of an extended drought? got a crystal ball?
ahansen — Isn’t it amazing how California ag grows wetland crops out in the middle of a desert? You’d think it would be far cheaper to grow them where it rains a lot…
Actually most California rice is produced north of Sacramento adjacent to the Sacramento river, so there is plenty of water. The thing I hate is that rich rice farmers receive the lions share of federal subsidies in the hundreds of thousands each year. I had a patient once who was a subsidized rice farmer, enormously wealthy, served on local band boards, etc. I just don’t understand why those subsidies aren’t cut. Can a few California farmers have that much influence?
You’re in the EASTERN Sierras, remember CT? The ones that block the easterly precipitation to the central part?
Mammoth is Mammoth because of its historic snow pack. (Sign in the restroom at the old Texaco station next to KMMT= “Flush twice, LA needs the water.”)
The rest of the state, particularly the lower half and Central Valley, is, and has for the last fourteen years been, skewered.
http://www.water.ca.gov/drought/
ahansen,
yes, definately the eastern sierra. i have been a pilot flying out of this area in very light aircraft since the 1980s. Micro-meteorology has been a keen interest throughout.
the great majority of our weather arrives from the south-west, meaning fresno. when weather comes from the east it is generally referred to as a “tonopah low” and the difference is we can expect a couple of inches vs a couple of feet with the prevailing pattern.
lakes in the sierra are far larger then a decade ago. the palicades glacier is growing and we have local year round snow in places that don’t last in drought years.
i looked at your link and suspect environmental bias from our state govt.
this season it snowed from fall till summer and the snow has started already. this week we will get our 3rd serires of storms already. they are all from the west as is typical.
Not as much as ethanol production.
“Fuel to food to fuel” energy production. Sounds totally insane, until you figure out the role of government subsidies in the production chain…
Perfectly stated Ahansen…
“Cotton consumes more water than any crop I believe…Get it out of California…”
Forget cotton, the progressives in CA are causing far more damage…Get them out and maybe I can move back some day.
From the Song “levelland” by James McMurtry (Larry’s son)
Grandad grew dry land wheat, stood on his own two feet,
“till his mind got imcomplete, and the put him in a home.
Daddy’s cotton grows so high, sucks the water table dry
Rollin’ sprinklers circle ’round, bleedin it to the bone.
Less than 4% of the cotton in the country is grown in California. We could do without it.
In 2007, cotton was grown in 90 countries. In 2006/07, the four main producing countries were China, India, the USA and Pakistan and accounted for approximately three quarters of world output. If we added Uzbekistan and Brasil, six countries would account for 83% of world cotton production.
http://unctad.org/infocomm/anglais/cotton/market.htm
Wiki: “Don’t ask, don’t tell”.
Ooops, this was meant to be a response to Spook’s post just above this one.
So the bank owned house I was looking at, which went officially on the market back in August at 675K, is still for sale. When talking to a realtor about it she said “Well, put in a good offer - you don’t want to offend them. Id say about 665K should be fair”.
Last week they reduced the price again, now listed at 575K. So much for not offending them, huh
If you arent offending somebody your offer is too high.
I didn’t think it was possible to offend a bank. Gosh, the things one can learn from Realtors!
IMO, we are in a tricky time when it comes to pricing REOs. For example, I see one new house that was built and bought on complete speculation for $1.25 million, didn’t sell at $650k, and now is being repriced. I am hearing mid-500s from the brokers. But how can you finance that, and are there enough qualified buyers for that market? Another was refinanced up to about the same level, $1.25 million, foreclosed and listed finally down to mid-400s and didn’t sell.
I know a single guy who was recently pre-qualified for a VA loan. He makes around $80k/year and he was approved at $350k. Even he thinks this is insane.
What’s getting people going is prices in some cases are down 50% or more, and there’s this thinking that we must be near the bottom, or there’s easy money to be made. But that’s ignoring supply and demand, and now we hear from DC and the REIC that the foreclosure pipeline must keep flowing to save the economy! It looks like the great overshoot is in the works, and there ain’t no telling by how much. Here’s one example; a house in western AZ last sold in 2006 for just over $100k. Back and forth through the MLS and auction circuit, and it looks like it will be accepted by Fannie Mae at $15k, including fees. Point is, it doesn’t matter what it has sold for, been appraised at, or how much of a loss the lender is taking.
“But that’s ignoring supply and demand, and now we hear from DC and the REIC that the foreclosure pipeline must keep flowing to save the economy! It looks like the great overshoot is in the works, and there ain’t no telling by how much.”
Thank you, Ben. Unless these DC policy makers are just blowing more smoke, it sounds like the move is on to convince everybody just how important it is to keep the foreclosures moving on to the market. Given how many home owners are in default, coupled with the ever-dismal labor market situation, I don’t see how that can’t lead to either a rapid buildup in inventories, or another leg down in prices. But then I can’t claim to know what kind of market manipulation the five or so U.S. banks involved in the Burger King boy foreclosure fiasco might have up their sleeves.
“Point is, it doesn’t matter what it has sold for, been appraised at, or how much of a loss the lender is taking.”
You have commented a number of times about large financial institutions withholding vacant REO from the market, all the evidence of which I am aware suggests this is occurring.
The result is to create what I call a “liquidity freeze”:
- Very few homes are on the market in any given area, thanks to REO inventory withholding;
- Few buyers are able to qualify at 2006 prices, thanks to the reintroduction of loan underwriting standards;
- There is a very low volume of sales transactions in any given area, thanks to beliefs among the few would-be sellers that they may still be able to sell near 2006 levels coupled with a dearth of buyers willing and able to pay those prices;
- The low transactions volume results in a severe shortage of recent sales transactions on which to base price formation.
Without sufficient recent comps, nobody knows what homes should sell for, increasing risk to both buyer and seller, making every sale a crap shoot.
Happy gambling to anyone currently in the market!
but…but…but it sold for $$$$K in 2005!
Well the thing is, in many markets we may well BE near the bottom. It’s certainly the case in my neighborhood that we’re nearer the bottom than the top. But prices are NOT, NO WAY, NO HOW, going to “bounce back,” at least not in real terms.
It was all fun and games until MERS circumvented one of the local government’s cash crops. Namely fees!!!
Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In the State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages
for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.
Here’s the complaint in PDF.
www dot msfraud dot org/law/lounge/California-Qui-Tam-False-Claims-Recording-Fees.pdf
This article discusses in detail the banker’s scheme to privatize the property title record keeping system that has existed in this country for more than 200 years.
The goal is to turn real property into a commodity that can be hedged or traded at near light speed. It seems that local jurisdictions may have to speed up their property tax collection efforts.
How’s that working out?
The Mortgage Foreclosure Crisis
Written by Charles Scaliger
Friday, 15 October 2010 09:50
Let us be blunt: The mortgage foreclosure crisis, which first burst into full public view with Bank of America’s suspension of all foreclosures only a few days ago, has the potential to completely destroy the American real estate sector in an epic legal and economic meltdown that would make the crisis of 2007-2008 look like the proverbial Chinese tea party.
…
A note, like any claim on assets, must be properly signed to have the force of a title. If it is sold to a new owner, it must be signed again, and so forth. Only thusly can what is called the “chain of title” be legally established.
But many, perhaps most mortgages that have been sold and repackaged again and again over the last few years were done so electronically, thanks to MERS, and typically lack the requisite signatures. Their chains of title, in other words, have been broken.
…
According to Gonzalo Lira, broken chains of title invalidate the original loan. An interesting legal theory that would have great appeal for underwater FBs - let’s see if juries buy it.
“The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially the operating table where the digitized mortgage notes were sliced and diced and rearranged so as to create the Mortgage Backed Securities. Think of MERS as Dr. Frankenstein’s operating table, where the beast got put together.
“However, legally—and this is the important part—MERS didn’t hold any mortgage note: The true owner of the mortgage notes should have been the REMIC’s.
“But the REMIC’s didn’t own the note either, because of a fluke of the ratings agencies: The REMIC’s had to be “bankruptcy remote”, in order to get the precious ratings needed to peddle Mortgage Backed Securities to insitutional investors.
“So somewhere between the REMIC’s and the MERS, the chain of title was broken.
“Now, what does ‘broken chain of title’ mean? Simple: When a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a Mortgage Backed Security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title”.
“You can endorse the note as many times as you please—but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically on the note, one after the other.
“If for whatever reason, any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.
“To repeat: If the chain of title of the note is broken, then the borrower no longer owes any money on the loan.”
I have always had the theory that something was faulty about
what they were doing in the loans made into securities process. Why the big push to change the notes or transfer the paper to Fannie and Fred ,or loan modify . I could never understand why there was a avoidance of standing law .Hank Paulson was acting strange ,Congress was acting strange .This bail out BS has always smelled of Obstruction of Justice or cover up to me .
“divest[ing] the borrowers of the right to know who owned the promissory note”
Good question. Do borrowers even have the right to know who owns their note? Its obviously necessary for every mortgagee to know who the servicer is, and its necessary to know once heading into foreclosure that indeed the correct party is doing the foreclosing. But otherwise?
It is a natural law that a peon know who his master is. This stuff just goes against nature.
We are getting a great real world education in Benjamin Franklin’s dear school for fools on the practical importance of title insurance. I had always thought the requirement for a buyer to purchase title insurance was a REIC-sponsored scam to systemically increase the flow of money from greater fools into the REIC’s coffers: It seemed like a mere formality to establish whether title to a home was clear, especially if the home previously sold within the past decade, as presumably a title search would have been conducted at the time of previous sale.
But now we learn that there are some market conditions under which who owns the title to the home you are buying is about as clear as mud!
In Louisianna it has always been so.
Sorry for the double post - phone cut me off. Anyways, speaking of bank owned houses - What is your formula for an offer? Do you go strictly ARV x .60, and if so what IS the true value in his market? Ive heard of different combinations of things, just curious on your advice.
Personally, we haven’t been using any particular formula. Our offers have been based on what the houses were worth to us.
Also, while we hope to pay all cash, we would consider a mortgage up to 1x annual income, but no more than that.
We won’t pay more than what we think we could resell it for fairly quickly - not that we’re looking for a quick flip (hardly), but you never know what life will bring.
We have yet to see one of our offers accepted, but since prices dropped a lot after the tax credit expired, we feel like we’re getting closer. Hopefully the fallout from “foreclosuregate” will tip the market just a little more in our favor.
“…what IS the true value in his market?”
See my post above on liquidity freeze.
But to answer your question more directly, the market is thin and nearly frozen over. Under these conditions, each transaction is Nash bargaining game between buyer and seller played out in isolation. If you are buying, you need to set a reservation price on what possession of that home is worth to you, and stick to it; otherwise, prepare to get fleeced.
Thank you everyone! I appreciate your input.
Martha Steward went to jail for insider trading . Mozillo gets to pay a portion of his ill gotten gains and here comes a get out of jail free card .So lets see ,why don’t we let financial thieves return only a third to a half of the ill-gotten gains to get out of jail free ?
Mozillo was one of the biggest players in this disaster and he only has to return a portion of the his pump and dump gains with no jail time ? Tell me that there is any Justice in this World .
How much money has Barney Frank returned?
A lot less than a third, I’d bet.
Not that Mozillo shouldn’t be in the pen for life, with all of his assets seized…
Rich people hardly ever go to jail.they just pay off the politicians with a portion of the money they ripped off.In business they usully define this as a cost of doing business.
Martha was great PR for a show of law enforcement. If you’ll send the uber-homemaker to jail you must be tough.
- Small fry go to jail.
- Big whales keep running the financial system.
Is it really all over for Angeleo? Is he really going to skate?
Stay tuned, and look for the lawyers and class-action lawsuits to come onto the scene.
Karma.
Sure some civil lawsuits will take place ,but no jail time it looks like
for one of the biggest Kingpins .That brings me to another point .
The new buss word for fraud these days is “systematic problem .” This is a very clever diversion from calling something what it is . I think we all remember when the Banks/Middlemen got bailed out by the
taxpayers the first time by Tarp and other hidden programs . That time it was bail them out because of the “systemic risk” of a total breakdown of the system . What followed was watching the Bankers and Middlemen continue to abuse the public and enrich themselves and same old casino games .
The real truth was after de-regulation the Bankers/Middlemen went wild with faulty lending and fraud and they created a Ponzi-scheme of epic size in the financial markets . It was important to bust the fraud and purge the thugs when the meltdown first started instead of the government opting for bail-outs and Obstruction of Justice that was blackmailed by the EX-Goldmans guy
by the name of Paulson who all of a sudden became the Treasury Sec. at one of the most critical junctures in history . And now the moral hazard of those decisions are coming back to haunt in that the thugs couldn’t even foreclose within the framework of the law .
The 1.6 trillion in loans that were conceived by voidable contracts were the by=product of a financial system that had gone haywire.
Of course from day one this has always been a issue of the originators and Middlemen of loan bundles being liable to take back the fraud .
Many Borrowers contributed to the “liar loan ” fraud ,but what can you say about a system that even allowed it ? The artificial prices
of real estate was a by-product of mass fraud .
For the Politicians to be so intent on saving the corrupt system as the immediate reaction to the problem was a big mistake IMHO because it was corrupt beyond tolerance . So ,the public will continue to have the fall-out from this corruption that the Politicians thought they should save .
“Many borrowers contributed to the ‘liar loan’ fraud, but what can you say about a system that even allowed it?”
I say this a sign that the system is in the process of being restructured.
A trend that can’t go on forever will at some time come to a halt. The trend we were on couldn’t go on forever so it has come to a halt.
