Bits Bucket For November 24, 2010
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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http://www.wdsu.com/r/25869764/detail.html
Has anyone else been following this story in New Orleans? Bizarre….
not bizarre. Just incompetent, or corrupt in the govt bidding
the IT contractor should be supporting - ? maybe it’s insolvent..
Exactly, Bob.
Rick Haase, of the Latter and Blum Realtors, said title attorneys were unable to check mortgage and conveyance records to make sure properties are safe to be sold due to the computer system crash.
These are official records for billions of dollars, not family photos. Isn’t there some protocol for backup systems? And where are the paper titles?
‘And where are the paper titles?’
I suspect we will be hearing that question again in the future. Where are those (legally required) titles and transfers?
Screw that. Here is real news for real Americans:
http://blogs.orlandosentinel.com/entertainment_tv_tvblog/2010/11/dancing-with-the-stars-and-the-winner-is-3.html
Branwndo. Its what plants crave!
‘Shadow inventory’ of 2.1 million homes may loom in U.S. market.
~ LA. Times
The number of properties in foreclosure, with loans 90 days past due or taken back by lenders and not yet listed for sale stood at an eight-month supply at the end of August, three months more than a year earlier.
A supply of 2.1 million homes poised for foreclosure or delinquency potentially looms over the nation’s housing market, according to data released Monday.
This “shadow inventory” of residential real estate — property that is in foreclosure, has a loan 90 days past due or has been taken back by a lender and is not yet listed for sale — stood at an eight-month supply at the end of August, according to Santa Ana mortgage research firm CoreLogic, which released the data. That was an increase from 1.9 million, a five-month supply, a year earlier.
The total number of U.S. properties listed for sale at the end of August plus the unlisted shadow inventory was 6.3 million, representing a 23-month supply of homes, according to CoreLogic, more than three times the amount considered healthy by economists. A year earlier, the total was 6.1 million, or a 17-month supply.
The market looks a little frisky this morning.for some reason I feel we will close down again later today.This korea madness could get ugly.
Nah — pre-holiday “relief rally” on low new claims figure is baked in.
Never mind that lower new claims and incipient labor market recovery weaken the case for QE2…
Why do we have QE2 when everything is so rosy?
Which came first, the adult pig or the fetus?
Amazing that that the fetus is already reproducing on its own when it hasn’t even made it through the gestation period.
No way. This market is a missile-proof, insider-trading-scandal-proof, reality proof miracle. Forget a Bull Market, weclome to the Unicorn Market!
Nothing a few well placed smart bombs couldn’t remedy. My guess is that even China would be happy to see the little wacko eliminated.
Why? He is useful to them. Aspiring superpowers know they need a large foreign policy toolbox.
AP-Gfk Poll: Consumers feel less angst from debt- AP
Debt isn’t stressing people as much as it had been, but consumers remain gun-shy about embarking on a big holiday spending spree.
Not buying as much stuff and not feeling as stressed out about debt - how incredibly odd for those to go together. I just don’t understand how that could be. Someone, please explain it to me.
Maybe peeps finally realize that walking away from debt is their only option…let ‘em sue me in court i’m broke anyway…..so why worry.
Finally gave up and stopped paying on the old debt, so not so stressed about it any more? But not buying because you no longer have any credit available? I bet it’s just the new mindset as a person switches over to all cash and puts the old debt out of their mind.
The operative word is stuff, as in stuff we really don’t need.
For years I would tell Mrs. Spokaneman to just make a contribution in my name to one of the local charities in whatever amount she deemed appropriate for a Christmas gift. For years, she would buy me some stuff. I know it was a well intentioned, loving act on her part, but almost invariably, the stuff would wind up on the shelf in my office closet.
A couple of years ago she finally took what I said to heart, and made a contribution to the Crisis nursery in my name, and did not buy me any stuff, and, surprise, we were both very happy with that concept. Hopefully, we will make it a threepeat.
She on the other hand, likes to receive some stuff, so I will be out buying some stuff.
It’s going to take a while, but perhaps the American people are finally going to realize they’ve been bamboozled by Madison Avenue and Wall Street.
“Someone, please explain it to me.”
“Dying With Debt: A Dirty Little Retirement Secret”
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.
cnbc.com/id/40214649
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.
Looks like the Sixties Generation is still stickin’ it to The Man.
Here is the update on our 13,000 sq.ft building. I bought the building for 165K. There are 3 heating systems all energy star and were put with money from a 300K 2nd mortgage from GE by the previous owner. The flat roof for the most part of the building is also brand new. I have met with the previous owner twice and he puts on a very happy face. He claims he lost the building due to divorce as his ex-wife was seeking 8K a month in divorce settlement. This guy bought the building before me for 260K in 07 and claims he invested 50K into it, The building was recently painted both exterior as well as interior. He is storing two huge dehumidifiers at our building. We are lucky to have found a crew of 2 guys at $15 dollars per hour. They work at a major apartment complex during the day and in the evening and weekends work at our building. We supply the materials and they provide the labor. So far we have replaced the hot water tank, eliminated some unwanted plumbing, changing the kitchen and some of the carpeting in the main lobby and painting it. We have another crew of 2 who have done a wonderful job cleaning it. This building has not 4 but 6 bathrooms, a gas fire place and some of the offices have high ceilings, I got lucky as I purchased this building at an auction.
Now here is the important part. I swear I will never buy a home or own another piece of property. I don’t care how cheap or how lovely. Nor do I care if it is cheaper to buy or to rent. Eff it all. In the past month I have made more trips to home depot, Grossman’s, Lowe’s, Truck rental companies than I care to ever go, I recognize the workers at these stores and they recognize me as there is hardly any traffic at all of them during different times of the day Money has been flowing through my fingers like water. You really get nickel and dimmed to death owning. I don’t wish real estate on anyone.
Things I never thought of before like the fire extinguishers, snow plowing, alarm systems, secure metal doors, video cameras, building insurance the nonsense is nonstop. I have lost my piece of mind and freedom. The good part I keep reminding myself is it is less than 5 percent of my cash on hand.
Real estate WHAT A MISTAKE.
Whiner. Just think of all the good you’re doing for the local economy and local bureaucrats.:-)
In all seriousness, though, some friends of mine moved to Northern Florida just before the bubble and started buying and rehabbing properties for rental, industriously following the advice of assorted real estate gurus that they had read over the years. Making marginal profits and about to have their marginal profits eaten up by Florida’s septic tank law. (Most older properties in their area are on septic.)
Anyway, they put a lot of sweat equity into their venture, but not realizing the kind of profit they thought.
Speaking of septic tanks, I was reminded of what happened when I was putting mine in. While the septic tank company was digging the hole, they unearthed a quite rusty 55-gallon drum. When I mentioned the drum to one of the neighbors, he told me that that was his septic tank when he owned the property.
Boone’s a much nicer place than where I live! Around here, if an old 55-gallon drum is dug out of a yard, there tends to be a missing person and a tabloid involved.
To make a proper septic tank, the barrel should be well peppered with .45 rounds. 9mm. will work in a pinch.
Folks here us old autos. Dig a hole, put in the car and the hose through the window and roll up the window. Cover with dirt.
Repeat when necessary.
“Folks here us old autos. Dig a hole, put in the car and the hose through the window and roll up the window. Cover with dirt.”
