Bits Bucket For November 16, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Geez, it’s like 230am. Noticed the housing market still is going down.
Heh heh heh…
Are you sure? Seems like it might be going up in nominal dollars, since the dollars are falling at a rate faster than housing prices are falling…
Dollars are VANISHING at the SAME RATE that housing prices are falling.
Poooof.
New York (AP)
Excerpt from a story about Wally World having higher profits on falling sales…
“The company is also focusing on putting more $1 items and mini-size products like detergent at the end of the month as it has felt pressure from dollar stores, where financially strapped shoppers turn when they have only a few dollars left.”
So these would be the same consumers who are going to bid up house prices again, right? Sure they are, sure they are. The plankton struggle to buy laundry detergent and the whales expect a feast?!
Most people use too much laundry detergent. I bet you could run the clothes through the washer with nothing added at all, and other than stuff like grass stains the clothes would release enough detergent into the water to get the whole load clean.
I think that a lot of these “consumers” who shop at dollar stores are the welfare crowd (and the working poor).
But you are 100% right. These folks aren’t going to buy a $150,000 house, much less a a 500K house. Still, the PTB will continue to push on the string, until the house of cards finally collapses.
think that a lot of these “consumers” who shop at dollar stores are the welfare crowd (and the working poor).
They are.
Cast in point: There’s a dollar store within easy walking distance of the Arizona Slim Ranch. I go there to get good deals, and boy do they have them.
While I’m not a richie-rich by any stretch of the imagination, I always feel like I’m the most affluent customer in the Dollar Tree..
Exactly, CO! Who is going to buy the $500k house if the $150k house won’t sell? One of the agents’ biggest laments is that the trade up market is DOA. Gee, I wonder why?
“I think that a lot of these “consumers” who shop at dollar stores are the welfare crowd (and the working poor).
But you are 100% right. These folks aren’t going to buy a $150,000 house…”
….at least not a second time!
Slim, my mom down in Green Valley shops those stores too. They have a huge house on a multi acre lot, too. I’ve had some friends who’ve come to visit ask why my parents shop at the cheapest stores around when they’ve got such a nice house. I always say “how do you think they could afford the house?”
” One of the agents’ biggest laments is that the trade up market is DOA.”
The trade up market is deader than a door nail in Larimer County. I suppose that having the median HH income drop 10% since since 2000 MIGHT be a factor.
I shop in dollar stores all the time, and I come close to qualifying as “the working poor”.
The deals on brand-name products in dollar stores are many. Especially non-perishables, including items like socks. I save 30-50% on every brand-name item I buy.
Only a fool pays full price to save face.
That should say “come no where near close”
Like the last gal I set my heart on, they never were real.
“…they never were real.”
Were they big?
Was she a Realtor™?
yes and no
“yes and no”
Okay, ‘ya got my attention; proceed…
Its 7:30 am now and house prices appear to have fallen even more since you posted a few hours ago.
8:55 and house prices are reacting poorly to the latest news.
Just heard from someone in the northern Midwest that they’ve seen a couple of 50% price cuts on their neighborhood.
Just 2, but wow, 50%? I’ve seen pictures of the neighborhood and it’s fairly nice, well kept, middle class, but semi-rural.
If not for the personal tragedy involved, this evolving situation would be pretty hilarious.
Jacksonville’s foreclosure court moving to public courtroom
Florida Supreme Court chief justice “deeply concerned” after media, ACLU send letters regarding about restricted access to courts throughout the state.
Posted: November 15, 2010 - 7:12pm
Chief Judge Donald Moran (left) and Senior Judge A.C. Soud: Moran said he agreed on Soud’s suggestion to move the court.
By Roger Bull
Saying he was “deeply concerned” about restricted access to foreclosure courts, the chief justice of the Florida Supreme Court directed the state courts administrator to recommend “corrective actions” after a coalition of media and First Amendment groups called upon state judges to open the courts in letters delivered Monday.
Meanwhile, Jacksonville’s foreclosure court will be moving out of a small room that serves as chambers, into a larger courtroom to make it more accessible to the public, beginning next week. Chief Judge Donald R. Moran of the Fourth Judicial Circuit said Monday afternoon that Senior Judge A.C. Soud made the suggestion to move the court, and that he agreed.
An incident involving Soud was one of those cited as evidence of restricted access in letters delivered Monday to Moran and Chief Justice Charles P. Canady. The letters were signed by the American Civil Liberties Union, the ACLU of Florida, Florida Press Association, Florida Society of News Editors, Florida Association of Broadcasters, the First Amendment Foundation and The Florida Times-Union.
“Apparently this has been a problem for a while,” said Sam Morley, general counsel for the Florida Press Association. “But it seems to be getting more common.”
…
Wow I read a bit of the rolling stones article have to read more later
“The letters to both Canady and Moran focused on a recent hearing in Jacksonville that a reporter for Rolling Stone magazine attended, which was being held by Soud, who is in charge of the foreclosure court in the Fourth Circuit. Soud later threatened to hold April Charney in contempt after the Jacksonville Area Legal Aid lawyer brought the reporter to court.
His e-mail said: “Media are permitted, of course, when proper request is made to the security officer because we do not know who is a property owner or media.”
The letter to Canady also mentioned incidents in other cities where the public, or even homeowners facing foreclosure, were told that the foreclosure hearings were private. The letter said that a Duval County homeowner who was representing herself in foreclosure was told only attorneys were permitted in the hearings.
Here’s to hoping the Wall Street Megabanks have f-d up their legal rights to the collateral underlying 33 million mortgage loans!
Foreclosure mess impact could be severe: panel
A vacant home for sale is pictured in Yonkers, New York, October 26, 2010.
Credit: Reuters/Mike Segar
By Corbett B. Daly and Dave Clarke
WASHINGTON | Tue Nov 16, 2010 1:06am EST
WASHINGTON (Reuters) - Widespread problems in how U.S. lenders documented foreclosures could spark a wave of legal challenges resulting in massive losses to banks and serious new troubles for the housing market, a federal watchdog warned on Tuesday.
The Congressional Oversight Panel, the overseer of the government’s Wall Street bailout, in its latest report laid out a range of possible outcomes for the foreclosure paperwork mess that emerged in September.
In the best-case scenario, the watchdog said, concerns about the paperwork mess are “overblown” and banks would be able to proceed with foreclosures as soon as invalid court documents were replaced with proper paperwork.
But in the worst-case scenario, it warned that banks could face billions of dollars in losses.
Banks are accused of having used “robo-signers” to sign hundreds of foreclosure documents a day without proper review, a fiasco that reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.
Bank of America, Ally Financial and JPMorgan were among banks that temporarily suspended foreclosures pending internal reviews of their practices, but have since begun to resume sales of foreclosed properties.
In the worst-case scenario, the panel said banks may be unable to prove that they own the mortgage loans they claim to own, legal challenges could call into question the validity of 33 million mortgage loans — many of which were then securitized and sold to investors — and banks could face billions of dollars in unexpected losses.
“If such problems were to arise on a large scale, the housing market could experience even greater disruptions than have already occurred, resulting in significant harm to major financial institutions,” the 125-page report said. “At present, the reach of these irregularities is unknown.”
…
Every penny that a bank that was part of the securitization chain has to pay out (whether it is because they never validly tranfered the note and it can’t be transferred now for whatever reason or because the disclosure in the bond prospectus was not sufficient under fincial regulartory rule) will go somewhere. It may go to an insurance company, a pension fund, a hedge or private equity fund, a mutual fund, a university endowment, a private foundation, or some other bond holder, but it has a home and will get there eventually. Oh, except for the ones that go to the lawyers that help those pennies travel home.
I don’t see why the government should get in a panic because these pennies need to go back to the people who should own them, instead of hanging out with the banks that shouldn’t.
I explained this to my dad a few weeks ago. He got very thoughtful.
Of course, the owners of the very “innovative” synthetic one are much more likely to be stuck, but anyone who buys something like that is just asking for trouble. Imagine wanting to buy some physical gold, being told that it is a little cheaper if you buy an ETF that tracks gold but doesn’t bother to buy and hold any physical metal but pays out the same as if they did. The you do it. That is how much sympathy you should have for the people who bought the synthetic ones. Innovation, my butt.
Innovation, my butt.
ISTR Paul Volcker saying that the ATM was the most significant financial innovation of recent times.
“…ATM was the most significant financial innovation…”
And I am pretty sure he was not discussing the so-called ‘home equity ATM’…
He wasn’t. He was talking about the “money walls” that one finds outside of banks.
and I think that remark was intended to belittle the industry, i.e. bfd to an automated teller in the place of a human.
Years ago there were old-fashioned REITs, who presumably did all the assignment recordation by the book. Maybe the REIT will come back into fashion now.
Imagine wanting to buy some physical gold, but are told there is none for sale.. at least not at any reasonable price.
However, since gold is only going up (so you believe) you must find some way to get into the market.
Someone offers you that ETF.. the synthetic stuff..
—–
Or how about you want to buy some MBS.. but you get the same story. The banks have lent to everyone with a pulse, and there’s practically nobody left to sell a home to.
Again, you are offered some synthetic stuff…
Do they deserve sympathy? No.
Innovative? Depends on who you ask.
Innovative scam operation for Megabank, Inc to make billions off, then pass the trash to the U.S. tax payer when the scheme blew up…
Innovative scam operation for Megabank, Inc to make billions off, then pass the trash to the U.S. tax payer when the scheme blew up…
well it worked didn’t it how can you lose when Washington has your back ? In the long run this kind of government will cause everything to fail.
In the hypothetical situation, you ask the people who actually own physical gold whose physical gold did not go up in value to what the market really demanded (that price that you claimed was too high was the market price) because demand for real gold was diverted to a synthetic market index that follows gold but doesn’t hold any. Synthetic bonds are just as market distorting.
My friends father just died a few months ago. He had close to a million bucks in gold. I asked my friend how he kept it secure. He didn’t have to- it’s all on paper.
When one holds physical gold, it’s not always easy to sell. If you go to a coin shop type place, you’re not going to get the spot price. They need to make a living, so they’re going to take a nice cut. And, as gold prices are falling, I’d imagine they’d be less than generous. Also, there may be times that they won’t buy period, except at deep discounts. If they don’t want it, you’re SOL. I don’t know anybody who takes gold as payment for goods and services.
Actually dealers have been paying above spot for physical since 2008.
So far I haven’t been able to get a copy of that 125 page report. Anyone find it please post the link.
Try here - November 16th entry:
http://cop.senate.gov/reports/
Looks like there might be some other interesing stuff too.
Thanks. The direct link is
http://cop.senate.gov/documents/cop-111610-report.pdf
I scanned through the report. Nothing really new in it - no shocking revelations of misconduct. It’s written as part indictment and part law review article, and is about 1/3 footnotes.
By the way, when you have trouble finding stuff like that, I recommend googling the name of the committee, in this case Congressional Oversight Panel. Committee and subcommittee sites are very heavily linked to so they come up very high on a google search. Then just click on the reports tab or the hearing tab or whatever it is you want to find. Works nearly every time.
Thanks polly. Great tip!
Looks to be an interesting meeting today.
Problems in Mortgage Servicing From Modification to Foreclosure
Tuesday, November 16, 2010
02:30 PM - 05:00 PM
538 Dirksen Senate Office Building
The witnesses will be: The Honorable Tom Miller, Attorney General, State of Iowa; Ms. Barbara J. Desoer, President, Bank of America Home Loans; Mr. David Lowman, CEO, Chase Home Lending; Mr. Adam J. Levitin, Associate Professor of Law, Georgetown University Law Center; and Ms. Diane Thompson, Counsel, National Consumer Law Center. Additional witnesses may be announced at a later date.
Witnesses
Panel 1
•Honorable Tom Miller
Attorney General
State of Iowa
•Ms. Barbara Desoer
President
Bank of America Home Loans
•Mr. David Lowman
CEO
Chase Home Lending
•Mr. Adam J. Levitin
Associate Professor of Law
Georgetown University Law Center
•Ms. Diane E. Thompson
Counsel
National Consumer Law Center
dog and pony show?
If such problems were to arise on a large scale, the housing market could experience even greater disruptions than have already occurred
Yay! Lower prices for all!
I can’t wait to buy back my 2k sqft burnt-adobe block pad in Tucson with black-bottom pool, terra cotta tiles, BBQ ramada and jacuzzi, 2-car garage on 1.5 acres for about $95k.
Congress will pass a law calling for a do over for the banks.
Congress is taking a run at reviving HR-3808.
Holy moly it must be bad.
Congress is taking a run at reviving HR-3808.
Those @$%&*)% guys.
Foreclosures Raise New Concerns About Banks, Panel Says
By DAVID STREITFELD
Published: November 16, 2010
The foreclosure documentation crisis could have severe consequences for the housing market and economy, a Congressional panel warns in a report scheduled to be released Tuesday.
In the worst case, the banks will choke on the volume of bad loans they could be forced to reabsorb, leading to another financial crisis, the panel said. But the panel, which was set up after the financial crisis two years ago, also allowed for the possibility that concerns over paperwork irregularities will prove overblown and the crisis will recede.
“Despite assurances by banks and Treasury to the contrary, great uncertainty remains as to whether the stability of banks and the housing market might be at risk,” the report by the Congressional Oversight Panel said. It recommended giving banks new stress tests.
…
We have to save the banks! What can be done? Perhaps a few trillion dollars could be printed by Burn-ACK-eee and donated to the big banks. As long as he is printing anyway…
A few headlines from across the pond…Looks like all is well.
IRELAND ON THE BRINK…
…TOLD TO TAKE EU BAILOUT
PORTUGAL HITS PANIC BUTTON…
GREECE: DEFICIT MUCH BIGGER THAN ESTIMATED…
…LASHES OUT AT GERMANY
Yawn…should be in bed, but tutoring duty calls.
Shanghai market continues to plunge.
Jennifer Grey wins big on Dancing with the Stars.
Nobody puts Bernanke in the corner?
Nobody puts Bernanke in the corner?
Or ON the corner, G. Gordon Liddy style…
Details man!!! We want details!!!!
All the European banks just had their stress test. Result: All is well in Euroland. Nothing to worry about.
It’s funny that every time the dollar hits around $1.40/Euro the PIIGS are brought out for everybody to see. Merkel screams “Here everybody, look at our beautiful PIIGS!”, then the Euro drops. The PIIGS, are injected with a few billion Euros and are put back up until they are needed again.
Yes, some of the PIIGS, like Greece, are occasionally ill behaved, but the others know what’s good for them, so they shut up and play along. The Greek specimen might get cut off from its billion Euro diet if it continues misbehaving.
There is no procedure for cutting a country out of the Eurozone… It just seems to be a matter for the markets, in that at a certain point the Greeks/Portuguese/Irish just will not be able to finance their debts, and will have to start issuing scrip or something.