Is this a good thing or a bad thing? In my view it is a good thing - as seen in the LONG TERM. But it isn’t going to be a lot of fun for a lot of people; The thinking of a lot of people is that the unsustainable trend we were on is going to somehow reassert itself.
I don’t think it will, I don’t think it can. And that’s where I am placing my bets.
Kind of a back door way for the unsustainable system and folly of Obstruction of Justice and allowance of corruption to reassert itself ,but still the thugs are in control .
Its like having a bad kid who never gets punished and the parents continue to protect the brat and finally the kid goes to far and society ends up punishing the kid .
“… but still the thugs are in control.”
It’s three weeks until the November elections. Maybe the current batch of thugs will be thrown out so space can be made for the new batch of thugs.
“Martha Steward went to jail for insider trading.”
Technically it was for obstruction of justice or something like that. She PO’ed the judge.
The case against her for insider trading was not strong enough to present to a jury.
She lied to the FBI and was convicted of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators.
Tell me that there is any Justice in this World ??
Selective Justice…
So lets see ,why don’t we let financial thieves return only a third to a half of the ill-gotten gains to get out of jail free ?
your sentiment is absolutely correct. it ALL needs to be taken from them and then they should go to prison. as long as there is no penalty (this is essentially no penalty) they will continue their criminal activity.
Martha Stewart didn’t pay off the right politicians.
It was a civil suit, thus no jail time. There is a criminal investigation still pending.
http://www.telegraph.co.uk/finance/economics/8067701/Fed-chief-Ben-Bernanke-hints-at-more-stimulus-to-fight-US-deflation.html
Benny and the Inkjets preparing to spew trillions more Obama Bucks to “fight deflation” (and escalate the Bush-Obama-Republicrat War on Savers and punishment of the fiscally responsible).
Got gold?
Gold is taxed as collectible, and taxes are going up. Not a very attractive proposition, at least not a basket to put all your eggs in.
Actually, in an increasing tax environment, gold is a perfect investment - it holds its value vs declining currency, has little risk (at least from a historical perspective from Biblical times, anyway), and pays no dividends that will be taxed. Of course it isn’t so good if you think the end of the world is coming, then you need farmland and lots of guns…
…gold pays no dividends, true. If you hold ETF, there’re taxes when ETF fund rebalances. If you hold physical, you’ll pay for storage, money out/ no money in. Once you liquidate (what use is it to hold gold forever?), the taxes hit in a big way. It’s not the best way to preserve wealth, maybe a portion of allocation but not the majority of it.
Inflation is also a tax, on savings. The Bush War on Savers has gone into high gear. Responsible, productive members of society must be spared no punishment. Thank you, Republicrats!
The Bush War on Savers? LOL. Last I checked it’s 2010 and Barry was elected in 2008.
BTW you want to get a better return than the 0.0000015% APY on your checking account? Invest in something else. It could not be any simpler. But as with all other things today, it’s easy to sit back, be a victim and blame someone else for your troubles. Taking action and owning your own destiny requires too much work. Much easier to sit back and complain.
Legal tender in the form of gold is not taxed on the gold content but is taxed on its face value.
For example, a one ounce gold eagle has a $50 face value, is legal tender, and has a gold content value of around $1370.00.
If one determines themselves to be a taxpayer, earns an amount over the filing requirement($12000),is paid 241 gold eagles(face value $12050) then tax must be paid on the amount of $12050.00.
Why is one not taxed on the gold content of $330170?
Because the tax code is written in terms of $’s not ounces. A taxpayer must earn income in terms of federal reserve notes in order to be taxed on those notes.
Lookup:
Robert Kahre vs. the IRS and DOJ
See:
http://tinyurl.com/2c8wv2z
The massive upswing in government purchases of bonds during the past month has opened my eyes even wider than previously.
Not good.
Guys, I need your advice.
Inflation is coming - at least, that’s what the markets think. Commodities, FX, stocks, and now Treasuries… My bank is advising clients to buy-buy-buy assets, since the amount of cash on hand is still very high.
2-3 years ago we had raging debates on this board about deflation versus inflation (via the currency debasement/collapse). My mind then was that it all depends not so much on what economy “should” do as on TPTB, because if they decide to print enough moolah, the dollar will be toast. Given that TBTB (aka the really rich people) hold real assets and thus win in the inflation scenario while losing big in the deflation scenario, to me it was a no brainer that if given a stark choice - deflation or inflation - they will debase he currency. Of course it means the rest of us are screwed, but since when did TPTB ever concerned themselves with Joe 6p wellbeing?
Well, it looks like the time has come. TPTB are getting serious about letting the genie out of the botle…
Thus a question to the board. What happened in the 70s? From what I’ve heard, stock market underperformed vs. inflation. What happened to RE? Did it perform better or worse than stocks?
Also, in your respective markets, are there pockets of RE that are easy to rent and will cash flow? Which towns / neiborhoods? NYC is still way overpriced, renting is much cheaper, and maintenance is a killer ($2 per sq.f.).
“What happened inthe 70s? From what I heard, stock market underperformed vs. inflation.”
During the seventies, due to inflation, companies experienced an increase in the nominal value of the inventories they carried. They would buy products at one price, allow time to pump up its value, then sell the products at a higher price. This showed rising sales and rising profits (along with rising taxes) but in reality there was no rise in the number of items sold.
But then, after the inventory was sold off, the companies had to restock their inventory, which meant they had to pay HIGHER PRICES for the goods they were going to sell. And this is how it went: The companies chalked up higher sales and payed higher taxes on these higher sales but in the end they weren’t making any money because they had to spend more of the money they made on the previous sales for the new stuff they were going to sell. They were paying a lot of taxes but weren’t making a lot of money.
Investors were not amused.
Wages also went up but wage earners weren’t really making any mor REAL money because the cost of living was also going up.
Also what went up, along with worker’s wages, was the wage earner’s TAX BRACKETS. And the various government entities just LOVED THAT.
Inflation pumps up NOMINAL wages which pumps up ACTUAL taxes. The first is not real but the second is very real.
But unforutnately for these various government entities - and for our society at large - deflation does just the opposite. Tax revenue rise during an inflationary environment but they fall during a deflationary environment - which is what we now experiencing.
What happened to government wages vs. private sector wages?
Did they rise in tandem, or were the government wages stalled compared to private sector? (That’s what happened in ’90s in Russia, most people worked for the public sector and their wages did NOT rise at the same pace as inflation.)
“What happened to government wages vs. private sector wages?”
I don’t know.
But if you are wondering what is the future of government wages today …
If there is a SHORTAGE OF MONEY coming in then the future for those who depend on there being an abundant supply of money coming in looks dim.
True not only for government sectors but for all sectors.
I started, in a local gov’t job, in 1980. The starting salary was 14,300/yr.. COL raises were 7%-71/2% in 1981-83 and over 5% throughout the 1980’s. Starting pay increased to $35,000/yr by 1990. Basically, anyone who retired in the early 80’s at half pay, got creamed.
NY-
Government wages were substantially lower than private, but private jobs were hard to come by in the late sixties and early seventies. A job with the government was a job for life–hence a lot of hippie freaks working for the post office.
Eventually COLA allowances to keep up with rising inflation were instituted for those on fixed incomes (pensioners, SSI, government pay grades, GI benefits, etc.)
And more germane to the conversation, RE prices went up substantially–until no one but the Japanese and Farsi could afford to buy here. (And we all know how well THAT turned out….)
Now, only the US government can afford to buy. And “they” can’t afford it either.
Since every viable currency is pegged to the USD in some way, and few of us have the inclination to follow money transfers around the Fourex picking up crumbs, it’s probably best to buy a bicycle, stock up on durable/barterable goods and keep a low profile for the next decade or so.
Or something.
RE that are easy to rent and will cash flow ?
Which towns ??
#1…Good News, the answer is yes….Bad news, don’t expect much in a Net rate of return (cash-on-cash) depending on how big of a investment you may be talking about…Really, to complicated to discuss here in any constructive way but, my philosophy is I like the concept of someone paying off a mortgage for me…I can make the argument that the property need not go up in value at all to justify the purchase over the long term…This is really a simplistic answer to your question given all the variables but I think you get my drift…
#2…Depends….I would stay away from small towns…Large metro’s, stay close to the urban core and the job centers…Medium size towns I would approach a little differently…Get a map of the town and lay it out on your table….Put a big red circle around;
#1…The major hospitals
#2…The city center (government)
#3…The universities or Jr. Colleges
#4…The largest Library
Try and “center punch” the location between all these entities and focus your attention for a acquisition there…
Hope this helps and makes some sense…
How does California look in that regard? San Diego? LA? San Jose?
Oh, and I’m not looking for a place to get a large net return. Rather, park some cash, break-even on cash flow, if worst comes to worst have a place to move into.
I can’t speak specifically about San Diego but I think it could work with the parameters I outlined above…San Diego has the weather but I would be concerned about military cut backs…I think pbear could offer more and better advice…
As far as silicon valley (San Jose) its still pretty expensive although there are many attractive foreclosures and short sales…
You last question promps another one from me…Please clarify, is this for investment or for you to ultimately occupy ??
At this point in time, “investment” aka capital preservation is the main goal. Although I think ideally it would be both? Purely investment in a far removed place seems riskier than something that I could also use.
I wanted to buy a place to live in close to work. But our market is still overpriced. On the other hand, I always loved sunnier climates, and the only thing keeping me in NY is a job.
So looking to buy something as an investment which can also be used in the future as primary residence if TSHTF, if not by me than by my mom.
Cash is more portable than a house. You do not preserve your capital by spending it.
Would you put 100% of your net worth into cash?
All I’m saying is I think RE should no longer be zero. So lets hear from the local knowledge which areas look investable (is that a word?)…
Cash is more portable than a house ??
Yeah, but you can’t live underneath cash….
“Try and “center punch” the location between all these entities and focus your attention for a acquisition there…”
Scdave, thanks so much for your advice, it makes a lot of sense.
Perhaps I should just keep it simpler, divorce the “investment” intent from “possible future personal use” part, since the two do not necessarily match.
divorce the “investment” intent from “possible future personal use” ??
The two sometimes are not interchangeable but they can be…
If you think that this is the early 70s, then you should lever up with the biggest house you can find and a low interest fixed 30 year mortgage. Any house, just get in while you can.
Personally, I do not think this is the early 70s. That was one hell of a party.
Can’t really lever up, still need to afford the mortgage, LOL.
Even in the inflationary scenario, the house payment still needs to be affordable. I think now it’s safe to say there WILL be inflation, we just don’t know how soon (damn you, BB). What good is the biggest house on the block or a condo in NYC if you can’t afford your payment if anything happens (hello, job insecurity) and won’t be able to rent the house out while downsizing and riding it out?
NYC is still overpriced. Hence very risky to “lever up” here.
Maybe there will be inflation. What we actually have is talk and failed efforts to keep the credit expansion going. I propose that if we do have inflation in the near future, it will only make the price of real estate go down, because it will not end up in (most) people’s paychecks and will make necessities more dear.
Why would wages rise during the inflationary 70s, but not rise if we had inflation now?
Why would wages rise during the inflationary 70s, but not rise if we had inflation now?
because it’s how much you bring in for your employer that mostly determines what he’s willing to pay. rising prices don’t have much to do with it.
it could reach a point where labor doesn’t bring in enough money anymore, and he simply has to go out of business.
Outsourcing allows companies to forgo increases in salaries.
because it’s how much you bring in for your employer that mostly determines what he’s willing to pay.
Then why were wages flat while productivity skyrocketed during the last two decades?
And this doesn’t explain why wages increased during the 70s but aren’t expected to in future inflationary times. Were people ‘bringing in’ more for their employers in the 70s? Why and how?
Outsourcing allows companies to forgo increases in salaries.
Wasn’t there outsourcing, and undercutting of our wages by foreign countries, in the 70s?
Then why were wages flat while productivity skyrocketed during the last two decades?
because increasing taxes and regulations erode the value of what is produced. a farmer in the USA might produce more grain per acre than a farmer in england, but if taxes and regulations take a bigger cut, the production has less value. the increased productivity will show up on a graph, but the decreased value of it won’t.
———-
And this doesn’t explain why wages increased during the 70s but aren’t expected to in future inflationary times. Were people ‘bringing in’ more for their employers in the 70s? Why and how?
the value of their labor was more because taxes and regulations were less.
more taxes and regulations have eroded the value of labor more than the value of increased productivity.
Wages increased in the 1970s? Say what?
“Stagflation” was coined in the 1970s.
tj
First you say productivity determines your salary, then when that’s shown to be wrong, you promptly say it’s taxes and regulations. Taxes were, of course, much higher during the early part of the post WW2 period, when personal income was also rising rapidly. I’m sure you’ll have a new (totally unsubstantiated) reason for this.
I look forward to your next baseless, ahistorical explanation- you’re doing an excellent job of showing yourself to be wrong.
First you say productivity determines your salary, then when that’s shown to be wrong,
you didn’t show it to be wrong. i’ve said from the beginning that taxes and regulations affect productivity. if taxes and regulations would have remained the same, then increased productivity would have resulted in higher wages.
———
you promptly say it’s taxes and regulations.
taxes and regulations have to be considered because they affect productivity.
——–
Taxes were, of course, much higher during the early part of the post WW2 period, when personal income was also rising rapidly. I’m sure you’ll have a new (totally unsubstantiated) reason for this.
the effect of rising or falling taxes isn’t seen instantaneously.
In the 1970’s, California real estate went through the roof!
My parents bought a condo in Los Gatos for $55K in 1973. They sold it in 1979 for $185! The real estate bubble at that time never “popped” but merely went into a plateau for most of another decade.