The state of Oregon has plenty of natural beauty, and I like their custom bicycles and dark beer, but there is an element of human poverty that resembles West Virginia, IMHO.
And just what are you going to do with this boat anchor of a shanty located in DepressionLand???
Nancy Pelosi gives me a depression in my pants.
And lives in your head rent free.
To be quite honest we have rented various buildings for the past 25 years as I own a franchising/Manufacturing company. During this recession our sales have been down by only 2 percent. Our business has been holding up nicely and we have been able to increase prices by 25 percent to ward off any inflation. Actually the threat of inflation gave us the ability to raise prices without any hiccups from customers. The franchising part we increased the initial layout by more than 50 percent. You will be surprised that in our industry people expect and are willing to pay a certain amount to buy a franchise.
So going on that logic it made sense to buy a building at an auction put some money into it. We can expand our product line, buy more equipment at auctions and hire more people. We are not going into it blindly as we have been the leaders in our industry without much competition for the past 25 years. Btw the Sauna is working it only needed a light bulb. We are changing the standing shower in that bathroom. I wish I could post some pics of this beauty. You all will be surprised what 200K buys in Suckcuse NY these days.
We are just trying to Gods work as well.
“You all will be surprised what 200K buys in Suckcuse NY these days.”
Precisely my point. The post-industrial decline is best demonstrated by local prices.
Now here is the advantage of having manufacturing plants in CNY.
We export and have franchises in US, Canada and the Caribbean Islands. So it does not matter where the manufacturing plant is located. Cheap areas, with good roads, excess to decent populations within a 6 hrs driving distance, suppliers of raw materials as well as happy employees without attitude from small towns is what we need. We hardly do any business in Suckuse NY. I am usually traveling out of the area most weeks for business. I am also aware and fully expect to sell this place in the future at a substantial loss. However it will be the best looking building at the cheapest price that anybody will find in the area at the time of the sale.
Thank you for these updates. It’s nice to comment on wire stories and all, but the individual info is priceless.
How old is your building? Are these regulations for commercial buildings? Are private residences subject to these regulations? Someday in the far far future I may be fixing up the home, and it looks like the best way to do it would be to plan everything down to the smallest nail in advance before i make a trip to the home center.
Oxide - try to find a good home inspection person and have them inspect your home as if you had it on the market. That’ll be your “to do” list.
And if you want to ramp it up another notch, contact some real estate agents, tell them you’re thinking of listing your home and get their advice as to how to make your home more marketable. You may actually get some good ideas out of it.
It always costs more than you expect to “get lucky”.
“Here is the update on our 13,000 sq.ft building.”
Planning to do the American thing and convert it to a one-family house with a ten car garage?
Or something more sensible, like start a commune.
“Planning to do the American thing and convert it to a one-family house with a ten car garage?”
Naw, he’s going to sell it to a retiring boomer who is going to open a candle shop. Duh!
For all we know, that franchising/manufacturing industry might BE a candle shop. Although, why would he need a sauna…
“aw, he’s going to sell it to a retiring boomer who is going to open a candle shop. Duh!”
Ok c’mon now…. everyone knows that a “running” a vineyard is what you do when you “retire”.
The bubble in vineyards makes me want to puke.
The bubble in vineyards makes me want to puke.
Makes me puke, sometimes- from all the good cheap wine.
Dance for me, monkeys! Plant more vines- you’ll get rich!
Moohoohahahahahahaha! *hiccup*
(Actually, I think Coppola said he’s made more money winemaking than he ever has making movies. But I suspect his is not a typical case.)
I am not paying for most of the money out of my own pocket but charging it to my company that is going to rent it out as “lease hold improvements”. It is also a gorgeous building but I hate to have to be its gate keeper. Aging buildings are a headache. Maybe I will find someone by the name Pete or Blackie with an Italian Uncle who likes pyrotechnics.
Grossman’s! They still exist? Thanks for bringing up fond memories of trips there with my dad as he built our house. When you’re a teacher with no money and you can’t find summer work, what do you do? Build a house. Right after the Blizzard of ‘78.
Yeah. Grossmans lumber has been gone since the mid 80’s or thereabouts. About the time Curtis started getting big.
They still exist.
http://www.bargain-outlets.com/
dang SUVguy what a nice new home you have 13,000 sq feet 6 baths…what are you going to do with all that space ……. have 14 kids to fill it up?
What about the Swedish sauna?
The other day Mr. Bear kindly posted some stats about house sales in Chicago for October. For additional context here are some Y-O-Y stats for the city proper from the IAR.
The Y-O-Y sales decline was just shy of 40% (39.5%) - last October having been bumped by the FB tax credit. Median price is also down just shy of 15% from $215k to $183k Y-O-Y.
The take away: so far the autumn of 2010 has seen both lower sales volume (barely 1,200 units sold), and at much lower price points, than the much dreaded/lamented fall of 2008. Additionally, October was down from September - so the trajectory at the moment is decidedly downward. And now comes winter.
I had noticed that the MSM and the REIC as of late had been focusing on MTM numbers as opposed to YOY numbers. 40% YOY drop sure explains why.
Yes, and although the tax credit skewed the October 2009 sales volume and made for the dramatic Y-O-Y decline, what is more important (IMHO) is that there were considerably fewer sales last month than in the same month of 2008.
The folks I speak with locally about this claimed it couldn’t get any slower than 2008, but it sure does look like it has.
Elizabeth Warren on Banking Sector Transparency issues, and the new agency she is heading.
(8 minute video)
http://www.pbs.org/newshour/bb/business/july-dec10/elizabethwarre_10-05.html
Isn’t the “new agency” part of the Fed (i.e., under the banksters’ thumbs)?
PB
You’ve got a point, but Warren doesn’t mix well with the “Capital Hill-Bullies”. Water meet oil.
Brawndo: Its got electrolytes!
Got my holiday financial crisis reading list entered into Amazon dot com as a “wish list.” Thanks to price deflation, the whole list can be purchased for just over $100. Life is good!
——————————————————————————–
Title Price
1. How Markets Fail: The Logic of Economic Calamities by John Cassidy $10.88
2. The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein $10.39
3. Freefall: America, Free Markets, and the Sinking of the World Economy by Joseph E. Stiglitz $11.53
4. It Takes a Pillage: An Epic Tale of Power, Deceit, and Untold Trillions by Nomi Prins $17.13
5. The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street by Robert Scheer $10.09
6. The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America–and Spawned a Global Crisis by Michael W. Hudson $16.25
7. Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi $13.99
8. All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean $17.50
9. “Why The Real Estate Boom Will Not bust - And How You Can Profit From It.” - David Lereath
Question, who is more likely to be paid a significant amount of money to give a speech on housing economics at a conference: David Lereath or Ben Jones?
Who is more likely to be given a big advance to write a book about housing markets in the 2000s, David Lereath or Ben Jones?
Why? What does that say about America? And aren’t other fields very similar?
“Why?”
One is honest and presents to his audience the painful truth, the other is dishonest and presents to his audience what they want to hear.
+1 Everyone wants heaven, but they don’t want to die.
Everyone wants guvment bennies but no one wants to pay taxes.
Here’s one that I heard about just the other day:
23 Things They Don’t Tell You About Capitalism
Ha-Joon Chang (not sure of the price)
The guy is a Korean economist who is a professor at Cambridge in the UK. Apparently, one of the 23 things on his list is the fact that the washing machine has changed more lives than the Internet.