Private equity and Hedgies are still making lots of money in Europe. The people in the countryside have massive excess capacity for food production. The middle classes and suburbanites are are going to get slammed when the entitlement systems collapse. Just like the American middle classes are the ones most in trouble now.
Some might leave the Eurozone voluntarily out of self preservation. Germany never really wanted to be a part of it to begin with.
I would guess that the Euro would fail “from the top” and not from the bottom - you are probably right that Germany would leave first. It’s always easier to quit from an organization than to kick others out.
Makes the limeys look positively brilliant.
They are enjoying the exports that come with a slightly weaker currency…
Ah dear, the misconceptions that flow across the atlantic, and help to distract attention from the real source of the problems.
Germany is one of the senior countries in the EC, the chances of them voluntarily leaving it are negligible.
The British would look a little more brilliant if they hadn’t completely hollowed out their economy in favour of the financial sector. Consequently they’re sitting on a housing bubble that has pushed prices to 6 to 7 times salaries, very little productive industry worth talking about, and a lot of financial malarky. They’re about to fire half a million civil servants to pay for the bank bailout.
There’s a reason London was being referred to as Reykjavik on Thames a while back.
Germany was forced into the Eurozone by France. The deal back in 1990 under Chancelor Kohl was Germany agrees to the Euro and France agrees to unification. Germany didn’t have a choice back then, now they do.
Care to substantiate that? Feel free to engage in whatever historical revisionism you need to btw.
http://en.wikipedia.org/wiki/History_of_the_euro
I was there at the time. The collapse of East Germany was incredible, the border was completely open and abandoned months before actual unification took place. If I was going to link that with the Euro, I would claim the rest of Europe begged West Germany to sort the mess on its border out, and were happy to agree to anything they wanted.
But that wasn’t the way things were either. History is never a single act.
It would be better to inform yourself before accusing others of revisionism.
http://www.presseurop.eu/en/content/article/351531-you-get-unification-we-get-euro
Link doesn’t post but if you google
“mitterrand euro unification” its the second hit.
You should first inform yourself before running around accusing others of revisionism.
google:
“euro mitterrand unification”
2nd hit. Read.
I worked for a German company at the time. I do not recall a single mention of the French. Like the Germans would even consider asking the French for permission to take a piss.
“Like the Germans would even consider asking the French for permission to take a piss.”
Exactly.
Thanks warlock!
Buffett dumps Home Depot
Berkshire Hathaway (BRKA), the Omaha, Neb., company run by the billionaire investor, sold its entire Home Depot stake in the third quarter, according to a filing Monday with the Securities and Exchange Commission.
Buffett says bye-bye
Berkshire held 2.8 million Home Depot (HD) shares at June 30 and held as many as 5 million shares over the past decade, but didn’t list the Atlanta-based retailer in its quarter-end holdings.
It took him that long?
Many people, including Yours Truly, have been commenting on how un-busy their local Home Depots have been since the housing bubble started hissing air. Methinks that the word has finally reached the Oracle of Omaha.
Funny thing is I see more activity at the local ACE/True Value HW stores than at the local HD or Lowes. I know we go to ACE because HD and Lowes never seem to have what we’re looking for when we do home reprairs but ACE does.
Home depot doesnt have a lot of specialty products.You have to go to local hardware stores to find a lot of products.Lowes and hd continue the mcdonaldization of society.
You know, it is funny how even though Ace has the smaller stores, they seem to have the RIGHT thing you need.
Kansas City commercial property sales fall 42 percent
Kansas City Business Journal
Kansas City commercial property sales fell 42 percent during the 12 months that ended in September, according to LoopNet Inc., a commercial real estate information company.
For the most recent quarter, total commercial property sales in Kansas City were $37.5 million.
Ned O’Connor, managing member of Kansas City-based Waterford Property Co. LLC, said that institutional investment money is plentiful but that sales remain feeble because investors are waiting for prices to drop further.
So, builders are building Craftsman style homes again? This is such a propaganda and PR piece, but at least the home isn’t starkitecture. How to market a postage stamp lot, is more like it. Too bad this is a two-story, and no doubt has an HOA.
http://www.usatoday.com/money/economy/housing/2010-11-14-smaller-homes_N.htm
Not to mention that more of the lot is devoted to driveway. And what exactly is that driveway supposed to be? I hope it’s not the “pavers laid down on dirt” that they appear to be, cause that won’t last long. You’d be better with a ribbon driveway IMHO.
Not to mention that more of the lot is devoted to driveway.
Just think of all the bicycles you could park in that driveway. And, with just a bit of effort, you could make it into quite the skate park.
Just more New Urbanist hype, nothing new here.
The idea of going back to front porches and people hanging out in the front where they can raise a beer to the neighbors across the street doing the same goes back to at least 1990’s new urbanism. The Disney town, Celebration, Florida, was all about it. Didn’t work all that well. People still have TV’s and those are inside. I remember playing in the street when I was a kid, but even back then it was dangerous and people didn’t drive as fast back then.
Also, that big overhang porch roof keeping the sun out of the front windows may be OK in places where the sun it too strong all year round, but it would make northern houses kind of gloomy from October to April at least. My grandparents house had awnings that went up in the late spring and came down in mid fall.
Air conditioning and TV put the kibosh on people hanging out on the in the summer, at least in the Souther states. Back in the day, people hung out on the porch because they had little else to do, and in the evenings it was cooler than being inside. Heck, houses used to have “sleeping porches” in the back, so you could try get a breeze and some relief from swealtering Summer nights.
So we are dealing with a correlation/causation fallacy again? People used to be friendly with their neighbors and when they were, houses had front porches where people hung out, therefore if you put front porches on houses, people will hang out there and be friendly with their neighbors no matter what else has changed in the meantime. I know the research is hard and expensive, but you can’t just go around making stuff up and expect it to pan out.
I guess they could bring their laptops out to the front porch while they do Facebook, but I doubt that will happen.
You just gave me an image of the modern gossipy old lady texting her counterpart on the other side of the street when something juicy is happening as they each sit on their own porch appearing to be minding their own business.
You just gave me an image of the modern gossipy old lady texting her counterpart on the other side of the street when something juicy is happening as they each sit on their own porch appearing to be minding their own business.
Aw, come on! We gossipy old ladies would never do our texting out on the porch. That’s way too obvious.
We’d much rather be in the house, sitting at our computer, where none of the equally snoopy neighbors can see us.
I would love to have a front porch and yes, I certainly would be out on it.
In my childhood neighborhood, if you sat on the porch and raised a beer at the neighbors, the neighbors would label you as the drunk who lives in that house!
“The “proliferation of bathrooms” is also on the way out, Susanka adds. For a while there, it seemed, every room had its own bathroom and people just didn’t use them. It’s time “to bring some sanity back to the equation,” she said.”
Having more bathrooms is good to a point, they just don’t need to be the size of a master bedroom.
“And, the front porch is back. Builders are increasingly moving the garage to the back of the house and adding a big porch on the front.”
How will that screened porch look with bars? How safe will that porch be in some neighborhoods in tough times.
For the garage, better to have access via an alley at the back of the lot. Then there’s no need for a driveway. Then make the house wider (instead of the space on the side for a driveway). That leaves a larger back yard that could be used for any number of purposes including growing food.
Having more bathrooms is good to a point, they just don’t need to be the size of a master bedroom.
Here at the Arizona Slim Ranch, the bathrooms are so small that you need to step outside to change your mind. But, what the hey, I don’t do much thinking in my restrooms.
As long as the magazine rack fits in there its all good.
Truth be told, I have a bookshelf in the bigger of the two bathrooms.
And, ack! I’m out of books! Gotta go back to the library and feed my addiction!
“Here at the Arizona Slim Ranch, the bathrooms are so small that you need to step outside to change your mind.”
I was mostly taking a shot at the ridiculously super-sized McMansion bathrooms.
I’m not arguing for tiny. The bathrooms in the apartment my parents are renting is so small the narrow doors practically scrape the edge of the toilet when you open and close the door.
When my mother slipped on ice and broke one of her ankles last winter, the tiny bathrooms were a major issue.
What my daddy called a “shit, shower, and shave” bathroom, because it was so small you could do all three at the same time!
You are right. I want Turrets on my front porch, along with sufficient altitude to gain military superiority over my neighbors.
BTW, Being a renter, our previously high flying resort is filling with folks who “bought too much house” and thousands of babies. The place is alive with the sound of screaming children any more. When we moved here it was really nice. ALL professionals, high credit score required etc. The place has turned into an armpit.
I for one plan to purchase a large piece of property - all cash and put a trailer on it if that is all I have left over!
There’s been a trend where I live in psuedo-craftsman in the mid to low-mid market, new builds.
They styles are alright, but the damn paint combinations are hideous!
Foreclosure mess could threaten banks, report
Foreclosure documents scandal could threaten big banks, hurt US homeowner program, report says
WASHINGTON (AP) — The disarray stemming from flawed foreclosure documents could threaten major banks with billions of dollars in losses, deepen the disruption in the housing market and hurt the government’s effort to keep people in their homes, according to a new report from a congressional watchdog.
Revelations that several big mortgage issuers sped through thousands of home foreclosures without properly checking paperwork already has raised alarm in Washington. If the irregularities are widespread, the consequences could be severe, the Congressional Oversight Panel said in a report issued Tuesday. The full impact is still is unclear, the report cautions.
Employees or contractors of several major banks have testified in court cases that they signed, and in some cases backdated, thousands of certifying documents for home seizures. Financial firms that service a total $6.4 trillion in mortgages are involved, according to the new report. Big banks including Bank of America Corp., JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage have suspended foreclosures at some point because of flawed documents.
Paulson & Co., the hedge fund run by John Paulson, trimmed positions in Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. in the third quarter as regulatory changes and disputes over faulty mortgages threatened to hurt bank profits.
Paulson, whose New York-based hedge fund has $33 billion in assets, sold 30 million Bank of America shares in the quarter, or about 18 percent of his stake, according to a regulatory filing yesterday. The billionaire’s position in the Charlotte, North Carolina-based bank was valued at $1.8 billion as of Sept. 30. Bank of America shares fell 8.8 percent in the quarter.
Revenue at U.S. banks shrank in the third quarter, led by Goldman Sachs Group Inc. and Citigroup Inc., as tighter capital rules and restrictions on bank trading are squeezing lenders. Banks also may be forced to repurchase as much as $179.2 billion in mortgages that were packed into securities, according to Christopher Gamaitoni, vice president of research at Compass Point Research & Trading LLC in Washington.
“For the hedge funds, I think a lot of the easy money had been made in bank shares,” said Doug Ciocca, managing director at Renaissance Financial Corp. in Leawood, Kansas, which oversees $2 billion in assets. “From here it will be harder to swallow a process of financial reform and that will impact profits, especially when the banks are struggling with their identity.”
Does this help explain why Washington, DC RE prices have been particularly strong?
For all those wondering how to cut down on government expenditures, here’s a thought: cut the skyrocketing salaries! A study by USA Today, using US Office of Personnel Management data, confirms what has been widely known: that the biggest beneficiaries of government largesse over the past 5 years as a worker cohort, are none other than Federal workers themselves. The numbers are stunning: those earning over $150,000 in the past five years have grown from 7,420 to 82,034, a 1,006% increase. More shockingly, those earning over $180,000 has surged from just 805 in 2005, to 16,912 in 2010: a 2,001% increase. And it is on the background of this that Congress is planning on giving 2.1 million federal workers another 1.4% across the board pay raise! Additionally, it appears that the bulk of the gains have taken place since Obama took office. Can someone please stop the lunacy: this country is beyond bankrupt and it turns out that in addition to Wall Street (which everyone knows does nothing but transfer wealth from the middle class to a few choice CEOs and groupthinking Bloomberg terminal operators), the biggest thief is the very government itself, which has perfected the art of giving with one hand, and taking with 10, almost as well as those enclosed in glass corner offices on Park, Lexington and Broad (and now West) in NYC.
Link: http://tinyurl.com/2chqzhh
Of that group, approximately a third are doctors. Over half are doctors, lawyers, senior managers and research scientists.
On the other hand, the median income for even general practise physicians is $200K and the median income for specialists is $350K. Paying a senor research doctor at the CDC or NIH $150K is a bargain.
Agreed.
Another data point: One of my university clients has a brother who’s a research scientist at the FDA. He could make plenty more in private industry.
and yet some mysterious combination of magical events makes him stay at the FDA? Seriously? I’m almost positive that he, just like *almost* every other federal or private employee looked around at their options and chose the best combo of salary/benefits/working conditions he could find. It’s not like people go, “oh i have an offer for 80k and one for 60k for the *exact same job*, but I will take the 60k job because it is for the good of the country” . No. There are better benefits, retirement, easier working conditions/hours etc. in govt jobs. Your brother might be able to make more at another institution, but he might also have to work 10-12 hour days, have a 401k as his retirement plan, pay a good portion of his own healthcare costs, be subject to the whims of the market for his yearly bonus, and also be subject to potential cutbacks, furloughs, or other unpaid time off. Plus I guarantee there are fewer vacation days. It almost makes me wonder how private companies can compete for these workers against the guaranteed budgets of the gov’t backed by taxes. It almost makes me sick when I look at my paycheck and see the taxes being taken.
Just to address a few things:
Yes, government hours are supposed to be pretty regular but most people who are professionals work longer. Technically you can get “credit hours” to make up for additional time worked but the procedures are a pain and often not worth it.
Federal employees get 13 days vacation the first three years. I hadn’t had vaction time that limited since I went to law school. It is great for general admin, but professionals are used to more. Now (after three years) it is back to what I had in my first job out of law school.
Federal employees do pay for part of their health care premiums. I pay for about a third of mine and they are going up. It is state and local employees who often get their health insurance without paying for part of it out of their salary.
Federal employees do still have pensions but for anyone hired since 1984 it is only one percent per year with an absolute maximum of 40% of average of highest three and bonuses or overtime (for those who are allowed to get it) are NEVER included. Since the median starting age for federal employees is in the mid thirties, unless you are working past 75, that max will never be met. A 401(k) is also available. And we pay into social security just like anyone else.
Bonus? Bonus? Yeah, I got a bonus. About 1% of my salary for being near the very top of all employee performance ratings in my division. Nice, but hardly motivating. I got more my first year out of law school just for showing up at the office for two months.
And I do consider ethical satisfaction and the chance to serve my country a substantial chunk of my compensation. A very substantial chunk. Yes, this exact job probably doesn’t exist in the real world, but if it did, I wouldn’t do it for an investment bank for a 20% raise. The real issue is that here I have the opportunity to work to get to the right answer, not the one that will make the bank the most money. That opportunity to put truth first, doesn’t happen too often in the real world.