My father bought a house in Long Island NY for $29k in 1969. Ones down the street are for sale in the ~$300k range.
Good morning and Greetings. Life is looking good at Land’s End.
I enjoyed reading yesterdays posts. We are a wyld bunch. I have nothing profound to add after all that except enjoy this life like your lights are going out tomorrow.
The Country Kitchen in this small town has a Saturday/Sunday morning brunch to kill for and I am unpacking and moving in and need little or no excuse to hurt somebody.
Out of my way !!
Why did the chicken cross the road?
To escape from hungry mikey.
“…enjoy this life like your lights are going out tomorrow.”
Thanks for the chuckle with a deeper message.
Mikey,
I’m so happy for you, son. You’ve been waiting for this weekend for a LOOOONG time. Enjoy every box of your move-in!
NYchick ….Great question, but you can’t say that the situation now is the same as the 70’s . I know when interest rates were high real estate
didn’t perform very well .Now you have excess supply ,foreclosure problems and lack of demand and borrower inability to afford prices in many markets
still. I just think unless you get wage inflation and the unemployment situation improves you are not going to get ongoing bull markets in stocks or real estate . Maybe if the borrowing rate goes down to 2% .
Not looking for a bull market, rather for ways to preserve, a relatively safe haven in this environment. RE bought at a decent price can be a good way to do it, something tangible.
Rents will go up if inflation kicks in, so locking in at least some portion of the living costs seems like a good move, but it’s very difficult to justify buying in NYC. NYC sucks. Prices are too high, maintenance is outrageous (did you know the doormen have a union, with generous health and guaranteed pension benefits?!! - all paid for by your maintenance), and it’s impossible to rent out coops for any length of time. If you lose your job, it will be impossible to pay the morgage or rent out the apartment… Besides, the local market is so closely tied to financial industry, any hick-up in the markets and NYC employment will tank, then all bets are off.
On the other hand, prices in places other than NY had been falling for years. There must be pockets of the country where buying an affordable piece of RE is finally making financial sense… Some place warm, that’s not a future Detroit.
There cannot be one in a fiat system (or even in a gold system because they will “confiscate” precisely at the moment you need the system.)
My suggestion: earn more than you spend. Has worked for centuries!
“Earn more than you spend”?
I do, so what? The question was, where to park some cash to sit this one out. Having 0% RE in US no longer seems like a smart move at this point in time, given inflation risks, IF there’re places now where it actually makes financial sense to buy.
I’ll rephrase my suggestion since you don’t seem to be listening: ensure that you continue earning more than you spend.
That one also has worked out well for centuries.
I’m not listening, LOL? It’s you who’s going off on a tangent that’s while factually correct does nothing to answer the question I’ve asked.
The question is not about job prospects, earnings, or spending habits. It’s about preserving what we have already earned in the inflationary environment.
The gold bubble is made up of dork-tastic people exactly like you!
“preserving what we have already earned”
That is precisely the point, there are no guarantees for you. Don’t put all your eggs in one basket, that has worked for centuries.
NYchick .I think it’s possible to get a nice foreclosure that might be a hedge against inflation if you get the right price in areas in which rental demand is going to be there .Everything is still a risk of course .Someone I know just bought a foreclosure
at 15% of high boom value in a area near a University . The property didn’t have one thing wrong with it and they got title
insurance also .But ,nobody knows how this paperwork problem and chain of title with foreclosures snag is going to play out .
My guess would be that somehow the Banks and Middlemen will be relieved of the burden of their acts and the lawmakers will come up with some way to get around it .
Oh, just buy some crappy house in Tennessee or Oklahoma if you are so worried about being homeless. You can get one for $50K in Detroit but there are no J-O-B prospects there
Get a grip, people!
Haven’t we slapped the inflationista’s enough here to get them to understand?
Doesn’t anyone freakin’ get it?
We fired our guns and the British kept a comin’.
There wasn’t nigh as many as there was a while ago.
Why so angry, Pussy Cat? I don’t want to get into inflation vs. deflation debate again. You have your opinion, more power to you… Meanwhile I had my family’s entire net worth wiped out by hyper inflation, so I have my concerns over how long exactly US can remain Japan, given our friendly FED with its favorite new toy, the printing press… Lets agree to disagree about this, alright?
I’m more interested to hear from those who live in the areas which already experienced huge price drops (unlike NY), and where it actually might make sense to buy. For diversification / capital preservation purposes. Location - not overpriced, local jobs, easy to rent, cash flows.
We have such a wealth of local knowledge on this board. This is what made HBB invaluable, the news from the trenches…
There will be aging Baby Boomers that might just make the choice to buy a 50k joint in a area without jobs .Don’t they have 10k joints in Detroit . I’m not so sure where the demand is going to go for the about to retire crowd .
No, let us NOT agree to disagree. That is bullsh_t. There is only one correct position which in this extraordinarily specific case is deflation.
It took me 6 months to get my Serbian friend to agree that I was right. He went through hyperinflation too.
People that go through hyperinflation see inflation everywhere. It’s like a trauma that makes them supremely incapable of seeing the facts on the ground.
This is a psychological flaw which demands an intellectual solution.
You are wrong wrong wrong, sir, you are simply wrong.
Okay, I’m wrong, you win.
Meanwhile, if you have spare cash on hand and would like to diversify into RE, it’s not too wrong to buy a piece of property in the already-deflated-area that cash-flows from day one, right?
As long as fundamentals work… Fundamentals don’t work in NY, but apparently they already do in some other parts of the country.
I agree. Fundamentals do work in some other parts of the country. Unfortunately (for me), I have no interest in being a landlord.
There are many fundamentals that work. I am completely down with that.
I will leave you with a final nugget of extraordinarily basic game-theoretic “wisdom”.
Hyperinflation benefits the “average” person while severerely disadvantaging the supremely wealthy. Do you really believe that in a capitalist scenario this can be a possible outcome?
Hyperinflation would destroy the banks rather quickly. Isn’t the banks what we are here for?
‘Hyperinflation benefits the “average” person while severerely disadvantaging the supremely wealthy.’
It’s a variation on the theme of “Poor Playing Conditions Favor the Weaker Player.” This will not happen in a centrally planned economy like the U.S.
Hyperinflation would destroy the banks rather quickly. Isn’t the banks what we are here for?
Give this man a prize.
No seriously, give this man a prize - even one of those lame McD prizes but this man deserves to get something for nailing at least one thing.
Pussy Cat, you hit the nail on the head. This is the core reason of my concern.
Only it’s the other way around… Deflation severly punishes the super wealthy (prices fall, the value of their wealth and real assets erodes) while the “average” person enjoys a lower cost of living.
Unlike the “average” person, super wealthy hold real assets, land, factories, commodities, means of production. Once everything resets post inflation, they still hold the assets, now denominated in a newly devalued (or even brand new) currency.
Inflation is a tax by super wealthy on the rest of us. Hyperinflation does not destroy their wealth. But nothing scares them more than continued deflation.
It doesn’t have to be hyperinflation. What happened in the 90s was not an accident, it was a planned theft by TPTB that empoverished populations while enriching the select few. Hopefully,TPTB in US are not as criminal, yet.
“…not as criminal…”
Nixon had it right — those who operate above any rule of law are, by definition, incapable of breaking the law. Hence it is impossible by design for anyone who works at the Fed or at Megabank, Inc to commit criminal acts.
I humbly suggest to you, NYchk, as a member of the savings class to start thinking like the member of the wealthy. That’s what wealthy means - member of the saving class.
We are the problem. I’m OK with that.
I’m trying. Hence my desire to diversify into real assets, including RE.
Hence my advice: ensure that you earn more than you spend.
We come full circle. It’s the cycle of the wealthy.
Good luck to you, Pussy Cat, I envy your optimism.
In my world, given that the country will face high unemployment for years, once you lose your job the next one (if you find it) will pay less. You can further decrease your spending, of course, but that doesn’t help with the question at hand - how to diversify what you already have.
Or like Eddie we can “ensure” to remain highly and forever in demand (bwah), but with 25% population un- or underemployed and outsourcing of even the most upper crust jobs intensifying, that’s not a bullet proof strategy either.
Income producing assets - such as RE if fundamentals work - is a much better guarantee than empty rethoric, “earn more than you spend”.
“I’m trying. Hence my desire to diversify into real assets, including RE.”
If wealth is measured in dollars and wages are measured in dollars and wages are being cut and wage-earning jobs are being eliminated then this must mean real assets must include dollars.
Dollars are traded for wages. If you want more bang for your buck then wait a while for wages to fall. The longer you wait (up to a point) the furthur they will fall. This is because we are currently living in a deflationary environment.
If we are to soon be living in a hyperinflationary environment then we must be about to witness a gigantic hyperinflationary increase in wages. I cannot figure out how this hyperinflation will be financed - will be powered - if there is not a hyperinflationary increase in wages to power it.
Dollars are a means of exchange, not real assets. Dollars are a piece of paper with a nice picture on it. It could be beans, or beany babies, or argentinian peso (*cough*)…
Fed can print dollars out of thin air. It’s magic!
And no, hyperinflation does not mean hyperinflationary increase in wages. When hyperinflation happened in the 90s, there was sky high unemployment with no corresponding increase in wages, and people starved. I mean literally, did not have money to buy food, let alone real estate (and no one would sell). Do you think humanitarian aid of a can of beans or spam, some macaroni or rice, and a piece of chocolate was just for show? People needed it. I’ve seen it, I helped my grandmother to distribute humanitarian aid among the hungry shell-shocked people whose lifetime worth of savings were wiped out. I will never, ever forget.
Even during hyperinflation wages do not necessarily rise in line with deterioration of currency. In simple inflation scenario (not hyper, but noticable) it’s entirely possible the wages will rise much slower than inflation. Meanwhile, the purchasing power of dollars will erode.
Cash may be king, but dollars may not remain “cash” with the same purchasing power.
What happened in the 90s was criminal, and perpetrated by the Central Bank. CB “printed”, CB gave out 0 percent loans (sounds familiar?) to enterprises, and then printed some more…
One can only hope the Fed will not be as criminal and stops in time. Hyperinflation does not need to happen, unless the Fed gets criminally negligent. However, to believe that hyperinflation (or any inflation) and wages are inevitably intertwined is naive. History showed time and again, it simply ain’t so.
NYchk,
You shouldn’t park any money anywhere for the long-term.
The Fed is back to its old tricks. After 9/11 they decided to keep real interest rates negative to spur growth and avoid deflation. As a result, people who were trying to preserve capital went searching for yield above inflation. They bought subprime securities and real estate. Most of these people did what the Fed wanted them to do and they are miserable, broke, and their lives are in tatters as a result.
Trade the Fed’s actions but don’t swallow its kool-aid.
‘Cash may be king, but dollars may not remain “cash” with the same purchasing power.’
- Anyone Japanese fool who thought like you missed the chance to enjoy appreciation on the ‘worthless’ but steadily deflating Japanese yen over the past twenty years.
- Anyone who thought gold was different circa 1980 and went all in got to enjoy two decades of watching the value of their horde of ‘worthless’ shiny yellow medal steadily erode.
- There is no special asset class, and once you get the silly idea that some assets are more equal than others out of your head, you can make better asset allocation decisions going forward.
One more thing — just heard Sheila Bair interviewed on NPR, and she dropped a blatant hint that the Federal Government leadership will shed no tears if the next few years are historically unkind to real estate investors. My guess is that real estate investors are getting set up as the fall guys in the next wave of this financial debacle, rather than the many retirees who will need their fixed income pensions to retain some of their purchasing power in order to survive over the next few decades.
No matter: Obviously real estate investors have plenty of throw away money; otherwise they wouldn’t throw so much of it away on overpriced real estate investments.
“When hyperinflation happened in the 90s there was sky high unemployment with no corresponding increase in wages, and people starved. I mean literally, did not have money to buy food…”
Oh, do you mean this was a time when cash was king? Do you mean those with cash got to eat while those without cash got to starve? Is that what you are getting at, is that the point your trying to make?
“Fed can print dollars out of thin air. It’s magic!”
Then why didn’t the Fed just simply print some magical dollars so everyone’s problems would magically disappear?
“Then why didn’t the Fed just simply print some magical dollars so everyone’s problems would magically disappear?”
Do you mean to tell me you didn’t even notice QE?
“Only it’s the other way around… Deflation severly punishes the super wealthy (prices fall, the value of their wealth and real assets erodes) while the “average” person enjoys a lower cost of living.”
The point you were trying to make missed something very important. Sure the wealthy folk who own stuff see their asset prices go down during a period of deflation, but since they are not leveraged to the point where they go underwater and financially drown when asset prices decline, they can hang on until prices come back up. Such folks are known as strong hands. They have positive net worth (aka savings), and hence financial staying power in a “worse than expected” economic collapse.
Contrast that situation to that of a FB whose mortgage is underwater and who just lost his job, which was the only hope he had to continue paying his overpriced mortgage. Such folks are known as weak hands. They have no savings, and hence no financial staying power in a “worse than expected” economic collapse.
And contrast that situation to that of the lender who can foreclose on said FB, then hold onto the depreciated asset as long as necessary until its price reflates. Such institutions are known as too-big-to-fail. They have a bottomless credit line at the Fed, and hence infinite financial staying power in a “worse than expected” economic collapse.
- Strong hands own or work at too-big-to-fail institutions.
- Strong hands beat weak hands every time, hands-down.
Look guys, I really do not want to debate “inflation/deflation” here. You have your opinion - no risk of inflation whatsoever - I have mine.
US is not Japan (export-based economy of savers with “purity of race” severe restrictions on immigration and a real problem of declining population).