There’s a very good reason that “taking in laundry” was the VERY LAST thing people did people did when desperately trying to stay afloat.
I have never lived in a home without a washing machine, although about 30+ years ago, we went a year in a house in UK with no phone while BT was on strike. We had to walk up to the corner and use the phone there if we needed to call someone. Nothing to do with money. The phone company would not install a line.
Ugh, washers! Have been washing in the sink for 2 weeks while landlord fumbled for a repair. Guy finally comes today and it needs new belt and bearings. Not so bad? Try an estimate of $962! Learning this cost $140 for visit by Sears repair guy. Glad to be a renter today. Though I am on hook for shot washer at crumbling cabin that I actually do own.
Repairing appliances is a waste of money; replace it.
Then LL would just buy a new one, no? $400 or so.
Exactly. Fortunately, not my problem in this case. Cost less to replace bearings on my car than this 9-year-old washer. Planned obsolescence.
“Repairing appliances is a waste of money; replace it.”
Only if you are paying someone else to do it. I fix my own.
Only if you are paying someone else to do it. I fix my own.
Just replaced the element in one of the side-by-side ovens in my beloved 70s era Hotpoint Custom (60$- easily done even with my very limited electrical skills).
No way I’d trade it for some new made-in-China POS that I could never fix.
In Rio I have some of the very few American made: Dishwashers, washers, dryer, ceiling fans, speakers, BBQ’s, Bicycles, Refrigerators, couches, love seats, chairs, shaker rockers, comforters, pots n pans. ….
..I’m sorry, I’m getting sad.
When I move back to America it will be impossible to duplicate all these American made things..
Sh#^
In Rio I have some of the very few American made:
I mean USA made.
Please don’t tell me my intentionally collected USA made household items will forever be irreplaceable and be destined to fade away in another land.
…………………………What did we do?
Please don’t tell me my intentionally collected USA made household items will forever be irreplaceable and be destined to fade away in another land.
Craig’s List, garage sales, and second-hand stores. American made goods are out there…you just can’t buy them new. We sell ’services’ now. (Stop snickering!)
“the whole list can be purchased for just over $100″
Come now, PB… surely San Diego has a fairly extensive library/library network which should knock your list down to $50 or so, no?
I like to stimulate the cottage industry of books written about the financial crisis by actually purchasing them. I donate my copies to local San Diego libraries when I am finished reading them.
9. 23 Things They Don’t Tell You About Capitalism by Ha-Joon Chang (Author) $15.67
10. Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich by Robert Frank $10.88
11. All Real Estate Is Local: What You Need to Know to Profit in Real Estate - in a Buyer’s and a Seller’s Market by David A. Lereah $21.95
Below the $21.95 list price for Lereah’s book is this additional information from Amazon dot com:
12 new from $1.99
21 used from $0.01
Don’t overpay for Lereah’s book!
Fun fact: At $21.95, Lereah’s book has the highest price of any on my Amazon dot com wish list.
I think I will wait until after Christmas, to buy it new for under $1.99, once the high-demand holiday shopping period is past.
12. Taming the Black Dog: How to Beat Depression - A Practical Manual for Sufferers, by Patrick Elverton, 2004 Paperback
(You might need it after reading your list of books)
13. Bubbles are for Tubs, Silly - by Kendra Todd
Or in paperback, 78. “Collapse: How pornucopia economics, boneheaded farmers and greedy overlords have helped humans extinct themselves for centuries,” by Jared Diamond
good read, but not as good as his “Guns, Germs and Steel”
Extinct themselves for centuries? So extinction isn’t forever after all?
“Extinct themselves for centuries?”
Subspecies regularly extinct themselves, even as the aggregate species population carries on. It’s all part of the Darwinian winnowing plan for improving the gene pool.
Meltdown by Tom E Woods has to be the best IMO. Came out couple of yrs ago.
My list has grown long enough now to last me through Christmas 2011 shopping season!
12. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse by Thomas E. Woods $18.45
13. Individualism and Economic Order by F. A. Hayek $18.90
14. The Constitution of Liberty by F. A. Hayek $25.74
15. The Fatal Conceit: The Errors of Socialism (The Collected Works of F. A. Hayek) by F. A. Hayek $12.24
16. The Road to Serfdom: Text and Documents–The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) by F. A. Hayek $8.67
17. The Law by Frederic Bastiat $8.88
18. Nullification: How to Resist Federal Tyranny in the 21st Century by Thomas E. Woods $15.79
Will have to check out the works by Hayek more closely to avoid redundancy…
I’m giving my nephew a copy of Hayek’s “The Road to Serfdom”, along with a copy of Herbert Croly’s “The Promise of American Life”. They are respectively the libertarian and progressive manifestos. We’ll see which one he thinks has the better arguments.
In several places Croly says something like “we must restrain individual liberty in order to achieve economic equality”.
Another good book for lists is the 2000 biography of Henry Wallace, “American Dreamer”, by Culver and Hyde. Overstock new hardback copies are available cheaply.
We could have a long debate about the economic aspect of individual liberty. For most people, the libertarian/conservative/Republican agenda would not result in any real increase in individual liberty, as government power in the economy would be replaced by the power of large corporations. The situation for the vast majority would be summarized by a quote from great philosopher Kris Kristofferson - “Freedom is just another word for nothing left to lose/ Nothing ain’t worth nothing but it’s free”
For most people, the libertarian/conservative/Republican agenda would not result in any real increase in individual liberty, as government power in the economy would be replaced by the power of large corporations.
Exactly. The idea that once we rid ourselves and our businesses of most or all regulations we will be free, has been proven wrong throughout history. (Oh right- all that doesn’t count because it wasn’t ‘perfect’ free market libertarianism. I wonder if they realize this is the exact same argument made by Marxists and religious zealots?)
I’ll settle for a couple of good thrillers downloaded to my kindle.
Try “Condominium” by John D. MacDonald: Florida real estate boom, shoddily constructed condos, crooked realtors and developers, FBs galore, all tied together with MacDonald’s excellent story-telling. It was written in the 70s, but reads like it was written from today’s headlines.
What’s The Matter with Kansas, Thomas Frank, 2004
Read it. You’ll be glad you did.
“Try “Condominium” by John D. MacDonald”
+1 A summary from Amazon
“Here is a panoramic look at the shocking facts of life in a Sun Belt community — the real estate swindles and political payoffs, the maintenance charges that run up and the health benefits that run cut…the crackups and marital breakdowns…the disaster that awaits those who play in the path of the hurricane… “
I just set up a lazy portfolio, along the lines of Paul Farrell’s suggestions. Made sure to include a REIT mutual fund, both to let me gradually accumulate real estate at fire sale prices over the next few years, and to hedge against ‘larger than expected’ real estate price increases in the wake of the Fed’s printing press binge.
The New Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get on with Your Life [Bargain Price] [Hardcover]
Bill Schultheis
List Price: $22.95
Price: $9.18 & eligible for FREE Super Saver Shipping on orders over $25.
‘ Griftopia author Matt Taibbi…says Tea Party members should be angry at the bailed out banks who sold people homes they couldn’t afford (using fraud and predatory lending to do it in some cases) not the foreclosed homeowner next door who is now desperate for relief.’
http://finance.yahoo.com/tech-ticker/
Adding insult to injury, Taibbi notes, Greenspan professed to be a devotee of Ayn Rand’s philosophy of objectivism, which abhors state involvement or interference in almost any aspect of society, most certainly the markets.