And I do consider ethical satisfaction and the chance to serve my country a substantial chunk of my compensation. A very substantial chunk. Yes, this exact job probably doesn’t exist in the real world, but if it did, I wouldn’t do it for an investment bank for a 20% raise. The real issue is that here I have the opportunity to work to get to the right answer, not the one that will make the bank the most money. That opportunity to put truth first, doesn’t happen too often in the real world.
Thank you for your service, polly.
Thanks polly.
Instead of pointing fingers at government employees supposedly making “fat bank” we should be looking into the billions and billions of dollars in fraud by folks, like oh I dunno… Haliburton and many, many others.
Not to mention a few states as well.
Over half are doctors, lawyers, senior managers and research scientists.
Well, that’s a relief. I am so glad that we aren’t paying $180K a year to people who are merely “junior” managers (over half the time, anyway). It is great to know that, in over half the cases, the recipients of these salaries are seasoned administrators who will wisely oversee the rank and file officials. And clearly, we rubes out in hickland are getting a bargain for the sage instruction from DC on how to run our lives safely and fairly!!
NOT!!
Actually, there are crazy physicians (like myself) who like to be involved in clinical research, even though it pays less than treating patients. So you get paid less for the percentage of time you spend doing research. You can’t easily do research in private practice, hence, you work for the government (NIH) or a university medical center. And clinical research advances medicine.
“Over half are doctors, lawyers, senior managers and research scientists.”
I did not see that data in the article but in any case, why the explosion in the numbers over the five year period? In the industry where I function, there has been little or no general wage increase over that same period.
Because there will always be a number of people crossing a particular threshold number when their salaries go up, even by very small increments. The fact that the threshold number where you can see a large increase happens to be a very round number at this point is irrelevant. If you went back a decade, there would be a much higher number of people who made (OK, making it up here) more than $128,567 between one year and the next.
Also, since there has generally been less hiring in the private sector over the past few years, fewer government workers are leaving to go to the private sector to get more money. And if their spouses were laid off, they are definitely going to stay around because their family needs the health insurance. So more people are going to get whatever step (experience) increase that gets them close to the top of the pay scale.
You can google federal government salary tables to get more information. A lot more information including the historical tables. Just remember this, in most cases a grade increase is a whole new job that you have to compete for with a new job application, a new HR process to get on the most qualified list, and interview and all the other bells and whistles - including competing with people who are not government employees. And step increases happen fairly automatically but NOT every year except at the very bottom of a pay scale. There is supposed to be a way to get a step increase faster than standard (every other year in the middle of the pay scale and every third year towards the top) if you are completely outstanding, but in reality it doesn’t ever happen in the upper grades. We are supposed to be fantastic at what we do. It isn’t really considered special.
One reason could be that they’re available, people don’t tend to apply for government jobs when times are good. Another possibility that they were consulting jobs previously, while now they’re back on the books.
DC’s a bad example because the government pays a premium to attract people to the Capital and that money chases local market home prices and both rise for the same reasons (no one will take a job where they can’t afford a home, and government job salaries drive home prices so the two tend to ratchet off each other). It’d be far more prudent to shift federal jobs (aside from Congress and the Supreme Court) to other areas of the nation as much as possible. Moving Commerce to Baltimore or Philly, NIH/Bethesda to Seattle or Minneapolis and HUD to Detroit and others would alleveate some of that problem.
Of course federal salaries are generally a drop in the bucket compared with entitlements, but that’s a whole other can of worms.
I’m signed for USAJobs email alerts for Fed Gov jobs in my area. The filtering is low res, so I get a lot of IT jobs in my inbox, even though I’m in IT.
What I do see is that the Fed Gov IT jobs pay WAY better than private sector IT jobs, and that’s just the salary. I know a gal who got a quickie masters in IT (no prior experience) and because her hubby is in the military she moved to the front of the line and got a job. She’s already getting 6 figures after about 4-5 years. The IT guys where I work get 60K.
Polly’s comments are right on the money (no pun intended). As someone who works in a field office, losing some of the headquarter’s staff, especially some of the “policy” positions, would probably improve some of what we do.
Nov 17, 2010
Bernanke - gold machine
By The Mogambo Guru
I was delighted by the humor of Su Wei, a Chinese climate-change negotiator at the international climate change conference, calling the United States “a pig preening before a mirror.” Hahaha! It’s funny because it’s true! Hahaha!
Of course, he meant in the context of carbon emissions and all of that “green” stuff, but it perfectly describes the fiscal policies of the Obama administration, too, but not our monetary policies.
No, I envision that Mr Wei (or Mr Su, I never can remember which is which, and for whom it works and for whom not) would describe the foul actions of the despicable Federal Reserve in creating So Freaking Much (SFM) money so that the odious Barack Obama administration could deficit-spend us into an additional US$3.5 trillion of national debt over the last two years as, “An idiotic counterfeiting pimp preening before a mirror, who stupidly prints money for massive congressional deficit-spending, thus screwing the dollar, where inflation in prices pillages up and down the country, everything turning into crap until everything is in ruins, and misery and suffering abound.”
…
And I think that even the Bible has something about “the love of money is the root of all evil”, although the shortened, bastardized version is “money is the root of all evil”, which, in this case, is entirely appropriate in the case of the Federal Reserve, the World Bank, the Bank for International Settlements, the International Monetary Fund, the Bank of Japan and the European Central Bank, just to name a few of the banker scumbags who saw a chance to make money for themselves and their friends by heedless expansions of their respective money supplies to finance an expanding menu of leftist “social justice” idiocies, which they did with an almost idiotic blithe abandon.
And they still do it today, even as results of their insane previous expansions of the money supply collapses around us all! Yikes!
And now Bernanke is going to quadruple his monetary insanity, and create a staggering $110 billion in new money per month!
So if $10 billion a month under Greenspan, and then $20 billion a month under Bernanke, made gold go from a low of $250 to over $1,400 an ounce and silver from $4 an ounce to over $28, what do you think will happen to their prices when Bernanke injects his promised QE2 of $110 billion a month? Hahaha!
Me, too! Me, too! And that is why I am even more frantic than ever to buy gold, silver and oil, because, man, oh man, “Whee! This investing stuff is easy!”
The Mogambo Guru is losing it.
Sad.
He sounded the housing alarm, but to no avail
In August 2007, Michael Blomquist sued major subprime lenders, including Washington Mutual, alleging that they had helped sustain the housing bubble. (George Frey)
By Greg Gordon
Sunday, November 14, 2010
Former Treasury secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke and other top government officials have said they did not notice the dangers that Michael Blomquist saw in the runaway California housing market until five years after he did.
As home prices and loan amounts in California’s Silicon Valley, one of the nation’s hottest markets, began mushrooming in late 2003, lying, scheming and recklessness were becoming everyday occurrences, Blomquist said.
Blomquist, a San Jose real estate and mortgage broker, was sure that tricky loans - and the inflated incomes on loan applications - would lead to a housing bubble with disastrous consequences.
Refusing to commit “felony mortgage fraud,” he said, he closed his offices in January 2004, long before the housing meltdown, and began a sort of one-man crusade to expose what he calls “a criminal conspiracy to turn the housing market into a giant Ponzi scheme.”
Over the next four years, Blomquist futilely tried to dissuade clients and friends from putting their life savings into pricey homes. He wrote letters warning federal regulators and members of Congress that mortgage fraud was creating “a perfect storm” in the housing industry.
Acting as his own attorney, he even waged a federal court fight against some of the biggest subprime players, as well as Paulson and other top federal regulators, accusing them of conspiring to fraudulently inflate home prices and asking the court to bar the issuance of one widely used type of risky mortgage.
Responding to Blomquist’s letter on Sept. 1, 2005, Sen. Dianne Feinstein (D-Calif.) assured him that she was “monitoring the situation closely.” Suzanne Killian, an assistant director of the Fed’s consumer unit, advised him later that month that his concerns would be considered.
In the end, however, his warnings brought no serious action until the bubble began to burst.
…
Blomquist, a San Jose real estate and mortgage broker, was sure that tricky loans - and the inflated incomes on loan applications - would lead to a housing bubble with disastrous consequences.
Didn’t he used to post here?
This would have been a great place to obtain the information which he shared with our fearless economic leaders.
Could Blomquist be our old Paladin??
I remember him posting about the letters he was writing. If so, I’m impressed that he pushed as hard as he did.
Yep.
A personal hero.
“a criminal conspiracy to turn the housing market into a giant Ponzi scheme.”
“…We are supposed to give a pro/con side of the issue also.”
Opening statement: “Fraud! Fraud! Fraud!”
Wall St. : “You Lie!”
Main St. : “You Lie!”
Gov’t Housing : “You Lie!”
Foreign Investors : “You Lie!”
Rating Agencies : “You Lie!”
realtors : “You Lie!”
brokers : “You Lie!”
appraisers : “You Lie!”
Strawberry-pickers : “You Lie!”
Doctors : “You Lie!”
The Irish Times - Friday, November 12, 2010
Fed playing a dangerous game with monetary policy
CHARLIE FELL
SERIOUS MONEY: WILLIAM McCHESNEY Martin, the longest-serving head of the Federal Reserve before Alan Greenspan, declared that a central bank was in “the position of the chaperone that has the punch bowl removed just when the party was warming up”.
Paul Volcker understood the sentiment of a former champion of price stability, but his ultimately successful battle to throttle runaway inflation and the tough monetary policy required, saw him removed from office and replaced by the politically astute and serial bubble-blowing “maestro”.
One would think that the central bank would know better in the post-Greenspan years, but Ben Bernanke, the chief architect of his predecessor’s policy, is now in charge and is hellbent on inflating asset prices in a desperate attempt to thwart the private sector’s rational effort to repair their overstretched balance sheets.
…
“a desperate attempt to thwart the private sector’s rational effort to repair their overstretched balance sheets”
Why would they care about Main St. or middle class individuals? As far as they are concerned they own us.
But don’t they?
High & Low Finance
Fed Efforts to Revive Economy Find Critics
By FLOYD NORRIS
Published: November 11, 2010
Can you remember when the Federal Reserve was above criticism? When politicians vied for Alan Greenspan’s favor and fell all over themselves praising his wisdom?
Now poor Ben S. Bernanke, who succeeded Mr. Greenspan as Fed chairman, is being blasted from all sides. It is bad enough that his latest effort to revive the American economy has taken on a name previously used for a 40-year-old cruise ship that no longer sails — QE2.
He is attacked by Americans for printing money and by overseas officials for trying to help American trade by undermining the dollar. Some Republicans claim to believe the country would be better off without a central bank at all.
…
Interesting times:
‘Can you remember when the Federal Reserve was above criticism?’
I can remember when you were considered an extremist for even talking about the Fed too much. Here’s a question; in a free society, why would any group be above criticism?
‘When politicians vied for Alan Greenspan’s favor and fell all over themselves praising his wisdom?’
Tsk tsk, New York Times; it was the media that was largely responsible for the false admiration. Now we can see that not only is placing the Fed above criticism and “worship” of financial elites stupid, but it turned out to be very dangerous.
‘Ben S. Bernanke…is being blasted from all sides…He is attacked by Americans for printing money and by overseas officials for trying to help American trade by undermining the dollar. Some Republicans claim to believe the country would be better off without a central bank at all.’
I’ve never seen this level of disgust with the Fed, or Washington DC, for that matter. Consider this, these people fly around the world, riding in limos, telling us peasants we should shut up and buy something. All the while they’ve been sending jobs overseas, “policing the world”, etc, and borrowing almost all the money to do so.
I’ve mentioned before that the press makes a big deal out of Bernankes ‘expertise’ on the great depression. But that’s ancient history, and we’d do better to look at more recent bubbles. Did all the paper pushing help Japan, or did it make it worse? And would Japan have been better off without a central bank?
Let’s look at the Irish Times article above:
‘One would think that the central bank would know better in the post-Greenspan years, but Ben Bernanke, the chief architect of his predecessor’s policy, is now in charge and is hellbent on inflating asset prices in a desperate attempt to thwart the private sector’s rational effort to repair their overstretched balance sheets.’
Especially: ‘thwart the private sector’s rational effort to repair their overstretched balance sheets’. It’s not really an effort. It’s the natural way economies repair the damage from booms. We’ve had the biggest boom in history, and the Fed is trying to keep that from being worked out?
A long time ago, when I was just beginning this blog, people would ask me, ‘do you really think you know more than the Fed?’ But that was more of a way of restating Fed worship than a question. The truth simply was, these guys were clueless and wrong.
‘One would think that the central bank would know better in the post-Greenspan years’
“…Ben Bernanke, the chief architect of his predecessor’s policy…”
Is that an accurate statement? It is certainly news to me (whether or not true)…
EXCHANGE RATE
Why there’s gold fever
November 12, 2010|By Harold James, Special to CNN
There is at present a profound uncertainty about currencies. That is why the president of the World Bank, Robert Zoellick, created such a stir with a brief reference to an enhanced role for gold in the course of a plea for a more sustainable international exchange rate system.
The revival of interest in a golden measure of value derives from two fundamental sources. First, there is a question about our personal sense of worth. The aftermath of the economic crisis has destroyed our confidence in the reliability of conventional paper money.
…
The air seems to be going out of it right now. I sold some gold last week, and the dealer said he’s really looking for silver, because they’re in demand due to lower buy-in cost.
Interesting. I sold some Palladium last week; I missed the huge spike to $740 but got out at $681. I’m a long time bull, no doubt, but things recently just went up too much, too fast. I don’t purport to know what will happen next, only that I felt the risk-return profile had become too unfavorable for my liking at the current time.
There is at present a profound uncertainty about
currencies…what my stucco house is really worth.The Fed’s $600 Billion Statement, Translated Into Plain English
Categories: Jobs, Government, Finance
05:16 am
November 5, 2010
by Jacob Goldstein
Note: This post was originally published on Weds., Nov. 3.
The Federal Reserve is about to create $600 billion out of thin air. It’s a huge, experimental stimulus program that will affect stock markets and government policies around the world.
But the Fed announced its plan in a statement written largely in jargon and code. So here, from Planet Money and Slate, is today’s statement, translated into plain English.
You can click on each sentence below to see our translation line by line. Or click “convert all” to translate the entire statement.
…
Wall Street Thieves Unwilling to Share GM Windfall:
http://www.latimes.com/business/la-fi-gm-ipo-20101116,0,4755071.story
I’m not going to buy any GM vehicle, so they’ll have a tough time making money off of me.
And far be it from me to buy a car of any sort.
BTW, in Richard Florida’s latest book, The Great Reset, there’s quite the discussion about home and car ownership. Both appear to be not as fashionable as they used to be. Especially among young people.