And no, Combo, cash was not “king” in the 90s. Say you have $50,000 in the bank, enough to buy a couple of cars, right? Imagine today a loaf of bread costs $1, tomorrow $5, the day after tomorrow $25, then $1,000, then $15,000, then $50,000… Ooops.
But whatever, I’m not trying to convince anyone. For me it’s enough to know that the risk of inflation (currency debasement) should not be ignored, and that if we want to talk “foolish” then “foolish” would be blindly following just one main belief and putting all your eggs into that one basket, be it cash or gold or whatever.
What I find puzzling is this refusal to even consider that sometimes, in certain circumstances, in certain areas investing in RE may actually be - *gasp* *horror* *shudder* - not such a bad idea.
Of course it’s preferable to own the roof over your head. It’s the saddest part of this bubble that owning did not make sense, that RE in so many areas of the country is still overpriced relative to fundamentals… I thought we all agreed on this, no?
‘in certain circumstances, in certain areas investing in RE may actually be - *gasp* *horror* *shudder* - not such a bad idea’
There are going to be fortunes made in residential RE in the next few years. But it’s not gonna be like picking up gold on the street.
Thank you, Ben, for stating the obvious.
There are fortunes to be made. I agree.
Save your dollars, you complete fools, because there are amazing fortunes to be made in the 2014-2016 timeline!!!
“it’s not gonna be like picking up gold on the street.”
…and thank goodness! That’s how it’s supposed to be. Otherwise we’ll return to get-rich-quick speculation, and the country may not survive another round.
oc-ed from last night…
tj,
The cotton gin did not replace the hand labor that picked the cotton. It replaced the hand labor that sperated the seeds from the cotton. And as a result slavery actually increased.
According to the Eli Whitney Museum site:
Whitney (who died in 1825) could not have foreseen the ways in which his invention would change society for the worse. The most significant of these was the growth of slavery. While it was true that the cotton gin reduced the labor of removing seeds, it did not reduce the need for slaves to grow and pick the cotton. In fact, the opposite occurred. Cotton growing became so profitable for the planters that it greatly increased their demand for both land and slave labor. In 1790 there were six slave states; in 1860 there were 15. From 1790 until Congress banned the importation of slaves from Africa in 1808, Southerners imported 80,000 Africans. By 1860 approximately one in three Southerners was a slave.
http://en.wikipedia.org/wiki/Cotton_gin
in fact, this makes my case, it doesn’t diminish it. growing cotton became more profitable. the low value labor of separating seeds became automated and the result was more jobs for higher pay (which would have happened if not for slavery) because growing cotton became more profitable. low value seed separation was automated and therefore freed that labor to do other higher value labor. it’s the same for producing wheat. growing wheat also became more profitable. what used to be done by hand is now done by machine. should we go back to hand harvesting wheat because the work will have to be done by hand need more workers to do it?
i’m one of the few that are able to tell you the truth and yet all i get for it is childish attacks (i don’t mean you oc-ed, you had a mature response) from rio and ‘in colorado’. you stomp your feet and demand things that are impossible to do, like keep low value jobs here. on top of it being impossible to do, trying to stop it is harmful to our own economy.
but don’t worry, if the value of our labor falls below that of the chinese, they will send their low value jobs back here so we can do those low value jobs for them. then we can all answer telephones (knowing mandarin will be mandatory for the job though) and build cars for very low wages.
the liberals, who know nothing about the way an economy works, want to do the exact wrong thing for it. their solutions of protectionism erodes or stagnates the value of our labor while the value of other’s labor continues to advance.
you need to stop worrying about what other nations are doing and paying, and worry about what we’re doing instead. it’s our own actions that will impact what happens to us.
“i’m one of the few that are able to tell you the truth…”
Well, you had me up to there.
Well, you had me up to there.
i didn’t mean for it to sound conceited. i just meant that there are few than know the truth on this issue. to compensate, i’ll admit that most here know more than i do when it comes to housing. that’s why i read this blog. you guys are very knowledgeable on that issue.
i’m sorry, i did not mean to offend by what i said.
China & india are a 2+ billion. We could never do more than a tiny bit of any outsourced work.
Loving NY is getting a bit expensive?
Despite budget cuts, bigger county tax bills coming to most suburban Onondaga County residents
Syracuse, NY - Property owners in most of Onondaga County’s suburban areas will see their county taxes rise next year — some substantially — despite the Legislature’s decision to lop $45 million off County Executive Joanie Mahoney’s 2011 spending plan.
Homeowners in Van Buren will take the biggest hit under the $1.15 billion budget approved by lawmakers 15-3 late Tuesday night. County taxes will rise $246 for every $100,000 of a property’s assessed value in Van Buren, assuming the budget survives an expected veto by Mahoney.
Van Buren’s hit was made worse than it otherwise would have been because the town decided to take nearly $1 million in sales tax dollars next year in cash rather than using it to reduce its county property tax levy.
Lafayette is in line for the second biggest hit — a $186 increase for every $100,000 of assessed value.
Elbridge isn’t too far behind. Property owners in that town will pay $137 more in county taxes for every $100,000 of a property’s value.
“Obviously, people are going to be upset,” said Legislator Robert Warner, whose district includes Van Buren and Elbridge.
Warner, who figures he’ll be paying about $700 more in county taxes next year on his home and timberland he owns, said lawmakers did everything they could to cut the tax levy, slashing it by $45 million over Mahoney’s objections. But in the end, there was a limit to what they could do because a major chunk of the county’s spending is on state-mandated items such as Medicaid and pensions, he said.
http://www.syracuse.com/news/index.ssf/2010/10/despite_budget_cuts_bigger_cou.html
A few towns are going down though and by a substancial amount per $100k (over $200). I know Fayetteville and Manlius were getting a big reduction. I think maybe Dewitt too. Pompey only going up by $7/$100k. I think it has to do w/how the town applied their credit from the county. (Towns going up were mostly lower income towns that used to apply that credit from the county toward lowering property taxes.) Looks like the higher income towns are making out here. Although paying $15k in taxes on a 3000 sq foot home is nuts! They did need some relief.
Reminds me why I’m an evildoc up at ol’ St. Joes.
Rent at the Willows for my 3/2 1400sq ft, ALL utilities included (even Air Con) stayed this year at $895. I can move on no notice if pastures grow greener at hospital in another town. I guess I could swing the mortage on a 600k Manlius shack, but that $20k in taxes would be an evil bite.
I like having the free cash and freedom not to be trapped. Followed online couple big old (i like the old ) houses in historic Sedgewick district. Some have been on market more than a year.
System seems screwed up. Renting is so much kinder and gentler right now than “owning”, but I’m running with it.
I suppose I could handle the expense of a $60K shack in NY, renting or owning. But instead I have been living off that this year and stashing the rest without a land tether. It has been very kind on my spirit.
One of the drawbacks of owning in NY is the NY residency and the income tax rates that comes with it. The same can be said for owning (and occupying) housing in other high tax states like CA.
“Our society is run by insane people for insane objectives. I think we’re being run by maniacs for maniacal ends and I think I’m liable to be put away as insane for expressing that. That’s what’s insane about it.” - John Lennon
“Our society is run by silverish-blue people for silverish-blue objectives. I think we’re being run by silverish-blues for silverish-blue ends and I think I’m liable to be put away as silverish-blue for expressing that. That’s what’s silverish-blue about it.”
It makes exactly as much sense as your quote.
Rants like this explain literally nothing. They mean nothing, they say nothing of any content whatsoever, and they fix nothing.
Call me an ol’-fashioned enlightenment dude but if you are going to make a g*ddamn point, then make it coherently!
Please excuse the mutterings of some of my fellow boomers who view the Beatles as philosophers and think the “music” had actual meaning.
When John Lennon was my age, he was already dead for 17 years……
Faster -
Valid point but bad example. When I used to ride a motorcycle over a forty-year span, my worst enemies were silver-blue haired demon(a)s in slow Cadillacs turning left in front of me -
It’s time for a weekend chuckle.
In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
BWAHAHAHHAHAHAHHAHAHHAHAHAHHHHHHHHHHHHHHHHHHH!!!!!!!!!!
Is that an older article, say from 2005?
Shuffield said this past September….
As president, a role he’s held for more than two decades, Mr. Shuffield works to expand the company by acquiring smaller firms and attracting top-producing agents.
He says 2010 is expected to be the best year in sales for the local industry since 2005, with cash buyers dominating much of the market.
The luxury residential market has picked up as well, Mr. Shuffield said, with five condos priced above $7.5 million selling in the past three months.
“I think that over these next two or three years, we’re going to start to see values inching up,” he said, “starting at the lower prices first and moving to the higher prices as we clean through excess inventory.”
http://www.miamitodaynews.com/news/100923/story-profile.shtml
That was some clever financial overhaul!
* BUSINESS
* OCTOBER 11, 2010
Wall Street Pay: A Record $144 Billion
Financial Overhaul Has Affected Structure but Not Level; Revenue-to-Compensation Ratio Stays Flat
By LIZ RAPPAPORT, AARON LUCCHETTI and STEPHEN GROCER
Compensation on Wall Street is on pace to break a record high for a second consecutive year, as more than three dozen top banks and securities firms will pay $144 billion in salary and benefits. Elizabeth Rappaport, Bob O’Brien and Neal Lipschutz discuss. Also, Guggenheim Partners’s Scott Minerd discusses why he thinks that despite record highs, gold can be expected to rise even higher.
About three dozen of the top publicly held securities and investment-services firms—which include banks, investment banks, hedge funds, money-management firms and securities exchanges—are set to pay $144 billion in compensation and benefits this year, a 4% increase from the $139 billion paid out in 2009, according to the survey. Compensation was expected to rise at 26 of the 35 firms.
The data showed that revenue was expected to rise at 29 of the 35 firms surveyed, but at a slower pace than pay. Wall Street revenue is expected to rise 3%, to $448 billion from $433 billion, despite a slowdown in some high-profile activities like stock and bond trading.
Overall, Wall Street is expected to pay 32.1% of its revenue to employees, the same as last year, but below the 36% in 2007. Profits, which were depressed by losses in the past two years, have bounced back from the 2008 crisis. But the estimated 2010 profit of $61.3 billion for the firms surveyed still falls about 20% short from the record $82 billion in 2006. Over that same period, compensation across the firms in the survey increased 23%.
“Until focus of these institutions changes from revenue generation to long-term shareholder value, we will see these outrageous pay packages and compensation levels,” said Charles Elson, director of the Weinberg Center for Corporate Governance.
…
http://english.peopledaily.com.cn/90001/90780/91421/7165351.html
Looks like the Chinese see right through the Fed’s attempts to inflate it’s way out of Uncle Sam’s otherwise-unpayable debts and obligations by cranking out trillions of printing-press dollars. They are sitting on 1.5 trillion in US dollar holdings and won’t be amused.
What can the Chinese do about it? Looks like a currency fight, to the bottom.
Precisely. That money is never getting paid.
Just like WW2 debts never got paid in real-terms.
Blunt truth is that governments through history have never ever paid their debt in real-terms.
“Blunt truth is that governments through history have never ever paid their debt in real-terms.”
You’d think greater fools would eventually catch on to this, but then if that were the case, I don’t suppose they would qualify as greater fools?
You need to combine the fact with the “greater fool” theory.
Proprietary investing (think: Buffett) has always been about the greater fool.
Buy undervalued from fools, and sell overvalued to fools.
There’s also the cash-flow business but that’s a tale for a different day.
the cash-flow business … that’s a tale for a
different daybygone era.… unless you qualify to borrow from the Fed at zero percent and lend at ‘market rates.’
By the way, what are the qualifications to get a zero percent loan from the Fed? I had always misleadingly thought lending discrimination was illegal.
It will be back.
Fact is when it comes back people will not recognize it for what it is.
I am young enough to ride that merry-go-round, and I wager, so are you.
“Fact is when it comes back people will not recognize it for what it is.”
I was old enough to ride last time but too young and dumb to recognize the opportunity. I was under the mistaken impression that the dollar was about to collapse, when in fact it was merely in transition from a high-inflation currency to a low-inflation currency.
Germany pays last of WWI debt
By Marcus Klöckner
Stars and Stripes
Published: October 2, 2010
On Sunday, Germany will make the final payment on a debt that reaches back to the end of World War I.
German media have reported that the 70 million euro (about $96 million) payment were the final reparations from the war. But a spokesperson from the finance ministry said Germany paid off its World War I reparations decades ago — in the early 1980s.
The 70 million euro is actually an interest payment for foreign bonds the country issued in the 1920s, at a time when Germany was struggling to make its war reparation payments, and sold in the United States, Britain and elsewhere. Under the Treaty of Versailles, the country was assessed a $35 billion debt for starting the Great War, the Washington Post reported.
…and btw, if Germany were not taken to the cleaners by “reparations”, there wouldn’t have been Hitler and they wouldn’t have started WWII.
Germany only paid, or was only able to pay, the indemnities later extorted because the United States was profusely lending money to Europe, and especially to her. In fact, during the three years 1926 to 1929 the United States was receiving back in the form of debt-instalment indemnities from all quarters about one-fifth of the money which she was lending to Germany with no chance of repayment. However, everybody seemed pleased and appeared to think this might go on for ever.
History will characterise all these transactions as insane.
- Winston S. Churchill, The Gathering Storm, page 9.
Under the Treaty of Versailles, the country was assessed a $35 billion debt for starting the Great War, the Washington Post reported.
This is a good example of the stupidity of trying to punish an inanimate object such as a country, a government, or a corporation, as opposed to holding individuals responsible.