Greenspan pushed for Rand-style deregulation such as the repeal of Glass-Steagall, which helped give us the “too big to fail” banks, and opposed efforts to regulate derivatives, predatory mortgage lending and…just about anything else.
“He represented this kind of contradiction,” Taibbi says. “On the one hand, it’s this ‘arch-capitalist, government has no role anywhere, hands off everything’ ideology and at the same time he was building this welfare state” for Wall Street.
This is an example of internet chatter-pages like Yahoo actually making things less clear, and distracting from a substantive public policy debate. This guy writes a book and then he’s telling us all about the Tea Party and that we shouldn’t “blame” FBs? What’s next, his favorite turkey day gravy?
‘Taibbi notes, Greenspan professed to be a devotee of Ayn Rand’s philosophy of objectivism’
Rand has been dead a long time, Greenspan is irrelevant now, and what does Objectivism have to do with what we do going forward? What is relevant is the Federal Reserve, which has just been handed “oversight” of this corrupt machine. IMO, this is what we should be debating, and not on Yahoo message boards, but in DC.
‘Greenspan pushed for…deregulation such as the repeal of Glass-Steagall…and opposed efforts to regulate’
Why does the Fed chief have a say on any of this? Aren’t they supposed to be neutral and doing some actual work over there?
The real question we should be asking is; wasn’t it the people in DC that passed these laws and were in charge of seeing that regulators did their thing? This is the failure, not the ghost of Rand or Greenspan.
The real question we should be asking is; wasn’t it the people in DC that passed these laws and were in charge of seeing that regulators did their thing? This is the failure, not the ghost of Rand or Greenspan.
True but also I think Taibbi’s point is that the ghost of Rand and Greenspan still substantially affect the debate on your valid point of DC regulators needing to do their thing.
I read Taibbi is saying Greenspan’s ghosts and adherents co-opted the Tea Party and have deflected blame for the mess more onto FB’s, and GM’s bailout than where most the blame should really be put and that is on the banks and Wall Street. Banks, Wall Street and their politicians are most to blame.
This is part of the great philosophical battle being fought and the big money side is twisting facts and re-writing history. If they are allowed to unfairly win this debate then the needed regulation of which you speak will not be carried out.
Rand has been dead a long time, Greenspan is irrelevant now, and what does Objectivism have to do with what we do going forward?
It’s worthwhile determining the philosophy that drove us off the rails, so as not to keep following the same philosophy and expecting a different outcome- which I’ve been told, here and elsewhere, is the definition of insanity.
‘It’s worthwhile determining the philosophy that drove us off the rails’
Name one significant person in DC that’s an Objectivist. And don’t say Greenspan was because he was as far from that as he could have been.
Building The Plutonomy.
Tabbi just doesn’t know anything at all about engineering a “recovery’ out of thin air. It requires giving lots of fake money to banks and … well that’s about it.
I don’t know. The government was the adult here. If the adult spikes the punch bowl with alcohol and kids get drunk, who do you blame? The government deserves the most blame in my book because it could have said, “screw you banksters, go f*** yourself!”
“screw you, go f*** yourself!”
————————————————————————
That’s what the IRS, the bag collector for the Fed Reserve, tells me every April 15th.
“Gangs of America” Free. On-line. Can be downloaded.
Figures a Berkeleyan would have the smarts and guts to tell this tale.
Gangs of America
The Rise of Corporate Power and the Disabling of Democracy
Draft – May 2003
copyright 2003 by Ted Nace
1170 Oxford St.
Berkeley, CA 94707
Of all the things that could potentially have a huge impact on the economy, the Korea thing will most likely blow over, but it is a pretty huge situation right now. I cannot see us involved in a third war all at the same time. Not without Iron Man or Clark Kent …
“I cannot see us involved in a third war all at the same time.”
Apparantly neither can our enemies.
We have a winner.
If NK really decided to get serious about attacking SK or China, just watch the NK people pour out of the country.
A lot of them will head south, where they have families. And, in many cases, the SK families haven’t seen their NK relatives in decades.
Which means that, for a few days or weeks, SK will be the site of one rollicking family reunion. Even more so than what happened in Berlin after the Fall of the Wall in 1989.
Over the long term, I expect that there will be quite the international effort made to bring NK into the 21st century. Starting with the nourishment of the people. They haven’t been eating enough for a long time — the stories you hear about people surviving on grass and tree bark are true.
As for the Kim family? All I can say is this: Remember what happened to Ceaucescu and his wife after his regime collapsed in Romania. Or the Romanovs after the Tsarist regime collapsed in Russia. Or to the Mussolinis in Italy. Oppressed people have a way of turning on their leaders.
To nit-pick, the “Mussolinis” weren’t shot at the end of WWII, but rather Benito and his mistress Clara Petacci.
The DMZ separating N/S Korea includes tank traps, razor wire, and land mines. Getting across it would be very dangerous for any N Koreans.
Exactly. No walk in the park there.
Korea could advertise for new citizens. Help wanted. Mexican mine detectors. Just complete a 4 year tour of duty and get FREE South Korean citizenship.
Is Your New Neighbor a Squatter?
In an upscale enclave in the San Fernando Valley, there’s a new neighbor on the block. He drives a big Mercedes, sometimes a fancy SUV and residents say he’s been living in a three-story mansion, which was empty and going into foreclosure.http://www.nbclosangeles.com/news/Squatters-110233439.html?dr
I’ve got to hand it to the neighbors for noticing something was wrong and doing something about it. Then again, the squatter didn’t exactly keep his head down and nose clean, which I imagine would be the key to a successful squat.
Economic Report
Nov. 24, 2010, 10:28 a.m. EST
U.S. new-home sales down 8.1% for October
Median sales price plunges 14% to $194,900, government data
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — Sales of new single-family homes fell 8.1% in October to a seasonally adjusted annual rate of 283,000, according to data released Wednesday by the Census Bureau and the Department of Housing and Urban Development.
Economists polled by MarketWatch had expected the October data to show an annualized rate of 310,000 units. Read economic calendar.
Sales fell in most regions, declining by 23.9% in the West, by 20.4% in the Midwest and by 12.1% in the Northeast. In the South, the month’s sales increased 3.1%.
The government estimated that there was an 8.6-month supply of homes at the current sales rate. There were 202,000 new homes for sale at the end of the month, the lowest level since 1968.
The median sales price fell a record 14%, hitting $194,900 in October, the lowest level since 2003.
Prices down 14%…….. BWHAHAHAHAHAHAHAHA
Pretty soon the RE ads will be offering a free 72″ flat screen TV to watch the Super Bowl game.
Again? They were giving away TVs AND cars, as well as vacations, before.
St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.
“About trade settlement, we have decided to use our own currencies,” Putin said at a joint news conference with Wen in St. Petersburg.
The FED thinks this is great news. Falling dollar makes manufacturing more competative and Savers get hit once again.
Globalization. Worst. Idea. Ever.
Apparently other countries think so, too. Using your own currency, what an innovation!
Globalization. Worst. Idea. Ever.