Helicopter parents have done a number on that. I know several people whose children 16+ don’t even have a drivers license. The parents spend all weekend driving them around to soccer and softball games.
Of course the kids don’t work either. That may be out of fashion as well.
There’s a harebrained legislative scheme afoot here to deny drivers’ licenses to high school dropouts. So, you better stay in school or you won’t be cool! But you’re right, it’s not 1964 and kids today would probably just go all out slacker and say they don’t care anymore - hitch rides, take the bus to town and ride around on their skateboards.
And to think that I was such a klutz that no soccer or softball team would have me. So, no driving me hither and yon.
OTOH, my parents were quite thrilled with my interest in bicycling. Matter of fact, I was one of the first paper-girls in the neighborhood. Took two boys to replace me on the paper route because it was so hilly.
“…thrilled with my interest in bicycling.”
We had a heck of a wind storm last evening, but this morning ushered in clear blue skies, so it was a pleasure to ride my Co-Motion Americano to work. We’ll have ice and snow soon, so my cycling days this year are numbered.
http://www.spokesman.com/stories/2010/feb/01/racking-up-the-miles/
A story in the local paper about a guy that commutes 62 miles round trip, summer and (sometimes) winter.
The story implies that he does the commute on a pretty much daily basis, but if you do the math, its more like 85 days, but impressive none the less.
i don’t know, all of my kids’ teenage and young adult friends have cars, and my youngest is counting down the days until he can trade his learner’s permit for a license.
I realize that this may vary by region.
“That’s because most Americans won’t have access to the new shares of the Detroit automaker. And many of those who do are likely to be well-heeled customers at big Wall Street firms.
The situation is not much of a surprise on Wall Street, where little guys often are shut out of deals, especially coveted ones where demand far outstrips supply and where fast-rising prices usually provide quick profits to anyone getting IPO shares.”
All corporate IPOs should be done on the internet at Dutch Auctions. That is the only way to maximize the amount of working capital that the company gets out of the deal. The role of the investment banks in selling the deal and setting the share price and promising to buy up anything left over if they over price the deal (yeah, right, pull the other one) needs to end. They are stealing capital from the issuers.
Cefalu LLC files for bankruptcy
GLENS FALLS,NY — One of Sophie Cefalu’s many real estate investment groups filed for bankruptcy on Thursday.
SBC Properties LLC is seeking Chapter 11 protection, according to court documents.
Since early 2009, about a dozen Glens Falls properties owned by the group have fallen into foreclosure. And in recent months, the courts have ruled against SBC and started to schedule foreclosure auctions.
The group lost one property at 24 Broad St. in September; it was sold to recoup money for a Florida investor who held the mortgage.
The bankruptcy filing pauses any pending foreclosures as SBC tries to reorganize its finances in court.
In fact, a sale was stopped on Friday because of SBC’s bankruptcy petition the day before.
Court-appointed referee Lea Everhart said she held a foreclosure auction for 14 New Pruyn St. at City Hall in the morning. A bid was accepted but was nullified later that day when Everhart learned of SBC’s filing in U.S. Bankruptcy Court’s Albany office.
It’s not clear from the petition exactly how much SBC owes its creditors; the document only states the group has between $1 million and $10 million in liabilities.
Cefalu’s investor groups appeared on the Glens Falls scene about five years ago with the goal of revitalizing commercial and residential properties.
The efforts peaked with the conversion of the former St. Mary’s convent into the Crandall Square Condominiums.
Cefalu’s son, developer Charles Cefalu, handled real estate transactions and presented himself as the face of the groups to investors, public officials and media. He has blamed the economy for many of the foreclosures and denied any ongoing role with the groups.
The Surprise Witness:
Guess Where Obama, Boehner, Ryan, Palin et al Could Find Wisdom for the Current Crisis
Editorial of The New York Sun
One place President Obama, Speaker-To-Be John Boehner, Congressman Paul Ryan, or Sarah Palin could turn to for wisdom on the current dollar crisis is the editorials of the New York Times. Not the editorials of today, but those that were issued during the mid-1940s, when the nations about to become victorious in World War II were meeting at Bretton Woods, New Hampshire, to lay the groundwork for a post-war monetary system. The Times issued editorial after editorial critical of the Bretton Woods negotiations and their architect, John Maynard Keynes. It turns out that the editorials were the work of a single, prophetic editorial writer, Henry Hazlitt.
Hazlitt warned that what was being set up at Bretton Woods was an inflation trap. He turned out to be correct, and the system unraveled in 1971, when President Nixon closed the gold window. Bretton Woods unraveled over what, in retrospect, seems a modest drop in the value of a dollar — something like 10% — to a 38th of an ounce of gold from the 35th that obtained under Bretton Woods. This ushered monetary arrangements that, under the leadership of President Reagan and the Fed chairman at the time, Paul Volcker, proved serviceable for a while but is turning out to be inadequate in an era of lesser leaders.
No doubt Hazlitt, had he lived, would have said the failure was inevitable. His warnings in the New York Times stand as one of the great scoops in all of newspapering. The oeuvre is anthologized in a book that Hazlitt himself put together called “From Bretton Woods To World Inflation.” Issued in 1984, it contains more than 20 of his editorials from the Times, most of them from the 1940s, but starting with one from the 1934, called “The Return to Gold,” which contains a warning that could not be more relevant to today’s debate when the G20 is feuding over the prospect of competitive devaluations:
Had another “it can’t happen here” argument over the weekend. I made the mistake of mentioning to someone near retirement age who is still in their “big house” that I think we haven’t even corrected in this area yet.
Her intitial argument was that we never experienced a bubble here. When I mentioned that yes if you compare house prices to a decade ago we most certainly did experience a bubble, the answer was “well a decade was a very long time ago. I don’t think you can make comparisons to those years. You can’t possibly think prices are heading back there.”
“Well, yeah, of course I do”, I said. “We haven’t yet corrected because area banks are still giving out mortgages that are more than people can afford.” (Wish I could tell you the details of my own story on that one. It’d be funny if it wasn’t so flippin’ sad they’re still desperately throwing money at us) I said, “As soon as the easy credit disappears of course prices are going to deflate. And the ocurrence of that is inevitable. It’s only a matter of when.”
Silence!
There’s a weariness about still having these arguments 4-5 years after realizing the credit bubble was there. I think last week was a capitulation for me. I had wanted to be in our own place (that we could pay off if necessary) before any monetary collapse took place. Now I can see it’s not going to happen. I’ve given into it. The choices are potential for becoming an FB or the potential to be in a month to month rental when shelves start to go bare from distribution problems. Can’t say one is any better than the other. It’s just there’s more flexibility built into the 2nd scenario at this juncture. I have this sense of threading a needle. I really had pictured us being the safe place for the rest of the famiy that didn’t believe anything bad is coming and have made no arrangements. Ok, apparently it’s going to have to be plan B.
Good story Carrie.
I’m ready to reach out and choke someone every time I hear “we didn’t have a bubble here”.
It’s the lamest argument going but easy to demolish.
I ended up doing plan B. Moved out of Boston, disgusted, in 2006, to Western Mass in order to be ready when the correction happened. Four years later, prices are still way above safe levels. When a job opportunity came up that involved leaving the country, we jumped on it.
Western Mass is going to be where Upstate NY is now in a few years. If it had crashed good an hard, then sensible people would be rebuilding it now. Instead, the eternal soft landing means it is never a good time to invest and rebuild. Maybe my kids will want to help recolonize the states in another 20 years. After ten years of waiting for sanity to return, I am done.
That’s an excellent way to opt out Xenos.
De Nile is a river that runs deep and wide.
First chinese drywall and now you gotta work about old meth labs…
———————–
Dream home becomes couple’s nightmare
By: MATT COUGHLIN
Bucks County Courier Times 11/15/2010
The house was in a nice neighborhood. The walls were freshly painted, and there was room enough for a studio, craft room or even a nursery.
So Rob Quigley, 31, and Jenn Friberg, 30, purchased the house on Jefferson Avenue in Bristol for $190,000 and moved in two days later, on March 6.
They immediately began experiencing headaches, sore throats, coughing and restlessness.
Five days after moving in, they found out why. A neighbor told them the house had been used as a methamphetamine lab by one of the previous owners.
They then searched the Internet and confirmed it. The house, along with dozens of others in Pennsylvania, is listed as a “Clandestine Laboratory” site on a Department of Justice website, http://www.justice.gov.
“It was our biggest mistake, not googling the address (before purchasing it),” Quigley said.
They had the house inspected before finalizing the sale by both the municipality and a private inspector they hired. A certificate from borough building inspector John Miller noted that the house had no imminent hazards and was in compliance with borough codes.
The private inspector also didn’t note any signs of lingering meth - a central nervous system stimulant with a high potential for abuse and dependence.
…
And Realtors are not required by law to investigate a property’s history, Lerner said.
The newspaper was unsuccessful in reaching Frederick Allan, who was the selling agent for the Jefferson Avenue property. The real estate agency where he works, Anthony Messina Realty, is just a few blocks down the street from the house purchased by Quigley and Friberg. Someone who answered the phone there declined to comment, and no one returned a message that was left.
“They had the house inspected before finalizing the sale by both the municipality and a private inspector they hired.”
So what value do these “inspectors” bring to the client? And the realtard? Just what do they bring to the transaction besides added costs? Are these people responsible for anything?
That the granite countertops were in good condition…?
I did our home “inspection” myself. Not paying for something I am completely capable of.
~ We were required to get a termite letter, from the pest control company.
So what value do these “inspectors” bring to the client? And the realtard? Just what do they bring to the transaction besides added costs? Are these people responsible for anything?
The home inspector who was strongly recommended by my real estate agent did find a lot of things that were good to know. However, what he didn’t turn up has cost me around $3k to fix.
Memo to self: Next time, don’t be swayed by your real estate agent’s recommendation. Find your own home inspector.
“Next time, don’t be swayed by your real estate agent’s recommendation. Find your own home inspector.”
Less of a chance for agent kickbacks if you select your own inspector.
After I was ensconced in the Arizona Slim Ranch — and dealing with the repairs/replacements of things that Mr. Home Inspector missed — I concluded that the word “kickback” entered into my agent’s recommendation of this inspector.
My home inspector had me sign a waiver before he got started. Simply put, he was not responsible for his own errors and/or omissions; really chicken sh!t, IMHO. He had a thorough punch list though, and since I have a mechanical aptitude he wasn’t going to short me. It was $250 that I’d never spend again, so I learned something.
The inspector we hired found stuff, and lowballed the estimates to fix them by around 50%.
And yeah, our sweet older realtor lady found him for us.
Such was the joy of being naive first-time homebuyers.
So lets say I hire “inspector” Joe to do his thing on a shanty under my consideration. InspectorJoe has a typical punchlist of BS items like;
“Door out of plumb, repair”
“Shim deck supports”
“Remove grout and fill joint with pourable joint filler”
Whatever… you know what I mean.
So I strike and 6 months later I notice the floor sagging because the the carrier beam down the center is undersized(just an example). Better yet, the new grout rubbed finish on the basement walls hiding the structural crack just delaminated. Now I have an $20k estimate to repair the crack that the owner intentionally hid with a grout rubbed finish. And the inspector failed to note the obvious bump/hump on the ceiling at the wall which is a clear indication something that shouldn’t be moving in fact is moving.
The new owner has no recourse. His “inspector” has no obligation to the owner 6 months later. So just what do these guys provide? What expertise do they bring to the table? I honestly cannot think of a single reason to hire one of these guys.
They have disclaimers that they are not responsible . Another disclaimer that got my goat that a neighbor showed me was
a disclaimer from a Escrow Company that they were to be held harmless for anything that they do . No doubt this is in response to the foreclosuregate .
In fact I think this business model of nobody is responsible has taken hold in general ,a model that Corporation America has played so well.
Another ouch that is emerging is the re-stock fee . So, you buy a
defective product and you take it back within a week and you get charged a re-stock fee . A neighbor of mine got nailed for a return fee on a item she returned for $350 dollars ,pretty big clip ,but it
was in really small print on the other side of the contract .
In my view its just bad faith in business and how to sucker the customer . These older people are so trusting because they operate from a memory of when business was more on the up and up .
i do not know of any retailer who will charge a restocking fee for returning a *really defective* product. be wary however, definition of defective is sometimes subjective.
In California, owners selling REOs are subject to mandatory disclosure laws, including their use as methamphetamine labs. I believe that law enforcement is supposed to report meth lab activity to a local health officers, who determine if the property is contaminated.
One in 7 US households hit by hunger issues in 2009
WASHINGTON (Reuters) - The number of U.S. households that reported getting emergency food from a food pantry almost doubled between 2007 and 2009, at the height of the recession, a government report said on Monday.
The U.S. Department of Agriculture said the number of households jumped to 5.6 from 3.9 million.
“Households also accessed additional assistance through USDA’s 15 food and nutrition assistance programs,” the article in the USDA Economic Research Service (ERS) “Amber Waves” said.
The USDA oversees the government’s food stamp program, also known as SNAP or the Supplemental Nutrition Assistance Program, for low-income families and other domestic feeding programs like school lunches.
In the 2009 fiscal year, “15.2 million households participated in SNAP in an average month, up from 12.7 million in FY 2008,” the article said.
My mother reported that her (very small) church parish had many requests and will be giving out 100 turkeys this Thanksgiving to families in need. This number is well over that of last year, and they have a waiting list.
What I think is neato, is The Rotary Club is hosting a FREE Thanksgiving Dinner for Seniors again this year at a donated for the day Restaurant location. They expect minimum of 600 throughout the day. It’s not just a meal, it’s a sense of community and a day off of loneliness. Kudos to The Rotary Club!
It’s not just a meal, it’s a sense of community and a day off of loneliness. Kudos to The Rotary Club!
Agreed.
While I’ve often found myself in the “alone at Thanksgiving” boat, I haven’t been so at a loss for companionship that I’d be eating at a dinner like this.
OTOH, I’d be more than happy to help the Rotarians serve and cleanup. I’m really good at cleanup, so if anyone ever needs help after a big event…
Same in our area and “it’s different here”.
One food bank had over 2000 requests for 1000 dinners.
40M on food stamps out of 300M people.
Hope and change baby!
Seriously you’re going to blame the fact that 40 m are on food stamps on Obama?? Tell us exactly what you would have done different that would have kept fewer people fully employed and able to feed their family??
Plenty of stuff to blame Obama for but you guys tag that line to everything.
I don’t think it’s as much blaming him as noting that he failed to change the situation like he said he would. I think the whole “hope and change” kind of implied that we were going to be taking care of the people more, and the fat cats less. Guess that’s not really happening now, is it?
“40M on food stamps out of 300M people.
Hope and change baby!”
Maybe if the REPUBS hadn’t VOTED TO CONTINUE TAX BREAKS FOR OFFSHORING JOBS, they wouldn’t need food stamps?