The rise of Hitler cannot only be pinned on reparations. WWI left a lot of unresolved issues. The Great Depression would have hit Germany bad any ways. It was only a matter of time. And don’t forget Japan & Italy & Spain.
“Let us be blunt: …”
Gawd bless them who shoot from the hip and aim straight for the heart!
The Mortgage Foreclosure Crisis
Written by Charles Scaliger
Friday, 15 October 2010 09:50
Let us be blunt: The mortgage foreclosure crisis, which first burst into full public view with Bank of America’s suspension of all foreclosures only a few days ago, has the potential to completely destroy the American real estate sector in an epic legal and economic meltdown that would make the crisis of 2007-2008 look like the proverbial Chinese tea party.
Although a few exceptionally observant souls have been sounding the tocsin for months that the entire foreclosure process was corrupt and that, sooner or later, the banks would be called to task for it, no one in the major media paid much attention until the Bank of America announcement. Only the day before the BOA bombshell, President Obama issued an unusual pocket veto of a little-noticed bill whose passage would have allowed foreclosure business to proceed as usual. But the Obama veto, buttressed by withering pressure from consumer interest groups, sent a clear signal to Bank of America and the rest of the banking sector: the millions of homes now in foreclosure across America may be a legal and financial no man’s land, an enormous slice of the world’s largest asset group to which no legal ownership can be assigned.
To grasp the enormity of the crisis now unfolding, it is important to understand the nature of mortgages. Until as recently as two decades ago, most mortgages were undertaken entirely by a single creditor, usually a local bank. The mortgage remained at the bank where it was issued, and was either repaid or defaulted on. In the case of the latter, the bank — holder of both the note (the IOU) and the mortgage lien — foreclosed and repossessed the property.
Beginning in the 1990s, it became fashionable to sell mortgages to other parties, and the mortgage securitization industry was born. Mortgages were sold, repackaged, and sold again, and a bewildering array of mortgage-backed securities was created to underwrite this new market. The United States mortgage business not only went national but international as investors worldwide rushed to get a piece of the lucrative American real estate sector.
To help streamline the process, Fannie Mae and Freddie Mac created a national mortgage electronic registry called MERS (Mortgage Electronic Registration System, Inc.), whose purpose was to streamline the transfer of mortgages by helping mortgage securitizers to avoid the costs and inconveniences of recording mortgages at local courthouses.
Unfortunately for the mortgage sector, there were two big problems with that approach. In the first place, mortgages and mortgage transfers are governed by state, not federal laws. By providing a means to circumvent the hassles of state laws and local jurisdictions, MERS effectively ran roughshod over state authority. The other, potentially greater, problem, is that the critical document in a mortgage transaction — the one that empowers the creditor to enforce the terms of the mortgage on a delinquent homeowner — is the note, in 45 out of 50 states. A note, like any claim on assets, must be properly signed to have the force of a title. If it is sold to a new owner, it must be signed again, and so forth. Only thusly can what is called the “chain of title” be legally established.
But many, perhaps most mortgages that have been sold and repackaged again and again over the last few years were done so electronically, thanks to MERS, and typically lack the requisite signatures. Their chains of title, in other words, have been broken.
…
It doesn’t work like that.
Doom and gloom always sell. Fact is the system will sort it out. Eventually.
Haven’t many of us been drumming the 2013-2014 song since 2005?
There’s a reason. It’s called looking at the 1985-1995 debacle!
“Fact is the system will sort it out.”
Aw gee whiz — why did you have to go and rain on my housing market Armageddon fantasy?
My cold-blooded Enlightenment training is always at war with my hot-blooded nature.
Unfortunately, the training always wins. What can one do?
See, I’m exactly the opposite. My enlightened nature gets so boring that I have to engage in hot-blooded Armageddon fantasies to escape it.
But I’m just funnin’ ya — I realize the crisis is already over by now, and the strong economic recovery towards greener and greener shoots is taking hold as I type.
Unfortunately, the training always wins. What can one do?
Drink more.
In spite of that, the training wins. The training taught how to drink more too. What can one do?
I refuse to believe there is training that can stand up to an evening of ice-cold Patron shots. At least I’ve never witnessed it, in a long and dissolute life. Mr. Hyde will have his say…
You, my friend, have clearly not had enough “training” in shots.
“Fact is the system will sort it out.”
——————————————————————
And hand taxpayers the bil la la “Goldman Sach’s bailout” uhh meant to say TARP.
“It’s called looking at the 1985-1995 debacle!”
But wait — isn’t the debacle at hand several orders of magnitude worse with respect to amplitude and periodicity? And wouldn’t that suggest that it will last ‘much longer than expected’ and turn out ‘much worse than expected’ when eventually seen clearly through the lens of the rear-view mirror?
Just thinking out loud here…
Fine, so you’re criticizing the timeline but not the methodology.
If you say 2016 and I say 2014, that’s a difference is so worthless that I’ll let YOU pick up the beer tab.
I thought I was slightly pessimistic, until I saw the IMF report suggesting no housing bottom until eight years or more (if my arithmetic is right, that means 2018 or later!)…
AND THIS REPORT CAME OUT BEFORE THE BURGER KING BOY FORECLOSURE FIASCO SHTF!!
Oct. 6, 2010, 9:31 a.m. EDT
Real estate downturn could last 8 years: IMF
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — The prospects in the global real estate sector are “dismal,” with a downturn that could last eight years, the International Monetary Fund warned Wednesday.
The IMF sees problems both in the “bust” countries, such as the United States, Spain and Ireland, and the “rebound” economies, such as the Asia-Pacific region, most Scandinavian countries, and Canada.
In the United States, residential investment remains severely depressed compared with past cycles, which the report said could be partly explained by the pattern in house prices and outstanding household debt. Making matters worse, the U.S. states where the house price bust was more pronounced are also where unemployment has increased the most.
“This relationship likely reflects the importance of the construction sector in these states’ economies as well as lower labor mobility resulting from problems in the housing sector,” the IMF said. Tax incentives in both the U.S. and the U.K. only temporarily increased activity.
“Especially in the United States, given the limited success of mortgage modification programs and the shadow inventory from foreclosures and delinquencies, this has renewed fears of a double dip in real estate markets. A lot will depend on the path of economic recovery: if employment creation remains low, risks of a double dip in housing naturally increase,” the IMF said.
…
You just don’t want to pick up the beer tab!
The lengths you will go, my god, man, I’ll pick up the tab instead.
I’ve drunk beer with Prof Bear before. About one pint is his limit. Go for it!
I wasn’t really trying. I could probably put down a lot more pints if FPSS picked up the tab.
“Until as recently as two decades ago, most mortgages were undertaken entirely by a single creditor, usually a local bank.”
Sounds like until two decades ago, the U.S. mortgage system was pretty stable. Then Wall Street got their greedy fingers into the game, and blew the whole thing to smithereens! Don’t parasites realize that killing their host will soon lead to their own demise?
“In the long run, we are all dead.”
But not today.
Dead is one thing, but extinction of an entire species of whales is just a crying shame.
I suppose you are now going to tell us that in the long run, all species are extinct? And then there is eventual heat death of earth from the sun…
You know me so well.
Besides, there is a new species of whales in Brazo-Russo-Chindia that’s being cultivated.
“…new species of whales…”
Hopefully they will not lose site of the important role of trust in running a banking system. Scam banking operations seem predestined to quickly and resoundingly collapse.
Dumb question of the day:
Now that trust has been restored in the banking system, is it safe to conclude that the crisis which erupted in December 2006 is over?
Mortgage lending
Subprime subsidence
Parts of America’s mortgage market are in turmoil. Some on Wall Street see this as an opportunity. Others are biting their nails
Dec 13th 2006 | new york
MORTGAGE lending is hardly the raciest business, but it has its moments. “It’s a bit like the definition of combat: 59 minutes of boredom followed by a minute of sheer terror,” says Michael Youngblood, an analyst at Friedman, Billings, Ramsey, an investment bank. “And we seem to be going through another one of those minutes now.”
What has set pulses racing is subprime lending—mortgages extended at higher than normal rates to those with weak credit histories. In America, where it is most advanced, this market is under a lot of strain, and so, by extension, is the giant asset-backed securities market that is linked to it. The market for prime mortgages (those extended to higher-quality borrowers) is faring better, though it, too, is showing signs of weakness, exacerbated by cooling house prices. Might these troubles, some wonder, be the canary in the mine, warning of a looming credit crunch as investors, for years free with their money, recoil from risk?
Once a backwater, subprime is now very much in the mainstream. Annual loan originations grew fivefold between 2001 and 2005, to $625 billion, according to Inside Mortgage Finance, a newsletter.
But with rapid growth has come fragility. According to UBS, the rate of subprime-loan delinquencies of 60 days or more stood at around 8% in October, nearly double the rate of a year before. Foreclosures are also around twice as high as they were. Worse, loans are decaying remarkably quickly: the number of borrowers falling behind on payments in the first few months has leapt, to around 4% of the total. This has taken some analysts by surprise. But Anthony Sanders, finance professor at Ohio State University’s Fisher College of Business, thinks they should have seen it coming: “With the traditional mortgage market flat, the growth has been in the one area nobody wanted to go into.”
…
I don’t think the combat has started yet. A light skirmish or two and a continuous falling back as we realized we were far outnumbered. Problem is, we’re running out of peninsula and our backs will be to the ocean soon…and there are only boats enough for TBTF. They look kinda leaky, though…and seem to be taking some hits from inland artillery.
How is that Ownership Society concept working out these days for Uncle Sam ?
Poverty in the suburbs
Mortgage or food
The poverty gap is closing between suburbs and inner cities
Oct 14th 2010 | freeport, long island
FOR more than half a century, Americans have fled the cities in their millions, heading away from crime and poverty towards better schools and safer neighbourhoods in the suburbs. Now poverty is catching up with them. According to two new reports from the Brookings Institution, over the past decade the number of poor people in the suburbs has jumped by a whopping 37.4% to 13.7m, compared with some 12.1m people below the poverty line in cities. Although poverty rates remain higher in the inner cities, the gap is narrowing.
Suburban areas largely escaped during earlier downturns, but not this time. Support groups say people are using safety-net programmes, such as food stamps or unemployment insurance, who have never applied for them before. They are often making tough choices. “It’s mortgage or food,” observes Paule Pachter of Long Island Cares, a non-profit group on Long Island, one of the first destinations to be populated by escapees from the city.
…
“The Ownership Society” -
It’s really when the bankers, the government, the bible thumping cultural warriors get ownership of the people who allow themselves to be owned.
I refuse to defer to the cultural conservatives. By being debt free, I refuse to be owned by the banks. By not voting, I refuse to sanction this political system which only allows Demopublicans to bubble to the top and wastes my time.
I am not owned by “the ownership society.”
It’s more of an “Own or Be Owned” society any more…
Whack-job economics: “…because houses would remain empty, dragging down local prices.”
Since when does withholding supply from the market lead to lower prices?
Foreclosuregate
Robostop
The fuss over poorly reviewed repossessions exposes deeper problems
Oct 14th 2010 | NEW YORK
HOW did foreclosures go, in a matter of weeks, from just another miserable statistic in America’s housing bust to the subject of a scandal with its own “-gate” suffix? The answer is a combination of sloppy (and possibly fraudulent) paperwork, a securitisation process that is even more broken than anyone imagined and a febrile political environment.
“Foreclosuregate” flared up when an employee at GMAC Mortgage, part of Ally Financial, admitted to having approved thousands of repossessions without properly reviewing the documents. The company responded by halting sales of seized homes in the 23 states where court approval is required to foreclose while it gets to the bottom of its “robo-signing” problem. JPMorgan Chase and several other servicers (which manage loans and distribute payments to investors in mortgage-backed securities) quickly followed suit. Bank of America has called a stop in all 50 states.
Brushing the problem aside was not an option, given intense pressure from Congress, state officials and community groups. With more than 2m homes in foreclosure (see chart), and mid-term elections looming, the outrage has been deafening. On October 13th a group of attorneys-general and bank regulators from all 50 states announced a probe of foreclosure practices. Calls for a nationwide freeze grow.
The Obama administration and many economists worry that this would merely prolong the housing market’s pain by holding up the clearing of excess inventory (sales of foreclosed homes accounted for 24% of the second-quarter total, according to RealtyTrac). It would be “very damaging to exactly the kind of people we’re trying to protect”, argued Tim Geithner, the treasury secretary, because houses would remain empty, dragging down local prices.
…
“Since when did withholding supply from the market lead to lower prices?”
The houses are still in the neighborhood and they are standing vacant and are rotting away. Also rotting away are the values of the other houses that are located in the same neighborhood.
I was talking short-term. Of course I realize that holding vacant houses off the market for years on end until physical depreciation rots them away into a state of dilapidation will result in lower prices — d’oh!
But I often wonder if our economic leaders, whose heads often seem lost in the rarefied atmosphere of academic Theoryland, realize the vast wastage of our Nation’s collective wealth which might result from indefinitely withholding vacant houses from the market? Is our country truly so enormously rich that we can afford to stand back and watch vast amounts of real wealth crumble into desuetude?
You’re geting rent cheaper than buying. Sounds like a plan.
Keep it going till I’m dead, and I’ll be the world’s biggest Bernanke-and-successor fan that ever was, and ever will be.
Does no one observe that they they are actually pushing more debt rather than monetizing debt?
PS :- QE and QE2 are like p*ssing in front of the Niagara Falls and calling that “mine is bigger”.