“The middle-class was sold Globalization but all we got were these lousy Chinese T-shirts”
I don’t think the middle class, or even the lower eschelons of the upper class believed “globalization” would benefit the US for a minute. It was just powerless to do anything about it.
I didn’t take a Stanford MBA to figure out if you export or technologically displace millions of jobs, eventually there were going to be less jobs available.
Greenspan et al knowingly used montiary policy and the govt used fiscal policy (and suspect statistics) to mask the effect of this for a long while, but it has all come home to roost.
“I didn’t take a Stanford MBA to figure out if you export or technologically displace millions of jobs, eventually there were going to be less jobs available.”
Apparently it does judging by postings on many other message boards where many seem to think jobs are still in abundance and you are just some damn slacker if you don’t have one.
http://www.usatoday.com/money/markets/2010-11-24-madoff-ubs_N.htm
The trustee trying to recover money for investors cheated by jailed financier Bernard Madoff announced a lawsuit Wednesday against the Swiss bank UBS and related entities and individuals, alleging they collaborated in Madoff’s pyramid scheme.
——————————————————————–
Can we also use the same logic that companies having manufacturing facilities in China in fact are collaborating with the communists to bring down the USA?
Without the free movement of people, there’s no globalization. Whatever we have now only allows the free movement of capital but not the people.
Partially. There’s probably some folks from southeast Asia and Latin American that would dispute that. Their labor has been thoroughly commodified and mobilized from the construction sites of Dubai to the front lawns of most U.S. cities.
As for capital, it’s always been mobile - it just moves a lot faster now.
No problem. Worldwide FEMA camps are coming soon to a location near you.
There may be a basic theoretical problem with free trade: There is every incentive to screw your neighbor. To lock your markets and to subsidize exports.
It’s like the basic problem with lenders selling off loans - they have an incentive to create more loans, regardless of their quality.
So, while “from each according to his ability, to each according to his means” sounds good in theory, human nature doesn’t allow it to work.
Surely you are not implying that a “free market” has anything but good intentions?!
Since the Yuan is tied to the dollar…this accomplishes what??
Posted on Thursday, 11.18.10
Foreclosure expert predicts new wave of bank repossessions
A foreclosure investor said bank repossessions will return to record numbers in mid-2011, once the robo-signing scandal has blown over.
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
The foreclosure slowdown initiated by banks will lead to a sharp drop in bank-owned properties and an increase in short sales in the short term, followed by a new wave of bank-repossessions, foreclosure investor Rich Meyer told a group of Miami real estate professionals this week.
Meyer, a veteran of Broward County’s courthouse foreclosure auctions, said the current halt in new foreclosure inventory would be temporary, and predicted a return to record-high bank repossessions by mid-2011.
“There’s a backlog of future filings,” said Meyer,
“Once the litigation is settled, it’s going to be a wave.”
As the market for bank-owned homes, or REOs, dwindles, there will be more competition and prices will increase, Meyer told them. Banks are also likely to favor short sales over foreclosures in the near term, he said.
The workshop took place just a few hours after bank executives and real estate experts testified before the U.S. Senate Banking Committee in Washington about problems plaguing the foreclosure process.
During the hearing, the president of Bank of America’s home loan unit, Barbara Desoer, acknowledged that mistakes were made in the bank’s foreclosure processes, causing some homeowners to be foreclosed on while they were on track for a mortgage modification.
About 20 percent of Bank of America’s defaulting loans are in Florida, Desoer said.
The Congressional Oversight Panel released a report this week stating that the potential fallout from “foreclosure irregularities” could be significant.
“Banks may be unable to prove that they own the mortgage loans they claim to own,” it read.
“If such problems were to arise on a large scale, the housing market could experience even greater disruptions than have already occurred.”
Meyer acknowledged that the road out of the current foreclosure mess is likely to be particularly difficult in South Florida, which has one of the nation’s highest default rates.
“It’s going to get ugly and the banks have recognized that it’s going to get ugly,” he said. “And that’s why they’ve pumped the brakes on these foreclosures.”
Foreclosure expert predicts new wave of bank repossessions.
———————————————————————-
guvment experts are predicting the opposite. I also have complete faith in the Wall Street and the Goldman Sach’s experts.
We got too many experts and czars to fail IMO.
Sheryl Crow failed to auction off her huge mansion.
I tried to find what the final bid was that failed to meet the reserve but couldn’t find it on the website or auction site.
Who in world things a multi-acre estate is a good thing to try and auction off online like that? The production values for the site are pretty good, so I’m sure she dropped 10k on the auction as a minimum.
Looks like my link didn’t work right. Here’s the URL if anybody wants to look it up : http://sherylcrowauction.com/
Is she underwater too? I hadn’t heard about that.
All I know is she’s no longer underlance.
Ha!
Lance who?
People that got that much money will build their own castle.
Happy Thanksgiving fellow bubbleburstheads:
I’ve been following this market since 2004, and reading this blog at least weekly since early 2005. I sold my house in 2005 in San Dimas California and have been renting ever since then. Investments for me include an addiction to Estate Sale antiques, I bought BP at 27 when Cramer warned it was going BK (good contrarian indicator eh?), and I’m currently shorting the S&P 500 with SPXU. Additionally, I buy small quantities of silver and gold on a regular basis. I would have put one fourth of my house sale into gold in 2005 but the wifey absolutely forbid it, and I sold most of the inheritance my father left me of gold and silver when gold was at 1000 and silver was around 20. My lease expires in August 2012, and I will probably purchase a house in the SGV before then.
Fight on contrarians. May our tribe increase.
Let’s say what happened before had not happened, and prices had just suddenly jumped up to their current level from their prior reasonable level. Would you say there was a bubble?
I would say YES in metro New York, where the typical worker earns about 33 percent more than the U.S. average but the third quarter median home existing sales price of $404,100 was 227 percent higher than the U.S. average of $177,900. Living in or near NYC is worth something, but not that much.
I’m not quite sure about the rest of the country. The median household income is around $50K, which implies a price of $150K at three times, but lots of those households are renters. Then again, median household income is going down.
“I would have put one fourth of my house sale into gold in 2005 but the wifey absolutely forbid it,…”
I certainly hope you now point out her folly in this advice!
Are trying to get the guy killed?!
Good point. It’s best to just go about with an air of smugness whenever discussion of the big runup in gold prices comes up, rather than to rub her face in her foolishness.
Claim Jumper layoffs are possible
Bankrupt company says that 400, including 86 in T.O., might go.
The bankrupt Claim Jumper Restaurants chain has notified the state that it plans to lay off 400 employees in California, including 86 at its Thousand Oaks location.
The notification, required under the Worker Adjustment and Retraining Notification Act, indicates job cuts will happen in December in Irvine, Torrance, Fresno, Thousand Oaks and The City of Industry. WARN notices are mandatory when 50 or more workers are let go and requires that displaced workers receive assistance in finding other jobs.
Holy moly. Landry’s announced a few weeks they had just bought the company at a bankruptcy auction. $76M
HAHAHAHAHHAHAHAHAHAHAHA
Building permits down 25% in October
Slow economy, processing blamed
By Roger Showley
Tuesday, November 23, 2010 at 2:07 p.m.
San Diego County housing permits dropped for the second straight month as economic doldrums appeared to weaken demand, according to figures released Tuesday by the Construction Industry Research Board.
…
Statewide, the picture is similar.