Why yes, you CAN find that on Google!
You can’t “change” stupid.
If this is true, then where are the skinny hungry people? I seldom see any.
Two words: refined carbohydrates.
Diabetes is up with a bullet and shows no signs of slowing.
Yeah. Through subsidies to certain commodity crops, especially corn, we make a lot of very unhealthy foods cheaper than healthier alternatives.
The movie “Food Inc.” is rather eye opening in that regard.
Today’s starving peeps are morbidly obese perched on mobility scooters.
Obesity/diabetes ravages the legs - something I’ve seen up close and personal. The contemporary lifestyle lived by many is just plain toxic.
Yeah so much for the Fat Acceptance movement. They all hit 50 and the ramifications kicked in…
And the scooters have been paid in full!
Yes, but as the man on the commercial says, it didn’t cost “me” a penny out of my pocket!
Which is strange with all the cigarettes they smoke as well.
Tell me about it!
Last week, I ranted about the new neighbor with the vicious smoker’s cough. He’s living in a house with a bunch of other guys who can only be described as down-and-outers.
Any-hoo, Smoker Guy has been outside puffing away in the wee hours of the morn. His hacking and coughing is so loud that it wakes me out of a dead sleep.
Seems as though someone has spoken to him, as he’s postponing his nic-fits until around 5:30 a.m. (I did send an e-mail to the neighborhood association.)
During one recent fit, I think it was this past Saturday, I peeked out of my window and saw him doubled over and gagging.
On Sunday, I was hanging out with an old friend who used to work at the Arizona Cancer Center. She said that nasty coughing fits — combined with gagging — are symptoms of chronic bronchitis and/or lung cancer.
I can’t help thinking that my neighbor, who doesn’t appear to healthy enough to have a job, isn’t long for this world.
So….the solution is to give them free unlimited health care. Problem solved.
So….the solution is to give them free unlimited health care. Problem solved.
I think that, in the case of my neighbor, it’s gotten beyond *health* care. He’s obviously unwell. Palliative care would be more appropriate.
Maybe you’ll start getting better sleep!
“So….the solution is to give them free unlimited health care.”
Better yet, let’s give them free cigarettes.
Slim,
At one point years ago, I rented a tract home in a dilapidated part of town where cigarettes were considered a food group.
Every (single,) (@$*&$%#@#*%#!) morning around 6 AM I was awakened by my next door neighbor hacking up his lungs five feet from my bedroom window. I absolutely know the gross ambivalence you’re experiencing just now. I also know you’ll not be bothered by it much longer.
General Motors Said to Boost IPO Price By 14% as Demand Grows
Bloomberg) — Gerald Meyers, a professor at the University of Michigan Business School and former chief executive officer of American Motors Corp., discusses the outlook for General Motors Co.’s initial public offering and the possibility of China’s SAIC Motor Corp. buying up to a 1 percent stake in the company. Meyers speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)
General Motors Co. may sell shares in its initial public offering for as much as 14 percent more than originally planned, making it the second-largest U.S. IPO on record, according to four people familiar with the deal.
GM, 61 percent owned by the U.S. Treasury, will probably set a price of $32 to $33, said one of the people, who declined to be identified because the discussions are private. The automaker, which had filed with the Securities and Exchange Commission on Nov. 3 to offer 365 million shares for $26 to $29 each, would raise $12 billion selling shares at the new high end of the price range on Nov. 17.
Inflationary. Plain and simple.
That’s a ridiculous price. Whoever buys it is a sucker.
Just give them all A’s&B’s the real world will smack them in the head when they get out into it.
Failure is impossible for high school students! (No, really)
What would school have been like if you never had to worry about getting an F? Students at West Potomac High School in Alexandria, Va., are about to find out, the Washington Post reports.
Earlier this year, the school all but eradicated the standard mark for “failure”, instead supplying wayward students with the letter “I” for incomplete. So what does an “I” give you that an “F” doesn’t? Time to redeem yourself, for starters. Students with an “I” on their report card can (literally) learn their lesson and catch up over the year, at which point they will be given a grade for their mastery of the material, just like any other student.
So is this an inspired move to get those marginal students on track and learning, or just another way in which we’re coddling underachieving kids and hobbling the rest? Parents, educators and students are divided.
Mary Mathewson, an English teacher at Potomac High tells the Post that the new standard not only cripples teachers in that it “takes away one of the very few tools [they] have to get kids to learn,” but it gives them “an out,” resulting in a system in which “kids are under the impression they can do it whenever they want to, and it’s not that big of a deal.”
Absolutely that would be problematic for the lazy students or those working below their potential. But for students who work hard but still struggle, or students working in advance placement or ahead of their grade level, it could be worth experimenting with the “I”. In fact, more kids might give advance placement classes a try if the fear of failure was mitigated. That, of course, involves having “double standards” and we can’t have that now, can we?
Great! More losers getting HS degrees…
Small wonder even trivial and semi-menial jobs these days require a college diploma.
i do not understand how an incomplete can get you a high school degree.
Mary Mathewson, an English teacher at Potomac High tells the Post that the new standard not only cripples teachers in that it “takes away one of the very few tools [they] have to get kids to learn,” but it gives them “an out,” resulting in a system in which “kids are under the impression they can do it whenever they want to, and it’s not that big of a deal.”
Mary Mathewson for President!
She is correct! All the rest is hogwash.
“kids are under the impression they can do it whenever they want to, and it’s not that big of a deal.””
I have clients that pay like that.
Sounds like my utility companies and some banks I’ve known as well.
Same as HAMP, only that was an “I” on the mortgage payment. How is that working out?
Home Affordable Modification Program
On March 4, 2009, the U.S. Department of the Treasury (Treasury) announced details of the Home Affordable Modification program (HAMP) as part of the Making Home Affordable Program. HAMP is a loan modification program designed to reduce delinquent and at-risk borrowers’ monthly mortgage payments. Freddie Mac is pleased to play a leadership role by implementing this program.
HAMP is effective immediately for mortgages originated on or prior to January 1, 2009, and will expire on December 31, 2012. Servicers must solicit eligible borrowers who are 31 or more days delinquent for a modification under HAMP, but cannot solicit borrowers for this program who are current or less than 31 days delinquent.
HAMP shortfall: 48% homeowners drop out of program in July
by Jaspreet Virk - August 22, 2010
As per the latest report released by the U.S. Department of the Treasury, nearly 96,025 of the 1.3 million homeowners, who had applied for mortgage modification, have been dropped out of the program till July.
“The number of new cancellations is expected to exceed the number of permanent modifications for the next few months as servicers clear their backlog of aged trials,” stated the Treasury statement.
It now seems that HAMP, originally started with the aim to bail out nearly 3 to 4 million financially-struggling homeowners, will only end up modifying loans of few selected households.
Let me get this straight. If I move from Texas to California for school, I will have to pay out of state tuition, but illegal aliens qualify for in state tuition. It makes total sense, right?
—-
Illegal immigrants can qualify for in-state college tuition, court rules
Illegal immigrants who graduated from state high schools can continue to receive lower, in-state tuition at California’s public universities and colleges, the California Supreme Court decided unanimously Monday.
The ruling is the first of its kind in the nation. California is one of 10 states that permit undocumented immigrants to receive in-state tuition, which can save them $23,000 a year at the University of California.
The Immigration Reform Law Institute, the Washington, D.C.-based group that challenged California’s law, contends that more than 25,000 undocumented students attend the state’s public colleges and that lower tuition for illegal immigrants costs the state more than $200 million annually.
Maybe the border fence should be built on the border of California between it and the rest of the USA.
I would estimate most (not all anchors or illegals, mind you) take low demand majors. Our neighbor’s illegal offspring has a Degree in Chicano Studies.
I don’t like “ME” Degrees. What do they teach you? Certainly not critical thinking skills.
That because your are an evil, rich, white, American who has had it too good and for too long…
The case will be taken to the US Supreme Court…. I wonder if this decision will be upheld; the California Supreme Court voted unanimously supporting this law.
The “rule of law” in the US is totally trashed, a complete joke. And people wonder why. These justices were snorting their panties.
Badges! I’d don’t got to show you no dam stinking badges
The actual argument was about whether state law trumped federal law in this case. It was the nutbag politicians that did this, not the nutbag justices. The justices just said “Hey, if our state’s nutbag politicians want to do this, we as a state should be able to do it.” They were the definition of NON-ACTIVIST judges in this case. They didn’t weigh the merits of the law, just the merits of the argument that California law should or shouldn’t trump federal law when it comes to californian schools.
Thank you, sf, for that dose of rationality.
Tea partiers and conservatives should want the Supreme Court to uphold it. Why? Because it was a ruling on State’s Rights over Federal Rights. The Cal SC said california’s law was fine and dandy.
Personally, I don’t like the law all that much, but at least it only applies to illegals who are at least pretending to try and gain legal status.
Personally, I don’t like the law all that much, but at least it only applies to illegals who are at least pretending to try and gain legal status.
I don’t know how to put this politely, but a lot of the illegal immigrant population coming in from Mexico isn’t what we would consider college material.
Translation: They’re not the brightest bulbs on the Christmas tree. Living in poverty for generations tends to do that to people. Something about malnutrition, especially when one is in utero and in childhood.
However, we saw something happen in U.S. history, and I’ll wager that it will happen again.
Remember the starving hordes that left continental Europe and Russia during the late 19th and earliest 20th centuries? Well, they came here and took no-brainer jobs. Factory work, farm work, domestic work, that sort of thing.
As they and their children became exposed to better nutrition and higher public health standards in the U.S. than the Old Country, well look at what happened. The kids and grandkids went on to college, and they were able to handle it just fine.
The law was aimed at minors brought across the border (not anchor babies) by their parents who mostly grew up in the states and are trying to become legal and get some higher education.
I’m not a HUGE fan of it, but it’s a far cry from a complete freebie to all illegals.
“It makes total sense, right?”
Apparently our whacked out state government prefers illegal aliens to U.S. citizens from other states. Could this help explain why the bozos are desperately seeking a $14 bn loan? It has to be quite expensive to provide social services (like college education opportunities) to hordes of illegals!
College rebates for illegal aliens “costs the state more than $200 million annually.”
OTOH, I’m going to be handing out flyers in Spanish to the illegals here, urging them to go to CA for all the goodies. Boo-YAH, thank you, Cali!
“Let me get this straight. If I move from Texas to California for school, I will have to pay out of state tuition, but illegal aliens qualify for in state tuition. It makes total sense, right?”
I don’t know if it’s changed, but it used to take 3 long years to reclassify as a resident at the University of California.
Back in the 70’s and 80’s it was political refugees from SE Asia that were being given automatic residency at UC.
“…it used to take 3 long years to reclassify as a resident at the University of California.”
Still does. Residency requirements haven’t changed for anyone, nor have academic standards for UC admission.
Take a deep breath; these are the kids we WANT in the US–the ones who are going to be paying your SSI benefits. (And in-state board and tuition still approaches 20K/year for residents–so it’s not all that much of a bargain anyway.)
Illegal aliens get in state tuition in Texas as well.
Yup. And my taxes are funding that
We have a few pandering politicos here in the Centennial state who want to do the same (in state tuition for illegals), but who get shot down every time.
Of course, with state college funding collapsing soon everyone in Colorado will be paying out of state tuition rates.
The “in-state tuition for the illegals” idea will go nowhere in AZ, I can assure you that.
A small state college in Nebraska gives in state rates to Coloradoans who have decent grades, and is tuition free if you have good grades and ACT/SAT scores.
Out daughter almost went there, but it was out in the boondocks, so she’s communiting from home to a local state U.
Here’s an immigrant who’s doing it the right way. News from the University of Arizona:
GiveBack KickBack Caps International Education Week
There is a law in California that kids who attend the last three years of high school in a California high school are eligible for in-state tuition. By the way, 0.4% of UC students are children of illegals, 0.8% of students at Cal State schools. This is a minor issue, I’m sorry.
I’m more bothered by wealthy Koreans and Taiwanese who buy houses in the US and ship their kids here to live in them and attend American high schools so they can more easily get accepted to US universities.
well, guess what. they probably will want to stay here after getting their college degrees.
Stocks retreat on Asian inflation, Euro debt fears- AP
Stocks are sliding following new worries about rising inflation in Asia and the possibility Ireland might need a bailout.
“It’s not a “bull market.” The whole idiotic idea of bull and bear markets is a Wall Street product sales concept. Forget it. Markets are a battleground. The fight is over money. The weapons are information and control of information. The determinant of the winner is purchasing power, who is gaining it and who is losing it, via taxation, deregulation, subsidies, inflation, or leverage. The rest is BS.”
eric janszen - itulip.com
“The weapons are information and control of information.”
Blogs = information IEDs
he actually predicted a 7 or 8k DOW by the end of 2010. he admits his timing was off by a few months.
his timing may be off a bit…but he has been seldom wrong.
like the 5000 per oz gold? just kidding.
I like it! What a good idea.
———————————————
Pink slips for Wall St. and the Fed
By: MIKE KRAUSS
BucksCountyCourier Times
…
The Bank of North Dakota (BND) was established by act of the state’s legislature just four years after the Federal Reserve, specifically to avoid domination by Wall Street. It is essentially a DBA, the people of the state “Doing Business As” a bank.
The BND operates as any bank. It has as capital all the assets of the state - land, buildings and all state tax and other revenues, which must by law be deposited with it.
The bank makes loans based on this capital, holding in reserve only a fraction of what is loaned, receiving much of the loaned amounts back as deposits to repeat the process. This is called fractional reserve lending, for centuries the heart of the credit creation process.
The BND makes low interest loans to existing businesses and farmers, start-ups, college students and others. It is a buyer of municipal bonds and partners with the private banks, offering a secondary market for mortgages, providing liquidity and clearing checks for more than 100 private banks around the state.
In other words, North Dakota cured the flaws in the Fed.
This public bank has no incentive to cook the books or venture into risky deals that threaten to overwhelm the reserves if loans fail - the heart of the present ruin of American private banking.
The officers of the BND are the three highest elected state officials.
They draw no salary other than that of their offices. The bank pays no bonuses, but pays a dividend to its only shareholder, the people. All its profits go into the state’s general fund.
Thus, while almost every state in the nation is in dire financial straits, credit is flowing in North Dakota and the state is posting billion dollar surpluses, able to maintain infrastructure and vital public services.
Since 2000, North Dakota’s GNP has grown 56 percent, personal income is up 43 percent, and wages are up 34 percent.
That is what has been accomplished with that state’s relatively small population, asset and revenue base. Larger states can expect exponentially larger returns from their public banks.
Fifty public state banks could send hundreds of billions in new credit into the real economy every year, provide large revenues to state budgets, put money in the pockets of the American people and end the ruinous economic tyranny of Wall Street and the Fed.