My FIL visited us this week, and felt compelled to do some home repairs on our landlord’s investment property. I felt a bit put off — why help our landlord keep their investment in salable condition? It shouldn’t be our problem if they don’t have any cash on hand to make necessary repairs…
FPSS,
Can you explain how the Fed will unwind its balance sheet without affecting interest rates? How long do you suppose it will take?
Bear - Keep receipts and bill your landlord for materials at least if not for your time. IANAL but I believe there is some precedent for this.
That one BofA spokeswoman is busy, busy, busy!
* REAL ESTATE
* OCTOBER 16, 2010
Mortgage System’s Woes Not Isolated
By RUTH SIMON
“Robo-signers” who approve documents without reading them aren’t the only example of sloppiness in mortgages.
As the foreclosure process comes under nationwide scrutiny, judges are questioning how servicers calculate amounts owed on loans. Some borrowers claim they lost their houses because of bungled payment processing and accounting. And there are growing worries about whether important mortgage documents were recorded properly, especially on loans packaged into securities.
Alicia Lang of Billings, Mont., is fighting foreclosure proceedings from mortgage servicer Ocwen Financial.
trouble
trouble
At the heart of many of the current problem is that mortgage servicers’ business model isn’t suited for the high delinquency rates of the housing crisis and the pressure to rework troubled loans. It is hard for mortgage servicers to make money by doing anything but pushing paperwork through the pipeline.
Even before the mortgage meltdown, the servicing industry “was plagued with problems,” such as servicers charging unauthorized or excessive fees and making false or unsubstantiated statements about how much borrowers owed, says David Vladeck, head of the bureau of consumer protection at the Federal Trade Commission, which has brought several recent cases against servicers. Mr. Vladeck said the FTC is now trying to “drill down” to make sure the servicers it regulates have the proper procedures in place to make sure underlying documentation is sufficient and accurate.
Servicers typically get paid a fee of 0.25% to 0.5% of a loan’s balance, plus late charges and other fees when a mortgage tumbles into default. The mortgage-servicing industry is made up of scores of companies, from big banks to independent operators such as American Home Mortgage Servicing Inc.
But the cost of servicing a mortgage has more than doubled in the past five years, pressuring profit margins, says Edward Delgado, a former Wells Fargo & Co. executive who now leads the Five Star Institute, a provider of educational programs for the mortgage industry.
The system has been further strained by failures and mergers of mortgage firms, as well as outsourcing parts of the job to law firms and other processors.
The consequences are causing a nightmare for the loan-servicing business and borrowers. For example, Fabiane Correa and her husband Luiz got a notice in September from Bank of America Corp. that the mortgage on their Stamford, Conn., house was in default. The couple also was told that $6,638 was past due.
Earlier this year, Mr. and Mrs. Correa got a loan modification from the Charlotte, N.C., bank as part of the Obama administration’s foreclosure-prevention program. She says they have made their required loan payments since then.
“It’s very emotional and frustrating,” Mrs. Correa says. The couple drove to Dedham, Mass., a 360-mile round trip, to meet with a Bank of America representative in an unsuccessful effort to resolve the problem. A BofA spokeswoman says the bank is looking into the matter.
Josh Ritz, who lives in Kent City, Mich., pulled $4,400 out of his retirement plan last year after Bank of America said he needed to pay that amount to catch up on his mortgage payments. He kept making his monthly payments until April, when a BofA employee said the bank didn’t want his money because the loan was past due, according to a court filing in Kent County, Mich., where Mr. Ritz is trying to block foreclosure.
Mr. Ritz and his wife “tried to do the right thing, and they came out worse,” says Karen Tjapkes, the couple’s lawyer. She adds that it took BofA about six months to apply the $4,400 payment to their mortgage account.
A BofA spokeswoman declined to comment, citing pending litigation, but said the company “will research his concerns and address them directly with Mr. Ritz and his counsel.”
…
The dead cat bounce in BAC stock is really beginning to come into clear view about now through the lens of the rear view mirror. Sell now, or get priced in forever!
Don’t forget to keep on whistling while you enjoy your late-October stroll past the graveyard, banksters!
Mortgage Damage Spreads
Big Bank Stocks Hit Again as Modern Finance Collides With the Legal System
By NICK TIMIRAOS, JESSICA SILVER-GREENBERG And DAN FITZPATRICK
The unfolding foreclosure-processing debacle is causing bank stocks to slide and putting millions of delinquent borrowers in limbo.
But how disruptive the crisis ultimately becomes—for homeowners, the housing market and the broader economy—depends on how quickly a number of technical problems and legal challenges are resolved in the months ahead.
…
The financial system and legal system have been on a collision course for some time in residential real estate. Both the lower standards for loans and the lax controls involving foreclosures were based on the premise that home prices would never fall, making it unlikely that many loans would go bad at once. Once that premise fell apart, the flaws in the system became obvious, and the long-term challenge now facing lenders is to rebuild the mortgage system on more solid footing.
Banks argue that these problems will be repaired swiftly, and they’ll soon be running the foreclosure machinery at full speed again. But analysts say the problems could expand into a legal crisis if banks can’t prove that they are following standard property-law procedures.
Lawyers, politicians and consumer advocates, meanwhile, are using the legal problems to stop foreclosures and extract settlements for troubled borrowers that lower their mortgage debt.
Industry executives note that few, if any, borrowers in the foreclosure process dispute the fact that they’re not paying their mortgages. “We’re not evicting people who deserve to stay in their house,” James Dimon, J.P. Morgan chief executive, told analysts Wednesday.
But the banks’ “reassurance is not reassuring,” says Susan Wachter, a professor of real estate at the University of Pennsylvania’s Wharton School, because it doesn’t deal with how easily they can prove ownership of the underlying mortgages.
The legal drama partly represents the clash between a financial sector that developed electronic processing to speed up procedures versus the U.S. property-law system, which relies on physical paperwork filed by individuals.
There are two different problems. The first resulted after lawyers for troubled borrowers discovered that banks were using “robo-signers,” or back-office employees who approved hundreds of foreclosure documents daily without reviewing them, in states where repossessions must be approved in court.
Banks had no choice but to suspend foreclosures in those states because submitting false witness testimony meant they hadn’t properly proved ownership of the loans in foreclosure.
The second, and perhaps thornier, issue is that banks could have trouble proving they have standing to foreclose as they go back to correct errors. That problem stems largely from mortgages that were bundled into pools and sold to investors as securities. This process, known as securitization, became the preferred method of financing U.S. home loans over the past 30 years.
…
Bankers vs. Lawyers?
My money’s on the lawyers.
If the PTB really wanted to inject some inflation into the economy they could have easily done so by pumping a raise or a bonus into the coffers of those who receive social security and other transfer payments. But they didn’t.
In an election year - just a few weeks before an election that will undoubtly remove many incumbents from office - the PTB missed a great opportunity to buy up some votes using OPM (i.e. taxpayers money) in doing so.
So, why didn’t they, hmmmmm?
Because Obama isn’t the maniacal socialist that the loonies claim him to be?
Unlike Bush, who did send everybody a check right before an election.
I find it ironic, however, that candidate change would throw his party’s and his own political future under the bus to preserve the status quo — TBTF banks, fraudulent financial and accounting practices, and other unsavories like Geithner and Bernanke, don’t you? Why didn’t he distance himself from this crowd?
I think Obama’s interests were elsewhere other than on the financial crisis when he first took office, and he trusted the wrong people to come up with his response. He’s realized his mistake (somewhat), gained more understanding of the issues (I hope), and is trying to reposition himself now.
It reminds me of Reagan’s early presidency, when Al Haig and the rest of the paleos about drove him off the cliff. Nancy stepped in, cleaned house, and (unfortunately) saved his presidency.
I don’t know if we’ll have to rely on Michelle to save Obama. Unlike Reagan, Obama is intellectually capable of handling the presidency- I think. Time will tell…
* POLITICS
* OCTOBER 16, 2010
Foreclosures Emerge as Hot Campaign Issue
By NAFTALI BENDAVID
The surge in foreclosure problems has set off a free-for-all on the campaign trail, pitting some Democratic candidates against their Republican opponents and even the White House.
Republicans are blaming the Democratic Congress for helping create the housing crisis by failing to rein in mortgage giants Fannie Mae and Freddie Mac. Some Democrats are pushing for a moratorium on foreclosures, a position at odds with the GOP and the White House, which is concerned such a move could damage the housing market’s fragile recovery.
…
California NOW President calls Meg Whitman a political whore
by W. E. Messamore
Sat, Oct 16th 2010
Last week, California gubernatorial candidate Jerry Brown (D) came under fire when a recorded voicemail inadvertently recorded a private conversation in which a Brown aide suggests that Republican candidate Meg Whitman is a whore for cutting a deal with police over law enforcement pensions, and Jerry Brown approves.
…
I always thought that any politician, male or female, was considered a “whore” if they pandered to a special interest while making political claims to the contrary. This seems to be much ado about nothing.
Just in case the fifty states’ attorneys generals are having a hard time thinking up questions to ask Megabank, Inc regarding their Burger King boy foreclosure fiasco, I have a few suggestions:
1. Did any of the top managers at Megabank, Inc see this foreclosure fiasco coming? Because one interpretation of recent events is that they securitized toxic mortgages issued to unqualified buyers knowing full-well that they would be able to collect large mortgage payments for a few years, then foreclose when said unqualified buyers could no longer afford to make the payments. I would think Megabank, Inc should bear more than half the culpability for making toxic loans, as their managers presumably have at least high school educations, and hence an understanding of basic arithmetic, unlike many of those to whom the toxic mortgage loans were issued.
2. Did the top managers of Megabank, Inc realize that the mortgage backed securities that they were selling as triple-A rated were chock-full of sh!tty loans?
3. Was it even legal for Megabank, Inc to sell sliced-and-diced mortgage-back securities in a manner which clouded title by design? Did the managers of Megabank foresee this cloudy title issue and ignore or even exploit it to their full advantage, or does this fall under the heading of something which “nobody could have seem coming”?
4. Would it be possible for the fifty states’ attorneys generals to subpoena corporate records from Megabank, Inc and (why not?) the Federal Reserve Bank going back ten or more years, in order to get closure on what insiders knew and when they knew it? Otherwise, I guess we will just have to take the banksters at their word whenever they tell us, “Nobody could have seen it coming.“
If this so-called clout on title procedure was a violation of State law authority ,I find it hard to believe that the various State regulators were not aware of the practice .Also ,years ago on this blog I remember reading stories of cases alleging that the title process was corrupted and
some lawyers were pointing that out and some cases were talked about .
Why is it now that it’s found out this process was done in millions of cases? I’m just saying it doesn’t pass the smell test that this is just a new
discovery .
Like faulty breaks ,if a product or process does not conform it doesn’t conform ,but I find at hard to believe that the Powers and Politicians haven’t known these details for years .
“Why is it now that it’s found out this process was done in millions of cases?”
1. It’s election season.
2. Many state AGs have higher political ambitions (like Jerry Brown, for one).
3. The banksters are being forced to follow the law for the first time in years.
Show me the evidence!
Instead of signing the ‘let-it-fly’ bill, Obama pocket-vetoed it. The previous admin would have signed it in a flash, allowing the big boyz to once again run roughshod over the law.
Likewise, state AGs are finding it politically profitable to go after the banks, which wasn’t the case a few years ago.
The more I consider it, the more I think the Fed royally screwed the pooch after the Fall 2008 financial meltdown. Rather than root out corruption in the financial sector, they played the cover up card. How is a perpetually corrupt and broken financial system supposed to help bring about economy recovery?
I suppose the Fed could just keep on quantitatively easing more and more, always hoping for the best.
Crush of earnings coming
If the market manages to extend its October climb with earnings reporting in full swing, it will likely have to do so without the financial sector.
Dumb observation of the day: A primary purpose of extend-and-pretend is to slow the pace of real estate price decline to the point where there is an ample supply of eager-to-buy greater fools who don’t realize they are catching themselves a falling knife by purchasing before prices decline to levels which are better in line with fundamentals.
Fast crashes result in prudent purchase decisions, which means Main Street gets to beat Wall Street. The Fed would not want Main Street to ever get the upper hand.
An 11-member Simi Valley family who claimed they were wrongfully evicted after a foreclosure forced their way back into the house over the weekend in a move meant to block the new buyer from moving in.
Jim and Danielle Earl and their nine children used a locksmith to help retake possession Saturday, despite an investor who spent $697,000 to purchase the house at a foreclosure sale in January and remodeled and sold it to people ready to move in Tuesday. The two-story house in the 5800 block of Mustang Drive has nearly 4,000 square feet, six bedrooms and 4.5 baths.
Police officers were on hand when the Earls changed the locks Saturday but did not intervene. The Earls’ lawyer, Michael Pines of Encinitas, held a news conference to announce the family was taking back the home and reportedly filed a complaint against the real estate broker and investor when police arrived at the scene.
Pines said the Earls are not concerned about the possibility of being charged with trespassing.
“They may claim we’re violating the law,” he said. “We’re claiming they violated the law. Typically the authorities will say this is a civil dispute, but the question is, who owns the home? Because whoever doesn’t is trespassing
Read more: http://www.vcstar.com/news/2010/oct/12/simi-family-changes-locks-retakes-foreclosed/#ixzz12YRhADkN
- vcstar.com
Topic: Mortgage Crisis
Wednesday, Oct 13, 2010 14:32 ET
How The World Works
Don’t blame the government for mortgage lies
Fraudulent foreclosures, dodgy securities, run-amok greed: Free market failure, in action
By Andrew Leonard
“There are so many fronts to the foreclosure crisis that it’s now becoming difficult to stay on top of all of them,” writes Naked Capitalism’s Yves Smith.