Permit authorizations were down 28 percent to 2,108 units, both month over month and year over year.
Year to date, 34,508 units have been approved, up 14 percent from 30,194 in the same period last year. As with San Diego, California looks to 2010 as being the second worst year, after 2009, since record keeping began in 1954, and 2011 is projected to be the third worst.
“While it’s good that we’re still above last year’s production levels, it was disappointing to see single-family production fall behind last year’s pace,” said Liz Snow, president and CEO of the California Building Industry Association.
“Continued weakness in the job market, high foreclosure rates, and tighter lending standards making it difficult for builders to get projects off the ground are creating the ‘perfect storm’ to deter new-home construction, putting us on track to see the second-lowest year of housing production on record. Until we see improvement in these areas, homebuilding, and the economy, will continue to struggle.”
The research board has reduced its projection for permit activity next year from 74,000 down to 67,500 units. This year is projected at 41,700, down from the earlier estimate of 45,000.
The permit report also included building activity in nonresidential areas. Total valuation was placed at $63.7 million in October, down from $65.3 million in September but up from $25.4 million in October 2010.
Nonresidential activity can vary widely from month to month, depending on which projects get permits.
In October, the big difference from a year ago was alterations and additions at $47.2 million, up from $15.4 million. New miscellaneous buildings also were way up, from $6.3 million last year to $16.5 million this year.
But unlike last year, no permits were issued for commercial or industrial buildings in October. It was the first time in memory that no new commercial buildings were authorized, but the 12th time in 22 months with no industrial buildings approved. That reflects the moribund commercial market, suffering from rising vacancies and falling rents and thus generating no demand for new space in most submarkets.
The research board, which does not track public building activity, estimated statewide construction employment on a seasonally adjusted basis at 531,700 in October, up .5 percent from September but down 7.9 percent from October 2009. For next year, the projection is 562,000 jobs.
Military Pegs Hourly Air Force One Cost at $180G, as Obama Sets Travel Record
The average American could buy a house for the amount of money it takes to run Air Force One every hour.
The U.S. military has provided an updated estimate on that cost, first published by a taxpayer watchdog group and confirmed by FoxNews.com, and the number is staggering — $181,757 per hour. That’s the price tag for shuttling around President Obama, who, as it turns out, has spent more days abroad in his first two years than any other president.
Yet if McCain was president, Fox News would be talking about how cheap a price tag that is to protect our most important citizen and CNBC would be railing against the expenses.
Funny how those two net works live rent-free in so many peoples brains. Thank god I don’t have cable or spend much of my life in front of a TV screen.
Thank god I don’t have cable or spend much of my life in front of a TV screen.
And I’m giving thanks right along with you, wmbz. A TV-free household is the choice for me, and I’m enjoying it immensely.
Yeah, Slim, that makes (at least) two of us here.
You mean MSNBC?
You are right of course. Case in point, TSA. Right hates it now but would have learned to live with it under Bush. And vice versa.
“Case in point, TSA. Right hates it now but would have learned to live with it under Bush. And vice versa.”
I don’t think so…there are plenty of people pissed off at TSA on the left and the right.
It demonstrates the power of the 24 hour news cycle. The TSA has been (IMHO) an ineffective, intrusive and wasteful organization from the get-go (remember the enormiously expensive Christmas parties a few years ago?).
I was a 100K flyer in the 90’s and up until ‘06 when I finally got fed up with air travel and just quit traveling for business. After 9/11 It was the regular subject of Frequent Flyers’ conversations from how little security value the TSA’s “random” carry on luggage searches, pat-downs, and various pieces of scanning equipment brought to the table. But we put up with it as we do most things governmental.
But a few weeks ago, the 24 hour talking heads decided to make it story 1 and now, OMG, its the most horrible thing to be visited on mankind since the Black Death. I keep thinking, aren’t there more pressing issues to deal with.
Get scanned, get patted, or don’t fly, but just get on with it.
TSA, if we did our job any better we would have to buy you dinner first!
Spokaneman, does the phrase “probable cause” mean anything to you?
Just because I want to travel by air (and soon by rail and subway) I should allow myself to be treated like a criminal suspect?
The Fed has recently contemplated buying potentially unlimited amounts of long-term Treasurys as a means of keeping a lid on interest rates. This sounds like it could be very, very lucrative for whichever financial entities are on the supply side of the deal.
FT Alphaville
Double secret US quantitative easing
Posted by Tracy Alloway on Nov 24 08:53.
Ooo, now this is interesting.
Revealed in the latest minutes from the Federal Open Market Committee — a secret Fed video conference to discuss über-quantitative easing. Or, targeting an explicit yield (or ‘ceiling’) on the long-term US Treasury. From the minutes:
Savvy readers will remember us discussing the possibility of the Fed pursuing such a strategy on the very day of that November meeting. There was some talk in the market that it could happen, given that QE v2.0 was already expected.
…
There was an article the other day about people buying up treasuries during the recent dip. I guess they don’t want to fight the FED.
Yeah, talk about everything but jobs.
But hey! Most Fortune 500 just had their 7th straight quarterly profit! But not enough to hire, so don’t get your little peon hearts too hopeful.
David Harsanyi
It’s About Time We Politicized the Fed
Monetary policy is a complex and mystical business — yet it was not, as far as I know, handed down from God to Moses to Alan Greenspan.
But in case you forgot, “it is very important to keep politics out of monetary policy,” the partisan political appointee Timothy Geithner recently explained in an interview with Bloomberg Television. “You want to be very careful not to take steps that hurt our credibility.”
No doubt, because of scarcity, Geithner has developed a profound appreciation for credibility. He is, after all, one of the architects of our “stimulus” infrastructure and a supporter of a monetary policy that managed to unite the entire industrial world against the United States at the recent G-20 meetings.
“U.S. leadership, once taken for granted, has all but vanished, and no one’s in charge,” wrote the editorial board of not the National Review, but the San Francisco Chronicle.
Political or not, perhaps we’ve allowed the power of the Federal Reserve System to go unchallenged for too long. Perhaps we’ve given too much deference to gurus who speak in Fiscal Koans rather than English and hover above human fallibility, oversight and transparency. Maybe it’s time to start thinking about re-examining its role.
Especially now that the Fed has begun a second round of “quantitative easing” — colloquially known as QE2, or “printing a load of money and giving it to big banks.” It will drop another $600 billion into the economy even though the first round of more than $1 trillion failed to do much of anything. In fact, more than $3 trillion has been thrown into the economic mix since we started fixing the recession.
Many economists argue that this kind of policy has the potential to feed economic bubbles, distort trade, push nations to engage in competing devaluations, cause long-term inflation at home and transform your dollar into something … well, less.
…
“…started fixing the recession.”
Click.
You know, there’s this giant pool of lighter fluid (money) underneath the charcoal briquettes. They say they can drain it once the economy relights.
Is that credible?
The Fed
Nov. 23, 2010, 2:10 p.m. EST
FOMC members sour on growth, unemployment
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve’s governors and regional presidents have grown more sour on growth and unemployment, with some saying it could take more than six years for the jobless rate to return to normal levels, according to a summary of projections released Tuesday.
“Relative to their previous projections in June, participants saw weaker real activity this year and expected a somewhat more gradual economic recovery over the next several years,” the minutes from the Nov. 2 and Nov. 3 meeting say.