So they will fight it tooth and nail. But the battle has been joined in more than a half dozen states which have started down the road to public banks.
Funny how this doesn’t mention the boatloads of federal money and farm prices.
ITEM: In the 12 months to October, core producer prices rose 1.5 percent after increasing 1.6 percent the prior month.
< Price inflation at the wholesale level, but considered mild. The big number comes out tomorrow….the Consumer Price Index.
Best predictor of Eddie’s failure to post:
A crashing stock market!
Dow Jones Industrial Average
Market open DJIA 11,066
Change -135.59 -1.21%
Volume 51.61m
Nov 16, 2010, 10:38 a.m.
Previous close 11,202
run for the exits!!!!!!!
Stout Fed doormen are blocking the exits. More bodies piling up than at a Great White concert.
too soon?
Run for the gold!
I really hope Ben didn’t ban Eddie. It would be soooo delightful to rub TWO failed Dow 12K predictions in his face.
We don’t need him actually posting here to keep the mockery alive!
Eddie lives! He’s just changed his moniker/ISP address. And as a special added bonus, Mrs. Eddie’s right there with him.
Wish I could say the same for lad.
Thought that American society was already too litigious?
“…’lawsuit lending is a child of the subprime revolution,’ and often the lenders charge ridiculous interest rates, rather than being willing to just take a direct cut of any winnings. And, of course, these days, with the mortgage space being a weak investment, banks have to find somewhere new to put their money, and apparently lawsuits are attractive to some. The whole thing seems so open to abuse and excess that it seems likely that we’re going to be hearing a lot more stories of lawsuit lending… and the resulting problems it causes.”
Yeah, there’s that comical Wentworth commercial airing with people yelling out their windows: “I want my money NOW!”
One can only imagine the impression this makes on a kid.
Yeah, there’s that comical Wentworth commercial airing with people yelling out their windows: “I want my money NOW!”
Who would have thought that so many people had annuities?
It’s mostly pending payouts of… lawsuits.
When you win a lawsuit, they don’t cut you a check right then and there. You may not see any money for 10 years.
It peeves me to no end when people complain about how litigious we are. It’s very expensive and risky to bring a lawsuit. And most lawsuits wouldn’t even be necessary if there were ANY other way to resolve the “injury.”
I’m especially angry about malpractice lawsuit caps. A couple of million doesn’t go very far when you’re crippled for life.
Brett Arends’ ROI
Nov. 16, 2010, 12:01 a.m. EST
Is the gold bubble about to go manic?
Commentary: More signs are showing gold gaining momentum
…
Is this another sign that the gold boom — or bubble — is about to go manic?
Maybe.
Bubbles go through several phases on their way up. A bull market can quietly build for years. As it turns into a boom, the mainstream culture starts to pay attention. But it’s not until the final blowup phase that apparently everyone jumps in, animal spirits roar, greed turns heads and prices go stratospheric.
The Nasdaq Composite Index took 10 years to pass through these phases in the 1990s, and the biggest gains came right at the end. In fact, the index grew more in the last year of the dot-com boom than it had in the previous 10.
So where is gold right now? If we’re heading into phase three, it’s a recent development.
For the past couple of years, gold has been like sex in junior high: Everyone has been talking about it, but almost nobody has actually had any. (I am probably showing my age here. A few decades ago, most people in junior high really didn’t have sex.)
…
Nooze from Tucson’s biggest fishwrap: As many houses stand vacant, water thieves tapping in.
“The real estate community is really part of the solution in stabilizing our neighborhoods,” Taylor said. “Not part of the problem.”
Ah, her stand up routine must be a riot if this is a representative sample.
What is to stop two neighbors from sharing a water line and spliting the bill?
I sort of agree that the listing agent should bear no culpability here.
However, the owner (bank) of the foreclosed house should be responsible for the fines and associated fees, just like any other owner would be. Ditto for property taxes, HOA dues, yard maintenance, etc.
I don’t understand why “being a bank” exempts the owners from regular responsibilities associated with owning the property. If I sell a house and personally give the buyer a loan; and end up taking the property back for non-payment (foreclose)… I’m guessing I then have to maintain it, pay taxes, etc.
Even more importantly, Tucson Water changed its water locks from steel to plastic in a bid to save money.
“One reason that there may be an increase in the actual (number) of investigations and citations issued is the changeover from using steel padlocks to plastic locking devices,” Molina wrote in an e-mail. “The plastic locking devices are simply much easier to break.”
How is that working out?
Good point. I’ve been amazed at how lax Tucson Water is at protecting its hookups as opposed to, say, Southwest Gas or Tucson Electric Power.
ISTR that if TEP shuts you down, they take the meter away. You can’t safely tap in without the meter. And even with the meter, you’d better know what you’re doing, or ZZzzzzzt!
As for Southwest Gas, boy, those guys really know how to lock down a meter. You don’t want to mess with those locks, believe you me!
I used to own some 4-plex’s. The electric meters were in the basement, which was shared. I had a tenant break into the basement, open up the breaker panels, and use automotive jumper cables to energize his breaker box using the power feed from the adjacent (his neighbors) panel.
pretty creative renter.
Best get one while you can, before the next wave of buyers rolls in and snaps them all up…
Homebuilder sentiment index rises 1 point in November to highest reading since June
LOS ANGELES (AP) — The National Association of Home Builders says its housing market index edged up in November, with many respondents feeling somewhat more optimistic about the prospect for home sales in the near future.
The Washington-based trade association said Tuesday its index rose one point to 16, the highest reading since June.
Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006. The report reflects a survey of 420 residential developers nationwide.
The reading for current sales conditions was unchanged at 16. The index measuring foot traffic from prospective buyers rose one point to 12, while the index for sales expectations over the next six months inched up two points to 25.
market pulse
Nov. 16, 2010, 9:31 a.m. EST
Investor group seek big bank mortgage audits
By Ronald D. Orol
WASHINGTON (MarketWatch) - Responding to reports of widespread mortgage paperwork irregularities, New York City Pension Funds on Tuesday launched an effort to have directors at four big banks conduct independent audits of their banks’ mortgage and foreclosure practices. The investors introduced shareholder proposals to have Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co. and Citigroup Inc. conduct independent reviews of their bank’s internal controls with a focus on modifications, foreclosures and mortgage securitizations and report to shareholders by Sept. 30, 2011.
…
MarketWatch First Take
Nov. 16, 2010, 8:48 a.m. EST
Assigning responsibility in mortgage finance
Commentary: Will anyone pay attention to a lame-duck Congress?
NEW YORK (MarketWatch) — Banking forces are gathering for one of the first battles over implementation of the Dodd-Frank Act today: a Senate Banking Committee hearing over the use of securitizations.
The hearing is the first flash point for the changing dynamics across Washington and its efforts to contain Wall Street. To say things have changed since the Dodd-Frank Act was passed this summer is an is like saying transportation has changed since the invention of the wheel.
…
Lots of red in the market place today! Probably just savvy investors taking some profits!
That’s with Bernanke’s all ten fingers plugging most of the holes in the dam. Will he put his toes in play?
He should be able to plug at least twenty one holes, twenty two if he uses his nose.
OK, stop. I can’t get that picture out of my head.
Yep then after his toes? He could just stuff TTT in the dyke.
The sh!t just keeps hitting the fan, things are not going according to their print, baby, print plan.
Gotta pay for that turkey some how!
Check out this horse riding in the back seat of a car. I think he`s going to a NACA event.
http://www.youtube.com/watch?v=KKeHIVMdCvs - 112k -
Government Employees Owe Billions in Delinquent Taxes
CNBC Washington, DC
Need a quick three billion dollars, Uncle Sam? How about looking in your own pockets?
Deficit cutters struggling to make ends meet in Washington are eyeballing an unusual pot of potential revenue: back taxes owed to the government by federal employees themselves.
According to an IRS study last year, those employees and federal retirees owed a staggering $3.3 billion dollars in delinquent tax payments to the government.
The federal agency with the largest back-tax bill? The US Postal Service, where hundreds of thousands of employees owed a total of more than $283 million, said the report.
Also high on the list is the Department of Veterans Affairs, where employees had more than $156 million in back taxes.
The biggest group, though, is retired military personnel. That group owed more than $1.5 billion dollars.
And even the White House folks are behind in their taxes. Employees in the executive office of the president, which includes nearly 2,000 employees, owed more than $831,000 to Uncle Sam, the IRS found.
It was Turbo Tax’s fault! no problem.
Prices up but sales down 25% from 2009 levels
October median up 1.2% from September, 2.9 percent from 2009
By Roger Showley
Monday, November 15, 2010 at 10:50 a.m.
Download: Home prices and sales
Do you think sales will continue falling over the next few months?
Yes
No
Don’t know
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San Diego County home prices rose slightly in October after a two-month decline, but sales were off substantially, MDA DataQuick reported Monday.
The overall median was $334,500, up $4,000 or 1.2 percent from September and up $9,500 or 2.9 percent from October 2009 levels. The figure was still below the $340,000 most recent peak reached in May and the record high of $517,500 set in November 2005.
The sales count probably was the most dramatic statistic to come out of the DataQuick report.
The total for October was 2,750 transactions, down 10.4 percent from September, mirroring a typical seasonal downturn as buyers slacken off of their purchases once their children return to school.
But on a year-over-year basis, the total was off 25.1 percent from 3,671 logged in October last year — the third biggest such drop, after 1990’s 35.7 percent decline in the last big recession, and 2007’s 32.5 percent fall in the aftermath of the subprime mortgage meltdown.
“It’s a combination of a lousy economy and low consumer confidence, and we’re still paying the price for the tax credits,” said DataQuick analyst Andrew LePage.
…
11,000 falls.
So who’s in the bullpen? Bennie’s arm is tired from tossing out QE2, and TTT walked the bases full. Maybe they can squeeze another out out of Buffett?
Dumb prediction:
The DJIA will clear 11K by day’s end.
DJIA = 11K or bust!
“SERIOUS MONEY: WILLIAM McCHESNEY Martin, the longest-serving head of the Federal Reserve before Alan Greenspan, declared that a central bank was in ‘the position of the chaperone that has the punch bowl removed just when the party was warming up’”.
BENANKE: “What the critics don’t understand is that it isn’t a party, it’s a funeral, and without more punch the mood is going to turn ugly.”
We can only hope there will be some casket climbers on wallstreet.
Buy Silver - Crash JP Morgan Chase Tired of the too-big-to-fail banks manipulating the global economy for their own gain? JP Morgan Chase and HSBC bank are both under investigation for illegally manipulating the silver market. These banks have created a short position for themselves, and stand to make billions by controlling the silver market. They will likely face a slap on the wrist from the SEC for this fraud. However, if Silver demand surges, and people remove silver from the market place, then the price will rise and the short position will back-fire. If 100,000 oz. of silver are removed from the market, JP Morgan Chase will collapse. There is a growing grass-roots movement to buy up silver, and really punish a too-big-to-fail bank for playing God with the markets. You can buy an ounce of silver for about $30, from many different sources.
Metafilter
“If 100,000 oz. of silver are removed from the market, JP Morgan Chase will collapse.”
Dear Gawd,
Please remove 100,000 oz. of silver from the market, post haste, in order to put this illegal monopoly bank out of business.
Sincerely,
Professor Get Stucco Bear
No $h!t!
I would love to see a silver bullet shot clean through the heart of the beast.
So, if 100,000 people each bought a fork at an antique shop JPM would fail? Put a fork in it, everyone.
I’m sure it would take more than that LOL!, but JPM is waaaaay short silver and it is possible for them to burn. I sincerely hope so, that’s some ‘change’ I could get behind!
I did my part on the silver buying but that was way back in the $5’s &6’s.
“Paging Nelson Bunker Hunt, please meet your party at the stucco bear statue.”
Charming notion (not being snarky for once), but… evidence?
Sounds like a chain letter promo.
I get that shorts can magnify losses, but 100k ounces at 25/oz tracking up a bit is like 2.5million bucks. Sneeze tissue money.
regards
-evildoc
How do we know JPM is short?
If we know I suspect they want you to know.
Who wrote the article ?
That’s my opinion too. I bet somebody’s long and wants to get out.
“As the economy improves, researchers said, fatalities are likely to rebound.”
Report: US lagging in reducing auto fatalities
November 16, 2010 11:30 AM ET
By JOAN LOWY
WASHINGTON (AP) - The United States is lagging behind nearly every other high-income country in reducing annual traffic fatalities, said a report released Tuesday by a federal research panel.
There’s some good news: U.S. traffic fatalities fell 9.7 percent in 2009 to 33,808, the lowest number since 1950. In 2008, an estimated 37,423 people died on the highways, a decline of 9.3 percent from the previous year.
But dramatic declines in traffic fatalities in the U.S. over the last several years are likely due to a sour economy in which people drive less, rather than lasting changes in behavior, the report suggests. As the economy improves, researchers said, fatalities are likely to rebound.
“The United States is lagging behind nearly every other high-income country in reducing annual traffic fatalities”
Could it be because we have millions of drunken, unlicensed illegals behind the wheel?
if you have more cars on the road…you will have more fatalities.
But other countries are growing, why aren’t there road fatalies rising?
And FWIW, I don’t think its just because of illegals.
growing equals more cars…it also could equal safer roads?
One thing is for certain, in most other industrialized countries driver education is much more rigorous than in the USA. In the US driver’s ed pretty much consists of telling people to drive slow and cautiously. I doubt most US drivers can pull out of a skid.
In China, it costs about 4000Y ($600USD) to get a drivers license.
It’s NOT just behavior, but also extremely poor road maintenance and engineering.
I think I am going to hold off on buying a house until foreclosures slow to 7 homes every 2 minutes.
Paying The Mortgage On Time? Your Home Is Still At Risk
Oct. 15 2010 - 11:30 am
In the past 12 months a foreclosure was sought on average for 7.6 homes every minute of every day, according to bank analyst Dick Bove. At the end of the housing boom in 2005, they were in a range of 70,000 to 80,000 per month. They are now averaging 325,000 to 350,000 per month. On an average business day, the U.S. court system receives 10,000 to 12,000 foreclosure filings.
http://blogs.forbes.com/halahtouryalai/2010/10/15/paying-the-mortgage-on-time-your-home-is-still-at-risk/ - 121k
“On an average business day, the U.S. court system receives 10,000 to 12,000 foreclosure filings.”
Free houses for everyone!!!
My buddy in St Pete (who hasn’t made a mortgage payment in two years) was telling me yesterday that he is now being pressured by the lender to settle a “new deal” with the bank at a lower principal amount. He says he has no interest in that and is not looking forward to having to move and pay rent either. He has gotten used to living for free and “likes” it that way.