The attorney generals of all 50 states have opened a joint probe into “whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures,” reports Bloomberg. American Banker brings the news that banks are investigating themselves on the question of whether their mortgage servicers were lying about whether or not key loan documents had been lost. JP Morgan, reports the New York Times, has dropped out of the Mortgage Electronic Registration System (MERS) — a key component of the ever-widening scandal. The legal liabilities confronting the big banks are huge — Yves Smith is convinced that at least one major institution will collapse.
And on top of all this, Felix Salmon drops another blockbuster: He makes a compelling case that the banks that packaged mortgage bonds together and sold them to investors knew exactly how lousy the underlying loans were, but purposefully failed to disclose that information to their customers.
There’s probably never been a better time to be an experienced securities litigator.
…
I hadn’t seen this story before….
The house that set off the national furor over faulty foreclosures is blue-gray and weathered. The porch is piled with furniture and knickknacks awaiting the next yard sale. In the driveway is a busted pickup truck. No one who lives there is going anywhere anytime soon.
More from NYTimes.com:
• Mortgage Mess May Cost Big Banks Billions
• Wal-Mart to Buy More Local Produce
• Bankers Ignored Signs of Trouble on Foreclosures
Nicolle Bradbury bought this house seven years ago for $75,000, a major step up from the trailer she had been living in with her family. But she lost her job and the $474 monthly mortgage payment became difficult, then impossible.
It should have been a routine foreclosure, with Mrs. Bradbury joining the anonymous millions quietly dispossessed since the recession began. But she was savvy enough to contact a nonprofit group, Pine Tree Legal Assistance, where for once in her 38 years, she caught a break….
Suddenly, there is a frenzy over foreclosures. Every attorney general in the country is participating in an investigation into the flawed paperwork and questionable methods behind many of them. A Senate hearing is scheduled, and federal inquiries have begun. The housing market, which runs on foreclosure sales, is in turmoil. Bank stocks fell on Thursday as analysts tried to gauge the impact on lenders’ bottom lines.
All of this is largely because Mr. Cox realized almost immediately that Mrs. Bradbury’s foreclosure file did not look right. The documents from the lender, GMAC Mortgage, were approved by an employee whose title was “limited signing officer,” an indication to the lawyer that his knowledge of the case was effectively nonexistent.
http://finance.yahoo.com/real-estate/article/111040/from-a-maine-house-a-national-foreclosure-freeze
The opportunities for public relations work in the banking sector must be overwhelming the available number of public relations specialists right now.
BTW, isn’t this Eddie’s line of work?
How the World Works
Tuesday, Oct 12, 2010 13:45 ET
Obama’s foreclosure nightmare
A few more wrong moves, and the White House will be reliving the bank bailout public relations disaster
By Andrew Leonard
Haven’t we seen this movie before?
From the New York Times:
That is not the kind of front page story the White House wants to see with weeks to go before a national election, particularly on a day when the Wall Street Journal is blasting out yet another news flash exposing record pay to financial institution executives. But the administration has only itself to blame. White House advisor David Axelrod’s attempt over the weekend to minimize the foreclosure mess as mere paperwork “mistakes” was a massive misrepresentation of what’s really going on. With Democratic politicians across the country calling for a nationwide foreclosure moratorium, Obama’s reluctance to get out in front of the issue, so far, is yet another public relations disaster. Even if a national moratorium is not the right solution to an incredibly complex problem, the White House needs to be articulating, now, exactly how it intends to tackle this monster.
For those who want to get up to speed quickly on the foreclosure crisis, CNBC’s John Carney has the best introduction. Once you’ve digested that, you may be ready for Rortybomb’s five-part series unpacking the larger implications.
But the key facts are these: In the process of making mortgage loans, transferring ownership of those loans, slicing and dicing them into securities and, finally, initiating foreclosure proceedings on loans in default, banks, lenders and mortgage servicers engaged in illegal activity on a large scale. The legally mandated procedures put into place to ensure that no errors are ever made with respect to the transfer of property simply weren’t followed. Key documents necessary to prove ownership — to prove that a bank, for example, has the legal right to begin foreclosure proceedings, cannot be located and may not even exist.
Whether you want to dismiss this debacle as a concatenation of paperwork errors made while seeking economies of scale, or out-and-out calculated fraud by the mortgage industry against homeowners, is in some ways an irrelevant game of semantics. When legally mandated procedures aren’t followed, courts get upset, investors start wondering if they’ve been sold a bill of goods, and the litigation floodgates fly open. Bank of America and GMAC and other lenders have declared their own foreclosure moratoriums because they have suddenly realized that they are looking at potentially devastating legal liabilities.
…
I’ve been saying since the beginning of foreclosuregate that many of the real titles may be gone with the wind, but the records of what is owed by whom and theoretically to whom exist at the level of the servicers. But this is insufficient evidence in the eyes of the law to ascertain ownership- and there’s the rub.
If indeed the titles are gone, then I have no idea what the solution will be. To craft some new law that ascertains property ownership through servicer records would violate centuries of real estate law precedent, to my layman’s understanding, but I see no other likely solution.
Options: free houses, or corporate fascism. Which way will the tea party break? That is the question.
So, today’s online WSJ shows the game plan. It’s not criminal acts, it’s “fast-paced modern finance is colliding with the much slower machinery of the U.S. legal system.”
“It isn’t our fault……it’s all those dinosaurs running the legal system.”
Expect the full court press on Congress to “reform” the system. With the banksters guidance, of course.
Top of the Ticket
Politics and commentary, coast to coast, from the Los Angeles Times
Harry Reid - Sharron Angle debate: The economic meltdown
October 14, 2010 | 6:27 pm
Reid-foreclsurelaaktdnc
Angle: The housing bubble was caused a long time before this recent recession.
She accuses Reid of not dealing with the underlying causes of the recession. “Freddie Mac and Fannie Mae have never been truly dealt with. They keep sweeping it away….We need to start looking at true solutions, and first we have to investigate what caused the problem in the first place.”
Reid’s response: “We are on top of that.” He says he has called for a Federal Reserve audit, which has not happened. He denies you can do away with Freddie Mac and Fannie Mae.
Suppose mortgage rates hit an all-time low, but there were no buyers? Would the housing market hear a sound?
Freddie Mac: Mortgage rates drop again, now at 1951 levels
October 14, 2010 | 7:49 am
Mortgage interest rates continue their descent into record territory, with the 30-year fixed-rate loan dropping to an average of 4.19% this week from 4.27% a week earlier, according to the latest Freddie Mac survey of lender offering rates.
Fifteen-year fixed-rate loans fell from 3.72% to 3.62%, the giant home finance company said Thursday. The rates were being offered to low-risk borrowers who paid 0.8% of the loan amount in upfront lender fees on the 30-year loan and 0.7% on the 15-year mortgage.
The last time average rates on popular long-term fixed-rate mortgages were this low was April 1951, Freddie Mac noted, citing a compilation of statistics on Federal Housing Administration loans. Most of the long-term mortgages back then were for 20 or 25 years, however.
Homeowners have taken notice. Applications for refinance jumped 21% last week to the strongest pace since mid-April 2009, according to the Mortgage Bankers Assn.
Freddie Mac, which wound up in government conservatorship when the industry melted down in 2008, asks lenders across the country about the rates they are offering to well-qualified borrowers who put down at least a 20% down payment or have equivalent equity in the homes if they are refinancing.
– E. Scott Reckard
Did you ever get the feeling you were reading inside an echo chamber?
WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal
* October 15, 2010, 10:06 AM ET
Real-Estate News: Foreclosure, Foreclosure, Foreclosure
By Emily Peck
Here’s a look at real-estate news in Friday’s WSJ:
Rates on 30-Year Mortgages Plumb New Depth, at 4.19%: Longer-term mortgage rates declined the past week, with the average rate on 30-year fixed-rate mortgages furthering its all-time low for the third consecutive week to 4.19%, according to Freddie Mac.
Foreclosure Crisis Slams Banks: The mortgage-foreclosure crisis spilled into the financial markets, driving down bank stocks and weighing on mortgage bonds as investors take a grim view of the potential costs.
Big Banks Face Foreclosure Review: The Office of the Comptroller of the Currency is examining big mortgage servicers’ foreclosure practices, a move that could lead to regulatory reprimands of banks for botched foreclosure documentation.
For Bondholders, Foreclosed is Forewarned: Investors awakened Thursday to the potential for huge bank losses from the foreclosure mess. But bondholders who own mortgage-backed securities should also be worried.
Trustee in Bankruptcy Joins Foreclosure Case: A federal bankruptcy trustee joined forces with a Mississippi family in a lawsuit that may shed new light on one of the biggest players in the U.S. foreclosure system.
Signer Issue Raised for Wells Fargo: A Wells Fargo mortgage-servicing employee in Florida said that she signed “hundreds” of foreclosure affidavits a day without verifying the documents’ information.
…
Does anyone besides me get the sense that this Foreclosure Fiasco will soon unleash social unrest?
I’m hoping it will unleash voter’s unrest.
Who should it cause them to vote in or out?
If the politicians think they have a job for life then they and their big buck supporters will get the idea that they can do whatever they like. But if enough of them get voted out of office every election then these guys just might somehow get the idea they had better toe the line or they will be out of a job in two years or four years or six years, whatever the case may be.
These guys are elected - get hired - to work for the country, not for the special interests that pour a lot of money into their campaigns. If the money the backers put out is only good for two years (or four years, or six) then it may not be all that profitable for them to pour a lot of money into elections because they will not be getting a good return on their money because their stoodges won’t be in office long enough to make their investment pay off.
Perform as you promised or you are out! This is the message the voters should send to those they elect.
But if the challenger in a race favors something that will make matters worse (like, say, further deregulation of the financial markets), then is voting in the challenger over the incumbent going to help matters?
I’d rather have a life-long good politician (they do exist), than a series of corporate shills. Just because you’re new in no way means you’re less beholden to special interests. It’s often quite the opposite.
“Just because you’re new in no way means you’re less beholden to special interests.”
If you are new then you aren’t yet fully plugged into The Machine. It takes time to establish the ties to get what you need done done.
The special interests that pour in millions of dollars to back you do not get a full return on their investment until you are firmly established and have proved that you have staying power - meaning you have proved to everyone that you can get repeatidly re-elected. Once you convince everyone else in power that you will be there year-after-year then your power will grow.
Power begets power. The more power you have, the more power you can get. The more power you can get, the more valuable you are to those who back you.
Lose an election and you lose your power, and those who invested money into to you lose their investment.
I’m not suggesting removing the entrenched when the country is running smoothly; I want them removed when things have gone to hell, such as now.
“I want them removed when things have gone to hell, such as now.”
Could we kill two birds with one stone by removing the entrenched and installing some leaders who seriously bring the hammer down on the entire corrupt, fraud-ridden U.S. banking establishment?
After four years, I am getting tired of railing on what appears from my corner or the Nation like systemic theft, with little results to show for the effort.
I don’t know. From my little perspective, I’m in a unit of several hundred apartment units up and down a busy street. I think the average resident of these apartments are not feeling any urge to go berserk. Cool thing is that a lot of them are enjoying their spare money by the $3,000 or $4000 per month savings of not owning any nearby houses. Lots of these people have vehicles two or three times the purchase price of mine.
Renting is far cheaper than buying here. People in my complex seem to be happy enough. The club house had a taco party a few nights ago. I could not turn down free food. Tasted great and had to get seconds! Why would I want to give up neat things like that and become an FB?
I am imagining the unrest to arise in residential neighborhoods where lots of FBs were lured into buying homes they cannot afford and were subsequently robo-foreclosed by Burger King boy document processors.
If you live in a large, upscale apartment community, I would assume you are safe.
Until the hungry, angry mobs storm your taco party.
You are reminding me of one of those incredible scenes from Inception, with a South America riot playing out on the street then spilling over into the building where Leonardo DiCaprio and his wife are hanging out.
Real estate attorneys, take note:
WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal
* October 15, 2010, 11:14 AM ET
Billion-Dollar Foreclosure Mess Took Root at $75K House
By Emily Peck
How much will the foreclosure mess cost? Estimates are still forming, writes Mark Gongloff in Friday’s WSJ.
Some $154 billion in mortgages could be affected by foreclosure delays, according to an estimate this week by Laurie Goodman, senior managing director at mortgage-bond trader Amherst Securities Group LP in New York.
Morgan Stanley trading-desk analyst Greg Gore estimated in a conference call on Tuesday that as much as $134 billion of mortgage bonds held by the nation’s four biggest banks could ultimately be affected by foreclosure delays.
That’s a lot of money for a problem that the NY Times traces back to a $75,000 house in Denmark, Me. The article, by David Streitfield, looks at a home Nicolle Bradbury bought seven years ago; a tiny little house near the New Hampshire border.
A couple of years ago, Ms. Bradbury lost her job and could no longer make the $474 monthly payments. But her run-of-the-mill foreclosure became anything but when it landed in front of a lawyer at a nonproift group who had worked in the foreclosure industry for years–helping to foreclose on homes that small business owners had put up as collateral.
The lawyer, Thomas Cox, succeeded in getting the deposition of a GMAC ‘robo-signer’ who admitted that he didn’t read through the 400 foreclosures he signed each day.
Mr. Cox then laid out in a court filing what he’d heard from robo-signer Jeffrey Stephan:
The judge hearing Ms. Bradbury’s foreclosure case was persuaded. He rejected GMAC’s request for a foreclosure without trial. Even when given the chance to file amended documents, the judge noted, GMAC still didn’t even include the actual street address of the Maine house.
Lawyers around the country are now looking at this case as a model for further litigation, writes Mr. Streitfield.