…
Is that because that’s how long it will take to finally end the tax breaks for offshoring jobs?
You know, the ones the Repubs voted to keep back in September?
Good news rueters
Exuberance made a comeback this year at Josh Koplewicz’s annual Halloween party. More than 1,000 people packed into a 6,000-square-foot space at the Good Units night club in Manhattan, a substantially larger crowd than in the last several years. The open bar was sponsored by Russian Standard vodka, and Mr. Koplewicz, an investment analyst at Goldman Sachs, was able to snag a big headliner: the hip-hop star Lil’ Kim, who performed dressed in a black cat costume.
The scene was more extravagant in September, at a 50th birthday party in Hong Kong for Brian Brille, the head of Bank of America Asia Pacific. Mr. Brille, who is well known on the New York social scene, wore a gray Hugh Hefner-esque jacket. Women dressed like Playmates, with feather boas and satin ears, danced behind a pink silk screen.
Two years after the onset of the financial crisis, the stock market is recovering and Wall Street’s moneyed elite are breathing easier again. And this means in some cases they are spending again
Oh, for crying in a bucket!
Want to know what I did when I turned 50? Well, I woke up and went into my empty studio (it was Saturday) and announced that I no longer cared what other people thought or said about me. And that I no longer cared about how other people reacted to what I said to them.
Well, that was three years ago, and guess what, I haven’t collected a new knuckle sandwich every day. Matter of fact, life has worked out just beautifully. Something about ceasing to care so much about things that didn’t need any caring about at all.
Okay, back to the rest of my 50th birthday. I went down to 4th Avenue to the bicycle swap meet. I had money — woo-hoo! But I didn’t see anything that appealed to me. So, I didn’t spend any of my money at the swap meet.
Then I went home, had lunch, and went to the library. And I didn’t spend any money there either.
“Want to know what I did when I turned 50? Well, I woke up and went into my empty studio (it was Saturday) and announced that I no longer cared what other people thought or said about me.”
Do you color your hair, or confidently natural?
cnbc.com/id/40214649
Confidently natural, and the gray hairs are moving in. Bringing their friends too.
“Confidently natural, and the gray hairs are moving in. Bringing their friends too.”
+1 Natural here too.
I recently went to the funeral of a longtime friend, and I saw people I haven’t seen in decades. Many of them are spending serious money to retain that thirties look. Privately I pondered the psychological issues associated with this masquerade. However I suppose the various employment circles dictate the appearance; glad I don’t work in marketing or sales.
You need to in Healthcare, too.
Not if you work nites. (:>)
What does inflation creation have to do with economic recovery?
I would think that, with other things equal, higher inflation would reduce consumption, hence reducing the amount of real economic stimulus, as the money in people’s pockets will buy less goods, but then I never claimed to understand macroeconomics, whose practitioners apparently believe money (and real wealth) can be printed out of thin air.
I will, however, note that just because a recovering economy often leads to inflation does not necessarily imply that inflation will lead to economic recovery. This reasoning seems fundamentally species. If anyone can provide a shard of evidence to suggest this idea is generally accepted, standard best practice among macro economists, I would be interested in seeing it.
Economic Report
Nov. 24, 2010, 11:54 a.m. EST
U.S. core inflation at record low of 0.9% in October
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — Year-over-year core inflation rose a record low of 0.9% in October, the Commerce Department reported Wednesday.
Federal Reserve officials, worried about too-low inflation, have embarked on a program of buying up to $600 billion in Treasury securities to underpin the U.S. economic recovery.
For September, the year-over-year rate for core personal consumption expenditures, which exclude food and energy, gained 1.2%. The data go back to 1960.
…
“specious,” not “species” (been reading too much about Darwin as of late…)
Hey, Bear, are you okay over there in SD?
Was talking to an SD-dwelling friend who was planning on heading over here today. Nasty weather in the mountains made her decide against making the drive.
Looks like your weather’s going to be interesting for the next day or so. Be safe.
Thanks for worrying about me.
But actually, our weather is just fine. I love days like today when the ocean is angry and the surf is almost too big for the bravest of surfers to ride.
What effing BULLCRAP! Like hell only .09%!!! Thank god nobody actually uses food and energy every day, huh?
Seriously. We’re doomed.
Both Uncle Buck and the markets are rallying today. It’s been a while since that’s happened to this degree.
My son, 13, just walked in and dropped a pearl. He said, “You know how everyone says that Lombard Street in San Francisco is the crookedest street? They’re wrong. It’s Wall Street.”
A gem this one is.
Best Wishes to the HBB community for a relaxing and enjoyable Thanksgiving.
Cheers
Good to see he is paying attention(!)
Keep an eye on him. He’s on the road to figuring out his school is not so great either.
Watch out. They drug the smart ones. I know.
I heard in the 1980s the same tirade against Wall Street. But invested in stock mutual funds since the late 80s. Those crooks increased my wealth far more tan government bonds or gold.
Professor Bear-
The other day you mentioned books for your reading list and this one might be interesting for you -
http://globalresearch.ca/index.php?context=va&aid=20425
Global anger swells at Fed actions
A worker jumps over a puddle near a residential construction site in Taiyuan, Shanxi province October 26, 2010.
Credit: Reuters/Stringer
By Glenn Somerville and Zhou Xin
WASHINGTON/BEIJING | Fri Nov 5, 2010 3:42pm EDT
WASHINGTON/BEIJING (Reuters) - Global anger at a fresh round of liquidity injections into the U.S. economy swelled on Friday as Germany called the move “clueless” and emerging nations protested that it will wreak havoc on them.
Harsh criticism poured in as President Barack Obama headed for Asia on a trip he had hoped to use as a springboard for pressuring China to revalue its yuan but may end up in a fractious Group of 20 leaders summit next week.
The United States has been pressing China, largely unsuccessfully, to let its yuan currency rise more quickly to reflect the strength of what is now the world’s second-largest economy and help correct global trade imbalances.
The Federal Reserve’s decision this week to buy $600 billion in long-term bonds with new money to try to revive the flagging U.S. economy have increased fears of more money pouring across borders in search of better returns.
China landed its own blows by saying a U.S. proposal for numerical targets for surpluses and deficits — akin to a range for yuan appreciation — smacked of outmoded central planning that won’t win any friends for the United States.
Chinese Vice-Foreign Minister Cui Tiankai, who is China’s chief G20 negotiator, told a news briefing that he was also worried at the prospect of a flood of money pouring into global markets in search of higher yields.
“They owe us some explanation,” Cui said. “I’ve seen much concern about the impact of this policy on financial stability in other countries.”
…
* BUSINESS
* NOVEMBER 24, 2010, 3:44 P.M. ET
U.S. Intensifies Foreclosure-Documentation Review
By EVAN PEREZ And DAMIAN PALETTA
WASHINGTON—The Justice Department and other federal agencies have intensified their review of the banking industry’s foreclosure documentation problems, using their powers over bankruptcy proceedings to scrutinize the treatment of troubled mortgages.
A key part of the effort is the Justice Department Trustee Program, the federal watchdog overseeing bankruptcies, which has launched a broad review of Chapter 13 bankruptcy filings by homeowners trying to halt foreclosure proceedings.
A U.S. official said Wednesday that 17 offices around the nation have recently stepped up efforts to scrub Chapter 13 filing documents, looking for documentation errors or improper practices such as inflated fees. Under Chapter 13 bankruptcy, a borrower seeks to halt foreclosure and comes up with a plan to catch up with their mortgage debt within five years.