So is the “free homes” deal only available to current owners, or is there a way for prospective home owners to get in on the deal?
I don’t know. The number of empty houses with unkept yards in my hood is growing. Some banks are foreclosing and evicting.
Weaker Dollar Seen as Unlikely to Cure Joblessness
NYT
A weakening currency traditionally helps a country raise its exports and create more jobs for its workers. But the declining value of the dollar may not help the United States increase economic growth as much as it might have in the past.
Though a weakened dollar would help exports to some degree, business executives and economists said that because of the ways American multinational companies operated, it was uncertain whether it would cause much of an increase in hiring.
The issue is crucial for President Obama, who made economic growth and job creation the main themes of his recent 10-day trip to Asia. He has also held out the prospect that a surge in exports would reduce the nation’s stubborn unemployment rate, currently 9.6 percent.
BofA in `Hand-to-Hand Combat’ Over Mortgages, CEO Says
By Hugh Son and David Mildenberg - Nov 16, 2010 7:42 AM PT
Bank of America Corp. Chief Executive Officer Brian T. Moynihan said resolving investor demands for refunds over faulty mortgages is a battle that will last at least several more quarters.
“It’s a day-to-day, hand-to-hand combat,” Moynihan said today during an investor conference held by the lender in New York. “It’s manageable in the context of who we are, but we’re not going to spend your money unwisely.”
Moynihan’s comments highlight the tensions between Bank of America, the biggest U.S. lender, and clients who bought its mortgages or bet on securities backed by home loans. The Charlotte, North Carolina-based company faces demands to repurchase almost $13 billion of loans that may have failed to document required data such as income and home values.
Bank of America has said it would review claims “loan-by- loan” to protect shareholders as Fannie Mae, bond insurers and private investors press for so-called putbacks. Some of the claims stem from loans made by Countrywide Financial Corp., the mortgage lender Bank of America acquired in 2008.
“There’s a lot of people out there with a lot of thoughts about how we should solve this, but at the end of the day, we’ll pay for the things that Countrywide did,” said Moynihan, 51.
…
It was a hydrogen bomb when the loans were written all at the same time. Now its hand-to-hand combat to force them back?
“It’s a day-to-day, hand-to-hand combat,” Moynihan said today during an investor conference held by the lender in New York. “It’s manageable in the context of who we are, but we’re not going to spend your money unwisely.”
You’re not going to spend money unwisely? Really? When did that start happening?
“You’re not going to spend money unwisely?”
WTF did Megabank of America buy Countrywide, then?
“WTF did Megabank of America buy Countrywide ,then?”
Hank Paulson was carrying a big gun at the time . No doubt BOA got
some concessions in the deal that their losses would be covered
by some bail-outs like being able to dump toxic stuff to the taxpayers via F&F ,or outright purchases from F&F . I have been getting a lot of evidence of the deal making that appears to of been taking place
in that F&F is ending up holding a bunch of CountyWides defaulting
paper .
I’ve certainly wondered about that possibility. It would be an interesting correlation if F&F ended up a disproportionate share of the cr*p loans from BoA. I suspect it would be impossible to gather that data, though—unfortunately, I doubt that F&F subject to FOI requests now that they are largely government-owned. Maybe that’s why the Feds did not fully take them over yet.
No need for Hand-to-nad combat.
Just produce the mortgage note and the home-buyer documentation as required by law and by Fannie Mae regulations…
I think I read that toward the end of the lending crime spree some of
Countrywides loan bundles had a 85% default rate . I got to tell you that
this is unheard of in lending . I remember when loan bundles has default rates below 1% .
For a mortgage lender, a 5% default rate is considered to be fatal.
Homebuilder confidence “worse than expected” — AGAIN!
To put a reading of 16 in proper perspective (which the MSM perpetually fails to do, thanks to their fixation on meaningless data blips), note that a reading of 50 on a diffusion index is considered neutral.
U.S. Homebuilder Confidence Index Increased to 16 in November
By Bob Willis - Nov 16, 2010 9:09 AM PT
U.S. Homebuilder Confidence Index Increased to 16
A worker runs an electrical cord through a new home under construction in Cary, North Carolina. Photographer: Jim R. Bounds/Bloomberg
Confidence among U.S. homebuilders improved for a second month in November, a sign residential construction may hold at depressed levels.
The National Association of Home Builders/Wells Fargo confidence index increased to a five-month high of 16 from a revised 15 in October that was weaker than initially reported, data from the Washington-based group showed today. A reading of 17 was the median forecast in a Bloomberg News survey of economists.
…
BofA in `Hand-to-Hand Combat’ Over Mortgages, CEO Says
Bank of America Corp . Chief Executive Officer Brian T. Moynihan said resolving investor demands for refunds over faulty mortgages is a battle that will last at least several more quarters.
Austria Threatens to Halt Greek Aid Transfer on Deficit Concern
Austria threatened to block its share of the next transfer of aid funds to Greece unless the government meets deficit-cutting goals agreed upon six months ago with the European Union and International Monetary Fund.
Austrian Finance Minister Josef Proell said in Vienna that he lacked assurances from Greece to commit to the payment. He toned down his remarks later, telling journalists in Brussels that Austria was prepared to meet its pledge to Greece and that Greece was “on a good path.”
‘Lipstick Building’ Owner in N.Y. Files for Bankruptcy
The owner of Lipstick Building, the midtown Manhattan tower where Bernard L. Madoff ran the biggest Ponzi scheme in U.S. history, filed for bankruptcy with a plan to reorganize with support of its largest creditor.
Metropolitan 885 Third Avenue Leasehold LLC’s petition for Chapter 11 bankruptcy in Manhattan court today listed as much as $500 million in both debts and assets. In June, Royal Bank of Canada sued to force a sale of the tower, because the landlord had defaulted on a $210 million loan.
The skyscraper, between East 53rd Street and 54th Street, has 34 floors and was designed by John Burgee Architects with Philip Johnson. It gets its name from its elliptical shape, which resembles a tube of lipstick, and the red granite on its exterior.
Crazy.
House ethics panel convicts Rep. Rangel on 11 of 13 counts
Rep. Zoe Lofgren (D-Calif.), the chairwoman of the adjudicatory subcommittee and the full House ethics committee, announced the decision late Tuesday morning following an abbreviated public trial of the 20-term lawmaker and less than a day of closed-door deliberations.
“We have tried to act with fairness, led only by the facts and the law,” Lofgren said. “We believe we have accomplished that mission.”
The panel will recommend a punishment, then the full ethics panel will have to convene a sanctions hearing to decide whether to agree to the recommended punishment or determine another one. Serious sanctions — including formal reprimand, censure or expulsion — require a vote on the House floor. Expulsion requires a two-thirds vote, while a reprimand, which Rangel refused to agree to in July, or a censure would need just a simple majority.
I hope they manage the 2/3rds vote.
I liked the way Rangel walked out yesterday. It reminded me of “Animal House” all he needed was a bunch of guys in the room coughing “eat me” and a finishing statement of “I will not stand here and listen to you bad mouth the United States of America” as they marched out.
So Rangel was on double secret probation?
He is now.
Racist bastards!
“TrueBambooLie™”
Filed under: “Any new Chinese workers at your foreign high technology company?”
Steal“temporarily borrow”: “other” Nations “innovations”,… replicate,… distribute, …go out an get some more!” + (No worry about International “law suit”, work fast!)China’s ‘State Capitalism’ Sparks a Global Backlash:
By JASON DEAN, ANDREW BROWNE And SHAI OSTER / ECONOMY / NOVEMBER 16, 2010 / WSJ
“But the state is again ascendant. Many analysts say the pace of liberalization has slowed, and point to vast swaths of industry still controlled by state companies and tightly restricted for foreigners. The government owns almost all major banks in China, its three major oil companies, its three telecom carriers and its major media firms.”
“The Chinese have shown that if they have the ability to kill your model and take your profits, they will,” says Ian Bremmer, president of New York-based consultancy Eurasia Group. His book, “The End of the Free Market,” argues that a rising tide of “state capitalism” led by China threatens to erode the competitive edge of the U.S.”
“Such critics believe that China’s focus on “indigenous innovation”—nurturing home-grown technologies—entails appropriating others’ technology. China’s high-speed trains, for instance, are based on technology introduced to China by German, French and Japanese makers.”
Stupid multinationals! They are training their competition. But who cares? Next quarter’s numbers look great!
That’s the most insane part of this whole globalization.
The Chinese WILL kick them to curb and takeover their operations. Not if. Not maybe. Not might. WILL.
They already have enough tech and science that if every multinat pulled out tomorrow, it wouldn’t slow them down one damn bit.
Going bust: West Wing and Thirtysomething star Timothy Busfield may lose his house ~ Daily Mail Reporter
He was a beloved character on long-running U.S. show, The West Wing, so you’d think he’d have enough money to live on.
But it seems Timothy Busfield has hit a financial speed bump lately.
The 53 year-old actor, who played Danny Concannon, is facing foreclosure on his home.
According to U.S. website TMZ, Timothy hasn’t been paying the mortgage on his $1.25 million house in Malibu, California.
His bank is now threatening to foreclose and auction off the house in early January.
They have apparently already given Timothy several chances to work out a payment plan, and offered to extend their foreclosure deadline once in September and again this month.
“They have apparently already given Timothy several chances to work out a payment plan, and offered to extend their foreclosure deadline once in September and again this month.”
See? The banks will work with people!
(j/k)
What is a $1.25 million house in Malibu, California anyways?
A shack with 2 bedrooms and a single WWII bathroom?
But view! Think of the view!
China, the biggest buyer of U.S. Treasury securities, boosted its holdings for the third straight month, the Treasury Department reported Tuesday.
China’s holdings of Treasury debt rose to $883.5 billion in September, the Treasury Department said in a report. That’s a 1.7 percent increase from August. For much of this year, China has been increasing its holdings of Treasury debt.
The report shows that China and other countries still have a robust appetite for Treasury debt even as the U.S. government is running annual budget deficits topping $1 trillion. Overall, foreign governments increased their purchases of Treasury securities by $39.5 billion in September, a record high. A sustained drop in foreign demand for Treasury debt could lead to higher U.S. interest rates, slowing the economy.
Japan, the second-largest holder, expanded its portfolio of Treasury debt to $865 billion, a 3.4 percent increase from August. Britain, the third-biggest holder, boosted its stake to $459.1 billion, a 2.1 percent increase.
Total holdings of Treasury securities by all countries rose to $4.2 trillion in September, an increase of 1.3 percent from August. Of that total, $2.8 trillion is held by foreign governments and central banks.
Seems China’s plan is to keep it’s currancy low and suppress growth at home to prevent inflation. I see a game of chicken forming.
Where’s packman for an analysis?
They slow their buying, we start quantitative easing, they pick up their buying… we continue to QE. Ruh roh!
Let’s begin with what seems to be the principal conclusion of Roubini’s argument. Simply put: “Inflation is not the problem.”
Why does he believe that to be true?
The key to understanding Roubini’s assertion may be best summed up in his own words: “Increasing base money is not inflationary because M0 more than doubled in the last year and a half-since QE1-but velocity has collapsed.”
Roubini in the news again?? hmmm
I guess he missed the latest commodity price reports.
While inflation may not be a problem with certain quants and quatloos, it’s real and painful for J6P.
Producer Price Index
http://www.bls.gov/news.release/ppi.nr0.htm
Unlike so many books focused on the financial crisis, All The Devils Are Here, tells the story of the conditions that led up to the crisis.
As detailed in this previous clip, co-authors Bethany McLean and Joe Nocera say there’s plenty of blame to go around, from Alan Greenspan – who failed to regulate banks despite mounting evidence of problems in the housing market - to the executives on Wall Street who put profits ahead of risk management and due diligence.
What’s clear is many of the problems started in the subprime market and were created by a little known billionaire Roland Arnall - the founder of mortgage lender Ameriquest.
“He led to the bottom of subprime, many of the worst practices came out of Ameriquest,” Nocera tells Aaron and Dan in this clip.
At one time, Ameriquest was the largest subprime lender in the country. Then in 2005 – before the housing market crashed through the floor – the company settled predatory lending allegations for $325 million. According to a New York Times article published in 2008: “Brian Montgomery, the Federal Housing Administration commissioner, said that the Ameriquest settlement reinforced his concern that the industry was exploiting borrowers, and that he was ’shocked to find those customers had been lured away by the fool’s gold of subprime loans.’”
So what became of “disgraced” businessman Roland Arnall? Before his death in 2008, Arnall – a large political contributor - went on to become the U.S. Ambassador to the Netherlands.
“Here we have the largest subprime lender in the country, paying over $300 million to settle accusations of predatory lending; and the guy who runs this empire is appointed the ambassador to the Netherlands and no one cares,” McLean laments. “The party rages on.”
From yahoo
The Super Villain of Subprime … Unmasked! (And It’s Not Angelo Mozilo)
Peter Gorenstein in Recession, Housing
Unlike so many books focused on the financial crisis, All The Devils Are Here, tells the story of the conditions that led up to the crisis.
As detailed in this previous clip, co-authors Bethany McLean and Joe Nocera say there’s plenty of blame to go around, from Alan Greenspan – who failed to regulate banks despite mounting evidence of problems in the housing market - to the executives on Wall Street who put profits ahead of risk management and due diligence.
What’s clear is many of the problems started in the subprime market and were created by a little known billionaire Roland Arnall - the founder of mortgage lender Ameriquest.
“He led to the bottom of subprime, many of the worst practices came out of Ameriquest,” Nocera tells Aaron and Dan in this clip.
At one time, Ameriquest was the largest subprime lender in the country. Then in 2005 – before the housing market crashed through the floor – the company settled predatory lending allegations for $325 million. According to a New York Times article published in 2008: “Brian Montgomery, the Federal Housing Administration commissioner, said that the Ameriquest settlement reinforced his concern that the industry was exploiting borrowers, and that he was ’shocked to find those customers had been lured away by the fool’s gold of subprime loans.’”
So what became of “disgraced” businessman Roland Arnall? Before his death in 2008, Arnall – a large political contributor - went on to become the U.S. Ambassador to the Netherlands.
“Here we have the largest subprime lender in the country, paying over $300 million to settle accusations of predatory lending; and the guy who runs this empire is appointed the ambassador to the Netherlands and no one cares,” McLean laments. “The party rages on.”
It was my understanding that the model of sub-prime for profit was a model that became popular because the profit margins were off the
charts when real estate always went up covered all sins in lending .This was more the reason why it became more widespread ,rather than some
Congressional mandate that sub-prime borrowers should be given loans ,course that was part of it .
That is correct. And the number of sub-prime defaults is now overshadowed by prime defaults.
“So what became of “disgraced” businessman Roland Arnall? Before his death in 2008, Arnall – a large political contributor - went on to become the U.S. Ambassador to the Netherlands.”