…
World War I was started by one guy murdering another (Princip assassinating the Archduke). Leading to the deaths of tens of millions. Like dominoes.
An avalanche is started by one relatively small piece of snow moving. The conditions that make it inevitable are more important than whichever piece of snow moves first.
Best aspect of the Great American Foreclosure Fiasco:
The more FBs’ attorneys and banksters duke it out, the less scope there is for near-term measures to pass on the cost of Wall Street bonuses to innocent bystanders on Main Street in the form of further bailouts.
Check Out These Photos Of Mindblowing, Crazy Big Monster Machines
They might not be elegant or flashy, but these monster machines are some of the biggest, baddest vehicles in existence.
A plane that can carry a train, a hydraulic shovel that takes 230 hours to put together, and a $14 million transporter that travels with a max speed of 1 mile per hour.
Awesome.
Check Out These Crazy Big Monster Machines >
http://www.businessinsider.com/biggest-machines-2010-10#ixzz12XYXx69B
Cute Old Man From ‘Up’ To Play Warren Buffett in TBTF: The Movie
By Mike Taylor
October 12, 2010 | 10:23 a.m.
People who have been aching to know what kind of Hollywood talent will power HBO’s film adaptation of Andrew Ross Sorkin’s Too Big To Fail need wait no longer. According to The Hollywood Reporter, Paul Giamatti has landed the role of Fed Chairman Ben Bernanke.
Here’s the cast list:
* Paul Giamatti (Sideways, Saving Private Ryan) as Federal Reserve Chairman Ben Bernanke
* Topher Grace (”That 70s Show,” and he also played Venom in Spider-Man 3) as former Treasury chief of staff and non-Lehman-bailer-outer Jim Wilkinson
* Ed Asner (Up) as folksy billionaire Warren Buffett
* Tony Shalhoub (Monk) as former Morgan Stanley CEO John Mack
* James Woods (Casino, a ton of other movies) as former Lehman Brothers chief Dick Fuld
* Dan Hedaya (Mulholland Drive, The Usual Suspects) as Congressman Barney Frank
* Cynthia Nixon (”Sex and the City”) as former assistant Treasury Secretary for public affairs Michele Davis
* Michael O’Keefe (Michael Clayton, also he played Danny Noonan in Caddyshack) as financier Chris Flowers
* Ayad Akhtar (The War Within) as Treasury TARP overseer Neel Kashkari
* Kathy Baker (Edward Scissorhands) as Wendy Paulson, wife of the former Treasury Secretary
* Billy Crudup (Almost Famous, the blue naked guy in Watchmen) as former New York Fed chief and current Treasury Secretary Timothy Geithner
* Joey Slotnick (Jerry on “The Office”) as Dan Jester, TARP advisor to Henry Paulson
* William Hurt (Into the Wild, A History of Violence) as former Treasury Secretary Henry Paulson
Ed Asner as Buffett is a terrible casting choice. William Hurt as Paulson sounds kind of interesting, but maybe John Malkovich would have been better- he’s got that Paulson creepiness. Giamatti as Bernanke is perfect. I think Conan would make a better Geithner.
“Ed Asner as Buffett is a terrible casting choice.”
Are you thinking Mary Tyler Moore Ed or Up Ed? I thought the old guy in Up bore a reasonable resemblance to Buffett.
If they use the Up Ed (who I admit does resemble Buffett), then it’s going to be a very strange movie.
Eddie whines that successfully demolitions of his bigotry are “predictable”.
Another straw man.
“Predictable” has what to do with “correct” or “incorrect”?
If the Eddies write here that “housing is the best deal ever and you should buy now or be priced out forever”, they also would be “predictable” replies.
Chump.
Do provide evidence that a small number of “activists” is trying to run the military.
Do return to your original point, chump, because I have not forgotten it, that gays in the military would hurt it just as do islamic terrorists who shoot their fellow officers.
Chump.
Do return to your straw man argument, “you expected better”. Yeah, the guys who argued blacks should not mix with whites in the military because it would hurt morale also “expected better” when called out on it.
Chump.
Do return to your straw man personal claim that “choice” is an element of orientation, or that even if there were “choice” that makes the discrimination ok.
Chump.
Tell us again why what likely is the best per-capita Military on earth- Israel’s- has not problem having both sexes and both orientations serve together with honor.
Chump.
Do show us your study that shows that those who have not asked or told serve better than those who do ask or tell.
Chump.
Are you really secure in your own sexuality, Eddie?
Chump.
Remember Eddie claiming no $800,000 house in Syracuse area could possibly have $25k taxes?
Chump.
Save those kinds of posts for the days when he is on here preaching DJIA = 12K. Let no good insult go to waste.
Hi Prof,
Your point is well taken, but I have a healthy supply of such insults when he spouts either mindlessly or with hate, so I probably can cover him either way
Renting is the new black!
- “Conspicuous consumption” is out.
- “Collaborative consumption” is in.
Rent now, or catch yourself a falling knife in the overpriced asset purchase market.
Schumpeter
The business of sharing
What do you do when you are green, broke and connected? You share
Oct 14th 2010
WHY buy when you can rent? This simple question is the foundation stone of a growing number of businesses. Why buy a car (and pay for parking) when you can rent one whenever you need to load up at IKEA? Why buy a bike (and risk having it stolen) when you can pick one up at a bike rack near your home and drop it off at another rack near your office? Why buy a DVD when you can watch it and return it in a convenient envelope?
Renting is not a new business, of course. Hotel chains and car-hire firms have been around for ages, and the world’s oldest profession, one might argue, involves renting…“consumer philandering” sounds fun.
…
Should I timeshare my toothbrush?
Responding to NYchk, San Jose is still hopelessly overpriced. Tech is still hanging on here. Although residential real estate in the best areas (Saratoga, Los Gatos) has dropped 10-15%, it is still in the $600-$700 per square foot range for 30-50 year old houses. I believe that it has a lot more downside (as in 40% off the peak).
Your best chance of a “deal” might be in the newly built (and, I suspect, largely unsold) condos downtown. However, downtown San Jose is not such great place to live (good luck finding a supermarket), and the school system is poor.
I bought a house in San Jose 1986, and sold in 2003 in anticipation of the bubble bursting (I was right, but very early). I’ve been priced out since then, and expect to continue to rent until I leave the Valley. No regrets.
By the way, as a government employee who will have to live off a pension, my portfolio is heavily invested to counter inflation (my pension will handle deflation just fine). Therefore, I am mostly in gold stocks, and commend them to you as a small part of your portfolio.
First time post by a very long time lurker. Thanks for all you folks do.
Securitization Flaws May Lead Investors to Fight Mortgage Deals
By John Gittelsohn - Oct 13, 2010 12:40 PM PT
Potential paperwork errors on some of the $1.34 trillion of securitized home mortgages may give investors an opening to challenge the legality of deals, threatening to unnerve financial markets, according to Joshua Rosner, managing director at Graham Fisher & Co.
Some loans to borrowers with poor credit before 2007 may not have been transferred to mortgage trusts in the manner required by their pooling and servicing agreements. That raises questions about the ownership of the loans and may allow investors to force lenders to buy back the securities, Rosner wrote yesterday in a note to clients.
The failure to include MBS trust names on documents and to properly assign loans to the trust may encourage MBS holders to challenge the entire securitization, rather than press lenders to take back individual loans that were fraudulently issued, according to Rosner, whose firm advises investors and regulators. That could set off legal fights over almost all subprime MBS sold to investors.
“If plaintiffs bring suit it could rock the market,” Rosner, 44, said in a telephone interview. “If courts allowed those suits to proceed it would well feel much like 2008,” when the bankruptcy of Lehman Brothers Holdings Inc. led to the biggest market collapse since the Great Depression, he said.
…
October 15, 2010
What You Don’t Know about “Mortgagegate” Could Crush the U.S. Banking System
[Editor's Note: In the aftermath of the burst housing bubble, in the rush to foreclose upon million s of U.S. homeowners, big U.S. lenders resorted to apparently fraudulent strategies as part of an assembly-line repossession grab. Money Morning's Shah Gilani, a retired hedge-fund manager, warns investors about the possible fallout facing the U.S. financial system and provides detailed advice on the steps to take.]
By Shah Gilani, Contributing Editor, Money Morning
What most Americans don’t know about ” Mortgagegate” is that “robo-signing” of foreclosure documents is the tip of the iceberg.
The breadth and depth of this newest mortgage crisis is so dangerous that the U.S. Federal Reserve last month pre-announced another potential round of quantitative easing (pundits are calling it “QE2″) to address “potential negative shocks.”
In fact, the fallout potential is so numbing and the actions that birthed it so scandalous that commentators have given the crisis the Watergate-esque title of ” Mortgagegate” (or, as some prefer, “Mortgage Gate”).
Here’s what the news-story headlines aren’t telling you.
…
The Great American Foreclosure Fiasco is going to rock the U.S. housing market to the core. I can feel these things and smell them.
P.S. Bawn an’ bred in Brevard County!
FLORIDA TODAY
Sketchy foreclosure paperwork echoes effects in Brevard
Lenders picking apart foreclosures
BY JOHN McCARTHY • FLORIDA TODAY • October 17, 2010
The decision by some major mortgage holders to temporarily halt foreclosure proceedings while they review questionable paperwork already is rippling through Brevard County, sometimes in ways you might not think.
The local courts — which are dealing with nearly 13,000 foreclosure suits — already have reported an increase in the number of foreclosure hearings being canceled or postponed as lenders such as Bank of America and JPMorgan Chase review hundreds of thousands of legal documents to make sure they are accurate and complete. The move comes after revelations of sloppy, inaccurate — and perhaps fraudulent — legal documents prepared by lenders and their subcontractors.
Attorneys general from all 50 states are investigating.
“While working in Viera last night whole carts of foreclosure cases were coming downstairs, from I believe canceled hearings,” Clerk of Courts Scott Ellis wrote in an e-mail to FLORIDA TODAY on Tuesday.
The immediate impact is that some families will be able to stay in their homes longer as the issues are resolved. But if the investigation by the attorneys general drags on or uncovers major problems with foreclosure suits, it could reverberate through the housing market and freeze the sale of foreclosure properties, which have accounted for one-third or more of all sales on the Space Coast in recent months.
Mortgage giants Fannie Mae and Freddie Mac already have told local Realtors to stop trying to sell homes the agencies own and to remove listings from the Multiple Listing Service, according to Nona Swann, president of the Melbourne Area Association of Realtors.
“It’s a ripple effect. Right now we are definitely having a ripple effect,” Swann said.
…
‘Robo-signing’ to tangle foreclosures
By Kenneth R. Harney / The Nation’s Housing
Sunday, October 17, 2010
You’ve probably seen the headlines about the foreclosure “robo-signing” scandal and its after-effects: moratoriums on foreclosure sales, calls for congressional investigations and threats of litigation.
What might all of this mean to you as a homeowner, buyer or seller?
Potentially a lot.
Sure, you might not be delinquent on your mortgage.
But the house down the street that’s been foreclosed on - and is sitting vacant and poorly maintained - now might not be resold by the bank for months.
The former owners could throw the entire process into question by hiring a lawyer to look through the foreclosure’s documentation for irregularities.
“The phones are ringing off the hook,” said Ronald Scott Kaniuk, a foreclosure- and bankruptcy-law specialist in Boca Raton, Fla.
A coming tidal wave of private and public lawsuits against banks could stall foreclosures indefinitely, Kaniuk believes.
The sheer number of houses and families potentially affected is huge.
During August alone, lenders opened foreclosure cases on some 339,000 U.S. homes and actually took possession of about 95,000 more, according to market watcher RealtyTrac.
All told, an estimated 5 million homeowners are currently somewhere in the foreclosure process, from facing initial court filings to fighting eviction.
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Local ripples appear as big banks halt foreclosures
Jim Gallagher • jimgallagher@post-dispatch.com > 314-340-8390 http://www.STLtoday.com | No Comments Posted | Posted: Sunday, October 17, 2010 12:00 am
Metro East real estate agent Kathy Shemwell thought it was a done deal. She had a signed contract to sell a foreclosed home in Caseyville.
GMAC, the mortgage company that owns the property, had approved the contract for the home listed at $105,000. The buyer’s mortgage was approved. He’d lined up contractors to do repairs.
They were a few days from closing this month. Shemwell’s commission check was practically in hand.
Then came the phone call; GMAC was putting the deal on hold.
“We’re in limbo,” said Shemwell. “We’re afraid many other buyers will be disappointed, too.”
What’s the problem? “It’s the moratorium,” says Roger Roddy, the agent representing GMAC in the deal. GMAC is among several big players halting foreclosures, or foreclosure sales, in states such as Illinois, where court approval is needed to repossess a house. (Missouri doesn’t require a court proceeding.)
…
Posted on Sunday, 10.17.10
The housing crisis
Robo Signers Must Be Stopped
To the depressing list of words and phrases arising from the national housing crisis — short sales, underwater, subprime— add a new one: robo-signers.
Employees of banks and foreclosure firms who blindly rubber-stamped mountains of legal documents have managed to make the housing crisis worse. The result of their failure to ensure that the paperwork they signed was accurate is a Third World kind of mess.
The ensuing avalanche of claims ranging from fraud to forgery and other forms of wrongdoing has cast doubts on property titles, and undermined rightful claims to ownership of condos, homes and other properties involved in litigation or foreclosure.
Evictions are questionable under such circumstances. At least five nationwide companies have suspended foreclosures, with others likely to follow. Some believe this is a good thing, leading to calls for a national moratorium on foreclosures so that stressed home buyers can stay in their homes.
They’re wrong.
…