Leading the federal response is Associate Attorney General Thomas Perrelli, the Justice Department’s No. 3 official, who has been tapped to coordinate the efforts of multiple federal agencies, including the Treasury Department and the Securities and Exchange Commission, and also share information with state attorneys general.
The increased federal scrutiny puts more pressure on the banking industry, which is already dealing with probes by 50 state attorneys general into allegations of the improper use of “robo-signers” to foreclose on homes. The industry is also bracing for the results of a separate probe by the Federal Housing Administration, which is scrutinizing the way banks process mortgage payments.
The reviews could lead to the government requiring banks to overhaul the way they modify mortgages and handle foreclosures, according to government officials involved in the discussions. Under agreements with the states, banks could also have to establish settlement funds to compensate homeowners who have been hurt by foreclosure errors, these people said.
…
Why the Federal Foreclosure Probe is a Sham
By Alain Sherter | November 24, 2010
Senior U.S. Treasury official Michael Barr says federal authorities have found “inexcusable” problems with bank foreclosure practices. In other news, birds are partial to trees.
Sorry for the snark. But I’d be better disposed to Barr’s seemingly no-nonsense acknowledgment that “these problems must be fixed” if the Obama administration had shown a greater desire to, you know, fix them.
From the outset of the robo-signing scandal, however, the White House, Treasury, HUD and other government officials have sought to downplay the crisis. They’ve also tended to show more concern about the impact of illegal foreclosures on financial firms than on homeowners.
As a result, Barr’s statement feels more like a face-saving ex-post admission than the start of an aggressive federal investigation into the foreclosure mess. Neither does the context exactly inspire confidence.
…
You can stick a fork in the U.S. housing market and it won’t budge. Let’s just say it’s as dead as the turkey you will enjoy tomorrow on your Thanksgiving dinner table.
Pillars of support gone from U.S. housing
David Streitfeld
The New York Times News Service
Published Wednesday, Nov. 24, 2010 11:49AM EST
Last updated Wednesday, Nov. 24, 2010 11:51AM EST
Over the last few years, buyers have been lured into the troubled U.S. housing market by two unusual opportunities: cash subsidies in the form of government tax credits, and rock-bottom prices on millions of foreclosed homes.
The tax credits are now history. And the supply of foreclosed homes on the market is already falling as regulators, lawmakers and state law enforcement officials press to sharply reduce the number of foreclosures.
Now, buyers and sellers are getting an early taste of what the real estate market might look like without those twin pillars of support: Sales of existing homes plunged 26 per cent in October compared with the same period last year, the National Association of Realtors said in a report Tuesday.
In some parts of the country, it was the worst October in at least 20 years, according to separate regional sales reports. Sales were down 41 per cent in Minneapolis, 28 per cent in Massachusetts and 34 per cent in Illinois.
In Portland, Ore., (down 39 per cent) and Seattle (down 32 per cent), it was the worst October since record-keeping began in 1994. In California, it was the second-worst October since at least 1994.
“People aren’t buying houses - period,” said Mark Fleming, an economist with CoreLogic, a data firm.
…
Bank Foreclosure Fiasco: BofA (NYSE:BAC) In Danger Of Undertow
By Victor Hatley on November 22, 2010, 3:55 pm Posted in Finance News
Last week a supervisor and operational team leader working at the Litigation Management Department, of BAC Home Loans Servicing, Linda DiMartini, testified in open court during the foreclosure case of Kemp vs. Countrywide Home Loans that it was “customary for Countrywide to maintain possession of the original note and related documents.” This creates a very precarious position for BofA.
Millions In Buy-Backs
Due to the fact that 96% of the Countrywide loans were securitized, the Bank of America may find that they have millions in loans showing on their books that they thought had already been transferred to the trusts that originally issued the securities. If their mortgage backed securities do not in fact, then the investors who bought them will have the option before them to force BofA to buy these securities back. A large amount of these buybacks, and the BofA could find their balance sheet in tatters.
No Salvation In Sight
BofA won’t be able to hold the dog’s off for long either. Their efforts to stave off either outcome retroactively by giving the notes over today would prove worthless. First of all, the contracts used to make the trusts will usually not allow transferring the loans to the trusts now. Secondly is that even if somehow the aforementioned could happen, this transfer would nullify any special tax status the mortgage backed securities get, this would serve to give the investors completely different reasons for pulling back their securities or sue over them.
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PNC Owns Empty House, Buyer in Motel Amid Foreclosure Mess
By David Henry - Nov 24, 2010 3:00 AM PT
PNC Financial Services Group Inc. was on the brink of selling Jim Durden a foreclosed house in Weed, California, last month when the country’s biggest banks came under public fire for improperly seizing homes. Now, he lives in an EconoLodge.
“I can’t get the house ready for winter, can’t install the missing water heater, can’t whack the weeds down, and can’t attend to the things a new homeowner needs to do,” Durden, 65, e-mailed from the motel. He has been in limbo since Oct. 7 after moving his belongings 640 miles north from a Los Angeles apartment.
After Bank of America Corp. and other lenders delayed seizures almost two months ago to check their sworn court statements in thousands of foreclosures, a growing number of would-be buyers are struggling to close deals — a sign that the documentation mess is dragging on the market. October sales of existing homes fell more than economists forecast, dropping 2.2 percent, the National Association of Realtors said yesterday.
Even PNC, which has said an internal review found its procedures are designed to prevent unwarranted foreclosures, has ready buyers claiming the bank’s examination of completed seizures is derailing deals. A spokesman for the Pittsburgh- based lender declined to comment on Durden’s case and others.
“We heard of virtually none of this happening until the so-called robo-signing scandal and subsequent foreclosure freeze,” said Rick Sharga, senior vice president of RealtyTrac Inc., an Irvine, California-based real estate data provider. While there is no estimate yet for how many sales are stalled, stories like Durden’s are increasingly popping up as firms try to ensure property titles are clear for resale, he said.
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Foreclosure Probe Talks Include Mortgage-Backed Bond Investors Urging Deal
By Margaret Cronin Fisk and David McLaughlin - Nov 24, 2010 10:39 AM PT
Mortgage-backed securities holders are pushing for a resolution of a 50-state probe of foreclosure practices, attorneys general in Iowa and Arizona said as talks with lenders and servicers expand to include investors.
“The mortgage backed securities are worth pennies on the dollar, so any kind of recovery would be better,” Arizona Attorney General Terry Goddard said in an interview. Owners of mortgage-backed securities are “one of the players urging a resolution,” he said. State officials have begun informal talks with some investors, Iowa Attorney General Tom Miller said.
All 50 U.S. states are investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe, announced Oct. 13, came after JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America Corp., the largest U.S. lender, froze foreclosures nationwide.
The probe has since widened to include other mortgage practices, with attorneys general suggesting any potential resolution should include improving the loan modification process, barring foreclosures when people are modifying loans and creating a general fund to compensate homeowners who may have been victims of wrongful foreclosures.
“Robosigning was the straw that broke the camel’s back,” Goddard said, referring to the practice of loan servicer employees signing thousands of documents without determining if they were accurate. “It was proof positive that it wasn’t just in one state and virtually every financial institution was complicit.”
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