Don’t forget our honorable Senate confirmed his appointment too.
Target, the dog who survived Afghan war and melted hearts on Oprah, mistakenly put down at Arizona animal shelter. ~ Daily Mail Reporter
Target the dog lived through explosions in war-torn Afghanistan, saved the lives of U.S. soldiers and was featured on Oprah - but she couldn’t survive a brief stay at an Arizona animal shelter.
An employee at the Pinal County facility was today on administrative leave after euthanizing the shepherd mix by mistake.
‘When it comes to euthanizing an animal, there are some clear-cut procedures to follow,’ said Ruth Stalter, director of the Animal Care And Control centre.
‘Based on my preliminary investigation, our employee did not follow those procedures.’
Read more: http://www.dailymail.co.uk/news/article-1330088/Afghanistan-dog-hero-mistake-Arizona-animal-shelter.html#ixzz15TcbIPmt
When I was growing up, my family had a dog who liked to wander. The term we used to describe his escapes was “leak out.” As in, Max leaked out again.
Max never got very far away. He was a dachshund and was just looking for new things to sniff.
But whenever he got out, we put the word out in a hurry. Told all the neighbors, called the cops, did what we had to do. There was no way he’d end up in a shelter. He had too many people looking for him.
When Max got old and sick, he wandered off. My parents figured that he’d gone off to die somewhere. He was the kind of dog who didn’t want to make us suffer along with him. He’d even play ball with me when he could hardly move without pain.
Well, there was a neighbor who had a duck pond, and Max was always fascinated by those ducks. Several months after Max disappeared, the neighbor came over with a wrapped up bundle. It was Max’s body.
Apparently, Max had fallen into the duck pond and drowned.
NEW YORK (Reuters) - Wall Street may earn $19 billion in 2010, its fourth-most profitable year, even as regulatory changes and a weakened economy limits its ability to generate profit, New York State Comptroller Thomas DiNapoli said.
It’s good to be in a tax payer supported industry like Wall Street.
It’s GOOD to be the Banksta!
Dying With Debt: A Dirty Little Retirement Secret. ~ CNBC
Retired Americans are racking up credit-card debt like never before, be it for vacations or medical expenses, and a surprising number have no intention of paying it off before they die.
Nearly 40 percent of retired Americans said they’ve accumulated credit-card debt in their twilight years — and aren’t worried about paying it off in their lifetime, according to a survey released by CESI Debt Solutions.
“At the end of the day, some people of a certain age say, ‘It’s too late in the game for me to do anything about it. I can’t win. So I’m just going to stop playing the game,’” said Neil Ellington, executive vice president at CESI.
http://www.cnbc.com/id/40214649
“Financial institutions haven’t been perceived as the most friendly” and many people blame them for the recession, Ellington said. “They think, ‘Hey, I’m not going to pay back these guys who ripped off America.’”
Hard to know where to start…
Seniors with a intent not to pay the Financial institutions back by
dying and leaving it to the Estate to pay .
Don’t know why that senior wouldn’t get a reverse mortgage ,but
in these desperate times all age groups are doing whatever it takes
to keep it going .
To me to take out credit that you don’t intent to pay is the exact type
of screwed thinking that got us in this mess to begin with and the
banks are no better when they give credit to people who should be
considered high risk . I guess the Banks figure they can attack the estate as a creditor and get paid .
But the housing bubble went sky high because you had people with
no intent to pay long term betting on short term gains by using this
sort of leverage .
From the article they said in essence that 75% of the seniors are using the credit cards for medical expenses . I serious doubt that these seniors are going to be able to afford assisted living that isn’t paid by medicare either .
In the end, it’s yet again the financial instiutions’ fault. If they want to give 30 year mortgages to 65-year-old people (a case I am personally aware of) and not lower CC limits, then they deserve the burns they get.
I repeat myself, but I know a guy who got a 30yr mortgage on a 40K house when he was 77. He did have a good military pension…anyway that was in 1982!! and it’s still not paid off by his heirs. Couple refi’s in there.
Used car prices hit record high.
FORTUNE — New or used? Burdened by a weak economy, U.S. carbuyers are choosing the latter option more and more, helping to drive used-car prices to a record high while holding back new-vehicle sales that are sputtering at roughly two-thirds of the pre-recession level.
Economists have a word for it: Substitution.
According to Karl Brauer, an analyst for automotive website Edmunds.com, those preferring used cars over new fall into two categories: buyers who are forced to economize and others who can afford new but decide to hold off because “there’s a bit of a stigma to spending.”
Or, as Tom Webb, chief economist for Manheim Auto Auctions, put it: “It’s cool to be frugal.”
The average price of a used vehicle sold through October reached $18,570, compared to $17,968, a year earlier, said Edmunds.com. Edmunds, a website for shoppers, measures views of web pages devoted to new vehicles and compares with views of pages dedicated to used.
“Views for new [cars] were in the lead until 2008,” Brauer said. “And then it switched to used.”
According to Karl Brauer, an analyst for automotive website Edmunds.com, those preferring used cars over new fall into two categories: buyers who are forced to economize and others who can afford new but decide to hold off because “there’s a bit of a stigma to spending.”
How about those who could afford a new car but refuse to take a 25% depreciation for just driving the car off the lot…
Have you ever priced a used Subaru? The don’t lose 25% until after a few years. Its ridiculous, and I know plenty of folks who bought their Subaru new because used ones are so expensive.
I assume that’s mostly a Colorado thing…I can’t imagine that they’re as popular in other places. I’ve had the same thought on Hondas, though. I only buy them used when a model is unpopular and depreciates, otherwise it makes more sense to buy new…and I don’t buy new. So the only Honda products I’ve owned have been a first generation Odyssey and first generation Acura Legend, both of which depreciated quite a bit. Bought the 86 Legend in 97 for 5k and the 98 Odyssey in 04 for 8k. Both in very good condition and lasted for many years. Legend got totaled by wife, still driving Odyssey as 2nd car. Hope the Mercedes holds up as well.
1988 was the last time I bought a new vehicle, never again. Let someone else take the hit, but hey someone has to buy them or there would be no used ones.
Perhaps a car manufacturer could start building used cars and trucks!
I made that mistake once too around 1997.bought a toyota extended cab truck brand new.I got bent over on the deal.
The benefit for most people to buy new cars is they dont have to have any money.you can finance it all and make payments.It’s all about the payment.
You tack on insurance, sales tax, registration, doc fees and they take you to the cleaners.
Never aqain will I buy at new car at these ridiculous prices.
Umm…There are plenty of tote-the-note places in my town.
“Perhaps a car manufacturer could start building used cars and trucks!”
Isn’t that what Kia does?
Nice.
geez, a new camry le is being advertised here at 17,900.
No way man, we’ll just shoot them some QE-2,3 dough…
California Will Default On Its Debt, Says Chris Whalen
Posted by Henry Blodget in Investing, Recession
Municipal bonds have plummeted in recent days, as investors have suddenly focused on huge state and city budget deficits that there’s no easy way to fix.
Nowhere has this collapse been more visible than California, which faces a massive $25 billion shortfall and red ink for as far as the eye can see.
After years in which every looming financial crisis has been met with a government bailout, you might think that the same solution awaits California, as well as all the other states that have huge obligations that they can’t afford to meet.
But this time that may not happen, says Chris Whalen, a financial industry analyst and Managing Director of Institutional Risk Analytics.
In fact, Whalen thinks that California will default on its debt–hammering all the pension funds and other investors who have loaded up on apparently safe state bonds.
If they bail out Cali then they have to bail out everyone. And it won’t be a one time event, as there will be budget shortfalls in every following year.
They will have to raise interest rates on their bonds going forward or nobody will buy them. That’s not going to help their general situation at all.
MarketWatch News Break
Nov. 16, 2010, 11:20 a.m. EST
NAHB: Consumers remain “frozen on the sideline”
Home builders are feeling slightly better, with sentiment now rising two months in row. But David Crowe, the chief economist for the National Association of Home Builders, tells MarketWatch News Break problems remain, like foreclosures, short sales, stagnant job growth and “consumer reluctance.”
Dow 11,000 ought to be easy for the PPT, eh? Any bets?
Yea, you know they have to do some pumping EOD to get it back to the “psychological” level. 11,000 is that current level, next thing to do is trot out some better than “expected” news, and all is well.
Like I said…
lemmings I tell you
[Venezuela] will offer local investors high yields to stimulate saving and allow nationalized companies to seek financing.
The Public Bond Market, which will begin operations in December, will allow state-run companies to sell debt to finance operations and individuals to seek investment opportunities, Chavez said.
Chavez tightened his grip on the financial industry this year by closing more than a dozen banks and 40 brokerages that he said committed “fraud” and set artificial exchange rates. He said investors will have their investments guaranteed by the state.
“The banking and brokerage crisis has allowed us to draft this law,” Chavez said yesterday on state television during his Alo Presidente program. “Don’t spend all your year-end bonuses, invest in the bourse, and the state will guarantee your money with good yields.”
I am confused - are we talking GM or not?
I think we should do this here, let gubmint grantee all investors a profit. See how easy it is, problem solved.
Isn’t that what they’ve trying to do at least for the well connected investor. Wall Street Profits are 4th highest on record.
Isn’t that what they’ve trying to do at least for the well connected investor. Wall Street Profits are 4th highest on record.
And this despite numerous reports that Mom and Pop investors are fleeing the stock market. Something about the 401k becoming a 201k a few years back.
Massachusetts governor’s second term will push tuition for illegal immigrants BOSTON —
Gov. Deval Patrick says he’ll use his second term to try to implement the rest of an advisory panel’s recent recommendations on immigration reform, including in-state tuition for illegal immigrant students and more English classes.
Patrick told immigrant advocates Tuesday that the moves will help better integrate the state’s immigrant population, seventh largest in the country.
The governor spoke at the Massachusetts Immigrant and Refugee Advocacy Coalition’s annual Thanksgiving luncheon.
The crowd gave the governor a standing ovation, and advocates said Patrick’s support for immigrants won him the votes of various immigrant communities in the recent election.
Too many people still drowning in debt.
Dying With Debt: A Dirty Little Retirement Secret
http://www.cnbc.com/id/40214649
Nov. 16, 2010, 4:44 p.m. EST
Dodd: Robo-signing the tip of the iceberg
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — The head of the Senate Banking Committee said Tuesday the foreclosure robo-signing crisis is the tip of the iceberg of mortgage documentation problems as he called for federal regulators to step up their efforts.
“More than a month ago, the robo-signing scandal hit the press,” said Senate Banking Committee Chairman Christopher Dodd at a hearing seeking to examine the growing mortgage paperwork mess. “Many in the industry were too quick to call these problems ‘technical’ and insist that nobody is losing a home to foreclosure without cause. However, the focus on the robo-signing problem is too limited. “
The Connecticut Democrat said the newly formed Financial Stability Oversight Council, which comprises banking and securities regulators, needs to address the issue.
“We created a Financial Stability Oversight Council to examine exactly this kind of issue,” he said. “The FSOC needs to really drill down and find out the scope of the problem and determine the steps that may need to be taken to prevent a systemic problems from growing if they conclude there are systemic implications.”
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Sounds like more rhetoric to me.Dodd is the biggest crook out there.
Don’t forget that Dodd is a Friend of Angelo™.
Can’t say for sure, but the gold bubble might have just started to pop. So far as I know, there is no plunge protection team propping up the price of The Precious™.
china has enough to do that.
Hopefully these probes will prove even less pleasant than a prostate examination, and Megabank, Inc will not get a too-big-to-fail exemption from scrutiny.
U.S. Sets 50 Bank Probes
The Federal Deposit Insurance Corp. is conducting about 50 criminal investigations of former executives, directors and employees at U.S. banks that have failed since the start of the financial crisis.
Have you all thought carefully about just how much 1/1,400 of an ounce is? I am going on long term memory here, but I believe that there are 454 grams per pound, 16 ounces per pound and 1000 milligrams (mg) per gram. Therefore 1/1,400 of an ounce equals
1/1400 oz X (1 lb/16 oz) X (454 g/1 lb) = 1/50 grams = 20 mg.
Thus 20 mg of gold is enough to buy you $1, while 2 g (2000 mg) of gold would be sufficient to buy $100. ‘Scuse me while I go hunt for some gold jewelry to melt down!
* OPINION
* NOVEMBER 17, 2010
Ron Paul’s Golden Opportunity
By SETH LIPSKY
One of the most exciting features of the new Congress is the prospect that the chairmanship of a House subcommittee that oversees the Federal Reserve will go to Ron Paul. Final assignments are still being worked out, and the leadership may yet shy away from giving the position to a congressman who doesn’t believe the Fed should exist. But Dr. Paul, an obstetrician, has been the ranking Republican of the Domestic Monetary Policy and Technology subcommittee, and tradition suggests he will be the next chairman.
This couldn’t come at a more timely moment, though Dr. Paul has been working his way up to the assignment for more than a generation.
I first met the congressman nearly 30 years ago, back when the physician-turned-legislator was emerging on the national scene as a member of the United States Gold Commission. The commission had been formed at the start of the Reagan administration to consider whether America, in the wake of the collapse of Bretton Woods, should move to sound money.
In the event, the committee recoiled from reform. But Dr. Paul wrote a dissent that made the case for gold and is still being read today.
At the time, the value of the dollar had recently plunged to less than 1/800th of an ounce of gold. The collapse was reversed by the pro-growth policies of President Reagan and by a Fed chairman, in Paul Volcker, of uncommon vision and courage. Momentum for a gold standard was hard to sustain when inflation was being brought down, if not conquered, by other means.
Right now we are experiencing an even more dramatic collapse of the greenback—this time to little more than 1/1,400th of an ounce of gold—and the issue has returned with a vengeance. The Fed is reacting to the dollar’s collapse with a campaign of quantitative easing. The plan is to cascade hundreds of billions of additional dollars into the economy on the theory that we need inflation. No doubt this kind of thing will, if Dr. Paul accedes to the chairmanship, come in for a good deal more focused oversight than the committee has provided under Democratic leadership.
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Tuesday, November 16, 2010
All the Devils Are Here: Everyone was to blame in financial crisis
Joe Nocera
Joe Nocera, co-author of “All the Devils Are Here” with Bethany McLean, talks to Kai Ryssdal about what they discovered about the financial crisis and how everyone played a key — and villainous — role.
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Tuesday, November 16, 2010
Should Congress weigh in on the foreclosure crisis?
A foreclosure sign
So far, state attorneys general have been taking the lead in investigating the current foreclosure paperwork crisis. But today, the Senate Banking Committee weighed in. The financial services industry is lobbying against more regulation of the mortgage business at the hands of Congress. Mitchell Hartman reports.